Washington Editor

WASHINGTON – In the unforgettable presidential race last year, prescription drug coverage for seniors soared to the top of the list of controversial issues likely to appear as priorities in the 107th Congress.

And while President-elect George W. Bush and former Vice President Al Gore presented differing Medicare modernization proposals aimed at helping seniors pay for prescription drugs, neither plan was embraced by an overwhelming majority of taxpayers.

Regardless, plenty of congressmen have their own ideas about the solution and the year 2000 was time to present proposals.

In May, Sens. John Breaux (D-La.) and Bill Frist (R-Tenn.) introduced their plan, “Breaux-Frist 2000,“ which establishes a new, executive branch agency, similar to the Social Security Administration, with an outside advisory board to administer the competitive aspects of the Medicare program.

The proposal establishes a voluntary prescription drug benefit available to all Medicare beneficiaries. Beneficiaries using the Medicare+Choice plan – also known as Medicare HMOs – would receive the outpatient prescription drug benefit through those plans. Beneficiaries in the fee-for-service Medicare program would be able to select a drug benefit offered by private sector insurance.

And on the other side of the fence, the Democrats in May presented their own plan. Led by then-President Bill Clinton and U.S. Rep. Richard Gephardt (D-Mo.), a proposal was announced to give Medicare beneficiaries the option of enrolling in a prescription drug plan that would defray 50 percent of the costs of the prescription drugs up to $5,000.

The Democrat's “Medicare Part D“ plan would be managed by private-sector contractors who would negotiate volume discounts, and all beneficiaries would receive at least 50 percent premium support. Low-income beneficiaries would receive a higher premium support.

These were by no means the only plans on the table. Sen. Jim Jeffords (R-Vt.) had a proposal to reform the Medigap program, and Sen. Edward Kennedy (D-Mass.) and Rep. Pete Stark (D-Calif.) introduced interim drug coverage provisions, as did the Republican leadership in the House and Sens. Olympia Snowe (R-Maine) and Ron Wyden (D-Ore.) in the Senate.

Maine Drug Law Spurs State Actions

Even state lawmakers jumped into the fire surrounding the prescription drug debate. Spurred by inaction in Congress, legislators, unions and consumer organizations in 20 states in June pledged to take action to lower the costs of prescription drugs. The states are: Alaska, Arizona, Colorado, Connecticut, Florida, Georgia, Hawaii, Iowa, Illinois, Maryland, Michigan, Minnesota, Montana, North Carolina, New York, Pennsylvania, South Carolina, Vermont, Washington and Wisconsin.

The law serving as the impetus for the move was passed in Maine and allows the state to negotiate for Maine residents lacking prescription drug coverage. Chellie Pingree, majority leader of the Maine Senate and sponsor of the Maine bill, said the measure allows the state to lend its market clout to residents who otherwise pay as much as 50 percent more for drugs than health maintenance organizations or the state's Medicaid program. Pingree claims the measure uses market forces to help lower the costs for prescription drugs.

And all was progressing in Maine until the Washington-based Pharmaceutical Research and Manufacturers of America (PhRMA) filed an injunction against the state, claiming the law interferes with the nationwide federal Medicaid program and violates the Commerce Clause of the Constitution, which prohibits states from regulating transactions outside their borders.

In October a U.S. District judge approved a preliminary injunction against implementation of Maine's law.

Without a doubt, the prescription drug debate is not over.

In his first month of office, President Bush released a $48 million temporary prescription drug plan that would create block grants for states with drug subsidy programs, dispensing $12 billion annually for low-income Medicare patients.

The four-year proposed plan would pay the entire premium for drug coverage for Americans 65 and older with incomes up to $11,600, and it would pay half for those with incomes up to $15,000. Also, it would provide catastrophic coverage for all Medicare patients if their annual drug costs exceed $6,000.

Opponents criticized the plan, saying it would help only a fraction of Medicare recipients and it could impede comprehensive Medicare reform and create an inconsistent patchwork of drug coverage initiatives that vary from state to state.

Getting Around Costs Through Reimportation

At least some members of Congress attempted to solve the prescription drug issue in 2000 through the drug reimportation provision added to the annual Agriculture Appropriations bill.

Clinton in November signed the bill directing the FDA to implement a regulatory program to monitor United States borders and test reimported drugs for safety and counterfeiting.

The House provisions allow the reimportation of FDA-approved prescription drugs for personal use from countries with lower drug prices. The Senate measure, sponsored by Jeffords, permits pharmacists and wholesalers to purchase FDA-approved drugs from countries where the identical drug is sold for less. The amendment applies to U.S.-manufactured drugs or drugs produced in FDA-inspected facilities.

The Washington, D.C.-based Biotechnology Industry Organization (BIO) issued a statement in October saying the reimportation approach was a stop-gap, election year 'solution' to the prescription drug issue and that it would harm the FDA and could put the health of seniors at risk.

And a month before the Clinton administration ended, Health and Human Services Secretary Donna Shalala refused to certify the reimportation plan, saying she could not demonstrate that it was safe, nor could she say it would reduce costs. In a letter to Clinton, Shalala said she would not request the $23 million that was appropriated for FDA implementation costs in the fiscal year 2001 appropriations bill.

The issue, however, is not dead, as Jeffords issued a statement in early January 2001 saying the American Law Division of the Congressional Research Service (CRS) said the secretary appointed under President Bush has the authority to overrule the Shalala decision.

He also continues to rally support among others in Congress to band together to convince Bush to approve the amendment.

