WASHINGTON – Eli Lilly announced plans Friday to construct a $3.5 billion pharmaceutical manufacturing facility in Pennsylvania, marking the company’s fourth new U.S. production site as it seeks to strengthen domestic supply chains and meet soaring demand for obesity treatments.
The plant will manufacture Lilly’s injectable weight-loss medications, including retatrutide, a next-generation therapy that has shown stronger clinical performance than the company’s blockbuster drug Zepbound. The investment represents the largest ever by a life-sciences company in Pennsylvania and is expected to create at least 850 jobs in the Lehigh Valley.
Drugmakers have accelerated U.S. investments as President Donald Trump has threatened import tariffs on pharmaceuticals, prompting companies to localize production. Lilly, Pfizer, and Merck have collectively committed tens of billions of dollars to new domestic facilities to avoid potential penalties and supply disruptions.
Lilly said last year it would invest more than $27 billion across four new U.S. manufacturing sites while expanding several existing locations.
“All these sites, including this one, will be really state of the art manufacturing to last many decades to come,” said Lilly CEO David Ricks at a Friday press conference in Allentown, Pennsylvania.
The company, currently the world’s most valuable drugmaker by market capitalization, has been locked in fierce competition with Denmark’s Novo Nordisk to supply GLP-1 weight-loss medicines. Shortages have persisted globally as prescriptions surge.
“We’re finding these medicines are quite popular, but we still have work to do to expand access, to improve affordability,” Ricks said on Friday.
Construction of the Lehigh Valley facility is expected to begin in 2026, with operations targeted for 2031. Lilly said the location was chosen from more than 300 competing applications, citing access to universities, skilled labor, and existing infrastructure.
Pennsylvania will contribute $100 million in state support, Governor Josh Shapiro said, pledging to expedite permitting.
The project underscores the growing economic influence of weight-loss medicines, which analysts expect to become a $100 billion-plus global market within a decade. Lilly plans to introduce a highly anticipated oral weight-loss pill in several countries at a $150-per-month cash price while it pursues U.S. regulatory approval.
The new facility is part of a broader effort by pharmaceutical companies to reduce dependence on overseas manufacturing hubs and protect against geopolitical risks. Industry analysts say domestic production offers greater control over quality, logistics, and pricing at a time of intense political scrutiny over drug costs.
Retatrutide, the primary product slated for the plant, has shown superior weight-reduction results in trials, intensifying expectations for blockbuster sales once approved. Lilly has not disclosed the facility’s exact capacity but said it will be designed for long-term scalability.
The announcement was welcomed by local officials eager to position Pennsylvania as a national biotechnology hub.
The investment “is the largest by a life sciences company in Pennsylvania history and will create at least 850 new jobs,” Governor Josh Shapiro said in a statement.
Shapiro added at the press conference that state officials are working to ensure permitting moves quickly for the new plant.
Originally reported by Leah Douglas in Reuters.
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