Despite the slow trickle of updates on President Donald Trump’s proposed pharmaceutical import tariffs, drugmakers have continued to make U.S. manufacturing pledges throughout the year. Now, Hikma Pharmaceuticals is joining the queue with a major investment plan that challenges the notion that Trump’s trade duties might be too much to bear for the lower-margin generic medicine industry.
Hikma plans to throw down $1 billion by 2030 to expand its manufacturing and R&D firepower in the U.S., where the company has been in operation since 1991. The new outlay builds on more than $4 billion in U.S. investments over the past 15 years, Hikma said in a June 28 press release. The company’s U.S. workforce stands at around 2,300, according to a statement from Hikma Rx President Hafrun Fridriksdottir, Ph.D.
The investment plays into the Trump administration’s touted aim to increase the production of drugs for U.S. patients on U.S. soil, with Hikma branding the initiative “America Leans on Hikma: Quality Medicines Manufactured in the USA.”
Hikma will use the investment to beef up sites in Columbus and Cleveland in Ohio as well as Cherry Hill and Dayton in New Jersey.
Hikma announced the domestic cash infusion in tandem with a groundbreaking ceremony at an upcoming research and production facility in Columbus, which was attended by U.S. Representatives Mike Carey and Buddy Carter. Carter is a licensed pharmacist and chairman of the American-Made Medicines Caucus.
Hikma produces a broad range of lower-cost generic medicines for the U.S. market. In the last 15 years, Hikma has asserted itself as one of the U.S.’ top three sterile injectable suppliers by volume, Bill Larkins, Ph.D., president of Hikma Injectables, said in a statement. Hikma’s sterile injectable manufacturing in particular is set to benefit from the $1 billion cash infusion, Larkins noted.
“It's important that we onshore the production of these critical drugs,” Rep. Carter said in a statement on the investment. “I will continue working with Hikma to strengthen our national security and public health by making life-saving generic medications here, in America.”
Restoring the U.S.’ manufacturing base has been a major goal of the second Trump administration’s trade policy. Even though pharmaceutical import tariffs have yet to materialize, the threat alone has spurred an outpouring of investment announcements from pharma companies in recent months.
Still, Hikma’s investment is unique given the company’s role as a producer of generic medicines. To date, the vast majority of production pledges made this year have come from branded drugmakers.
Generic drugs have been held up by industry watchers and experts as a crucial segment of the U.S. healthcare ecosystem that is slated to suffer if pharmaceutical tariffs eventually do come down.
Unlike branded drugmakers, generics companies operate on much thinner margins and have “little resilience” to weather a pharmaceutical trade war, Ronald Piervincenzi, Ph.D., CEO of the United States Pharmacopeia (USP), warned in an interview earlier this year.
Any disruption to the industry could trigger manufacturing discontinuations, shortages and myriad other issues for off-brand drugmakers and the many U.S. patients who rely on their products, he said.
Piervincenzi’s remarks came shortly after USP published a report concluding that the U.S. produces just 12% of the active pharmaceutical ingredients (API) used in domestic medicines. Roughly 90% of the U.S.’ total prescription volume consists of generics, with around 35% of those copycat drugs made from APIs manufactured in India, the report asserted.
The USP chief is hardly alone in his views, with Sandoz CEO Richard Saynor telling Reuters in late April that if tariffs are imposed on pharmaceuticals, his company might have to withdraw some of its products from the U.S. market. The threat of generics makers pulling lower-margin products from the U.S. over tariff pressures was one echoed by USP’s Piervincenzi.
Pharmaceuticals were exempted from Trump’s much-anticipated Liberation Day tariff reveal in early April, though the administration has repeatedly indicated that drug duties are still on the table. To that end, the administration launched a Section 232 investigation earlier this year, which gives the President the power to impose tariffs and other restrictions if the probe uncovers national security threats within the U.S.’ pharmaceutical trade network.
Such investigations have been used to justify tariffs on other goods like steel, aluminum and automotive imports.
Trump most recently told reporters in mid-June that pharma tariffs are expected “very soon,” and that the move is “going to bring all the companies back into America.” Still, as with previous pharmaceutical tariff announcements, details were slim, and a firm timeline was not provided.