Executives at a big U.S. drug company say the Patient Protection and Affordable Care Act (PPACA) is one of the factors giving payers in the United States more power to bargain for better prices.
The executives at the company, Eli Lilly and Company (NYSE:LLY), talked about the effect of PPACA and other drivers on drug prices last week, at a meeting the company held to tell investors about its plans for the coming year.
John Lechleiter, Lilly’s president, said the company will cope with the effects of expiring drug patents and payer price resistance by developing treatments for diabetes, cancer and sick animals, and by holding down operating expenses.
Lechleiter and other company executives also answered questions about effects of changes in the U.S. health finance system on the company’s performance.
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“The Affordable Care Act of 2010 was the most significant U.S. legislation of its kind since Medicare,” Lechleiter said. “It’s reshaping health care and health care delivery.”
To learn more about what Lechleiter and his colleagues said, read on.
1. Drug companies are facing pressure to control costs all around the world
Outside the United States as well as inside the United States, “pressure on health care budgets continues to constrain reimbursement as well as access for many of our medicines,” Lechleiter said.
2. Competition from other drug companies has stiffened
In recent weeks, Gilead and AbbVie have made headlines by competing for U.S. pharmacy benefits managers’ blessing with high-priced drugs for hepatitis C.
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Lechleiter said he also sees competition stiffening in the market for cancer drugs and the market for diabetes drugs.