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Eli Lilly plans to invest $27B to build four new US plants as tariffs loom
LLYLilly(LLY) New York Post·2025-02-26 21:06

Core Viewpoint - Eli Lilly plans to invest 27billiontoconstructfournewmanufacturingplantsintheUnitedStates,respondingtopotentialdrugimportdutiesfromtheTrumpadministration[1][4].InvestmentandJobCreation−Theinvestmentisexpectedtocreate3,000high−skilledpositionsandapproximately10,000constructionjobs[2].−Thenewmanufacturingsiteswillbeannouncedlaterthisyearandareanticipatedtobeoperationalwithinfiveyears[3].IndustryContextandGovernmentRelations−ThisinvestmentalignswiththeTrumpadministration′spushforrevitalizingAmericanmanufacturing,followinga27 billion to construct four new manufacturing plants in the United States, responding to potential drug import duties from the Trump administration [1][4]. Investment and Job Creation - The investment is expected to create 3,000 high-skilled positions and approximately 10,000 construction jobs [2]. - The new manufacturing sites will be announced later this year and are anticipated to be operational within five years [3]. Industry Context and Government Relations - This investment aligns with the Trump administration's push for revitalizing American manufacturing, following a 500 billion investment announcement by Apple [3]. - Eli Lilly's CEO emphasized the need for the extension or improvement of corporate tax cuts to support the investment, highlighting that the company had not built a new site in the US for over 40 years prior to the first set of tax cuts [4]. Market Response and Stock Performance - Shares of Eli Lilly rose by approximately 0.5% to 906.70,withthestockincreasingover16906.70, with the stock increasing over 16% since the beginning of the year [7]. Supply Chain Considerations - A significant portion of the pharmaceutical industry's supply chain relies on overseas production, particularly from countries like Ireland, Switzerland, and China for active pharmaceutical ingredients [7][10]. - Indian firms also play a crucial role in producing lower-cost generic medications [8]. Ongoing Negotiations - Eli Lilly is currently negotiating with multiple states regarding the placement of its new manufacturing facilities and is open to additional proposals until mid-March [12]. Previous Investments - This commitment follows a 23 billion investment in US operations from 2020 to 2024, which included new manufacturing sites in Wisconsin and North Carolina, as well as expansions in Indiana [13].