In this interview, Leonard Schafer, a trustee of the Brookings Institution and the University of Southern California, engages in a conversation with Seema Verma, the Administrator of the Centers for Medicare and Medicaid Services (CMS). The discussion revolves around the Trump administration's efforts to lower prescription drug prices, with Administrator Verma highlighting several initiatives aimed at fostering competition, modernizing payment policies, encouraging generic drug utilization, and improving price transparency. She also addresses the challenges faced by the healthcare system in managing the cost of high-priced innovative therapies while ensuring patient access, and emphasizes the importance of exploring alternative payment models and tackling both macro-level issues in healthcare spending and individual patient experiences.
My name is Leonard Schafer and I'm very pleased to welcome all of you to today's event, which features a conversation about Medicare Part D with CMS administrator CMA Verma. Our event is hosted by the Schafer Initiative in Health Policy, which is a collaboration between USC Schafer Center and Brookings.
So I am very pleased to have the opportunity to introduce Administrator Verma today. We are very grateful to her for taking the time to meet with us. The administrator, Verma is the 15th administrator, and she's been in this position since March of 2017. She now oversees a $1 trillion budget, 26% of the entire federal budget, and she administers healthcare programs for over 130 million Americans. During her career as an administrator, Verma has held several posts that focus on health policy and operational design. Today's presentation, though, will focus on Medicare Part D, which provides prescription drug coverage to 43 million Americans roughly double the number that it covered when it was introduced in 2006. So please join me in welcoming CMS Seema Verma.
Verma: Well, I can say between the second administrator and the 15th that things are not so perfect. It's a lot bigger though. Well, good afternoon and thank you for the introduction and it's a pleasure to be here today. I want to thank the Brookings Institute and the Schaeffer Center at the University of Southern California for hosting this discussion on such an important and timely topic. And I also appreciate all the publishing and the outstanding research and analysis on issues in health policy. You all serve a very critical function in the policy development process, and I can tell you that I'm constantly emphasizing to my team the importance of staying on top of the latest work coming out of all the think tanks. And several of our projects at CMS were aided by papers written by scholars at institutions like these. One paper that I wanted to highlight is the Schaeffer Center piece on the pharmaceutical distribution chain.
I can tell you we learned a lot from it, but I am dying to know how many PhDs it took to map out the whole process. But anyway, we really do appreciate all the analysis and all of your ideas on how to improve our healthcare system. So we're here today to discuss an issue that many of you have worked on strategies for lowering prescription drug prices. And it's no secret that this is a top priority for President Trump and Secretary Azar. The United States is the world's leader in biopharmaceutical innovation, but lifesaving medicines don't mean anything if patients can't afford them. And as Secretary Azar has said, there's little difference for a sick patient between a miracle cure that hasn't been discovered and one that is too expensive to use. And so if we take a step back from prescription drug related issues and look at our healthcare system more broadly, we all know that costs are growing at an unsustainable rate.
And as a CMS administrator, I can tell you that I wake up every morning concerned about the trajectory of our nation's healthcare spending. By 20 26, 1 in every $5 spent in our economy will be spent on healthcare. And we all know we have to change this path because our country's future depends on it. And in order to do that, we have to change how and how much we pay for prescription drugs. And Medicare spending on prescription drugs is growing faster than spending in any other area. In 2012, Medicare spent 17% of its total budget or 109 billion on prescription drugs. And four years later, in 2016, this had increased to 23% or 174 billion. So lowering the cost of prescription drugs isn't just something that we would like to do. It's something that we must do in order to ensure the whole sustainability of our healthcare system. New and innovative drugs are coming to market, which represent revolutionary advances in medical science, but also have very steep price tags.
