clinton health reform plan vexes drug firms

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most as large as last year's record extent, he says. Exact year-to-year comparisons are not yet available because this yearns data are from the U.S.'s Total Ozone Mapping Spec- trometer flying on Russia's Meteor-IH satellite. Previous years' data were collected by a U.S. satellite's instrument that quit working last May. Over the U.S., total ozone concentrations hit unprece- dented lows last winter and spring, according to National Oceanic & Atmospheric Ad- ministration (NOAA) re- searchers. In some locations, the low levels continued into the summer, a time when people and crops are more vulnerable to the resulting increase in ultraviolet radiation. "We found values in 1993 that were lower than we had ever seen before," says Walter D. Komhyr, a retired NOAA scientist now with the Cooperative Institute for Re- search on Environmental Sciences at the University of Colorado, Boulder. NOAA scientists analyzed data from a network of ground-based spectropho- tometers scattered across the U.S. They compared current data with normal monthly values determined by 20 years of observations made from the mid- 1960s to mid-1980s. 'In January, Febru- ary, and March, values were quite far below normal, at some stations as much as 18% lower," says Komhyr, "the larg- est deviations we've ever seen." At Car- ibou, Maine, and Wallops Island, Va., the record lows persisted into July. The NOAA data confirm earlier reports from NASA, whose satellite observed un- usually low ozone levels over the North- ern Hemisphere last spring (C&EN, April 26, page 8). Similarly, Environment Cana- On Sept 26, area of severe ozone depletion over Antarcticashown as black, purple, pink, and deep blue—extended beyond the continent da, that country's national environmental protection agency, recently reported find- ing record low amounts of stratospheric ozone above Canada during May through August (C&EN, Sept. 13, page 33). Scientists suspect that the record low ozone levels are in part due to lingering effects of the June 1991 eruption of Mount Pinatubo in the Philippines, which inject- ed sulfur compounds into the strato- sphere. The resulting increase in sulfate aerosols is thought to have accelerated halogen-catalyzed ozone depletion. Production of both halons and chloro- fluorocarbons—major sources of strato- spheric bromine and chlorine, respec- tively—is being phased out under the Montreal Protocol on Substances That Deplete the Ozone Layer. But atmospher- ic concentrations of the long-lived ozone depleting compounds will not begin to decline until around the turn of the cen- tury. Stratospheric concentrations of chlo- rine will not drop below the level at which the Antarctic ozone hole first ap- peared until about 2050. Pamela Zurer Clinton health reform plan vexes drug firms ic mode of action offers farmers excel- lent weed control, using at least 90% less volume per acre than conventional herbicides. The sulfonylureas also are environmentally friendly since they de- grade naturally in the soil in a short period of time." Levitt personally creat- ed four products and has been award- ed 102 U.S. patents. Marinus Los, 60, director of crop sci- ence discovery at American Cyanamid, also earned the technology medal for developing herbicides—in this case, the imidazolinone class of crop protection products. Like the sulfonylureas, the imidazolinones can be applied in much lower amounts than earlier herbicides, and they target a plant enzyme not present in humans and wildlife, ren- dering them nontoxic. Cyanamid estimates that since their introduction in 1985, use of the imida- zolinones has resulted in a reduction of chemical load to the environment in ex- cess of 70 million lb. To date, four com- mercial products with total global sales of $500 million have been developed from this class of compounds. Stu Borman Ozone hits low levels over Antarctica, U.S. This year's Antarctic ozone hole is as deep as any ever observed and is ap- proaching the record geographical ex- tent of 1992, according to preliminary satellite data. In addition, both ground- based and satellite observations indicate that ozone concentrations over the U.S. hit record lows earlier this year. For more than a decade, almost all the ozone at certain altitudes over Ant- arctica has been destroyed as the Sun returns to the polar region in Septem- ber. This dramatic photochemical deple- tion, catalyzed by chlorine and bromine from man-made compounds, reaches its nadir in early October. Ozone levels re- turn to near normal later in the season, when the circular pattern of winds that isolates air over Antarctica breaks down, and ozone-rich air pours in from the north. "The ozone hole this year is very deep, as low as any other year/' National Aero- nautics & Space Administration (NASA) scientist Paul A. Newman tells C&EN. The area covered by low ozone extends beyond the Antarctic continent and is al- Hearings began last week on President Clinton's health care reform plan, with leadoff witness Hillary Rodham Clin- ton testifying before House and Senate committees. Pharmaceutical companies are react- ing to the plan with some praise, but considerably more concern. They recog- nize that by the time the plan passes months of Congressional hearings and negotiations, it may bear little resem- blance to the initial proposals. But many core concepts endorsed by the President are likely to remain, and drug firms don't welcome all of them. The Pharmaceutical Manufacturers Association (PMA), which represents about 120 drug companies, supports the President's goal of reforming health care, especially expanding coverage to pay for prescription medicines. "Drugs not only prevent disease and save lives—they save money," notes PMA president Ger- ald J. Mossinghoff. "They keep patients OCTOBER 4,1993 C&EN 5 broaching the record geographical ex- :ent of 1992, according to preliminary satellite data. In addition, both ground-

