WASHINGTON _ The health care reform plan crafted by Rep.Fortney "Pete" Stark, D-Calif., squeaked through the healthsubcommittee of the House Ways and Means Committee late last weekby a vote of 6-5. However, the committee's chairman, DanRostenkowski, D-Ill., warned that the bill may be unrecognizable afterthe full committee revises it.When one Republican member of Stark's health subcommittee forced aformal vote on the Clinton administration's Health Security Act lastweek, all seven Democrats voted "present" while all four Republicansvoted "no," signifying a defeat for the president's plan. But coreelements of Clinton's plan, such as universal coverage, employermandates and cost controls, are contained in Stark's plan.Rostenkowski said last week that any version of health care reform thatmakes it past his committee will be "much more conservative" thaneither Clinton's or Stark's plan for health care reform. Biotechnologyexecutives may breathe a temporary sigh of relief at this news sinceboth plans contain formal mechanisms to scrutinize drug prices.Biotechnology Industry Organization (BIO) President Carl Feldbaumsuggested that current observers of the reform process listen toRostenkowski. Feldbaum said that Clinton's Health Security Act andStark's proposal are part of a self-correcting process."The Stark bill has pulled the whole health care argument hard to theleft (on the political spectrum), but it will wind its way back to thecenter," predicted Feldbaum. Feldbaum and others have said that plansthat rely heavily on government regulation _ such as Clinton's andStark's _ are probably doomed because moderate and conservativepoliticians will oppose them.Stark's bill contains some of the most far-reaching drug price cost-containment measures yet seen, according to BIO. For example, Stark'splan sets a maximum overall budget for drug expenditures, as well asmaximum rates of payment for every individual drug.As in Clinton's plan, the Stark plan includes a required manufacturers'rebate for drugs reimbursed by Medicare. The amount of the baserebate would be the greater of either 17 percent of the averagemanufacturer's retail price, or the difference between the averagemanufacturer's retail price and the average manufacturer's non-retailprice. If manufacturers refuse to provide information on the averageretail and non-retail prices, the secretary of the Department of Healthand Human Services (HHS) could impose financial penalties oncompanies.Under Stark's plan, if the HHS secretary rules that the launch price of anew drug were excessive, she would have the option of negotiating arebate directly with the manufacturer instead of using the base rebateamount.Feldbaum said his organization has worked with legislators to establisha reputation as "tough, pragmatic and flexible." Although BIO hascompromised on certain issues, such as recent revisions to the OrphanDrug Act (see BioWorld, March 28, 1994), the biotechnology industrywill be inflexible on any health plan that includes a committee toreview the prices of new drugs or other mechanisms to set drug prices,Feldbaum said.The industry will add its voice to a chorus of industries, businesses andindividuals who have argued that various aspects of health reform plans_ from new taxes to employer mandates _ will have catastrophiceconomic results. The challenge facing legislators still remains: how doyou pay for health care reform?"I don't know where the revenues are that we're going to use to fundthis program," Rostenkowski told the Washington, D.C.-based journalCongress Daily on Monday.Lawmakers will get some time to ponder that problem during thetraditional two-week spring recess from March 28 to April 8. Afterthat, it's back to the political trenches for legislators in both the Houseand Senate and back to the congressional hearings circuit forbiotechnology executives ready to plead their case against what theyperceive as price controls.

-- Lisa Piercey Washington Editor

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