Bloomberg Audio Studios, podcasts, radio news. All right, let's go over now to Washington, because David Rubinstein is just about to begin speaking with Eli Lilly's CEO, and this is taking place at the Economic Club of Washington. We're going to check in with them as a begin to speak.
Let's listen in.
Right, I don't know one's paid more than me, but yeah, well he shouldn't be paid more than you. But okay, so let's talk about these phenomenon that's changed the world to some extent. Which is the anti obesity drug. Now, to make sure everybody's on the same page links, what is the name of your anti obesit drug?
Okay, so the name is zep bound. The active ingredients called their zeppatide.
So, by the way, who comes up with these names? Where do you raise names?
Not me, David, not me.
No, it's it's more complicated than we want to talk about here. But we can't have names that are similar to each other because doctors make prescribing ers. We can't have names that make claims about what the drug does, and we can't have names that only work in English.
So we end up with these strange sounding names.
Ok So, as I understand that number of years ago you can tell us how many somebody was working on a diabetes related drug and that drug ultimately got.
To be approved by the FDA.
But somebody discovered that actually helps you reduce weight. When was that discovered and was that ever the intention when the drug was being developed?
Yeah, pretty early on.
So we launched the first GLP one medication in the world in two thousand and five.
It was called extend the Tide.
It was a twice daily injection and it was indicated for people with diabetes. Like a lot of things in medicine, there's like iterative steps of improvement that occurred.
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 weight loss. One big improvement was to make them weekly. That's a convenience benefit, but even more important, the action of the 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 it weekly, it was flatter and we could dose higher to see more weight loss. So that was sort of an accidental breakthrough of trying to make a more convenient form.
So now there's another company that is sort of in the same business, Novode nord Is Yes, which is in Denmark, and they have a similar product, and they have a product that does the same thing. One is for o antiobesity and one is for diabetes and correct is there really any difference between the two of your drugs In terms of the drugs, there are.
There's no difference really between the name the drug that's named for diabetes versus name for Obesit for either company. We do that for insurance reasons. We could talk about. But trezepetide is the latest version. It has two modes of action. So and by the way, we're having a conversation about weight loss medications. Right after you just ate lunch, and I know that that may cost some anxiety, but 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 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 is 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 in boosting signals that you should absorb nutrients that you've consumed, and 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.
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.
Yeah, well, so it tells your body your 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.
It does other things too, 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 we 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.
I don't want to confuse people, but there are four different names that people should know for these drugs. Now you have an anti BCD drug which is called what zep bound bound, and then you have a diabetes drug which is.
Called Manjaro, same medicine, different.
Name, different names.
And then Novo Nordis Nordisk has two drugs.
Their names are Ozempic and we go vy All.
Both are semiglue tide, same medicine, two different names.
But the confusing thing is Ozempic is like it's like a generic name. People say, I'm on ozempic. Ozempic is not the anti obesity drug, it's the diabetes ibtes drug.
So why is it? Why don't people get the right names?
Should we blame the media? I don't know. It was the first.
Drug that began to be used off label for obesity, and again it was a flat once a week, and people discovered if I just give take more than prescribed, I can lose more weight. And then Novo did a study credit to them that showed clinically that people lose clin meaningful.
Weight on their medicine.
You lose you know, thirteen to fifteen percent of your body weight. On ours, you lose you know, twenty to twenty six percent.
Well, let me go through that again, because there was a study. It was just came out a couple of days ago. I think that said one on one comparing the two. Your drug anti obese drug loses weight more rapidly for people than the other product.
Is that rapidly? And more so?
Forty seven percent more so After a year and a half, roughly, people on our drug loss seventeen more.
Pounds then on we go.
I know 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 did that happen when we went to no fat fruit? Or when did all of a sudden we become so obese?
Yeah, if you look at the epidemiology charts. It really seems to have started in the sixties growth in overweight and obesit in the country, and really excel righted in the eighties and nineties.
So what are the reasons?
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.
All right, So back to the drug.
When you realized it 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.
No.
No.
As of last year, we zetbound launched It's for weight loss for people who have high body weight.
And do insurance companies reimburse people for the cost of these drugs?
Some do, more should so as of today, the federal government actually has a prohibition on reimbursing any of these drugs, which is a problem I think, although the Biden administration just advanced rulemaking to change that. That's good news and we hope the next administration will continue that process. Seventeen states in their Medicaid program have decided to step outside
of that federal rule and reimburse them anyway. So California just started, for instance, Massachusetts, other states and then about sixty percent of employers have some form of reimbursement.
