Inside the GLP-1 Gold Rush: Eli Lilly CEO on New Breakthroughs, Addiction & Mental Health, Pricing

Speaker 1 GLP1 drugs have become increasingly popular.

Speaker 3 Eli Lilly, coming to save us here, has had its market capitalization increase by about 860% since he became CEO, and the stock price is up a little bit more than a thousand percent.

Speaker 1 No need for needles. Eli Lilly says it has a pill.

Speaker 2 Eli Lilly's experimental pill appears to work as well as the injected drug.

Speaker 5 It's everyone's job to move the science.

Speaker 8 We should always be pushing forward.

Speaker 9 Ladies and gentlemen, please welcome Eli Lilly CEO, Dave Ricks.

Speaker 9 How are you doing, Dave?

Speaker 9 There, there. How are you?

Speaker 9 Hi, David. Good to see you.

Speaker 10 Good to see you.

Speaker 10 Dave?

Speaker 11 All right.

Speaker 11 You want to say thank you? What's happening?

Speaker 4 I just want to. Oh, what do you want to say, Von?

Speaker 11 Dave? Yes. I don't want to make it awkward.

Speaker 12 But we were sitting here three years ago on this pod, and Shamath was calling me a fat bastard.

Speaker 12 He wasn't wrong. I was 213 pounds.
I'm a Schvelt, 172 round.

Speaker 4 Awesome.

Speaker 12 And it's because of what you've done.

Speaker 13 Thank you.

Speaker 14 Can I give you a hug?

Speaker 4 You can, yeah. Bring it in here.
Bring it in here.

Speaker 15 I appreciate it. Congratulations.

Speaker 12 Also, Sachs lost 20 pounds, so together we've lost a Freedberg.

Speaker 4 Ben Sachs, give them a hug. Come on.

Speaker 4 Nice.

Speaker 4 Nice.

Speaker 16 How much money are you guys printing?

Speaker 4 My lord.

Speaker 11 What do you do with it? You have wheel barrels?

Speaker 4 What are you doing with it?

Speaker 17 Can I please start? Yes, go ahead.

Speaker 4 Okay, sorry.

Speaker 11 I got four more jokes.

Speaker 12 I'll get them in the end.

Speaker 2 I mean, you really have built one of the most incredible businesses in America, but you've done it because you took an enormous bet a long time ago.

Speaker 18 Yeah.

Speaker 2 Do you want to talk us through the journey and the process you had to go through and what you saw early on and how you made the bet on this class of drug.

Speaker 22 Yeah, great. And thanks for having me here.

Speaker 24 I'm trying to up my cool factor.

Speaker 25 That's what they tell me in the Midwest I need to do.

Speaker 11 Did you get a Tomas Ford suit as well?

Speaker 4 No, I'm actually disappointed in the tithes.

Speaker 28 I don't know. That's not...

Speaker 16 No, you and I are...

Speaker 15 I'm a guy who wears tithes.

Speaker 12 Dave, Suit Supply does a great job.

Speaker 28 Just donate.

Speaker 23 Okay, there we go. Just donate.

Speaker 26 Okay, so yeah, GLP-1 drugs.

Speaker 30 We all know about it.

Speaker 31 It feels like an overnight success, but what happened? You know, drug development is hard and long and requires a fair amount of failure and discipline, a huge amount of capital.

Speaker 34 So actually in 2006, we launched the first GLP-1 drug.

Speaker 30 Nobody really knew the name of it.

Speaker 37 It was a twice-a-day injection for diabetes, but the cover of our annual report in 2007 had a lady on it, and she said, there's a quote.

Speaker 32 It says, my diabetes is under control and I'm losing a little bit of weight.

Speaker 5 So that was 18 years ago.

Speaker 39 I mean, and since that time, we're now, we've been inventing new versions of that, solving various problems with that twice a day.

Speaker 5 We wanted to make it more convenient, needed to get the dose up, and people tended to lose weight, more weight when you got the dose up.

Speaker 43 And then Terzepatide, which you asked how much money we're making, but actually in Q2, we reported global sales, which surpassed Kytruda to becoming the best-selling drug in the world, actually, the best-selling drug in the world of all time in Q2 this year.

Speaker 12 How much did it make in Q2?

Speaker 30 $8.1 billion in revenue.

Speaker 24 And

Speaker 20 growing at 80%, yeah.

Speaker 12 And how many people are on a GLP-1 globally now?

Speaker 22 I'd estimate around 20 million take prescription GLP-1s.

