As a CFO, making investments to bring real innovation to the marketplace can position the company for long-term growth. But when it comes to innovation in health care, like combating obesity, the implications can impact the lives of millions of people.
“It's important to note that obesity is not just a number on a scale,” Anat Ashkenazi, EVP and CFO of Eli Lilly and Company tells me. “It has much broader health implications.” There are over 110 million patients in the U.S. alone with obesity, which is associated with over 200 health complications, Ashkenazi says.
Lilly (No. 142 on the Fortune 500), the Indianapolis-based pharmaceutical company, announced on Nov. 8 that Zepbound, a weight-loss drug, was approved by the U.S. Food and Drug Administration. The list price of Zepbound was set at $1,059.87 for all six doses. It is expected to be available in the U.S. by the end of the year.
“We priced it approximately 20% lower than the existing GLP-1 obesity medication on the market at the time of launch,” Ashkenazi says. “And this is the list price. It's not what the patients actually pay.” If a patient is covered by commercial insurance, they may be eligible to pay as low as $25 for a 1-or 3-month supply. But if Zepbound is not covered, a patient has access to a Lilly assistance program and may be eligible to pay $550 for a 1-month prescription, approximately 50% lower than the list price.
“Running clinical trials for something like this is in the billions of dollars, and takes years to get there,” Ashkenazi explains. “On the one hand, you want to get the value for the innovation, and on the other hand, it’s important that patients can access the medication. We priced it so patients can access it.”
Lilly's competitor Novo Nordisk A/S’s obesity medication Wegovy has a list price of about $1,349. Novo Nordisk’s Ozempic and Lilly’s Mounjaro are classified as type 2 diabetes drugs, and they have also led to weight loss among patients. A new data analysis finds that Mounjaro outperforms Ozempic.
This year, the demand for obesity drugs has accelerated. The global obesity market could reach $77 billion in 2030, up from a previous estimate of $54 billion, Mark Purcell, Morgan Stanley European Biopharmaceuticals analyst, stated in a recent research report. Due to the “rapid expansion” of reimbursements for obesity drugs, about 40 million people in the U.S. (out of roughly 110 million adults with obesity) have access to these medicines through their insurance plans, according to Morgan Stanley research.
Meanwhile, in a recent forecast, Evan David Seigerman, an analyst from BMO Capital Markets, predicted the global market for innovative weight-loss drugs to reach $100 billion by 2035. And the revenue for these medications could reach $70 billion in the U.S. alone.
'Double down on innovation'
Ashkenazi, who joined Lilly in 2001, has been CFO of the company since 2021. She previously served as a CFO for several of the company’s global business areas. Her thoughts on strategy?
“We believe that the way to have a winning strategy, and you can see this by the success we've had, is to double down on innovation.” Lilly continued to invest in innovation during challenging times, she said.
Between 2010 and 2014, about 40% of the company’s revenue was exposed to patent expiry, she explains. “You can lose 90% of sales within a few months. And that's not easy to go through. And what we said is, during that period, the one thing we're going to invest in, and we’re not going to compromise on, is research and development.” Lilly has been launching new products every year since 2014, she says.
How does she define the CFO role? “It’s financial and strategic leadership coupled with people and organizational leadership,” Ashkenazi explains. “Whether an organization is going through tremendous success and growth, or challenging times, the CFO should anchor the organization back to its core mission and values and chart the course forward.”
This story was originally featured on Fortune.com