Looked at his agents role in improving the process. Held by the hill, this is two hours. Welcome to this mornings briefing, Prescription Drug system, ensuring access. Id like to thank our sponsor, the coalition, for affordable Prescription Drugs for making this possible. This is the first in a series of two events sponsored by the coalition to explore some of the most pressing issues facing the u. S. Health care industry. This morning we are focused on the cost of medicine. In the United States, expenditures on Prescription Drugs are rising faster than Overall Health care spending. Reacting to the concern over rising prices, the white house is expected to unveil an executive order examining ways to reign in drug costs. Even as we wait for direction from the government, how can every entity within the Prescription Drug Delivery System help manage costs and keep medicines accessible for all americans, and what innovative marketbased solutions are being ex morning drive oh plord and what role can government play . We hear from stakeholders as they explore a landscape where patients can get the medicine they need at a price they can afford. A few notes of housekeeping. In addition to those of you here in the studio, we are Live Streaming on thehill. Com. We ask that you keep your phones on silent but we encourage you to join the conversation on social media. Follow us on twitter thehill events and comment using the hashtag whats next. Please keep an eye out for members of the team who have hand held mics. Finally theres a very short survey on your chairs. We would love your feedback. Feel free to give those to a member of the staff on your way out. Id like to invite meghan scott, executive director of the coalition to make some brief remarks. Meghan . Good morning, everyone. Thank you, johanna, and thanks to the hill for hosting this very important conversation today. We appreciate the distinguished speakers and panelists and all of you here in the room and those of you watching online. We know that this is a pretty slow time in washington for health care and theres nothing else that you could possibly be focused on, so thanks for being here. All kidding aside, a serious solutionsorient solutionsoriented conversation about the issue of rising drug prices and the effect they have couldnt be more timely. Were pleased to have representatives from across the drug supply chain as well as a representative of the patients who rely on those drugs. Addressing the ongoing challenge is one that deserves a substantive dialogue and cooperation across the entire Health System. To that end id like to share with you just a little bit about who the coalition for affordable Prescription Drugs is, who our members are and why weve come together now. We bring together employers, unions, public sectors retirees and other stakeholders. These organizations know first hand the real value that these partnerships allow them to provide to their members through sustainable, affordable Prescription Drug coverage for their employees and members. The issue is front and center for Many Employers and unions because about half of all americans get their coverage through the employer system, far more than any other source of coverage. Amid these rising drug prices, employers and unions have had to find ways to ensure that their employees, members and their families are able to access the medicines they need. Thats why more and more sophisticated purchasers have been choosing to partner with pbn. Kormd to a survey in 2009 of more than 250 employers, 2009 only 47 of employers were partnering with pbn to manage these benefits. As drug prices continued to rise, four years later you saw that number hit about 61 so these organizations are really working to find ways to ensure that their employees and members have access. While the average list price grew by nearly 10 , the average net growth was held to around 3 . Thats real savings that are being driven through negotiations with manufacturers. Pbns are also essential to the affordability and sustainability of government programs. A recent study found that theyll save Medicare Part d 896 billion over the next ten years and without it seniors would be looking at premiums that are about 66 higher. Beyond the savings generated by negotiations with manufacturers, pbns deliver value to the Health System by building high quality Pharmacy Networks and reducing point of sale prices through negotiations with pharmacies, use their deep clinical expertise to encourage the use of the safest, most effective medicines including generic and alternatives that can achieve the same Health Outcomes often at lower cost and provide patient focused programs and tools aimed at improving Health Outcomes and avoiding unnecessary costs such as hospitalization. Its very appropriate, as johanna said, that the hashtag for todays event is whats next rx because its time to find solutions. Sound approaches that will ensure access and improved clinical outcomes within an affordable and sustainable framework. We believe that solutions should build on what is already working for the government programs, employers, unions and other organizations that most americans rely on for their health coverage. Theres an immense opportunity to encourage the most efficient and effective use of medicines to both improve Health Outcomes and to significantly reduce Unnecessary Health care spending in both the public and private sectors. Finally, we need to do things that will increase competition for Prescription Drugs by facilitating use of generics, by identifying off patent drugs with little or no competition and by taking a closer look at anticompetitive practices. When theres greater competition, patients, employers and taxpayers all benefit. So again, a big thank you to the hill for hosting this important conversation today. With that, im going to turn it back over to johanna and we will get things started. Thank you all. [ applause ] we begin this morning with a conversation featuring two democratic members of congress from the committee that oversees matters related to health care. Congressman gene green of texas is the Ranking Member of the house energy and commerce subcommittee on health, and congresswoman Diana Degette is the Ranking Member of the submity an oversight and investigation. Joining them is my colleague, the Hills National correspondent reid wilson. Reid . Grandmothood morning. Thank you all for being here this morning. Were going to chat a little bit about the cost and transparency of Prescription Drug prices and then open it up to your questions as well, so if youve got questions there will be people with microphones all around looking for you with your hand up. But i want to start with you, congresswoman degette, what role does Congress Play in increasing transparency for drug prices . Particularly our committee, the energy and commerce committee, we have jurisdiction over all of the issues of patent exclusivity and availability of drugs and Medicare Part d. We basically have jurisdiction. So people like gene and i think that what we should be doing is really having some in depth investigations and hearings to figure out why all of a sudden high prices of Prescription Drugs seem to be pervasive everywhere, and weve been urging our colleagues on our majority colleagues on the other side of the aisle to have a robust investigation in hearings. Its not just a simple issue of Prescription Drugs are going up, lets reduce the prices. Its a as we just heard, its a very complex system that seems to be growing more complex and also more opaque by the day. So, we think that Congress Needs to take a very active role. Mr. Green . I agree, and of course were democrats so they dont let us call hearings, but i would have an aggressive hearing schedule of our Health Subcommittee on a number of issues. Id like us to work with cms more and make sure we dont create another issue but also drug prices to see where we could get some of the really things is venture capitalists coming in and then raising the price astronomically. Not a dime of that goes into research but again we dont want to dry up investment in research because thats how were going to discover these new cures. Since diaane and chairman upton with the sponsors, we want to continue that over the next number of years, that intensity with fda funding, obviously nih fund funding. The first two years, appropriations give us 2 billion. Our goal is 10 billion over five years of new research at nih. You bring up this interesting balance between profit for the company that then go into research and transparency and lower costs for the consumers. How do you strike that balance . I dont think weve figured out how to strike that balance. Otherwise we would have the green degette solution which we frequently do, but this morning we dont have that to present. But it seems that as the system has grown more complex, your previous speaker talked about the very complex system where you have patients. Obviously you have employers. You have unions. You have Insurance Companies. You have pbms. You have pharmacies and then of course the pharmaceutical companies themselves. You have this very complex system and each step it seems that theres negotiation and theres rebates, and then overlaid over all of that is the drug research, the patent exclusivity and the development of new and exciting drugs, biologics and other drugs that are really presenting new and innovative cures for people. So its really difficult, especially when we havent had any investigations or hearings to determine exactly what that causes or what the solution would be. Congressman tom reid from new york and i are the cochairs of the congressional diabetes caucus, and of course one of the drugs that has just sort of inexplicably skyrocketed in price is insulin. So weve sort of undertaken a little mini investigation of our own at using insulin as a case study to try to figure out how is it insulin which obviously every type one diabetic and many type two diabetics rely on, how is it that its suddenly spiked up in price. So what weve been doing, weve been systematically talking to representatives from every one of these Interest Groups that i just mentioned and of course its always someone elses fa t fault. What were trying to do is get a full picture and as i say, were trying to convince the chairman, greg walden of the full committee and also our respective subcommittee chairs to have a series of investigations and hearings, and we could use insulin pricing as an example, but its not so clear exactly what you do at this point. I think gene would probably agree. Yeah. Insulin is a good example of it but when you see some of the Market Forces that happen and i think we can agree on a bipartisan basis that we need to make sure that we dont see that kind of jump in price just because someone can go buy the patent. Again, that doesnt help the system. It just raises the price for the consumers. So as congress now appears to be moving towards