Novartis Announces $23 Billion U.S. Investment to Boost Manufacturing and R&D
In a significant move to enhance its U.S. operations, Swiss pharmaceutical giant Novartis has unveiled plans to invest $23 billion in building and expanding 10 facilities across the United States over the next five years. This strategic initiative follows similar investment commitments from major industry players like Eli Lilly and Johnson & Johnson, marking a trend among pharmaceutical companies to bolster their domestic manufacturing capabilities.
Aiming for Self-Sustainability in U.S. Medicine Production
According to a press release from Novartis, the company’s investment will not only enhance its production capacity but is also aimed at producing all its key medicines for U.S. patients entirely within the country. The announcement was first reported by Reuters, following an interview with Novartis CEO Vas Narasimhan.
As part of the planned expansion, Novartis will construct four entirely new manufacturing facilities in states yet to be determined. Additionally, the company will establish new radioligand therapy plants in Florida and Texas, while also expanding existing facilities in Indiana, New Jersey, and California. These radioligand plants are expected to support Novartis’ commercial radiopharmaceuticals, including Lutathera and Pluvicto.
Comprehensive Manufacturing Upgrades
The new sites are projected to handle various aspects of drug manufacturing, including biologic drug substances, final drug products, chemical drug substances, and oral solids. Moreover, the plants will be equipped for device assembly and packaging duties, further strengthening Novartis’ manufacturing infrastructure in the U.S.
Currently, Novartis manufactures several key drugs, which include cell and gene therapies and radiopharmaceuticals, within the U.S. The new investment will bring the company’s small interfering RNA (siRNA) production to the U.S. for the first time and enhance its capabilities in oncology, immunology, and neuroscience.
Investment in Research and Development
Alongside the expansion of its manufacturing footprint, Novartis also plans to invest $1.1 billion to establish a new R&D hub in San Diego. Set to open in 2028 or 2029, this facility is described as the “epicenter” of Novartis’ West Coast research presence, reflecting the company’s commitment to increasing domestic drug discovery efforts.
In total, these initiatives are projected to create approximately 1,000 new jobs at Novartis, further contributing to the U.S. economy.
Responses to Trade Policies
Novartis’ announcement comes shortly after U.S. President Donald Trump introduced new tariffs on imports, which included a 10% base duty on nearly all U.S. imports and reciprocal trade penalties for countries with significant trade deficits. Although pharmaceuticals were exempted from the latest round of tariffs, the renewed threats of sector-specific duties targeting the pharmaceutical industry have prompted a reevaluation of investment strategies by numerous companies.
CEO Narasimhan refrained from directly addressing the tariffs in the recent press release, instead focusing on Novartis’ “strong U.S. growth outlook.” He emphasized the supportive “pro-innovation policy and regulatory environment” in the U.S. that enables Novartis to drive medical innovations.
Competition among Pharma Giants
The competitive landscape among pharmaceutical companies is intensifying, as similar investment plans have emerged from other industry leaders. In February, Eli Lilly announced it would invest $27 billion in the U.S. for the construction of four new production facilities—more than doubling its prior domestic investment since 2020. Similarly, Johnson & Johnson disclosed plans for a $55 billion investment in U.S. operations over the next four years, which includes the construction of three new manufacturing sites and expansions of existing facilities.
The combined efforts of these companies signify a pivotal shift towards greater domestic manufacturing capabilities among U.S. pharmaceutical firms. Biopharma leaders have warned that without substantial policy changes in favor of domestic life sciences investment, the European Union could risk losing R&D and manufacturing infrastructure to the U.S.
Conclusion
As Novartis embarks on its $23 billion investment journey, the pharmaceutical industry is witnessing a transformative era driven by geopolitical factors and a commitment to enhancing domestic capabilities. It remains to be seen how these investments will shape the future landscape of pharmaceutical manufacturing and research in the U.S.