 Welcome everybody. My name is Sarah Eisen. I'm from CNBC. I co-anchor Worldwide Exchange and Squawk on the Street, two of our daily shows based in New York from the Stock Exchange. And I am very honored to be here with you today to talk about one of the hottest topics I can tell you on business news in 2016, and I know it will continue to be so in 2017. So welcome to our panel. It's about building trust in the health care industry. Welcome to our distinguished panelists, whom I will introduce them to you in just a moment. But just as a little bit of a setup to the discussion, I wanted to talk about some of the headlines from 2016 in health care. It was a rough year. I think everyone might agree for health care, both in the markets and in the news, from Mylan's price hike of the life-saving EpiPen or Martin Screlly, so-called Pharma Bro, who got a lot of news coverage and who increased the price of a critical AIDS drug by more than 5,000 percent, Valiant Pharmaceuticals, its price raises, Theranosus blood testing issues and its blow-up. The headlines and the outlet rage left many wondering whether there's a trust problem when it comes to health care, dealing with its patients and putting profits before patients. Now the government is certainly on the case. Senators are called for hearings. We heard a lot about it on the campaign trail from both presidential candidates. It continues to be so with the president-elect bringing up Pharma last week, getting away with murder. But that was 2016 and now we're starting fresh with 2017 and we've got some key industry leaders to talk about some solutions and some ways we can have some forward-thinking from those in this room and how they can partner with governments and with doctors and with hospitals and with patients. So let me introduce our panel to you. We have Franz Van Houten, the president and CEO of Royal Phillips, also a co-chair here at the World Economic Forum. We have Ian Reed, who is the chairman and CEO of Pfizer. We have Rich Lesser, who is the CEO of Boston Consulting Group and is a specialist on health care. We have George Barrett, who's the president and CEO of Cardinal Health. And we have John Milligan, the president and CEO of Gilead Sciences. So welcome to you all. How I thought we could do this conversation is talk a little bit about some of the issues in the news front and center. I'm sure everybody wants to know your reactions to some of the comments that we've heard from the president-elect and some of the hot button topics and then move into a broader discussion about how to really create solutions for a system. What is value-based health care? How do we achieve it? How do we increase transparency, data, and most importantly, medical outcomes? So Franz, I'll start with you. Is there a trust problem in the health care industry? That's funny. You ask a technology company whether there's a trust issue. But let me give you a kind of a broader landscape on this question. First of all, health and health care is a very big market and it has many, many players. Providers, doctors, insurance company, government and regulators, pharma companies, technology companies, labs, you name it. So it's very wide. So I don't think you can paint everybody with one brush. That wouldn't go. And if we put the patient at the center of this discussion, the advancements that are being made in health care at this time are phenomenal and deliver great promise to patients. And while we also live in the internet age and social media give people access to all that information, they want to have access to the best. And if they then at the same time maybe feel that either because of an insurance policy or because of price or because of other reasons, they are being held away from what could be a treatment for their loved ones who maybe have cancer or an other serious disease, then people get upset because it is about them. So if there is a trust issue, I think we need to recognize that there is a lot of emotion at stake where people really want to live well and return to a healthy lifestyle or want the best for their family and want to have access to the best there is. Now, we know that medicine advances, that is great. And I think many of the companies here have their contribution to that. We invest in research and development to make these advances possible. And that needs to be paid for. Now, so on the one hand, you see precision health around the corner. Wouldn't that be great that you can get specifically for your disease a treatment that works first time? You know, you diagnose quickly, you treat fast, you go home and you recover. I think this is the holy grail. We are making advancements to make that possible, but it has a price. So it is very logical that there is also a discussion about, well, it better works and we only pay if it works, value-based care, outcome-based care. I think that is a trend that is going to happen, you know, whether there is a repeal and replace or whatever law we talk about. Most countries in the world somehow will move to outcome-based care where, let's say, every actor in the system will be held accountable to deliver. That also applies to us as a technology company. If we are instrumental to diagnosis or minimally invasive treatment, we need to be part of the outcome-based care. So we have, for example, been shifting towards contracts with providers to say, you know, we want to be a participant in your productivity targets so that, you know, we push outcomes and we push productivity at the same time. So overall I would probably vote that maybe there is trust issues around the fringes, but overall health and healthcare is a fabulous industry that really helps people. How do you put a price, John, on a life-saving drug? You are one of the early poster children for this with the hep C treatments, $1,000 a pill, $74,000 for one month supply. How did you deal with that? What were some lessons learned? Well, we didn't deal with it very well. I think we didn't talk about it enough. I mean, it's the interesting thing. It is still your headline. It is still the headline that gets written despite the fact that the prices have come down by more than half. So rather than raising prices, we lowered prices very dramatically. It doesn't get talked about very often. Part of it is because we run in a very non-transparent system. There are literally hundreds of groups that we deal with in the United States. There are hundreds of different people and organizations that we have to negotiate contracts with, all of which are, of course, confidential because none of the groups want the other groups knowing what goes on. So we have to talk about things in generalities. But so now you've got, let's take hepatitis C, very difficult disease to treat, enormous side effects of previous treatment, patients often couldn't come on treatment because of comorbidities. Now we can treat nearly everybody. The cure rates are extraordinarily high. It's incredibly safe. The prices come down and still what we hear about is two years ago when the list price was high. So there's a lack of transparency. I'm relative to most other kind of modalities. This is a good bargain. And remember, it's not a therapy year after year after year. It's 12 weeks, eight for some. And you're done. And then the system reaps the reward later on. It really does benefit the entire ecosystem it goes on. What's the problem with that? Again, we have a fragmented system. The pharmaceutical budget is one thing. The hospital budget is another. Outpatient budget is another. The system that gains may not be the system that pays. And so that is another issue that we're having to deal with everywhere that the benefit