a bipartisan fix of the Affordable Care act or at least some kind of bipartisan negotiation, what role does what role would you like to see pharmaceutical pricing play in some kind of next version of the aca . Is that something you address in that kind of legislation . I would hope thats where were going to go to. I know theres been a push in the senate for a bipartisanship. I did a one minute yesterday morning on the floor saying we dont have a democrat or republican solution but we need to sit down across the aisle and have an american solution for health care. That would be all encompassing. Obviously access is important. Where i come from, i want my folks to be able to go to some of the great medical facilities at the Texas Medical Center in houston, but they have to have some type of vehicle, whether it be through their employer, through the exchange or through medicaid. Again, one of my sticking points is that we shouldnt have allowed states not to take the whole medicaid. I know the Supreme Court decision. That wasnt in our bill. It was actually the senate bill, but in my district, 46,000 of my constituents would get medicaid if the state had expanded, 100 reimbursement for three years, 90 . Typically in texas our medicaid reimbursement is twothirds fed and onethird state. So 98 to 10 is really a good deal to serve that many more people. So access, but then we want to make sure they can get to those great facilities that we have. So maybe you have some information we dont have about bipartisan negotiations on the Affordable Care act, but i will say as gene mentioned, i worked with fred upton, the former chairman of energy and commerce, for three years to develop 21st century cures and gene and i both believe that the best legislation is bipartisan legislation. Weve been trying to convince our colleagues in the house to work in a bipartisan way on Health Care Reforms because we realize that the Affordable Care act, while its provided opportunities to millions of americans, it also needs improvement. And i identified ten areas where i think we could research it on a bipartisan way. One of them was Prescription Drug pricing. So far though, despite our many approaches, we have not seen any appetite on the part of the republicans in the house to work in a bipartisan way, which i think is unfortunate because i think all of these solutions will have to be bipartisan. And probably the best example, we can do it. 21st century cures in the house is overwhelmingly bipartisan. All of us work like diane works on diabetes with tom reid. John and i work on the next generation of antibiotics that we wanted to gain. In fact, with the legislation going to the senate, we were trying to see how we could jump start that medical research into that new antibioticresistant illnesses. Chairman burgess and i worked together on trauma care, so we can do it. We just need to look at it. We did it really great on cures but now with whats happened in the senate and i would hope we would do that really bipartisanly on how were going to provide health care to americans. Gotcha. Someone proposed requiring pharmaceutical companies to explain their drug pricing models. Is that something that would help the market . I think transparency is important, although we also know anyone who has a patent or they may not want to share some of it so they could have a knockoff coming on. But i think transparency and drug pricing so people will know and even the physicians will know that when theyre if they have an array of drugs for a certain illness, they would know this is, you know, the cost. But the goal should be you need to prescribe the most effective for your patient, and thats what doctors should do. But i think the transparency would help both on the end result but also for employers and unions who have plans. A couple of things i think we need to investigate in pursuit of this transparency is we need to investigate the current exclusivity rules and if theyre appropriate, because as gene says, we really want to encourage development of new therapies and new drugs. Some of those take years to develop and many, many hundreds of millions of dollars to develop. So we need to recognize that on the one hand, but on the other hand, we need to see if there are adequate generic drugs being developed that will give price competition, and we also need to have the transparency to see if the pricing really is in line with what these drugs cost to both research and to produce. Finding a legislative solution to that is not easy and you cant just take your magic wand and develop a formula or Something Like that. When we dont even have the information yet because we havent had it all goes back to the investigation and the hearings. I would be really loathe to start slating before we actually have that. Call me crazy but i think we should have the information before we actually legislate. Surprise surprise. I know, its crazy. Thats where i think it would really benefit. And its not a partisan issue because we all support the development of new drugs and therapies and we all support access for patients for those drugs and therapies. But from the insulin end, i know we have some new and very targeted and excellent insulins, but those arent going to do any good if the formulary doesnt offer those insulins and parents of diabetic children have to decide whether theyre going to spend hundreds or thousands of dollars a month because their Insurance Plan wont cover that insulin. The white house is reportedly working on an executive order to deal with drug prices. What would you like to see them do . I can hardly wait to see that. And what do you think theyll do . They dont call us first, believe it or not. I would like to see leadership out of the white house. But again, you cant jump from one issue every day to Something Else so you have to have some continuity. I think that would help us if we got that kind of leadership out of the white house to sit down and say, okay, lets see what we can do to get accomplish some of these goals. Again, its not going to be done in one session of congress. The cures took three years. Three years. And so its something we have to get started on and have buyin from everybody. Weve heard as well proposals to cut various regulations to speed generics or new drugs to market. Where do you see the balance between cutting the regulations to increase the access and protecting patients in the long run . Well, i think we need to look at both and cures is part of that. One of our issues with the fda was that it takes such a long period of time to do to get from the lab table to the bedside. Cures gave the fda over a period of five years half a billion dollars, but also to streamline and prioritize some of those pharmaceuticals that need to be on a fast track. Ill give one example. Fda can do it. When we had the ebola scare three years ago, there were u. S. Citizen doctors who were being treated and i asked one of the doctors, i said, what would happen if that doctor who was aware had the knowledge to do, if there was something and that yall could try that. And i was told it took the fda 24 hours to get permission for them to get permission to administer that. The sad part is they dont know if that pharmaceutical helped with the treatment or the survival but there just needs to be more tests on that. The fda can move, and we just want to make sure they take on some of the more terrible illnesses, and obviously diabetes is one of them that costs so much. But also we have the breakthrough therapies bill that we passed some years ago. And thats been extremely successful in helping Companies Get therapies on a fast track at the fda for approval and its targeted at therapies for diseases that we dont have treatments for. But i think encouragement of generics is always really important because that does give the competition as i said earlier, we really have two issues. One of them is that some of the its really easy to develop a generic for aspirin. Its a lot harderiologic therap have to develop equivalent generic solutions. Secondly, some of the expense of treatments are being developed for diseases that affect a relatively small population, not really Rare Diseases but a relatively small population. And so its economically not feasible to develop a generic, and we need to figure out how to incentivize competition in those areas too. On the one hand already were incentivizing the development of any treatment for some of these diseases, and we have to figure out how we can do the same so we can have competition. Ive got one more and then were going to turn to the audience, but congressman, you mentioned exclusivity and thats obviously a major part of this whole conversation. What do you do about the life span of a patent and just how long one company can keep a stranglehold on one drug . This is a very lengthy and complex conversation that we had when we did 21st century cures. What we need to try to do is find that sweet spot where youre giving patent exclusivity for a period of time that really incentivizes and encourages people to develop these therapies. On the other hand, you want to make sure that its not so long that people essentially get a monopoly over that drug and then they have no incentive to keep the price low. Study after study has shown where youve got a generic alternative that brings the price down. So we continue to work and rework those. Theres a number of patent exclusivity provisions in law right now. We had a very small one in 21st century cures but theres that continuing dialogue and pressure around that. Again, theres no Silver Bullet around that. As members of congress we have two levers to increase funding, and we need both public funding for nih but the private sector funding from pharmaceuticals, exclusivity is one of those levers but just federal money going into nih and you have to be careful because both of them are so sensitive. Its hard to get money but its also a lot of members have some real concern about the use of the exclusivity. Again, if you want those new breakthrough drugs, thats the only two levers we have. Come up with money or longer patents. All right, lets open it up to questions from the audience. We have a couple of people with microphones here. Right up here in front. Theres a question right here. Question right here in front. Thank you. I think its very important the effort to reduce costs on the Prescription Drugs but i want to mention there is another important way that you should consid consider. One is hospitalization and Health Providers or e. R. And whoever sends somebody to the hospital to see the doctors when they are unnecessary to do so. Not only they are forced to use those prescriptions or hospital faciliti facilities, also increasing the medical costs. If you can really take your effort to this. Its very important and everybody seems to ignore it. Well, you know, youre right and of course if we repealed the Affordable Care act, that would only exacerbate that problem quite a bit