Speeches & Presentations

Translating Science Into Hope
PhRMA Annual Meeting, Chairman’s Welcome

John C. Lechleiter, Ph.D.

Chairman, President and Chief Executive Officer — Eli Lilly and Company

April 11, 2013

San Diego, California

Good morning, everyone. It is my honor and my privilege as Chairman of PhRMA to welcome you this, our annual meeting. Our PhRMA staff has done a tremendous job in the conception, the design, and I think you will say the execution of this event. It is a massive, annual undertaking but they pulled it off once again and I am really looking forward to all that is in store for all of us over the next two days.

Of course one of the best parts of our annual meeting is just getting together with so many colleagues and partners from across this great industry that we participate in. It is also a great opportunity to share ideas and perspectives with so many others who have a role and a stake in advancing our work….patient and consumer advocacy groups, healthcare providers, research scientists, and partners in the pharmaceutical value chain as well as the media. We thank you all for joining us.

It is good to be back again after a challenging but productive year to celebrate the work of biopharmaceutical science, translating science into hope and to gain new insights and inspiration for all of us to carry on this important work.

Amid all the obstacles we face in our own companies, in our industry, and indeed in our nation and in our world, we can sometimes lose sight of the victories, large and small, that we do achieve. So I would like to review just a little bit of the progress that we have made together at PhRMA since we met in Boston one year ago.

In the past year, PhRMA has continued to be an extremely effective advocate for medical innovation. We have consistently emphasized the critical importance of medical innovation to patients and the need for a policy environment that supports this. We have done this to policymakers, business leaders, leading journalists, and the public at large in venues around the world.

Earlier this year, PhRMA produced, I am sure all of you have seen it, its first ever report on the industry-wide biopharmaceutical pipeline which documented the astonishing vitality of pharmaceutical research; more on that in a moment. And we inaugurated PhRMA's Research and Hope awards, to recognize researchers and patient advocates for advancing medical innovation in the U.S.

In terms of policy, the big achievement of the past year has to be the reauthorization of the Prescription Drug User Fee Act in the United States. PDUFA reauthorization was a top priority for PhRMA and our success in 2012 caps years of painstaking analysis and planning. Thanks in no small part to the work of people in this room, the law now includes, among other things, funding for a more systematic, standardized and predictable process for benefit-risk assessment of new medicines. In addition, permanent reauthorization of the Best Pharmaceuticals for Children Act and the Pediatric Research Equity Act will improve medical care for our children by driving research to create innovative medicines for use in pediatric patients.

The past year also saw stronger protections for global patient safety. I think all of you are aware we helped coordinate a new global alliance between nearly 30 pharmaceutical companies and the international police agency Interpol to help thwart the huge problem of counterfeit medicines. We were also instrumental in helping to launch the Partnership for Safe Medicines in China, where counterfeiting is a serious public health issue.

Our initiatives against counterfeiting illustrate an increased focus on international efforts on behalf of our industry, one of my priorities as chairman, which took me to China last November and again just two weeks ago.

PhRMA also has increased its level of cooperation with other international pharmaceutical organizations, such as FPF and IFPMA, not only on counterfeiting but also on issues such as implementation of health technology assessments and standards for data transparency. We have also been actively engaged in efforts toward new trade agreements with Europe and the Pacific Basin and we saw progress in the past year on both fronts.

Reflecting our continued emphasis on maintaining the highest standards of integrity and quality in our work, we created the Compliance Roundtable and initiated a review of our current principles for conduct of clinical trials, and publication of clinical trial data.

The PhRMA team also has been busy on many other fronts, expanding the very effective We Work for Health Program, creating a new vendor program, and gathering the kinds of data that we will need to continue to make a strong case in the years ahead.

It is important to note that all this progress occurred in a tumultuous year for healthcare and for biopharmaceuticals. A quick stroll down memory lane takes us past the Supreme Court ruling on the Affordable Care Act that was just last June, endless battles over deficit reduction and a host of state actions having to do with access. And that is just here in the U.S.!

