tv Pfizer CEO Ian Read Discusses the Pharmaceutical Industry CSPAN March 25, 2017 9:56pm-11:00pm EDT
and redesign. announcer: ian read. medicinesis using our . i think we do need to reform the health care the way it is the vivid, and the consequences. announcer: scott pruitt on environmental policy. >> there is some exciting things going on with clean coal technology. there are exciting things in the nuclear space, but not here. most of that is happening in europe. if you really care about some of these environmental concerns, nuclear thought to be in the next. announcer: programs are available at c-span.org in our video library. ceo ianr: now, pfizer
reid discusses how to improve america's health care system. he spoke at the national press club for one hour. >> good afternoon, ladies and gentlemen. for those of you who are tuning in and our television audience and on the internet, welcome to the national has club. since 1908, we have been the embodiment of the constitution. before we get started, i want to remind our guests here in the audience, some housekeeping rules for those who may have come in late.
please put your phones at least on vibrate, because we know you want to tweet. we want you to follow the action. on twitter, you can follow us. using #npclive. i want to introduce the head table. as i introduce each of you, please stand and i will desperately as your name is announced, from my left and your right. the senior reporter at med tech insight and the treasurer of the national press club. the desk editor at the associated press and the membership secretary of the national press club. the executive vice president of corporate affairs at pfizer. breaking news editor at usa today and past president of the national press club. kenneth cole, senior vice president of government relations at pfizer. skipping over myself.
the economy reporter for bloomberg news and deputy team leader for the national has club headliner team which organizes all of our speakers. skipping over our speaker, the senior vice president for business wire. vice president of globally test of global media emissions and -- of global media relations. syndicated columnist for the washington post. washington bureau chief monitoring health care. washington correspondent for the lancet and they can shipping writer for kaiser health news. chairman of the fourth annual wharton d.c. innovation summit. [applause] >> and i am just -- and i am just.
it is time to bring in our speaker. as we gather, a health care bill intended to replace obama's signature achievement is just with and factions of the republican party -- within factions of the republican party. donald trump is driving the measure. some of the issues wrap up in a debate for health care 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 joint industry is ian read, ceo of pharma -- of pfizer pharmaceuticals. lipitor created to combat cholesterol. or the little blue pill, viagra -- you know what that is for. all that falls under mr. reid -- read's care. mr. reid and his counterparts are under to misfire to make $100,000 cancer drugs more affordable without having patients needing to apply for special assistance. or in pfizer's direct taste, under fire for being find -- being fined for overcharging britain's national health care system.
it is also taken heat from both sides of the aisle from the president and from democrats in past years like carl levin who are operating -- for uprooting and going to ireland for better tax deals, which they contend is for better job growth. the trump administration leaves the price of discussion drugs could be 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 reuters in january and the president doesn't understand this industry. we will about these and other issues along with a robust question and answer period. after opening remarks, please give a warm welcome to ian read
the ceo of pfizer. [applause] reid: good afternoon -- mr. reid: good afternoon. i'm delighted to be here today. at pfizer, our cultural values straight to work. i have a coin that expresses that. i want to have a candid conversation with you about the risks of drug discovery and development. the economic observations of our industry. the various to patient access to formal health care including medicines, and some observations regarding how we can create a health care system that supports innovation and provides patient
access. if you think back to the drugs that were available in the 1940's, they were available for infections, depression, ulcers, blood pressure, parkinson's. there was almost nothing. you could see a tv ad in ca patient in front -- and see a patient in black and white. he would turn and it was bare. today, that is not the situation. we have incredible medicines that have turned like hiv into a chronic condition. slow progression for rheumatoid arthritis, cured disease which is pepsi, helped test which is pepsi -- provided treatment for painful ulcers and gerd. if you have gerd which is
reflux, it makes your life miserable. it is not a trivial thing to be able take a bill -- to be able to take a pill once a day. cancer, we are developing new immunotherapies that harness the natural abilities of the bodies immune system to recognize and fight cancer, along with the other amazing discoveries we have made with small molecules and chemotherapy -- and chemotherapy. in 2014 and 2015, over 40 new medicines were approved by the fda. many were for an array of diseases where there was no good treatment available. the pipeline across the pharmaceutical industry for new medicines has never been more promising. with more than 7000 medicines under development, around the world, and an average 70% of
