decisions and take the treatment that's correct for them. that's a different environment we're shifting to. >> heather, last word to you. >> i think i have to steal something that a panelist said earlier. innovation's meaningless if nobody can afford it so think about it. again, i represent middle class. i'm not representing low income recipients. i represent any of you that's worked for the government. i spent career in d.c. i've been around and didn't have a platinum federal. i didn't stay a federal employee. i don't have that platinum health care and it's a struggle. it's really a struggle to pay for these treatments and to stay on top of the -- of everything that's happening and i'm not talking medical innovation. plan changes. my treatment would only be covered -- no co-pay if i went to a cancer cent herb -- no, i'm sorry. not a cancer center well into the treatment and there weren't any in my state. none, zero.

so that went my co-pay jumped from 0 to 300 that month. those are the kind of things you're constantly trying to stay in front of as a patient. and again, i could be any of you. >> right. well, that concludes our morning session. we were going to take a one-hour break now for lunch. as a reminder, you are not permitted to move around the building on your own. if you want to purchase lunch in the cafeteria on the top floor, go to the registration desk. you can go outside and to the left. we'll presume promptly at 12:45. join me first of all the in thanking this panel and wishing heather all the best in your treatment. thank you. [ applause ] up next, more from the department of health and human services forum on pharmaceutical

noin vags and drug costs. panelists share ideas on improving access and affordability to high quality drugs. >> welcome back, everybody. i hope you enjoyed your lunch and your break. we're now going to move on to our next presentation. and i have the pleasure of introducing andy slaf it who's the acting administrator for the centers of medicaid and medicare services. he is responsible for cross cutting policy and operational coordination for medicare, for medicaid, for chip and marketplace programs. including the very important efforts to expand health coverage to combat health care fraud, to reform the delivery of health care and improve health outcomes so join me in welcoming now andy slavitt. [ applause ]

>> all right. well, thank you all for being here today. i hope you've enjoyed the meetings so far in the morning and look forward to the afternoon. it's greet see leaders from patient groups, health plans, providers and manufacturers all here to come together around the same opportunity. to ensure americans have and maintain access to life changing and life saving treatments. through innovations and life sciences and gentlemen no micks, we have unprecedented opportunity to cure and manage disease like never before. so i thank you all for the role you play in your commitment to the discovery and development of

these vital treatments and also your growing cog any sans of public concerns regarding the accessibility of these medicines. so let me do my best to frame both the challenge and the opportunity and where i believe we most need your input into the challenges that we're discussing today. at cms, we start this discussion the same place we start everything. with the 140 million beneficiaries and consumers we serve. millions of our consumers, whether medicare, medicaid, chip or marketplace rely on prescription medications to manage chronic illnesses and to treat acute conditions. the science and innovation engine that are creating the medicines of the future will be

an instrumental component of the quality of life of today's and tomorrow's beneficiaries. surveys also tell us that as costs go up, so does everyone's anxiety about their continued access to their own prescription medication. and because we all plan to use the medicare program one day, it's not just today's beneficiaries but all of us have a stake in the long-term accessibility to new therapies. today's discussion designed to begin a dialogue that allows everyone in the room and beyond to chart a path that continues to encourage scientific discovery and ensures those discoveries are accessible to those that need it. as we encourage the development of new generations of highly targeted personalized therapies,

we need strategies for ensuring access to these innovations. it is in all of our interests to find ways to improve affordability and access for patients, support and increase innovation in the industry and most importantly make people healthier. in 2014, cms spent $140 billion on prescription drugs for seniors, the working poor, children and the disabled in the medicare and medicaid programs. that doesn't include prescription drugs spending for the children's health insurance programs and the marketplaces where premiums are highly influenced by prescription drug costs. spending on medicines, increased 13% in 2014, compared to 5% for health care spending growth

overall. the highest rate of drug spending since 2001. now, drug costs are not just the states and federal government's fastest growing costs. but through part-b and part-d premiums, co-insurance and deductibles, our beneficiaries pay approximately 16% of the bill. making this a real kitchen table issue for working families and retirees. per capita part-d costs increased by 11% in 2014. driven by increased spending on higher cost drugs and the catastrophic phase of the benefit. given these costs, consumers access is already under threat. surveys suggest that has many as 1 in 4 americans cannot afford and therefore do not fill the prescriptions on which their health depends. state medicaid agencies in some cases are in the difficult

position of withholding vital therapies for people in need. the reality is kurls and improvements in the quality of life are not available to everyone. access isn't a problem of the future. it's a problem of today. and evidence suggests that this trend of diminishing access could continue if we do not work together on viable solutions. one element of the challenge is specialty drugs which we have talked about today which is a small faction of prescriptions. they're expensive to develop and for every great cure, there are many failed investments. but we need discussions and solutions that allow us to bear the cost of development fairly and reasonably and not have it threaten access to the very

people the drugs are developed for. hepatitis-c as we have talked about today and the new drugs available to treat the disease shine a light on the issue. we have the potential to cure this disease. however, tight state medicaid budgets struggle to provide broad access to this cure. yesser innic medications have been one element of our affordability strategy. each year, the use of fda approved generics saves the country $200 billion. however, in some instances, the prices of generics available for years have increased substantially without any additional benefits for patients. this is a concern across the country but particularly for consumers on fixed incomes. we need better insights and

visibility as generic medication prices begin to grow. so, how do we make sure that our beneficiaries are access to the best quality medications so we can keep them healthier? how do we do this not only today but in the future with the convergence of two factors, more people gaining coverage by aging into medicare or under expanded medicaid, and the pipeline of high cost specialty drugs continuing to grow? i've had a number of conversations recently with innovative manufacturers, with health plans, patients and other stakeholders in this room and out of it and i can report as you're hearing today a great interest in finding a strategy which gives broader access to the innovations being created today and in the future. the right ideas will in turn create bigger markets for innovators and should serve to

create a more predictable climate for investors to support the innovation we need. as the secretary said, we shouldn't have to choose between innovation and access as a country. we can work together to find strategies to achieve both. so we approach this understanding of how to approach this challenge beginning with an open dialogue. a shared set of facts and a search for the best ideas. different interests may have different views. but we believe there are a common set of objectives we are working towards. so we do believe that patients, manufacturers, providers, insurers and government all share a common goal, to foster a health care system that leads no innovation, delivers affordable, high quality medicines and does result in healthier people with sustainable access to the care they need. so, as we continue to engage

with many of you, my hope is that we will continue to hear real, practical ideas and proposals to maintaining innovation while finding ways to improve access. we are particularly interested in continuing to hear your ideas in three important domains. the first is the domain of value and value-based payments. our commitment to our customers and taxpayers can be summed up by the word value as a purchaser, a logical question for us to start with is, are we getting good value for the consumers' and taxpayers' dollar? over the last year we in fact at cms moved to rewarding physicians, hospitals and other care providers who deliver better care, spend money more wisely and keep people healthier. we have committed that within two years paying through these

alternative payment models will be the dominant way we reimburse for care. we have done this in close partnership with care providers, experimenting with new models, taking feedback, improving the models and publishing the results transparently. so just as we pay for quality in care delivery, how should we create incentives which take the entire health and outcome of an individual into account? how do we create rewards for therapies that reduce disease, keep people in their homes, and out of hospitals or other institutions and control chronic diseases while improving outcomes? when's the best way to pay for targeted therapies when they work for some patients but not for others? how do we think in terms of episodes of effective treatment rather than just the cost of a pill?

