Committee chair chuck grassley, former fda commissioner Scott Gottlieb and others. [ applause ] hi, everyone. Thank you for coming. And thanks to pfizer for sponsoring the event. Just to reiterate, if youre into hash tags, go ahead and use axios 360 and we can have fun on the social networks together. And if youre also inclined, go to signup. Axios. Com to get our news letters, especially vitals, written by my colleague, Caitlyn Owens. We try to keep things short and light. And real quick, logistic, if youve never been to one of our events before, we try to keep things short and sweet. Four segments of interviews. We want you leaving here feeling smarter about what we talked about. And this in particular is about drug pricing in america, which obviously will continue to be an issue going into 2020. So with that in mind, id like to welcome our first guest, senator chuck grassley. [ applause ] good to be with you, bob. Thanks for coming. All right. I think its only its a good place to start by talking about your constituents. What are they still telling you about their own drug prices and their drug costs . What are you hearing from them . Im hearing that theres some prices that are ridiculous. But most often hear about how drug prices are contributing to the high cost of health care insurance, and i think they see that theres too much secrecy in health care pricing. Not enough information about pricing. And and i think that they feel that congress can do something about it. And what i read that democrats want to do isnt a whole lot different than what republicans want to do. I have a good working relationship with senator wyden, ranking democrat on the committee i chair, the finance committee. And i have had conversations with house members. And i believe we have a real opportunity this time with senator wyden and i working together. And what ive heard from the house wants to do, that we can put together a bicameral, Bipartisan Legislation to drive down drug prices. In addition to what i do on the finance committee, weve had both leaders of the help committee, which has helped in their h in the word help, they have some jurisdiction over it. And we have been communicating very close together. Hopefully getting products out of both senator alexanders committee, working very closely with patty murray, the democrat Ranking Member there. And to put together a package from the two committees that can be brought up yet this year in the United States senate floor. So why havent some of one of the issues that has been around for a while, one of the pieces of legislation creates basically the law where it tries to prevent brand name manufacturers from stop giving their samples. Yeah. It seems like lowhanging fruit. It seems like something its you know, why does it still exist . If Something Like that still hasnt been able to pass, why should we be optimistic a bigger package could be passed . Well i guess well, obviously, it came out of committee that i chaired last time on a vote of 165, i believe. Its already out of the Commerce Energy committee in the house of representatives. Very much a bill similar to what we get through the United States senate. And i would expect that that has enough going for it. Weve even had pharmaceutical companies before our committee for hearing, and some of them said they would support it. I dont think they said that a year ago. But i think they feel the heat now to support it. Another one that comes out of the Judiciary Committee thats got a lot of movement on it in the house of representatives is this pay for delay scheme. Where a Pharmaceutical Company will the brand name runs out, the patent runs out. Then they make a deal with the generic company. If you keep your generic off the market, we will pay you x number of dollars for x number of years to do it so youre basically keeping up the brand patent price for a longer period of time. So we have several things that we want to accomplish. One would be to get some of these schemes that keep generics off the market, to get generics on the market faster. Another one would be to have Greater Transparency and pricing. With transparency and pricing, you ought to get more accountability. The marketplace ought to work. The consumer with more knowledge ought to be able to make a better choice. And those are the things that are a combination. Now, if you say why legislation cant be passed, whether its lowhanging fruit like creates, im not just sure thats as lowhanging as some of this other stuff were dealing with. The schemes of pbms, for instance. You have a list price up here. What goes into the list price . Shouldnt the public know what goes into the list price . Then you have the rebates. I think last year 170 billion of rebates. Well, where do the rebates go . Do they benefit the consumer . The Insurance Company . Or do they benefit the pbms . And we ought to know that, shouldnt we . And the president way last june made a speech on Prescription Drug pricing. Hes going to get the prices down. So already we have some regulations out by secretary azar to make sure that the rebate goes to the consumer. Now, hes got the authority to do that for medicare, but doesnt have the authority to do it throughout the Pricing System, and it seems to me thats our job, to make it more encompassing. So some of the things you talked about, like the pay for delay and creates, theres a very smart law professor and Health Policy observer, rachel saks at Washington University in st. Louis, and when those things were first floated in january, one of those things where, okay, its great, but she said do not mistake them for serious reforms to the underlying drivers of the drug pricing problem. Again, it goes through those things might be helpful. But how do you actually get at the items where it will bring drug spending down . Those might address some of the schemes that involve some funny business on the side. But will they really address what we as a nation spend on drugs . Its it seems like theres some healthy skepticism. Let