Gene-Based Patents Must Show Utility

The federal government in early January 2001 put the final stamp of approval on a new set of guidelines for gene-based patents focusing on the “utility“ requirement, meaning the invention must be useful.

The U.S. Patent and Trademark Office guidelines say the invention must have a well-established utility and “a person of ordinary skill in the art would immediately appreciate why the invention is useful based on the characteristics of the invention.“

The guidelines instruct patent examiners to reject a patent claim if the applicant offers no credible assertion of specific and substantial utility and if the claimed invention “does not have a readily apparent, well-established utility.“

Throughout the guidelines the PTO states that genes and gene-based products remain within the scope of patent protection. Also, the agency published public comments seeking to ban gene patents, all of which the PTO rejected.

The proposed guidelines had been in use throughout 2000.

Privacy Of Medical Records Established

Just prior to leaving office, former President Bill Clinton released the nation's first-ever standards for protecting the privacy of Americans' personal health records.

The regulations protect medical records and other personal health information maintained by health care providers, hospitals, health plans and insurers. The standards require that most providers get consent from patients for routine use and disclosure of health records in addition to requiring their authorization for nonroutine disclosures.

The standards also limit nonconsensual use and release of private health information; give patients new rights to access their medical records and to know who else has accessed them; restrict most disclosure of health information to the minimum needed for the intended purpose; establish new criminal and civil sanctions for improper use or disclosure; and establish new a requirement of access to records by researchers and others.

“The implications here are that the rule is designed to try to prevent the inappropriate use of personal of medical information, and that would include genetic information,“ said Michael Werner, director of federal government relations and bioethics counsel for BIO. “We all know that one implication of the genome project is that we are going to start getting important medical information, so rules that protect the inappropriate use of that information are important and valuable.“

Employers are prohibited from accessing health information of employees without receiving authorization.

With few exceptions, under the new regulation, an individual's health care information will be used for health purpose only, including treatment and payment. For example, an employer may not access the information for hiring, firing or promotions without permission from the patient.

Many scientists say health insurers and employers are about five years away from having the ability to determine whether an employee is predisposed to a number of illnesses. This capability is based on significant advances in understand the human genetic blueprint.

Francis Collins, director of Bethesda, Md.-based National Institutes of Health's National Human Genome Research Institute, and J. Craig Venter, president and chief scientific officer of Rockville, Md.-based Celera Genomics, stood on either side of Bill Clinton in June 2000 as the president announced that the scientists had completed a working draft of the genome's sequence.

One analyst compared the scientific accomplishment to the announcement in 1903 when the Wright brothers got their plane off the ground for 12 seconds.

Congress Rejects Columbia Patent Extension

Biotechnology insiders breathed a sign of relief when Congress recessed in fall 2000 without granting Columbia University an extension on its patent for the cotransformation of mammalian cells – the process of introducing foreign genes into mammalian cells to produce proteins. That process enables the production of at least 18 currently marketed products, including Amgen Inc.'s Epogen, Genzyme Corp.'s Cerezyme and Genentech Inc.'s Pulmozyme.

Under the Drug Price Competition and Patent Term Restoration Act (Hatch-Waxman), the companies producing drugs can receive patent extensions for up to five years to compensate for regulatory delays these drugs and biologics experience at the FDA. Columbia argued that the same delays that prevented the companies from selling their products lessened the value of the cotransformation patent by preventing Columbia from collecting royalties on the sales of products utilizing the cotransformation technology.

Columbia held the patent since 1983 and it expired Aug. 16, 2000. The university wasn't able to collect royalties until there were product sales beginning in 1988. Columbia was seeking an 18-month extension.

NIH Agrees To Fund Stem-Cell Research

NIH Agrees To Fund Stem-Cell Research

The Bethesda, Md.-based National Institutes of Health in August 2000 finalized guidelines related to pluripotent stem cell (PSCs) research nearly two years after PSCs were first isolated, sparking political, legal and ethical questions.

Human PSCs are capable of developing into many types of specialized cells, offering the possibility of a renewable source of replacement cells and tissue to treat a myriad of diseases, conditions, and disabilities, including Parkinson's and Alzheimer's diseases, spinal cord injury, stroke, burns, heart disease, diabetes, osteoarthritis and rheumatoid arthritis.

One of the most controversial matters in developing the guidelines was finding an acceptable position between the desire of NIH officials – notably former Director Harold Varmus – to fund research on PSCs with a federal law banning research on embryos, from which the cells are derived.

Under the approved guidelines, funding for the derivation of human pluripotent stem cells is prohibited, but funding is allowed for research that uses the cells after they have been collected.

But debates surrounding government-funded embryonic stem cell research likely will continue as Bush stated during his campaign that he opposes such a use of NIH money. And if he stops the money, biotechnology insiders say the move will slow academic efforts.

Adding Humans To Cloning Debate Adds Controversy

Among the issues expected to resurface in 2001 is the cloning debate, which re-entered the news early in the year when an international group of reproductive experts announced plans to launch an effort to clone human in order to provide children to infertile couples.

Panayiotis Zavos, of the Andrology Institute of America and the Kentucky Center for Reproductive Medicine and In Virto Fertilization in Lexington, Ky., said he and another scientist, Severino Antinori, likely will have a viable embryo available for implantation in a woman's uterus within 18 months.

A voluntary moratorium on cloning human beings in the United States was implemented in March 1997 as an immediate response to concerns raised by the cloning of a sheep, named Dolly, from genetic material of an adult cell.