that we provide may not be seen by someone else. For example, Medicaid is not treating many patients in the United States right now. Why is that? Well, it seems like they're hoping they'll age into Medicare so somebody else will have to pay for it. Medicare pays for it because they're going to have this patient for the remainder of their life and they know that they get great benefit from that from their system. In fact, the payback is only on the order of a couple of years based on the savings that they've calculated. Same with big groups like Kaiser and others they've calculated. This is a really valuable thing. We talk about value medicine. Often we're talking about cost, but the value to their system is very, very, very, very high. So Ian, you know where I'm going to go next when it comes to prices. Maybe I'll read for you a direct quote from what we heard from President Elect Trump last week. Pharma companies are, quote, getting away with murder. Pharma has had a lot of lobbies and a lot of lobbyists and a lot of power. And there's very little bidding on drugs. We're the largest buyer of drugs in the world and yet we don't bid properly and we're going to start bidding and we're going to save billions of dollars. Is he right? Well, let me just go back a little bit to your original question and I'll get to where President Elect was or is. I think in the issue of trust is a problem of perception and trust where? If you go into Asia or Latin America, the trust of the industry is probably 80% on the indices of trustworthy. When you get into Europe and the United States, it drops and it drops for our industry, it drops for physicians, it drops for insurance companies because the system is terribly complicated and not transparent. So, you know, and I feel that in that sense that perhaps the pharmaceutical industry has not done a good job of communicating but most people don't understand that and I was in a pharmacy the other day. The older lady was trying to buy some medicine. She was complaining, she was getting some pills and she said, it can't cost them that much to make these pills. That's not the point. The pill is irrelevant. It's the knowledge you have to accumulate to make the pill. The pill is a vehicle of delivering knowledge, well, curative knowledge. And that's what our consumers don't understand because we're not close enough to them and we can't talk to them directly. We talk to them through intermediates like the physicians, like the insurance companies. They perceive healthcare costs increasing on themselves not because our prices are increasing. The branded pharmaceutical prices in 2015, the patent protected prices in the United States went up 2.8%. What's the problem? They're up 2.8%. The trouble is it's a perception again. There are two pharmaceutical markets. There's an ethical market, people who do research, people who price responsibly, who price to recover their costs to capital and there's another part of the pharmaceutical industry that is generic and they don't do that which is where you are with my land, where you are with Scarelli, probably where you are with Valiant who didn't do any research. So there are two different worlds. So I would say there's a perception issue of who is farmer and most of the problem of the reputation has come from those that I don't consider part of the ethical pharmaceutical business. Let's go back to what the president elect. I think at this stage he probably hasn't been briefed as much as he will be briefed to the extent of competition there is in the system. Medicare which is a huge undertaking that was put in place for the drug benefit by the Republicans some years ago has come in 40% below its original costs and the premiums in Medicare on average over six years have gone up $10, $10 for the whole six years. So once again I think there's a perception issue out there and then on the other side of course there's bidding. We bid all the time with insurance companies and you know it's very difficult to get a product listed. But not government. Governments buy through the insurance companies and on Medicaid they have a best price policy which was the agreement we had with the government that this is an underprivileged part of society and Medicaid would get the best the lowest price we sell our product to plus an additional discount that states insist upon. And then we also have a non-commercial price for the veterans. So once again it's a misperception and it's a very complicated industry. So I think once the president elect gets briefed on this he will perceive there is a huge amount of bidding and extremely aggressive purchasing. And yet Richie is a populist and there is outrage over high drug prices despite what Ian says whether it's a communication failure on part of the industry or not. What do you see as a solution? Is this something that the industry can self-police or do you expect Republicans and Democrats to both get on board with this? It's so hard to predict. I mean the main thing that we're living in right now is the difficulty to predict on how legislation is going to flow in the months ahead. And even both the president himself and then the president elect himself excuse me and the leaders in Congress have had different positions over time. I do think as it relates to some of the medicines or therapies that are off patent for long periods of time a bit more industry discipline. I mean when we look at other industries that have been challenged with different practices I think industries have often stepped up to set a set of guidelines about what are reasonable expectations and to do a little bit more self-monitoring and more transparency and involving others without it resorting to government and legislation that has been more productive to address the problem areas without the second order consequences in other areas. Please. I just don't see the self-regulation around pricing. I just don't see it because every entity needs to make its return its cost to capital. And I don't think it's appropriate in a system where you need price signaling to decide the allocation of resources. How do you look at the situations around the ones that you cited around? Well I think the my land situation is just clearly a regulatory failure. As is a lot of generics that don't come to market you have an FDA which is in charge of the safety and the efficacy of drugs and you have a set of complicated rules about what AV rated means. So the reason the monopoly was maintained on the AV PEN was because of instructions in the packaging insert. I don't know how to do the drug. I don't know if the drug delivers the same quantity of product to the or the injection does that. The instructions to use the device or the generic device was different from the instructions to use the PEN and hence it was not a generic it was not AV rated. It's a failure of regulations. George I know you do you do have something to add here. You guys have looked at the bad actors if you will. Who's actually raising prices and you have a unique lens into who's doing it and how big a problem it is. So let me I'll do that first but then I want to back up to the bigger question that you asked. Sure. If it's okay. Yes. So we have a bit of a unique lens at Cardinal Health on the healthcare system and particularly in the U.S. where we touch probably 75 percent of the hospitals every day probably 25,000 pharmacies every day and clinics the fleet whole system. If you look at the last couple of years and let's talk about the and we look at the largest price increases by percentages. I went through this at one point I've been in the industry for 30 years with our group and I looked at 10 names and two of them