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 you have that they have to reimburse you for.
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 do, people have different motives and incentives.
As you know, we re enroll in commercial assurance every year. So unfortunately, I don't think insurance companies have your best interest at heart. Maybe that's tough to say, but they really think about it in one year increments and the benefits surely will play out over a longer period of time. Maybe your employer has a stronger interest in your long term health. That's probably why many have stepped forward.
And then evidence.
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.
So to take this medicine, you have to inject yourself, correct.
Us, Yeah, well why not just go to a pill?
A great idea. Yeah, we're working on that.
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 or eily. 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 one only it's a single acting It's not going to be as good as yours appetiteer as that found be about as good as oozempic, we hope, and this would be a once daily pill.
That'll be a fantastic innovation.
So when you have drugs that are very very popular that you often have people that make counterfeit or copycat drugs. We see them on television all the time advertise, right, what about for this do you have to worry about counterfeit drugs coming in that are trying to say the same thing.
It's a terrible problem right now, actually, because I think consumers don't really know.
The dangers or the difference.
Today, the FDA and the government has allowed this to sort of grow. And of course a weight loss medication that's effective would be a popular thing for people to go around the healthier 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. People then reformulate them and sell them locally in meds and other outfits. But you really don't know what's in that bile. We buy them and test them, we find bacteria, plant material, viruses, fungus.
You do not want to be using.
See, But these counterfeit drugs are not like they're cheaper. They're cheaper because they don't have the same ingredients I assume. 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?
You can buy zet bound direct from Lily for three ninety nine for the starter dose.
Eight dollars and ninety nine cents.
No, this is a valuable innovation, David.
Three hundred ninety nine, three dred 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 us from our health costs. 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 of the responsibilities.
But you, for example, you have this underpatent for how many years? In other words, our system is you have a drug, you have twenty years from invention. Yeah, from events. So how many more years do you have before it goes generic?
Until mid twenty thirties? Yeah, so another ten eleven years.
Okay, And is this the most popular drug that Eli Lilly has ever had?
Should be by the end of the year, Yeah, break that record and go beyond probably right.
Some people say that if you go on this drug, you have side effects that are not completely desirable.
Is that true?
So yeah, there's two things to all drugs that work have side effects and sometimes on tour 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 trade. We started a low dose, We recommend a low dose and go up slowly. Almost everybody stays on the drug and goes through that and by the third or fourth really don't have any effects any more
of that at all. There are a few people where we don't have data or we are cautious. One is women who could become pregnant. Neither of the medications have information about that. And then there's a condition called pancreatitis, which is sort of an inflamed pancreas. We worry about that with these drugs. So if you've had a history that, don't use them.
Let's suppose you take the drug and say, I've lost weight, I'm very happy with my body.
Now I'm going to get off the drug.
Some people say that there are it's very difficult to not regain the weight.
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. So we can all try that. 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 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 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.
So we do put fluoride in the water now, or at least for the time being. What about putting this in the water and just solve all the problems, Well.
We couldn't. We shouldn't put it in the water.
People should use it under the guidance of their doctors. But we should have broad coverage, just like we think it would be crazy if we didn't have antihypertensive medications available to all adults in America.
Or anti diabetes medications.
Obesity causes two hundred and thirty six adult diseases, and we know it's a precursor for these things. Why not try to prevent it. We have a stigma in our country and in many other countries that this is sort of some personal failing. But many of us we're here because our ancestors can served energy very effectively. That's how
they survive famines and floods and so forth. So we're pre determined to want to keep weight on by our genetic background, and we in a world of plenty of abundance, we need to probably have some medical help sometimes.
So what about over the counter. Why can't this just be an over the counter drug. You're going just go buy it like an AskMen or something.
Yeah. I think we'll try to work on that through time.
The oral pill we have is a great candada for that, because that's much easier to dispense in that kind of pharmacy setting, and we'll need to get more evidence that it's broadly safe. Here you don't have the doctors supervision piece, so we would want to make sure, particularly develop data and pregnant women in other settings to make sure that that could be safely done. But we would have an interest in expanding access for this medication and reducing the price.
So how many times a day do you going to ask about this drug today?
Hour on the hour?
Yeah? Many, yeah, dozens. Yeah.
And it's a pleasure to talk about it because it's such a breakthrough.
It can change our country.
