January 9, 2025 • 22 mins
Eli Lilly is the world's most valuable drug company, known for its blockbuster anti-obesity drugs that's transforming America. In an episode of "The David Rubenstein Show: Peer to Peer Conversations," CEO Dave Ricks talks about how the company will begin studies this year to see if its weight-loss medicines can also be used to treat addictive behaviors like alcohol abuse, smoking and drug addiction. He also discusses how the company is tackling the issue of counterfeit drugs, as well as the other projects they have on the pipeline. This interview was recorded on December 10 at the Economic Club of Washington DC.
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Speaker 1 (00:02):
One of the most transformative drugs on the market today
are anti obesity drugs. One of the leaders in producing
those drugs is Eli Lilly. It has transformed itself over
the last five years to accompany that's now the most
valuable pharmaceutical company in the world. I sat down with
Dave Rix recently to talk about it's anti obesity phenomenon
and how it is transforming America. Let's talk about these
(00:25):
phenomenon that's changed the world to some extent. Which is
the anti obesity drug?
Speaker 2 (00:31):
Now? To make sure everybody's on the.
Speaker 1 (00:32):
Same page links, what is the name of your anti
obesity drug?
Speaker 3 (00:37):
Okay, so the name is zep bound. The active ingredients
called their zepetide.
Speaker 2 (00:44):
So, by the way, who comes up with these names?
Where do you raise names? Not me, David me.
Speaker 3 (00:49):
We can't have names that are similar to each other
because doctors make prescribing hers. We can't have names that
make claims about what the drug does, and we can't
have names that only work in English.
Speaker 4 (00:59):
So we end up with these sounding names.
Speaker 1 (01:01):
When was that discovered and is that ever the intention
when the drug was being developed?
Speaker 3 (01:05):
Yeah, pretty early on. So we launched the first GLP
one medication in the world.
Speaker 4 (01:09):
In two thousand and five. It was called exendotide.
Speaker 3 (01:12):
It was a twice daily injection and it was indicated
for people with diabetes. But that was the first effort.
On the cover of our the next year, our annual
report is a woman who was using the drug and
she said, my diabetes is under control, and I noticed
I'm losing a little weight. Actually two thousand and six,
it's a cover of our anal report. But we had
to improve the medicines to really make them effective for
(01:33):
weight loss. One big improvement was to make them weekly.
That's a convenience benefit, but even more important, the.
Speaker 4 (01:43):
Action of the.
Speaker 3 (01:44):
Medicine flatter, meaning more consistent through the day and night.
When we had it twice a day, there were ups
and downs, and one effect of GLP one medications is
they cause nausea and other gi distress. That's a function
of the up and down in your system. So when
we made weekly, it was flatter and we could dose
higher to see.
Speaker 4 (02:03):
More weight loss.
Speaker 3 (02:04):
So that was sort of an accidental breakthrough of trying
to make a more convenient form.
Speaker 1 (02:08):
Now there's another company that is sort of in the
same business.
Speaker 2 (02:12):
No Vote Nor it is Yes.
Speaker 1 (02:13):
Which is in Denmark, and they have a similar product,
and they have a product that does the same thing.
One is for obesity anti obesity, and one is for.
Speaker 2 (02:25):
Diabetes and correct. Is there really any difference in terms
of the drugs.
Speaker 4 (02:29):
There are.
Speaker 3 (02:29):
There's no difference really between the name the drug that's
named for diabetes versus name for obesity for either company.
We do that for insurance reasons we could talk about.
But tre Zeppetide is the latest version. It has two
modes of action. So right now, because you just ate lunch,
your GI track is communicating with the rest of your body.
It's communicating with hormones or proteins and telling it that
(02:51):
you've been fed and you need to absorb nutrients and
other things that are essentible life because food is essential life.
What we're doing boosting some of those signals with these medications.
They're boosting the signal that you're full, boosting the signal
that you no longer want to eat more, and boosting
signals that you should absorb nutrients that you've consumed. And
(03:11):
so ours does that with two different hormones, one called
GLP one another new one called gip ozepic or semaglue
tide just uses GLP one.
Speaker 1 (03:21):
But what the drug does is what it tells your
body you're full. When you're maybe not as full as
you used to be.
Speaker 3 (03:26):
It tells your body you're full, and it does that
to the brain sense of saiety. Probably we've learned over
time our sense of fullness becomes conditional. So as people
eat more habitually, that signal kicks in later and later,
and that's a cause and consequence of obesity.
Speaker 4 (03:47):
It does other things too.
Speaker 3 (03:49):
It actually makes your stomach fuller because it slows gastric motility,
so it slows down your nutrients, which seems counterintuitive, but
when you eat in when our ancestors were alive ten
thousand years ago, meals were rare and you want to
absorb all the nutrients out of it. So that signal said,
absorb the nutrients all right.
Speaker 1 (04:08):
I don't want to confuse people, but there are four
different names that people should know for these drugs. Now
you have an ANTIBCD drug which is called what zepounepbound,
and then you have a diabetes drug which is.
Speaker 4 (04:19):
Called manjarro, same medicine, suferent names.
Speaker 1 (04:22):
There was a study that was just came out a
couple of days ago. I think that said one on
one comparing the two. Your drug anti OBEs drug loses
weight more rapidly for people than the other product.
Speaker 2 (04:34):
Is that right?
Speaker 4 (04:35):
Rapidly?
Speaker 3 (04:35):
And more so forty seven percent more so After a
year and a half, roughly, people on our drug loss
seventeen more pounds.
Speaker 2 (04:43):
Then on we go.
Speaker 1 (04:43):
Why do people need to lose so much weight in
this country? Our country has, as I got it right,
seventy five percent of the people are overweight and forty
two percent are obese. When it all of a sudden
we become so obese?
Speaker 3 (04:56):
Yeah, if you look at the epidemiology charts, it really
seems to started in the sixties growth in overweight and
obesity in the country, and really accelerated in the eighties
and nineties.
Speaker 4 (05:09):
What are the reasons?
