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Executive Summary

Omnibus health care legislation containing the drug export measure and provisions for a federal vaccine injury compensation program is likely to pass Congress in similar form in 1987 if President Reagan does not sign the current compromise (S 1744), Sen. Hatch (R-Utah) maintained at an Oct. 28 press conference. "If this bill is pocket vetoed, I think the earliest you could get a vaccine bill, if everything worked out, would be the middle or late part of next year," Hatch said. However, "anybody who thinks that it's going to be much different from this just doesn't understand the infighting and difficulties that have to be resolved in Congress." The press conference featured Sen. Hatch, Reps. Waxman (D-Calif.) and Wyden (D-Ore.), and several proponents of the omnibus health care bill from outside Congress. It was called to rally support for presidential signature of the legislation, which passed Congress Oct. 18 ("The Pink Sheet" Oct. 27, p. 3). The Justice Department opposes the bill, and the Office of Management & Budget is apparently leaning against it. Proponents have been trying to sell the bill to the White House in two ways: (1) by emphasizing the tangible benefits to be gained from the noncontroversial parts of the bill, such as support for Alzheimer's disease research, and (2) by portraying the drug export provision as consistent with the international policy goals of the Reagan Administration. For example, ideologically sensitive members of the Administration are being asked to consider the drug export provision in light of the Administration's strong support for international free trade policies. Also, proponents point out that international consumer advocacy groups oppose the drug export provision. If Reagan fails to sign the bill, supporters of the measure are arguing, the Administration would be, in effect, working in concert with the anti-industry lobby groups, such as Health Action International. The foreign-based consumer groups have been working to establish essential drug programs, to implement strict pharmaceutical marketing codes, and to limit intellectual property ownership rights. Former U.S. Ambassador to the U. N. Jean Kirkpatrick reflected the importance of the international objectives of the Administration in a speech to the Pharmaceutical Manufacturer Association last spring. Kirkpatrick pointed out that the Administration will fight those who would take international "punitive regulatory action" against U.S. industry ("The Pink Sheet" April 14, p. 14). Waxman, who was skeptical about the need for broad drug export reform and declared his opposition to early Senate versions of the legislation, asserted at the press conference that S 1744 would protect American technology and address concerns caused by the "drug lag" at FDA. Calling the bill "a nonprotectionist way to protect American business," Waxman said S 1744 provides that U.S. manufacturers will no longer be forced "to open factories overseas to supply a need in Western Europe or for these pharmaceuticals that have not yet been approved in the U.S." The legislation addresses "concern about the drug lag," he said, by permitting domestic manufacture of products that have been "approved in England, France, Germany, and some other countries in Western Europe" but for which an NDA is pending at FDA. Furthermore, Waxman continued, the bill ensures that biotechnology companies will not be forced to export their technology and be placed at a competitive disadvantage. Biotechnology, he added, is "an emerging and important part of our economy in this country." At a hearing last spring, the congressman said he was "sympathetic" with biotech companies' need for relief from the current ban on the export of unapproved products ("The Pink Sheet" May 5, p. 10). At the press conference, Hatch and Waxman said the tax authorization committees of both the Senate and House will consider separate funding measures for S 1744's vaccine compensation provisions early next year. Noting that the provisions cannot be enacted without a separate funding bill, Waxman said that he has "a commitment" from House Ways & Means Committee Chairman Rostenkowski (D-Ill.) "that a bill will move forward, he will hold hearings and look at the issue next year." Hatch added that the Senate Finance Committee also "will look at it and hold hearings next year." To counter Justice Department objections to the vaccine compensation bill's proposed creation of a new tax, Waxman suggested that the excise tax or surcharge would prove less costly than the current upwardly spiraling inflation of vaccine prices. "Concern has been raised about the fact that the compensation program will . . . result in a new tax," he said. Noting that vaccine costs have been raised "so dramatically in recent years" and that the prospects for further increases "are clear," Waxman said the bill offers a choice between minor "increases set aside for purposes defined and carefully described for compensating children" and an upward "spiral of costs that [is] continuing because of liability."

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