Gilead's $11B Investment Leads Wave of Pharma Manufacturing Expansions in the US

Gilead Sciences has announced an $11 billion investment in its US operations, joining a growing list of pharmaceutical giants making substantial commitments to domestic manufacturing. This move comes amid increasing pressure from the Trump administration to reshore pharmaceutical production and the looming threat of sector-specific tariffs.

Gilead's Expansion Plans

Gilead's latest investment, which supplements an existing $21 billion R&D and manufacturing commitment, brings the company's total US investment to $32 billion. The pharmaceutical giant projects that this sum will generate $43 billion in value for the US economy over the next five years.

The expansion includes the construction of three new facilities and upgrades to three existing sites. Gilead also plans to invest in new technology and advanced engineering initiatives. This growth is expected to create approximately 3,000 new jobs in the US by 2028, comprising 800 direct positions and 2,200 indirect opportunities.

Industry-Wide Trend of US Manufacturing Investments

Gilead's announcement is part of a broader trend in the pharmaceutical industry. Several major players have recently unveiled significant investments in their US operations:

• Bristol Myers Squibb announced a $40 billion investment over the next five years, focusing on radiopharmaceutical manufacturing and artificial intelligence capabilities.
• Johnson & Johnson revealed a $55 billion package in March, earmarked for constructing three new manufacturing facilities and expanding existing sites for both medicine and medtech businesses.
• Other companies making multi-billion dollar commitments include Eli Lilly, Novartis, Amgen, Roche, and Regeneron.

Political Landscape and Tariff Threats

These investments come in the wake of tariff threats from President Donald Trump, who aims to encourage companies to reshore manufacturing operations. The Trump administration has signaled its intention to impose additional levies on pharmaceutical imports in the near future.

The US Department of Commerce has initiated a Section 232 investigation into pharmaceutical imports, examining potential national security risks. This probe, expected to last up to 270 days, could result in trade restrictions such as tariffs on the industry.

In response to these potential tariffs, pharmaceutical companies are not only investing in US manufacturing but also stockpiling products. A recent Department of Commerce report revealed that pharma imports surged to over $50 billion in March alone, equivalent to a fifth of all pharmaceutical imports in 2024.