Maureen Groppe

Star Washington Bureau

WASHINGTON – Three weeks after Donald Trump accused drug companies of getting away with murder on drug prices, Eli Lilly CEO David Ricks came away encouraged from a meeting he and other pharmaceutical executives had Tuesday with the new president.

“I was impressed with the president’s appreciation for what our industry is, which is really a crown jewel of American enterprise,” Ricks said in an earnings call with Wall Street analysts.

“We talked about a number of his policy proposals which, on balance, I think would be very good for us,” he said later in an interview with IndyStar.

Advocates for reducing the price of medicines were less pleased with the meeting.

“The signs of this meeting I would not call encouraging compared to his recent comments,” said Peter Maybarduk, who heads Public Citizen’s access to medicines program.

The week before Trump’s inauguration, he lashed out at drug makers in a news conference.

“Our drug industry has been disastrous,” Trump said. “They supply our drugs, but they don’t make them here, to a large extent. And the other thing we have to do is create new bidding procedures for the drug industry because they’re getting away with murder.”

Tuesday, Trump had a breakfast meeting with industry leaders and promised to cut taxes and reduce regulations for drug companies, including speeding up the approval process for new products.

Rep. Rosa DeLauro, D-Conn., called that a dangerous idea.

“These regulations are in place for a reason,” she said. “When lives are at stake, it is an outrage that President Trump would consider putting the profits of pharmaceutical corporations ahead of safety.”

Trump also said his trade policy would help drug makers by prioritizing that foreign countries “pay their fair share” of the cost of drugs.

Lilly could have faced shorter patent protections for its biological drugs under the Trans Pacific Partnership trade agreement which the Obama administration negotiated and which Trump has rejected.

“Right now, it’s very unfair what other countries are doing to us,” Trump said.

Sen. Bernie Sanders, I-Vermont, who has made reducing drug prices a top priority, said Trump should focus on prices in the U.S.

“The root of this problem is that we are the only major country not to negotiate drug prices with the pharmaceutical industry,” Sanders said in a statement.

Ricks said Tuesday’s discussion did touch on drug prices, but not in great detail.

“I think there will be time for that later,” he said.

Trump, during the campaign, criticized the fact that the 2003 law which created a prescription drug benefit for Medicare prohibits the government from directly negotiating with drug makers for lower prices. Instead, the private insurance companies which offer plans deal directly with drug companies on what medicines will be covered and what they will cost.

“I think that’s a good model for the rest of the health-care system,” Ricks said. “So the last thing we would be for is changing Medicare Part D (the drug benefit program).”

By contrast, the law requires drug makers to rebate medicines the government buys for Medicaid, the jointly-run federal and state health-care program for the poor.

Trump briefly addressed Medicare and Medicaid in comments at the start of the meeting while reporters were allowed in the room.

“We have to get the prices way down,” he said.

White House spokesman Sean Spicer later told reporters Tuesday that Trump will be able to get lower drug prices because the industry understands the president will create a climate that supports American manufacturing – and because Trump is a businessman.

“He knows how to negotiate,” Spicer said.

He also said Trump understands “the bureaucracy that’s holding back some of the negotiating that’s allowing these prescription drug prices to drop or get the best deal for the government,” but he did not elaborate on how that would change.

Maybarduk, with Public Citizen, called Trump’s comments difficult to parse. And he said Trump could immediately get tough on drug companies if he wanted, such as increasing competition from generic drugs.

“The key is to be tougher on the companies, which benefit from a great many government-granted monopoly powers, tax credits and research dollars – all gifts from the American people,” he said.

Ricks said the government already pays low prices for Medicare and Medicaid drugs. The bigger issue, he said, is many patients with insurance still can’t afford prescriptions because of high deductibles or co-payments. That’s something that should be addressed when Congress replaces the Affordable Care Act, he said.

“A lot of the frustration with drug pricing, to our eyes, is not so much about the fact that drugs are expensive. That’s not really new,” he said. “What is new is that the insurance products that were offered in the ACA program, and even from some employers, put a very significant out-of-pocket payment burden on patients to pay for chronic medications. And we just think that’s wrong.”

Lilly stock rose $2.33 to $77.03 Tuesday, the same day the company also reported higher fourth-quarter profits due to sales of diabetes treatments.