this dialogue on value we're having today represents an important opportunity to understand how to invest in innovation and improve access. we need to learn more. the second domain is information transparency and availability. we don't have a common understanding of the data and know the drug costs are often unclear. there are list prices, wholesale prices, average wholesale prices, rebates, supplemental rebates, mark-ups from hospitals and physicians, different costs administered outpatient than in-patient, form lair tiers, mail order prices, bio similar prices and; of course, patent expirati expirations, compound samples and many other ways that obscure the reality of the price paid. who pays and how it all influences treatment decisions. and most of that information is

not available or well understood by the public. making it hard to have confidence that we have a truly functional and transparent market that delivers good value for patients. the truth is we don't have enough public information on the effectiveness of new drugs in the real world or about prices and rebate structures. as a result, anecdotes, whether about pervasive generic price increases or other things, draw significant attention. so in order to avoid reacting to misinformation, we must increase the transparency of the information available about drug pricing and value. how do we make public the information that will allow us to understand prices and sflal how do we educate the public on the cost of these medicines? the value chain, the measures of effectiveness? how do we create visibility into

price increases? how do we help the public have an informed debate on the size of the federal and state expenditures or the unit costs or patient value created? we want ideas on the best way to take steps to improve transparency. the third domain is incentives and hurdles. we have to understand what has gotten us here in order to make progress. are there eventuals and regulations across government that are getting in the way of affordability and access? we should look at across cms, across other parts of hhs or in other areas to allow us to improve affordability? what other hurdles are there? what incentives are driving up costs? what could be changed about how incentives are created for physicians, hospitals and pharmacie pharmacies? in each of these domains, value based purchasing, transparency

and barriers and incentives and others, we are committed to taking in all ideas and working collaborateively. we know everyone won't always agree on every step but we plan to take these issues on transparent lain with public input so that we can move forward, learn and improve. in an effort to work toward solutions to address the challenge that is we all spoke about today and uphold our obligations we ask everyone in this room to use this forum as a way to better understand the positive role we can all play in this process, consider how we can contribute to constructive solutions over the coming years. i hope today's public dialogue kicks off a commitment to listening and working together to advance ideas that do improve access, affordability and

innovation so all americans have access to the breakthroughs ahead. there are no easy answers to these multifaceted challenges but there's a significant benefit to all of us of working together to find a solution. we want to explore the best ideas and we're committed to making progress because the public is relying on our ability to find solutions. and we look forward to working with i don't in the coming weeks and months. thank you. [ applause ] >> well, we thank andy slavitt

so much and as he said and others have said over the course of the day, if we're going to keep the engine of science and innovation humming and producing the kinds of treatments and cures that we all very much want and yet keep them affordable and accessible to patients we're going to need strategies as andy said and that will be the focus of the panel i will introduce shortly. just before i begin, though, a quick refresher course on some of our house keeping details. the program is indeed being web cast. the q and a period will be web cast, as well. after each -- we wrap up our initial discussion, we're going to invite you once again to come and pose your questions and once more please come to the microphone in the center of the room and keep your questions succinct. once more, guests are not permitted to rove around the building alone. if you do need to get to the restroom or the cafeteria, make a phone call, go back to the

registration table and request an escort. also, once more, please mute your cell phones. photographs and recordings are not permitted. well, with that, going back to andy's word about strategies, our next panel is going to focus on those discussing both purchasing strategies and managing utilization. we're going to be sharing information now on how various purchasing strategiies might wok to uncover the barriers or challenges that andy rempbtsed and actually implement these new strategies. the goal is that we'll all come away from this discussion of better understanding of current models and how we can get to smarter spending and smarter purchasing on prescription drugs. so we'll be hearing about various pharmacy management approaches, some state and employer approaches to utilization management and much more. i'm going to introduce each of

the panelists and ask each of them to give a quick sketch of their role as a stakeholder in this discussion. and particularly address this notion of how we begin to get to some of the new strategies from their particular perspective. so first i'm very happy to introduce right next to me here chip davis, the president and ceo of gpa, the generic pharmaceuticals association. we have been hearing about generics over the course of the day. tell us how you're viewing this need for new purchasing strategies from your perspective. >> sure. susan, thank you. good afternoon, everyone. i on behalf of gpha and the members it is a privilege to be with all of you here today. let me start by briefing joining the chorus of previous panelists who thanked secretary burwell and the hhs team for putting together this really important meeting with a diverse group of stakeholders in what i don't think is referenced yet an amazingly short period of time.

thanks to the department and the secretary. susan, specifically to your question, i think that within the construct of this session and focusing on things like utilization management and benefit design, best practices, it is really important for us to keep in mind sort of i think the challenge that the secretary put in front all of us earlier today which is how do we go about ensuring in the u.s. market to continue to lead inn areas of innovation and the issues addressed and driving to better healtho outcomes. no small task and there are things that i think we'll be able to talk about today. from a generics point of view i think doug long covered a good number of the relevant data in terms of the savings that is delivered. i won't reassert all of that but i do think in terms of -- to set some context because there's been a lot of discussion as of late of generics and pricing and

some exertions of excessive generics pricing, in 2014, it saved $254 billion. to put it in context, add up what the government, the federal government spent in medicare part-d, part-b, the vet triad care and children and chip program covers all of those costs for two years and $50 billion left over to invest in other areas of health care. right? so administrator slavitt said that's important to reinforce. there will always be stories about aneck doetds of outliers and in more instances and some of late, by the way, some are not generic and some portrayed as generic an they are not generic, to be mindful that setting policy and making policy decisions based on outliers and 'neck dotes can drive unintended consequences, particularly for a marketplace that while i'm still

