Eli Lilly CEO Joins Other Pharma Execs, Raises Concern Over Medicare Price Negotiations Impacting Drug Development

Eli Lilly And Co LLY CEO David Ricks voiced his concerns about the potential impact of Medicare price negotiations on drug development, which aim to reduce costs for older Americans. 

In an interview on CNBC's "The Exchange," Ricks said, "I'm really worried about the harm this will do to new cures and possibilities in medicine."

Ricks specifically referred to a provision in the Inflation Reduction Act, proposed by the Biden administration, which empowers the Medicare program to negotiate prices on the most expensive prescription drugs annually. 

This provision has garnered criticism from pharmaceutical executives. 

Last week, Merck & Co Inc MRK filed a lawsuit against the Biden administration to weaken the Medicare price negotiation program.

According to Ricks, the primary issue with the provision lies in the difference in timelines for price negotiations between small-molecule drugs and biologic medicines. 

Small-molecule drugs can be subject to price negotiations as early as nine years after receiving FDA approval, while biologics have a negotiation timeline of 13 years.

Ricks expressed concern that this distinction would significantly limit investment in small-molecule drugs, considered highly efficient in healthcare. 

He stated that investors are already questioning the rationale behind investing in small molecules when biologics receive a longer negotiation period.

Monday, the U.S. Chamber of Commerce filed a lawsuit against the federal government, challenging a recent law that grants Medicare the authority to negotiate drug prices with pharmaceutical companies.

Pfizer Inc's PFE CEO Albert Bourla called U.S. plans to negotiate drug prices for its Medicare health program "negotiation with a gun to your head."