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most as large as last year's record extent, he says. Exact year-to-year comparisons are not yet available because this yearns data are from the U.S.'s Total Ozone Mapping Spec­trometer flying on Russia's Meteor-IH satellite. Previous years' data were collected by a U.S. satellite's instrument that quit working last May.

Over the U.S., total ozone concentrations hit unprece­dented lows last winter and spring, according to National Oceanic & Atmospheric Ad­ministration (NOAA) re­searchers. In some locations, the low levels continued into the summer, a time when people and crops are more vulnerable to the resulting increase in ultraviolet radiation. "We found values in 1993 that were lower than we had ever seen before," says Walter D. Komhyr, a retired NOAA scientist now with the Cooperative Institute for Re­search on Environmental Sciences at the University of Colorado, Boulder.

NOAA scientists analyzed data from a network of ground-based spectropho­tometers scattered across the U.S. They compared current data with normal monthly values determined by 20 years of observations made from the mid-1960s to mid-1980s. 'In January, Febru­ary, and March, values were quite far below normal, at some stations as much as 18% lower," says Komhyr, "the larg­est deviations we've ever seen." At Car­ibou, Maine, and Wallops Island, Va., the record lows persisted into July.

The NOAA data confirm earlier reports from NASA, whose satellite observed un­usually low ozone levels over the North­ern Hemisphere last spring (C&EN, April 26, page 8). Similarly, Environment Cana-

On Sept 26, area of severe ozone depletion over Antarctica—shown as black, purple, pink, and deep blue—extended beyond the continent

da, that country's national environmental protection agency, recently reported find­ing record low amounts of stratospheric ozone above Canada during May through August (C&EN, Sept. 13, page 33).

Scientists suspect that the record low ozone levels are in part due to lingering effects of the June 1991 eruption of Mount Pinatubo in the Philippines, which inject­ed sulfur compounds into the strato­sphere. The resulting increase in sulfate aerosols is thought to have accelerated halogen-catalyzed ozone depletion.

Production of both halons and chloro-fluorocarbons—major sources of strato­spheric bromine and chlorine, respec­tively—is being phased out under the Montreal Protocol on Substances That Deplete the Ozone Layer. But atmospher­ic concentrations of the long-lived ozone depleting compounds will not begin to decline until around the turn of the cen­tury. Stratospheric concentrations of chlo­rine will not drop below the level at which the Antarctic ozone hole first ap­peared until about 2050.

Pamela Zurer

Clinton health reform plan vexes drug firms

ic mode of action offers farmers excel­lent weed control, using at least 90% less volume per acre than conventional herbicides. The sulfonylureas also are environmentally friendly since they de­grade naturally in the soil in a short period of time." Levitt personally creat­ed four products and has been award­ed 102 U.S. patents.

