Eli Lilly CEO, Dave Ricks, said the company opposes the White House’s proposed “most favoured nation” pricing laws.
The company is one of many companies that signed a deal with the Trump administration last year, agreeing to charge similar prices for prescription drugs in the U.S. as in other countries.
The deal is expected to eventually increase the number of prescriptions but hurt sales. It also gave Eli Lilly a three-year exemption from tariffs.
A concern expressed by Eli Lilly and other critics of the policy is that high U.S. prices are necessary to fund research and development of new drugs.
“I think we see a lot of people who would rather reduce prices today and not worry about whether we have any new medicines tomorrow, not worry about whether America will have a robust drug industry and we’ll be able to do research in this country,” Ricks said.
“And I worry about those things, so I don’t think that’s a great idea, and we’ve been pretty clear with the administration and the congressional leaders about that.”
The development of new drugs can cost billions once regulatory hurdles and failed trials are taken into account. The U.S. also accounts for roughly 40% of the world’s global pharmaceutical revenue.
While Ricks said he believes the Trump administration is listening to the companies' concerns, Lilly will use “all the tools we have to combat bad policy, and we think it would be bad policy.”
This comes as the U.S. Food and Drug Administration approves Eli Lilly’s GLP-1 pill.
President Donald Trump has long complained that Americans pay high prices to subsidise low prices for medicine in the rest of the world.
The most favoured nation drug pricing policy aims to reduce the price of prescription drugs in the U.S. by basing them on lower prices in other developed nations.
This comes as Americans often pay around two to three times more for identical drugs in other countries, due to a lack of centralised price negotiation tactics or regulations.
Under the most preferred nation policy, Medicare would pay for certain drugs based on an international price index, specifically, no more than 102% to 105% of the lowest price among comparable developed countries.
The White House in recent months has pushed Congress to codify elements of the deal.
A draft text is yet to be shared with the public, and the administration said it’s trying to get pharmaceutical companies to back the effort.
The new policy has also caused drugmakers to delay some European launches.
Eli Lilly (LLY: NYSE) stock grew 3.78% on Wednesday (Thursday AEDT) to US$954.52.
