As pharma manufacturing investment skyrockets, new state and federal government initiatives have poured into regional biotech hubs eager for a slice of the pie.
This year alone, Pennsylvania and New York launched new programs, while Kansas City and Central Virginia won federal funding aimed at strengthening their biotech industries.
The recent investments “are great signals, especially at a time when we're tracking hundreds of billions of dollars in major CapEx [capital expenditure] from global pharma industry leaders,” said Matt Gardner, sector president for life sciences at CBRE Enterprise, a global commercial real estate services and investment firm. “It's generational. I've never seen anything quite like this.”
The government incentives are aimed at attracting biotech companies to their shores. But so far, the investments have not been substantial enough on their own to sway major relocations.
“Companies are not making decisions on where to build a new factory just on that,” said Seth Martindale, a CBRE vice chairman and member of its site selection and incentives group. Instead, companies look for broader infrastructure factors like a strong workforce, labor market and education base.
Even so, the programs can plant the seeds for emerging hubs that could attract major manufacturing projects down the road.
Hubs of the future
Government incentives and investments often “complement an existing industry base,” Gardner said, such as Pennsylvania’s new $125 million Innovate in PA 2.0 program, which will provide capital to startups, create a statewide clinical trial network and enhance the Commonwealth's innovation network.
New York’s fiscal 2027 budget likewise includes $65 million for its Bolstering Biotech Initiative, which will support venture investment, workforce development, performance-based commercialization grants and a statewide clinical trial consortium.
But public investments can also lay the groundwork for future hubs. The Richmond-Petersburg region was selected in July for $16 million through the EDA’s Tech Hubs program, following a $1 million NSF Engines Development Award in 2024 and a $52.9 million Build Back Better Regional Challenge award in 2022.
“We're seeing a dramatic surge in large capital expenditure in Richmond, Virginia, so they clearly were preparing the ground there. They've got tremendous public-private partnership infrastructure. And now we're seeing the fruits of that with a number of major investments,” Gardner said. “All these things have developed these ecosystems for innovation.”
Eli Lilly is among the major investors. The large pharma announced plans last year to build a $5 billion manufacturing facility for its emerging bioconjugate platform and monoclonal antibody portfolio just west of Richmond.
AstraZeneca is also investing in Virginia with a new $4.5 billion manufacturing facility in Albemarle County, about 80 miles outside Richmond.
Kansas City could be pharma’s next target. Another up-and-coming hub that’s been building its life sciences infrastructure, the region just received a $38.1 million funding package for the Kansas City BioHub, including $33.5 million from the EDA’s Tech Hubs program.
Gardner said Kansas City has been working on a “formula that is designed to create some strengths in the ecosystem or harness some things that they’ve got as a base, and attract and create jobs around that.”
Pharma’s shifting frontiers
The growth of biotech hubs beyond Boston and the Bay Area signals a major shift in how pharma companies think about where to invest and build.
About 20 years ago, pharma companies would set up their manufacturing facilities about an hour outside of these major research hubs, Gardner said.
That pattern is changing.
“Some of the recent announcements are going to completely new locations,” Gardner said.
He cites places like Richmond, as well as Alabama, where the Birmingham Biotechnology Hub received a $44 million Commerce Department grant in January 2025. Less than a year later, Lilly announced plans to invest more than $6 billion in a manufacturing facility about 90 minutes away in Huntsville. Lilly said one of the reasons it chose the site is partly because of its proximity to the HudsonAlpha Institute for Biotechnology, which supports workforce training and research.
That investment shows that pharma companies don’t need to be an hour away from the Bay Area or Boston to “get smart people to their facilities anymore,” Martindale said.
The recent uptick in government investments also signals a public commitment to developing the infrastructure needed to bolster biotech’s ongoing growth in emerging hubs — something Martindale believes is “actually more important than the money.”
“If there's not the political will to support, for example, the job training programs, life science falls down,” he said.
