Good news: Obesity rates are going down thanks to novel anti-obesity treatments around GLP-1 agonists. Diabetes Type 2 can be combatted. How can current manufacturing bottlenecks and access barriers for patients, from compliance, price, and finding a doctor who prescribes what you need, be overcome?
I listened to the fantastic podcast interview with Eli Lilly CEO, Dave Ricks, hosted by the founders of Stripe. It is a highly interesting two-hour deep dive into the workings of the pharmaceutical industry and how price setting (and follow-up mandated discounts) skew the drug market.
Ricks points out how cash-paying patients are usually worse off in a system that is optimized to give public payers such as Medicare and Medicaid the biggest benefit. Actual consumers end up paying the sticker price. It’s like walking into a hotel on Times Square on December 31st and paying the published rack rate for a room (the absurd one you see inside your hotel door but never on Expedia).
He also covers Eli’s approach to keep headcount stable despite double-digit revenue growth and rather invest in more machinery and trials. This is followed by a statement that only manufacturing jobs grow linearly for GLP-1 production capacity.
This surprised me a bit. Ricks does not cover at all the highly relevant and interesting lever of GLP-1 half-life. Just two decades ago, GLP-1 survived for merely a few minutes in our bodies. We leaped (and it’s a massive leap!) from a few minutes to a week of GLP-1 half-life. That’s going from five minutes to 10,000 minutes or a 200,000% increase!
When I listened to Clive Meanwell, founder of Metsera and Population Health Partners, at the 2024 FT Biotech Summit in London, I got excited about his optimism towards the potential to tackle supply chain bottlenecks by not building more factories and capex but by dialing up the half-life of GLP-1. Metsera’s promising trials for a drug that lasts an entire month in our bodies led them to a $9 billion acquisition by Pfizer. Boosting half-life would allow us to supply a fourfold of patients with GLP-1 without a single extra dollar spent on new manufacturing facilities. It would probably also supercharge therapy adherence. And we are merely talking about a 400% increase. A dwarf step compared to what we have seen in the past two decades.
Going from a month to six months is again just a 600% step up. If people just have to take two shots a year, we might see a true transformation in compliance and wide penetration rates. Costs, naturally, will also go down, which is crucial to get the prices further down (though we have already observed a massive price downward spiral benefiting consumer welfare this year).
At some point, we might want to ask the question: Do we have sufficient safety data on these drugs that we don’t need to see a medical doctor making $500k a year to prescribe us something that safe? We could turn these drugs into an over-the-counter consumer product similar to paracetamol. Scarce healthcare funds should be for surgical interventions, cancer care, and rare diseases. Patients paying small bucks to prevent high costs (yes, obesity and diabetes make up double digits of our healthcare spending) will allow doctors and payers to focus on the things we can’t prevent yet.
By the end of the decade, fighting obesity might just require an annual shot, similar to flu immunization. Preventative healthcare has the potential to finally become the cost-saving holy grail we can all reach, afford, and drink from – as consumers!
