Thanks for this history. Hopefully, the currrent FTC is aware of it. Unfortunately, the 1986 Matsushita decision came just a few years after the history you recount and the current court no doubt would endorse its false logic.
Merrill, you nailed it again. After decades of price gouging diabetic Americans, there’s no altruism in the Eli Lilly move. Rather, it’s a response to market pressures resulting from the $35/month cap for Medicare beneficiaries, California’s move to manufacture its own insulin, nonprofit Civica’s market entry and billionaire entrepreneur Mark Cuban’s plan to sell low-cost insulin. Fortunately, the circumstances today are different from the Standard Oil days - given the mix of interests involved in fighting high insulin costs (federal and state governments, major health systems, commercial insurers and billionaire entrepreneur Mark Cuban), the likelihood of Lilly pulling off predatory pricing tactics to drive competitors from the market has a far lower probability of success. Nonetheless, we must remain vigilant - Big Pharma will always place profits above patients.
This is really excellent. Eli Lilly has a tradition of duping the public and creating an image of itself as some kind of compassionate saviour in the insulin market. In the late 1970s, when it was preparing to introduce recombinant human insulin at 300% above current prices, it began issuing dire warnings about the security of future supplies of pancreas glands. Two studies, including one by the HEW in 1977, found this was a bogus claim and that future insulin supplies had been underestimated, based in part on data submitted to them by Lilly. While it was warning about shortages, Lilly was being investigated by the FTC on allegations that it violated competition laws in the market for pancreas glands. Three complaints had been filed by U.S. meat packers who alleged that, since 1952, Lilly had conspired with domestic and foreign firms to fix prices and monopolize the market for beef and pork pancreas glands as well as for finished insulin. These actions had resulted in the “creation and maintenance of barriers to competition” within the U.S. In its 1980 decision on the matter, the FTC barred Lilly from conspiring to monopolize the U.S. insulin market and ordered that the firm “license other companies to make use of certain insulin and related inventions that it may acquire or develop in the future.”
I wonder if that FTC decision might be used to challenge the likely scenario that you've laid out?
Thanks for this post, I was really happy to read something that jives with my own research on this scoundrel corporation.
Thanks for this history. Hopefully, the currrent FTC is aware of it. Unfortunately, the 1986 Matsushita decision came just a few years after the history you recount and the current court no doubt would endorse its false logic.
Merrill, you nailed it again. After decades of price gouging diabetic Americans, there’s no altruism in the Eli Lilly move. Rather, it’s a response to market pressures resulting from the $35/month cap for Medicare beneficiaries, California’s move to manufacture its own insulin, nonprofit Civica’s market entry and billionaire entrepreneur Mark Cuban’s plan to sell low-cost insulin. Fortunately, the circumstances today are different from the Standard Oil days - given the mix of interests involved in fighting high insulin costs (federal and state governments, major health systems, commercial insurers and billionaire entrepreneur Mark Cuban), the likelihood of Lilly pulling off predatory pricing tactics to drive competitors from the market has a far lower probability of success. Nonetheless, we must remain vigilant - Big Pharma will always place profits above patients.
This is really excellent. Eli Lilly has a tradition of duping the public and creating an image of itself as some kind of compassionate saviour in the insulin market. In the late 1970s, when it was preparing to introduce recombinant human insulin at 300% above current prices, it began issuing dire warnings about the security of future supplies of pancreas glands. Two studies, including one by the HEW in 1977, found this was a bogus claim and that future insulin supplies had been underestimated, based in part on data submitted to them by Lilly. While it was warning about shortages, Lilly was being investigated by the FTC on allegations that it violated competition laws in the market for pancreas glands. Three complaints had been filed by U.S. meat packers who alleged that, since 1952, Lilly had conspired with domestic and foreign firms to fix prices and monopolize the market for beef and pork pancreas glands as well as for finished insulin. These actions had resulted in the “creation and maintenance of barriers to competition” within the U.S. In its 1980 decision on the matter, the FTC barred Lilly from conspiring to monopolize the U.S. insulin market and ordered that the firm “license other companies to make use of certain insulin and related inventions that it may acquire or develop in the future.”
I wonder if that FTC decision might be used to challenge the likely scenario that you've laid out?
Thanks for this post, I was really happy to read something that jives with my own research on this scoundrel corporation.