 Good morning, everyone, and welcome to our policy forum on unpacking drug value path to fair pricing. My name is Maria Ross. I'm Vice President in Government Relations with Kaiser Permanente, and I lead the Institute for Health Policy, which is producing this forum. I want to thank everybody for coming. We have a very full agenda, and we're going to have a very full meeting room by the time everyone gets here. It's not quite a Los Angeles crowd, but D.C. is always pretty good at filling in the late spots earlier. For those of you who don't know us, the Institute for Health Policy at Kaiser Permanente, our mission is to shape policy and practice with evidence and experience from the nation's largest private integrated delivery system and financing origin. We do this through publications, expert roundtables, and conferences, and I know many of you have been here before for our meetings, and for those of you who are here for the first time, we welcome you on value. Why this? Why now? My shorthand for this is the word value has kind of become a thing in the conversations about drug pricing. We all sort of know what it is, but we don't really pause to think beyond that one-dimensional word, five-letter word, and it's really, it's under the broader discussion, but some of the nuances have been left behind, that, you know, value means different things to different stakeholders, how even to think about measuring it conceptually, how you'd measure it in practice, how you'd enable it with policy. So this event is, we've pulled this together to make sure we understand why drug value is a critical part of the dialogue on drug pricing, how to advance the conversation to define and assess drug value, and to lift up existing and emerging policy opportunities to help do that. And now I'm hopefully going to step down and get my cheat sheet on our housekeeping activities. Thank you, Megan. It's a long list. So first of all, there's materials on the table in front of you that'll orient you to the meeting. You've got an agenda, a one-page issue brief on the state of the pharmaceutical evidence-based information about how to access the Wi-Fi and social media. I think the hashtags are on the table tense. Restrooms are located behind this screen wall, go out the door, down to your left. There's some 50 feet down the hall, and there's some about 200 feet down the hall. It's a packed day. We will have breaks, but if you need to step out in the middle, feel free to do so. If for some reason we need to evacuate the room, please note the emergency exits, which are located behind you, one out to the street, one out to the back door. If you have to make a call, yeah. If the oxygen masks drop, take care of yourself before your friends. If you have to take a call, we ask that you step outside or ask one of our staff if there's a room available for you. And you can identify all of the institute staff by a little blue badge on their lapel or wherever they're wearing it, or me in the case because I have this badge. There will be opportunity for questions as we go through the day. There are microphones to my right along the wall here. And please have questions prepared, and line up to the one closest to you. Lunch will be available at 12.30, and then we'll have a couple sessions afterwards. Before we dive into the program, we'd like to conduct a quick poll, and we're going to do this a couple of times today. This is poll everywhere. And can I get that slide, please? There we go. So to join the poll, text the letters K-P-I-H-P to the number 37607. Again, that's K-P-I-H-P to 37607. And the system should respond to you that you're on poll everywhere. Is everybody getting a message back from the system? Okay. So the question then is, what factors are most important to consider when determining a drug's value? We'll give you a couple minutes. So we see outcomes, efficacy, effectiveness, comparative effectiveness, efficacy, cure, mode of administration. Well, we'll let the system keep absorbing your words as you put them up and on the screen. And then what I'd like to do without further ado is introduce my colleagues who are going to open up the day with some remarks. Tony Beretta, who many of you know, is the Senior Vice President of Government Relations for Kaiser Foundation Health Plan in Oakland, California. He oversees development of Kaiser Permanente's public policy positions in collaboration with senior leadership throughout the organization to ensure that Kaiser Permanente maintains a common voice in the interests of our organization, our members, and the communities we serve. Dr. Samir Asari is an Associate Executive Director for the Permanente Medical Group. He's in charge of pharmacy, adult and family medicine, mental health, risk-adjusted coding, revenue cycle, outside medical services, pain management, and our opioid initiative. Sort of, maybe it'd be faster if we said what you don't do, but Dr. Asari joined TPMG in 1993, and in addition to his clinical responsibilities, he's involved in resident teaching and serves on several boards in various leadership roles. And he's got his medical degree from the home of the anteaters at UC Irvine. So, Tony and Samir, please step up. Good morning. Nice to see so many familiar faces, and I'll be very brief, because I actually get the unfair to all of you responsibility of kind of doing a wrap-up at the end of the day, so I'll offer a few more perspectives on things at that point. The reason that we're here today, and I think tremendous turnout for this, and an amazing cross-section of different people with different interests, is that we are clearly in a dialogue around drug pricing today that we haven't been in for the 27 years I've been working in this space. We clearly have a lot