The Exchanges

Q You have four big decisions a year that are kind of grounded in science. How quantitative versus qualitative do these end up being? Are you Rick Rubin where it's all taste based and you just like the feel of this direction? Or are you Billy Bean where it's a Moneyball type, you know, with the ROI pencils and.

A I think the system does a lot of the Billy Bean. I think that's a change at Lilly that's made us more successful. I think we've actually put together a decision process that's quite a bit more rigorous than it used to be. And that leads to fewer bad decisions. That's good. So that's sort of like the, the bumpers on the bowling alley that you put up. So, but then within that, whether it's a strike or a single pin, that's a little bit of the judgment and taste. And there though, you know, wisdom of crowds, I think we have a great leadership team and we all come with equal voice and sort of debate. We actually have a rule to like never decide in one meeting. So you're asking about the day, but we, We, like, come back to it, think about what others said, and kind of push it again.

AI assessment note: “I think the system does a lot of the Billy Bean.”

Q is correct for the rest of it. But where I was going with this is, if you were to listen to this podcast, I think you'd maybe come away thinking, wow, pharma is hard. Like, good god, you know, there's so many things, and you know, things roll off patent, and we have the Chinese competitors, and things like that. So, so what is it that investors have confidence in?

A Well, I think the track record of success. We've been on a growth curve for 12 years or so. It's certainly gone a little more hyperbolic lately, but, um, I think that builds confidence. I would hope some management piece, but also, you know, the, the ability to, um, predict where to move. And I think if you say, okay, what's your recipe? It's an R&D business. The, everything else is around the edges. So you have to create something better for people that improves their health. If you can do that, you're going to win policy, this and that, the commercial strategies, that's the 20, the 80 is this. And I think we do three things better than others. One we talked about already, which is cycle time. It's a basic concept, but if you can make software faster than someone else, you're going to win. And the same in the drug business. The second is prediction of where to tack the investment and allocating a meaningful part to ideas that may not be obvious today, but actually are big problems without markets. And we're drawn to those. That is the third box.

AI assessment note: “Well, I think the track record of success. We've been on a growth curve”

Q long time horizon, but if you're looking at a short time horizon of an insurer or an employer, they don't necessarily. And so, that's great, this challenge for reimbursement where, you know, not as many people reimburse GLPs for weight loss as you think would be rational. Yep. That just will always be the case with prevention, and so how do you actually develop drugs that are commercializable and reimbursable?

A Yeah. Well, in the obesity case, I'll, I'll take a little bit issue with your first assertion and then add two other problems. The, the data actually is becoming more clear that within actually a two-year timeframe, and I hope it's Stripe you reimburse these medicines for your patients or for your, your employees. Within two years, you can, you can break even based on total medical costs. So there's this group called ICER, which is funded by someone who hates our industry and the insurance companies, and they analyze all new drugs. And usually, Seeking to prove that they're not worth it. That's sort of their mission in life. They just analyzed our medicines, trisepatide and semaglutide, and they said, actually, they're both cost effective at current pricing. In fact, Zepbound or Trisepatide was, the threshold they have is to save a 100,000 dollars per person per year in downstream health costs. And it was twice as effective as that at the current pricing. And the current pricing isn't going to stay. Let's be honest. There'll be more competition. The government wants to lower our prices. So, you know, we're, I think we're in a good place there. Now, the two other problems are there's sort of this incumbency problem in healthcare, like many things, but particularly in healthcare, where the last thing in, Is scrutinized the most and the base stack of services and products we use i…

AI assessment note: “The, the data actually is becoming more clear that within actually a two-year timeframe”

Q Do you think we need to spend more time trying to discuss and meta edit the R&D system and incentive system that we have, um, because it just has a such a huge effect on people's quality of life?

A Well, yeah. Thanks for the question. I love to talk about this. So I think a lot about this and I think If your point of view is that we want more new medicines, like that would be a better outcome for the world. Yeah. And I am too. Then I think there's definitely many flaws with the current system. Strangely, most of the discussions I have about this are actually we have, they don't say it out loud, but there's enough new medicine. And what we really have a problem is affording it. Now, interesting fact. In the US, the most expensive healthcare system in the world, we spend 10 cents on the dollar on medicine. The other 90 cents go through everything else that medicine's trying to prevent. Go back to.

AI assessment note: “Well, yeah. Thanks for the question. I love to talk about this.”

Q Exactly, all these kind of roles. What do you think Stripe, Silicon Valley companies should learn from Eli Lilly and, you know, companies like Eli Lilly, but that's where you have experience about talent planning and talent development?

A Yeah, fabulous question. I do notice differences At least on the board I'm on and observing other companies, um, some of that might be just the clock speed of the industry and the technology, and some of it might be the newness of companies. Because if you haven't really seen the cycles play out, It's hard to kind of see the value. You got a problem, solve it, you know, work, work on the next thing, but probably even in your company, which has been around long enough now, I'm sure you have people who are, you know, single digit hires, you know, first few people who've really been excellent. And what they're doing now is nothing like what they started doing. And you should examine, like, what are those? Why was it the experience path they took? Was it innate traits they have combination of those things? You know, we've had a 150 years of that, and I'm the 11th CEO of the company. That's, that's one less than Pope's in that period of time. So that's, it was a special honor, actually, and it's not a lifetime appointment. Um, I can be fired any day, but the first four were family members, and then we've had a lot of long running successful and only one external.

AI assessment note: “You should examine, like, what are those? Why was it the experience path they took?”

Q significant health benefit, and then it leads to them being prescribed more by doctors, because people actually ask their doctors, they do, in fact, do the thing they ask their doctor about them, and it leads to more usage. But yes, people just find the whole thing weird, you know, private for-profit healthcare. And so, do you have a view on where this goes, what we can do about it?

A Yeah. Well, I, not having grown up in a system like Ireland, but I lived in Canada for a while, six years, so I was treated in that. I've seen it. Yeah. I find it weird the other way because that's your conditioning. I think there's good and bad to both. I think actually we were talking about prevention earlier, to some degree primary care. What I experienced in that country was pretty good quality care, very standardized. Which has a confidence boosting thing when it's the same for everybody. That also in specialty care is implemented, but actually to kind of a negative result because take like, um, diagnostics. The US and China have something like 70% of all diagnostic capacity in the world. That's crazy.

AI assessment note: “I think there's good and bad to both.”