 So this is our concluding panel for the day, which we have boldly labeled the solutions panel. No pressure guys. But we have five extraordinary individuals who come from a very diverse set of perspectives to share what they've been doing to try and address drug pricing and high drug pricing. And I'm going to, I think I'm actually going to do the biographies one at a time and introduce each of you just to make a couple of minutes worth of remarks and then we'll try and pull off one of those fireside conversations. So first out of the gate is Lauren Aronson. She's a principal at the government affairs firm, Melmond Castanetti, Rosen and Thomas here in Washington. And she also serves as the executive director of the campaign for sustainable pricing, sustainable drug pricing, a broad-based coalition that promotes bipartisan, market-based solutions to lower drug prices in America. Lauren's held several senior positions in the executive branch and the ledger branch, including the Office of Legislation at CMS, House Ways and Means Committee, and the Office of Health Reform under President Obama. And so I'm going to give you five minutes. It's a good thing I'm a fast talker. Thank you, Mary, and thank you everyone for allowing me to speak here today on this important topic. It's been, I think, a wonderful conversation so far and one that's been, at least for me, as I think about these issues all the time. It's really helpful actually to take a step back and hear all of these very diverse perspectives. So thank you everyone for putting this together. So our campaign is made up of a broad, diverse group of stakeholders. We represent consumers and health plans and hospitals and physicians and nurses and PBMs. And so basically everyone in the healthcare world, the exception of the pharmaceutical industry. And what unites our members is the concern about drug pricing. And so the way we sort of think about these issues is in three buckets. So one, we have the launch prices of new drugs coming to market, which is of great concern. Two, we have drugs that have been on the market for quite some time. We've got the bad actors, the Martin Screlleys of the world. And then three, we have the more incremental increases we're seeing from what I consider more of the mainstream companies like Pfizer and Novartis and Eli Lilly. And those increases are incremental, but they're significant. And they're happening multiple times a year. Novartis is a great example where they had, I think, 116 different increases in the first three months of this year ranging from 3% to 9%. So when you compound those and you think about it from a consumer or a payer perspective, that's just unsustainable. So in our mind, there are three different buckets. And I think one of the things that we all struggle with here is, what is the best policy solution to address this issue? So in my day-to-day life, I deal with members of Congress all day long, and members want one issue and they want one problem and they want one solution. And I think the challenge here, as we've all discussed all day, is that there is no one solution to this problem. So in my mind, we need to kind of take a step back and think about, we have the supply chain issues, but it also really originates with the manufacturer. And everything starts with the manufacturer and how they determine the price of a product. So we can have a conversation all day long about plans and PBMs. But again, it still, in my mind, comes back to how a price is initially set and that's the list price and everything flows from there. So as we're thinking about these issues, I think it's really critically important to consider how a manufacturer determines the price of a product and why everything kind of flows down from there. When I think about kind of the policy problems we need to address, many have been discussed today. We think about the issues with, you know, REMS abuses. We've had a fair amount of conversation about the Creates Act. You know, I've been in Washington for 20 years and the fact that you have Senator Feinstein and Ted Cruz and Rand Paul and Senator Lakey all agreeing on an issue is pretty incredible. And also thinking about Norm Ornstein in his previous comments, he worked for Rahm Emanuel and the House a long time ago and so, you know, his job was to unseat Republicans. But yeah, we could get things done. And so I think the fact that you have, you know, a bipartisan group of senators granted it's on one specific issue, but, you know, taking, we've got a chip at the block here. And so as we're trying to take on an issue, we need to address one by one. And so in my mind, the Creates Act is just a really great example of how we're taking an abuse that the industry is undertaking right now by blocking generic competition. You have bipartisan support from a broad array of members. I think Dora also noted that Mark Meadows also supports the bill. So, I mean, it's rare that you have this level of bipartisan support and they also have stakeholders ranging from Freedom Works to Families USA and public citizen who support the bill as well, including our organization. So when I think about how do we effectuate change, we have to pick off one issue at a time and try to push on that issue. So I think, you know, getting the Creates Act done this year would be something that would be fantastic. Dora also has federal savings. And again, we would need to figure out how do we start to take off these issues and go off one by one. When I think about other solutions, we need to address obviously having a thriving biosimilar market is something that's incredibly important. You know, when we created the biosimilar pathway in the Affordable Care Act, I think a lot of us had hoped by this point, now that we're in 2018, we would have many more biosimilars on the market. But unfortunately, you know, we have only three or four at this point that are actually on the market. So we need to take a step back and figure out, okay, what's going on here? Why don't we have a more thriving market? And in my mind, it comes back to the fact that we have some of these abuses that are taking place on the industry