Pod Insights The Prof G Pod with Scott Galloway Why People Are Losing Faith in Healthcare About this episode David Ricks, Chair and CEO of Eli Lilly, joins Scott to discuss the rise of GLP-1 drugs, the future of obesity treatment, and why America's healthcare system is facing a crisis of trust. They explore healthcare costs, addiction, unregulated peptides, pharmaceutical innovation, and the role AI could play in the next generation of drug discovery.
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1:22 Scott Galloway? Episode 399. 399 is the world's most famous and most photographed grizzly bear. In 1999, The Sopranos premiered. So I got my boss a tie and a dildo for Christmas, and if he doesn't like the tie, he can go fuck himself. That's an actual joke from the series The Sopranos. Little media history, keeping you, keeping you up on the greatest nostalgia of what is arguably the second-greatest TV show behind Breaking Bad. Enough already. Go, go, go!
2:01 Scott Galloway? Welcome to the 399th episode of the Prop G Pod. What's happening? In today's episode, we speak with David Ricks, Chair and CEO of Eli Lilly and Company. So each year I do a prediction stack. It's our most sought after content. And I pick a technology of the year. In the last two years, I've only had one technology repeat. That's right. And it's not AI. What technology do I believe is going to have a more profound impact on the world than AI? GLP-1s. I just, I think this technology, every time new data on the technology or, you know, evidence on the technology comes out, it's, oh, it, you know, it makes you want to eat more kale or it makes you nicer to your pets. I mean, this thing is just wild.
2:46 Scott Galloway? The way I describe it is scaffolding on our instincts. Our, our instincts haven't caught up with the institutional production of things that we traditionally were in short supply and that we develop cravings and even addictions for. And GLP-1s are essentially scaffolding on our instincts. Anyways, I'm a big GLP-1 fan, so I'm excited about that. Anyways, with that, I hope you enjoy our conversation with Dave Ricks. Dave, let's bust right into it. Eli Lilly is the first healthcare company to reach a trillion dollar valuation and it's also turning 150. Talk to us about Eli Lilly.
3:25 Speaker 03 Yeah, sure. Well, this is an important year. As you said, we turned 150. It's a long time ago. Founded by a Colonel from the Civil War who was a pharmacist. It was the fifth company founded. The first four failed. I think that's an interesting lesson in entrepreneurship. But, you know, he saw atrocities during the war, mostly the off battlefield deaths from infections and terrible medical care. And he wanted to do something about it. So he created a company that would do something new for the first time. We would list the ingredients of every medicine on the bottle. Which was a novel idea at the time. And then he signed every bottle himself. And that's like the signature of the company.
4:08 Speaker 03 That's the brand of the company now was his signature. So the idea was quality and like transparency. And his first hire was a scientist. So it was kind of the first iteration of a modern pharma company. A long, long time ago, before the FDA existed, et cetera. Along the way, you know, we reinvented ourselves many, many times. That's sort of how the business works. Every product we make goes off patent and goes to zero. So we have to keep inventing things to stay relevant. And there's been a lot of big inventions through history, including today. As you, as you mentioned with GLP-1 therapies, which are making the company famous again.
4:44 Scott Galloway? We talk a lot about GLP-1s. And I've said over and over that I think it's going to be a more transformative technology than AI. I think AI is the most overhyped technology and GLP-1s are the most underhyped. And right now, I think arguably Lilly is the closest to an index fund or a pure play investment in GLP-1s. My understanding is about two thirds of your total sales come from a GLP-1 related product. Give us the overview or the pitch, if you will, about GLP-1s taking the aperture back, about this technology, why it's such a big breakthrough? And where you think it's headed, some of the things, some of the uses that people aren't talking about.
5:23 Speaker 03 Yeah, well, I, I tend to agree with you. I think it's a pretty profound thing that we could modify medically weight and obesity at, at a lot of scale. The drugs are unique in a few properties here, Scott. One is usually we get drugs that work on average, but they work for some people and not for others. That's sort of the more common pattern for medicine. But here, pretty much universally, products like Zepbound or, or Nuon Foundia, they work. People lose weight, almost everybody who takes them loses weight. That's an interesting thing. And then, of course, people like to lose weight. That's another interesting thing. Most people, when you have a chronic disease and your doctor gives you a medication, you take it,
6:07 Speaker 03 you feel a little bit worse and you definitely feel a little poorer. But you don't feel any different. You're told that you're mitigating some long-term thing. But with these drugs, of course, they change your chronic disease risk, or they actually change the chronic disease if you have a comorbidity. But people also like being on them. I think that's a very different property than we're used to seeing. Those things all combined, and the fact that obesity is kind of like a nodal health condition for more than 200 chronic diseases, I think gives us a shot if we can make enough and get them to people through the channels of healthcare, which we could talk about, which are deeply broken, then, you know, we can make a huge difference
6:50 Speaker 03 in longevity, life expectancy, and suffering.
