深入GLP-1淘金热：Eli Lilly CEO谈新突破、成瘾与心理健康及定价

[Music] GLP-1 drugs have become increasingly popular. Eli Lilly, coming to save us here, has had its market capitalization increase by about 860% since he became CEO, and the stock price is up a little bit more than 1,000%. No need for needles. Eli Lilly says it has a pill. Eli Lilly's experimental pill appears to work as well as the injected drug. It's everyone's job to move the science. We should always be pushing forward. [Music] Ladies and gentlemen, please welcome Eli Lilly CEO Dave Ricks. [Music]

How are you?

Hi, David. Good to see you. Good to see you. How are you?

How are you, Dave? All right. Do you want to say thank you?

Yes.

I don't want to make it awkward.

Well, we were sitting here 3 years ago on this pod, and Chamath was calling me a fat bastard. He wasn't wrong. I was 213 pounds. I'm at 172, right?

Awesome. And it's because of what you've done.

Thank you.

Can I give you a hug?

You can. Yeah, bring it in here. Bring it in here.

I appreciate it. Congratulations. Sacks also lost 20 pounds, so together we've lost a Friedberg. That's actually my husband. Come on.

Nice. Nice.

How much money are you guys printing? My lord. What do you do with it? You have wheelbarrows.

Can I please start?

Yes, go ahead. Okay, sorry. I have 4 more jokes. I'll get them in at the end.

You really have built one of the most incredible businesses in America, but you've done it because you took an enormous bet a long time ago. Do you want to talk us through the journey and the process you had to go through, what you saw early on, and how you made the bet on this class of drug?

Yeah, great, and thanks for having me here. I'm trying to up my cool factor. That's what they tell me in the Midwest I need to do.

Can you get a Tom Ford suit as well?

No, I'm actually disappointed in the ties. That's—I don't know. That's not—

You and I are—you and I are guys who wear ties.

Suitsupply does a great job. Just own it. Okay, there we go. Just donate. Okay.

So, GLP-1 drugs—we all know about them. It feels like an overnight success, but what happened? Drug development is hard and long and requires a fair amount of failure and discipline, as well as a huge amount of capital.

Actually, in 2006, we launched the first GLP-1 drug. Nobody really knew the name of it. It was a twice-a-day injection for diabetes, but the cover of our annual report in 2007 had a lady on it, and there was a quote: “Oh, my diabetes is under control, and I'm losing a little bit of weight.” That was 18 years ago.

Since that time, we've been inventing new versions of it and solving various problems with that twice-a-day injection. We wanted to make it more convenient. We needed to get the dose up, and people tended to lose more weight when you got the dose up.

Then tirzepatide came along. You ask how much money we're making, but in Q2 we reported global sales that surpassed Keytruda, making it the best-selling drug in the world. Actually, it was the best-selling drug in the world of all time in Q2 this year.

How much did it make in Q2?

We had $8.1 billion in revenue.

And growing at 80%. How many people are on a GLP-1 globally now?

I'd estimate around 20 million people take prescription GLP-1s. Some unknown number of people take nonprescription ones.

That would be compounding.

Compounded or synthetic.

Yeah, or just not for human use. We can talk about all that.

So, anyway, 2014 came along. 4 scientists at Lilly decided to combine GLP-1 with another peptide that your stomach produces when you eat, which is appetite-suppressing. They made the single molecule—tirzepatide. That's what Mounjaro is now.

That happened in 2014. In 2016, I was named CEO, and I got a call that fall from one of our chief scientists. He called me and said, “Hey, we have to stop an early-phase study for tirzepatide.” That's usually a bad call, so I'm thinking, “This is the follow-up to our second-generation version of the GLP-1.” He said, “No, no, it's actually good news.”

We were running this study in Singapore with healthy male volunteers. You can imagine what a healthy male Singaporean looks like at baseline—they're not overweight. We had to stop the study because they were losing too much weight too quickly. They were basically not eating.

The scientists said, “Actually, it's good news. We can tune the dose down. We can work with this.” From there, it was just execution. We knew it was going to be huge, and we started building out the supply chain, building out factories, and running a massive clinical program. We currently have over 100 clinical studies with the medicine going on for all kinds of other uses as well, not just slimming down.

