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Eli Lilly (LLY-1.00%), the maker of the blockbuster weight-loss drug Zepbound, announced Wednesday that it plans to invest $27 billion in four new manufacturing sites in the United States. But the company made it clear that those plans hinge on tax cuts.
The new sites could create 3,000 permanent jobs and nearly 10,000 construction jobs, Eli Lilly said; the facilities would focus on producing active pharmaceutical ingredients (APIs) — the main ingredient in drugs, which the industry currently sources largely from China and other countries.
“Our confidence positions us to help reinvigorate domestic manufacturing, which will benefit hard-working American families and increase exports of medicines made in the U.S.A.,” said Eli Lilly CEO David Ricks in a press release.
The announcement comes at a pivotal moment for the industry. President Donald Trump has threatened tariffs on pharmaceuticals, and Robert F. Kennedy Jr., a vocal critic of the pharmaceutical industry, was just confirmed as health secretary. The timing suggests Eli Lilly is looking to align itself with the new administration.
The announcement also comes as Lilly recovers from a recent supply shortage of Zepbound, one of its top-selling drugs, which accounted for about 10% of its sales in 2024. With demand for weight-loss treatments soaring, the company, which is already working on next-gen versions, appears to be taking steps to prevent future shortages that could create opportunities for other companies to sell cheaper, off-brand alternatives of its patented meds.
Still, Lilly isn’t hiding the fact that its investment may depend on tax policy.
“The Tax Cuts and Jobs Act legislation passed in 2017 during President Trump’s first term in office has been foundational to Lilly’s domestic manufacturing investments, and it is essential that these policies are extended this year,” Ricks said in the company’s press release.
He went even further in an interview with The Wall Street Journal, saying, “We need to see those [tax cuts] either extended or improved to support this.”