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Contact Maureen Groppe at mgroppe@gannett.com. Follow her on Twitter: @mgroppe.

Eli Lilly CEO David Ricks spoke with IndyStar Tuesday about the meeting he and other pharmaceutical executives had with President Trump and Vice President Pence. Here is a transcript of the interview, edited for length and clarity.

Q: Did President Trump appear to have a different attitude toward the pharmaceutical industry than when he accused the industry, in a January news conference, of “getting away with murder.”

Ricks: It was a positive meeting on a broad range of topics.

The president expressed, going into the meeting, a good understanding of what we do in terms of creating innovative medicines for serious conditions, and also the industry’s footprints on jobs, employment and impact economically…Those two things were important and not widely appreciated going into the meeting.

And then we talked about a number of his policy proposals which, on balance, I think would be very good for us. Looking at regulatory reform at the FDA, the changes that are being contemplated on repealing and replacing the Affordable Care Act, and taxation – which has a big impact on our manufacturing footprint.

All those things were good. It was an exchange of views and educational for both sides.

Q. Do you expect to have to give up anything in exchange for what the president is offering on reducing regulations and cutting taxes? Would you accept lower profits on Medicare drugs, for example?

We talked a little bit about pricing. Here the industry was able to share our views on the topic in a private meeting. I don’t think he’d spent time with that.

In terms of repealing the Affordable Care Act and then what happens next, there were a number of things the industry conceded to back in 2010 to make the ACA happen. Across all of PhRMA, we estimated $100 billion over 10 years in taxes and fees, which we’ve been paying now for the last 6 years. So if they repeal, presumably that stuff goes away. I don’t think anyone in the industry, myself included, would think that whatever is replaced, that there’s just a free ride on that. There certainly will be new ideas on pay-fors.

The goal we have, this time around, is to perhaps make sure whatever concessions we do make end up impacting consumers. A lot of the frustration with drug pricing, to our eyes, is not so much about the fact that drugs are expensive. They’ve been expensive for a long time. That’s not really new.

What is new is that the insurance products that were offered in the ACA program, and even from some employers, put a very significant out-of-pocket payment burden on patients to pay for chronic medications, and we just think that’s wrong. When people buy insurance, I think they think they’re going to get a break on their health care costs. But when they have to pay full price, which a lot of these high deductible plans, and the ACA silver plans, require, I think they get frustrated. We have a lot of limitations, regulatory limitations, to help patients directly who are in those plans.

Whatever comes out the other side, I’m not personally thinking that there won’t be any sort of compromises. I’m sure there will be. But we want a system that works, that gives access, but also affordability.

Q. Trump said at the start of the meeting that “for Medicare, for Medicaid, we have to get the prices way down.” How should that happen?

Ricks: I interpret that as the cost that consumers are paying. I would agree with that statement, particularly for Medicaid and some programs under the ACA. In Medicare, affordability is pretty good for patients who have the so-called Part D insurance coverage. And so is choice. I think that lends a model to us for the future, which is that, in Part D, the government decided to contract with a number of large carriers and every year they bid pricing. Those carriers then make deals with drug companies and have very significant price concessions, which we make to allow them to build a formulary that’s both affordable and has choice.

I think that’s a good model for the rest of the health care system. So the last thing we would be for is changing Medicare Part D.

There are other parts to Medicare, like hospital-administered drugs and physician services and so forth, which haven’t been looked at in a long time.

Medicaid is the lowest pricing we have in the United States. And the second lowest is probably Medicare. Although there may be a desire to get more costs out of the system right now, those two federal programs have some of our lowest pricing available.

I think the bigger issue is what do patients have to pay out of their pocket to get access to a medication their doctor says they need. This idea that high co-payments and high deductibles somehow is good for the health care system, when it comes to chronic medication, that’s a big problem, we think. All it does is discourage people from taking medicine.

Q. You may have an advantage because Vice President Pence is from Indiana. Have you been talking to him?

Ricks: Of course Vice President Pence knows Lilly really well and we know him. Indiana is our home and we’re the largest private employer in the state. Over the last four years (when Pence was governor) he got to know us well.

I think he appreciates the risk we take in innovation as well as the importance of getting the U.S. health care system right.

He was in the meetings and clearly he is taking a lot of responsibility on the legislative agenda for the Trump administration and therefore, because most of these changes are legislative, I assume he’ll be very involved.