That focuses on pharmaceutical some laws and regulations and clinical all caps. Where the largest independent academic groups in the country. Its my pleasure to be here and i want to thank the American University putting together a great program. On the other sponsors which has been a fantastic conversation. We spent time talking about the future of healthcare policymaking in our lunch session will be focused on a particular area, pharmaceutical prescription drugs are the most costeffective interventions we have a medicine. Industry plays Important Role in bringing the products forward. In recent years prices have begun to rise which is made breakthroughs unaffordable for patients leading directly to bad consequences when patients are unable to afford their medication. It also makes up about 20 of healthcare spending overall. Fortunate to have one of the key players. To establish this current pharmaceutical marketplace and representative henry waxman who served in the house for 40 yea years, overseen a number of important legislation, also the orphan drug act, the medicare modernization act, fda amendments act and other pieces of legislation that helped establish the environment today. Currently serves as chairman and advisor at john hopkins university, Bloomberg School of public health. Hoping to talk to us about his reputation as an accomplished legislator, particularly as they relate to pharmaceutical markets. So bring them up in the market down to some discussion and then hopefully have time for audience q a. Thank you. [applause] im delighted to be here today. Ive looked over the schedule for the conference looks like a fantastic conference. I know see spend his family, perhaps a king get a copy of cspans record of what has been said for the last in half. I think a year for hosting the conference and i think aaron for joining me to join you today to talk about prescription drugs. I was in the house of representatives for 40 years. In the 1980s were focusing on the pharmaceutical issues of the time. The issues were looking at was that we need more of an incentive for the development of new trucks. We needed a new incentive for drugs to be manufactured for the population and also address the problems with people with rare diseases. In 1983 will pass the law called the orphan drug act. There, contracts because the number of people that were affected by disease were small in number and it often was in the interest of the manufacture to develop this that was. About. We tackle that problem, particularly for giving an incentive for developing drugs for diseases that do not look like they would be profitable because so few people would use the drugs. We adopted the orphan drug act which gave incentives to the tax system and incentives as well and exclusivity time of seven years. The next year looked at the problem of incentives for development of new trucks in the pharmaceutical industry complained they had last time whether drug applications were being reviewed and only within the last decade before they had to come up with not just proof of safety, better proof of efficacy which required many trials to accomplish and of course the drug cannot be marketed until the approval was accomplished and finalized. They said they are to have more time for the time lost at the da. On the other hand, generic drugs were small in number because generic manufacturers who make of the same drug is the brandname drug had to go through the test to show was the same drug in terms of effectiveness and safety. They had to go through the whole procedure. So we adopted balancing these generic drugs by saying they could have an abbreviated but they just had to show that it was the same drug on the market that have been established as safe and effective for approvals. Without we got a balance. They could develop new drugs and competition to lower the price of drugs on the market for the consumers. Well, that is completely out of whack. It has been affected by a lot of changes since the 1980s, insurance now pays for pharmaceuticals, there have been breakthrough pharmaceuticals are grateful for that, but the drugs are highpriced when the first being rolled out and theres no competition permitted when the but on the market for a while but the prices go up and theres no reason to explain prices going up except that the manufacturer has either a patent or exclusivity which means no competition. Using drug prices are rising faster than wages in the last several years drug costs are an increasing problem for people to pay for their drugs even if making copays and by the way since the 1980s had Insurance Coverage for drugs which has helped increase prices for these drugs so as we look at the everincreasing frustrating problem the first thing i want to point out it was no Silver Bullet to the issue. There are people who seem to claim theres a Silver Bullet. I have to do is negotiate prices. What you negotiate with the Patent Holder who has a monopoly, your negotiations wont go far because you cannot substitute an alternative drug. Other problems, negotiating prices for drugs is no magic solution. Some say that we need to do is import drugs, after all, the manufacturing drugs, exporting to canada or europe and at in those places. Its just import those drugs and will get prices being paid for those countries. Importing drugs work in a narrow way but its not an answer. By importing drugs we can assess drug manufacturers to manufacture drugs abuse in canada or europe and supply the United States. So what we have done, we have a team, broker used to be deputy secretary of hhs and Christie Martin worked on Health Reform and sophia worked at hhs as well, i tried to figure out his or something we could do to approach this issue incremental way to the bipartisan support legislation. It would be required to get the legislation passed. By the way, none of these bills will passed bipartisan basis. Most ofs associated with were not taxed on a partisan basis. Whether it was there from drug act or expansions of medicaid, dealing with medicare or the ryan white act, or any of the other laws, they were bipartisan. The truth is, we do better when bills are bipartisan. I thought i was wellinformed when we introduced a bill that when you hear the comments of those critiquing it you hear more about your legislation to make a much better product. I wish some of the laws were having difficulty dealing with them especially the Affordable Care act has been bipartisan. Is the only lie had a role in drafting, based on a political decision that republicans didnt want to participate. They did not want to be part of it. President obama had proposed so they were against the stimulus bill in the