Speaker 3 (05:10):
How we live certainly is one of them, and energy
expenditure has to be part of the story. What we eat, though,
is probably a more important reason, not just the quantity
which has risen modestly through that period of time, but
actually what's in our food has changed, and I think
that's also attributed to this.
Speaker 1 (05:28):
All right, So back to the drug. When you realized
they could lose weight. Did you get the FDA to say, yes,
it can be prescribed for losing weight, or it's still
you can't get that prescribed for you.
Speaker 2 (05:39):
No.
Speaker 4 (05:40):
No. As of last year, we have found launched it's
for weight loss.
Speaker 1 (05:43):
And do insurance companies reimburse people for the cost of
these drugs?
Speaker 3 (05:48):
Some do, more should so as of today, the federal
government actually has a prohibition on reimbursing any of these drugs, which.
Speaker 4 (05:59):
Is a problem.
Speaker 3 (06:00):
I think although the Biden administration just as advanced rulemaking
to change that. That's good news, and we hope the
next administration will continue that process.
Speaker 1 (06:07):
So if losing weight makes you healthier, why would people
who care about insurance reimbursement medicare and not insist on
paying for this because it would make you healthier and
therefore you don't have other diseases yet that they have
to reimburse you for.
Speaker 3 (06:20):
I think in four or five years we'll look back
and say, yeah, that's what should have happened, and it's
silly that we don't pay for what is already known
to be a primary contributor to poor health, which is
excess body weight. But you know, do people have different
motives and incentives. Maybe your employer has a stronger interest
in your long term health. That's probably why many have
stepped forward.
Speaker 4 (06:41):
And then evidence.
Speaker 3 (06:42):
Our job is to make the evidence produce the evidence
that we're not just having people lose weight, but losing
weight with our medicine causes improved health. And we have
many studies out this year that are demonstrating that.
Speaker 1 (06:53):
So to take this medicine, you have to inject yourself
for less.
Speaker 2 (06:56):
Yeah, well why not just go to a pill?
Speaker 4 (06:59):
A great idea. Yeah, we're working on that.
Speaker 3 (07:03):
The injection you have to inject because it's a protein
and if we orally take proteins, your body thinks it's
food and it breaks up proteins. So you cannot really
take these drugs oily. You have to bypass the GI
track even though it's affecting, and go right to the bloodstream.
But we are working on a pill. We'll have some
data actually as early as next year. It's a GLP
(07:25):
one only it's a single acting It's not going to
be as good as trs appetite as that bound. It
be about as good as oozempic, we hope, and this
would be a once daily pill.
Speaker 1 (07:32):
Some people say that if you go on this drug,
you have side effects that are not completely desirable.
Speaker 2 (07:39):
Is that true?
Speaker 3 (07:40):
All drugs that work have side effects and sometimes on
twitter effects, and we have to warn against both of those.
That's why we do controlled studies and measure them carefully.
Many people have mild to moderate GI distress when they start.
That's why we ty trate. We started a low dose.
We recommend a low dose and go up slowly. Almost
everybody stays on the dr and goes through that and
(08:01):
by the third or fourth month really don't have any
effects any more of.
Speaker 4 (08:05):
That at all.
Speaker 1 (08:05):
Let's suppose you take the drug and say, I've lost weight,
I'm very happy with my body.
Speaker 2 (08:09):
Now I'm going to get off the drug.
Speaker 1 (08:11):
Some people say that there are it's very difficult to
not regain the weight.
Speaker 3 (08:16):
That's right, and science tells us that there's a reason
for that. Some people do maintain the weight reduction or
stay in that range. They have to change a lot
about how they live, burn more energy, eat different foods.
Speaker 4 (08:30):
So we can all try that.
Speaker 3 (08:31):
I think we should all try that, actually, but some
people cannot. And there's a recent paper in Nature that
actually told us why, which is that once you have
become obese, your fat sales learned that that's their new
state and they defend that state, and so they're actually
wanting more energy and that sends signals to your brain
(08:53):
and so forth. So once we as adults gain weight
and have that on for a while, it's very very
difficult to reset your thermostat if you would to reset
that level. So for now we do recommend if they
can't people cannot maintain weight loss off the drug, to
go back on the drugs and use them chronically.
Speaker 1 (09:11):
Let's talk about Eli Lilly itself. When was his company started.
Speaker 3 (09:15):
Eighteen seventy six, So started by a Colonel Eli Lilly who.
Speaker 4 (09:19):
Served in the Civil War.
Speaker 3 (09:20):
He was a pharmacist by training, led an infantry and
artillery company, and was a prisoner of war in Alabama actually,
and he saw firsthand the atrocities of medical care in
the Civil War. So he started a company with a
pledge to say everything that's in this is.
Speaker 4 (09:35):
On the label. If it's in there, you know about it. Transparency.
Speaker 3 (09:39):
And that then evolved into a company that embraced the
scientific method and began to really adopt the methods that
the modern industry has, which is then taking natural products,
which is what most medicines were in eighteen seventy six,
and refining them into what we think of as a medicine. Now.
Speaker 1 (09:55):
When Eli Lilly evolved over the years in the twentieth century,
what were its big product?
Speaker 3 (10:00):
Yeah, so insulin really was the birth of the modern company.
And this was obviously a terrible condition, type one diabetes
and a breakthrough, and we were part of commercializing that
around the world, invented the manufacturing method and created that
business that was followed by actually penicillin. So during World
War Two, Lily was commissioned as one of the manufacturers
for antibiotics for the army and we from there then
(10:22):
iterated for forty years antibiotics, including still some that are
used today like bankamasin, which is the last line of
defense for the worst infections. Prozac we're famous for, which
has really brought modern psychiatry into the fold.
Speaker 4 (10:37):
And of course, now manjar O.
Speaker 1 (10:39):
And zep bound, what are the human problems you're working
on in the future. Alzheimer's, I assume is one of them.
Speaker 3 (10:44):
Absolutely, Yeah, So we think about our company. Of course,
we use scientific methods to create medicines to solve tough problems.
