BD strikes $19B manufacturing deal with US government

Becton, Dickinson and Co. has struck a partnership with the U.S. government to expand domestic manufacturing of medical supplies.

The Franklin Lakes-based company announced the agreement Oct. 6. As part of it, the global medical technology giant plans to invest $19 billion in the U.S. over several years. The funds will go toward capital, operational and supply chain upgrades.

According to BD, the allocation includes $3 billion to boost production at key sites across the country.

By expanding end-to-end manufacturing capabilities, BD expects to increase its annual U.S-based production of essential medical consumables by about 5 billion units. According to the company, that would raise the share of those products it supplies domestically to roughly 80%.

The company also plans to manufacture all of the needles it uses in the U.S. domestically with American-made steel, according to the news release.

The agreement comes as President Donald Trump’s administration pushes to strengthen the nation’s healthcare supply chain and bring more critical manufacturing back to the U.S. In exchange for the deal, BD will get relief from future Section 232 tariffs on certain products and materials, as long as it meets the agreed-upon milestones.

BD said it is not yet putting a dollar figure on the potential impact because the tariff rates, products covered and timing are not finalized.

‘Building a more resilient healthcare system’

BD employs more than 60,000 people globally and makes products including syringes, needles and other medical supplies. Its U.S. manufacturing network includes facilities in Nebraska, Connecticut, Puerto Rico, Utah, Texas, Georgia and South Carolina.

Tom Polen, chairman, CEO and president, commented, “This agreement reflects a shared commitment between the U.S. Government and BD to strengthening America’s healthcare infrastructure, expanding U.S. manufacturing capacity and supporting reliable access to essential medical technologies, ultimately building a more resilient healthcare system for the future.”

He went on, “The administration recognizes the importance of investing in a stronger, more secure healthcare supply chain, and BD is uniquely positioned to help bring that vision to life through our scale, innovation expertise and longstanding U.S. manufacturing footprint.”

Making deals

The agreement mirrors a strategy the administration has used with other pharmaceutical companies.

Over the past year and a half, the White House reached deals with more than two dozen drug-makers to lower prescription drug costs in exchange for reprieve from tariffs.

The list includes several New Jersey-based companies, such as Sanofi, Merck, Novo Nordisk, Johnson & Johnson, Novartis, Teva Pharmaceuticals, Sun Pharma and Bristol Myers Squibb.

Many of the firms with “most favored nation” drug-pricing agreements have also unveiled billions of dollars aimed at strengthening U.S. R&D and manufacturing. Recently announced projects include:

• Bristol Myers Squibb’s $2.3 billion manufacturing campus in Texas
• Novartis’ $771 million production hub in North Carolina
• Johnson & Johnson’s $1 billion distribution facility in Florida

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