of the brand side where they're going into all of these abuse of practices and trying to prohibit biosimilar and generic competition. So, you know, thinking about patent estates is one that we have a lot of conversation about this morning. Particularly, Humera is the one that infuriates me the most where we have the ADVCO, specifically talked about patent estates as one of his strategies for protecting, you know, that drug. Medicare Part D spent $1.5 billion on Humera alone in 2015. I mean, that is astounding. Humera came to market in 2002. We should have had a generic or biosimilar on the market in 2016. We're now facing maybe 2036. For a potential biosimilar, I mean, there was news last night that we're really lucky now that there's a patent settlement and now maybe one will come to market in 2023. But that is still infuriating considering that, you know, the drug should have come off market in 2012. And I'm getting the note to wrap up, and I talk really fast. So, I'm looking forward to the conversation. I think there are a couple other solutions. We should just highlight real quick that we just talk about what you're dealing with things like product topping and evergreening. But in my mind, when I think about what's doable, we need to be very cognizant of politics. So, having bipartisan support for bills is just incredibly important in this dynamic, which Norm sort of highlighted. But then, too, really trying to pick off issue one by one and thinking about where we can effectively change, short-term and long-term. Great. Thank you. Our next panelist is Representative Andrea Salinas. She's a member of the Oregon House of Representatives. A post she's held since September of 2017. She serves on the House committees on healthcare, transportation, and ag and natural resources and chairs the House Healthcare Committee's Universal Access to Care Workgroup. Representative Salinas was instrumental in passing House Bill 4005. In February of this year, which will bring transparency to pharmaceutical drug prices in the state and maybe not coincidentally, prior to her service in the state legislature, Representative Salinas led a multi-stakeholder coalition called Oregonians for affordable drug prices now, which actually worked to change the political discourse about profits in the pharmaceutical industry. So, we share some of your experience with that bill. Yes. Thank you. And thank you for allowing me to be here today. I feel so humbled with the expertise and knowledge in this room, and I've been learning a lot today. So, my name is Andrea Salinas. I'm from the Portland area of Oregon, and I came into this issue of drug pricing a couple of years back when I was a lobbyist for SCIU. And the Kaiser Government Affairs Director came to me and said, what do you think, how would SCIU feel about trying to tackle drug prices? And for the previous, I don't know, three to four years, we'd really been looking at hospital cost drivers the union had. And so I said, I don't know, well, you know, let's ask them and see what they think. And so I thought it was a great idea, because I knew that drug prices back in 2015 were really starting to get out of control and they were starting to outpace hospital as a cost driver in plans, and especially for public employees. SCIU wasn't super interested. They didn't really think it was their fight to take on. So they said, well, you know, we'll see, we'll take a back seat. At the same time, the insurance companies in the state of Oregon had been experiencing playing a lot of defense on cap the copay bills, on different kinds of PBM bills, and those sorts of things. So they were really starting to become more invested in this topic. Then the vice chair, a new vice chair, he was a freshman member of the health care committee, was tasked with bringing stakeholders together. So PBMs, insurance companies, hospitals, and obviously pharmaceutical companies to figure out this prescription drug issue. So out of the 2015 session he had about 18 months, so a year and a half to come back with something in the 2017 session. Presumably something that was bipartisan. We did not accomplish this. I was still working for SEIU as a lobbyist at the time, kind of monitoring and just back seat, even though it's, you know, the largest union in Oregon, probably some would say the most powerful union in Oregon, but they were still taking a back seat. At that same time, and this is why timing on all of this is so important, the pharmaceutical costs per unit really started to outpace hospital costs. In addition, utilization also was outpacing hospital costs. And Oregon under its Medicaid waiver is under a global capitation rate. So for the public employee unions, their health plan is also under 3.4% medical growth rate. So they have to stay under that and they realize suddenly we're not going to be able to meet that charge and our union members are going to lose out if we don't do something about drug pricing. So finally, for the 2017 session, all the stars were aligned. I was able to bring together some very powerful insurance companies along with some very powerful unions, including the Nurses Association, the Oregon Education Association, and some public employees. With that, we were also able to bring in some coalition members and work because we did have so many unions in kind of a multi-state effort. So we were working with Nevada and California and also trying to pass the bill in 2017 to just find out kind of what some of the stronger policies might be, what some of the campaign pitfalls might be, and that sort of thing. So we really got a lot of pushback, obviously, from the pharmaceutical industry who really just tried to deflect a lot. And I think it was one of our earlier speakers who said that he was pretty surprised that legislators really didn't know about all of the public assets and all the taxpayer funding to bringing a drug to market. And I found that to be very true. I've been working in politics and healthcare policy since 97. So it wasn't a surprise to me, but when I would explain this to different legislators, they were very surprised by this. And so there was a lot of