and throw us back to a situation where people felt people who didnt have insurance felt like they had to go to the hospital for treatment. But youre exactly right, when people who dont need that treatment come to the hospital, then that only increases costs. One thing that weve been seeing lately in the diabetes realm is people who cant afford to get their insulin because the prices in their formularies have gone up so much, they just are going over to the hospital. You know, they go into diabetic shock and go to the hospital to get their insulin. That seems like a very poor way to treat diabetes to me. In fact, its a poor way to treat anything. I should not be in the emergency room with my sinus infection. Thats why if you have a huge number of uninsured folks, thats where theyre going to go because they dont have any other option except show up in an emergency room. One more question up here. Hi. Im wondering notwithstanding your comments about the need for hearings and investigations before legislating, are there any solutions that you see Congressional Republicans being able to get behind and if Congressional Republicans cant get behind drug pricing is it up to the executive branch to be pursuing administrative fixes to the problem . I think there are going to be some Congressional Republicans here in a little while. I suggest you ask them that. I will say one thing that gene and i both fought for is the ability of the secretary of hhs to negotiate Prescription Drug prices under Medicare Part d. We fought hard for that when we passed that law in 2005, 2006. And i think that that would really help. Number one, it would help bring some transparency. And number two, it would send waves throughout the whole syst system if you let the secretary negotiate Prescription Drug prices. Like diane said, you have to have two groups to sit down and work and we have a paradigm for it, whether it be 21st century cures or other things we worked across party lines. Thats where we need to get started on health care in general but also just particular items like drug pricing. One last question from the audience. If not then ill take one more shot. What about an agency like the v. A. . The v. A. Buys so many Prescription Drugs, what role can they play in sort of forcing the industrys hand, and should they . The v. A. Negotiates for pharmaceutica pharmaceuticals. Thats the one federal agency that can do it, although i have a district in houston that has refineries and chemicals plants and believe me, the companies negotiate for those certainly pharmaceuticals. So i think negotiation would be one of the things that, like diane said, but thats one way we can do it is do like the v. A. Does. When the Prescription Drug plan passed in 03, that wasnt part of it. That was part of the problem. All right, great. Congressman gene green, congresswoman diane degette, thank you for being here [ applause ] thank you so much. Rita is staying back for our next conversation. Id like to call scott gottlieb, the new commissioner of the food and drug administration. Dr. Gottlieb has indicated that the fda could play a role in tackling the price of Prescription Drugs by encouraging competition. We look forward to hearing from him. Welcome, dr. Gottlieb. Reid, back over to you. Thank you so much for being here. Thanks for having me. Congrats on the new job. Thank you. Have you found all the light switches and all that . This is my third time at fda but my first time in the new facility. Its a lot different. I can imagine its your first time in the big chair. Thats true too. Great. Lets start with, what role do you see the fda playing in the pharmaceutical market . We have a marketbased system for pricing drugs in the u. S. And we do that as a way to make sure were giving proper awards to innovators and entrepreneurs but in order for a marketbased system to work, in my view, we need to have true competition. I think that there are places in the pharmaceutical market right now where were not seeing the competition that congress intended when it put in place the architecture for the modern system for drug pricing. Thats what were focused on at fda. There are places where we could affect the amount of competition in the market with both generic drugs and also with respect to new drugs. We see places, particularly on the generic drug side, where i think that there are market failures because people are either taking advantage of certain regulations in ways it wasnt intended or our own regulations arent working as we intended them to in order to create the kind of competition that congress intended when Congress Passed the original act. For example, there are places with respect to fda regulations where you see certain drugs have monopolies simply because theyre large and we dont have a good framework for demonstrating sameness. Those are complex drugs, in particular, drugs that are either complex in that they cant be measured in the blood easily or they act locally on tissue so the traditional ways for demonstrating sameness through the approval process dont apply, dont work well with those drugs. I think thats where were focused, on places where we see competition that should be happening in the market, not happening because there are failures in the system. How do you fix that sort of the factor of people taking advantage of the regulations as written . Do you have to write a whole new set of regulations to plug those loopholes . I think that its a little bit of ive said i dont want to be in the business of playing whack amole with companies, but when i look at the market and i look for the places where i think that there are rules that are being, for lack of a better word, gamed in certain ways, its a dispirit set of factors and i think we need to address them one at a time. For example, we see situations where Branded Companies use the plans that we put in place to ensure the safety of drugs as ways to deny Generic Companies the ability to get access to the samples and doses they need in order to create their Generic Companies to do the studies to apply to the fda for approval even though the company is willing to pay fair market value. Branded companies are using tactics to prevent them from getting access. Thats clearly not what congress intended. So i think that there are things we can do to address that. Another thing that stalls generic entry, one of the things you want is theres a Management Plan in place around the use of certain drugs and a generic drug comes into that market you want the drug to have the same Risk Management architects and all the companies to be using the same system to decrease the burden of providers. Thats whats provided for in the law but sometimes those negotiations over entering into the same system because the Branded Company owns the system they have to allow the generic entry into that system or come to some compromise, sometimes the negotiations over that become protracted. Thats another situation where thats being used potentially to stall generic entry and were going to look at whether or not we can step in and make a decisions of whether or not to cut off those negotiations and allow the Generic Companies to go their own way. We want to look at policy changes to try to create more competition sooner. But theres a number of these areas where we see this happening. Its also happening on the commercial side. We talk about the rems being an impediment but probably the biggest impediment is that in contracts that the Branded Companies have with distributors, they have exclusionary language that prevent the Intermediary Companies to sell to Generic Companies. That makes it hard for the Generic Companies so sell. That doesnt seem to make sense. If a Generic Company wants to enter the market and is willing to pay fair market value, they should be able to purchase it like anyone else. There shouldnt be previsions that prevent them from getting access. Thats where i think we can do something on the fda side and work with our partners as well to try to address some of those other restrictions in the market. Youve laid out the drug competition action plan. Tell us about that. Well, its a multipart plan. Weve laid out certain elements of it so far to try to address exactly what im talking about here. Were looking at places where we see Branded Companies gaming our rules. Were looking at the issues around the complex drugs. Were also looking at issues related to the ordinary review process, these sort of every day generic drug review processes. If you look historically, generic drugs have gone through four cycles before they reach approval, an average of 48 months. Weve committed to approve in 8 to 10 months depending on the application. Thats going to allow generic drugs to come to the market sooner and also end what i call a regulatory ash tragedy where speculators can come in and buy off a low volume generic drug thats not used a lot and maybe has one competitor in the market, jack up the price and know that its going to take fda up to four years to get another generic competitor into the market. We need to make sure that people cant take advantage of the system and take advantage of that. Were publishing a list of all the situations where theres no competition to branded drugs. Were going to prioritize situations where theres a lack of competitors so people will know markets where theres a lack of competitors and were going to commit to reviewing generic drugs more quickly and get those review times down so people know that if they come into a market and buy off a low volume generic drug and try to raise the price out of proportion of what seems to be tethered to any reasonable notion of value, that price is going to attract competitors into the market quickly and those competitors will come to market quickly, not four years but hopefully 6 months or 8 months so youre not going to have that long opportunity for an ar ba tragedy. You see less and less of that activity now but you see some of it and obviously theres been commentators who have felt that its abusive. I think it is an important principle at stake here that the high price is attracting competitors, so thats good. Thats the market functioning but that competition should come onto the market much sooner. Talk a little bit about the office of generic drugs. You revised some of author procedures. How do you want to see them operating in the future . Theyve been operating very well thanks to the user fee. Now in the Second Generation of user fee related to generic drugs. Its hopefully going to pass some time very soon. That office is much better resourced than historically. I remember a time when i was fda that office was his toiricily funded through Budget Authority. Whatever there were cuts across the agency, the parts of the agency that were protected by user fees wouldnt get caught in the parts of the agency that Budget Authority would. Generic drugs had either not even seen increases or cuts. I think its in much better shape now. Its in excellent management. We