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Coronavirus Report: The Hill's Steve Clemons interviews Steve Collis

The Hill’s Editor at large Steve Clemons interviews AmerisourceBergen Chairman, President and CEO Steven Collis on what Americans should think about supply chains and the ongoing COVID-19 pandemic. Read excerpts from the interview below.


STEVE CLEMONS: Hello and welcome to a special edition of the Coronavirus Report. Joining me today is Steve Collis, chairman, president and CEO of AmerisourceBergen, a pharmaceutical distributor and a key link in the health care supply chain, a Fortune 10 company. Can you give me the dashboard as you see it of the COVID-19 crisis, as its unfolding and our response to it, needs to include from a distributor like you?

STEVE COLLIS: I think when we get into vaccines, Steve, it's somewhat complicated because it is an unusual pharmaceutical channel. There's so many different points of access and where it gets stored or treated. Vaccines get treated from physician’s offices to retail pharmacies. So retail pharmacy of course is a channel, health systems where the three wholesalers are very high, high, high proximity and high concentration. Once you get out of that, it becomes much more distributed and vaccines are complex. We've got Operation Warp Speed, we've got Pfizer, but I think generally what I'd like your listeners to hear is that the supply channel will work very well, particularly here in the U.S. We have a very safe supply channel. And where manufacturers are, say in the case of Pfizer, where they have a very specific need and they've chosen to do that themselves, it'll work well, and I believe it will be safe. 

 

CLEMONS: You know, yesterday I happened to have a conversation with Moncef Slaoui, who's the chief adviser for Operation Warp Speed. And one of the themes that we talked about was really trust. He cares first about science. But he also cares about speed, that we've had to make some bets in manufacturing and whatnot before we necessarily had there, but solid science and then solid production commitments and then sensible distribution. But he was quite candid that he worried that, in this moment, not everybody trusts the system. What do you think we can do to shore up the trust that not only Americans, but essentially global citizens have in this process?

COLLIS: You know, it's a great point. And last week I actually got to speak at my daughter's school, and it turned out that there were 35 people on the call, many of them physicians, and the questions they asked me were so much around this issue of trust. 

So, Ken Frazier [Merck CEO] said something very interesting last week, which bears repeating. It's not a matter of vaccines, it's a matter of vaccination, so we could have. So far, the data on these two vaccines looks outstanding. It's literally a miracle, so far, what we've seen that hopefully will continue in this vein. But we need the public to trust. And I think you've seen some signs that there is more trust that more people are willing to take the vaccine. 

I love your point, Steve. It's an excellent one. We need to have quotas that we can understand that are communicable, that we can reach the investment that the companies have made in really producing ahead of approvals is quite remarkable. Again, unprecedented in my opinion. And, I think to the extent that we can unpoliticize the process, not only the prevention, but especially now these treatments that will be coming out, from vaccinations to anti-infectives, I think that that's gonna be very, very commendable, very, very helpful to society.

 

CLEMONS: You know, another part of this story that hasn't been much discussed, but I know it's part of your arena are therapeutics. We talk a lot about vaccines. Yesterday, in this discussion we had my friend Mihael Polymeropoulos, who's the CEO of Vanda Pharmaceuticals. ... They're involved with therapeutics, as opposed to vaccines and, you know, respiratory distress, these other sorts of dimensions of COVID-19 right now. ... Are you seeing therapeutics, and the demand for them being robustly met? And are you seeing promise in their application?

COLLIS: You know, we've seen this, over 500 medicines under development, so it's an absolute bonanza for live sciences and ultimately will be for society. This RNA technology — again I'm not really a clinician, I'm not really an R&D person — but you can't help but be fascinated by how this process has been so much more efficient and also how scalable the production is. So I think it's gonna really be a source of great benefit for mankind.  On the anti-infectives, you know, AmerisourceBergen has been honored to work with remdesivir, which was the first EUA approved product. We also worked, of course, with all of our customers for that anti-infective products for the intubation products, and by and large, the system has worked very well. You know, just to remind your audience we're not a big PPE company, so we really are involved in pharmaceutical-based care. But you know, there were a few shortages, sometimes when products were announced or touted as a miracle sort of cure, we had some shortages, but very, very few, and we managed through it well. AmerisourceBergen has worked with the government on the Strategic National Stockpile with the CDC and HHS, and we've worked most, most interestingly with with two of the EUA products: remdesivir and also the Lilly product that’s been approved now with very intricate programs which managed the inventory, manage the crisis hot spots and manage the most acute needs in different communities. And it's really intricate work where we've interspersed data and analytics between the CDC data, Johns Hopkins data, other other credible data sources to help but ultimately the manufacturers and, you know, the State Department and the government have made the allocation decisions, which we think is appropriate. We want to be a resource and sort of an infrastructure to all these companies; we don't want to be the decisionmaker. We certainly are very far from the discoverer of all these medications. We are honored, as you pointed out, that we can work with so many manufacturers to get access to them wherever the patients will need them. 

