As the Trump administration seeks to align U.S. drug prices with lower reference costs in places like Europe, Eli Lilly’s CEO has cautioned that deeper flaws in the American healthcare system, which “isn’t built to function for patients,” could complicate an otherwise commendable goal.
“We support the administration’s position that medical research costs need to be shared more equitably across developed countries,” Lilly chief David Ricks said on the company’s second-quarter earnings call Thursday. “It’s also true that the U.S. pharmaceutical market has significant defects, which shift costs to consumers and increase red tape.”
But those attributes require their own dedicated reform efforts and, in turn, “make apples-to-apples comparisons of ex-factory pricing inaccurate and misleading,” Ricks argued.
The issue of U.S. drug costs and international reference pricing has again entered the spotlight after President Donald Trump last week sent letters to 17 global pharmaceutical companies—including Eli Lilly—laying out steps they must take to implement so-called Most Favored Nation (MFN) drug pricing in the U.S.
In essence, MFN pricing seeks to match the costs of certain prescription drugs in the U.S. to the lowest price offered in a group of other developed nations. Trump tried and failed to get the policy off the ground during his first term but has since made a concerted effort to reintroduce the price reform strategy in his second.
Broadly speaking, Lilly believes in rebalancing pricing between the U.S. and Europe to compensate for innovative drugmakers’ R&D expenditures and risks, Ricks said Thursday.
“That’s a rational thing, and in my career, it’s gotten more and more out of whack,” he said, noting that he believes Trump is “right to call that out.”
European countries aren’t simply going to line up to pay higher prices on medicines, however, so trade tools will be necessary to “rebalance the equation,” Ricks said.
Meanwhile, simply transferring prices from places like Europe into the U.S. fails to account for the complex landscape that is the U.S. healthcare system, the Lilly executive pointed out.
“Negotiated prices in Europe come with broad access, low patient copays and without administrative hurdles like prior authorizations,” Ricks explained. “There are also no intermediaries that distort prices, and hospitals do not seek profits by selling medicines and marking them up.”
He continued: “If we import foreign price controls and insert them into a U.S. system that isn’t built to function for patients, we risk embracing the worst of two worlds: the low productivity and output of Europe’s biopharma sector with the high out-of-pocket and distorted prices of the U.S. insurance market.”
“Both today’s patients and the future of new cures and treatments will suffer, along with the United States’ competitiveness,” Ricks warned.
Ricks did stress that Lilly is working cooperatively with the administration to help find a drug pricing solution in the U.S.
He also flagged efforts Lilly has already taken to improve the cost burden of its medicines for American patients, pointing to the launch of the company’s direct-to-consumer web pharmacy for cash-paying patients, LillyDirect, and the reduction in insulin prices the company implemented in 2023.
Lilly will continue to offer special pricing for cash-paying customers “as long as we have such a large hole in coverage in our country for important chronic diseases like obesity that should be covered,” Ricks said.
Ricks’ comments came as Lilly reported another strong sales quarter, buoyed by the ongoing success of its dual GIP/GLP-1 asset tirzepatide, which is approved in diabetes and obesity as Mounjaro and Zepbound, respectively.
In 2025’s second quarter, the Indianapolis drugmaker’s total revenue grew 38% year over year to $15.56 billion. Mounjaro drew roughly $5.1 billion for the period, representing 68% growth over 2024, while Zepbound grew sales a staggering 172% to around $3.4 billion in Q2.
Lilly has been chasing—and gaining on—its chief metabolic medicine rival Novo Nordisk and its counterpart GLP-1s Ozempic and Wegovy for some time now. In 2025’s second quarter, Mounjaro assumed the market lead in the U.S. for type 2 diabetes incretin prescriptions, CFO Lucas Montarce said on Lilly’s earnings call.
Zepbound has already secured a leading position in the branded U.S. obesity market, where roughly two-thirds of patients are prescribed Lilly’s drug, Montarce added.
Thanks to that ongoing sales momentum, Lilly has boosted its revenue guidance for the year. The company now expects to deliver 2025 sales between $60 billion and $62 billion, up from a previous range of $58 billion to $61 billion.
Still, despite the rosy sales numbers, Lilly’s stock was trading down more than 14% around midday Thursday.
The decline is likely due to new data on the company’s oral GLP-1 candidate for obesity, orforglipron, which dropped shortly before Lilly’s earnings call. Despite the trial meeting its primary endpoint and teeing up global regulatory filings for the asset, the efficacy results appeared to underwhelm investors.