CEO David Ricks wants Eli Lilly’s upcoming obesity pill to be accessible to patients who need it, but the company still needs to pay for the next generation of obesity medicines to come after that.
Eli Lilly is developing a next-generation obesity drug that could help millions of people around the world. But if it’s priced for accessibility, will its sales be able to fuel the company’s powerhouse R&D engine?
“Our strategy is to bridge both,” CEO David Ricks said on Lilly’s third quarter earnings call Thursday. That bridge might be built on getting the company’s GLP-1 drugs purchased in as many settings as possible, by the biggest buyers possible, he explained.
The next-gen drug in question is Lilly’s orforglipron, a late-stage GLP-1 that has been powering through the clinic, building buzz along the way. The therapy recently achieved four straight positive Phase III readouts.
Lilly has not yet named a price—and likely won’t unless and until it’s approved by the FDA. Ricks at a public appearance in September used $100 a month as a hypothetical placeholder that would likely fall short.
“If we cut the price to, say, $100, there will be no more new medicines in this category,” Ricks said at the All-In Summit on September 7. “Because we’ll have snuffed out, essentially, the incentive to create the next thing in R&D.”
Responding again to the orforglipron pricing question on Thursday’s earnings call, Ricks said that the rise of the consumer market for GLP-1s has had a profound impact on how Lilly thinks about pricing. To partially serve that market, the company launched LillyDirect, providing a self-pay option for patients. Ilya Yuffa, president of Lilly USA and Global Customer Capabilities, said that LillyDirect has seen significant uptake, which contributed to Lilly’s reported 15% sequential growth for the quarter.
The efficacy of already-approved weight loss drugs, including Lilly’s tirzepatide franchise—which just overtook Merck’s Keytruda as the world’s best-selling drugs—have consumers clamoring to get on treatment.
“We haven’t really seen that at scale in other categories, and it certainly is a channel here, partly because of under-insurance, but partly because the benefits of these medicines manifest so consistently. There really aren’t that many non-responders at all,” Ricks said.
Driven by consumers, Lilly has experienced “price elasticity,” Ricks said. Zepbound initially had a list price of $1,059.87 when it launched at the end of 2023. Single-dose vials can now be purchased at Walmart through LillyDirect for $349 per month, according to a recent announcement.
Ricks added that the drugs can also have a long-term impact on other health conditions. That’s where Lilly is planning to continue the commercial fight for the GLP-1 franchise.
“It’s, on the one hand, in our interest to offer consumers a compelling price where they can afford to self-pay,” Ricks said. “It’s also in our interest to continue to build out indications for chronic diseases.”
To that end, Lilly has already nabbed a label expansion from the FDA for Zepbound in sleep apnea. The therapy is also being tested to improve cardiovascular outcomes and in multiple combination studies with other medicines Lilly is developing.
Lilly essentially wants to prove the health benefit of these medicines and compete less for consumer dollars and more for “healthcare dollars” from governments and payers, the CEO said.
“We have so much evidence coming of long-term benefit, we should compete with other classes of medicines and chronic diseases—or even create whole new classes,” Ricks said. “We are literally just scratching the surface of global treatment here. And there really is a tremendous opportunity to reach tens or even hundreds of millions of more people in the coming years, and that’s our goal.”
Pricing Pressure
Orforglipron, which Lilly expects to be made available next year, will likely launch amid heightened pressure from the Trump administration to lower the cost of prescription drugs. President Donald Trump has announced several deals with Lilly’s pharma peers including Pfizer and AstraZeneca to list some drugs on a yet-to-be-created direct-to-consumer platform called TrumpRx. Lilly has not yet signed on, but Ricks has been a frequent visitor to Washington to lobby for his company.
The president earlier this month pledged to bring the cost of weight loss medications down to $150. While he did not name Lilly’s specifically, he did call out Novo Nordisk’s Ozempic.
Novo is currently negotiating a reduced price for its semaglutide medicines offered via Medicare Part D through the Inflation Reduction Act process. Lilly, which is not yet subject to the same process yet for its GLP-1 products, could benefit if Novo is forced to lower the price significantly, one analyst pointed out.
The IRA negotiations would also only apply to a small market since it’s just Part D, according to Lilly’s Yuffa. Ricks admitted that they are watching these negotiations, but said Lilly is well prepared as tirzepatide has shown superior efficacy in head-to-head trials against Novo’s medicine. That “is a strong foundation for any value-based discussions that we have with payers,” Ricks said.
