Merck Breaks Ground on $1B Keytruda Facility, Bolstering US Manufacturing Presence

Merck has announced the commencement of construction on a new $1 billion manufacturing facility in Wilmington, Delaware, dedicated to producing its blockbuster cancer drug Keytruda. This move comes as part of a broader trend among pharmaceutical giants to increase their manufacturing capabilities within the United States.

Delaware Facility to Become US Home for Keytruda Production

The 470,000-square-foot commercial production facility, dubbed "Merck Wilmington Biotech," will serve as the future US home for Keytruda manufacturing. The plant will also produce antibody-drug conjugates (ADCs) and other next-generation drugs, showcasing Merck's commitment to expanding its biologics pipeline.

Merck CEO Robert Davis emphasized the company's dedication to US manufacturing, stating, "This represents our continued commitment to growing our investments in US manufacturing and has the potential to create thousands of high-paying American jobs while ensuring that we can produce and distribute products close to patients right here in the US."

The facility is expected to employ over 500 people once fully operational, with the laboratory component set to be functional by 2028 and production of compounds beginning by 2030. Merck projects that construction of the plant will create more than 4,000 jobs, with potential future expansions adding up to 1,500 full-time positions and 26,000 construction roles.

Strategic Response to Tariff Threats and Market Demands

Merck's decision to invest in US-based manufacturing comes amid threats of tariffs on imported pharmaceutical products by the Trump administration. The company is particularly vulnerable to such measures, as a significant portion of its Keytruda production currently takes place in Ireland and Singapore.

In its recent quarterly earnings report, Merck disclosed that it has factored in a $200 million impact from potential tariffs in its 2025 revenue projections. This new facility appears to be a strategic move to mitigate such risks and ensure a stable supply chain for its most lucrative product. In 2024, Keytruda generated sales of $29.5 billion, accounting for 46% of Merck's total revenue of $64.2 billion.

Broader Trend of Pharmaceutical Investment in US Manufacturing

Merck's announcement aligns with a growing trend among major pharmaceutical companies to invest heavily in US-based operations. Since 2017, Merck has allocated more than $12 billion to strengthen its US manufacturing and research capabilities, with plans for an additional $9 billion in investments over the next four years.

Other industry giants have made similar commitments:

• Roche recently unveiled a $50 billion plan focused on enhancing its US operations.
• Johnson & Johnson announced a $55 billion investment to support American jobs.
• Eli Lilly and Novartis have pledged $27 billion and $23 billion, respectively, for US-based initiatives.

These investments underscore the pharmaceutical industry's response to political pressures, supply chain concerns, and the strategic importance of maintaining a strong manufacturing presence in the United States.