drugs across the pipeline are potentially first in class medicines. that drug has not been discovered before. that mechanism has not been discovered before. what do we attribute this progress? i believe it is the result of focused investment in highly risky undertaking of drug discovery and development, combined with advances in basic research from our universities in the nih. from discovery through fda approval, developing new medicine on average takes 10 to 15 years in costs $2.6 billion. less than 12% of the potential medicines make it to initial trials -- you can look at this and you can quibble about how it was done. i can give you a very easy way
of knowing what the costs are of the drug. pfizer spends a lean dollars a year on research -- spends $8 billion a year on research. if we are lucky, we produce three drugs a year. i don't need a study to know what it costs to bring new drugs to society in today's environment. for example, between 1988 and 2014, there were 96 unsuccessful attempts. 96 unsuccessful attempts. in brain cancer, there were 75 unsuccessful attempts and only three new drugs. in lung cancer, there were 167 unsuccessful attempts and 10 new drugs. one of which was pfizer. to discover and develop new
drugs, the biopharmaceutical industry spends six times more r&d compared to other major industries in the u.s. in 2015, the industry invested $50.8 billion for 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, it is one of the most complex undertakings that humanity has. to take an idea and shepherded through the drug discovery process, ensuring excellence at every stage and data at every stage to finally get a drug that can be taken by humans with a
positive risk-benefit equation. let's briefly review what it takes to discover and bring new medicine to patients in layman's terms. the process begins with basic research done by researchers within academic institutions. these researchers find postulate -- find, postulate and get insights into a disease and approaches for 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 this research findings once it has been validated. normally, you publish, it gets validated. you understand. the understanding improves.
at that point, the industry may begin a jug discovery process -- a drug discovery process. it is translated into research hypothesis, often through models that begin 10 to 15 year -- the begins at 10 to 15 year journey to get medicines to patients. we create a monocle -- a molecule that we believe will interact in the right way. we run studies to ensure the molecule have what we believe is a desire -- the desired biological effect. we run multiple doxology studies prior to trial to humans. at that point, we conduct early studies referred to as phase one and phase two and assess the
safety of the compound and identify the right patient population. once phase two has been passed, for safety and advocacy, we can chip -- we conduct large phase three trials. to prove the risk-benefit of the drug, and then we submit this data to a registry body like the fda for approval. this process has many interactions and. -- and full stops. you remove the toxicity and you find -- there's multiple attempts to get the right medicine with the right distribution. that risk-benefit profile is favorable. i will share with you our first
in class drug cash it started -- it started in 1990 with a result done by independent researchers that identified and characterized kindnesses which are key regulators of cellblock division. through collaboration we were able to identify the right nation population for our compound. by 2008, we had it an acceptable molecule that we believed improperly interfered with the cycling to disrupt the growth of tumors. this result was that after 25 years of initial, basic research, we had an inhibitor. seven years after the first patient was toast and critical trials -- and -- was dosed" clinical trials -- dosed in clinical trials. before the drug was even approved, we began conversations
with the health care community and we spoke to more than 80 pairs, more than 20 breast cancer experts to build an understanding of the value of this medicine. what it does, what it does against competition, what advances it gives, how it changes people's quality of life. based on that input, we negotiated with the plans and the payers, access for i brands. we have continued to make significant investments. it has been studied patients with early breast cancer. after two years on the market, there are two competitors. one approved and one in development.
that is something market evolves. you get a patent on your molecule, you don't get a 10 on treating the disease just get a patent on treating the disease. more and more, we were followed in very quickly by competitors with similar looking molecules. today, there are other therapy stories. gilead's for hepatitis c. these are therapies with results for improvements in biology. huge investments in risk-taking by the industry could less about economic district -- economic commission. they continued stream of treatments won't flow if society is not willing to fund and support a modern biopharmaceutical industry.