regulation of wall street and trying to do something they didnt want to deal with the Affordable Care act, even though the Affordable Care act is based on principles the republicans who had supported it especially alternatives to what president clinton was trying to do with pharmaceutical pricing. Theres no Silver Bullet. Even in a divided Congress Progress can be made. We have to start with a discussion about the drivers of healthcare costs. Look at the drivers and see what members will take on. You can start making some progress by addressing issues. We looked at the following kinds of drivers of healthcare. High launch prices, what could be done about it. Some of the possible approaches for some manufacturers create or take advantage of natural monopolies who drives them to significantly increase prices. They eliminated opportunity for competition they didnt have anybody competing against sometimes it was a natural monopoly and sometimes it was contrived. The lack of robust Competition Among manufacturers and that results in higher prices. There was a problem for the fact that when we adopted the law dealing with this is part of the Affordable Care act we gave a long time i think 12 years, it was so long in comparison to what we had done. It makes it difficult from the start. But there is a possibility of competition but we need fta to take action and establish a pathway for the bio generics to be approved. The pharmaceutical Distribution System is difficult to analyze because it doesnt make essential Information Available to the patients. The providers are the care where decisions are being made. We have a lack of information about effectiveness with jokes at this time. Federal law limits that the states can do to negotiate prices for medicaid, we might want to look at some things the states can do in some things the states are doing on their own. The state of california had a transparency of the, i think thats all to the good and we could have more state experimentation if we permitted it. And the drug formulas. Other things we can do shortterm and longterm, our approach is to talk with key senators and members and get them to Start Talking with each other. If we can get members across the aisle to talk we can get them to Start Talking about things they can agree on. Thats been a problem now and for some years. Even in the most difficult times we are able to get things done just by working on a problem. May not have been the biggest problem though weve gotten bills through them for a long time the only ones that got through in the last eight years or so were bills that were bipartisan. Now they think they can pass it on a partisan basis. Theyre finding out what we knew at the time, it aint easy. Available to have a conversation. Thank you very much. [applause] lets start with since the passage of the act the sword and made up about 20 when you pass the bill. Today they make up 88 or 90 . The gao is estimated the availability of generic drugs has staye saved 1 trillion ovee last ten years. The success you envision when he created it. We really didnt have a model to know what term vision for the future. The hatch act is an enormous the orphan drug act has been very successful. They just want to be bothered, no profit potential of the generic drug market we had competition allows for the good that we never expected it to be as great of a success as it has been. 1 trillion, very few members can say what they did to help save a trillion dollars. Will we noticed also the brandname that manufactures if we paid in the socalled secondary pad like the quote you to come that goes with the fda that they engaged in with factors. Refusing to supply samples if you nee were rewriting the act y would you do anything differently . The brandname company would try to discourage people from buying generics. Thats always been the case. The talk about generics not been the same are as good as the brandname drugs are Public Relations campaign from the very beginning, but i think the public has come to accept the idea and you can get a generic and a better price. The manufactures have look for different ways to keep up competition. We envision generic drug to compete and give generic job manufacturer to an effect come out and have the pen because it was no longer valid we said will give it a 30 month stay. That was to encourage them to stand up and do the work and get approved. Be reworded. Then if you get a delay, reduction of a generic not only plucking the generic your pain money not to compete but youre delaying the other generics that were lined up would also like to get on the market. I think you have to look at all the issues carefully and see what they can do to address the issues. Theres some things that are on the agenda with bipartisan support and i would Hope Congress would move forward. Senator grassley has introduced that on a bipartisan basis and to find out whats in the brandname drug, theres a bill to stop the delay. Even this sip cream court has narrowed it greatly. If theres a dispute that they want to stop fighting legally in all the suits and countersuits, but the court said it should be looked at very much and some were just outlawed. So some things are being considered to another things need to be looked at very carefully to see if we have a consensus. Theres no magic bullet, but if you start addressing some of the problems and start narrowing the difficulties. So talking about the generic markets you mentioned a couple of examples about drugs that have increased in price. And i also want to add concerns about consolidation. Refer to bouts shortages that have to do with the tragedy in puerto rico these episodes reveal maybe the generic market is in a stable as we might hope. How might we update the act to address these concerns . Well, the world has changed in this area. At one time you had a name, drug manufacturers on one side and generic drug manufacturers on the inside theres a lot of hostility. Now you have brandname truck manufacturers and also generic, theres a crossover and sometimes they have their own conflicts but they rise above i say if they have the monopoly they can continuing and they can compete which is not just the fact that they represent both sides of the industry. I think we need to look at the problem and see what congress can agree to do in those aspects of the generic market, there were some good suggestions that came out of senator collins aging committee. The stop the outsourcing of drugs. The monopoly there. Theres ways we can ask the fda to do more i think theyve held out some suggestions of what they can do to have a more robust generic drug industry by getting the drugs approved more