Eli Lilly Invests $1.2 Billion in Puerto Rico Plant, Bolstering U.S. Manufacturing Capacity

Eli Lilly and Company has announced a significant $1.2 billion investment to upgrade its manufacturing facility in Carolina, Puerto Rico. This move is part of a larger trend of pharmaceutical companies expanding their U.S. production capabilities amidst potential policy changes and growing demand for innovative treatments.

Expansion of Oral Drug Production

The investment in Lilly's Puerto Rico plant, known as Lilly del Caribe, will focus on enhancing the company's capacity to produce oral medicines. This includes treatments across various therapeutic areas such as neuroscience, oncology, immunology, and cardiometabolic health. Of particular note is the planned production of orforglipron, Lilly's highly anticipated oral GLP-1 treatment for cardiometabolic conditions.

Edgardo Hernandez, head of Lilly's manufacturing operations, emphasized the strategic importance of the investment, stating, "Our continued investments in capacity, infrastructure, advanced technologies and highly specialized jobs will further cement the site's significance in Lilly's global manufacturing network."

The upgrade is set to create 100 new manufacturing jobs at the site, with construction beginning in 2026 and operations expected to commence in 2028.

Part of a Broader U.S. Manufacturing Initiative

Lilly's investment in Puerto Rico is just one piece of a larger commitment to bolster its U.S. manufacturing capabilities. Since 2020, the company has earmarked over $50 billion for domestic production expansion. This includes recently announced plans for a $5 billion API plant near Richmond, Virginia, and a $6.5 billion API production complex for oral drugs in Houston, Texas.

The company is also planning to reveal the locations of two additional "mega sites" in the coming months, further solidifying its U.S. manufacturing footprint.

Industry-Wide Trend of Domestic Investment

Lilly's moves are part of a broader industry trend, with several major pharmaceutical companies announcing significant investments in U.S. manufacturing. Merck has committed $70 billion over the next five years for manufacturing, R&D, and capital projects. Roche and Johnson & Johnson have pledged $50 billion and $55 billion, respectively, while Sanofi and Novartis have each committed at least $20 billion for U.S. investments by the end of the decade.

These investments come against the backdrop of potential policy changes, including President Donald Trump's threat to impose a 100% tax on imported pharmaceuticals, with exemptions for companies building manufacturing facilities in the U.S. While the full impact of such policies remains uncertain, they have undoubtedly influenced the industry's domestic investment strategies.