education and a lot of just making sure that everybody was up to speed and on the same page. And to do that in a multi-state effort was also extremely helpful. So we did bring a bill in 2017, and it was what some called a price-fixing bill. It compared Oregon prices to the top five organization for economic and cooperative developments of the top five OECD countries and what they paid. And then if what Oregon was being charged with was more than what those countries were paying for drugs, then the manufacturer would have to refund the payer. But the payer was also obligated to pass that refund on to consumers. That was also in the bill. We thought we had all our bases covered. I knew I had all my votes in the House, but the Senate is very firm on trying to bring any controversial bills forward that are completely bipartisan. So I know it sounds like an oxymoron. How can it be controversial and bipartisan? So that bill ultimately failed, and we brought back a transparency bill this last session. So in 2018, we realized, okay, we have to take baby steps. And we were also able to, again, just continue our education process. We found a senator from a very rural area of Oregon, very conservative. It was my two, the two sponsors. And in that interim, I also was appointed to the seat I'm currently holding. But the two chief sponsors of the bill, as different as night and day. But he had experience with juvenile diabetes. He and his son both are patients, and they've experienced the skyrocketing increases in insulin. And so he had firsthand knowledge, both as a legislator, kind of what was going on with the pharmaceutical industry, as well as his own personal experience. And that really helped. It helped for him to educate his colleagues, as well as just to be a sponsor and a champion for this bill. In addition, the coalition that we had formed with the insurance companies and the unions, as well as some other consumer groups, was very, very similar to the campaign for sustainable prescription pricing. In fact, we modeled a lot of our steps on that campaign. We were able to figure out how to, kind of what just all the necessary campaign steps. And as everyone has said, drug pricing is a populist, and bringing down those prices is a really populist idea. So we did some initial polling on this and statewide. And we oversampled in obviously swing states and even in those swing states, yes, everybody wanted lower prescription drug prices and they wanted somebody in government to do something about it. So that was kind of our drumbeat for the last two years. And finally, by this session, we were able to pass the bill that essentially requires that any drug that is $100 or more for treatment that increases 10% on a net basis annually will be required to show why the drug increased that much to our Department of Consumer and Business Services. And then, so Pharma is still very upset about it. They just emailed me yesterday and said, we told you this bill isn't needed. And I was like, wow, we passed it. Like, why are you still bothering me? But they are. And so I think as we go into rulemaking, it'll be very important that we are very careful in the actual implementation of the bill. But I do think this is a very good step to kind of bringing that transparency, shedding a light on why drugs do cost as much as they do. And we're asking for the starting price. And then figure out all of the rest of the pushback that we got. Okay, so what are PBMs responsible for? What are insurance companies responsible for? Patients, prescribers, physicians. But we are very firm that this is our first step and it's a good first step. And then we will be able to inform the legislature on what next steps we should take. And I'm so happy to know that in the bill, they also put kind of a next step task force in there. So we'll be looking at next steps right away and engaging with that task force. Great. Thank you. Thank you. Next panelist, Jane Horvath, is a senior policy fellow at the National Academy of State Health Policy. And there she leads the emerging issues team, leading work to foster state initiatives on drug prices. And I won't list all the reports you guys have put out recently, but nashp.org and you can find a lot of interesting work. Prior to the Academy, Jane worked in the private sector as a consultant to life sciences, foundations, advocacy organizations. She's held research positions at Johns Hopkins and MACPAC, the Medicaid Payment Advisory Commission, and spent 10 years at Merck working on coverage and reimbursement policies. Yes. Yes, full spectrum. Thank you so much for the opportunity to talk to you today. My head is just spinning with all the things that we really need to discuss that have been discussed for this panel. I right now work specifically with states on drug pricing policy work. Our work is funded by the Laura and John Arnold Foundation. So as a predicate to what states can do, I think it's important to talk about and understand how states are really hobbled in this space of trying to address prescription drug pricing and prescription drug costs. We talked about, it was earlier mentioned about the Medicaid prescription drug rebate program and the Medicaid best price. That has an effect in Medicaid, but it also has an effect on commercial payers and other government payers in a state. It limits sort of the level of discounting that can occur. We also have a bunch of case law around federal patent law. And it's really bad case law. There's not much of it, but it is pretty much on point and it has yet to be sort of reconsidered anywhere. But it's a decision going back to I think 04 that basically had the District of Columbia with a price control law, manufacturer price control law, and they determined that it was a violation of the federal patent law. And so it's really hard for a state to do the obvious thing of trying to control prescription drug prices because of that case law. And then we have a bunch of case law around the dormant commerce clause, which is also a hobble to states. States have a hard time doing any sort of reference pricing outside of their state. And then there's trade secrets