Michael Hiltzik: Eli Lilly is slashing insulin prices, but hold your applause
Eli Lilly & Co. played the altruism card like a champ on Mar. 1, when it announced steep price cuts on its insulin products of as much as 70%.
The big drug company said its action was all about helping diabetes patients, its goal being to "help Americans who may have difficulty navigating a complex healthcare system that may keep them from getting affordable insulin."
According to Lilly Chairman and Chief Executive David Ricks, America's healthcare system "still does not provide affordable insulin for everyone, and that needs to change."
Lilly basked in public praise after the announcement. President Biden observed that Lilly's cuts would force its two principal competitors, Novo Nordisk and Sanofi, to follow suit.
If you're inclined to think better of Lilly for taking this dramatic step, here's our advice: Hold your applause.
The truth is that Lilly's price cuts won't cost it a thin dime in profits; it may profits. Wall Street recognized that instantaneously: The price of Lilly shares rose on the day of the announcement and has continued to move higher ever since, gaining nearly 6% through Thursday's trading.