quickly, trying to see if theres a solesource manufacture we can get a competitor, or at least know in advance if theres going to be a situation around the corner. I think importing drugs in a narrow issue would help. Could be on a list of things that might be done. I think we need to look at it break it down and get some things that the fda could do one thing the fta needs to do this to look at the weight generic drugs to be approved they have been approved they have other issues related to the such as the questions are when they they have the Legal Authority to do that. The fda needs to figure out difficult criteria so we can get trucks that will be substitutable. The big game that we had in lower prices from generic drugs said they were the same drug, there was immediate competition especially when theres a substitutable generic. Most states allow the substitution of the generic drug for brandname truck, but right now we have the brandname Companies Going to the states making it more difficult for the states to allow what the criteria and how to substitute generic biologic. We have to overcome the. I want to get back to the orphan drug act, thats a long list of things that we can do i think it points to the fact that its gonna take interventions from people at every level, it states legislators, regulators and physicians themselves. Do think theres a better or worse environment in which to have those kind of bunch of rare diseases, so is it still relevant in this current context or are there ways we can then provimprove it to address e Current Issues . It is still relevant to many drugs that are not even profitable but people that but otherwise had no hope before and the manufacturers are working on these drugs and which were not originally profitable but now are profitable because of Insurance Coverage and they can get Insurance Coverage for the drug and lower the price people have to pay out of pocket. Its become a profitable business but the most successful highly marketed drug would be a humira and that shows the creativity of the industry using all of the leverage that was possible. When you see Something Like that, you have to start peeling the onion skin off. How did they get to that kind of situation and what can we do to put it back in perspective . There are patent and exclusivity is. They run off of it together at the same time. Some things extend that patent or monopoly period and a lot of efforts are used to try to keep it going. So we have to decide on the things that allow the exclusivity is that are still valid today and what changes do we want to do in this era that could still continue the purpose for which the wall was adopted. We dont want to use the baby out with the bathwater. It would hold down the price of the drugs in th and the evergren enough drugs sequential monopoly on top of another but it is under specific circumstances. But sometimes they are originally approved so these are the kind of things we want the congress to look at our members of the house and senate that are reviewing them and we want to push him to go forward. Lots of congress when we pass new laws we call them modernization. We need a modernized drug for sure. To offer the opportunit oppof anybody would like to ask a question, the microphone is right there. Begin to make your way up and meanwhile, i can fill the time by bringing back the question of talking about some of these things we have seen in the last year a number of things stepped in and they passed the price gouging statute with patent drugs and california recently tried to ban drug coupons when there are generic available in the companies are not pushing patients to use the brandnew drugs. Do you see that these efforts will have a great effort or do we need an intervention of some sort . A lot of federal interactio interventions and the states can try things out. I am not sure of this conclusion, that the states can do more in their Medicaid Programs but the pharmaceutical benefit if we let him try. They can to try and we would provide discounts for the drugs under the medicaid program, but they have to take the whole form to choose some drugs and not others, which would mean some leverage in the negotiations. We could try some experiments. I think some of the things people think are the answers we could try. We dont have to tune the whole National System around. We could try certain things out. For example, medicare could try certain things out on the project and see what works and what doesnt. The state law helped and i know many cases where the law was different enough that it had a e a push from National Intervention but i see a lot of places people push for preemption so they dont have to deal with Different Things at the state level that might have been worthwhile. I am the project manager at Georgetown Medical center and a student. I want to know what your thoughts are under the recent controversy for the patent rights to avoid the review patent and senator mccaskill legislation to stop it from happening in the future. That was a very creative way to try to hold on to be exclusivity and the monopoly and i thought it was a little too clever and it drew attention to that attempt that may lead or should lead to some collective legislation. I dont have a look at senator mccaskills bill but i know that shes very smart and a dedicated member of the senate and tries to stop abuses in the marketplace. It isnt a foreign country, it is dressed to keep the company with that monopoly and what we need is more often competition, more competition and less monopoly. My question is actually related to the last question on november 27 the Supreme Court will hear a case referred to in short form as oil states in which the existence of patent trial in the board is being challenged this is within the u. S. Pto that allows Generic Drug Companies to challenge integrity and patterns of brandname phone companies. If this board is found to be unconstitutionally developed and is basically overturned, it will eliminate the pathway for Generic Companies to challenge brandname patents and probably will reduce the efficiency with which the Generic Companies can get to the market. So, i wonder if either of you are following the case and if you have any comments. Im aware of it. I would also add one of the nice things about the appeals board is that it is allowed to challenge and any party to bring the challenge and in the news in the last few days decide there was a Consumer Group that would bring the challenge against some of the patterns. They would require the new products to earn patterns so i think this issue that is not sufficiently being used to allow them to often finds extend the Market