Novartis unveils $23B US investment in manufacturing and R&D

Novartis is launching its latest investment initiative shortly after President Donald Trump introduced sweeping new tariffs on imports. Dubbed “Liberation Day” tariffs, the policy set a 10% base duty on nearly all U.S. imports and introduced varying reciprocal penalties for countries with significant trade imbalances. While Trump halted most of these reciprocal tariffs for 90 days, tariffs on Chinese imports have skyrocketed to an astounding 145%.

This round of tariffs specifically exempted pharmaceuticals. So, renewed threats of sector-specific tariffs, possibly going as high as 25% or more, reduced investor confidence, which is reflected in recent pharma stock declines.

Nevertheless, Novartis helmsman Narasimhan did not mention tariffs but lauded the U.S. as a major growth market while also recognizing its “pro-innovation policy and regulatory environment” as important for advancing medicine.

He added, "We are prepared for shifts in the external environment and fully confident in our 2025 guidance, mid- to long-term sales growth outlook and 2027 core margin guidance".

Trump's tariffs have spurred major pharmaceutical companies to increase their investments in the United States. Eli Lilly, in February, announced a $27 billion plan to build four new domestic production facilities, significantly increasing its capital investments in manufacturing since 2020. A month later, Johnson & Johnson announced a $55 billion investment over the next four years to expand three manufacturing sites and support its pharmaceutical and medtech infrastructure-a 25% increase from the previous investment round.

The biopharma executives warned the European Commission following the April 2 tariff announcement that without rapid and seismic shifts in its policies, the bloc may find itself losing significant investments, R&D capabilities, and manufacturing infrastructure to the U.S., which now seems to be tilting towards the global pharma players.