of interest. There's political interest, there's policy interest, consumer interest. It's just remarkable how far the conversation has come in the last couple of years, and so it's really wonderful to pull people together from different perspectives to try to start thinking through. How do we approach the problems that I think all of us would accept we're facing in terms of making sure that drugs are developed effectively, good drugs are developed effectively, patients have access to the drugs, patients and society can afford to pay for the drugs, and that we have a structure of drug development that optimizes both the development of a broad set of highly effective drugs and makes them affordable both on an individual and population basis. Kaiser Permanente's mission is to provide very high quality, affordable healthcare services and to improve the health of our communities. And one of the major concerns that we have is that that mission is being directly challenged by the problems of both access and cost of prescription drugs. We've built up over many years our medical groups, our pharmacy system. We've built up what we think is a truly optimized system for bringing the most effective pharmaceutical therapy to patients who need it. Our physicians, our pharmacists do a fantastic job of identifying much of the evidence that was being reflected on the screen there. We think that we organize things in a way that allows when possible market forces to be used to achieve the balance of what drugs should cost versus everything about how drugs should be priced, whether they can compete with each other, how to bring them through reasonably comprehensive coverage. And the perspective that we have is fundamentally what's going on in the market, how is the market being regulated and how is that functioning to date. And we're concerned and we're very concerned and it's one of the reasons why this is one of several forums that we've held on this subject going forward. It's clearly a very exciting era of biomedical innovation. We think we should celebrate that. And at the same time, we need to recognize that there needs to be balance in the system. And hopefully by bringing a variety of views together, we can start having a conversation that is more about what we all want, which is an optimal system that allows and in sense, maximum levels of innovation for as broad a range as possible and then creates a structure in which people can actually afford to get those drugs and society can afford to pay for those drugs. And if we allow this to get out of balance, bad things are going to happen. And I think there are some policies that have been brought forward that would actually address this in an effective way. There's overdue policies being considered that would address the structures that have been built up over the last 30 or 40 years on drug development, drug financing, drug regulation. Those are overdue and happening and that's a good thing. And at the same time, there are other proposals that could potentially impair innovation going forward. So it's very important for us to have a dialogue around this. Now, one other thing I just wanted to say was when the registration was done online we actually asked all of you to say, what are you hoping to get out of this session? And the one that I enjoyed the most was the fact that we had subtitled the session, a path to fair pricing of prescription drugs. And of course, fair is the kind of word that economists don't like to see. So a few of our economist friends offered unsurprisingly come and say, well, I'm hoping to learn what fair is. And that reminded me of the dialogue that I always have with my father. I grew up about 15 miles north of here in Rockville in Silver Spring. And whenever we in our family, somebody, one of the siblings would say, that's not fair, my dad would immediately leap on it and say, fair, there's no such thing as fair. There's one kind of fair, Montgomery County fair, third week in August. And he would then pile on to that and say, you want justice? There's only one justice, Department of Justice, 10th and Penn. So this was how he would do this. So that, of course, imbued in me a really strong interest in questions of fairness and justice. And I do think that when we're looking at questions of value, it intersects the question of fairness because at the end of the day, what we do want is a fair system for everyone. We want a fair system for the patients who are all trying to serve. We want a fair system for the manufacturers and the researchers to be able to put their efforts in and be rewarded appropriately. We want a fair system for the clinicians to be able to have access to the products that they need to treat their patients. And we need a fair system of financing all of this so that there's the appropriate balance of the individual concerns of the individual patient with the society that contributes either through taxes or premiums to make sure that they're getting good value out of that. So I think we're teed up for a great conversation today. I'm really pleased that so many people from so many different backgrounds have been willing to come and spend the day with us. I'm really looking forward to it. But for now, I'm just gonna pass it over to my colleague, Dr. Samir Asari. Well, thank you, Tony. And good morning, everyone. Hope you all found the coffee. It's right there. The drug pricing model in our country is broken. It's just broken. There's something simply wrong if one out of four people in our country cannot afford to take their medicine. There's something simply wrong if the average price of a specialty drug is over $50,000, which is actually more than the median income of people in the United States. Not only are specialty