We're going to go there in 1 second, but I just want to go back to this. The problem now, and maybe you can comment on this, is that you have this enormous success. There is a very active gray market, particularly in China, involving peptide synthesis. They're producing drugs that are essentially equivalent to your drugs—workaround copies. Talk to us about that. How do you deal with it, what do you do about it, and what should people do when they encounter it?

Yeah, it's an unusual situation. I think there's always been counterfeit medicines. We're not used to it in the United States because we have, for most people, a pretty good system to subsidize some of the benefit through the insurance markets. So, there's not a lot of incentive to go outside the system.

That's different for these drugs because insurance coverage is poor. I don't know if you bought it out of your own pocket, but most people have.

Did you pay out of pocket?

Well, interestingly, when I first got it 4 years ago, I had this revelation when I was in Porto de Mar[?]. I had heard Tim Ferriss talk about it on his podcast with a friend of mine, Kevin Rose, and I went to my doctor and said, “Hey, I want to get on this.”

He said, “What is that?” He said, “Oh, no, you don't need that. That's for people who are diabetic. You're not even prediabetic.” I said, “No, I want to do it for weight loss. It's off-label.”

He said, “I don't know if I can do that.” I said, “I'm going to get a different doctor if you don't.” He said, “Let me try.”

Yeah.

He got it on prescription. After I lost 20 pounds and my BMI got below 30—which really, I don't want to get emotional, but I have 3 daughters. I want to stick around—it really changed my life incredibly.

In many ways, I was embarrassed that I couldn't have the discipline to do it. Then I realized there was a food noise that I had that was constantly screaming. Once I cycled off of it for many months, and now I'm on an extremely low dose, the food noise and my discipline have come back. There's something about a certain moment where you get too far over it. So now I do have to pay for the drug.

Yes.

And I think the question I have for you about this big picture is, there's a lot of demand for it. It is still a bit too expensive. You're wildly profitable, and this is going to be a pill format.

Yeah, that's ours. That's coming next year.

Is there some thinking when your head hits the pillow that you're having such a profound impact on so many people's lives—that all of the diseases we have are downstream of obesity, and we know that this thing is helping with many other things? Do you have a moral imperative to bring the price down by 50%?

I would think that must weigh on your conscience: It's too expensive, and you're too profitable in a way. There are shareholders who want you to print money, but there are lives at stake here, and there's longevity and health span. Maybe unpack that.

Yeah, we're committed to bringing the pricing down. I want to come back to the supply situation because that led to some of the compounding, but it also affects pricing.

We've led in reducing out-of-pocket costs. It was originally $1,000; now it's $499 from us. We'll push that down further with new medicines, like orals.

What's the goal for orals?

The main goal is to get it reimbursed. Why is it that we pay for antihypertensive drugs when, the moment you stop taking them, you have the exact same risk as before, but we don't pay for anti-obesity drugs? That makes no sense to me. Why do we pay for surgeries that don't work, but we don't pay for these?

What's the number on the pill? What's the target? You can tell us.

I don't have a target in mind, but lower is the direction. We've told the Street to expect single-digit deflation in this category over time.

5% a year, it goes down.

Or more. Yeah.

Or more—10%. So you get it down from $500.

But here's the risk, Jason: If we cut the price to, say, I don't know, $100, there will be no more new medicines in this category.

Okay.

Because we'll have essentially snuffed out the incentive to create the next thing.

R&D.

So we have to balance that. We want to create the next, better medicine. We spend 25% of sales on R&D. This year, that'll be $14.2 billion.

Wow.

That has to get paid for through revenue.

So, with the cash flow that the business is generating, is that how you think about capital allocation? Some percentage to R&D, some percentage, I'm assuming, to CapEx and supply-chain durability, and some percentage maybe to buybacks?

How do you think about where the capital should be allocated? And maybe on the R&D side, can you tell us a little bit about diversification and how else you think about deploying capital?

Yeah. I think we've had this totally asymmetric success. So what do we do with it? One version is to play out the cash flow game, return it to shareholders, and return it at some future date—remembering that in pharma, we have no enduring franchise. Everything we make goes to zero because of the patent system. In 2030-something, Mounjaro will go to zero.

Yeah.

