AstraZeneca CFO Talks Tariffs, Forward Guidance, Earnings
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The medicines that we provide are essential medicines, whether it's oncology or rare diseases or cardiovascular. So there is a public health element here and drug shortages and things like that that one needs to take into account.

You know, if any tariffs were to be to be implied. And then also one has to take into account the fact that manufacturing and supply chains are not a lift and shift. You know, these are highly complex manufacturing supply chains and.

They need to be regulated and quality controlled and approved by the FDA, etc. So there is also a time element to moving supply chains. President Trump, though, has repeatedly said that he plans to apply levies to the pharmaceutical sector, although it seems to be paused for the moment. If there are U.S. tariffs...

on imported medicines into the US. Who pays? Is it companies? Is it US consumers? You just mentioned how complex it would be for firms like AstraZeneca. Yeah, so I would say, you know, again, every company is different. We're actually in a very fortunate position

for manufacturing. So we have 31 manufacturing sites globally. Over the last several years, we've actually been manufacturing, investing in manufacturing separately in China, in the US, in Europe.

And our manufacturing is fairly segregated. So the product we manufacture in China is for China and emerging markets. And we have 11 of those 31 manufacturing sites in the U.S. The vast majority of the product that we sell in the U.S. is actually manufactured domestically. There is a minority of product that we do import from Europe into the U.S.,

However, as you know, for pharmaceutical products, we always maintain dual sources of supply. So that will require, if there were tariffs put on Europe, that would require some sort of measure of changing those supply chains. But that's a process that we've already started to rebalance the amount that comes from Europe versus the U.S. for those minority of products.

Pascal Sorio, who was speaking to Bloomberg, also talked a bit about the innovation in your sector, the innovation being mostly paid for by America. Europe and richer countries have to invest more in pharma. Innovation was his message, that the model is unbalanced, too much funding in the United States. Do you expect more investment in the United States?

in drug innovation in Europe now. President Trump's push in the defence sector moved the needle significantly on spending. Will it do the same in the pharma industry? Well, that's our hope, but obviously it's not for me to comment on. I think Pascal has also talked about this concept of health sovereignty, and it's both from

making sure that patients in Europe have access to the best medicines, the best innovation in a timely manner. And that's important for the patients and the citizens of that country. But also that Europe maintains and spends more on innovation and innovative drugs

And that will attract more investments in R&D and more investments in manufacturing and so forth. So I think it is in the best interest of Europe, but obviously that's a policy matter and budget matter that they'll need to consider. Astra dropped a planned £450 million investment here in the UK at the start of this year.

Chancellor Rachel Reeves then called Astra one of the great companies. She said that in January as she was setting out her plans to try to kickstart the UK economy, saying she was determined to make Britain the best place in the world to invest. Are you seeing any benefits at all that you could point to of this attitude from the government, the need for more economic growth, a focus on growth, as the Labour government has talked about? Not yet.

So we haven't really seen any of that yet. I think Pascal has often mentioned an example of this, which it relates to and her to, which I would say has been one of the key

innovative drugs in breast cancer, probably the best innovation in the last 20 years as it relates to breast cancer, and that is not reimbursed in the UK. So, you know, industrial policy is obviously one thing, but obviously access to medicines is also important because

If you think about where we do our studies and where we invest R&D investment, eventually at the end of all of that, we do want patients in that country to have access to medicine. So if we spend all the money in research and then patients don't benefit in that country, that's very disappointing.

Yeah, so perhaps NHS patients in the UK missing out on that. In terms of vaccines, the take up of important vaccines also is falling in the US and here in the UK and worldwide.

I want to ask you about the MMR vaccine, the measles, mumps and rubella vaccine. Are you concerned at Astra about the decline in vaccine take-up in the US and the UK? So we don't actually supply vaccines, either childhood or adult vaccines. So we're not really in the vaccine business. So from a business standpoint, we don't really have any concern. I know it's...

it's a public health issue obviously that needs to be addressed. Coming back to some of the diversification of your supply chains that you mentioned earlier as well, from a cost point of view and a financial point of view for the company, what is the added cost of producing in a siloed sort of fashion that you described versus the more integrated global supply chains? You know, it's hard to say, you know, which is more efficient because

Again, every product is different components for

manufacturing do come from different places, but you also have reduced shipping costs, for example, when you have more segregated supply chains. When I talked about moving some of the supply and manufacturing from Europe to the U.S., we already have, as I said, 11 manufacturing sites, and many of them actually have additional capacity. So it would be some incremental investment for us, but

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