Eli Lilly, the maker of blockbuster weight loss and diabetes drugs Zepbound and Mounjaro, said it will invest an additional $27 billion to build four new manufacturing plants in the United States, shoring up domestic manufacturing as President Donald Trump threatens new tariffs on pharmaceuticals.
Three of the sites will make active pharmaceutical ingredients, the foundational materials of medicines, while the fourth will make injectable products, the Indianapolis-based drug giant said Wednesday.
Trump said this month that he planned to impose tariffs of about 25% on goods including pharmaceuticals starting as early as April 2, and he warned drug industry executives in a private meeting last week that they should move production to the US, according to Bloomberg News. This week, Apple said it would invest $500 billion to expand US facilities after Trump announced 10% tariffs on imports from China.
David Ricks, Eli Lilly’s chief executive officer, told CNN that the company – whose revenue grew 32% to $45 billion last year on the back of its diabetes and weight loss drugs – wanted to create more manufacturing capacity and add redundancy to strengthen its supply chain. But he also noted that the “policy environment … is a major contributor” to the plans.
“If the wishes of this administration come true, you could see where most industries will need to reshore a lot of investment,” said Ricks, who attended last week’s meeting with the president. “We’re trying to do this quickly, because I think there will be constraints in everything from supply chain of building materials to energy.”
Ricks emphasized that the plan to build so many new plants in the US relies on renewal of the Tax Cuts and Jobs Act, enacted in Trump’s first term, which lowered the corporate tax rate in the US to 21% from 35%.
If those policies aren’t extended, he said, “We’d have to re-look at the whole thing.”
Increasing US manufacturing of pharmaceuticals emerged as a more urgent priority during the Covid-19 pandemic as supply disruptions and concerns about access to crucial medicines laid bare the vulnerability of relying on imports from other countries.
Still, much of that reliance – in particular, on China and India – is for generic medicines, Ricks pointed out, noting that Lilly doesn’t make those drugs. The new plants will largely support new medicines, including future drugs in the same class as Zepbound and Mounjaro as well as medicines for cancer, immunology and neuroscience, Ricks said.
“That said,” he added, “it’s dangerous for our country to have offshored production for whole types of technology like small-molecule synthesis, which is really not happening in our country at all anymore.”
Small-molecule drugs typically include oral tablets, using chemistry for manufacturing.
“Lilly here, now, will have three massive plants,” he said. “So in a time of a pandemic or something like that, could we repurpose it? Sure.”
It’s not determined where the new plants, which are expected to start making medicines within five years, will be; Lilly said it’s in negotiations with several states and welcomes expressions of interest until March 12. The company estimates that the plants will create 13,000 jobs in manufacturing and construction.
They add to the US manufacturing sites Lilly’s built since 2020, with commitments to invest a total of $50 billion with Wednesday’s pledge. The company has been rapidly working to increase manufacturing capacity to meet outsized demand for Zepbound and Mounjaro, which – along with competitor drugs in the GLP-1 class, Novo Nordisk’s Ozempic and Wegovy – spent two years in shortage.
“Right now, for good or bad, we’re running our plants globally 24/7, 365,” Ricks said. “There’s not a single hour of any day that every machine isn’t working at Lilly right now, and that’s not a sustainable thing for our teams and for doing the right scheduled maintenance and those sorts of things, but we’re keeping up with runaway demand.”
Ricks said “next-generation projects” aim to build on the weight-loss success of Zepbound, including a pill in development called orforglipron that’s expected to have results from a late-stage clinical trial “in the next three months or so” and a medicine called retatrutide that Ricks called “sort of the next super weight-loss drug from Lilly.”
Used by millions of Americans, approved medicines in the class have revolutionized the way doctors approach weight loss, something Ricks pointed to as a way to help meet the Make America Healthy Again goals of the Trump administration and its health secretary, Robert F. Kennedy Jr.
“What could be more important than controlling obesity?” Ricks said. “It’s probably the single biggest lever that exists” for affecting health outcomes, “and we’re at the forefront of that.”
Nonetheless, Kennedy has sent mixed messages about his support for obesity medicines, saying in October that drugmakers sell them to Americans “because we’re so stupid and addicted to drugs.”
Asked about them during his confirmation hearings, Kennedy called them “miracle drugs” but said they shouldn’t be “the first front-line intervention for 6-year-olds, for whom they are currently” – a false statement, as the medicines approved for kids are cleared starting at age 12.
“I find him to ask good questions and be a good listener; I think he’s hungry for information,” Ricks said of his interactions with Kennedy. “We’ll push back when the science is clear and collaborate where we can. I think there’s a lot more of the second than the first, from my initial impressions.”
