Inside the GLP-1 Gold Rush: Eli Lilly CEO on New Breakthroughs, Addiction & Mental Health, Pricing
In this episode of All-In, Eli Lilly CEO Dave Ricks discusses his company's development of GLP-1 drugs, which began with an unexpected discovery during diabetes treatment research and led to the creation of Monjaro. The discussion covers the rapid commercial growth of these medications, which now reach approximately 20 million people globally, and examines their potential benefits beyond weight loss, including possible improvements in mental health and reduced dementia risk.
The conversation also delves into the business aspects of GLP-1 drugs, including Eli Lilly's efforts to balance profitability with accessibility through insurance coverage and pricing strategies. Ricks addresses the challenges of protecting intellectual property rights, particularly regarding counterfeit products in international markets, while sharing insights into the company's research infrastructure and manufacturing expansion plans.
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GLP-1 and Eli Lilly's Monjaro
Eli Lilly's 18-year journey in GLP-1 drug development began in 2006 with a diabetes injection that unexpectedly caused weight loss. Through continued innovation, the company developed Terzepatide (branded as Monjaro), a combination drug featuring both GLP-1 and GIP functionalities. This development proved highly successful, with Monjaro generating $8.1 billion in revenue in Q2 2022, representing an 80% annual growth.
The Commercial Success and Impact of GLP-1 Drugs
According to Eli Lilly CEO Dave Ricks, approximately 20 million people globally now use prescription GLP-1 drugs. Beyond treating metabolic issues, these drugs show promise in improving mental health and potentially reducing dementia risk, as indicated by Novo Nordisk's research. Ricks also mentions ongoing studies exploring new GLP-1 drugs designed specifically for brain activity, targeting conditions like bipolar disorder and major depression.
Pricing, Profitability, and Accessibility
While Monjaro was initially priced at $1,000, Eli Lilly has worked to reduce patient costs to as low as $4.99 per month, with a target range of $100-300. Ricks emphasizes the company's focus on balancing profitability with accessibility, particularly through efforts to secure insurance coverage for these medications, similar to coverage for anti-hypertensive drugs.
The Broader State of Pharmaceutical R&D
Eli Lilly maintains a robust research infrastructure with over 4,200 PhD scientists, rivaling the combined intellectual capacity of MIT and Harvard. The company is actively expanding its manufacturing capabilities while seeking strategic biotech acquisitions, especially during the current downturn in biotech funding. Ricks describes efforts to encourage scientists to pursue riskier, high-impact research beyond their core drug franchises.
Challenge of Counterfeit and Gray Market GLP-1 Drugs
Chamath Palihapitiya highlights a significant gray market challenge in China, where manufacturers are creating GLP-1 derivatives that circumvent patents using AI algorithms. Ricks acknowledges this issue, particularly in markets with poor insurance coverage, leading Eli Lilly to strengthen its U.S. supply chains and manufacturing processes while racing to secure intellectual property rights under the "first to file" patent system.
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Actionables
- You can explore the potential mental health benefits of GLP-1 drugs by discussing them with your healthcare provider if you have concerns about mental health or dementia. Given the research into GLP-1 drugs for brain-related conditions, if you or someone you know is dealing with such issues, a conversation with a doctor could lead to considering these medications as part of a treatment plan, provided they are deemed appropriate.
- Stay informed about medication affordability by checking pharmaceutical assistance programs for updates on drug pricing. With Monjaro's price reduction, it's beneficial to regularly check if similar programs are available for other medications you may need, ensuring you're getting the best possible deal on your prescriptions.
- Protect yourself from counterfeit medications by purchasing only from licensed pharmacies and verifying the authenticity of drugs. Considering the issue of counterfeit GLP-1 drugs, it's crucial to be vigilant about where you buy your medications. Always use reputable sources and look for verification seals or ask for proof of authenticity to ensure you're getting the genuine product.
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Glp-1 and Eli Lilly's Monjaro
Eli Lilly's 18-year Glp-1 Drug Development Leads To Monjaro's Top Sales In Q2 2022
Eli Lilly's long-standing research and development in Glp-1 drugs have culminated in significant sales success, particularly with the launch of Monjaro.
Lilly's 2006 Glp-1 Diabetes Injection Also Caused Weight Loss
In 2006, Eli Lilly launched its first Glp-1 drug, a twice-a-day injection specifically designed for diabetes. It wasn't long before users observed additional benefits; as noted on the cover of Eli Lilly's 2007 annual report, an individual reported not only control over their diabetes but also experiencing weight loss thanks to the drug.