drug prices high, the prices of generic drugs are going up. The prices of brand name drugs are going up. The price of every drug is going up. So why do we care about that? Well, as a physician, let me share a couple of stories with you about how high costs of drugs are affecting my patients. And let me tell you about, I'll call her Mrs. Jones. She's 75 years old, and she's got heart issues and diabetes and cholesterol and all sorts of stuff, and she sort of went into heart failure. And we were able to control her really well, and she was doing quite well. January, February, March were doing quite well, and suddenly here comes October, and she's in the emergency room getting sick with heart failure, and couldn't figure it out because the treatment was right. And finally when we talked to her, she said, you know, I'm sort of on hard times and I'm not able to afford my medicines. I've actually been taking it every other day or every third day. So here's a lady who's pretty sick, well controlled for the whole year. All of a sudden has trouble at the end of the year when she doesn't have money, and she's in the emergency room and in the hospital. I'll give you another example. Have a patient who was on PrEP, and I saw my colleagues here who are actually bringing a generic to market, and PrEP is taken to prevent HIV infection, working very well, and suddenly his employer changes, and he gets a high deductible health plan and then stops taking his PrEP. And I didn't know that until I got to see him, and he said, well, you know, I've been not taking my medicine, and actually I was trying to find it online in the Philippines, but it was like $4, so I wasn't sure if it was really effective, so I didn't buy it. So here's our patients who are actually taking their lives in their own hands because they simply cannot afford their medications. And I was really shocked because I'm at Kaiser Permanente. We're an integrated delivery system. We think our patients really behave and we know everything about them, and we know when they pick up their medicines and we know they're taking good care of themselves. But here's my own patients in our great system who are still having difficulty, and fortunately for them we were able to refer them to financial assistance and get that to actually work for them. But how many other physicians have patients just like this who are taking their lives in their own hands because they cannot afford their medication? So this is an issue we really need to talk about, as Tony said, and we really are not trying to blame anybody about it. We need to come to a solution because our patients are really counting on it. So how is this affecting Kaiser Permanente? So as a physician, the patient-physician relationship is really critical to me. I feel that I have a great chance to talk to my patients, tell them about their condition, and then come up with a treatment plan. And I'm assuming they're actually going to do that treatment plan. And when the high cost of drugs kind of gets in the way of doing that, that definitely is a big issue. The other issue I have is we often wanna do not often, we always wanna do informed consent with our patients. We wanna be able to tell them the risks, we want to tell them the benefits, and kind of guide them to what the therapies that are gonna be most effective for them. And this is sort of a two-way street where we have a lot of new drugs coming to market. And often they're fast-tracked, often they don't have a lot of research behind them. And it's very difficult for me as a physician to tell the patient whether something's gonna work. And they often have a lot of hope, right? Something new is on the market, and perhaps I might benefit from this. But I, as a physician, cannot really look at that evidence and tell them, in all honesty, to say that this is actually gonna work. And let me give you a couple of examples. There was a drug that came out for muscular dystrophy called Exondus 51. And perhaps the research involved only 12 patients. And if I recall, two of the patients actually died, two of the patients got worse, and eight of the patients actually had no change. And I think what they were looking at was how far could the patient walk after getting this drug, and there's really no change. They actually then started looking at some protein levels, and there was a change in a protein level in eight patients of 0.1. And at that time, the FDA actually said, perhaps we should not approve this drug. And of course, patients then feel like they're losing hope. A bunch of patient advocates came right here to Washington, D.C., and the drug was actually approved. And now we have patients coming to us, to our neuromuscular specialists, asking for this medication with almost no proof. And forget the price, it was $700,000. But definitely when you have a medication like that, which is approved by the FDA, not shown to really work, patients have hope, what do you tell them as a clinician? You actually have to tell them the truth. As far as I know, this medicine is not shown to work. We're having a similar issue with another new medicine that's come out, and you might have heard of it, Zolgesma, it's $2.3 million. It's actually supposed to take care of a type of spinal muscular dystrophy. And again, all of the studies have been done in patients who were six months or younger. However, the last minute the FDA approved the drug for patients who are as old as two years old. Again, without a single study or a single patient where they had actually tested this medication. And today in our system, we have patients coming to us, coming to our physicians, asking for this medication because it's FDA approved. But again, it has never, ever been tested in anyone over six months. So