Exclusivity for some of the basic boundaries that you held up is a big problem and the path and try no and appeals board is an avenue to try to challenge those in an efficient way without having to rely on an extended and expensive litigation. So i do think that it is an important one coming up and it is another avenue we can use as you talk about. This is one effective strategy and will be interesting to find out what the Supreme Court shares about it and whether or not the challenge has any merit. Im really interested in what you think the appropriate strategies are for how to make the market looks more like the generic market. I know that there are key fundamental differences between the generic drugs but how do we achieve some of the success that we have had in this market and try to also account for a lot of those differences . I mentioned a few already. They need to establish when the generic is substitutable and they also need a clear path for approval for a generic biological drug and the authority to do that. We need the fda to be much more involved and insofar as we dont get clear substitutable generics, we need more that can compete with each other and in fact, i think that is one of the ways we have seen the price drop for dealing with the hepatitis epidemic that we didnt get a generic, but we got a competing drug. So i think we need to look at this area very carefully. Maybe the fda can be the leader in helping us in this area. I would also second event and add that i follow up they are being used the last decade and i think that we need to be concerned about the safety of these products and that there are mechanisms we can use to try to get the products out and be able to use them and follow them and make sure that we are adequately addressing the issue but now that they have Something Like seven or eight, we have one or two out of the market because of the litigation over other issues that have prevented the products from being approved and i dont know if we want to call it a paper due a settlement or a similar manufacturer that they are not going to market in the u. S. Until 2023 even though they will be able to market, so therethiskind of agreement are problematic and we are not able to get the same reductions for some of the very older that theyve been able to see in europe. One of the presentations i made to a couple of senators, they said if there is computation that is th the way o set the price. Let the market work. If there is a monopoly then you have to regulate it. Well, we are in the unusual situation with pharmaceuticals and there is no easy answer because we have to get competition. That is the first goal. But weve got to do something when the public is put in a position where lifesaving drugs are unaffordable and we have new miracles. Are they on the market with more coming . I think we need to think hard about how are we going to be as a country, do we have lifesaving drugs that just are not available to other peoples lives that ought to be saved, that deals with the price of the drug and how we can make sure. Can you imagine today if we had a vaccine for polio and just said not everybody can get it if you dont afford it . Others assured that did not happen. Wwe had some publichealth urgencies going on in the hepatitis situation and there is a particular section of a law to require there be a lower price for it. But it goes to the bigger problem we once knew lifesaving drugs. We want new breakthroughs, but we want lives to be saved because they are also affordable. I think that is a really powerful statement and we will be able to do one more question. I want to also jumped in and talk about the conduct of the market and bring it back to the physicians and patients as well because it has been commented before that its hard to imagine a market in a situation where the people who are making the decisions are not paying for the product, and the people paying for the product are not the ones making the decision and that makes for an inefficient market. Are there things that you think physicians and patients can do in this area . This is a problem in health care and it distorts the new parties who are performing the service and the fact that there is extra value we get out of medicine. And we need to know that whether it is being prescribed. And especially the patients need to know if they are getting something that is going to help what they already have available to them. I was very disappointed that the wall that was adopted as a part of the Affordable Care act just didnt produce what we hoped it would, so there are reasons there are provisions put in at the behest of pharma even though others could get the informati information. Up for renewal so cross our fingers things will change. Last question. I work in the intellectual Property Program and i would like to give you a moment to speak about nafta. Theres there is a trade negotin going right now. They propose a quite aggressive chapter including a bout of higher protections with pharmaceutical companies existed and its being negotiated so nobody knows what is going on. I wonder if you would comment either on the process of negotiation with the above should be in the negotiation. No pun intended left me disgusted generically. [laughter] i dont know what the issue is on the nafta negotiation but when there is a treaty, the questions, and there were attempts by the manufacturers of drugs to tell other countries coming in developing countries that they couldnt sell a generic unless they followed the act timetable of course we never envisioned, but we certainly didnt envision developing country producing the brandname drug and having it on the market, where nobody could afford it and then say after that pure coke they could get a generic approved it in the United States was already on the market. And argued with the trade representatives on all of these negotiations and got an unattainable position. Its wrong because it hurts the ability of poor people in the developing countries to get the drugs they need and can afford. They cant afford the brand in the market for the most part because of the price of the brand drugs that we need to get to the generics out as quick as possible. Generically, i ensure that its related to that very question. Thank you very much. [applause] the senator from virginia. I rise to speak on a topic the floor. We have been at war since september 14, 2001 when Congress Passed an authorization military force to go after the perpetrators of the attack. 16 years, one month and 18 days ago as of today. The longest Armed Conflict in history and it shows no signs even after the death of osama bin laden. The conflict has been going on foro