Lilly Innovates Glp-1 With Monjaro, a Glp-1 and Gip Combination Drug
Eli Lilly did not rest on its laurels following the success of their initial Glp-1 drug. Over subsequent years, the company continued to innovate within the field, consistently improving the convenience and efficacy of its Glp-1 offerings. This led to the development of Terzepatide, a combination drug that includes both Glp-1 and Gip functionalities, enhancing its treatment potential.
Monjaro's Q2 2022 Success: $8.1b Revenue, 80% A ...
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Glp-1 and Eli Lilly's Monjaro
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Clarifications
- Glucagon-like peptide-1 (Glp-1) and glucose-dependent insulinotropic polypeptide (Gip) are hormones that play crucial roles in regulating blood sugar levels. Glp-1 helps stimulate insulin release, reduce glucagon secretion, and slow down stomach emptying, leading to better blood sugar control. Gip also aids in insulin secretion and helps regulate glucose metabolism after meals. Combining Glp-1 and Gip functionalities in a drug can enhance its effectiveness in managing diabetes by targeting multiple pathways involved in glucose regulation.
- Terzepatide is the generic name for the drug marketed by Eli Lilly under the brand name Monjaro. Pharmaceutical companies often use different names for the same drug, with the generic name being the official scientific designation. In this case, Terzepatide and Monjaro both refer to the same medication developed by Eli Lilly for the treatment of diabetes.
- Annual growth of 80% means that the revenue generated by Monjaro increased by 80% compared to the previous year. This growth rate indicates a significant rise in sales performance within a year. It showcases the rapid expansion and success of Monjaro in capturing a larger market share. The 80% annual growth reflects the strong demand and adoption of Monjaro in the market.
- Persistence dedication to innovation and advancement in diabetes ...
Counterarguments
- The success of Monjaro may overshadow the potential side effects or long-term risks that are not yet fully understood, which is a common concern with newly released pharmaceuticals.
- The report highlights the financial success of Monjaro but does not address the affordability and accessibility of the drug for patients, which can be a significant issue in healthcare.
- The focus on revenue growth may detract from a discussion on the actual clinical effectiveness and patient outcomes compared to existing treatments.
- The rapid growth in sales could be partly attributed to aggressive marketing strategies rather than solely the drug's efficacy or innovation.
- The mention of weight loss as a benefit may lead to off-label use of the drug for weight loss, which could be problematic if not adequately regulated or studied.
- The development of ...
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The Commercial Success and Impact of Glp-1 Drugs
GLP-1 drugs are gaining prominence in the global market for their multifaceted benefits in improving metabolic and potentially mental health, leading to significant commercial success.
Glp-1 Drugs Improve Metabolic Health; 20 Million Users Globally
Jason Calacanis sparked a conversation about the reach of GLP-1 drugs without providing specific figures, however, Dave Ricks, CEO of Eli Lilly, provided an estimate that around 20 million people globally are taking prescription GLP-1s. Not only are these drugs tackling metabolic diseases, but according to Ricks, they're also beneficial in reducing inflammation.
Glp-1 Drugs May Boost Mental Health, Curb Addictive Behaviors, and Slow Cognitive Decline
There are indications that GLP-1 drugs could be a game-changer beyond the treatment of metabolic issues. Dave Ricks touched upon a study by Novo Nordisk that assesses the possible role of these drugs in reducing dementia risk. Additionally, a VA study highlighted substantial mental health improvements among veterans with diabetes who were on GLP-1 drugs. Furthermore, Ricks mentioned ongoing studies that explore the use of new GLP-1 drugs de ...
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The Commercial Success and Impact of Glp-1 Drugs
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Counterarguments
- While GLP-1 drugs show promise, their long-term effects are not fully understood, and more research is needed to establish their safety profile over extended periods.
- The figure of 20 million users globally may not accurately represent the number of individuals who could benefit from GLP-1 drugs, as there may be barriers to access such as cost, healthcare infrastructure, and awareness.
- The benefits of GLP-1 drugs in reducing inflammation may vary among individuals, and they may not be effective for everyone due to genetic or lifestyle factors.
- The potential mental health benefits of GLP-1 drugs are still under investigation, and it is premature to consider them as a standard treatment option for psychiatric conditions without more conclusive evidence.
- Studies suggesting that GLP-1 drugs could reduce dementia risk may not account for confounding factors, and causality cannot be established without more rigorous, long-term studies.
- The excitement around new GLP-1 drugs designed to be more active in the brain should be tempered with caution until clinical trials confirm ...
