	The drug value debate in the US has taken up roots and is here to stay. It has moved from newspaper headlines and 

TV exposés to physician associations and clinical groups; from oncology and orphan drugs to cardiology and primary care; from being focused solely on drugs that provide marginal improvements to products that can fundamentally change treatment paradigms. And while much of the focus of the debate has been on how stakeholders make decisions based on value, how we define value is a complex and unresolved debate in itself.

	Payers, physicians, patients, and pharmaceutical companies each use a different lexicon when defining and discussing value. Each stakeholder group also comes to the table with perceptions on how the other groups are defining value. As stakeholders engage to assign value to therapies, these gaps become glaringly obvious and make it clear that while we are all talking about the same thing, we are not always speaking the same language.

	We will never move to one definition of value, and it is unlikely that we want to. But can we do a better job of understanding other stakeholders’ definitions to prepare us for smoother engagements? And particularly in the US, where there are no officially sanctioned assessments of “value” for pharmaceuticals, and where the debate is moving more and more quickly as healthcare costs escalate, can we use a broader understanding of stakeholders’ definitions to support new commercial engagement approaches? The answer is Yes.

	To understand the US payer perspective, IMS Consulting Group conducted an online survey of more than 30 managed care organizations and pharmacy benefit managers (PBMs). To compare these results with nations that have experienced the value debate for much longer and do conduct value assessments, we carried out similar qualitative discussions with pay ers from France, Germany, Spain, Italy, and the UK.

	Nearly 75% of US payers defined value as the ratio of benefits to costs-admittedly, a “cost-effectiveness-lite” approach. All European Union (EU) payers also chose this same definition, even though not all formal access review processes include this approach (see chart).

	When probed on what drove this definition, payers generally defined benefits as relative to standard of care, rather than in absolute terms. The top three benefits ranked as follows:

 Improvement in efficacy versus standard of care.

 Reductions in mortality and safety improvements versus standard of care.

 Level of satisfaction with existing treatments.

	When asked to expand on costs, payers noted that the focus is on the price of therapy, rather than cost-offsets or resource utilization, and that costs are generally considered per treatment course or on a yearly basis.

	This definition raises some key challenges for the other stakeholders in healthcare. It does not place weight on patient experience, nor does it incorporate clinical realities for manufacturers around the time horizon for “benefits” and the opportunities that a new pathway or mechanism of action may provide. Other challenges include:

. The quickest way to increase “value” in the ratio-based definition is to decrease cost. We’ve seen this approach play out with the proliferation of closed formularies and increasing levels of contracting, but is this sustainable?

. The other, more challenging approach to increasing value is to show greater benefit. If only things were that simple, but we know they are not, particularly if all internal stakeholders have not engaged cross-functionally early in the market-access process, before clinical trials are set.

. This definition suggests a more “cost-effectiveness”-driven approach than has been historically employed in the US. However, FDA regulations on what and how data can be shared is a real factor that has to be considered before any changes in approach can be implemented.

	We also asked US payers what do they view as the manufacturer definition of value. Only 14% of payers noted that manufacturers define value benefit/cost. Therefore, 60% of payers in the sample were convinced that manufacturers have a different definition of value-but is perception reality? The answer is No. Discussions with biopharma manufacturers show that there is a broad range in definitions of value, but, broadly, most manufacturers define value in the same way as payers: benefits/costs. So could we be saying the thing, but not speaking the same language?

A different approach: A V.A.L.U.E framework 

	How do we move forward to engage in discussions about value, when we are approaching the conversation from a different viewpoint? And how should these factors be incorporated into a company’s strategy? The answer is to proactively leverage the V.A.L.U.E framework (see chart) into 

discussions and strategy planning to address differences in value definitions.

	The V.A.L.U.E. approach requires rethinking stakeholder engagement. To effectively employ this approach, manufacturers need to be fluid in considering when and how to engage payers. Proactively defining value and the factors that should be incorporated is critical to successfully align on the value of a new product in the future. Elements of the V.A.L.U.E approach:

	 Recognizes that payers incorporate money/cost when they determine “value.”

		Across markets, payers are defining product value as incremental benefits in relation to cost of product.

		Turn the process on its head: Develop a payer, physician, and patient value story pre-Phase III.

		Assess product benefits in relation to costs early in the development cycle.

		Always include clinical development and commercial teams in early-stage discussions.

	The evolution of the value debate is showing up everywhere. Payers have been proactively engaging with pharmaceutical market stakeholders around their definition of value. In August 2015, CVS Health Research Institute published a piece in the Journal of the American Medical Association (JAMA), encouraging the cardiology community to review and reconsider current treatment guidelines for the management of high cholesterol given the launch of PCSK9 inhibitors, using terms such as “cost-effective use” and “referencing changing market dynamics.” 

	We liken the value definition conversation to arguments we had on Twitter this year around 

. The “#thedress” was an optical illusion posted online-a picture taken in a certain way that made a dress look white and gold to some and blue and black to others. There are biological and visual factors that drove this difference-but the difference was real and sparked nationwide debate. Two people looking at the same picture saw two completely different color schemes. There were two types of discussions that ensued:

Each person tried to convince the other that they were “right” and what the “right” colors were, while both sides were incredulous that someone could see a different color.

 One person explained the difference by showing how framing, lighting, and photographic differences changed the colors. The dress actually was black and blue.

	Which conversation would you want to have? 

 is a Senior Principal in IMS Consulting Group’s New York office. She can be reached at 

Robyn Lynch, Consultant, contributed to this article

Articles

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How a broader “value” understanding can benefit brand teams.

Defining Value: The Payer Perspective

The Cleveland Clinic’s 2016 Medical Innovation Summit caps its yearly
	event with a Late Show-style Top 10 list bolstering “Amazing Science.”
	Organizers drew on 75 Cleveland Clinic physicians and scientists to select the 

top drugs, medical devices, and public health initiatives

 they feel are poised to deliver huge potential impact in the coming year. Here are some of the highlights. 

VACCINES TO PREVENT PUBLIC HEALTH EPIDEMICS

 Ebola and meningococcal B have reminded us in recent years that the threat of global scale infectious disease outbreaks remains a grave concern. The World Health Organization declared a public health emer- gency of international concern as 10,000 people died from Ebola in Sierra Leone, Guinea, and Liberia. And while Ebola travelers make headlines and travel advisories, meningococcal B has hit close to home with outbreaks in confined settings, including four on US college campuses from 2013 to 2015.

 Researchers are springing into action, showing new levels of sophistication. The FDA has approved two vaccines against meningococcal B in recent years. In Ebola, clinical trials have been fast-tracked. A vaccine that may prove effective emerged in 12 months, and is expected to be available in 2016.

 The randomized controlled trial, the gold standard of clinical research, has ruled the industry for 50-plus years. But patients often suffer long waits only to access trials that might not be suited to their specific variation of disease.

