With $27 billion earmarked to expand its U.S. production footprint starting this year, Eli Lilly is busy scouting out potential sites for new drug ingredients plants.
Eli Lilly is jockeying for a tax break in Texas as it weighs whether to build a $5.9 billion active pharmaceutical ingredient (API) manufacturing facility in Houston, according to a recent filing (PDF) with the state.
Should the proposal move forward, Lilly plans to purchase roughly 236 acres at Houston’s Generation Park from the commercial development’s owner, McCord Development. The final project would comprise multiple buildings and outdoor facilities, plus infrastructure buildout and equipment installation, according to the filing.
Assuming Lilly settles in Houston, the drugmaker expects the new plant will employ 604 full-time staffers upon ramp-up completion. The company would look to hire operations technicians and production specialists, as well as a mix of roles across maintenance, quality control, engineering, administration and management functions.
When reached for comment, Lilly did not go into details about the Texas proposal but confirmed it’s related to the broader $27 billion U.S. manufacturing investment the company unveiled in late February.
“As announced in February, Lilly 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,” a Lilly spokesperson said over email. “Any future decisions will be shared at the appropriate time.”
When Lilly telegraphed its $27 billion outlay earlier this year, the company heralded the start of a Big Pharma investment spree in the U.S. The billions of dollars in investment pledges, which have come from the likes of Lilly, J&J, Bristol Myers Squibb, Roche, Novartis and others, have arrived as the industry looks to gird against the threat of potential pharmaceutical import tariffs under the Trump administration.
As for Lilly's expansion plan, which is expected to create some 3,000 new jobs once complete, the drugmaker said in February that it was in “negotiations with several states” to find homes for a quartet of upcoming production facilities. Three of the new plants will focus on API manufacturing, while the fourth will produce injectable drugs, Lilly said earlier this year.
As part of the location search, Lilly opened up an application process under which any state could pitch itself for consideration by March 12. The company expects to reveal all four final site locations before the end of the year, a Lilly spokesperson told Fierce Pharma in March.
It’s not uncommon for drugmakers to seek incentives or tax breaks in states where they’re considering setting up operations.
Such was the case with Merck & Co. when it secured a $30 million grant from Delaware in February, which was contingent on the New Jersey drug giant setting up a new commercialization and launch facility in the state.
Although Merck had considered multiple locations around the globe for its plant-in-waiting, the company ultimately settled on Delaware and announced the start of construction on a new $1 billion facility there in late April.
The 470,000-square-foot Delaware plant will crank out biologics. Merck also envisions the site becoming the “future U.S. home” for its megablockbuster oncology med Keytruda.