[inaudible conversation] good afternoon ladies and gentlemen. For those of you who are just tuning in and our Television Audience in public Radio Audience and on the internet, welcome to the National Press club. Since 1908 we have been the embodiment of the constitution. Before we get started, i want to remind our guests in the audience of some housekeeping roles. Those of you who may have come in late, please put your phones on vibrate because we know you want to tweak. We want you to follow the action and so on twitter you can follow us at press club d. C. And using npc life. I want to introduce the head table. As i introduce each of you, please stand and briefly as your name is announced, it will be from my left and youre right. Senior reporter and treasurer of the National Press club. Michelle is the membership secretary of the National Press club. Sally is the executive Vice President of Corporate Affairs at pfizer. And breaking news editor at usa today in a past member of the press club. Kenneth cole, senior Vice President of Government Relations at pfizer, skipping over myself for a moment, economy reporter for Bloomberg News and deputy leader for the National Press club Headliners Team which organizes all of our speakers in the club. Skipping over our speaker for a moment, danny is senior Vice President for policy wire and the National Press club member who organized todays luncheon. Andrew, based president of global Media Relations and communications at pfizer. Kathleen parker, syndicated columnist for the washington post. Washington bureau chief that modern healthcare, susan jaffe washington correspondent for the lancet and a contributing writer for health news. Allen, chairman of the Fourth Annual warden d. C. Innovation summit. [applause] i am jeff blue, news editor for the americas for al jazeera, and now its time to bring in our speaker. As we gather, a healthcare bill intended to replace obamacare is subject to small internal conflicts within factions of the republican party, actually, massive. Along with President Donald Trump they are driving the measure. As they continue to be shot back and forth on capitol hill, some of the issues wrapped up in the debate for healthcare are accessibility and affordability and innovation. Some of the latter are tied up in obtaining lifesaving pharmaceuticals with prices that seem to keep rising and not falling. One of the stewards of the drug industry is ian read, ceo pfizer pharmaceuticals. If youve heard of tetracycline, the key ingredient to combat acne and another that combats Breast Cancer or lipitor that controls cholesterol or the little blue pill, viagra, you know what that is for. All of that falls under mr. Reids care. He doesnt come from research and Development Labs like penicillin that helped put pfizer on the map but the Financial Health as an auditor, which may be good training because mr. Reid and his counterparts are under tremendous fire to make 100,000 cancer drugs more affordable without having patients needing to apply for special assistance programs. Or, in pfizers case, under fire by being find a record 84 Million Pounds or 105 million due to overcharging Britains NationalHealthcare System. They have taken heat from both sides of the aisle from the president of the United States and from democrats in past years like carl 11 for uprooting their headquarters from their Humble Beginnings in brooklyn and going to ireland for better tax deals, which they contend is for better job growth. The Trump Administration, for its part, believes the price of Prescription Drugs can be lowe lowered by cutting corporate taxes to Keep Companies from moving overseas. However, mr. Reed feels there is no need to alter its drug pricing practices in a story in reuters in late january. The president doesnt understand his industry. Well talk about these and other issues, along with a robust questionandanswer time. But after opening remarks please give a warm welcome to ian read, the ceo of pfizer. [applause] good afternoon. Can you hear me . Thank you to the National Press club for this opportunity and wonderful welcome. I am delighted to be here with you today. At pfizer, our culture of value is straight talk. I have a coin on me, i wont bring it out today but it expresses that philosophy. Today i want to have a candid conversation about the risks of Drug Discovery and development, the Economic Contributions of our industry, the barriers to Patient Access to affordable healthcare including medicines, and some observations regarding how we can create a Healthcare System that supports innovation and provides Patient Access. Drug discovery and development. If you think back to what treatments were available in the 1940s, i know most of us cant do that, there were available for infections, depressions, ulcers, blood pressure, parkinsons. There was almost nothing. You can look at a tv ad and see a patient in front of a doctor in blac black and white and the medicine cabinet behind the physician and he turned and it was bare. Today that is not the situation. Today we have incredible medicines that have turned fatal illnesses like hiv and aids into a chronic condition. Slowed progressions for Rheumatoid Arthritis, cure diseases such as hep c. Helped present childhood illnesses with vaccines, provided treatment for painful ulcers and gerd. If you have gerd which is reflux, it makes your life misery. Its not a trivial thing to take a pill once a day and not have that issue. Gerd leads to cancer and other conditions. In cancer we are developing new therapies that harness the natural ability to fight cancer along with the other amazing discovers weve made in the previous 20 years. In 2014 and 15200 new medicines were approved by the fda. Many of them were for rare diseases, cancers and other conditions, where there were no good treatments available. The pipeline across the pharmaceutical industry for new medicines has never been more promising. With more than 7000 medicines under development, an average of 70 of drugs across the pipeline are potentially first in class medicines. That is, that drug has not been discovered before. That mechanism had not been discovered before. What do you attribute this progress . I believe it is the result of focused investment in highly risky Drug Discovery and development combined with advances in basic research from our university and other types of institutions. From discovery through fda approval, developing a new medicine, on average, takes 10 t 2. 