Made in America: Eli Lilly's $6.5B Texas Spend

Pharmaceutical giants are bringing manufacturing back to American soil in a massive strategic pivot. Eli Lilly's recent $6.5 billion investment in a Texas facility for its obesity medications signals a transformative shift that's rapidly spreading throughout the industry, with Pfizer, Amgen, and Novo Nordisk collectively announcing over $20 billion in domestic manufacturing projects.

This reshoring revolution isn't happening by chance. The Biden administration's Most Favored Nation pricing framework aims to align U.S. drug prices with those in other developed countries, fundamentally disrupting the traditional premium pricing model that has made America the profit center for global pharmaceutical sales. With the U.S. representing 41% of the global pharma market value but just 4% of world population, companies are scrambling to maintain profitability as pricing power diminishes.

Manufacturing domestically offers multiple strategic advantages beyond mere publicity. It provides greater control over production costs, accelerates speed to market, reduces regulatory delays, and addresses the supply chain vulnerabilities painfully exposed during the COVID-19 pandemic. The administration has sweetened the deal by promising expedited FDA and EPA approvals for new pharmaceutical facilities and potentially offering flexibility on MFN enforcement for companies making significant U.S. investments.

Digital health platforms are emerging as crucial components in this new landscape. Solutions that improve medication adherence, provide real-world data, and demonstrate measurable outcomes offer pharmaceutical companies powerful tools for negotiating with payers and justifying their pricing strategies. With improvements in adherence reaching up to 34%, these technologies directly support better patient outcomes while potentially reducing overall healthcare costs.

This manufacturing migration affects every department within pharmaceutical organizations. Brand teams must rethink product roadmaps to prioritize therapies with U.S.-aligned supply chains. Patient access groups need to integrate digital companions into their support programs. Procurement must accelerate domestic partner vetting, while IT departments ensure compliance with U.S. regulatory frameworks like HIPAA.

What's your organization doing to adapt to this new reality where domestic manufacturing and digital innovation are becoming critical to pharma success? Subscribe to Postscripts for more insights at the intersection of pharmaceutical strategy, technology, and patient impact.

Sources:

• CNBC: “Eli Lilly plans $6.5 billion Texas manufacturing plant for obesity pill” (2025-09-23)
• IQVIA Institute for Human Data Science: “The Global Use of Medicine in 2023 and Outlook to 2027”
• Medisafe internal outcomes data, 2023
• Health Affairs: "Implications of Most Favored Nation Drug Pricing Proposal" (2022)

PostScripts Rx is not intended to constitute medical advice, nor is it intended to influence prescribing decisions or any other medical or clinical decision-making. All medical and clinical judgment and decision-making, prescribing decisions, and all related considerations remain exclusively the responsibility of providers and patients.

Episode Transcript

Speaker 1 (00:01):
Welcome to Postscripts, the podcast
exploring what happens afterthat first prescription.
We cover the latest innovationsin patient access support,
digital tools, HCP engagementand the pharma marketing that we
all hope drive better outcomesfor patients.
This podcast is forinformational purposes only,
does not constitute any medicaladvice, nor should it be used
for to influence any clinicaldecision-making.

(00:21):
Patients should always consulttheir healthcare professionals.
Welcome to the podcast.
My name is Brian Carr.
I'm from the Medisafe team,although any opinions expressed
here are my own and notnecessarily those of Medisafe or
its partners.
Today we have a big one here.
Why are pharma investmentsbooming in the US right now?
We're focusing on a major trendwith enormous implications
right now for pharma marketers,brand execs, patient access

(00:42):
professionals and C-suitedecision makers.
There's a significant migrationof pharma investment back to
the US soil.
It's a trend driven in part bypolicy changes, access
challenges with supply chain and, of course, pricing pressures
that are coming from Washington.
But one of the starkestexamples happened just yesterday
when this shift came when EliLilly announced a $6.5 billion

(01:05):
investment in a new Texasfacility to manufacture its
booming obesity drug portfolio,including much-anticipated oral
version not injectable of itshit GLP-1 medication.
So, according to CNBC, this newmanufacturing plant will
eventually create over 1,500jobs, become one of the largest
capital projects in thecompany's history.
And the US administration thissummer had already signaled that

(01:29):
they will fast-track thedevelopment of new plants in the
United States through the FDAand EPA improvements process.
Because pharma companies hadsaid, hey, listen, we'd love to
build plants in the US but ittakes five to 10 years to get
them online.
The administration in itsexecutive order had said that it

