Merck has kicked off construction of a new $3 billion facility at its sprawling manufacturing campus in Elkton, Virginia. The investment is part of the New Jersey company’s plan to spend more than $70 billion on manufacturing, R&D and capital projects in the U.S., it announced Monday.
The planned 400,000-square-foot facility will add to Merck’s presence at the massive site at the base of the Blue Ridge Mountains in Virginia’s Shenandoah Valley. The complex already covers 1.2 million square feet and employs more than 1,000.
With the investment spanning active pharmaceutical ingredient and drug product functions, the new plant will support small-molecule production and testing, Merck said. The facility, dubbed as its Center of Excellence for small-molecule manufacturing, could create more than 500 full-time jobs, according to the company.
“It’s an important milestone. It’s important for Merck. It’s important for Virginia. It’s important for manufacturing in the United States,” Merck CEO Rob Davis said at a groundbreaking event on Monday morning.
Merck’s presence in Elkton dates to the 1940s, when the facility produced vitamins for soldiers during World War II. Three years ago, the company completed a $1 billion expansion project there, which added 120,000 square feet and 150 new jobs to bolster production of its HPV vaccine Gardasil.
Merck is following suit with many other biopharmaceutical companies that have revealed plans to invest in the U.S. this year. Additionally, it is the third recent announcement of a company building a large facility in Virginia.
Last month, Eli Lilly said it had selected a site near the state capital of Richmond on which to build a $5 billion plant to produce active pharmaceutical ingredients. Less than two weeks ago, AstraZeneca broke ground on a $4.5 billion manufacturing facility in Albermarle County near the University of Virginia.
With each of the announcements, Virginia Gov. Glenn Youngkin has been front and center.
“Merck’s transformational $3 billion commitment to locate its Center of Excellence marks a giant leap forward for both America’s and Virginia’s life sciences sector,” Youngkin said in a release. “It deepens the company’s long-standing commitment to innovation and strengthens the Commonwealth’s position as the emerging national leader in biopharmaceutical advanced manufacturing and life sciences.”
Merck has already revealed other expensive U.S.-based projects this year. In April, the company began construction of a $1 billion, 470,000-square-foot biologics production facility in Wilmington, Delaware. In May, its animal health unit said it would spend $895 million to expand production capabilities at its site in De Soto, Kansas. Earlier this year, Merck completed a $1 billion, 225,000-square-foot vaccine plant at its complex in Durham, North Carolina.
Other companies that have revealed major investment plans in the U.S. in recent months include Roche, which has pledged to spend $50 billion, and Johnson & Johnson, which has unveiled a $55 billion plan that includes bolstering its medtech business. Meanwhile, Sanofi and Novartis have committed to spend at least $20 billion each in the U.S. by the end of the decade, among investment pledges from many other drugmakers.
The planned investments come as President Donald Trump has threatened to tax drugs imported into the U.S. Much remains uncertain about the effect of potential tariffs, though last month Trump said a 100% tax would be added to imported pharmaceuticals, with exemptions for companies that are building manufacturing facilities in the U.S.
"This concept of a state-of-the-art Center of Excellence is paramount," Youngkin said at the event. "I want to thank Merck for stepping forward and recognizing not just the economic need but the national security need to make sure that America controls our supply chain and we will never be subject to a stranglehold from a foreign adversary."