American pharma major Eli Lilly's big focus on India: Will the company's strategy work?

So, you drive to the local park for your morning walk, drive and take a Metro to your office, where you grab the lift to the third floor, and then you repeat the commute in the evening. If you have to queue up for an autorickshaw, you crib about last-mile connectivity to your doorstep, instead of walking that mile.

That’s rising urbanisation and sedentary lifestyles for you. The bane of modern India. But they are a boon for pharmaceutical companies such as Eli Lilly & Co, whose 146-year history has been powered by a list of firsts: the first treatment for pernicious anaemia, the first mass-produced antibiotic, the mass-produced Salk polio vaccine, human insulin, and pills for clinical depression and schizophrenia, among others.

Lilly is now betting that its drugs for obesity and diabetes will power its revenues into a higher trajectory. Especially as obesity and diabetes are like the proverbial chicken and egg situation: which came first? Lilly’s portfolio also has your heart covered (obesity and diabetes can get your heart).

Responding to the dual crisis

US-based Lilly is no stranger to India. In 1993, it set up a unit to bring its treatments for diabetes, a range of cancers, osteoporosis, rheumatoid arthritis, men’s health, and growth hormone deficiency.

Now, it aims to bring to India its hugely successful drug Mounjaro that is used to treat Type 2 diabetes and as an anti-obesity drug for adults. In the US, Lilly has launched two different brands: Zepbound for obesity; and Mounjaro for Type 2 diabetes. In both, the active ingredient is tirzepatide. Mounjaro’s revenue exceeded $5 billion in 2023, its first full year on the market.

According to the FDA, approximately 70% of American adults are obese or overweight, and many of those overweight have a weight-related condition.

‘Overweight’ is when your body mass index or BMI is greater than or equal to 25; ‘obese’ is when your BMI is equal to or greater than 30, which makes you prone to several chronic conditions.

India’s fifth National Family Health Survey (NFHS-5), from 2019 to 2021, shows that 33% of urban women and 30% of urban men (in the age group of 15-49 years) are overweight or obese. Obesity affects over 135 million individuals, making it a significant health concern.

Lilly intends to expand in India’s steadily increasing obesity and diabetes market. Zepbound hit 25,000 new prescriptions a week in the US in December 2023, just a month after the US Food and Drug Administration (FDA) approved it for treating the overweight and obese. Mounjaro, earlier used for diabetes, was also approved in the US, UK and Europe in November 2023 for weight loss.

Vineet Gupta, Associate VP-MD India and Alliances, Eli Lilly & Co., says the company will launch Mounjaro for both obesity and Type 2 diabetes.

“It is currently under regulatory review …our current estimate is that we should be able to bring the stock to India in 2025,” says Gupta.

According to the India Diabetes Report of the Indian Council of Medical Research, released in 2023, India has 101 million diabetics. That’s more than the population of Vietnam!

David A. Ricks, Chair & CEO of Eli Lilly & Co., says the US parent is working with the Indian team to develop a plan. “Our overarching goal is to distribute our medicines globally, including in India, as swiftly as possible, recognising the urgency for individuals with chronic diseases (diabetes and obesity),” he says.

“However, we face a significant constraint concerning supply chain capacity, as our systems were initially designed for a smaller market than what the obesity segment demands. We must devise a strategy that balances supply availability with market demand,” says the CEO. “Obesity catalyses over 200 chronic diseases, prompting our exploration of various treatment avenues,” says Ricks.

In general, anti-obesity drugs act by mimicking some hormones that make you feel satiated or suppressing some brain centres related to hunger.

Fattening the base

Lilly is leveraging its portfolio that includes drugs for breast cancer (Ramiven) and psoriasis (Copellor). The company launched Ramiven in November 2022 and Copellor in March 2023. “We are excelling in these segments. In breast cancer, we lead the market in terms of value. In psoriasis, our drug, launched a year ago, has positively impacted over 1,000 patients,” says Gupta.

Donanemab, Lilly’s potential breakthrough in Alzheimer’s disease, could be introduced worldwide after the USFDA clears it.

Lilly operates in India through Eli Lilly and Company (India) Pvt. Ltd, which supplies pharmaceuticals, and Eli Lilly Services India Pvt. Ltd, which is a cross-functional centre that leverages data, content, analytics, and technology to support the global drug development process.

Business at its best

Ricks expects rising household incomes to boost the consumption of pharmaceuticals and so drive the business of Lilly and other multinationals. “Currently, the Indian market is relatively small for us and other MNCs; However, this dynamic may shift. There are certain favourable factors at play, particularly the country’s economic growth,” says Ricks.

Ricks says the policy landscape in India has posed challenges for MNCs, referring to protection for intellectual property (IP) and more transparent regulatory systems.

Even though India is now a relatively small market for Lilly, its planned investment of $2.5 billion to expand manufacturing capacity in Germany, hints at fresh investment in India as well. “Investment in India depends on the prevailing environment. This year, our global capital expenses amount to $6.5 billion, with R&D expenditures reaching $11 billion. These are substantial sums, yet very little is allocated to India at present,” says Ricks.

Tapping the market

Analysts say India’s diabetes and obesity portfolios will grow significantly. According to Pharmarack, a B2B Indian healthcare management platform, the Indian diabetes market was valued at Rs 1.40 lakh crore in FY21 and could reach Rs 4.85 lakh crore by 2031. The numbers include diabetes devices and diabetes drugs.

“The anti-diabetic market continues to grow strong due to unhealthy lifestyle habits,” says Sheetal Sapale, VP at Pharmarack. “Lilly has Trulicity (dulaglutide) in the Type 2 diabetes market. The launch of Mounjaro (tirzepatide) strengthens its position in this segment.”

Research firm IMARC Group says the Indian obesity market, now valued at around Rs 500 crore, has shown rapid growth, with a CAGR of 32% over the past five years. It forecasts the Indian weight management market to expand to Rs 2,763 crore by 2028.

Since 2019, the anti-obesity market was growing in single digits, says Sapale. But after Novo Nordisk brought its semaglutide (Rybelsus) in January 2022, the market has nearly tripled in value and doubled in quantity, says Sapale. “The rapid surge might not directly correlate with the rise in cases but could signal a growing willingness to address obesity issues,” she says.

In India, Lilly faces competition from both established MNCs and domestic players. MNC competitors are Danish drug maker Novo Nordisk, known for its GLP-1 drugs Wegovy and Ozempic, France’s Sanofi, US-based Merck and Pfizer, and Japan’s Takeda.

Lilly’s Indian rivals are Cipla, Lupin, Sun Pharma, Dr. Reddy’s, and Zydus Lifesciences. While Cipla and Lupin distribute some of Lilly’s existing diabetes treatments, they also have established product lines.

Ricks says Lilly has a significant lead, but admits that the competition is strong. “Competition is healthy, providing patients with more options, which we welcome,” says Ricks. “We develop many new treatments for this medical condition (diabetes/obesity), with most originating from our company.”

Then he asserts: “Lilly has better drugs.” Maybe he has a point: In 2023, Lilly became the world’s biggest healthcare company by market capitalisation, growing 59.2% year-on-year to $553.4 billion. Will it become the only drug maker in the trillion-dollar league of technology companies? 

@neetu_csharma