The administration's trial balloon on drug pricing early lastweek sent tremors throughout the biotechnology industry.

Although the proposed price review board would have lackedteeth, its focus on unique drugs would have driven companiesto invest in "me-too" drugs, Lisa Raines, vice president forgovernment relations at the Industrial BiotechnologyAssociation (IBA), told BioWorld.

But the shudders coursing through the community may havebeen premature. "There have been so many trial balloonsfloating around here it looks like London during the Blitz,"Steve Jenning, a staffer on Rep. Ron Wyden's, D-Ore.,Subcommittee on Regulation, Business Opportunities andTechnology, told BioWorld.

Ultimately, biotechnology's treatment will depend upon howCongress deals with the president's health care reformproposal, which is due next month.

The administration's commitment to biotechnology runs deepat the highest levels. And in Congress, even those on the leftare listening sympathetically to the industry's emissaries.

While he was governor of Arkansas, Clinton commissioned astudy on two questions: Could Arkansas become the nation'shothouse for biotechnology, and did the U.S. need a nationalpolicy. The answers were no and yes, respectively, according toG. Steven Burrill, national director of the manufacturing andhigh-technology group at Ernst & Young, who conducted thestudy. Burrill also spent time with Gore long before the twopoliticians became a team.

Burrill also discussed biotechnology with Secretary of Healthand Human Services Donna Shalala while she was head of theUniversity of Wisconsin and Burrill was on the board of thebusiness school. "I think she is a believer," he told BioWorld.

Clinton will probably make the final decision on drug pricing --after consulting with his inner circle of health care task forceadvisers, Tufts University professor Norman Daniels, a memberof the task force, told BioWorld. That inner circle includes Goreand Shalala, as well as Labor Secretary Robert Reich, whopresided over a recent Office of Technology Assessment studyon commercial biotechnology.

Once the White House issues the health care reform plan,Congress will legislate it. Even representatives well left ofcenter have an understanding of the industry. Rep. HenryWaxman, D-Calif., chairman of the health and environmentsubcommittee, and Rep. Howard Metzenbaum, D-Ohio, "are veryprepared to listen to the arguments we make," Henry Termeer,chief executive officer of Genzyme Corp., told BioWorld.

"The case for flexibility (to treat small biotechnology companiesdifferently from larger pharmaceutical companies) has beenmade in an effective way by that industry group, the IndustrialBiotechnology Association," Wyden staffer Jenning toldBioWorld.

But there is no obvious consensus in Congress on price controls.A staffer on the Senate Committee on Labor and HumanRelations, chaired by Massachusetts Democrat Edward Kennedy,told BioWorld that pharmaceutical prices should not becontrolled. And if Rep. Fortney "Pete" Stark, D-Calif., favorsprice reviews, that "doesn't necessarily mean price-controlled,"a staffer told BioWorld.

However, Democrat David Pryor, a senator from Clinton's stateand a very close friend of the president, as well as chairman ofthe Senate Aging Committee, favors mandatory price ceilings,according to Jenning. But Termeer predicted that Pryor'sinfluence on the president may wane "as a more balancedpicture develops."

And Republicans are not about to stand for onerous legislation,James Derderian, legislative director for Tom Bliley of Virginia,the ranking Republican on Waxman's Health and EnvironmentSubcommittee, told BioWorld.

Meanwhile, the industry is making its own compromises. "I stillthink some level of price control, quote, unquote voluntarily, asMerck is suggesting will have to be put into place," saidTermeer.

And the IBA would have no objection to capping priceincreases at the level of inflation, said Raines. While nobiotechnology drug has ever inflated at this rate, such a capwould alleviate any need for different rules for pharmaceuticaland biotechnology prices, said Raines. "With regard to newdrugs, it is not necessarily useful to distinguish betweenbreakthrough drugs from a biotechnology company and othernew drugs."

Washington, D.C., biotechnology lawyer Stephen Lawton's ironicstatement shows the potential for a decent outcome. "I thinkit's fair to say that the more traditional PMA (PharmaceuticalManufacturers Association) companies are going to benefitgreatly from the work the biotechnology companies did."

-- David C. Holzman Washington Editor

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