(01:49):
would work to expedite thoseapprovals from the FDA and the
EPA, in fact move those projectsperhaps to the front of the
line for approval.
So you know why is thissuddenly happening.
Well, you've seen this mostfavored nation pricing paradigm
shift for pharma companies thatcame in this summer where the US
administration said that theywant to align US drug prices
with those paid in otheradvanced nations.
So under an MFN model, mostfavored nation Medicare
reimbursement, in particular forcertain drugs, would be capped

(02:12):
to the lowest price paid amongthese developed countries.
That may sound really fair toconsumers, but the challenge
there for pharmaceuticalcompanies is a global pricing
challenge.
Right, the US is traditionallythe premium priced market.
A global pricing challengeright, the US is traditionally
the premium priced market.
It forms the bulk of globalrevenues and margins for many
blockbuster therapies, so thoseprices begin to shrink.

(02:35):
It kind of forces thatfundamental re-evaluation of
global commercial strategy andprices outside of the US.
So, according to IQVIA forexample, the US accounts for
nearly 41% of the global pharmamarket by value, but only about
4% of the world's populationright.
So the average cost of astandard treatment course in the
US essentially loses itspremium pricing status unless
pharma manufacturers can changethe equation on the cost side,

(03:11):
right.
So that's where domesticmanufacturing becomes a business
imperative, not just anice-to-have but a must-have.
Right.
The strategic return to the USmanufacturing, and here's why
what you're seeing historicallyoffshore pharma manufacturing
made more sense here.
Right Outside of the US youcould have lower labor costs,
lighter regulatory engagement,proximity to global raw

(03:32):
materials right.
All to reduce the couple ofthings here, covid-19.
You may recall the COVID-19really did expose the supply
chain fragility, not only for,for example, auto parts and

(03:52):
computer parts and batteries andthings like that, but also
exposed it in the pharma rawmaterials verticals as well.
So exposed that risk ofdependence on international
suppliers, geopolitical tensionscausing regulatory bottlenecks
and disruption in trade flowsthose are only growing.
And now there's public pressureon pharma companies to really
bring jobs and investment backhome here to the US.

(04:13):
So now you're seeing companieslike Eli Lilly are quote
reshoring not only to smoothdistribution and regulatory
delays, but they're also doingit to control production costs
in a world where pricing powerreally has shifted dramatically.
So let's go back to Lilly's$6.5 billion Texas plan.
The CEO of Lilly, david Rick,said it's faster speed to market
, us cost control, proximity topatients and launching this new

(04:37):
GLP-1-related therapy as primarydrivers for the strategic shift
.
But an equally fundamentalmotivation lies in this MFN rule
alignment Company needs tooptimize the cost and then
maintain competitiveness underbetter care reimbursement rate
changes.
So this new equation of qualityaccess policy compliance it's

(04:58):
pivot.
It isn't just about movingfactories, it's about adjusting
business models to fit a neweconomic reality, a reality in
which access quality policycompliance they're becoming key
differentiators when you seecompressed margins.
So, for example, these pharmacompany decisions now involve
really balancing innovation withmanufacturing agility right.
So as development timelines canshrink and launch success

(05:19):
becomes more data-driven.
Proximity to supply becomes asource of speed and supply chain
safety.
You're also seeing cost parityacross those global markets.
Us prices are now beingtethered to these foreign
benchmarks, requiring thatend-to-end operational
efficiency across the board forpharma companies to maintain
profitability.
Domestic contract sourcing andsecurity, from ingredient

(05:42):
sourcing to packaging and pharmasourcing must really meet those
new cybersecurity and FDAtraceability standards.
So, again, this has profoundimpact for pharma teams, from
procurement to brand strategy,commercial operations, digital
marketers.
Everyone must now ask how do wealign our therapeutic strategy
with the evolving pricing,competition standards,

(06:02):
manufacturing and access?
Right, so you look at digitalcompanions like Medisafe and
others.
It's a hidden lever in themanufacturing pivot because
pharma companies are navigatingthis MFN-aligned economics and
they bring more production tothe US.
It really does force thatrenewed.
Look at all the drivers of costefficiency and therapeutic
values and market preservation,market share preservation, una

(06:24):
and I might call thatpersistence and compliance on
therapy Business folks may referto that as are we retaining our
market share of those patientsthat we've successfully enrolled
in the medication of theprogram.
Right, so that's where digitalmedication management tools
really do help patients stay ontrack with these complex drug
regimen and really provideactionable insights, survey data

