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The biopharmaceutical

The biopharmaceutical industry, government, and other stakeholders can extend this progress in 2016 and beyond by working collaboratively to: • Modernize the Drug Discovery and Development Process: Pro-patient, pro-science, pro-market reforms at the FDA would enhance competition, drive greater efficiency in drug development and discovery, and help hold down costs. • Promote Value-Driven Health Care: Regulatory barriers impede open communication by manufacturers, predictability regarding the biopharmaceutical pipeline, and innovative contracting. Value-driven payment for prescription medicines can promote efficiency and affordability by ensuring that more patients receive the best treatment the first time around. • Address Market Distortions: The 340B Drug Pricing program and the risk adjuster for commercial insurance that does not account for prescription drug costs are just two programs requiring reform to help preserve the safety net, revive the health care market, and improve affordable access to medicines for patients. As the burden of chronic disease continues to grow, these treatment advances, and those to come, will continue to play a central role in alleviating the burden for patients and caregivers, as well as the health care system. We owe it to America’s patients to continue this progress, underscoring the need to maintain a robust ecosystem that fosters and encourages the development of tomorrow’s treatments and cures. • Engage and Empower Consumers: We need to make more information on health care out-ofpocket costs and quality available to patients. In addition, vulnerable patients should have the protection of enforceable, commonsense rules that prevent discrimination and remove barriers to access. Stephen J. Ubl President and Chief Executive Officer Pharmaceutical Research and Manufacturers of America

Table of Contents Chapter 1 1 Improving the Lives of Patients 7 Progress Against Disease 12 The Nature of Medical Progress 13 The Importance of Providing Patients with Choice of Medicines 13 Personalizing Treatment Chapter 2 17 Improving Health Outcomes and Driving Value in Health Care 20 The Health Impact of Better Use of Medicines 23 The Economic Value of Better Use of Medicines 25 Gaps in Optimal Use of Medicines Chapter 3 31 Impact on the Economy and Biomedical Ecosystem 33 Driving Economic Growth and Global Competitiveness 35 Economic Impact of Clinical Trials 37 Venture Capital Investments 39 Responding to Societal Need Chapter 4 45 Research and Clinical Trials 47 Overview of the R&D Process 53 The Evolving R&D Process 56 Adapting and Evolving Chapter 5 61 The Promise of the Pipeline 63 Examining the Pipeline Conclusion 67 Looking Ahead Appendix 71 PhRMA: Who We Are, Mission, and Annual Membership Survey 72 Who We Are 72 Our Mission 72 PhRMA Annual Membership Survey 73 PhRMA Leadership 75 PhRMA Member Companies: Full Members 76 PhRMA Member Companies: Research Associate Members

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