Roche seeking talks with the US on tariff exemptions

Roche has said it is petitioning the Trump administration for an exemption from threatened tariffs for pharmaceuticals, arguing there is no trade imbalance in its US business.

Speaking on the Swiss company's first-quarter media call this morning, Roche chief executive Thomas Schinecker said that – as long as the company produces the same amount of product in the US as it imports – "we should not be impacted by tariffs."

The comments follow Roche's announcement earlier this week that it will invest a colossal $50 billion in US manufacturing and R&D facilities, creating thousands of jobs, over the next five years, responding to a call by Trump for all medicines consumed in the US to be made there.

Schinecker said on the call that, unlike other big pharma groups, it has not relocated its operations to countries like Ireland, but cautioned that for some categories – such as diagnostics, where you "have 10,000 products" – making all of them within a particular country is simply not feasible.

His comments follow a Section 232 national security investigation into the pharma sector by the Trump administration, and repeated comments by the President and other senior figures that tariffs on medicinal products are on the way.

Meanwhile, Schinecker also said that the US spending programme has no bearing on investment projects in Europe and Asia, although, Roche was among a group of pharma groups that warned the European Commission recently that manufacturing and R&D could move elsewhere without reform to pharma legislation.

This week, the CEOs of Novartis and Sanofi said in a letter sent to the Financial Times that Europe must start to pay more for medicines as lower prices there create a "clear disincentive for innovators."

The drug industry is still trying to understand the implications of Trump's 'liberation day' tariff announcement on 2nd April, which has caused tumult in global stock and bond markets. Switzerland is currently already facing the threat of a 31% tariff rate but, for now at least, pharma is exempted.

In its update, Roche reported what it said was a good start to the year, with first-quarter sales up 6% to CHF 15.44 billion ($18.73 billion) – slightly above analyst projections – and the pharma division climbing 8% to CHF 11.95 billion. Diagnostics sales were flat, at CHF 3.49 billion.

The rise in pharma was driven by breast cancer combination Phesgo (trastuzumab and pertuzumab), Vabysmo (faricimab) for eye diseases, Xolair (omalizumab) in its new food allergy indication, and haemophilia A therapy Hemlibra (emicizumab).