Novo Nordisk A/S is set to invest $4.1 billion in a new U.S. factory, increasing its expenditure in its largest market amid rising criticism over the prices of its obesity and diabetes medications.
The facility in Clayton, North Carolina, will double Novo Nordisk’s U.S. production capacity, adding 1.4 million square feet for the final stages of manufacturing, where medicines are filled into injector pens and prepared for consumers. This expansion will create 1,000 jobs, the Danish pharmaceutical company announced on Monday.
Novo’s shares saw a slight increase in early trading on Tuesday and have surged nearly 85% over the past year.
This new U.S. site is part of a series of multibillion-dollar investments aimed at increasing the supply of the diabetes drug Ozempic and the weight-loss medication Wegovy, which have significantly boosted Novo’s profile, making it Europe’s largest company. The company now plans to invest approximately $6.8 billion in production this year, up from $3.9 billion in 2023.
In addition to building its own capacity, Novo is also acquiring capacity. Earlier this year, the company agreed to purchase three factories from contract manufacturer Catalent Inc. for $11 billion.
Competitor Eli Lilly & Co. is similarly investing billions to expand capacity, recently pledging $5.3 billion to enhance its Indiana facility, which produces the active ingredients for the obesity medication Zepbound and the diabetes drug Mounjaro.
Novo’s latest investment comes amid growing scrutiny over the prices of its medications in the U.S., the largest market for weight-loss drugs due to the high prevalence of obesity—nearly three-quarters of adults are overweight or obese—and higher drug prices compared to other countries. CEO Lars Fruergaard Jorgensen is scheduled to testify before a Senate committee led by Senator Bernie Sanders in September regarding the pricing of these drugs.
In North Carolina, the state employees’ health plan stopped covering weight-loss drugs earlier this year, anticipating a $1.5 billion loss by 2030 if coverage continued.
The new facility will produce future treatments for obesity and other diseases, as well as existing medicines in Novo’s portfolio, according to the company. Henrik Wulff, Novo’s product supply chief, stated that production in North Carolina is essential for the company’s growth.
Construction has already begun on the 56-acre Clayton site, Novo’s third in the city, located across from another Novo factory. The construction is expected to be completed in phases between 2027 and 2029.
Last year, Novo announced a $6 billion expansion of a drug ingredient factory in Kalundborg, Denmark, and a $2.5 billion expansion of its site in Chartres, France. On Monday, the company revealed it has decided not to proceed with a potential expansion project in Dublin.
