Familiar with the alliance, we are a Nonpartisan Organization that is dedicated to convening and educating the Health Policy community through a balanced exchange of evidence. We are so thankful to bill pierce for supporting the alliance and putting on this series and with that support we have had the privilege of hosting many esteemed guests and Panel Discussions over the past couple of years including Joseph Grogan who im honored to welcome back today. I believe you have the distinction of being our first repeat guest. He joined us about a year ago when he was an associate director at omb and so we look forward to hearing about your new role and Health Care Priorities as the director of the Domestic Policy Council. Thank you for being here again, mr. Grogan. Thank you to all of you for being here and with that i will turn it over to bill to get us started. Thank you, kathryn. Welcome everybody, welcome on behalf of apco where with along with the alliance we think these are important events to hold. The breakfast is an important thing to hold since we believe strongly a wellinformed press is extremely important to the washington, d. C. World and that a dialogue like this is extremely important. So we really appreciate, joe, you being willing to come in here and subject yourself to the questioning of this group of folks. So im senior director here at apco worldwide. Joe and i have known each other for quite some time, worked in the Bush Administration together and as kathryn noteds this is his second go round, the first time must have been okay, then, i guess. With he appreciate you coming here today. Joe has had a distinguished career in the private sector and Public Service and so we are welcomed welcoming you back again. The only admonition i would make is when we turn it over to question and answers that you state your name and what outlet you are for. Were live on cspan 2 so welcome cspan 2 viewers. So its mostly for their benefit, too, so they know who is asking the questions and where youre from, that would be greatly appreciated. So with that i would like to turn it over to he joe. Take it away. Thanks for having me back and its good to see some of you reporters again and for those of you who i dont know i like forward to the opportunity to be asked a few questions and share with you our views on health care in the trump administration, some of the function some of the way the Domestic Policy Council functions and tell you a little bit maybe about some of the other issues that we are confronting as well. So just to start with how the domestic policy functions and what it is that we do on a daily basis, other administrations perhaps have had a more linear or defined area of responsibility for senior white house officials. This administration, this president , has a very entrepreneurial style, consistent with the way hes lived his life and he expects his Senior Leaders to pursue issues in an entrepreneurial manner. It requires us all to work in a very horizontal collaborative fashion. A lot of times there are stories in the d. C. Media about how theres tension in this white house or tension among Senior Leaders. First of all, tension is not a bad thing, but to the extent that there are overblown factions or any of these things being reported on, it is wildly overblown. The Senior Leadership in this administration gets along extremely well. I spend a lot of time walking the halls visiting Senior Leaders offices, getting alignment on issues before we go into the oval office. We have robust and open discussions in front of the president. I can tell you this week we had a meeting with the president and we had, i think, 14 people in there to brief him on an issue for which he had to make a decision. We couldnt find a Senior Leader of the team who disagreed so we went and found somebody else who could take the counter side so that the president would get the benefit of understanding a different side of the view. Ultimately he made a decision. He works well when he watches people debate both sides of an issue and then he is able to make a decision. I love working in this white house, i think its a lot of fun. I like the Senior Leadership team. That doesnt mean we agree on everything, but thats fine. What i found is a team of people that respect each other and work well together and has the best interests of the president and the American People first and foremo foremost. Beyond that id say my philosophy at the Domestic Policy Council is there are certainly some issues of which we are lead. Health care is one and i think thats what were going to talk about for the most today. We are lead on other issues as well, labor issues, for instance, but where we arent lead we want to support. So we want to be as helpful as possible to advance a policy agenda, for instance, larry kudlow at the National Economic council would be lead for tax policy. If there is something that crosses over into the domestic policy lane, say, health care, for instance, big achievement of this administration in tax policy and Health Care Policy is the repeal of the individual mandate, we would help on that. We would help make the argument to the president , look, this is something that should be repealed, it makes no sense, its onerous, its at odds with our values. There are a whole host of other issues for which i may not be lead on the issue but i will go into the oval office with another principal and say, look, this is in my opinion what we should do, it comports with what the other principal wants to do or here is another take on it. So we lead when we when we have the baton and we support when somebody else does and its all to move the ball forward for the president and the American People. Now, one thing i think that people sometimes in this town struggle with because mr. Trump is so different than the traditional politician is to say, well, what