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Lilly Chairman & CEO Lechleiter Says Innovation Is Vital-But-Missing Plank in Health Reform Debate
Date:5/14/2009

Chamber of Commerce Speech Tackles Policy Issues, from Personalized Medicine to Biosimilars

WASHINGTON, May 14 /PRNewswire-FirstCall/ -- In remarks before the U.S. Chamber of Commerce today, John C. Lechleiter, Ph.D., chairman and CEO of Eli Lilly and Company (NYSE: LLY) said that federal policymakers' attention to access, quality and costs in health reform should also include a focus on innovation - or the results could include "unintended side-effects." Innovation, he said, helped boost the average American's life expectancy from 47 to 78 years, a rise of 66 percent over the past century and "unprecedented in human history." In his keynote speech before a group of business, government and health care representatives, Lechleiter identified specific policy proposals and their implications for patients and for developing breakthrough treatments and cures.

"Encouraging innovation needs to be the purpose of U.S. health care reform, not its victim," Lechleiter said. "It's innovation that explains why we are the healthiest, longest-lived and wealthiest human beings ever to occupy the planet."

But, he asserted, if heath care reform does not encourage innovation, "then the important goals of expanding access, improving quality and controlling costs will prove illusory."

He cited a Columbia University study that analyzed data from 52 countries and showed that, controlling for other factors, the availability of new medicines alone accounted for 40 percent of the increase in life expectancy during the 1980s and 1990s. He said the medical advances of the past century that made life-expectancy and quality-of-life gains possible included the invention of:

  • Antibiotics to cure infections
  • Vaccines that have nearly eradicated several conditions, such as polio
  • Effective treatments for a growing number of cancers, and
  • Medications that have lessened the toll of a number of dreaded diseases, such that they are now considered chronic, manageable conditions.

He then observed, "The economic payback from these gains is difficult to overstate. The payback is years of productive work, economic value added, consumer spending and tax dollars paid - which together outweighs the costs of treatment overwhelmingly - even if you resist the idea of putting a number on the intrinsic value of being alive."

Lechleiter expressed hope for similar future gains, but he pointed to major bellwethers warning that innovation is at risk:

  • The pharmaceutical industry, he said, is "in the midst of a wave of defensive consolidations that will leave the world with even fewer entities capable of taking an idea -- a discovery -- and turning it into a medicine approved for patients."
  • "Half of the smaller biotech firms in the U.S. have less than a year of [operating] cash remaining, and a third are down to their last six months"; and
  • Recent FDA new drug approvals have dropped sharply relative to the past 30 years.

Lechleiter rounded out his speech with a closer look at several areas of public policy under which, depending on the path taken in health reform, innovation will be enhanced or curbed.

Prefacing his policy prescriptions, he said: "When it comes to sustaining innovation, the burden remains on us -- as it should. We're not asking for a handout or a bailout. Instead, businesses that live or die by health care innovation in the U.S. ask only that we be allowed to continue doing just that: proving the value of what we've developed or failing in the marketplace."

He urged all stakeholders engaged in health reform to ensure that:

  • The value of medicines is evaluated by doctors and patients, who, when properly informed, can choose from the available alternatives a drug that's medically appropriate and best for the individual patient;
  • Innovators get a return on investment that accurately reflects the value of the innovations delivered, thus encouraging investment in new treatments and cures for patients; and
  • Innovators retain ownership, for a reasonable period of time, of their intellectual property, to provide the necessary incentives for risk-taking that leads to innovation.

Such an approach to public policy, he contended, would usher in:

  • An era of "personalized medicine," which would tap the insights of the Human Genome Project and replace the usual one-size-fits-all approach;
  • Market-based health reforms, including access to insurance for all Americans, supported by public subsidies and tax credits rather than a government-run option;
  • Solid comparative effectiveness research that informs on the benefits, risks and costs of various treatment options but that does not trump physician judgment, deny patients access to needed treatments or mandate prices;
  • A 14-year data protection period for biologic drugs, which balances the prospect of a return on investment with a clear path to lower-cost copies. The bipartisan "Pathways for Biosimilars Act" in Congress takes this approach.

Lechleiter spoke as part of the Chamber of Commerce's National Chamber Foundation CEO Leadership Series.

About Lilly

Lilly, a leading innovation-driven corporation, is developing a growing portfolio of first-in-class and best-in-class pharmaceutical products by applying the latest research from its own worldwide laboratories and from collaborations with eminent scientific organizations. Headquartered in Indianapolis, Ind., Lilly provides answers - through medicines and information - for some of the world's most urgent medical needs. Additional information about Lilly is available at www.lilly.com.

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