 Genomic testing can help identify the molecular profile of a patient’s tumor or illness to better match them to clinical trials, while also increasing their chance of benefiting. Patients with rare and/or late-stage disease can be steered more efficiently towards a potentially life-saving therapy. 

CANCER SCREENING VIA PROTEIN BIOMARKER ANALYSIS

 Poor sensitivity, specificity, and predictive value limit the diagnostic value of some tests, like those for prostate cancer that measure changes in the concentration of a single protein in a biologic fluid.

 A new platform that detects changes in the structure of certain blood proteins can diagnose many types of cancer with high accuracy. In contrast to genetic testing that indicates a patient’s risk of developing cancer, the new test gives real-time information on the presence of cancer. 

 Monitoring a biomarker like glucose for diabetics involves a lot of needles and pokes. Lessening such burdensome activities could go a long way in helping patients who are already suffering, as well as provide valuable data to the study of their diseases.

 New methods like skin patches that measure biomarkers in sweat are one way researchers hope to reduce this burden and gain valuable insights at a distance. Such patches could be used to diagnose pregnancy, hypertension, or hydration with minimal friction or effort from the patient. 

Cleveland Clinic’s Top Medical Innovations for 2016.

Best Breakthroughs: Top Medical Innovations for 2016

			For decades, pharma and biotech manufacturers have strived to develop transformative healthcare solutions. In the past, critics claimed the industry could not develop a cure because it would “break the business health maintenance model.” However, as the industry stands on the precipice of a new era with a new definition of “cure” emerging, these critics may be right and wrong at the same time.

			Innovators have come forward to develop curative therapies, proving that the industry is interested in moving beyond maintenance therapy. However, global stakeholders are not prepared for the emergence of curative therapies, creating new, and previously unconsidered challenges. Dated funding and reimbursement systems along with the processes that support them are already strained by traditional maintenance therapy.

			This new dynamic has such far-reaching implications that the critics may be accurate in their view of how these types of innovations may push us past the tipping point and “break the system,” or as we now call it, “change the way business is done.” Ahead, we outline several trends that could substantially change the dynamics of healthcare marketing.

In the past, an intervention could be considered a cure if a disease was stabilized and not progressing while the patient continued the treatment regimen. While these therapies are still valuable, a new definition of “cure” has emerged. Some therapies now offer a one-time course of treatment to eliminate the disease with no need for follow-up therapy. In these therapeutic areas, even the availability of these types of interventions raises the bar for all interventions. More than ever, stakeholders may increasingly think of “once- and-done” interventions for stopping, reversing, or eliminating a disease.

 In an environment where patients have the option of a “once-and-done” curative intervention, the concept of competition is completely different. With traditional interventions, a patient may be on maintenance therapy for months or years, but at any time could switch to a new regimen. For maintenance products, pharma and biotech companies can market their products to currently-treated patients and suggest that switching may have benefits.

			With a cure, a treated patient is no longer eligible for therapy because they will no longer have the disease. Assuming that the treatment rate exceeds the incidence rate, the prevalence will decrease over time and the number of patients deciding between potential interventions and/or curative options will decrease until it matches the incidence rate. In the new curative environment, much of the marketing may shift focus toward patients who have not yet selected a curative intervention and away from patients who were previously treated.

In the past, healthcare marketers would demonstrate the potential cost-offsets generated by their intervention using models and simulations. Payers often felt these offsets were theoretical and struggled to identify the true cost savings to the system. With a curative therapy, it may be much easier to quantify the cost of maintenance therapy avoided and the prevention of costs related to disease sequelae. While traditional interventions could theoretically reduce a proportion of these costs, a cure can by definition eliminate all future costs. It is important to note that this creates specific new challenges for innovators, as currently some payers (especially in the US) are looking at the cost savings from an intervention with a focus on the next 2-3 years. In the US, this attitude emerges because patients frequently move between plans and the payer may not recognize the longer-term savings from the upfront intervention cost. Payers may not yet be ready to think about spending a large amount of money in year one with large cost-offsets in every subsequent year of a patient’s life. This leads to another challenge ... affordability. 

Global payers have built budgets that anticipate annual maintenance therapies, and their full budgets are spent on today’s interventions. When thinking of this maintenance approach to healthcare, it becomes difficult to consider spending a substantial amount upfront in year one to eliminate spending on that patient in future years for a given disease. For example, European payers may not have the additional headspace in their budget to afford the curative intervention today, and US payers may not have the long-term perspective necessary to appreciate the cost offsets.

Historically, a new intervention could generate a revenue stream for five, 10, or 15 years or maybe even longer depending on the situation. However, if there were a rush to cure all patients and the cost were paid upfront (as opposed to amortizing or risk-sharing payments), the innovator could capture the majority of their revenue in the first few years post-launch. It is possible that rather than reaching peak sales and maintaining a flat or slowly-increasing revenue curve, revenue could begin to decrease very quickly a few years after launch. This would be true if the cure caused the prevalence to decrease rapidly. If this were the case, the number of patients initiating therapy each year would be closer to the incidence rate rather than the prevalence. It could be possible that the revenue erosion would be similar to generic entry in traditional markets, but caused by a decreasing number of eligible patients rather than reduced market share.

Will there be any patients left to be treated by generics or biosimilars years after the branded launch if the brand eradicates the disease?

 In the US pharmaceutical market, regular single-digit price increases have become the norm. When reflecting across industries for one-time-purchase breakthrough innovations, the highest price is typically at launch. Looking at consumer technology, as an example, manufacturers decrease price regularly to capture customer with lower willingness to pay.

						For example, each new model of a smart phone has a high price at launch and only the most adamant users pay this price. Later, the same smart phone is available at a lower price and appeals to a different user base.

									Purchasers in the first three to six months pay the highest price, and then the price is slightly reduced, which opens a new wave of users willing to pay the new price, and so on until the market is saturated. This dynamic of decreasing price over time may fit the curative market in healthcare as well and could reshape expectations about how the intervention price evolves over time. 

One opportunity for innovators to address the challenges associated with the trends already described, is to set up a payment schedule to space out the budget impact over time. In this scenario, the innovator would receive payments for a number of years after the patient is cured. This would better align the payment for the curative therapy with the cost savings in the healthcare system. As an additional option, the agreement could also include a performance metric where uncured or refractory/ relapsed patients would not have the future payments.

												While there has been much discussion about this idea over the last few years, the details of setting up these long-term agreements has been a challenge. Are curative therapies so different that we need to rethink the global model for healthcare funding and reimbursement and how the industry operates? Perhaps.

															These eight trends only begin to scratch the surface of how healthcare may evolve in the face of new curative therapies. In this era, as in previous ones, it will be the companies who drive innovation and define this future market that will emerge as leaders.

 is Director, Simon- Kucher & Partners. He can be reached at 

The eight trends brought on by “once-and-done” interventions that may transform thinking around healthcare marketing.