We're not really interested in niche problems. We think we're
here because we're a big company to do hard problems
that are scalable. That's sort of where makes our business work,
but also is the most human impact. So we select
these diseases that are common and tough. So you mentioned Alzheimer's,
(11:06):
NERD degenerative conditions or the most frightening conditions. Most people
think about Parkinson's als Alzheimer's and the science. We've been
investing there for thirty years. We just launched our first
medicine and so now we're getting revenue after thirty years
on that project, and we're working on a prevention study
for that same medicine, which could really transform Alzheimer's. We
think other NERD to generic conditions like Parkinson's, als, et cetera,
(11:28):
are becoming more tractable with science, and you'll see us
invest heavily in that area going forward.
Speaker 1 (11:32):
Are you concerned about the new administration coming into power?
Have you met with President electromp talk about your issues.
Speaker 3 (11:38):
Healthcare is always a topic and so then our role
in it and medicine affordability is a key area.
Speaker 4 (11:45):
I think everyone would like.
Speaker 3 (11:47):
The US have a strong biopharma industry that have beens
amazing medicines like setbound and makes them here like Lily does.
But at the same time, we want our things to
be cheap and.
Speaker 4 (11:56):
Accessible to all.
Speaker 3 (11:57):
Okay, that's hard to solve for all those things, but
we can make progress. Like one example is we were
known for the insulin pricing challenges we had, and insulin
was overpriced in the US, according to the critics, and
we were able to bring that price down. I think
there are solutions and by engaging we can find them.
Speaker 2 (12:15):
Have you met with anybody in the new administration yet?
Speaker 4 (12:17):
Yeah?
Speaker 3 (12:18):
I think it was reported last week we had a
dinner down in Florida.
Speaker 2 (12:21):
How was that, Like, did they serve up fattening food
or they don't do that with you?
Speaker 3 (12:25):
Probably shouldn't say too much about it, but it was
all you could imagine and a little bit more.
Speaker 4 (12:31):
Yeah.
Speaker 1 (12:34):
Well, let's talk about your own background. Where were you born?
Speaker 4 (12:38):
Yeah?
Speaker 3 (12:38):
I was born in Bloomington, Indiana, So who's your by birth?
But my dad was a grad student at IU at
the time, and we quickly left.
Speaker 4 (12:44):
And moved to California.
Speaker 3 (12:45):
My mom was from California and I grew up in
the Bay Area and then followed in their footsteps and
went to Purdue University back in Indiana.
Speaker 2 (12:52):
And what did you study there?
Speaker 3 (12:54):
So I started studying business and engineering, ended up with
a degree industrial management, which combines those two. I went
to work for IBM in New York. I joined the
stock wasn't an all time hime when I left, it
was an all time low. They had a tough time
in the early nineties.
Speaker 2 (13:08):
She went to join ELI Lilly in what year?
Speaker 3 (13:10):
So I left IBM to follow my girlfriend who's now
my wife, who was going to medical school at Indiana University.
So again back to Indiana, and I needed somebody to
do there, so I decided to enroll in their MBA
program and I got an MBA. Of course, medicine's a
four year degree, NBA's two. So I still needed somebody
to do in Indiana, so I joined Lily.
Speaker 2 (13:30):
What was your position at the beginning?
Speaker 3 (13:31):
Yeah, I was in the department that looked at M
and A transactions in the finance and Business Development group
and the great introduction to.
Speaker 1 (13:40):
The Did you ever say I'm going to be the
CEO someday or something like that?
Speaker 4 (13:43):
Not?
Speaker 3 (13:43):
Then I actually really was thinking I'll be here for
two years and then we'll be off to Chicago or
San Francisco and do something different.
Speaker 4 (13:50):
But I fell in love with the company.
Speaker 3 (13:52):
I mean, it's an amazing place. It's a very humanistic culture,
but yet very rigorous and scientific, so it's demanding smart people,
but people are nice.
Speaker 4 (14:02):
To each other.
Speaker 3 (14:03):
It's the Midwest, and I fell in love with the mission,
which is what could be better than making medicine for people.
I worked on a medicine to collaborate and bring into
the company for diabetes, and right as I was leaving
that job, my mother was diagnosed with diabetes and she
was put on that medicine, and so the sort of
the point of what we do just became super salient
(14:25):
for me, and I said, this is not a bad
way to spend my time.
Speaker 4 (14:28):
And I said to my wife, let's stay here.
Speaker 1 (14:30):
When did you realize that you were on a track
to be the CEO?
Speaker 2 (14:33):
Was it five years post? For later?
Speaker 4 (14:36):
Well?
Speaker 3 (14:36):
So I worked in that job, and then I had
some jobs running markets. I ran our Canadian business and
then went to China for two and a half years
and ran our Chinese business. And I was suddenly called
back from China by the CEO who was a new CEO,
and he said you need to come run our US business.
And said, John, do't you want me to finish the job?
He said, you need to come back. I think that
(14:57):
was the point where I was sort of being cultivated
for big something bigger.
Speaker 2 (15:01):
You now have three children, Yeah, for a while.
Speaker 4 (15:04):
I've had three children. Yea, Yes, they're young adults.
Speaker 1 (15:09):
Now, okay, all right, But are any of them interested
in weight reduction programs or things like.
Speaker 2 (15:15):
That or not really?
Speaker 3 (15:16):
Well, so my son, he's an AI consultant, so not
so much. My daughter is actually getting master's in sell
biology and interested in med school, so she's thinking about
medicine and medical science. And we talk a lot about
the weight loss drugs. And my youngest son is a
geology student that produe, so we'll see what he does.
Speaker 1 (15:34):
So what do you do for relaxation to stay in shape?
You're not on one of these drugs? I think because
you look very fit and exercise a lot.
Speaker 3 (15:43):
Yeah I'm not, but I would never hesitate to be
on one if I needed it. But the best medicine
is prevention, and so you know, paying attention to exercise
is something I've always cared about It's a way I
reduce stress too. So I loved running, and now I
don't run anymore, but I do other things like hiking.
I love backcountry skiing and the outdoors, play golf. Being
(16:05):
outside is where I find both fitness and peace.
Speaker 1 (16:09):
You've had an astounding success at ELI, Lelly. Suppose a
president of the United States said you should be the
secretary of HHS or something like that, what would you say.