(06:45):
, actual real-world data on apharma medication to be taken on
time or not.
Right?
So pharma has access now tosome of that real-world data and
it can reduce churn and enablebetter documentation for the
payer negotiations right,because digital companions can
improve adherence by we've seenit up to 34%.
So I mean we see that betteradherence leaving you improved

(07:05):
outcomes, ie patients on therapy, fewer visits to emergency
rooms, et cetera.
We know all that data.
That means less overall costimpact, getting some of the
payers and other partners in thesystems right, so it can
translate to stronger coveragepositions, especially if you're
looking at that value-based caremodel that is really influenced
by MFN rules.
So, as you see, these drugslike obesity, targeting GLP-1s,

(07:28):
the flooding marketdifferentiators aren't just
going to be on efficiency andsafety.
It will be the value supportecosystem and digital tools are
really core to that model toreally prove and get the
independent third-party data tothe partner and the commercial
teams that need it for their MFNpricing justifications
elsewhere.
So the strategic implicationsof the shift really do ripple

(07:49):
across the departments.
Here's where each team muststart thinking about in light of
both MFN pricing pressure andthe manufacturing shift.
Look at the brand and innovationteams.
They're going to be rethinkingproduct roadmaps, prioritizing
therapies with all theseUS-aligned supply chains.
They're going to be investingin launch excellence platforms
that integrate US-specificregulatory and access data.
Then you look at patient accessand support teams.

(08:10):
They're going to be aligningaccess programs with domestic
production timelines and theycan be considered digital
companions to enforce thoseengagement metrics.
Look at the procurement andmanufacturing teams at Pharma.
They're going to want toaccelerate domestic partner
vetting and vendor readinessscenarios, especially for tech,
integrated packaging andserialization compliance with
the FDA rules.

(08:30):
They're going to developflexible sourcing models that
accommodate value-basedcontracting opportunities under
the MFN rules.
Look at the IT and evencybersecurity teams at Pharma,
reinforcing data integritysystems with these domestic
partners here in the US, asinternational data lakes may
conflict with health and humanservices compliance frameworks.

(08:50):
They're going to want to ensureall the digital pharma tools
used, including patient-facingapps, are interoperable with US
systems under HIPAA and ONCguidelines, right.
And then, finally, look at theC-suite strategy teams.
Right, they need to createinvestment blueprints tied
directly to US pricing dynamics,doubling down on outcome-based
pricing models tied to localmanufacturing agility, patient
engagement benchmarks.

(09:11):
So are more companies going tofollow Lilly's footsteps?
Well, it's a resounding yes.
So far, you've got Pfizer,amgen, novo Nordisk.
They've all announced UScapital projects over $20
billion in the past few months,and that's no coincidence, the
pharma leaders are reallyrecognizing that building in
America isn't just PR, it's astrategic response where future
pricing and access conversationsare heading heading.

(09:32):
So when you have that MFNpricing and increasing digital
oversight, value must be proven,not promised, though, and to do
that Pharma really needs tointegrate manufacturing tech,
domestic patient support, intounified strategies that really
focus on access andaffordability.
So, in conclusion, pharma'sfuture, you know once again, is

(09:53):
made in America.
You even saw in the USadministration's executive order
that came out this summer thatone of the fourth bullet points
wasn't really reported that much, but it really showed how
important it is that MFN pricingmay be lifted a bit, or not
necessarily as impactful if thepharma companies are
manufacturing and going directto consumer in the US, right.
So that came from pharmadiscussion with the

(10:14):
administration prior to theexecutive order, where they said
we'd love to have lower pricesin the US, but if we could, when
we could do it overnight, if wejust go direct to consumer, cut
out a lot of the middlemen andwomen in the system and really
go direct to consumers.
You actually saw that carve outin the executive order back in
May as a fourth bullet point orso, that said, MFN status may or
may not apply to those goingdirect to consumer.

(10:35):
It was the administration'srecognition that if you're
investing you may get, let'sjust say, a break on your MFN
enforcement right.
So you know, I know these megaprojects really do symbolize a
broader realization across theindustry.
The path to futurecompetitiveness really does run
through operation agility, usdomestic investment and
patient-centric technologies.
Digital platforms are going toplay a critical role in this

(10:55):
next phase of value buildingbecause they offer measurable
proof of impact that really doesalign with the demands of CMS
payers and patients alike.
So, as you see, brand access,procurement, innovation leaders
they really know it's time toact.
They're aligning theirpipelines, people and
partnerships to this shiftingoperational landscape.
It's no longer optional, reallyis becoming a must-have, not a

(11:18):
nice-to-have.
So thank you for joining us onPostscripts.
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