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Executive Summary

Pharmaceutical Manufacturers Association President Gerald Mossinghoff and top execs of PMA member companies are scheduled to meet with White House Senior Advisor for Domestic Policy Ira Magaziner on March 8. The meeting would provide an opportunity for in-depth discussion of areas of interest to the brandname industry and suggests that despite the Clinton Administration's heated rhetoric about brandname prices, the industry is not being blocked out of the health care reform task force's "outreach" phase. PMA and three generic drug industry associations met with Magaziner March 2 to discuss more general cross-cutting issues. The generic drug groups returned for their own White House session on March 5. Representing PMA were Mossinghoff and Exec VP Robert Allnutt. The generic industry representatives included Generic Pharmaceutical Industry Association President Dee Fensterer; Mikart Exec VP Cerie McDonald, representing the National Pharmaceutical Alliance; and Rugby-Darby Exec VP Martin Zeiger and Barre-National President George Barrett, representing the National Association of Pharmaceutical Manufacturers. The generics groups have expressed their concern that the pharmaceutical industry not be viewed as being monolithic and specifically that generic firms not be lumped in with the price criticisms that the Clinton Administration has leveled at brandname firms. For example, NPA, in a statement of principles issued the first week of March, declared that "the imposition of artificial price controls on suppliers of multi-source pharmaceuticals is both unfair and superfluous...since our members are already providing low-cost alternatives to higher-priced pharmaceuticals." Other principles advocated by NPA include "access to adequate health care, including pharmaceuticals" for all Americans. As part of this general belief, NPA said it supports Medicare outpatient drug coverage. The association also urged that "all pharmaceutical companies should have the opportunity to supply products through an open formulary system." That statement may in part be an allusion to a provision in the Clinton Administration's economic stimulus/deficit reduction plan that would repeal the current ban on restrictive formularies for state Medicaid agencies ("The Pink Sheet" Feb. 22, p. 8). Pharmacy groups also received what were described as sympathetic hearings with health task force representatives. NARD and the National Association of Chain Drug Stores met with Magaziner March 4 to discuss the perspective of retail pharmacy. More general pharmacy issues were discussed at a March 5 session with task force representatives by groups including NARD, the American Pharmaceutical Association and the American Society of Hospital Pharmacists. At the March 4 session, NARD was represented by Exec VP Charles West and NACDS by President and CEO Ronald Zeigler. The two groups also have developed joint principles for health reform, which include the belief that pharmacists' services are "essential" to any health care benefit; that consumers should have access to a choice of community pharmacies; and that eliminating "discriminatory pricing practices" of drug manufacturers is also an "essential" factor in preserving a "competitive pharmacy marketplace." Retail pharmacies have felt disadvantaged in comparison to the prices given to favored buyers such as hospitals and health maintenance organizations. NARD and NACDS are inviting other state and national retail and pharmacy organizations to sign on to these principles. APhA was represented at the March 5 meeting by Exec VP John Gans, Director of Government Affairs William Hermelin, Senior Director of Pharmacy Affairs Lucinda Maine and association President Bob Osterhouse, an Iowa pharmacist. The White House task force's public liaison aides went into high gear during the first week of March, holding at least 11 meetings with health groups. The officials are said to have stressed that while the general managed care approach is a given, few specific proposals have been pinned down. One idea under consideration is to set up a group of health care practitioners in late March or April to provide feedback as proposals begin to be winnowed. Indicative of the widespread public interest in health reform, Magaziner and the task force's public liaison staff are receiving 1,500 letters and 250 phone calls a day. As part of its response to the health care task force deliberations and the general public's interest in the issue, PMA has launched a PR campaign. The association took out full-page ads in 40 major newspapers March 2, emphasizing that prescription drug insurance "should be a basic part of health care reform." Calling the ads "an attempt to open dialogue directly with the American people about the industry and the future of America's health care system," the association points out that pharmaceuticals make up less than 7% of the U.S. health care bill and that while total health costs account for 14% of the Gross National Product, pharmaceuticals have remained below 1% for decades. PMA also asserts that contrary to reports from Senate Aging Committee Chairman Pryor (D-Ark.) ("The Pink Sheet" Feb. 1, p. 11), "drug companies who voluntarily pledged to limit price increases to the [Consumer Price Index] have been true to their pledge."

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