As the U.S. federal administration considers a 100 per cent import tariff on branded and patented drugs, leading manufacturers are reacting with plans for major expansions in many locations, including Texas.
Eli Lilly and Company announced last September its intention to build a new $6.5 billion manufacturing facility at Generation Park in northeast Houston, Texas. This is the second of four new U.S. sites where Lilly will focus on manufacturing small molecule medicines.
The project, one of biggest life science investments ever made in Texas, will bring 615 new high-wage jobs to the Greater Houston area when it begins operation in about five years, including highly skilled engineers, scientists, operations personnel and lab technicians. The company also expects to generate 4,000 construction jobs as the site is being built and brought online.
Generation Park is a 4,300-acre master planned commercial district built by the McCord real estate company that includes campuses for San Jacinto College and Lone Star College. The Eli Lilly facility will occupy 236 acres at the park.
“Generation Park and Houston have emerged as premier destinations for innovation, advanced manufacturing and biomedical excellence, reflecting years of strategic work by McCord and regional partners across the public and private sectors to develop the talent, infrastructure, and business environment needed to attract world-class companies like Lilly,” the McCord company said.
Lilly says expanding the company’s U.S. manufacturing footprint in Texas will significantly boost the Houston economy. For every dollar Lilly spends in the area, it estimates as much as four dollars of local economic stimulation will result. Additionally, for every job created in manufacturing, several more will be created in related sectors such as supply chains, logistics and retail.
Eli Lilly chair and CEO Dave Ricks told a press conference the company chose Houston due to its top-notch talent, innovative ecosystem and infrastructure that includes available power and the ability to move goods through Port Houston.
Tax incentives at the state and local level may also have played a part in the decision to build in Texas.
Gov. Greg Abbott used the press conference to announce the state had given Eli Lilly a $5.5 million Texas Enterprise Fund grant and a $146 million Texas Jobs, Energy, Technology and Innovation award to help secure the investment.
Since then, more tax incentives have been announced.
In late November, the Sheldon Independent School District’s board unanimously approved the agreement between Lilly, the school district and the governor’s office. This will limit the taxable value of the property to 50 per cent of its appraised or market value for 10 years of maintenance and operations taxes starting in 2031, a reduction that has been described as “very significant.”
Generation Park managed to attract another publicly traded biotechnology company earlier in 2025, even without any state tax abatements. United Therapeutics is currently constructing a 77,000-square-foot facility to house genetically modified pigs to be used as organ donors for humans in need of transplants.
Texas is quickly emerging as a hub of pharmaceutical manufacturing alongside North Carolina, Ohio and Pennsylvania, as major producers like Pfizer, Johnson & Johnson, Merck & Co., Novartis, AstraZeneca and Roche also announce expansions to re-shore the industry.
In November, Novartis announced plans to build a new RLT facility in Denton, north of Dallas-Fort Worth, as part of the company’s $23 billion plan to increase its U.S. manufacturing footprint. RLTs (Radioligand Therapies) are a precision cancer treatment combining a targeting compound (ligand) with a radioactive isotope to directly destroy cancer cells while sparing healthy tissue.
In October, AstraZeneca unveiled plans for a newly expanded $445 million manufacturing facility in Coppell, north west of Dallas, designed to double the production of its Lokelma (sodium zirconium cyclosilicate) medication. The expansion includes a new 9,000-square-foot building.
In addition to the state’s business friendly environment, the Texas Medical Center’s new 500-acre BioPort campus in Houston, unveiled in 2022, is another attraction for the pharmaceutical industry.
The BioPort is described as a strategic initiative designed to accelerate the development and manufacturing of advanced biological products to reduce foreign dependency. It is thought that BioPark could ultimately create 100,000 jobs.
“Texas is the economic engine of America because we foster innovation and empower businesses to succeed,” said Abbott at the Eli Lilly press conference. “This $6.5 billion facility will not only bolster Houston’s economy, it will boost our life sciences sector and help cement Texas as a global leader in health care innovation.”
