Eli Lilly and Company announced massive expansion plans for U.S. manufacturing on Tuesday, with CEO David Ricks revealing a $27 billion investment to construct four new pharmaceutical production facilities. The announcement, made alongside Commerce Secretary Howard Lutnick in Washington, D.C., builds upon the company’s existing $23 billion commitment to domestic manufacturing since 2020.
The pharmaceutical giant’s latest investment strategy comes as the Trump administration pushes for increased domestic drug production, with the president recently suggesting potential 25% tariffs on pharmaceutical imports. During a meeting with pharmaceutical executives, including Ricks, Trump emphasized this possibility while encouraging increased U.S.-based 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 U.S. manufacturing
capabilities. The CEO emphasized the importance of reducing dependence on foreign suppliers and strengthening domestic supply chain control.
The timing of Lilly’s announcement coincides with ongoing discussions about extending the 2017 corporate tax cuts, which Ricks described as “fundamental” to the company’s investment decisions. The House of Representatives passed legislation Tuesday to extend these tax reductions, which currently include a 21% base corporate tax rate and favorable terms for repatriated foreign profits.
During the announcement, Ricks advocated for several
industry-favorable policy changes, including modifications to Medicare’s drug price negotiation program. The company seeks an extension of the timeline for when small molecule drugs become eligible for price negotiations, arguing that the current structure could discourage investment in preventative medicines in favor of acute treatments.
Commerce Secretary Lutnick praised Lilly’s initiative, stating it aligned with the administration’s goals for domestic investment. “We need steel mills. We need precursor medicines. These are fundamental underpinnings of America that we need to reshore,” Lutnick said at the federal building event.
The announcement mirrors a similar moment eight years ago when Ricks announced an $850 million U.S. manufacturing investment while advocating for Trump’s first-term corporate tax cuts. However, the scale of the current investment represents a significant escalation in the company’s commitment to domestic production.
Lilly is also pursuing changes to Medicare coverage policies, particularly regarding obesity medications. The company is backing efforts to finalize a proposed rule that would allow Medicare to cover weight loss drugs, including Lilly’s GLP-1 medicine Zepbound, which is currently excluded from coverage.
Ricks emphasized the relationship between tax policy and manufacturing investment, describing tax reform as the “carrot” in contrast to the administration’s tariff “stick” approach. He suggested that without extending the tax cuts, the desired outcome of increased domestic manufacturing might not materialize.
The company’s expansion plans represent a significant vote of confidence in U.S. manufacturing capabilities while also serving as leverage in ongoing policy discussions. The announcement demonstrates how major pharmaceutical companies are positioning themselves in response to both political pressures and economic incentives, while advocating for policies that would benefit their industry.
Commerce Secretary Lutnick’s presence at the announcement underscored the administration’s support for such domestic investment initiatives, particularly in critical industries like pharmaceutical manufacturing. The event highlighted the complex interplay between corporate investment decisions, government policy, and the broader goal of strengthening U.S. manufacturing capabilities in essential industries.