Marketing Curative Therapies: Are We Ready?

	Though he comes from a family of pediatricians, Dr. David Dosa, a health researcher and Assistant Professor of Medicine at Brown University Medical School, chose geriatrics. He realized early on that there was a coming healthcare crisis for the elderly demographic. As the US population ages, there will be an unprecedented demand for end-of-life care and services for the elderly from a system that’s largely unprepared to meet it.

It’s his ability to maintain simultaneously a general and a focused perspective regarding the issues of geriatrics and the practice of medicine overall that makes Dosa an interesting physician to profile. More importantly, he brings the clarity of an accomplished, best-selling writer to emphasize the human element that drives everything we face in healthcare. Very much alive to the general trends that make the aging population such a challenge to our collective mandate to promote good health, he still knows the importance of providing a level of care tailored to each patient.

	Dosa cites this belief as the biggest takeaway from his book, 

Making Rounds with Oscar: The Extraordinary Gift of an Ordinary Cat

. The staff at the nursing home in Providence, Rhode Island, where Dosa served as a consulting physician considered Oscar a typical unfriendly, self-possessed cat until they noticed that he had the peculiar habit of cuddling up next to those patients whose deaths were imminent. Although there may have been a 

physiological reason for Oscar’s behavior-one theory is the cat could scent the biochemicals released by disintegrating ketone cells in the terminally ill-the sheer human effect was most prominent, giving comfort to the dying as well as family caregivers and staff.

	As he studied Oscar during his time at the facility, Dosa took this idea to heart-and realized that sometimes the best thing a physician can do for his patient is just to be there and listen. Dosa articulated this view in a July 2007 article published in 

, and subsequently in his book, which was on 

bestseller list for eight weeks and subsequently published in 20 languages worldwide.

	A deep appreciation for the patient as a human being governs how Dosa practices. When asked about his work with vet- erans and with the elderly, he explained that it was the wealth of individual experiences that his patients share with him that makes his work meaningful. “I’m a storyteller, and I like to listen to stories; I love hearing from people. As I said in my book, I like the life well-lived and I like the stories that people have to say.”

	For Dosa, doctors are not merely scientists. A med student who has memorized a textbook but can’t talk to her patients simply cannot do her job fully. Doing the difficult thing and taking the time to learn about your patient is just as much a part of the task of administering care, Dosa stresses. Fostering communication is more than just an enjoyable aspect of his work, however. He believes that spending time reaching out to others to talk and to listen will be the saving grace of geriatrics as a clinically relevant profession in medicine.

	Specific elements of the health delivery and financing system that make it unable to properly handle geriatric patients are simply an indication of larger social issues and deficiencies. Dosa believes that the healthcare system is in the process of reorienting itself towards a greater focus on holistic care and patient well being across the board, not just in geriatrics. The 2010 Affordable Care Act (ACA) reform necessitates new healthcare models because science has been demonstrating that the way we currently provide care-the failure to rely on biomarkers to render treatments more precisely, an overreliance on standardized institutional procedures, and silo thinking among physicians, administrators, and other service providers-is not good enough.

	Currently, one of the biggest problems Dosa sees in geriatrics is that doctors are paid to perform a specific service, regardless of quality or whether it is even necessary for the patient’s health. Cardiologists order EKGs, radiologists perform scans, and physical therapists conduct physical therapy all because the care delivery system promotes this kind of specialization and pays doctors to provide acute care within their field of expertise-even when it might be better not to.

	Patients in end-of-life care situations are disproportionately affected by the current system. “When you ask older folks what it is that they want in terms of their healthcare, they want quality of life,” Dosa says. “They want to be surrounded by family. They want to die at home, surrounded

 by family. They obviously want to live a long life and a happy life, but they don’t necessarily want to sacrifice quality for quantity.

	“Unfortunately, our healthcare system rewards doing rather than not doing. The system rewards treating rather than not treating, and it doesn’t reward communication. People don’t get paid to communicate, to sit down and ask, ‘What is it that you truly want?’ I think that’s the central dysfunction with our healthcare system today.”

	For Dosa, listening is where the care begins, especially with elderly patients where studies suggest that fewer procedures and tests make for a better quality of life.

	But taking the time to find out who patients are as individuals is no easy task, in large part because individuals are so, well, individual. It takes time and energy to nuance how one provides care around the different traits and problems of the patient. It’s much easier to treat the symptom without addressing the larger pattern of disorder, and even easier to forget whether this treatment is in line with who the patient is and what they want.

	Dosa is adamant that this mindset needs to change. “Older people have multiple medical problems and they have multiple chronic comorbidities, and that requires a different approach. It requires that doctors and healthcare systems speak to each other so that people don’t do things to a patient that are counterproductive just to conform to a guideline.”

	Dosa offered the idea of having a “captain of the ship” for patients suffering multiple comorbidities as a solution to this issue. Such a person could manage the nitty-gritty task of making sure the patient’s goals are being met but also making sure that the patient’s multiple physicians are in communication with one another, too.

	No longer working in the nursing home facility with his feline companion, Oscar, Dosa sees his role evolving as a teacher of geriatrics for med students and other doctors. When asked what we can do about the relatively few geriatricians compared with the large population of geriatric patients, he responded that the solution is not to do the simple thing by growing the field of geriatric practitioners because, to a certain extent, it’s too late for that.

	“It’s more about teaching the cardiologists and the ophthalmologists and the primary care doctors to pay more attention in treating their aged patients and to be geriatric savvy,” says Dosa.

	“I view my role, now, as more in a teaching capacity to make sure that the next round of urologists understands what those urological drugs do to patients who perhaps have cognitive impairment, that they are able to manage patients with chronic multiple comorbidities when they do surgery, and that they understand what it is to treat a patient with delirium or dementia.”

	Dosa believes that for doctors to have a more comprehensive understanding of their patients requires that they have a more comprehensive understanding-or at least a greater appreciation-for the other branches of medicine. And when doctors are armed with this knowledge, they can focus on their patient’s health holistically, giving them the outcomes they both require and deserve, Dosa says.

	These new expectations are not limited to geriatrics, however. Rather, Dosa believes that changing expectations among the population as well as a shifting regulatory environment will drive change. The federal Center for Medicare and Medicaid Services (CMS) is working on healthcare quality measures on which to base reimbursement. This effort is being imitated everywhere in healthcare as a part of a general effort to reduce bloat in an unwieldy system burdened by the recent influx of millions of newly insured patients. The ACA is incentivizing the launch of new accountable care organizations to develop more integrated systems of care. Dosa affirms that though the newly insured may have trouble finding enough doctors at first, this shift away from fee-for-service will be a boon to the country at large.