Speaker 3 (16:18):
You know, the company, as you've pointed out graciously, is
really doing well, but you know, we really have a
strong desire to do even more, and we're just at
the beginning of this weight loss story. You know, right
now there's six or seven million Americans who are taking
these medicines. There are one hundred and ten million with obesity.
We need to build more plants and develop more data,
(16:38):
get in better insurance coverage, and then there's the whole
world to cover. It's projected in five years there'll be
a billion people on the planet who have obesity, and
it's going to become a much bigger problem in the
developing world than it ever has been in America.
Speaker 1 (16:51):
When you have drugs that are very, very popular that
you often have people that make counterfeit or copycat drugs.
What about for this do you have to worry about
counterfeit drugs coming in that are trying to say the
same thing.
Speaker 3 (17:03):
It's a terrible problem right now, actually, because I think
consumers don't really know.
Speaker 4 (17:07):
The dangers or the difference.
Speaker 3 (17:10):
Today, the FDA and the government has allowed this to
sort of grow.
Speaker 4 (17:15):
And of course a weight.
Speaker 3 (17:16):
Loss medication that's effected would be a popular thing for
people to go around the healthcare system and seek treatment
on their own. But the data we have is that
eighty percent of these medicines are coming out of China
from unapproved and unregulated sources. We recently with Borders and
Customs seized a big batch that was shipped in dog food.
(17:37):
People then reformulate them and sell them locally in medspas
and other outfits. But you really don't know what's in
that vile We buy them and test them, we find bacteria,
plant material, viruses, fungus.
Speaker 4 (17:49):
You do not want to be using.
Speaker 1 (17:51):
But how much more expensive are your drugs than the
counterfeit ones? In other words, if somebody wants to use
your product zep bound, how much does it cost a month?
Speaker 3 (18:02):
You can buy zepbound direct from Lily for three ninety
nine for the starter do.
Speaker 2 (18:05):
Eight dollars and ninety nine cents.
Speaker 3 (18:07):
No, this is a valuable innovation, David. Three hundred and
ninety nine. Three hundred and ninety nine dollars a month,
all right, which is about one hundred dollars a week.
And I know that's a sacrifice for many, but that's
without insurance. With insurance, most people pay twenty five dollars
a month. So that's the importance of insurance. That's why
we buy insurance to shield this from our health costs.
(18:29):
The online ones, you know, are as cheap as one
hundred dollars. But these are companies that want all the
benefits of being a drug company but bear none other responsibilities.
Speaker 2 (18:37):
So let's talk about the company today. How many employees
do you have?
Speaker 4 (18:41):
Forty four thousand.
Speaker 1 (18:42):
And you're headquartered in Indianapolis, yes, correct? And where do
you manufacture your drugs? Are the most in the US
or mostly overseas.
Speaker 3 (18:50):
Mostly in the US, a large majority in Europe as well,
So those are our two big bases for production. And
in the US we're building lots of plants right now,
mostly to support zep bound.
Speaker 4 (19:00):
I'm Mancharro.
Speaker 1 (19:00):
When did you all realize this is so transformative that
you're going to become the most valuable pharmaceutical company in
the world by a factor of four or five times.
Speaker 3 (19:08):
It's hard to know exactly what the scale of something is,
but I will The story of churs epetit or zepbound
for me is this. In twenty sixteen, I was named
as the incoming CEO. In that fall, one of our
scientists in the diabetes group called me about some early
results they were receiving from singaporean site we had that
(19:30):
was doing a phase one study with churzepetite, the ingredient
and zepbound, and we had to stop the study because
people were losing too much weight to stay in it.
And at first this was seen as like an alarming thing,
but of course we began to process that is, wait
a minute, this could be something very special. So we
sped to the next stage of development, phase two, where
(19:51):
you try to show safety and efficacy in a bigger study.
And I remember, in a kind of a moment, I
was showing my daughter around a college. We were at
cal Berkeley, standing outside of the Lawrence Hall of Science,
and I got a phone call and the team just
got off the plane, got the results and showed that
people were losing over twenty percent body weight in a
(20:12):
longer study that was in April of eighteen.
Speaker 4 (20:15):
We disclosed those results later.
Speaker 3 (20:17):
That year, and you could probably argue a lot of
the run up in Lily was just execution from that
moment forward.
Speaker 2 (20:24):
Did you take the credit for this? Are you the
person responsible for this happening or not?
Speaker 3 (20:27):
Of course, as a CEO of a role in all this,
but it would be way overstating the role if I
took credit. So the credit goes to the scientists to
begin with. We have a lot of incumbent capabilities, like
how do you take a protein like GLP one, which
in the natural body lasts only a few seconds and
make it into a week long injection. So that's a
pharmacology exercise that's difficult, and we have people who can
(20:49):
do that, and we have people who do the clinical
trials and everything else to see the opportunity and go
for it. We have people who make it every day
twenty four to seven. We run our factories. So it's
a giant team sport.
Speaker 1 (20:59):
Where do you want to take your company now you
can't find any drug it's going to be more successful
than one you have is you're just going to keep
promoting this drug.
Speaker 3 (21:07):
First of all, within the obesity metabolic health space, I
think there's two things I'm very excited about. One is
we have tzepetide modros that found on the market. We
have eleven other pipeline projects aimed at the same problem
but in different ways.
Speaker 4 (21:22):
So we have a triple.
Speaker 3 (21:23):
Acting medicine that's in phase three for those that have
even higher body weight or more severe health problems. We
have the Oral Project, nine others Beyond that, we think
this is going to be a very large segment with
many different types of medicines for different conditions and different
situations people might find themselves in.
Speaker 4 (21:41):
We're going to exploit that fully.
Speaker 3 (21:43):
The second thing is we've talked a lot about like
cardivascer health, diabetes, these conditions that wants to think about
with being overweight. But these medicines, we think and we
aim to prove, can be useful for other things we
don't think about connected to weight. These are often called
anti hedonic, so they are reducing that desire cycle. So
(22:03):
next year you'll see Lily start large studies and alcohol
abuse and nicotine use even in drug abuse. And then
beyond that, David, we need to make important medicines for
the long haul or old company. We plan to be
here another one hundred and fifty years plus. And I
mentioned my excitement about brain health. I think that's really
the next frontier.