that gets cures to patients. i would like to note that in 2014, the industry in the united states represented 3.8% of total u.s. output. an impact of $1.2 trillion. when you take into account the amount of goods services and the total impact on the economy, $1.2 trillion, this includes the economic activity across the u.s. economy, including supply jobs. i want to be clear, we understand our responsibility. every scientist understands the responsibility. pfizer understands our response ability to produce medicines
that bring value and are competitively priced. we are working toward an understanding in our society of the investment we make, the risk we take. and by we, i mean our shareholders. appropriate return on the totality of our investment. a successful drug will always -- will only be profitable. there is a lot of dry holes. you need to have a cash flow to support the entirety of the biopharmaceutical ecosystem. let's talk about access and transparency. we understand the access issues for patients. what we face with co-pays and high deductibles. we give away for free to 250,000 patients in the u.s. prescriptions in 2016 because the process is broken. those patients need to come to
us as a last resort, because the insurance system is failing them. transparency should allow patients in the test patients and physicians the right choice. that is transparency. how does a patient know they are getting value from that product? a great percentage of the costs associated with life-saving as compared to expensive interventions like hospital admissions, emergency rooms, physicians diagnosis. patients in our insurance system page 3% of the cost of hospital care out of their 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 used by the system, insurers and providers, to a -- to avoid adverse selection. it is when you have a higher proportion of six people on your plan and your competitors -- six people -- sick people on your plan and your competitors. pharmaceuticals represent talk percent of the total health care system costs and we need to consider two factors, visibility and understanding of what you're getting from insurance. make it clear to the patients. a patient focused benefit that meets the patients need. i used the analogy that patients need solids insurance, the type of insurance you have for your home. if a person's home is destroyed by a fire, their insurance company covers an majority of costs. people know what they are getting. they are 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 majority of the expense. individuals cannot afford modern pharmaceuticals. it has to be done through an insurance system. the cost to produce and bring safe and effective drugs to market is out of the reach of individual pockets. but the way that insurance plans are designed, costs are shifting to patients in order to contain cost in the short term. many of the plants now have large co-pays, 6000 dollar deductibles before you get to any repayments. this is not good insurance. there is little incentive for the conventional cure over the long term. in many cases, benefit designs are construct it to avoid sick
patients. for instance, previous to the affordable care act, we had a product that helps you would not smoke. insurance companies would not cover it. why not? they do not want smokers. on their insurance rolls. they are bad risks. so we had great difficulty getting access to this medicine in the insurance system. hepatitis c is a good example. when hepatitis c treatment was introduced. it was not about the value of the drug. the evidence demonstrated it was cost effective. the debate was really about the short-term impact on medicare and managed care budgets of an uninspected, expensive high-value medicine that they had not budgeted for. there was no risk adjustment for it. so before have see was available, the annual coverage -- the cost was $60,000 a year
for patients with in stage liver disease. and $500,000 per patient for those receiving a liver transplant. an average expected lifetime patient cost to treat all stages was $205,000. approximately. compare these costs to the fact that more than 90% of the patients with the most common form of this can expected to be toward with this drug in as little as eight weeks. this is a lifetime cost now a slightly more than $40,000. and because of intense competition, the cost is now 50% less than the initial cost it was launched at. returns -- let us look at the returns of the industry. i think there are many ways that we can put the pharmaceutical industry -- we can point out the benefit to society.
the various ways of looking at it. the transparency we are seeing in most states is not inappropriate way of measuring the benefit of the pharmaceutical industry. the drugs developed. when the drug is approved it, it only has half of its patent life left. once the patent is expired, it is broadly available in the form of generics. 90% of the pharmaceuticals on prescription today are in generics. they would not have been available if they had not been discovered. had there been no innovation money for their discovery. another indicator of equitable return is a financial performance. the successful drug is hardly profitable, that is a real insight.
if you look at the average return of the pharmaceutical industry over the last five years compared to 25 other industrial sectors including consumer, software, telecom, energy and insurance and health care -- the pharmaceutical industry ranks 19th in terms of price-to-earnings ratio. out of 25. a key indicator of the growth prospects of a company. 11th in terms of return on equity. ninth in terms of return on capital. and nights in terms of return on assets. there is no evidence of extraordinary return in the pharmaceutical industry compared to the other industries in the bloomberg index. it is also worth noting that since 2010, the return of the pharmaceutical industry has been lower than the largest health insurance company including united health, edna, cigna, humana, and 17.