	And where does the pharmaceutical industry fit into this new landscape? Dosa affirms that the industry must be part of this new landscape, though it may have to adapt its business model to do so. As recent studies suggest, drug therapy must be more oriented towards achieving a larger health outcome. Dosa sees clinicians like himself as an under-utilized resource to this end.

	“The notion that the physician is no longer the driver of decisions in healthcare has been overstated,” he says. “Closed formulary or not, pharmaceutical companies looking to understand where the gaps are in available treatment options need to work with those on the ground. No one is in a better position to understand what’s needed for the health of patients than the doctors who work with them.”

	These new expectations as well as the newly insured population create a variety of opportunities. Many needs are not being met by the current 

healthcare system, needs for which many people are willing to pay out of pocket. Dosa hopes that business will step in and embrace this new environment, finding ways to make it economically viable.

	“There’s certainly a business opportunity here for an entrepreneur to come into the mix and negotiate with government payers and insurances and help in this situation,” he says.

	First forays into this world already exist with some regional HMOs providing compensation to doctors with the money saved by performing preventive medicine, shifting to a so-called fee-for-performance model.

	Dosa understands the difficulty that implementation of these ideas presents, however. It involves individuals, companies, and regulators moving away from what is easiest or simplest towards what’s best. Sometimes that means that researchers need to make clinical trials messier and more nuanced. Sometimes that means that physicians will have to make time to pick up the phone and call her patient’s other doctors.

	And sometimes that means taking the time just to be there and listen to a patient because there are other and better ways to care for patients than we do currently.

	“Doctors are human beings. They have the same hang ups about death and what we can do for patients,” Dosa says. “But we need to acknowledge limitations and decide, through conversation and communication, at what point is being there and letting go more important than providing treatments for specific ailments.”

	This sentiment doesn’t have to be limited to doctors, however. Among government regulators, scientists, and pharmaceutical executives, there is room for all of us to do the difficult thing and acknowledge our limitations in order to work with one another to better the way we practice care in this country and the human beings that live in it.

Dr. David Dosa received his M.D. from George Washington University in 1998 and his MPH from the University of Pittsburgh in 2003. His book, Making Rounds with Oscar: The Extraordinary Gift of an Ordinary Cat, has sold over 100,000 copies and has been published in 20 languages worldwide. In addition to practicing geriatrics, he has performed research in many areas related to nursing home care, including pain control and pharmacoepidemiology. The recipient of many awards, he recently won a Career Development Award from the Veteran’s Administration to study medication administration in nursing home facilities. Currently, when he is not busy conducting research at Brown University’s Center for Gerontology, he spends time on his latest work, a book of fiction about finding love late in life. Dr. Dosa can be reached at david_dosa@brown.edu    

Features

Pharm Exec talks with David Dosa, a leading physician in geriatric medicine, whose famous work with a cat named oscar in end-of-life diagnostics became the stuff of therapeutic legend.

The Healing Art in Medicine

	In today’s biopharma ecosystem, drug distributors occupy a position very close to the ground, with a profile so low it is often taken for granted. But the distributor’s traditional task in delivering quality medicines safely and reliably to the point of sale is growing more prominent as personalized treatments proliferate and medicines become more complex. Not only are distributors bulking up like the rest of the healthcare vertical, a strategic realignment is underway, led by a much closer identification with the patient; an emphasis on customized, value-added services that span the entire drug supply chain, from pre-registration to end of life-cycle planning; and a commitment to achieving truly global scale and reach.

 first began tracking changes in the drug distribution world back in 2011, when we featured a conversation with the sector’s newest CEO at the time, Steve Collis of 

AmerisourceBergen. Four years later, we met up again with Collis at October’s 

, the company’s annual feedback confab for 500 of its biggest customers. In a wide-ranging talk, Collis explains what he thinks those customers really want from distributors; offered tips for a successful M&A process and restructuring to what is now a fully globalized business; his personal commitment to a flaw-free record on safety and compliance, a most critical metric in a business where no news is good news;  and his team’s key achievements in positioning the company for future growth through a precedent-breaking partnership with Walgreen’s/Alliance Boots as well as the entry into adjacent businesses designed to expand the company’s service offerings. Finally, Collis offers up suggestions to his biopharmaceutical CEO peers on tackling pricing and reputational challenges-and how distributors can help.   

We meet just prior to AmerisourceBergen’s most important event of the year, ThinkLive, where you and others on the management team have the opportunity to engage directly with more than 500 of your key customers in biopharmaceuticals. What’s the current state of the relationship? Any insights for Pharm Exec readers on the company’s strategic objectives in the year ahead?  

AmerisourceBergen has built a strong business around the proposition that we are the essential supply and service intermediary between our customers, who develop and market medicines, and the patients who benefit from them. We recently unveiled a new corporate slogan-“AmerisourceBergen, where knowledge, reach and partnership shape healthcare delivery”-to emphasize this connection. There is no better way, in one sentence, to summarize what our 18,000 associates worldwide do every day.   

 discussions with customers will focus on three distinct themes that we believe best characterize our business: (1) improving patient care; (2) increasing product access; and (3) enhancing supply chain efficiencies. With specific reference to access, we want to position AmerisourceBergen not only as a service provider working to make medicines affordable and reimbursable to patients, but also as a reliable supplier of medicines, delivered safely, at low cost, when and where our patients need them.

	Another issue I intend to raise with customers here at 

 is cooperating more closely to maintain those market-oriented features of the US health care system that provide superior, high-quality care for patients. I am experiencing this first hand with my mother, who lives in Canada and is undergoing treatment there for cancer.  Canada has a very good health system, but when I compare clinical treatment protocols with the US, I see how much patients in the US benefit from a flexible and patient-friendly care environment. Together with our customers, AmerisourceBergen is constantly adjusting its operating standards to register that “voice of the patient” and provide them with more options. We want to work with all our stakeholders and customers to preserve the core values of the US system: diversity, choice, and flexibility.  

AmerisourceBergen is the second largest drug distributor in the US and holds the top spot in the growing specialty distribution segment. What are you doing to maintain your leadership in the drug supply chain? Can you point to increased efficiencies since you became CEO in 2011? 

Our biggest accomplishment in this space is the comprehensive working partnership we have forged with Walgreens/Alliance Boots, helping to structure and operationalize the transition to a globally integrated retail pharmacy chain. Our partnership has unlocked enormous value for them-enhancing working capital, upgrading consumer service, expanding product access, and, of course, scoring multiple gains on financial metrics and outcomes. What is notable about the partnership is that it includes an innovative sourcing contract that has both of us working out of adjacent HQ facilities in Bern, Switzerland. Our president for global sourcing and manufacturer relations, Peyton Howell, is now located in Bern. Her presence and expertise in day-to-day troubleshooting has put the exclamation point on the commitment I made when we spoke four years ago: to match-and exceed-the pace of our big pharma customers in globalizing the AmerisourceBergen business.  