Speaker 1 (22:21):
Thanks for listening to hear more of my interviews. You
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wherever you listen
One of the most transformative drugs on the market today
are anti obesity drugs. One of the leaders in producing
those drugs is Eli Lilly. It has transformed itself over
the last five years to accompany that's now the most
valuable pharmaceutical company in the world. I sat down with
Dave Rix recently to talk about it's anti obesity phenomenon
and how it is transforming America. Let's talk about these
(00:25):
phenomenon that's changed the world to some extent. Which is
the anti obesity drug?
Speaker 2 (00:31):
Now? To make sure everybody's on the.
Speaker 1 (00:32):
Same page links, what is the name of your anti
obesity drug?
Speaker 3 (00:37):
Okay, so the name is zep bound. The active ingredients
called their zepetide.
Speaker 2 (00:44):
So, by the way, who comes up with these names?
Where do you raise names? Not me, David me.
Speaker 3 (00:49):
We can't have names that are similar to each other
because doctors make prescribing hers. We can't have names that
make claims about what the drug does, and we can't
have names that only work in English.
Speaker 4 (00:59):
So we end up with these sounding names.
Speaker 1 (01:01):
When was that discovered and is that ever the intention
when the drug was being developed?
Speaker 3 (01:05):
Yeah, pretty early on. So we launched the first GLP
one medication in the world.
Speaker 4 (01:09):
In two thousand and five. It was called exendotide.
Speaker 3 (01:12):
It was a twice daily injection and it was indicated
for people with diabetes. But that was the first effort.
On the cover of our the next year, our annual
report is a woman who was using the drug and
she said, my diabetes is under control, and I noticed
I'm losing a little weight. Actually two thousand and six,
it's a cover of our anal report. But we had
to improve the medicines to really make them effective for
(01:33):
weight loss. One big improvement was to make them weekly.
That's a convenience benefit, but even more important, the.
Speaker 4 (01:43):
Action of the.
Speaker 3 (01:44):
Medicine flatter, meaning more consistent through the day and night.
When we had it twice a day, there were ups
and downs, and one effect of GLP one medications is
they cause nausea and other gi distress. That's a function
of the up and down in your system. So when
we made weekly, it was flatter and we could dose
higher to see.
Speaker 4 (02:03):
More weight loss.
Speaker 3 (02:04):
So that was sort of an accidental breakthrough of trying
to make a more convenient form.
Speaker 1 (02:08):
Now there's another company that is sort of in the
same business.
Speaker 2 (02:12):
No Vote Nor it is Yes.
Speaker 1 (02:13):
Which is in Denmark, and they have a similar product,
and they have a product that does the same thing.
One is for obesity anti obesity, and one is for.
Speaker 2 (02:25):
Diabetes and correct. Is there really any difference in terms
of the drugs.
Speaker 4 (02:29):
There are.
Speaker 3 (02:29):
There's no difference really between the name the drug that's
named for diabetes versus name for obesity for either company.
We do that for insurance reasons we could talk about.
But tre Zeppetide is the latest version. It has two
modes of action. So right now, because you just ate lunch,
your GI track is communicating with the rest of your body.
It's communicating with hormones or proteins and telling it that
(02:51):
you've been fed and you need to absorb nutrients and
other things that are essentible life because food is essential life.
What we're doing boosting some of those signals with these medications.
They're boosting the signal that you're full, boosting the signal
that you no longer want to eat more, and boosting
signals that you should absorb nutrients that you've consumed. And
(03:11):
so ours does that with two different hormones, one called
GLP one another new one called gip ozepic or semaglue
tide just uses GLP one.
Speaker 1 (03:21):
But what the drug does is what it tells your
body you're full. When you're maybe not as full as
you used to be.
Speaker 3 (03:26):
It tells your body you're full, and it does that
to the brain sense of saiety. Probably we've learned over
time our sense of fullness becomes conditional. So as people
eat more habitually, that signal kicks in later and later,
and that's a cause and consequence of obesity.
Speaker 4 (03:47):
It does other things too.
Speaker 3 (03:49):
It actually makes your stomach fuller because it slows gastric motility,
so it slows down your nutrients, which seems counterintuitive, but
when you eat in when our ancestors were alive ten
thousand years ago, meals were rare and you want to
absorb all the nutrients out of it. So that signal said,
absorb the nutrients all right.
Speaker 1 (04:08):
I don't want to confuse people, but there are four
different names that people should know for these drugs. Now
you have an ANTIBCD drug which is called what zepounepbound,
and then you have a diabetes drug which is.
Speaker 4 (04:19):
Called manjarro, same medicine, suferent names.
Speaker 1 (04:22):
There was a study that was just came out a
couple of days ago. I think that said one on
one comparing the two. Your drug anti OBEs drug loses
weight more rapidly for people than the other product.
Speaker 2 (04:34):
Is that right?
Speaker 4 (04:35):
Rapidly?
Speaker 3 (04:35):
And more so forty seven percent more so After a
year and a half, roughly, people on our drug loss
seventeen more pounds.
Speaker 2 (04:43):
Then on we go.
Speaker 1 (04:43):
Why do people need to lose so much weight in
this country? Our country has, as I got it right,
seventy five percent of the people are overweight and forty
two percent are obese. When it all of a sudden
we become so obese?
Speaker 3 (04:56):
Yeah, if you look at the epidemiology charts, it really
seems to started in the sixties growth in overweight and
obesity in the country, and really accelerated in the eighties
and nineties.
Speaker 4 (05:09):
What are the reasons?
Speaker 3 (05:10):
How we live certainly is one of them, and energy
expenditure has to be part of the story. What we eat, though,
is probably a more important reason, not just the quantity
which has risen modestly through that period of time, but
actually what's in our food has changed, and I think
that's also attributed to this.
Speaker 1 (05:28):
All right, So back to the drug. When you realized
they could lose weight. Did you get the FDA to say, yes,
it can be prescribed for losing weight, or it's still
you can't get that prescribed for you.
