Swiss pharma giant Novartis NVS announced a planned $23 billion investment over five years in U.S.-based infrastructure.

Backed by this investment, the company intends to manufacture all key drugs for its U.S. patients in the country.

NVS' decision to expand its current manufacturing, research and technology presence across the country follows President Trump's announcement of tariffs on pharmaceutical imports.

The company's shares are up in pre-market. Novartis’ shares have risen 8.7% year to date against the industry’s decline of 8.2%.

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Why is NVS Expanding R&D Presence in the United States?

Last week, Trump announced new tariffs on almost all trading partners in a move to reportedly boost domestic manufacturing. The so-called “reciprocal tariffs” included a 34% tax on imports from China and 20% on the European Union, among others, along with a 10% baseline tax on imports from all countries.

Earlier this week, Trump disclosed plans to impose a new series of tariffs on pharmaceutical imports (which, until now, have been free of such tariffs) to encourage pharmaceutical companies to move their operations to the United States. He stated that the United States offers a very big market, and the new tariffs will propel pharmaceutical companies to rush back to the country.

Per reports, the United States imports large amounts of finished drugs from other countries, and a significant chunk of this comes from China, which has retaliated with increased tariffs in response to Trump’s announcement.

The imports comprise finished drugs as well as active pharmaceutical ingredients (APIs) used to make drugs.  Per Trump, the tariffs on pharmaceutical imports will force the companies to leave China.

Stock markets worldwide plunged due to a likely slowdown, exacerbated by new tariffs. Thereafter, President Trump announced a 90-day pause on reciprocal tariffs for non-retaliating countries.

More on NVS’ Expansion Plans in the United States

NVS expanded its manufacturing and R&D presence in the country by investing in 10 facilities, including seven brand-new ones.

Over the next five years, Novartis will establish a biomedical research innovation hub in San Diego, CA, its second global R&D hub in the United States. This is expected to open during 2028-2029.

The company will build four new manufacturing facilities in three states. Among these, three will be engaged in biologics drug substances, drug products, device assembly and packaging and one facility will make chemical drug substances, oral solids dosage forms and packaging.

NVS also plans to build two new radioligand therapy (RLT) manufacturing facilities in Florida and Texas and expand three RLT manufacturing facilities in India    napolis, IN, Millburn, NJ and Carlsbad, CA.

These investments will ensure Novartis has manufacturing capacity in the United States for all its core technology platforms, including small molecules and biologics, and is able to produce 100% of its key drugs in the country.

NVS believes that the investment supports its sales guidance of 5% CAGR during 2024-2029. Over the next five years, the total investment in US operations is expected to be nearly $50 billion.

We note that other pharmaceutical companies, such as Novo Nordisk and Eli Lilly, have already expanded their manufacturing capacity in the United States, primarily to meet the increased demand for their lucrative obesity drugs.

NVS’ Zacks Rank and Stocks to Consider

Novartis currently carries a Zacks Rank #3 (Hold).

A couple of better-ranked stocks in the pharma/biotech sector are Bayer BAYRY and ADMA Biologics ADMA, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Bayer

In the past 60 days, Bayer’s earnings per share (EPS) estimate for 2025 have increased to $1.19 from $1.14. During the same timeframe, the figure for 2026 has increased to $1.28 from $1.23. Shares of BAYRY have surged 15% in the past three months.

ADMA Biologics

ADMA’s EPS estimates for 2025 have increased to 71 cents from 69 cents in the past 60 days. The EPS estimate for 2026 has increased to 93 cents from 87 cents in the same timeframe. Shares of ADMA have gained 8.9% year to date.

 

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This article originally published on Zacks Investment Research (zacks.com).

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