	Other accomplishments include the successful private-label distribution pact we have secured with BluePoint; opening a national replenishment center in Columbus, Ohio, where many brand manufacturers are bringing overstock inventory directly to us to redistribute; and the expansion of our Consulting Services business to build competencies in drug adherence and patient access programs while exploiting decision analytics and other information opportunities, such as longitudinal data management for oncology practices and creating patient registries to build real-world evidence and track public health outcomes.

	The first acquisition after I took over as CEO, World Courier, a clinical trial logistics enterprise, has grown significantly; it now operates in 50 countries.  The AmerisourceBergen Specialty Group drug business, where we deal with patients with complex conditions directly rather than as a third party, is now the largest in the US. We are focused on building our specialty drug franchise in selected countries outside the US, including Canada and Brazil, where last year we acquired Brazil’s biggest publicly-held retail drug distributor, Profarma. The acquisition will serve as a long-term base for further expansion in this promising, high volume growth market.   

	Next, we have entered an entirely new business-animal health-with the $2.5 billion acquisition early this year of MWI Veterinary Supply, the largest US and UK distributor of pet care and farm animal medicines. Again, this deal shows how we are committed to extending customer reach; many of the biggest biopharma firms that we do business with are also active in animal health. They have had close relations with MWI stretching back decades.   The vet business is a growth sector and has a long record of profitability. MWI will add to the number of platforms on distribution and sourcing we can offer to our biopharma customers.  

, we are announcing the intent to acquire PharMEDium Healthcare, a leading supplier of customized, outsourced sterile compound drugs to hospitals and other acute care facilities here in the US. Such medicines are not commonly procured through normal commercial channels, and are supplied by PharMEDium under the highest quality, efficacy, and safety standards. The acquisition fills a critical gap in pharmacotherapy and will allow us to increase our ability to provide reliable, top-of-line innovative solutions that help patients-and where evidence of abuse by marginal players in the field remains a matter of public concern.  

When we spoke in 2011, you pledged that the record of AmerisourceBergen for reliability, safety, and ethical integrity in the drug supply chain would continue uninterrupted during your tenure as CEO.  Can you vouch for this record and explain what the company has been doing to strengthen a compliance culture, particularly as it expands into new activities and businesses? 

That’s an interesting question. My answer is that the best evidence of successful compliance on quality, safety, and ethics in the supply chain is that we are invisible on the issue. When it is 

 an issue. It means that we are always active behind the scenes so that our customers and patients actually take it for granted that the right product is available at the right time, in the right quantity and ready for safe use at the lawfully contracted price. That the US has a very safe supply chain is no accident. We work closely with regulators, are constantly in touch with manufacturers and other customers, and devote enormous time and resources to anticipating what motivates the patient. We don’t leave anything to chance. 

	One challenge we have faced over the past several years is confronting irregularities around the utilization of controlled drug substances.  I think we have done an outstanding job in working with key stakeholders, especially government at both the federal and state level, to help get this problem under control. As a distributor, AmerisourceBergen does not control the prescription of controlled substances, but we have a responsibility to the public and the communities we serve as well as to the manufacturers whose products we distribute. I have met with governors and legislators of many states to brief them on our practices. I have assured them that not only is the drug supply chain safe, the bad actors in the mix represent a very small segment of the trade and their misdeeds can be countered with proper corrective measures.  

	In studying the issues, we have developed expertise in the management of controlled substance abuse, including the deployment of advanced analytics to track incidences of abuse and informing regulators and legislators on best practices to keep them ahead of the game.  In fact, we were instrumental in supporting the Drug Quality and Safety Act signed by President Obama in November 2013, which introduced a federal mandate for a strong “track and trace” mechanism to monitor the drug supply. Among other things, the law established sterile drug compounds as a separate class of pharmacy, under the 503(b) designation. It wasn’t our focus initially, but the law created a new business opportunity for us, leading to the announcement at 

In the third quarter earnings call with analysts, you stated that you “have never been happier" about AmerisourceBergen’s relationship with customers. Why-can you explain? 

I was referring to the systematic way that we are working to understand, serve, and anticipate the needs of our customers. We are using the RFP (request for proposal) contracting process as an opportunity to dig down and learn more about their motivations and priorities over the long-term. We now look at every customer as a strategic account, geared to establishing where AmerisourceBergen can add value. We desire a more or less permanent relationship rather than being driven solely by the contract cycle-it’s a continuous dialogue. We strive to cover everything, from the logistics of clinical trial management to coordinating the product launch, choosing respective channel strategies, and setting 

reimbursement, right on to end-of-life cycle positioning, post-patent expiry.  

	There is a tendency in every big company to boast of its mastery of technology. That capability we have, but actually I am most proud of our human capital. June Barry, our EVP of human resources, recently told me her job was not to administer benefit programs but to understand what motivates people, with the aim to institutionalize those human characteristics that contribute the most to the company’s success. I am particularly proud of AmerisourceBergen’s selection by 

 as one of the best places to work in Pennsylvania, in each of the last three years. That would never have happened in the old days, just a decade ago. It represents how far we have come. 

Has a distinct corporate culture helped drive this change? You might be familiar with the adage “you can copy a company’s strategy, but never its culture.”

Culture is important if it contributes to a rise in human potential within the organization. AmerisourceBergen has what I call a respectful culture. This has been immensely helpful as we took steps to grow our business through acquisitions. I am a Board member of a company that is being acquired. What I observe in that transaction is an undue focus on getting people positioned to assume key positions in the combined enterprise in order to assert control over the brand, sales, and compliance. It’s all about the little stuff. We look at the situation differently. We acquire great companies, not products. We focus on leveraging new sources of knowledge, great customer relations, and the additional services that add to the value proposition for our customers.  In addition, the companies we acquire tend to be differentiated from the competition, which allows for higher margins. Consider our three most recent acquisitions: World Courier, MWI and PharmMEDium. Each was the undisputed leader in their business, with first-in-class products and a strong service orientation. Most important, we did not compete in their lines of business when we purchased them, so it was clearly a value-added transaction for us.

	What it means is this: we strive to learn from the acquired company, find common ground with its culture, and retain top talent. The aim is to build a great marriage instead of stripping assets. We don’t look for a pre-ordained divorce. And the evidence shows this approach works. For example, the vast majority of the leadership and rank and file from World Courier are still with us. Jim Cleary, CEO of MWI during its tenure as a publicly traded company, is now serving as a new member of our executive management team. It starts with our own internal culture of respect. Our message is “You know your business-tell us. Teach us.”   We pursue a strategy of inclusion, from the start of due diligence and continuing beyond post-merger integration of the business.

How do things stand on the pace of AmerisourceBergen’s globalization efforts?