I recognized. Eight of them were players that entered the market as sort of financial engineers temporarily and didn't have a long-term perspective long-term perspective. And the damage that that can do to trust is really big. So I probably would highlight that for I'd also highlight this you may not love but if you look across 4000 generic drugs because we touch both brand and generic drugs we have to that's our as as the part of our business that's in pharmaceutical distribution. What we saw during a period of time was probably 400 drugs out of 4000 raising in price as opposed to the historical norm which was about 150 or 200. So the reality was on and that's already sort of flipped back more towards the norm. So I'm not sure the systemically that's our our big issue but let me just back up to the trust issue. So if I could it's not just about trust in the healthcare this is a broad issue of trust between people and their institutions. You could go to energy companies you could go to any number of fields around the world and you'd find that there's been a breakdown of trust and I think Edelman this morning published their data on trust. This is a huge issue and I think perhaps the CEOs maybe we've underestimated the implications of breakdown in trust and what that does in terms of come causing bad policy or the search for blame by the way the search for blame I would argue is the enemy to the search for solutions. You always go in the wrong direction and I can give you a million examples of that. So I do think that from our standpoint this is part of a bigger picture of trust between people and their institutions. I do think we feel it in healthcare I do think that certain players have contributed disproportionately to that and I think that there are ways for us to rebuild trust but I don't think it's just rebuilding trust in healthcare I think as leaders it's rebuilding trust broadly. Let me turn it back to you then on a specific issue as it relates to trust in the industry that you've been sort of front and center on you've had a prescription drug crisis in the United States more opioid related drug deaths especially in West Virginia and you've been involved in litigation as a supplier whether you can you correctly get the blame or not it's there and it's just another bad headline to add to the industry problems. Yeah so let me that's actually an interesting example so again this is this is a case where as the distribution player in the market we don't manufacture we don't import we don't have to find the quotas of opiates we don't dispense we don't write prescriptions we are an essential supply chain manager but in again in full responsibility and accountability we probably could have had better control systems but we wound up being the target of that activity so again what happened instead of looking at ways to coordinate between DEA, FDA, the pharmaceutical industry, the pharmacy industry, the boards of pharmacy, clinics and clinicians and the physicians we spent all of our time looking for blame and trying to figure out where we can point a finger we are just now beginning to talk about opiate abuse and the way it should be discussed which is a broad societal issue which crosses boundaries which has huge complex root cause issues and which requires coordination coordination is sort of the key to this and by the way there's no incentive there's you know there's a huge probability for society it's partly due to breakdown in the social fabric and in parts of the country it's due to the availability of these drugs but it's also because there's no premium that's paid for deterrent proof drugs so you know we're wringing our hands we have simple release drugs and the insurers won't give you a different price if you produce a drug that can't be abused so there's no incentive to create where's biotech on all of this I mean has biotech found its voice within some of these issues as a fairly new part of the industry well we've touched on a lot of issues I don't know which one you want to go to for we haven't touched on opioid abuse that is a I agree though that is a huge issue if you think about where trust is lacking right now the families of people who have kids or young adults who are addicted they don't know where to go and they're not getting any help that part of the system is is absolutely broken and I do think it was astonishingly silent during the election cycle about this problem which is huge we see it most acutely because if you abuse opioids your chances of getting hep C are very high so where we see outbreaks we know there's opioids and it's just everywhere it's really shocking everywhere small towns all over the world in terms of I want to echo some of the things that Ian said I mean talking about the system that we're in and what George said there are always going to be opportunists and the system that we're in allows that to occur because of the regulatory nature of our business factories get obsolete people move out of making products because it becomes unprofitable if they have to reinvest in these in these institutions we're talking in their green room beforehand about you know it takes five years to put a pharmaceutical plant in place takes three years to trip to transfer a product line from one group to another it's a lot of work and a lot of expense and so opportunists can take advantage of that that's some of what we saw in some of the headlines that were created because of the nature of our business when plants get obsolete it's hard to reinvest in the generics industry in terms of the trust between us and our patients it's it's it's really interesting because we have done so much to make the experience better for patients we have invested lots of money lots of time lots of effort in making things better for patients a good example of that is you know an hiv you have to take multiple medications and you know we figured out patients weren't always taking all their medications sometimes they take some sometimes none taking none is okay but taking only part of your regimen is really bad and so what happens when you do that you become resistant to a virus that you can then spread to other and there were incredible predictions of of multi drug resistant hiv being everywhere going back 20 years well 10 years ago we came up with an idea for a single tablet regimen what's what's the importance of that it's just one pill it's one pill instead of two and so you can only make two choices you take it you get the benefit you don't take it you don't get the benefit that concept took hold in hiv and the rate of resistance is now much lower than it's ever been so we've created a better environment long term for the patient and the doctor in fact the doctors do complain that their their practices are getting boring because they have less complicated things to deal with these days and that's good we've made medicine boring for these people because we've made it easy so this is the kind of stuff that biotech does is the thing that pharma does all the time we're thinking about how to make the patient's life better maybe it's about lack of of information france lack lack of transparency as a patient do you have access to this kind of information and these choices and as doctors i think it would be good to to talk a bit about what does it take to to get it right yeah right because otherwise we get hung up on on on the on the issue of the week i see a lot of advance in the coming years data internet of things will play a big role in it and that could be overwhelming because we also heard from this edelman study is that change is not necessarily perceived as good it unsettles people so communication is very