Speaker 2 (05:39):
No.
Speaker 4 (05:40):
No. As of last year, we have found launched it's
for weight loss.
Speaker 1 (05:43):
And do insurance companies reimburse people for the cost of
these drugs?
Speaker 3 (05:48):
Some do, more should so as of today, the federal
government actually has a prohibition on reimbursing any of these drugs, which.
Speaker 4 (05:59):
Is a problem.
Speaker 3 (06:00):
I think although the Biden administration just as advanced rulemaking
to change that. That's good news, and we hope the
next administration will continue that process.
Speaker 1 (06:07):
So if losing weight makes you healthier, why would people
who care about insurance reimbursement medicare and not insist on
paying for this because it would make you healthier and
therefore you don't have other diseases yet that they have
to reimburse you for.
Speaker 3 (06:20):
I think in four or five years we'll look back
and say, yeah, that's what should have happened, and it's
silly that we don't pay for what is already known
to be a primary contributor to poor health, which is
excess body weight. But you know, do people have different
motives and incentives. Maybe your employer has a stronger interest
in your long term health. That's probably why many have
stepped forward.
Speaker 4 (06:41):
And then evidence.
Speaker 3 (06:42):
Our job is to make the evidence produce the evidence
that we're not just having people lose weight, but losing
weight with our medicine causes improved health. And we have
many studies out this year that are demonstrating that.
Speaker 1 (06:53):
So to take this medicine, you have to inject yourself
for less.
Speaker 2 (06:56):
Yeah, well why not just go to a pill?
Speaker 4 (06:59):
A great idea. Yeah, we're working on that.
Speaker 3 (07:03):
The injection you have to inject because it's a protein
and if we orally take proteins, your body thinks it's
food and it breaks up proteins. So you cannot really
take these drugs oily. You have to bypass the GI
track even though it's affecting, and go right to the bloodstream.
But we are working on a pill. We'll have some
data actually as early as next year. It's a GLP
(07:25):
one only it's a single acting It's not going to
be as good as trs appetite as that bound. It
be about as good as oozempic, we hope, and this
would be a once daily pill.
Speaker 1 (07:32):
Some people say that if you go on this drug,
you have side effects that are not completely desirable.
Speaker 2 (07:39):
Is that true?
Speaker 3 (07:40):
All drugs that work have side effects and sometimes on
twitter effects, and we have to warn against both of those.
That's why we do controlled studies and measure them carefully.
Many people have mild to moderate GI distress when they start.
That's why we ty trate. We started a low dose.
We recommend a low dose and go up slowly. Almost
everybody stays on the dr and goes through that and
(08:01):
by the third or fourth month really don't have any
effects any more of.
Speaker 4 (08:05):
That at all.
Speaker 1 (08:05):
Let's suppose you take the drug and say, I've lost weight,
I'm very happy with my body.
Speaker 2 (08:09):
Now I'm going to get off the drug.
Speaker 1 (08:11):
Some people say that there are it's very difficult to
not regain the weight.
Speaker 3 (08:16):
That's right, and science tells us that there's a reason
for that. Some people do maintain the weight reduction or
stay in that range. They have to change a lot
about how they live, burn more energy, eat different foods.
Speaker 4 (08:30):
So we can all try that.
Speaker 3 (08:31):
I think we should all try that, actually, but some
people cannot. And there's a recent paper in Nature that
actually told us why, which is that once you have
become obese, your fat sales learned that that's their new
state and they defend that state, and so they're actually
wanting more energy and that sends signals to your brain
(08:53):
and so forth. So once we as adults gain weight
and have that on for a while, it's very very
difficult to reset your thermostat if you would to reset
that level. So for now we do recommend if they
can't people cannot maintain weight loss off the drug, to
go back on the drugs and use them chronically.
Speaker 1 (09:11):
Let's talk about Eli Lilly itself. When was his company started.
Speaker 3 (09:15):
Eighteen seventy six, So started by a Colonel Eli Lilly who.
Speaker 4 (09:19):
Served in the Civil War.
Speaker 3 (09:20):
He was a pharmacist by training, led an infantry and
artillery company, and was a prisoner of war in Alabama actually,
and he saw firsthand the atrocities of medical care in
the Civil War. So he started a company with a
pledge to say everything that's in this is.
Speaker 4 (09:35):
On the label. If it's in there, you know about it. Transparency.
Speaker 3 (09:39):
And that then evolved into a company that embraced the
scientific method and began to really adopt the methods that
the modern industry has, which is then taking natural products,
which is what most medicines were in eighteen seventy six,
and refining them into what we think of as a medicine. Now.
Speaker 1 (09:55):
When Eli Lilly evolved over the years in the twentieth century,
what were its big product?
Speaker 3 (10:00):
Yeah, so insulin really was the birth of the modern company.
And this was obviously a terrible condition, type one diabetes
and a breakthrough, and we were part of commercializing that
around the world, invented the manufacturing method and created that
business that was followed by actually penicillin. So during World
War Two, Lily was commissioned as one of the manufacturers
for antibiotics for the army and we from there then
(10:22):
iterated for forty years antibiotics, including still some that are
used today like bankamasin, which is the last line of
defense for the worst infections. Prozac we're famous for, which
has really brought modern psychiatry into the fold.
Speaker 4 (10:37):
And of course, now manjar O.
Speaker 1 (10:39):
And zep bound, what are the human problems you're working
on in the future. Alzheimer's, I assume is one of them.
Speaker 3 (10:44):
Absolutely, Yeah, So we think about our company. Of course,
we use scientific methods to create medicines to solve tough problems.
We're not really interested in niche problems. We think we're
here because we're a big company to do hard problems
that are scalable. That's sort of where makes our business work,
but also is the most human impact. So we select
these diseases that are common and tough. So you mentioned Alzheimer's,
(11:06):
NERD degenerative conditions or the most frightening conditions. Most people
think about Parkinson's als Alzheimer's and the science. We've been
investing there for thirty years. We just launched our first
medicine and so now we're getting revenue after thirty years
on that project, and we're working on a prevention study
for that same medicine, which could really transform Alzheimer's. We
think other NERD to generic conditions like Parkinson's, als, et cetera,
(11:28):
are becoming more tractable with science, and you'll see us
invest heavily in that area going forward.
