Lilly cites Germany’s drug pricing reforms as it redirects capital to U.S. sites amid rising state insurance fund deficits.
Eli Lilly will cut its planned investment in Germany by 1.15 billion euros, reducing its commitment to 1.15 billion euros from an original 2.3 billion euros. The decision follows Germany’s April 2026 drug pricing reform, aimed at saving 16 billion euros and addressing a projected deficit in state insurance funds rising from 15.3 billion euros in 2027 to 40.4 billion euros by 2030.
The Alzey production facility, intended to manufacture GLP-1 drugs like Mounjaro and Zepbound, will now operate at reduced capacity with 500 jobs instead of 1,000. Lilly had already spent over 1 billion euros on the plant, which remains on track to open in 2027. Freed capital will be redirected to Pennsylvania or a new U.S. site.
Germany’s reforms require drugmakers to offer steeper discounts on subsidized prescriptions, impacting Lilly’s cost structure and investment calculus. The move underscores broader tensions between pharmaceutical companies and European healthcare cost-cutting measures.