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Rx PARTNERS RESPONSE TO PRESIDENT CLINTON'S ADDRESS TO A JOINT SESSION OF CONGRESS

 WASHINGTON, Sept. 23 /PRNewswire/ -- Pharmaceutical companies reacted to President Clinton's address to the nation with a mixture of praise and concern -- praise for the President's ambitious plan to reform America's health care system and assure broad coverage for prescription drugs, and concern in light of provisions that are expected to cost the pharmaceutical industry thousands of jobs and billions in investment capital.
 "We are very supportive of the President's argument that there should be greater security and simplicity in our health care system, but we are deeply concerned that the plan will impose what are effectively price controls and taxes on an industry that has been dramatically changed already by managed competition and free market forces," said Ray Egan, senior vice president, Bristol-Myers Squibb.
 The realities of managed competition -- coupled with threats of price regulation, "blacklisting," and huge new "rebates" that would additionally tax the industry -- have caused significant downsizing and cuts in jobs and research budgets already, and the President's plan just reached Capitol Hill tonight.
 -- Managed care is already influencing 80 percent of the privately insured population and this number will grow under managed competition.
 -- In recent months, eight major pharmaceutical companies have announced layoffs of more than 13,000 people, most of whom are highly trained specialists and many of whom are researchers; industry-wide, more than 20,000 employees have lost their jobs.
 -- Mere discussion of price controls has caused a 40 percent reduction in the equity value of the American pharmaceutical industry and led to venture capitalists virtually deserting the fledgling pharmaceutical biotechnology industry.
 The American Health Security Act of 1993 would impose controls and constraints that will stifle innovation, discourage research and development, and bring bureaucratic interference to an industry market place which is responding to competitive market forces.
 -- New Medicare "rebates" would increase the corporate tax burden by billions of dollars a year, taking money from new drug research budgets and pouring it into uncertain government uses.
 -- Research and development would be less likely because it would be more difficult to recover the costs associated with bringing a new drug to market -- an average of $359 million.
 -- The new National Health Board, a new government "Breakthrough Drug Committee," and new powers for the Secretary of Health and Human Services all would bring additional bureaucracy to bear on an industry that in the past two years has voluntarily lowered the annual rate of increase in drug prices from 9.5 to 3.2 percent, well within the rate of inflation.
 The Rx Partners support the broad initiatives for health care reform contained in the President's plan, especially his recognition of the need for affordable prescription drugs for all Americans. But if the price of reform is more government and less choice, higher taxes and lower quality, then every American should ask what will be the long term consequences of the American Health Security Act.
 This release was endorsed by Searle, Warner-Lambert, Eli Lily, Bristol-Myers Squibb, Upjohn and Hoffmann-La Roche.
 -0- 9/23/93
 /CONTACT: Al Madison, 202-434-8529/


CO: Rx Partners ST: District of Columbia IN: HEA MTC SU:

MC -- NYON1 -- 4990 09/23/93 00:53 EDT
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Publication:PR Newswire
Date:Sep 23, 1993
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