Her Covert Affairs team have no influence or insight into the resourcing over all. I cant comment that we can get back to you. Thank you for your comments, congressman. So thats exactly why we are here. I speak for a section of the pharmaceutical industry that few people actually appreciate, especially given the statistics that i referenced that two out of every three new drugs approved by the fda last year actually originated in companies that are small biopharmaceutical emerging companies. We dont have a voice in washington. Excelixis is not a member of pharma. Where a number of bio. We dont hear the realities, the pains and challenges that are faced to bring an important new drug to market, represent and the debates because i think a lot of people take for granted that its all great Big Companies with huge budgets and throwing a lot of money at problems. You may be an example of someone who is at a competitive disadvantage because you dont have the same resources to deploy into those activities that i was talking about. Ms. Bricker . I dont believe it results in a competitive advantage. The recent here today is to help be part of the solution and educate lawmakers like a self on ideas with in the supply chain to bring down costs. Any amount of time that a spin here is really with the idea of helping to educate and Bring Solutions forward. I appreciate that. I wasnt as focus on the time spent as the money spent in terms of how that influences things. Im out of time so i yield back. Thank you all very much. The gentleman yields back. Thank you, mr. Hessekiel, for what you said. Your company is, that model is replicated throughout my Congressional District in silicon valley, so i certainly understand it and i think its one of the reasons we want you here today, so that the small bio people without a voice in the hearing and in policymaking. I now would like to recognize the gentleman from indiana, and this time you really will be recognized. Mr. Bucshon. I appreciate that. First of all of what you start i would agree with ms. Castor that the bills we passed in a bipartisan way in our committee recently should pass the house and pass the senate and be signed by the president. However, at this time it appears that those bills will not be brought to the floor, standalone and so the opportunity for that to happen is owing to be minimized especially in the city and i would encourage them maggiore to reconsider that decision and bring my person does double address the problem to the floor, standalone so we can supportive of those. A question i have for mr. Mccarthy and mr. Niksefat is, does direct to consumer marketing increase the demand for a drug . Im not sure if it increases the demand for the drug, but we do believe that advertising does create awareness of diseases and available treatments. We agree with mr. Mccarthy, it increases awareness and availability of treatment. As a physician, you probably know my position, i dont like direct to consumer marketing because it confuses patients and makes them ask physicians for primarily new, very high price of drugs. And then if you dont provide those pages go to somebody else who does. With that question, if that is true, it brings an awareness and will increase demand, would you think that would increase the price . Doesnt have any affect on that . If you have a product that has no demand there is no demand. Its a supply and demand question. I dont believe direct to Consumer Advertising has impact on the patient. Its not part of our pricing decision. There enough. We do not consider direct to Consumer Advertising when setting the price for product. Im not saying its directly. I sang as part of an increased demand, thats what my question is. Do pbms ask you to increase list prices . Do you get calls and letters and stuff from pbm saying you need to increase the list price because our margin is and where it should be . Im not aware of any such request. The committee could ask for any medications between your company spent deviance and see if thats the case. Im not going to ask for that today, what i mean, ive been told that by Companies Like yours that, that one of the factors pbms put almost any pressure on the list price. Pbms will disagree with that i understand that. Im not aware of any of those instances. Okay. Is there formulary pressured increase your list price . Because thats another avenue. Its not just the rebate its pressured to say sorry, but were not going to have your drug on the formula if you dont do this or that. That are certainly Competitive Pressures to raise rebates or discounts, if the chairman burr like me to use the term. Discounts, okay. Like i made that in my testimony we feel like we have to compete both on lowest net pricing and greatest or discuss. Ms. Bricker, you want to respond to that . Keep your perspective on that situation. We have called publicly and in private conversations ever be manufacture for them to take action to lower this price. We stand by that hooted as well. And agree that i think theyre making my point, that formula decisions are based on net cost which is a list less in rebate that is offered. There enough. Im interested, mr. Eberle, if you like, again theres a discreet about whether rebates increased pressure on list price. And if we eliminate rebates like hhs is proposing or members of congress are proposing in some cases, that will need to companies increasing, it will be an uncontrolled increase. Do you have a different model, gsib happening do you see that when your model that that results in increased list . I do think that come with our pass them along with the traditional model. Rebates are otoole to a lower cost. If that too is taken away from us it does take away a very significant lever we have to work for a bit of our your model doesnt rely on rebates, right . We dont generate any revenue but spee thats what im talking about. So from a navitus perspective, change and rebates would not change a bottom line. It would drive up the cost for our plants and their members. Based on what . Base on the rebates go with what is the control to pressure manufacturers to compare prices. You still have your formulary part, right . We do. I think were arguing is there may be another we either rebate or discount to do that. That would be great but there has to be some mechanism to encourage the