Eli Lilly plans to invest €2 billion in the construction of its first production facility in Germany

Eli Lilly intends to construct a production facility in western Germany, according to people familiar with the situation who spoke to Reuters. One of them estimated the investment at €2 billion.

After the pandemic revealed the weakness of global supply chains, pharmaceutical companies are becoming more and more sensitive to political pressure to produce essential healthcare products closer to the markets they serve. This is evident with the opening of Lilly's first significant production complex in Germany.

According to two of the sources, when factoring in the anticipated increase for local suppliers and subcontractors, more than 1,000 jobs would be generated.

Based on those familiar with the situation, the pharmaceutical company, which has witnessed a spike in demand for its diabetes medication Mounjaro, will fully fund the project, Reuters reported on Wednesday.

According to one of the sources, diabetes medications would be made at the new location. There were no more specifics on what the plant would yield available.

Last week, the Mounjaro injection received approval for an additional use of weight loss off-label in the United States. This new use will go by the name Zepbound. Trulicity is one of Lilly's other diabetes medications.

Eli Lilly's plans for a plant appear to be a success for the German government, which is eager to demonstrate that even with rising energy prices brought on by the loss of Russian gas as a result of Moscow's invasion of Ukraine, the largest economy in Europe is still a desirable location for manufacturing.

Having established its presence in Germany in 1960, the American company currently employs 1,000 people there.

In relation to its 2022 annual report, its primary production facilities outside of its home market in the United States are located in China, France, Ireland, Spain, and Italy.

Germany's health and economic ministers will be present at the news conference on Friday, according to Eli Lilly, which will also reveal "far-reaching investment plans".

(Sources: investing.com, reuters.com)