important and when somebody has a disease we need to communicate along the care pathway because in the end a cancer patient needs to be followed through all along the cycle of treatment all the way to recovery hopefully and whereas a cardiovascular patient needs a different communication so we need to bring information together that today is carved into silos and i think there is certainly technology can play a big role to make sure that patients perceive the care to be delivered around them whether it's from specialist a b or c their primary care doctor the information about the medication the information being all together so that nothing gets lost mistakes are not made and i think it will have a tremendous effect on outcomes and on productivity and so i think this is where we are all heading and it also requires deeper collaboration between us because giving a medication if we can prove that it works right if you can have a feedback loop through the cloud through data and where we can also measure the compliance that we would just talked about right so that that we know that the patient is following the regime you close the loop information gets delivered and i think everybody will gain from that so i think we need to integrate the health care system further everybody everybody wants to go in there um again just in the in the spirit of what can we do i'm going to give an example of something and it is about the patient so just as a pilot in 2011 they all had children's hospitals did a collaboration we called the solutions for patient safety we started this with some children's hospitals that expanded to the adult hospitals started with 11 hospitals looking at improving we know that adverse events happen in hospitals or in all of our health care facilities and that we have to be accountable for those we set bold goals we agreed that we're going to share information across the board things that happen to patients while they're already in the hospital patients on our watch yeah staff infections stuff all kinds of things ventilator acquired infections surgical site infections okay many many of the the factors we monitor uh pressure uh wounds etc bold goals transparency sharing information across the systems including bringing the boards involved and the patients and their families that collaboration now has over 100 hospitals virtually every children hospital in the country is participating in this initiative and we're dramatically reducing infection rates dramatically reducing infection rates and it's happening because people are coordinating they're sharing data and most of those institutions are actually publishing their data on their own issues on adverse events happening in their hospitals and the patients can see that data that is powerful that's the kind of solution but it requires coordination and data and data and again not a search for blind solutions you've teed up rich pretty remarkably you've just done a tremendous comprehensive study on this very issue exactly and to build on the same year we just published with john some researchers from john hop johns hopkins and university of michigan there was only one year where the federal government asked for hospitals and counties to submit data in a way that you could track it to the either institution or county level and we went back into a 22 million patient records from that year and we went and looked at the risks of a set of diseases of prevention elements of safety related elements and we found in that data set remarkable variation remarkable 10 to 1 on safety related issues inside hospitals 2 to 1 on myocardial infarction and when you tear it apart and you say well maybe that's because the patients were sicker they were had comorbidities they had other factors that only explained 30 per 30 to 50 percent of the variation so half of this enormous variation between top performing and underperforming hospitals and geographies is driven by unexplained factors likely processes that exist in the institutions and the ways they operate and you say how can that persist so some of it as we discussed earlier in this is because of the fragmented nature of the industry and some of it is around the regulatory challenges that we're doing with but some of it is we've grown up in a world where tracking outcomes in a transparent way just isn't done the data isn't collected in a systematic way after 2011 the government changed the rules in response to requests and that data hasn't been collected since then and so I think one of the responsibilities on top of the other elements that have been discussed is how to create more outcomes transparency to allow the industry to coordinate across the value chain to allow the people that are coming up with innovation even if it's very high priced innovation but that's meaningfully having benefit across the system to be able to be rewarded for that to encourage investment in that and to frankly set a higher bar for institutions to up their game this isn't about hospitals not wanting to do great stuff every hospital has physicians who care but but institutions when you don't have outcomes data it's hard and when we've had outcomes data if you look at hip and knee replacements in sweden if you look at the martini clinic in germany on prostate treatment if you look at cystic fibrosis in the us if you look at the story george just told when we get to environments where there's more transparency that different institutions can see what best practices is have an incentive to learn then the potential to get improvement is dramatic and the reward for those who make that happen is very high but i would argue that you know this is all this is all true undisputedly but it's missing the point the point going back to the original loss of trust why have politicians lost trust because the population doesn't believe they're working for them why is the health can health industry lost trust for the same reason the patient isn't at the center the patient feels that the parts of the system making money off them are not really focused on them as a patient and so i think you have to start from the patient and then start and i believe in in market based incentives so who should look after the patient insurance companies are not a good surrogate because there's too much churn they're not interested in long-term health outcomes because they don't hold the patient long enough but in the united states in europe 90 percent of the time the hospital and the doctor groups in geographic area hold the patient from all of their life more and more so now in the united states these hospitals are buying up dot doctor practices so for me you get rid of all of these tactical issues if you simply say you're going to put the risk of patient wellness or care on the providers you can use insurance companies to evaluate the risk in their inherent population but you need to say to the providers we're not paying you for how many MRIs you do we're not paying you for how many emergency exits you do we're not paying you how many scans you do but paying you if your population gets healthier and we'll and so the doctors are best placed to take that risk and decide what to do about it so they will pick the best medicine value-based medicine if they believe that will make their population healthier they will invest in smoking cessation if they believe because they're stuck with a long-term cost of that patient population so all of their incentives are focused on getting that population healthy and that solves all of the that the every incentive is aligned they're going to use the right technologies they're going to do home care is anybody talking about this is this happening as we speak