law and FDA communications policies, which were referenced earlier when Mark was up here. So that's a whole constellation of problems or hurdles to be overcome. And so if you ever wonder why state policy around prescription drug pricing looks so insane and just crazy, it's because of trying to avoid all of these things. And some of the laws that we have right now on the books, Nevada is being challenged on the basis of many of these things. California is being challenged, Maryland is being challenged on one or more of these things, which is not to say how successful the industry is going to be or not, but the industry is throwing everything at, and I have the clock ticking on how long it's going to take for Oregon to get sued by the industry. But a state that wants to try to avoid going to court regardless of the merits of the state's position, these are things that all have to be considered. And we can talk about it more later on, but two of the things that Nashby is promoting with states in terms of model acts that we have out there, and we're thinking of some other model acts too for states. But right now, I think two of the policies that states could consider that avoid a lot of these challenges would be importation, Canadian importation, wholesale importation administered by the state. And there is a very narrow window in federal statute that would permit this, that states could assure significant savings at a consumer level and safety at putting consumers at no more risk than the current U.S. system. And I would note that there is federal authority for this to happen. It's never been executed on. But also people need to also understand that we have a global supply chain now that's been a big change in the industry over the last, I would say, 12 years. And fully 40% of the products that we consume here in the United States were imported. They were manufactured elsewhere in the world. And fully 80% of the active pharmaceutical ingredients that go into U.S. manufacturing for U.S. products comes from overseas from places like China and elsewhere. So, you know, we already, the systems already exist to do importation safely. It's a known quantity. And to have a state in charge of it as opposed to sort of a free-for-all commercial operation, we think very strongly that this could is a viable approach as a tactic for an individual state. And then the other approach that we are promoting with states, and there's a couple bills out there now, Maryland is the furthest along, is rate setting, sort of setting up an all-payer rate setting system. And the important thing about both of these approaches address what other panels have talked about. Number one, the sort of the profit taking throughout the system, the supply chain and the payment system on the price of drugs. Everybody does have somewhat of an incentive or less of an objection to higher and higher-priced drugs because of the rebates and other discounts that they get on these products. So, you need to address that. You need to be able to see that the consumer can see the savings at the point of service. And both of these, the importation and the all-payer rate setting would effectively do those things. It would either approach has the effect of limiting what insurers will pay, pharmacies, what pharmacies can charge, how wholesalers operate in the state. It just sort of pushes the competition back through the supply channel to the wholesaler and the manufacturer. But we can talk more about those things later on. But both of those approaches have been analyzed by patent law experts, commerce experts and the Maryland Attorney General's Office as being able to be quite defensible in the face of any sort of legal challenge on dormant commerce laws or patent law. Thank you, Jean. Next is Amy Gutierrez, the Vice President and Chief Pharmacy Officer for Kaiser Permanente. In her role there, here, she provides leadership and direction for the organization's $9 billion clinical and pharmacy operations working to improve outcomes, member experience, affordability, standardization, and above all, regulatory compliance. Prior to coming to KP, Amy was with the Los Angeles County Department of Health Services, lastly there among her roles were Chief Pharmacy Officer and Chief Pharmacy Director for Los Angeles County LAC Medical Center. So, Amy. Thank you. And I'm in a unique position. I'm very honored to be amongst all the experts in this room. I represent the pharmacists, the ones that are the gatekeepers. And just like the providers, my colleagues that spoke earlier, we're the ones at the front line that have to tell the patients. And we have that prescription in our hand, and when they can't make the co-pay, we're the ones that are the face to those patients. And it's very, very difficult to have to manage that, especially when you know that there's a medication that they can actually use. I came up by working with the uninsured in at Mike Rowland LA County. I dealt with this in a big way just because we had so many uninsured patients that actually had to access drugs, and it was really difficult to try to get them access to these high cost drugs. I remember a situation we had 10 years ago when we actually took on Merck Pharmaceuticals who had issued Gardasil vaccine and they would not allow patients that were not seen in a private office to get patient assistance program to prevent cervical cancer. People said, well, you can't take on a pharmaceutical company. I go, yeah, we can. So we sent a letter to the Merck CEO and we said, we're not going to use this. If you don't provide and open up access to uninsured patients to access, they get cervical cancer too. We need to have access. So we were able to actually change not only the policy for LA County, but also for the rest of the country because they did open up patient assistance for uninsured. So there's a lot of things in terms of solutions that I see just from my role and part of it is there's been a lot of consolidation in the marketplace. We have, if you look at the whole PBM market, we've got three PBMs that are basically managing 80% of the market. And if you look at the Medicare, that's 