Education labor, this is how to know thank you all very much. We have three knowledgeable guests on prescription drugs and pricing, the director to the public assistance and advocating for Strong Public Health and around the world. Members of the committee, thank you. Public citizens a Public Citizen organization, 500,000 numbers for the years advocated with success. Drug prices are high because of monopoly power leading to rationing of treatment and traffic suffering. Diabetes drugs i cant afford it with social security. Theyre trying to before, why do we have to pay so much . We are on social security, does anyone care . What you . I ration so i can eat and pay rent. Affordable drugs compiled 34000 such stories for people struggling to afford and thats a tiny fraction, a sample of the problems other. It can cost lives, impossible family positions. Whether we are patients are not that outofpocket or higher insurance premiums and wasted tax bills, 200 billing on prescription drugs. Americans pay the highest times when other countries pay and that is not for the last, three times more and that prices and we do the most in research and develop it is a public blunder, the National Institutes of health should be very proud germany what about billing dollars and 90 groundwork on medicine plus public support in the Late Stage Development we the people. Americans pay for the development and then pay the highest prices in the world. Other negotiate prices to protect the people but heres a tremendous influence in politics spending hundreds of millions in lobbying for every other industry. Argument provides medicine and should support innovation want to practice drug corporations write the rules extending monopoly power sometimes for decades blocking competition. It is not a market in the way you me leave. Corporations today claim this would comprise their ability to invest. Resting treatment for the tens of billions of dollars taxpayers invest for real Health Priorities and risk to civilians in industries himself enrichment. Last year they collected for negotiation funding 10,000,004. Buybacks and dividends that on the r d. Each spent 3 billion more in a prior decade that prices according to. Our patented drug and we as a society are willing to pay to care for and left once from the monopoly power and an alternative and blackmarket competition and we have little choice. For the first time our country is making progress charging high prices and rationing including price negotiations and we commend the committees intentions but the problem is getting worse and we shouldnt negotiate prices, not wait a decade which cost tens of billions of dollars. We support legislation before your committee to strengthen competition and transparency. Ultimately will have to come from monopoly power, that is the foundation allowing drugmakers to gain the lot and keep prices high. Other real challenges including providing assistance in challenging middlemen to take advantage inevitably from the patented monopolies easily treatment ripoff and we must do better, thank you for your time. Ceo knowledge and organization working to address anything distributed, thank you very much. The highest prices in the world prescription drugs, the town pharmaceutical industry the system to lend protection and increase prices. Intellectual property nearly 30 years. First decade of my legal career practicing International LawFirm American companies. I learned both legal and business intellectual property is important to us. I also learned in these enabled me to invent Property Rights companies obtain maintain in the market continuing to extract maximum profit and the reason i cofounded this. A severe crisis, more than one third of americans because of all documented this condition last. Account for any spending these correspond with the dramatic increase in this activity in the pharmaceuticals. We have top ten selling drugs in the United States and a total of 1429 applications evolved as a 222,741 are granted on these. They are filed after the drug is approved by the fda if we look at this discussion today with the companys here like eloquence, johnson johnson, those combined for 94 filed in which 35 granted. I want to dig a little deeper whether it would allow competition once its expired. You have to remember they represent 47 of total pharmaceutical revenue. They have patent protection at least until 2039 which 2002. Market media similar competition and i put myself on record and will not see competition and they will litigate it and use everything they can to not leave 100 billion on the table which is what its worth to them. Hes already discussed in 2024. The same problem, its increase the price by 24 in 2012, higher than inflation and they have more in the United States. The patents and the ceo was talking about, those were invalidated but they are preventing competition here in the United States and it will cost 48 billing dollars so this committee should recognize is not a case, it is endemic. If you want to get to the heart of the problem the most important thing is can do it deserves a patent it is enormous power shouldnt leave it to the market and results in these issues so this goes well beyond whats required in the Legal Marketing under the guise of innovation we need to not get sidetracked by this talk. Most of these are the financially station profit. , thank you and a pleasure to introduce our witness, currently the chair and regulatory innovation in california scientists, serves as director of research in a partnership between this Public Policy policy which is, thank you, sir. Honorable members of the committee, thank you for the opportunity to testify about drug prices and technology. I am an economist and professor of a school of pharmacy and pharmaceutical sites and price school of Public Policy and director search at the center for Health Policy and economic in the opinions i offer today are my own and dont represent the views of the southern california. I would like to start with the story in december of 1984, a young boy from indiana was diagnosed aids from a result of an infection in the blood. In his passing and 90, Congress Passed the up next insurance Affordable Care for hiv aids patients. This was realized five years later in the lifesaving treatment for hiv. Thanks to breakthrough medical innovation and forward thinking Public Policy innovative hiv affordable to many, hiv positive patients can expect to live well into their 70s and beyond. Increasing through the expansion of Affordable Care for treatments to access breakthrough medical therapies provide little value and high cost of patients reach and this is a tradeoff today. This is played out in different approaches across the globe. Theres little doubt u. S. Consumers access drugs sooner and more often than other races access the latest treatment in the research and across American Consumers have of their Life Expectancy if there is no denying the sentiment u. S. Consumers unfairly pay higher than overseas disability of prescription drugs in recent years to rally access and it enjoyed one component of this sentiment severely restricts this. Surprisingly coverage deteriorated even while the average manufacturer price, the amount they receive after rebates and discounts declined in the last five years. Money spent on insulin that prices fell by 31 in total expenditures are constant because