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Eli Lilly chief executive escapes drug prices hearing

Diabetes advocates want to hear from CEO of U.S.-based company behind insulin price hikes

A woman hands an insulin pen to Sen. Bill Cassidy, R-La., during a 2017 town hall meeting on his health care legislation. (Jonathan Bachman/Getty Images file photo)
A woman hands an insulin pen to Sen. Bill Cassidy, R-La., during a 2017 town hall meeting on his health care legislation. (Jonathan Bachman/Getty Images file photo)

The chief executives of seven pharmaceutical companies will have to answer for the steep cost of medicines before a panel of senators on Tuesday.

The tableau of corporate heads raising their right hands to deliver sworn testimony about a growing public health crisis could recall scrutiny of the tobacco industry in Congress in the 1990s.

But the head of Eli Lilly, among the most recognizable drugmakers in the United States, won’t be among them.

The Senate Finance hearing on drug prices will mark the most high-profile questioning of drugmakers since Mylan CEO Heather Bresch testified about EpiPens in 2016.

Eli Lilly, an S&P 500 company headquartered in Indianapolis, has been a principal driver of the precipitous price of insulin. The company’s absence from the high-profile hearing has miffed diabetes advocates.

“If any company should be questioned, should it not be the U.S.-based one?” said Elizabeth Rowley, executive director of T1International, an advocacy group that campaigns for lower insulin prices.

Three companies — Eli Lilly, Novo Nordisk and Sanofi — comprise 90 percent of the market for insulin. And though the companies make competing products, they increase prices in lockstep.

Critics say the trio functions like a cartel. 

Type 1 diabetics cannot live without the medicine, but some have resorted to rationing their supply because they cannot afford the proper dose, which in some cases has resulted in death.

Sanofi CEO Olivier Brandicourt will testify Thursday. Eli Lilly CEO David Ricks and Lars Fruergaard Jørgensen, CEO of Novo Nordisk, headquartered in Denmark, will not.

Critics like Rowley question whether the committee was swayed by the relationship between Eli Lilly and the Trump administration. Health and Human Services Secretary Alex Azar served as president of the American division of Eli Lilly before Trump nominated him to his Cabinet.

“It seems all too obvious that Eli Lilly has friends in high places, getting them off the hook,” Rowley said. “Eli Lilly’s absence reinforces the suspicions of millions of Americans with diabetes that lobbying and power of influence are ensuring that the company does not have to be held accountable and will continue to price-gouge patients to their death.”

Azar has “instituted a robust screening arrangement” with the department’s ethics office to avoid such conflicts of interest, according to HHS spokeswoman Caitlin Oakley.

“Secretary Azar fully disclosed his former employment with Eli Lilly to the Senate, the U.S. Office of Government Ethics, and the HHS Ethics Office prior to his appointment at HHS,” Oakley said. “As required by the Ethics Pledge, he does not participate in any particular matters where his former employer is a party to the matter, or a party representative.”

The process for selecting which companies would testify was bipartisan, and not done with the political interests of Republicans in mind, according to spokesman for the committee’s chairman, Iowa Sen. Charles E. Grassley

“These are companies that have received high-profile attention recently,” he said.  

The spokesman did not respond to questions whether Azar’s position had anything to do with the absence of Eli Lilly.

But he did point to an investigation announced by the committee Friday into the three heavyweight insulin manufacturers.

In a letter to Eli Lilly’s Ricks, Senate Finance seeks a wide range of information about how the company sets the price of its insulin products.

By the committee’s accounting, Eli Lilly has drained billions from Medicare and Medicaid, public health programs that fall within the panel’s jurisdiction: Taxpayers paid the company more than $1 billion for its insulin product Humalog in 2016, according to the letter.

If the insulin investigation has teeth in the form of subpoenas of internal emails and documents, it could prove much more meaningful than even a well-publicized panel, according to Paul Thacker, a journalist and former congressional staffer who conducted investigations into the pharmaceutical industry under Grassley.

“These hearings are cocktail banter and scripted for television. [The companies’] stock prices aren’t going to be hurt by one bad news cycle,” Thacker said. “Things can get a lot more aggressive behind-the-scenes.”

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