System. [inaudible conversation] good afternoon ladies and german. For those of you who are just tuning in in our Television Audience and our public Radio Audience and the internet, welcome to the National Press club worsens 1908 we have been the embodiment of the constitution. Before we get started i want to remind our guests in the audience, if you have a phone, please put it on vibrate because we know you want to tweet. We want you to follow the action, and so on twitter you can follow us at rest club d. C. Using and pc live. I want to introduce the head table. As i introduce each of you, please stand and i will briefly, as your name is announced, it will be from my left and youre right. Senior reporter at med tech insight and the treasurer of the National Press club. Michelle, desk editor at the Associated Press and the membership secretary of the National Press club. Sally sues men, executive Vice President of Corporate Affairs at pfizer. Donna, breaking news editor at usa today and the past president of the National Press club. Kenneth cole, senior Vice President of Government Relations at pfizer. Skipping over myself, economy reporter for Bloomberg News and Deputy Team Leader for the National Press club Headliners Team which organizes all of our speakers in the club. Skipping over our speaker, danny, senior Vice President for business waters policy wire and the National Press club member who organize todays luncheon. Andrew, Vice President of Media Relations and Digital Communications at pfizer. Kathleen parker, syndicated columnist for the washington post. Virgil diction, Washington Bureau chief at modern healthcare. Susan jaffe washington correspondent for the lancet and a contributing writer for health news. Allen, chairman of the Fourth Annual wharton d. C. Innovation summit. [applause] i am jeff blue, news editor for the americas for al jazeera, and now it is time to bring in our speaker. As we gather, a healthcare bill intended to replace president obamas signature legislative achievement is subject to small internal conflicts within factions of the republican party. Actually massive, who along with President Donald Trump is driving the measure. As they shoot back on capitol hill, some of the issues wrapped up in the debate for healthcare rss ability and affordability and innovation. Some of the latter are tied up in obtaining lifesaving pharmaceuticals with prices that seem to keep rising and not falling. One of the stewards of the drug industry is ian read, ceo pfizer pharmaceuticals. If you have heard of tetracycline, the key ingredient to combat acne, lipitor which combats cholesterol or the little blue pill, viagra, you know what thats for. All of that falls under mr. Reids care. Mr. Reid doesnt come from research and Development Labs like penicillin which helped put pfizer on the map, but the financial house, as an auditor, which may be good training because mr. Reid and his counterparts are under tremendous fire to make 100,000dollar cancer drugs more affordable without having patients needing to apply for special assistance programs. Or, in pfizers direct case, under fire by being find a record 84 Million Pounds or 105 million for overcharging Britains NationalHealthcare System. It is also taken heat from both sides of the aisle, from the president of the United States, and from democrats in past years like former senator carl levin for uprooting their head cords from the Humble Beginnings in brooklyn and going to ireland for better text deals, which they contend is for better job growth. The Trump Administration, for its part believes the price of Prescription Drugs can be lowered by cutting corporate taxes to keep the companies from moving overseas. However, mr. Reid feels there is no need to alter its drug pricing practices in riders in late january, and the president doesnt understand his industry. We will talk about these and other issues, along with a robust questionandanswer period. After opening remarks, please give a warm National Press club welcome to ian read, ceo of pfizer. [applause] good afternoon. Is that close enough, can you hear me . Thank you to the National Press club for this opportunity and wonderful welcome. I am delighted to be here with you today. At pfizer, our culture of values is straight talk. I actually have a coin but i wont bring it out today that expresses that philosophy. Today i want to have a candid conversation with you about the risks of Drug Discovery and development, the Economic Contributions of our industry, the barriers to Affordable Health care including medicine and some observations regarding how we can create a Healthcare System that supports innovation and provides patient access. Drug discovery and development. If you think back to what treatments were available in the 1940s, i know most of us can do that, they were available for infections, depression, ulcers, blood pressure, parkinsons. There was a most nothing. You could look at a tv ad and see a patient in front of the doctor in black and white and the medicine cabinet behind that physician and he would turn and it was bare. Today that is not the situation. Today we have incredible medicines that have turned fatal illnesses like hiv and aids into a chronic condition. Slow progression for Rheumatoid Arthritis, cure disease such as hepatitis c and prevent childhood illnesses with vaccines. Provided treatment for painful ulcers and gerd, and if you have gerd, which is reflux, it makes your life a misery. Its not a trivial thing to be able to take a pill once a day and not have that issue. Of course gerd leads to cancer and other conditions. We are developing new immunotherapies that harness the natural ability of the bodys immune system to recognize and fight cancer. Along with other amazing discoveries weve made with small molecules and chemotherapy in the previous 20 years. In fact, in 2014 and 15, 40 new medicines were approved by the fda. Many of these were for rare diseases, cancers and other conditions where there were no good treatments available. The pipeline across the industry for new medicines has never been more promising. More than 7000 medicines under development whic around the wor. 70 of drugs across the pipeline are potentially first in class medicines. That is that drug has not been discovered before. That mechanism has not been discovered before. So to what do we attribute this progress . I believe its the result of focused investment in highly risky undertaking of Drug Discovery and development, combined with advances in basic research from our universities and other types of institutions. From discovery through fda approval, developing a new medicine on average takes 10 15 years in costs 2. 