i mean we we have partnered for example with west chester health in in new york where there's an active outreach program to the community it involves the community doctors in order to to influence behavior of consumers and to try to find an earlier intervention point before health issues escalate to the point where they are becoming very costly so i think the i also see it in other countries where doctors providers take more accountability for the system so i think we are on a good path and data is certainly going to enable it home care and taylor health are going to make this more efficient and i would hope to see that through taylor health doctors can be in a proactive coaching role rather than in a reactive you know pay per volume have to be a risk and they have to be incentive has to be you're a physician group you have these patients for the next 50 years if you don't make them healthy you're going to lose money and everything as flows from that i think we're talking about four things that together become very powerful one is more end-to-end ownership of the patient with a longer-term perspective rather than the way it's cut up today a second is an alignment of this the incentives in the system around patient wellness and around long-term health a third is investments in technology both classic therapy and and and medical technology as well as on data and digital technology to be able to supplement that and the fourth is better tracking of outcomes and and collated in a way so that people can access it and leverage it and creating more of a best practice environment to learn and if you put those four elements together patients start to feel that they are back more at the center of things and that there is more of an opportunity to to rebuild some trust in the system absent those four people i agree think the system's not in it for them but you need government too right here well you need government to appoint the insurers as the as the or some entity not necessarily insurers as initially saying what is the sickness index for the population at the hospital is treating so they can give them through insurance enough money to treat that population and then to set five-year goals where they'll pay them less as they move towards healthiness so you need a government role there but you need the hospital because all of this issue of data and medical records and all that stuff has to flow from why did the hospital want it why do they need it you know data Wall Street has data because they need it they pay for it hospitals wouldn't have all these crazy systems if they couldn't charge per event they'd have one data source they'd become efficient so you gotta just put the incentives there and the rest will flow do you agree George yeah i mean i think some of this is actually in motion again this has been a little bit us centric for the last couple minutes so i apologize to those that would have been working Europe too yeah working Europe too yeah no and i think you're saying it it has um some of the activities that were i mean we've got no providers here sitting at the at the panel but there are some in the in the room and i think some would say that we are doing these things we are beginning to drive drive data we're beginning to share information with our patients we are coordinating care with a sort of almost a general contractor of care in a much different way and i think those are all important i do think the incentive systems obviously play a critical role in alignment but i actually see some of the changes happening and this to some extent it goes back to the level of trust some of the good things happening um are not really interesting stories at a time where people are angry right it's just not a great headline but there are some really important things happening but underneath the surface probably in every one of our businesses in ways that are really powerful and uh so so i think those are really becoming about the patient i think when we make it about the patient we increase trust i was with an insurer a few years ago the head of one of the companies and their perfect world would be if doctors disappeared that was his comment if doctors disappeared because they know how to treat you they know what the the the the the uh what the protocols would say how you be treated and the doctors just keep on getting another way they keep on wanting different technologies and different medicines and increasing the cost i mean that was a safe face of view if i could only just get rid of the doctor and have the patient treated on protocols that we've set up costs we go away i mean that's kind of what's happening i think that's kind of the heart of why there's why patients are unhappy i know the the physician has lost control on that that relationship with the patient has been destroyed turn it back and so the you know you go into your doctor your doctor says you need this procedure or you need that scan or you need that medicine and the first thing that happens is you find out you need a prior authorization in your turn down and now you've got to go back and you've got to fight for your rights you have to advocate and the system seems to me to be geared towards hoping that enough people just give up and don't get the medication or don't get the scan or don't get the procedure they need perhaps they didn't really need it and and it's happening more and more frequently and the complexity of a doctor's life is pretty awful right now in terms of the prior authorization forms that you need to go through and and god forbid you make a mistake in any box in that because it's out and then you've got to go and fight and advocate and have your patient would still have to this hospital still have to have an insurance system that pushes people towards value insurance they still have to say no you don't need an MRI not I will give you one because we've got a machine that's sitting on the floor and needs to be used so there would be a lot of the but but it'll be more of a dialogue between the patient and and the individual and if the individual said well I want one I say okay but it's not covered by insurance I'm my medical device you don't need it here that doctors in the room ensures I'm sure we have plenty of way and get your questions ready I'll take them in a moment but even that's hard you go to I was at my doctor as a physician I think I was just going to ask you about what you're going to expect from a doctor price would have some of those ideas I haven't talked to him I don't know but he gets confirmed he's if he gets confirmed I think he's very very focused on putting patients at the center does any country get this right no no that's that's the concerning thing there isn't one well that are countries where the satisfaction of patients are is significantly higher that's true there are countries where the productivity is significantly higher where the waste is less so let's say there's best practices to share I refuse to make this a pessimistic dialogue you know there I think that would be wrong when they have no information happiness is a relative state you know there are there are healthcare systems that that apparently satisfy the needs because the population doesn't know the alternatives in many cases there's a huge repression of knowledge being given to patients about I think earlier we spoke about the need for more transparency so let's hold that and let's not think that less information is better more more information is going to happen with precision medicine let's say the effectiveness of treatment will go up the preciseness of diagnosis will go up all right so I think we need to spend more time or maybe on the governance