Takeda’s Julie Kim argues that Trump’s idea to match drug prices to that of other countries could cost the industry up to $1 trillion over the next 10 years.
Takeda is pumping roughly $30 billion into its U.S. operations over the next five years, CEO Christophe Weber said Thursday during the pharma’s earnings call for its full fiscal year 2024 results.
“This reflects the fact that the U.S. is the world’s leading market for biopharmaceutical innovation,” Weber said, “and I hope that will continue.” This move puts Takeda in the same league as its major pharma fellows—including Eli Lilly, Johnson & Johnson, Bristol Myers Squibb and Novartis—all pledging billions of dollars in the U.S. in manufacturing and investments, partly in response to President Donald Trump’s tariffs threats.
Takeda on Thursday also spoke out against Trump’s proposed “most favored nation” health policy, which Trump claims could help bring drug prices down. According to a report from Politico earlier this week, the President could come out with an executive order as soon as early next week.
“Basically, it is a price control,” Julie Kim, president of Takeda’s U.S. unit, said during the call. The “Most Favored Nations”—or MFN—approach seeks to lower the cost of prescription medicines to no higher “than the lowest price charged in other similar countries,” according to November 2020 announcement from the Centers for Medicare and Medicaid Services.
President Trump tried to pass a similar initiative during his first term, though nothing came of it.
“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,” Kim argued. “It would fundamentally be a significant challenge for the overall industry, Takeda included.”
“We think that there are better ways to encourage manufacturing investment in the U.S., R&D investment in the U.S. and to support continued innovation [in] the biopharmaceutical industry in America,” she added. “MFN would not be the appropriate way to do it.”
Tariff Impact ‘Limited’
On the call, Weber emphasized that Takeda’s exposure to these tariffs is likely to be “limited.” While about 50% of the company’s total revenue comes from the U.S., imports account for only about 8% to 10% of Takeda’s U.S. sales. Those imports primarily come from Europe, Japan and Singapore.
“Of note, our largest product by revenue in the U.S., Entyvio, is 100% U.S. country of origin,” Weber said. Rather than thinking of the $30 billion package as a means to soften the blow of tariffs, Weber insisted that such an investment is “not new.” Instead, he suggested, the money is in-line with its long-standing strategy in the U.S.
“This is to maintain [our] presence. This is to continue to develop the company. This is to make sure that our manufacturing sites are upgraded up to the best efficiency and productivity,” he said, noting that the sum will also include “our R&D spend in the U.S.”
Takeda recorded a 7.5% year-on-year revenue growth, bringing in ¥4,581.6 billion in 2024, or roughly $31.6 billion. Entyvio, the anti-inflammatory monoclonal antibody indicated for ulcerative colitis and Crohn’s disease, was the Japanese multinational’s strongest growth driver, climbing 8.5% year-on-year to make ¥914.1 billion ($6.2 billion).