relatively new, based upon my experience is the most intensely competitive, highly regulated second tore of the entire health care system. and we can come back and talk about that later but the other point i would just make as far as an opening statement is everybody is -- there is certainly legitimate concerns around affordability, obviously. we have heard them on the last panel. and often it is said particularly heading into an election year and highlighted that americans pay the highest price for medicine in the world. per capita, that's accurate. not for generic the actually you compare us to europe and the friends in north in canada, we pay less than in those markets and i'll be happy to speak to that later. perhaps why this week in the senate the appointed fda commissioner asked about importing drugs about kan did and specifically asked about

branded medicine and not generics because generics are more expensive by and large in canada than here in the u.s. so i look forward to having the discussion around utilization management and benefit decision aer t . >> terrific. thank you, chip. andr andrea? >> thank you, susan. as we heard today, drug trends are double digits. 2014, u.s. prescription costs increased 13.1%. and that was largely driven by specialty costs. unprecedented at 31%. while specialty costs only represents 1% to 2% of the volume, in the next few years it's financial impact more than 50%. now, while specialty drugs actually come with a price, they have been life changers. over the last 100 years, life expectancy has increased from 47 to 78 years.

and in only the last 20 years death related to hiv have decreased 80%. th deaths related to cancer decreased 20% and hepatitis-c is now curable at 95%. advancements in treatment, rheumatoid arthritis and muscular ske lo sis slowed the progression of the disease and in some cases remission. there are multiple strategies and varying approaches to how we balance the rising costs of health care while still providing access. and some of those opportunities revolve around utilization management strategies, form lair designs, plan designs, narrow networks and managing medications not only from a pharmacy perspective but from a medical perspective, as well. this is a constant balance of cost and assuring that the right member gets the right drug and the right amount.

and our employers face that balance every day. they need to be prudent financially but they also want to make sure that they bring value to their employees. so while cost does matter employees and families do, as well. >> okay. thank you very much. we'll look forward to coming back to hear more. brian lehman is with us, manager of pharmacy benefits and policy at ohio public employees retirement systems. brian, give us a greater sense of your role as a stakeholder in this discussion. >> yeah. i so i'm involved with the public sector, the actives and the retirees, a member of the public health sector roundtable which has $15 billion in health care spend and we appreciate the opportunity to share our story here with everyone today. the specialty drugs is an area

of considerable concern from an affordability perspective. we do the best that we can to have affordable prescription co-pays. we have like $4 generic co-pays at retail right now and value based insurance, $0 co-pays for different disease states. and we try to keep premiums low but we're struggling. we're doing the best that we can with regards to contracting for our medicare population. we have an employer group waiver plan contract for that population and then we have a standard commercial contract. and then with all of the different tool that is are available now today, we're using a good majority of those tools, some of those tools i think will be beneficial, you know, to some areas and talk about that later but those tools are helping somewhat keep those co-pays low

and keep the premiums low but we are really looking for these innovations and we are looking for the value which, again, i think is very important to separate the affordability discussion with the value discussion and on the value discussion these value-based contracts, the indications based contracts are very afraktive to someone like opers an ena public retirement system. we think that that could be a potential solution to helping us keep health care costs under control and also we're encouraged by some of these as peter newman's called it private sector nice solutions, and what thigh ear doing with regards to drug costs. >> and by that, you mean particularly doing analyses of the costs comparative effectiveness? okay, great. so we're very happy also that

justin senior with us, deputy secretary for medicaid at the florida agency for health care administration. so, justin, give us a sense of your perspective as a stakeholder in the medicaid program. >> thank you. yeah. again, i'd alike to echo the thanks to the department of health and human services for having me here today to give the state perspective on an issue where really the importance of the issue to the states can't be overstated. the state medicaid programs pay for an enormous amount of pharmacy in the states and have an enormous responsibility with respect to melt care and frankly also with respect to public health. in our own program, we serve about 4 million floridians in any given month. our pharmacy spend in the course of the year is now approaching about $2 billion. and specialty drugs have had an incredible impact over the course of the last couple of years starting with december of 2013. on the cost of our program. last year we built in and i heard some numbers earlier but

last year we built in about 18% prescription trend and we deliver care through health plans in our state. i don't think that that is out of the ordinary. and the real debate that plays out in the states and probably worth mentioning here is that every time there is a massive increase in the cost including particularly a specialty drug, we spend about $120 million, $130 million from january 1st 2014 through august on hepatitis-c treatments. that is enough and i did some back of the envelope calculations and fund about 20 to 25 elementary schools in the state of florida for a year. at 600 pupils per school. it is enough actually to fund the entire state park system. but the education component is really important because the states really need to be able to make investments in public health and one of the best investments you can possibly make in public health is

effectively spent education dollar. if you can spend education dollars, you can lower the obesity rates, lower the teen pregnancy rates, the std rates, you can make enormous strides in health as opposed to health care and we spend an enormous amount of money. the surgeon general has a speech and likens the public or the health system to a river and we spend enormous amount of money on people after the fact, after they have gone over the waterfall. and on treatments and cures. and not enough money on prevention and making investments there. and when we are compelled or when we have to spend an enormous amount of money on our medicaid program, this plays out year after year in the budgeting for the state of florida and frankly in every state. the fact that you're going to have to cut education, that other priorities are really going to be put on the chopping block as a result of this program which is taking up a

greater and greater percentage of state budgets. states, they are required to have balanced budgets for the most part. they do not have a license to print money. we actually have a partner that has a license to print money and creates an awkward environment but happy to talk about some of the utilization strategies, management strategies. this is just a critically important issue for the states around the country. >> great. thank you so much. and now we're going to hear from christ sh christi shaw, president of novartis corporation. christi? >> thank you. thank you for having me, as well. you might say a little bit about the first one in the hot seat from the pharmaceutical industry, if you will. i'm happy to join the discussion. novartis is a swiss based company. we are leaders in eye care, leaders in pharmaceuticals and lead earls in generics with the

sandos division. you heard this morning we are really in a moment of innovation that is really helping people live longer, healthier lives. last year, as you heard from doug this morning, 50 new medicines were approved last year by the fda, the most and the highest in about 20 years. and so, as we look at that it reminds me, we probably some of us seen this actually take place, the change in our own families. when my mother was 49 years old she was diagnosed with breast cancer and in those days it was a chemotherapies that we know about today and the toxicities and unfortunately she passed away the same year that the inhibitors were approved and had she had access to that innovation, my sisters and i would have gotten 18 months to 5 years with her to create more special moments with her we missed. fast forward when my sister was