announced this week some changes in the procedures for how they are going to review applications. We put in place putting in place a map which is basically guidance to our viewers about streamlining the review process, creating a template to make it more sort of consistent in how drugs get reviewed and also putting out guidance to manufacturers, trying to help Generic Drug Companies learn about what some of the common problems are that we see in applications. The problem on the generic drug side and on the new drug side as well for a while is that the applications go through a lot of cycles. When they come in, they dont come in in a form where they can be approved on the first cycle. This was something we saw on a f cycles. This was something we saw on the new drug side. And we made an effort to try multiple cycle reviews, and we were able to do that. Were going to be focusing a lot of our activity on the review function, trying to cut down multiple cycle reviews. Thats the goal. What kind of backlog on generics does fda still face . I dont know the exact number on the backlog because weve been working it off. Weve committed were going to work the applications off. So were working through the backlog i think well hit that goal. Im very confident well hit that goal. The hope is we can get to a steady state. The reality is the number of applications were receiving and improving is increasing. Weve had a Record Number of approvals last month on the generic drug side. And we hope that continues. But were so confident well get to a steady state where we arent still building up a bag log. I think were close to that right now. And where do you see a pallance between cutting regulations and protecting the public . I dont think its a choice between more regulation or more safety. I think that you know we could have a situation where we have a smart regulation and efficient regulation that alos us to get more drugs on the market and efficiently and making sure we improve Patient Safety and improving the risks and benefits associated with drugs. And thats another part of what were doing. Weve had an invasion plan that weve been reviewing is to try to look at places across the agency but especially on a new drug side, we can have them place better framework for looking at risk benefit, safety and efficacy, better framework of particular new areas of technology and make sure we have in place the right policies to be approving drugs more efficiently against more modern scientific standards. For example, one of the values weve committed to is looking at so theres certain drugs that target certain systems of disease. Its driven by the same molecular signature. So if a drug targets the underlying molecular driver of the cancer, do you have to prove efficacy in a tumor teep. Or can you just prove it workess against tumors with this particular molecular driver . And were going to allow approvals based on molecular driver rather than each study, each organ. Which obviously is going to make the Development Process more efficient. We have a few patients with the liver tumors, patient piegss with tumors in lung and get it approved rather quickly. Thats an example where i think were look at sort of modern science and the way drugs are being developed today and looking at how we can adapt to modern standards in a more efficient way. And remember that new drugs ultimately and this is something i learned in my private life as a venture capitalist i was never in a position to price drugs so i dont know all that go into that, but certainly the costs of capital bear some relationship to the Product Price youre trying to develop. And we can ultimately impact how drugs need to be priced or eventual are are priced in the market. And the cost of capital isnt just the director cost of developing a product. We know its also the time cost of the capital. In fact the biggest driver if you look at models of how these decisions get made, the biggest driver is often time and uncertainty, not the direct cause. Because direct cause if theyre understood, they can be financed. Uncertainty and risk can be financed. So thats what entrepreneurs tend to underestimate. The fda has targeted this little niche market of older drugs with high costs. Why are those a priority . Well, older drugs with high costs so these are complex drugs youre talking about . This another priority because this is whole class of drugs only because of the complexity of trying to demonstrate saying this for those drugs. So these complex drugs and these are things like meet fr dose inhalers or things inhaled or an oral drug you swallow but acts locally on the gut or drugs harder to measure on the gut so you cant do a measure of the availability of the drug in the blood. These drugs are basically drugs being sold as branded drugs at branded drug prices. To me, thats a failure of regulation. We have to come up with the regulatory standards that allow those drugs to go through the generic process. Different kinds of formilations that allow drugs to have certain attributes that benefit patients. It works by basically you have the old pills so it was crafted 30 something years ago where most drugs were pills, not chemicals whch thayou swallowed their pill it gets into the blood the same amount of time and stays and itll have the same effect. And they got to target organ and they worked. But when a drug is acting locally on tights, a topical drug or an eye drop an inhaled drug or it it cant be easily measured in the blood because its in some complex mixture, the old process doesnt work so well. So the question is do we need a new statutory language to create a new pathway for these drugs, perhaps. But i think theres a new thing the fda can do. So hopefully well eliminate this problem Going Forward by putting out the standards how complex drugs can prove sameness in these settings. This isnt a trivial amount of spending. Its billions of dollars a year in drug spending that should be subject to competition but isnt because of our rules or lack of rules. Again, as policymaker thats where i want to focus. For one reason or another usually because of policy failure, because of market d distions, were not seeing it. Is it the fdas role or should it be the fdas role to increase transparency in the pharmaceutical market . Well, thats sort of a broad question. I think we are committing transparency in the pharmaceutical market. We will often send a letter to the Branded Company saying theres no reason why you cant sell it to them. With the rems we say with the rems you have in place weve reviewed the Generic Companies biequivalence study plan and theyre going to maintain custody of the drug in an appropriate fashion and you can sell it to them. So those letters go to it Branded Company. Were look if we can make them public, and i think we can. So that will provide public transparency around situations where we believe because were sending a letter there might be an impediment to the Generic Company get access to the doses they need to do biquivalency studies. I think that transparency could be useful in the market to effect some of this behavior. All right. Lets open up to questions. Microphone coming right to you. Hi, i work for prime therapeutics, which is pbm. And where theres competition, we can drive down costs. And theres been a lot of great prioritization of breakthrough therapies. I think one of the challenges that we in the market generally has is sometimes theres less of a priority for what in the old days were called b2 drugs. You get that competition on the branded side and have several drulgs competing on the opposite class. Is there any way of looking at that and getting it for a particular action or condition . Therell be multiple drugs that will be prioritized. And this is Something Congress can look at as well, trying to extend breakthrough designation to other drugs in a category. But as far as sort of what we refer to me too drugs, i think its not necessarily a situation where fda isnt prioritizing applications. Were referring to rigorous time line deadlines right now. And i personally dent see a priority of applications i think the challenge that i see is more of a commercial challenge, which is companies are more reluctant to be the second, third, or fourth drug in a category. And i think thats more commercially driven than a regulatory issue. And theres down sides to that. And to your point, you see less competition within some of these categories. And also its important to have therapeutic variety. So even though a drug is targeted to the same condition, sometimes patients do have a deferential response. We know that. All the, any other questions . Got one right up here. Sorry, microphones getting there. Dont worry. Here we go. Hi, so i was wondering if you could walk through why fda hasnt publicized those rems letters previously, what issues there are there . I know previously fda hasnt been able to share kmachl when a Brand Company cant reach a shared rems. Im wondering if theres particular legal issues you all participate possibly running into when you try to share these letters. Or if they are even public if the basic information, would that sort of information be made public . Remember with these letters in particular im talking about, these letters are being sent to the Brand Company. So were making the Brand Company aware of the fact but were not making the public aware. So if theres Conference Information there, its already been shared with the third party. Were looking at the issue of whether or not theres confidential confirmation in any of these letters and how we would redact that. I think theres more we can make public. A lot of these come down to question on how much resource you would spend redacting certain ccr comp and how much risk you have to take. We cant be doing these things just because we certainly dont do these things a papublic shaming vehicle. I think we do them when we have a Public Health rationale. And if we a strong Public Health rationale of taking on the burden, i think we have to look long and hard at doing that. One more question. Anybody in theba back . All right, we got one right back here. Hi, im from angen. And i was thinking if larger pharmaceutical companies are spending hundreds and thousands of dollars to put new drug into the market and then generic drugs come in more quickly, are these Companies Going to see a return on investment and is this going to impede new drug innovation in the future . Well, im not looking to appropriate intellectual property. Companies come to the market with an expectation of what their intellectual property is. They make expectations to develop a new product based on how much composition they have to protect products. They make economic decisions whether or not theyre going to allocate the capital to make the investments subject to what they have. The Competition Congress fully intended under their debate when it expires, comes to market and people arent using our own rules in particular to