6 billion. That is the number from boston university. Less than 12 of the potential medicines that make it to phase i Clinical Trials are approved by the fda. You can look at the study and you can quibble about how it was done. I can give you a very easy way of knowing what it cost to develop a drug. Pfizer spends 8 billion a year. Thats on research and development. If we are lucky, we produce three drugs. Year. I dont need to study to know what it cost to bring new drugs to society in todays environment. For example, between 1988 and 2014, there were 96 unsuccessful attempts, only seven new drugs developed to treat melanoma. Ninetysix unsuccessful attempts. In brain cancer there were 75 unsuccessful attempts in only three new drugs. In lung cancer there was 167 unsuccessful attempts and ten new drugs, one of which was pfizers. To discover and develop a new drug, the pharmaceutical industry spends on average six times more in r d compared to other industries in the u. S. In 2015 they invested a combined 58. 8 billion in research and development. That is 28 billion more than the entire nih health budget. Of which, only a fraction is dedicated to Drug Discovery. The Drug Discovery process is complex and not well understood. After 38 years in the industry, its probably one of the most complex undertakings that humanity has. To take an idea and bring it through the Drug Discovery process over 15 years, ensuring excellence at every stage and data at every stage to get a drug that can be taken by humans with a positive risk benefit equation. Lets briefly review what it means to bring new drugs to patients in laymans term. The process begins with basic Research Done by researchers who are active in institutions and government institutions like the institute of health. They postulate, sometimes find biologic pathways that give insights into a disease or possible approaches to treating the disease. This is a critical step. It is light years away from having a medicine that can treat your condition. The pharmaceutical industry draws from the basic Research Findings once they been validated. Normally in academia you publish and it gets validated by somebody else and you have the understanding improved and at that point the industry may begin a Drug Discovery process from those original scientific findings. To take this understanding and translated into a research hypothesis, often through animal models that began 10 15 year journey to get medicine to patients. We discover a molecule, create a molecule, synthesize a molecule that we believe will interact in the right way with the target pathway. We run studies to ensure the molecules have what we believe is the desired biological effects. We verify the compounds follow kinetics and dynamics profile and how it affects the body, and we run multiple tax holiday tecy studies prior to beginning testing with humans. At that point we begin early studies referred to as phase i and phase ii to understand the right dosing and assess the safety of sec and compound and determine the right Patient Population. Once phase ii has been passed for safety and efficacy, we create large phase three trials with thousands of patients to prove the risk benefit of the drug. Then we submit the data to a regulatory body like the fda for approval. This process has many interactions and false starts. Very often you start with the basic drug substance and it is toxic. You remove the toxicity and its no longer effective. There are multiple attempts to get the right medicine with the right distribution. I will share with you pfizers example. Our first in class drug for the treatment of Breast Cancer, one of the deadliest and poorly understood cancers. It started in 1990 with original Research Done by independent researchers that identified and characterized t regulated cell division. Through researchers at ucla we identified the right Patient Population for our compound. By 2008 we had an acceptable molecule that we believe appropriately interfered with the disease to disrupt the growth of tumors. This result was that after 25 years of initial basic research, we had a cdk inhibitor. Seven years after the first patient was dosed in Clinical Trials, it was approved by the fda. More than 50000 patients in the u. S. Alone have been treated since its approval in 2015. Before the drug was approved and launched, we began conversations with the healthcare community. We spoke to more than 80 payers, more than 20 breast cance cancer experts and oncologist to understand the value of this medicine. What it does, what it does against competition, what advances it gives, how it changes qualityoflife, how it extends the life, and based on that input, we negotiated with the plans and the payers price and access to the drug. We continue to make significant investments. It has been studied