Although the extremely close race for the White House and for control of Congress in November signaled a lack of consensus on national health policy, voters have made it clear they are unhappy about the high cost of medical products. That was one of the few issues to emerge from the political haze, and it promises to shape the debate on numerous health and medical topics. The deadline for reauthorizing the FDA user fee program in 2002 also provides a timeframe for developing new programs and policies affecting a number of critical pharma issues.

Pharmaceutical pricing. Last year's presidential campaign pitted the Democrats' proposal to include a universal pharmaceutical benefit in Medicare against the Republicans' plan for insurers to offer coverage plans. The debate helped several Democratic candidates gain Senate seats and was a pivotal issue in Florida and other key states. It also caused a rift between the pharmaceutical industry, which prefers the market-based GOP approach, and the insurance industry, which maintains that pharmacy-only health policies will not work. Broader reform of the entire Medicare program to include prescription coverage could address those problems but is unlikely in the new highly partisan and evenly divided Congress.

The main problem with the pricing issue is that it's extremely difficult to reduce spending on medicines and deliver quality care at the same time. The aging US population will consume more and more prescription drugs, which have become an integral component in the treatment of critical and chronic diseases. Experts agree that rising consumption is boosting expenditures more than price hikes, but that observation does little to help individuals who lack prescription coverage and have to pay high out-of-pocket costs.

Despite those concerns, members of Congress have proposed several bills to reduce drug expenditures. Some seek to expand access to lower federal supply schedule prices or to require rebates as Medicaid does. Just before the elections, Congress enacted a measure to facilitate the import of lower-cost medicines from abroad. (See "Playing Politics With Imports," PE Washington Report, December 2000.)

Government investigators are also looking for opportunities to cut pharmaceutical administrative spending. The Health and Human Services Inspector General is examining state AIDS drug assistance programs to determine if they pay too much for therapies. Congressional leaders are questioning whether Medicare pays inflated prices for the medicines it does cover because of alleged manufacturer manipulation of average wholesale prices, a query that could alter industry pricing practices and Medicare reimbursement for pharmaceuticals. (See "Medicare Manipulations," PE Counterpoints, November 2000.)

States are also taking action to limit spending by pharmacy assistance programs. Maine is out front with a new policy to compel brand name companies to negotiate rebates. Manufacturers have filed a lawsuit to block the Maine program on the grounds that it interferes with interstate commerce, and a major legal battle lies ahead as more states adopt similar programs.

One emerging issue is the role that FDA may play in the drug-pricing debate. "FDA has nothing to do with setting prices," emphasizes Janet Woodcock, director of FDA's Center for Drug Evaluation and Research (CDER). The current FDA effectiveness standard for approval does not include any comparative standard, Woodcock notes, but this is not the case in all countries. FDA may begin to look comparatively at products in clinical trials as policy makers consider whether and how to measure a given medicine's value compared to other treatments.

Generic drug availability. The campaign to make medicines more affordable is expected to spur efforts to increase generic competition. Congress will examine proposals in that area as generics makers and innovator firms vie for desired changes in the Hatch-Waxman Act of 1984. Although the legislation has spurred the development of thousands of generic products, the policy also encourages all parties to manipulate the FDA approval process and the patent system. Last fall, Senators John McCain (R., Arizona) and Charles Schumer (D., New York) offered legislation to boost generics by revising patent policy, curbing citizens petitions that delay FDA approvals, and blocking some of the defensive tactics used by innovator firms. The Federal Trade Commission is also investigating allegations of manufacturers' anticompetitive attempts to keep generic products off the market.

One controversial topic that is sure to surface is the extension of Waxman-Hatch to biotech therapies, which sets the stage for generic biologics in the future. Another is whether FDA's pediatric labeling program granting six-month patent extensions to companies studying pediatric uses, has been overly generous to brand-name companies. Generics makers believe that fewer products should be eligible for pediatric patent extensions and that testing requirements should be more stringent. Discussion of those issues will also extend to broader biomedical concerns, such as the viability of gene-based patents and intellectual property protection for other new technologies.

Impact of DTC advertising. Critics of high pharmaceutical costs are quick to point to the surge in consumer advertising as a critical factor driving consumption. Multimillion-dollar outlays for television commercials, they claim, not only boost manufacturer expenses directly but also spur patient demand for new prescriptions. A noticeable shift in consumption from less expensive old medicines to more costly new therapies has raised questions about the role of advertising in encouraging unnecessary spending.

FDA has been relatively supportive of DTC communications. Although there is growing concern about DTC ads increasing inappropriate prescribing, Woodcock notes that consumer advertising can also help the large undertreated segments of the US population.

"There is a wide range of conditions for which life-saving therapies are available, but people are not getting them," Woodcock observes. "Unfortunately, there has been a lot of heat about DTC advertising, but not a lot of light cast on the real issues."

Product safety. DTC opponents also claim that high-pressure marketing tactics raise serious concerns about medication safety. FDA has been involved in a number of safety issues in the past year that have led to product withdrawals and limits on prescribing. FDA asked Warner Lambert to withdraw its diabetes treatment Rezulin (troglitazone) last March because of liver toxicity problems. Roche's Accutane (isotretinoin) has been linked to serious side effects, including some that resulted in suicide. More recently, FDA banned all over-the-counter products containing phenylpropanolamine, also known as PPA.

Concerns about vaccine safety have also emerged as a hot topic on Capitol Hill. Lawmakers have called for a ban on the mercury compound Timerosal in vaccines for children and plan to press for changes in vaccine injury compensation policies to beef up patient protections. New liability policies, though, could jeopardize industry investment in that area.

The risk and safety debate raises the question of whether FDA is approving new medicines too quickly to meet user-fee timetables. FDA officials refute the charge but are moving to expand adverse event reporting systems and to encourage safe medication use by healthcare providers. CDER is also exploring strategies to limit physician prescribing and distribution of high-risk therapies. Such programs are difficult to execute, however, as seen when FDA recently asked Glaxo Wellcome to withdraw its irritable bowel syndrome treatment Lotronex (alosetron) despite the company's efforts to manage its use through label warnings and a medication guide.