Drugmaker AstraZeneca shifts more production to US amid Trump tariffs

AstraZeneca announced a shift in production location for some US-sold medicines from Europe to the US to counteract the impact of trade tariffs by Donald Trump. The FTSE 100 pharmaceutical company highlighted the risk of the UK and Europe losing ground to the US and China if they do not increase spending on new medicines. Pascal Soriot, AstraZeneca’s CEO, cautioned that high-paying advanced manufacturing and research jobs could relocate to the US in the long term.

Although the pharma sector faces potential US tariffs, which have been largely excluded under a 1995 World Trade Organization agreement to maintain affordable medicines, Soriot stated that AstraZeneca’s exposure would be minimal. Even if tariffs were applied within a certain range against European imports to the US, the company could still meet its targets this year due to existing US inventories. The majority of medicines sold by AstraZeneca in the US are already manufactured in the country at 11 sites.

Soriot explained that while a small portion of US-sold medicines are imported from Europe, efforts are underway to shift manufacturing to the US. He emphasized that this change would not impact the UK. AstraZeneca’s ability to relocate production stems from having dual sourcing arrangements for most products, covering the US and Europe, while China maintains a self-reliant supply.

The company recently invested $3.5 billion in US manufacturing and research, including cell therapy, and $2.5 billion in Beijing. Soriot, like other pharmaceutical executives, urged European governments to prioritize healthcare spending, particularly on new medicines, akin to the increased focus on defense. He advocated for a Europe-wide list price for medicines, with potential discounts based on individual countries’ financial capabilities.

Soriot criticized the UK for not making AstraZeneca’s drug Enhertu available on the NHS in England and Wales due to cost concerns, despite being accessible in Scotland and many other European nations. He expressed disappointment over failed negotiations and decisions impacting the company’s operations in the UK.

AstraZeneca’s revenue surged by 13% to $15.6 billion in the first quarter, driven by growth in cancer drugs and biopharmaceuticals. The company is facing potential fines in China related to unpaid taxes for certain treatments but maintains its commitment to compliance and improvement in its Chinese operations.