Eli Lilly is on the cusp of potentially revolutionizing obesity treatment with its next-generation drug, orforglipron. However, the question of how to price this promising therapy to ensure both accessibility for patients and continued investment in research and development (R&D) is a complex challenge. The company's CEO, David Ricks, has acknowledged the need to "bridge both" affordability and innovation, hinting at a multifaceted strategy to navigate this delicate balance.
The Promise of Orforglipron
Orforglipron, a late-stage GLP-1 receptor agonist, has demonstrated significant efficacy in clinical trials, achieving positive Phase III readouts. The drug has surged in popularity due to its weight loss effects since it was approved by the Food and Drug Administration in 2023. This success has fueled considerable anticipation and heightened the stakes for its eventual pricing.
The Pricing Dilemma: Innovation vs. Accessibility
Ricks has publicly addressed the inherent tension between pricing for accessibility and incentivizing future innovation. He used $100 a month as a hypothetical placeholder that would likely fall short. He argued that drastically underpricing such medications would stifle R&D, effectively "snuffing out the incentive to create the next thing."
The rise of the consumer market for GLP-1s has significantly influenced Lilly's pricing considerations. The company has launched LillyDirect, a direct-to-consumer platform providing a self-pay option for patients, to cater to this growing market. This platform has experienced considerable uptake, contributing to the company's financial growth.
The Zepbound Example: Price Elasticity in Action
Lilly's experience with Zepbound, another weight loss drug, illustrates the concept of "price elasticity." Initially priced at $1,059.87, single-dose vials of Zepbound are now available at Walmart through LillyDirect for $349 per month. This price reduction demonstrates the company's willingness to adjust pricing to meet consumer demand and improve affordability.
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ELI LILLY CUTS COST OF CERTAIN ZEPBOUND DOSES BY AT LEAST 50%. The company said LillyDirect offers savings of 50% or more compared to the list price of similar medicines for obesity. With Eli Lilly's direct-to-consumer platform, patients can access the recommended starting dose of Zepbound for $349 per month. The price sits at $499 per month for all other doses. However, to access the higher doses, patients need to meet the requirements for the Zepbound Self Pay Journey Program, the company said. The partnership between Eli Lilly and Company and Walmart, announced Wednesday, will allow people with a valid prescription to pick up single-dose vials of Zepbound at Walmart pharmacies nationwide or opt for home delivery.
Beyond Weight Loss: Expanding Indications and Competing for "Healthcare Dollars"
Lilly is actively pursuing label expansions for its GLP-1 drugs to demonstrate their long-term impact on other health conditions, such as sleep apnea. The therapy is also being tested to improve cardiovascular outcomes and in multiple combination studies with other medicines Lilly is developing. This strategy aims to position these medications as treatments for chronic diseases, allowing Lilly to compete for "healthcare dollars" from governments and payers rather than solely relying on consumer spending.
Ricks believes that the extensive evidence of long-term benefits associated with these drugs justifies their use in treating chronic diseases, potentially creating entirely new classes of medicines.
External Pressures: Government Intervention and Market Competition
Orforglipron's launch is anticipated amid growing political pressure to lower prescription drug costs. The Trump administration has explored direct-to-consumer platforms to offer medications at reduced prices. While Lilly has not yet signed on to such initiatives, Ricks has been actively lobbying in Washington.
Novo Nordisk, a major competitor in the GLP-1 market, is currently negotiating reduced prices for its semaglutide medicines through the Inflation Reduction Act (IRA) process. Lilly is closely monitoring these negotiations, as a significant price reduction by Novo could impact the competitive landscape.
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LillyDirect and Walmart Partnership: Improving Affordability and Access
Patients will be able to access Eli Lilly's weight loss drug Zepbound at Walmart pharmacies nationwide through its direct-to-consumer program as soon as next month. The partnership between Eli Lilly and Company and Walmart, announced Wednesday, will allow people with a valid prescription to pick up single-dose vials of Zepbound at Walmart pharmacies nationwide or opt for home delivery. Both are enabled through Eli Lilly's direct-to-consumer platform, LillyDirect. Lily's direct-to-consumer platform, which launched in early 2024, is the company's solution to improve the affordability and availability of the blockbuster drug because it allows some consumers to buy medicines directly from Eli Lilly without going through insurance.