6 billion. Thats the number from boston university. In less than 12 of the potential medicines that make it to phase i are approved by the fda. You can look at the study and its complex and you can quibble about how it was done. I can give you a very easy way of knowing what it cost to develop a drug. Pfizer spends a billion dollars a year. Thats on research and development. If we are lucky if we produce three drugs. Year. I dont need to study to know what it cost to bring new drugs to society in todays environment. For example, between 1988 and 2014 there were 96 unsuccessful attempts, only seven new drugs developed to treat melanoma. Ninetysix unsuccessful attemp attempts. In brand cancer there was 75 unsuccessful attempts and only three new drugs. In lung cancer there was 167 unsuccessful attempts and ten new drugs, one of which was from pfizer. To discover and develop a new drug, the pharmaceutical industry spends, on average, six times more in r d as a percentage of sales compared to other Major Industries in the u. S. In 2015 the industry invested a combined 58. 8 billion in research and development. That is 28 billion more than the entire nih health budget. Of which only a fraction is dedicated to Drug Discovery. The Drug Discovery process is complex and not well understood. After 38 years in the industry, i tell you its probably one of the most complex undertakings that humanity has. To take an idea and bring it through the Drug Discovery process of 15 years ensuring excellence at every stage and data at every stage, to finally get a drug that can be taken by humans with a positive riskbenefit equation. Lets briefly review what it takes to discover and develop and bring new medicines to patients in somewhat laymans terms. The process begins with basic research, undoubtably done by researchers and government institutions and National Institutions like the National Institute of health. These institutions postulate, sometimes find biologic pathways and insight into a disease or possible approaches to treating the disease. This is a critical step. It is light years away from having a medicine that can treat your condition. The pharmaceutical industry draws from this basic Research Findings once they can validate it. Normally you publish and it gets validated by some realtor and you understand, the understanding improves, at that point the industry may begin a Drug Discovery process from those original scientific findings. They take this understanding and translated into a research hypothesis, often through animal models that begin 10 15 year journey to get the medicine to patients. We discover a molecule, create a molecule, synthesizer molecule, large or small that we believe will interact in the right way with the target pathway. We run studies to be sure the molecules, large or small have what we believe is the desired biological effects. We verify the compounds form of dynamics profile and how it affects the body and we run multiple Toxicology Studies to determine safety before beginning trials in humans. At that point, we then conduct early studies referred to as phase i and phase ii trying to understand the right dosing and assess the safety, efficacy and quality of the compound and identify the right Patient Population. Once phase two has been passed, for safety and efficacy, we conduct large phase three trials, thousands of patients, the largest we conducted was 85000 patients, to prove the riskbenefit of the drug. Then we submit this data to regulatory body like the fda for approval. This process has many interactions and false starts. Very often you start with the basic drug substance that you believe will be good but its toxic. Or you remove the toxicity and its no longer effective. Theres multiple attempts to try to get the right medicine with the right distribution whose riskbenefit profile is favorable. Ill share with you an example. We have a first in class drug for Breast Cancer. One of the deadliest and most poorly understood cancers. We started in 1990 with original Research Done by independent researchers that identified and characterized key regulative cell Growth Division in the cancer. Through collaboration with researchers at ucla we identified the right Patient Population for our compound. By 2008 we had an acceptable molecule that we believed appropriately interfered with the cancer cells to disrupt the growth of tumors. This result was that after 25 years of initial basic research, we had a cdk inhibitor. Seven years after the first patient was dosed in clinical trials, it was approved by the fda. With 50000 patients in the u. S. Alone now have been treated by the since the approval in 2015. Before the drug was even approved and launched, we began conversations with the healthcare community. We spoke to more than 80 payers. More than 20 Breast Cancer experts and 100 oncologist to build an understanding of the value of this medicine, what it does, what it does against competition, what advances it gives, how it changes peoples quality of life and how it extends her life. Based on that input, we negotiated, with the plans and the payers, a price for access to this drug. We continue to make significant investments in the drug. It is being studied in patients with early Breast Cancer and there are 34 ongoing Investigative Research programs across various