Drug Industry Concerned that Budget Constraints Will Lead Lawmakers to Consider Price Controls and Easing Patent Restrictions

Although lawmakers placed the debate over a Medicare prescription drug benefit "on hold" after the Sept. 11 attacks on the World Trade Center and the Pentagon, National Journal reports that they will likely address the "politically charged" issue this year, but "under new realities that make pharmaceutical industry lobbyists a bit nervous." The recession that began in March, increased spending on anti-terrorism measures and the 10-year, $1.35 trillion tax cut that lawmakers passed last summer have limited funds that "once might have paid for an expensive universal prescription benefit" under Medicare. National Journal reports that as a result, lawmakers may consider legislation to impose price controls and reduce patent protections on prescription drugs -- proposals that have "long been among the biggest fears" of brand-name drugmakers. Industry lobbyists predict that lawmakers will begin to discuss drug prices, discounts and patents this year, adding that President Bush may expand the pharmacy discount card plan that he proposed last July. In addition, state governments, which face "growth rates of up to 20%" for Medicaid prescription drug costs, have begun to negotiate more aggressive discounts from drug companies and to promote "greater use" of generic treatments. Congress also may reform the 1984 Hatch-Waxman Act, which allows brand-name drug companies to hold patents on drugs for a certain number of years before generic drug makers can market the medicines, National Journal reports.

'Leg Up' for Drug Makers?
In spite of possible efforts to reduce the price of pharmaceuticals, National Journal reports that the Sept. 11 attacks and subsequent anthrax incidents may have "given drug companies an early leg up" in the debate over a Medicare prescription benefit and could help "bolster its position" in "battles" over patents. The drug industry -- often "portrayed as wealthy corporate executives who gouge consumers and force seniors to choose between medicine and food" -- "boosted its public standing by delivering a quick and, some argue, generous response to the national tragedies," National Journal reports. Pharmaceutical companies donated medicines and vaccines to burn and trauma victims, sent supplies to hospitals and sent teams to assist those in need in New York and New Jersey. The Pharmaceutical Research and Manufacturers of America established a task force to "make its companies' services readily available" to the federal government. PhRMA President Alan Holmer said that the efforts may "help the industry's image," but added, "That isn't what drove the actions" (Serafini, National Journal, 1/5).