WASHINGTON _ The House Ways and Means Committee onTuesday passed a health reform proposal that includes a PrescriptionDrug Payment Review Commission to determine whether a drug'sprice is reasonable _ and whether Medicare should pay it.Passed by a voice vote, the provision, part of an overall blueprint forreform, is a version of the 13-member Advisory Council onBreakthrough Drugs advocated by the Clinton administration toprevent price-gouging by manufacturers of valuable new therapeutics.Advocates of research into biotechnology have criticized the existenceof a drug-pricing panel as likely to inhibit investment in expensivebiotech research.They say investors are unlikely to pour money into such an expensiveenterprise if the federal government can limit the returns they canexpect from their investment.The National Venture Capital Association estimates that investors havepoured nearly $806 million into biotech firms that have approximately270 therapeutics or vaccines in development.Carl Feldbaum, president of the Biotechnology Industry Organization,decried the committee's proposal as "just as thoughtless a piece oflegislation as one could concoct."He said the bill "would have many of the same onerous responsibilitiesas the [administration's proposed] Advisory Council on BreakthroughDrugs. It leaves totally undefined the ways the commission wouldcome to decisions; whether the decisions would be reviewable, and, ifso, by whom."CBO Report Shows Pricing Panel Will Affect Few DrugsIn related news, the Congressional Budget Office (CBO) on Tuesdayreleased a report titled "How Health Care Reform AffectsPharmaceutical Research and Development," which examined theeffects of Clinton's drug pricing panel _ and echoed some concerns ofadministration critics.The CBO found that such a pricing panel would directly affect just ahandful of drugs. Between 1975 and 1991, the FDA approved anaverage of 22 drugs with new active ingredients or "new molecularentities" a year, the report says.Only three drugs annually would be considered breakthrough drugs,promising "major new therapeutic potential." Eleven new drugsannually offer moderate therapeutic potential.Nevertheless, the board's ability to determine whether a new drug waspriced at a "reasonable" level _ and to bar the drug from Medicare'sformulary if not _ could inhibit overall biotech research anddevelopment, the CBO said.The agency cited two key reasons:y The panel's influence would be a significant factor in Medicare rebatenegotiations and "might affect private negotiations as well."y Even though the number of drugs subject to the panel's deliberationswould be small, "the inhibiting effect on pharmaceutical companiescould be much greater." n

-- Steve Sternberg Special to BioWorld Today

(c) 1997 American Health Consultants. All rights reserved.