Tariffs effect on pharmaceuticals: 316 billion invested in the US

With tariffs, even if only announced, the Trump administration is achieving its goals. Especially in the pharmaceutical sector, where companies risk tariffs of 200%. At least that would seem to be the case from the latest statements of the US president, who during a cabinet meeting announced 'shortly' a new package of tariffs on imported pharmaceutical products. The proposal envisages a period of about one year to allow pharmaceutical groups to relocate their production to the US before the tariff is introduced. And a shower of announcements in this direction had already come in recent months for a figure that is currently estimated at 316 billion for the 10 groups, American and foreign, with commitments of over 10 billion each.

Astrazeneca was added to the roster of big pharma, which will make huge investments in the country in the near future, on Monday. The British-Swedish group announced a $50 billion investment plan in the US by 2030, specifying that the funds will be allocated to both production and research and development. In detail, $4 billion will be invested in a new plant in Virginia, dedicated to the production of drugs for chronic diseases. "With the completion of this investment, virtually all of AstraZeneca's drugs sold in the United States will also be manufactured in the United States," said Kevin Hassett, director of the US National Economic Council, at an event in Washington. On the other hand, the CEO of Astrazeneca himself declared himself in favour of the US administration's strategy of bringing drug production into the country: 'It's a matter of national security. It is a view we fully understand and share. The tariffs are simply accelerating a process that we would have started anyway'.

Astrazeneca's announcement follows that of a dozen big pharma companies. Since Donald Trump's inauguration, the major European pharmaceutical groups have announced increasingly ambitious investment plans in the United States: last April, Novartis announced a $23 billion plan to develop infrastructure in the United States, as did the other Swiss group Roche, which declared an investment of $50 billion; in May, the French giant Sanofi also revealed its intention to invest at least $20 billion by 2030 in the country. The same strategy has been deployed by Asian groups, such as Takeda, whose CEO Christophe Weber has announced $30 billion of investment in the US: "This reflects the fact that the US is the world's leading market for biopharmaceutical innovation", stressing however that the investment strategy "is not new" and is aimed at maintaining Takeda's presence in the US, which includes an "impressive" production network.

American groups are not to be outdone, since in many cases they have to bring back production that they had relocated elsewhere in order to avoid tariffs. Thus Johnson & Johnson announced 55 billion in investments, Bristol Myers Squibb 40 billion, Eli Lilly 27 billion, Gilead Sciences 11 billion and Abb Vie 10 billion. Added to these are a number of companies that have announced smaller commitments, but still in the billions, such as the biotech Ucb (5 billion for a new plant).

An initial effect of the huge investments announced has been seen in the real estate market. In the last six months alone, according to a report by broker JLL, demand for equipped production space has increased by 185%, signalling an acceleration on the part of both pharmaceutical companies and contract development and manufacturing organisations in wanting to expand their operational presence on American soil.