Novartis has built up a stockpile of drugs in the U.S. through mid-2026 and plans to localize production to minimize risks from Trump administration tariffs.
Novartis Increases U.S. Drug Stocks to Avoid Tariff Risks
Novartis (NVS) has significantly increased its stockpile of drugs in the U.S. to protect the market from the potential impact of President Donald Trump’s tariff policies, CEO Vas Narasimhan told Swiss newspaper Neue Zuercher Zeitung.
The pharmaceutical industry is currently exempt from the 39% tariffs that Washington imposed on Switzerland last month. At the same time, the U.S. is investigating the industry, which could lead to tariffs. In addition, the U.S. signed a trade deal with the EU in July that imposes a 15% tariff on pharmaceuticals, excluding some generics.
Localizing production
Novartis has already announced investments in the US of $23 billion and plans to partially relocate production for the American market in the coming years. According to Narasimhan, the company will be able to quickly transfer some processes to the US – for example, final packaging and packaging of products. This should allow “complete neutralization of any tariffs”.
Risk of new tariffs
Narasimhan admits that it is difficult to assess the probability of potential tariffs of up to 250% within the framework of the Section 232 investigation. “We are considering all possible scenarios and hope that the government will take into account: scaling up production in the US takes time,” he noted.
The timing of the publication of the investigation’s conclusions is not yet known, so the pharmaceutical industry remains in wait-and-see mode.
