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Eli Lilly and Co. (LLY) are better off than many other drug manufacturers before the contentious media likely to cause increased regulation.
The company touted its profits in terms of volume beaten Tuesday, noting that it had chosen not to raise drug prices despite a potential profit on the balance sheet.
"The prices have been a little tough this quarter," David Ricks, CEO, told CNBC. "Of course, if we had increased prices, it could have offset some of that."
The conservative pricing approach comes as the Trump administration and many Liberal candidates were supportive of the regulation and transparency of drug prices, a rare deal.
In the past, "covenants" prevented pharmacists from informing patients when they paid for their prescriptions out of pocket were cheaper than using their insurance.
Ending restrictive clauses is the last step in President Trump's plan to stop unjust drug prices. https://t.co/BFxNwoFjoT
– The White House (@WhiteHouse) October 14, 2018
There is no reason that patients in Milan, Missouri, pay more for their medications than those in Milan, Italy.
Learn more about Claire's latest drug price survey published by @columbiatribune: https://t.co/rU40lOQNug
– McCaskill Office (@McCaskillOffice) November 1, 2018
Secretary of Health and Social Services, Alex Azar, denounced the abusive prices in the industry.
"Our vision of a new, more transparent drug pricing system is not based on voluntary action." Azar said in a statement. "The pharmaceutical industry remains reluctant to real price transparency, including the extremely high list prices that many patients pay."
Ricks acknowledged that it was possible to work with regulators, as evidenced by his changing prices, which he is willing to do.
"There are things we like, where we could work with the administration to support the principles of free market and innovation," he said, advocating a non-interventionist approach.
Although he quickly repudiated price controls and brutal interventionism, he curbed innovation.
"There are things we do not like, importing Europe price controls from the top of the list," Ricks said.
Ricks will certainly not be the only voice in the industry to voice concern over the import of such a harsh regulation if a potentially "bluer" legislature was looking to work with Trump on a common interest .
On October 30, Ian Read, CEO of Pfizer (PFE), spoke about this in his speech on results. He suggested that the current issue should be softened when the time comes.
"I expect that, like most industries, we would review our pricing situation in January and make decisions based on competition and our value proposition on the new market," he said. declared. "We have worked with the President on some parts of the project and I expect our approach to be what I would call" normal "by the end of the year.
As usual in 2017, price increases have reached about 20% for 91 drugs, according to the Financial Times. Such increases would probably attract more than just angry tweets from the Oval Office and the wrath of legislators campaigning on the issue.
Lower prices may well reduce the margins of many large pharmaceutical companies, but it may be necessary to preserve the sector's self-sufficiency and generate sufficient profits to enable R & D investment.
The good thing for Eli Lilly investors is that the company already seems effective in controlling itself.
The drug maker has shown itself capable of surpassing estimates and increasing research spending, even without raising prices, a significant capacity in a context of eventual price suppression.
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