as a whole, these companies outperformed the s&p 500 stock index which returned 135% over this time period. collectively, these companies gained nearly 300% looting dividends. while the pharmaceutical industry turned 91% including dividends. less than the snp and far less than the returns companies. overall, it is fair to say that we are being responsible. we are producing great value for society and simultaneously taking large financial risks because of the uncertainty of the drug. we do not set prices. we negotiate the price is. the arbiters of the value to the society are the payers and the insurance company. there are two examples to demonstrate this more specifically. in 10 years, statins has generated nearly $1.3 trillion in economic value to the u.s. of which, around 950 billion
dollars was retained by society. with around 20% of the value accruing to the industry through the revenue from selling the drugs. we retained 25% of the total value of stat. at the same time, the cost of statins has now gone down 90%. society has the benefit of that invention forever a generic pricing. from 1998 until 2000, improvement in cancer survival created 23 million additional life years. 81% of that value accrued to society. 19% to the pharmaceutical industry. however, we understand that while drugs are highly cost-effective, the health
echoes system is making it difficult for patients to get the health care that they need at a cost they can afford. especially in life-saving medicines. i believe we have a collective opportunity to stop mending our broken system. we believe there are four tenets required to create a health system for the needs of the patients. we need to give access to quality health care coverage including preventive care, access to cost-effective interventions. we stand really to pay our part. we do already with our patient assistant programs. we need to have incentives for prevention-based health care that reward people for good health and provide financial incentives that enable providers to encourage prevention. we need to get the right incentives in the system.
to pay for health and not the treatment of illness. if health care is -- if health plans and providers were compensated, and patients were rewarded for vesting in their health, all parties would benefit. most especially the patient that would have good insurance and patients that have coverage that pay for co-pays. let us look at both sides of the ledger. that us look at the cost of the health-care system and the costs saved while using this medicine. long-term outcomes versus short-term financial budgetary considerations. we need to base our solution on competitive market principles. get the right incentives for the whole whole -- for the whole health care system. we need policies that spur public and private funding.
most laboratories like pfizer have huge numbers of projects that we cannot per -- process. we cannot cover the cost of the capital. we need to increase investment in manufacturing. we need regulatory reform that accelerates scientific advancements and the development approval of life-changing medicine while also eliminating the backlog of generics. and we need favorable tax and trade policies that create a level playing field, protect american intellectual property and remove their ears to access. we believe committing to these ideas can lead to an efficient market based system for all segments of the health echoes system including pharmaceutical companies and most importantly patients. with that, i would be very pleased to take your questions. thank you very much. [applause]
>> ok. housekeeping note on questions. if you have a question and you are here in the house, you have cards on your table. you may write down your questions and pass them to the head table. we will soar to them and tried to get to as many as time allows. you like the gavel. first of all, as you can imagine, we have quite a few through the internet and so forth. we have a bunch of different questions. i have not seen all of them in depth. and for the record, neither has mr. reed so he has not been >> 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 health care bill on capitol hill and specifically, lawmakers today are debating whether insurance policies should be required to have a minimum level of benefits to qualify for tax subsidies , these include prescription drug coverage and do you think these so-called essential health benefits should remain in law? >> i cannot give you any prediction. i am a businessman who is trying to get -- what i would say is i put support for we do support any system that ensures patients .et access that their incentives are in the right place. that there is choice in the system. and that people get the ability to choose the insurance that they need for a particular time in their life and we do believe all people should choose to have
insurance. as regarded having essential benefits, i think it is a situation of my preference is less regulation and more market-based incentives is the right way to answer that issue but you do need a safety net. so i believe that all should have an appropriate safety net for people that cannot afford insurance and have previous conditions. >> a quick follow up. the house freedom caucus chairs says there is no deal on the house republican deal to replace the affordable care act. what is the impact of the industry from your vantage point? that president trump has been saying -- i want this bill and icing we can -- and we think we can make this deal. >> i do not believe there is any short-term impact for the industry. i think there is a tremendous impact for patients, short-term.
short-term, you see in affordable care act that is collapsing. it has pushed into existence, no first-time coverage for pharmaceuticals. it has pushed into existence $6,000 deductible before getting any reimbursement. for instance, when king versus birdwell was being discussed, we looked at what would happen if they had struck down the federal exchanges and we decided we would provide our medassets for free to everyone on the exchange list. -- everyone on the exchanges. the cost to pfizer, $40 million a year. in a $52 billion corporation, that is nothing. because no one is using our medicines in the exchanges because the exchanges do not provide them access. i do think we need to reform the the health care the way it is delivered and the consequences will be to the patients. >> a lot of people have the perception that the
pharmaceutical industry is powerful. is it just layman's thinking that you could not prevail upon the insurance company to cut a decent deal for patients? >> the insurance business is in the business of taking our revenues than they pay out in premiums. >> therefore, there is no incentive -- >> that is their business. >> well, moving on -- question from the audience. the american medical association, the american hospital association, as well as many other health care groups have expressed their opposition to the current republican affordable health care bill. does pfizer also oppose this bill and if so why and if not, why not? >> this is a democracy. everyone can express their
opinion. pfizer has not expressed a formal opinion on the present bill in front of congress. we support principles that we like to see an active like the -- principles that we like to see enacted like access to medicines reasonable co-pays, , choice in the system. we support those elements of any plan. >> what specific regulatory reforms would you like to see at the fda? >> i would like to see a message from society to the food and drug association -- they want the association administration to move towards better balance between risk and benefits. i think the fda has been set up and conditioned by society and congress to be extremely conservative and not willing to take the appropriate risk to benefit a view on new drugs.