in patients with early Breast Cancer and there are 30 Ongoing Research programs across various non breastcancer tremors. After two years on the market, there are two competitors, one approved and one in development and thats how the market evolves. You get a patent on your molecule. You dont get a patent on treating your disease. It has to have superior efficacy or characteristics to be successful. More and more we are followed in by competitors with similar molecules. Today there are other therapies. There are new therapies that result in improvements and understanding of biology. Huge investment in risktaking by the industry. Lets talk about Economic Contribution to the industry. A continued stream of treatments wont flow if society is not willing to fund and support and industry. They get cures to patients. I would like to note that in 2014, the biopharmaceutical industry represented 3. 8 of total u. S. Output which amounts to more than one point to trillion dollars. When you take into account the value of goods and services induced by the industry and the impact on the economy, one point to trillion dollars. This includes the Economic Activity of the workforce and fourpoint to million jobs across the u. S. Economy including direct and indirect provider jobs. I want to be clear, we understand our responsibility. Every scientist understands the responsibility and pfizer wa understands our responsibility to produce medicine that bring significant value and are competitively priced. We are working toward an understanding by society of the investment we make, the risk we take and by we i mean our shareholders. An appropriate return on the totality of our investment, the successful drug will always, will normally be profitable. Unfortunately, there is a lot of dry holes on the way to a successful drug. You need to have a cash flow to support the entirety of the biopharmaceutical ecosystem. Lets talk about access and transparency. We understand the access issues for patients and what they face with copays and high deductibles and the need for value chain transparently in this process. We give away for free, to 250,000 patients in the u. S. , 1 million prescriptions in the u. S. Because the system is broken. They need to come to us that last resort because the insurance system is failing them. Transparency should have patients and physicians to make the right choice that delivers the most value. That is transparency. How does a physician know the best product and how does the patient know they are getting value from that product . How do we know patients are paying higher outofpocket costs and a greater percentage of the cost associated with lifesaving or medicines improving their condition as compared to expensive interventions like hospital visits. On average they paid 3 of the cost of hospital care out of your own pocket. You are asked to pay 15 out of your pocket for drug costs. This is not transparency. Most consumers do not know this. Rather, medicine reimbursement costs are often use by the system to avoid adverse selection. When considering transparency and Patient Access, the entire Health Care System needs to be taken into account, not just pharmaceuticals which represent 12 of the total healthcare costs. We need to consider two factors. Visibility and understanding of what youre getting for your insurance make it clear to the patient and the patient benefit design that meets the patient need. Id like to use the analogy that patients need soli solid insura. Good insurance. Similar to what you have for your home. A persons home is destroyed by fire, the Insurance Company covers the majority of the cost to rebuild the house. People know what theyre getting. Theyre able to rebuild their house. When it comes to your health, you should be able to have insurance to cover diseases like cancer or Rheumatoid Arthritis without having to bear the burden of the expense. Individuals cannot afford martin pharmaceuticals. It has to be done through an insurance system or risk sharing system. The cost to produce and bring them to the market is out of reach of individual pockets. However, the Way Insurance plans are designed, prescription costs are shifting to patients. Plans have large copays, 6000 deductible before you get repayment, no first dollar payment for pharmaceuticals. This is not good insurance. There are little incentives for the prevention or cure over the longterm. In many cases, benefit designs are constructed to avoid sick patients. For instance, previous to the Affordable Care act, we have a product that helps use top smoking. Insurance companies wouldnt cover it. Why not . They dont want smokers on their insurance roles. They are bad risk. They have great difficulty getting access to the drug and insurance systems. Hepatitis c, lets look at that example. One example happened when it was introduced. It wasnt about the value of the drug, the evidence demonstrated it was costeffective, the debate was about the shortterm impact on medicare and managedcare budgets of an unexpected expensive highvalue medicine that they hadnt adjusted for before it was available, the average annual cost for treating a patient with hep c, depending on what stage they were in was 60000. Year with people with in stage liver disease. 