And it's wonderful news that there are hundreds of gene therapies in development. The two CAR T cancer therapies, however that have reached the market, have been priced at $373,000 and $475,000. And a new gene therapy for certain forms of blindness has been priced at $850,000. President Trump has outlined the most sweeping set of policies to lower drug prices ever proposed by an administration. And in the American Patients First Blueprint, we've made our plans clear. The market for prescription drugs is complex, but the blueprint is focused on bringing the same principles of competition and choice that have worked in other markets to tackle challenges in this one. And it's no coincidence that the President's blueprint is organized around competition as a key pillar. Generic drug competition in particular is critical, and CMS appreciates the outstanding work that the FDA has done under Scott Gottlieb's leadership to accelerate the approval of generic and bio similar products.
I always tell Scott, if you're doing your job, then my job becomes a lot easier. And FDA has approved a record number of generic drugs, and this has had a major impact on CMS and really all payers. To take one example, FDA's recent approval of the first generic competitor to EpiPen was groundbreaking. And this approval is going to provide much needed competition for Medicare and Medicaid patients who rely on this life saving product. CMSs New drug dashboards show that collectively Medicare and Medicaid spent 501 million on EpiPens in 2016. And so generic competition should reduce the spend and generate savings for the programs and for states. So while FDA has been accelerating the introduction of generic and bio similar products, CMS has been acting in concert to modernize our payment policies to increase competition because CMS empowering patients and increasing choices are driving factors in virtually every area that we oversee.
Because when patients have choices, cost and quality improve. And we often hear that Medicare should negotiate drug prices with manufacturers. And in response, I already point out that we have negotiators, and these are the Part D plans which cover drugs that beneficiaries are picking up at pharmacies. And Part D has been a success because instead of a government bureaucracy making decisions for patients, the Part D program protects a patient's ability to choose a plan that's right for them. Beneficiaries know which drugs are covered in a particular plan, the premium and the level of cost sharing, and the patient can choose the plan that meets their needs and make trade-offs between costs and quality. They are making the decision, not the government. Part D is a market-based system and prescription drug plans are competing for beneficiaries. And in a market-based system, competitors must provide the highest quality at the lowest cost to attract customers.
But when the government controls the process and only offers one option with no choices, the push to excel or go out of business is no longer there. And so at a time when healthcare costs are rising, our administration has proudly announced that Part D premiums decrease this year and we expect that they're going to decrease again next year. Just as an aside note, premiums for Medicare Advantage plans and plans on the exchanges are also projected to decline next year. As we look to the future of Part D, we must move to an even more dynamic and competitive market, which will lower prices while protecting patient choice. CMS intends to give Part D plans more leverage in their negotiations and more flexibility in their benefit design so that they can continue to drive towards lower costs and higher quality for our beneficiaries. I want Part D plans to have every tool that plans in the commercial market have to lower costs, increase quality and promote transparency including at the point of prescribing.
And we have seen innovative approaches emerge in the private sector to provide real time cost information to patients and providers. And one area in which our Part D plans are more constrained is in their negotiating power for drugs that are in the protected classes. These are therapeutic classes for which part D plans have to cover essentially all available products. And this administration is committed to ensuring that seniors have access to the medicines they need in all therapeutic classes, including in the protected classes. However, private plans are able to ensure access to drugs in these categories while also negotiating with drug manufacturers for the best deal. And today there are more competitor drugs in these classes, including generic drugs than there were when the protected class policy was created. And typical private market discounts for these drugs are in the 20 to 30% range, but the average discount across all protected classes and Medicare Part D is just 6%.
So it's important to lower costs for all patients, including patients who need drugs in the protected classes. And one of the successes of Part D plans has been their encouragement of generic drug utilization over the years. And most of you are aware that around 90% of prescriptions filled in America or for generic drugs, a remarkable statistics. And earlier this year we finalized a rule that allows plans to substitute generic drugs for branded drugs more quickly on their formularies so that beneficiaries can access low cost generics as soon as they're approved. Because when it comes to empowering Part D plans to encourage generic utilization, CMS is not leaving any stone unturned and looking for ways to save money for our beneficiaries. In 2016, part D beneficiaries spent over 1.1 billion in out-of-pocket expenses for branded drugs that had comparable generics. And so clearly there are savings for patients being left on the table.