type of approach is he taking on this . Hes very nonideological. He did not come in with 50 years of Campaign Donations from particular vested interests and a defined philosophy except for this, he likes to solve problems and he will ask a gazillion questions to figure out the right answer to something and hes not necessarily interested in somebodys opinion just because of their title or status, he wants to know from experts. I have watched him look over cabinet officials and ask a question of a 20yearold or a 30yearold staffer sitting on the couch in the oval office and ask their opinion about an issue because he wants to know a variety of opinions and he really wants to know the opinion of people who are expert on any given subject. He has told the story about being on the u. S. S. Jerry ford and asking the Maintenance Crew whether their preference was for the magnetic launches for the aircraft on the Aircraft Carrier or the old steam launches and they said steam and he said why, then said because when they break we can fix it. Then they went into a description of how long it takes to load a plane into position and why the steam made more sense and i can submit to you i cant think of a president in my lifetime that would go over and ask the guys to go the actual work each and every day what their opinion is. Now, that decision of the president to prefer steam im sure would anger a lot of defense contractors, it would anger a lot of procurement officers, it would anger a lot of project officers who were behind that, but this is a president who doesnt really care, doesnt really care about offending special interests or people based upon title. He wants to get to the right answer for the American People and hes willing to talk to anybody who has expertise in real world experience in it. So i know there is this other impression that people who havent been able to hack it in the Administration Come out and they wilt under the president s questioning. Well, tough, to be perfectly frank with you. The president asking tough questions of a lot of people and he puts people on the spot and a lot of people cant handle it. So thats the president s style, he wants to make sure that you understand what youre talking about and that you have the courage of your convictions and its an environment that i enjoy and a lot of other people enjoy. Some traditional d. C. Dwellers cant really handle it, but thats not this president s problem, thats their problem and when they go out and they whine about it to the media or give anonymous quotes after the fact, it should be taken with a grain of salt because theyve left for a reason. The president has administration said to tough. Not interested let industry continue to suffer under regulations but they are outdated and they have prevented a lot of contracting in the healthcare space or arrangements that would benefit patients and that is why. We have a great relationship with the department it is a lot back and forth my staff is on the phone with any number of departments and the secretary will call me up or swing by and say i have an idea. Do you want to help and then we move it forward. Its a great cabinet to do it. Wheel open for questions please state your name and where you work. My question involves the white house moving forward although the Senate Republicans are not in favor of that provision. We have always wanted a bipartisan solution to drug pricing. That even goes before the house was taken by the democrats but is just a recognition of reality that the speaker of the house you will need democrats to get something on the president s desk that he can sign and you need 60 votes in the senate to get something the president can sign. You dont have 60 votes in the senate see you have to get them there so we are very supportive of the grassley wide and compromise it is a product very good bipartisan collaborative approach to solving drug pricing. And we continue to work with their staff each and every day republicans and democrats to improve to make sure premiums are kept low as we find the incentive to drive drug prices down to give seniors a true catastrophic cap where they pay zero right now it is at 8000 we would lower that to 3000 roughly that is a huge win for seniors. Huge. As far as inflation caps are concerned it was not in the administrations proposal but it is the product of a bipartisan compromise. Nancy pelosis bill right now is unworkable and impractical and hyperpartisan it will not pass in its current form. The surest route to a bipartisan solution that is a real win for republicans and democrats and the president of the American People is grassley wide and and we are working very hard to get that done and moving. I have been talking to policies people since they took the house before she was speaker. I got calls from her staff when i was at omb at the time they called me and said do you want to work on drug pricing i said absolutely. We will work in a collaborative fashion. Theres only one red line do not take savings and power into the Affordable Care act for additional subsidies that will get a veto and then a general direct approach we dont want to punish market success but address market failures there are clear instances where copays are way too high. Drugs can command a premium price far beyond the original vision and spirit hatch waxman and that is what should be addressed not killing innovation or taking a product that somebody invented that is valuable to a lot of people and to dennis appropriate the value of it. We want to have new waves of innovation there is a huge push of new medicines coming on line and generic drugs that are on development right now to watch that be killed would be a tragedy. Theres plenty of ways to save money for people and taxpayers and patients in companies to have a more rational system without killing innovation. So with