Eli Lilly Announces Leadership Transition in China with Ben Basil Appointed as New President and General Manager

Recently, Eli Lilly announced personnel changes. Julio Gay-Ger, the current President and General Manager of Eli Lilly China, will be appointed as the Chief Marketing Officer for the diabetes market and Vice President of Global Marketing. He will take over all responsibilities of the Chief Marketing Officer, except for the obesity indication of Tirzepatide, and will report directly to Mike Mason, Senior Vice President of Eli Lilly and President of the Diabetes Division.

Keith Johns, currently serving as the Chief Marketing Officer of Eli Lilly's diabetes market and Vice President of Global Marketing, will retire on December 31 this year.

Ben Basil Takes Over from J.L. Wilkinson

Julio Gay-Garcia has served as President and General Manager of Eli Lilly China since January 2018.

According to publicly available information, Julio Gay-Ger has joined Eli Lilly and Company since 1995 and started to work in the United States. From 1997 to 2002, Julio Gay-Ger returned to Argentina and took charge of sales, marketing, and business development for Eli Lilly's South American branch. In October 2002, Julio Gay-Ger returned to the U.S. headquarters and took charge of global market compliance work outside the United States.

In 2007, Jacobo Cohen Imach was appointed as the General Manager of Eli Lilly for Argentina, Uruguay, and Paraguay. Starting from 2012, he served as the General Manager for Small and Medium Countries in Latin America, leading operations across five branches distributed in 22 countries. From June 2013 to December 2017, Jacobo Cohen Imach served as the General Manager of Eli Lilly Brazil.

After Ji Liwen's transfer to a new position, the role of President and General Manager of Eli Lilly China will be assumed by Ben Basil, who will continue to report to Ilya Yuffa, Senior Vice President of Eli Lilly and President of Eli Lilly International.

Ben Basil is currently the President of Eli Lilly's North Asia-Pacific Region and the General Manager of the Australia and New Zealand branch. He joined Eli Lilly in 1999 as a pharmaceutical representative and gradually advanced to management positions, holding various leadership roles including Global Marketing Director of the Eli Lilly & BI Diabetes Alliance, and head of marketing for disease areas such as oncology and Alzheimer’s disease in the United States.

Performance Decline in the First Half of the Year

Last year, the China region became Eli Lilly's best-performing market globally, with revenue of $1.661 billion, a year-on-year increase of 49%. However, the performance in the first half of this year showed a significant drop.

According to the financial report recently released by Eli Lilly and Company, its revenue in the Chinese market dropped by 15% year-on-year in the first half of this year, reaching US$759 million. Particularly in the second quarter, revenue fell by 32% year-on-year to US$352 million.

The main reason may still be attributed to the impact of centralized procurement and the medical insurance catalog.

Eli Lilly's products such as Verzenio and Tyvyt have significantly dropped in price due to their inclusion in the National Medical Insurance Catalog. Although sales volume has indeed increased, it is not enough to offset the impact of the price decline. Tyvyt’s revenue in the Chinese market was $73.6 million, a year-on-year decrease of 30%.

In addition, Eli Lilly's Humalog (insulin lispro) was included in the sixth batch of bulk procurement (insulin-specific) in November 2021 and took effect in May 2022. At that time, five of Eli Lilly’s products won bids, with an overall average price reduction of over 72%, leading to a 25% decrease in Humalog's revenue outside the United States to $208.3 million.

Eli Lilly CFO Anat Ashkenazi noted during the earnings call that future sales growth of Humulin in the Chinese market will gradually offset the impact of price reductions.

Adjust Strategy in China

In fact, as early as 2020, Eli Lilly and Company had already realized that the growth of the diabetes market in China had significantly slowed down, and began to "streamline" its operations in China. This included selling off expired patent drug businesses, proactively reducing prices to participate in bulk procurement programs, and laying off staff.

Moreover, the insulin centralized procurement has also put Eli Lilly under pressure in the diabetes field, which is its stronghold. Therefore, in 2021, Eli Lilly China began to adjust the business model of its Diabetes Alliance Division, focusing its business center on five key disease areas: oncology, immunology, diabetes, pain, and neurodegenerative diseases. For the first time, oncology and immunology took precedence over diabetes in priority.

In addition, in June of last year, Eli Lilly sold the rights to its off-patent drug Cialis in the Chinese mainland market to the Italian pharmaceutical company Menarini. In the same year, Eli Lilly China ceased to establish a dedicated retail store sales team.

Eli Lilly and Company proposed that in the next five years, it will launch 2-3 new drugs (including indications) annually in China, covering areas such as diabetes, oncology, and autoimmune diseases.

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