Fearless "MFN" agreement pricing iron fist! Eli Lilly (LLY.US) vows to accelerate global medication listing.

Eli Lilly (LLY.US) stated that despite the uncertainty brought by the Trump administration's proposal of Most Favored Nation (MFN) drug pricing plan, the company will continue to advance its global drug launch plan in response to concerns that the policy may hinder the introduction of new drugs in low drug price markets such as Japan. Lucas Montarce, Chief Financial Officer of Eli Lilly, stated in an interview, "Our goal is to continue to bring innovative drugs to all patients around the world." He pointed out that the price pressure brought by reference pricing systems and similar MFN policies is "not new for the pharmaceutical industry." The so-called MFN proposal refers to linking the prices of some drugs in the United States to those in other developed markets. Eli Lilly has reached an agreement with the Trump administration on MFN drug price agreements, mainly involving GLP-1 class weight loss and blood sugar lowering drugs, and will see a significant price reduction in TrumpRx self-pay channel and Medicare partial executions from 2026. This policy is expected to save $529 billion in US healthcare spending over the next decade. However, this proposal has also sparked market discussions about whether pharmaceutical companies will delay the introduction of new drugs in low-priced countries such as Japan and Europe. Weight loss drugs have become an important growth engine for Eli Lilly. With the rapid growth in global demand for GLP-1 class drugs, competition between Eli Lilly and Novo Nordisk A/S Sponsored ADR Class B (NVO.US) has become increasingly fierce. Lucas Montarce stated that competition is actually expanding the entire weight loss treatment market, rather than just a competition between the two companies for market share. He said, "If only Eli Lilly is driving the development of this huge category of drugs, it will be more difficult. In fact, we believe that having competitors helps mobilize more patients for treatment." He added that the manufacturing bottleneck that previously restricted the supply of weight loss drugs has been largely alleviated, allowing the company to prepare for listing in a broader international market. Eli Lilly had previously increased its sales expectations for 2026, as first-quarter revenue grew by 56% year-on-year to $19.8 billion, mainly driven by strong sales growth of Mounjaro and Zepbound, despite the fact that the actual selling price decline partly offset the volume growth. Currently, market attention is turning to Eli Lilly's oral weight loss drug Foundayo. The drug was approved by the US Food and Drug Administration (FDA) in April, and is expected to expand weight loss treatment from injections to a more widespread population. Lucas Montarce stated, "Currently, we see over 80% of our revenue coming from new patients." He added that the oral form of the drug is also attracting more general practitioners who were previously unfamiliar with GLP-1 injections to prescribe. Eli Lilly is also evaluating whether to expand its direct-to-patient platform LillyDirect to markets outside the United States. However, the company stated that any expansion plans will depend on local regulations regarding the sale and distribution of drugs. Lucas Montarce stated that the company is assessing the demand in various markets while exploring the development of a platform that can be applied globally. However, Japan's drug pricing system remains a concern for Eli Lilly. The company's diabetes drug Mounjaro recently saw a price reduction of approximately 25% under Japan's "best-selling drug re-pricing" mechanism. Lucas Montarce stated that such price adjustments are "unpredictable" and lack "long-term stability," thereby increasing the difficulty of investment decisions when launching new drugs. Eli Lilly is expanding its presence in the Japanese market with tirzepatide and is partnering with Mitsubishi Tanabe Pharma Corporation to distribute Mounjaro and Zepbound in Japan. The diabetes treatment drug was launched in Japan in 2023, and the weight loss indication was approved a year later. Japan remains Eli Lilly's second largest market after the United States, and the company has stated that it will continue to increase its investments in Japan. In March of this year, Eli Lilly announced an additional investment of 20 billion yen to expand its Seishin factory in Kobe, Hyogo Prefecture its only owned production facility in Japan. The project will add production lines and storage facilities between 2026 and 2028.