Eli Lilly’s Success and Future Plans
Skyrocketing demand for weight loss and diabetes treatments has propelled Eli Lilly to new heights in the past year. According to outgoing Chief Financial Officer Anat Ashkenazi, the drugmaker is not resting on its laurels but has ambitious plans for the future.
Ashkenazi, who will assume the role of CFO at Alphabet on July 31, played a crucial role in managing the surge in revenue and investor confidence brought about by Eli Lilly’s diabetes injection Mounjaro and its recently launched obesity drug Zepbound. She emphasized the importance of understanding the business inside out and navigating the industry effectively to bring value as CFO.
While Eli Lilly has experienced significant success, it has also faced challenges. Along with rival Novo Nordisk, the company has struggled to manufacture enough supply of their treatments to meet the unprecedented demand, resulting in nationwide shortages. The drugs in question are weekly injections known as GLP-1 agonists, which mimic gut hormones to regulate blood sugar and suppress appetite. Analysts predict that the market for these drugs could reach $100 billion by the end of the decade.
To address supply shortages, Eli Lilly has invested heavily in scaling up manufacturing. The company aims to funnel revenue back into the business to expand manufacturing facilities and ensure more patients have access to the medication. While it may not be able to match demand this year or even in 2025, Eli Lilly has made encouraging progress thus far.
The pharmaceutical giant has several manufacturing sites either under construction or ramping up production. These include locations in North Carolina, Indiana, Ireland, and Germany, as well as a recently acquired site from Nexus Pharmaceuticals. Additionally, Eli Lilly plans to invest $5.3 billion in its manufacturing plant in Lebanon, Indiana. These facilities complement the company’s existing manufacturing footprint across the U.S. and Europe, which it has expanded through investments totaling over $18 billion since 2020.
In addition to addressing supply shortages, Eli Lilly is also working to overcome barriers to patient access, particularly limited insurance coverage for weight loss drugs in the U.S. Some employers and health plans are hesitant to cover GLP-1s due to their high costs, while insurers have concerns about treatment duration. However, coverage of Zepbound by commercial insurers in the U.S. is improving, with around 67% commercial coverage as of April 1. Eli Lilly is actively working to increase access for the remaining patients.
Ashkenazi emphasized the importance of making highly efficacious and safe drugs accessible to patients. She hopes that coverage for weight loss drugs will also expand under the federal Medicare program as Eli Lilly and other drugmakers demonstrate their ability to treat various obesity-related conditions. The company is currently studying tirzepatide, the active ingredient in Zepbound and Mounjaro, in patients with obesity and other health conditions such as fatty liver disease, obstructive sleep apnea, chronic kidney disease, and heart failure.
One significant challenge Eli Lilly faces is the persistent misconception that obesity is solely a lifestyle choice rather than a chronic disease. Ashkenazi believes it is crucial to change this perception and ensure that society, the healthcare system, and patients themselves recognize obesity as a chronic disease deserving of appropriate treatment.
In conclusion, Eli Lilly’s success in the weight loss and diabetes treatment market has brought both opportunities and challenges. The company is committed to expanding manufacturing capabilities to meet demand and investing in research to address obesity-related conditions. Additionally, efforts are underway to improve insurance coverage and change perceptions about obesity as a chronic disease. Eli Lilly’s dedication to advancing patient care and access to medication sets the stage for continued growth and innovation in the pharmaceutical industry.
