Major drug maker Eli Lilly denounced imports from overseas to provide competition for extremely high-priced drugs.
Lilly’s comments on Tuesday during an earnings call comes nearly a week after the Trump administration said it plans to examine using foreign imports to fight high prices. Lilly said the method itself was concerning.
“We think that is the wrong road to go down,” said Lilly CEO David Ricks on the call. “We agree it should be solved, [it’s] the method we disagree with.”
The FDA will import drugs approved overseas to alleviate a drug shortage. However, Health and Human Services Secretary Alex Azar, who previously ran Eli Lilly’s U.S. division, wants the agency to create a task force to look into importing drugs overseas to compete with a drug that is off patent and has risen dramatically in price.
HHS used the notorious example of the anti-malarial drug Daraprim. Turing Pharmaceuticals, while helmed by controversial ‘Pharma Bro’ Martin Shkreli, raised the price of Daraprim by 5,000 percent practically overnight from $13.50 a pill to $750 in 2015.
Shkreli ignited a public outcry over the price. He was later found guilty of multiple charges of fraud, unrelated to the drug price hike.
Daraprim is a drug that has been out of patent for years, but has no other competition because it serves a small patient population.
The FDA could decide to import a version from an overseas manufacturer to compete with a drug like Daraprim.
Ricks said that the FDA should “fix the regulatory system to begin with,” instead of using imports. “This is a regulatory failure from our perspective,” he said.
Ricks also said that Lilly is taking a wait-and-see approach to the Trump administration’s drug pricing blueprint, which was announced back in May.
“There are dozens of ideas in there,” he said.
But he is planning for changes to how rebates are done through Medicare. The Trump administration is already drafting regulations that would change Medicare’s rebate system, which has been criticized by Azar.
Under Medicare Part D, the program’s prescription drug plan, the drug maker negotiates with a third party vendor like an insurer or drug middleman for a rebate to a drug.
But Azar has said that the rebate system creates an incentive for higher prices since both insurers and the drug middlemen, called pharmacy benefit managers, get a cut of the rebate. A higher rebate means a bigger cut for the vendors.
Ricks said that he is open to changes to rebates.
“We are shifting too much of the cost via list pricing directly to consumers,” he said. “If consumer pricing came down [it] would improve volume and medication adherence for patients.”