manufacturers to participate in lowering their prices. I would disagree with that but i appreciate your perspective. Thank you. I yield back. The gentleman yields back. I now would like to recognize the gentleman from new mexico, mr. Lujan, for his five minutes of question. Thank you, madam chair, and i think everyone i think i going to agree to be reposted and i would ask to make as process possible. I want to talk but the concept of valuebased arrangements. Mr. Mccarthy in your testimony you define what vba would look like if you say quote if our medicines did not produce all the results we expect we would be paid less. If they produce, those results we would be paid more. If done correctly these arrangements focus on the appropriate their pubic areas can align the interests of patients, health plans and Biopharmaceutical Companies who are on one shared goal, ensuring positive Health Outcomes for the patient. What is the difference between a valuebased payment at an outcome based payment . Well, i think they are very similar sake to an example of a couple different of the types. Very similar answer the question. We can jump into a bit later. Which one of these is described in your example, health outcomebased data or valuebased payment . Well, its hard to distinguish them an under tell u why. If you improve the outcomes its delivering greater valley. I think its just a different way of saying the same thing. So does your statement include both . Yes. Mr. Niksefat come in your testimony you state engine is a leader in valuebased partnerships with over 120 of these agreements probably you are also the arbitrator for these negotiations. In those 120 agreements how much money have you say patience . So the 120 members worldwide come within the u. S. I know i know of over 35, and those discounts can provide again in certain cases like rebate, when it refund. Can you give me a dollar amount of how much money i dont have a dollar amount on the. Can you get back to me . I can get back to you. We get an answer of how much money the 3 35 agreements you he in the United States have say patience . We can look into that. Many of them are buried and have not yet paid out because over the term of the contract has not been completed yet. Theres a dollar amount of money you saved or youre not saved to ask is you get that back to us. What data are you tracking for patients savings . We track the total discount we would pay under these outcomebased arrangements for patient savings. Ms. Bricker come in your testimony you state you would head of all valuebased contracts at express scripts. Annual as pbm what is a baselie against which are measuring savings and i was this data to develop . We compare those that are participating in the valuebased programs versus those that are not. We cover over ten disease states, many of them dies cost for specialty classes and working with manufacturers to put their value as mention if a product is a working for it when that meeting certain metrics, and refunds go back to the payer. Ive heard a lot about list price and this is complicated it i get that. Im to make sense of it. Especially in what i can understand so i can explain it to my mom and to my constituents. The list price sounds like the highest price, is that correct . Would the list price translate to the highest price, mr. Mccarthy . Generally yes. Mr. Niksefat . Its the highest price by which we so medication. So if the conversation day is about how we get to the lowest price, why dont you just start with the lowest price . You start with the highest price and then you negotiate all these wonderful benefits for the American People and you say were going to give you a rebate, or as a checkpoint, were going to get a discount here but its based on some price thats the highest price. So it would document setting up a system thats ultimately going to get the lowest price, lets start with that. Because wrong, you have one highest price, the list price, greg . Thats correct. Mr. Niksefat . Thats correct. Mr. Eberle, et cetera experience that theres one list price . Yes. Correct. Are there any many lowest prices . Depending on each agreement to establish an lowest price for each one of those contracts . Theres a net price. Is a fair to say different agreements have different lowest prices . Different agreements have different net prices that are generally lower than the list price if theres a rebate involved. Is that true with you . Yes. There are many different lower prices. The question i have is for ms. Bricker as my time runs out, how do we know that patients, customers are getting the full rebate . And are you willing to disclose whatever is negotiated with the pharmaceutical companies, and are they willing to disclose publicly whats been negotiating with partners you are entering with publicly . Yes. So the people that hire us, our clients, have full visibility into the discounts we negotiate, yes. Mr. Macarthur, mr. Niksefat, are you willing to disclose publicly what those negotiated rates are . We believe all these discounts should be available to the patient at the pharmacy counter which was shed light on to the prices in the marketplace. Are you willing to disclose and publicly . That would represent a speedy are you willing to disclose and publicly . You can voluntarily do that today. Are you willing to disclose that price publicly . We are not willing to do today of us that price makes a way to the patient. Mr. Mccarthy . We have i would disclose the total amount of rebates we pay. Appreciate that. Thanks for the time. The gentleman yield back. Now i have the pleasure of recognizing the gentlewoman from indiana, ms. Brooks. Thank you, madam chairwoman. Im going to continue on my colic from across the aisle questions about the pricing, specifically, and what to focus on the lowest net cost. So while he focus on the list price, ms. Bricker and mr. Eberle, can you tell us how you determine lowest net cost . We take the list price last in a discount thats by the manufacturer. Mr. Eberle . Very similar. It does ver vary by brand and generic generics, there are not rebates and units were looking at what the pricing of the generic is available in the marketplace so we do surveys to determine what pharmacies are buying that drug for. We look at that on the brand drug that rebated com, its thet price minus any rebates, discounts