But nobody really expected that to happen. As you point out, sometimes things happen unexpectedly. So let's talk about some other things for a while. Let's talk about Eli Lilly itself. When was this company started?
Yeah, eighteen seventy six, so started by a Colonel Eli Lilly who served in the Civil War. He was a pharmacist by training, led 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.
You may know, you know, your student of history, that more people died after injury than from their injury due to medical care. And at the time this was an air of snake oil salesman. Medicine wasn't very advanced, but what we thought of medicine often was back to the counterfeiting discussion, you know, made up things, harmful ingredients. So he started a company with a pledge to say everything that's in this is on the label.
If it's in there, you know about it.
Transparency, 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 medicine now. So thank Willow bark into aspirin or pancreases of cows into insulin.
That's what the company really was built on.
How long did he live after he started the company.
About twenty five years and he handed the keys to his son JK. Lilly, who handed the keys to his two sons, also named Eli and JK. That's a little odd, but for three generations it was a family run business.
Yeah, and the family is not an owner now not well.
So the legacy wealth of the family is our largest shareholder, the Lily Endowment.
So that only endowment is now probably the biggest foundation in the United States. Eighty billion dollars of assets Onner Management, right, yep.
And they have one asset essentially, which is okay.
And they're your biggest shareholder. Yeah, so okay.
So when Eli Lilly evolved over the years in the twentieth century, what were its big products?
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 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.
And Prozac we're famous for.
Which really brought modern psychiatry into the fold. And of course now Manjarro and zep.
Bound And what about the future your work? What are the human problems you're working on on the future. Alzheimer's, I assume is one of them.
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 it 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, 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 degenerfic conditions like Parkinson's als et cetera, are becoming more tractable with science, and you'll see us
invest heavily in that area going forward. Pain chronic pain another area we're very interested in.
So let's talk about the company today. How many employees do you have? Forty four thousand and you're.
Headquartered in Indianapolis?
Yes? Correct?
And where do you manufacture your drugs? Are they most in the US or mostly overseas?
Mostly in the US so, though a large majority in Europe as well. So those are two big bases for production.
And in the US.
We're building lots of plants right now, mostly to support zep Bound and Manjarro, but.
Spreading our footprint.
So when did your stock went up?
As I said, about ten times, I mean, 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?
You know, as you know from running companies, David, it's hard to know exactly what the scale of something is. But I will the story of zepidite Zebound 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. It was doing a study with chur zepetite, the ingredient and zep bound 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 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 to college as 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 longer study.
That was in April of eighteen.
We disclosed those results later that year, and you could probably argue a lot of the run up in Lily was just execution from that moment forward because we had a pretty big study with some great results.
We didn't know it would be this much, but we knew it was special.
And you decided when you were overseeing this that we should continue this.
We started building factories. We invested five to six billion dollars in a phase three program.
If I had been moved our ships, so if I had been at your job, I would have taken credit for all of this. So did you take the credit for this or you're the person responsible for this happening or not?
I mean, of course, as a CEO, you have a role in all this, but it would be way overstating the role if I took credit. You know, first of all, we're an old company and have people have worked there for thirty years on this problem, So the credit goes to the scientists to begin with. Secondly, 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 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. Just like the legacy of our success on my watch will go beyond my tenure. I'm inheriting some of that for my presence.
Is there one scientist that somebody can point to as the person who is responsible.
For this revolution?
Well, so there's four scientists that Lilly who invented this drug, and we celebrate them. By the way, three are immigrants to this country. That's an interesting conversation, and they live in Indianapolis, and so it's sometimes pointed out that the most valuable biotech company in the world is based in Indiana, and that's a surprising.
Fact to people.
But people come from all over the world that work at our site to create amazing medicines.
So the way the pharmaceutical industry works, I understand is you look at lots of potential problems that need to be solved, You work with scientists to come up with the drug, and so forth, you test them. What is a typical period of time between you you say we're going to solve a problem with finding a drug and then you actually get somebody to the market.
How long does that typically take?
So your better case scenario would be eight to twelve years. As I mentioned in Alzheimer's, we actually spent thirty four years before we launch a drug.
So this is a long, long.
Cycle time or eighth to twelve But how many drugs do you work on that just you say it's not going to work and you just move forward with other ones. There's it a ninety percent failure rate and ten percent success.
Rate, So it's about one hundred to one from idea to market. So for one hundred ideas you might get one product, it's about ten to one from starting clinical studies, so you have about ninety percent failure rate from phase one forwarding.