112,000 patients with liver cancer and 500,000 for patients receiving a liver transplant. An average lifetime was 205,000. Compare this to the cost that more than 90 of patients with the common form of hep c can be cured with the new drug in as little as eight weeks. This is a lifetime cost now of slightly more than 45000. Because of intense competition the cost is 50 less than the cost it was launched that. Lets look at returns of the industry. I think there are many ways you can put the pharmaceutical industry. You can put the benefit to society. The transparency you are seeing are not an appropriate way to measuring the benefit of the pharmaceutical industry. Seeing that the drug, once approved only has half of the patent life, maximum patent life you can get is 14, one the patent is available in form of genetics. They are available forever to society at the price of generics. They would not have been available if they werent discovered. Another indicator of equitable return is shown by the financial performance. The drug is highly profitable. Thats an insight. If you look at the average return of the pharmaceutical industry compared to last five years, they include consumer, software services, telecom and insurance and healthcare. The pharmaceutical industry ranks 19th in terms of pricetoearnings ratio out of 25. Its a key indicator of the Growth Prospects of the company. Eleventh in terms of equity ninth in returns of capital and ninth on. [inaudible] its also noteworthy that since march 2010, the return of the pharmaceutical industry has been lower than the Largest HealthInsurance Companies including united health, cigna, humana. As a whole, these Companies Outperform the s p 500 stock index which turn hundred and 5 over this period. Collectively these gain nearly three 100 including dividends. The pharmaceutical industry turned 91 including dividends. Overall, i think its fair to say we are being responsible when it comes to the pricing of our medicines. We are producing great value for society and taking large financial risk to the uncertainty of the drug. We dont set prices, we negotiate prices. We negotiate on the value of the drug and the value to society. There are two examples to demonstrate, more specifically the value of what we do. In ten years, stanton use has increased 1. 3 trillion in economic value to the u. S. Of which, around 950 billion was retained by society. Around 20 of the value came from the revenue from selling the drugs. It became 25 of the total value of staten. At the same time, the cost of it has gone down 90 . Society now has that benefit, that invention forever. From 1988 until 2000, cancer for survival created an estimated 23 million additional life years. 81 of that value was accrued to society and 19 accrue to the pharmaceutical industry. However, we understand that while drugs are highly costeffective, our Health Ecosystem is making it difficult for patients to get the healthcare they need at the cost they can afford. Especially in lifesaving medicines. I believe we have a collective opportunity to start mending our broken system to make sure the voice of the patient is heard. We believe there are four tenants required to meet patients needs. We need to provide all patients with access to Quality Healthcare coverage. Coverage that includes preventive care, access to cost preventive interventions like medicine and comprehensive care for things like cancer. We stand willing to play our part in helping patients have access to those medicines. We do already with our patient assistance programs. We need to have incentives for healthcare that rewards people for good health and provide financial incentive to allow providers to manage risk and prevention. We need to get the right incentives in the system to pay for health, not for the treatment of illness. If health plans provide us for improving health over the long term and patients were rewarded for investing in their health, all parties would benefit. Especially the patients who would have good insurance and patients that could cover highvalue designs at Affordable Care copay. Lets look at both sides of the issue. Look at the pharmacy bill. Lets look at all the cost and Healthcare System and all the healthcare costs saved while using this medicine. Longterm outcomes versus shortterm considerations. We need to base our solution on competitive market principles, get the right incentive for the whole healthcare sector in the right place. Specifically for the pharmaceutical industry, we need policies that spur public and private funding is. Most Companies Like pfizer have a huge number of programs we cant progress because we cant afford it. We cant cover the cost of capital. We need increased investment in manufacturing. We need to accelerate Scientific Development of lifesaving medication and eliminating the backlog of generics. We need favorable policies that create a level playing field, protect American Intellectual property and remove barriers to access. We believe committing to these ideas can lead to an efficient marketbased system for all segments of the Healthcare System, providers, payers, pharmaceutical companies and patients. With that, i am pleased to take your questions. Thank you very much. [applause] okay. Just the housekeeping note on questions. If you have a question here in the house, you have these cards in your table. You may write down your question and pass them up to either end of the head table. We will sort through them and try to get to as many as time allows. I like the gavel. Its a replica of George Washingtons gavel. First of all. As you can imagine, we have quite a few through the internet and a bunch of different questions. I have not seen all of these questions in depth and just for the record, neither has mr. Re mr. Reid. This question comes from one of our Board Members who covers health care for National Public radio. What do you think of the negotiations on the healthcare bill in capitol hill, specifically lawmakers today are debating whether insurance policies should be