Lechleiter: German drug pricing creates 'uncertainty' for Lilly

July 11, 2011

Eli Lilly & Co. CEO John C. Lechleiter said Germany’s overhaul of drug pricing lacked transparency and didn’t include enough input from the pharmaceutical industry.

Following a price freeze and an increase in mandatory rebates, Lechleiter told government officials last week the new policy, which determines the price of a new drug based on benefit, creates “uncertainty” for the company’s business planning, he said.

“We discover and develop medicines because we think that when they get to the market, they’re going to make a difference,” he said. “We often don’t know that until they’ve been used for a while, until physicians and patients begin to experience medicines in the real world.”

Lilly is interested in the animal-health industry and wants to expand this business further, Lechleiter also said in an interview in Frankfurt on Monday. He declined to comment specifically on Pfizer Inc.’s plan to sell or spin off its veterinary business.

“You have to assume that we’re looking at everything in the space,” he said.

The company will consider partnerships in neuroscience, cancer and diabetes research, Lechleiter said.

Lilly still plans to double sales in emerging markets between 2010 and 2015, largely by organic growth, particularly in China, he said. Lilly faces increased generic competition over the next three years that is expected to reduce annual sales by $7 billion between 2010 and 2014, the company said in June.

With “animal health and the emerging markets, where there is a compelling business case, we’re going to continue to be thoughtful and sometimes aggressive as the case may dictate,” Lechleiter said.


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