Episode Overview

Podcast: In Good Company with Nicolai Tangen
Guest: David Ricks, CEO of Eli Lilly
Release Date: February 21, 2025
Theme: The episode highlights David Ricks' leadership at Eli Lilly, with a focus on their breakthrough GLP-1 drugs, implications for obesity and related diseases, the company’s approach to AI in drug development, the differences between US and European markets, and the ethical dilemmas of drug pricing.

Key Discussion Points & Insights

1. The Weight-Loss Drug Revolution (GLP-1s)

• GLP-1 Discovery and Evolution

  • Eli Lilly has been working with GLP-1 agonists since 2006. The class of drugs, now including tirzepatide (dual-acting: GLP plus GIP), has become the centerpiece of a revolution in treating not just diabetes but also obesity and potentially other conditions (00:45).
  • David Ricks: "Oftentimes we know the major theme, but making a molecule ... that can achieve optimal outcomes takes time and effort. We're now on our third generation of these drugs." (00:45)

• Serendipitous Side Effect: Weight Loss

  • Weight reduced as a side effect; initially, not the primary goal (01:50).
  • Anecdote: "The cover of our annual report in 2007 has a woman who took this medicine and she said, 'My diabetes is under control and I'm losing a little weight. People say I look better.'" (David Ricks, 01:56)

• Wider Implications:

  • The drugs also appear to benefit cardiovascular, liver, and kidney diseases, along with possible effects on addiction and even dementia due to their influence on the brain’s desire centers (02:20 - 02:45).
    • "Our stomach, our gut secretes after we eat, tells our brain that we're full and that is also affecting alcohol consumption, cigarette smoking, other kind of hedonic behaviors humans have." (David Ricks, 02:45)

2. The “Blue Sky” Potential of GLP-1 Drugs

• Looking Ten Years Ahead:

  • Ricks envisions a future where weight management is a choice for most people, not an affliction (03:18).
    • “Weight management will become more like a choice than an affliction. And that's good.” (03:30)
  • The scope of impact is vast: these drugs could significantly reduce downstream diseases from obesity, which comprise about 40% of healthcare costs in developed economies (03:46).
    • "We may be serving less than 20 million people on the planet and there might be a billion people with overweight or obesity…" (David Ricks, 04:24)

• Scalability as the Main Challenge:

  • Current production can only serve a fraction of the global need—making these benefits widely accessible is an enormous, unresolved challenge (04:24).

3. Artificial Intelligence in Drug Discovery

• Current Role:

  • AI is described as a granular, not magical, tool—improving predictions, experiment selection, and efficiency in drug development (04:44).
    • "I do not think we're close to… turn on a computer and… invent new drugs. Wet lab validation and having really strong data sets to make predictions is critical." (David Ricks, 04:55)
    • At present, AI helps “knock out” projects unlikely to succeed and amplifies productivity by informing better decision-making earlier (05:15 – 05:40).

• Future Outlook:

  • AI’s greatest near-term value is optimizing scientist time and expediting laboratory work, but full drug discovery by AI alone is still quite far off (05:40 – 06:00).

4. US vs. Europe: Drug Development and Market Access

• Similarities in Science:

  • Eli Lilly operates significant R&D in both continents; drug discovery processes are similar (06:06).

• Differences in Adoption:

  • Europe is notably slower than the US in adopting and integrating new therapies due to government approval processes, impacting both patient access and commercial viability (06:25).
    • "The adoption of technology in Europe is super slow and in the US is quite a bit faster. … We're on the clock with our patent life… it's really a waste for patients for us, but also for patients who can't access the medicine." (David Ricks, 06:33)

5. Pricing, Ethics & Access

• Ethical Dilemmas in Pricing:

  • Ricks articulates the tension between delivering innovation and ensuring affordability, with balance between fair returns and broad access (07:13).
    • Quote: "What is a fair return for an innovator? … [It’s not] what the market will bear." (David Ricks, 07:20)
    • “You can get into price points that are really exorbitant and maybe make a short term return, but you'll probably be either legislated or sued out of business if you pursue that forever.” (David Ricks, 07:34)
  • The company employs a value-based pricing approach: capturing some, but not all, direct and indirect value created (08:00).
    • Cites evidence that absenteeism declines and joint replacements slow in populations on these drugs, suggesting there’s holistic value beyond the health system alone (08:20).

• Patent-Driven Innovation:

  • Ricks stresses the “gifts” given after patents expire—generic drugs become effectively free to society (as with Prozac) (08:40).
    • "We invented Prozac, … a standard of care globally … [Now] it costs in major markets about 4 or 5 cents a day." (David Ricks, 08:50)
    • "We capture some, not all, of the value … during patent period. … Everything we invent goes to zero for us and goes to infinity for society." (08:30, summarized)

Notable Quotes & Memorable Moments

• On Drug Development:
  “Oftentimes we know the major theme, but making a molecule, making a medicine that behaves with properties, that can achieve optimal outcomes takes time and effort.”
  — David Ricks (00:48)

• On Serendipitous Weight Loss:
  “It was not the design goal for that drug… But it was a positive side effect.”
  — David Ricks (01:56)

• On the Vision for the Future:
  “We can easily say that weight management will become more like a choice than an affliction. And that's good.”
  — David Ricks (03:30)

• On Expansion Challenges:
  “Right now… we may be serving less than 20 million people on the planet and there might be a billion people with overweight or obesity…”
  — David Ricks (04:24)

• On AI in Pharma:
  “I do not think we're close to… turn on a computer and… invent new drugs. Wet lab validation and having really strong data sets to make predictions is critical.”
  — David Ricks (04:55)

• On Europe’s Slow Adoption:
  “The adoption of technology in Europe is super slow … and that's a problem for us.”
  — David Ricks (06:33)

• On Pricing and Public Value:
  “We capture some, not all, of the direct and indirect value we create during the patent period. … Everything we invent goes to zero for us and goes to infinity for society.“
  — David Ricks (08:30)

Key Timestamps for Important Segments

• 00:45 – GLP-1 drug innovation and history
• 01:56 – Initial weight loss as a side effect
• 03:18 – 10-year “blue sky” forecast for GLP-1 drugs
• 04:44 – The role of AI in drug development
• 06:06 – Comparing US and European market development
• 07:13 – Pricing and ethical dilemmas
• 08:40 – Generics and the societal benefit post-patent

Summary

This episode offers a concise yet deep dive into how Eli Lilly’s innovations—especially in GLP-1 therapeutics—are reshaping not just pharma but global health expectations around obesity, chronic disease, and even addiction. Ricks provides a candid look at the scientific journey, the hurdles of commercialization, the practical use of AI, and the ever-present ethical balancing act around pricing and accessibility, all in the context of the world’s biggest health and economic burdens.

Listeners come away with not only a strong grasp of Eli Lilly’s strategy and ambitions but also thoughtful commentary on the interconnected challenges of science, markets, and society.