Enhanced tax incentives or an extension of the U.S. Tax Cuts and Jobs Act make “better tools” to spur U.S. growth than import tariffs do, Eli Lilly CEO Dave Ricks said.
As multiple large drugmakers look to navigate trade turbulence by pumping billions of dollars into their U.S. operations, a growing number of biopharma leaders are speaking out against the Trump administration’s tariff agenda.Take Eli Lilly helmsman Dave Ricks, for example. Despite the Indianapolis pharma making a $27 billion U.S. production pledge in late February, Ricks took his company’s first-quarter earnings call Thursday to argue against trade levies as the best policy for supporting local industry. “We support the U.S. government’s goals to increase domestic investment,” the CEO said on the call. “However, we don’t believe tariffs are the right mechanism.”Rather, “enhanced” tax incentives—or an extension of the Tax Cuts and Jobs Act—are “better tools” to spur U.S. growth, Ricks contended. The President Donald Trump-led Republican Party ushered in the Tax Cuts and Jobs Act in 2017, slashing the U.S. corporate tax rate from 35% to 21%, among many other measures. Now, as the threat of sector-specific tariffs on pharmaceuticals dominates the industry’s attention, multiple biopharma leaders have been advocating for tax reform—rather than trade duties—as a preferable route to bolster U.S. manufacturing and investments.Notably, Johnson & Johnson CEO Joaquin Duato and AbbVie Chief Financial Officer Scott Reents also used their company’s recent earnings calls to argue in favor of more competitive tax policies—and caution against the potential harm tariffs may inflict.A big part of Trump’s goal with his tariffs—both imposed and threatened—is to spur a return to U.S.-based manufacturing. On that front, Lilly, like many others in the pharma industry, appears willing to play ball.In late February, the drugmaker said it would invest $27 billion and start construction this year on four new U.S. manufacturing facilities. Once completed, the effort should equip Lilly to make all its medicines for the U.S. market in the U.S., Ricks said on Thursday’s call.In summarizing his thoughts, the CEO urged the second Trump administration to “negotiate deals with key trading partners as soon as possible, then level the playing field for American exporters like Lilly and remove harmful tariffs and non-tariff market access barriers in the developed economies.”The CEO’s comments came as Lilly posted a 45% year-over-year revenue increase to $12.73 billion in 2025’s first quarter. Unsurprisingly, much of that growth can be attributed to the Indianapolis drugmaker's star GIP/GLP-1 blockbusters Mounjaro and Zepbound, the company explained in an earnings release.Mounjaro, approved in Type 2 diabetes, raked in $3.8 billion for the period, growing a staggering 113% over the $1.8 billion it brought home during 2024’s first quarter. Mounjaro’s obesity counterpart Zepbound generated $2.3 billion in the quarter, compared with $517 million during the first three months of the previous year. The FDA approved Zepbound in November 2023.Lilly also noted that its breast cancer med Verzenio grew sales 10% to $1.2 billion in the first quarter, while the company’s SGLT2 inhibitor Jardiance benefited from a one-off $370 million gain after Lilly and Boehringer Ingelheim tweaked their commercialization pact for the drug.Still, even drugs like Mounjaro and Zepbound can stumble.Following talks with the FDA, Lilly has withdrawn its application for tirzepatide—the molecule underpinning both Mounjaro and Zepbound—in heart failure with preserved ejection fraction (HFpEF), the company’s chief scientist, Dan Skovronsky, M.D., Ph.D., said on Lilly’s call.While the company feels the phase 3 data from its Summit trial merit an approval in the indication, the FDA communicated that it would need an additional confirmatory clinical trial to move forward, Skovronsky explained.Last August, Lilly reported data from the Summit study that showed tirzepatide reduced the risk of adverse HF outcomes like hospitalization or cardiovascular death by 38% compared to placebo. The study tested Lilly’s dual GIP/GLP-1 receptor agonist against placebo in 731 patients with HFpEF and obesity.A peptide drug stumbling in the HFpEF indication isn’t unique to Lilly: Last Summer, Novo Nordisk pulled its heart failure application for Wegovy—Zepbound’s chief rival in obesity—and telegraphed plans to resubmit its filing in early 2025.Because Novo’s studies in the indication were “reasonably small,” the FDA wanted to see an increase in number of total cardio events to validate Wegovy’s effect, Novo development chief Martin Holst Lange, M.D., Ph.D., said at the time. Novo subsequently resubmitted its application in January with additional data, a company spokesperson confirmed. Looking forward at the rest of the year, Lilly is sticking by the 2025 revenue guidance it’s previously communicated. The company currently expects to generate sales between $58 billion and $61 billion for the full year. The company caveated that its financial expectations are based on the “existing trade environment as of May 1, 2025.” The forecast does not account for any policy shifts, including potential pharmaceutical-specific import tariffs, Lilly said.