>> speaking of which, what do you think of president trumps pick to head the fda? >> i have met him in business situations. i think he is a respected physician. he certainly has been a regulator and he knows the fda. i think he was there as a deputy at one point. we look forward to working with him and the administration to ensure that our drugs get to patients as quickly as possible. >> what is pfizer doing to control the misuse and excessive use of its highly profitable opioids? >> i am not sure i necessarily accept the premise. we produce opioids because they are an extremely important part of the health-care system for people that need to deal with chronic pain. we promote these products on label to physicians.
and we also have a product that can rescue you from an overdose and we are making that available at $11 for one treatment which i believe seems a very reasonable price to save someone's life. one injection. we have also given a million dollars to the states and a million doses of this to the states ravaged by these addictions. opioid addiction is ravaging our families and parts of society. we will support anything that allows the appropriate use of opioids. >> if you could make that drug available for $11, why not lower the cost of i brands? >> we have to look at the value of either grant to the system and the cash flows we need to continue doing researching cancer. it is a value of what the drug
delivers. and we need to recover that value so -- because if we do not come at cannot continue to invest. that is why we talked about macroeconomics. if we had a return on capital of 25%, then society could say -- wow, that is a pretty rich return on capital. as an industry, our return on capital is around 11%. it is not that healthy. starting return on capital is 8% or 9% that shareholders usually require. you have to understand the our focus is what is the value of the product, can recover a portion of that value? -- sta to you in stack cancer, we negotiate with health plans to ensure that they see the value of what we provide and that is how we price. >> you harped on transparency and accessibility and yet in the state of massachusetts, your company had to be subpoenaed to
have information on your donations to patient assistant groups. the massachusetts prosecutors felt you were contributing to the inflation of the cost -- >> that is their point of view. i would argue that what we do is 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 these investigations. >> you mentioned that the insurance system is broken. health care is front and center. what is one thing you want congress to know? >> get the incentives right. you get a system to work in the incentives are right. the system does not work well with regulations. you fine tune through regulations, you ensure at what
he through regulations for you if i were to wake up tomorrow and redesign the health care system, most people stay in the same geographic area. they do not switch hospitals the way we switch insurance companies or providers or doctors. i think the risk and reward should be placed on the providers in our system. they should be compensated for taking that risk. and if they are taking that risk, they are totally incentivized to look to the health of their population and not the number of treatments they get their population. that would focus them truly on health care. and they would hold the patient for most of their lives so the risk and incentive would be held there. insurance companies could provide a service adjudicating the level of sickness to the population. that would align incentives. >> there are a lot of questions about congress and drug prices. what concerns do you have about congress heading into the drug pricing market?
>> i think that i do not believe that price controls in any part of our economic activity produce choice, opportunity or innovation. and so, i would advocate against any type of price control. it is a blunt instrument. it will not allow huge cures or diversity in choice. i think it is bad policy. >> according to one of the journalism transparency sites, your company spent $2.7 million on political donations and another $9.7 million on lobbying. what did it get you? >> what we spend on, and i cannot confirm or deny those numbers because i really do not know where they come from but my point of view is that we have to as part of society the part of a
legitimate discourse with our regulators and the people who regulate us and the political class. we have to be involved and advocate for choice, access, and low co-pays. 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 or gal who is not walking around with that kind of money in their pocket? >> every part of society has different ways of expressing their views and they can join associations, they can express their views individually and write there congressperson. national right to their congressman. they do not spend that money because they are not trying to interact with the 50 states and all of the congressman and all of the senators and regulators and inform and educate. they do not need to spend that type of money. >> the u.s. veterans administration pays some of the lowest prices for drugs.
doing bulk purchasing. should that be expanded? it is not due to bulk purchasing. there is a deal. >> you disagree with the premise of the question. >> is not due to will purchasing -- bulk purchasing. but a deal that was struck a long time ago and the united states is a prime example of nobody pays the same price for their medicines. it is a marketplace. there was a deal struck that basically says that we as an industry except that the veterans are a population that needs additional care. we provide our products as close to noncommercial prices as we can to the veterans and those prices do not affect the prices we use with medicaid. and the prices we sell to medicaid which are highly discounting did not affect the prices itself private sector. this allows us to create access for the most unfortunate members of our society will preserving a business model.