we received for manufacturers and pharmacies. That combined, that sets the net cost. We look at things in terms of clinical value, how does the cost and value compare. We heard earlier testimony about administrative fees. I believe pharmaceutical companies talk about administrative fees. Do you include administrative fees, ms. Bricker and mr. Eberle . Yes. All discounts that are provided by the manufacturer are in consideration. So im getting a little bit confused about discounts and administrative fees. So its, the manufacture at been fees are also discounts. How are administrative fees discount . They are providing that as additional value towards the list price pixel reduction of list price. So let me ask the pharmaceutical companies. How do you you agree with that statement . Yes. The administrative fees are something that you just include in your discount . We tend to talk about yes come in the same general category of rebates for discounts. And everyone agrees with this. This. Just trying to make sure we are all talking about the same thing. We described them as administrative fee discounts. Okay. I would like to is important to draw a distinction between discounts and fees for services at fair market value. Thats what im struggling with. So thank you for acknowledging that. So a discount in normal vernacular is taking an amount off of whatever the actual price is, and that the is something additional that you pay for the work being done or for the administrative work. What makes up administrative fees then . Mr. Macarthur, what is n administrative fee, how is that defined . It goes to the pbm for administering the services are managing formulary for our medicine. I believe ms. Bricker meetin med at an example some of the programs adverse event affordability of copay costs them to spend in those programs, for example, there would be a a fee arrangement involved to participate in those additional programs so that would be one example. We view them as, from the perspective of, that they are included in the request for proposals that we receive from the supply chain. And again we treat them as just administrative fee discounts, because we dont believe they represent services to the manufacturer. Anything further . Nothing further. And so are there differences then and other various pbms to find most net cost . In the days pbms you deal with, other differences in how they define lowest net cost . Is it always negotiated, mr. Mccarthy . Every negotiation is different with every p. M. Customer, yes. And there are different factors that go into that negotiation . Generally speaking, the main point of our negotiation with the pbms it to do one thing, to secure access for our medicine. So in that respect that is the common denominator that permeates through every negotiation we have with all of our pbms. And how about the differences between, the types the things your negotiating . Can you discuss items your negotiating in try to get to the lowest net cost . Were discussing for the replacement, costsharing tear, the route by which a patient will get access to step 30 and prior authorization. Its a multitude of different items across the entire supply chain, not just with pms. I yield back. She yells back. The gentleman from oregon, mr. Schrader, is recognized for five minutes for his question. Thank you, madam chair. Appreciate it. Mr. Eberle, im interested in the transparency of this drug supply chain. Appreciate anyone stepping up and being here today. Particularly the pbms because they are the intermediate that negotiates with the pharmacies and the pharmaceutical companies. One proposal thats been put out to address the issue is the class of drug. Do you think would help at all . Im not familiar with the details but, yes, i believe that concept would have value. Mr. Mccarthy, talking about and little cold here out of pocket cost and caps and the catastrophic pickup, pickup 80 , ensures 15 and individual five and no cap on the outofpocket cost of the do you have a proposal or how do you think that should be shared as we get into that catastrophic phase . I believe the best way to approach it would be to think about collapsing the benefit design in part d so that we would eliminate the coverage gap where currently the manufacturers pay 70 , and moving into the catastrophic to help fund the gap. We would go right from coverage limit the catastrophic where there would be cap on patient outofpocket cost and then the financial burden in that phase would be shared between the manufacturers, the plans and the government. Mr. Niksefat . We would welcome the opportunity to work with the committee on modernizing the part d benefit by dont have any specific proposals are bound that destruction with me today. Would your company be wanted to be part of the solution to help pay absolute. We look forward to be part of the solution. Very good. Valuebased agreements. The biggest cost concern ic facing United States of america patient as well as the federal government is the great you guys are all bring to market at this point in time and there lifesaving opportunity for many folks that had no hope before. But they affected very small population and as result recouping the investment becomes difficult without high prices. Theres been discussion, youve offered up being part of the solution having valuebased agreements. So to that and its difficult to write those agreements. The question would be, maybe three different questions. How would you mitigate the risk in this day and age when a patient is likely to move from one carrier to another . Is to mccarthy and mr. Niksefat. That i think is a really excellent question. I dont have a solution for how we manage the liability as patients go from plan to plan. Thats a really i think thats going to be a difficult question for us, especially as we moved to even more advanced technologies like gene therapies where therapies could be charitable of a lifetime. How do we track is patient and how does that liability for those patients, i will have an answer to that but i would very much like to work with this command on a solution to it. Great. Mr. Niksefat . Similar when patients move from plant to plant them although it does happen fairly infrequently in the commercial marketplace, its very hard to follow the patient across the spectrum and ensure the valuebase