Sanofi Invests in China Despite Uncertainty About TariffsSanofi Invests in China Despite Uncertainty About Tariffs

In early December, Sanofi announced its largest single investment in China to date — close to 1 billion euros (about US$1.055 billion) for a new insulin manufacturing site in Beijing.

Sanofi Chairman Frédéric Oudéa said in a statement, “The growing healthcare needs, rapid innovation, and supportive policy environment in China have reinforced Sanofi’s confidence and long-term commitment to continue investing in China. This investment will create stronger manufacturing presence and strengthen our supply chain partnerships and contribute to building a stronger pharmaceutical ecosystem in China.”

The Paris-based multinational corporation entered China 42 years ago and has since established manufacturing sites in Beijing, Shenzhen, and Hangzhou, as well as research and development (R&D) centers.

When talking about the new site, Sanofi CEO Paul Hudson reiterates the importance of enhancing supply chain resilience to better meet the growing needs of people in China who have diabetes.

Sanofi’s presence in the country aims to support daily medication and vaccine needs in China, the country with the highest number of people estimated  to have diabetes at 140.9 million — expected to grow to 174.4 million by 2045.

“This investment represents a major step in upgrading the ‘China solutions.’ Encouraged by supportive policies from all levels of government, we will continue to innovate and work with partners across the healthcare ecosystem to address China’s vast and complex medical needs more quickly and effectively. By accelerating the local availability of first-in-class and best-in-class therapies, we firmly support the goals of the government’s ‘Healthy China 2030’ initiative,” Sanofi Greater China President Wayne Shi said in the same statement.

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The Administrative Committee of the Beijing Economic-Technological Development Area (BDA) noted Sanofi’s new insulin production facility “marks the first time an international pharmaceutical company has set up biotherapeutic active pharmaceutical ingredients (API) production in China. Upon completion, it will mainly produce biopharmaceutical active substances for insulin, supplying biological raw materials for existing insulin formulations produced by Sanofi's Beijing factory.”

Tariffs and trade wars.

These are complicated times for pharmaceutical company growth strategies, especially given President-elect Donald Trump’s threat to impose a tariff of up to 60% on all goods imported to the US and the trade war that could result.

As we’ve recently reported, many of the same pharmaceutical companies that are looking to expand in China are also opening plants in the US, fueling the “Made-in-America” trend.

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On the flip side, in October, Eli Lilly announced it would make about $200 million expansion of its manufacturing site in Suzhou, Jiangsu province, to increase production of medicines such as tirzepatide recently approved in China for type 2 diabetes and obesity. Pfizer announced plans to invest $1 billion in China for R&D from 2025 to 2030.

Philips CEO Roy Jakobs recently commented on the health tech company’s strategy for President-elect Donald Trump’s second term and the uncertainty related to his administration’s proposed tariffs and policies.

“We … have been working [on] how we make our supply chain more resilient and agile because the situation currently is not clear, which means that we need to be prepared to move fast if [some] kind of clarity comes out,” Jakobs said.

According to Yahoo Finance, Jakobs said the company is working to source products in the market in which they are being sold to minimize trade war impacts.