extend the market past the point its intended. And thats what happened in some cases. People are taking advantage of the rules we created for another purpose in a way to extend other practice. And its having an unfortunate effect of its not intending to do this but having an unfortunate effect. If in fact, were at a situation with the cost of drug development, and your point is welltaken, the enormous Capital Investment is too much as expected to the ability to recoup those investments given what the patent life is, the average patent life is. Thats something for congress to comp template, not something for us to contemplate. We have to do our job. And oo our job to make sure these drugs are subject to generic competition and once we can legally approve a generic product. All right. Thank you so much for being here. We really appreciate it. Thanks for having me. Senator bill casied is a member of the senate health, labor welcome senator cassidy and over to you, reed. Thank you for being here, senator. We really appreciate it. The last 48, 72 hours has been pretty intense up on capitol hill. Lets start with this. What are the next steps for addressing the aca . I didnt mean that as a discouragement because actually i came away very encouraged last night. Last night the president said replace over repeal. He said that over and over again. He wants something done. And its clear theyre willing to do more to achieve something. That said, now what we proposed is that you giv the talking point, if you will, the power back to the patient, power back to it state. She who controls the money typically has the power. So if you return it to the state and the patient, the dollars then she has the power, the patient has the power. So how can she back rent . Can we take all these federal dollars and dispense it back to the state with guidelines with some provisions such as for example, you can use Health Savings accounts to pay for premiums which allows state a funding account for someone to purchase a premium of their choice. Increasing tauchl titian along Insurance Companies and getting federal government out of micromanaging federal insurance. We think thats a good approach, and were getting some traction on that. What role does congress have to pay in increasing transparency over drug prices . So youre making a great case that transparency and the lack of transparency and contributing to the rise. And i think thats fair. For example, point of sale rebates, the pbm negotiates a short discount, the Insurance Company gets it. But when a patient is in herductible, she does not get the discount. So shes paying three times more for a drug than is the contractual price. It may be that congress has to mandate that those patients get point of sale rebates. That has lots of implications. But agreed to what shes paying outofpocket more rapidly pushes her to Medicare Part d. So not only is she paying but the taxpayer is paying. So it goes up dramatically theres a report that lays it out. Secondly, i think my states one of the few to do this, there is at least one pbm, which puts a gag order on the pharmacist. In some cases its cheaper for the patient to pay outofpocket than it is for her to go low her benefit. She pays more under her benefit. But the pharmacist is gagged. And if he tells the patient, listen, if you pay cash you get a better price, he loses the contract of the pbm. Now, not all do that but one does that. And our state, louisiana, theres a law passed in which you cannot have a contract again, transparency of information benefits the patient. Were all about transparency. So how does transparency about lowering drug prices impacts funding by medical research. I dont know if that impacts funding of medical research. Im not sure its going to have a whole lot of traction. Again, dr. Gotlieb spoke earlier. Im afraid if we start consfisicating peoples intellectual property, itll chill that investment and those needed cures that multiimately will decrease cost in our society and outcomes for patients may again be chilled. As Congress Starts to address the aca once again and at least senator mcconnell has suggested there could be some bipartisan discussions going on, are drug prices part of that discussion . Is that part of the aca thats going to be fixed . I think thats something that needs to be separate. Were not touching that with the Obamacare Repeal replace. Number two, we have a hearing on drug pricing. And what broke out was a lot of frustration on the democratic side about the process related to the appeal of the aca. And ended up having a great panel but a missed opportunity to explore what could be done. So i think until we get this repeal, replace behind us, itll be difficult to have a formal theres a lot of things we agree on. Can be work torgt on those points of agreement, setting aside those which we disagree to come to some Common Ground . The white house is working on executive order that would address drug prices. What do you want to see outofthe president . Obviously, dr. Gotlieb is going to employ some of that. But theres an expectation which delays the approval of certain drugs merchandise so we want to dress that. The Supreme Court i think just this past week made a ruling that would bring generic biologs at least six months earlier. Thats a good thing. So theres no one Silver Bullet for drug pricing or for price transparency. But theres a lot of things you can do on the margin which collectively make a difference. Where ss the balance, though, between cutting regulations and cutting the time regulation is approved and protecting the public . So when you approach drug pricing, you have to kind of setup a metric. And this is what we do in my office is we analyze this. We look at as generic, excuse me small molecule especiallity drug versus brand name and generic. And really what you do is different in each segment of this. And were using specialty drug. If you look at that, then you can break it down. Lets take a generic, which has no competitors in the United States and because of the absence of competition, theyve jacked up the price. An antibiotic is 50 years old, they buy it over seas, and they used to pay 50 cents ask now they pay 13. Someone may dispute that, but that is at its relating to me. But in this case we should globalize the market. Theres a plant in india producing the active pharmaceutical ingredient for the drug thats sold in the United States as well as the drug thats sold in the united kingdom. And i can tell you we already have a memorandum of understanding between the fda and eu equivalent that says if one certifies a plant, then the other will accept that certification. Should we say and i think we should that for this generic small molecule that theres an adequate supply chain for integrity for a drug going to the eu and the United States, that we would allow sale of a drug from here to there. You could imagine walmart going to france, buying a lot of a certain drug which only had one supplier here, bringing it back and selling it. Weve used Market Forces to create competition as opposed to the heavy hand of government regulation. I think thats a way to go. That is an example. And again, you have to have this approach. And ill say it once more, small name, specialty, brand, and generic. We have dr. Gotlieb here. What have you seen . Theres a lot he can do either by transparency of intept and or by trimming processes to improve through put. Theres been rules that have been held up granted im sure theyre complicated rules to get right. But if implemented would dramatically shorten introduction of generic competitors. Thats a good thing. Once you get a jaw narric competitor, prices begin to plummet. So i think gotlieb will bring a lot of energy and insight into the this job. Right. Ive got a couple more and then well turn it over to questions from the audience. But what role i asked congressman green this, an agency like the va which so many pharmaceuticals negotiate certain price, what role do they have in bringing prices down in the market . Well, it certainly shows its possible. I always said it would be quite trumpian if President Trump looked and said va, medicaid, tricare, you name it, we buy 80 of this particular drug, maybe we should negotiate. And using that monoxomy position to negotiate whichever priced he wished. Ill tell you that would save billions in the short run but it would quell investment in the long run. And President Trump is a business guy, so hes going to pick up on that. On the other hand, could you imagine him doing that . Absolutely. So the va shows you whats possible in that position and it may encourage our president to go in a direction of strengthenening that position even more. All right, any questions let me just say one thing. Of course. Let me just say the high price of drug let me go back to the patient. It should be about the patient. Pharmaceutical companies do the research that keep us all healthier. In this room there are people alive because of advances in pharmaceuticals over the last 30 years. I always use the example of peptic ulcer disease. And then along came and we never do that surgery anymore. Similar theres someone in this room with crones disease and people with crones disease now are on infusion and they never need that surgery. There are some people who deny lifesaving drugs because of the price of drugs. The Medicaid Programs cannot afford the medicine to treat patients as rapidly as they would wish in order to save peoples lives. That is just a reality. And we have the also recognize that prices of drugs effectively deny treatment to someone who need it, the va success of driving down price is good for patients, and thats something we have to think seriously about. All right, any questions from our audience . I see one over here. There we go. Hi, carl and i guess i have to take a little issue, senator, unfortunately with what you just said about the hepatitis c curative drugs. And you mentioned the fda is a great example. And i think theyre down to around 25,000 for a cure. But for medicaid its around the same price because of the rebates, competition, and discounts. And so we feel that, you know, this is 24, 20,000 for a cure and that will save money down the road. And theres a lot of drugs that are more expensive. So we feel the Medicaid Program should be able and if you feel thats normal, thats not the reality. And i dont mean to be rude. But if you look across the nation, if you say most of the cost by the federal government, technically yes. But if you look at the burden of those with help c because its disproportionalt to those on medicaid, it is quite a figure. Most state governments cannot suddenly put up that amount of money. We worked on a spreadsheet reported in the the Washington Post and we put up whats is our disease prevalence in louisiana, what would be the cost of therapy. If we treated everybody we possibly could in the first four years, we would actually save money in the longterm because you would have fewer