Marinus Los, 60, director of crop sci­ence discovery at American Cyanamid, also earned the technology medal for developing herbicides—in this case, the imidazolinone class of crop protection products. Like the sulfonylureas, the imidazolinones can be applied in much lower amounts than earlier herbicides, and they target a plant enzyme not present in humans and wildlife, ren­dering them nontoxic.

Cyanamid estimates that since their introduction in 1985, use of the imida­zolinones has resulted in a reduction of chemical load to the environment in ex­cess of 70 million lb. To date, four com­mercial products with total global sales of $500 million have been developed from this class of compounds.

Stu Borman

Ozone hits low levels over Antarctica, U.S. This year's Antarctic ozone hole is as deep as any ever observed and is ap­proaching the record geographical ex­tent of 1992, according to preliminary satellite data. In addition, both ground-based and satellite observations indicate that ozone concentrations over the U.S. hit record lows earlier this year.

For more than a decade, almost all the ozone at certain altitudes over Ant­arctica has been destroyed as the Sun returns to the polar region in Septem­ber. This dramatic photochemical deple­tion, catalyzed by chlorine and bromine from man-made compounds, reaches its nadir in early October. Ozone levels re­turn to near normal later in the season, when the circular pattern of winds that isolates air over Antarctica breaks down, and ozone-rich air pours in from the north.

"The ozone hole this year is very deep, as low as any other year/' National Aero­nautics & Space Administration (NASA) scientist Paul A. Newman tells C&EN. The area covered by low ozone extends beyond the Antarctic continent and is al-

Hearings began last week on President Clinton's health care reform plan, with leadoff witness Hillary Rodham Clin­ton testifying before House and Senate committees.

Pharmaceutical companies are react­ing to the plan with some praise, but considerably more concern. They recog­nize that by the time the plan passes months of Congressional hearings and negotiations, it may bear little resem­blance to the initial proposals. But many

core concepts endorsed by the President are likely to remain, and drug firms don't welcome all of them.

The Pharmaceutical Manufacturers Association (PMA), which represents about 120 drug companies, supports the President's goal of reforming health care, especially expanding coverage to pay for prescription medicines. "Drugs not only prevent disease and save lives—they save money," notes PMA president Ger­ald J. Mossinghoff. "They keep patients

OCTOBER 4,1993 C&EN 5

broaching the record geographical ex-:ent of 1992, according to preliminary satellite data. In addition, both ground-

NEWS OF THE WEEK

out of hospitals, out of nursing homes, out of emergency rooms, out of doctors' offices, and out of surgery."

PMA says it "looks forward to work­ing with the Administration and Con­gress in shaping a reformed health care system that relies on competition to contain costs, ensure access, and pro­mote the discovery of new medicines."

However, drug companies charge that the plan proposes federal price regulation, blacklisting of certain drugs, and huge new rebates by drug firms to the federal government, all of which they object to. Mere discussion of such steps, drug firms claim, already has begun to curb profits, cut jobs, and impair their ability to finance research—which would mean fewer in­novative, life-saving products.

For example, among Pfizer's chief concerns are that increased regulation will have a "possible chilling effect on pharmaceutical research, which is in­creasingly difficult, uncertain, and cost­ly." The New York City-based drug firm says: "At stake, quite simply, are cures for Alzheimer's disease, AIDS, diabetes, cancer, and other intractable diseases."

Mossinghoff adds that rather than introduce federal price regulation and other controls, PMA "strongly believes that there must be much greater reli­ance on the competitive market, which is already working to restrain prices on existing and new drugs."

For instance, PMA notes, the generic drug share of the total prescription mar­ket doubled from 15% to 30% between 1983 and 1989, and is expected to reach 50% in 1995—helping to keep drug pric­es down. In addition, 17 PMA compa­nies, representing about two thirds of the U.S. market for prescription drugs, individually and voluntarily are keeping their price increases at or below the in­flation rate. The result, PMA concludes, is that drug price increases now run at about the general inflation rate.

