Eli Lily On Wednesday, it said it would invest at least $27 billion to build four new manufacturing sites in the US as demand for blockbuster weight loss and diabetes injections surged, and the company is developing new drugs for other conditions.
This highlights the reuse of manufacturing to the US and reducing dependence on foreign supply chains as drugmakers and companies from various industries work to build goodwill with President Donald Trump. He threatens businesses, especially the pharmaceutical business, with tariffs, if they don’t manufacture products in the US.
Eli Lily made the announcement at an event in Washington, DC. The event featured several speakers from the Trump administration, including Kevin Hassett, director of the White House National Economic Council, and Commerce Secretary Howard Lutnick, who explicitly linked the announcement to Trump’s policies.
Lutnick said the investment was “what the Trump administration is all about, it’s building and manufacturing in the United States, reworking, investing in the United States and building in the United States.” He thanked Eli Lily for “doing exactly what the president wanted.”
Lutnick added that “if you want to understand tariff policy” in the US, “I just made it clear.”
The move has led to Eli Lilly’s total US manufacturing investment of more than $50 billion in recent years. The other $23 billion comes from the company’s investment in expanding new factories and sites since 2020, making it easier to provide shortages of popular drugs.
“This represents the biggest drug expansion investment in US history,” said David Licks, CEO of Eli Lilly, at the event. “We are making these investments… preparing for the expected demand for future pipeline drugs in our therapeutic field.”
The company’s shares rose more than 1% on Wednesday.
Three of the future US sites announced Wednesday will produce active ingredients for the drug, including Elilily’s obesity drug Zepbound and Tilzepatide, the active ingredient in diabetes treatment Munjaro. “There is a real gap in the supply chain in the US because it is linked to the availability of active ingredients in our country.”
The fourth site will expand the company’s global manufacturing network for future injectable therapies, he added.
Eli Lily has not decided where the four new US sites are, Rix said. The company will accept submissions for locations until March 13th and announce decisions regarding the new site in the coming months.
Eli Lilly said the four new sites will create more than 3,000 jobs for workers, including engineers and scientists, and 10,000 construction jobs as plants are built. The company’s other US factories include sites in North Carolina, Indiana and Wisconsin.
The new investment will not only focus on Eli Lilly’s current and future obesity and diabetes treatment. The company is celebrating the future beyond Zepbound and Mounjaro as it hopes to deliver drugs from a wide range of products pipelines for cancer, Alzheimer’s and other conditions.
Ricks said the company is optimistic about the overall pipeline of treatment areas, including psychometabolic health, oncology, immunology and neuroscience.
Still, the new investment is based on the success of Zepbound and Mounjaro, who share the dominance of the booming market for so-called GLP-1 drugs. Novo NordiskWeight loss drugs of Wegovy and Diabetes Treatment Ozempic. Some analysts expect the global obesity drug market to be worth more than $150 billion a year by the early 2030s, and it is important for both companies to maintain their share as other drug makers participate.
During the event, Rix took shots with an inexpensive compound version of the injectable drug, saying “America is facing a growing threat from the influx of counterfeit and compound drugs.”
Elilily’s efforts to increase the supply of Zepbound and Munjaro aim to ensure eligible patients have safe access to these branded treatments, rather than inexpensive combined versions. Patients flocked to unapproved counterfeit products when branded drugs were shortages or when they were not covered for expensive treatments.
The FDA has since declared a shortage of tilzepatide.
Hassett said the issue would also “disturb the White House” as offshore producers of copycat drugs “threatening lives in the United States.”
In another indication of the political goals of the announcement, Rix touted Trump’s 2017 Tax Cuts and Employment Act, saying the law is “basic” for the company’s manufacturing investments. He called it “it’s essential that these policies be extended forever this year.”
The main provisions from that law are set to expire at the end of December, but corporate tax rate reductions remain in effect.
Passed by a majority Republican Congress during Trump’s first term, the law was the largest tax law overhaul in nearly 30 years, cutting taxes for individuals and businesses. It reduced the corporate tax rate to 21%, increased state and local tax deductions to $10,000, and expanded child tax credits.
“Long-term progress also requires policies to promote an innovative environment where U.S. policies can continue to protect intellectual property rights and work,” Rix said.
Novo Nordisk similarly announced that it would invest billions in manufacturing to increase the supply of Wegovy and Ozempic, and in 2024 it would take over three sites from contract manufacturers for $11 billion.