trance plant, hepatitis c, et cetera. But youve got to treat them up front. Two things i looked at one i called the mortgage way of financing and the other the flet fliks subscription way of financing. In the mortgage youre saying were going to treat everybody we can up front for the next four years and pay off everyone over 30. Because we realize the Medicaid Savings Program over 30. And this way we can budget for those savings, so the savings would pay for it. That would be the mortgage. The Netflix Subscription is that youd pay a certain amount to whoever, and then you treat as many people as you possibly can. And so the company would be guaranteed some reasonably okay this is how much we expect to get from you over the normal course of events. So you can treat as many as you wish. So maybe we dont need to lower the cost but do need to come up with alternative ways of financing. Because i can tell you the price tag of some medicines is absolutely limitic to therapy. It totally is. I dont say it to be rude because you are wellmeaning. But so am i and that is the reality of the situation. All right. Weve run out of time. Thank you, senator cassidy. Thank you. Appreciate it. Next up were going to be rethinking pricing. How are stakeholders in the Health Care Industry finding ways to address the rising costs of medicines, what kind of collaboration taking place and what can patients expect . Taking the stage the Senior Vice President of Health Policy at the arista economy, the Senior Vice President and chief medical officer, and the chairman and founder of cancer research. The hills policy editor kim dixon will be leading this conversation. Hi, thanks very much for coming. So weve had a few discussions that touched on some of the challenges that we face with skirocketing drug costs. I know dr. Gotlieb talked about things going on the regulatory side. But i think there might be the different opinions on what congress can do. So he talked about competition, speeding up drug approvals, getting rid of some of the regulatory hurdles. What more can be done i think c. C. Had some opinions. Well, more observations, kim. I have to remark ive been in d. C. For many, many years. And i think that commissioner g g gotlieb is off to significant start. He mentioned this morning what may seem like a small thing to lay people, which getting samples to Generic Companies. But its very significant. And its been a huge roadblock. So if he can have success in areas like that, we believe it really will spur some competition and start to bring down prices. Ill just toss out on the table one baby step for congress, which would be a bipartisan bill right now for senators baldwin and mccain on transparency. And transparency is not going to solve our drug pricing problem by any means whatsoever. But getting information to the public would sure be a nice start. Right. R d costs are controversial. Why dont you talk about what you think about that bill and the idea of more transparency in r d . Sure. What id like to do first is take an opportunity to put cost in context and a few figures relative in 2016 retail and physician administered pharmacy spending was roughly 14 . That figure is expected to continue roughly the same percentage through the next decade. Medicine spending growth, roughly 3 to 5 in 2016. Brand net prices, 3. 5 . Lilies increase in 2016 was 3. 20 . And just to put those in context just as it relates to the over all spend i think is important. And what has occurred over the last number of years in Health Savings accounts, hras and individuals are facing more pressure in terms of deductibles, copays and outofpocket spending is increased a significant percentage since 2013. And as congress wrestles with headache, the Affordable Care act and drug pricing, drug spending i think one of the areas they can focus on is the outofpocket expense. And senator cassidy spoke to that to some extent on transparency lily issued a report earlier this year showing over a fiveyear period the list in net price and our agigate net discount, which has almost increased to 55 . As ive looked at transparency legislation primarily in the states where a number of pieces of legislation last year in this have been introduced and moved through the legislative process, while theyre wellintentioned the challenge is they dont do anything to address patients outofpocket expense today. In some instances there are anticompetitive provisions that would create some closure and dont really speak to had value of medicines. That would be my take on some of the legislation. But we want to Work Together in terms of that goal of transparency, absolutely. Did you want to jump in, allen . Yeah, but first a personal thank you for inviting me to do this. But this is a vexing problem because weave we have the best of all worlds today. On the other hand, if these drugs if the system cant sustain it and patients cant afford it, it will have no benefits to the patient. We are challenged by keeping up this pipeline and competition and lifesaving drugs. But we are also challenged by the costs. Pie opinion is speeding up generics and transparency and all these things being recommended, which are important, will not fix a systemic problem. So transparency, speeding up generics not enough . I mean what would this bipartisan solution youll have to look at the whole health care eke slgs. You have to look at where patients are getting treated. You have, for example, in my world where we have innovator drugs that are personalized, you have to make sure the diagnostics are working, patients being treated. There are many studies that show that many patients are being treated and not given the right drug. So its a systemic issue and a complex issue because we want to keep innovation. But if patients dont have access or cant afford the drugs, it will not benefit the patient. Theres this different from the pharmaceutical industry that drug prices are really not rising. And maybe they arent as a whole in the eke system, but we do know there are specialty drugs, awesome drugs that are saving peoples live, those are rising at least within certain classes. And those are the headline numbers we see. So i dont know i mean, bill, if you addressed specifically r d cost and, you know, would the industry be willing to give more information on how much it cost to develop a drug . Again, speaking to some of the transparency legislation when you look at what is introduced and how it progresses through the legislative process, the challenge of looking at it from a byproduct process elevates some of that concern. If i could add to that, let me thank everybody for joining the hill in this panel. I didnt switch jobs. We switched names. So just to provide a little bit of context there. And one of the reasons we did that was in addition to representing the interest of generic it will shock you to hear me associate myself with all of those remarks, we also represent biosimilars that have the potential to reap enormous benefit. The only thing i wanted to up frn say was not all drug prices are going up. Generic prices are actually going down. There is price deflation in the over all generic marketplace. Now, the media and others will often highlight a single incident of a case that is alleged to have skirocketing prices or price gouging in two cases that happened inlast two summers each, neither one of those products have been traditionally categorized as a generic. I just got the word no out before this reporter took me to test and said how can you defend them. Theres a lot of confusion in the marketplace, and i think one of the things we have to do and cici touched on it. Theres a lot of people talking about slugzs to Prescription Drug cost. There are lot of agencies that are actually taking meaningful action to doing among other things, enhancing competition. He is sort of the exception to the rule. He has the potential to be transformative. While its good for the marketplace, its good for patients. I think no matter who you think is responsible for why we are where we are in the drug pricing debate right now, theres a lot of finger pointing going on. You know, the reality is what more and more people are coalescing around key component is by Market Competition and nowhere is that more prevalent than increasing competition for generics. Competition is a good thing. And i think the challenge when you look big numbers in large groups of people is the individual who takes his specific drug. That drug could be very expensive, which was pointed out on the panel. And some of these drugs are very difficult for people to afford. So where i think we all come in and Work Together specifically in the pbm industry is to provide the mechanisms to work with our partners and pharmaceutical companies to evaluate if the drugs actually provide value, which is important more so today and to use our systems to drive to leer cost alternatives when those are appropriate and certainly to generic products when theyre the most costeffective. I really do think in a complicated system it requires fr on the pharmaceutical companies, certainly the pharmacy benefit managers that have systems that allow competition dr. Gotlieb talks about. And id like to complement that the Solutions Lie in collaborations, how we can Work Together in partnership to pursue Experimental Solutions or value based agreements or contractual relationships and speeding generics to market with partnership with the fda. I think were in agreement in terms of that. , you know, i think the competition is incredibly important. And even in the innovative drugs if you look at whats going on right now in immunotherapy, i think we have at least five, drugs all going to be used in combination. They all have to be specific to a biomarker. And Patient Population that receives these drugs has to get the right one for them. So its evolving. On the other hand, as i said earlier, if the copays are high, if they dont have the right diagnostic, the right health care, it wont benefit the beige. And if they cant afford it, its of no value. So we have to preserve invasion, presever patient choice, Patient Outcomes and figure out how to pay for it, and this is hard. Its kind of mother hood and apple pie right now. We all want value, deliver value, hide value where and its great. Im a valuable person. Youre all valuable people. But lets get real here, right . Insulin, valuable. Incredibly valuable, right . By 2015 1 in 3 americans will have diabetes. Just think about the implications of that for our society. Now, our Incredible Team at achp went and pulled the pricing trend of the top seven insulin products. What happened with them between 2010 and 2015 . Across the board the increases in those products ranged from 93 to 325 . And insulin has not changed. Not one bit. So whats going on there, and how are all of these people with diabetes going to afford this . How is our society going to afford this . I agree with that point so much. And i think that, you know, we have a tendency to