Eli Lilly, one of the largest pharmaceutical companies in the US, has announced a $27 billion plan to build four manufacturing facilities in the country, reinforcing a broader shift toward domestic drug production.
The announcement comes amid growing political pressure to reduce reliance on foreign supply chains, particularly those in China.
The US pharmaceutical industry has traditionally relied on overseas suppliers for key drug ingredients. However, recent global disruptions—such as disease outbreaks and supply chain vulnerabilities—have increased calls for reshoring production. The Trump administration has been vocal about bringing manufacturing back to the US, with President Trump recently threatening tariffs on pharmaceuticals if companies do not relocate operations.
In response, Eli Lilly’s CEO, David Ricks, joined Commerce Secretary Howard Lutnick in Washington, D.C., to announce the company’s historic investment. The expansion is expected to create 3,000 permanent jobs, in addition to 10,000 construction jobs.
Eli Lilly credited Trump’s 2017 tax cuts as a key factor in making domestic investments viable, emphasizing the importance of maintaining these policies. The administration’s focus on economic competition with China has also played a role, with companies like Lilly anticipating potential trade restrictions that could impact drug imports.
While acknowledging the potential benefits of bringing pharmaceutical production closer to home, Ricks noted that tariffs on medical supplies could increase costs in the short term. He also called for regulatory reforms to streamline approval processes for new facilities.
The reliance on foreign-sourced pharmaceutical ingredients has been a long-standing concern for policymakers. As of 2019, the majority of active pharmaceutical ingredients (APIs) used in U.S. drugs were manufactured overseas, with China alone accounting for 13%. National security experts have warned that supply chain disruptions—caused by pandemics, trade disputes, or geopolitical conflicts—could lead to critical drug shortages.
By increasing US-based production of APIs, Lilly aims to strengthen the domestic supply chain and enhance national preparedness for future health crises. The company’s investment aligns with broader efforts to bolster American manufacturing across various industries.
Eli Lilly is not alone in its push for domestic expansion. The pharmaceutical industry has been making strategic moves to align with shifting government policies. Lilly itself has invested in manufacturing sites in Germany, Ireland, and China, but the new US plants mark its most significant investment in reshoring efforts.
Despite the potential benefits, industry experts caution that increased domestic production could lead to higher costs for consumers. Health economists argue that while onshoring APIs may improve security, it does little to address drug pricing concerns unless applied to the generic drug market, which remains heavily dependent on Chinese suppliers.
Lilly has not yet disclosed the locations of its planned US facilities but is actively negotiating with multiple states. The company expects to finalize its site selections and begin construction within the next year. The projects will take approximately four to five years to complete.
Axios and the Washington Post contributed to this report.