the same age she was diagnosed with bone cancer. we almost lost her. without treatment seven months is a life expectancy and she has been on fiv treatment. and she's been on five innovative medicines. after her bone marrow transplant, from the first to the second medication, she failed after one year. and luckily we were able to get her on a combo of two novel medications. and every time, every month she went to fill her prescription, she had to wait until she took the last dose before she was allowed to be shipped the next dose. and in between that 24 hours had to have a qualitative survey, a hospital blood testing and make sure that the paperwork was faxed from the office to the pbm and all had to happen right. and when i first noticed, she said to me, oh, it's okay if i miss a dose. i said, no, you can't miss a dose. she said, i missed six doses

last month. so i see the cost but often the strugglework of the providers that providers and patients deal with. but luckily, after the last treatment she had failed in three months, she was able with just that three months not feeling like it's very long, but it bridged her long enough to the new multiple myeloma drug approved just a week ago. so we get to spend another thanksgiving, another holiday together which i'm grateful for. now i say that knowing that it's not just about innovation but we need to make sure that patients can access innovation. people are living longer, healthier lives. we have more people turning 65 and over 65 in the next 25 years, that population is going to double. every single minute seven people are turning 65. so that means costs are going up. as you look at those people, two out of three of them are living with a chronic illness. and sometimes multiple chronic

illnesses. two-thirds of our health care dollars are spent on that population. so as we increase the health care costs, we need to actually all come together, which is why i'm so happy to be a part of this forum to say, how does one cost affect another? where is the value in the system? what should we be paying for? and what is not of value that we should take out of the system? we want to be a part of the solution and have embarked on this outcomes base contracting a couple years ago. and we have run into some issues. and we have run into some successes. we have many states where we signed up for outcome states contracting to approve the value of our products. we have one in multiple sclerosis where you need to get the value you saw in our krin ca clinical trials or you get larger rebates. we have a new product that was approved this summer. and this shows versus the

standard of care, it reduces death by 20% in heart failure patients. to reduce hospitalization by 20%. to reduce readmissions within 30 days by 44%. it was proven by some of these external bodies to be cost effective, yet when the fda gave accelerated review, approved it this summer and we got it to market in 48 hours, it was blocked for any patient in medicare to get access. and it was blocked 100% until october 1st. and now 91%. doctors cannot get it to their patients. even when it's cost effective. so we want to be part of the solution to say when you have a patent, you have something that's innovative, we should pay for that, we should prove the value. and then when you have a product go generic, it should go generic. and with competition, you'll save money 85% of the cost almost -- pretty darn quickly. and then as we get into biosimilars, we'll be able to save $44 billion by 2024

allowing bio similars into the marketplace. so as you look at the continuam at the end, i think a collaborative approach such as this where we say, where is the value in the system where it's not? what should we be charging for each intervention to really insure patients get what they need? we want to be a part of that solution. >> great. well, thanks to all of you. so, i want to come back, justin, first of all to you to talk about the management strategies youit in place in florida to deal with the drugs, in particular, that you mentioned. 120 to 130 million cost to the state as a consequence of the drugs in the medicaid program. attributing to the 18% trend you saw in drug spending over the past year. as we heard earlier, the secretary wrote a letter to a number of the state medicare directors saying you have an obligation to bring the drugs to

these patients. what management strategies did you put in place on that? and what do they tell us about the strategies that will or will not be effective in the future? >> the hemp seed drugs are very interesting, very unique. the price pressure they put on the states created an interesting dynamic that a lot of people wouldn't think of, but as a floridian, we would think of it. which is when you price a drug in that manner, you create the danger of diversion, fraud and voice. which actually was a particular concern for us. a lot of the utilization management strategies were characterized and rationing. but there is definitely something to be concerned about in florida or any other state when you hand someone a vile of medication that is supposedly worth $28,000. and we have seen with drugs that you would think have no possibility of being abused, you wouldn't abuse the drug, they get diverted to other sources.

>> explain what you mean by that. patients are getting the drugs and selling them? >> yes, you get the drug and you sell them. and we have seen that with other very high-cost pharmaceuticals that really aren't the type of drugs you would expect to be abused. and we saw it with hiv aids drugs in our program and had real concerns about this particular drug. the key for us is we wanted to make sure, and when you spend money in a state medicaid program, everybody wants your dollars to be spent effectively. it's a major black eye to your program, one that really undermines what you're doing and that you can't get over the narrative for years if you get anecdote, where that type of scheme was going on in the miami area. i hate to pick on them, but they have probably earned it. but, you know, if that type of scheme is going on, and, in fact, that happened with some of the hiv aids drugs back in the 2000s, they were only taking every second drug and the other drugs were being diverted. to overcome that, you want your

program to be viewed as effective. one of the things we put in is you need your viral load tested before you take the drug and one month in you have to have it tested again. part of that is to make sure you are in the 95% in the clinical trial that are going to be responsive to the drug. but the other part is to make sure that you are actually taking it. we have, for the most part, it's easiest to get the drug at level three or level four, but there are ways to get the drug at level two and earlier if you -- >> around viral level. >> that's correct. it was very hard initially for a brief time period we just had one drug that we were dealing with. you know, there wasn't really any effective competitor in the marketplace for nearly a year. and so that means when you go to negotiate a supplemental rebate, you don't have much negotiating leverage. once additional products came online from other manufacturers, you are able to negotiate

something. get one of the products on the preferred drug list and then the price competition at the state level starts. but initially you want to make sure that the people that are getting the drug are effectively, they are getting treated by the drug, they are using the drug, they are adhering to the drug and you want to make sure the people you give it to are those in the most in need of it, most adherent to it and you verify that. that's the life blood of what you have helped people. that's the way taxpayers want their dollars to be spent. >> as you think about the other specialty drugs, which has we heard this morning are going to be coming into the marketplace, how do you think you'll adapt some of those utilization management strategies and utilizing the effects of that. >> so many variables there, but it is drug specific. you have to look at the disease condition of the drug, what it treats and the pricing of the

drug. the other drug that drove our pharmacy costs was the new cystic fibrosis drugs. but there are not near as many restrictions on that as the hepatitis c drug. you can give it to someone a symptomatic. with this, it pushed our product upward, the cystic fibrosis drug. we don't see the danger of abuse around that. we don't see the issues with adherence around that. and so it's something that we're much more comfortable with, that is a success story by providing that to as many people as broadly as possible. we are not in danger of getting knocked sideways. >> andrea, we'll go to you and talk about employers and what is their most effective set of

tools. it is not necessarily their tools but tools that they ask others they work with, whether they be pharmacy benefit managers or their insurers or others to engage in. but employers have tried a whole lot of strategies from mail order, from formularies, tiering, et cetera. as we move into the cost pressures, how are employers thinking? what are they thinking are the most effective purchasing strategies at their disposal? >> it really depends. because employers health care strategy is part of their total business strategy. so it really varies from employer to employer. >> well, what are some of the most innovative things you have seen employers start to begin to think about? >> well, what's available and what i referenced earlier in my opening discussion, there are a multitude of programs.

