Eli Lilly CEO David Ricks told CNBC on Tuesday that prescription drug costs would still soar even if Democrats managed to cap the prices that pharmaceutical companies are allowed to charge.
“There’s a lot of rhetoric in the air, and most of it non-productive,” Ricks told with “Squawk Box. ” “We could cap that forever. And what we get is less innovation and still have growing health-care costs.”
Democratic proposals aimed at lowering health-care costs target Big Pharma directly.
Sen. Bernie Sanders, a Democratic presidential candidate, has endorsed a policy to bring U.S. drug prices in-line with what other nations pay. Sens. Kamala Harris and Amy Klobuchar, also 2020 candidates, support a plan to penalize pharmaceutical companies if the price of their drugs rise past a certain threshold.
House Speaker Nancy Pelosi’s latest draft of drug price legislation would allow Medicare to negotiate lower drug prices and also apply those discounts to private health plans across the U.S.
While Democrats support letting the government negotiate with drugmakers directly, opposition is strong among Republicans who say they want prices negotiated in a free market.
Ricks said he instead supports a White House-backed proposal from Senate Finance Committee Chairman Chuck Grassley, R-Iowa, that would make changes to Medicare, the federal government’s health insurance plan for the elderly, by adding an out-of-pocket maximum for beneficiaries.
Health and Human Services Secretary Alex Azar, in an interview on CNBC later Tuesday, responded directly to Ricks comments, blasting pharmaceutical companies for the high price of drug in the U.S., while other nations pay less.
“I just got off the phone with [Trump] working on a plan on how we can import drugs safely effectively from Canada, so the American people get the benefit of the deals that Pharma themselves are striking with other countries,” said Azar, who earlier in his career worked at Eli Lilly.
The pharma industry also supports a withdrawn plan from the White House that would have banned rebates that drugmakers pay to pharmacy benefit managers. The companies pay the rebates to the so-called PBMs, sometimes called middlemen, for getting their drugs covered by Medicare’s Part D prescription plan.
“We agree it’s time for change,” said Ricks, who joined CNBC shortly after Lilly reported second-quarter earnings and revenue that beat Wall Street’s expectations. “We agree that patients need relief in the cost of medications.”