me give an example. Infusion drugs is an example. And some of them now are very, very expensive. And they probably work. But when theres an incentive because the people that deliver the drug to the consumer, the health care professionals, if its 6 of a 100,000 drug versus 6 of a 1 million drug, you can understand theres a perverse incentive to use the milliondollar drug if maybe the 100,000 drug would do the job. So you take away those perverse incentives as one way of doing it. Now in another area, though, i want to say to you that with medicaid, its kind of the opposite. We ought to be looking towards in the case of medicaid, mostly for people that are lowincome, and theres a lot of lifesaving things through gene therapy and other lifesaving drugs that are very, very expensive. So we need to set up a Medicaid Program so people on medicaid can take advantage of that, and maybe it would be as simple as spreading out the paying for it over a long period of time instead of 1 million today, instead of maybe spread out over five years, as an example. But we need to make that drug or those drugs available for people that are lowincome. Now, you mentioned rebates. And rebates are its the dollars between that come out when the drug manufacturer and pharmacy benefit manager gain formulary access on a higher preferred list. And you alluded to a rule thats pending out there, this drug rebate rule from the trump administration, hasnt been solidified yet. At the you had a hearing earlier this year with the seven pharmaceutical ceos and executives. And i remember you asked them, your last question, will you lower your drug prices if this thing comes to fruition. And a lot of them said oh, yeah, sure. Some of them hedged quite a bit like oh, yeah, but only if it it also occurs in commercial. Do you believe them . No. [ laughter ] so let me lets lets go back. At this point, theres kind of fingerpointing. You know, the pbms blame the pharmaceutical companies. A month before we had the pharmaceutical companies for a hearing and they blamed the pbms. So youve got to stop the fingerpointing and thats why take the secrecy out of all of this pricing. And make sure that we know exactly how the process works. If you really want to see how complicated the pbm role is in all of this between making of the drug and research on the drug and getting it to the consumer, last week, i believe, wall street journal had something online that showed how complicated this process is. People ought to take a look at that. You cant understand it, and we ought to be able to understand it. And for instance, the federal government is one of the biggest maybe the biggest purchaser of drugs in the entire country. And were spending a lot of taxpayers money, and we ought to be responsible for spending, and you ought to know what gets into the price. I do want to get into another issue. You alluded to it earlier. Just the federal government being a large purchaser. One of the big programs is medicaid part d. Yes. What substantial changes could be made to part d, other than the rebate rule, that would actually because i think a lot of people would agree, part d has a lot of wild incentives and weird setups within how the benefits are designed. Yeah. What substantial reforms could be made there and actually put into law . Because a lot of people are miffed about this. Save the consumers money and the taxpayers money. Right now there is a big push to get through the doughnut hole and get the catastrophic coverage. Thats where the taxpayers comp in. Taxpayers cover 80 of catastrophic. The federal government pays for large portion. Yeah. And the more you get in, the higher price the drugs is, the more the taxpayers are going to be paying. And theres an incentive for the Insurance Companies and for the pharmaceutical companies to get people into into catastrophic very soon. And so get them through the donor hole. So we want to take away that incentive by having the Insurance Companies and the pharmaceuticals pay a greater part of the cost, put a cap on what outofpocket expenses would be and save the taxpayers money in the process. So just but the whole idea is to do away with the incentive to quickly getting people into the catastrophic. Just to be clear, youre basically talking about introducing pharmaceutical manufacturers having to pay some of that percentage in the catastrophic currently the pharmaceutical Companies Pay nothing. And youre suggesting, hey, how about we propose something where they pay a percentage now. Yeah. Im sure theyre going to be well, of course. But then its just the opposite today. Theyre incentivized to getting people quickly into the into catastrophic by the more expensive drugs as an example. Okay. We will have to leave it there. I appreciate you coming on, senator chuck grass leavley. Thank you. [ applause ] thank you, chuck. Appreciate it. Now stay tuned for a video from our sponsor, pfizer. Tuned. We are back i would like to welcome our next all right. Were back. And i would like to welcome our next guest, senator debby stabenow. [ applause ] good to be with you. Hi good to see you. Thanks for coming. Absolutely. All right. So i yes, i see a lot of heads, but its awfully dark out there. I started this out with senator grassley with this question. Ill do the same for you. Drug prices, im sure youre hearing all of the time from your constituents. What are they saying, and if you can name names about drugs that theyre especially angered about, feel free to name those names. Well and let me first start by saying that senator grassley, who is a good friend of mine, deserves a lot of credit for holding hearings. Hes very sincere about wanting to address this issue. And it is the first time weve had the drug company ceos or pbms in before the finance committee i think since ive been on the committee, 2007. So i appreciate that very much. The fastestgrowing part of Health Care Costs that i hear about from from individuals, from people, from hospitals, from doctors, is the cost of Prescription Drugs. Bar