The US pharmaceutical company Eli Lilly wants to build a new factory in Rhineland-Palatinate with an investment of around 2.3 billion euros. The production facility is intended to help meet the high demand for new drugs against diabetes and severe obesity.

The site in Alzey, 30 kilometers south of Mainz, should be built from 2024 and go into operation in 2027, Eli Lilly production boss Edgardo Hernandez announced on Friday. The group also wants to benefit from the booming business with weight loss injections, which has created a hype in the USA.

Up to 1,000 people will be employed at the new plant, Hernandez said. An additional 1,900 jobs would be created during the construction phase. Federal Economics Minister Robert Habeck emphasized that, in contrast to planned chip factories in East Germany, the settlement would require no tax money. Lilly’s investment is one of the largest microeconomic decisions in Germany in this area. “It’s a big exclamation point that’s being put here.”

Federal Health Minister Karl Lauterbach sees the decision as a good sign for the pharmaceutical location: “This investment encourages the federal government in its efforts to make Germany more attractive as a pharmaceutical location again.”

Active in Germany since 1960

Eli Lilly, based in Indianapolis, is the most valuable drug manufacturer in the world by market value. The company has been active in Germany since 1960 and last year achieved sales of 905 million euros with around 1,000 employees.

With the planned plant, Lilly wants to expand its network of locations for injectable medications and the associated injection pens. Among other things, the diabetes drug Mounjaro is to be manufactured in Alzey and will also be used in Europe to combat severe overweight (obesity).

In the USA, Lilly has already approved the product as a weight loss injection, which is sold under the name Zepbound and competes with a similar product from the Danish company Novo Nordisk. Approval is still missing in Europe and should come at the beginning of next year. The group’s portfolio for anti-obesity drugs should be expanded, said Hernandez. With Alzey, there will then be six Lilly production facilities in Europe.

Gold rush atmosphere

There is currently a gold rush atmosphere in the slimming injection business. Like Novo Nordisk, Lilly wants to benefit from a trend particularly in the USA: healthy and even not overweight people often buy the products to shed the pounds. The preparations were developed as diabetes medications, but have proven to be effective appetite suppressants. They mimic the effects of intestinal hormones and increase the feeling of satiety. Rival Novo Nordisk, which has been offering its weight loss injection for a long time, has already encountered delivery difficulties.

Experts see a gigantic market – because obesity is a global phenomenon. In May, Lilly CEO Dave Ricks pointed to 650 million people worldwide who are already morbidly obese. According to official estimates, this number could grow to around one billion by 2030.

Dependence on China and India

Lilly’s billion-dollar investment is also good news for the pharmaceutical location. In view of the medicine shortages, tense supply chains and the dependence on China and India for medicines, the federal government is trying to strengthen production in Germany.

Germany is falling behind in international competition in clinical studies, while the industry is suffering from increased energy costs and cost pressure from politics, warned the Association of Research-Based Drug Manufacturers. VFA President Han Steutel welcomed Lilly’s settlement on Friday as an “important signal for Germany as a pharmaceutical location.” This could lead to further investments. But reliable framework conditions are needed.

With the settlement, the importance of Rhineland-Palatinate for the biotech and pharmaceutical industries also grows. The corona vaccine manufacturer Biontech is based in Mainz, and the pharmaceutical company Boehringer is in Ingelheim. Hernandez said one criterion for the settlement is a good pharmaceutical infrastructure in the region. There is therefore hope of finding enough skilled workers.