Novartis CEO Vas Narasimhan outlined at the World Economic Forum in Davos that the company’s $23 billion investment in U.S. facilities, announced in late 2025, serves as a strategic defense against tariffs proposed by the Trump administration. By expanding domestic production capacity across three new drug-substances plants and five finished-dosage facilities, Novartis can source the majority of its U.S. supply locally. Existing inventories of key therapies provide an additional buffer against possible 10% levies starting February 1 and escalating to 25% by June on European imports, safeguarding short-term revenues and minimizing disruption to the U.S. commercial roll-out of recent launches such as Pluvicto and Kesimpta.

Under a December agreement with the U.S. administration, Novartis pledged to support federal drug-pricing objectives by aligning launch prices of new medicines in the U.S. with those in other high-income countries. Narasimhan emphasized that committing to this pricing framework enhances the company’s prospects for securing tariff exemptions and bolsters its reputation among policymakers. The deal also contemplates joint initiatives to reduce patient out-of-pocket costs—a priority highlighted in recent discussions on ‘most favored nation’ policies—positioning Novartis as a proactive partner in U.S. healthcare reform.

Novartis reaffirmed its projection of a 5–6% compound annual constant-currency sales growth rate from 2025 to 2030, driven by an enriched pipeline and lifecycle management of established franchises. The company cited late-stage candidates in oncology and immunology, including zandelisib and iptacopan, as key catalysts. On the back of recent FDA approvals and label expansions for Entresto and Kesimpta, management expects steady margin expansion supported by economies of scale from its U.S. operations and disciplined cost management globally.

To ‘future-proof’ its U.S. business, Novartis is simultaneously securing additional API (active pharmaceutical ingredient) supplies from non-European sources and advancing plans for a fourth U.S. manufacturing hub by 2027. This two-pronged approach addresses the risk of trade tensions while positioning the group to ramp up capacity if tariff exemptions are not granted. Investors can view these measures as evidence of Novartis’s commitment to supply-chain agility and sustained profit growth in its largest market.