WASHINGTON _ President Clinton's quixotic push for health reformhas begun to rack up successes, with deadlocks broken in two keycommittees, and the Senate Finance Committee inching towardcompromise. How the biotech community will fare, however, is stilltoo close to call.But the President's narrow victories in the House Education and LaborCommittee on Thursday and the Senate Labor and Human ResourcesCommittee three weeks ago guarantee that Democratic leaders in bothchambers of Congress can carry versions of the President's bill to thefloor.The recent compromises also suggest that the provisions with thegreatest potential impact on the biotechnology industry _ theAdvisory Council on Breakthrough Drugs and the rebate on Medicaredrugs _ may, in some form, become law."We've entered into the beginning of the end game," said CarlFeldbaum, president of the Biotechnology Industry Organization. "Itwas only a few weeks ago that everyone hoped the prospect of pricecontrols on breakthrough drugs was dead."It appears now that we are headed for a shootout."The bill that could have the greatest potential impact on biotechnologyis the version passed last week by the House Ways and MeansCommittee, which would establish a Prescription Drug PaymentReview Commission with substantial power to make recommendationson drug prices _ all drug prices, not just breakthrough drugs.The bill, heavily influenced by health subcommittee chairman Rep.Fortney "Pete" Stark (D-Calif.) would also provide a prescription drugbenefit for Medicare recipients, which the Congressional Budget Officeestimates would increase the demand for prescription drugs by the 65-and-over population by 4 percent.To reduce the potential windfall from heightened demand, however,the bill would mandate a new, 50 percent rebate on drugs administeredduring surgery and hospitalization. It would also retain the Clintonprovision that would require drug manufacturers to pay a rebate of 17percent of the average retail price, but just on brand-name drugspurchased through Medicare.So sweeping is the Ways and Means version that some Democrats fearthat their committee had passed a measure that was too extreme to passeven the more liberal House.The House Education and Labor Committee passed two bills. Onewould establish a single-payer, Canadian-style system financed bytaxes. The second is less generous, and more closely modeled on theClinton bill.It would mandate the president's Advisory Council on BreakthroughDrugs, which would be responsible for using a complex formula todetermine whether the launch price of a breakthrough drug is"reasonable." It would also retain a rebate on brand-name drugspurchased through Medicare.Labor, HR Version Favors BiotechThe Senate Labor and Human Resources Committee three weeks agopassed a bill that could prove far more favorable to biotechnologyresearch and development. The committee, chaired by Sen. TedKennedy (D-Mass.) does not mandate formal oversight on drugpricing, and it does not require manufacturers to provide rebates ondrugs for Medicare recipients.The bill does call for a three-year study of the impact of medicaltechnology on health costs, to be carried out by the federal Agency forHealth Care Policy and Research.Feldbaum said that Kennedy turned to be an unexpected ally ofbiotechnology research and development. "He's someone who, a yearago, we might not have expected to be an ally, but he is now,"Feldbaum said.The House Energy and Commerce Committee remains deadlocked,with no majority for any plan. Ironically, Rep. John Dingle (D-Mich.)could still play an important role by helping to hammer out acompromise between House and Senate reform measures, even if hiscommittee doesn't produce a bill.The Associated Press reported that the Senate Finance CommitteeFriday night presented the chairman with a compromise proposal thatneither achieves universal coverage by any deadline nor requiresemployers or individuals to purchase health insurance. Further details,including news of any kind of drug price control element in theproposal, were unavailable at the time. However, the chairman's mark-up did not seek to regulate drug pricing, in large part because it did notprovide a prescription drug benefit to the elderly.In the end, however, compromise is what will matter, and lesser knownlegislators, like Rep. John J. Moakley (D-Mass.), chairman of theHouse Rules Committee, could become a key broker in shaping thefinal legislation. Moakley comes from Worcester where he has hadregular contacts with biotech companies and the Massachusettsbiotechnology council.Any compromise will have to pass both chambers, and that will be thegreatest challenge of all, Feldbaum said."Lest we forget," he said, "this will be a very close vote." n
-- Steve Sternberg Special to BioWorld Today
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