non Breast Cancer tumors. After two years on market, two years, there are two competitors. One is approved and one in development. That is how the market evolves. You get a patent on your molecule. You dont get a patent on treating the disease. Your molecule has to have a superior efficacy or characteristic to be successful. More and more we are followed in very quickly by competitors with similar looking molecules. Today there are other therapy stories like patients with advanced nonsmall cell cancer and for melanoma and gileads for hepatitis see. These therapies have Huge Investment in risktaking by the industry. Lets talk about Economic Contribution to the industry. A continued stream of new treatments wont flow if society is not willing to fund and support a modern biopharmaceutical industry. That is what gets cures to patients. I would like to note, in 2014 the bio pharmacy industry represented 3. 8 of total u. S. Output which amounts to an input of one point to trillion dollars. When you take into account the value of goods and services produced by the industry and the total impact on the economy, one point to trillion dollars. This includes the Economic Activity of the workforce the more than 4. 4 million jobs across the u. S. Economy including direct and indirect vendor and supply jobs. That being said, i want to be clear, we understand our responsibility. Every scientist understands there responsibility and pfizer understands the responsibility to produce medicine that brings significant value and are competitively priced. We are working towards an understanding by society of the investment we make, the risks we take and by we i mean our shareholders. The people who fundamentally fund pfizer. An appropriate return on the totality of our investment. The successful drug will always be, will normally be profitable. Unfortunately there are a lot of dry holes on the way to a successful drugs. You need to have the cash flow to support it. Lets talk about access and transparency. We understand the access needs of patients and what they face with copays and high deductibles and the need for valued chain transparency in this process. We give away for free to 250,000 patients because the process is broken. Those patients need come to us as last resort because insurance system is failing them. Transparency helps patients and physicians to make the right choice for the patient that delivers the most value. How does the doctor know they have the best product and the patient knows theyre getting value from the product. How do we know patients are paying higher outofpocket cost and a great amount of cost is associated with medicines improving their conditions as compared to expensive interventions like hospital missions, emergency room visits and others. We paid 3 of the cost of hospital care out of your own pocket. However you are asked to pay 15 out of your pocket for drug costs. This is not transparency. Most consumers do not know this. Rather medical reimbursement costs are often used by the system to avoid adverse selection. Adverse selection is when you hirhave a higher proportion of k people in your plan than your competitors. When considering transparency and patient access, the value of the entire Health Care System needs to be taken into account. Not just pharmaceuticals which represent 12 of the total cost. We need to consider two factors. Visibility and understanding of what youre getting for your insurance, make it clear to the patient, and a patient focused benefit design that meets the patients needs. I would like you to use the analogy that patients need solid insurance, good insurance, similar insurance that you have for your homes. If a persons home is destroyed by fire, their Insurance Company covers the majority of the cost to rebuild the house. People know what theyre getting. They are able to rebuild the house. When it comes to your health, you should be able to have insurance cover diseases like cancer or Rheumatoid Arthritis without having to bear the burden of the majority of the expense. Individuals cannot afford modern pharmaceuticals. It has to be done through an insurance system or risk sharing system for the cost to reduce and bring safe effective growth out of the reach of individual pocket. However, the Way Insurance plans are designed, prescription costs are shifting to patients in order to contain costs in the short term. A lot of plans now have large copays. 6000 deductibles before you get to any repayment. No first dollar payment for pharmaceuticals. This is not good insurance. There are little incentives for the prevention of cure over the longterm. In many cases, benefit designs are constructed to avoid sick patients. For instance, previous to the Affordable Care act, we have a product that helps you stop smoking. Insurance companies wouldnt cover it. Why not . They dont want smokers on their insurance roles. Their bad risk. So we had to work to get access for the drug in insurance systems. Hepatitis c, thats a good example. One example is the pricing discussion that occurred when it was introduced. It was not about the value of the drug, the evidence demonstrating it was costeffective. The debate was really about the shortterm impact on medicare and managedcare budgets of an unexpected expensive highvalue medicine which they hadnt budgeted for. They had no risk adjustments for it. So before happene hips he was a, the annual cost for treating a patient with hepatitis c depending on the state was 60000. Year with patients with endstage liver disease. 