Eli Lilly (LLY) plans to invest at least $27 billion to build four new manufacturing sites in the U.S., amid President Trump’s threat of tariffs and soaring demand for its incretin-based weight loss and diabetes drugs.
The announcement today, which brings LLY’s investments in new domestic plants made since 2020 to more than $50 billion, comes as drugmakers seek to win the favor of Trump, who has threatened to impose 25% tariffs on pharma imports to the U.S. as part of his emphasis on reshoring manufacturing facilities.
Trump Tariffs Loom
Making the announcement in Washington, D.C., CEO David Ricks stressed that the investment would “reinvigorate domestic manufacturing, which will benefit hard-working American families and increase exports of medicines made in the U.S.A.”
It comes just days after Trump told big pharma executives at a private meeting to bring production home or face swingeing tariffs, according to Bloomberg. LLY’s Ricks was present, as was Pfizer (PFE) CEO Albert Bourla and Merck (MRK) CEO Robert Davis.
Eli Lilly said three of the future U.S. sites announced today will focus on reshoring critical capabilities of small molecule chemical synthesis, strengthening its supply chain, and manufacturing of key active pharmaceutical ingredients, such as tirzepatide, the active ingredient in its obesity drug Zepbound and diabetes treatment Mounjaro.
The fourth location will extend the company’s global manufacturing capacity for future injectable therapies, the company said in a release. LLY is keen to use its windfall from the obesity and diabetes drugs to invest in new treatments, such as its Alzheimer’s drug Kisunla.
“Lilly’s optimism about the potential of our pipeline across therapeutic areas – cardiometabolic health, oncology, immunology and neuroscience – drives our unprecedented commitment to our domestic manufacturing build-out,”said David Ricks.
Surging Demand Drives Decision
The move comes amid surging demand for its blockbuster incretin obesity and weight loss drugs. Earlier this month LLY reported worldwide revenue jumped 45% to $13.53 billion, driven largely by Mounjaro and Zepbound.
U.S. Zepbound revenue was $1.91 billion, expanding more than ten-fold compared with $175.8 million in Q4 2023. For Fiscal Q4 2024, worldwide Mounjaro revenue increased 60% to $3.53 billion. For 2025 LLY expects approximately 32% growth compared to 2024, driven by new medicines.
Demand for the incretin obesity drugs in the U.S. continues to outpace LLY’s supply, and Q4 results were in line with lower preliminary guidance offered in January as it struggled to produce enough doses.
In its quarterly report the company said it estimates producing at least 1.6 times the amount of salable incretin doses in the first half of 2025, compared to the first half of 2024.
Politics Is Never Far Away
LLy said it expects to create more than 3,000 jobs across the four sites for highly skilled workers, including engineers, scientists, operations personnel and lab technicians. It also thinks it could create nearly 10,000 construction jobs during the development of the sites.
Not done with apparently warding off tariffs, Ricks went further to praise the first Trump administration’s tax-cutting agenda, key provisions of which are due to expire at the end of December.
“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,” he added.
Is LLY a Good Stock to Buy?
Overall, Wall Street has a Strong Buy consensus rating on LLY stock, based on 16 Buys and one Hold. The average LLY price target of $1,015.85 implies 10% upside from current levels, though price targets are liable to change.
