WASHINGTON _ Sen. William Cohen (R-Maine) plans to introducea bill within days that would establish a Prescription Drug Council tofurnish Congress, health care providers and consumers with drugpricing information.Cohen made the announcement at a hearing of the Senate Committeeon Governmental Affairs on Wednesday. The hearing examined arecent Government Accounting Office (GAO) report that found U.S.consumers pay significantly more for prescription drugs than theircounterparts in Canada and Europe.Cohen's proposal calls for a Prescription Drug Council to be appointedby the director of the Office of Technology Assessment (OTA) andcomposed of 11 to 12 members. According to Cohen's spokesmanMichael Townsend, council members would include experts inpharmacoeconomics, medicine, biotechnology and prescription drugreimbursement policies, as well as a consumer representative."The council will not have the authority to set prices or limit profits ofdrug manufacturers, but it will monitor both domestic and foreign drugprices, offer information on the cost-effectiveness of drugs, and makerecommendations to Congress on ways to reduce the burden of highdrug costs for consumers and taxpayers," explained Cohen.Townsend said the council would function to provide oversight,information and research in the specialized area of drug pricing. Hesaid that government agencies normally given that task, such as GAOand the Congressional Budget Office (CBO), do not have sufficientexpertise to do the job adequately.The council would monitor five main areas: domestic spending on andaccess to drugs; the cost-effectiveness of drugs; the federalgovernment's role in drug research and development; comparisonsbetween drug prices and spending in different countries; and equalaccess to price discounts for drug buyers (i.e., retail pharmacists vs.Health Maintenance Organizations).Cohen proposes that the council report, as appropriate, to the SenateGovernment Affairs Committee or the Senate Special Committee onAging. Other details, such as how often the council would meet andunder what circumstances, have yet to be finalized.Wednesday's hearing was co-chaired by Sens. David Pryor (D-Ark.)and Byron Dorgan (D-N.D.). Pryor is chairman of the Senate SpecialCommittee on Aging and is a member of the Government AffairsCommittee, which is chaired by John Glenn (D-Ohio). Glenn did notattend the hearing on drug pricing. However, Cohen, Pryor, Dorganand Sen. Jim Sasser (D-Tenn.) all showed up for the hearing, makingstatements for the record and grilling speakers who testified.Sarah Jaggar, director of health financing and policy issues in theGAO's Health, Education and Human Services Division, told senatorsthat manufacturers of brand-name prescription drugs typically chargemore for identical drugs in the U.S. compared to other industrializedcountries.GAO data showed that in 1991, a sample of 121 frequently dispenseddrugs cost 32 percent more in the U.S. than in Canada if a commonU.S. prescription of each drug were purchased at factory prices in eachcountry. Likewise, a 1992 sample of 77 frequently dispensed drugscost wholesalers 60 percent more in the U.S. than in the U.K. Inaddition, current wholesale prices in Sweden are generally lower thanin the U.S.Jaggar said GAO findings were consistent with other international pricecomparison studies, including preliminary results from a new study bythe Department of Health in the U.K. The U.K. study showed that asample of 26 commonly prescribed drugs would cost over twice asmuch (102 percent more) in the U.S. than in the U.K. The study alsofound that U.S. prices exceed those in Germany, the Netherlands, Italy,Spain and France."In each of the countries we studied, the government has imposednational pharmaceutical spending control policies, some regulatory andsome more market-based," said Jaggar. "The balance struck variesfrom country to country _ ranging from direct government control ofpharmaceutical pricing and spending to strengthening competition byreshaping incentives."Jaggar said that France has imposed stringent product-by-product pricecontrols while Canada's Patented Medicine Prices Review Boardcontrols price increases for prescription drugs. In the U.K., drugmanufacturers have some leeway in pricing but the government spurscompetition by encouraging physicians to prescribe less expensivemedicines. Both Sweden and Germany limit governmentreimbursement for individual drug products; in Germany, the limits arecoupled with caps on overall pharmaceutical spending.Although price control mechanisms used by European countries havebeen successful in lowering the prices of drugs, Jaggar said overallpharmaceutical expenditures in those countries have risen. That'sbecause the consumption of drugs there is rising. Jaggar attributed therise to Europe's aging population, different prescribing patterns byEuropean doctors and a general disdain for the use of (cheaper) genericdrugs. n
-- Lisa Piercey Washington Editor
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