The move comes after President Donald Trump warned Big Pharma leaders that he would impose tariffs on them if they refuse to reshore their manufacturing operations.
Eli Lilly will invest some $27 billion to beef up its U.S. manufacturing capacity, the pharma announced at an event in Washington on Wednesday, according to several media reports.
Howard Lutnick, U.S. Secretary of Commerce, who was also speaking at the same event, said the pharma’s move was “exactly what [President Donald Trump] was hoping would happen,” as per Reuters.
This news comes after Trump threatened to slap Big Pharma with tariffs if they don’t reshore their manufacturing operations. Trump made the warning during a closed-door event on Saturday, in front of some of the biggest names in the industry, including Merck CEO Robert Davis and Pfizer CEO Albert Bourla. Lilly’s head David Ricks was also in attendance.
A few days earlier, Trump said he was considering a 25% tariff on pharmaceutical products—alongside other imports such as semiconductors and automobiles—as reported by CNBC. These duties, Trump said, could “go very substantially higher over a course of a year.”
Earlier this month, Trump likewise revealed steep tariffs on Canada, Mexico and China. Though these levies weren’t aimed specifically at the pharma industry, some analysts raised concerns that they could still pose some problems for the industry. The tariffs on China are particularly worrisome, Seeking Alpha analyst Edmund Ingham wrote at the time, because biopharma is “increasingly looking to China to find promising new drug candidates.”
Speaking to the press on Wednesday, Lilly CEO Ricks said it plans to spread its $27 billion commitment across four new manufacturing facilities, which it plans to build over the next five years, according to reporting from Reuters. The exact locations of these plants have yet to be revealed, but the pharma believes they will create over 3,000 new jobs for engineers, scientists and other skilled workers, as well as 10,000 construction openings.
Lilly is no stranger to hefty domestic investments. In October 2024, the pharma pumped $4.5 billion into its operations in Indiana, earmarked for the construction of a hybrid facility that will house both research and manufacturing activities. Lilly has previously made several multi-billion investments in its home state, including a $2.1 billion commitment in May 2022 and a $5.3 billion infusion in May 2024, both to boost production capacity.
These manufacturing investments have paid off for Lilly, with the FDA in December 2024 formally ending the shortage of its blockbuster GLP-1 therapy tirzepatide, sold as Mounjaro for type 2 diabetes and Zepbound for chronic weight management.
