1990 Annual Report

During the year, PMA also worked on two other major issues relating to the FDA. One concerned the "parallel-track" proposal under which FDA would make experimental drugs available to a
broadened group of desperately ill AIDS patients for whom no other therapy is effective. PMA raised a
number of concerns about the proposal-such as patient safety and company liability-and made several
recommendations to address these and other concerns. The Public Health Service is expected to issue
a draft policy statement on the parallel-track proposal by the summer of 1990.
PMA also called for major changes in the approval process to make more therapies available
to AIDS and cancer patients at hearings held by the National Committee to Review Current Procedures
for the Approval of Drugs for Cancer and AIDS. The Committee, which was established by then-Vice President
Bush, also is expected to issue its report during the summer of 1990.
In addition, PMA worked to encourage private insurance associations to support third-party
coverage for drugs used for indications that, although not on the FDA label, are generally accepted. As
a result, the insurance associations now are recommending that their members extend coverage to off
label uses and to the cost of standard care of patients in clinical trials in a fashion consistent with PMA policy.
In the states, PMA concentrated on Medicaid cost-containment issues. Proposals to implement
a competitive bid/rebate program were defeated in California and Virginia in 1989, and died in Oregon.
In early 1990, however, legislation authorizing rebate programs tied to restrictions on access to medicines
was passed in Georgia, Virginia and West Virginia.
In a number of states, the industry was able to persuade state legislators to increase Medicaid
drug budgets by millions of dollars and/or to enact open-formulary legislation, pointing out that drugs
are the most cost-effective form of medical therapy and that their use can reduce overall Medicaid spending.
Among the states enacting significant drug budget increases for FY 1990 were Florida, Iowa, Louisiana,
Michigan, Oregon, South Carolina, Texas and Utah. Open-formulary legislation was passed in Oklahoma
and Louisiana.
In Louisiana, PMA conducted a comprehensive advocacy campaign involving policy analysis,
coalition building, grassroots organizing, media relations, advertising and direct lobbying on behalf of
an open formulary and increased appropriations for the Medicaid drug budget. Organizations representing
TREATMENT COST COMPARISON
Coronary Artery Disease Schizophrenia

$ Thousands
35
$30,000
30
25
20
15
10
$1,000 5
Annual Surgery
Drug Therapy

$ Thousands
$90,000 100
80
60
40
$9,000 20
Annual Hospitalization
Drug Therapy
Source State of Maryland

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