Eli Lilly Stock Is Sliding Tuesday: What's Going On?

Eli Lilly and Company LLY shares are trading lower Tuesday. The stock appears to be moving in reaction to an executive order from the Trump administration aimed at boosting domestic drug manufacturing.

What To Know: President Donald Trump signed a new executive order late Monday that aims to reshape the pharmaceutical supply chain by incentivizing drug manufacturers in the U.S., according to CNBC.

The order calls on federal agencies to speed up approval for U.S.-based manufacturing facilities, increase inspection fees on overseas drugmakers and streamline permitting through a coordinated, centralized process.

The executive order directs the FDA to increase fees for foreign manufacturing plants and proposes publicizing facilities that fail to meet compliance standards. A key provision calls for “surprise” inspections abroad, ending the practice of giving advance notice to international sites, which U.S. plants are already subject to.

The policy shift comes as pharmaceutical imports into the U.S. remain high with $203 billion in imports in 2023 alone. Nearly 75% of the imported pharmaceutical products in 2023 came from Europe, mainly Ireland, Germany and Switzerland.

Although Eli Lilly manufactures a lot of its products in the U.S., the company has significant operations and investments in both Ireland and Germany. Eli Lilly also imports a lot of its pharmaceutical ingredients, however, the company announced plans in February to invest $27 billion in U.S. manufacturing, with most plants focused on pharmaceutical ingredient manufacturing.

The new executive order aims to reduce this dependency by encouraging U.S.-based production, which government officials argue is essential for national security and supply chain resilience.

Drugmakers such as Eli Lilly could face cost pressures from the realignment. The Trump administration is also preparing to announce tariffs on imported pharmaceuticals, adding another layer of uncertainty for companies with global supply chains. Several pharmaceutical stocks appear to be moving lower in response to the announcement and the potential implications for operating costs and regulatory compliance.

LLY Price Action: Eli Lilly shares were down 6.06% at $771.69 at the time of publication Tuesday, according to Benzinga Pro.

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