talk about components in isolation. So when you look at the dynamic that you just pointed out, you would expect the portion that a patient pays to increase as well with the total price that society pays for a product. So i think that its very hard to point to, you know, a specific piece. Certainly with the members paying as a part of it. But its hard to say that the total price of the product, as you pointed out, is not an issue either. General, when we had our call from the employer interview, you said theres been a change in the last few years i mean how do you keep that momentum going, and what specifically it sounds like youre all agreeing, sort of. What specifically do you see happening or could happen next year given the political environment on the hill . Well, nothings going to happen. That is cold. Dont sugar coat it. I will start by saying employers pay about 80 of the health care of the people we ensure. Not just the people who work for us, but sometimes their families. So wee bearing the brunt of these cost increases. I dont think youd find a single employer whod want to see a layoff notice go to the good men and women of the fda. We must fund the fda. At the same time when guess says, well, in the next five years there will be one bill and one bill only that talks about drugs thats a pass piece legislation, lets do that and talk about drug prices later, that is washington talk and not real talk. Real talk is were going to miss the one opportunity we have to do a must mean and we have to do hearings. And i love hearings. People ask questions and theres awesome witnesses and interesting conversation. And usually it ends up producing nothing. So right now were going to have to focus on what can we do through the administration, working on what can we do through our pbm patterns, getting Drug Companies to finally have some skin in the game, and at the same time government is even in the way of that. We have pbms and Drug Companies trying to do the same thing. And its creating problemseraltied to stark law and kick backs, things where the government looked at a few years ago and said this is complicated, lets find less to do. But were worried. Our costs are going up at an unsustainable rate. And when i hear things well its not the cost of the matters, its the copay, no its the cost of the drug that matters. Every time we have a conversation about drug costs, everyone does one of these. Say say oh, its the supply chain, the middlealman. And others say its the cost to the companies that theyre straight up buying them. Last people want to jump in. We can go down the line, i guess. Just go to the podium. Ill be quick. Id like to agree strongly in part and disagree respectfully in part with these comments. I agree with you on the lost opportunity for user fee negotiations. I think unfortunately washington is what it is as we all cloe know. And dont underestimate some of the forces that dont want to attach that discussion to it. At the same time, there will be vehicles later through the area and tax extenders. So there will be vehicles for which the federal government will need to find money. A lot of people on both sides of the aisle campaigned on this issue including the president of the United States. And if we come through a cycle, and we all know 2017 a better year for enacting legislation that 2018 will be, if nothing meaningful is done in this space, then i think the folks who ran on it, right, in a media savvy world are going to be reminded about that fact nonstop through the 2018 midterm cycle. So i think one of the things we have to focus on is where can we actually seize the opportunity for alignment. If this was a simple solution, we would have found out, we might not be here talking today. There are things, additional things that congress can do short of completely disrupting the market and making the industry over all a regerating utility, to increase competition. And there are plenty of incentives that would allow for that type of competition to be the reality is, and ill just speak for the generics on the last point, generic utilization is up. Generic revenue is down 15 . And the reason for that in many ways is the uber level in the marketplace. One of the challenges is theres been an incredible amount of consolidation in the whole chain. To expect 10, 12, 15 Generic Company tuesday be competing on price when there are so few perchers in that market is just something we have toel factor. You get there now in three to four generics in the marketplace. So when it works and funks, its driving an astronomic amount of functions, so we have a lot to fix. We also need to make sure we dont disrupt the mechanics that are actually driving that level of savings. So when we talk about drugs, were not talking about a car. To take a car from here to k street, you can take an ush, walk and youre going to get there. When youre talk about medicines drugs targeted to a specific population, thats more complicated. Because the patient if they get the wrong drug and its cheaper, it isnt going to help them. They have to get the treatment that is with the validated diagnostic. Were doing master protocols in rare populations were doing the long map master protocol. Some of our tumors are 2 , 5 of the pop laegz. If you find these patients screened inefficiently, 80 wers, 90 wont get the wrong drug. Were now going to deal with combinations. This is going to get proprietary complex. How we balance these issues are going to be very challenging. Eventually were going to have a lot smaller population. Quality of life is really important. Id like go ahead. Ill speak next. I agree with my colleagues on the panel. The perspective i want to make sure the audience leaves with is the pharmacy benefit managers role is to take competition, take choosing the right drug in an imperfection situation and implement that for patients, that thats kind of how we fit in. And its a difficult thing. And perfect information is a part of why its so hard to get there. But without the industry in the middle ill give you a simple example. Were in an opioid epidemic. And the cdc has come out with guidelines that say doctors should prescribe less than seven days of morphine in acute medication. They also said you should have less than 50 morphine equivalent dose average per day, nothing more than that. And they understand that if you take an opioid with a benzdias peen, your risk of over dose, which is actually more lethal now to americans those things should not be done together. So what we do is we implement programs that allow the script only to have seven dates worth of supply. It allows us to flag the doctor and patient of the risk of a bens benzdiaspine. Thats how we fit into the equation. Back to the previous comment about employers, sometimes you forget that lilies not only a pharmaceutical manufacturer but were an employer as well. With tens of thousands employees, depends and retirees who are on a health plan in hsa and hra. And there are steps lily has taken in terms of the employer contribution and the plan to manage their health care expenses, looking at exempting preventative and chronic from the help phase. And i think those are important that help vilks of what is their Consumer Choice in selecting a health plan and how they progress through the year. Is that enough . One last thing. Unfortunately, there are a lot of companies that would for asthmatics but, under the current rules, if we do that, the patient loses their eligibility to contribute to their Health Savings account. One of the things that i think the administration is working on is changing those rules at the irs. That would be a gamechanger. It would make a lot of peoples lives better. Agreed. Seems like thats something that hasnt gotten a lot of attention. Its not sexy, i guess. We think its important. Ceci. Absolutely agree. It is very important. I think it picks up on a theme that alan and others have tried to hit today, which is about getting the right care for the right patient, right time, right price. So, definitely a part of that is thinking smart about your health. So prevention and managing chronic diseases and having that first dollar coverage on some of the things like diabetes. High blood pressure, cholesterol, et cetera, will enable thats individuals to live much healthier lives and not have the much more serious illnesses later on that frankly cost all of us much more money. So some of this is just simply being a little smarter about the investments up front that make sense, and it actually takes thinking a little more longterm, which is especially difficult in washington and with score keeping and all of that sort of thing. But spending that money now will save later on, and i would really like to see policymakers with the industry start to be able to track that and illustrate that in a much more meaningful way. Can you all get meetings on capitol hill to talk about drug prices with all the oxygen being sucked up by the aca, andub hoo you see obviously its in a state of flux right now, but how are you gaming out, you know, how your industry will be impacted . It doesnt apply to everyone on the panel. I know the aca was a coverage bill by obviously impacts pharmaceuticals. It doesnt get a lot of attention. So have you taken a position, for example, chip, on the latest repeal bill . If you were going to say on the repeal bill, i was going to say which one. Its a moving target. In the time we have been in here, who knows whats happened. Its a bit of a moving dynamic. Our position has been and continues to be we want to make sure that people have appropriate access and coverage for health care, including comprehensive Prescription Drug coverage. In many ways for some of the reasons you talked about, because having access to both innovative, generic and biosimilar moving forward is in the continuum of health care one of the most Cost Effective vehicles you can have to maintaining is it advancing Public Health. On the specific issue that you asked, can you get meetings in this overall dynamic thats going on, the answer is yes. I think the reason for is that Prescription Drug cost was such a big discussion, as i said earlier, through the campaign cycle, that whatever happens or doesnt happen in that space relative to whatever does or doesnt repeal and replace, the issue will come back around on its own. There was a meeting the other night when President Trump brought a number of Senate Republicans together for dinner. The primary object was to try to convince them to vote and support the repeal effort. In addition to that discussion he raised two issues. One of which is about selling insurance across state lines and the other is what to do about drug prices. I have every expectation that the issue will circle back around. If it doesnt happen within the user fees, its still open in the senate. I would second all the comments that it has to get passed and has to get passed before they start sending notices out to fda employees. They dont deserve that. I