Biotech and Pharma

Eli Lilly raised prices on 9 drugs last week

Key Points

The increases, taken on May 2, were for drugs including:

  • Effient (9.9 percent)
  • Taltz (6.9 percent)
  • Humalog and Humulin (7.8 percent).
Boxes of Eli Lilly & Co. Humalog medication sit on a pharmacy shelf in Provo, Utah.
George Frey | Bloomberg | Getty Images

Indianapolis drug giant Eli Lilly raised list prices of nine of its medicines last week between 6 and 10 percent, according to data obtained by CNBC.

The increases, taken on May 2, were for drugs including the blood thinner Effient (9.9 percent), the psoriasis drug Taltz (6.9 percent) and the insulins Humalog and Humulin (7.8 percent).

The increases fit a pattern at Lilly and many other drugmakers of single-digit percentage hikes once or twice a year, despite political pressure and intense scrutiny of the practices. Lilly has come under fire for the price of its insulin drugs in particular, leading Senator Bernie Sanders to call for a federal investigation into collusion. Lilly and other insulin makers have denied any such activity.

Lilly confirmed the price increases in an emailed statement to CNBC, and noted the list prices "do not reflect the significant discounts and rebates that we provide to ensure patients have adequate access to our medicines."

"The net price increase that Lilly recognizes is significantly less," spokesman Mark Taylor wrote. "In fact, in 2016, the average discount to list price on our U.S. portfolio rose to 50 percent and net prices rose just 2.4 percent in the U.S."

Rebates on list prices of medicines are negotiated by pharmacy benefits managers. Drugmakers argue few patients are exposed to the list prices of medicines because of these discounts and rebates.

Eli Lilly’s price increases

Drug 2014 2015 2016 2017 (so far)
Humulin N20.81%16.96%7.48%7.83%
Trulicity 17.71%8.91%7.99%
Taltz  8.90%6.90%

Source: Source: Bernstein Research/Price RX (Medispan)

One of the largest pharmacy benefits managers, Express Scripts, announced this week a program to offer lower drug prices to patients without health insurance or who have high-deductible plans that make out-of-pocket costs for medicines untenable.

Lilly's chief executive, Dave Ricks, appeared on CBS This Morning with Express Scripts Chief Tim Wentworth to praise the program, called Inside Rx.

"We wake up every day trying to invent new medicines and get them to people who are sick," Ricks said. "This initiative… is one way people with high-deductible plans or pay cash can pay a price similar to what big insurance companies get."

Lilly's product Humalog is included in the program, Ricks said. Outside of programs like this one, patients without insurance generally don't get access to the rebated prices negotiated by pharmacy benefits managers.

"When people go to the pharmacy counter and have that sticker shock, often they do walk away," Ricks said. "This, maybe, can bridge some people to fill their prescription, control their diabetes a little better. I think everyone's better off in that system."

Lilly took list price increases on those medicines of between 18 and 24 percent in 2014, 17 and 32 percent in 2015, and 7.5 and 21 percent in 2016, according to analysts at Bernstein Research, who confirmed the recent 2017 increases as well.

When pricing its products, Lilly takes into account "the value they bring to patients and the healthcare system, as well as current marketplace conditions and the need to fund the development of the next generation of innovative medicines," Taylor said.

Amid heightened political scrutiny of drug prices, many manufacturers have pledged to curb increases. Allergan said it plans to keep price increases to less than 10 percent a year, sticking to 9.5 percent for a number of its drugs in 2017.

And this week, French drugmaker Sanofi pledged to keep drug price increases in the U.S. no higher than a measure of health-care inflation, this year expected to be 5.4 percent.

The pledges come as President Donald Trump has maintained a focus on the issue, saying the pharmaceutical industry is "getting away with murder" when it comes to its prices.