 

CLEMONS: One of the political realities that we're in right now, that I think people worry about is that you know, science and the development of science is global. Large firms like yours are transnational and sprawl the globe. Supply chains are global because of a lot of reasons — regulation, labor costs, transportation, etc. and all that. But there was this sort of seizure around this time of fear around national borders and countries doing things that were not necessarily consistent with those transnational realities. So I'd love to get your perspective on the global supply chain. And I also want to put you in charge for a moment of the Strategic National Stockpile. What should we do with it? What should be reformed? How could it be enhanced and improved? Because I also think that's a function of trust, right?

COLLIS: If you go back to the spring, the U.S. spring or the Northern Hemisphere spring, it was such a confusing time and literally I think it was quite, you know, unremarkable or anticipated that people would panic. Governments would panic, their citizens were under attack and we had over 80 countries, I believe, that put some sort of prohibition on export of APR and also we had a scrutiny of the supply chain that was unique. Even in AmerisourceBergen, where we're such a large procurer, we learned so many things about how many different countries are involved in a basic generic product, anti-infective products are quite remarkable. So, I think we have to learn the lessons from this pandemic. We have to make sure that we have a Strategic National Stockpile that will take into account the lessons we've learned. If I was in charge, I'd work with the wholesalers. I'd make sure that the inventory gets rotated so that we could be economically sparing with it, so we make sure that product doesn't expire. That wholesalers have got the natural demand for it that they can take that inventory and put it back into the market within safe timelines without it unnecessarily expiring — and then replenish it. And also we have the distribution and the resources and I think we are much more prominent in the government’s thinking in terms of being a solution provider to unique supply chain needs that they will have in the future. And certainly companies like ourselves and our peers have worked, I think, commendably with the government in this tough situation, and we also understand the manufacturer environment and the mindset, CGNP/FDA requirements. You know, we understand how to keep products safe, and our warehouses have got the appropriate licensing, the appropriate controlled substances and cold storage requirements. So we are a unique resource, in this country in particular, we cover over 90 percent of all prescriptions, so I think that that's something that if I was in charge, I would keep in mind. You know, there's an old expression — don't reinvent the wheel.

 

CLEMONS: The Biden administration is coming in 62 days. What wheels do they need to reinvent with industry or not reinvent in terms of getting not only their COVID-19 response, right, but also just kind of making sure that the private-public dimensions of responding to this crisis are solid rather than wobbly?

COLLIS: Yeah, I couldn't agree with you more. We really do need, you know, if we look at what we're gonna have the needs post-COVID, we do need new examples of private-public partnership. You know, I do believe that the overwhelming majority of companies are well intended. They want to do a good job for their customers. They want to do a fair job for their citizens, and that's the spirit. I think it's very important that government and business speak. That, you know, there's complex needs that we both have. There's a complex regulatory environment, there is environmental issues, there's safety issues, there's pricing issues. You know, our pharmaceutical industry, I think, earned somewhat of a black eye with some of the pricing practices and largely those have been eliminated. So literally, our industry has a chance to come out of the next few years as the hero of society, with the remarkable job that's being done with, with large companies collaborating with each other on an unprecedented scale. And really, if you think about where you know, this virus really became known to us in February/March and to have a vaccine potentially being administered to the you know the phase one participants by within one year, it's truly a miracle. So I look forward to a new era of cooperation. I look forward to a new era of respect for our industry and also discovery, because what we've learned is that we can get products approved a lot quicker, and hopefully the safety records continue to be exemplary, and the data continues to be as good as it's been. 

 

CLEMONS: Do you worry that as real, clear therapeutics that are vital for life saving, as vaccines come on board, for which there's gonna be a scramble, are we gonna be able to hold it together and make sure that those communities that need these therapies and treatments on the front line are going to get them in an orderly way? Or is this gonna become law of the jungle?

COLLIS: No, I'm very confident that this is going to function in an ethical and high-integrity manner. You know, if you look at how remdesivir has worked, I can tell you that we have had very good protocols. We've had good practices. And also, there's some unusual things here, right? If you don't get the second shot of the Pfizer vaccine, then you've invalidated what you did on the first time. So we're gonna have to work from an adherence point of view from a follow up perspective and use all the tools at our disposal. So, I think one of the smart decisions that the government has made is that there's a higher administration fee for the second vaccine than for the first one now. You know, should economics come into this? Probably not. But there is a practical mindset to this. So, you know, it's going to take all of us, all of us working together. I don't believe that medical professionals are going to prioritize wealthier people, and this will be a highly ethical allocation methodology — going, I think, first to front-line workers, those who have co-morbities, those who are most at risk, those who are very sick, and, you know, I'm expecting that with regards to myself that I'll only be a phase four vaccine recipient, unfortunately.