Eli Lilly plans $27bn in new plants as Trump threatens pharma tariffs

The new plants will be built in the US over the next five years and create 3,000 jobs for skilled workers.

Eli Lilly plans to spend at least $27bn to build four new manufacturing plants in the United States, the drugmaker has said as it grapples with the threat of drug import duties from the Trump administration.

The new plants will be built over the next five years and are expected to create more than 3,000 jobs for skilled workers like engineers and scientists as well as 10,000 construction jobs, the company said at a Washington news conference on Wednesday.

Lilly said it will announce the locations of the sites later this year.

The announcement comes less than a week after US President Donald Trump met with chief executives from major drugmakers, including Lilly CEO David Ricks, to discuss industry concerns such as tariffs on drug imports.

US Secretary of Commerce Howard Lutnick said at the news conference that Lilly was doing “exactly what the president was hoping would happen”.

Ricks said he hoped the government would exempt medical supplies from potential tariffs and continue to pursue further tax reforms.

The CEO said in a statement earlier on Wednesday that tax-cutting legislation introduced in Trump’s first term had been foundational to the drugmaker’s domestic manufacturing investments.

Boost domestic manufacturing

Trump, who campaigned on a promise to boost domestic manufacturing, has been piling pressure on drugmakers since taking office to move medicine production to the US. He suggested last week that he could impose a 25 percent duty on pharmaceuticals and other imports.

Other sectors are also making manufacturing announcements. Earlier this week, Apple said it would spend $500bn in the US over the next four years, but analysts said some of that included current commitments.

The US and its major trading partners have agreed to reciprocal tariff elimination for pharmaceutical products and chemicals used in drug production for the past 30 years, according to the US Trade Representative’s office.

Despite telling Republicans in a White House meeting earlier this month that he was considering such an exemption, Trump has yet to rule them out.

Responding to a question about federal employee firings at the US Food and Drug Administration, the CEO said Lilly’s fees go towards funding staff at the agency and the company would be concerned if those funds “were directed towards something else”.

Lilly, which has become the world’s most valuable healthcare company, worth more than $855bn, said it has already committed $23bn to boost its US manufacturing footprint since 2020. Its Wednesday announcement brings that total to more than $50bn.

Three of Lilly’s new plants will be used to manufacture pharmaceutical raw ingredients, while the fourth will make injectable medicines, the drugmaker said.