6:55 Scott Galloway? I have a thesis, and I might be overdoing it here, that the only way to address the deficit is to address obesity. That my understanding is 70% of America is overweight or obese. And if you look at healthcare costs in Japan, at 5,500 bucks per person versus the US at 13.5, they have 4% obesity rate. We have a 40%. And that the industrial obesity complex, whether it's hospital systems, diabetes treatments, statins, kidney dialysis, hip, knee replacements, that the only way to address the deficit would be Medicare, Medicaid, vastly reducing the healthcare costs of Americans. And I can't think of any one silver bullet,
7:39 Scott Galloway? and I'll come back to cost, because cost is a big issue around these drugs. But my sense is, and tell me if I'm drawing too large a connection here, you can't really effectively address the deficit without going after healthcare. And there's no way to substantially increase or decrease healthcare costs without going after obesity. Do I have that wrong? And my, I mean, I realize this is an ad for Lilly, but I genuinely believe that.
8:03 Speaker 03 There's probably a lot of ways to reduce the deficit. We could talk about that. But I think you have to make a difference in entitlement programs. Of course, changing social security construct is super difficult and hard to imagine. Changing the costs of Medicare and Medicaid can't happen without changing the obesity rates. I think that's roughly right because of the downstream chronic diseases, which are now 80% of all healthcare costs. And the data we use is that about a third of all healthcare is obesity-related, so $1.4 trillion a year. That's about the size of The Defense Department proposal that Trump just put in and nobody likes. So could you make it zero? I don't know. That'll take a lot of time, but we certainly should start mitigating it.
8:47 Speaker 03 And the medicines themselves are quite a bit cheaper than treating the disease. I think that's been demonstrated.
8:54 Scott Galloway? Before we get to costs, we know, talk about what the potential applications of GLP-1 technology are in addition to reducing obesity.
9:02 Speaker 03 I mean, the obesity is sort of upstream of a lot of things. What are those things? We think about, you know, obvious like first order effects like your metabolic health, diabetes, your cardiovascular health. These are not new ideas using incretins. By the way, there's a family, GLP-1 is one of many words we're going to learn in a family of these proteins that your gut signals your body about being fed. We're going to exploit more of them, including double, triple and quadruple acting ones. But anyway, that family of hormones, of course, affects metabolic factors like how you metabolize fat and how much sugar, how you process sugar. The second thing is, which is interesting, is inflammation.
9:47 Speaker 03 So you could also say, in addition to obesity, America is in a inflammatory crisis. If we look at asthma, if we look at psoriasis, if you look at arthritis, I mean, these are chronic inflammatory conditions. And it turns out that obesity and inflammation are close travelers. And we have now done studies, including with our most powerful medicine, which we hope to launch next year, the triple acting ritotatide, that basically demonstrated that for knee pain, a common, you know, form of arthritis, it was the most powerful pain reducing agent ever tested pharmacologically.
10:31 Speaker 03 And so that's quite interesting because you think of all of the people we know in our lives who have pain, back pain, et cetera, and might also be overweight. That's a very interesting target. And then there's these kind of third level or, you know, two step away things that are hard to. Explain fully biologically today, but we know we're there. You know, we observe in trials addiction and kind of the consumption of like hedonic activity and substances, smoking, gambling, online shopping are mitigated. They're not eliminated, which is an interesting thing, but they're reduced.
11:13 Speaker 03 And that occurred spontaneously when Novo Nordisk and Lilly were doing studies. And now we're actually studying it prospectively. I think obviously if we could get rid of those kinds of people with the extreme form of those vices, that's going to be a good thing for society and healthcare costs. And then, you know, I think the final one is cancer, which is there's some publications recently that are observational. These are, these are going to be very difficult studies to kind of do prospectively in a double blinded way because they, they will take very long time. But it also turns out being obese for several types of cancer really increases your risk. Cholectomy cancer, breast cancer in particular. And now they've looked backwards and said, it turns out people who've been using GLP-1
11:58 Speaker 03 drugs for treating their diabetes for five or six years seem to have lower rates of cancer. So that's another extremely positive spillover effect.