what do you say to that mom who brings a child who's 15 months old or 18 months old or 22 months old? Again, you kind of have to tell the truth. And here's where it kind of gets difficult between the physician and patient where someone really wants that for their child. It's their only hope, but it's actually never been shown to work. Yet it's been fast-tracked and yeah, the price tag is also $2.3 million. The other issue I have as a physician is, you know, which drugs actually give us some fantastic value? So the hepatitis C drugs that came out in the last few years, you know, they cure hepatitis C. Forget what they cost, but they actually are extremely effective. And that really gives us tremendous value. That is something I wanna give my patients. What about all these other drugs that I don't know which, we had omeprazole, do you remember omeprazole came out, prilosec? And then it went generic and then they decided they changed the color of it and make it purple and actually use a mirror molecule of the same pill. And today there's probably 15 or 16 of these proton pump inhibitors and the price just keeps going up on them. But the old one still works and it's still once a day and it's still cheap. And so I'm not sure when drugs like these, these Me Too type of drugs that come on which are extremely expensive and marketed to my physician colleagues who then prescribe them actually bring any particular value. As a physician leader, so I talked to you about how it is when I'm talking to my patients. So how do I think about this when I'm a physician leader? And as you know, in Kaiser Permanente, we're an integrated delivery system. So not only do we have to build hospitals, we have to get the next MRI machine. We decide which doctors to hire, whatever technology we're gonna invest and we have to have pharmaceuticals for our patients. And when the cost of drugs gets higher and higher and they take a bigger and bigger piece of the pie, we have to think about, are we gonna open the next hospital in Redwood City? Are we gonna get that next technology do we need? Are we gonna actually spend all of that money on medications for our patients? So what should we do about this problem? We definitely do not want to stymie research and things that our pharmaceutical colleagues and researchers do that definitely benefits our patients. So we don't wanna put a lid on that. But I think there's a good framework to look at the high cost of drugs. So one way to look at it is through the lens of transparency, competition and value. So you can pretty much get on the web and find almost anything about whatever you wanna know. So let's talk about our healthcare systems. I work at our hospital at Santa Clara. You can go onto the website, find out about Kaiser Permanente Santa Clara. What is our rate for giving beta blockers to patients with heart attacks? What is our rate for hypertension control? How do we do with sepsis? All of this information is actually available. Tremendous amount of quality information on our physicians is actually available on site. What's our diabetes control, our hypertension control, our asthma control? I think we do not have that same kind of transparency for the costs of drugs. We definitely wanna make sure that our pharmaceutical companies can actually get back the investments that they make. But how do they decide on these prices that just go up every single year? And it's not really clear to me and it's not really transparent. So I would challenge pharma to think about being transparent and just like the rest of healthcare and kinda talk to us about how you price some of these drugs because if you don't, people will think you do it just because you can. So you gotta change that argument there. Let's talk a little bit about competition and the example I really like to use is those flat screen TVs because when they first came out, I couldn't afford them. They were like $15,000. And then they dropped to 10 and then they dropped to five. Now you can just walk to Best Buy or Fries and you can get one for three or $400. So that's our society, right competition, our capitalistic society. The last time I was in front of the California Senate, the Senator asked me, so why doesn't that work for the high cost of drugs? I said, I'm not sure. We used to have a multiple sclerosis drug that came out. It was $10,000, there's only one. We have 15 today, what should happen? The price should go down. They're all $60,000, $50,000 to $60,000. They're essentially shadow pricing each other. So for some reason in pharma, some competition does not seem to work. And maybe you all ought to think about why that is in this country. The part we talked about today is really value and I'm really glad we're gonna be talking about value. I mentioned the example of the purple pill. We definitely have medications that have changed people's lives and people have invested in bringing those to market. So how do we value those? How do we come out with drugs that are $2 million? I'm sure there'll be three and four and what goes into making those decisions? As Murray mentioned, I'm involved with our opioid work and the approach that we took was really no blame. So don't blame the patient saying, you bad drug addict, you're taking these pills, are you bad doctor who's just writing a whole bunch of prescriptions. Let's just make sure how we can keep our patients safe and do the right thing for our patients. So I think this is the opportunity we have today. We have the opportunity to actually concentrate a little bit on value, figure out how we can get together and have a conversation to make sure that drugs are affordable to our patients. They are counting on it. So I'm really excited that all of you are here to talk about it.