CORONADO, Calif. -- Ira Magaziner, one of the principalarchitects of the Clinton health-care reform plan, served up aWhite House invitation -- but few comforting answers -- tobiotechnology executives during a closed-circuit televisedaddress at the CalBio Summit '93 conference here last week.

Biotechnology officials quickly accepted the invitation extendedby Magaziner, President Clinton's senior health-care adviser, tosend a delegation to explain their concerns about the health-care plan. But some were left less than satisfied withMagaziner's responses to two of the three queries put to himfollowing his 20-minute talk.

"He was courteous, friendly and intelligent, which he is," saidCarl Feldbaum, president of the Biotechnology IndustryOrganization (BIO) in Washington, D.C. "But in terms of ourissues, we have no explicit recognition or acknowledgment thattheir position has changed. ... We still have a knife in ourheart."

Feldbaum and other biotechnology officials were alarmed bytwo provisions of a draft of the health-care plan released onSept. 7 that effectively would apply price controls or restrictthe use of innovative drugs and medical procedures, accordingto Feldbaum.

Concerns that new drugs could face imposed price ceilings orsharply curtailed use under a national medical plan has been afactor in a recent slowdown in biotechnology financing,according to several speakers at the one-day conference, whichwas hosted by the San Diego Biocommerce Association.

"We as an administration are very concerned by this decline,"Magaziner told the conference attendees on Friday. "Biomedand biotechnology are industries very important to thecompetitiveness of this country. The last thing we want to do isget in the way of the competitiveness of these industries."

However, Magaziner suggested that the plan's cooling effect onfinancing might be temporary and that financial markets wouldagain warm up to biotechnology as the Clinton plan becomesbetter understood. "The sooner we get by this point ofuncertainty, the better off all of us will be," he said.

The Clinton administration is interested in fostering both arestoration of the capital markets and a supportiveenvironment for biotechnology in general, Magaziner said. "Wewill increase the amount of research assistance the federalgovernment provides to biotechnology."

But as it stands, the Clinton plan could have long-lasting effects,according to Feldbaum.

In BIO's view, the first troublesome provision of the draft planwould be the creation of a National Health Board to, amongother tasks, determine the reasonableness of prices charged formedical products in light of greater study of medical outcomesof patients undergoing treatment.

Magaziner said the plan's authors envisioned not price controlson products, but simply publication of information ofcomparative costs and a growing body of medical outcomesresearch for specific products and procedures. "We thought thatthe publishing of information was a legitimate governmentfunction," he told those at the conference.

The notion of a National Health Board raises a red flag forFeldbaum and biotechnology executives, who fear that theboard would become a gatekeeper in regards to newtechnology and could blacklist unacceptable products thatdidn't immediately prove their worth.

"The industry is ready to compete in a competition ofoutcomes," Feldbaum said. "We think our products will be costeffective. But (the plan's authors) are taking a snapshot of thecurrent situation and not considering what innovation coulddo."

Another provision of the draft plan would empower by statutethe secretary of the Department of Health and Human Services(HHS) to determine products acceptable for use in the Medicareprogram on the basis of cost effectiveness.

Although HHS has been negotiating and jawboning on behalf ofMedicare for lower prices on drugs and other services for thepast two years, that role would become law and would likelyresult in a blacklist of forbidden products, Feldbaum said. "It'sessentially engraved it in granite."

Magaziner said: "Medicare will be a purchaser of products justlike private insurers. We want Medicare to be able to negotiatejust as hard as private insurers."

However, he underscored the Clinton administration's backingfor biotechnology as an important tool in achieving more cost-effective health care by providing a means to cut costs withoutsacrificing quality. "Technology is crucial to all that we're tryingto do in health care," he said.

Hoarse from a bout of the flu, Magaziner apologized for talkingat length and allowing time for just three questions. He thenoffered to meet personally with a delegation of biotechnologyofficials.

"We don't believe we have all the best ideas in the country," hesaid at the beginning of his address. "We don't expect that (theplan) will be left as we present it."

While he acknowledged that the plan's authors have beenaccessible, Feldbaum noted that the large health-care task forceformed no subcommittee and "had nothing to remotely addressinnovation" during the meeting that led to the formulation ofthe plan.

-- Ray Potter Special to BioWorld

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