
SHERIDAN, WYOMING – July 21, 2025 – Novartis is intensifying its strategic push to relocate key drug manufacturing operations to the United States, aiming to safeguard its U.S. market position against potential tariff impacts. In its second-quarter earnings call last Thursday, CEO Vas Narasimhan emphasized the urgency of reshoring production, while acknowledging the complexity of fully transitioning manufacturing operations.
Novartis Targets Full U.S. Production for Key Medicines
Novartis confirmed its commitment to moving the production of its major medicines for the American market entirely to the U.S. “We’re moving as fast as possible to ensure that within the next few years we’re able to produce our key medicines [in the U.S.] and therefore fully mitigate the tariff impact,” stated Narasimhan.
Central to this effort is a substantial investment strategy highlighted by a $23 billion commitment to new U.S. operations, including:
- A recently signed lease for a large-scale research facility in San Diego
- The launch of construction on another new radioligand therapy facility, with details on size and location yet to be disclosed
While Novartis is expediting its reshoring plans, Narasimhan acknowledged the inherent challenges. “Moving production of ‘most medicines’ from one location to another typically involves a ‘3- to 4-year horizon,’” he said, reflecting industry-standard timelines for complex pharmaceutical manufacturing transitions.
Tariff Uncertainty Drives Strategic Response
The urgency behind Novartis’ reshoring strategy intensified following President Donald Trump's announcement earlier this week that pharma tariffs—potentially reaching up to 200%—could be imposed as early as August 1. Narasimhan cautioned that such tariffs would have a “significant” impact on Novartis’ business, though exact consequences would vary product by product depending on tariff implementation specifics.
“We’re hopeful that the administration gives consideration to companies like us who are making the investments to move our productions in the U.S.,” Narasimhan noted, pointing to the anticipated grace period of “about a year, a year and a half” for supply chain adjustments that Trump had previously indicated.
Strong Q2 Performance Amid Competitive Challenges
Novartis reported solid second-quarter financial results, with net sales rising 11% year-on-year to over $14 billion. Performance highlights include:
- Entresto, the heart failure treatment, maintaining its position as the top-selling product with $2.34 billion in Q2 sales
- Kisqali, the breast cancer drug, surging 64% to nearly $1.18 billion
- Scemblix, for leukemia, increasing 79% to nearly $300 million
- Leqvio, targeting hyperlipidemia, growing 61% year-on-year to almost $300 million
However, Novartis faces challenges, notably after a New Jersey court decision on Tuesday that could allow generic competition for Entresto, potentially impacting future revenues.
Pipeline Adjustments and Outlook
On the R&D front, Novartis announced that ianalumab, its investigational antibody for hidradenitis suppurativa, failed to meet Phase II endpoints and will be discontinued.
Despite this, the company remains confident about its financial trajectory. It raised its 2025 outlook, projecting:
- High single-digit net sales growth
- Core operating income growth in the low-teens range
Positioning for Resilience and Growth
Novartis’ reshoring initiative reflects a proactive strategy to navigate regulatory uncertainty while strengthening its U.S. manufacturing footprint. The combination of robust product performance and forward-looking investment signals the company’s intent to sustain its competitive edge in the evolving pharmaceutical landscape.
Learn more at www.novartis.com.