-- while preserving a business model allows us to find innovation. >> there is no way to extrapolate that model and keep your industry solvent? >> no, you could extrapolate that model. this is what the europeans do. by the way, it is an oxymoron to say that you negotiate with governments. you do not negotiate with government. you take what they offer you. if all of your other investments are sunk. the result of extending those preferential prices would mean substantial reduction in the total volume spent on research and the opportunities for new products. without the u.s. market, there would not be the tremendous expansion in the innovative therapies that are available today and will be available in the future.
europe is free writing -- free riding on american innovation. >> and so, how do you balance the scales? >> you need good trade agreements where intellectual property is protected. >> speaking of trade agreements -- >> that is one solution. >> the president of course has bailed on tpp. >> we did not support tpp because it did not protect our intellectual property. if you look at canada, australia, new zealand -- highly developed countries who are all free riding on inventions from the u.s. if you look at access for their population, i think it is safe to say that if there were 100 new products, australia and new zealand -- their population only has access to 30% of them. in the u.k., access to 47% of them.
normally two or three years later after the u.s. their citizens are not getting quality health care. >> you are saying that is why canada is cheaper. >> canada is cheaper because it rations and it can because it free rides off of american innovation. in our industry, let me be clear -- we have sunk all of the money up front. you are not paying for the pill. the pill is an artifact. what you are paying for is all of the clinical trials, the knowledge and experimentation which tells you that the pill will do what it will do. the pill is irrelevant. it is just a way of getting that in your body. once you have done all of that work, you are very susceptible to commercial blackmail. you need to recover as much money as you can from the sale of the intellectual property and
therefore you are forced by purchases in governments to say i know you get a hundred dollars in the u.s. that is a market rate price but we're not going to give you access to our market at all. you have a choice. you can say no in which you get no funds to support your research which means prices go up more in the u.s. or, you say, ok -- what can i negotiate and if you say no -- let me give you an example. it is a huge advance and it allows women with breast cancer to have 24 months against the standard of nine for survival. it is an incredible revolution in the treatment of this cancer. you go to the u.k. and the u.k. government has assessed this and is offering us pennies on the
dollar. pennies. the problem is that i can say no and walk away. but novartis is there, the next company is there. and all of them have 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, you remember when former president bush teamed up with former president clinton on pepfar going to third world countries to try to lower drug prices there. can't that same thinking be brought back here? >> we do. that is why we give away 1.7 million prescriptions. >> i'm talking about the pricing. >> the price has to reflect the value of what you produce.
if not, you do not have an economic system that makes sense. the price has to dictate where you put your resources. into rheumatoid arthritis, cancer, mental disease -- pricing reflects economic value and you need that to give choice. if you distort those market signals, you distort everything that we do. our responsibility is to produce the best and greatest medicines we can't to make the biggest impact on human life. -- we can to make the biggest impact on human life. and then, to place it at a value that allows us to continue to do that work. with a reasonable return to our shareholders. that is what we do. i just shown you the indices, the return we get in the stock market is in the middle of the road. it is not at the higher end of
what some industries are in. -- some industries are. -- earn. and so, in the end, it is not -- it is society's decision of how much do they want to pay for innovation. and if you don't want innovation and you don't want the next cures, then press control. elevation -- want innovation, and say had to sell all of the dirt prices at the same as you get to the better. these are not economic crisis. these are prices for different segments of our population that have great need. this industry needs to have a return to allow us to do the research. >> you get the perception that because of the revenues, that was very popular during the campaign. but you get the whole notion that they are saying -- you are earning umpteen billion dollars in revenue. you can't cut us a break?