112,000 for those with liver cancer and 500,000 for those receiving a transplant. An average lifetime estimated cost was 205,000. Approximately. Compare these cost to the fact that more than 90 of patients with the most common form of hepatitis c can expect to be cured with the new drug in as little as eight weeks. This is a lifetime cost now of slightly more than 40000. And because of intense competition, the cost is 50 less than the initial cost it was launched at. Returns. Lets look at returns of the industry. I think there are many ways we can point out the benefits to society. There are various ways of looking at it, the transparency that you are seeing in most states are not an appropriate way of measuring the benefit of the pharmaceutical industry. The drugs developed by the industry have built in incentives and costcontainment. The drug, once approved, only has half the patent life left. The maximum you can get is 14. Once the patent is expired, the drug is available in the form of generic. Today more than 90 of new prescriptions are for generics in our Healthcare System. They are available forever to society at the price of generics. They would not have been available if they want discovered, if there was no innovation money for their discovery. Another indicator of equitable return is shown by the industrys financial performance. Of course the successful drug is highly profitable. Thats a real insight. If you look at the average return of the pharmaceutical industry over the last five years compared to 25 other Major Industrial sectors including consumer, software, services, telecom, insurance and manage healthcare, the pharmaceutical industry ranks 19th in terms of priceearnings ratio. That is out of 25. A key indicator of the Growth Prospects of a company and the earnings index. Eleventh in terms of return on equity, ninth on return on capital and ninth on return and assets. I not see no evidence of extraordinary returns on the pharmaceutical industry compared to others in the bloomberg index. Its also noteworthy that since march 2010, the return of the pharmaceutical industry has been lower than the Largest HealthInsurance Company including united health, aetna, cigna, humana. As a whole, these Companies Outperform the s p 500 stock index which returned 135 over this time period. Collectively, the Companies Gain nearly three 100 including dividends. While the pharmaceutical industry turned 91 including dividends. Less than the s p and far less than Insurance Companies. Overall, i think its fair to say we are being responsible when it comes to the pricing of our medicines. We are producing great value for society and simultaneously taking large Financial Risks at the onset of the drug. We dont set prices, we negotiate based on the value of the drug in the value to society and the arbitrators of that are the Insurance Companies in the payers. There are two examples to demonstrate. More specifically the value of what we do. In ten years, stantons use has generated nearly 1. 3 trillion in economic value to the west. Of which, around 950 billion was retained by society. Around 20 of the value to the industry from the revenue of selling the drugs. We retain 25 of the value. At the same time, the cost has now gone down 90 . Society now has that benefit of that invention forever at generic pricing. From 1988 until 2000, improvement in cancer survival created an estimated 23 million more life years. 81 of that value to society, 19 accrued to the pharmaceutical industry. However, we understand that while drugs are highly costeffective, our Health Ecosystem is making it difficult for patients to get the health care they need at the cost they can afford. Especially in lifesaving medicines. I believe we have a collective opportunity to start mending our broken system by working with take holders and making sure the voice of the patient is heard. We believe there are four tenants required to create a Healthcare System that meets patients needs. We need to provide all patients with access to Quality Healthcare coverage, coverage that includes preventive care, access to Cost Effective interventions and comprehensive care for things like cancer. At least be willing to play our part to having patients have access to that medicine. We do already with her patient assistant programs. We need to have incentives for innovation based healthcare that reward people for good health and give them financial incentives. We need to get the right incentives in the system, incentives to pay for health, not for the treatment of illness. If health plans and providers were compensated for improving health of the longterm and patients are rewarded for investing in their health, both parties would benefit. Especially patients who have good insurance and benefit designs that cover highvalue treatments at affordable copays. We need to base decisions on healthcare on longterm value and not one on budget. Ive always listen to both sides. Lets look at this years pharmacy bill. Lets look at all of the cost in the system and all the cost saved while using this medicine. Longterm outcomes versus shortterm financial registry considerations. We need to base our solution on competitive market principles. The right incentives for the whole healthcare sector in the right place. Specifically for the pharmaceutical industry, i would say we need policies that spur public and private funding. Most Companies Like pfizer have huge number programs we cant afford the cost of capital. We need increased investment in manufacturing. We need regular cherry reform that accelerates scientific advancements and the approval of lifechanging medicines while also eliminating the backlog of generics. We need favorable tax and trade policies that create a level playing field, protect American Intellectual property, and remove barriers to access. We believe committing to each of these ideas can lead to an efficient marketbased system for all segments of the Healthcare System, providers, payers, Biopharmaceutical Companies and most important patients. For that i would be very pleased to take your questions. Thank you very much. [applause] okay, we are on. Just a housekeeping note on questions. If you have a question here in the house, you have these cards on your table. You may write down your questions and pass them to either end of the head table. We will sort through them and try to get to as many as time allows. I like the gavel. Its a replica of George Washingtons gavel. First of