Price Controls

Competitive market conditions are the most efficient way of allocating resources and rewarding innovation. The U.S. Department of Health and Human Services (HHS) has warned that price controls on medicines could hurt innovation and patient care at a time when it takes 10 to 15 years at an average cost of $1.3 billion to create one new drug. In a 2002 study on the benefits of pharmaceutical innovation, HHS said, “If applied broadly in the United States, government-controlled restrictions of the coverage of new drugs could put the future of medical innovation at risk and may retard advances and treatments in the development and introduction of new products.”  Lilly believes that the best way to drive down healthcare costs and provide quality care to all Americans is to rely on the robust competition of private health plans.

Given the absence of genuine market conditions in many countries, Lilly is committed to engaging with governments and other parties to discuss principles and pragmatic public policy approaches that will enable the development of government pricing and reimbursement systems that reflect the value of products, include the patient perspective, and reward innovation. 

Governments today are under varying degrees of cost containment pressure and difficult decisions might have to be made; however, it is critical to balance affordability concerns with improving patient outcomes and rewarding innovation. Lilly believes that pricing and reimbursement policies should meet the needs of multiple stakeholders by:

  • Allowing rapid patient access to new medicines.
  • Rewarding the value of biopharmaceutical innovation.
  • Reflecting the needs and characteristics of the local marketplace.
  • Achieving a sustainable medicines policy driven by patient outcomes and increased quality of care.
  • Including mechanisms that are predictable and transparent.