12:08 Scott Galloway? When I think of GLP-1 technology, I think of something that not only makes you want to eat less, but makes you want less, if you will. And you mentioned, I love the word hedonic. Potentially, the stuff I've read is that people on Ozempic and Wegovy consistently report drinking less alcohol and that that might in fact be a bigger market than obesity, which shocked me. I guess we talk a lot about alcohol on the show, but talk a little bit about GLP-1's impact on just wanting less specifically as it relates to alcohol and other addictions.
12:44 Speaker 03 We've now studied this again, observing their behavior. And it's true, they have fewer drinks. We've done a pilot study of like a phase two study, it's called with several hundred people with one of our pipeline medicines. And yeah, reduced consumption daily of alcohol. Why is it doing this? I think, you know, alcohol is a very close chemical structure to glucose, to sugar. It is a sugar. And probably for the same reason, these drugs signal your brain and turn off the desire for nutrients. They do the same for alcohol. And it doesn't, I think they worry that they, this is also like a joy kill switch on joy. And we could talk about that, too.
13:29 Speaker 03 That's not actually what we observe in the data. I think most people have fewer drinks. They just find less pleasure in having one more, if you, if I could put it that way. And so they don't. And at the end of the day, you know, we've learned also, you know, alcohol is not that great for you. So it might be nice to have a glass of wine, but do you need five? And it seems like these drugs curb the desire for the second and third glass. Yeah, that's a good thing. We're pursuing a medicine called brenetide in phase three right now, which will seek to get indicated for alcohol use disorder. Is that a bigger market than obesity? I doubt that. I don't know who said that. I think there are people who do want to drink less.
14:10 Speaker 03 More likely, this makes a big impact on the, you know, cost of treatment in our country and maybe even preventing more people from being alcoholics. Because hopefully we'll have so many people on the medicines for treating chronic, other chronic diseases or preventing chronic diseases. That's ahead of us, but that's something we could, we could look forward to.
14:29 Scott Galloway? I think it's, it's hard to deny the upsides here. Let's talk a little bit. About the downside and the most obvious one is the cost and also the business model. This feels more like a subscription than a treatment. There is a rebound or you can gain the weight back when you stop. These products cost five to $1,500 a month. Is that bound? What I have here is about $1,100 a month. I, I, I think this is no longer true, but I read, I think two years ago that the greatest penetration of prescriptions for GLP-1s was also the thinnest area in America was the Upper East Side. That it was getting, quite frankly, to a group of people that were trying to lose that last 10, not address health concerns.
15:13 Scott Galloway? And I recognize you're, you're a for-profit company in a capitalist society. Your job is to increase shareholder value and not, not singularly address the healthcare crisis. Well, one, how do you guys think you, from a shareholder standpoint? And I'm not a shareholder of Lilly, but your shareholders want you to maintain pricing power. At the same time, it would appear that, that maybe some of the people that could most benefit from this drug are not getting access to it. Cause I do think there's an inverse correlation between household income and obesity. But it feels like there are contrarian forces here and that is one, your job is to maintain pricing power. And two, it feels like there's absolutely an, an external benefit if we figure out
15:58 Scott Galloway? a way to get this drug into the homes that need us, need it the most, which quite frankly is probably lower income homes. Talk a little bit about those opposing forces and your view more holistically about it.
16:09 Speaker 03 Yeah, I don't see them as opposing. So just, uh, ground in facts, it is true. Uh, I think the list price of the highest price form of Zepbound or Mondra was 1086, so $1,086. That's the list price. Almost nobody pays that. Actually, um, pretty much nobody pays that. Um, we have lowered, uh, and Lilly launched this program called Lilly Direct almost two years ago, which basically, um, the healthcare system without going down a rabbit hole unless you want to, you know, is this system where the biggest actors get the lowest price and the individuals pay the most. It's a totally regressive. Pricing model. And typically, the individuals who have to go outside the system to buy themselves have the lowest quality insurance for a reason.
16:52 Speaker 03 It's because their job is not supporting high quality insurance, or they're not, don't have a job at all. So to address that, we created this direct model where we just said, consumers can buy from the company, skip the healthcare system, normal channels, these pharmacy benefit managers and retail pharmacy, and we'll offer you the same price we offer the biggest players. So that price has been falling because those big players negotiate with us. So now it's 3.99 kind of maximum for Zepbound. It's come down 60% since we launched. And Foundao, the oral one we just launched, starts at 1.59 and goes up to 3.49. So the prices are falling kind of markedly, and I suspect that will continue due to competition and due to capacity.
