Lilly's manufacturing splurge continues with $200M expansion in China

Five months after Eli Lilly secured the first of two approvals for tirzepatide in China—one for Type 2 diabetes and the other for obesity—the company has revealed that it will expand its manufacturing site in Suzhou to produce the in-demand drugs along with other pipeline medicines.

Lilly has earmarked $200 million for the upgrade, a company spokesperson confirmed to Fierce Pharma. The new project will bring Lilly’s total investment in Suzhou to nearly 15 billion yuan ($2.1 billion), according to a Chinese release. The 28-year-old site, which is the Indianapolis pharma’s lone manufacturing facility in China, employs 500.

With the expansion, Lilly plans to add 120 new positions at the site, which will supply for both China and Europe, according to Lilly China. 

The move reaffirms Lilly’s commitment to China during a period of geopolitical tension between the country and the United States. In March of this year, in a meeting with China’s Commerce Minister Wang Wentao, Lilly CEO David Ricks “expressed willingness to increase investment in China and reinforce R&D cooperation,” the agency announced.

Last month, the U.S. House of Representatives voted resoundingly in favor of the BIOSECURE Act, which seeks to halt federal contracts with five life science companies with ties to China—WuXi AppTec, WuXi Biologics, BGI Group, MGI and Complete Genomics—over alleged national security concerns. The U.S. Senate will need to vote on its passage.

The expansion also comes as Lilly is undertaking massive investments in manufacturing to meet the skyrocketing demand for its blood sugar-modulating products Mounjaro, for diabetes, and Zepbound, for obesity.

Last week, Lilly said that it plans to build a $4.5 billion “Medicine Foundry,” a combined R&D and manufacturing facility on its sprawling campus under construction in Lebanon, Indiana. Lilly already is building a $9 billion plant at the site which will produce active pharmaceutical ingredients for Mounjaro and Zepbound.

Since 2020, the company has invested $23 billion overall in building facilities in the U.S., including a $1.7 billion factory in the Research Triangle Park area of North Carolina, which the company expects to become operational in 2027.

Last month, Lilly also revealed that it was investing $1.8 billion to expand production capacity at two plants in Ireland. Additionally, Lilly has a $2.5 billion factory under construction in Alzey, Germany, which is expected to begin production in 2027.

In 2019, Lilly sold one of its manufacturing facilities within its Suzhou complex to Chinese company Eddingpharm as part of a $375 million deal in which the U.S. company offloaded older antibiotics Ceclor and Vancocin.

In 2022, Lilly’s business in China was hit hard after authorities in the country put insulins on a national price-cut program known as volume-based procurement. Lilly saw its China sales bounce back to grow 6% in 2023 to $1.54 billion. Nevertheless, the growth rate was far slower than the entire firm’s 20%.