Amgen's $900M Ohio Expansion Highlights Industry's Onshoring Trend

Amgen, a leading biotechnology company, has announced a significant $900 million expansion of its biomanufacturing facility in New Albany, Ohio. This move represents the latest in a series of substantial investments by pharmaceutical companies in U.S.-based production capabilities, reflecting a growing trend of onshoring in the industry.

Amgen's Ohio Investment: A Boost for U.S. Manufacturing

The expansion project is set to increase Amgen's total investment in Ohio to more than $1.4 billion and is expected to create 350 new jobs, bringing the company's workforce in the state to 750 employees. This development follows Amgen's initial announcement in June 2021 to establish manufacturing operations in central Ohio, with the New Albany plant opening its doors in February 2024.

Robert Bradway, Amgen's CEO, emphasized the company's commitment to expanding U.S. manufacturing, stating, "Today's investment reinforces our ongoing commitment to expanding U.S. manufacturing and ensuring patients around the world have access to our innovative medicines." Bradway cited Ohio's "supportive business climate, skilled workforce and strategic location" as key factors in the decision to expand in the state.

Industry-Wide Shift Towards U.S. Production

Amgen's expansion is part of a broader industry trend, with several pharmaceutical giants announcing substantial investments in U.S. operations. This shift comes in the wake of potential sector-specific import tariffs and changes in tax policy.

Johnson & Johnson's CEO, Joaquin Duato, recently highlighted the importance of tax policy in encouraging domestic production, stating, "If what you want is to build manufacturing capacity in the U.S., both in medtech and in pharmaceuticals, the most effective answer is not tariffs, but tax policy."

Other major players making significant U.S. investments include:

• Novartis: $23 billion
• Eli Lilly: $27 billion
• Johnson & Johnson: $55 billion

These investments, spanning the next several years, primarily focus on enhancing domestic pharmaceutical production capabilities.

The Role of Tax Policy in Onshoring

The pharmaceutical industry's recent wave of U.S. investments can be traced back to the Tax Cuts and Jobs Act of 2017. Amgen, for instance, has invested nearly $5 billion in U.S. operations since the act's passage.

AbbVie's Chief Financial Officer, Scott Reents, underscored the importance of tax policy in promoting domestic manufacturing, stating, "A more competitive tax policy, building on what was accomplished through 2017 tax reform, will encourage a sustainable shift towards U.S. manufacturing over the long term."

As the industry continues to adapt to evolving economic and political landscapes, the trend of onshoring pharmaceutical production is likely to remain a significant focus for major companies in the sector.