17:35 Speaker 03 When we launched these drugs, you may have read, we ran out, there were shortages. It wasn't that we stopped shipping, there was just more demand than supply. We've invested a lot to fix that, about $50 billion in new factories in the US, some of which are online, some which will continue to come online in the next couple of years. We shouldn't have a supply problem anymore, so that will allow prices to fall. And then, you know, the other thing in this conflict narrative, which is generally true for pharma, which is broadly criticized for high prices, but typically for like a, I don't know, breakthrough cancer medication or something, for a severe condition, you know, prices are pretty inelastic. People have to buy it. And so there is this sort of conflict that that sets up.
18:18 Speaker 03 It's interesting, in this category, we observe something pretty different, that prices are pretty elastic, that the more we lower the price, the more users we get. And it's not one to one. We tend to have done a little bit better by lowering the price. So that's the path we're on, and that's what we want to do. Of course, the alignment in the other decision makers in healthcare isn't perfect. You know, like, let's just take state Medicaid, you raised this point, the largest obese population, percent of the total population is in Mississippi. 78, 79% of adults are obese, and they also have the highest Medicaid enrollment, and they're one of the poorest states in the country.
19:01 Speaker 03 But we just managed to cut a deal with them to provide our products in their Medicaid program. I think that's going to have a profound impact on the health status of Mississippi. And yes, we lowered the price and they found money in the state budget and they bought into a business case that said, okay, within a couple of years, we should start to see a return on this, lower hospital costs, et cetera. We need to get through that. And I think because of the history of the industry, which is more, I would say, extractive on pricing, as you're pointing out, I think there's a trust gap with some of these players. You know, we've got work to do, no doubt. One big group that's going to turn on July 1st, that I think is a seminal date here is, is the Medicare population.
19:46 Speaker 03 So, starting July 1st, for $50 out of pocket a month, every senior in America can buy our medicine for $50 a month. That's going to change accessibility for 70 million people very quickly. That'll be interesting to watch as well and make a big difference. But we're not done. We've got to keep working, working this. But I actually think there's a lot more alignment than what you portrayed in your question, especially with this category. And we're happy to be the one that, you know, makes enough to supply that market. And if the price comes down another 50% and we sell two and a half times more, we're happy. Our job isn't to maximize price, it's to drive return. And here, there's a big volume opportunity.
20:31 Speaker 03 We'll be right back after a quick break.
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23:58 Scott Galloway? Can you give us a brief explainer on the word I keep hearing and I don't understand the difference between it and a GLP-1, or if one is one form or the other. You can't read anything without seeing the word peptides. Everyone is talking about peptides. I'm curious, can you break it down as the CEO of one of the most important healthcare or pharma companies? What is the peptide market and what are the commercial applications? And if and where is Lilly investing around quote-unquote this new peptide craze?
24:34 Speaker 03 There's a lot to unpack here. Well, okay, let's just start with the science. What is a peptide? A peptide is a chain of amino acids that occurs in nature. You can also synthetically make these chains. If you have a longer chain, we also call it a protein. The lexicon's interesting because the word peptide in our business is like, the next word you might say is chemical. It's a very generic term for something nature uses to signal and do its work. There's nothing special about that word. And it's been resurrected more recently because online marketing has made it sound like there's some... Extra special thing to using that word.
25:17 Speaker 03 And I find it fascinating that now you see like Chinese peptides. Like, that's a good thing. I don't think that's a good thing. Mostly, I call these unstudied medicines. That's sort of the best way to put it. Some are naturally occurring substances that people are have identified and isolated and are selling as sort of quasi-medicine without clinical trials or safety data, certainly without an FDA approval. I think we have the FDA for a reason. Back to the origin story of Lilly, like, what's in it and what does it do? That's sort of why we started the company 150 years ago. We don't know the answer to either of those questions when you buy peptides online.