the transparency with the bio similars but a lot say it would help them so why not go with the Pilot Program on that . First i will not get into what the president decided but the transparency pattern will not be solved in one step or one fell swoop we make a major push on a number of different fronts. Frankly it it is impossible to believe more opacity or confusion or a lack of clarity will help patients to drive cost down. The problems of addressing drug pricing and why it is so hard because the programs are really complicated. Every time you want to make a change congress or regulators make things worse. That is why the grassley wide in proposal is so important because it would dramatically simplify the program. Transparency is revolutionary if we had true transparency in our Healthcare System. I find it be will during whenever i get a Health Care Bill i ignore the first 90 days because the first two are not true it says i owe 40000 that after three months now we only owe 280. That doesnt make sense the medical billing we are working on capitol hill is another element to get more transparency into the Healthcare System and reforming part d. The grassley wide in proposal has a provision to have list prices that is transparency. It should be first and foremost in everything we do in healthcare and from a policy matter. Taxpayers and citizens should understand these programs we should have more data out there generally speaking. Not Just Healthcare but anything. It is a broad ranging philosophical direction we dont think the government knows better than the private market actually the government knows less if we have data at the lets get it out there. Do you have any analysis of the transparency regulations quick. No. We wont have broadly speaking it could be huge if you look at the disparity of certain metropolitan areas some hospitals will pay ten times as much with no improvement of outcome for the same procedure and clinics versus hospitals, that type of differential or type of care. The key focus is it would be revolutionary with true transparency in healthcare pricing. And then to bring costs down. We dont have cost coming down as much as they should all the innovation we have gotten computing with the power that is in the system would cost how much ten or 20 or 30 years ago why dont we get the same reduction in prices of healthcare with improvements in quality cracks and then to be misaligned incentives. Lasix surgery is the one constantly referred to and it is a great example. Transparency is revolutionary it is not clear where it would end but it has to be better than the Current System there is no way without level of confusion it is beneficial for taxpayers or patients or physicians. I am with politico. Going to the National Pricing index. The interNational Pricing index i cannot get into detail these are difficult issues to be focused on to make sure that any policy that we rollout is solid to make sure the data is right and drug pricing is a difficult issue and we continue to make sure all healthcare policies that were not gonna do something we will regret. There was a lot of talk about that i am skeptical of the rebates and work on drug pricing reform with a great deal of skepticism with the rebates and with those specific proposals for legislative changes. We have spent more man hours on rebates and any other issue in healthcare to be honest the amount of resources the contractors and advisers and cms, hhs, trying to figure out what would happen under various scenarios. To be clear the way the rebates are structured and this should be confronted and what we have inherited so with that solution of the rebate problem i am all ears i would much rather focus on the part d benefit then go at the direct enumeration issue. And what we are supportive of and working with members and to have good feedback and that transparency would help. And the restructuring of the liability and to get a lot of these rebates to inject competition and aggressive negotiation in the private sector. Just to restructure that benefit without calling it rebate before will be reform. How are you planning to address that barrier with canada cracks how do you plan to address that . With the proposal the president has been focused on this issue and with international prices. And then they find it bewildering and those that cross the border to buy drugs in canada because its cheaper than it would be outofpocket in the united states. And governors have asked for the ability to import drugs. Secretary a czar has made it clear his concerns can be alleviated with the modernization of supply chain tools to allow for importation through a mechanism like this to make sure there is no adulteration. We are not talking about importing drugs from thailand through canada but safe effective drugs to be imported if the state wants to do that so we are working very closely with states like colorado in florida and others exactly how they could be achieved but it is feasible and we could do it and we will see if it is disruptive to the market forcing companies to contract around it then so be it and the president wants us to address it so we will so it goes back the president says this is too hard or difficult that he is a disruptor makes those vested Interest Groups uncomfortable but thats the way it is and it is refreshing to be honest. It is on our radar screen but i dont want to get into deliberations and private discussions right now but it is an issue. I dont want to rule anything out. The administrator has said on multiple occasions the Healthcare Industry goes between a democratic direction for singlepayer. So if they really wanted a push on that they would require with the commercial health plans. Is that what you are looking for a quick. We are looking at more aggressive this is why we have kickback in a number of different context. Is a deli