hospital. i run the program on regulation, therapeutics and law there which is an interdisciplinary research program that focuses on intersections pharmaceuticals and laws and regulation and clinical outcomes where they are the largest independent academic group on the country focusing on these matters. is my pleasure to be here and i want to thank american university for putting together such a great program and the american society of law and method and ethics and other sponsors of this conference has been a pretested conversation. so, we spent a lot of time talking about the future of healthcare policymaking in our lunch session will be focused on one particular area which is the pharmaceutical marketplace. pharmaceutical prescription drugs are some of the most effective and most cost-effective interventions that we have in medicine. industry plays an important role in bringing these products forward but in recent years drug prices have continued to rise which has made some of these

breakthroughs unaffordable for patients and leading directly to bad clinical consequences when patients are unable to afford their medication, as well as driving healthcare spending with spending on pharmaceuticals assessments at about 20% of your spending overall. we are extremely fortunate during this lunchtime to have one of the key players in helping help establish this pharmaceutical marketplace and representative henry who has served as a member of the us house of representatives for 40 years, overseeing a number of important pieces of legislation, not only the [inaudible] act but also the orphan drug act, prescription drug [inaudible] and other pieces of legislation that helped establish the

environment say. representative serves as chairman and the public communications firm and a lecturer at the johns hopkins bloomberg school of health. we are hoping he can talk with us today about his reputation as one of the most accomplished legislators and one the most drivers in the important pieces of legislation as they relate to the pharmaceutical market. let me introduce henry and bring him up and he will give comments and then we will get down to some discussion. hopefully, at the end he will have time for audience q&a as well. start thinking now about your questions. thank you very much. [applause] >> i am delighted to be with you all today. i have looked over the schedule for the conference and it looks like a plastic conference.

i know c-span is filming this and perhaps i can get a copy of c-span's record of what has been said in the last day and a half. i think a you for hosting this conference and i think aaron for inviting me to join you today to talk about prescription drugs. i was in the house of representatives for 40 years and in the 1980s, we were focusing on the pharmaceutical issues of the time in the pharmaceutical issues that we were looking at was that we needed more of an incentive for development of new drugs. we needed new incentives for drugs to be manufactured for the broad population and we also needed to address the problems of people with rare diseases. in 1983, we passed the law

called the orphan drug act. these are called orphan drugs because the number of people that were affected by a disease were very small in number and it wasn't in the interests of the manufacturers to even produce a drug that was known about, let alone develop new drugs for people with these rare diseases. we tackled that problem particularly to view of giving an incentive for developing drugs for rare diseases that did not look like they would be profitable because so few people would be using those drugs and we adopted the orphan drug act. this gave incentives through the tax system and incentives as well to an exclusivity period of seven years. the next year we looked at the problem of incentive for development of new drugs and the

pharmaceutical industry complained that they had lost time while there drug applications were being reviewed by the fda and they had only, within the last decade before, had to come up with, not just for safety, but proof of efficacy, which required many trials to accomplish that goal. of course, the drug cannot be marketed until the approval was accomplished and finalized. they said they ought to have more time restored to their patents for the time lost at the fda. on the other hand, generic drugs were very small in number because generic manufacturers who were making the same drug as the brand-name drug had to go

through all the test to show it was the same drug in terms of effectiveness and safety. they had to go through the whole a nda procedure so we adopted a balancing to help these generic drugs by saying they could have an abbreviated new drug applications and all they had to show that they were exactly the same drug that had been on the market and that had already been established safe and effective for approval. we thought we got a balance. incentives for the development of new drugs and competition to lower the price of drugs on the market for the consumers. well, that balance is completely out of whack. that balance has been affected

dramatically by a lot of changes since the 1980s, insurance now pay for pharmaceuticals and there have been a breakthrough pharmaceuticals and we are grateful for that but the drugs are exceedingly high priced when they are first being rolled out and there is no competition permitted or sometimes when they are being rolled out and they have been on the market for a while the prices go up and there is no reason to explain the prices going up except for the fact that the manufacturer has either a patent and or exclusivity which means no competition. we have seen that drug prices are rising faster than wages in the last several years. drug costs are ever increasing

problem to people to pay for their drugs even if they are only making their co-pays and they have insurance. by the way, since the 1980s we had insurance coverage for drugs which has i think helped increase the prices for these drugs and as we look at these ever increasingly frustrating problems the first thing i want to point out is that there is no silver bullet to the issue of the drug pricing and there are a lot of people who seem to claim there is a silver bullet and all we have to do is negotiate prices and if you negotiate prices with a patent holder has a monopoly you negotiations will not go very far because you can't substitute an alternative drug. there are other problems in the negotiation but negotiation prices for drugs is no magic solution. ...