outlization utilization management, quality limits to make sure they are insuring safety. there are different formulary options, whether open or closed. also different plan designs with preferred tiering. and -- >> do they feel that those are enough? or do they want to move more in the direction of some of the types of arrangements that chris ty was describing, where there would be rebates, for example, of drugs that do not prove to be as effective as originally shown to be in clinical trials? >> again, it really does depend on the employer and what their strategy is. i think that one of the areas that we need to remember is that medications are available in the pharmacy and medical benefit. and we have to focus on how to manage the entire health care medication. >> right. that gets back to the point that

mark mcculla was making earlier, that some of these drugs, for example, medicare paid for these in part b, these were paid in part d, same thing in place on the health insurance policy side. brian, from your perspective, thinking about the most effective tools you've had. you referenced a couple of them and where you might be going in the future. what do you think are going to be the best options? >> yeah, with the public employers and the retirement systems, we also are using a lot of the same tools, the usage management tools and they have helped us realize savings. for one specifically, we saved $9 million for utilizing those tools. but our drug spending went up 22%. our overall drug spend went up 13%. so it's not enough. and it's -- so now it's actually

clients like opers and others are pressuring us to do something different and do things different, like doing with express scrips and dollar miller will talk about the initiations based contracting, paying for drugs based on value for one indication, pay more when it actually expands, increases your life span, paying less when it increases your life span a shorter time period. talking with the health plans like humana about the value-based contracting, the outcomes based contracting and, again, we want to pay for value. and then drug price inflation. that has been something that, you know, when i go down and sit down with decision leadership and say, what is going on with my drug spend? i have to say, well, here's inflation but there's not much i can do about it. so, you know, we've had to rely and have had to try push our

vendors, like our pbm express scrips to do caps, inflation caps on drugs during contracting to help bring the prices down. >> so, chip, i want to go to you and bring up one of those domains that andy referenced earlier. he talked about the three domains that they want to gain on, one is the value based payment. the second one he referenced transparency. you mentioned we have anecdotes now about what has gone on with some generic drug price increases and so-called branded generics. as you mentioned, there are some that really aren't generics that get caught in the mix. but what would you suggest needs to happen yourself now from the standpoint of more transparency, more information about these drugs, the costs? we know that there's a whole patchwork of arrangements under which generic drugs are purchased around the country and the drug prices for generics can

differ greatly. where do we go in that realm? >> good question. to me, i think one of the most important things that we have to factor in in the collective desire to assure the affordability across the entire spectrum, and to sort of answer that question, i want to pick up on something that christy said in her opening comment. this is an amazing time that we are in the early stage of this innovation visa vi the specialty, this creates opportunity that comes with challenge. some would argue that in that context that our reimbursement systems haven't kept a pace with the advancements in scientific development. that's not an easy thing to address in the short-term. i think one of the things that over the course of today so far

that's been made clear to me is that we actually need, if you go back to doug's presentation, there is, you know, increased costs in the system coming with more specialty meds as a higher percent annual of those who are filed with the fda. how do we actually create additional head room in the current system to insure that there are affordable alternatives in those areas where competition can drive lower pricing? and there are examples in terms of sort of public policy, in medicare, in terms of co payments to part d recipients where you can incentivize greater use of generics, where the utilization rate is lower in the entire health care system. there's a lot of experiments

going on. and doing the analytics on a number of people there, we have heard about tiering for branded products. you're beginning to hear a small population of plans trying to move to tariers for generics or applying them in the area of the deductible, which in that circumstance you have to question whether or not the system is set up to drive the incentive for that utilization. if you combine that in some of the things, medicare proposal i shared has scored $18 to $30 billion in savings by the government. that can create not all but some of the head room to create time for us to figure out the new world order and the new world environment to have our own specialty meds. specifically the transparency. i think it is important, particularly in a sort of patient centric consumer driven health care system that, obviously, is in evolution, that we look for the areas that make

the most sense to be completely transparent. we have to balance that against the fact that many of the reasons for the savings are articulated previously is because of the level of hyper competition. and if it gets to a point where you're actually asking for all aspects of all negotiations to be open to the public, then you actually don't have a market-base delivery system anymore. so to me it's a balancing issue we'll need to be conscious of as we move forward while we're trying to create the head room for the innovation to come through because certainly it's good for the branded industry. it's good for our industry, but most importantly, i think that innovation is best for patients. >> what do we do about the situations, and we have had a few of them arise as you've said, where drugs, older drugs have been purchased, the prices have been marked up a great deal, there's clearly no relationship between the cost of production anymore and the price and lots of organizations are feeling the pain of that. what do we do and how do we get

some transparency into that equation that really does help us understand why these prices are where they are? >> yeah. i guess -- in some ways, in particular, with a couple of them the most visible, just to put the qualifier out there, these are companies that we don't represent. the ones that have been most talked about of late. i will say this, i actually think that if you look at some of the instances of late, there has been a level of transparency and scrutiny, if you will, in terms of the societal marketplace that has had an enormous impact on some of those companies. and to the extent that there are company that companies that are outliars to take companies that are watching more frequently with greater

sensitivity to health care costs. if you look at the particulars around the companies and whether it has changed everything from their business practices or their market evaluation, i think the societal marketplace, if you will, has had a significant impact of late. >> there's been a judgment imposed in terms of shareholder value and other things. all right, well, one of the third domains andy mentioned was incentives and hurdles. what incentives do we need to introduce into the market? and we can talk about the role of incentives in purchasing strategies. you mentioned the one important one, does the drug actually work the way it worked in trials? what kinds of incentives do we need to introduce and what are the hurdles? what are the road blocks? what are the current regulatory issues we need to get over in order to make these new types of arrangements work? so let's talk about that for a bit. christy, we'll come back to thinking of new purchasing

strategies, the move toward value-based payment. what would be incentives? what would be obstacles we need to get over? >> so we started working on this in my last role, so probably four years ago. and so i can probably start with some of the barriers as we have finally gotten a few contracts up and running. one of the barriers is the fact that when you run a clinical trial and get approval, what is in your label is what has to be the basis of the outcomes contract. so, for example, in heart failure, if we studied reduction in mortality and first time hospitalization, those are the end points we're allowed to contract on. if a payer or health insurance policy plan says i want to look at total hospitalizations, i want to look at x, y or z, unfortunately there's no flexibility for us to be able to actually put that in the contract. even though it would make common sense for them to want to do that. even a though we may say, yes, we'll put skin in the game and pay you on that. so that flexibility around what we measure is one piece.

