Eli Lilly CEO Dave Ricks is the latest head of a major drugmaker to urge President Trump to drop tariffs and embrace tax policy to bring pharmaceutical manufacturing back to the United States.
While Lilly supports the Trump administration’s goal of increasing investment in domestic manufacturing, Ricks told analysts during a Thursday earnings call that the company doesn’t believe tariffs are the “right mechanism” for achieving that objective.
“Enhanced tax incentives and/or the extension of the Tax Cut and Jobs Act are better tools to achieve their goals,” Ricks said.
Ricks isn’t the first head of a major drugmaker to point to the 2017 Tax Cuts & Jobs Act, legislation passed during Trump’s first administration, as a significant incentive for its investments in U.S. manufacturing.
J&J CEO Joaquin Duato told investors on the company’s earnings call last month that “the investment in manufacturing — both in medtech and in pharmaceuticals — has significantly increased” since Trump’s 2017 tax reform. Duato credited the passage of the 2017 Tax Cuts and Jobs Act for J&J’s “already elevated commitment to the U.S. economy,” which he said will expand the company’s capacity to “manufacture next-generation medicine and devices for patients in America and around the world.”
AbbVie CFO Scott Reents in an earnings call last week said that while his company continues to invest and grow its U.S. operational footprint, “a more competitive tax policy, building on what was accomplished through 2017 tax reform, will encourage a sustainable shift towards U.S. manufacturing over the long term.”
On Thursday, Amgen CFO Peter Griffith in an earnings call said that “to build on the manufacturing base in the U.S., we agree with our peers that the most effective answer is not tariffs but tax policy,” calling out the industry’s increased investment since the 2017 Tax Cuts and Jobs Act became law.
In February, Ricks similarly made the case that the 2017 legislation “has been foundational to Lilly’s domestic manufacturing investments, and it is essential that these policies are extended this year.”
Ricks in an interview with Fox Business last month said he hopes the trade policy that comes out of the Department of Commerce’s ongoing investigation of pharmaceutical and pharmaceutical ingredient imports will not “punish actors like Lilly who are already re-domesticating our supply chains.”
Looming threat of tariffs
While pharmaceuticals were exempted from Trump’s reciprocal tariffs announced last month, the reprieve is expected to be short-lived. Among the stated goals of the Department of Commerce probe is to assess whether tariffs are necessary to protect national security based in part on the level of U.S. reliance on finished generic and non-generic drug products, active pharmaceutical ingredients (APIs), and key starting materials.
Although Trump’s announced tariffs currently in effect do not materially change Lilly’s 2025 financial outlook, Ricks on Thursday said the “expansion of tariffs in other geographies or increases in retaliatory tariffs would have a negative effect on Lilly and for our industry.”
Lilly in February announced a $27 billion investment to build four new U.S. pharmaceutical manufacturing sites — three for APIs and one to manufacture injectable products and devices.
According to Ricks, Lilly has a “large U.S. manufacturing footprint with 10 active projects ongoing to build and expand new sites.” Once completed, he said the drugmaker will be able to supply medicines for the American market entirely from U.S. facilities, as well as increase the volume of medicines the company exports.
Since 2020, Ricks claims Lilly has announced over $50 billion of new U. S. manufacturing investments, including its most recent announcement to build four new facilities for $27 billion.
“We will continue to execute our U.S. manufacturing agenda,” Ricks said. “However, we urge the administration to negotiate deals with key trading partners as soon as possible to level the playing field for American exporters like Lilly and remove harmful tariffs and non-tariff market access barriers in the developed economies.”
