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PRYOR HEARING NOV. 16 WILL REINTRODUCE HHS ASSISTANT SECRETARY LEE

Executive Summary

PRYOR HEARING NOV. 16 WILL REINTRODUCE HHS ASSISTANT SECRETARY LEE as a Capitol Hill witness on pharmaceutical industry practices. Assistant Secretary for Health Philip Lee, MD, is scheduled to testify before the Senate Special Committee on Aging during a hearing at which committee Chairman Pryor (D-Ark.) and Ranking Republican Cohen (Maine) say they will explore whether competition can "contain pharmaceutical costs under the new health care system" and market forces can assure "that new medications, especially breakthrough drugs, are reasonably priced." Lee, previously an assistant secretary of HEW in the Johnson Administration and the author of books such as Pills, Profits and Politics and Bad Medicine, made several appearances on Capitol Hill during the Carter Administration to testify on changes in the FD&C Act and a proposal for patient labeling. Lee is once again involved in patient labeling: he is understood to be working with Commissioner Kessler on drafting a proposal for an FDA patient information program ("The Pink Sheet" Sept. 27, T&G-1). The hearing also will examine the pharmaceutical industry's reactions to market trends "and the impact this response will have on competitive dynamics," Pryor and Cohen said. In addition, the committee will consider the effect of mergers and acquisitions on drug price competition and the future of generic competition. Expected to join Lee as executive branch witnesses at the hearing are Health Care Financing Administration Deputy Administrator Helen Smits and Federal Trade Commission Bureau of Competition Assistant Director Mark Whitner. FTC will be asked presumably to clarify its position on the pharmaceutical industry's multiple-tier pricing practices based on classes of trade. PMA has said the commission has sanctioned multi-tier pricing; however, although FTC has not brought legal action against the industry, commission representatives say FTC has not condoned the practice officially. Other scheduled witnesses include Pharmaceutical Manufacturers Association President Gerald Mossinghoff, National Association of Pharmaceutical Manufacturers President Robert Milanese, National Organization for Rare Disorders Executive Director Abbey Meyers, Office of Technology Assessment Health Program Senior Associate Judith Wagner and PACE Alliance Executive Director Benji Wyatt. PACE, based in Lawrence, Kan., is a pharmacy buying group. In 1988, Wyatt reported to the National Association of Pharmaceutical Manufacturers that PACE largely had been unsuccessful in negotiating large-volume discounts from pharmaceutical manufacturers. Because Pryor has restricted the number of witnesses, Mossinghoff was the only representative of the innovator pharmaceutical industry invited to testify. Several manufacturers reportedly asked but were denied an opportunity to appear as witnesses. One company, Genzyme, submitted testimony to the committee in lieu of an opportunity to appear. In an earlier announcement of the hearing, the senators cited Genzyme's Ceredase and Chiron/Berlex' Betaseron as examples of breakthrough products with high prices. The six drug manufacturers represented by Rx Partners are sponsoring a press conference following the hearing. The briefing will focus on prescription drugs for the elderly, the ability of competitive market forces to contain pharmaceutical prices, industry trends induced by managed care, industry concerns about the Clinton Administration's health care reform proposal and "the future of research and development and the availability of breakthrough drugs." Scheduled speakers at the conference are Mead Johnson Laboratories VP & General Manager Thomas Ludlam, Upjohn Corporate VP Peter Seaver and SmithKline Beecham North America Pharmaceuticals President Argeris Karabelas.
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