Public Policy

Changes in the U.S. health care system have created greater consumer cost-sharing and a growing number of patients exposed to a medicine’s full retail price – effectively shifting the burden onto the sick to subsidize the healthy. Broader systemic change is needed, which requires action by all relevant stakeholders.

We need to restructure the financial incentives of the entire pharmaceutical supply chain to ensure patients benefit with access to safe and affordable medicines.

Lilly is actively working with other key stakeholders to seek long-term policy solutions to address the gaps in our current health care system. We remain committed to finding solutions – both legislative and non-legislative – that will help people with chronic diseases have affordable access to their medicine.

To learn more about the U.S. health care system and Lilly’s positions, view the resources below.

• Driving Innovation in Employer Health Benefit Design White Paper

• Lilly's 2018 Integrated Summary Report

• Trends in Health Care: High Deductible Health Plans

• Trends in Health Care: First Dollar Coverage

• Dave Ricks’ USA Today opinion column about rebate reform, "Rebate rule would help make prescriptions more affordable for more patients"

• PhRMA's Response to U.S. Health and Human Services Department on the Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs

Lilly believes that value-based arrangements have the potential to improve patient outcomes while lowering costs for the entire health care system. Payments for most medicines are still based on traditional outcomes, such as volume of product purchased or cost per unit. We believe the price of medicines should be linked more directly to patient outcomes.

Further, we think this is one of the most important long-term changes we can make as an industry. We want to create a system here in the United States in which pharmaceutical innovators are rewarded – not for selling their product, but for the value it delivers inside the health care system.

We strongly believe that outdated policies and regulations should not prevent the development of new, better ways to pay for medicines. We continue to advocate for legislative and regulatory changes that support this transition. See additional resources:

• Lilly/Prime Therapeutics White Paper: "Advancing Patient Interests Through Value-Based Arrangements for Prescription Drugs"

• Lilly/Anthem White Paper: "Promoting Value-Based Contracting Arrangements"

• What are Value-Based Arrangements?

It may sound like an easy fix but importing drugs from Canada or any other country will not help Americans struggling to pay for their medicines. Importing drugs is a risky practice, as these drugs are not inspected for safety and efficacy as they are in the United States. Imported drugs do not go through the same rigorous process as U.S. Food and Drug Administration (FDA) review, and are often sold through dangerous, unregulated and illegitimate online pharmacies.

Instead, efforts should focus on addressing the root of the problem. Changes in the U.S. health care system have created greater consumer cost-sharing and a growing number of patients exposed to a medicine’s full retail price – effectively shifting the burden onto the sick to subsidize the healthy. Broader systemic change is needed, which requires action by all relevant stakeholders. We need to restructure the financial incentives of the entire pharmaceutical supply chain to ensure patients benefit with access to safe and affordable medicines at their pharmacy counter here at home. See additional resources:

• Drug Importation 101

• PhRMA: Medicine Safety and Drug Importation

Strong intellectual property (IP) protections are one way we encourage innovators to focus on difficult problems like untreatable medical diseases. They are the bedrock for developing new treatments and cures, and are critical to improving patient care, spurring innovation and strengthening our economy. Without strong IP protections, innovation would mostly focus on low-risk ventures, leaving large swaths of unmet medical needs.

IP protections recognize the time, cost and uncertainty related to the research-and-development process for medicines, and the substantial investment required for FDA approval. Two important forms of IP protections for medicines are:

• Patents, granted in the U.S by the U.S. Patent and Trade Office (PTO), give inventors the exclusive right to their inventions without others being able to copy and sell them for a set period of time (20 years from the application date of the patent); and

• Data exclusivity, granted in the U.S. by the FDA, which prohibits third parties for a set period of time from using or relying on an innovator’s valuable clinical trial data to obtain FDA approval for their product.

Additionally, read Dave Ricks' Financial Times opinion column about IP, titled "The search for a dementia cure rests on innovators," and view Lilly's infographic about the importance of IP in the biopharmaceutical research ecosystem.

For Lilly, expanding affordable access to medicines is a priority. One aspect of this is setting the list prices for our medicines. Pricing our medicines is one of the most important decisions we make as a company. We strike a balance between access and patient affordability, while sustaining investments to research innovative life-changing treatments for some of today’s most serious diseases. When pricing our medicines, we consider:

• Customer Perspective: the unmet needs those medicines can fulfill for patients and caregivers, and how people can affordably access the treatment

• Competitive Landscape: the benefits of our medicines compared to alternative therapies, where our medicines fit in treating conditions, and existing contacts between payers and our competitors

• Company Considerations: the cost of research, development, manufacturing and support services for customers; business trends and other economic factors; as well as the medicine’s potential market size, patent life and place within our larger portfolio of medicines

• Other External Factors: other external factors such as health system changes and policy guidelines

Additionally, reference Lilly's 2019 Integrated Summary Report.

Lilly recognizes that many patients face increasing costs and other barriers to accessing the treatments they need. When you’re living with a serious condition, or caring for someone who has one, it’s imperative to access the right medicine at the right time. We are committed to working with our health system partners to help ensure access to our medicines. Lilly strives to do its part to ensure access through the following guiding principles:

• Flexibility: Every medicine involves unique access challenges that are shaped by the broader category of the medicine. Lilly is flexible to develop solutions that solve for distinct issues.

• Broadening Responsibilities: As an innovative medicines’ manufacturer, Lilly may need to extend its responsibility beyond developing medicines to help ensure that they can be accessible to patients. Lilly extends its responsibility where it is needed, to do the right thing by patients and more deeply support access.

• Collaboration: Solving access challenges in today’s complex health care environment requires leadership and cooperation from many stakeholders to find sustainable solutions that work. Lilly uses its position as a large manufacturer of medicines to convene broader stakeholders and encourage cooperation and collaboration to create lasting solutions.

Lilly supports the development and approval of new medical technology such as biosimilars that can benefit patients. However, given the difficulty and complexity of developing and manufacturing biological products, policies for approval of these products with an abbreviated data package must proceed carefully with patient safety at the forefront and respect for the innovator’s intellectual property. Biosimilar products have an important role to play in the health care system for the benefit of patients, provided that they are approved based on rigorous, science-based standards. Clinical evidence must be at the foundation of all decisions.

• Science-based regulatory reviews should determine if biosimilars meet interchangeability standards.

• Patients should receive the medicines their doctor prescribes.

• Only interchangeable biosimilars should be eligible for automatic substitution by pharmacies.

• Small differences in biological medicines’ manufacturing processes can cause difficult-to-predict changes in safety and efficacy.

• Countries with insufficient regulatory standards produce products that pose a risk to patient safety and should not be considered as a "biosimilar."

• Biologics and biosimilars should have unique, differentiating names.

• Strong laws for data exclusivity and patent protection strike the balance between patient access and innovation of new medicines.

Additional resources:

• Summary of Lilly's Position on Biosimilars

• Biologics vs. Biosimilars Infographic

• Biologics vs. Biosimilars Video