As one of the fastest‑growing therapeutic categories globally, the oral GLP‑1 market is driving rivals Eli Lilly and Novo Nordisk to boost their respective manufacturing footprints to keep up with demand. This week, both drugmakers made announcements demonstrating that they see production as a competitive advantage in their race for market share. 

On Monday, Lilly broke ground on a $6.5 billion active pharmaceutical ingredient (API) manufacturing facility in Houston, Texas, which will produce Foundayo — the company’s first synthetic oral GLP-1 drug — along with other small molecule medicines. Because Foundayo is a small molecule rather than a peptide, Lilly contends it can be manufactured using “more well-established technologies and therefore can be more readily scalable.”

Also on Monday, Novo announced it is scaling oral GLP-1 capacity to be able to serve 10 times more patients with obesity. The Danish drugmaker touted its five U.S. manufacturing sites, with a production footprint of more than 400,000 square meters, intended to provide an end-to-end domestic supply chain for the company’s Wegovy pill.

Novo has spent more than $10 billion on U.S. capital expenditure (CAPEX) expansion over the last decade — including API, fill-finish, and tablet capabilities — with another $2 billion planned through 2028. However, that pales compared to the $27 billion Lilly has pledged to build four new manufacturing “mega sites” in the U.S., including the Houston API facility.

The Houston facility is Lilly’s fifth U.S. API manufacturing location announced since 2020, and one of 10 domestic production sites announced by the company during that period. Over the last six years, Lilly has committed more than $50 billion to expanding its U.S. network, which the drugmaker contends is the largest pharmaceutical manufacturing investment in American history.

Still, contract manufacturers could help supplement Novo’s internal scale-up if necessary, according to Kasper Bødker Mejlvang, executive vice president of global manufacturing and supply, who noted that 2025 was the peak year for the company’s CAPEX.

Novo is “exploring and developing further partnerships externally that will give us the flexibility to scale rapidly depending on how demand is evolving over the coming couple of years,” Mejlvang told investors at its Capital Markets Day on Monday, emphasizing that the company is now shifting its focus from CAPEX investments toward margins, enhancing productivity, and optimizing the network.

Mejlvang also claimed that by volume Novo is the “largest manufacturer” of GLP-1s in the industry with 51% of market share. But how long will that last in the heated pill race with Lilly?

While the oral GLP-1 market is currently supply-constrained, how quickly the two drugmakers can scale manufacturing will determine the leader going forward. Lilly CEO Dave Ricks told CNBC on Monday that one-third of new GLP-1 pill patients are taking Foundayo, as the company ramps up production. For now, it appears that Lilly — with its more robust CAPEX — is building a competitive moat against Novo.