Merck & Co (MSD) has broken ground on its new pharmaceutical manufacturing Centre of Excellence in Virginia, US, amid looming tariff threats from the Trump administration.
The $3bn site, which is located at the pharma’s Elkton facility, will test and manufacture a variety of undisclosed small molecule active pharmaceutical ingredients (APIs) and drug products.
MSD estimates that 8,000 jobs will be created during the construction of the facility, while 500 full-time roles will be filled at the site once operational.
The $3bn investment falls under MSD’s wider plan to expand its US R&D and manufacturing footprint, which has seen the pharma giant commit $70bn to projects across the country beginning this year.
Under the onshoring push, MSD will build a new $1bn biologics centre in Delaware and a $1bn vaccine production facility in North Carolina. The company will also pour more than $3.5bn into its headquarters in Rahway, New Jersey, which will bolster the site’s research and clinical manufacturing capacity.
Despite its hefty US pledge, MSD is currently looking to slash $3bn in operational costs by 2027 as part of a “multi-year restructuring programme”, which will see around 6,000 staff laid off across the globe.
Under this cost-cutting scheme, the company also axed its $1bn UK expansion plans, citing a lack of government investment in innovative medicines as a primary factor.
MSD’s restructuring scheme comes amid a backdrop of mounting pressure from President Trump, who recently threatened to impose 100% import tariffs on branded pharmaceuticals for companies who were not “breaking ground” on manufacturing facilities within the country. Though these tariffs were due to be implemented on 1 October 2025, they are yet to come to fruition as the Trump administration continues negotiations with the industry.
Virginia takes big pharma’s fancy
While MSD has had a presence in Virginia for nearly 85 years, it has not traditionally been thought of as a key pharma hub. However, tides may be turning for the Southeastern commonwealth, as there has been an uptick in both pharma and biotech interest in the area, experts told Pharmaceutical Technology.
Virginia governor Glenn Youngkin echoed this sentiment, noting that MSD’s $3bn commitment to the state marks a “giant leap forward for Virginia’s life sciences sector”, which he considers an “emerging national leader in biopharmaceutical advanced manufacturing”.
AstraZeneca seems to agree, as the UK-Swedish pharma has pledged $4.5bn to build a manufacturing facility the area, which is the “largest investment in the company’s history”, according to CEO Pascal Soriot. The Charlottesville site will produce APIs across its cardiovascular, metabolic disease, obesity and oncology portfolios.
Meanwhile, Eli Lilly has also jumped on the Virginia bandwagon, investing $5bn into the construction of an API and drug product facility dedicated to its bioconjugate and monoclonal antibody (mAb) portfolio in Goochland County.