of payers and and delivery of care but all over the world and we have been too focused on us you know many regions in the world the average health is improving right we have been as well as pioneering primary care in african countries in order to early detect moms with issues with their baby in order to reduce child mortality infant mortality that's working so there's widely advancements in the delivery of care in many regions and we should not only look at the excesses I agree with that and as Ian mentioned the trust issue maybe one that's more unique to some of the developed economies like the US and I think again information the whole notion of outcome outcomes based is hard you know that we we struggle with how to measure that but I think the notion of evidence based is really important and I do think that the world has changed in a lot of ways that people don't see I think and if you go back 10 or 15 years ago where you could have you know 10 beta blockers and the 10th would still have a have a market that looked somewhat like the first you know it's different I think people want real innovation now and where that occurs should be rewarded so I think we'll you know the evidence is gonna gonna carry the day to some extent I think that's that's a it's not a bad thing but I think again patients involved in it but physicians really working with evidence based activity from pseudo companies providing the data it's all it's all part of the same direction I think that's a it's something you guys do a lot of work on I know outcomes based evidence based they're all they can be squishy terms if you're not inside of the industry so what does that even mean value based healthcare so values based healthcare is the outcomes produced for patients from a patient-centric view relative to the costs required to deliver those outcomes and that's that's that is the essence of value based healthcare and I think we've been really encouraged to see how much that dialogue has taken hold in recent years translated into reality is still hard I agree this is a journey but you know there was a group that we were a part of forming iCHOM which is the international consortium of health outcomes measurement it's now got half of the world's disease burden where we tried to align around the world on how to have a set of patient-centric outcomes orientations that can be tracked in a consistent way start to build databases that will allow people to compare the efficacy of different approaches allow for sharing of practices and allow for sharing of expectations in terms of results I think the OECD as we speak literally this week is in a discussion around how to be able to drive more of an outcome-centric view of the world and not just a component cost-centric view of the world that has not served patients well and has produced a lot of frustration for patients it's not that complicated there are six diseases or five diseases that make up the vast majority of health care expenses it's cardiovascular it's lipids it's diabetes it's hypertension there's a couple others cancer you know they're not it's not complicated you've got to get people you've got to get focused on the patient and ensure the lifestyles and the way the individual takes responsibility the incentives are there for that and a lot of these problems will cure themselves can we take some questions from around the room I know we have many please oh I basically agree with you on that politicians might not be very well briefed as yet but they all quite well know that innovation is a scarce value because we you all talk about values and how you measure the outcomes and evidence based and at the end it comes to how you price it so big pharma has a simply gloomy future the way it sucked the last 30 40 years by simply pricing the so-called innovation the way they measure through how much money they need to reestablish themselves or to develop the rest so how do you feel about having something because you breathe and you you're privileged in a way you know nice the national institute of clinic access to your question so the question is if they introduce this in the United States what's going to be the future of the big pharma well you know what the I don't know what the future patients would be I'd be more worried about the patients in the future of big pharma there'll be there'll be there'll be there'll be a grinding halt to research I mean the truth is that the profit pools are such that the US consumer is paying for all the innovation the rest of the countries are free writing including Europe free writing on a US expense and that's a trade issue it's also a societal issue so so you don't the trouble with medicines is any medicine that's successful it's hugely profitable but you don't pay for the ones that are successful you pay for a modern pharmaceutical industry that has an incredible failure rate because we don't know enough and we spend you know sometimes 20 years being a product to market you pay for the medicines when you pay for them on the value they deliver and which is hard for us they have to be really valuable but that cash flow from those medicines have to support the whole infrastructure I think we have a question in the back yes I'm an timer from Saudi Arabia I'm in the engaged in the healthcare industry from trading to manufacturing my question is that trust is the keyword I see today and I believe all stakeholders lost their trust regulators lost their trust when they didn't do their job consumer cannot be trusted because he's ignorant doesn't have the right information but I still ask myself one question all this trust is because we haven't been doing our job everybody's role is clear but where is the role of the pharma big pharma industry where where they had their failure of trust we must have the courage to really see where did we go wrong my second yeah well I'll stop on this one yeah well if you don't want to answer that I mean I would I would say well for me I would say that that you know our our responsibility is to find uh cures and improvements in quality of life for individuals I don't think we did I think communication maybe maybe I think look at look what you've got now can you imagine can you imagine your father you knew going back or your child going back to when your father was born and going to a doctor and saying I've got this problem I've got hypertension it was there was no products that all the diseases we have they're in our control or semi-controlled you go back 40 years there was nothing or 50 or 60 I'm getting old 60 years you go back there was nothing in the pharmacies it would be like it would be like well I can bleed you I can give you some palliative but I really can't help you I think the industry has done a huge amounts now where have we gone wrong we've gone we lose our trust we lost our trust because we stopped being we stopped talking to the patient we talked to the physicians who were the power and then the positions lost the power and it was the insurance companies and we talked to the insurance companies and we lost the ability to talk to patients directly questions around the room one in the back there's behind you there's one here and then we'll go around we've got time sorry Ian this one's probably for you but you guys could all address it um Donald Trump has said specifically that he's going to try to lower drug prices as part of his health care plans um and he said that's going to be a central part of his plan he's going to use his bully pulpit which I think means twitter to make this happen you've already said you don't think that he understands he'll be briefed and he'll understand more what will he know in six months that