Eli Lilly stock fell by $20B because of a fake tweet about free insulin
twitter.com
twitter.com
> Notably, as well, Eli Lilly was ordered to pay $176.5 millipn to Teva in U.S. migraine drug patent trial on November 9th. [2]
[1] https://twitter.com/quantian1/status/1591149510168039426
[2] https://twitter.com/unusual_whales/status/159115414597705318...
Not surprised at all. People think some portfolio manager see an obviously fake tweet and immediately unloads their position?
Something like "scan all tweets of the last day for names of our stocks + some keywords, but restrict the search to verified accounts only".
That kind of signal would be strongly affected by the current chaos.
It's not what they think about this, it's what they think others will think about this. It doesn't matter whether it's true or not; it's just market confidence.
Any movement is another data point. Nobody wants to be the last one out.
1) People make trades based on information, at least sometimes
2) People are tricked by false information, at least sometimes
Eli Lily has market cap of $335B and 3M shares traded daily.
It’s unlikely that the system has a quick mechanism to do this
But it didn’t happen which indicates manual traders agree with the drop in general, indicating it wasn’t caused by the tweet.
Content was super suspicious, sure. But even with that, if you assume others will believe that, you will react even of you yourself don't.
I mean come on. The tweet said "We are excited to announce insulin is free now." Does that actually seem like corporate messaging? No product mention, no talk about how ethical they are?
It was obviously fake.
> Eli Lilly’s insulin products sold $878 million in one quarter alone recently. Again lilly’s main insulin is at 43-60x price markup! It’s almost all profit!
> Lilly, Novo & Sanofi together supply 100% of all insulin in the US, and 90% of entire world!
All the other details aside, this doesn't feel okay and I cannot believe that elected officials voted against legislation to prevent this sort of a markup situation. Whatever happened to them needing to represent the interests of the people?
Note that those markup figures are based on production cost, excluding capital investment. Lilly is profitable, but not any more profitable than Google or Facebook or Apple.
Making critical products less profitable than less critical ones is often contrary to “the interests of the people.” It drives investment from stuff like new pharmaceuticals to stuff like dating apps.
Insulin is actually a perfect example of that. The first generation insulins now are relatively cheap. The “insulin” we’re talking about here are second-generation insulin analogs, which are easier to administer and help better control blood sugar levels. We are at the tail end of the patents on those and we are already starting to see generic insulin analogs being made at Wal-Mart.
You have to think about the system in terms of how humans work and their motivations. Brilliant people who can make new, better insulin aren’t born any more altruistic than the people whose talents are better suited to coming up with new advertising algorithms. They want to make a bunch of money from their work. If you make it so that smart people can make more money doing an ad-tech startup rather than a bio-tech startup, that’s what they’ll do.
[1] https://www.npr.org/sections/health-shots/2018/09/01/6416158...
[2] https://nymag.com/intelligencer/2019/07/another-person-has-d...
As to why people try to ration more expensive insulin is I suspect the “donut hole.” The young man in the first article aged out of his parent’s insurance, which was probably paying for his second-generation insulin. He probably had no idea what other options were available, or was concerned the first generation insulin was less safe.
A lot of people have limited executive functioning and our society isn’t good about helping them access the options available to them. A close family member of mine had a heart attack and was saddled with a $50,000 hospital bill. He had been eligible for Medicaid for years, but just never signed up.
The net price (what the manufacturer actually gets for Humalog) has dropped 16% since 2015. In 2019 the list price is $275 but the net price is $60.
https://1.bp.blogspot.com/-VfnPjfmmwUY/XzFtgfU87XI/AAAAAAAAq...
https://www.businessinsider.com/insulin-price-increased-last...
As a Canadian, where Americans often come here in droves to buy cheap insulin i've often wondered the same thing.
https://www.ctvnews.ca/health/caravan-of-americans-cross-int...
Americans drive 1,000 KM just to get affordable insulin which in many cases is a life or death drug?
The relatively inelastic demand of insulin analogues when synthetic human insulin is available shows how important analogues are to T1 diabetics.
Sometimes pharma companies try to allude to analogues being a luxury good compared to synthetic human insulin. But to T1 diabetics this notion is generally ridiculous. Analogue insulins allow them to regain a little bit more quality of life lost to the disease, and that should be a human right when insulin manufacturing costs are so low.
edit: yes, seems it is indeed - https://news.ycombinator.com/item?id=33572721
However, it also mentions that some people need 50-60 units per meal and a vial contains 1000 units. Assuming three meals per day, someone using 50 vials per meal would spend $666.66 per month.
$666.66 per month would be prohibitively expensive for many people and even $50 to $75 could be a significant expense for people making minimum wage (depending on local minimum wage it could be equivalent to 7-8 hours of work before taxes).
https://4allfamily.com/blogs/diabetes/how-long-does-a-vial-o...
3 meals a day * 30 days would be 90 meals.