26:01 Speaker 03 So we're not a big fan of this kind of, you know, air quote peptide business. We're actually in the real peptide business. You know, terzepatide, the ingredient of monjaro and zepant, is a peptide. But we engineered it to do something very specific. We spent billions of dollars to study its safety in first animals and preclinical models, then humans, then we proved its efficacy, then we went to regulators around the world and got it approved. So third parties agree with our data. And now we monitor safety very carefully. And if you have an adverse event, we report it publicly. We're transparent about that. So, you know, these people involved in this business, mostly buying, you know, unproven things and selling them to individuals online,
26:46 Speaker 03 they don't bear any of those responsibilities. And I don't think it's a very good idea, to be honest. Now, some of them could turn out to do something. A number of the popular ones claim to be like memetics of the human growth hormone. I'm not sure taking that chronically is a great idea, to be honest. Growth hormone is, you know, pro-tumor growth as well. So I'd be concerned about that. And then some of them also, you know, have some sort of magic elixir properties, unproven and unpublished. But, you know, just stepping back maybe and just, I don't know if you want to get into this, but like, how do people feel about healthcare right now? I think it's sort of... The COVID crisis and this phenomenon are sort of two sides of the same coin.
27:31 Speaker 03 People feel, I mean, healthcare is pretty much one of the worst consumer experiences we all have, right? We go to somewhere, no one can tell you the price, you gotta wait in line, you're treated pretty shabbily. And there's all this information asymmetry, so you can't, you don't feel informed to make decisions economically or for your own health. And there's something appealing to people with sort of either rejecting recommendations of authority or taking your own agency and going online, saying, "I'm gonna take control of my own health." The problem here is, you know, people don't have biochemistry laboratories in their basement, they can't validate what they're reading online, they use these N of one anecdotes to say, "Oh, it helped me." That's not science.
28:14 Speaker 03 That's not, I mean, that, we know there's problems with relying on that to make decisions. So we need oversight of this to protect consumers. At the same time, I think we have to recognize the current system does a pretty terrible job of meeting people's needs, at least in this feeling of like control, financial and kind of health control. And I think people are reacting to that, that's why there's this booming business.
28:40 Scott Galloway? It appears that this bet, I don't want to say you guys have gone all in, but you've made a big bet on GLP-1s, and it appears like it's paid off dramatically. You're the first company to cross a trillion dollars in market cap in your sector, worth more than, I think, are right around Walmart and Berkshire Hathaway. And I think even more impressively, you're worth more than Johnson & Johnson, Pfizer, Merck. You're worth more than all these companies combined. You made, you must have made a big bet when a lot of people weren't making this bet, and it paid off. A trillion dollar, you're the first trillion dollar market cap, you're up fivefold in the last five years. Would you, would you say, when you have that type of outperformance...
29:24 Scott Galloway? What is the barrier of entry there? What is kind of the secret sauce here? Has it been a massive bet in R and D around GLP-1s? Has it been IP protection? You have better marketing, better brands? Is it better distribution? Like where? As at the end of the day, you're responsible for outperforming the S and P as a CEO, to try and convince people to come to work for you and invest in your company because they'll get a greater return on their human and their financial capital. In your mind, what is Lilly's competitive advantage as a culture, as a company? And when you speak to shareholders and say, okay, it's up fivefold, but stick with us, there's more running room because we are, you know, we are great at X, Y, and Z. How do you differentiate from the rest of your competitors?
30:08 Speaker 03 These competitors, these companies you mentioned, they basically try to do the same thing we do. I think there's like three differences at Lilly that have allowed this bet to pay off. And people always ask me, like with Monjaro and Zepbound, when did you know this is going to be a big, big drug? My answer always surprises people because it was like in 2018. So that's one thing, Scott, which is pattern recognition and sort of the, you know, in Wall Street terms, capital allocation. Where do you place your bets? And I think we have a little different point of view than most companies about this. Now, all those names you're mentioning are buying up GLP-1 and have agonists and trying to follow us into this mega market. Of course, we're, you know, trying to extend our lead,
30:52 Speaker 03 but we're spending a lot more time on other markets now. Why? Because by the time a medicine market is big, it's basically too late to invest. That's our point of view. Maybe we're wrong about that, but in this case, we were right. I can guarantee you in 2018, nobody was talking about the obesity market. No one was even investing in it, really. It was considered a non-market. And the history of the weight loss drugs like Fen-Phen and these earlier drugs, which were withdrawn, was not a good one. But we made the bet because we saw profound biology. So that's point number one is like, what is the science telling you? Two is, you know, are we working in areas that are very common?