he doesn't know today and how are all of you thinking about this because this is a completely this is a complete wild card for you what are you talking about with your executives what is the communication strategy how do you get inside his head to understand what you need him to what I tell you is that you know you can interpret these words in many ways and I'm not trying to interpret them but one way of lowering healthcare costs is have more innovation and more competition so pay more for medicine so we can develop more medicines and we can drive through competition lower costs I don't know what he means by saying lowering drug prices I know that's the best way to lower drug prices to get more competition in the marketplace now I think what he doesn't realize is that the United States spends two percent of its GDP on pharmaceuticals other OECD countries spend 1.5 or less half of a point of GDP the United States is spending more and for that they get a 1.6 trillion GDP contribution from the industry I think wait a second that's not that's not the narrative that's not how it's been spun at all but that's how it is if you look at we spend in the United States we spend 17 percent on healthcare and OECD spends nine there are eight points of difference of GDP of those eight points a half a point is attributable to the cost of medicines the rest is attributable to physicians hospitals and and taxes and fees the issue is not the cost of medicines in fact a lot of countries spend more as a percentage of their healthcare medicines than they spend on than the United States because they've seen medicines as a way of controlling costs so I think you know it's a matter of public policy and a matter of having a dialogue with the administration and and I expect that you know we there will be a an understanding from both parts did you have no there was a question behind you thank you for the panel Steve Ruskowski was diagnosed with this you all and consistent what we're just talking about getting off of drug prices has to do with raising transparency around prices in general and we all know that um and this is a U.S. discussion and yes I do agree Fonset the Netherlands has a good system they do agree but in the U.S. if you think about the health care system we have Medicare about 45 million lives we have Medicaid about 120 million lives and the rest is paid for by large employers and by the consumer and there's wide variation in the prices with the consumer and so you know the question is which gets back a little bit to can it really be a workable solution that hospitals and physicians own the patient since the patient is portable what can we do to get more variation reporting around prices broadly what prices provider prices physician prices procedure prices lab prices radiology prices prices in general have wide variation in the United States and so what could we do with that information consumers are making choices so they'll decide whether to go or not go I'm all for you I'm all with you goes back to what George said you know if you make transparent what the entire procedure and the handling of the patient cost outcomes versus all the effort we all know that there is waste in the system so you can have a quality indicator you have a cost indicator and then the market can do its job to optimize it I think we're going to see more transparency whether we like it or not in pricing which is easier the bigger challenge to me in some ways is quality I'm a consumer I make a decision about a car I know what the cost is it's very clear I know what the attributes of the car want and I know how to value that it's very difficult for most consumers to say I know the difference between this procedure and that procedure in these sites of care so I do think there are two dimensions to this one is transparency on price which I personally think it's going to happen one way the other through an app that somebody creates we're seeing more of it today but we'll see what's a bigger challenge and I think could be a bigger inflection point is actually transparency on on outcomes and on quality and I think that's a really important dynamic and that's in some ways a bigger challenge Steve in my view and just to build on that informing patients more about individual costs of procedures or other things absent a holistic view of what's in the best interest of the patient in an outcome-centric way is not necessarily leading to better care for them and the challenge with the U.S. system is the fragmentation across the different parts of the system is so enormous the question seems like the obvious answer just create more transparency but in fact if we don't start with an outcomes driven approach if we don't start with trying to get the incentives aligned from the providers of care through the end of the system it's not obvious that you get to a better result for the patient if I don't own the outcome and he's compensating pay by that then you'll get it right we've spent a lot of our time talking about price which I understand and it is it's the headline I got it it's hot it's and it's and it's not a trivial issue utilization is another issue which is a huge huge dynamic again this goes back to the incentive system so I do think again if you look at the overall span and I think it's roughly rich you know this what 15 or 16 percent is pharmaceuticals and the rest is is medical some component that is price and some this is the U.S. again some component is utilization and we've had a system in which we've encouraged essentially more utilization of health care activities and so if we we're going to have to wrestle with that particularly with the demographic striving more demand which is for sure to happen so we've got to think carefully about again how do we how do we get enough alignment incentives and this goes back to the bank for the right stuff so that utilization per capita is is moderated in some way because we're going to have an aging population and they're going to need pharmaceutical products and they're they're going to need hips and that's a reality and how do you use the industry in that effort I mean the law the thicket of laws is so problematical if you take for instance Tony Koskarev in the Cleveland clinic because of the laws in that state you can test the cigarette smoking ongoing takes a bit of your hair and checks if you're smoking you don't work there that's his attempt to drive down costs his institution if you have a certain weight you can't work there because they've done tests showing you can't you're not capable of performing some of the activities needed in the hospital so you know they have smoked they have drug testing a lot of this can be driven by the private enterprise too well I as a as a server company I want to drive my health my health care costs down so I want to select the people who come into the company so that I can help them be as healthy as possible so these are changes and regulations and facilitations we could do for all of us to get on this issue like we provide gyms we provide them is that an inclusive approach or are you pushing certain people out of your system no somebody comes to play well my my opinion is this if somebody I don't know what our position is now actually but I'm using the Cleveland Clinic because I know where the laws are there you go to Cleveland Clinic and your smoker they won't hire you if you they would probably say to you go away come back in three months we'll drug test you for free of cigarettes will hire you okay so it's exclusive there's an improvement look there's always an improvement look we have drug testing in certain states you don't get fired the first time you get you were told