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Council on Prescription Drug Prices, which would have examined and reported on the pricing of all prescription drugs both new and existing. |
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In a report by the Congressional Budget Office entitled How Health Care Reform Affects Pharmaceutical R & D, it was estimated that under the President's proposed Health Security Act, profits from drug development would rise less than 3%. The report further predicted that the level of industry R & D might not change appreciably, but the placement of R & D investment might shift. As profits on drugs sold exclusively for the over-65 population would decrease, this would reduce the incentives to produce such drugs and shift it toward drugs aimed primarily at those under 65. |
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Although the Health Security Act is moot, Congress and the current administration are searching for cost containment and reductions in health care spending. Health reforms that have been proposed include unitary pricing provisions; user-fee exemptions for orphan products and small companies; any willing provider laws; drug-PAC (a consumer cost-effectiveness guide); repeal of the insurance industry's McCarren-Ferguson Act immunity that permits health plans to restrict providers; and coverage of investigational drugs. |
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The government is paying $1819 billion annually for drugs, or nearly 35% of all prescription drugs purchased in the United States. They will continue to seek ways to pool all that leverage. Could a national formulary be created in the United States and what effect would this have on new drug development? It has been suggested that a professional/scientific body be created to supply comparative information on therapeutic and economic properties of pharmaceutical preparations and/or develop a therapeutic formulary for voluntary application [58]. A federal center for prescription drug cost-effectiveness assessments that would fund and coordinate research where there are no manufacturer incentives has also been suggested. |
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Biomedical research has been a Republican favorite. The 104th Congress, if true to its Republican history of deregulation of the pharmaceutical industry, may alter the Health Care Reform debate. This would stimulate private sector investment in R & D and possibly help reverse the increased FDA restrictions on marketing and economic claims. Pharmaceutical industry critics are no longer in command of subcommittees with investigative power. A Republican Congress may mean less government scrutiny and regulation, more R & D incentive legislation, and less oversight of vertical and horizontal integrations [59]. For example, complementing the FDA's proposed rule on pediatric labeling is a proposed pediatric study incentive. Six months of additional market exclusivity would be given to products for which pediatric studies have been conducted at the request of the Health and Human Services (HHS) secretary. The new Congress has already decided to study how the FDA is implementing the user-fee program and is expected to be receptive to industry complaints about drug approval delays. |
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