And so should we think about our company as one that will just return to the previous baseline, send all that money back to our shareholders who took that risk over 15 or 20 years with us, and pay them back? That's a little bit like—I don't know how Apple is running their company, right?

Yeah.

That's viable. That's great for shareholders. At Lilly, we think about our job a little differently. We want to create a solution to some other problem people have, and we think we're good at that and can uniquely do it. So we should try.

We should not try to no end. That's wasteful. You can just bury all that money. That's sort of the history of the industry: People have found success, wasted money, and gone back to the baseline anyway, but the shareholders don't get rewarded.

So we're running this experiment now. We're betting a lot on organic R&D buildout. We currently have about 4,200 Ph.D. scientists at Lilly, by the way. That's about the same as MIT and Harvard combined.

So the scale of the science enterprise is huge. How do you, Dave, push people on the risk spectrum? There's a tragedy of riches that can happen because you're so successful. There's this one drug, and there could be some emergent scientist in your organization who wants to take a long shot but just doesn't feel motivated because they think, “This isn't going to do anything.” How do you get that person unlocked so they go for the big moonshots?

You mean that their idea isn't big enough to matter?

They think that, but they may not know, and they may stumble onto a different path.

I don't think that's our bigger problem. I think in big companies in general, and pharma companies maybe in particular, the bigger problem is people thinking they have a big idea but having no way to advance it.

So I'm trying to work on that side, which is: If you think you have something that could be big, how does it become easier to advance your idea in our company versus leaving us and raising money in venture? We can talk about venture and biotech in a second because it's totally broken right now.

Anyway, back to David's question. First priority: invest in organic R&D. Secondly, build out the supply chain. What's different about Mounjaro and the following drugs is that they're injectable drugs. These are very capital-intensive, technically difficult things to scale.

We've committed with President Trump to build all that in the U.S. We're currently constructing 6 plants. We're going to announce 4 more in the next 6 months. I was hoping to be able to announce 1 today, but that'll come in a few weeks.

So, yeah, this is creating 20,000 construction jobs in this period and ultimately 5,000 or 6,000 manufacturing jobs. We'll become a net exporter at scale for these. Unless some Chinese state-owned enterprise gets in this business, it'll be very hard for others to build that out and follow.

Well, they're doing that in the car business.

Yeah, if they're determined, they might. But then the final thing is actually to buy external innovation where it makes sense to tuck it in.

And maybe that leads us to M&A. You just bought that gene therapy company, right?

Yeah. We recently bought a gene therapy company in June. We can talk about that. We're doing a deal about every 2 weeks. Most of them are smallish.

Biotech funding right now is a dumpster fire. It peaked at about $20 billion in new checks a year into biotech. We're now around $5 billion.

Just walk the audience through the dynamics. Why has biotech cratered? Why is it so hard for capital to flow back in? What are the dynamics that are driving this market condition right now?

Many factors, but the first one is competition from other venture ideas, driven by the industry you guys are in. There's just a crowd-out going on with AI and other things. If your cycle time to return is more visible or faster, biotech is hard and slow.

Secondly, I think too many biotechs IPOed in the last decade, and so the liquidity market has sort of collapsed because there are a lot of investors deeply underwater. Half of biotech that's publicly traded is trading at or below cash.

Right.

So investors look at that and say, “What's my future here?”

Yeah.

Unless you can really analyze the technology and take a differentiated bet on the drugs they're working on, I think general investors don't want to participate in that.

And then you have China, which is the other factor, right? China is investing heavily, like they do with every other state-owned industry. They're subsidizing their own companies. They have a swarm model here where they'll subsidize many small things, really betting on follow-on ideas and betting they can execute faster than us. It's been a national priority for a long time.

Can you talk about the patent and IP issue there? In the U.S., when we make a filing, what goes on with respect to China? They don't respect any of our IP, do they?

I think right now they are okay amongst themselves. If I have a patent and I file and launch a product, I don't see immediate copies because it's in their interest to have a patent system right now, for the reason you're raising.

We changed the patent laws in the U.S. in 2011—I think it was the America Invents Act—so it's first to file. It used to be first to invent, and all the patent litigation we had was about whose lab notebook said January 5 versus January 4 on an invention. That was the case—not whether you filed it in a reasonable time, but whether you invented it first. Now it's first to file, so there's no question about who—we don't care who invented it first; it's just who got into the patent office.

