Dave Ricks, CEO of pharmaceutical giant Eli Lilly and Co. (NYSE:LLY), delivered a scathing critique of pharmacy benefit managers (PBMs), accusing the industry’s “middle actors” of “rent taking” and creating a “terrible incentive” structure that caused insulin list prices to skyrocket.

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PBMs Kept Inflating Prices Despite LLY’s Low Net Price

Speaking on the “Cheeky Pint” podcast, Ricks explained how list prices for Lilly’s insulin ballooned to $275, even as the company's actual net price remained around $40.

He blamed a system where PBMs profit from the “spread” between a high list price and a low net price, rewarding manufacturers for inflating the sticker price.

“We kept raising the list price and modestly lowering our net price,” Ricks said, describing how the market evolved. “After 10 years, you had this huge bubble… and who was paying? The person who walked in the pharmacy with no insurance. That’s outrageous. That should not exist.”

Ricks Recounts PBM Backlash To Lower Insulin Prices

Ricks revealed that when Lilly tried to fix this by launching its own low-priced “shadow generic” insulin, PBMs and pharmacies pushed back. “They called me and said, ‘Why’d you do this?’… ‘This is a threat to our model.'”

This frustration, Ricks said, directly led to the creation of