AstraZeneca unveils US$50bil investment as pharma tariff threat looms

New Straits Times

3 days ago

WASHINGTON: AstraZeneca plans to spend US$50 billion to expand manufacturing and research capabilities in the US by 2030, it said on Monday, the latest big investment by a pharmaceutical company reacting to President Donald Trump's tariff policy.
The investment will fund a new drug manufacturing facility in Virginia and expand research and development (R&D) and cell therapy manufacturing in Maryland, Massachusetts, California, Indiana and Texas, it said in a statement.
It will also upgrade the Anglo-Swedish drugmaker's US clinical trial supply network and support ongoing investment in novel medicines.
On Monday, AstraZeneca said the expansion supports its ambition to reach US$80 billion in annual revenue by 2030, with half coming from the US.
The US accounted for more than 40 per cent of AstraZeneca's annual revenue in 2024, and the company had been prioritising the market – the world's largest, worth US$635 billion – before Trump's return to office.
The move to scale up its US footprint is the latest by a drugmaker as Trump threatens to impose import tariffs on the industry and seeks to boost domestic manufacturing. The sector has historically been spared from trade disputes.
Trump has called on pharma companies to make more of the medicines they sell in the US within the country, rather than importing active ingredients or finished medicines.
He is also pushing for prices in the US to fall to what other countries pay.
CEO Pascal Soriot announced the plans in Washington, saying he believes that drug prices need to rise elsewhere and "equalise" with other countries effectively contributing more to research and development costs.
"The United States cannot build or carry the cost of R&D for the entire world," he said.
US Commerce Secretary Howard Lutnick's department is leading a probe into pharmaceutical imports that could pave the way for new tariffs.
"For decades Americans have been reliant on foreign supply of key pharmaceutical products. President Trump and our nation's new tariff policies are focused on ending this structural weakness," said Lutnick in a statement issued by AstraZeneca.
While Trump has repeatedly threatened tariffs on the sector, he signalled earlier this month that companies would be given a year to 18 months to "get their act together" before any levies take effect.
The company said that the timing and location of the announcement was linked to the US policy environment, though some of the spending would have occurred regardless so that the infrastructure for future medicines was in place.
The pledge is in addition to the US$3.5 billion in investments the company announced in November 2024, the statement said.
Pledges
The US$50 billion pledge matches the commitment announced by Swiss rival Roche in April and follows new spending plans unveiled this year by Eli Lilly & Co, Johnson & Johnson, Novartis, and Sanofi.
Also present at the announcement was Virginia State Governor Glenn Youngkin, a vocal Trump ally who has defended the administration's tariff policies.
The new Virginia facility – the company's largest single manufacturing investment – will produce active ingredients for AstraZeneca's experimental weight-loss medicines, including its oral GLP-1 candidate and an oral PCSK9 inhibitor for cholesterol management, it said.
The company said the investment could create tens of thousands of new jobs, but declined to give specifics. It employs about 18,000 people in the US and has a global workforce of about 90,000.
In January, it scrapped plans to invest £450 million (US$607.10 million) in its vaccine manufacturing plant in northern England, citing a cut in government support.
Earlier this month, The Times reported the company was considering moving its stock market listing from London – where it is the exchange's most valuable company worth £159 billion – to the US. The company declined to comment.