And to this sense, CMS issued a memo to Part D plans this summer explaining the tools that they have available and the expectation that CMS has to ensure that beneficiaries are getting the best deal. And while the memo reminded plans of their current authority in this area, we recognize that additional barriers stand in the way of fully encouraging generic utilization. So stay tuned for more from us on that issue, but we haven't stopped there. Other policy changes I want to highlight today include removing what was called the meaningful difference requirement, which restricted plans from offering more choices to seniors. CMS removed that requirement and saw an uptick in the number of Part D plans by over 15% this year. And we've also introduced flexibility that Part D plans will be able to leverage in the future. So currently, if a Part D plan includes a particular drug on its formulary, the plan must cover that drug for every FDA approved indication or patient condition, even if there's other drugs that are more effective for a given indication.
So the requirement to cover drugs for all indications discourages Part D plans from including more drugs on their formularies. And so we announced that starting in 2020 plans can tailor their formularies so that they can cover drugs by indication. And this policy will provide beneficiaries with more drug choices as plans will be able to cover the most appropriate drug for every condition. And we announced the change this year so that they have time to incorporate this flexibility into their negotiations with manufacturers prior to the 2020 plan year. And Part D plans have done a great job in keeping premiums low. And however, while plans can be powerful negotiators, sometimes it's the case that a plan's incentives are not completely aligned with the patients. And one practice that some plans have used, which I find completely unacceptable, was the imposition of gag clauses. And so over the summer we sent a letter to Part D plans explaining that any form of gag clause is contrary to CMSs efforts to promote transparency and lower drug prices.
And thanks to President Trump and bipartisan leadership in Congress, gag clauses are now illegal. And I was honored last week to be at the White House for the signing of two bills to end the practice, and pharmacists can now help their patients find the best deal on prescription drugs. The drumbeat continues. And earlier this week, CMS proposed to require that prescription drug manufacturers post their list prices for drugs covered in Medicare or Medicaid in direct to consumer TV ads because patients often pay their cost sharing or deductible off of a drug's list price. And so therefore, this requirement would inject greater transparency into prices that manufacturers set. This week's announcement and the legislation on gag clauses demonstrate President Trump and Secretary Azar's commitment to pull back the curtain on the system of drug pricing. This is a commitment that's been ongoing. And earlier this year, we released a redesigned version of our drug spending dashboards, which include year over year information on drug prices and for the first time highlight which manufacturers have been increasing their prices.
The pharmaceutical industry took a small step this week to increase transparency by committing to develop their own platform to provide pricing. However, the disclosure of prices and television ads is needed to ensure that patients have all of the relevant information when they're learning about a medication. So, so far I've focused primarily on Part D because of the hashtag there, and that's the market for drugs that patients pick up at the pharmacy. But I'd like to turn our attention to part B, so maybe we could get a new hashtag for part D for part B. I do see a big B up there, so I think we're okay in part B though Medicare spends about 28 billion paying for providers for medicines for drugs that are patient administered such as infusions. So the story is much different here. We pay part B providers for drugs at an amount equal to the average price the drug sells for, plus a percentage based add-on fee, and there's no negotiation.
Medicare merely accepts the average sales price and patients have to pay their co-insurance off of that price as well. And that sales price is often higher in America than it is in other countries. And other countries are not paying an appropriate share of the necessary research and development to bring innovative drugs to the market. Instead, they're free riding off of US consumers and taxpayers. This is in part why our spending on healthcare is so much higher than spending in other countries. And to make matters worse, the payment model in part B creates a perverse incentive for manufacturers to set higher prices and for providers to pick drugs that are more expensive. And so while this system may have made sense when it was designed in today's world with some therapies costing over a half a million dollars, just taking the average sales price and then adding an additional amount on top really just doesn't make sense.
