Eli Lilly (LLY) announced Wednesday that it is ramping up US manufacturing, adding four new sites to help increase the production of key drug ingredients.

Three of the four sites will produce active pharmaceutical ingredients (APIs), which are key ingredients in drugs. 

Lilly didn't announce the locations of the sites but noted that it expects to create 3,000 jobs for highly skilled workers upon completion and nearly 10,000 construction jobs during the buildout.

This marks a total of about $50 billion in spending since 2020 on building out new capacity. 

"This bold move reflects our commitment to stay ahead of anticipated demand for safe, high-quality, FDA-approved medicines," Eli Lilly CEO Dave Ricks said in a statement Wednesday.

The company began building out capacity as demand for its blockbuster GLP-1 products — Mounjaro for diabetes and Zepbound for weight loss — began to outstrip supply. Ricks has said that between Lilly and competitor Novo Nordisk (NVO), there is more demand than either of the two companies can supply. 

REUTERS / Reuters

Both companies have previously made announcements for at least one new plant in the US, but today's announcement marks a significant investment in other areas for Lilly.

A majority of APIs are currently produced overseas and have become a topic of interest in recent years, as the pandemic disrupted supply chains and President Donald Trump engages in tariff wars. 

The US currently only produces about 4% of APIs. Meanwhile, India and China dominate the global market, with more than 60% of API manufacturing split between the two countries in some cases. Some data points to about 20% overall reliance on China for API imports. Still, the pharma sector is bracing for Trump's proposed tariffs on China and the impact they could have on the price of APIs.

Anjalee Khemlani is the senior health reporter at Yahoo Finance, covering all things pharma, insurance, care services, digital health, PBMs, and health policy and politics. That includes GLP-1s, of course. Follow Anjalee on social media platforms X, LinkedIn, and Bluesky @AnjKhem.

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