Biotech and Pharma

Eli Lilly CEO: We're not jacking up our drug costs for profit

Eli Lilly CEO: Looking for 'market based solutions' on drug costs

Eli Lilly's growth is not fueled by increasing drug costs, CEO David Ricks told CNBC on Wednesday, a day after he and other Big Pharma leaders met with President Donald Trump at the White House.

Appearing on "Squawk Box," Ricks defended Lilly against charges that drugmakers actively try to inflate costs for profit, using the firm's earnings, released on Tuesday, to support his position.

"Price played a 1 percent role in pharmaceutical growth that was 9 percent," said Ricks, who became CEO last month. "Pricing gets a lot of press, but it's actually not playing a key role in our return to growth."

"We're trying to drive volume with new therapies," he said.

Trump told the drugmakers he wants to make it easier for pharmaceutical companies to win regulatory approval for their products. As he's done with other industry leaders, he also called on the CEOs to bring manufacturing back to America.

Ricks said that would work only if U.S. corporate tax rates come closer to parity with the rest of the world, which is something Trump and Republicans on Capitol Hill want to do.

"The U.S. tax rates are not competitive with the rest of the globe. So getting those in line, or perhaps even better, would be ... an advantage for looking at sites in the U.S. going forward," he said.

Ricks called the Trump meeting "positive" — citing advantages already in place that make the industry attractive to a pro-U.S., pro-business president, such as largely U.S.-based research and development.

On the topic of lowering drug prices, Ricks said Medicare Part D prescription drug coverage for seniors should be a model.

Under Part D, the responsibility to negotiate for lower costs falls on major insurance providers, who work with drug companies to push prices down.

"They are fiercely interested in negotiating down drug prices, but also concerned about keeping customers and having choice," he said. "We think that balance is just about right, and that that piece of government legislation ... is really the model going forward."