According to the Vietnam News Agency correspondent in Berlin, the German pharmaceutical and agricultural group Bayer announced on October 2nd that it will invest $2.2 billion to build a new pharmaceutical plant in New Albany, Ohio, USA, to expand its production capacity for drugs treating cancer, cardiovascular disease, and kidney disease, while also creating approximately 600 new jobs.
This is one of Bayer's largest single investments in a U.S. pharmaceutical facility.
The plant is expected to become part of a new collaborative network connecting industrial production with academic research in this market.
According to the plan, the first module dedicated to the production of pharmaceutical active ingredients will begin operation in 2031.
The second module, which will be used for the production of finished pharmaceutical products, is expected to become operational in 2034.
Sebastian Guth, Bayer's head of the U.S. and also responsible for the pharmaceutical operations, said the investment is the next step in expanding the pharmaceutical business and meeting the needs of patients in the U.S. and other markets. He added that the U.S. is currently Bayer's fastest-growing pharmaceutical market.
North America currently accounts for approximately 35% of Bayer's pharmaceutical revenue. Over the past five years, the company has invested more than $7 billion in the U.S. in research, development, and manufacturing. Bayer aims to at least double its prescription drug sales in the U.S. market by the end of this decade.
The accelerated investment in the US also reflects Bayer's need to restructure its product portfolio as revenue from some of its older flagship drugs is declining. The anticoagulant Xarelto and the eye drug Eylea are facing increasing pressure from similar and biosimilar drugs.
Bayer expects the new products to fill the growth gap and help the pharmaceutical segment return to average single-digit growth from 2027 onwards.
One of the most anticipated products is Nubeqa, a prostate cancer treatment that Bayer forecasts could generate several billion euros in annual revenue at its peak.
Other growth-enhancing products include Kerendia, a drug for treating chronic kidney disease in diabetics and heart failure; Asundexian, an anticoagulant currently undergoing approval in major markets; and Lynkuet, a drug for treating hot flashes during menopause.
The $2.2 billion investment was announced amid strong pressure from the Trump administration on the pharmaceutical industry to lower drug prices in the United States.
Under the Most Favored Nation (MFN) principle, Washington wants drug prices in the US to not be higher than those charged by pharmaceutical companies in comparable developed countries.
The US government argues that while it accounts for less than 5% of the world's population, it generates approximately three-quarters of the global pharmaceutical industry's profits. According to studies, based on list prices, drugs in the US are currently about three to four times more expensive than in many other developed economies .
Since the new policy was introduced, 26 pharmaceutical companies have voluntarily signed pricing agreements with the White House. According to the US government, this group accounts for approximately 89% of the branded drug market.
However, the actual impact remains unclear because the contents of the contracts are not publicly disclosed, and the price commitments for drugs already in circulation mainly apply to Medicaid and out-of-pocket patient groups.
Businesses that sign agreements and meet the conditions will be exempt from import duties on patented drugs until January 2029. New tax rates could reach up to 100% for some products.
Bayer is not currently a party to these agreements. However, the company believes that the tariff risk for imports from the EU is relatively limited due to the trade agreement with Washington which stipulates a 15% tariff.
The bigger issue for Bayer is pricing policy. The company is reviewing how it determines prices and the process for bringing new drugs to market.
For Asundexian, Bayer plans to first determine pricing in the US and China , and then roll it out in Europe. Bayer has also informed the countries used by the US as reference markets that prices in those countries need to be equivalent to those in the US; otherwise, the launch of the new product may be delayed.
The new investment in Ohio is not only aimed at expanding production capacity but also reflects Bayer's strategy to strengthen its long-term presence in the world's largest pharmaceutical market, amidst competition, price pressures, and US trade policies that are forcing global pharmaceutical companies to significantly adjust their investment and pricing strategies.
Source: https://www.vietnamplus.vn/bayer-dau-tu-22-ty-usd-xay-nha-may-duoc-pham-moi-tai-my-post1139780.vnp
