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Executive Summary

The impact of FDA decisions on the economics of health care should be considered by the FDA "blue ribbon" commission proposed by HHS, the department's General Counsel Michael Astrue suggested at the Food & Drug Law Institute's annual educational conference in Washington on Dec. 12. Asked during Q&A what he would like to see the commission focus on, Astrue said "there is a very natural and understandable tendency in the agency to think of itself only with a public health model." However, he asserted, "not only the decisions" FDA makes "but the timing of the decisions have a major impact" on industry. "I think we tend to overlook that," he added. Astrue proposed that the advisory panel "think through the proper role of the FDA as an economic regulator." He observed that it "would probably be wise of us to focus on that in a serious way and try to think what is the fairest most efficient way to handle that part of the agency's responsibilities." A day after Astrue's comments on the administration's interest in a review of FDA's part in economic regulation, former FDA Commissioner Jere Goyan reminded a seminar for FDA staff that the issue of FDA's involvement in cost of treatment decisions has a long background. "I can tell you that as commissioner," Goyan recounted, "I had several occasions when I got phone calls from people at HCFA and otherparts of the government saying 'can't you slow down this approval, because it's going to cost us a bundle?'" He said the pressure was "never put quite so crassly, but there was no question that that was what they wanted." Goyan noted that "the only way the government can hold a medical product off the market is through the FDA so there are going to be more pressures put on the agency." The FDA Commissioner from the last years of the Carter Administration expressed concerns about the new interest in economic regulation. "I can tell you that there is a tremendous growing concern over the cost of drugs," Goyan declared. "I think there is going to be an effort to drag the agency into it." HHS Secretary Sullivan, as expected, took the occasion of the FDLI conference to announce the creation of the outside advisory body. "In coordination with the White House," Sullivan said, "I will name the chairman and members of this blue-ribbon panel in the next few weeks." The panel, he noted, will "report directly to HHS Assistant Secretary for Health James Mason and to me." In the same vein, HHS recently established a "blue ribbon" panel to take a close look at the National Institutes of Health, which, like the FDA, has a vacancy in the top management slot. If the FDA committee follows the same format as the NIH committee, the panel will be chaired by Mason and comprised of members from industry, academia, professional associations, and law firms specializing in food and drug law, as well as former top-level FDAers. The NIH panel is made up of 17 members, including Mason and Sullivan, and is scheduled to meet four times over the next year, and then prepare a report for the secretary. Like the FDA panel, the initial plans for the NIH panel call for it to be in existence for one year. Sullivan prefaced his remarks on the blue ribbon panel by suggesting that the Administration "should work to make the FDA stronger and even more capable of responding to the challenges inherent in the 1990s." The goal of the panel, he explained, will be to "examine the mission, responsibilities and structure of the FDA in order to make recommendations on how the FDA can be strengthened to benefit the public health." The advisory committee will be directed to examine "every aspect of the FDA," Sullivan indicated. He pointed out that the panel will "explore current concerns about the FDA and develop policy or structural recommendations to address any problems they uncover." Sullivan said he expected the panel would be "thorough and circumspect" as well as "far-reaching and visionary." A Dec. 13 Federal Register notice that announces the establishment of the special FDA advisory committee states that the panel "shall terminate on Nov. 20, 1990, unless the secretary of HHS determines that continuance is in the public interest." The brief Federal Register notice says only that the advisory committee "shall examine the mission, responsibilities and structure of the FDA in order to make recommendations on how the FDA can be strengthened to benefit public health." The advisory committee's recommendations and advice will be provided to Sullivan and Mason, the notice adds.

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