Breaking: Lilly Partners With US Firms to Make Mounjaro, Boost Supply
Eli Lilly, now the world's most valuable healthcare company by market capitalization, has seen its shares soar 62.5% this year due to high demand for their diabetes drug Mounjaro. The company plans to invest $5.3 billion to expand production capacity for its widespread obesity and diabetes drugs - the most significant investment of its kind in U.S. history.
The obesity market could reach $100 billion in value over the next decade. This makes Mounjaro's manufacturing Companies in the USA crucial, as Lilly has already invested more than $18 billion in the last four and a half years to build, refit, and acquire drug factories throughout the U.S. and Europe. Lilly expects U.S. approval for Mounjaro as a weight loss treatment by the end of the year. This expansion of manufacturing capabilities and partnerships provides us with valuable insights into the faster-growing pharmaceutical development of tirzepatide, the active ingredient in Mounjaro.
Lilly Subcontract US Companies to produce tirzepatide
Eli Lilly has formed a mutually beneficial alliance with a US-based and a Switzerland-based contract drug manufacturer to manufacture the active ingredient in its blockbuster diabetes medication, Mounjaro. This partnership helps Lilly increase its production capacity as demand for the product continues to rise.
Who makes Mounjaro, and what is tirzepatide?
Eli Lilly and Company; the manufacturer of Mounjaro, which uses tirzepatide as its active pharmaceutical ingredient (API). The drug works as both a gastric inhibitory polypeptide analog and a GLP-1 receptor agonist. The United States approved tirzepatide for the treatment of diabetes in May 2022. The FDA later authorized it for weight management under the brand name Zepbound in November 2023. The FDA expanded its use to treat moderate to severe obstructive sleep apnea in December 2024.
Why Lilly turned to contract manufacturing
Lilly has always outsourced parts of its synthesis to external companies, even though they developed tirzepatide. The company needs to scale up production more quickly due to the unprecedented demand for GLP-1 medications. Lilly has invested approximately $16 billion since 2020 in new manufacturing sites across the United States and Europe. These facilities will take time to become operational. The Lebanon, Indiana site is expected to start production in late 2026. Contract manufacturing organizations (CDMOs) provide vital interim capacity while Lilly builds its internal facilities.
Demand for Mounjaro drives urgent supply expansion
Eli Lilly faces supply challenges due to the massive demand for Mounjaro. The company had to expand production faster. The FDA removed tirzepatide (the active ingredient in Mounjaro and Zepbound) from its shortage list in October 2024, after being listed since December 2022.
Doctors prescribe Mounjaro off-label for weight loss.
Mounjaro's original approval was limited to the treatment of type 2 diabetes. Many healthcare providers started prescribing it off-label for weight loss. This practice gained popularity after studies showed that people lost more weight with Mounjaro than with copyright. Studies also showed that non-diabetic patients who took tirzepatide in combination with diet and exercise lost at least 10% of their body weight over approximately 18 months. The weight came back after patients stopped taking Mounjaro at 36 weeks. This indicates that patients require ongoing medication to sustain the results.
FDA shortages highlight production gaps
Mounjaro's popularity created supply problems quickly. The FDA added tirzepatide to its drug shortage list by December 2022, just months after its approval. During this period, patients turned to compounding pharmacies that had permission to create similar versions of the medication. About 2 million Americans used compounded GLP-1 drugs while supplies were low. The FDA's announcement in October 2024 ended the tirzepatide shortage. This required compounding pharmacies to stop production, which worried patients who relied on these cheaper options.
How GLP-1 drugs are reshaping obesity treatment
GLP-1 medications bring a breakthrough in treating obesity-related conditions. These drugs control blood glucose and reduce body weight, unlike other diabetes treatments that cause weight gain. They work through several ways - they block glucagon, stimulate insulin release, and slow down digestion. Doctors and researchers believe GLP-1 drugs work well for both weight management and type 2 diabetes treatment, despite overuse concerns. Their success points to a potential $100 billion market.
Lilly and rivals race to dominate the obesity drug market
The obesity drug market has become a fierce battleground as Eli Lilly gains ground on its biggest rival, Novo Nordisk. These pharmaceutical giants stand alone as the only companies with GLP-1 medications approved for weight loss, which has made them household names.
Novo Nordisk's parallel investments in Wegovy
Novo Nordisk's market value has dropped by about half since July 2024, in part due to investor concerns about its lost first-mover advantage to Eli Lilly. The company strengthened its position by acquiring pharma manufacturing company Catalent for $16.5 billion in 2024. It then sold three Catalent manufacturing plants to Novo Nordisk for $11 billion to increase production of Wegovy. Novo's blockbuster drug Wegovy has reshaped the obesity treatment scene, generating $5.7 billion in US sales in 2024 alone.
Who makes tirzepatide and where is it manufactured?
Eli Lilly produces tirzepatide, the active ingredient in both Mounjaro and Zepzelca (formerly known as Zepbound). The company recently announced a $5.3 billion investment in its Lebanon, Indiana, facility, as well as a Texas subcontractor, bringing the total investment there to $9 billion. This expansion marks "the single largest investment in synthetic medicine API manufacturing in US history". Lilly has pledged more than $18 billion to build, upgrade, and acquire facilities across the US and Europe. The Lebanon site is expected to start producing medicines in late 2026, with operations expanding through 2028.
Conclusion
The Future of Mounjaro Production and the GLP-1 Market
Eli Lilly's partnership with USA submanufacturers marks a vital turning point for Mounjaro production. Their collaborative effort tackles current supply challenges while Lilly builds its own manufacturing capabilities. The $1 billion contract and facility expansions will significantly increase tirzepatide output, helping to address the shortages that have affected patients since December 2022.
Lilly has made unprecedented investments, especially with its $9 billion Lebanon facility - "the single largest investment in synthetic medicine API manufacturing in US history." This steadfast dedication shows Lilly's confidence in the long-term need for GLP-1 medications. Novo Nordisk has made its own strategic moves with the Catalent acquisition, but Lilly seems to be gaining ground faster.
These Wegovy manufacturer manufacturing partnerships have created ripples beyond their immediate impact. GLP-1 medications have reshaped how doctors treat obesity by offering effective options in a field that had limited choices before. Patients who don't deal very well with standard pharmaceutical treatments now have access to medications that show remarkable results for diabetes management and weight loss.