you were drugs we're going to test you randomly in a point in the future you get one child so you're influencing healthy behavior influencing health that's good by letting sort of self-regulating we want to take some more questions my name is on jarra jackson i'm a physician in the united states and i think we hear a lot about patient centric and community based outcomes and hospitals and physicians taking ownership for those outcomes but what you just said is a perfect segue into what my point is and that is the individual patients responsibility we need to spend more health care dollars in terms of prevention and we pay our primary care providers the least amount of money we don't have those kinds of programs across the board what would you do if the hospital owned that the time the physician spends convincing the patient to be healthy would be reimbursed it isn't today because it would be the interest of the hospital it should be there you go it would be and it would be in the interest of the insurance companies as well to keep patients popular to keep the population healthy so i think we really need to we're talking about the end when people have disease when they need intervention we talk about physicians ordering too many tests well part of it in the united states is also based on the fact that we live in such a litigious minded society that if you miss something you're going to be on the other end of a lawsuit so there are so many factors that go into bringing down health care costs bringing back trust into the health care system and i really think we need to put more emphasis on prevention and early health care efforts as opposed to putting all of our eggs at the end thank you for your comment we only have a few minutes left i do want to give everybody on the panel a chance to sort of sum it up and give us a bottom line it does feel like some of the news of the day items on pricing on sort of demonizing the pharma and health care industry can be solved by fixing problems that patients and i think the public aren't as aware of things that we talked about on this panel like improving wait times increasing transparency on outcomes letting patients make better decisions bringing more efficiency into the system and value less dependent on profits and more centered around patients so it john maybe you can kick it off and just give us a final bottom line prediction and sort of view forward of what what you expect and how you expect i'm not going to give you a prediction i'll give you a hope okay i don't know how to predict what's going on right now right nobody wants i think in all the systems are on the world where systems work very well is where physicians like dr jackson can can work with their patient and don't have an onerous regulatory system around them i think that's one of the big problems we have right now it's difficult for doctors to prescribe what they want it's difficult for patients to know what to do if they're denied that and they're often then asked to pay really significantly onerous copays these days that's i think one of the other sources of anger that we didn't talk about the copays have ratcheted somewhat because of the plans under the aca somewhat because of the pbms have used that as another way as another way to extract to take costs out of the system while raising premiums so it's been a very it's been a very poor experience for the healthcare consumer the last four years they're happiest patients are happiest certainly our hiv patients or hcd patients when that that relationship with the doctor is is considered sankrissat and when they can make those decisions and have that kind of interaction that you would want when you go into your doctor i would hope that whatever we come up with to replace the aca could solidify that relationship a hope a prediction or a solution anybody makes predictions these days it's great i won't make a prediction just a few closing comments again i think i keep wanting to push us back to the issue of trust not just being about healthcare i think all of us when corporations we have opportunities to operate in our communities on matters related to healthcare or not and i think everything that we can do that helps build that trust is beneficial to us as healthcare players in our world inside of healthcare increase flow of information coordination among players breaking up those components of care that tend to break down trust break down efficiency and make care less optimized or important for us and again to the extent that we can put the patient at the center of the universe and share information with them about their care i think we're well served so i would say i'll make a prediction i'm actually genuinely optimistic and i know the tone of this panel and the concerns that we're moving in direction towards value-based healthcare and towards more outcomes transparency and partly it's facilitated by data in the world we live in and partly it's by a recognition of the importance of doing that and i think if we do that then we put a lot of emphasis back where ian was going on giving more power to people who can take an end to end view of the patient and do a more holistic view of both the value creation and the cost components in mind that will be harder particularly in the united states because of the fragmentation in the system and then the third element is a lot of the headlines you pointed to were really not the behavior of the main industry players it was outlier behavior so i think one of the questions is how to whether it's market discipline industry discipline or others hopefully short of sort of legal and new laws how to get some disciplining to prevent some of the outlier behavior which then throw the the trust of the whole industry into question and don't serve anyone and frankly don't serve the patient to the extent it deters innovation and deters sort of investing in in better healthcare systems i think it's prediction data outcomes used by the providers who are at risk for the health of their community the patient has to have a skin in the game they have to have they have to pay more for things they don't need which is what value-based insurance is about but in the end we are the beginning i think of the next 20 years of radical new inventions in medicines we are just at the beginning we're really beginning to crack the biological code you know you've got gene editing you've got gene therapy you've got uh using the immune system i mean a big oasis still not tapped is is is neurology and but i'm really optimistic about what science can do in the next 20 years no matter who's president no matter who's president as long as society is willing to pay and donald trump friend or foe to the pharma industry i think he's um he's going to be somebody who wants to make sure patients are well cared for so my takeaway my final conclusion we'll put the patient at the center we'll connect it through the cloud to the doctor everything will become transparent and precision health i think is going to drive better outcomes and and we will get to a higher productivity so i'm hopeful for the future it will require us to collaborate more and in certainly some countries the relationships between all the the actors need to become desilote because that's the only way to get breakthroughs and technology is coming no matter what technology is going to come no matter what and it will actually be a great integrator uh we we can trust our financial health to the cloud right we find that normal already for 20 years so it is about time to really stitch up the entire healthcare system end to end uh through technology we'll leave it on that optimistic note thank you all very much