The commitment is part of Roche’s recently announced $50 billion investment in the U.S., but a company spokesperson said that could change if certain yet-unspecified policies are implemented that could “harm our industry’s ability to operate and innovate in America.”
Roche provided more color on its previously announced $50 billion US investment, including a new project that the money will finance—and a caveat that could potentially put this multibillion-dollar commitment at risk.
Roche and subsidiary Genentech will allot $700 million to construct a new drug manufacturing facility in North Carolina, dedicated to the production of next-generation obesity medicines. The facility is currently planned to span 600,000 square-feet, but “could expand in the future based on business needs and the U.S. policy environment,” as per Monday’s release. Once operational, the North Carolina plant will open more than 400 “high-wage manufacturing jobs,” while construction and site development will create some 1,500 jobs on its own.
However, a Roche spokesperson told multiple outlets Monday that the company’s investments in the U.S. could be “reassessed” in accordance with “the current policy environment.” Without offering specifics, the spokesperson said that the company could rethink its commitment “if legislation or regulations were implemented that would harm our industry’s ability to operate and innovate in America.”
These comments followed President Donald Trump’s signing of an executive order to revive his Most Favored Nations policy, a directive to lower drug prices in the U.S., bringing them in line with that in other countries. “Drug prices will be reduced immediately by 50% or more,” Trump said. “Pharma companies will abide by this voluntarily.” Otherwise, the government would be forced to take action, though he did not specify how. The government on Monday could not explain how it had the legal authority to enforce such a sweeping price control program.
In response to Trump’s announcement, many analysts focused on the lack of details surrounding its implementation, which BMO Capital Markets said is an indicator that the move “could be more rhetoric than actual implementable policy.”
A handful of pharma companies have recently spoken out against the Most Favored Nation policy, which Trump first teased last month. During Takeda’s full-year earnings call for the fiscal year 2024 last week, U.S. President Julie Kim called it a “price control,” adding: “From an industry perspective, if MFN were applied within the Medicaid setting . . . that would be an industry impact over 10 years of up to 1 trillion dollars.”
Novartis CEO Vas Narasimhan, meanwhile, said the MFN “would be devastating to the industry.” AbbVie CEO Robert Michael agreed. “We hope the administration contemplates the harm that international reference pricing could have on U.S. healthcare, the U.S. healthcare industry and future innovation,” Michael said. “I think anything like price controls, cost increases or higher taxes just leave less investment available across the industry to advance new, innovative medicines.”