The company I started with years ago was, to be honest, a narrowly US-centric organization. As a native of South Africa, I stood out as an anomaly.   Things are different today. Just after becoming CEO, I recall convening our “Day One” meeting with World Courier’s management at the Convention Center in Philadelphia. I got on the elevator preparing to meet all those new colleagues and was greeted by a man with an interesting accent that I could not place.  He said “I’m Hendrik, the country manager for Finland.” I got off the elevator, paused, and said to myself “never would I have thought I’d be at an AmerisourceBergen meeting where someone introduces himself as leader of our business in Finland.” It was really an “ah ha” moment for me.

	Now, however, it is a common occurrence-World Courier, for example, has opened the door for us in 50 countries outside the US. Recently, I chaired the company’s first Global Human Resources Summit, which showed in stark terms the increasing geographic diversity among our 16,000 colleagues. Every country represented presented me with a modest but distinctive gift highlighting some aspect of their culture-Australia, the original home base of World Courier, offered up a case of Fosters lager. That hit home to me how vital these relative newcomers to the AmerisourceBergen family are going to be to our future.

	
	This is not to say that the absorption process will be flawless. We are confronting some stiff headwinds in international markets. The dollar is strong at the moment in currency markets and this has the potential for a negative impact on earnings.  Economic turmoil in many emerging countries is lowering growth expectations. Hence, we have had to scale back on performance expectations for our Profarma specialty distribution business in Brazil. The slump in the exchange value of the real against the dollar is a big problem at the moment.

	Another issue that requires some caution is adhering to our long-term values, which are focused entirely on the welfare of our patients. This we see as a fundamental obligation, one which we share in common with the manufacturers.  Value is, thus, a bigger concept than simply increasing the return to shareholders. And it is doubly important we maintain that centricity around the patient interest in all countries where we do business, especially those with strong government influence over local health practitioners and the delivery and financing of health services. I am thinking about countries like China. The industry has experienced issues with scandal and provider corruption in foreign markets and so foreign investors need to be very careful about their local policies and procedures.

In other words, you are talking about maintaining high standards of compliance and ethical business practices-no exception.

Yes. We have to work close to the ground, and stay aware of all the nuances in local sales practices, including offers of entertainment. Having World Courier come on board, with its active presence in 50 countries, proved instrumental in teaching us about local conditions, including who the good-and bad-players are in the field. My predecessor as CEO, David Yost, described it this way: “the deals you don’t do are as important as the deals you do.” There are numerous tie-ups we walked away from because we concluded there was a culture that tolerated or even encouraged behavior that our own standards could not condone. It is critical for AmerisourceBergen that our local partners are reliable, know the ins and outs of the local environment, and operate with integrity. If we conclude that such a culture is not present in a potential partner, we thank them and walk away.

What is your assessment of the future of the US and those other “mature” country markets in AmerisourceBergen’s global strategy?

The US is and will remain the core of our entire business. It’s a very active area of endless potential for us. Our forecasts indicate the US will stay the biggest and fastest growing market for biopharmaceuticals in the foreseeable future. It still leads the world in product innovation as well as the ecosystem that sustains it. And the US dollar is strong-the world’s reserve currency.  

	That said, we are committed to growing the relationship with Walgreens Alliance/Boots, to capitalize on its extensive platforms, networks, and services around drug distribution in Europe. We need to spend more time thinking hard on how we partner with them to raise our game and compete more effectively. Ornella Barra, who serves as EVP of Walgreens Alliance/Boots, is joining our Board. She will give us an important, well-connected, and informed point of view on doing business with this, our largest customer. Alex Gourlay, the president of Walgreens, is another source of advice and expertise. His energy is formidable and entirely dedicated to helping us move this complex relationship forward.

What is AmerisourceBergen’s view on the future of the generic drugs business? A big part of the segment is subject to progressive commoditization, but there are pockets of opportunity in branded generics. How does the promise of biosimilars fit into your growth strategy?   

Generic drugs are a critical part of our business. The value they provide is very important to our customers and patients. It’s also a dynamic business that is changing in significant ways through consolidation. When we met in 2011, I would not have said to you that generics account for 85% 

of prescriptions written here in the US. No one expected that level of growth. We are also experiencing some price inflation in the segment, with about one out of every five products posting a price rise during the past several quarters. In addition, we have had to scramble to respond to some massive swings in the generic launch cycle, with many new entrants coming on to the market at roughly the same time. That’s a logistical challenge, but frankly it is one we are happy to meet because it is good for competition and great for the patient. The market will be seeing a fresh windfall of lower-cost products as most of the early biologics cede their exclusivity through the end of the decade.

	The arrival of FDA-approved biosimilars here in the US is reflective of this trend.  It is a long process.  The exact regulatory pathway, particularly on the interchangeability of these products at the pharmacy level, remains to be clarified. In addition to legislative complications at the state level, I expect it will be a good while for legal issues to work themselves out through the courts. Drug companies are experienced in using the law to their own ends, from both an offense and defense perspective. Hence, in my opinion, we will continue to see some delay in phase-in of the biosimilars option, compared to other products. 

	Nevertheless, AmerisourceBergen is poised to work with manufacturers to address the development, launch, and market take-up challenges for this new class of products. We’re partnering now to bring the first biosimilar to market, and we intend to work with other companies down the line.

So you are confident that AmerisourceBergen has a solid value proposition around biosimilars that will attract new business?

Yes, without hesitation. Our capabilities embrace the needs of both the incumbent manufacturer as well as the biosimilars enterprise. Most players in this space are global multinationals that already have extensive ties to us. Two of our top executives-Peyton Howell and Bob Mauch, president of the AmerisourceBergen drug division-have extensive backgrounds in field-based reimbursement programs, price contracting, market access, and patient assistance programs-that respond to the basic requirements for launching a biosimilar. In addition, AmerisourceBergen’s lead role in specialty products, a business run by James Frary out of Frisco, Texas, gives us solid expertise in physician-administered medicines. We find such physicians to be early adopters of new products and are very receptive to innovations that add to the treatment options they can provide to their patients. Personally, I believe the acceptance rate around these products will be high, once they finally get launched. And a positive reception will also help create a favorable climate for reimbursement. In short, it’s a short distance to us for anyone seeking to commercialize a biosimilar product.

Is there anything that keeps you up at night about the complexities in the generic space? 

Overall, we are very happy with the performance of the generic business, particularly when I contrast this to the supply challenge AmerisourceBergen had to confront just after I became CEO. We had to address a significant shortage of injectable drug generics that proved to be a big problem for our customers. It was a reputational issue for us, because our license to operate depends on a guarantee to the customer that a product will arrive where and when it is needed, without fail.

