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Eli Lilly CEO Calls For Uniform Prices, Better Use Of Technology In Health Care

Thursday, June 7, 2018   (0 Comments)
Posted by: Kate Oesterle
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The American health care system is an unsustainable, half-century-old design that engages in price discrimination and has failed to employ technology to its potential to lower costs and expand access, Eli Lilly And Co. 

CEO David Ricks told the Detroit Economic Club Thursday.

The pharma exec’s proposed solution is threefold: the health care system must be digitized to “unleash the power of data,” consumers need to be empowered to manage costs and the payment system for health care products and services should be based on the value they produce.

Ricks, 49, who has served as Eli Lilly's CEO since 2017 and worked there for 20 years, offered a stark projection to illustrate the need for reform.

“Thirty years from now, one disease — Alzheimer’s — will generate more spending in Medicare and Medicaid than the entire military budget.”

A Call For Uniform Drug Pricing

Insulin, Eli Lilly’s No. 1 product, shows the wide gap between the amount paid by government-sponsored insurance with “artificially depressed” prices and the amount paid by individuals, Ricks said.

Medicaid pays 10 cents per vial, the lowest price for insulin in the world, he said: “I can assure you that’s far below our cost to produce it.”

Cash patients pay $300 per vial and are barred from receiving rebates, Ricks said.

“Their payments are actually subsidizing the Medicaid system.”

On June 1, the FDA approved Olumiant, Eli Lilly’s rheumatoid arthritis drug with partner Incyte Corporation.

Olumiant is being launched at a 60-percent discount to competitors, Ricks said Thursday.

“This is a kind of experiment to test out a low-price, low-rebate, less cost-shifting type of model.”

At many hospitals, the average markup for drugs is 250 percent, and medicine is used to generate profit, Ricks said.

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