Speaker 46 Some unknown amount of people take non-prescription.

Speaker 12 But anyway, so that would be compounding?

Speaker 19 Compounded or synthetic.

Speaker 6 Yeah, or just like not for human use.

Speaker 18 We can talk about all that, yeah.

Speaker 41 So anyway,

Speaker 44 2014 comes along.

Speaker 47 Four scientists at Lilly decided to combine GLP-1 with another peptide that your stomach produces when you eat that's appetite suppressing. They made this single molecule called terzepatide.

Speaker 25 That's what's Manjaro now. But that happened in 2014.

Speaker 33 2016,

Speaker 8 I was named a CEO and I got a call that fall and one of our chief scientists called me and said, hey, we have to stop an early phase study for terzepatide.

Speaker 23 That's usually a bad call.

Speaker 5 So I'm like, ah, sh ⁇ , like this is the follow-up to our second-gen version of the GLP-1.

Speaker 8 He said, no, no, it's actually good news.

Speaker 33 We were running this study in Singapore with healthy male volunteers.

Speaker 49 You can imagine what a healthy male Singaporean looks like at baseline.

Speaker 4 They're not overweight.

Speaker 36 And we had to stop the study because they were losing too much weight too quickly.

Speaker 50 They were basically not eating.

Speaker 23 So the scientists are like, actually, it's good news.

Speaker 5 We can tune the dose down.

Speaker 20 We can work with this.

Speaker 42 And from there, it was kind of just execution.

Speaker 5 We knew it was going to be huge.

Speaker 44 And we started building out supply chain, building out factories, running a massive clinical program.

Speaker 44 We currently have over a hundred clinical studies with the medicine going on for all kinds of other uses as well, not just slowing it down.

Speaker 2 We're going to go there in one sec, but I just want to go back to this. So

Speaker 2 the problem now, and maybe you can comment on this, is you have this enormous success.

Speaker 2 There is a very active gray market, particularly in China, peptide synthesis that are producing drugs that are basically the equivalent of your drug,

Speaker 2 working around around copies.

Speaker 2 Talk to us about that. How do you deal with that? And what do you do about that? And what should people do about that and when they encounter it?

Speaker 51 Yeah.

Speaker 42 It's an unusual situation.

Speaker 8 I think there's always been counterfeit medicines.

Speaker 8 We're not used to it in the United States because we, one, have a, for most people, a pretty good system to subsidize some of the benefit via the insurance markets.

Speaker 8 So there's not a lot of incentive to go outside the system.

Speaker 7 That's different for these drugs because insurance quality is poor.

Speaker 36 I I don't know if you bought out of your own pocket, but most people have.

Speaker 25 And so did you pay out of pocket?

Speaker 12 Well, interestingly, when I first got it four years ago, I had this revelation when I was in Forto de Marme, and I had heard Tim Ferris talk about it on his podcast with a friend of mine, Kevin Rose.

Speaker 12 And I went to my doctor and I said, hey, I want to get on this. He said, what is that? He said, oh, no, you don't need that.
That's for people who are diabetic. You're not even pre-diabetic.

Speaker 12 I said, I want to do it for weight loss. It's off-market.
He said, I don't know if I can do that. I said, I'm going to get a different doctor if you don't.
And he said, let me try.

Speaker 12 And he got it on prescription. After I lost 20 pounds and my BMI got below 30, which really, I mean, I don't want to get emotional, but I got three daughters.

Speaker 46 I want to stick around.

Speaker 12 And it really changed my life incredibly. And in many ways, I was embarrassed that I couldn't have the discipline to do it.

Speaker 12 And then I realized there was a food noise that I had that was constantly screaming.

Speaker 12 And once I cycled off of it for many months, and now I'm on extremely low dose, the food noise and my discipline has come back. There's something about a certain moment where you get too far over it.

Speaker 12 So now I do have to hang out with you.

Speaker 11 You've always bought the branded drug? Yes.

Speaker 16 You've always bought his branded drug.

Speaker 12 I think

Speaker 12 the question I have for you about this big picture is there's a lot of demand for it. It is still a bit too expensive.
You're wildly profitable. There's going to be a pill format, I think.

Speaker 26 Yeah, that's ours.

Speaker 6 That's

Speaker 15 coming next year.

Speaker 12 So is there some thinking when you're

Speaker 12 head hits the pillow, hey, I'm having such a profound impact on so many people's lives.