>> and what would have to change for you to do that? is it fda? >> yes, it's at the fda level for us to be able to say, what is consistent with label, no misleading, not misrerptipresen but most importantly what they need for their patients. so that's one. another issue is incentives, if you will. so if we're trying to talk to a pbm, their only measure is their drug cost. so they have very little interest in talking with us about outcomes-based contracting because they are not responsible for the medical piece. and the short-term incentives versus a long-term gain, not only is a problem today, but comes as a bigger problem later. we have a medication, cart 19, co-developed with the university of pennsylvania where for cll, a form of leukemia, where we have

patients, children, who -- emily is one i remember, in particular, who was dying and she had gone through every other medication she did. she received immunotherapy, took her blood, rubbed up the t-cells and she's cured a few years later. we have many, many patients on the product already that's not yet marketed. it's not yet available or approved on the market, but it's life-saving. now, how do you charge for that? because it's a situation where, first of all, we can't talk to payers before we launching the drug. it's not legal for us to pre-approval promotion and talk about our cost coming, get ready, how are we going to manage this for your budget next year? so again, fda kind of guidance to then saying, what are your incentives? if you pay for a cure this year that actually the patients now for the next life expectancy lives to 80 years old, how could

we have a longer term mortgage life payment that we don't make anybody pay for immediately? there's all kinds of regulatory policy issues with that, but something i think if we work together, we could get to and would be a benefit as we look to cure more patients. >> let's move, justin, to the medicaid program. hurdles? incentiv incentives? what would you see as potentially needing to change that would give you more tools and effective tools on purchasing and paying? >> i think in terms of what we cover in health care, we're trying to shift to to value-based purchasing. and states are doing that in a variety of different ways. you hear of some things getting in the way of value-based purchasing, best price can potentially get in the way of value-based purchasing. >> let's drill down a little bit more on why best price is an obstacle. >> well, the best price

available, it can calculate in an arangement, what is the price of the drug, saying you can only hit it on this tier, there's interference there. it's used for those types of arrangements or getting out of those arrangements by pharmaceutical companies. the other is the fda drug works. and they don't approve it saying it works better than those previously approved or whether it doesn't work better than those previously approved. and that can create some friction when it comes to dealing with providers who seem to want to gravitate towards the newest and latest, even if it really doesn't turn out to work any better then a some of the alternatives coming down the pike before. >> so what is the solution there? more as we heard on the earlier panel who are comparing effectiveness information and data? >> i think they compared the

effectiveness would really help because potentially it can tell you which populations are going to benefit from drug a versus drug b or treatment regiment a versus treatment regiment b and can allow the state and management care plans if they go that route to really target the types of treatments to the individual. from the state level right now, what we're left with is really using our medical necessity definition, using the prior authorization and then developing arrangements around, for example, health behavior. so you try to reward recipients for healthy behaviors and give plans the ability or the safety ability to provide economic incentives to individuals for adhering to the drug regiment, for making it to their appointments, things like that. and we're trying to get at, when you look at health plans, we

have so much more data that's coming into us now. and we have to make sense of that data. but we can look at the health plans in our program and we can see how many diabetics, for example, are in each program. and you can see what the spend is in the encounter data and try to get it value and try to understand which plans appear to be getting the best value in the way that they treat diabetes patients and the way they treat hypertension patients and the way they treat various disease states and try to share that information to try to get to better care coordination. some of the savings that you saw was one of the biggest ones, adherence. and it was drug interaction. trying to incentivize those things and better care coordination to try to get to those cost drivers is something that we focus on in addition to the tools that we have. but the tools that we have, we've got to maintain. they can't be stripped of flexibility in that respect. the states have to have

flexibility to make the investment decisions in their own state. nobody wants anybody to be harmed. it's not a decision around trying to hurt someone. it's a decision around trying to help as many people as you possibly can with the resources that you have. and that's going to vary state to state what the biggest hot button issues are. we actually have that is worth mentioning, we used to have a disease managing program that was kind of, it was a disease management program that sat side by side for certain diseased states with our supplemental rebate program. we could not tell, it was so difficult to get the value, that we could not tell whether we were getting more bang for our buck out of the disease management program carve-outs versus the supplemental rebate programs. getting a cost in the realm here, it is very difficult to wade through it to figure out if you are getting value or not. >> so again, the importance of data, transparency around data,

the sharing of that information is very, very important. so brian, thinking from your perspective, managing benefits for the active employees of the state of ohio, the retirees of the -- the employee retires, what incentives do you think you could avail yourself of if they existed where you could do an up be even better of purchasing utilization? and what are the road blocks and hurdles? >> again, the plan design again is something utilization management programs is something we need to continue to the be able to use as tools to help manage the prescription benefits and make them affordable for retirees. we do really want the outcomes based, value based contracts to work. and i like your point that from our perspective, we want to see

the improved medical outcomes. and within a health plan type environment, you can see entities like humana wanting to do these kind of contracts because they are responsible for managing both sides of things. but there are struggles with that, the infrastructure they need to build, the data that they need to get from providers as well as humana's own health system and the pbm's claims, those are some of the barriers occurring. so what we can do is, our voice is, if you don't do this, we can move our business someplace else to someone else who will provide these kinds of contracts. the indications based contracting purchasing, i think one of the big barriers is just being able to know the medical diagnosis when they are actually coming to a retail pharmacy and trying to get the claim for one

indication or the other indication. there's no requirement for a diagnosis to be written on a prescription. and pharmacy is fragmented so they are not able to see the medical data. so that would be something that would be helpful with that indicationed based prescribing. and the private sector nice, that i mentioned earlier, asco, nccn, they have really -- entities that -- >> asco is the oncology society -- the other is clinical economic research, another private entity doing the analytic comparesons. >> so with the challenges with someone in the public sector or even in the private sector,

using that information for decision making, you know, can be a challenge. and there's a need for support from policymakers. what i do like about asco and nccn, they have given a tool to the doctors and pharmacists and other health care professionals who are with the patients. and then they have the discussion at the point of care, which actually helps to make that decision at the point of service point of care and takes away some of the barriers of using comparative effective analysis and a formulary decision. >> andrea, i want to go to you and talk about incentives and obstacles but also want to bring in the employee perspective. because your employers are always in a dance. they want to do things that will get the right treatments to their employees when they're needed. they want to keep the costs affordable, sustainable. but they want to manage this as a benefit and really as a