And we also don't see the full benefits of competition in part B because some drugs within a therapeutic class actually had their competitor in Part D. Because there are separate programs, the drugs don't have the opportunity to compete against each other. CMS recently took a historic step to address some of these issues in part B. With respect to Medicare Advantage plans, CMS gave MA plans the option of applying step therapy for part B drugs, which make up around 12 billion of MA plan spending per year. And so this means starting in 2019, MA plans will be able to ensure that patients are receiving the most preferred drug therapy first and progress to other therapies only if necessary. So for example, plans made sure that a beneficiary began with treatment with a biosimilar before progressing to a more costly biologic only if the biosimilar is an effective.
And for the very first time, this will create competition and negotiation for Part B drugs and strengthen the position of MA plans as they work to lower prices for beneficiaries. And we've taken careful effort to make sure that patients are protected under this policy. So step therapy can only be applied to new prescriptions and patients always have the right to appeal, and at least half of the savings must be shared with patients through incentive programs. And these incentive programs must be coupled with care coordination services including implementing medication adherence strategies for beneficiaries. So patients will have time to decide whether to participate in a plan that takes advantage of this new flexibility and they can switch their plan if they don't like it through the end of March of 2019 if they change their mind. So some Medicare Advantage plans also offer a Part D benefit.
And so CMSs new policy will enable these plans to implement step therapy across B and part D. And so for the first time, competitor drugs will be on a level playing field and patients will receive the best medicine, whether it's physician administered or patient administered, and hopefully at a lower price. The initiatives that I've outlined today will impact drugs with competitors. And while we can strengthen competition and negotiation for situations with multiple drugs, there are times when competition doesn't exist, especially for new drugs that enter the market. CMS will need other approaches. Treatment and cures are coming to market today that doctors could not have imagined a generation ago. Many of these treatments are for orphan diseases and some new therapies are one-time treatments that cure diseases altogether. And as I said earlier, the price tag for these drugs are exceeding 300, 400 and even $800,000.
And I think we could see those price tags go up to a million dollars and $2 million. So paying for these drugs based on an average sales price plus an add-on really just doesn't make sense. We need to modernize our payment systems to consider the new era of innovation. New payment arrangements are needed and could take various forms. They may include paying for a drug over time only if the patient achieves certain clinical outcomes or paying for a drug through a shared savings approach based on the drug's impact on the patient's total cost of care or paying for a drug under a subscription approach with an upfront fee in exchange for as many doses of the drug that are as clinically necessary. So when drugs are as expensive as some of the new gene therapies are, we must absolutely hold manufacturers accountable for achieving outcomes. The president's blueprint was released on May the 11th, and we have been taking Swift action since then.
It's been very, very busy, but this is just the start and there's more to come. There are additional steps that we will be taking in part D in the near term to strengthen negotiations and get a better deal for beneficiaries as prescription drug pricing is a very complex issue to navigate. And clearly there are many issues to unpack and address. And I want to thank all of you again for your work in helping us to pinpoint problems and develop solutions. And together we can modernize our payment systems to ensure sustainability, encourage access and foster competition, which will lead to lower prices. And that way all Americans will benefit from 21st century advancements in biomedicine. Thank you.
Thank you administrative Verma for those very thoughtful and substantive remarks. I think you really pointed out the importance of formulary policy for both solving access issues and also putting some pressure, downward pressure on prices. I want to talk about some other topics if you don't mind. And I'd like to start with price transparency. You mentioned the signing of the prohibition against gag clauses, which allow patients to know exactly what they're paying for when they get to the pharmacy. I've been studying health policy for about 30 years, and one of the problems we've always had is that we don't have a clear understanding of who's actually paying what and what's driving price increases and what should be done to reduce them. So I'm going to advocate for a researcher gag clause and ask you, well, actually that went the wrong way. People might view that, but what can be done in terms of improving price transparency so we really understand what people are paying?