Actionables
- You can discuss the potential benefits of GLP-1 drugs with your healthcare provider if you're managing conditions like diabetes or struggling with mental health issues. By bringing up the topic during your next appointment, you can explore whether these medications might be suitable for your health plan, considering their reported benefits in reducing inflammation and potentially improving mental health.
- Stay informed about medication safety by researching the latest updates from reputable sources like the FDA or pharmaceutical companies such as Eli Lilly. This will help you identify legitimate sources for any medications you're prescribed, ensuring you avoid counterfeit drugs, especially if you're considering purchasing medications from less familiar sources.
- Encourage conversations about the evolving r ...
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Pricing, Profitability, and Accessibility of Glp-1 Drugs
The conversation focuses on Eli Lilly's efforts to manage the pricing and profitability of GLP-1 drugs while also aiming to increase their accessibility for patients through insurance coverage.
Eli Lilly's Glp-1 Drugs Are Profitable, yet the Company Aims to Lower Patients' Out-of-pocket Costs
Lilly Set Monjaro At $1,000, Reduced To $4.99/Month, Aiming For $100-300
Eli Lilly's success with GLP-1 drugs is evident in their profitability, underscored by significant revenue figures. Dave Ricks mentioned that the original price point for their GLP-1 drug, Monjaro, was set at $1,000. Eli Lilly has taken measures to reduce the out-of-pocket costs for these drugs and now offers Monjaro directly from the company for as low as $4.99 a month. Ricks emphasized the company's commitment to lowering patients' out-of-pocket costs with a price target aiming between $100-300.
Lilly Balances Profitability With Drug Affordability and Accessibility
Eli Lilly appears to be balancing its profitability with efforts to enhance drug affordability and accessibility. Ricks acknowledges the importance of pricing drugs in a way that is sustainable for the company but also economically feasible for patients.
Getting Insurance to Cover Glp-1 Drugs For Affordab ...
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Counterarguments
- The reduction from $1,000 to $4.99 per month for Monjaro may not be available to all patients, depending on their insurance plans and eligibility for Eli Lilly's programs.
- Aiming for a price range of $100-300 may still be too high for some patients, especially those without insurance or with high-deductible health plans.
- Balancing profitability with affordability can be challenging, and some may argue that Eli Lilly could do more to lower prices and make drugs more accessible.
- Sustainable pricing for the company may not align with what is economically feasible for patients, particularly in a market where drug prices are often criticized for being too high.
- Insurance coverage is indeed crucial, but the process of getting insurance companies to cover new drugs can be lengthy and may not guarantee that all patients will have access.
- The focus on studying disease and pre-dise ...
Actionables
- You can track medication prices and discounts through a dedicated app to ensure you're getting the best deal on prescriptions. By using an app that alerts you to price drops and available coupons for medications like GLP-1 drugs, you can save money and manage your healthcare expenses more effectively. For example, set up notifications for price changes on specific drugs you or your family members use.
- Engage with patient advocacy groups to learn about and support efforts for better insurance coverage for essential medications. These groups often have resources and campaigns that aim to make medications more affordable and accessible. By participating, you can contribute to collective action that might lead to policy changes or improved insurance practices, especially for drugs that prevent disease.
- Educate yourself on the prevention and management of diseases that GLP-1 d ...
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The Broader State of Pharmaceutical R&D and Innovation
The pharmaceutical industry's research and development (R&D) landscape is undergoing dynamic shifts, influenced by funding trends, industry strategies, and scientific ambition.
Eli Lilly's R&D Features 4,200+ PhD Scientists, Rivaling MIT and Harvard Combined
Eli Lilly, a leading pharmaceutical company, is throwing considerable resources into its R&D efforts, which include employing over 4,200 PhD scientists. This powerhouse of intellect is capable of rivaling the combined expertise found at renowned academic institutions such as MIT and Harvard.
Company to Fund Organic R&D, Expand Manufacturing and Supply Chain, Pursue Biotech Acquisitions for External Innovation
Eli Lilly is focused on funding organic R&D initiatives and aims to expand its manufacturing and supply chain capabilities. The company is also proactively looking for opportunities to innovate through external means, such as the acquisition of biotech firms.
Lilly Sees Biotech Funding Decline As Acquisition Opportunity
Eli Lilly views the current downturn in biotech funding as an opportune moment for strategic acquisitions. The decline, referred to by Ricks as a "dumpster fire," has seen new investments plummet from about 20 billion dollars to only around 5 billion dollars. Eli Lilly aims to capitalize on this by acquiring entities that can add value to their R&D pursuits.
Lilly Seeks to Empower and Incentivize Scientists for Riskier, High-Impact Research Beyond Core Drug Franchises
Eli Lilly is committed ...
