Eli Lilly CEO: U.S. drugmaker ready to support national security amid looming tariffs
Shreeaa Rathi | TIMESOFINDIA.COM | May 01, 2025, 21:58 IST
( Image credit : Agencies )
Eli Lilly is stepping up to tackle potential drug supply challenges in the U.S. According to CEO Ricks, the company is ready to lend a hand amidst rising concerns about pharmaceutical tariffs and national security threats regarding essential medications. Ricks advocates for incentives over penalties, proposing lower tax rates to encourage domestic production.
As pharmaceutical tariffs loom and national security concerns over essential medicines intensify, Eli Lilly CEO David Ricks says the company is prepared to step up. Speaking to CNBC on Thursday, Ricks expressed Eli Lilly’s willingness to aid the United States in responding to potential drug supply crises, particularly regarding low-cost, critical medications.
The Trump administration recently launched a Section 232 investigation into the national security implications of importing certain pharmaceuticals. Many industry insiders view this as a precursor to implementing tariffs aimed at reshoring drug manufacturing—a sector long reliant on overseas production, especially for older generics made primarily in India and China.
“Bringing that capacity back, so in case of emergency we have the stock and supply—that’s a valid thing,” Ricks stated. While affirming the legitimacy of national security concerns, he remained cautious about the proposed solution: “Do I think tariffs are the answer to that? I’m not so sure personally.”
Ricks emphasized that Eli Lilly is open to collaborating with the administration and national security officials to address the issue. “We have capacities to bring to bear, and we’re happy to help the country if we’re in need,” he said.
Older generic drugs—often essential for hospital treatments such as antibiotics and blood pressure medications—comprise about 90% of all prescriptions in the U.S. Yet despite their critical nature, these drugs are typically less profitable and have been outsourced over time due to lower costs abroad and unfavorable domestic policies.
“Those drugs are not easy to make, but they’re cheap, and they’ve been driven out of our country,” Ricks explained. However, industry experts have warned that tariffs on generics could backfire, potentially pushing manufacturers out of the U.S. market entirely and worsening existing drug shortages, particularly for sterile injectables used in hospitals.
Eli Lilly is already acting on the shifting landscape. In February, the company committed to investing at least $27 billion to build four new manufacturing sites in the United States—a move signaling both preparedness and confidence in domestic capabilities.
Ricks noted that the threat of tariffs alone has spurred action. “I think the threat of tariffs is already bringing back critical supply chains into important industries—chips and pharma,” he said. “So do we need to enact them? I’m not so sure.”
Still, Ricks argued that long-term incentives could be more effective than penalties. He advocated for permanent lower tax rates, specifically a 15% rate for domestic production, to entice pharmaceutical firms back to U.S. soil. “Lower taxes drove many drugmakers to low-tax islands like Ireland, Singapore, and Switzerland,” he said. “That can come back if there’s an economic incentive.”
His comments align with recent remarks from Pfizer CEO Albert Bourla, who suggested that uncertainty around tariffs is actually discouraging investment in U.S. manufacturing and R&D.
As the pharmaceutical industry navigates a volatile mix of policy shifts, economic pressure, and global supply chain realignments, Eli Lilly appears positioned not just to weather the storm—but to help steer the course.
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The Trump administration recently launched a Section 232 investigation into the national security implications of importing certain pharmaceuticals. Many industry insiders view this as a precursor to implementing tariffs aimed at reshoring drug manufacturing—a sector long reliant on overseas production, especially for older generics made primarily in India and China.
“Bringing that capacity back, so in case of emergency we have the stock and supply—that’s a valid thing,” Ricks stated. While affirming the legitimacy of national security concerns, he remained cautious about the proposed solution: “Do I think tariffs are the answer to that? I’m not so sure personally.”
Ricks emphasized that Eli Lilly is open to collaborating with the administration and national security officials to address the issue. “We have capacities to bring to bear, and we’re happy to help the country if we’re in need,” he said.
Older generic drugs—often essential for hospital treatments such as antibiotics and blood pressure medications—comprise about 90% of all prescriptions in the U.S. Yet despite their critical nature, these drugs are typically less profitable and have been outsourced over time due to lower costs abroad and unfavorable domestic policies.
“Those drugs are not easy to make, but they’re cheap, and they’ve been driven out of our country,” Ricks explained. However, industry experts have warned that tariffs on generics could backfire, potentially pushing manufacturers out of the U.S. market entirely and worsening existing drug shortages, particularly for sterile injectables used in hospitals.
Eli Lilly is already acting on the shifting landscape. In February, the company committed to investing at least $27 billion to build four new manufacturing sites in the United States—a move signaling both preparedness and confidence in domestic capabilities.
Ricks noted that the threat of tariffs alone has spurred action. “I think the threat of tariffs is already bringing back critical supply chains into important industries—chips and pharma,” he said. “So do we need to enact them? I’m not so sure.”
Still, Ricks argued that long-term incentives could be more effective than penalties. He advocated for permanent lower tax rates, specifically a 15% rate for domestic production, to entice pharmaceutical firms back to U.S. soil. “Lower taxes drove many drugmakers to low-tax islands like Ireland, Singapore, and Switzerland,” he said. “That can come back if there’s an economic incentive.”
His comments align with recent remarks from Pfizer CEO Albert Bourla, who suggested that uncertainty around tariffs is actually discouraging investment in U.S. manufacturing and R&D.
As the pharmaceutical industry navigates a volatile mix of policy shifts, economic pressure, and global supply chain realignments, Eli Lilly appears positioned not just to weather the storm—but to help steer the course.
Would you like this article tailored for a specific audience or platform, such as LinkedIn or a news website?