Speaker 12 All of the diseases we have are downstream of obesity. We know that.
This thing is helping with many other things. Do you have a moral imperative to bring this down

Speaker 12 50% in price? I would think that must weigh on your conscience that it's too expensive and you're too profitable in a way.

Speaker 12 And there's shareholders who want you to print money, but there are lives at stake here. And there's longevity and there's health spend.
So maybe unpack that.

Speaker 6 Yeah, we're committed to bringing the pricing down.

Speaker 23 And I want to come back to the supply situation because that led to some of the compounding, but also affects pricing.

Speaker 25 You know we've we've led in reducing the out-of-pocket cost from it was originally $1,000 now it's $4.99 from us.

Speaker 44 We'll push that down further with new medicines like orals.

Speaker 52 That's the goal for orals.

Speaker 19 The main goal is to get it reimbursed.

Speaker 8 Why is it we pay for anti-hypertensive drugs that the moment you stop taking them you have the same exact risk as before but we don't pay for anti-obesity drugs?

Speaker 44 That makes no sense to me.

Speaker 7 Why do we pay for surgeries that don't work but we don't pay for these?

Speaker 12 What's the number on the pillar? What's the target? You can tell us.

Speaker 24 Yeah, I don't have a target in my mind, but it lowers the direction.

Speaker 29 Two or three percent.

Speaker 29 We've told the street expect single-digit deflation in this category over time.

Speaker 12 5% a year it goes down?

Speaker 11 Or more, yeah.

Speaker 12 Or more, 10%, so you get it down for 5%.

Speaker 53 But here's the risk, Jason, is if we cut the price to, say, I don't know, $100,

Speaker 41 there will be no more new medicines in this category.

Speaker 4 Okay.

Speaker 8 Because we'll have snuffed out, essentially, the incentive to create the next thing.

Speaker 47 R ⁇ D, yeah. So we have to balance that.

Speaker 33 We want to create the next better medicine.

Speaker 25 We spent 25% of sales on R D.

Speaker 36 This year, that'll be $14.2 billion.

Speaker 43 Wow.

Speaker 47 That has to get paid for.

Speaker 4 Of course, it has to be a lot of pressure. And get paid for through revenue.

Speaker 55 So with the cash flow that the business is generating, is that how you think about capital allocation? Some percent to RD, some percent, I'm assuming, to CapEx and supply chain durability,

Speaker 55 some percent maybe to buybacks. I mean, how do you think about where the capital should be allocated?

Speaker 55 And maybe on the RD side, you can tell us a little bit about diversification and how else you think about deploying capital.

Speaker 36 Yeah, well, I think we've had had this totally asymmetric success, so what do we do with it?

Speaker 48 I think one version of it is to sort of play out the cash flow game, return it to shareholders, and return at some future date, remembering that in Pharma,

Speaker 39 we have no enduring franchise.

Speaker 36 Everything we make goes to zero because of the patent system.

Speaker 46 So in 2030 something, Manjaro will go to zero.

Speaker 25 And so should we think about our company as one that will just return to the previous baseline, send all that money back to our shareholders who took that risk over 15, 20 years with us and pay them back that's a little bit like I don't know how kind of Apple is running their company right yeah and that's viable that's great for shareholders I don't and at Lily we think about our job a little differently we want to create a solution to some other problem people have and we think we're good at that and can uniquely do it so we should try we should not try to no end that's wasteful you can just bury all that money and that's sort of the history of the industry is people have found success wasted money they go back to the baseline anyway but the shareholders don't get rewarded.

Speaker 56 So

Speaker 49 we're running this experiment now, we're betting a lot on organic R D build out.

Speaker 47 We currently have about 4,200 PhD scientists at Lilly.

Speaker 8 By the way, it's about the same as MIT and Harvard combined.

Speaker 25 So the scale of the science enterprise is huge.

Speaker 2 Dave, how do you push people on the risk spectrum? There's a tragedy of riches that can happen because you're so successful, there's this one drug.

Speaker 2 There could be like some emergent scientist in your organization who wants to take a long shot but then just doesn't feel motivated because like, oh, it's just like this is not going to do anything.

Speaker 2 How do you get that person unlocked so that they go for the big moon shots?

Speaker 25 You mean that their idea isn't big enough to matter?

Speaker 2 They think that, but they may not know. They may stumble in a different path.

Speaker 15 I don't think that's our bigger problem.

Speaker 44 I think in big companies in general and pharma companies maybe in particular, the bigger problem is people thinking they have a big idea but having no way to advance it.