31:33 Speaker 03 And here, like Lilly is sort of at the time and maybe now even so, cuts against the general thesis of the industry, which is to focus on price maximization and serving, you know, really difficult diseases, but maybe diseases that only have a few patients. There was a big theme on that for the last 15 years in medicine for some good reasons, but I think we're more attracted to the millions and billions served idea. I think that's the, you know, doing things that scales hard and that's what a Lilly is for. We're a big company. We should go after those problems. The second thing is speed. So very early in my tenure, we undertook a series of programs to really change the clock speed of R and D.
32:18 Speaker 03 One of the reasons why that capital, the first point is true is that everyone has patent lives. So a patent in the United States is 20 years long.
32:27 Speaker 03 When I began SPO, it was taking us 11 years to go from invention to the market, which means it took more time to get to the market than the time you had on your patent in total, which was a kind of a nutty setup. The whole industry was a little bit better than Lilly at the time. Well, we've now chopped five years out of our cycle time and the rest of the industry is about the same. So we can start an idea later and beat people to market, or we can start at the same time and beat them profoundly. That gives you more time in market with patent protection. It gives you more time to exploit new uses of existing drugs and of course to give return to shareholders. But by the time those patents expire, basically things go to zero.
33:10 Speaker 03 So like Ozempic, in 2031 or 2032, their patent will expire in the U.S. And people will be able to buy this not for $300 a month, but for like $60 a month. That's what's going to happen because the, all the R and D costs no longer need to be amortized and it becomes a commodity business. So in our business, you have to outrun not only your own patents, but everyone else's. And when a breakthrough like Monjaro or Zepbound goes generic, all these followers are going to find it hard to differentiate their drug against something much, much cheaper. So you have to keep raising that bar and then at some point you can't raise it anymore. But anyway, speed is valuable. Making good choices, of course, is valuable. And then the final is just the execution.
33:53 Speaker 03 You know, Lilly's, I think, the only scaled drug company that's really never had a major merger. We have a very singular culture that starts with that origin story we talked about earlier. We're kind of based where no one else is. It's a little weird to some people on the coast that the most valuable biotech company in the world is in Indiana. That seems like something that shouldn't be true. But our isolation kind of helps us some. We don't have a lot of turnover. When we are lined up behind something, we can really execute well as a team. And we do have sort of a shared Midwest nice culture. But also a size of the company, we have less than 50,000 employees.
34:33 Speaker 03 Where everyone at the leadership level anyway knows each other and we can solve problems without having committee meetings. And I think that's been a benefit to the company as well.
34:43 Scott Galloway? So I always go into a podcast trying to figure out a way not to use the term AI. But I'm gonna, I'm gonna lose here. Jensen Huang has now turned as AI cannon in terms of trying to become a $10 trillion company towards biotech and pharmaceutical research. And this vision of a huge, the great age of discovery is upon us because of AI. And the way I would describe your industry loosely is slow but steady incremental progress. That over the, that in the short term is not that dramatic, but over the medium and the long term. Just, you know, doesn't cure cancer, but makes it less likely to die from it. And it just every day a touch better. And AI, or at least the proponents of AI are holding out the promise of this acceleration of discovery.
35:28 Scott Galloway? Do you think those promises are overhyped, underhyped? And speak to how Lilly is using AI in its development process?
35:36 Speaker 03 Yeah, currently overhyped is the short answer. And here's why. So, you know, the LLMs that we all use, that's what we think of as AI, right? As the large language models. There's other forms of AI. They're not as popular because they haven't created as much value. But that works for sort of consolidating human knowledge, right? Because it read every word on the internet and can predict the next word really well. And then that helps people sort of get to the information faster and faster. We use, our scientists use it every day. We're big adopters of, you know, OpenAI and Anthropic's products. And it helps people search things and find connections and literature, et cetera.
36:19 Speaker 03 But the problem we have, the fundamental problem in drug discovery is the word discovery. Is that we, we're not synthesizing existing knowledge. We have to create new knowledge. And probably humans have discovered, I don't know, 10 to 20% of all knowledge of the human body system, meaning our, our underlying data about, about biology of, of the human body is poor, which means you can create a model that tries to predict the other 80% with the 20 we know, it's terrible at predicting. Whereas with words on the internet, like, we know every word on the internet, it's very good at predicting those connections, to put it simply.
