Novartis to Invest $23B in US Sites Amid Drug Tariff Pressure

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Novartis has announced a five-year plan to invest $23 billion in the United States, marking a pivotal shift in the pharmaceutical industry’s global manufacturing strategy. The Swiss company’s move comes as renewed threats surge to impose tariffs on pharmaceutical imports.

This announcement arrives at a moment of heightened focus on supply chain resilience. While Novartis CEO Vas Narasimhan noted that the potential for tariffs played a role in the decision, he emphasized the company’s commitment to ensuring that all Novartis drugs sold in the United States are produced domestically.

Inside Novartis’s five-year plan for US expansion

The company’s $23 billion investment includes the construction of six new manufacturing facilities and the expansion of four existing sites. It also features the creation of a research and development hub in San Diego, which will serve as a central site for innovation and clinical development.

According to the company, the investment will create approximately 1,000 new jobs at Novartis, and lead to around 4,000 other jobs in the U.S. outside of Novartis. The initiative is expected to create over 4,000 jobs across a variety of roles, including engineering, quality control, logistics, research, and construction. The selected regions include parts of California, North Carolina, and the Midwest, though not all site locations have been disclosed.

Trade policy pressure reshapes pharmaceutical production

The Trump administration is planning to impose tariffs on imported pharmaceuticals, adding urgency to the push for domestic manufacturing. Unlike earlier rounds of tariffs, which largely spared the pharmaceutical sector, this new phase would directly target imported medications and ingredients.

Novartis is one of several global manufacturers responding to the shift. Narasimhan described the company’s plan as both a proactive move and a response to evolving trade policy. The strategy reflects growing pressure on multinational drugmakers to reduce their reliance on overseas suppliers.

During the COVID-19 pandemic, supply chain fragility in the healthcare sector prompted renewed calls for greater production within the United States. Novartis’s decision fits this broader movement, which blends market strategy with policy adaptation.

Industry-wide response to domestic manufacturing push

Novartis is not alone in responding to these trade policy signals. Eli Lilly and Johnson & Johnson have each announced new US-based projects, reflecting an industry-wide shift toward regional production hubs. As companies compete for domestic market share and favorable regulatory treatment, the pharmaceutical manufacturing map is beginning to change.

At the same time, these developments bring new challenges. Analysts warn that reshoring production may lead to higher drug prices, particularly for medications that depend on complex global supply chains.

For consumers, locally produced medications may bring greater assurance around supply reliability. However, there is uncertainty over whether these benefits will be passed on in the form of lower costs or better access.

Domestic manufacturing could streamline logistics and reduce vulnerability to disruptions, but the scale of investment involved may result in higher prices unless efficiencies are achieved or subsidies are introduced.

Sources:

• Bloomberg