Speeches & Presentations

The Role of Biopharmaceutical Companies in Global Health
Richard G. Lugar Franciscan Center for Global Studies Speaker Series

John C. Lechleiter, Ph.D.

Chairman, President and Chief Executive Officer — Eli Lilly and Company

January 20, 2015

Indianapolis, Indiana


Good evening. I’d like to thank Marian University and the Richard G. Lugar Franciscan Center for Global Studies for the invitation to be with you tonight.

This event is just one example of how the University and the Center promote thought and discussion about global issues within the context of timeless values.

Your commitment to the dignity of the individual … peace and justice … reconciliation … and responsible stewardship make this the perfect forum in which to offer my perspective on global health. No other issue has the potential to positively transform so many lives, and to bring us closer to realizing those Franciscan ideals across the globe.

For all our human ingenuity and advances – which have extended lifespans and improved the quality of life for billions of people – far too many are left behind. Remedying that situation is not only a moral imperative, but also a very practical one.

As the recent Ebola outbreak has reminded us, the world is now a very small place. International travel, immigration, global trade, and other movements of people and goods around the world are now as ubiquitous as they are indispensable.

And the health of the world’s population has a tremendous impact on the health of the global economy. A study by researchers from Harvard University estimated that one extra year of life expectancy raises a country’s per capita GDP by about 4 percent.

Imagine a world in which all of the earth’s people have access to basic health care and modern medical innovation. What a boon that would be to mankind.

So how do we get closer to that goal? That is what I would like to discuss with you tonight. It will take a collective effort, innovative thinking, and, above all else, strong leadership, from universities, foundations, governments, and non-profit groups … but also, and very critically, from biopharmaceutical companies like Lilly.

As Michael Porter and Mark Kramer pointed out a few years ago in a widely read essay in the Harvard Business Review, there is no inherent conflict between making a profit and doing good. In fact, Porter and Kramer wrote, every company has the opportunity to deeply embed social good into its core mission, and in doing so, to create “economic value in a way that also creates value for society by addressing its needs and challenges.” They named this concept “shared value.”

Tonight, I will focus my remarks on the role that biopharmaceutical companies, including Eli Lilly and Company, can, should, and are playing to create shared value by improving global health, benefitting society and humanity at large.

We are doing so in three ways:

  • First, through our core business of discovering and developing new medicines;
  • Second, through philanthropy;
  • And finally – and perhaps of most interest to the academics in the audience – through novel partnerships for long-term, sustainable solutions; “shared value,” if you will.

Let me begin with the first, and most significant way in which biopharmaceutical companies contribute to improving global health: through our core mission of discovering and delivering innovative medicines to the world.

At the outset, I’d like to address a common misconception: that government labs and research universities do most of the heavy lifting of developing new medicines.

It simply isn’t true. Although the role that governments, foundations and academic researchers play in early, basic research is vitally important, independent studies in the U.S. have found that the vast majority of new medicines approved the past quarter-century – 80 to 90 percent or more – were developed solely by industry.

The reason? Developing new medicines is a very risky, very specialized, and very expensive endeavor, and only biopharmaceutical companies are typically able to invest the billions of dollars and often decades of work required. Believe it or not, for every drug candidate that succeeds, 5 to 10 thousand or more fail. It generally takes at least a decade to complete the multiple stages of testing that governments require before approving a new medicine, and in that time a recent study suggests that companies spend on average north of $2 billion in research and development costs.

You might have heard that Lilly is studying a compound in late-stage development to combat Alzheimer’s disease. That compound is the culmination of more than 25 years of research on Alzheimer’s at Lilly – and, although I believe we are getting closer, we still have yet to produce a medicine that has been approved for use. Think of the investment of funds, researchers’ work, even careers, devoted over a quarter-century to this one project area at Lilly – without one cent of revenue so far.

Yet, we remain committed to someday making life better for people with Alzheimer’s and for their care givers.

So the process of developing innovative medicines is daunting, and the role the biopharmaceutical industry plays is essential.

To get a sense of the impact that modern medicines can have in improving global health, just consider the experience of this country during the previous century. In 1900, the average American life expectancy was just 47 years. By the year 2000, it was 78. That’s an increase of 66 percent in a single century – unprecedented in human history.

Mortality from heart disease alone has dropped by about two-thirds since the 1960s – with novel medicines playing a major role. If no advances in heart disease had been made since 1975, one million more Americans would have died last year. And last month, we learned that, over the past two decades, death rates for many cancers – including breast, prostate, and colorectal cancers – have declined by as much as 46 percent due to improvements in early detection and treatment.