benefit for them to essentially offer health coverage to their workers and get the right care to the right person. what are the strategies that employers think are going to help the most in creating this relationship and maintaining this relationship going forward with their workers? and yet get them to an affordable, sustainable place. >> again, it does vary because plo plo employers need to balance the cos costs they bring to employees. health care is part of their business strategy as i said, but it is also a holistic approach, it is not just pharmacy and includes medical as well. in our discussion here today being on pharmacy, but the other piece of the equation is medical with health care being a piece of that. so, you know, prescription is

rising currently. new medical trends are slightly lowering in some areas. i think this is a constant shifting and they are doing what they can to basically see where the environment is as of today and provide what is best for them. >> so one approach that we have heard a lot about already is value-based insurance policy design where, in effect, co pays would be waived for the most effective drugs, the most cost-effective drugs, and potentially be much higher for drugs that are less effective. what about -- can you sell that to employees in the current environment? would you think that employers would be on board in moving more in that direction? >> yeah. we have worked with employers to ensure that we are providing them with what they need. so if that would work for them and that was their strategy,

then we would. again, it depends on who the employer is and how they want to see this fit to their business strategy. >> all right. i want to give you a crack at this notion of incentives, additional incentives that would spur even more greatly use of generics. you talked a bit about that earlier but i want to give you a chance to put other ideas on the table or hurdles that need to be gotten out of the way. >> sure. i'll take generics and touch upon bio similars as well. i think to take advantage of an increase in the level of competition in the generic marketplace, we should be looking at various policies that will induce that. that will support that. i mentioned there are changes to co pays in part d before. recently in the budget agreement that congress passed, which is really good news that the government is staying open, the

reality is that there was a rebate provision that applies to generic drugs that to be candid a lot of people on capitol hill vote before and after as the provision to take care of some of those anecdotes and outliars recently in the news. the challenge was it was applied to the generic industry. in fact, one of the ceos of one of those companies publicly said he supported the provision. the reason is he doesn't run a generic company. so the net effective is intended to be an inflation adjustment rate rebate for generic drugs in the rebate program. but it will affect companies who make no change to their pricing dependent upon their customer base. and if and when that happens, there's no guarantee each individual company is going to actually stay in a particular therapeutic area. again, thighly competitive, high he competitive. the net effect of that to states

like florida and others, they are going to be relying on the higher priced innovative product that could negatively impact the state budget as opposed to the positive. so that's one where we think, while there were understandable intentions going in, in part because this whole agreement came together in a matter of 48 hours, there are unintended consequences because not all aspects of the ramifications were thought through. the last thing i would say in terms of bio similars briefly, it's interesting that just in the course of, i think, today we have heard numbers like 44 billion, i think, which was the rand study. or talk talked about the 1070 billion that express scrips has put in at 250 billion. the reason we have the wide range is we don't know. we're at the dawning of this. and what i would say from a public policy perspective is, if we get the policies right that clearly support a pathway that

increase the playing field in the marketplace for bio similars as opposed to putting hurdles in their way, whether the hurdles have to do with things like naming or labeling or reimursment, then we'll be on the lower end of that number. and the reason i think that's important is it goes back to creating the head room that we actually need to get these first in class truly innovative things to the market and to allow them to grow to create a pathway that we don't put unnecessarily hurdles in the way. i will tell you on the generic side, we see more of the bio similars getting to market. >> you say a bio similar carries initials of the name of the

producer of the biosimilar to make it harder to make the bio similars interchangeable from one to another. >> correct. there's a lot of this that needs to come through, there's a lot of issues pending on the fda and cms in terms of the approval process. but we would actually point to europe, which i think this was eluded to earlier today, it has a lot more experience. it's actually a little bit converse to what we're often used to in the pharmaceutical market, that europe is ahead of us in many ways in bio similars. and we can look to policies they have adopted in pressure tests, whether appropriate here. and in many instances, whether it is days of use or some of the policies they have implemented to try to encourage the rapid acceleration of taking bio similars or things we should be conscious about here. >> i want to come back to one more fda-related question. there was a reference in an earlier panel to the backlog of the fda approvals of generics at fda and the potential of a

general generic fee, pushing forward on that. speak to that. >> we have a jennerigeneric dru fee. in many ways, the branded industry had a 20-year start in terms of user fees. is it an issue? absolutely. it's a real issue. my sense is that in discussions between the industry and the fda required through the enactment of the continuous engagement dialogue, my experience now 90 days in at gpha is that there is a recognition, both by the agency and the industry. and that, in many ways, it's sort of feeling like we're driving through a work zone or a construction zone. and we're learning as we go, which means that i think, and my experience to date in talking to fda leaders has been, i'm

optimistic that the commitment to take the learnings from the first into the beginning discussions of the second, which has to be reauthorized by 2017, that there are opportunities there. i think it took the fda and the office of generic drugs, they have been extremely committed to try to build the resources there, hiring people earlier this year, almost a thousand hires earlier this year. and dr. uhl as the head of obg, those doctors are in the process of being trained. and over the last couple of months, if you look at the total data of actions being taken on generic applications has gone up. that's a positive trend. is it at the level where, you know, we can look out at the short-term and say we think the backlog is going to go away any time soon? probably not, but there are positive trend lines we have to

capitalize on and focus as much on the areas of alignment as we are or if not more so than on the areas where there are things we still have to work through. >> all right. to this point, we have lots of strategies here to consider as we move forward in this area. we do, once again, want to open it up to questions from all of you. so once more, please come to the center aisle and avail yourselves of the microphone. go ahead. >> ilene wood, chief pharmacy officer for capital districts physician health plan in albany, new york. great panel. i wish i could ask you all a question. but i have to go to the hot seat to miss shaw. it's obvious, you know, you want novardis as an innovator and want the message to be out there, but there are two pieces of information that have been published recently. i would like you to respond to or comment on. the first one is surrounding

blevav published by bloomberg business week. between 2007 and 2014, the price of that drug increased 158%. so that's the first statistic. and the second piece is published by randall osen recently. and this shows, i think this is 2014, in any case, 10 billion spent on rnd versus 14 billion spent on marketing. so can you please comment to both of those. >> sure. so the first question regarding glevac, one of the things you heard quoted here and a couple times was that the increase in branded drugs is 13% year over year. we also looked at the net price, which is hard to get, but as they took all of the pharmaceutical data and looked at gross to net from all the rebates given, they saw it was a 5.5%, and that was just