As a consequence of that, our biotech companies and big companies like Lilly, Pfizer, and others file as soon as we can because we don't want to lose on first to file. What does that do? A patent exposes the invention to the world.

China is getting very good at patent hacking. What they do is look at that chemical structure and work backward, sometimes driven by AI algorithms, to find a chemical structure that will behave similarly but is outside the patent scope. And they go fast.

So they're really quite a derivative biotech market, but that is also hurting biotech valuations in a significant way.

How old are you?

I'm 58.

You're 58. You look great.

Thank you.

You look like 40. What do you want? Off the menu? Come on, you look great. There's some off-the-menu stuff going on. What do you got? You're on the Wolverine Protocol?

You want—

It's actually an interesting question. What is your lifestyle routine like? Do you supplement? Is there anything else? I know you have Bryan Johnson coming.

Okay. I follow him on X. I'm not doing the Bryan Johnson thing.

He's the opposite of you. He looks like he's dying. You're handsome. That guy looks like he's turning into a—

You know, that's a vampire.

There's another Brian Johnson, the Liver King. I don't know if you ever followed him.

Yeah. Both of these guys are taking it too far. But seriously, I get up early, I work out, I read, and I try to go to bed early. Sleep is important.

Sleep. Okay. There's about 4 things in life that I think really matter where there's evidence: sleep, eating healthy foods—mostly plants—movement, and social relationships. I think those are the things that, over time—

That's because I got a meditation app. If you got feedback—

You tried to get me to do that. My wife tried, too. I haven't tried yours. But have you been motivated to try some of these drugs prophylactically?

People ask me if I've used the GLP-1 drugs. I haven't. “Yet” is my answer, because what's happening, as with all medical technologies, is that you start with the sickest, most extreme cases and work your way toward general use as you prove safety.

I think what we're seeing now, with the broad benefits—from metabolic disease to less drinking to lower inflammation—is that our competitor Novo is going to report a study in a few months on dementia risk. It probably won't be positive. That's my guess. But it will probably be in the right direction.

So you have these general effects—what scientists would say are pleiotropic effects—like broad-based positive things. I think we're going to get to a point where taking pretty low doses for most people, say over 60, or even over 58, is not a terrible idea and may help you live longer.

I just want to follow up on this one specifically. These peptides are becoming quite the rage in the biohacking space. Have you been tracking the Wolverine Protocol, BPC-157, and the tremendous impact people are reporting from it?

There are lots of communities like this trying different things. We don't ever recommend that because we live in a world of clinical studies and FDA approvals.

But you watch it.

Of course. Yeah.

And what do you think of those specifically? Are you pursuing them?

We are pursuing them in the path we do, which is taking those disease states—or people with a predisease state, like prediabetes—and then studying them and proving an outcome.

So we did that with Mounjaro and showed a 93% reduction in conversion from prediabetes to diabetes. That's kind of how we work: slicing the medical stack. These guys are coming at it the other way, which is sort of saying, "I'm already healthy. Can I generally stay healthier with small doses or other regimens, supplements?" That's not our game, but we watch it.

There's a handful of drugs that I would say are epidemically prescribed in America. Probably at the top of the list would be SSRIs and antidepressants.

Yeah.

There's a lot of anecdotal evidence that GLP-1s and this class of drugs are actually quite helpful with the psychological health of an individual. Can you talk to us about that? What's ongoing? What is a readout that you think could be transformational in that space?

Yeah, so this is interesting. Sometimes we engineer a medicine to do something, like we did GLP-1/GIP toward appetite, to reduce body weight, lower blood sugar, and lipids, and sometimes along the way you discover an effect you didn't predict. One of those is smoking cessation. When we started doing these studies at scale, it was immediately obvious people stopped smoking. A lot of people stopped smoking.

Gambling and online shopping, all kinds of—

This is why he's on it, because he was stuck in the game.

Poker's not gambling, but go on.

So, anyway—

I was talking about craps.