Speaker 25 So I'm trying to work on that side, which is if you think you have something that could be big, how does it become easier to advance your idea in our company versus leaving us and raising money in venture?

Speaker 58 We can talk about venture and biotech in a second because it's totally

Speaker 11 broken right now.

Speaker 59 But anyway, back to David's question.

Speaker 33 So first priority, invest in organic R ⁇ D.

Speaker 31 Secondly, build out the supply chain.

Speaker 44 What's different about Manjaro and the follow-on drugs is they're injectable drugs.

Speaker 47 These are very capital-intensive, technically difficult.

Speaker 8 things to scale.

Speaker 36 We've committed with President Trump to build all that in the U.S.

Speaker 58 We're currently constructing six plants.

Speaker 40 We're going to announce four more in the next six months.

Speaker 8 I was hoping to be able to announce one today, but they'll come in a few weeks.

Speaker 54 So, yeah.

Speaker 59 This is creating 20,000 construction jobs in this period and ultimately 5,000 or 6,000 manufacturing jobs.

Speaker 37 And so we'll become a net exporter at scale for these.

Speaker 15 And unless some Chinese state-owned enterprise gets in this business, it'll be very hard for others to build that out and follow.

Speaker 12 Well, they're doing it in the car business, so.

Speaker 28 If they're determined, they might.

Speaker 33 But then the final is actually to buy external innovation where it makes sense, to tuck it in.

Speaker 23 And maybe that leads us to biotech market.

Speaker 2 You bought that gene therapy, right?

Speaker 59 Yeah, we recently bought a gene therapy company in June. We can talk about that.

Speaker 36 But we're doing a deal about every two weeks.

Speaker 34 Most of them are small-ish.

Speaker 58 Biotech funding right now is in a dumpster fire.

Speaker 30 Peak got to about 20 billion in new checks a year into biotech.

Speaker 21 We're now around five.

Speaker 4 Just walk the audience through the dynamics.

Speaker 60 Why is biotech cratered? Why is it so hard for capital to flow back in?

Speaker 55 What are the dynamics that are driving this market condition?

Speaker 58 I think there's many factors, but the first one is competition for other venture ideas driven by the industry you guys are in.

Speaker 44 So there's just a crowd out going on with AI and other things that if your cycle time to return is just more visible or faster, biotech is hard and slow.

Speaker 17 Secondly, I think too many biotechs IPO'd in the last decade, and so the liquidity market has sort of collapsed because there's a lot of investors deeply underwater.

Speaker 27 Half of biotech that's publicly traded is trading at or below cash.

Speaker 29 So

Speaker 48 investors look at that and say, what's my future here?

Speaker 40 Unless you can really analyze the technology and take a differentiated bet on the drugs they're working on, I think general investors don't want to participate in that.

Speaker 8 And then you have China, which is the other factor, right?

Speaker 25 So China is investing heavily like they do every other state-owned thing.

Speaker 59 They're They're subsidizing their own companies.

Speaker 39 They have like a swarm model here where they'll subsidize many small things really against follow-on ideas, betting they can execute faster than us.

Speaker 23 It's a national priority for a long time.

Speaker 11 Can you talk about the other IP

Speaker 55 issue there, the patent and IP issue? So in the U.S., you know, when we make a filing and what goes on with the patent system.

Speaker 12 They just don't respect any of our IP, do they?

Speaker 52 Well, I think right now they are okay

Speaker 44 amongst, so if I have a patent and I file and launch a product, I don't see immediate copies because it's in their interest to have a patent system right now for the reason you're raising.

Speaker 25 So we changed the patent laws in the US in 2011, I think, the American Invents Act, where it's first to file.

Speaker 17 It used to be first to invent.

Speaker 32 And all the patent litigation we had was all about whose lab notebook said January 5th versus January 4th on this invention.

Speaker 54 That was the case.

Speaker 31 Not did you file it in a reasonable time, but did you invent it first?

Speaker 17 Now it's first to file.

Speaker 42 So there's no question about who, we don't care who invented it first.

Speaker 25 It's just who got into the patent patent office.

Speaker 31 As a consequence of that, our biotech companies, and big companies like Lilly, Pfizer, et cetera, we file as soon as we can because we don't get beat on first to file.

Speaker 15 What does that do?

Speaker 5 A patent exposes the invention to the world.

Speaker 44 China's getting very good at patent hacking.

Speaker 58 So what they do is they look at that chemical structure, they work backwards, sometimes driven by AI, algorithms to find chemical structures that will behave similarly, but are outside the patent scope, and they go fast.

