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Eli Lilly & Co. has announced plans to invest at least $27 billion to build four new manufacturing plants in the United States.

This move comes as the company aims to strengthen its domestic supply chain, particularly in light of President Donald Trump's push for onshoring production.

Three of the new facilities will produce active pharmaceutical ingredients (APIs), the core components of medications.

The fourth plant will be dedicated to expanding manufacturing capacity for Lilly's growing portfolio of injectable drugs.

According to Billboard, the company expects these plants to be operational within five years, creating over 3,000 permanent jobs for engineers, scientists, and lab technicians, as well as 10,000 construction jobs during development.

Lilly is currently in discussions with multiple US states to determine the final locations for these facilities. Work is expected to commence this year.

The announcement follows a recent White House meeting where Trump warned pharmaceutical executives to shift production to the US or face potential tariffs.

The administration has proposed a 25% tariff on drug imports, with an official decision expected by April 2.

Historically, pharmaceutical products have been exempt from tariffs due to their essential role in healthcare, but this policy could soon change.

Lilly's decision aligns with the broader industry trend of reshoring production to mitigate geopolitical risks.

Over the past five years, the company has already committed nearly $50 billion to US manufacturing, including $23 billion since 2020.

CEO David Ricks emphasized the significance of this investment, stating, "The company's growing rapidly, and we need to support that. Our goal is to be self-reliant."

Lilly Moves to Stabilize Drug Supply as Congress Targets Chinese Biotech Firms

Demand for Lilly's weight-loss and diabetes drugs, such as Zepbound and Mounjaro, has surged, leading to supply shortages.

Previously, a key ingredient for these medications was produced by WuXi AppTec Co., a Chinese company targeted in a congressional crackdown on foreign biotechnology firms. Expanding US production will help stabilize supply and reduce reliance on overseas manufacturers.

While branded drug manufacturers like Lilly are less affected by tariffs, the generic drug industry faces greater risks.

Generic medicines, which are heavily sourced from China and India, could see increased costs and potential shortages if tariffs are imposed.

The Association for Accessible Medicines has warned that such measures would put additional strain on the industry.

Lilly's expansion is contingent on the continuation of the Tax Cuts and Jobs Act, which lowered the US corporate tax rate from 35% to 21%, CNN said.

Ricks acknowledged that without these tax benefits, the company may need to reassess its strategy. "If those policies aren't extended, we'd have to re-look at the whole thing," he said.

The company's investment also underscores the shift towards domestic production, a priority that gained urgency during the COVID-19 pandemic when global supply chains were severely disrupted. "It's dangerous for our country to have offshored production for whole types of technology like small-molecule synthesis," Ricks noted.

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