Good morning and happy Wednesday! AstraZeneca said it is doubling down on its investment in its U.S. business, a move that comes just one week after Donald Trump's election win.
AstraZeneca announced plans for $2 billion in new spending on research and development, bringing its total capital investment in the country to $3.5 billion by the end of 2026. The cash will be used to boost the company's research and development, as well as its manufacturing footprint in the U.S.
The British-Swedish pharmaceutical giant expects the new investment to create more than 1,000 jobs, "contributing to the growth of the U.S. economy," according to a release. The company said it currently has 17,800 U.S. employees working across 17 sites in 12 states.
AstraZeneca said the expanded footprint will include a research and development center in Cambridge, Mass., manufacturing plants in Maryland and Texas and other sites at unspecified locations across the West and East coasts.
AstraZeneca called the investment the first in a series of steps toward hitting its revenue target of $80 billion by 2030 – a goal set earlier this year.
The drugmaker is now one of the first major foreign companies to announce plans to invest in the U.S. after Trump's victory.
Several companies similarly announced major U.S. investments during Trump's first term. Trump would often try to take credit for those investments, even if it was hard to prove a connection to his administration.
But AstraZeneca declined to explicitly say whether there was a link between Trump winning a second term and its increased spending in the U.S.
During a media call after the company's earnings release Tuesday, AstraZeneca CEO Pascal Soriot said the investment is a "testimony of our confidence in the U.S. economy – of the U.S. marketplace over the next few years."
Soriot, during a separate event in New York City on Tuesday, also told reporters that the drugmaker has been looking at the expanded investment "for a number of months."
A previous version of a Tuesday report from the Wall Street Journal suggested the company was motivated by other factors: A source familiar with the matter told the outlet that AstraZeneca's new investment came in response to the election results and is a bet that a second Trump administration would amend certain elements of President Joe Biden's signature Inflation Reduction Act, or IRA. The current version of the report no longer mentions the IRA.
That legislation, signed into law in 2022, includes provisions that aim to lower prescription drug costs for seniors, such as allowing Medicare to negotiate medication prices with manufacturers. AstraZeneca and other drugmakers have acknowledged that the IRA, particularly its Medicare price talks, is a headwind to their businesses. AstraZeneca's diabetes treatment Farxiga was among the 10 drugs targeted in the first round of negotiations, which set new prices for 2026.
But Soriot on Tuesday pushed back on the idea that the company's decision was based around potential changes to the IRA. During the media event, he joked that "I sort of dream sometimes" of the IRA being repealed, "but not to that extent."
He also said some of the IRA's provisions are "good things," such as a $2,000 cap on out-of-pocket spending for Medicare Part D enrollees starting in 2025.
Soriot said the company believes that the IRA is "here to stay," adding the decision to boost its investment in the U.S. is "not so much" based on "policies specific to our industry."
"It's more a general belief that the economy will remain strong. And if you have a strong economy, hopefully, that drives investments in innovation, sure, in our industry, but also many other industries," he told reporters. "We want to tap into this innovation in the U.S."
When asked about Trump's tariff policies, Soriot said it is "probably more relevant to other industries and certainly other companies."
Trump has threatened to slap a tariff of up to 60% on all goods imported to the U.S. from China. But Soriot called his tariff policy "irrelevant" to AstraZeneca because the company does not source products from China for the U.S.
The products AstraZeneca commercializes in the U.S. are manufactured in its several plants across the country, "and we're investing in even more now," he told reporters.
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