So some people say that drug companies don't really produce that many drugs anymore. They're more marketing organizations that they go out and find smaller companies that are producing these drugs and then they buy them up. Is that where you get most of your new drugs from? Or do you do development internal yourself?
We're maybe a bit of an exception, we're about two thirds internal. But even that, Steban, you know, what is the development where so is it the drugs origin or is it the studies and the expertise at it along the way. So we do buy small companies, we also collaborate with them. We take what they worked on and we carry it forward. Is that extern I don't think so. I think we added a lot of value there too.
But we have a big scientific base. Lily employees almost four thousand PhDs just for reference, Harvard employees like two thousand.
So we have a huge scientific base to create new medicines.
It's a big part of our strategy.
And in the pharmaceutical world, the image is not always so wonderful with the public. I'm sure you're aware of this that people say pharmaceutical companies, drug companies, they will call them, are charged too much and so forth. How do you respond to the idea that drug companies are charging too much? And very often people United States say I'm going to cross the border of Canada get the same drug for a lower price.
Yeah, thank you for asking that.
You know, obviously it's something we want to change and fix because what we think we do is pretty valuable. First problem is for artifact of history and how healthcare insurance evolved in this country, people are largely shielded from surgery costs.
And hospital costs.
About three percent of those total costs in our country are paid out of pocket by consumers, but for medicines it's closer to twenty percent. So people think the medicines are a larger part of the health bill because they're exposed to more of that versus services. That's again a historic thing. We advocate for better insurance coverage, lower out of pocket costs for medications. The second thing is it means to be foreign countries. It is true our prices
are lower in those places. We would like to correct that as well. I mean, our idea is that basically the cost of a medicine is the cost of the R and D to produce it, more so than the manufacturing.
Obviously, manufacturing costs is similar everywhere.
And right now there is an imbalance and who covers that R and D cost. We should seek to correct that. But the answer isn't just lower us to Canada's pricing. We wouldn't have a pharmaceutical industry if we did that. They don't pay for any of the R and D costs. We have to raise develop countries what they pay, and we can lower the US. I think that's a policy argument we'll hear about soon with the new administration and what we're happy to engage, but we need to do both.
At the same time.
So today the pharmaceutical industry is most concerned about what in Washington. You're in Washington, I assume for a meeting of the Business Roundtable later on other things. But what are you most concerned about? Are you concerned about the new administration coming into power. Have you met with President Electrum talk about your issues? Have you met with members of Congress to talk about your issues? What are your big issues you care about in Washington?
Well, we have general issues for American business, like tax reform, which is a big topic going to be for next year, and the regulatory situation, which I think has evolved for US in our industry in a negative way in the last four years. So those are hot topics that a
general sense. Healthcare is always a topic and so then our role in it, and medicine affordability is a key area one, you know, But I think my experience, having done this for eight years, is there's often more common ground than you'd think just reading the newspapers.
I think everyone would like.
The US have a strong biofarmer industry that had been some amazing medicines like setbound and makes them here like Lily does. But at the same time, we want our things to be cheap and accessible to all. 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. Why by compressing basically the middleman and what they get, and then working with medicare to cap the cost of insulin, which we supported at thirty five dollars a month. I think there are solutions and by engaging we can find them, and we're happy to do that with the new administration or the current one of these.
Have you met with anybody in the new administration yet?
Yeah?
I think it was reported last week we had a dinner down in Florida.
How was that, Like, did they serve up fattening food or they don't do that with you.
Probably shouldn't say too much about it, but it was all you could imagine and a little bit more.
Yeah, Well, let's talk about your own background.
Where where were you born?
Yeah?
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 and moved to California. 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. So sort of like a like a bad penny, keep returning.
To that state.
So at the Kendy Center this weekend, we honored the Grateful Dad. You don't look like you're a person who's a grateful dead type person from so we were.
You were in the Bay.
Area, but you didn't get caught up in the grateful dead, right.
I was a little younger than that that era, Okay, and I left Yeah, maybe in time to escape.
That, right. So you went back to college where your father had gone to.
School, yeah, and my mother yeah, okay, Purdue, Yeah, And what did you study there?
So I started studying business and engineering, ended up with a degree industrial management which combines those two, and then went to work for IBM in New York, which I joined. It was 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.
Well you fixed that or turned it around?
Yeah?
Maybe? Yeah?