37:02 Speaker 03 We've adopted these AI tools across the company for all the other reasons everybody else has, but fundamentally, what scientists have to do is experiment. They have to create a hypothesis, they have to test it, and then they have to run experiments. You know, Manjaro or Zepbound, which is epitomized the ingredient, that was like the 700th version of a GLP-GIP1 inhibitor, we actually had to make physically, test in, thinking like Petri dishes and rodents, to determine the one that would be the best to take forward. It was actually the second one we took to humans, the first one failed. That was the 200th or something that we had formulated, we went back and did 500 more before we got one that was better. Can we avoid those misses with AI? Not today.
37:47 Speaker 03 We don't, we don't even know why those system, what the rules of those systems are. We are working with Nvidia to try to solve this problem, but what we need to do is build data sets that teach the AI the rules of a particular system in biology, so it can predict the answers. I think when we have that, it will be very, very helpful at predicting the answers. And we have some working examples of that in drug discovery, we've actually made them public. We have a thing called Lily Toon Lab, which I think is the leading kind of workbench for drug developers in the world, because it's free to biotechs, all they have to do is let us use their data to train the models to work better. And these are in very discreet tasks that it takes to get a drug to market.
38:31 Speaker 03 So think of like, the pre-clinical phase, before you test in people, there might be like a thousand steps to go from an idea to a drug you're going to put in a person. Because that's a very dangerous thing to do if you don't know what you're looking at. And maybe like 20 of those steps we've automated with AI or machine learning. So the task ahead of us is to like automate the other 980. And that's going to mean building out a lot of data that doesn't exist in the world and training models to predict what the most likely next outcome is of that system. There's just a lot to do there. So, you know, maybe five to seven years from now, we will skip a lot of laboratory experiments because we're confident in the models. We'll still have to do human experimentation, though.
39:16 Speaker 03 I don't think anyone on earth is ready, except maybe the peptide buyers online, to just sign up to say, okay, I'll be the first human to use a substance that's not been rigorously tested and looked at by third parties, not the company making it, so I can really trust what they're saying. That's what clinical trials do. That's what the FDA and regulatory systems do. I'm not sure AI is going to speed that up anytime soon. So a lot of work to do. We're betting on it, but I think it's more of a 10-year arc, not a two-year arc.
39:50 Scott Galloway? We'll be right back.
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41:57 Scott Galloway? We're back with more from Dave Ricks. So we just have a few minutes here and our remaining time, I want to move to, I'm going to segue to some of the more human stuff. You're the CEO of usually the most important company in Indiana, maybe the most important company in the Midwest. And, you know, you're still a relatively young man. We have a lot of young men who listen to the podcast, I'm a young woman, but mostly young men. What advice would you give to your 25-year-old self? Like, what, what do you think you've done well? What could you have done better in terms of professionally, in terms of man? Well, there's probably not a lot you could do better, but advice to your 25-year-old self?
42:39 Speaker 03 You know, the main thing I, we have a lot of new employees we were hiring and growing. I have a 27 year old son. And the main thing I say to people is to be open to more dramatic surprises and say yes to them. I think one thing I did in my career that was kind of surprising to me anyway was things were presented to me and went home, talked to my wife and we said, let's, let's do it. Like, we moved to China and I ran Lily China for a while. She's a physician, she had to give up her career and, but it was a great experience. You know, try, why am I even in the drug industry? I was like a Purdue engineering student and business major and I went to work at IBM.
43:20 Speaker 03 And the only reason I arrived here was because that same girl was going through med school at Indiana University, so I needed a job in Indianapolis. So I joined this company I knew nothing about, really. And they said, hey, we like what you're doing, stay on. And I did. I think a lot of young people just sort of overprogram things in their head. And then they worry about what the outside world is saying about the next choice versus just being curious and going for it. And I think we're a little too programmed in our brains about how life actually works, which is like throwing yourself into things, committing, saying yes, and seeing what you can learn and figure out. You know, that's one, one thing. I think the other is, I've really benefited from being at a company a long time, obviously.
44:04 Speaker 03 I do worry that people jump too much. You know, that jump to the next job offer and for a little more pay without actually learning the industry they're working in that well. And maybe companies have changed too, or investing less in people's growth and development. But I think you should try to look for a place that would do that for you because it's a complicated world. You know, I know a lot about what we do, but that took probably 15 years to sort of get mastery over the different domains of what, you know, a drug company does. If I jumped from one to the next, I'd become an expert at something that someone's willing to pay me a lot for, but I never actually learned like how the whole industry works.
44:47 Speaker 03 Those are two mistakes that I see people making and I would, I would avoid.
44:52 Scott Galloway? So you mentioned, my understanding is you have three kids?
