Orforglipron is an oral drug from Eli Lilly that’s in trial stage. The New York Times reports that in a trial of over 500 patients, those “who took the highest dose lost an average of around 16 pounds after nine months.” The Times added that roughly “two-thirds of people who took the drug also saw their blood sugar levels fall to target range.”
Which is at first glance a comment that markets work. Diets and exercise have long failed exactly because they’re non sequiturs relative to the true cause of weight gain: appetite. That’s why weight for so many has fluctuated for so long. Diets don’t fix what causes weight gain in the first place, while exercise runs against millennia worth of evolution during which humans walked and ran all day and night in search of calories in brutally limited supply.
In addressing the challenge of appetite, Ozempic et al address the problem. Which is where orforglipron re-enters the picture. The success of the initial medical advances signals substantive investment in improvements on Ozempic and others, including presumably lower prices in time.
That’s why the “Most Favored Nation” (MFN) pricing that the Trump administration would like to foist on U.S. pharmaceutical companies is so puzzling. MFN is a policy for drug prices whereby the federal government would pay no more for certain prescription drugs than the lowest price paid by any other developed country with a similar GDP. The policy raises a basic question: why?
In asking why, forget “GDP” that doesn’t come close to measuring the staggering dynamism of the U.S. economy, and instead just contemplate the actual U.S. economy. Why on earth would the U.S. want to mimic the relatively sclerotic parts of the world that would pursue something as economically backwards as price controls? Put another way, why would the U.S. mimic that which routinely reveals itself in shortages of the desired market good or service?
From there, contemplate what’s true, that if you’re a business with growth ambitions, you have a U.S. strategy. It’s that simple. Precisely because the American people are the world’s most productive, they’re also the world’s most acquisitive. Relentlessly acquisitive people don’t take well to scarcity simply because they want what’s great and transformative (including health advances) well before the rest of the world.
Notable here is that while Eli Lilly manufactures orforglipron, Tokyo, Japan-based Chugai initially developed the drug. Stop and think about the latter vis-à-vis calls for MFN. Does anyone think Chugai would be working with Lilly if the U.S. had long done as other, slow-growth parts of the world have done with price controls? Hopefully the question answers itself.
The beautiful truth is that it takes global genius to develop the amazing drugs of tomorrow as Chugai reminds us, but the U.S. is uniquely the place where global genius aims to manufacture and distribute the fruits of its talent. Let’s not wreck what’s brilliant and that is magnet for so much pharmaceutical brilliance by embracing the very price controls that repel it.
