Editor’s (re)View: Eli Lilly’s $27B investment in US manufacturing is an attempt to curry favor with Trump

The big news this week was Eli Lilly’s announcement that it is investing $27 billion to build four new U.S. pharmaceutical manufacturing sites. This is on top of the pharma giant’s previous total domestic capital expansion commitments of $23 billion since 2020. The company has now more than doubled its U.S. manufacturing investment, exceeding $50 billion. 

Lilly’s investment in American infrastructure comes as President Donald Trump has threatened to impose tariffs on pharmaceuticals, while pressuring drugmakers to reshore manufacturing to the U.S. and reduce reliance on China and other foreign supply chains.

At a press conference this week in Washington, D.C., Lilly CEO David Ricks said the company’s planned $27 billion investment was motivated by reducing Lilly’s “reliance on foreign suppliers” and better controlling its supply chain. Ricks noted that three of the four new manufacturing sites will be focused on producing active pharmaceutical ingredients (APIs), which he said has been “absent from the landscape in the U.S. for some time.”

Newly confirmed Commerce Secretary Howard Lutnick, who was also at the Washington event, said Lilly is “doing exactly what the president is hoping would happen, which is having tens of billions of dollars in investment in America.”

The timing of Lilly’s $27 billion U.S. manufacturing investment comes less than a week after Ricks, along with other Big Pharma executives, met with Trump at the White House. In an interview with CNBC, Ricks was asked if his company’s announcement this week in the nation’s capital was politically motivated.

Angelica Peebles, CNBC’s health and pharmaceutical reporter, pointed out that the Indianapolis-headquartered drugmaker chose to hold the announcement event in Washington and to invite Lutnick to represent the Trump administration. “How much of this is about getting a message to President Trump?” Peebles asked.   

“We do want to influence the policy environment,” Ricks replied. “We need that corporate tax rate to stay low and then, of course, other policies that support domestic manufacturing. We want to build things here. We want to make our medicines here. We need an environment that remains competitive to do that.”

In the Lilly press release announcing the $27 billion U.S. investment, Ricks called out the Tax Cuts and Jobs Act which was passed in 2017 during Trump’s first administration. He said the legislation “has been foundational to Lilly’s domestic manufacturing investments, and it is essential that these policies are extended this year.”

In the CNBC interview, Ricks said Lilly needs “help from government” to address the protracted environmental and local permitting times to approve new manufacturing sites due to cumbersome FDA requirements. “We could work together with the government and speed up these sites coming online,” he said.

Ricks made no bones about the fact that Lilly continues to speak with the Trump administration “about what the contours” of a potential U.S. tariff policy on imports could and should be. “It makes no sense to punish companies that are pursuing this agenda with the administration and on behalf of the American people, so we’ll make that point as well,” he said.

Lilly expects to announce the locations of the four new U.S. pharma manufacturing sites in 2025. While the company is currently in negotiations with several states, the drugmaker welcomes additional interest from state governments by March 12.

“We’re open to locating in other places,” Ricks told CNBC. “Governors and states can reach out to us and say ‘hey, we’ve got a great opportunity for you to make medicine in our state.’ So, we want to hear all those proposals.”

At the same time, Ricks emphasized Lilly is a global company that will also spend its resources to “expand capacity in places where that makes sense.” He noted that Europe and Asia are big markets for the drugmaker. Ultimately, Ricks predicted that Lilly will be a “net exporter out of the U.S. when all this is said and done.”