>> >> christi was also working with health reform at hhs and a soviet who had worked

at hhs as well so is there something we could do to approach this issue in the incremental way that would lead to the bipartisan support for legislation that is required to get legislation passed. by the way men and these were ever passed on a policy basis. most of the bills i was associated with in congress was not passed on a partisan basis whether the expansion of medicaid or the drug back toward dealing with medicare or any of the other laws. they were bipartisan the truth of the matter is we do

better when bills are bipartisan. i felt well informed when i introduced a bill that when you hear those comments that critique you learn more about your legislation to make a much better product. wish some of those laws we're having difficulty dealing with right now especially the affordable care act were bipartisan. that is the only lot i ever had a role to draft that was only partisan but that was based on a political decision that republicans did not want to participate or be a part of it so they were against the stimulus bill and the regulation of wall street trying to do something about climate change. they did not want to deal with the affordable care act even though the affordable

care act was based on many of the principles of the republicans who support it especially with those alternatives that they try to do during the administration to address the problem of pharmaceutical pricing. so even in a divided congress for progress to be made we have to start a discussion not a bunch of solutions. look at the drivers to see what members are willing to take on. you can start to make some progress by addressing these issues. so we looked at the following kinds of drivers in hot health care, high in annual increases, what can be done about it? or the

approaches? source some manufacturers create or take the advantage of natural monopolies that significantly increase prices we saw this that eliminate any opportunity for competition because they have the patent for a exclusivity with nobody competing against them. sometimes it was a natural monopoly or sometimes it was contrived. but the lack of robust competition among manufacturers that result in less competition and higher prices. there is a real problem from the fact when the by a similar is as part of the affordable care act we gave

this long exclusivity period i think it was 12 years. that was so long in comparison that makes it difficult to provide competition. but there is some possibility of competition that we need to take action to establish that pathway for those bio similar is and genetics to be approved but it is difficult to analyze because it does not make pricing information available to the patients, other providers or payers that point of care where the decisions are being made and a lack of information about comparative effectiveness which at this very important

time. federal law limits what the states can do under their authority such as medicaid to implement other price related measures we might want to look at something the states can do or what they're already doing on their own like the status of california with a new transparency lot and others are following along. that is all for a the good with state experimentation if we permitted that with that drug formula. there are things we can do short term and long term but our approacheapproache s to talk to key senators and members of the house to get them talking to each other. if we could get members across the aisle to talk with each other they could start thinking about things

we could agree on and that is a real problem now but even the most difficult time we were able to get things done just by working on a problem. with may not have been a big solution but we have gotten bills through zero lot of time the only ones especially the last eight years were bipartisan. now they think they can pass them on the partisan basis so now we find out they are more successful. so with those introductory comments i am available to have a conversation. thank you very much.

[applause] >> so the generic drug industry are making up 20% from back when you pass the bill now to date it is almost 90 percent so the gao has estimated the availability of genetic -- generics have saved $1 trillion so with this success the envisioned when you created the statute?. >> we did not even have a model when we pass these even to know what to envision for the future. the act is a enormous

success manufacturers wordy been looking to see if some of those could help they just did not want to be bothered with fat profit potential and with the generic drug market the new with the competition but we never expected that to be as great as a success as it has been with $1 trillion so they hope to save $1 trillion. that is the good part. >> said to get back to the drug act also what you noted and touched on over the last three decades branding and manufacturing have figured out how to obtain secondary

patons on the peripheral aspects to list those with the fda with paper delayed the settlements they engage in with the generic manufacturers refusing to supply samples. so if you were rewriting the act today would you do anything different? or anything that you can predict?. >> we may have predicted brand-name companies may have tried to stop people from buying generics. they talk about them not being the same or as good as a branding drug with a public relations campaign from the very beginning trying to make that point but i think they have

accepted the idea if you can get a generic is a better price. that is the success of the law but the manufacturers look for lots of different ways to keep out competition we envisioned a generic drugs to give a the manufacturer the incentive to cut out to say the patent was no longer valid they cannot manufacture a generic drug. were we will give the advantage to the first generic on the market so that encourages them to stand up and do the work and be rewarded.

