WASHINGTON _ The Clinton administration's drive to hold the lineon drug prices would get a boost from a bill introduced Friday bySenators David Pryor, (D-Ark.), and Jim Sasser (D-Tenn.), whichwould require drug makers to negotiate equitable price concessions anddiscounts with all purchasers of prescription drugs.The measure would expand a provision in the White House's blueprintfor reform that, if passed as written, would require drug makers tonegotiate rebates with the Secretary of Health and Human Services forprescription drugs to be covered under Medicare. The administration'sproposal was designed to limit the windfall profits likely if the WhiteHouse succeeds in covering all drugs purchased under Medicare.But four of the five Congressional committees trying to fashioncompromise measures have proven reluctant to back the White Houseproposals. Only the relatively liberal House Ways and Meanscommittee has retained elements of the Clinton provisions in itscompromise plan.Pryor and Sasser's proposal would essentially shift the debate overpharmaceutical-market reform to a new, and potentially moresympathetic political arena _ the Senate Select Committee on Aging."For years the drug industry has refused to negotiate discounts or pricebreaks with large community and chain pharmacy buying groups," saidPryor, a long-time Clinton ally and chairman of the committee onaging, in a statement released Monday."As a direct result," Pryor said, "local community pharmacists havehad to charge consumers _ including thousands of older Americans _the highest prices in the industrialized world for prescriptionmedications. This legislation will put all purchasers of prescriptionmedication on an equal footing."Cut Prices Through Medicare By 17 PercentThe new legislation, called the "Pharmaceutical Marketplace ReformAct of 1994," would:y Require manufacturers of brand-name drugs to cut the average retailprice for drugs purchased through Medicare by 17 percent, either byoffering a discount or a rebate.y Permit the Secretary of Health and Human Services to negotiaterebates with manufacturers of new drugs that are covered by Medicare.The negotiations would occur if Medicare is the primary payer for thenew drug; if the new drug is not cost-effective at the price themanufacturer is charging; if the new drug is less expensive in otherindustrialized nations; or if the federal government had a substantialrole in developing the new drug.y Permit the Secretary to bar the drug from the Medicare formulary, orrequire prior authorization before use, if a manufacturer will notnegotiate in good faith.y Require that generic versions of brand-name drugs be dispensed toMedicare beneficiaries, but only if the FDA has found that the genericversion is equivalent to the brand-name version.y Require that pharmacists counsel patients on the proper use of drugsand check prescriptions to safeguard elderly purchasers from adversereactions.y Require that Medicaid recipients receive generic drugs unless thephysician has termed the brand-name drug "medically necessary" in hisown writing on the prescription slip.y Require that state Medicaid programs dedicate an increasingproportion of their drug expenditures to generic drugs. Currently, statesdirect 70 to 75 percent of their drug expenditures to generic drugs. Thebill would require states to increase that proportion to 90 percent by1996, or risk losing federal matching funds.y Require drug makers to treat all buyers of their products equitablyand fairly when negotiating price concessions and discounts. It wouldrequire manufacturers to offer price concessions on the same terms andconditions to all purchasers.y Establish an 11-member Prescription Drug Payment ReviewCommission to monitor Medicare drug reimbursement and report toCongress on the operation of Medicare's drug program.In addition, the bill would require all states to hold health plans to"minimum standards" for providing pharmaceuticals to their enrollees_ again at the risk of losing federal matching funds. Under thisprovision, all health plans would be required to establish a Pharmacyand Therapeutics Committee to develop therapeutic formularies andmonitor drug use within the plan. Health plans would be required touse the formularies.David Beier, vice president for government affairs for Genentech Inc.,of South San Francisco, Calif., said the proposed legislation runscounter to the intent of health reform."The basic thrust of health reform," Beier said, "is to improve accessand quality of care. Quality of care means that more money goes intoresearch and development of new drugs. This bill does not have asingle provision that is going to increase research and development intonew drugs for serious unmet medical needs."Various other industry representatives and a spokesman for theBiotechnology Industry Organization declined to comment on thelegislation Monday because they had not yet reviewed the bill. n

-- Steve Sternberg Special to BioWorld Today

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