required to have a minimum level of benefits to qualify for tax subsidies. This includes Prescription Drug coverage and Health Benefits should remain in law . I think its a situation of, my preference is less regulation and more marketbased incentives. Theres a right way to answer that issue. But you do need a safety net so i believe we should always have an appropriate safety net for people who cannot afford insurance and who have preexisting conditions. Just a quick followup because this is sort of breaking. The House Freedom caucus chair says theres no deal on the House Republican bill for it to replace the Affordable Care act. Whats the impact on the industry from your Vantage Point cracks that President Trump has been think i want this bill. I think i can make a deal. Hes told you directly come something you criticized about that he doesnt understand your industry. I dont believe theres any shortterm impact for the industry. I think the tremendous impact is for patients shortterm. What would you see an Affordable Care act that is collapsing. Its push into existence, no first time covered for pharmaceuticals. Its push into existence 6000 deductible board you get to any reimbursement. For instance, when king versus burwell was being discussed, we looked at what would happen if they struck down the federal exchanges, and we decide we would provide our medicines for free to everybody who are on the exchanges. The cost to pfizer, 40 million a year. I mean, any 52 Million Corporation thats nothing. Because no one is using our medicine in exchanges because the exchanges to provide them access. So i think we do need to reform the health care the way it is delivered, and the consequences will be to patients. A lot of people have the perception that the pharmaceutical industry is very powerful. Couldnt you prevail upon, is it just a lehmans thinking you couldnt prevail upon the Insurance Industry to cut a decent deal for patients . The Insurance Business is in the business of taking more revenues than they pay out in premiums. True. Therefore, has no incentive its a business. Well, moving on. [laughing] question from the audience. The american medical association, the American Hospital association and the American Association of clinical positions as well as many other healthcare groups have expressed their opposition to the current Republican Affordable Health Care bill. Does pfizer also oppose this bill . And if so, why . If not, why not . We are in a democracy. Anyone can express their own opinion. Pfizer has not expressed a formal opinion on the present bill in front of congress. We support principles that would like to see enacted like ability to access medicines, reasonable copays, fairness in the system, choice in the system. We support those elements of any plan. What specific regulatory forms would you like to see at the food and Drug Administration . Id like to see a message from society to the food and drug association. They want the association at the fda to move more towards a better balance between risk and benefit i think the fda is set up and expend the conditioned by society, condition by congress to be extremely conservative and not willing to take the appropriate risks to benefit view on the development of new drugs. Speaking of which what you think of President Trumps pick to head the fda . You know, the doctor, ive met him in business situations. I think hes a respected physician. He certainly has been a regulator. He knows the fda. I think he was there as a deputy at one point. We look forward to working with him and even the administration to ensure that our drugs get the patient as quickly as possible. Spew what is fighting to control the misuse and excessive prescription of its highly profitable opioids . Well, im not sure i miss you accept the premise, but we produce opioids because they are an extremely important part of the Healthcare System for people who need to do with chronic pain. We promote these products strictly on label to physicians. We also have a product as you know, the locks own, which can rescue from from an overdose. That we are making naxolone making available for 11 for one treatment which i believe seems a very reasonable price to sate somebodys life. Its one injection. We also given 1 million to the state and a million doses of naxolone to the states. Opioid addiction is destroying families and destroying parts of our society. So we will support anything that allows the appropriate use of opioids. So if you can make that drug available for 11, why not know the cost of high brands . Is where to look with the value delivers to the Health Care System, and the cash flows that we need to continue to research and cancer. So its a matter of what value does the drug deliver, and we need to recover that value because if we dont we cant continue to investigate this is why i use a macroeconomics for you. If we had a return on capital 25 , then i think society can say wow thats a pretty rich return on capital. Ill return on capital as an industry is about 11 . Its not that healthy. The starting return on capital is eight or 9 that your shareholders require. So you have to understand that our focus is whats the value of the product . Can we recover a portion of tht value . I noted to you and statins in cancer we recover 26 so we are conscience of it. We negotiate to make sure they see the value in what we provided. Thats how we price. Different question. You harped on transparency a lot and accessibility. Yet in a state massachusetts or company had to be subpoenaed to have information on your donations to patient assisted groups. Because essentially the massachusetts prosecutors