A&Z Pharmaceutical plans 4th expansion in Hauppauge since 2014

A Hauppauge-based manufacturer of vitamins, over-the-counter medicine and generic prescription drugs is expanding for the fourth time since 2014.

A&Z Pharmaceutical Inc. wants to convert 26,000 square feet of unused warehouse space at 350 Wireless Blvd. to production space as part of a $6.7 million plan to increase its portfolio of generic prescription drugs.

A&Z has won about five new contracts for drugs used in treating depression, anxiety disorder, arthritis pain, diabetes and other ailments — and expects to bid on 10 to 20 more contracts next year, said Erwin Li, the company’s vice president.

“We've already launched some products, but with the additional space we expect to be able to increase our manufacturing capability for prescription drugs quite a bit,” he said during Thursday's meeting of the Suffolk County Industrial Development Agency.

The new production operation would open by June 30, 2028, and add 35 jobs to A&Z’s local workforce of 162. The new jobs would pay, on average, $40,350 per year, according to an application for IDA tax breaks.

The IDA board voted unanimously on Thursday to grant preliminary approval for $1.4 million in tax incentives for the company, including $1.2 million off property taxes for 10 years, or a 27.5% savings.

The aid package is the fourth awarded by the IDA to A&Z for expansion projects totaling more than $50 million. State records show the company has exceeded its job commitment since first receiving help in 2014.

Multiple expansion projects are rare

Earlier rounds of property tax breaks expire this year and in 2026, according to Kelly Murphy, the IDA’s CEO and executive director.

Murphy said it is unusual for a Long Island manufacturer to expand four times in about a dozen years. “I don’t think I have anyone [among about 150 IDA clients] who has come back four times" with proposed expansion projects, she said in an interview.

Murphy added that drug and vitamin makers are the largest component of Long Island’s manufacturing sector. “It’s incredibly important to support these companies because of the jobs and all the suppliers they use here.”

A&Z is among a growing number of local manufacturers that are increasing their offerings of generic prescription drugs, said Tom Mariner, executive director of the trade group Long Island Bio.

“I’m seeing a lot of generic activity, and I think it’s due in part to ‘Made in the USA,’” he said in an interview on Thursday, referring to the Trump administration’s drive to boost U.S. manufacturing activity.

Li, the A&Z executive, said the expansion project is designed to grow domestic sales via a subsidiary, AiPing Pharmaceutical Inc., which is also based in Hauppauge.

Most Americans use generic prescription drugs

More than 270 million Americans filled at least one prescription last year, and the vast majority of those prescriptions were generics, according to the trade groups Association for Accessible Medicines and the Biosimilars Council.

A&Z takes its name from America and Zhongguo, the Chinese word for China. The company opened in 1995 as the U.S. subsidiary of a Chinese government-backed pharmaceutical giant led by Li’s grandfather.

More recently, Li’s mother, Emma Li Xu, has assumed sole ownership of A&Z along with serving as chief executive.

The company’s headquarters is also housed in the Wireless Boulevard building, while a second factory and warehouse is at 180 Oser Ave., also in Hauppauge.

A&Z is best known for supplying D-Cal, a vitamin D and calcium supplement made in Hauppauge, to the Chinese market. The company also exports other products to Asia and Europe, and is now focused on increasing domestic sales.

“I see the U.S. market as the area of growth for my business, and I am confident that we will sell our products nationally as successfully as we sell overseas,” Li Xu said in marking A&Z’s 30th anniversary in March.