A survey of the historic industrial sites of the Lehigh Valley along the Lehigh River evokes a bygone era when the region was one of the world’s largest steel manufacturing centers. Today, recent investments point to a new manufacturing renaissance, driven by a strategic pivot into life sciences.
The culmination of that shift came when Eli Lilly chose Lehigh Valley, an area in eastern Pennsylvania, for a new $3.5 billion facility to produce the drugmaker’s next wave of weight-loss treatments.
This investment is the largest of its kind from the life sciences sector in Pennsylvania history. With the U.S. weight loss market projected to be worth $148.7 billion by 2031 — the year the facility becomes operational — Lehigh Valley will play a key role in meeting demand for the drug.
During the announcement in January 2026, Pennsylvania Governor Josh Shapiro said: “We are poised for explosive innovation and growth in the life sciences industry – and that’s why Eli Lilly chose us for their $3.5 billion investment.”
For Don Cunningham, CEO of the Lehigh Valley Economic Development Corporation (LVEDC), work has been going on behind the scenes for some time. The process began in the summer of 2024, when the body – responsible for attracting new companies to the area – launched the Eli Lilly court for a different pharmacy facility.
“We dug into the data about where people work, what their skills are, where they live, and then started working with community colleges around a technical training pathway that aligns with Lilly,” says Cunningham. Pharmaceutical Technology.
“We’ve actually doubled down on the workforce side. We know we have significant pharmaceutical talent.”
Ultimately, the Lehigh Valley will fall short in its efforts for the primary plant. Despite placing the final two shortlisted candidates, Lilly awarded the contract to the mid-Atlantic state of Virginia. Plans were revealed in September 2025, with Lilly opting to build an active pharmaceutical ingredient (API) and drug product facility on the site. It marks the first announcement of four new mega-manufacturing facilities the drugmaker is building in the U.S. as part of a $27 billion investment drive.
“Lilly said the way we reacted to not winning the initial project was very helpful. We knew there were other facilities that weren’t advertised. And Lilly’s site selection people were already familiar with our site.” Cunningham says.
Lehigh Valley won for the second time, beating out more than 300 other applicants. In a statement, Lilly said it chose the site in Fogelsville for its proximity to STEM universities, a strong tech manufacturing economy, and established infrastructure. Additionally, the pharma giant cited the area’s convenient access to amenities and transportation, as well as its favorable zoning and business incentives.
In an unexpected benefit for the Lehigh Valley, the project was large in terms of investment and employment, indicating significant growth for the region’s life sciences sector. Lilly is looking to hire about 850 employees at the facility, with roles for engineers, scientists, operations personnel and laboratory technicians.
The Lilly employees will join a Lehigh Valley workforce that has grown significantly in recent years. Employment in the region’s life sciences sector has grown about 36% over the past decade, to a total of about 5,900 workers. Since 2020, life science companies in the region have added more than 2.5 million square feet of space.
For Lehigh Valley, the move to double up in the life sciences made geographic sense. The area is close to Pennsylvania’s largest city, Philadelphia, along with New Jersey and Maryland – both states famous for their drug centers.
“We were the hole in the middle of the donut where, although we had parts of the supply chain like packaging, we never had drug manufacturing,” Cunningham explains.
Lilly’s arrival marks a pharma presence that complements the region’s well-established broader healthcare landscape. These include B. Braun, Olympus, and Thermo Fisher Scientific, among others.
In a further boost to the neighboring pharma scene, Johnson & Johnson (J&J) also announced in February that it plans to build a $1bn cell therapy manufacturing facility in Montgomery County, Pennsylvania, which is about a 45-minute drive from the Lehigh Valley. For Pennsylvania’s former steel center, more may be on the way.
“Since Lilly’s announcement, we’ve had a lot of inquiries from the pharma supply chain sector. When a company chooses an area of Lilly’s size, it often follows a path of companies,” he says.
Cunningham points to two factors that helped Pennsylvania close the Lilly deal. The first was a byproduct of the CHIPS and SCIENCE Act, which was signed into law by former President Joe Biden in 2022 to support semiconductor manufacturing in the United States. Consequently, the Pennsylvania Economic Development for Growing Economies (PA EDGE) tax credit program was created that same year, designed to attract investment in key manufacturing sectors. Importantly, the scheme covers life sciences. For LVEDC’s Lilly project, it created an incentive package for the state.
Second, Cunningham highlights, is the region’s deep manufacturing heritage. For nearly 100 years, the Lehigh Valley was one of the largest producers of steel in the world, with steel titan Bethlehem Steel having its first mill there. The region was emblematic of the decline of America’s rust belt at the turn of the 20th century. Although closed in 2003, the company’s 1,600-acre plant still stands on the banks of the Lehigh River, serving as a recreational and cultural center.
To this day, manufacturing is an important feature of the region – the sector is responsible for 16% of the Lehigh Valley’s GDP, above the US average of 11%.
“Our job is to promote the history and culture of our manufacturing that exists here, with families who have been here for generations and send their children to vocational and technical schools,” says Cunningham.
“It’s like a band that’s been playing in bars for 25 years and suddenly hits the charts. It’s an overnight discovery that’s clearly been going on for a while.”
“How America’s Former Steel Heartland Secured a $3.5 Billion Eli Lilly Facility” was originally developed and published by Pharmaceutical Technologies, a brand owned by Global Data.
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