Lilly plans to more than double U.S. manufacturing investment since 2020 exceeding $50 billion
Rhea-AI Summary
Eli Lilly (NYSE: LLY) has announced plans to build four new pharmaceutical manufacturing sites in the United States, bringing its total U.S. capital expansion commitments to over $50 billion since 2020. Three sites will focus on active pharmaceutical ingredients (API) manufacturing and chemical synthesis, while the fourth will expand injectable therapy production.
The expansion will create 3,000 high-skilled jobs including engineers, scientists, and technicians, plus approximately 10,000 construction jobs. The new facilities will manufacture medicines across therapeutic areas including cardiometabolic health, oncology, immunology, and neuroscience.
This investment builds upon Lilly's previous domestic expansion commitments of $23 billion from 2020-2024, which included facilities in North Carolina, Indiana, and Wisconsin. The company is currently negotiating with several states and welcomes additional interest by March 12, 2025. Production at the new facilities is expected to begin within five years.
Positive
- Largest pharmaceutical manufacturing investment in U.S. history ($50B)
- Creation of 3,000 high-wage manufacturing jobs
- Strengthening domestic supply chain through API manufacturing
- Expansion across multiple therapeutic areas
- Expected economic benefits for local communities
Negative
- 5-year timeline before facilities begin production
- Significant capital expenditure commitment
- Dependency on Tax Cuts and Jobs Act extension
Insights
Eli Lilly's historic
The sheer magnitude of this investment—more than doubling their domestic manufacturing commitments since 2020—suggests Lilly's internal forecasts project exceptional demand growth, particularly for their blockbuster GLP-1 medications Mounjaro and Zepbound, which have faced supply constraints amid skyrocketing demand. By reshoring critical API production capabilities, Lilly is strategically vertically integrating its supply chain, reducing dependency on foreign suppliers and mitigating geopolitical risks that have plagued pharmaceutical manufacturing.
This investment represents a significant competitive moat-building exercise. While competitors struggle with production capacity for similar therapies, Lilly is positioning itself to dominate market share across multiple therapeutic areas by ensuring robust supply capabilities. The expansion of injectable therapy manufacturing capacity is particularly noteworthy given the industry shift toward biologics and complex delivery systems.
From a financial perspective, while these investments will impact capital expenditure significantly in the near term, they reflect management's confidence in strong future cash flows and margin protection. The creation of 3,000+ high-skilled jobs also signals Lilly's commitment to building institutional knowledge in advanced manufacturing techniques that will be difficult for competitors to replicate.
Investors should note the explicit connection to tax policy continuation—Lilly attributes these investments to the 2017 Tax Cuts and Jobs Act and emphasizes the need for extension, introducing a potential policy risk factor to monitor. The five-year timeline to production means these facilities represent long-term strategic positioning rather than near-term capacity solutions.
Eli Lilly's
The timing and scale of this announcement are strategically significant within the current policy landscape. By publicly connecting these investments to tax policy continuation, Lilly is effectively leveraging its economic impact as an argument for extending corporate tax provisions that might otherwise face scrutiny in upcoming fiscal debates. The company's emphasis on creating 3,000+ high-wage manufacturing jobs and 10,000 construction positions positions this as a jobs-focused initiative rather than merely a corporate expansion.
This reshoring effort addresses critical national security concerns regarding pharmaceutical supply chains that became evident during the pandemic. By establishing domestic API production capabilities, Lilly is reducing U.S. dependency on foreign suppliers—particularly from China and India—for essential medication components. This aligns with bipartisan policy objectives around securing critical supply chains for national resilience.
The economic multiplier effect of these investments will be substantial. Beyond direct employment, these facilities typically generate a 2.5-3x multiplier in surrounding communities through increased housing demand, service sector growth, and supplier network development. For the states currently competing for these facilities, the long-term economic impact extends far beyond the initial construction phase.
Lilly's approach of opening site selection to multiple states creates a competitive dynamic that will likely result in significant state-level incentive packages. This process highlights the ongoing tension between federal and state economic development strategies, with states effectively subsidizing reshoring that serves national economic security interests.
