So far in his second term, President Donald Trump has been trying to coerce international corporations to bolster their spending in the United States, including through his controversial tariffs. But one of his recent actions could have the reverse effect, if you take Switzerland's Roche at its word.
On the heels of Trump's recent "Most Favored Nation" executive order on drug pricing, Roche is signaling that it could reconsider its U.S. investment plans.
"Should the proposed Executive Order go into effect, Roche’s ability to fund the significant investments previously announced in the US will be in question," a spokesperson said via email. "Overall, we are concerned that the Executive Order will undermine the US’s position as the world’s leading pharmaceutical and healthcare ecosystem, as well as dampen economic growth and lead to job losses in the US."
Trump on Monday signed an Executive Order seeking to tie U.S. drug prices to lower prices in other developed nations. While there are many unknowns about the measure, the industry was quick to hit back and share its concerns.
In a statement after the signing ceremony, Stephen Ubl, the CEO of trade group PhRMA, said that "importing foreign prices from socialist countries would be a bad deal for American patients and workers."
"It would mean less treatments and cures and would jeopardize the hundreds of billions our member companies are planning to invest in America—threatening jobs, hurting our economy and making us more reliant on China for innovative medicines," Ubl added.
While acknowledging that U.S. drug prices are high, Ubl placed a focus on pharmacy benefit managers, hospitals and insurers rather than on drug companies. Those healthcare players "take 50% of every dollar spent on medicines," Ubl said.
Before the executive order, Roche recently laid out plans to swell its U.S. footprint through a $50 billion investment over five years. The investment push includes several new manufacturing plants and an expansion and upgrade of pharma and diagnostics R&D centers in several states.
The company further plans supply chain upgrades in Kentucky, Indiana, New Jersey, Oregon and California, according to its press release last month.
In the company's new statement, Roche stressed that the "Foreign First Principle" would "lead to cuts on hundreds of billions of future US pharmaceutical R&D and manufacturing investments while not addressing significant market distortions."
Further, the drugmaker reiterated PhRMA's talking point that "half of every US dollar spent on medicines goes to insurers, hospitals and pharma benefit managers."
Besides Roche, other pharma giants such as Eli Lilly, Johnson & Johnson and Gilead Sciences have touted their U.S. investment plans in recent weeks.