This initiative reflects Lilly's commitment to improving affordability and access to its weight loss medications.
Experts' Perspectives on Affordability and Access
Experts have praised the new program for its ability to get weight-loss medications to more people in an affordable manner.Mir Ali, MD, a bariatric surgeon and medical director of MemorialCare Surgical Weight Loss Center at Orange Coast Medical Center in California, agreed that the new program should be helpful since there is still more demand than supply for weight-loss medications.“Making the medication more affordable will increase the number of people who can access it,” Ali told Healthline.Other experts also praised the program as a way to help meet the demand for weight-loss drugs.“People living with obesity have long been denied access to the essential treatment and care needed to manage this serious chronic disease,” said James Zervios, the chief operating officer of the Obesity Action Coalition, in a statement. “Expanding coverage and affordability of treatments is vital to people living with obesity. We commend Lilly for their leadership in offering an innovative solution that brings us closer to making equitable care a reality. Now, it’s time for policymakers, employers and insurers to work with pharmaceutical companies to ensure no one is left behind in receiving the care they deserve and need,” Zervios continued.Caroline Apovian, MD, a professor of medicine at Harvard Medical School and the co-director of the Center for Weight Management and Wellness at Brigham and Women’s Hospital in Massachusetts, told Healthline that although the new Eli Lilly Zepbound plan isn’t optimal, it still should make the weight- loss drug more affordable and more accessible.“I hope other companies will try to lower the price of self-pay drugs for our new obesity medications as well as for type 2 diabetes,” Apovian said.
Ensuring Responsible Use and Combating Counterfeit Drugs
Consumers who utilize Eli Lilly’s savings plan must have a valid, on-label prescription for Zepbound from their healthcare provider. Company officials said this requirement is necessary to ensure that customers are not using the medication for cosmetic weight loss. They added they hope the easier access to Zepbound will discourage people from using untested, knock-off drugs to treat obesity. Ali urged companies to stay vigilant about consumers using alternative medications or using the drugs for purposes other than treating obesity and other serious weight management issues. “The medication still requires a prescription from a legitimate provider. That being said, there will always be people seeking this medication for inappropriate use,” he said.
Novo Nordisk's Perspective on Expanding Coverage
Officials at Novo Nordisk, the manufacturers of the weight loss drugs Ozempic and Wegovy, told Healthline that the key to making these medications more affordable is by expanding consumer coverage through insurance companies and government programs. “The most effective way for the millions of Americans living with obesity to access affordable medication is by ensuring coverage through government and commercial insurance plans,” a Novo Nordisk spokesperson told Healthline. “We will not stop advocating for insurance coverage until all Americans have full coverage for obesity medicines and that becomes the standard, not the exception.”“Novo Nordisk supports additional legitimate options as it creates more safe supply for Americans living with obesity and is a testament to the significant unmet need of addressing obesity as a serious, chronic disease,” the spokesperson added.
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Tirzepatide and Semaglutide: A Comparison of Active Ingredients
Zepbound and Mounjaro contain the active ingredient tirzepatide, a glucose-dependent insulinotropic polypeptide (GIP) receptor and glucagon-like peptide-1 (GLP-1) receptor agonist. Both are manufactured by Eli Lilly. Zepbound is approved for use as a weight-loss medication. Mounjaro is approved as a treatment for type 2 diabetes. Novo Nordisk has two injectable weight-loss medications, both of which include the active ingredient semaglutide, a GLP-1 drug. Ozempic is prescribed to treat type 2 diabetes while Wegovy is used as a weight-loss medication. Novo Nordisk also manufactures Rybelsus, a daily pill that contains semaglutide that is used to treat type 2 diabetes in adults.
Clinical Trial Successes
All these medications have performed well in clinical trials. Last week, researchers reported that in a clinical trial Zepbound and Mounjaro were effective in helping people with obesity or weight management issues maintain weight loss over a 3-year period as well as significantly reducing their chances of progressing from prediabetes to type 2 diabetes. In May 2023, researchers reported that Wegovy helped reduce obesity in half of teens in a 68-week clinical trial. In addition, Ozempic has been shown to lower the risk of death from kidney disease as well as reduce the risk of certain cancers. Some research has indicated that medications containing trizepatide might be more effective for weight loss than those containing semaglutide.