A pharmacist holds boxes of Eli Lilly & Co.'s Mounjaro brand drug tirzepatide at a pharmacy in Provo, Utah, Monday, November 27, 2023.
George Frey | Bloomberg |
The rapidly increasing demand for a class of weight loss and diabetes drugs has Eli Lilly to new heights last year. But the pharmaceutical company has much more plans to use this hard-won success, outgoing CFO Anat Ashkenazi told CNBC.
Ashkenazi becomes new 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 at the pharmaceutical giant for about two decades. She was named to CNBC's inaugural Changemakers list earlier this year.
“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 produce large enough quantities of their drugs to meet unprecedented demand, leading to a nationwide shortage of those drugs.
The weekly injections belong to a class of drugs called GLP-1 agonists, which mimic certain hormones produced in the gut to suppress appetite and regulate blood sugar. Some analysts predict the market for these drugs will be worth $100 billion by the end of the decade.
Eli Lilly's sales boom has enabled the company to invest heavily in expanding production, which will 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 company wants to “direct that cash flow back into the business to invest in those manufacturing facilities,” she said.
Eli Lilly doesn't expect to be able to keep up with demand this year, and perhaps not even in 2025, Ashkenazi said at a conference in March. But the pharmaceutical giant has made encouraging progress so far.
An Eli Lilly and Company drug manufacturing facility is pictured in Branchburg, New Jersey, March 5, 2021.
Fresh Mike | Reuters
Ashkenazi said Eli Lilly has several manufacturing sites under construction or “ramping up,” 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 would invest an additional $5.3 billion in its Lebanon, Indiana, manufacturing facility.
These facilities complement the company's “existing, very large” manufacturing presence in the U.S. and Europe, Ashkenazi said. Since 2020, Eli Lilly has spent more than $18 billion to build, expand and purchase manufacturing facilities in those regions, the company said in May.
Ashkenazi noted that Eli Lilly is also addressing another barrier to patient access: limited insurance coverage for weight-loss drugs in the U.S.
Some employers and other health insurers are still hesitant to cover GLP-1 weight loss drugs because they are too expensive and could put a significant strain on their budget. Insurers also have other questions, such as 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 provide 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 government's Medicare program as Eli Lilly and other pharmaceutical companies demonstrate their ability to treat a wide range of obesity-related diseases.
Eli Lilly is studying tirzepatide, the active ingredient in Zepbound and Mounjaro, in patients with obesity and fatty liver disease, obstructive sleep apnea, chronic kidney disease and heart failure, as well as other health conditions.
Under new guidelines issued in March, Medicare Part D plans can cover obesity treatments that receive regulatory approval for an additional health benefit. Medicare prescription drug plans, administered by private insurers and known as Part D, currently cannot cover these drugs for weight loss alone.
A bigger problem, according to Ashkenazi, is the long-standing misconception that obesity is a “lifestyle choice” and not a chronic disease.
Eli Lilly is trying to change 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.
