American Marconi Wireless News - Roche says will invest $50 bn in US, as tariff war uncertainty swells

The United States is a key market for the pharmaceutical industry, representing more than half of the revenue of Roche's pharmaceutical division.

Its Swiss competitor Novartis also announced earlier this month that it plans to invest $23 billion in the United States over five years.

Trump's administration is blowing hot and cold on pharmaceutical products, which initially benefited from exemptions in the round of tariffs announced on April 2.

But last week, the US commerce secretary formally announced "national security" investigations into pharmaceutical imports, plus others on semiconductors and chip-making equipment.

"Whether these newly announced US investments had already been planned prior to the new government having taken the helm is irrelevant," said Stefan Schneider, an analyst at Swiss investment managers Vontobel.

"But they should help to not trigger additional tariffs for the Swiss pharma industry," which he said could "severely jeopardise" its global supply chains for drugs manufacturing and distribution, thereby "putting patients' lives at risk".

- Strong presence in the United States -

Roche already has more than 25,000 employees in 24 sites across eight US states.

In a statement, Roche said the $50 billion investment was expected to create more than 12,000 new jobs, including nearly 6,500 construction jobs.

It is planning to expand and upgrade US manufacturing and distribution capabilities for its innovative medicines and diagnostics portfolio at sites in Kentucky, Indiana, New Jersey, Oregon and California.

The investment also includes a new research and development centre in Massachusetts, conducting artificial intelligence research.

Once all its new and expanded manufacturing capacity is up and running, Roche "will export more medicines from the US than it imports", it said.

The Basel-based biotech giant said its diagnostics division already generates an export surplus with products manufactured in the United States and shipped to other countries.

"Today’s announced investments underscore our long-standing commitment to research, development and manufacturing in the US," said Roche Group chief executive Thomas Schinecker.

"Our investments of $50 billion over the next five years will lay the foundation for our next era of innovation and growth, benefiting patients in the US and around the world."

Roche sahres dipped 0.6 percent in late morning trading in a Swiss market down 0.8 percent overall.

D.Sawyer--AMWN