Eli Lilly and Company announced massive plans for domestic
manufacturing expansion during a Washington, D.C. event on Tuesday, with CEO David Ricks unveiling $27 billion in planned investments for four new U.S. drug manufacturing facilities. The announcement came alongside newly appointed Commerce Secretary Howard Lutnick and builds upon $23 billion in U.S. manufacturing commitments the company has made since 2020.
The pharmaceutical giant’s latest investment push arrives amid mounting pressure from the Trump administration to increase domestic drug production, including threats of potential 25% tariffs on pharmaceutical imports. During recent discussions with pharmaceutical executives including Ricks, Trump emphasized these potential trade measures while encouraging expanded U.S. manufacturing capacity.
Three of the planned facilities will focus on producing active pharmaceutical ingredients for small molecule drugs, addressing what Ricks identified as a significant gap in domestic manufacturing capabilities. The CEO emphasized how this expansion would reduce dependence on foreign suppliers while strengthening supply chain control.
The announcement echoed a similar 2017 event where Ricks promoted an $850 million U.S. manufacturing investment while advocating for corporate tax reforms. During Tuesday’s presentation, Ricks stressed the importance of extending the 2017 tax cuts set to expire this year, describing them as “fundamental” to Lilly’s investment strategy. The House of Representatives passed legislation Tuesday to renew these tax measures, which had reduced corporate rates to 21% and lowered taxes on repatriated foreign profits.
Commerce Secretary Lutnick praised Lilly’s initiative, stating it aligned with presidential goals for American manufacturing investment. “We need steel mills. We need precursor medicines. These are fundamental underpinnings of America that we need to reshore,” Lutnick remarked at the federal building event.
Ricks also used the platform to advocate for pharmaceutical industry priorities, including modifications to Medicare’s drug price negotiation program established under the Biden administration. The industry seeks extended timelines before small molecule drugs become eligible for price negotiations, with Ricks warning that without such changes, companies might shift focus away from preventative medicines toward acute treatments.
Additionally, Lilly is pushing for Medicare coverage of obesity medications, as the program currently excludes weight loss drugs like their GLP-1 treatment Zepbound. Ricks expressed hope for finalizing proposed rules to enable such coverage.
The CEO characterized tax reform as a positive incentive or “carrot” approach to encouraging domestic manufacturing, contrasting it with the administration’s tariff “stick” strategy. “When that’s not in balance, I don’t think they’re going to get the outcome they want,” Ricks cautioned.
Secretary Lutnick emphasized the broader implications of Lilly’s investment, highlighting it as an example of successful economic policy driving domestic manufacturing growth. The announcement represents one of the largest commitments to U.S. pharmaceutical manufacturing in recent years, potentially influencing industry trends toward increased domestic production capacity.
The scale of Lilly’s planned expansion significantly exceeds their 2017 investment announcement, reflecting both evolving market conditions and changing political pressures around pharmaceutical manufacturing. With these new facilities, particularly those focused on active pharmaceutical ingredients, Lilly aims to establish more robust domestic supply chains while advocating for policies they view as essential to sustaining such investments.