Eli Lilly CEO John Lechleiter waded into the debate over a public health-insurance plan, saying today that such an option would create a "slippery slope" toward a day when all or most Americans would have government coverage.

Leichleiter argued, much as the health-insurance industry has, that a public plan would have a huge advantage over private insurers, which don't have the "resources of the Treasury or the power of law to set reimbursement rates." In a speech before the U.S. Chamber of Commerce (see his prepared remarks), he also said many employers would stop covering their workforces and send them to the public plan.

So what does this have to do with pharmaceuticals? Leichleiter argued that the negative outcomes with a public plan would stifle innovation in the drug industry, because the government monopoly would reduce the number of choices that patients have. And without people making choices, drug makers wouldn't have the ability to gauge the real value of their products.

"We need to be able to put our innovations to the test among doctors and patients," he said. "This means that doctors and patients need to keep the ability to choose, in an informed way, from all of the available alternatives." (Private health insurers, of course, also steer patients toward one drug or the other by giving them different co-pays.)

He also argued against government negotiating with the drug industry on prices in the Medicare drug benefit -- a fear that drug makers likely have about a public plan as well. "Market based pricing," he said, allows the drug industry to get a "real-world assessment of the value we're delivering." Advocates of government negotiation on prices believe that the government could wring lower prices out of the drug industry than insurers could. For more of Leichleiter's counterarguments, see his op-ed piece in this morning's WSJ.