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Laws Laws & & Regulations in an Regulations in an Evolving Healthcare Marketplace E E Evolving Healthcare l i l i H H lth lth M arketplace k t l k t l Real Life Implications for Biopharmaceutical Industry Real Life Implications for Biopharmaceutical Industry Christi Shaw Head, US General Medicines President Novartis Pharmaceuticals Corporation President, Novartis Pharmaceuticals Corporation February 17, 2016 1 | National Dialogue Healthcare Innovation | Christi Shaw | February 2016

Shifting from Volume to Value Shifting from Volume to Value Access Improve Population p Health Triple Quality Quality Cost Cost Aim Aim Improve Reduce Per Individual Capita Cost of Experience Population of Care Care The healthcare industry is embracing change, The healthcare industry is embracing change, but can only advance so far with the current infrastructure but can only advance so far with the current infrastructure f f f f 2 | National Dialogue Healthcare Innovation | Christi Shaw | February 2016

Laws impacting shift to value Laws impacting shift to value- -based healthcare based healthcare 1 2 3 S Stark Law & Stark Law & S & & Patient Patient Limiting Limiting Anti-kickback Anti-kickback Privacy Privacy FDA FDA Statutes Statutes Rules Rules Regulations Regulations 3 | National Dialogue Healthcare Innovation | Christi Shaw | February 2016

Stakeholders want to create new patient solutions Stakeholders want to create new patient solutions 4 | National Dialogue Healthcare Innovation | Christi Shaw | February 2016

Thinking outside the box Thinking outside the box 5 | National Dialogue Healthcare Innovation | Christi Shaw | February 2016

Anti Anti- -kickback statutes don’t kickback statutes don’t always take into account always take into account current healthcare current healthcare payment and delivery models payment and delivery models How can we all think and work 1 more creatively for the benefit of improved healthcare outcomes? 2 How do we step out of our silos and work across the system? How can pharma manufacturers 3 3 work more directly with ACOs or other integrated care entities? or other integrated care entities? NDHI Recommendation NDHI Recommendation Greater flexibility and new anti-kickback statute safe Greater flexibility and new anti-kickback statute safe Greater flexibility and new anti kickback statute safe Greater flexibility and new anti kickback statute safe harbors to achieve increased quality and lower costs harbors to achieve increased quality and lower costs 6 | National Dialogue Healthcare Innovation | Christi Shaw | February 2016

We need greater flexibility to We need greater flexibility to SHARE SHARE scientific and health economic data scientific and health economic data  Sharing scientific and healthcare economic information with stakeholders BEFORE FDA approval can help improve payers’ ability to plan for future healthcare costs  Establishing metrics for outcomes-based contracts is currently limited to product label primary endpoints which may not align with payers’ preferences 7 | National Dialogue Healthcare Innovation | Christi Shaw | February 2016

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Thank You Thank You 9 | National Dialogue Healthcare Innovation | Christi Shaw | February 2016