Speaker 29 So they're really quite a derivative biotech market, but that is also also hurting biotech valuations in a significant way.

Speaker 46 How old are you? I'm 58.

Speaker 15 You're 58. You look great.

Speaker 51 Thank you.

Speaker 15 You look like 40.

Speaker 4 What do you want? What's off the menu? You feel

Speaker 4 me?

Speaker 4 Come on.

Speaker 11 You look great.

Speaker 12 You got some off-the-menu stuff going on. What do you got?

Speaker 4 You're on the Wolverine. I think you are.
Are you on BPC1?

Speaker 11 It's actually an interesting question.

Speaker 60 What is your lifestyle routine?

Speaker 11 Do you supplement? Is there anything else you're doing?

Speaker 15 Do you have Brian Johnson coming?

Speaker 28 Okay, I follow him on Axe.

Speaker 56 I'm not doing the Brian Johnson person.

Speaker 28 He's the opposite of you.

Speaker 16 He looks like he's dying.

Speaker 4 Right, you're handsome.

Speaker 12 That guy looks like he's turning into Lestotte.

Speaker 11 That's a vampire. There's another Brian Johnson, the liver king.

Speaker 61 I don't know if you ever followed him.

Speaker 28 Yeah, both of these guys are taking it too far.

Speaker 18 But seriously, beat the business.

Speaker 15 I get up early.

Speaker 53 I work out.

Speaker 15 I read.

Speaker 53 Try to go to bed early.

Speaker 12 Sleep is important. Sleep.

Speaker 23 There's like four things in life that I think really matter where there's evidence.

Speaker 25 Sleep, eating healthy foods, mostly plants, movement, and social relationships.

Speaker 15 I think those are the things that over time,

Speaker 12 because I got a meditation app if you got a few of them.

Speaker 4 My wife tried to get me to do that.

Speaker 11 My wife tried to get to that.

Speaker 21 Have you tried yours?

Speaker 2 Have you been motivated to try some of these drugs prophylactically?

Speaker 61 You know, people ask me if I've used the GOP1 drugs.

Speaker 41 I haven't, but

Speaker 56 yet is my answer. Because

Speaker 39 what's happening, as with all medicine technologies, you start with the sickest, the most extreme cases, and you work your way as you prove safety to general use.

Speaker 44 I think what we're seeing now with the broad benefits, everything from metabolic disease, less drinking, lower inflammation.

Speaker 6 Our competitor Nova is going to read out a study in a few months on dementia risk.

Speaker 48 It probably won't be positive, that's my guess, but it will probably be in the right direction.

Speaker 53 So you have these sort of general, what scientists would say, pleotropic effect, like broad-based positive things.

Speaker 17 I think we're going to get to a point where taking pretty low doses for most people, say over 60, 58.

Speaker 33 Do you have that?

Speaker 25 Is not a terrible idea.

Speaker 26 It may help you live longer.

Speaker 12 I just want to follow up on this one specifically.

Speaker 12 These peptides are becoming quite the rage in the biohacking space. Have you been tracking the Wolverine Protocol BPC 157 and the tremendous impact people are reporting from it?

Speaker 44 There's lots of communities like this trying different things.

Speaker 11 We don't ever recommend that because we live in a world of clinical studies and FDA approval.

Speaker 15 But you watch it.

Speaker 19 Of course, yeah.

Speaker 12 And what do you think of those specifically?

Speaker 11 Are you pursuing them?

Speaker 45 There are broad, well, we're pursuing them in the path we do, which is taking those disease states or people with the pre-disease state, like pre-diabetes, and then we study it and we prove an outcome.

Speaker 58 So we did that with Manjaro and showed a 93% reduction in conversion from pre-diabetes to diabetes.

Speaker 25 That's kind of how we work, is like slicing the medical stack.

Speaker 48 These guys are coming at it the other way, which is sort of saying, I'm already healthy.

Speaker 15 Can I generally stay healthier with small doses or other regimens, supplements?

Speaker 36 That's not our game, but we watch it.

Speaker 2 There's a handful of drugs that I would say are epidemically prescribed in America. Probably at the top of the list would be SSRIs and antidepressants.

Speaker 2 And there's a lot of anecdotal evidence that GLPs and this class of drug actually is quite helpful with just the psychological

Speaker 2 health of an individual.

Speaker 2 Can you talk to us about that? Like what's ongoing? What is a readout that you think could be transformational in that space?

