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INVESTIGATIONAL DRUG COVERAGE UNDER COOPER/BREAUX

Executive Summary

INVESTIGATIONAL DRUG COVERAGE UNDER COOPER/BREAUX legislation is provided with a greater apparent emphasis than under the Clinton Administration's Health Security Act proposal. In authorizing coverage of investigational drugs, Cooper/Breaux states: "Nothing shall prohibit an [accountable health plan] from covering [unapproved or investigational] drugs, biologicals and medical devices, including" Treatment INDs. The language seems to encourage coverage of investigational drugs. However, the Clinton proposal suggests only that such coverage is not disallowed, leaving the decision to the discretion of the plans. "A health plan may cover an investigational treatment...at its discretion," the measure states. Rep. Cooper (D-Tenn.) and Sen. Breaux (D-La.) call their legislation (HR 3222, S 1579) a "pure" approach to managed competition in that it avoids government-imposed global caps and employer mandates. Supported by a large cross-section of the pharmaceutical industry, it also calls for coverage of outpatient prescription drugs. Cooper/Breaux is clearly more generous than the White House bill regarding coverage of health care services provided as part of a clinical trial. The former provides coverage of "routine medical costs...associated with the delivery of investigational treatments," with the only proviso being that "the treatment [must be] part of an approved research trial." The bill defines "routine medical costs" as those charged for health services "required to provide treatment according to the design of the trial, except those costs normally paid for by other funding sources." The White House proposal covers ancillary services only for approved trials and only if the services would have been provided for the patient outside the trial. Ancillary clinical services provided during an investigation are covered under the basic benefit package, subject to cost-sharing limitations, as long as "the treatment is a qualifying investigational treatment" (i.e., one being investigated under a government-approved or peer- reviewed research trial) and "the item or service would have been provided to the individual even if the individual were not receiving the investigational treatment," the proposal states. The Clinton and Cooper/Breaux plans both cover off-label uses of approved drug products if the indications for which they are used are listed in either the American Hospital Formulary Service- Drug Information, American Medical Association Drug Evaluations or U.S. Pharmacopeia-Dispensing Information compendia. The White House bill adds that its proposed National Health Board may extend the list of compendia on which coverage of off-label uses may be based. Washington lawyer Deborah Steelman will compare various provisions in the "key congressional" health care reform proposals at a Nov. 15 meeting on the pharmaceutical provisions of the reform efforts. Sponsored by the Pharmaceutical Manufacturers Association, the all-day meeting also will feature presentations by PMA VP-Health Care Systems Division Karen Williams, who will provide an overview of the Clinton plan; PMA General Counsel Bruce Brennan, who will discuss unitary pricing and medical liability; Washington lawyer George Olsen (Williams & Jensen) on out-patient drug benefits; D.C. lawyer Elizabeth Carder (Reed Smith Shaw & McClay) on Medicare drug provisions; and Policy Research Group President Don Muse, who will provide budgetary estimates. In addition, the association invited White House congressional liaison official Christopher Jennings as a lunch speaker. Retail pharmacy representatives have indicated a strong preference for the Clinton proposal and suggest that the "pure" managed competition bills could effectively limit their role in drug distribution under the reformed health care system. NARD, representing independent pharmacy retailers, and the National Association of Chain Drug Stores have endorsed the White House bill for its provision of a "safe harbor" for pharmacies to band into buying groups, establish formularies and negotiate with manufacturers for price breaks. Another key provision for pharmacy is the repeal of the insurance industry's McCarren-Ferguson protection against antitrust enforcement, which, according to the retailers, permits health plans to restrict providers.
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