felt that you are contributing to the inflation of costs. Thats their point of view. I would argue that what we do is totally within the rules of the oig. We feel we are completely within the present regulations and laws, and so we act accordingly. But we are cooperating with the investigation. You mention that the insurance system is broken. Health care obviously is front and center. Whats one thing you Want Congress to know . Did the incentives work. You get a system to work and if is iraq. You dont get a system to work you ensure some equity for regulations. If i was to wake up tomorrow and redesign Health Care System as one persons of you, most people stay in the same geographic area. They dont switch hospitals the way we switch Insurance Companies or providers or doctors. I think the risk and the reward should be placed on the providers and our system. They should be compensated for taking that risk. And if theyre taking that risk their totally incentivized to look at the health of the population and not the treatments, the number of treatments they would give. That would focus truly on health care. They would the patient for most of their life so that incentive and the risk should be held there. Insurance companies could provide a service of adjudicating the level of success of the population for the appropriate transfers to those providers. That would align incentives. Theres a lot of questions as you can imagine about congress, about drug prices. What concerns do you have about Congress Getting into the drug pricing market as they debate this latest version of health care . I think that, i dont believe that price controls in any part of our Economic Activity produce a choice or opportunity for innovation. And so i would advocate against any type of price control. Its a very blunt instrument. It wont allow innovation or the huge cures which we see and will not allow diversity in choice. I think its a bad policy. According to one of the trust of journalism transfers he cites, opensecrets. Org, your company spent 2. 7 million on political donations, and another 9. 7 on lobbying. What did it get you . Well, what we spend on, and i cant really confirm or deny those numbers because i dont, i really dont know where they come from. But my point of view is that we have to as part of society be part of a legitimate discourse with our regulators and the people to regulate us and the political class. We have to be involved. We had to advocate for choice and access and low copays. We have to be part of society. This expenditure is part of the political discourse which we think we are entitled to as a company. What does that mean for the little guy and gal who are not walking about with that kind of money in the pocket . I think every part of society has different ways of expressing their views, and they can join the sensations. They can express their views individually. They can write to the congressman. A dont spend that sort of money because they are not trying to interact with the 50 states and all of the congressman and all of the senators and all other regulators come and inform and educate so they dont need to spend that type of money. The use of Veterans Administration pays some of the lowest prices for drugs the u. S. For bulk pricing picture that be expanded . Theres a deal spiritually disagree with the premise of the question . Yes. Its a deal that was struck a long time ago and the United States is a prime example of nobody pays the same price for the medicines. Its a marketplace. There was a deal struck that basically says that we as an industry except that the veterans are a population in need of additional care, and we provide our products close to noncommercial prices to veterans. And we do that on the basis of those prices dont affect the prices, that we sell to mitigate. And the prices we sell to medicaid, which are highly discounted dont affect the prices we sell to the private sector. This allows us to create access for the most distant fortunate members of our society while preserving a Business Model that allows us to continue to find innovation. There is no way to take, extrapolate that model and keep your industry solvent . Yeah, you could no, you could, you could extrapolate that model and this is what the europeans do. Its an oxymoron saying he negotiate with government. You dont negotiate with governments. You take what they offer you come if youve already got your investments sunk. So the result of extending those preferential prices would mean substantial reduction in the total bond spent on research and opportunities for new products. Without the u. S. Market they would not be a tremendous expansion in the innovative therapies that are available today and will be available in the future. Basically you are saying europe free writing on american innovation. And so how do you balance the scales . Uniquely trade agreements. Intellectual property is protected. Speaking of trade agreements, thats one solution. The president of course bailed on tpp. We didnt support tpp because it was really bad for our intellectual property. It didnt give us 12 years on biologics as that in the u. S. If you look at candida, australia, zealand, highly developed countries all free riding on inventions in the United States. If you look at access to the population, i dont have the exact numbers are but i think if you say there were 100 products, 100 new products authorized in the United States, australia and new zealand, the population has only access to 30 of the period in the uk that excess of 47 . Normally two to three years later than the u. S. Their citizens are not getting Quality Health care. So