PMA also is concerned about an Ad­ministration proposal to empower the Secretary of Health & Human Services to blacklist a new drug (that is, deny Medi­care payment for its use), if the Secretary determines that the drug is "excessively or inappropriately priced." What compa­ny, Mossinghoff asks, would be willing to invest the 12 years and $359 million that it now takes on the average to discover and develop a new drug, if faced with the prospect that federal regulators might blacklist the drug because they believe its price is "excessive"? It is "critically impor­

tant," he adds, "that incentives be pre served for the discovery of new medicines to treat the many serious and costly un-cured diseases."

In addition, drug companies object to proposals in the Clinton plan that would require them to pay a 15% rebate to the federal government on all Medicare pay­ments for drugs. Such rebates would in­crease drug firms' corporate tax burden by billions of dollars a year, taking mon­ey from new drug research budgets and pouring it into uncertain government uses, says Raymond C. Egan, senior vice president at Bristol-Myers Squibb.

Biotechnology companies working on new drugs are also experiencing negative effects from the health reform plan. "Get­ting product approval based on safety and efficacy no longer guarantees com­mercial success, and potential drug pric­ing controls have sent investors and much needed capital to the sidelines," says G. Steven Burrill, the San Francisco-based national director for manufacturing and high-technology industry services at the consulting firm Ernst & Young.

To be sure, pharmaceutical manufac­turers will work to cut their potential loss­es as the final plan unfolds. Some big drug firms are stepping up development of over-the-counter products, which are not covered in most health care plans and so can be sold at whatever price the mar­ket will bear. For example, this past July, Warner-Lambert entered into strategic al­liances with Wellcome pic and Glaxo Holdings to create one of the strongest over-the-counter businesses in the world.

Other companies may put more em­phasis on sales of low-priced generic drugs. Thus, Merck announced this sum­mer that it would become a managed-care player by acquiring Medco Containment Services, the largest mail-order pharmacy and discount drug distributor.

Susan Ainsworth

Court rejects trade pact environmental suit An appeals court decision has cleared the path for a Congressional vote on the North American Free Trade Agree­ment (NAFTA).

The U.S. Court of Appeals for the Dis­trict of Columbia Circuit has overturned a lower court decision, ruling that the Administration does not have to prepare a statement on the treaty's environmen­

tal impact before it can be ratified. Trea­ty opponents promise a final appeal to the Supreme Court, but it is unlikely the Court could act before the treaty is vot­ed on this fall. The treaty is supposed to take effect in January.

The environmental impact statement was ordered by U.S. District Judge Charles R. Richey on June 30 (C&EN, July 5, page 4), in response to a suit brought by a coalition of environmental and consumer activist organizations try­ing to thwart passage of a treaty that they believe would be harmful to the en­vironment. If the impact statement were required, it could add years to the pro­cess of completing the treaty, probably dooming NAFTA.

By a unanimous vote, the appeals court rejected the plaintiffs' arguments. In an eight-page decision written by Judge Abner J. Mikva, the appeals court ruled that environmental questions about NAFTA are not subject to judicial review. Responsibility for the treaty rests primarily with the President, the court said, and it is his prerogative to negoti­ate and draft a treaty, and to submit it for approval to Congress.

The court also referred to the NAFTA side agreements on environmental and labor issues that have been completed by the Clinton Administration. The court said that approval of these agreements may well change the dimensions of the conflict that led to the original lawsuit.

"I applaud the decision and I want to emphasize that if this agreement goes through, it will lead to improvements in the environment," commented President Clinton after learning of the ruling.

The groups challenging the treaty were disappointed. "Routing its legal obliga­tion to prepare an environmental impact statement will not win the U.S. Trade Of­fice friends in Congress or among the public," said Joan Claybrook, president of Public Citizen, a Washington, D.G-based public interest organization.

There is still considerable doubt about whether Congress will approve the treaty, even with the side agreements, and the Administration still faces an uphill fight to have the treaty approved. For example, Rep. Richard A. Gephardt (D.-Mo.) calls NAFTA deeply flawed and says he will vote against it. As majority leader of the House and one of its most respected members on trade issues, Gephardt's de­cision will carry much weight with Dem­ocrats still trying to decide how to vote.

David Hanson

6 OCTOBER 4,1993 C&EN