Verma: Well, lemme just say I think that price transparency is a major issue in our healthcare system, not just for drug pricing but just at large. I mean, if we look at everything that's gone on in the last 10 years, right? We've had so many changes. We've pretty much regulated everybody. Our administration's putting out pages and pages of regulations. And one of the things that we haven't done in our healthcare system is activate probably the most powerful force that we have, which is the consumer and the patient. And so I think that price transparency might be the piece that really helps turn the page for us in terms of controlling healthcare spending. So we're taking a lot of effort around transparency. Just this year we asked hospitals to post their pricing online. That's one piece that we've done. Later on this year, we're going to have some cost comparison tools so that patients can look at costs between surgery centers and also the hospital.
And so really the drug pricing piece is just another part of this. We did the piece around the gag clauses to make sure that people have an understanding of what options they may have. Oftentimes you can get the drug cheaper than what your plan is offering the price for. And then the other area is the stuff that we've put out online. We had our drug pricing dashboard, which I think is helpful, but this week's action I think was particularly important because while the dashboards are important, and I think pharma made a small step in that area as well, when people are learning about the drug, it's important that they understand the price. And we've heard a lot of discussion of, well, the price isn't exactly what they're going to pay, but it gives them some sense of a ballpark. And people do pay their deductibles off the list price and they do pay their co-insurance off the list price. So we're going to always continue to push for transparency. I think that's probably how we move forward on bending the cost growth curve in all of healthcare.
Yes, I couldn't agree more. I want to also talk about the supply chain, and one of the points you made, and I think it bears repeating, is that one of the reasons for the success of the Part D program has been that we're at 90% use of generics and that has really allowed premiums to stay lower than they were originally forecast. And PBMs played a big role in that. On the other hand, today we have three PBMs that account for about 85% of the market, and a lot of the rebates are acting like hidden discounts. They're invisible to consumers and you're making progress there, but they also are moving patients more quickly into the catastrophic range in part D. And so I'm wondering what can be done, what are the policy options in terms of both offering patients some relief in the catastrophic and also what can be done to solve this push towards people into an area where the federal government bears more responsibility?
Verma: I think this is a great example of where Part D could perhaps be updated or modernized. I think that when this was originally developed, developing that catastrophic phase to encourage insurers and part D plans to participate and having that catastrophic phase essentially put that risk on the government. But now I think we're sort of in a different era. We have a better sense of what drug costs have been. There's a little bit more predictability, and I think we're at a point now where it would be better I think for Part D plans to manage that portion of the benefit as well. That way we could bring competition and negotiation to that piece as well. And I think the way it's set up now, there's sort of a perverse incentive to move people to the catastrophic phase to not be, to take on the risk. So as you know with the president's budget this year, we proposed essentially to allow that change and to also cap what beneficiaries would pay in the catastrophic. So hopefully we'll have some changes in Congress, but if not, I think that's an area that we're looking at what we can do with our existing authorities.
Yeah, that's excellent. And I think it's important for people to understand that when at the time of passage of Part D, there was concern that insurers wouldn't play, and so you really need to provide some reinsurance and risk. But as you point out, the market is quite healthy and we have lots of plans that are playing here, and so the role of the government as a reinsurer is not as important anymore. You also mentioned part B, and we will be there a second. Feel free anyone who wants to tweet to use that hashtag Medicare is, as you pointed out, spending almost 30 billion a year there. And a lot of this is concentrated in oncology, ophthalmology, and rheumatology. And so you've made these policy changes that have given Medicare advantage some tools, and I'm just curious, what's been the response to the plans to this change in policy? Have they been supportive? Are they pushing towards even more extreme, I would say, or different competitive bidding models, for example, here to try and change the way we physicians administer drugs?
Verma: I think the response that we've gotten is very positive because I think the plans, this is something that they're excited to do largely because they're doing this on the commercial side. This is the way that the rest of the industry works and they haven't had the opportunity to do this in part B. And I think that this gives them the opportunity to manage this a little bit better, and ultimately that's going to lower costs for their beneficiaries and it's going to put them in a position where they're able to negotiate a little bit more with manufacturers. And we haven't had that in part B. I think that part BI feels like it has been sort of untouched, talking about the need for modernization. I mean, this is where I think going forward when these new drugs are coming out, we're looking at all these price tags. There's no way the system can support this in its current structure. So we are looking at some of the changes that we've done with ma, but I think there's a lot more work to do on part B.