youre saying thats why candidate is cheaper . Because of rations and because it can because it free rides off of american innovation. Our ability, in our industry, let me be very clear. We have sunk all the money up front. You are not paying for the pill. The pill is an artifact. What you are paying for it all of that Clinical Trials, all of that knowledge and experience issue which tells you that you will do what it will do. The pill is irrelevant. Its just the way of getting that into your body. Once youve done all that work, you are very subject to commercial blackmail. Because you need to try to recover as much money as you can from the sale of that intellectual property and, therefore, you are forced by governments to say well, i know you get 100 in the u. S. , and thats a market base price, but were not could you access to our market at all, and you have a choice. You can either say no, in which case you get no funds to support your research which means prices go up more in the u. S. , or you say okay, what can i negotiate . And by the way, if you say no, ill give you an example to make it very clear. Its a huge advance, it allows women with metastatic Breast Cancer ive got to say it gives them 24 months against the standard of night of survival. It is an incredible revolution in the treatment of this cancer. You go to the uk and the uk government has assessed of this and is offering us pennies on the dollar. Pennies. The problem is i can say no, which i have and we will walk away, but novartis is there, lily isnt there. The next company is due. All of them invested the money up front and all are incentivized to try to recuperate something from that marketplace. You cannot negotiate with governments. On a slightly related scale, remember when former president bush teamed up with former president clinton on pepfar and other things, going to third world countries to try to lower drug prices there. Cant that sort of sane thinking be brought back here . We do. Thats why we give away 1. 79 prescriptions. But more than giving away the prescriptions. Im talking about the pricing. The price has to reflect the value of what you produce. If not you dont have an Economic System that makes sense. Sense. The price has to dictate where you put your resources. Do you put into Rheumatoid Arthritis, into cancer, into a mental disease . Pricing reflects economic value, and you need that to get joyce. So you cant, if you distort those market signals you distort everything we do. And so our responsibility is to produce the best and brightest medicines we can make the biggest impact on human life. And then to price it at a value that allows us to continue to do that work. With a reasonable return to our shareholders. Thats what we do. I have just shown you the indices, the return we get an stock market is in the middle of the road. Its not at the higher end of what some industries are. And so that, so in the end its not its societies decision of how much do they want to pay for innovation. If you dont want innovation or the next cures, been price control. If you dont want innovation, then say you are to sell all of the drug prices at the same as you give to the veterans. These are not economic prices biggies are prices for different segment of a population that have great need. This Industry Needs to have a return that allows it to continue to do its research. But you get the perception that because of the revenues of yours and other related companies that was very popular during the president ial campai campaign. Its always populist spirit but you get the whole notion they are saying hey, you are earning umpteen billion dollars in revenues. You cant cut us a break . Dont you get that . What he did with that perception . That needs to be addressed by really good insurance. That needs to be addressed by saying that we as a society want to take care of women who have metastatic Breast Cancer, and we value to our Market Mechanisms this price. If you did and i wouldnt be selling it at that price speed and so youre saying its not your problem . No. If he could advance come if we could speed up the fda come if we could get drugs to market in less than 1 15 years, if we hada regulatory system that encouraged innovation, we could bring lots more drugs to market which would lower prices. What im saying is we advocate for ways of making our industry more productive. The more productive we are, the lower prices will be. Because there will be more competition from more products in the market and thats what drives pricing. Get back to, cut down on the followup lipid because were running short on time. You said effective patient life patent life, sorry, is close to 1 14 years but what are your thoughts on evergreening . The practice is unethical. Im not quite sure, and you want to define what that term means, evergreening . Lets assume, ill take the common expression of it. Its when you take a molecule that is once a day and you change it so that its now once a week. It has some value. Its a side wants to pay for it, they will pay you for. If they dont, they wont. Any marketbased system i dont condemn it or applau applied it. Its up to society to decide to do what it once a week treatment or once a week treatment. If youre injecting yourself everyday, thats an advance. If you are taking a pill once a week versus once a day, its pretty irrelevant and nobody should be paid a premium for that. Society does that. In the u. S. , in fact, you cant make money by evergreening. We dont. We have lyrica which is a product that we are bringing out once a day formulation, but we started the Research Like 12 years ago and there were delays