Eli Lilly's Ebglyss Expansion into Quebec: A Strategic Win for Long-Term Revenue Growth

Eli Lilly's Ebglyss (lebrikizumab), a biosimilar targeting the IL-13 pathway for atopic dermatitis, has carved a unique niche in Quebec's evolving dermatological biologics landscape. While the drug faces headwinds in broader Canadian markets due to the Canada Drug Agency's (CDA-AMC) recent non-reimbursement recommendation Lebrikizumab (Ebglyss) | Canadian Journal of Health^[3], Quebec's conditional approval by INESSS and its biosimilar-focused reimbursement policies position the province as a critical growth corridor for Lilly. This analysis explores how Quebec's regulatory environment, coupled with strategic market positioning, could unlock long-term revenue potential for Ebglyss despite near-term challenges.

Quebec's Biosimilar Mandates: A Double-Edged Sword

Quebec's Régie de l'Assurance Maladie du Québec (RAMQ) has been a pioneer in biosimilar adoption since 2022, mandating their use for key dermatological biologics like adalimumab, etanercept, and infliximab List of medications - Régie de l’assurance maladie du Québec^[1]. These policies aim to reduce healthcare costs by up to 50% compared to reference biologics INESSS: List update schedule in 2025^[4], with savings reinvested into expanding access to innovative therapies. However, this aggressive cost-containment strategy has created a paradox: while it incentivizes biosimilar uptake, it also raises the bar for new entrants like Ebglyss to demonstrate value.

As of September 2025, Ebglyss is not listed in RAMQ's drug formulary List of medications - Régie de l’assurance maladie du Québec^[1], but INESSS's conditional positive recommendation—issued in August 2024—signals a path to coverage under specific therapeutic conditions Lilly Canada remains steadfast in commitment to access options...^[2]. This conditional approval is a strategic win for Lilly, as it aligns with Quebec's broader goal of balancing cost savings with access to cutting-edge treatments. The province's healthcare system, which prioritizes evidence-based innovation, may view Ebglyss as a complementary option to existing biosimilars, particularly for patients who fail to respond to first-line therapies.

Navigating Competitive Dynamics: Ebglyss vs. Dupixent

Ebglyss's primary challenge lies in differentiating itself from market leaders like Dupixent (dupilumab), which dominates atopic dermatitis treatment due to its broad approval across multiple inflammatory conditions Lilly Canada remains steadfast in commitment to access options...^[2]. However, Ebglyss's unique mechanism of action—targeting IL-13 directly rather than the IL-4/IL-13 pathway—offers a distinct therapeutic profile. This could appeal to advanced practice providers (NPs and PAs) who are increasingly involved in dermatological care and show moderate interest in novel mechanisms List of medications - Régie de l’assurance maladie du Québec^[1].

Moreover, Ebglyss's less frequent dosing schedule (every 4 weeks vs. Dupixent's every 2 weeks) may enhance patient adherence and reduce healthcare system burden Lilly Canada remains steadfast in commitment to access options...^[2]. While clinician preference remains a key barrier to adoption, Lilly's savings card program—allowing patients to pay as little as $25/month if RAMQ coverage is delayed—mitigates out-of-pocket costs and bridges the gap until formal reimbursement is secured List of medications - Régie de l’assurance maladie du Québec^[1].

Strategic Implications for Long-Term Revenue

Quebec's conditional approval of Ebglyss, combined with its biosimilar-centric reimbursement framework, creates a hybrid opportunity for Lilly. The province's healthcare system is designed to prioritize cost-effective innovation, and Ebglyss's conditional coverage could serve as a pilot for broader adoption. If successful, this model could influence other provinces to follow suit, leveraging Quebec's experience as a proof of concept.

Furthermore, the global dermatological therapeutics market is projected to grow at a compound annual rate of 8.5% through 2030, driven by biologic adoption and unmet needs in chronic skin conditions Dermatological Therapeutics Market - Size & Share^[5]. Quebec's population of ~8.6 million represents a 1.3% share of Canada's total, but its progressive healthcare policies make it a bellwether for national trends. For Lilly, securing a foothold in Quebec could accelerate Ebglyss's integration into national treatment guidelines, even as the CDA-AMC controversy plays out.

Risks and Mitigation

The primary risk lies in RAMQ's delayed implementation of INESSS's conditional recommendation. If Ebglyss remains excluded from the formulary beyond 2025, reliance on the savings card program could limit scalability. However, Lilly's commitment to challenging the CDA-AMC decision and its partnerships with private insurers provide alternative pathways to market access Lebrikizumab (Ebglyss) | Canadian Journal of Health^[3]. Additionally, Quebec's scheduled September 2025 drug list update offers a near-term opportunity for formal inclusion INESSS: List update schedule in 2025^[4].

Conclusion

Eli Lilly's Ebglyss expansion into Quebec is a calculated bet on the province's dual mandate of cost containment and innovation. While the drug's path to widespread adoption is not without hurdles, the conditional approval by INESSS, combined with Quebec's biosimilar-friendly policies, creates a strategic corridor for long-term revenue growth. For investors, the key takeaway is that Ebglyss's success in Quebec hinges not just on clinical differentiation but on Lilly's ability to navigate regulatory nuances and leverage the province's role as a healthcare innovator.