Speaker 1 (11:32):
Are you concerned about the new administration coming into power?
Have you met with President electromp talk about your issues.
Speaker 3 (11:38):
Healthcare is always a topic and so then our role
in it and medicine affordability is a key area.
Speaker 4 (11:45):
I think everyone would like.
Speaker 3 (11:47):
The US have a strong biopharma industry that have beens
amazing medicines like setbound and makes them here like Lily does.
But at the same time, we want our things to
be cheap and.
Speaker 4 (11:56):
Accessible to all.
Speaker 3 (11:57):
Okay, that's hard to solve for all those things, but
we can make progress. Like one example is we were
known for the insulin pricing challenges we had, and insulin
was overpriced in the US, according to the critics, and
we were able to bring that price down. I think
there are solutions and by engaging we can find them.
Speaker 2 (12:15):
Have you met with anybody in the new administration yet?
Speaker 4 (12:17):
Yeah?
Speaker 3 (12:18):
I think it was reported last week we had a
dinner down in Florida.
Speaker 2 (12:21):
How was that, Like, did they serve up fattening food
or they don't do that with you?
Speaker 3 (12:25):
Probably shouldn't say too much about it, but it was
all you could imagine and a little bit more.
Speaker 4 (12:31):
Yeah.
Speaker 1 (12:34):
Well, let's talk about your own background. Where were you born?
Speaker 4 (12:38):
Yeah?
Speaker 3 (12:38):
I was born in Bloomington, Indiana, So who's your by birth?
But my dad was a grad student at IU at
the time, and we quickly left.
Speaker 4 (12:44):
And moved to California.
Speaker 3 (12:45):
My mom was from California and I grew up in
the Bay Area and then followed in their footsteps and
went to Purdue University back in Indiana.
Speaker 2 (12:52):
And what did you study there?
Speaker 3 (12:54):
So I started studying business and engineering, ended up with
a degree industrial management, which combines those two. I went
to work for IBM in New York. I joined the
stock wasn't an all time hime when I left, it
was an all time low. They had a tough time
in the early nineties.
Speaker 2 (13:08):
She went to join ELI Lilly in what year?
Speaker 3 (13:10):
So I left IBM to follow my girlfriend who's now
my wife, who was going to medical school at Indiana University.
So again back to Indiana, and I needed somebody to
do there, so I decided to enroll in their MBA
program and I got an MBA. Of course, medicine's a
four year degree, NBA's two. So I still needed somebody
to do in Indiana, so I joined Lily.
Speaker 2 (13:30):
What was your position at the beginning?
Speaker 3 (13:31):
Yeah, I was in the department that looked at M
and A transactions in the finance and Business Development group
and the great introduction to.
Speaker 1 (13:40):
The Did you ever say I'm going to be the
CEO someday or something like that?
Speaker 4 (13:43):
Not?
Speaker 3 (13:43):
Then I actually really was thinking I'll be here for
two years and then we'll be off to Chicago or
San Francisco and do something different.
Speaker 4 (13:50):
But I fell in love with the company.
Speaker 3 (13:52):
I mean, it's an amazing place. It's a very humanistic culture,
but yet very rigorous and scientific, so it's demanding smart people,
but people are nice.
Speaker 4 (14:02):
To each other.
Speaker 3 (14:03):
It's the Midwest, and I fell in love with the mission,
which is what could be better than making medicine for people.
I worked on a medicine to collaborate and bring into
the company for diabetes, and right as I was leaving
that job, my mother was diagnosed with diabetes and she
was put on that medicine, and so the sort of
the point of what we do just became super salient
(14:25):
for me, and I said, this is not a bad
way to spend my time.
Speaker 4 (14:28):
And I said to my wife, let's stay here.
Speaker 1 (14:30):
When did you realize that you were on a track
to be the CEO?
Speaker 2 (14:33):
Was it five years post? For later?
Speaker 4 (14:36):
Well?
Speaker 3 (14:36):
So I worked in that job, and then I had
some jobs running markets. I ran our Canadian business and
then went to China for two and a half years
and ran our Chinese business. And I was suddenly called
back from China by the CEO who was a new CEO,
and he said you need to come run our US business.
And said, John, do't you want me to finish the job?
He said, you need to come back. I think that
(14:57):
was the point where I was sort of being cultivated
for big something bigger.
Speaker 2 (15:01):
You now have three children, Yeah, for a while.
Speaker 4 (15:04):
I've had three children. Yea, Yes, they're young adults.
Speaker 1 (15:09):
Now, okay, all right, But are any of them interested
in weight reduction programs or things like.
Speaker 2 (15:15):
That or not really?
Speaker 3 (15:16):
Well, so my son, he's an AI consultant, so not
so much. My daughter is actually getting master's in sell
biology and interested in med school, so she's thinking about
medicine and medical science. And we talk a lot about
the weight loss drugs. And my youngest son is a
geology student that produe, so we'll see what he does.
Speaker 1 (15:34):
So what do you do for relaxation to stay in shape?
You're not on one of these drugs? I think because
you look very fit and exercise a lot.
Speaker 3 (15:43):
Yeah I'm not, but I would never hesitate to be
on one if I needed it. But the best medicine
is prevention, and so you know, paying attention to exercise
is something I've always cared about It's a way I
reduce stress too. So I loved running, and now I
don't run anymore, but I do other things like hiking.
I love backcountry skiing and the outdoors, play golf. Being
(16:05):
outside is where I find both fitness and peace.
Speaker 1 (16:09):
You've had an astounding success at ELI, Lelly. Suppose a
president of the United States said you should be the
secretary of HHS or something like that, what would you say.
Speaker 3 (16:18):
You know, the company, as you've pointed out graciously, is
really doing well, but you know, we really have a
strong desire to do even more, and we're just at
the beginning of this weight loss story. You know, right
now there's six or seven million Americans who are taking
these medicines. There are one hundred and ten million with obesity.