Many other diseases that used to be major causes of death have been wiped out in this country thanks to modern medicines. In fact, Lilly played an important role in eradicating one of them – polio.

In 1954, Lilly was approached by the National Foundation for Infantile Paralysis to produce a vaccine based on Dr. Jonas Salk’s method. Ultimately, more than half of all the Salk vaccine used in the U.S. bore the Lilly label. By 1960, the disease was almost entirely eradicated in the United States. That’s a short product lifecycle, but certainly a result we like to see!

And modern medicines continue to be the most cost-effective component of the healthcare system, producing savings far beyond their cost. Medicines can indeed be expensive, but they are far cheaper in the long run compared with hospital stays, surgery, or other interventions.

To take a dramatic example, a new study finds that in the U.S. alone, antiretroviral therapy for HIV/AIDS caused the death rate from that once-fatal disease to drop by close to 85 percent … prevented more than 850,000 premature deaths … and created $615 billion in economic value over the cost of treatment.

I could cite other similar examples … and keep in mind, today, nearly 80 percent of prescriptions in the U.S. are for lower-cost generic medicines, the legacy of all that early R&D investment by companies like ours.

Today, many low- and middle-income countries see life expectancies similar to those of the United States in 1900. Lives are cut short by diseases related to extreme poverty, poor living conditions, and unsafe food and drinking water.

Some of those diseases can and are being combatted by the same drugs used in this country in the distant past. I’m happy to report, for example, that the World Health Organization just removed India from its list of nations plagued by polio … and we’re getting close to eradicating this disease from the planet.

However, there are other diseases around the world for which there are no effective medicines currently available or where we need better medicines, and biopharmaceutical companies are investing hundreds of millions of dollars to find solutions.

In fact, 164 R&D projects are now under way to develop medicines and vaccines for 11 conditions that disproportionately affect low- and middle-income countries, such as tuberculosis, malaria and African sleeping sickness.

The French biopharmaceutical firm Sanofi is nearing fruition of a 20-year effort to develop the first effective vaccine against dengue fever, which hospitalizes half a million people a year.

And there are currently two potential vaccines in development against the Ebola virus – one by Merck and NewLink, and another by GlaxoSmithKline.

As devastating as such communicable diseases are, more familiar chronic diseases, such as diabetes and cancer, are even greater challenges throughout the world.

It’s estimated that nearly 350 million people worldwide are living with diabetes, and that number is growing rapidly. In another decade, the W-H-O projects that diabetes will be the 7th-leading cause of death in the world.

Cancers are already among the leading causes of mortality worldwide: in 2012, approximately 14 million new cases and more than 8 million cancer-related deaths were reported. The number of new cases is expected to rise by about 70 percent over the next two decades.

In wealthy countries, many people now live for years with these diseases, thanks to medical advances. In low- and middle-income countries, however – where the challenges are far more complex – they are practically a death sentence: today, 80 percent of diabetes deaths and 70 percent of cancer deaths worldwide occur in lower-income countries.

Lilly is among the biopharmaceutical companies investing in innovative new medicines against these global epidemics. Just in the past year, we launched two new diabetes treatments as well as a new oncology drug – and we have more potential treatments in our pipeline.

Beyond developing new medicines, we in the pharmaceutical industry have a responsibility, and are uniquely positioned, to assist in the fight against global diseases in other ways as well. Our expertise and unique resources give us the ability to help beyond our core business.

So now let me turn to the second way in which have long sought to improve global health: philanthropy.

Adding to the billions of dollars spent on R&D … over the last decade biopharmaceutical companies have provided billions more in direct assistance, including more than $9 billion to improve health care in Africa, Asia and Latin America. This includes donations of cash, medicines, vaccines and technology.

Lilly’s philanthropic legacy dates back to the earliest days of our company, and can be seen throughout this community. Today, more than 138 years since Colonel Eli Lilly founded our company, my colleagues and I are entrusted with carrying forward that proud legacy.

With respect to global health, our philanthropic efforts put to work not only cash donations, but also donations of our products, our scientific and business expertise, and the passion of our employees.

For example, Lilly supports many diverse patient-assistance programs, including here in the U.S. These programs make a wide portfolio of valuable medications available at low or no cost to eligible patients. In 2013, more than 300,000 people received help paying for their Lilly medicines through our U.S. patient assistance programs.

Outside the U.S., as an example, we have committed to donating more than 800,000 vials of insulin to the International Diabetes Federation’s “Life for a Child” program between 2008 and 2015 to help children who have no access to diabetes treatment.

