Eli Lilly to Spend $6.5 Billion on Texas Factory for Obesity Drug and Other Medications

Houston — Eli Lilly, the pharmaceutical giant, has plans to establish a $6.5 billion factory in Houston, Texas, to increase production of its pipeline of small molecule drugs, including the firm's highly anticipated experimental obesity drug, orforglipron.

The Houston facility is the second of a chain of four domestic manufacturing locations the company has pledged to as part of its previously announced expansion of $27 billion earlier this year. Lilly stated that all four plants are on track to start producing drugs within five years, in addition to $23 billion in spending since 2020. The final two locations will be announced later this year.

The additional capacity is imperative for Lilly as it works to get orforglipron to market and stay ahead in the GLP-1 competitive category, where demand for diabetes and obesity meds has surpassed supply. Competitor Novo Nordisk has also grappled with lack of supply of its weekly injectables.

"Our new Houston facility will strengthen Lilly's capacity to produce orforglipron at scale and, if approved, enable the drug to reach its potential as a treatment for tens of millions of individuals globally," CEO David Ricks said. The pill is intended for obesity and type 2 diabetes patients and can be taken with or without food and water restrictions, which could make it more accessible than injectables.

Aside from orforglipron, the plant will also be dedicated to Lilly's small molecule portfolio across cardiometabolic health, oncology, immunology, and neuroscience. Unlike injectable biologics, small molecule medications tend to be easier and less expensive to make, typically providing wider accessibility for patients.

The investment follows U.S. policymakers, such as President Donald Trump, calling for re-shoring medicines manufacturing due to threats of tariffs on foreign drugs. The Houston facility is expected to create 615 full-time jobs in the area, including 4,000 construction jobs during the construction period.