know its a moving target and the goal is great and affordable coverage. If 32 Million People if you believe the cbo and 32 Million People dont have coverage anymore, that doesnt seem like something that would be a good thing, or is that that simple . I think what it will do and then ill stop and let other panelists opine. I think what it will do is take the sensitivity on the issue of Prescription Drugs and elevate it even higher. I would say, with respect to coverage, the reason why that is so important and why so much of the recent debate keeps coming back to that is, just try to think back to 2008, 2009 when we had a very high number of uninsured americans. You can all recall very well what occurred. First of all, individuals who had preexisting conditions either could not get insurance or faced very high insurance bills, or they went to the emergency room when they were terribly sick, far, far late in the progression of their disease, not good for their health, not good for anybodys wallet because those costs get passed on to employers and taxpayers and all of the rest of us. So the reason why people keep coming back to that is, it is a linchpin piece of our system. You hear the boring talk about managing a risk pool. You have to get everybody in a risk pool to manage it around. Is the 32 million the right number . Who knows. As senator Lindsey Graham pointed out, even if cbo is off by half, you know, okay, so 15 million, 16 million more uninsured. Thats okay . Who wants to say how many million more uninsured is okay. If people want to stress cost and affordability try to see what 20 or 30 Million People losing insurance will cost the system. Theyre all going to get it at the where its too late to save them. Emergency rooms, and the stress on the system will be much worse. We have to fix this. This is a complicated problem. But taking 20 to 30 Million People without insurance, they have to have good insurance. And we have to think about the patient, the individual. These are people that are sick that need help, so we cant forget about what the impact will be on families and how treacherous this is going to be and devastating to people. So one of the particularly the underserved and the people who are themselves challenged today. One of the things i have to do for my job thats not fun is i have to read the whole cbo reports. I havent had a chance to read the one for the repeal only bill but i delved through the ones for bicra and the American Health care act. Those started with the number 23 million. You see that 11 million are people who are no longer forced to buy something that they dont want. About half of the remaining, so another 5 million or so, are people who live in states that have not expanded medicaid thus far but cbo thinks more states will expand. They dont say what states those are or when theyll expand them but that its certainly going to happen. So there is an additional 5. Three to four million are people who currently have coverage through an employer. Cbo says their employer wont offer coverage anymore. In the next paragraph cbo said, actually, probably not, it would have to be an employer that has highly paid individuals who are healthy but our model says it so were keeping it anyway. If you delve into the numbers, its closer to 4 or 5 Million People who would have Medicaid Expansion today and wouldnt in the future. I think thats a number we should be concerned with, and i think those people will need help and something would have to be done to help the people make sure that they get coverage, but i think when we talk about numbers in the 20 and 30 million were not telling the truth, were doing washington talk again. Certainly the Affordable Care act and the Prescription Drug user fee act consume a lot of the attention in the time whether it be in hill visits or other dialogue. There are policy solutions that were looking to pursue, one being valuablebased agreements and recognizing its not the Silver Bullet but in the set of tools to look at, this shift from volumebased to value based care and the potential to connect reimbursement to realworld outcomes. But there are also barriers, regulatory or legislative on the antikickback statute. Best price or amendments to best price or asp reporting. And the ability for pharmaceutical manufacturers to have conversations with payers prior to fda approval and a clarification of that, are instances where we have discussions, again, with stakeholders and member of congress about the potential to have value based agreements flourish and be one of the solutions. Well take a few questions if there are those out there. In the first row. With the black dress. Thank you. Cat davis. From the familial hypercholesterolemia foundation. Thank you so much. This has been fantastic. Part of the title of today is ensuring access. Its been very futurefocused. I want to ask, we have systems in place right now to manage costs, and including what we heard from in the beginning, the role of pbms and payers. What we see in our population, i know its true in other disease populations as well, is that even when everything is in place, somebody has insurance, the drug is on their formulary, and there are innovative treatments for people who are otherwise out of options. Out of generics have not done it for them, what our research shows, we published recently, is that 63 of people who meet criteria are denied access, are denied their insurance request. We know thats a burdens on Health Care Providers and its a burden on patients. If innovative therapies are not getting to the right patient at the right time. What can we do to fix what we already have in place, and how can we Work Together to make sure that those patients who are, for example in our example, have a genetic condition and a treatment thats great for them and still they are denied. Thank you. I can start. With an answer. So, i think, first, when a patient that requires a drug and its appropriate and they dont get it, its a failure of the system. So i fully agree that that should not happen. So where do i think the solutions are. I think the Solutions Come from better and more perfect information at the level of the provider. So, i can tell you some of the things that we are working on. We are working on electronic communication within the doctors work flow so that there can be realtime or more immediate answers and a dialogue around that that is more seamless for the patient. I cant speak to the numbers that you were referring to but i can say that ideally it should be 0 for people who need it. And some of these tools to provide information at the level of the physician will help. I can offer a couple quick thoughts. I will even go simpler than your unfortunate example, which is that Something Like 20 of patients today dont even fill the prescriptions that are written for them, often because of cost, by the way. But generally, the doctor doesnt learn that about his or her patient. And so we have already got this information gap which is hurting patients. And so, if you have if you are in more of an integrated system where your health plan and your providers are connected and coordinated, you get much more of that realtime information sharing, which is so important, because then the clinicians are aware, oh, my goodness, we need to do something for this patient. Thats an important linkage. And also, frankly, empowering pharmacists much more. This becomes a state issue, as many of you know, in terms of practicing and licensing and what pharmacists can be empowered to do. But pharmacists can play a Critical Role in, again, helping to sort of make the connections and getting right drug, right patient, right time, et cetera. Ceci, ill quickly add to that. I think what you point out is a very important thing, and certainly integrated Delivery Systems, one way to deal with it. Things that we can do today and i think people are doing are looking at the pharmacies which typically will fill a medication and then process a claim and then, if the patient doesnt show up, they will reverse the claim and put the medicine back in stock. Which can be seen in the electronic footprint of the pharmacy system. So we use information like that to go back to the physician and say, maybe your patient didnt fill this medication. You may want to have a discussion. The issue of abandonment that ceci raised and the 20 is increasingly important. Thats the definition of total abject failure of the system. You dont get to patient adherence if you have abandonment. The patient walks up to the counter and doesnt start the therapy. There is recent data, ceci talked about 20 . For generics its actually 7 . In the polling thats been done recently, it shows because of the affordability issue is an increasing concern moving forward. We have to solve it across the board. In the markets for generic is available you have onethird twothirds more likelihood that the patient will start and stay on their therapy. So thats an important distinction. I am afraid we are out of time. I apologize. I thank the panel for the spirited discussion, and thank you all for coming. [ applause ] that brings us to the end of our program. I would like to thank you for joining us. Dont forget your surveys. And also, the full video will be available on thehill. Com later today. Thanks so much. Have a great day. Cspans washington journal, live every day with news and policy issues impacting you. Coming up tuesday morning. Minnesota Republican Congress man eric paulson discusses the opioid epidemic. And David Hawkings of cg role call discusses congressional pay and benefits. Live at 7 00 a. M. Eastern tuesday morning. Join the discussion. Tuesday, a house hearing looks at the role of Border Security technology in enhancing the ability of u. S. Customs and Border Protection to secure the southern border. Well also hear about Current Investments in technologies that aim to improve the ability of those Border Agents to detect, track and apprehend illicit activities. See the hearing live at 10 00 a. M. Eastern here on cspan 3. In the afternoon, a senator hearing examines the future of u. S. Policy toward north korea under the trump administration. Well hear testimony from susan thornton, who serves as the acting assistant secretary for the bureau of east asian and pacific affairs. Serving as chair of the subcommittee is colorado senator cory gardner, who recently introduced legislation to impose an embargo against north korea. That hearing starts live at 2 30 eastern, also on cspan 3. Tuesday night we will hear more from President Trump as he speaks to supporters in youngstown, ohio. We will have live coverage beginning at 7 00 p. M. Eastern also here on cspan 3. Congress is expected to have a busy week with the house considering proposed sanctions against russia, iran and north korea, as well as defense related spending bills. The senate is dealing with health care legislation. Watch live coverage of the house on cspan and
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