This investment also signals a potential shift in the pharmaceutical industry's approach to manufacturing economics, suggesting that the benefits of domestic production—including supply chain security, quality control, and intellectual property protection—may now outweigh the cost advantages that drove previous offshoring waves.
Company expects to begin building four more domestic manufacturing sites this year and add 13,000 high-wage manufacturing and construction jobs in America
The company's plans represent the largest pharmaceutical manufacturing investment in
Three of the future
"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. Our confidence positions us to help reinvigorate domestic manufacturing, which will benefit hard-working American families and increase exports of medicines made in the
At these four new sites, Lilly expects to create more than 3,000 jobs for highly skilled workers, including engineers, scientists, operations personnel and lab technicians. 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," said 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."
Expected additional economic benefits of these new sites to the selected communities include increased local spending, tax revenue, economic diversification, improved infrastructure, population growth, and training and development opportunities.
Ricks added, "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. 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."
The company's previous total domestic capital expansion commitments from 2020 to 2024 totaled
- New sites in
Research Triangle Park andConcord, North Carolina - New sites at the LEAP Innovation District in
Lebanon, Indiana - Expansions and updates to several different manufacturing facilities in
Indianapolis - Development of the new Lilly Medicine Foundry in
Lebanon, Indiana - Acquisition and expansion of Lilly's manufacturing site in
Kenosha County, Wisconsin
State submissions
The company is currently in negotiations with several states and welcomes additional interest by March 12, 2025. Please visit www.lilly.com/manufacturing-2025 for more information, including how to respond and submit interest online. Lilly expects to announce all four future site locations in 2025 and anticipates facilities will begin making medicines for patients within five years.
About Lilly
Lilly is a medicine company turning science into healing to make life better for people around the world. We've been pioneering life-changing discoveries for nearly 150 years, and today our medicines help tens of millions of people across the globe. Harnessing the power of biotechnology, chemistry and genetic medicine, our scientists are urgently advancing new discoveries to solve some of the world's most significant health challenges: redefining diabetes care; treating obesity and curtailing its most devastating long-term effects; advancing the fight against Alzheimer's disease; providing solutions to some of the most debilitating immune system disorders; and transforming the most difficult-to-treat cancers into manageable diseases. With each step toward a healthier world, we're motivated by one thing: making life better for millions more people. That includes delivering innovative clinical trials that reflect the diversity of our world and working to ensure our medicines are accessible and affordable. To learn more, visit Lilly.com and Lilly.com/news, or follow us on Facebook, Instagram, and LinkedIn. C-LLY
Trademarks and Trade Names
All trademarks or trade names referred to in this press release are the property of the company, or, to the extent trademarks or trade names belonging to other companies are references in this press release, the property of their respective owners. Solely for convenience, the trademarks and trade names in this press release are referred to without the ® and ™ symbols, but such references should not be construed as any indicator that the company or, to the extent applicable, their respective owners will not assert, to the fullest extent under applicable law, the company's or their rights thereto. We do not intend the use or display of other companies' trademarks and trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements (as that term is defined in the Private Securities Litigation Reform Act of 1995) including about planned capital investments in new manufacturing capacity, production of medicines, hiring and related initiatives and reflects Lilly's current beliefs and expectations. However, as with any such undertaking, there are substantial risks and uncertainties in the manufacturing process, development and commercialization of pharmaceutical products any of which could impact the overall commercial success of our products, and as related to cost, completion timing, expected capacity, personnel, and other factors which could impact expected benefits of the capacity expansion and related initiatives. For further discussion of risks and uncertainties relevant to Lilly's business that could cause actual results to differ from Lilly's expectations, see Lilly's Form 10-K and Form 10-Q filings with the United States Securities and Exchange Commission. Except as required by law, Lilly undertakes no duty to update forward-looking statements to reflect events after the date of this release.
Additional Quote Options for Media Use
U.S. Senator Jim Banks: "I couldn't be prouder that Lilly is expanding facilities in the
Refer to: | Carla Cox; cox_carla@lilly.com; 317-750-3923 (Media) |
Michael Czapar; czapar_michael_c@lilly.com; 317-617-0983 (Investors) |
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SOURCE Eli Lilly and Company
FAQ
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