so now you are not only blocking the generics but you delay those other generics that are lined up for the market. i finca if you would get these very carefully to see what they can do to address these issues. some are already on the agenda with bipartisan support hoping congress move forward senator grassley has introduced that bill to be sure of the generic competitor. so there is no reason.

with all the countersuits but the court said it should be very much it should be outlawed. son to be considered or looked at very carefully so to start addressing the problems. so if you start addressing some of those problems than the next up is easier. >> if you mention a couple of examples with concerns of

consolidation with those shortages with the ongoing tragedy is in puerto rico so these episodes reveal they're not as stable as they may have hoped so how might we update the act to address these concerns?. >> that since the '80s at one time you had drug manufacturers on the other there was a lot of hostility but now you have brand-name drugs and also the generic drug manufacturers. sometimes they have their own conflicts to say if they have the monopoly they want to continue or if they want

to compete that is in just one side or the other i think we need to let these problems and see what congress can agree to do with those aspects of the generic market. there are some good suggestions to stop the sole sourcing of drugs to bestow the monopoly there. there are ways we can ask the fda to do more to hold up with suggestions to have a more robust generic drug industry by giving them approved more quickly and

trying to see if there is some way there is a sole source manufacturer or note in advance. i think importing drugs could help in a narrow issue on the list of things that might be done. so some things that congress could do is to establish a pathway for those generic drugs with those biotech drugs to be approved with those other issues related to that such as questions

when they can designate a generic drug as a drug that is substituted will. so they need to figure out the difficult criteria so of the game that we had from traditional generic especially if there was a substitute double generic the right now we have the brand name companies to make it more difficult for the state's to allow how to

substitute the generic biologics and we have to overcome that in this area. >> but moving on to the various things that we could do it will take interventions at every level. not just federal or state legislatures but do you think there is a better or worse environment to have those conversations? how do we foster those bridges that we need to build?. >> when the problem gets to be difficult that

representatives need to take on that issue. there is no good time especially if it has to be bipartisan and that is true even now with the republican party majority in congress and republican president because there is no partisan proposal that one of the zero laws that i worked on over a decade was the clean air act, 1982 chairman of commerce committee was john dingell from detroit and the newly elected administration for ronald reagan came

together on a bill. the bill was to reform the clean air act to increase car bin emissions and set standards that could be weakened and allow the air to be geared year and it looked like it would pass but we fought very hard to stop it. after words we still want things to do to accomplish certain goals to strengthen the clean air act with all of these other issues so we tried to reach an agreement but not in tel we had president george h. w. bush said he wanted to do something about the problem.

then we finally got a law passed that was almost unanimous. he didn't like the lobby past particularly but what move to the right direction in a way that was not strong enough that the epa may do this but we said they also may not. but what it is required to do. so through that fact so we could get bipartisan cooperation and negotiation and a good bill. so then president bush said the same thing. but to say this is a great bill all the ideas are great but the fact that president

trump said he wanted to do something about pharmaceutical high prices to hold the conference but others whose seem to want to do thing to move the ball for word. >> so when you created the orphan drug act that there was no business interests to bring drugs to patients as you provided by incentives or tax breaks. but it has turned out they can make profits by selling

it to them but here's the secret you make it very high with the fda to approve them on rigorous testing. >> so there are advances in biochemistry and genetics but now all are understood. >> is it still relevant in this political context? that we could. >> it is still very relevant while those that have no hope from the four. so while manufacturers are

working on these drugs profitable because to get insurance coverage for the drug and have to pay out of pocket and it has become a profitable business. in touch shows the of creativity using all the levers that were possible. so what can we do to put that into perspective?

there is that exclusiviexclusivi ty that runs off together for some time. so those that allow zero of exclusivity. with that very purpose of those models. not to use the cliche. so whether the problems with the drugs would the of sequential monopoly of a

drug but sometimes they were proved that we want congress to look at and a lot of times if we pass new laws called modernization to modernize for sure. >> but i can fill the time so we have seen in the last

year that maryland passed day price gouging statute all patent drugs california tried to be an drug coupons with renewed generic versions so they don't push them to use brand-name drugs so d.c. these efforts will have impact or do we need a federal intervention?. >> what we have is based on state experimentation and states can try things out so i am not sure of this conclusion but states can do more than their medicaid programs if we let them try. but they cannot try because of another law that we would provide the discounts for drugs under the medicaid

program but they cannot figure out the formula for some drugs and not others which made it difficult for negotiations so we tried experiments so a lot of people think of the answers we can try we don't have to turn around the whole system for example, medicare could try things out with a demonstration project to see what works and what doesn't. the state laws help and i know many cases where we push for national intervention but i have seen a lot of examples where people push for pre-emption doing things that the state level.

