Nov 17 (Reuters) - Eli Lilly will build its first plant in Germany for 2.3 billion euros ($2.5 billion) in the western town of Alzey, the U.S. pharmaceuticals maker said on Friday, as the sector scrambles to meet demand for new diabetes and obesity therapies.
From 2027 the new site will produce diabetes drugs and injection pens to administer them, Lilly said in a statement.
It will "support an increased demand for Lilly's medicines, including its diabetes and obesity portfolio," it added.
A person familiar with the matter told Reuters on Friday that among the therapies to be produced will be the promising diabetes drug Mounjaro, which has been used off-label for weight loss and which last week was cleared for that additional use in the United States.
Eli Lilly and Danish rival Novo Nordisk are leading a race to seize an estimated $100 billion future global market for anti-obesity treatments. Novo has said that the industry is far from producing enough to meet demand.
Plans for Lilly's first major production complex in Germany come as drugmakers are growing increasingly sensitive to political pressure to manufacture critical healthcare products closer to the markets they serve after the coronavirus pandemic exposed the vulnerability of global supply chains.
"This investment encourages the government in its efforts to make Germany more attractive as a pharmaceutical centre," said Health Minister Karl Lauterbach.
"By doing that, we will secure fast access to new therapy options and reduce dependency on fragile supply chains," he added.
As well as winning U.S. approval for weight-loss, Mounjaro is also likely to be approved for that use in the European Union after the bloc's drugs regulator recommended market clearance.
However, in Germany, the state health insurance system is barred by law from paying for weight-loss drugs. Non-diabetic patients with a prescription for weight loss will likely have to pay for Mounjaro out of their own pockets.
Health Minister Lauterbach said at press conference on Friday that any review of those rules were currently not on the agenda.
Lilly said it had announced investments of more than $11 billion in global manufacturing in the past three years.
According to its third-quarter report, the company had earmarked more than $8 billion for ongoing expansion investments in Indiana, North Carolina, and Limerick, Ireland over the next several years.
Editing by Matthias Williams, Jason Neely and David Evans
Source: Reuters