By Te-Ping Chen
Drug giant Eli Lilly says it plans to open a $3.5 billion plant in Pennsylvania's Lehigh Valley, giving the region an economic shot in the arm and helping solidify its ambitions as a manufacturing hub.
The facility, which will produce weight-loss drugs, will be built in Fogelsville, about 60 miles northwest of Philadelphia. The state is investing $100 million into the project, including in tax credits and grant money, to help prepare the site for construction. Lilly says the investment will create 850 permanent jobs over the next five years as the manufacturing facility ramps up, as well as 2,000 construction jobs.
The Lehigh Valley represents a rare Rust Belt success story. Once home to Bethlehem Steel, which filed for bankruptcy in 2001, the region has continued to expand its manufacturing base, helped by its proximity to ports in New York and New Jersey. It also has sizable employers in healthcare, finance and manufacturers that make everything from medical devices to art supplies. Crayola has called the area home since the early 1900s, when it first started producing crayons.
"Our industrial district took a huge hit, but it never died," said Becky Bradley, executive director of the Lehigh Valley Planning Commission. In recent years, she said, local manufacturing has also been boosted by the growth of the logistics and warehousing industry, which mushroomed after Hurricane Sandy devastated coastal regions in 2012, spurring companies to seek inland alternatives.
All told, Lehigh Valley manufacturing jobs have grown by 28.8% since 2010, triple the national rate, according to the Lehigh Valley Economic Development Corporation. Overall U.S. manufacturing jobs have contracted in recent months, even as the Trump administration has tried to shore up domestic production. U.S. manufacturers shed around 8,000 jobs in December, according to federal data, marking eight straight months of losses since Trump announced sweeping tariffs in April.
The Lilly deal is an important one for the region. It has long been passed over when competing for such projects, said Don Cunningham, who heads the local development group. In previous years, he says, the Lehigh Valley would find itself outbid by contenders in states that tacked on corporate incentives and were quicker to speed construction.
Cunningham credits Pennsylvania Gov. Josh Shapiro, who took office in 2023, for moving to more aggressively court business and speed permitting. According to the Pennsylvania Department of Community and Economic Development, since 2023, companies have committed to spending more than $39 billion on new investments in Pennsylvania, including $20 billion Amazon announced last year it was spending on building data centers.
In addition to the $100 million in incentives that Pennsylvania is offering Lilly, it has also pledged up to $5 million for a pharmaceutical manufacturing training center at a local school to create a pipeline of future workers.
A decade ago, some vocational programs were lacking students, he says. Now, though, as students take a hard look at their options, they are at capacity, and in some cases expanding.
"My father was a steelworker at Bethlehem Steel. When he came out of high school, it was just about having a strong work ethic and a strong back," he said. By contrast, he said, today's manufacturing environments are much cleaner, often requiring high levels of skill.
Lilly has ramped up its investments in domestic manufacturing, including a February 2025 commitment to spend $27 billion on new manufacturing facilities. In addition to Pennsylvania, previously announced locations include sites in Alabama, Texas and Virginia. Since 2020, Lilly has committed $50 billion to building such capacity, a total that includes today's announcement.
Other large drugmakers have also worked to expand their U.S. production capabilities, partly to try to mitigate against the risk of tariffs, as well as the kinds of cross-border disruptions companies experienced during the pandemic.
The plant is expected to begin construction this year and become operational in 2031.
It would make Lilly's next-generation weight-loss drug, if it is approved. The drug, called retatrutide, is in testing. It could ring up $11 billion in peak yearly sales, Citi analysts project.
Write to Te-Ping Chen at Te-ping.Chen@wsj.com
(END) Dow Jones Newswires
January 30, 2026 11:00 ET (16:00 GMT)
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