We also go beyond medicines to help patients improve their health and manage their diseases, through patient programs within our areas of expertise, including Alzheimer’s disease, cancer, diabetes, and mental illness.

Another example of how we’re using philanthropy to improve global health can be found in the efforts of Elanco, our animal health business. We believe enhancing efficiency and improving the use of new technology in food production is critical to solving world hunger, and improving global health as well.

Elanco is helping break the cycle of hunger in communities across the world, including through its partnership with Heifer International. Our goal is to end hunger for 100,000 families – or 600,000 individuals – globally by 2025, through donations of livestock, training, and tools. In Indiana, Elanco is a primary sponsor of the Indy Hunger Network (IHN), a coalition of hunger relief organizations here in Indianapolis. IHN has a goal of delivering 27 million meals by the end of this year.

But, as important as these philanthropic efforts are, we know that philanthropy alone is no match for the scale of global health problems facing us today. Many countries lack even the basic health care infrastructure needed to get the right treatment to those who need it. The problems are big and tenacious, and can seem overwhelming. No single entity – no matter how well-meaning – can solve all of them by itself.

We need new solutions. New approaches.

We need to think bigger. And differently.

We need collaboration on a greater scale than ever before.

So I’d like to spend the remainder of my time this evening discussing the third way that biopharmaceutical companies, including Lilly, are beginning to work to improve global health: by forming innovative partnerships to find long-term, sustainable solutions for people in need.

This innovative, “third way” approach to corporate responsibility is rooted in collaboration and partnership, recognizing that deeply entrenched societal challenges are far too immense and complex for any single organization to “go it alone.” So this approach encourages and depends upon cross-sector collaboration, with each organization bringing its own unique capabilities and resources to the table.

While traditional philanthropy will always be vitally important, this new approach is proving to be far more effective in finding long-term, sustainable solutions that have the potential to not just help hundreds or thousands of people, but millions.

At Lilly, we have been very active in this collective approach to solving global health issues that disproportionately afflict people living in lower- to middle-income countries. Through our global health programs, we are actively engaged with nearly 50 leading health and governmental organizations to tackle two stubborn diseases: tuberculosis and diabetes. Through these efforts, our ultimate goal is to find solutions that can be scaled up and replicated around the world, creating ripple effects and touching even more lives.

The approach is best illustrated by Lilly’s two signature global health programs.

The first is the Lilly MDR-TB Partnership, formed to combat multidrug-resistant tuberculosis. Because Lilly has a legacy in fighting infectious disease, we saw an opportunity more than a decade ago to make a significant contribution to combatting this devastating illness, even though we now no longer market the medicines in question.

Tuberculosis is caused by an airborne bacterium, so it’s easily spread. It’s also difficult to treat, requiring six to nine months of treatment, administered under the direct observation of a healthcare worker.

When a TB patient doesn’t know they have the disease … or fails first-line treatment … or doesn’t adhere to the proper course of treatment … the TB strain can evolve into multidrug-resistant TB, or MDR-TB – a much harder-to-treat form of TB that may require up to 24 months of treatment. And MDR-TB, like the parent disease, can itself be spread.

The W-H-O notes that more than 450,000 people contracted MDR-TB in 2013, and about 170,000 died of it. Combatting MDR-TB effectively requires a comprehensive approach to address multiple social, economic and medical issues simultaneously.

In 2003, we launched the Lilly MDR-TB Partnership, and we have now committed $170 million since that time. Through this partnership, we have worked with local companies in China, India, Russia and South Africa – four MDR-TB “hot spots” – as well as a number of other partners to help create a more reliable supply of two critical medicines, to strengthen health care systems to better respond to the MDR TB threat, and to fund drug discovery efforts for badly needed new medicines.

Today, that partnership is comprised of more than 25 health organizations, academic institutions, and corporations, including Purdue University, the U.S. Centers for Disease Control, and the World Health Organization itself. Together, we’ve trained more than 100,000 health care professionals and nurses … distributed guidelines and toolkits to more than 45,000 hospitals and clinics … gotten messages about TB to millions of people in high-risk populations through innovative public awareness campaigns … and educated more than 350 journalists about the disease.

Other biopharmaceutical companies are involved in this fight as well. In 2011 the FDA approved the first new TB medicine in five decades – Sirturo, a treatment for drug-resistant TB developed by Janssen Pharmaceuticals. And just last year, the European Union approved another new MDR-TB treatment, Deltyba, developed by the Japanese firm Otsuka.

