Lilly invests over US$5 billion to boost weight-loss drug supply
The manufacturing investment is the largest in the company’s almost 150-year history
ELI Lilly will spend US$5.3 billion to boost production of a key ingredient in its weight-loss and diabetes shots after the treatments’ explosive popularity led to shortages.
The manufacturing investment, which adds to existing plans and is the largest in the company’s almost 150-year history, will expand a site in Indiana that makes tirzepatide, the active ingredient in Zepbound for weight loss and the diabetes blockbuster Mounjaro. Lilly chief executive officer Dave Ricks described the plans on Friday (May 24) during a fireside chat with Indiana Governor Eric Holcomb at the Indiana Global Economic Summit in Indianapolis.
Lilly’s project is the latest high-profile example of a manufacturing renaissance underway in the US companies, particularly those involved in sensitive sectors like healthcare, are bringing more of their processes back to American shores, making supply chains shorter, more resilient and less prone to disruptions from escalating geopolitical tensions.
“To have the research occur here in Indiana, and then to have the production, the manufacturing of these products, and then the distribution – we can own it all, and it can be right in the centre of America,” Holcomb said in an interview.
That push, which also aims to curtail what the US sees as China’s outsized influence in key sectors, is core to President Joe Biden’s economy-focused bid for reelection. Lilly’s investment “is creating good jobs that will have a meaningful, lasting impact on communities and families across the country,” Health and Human Services Secretary Xavier Becerra said in a statement.
Indiana has been a major beneficiary of the effort, enticing advanced manufacturing businesses like biotechnology, aviation and renewable energy to the state. Last year, it attracted almost US$29 billion in committed capital investment, up from just US$8.7 billion three years ago, according to Holcomb.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
At the same time, Lilly has been locked in a battle with Danish rival Novo Nordisk to dominate the market for weight-loss drugs, which Bloomberg Intelligence analysts estimate could surpass US$80 billion by 2030. Surging demand for the treatments have made both companies some of the most valuable in the world and, despite pouring billions of dollars into boosting output, they’re struggling to keep up.
Just months Lilly launched Zepbound last year, the Food and Drug Administration said it was in shortage. Patients and pharmacies have consistently complained about the difficulties in getting a hold of the medicine.
Lilly’s supply bottlenecks have been linked to the complexity of making the plastic pens used to inject the drugs. But if demand continues to be strong, making enough of the active ingredient for the drugs could be a problem too, chief financial officer Anat Ashkenazi said in an interview in April. The company is investing “ahead” to make sure that doesn’t happen, she said.
The latest spending adds to the roughly US$3.7 billion Lilly has already earmarked for the site in Lebanon, Indiana – about 27 miles northwest of its Indianapolis headquarters.
The expansion is set to add 200 full-time jobs for highly skilled workers such as engineers, scientists, operating personnel and lab technicians who will be among an estimated 900 full-time employees when the facility is fully operational. There will be more than 5,000 construction jobs during the site’s development, the company said.
“You’re talking about not just that facility, and what they’ll manufacture there, but the whole supply chain that then forms up around them,” Holcomb said. BLOOMBERG
Share with us your feedback on BT's products and services
