Washington Editor

WASHINGTON - The Senate's failure this week to pass one of two Medicare plans for prescription drugs has Washington insiders wondering whether the split chamber will be able to reach a decision before the mid-term elections.

As in many issues, both sides basically want the same thing - that is, to provide affordable prescription drugs to America's elderly. But the dividing question is how to provide that drug coverage.

The Democrats want to spend $594 billion on a government-run prescription drug program, while the Republicans are seeking $370 billion to subsidize coverage provided by private health care companies. The Democrats failed in a 52-to-47 vote; meanwhile, the GOP failed in a 51-to-48 vote. (Sixty votes are needed for approval.)

Although the Washington-based Biotechnology Industry Organization (BIO) did not endorse either plan, Patrick Ronan, BIO's director of government relations, told BioWorld Today that the GOP, or "tripartisan," legislation contains provisions closely related to BIO's principles on Medicare coverage, including ensuring access to breakthrough drugs and encouraging research and development. The tripartisan legislation was written by moderate representatives of both parties, as well as Sen. Jim Jeffords (I-Vt.)

Within hours of the failing votes, senators were working to hash out a compromise plan that could be approved a few days before the month-long summer recess begins Aug. 5. If new legislation materializes, it could be attached to a more pressing measure that threatens the biotechnology and pharmaceutical industries.

That legislation, drafted by Sens. John Edwards (D-N.C.) and Susan Collins (R-Maine), is designed to change provisions of the Hatch-Waxman Act of 1984, which created the generic drug industry. (See BioWorld Today, July 17, 2002.)

BIO said the Edwards-Collins amendment (S.812) would "abolish patent rights if litigation is not initiated within 45 days of notice by a generic that it intends to challenge a patent, or if a new drug applicant failed to list its patent with the FDA within 30 days."

The Senate is expected to vote on Edward-Collins by next Tuesday.

Sharon Cohen, BIO's vice president for government relations, issued a prepared statement saying, "Attacking the American patent system does nothing to bring senior citizens the prescription drug coverage they need and want under Medicare."

Merrill Lynch Documentation Sought In ImClone Case

The House Energy and Commerce Subcommittee on Oversight and Investigations is looking deeper into business transactions conducted by Merrill Lynch & Co. Inc.'s Roseland, N.J., office one day before ImClone Systems Inc. announced that the FDA had rejected its application for Erbitux, a cancer drug.

Subcommittee chairman Rep. James Greenwood (R-Pa.) sent Merrill Lynch a letter requesting that the brokerage house turn over all records related to ImClone stock trades from Dec. 3, 2001, to Dec. 28, 2001.

Merrill Lynch broker Peter Bacanovic unloaded stock for Martha Stewart, CEO of Martha Stewart Living Omnimedia Inc., and Aliza Waksal, daughter of former ImClone CEO Sam Waksal, ahead of the FDA's announcement Dec. 28.

According to published reports, the subcommittee investigation revealed that after Aliza Waksal's shares were sold, a call from ImClone to Merrrill Lynch was made, and within the hour, Merrill Lynch began buying ImClone stock.

Sam Waksal was arrested in June on insider trading charges related to advising family and friends to dump ImClone stock in advance of the FDA announcement. The federal government's two-week extension on the deadline to indict Waksal ends Friday. (See BioWorld Today, June 14, 2002, and June 21, 2002.)

Last week, it was revealed that six ImClone employees, including executives, sold millions of dollars in stock weeks before the FDA announcement. Disclosure rules did not require the employees to make the sales public.