Brief Summary
This podcast features an interview with Dave Ricks, the CEO of Eli Lilly, discussing the company's journey with GLP-1 drugs, the challenges of meeting demand, pricing considerations, and future research directions. Ricks also touches on the broader healthcare landscape, including the role of advertising, the potential of AI in research, and the need for reform in the food system.
- Eli Lilly's success with GLP-1 drugs began with a diabetes drug that also resulted in weight loss for patients.
- The company is investing heavily in R&D and expanding its supply chain to meet the high demand for its drugs.
- Ricks acknowledges the need to balance profitability with making medications accessible and is committed to lowering prices over time.
- He expresses concerns about the current state of biotech funding and the impact of potential NIH budget cuts on future therapeutics.
- Ricks also highlights the potential of GLP-1 drugs in treating mental health conditions and the need to address brain diseases.
Introduction and Personal Anecdotes
The podcast begins with a lighthearted exchange, including personal anecdotes about weight loss achieved using Eli Lilly's drugs. The hosts congratulate Dave Ricks on the company's success and acknowledge the significant impact of their drugs on individuals' health. The conversation quickly transitions to the business aspects, with the hosts marveling at the financial success Eli Lilly has achieved.
The Journey of GLP-1 Drugs
Dave Ricks recounts the history of Eli Lilly's involvement with GLP-1 drugs, starting in 2006 with a twice-a-day injection for diabetes that also resulted in weight loss. He explains that the company continued to innovate, creating new versions of the drug with improved convenience and increased dosage, leading to greater weight loss. Ricks highlights the success of tzepide, which surpassed Kitruda to become the best-selling drug in the world in Q2, generating $8.1 billion in revenue with 80% growth. In 2014, Lily scientists combined GLP-1 with another peptide to create tirzepatide (Mounjaro). In 2016, early phase study of tirzepatide had to be stopped because healthy male volunteers in Singapore were losing too much weight too quickly.
Addressing the Gray Market and Counterfeit Drugs
The discussion shifts to the challenges posed by the gray market, particularly in China, where counterfeit versions of GLP-1 drugs are being produced. Ricks explains that while counterfeit medicines have always existed, the high demand and cost of these drugs have created an incentive for people to seek alternatives outside the regulated system. He emphasizes the importance of obtaining medications through legitimate channels to ensure safety and efficacy.
Pricing, Profitability, and Moral Imperatives
The hosts question Ricks about the high cost of GLP-1 drugs and whether Eli Lilly has a moral imperative to lower prices, given the profound impact these drugs have on people's lives. Ricks acknowledges the concern and states the company's commitment to bringing prices down, noting that they have already reduced out-of-pocket costs. He explains the goal is to get oral medications reimbursed, questioning why anti-obesity drugs are not covered when other preventative medications and surgeries are. Ricks also cautions that drastically cutting prices could stifle innovation and the development of new medicines in this category, as R&D investments need to be funded through revenue.
Capital Allocation and R&D Strategy
Ricks discusses Eli Lilly's capital allocation strategy, emphasizing the importance of investing in organic R&D to create solutions for other health problems. He mentions the company's significant investment in R&D, with over 4,200 PhD scientists, and the need to balance shareholder returns with long-term innovation. Ricks also highlights the company's commitment to building out its supply chain in the US and acquiring external innovation through strategic acquisitions.
The State of Biotech Funding
The conversation turns to the current state of biotech funding, which Ricks describes as being in a "dumpster fire." He attributes this to competition from other venture ideas, too many biotech IPOs, and the rise of China as a competitor. Ricks explains that China is heavily investing in its own biotech companies and engaging in "patent hacking" to develop derivative products quickly.
Lifestyle and Prophylactic Use of GLP-1 Drugs
The hosts inquire about Ricks's personal lifestyle and whether he has considered using GLP-1 drugs prophylactically. Ricks shares his routine of early rising, exercise, reading, and prioritizing sleep. While he has not used GLP-1 drugs himself, he acknowledges the potential benefits of low doses for people over a certain age to promote longevity. He also notes the growing interest in peptides and biohacking communities, but emphasizes Eli Lilly's focus on clinical studies and FDA approvals.
Mental Health and Addiction
Ricks discusses the potential of GLP-1 drugs in treating mental health conditions and addiction. He mentions anecdotal evidence of people stopping smoking and reducing gambling habits while on these drugs. Eli Lilly is now starting studies in bipolar disorder, major depressive disorder, and addictive behaviors, using a new GLP-1 drug designed to have more brain activity.
The American Health Landscape and Food System
The conversation broadens to the overall health landscape in America, with Ricks criticizing the food system and the prevalence of processed foods and chemicals. He believes the anti-fat, high-carb diets promoted for decades have contributed to the obesity epidemic. Ricks supports efforts to reform the food system and make quality food cheaper and more accessible. He also expresses concerns about the skepticism surrounding vaccines.
Drug Advertising and Media Influence
The hosts raise the issue of drug advertising and whether it should be allowed, given the significant revenue media outlets derive from pharmaceutical companies. Ricks states he would prefer a system with less drug advertising, acknowledging that the ads are often poorly constructed due to outdated regulations. He suggests taxing drug advertising as a potential solution.
AI in Research and Consumer Health
Ricks expresses a positive view of people using AI tools like ChatGPT for health research, noting that he uses them himself to audit the accuracy of information about Eli Lilly's drugs. He believes AI can empower consumers to take ownership of their health. Ricks mentions that while they have pointed out mistakes to AI developers, it sometimes feels like "lobbing into a black hole."
Research Funding and the Role of Universities
The discussion turns to research funding in the US, with Ricks questioning the potential impact of NIH budget cuts. While acknowledging the landmark achievements of the NIH, he raises concerns about the granting process and whether it is truly competitive. Ricks also questions whether universities are the optimal research institutions and suggests there could be a place for other participants.
PBMs and the Future of Healthcare
Ricks provides a brief explanation of Pharmacy Benefit Managers (PBMs) and their role in negotiating drug discounts. While he believes PBMs initially served a purpose, he suggests that their service has deteriorated over time, with their actions primarily benefiting themselves rather than customers. Ricks predicts that brain diseases will be the next big surprise category in healthcare, given the significant human suffering they cause and the lack of effective treatments.