published in the vent couple of weeks. and that's the lowest increase in the last five years. so as you look at this transparency piece of what is actually the list price, what is actually the net price, you get two very different stories. >> so does that affect the price statistics that ilene just mentioned? >> absolutely. so glevac's price has been increased, that's not the net price. in fact, i would say probably all, because as we look at a patient -- we see what patients are paying. there's no patient that pays over $100 getting glevac. most of them pay $100 -- >> per month? >> per month. and our patient assistance program, last year we gave away 500,000 free medications to those patients. so when you look at the whole, i mean, it's the one piece is that it's very important to look at the whole piece of the health

care system. so nine out of ten prescriptions right now are all generically written. so the wave of innovation is just coming back. and as you look at only one out of ten prescriptions being branded, you also have to look at the total amount spent on brands. 10 to 12 cents we heard today out of every dollar. that was true for the last 50 years and it will be true for the next ten years. but the costs of health care, a dollar spent is 10 to 12 cents is spent on the brands. so when we only look at one piece of the health care system, we have a really hard time because we are always just talking about this price, this price or this price. if we could get into a discussion about what's the value of it, there's 450 billion dollars worth of value since glevac was approved. patients don't die of myeloid leukemia. they lead productive lives and die of something else. and novardis captured 9% of

that. we need to look at the big picture and not one piece of it. >> not 9% in terms of the profits on the drug or -- >> in terms of what we gained in revenues from glevac over that period of time. >> just to take the second part of her question, which is marketing expenditures versus rnd expenditures and whether those, in many instances, as apparently the data show in the case of glevac, those exceeded the rnd costs. speak to that issue if you would. >> so i'm not sure -- i haven't seen the data -- >> randall s. olsen 2015. >> so again, that's one year. i would like to sigh it over time. but novardis, typically we rank number one. i don't know if we are number one or number two in terms of the money we spend in rnd as a percentage of our sales or in total because we are one of the

top -- the number one pharmaceutical company. so we spend more in research and development than any other -- in fact, if you look at google, apple and -- you combine them, and toyota, combine them, those three combined don't spend as much on research and development as the pharmaceutical industry does. and you look at, what is coming from that? people look at one drug and one price. let me give you a couple of things of where we spend that money. so two things, one is if you look at patients who have brain disorders, alzheimer's or autism, it used to be that, you know, to get embryonic cells, now we have brain tissues in a dish. you can take a patient with autism, take the cells from their skin, actually regenerate the cell back to the embryonic stage and regenerate factors of brain cell. now we can look at the brain cell, see what is wrong with it

and then we can find, how do we treat it? so we have now been able to do that. if you look at other innovations, we have thousands of researchers that only do early exploratory research. spending over a couple of billion dollars a year in novardis alone in early research where we don't know what the drug is. so as you look at the total price and transparency, it gets a little difficult to say one point in time, one drug one year or even this, et cetera, when looking at breakthrough medicines for the future. >> an area where more information would be helpful for everybody. we'll go to the next question. >> hi, my name is elizabeth roid and i'm the health and science director for citizens against government waste. there's been a lot of discussion today on getting the government more involved in pricing and purchasing strategies. and if you look at history when the government utilizes price controls and heavy regulation to

lower costs, you get shortages. our organization looks at competition to lower drug costs. mr. davis, you did get a little bit into the fda backlog, and i was wondering if you could expand a little more on that and how organization such as ours and patient groups and other people here could help get that accomplished and speed up those approvals and get your drugs, your company's drugs on the market to lower costs. and miss shaw, it costs $2.6 billion to get a drug to the marketplace. what are two or three good things that could be done to lower you research and develop costs so that it would create more innovative products, more competition and hopefully get consumers more choices in lower costs? >> all right. in two seconds or less, chip, why don't you take the first piece. >> sure, thanks for the question. i think to reinforce, we have to

get -- i think in terms of some of the technology that the agency has been in the process of developing and now they are in the early stages of implementing, i'm very optimistic that will reduce the amount of time and increase the level of dialogue both ways in fairness. because obviously we submit our applications and then get responses from the agency back that are less than approvals that on our end we are working as individual companies and as an industry to make sure that we find ways to respond back to the inquiries we get from the agency as expeditiously as possible. and just briefly, i know we are time sensitive, that the role of the patient voice, the patient and consumer, both of whom as i understand it, we heard the differences between those two and the approaches they take, but to the extent there's a general agreement or consensus that competition is a good thing to ultimately lead to lower

prices. i think their voices are in the ongoing discussions on how to make sure we are accelerating generic applications through the system is one that would be welcomed. >> christy, take the initial questions, particularly around rnd. >> how do we decrease rnd costs? you know, what we saw last year in terms of the number of approvals, also the breakthrough status on approvals is a good sign for us. if we can work more closely together and collaborative together to speed our ability to get life-saving medicines to market, the speed of it alone will help reduce costs. and the fact that we know more about the science where we are not actually doing studies that we hope will hit some of them, but as you heard today are more precise, once we know the science and who better responds to it, it will make us more precise in our clinical trials. if the fda gives us guidance and they know what is making the patient better, it's easier to approve than the mass chemotherapy anecdotes of what

we had in the past. the second piece, i think, that will reduce the cost of research and development is technology. we're seeing technology now and you see google health, for example, and some partnerships are trying with them, if you can run clinical trials where patients don't have to go to their doctor to get lab tests done all of the time. they can actually wear a watch, we call it a mosquito watch to take their blood while sleeping and they can monitor them so they don't have to take long journeys, but you can measure the data in realtime, that would significantly reduce cost. telemedicine and doing trials with people in the country, like my mom, if she could have gotten in the trial for inhibitors in rural iowa, that ability to do it remotely, less costly and get more patients because it's quicker, i think technology would be a second piece. >> all right. well, i want to thank all of you because we have fulfilled andy's request that we talk about some of the changes that could be made in those three domains that

he referenced. we talked about the opportunities and value-based payment arrangements going forward. we talked about the important role of data and transparency. we talked a great deal about hurdles that need to be overcome. and incentives can be put in place. and just to circle back on andy's final point, we all have a lot at stake in implements the good ideas. because as he said, the right ideas will not only get greater access to patients for innovative therapies but they will expand markets and award investors. these are not going to be easy changing for many organizations to undertake, but they are extremely important ones. and thank you for putting them all on the table for us. we are going to take a 15-minute break now. we'll see you back here in 15 minutes as we move to our last panel discussion. we will drill down more on outcomes based payment and value based payment. thank you very much. [ applause ]