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AMA RESOLUTION ON BRANDNAME DRUG COST CONTROL STRATEGIES

Executive Summary

AMA RESOLUTION ON BRANDNAME DRUG COST CONTROL STRATEGIES is being presented to the American Medical Association's June 23-27 mid-year meeting by the Texas state delegation. The resolution would have AMA "enter into dialogue with pharmaceutical company representatives and other appropriate agencies to explore ways to reduce the costs of brandname drugs through such mechanisms as a more cost-effective research and development process, more modest promotional activities, product liability reform and streamlining of the FDA requirements for new drug approval." The Texas delegation argues that "a major portion" of pharmaceutical cost increases can be attributed "to price increases levied by major companies which develop and market drugs, and to various expensive enticements and gimmicks... [used] to increase the use of their products." At the same time, the resolution states, "most physicians prefer to use 'brandname' drugs which have been proven to be effective and consistent in action and price increases have the effect of reducing the use of brandname drugs." Resolutions adopted by delegates become AMA policy and serve to guide the association's staff in contacts with government agencies and legislatures. The House of Delegates process is set up like a legislature: proposed resolutions are first reviewed by a committee (in this case, a committee on science and technology) and then by the full House. The AMA meeting will begin with a keynote address by HHS Secretary Sullivan. The New Mexico delegation is reviving the issue of consumer drug promotions. That delegation has proposed a resolution that AMA "use its influence to encourage the pharmaceutical industry to refrain from advertising prescription medications or alluding to the need for prescription medications in the public media, such as radio, television, newspapers, magazines and billboards." Direct-to-consumer advertising of prescription products, the New Mexico delegation contends, "does nothing to educate physicians"; "frequently misleads the public and gives them false hope"; and "is extremely expensive and would only add to the cost of prescription medications." The proposal expands upon a resolution approved in June 1986 that opposed consumer ads and stated "no evidence has been presented... that direct advertising of Rx drugs to the public will improve the quality of medical care." Other resolutions and reports submitted for the AMA consideration recommend continued effort to secure Medicare coverage of home intraveneous drug therapy; endorse FDA's plan to require that pharmaceutical capsules and tablets be imprinted to identify product name and strength; and urge state medical societies to participate in the development of Medicaid drug utilization review programs.
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