Novartis Boosts U.S. Drug Stockpiles Ahead Potential Tariffs

Novartis has significantly increased its stockpiles of pharmaceuticals in the U.S. to prepare for potential tariffs under President Donald Trump's trade policies, with current reserves sufficient to last until mid-2026. While pharmaceuticals are currently exempt from the 39% tariffs imposed on Switzerland, ongoing investigations and a U.S.-EU trade deal could introduce a 15% tariff on many drugs, prompting Novartis to take proactive measures. CEO Vas Narasimhan highlighted the company's strategy to reduce reliance on imports by investing $23 billion in U.S. manufacturing, aiming for local production of critical products within three to four years, with some production shifts expected in two years. Novartis' approach reflects a broader effort to ensure supply chain resilience amid trade uncertainties and potential Section 232 tariffs, the timing and extent of which remain unclear. This cautious yet forward-looking stance underscores Novartis' commitment to maintaining steady supply and mitigating tariff risks in the evolving trade landscape. The company's strong financial health supports these strategic investments and stockpiling efforts.