Economists Say Clinton Reforms Will Hurt R&D

Article excerpt

President Clinton's health-care reforms will injure drug development and result in "the loss of life in the future," 565 economists charged in an open letter delivered to the White House. The economists, whose spokesmen described them as a bipartisan group from all 50 states, said that the Clinton plan would impose price controls, including "price limitations on new and existing drugs." The letter went on to say that the threat of price controls "has already decreased research and development at drug companies, which will lead to reduced discoveries and the loss of life in the future."

The pharmaceutical industry also has criticized aspects of the Clinton plan and said that R&D indeed may suffer unless those aspects are changed. The industry is adamantly opposed to enabling the secretary of Health & Human Services to withhold Medicare coverage for new drugs judged "too expensive" and to a provision for an Advisory Council on New Drugs to examine the reasonableness of launch prices of medicines that constitute a significant therapeutic advance. But the industry also has acknowledged that a changing marketplace is forcing major adjustments, too.

CAP IS A CONCERN: Among the economists' concerns with the Clinton plan is a proposal to cap the amount insurance premiums could be raised. The Clinton Administration has insisted that this does not constitute price controls. The White House, in a statement, described the economists' letter as "misleading" and "oddly reminiscent of the health insurance industry's scare tactic [advertising] campaign" last year. At a news conference releasing the Jan. 13 letter, John R. Lott Jr. of the University of Pennsylvania said he had rounded up the signatories because they all were convinced that price controls would hurt medical quality and not hold down costs.

At the same time, just down the hall from that news conference at the National Press Building, the Pharmaceutical Manufacturers Association was releasing to reporters an annual survey on R&D spending by its more than 100 member companies. …