DAY (13/15): PRRN CHALLENGE!
Hello! I am Priya, and thank you so much for being here! :)
02/04/2025
Quick disclaimer: There are a lot of medical and pharmaceutical terms mentioned below. Kindly note that this blog is simply to reinforce my learning and spread knowledge. I do not have a pharmaceutical background, so kindly make some provision for scientific inaccuracies, which may be possible! :)
Welcome to Day 13!
Today I resumed Eli Lilly's earnings call once again, and gained a lot of insight into their business strategy, but also the general way of working of most companies in this sector.
NEW DEVELOPMENTS
Yesterday, we covered several new developments Eli Lilly has under its kitty and one of the most prominent ones was Orforglipron. This is an oral GLP-1 candidate, but there were some interesting reasons justifying why it had to be developed in a consumable form as opposed to the generic subcutaneous format.
Firstly 20-25% of the global populations suffers from a fear of needles. Due to this, even though there are patients who could benefit from using obesity centric medication, they simply choose to avoid it. By making an oral candidate, not only is Eli Lilly enhacing patient coverage, but also projecting the image that they actually care about the convenience of the patient, which is a foolproof way to gain patient trust.
Secondly, oral medicines do not need to be refrigerated. This is a highly noteworthy point, as that means these medicines are less likely to go bad. As we already know, the supply of incretins is highly limited, and hence such innovations help in prolonging the availability of medicines among existing patients.
Since the medicine does not need to be refrigerated, its scalability in production is also quite high, meaning we can produce larger quantities of it. The only limitation of oral medication is that it is basically not as effective as sub-Q medicines, as the latter is directly injected into the blood stream.
However, here EL makes a good point. They say that not all patients actually require such a drastic weight loss and hence there is some segmentation within the obesity market too:
1) Ones that require rapid weight loss (who can benefit from drugs like Ozempic, Zepbound, Wegovy etc)
2) Ones that only need minimal weight loss so as to come below the dangerous category (who can benefit from Orforglipron).
Another drug that we discussed yesterday in elaborate detail was Kisunla, which is Eli Lilly's drug for Alzheimer's. An anlayst had posed the point in this earnings call of how companies that are launching Alzheimer's medicines in the recent days, are experiencing very limited growth with these medicines.
Eli Lilly's management had some very precise reasons behind this, and how they plan to overcome it.
1) The biggest challenge with Alzheimer's is actually the diagnosis. There just isn't enough infrastructure in place that can support early diagnosis of alzheimer's, and hence Eli Lilly is collaborating with various healthcare providers to provide them training on how to identify these diseases immediately.
Once this step is accelerated, they'd be able to maximize the growth of their drugs. This is also a great way to build a rapport with prescribers, so they'd be happy to recommend our drugs to their patients.
2) Another challenge with Alzheimer's is the capacity constraints. It is an extension of the same problem where hospitals do not have the infrastructure to support the growing number of patients suffering from Alzheimer's.
To support this the company is once again bringing in unique features to their products. For example, there is a once-monthly-infusion feature in Kisunla that reduces the workload from the healthcare provider's end.
This is truly a result of very elaborate clinical trials where a variety of outcomes are tested in order to market a portfolio that is not just effective but also convenient and resourceful for patients.
ACCESSIBILITY
Accessibility here, refers to the amount of insurance coverage Eli Lilly's drugs are able to get.
In US, there has been a rising trend of 'employer opt ins', where employers are contributing to their employee's insurance schemes, which enhances the coverage this drug can get under commercial insurances.
This is important, because it simply contributes to wider accessibility and protection, in case the government decides to opt out specific medications from their Medicare/Medicaid program.
It is also useful that the company is continuously adding new labels to their existing blockbusters. For example, Zepbound has now gotten the approval for being the only drug that can be used for Obstructive Sleep Apnea.
Since OSA is one disease which does not have many alternatives available, and can be life threatening as well, this label puts Zepbound directly in the eyes of Medicare and Medicaid providers, who might be willing to enhance the reimubursements offered for such drugs (as part of a social aim).
Another big part of gaining insurance coverage is ensuring that the company consistently delivers on its promises. When a company can show that its drugs have consistently been able to fulfil its promises, it creates a positive impact on insurance companies, who would be able to cover those medicines in a larger reimbursement scheme.
The only way this can happen is if the company is able to conduct high quality clinical trials. I read an interesting article that discusses how in the pretext of launching a drug 'quickly' into the market, pharma companies tend to under-report adverse events, or provide very vague information in their reports, that make it challenging for medical practitioners to make critical decisions surrounding it.
In return when the drugs do make it to the market, it is often causing numerous side effects on patients or they simply don't work. This reputational damage is far more serious to pharma companies, as this could severely limit insurance coverage for their drugs reducing its accessibility and hence earning potential.
Thus all pharma companies must ensure they allocate sufficient budget into their clinical trials, enhancing the diversity of the participants involved and verify a variety of different outcomes before the drug is sent for approval.
Overall a consistent focus on innovation and R&D is extremly crucial in pharma and this is how Eli Lilly has been making strides in its space.
I'll see you on Day 14! :)
Comments
Post a Comment