all, as you can imagine, we have quite a few through the internet and so forth, we have a bunch of different questions. I have not seen all of these questions in depth and just for the record neither has mr. Reid so he has not been prepped for these things, as it should be. This question actually comes from one of our Board Members who covers health care for National Public radio. What you think of the negotiations on the healthcare bill on capitol hill, specifically lawmakers today who are debating whether insurance policy should be required to have a minimum level of benefits to qualify for tax subsidies. These include Prescription Drug coverage, and do you think the socalled essential Health Benefits should remain in law . I cant give you any prediction, im not a politician, im a businessman whos trying to help patients. I would say we would support or we do support any system that ensures patients could access, that their incentives are in the right place, that there is choice in the system, and that people get the ability to choose the insurance they need for the particular time they are in their life, and we do believe old people should choose to have insurance. As regard to having central benefits, i think its a situation of my preference is less regulation and more market bases is the right way to answer that issue. But, you do need a safety net so i do believe there should be an appropriate safety net for people who cannot afford insurance and have preexisting conditions. Just a quick followup, because this is sort of breaking. The House Freedom caucus said there is no deal on the House Republican bill for it to replace the Affordable Care act. Whats the impact on the industry from your Vantage Point . President trump has been saying i want this bill, i think i can make a deal. He has told you directly, something you criticized that he doesnt understand your indust industry. I dont believe there is any shortterm impact for the industry. I think theres a tremendous impact for patients. Shortterm i think you see a system of Affordable Care act that is collapsing. Its pushed into existence, no firsttime coverage for pharmaceuticals is pushed into existence with the 6000 deductible before you get to any reimbursement. For instance, when a case was being discussed, we looked at what would happen if they had struck down the federal exchanges, and we decided we would provide our medicines for free to everyone on the exchange. The cost of pfizer 40 million. Year. I mean, in a 52 billiondollar corporations, thats nothing because no one is using our medicines in exchanges because the exchanges dont provide them access. I think we do need to reform the health care the way its delivered and the consequences will be with patients. A lot of people have the perception that the pharmaceutical industry is a very powerful industry. Is it just a laymans thinking that you couldnt prevail upon the Insurance Industry . Taking more revenues and paying out in premiums is what they do. True. [laughter] therefore theres no incentive. Not a bit. Well, moving on question from the audience. The american medical association, the American Hospital association and the American Association of clinical physicians, as well as other healthcare groups have expressed their opposition to the current republican Affordable Healthcare bill. Does pfizer also oppose this bill. If so why, if not why not . We are in a democracy. Everybody can express their own opinion. Pfizer has not expressed a formal opinion on the bill in front of congress. We support principles that we like to see enacted, like ability to access medicines, reasonable copays, fairness in the system, choice in the syst system. We support elements of those plans. the appropriate risk to benefit the deal on development of drugs. Speaking of which come out what you think the president drowned ahead of the fda . Like him, dont like him . Ive met him in business situations. I think he is a respected position. He knows the fda. I think he went there as a deputy at one point in so you know, we look forward to working with him and the administration to ensure our drugs get to patients as quickly as possible. What if guys are doing to control the misuse of its highly profitable opioids . Well, i am not sure, mr. Chairman but we produce opioids because they are extremely important part of the Health Care System to people who need to deal with chronic pain. We promote these products strictly unlabeled to position and we also have a product does he now come under rocks and, with rescue you from an overdose. That we are making available at 11 for one treatment i believe seems a very reasonable price to save somebodys life. Its one injection. Ive also given a Million Dollars to the state where ravaged by this. Opioid addiction is destroying families in destroying parts of our society. So we will support anything that is appropriate use of opioids. So if you can make that drug available for 11, why not lower the cost of the others . We have to look at the value of what ive read delivers to the Health Care System in the cash flow sweeney to continue doing research in cancer. It is a matter of what value does the drug delivered and we need to recover that value because if we dont, we cant continue to investigate this is why use the macro economics for you. We had a return on capital of 25 , then society can say thats a pretty rich return on capital. The industry is around 11 . It is not that healthy. Just starting return on capital as a percent or 9 to two shareholders require. You have to understand that our focus is what is the value of the product . Can we recover a portion of the value . I noted in patents and cancer we recover 20 of the value. We are conscious of affordability. We negotiate with the health plan to ensure they see the value in what we provided. Thats how we price it. Different question. You have done transparency a lot in accessibility. Get in the state of massachusetts come your company had to be subpoenaed to have