Pharmaceutical giant Eli Lilly announced Tuesday its plans to invest $6.5 billion in constructing a new production facility in Houston, Texas, aimed at expanding its small molecule drug manufacturing capacity, with a primary focus on producing orforglipron, the company's experimental oral weight-loss medication that has garnered significant market attention.
This marks Eli Lilly's second major investment announcement this year. In February, the company unveiled plans to spend at least $27 billion on building four new manufacturing facilities in the United States. Since 2020, Eli Lilly has committed a total of $23 billion to domestic production investments in the US.
The company stated that the locations for the remaining two facilities will be announced later this year, with all four plants expected to become operational within the next five years.
As demand for weight-loss medications surges in the United States, Eli Lilly and competitor Novo Nordisk have faced supply constraints for their GLP-1 weekly injection drugs. The oral formulation orforglipron is viewed as a crucial product for maintaining the company's market leadership position.
"The new Houston facility will significantly enhance our ability to scale orforglipron production and help meet the treatment needs of tens of millions of patients worldwide suffering from obesity and type 2 diabetes once the drug receives approval," said Eli Lilly CEO David Ricks. "Compared to injectable formulations, oral medications offer greater convenience as they don't require eating or drinking restrictions."
Industry experts note that the GLP-1 drug market is experiencing rapid growth, and oral formulations can not only address capacity shortages but also expand the potential patient population.
This move also represents a proactive response to recent tariff policy threats from President Trump, who has indicated potential tariffs on drugs imported to the United States to encourage pharmaceutical companies to relocate production back to American soil. Over the past decade, domestic pharmaceutical manufacturing in the US has experienced significant contraction.
Analysts believe that Eli Lilly's expansion of US production capacity serves not only to meet market demand but also to mitigate supply chain risks arising from policy uncertainties.
According to the company announcement, the Houston facility will primarily manufacture orforglipron alongside other small molecule drugs targeting cardiometabolic health, oncology, immunology, and neuroscience therapeutic areas. Small molecule drugs typically come in oral tablet form, offering greater convenience for patients while being easier to mass-produce with relatively lower manufacturing costs.
Eli Lilly stated that the project will create 615 full-time positions in the greater Houston area, including engineers, scientists, operations personnel, and laboratory technicians, while generating 4,000 construction-related jobs during the building phase.