Eli Lilly said it would divert employment outside its home state of Indiana following the Republican-controlled legislature’s decision to pass a nearly total ban on abortion.
“We are concerned that this law will hinder Lilly’s — and Indiana’s — ability to attract diverse scientific, engineering and business talent from around the world,” said Lilly.
The US drugmaker said it had expanded its employee health plan to cover interstate travel for abortion and reproductive services, but added this might not be enough for some current and future staff.
“Given this new law, we will be forced to plan for more employment growth outside our home state.”
The Indiana bill bans abortion from conception except in certain cases such as rape, incest and severe health risks to the mother. It was passed by the state legislature on Friday and signed into law by the governor.
It is the first legislation drawn up and passed into law since the US Supreme Court overturned the 1973 Roe vs Wade ruling in June, although several other states already had trigger laws in place that immediately implemented abortion restrictions.
Lilly employs more than 10,000 people in Indiana and more than 36,000 worldwide. The decision by one of Indiana’s largest employers to divert investment outside its home state underscores the challenges faced by US businesses as they manage healthcare needs of staff while trying not to provoke reprisals from conservative politicians for taking a stand on abortion.
Some analysts have warned the introduction of total abortion bans in Republican-controlled states could prompt employers to divert investment to states that maintain access to reproductive health services, leading to a brain drain from so-called red states.
Duolingo, a company offering technology-based language learning, said in June it would move its headquarters from Pittsburgh if Pennsylvania’s legislature banned abortion. But so far few companies have explicitly said publicly that an abortion ban would force them to divert investment from their home states.
The statement by Lilly follows the company’s announcement in May that it would invest $2.1bn in two manufacturing plants in Indiana, which are expected to create up to 500 new Lilly roles and an estimated 1,500 construction jobs.
Lilly told the Financial Times it intended to honour its “current commitments” to Indiana.
Indiana’s abortion ban has been criticised by some of the states’ other large employers, including the Indiana Hospital Association, which warned lawmakers were “creating an atmosphere that will be perceived as antagonistic to physicians”.
David Hoppe, the president of Gen Con, one of the largest gaming conventions in the US, said last week that if the abortion ban was enacted it would make it more difficult for the convention to remain committed to Indiana as its long-term annual home.
The passage of the Indiana abortion law follows the defeat on Tuesday of a referendum proposed by the Republican-controlled legislature in Kansas, which would have handed state politicians the power to ban the procedure. Abortion rights campaigners have said the result of the ballot demonstrated that conservative politicians were out of step with the national mood.