By Kim Coghill

Washington Editor

WASHINGTON ¿ Medicare and Medicaid patients who receive biotechnology drugs in an outpatient hospital setting next year may have to go to a doctor¿s office to get their medicine if the Centers for Medicare and Medicaid Services (CMS) reduces the amount it will pay on innovative products.

CMS, formerly HCFA, said next year it will reduce by 68.9 percent the pro rata pass-through payment for innovative medicines in the outpatient setting. The pro rata pass-through payment makes up a percentage of the total cost the government will pay for an innovative product. The percentage is not flat; rather, it¿s based on a government formula.

The proposed reduction would last one year, beginning Jan. 1, and is being considered because of a shortfall in the pass-through payment pool (money allocated by Congress).

Since these payments are made to hospitals, biotechnology companies would not be directly affected.

¿The drugs could be administered somewhere else, maybe in an inpatient setting, maybe in a doctor¿s office,¿ Sharon Cohen, vice president for government relations at the Washington-based Biotechnology Industry Organization (BIO), told BioWorld Today. ¿This would be disruptive to the patients because they may lose coverage or it will shift the site of service. Unfortunately, I think come January patients may be scrambling to find out where they need to get their care.¿

BIO wants CMS to ¿take a timeout and delay implementation,¿ Cohen said. A delay would give CMS a year to compile the proper outpatient data for innovative drugs and biologics currently in the pass-through pool.

And if the agency won¿t delay, BIO has a better solution ¿ increase the base percentage the government pays on innovative drugs from 68 percent to 85 percent. (The amount from the base percentage is added to the pass-through payment for a total.)

And still another option is for CMS to shift money from another fund to cover its shortfall.

BIO Staff Changes Reflect National Issues

Terrorist activities, as well as advancing science that made terms like cloning and stem cell research household words, are partially responsible for recent staff and management changes at BIO.

With the changes, the biotechnology industry gains an ally in the FBI.

Lee Rawls, BIO¿s former vice president for government relations, has been named counselor to FBI Director Robert Mueller.

BIO President Carl Feldbaum called Rawls a ¿national asset,¿ saying, ¿In the short term, as much as we¿ll miss Lee, this is the right thing for the nation. He¿s an expert in law enforcement areas and he has now become quite knowledgeable about the industry and its potential role in countering bioterrorism.¿

Cohen, who has served as BIO¿s vice president for health policy, replaced Rawls.

In another turn of events, Carey Lackman, BIO¿s chief operating officer for the meetings department, has taken Feldbaum¿s old job as chief of staff to Sen. Arlen Specter (R-Pa.). Feldbaum held the position from 1988-1993 before joining BIO. Lackman will be replaced by Cynthia Beckman, director of marketing communications worldwide for Intergen Co. in Purchase, N.Y.

Also reflective of the times, Feldbaum has named Michael Werner, BIO¿s director of federal government relations and bioethics counsel, the organization¿s first vice president of bioethics.

¿We have found that the [bioethics] issues come with increasing frequency and they are always extremely high profile,¿ Feldbaum said. ¿We needed to elevate our internal ability to deal with them as they come and they could be on medical privacy, cloning or stem cells, or it could come from some unexpected direction.¿

Brent Erickson, formerly director of BIO¿s industrial and environmental section, also was promoted to vice president of his division. Erickson also was recently elected vice chair of the Organization for Economic Cooperation and Development¿s Task Force on Sustainable Development.

Bush Sets Up Bioethics Council As Advisory Body

As promised in his Aug. 9 stem cell address, President George Bush has signed an executive order creating a council on bioethics headed by Leon Kass, a University of Chicago bioethicist. (See BioWorld Today, Aug. 10, 2001; and Sept. 17, 2001.)

Bush¿s council replaces former President Bill Clinton¿s National Bioethics Advisory Commission.

Like the 18-member Clinton commission, the Bush council also will seat 18 members and serve as an advisory body.

The council is charged with researching ethical issues related to embryo and stem cell research, assisted reproduction, cloning, uses of knowledge and techniques derived from human genetics, the neurosciences and end-of-life issues.

NIH Awards $25 Million To TIGR

The National Institute of Allergy and Infectious Diseases of the National Institutes of Health in Bethesda, Md., awarded The Institute of Genomic Research (TIGR) in Rockville, Md., a $25 million five-year contract to establish a center for functional genomics.

The new center, called the Pathogen Functional Genomics Resource Center (PFGRC), will centralize production, access and training for studying roles of genes and gene products, including proteins in a number of microbes known to cause disease.

In the near term, the center will provide scientists with microarray and genotyping technology, along with access to clone sets, genomic DNA and type strains. Also, the center will develop a center-client web-based interface so scientists can easily access and acquire resources. More info on the PFGCR is at

Senate To Consider Ban On Cloning Today

Feldbaum¿s prediction was right last week when he said an announcement by Worchester, Mass.-based Advanced Cell Technology Inc. (ACT) could accelerate Congress¿s consideration of cloning. (See BioWorld Today, Nov. 27, 2001.)

ACT said it has created the world¿s first human embryos through therapeutic cloning, or somatic cell nuclear transfer. And in response, the Senate today is scheduled to vote on Sen. Sam Brownback¿s (R-Kan.) legislation that would ban all human cloning ¿ including therapeutic cloning ¿ for six months.

A Brownback aide said the senator wants to push for a permanent ban next spring.