90%. That's a big monopoly that's been created. Prescription drugs are the single largest health expenditure for patients and they're really struggling with it. We are really looking at pharmaceutical costs for specialty. It's projected that by 2020, 40% of our drug costs are going to be specialty. So that is going to be where all the brand name drugs, this is going to, the rubber is going to be used with those high cost drugs. We, in terms of things that we can do, I'm going to focus more on the FDA and some of the price transparencies. I think we need to look at incentivizing generic competition. The FDA, if there's only one drug that's on the market on the generic side, why not create incentives for the number two, the number three, the number four, so that we can have a lot more generic competition. And then expedite review for those drugs. There's no reason for the red tape that's in place right now for generics. And also have the FDA monitor the markets to identify monopolies and then proactively get involved and look at ways of how the market's performing, any competitive manners, any concentrated or sole-source markets and take an active role in looking at that and providing information and taking actions. Also, one of the big things we deal with, at least in formulary, and I know my colleague and I deal with it and Samir on our P&T committees, is the lack of comparative effectiveness information. A lot of times when drugs are released, there is no head-to-head studies. You're just comparing against placebo. So how do you know that that is the most effective drug without those head-to-head studies? If the FDA were to require some comparative effectiveness studies right at the market approval stage, that would be a big help for us. When you look at an article that was published in the European Journal of Clinical Pharmacology just this year, they actually compared the FDA versus the European FDA equivalent and also the Swiss and they found that the number of drugs and the indications between the European and the Swiss were very similar, but there was a hugely statistically significant difference with the FDA. So looking at ways of trying to get more information, also remove the barriers and I think some of my colleagues have already said this, remove barriers to biosimilars. Biosimilars hold a huge hope for us in terms of trying to bring our cost down. And then look at patent protection for Me Too drugs and market exclusivity. Do we really need another beta blocker? Is there a way that we can look at that when the FDA approves it and look at market exclusivity and whether we really do need to have the same rules in place for drugs that actually are just Me Too. Looking also at orphan drugs and other recommendations to start the exclusivity point at the time that the first orphan drug is approved and the first indication comes. Don't start the clock after the second or the third indication comes up. Looking at all those and then increasing price transparency, our patients really do need to know about prices. When they come to the pharmacy counter and they see me or one of my pharmacists, they have no idea what they're going to pay until they show up there. And they get blown by the prices that we're charging and they have no idea what their co-pays are, what their requirements and then when we talk to the providers, they don't know either because it is such a black hole. We've got to really increase transparency to consumers and I'm not going to get started on the manufactured coupons because that's another one that's a real issue because it's really just giving money back to patients that they're essentially paying anyway up front. I think one of the speakers earlier had said the same thing. There are ways of abolishing some of those coupons and the processes that are out there and I think some of the states have done that. So that's just it from a pharmacist perspective. Thank you, Amy. And batting clean up, Rina Conti who's an associate professor for health policy and economics in the department of pediatrics and department of public health studies at the University of Chicago, her research focuses on financing, organization and regulation of medical care and she's an expert in drugs. She also serves on the National Academy of Medicine committee on ensuring patient access to affordable drug therapies which released their consensus report last fall. So, Rina. Thank you. It's an honor to be here and I love the fact that you've gotten this panel together, the ladies to solve this problem. Thank you, Marie. So makes sense, right? Anyway. Over the watchful eye. Later. So I believe strongly that the current system is set up to reinforce opacity and complexity to allow certain types of entities in this system to profit and others not to. What we're really talking about in terms of reform is reorienting this system so that it serves its true masters which are American patients, their families and the American taxpayer who is footing the bill for this at the end of the day. The solutions again can get very complex very quickly but frankly I think we all kind of know what we need to do. I believe that they are basically in three buckets. Buckets is the technical term. So let me so first is we need to increase competition particularly among sole source and dual source pharmaceuticals. This includes generics but also some branded products for which there is very limited competition in the market for other reasons. This means that we need to pull competition into the market and requires competition or prior to really coordination across regulatory agencies that actually typically don't coordinate. This includes the FDA, it also includes CMS and finally the Food and Drug Administration needs to be talking to the Federal Trade Commission and the Department of Justice related to bi-competitive practices. Also we need to recognize that this is both about supply but also it's about demand. Specifically there are contractual arrangements among insurers and also pharmacy benefit managers that essentially a reward winner take all contracts even in markets that have competition. Fundamentally