information on your donation to patient assisting groups, to see because essentially the massachusetts rossi teeters felt that you are contributing to the inflation of cost. That is their point of view. I would argue that what we do is totally in the rules of the aig. We feel like we are completely within the revelation regulations and laws. They are cooperating with the investigation. You mention the insurance system is broken. Health care obviously is front and center. What do you Want Congress to know . Get the incentives right. You dont get a system to work by regulations. You finetune a system of regulations. You ensure some equity of regulations. But if i was to wake up tomorrow and redesign the Health Care System, as one persons view, most people stay in the same geographic area. They dont switch hospitals the way we switch Insurance Companies or providers or doctors. I think the risk in the reward should be placed on the providers in our system. They should be compensated for taking that risk and if they take the risk, they are totally insensitive to look to the health of the population and the treatments they get the population. That would focus truly on health care and they would hold the patient for most of their lives for the incentive than risk should be held. Insurance companies could provide a service of adjudicating the level of sickness for the population said they appropriate to those providers. That would align incentives. Theres a lot of questions as you can imagine about congress and about drug prices. What concerns you have about Congress Getting into the drug pricing markets in the latest version of health care . Well, i think that i dont believe that price controls on any part of our Economic Activity produce choice or organization. And so, i would advocate against any type of price control. Its a very blunt instrument. And one allow innovation for the curious where we see the diversity and choice. I think it is a bad policy. According to one of the journalism and transparency sites, open secrets. Org come your company spent 2. 7 million on political donations and another 9. 7 on lobbying. Where did it get you . Well, but we spend on, and i cant really confirm with the numbers because i dont really know where they come from. My point of view is we have to come as part of a society of the part of a legitimate discourse with regulators and the people who are regulators and the political costs. We have to be involved. We have to advocate for choice and access tomoko powis low copays. This is part of the political discourse which we are entitled to as a company. What does that mean for the little guy and gal not Walking Around with that kind of money in their pocket . Well, and i think every society has different ways of expressing their views and they can join associations. They can express individually. They can write to congressman. He now come that they dont spend that money because they are not trying to interact with the 50 states and all the congressmen and all the senators and regulators and inform and educate, so they dont need to spend that type of money. The u. S. Veterans administration pay some of the lowest prices for drugs doing bulk purchasing. Should that be extended . Its not due to bulk purchasing. There is a deal. You disagree with the premise of the question. The deal was struck a long time ago and the United States is a prime example of nobody pays the same price for medicines. It is a marketplace. There was a deal struck that basically says we as an industry except that the veterans are population in need of additional care and we provide our products close to noncommercial prices to the veterans. And we do that on the basis of those prices dont affect the price is that we sell to mitigate and the prices we sell to medicaid, which are highly discounted dont affect the prices we sell to the private sector. This allows us to create access for the most unfortunate members of our society, while preserving a Business Model to continue to find innovation. So theres no way to sort of extrapolate that model and keep your industry solvent . Yeah no, you could extrapolate that model and this is what the europeans do. By the way, its an oxymoron for you negotiate with government. You dont negotiate with government. You take what they offer you. If youve already got your investment sound. So the result of extend and does preferential prices would mean substantial reduction in the total volume spent on research and the opportunities for new products. Without the u. S. Market, there would not be a tremendous expansion in the innovative therapy is available today and available in the future. Basically europe and american innovation. How do you balance the scales . You need good trade agreements. The intellectual property is protect it. Speaking of free trade agreementagreement s. Thats one solution. The president of course bailed on tpp. What is the impact . We didnt support it because it is bad for intellectual property. Most of these countries, if you look at canada, australia, new zealand, highly developed countries, offering writing on inventions in the United States. If you look at access for population, i dont have the exact numbers here, but if you say 100 products 100 new products authorized in the United States. Australia and new zealand the population only has access to 30 of them. U. K. Has access to 47 . Normally two to three years later the u. S. They are citizens or not getting Quality Health care. You are saying that is why canada is cheaper . Canada is cheaper because the rations and because they can. If rewrites direct american innovation. In our industry, let me be clear here. We have sunk all the money up front. You are not paying for the pale. The pill is an artifact. What you pay for is all about clinical trials, all of that knowledge, all of that experimentation which tells you the pill will do what it will do. The pill is developing. Its a way of getting that into your body. Once youve done all of that were, you