Eli Lilly’s recent investments in China and Japan reflect a shift to making medicines closer to where patients are at a time of geopolitical instability, according to one analyst.
In March, Lilly made two commitments to expand in Asia in quick succession. First, the company vowed to invest $3 billion in China over the next decade to support production of its oral GLP-1 receptor agonist orforglipron, approved in the U.S. earlier this month as Foundayo. The following day, Lilly set out plans to invest about $125 million in Japan to meet demand for treatments of conditions including diabetes and obesity.
These investments show that the GLP-1 market is no longer being shaped by demand alone, GlobalData analyst Edita Hamzic said in a report published Monday. Hamzic framed Lilly’s actions as evidence that “companies are now building geographically segmented manufacturing networks to serve local markets, manage policy pressures and protect against disruptions that could affect access to critical medicines.”
Companies must prioritize the construction of local capacity to prevent the return of GLP-1 shortages, Hamzic said. Making medicines closer to patients can reduce import dependence, cut lead times and improve compliance with local regulatory and labeling requirements, the analyst added.
Lilly disclosed its investments shortly after Novo Nordisk committed just over $500 million to equip a site in Ireland to make oral GLP-1 drugs for ex-U.S. markets. This is a sign that companies “are building manufacturing capacity closer to demand centers while also insulating themselves from geopolitical shocks,” Hamzic said, adding that the current war in the Middle East could reinforce the trend.
Novo Nordisk’s oral Wegovy has a few months’ head start on Eli Lilly’s newly approved pill. While the Indianapolis pharma has come from behind the Danish rival in the weight loss space before, last time it clearly had the better drug.
For Lilly, the investment in China is particularly important because “it opens the door to an early oral GLP-1 position in [the country], where competition remains limited,” Hamzic said. Lilly filed for approval of orforglipron in China last year, putting the company in a leading position to try to capture a vast market.
There are about 180 million potential patients for GLP-1 products in China, Lilly CFO Lucas Montarce said at a BofA Securities event last year while discussing international launches of…
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