So then there have been reports, and there's a big VA study that read out. We know our veterans suffer from a lot of mental health issues, and there were pretty dramatic reductions for those who were using GLP-1s and had diabetes. We are now starting studies in bipolar disorder and major depressive disorder, along with these addictive hedonic pathways where you're sort of self-medicating, with a new GLP-1—a different one that probably has a little less weight loss but a little more brain activity.

Really?

So it's dialed in for these uses. We'll get that drug in 3 or 4 years if it works, and I think it could really change some of these terrible mental health conditions.

Well, can you take a step back, maybe, and jump off from SSRIs? Give us a description of the landscape of American human health—the MAHA movement, what Bobby and his team are now doing at HHS.

Yeah. Long overdue. I think the food system in particular—and you're working on this—could be changed in a much more positive way. I think we're the least healthy major country metabolically, and probably the reason for that is the food we feed ourselves: processed food and chemicals.

Highly processed food and chemicals. This whole carb thing that went on for 30 years—

You're saying the anti-carb, the low-carb or no-carb thing?

The anti-fat, high-carb diets that we were feeding people for 30 years. I think most people don't believe in that anymore, but it led to a big part of the obesity curve—the glycemic-index kind of thing. I'm all for reforming that, and I think we should find ways to make quality food cheaper and more accessible for many people.

Kennedy—you like that he's shaking it up?

It's a big part of Bobby Kennedy. I think that part—I think we have a lot of alignment on. I'm all for skepticism of science. That's what scientific process is: questioning and challenging. I worry about some of the stuff going on with vaccines right now, because I don't see why we're asking these questions. But it's okay to ask them. If we restrict access while we're asking them, I worry about that. That hasn't really affected the medicine world. We don't make vaccines, but at least recently, we haven't been affected.

Let me ask you a hard question.

Yeah.

The mainstream media, in many cases, makes 25% to 50% of its revenue from advertising from companies like yours. We allow you to advertise. Should we allow you to advertise? And have you captured that mainstream media? Is that the intent when Anderson Cooper makes double digits of his money from your firms?

I would be for a system where we don't have nearly as much drug advertising.

To be clear, yeah, yeah. Well, that's paradoxical. How do you then? You just want to rise and fall based on your reputation?

Mutually assured destruction, right? The ads annoy people. They're poorly constructed. Why? Because of regulation, believe it or not. If you read the regulation, in 1992 the FDA published a regulation on advertising built for magazine print advertisements. Now we have to follow that regulation for television advertisements, which is why you have the scrolling side effects, as if they were printed on the back of the ad. That's literally how we're here. So the ads are poor. They don't represent the patients we're serving, et cetera. By the way, more than half of our consumer spending to reach consumers is not on television.

So the technology does work for you. Does it move the needle when you do a big ad buy?

It does, unfortunately. That's why people keep doing it. Of course, the productivity of that is debased when your competitor does it, but then everyone wants to go up above the—

Prisoner's dilemma. Yeah.

A little bit. So I would be for a system where that got reduced. There have been a lot of legal actions fought over this through the years, and it's pretty clear under the First Amendment that we can do it. It's hard to regulate. There have been some efforts in Congress to tax it differently. I'm okay with that. It doesn't move my needle at all.

You'd rather see that money go into R&D, I would suspect.

Yeah. You're not going to know what's available off the shelf, on the doctor's shelf, to you without any sort of knowledge or information. The truth is, most primary care doctors are way too busy.

What do you think of people using ChatGPT and large language models to do their research, and then they come to their doctors sometimes with much deeper research than the doctor is aware of? Is this a plus or a minus? Do you trust it? Do you do it yourself?

I think it's a huge plus, I would say, and I do do it myself. I also do it just to see what the different models are producing about our drugs. It's like an audit. Mostly, it's accurate, and it's gotten better over the last 2 years—I'd say substantially better. Many, including Google, to their credit, have a way to click through and check the facts directly, which is a useful thing. They've served that up a little more proactively. That's good.

What about consumers owning their health and looking for more information? Do you work directly with them? Do you have an arm that will go to Grok, go to Gemini, and say, "Hey, we did these searches. Here are some things you need to improve"?

We've pointed things out when there are mistakes. It does feel a little bit like we're lobbing into a black hole. Maybe that's a capacity issue on their end, or maybe they're taking the point of view that our model's just trained on the internet—

The corpus of information on Reddit.