Yes, agreed. And finally, you were talking about cures and you talked about rare diseases and you mentioned some scary numbers, but often those are small patient populations. But I think one of the interesting things in terms of biomedical innovation is that we may be working towards the prospect of cures for very prevalent illnesses. And we saw a sense for that with hepatitis C when we developed direct acting antivirals, which actually had a 99% cure rate for the disease. And in 2015 CMS sent a letter to state Medicaid programs noting to make sure that they were paying for these cures for the population. This affected a very disenfranchised population of IV drug users and such. But I think CMS also kept pressure on manufacturers to try to express concerns about access and affordability. You mentioned some possible solutions, licensing paying over time and such. Do you think that's going to be enough here? Do you think we have the right incentives to develop cures rather than treatments?
Verma: Well, I think we need to do something in this particular area. Of course, you want to encourage innovation, especially for those particular areas of diseases where there are so few people. The hepatitis example, I think there's a lot to draw from there. I mean, I think you saw when there was competition, the price went down, but in particular, I think it was a very interesting test case or case study for what happens with state governments. So if your state government, your budget is on a one or two year budget cycle and all of a sudden this new drug comes out and you have to pay for it, they don't have the capacity in terms, they don't have that flexibility in terms of their budget. They don't get to run a deficit. So that being said, they have to sort of figure out what are we going to do?
And it works well. The system I think works well in Medicaid because they do have some required rebates, but when the cost of the drug is so high, and that's where I think they really struggle. As I talk to states across the nation, it's really these new high cost drugs. And so I think we're moving to a new era. We need to think about how we're paying for these. There's no magic or silver bullet in terms of how we're going to pay for these drugs and the whole area of value-based pricing is very new. There's a lot of complicated issues there in terms of if you are doing a value-based contract where you say, okay, you don't have to pay for the drug. If it doesn't work, well, then the drug is zero. And when you're trying to do things like Medicaid best pricing, you're reporting around that, everything gets convoluted.
And so that's something that we're looking at within the agency as well is what kind of changes do we need to make from a regulatory standpoint to encourage these types or at least allow these types of value payment models to at least occur. I don't know that it's a panacea. I don't think it works for every single type of drug, but I think some of these high cost drugs that are coming to market, I think the idea of tying outcomes is also, it sounds really good, but that's going to be very complicated. How do you make sure you can track the patient for what period of time? How do you gather the data and what is that clinical indication that you're looking for? Sometimes it can be very simple, is the person alive or not? But sometimes it's a lot more complex than that. So what we want to do is make sure that we allow for this type of innovation and payment model. So you're going to see some more work from us on that to at least create the opportunities for other payers to be able to engage in these types of payment arrangements.
Well, that's great news. It means full employment for health economists for years to come. So I know you're pressed for time and you have meetings, but we have time for one or two questions from the audience. And if you could wait for a microphone to come around. Is there someone with a microphone? Yes. Why don't we start up here and if you could introduce yourself and ask your question and avoid soliloquies.
Dan Klein, the Pan Foundation. So capping out-of-pocket costs and putting downward pressure on prices is great, but we see a lot of patients with serious illness in Medicare Part D who can't get to the catastrophic threshold that the costs upfront are really an insurmountable barrier. So what's CMS doing to look at spreading those costs more evenly throughout the benefit year or lowering those costs for people with serious illness?
Verma: I think that across the board, I mean as we're kind of coming up with our strategy, the idea is to really focus on the patient and their out-of-pocket expenses. And so every policy that we're coming up with really does focus on, well, how's that going to impact their out-of-pocket spend? And some of the things that we've talked about and even asked for comment on were things like how do we deal with rebates? Should we require a patient, should we require that those rebates be passed on to the patient at point of sale, right? So that they can have lower out-of-pocket expenses. But what we find is that there's a ying and a yang if you do that. Yes, you may lower out-of-pocket expenses for some patients, especially those that have a lot of serious illnesses and very expensive medications. But you also may increase the premiums for the Part D program for everybody. So our foremost principle is try to lower out-of-pocket expenses, try to lower drug costs for seniors and all of our beneficiaries. But it is very complicated. Sometimes those are trade-offs between premiums and out-of-pocket expenses.
