Eli Lilly Invests $400 Million to Upgrade U.S. Diabetes Manufacturing Facility and Create 100 New Jobs

Compiled by Fan Dongdong

To address criticism over rising insulin prices, Eli Lilly launched a generic version of Humalog priced at half the list price of the brand-name drug. Recently, the diabetes care giant announced a $400 million investment in its Indianapolis manufacturing facility to meet the growing treatment needs of patients with diabetes and to expand production capacity for its diabetes portfolio.

It is reported that this investment will introduce robots and other advanced production technologies to the manufacturing base, while creating 100 new jobs.

Myles O’Neill, President of Manufacturing at Eli Lilly, stated in a press release: “This investment will support the enhancement of manufacturing capabilities in Indianapolis, including capacity and technological upgrades for active pharmaceutical ingredients (APIs), syringe filling, device assembly, and packaging. These initiatives will support Eli Lilly’s investment in next-generation manufacturing, equipping us with high levels of automation, artificial intelligence, novel technologies, and advanced data analytics capabilities.”

In an email, a female spokesperson for Eli Lilly stated that, in addition to enhanced capabilities, the upgrade of the device and packaging assembly operations will also include a high-tech warehouse utilizing the latest technologies in warehousing, automated guided vehicles (AGVs), and robotics.

At this year’s U.S. Senate hearing, Eli Lilly, Sanofi, and Novo Nordisk faced questioning over rising insulin prices. The pricing of Eli Lilly’s Humalog was cited as a typical example of routine price hikes by diabetes pharmaceutical companies, with the increase deemed to have severely impaired patients’ access to treatment.

Eli Lilly, however, disagrees. The company attributes the price increase of this drug to intermediaries capturing the spread, arguing that it is the pharmacy benefit system that has driven up drug prices. Eli Lilly pointed out that although the list price of Humalog increased by 52% over the past five years, its net price actually decreased by 8%. Nevertheless, in an effort to quell the controversy, Eli Lilly ultimately made changes. In May, Eli Lilly launched a generic version of Humalog—Lispro injection pens—with a five-pack priced at $265.20, which is 50% cheaper than Humalog.

Like its peers, Eli Lilly is also facing price pressure from payers on diabetes medications, a situation that has directly impacted the revenue of major companies’ diabetes products and forced enterprises to continuously adapt and cut costs. Compared to the same period last year, Eli Lilly’s Humalog saw an 8% decline in revenue during the first nine months of this year.

As recently as last month on the 23rd, Eli Lilly announced that Enrique Conterno, Senior Vice President and Head of Global Diabetes Business, would resign by year-end. External analysts suggest that Conterno’s departure may be attributed to the years of turbulence and unstable growth in the diabetes business under his leadership. In particular, Eli Lilly’s diabetes product portfolio has faced increasing price pressures in recent years, while intense competition from new products has challenged sales volumes. Conterno’s successor has been confirmed as Mike Mason, currently Head of Insulin Manufacturing at Eli Lilly, who will officially assume the role on January 1, 2020.

Reference Source: Lilly Putting $400M Into U.S. Diabetes Production, Adding 100 Jobs