Speaker 21 Yeah, so this is interesting.

Speaker 35 I mean, sometimes we engineer a medicine to do something, like we did GLP, GIP, terzepatite, to reduce body weight, lower blood sugar, and lipids.

Speaker 5 And then sometimes along the way, you discover an effect you didn't predict.

Speaker 33 So one of those is like smoking cessation.

Speaker 25 When we started doing these studies at scale, it was immediately obvious.

Speaker 50 People stopped smoking.

Speaker 11 Like a lot of people stopped smoking.

Speaker 10 Also, gambling.

Speaker 40 Gambling and online shopping, all kinds of businesses.

Speaker 12 This is why Kimat's on it, because he was stuck in the game.

Speaker 4 Poker's not gambling, but go on.

Speaker 27 So, anyway. I was talking about craps.

Speaker 32 So, then there have been reports, and there's a big VA study that read out, and we know our veterans suffer from a lot of mental health.

Speaker 49 Yeah, and there were pretty dramatic reductions for those that were using GOP1s who had diabetes.

Speaker 31 So, we are now, right now, starting studies in bipolar disorder and major depressive disorder, along with these addictive, hedonic pathways where you're sort of self-medicating with a new GOP-1, a different one, that probably has a little less weight loss, but a little more brain activity.

Speaker 28 Really?

Speaker 35 So dialed in for these uses.

Speaker 15 So we'll get that drug in three or four years if it works.

Speaker 42 And I think it could really change some of these terrible mental health conditions.

Speaker 2 Well, can you take a step back maybe and jump off from SSRIs?

Speaker 2 Give us a description of the landscape of the American human health, the Maha movement, you know, what Bobby and his team are now doing at HHS.

Speaker 32 Yeah, long overdue.

Speaker 42 I mean, I think the food system in particular,

Speaker 31 you're working on this, but it could be changed in a much more positive way.

Speaker 19 I think we are the least healthy metabolic big country and probably the reason for that is the food we feed ourselves.

Speaker 11 Processed food. Processed food chemicals.

Speaker 17 Highly processed food, chemicals.

Speaker 7 this whole carb thing that went on for 30 years, which has been totally debunked.

Speaker 44 And food companies have a lot of influence and they've

Speaker 11 the low carb or no carb thing?

Speaker 19 The anti-fat, high-carb diets, which we were feeding people for 30 years, and I think most people don't believe in that anymore, but it led to a big part of the obesity curve, glycemic index kind of thing.

Speaker 36 So I'm all for all that.

Speaker 40 And I think we should reform that and find ways to make quality food cheaper and more accessible for all of you.

Speaker 12 Bobby Kennedy, you like that he's shaking it up. It's a big part of the world.

Speaker 53 I think that part, I think we have a lot of alignment on.

Speaker 41 I worry about,

Speaker 47 I'm all for skepticism of science.

Speaker 17 That's what the scientific process is: is questioning and challenging.

Speaker 32 I worry about some of the stuff going on with vaccines right now because I don't see why we're

Speaker 31 asking these questions. But it's okay to ask them, but if we restrict access while we're asking them, I worry about that.

Speaker 36 That hasn't really affected the medicine world.

Speaker 37 We don't make vaccines, but at least recently we have.

Speaker 12 Let me ask you a hard question. Yeah.

Speaker 12 The mainstream media, in many cases, make 25-50% of their revenue off of advertising from companies like yours. Yes.

Speaker 12 We allow you to advertise. Should we allow you to advertise? And have you captured that mainstream media? Is that the intent when Anderson Cooper makes double digits of his money from your firms?

Speaker 8 Well, I would be for a system where we don't have nearly as much drug advertising.

Speaker 18 So you can do that. To be clear.
Yeah.

Speaker 16 Yeah.

Speaker 4 That's paradoxical.

Speaker 12 How do you then you just want to rise

Speaker 11 based on your reputation?

Speaker 17 It's mutually assured destruction, right?

Speaker 23 The ads annoy people.

Speaker 44 They're poorly constructed.

Speaker 25 Why?

Speaker 59 Because of a regulation built, believe it or not, if you read the regulation, 1992, FDA published a regulation on advertising built for magazine print advertisements.

Speaker 61 Yes.

Speaker 44 And now we have to follow that regulation for TV advertisements, which is why you have the scrolling side effects as if they were printed on the back of the ad.

Speaker 20 That's literally how we're here.

Speaker 19 So the ads are poor.

