Lilly "hadn’t built a new site in the U.S. in more than 40 years until the first set of Trump tax cuts," CEO David Ricks said. (Photo: Sean Krajacic/Associated Press)
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(by Annika Kim Constantino, CNBC) – Eli Lilly on Wednesday said it will invest at least $27 billion to build four new manufacturing sites in the U.S., as demand for its blockbuster weight loss and diabetes injections soars and the company develops new drugs for other conditions.
It comes as drugmakers and companies across different industries [respond to] President Donald Trump’s [call for] reshoring* manufacturing to the U.S. and reducing reliance on foreign supply chains. He has threatened companies — and pharmaceutical businesses in particular — with tariffs if they do not manufacture products in the U.S. [*Reshoring is the practice of bringing manufacturing and services back to the U.S. from overseas.]
Eli Lilly made the announcement at an event in Washington, D.C. …. 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 tied the announcement to Trump’s policies.
Lutnick said the investment is “exactly what the Trump administration is all about, which is building and manufacturing and reshoring in America, investing in America, building in America.” He thanked Eli Lilly for “doing exactly what the president was hoping would happen.”
Lutnick added that “if you want to understand the tariff policy” of the U.S., “I have just articulated it.”
The move brings Eli Lilly’s total U.S. manufacturing investments to more than $50 billion in recent years. The other $23 billion is from the company’s investments in new plants and site expansions since 2020, which has helped ease supply shortages of its popular drugs.
“This represents the largest pharmaceutical expansion investment in U.S. history,” Eli Lilly CEO David Ricks said at the event. “We’re making these investments … to prepare for the demand we anticipate for future pipeline medicines across our therapeutic areas.”
…Three of the future U.S. sites announced Wednesday will manufacture active ingredients in medications, such as tirzepatide, the active ingredient in Eli Lilly’s obesity drug Zepbound and diabetes treatment Mounjaro. Ricks noted that there is a “real gap in supply chain in the U.S. as it relates to active ingredient availability in our country.”
The fourth site will extend the company’s global manufacturing network for future injectable therapies, he added.
Eli Lilly has not decided on where the four new U.S. sites will be located, Ricks said. The company will be accepting location submissions through March 13 and will announce decisions on new sites in the coming months.
Eli Lilly said the four new sites will create more than 3,000 jobs for workers such as engineers and scientists, along with 10,000 construction jobs as the plants are built. The company’s other U.S. plants include sites in North Carolina, Indiana and Wisconsin.
The new investments aren’t solely dedicated to Eli Lilly’s current and future obesity and diabetes treatments. The company is charting its future beyond Zepbound and Mounjaro, with hopes to deliver drugs from its broad pipeline of products for cancer, Alzheimer’s disease and other conditions.
Ricks said the company is optimistic about its pipeline across therapeutic areas, including cardiometabolic health, oncology, immunology and neuroscience. …..
…Ricks [also] touted Trump’s 2017 Tax Cuts and Jobs Act, saying that the legislation has been “fundamental” to the company’s manufacturing investments. He called it “essential that these policies are extended permanently this year.”
… That legislation, passed by a majority-Republican Congress during Trump’s first term, was the largest tax code overhaul in nearly three decades that slashed taxes for individuals and businesses. It cut the corporate tax rate to 21%, capped deductions for state and local taxes at $10,000, and expanded the child tax credit, among other efforts.
“Long-term progress will also require U.S. policies to continue to protect the intellectual property rights and foster an innovative environment where we can do our work,” Ricks said. …
Published at CNBC on Feb. 26, 2025. Reprinted here for educational purposes only. May not be reproduced on other websites without permission.
Questions
1. The first paragraph of a news article should answer the questions who, what, where and when. List the who, what, where and when of this news item. (NOTE: The remainder of a news article provides details on the why and/or how.)
2. What is President Trump calling on companies to do?
3. What did the president warn companies he would do if they do not manufacture their products in the U.S.?
4. a) Who is Howard Lutnick?
b) How did Secretary Lutnick connect Eli Lilly’s announcement to President Trump’s policy?
5. What did CEO David Ricks say about the new manufacturing plants Lilly will be building in the U.S.?
6. a) When will the company make a decision on where they will build the four new plants?
b) How many jobs will the new sites create? – What types of jobs will they be?
7. President Trump wants to bring manufacturing back to the U.S., stressing its importance.
When addressing business leaders from around the world by video at Davos recently, he said:
My message to every business in the world is very simple: Come make your product in America, and we will give you among the lowest taxes of any nation on Earth. We’re bringing them down very substantially, even from the original Trump tax cuts. But if you don’t make your product in America, which is your prerogative, then, very simply, you will have to pay a tariff — differing amounts, but a tariff — which will direct hundreds of billions of dollars and even trillions of dollars into our Treasury to strengthen our economy and pay down debt.
Under the Trump administration, there will be no better place on Earth to create jobs, build factories, or grow a company than right here in the good old USA.
a) How important do you think it is for pharmaceuticals to be manufactured here? – and in general, for products sold here to be made in America? Explain your answer.
b) Ask a parent the same question.
Background
Eli Lilly is an American multinational pharmaceutical company headquartered in Indianapolis, Indiana, with offices in 18 countries. Its products are sold in approximately 125 countries. The company was founded in 1876 by Eli Lilly, a pharmaceutical chemist and Union army veteran during the American Civil War for whom the company was later named.
Lilly was the first company to mass-produce both the polio vaccine, developed in 1955 by Jonas Salk, and insulin. (wikipedia)
- As of October 2024, Lilly is the most valuable drug company in the world with a $842 billion market capitalization, the highest valuation ever achieved to date by a drug company.
- As of March 31, 2024, Eli Lilly and Company had 46,240 employees worldwide. This included 21,465 employees in the US and 24,775 outside the US.
- Eli Lilly has research and development facilities in 7 countries and manufacturing plants in 7 countries.
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