are very subject to commercial blackmail because you need to try to recover as much money as you can from the sale of the intellectual property and therefore you are forced by governments to say, well, i know you get 100 in the u. S. And that is a market based price. But we are not going to give you access to our market at all. You have a choice. You can either say no, in which case you get no funds which is prices go up in the u. S. Or you say okay, what can i negotiate. If you say now, ill give you an example, to make it clear. It is a huge advance. It allows women with metastatic Breast Cancer ive got to say that or the fda will kill me. It gives them 24 months against the standard of nine of survival. It is an incredible revolution in the treatment of this cancer. You go to the u. K. And the u. K. Government has assessed this as offering us pennies on the dollar. Pennies. The problem is i can say no, which i havent we will walk away. But it really is fair, the next company as they are. And all of them have invested the money up front and alerts integrated to recuperate something from that marketplace. You cannot negotiate with government. But on a slightly related scale, you remember when former president bush, former president clintons pet fire and other things, going to third world countries to try to lower prices, drug prices they are. Cant that sort of thing thinking be brought back here . We do. Thats what we give away. 1. 7 million prescriptions. Im talking about the pricing. The price has to reflect the value of what you produce. If not, you dont have an Economic System to make sense. The price has to dictate where you put your resources. You put in Rheumatoid Arthritis, cancer, mental disease . Pricing reflects economic value and you need that to give choice. So if you distort those market signals ,com,com ma you distort everything we do. Our responsibility is to produce the best and greatest medicines we can and then to price at added value that allows us to continue to do that work with a reasonable return to our shareholders. Thats what we do. Ive shown youto return we get on stock market is in the middle of the road. It is not at the higher end up with some industries are in. And so in the end, it is not that. It is societys decision of how much do they want to pay for innovation . If you dont want innovation, then price control. If you dont want innovation, and then say you have to sell all of your drug prices the same you give to the vets. These are prices for different segments of the population that have great need. This Industry Needs to have a return that allows it to continue to do his research. You get the perception that because of the revenues of yours and other related companies that they and was very popular during the campaign. But you get the whole notion they are saying hey, you are earning a 10 billion in revenue. You cant cut us a break . Well, that perception needs to be addressed by really good insurance. They needs to be addressed by saying that we as a society want to take care of women who have metastatic Breast Cancer and we value through Market Mechanisms this product, this price. If you didnt, i wouldnt be selling it. If we could advance if we could speed up the fda, if we could get drugs to market in less than 15 years, if we had a system to encourage innovation, we could bring lots of our drugs to market, which would lower prices. What i am saying is we advocate the ways of making our industry more productive. The more productive we are, though lower prices will be because they will be more competition. There will be more products in the market and that is that drives pricing. We will cut down on the followup to little bit because im short on time. You said perfect his patient life patent life story is closer to 14 years. What are your thoughts on ever greening . They discover clinic has even said the practice is unethical. Well, i am not quite sure. Do you want to define what that term means . Lets assume ill take the common expression of it. Where you take a molecule once a day and you change it so that it is now once a week. It has some value if society wants to pay for it, if they wont, they wont. And a marketbased system, i dont condemn it. I dont applaud it. Except to society to decide who they want a once a week treatment or once a day treatment. Sometimes thats important. If youre injecting herself every day, thats advance. Taking a pill once a week, it is pretty irrelevant and nobody should be paid a premium for that society does that in the u. S. In fact, you cant make money by evergreen. We dont. We have a product that we are bringing it once a day formulation, but new research was 12 years ago and there is delays and delays in its come to the market too late. It is a pretty failed strategy. Earlier this year, bill gates offered seed money to help develop vaccines for emerging diseases that could lead to local epidemics. Such Vaccine Development is generally unprofitable for pharmaceutical companies. What should be done to encourage Drug Companies to embark . Very simple. Get the incentives right. You want antibiotics because it is a product that you want people to invent and discover, but you dont want them to lose out because you want to keep antibiotics in reserve. So you need to find a way of creating an incentive to develop antibiotic thats not related to the economic return. The pandemics, evil, all of the diseases we could be subject to that, but the Tropical Forest are outside of the United States. Unique uris, but she cant make money from the skewers. The way to do it i believe is a transferable exclusive voucher. If the fda said to the community, if you bring up a new antibiotic with these characteristics and we approve it, we will allow you to extend the patent to one of my existing products. That would feel not only a companies. Everybody would be looking at antibiotic development because they would be. Aalpha small companies. They would sell their development to larger companies. But what