Eli Lily said Wednesday that she would invest $27 billion to build four new manufacturing plants in the United States as she puts drugs on the threat of her drug import obligations from the Trump administration.
The Indianapolis-based company said three of its planned facilities will focus on producing active pharmaceutical ingredients for its medication, while the fourth will focus on sterile injectables, including the popular weight loss drug Mounjaro.
Eli Lilly said the investment will create 3,000 highly skilled positions and around 10,000 construction work.
The new site will be announced later this year and is expected to operate within five years, the company said.
This big investment will invest $500 billion in the US following this week's announcement, following this week's announcement, as President Donald Trump continues to seek to stimulate American manufacturing.
The move also aims to align with the new administration, where pharmaceutical companies, including Elilily, advocate for policies that benefit the industry, such as an extension of corporate tax cuts implemented during Trump's first term.
“We hadn't built a new site in the US for over 40 years until the first set of Trump's tax cuts, so we need to see what we'll expand or improve to support this,” Eli Lilly CEO David Rix said at a press conference in Washington, D.C.
Rix is joined by leading Trump administration figures, including commerce secretary Secretary Howard Lutnick, director of the National Economic Council Kevin Hassett, and Indiana Senator Todd Young.
“We need steelworks, we need precursor drugs. These are the basic American foundations that we need to re-shore,” Lutnick said.
Eli Lilly's shares rose about 0.5% in midday trading on Wednesday to $906.70 per share. The company's stocks have skyrocketed by more than 16% since January 1st.
Many pharmaceuticals are produced domestically, but the majority of the industry's supply chain relies on overseas production.
Analysts at Morgan Stanley point out that while Ireland and Switzerland play an important role in drug manufacturing, active pharmaceutical ingredients are frequently sourced from China.
Furthermore, Indian companies are responsible for producing the majority of low-cost generic drugs.
Trump has previously threatened to impose tariffs on drug imports. This is a prospect that has sparked concern among industry representatives.
However, analysts believe that such taxes are likely to have minimal financial impacts for drug manufacturers due to the high profit margins associated with many drugs.
Eli Lilly is currently engaged in negotiations with several states regarding the placement of new manufacturing facilities, indicating that by mid-March it will remain open to additional proposals.
The company's latest commitment follows a $23 billion investment in its US operations between 2020 and 2024, including the development of new manufacturing sites in Wisconsin and North Carolina, as well as expansion in home-based areas in Indiana.
