Eli Lilly Eyes Houston for $5.9B API Plant Amid $27B U.S. Manufacturing Push

Pharmaceutical giant Eli Lilly is considering Houston, Texas as a potential location for a new $5.9 billion active pharmaceutical ingredient (API) manufacturing facility. This development is part of the company's broader $27 billion investment plan to expand its U.S. production footprint, announced in February 2023.

Texas Tax Break and Facility Details

Lilly is currently seeking a tax break in Texas as it evaluates the possibility of constructing the API plant in Houston. According to a recent state filing, the company plans to purchase approximately 236 acres at Houston's Generation Park from McCord Development, should the proposal move forward.

The proposed facility would comprise multiple buildings and outdoor facilities, along with necessary infrastructure and equipment installations. Upon completion, the plant is expected to employ 604 full-time staff members, including operations technicians, production specialists, and various roles in maintenance, quality control, engineering, administration, and management.

Broader U.S. Manufacturing Investment

The Houston proposal is part of Lilly's larger $27 billion investment strategy aimed at expanding its U.S. manufacturing capabilities. This investment, announced in late February, is expected to create approximately 3,000 new jobs across four new production facilities. Three of these plants will focus on API manufacturing, while the fourth will produce injectable drugs.

A Lilly spokesperson confirmed that the company is "actively evaluating manufacturing site locations throughout the U.S. to expand capacity to meet the growing demand for our current and future pipeline medicines across multiple therapeutic areas." The drugmaker expects to reveal all four final site locations before the end of the year.

Industry-wide U.S. Investment Trend

Lilly's substantial investment in U.S. manufacturing is part of a broader trend in the pharmaceutical industry. Companies such as Johnson & Johnson, Bristol Myers Squibb, Roche, and Novartis have also announced significant investments in U.S. production facilities. This surge in domestic manufacturing investments comes as the industry seeks to mitigate potential risks associated with pharmaceutical import tariffs under the current administration.

The trend extends beyond Lilly, with other pharmaceutical companies also seeking incentives and tax breaks in states where they plan to establish operations. For instance, Merck & Co. recently secured a $30 million grant from Delaware for a new commercialization and launch facility, which led to the construction of a $1 billion biologics plant in the state.