Drug firms under fire over anti-competition in USA

ceased operations of disease surveillance yet considered by the Senate, because which "reconciles" tax policies and spendof a standoff over an unrelated matter ing not controlled through the annual and public health training, resulting from the furlough of some three-quarters of its concerning the Department of Labour, : spending process, would reduce Medicare whose funding is included in the same spending by US$270 billion over the next staff. At the National Institutes of Health, : 7 years. Those reductions have prompted measure. the only employees permitted to stay on But the bickering over the spending opposition not only from groups repreduty were those involved in direct patient : bills is only a proxy for the real fightcare or working on projects that would be senting senior citizens, but also from the risk because a shutdown. whether or not and of President powerful American Hospital Association. Congress put at Clinton can agree on a bill that would The measure would also pare$163 billion Some government departments may balance the federal budget by the year over that same period of time from the ultimately escape from the ongoing budbetween the President and the 2002. The president, however, has made Medicaid programme for the poor, as well warfare get as work is on finished individual clear that the bill on which Republicans as turn its operations entirely back to the Congress bills. But the bill that funds have been working all year is not acceptstates. spending DHHS is the furthest of the 13 from able-in large part because of its health . enactment. In fact, it is the only one notprovisions. The final version of that bill,: Julie Rovner

Drug firms

under fire

over

anti-competition in USA

Several weeks after the US Food and

:

Drug Administration publicly scrutinised pharmaceutical companies’ connections with pharmacy benefit management (PBM) companies (see Lancet, Oct 28, p 1151), the General Accounting Office released long-awaited results of its investigation into the ventures. The GAO, had been asked in June 1994 by Representative Ron Wyden (Democrat-Oregon) to determine whether drug company acqui-

: more than 80% of enrollees in PBM : plans. Of those five, three-Medco Con: tainment Services, Diversified Pharma: ceutical Services, and PCS Health : Systems-are owned by drug companies. : PCS, owned by Eli Lilly, has already : agreed to some constraints on its opera-

the five

largest

PBMs manage benefits for

tions by the FTC. The others have not yet had to sign such agreements, but have not : escaped sanctions. In late October, Medco, owned by sitions of PBMs would drive up the cost of pharmaceuticals or otherwise hurt US : Merck, agreed to pay US$1.9million to consumers. The GAO report said that it :: 17 states in a settlement. The firm also had found some dubious practices, and : agreed to begin disclosing to patients that urged the chief US antitrust agency, the : it pays pharmacists to switch them to Federal Trade Commission, to continue preferred drugs and that it is owned by Merck. The GAO found that Medco’s monitoring PBMs owned by drug companies for anti-competitive activity. activities were the most questionable. Just which are healthbefore Merck decided to buy Medco, the PBMs, paid by maintenance organisations and other PBM added seven Merck drugs to the health-care payers to manage the cost of formulary it offers clients. Then, in 1994 do so for almost half and 1995, Medco dropped competing prescription drugs, the US population. The GAO found that drugs, such as Zeneca’s Monopril and

Reductions

sought in US health training

:

Zestril, and Bristol-Myers Squibb’s Pravachol and Capozide from the formulary. At DPS, owned by SmithKline Beecham, no formulary changes had been found that would suggest an undue influence by SmithKline. The GAO concluded that it could not be certain that there had been antitrust violations. But the agency also noted that it could not get access to crucial documents needed to prove anti-competitive behaviour. However, the FTC can, and it is likely to continue monitoring the drug marketplace. A spokesman for Wyden says that the congressman will not seek legislation to regulate drug company ownership of PBMs, but is urging the FTC to keep a close eye on the businesses. A pharmacists’ trade organisation, the American Pharmaceutical Association, also urged the FTC at a Nov 8 hearing to take a closer look at the market, saying that PBMs are helping drug companies drive pharmacists out of business.

Alicia Ault Barnett

Association

of

American

Medical

Colleges president Dr Jordan Cohen says he sees "no justification" for reducing the the former chairman Richard Lamm, : gov-

Calling the US process for training health number of medical schools. While Cohen professions "unplanned and undirected", : ernor of Colorado, says this report will an influential private commission is : provide "a needed blueprint for the health agrees that limits on international medical graduates is a good first step, he questions recommending that medical, pharmacy, : professions on how to redesign themand nursing education programmes : selves for the new world" of managed where the commission derived its significantly downsize to better fit the : health care. Given the resource con- numbers on closures of medical schools. The recommendations are based on a straints that the USA faces today, "it demands of the health-care delivery structure by the 21 st century. projected loss of half the nation’s hospitals : makes no sense to have taxpayers subsiThe Pew Health Professions Commisdising at great expense the training of and 60% of hospital beds by the end of health professions that all of the market the century; a "massive" expansion of prision proposes closing some of the 126 medical schools to trim medical school signals are telling us we don’t need", mary care in ambulatory and community : settings; a surplus of 150 000 physicians, class sizes at admission by as much as Lamm adds. most of whom are specialists; a surplus of The USA now has about 240 physi20-25% by 2005; reducing nurse-education programmes by 10-20%; and cutting cians per 100 000 population. Noting that 40 000 pharmacists; and an excess of the number of pharmacy schools by in some mature managed-care plans this between 200 000 and 300 000 hospital20-25%. The 19-member Commission is : ratio is already as low as 140 per 100 000, based nurses. O’Neil admits that the recCommission executive director Edward ommendations will be difficult for the part of the Philadelphia-based Pew Charitable Trusts-one of the largest philanO’Neil says closing medical schools along health professions to swallow. However, he warns that the boards of schools for with tightening access to residence trainthropic organisations in the USA. Comprised of some of the leading movers ing positions for foreign-educated doctors health-professionals and the state legislaand shakers in health care today, the Comwould at least temper the growth of the tures will not be able to ignore them for mission has been a key facilitator of fedphysician supply pool. O’Neil admits, long. eral and private efforts to "rightsize" the however, that closing medical schools is US health-care workforce. Commission not going to be easy.: Janet Firshein 1416