none. And name the drug, and i can probably tell you somebody has talked to me about it. Certainly weve seen the cost of insulin, you know, triple in the last 15 years. Weve seen theres so many examples of this. By the way, insulin was first created in 1921 by two canadian doctors who and the first patient was treated in 1922. I think its off patent. Im not sure at this point. And they believe because it was something so important to people that they should not be paid for it. So they sold their patent to the university of toronto for three canadian dollars. Since that time, we have seen the tripling in the last 15 years, folks paying as much as 50,000 a year for something that two canadian doctors thought they shouldnt be reimbursed for. And ill just mention one other example. And that is we now have an Opioid Epidemic. In 2005, the generic version of nalaxone was sold for 1 a vial. 1. Then we have an epidemic. Now we see costs as high as 4,000 a vial. And the public sector, as taxpayers, we are paying for law enforcement, hospitals and so on to pay for 150, basically, for a twopack or 75 for something that costs 1. Why . Because they can at this point. Thats why. Theres an epidemic, its needed more and costs go up. So count me in the category of being pretty upset about the Pricing System in our country, and the fact that this is medicine, this is lifesaving, this is focus trying to on a daily basis be able to take care of themselves and their families. And this system is not okay. Senator grassley right before he left mentioned an out of pocket cap, even for Something Like medicare. Some commercial drug plans do that. Would you want to see Something Like that for the federal programs, where seniors and lowincome folks dont have to pay more than x dollars a month for their drugs . Because that seems like something that has garnered interest. Its going to cost something. There would be an offset. Right. But whats your perspective on an out of pocket cap . It depends. Ive supported inflationary caps on part b, and we can look at a cap at part d. Its a question of does it raise premiums, costs, who is paying. It depends on how its designed. But i think we should back up. Because instead of this complicated system, everybody agrees with that. And i agree with senator grassley, transparency is critical. It is complicated. Everybody points like this. But theres a simple way to do this. Medicare part d should be negotiating best price, period. Take out all of this other stuff. The v. A. Pays 40 less. 40 less for the same medicines. And there is no reason, other than benefitting the pharmaceutical industry, that we are not using the purchasing power of medicare. That is the number one way and anything we do short of that is not truly addressing this. And i would mention one other thing, and that is on naloxone that i mentioned a moment ago, this president s own commission on the Opioid Epidemic recommended that given the epidemic that the government should negotiate lowest price on naloxone, or narcan, as we call it, which hasnt happened yet. And ive been calling on that since it was recommended. It was a good recommendation. But why in the world we wouldnt use the negotiating power we deal with rebates and this and that and its a great little system here. But the bottom line is when you get done, we have the highest prices in the world. So the folks arent negotiating very well. So you mentioned medicare price negotiation. That is its not an option right now. And i know youve introduced legislation to try and get that done. But it is it seems like such anathema to certain legislators to even consider it. So how how do you persuade people that medicare negotiation is a good idea . We do and if we think about it, we do price set for certain things already. We do it for hospital services, doctor services, why not for drugs . We do it for everything. How do you convince people that its something thats a worthy idea and something that could get across to the president s desk . Citizens have got to rise up. Aarp has said this is their number one priority. People who pay, businesses, hospitals, doctors, families, seniors have to stand up and be louder than the pharmaceutical lobby, which is the largest lobby here. Its the largest lobby in washington, d. C. How visible are they . Oh, my goodness. I mean, i counted up especially now. 15 lobbyists per senator. So you personally tallied 15 we those that were registered. Now, it goes up during part d. That number went up when we were writing the part d bill. But its about 15 per senator. And so citizens have and i think citizens are getting to that point, because this im not exaggerating. This is life or death for people. And in the greatest country in the world where we as taxpayers pay the bulk of the research, basic research, which i support. I think its not fair to say to a business, you take all the risk on basic research when you have no idea if there will be an outcome for that. So i think we should be doing that. But i think it was between Something Like between 2008, 2016. We as taxpayers paid about 200 billion to develop drugs. During that time, there were 210 drugs developed, and taxpayers helped pay for developing all of that. The Companies Take it, go to commercialization. Thats fine. They can write the research off their taxes. We subsidize again. They get to the end. At minimum, they have a sevenyear patent. In some cases now, we have so many patents like hum hue mirra so many patents. At the end, i think american taxpayers need to be able to buy their medicine. We deserve that. And we pay more than we pay the highest prices in the world. And when i asked the Drug Companies, do they make a profit in every other country, they said yes. They just make more here. Why . Because they can. And on top of that, every other country benefits from the research, american taxpayers are paying for, which im i support the research. But we at the end of it should be able to afford the medicine for ourselves and our families. Thats all. So at