clinton health reform plan vexes drug firms
TRANSCRIPT
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