Lilly to Build Four New US Manufacturing Facilities
The news comes amid the possibility that President Trump imposes a 25% tariff on pharmaceuticals, which could encourage manufacturers to begin reshoring their services.
In an effort to increase its domestic medicine production across various therapeutic areas, Eli Lilly and Company will be constructing four new pharmaceutical manufacturing sites in the United States, representing financial commitments in the expansion space exceeding $50 billion since the start of 2020.1
The news comes off the heels of President Trump’s recent announcement2 that he would impose a tariff of 25% or higher on pharmaceuticals. No timetable has been set in terms of when that tax on imports would take effect, although he is providing manufacturers time to establish US-based locations to allow them to avoid the tariffs.
Three out of the four new plants are expected to prioritize the production of active pharmaceutical ingredients (APIs) and reshoring small molecule chemical synthesis services, along with solidifying the company’s overall supply chain. As for the fourth site, it will aim to expand Lilly’s parenteral manufacturing network that will be essential for the production of injectable therapies.
"Lilly's optimism about the potential of our pipeline across therapeutic areas— cardiometabolic health, oncology, immunology and neuroscience—drives our unprecedented commitment to our domestic manufacturing build-out,” said David A. Ricks, Lilly chair and CEO. “Our confidence positions us to help reinvigorate domestic manufacturing, which will benefit hard-working American families and increase exports of medicines made in the USA. This bold move reflects our commitment to stay ahead of anticipated demand for safe, high-quality, FDA-approved medicines of the future."
The four locations are anticipated to create more than 3,000 jobs for highly skilled workers, such as engineers, lab technicians, operations personnel, and scientists. Additionally, the company anticipates that it could create nearly 10,000 construction jobs during the development of the sites.
"To deliver on our big bets on next-generation modalities like small molecules, biologics and nucleic acid therapies, Lilly is investing in the state-of-the-art manufacturing infrastructure needed to deliver tomorrow's safe and reliable medicines," commented Edgardo Hernandez, executive vice president and president of Lilly Manufacturing Operations. "We are not just building facilities. We are creating a future where American innovation leads the world in pharmaceutical manufacturing, requiring a highly skilled workforce prepared to shape the future of health care. This is a significant step for our company, our communities and the patients we serve."
This form of tariff reshoring is also expected to provide other economic benefits domestically, including an increase in local spending, tax revenue, and enhanced infrastructure, which as Reuters notes—could have the potential to help cover the extension of trillions of dollars in tax cuts that came out of the Tax Cuts and Jobs Act of 2017, which lowered the corporate tax rate from 35% to 21%.3,4
"The Tax Cuts and Jobs Act legislation passed in 2017 during President Trump's first term in office has been foundational to Lilly's domestic manufacturing investments, and it is essential that these policies are extended this year,” Ricks continued. “We believe that our investments in America and upskilling our nation's workforce will spark a significant ripple effect. For every job we create, many more will be generated, positively impacting the communities that host our innovative new sites."
Stay turned to Pharma Commerce, as we will continue to track the implications that reshoring production has on the pharma supply chain.
References
1. Lilly plans to more than double U.S. manufacturing investment since 2020 exceeding $50 billion. Eli Lilly and Company. February 26, 2025. Accessed February 27, 2025. https://investor.lilly.com/news-releases/news-release-details/lilly-plans-more-double-us-manufacturing-investment-2020
2. Saraceno N. Trump Reveals Plan to Enact 25% Tariff on Pharmaceuticals. Pharmaceutical Commerce. February 11, 2025. Accessed February 27, 2025. https://www.pharmaceuticalcommerce.com/view/trump-plan-25-percent-tariff-pharmaceuticals
3. Renshaw J, Morgan D, Lawder D. Trump push to use tariffs to pay for tax cuts faces opposition in Congress. Reuters. January 22, 2025. Accessed February 27, 2025. https://www.reuters.com/world/us/trump-push-use-tariffs-pay-tax-cuts-faces-opposition-congress-2025-01-22/
4. Tax Cuts and Jobs Act of 2017 (TCJA). Cornell Law School Legal Information Institute. Accessed February 27, 2025. https://www.law.cornell.edu/wex/tax_cuts_and_jobs_act_of_2017_(tcja)#:~:text=For%20businesses%20and%20investors%2C%20the,changes%20to%20taxing%20international%20income.