Speaker 39 They don't represent the patients we're serving, et cetera.

Speaker 28 By the way, more than half of our consumer spending to reach consumers is not on TV.

Speaker 37 So already the technology. Does it work for you?

Speaker 12 Does it move the needle when you do a big ad buy?

Speaker 7 It does, unfortunately.

Speaker 57 That's why people keep doing it.

Speaker 7 Of course, the productivity of that is debased when your competitor does it, but then everyone wants to go up above the network.

Speaker 12 That's a prisoner's dilemma. Yeah.

Speaker 27 A little bit.

Speaker 47 So I would be for a system where that got reduced.

Speaker 17 There's been a lot of legal actions that said,

Speaker 7 that were fought over this through the years, and it's pretty clear under First Amendment we can do it.

Speaker 29 It's hard to regulate.

Speaker 47 There's been some efforts in Congress to tax it differently.

Speaker 44 I'm okay with that. It doesn't move my needle at all.

Speaker 12 I'd rather see that money go into R D, I would say.

Speaker 46 R D or legitimate ways to reach patients.

Speaker 36 I think consumers need to play a bigger role in their health care.

Speaker 48 I think that's part of what Maha is about is a reaction to the system hasn't served me. The experts haven't served me.

Speaker 36 So I think people need better information.

Speaker 44 It could come from us. That's great.

Speaker 25 I just think on TV, probably...

Speaker 55 Yeah, you're not going to know what's available off the shelf, you know, on the doctor's shelf to you without any sort of knowledge or information.

Speaker 41 Truth is, most primary care doctors are way too busy to even attend a continuing education, even know what's happening.

Speaker 12 What do you think of people using chat GPT and large language models to do their research, and then they come to their doctors, sometimes with much deeper research than the doctor's aware of?

Speaker 12 Is this a plus or a minus? Do you trust it? Do you do it yourself?

Speaker 54 I think it's a huge plus, I would say.

Speaker 37 And I do do it myself.

Speaker 29 I also do it just to see what the different models are producing about our drugs.

Speaker 53 It's like an audit.

Speaker 44 But mostly it's accurate.

Speaker 36 And it's gotten better over the last two years.

Speaker 57 I'd say substantially better.

Speaker 53 And many, including Google to their credit, have

Speaker 45 a way to sort of

Speaker 36 click through and check the facts directly, which is a useful thing.

Speaker 56 They've served that up a little more proactively.

Speaker 36 That's good.

Speaker 49 Do you work directly with consumers owning their health and for more information?

Speaker 50 Do you work directly with them?

Speaker 12 Do you have an arm that will go to Grok, go to Gemini, and say, hey, we did these searches. Here's some things you need to improve.

Speaker 8 So we've pointed things out when there are mistakes.

Speaker 23 It does feel a little bit like we're lobbying into a black hole.

Speaker 44 And maybe that's a capacity issue on their end, or maybe it's they're taking the point of view that our model is just trained on

Speaker 50 the corpus of information.

Speaker 11 It's on Reddit. Yeah, yeah, right.

Speaker 35 And it is what it is. We don't want to own it.

Speaker 19 The bastion of intellectuals.

Speaker 11 We don't want to own the outcome of it.

Speaker 60 Before we run out of time, I just want to get your view on research funding in this country.

Speaker 55 The NIH budget cuts that have been proposed.

Speaker 60 What will the follow-on effects be?

Speaker 55 Are these cuts going to be to low ROI research programs that ultimately wouldn't have translated into the clinic and into improving lives?

Speaker 55 Or are you worried about NIH funding cuts and what they're going to do to the pipeline of therapeutics in America? When will we realize the effects of that?

Speaker 28 Yeah, Yeah, great question.

Speaker 8 I don't think anyone knows the answers to those.

Speaker 44 It's not obvious, let me put it that way.

Speaker 8 No doubt that the NIH over its history has done some landmark things that no market could do.

Speaker 52 And I'm for more of that.

Speaker 57 Mapping the human genome, a mega project that can only be done by government and undoubtedly produced a ton of good and economic value for the country.

Speaker 36 I think if you look at the, first of all, NIH total budget is a little over $40 billion.

Speaker 33 Most of that is extramural.

Speaker 44 They're granting that to institutions in smaller checks, sometimes very small checks.

Speaker 6 I personally kind of wonder what the impact of that.

Speaker 44 Is it sort of a VC model where we spread a ton of bets and a few of those will bloom into giant successes?

Speaker 47 Or is it just sort of filtered out without a strategy?