that erodes competition, it erodes patients ability to choose among products that may be best for them. Secondly, we need to break the unholy alliance keeping drug prices high among pharma hospitals and their systems other middlemen which include unfortunately physicians pharmacies and pharmacy benefit managers. I believe 340B program reform is critical but reforming the way buy and bill works for specialty drugs also is more generally important. Lastly and this is actually the most difficult we need to start fundamentally questioning the argument that research and development costs determine the prices of drugs. Most economists believe the relationship actually goes in the opposite direction. The promise of high prices pulls innovation. On the other end once the product is available and developed for the market manufacturers profit maximize. The research and development costs are foregone. The current system that we have rewards innovation targeted in limited disease categories for people with very good insurance and frankly does not really discriminate between drugs that are highly valuable and those with very limited value for both patients and society. Meanwhile many very promising therapeutic areas lay dormant in development among disease states that have high unmet need and among disease states that truly if we invested in them would further public health goals and also further wealth production goals as well. Getting out of this trap requires thinking that high prices are only one tool that we have among many to reward the right type of innovation to meet both individual needs and also society's needs. I'll stop there. Thank you. All of you touched on a couple of things but I just wanted to sort of give another go around to the panel in the debate because we talked about different kinds of information that people don't have but what do you see and I don't mean political will but what kind of information or other abilities do we not have and you can answer in any order but Lauren if you're okay. Happy to start and I think I'll pick up where Amy left off. I think compared to effectiveness research is critically important and I know Steve hopefully is still here. I think the work that ICER is doing is incredibly important. I think when we were working on the Affordable Care Act a lot of us had held up hope that PCORI was going to do some of this analysis. I think it's disappointing to be honest that they have not. So I think as we think about what elements of information do we need to help make better decisions and help physicians and help patients having that effectiveness research is critically important. My good friends at IRP often note that we have dossier information that's provided in many European nations as part of their approval process so it's really astounding to me to think about there are obviously lots of political obstacles here but having that information that we know the manufacturers are already doing that research and that work, there's no reason why that can't be provided to the FDA as part of the review process on our side. So I think having that information be provided to our government but then also translated in a way that's communicable to physicians and to consumers. Patience is critically important. So something that kept coming up when we debated the HB4005 the Drug Transparency Bill in Oregon was that, you know, the same argument that pharma always makes is we have to recover costs, we put so much into R&D and our pushback was you put a lot into lobbying too and you put a lot into marketing your drugs and getting your drugs to market and pushing on physicians to buy your drugs and that feels like it's a lot heavier than your R&D knowing kind of where your R&D costs go. So that is a nugget that we would like to uncover in our transparency bill and so we will see what kind of the DCBS will come up with in terms of rulemaking but we do think that that is a critical component to just again shed some light on where their true costs for that initial price comes from. Actually just quick clarifying point, when does your bill take effect? So it takes effect immediately so I think DCBS is supposed to start rulemaking this summer. Okay and first submissions and sort of availability. So I think it will be January of next year. Okay Laura. I just want to note on the transparency side that 100% agree and I think California did a lot of work here to kind of start that process and actually the federal bill that was noted earlier it's also bipartisan in the Senate. Senators Baldwin and McCain and then also Congressman Jan Czakowski in the House side introduced a bill that was similar to California which would also get to a lot of this transparency as well and obviously in this current political environment it's not moving but I think to see Oregon other states really move forward on kind of where California started, where there's now federal legislation really talks about how all these elements pulled together and how we can all kind of piggyback and all this other work and keep it going. Thanks. So just as a brief aside I think many people who look at the state transparency bills view them as an important first step but not a solution in and of themselves and I think we all agree on that but in terms of what we know and don't know and need to know I think the transparency bills are going to be really stellar in pointing to the fact that there's absolutely nothing that supports the manufacturer's choice of price. Other than the things that are not reported which has to do with sort of the competition to the market, the competition coming after they launch the amount of time they have until their patent expires and the prices of the therapeutic in the therapeutic class or the closest therapeutic class but like all of the things that you would think would drive pricing and other businesses have absolutely nothing to do and the transparency stuff is going to prove it and so I think it's really important from that perspective the other thing I wish we knew more about and I think it is knowable in a way the manufacturers are always talking about how the world as we know it