	As I have said before, AmerisourceBergen functions best when it is invisible. Having to cope with a product shortage that we are not prepared for is not conducive to that aim. I have spent a lot of time since then to improve our capacity to anticipate any problem in the supply chain and to execute corrective measures quickly, with minimal impact on our customers and patients. I’d say that is one of my most important accomplishments to date.

When we first spoke you cited the importance of raising the drug distributor’s profile in public policy debates, noting that a low level of political engagement had led to AmerisourceBergen missing out on some important reimbursement provisions of the signature health reform exercise, the 2010 Affordable Care Act. What is your view on the political climate confronting the industry today? How well is the biopharmaceutical industry doing to manage its growing exposure to reputational challenges?

The record of the biopharmaceutical industry in developing medicines that save and extend lives is a remarkable achievement. At AmerisourceBergen, we see firsthand how these therapies are productively deployed in the healthcare system to improve the state of health for millions of patients. We are proud to be doing our part, in partnership with the industry, to deliver the positive outcomes that providers, patients, and the political leadership of this country expect. It is critical that we retain the policies that have contributed to making the US the global center for life sciences innovation. The danger is, if we don’t, the US will face more global competition from countries that want to use industrial policy to take that title away from us.   

	There is so much focus today on the pricing of pharmaceuticals. The truth is that medicines account for only around 12 to 13% of total healthcare costs. The public is not aware of this fact. Drug therapy is also one of the most efficient contributors to the health system, actually lowering the costs of other types of care, such as hospitalizations. What would physicians do without the ability to prescribe thousands of products that safely treat and cure an innumerable number of ailments? Such fundamental facts are obscured, in part, because of DTC advertising focused on “lifestyle” conditions that appear to be trivial. But we know the biopharmaceutical business-they are, to us, the folks downstairs. And we believe the industry is as committed to quality patient care as we are. Medicines, when used correctly, do something essential: they improve wellness.  The options now available to achieve this make today an unprecedented, extraordinary time for the average patient.   

Most politicians familiar with healthcare look at distributors like AmerisourceBergen as a key driver of system-wide efficiency. The biopharmaceutical industry has evidence to make the same argument, but it does not stick. Why is this-could it be that distributors can also point to much lower margins compared to the profits retained by drug makers?

I visit many political officials in the course of my work. It is true our business is not commonly associated with extravagant returns. Our overhead is quite low compared to the rest of the healthcare community as a whole. It is wrong, however, to assume that high margins are a sign of inefficiency or system failure; it simply requires an extra effort at explaining where the added value is. It is also very important today for all private enterprises engaged in healthcare to define its principal stakeholders in the broadest way possible. Yes, it is important to be responsive to the interest of shareholders in maximizing profit, but we are also giving more prominence to the patient as well as the more diverse communities we now encounter as our business expands. Two years ago, we launched a Foundation to raise our profile in places like inner-city Philadelphia, where, among other things, we are funding a community-based independent pharmacy operating at a Project HOME’s health care wellness center in one of North Philadelphia’s poorest neighborhoods. Last week, I hosted the inaugural event for a new industry initiative with the American Cancer Society, called CEOs against Cancer, where we raised over $1 million for cancer research. All of this work helps us counter the claim that profits in healthcare simply reinforce the larger problem of economic inequality in our society. The correct perception is to see us as a source of economic opportunity-and better health.   

Looking ahead, from a strategic standpoint, who will AmerisourceBergen’s key customers be in 2020? Do you see any disruptive changes to this essential business demographic?   

I never could have predicted in 2011 that today we would be in the animal health business. I think it’s vital to a company’s growth momentum to be open to forming new relationships. There are so many shared parallels among our many businesses, such as between our 

network, independent veterinary practices, and the community oncologists. The parallel is that each of them is a small player competing against behemoths. For example, if you are a group of oncologists practicing independently in downtown Philadelphia, you have little choice but to confront that elephant in the room called Penn. What are the tools the practice will need to be successful in differentiating itself from one of the country’s largest and most prestigious academic teaching hospitals?  

	AmerisourceBergen Specialty can help answer that question. We offer reimbursement modeling, predictive analytics, and customized medication adherence programs like PrescribeWellness. In the future, I expect we will be doing more for the small oncology practice in areas like proactive communications with other providers, billing and contract systems management, and KOL value proposition strategies. What is most interesting to me about this is the ability to spread learnings to all our other businesses. Jim Cleary, who runs the MWI business, is now looking at how we can apply the community oncology support program to veterinarians in small group practice.

	Look at it from a bit wider perspective. We know that the average patient we serve is getting older. Patients are living longer and are healthier, in part because they are taking more medicines. When they do get sick, they go to hospitals, where they will receive sophisticated, high quality drugs that must be labeled correctly and prepared in a sterile, infection-free environment-that’s where the value of our new acquisition, PharMEDium, kicks in. And guess what? Our patient’s pets are living longer, too, with chronic conditions that will require more maintenance therapy. That’s what we want to be in this business as well.

	The message here is that we will keep on adding businesses, technologies, and capabilities that make sense to AmerisourceBergen’s customers and patients. I think we are very good at integrating new opportunities; it’s now an ingrained part of our culture. For many years, AmerisourceBergen put most of its free cash flow into stock buybacks, which is good for our shareholders, yielding a solid short-term return. Today, I think it’s much better to invest in a good business because the value of that transaction is locked in forever. It creates the growth dividend necessary to become a truly global enterprise-that’s the end game. It will define my legacy. 

's Editor-in-Chief. He can be reached at 

A Pharm Exec conversation with AmerisourceBergen CEO Steve Collis

CEO Snapshot: Steve Collis, Four Years Forward

	It has become open season on pharmaceutical companies, as Congressional committees ramp up industry oversight and political candidates on all sides look to win points by attacking

 drug pricing and marketing. A sign of the times is that Republican presidential hopefuls have joined the fray, not willing to concede the field to Hillary Clinton and Bernie Sanders.

	Sen. Marco Rubio of Florida and former Florida governor Jeb Bush cite the need to control drug costs as part of their proposals to repeal and revise Obama’s Affordable Care Act. One long-standing GOP theme is to lower drug prices through FDA “reform” that speeds more new drugs to market and, thus, promotes competition. Republican candidates still stop short of urging direct government intervention in the market and acknowledge that biopharma innovation saves lives, but now they’re blasting price hikes by industry “bad actors” and urging more transparency in product pricing.

	In addition, the Republican leadership in Congress is jumping on the bandwagon. In the Senate, Special Committee on Aging chair Susan Collins (R-ME) has joined with Democrats in investigating drug pricing practices, starting with a December hearing focusing on Valeant and Turing Pharmaceuticals and two other firms. The House Judiciary Committee recently held a hearing on the role of pharmacy benefit managers (PBMs) in ensuring access to affordable medicines, and the House Oversight & Government Reform panel has announced hearings on drug prices early next year. 