The year ahead is shaping up to be equally eventful, with ongoing debates over the budget and implementation of healthcare reform here, even as the same kinds of pressures drive challenges to access and reimbursement in countries around the world. We look forward to working with our colleagues, partners, and stakeholders, with a common goal of finding solutions that best meet patients' needs.

Even more important than the progress we made as an organization in promoting policies essential for innovative pharmaceutical research for patients is the progress we continued to achieve in our respective companies through that research effort. The FDA approved 39 new molecular entities in 2012; that is the most in 16 years. Along with a robust 35 approvals in 2011, the decade is off to a great start, up from an average of only 24 approvals in the first decade of this century. We are even running ahead of the 1990s, which averaged 31 approvals a year.

A few minutes ago I alluded to a report we issued earlier this year which found that more 5,000 potential new medicines are being evaluated in human testing today - that is an all-time record. Now of these, more than 800 are in Phase III and 70 percent, that is seven-zero percent, have the potential to be first-in-class.

Potential medicines are being developed for diseases for which no new therapies have been approved in the last ten years, including things like ovarian cancer, cervical cancer, septic shock, and ALS - Lou Gehrig's disease. Furthermore, research into rare diseases, defined as those affecting fewer than 200,000 people, is flourishing. Over the past decade, the number of medicines being developed to treat these diseases, 140 per year is more than double the previous average in the last decade.

Research. Progress. Hope. Our focus on the patient and on the unique role that we play in bringing the benefits of scientific innovation to meet patient needs is summed up in our brand. And even beyond the promise of innovative medicines to treat or even cure some of the world's most devastating diseases is the contribution they can make to meet the enormous challenges facing healthcare systems around the world.

Innovative medicines are arguably the most cost-effective element of healthcare today. I know that John Castellani is going to expand on this point in his address this afternoon. So let me mention just one data point that demonstrates why pharmaceutical innovation must be part of any plan to hold down healthcare costs while expanding access.

In February, the Congressional Budget Office dropped its projected cost for Medicare over the next ten years by $137 billion. Now of that, $104 billion - 75 percent - was due to the drop in expected Medicare drug benefit spending. In fact, CBO has lowered the Medicare drug benefit baseline in five out of the last six annual revisions. From 2007 to 2012, the average growth rate of the Medicare drug benefit was less than two percent. Not only that, for the first time ever, the CBO is accounting for savings from the use of medicines that reduce the need for other costly medical services, such as hospitalization.

We must continue to make the case for biopharmaceutical innovation and for an environment where innovation is fostered and rewarded; and you bet we will.

We have an exciting meeting ahead of us for the next two days. The PhRMA team has put together a thought-provoking and diverse program. Today, we will look at what we can learn from the unique, collaborative center of science that San Diego has become. Then we will consider solutions to the hurdles that face us in translating research into hope, translating the promise of the science into new medicines. You definitely will want to be back here after lunch to hear about how technology is disrupting the biopharmaceutical business model from research through the supply chain to patient care. And tomorrow, we will bring it all back together with a closing focus on the patient.

As you listen and think and discuss with one another over the next two days, please look for insights on how you can help create and shape new solutions to the tough problems we face and accelerate our progress. I believe we have, indeed, made tremendous progress in the past year; more medicines approved, more patients served, key policy advances around the world. So I thank you and salute you for your hard work and your dedication to the patients we serve.

But we all know there is still much to be done.

As you go through these two days, listen and see first-hand how the world is changing. This is the new normal. But instead of just getting used to it, just getting through, please join me and get engaged. Don't hunker down, fire up. What the heck, we are in California. Right? There has never been a better time when the work of pharmaceutical innovation was more promising or more urgent. We do translate science into hope. We are fortunate, all of us, to be part of this noble cause. Let's make the most of the opportunity here before us.

Thank you very much.

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