PHILADELPHIA (KYW Newsradio) — U.S. drug maker Merck is building a $1 billion facility in Wilmington, Delaware, aimed at increasing domestic production of its cancer drug Keytruda and other products, as it faces the threat of pharmaceutical tariffs from the Trump administration and rising costs to import drug ingredients from China.
Merck Wilmington Biotech's 470,000-square-foot facility, located at the Chestnut Run Innovation and Science Park, will include a research lab, manufacturing plant, and warehouse. It's expected to be fully operational by 2028.
In a statement, Merck said it plans further expansions and is hoping to create a pipeline for its products domestically. This comes as the prospect of pharmaceutical tariffs looms over the industry, and supply chain experts said drug prices are likely to jump 12% as China provides a significant percentage of over-the-counter imports.
This move comes as the pharmaceutical industry faces potential tariffs on imported drugs and ingredients, with Merck estimating existing tariffs could cost the company $200 million.
Experts say consumers are already likely to see increases in over-the-counter medications as a result of taxes on China.
The new facility is projected to create more than 500 full-time jobs and approximately 4,00 construction jobs. Merck indicated that further expansion could increase employment to possibly 1,500 jobs.
Since 2017, and the creation of the Tax Cuts and Jobs Act, Merck said it has invested $12 billion in domestic manufacturing and research, with plans to invest an additional $9 billion over the next four years.
UK-based GSK, formerly GlaxoSmithKline, has also grown domestic production since 2017, investing $1.3 billion in U.S. manufacturing sites, including an $800 million expansion of its site in Marietta, Pennsylvania, near Hershey.
Amgen, Eli Lilly, BeiGene, and AstraZeneca have all announced plans for facilities in the U.S. or have construction underway.