Lilly’s rapid growth increases headwinds for the company’s weight-loss drug

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Eli Lilly is riding the GLP-1 wave. investment in manufacturing, their efforts are not enough to satisfy the current market. And that may not be Big Pharma’s biggest problem.

Lilly’s first quarter earnings report clearly tells the supply chain story.Diabetes and weight loss drug Munjaro misses analyst expectations, company reports Revenue $1.8 billion If you did not use drugs during the quarter, below analyst expectations 2.1 billion dollars. Lilly’s sister drug Zepbound, which was just approved late last year, reported revenue of $517 million.

“We expect supply and demand conditions to remain extremely tight in the short and medium term,” said Anat Ashkenazi, Lilly’s chief financial officer and executive vice president, in a quarterly earnings call. ”, pointing out that demand may still exceed supply. For next year.

Despite falling short of earnings expectations, Munjaro is still a big score for Lilly, and its earnings potential cannot be underestimated. As a result of the windfall, Lilly has raised his outlook for the rest of this year by a whopping $2 billion.

To further strengthen its manufacturing capabilities, Lilly recently facility To increase production capacity for injectables in the United States, the company is building a $2.5 billion parenteral manufacturing facility in Germany.

“We are building all night long,” Prime Minister Ashkenazi told a news conference. financial statement.

But the company’s strategy to maintain its market position goes beyond capacity revisions, as competitors are poised to hit shortages that force consumers to look for alternative versions. Lilly began targeting compounding pharmacies last year. lawsuit The aim is to prevent counterfeit Munjaro products from being sold in medical spas and wellness centres.

Last month, a judge dismissed Lilly. case For dispensing pharmacies selling reformulated tirzepatide (generic names Mounjaro and Zepbound) florida judge The company said it was trying to “take advantage of the back door” through the states to enforce federal laws that fall under FDA jurisdiction.Lilly believes that these reformulated tirzepatide drugs Not reviewed by FDA and can jeopardize patient safety.

The FDA allows the distribution of compounded drugs under some circumstances, including when the drug is in short supply. still need to meet the conditions How to qualify for drug review exemption in such cases.

In January, the FDA noted that rival GLP-1 maker Novo Nordisk’s Ozempic and Wigoby were both used. National drug shortage list From May 2023 onwards, a combined version of the drug will be available.Lily Zepbound and Munjaro Both are on the list.

pricing pressure

While Lilly is dealing with the undesirable problem of high demand for its GLP-1 business, it also faces pricing pressure from a looming investigation by lawmakers. The possible investigation comes after HHS reported in 2023 that: Costs are rising due to drug shortages For consumers, the price of GLP-1 will continue to be a focus as supplies continue to be in short supply.

Sen. Bernie Sanders (I-Vermont) recently went after Novo Nordisk, saying,prohibitively high priceThe company charges Ozempic and Wegovy rates in the US compared to other countries. It is unclear how the investigation into Mr. Sanders, who is known for his harsh criticism of drug company executives over drug prices, will end. In his letter, Sanders asked Novo CEO Lars Fluergaard Jorgensen to turn over inside information about Wigobee and Ozempic prices to the Senate Health, Education, Labor and Pensions Committee. I asked for it.

The investigation is focused on Novo, Sanders told The New York Times. He will also target Eli Lilly’s Mounjaro and Zepbound Pricing.