will be coming to an end in short order after these bills are enacted and that patients will die and there will be no more innovation even from just transparency, God forbid there was a rate setting bill and we know that that's not true but that actually is a really sort of frightening and compelling argument to legislators like are they going to really step off, is it a cliff and are they stepping off and I think we just need to know more about how in European systems when they set up these dynamic, when they set up the rate reviews and the price reviews and all of that like what really happened did manufacturers leave France did they leave Canada and how did that actually play out just a little more research in that area to provide assurance to lawmakers given the length of the innovation pipeline it's hard to imagine transparency today shuts off projects launched 15 years ago Mary you just don't know in California we just had notified of two price increases one of them was valiant which I'm not surprised but we just got notified of those two I think the transparency on how many patients are actually not picking up their meds because of the co-pay I mean we've actually tracked return to stock rates with our actual co-pay amounts and we have found that when the co-pay goes up the patients don't pick them up so it would be great to see that as a patient care just like we're tracking med adherence let's track non adherence due to co-pay so on that point Amy so we can do that I'll say relatively easily inside Kaiser Permanente how easy is it for other pharmacies? I think it'd be really easy on the chain drug stores I mean most of your business right now is on the chain drug store side and there's big three that actually encompass like 60% of the business in the United States if they would provide their numbers you just look at your return to stock rate and look at the co-pay amount so the script has to be transmitted to the pharmacy and then somebody has to not show up to when we return it to the stock there is actually a report you can run that's called an RTS report that actually tells you what was put back on the shelf because somebody didn't pick it up so I have a different answer to this question we there are we actually don't know that much about where drugs are manufactured and the FDA system although it does it is transparent in terms of the manufacturers that hold a license to make the drug we don't actually know which of the manufacturers are actually supplying the US market at a given point in time and what we've found in our own work is that the number of manufacturers who hold the license far outnumber the number of manufacturers that are actually supplying the US market to account the licenses that looks like these markets are much more competitive than they are actually and so it's entirely possible that actually these markets are much more concentrated than they really than they are perceived to be and so when we have shortages or we see price spikes it's very difficult to figure out okay well is there another supplier that we can go to and say please ramp up supply so that's that's an issue that we need to overcome secondly I actually agree with Mark McClellan here that in the generic space again there are likely willing foreign suppliers of these products who are making them for European countries and who would love to get into the US market but currently don't have the technical know-how nor is the system really transparent to allow them to enter easily I think if we lowered the barrier to entry or just made it more transparent and easier to enter we would have more competition into this market we just don't know exactly which markets we would actually see that type of competition if it was available at this current state so we've got a little time left for questions from the audience and as people are hopefully finding their way to a microphone I just wanted to follow up last point from your opening remarks around prices pulling innovation versus innovation pushing prices because that sounds at first I'm not disagreeing with you but it sounds like one of those things that economists sort of universally believe and then no one else does there's a lot of those so I wonder if you were walking into a legislator's office how would you explain that to them sure monopoly pricing is an important tool to pull innovation investment into this market but so is other things quantity guarantees matter so does lowering regulatory costs for entering so does lowering the actual costs of doing research and development by direct subsidization of research and development by the NIH and by the Department of Justice sorry the Department of Defense in manufacturing drugs or subsidizing the production of these drugs so we I think the public tends to focus on the importance of prices and that again serves pharma's interest and investor class interest but the pricing incentives are erected are the base upon which many other incentives are already exist and could actually be much more used if we wanted them to be thank you not seeing anyone at the microphone can you go to my my bag of questions and you introduced the point about political representatives wanting one issue and one solution and we're in this sort of multi-dimensional multi-faceted world of we kind of have to do all of it I guess I wanted to get both before you answer I wanted to get from Andrea and from Jane I don't expect it to be different but you know how about at the state level is it better worse well I think that resonated when Lauren mentioned that I think we saw that kind of as a collective body in the Oregon legislature yes it was a lot to get legislators heads around multi-dimensional multi-faceted type of piece of legislation I mean I don't even think we could get them around some kind of you know OECD a comparison so we needed to start with transparency and that was the first solution so what is the information we're dealing with is it legitimate does pharma really have a case about recouping R&D costs what else is there so that was our first solution but saying beware this is multi-dimensional the work is not done this