Global drugmaker Eli Lilly plans to build a $6.5 billion manufacturing facility in the Houston area, the latest part of its U.S. industrial development push after the Trump administration said it would place tariffs on pharmaceuticals and other goods.
The Indianapolis-based company selected Houston’s Generation Park after applying for various state incentives and looking at more than 300 potential sites throughout 40 U.S. states, executives said during a Tuesday press conference with Texas Gov. Greg Abbott. The 1 million-square-foot campus is expected to be up and running in the next five years.
Abbott said the project was being awarded $5.5 million from the Texas Enterprise Fund and has been approved for more funds through the state’s Jobs, Energy, Technology and Innovation Act.
The new Lilly manufacturing facility is expected to have artificial intelligence capabilities and be the largest of its kind in the United States, a Lilly executive said during the press conference. Lilly plans to employ 615 workers such as engineers, scientists and lab technicians with an average annual salary of more than $100,000 at the Houston campus.
The development of the campus is also expected to generate 4,000 construction jobs, company officials said.
The new manufacturing hub comes on the heels of Lilly’s unveiling plans to build a $5 billion plant in Virginia as part of a $50 billion plan to ramp up its U.S. medicine production. The company’s decision to invest in onshoring its drug production comes after President Donald Trump threatened to implement higher tariffs on some products the company makes.
On top of Lilly’s announced plans in Texas and Virginia, the drugmaker said it will unveil two additional U.S. sites by year’s end.
Embarking on such a major spending project contains risks. Some economists have pointed to slowing growth and the risk of recession, while others have said the shifting U.S. tariff policies could have negative effects on international trade.
But the new facility is expected to manufacture medicine that will reduce the company’s reliance on foreign suppliers and reduce lead times to get medicine to customers, said Lilly Chair and CEO David Ricks during the press conference.
Major port, medical center
“We reviewed over 300 proposals from 40 states around the country, and Texas came out on top as a modern manufacturing site with top-notch talent rooted in aerospace and medical industries and world-class infrastructure and power connectivity,” Ricks said. He said Houston houses the world’s largest medical center and has Port Houston to receive goods internationally, adding to the region’s appeal.
The next-generation facility in Houston is expected to be unlike Lilly’s others, executives said, with plans for the campus to use the latest in technology to build the foundation of various drugs or small molecule medicines. Specifically, Lilly plans to manufacture orforglipron — the company’s first oral medication for treatment of obesity and type 2 diabetes — at scale. This drug is expected to be submitted to global regulatory agencies for approval to treat obesity by year’s end, Ricks said.
Generation Park, a 4,300-acre business district about 20 miles northeast of downtown Houston, was selected on criteria such as workforce potential, local incentives, access to utilities and transportation, and a favorable business environment, the company said.
Lilly is expected to acquire at least 236 acres in Generation Park for its new campus, per a state application for incentives from the company. Houston-based McCord Development is the developer behind Generation Park, and a spokesperson said in an email to CoStar News that Lilly’s selection of the business district reflects years of collaboration by the development firm and regional partners in the public and private sectors to build a labor pipeline and support systems to attract a major company.
Lilly executives said the company plans to work with local universities and colleges to create a pipeline of employees skilled for jobs at the plant.
Lilly’s capital investment and job figures for the manufacturing facility exceed its initial commitments made when the company applied for state incentives. For every dollar Lilly spends in the greater Houston region, Ricks said the company estimates up to a $4 will go to local economic stimulation.
Abbott said Lilly is making “one of the largest pharmaceutical manufacturing investments in our nation’s history” and providing high-paying jobs to the state’s residents.
“This $6.5 billion facility will not only bolster Houston’s economy, it will boost our life sciences sector and help cement Texas as a global leader in healthcare innovation,” Abbott added.