As Congress considers a proposal to allow Medicare to negotiate prescription drug prices, Eli Lilly and Co. (NYSE: LLY) Chief Executive Officer Dave Ricks is warning the move would have a devastating impact on the pharmaceutical industry. “A cut like is being proposed would have about a 40% reduction in our U.S. revenues,” said Ricks, who adds that would mean deep cuts in research and development spending and fewer jobs in Indiana. “There is no way we could just absorb that. We would have to make significant changes to our operations.”

Ricks talked about the potential impact on this weekend’s edition of Inside INdiana Business with Gerry Dick.

In addition to price controls, the bill would impose penalties on pharma companies that raise prices faster than the rate of inflation. It also includes a new ceiling on the amount Medicare patients spend on medicines.

President Joe Biden believes the moves are necessary and would result in lower premiums and co-payments for millions of consumers.

The prescription drug pricing plan is part of a $3.5 million Biden administration spending plan now before Congress.