Aurobindo Eyes U.S. Plant in New Jersey As Trump Calls for Local Drug Production

Published: Feb 10, 2017

Aurobindo Eyes U.S. Plant in New Jersey As Trump Calls for Local Drug Production February 10, 2017
By Alex Keown, Breaking News Staff

MUMBAI – Indian drugmaker Aurobindo is heeding the call of President Donald Trump and is planning on establishing additional manufacturing in the United States, Reuters reported.

Aurobindo, which is India’s fourth largest drugmaker by sales, already has a manufacturing site in New Jersey and also has a presence in North Carolina. Reuters said the company is expecting to expand the New Jersey site to include manufacturing of injectables. Currently the site is used to make tablets.

“What I want is we need to get lower prices. We have to get even better innovation and I want you to move your companies back to the United States. And I want you to manufacture in the United States,” Trump said to pharma executives during a White House meeting earlier this month.

On multiple occasions, Trump has called for an increase in drug manufacturing in the United States. Reuters noted that the president’s call has worried drug manufacturers in India. That country provides approximately 30 percent of drugs sold in the United States and relies heavily on U.S. markets for its businesses, Reuters said. India’s pharmaceutical businesses contribute about $15 billion annually to that nation’s economy. With all that is going on, Aurobindo's U.S. chief, Bob Cunard, said it would be prudent for the company to look into opening another manufacturing site in the U.S. Aurobindo generates more than half its revenue in the United States, Reuters said.

"With the current landscape of what's happening with the U.S. White House administration, and some of the things that may change there, clearly, we don't think having capacity in the U.S. would be detrimental at this point," Cunard said during an earnings briefing, according to the Reuters report.

It’s not just Aurobindo that is eying the U.S. for drug manufacturing. Nilesh Gupta, managing director of Lupin , India's third biggest drugmaker, told Reuters that although the company does not have any immediate plans to scale up business in the U.S., it was keeping a close watch on the political landscape to determine if the company should build a facility in the U.S. Gupta told Reuters that it was watching Congress to determine if taxes on imports will be increased, which would certainly have a negative impact on Lupin’s business. A supplier of generic drugs, Gupta told Reuters that if such a tax is passed, then Lupin would need to revisit its U.S. strategy. Any increase in a border tax on imports would be passed on to consumers, which would mean that goes against Trump’s goal of lowering drug prices, Reuters noted.

Kedar Upadhye, chief financial officer of Cipla, another Indian drugmaker, also told Reuters that his company would be watching the U.S. political landscape, however he speculated it was unlikely generic drugs would be impacted.

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