China sees global turmoil as opportunity to be ‘business friendly’, says Novartis chief

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China has seized on geopolitical turmoil to present itself as stable and business friendly, according to one of the world’s largest drugmakers, as the industry grapples with potential US tariffs and uncertainty about healthcare policy.

Novartis chief executive Vas Narasimhan recently attended the China Development Forum, often called China’s Davos, alongside dozens of business leaders in industries from finance to energy.

“Given the global geopolitical environment, [China is] seeing an opportunity to be very business friendly and stable,” he told the Financial Times, adding that the country was “very open to multinationals”. 

Many businesses are caught between the competing global powers, trying to make the most of access to the word’s largest markets but without taking sides. Narasimhan also attended a White House event to mark President Donald Trump’s first 100 days in office.

The US and China are locked in a trade war that is disrupting global markets. Trump’s tariffs on Chinese imports have added costs for many businesses, created uncertainty in supply chains and prompted companies to shift production and delay investment decisions around the world. 

The US has not yet imposed tariffs on pharmaceuticals but the administration is conducting an investigation that could lead to new charges.

Meanwhile, a number of big drugmakers have announced US investments to try to soften the impact. Novartis has said it will spend $23bn over five years to expand its US manufacturing and R&D. Roche, Johnson & Johnson and Eli Lilly have also made multibillion dollar commitments in recent months. 

Narasimhan said Novartis and the industry were giving feedback to the US investigation, which he said could take many months. He added that their position was that tariffs were not “sensible” for the sector. 

“Multiple companies have said they’re moving, including us, significant manufacturing and research & development presence into the US. So that’s going to happen. You’re going to have increasing production in the US, more jobs in the US,” he said. 

Foreign drugmakers have also been investing in China, despite the country’s recent focus on driving down drug prices and increased scrutiny of alleged corruption in some parts of healthcare.

Pharma groups are eager to sell into China’s huge market with its ageing population, and to partner with local companies with cutting edge science.

Novartis is building a $100mn factory for its advanced radioligand cancer therapy, and Narasimhan expects to partner with more Chinese biotechs. It has already signed several deals including with Chengdu Baiyu and Shanghai Argo.

He said the level of innovation in China was a “wake-up call” for Novartis and the industry to hunt for new drug candidates and technologies in the country, rather than seeing it as a place for “fast follower” developments. 

“We are actually scaling up our site in Shanghai to be able to better tap into the ecosystem,” he said. 

He noted one factor in the country’s homegrown success, saying the pace of recruitment for clinical trials in China was “staggering”, enabling its biotechs to move “so fast”. 

But he warned there could be significant disruption if relations between the US and China soured to the extent that they refused to accept each other’s clinical data.

“The fact that you can use patients from both countries in global regulatory dossiers, that’s absolutely critical,” said Narasimhan. “[There are] always voices that are on the more extreme side arguing to change that, and I think that’s what we have to protect against.”