will not cause prices to plummet consumers we're going to see a big change in their prices if any it could stifle a little bit price increases but we don't necessarily think that we're going to see anything change overnight so rather than frame it as this is a one step one solution this is a very big problem and we're just going to take the first step right now Jane did you want to weigh in yeah these are really complicated issues there are a lot of state legislators who are in session most of the states are only in session like through March January through March couple states only have four week sessions and so to really delve into the complexity of all of this and the solution up against all the pharma pushback and lobbying it's really hard just one point on that I think it's important to have a long term conversation that we're not going to effectuate change overnight and so I think that as state legislators are dealing with issues and so our federal policy makers we can't let perfect be the enemy of good so having one bill being a transparent to be the first step that's a very important that's a victory and now we're on to the next step so I think you know I equate to you know toile training my children you know you did a great job you get your chocolate kiss and I also wanted to say that like last year we saw that there were about 130 pieces of legislation introduced in state legislatures and then this year and that was over the course of like nine months and this year by March we have 140 and the thing that we see most happening right now in terms of you know picking away at the issue is a lot of the PBM transparency legislation is the thing that can move it seems to be moving the most in the states right now and that's for a couple of reasons one is everybody hates the PBMs farm has done a very effective job of pointing fingers and it is a very opaque business model that they have but also they can't sue like pharma can sue you know they don't have patent law behind them and the dormant commerce clause stuff doesn't really apply so that's the stuff we really see and move in this year with a couple standouts in importation and they're not regulated either which is another well that's another thing that states are doing this year is regulating them licensing them I just wanted to echo Lauren's point there's problems with our pharmaceutical supply chain it's not even just about pricing even about supply just some of the drug shortages and it's actually the same issues as a drug pricing you can't it's just the economics and how medications are accessed to patients because I would gather I would also say that the drug shortages are causing just as many issues with drug prices for patient access and I'll just come back to I think it starts where this all begins with the manufacturer and the problem begins with how they set their price and everything flows from that so as we're thinking about all of these issues which are all valid we need to come back to where it all begins which is how they determine with the list price is going to be for a product Steve I'm going to give you the owner of closing out the question closing question well first I have to say that toddler toilet training metaphors I think are perfectly appropriate for drug pricing I just wanted to say something about the transparency feels like it has arrived and other states will be implementing it there's still a lot to learn about it but as you said we're going to be thinking what's the next step what's transparency plus or transparency 2.0 quickly if you might want to comment because I can see this going down 2 different branches one is to try to take the disclosed information on price increases and have some mechanism for judging whether the disclosed information make sense I mean okay they raised it 15% maybe they had evidence recent evidence that the drug was 15% better than it used to be probably not but you know there's always some process for a back end judgment another way to take it though would be to say right now a lot of these state laws are focusing pretty much just on either generic price increases or price increases of brand drugs and are not trying to go at launch prices and so I just came from a large purchaser meeting today where they were talking to their PBM they actually feel like they've solved the price increase problem they've told their PBM we're not going to do the same rebate structure with you anymore so you don't have an incentive to just let these price increases go and you'll take more at the list price and you know states are going to have an impact through public shaming but the purchasers today are really now pivoting to focus on launch prices and so my question for you I guess is do you see what you think the low hanging fruit with the next stage of transparency what does it look like does it look like moving to launch prices and trying to get a handle of that or is it still something around price increases in some way 10 seconds on by the answers I'll start so I think you're absolutely right and that the more rate regulation there is on the increase the more manufacturers both the generic and the branded space will put those prices into launch price and then we will have an issue about the launch price both of existing drugs and of new drugs too the generally can handle high launch prices in areas where there is significant therapeutic competition but in areas where there is not pretty much we've already signaled that we're willing to pay pretty much anything in certain therapeutic classes so that is the next hurdle my view is again quantity guarantees other types of other types of purchasing arrangements are going to have to be considered here in order to kind of make it more palatable to have some sort of rate regulation or something on the launch prices that we're going to pay in the breakthrough the categories I'm going to give you the last word Rena because we're past time and I want to give Tony Beretta a chance to close this out we'll just stay here and we'll see what happens and I'm going to start to get this one on I'm going to start this one on on on on on on on on on on