Yeah, So all right, so you went to join Eli Lilly in what year?
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.
Okay, and what would you joined? What did you What was your position at the beginning?
Yeah, I was in the department that looked at M and A transactions in the finance and business development group and a great introduction to the.
Did you ever say I'm going to be the CEO someday or something like that?
Not 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.
But I fell in love with the company.
I mean, it's a 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 to each other.
It's a Midwest and I fell in love with the mission, which is what could be better than making medicine for people? And I had an experience actually a few years in which, if I could share, 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, you know, the sort of the point of what we
do just became super salient for me. And I said, this is not a bad way to spend my time. And I said to my wife, let's stay here in Indiana and she said really, and.
We ended up staying.
Yeah, you realized that you were on a track to be the CEO? Was it?
Ivy years post? Much later? Well?
So I worked in that job, and then I had some jobs running markets. I ran our Canadian business, and I 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 I said, yeah, I'm happy to do that at some point, but we were really in the middle of a growth phase there. We weren't done with the agenda I had set out and he had agreed to. I said, John, don't you want me to finish the job? He said, you need to come back. And I think that was the point where I was sort of being cultivated for big something bigger.
So did you beat South some other person to get the job or no?
I mean it's we've mostly hired people from within the company. There were other candidates, I'm sure when my predecessor retired and the board considered me, and I was lucky enough.
To get it.
Okay, so you now have three children.
Yeah, for a while, I've had three children.
Yeah, yes, they're young adults now, okay, yeah, all right, but are any of them interested in weight reduction programs or things like that? Really?
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 Purdue, so we'll see what he does.
And 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 of cuation.
Yeah, 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 reduced stress too. So I loved running. Now I don't run anymore, but I do other things.
I like hiking, I love backcountry skiing and the outdoors, play golf. Being outside is where I find both fitness and peace. But then you know, also, I think it's important to watch what you eat. I think I've turned fifty seven years ago and we really needed to change what we That's what my wife and I decided, So we did, and it's I think been helpful to keep what do you eat?
What do you eat?
Things we recognize as food? Yeah, so basically things that haven't been through factories, and are you know you recognize that a farmer.
Micro we'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.
I'm busy right now. I've never actually thought about that. I saw that on your question list. You served in the government. Maybe I could get some advice.
I think you even advice for me because we didn't do too well. But but all right, so you're happy when you're you're so young.
There's a lot to do, and 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, and we need to build more plants and develop more data, 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, partly because the rate of growth of obesity in India and China is much faster than we experienced, and populations that are non Caucasians, particularly South Asians, appear to be much more susceptible to
chronic disease at lower weights. So we have a lot of work to do to make the biggest impact we can yew.
The greatest obescit in the world is actually in those countries in South Pacific. The number one of the islands America semil that's right. The least obese is Ethiopia. Right, a lot of food, lot of wealth, and everybody's running marathon.
So they lose weight.
So okay, So today, where do you want to take your company? Now you can't find any drug it's going to be more successful than when you have is this? You're just going to keep promoting this drug? Is that your biggest thing? Or there's no other drug you I can imagine it would be anything comparable to this.
Well, we can imagine that.
And so we're trying to first of all, within the obesity metabolic health space. I think there's two things I'm very excited about. One is we have trzepetide mondros that found on the market. We have eleven other pipeline projects aimed at the same problem but in different ways. So we have a triple 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.
We're going to exploit that fully. The second thing is.
We've talked a lot about like cardibasker health, diabetes, these conditions that one 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 hedonics, so they
are reducing that desire cycle. So next year you'll see Lily start large studies and alcohol abuse and nicotine use, even in drug abuse, will also begin studies in anti inflammatory conditions because you don't think of that with weight, but actually there is quite a strong signal in anti inflammatory. 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 to make a big difference.
So if you ever thought about eating a lot, gaining weight, and then going to one of your drugs so you can actually experience it because you don't use it, because you don't you're so thin.
I'd I'd like to avoid that, but it might happen, and I wouldn't hesitate to use them.
Yeah, yesterday you announced that fifteen billion dollars stock buy back. Many people criticize stock buybacks. They say you should use your money to invest in your products and so forth.
How do you respond to that?
Yeah, I don't understand that argument.
Really, a stock buyback is a way to essentially, by buying your own shares, you give the people who already own your shares the opportunity to sell at a higher price and get a return on their investment.
I don't know why that's bad.
