Roche says Trump’s ‘most favored nation’ executive order jeopardizes its planned $50B US investment
President Donald Trump’s signing of a drug pricing executive order on Monday is putting in jeopardy Roche’s planned $50 billion investment in its U.S. R&D and manufacturing sites over the next five years.
While Roche does not expect a business impact in 2025, the Swiss drugmaker said in an emailed statement to Pharma Manufacturing that should Trump’s proposed executive order go into effect, its “ability to fund the significant investments previously announced in the U.S. will be in question.”
Last month, Roche announced plans to invest $50 billion in its pharmaceutical and diagnostics operations in the U.S. over the next five years. The investment is meant to support the development of new research and manufacturing facilities across several states and is expected to generate more than 12,000 new jobs.
However, Roche’s statement warned that it is “concerned” that Trump’s executive order will “undermine the U.S.’s position as the world’s leading pharmaceutical and healthcare ecosystem, as well as dampen economic growth and lead to job losses in the U.S.” The drugmaker also raised concerns that the order “could lead to cuts on hundreds of billions of future U.S. pharmaceutical R&D and manufacturing investments.”
The executive order revives Trump’s controversial “most favored nation” policy that aims to cut drug costs by tying the prices of some medicines in the U.S. to significantly lower ones in other countries. Near the end of his first term, Trump signed an order that Medicare would not pay more for certain drugs than the lowest price for that medication in any member nation of the Organisation for Economic Co-operation and Development.
That executive order was challenged by lawsuits from the pharma industry, struck down in court, and CMS rescinded the model under the Biden administration. However, Trump is following through on a campaign promise for his second term for a similar order in which the U.S. will only pay the “best price offered to foreign nations” for drugs.
Rather than putting Trump’s latest executive order into effect, Roche wants to see “broader reforms to healthcare delivery” in this country that address the “significant market distortions whereby half of every U.S. dollar spent on medicines goes to insurers, hospitals and pharma benefit managers.”
The drugmaker made the case in its statement that there are “much better policy solutions to lower the price of medicines for the government, lessen the cost burden to patients and preserve the global leading innovation ecosystem in America” than Trump’s executive order signed on Monday.
That same day, Roche’s Genentech announced it will spend more than $700 million on a new 700,000-square-foot drug manufacturing facility in Holly Springs, North Carolina. The plant, which will add more than 400 manufacturing jobs and more than 1,500 construction jobs, will support Roche and Genentech’s future portfolio of next-generation obesity medicines.
