In a significant announcement on Tuesday, Eli Lilly’s Chief Executive Officer David Ricks unveiled plans for a massive expansion of the company’s U.S. manufacturing capabilities, accompanied by calls for business-friendly policy changes. Speaking at Washington D.C.’s Andrew W. Mellon Auditorium alongside Commerce Secretary Howard Lutnick, Ricks revealed the pharmaceutical giant’s intention to invest $27 billion in constructing four new drug manufacturing facilities across the United States.
This latest commitment adds to Lilly’s existing $23 billion domestic manufacturing investments made since 2020, marking what Ricks termed an “expansion agenda unprecedented in history.” The announcement comes amid President Trump’s threats to impose approximately 25% tariffs on pharmaceutical imports, following recent discussions with
pharmaceutical industry leaders.
Three of the planned facilities will focus on producing active pharmaceutical ingredients for small molecule drugs, addressing what Ricks identified as a long-standing gap in U.S. manufacturing capabilities. The executive emphasized that this expansion would reduce the company’s dependence on foreign suppliers while
strengthening supply chain control.
During the announcement, Ricks stressed the importance of extending the 2017 tax cuts, which are set to expire this year, describing them as “fundamental” to Lilly’s investment strategy. He characterized tax reform as the positive incentive, or “carrot,” in contrast to the administration’s tariff threats, which he viewed as the “stick” approach to reshoring manufacturing.
The timing of Lilly’s announcement coincided with the House of Representatives’ narrow passage of legislation to extend the 2017 tax cuts, which had reduced corporate tax rates to 21% and decreased taxes on repatriated foreign profits.
Beyond manufacturing and tax policy, Ricks advocated for modifications to Medicare’s drug price negotiation program, established under the Biden administration. The industry is particularly focused on extending the timeline for when small molecule drugs become eligible for price negotiations. Ricks warned that without such changes, pharmaceutical companies might shift away from developing preventative medicines in favor of acute treatments, potentially conflicting with Health and Human Services Secretary Robert F. Kennedy Jr.’s healthcare objectives.
Additionally, Lilly is pushing for Medicare coverage of obesity medications. The company is particularly interested in the Centers for Medicare and Medicaid Services finalizing a proposed rule that would enable Medicare to cover weight loss drugs, including Lilly’s GLP-1 medication Zepbound, which is currently excluded from coverage.
Commerce Secretary Lutnick praised Lilly’s initiative, stating that the company’s actions aligned perfectly with the administration’s goals for domestic investment. He emphasized the broader importance of rebuilding America’s industrial infrastructure, including steel mills and pharmaceutical precursor production facilities.
The announcement marked a significant evolution from Lilly’s 2017 investment announcement, when Ricks promoted an $850 million manufacturing investment while advocating for Trump’s first-term corporate tax cuts. The current expansion represents a substantially larger commitment to domestic pharmaceutical manufacturing, reflecting both changing political pressures and strategic business
considerations.
The extensive manufacturing expansion plans demonstrate Lilly’s response to mounting political pressure for domestic pharmaceutical production, while simultaneously leveraging the announcement to advocate for favorable policy changes in areas of tax, drug pricing, and healthcare coverage.