>> that perception needs to be addressed by really good insurance. in the city addressed by rain, we as a society want to take care of women that have metastatic breast cancer and we value, through our market mechanisms, this product and this price. >> are you saying that it is not your problem? >> if we could speed up the fda, if we could get drugs to market in less than 15 years, if we had a regulatory system that encouraged innovation, we could bring a lot more drugs to market that would lower prices. what i'm saying is we advocate for ways that make our industry more productive. the more productive we are, the lower prices will be because there will be more competition and more products in the market and that is what drives pricing.
>> you said effective patent life is closer to 14 years. what are your thoughts about evergreening? others have said that practice is unethical. >> would you like to define what that term means? it's where you take a molecule once a day and you change it so that it is now once a week. it has some value. if society once to pay for it, they will pay for it. in a market based system, i do not condemn or applaud it. it is up to society to decide if they want a once a week treatment versus a once a day treatment. if you are injecting yourself
every day, that is in advance. isyou can give pill, that relevant. in the u.s. you cannot make money by ever greeting. evergreening. we have lyrica. daye bringing out a once a formulation. we started the research 12 years ago and there were delays and it has come to the market too late. it will not protect our patent or our sales. in today's society, ever greening is a failed strategy. >> earlier this year billionaire bill gates offered seed money that could help with vaccine development. vaccine development is generally unprofitable for pharmaceutical companies. what should be done to encourage
drug companies to embark on such research? >> get the incentives right. you want antibiotics. there is a dearth of antibiotics. it is a product that you want people to invent and discover but you do not want them to sell because you want to keep them in reserve. you need to find a way of creating an incentive to develop the antibiotic that is not related to the economic return of the antibiotic. pandemics like ebola come all of the diseases that we could be subject to that come out of the tropical forest or outside of the u.s. you need cures but you cannot make money on them. the way to do that is a transferable exclusivity 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 of one of your existing products.
that is an incentive and would fuel, not only some big companies but everyone would be looking at antibiotic development because they would be able to sell their development to larger companies and the whole ecosystem would be interested in finding antibiotics because there is an incentive to society and to the capital that goes into funding these research projects. >> we had sylvia mathews burwell here before she left. she feels health care is a right and not a luxury. your view. >> it is a right to the extent that society is willing to fund it. clean water is a right to the extent that we have sanitation and we pay for it and we value it. i do not want to get to
political or philosophical but there are very few rights in our constitution. and intellectual property is one of them. >> before i get to the last couple of questions, a couple of calendar announcements. upcoming luncheons include afl-cio chair richard trumka on april 4. john costin and on april the fifth. joint chiefs of staff chair general john dunford will be here april 21. and that lorena misty copeland will be here april 17 to talk about her new book "ballerina body." on april 17 at a newsmaker. and before i get the last question, we have a tradition here. everyone from nelson mandela to benjamin netanyahu has received this mug.
>> the same mug? >> [laughter] >> thank you very much. [applause] >> final question. if you became the czar of health care in the u.s. and had a guarantee that all stakeholders would live up to what you would be doing behind you. what would your recommendations look like? or one recommendation. >> just what i described. i believe in choice and market-based solutions. i think our health care has been hugely distorted by a lack of incentives in the right place. i think we need to go back to the 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 x-rays they can do or mris on a transactional basis. get the incentives right. pay the physicians to keep people healthy and everything else will a line easily. -- will line easily. >> thank you. this concludes this national press club luncheon. for more information, go to ww. press.org. [applause] [applause] announcer: on newsmakers, washington congressman adam smith, ranking member of the armed services committee talked about the trump administration's defense budget, north korea and this week's attack in london. newsmakers live tomorrow at 10
a.m. and we will show it again at 6 p.m. eastern on c-span. announcer: sunday night on q&a, a conversation with atomic of a recently retired from the syndicated column he wrote for the last 25 years. >> i never felt that i had to what people with a different views thought. throughout all my years, i read everything. i have a book that i read when i was an undergraduate of law and i have treasured that book. i could tell even then. i understood there were reasons why people have different views. a question of being on the side of the angels or against the forces of evil, i
think the new administration in washington has very good people, better that i think most recent administrations have had in top positions. the only question is whether or not the president listens to them and that we will not know. at eight: sunday night eastern on c-span's q&a. announcer: next journalist chris matthews, mark halperin and others speak at a first amendment award dinner. then pfizer ceo ian reid talks about health care in the pharmaceutical industry. later, a senate hearing on u.s. military readiness. now, a first amendment awards dinner hosted by the radio television digital news foundation. msnbc's chris matthews served as mc. this is just under two hours.