>> project manager from georgetown medical center. i want to know what your thoughts are on the recent controversy of the other hand trading their patent rights to avoid the review patent and senator macassar goal proposed legislation for that happening in the future. >> that was a creative way. [laughter] to hold on to the expressivity and their monopoly. i thought it was a little too clever. for that attempt that could lead to some corrective legislation. i know she is very smart and

dedicated to stop those abuses in the marketplace it isn't a foreign country but you keep the company without monopoly and we need more competition and less monopoly. >> i am from harvard medical school on november 27 the supreme court heard the case is in short form in which the existence of the patent trial and appeals court is being challenged this is within the u.s. pt go with

those drug companies to challenge the integrity of the patents of those drug companies if it is found to be unconstitutional and is basically overturned that would be for the generic companies to challenge their patent. and will probably be deuce the efficiency that they can get to the market. >> i am aware of it. >> also one of the things about the patent trial is it

isn't only generic manufacturers to see that consumer group with those patents related to hepatitis c drugs that lacked the requirements that we may require. so those issues to allow pharmaceutical manufacturers to expand that exclusivity with those basic boundaries and that is the challenge them.

without having to rely so it is important coming up with another avenue to address this problem will take a different strategies in it isn't a magic bullet but it is the effective strategy and it would be interesting what they say about it. >>. >> i am interested in bio-similars and what the appropriate strategies are to make it look more like a the generic market.

in with those generic drugs. with that success in that bio-similars market accounting for those differences. >> i mentioned a few old ready to establish what is substitutive all. with a path of day biological drug. we need the fda to be much more involved. so we need more bio-similars that can compete with each other. that is one of the ways we have seen the price drop we

did it a generic so very, very carefully. >> but i would second that as the biologic drugs there are dozens out there on the market that they need to be concerned about that there are mechanisms to make sure we are adequately addressing this issue but even though the fda has approved these bio-similars drugs they're only a couple on the market

for those that have prevented these products from being approved. i know when to say a paper delay settlement but they will not market that through 2023. and then with those very old 35 that they could use in europe. >> one of these presentations a senator stood up and said competition sets the price there is a monopoly to regulate. so with an unusual situation of pharmaceuticals there is

no easy answer because we have to have a petition -- competition with the public is put in a position. with the new miracles. then that the congress adopted this last year. and we have to think hard hour we going to be as a country? that is with the cost of the drug. but can you imagine today?

if we had a vaccine for polio? not everybody can get it. they cannot afford it. so they made sure that did not have been. and with these situations. but to have a lower price point. with lifesaving drugs with new breakthroughs. >> this is a powerful statement. and with that market with those physicians and patients as well.

that it is hard to imagine that the efficient market that people that lead to the physicians are not paying for the product but the patients are paying in then the insurance companies make the decision and that is very inefficient. so are there things that physicians and patients can do?. >> this is the problem generally with a third-party payer. and the family. and there is a further distortion with those values he gets out of medicines. and for scribers need to know that.

>> patients need to know that. they need to know what is available to them. with the affordable care act. it didn't produce what we hoped it would. at the behest of the former. so anything that could be used for a formulary and without that formulary so the medical system those those improvements. >> so in renewal of 2019, that question?.

>> i work with the intellectual property program. i'd like to give you a moment to speak about nafta trade negotiation to be quite aggressive including higher projections with the tpp and nobody knows what is going on?. >> i don't know what the issue is but every time there is an international trade some of those brand

name drugs but they could not save generic unless they filed the timetable which of course, we never envisioned in the survey didn't envision the developing countries to produce a drug and have it on the market and then say after time went by a to get the generic approved even though it was already on the market and with our trade representatives they win in the untenable position with the ability of these poor people in the developing countries that could not

afford the market because of the price we have to get those generics out as quickly as possible but generically ensure it is related. >> they give very much. [applause] >>

.