	Although Republican drug-pricing complaints may remain muted during the GOP primaries, they will heat up in next year’s presidential campaign, as Democrats continue to ramp up the rhetoric against pharma price gouging. House Democrats have formed a special task force to press for “meaningful action” against skyrocketing drug costs. And the Obama administration weighed in with a public forum last month on the impact of drug price hikes and breakthrough therapies on healthcare spending and how utilization management and value-based purchasing strategies may affect patient access to affordable therapies.

	The danger of the escalating attack on pharma outlays is that policymakers will move beyond drug reimbursement and coverage issues to broader “reform” of industry practices and policies. One bi-partisan proposal in 

Congress, for example, seeks to expand the scope of the Open Payments program to require pharma reports on payments to a wider range of health professionals. The Trans-Pacific Partnership agreement (TPP) and other trade pacts also may lose support among those who consider the trade deals overly protective of pharma intellectual property rights at home and abroad.

	Enforcement officials are examining more closely competitive factors related to industry marketing and distribution practices, as seen in the recent disclosure of a Justice Department probe of pricing strategies on products marketed by Eli Lilly and by Merck. Industry mergers and acquisitions already face added scrutiny related to potential impact on product pricing, along with the implications of tax inversion deals.

	Widespread anger over the spreading opioid abuse and overdose epidemic, which is killing thousands, has prompted state and local government lawsuits against manufacturers for over-promoting the painkillers. Patient advocates and cancer groups insist on the importance of ready access to necessary pain treatments, but health authorities blame industry marketing for encouraging excessive prescribing and dispensing.

	One effect of the anti-pharma campaign is to delay action on the 21st Century Cures legislation, as questions emerge about the value of developing new medicines that may be too costly for many individuals to access. That has slowed efforts in the Senate to craft a companion “Cures” bill and dimmed prospects for provisions in the legislation that provide added incentives for drug research and testing.

	At the same time, FDA may become more entangled in access and competition issues than it likes. Its oversight of pharmacy compounding, for one thing, may involve it in determining the basis for a large-scale compounder to produce a competitor to Turing’s costly antiparasitic treatment.

	These developments overshadow important biomedical research advances and threaten to undermine the accelerated development and approval of important new therapies, particularly specialty treatments for rare diseases that often carry steep price tags. FDA approved 41 new drugs and 10 biologics in 2014, and this pace has continued in recent months, largely due to regulatory flexibility and expedited review programs.

	The agency’s Patient-Focused Drug Development (PFDD) initiative is considered a great success in encouraging more risk-based consideration of new treatments for serious conditions. Yet there’s mounting criticism that some breakthroughs come to

 market with insufficient safety information, and that patient advocates are overly influenced by industry funds.

	The promise of greater access to less costly biotech therapies has generated widespread enthusiasm for developing new biosimilar therapies, and an important milestone this past year was FDA approval of the first product in this category, Zarxio from Sandoz. But additional biosimilars have been slow to reach the market, raising questions about whether FDA is being overly conservative in requiring data to document comparability of biosimilars to reference products, and if innovator companies have too much influence over key FDA policies for biosimilar labeling and naming.

	Biopharma companies also played an important role in developing new vaccines and treatments to combat the Ebola virus, working with public health and research organizations to accelerate product formulation, clinical testing, and manufacturing systems. Despite the value of the industry’s role in providing treatments for lethal diseases around the world, companies continue to face criticism about medicines being unaffordable in poor countries.

	Many of these issues stand to re-emerge next year as FDA and industry negotiate the next version of the Prescription Drug User Fee Act (PDUFA VI), which has to be reauthorized in 2017 to keep industry payments flowing to support FDA oversight of drugs and biologics, as well as fees for medical devices, generic drugs, and biosimilars.

	All stakeholders look to continue programs for integrating patient perspectives into drug development and regulatory decision-making, while also examining strategies to ensure the long-term stability of the fee programs, to make funding more predictable for FDA, and to enhance investment in FDA information technology and the agency’s workforce. But hopes for quickly enacting a “clean” user fee reauthorization bill have faded as the political rhetoric heats up.

's Washington correspondent. She can be reached at 

Drug pricing backlash threatens regulatory reform, R&D advances

Pharma Caught in Political Crosshairs

, which follows the epic rise and fall of drug kingpin Pablo Escobar, is both a blessing and a curse for Colombia, my guide tells me. Like 

 immortalizing negative Italian mafia stereotypes, Narcos once again reminds the viewer of the country’s corrupt and violent past. The idea of Medellín or Bogotá as dangerous destinations for business or leisure is alive and well.

	The pros of crafting and publicizing the show include, of course, exposure for the country and additional industry with film crews and production budgets going towards the nation’s economy. But perhaps more importantly, my guide explains, the show and the financial investments that have made it possible may represent a bigger story of the country’s new vibrancy. Netflix has partnered with Telemundo on production of the show, a move that could position the Internet streaming service to do further work in Colombia and the region. It’s one thing when members of established industries like oil and mining firms set foot in an emerging country, but for an entrepreneurial, disruptive tech entity like Netflix to show interest, as a vote of confidence, this is an entirely different piece of exposition to the nation’s economic narrative.

	Perhaps the entertainment and biopharma industries agree on the potential of the emerging Latin American market. A swelling population with a growing middle class will have cash to spend, be it on their healthcare or on streaming videos. Certainly, the conservative, lumbering life sciences industry should take notice of the hip, nimble Netflix as it positions itself on the continent.

	As an entry port to Latin America from North America, Europe, or Asia, Colombia’s geographical positioning makes clear sense for accessing a region that seems remote and exotic. Its Northern Hemisphere positioning gives foreign companies a central hub with spokes to the rest of the region. A flight time of around five hours to Mexico City and Sao Paulo, or to New York, illustrates this convenient arrangement. And for bulk shipping, its setup with ports on the Caribbean and the Pacific are a clear advantage over the rest of the continent.

	As other countries with economic development in mind, the government seems more than willing to roll out the yellow, blue, and red carpet for modern industry. Enticements like free trade zones, duty free importation of machinery and raw materials, income tax deductions, and job creation incentives would be well received by any CFO or accountant walking the international floor at the yearly BIO convention.

Senior Editor Casey McDonald visits with industry and regulatory officials in Bogotá to discuss colombia’s strategy for growing its life sciences enterprise, and whether it can be a stable force amid the region’s historically challenging macroeconomic and political fluctuations.

Pharmaceutical Executive-12-01-2015

Defining Value: The Payer Perspective

Best Breakthroughs: Top Medical Innovations for 2016

Marketing Curative Therapies: Are We Ready?

The Healing Art in Medicine

CEO Snapshot: Steve Collis, Four Years Forward

Pharma Caught in Political Crosshairs

Colombia: Portage to Latin America?

From the Editor: Demographic of Distress

A Discordant Bandwagon