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Counterarguments
- While Eli Lilly employs a large number of PhD scientists, the comparison with MIT and Harvard may not be entirely fair, as academic institutions have broader educational and research missions beyond pharmaceutical R&D.
- Funding organic R&D and expanding manufacturing are positive steps, but they must be balanced with the need for cost-effective drug pricing and accessibility for patients.
- The strategy of pursuing biotech acquisitions during a funding decline could lead to consolidation in the industry, which may reduce competition and innovation in the long term.
- Empowering scientists to undertake high-risk research is commendable, but it is also important to maintain a diverse portfolio that includes incremental imp ...
Actionables
- You can explore the world of biotech investments by starting a virtual stock portfolio. Use a stock market simulator to "invest" in biotech companies, which will help you understand market trends and the impact of R&D investments without risking real money. For example, track companies that are similar to Eli Lilly in their R&D approach and monitor how their stock prices react to news about acquisitions or research breakthroughs.
- Encourage innovative thinking in your workplace by setting up an 'idea box' where colleagues can submit ambitious project proposals. Even if you're not in a scientific field, fostering a culture that rewards high-impact ideas can lead to improvements in your organization. Periodically review the submissions with your team and brainstorm how to implement the best ones, providing recognition and possibly small incentives for the top ideas.
- Use social media to follow and engage with biotech c ...
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Challenge of Counterfeit and Gray Market Glp-1 Drugs
The pharmaceutical industry is facing a significant challenge with the rise of counterfeit and gray market Glp-1 drugs, particularly in China. Companies like Lilly are striving to combat the issue, which risks patient safety and the sustainability of legitimate Glp-1 medications.
High Demand and Profitability of Glp-1 Drugs Fuel Gray and Counterfeit Markets in China, Which Lilly Aims to Address
Chinese Market Targets Glp-1 Derivatives, Exploiting Patent Loopholes and Subsidies To Undercut Lilly
Chamath Palihapitiya draws attention to an active gray market for Glp-1 drugs in China. Due to proficiency in peptide synthesis, Chinese manufacturers are creating drugs that are essentially on par with products from established companies like Lilly. This involves working around existing patents and producing drugs that, while not literal copies, are close derivatives. China has become particularly adept at patent hacking by using AI algorithms to analyze the structure of patented chemicals and then creating similar structures that legally fall outside the patent's scope. This approach has created derivative products that undercut pharmaceutical companies like Lilly both in price and speed to market.
Gray Market Activity Pressures Lilly's Pricing and Profitability, Risking Patient Safety and Glp-1 Drug Sustainability
Furthermore, Dave Ricks of Lilly acknowledges the challenge of counterfeit drugs, indicating that this is a pressing issue in markets with poor insurance quality where people tend to pay out of pocket. In such scenarios, individuals often seek cheaper alternatives outside regulated systems, which can compromise patient safety. This unregulated activity puts pressure on Lilly's pricing and profitability and threatens the sustainability of authentic Glp-1 drugs.
...
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Challenge of Counterfeit and Gray Market Glp-1 Drugs
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Counterarguments
- The assertion that Chinese manufacturers are creating drugs on par with established companies could be challenged by arguing that while some manufacturers may be proficient in peptide synthesis, this does not guarantee that their products meet the same safety and efficacy standards as those of established companies like Lilly.
- The idea that AI algorithms are used to create derivative products that legally fall outside a patent's scope could be countered by highlighting that such practices, while concerning, may also drive innovation and competition, which can be beneficial to the market and consumers in the long run.
- The claim that gray market activity risks patient safety and drug sustainability could be met with the argument that the existence of gray markets is a symptom of larger systemic issues, such as high drug prices and lack of access to medications, which need to be addressed at the policy level.
- The notion that individuals seek cheaper alternatives due to poor insurance quality could be countered by emphasizing the need for better healthcare policies and insurance coverage, rather than solely focusing on combating counterfeit drugs.
- The point about strengthening US supply chains and manufacturing could be criticized by arguing that focusing too much on domestic production might lead to incre ...
Actionables
- Educate yourself on the risks of counterfeit drugs by reading up on the subject through reputable health websites and pharmacological resources. Understanding the dangers of counterfeit medication can help you make informed decisions when purchasing medication, ensuring you prioritize safety over cost savings.
- Advocate for stronger intellectual property laws by writing to your local representatives, explaining the risks associated with counterfeit drugs and the importance of protecting legitimate pharmaceutical innovations. By voicing your concerns, you contribute to the push for legislative changes that can help curb the proliferation of counterfeit drugs.
- Choose to buy medications ...
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