Speaker 57 I think that's a question that should be asked, and maybe Jay is asking that.

Speaker 44 I think the other problem with the NIH granting is as you do that, like any government mechanism, it gets influenced by the people who are making the grants.

Speaker 15 Who are those people?

Speaker 36 People receiving grants.

Speaker 28 So there was a little bit of a back scratching issue here.

Speaker 43 And I think exposing some sunshine onto that to sort of say, what is that process?

Speaker 48 Is it truly competitive?

Speaker 39 And is it truly pursuing ideas that the market can't solve itself for the next one?

Speaker 55 And should it be done at universities? Let me just ask you this. Are universities the the right research institutions today and going forward?

Speaker 55 We've got two university leads tomorrow that we're going to have a conversation with about this topic, amongst others. But what's your view when you look around the world at how research is done XUS?

Speaker 60 What's the right model? Is this the right model?

Speaker 53 Probably too much that way.

Speaker 24 I'm on the board of an R1 university, so

Speaker 28 I'm a little biased maybe myself, but I think a lot of good things have happened in universities, but we should not exclude that to other applicants.

Speaker 15 I think there could be a place for other participants.

Speaker 2 Dave, tomorrow we're going to have Mark Cuban. Yeah, great.
And we're going to talk about PBMs. Yeah.

Speaker 19 And one of the biggest.

Speaker 14 He's on fire.

Speaker 2 Well, one of the big boogeymen in healthcare are these PBMs. Can you just explain quickly 30 seconds, what do they do and what's your view on whether they should even exist in American healthcare?

Speaker 25 Probably we're at the end of that S cycle and we should get to something else.

Speaker 44 We actually owned a PBM in the 90s.

Speaker 13 Why did they exist?

Speaker 50 Two reasons.

Speaker 25 To match up claims claims so you can go into any pharmacy in the country with a card that says, here's my benefit, and that benefit can be adjudicated to you.

Speaker 47 That was a big IT problem in 1993.

Speaker 20 It's not really a big IT problem now, and there's dozens of these so-called transparent or light PBMs.

Speaker 53 Actually, our company is moving to one.

Speaker 25 off of one of the mainline ones because it's in our business interest but also their service is better.

Speaker 38 The other thing is negotiate like bulk discounts.

Speaker 36 So gather up a bunch of employers or plans, go to the drug companies, get a lower deal.

Speaker 57 I think that's fine.

Speaker 44 I'm for that too.

Speaker 13 What happened is,

Speaker 6 you know,

Speaker 21 like any

Speaker 7 consolidated terminal state of an industry, what's the term, the insertification of their service, is

Speaker 26 they just become so,

Speaker 33 every action they make is about their benefit, not the customer.

Speaker 47 And that's what's happened.

Speaker 25 That's why everybody hates them.

Speaker 51 Sachs,

Speaker 63 GLPs kind of came out of nowhere as this big category.

Speaker 63 If you had to guess, what do you think the next big surprise category would be that we're not thinking about?

Speaker 17 It's hard to predict that, but I would say probably a brain disease.

Speaker 44 I think if you look at humans suffering globally, 40%

Speaker 25 is brain diseases, and it's so broad we could spend a whole panel talking about them.

Speaker 39 And what we've had so far has not worked.

Speaker 48 You know, when Bobby's raising the question, why do we have so much autism?

Speaker 54 That's a great question.

Speaker 17 What's causing it?

Speaker 25 Depression rates, despite the advent of, I mean, we invented Prozac, so many drugs.

Speaker 27 People are aided, but it's not solvent.

Speaker 39 We still have lots of depression in this country, and maybe it's growing in youth.

Speaker 59 So these are huge problems as our population ages, dementia, and brain, you know, these.

Speaker 48 So I'd bet there, part of what we try to do is allocate capital into spaces where there are no drugs, hoping to hit the dartboard where there isn't a competitor.

Speaker 47 That's how we got obesity drugs.

Speaker 21 We're working on that.

Speaker 27 But it'll be hard to predict.

Speaker 2 Ladies and gentlemen, please.

Speaker 19 Yeah, thank you.

Speaker 20 David Rick.

Speaker 11 Hey, Brick.

Speaker 48 Thanks, Brow. Great to see you.

Speaker 62 Yeah, I'll be there. Okay, great.

Speaker 62 Thanks, David. Definitely.
it.

Speaker 62 Congratulations, my man. I'm pretty sure you're right.
I appreciate it. Take care.