But I would also point out, in our current situation, we're spending almost more than anyone in the world on R and D. Already, we'll spend eleven and a half billion dollars this year on research and development. By the way, the country of Germany spends about eight and a half billion on all of its medical R and D.
That's their NIH equivalent.
So we're at the nation state scale on R and D where we have announced investments of twenty three billion dollars in new capital in the United States.
For factories, we can't go faster.
There's no more vendors to build plants faster than we're building right now. So returning some of the rewards that investors deserve for taking risk on the company seems like a reasonable thing to do.
So, Members of Congress, when you're in town, I assume, how do you find that experience uplifting?
That wasn't the word I was going to use.
Yeah, look, at an individual level, we all love our congressman, and I think at an individual level they seem quite smart and rational people. Collectively, they don't seem to be able to act very rationally, but we're going to try to convince them to do so. I think there's a lot we can do. You know, it's a complicated world right now for global businesses like ours, there's a lot we could do that would make a pretty big difference.
And it seems relatively easy to us, so we'll work with them to do that.
Now, I assume you're very popular in Indiana because your company is very popular and you're a very nice person, your so forth. Have you ever thought of running for office yourself?
Again, I have not considered public service at this point. I'm busy doing what I'm interested in. But we've been lucky in Indiana. We have a you know, it's a right leaning state, but we've a very common sense leadership. We've enjoyed good relationship there, so that hasn't come up. No one's tried to recruit me yet.
Okay, so let me ask you finally, finally, on the drug that everybody's talking about. Is it difficult to get a doctor to prescribe that? Or if you do go in a doctor, you say you want it, doctor automatically gives it to or do you have to examine you and say you're a little overweight.
They'll have to examine you.
But it's a both and right now, our market studies are when people ask for either our drug or Novo's, about eight out of ten times they get it. It's a very consumer driven thing, and most doctors aren't resistant to it. When we launched that bound. You know, we just started advertising. That's an unusual thing. Usually you go out of the gates, you try to raise awareness, but there was so much online, a buzz and virality to this.
We didn't really have to.
Half the doctors writing the medicine in the United States right now, our medicine we've never spoken to. So usually you have like salesmen who go out people, we talk.
To them free samples. You don't have to give free samples.
We haven't done any free samples and half of them we haven't even spoken to yet. We need to speak to them to educate them on risk and benefits, but they're just spontaneously writing because consumers are asking them for it. It's a unique medicine.
So has there ever been a drug anywhere in the United States that's as popular as this particular drug is sweeping the world and the country as anything like this and you've seen before.
I don't think so.
I think both ours and our competitors' drugs will easily be the largest selling drugs in the US next year.
And for a good reason.
I'd say they Obviously, people when they begin taking them almost immediately feel better and they want to stay on them. We do lots of clinical trials and often people we randomize the PACEIBO so they don't know they're on the drug or not, and the people on the drug often drop out of the study at a high rate because you feel about the same when you're on most chronic medications, maybe have some side effects, but you don't notice your
health improving. On these, you notice your health improving immediately. People have a scale in their bathroom. They step on it every day. They love losing weight. Physicians like it because the baseline of medical care is die in exercise, so when people aren't successful, it's frustrating. Here they can feel successful because people who are chronically overweight or even quite.
Obese can lose a lot of weight.
I had a letter this weekend I got from a lady who lived in Kansas.
She's forty five years old.
She weighed four hundred and twenty pounds, and she sent me the letter because yesterday she weighed one to eighty eight and she's been on our drug for two years and she was unsure if she was going to live to be fifty, and now she's sure she is. So this is imagine that at the nation's scale, we could change the trajectory of health care in the country with our invention.
In that particular example.
For example, hy somebody goes from four hundred plus pounds down their body organs must have been weakened by having that large weight for a long time, So even if they lose the weight, they're still not going to be as healthy as if they had never been obese.
Right, Well, we don't know that.
Actually, I think the body's proven to be pretty resilient. Obviously, she'll need to keep the weight off. She'll need to exercise and eat well and take good care of her health. But this particular person, for instance, had diabetes and no longer has clinical diabetes. It's not detectable, so actually her health is improving as she's losing the weight already.
Well, it's a great American success story, and I congratulate you on pulling this off, and I hope you'll continue to find other drugs that are going to be as successful as this, And I can you know, I could use a couple of them myself Alzheimer's or whatever else I might need in the future. But thank you very much for being here, and thanks for the great story.
Thanks David appreciate it ye