One Big Beautiful Bill Act provides certainty for J&J’s $55B US manufacturing investment
President Donald Trump's signing into law of the One Big Beautiful Bill Act earlier this month has provided certainty for Johnson & Johnson’s previously announced $55 billion commitment to invest in the United States, according to company executives.
“These very policies that just passed are the ones that have enabled our commitment to invest $55 billion in the U.S. in the next four years,” CEO Joaquin Duato told analysts in a Wednesday earnings call. “And our goal is to be able to manufacture in the U.S. all the medicines that are consumed in the U.S. at the completion of that plan, and we are on our way of being able to do that.”
In March, J&J announced plans to invest more than $55 billion in U.S. manufacturing, research and development, and technology over the next four years — a 25% increase in investment compared to the previous four-year period.
Duato has previously made the case that tax policy, not tariffs, are the most effective way for Trump to bring pharmaceutical manufacturing back to the U.S.
“We are pleased that the One Big Beautiful Bill Act provides certainty for our previously announced $55 billion commitment to invest here in the United States,” John Reed, J&J’s executive vice president of Innovative Medicine, R&D, told analysts on Wednesday.
Reed said the new law’s provisions include “permanent expensing for domestic R&D spend, permanent bonus depreciation and 100% expensing of qualified production property, including our newly planned facility in North Carolina.”
In March, J&J broke ground on a new 500,000-square-foot biologics manufacturing facility in Wilson, North Carolina, which will focus on producing therapies for cancer, immune-mediated and neurological diseases.
The company’s $55 billion investment includes plans to build three additional manufacturing facilities and expand several existing locations tied to its Innovative Medicine and MedTech segments.
In 2025, J&J previously expected about $400 million in costs related to tariffs on medical devices. However, the company on Wednesday cut in half its expectations for costs this year related to new tariffs and raised its full-year sales and profit forecast.
“During our first quarter conference call, we anticipated an impact from tariffs in 2025 to be approximately $400 million. Based on the current tariff landscape, we now anticipate the impact to be approximately $200 million exclusively related to our med tech business,” Reed told analysts on Wednesday.
However, Trump last week threatened to impose up to a 200% tariff on pharmaceuticals imported into the U.S., as part of his strategy to pressure drugmakers to increase domestic manufacturing of medicines. He said his administration will make an announcement “very soon” regarding tariffs on drugs imported into this country.
Trump said that pharma manufacturers will have a grace period of at least a year to move their manufacturing operations to the U.S. before the levies go into effect. In April, the Trump administration launched an investigation into whether the importation of certain pharmaceuticals and pharmaceutical ingredients may threaten U.S. national security.
Initiated under Section 232 of the Trade Expansion Act of 1962, the Department of Commerce probe is looking into the feasibility of increasing domestic capacity for pharmaceuticals and pharmaceutical ingredients to reduce import reliance, and whether tariffs are necessary. Commerce Secretary Howard Lutnick told CNBC last week that details on pharma-specific tariffs will come at the end of July.
“It’s hard to know what is going to happen ultimately with tariffs, but what we do know for sure is that the tax policies that just passed are already creating American jobs and driving innovation,” Duato said on Wednesday.
