WASHINGTON _ Although the biotechnology and pharmaceuticalindustries could justifiably claim victory in this year's health carebattle, the future could bring even bigger challenges.Early on, the drug industry slapped the label "price controls" on drugcost containment measures _ such as breakthrough drug committees,prescription drug price review commissions, Medicare rebates andblacklisting _ and it stuck. Most of the offending elements incomprehensive health care reform bills were tied to a proposed newMedicare prescription drug benefit."Certainly the biotech and pharmaceutical industry's arguments weredramatic and were heard and acted upon in this Congress," JudithWagner, a senior health care analyst at the Office of TechnologyAssessment, told BioWorld. "The industry argued against pricecontrols, with powerful logic."Comprehensive health care reform bills, along with the costly newoutpatient prescription drug entitlement most of them contained, nowappear to be politically dead. Scaled-back bipartisan bills that sproutedup in late August before Congress left town for an abbreviated summerrecess generally didn't include prescription drug benefits or pricecontrols.But the issue of drug pricing will likely dog the pharmaceutical andbiotechnology industries as long as certain segments of society pay fordrugs out-of-pocket."Ultimately, the question of how the pharmaceutical industry isperceived will hinge on how clinically important new drugs are pricedin the future and whether or not those prices are perceived asextraordinarily burdensome by the public," predicted Wagner."The question that the biotechnology industry will still have to face is,how will their drugs be delivered to the elderly and the uninsured andthe under-insured?" Greg Simon, chief domestic policy advisor to vicepresident Al Gore, told BioWorld. "People will continue to run into theproblem of having to pay full price for drugs that they can't afford. In aworld without health care reform or a Medicare drug benefit, theproblem is just that much worse."Abbey Meyers, president of National Organization of Rare Disorders,agrees. Meyers warned that the death of health care reform this yearmay lead to a public backlash about health care costs in the future. "Ifsomething passes this year, it probably would have been better for theindustry than if nothing happens," she told BioWorld. "Two to fouryears down the road we could even have a single-payer system."Cost-Effectiveness Studies Could Be CrucialMeyers said that biotechnology companies could be singled out in thefuture because their products are expensive and could be blamed formedical inflation. She said she believes that cost-effectiveness studieswill become a critical part of the pricing rationale for biotechnologycompanies and others who will have to justify high prices to the public.But pinning all hopes on cost-effectiveness studies could be risky,according to John Coster, an assistant professor at the University ofMinnesota's PRIME Institute, which conducts research on economicissues in the pharmaceutical market. "Cost effectiveness is not yet awell-defined concept within the academic, scientific and medicalcommunities," said Coster, who worked for outspoken drug industrycritic Sen. David Pryor (D-Ark.) from 1990 until last April."While it's an important concept, cost-effectiveness does not registerwith the average consumer. They just know that they can't afford thedrug and that it's a choice between loss of livelihood or loss of life," hesaid. "Politicians can't write letters back to outraged constituents andenclose a cost-effectiveness study. Politicians are here to stay and drugpricing will continue to be an issue."Simon agreed that the problem of drug pricing for those who don'thave drug coverage "doesn't go away just by proving that the price isjustifiable." He praised the biotechnology industry for its efforts todistribute drugs to those who can't afford them, but said that as theindustry gets larger and more successful, such programs may becomemore difficult to administer."The question is how are we going to make biotech drugs reasonablypriced and widely distributed and the answer is, I don't know," saidSimon. n
-- Lisa Piercey Washington Editor
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