Eight years ago, Eli Lilly’s CEO, David Ricks, announced an $850 million investment in U.S. manufacturing and encouraged Congress to pass corporate tax cuts. Recently, Ricks announced an even larger plan: Eli Lilly will invest $27 billion to build four new drug factories in the U.S., adding to $23 billion already committed since 2020. This move aligns with President Trump’s push for more domestic investments and manufacturing.
Commerce Secretary Howard Lutnick praised the plan, emphasizing the need for more U.S.-based production facilities. This announcement followed Trump’s threats to impose high tariffs on pharmaceutical imports to encourage domestic manufacturing. Ricks explained that the investment would help Lilly reduce its dependence on foreign suppliers and regain control of its supply chain. Three of the new plants will focus on producing ingredients for small molecule drugs, which have been lacking in the U.S. for some time.
Ricks also highlighted the importance of the 2017 tax cuts, which are due to expire soon. He urged for these cuts to be extended permanently, as they are crucial for Lilly’s investment plans. The House of Representatives recently passed a bill to renew these tax cuts, which reduced the corporate tax rate to 21%.
Ricks also addressed other policy issues affecting the pharmaceutical industry. He advocated for changes to a Biden-era law that allows Medicare to negotiate drug prices, hoping to extend the timeline for small molecule drugs. Without this extension, companies might reduce investment in these types of drugs, which are often taken as pills and can treat various diseases.
Additionally, Lilly wants Medicare to cover obesity medications, including their drug Zepbound, as current rules prevent coverage for weight loss drugs. Ricks expressed hope to work with the administration to finalize a rule change that would allow this coverage.