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Johnson & Johnson (JNJ-0.06%) is joining Eli Lilly (LLY-0.12%) in attempting to court favor with President Donald Trump by announcing plans to expand its manufacturing footprint in the United States.
The pharma giant said on Friday that it plans to invest $55 billion in the U.S. over the next four years. That figure includes previously planned research and development spending, as well as a new manufacturing facility in Wilson, North Carolina, which officially broke ground today. The company expects the site to create 5,000 construction jobs and more than 500 permanent positions once operational.
In addition, Johnson & Johnson said it plans to build three new advanced manufacturing facilities and expand several existing sites.
“This represents a 25% increase in investment compared to the previous four years and builds upon the Company’s already elevated U.S. investment levels resulting from the passage of the 2017 Tax Cuts & Jobs Act,” the company said in a press release.
Eli Lilly also cited the tax law — which dates back to Trump’s first administration — when it recently announced its own plans to invest $27 billion in four new manufacturing sites in the United States.
“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,” Eli Lilly CEO David Ricks said in a February 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.”
The announcements come at a pivotal moment for the pharmaceutical industry. Trump has threatened tariffs “in the neighborhood of 25%” on pharmaceuticals, and Robert F. Kennedy Jr., a vocal critic of Big Pharma with no medical training, was confirmed as health secretary earlier this year. The timing indicates that both Eli Lilly and Johnson & Johnson are looking to align themselves with the administration.
Trump has pushed pharma companies to bring more production to the U.S. as part of his broader effort to boost domestic manufacturing. In February, Trump met with top industry executives, including Ricks; just a week later, Eli Lilly announced those new investment plans.
Pfizer (PFE-0.46%) may soon follow suit. CEO Albert Bourla said earlier this month that the company could shift some of its overseas production to U.S. plants if necessary.