But I would add that one of your recommendations, which is to make sure plans don't have incentives to move people to the catastrophic cap, might actually help in that regard.
Verma: Exactly. And that's why we're so interested doing some more work around the catastrophic
Yes. Question right here.
Hi Nick Ko with the stat. So a new medicare rule landed yesterday at OMB with the title indexed price concession model, and I was wondering if you can give us any clues as to what that might deal with given the cryptic title?
Verma: Well, as a matter of, I think it's a legal issue that we cannot comment on proposed rules. So I would say just use your wild imagination on that.
Yes, we have one in the back here. No one's giving the mic to the people I point to. So anyone who would like to ask a question, who has the mic, please proceed.
Rip Lake Strategic Health Resources. We do a lot of work with biotechs, particularly in the area of HIV and for state Medicaid. Even if the drug is FDA approved, we found that states are hesitant to actually use the drug that's approved versus one that's a, well, it's not prior approval is a part of the issue. So CMS has been less than assertive in terms of working with state Medicaids on drugs like this. What more can you do?
Verma: Well, we continue to work with states, but we also respect the fact that states are managing their Medicaid programs. And so we can always reiterate to them what the requirements are, but states have used it as one of their tools to manage healthcare costs, just like we're talking about with prior authorizations, step therapy and those types of things to manage costs and to ultimately keep down costs for the program. I think one of the things to point out though is that in all of those cases, patients, I think what we always look for is to make sure that patients always had the opportunity to appeal those decisions. Even some of the work that we just did, allowing the MA plans to incorporate step therapy, one of the things that we said there was it can't be for medications that the patient's already taking. So if it's something, it's a new drug, they can move forward with it. But if it's something that the patient's already been on, they couldn't make changes there. And also to make sure that the patients have that ability to appeal,
And this is just one of the fundamental tensions that you talked about, which is at the end of the day, we all want unfettered access to everything. But on the other hand, we do have concerns about costs and being able to use those tools and how we balance those is a policy question. And again, health economists are happy to work on that. We have one last question here. I don't have a mic. Hold on for the mic. Thank you.
Jan Hansen from Genentech. Thank you for speaking with us today. I have a two-part question. One is, what was the biggest surprise you faced when you took the role with CMS? Second? What is the thing you'll be most proud of, the accomplishment you most want to achieve in the role?
Verma: Wow, I didn't think about that when I got here. I think that I come from the private sector and I consider myself a problem solver. I will be given difficult things, things that I may not know anything about, and I feel like I'm always able to figure out solutions. But it is the government and there's an incredible process of review and bureaucracy and the speed in which things go I think has always been something that I have found challenging. So even within the Medicare program, it's these payment rules and they go out once a year and sort of like if you don't hit that at that time, you have to wait an entire year. So I think it's just the speed in which things move. I'm an impatient person. I think in terms of accomplishments, like I said, when I wake up in the morning, I do think about the cost of the entire healthcare system and that it's not sustainable.
And so I'm trying to spend my time and my focus on things that are really going to improve the sustainability of the program. So it's things like we've made a lot of effort around interoperability or site neutral payments. And to be honest with you, I'm trying to tackle issues that may not be popular, may not make me very popular, but at the end of the day, we want to do something that's going to advance the healthcare system and sustain it. I'll also say that I'm trying to look at big issues. So we're talking about drug pricing or we talk about the future of Medicaid spending, but I also want to impact the experience that each and every person has when they go to the doctor's office. And so that's why we're focusing on things like price transparency, making sure that people have their healthcare record and making sure that people understand quality information. So we're trying to do things at a big level, at a macro level and also at a micro level. So thank you.