In addition, Lilly has joined multiple collaborations focused on early-stage TB research, including one with eight other pharmaceutical companies, four academic institutions, and the Bill and Melinda Gates Foundation to identify faster-acting drug candidates. The goal of this partnership is to shorten treatment time from the current minimum of 6 months to 2 months, which would keep an additional 1 million people on TB treatment each year, reducing deaths and slowing the development of drug resistance.

A second major global health initiative Lilly has undertaken is aimed at addressing non-communicable diseases, or NCDs, which include diabetes, cardiovascular disease, cancer, and chronic respiratory disease. Collectively, NCDs are by far the leading causes of death in the world, with more than 80 percent occurring in low- and middle-income countries.

In 2011, Lilly launched our NCD Partnership with a five-year, $30 million commitment. Our partnership is focused on helping people with diabetes living in impoverished communities. We’re working with our partners to strengthen diabetes care for people in rural and urban settings in Brazil, Mexico, India, and South Africa. In those four countries alone, 91 million people are living with diabetes – more than one-quarter of the population of the U.S.

In Johannesburg, South Africa, for example, we’re partnering with Project HOPE on a five-year community-based project that is addressing gaps in care for people at risk of – or already living with – diabetes.

Further south, in the vast rural stretches of South Africa’s Eastern Cape, we’re working with the Donald Woods Foundation to build on their success with home-based HIV programs to find ways to improve delivery of diabetes care.

Addressing a major societal need such as diabetes in this way is a great example of the “shared value” model. It illustrates what several studies have shown: that when companies such as Lilly tackle issues related to their core business expertise and their inherent business strategy, they are more deeply committed to finding solutions, they sustain their efforts longer, and they deliver better results.

I’m proud to say that Lilly has become an industry leader in pursuing this novel, “third-way” approach to improving global health. We’ve assembled an outstanding team to oversee our global health programs – led by Dr. Evan Lee, who brings the combined expertise of someone who has provided direct care to patients as a primary care physician, and global health experience from working in the field. Dr. Lee is based in Geneva, Switzerland, which is home to the W-H-O as well as numerous other health-focused foundations and non-governmental organizations.

Underpinning the collaborative approach of our global health programs is a novel framework that allows us to have far greater impact than traditional philanthropy. We call this framework Research, Report, and Advocate.

In the Research phase, we pilot new models of health care with our partners to understand if our interventions can help more people and improve overall health outcomes. The pilots are set up so that we can measure the effectiveness of our approaches.

In the Report phase, we share our findings openly – including what works and what doesn’t – in much the same way as we would make public the results of a drug trial.

The third phase, Advocate, is a sustained effort to champion the most effective and efficient approaches that lead to better health outcomes. The aim here is to educate governments and other global health organizations about our learnings, to help them make informed decisions about where to invest their limited resources.

In Russia, for example, we’re working with the federal government and multiple other partners to extend nationwide a program that actually grew out of our MDR TB Partnership. And in Mexico, the federal government is expanding across the country a diabetes treatment program that Lilly is assisting with through our NCD Partnership.

Those are just two examples of the power of partnerships to make a real and lasting impact on global health – multiplying exponentially what can be accomplished through traditional philanthropy alone.

I’d like to wrap up by repeating something I said earlier: that biopharmaceutical companies have both a unique ability – and a responsibility – to help improve global health. It is a cause to which we are deeply committed: most importantly through the work we do every day to develop innovative medicines … but also through philanthropy and sustainable, long-term partnerships with governments, universities, and non-profit organizations.

For biopharmaceutical companies such as Lilly, there is an inherent connection between achieving our core mission and contributing to social progress. And through our commitment to creating “shared value,” we’re working to further strengthen and deepen that connection to benefit more people, more quickly.

I feel very proud to have spent my career in an industry, and a company, whose success can be measured in longer lifespans and an improved quality of life for millions of people.

I’m sure there are at least a few idealistic young people among us tonight … if so, I very much hope you will consider a career in our industry. More than ever, we need bright minds with a strong commitment to ethical principles – such as the ones espoused by this university – to help figure out how to make this planet a healthier place for future generations. We have much to do – still.

To those of you in academia, I encourage you to take a look at our work, and if you’re interested in learning more, please let us know. We need more strong leadership, more collaboration, and more great minds to join in this effort.

Improving global health is a daunting challenge, and we have a lot of work ahead of us. But I’m optimistic that as biopharmaceutical companies such as Lilly increasingly link our corporate responsibility efforts to our core business – we will make tremendous progress in the years to come.

Once again, I appreciate this opportunity to speak as part of the Lugar Center Speaker Series, and I’d be delighted to take any questions you might have.

Thank you.

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