and delays, and its come to the market too late. It wont protect our patent or protect our sales. In Todays Society evergreening is a failed strategy. Earlier this year during the hundred bill gates provided seed money that could lead to global epidemics. Such Vaccine Development is generally unprofitable for pharmaceutical companies. What should be done to encourage Drug Companies to embark on such research . Very simple. Get the incentives right. You want antibiotics is, there is a dearth of antibiotics. Its a product that you want people to invent and discover, but you dont want them to move sell because you want to keep the antibiotics in reserve. So you need to find a way of creating an incentive to develop the antibiotic thats not related to the economic return of the antibiotic. So pandemics, ebola, all of the diseases we could be subject to that come out of the Tropical Forest or come from outside of the United States. You need cures but you wont come you cant make money from those skewers. The way to do it i believe is a transferable exclusive voucher. If the fda said to the community, if you bring up a new antibiotic with these characteristics and we approve it, we will allow you to extend the patent on one of your existing products. Now, thats an incentive. That would create, that would fuel not only big companies, everybody would be looking at antibiotic development because they would be able to sell small companies, they would be able to sell their development to larger companies. The whole ecosystem would be invested in finding the antibiotics because theres an incentive that is fair to society and fair to the capital that goes into funding these research projects. We had Sylvia Mathews burwell here before she left her post. She feels health care is a right, not a luxury. Your view . Well, its a right to the extent that society is willing to fund it and pay for it. Clean water is a right to the extent that weve got sanitation, we pay for it, but we value it. I dont want to get too political or philosophical here, but there are very few rights in our constitution. Intellectual property is one of them. Before i get to the last couple of questions, a couple of calendar announcements. Upcoming luncheons include the aflcio chair Richard Trumka on april 4. Irs mission John Koskinen come just in time for tax day on april fifth. Joint chiefs of staff chair general john dunford will be here on april 21. And Misty Copeland will be on april 17 talking about her new book on april 17th. As a newsmaker and before i give you the last question, we have a tradition here here everybody from Nelson Mandela to benjamin thethat yahoo has received this mock. Same mug . [laughing] not the same. Its yours. Thank you very much. [applause] final question. If you became bazaar of health care in the u. S. And that a guarantee that all stakeholders would live up to what you would be doing behind you, what would your recommendation look like . Well, i think what i just described. I believe in choice and marketbased solutions. I think our health care has been hugely distorted by a lack of incentives being in the right place. I feel that we need to go back to physician, hospital provide a relationship with the patient. We need to provide incentives for the providers to look after their population and maintain health, and not be paid for how many more mris they can do and how many xrays they can do on a transactional basis. So give the incentives right. Pay the physicians to keep people healthy and nothing else will align very easily. Thank you, mr. Read. This concludes the National Press club luncheon. For more information please go to our website, www. Press. Org. We are adjourned. [applause] [inaudible conversations]ou. A look now at the Republicans Health care bill debate underway on the floor of the u. S. House today. An they are coming up on two hours now with a ballooning at about four pm eastern, and the bill could be on their resuscitating table. The news continues to be thatim the votes are not there. Earlier alleys and six republicans refused to supportui the vote for the role for debate. Debate. The latest is is House Speaker paul ryan is at the white house lighting President Trump know where things stand for the final passage vote this afternoon. The hill has this from the republican study committee. Chair mark walker says republicans have no plan b. If this bill fails, have no idea because would not discuss a plan b. Congresswoman talker told reporters after leaving the floor on friday today, i think authentic and genuine. Theres no backroom discussions as far as of this come if it doesnt work out this is been all in. The Trump Administration told members the president wants an up or down vote on the bill to date no matter what. If it fails he says he would move on to taxi from Emily Obamacare in place. We are hearing Vice President pence is at the Capitol Hill Club in the shadow of the capital, sensibly to meet with waving members to talk about the health care bill. That from fox news. We are likely to hear more about this during todays White House Briefing with spokesman sean spicer. As we go to a live picture here of the White House Briefing room this afternoon. That briefing set to start any moment. Well have a live for you when it gets underway. Right now a briefing with House Democratic leaders early this morning looking at the house agenda and the state of the Republicans Health care bill. Good morning, folks we just came from a democratic caucus. Im currently joe crawley, chair of the democratic caucus. When we have a very important discussion on the republicans trumpcare bill. This bill is bad policy