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Executive Summary

Drug export legislation remains a priority item on the pharmaceutical industry's wish list of Capitol Hill projects, heading into the 99th Congress. The industry feels it can still get the issue on the Hill agenda. At a hearing before Sen. Hatch's Labor & Human Resources Cmte. last summer, industry characterized the proposal as a jobs bill. Merrell Dow VP-Public Affairs Robert Ingram testified: "This [current] ban on exports, which to our knowledge does not exist in any other of the major drug producing countries in the world, adds nothing to the protection of public health yet is having a significant adverse impact upon the U.S. economy and on the internatl. competitive position of American drug firms" ("The Pink Sheet" July 2, p. 13). Hatch (R-Utah) sponsored a Drug Export Bill in the 98th Congress, but the legislation was never marked up by his cmte. In the House, Rep. Waxman (D-Calif.) held a hearing on the proposal before his Commerce/Health Subcmte., but a formal bill was never introduced. Hatch has committed to introducing a new bill a priority for the 99th Congress. At a Nov. 5 press conference, PMA Interim President Stetler said assn. members "think we can get Congressional support" for a drug export bill. Stetler explained the PMA strategy for passage: "We've got a good program, and then when we have a coalition of health people to support it, we jointly approach key people [legislators]: 10 people in the Senate and 20 people in the House." Stetler maintained that the assn. "could end up with an awful lot of support for the program, rather than just critics." PMA is even hoping for the endorsement of consumer activists, who have been negative in the past. "Ideally, of course, we would try to work with consumer groups. It is a little tough for us because there seems to be an automatic resistance, but the effort will be made, I can assure you," he said. "It would be a minor miracle, but if we ever waltzed in there together, they couldn't beat it." With the exception of one new face, Hatch's cmte. will be unchanged when it reconsiders drug exports. Three senators on the cmte. were up for re-election this year. Sen. Thurmond (R-S.C.) defeated Democratic challenger Melvin Purvis with 67% of the vote. Sen. Pell (D-R.I.) received 72% in beating Republican Barbara Leonard. Cmte. member Randolph (D-W.Va.), a 24-year veteran of the Senate, retired. His Senate seat has been won by John D. (Jay) Rockefeller IV (D), who defeated Republican John Raese in a tight contest, 370,762-339,871. Because of labor interests in West Virginia, Rockefeller may seek his predecessor's place on the Hatch cmte. Another new Democratic senator who is said to be interested in serving on the cmte. is Paul Simon (Ill.), who defeated Charles Percy, a 17-year Republican veteran of the Senate, by a 54-45% margin, 1,067,109-893,372. Sen. Gore May Lose High Visibility Position He Held In House; Senate Cmte. Assignments Limited If a new senator is assigned to Labor & Human Resources by the Democrats, a more likely candidate is former Rep. Gore (Tenn.), who defeated Republican Victor Ashe by an 875,541-486,915 count in their race for the seat vacated by retiring Sen. Baker (R). In four terms as a congressman, 36-year old Gore has developed an expertise in health and science issues but also has a keen interest in arms and military affairs. Party caucuses will be held in December and January to decide new cmte. Assignments in both the Senate and the House. Gore's move to the Senate may be viewed as a kick upstairs moving him out of a high visibility position in the House to the role of a junior senator of the minority party in the Senate. Gore's ability to get a hearing forum will be severely limited in the Senate. Neither the House nor the Senate will experience extensive reshuffling of cmte. assignments as a result of the elections. Like Hatch's Senate cmte., two House subcmtes. that are important to the drug and health fields will each receive a single new member. The Commerce/Health Subcmte. will replace Rep. Ottinger (D-N.Y.), who retired, and the Commerce/Oversight Subcmte. will replace Gore, who resigned to run for the Senate. [EDITORS' NOTE: See chart, p. 7, for election results on races involving members of the two House subcmtes.] Any drug export legislation that is introduced in the House will be reviewed by Rep. Waxman (D-Calif.) and his Health Subcmte. At last summer's hearing ("The Pink Sheet" July 30, p. 4), subcmte. members Nielson (R-Utah) and Scheuer (D-N.Y.) were sanguine about the proposal and are likely to be among House cosponsors if a bill is introduced next year. Waxman's cmte. may also be the site of drug reimbursement issues in 1985. PMA's Interim President Stetler recently called third-party reimbursement a "problem" area that the assn. will have to work to solve ("The Pink Sheet" Oct. 15, p. 11). Although the industry must remain sensitive to govt. and private third-party payor efforts to contain health care costs, Stetler said, "if we acquiesce in some of the proposals we have seen in the name of economy, we will be committing economic suicide while serving as accessories to the stifling of advances in therapeutic science." He also pointed out PMA's position that the costs of drug research are increased by restrictive formularies, "MAC-type programs, and . . . other mechanisms designed to save money through restrictions that channel consumer purchasing power towards those products that are cheapest or -- in the opinion of the regulatory authorities -- equally effective." House Commerce/Oversight Subcmte. Chairman Dingell (D-Mich.) has been doing spadework in preparation of a series of oversight hearings on biotechnology. In August, Dingell wrote to FDA, the Centers for Disease Control, and the Natl. Institutes of Health to inquire about their readiness both to support and to regulate govt. and commercial efforts in the field.In a letter to FDA Com. Young, Dingell explained: "The subcmte. is particularly interested in the adequacy and administration of current laws and programs -- those which support both basic and applied research and those which might be used to control or regulate deliberate releases into the environment of new genetically engineered organisms." The Heritage Foundation, a conservative think-tank which often reflected Reagan policy in the first term, has pushed for a legislative approach to changing FDA procedures. In Mandate for Leadership, a volume of conservative policy recommendations issued just after the 1980 elections, the foundation wrote: "Both legislative and administrative initiatives must place greater emphasis on the need to speed up FDA procedures so that drugs will reach the U.S. market sooner. This is the surest way to stimulate private sector innovation, by making it clear that innovation will pay off in the marketplace." The Heritage Foundation will release a new volume of recommendations in a few weeks for President Reagan's second term. The view that legislation is needed is not likely to change. Administrative initiatives, in the form of FDA's structural reorganization and publication of the proposed revisions of the IND and NDA regulations, have been launched. However, the only legislative effort regarding the NDA approval process is the Orphan Drug Bill, which by definition is limited in scope. Chart omitted.

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