intermediaries are in the rebates instead of passing them on to consumers. Transparency and pricing throughout the pharmaceutical Distribution System would be a major step toward ensuring drug prices for patients and dont enrich immediate areas. It provides value and promotes investment in the right kind of therapies and ensures increasing within patients for generations to come. Decades of Economic Research demonstrate where innovators predict higher return, innovative efforts follow. Outside the u. S. Many countries pricing approaches that fail patients or make it hard to predict future returns to innovation in the uk, australia and canada employ transparent predictable methods that rely on quality discriminate against global patients. France and germany avoid it and focus on medical benefits and away that the correspond to this price. This would type american prices to those charged by other country so americans would be forced the pricing systems around priorities. The right policies for american patients need to focus on affordability in good health. Affordable and Generous Health insurance, transparent pricing and an emphasis on site patients providing the ingredients for a better approach secures health for American Families now and for generations to come. Thank you. Singh effort republican colleagues talk about freemarket capitalism, the pharmaceutical Industry Based on government granted monopoly power and you may want to speak to the what does that have to do with freemarket capitalism monopoly for many tax. Prices are high because drugmakers have monopolies, a patient can just say ill take this alternative, if they are blocked from having affordable access, that is a monopoly, not a market system. It is the people support the risky earlystage for significant medical mrna cancer. The entire process to submit. A grants useful with time and we have now is a monopoly capitalism, and the liberals to have monopoly power in the believe in the free market and they have been corrupted by the permit because against the principles of the free market so in essence there on the free market. What you think about freemarket capitalism and anomalies . Truly free market exists only on the whiteboard in my classroom personal but its also true without patent protection there would be no innovation so the real question, how do we balance patent protection that induces innovation against the value of innovation and broadcasting more widely after the end of patent . Second tradeoff although in the case of pharmaceuticals we have an instrument, Health Insurance that allows patients to access lower prices than what manufacturers receive during that period and its an opportunity to expand accessibility. My last question, i believe you offer ceos testimony in response to questions, what would you say about their responses . Today address the issue squarely pay the highest prices in the world . One out of three people cant afford the medicine. We have heard some wild stuff this morning including blaming the middle and for high prices but drug prices are the whole reason we have a middleman problem because we have high prices at the outset but theres an attractive market for middlemen to enter. The fish rots from the head if you break up the market and look where revenue is, drugmakers capture two thirds, 323 billion for a small slice, 23 billion so you cant fix the problem of the pharmaceutical industry going up the middlemen trying to skim off the top, you have to get to the root of the problem. I would just add what the ceos gave, i believe that is not going to happen, you just have to look and similarly i believe you look at whats happening with those paths, 1 trilliondollar drugs. An important thing is places have been following for the past years consistently and recently announcing account stated confirmed this as well. I think it is a bigger role than it might appear, 40 cents on every dollar spent pharmaceuticals are not engages pharmaceuticals. Thank you all. I think it is made persuasively. Living in the free market system to protect intellectual property and whether its being abused is another issue and it legislation to do away with it but without production we would not have this. Why would you . But i think the persuasive. Without this incentive you will not get the innovation, are you disputing that . Im not. You are just ring. Three examples you gave seem to be all medicare patients and there is legislation other which will cap be outofpocket exposure for medicare patients for these drugs, i think it would be 2000 2025 and its going away now that said, insurance is making more affordable medicaid but somebody is paying it in my state was told pharmaceutical costs for the Medicaid Program at 35 of the total and yes, maybe we should do value based purchasing, thats a lot of money though, because the hospitals and doctors, thats versicles so theyve got enough, what we are really talking about is more consent, would you disagree . I think the question is really whether we want to increase profits or not in reno you decrease, you get less innovation in the research weve done, if you reduce profits, or the net result be . Youd save money but also it would lead to fewer new drug discoveries. Could we do something to make drugs over the more affordable to the Medicaid Program for example . If you have a compelling what they almost named the price and its difficult for that so this could bankrupt taxpayers. I dont think we are at a spot where we are lowering prices make us better off but gene therapies i agree there is significant problem in the issue is the prices paid upfront and theres the most uncertainty whether gene therapy will work in the long run. Value based purchasing quickly eight role here but if you do value based purchasing, you still have, how do you negotiate upfront costs . Gene therapy for sickle cell, ive treated a lot of patient. A dark 20 billion, i cant believe it would get that but the only thing that would stop them is maybe sticker shock so how do you negotiate that advocate . Thats a question hanging out there and i would like your opinion. It is not the case but you should negotiate the price up front but it would mean the price will respond overtime. Imagine a situation with jean happy was paid for in installments. I have written about that. His domains if youve got a highpriced manager value based arrangement, it could still be something society could not afford. What you think of the german model x doctor baker i think came up with that. There will be negotiation based on realworld data. The challenges it is hard to predict outcomes so if you look at ratings and the benefits of drugs, they are not negotiated prices. Trying to figure out where i get paid, its going to be hard if you cant predict returns from you will not have a financial incentive. Evaluate the bill working its way to the Judiciary Committee and address a patent. I think it will potentially the patents by about 20, a given technical advice, i dont think it will resolve. Thank you all, very thoughtful. Appreciate you all being here over to thank you all for additional questions, ten Business Days february 235 00 p. M. Three statements from the cost of prescription drugs and with that, the committee stands adjourned. [inaudible conversations] [inaudible conversations] highf care. The Senate Aging Committee hearing is about one hour, 40 minutes