ecosystem would be better to find antibiotics because theres an incentive that is fair to society and fair to the capital that goes into finding these research projects. Sylvia mathews before she left, her post, she feels health care is the right, not a luxury. Your view. Well, it is her right to the extent that society is willing to fund it and pay for it. Clean water is the right to the extent that weve got sanitation and we paid for it and we value it. I dont want to get too political or philosophical here, but you know, there are very few rights in our constitution. Intellectual property is one of them. Before i get to the last couple of questions, a couple of calendar announcements. Upcoming luncheons include aflcio chair Richard Trumka on april 4th. John costin and, just in time for tax day on april 5th. Joint chiefs of staff chair general john dunford will be here on april 21st. And ballerina mistie koplan will be here in april 17th. As a newsmaker and before i could get the last question, we have a tradition here. Everybody from Nelson Mandela to Benjamin Netanyahu has received this note. The same . Not the same. Its yours. Thank you very much. [applause] final question. If you became bizarre of health care in the u. S. And how they guarantee that all stakeholders would live up to what you would be doing behind you, what would your recommendation look like . Well, i think what i just described. I believe in choice of marketbased solutions. I think health care has been hugely distorted by a lack of incentives being in the right place. I feel that we need to go back to position hospital relation with the patient. We need to provide an end to further providers to look after their population and maintain health and not be paid for how many mris they can do and how many xrays they can do on a transactional basis. Get the incentives right. Paid good to keep them healthy and Everything Else will align very easily. Thank you, mr. Reid. This concludes this National Press club luncheon. A reformation, go to our website, www. Press. O. R. G we are adjourned. [inaudible conversations] the disruption of technology is so fundamentally challenging our entire economy and government has no choice but to reflect that reality. And there will. Weve been through this. I dont think weve ever been through quite a disc out, but we have before democracy has created a society that has survived and thrived. I would argue in a lot of ways to improve as he went into an industrial society. We at the same Inflection Point today between sort of an industrial economy and information economy or however you want to phrase it. I cruised an amazing opportunity not just to survive the democracy, but to create a more perfect union. I believe the cybersecurity agenda in general is super, super important agenda. There is a nospace cybersecurity is not the problem and technology and then it will be gone. Cybersecurity is the problem that is here to stay. In case you missed it, on cspan, National Coordinator for Child Exploitation prevention during the obama administration. I used to think the hardest thing ive ever have to do is look into the eyes of a child and listen to her story about being abused. I was wrong. The hardest thing i ever had to do was watch there appears, sometimes still photos, sometimes video, sometimes with sound. All heart wrenching and even now impossible to forget. Agricultural secretary nominee sonny purdue. Really struggling to be profitable and hold on and even the best farmers are not able to produce a product with the best production capabilities they may have. I think trade is really the answer. Msnbcs Chris Matthews at the first word dinner. The truth that arrives on the front page and the straight news broadcast. That is what contains the politician. That is what stops the overreaching power and that is what the country take seriously and thats what matters this hour, and this week, this time in our lives. Treasury secretary Steve Mnuchin on tax reform. The goal for tax reform, okay, which are created and middle income taxcut, creating personal tax simplification and making u. S. Businesses competitive where we have a very high business tax rate and worldwide income. We are able to take the tax code and redesigned tanks. Pfizer ceo ian read and pharmaceutical costs. Donuts using medicines and exchanges because the changes dont provide access. We do need to reform the health care and the way its delivered and the consequences will be with patients. Epa administrator scott pruitt on environmental policy. Theres exciting things going on with respect to Clean Coal Technology across the globe. Is exciting things going on, but not here. Most of that is happening in europe because of the disincentives we put into play here in this country with respect to nuclear. If you care about these environmental concerns, you ought to see the mix. Cspans voices from the road. We recently visited 17 historically black colleges and universities, asking students what issues would you Like Congress or the administration to address in the first 100 days . Hello, my name is my everything and a submit your a director central university. Entrance 100 days in office i would thought him to grasp the understanding. Even though we did not go 10, we are represented under him. But they can to build and maintain relationship with other countries developed over the years as their commanderinchief. Thank you. Famous senior year at durham state university. The Trump Administration is taking care of the issue, and a thing education that includes the first 100 days. Etter medicare, obamacare that started. As a black man, i would like to see that. Hello, my name is claire. Im a senior pr manager, Graphic Design minor harvard university. In the first 100 days i would like for him and congress to address the issues of federal funding towards Womens Services because that affects people as myself another middle class and definitely lower class people. Hi, my name is michael mann at all. Im a junior