AbbVie, Merck, and Amgen Announce Billions in U.S. Investments Amid Potential Drug Tariffs

On April 25, due to the potential stimulation of U.S. investment in the life sciences by tariffs on imported drugs, AbbVie (AbbVie) has also joined this trend, planning to invest $10 billion in the United States over the next decade.On April 25, Amgen also announced an investment of $900 million to expand its manufacturing facility in Ohio, bringing the total number of jobs created to 750 and the total investment in central Ohio to over $1.4 billion.

AbbVie is just the latest major pharmaceutical company to increase its investment in the U.S. as the threat of drug tariffs looms. Just this week,Thermo Fisher Scientific($2 billion),Regeneron($3 billion) andRoche($50 billion) has announced its major investments in the United States. Prior to this,Novartis($23 billion),Eli Lilly($3 billion) andJohnson & Johnson($55 billion) has made significant commitments to expand its footprint in the United States and announced investments ranging from $23 billion to $55 billion.Given that previous tariffs on medicines could reach 25% or higher, this concern continues to loom over the industry.

Recently, MSD stated that since 2018Having spent more than $12 billion on manufacturing and R&D capabilities in the United States, with an additional $9 billion to be invested by 2028,MSD is already formulating its supply chain strategy, "in alignment with the new administration's efforts to revitalize the manufacturing base in the United States."

AbbVie CEO Rob Michael said on a call with analysts Friday that AbbVie plans to invest $10 billion in the U.S. by 2035 to support its current growth plans and expand into new areas such as obesity.

AbbVie’s executives did not go into detail about the investment plans during the conference call, but Scott Reents, the company's chief financial officer, noted that part of the funds would be used to build four new U.S. production facilities dedicated to manufacturing active pharmaceutical ingredients (API), medicines, peptides, and devices.

Like many pharmaceutical peers, the company is preparing for potential industry-specific tariffs on medicines that the Trump administration might impose, as the Trump administration has made import tariffs a cornerstone of its trade policy.

Pharmaceuticals were exempt from the first round of reciprocal tariffs announced by Trump in early April, although government comments and ongoing investigations into pharmaceutical imports suggest that the biopharmaceutical industry will soon face its own taxation.

Michael said on the teleconference that if the tariffs on these drugs are reduced, AbbVie expects the impact on its operations to be "in line with our peers."

He attributes this expected resilience to AbbVie's already robust manufacturing presence in the United States, where the company employs 6,000 people across 11 plants that produce APIs, small molecules, biologics, and botulinum toxins. Additionally,AbbVie's best-selling drug Skyrizi is manufactured in the United States.

However, CFO Reents said that if drug tariffs decrease, AbbVie is preparing for potential short-term headwinds, actively getting ready to address some possible scenarios, and hopes to formulate mitigation strategies as more information related to these dynamics becomes available.

Michael stated that while the expansion of manufacturing constitutes AbbVie's long-term strategy, the company can explore alternative sources of API or implement "productivity initiatives" to address any short-term trade turbulence.

During the conference call, executives also outlined AbbVie's policy preferences in light of anticipated tariffs. As we continue to invest and expand our footprint in the United States, we believe that a more competitive tax policy, building on the achievements of the 2017 tax reform, would encourage a sustainable long-term shift towards U.S. manufacturing.

AbbVie Reports First Quarter 2025 Revenue of $13.34 Billion, Up 8.4% Year-over-Year. According to a report by William Blair analysts, the first-quarter revenue exceeded Wall Street's estimate of $12.9 billion.

Immunology sales continued to lead, with Skyrizi's sales reaching approximately $3.43 billion during this period. Rinvoq also performed well, with sales increasing by 57% to reach $1.7 billion. Humira—currently facing biosimilar erosion from all sides—saw its sales drop by 50% this quarter to $1.12 billion. Humira now accounts for only 8% of AbbVie's total revenue, a 3% decrease from the previous quarter.

Looking ahead, AbbVie is raising its guidance for this year, now projecting full-year sales to reach $59.7 billion, an increase of $700 million from the previous forecast. The Chief Financial Officer attributed this adjustment to updated forecasts for some of AbbVie's key drugs, including Skyrizi for psoriasis and IBD, Rinvoq across all indications, and a decline in Humira sales. Sales of Botox, Imbruvica, Venclexta, and its oral CGRP are expected to be slightly higher than the previous full-year forecast.

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