Yeah. Yeah. Right. It is what it is. We don't want to own—

The bastion of intellectual—

Yeah. We don't want to own the outcome of that.

Before we run out of time, I just want to get your view on research funding in this country. The NIH budget cuts that have been proposed—what will the follow-on effects be? Are these cuts going to be to low-ROI research programs that ultimately wouldn't have translated into the clinic and into improving lives, or are you worried about NIH funding cuts and what they're going to do to the pipeline of therapeutics in America? When will we realize the effects of that?

Yeah, great question. I don't think anyone knows the answers to those. It's not obvious, let me put it that way. No doubt the NIH, over its history, has done some landmark things that no market could do, and I'm for more of that. Mapping the human genome—a megaproject that could only be done by government—undoubtedly produced a ton of good and economic value for the country.

First of all, the NIH's total budget is a little over $40 billion. Most of that is extramural. They're granting that to institutions in very small checks, sometimes very small checks. I personally kind of wonder what the impact of that is. Is it sort of a VC model, where we spread a ton of bets and a few of those will bloom into giant successes, or is it just sort of filtered out without a strategy? I think that's a question that should be asked, and maybe Jay's asking that.

I think the other problem with the NIH granting is, as you do that, like any government mechanism, it gets influenced by the people who are making the grants. Who are those people? People receiving grants. So there was a little bit of a backscratching issue here, and I think exposing some sunshine onto that to say, "What is that process? Is it truly competitive, and is it truly pursuing ideas that the market can't solve itself?"

And should it be done at universities? Let me just ask you this: Are universities the right research institutions today and going forward? We've got 2 university leaders tomorrow that we're going to have a conversation with about this topic, among others. When you look around the world at how research is done, what's the right model? Is this the right model?

I probably lean too much that way. I'm on the board of an R1 university, so I have to—I may be a little biased myself. I think a lot of good things have happened in universities, but we should not exclude other applicants. I think there could be a place for other participants.

Dave, tomorrow we're going to have Mark Cuban.

Yeah, great.

And we're going to talk about PBMs.

Yeah.

And one of the big—

He's on fire.

Well, one of the big boogeymen in health care are these PBMs. Can you just explain, quickly, in 30 seconds: What do they do? And what’s your view on whether they should even exist in American health care?

Probably we’re at the end of that S-curve, and we should get to something else. We actually owned a PBM in the ’90s.

Why do they exist? Two reasons. First, to match up claims, so you can go into any pharmacy in the country with a card that says, “Here’s my benefit,” and that benefit can be adjudicated to you. That was a big IT problem in 1993. It’s not really a big IT problem now. There are dozens of these so-called transparent or light PBMs. Actually, our company is moving to one off one of the mainline ones because it’s in our business interest, but also because their service is better.

The other thing is to negotiate bulk discounts: gather up a bunch of employers or plans, go to the drug companies, and get a lower deal. I think that’s fine. I’m for that, too. What happened is, like any consolidated terminal state of an industry, the enshittification of their service is that they just become so focused on themselves. Every action they make is about their benefit, not the customer, and that’s what’s happened. That’s why everybody hates them.

AI kind of came out of nowhere as this big category. What, if you had to guess, do you think the next big surprise category would be that we’re not thinking about?

It’s hard to predict that, but I would say probably a brain disease. If you look at human suffering globally, 40% is brain diseases, and it’s so broad we could spend a whole panel talking about them.

What we’ve had so far has not worked. When Bobby’s raising the question, “Why do we have so much autism?” that’s a great question. What’s causing it? Depression rates—despite the advent of Prozac and so many other drugs, people are aided, but it’s not solved. We still have lots of depression in this country, and maybe it’s growing in youth.

These are huge problems. As our population ages, dementia and other brain diseases will become even more significant. Part of what we try to do is allocate capital into spaces where there are no drugs, hoping to hit the dartboard where there isn’t a competitor. That’s how we got obesity drugs. We’re working on that, but it’ll be hard to predict.

Ladies and gentlemen, please thank David. Take a break.

Thanks, bro. Great to see you. Yeah, I’ll get ready. Good to see you, baby. Thanks, baby. Appreciate it. Congratulations, my man. I appreciate you. Appreciate it. Take care.