We need to build more plants and develop more data,
(16:38):
get in better insurance coverage, and then there's the whole
world to cover. It's projected in five years there'll be
a billion people on the planet who have obesity, and
it's going to become a much bigger problem in the
developing world than it ever has been in America.
Speaker 1 (16:51):
When you have drugs that are very, very popular that
you often have people that make counterfeit or copycat drugs.
What about for this do you have to worry about
counterfeit drugs coming in that are trying to say the
same thing.
Speaker 3 (17:03):
It's a terrible problem right now, actually, because I think
consumers don't really know.
Speaker 4 (17:07):
The dangers or the difference.
Speaker 3 (17:10):
Today, the FDA and the government has allowed this to
sort of grow.
Speaker 4 (17:15):
And of course a weight.
Speaker 3 (17:16):
Loss medication that's effected would be a popular thing for
people to go around the healthcare system and seek treatment
on their own. But the data we have is that
eighty percent of these medicines are coming out of China
from unapproved and unregulated sources. We recently with Borders and
Customs seized a big batch that was shipped in dog food.
(17:37):
People then reformulate them and sell them locally in medspas
and other outfits. But you really don't know what's in
that vile We buy them and test them, we find bacteria,
plant material, viruses, fungus.
Speaker 4 (17:49):
You do not want to be using.
Speaker 1 (17:51):
But how much more expensive are your drugs than the
counterfeit ones? In other words, if somebody wants to use
your product zep bound, how much does it cost a month?
Speaker 3 (18:02):
You can buy zepbound direct from Lily for three ninety
nine for the starter do.
Speaker 2 (18:05):
Eight dollars and ninety nine cents.
Speaker 3 (18:07):
No, this is a valuable innovation, David. Three hundred and
ninety nine. Three hundred and ninety nine dollars a month,
all right, which is about one hundred dollars a week.
And I know that's a sacrifice for many, but that's
without insurance. With insurance, most people pay twenty five dollars
a month. So that's the importance of insurance. That's why
we buy insurance to shield this from our health costs.
(18:29):
The online ones, you know, are as cheap as one
hundred dollars. But these are companies that want all the
benefits of being a drug company but bear none other responsibilities.
Speaker 2 (18:37):
So let's talk about the company today. How many employees
do you have?
Speaker 4 (18:41):
Forty four thousand.
Speaker 1 (18:42):
And you're headquartered in Indianapolis, yes, correct? And where do
you manufacture your drugs? Are the most in the US
or mostly overseas.
Speaker 3 (18:50):
Mostly in the US, a large majority in Europe as well,
So those are our two big bases for production. And
in the US we're building lots of plants right now,
mostly to support zep bound.
Speaker 4 (19:00):
I'm Mancharro.
Speaker 1 (19:00):
When did you all realize this is so transformative that
you're going to become the most valuable pharmaceutical company in
the world by a factor of four or five times.
Speaker 3 (19:08):
It's hard to know exactly what the scale of something is,
but I will The story of churs epetit or zepbound
for me is this. In twenty sixteen, I was named
as the incoming CEO. In that fall, one of our
scientists in the diabetes group called me about some early
results they were receiving from singaporean site we had that
(19:30):
was doing a phase one study with churzepetite, the ingredient
and zepbound, and we had to stop the study because
people were losing too much weight to stay in it.
And at first this was seen as like an alarming thing,
but of course we began to process that is, wait
a minute, this could be something very special. So we
sped to the next stage of development, phase two, where
(19:51):
you try to show safety and efficacy in a bigger study.
And I remember, in a kind of a moment, I
was showing my daughter around a college. We were at
cal Berkeley, standing outside of the Lawrence Hall of Science,
and I got a phone call and the team just
got off the plane, got the results and showed that
people were losing over twenty percent body weight in a
(20:12):
longer study that was in April of eighteen.
Speaker 4 (20:15):
We disclosed those results later.
Speaker 3 (20:17):
That year, and you could probably argue a lot of
the run up in Lily was just execution from that
moment forward.
Speaker 2 (20:24):
Did you take the credit for this? Are you the
person responsible for this happening or not?
Speaker 3 (20:27):
Of course, as a CEO of a role in all this,
but it would be way overstating the role if I
took credit. So the credit goes to the scientists to
begin with. We have a lot of incumbent capabilities, like
how do you take a protein like GLP one, which
in the natural body lasts only a few seconds and
make it into a week long injection. So that's a
pharmacology exercise that's difficult, and we have people who can
(20:49):
do that, and we have people who do the clinical
trials and everything else to see the opportunity and go
for it. We have people who make it every day
twenty four to seven. We run our factories. So it's
a giant team sport.
Speaker 1 (20:59):
Where do you want to take your company now you
can't find any drug it's going to be more successful
than one you have is you're just going to keep
promoting this drug.
Speaker 3 (21:07):
First of all, within the obesity metabolic health space, I
think there's two things I'm very excited about. One is
we have tzepetide modros that found on the market. We
have eleven other pipeline projects aimed at the same problem
but in different ways.
Speaker 4 (21:22):
So we have a triple.
Speaker 3 (21:23):
Acting medicine that's in phase three for those that have
even higher body weight or more severe health problems. We
have the Oral Project, nine others Beyond that, we think
this is going to be a very large segment with
many different types of medicines for different conditions and different
situations people might find themselves in.
Speaker 4 (21:41):
We're going to exploit that fully.
Speaker 3 (21:43):
The second thing is we've talked a lot about like
cardivascer health, diabetes, these conditions that wants to think about
with being overweight. But these medicines, we think and we
aim to prove, can be useful for other things we
don't think about connected to weight. These are often called
anti hedonic, so they are reducing that desire cycle. So
(22:03):
next year you'll see Lily start large studies and alcohol
abuse and nicotine use even in drug abuse. And then
beyond that, David, we need to make important medicines for
the long haul or old company. We plan to be
here another one hundred and fifty years plus. And I
mentioned my excitement about brain health. I think that's really
the next frontier.
Speaker 1 (22:21):
Thanks for listening to hear more of my interviews. You
can subscribe and download my podcast on Spotify, Apple, or
wherever you listen
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