The rapidly increasing demand for a category of weight reduction and diabetes drugs has Eli Lilly to latest heights last yr. But the pharmaceutical company has way more plans to make use of this hard-won success, outgoing CFO Anat Ashkenazi told CNBC.
Ashkenazi becomes latest CFO of alphabet on July 31, was critical in managing the unexpected surge in sales and the wave of investor optimism stemming from Eli Lilly's diabetes injection Mounjaro and recently launched obesity drug Zepbound. Ashkenazi took over as CFO at Eli Lilly in 2021 after working on the pharmaceutical giant for about twenty years. She was named to CNBC's inaugural Changemakers list earlier this yr.
“You have to really study the business well and know it inside and out and understand the industry,” she said in an interview with CNBC before announcing her departure. “Only by understanding the entire system can we navigate it well and add value… That's my role as CFO.”
Her tenure was not without challenges: Eli Lilly and rival Novo Nordisk Both struggled to provide large enough quantities of their drugs to fulfill unprecedented demand, resulting in a nationwide shortage of those drugs.
Their weekly injections belong to a category of medicine called GLP-1 agonists, which mimic certain hormones produced within the gut to suppress an individual's appetite and regulate their blood sugar. Some analysts expect the marketplace for these drugs 100 billion US dollars until the top of the last decade.
Eli Lilly's sales boom has enabled the corporate to speculate heavily in expanding production, which could ultimately put more medicines into the hands of patients, Ashkenazi said.
“As we start selling products and generate the revenue and cash flow associated with that sale,” the corporate desires to “direct that cash flow back into the business to invest in those manufacturing facilities,” she said.
Eli Lilly doesn’t expect to maintain up with demand, Ashkenazi said at a conference in March. But the pharmaceutical giant has made encouraging progress to date.
Ashkenazi said Eli Lilly has several manufacturing facilities either under construction or within the “build-out phase,” including two in North Carolina, two in Indiana, one in Ireland and one in Germany. The company also recently acquired a seventh site from Nexus Pharmaceuticals. Eli Lilly also announced late last month that it could invest a further $5.3 billion in its Lebanon, Indiana, manufacturing facility.
These facilities complement the corporate's “existing, very large” manufacturing presence within the U.S. and Europe, Ashkenazi said. Since 2020, Eli Lilly has spent greater than $18 billion to construct, expand and buy manufacturing facilities in those regions, the corporate said in May.
Ashkenazi noted that Eli Lilly can also be addressing one other barrier to patient access: limited insurance coverage for weight-loss drugs within the U.S.
Some employers and other health insurers are still hesitant to cover GLP-1 weight reduction drugs because they’re too expensive and will put a big strain on their budget. Insurers also produce other questions, akin to how long patients actually take the treatments.
However, Ashkenazi said Zepbound's coverage by U.S. private insurers is improving. As of April 1, private coverage is about 67%. Eli Lilly is working to offer access to the remaining patients, she noted.
“It’s not enough to have a highly effective, safe drug that can really transform people’s healthcare – you also have to make it accessible,” Ashkenazi said.
She also hopes that reimbursement for weight-loss drugs will eventually be expanded for patients enrolled in the federal government's Medicare program as Eli Lilly and other pharmaceutical firms exhibit their ability to treat a big selection of obesity-related diseases.
Eli Lilly is studying tirzepatide, the energetic ingredient in Zepbound and Mounjaro, in patients with obesity and fatty liver disease, obstructive sleep apnea, chronic kidney disease and heart failure, in addition to other health conditions.
Under latest guidelines issued in March, Medicare Part D plans can cover obesity treatments that receive regulatory approval for a further health profit. Medicare prescription drug plans, administered by private insurers and generally known as Part D, currently cannot cover these drugs for weight reduction alone.
A much bigger problem, in line with Ashkenazi, is the long-standing misconception that obesity is a “lifestyle choice” and never a chronic disease.
Eli Lilly is trying to vary that.
“Our goal is to make sure that society, the health care system and the patients themselves actually recognize and understand that this is a chronic disease … and therefore should be treated as such,” Ashkenazi said.
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