44:54 Speaker 03 Yeah, a daughter and two boys.
44:56 Scott Galloway? You know, we talk a lot about young men, advice specifically if you can about raising boys.
45:01 Speaker 03 Well, I, I don't know, you know, I think we can all be super self-critical about my boys are doing great. I feel like I gave it a lot. I, I enjoyed the quiet times at home when they were little babies and my wife was working at the hospital all weekend. That happened a lot. So we had a dual-career family, but our, the times when we were actually like in the room together with the kids were limited because I worked the work week and my wife tended to work nights and weekends. We're like reacquainting ourselves as a couple at the end of all that. But I think, you know, that, those sort of like boring in a way, like uninteresting days where you're just going for a walk or throwing a Nerf ball in the yard or whatever.
45:44 Speaker 03 That's how you really connect and kind of create a, kind of a model for your boys in a way. I think they'll be great dads in that regard. All the things I've done at the workplace that were hard, you know, like difficult conflicts and people situations, nothing's harder than that at home to me because you care so much about the outcome. Care too much sometimes to be rational. And, you know, I, I probably was less patient and too demanding at times of my boys, you know, expecting more, you know, growing up is a developmental process. Maybe for men, it doesn't end till their mid twenties anyway, where your brain's fully formed
46:24 Speaker 03 and you're kind of a rational executive function kind of human being. Being more patient with that is something I'd tell myself if I had to go back. That's just a process. Enjoy the process. And then, you know, there's no substitute for time. I, I think maybe related to the first point, but like one thing we like to do is like enjoy the outdoors together. And that's a good pastime for dads and boys because like the phones aren't there and you're sort of in the woods, you know, we backpack and camp and so forth. And you just have time to talk when you're walking along and. I think the world could use a little more of that. You know, it's one thing to go to the game and stand on the sidelines.
47:08 Speaker 03 You know, cheer on your kid, that's good to do, but are you connecting? I'm less sure, and I see a lot of people, at least where we live, spending a lot of time doing that versus, you know, participating in something you both enjoy together, side by side. I think men kind of connect side by side. That's, you know, how, you know, why I think like people like to golf and fish and walk together, you know, you sort of have a chance to talk while doing something sort of with half your brain. And I think as a dad, that's a good mode to be in with your boys, too, especially when they're teenagers and being difficult and very critical of you.
47:43 Scott Galloway? So, quick lightning round, and then we will let you go because we're over here. So, quick response first thing that comes to mind. Guilty pleasure.
47:51 Speaker 03 Guilty pleasure, good meal.
47:54 Scott Galloway? Last piece of media you binge watched that are something, last piece of media that had sort of an impact on you?
48:00 Speaker 03 My, this is also guilty pleasures, like going to X and like looking at my feed, which is a lot of biotech this weekend because the cancer conference is going out, but there's, there's some junk on there, too, mostly related to politics.
48:12 Scott Galloway? What do you think you'll look back on time in your life that you'll think of as the solidest, nicest time in your life?
48:18 Speaker 03 I hope that's ahead of me, but right now it's pretty good. Our kids are out of the house and healthy and happy, and my wife stopped working. We have more time together.
48:27 Scott Galloway? Person who's had the biggest impact on your life?
48:30 Speaker 03 My father, who passed away last year.
48:33 Scott Galloway? With your father's passing, has it changed anything about the way you, your relationship with your sons or, or how you want to approach your life moving forward?
48:42 Speaker 03 Yeah, it has, actually, because I think, when I think of the real memorable things we did where we had that, you know, one-on-one time after I left the house, like those are some of the happiest times we had together and where we kind of reconnected as men. And I want to create more of those with my boys. Scheduled a trip to Europe with my oldest this summer, so that's, that's a version of that. I just need to make time to do that. That's what life's about.
49:08 Scott Galloway? David Ricks is Chair and CEO of Eli Lilly and Company. He joined the company 30 years ago and has held roles in business development, marketing, country management, and drug development. My favorite thing about this company. Dave is that it's not in Silicon Valley. It's not in New York. It's not in London. It's in Indianapolis. I think it's just such a great American story. Congratulations on your success.
49:31 Speaker 03 Thank you so much. Good to talk to you today.
49:35 Scott Galloway? This episode was produced by Jennifer Sanchez and Laura Janer. Tammy Reek is our social producer. Bianca Rosario Ramirez is our video editor and Drew Burrows is our technical director. Thank you for listening to the Prop G Pod from Prop G Media.
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