At the World Economic Forum in Davos, Novartis AG CEO Vas Narasimhan outlined the companys strategic approach to counter prospective trade levies being considered by the US government as part of a broader set of tariff proposals. These tariffs, proposed by the Trump administration, target imports from several European nations and are scheduled to commence at a 10% rate in February, with an escalation to 25% by June. Pharmaceutical products are identified as especially vulnerable, with US imports from Europe totaling 84.4 billion ( 244.1 billion) within the first three quarters of 2025.
In response to this challenging regulatory environment, Novartis has substantially increased its footprint in the US through a $23 billion investment announced the previous year. This capital deployment is intended to enhance the companys manufacturing capacity within the US, enabling it to supply the American market predominantly from domestic operations. Such a move reduces exposure to cross-border tariffs and trade uncertainties. Narasimhan further noted that existing inventories offer an additional buffer against immediate trade disturbances, providing operational continuity as the company navigates the evolving tariff landscape.
Alongside its manufacturing expansion, Novartis has entered into an agreement with Washington that demonstrates its commitment to the administrations objectives related to drug pricing. As part of this accord, the company supports efforts to control medication costs and pledges to maintain pricing parity for new medicines across countries with comparable high-income levels. Narasimhan characterized these measures, coupled with elevated US production capabilities, as effectively "future-proofing" Novartis against the threat of trade tensions, while concurrently preparing the company for eventualities where tariff exemptions might not be granted.
This dual-pronged strategy underscores Novartis prioritization of both short-term tariff risk mitigation and long-term operational resilience within the American pharmaceutical sector. By reinforcing supply chains domestically and aligning pricing policy with government expectations, the company seeks to navigate geopolitical trade challenges without compromising market access or growth potential.
Looking beyond immediate trade considerations, Novartis conveyed an optimistic growth outlook extending through the end of the decade. In November 2025, the company updated its projections, forecasting consistent compound annual growth rates between 5% and 6%, measured on a constant-currency basis over the five-year period from 2025 to 2030. These expectations are bolstered by positive momentum for several key products and a robust pipeline strategy aimed at sustaining growth dynamics well into the next decade.
Novartis shares exhibited modest positive momentum in trading, with the stock price rising 0.41% to close at $145.60 on the most recent Friday session at press time, reflecting investor confidence amid this strategic repositioning.