90 meals / 20 doses / 1 vial = 4.5 vials / month
4.5 * 25 = 112.5
I’m not seeing how we get to $666
Here's how I would do the math: 50 units per dose x 3.5 meals on average x 2 for basal = 350 units a day. Or 0.35 vial per day, and 10.7 vials per month. Assuming synthetic human insulin and not insulin analogue is used, that means about $270 per month.
However, some caveats:
- synthetic human insulin is not fast enough for most carbohydrates in meals, and it results in higher blood glucose spikes immediately after a meal than using an insulin analogue. The higher the blood glucose, the more insulin it takes to lower it the same amount. Moreover, we only have so many hours in the day, and slower acting synthetic human insulin needs time to work. So people using it are more likely to "overcompensate" and then eat a bit later to offset their dose. This is a very long-winded way of saying that a person might need slightly more synthetic human insulin than analogues, plus synthetic human insulin in general is less effective.
- In my calculations, I did not include correction bolus doses, insulin used to prime needles, and pump infusion sets (although probably very few people use human synthetic insulin in pumps anyways). I also did not include insulin that is spoiled in some way (refrigerator breakdowns, reserve insulin taken on trips that's not refrigerated, heatwaves, and so on).
- Most people use between 70 and 110 units of insulin per day, whether that's a combination of an insulin analogue and basal insulin injections, or using insulin analogue in a pump. I don't know how much synthetic human insulin is used per day on average, probably a bit more.
So I would say in practice, for someone who uses that much synthetic human insulin, the cost can be even $400 per month. For analogues, it would be much, much higher.
I think it makes sense for me to provide a source for all this - I care for someone with T1 diabetes and am somewhat connected with the broader T1 community.
Does it feel okay that the government does not fund R&D directly resulting in medicines in the public domain?
Seems like voters want low taxes, or voters are unable/unwilling to vote for politicians that would direct taxpayer resources to developing medicines, and hence private businesses have to fund the R&D.
In which case, once the hard part is done, the taxpayers now want to reap the rewards via price controls?
And if the argument is that taxpayers already fund R&D that the private companies use, then the problem is laws (or lack of enforcement) allowing private companies to patent discoveries made with taxpayer money, which seems like it would be blatantly illegal.
They are representing the interests of the people*.
* Rich people. You know, the ones who matter. It would be communist to listen to poor people, and they don't bribe well either!
Most of the time it is either extremely exaggerated or outright false.
The "taking heads" always want to find some sort of causation/correlation and often it is just absolute garbage.
One day they may make a statement like : "Stocks tumble on Ukraine updates"
The very next day : "Stocks rally on Ukraine updates".
They just look for any "news" to try to show they understand the interconnected nature of news and markets. Often they are just grasping at straws.
Here's the thing.. If they could actually do what they say they are doing, hedge funds would be snapping them up and paying them far more.
When CPI went sky high few months back and the stock market still rallied the news was "S&P rallies while investors digest CPI information".
Like, what is this even supposed to mean?
I thought it was “identity confirmed” and when Elon started charging for it, it would basically allow anyone to confirm they are who they say they are.
Except it allows anybody to say they are anybody and Twitter will go “yep, we can confirm it’s true!”
Like, why the hell does getting the checkmark not update your name to match the credit card used for payment?
The trolling (both for fun and for harm) on platform went off the charts last two weeks and there are multiple blue checkmarks accounts for a lot of companies/individuals.
It shows you how stupid and greedy people and algorithms can be. They take unvetted input and blindly run with it? Really? That existed long before Twitter. It's not Twitter's fault that stupid scales so easily.
When will The Media and Wall Street - and political leaders? - learn that Twitter is a source of info *that must be vetted*. Ignoring that fact, and letting your internal biases get the best of you is simply not an option *anywhere on the internet*.
Twitter is correlation, not causation.
The ONLY way to authenticate someone on twitter has been those check marks. And this week that all went to hell.
It is the same thing on tiktok they have verified accounts and I know that someone at tiktok verified this is X.
Up until this week those blue checks meant something and people who are not in the new cycle would not have known. I/We are in the news cycle because we are nerds/techies.
The whole market may have been heading down but this contributed.
And for the record, you don't just vet source, you vet the information itself. If it can't be confirmed and you act anyway...well that is by defintion child's play.
If children - *in adult bodies* - want to play in traffic on Twitter, it's not Tw's job to police them, or change their diapers when they shat their pants.
Who's wrong now??
But the blue check mark is really how most people (myself included) decide if a source is real on twitter. And that was destroyed this week by someone who apparently does not actually understand how twitter works.
So assuming a lot of people also trust that check mark and now what should be a good reliable source of information gave out something that is false. It was clearly part of it.
Was that the only reason the stock dropped? Probably not. The stock market is effectively random and only barely involved in reality.
I'll let the algos sort the mess of correlation or causation, truths and untruths, and just buy if they told me to.