A pharmacist has boxes of Eli Lilly & Co brand tirzepatide medications. Mounjaro, arranged at a pharmacy in Provo, Utah, USA, on Monday, November 27, 2023.
George Frey | Bloomberg | Getty Images
Skyrocketing demand for a class of weight loss and diabetes treatments has increased Eli Lilly to new heights over the past year. But the drugmaker still has a lot more work to do on that hard-won success, outgoing Chief Financial Officer Anat Ashkenazi told CNBC.
Ashkenazi, who will act as the new CFO of Alphabet on July 31 was key to managing the revenue windfall and wave of investor optimism from Eli Lilly's diabetes shot Mounjaro and the recently launched obesity drug Zepbound. Ashkenazi took over as CFO at Eli Lilly in 2021 after about two decades at the pharmaceutical giant. She was included on CNBC's first Changemakers list earlier this year.
“You have to be a very good student of the business and understand it inside and out and understand the industry,” she told CNBC in an interview before announcing her departure. “Only when we understand the entire system can we navigate it properly so that we add value to it… That's my role as CFO.”
Her tenure has not been without challenges: Eli Lilly and rival Novo Nordisk have both struggled to produce enough supply of their treatments to meet unprecedented demand, causing nationwide shortages of those drugs.
Their weekly injections are part of a class of medications called GLP-1 agonists, which mimic certain hormones produced in the intestines to suppress a person's appetite and regulate blood sugar levels. Some analysts expect the market for these drugs to be valuable $100 billion by the end of the decade.
Eli Lilly's massive sales increase has allowed the company to invest heavily in scaling up production, which will ultimately put more drugs in the hands of patients, Ashkenazi said.
“As we start selling products and we get the revenue and the cash flow that comes with that sale,” the company wants to “direct that cash flow back into the company to invest in those manufacturing facilities,” she said.
Eli Lilly don't expect to match the pace of 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 pharmaceutical factory is pictured in Branchburg, New Jersey, on March 5, 2021.
Mike Segar | Reuters
Ashkenazi said Eli Lilly has several manufacturing sites under construction or expanding, including two sites in North Carolina, two in Indiana, one in Ireland and one in Germany, along with a seventh site that the company recently acquired from Nexus Pharmaceuticals. Eli Lilly also said late last month that it would invest an additional $5.3 billion in its Lebanon, Indiana, factory.
These facilities add to the company's “existing, very large” manufacturing footprint in the U.S. and Europe, Ashkenazi said. Since 2020, Eli Lilly has spent more than $18 billion building, expanding and buying factories 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 medications in the US.
Some employers and other health plans are still reluctant to cover GLP-1s for weight loss because of the high price tags, which they say could put a significant strain on their budgets. Insurers also have other questions, such as how long patients actually undergo the treatments.
Still, Ashkenazi said Zepbound's coverage by U.S. commercial insurers is improving, with about 67% commercial coverage as of April 1. Eli Lilly is working to build that access for the rest of its patients, she noted.
“It's not enough to have a highly effective, safe drug that can really change people's health care – but also make it accessible,” Ashkenazi said.
She also hopes that patients enrolled in the federal Medicare program will eventually see increased coverage for weight-loss medications as Eli Lilly and other drugmakers demonstrate their ability to treat a wide range of obesity-related conditions.
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, among other conditions.
Under new guidance issued in March, Medicare Part D plans can cover obesity treatments approved by regulators for an additional health benefit. Medicare prescription drug plans administered by private insurers, known as Part D, currently cannot cover these medications for weight loss alone.
A bigger problem is the long-standing misconception that obesity is a “lifestyle choice” rather than a chronic disease, Ashkenazi said.
Eli Lilly is trying to change that.
“Our goal is to ensure that society, the healthcare system and the patients themselves actually see this and understand that it is a chronic disease… and therefore should be treated as such,” Ashkenazi said.
