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Biotech / Medical : PFE (Pfizer) How high will it go? -- Ignore unavailable to you. Want to Upgrade?

To: Stephen who wrote (7845)	6/9/1999 7:26:00 PM
From: Anthony Wong	Respond to of 9523

U.S. Drug Costs Will Continue to Surge: Bloomberg Forum Bloomberg News June 9, 1999, 4:43 p.m. ET U.S. Drug Costs Will Continue to Surge: Bloomberg Forum Washington, June 9 (Bloomberg) -- U.S. drug costs will continue to surge at double-digit rates even as several brand- name drugs start losing their patent protection beginning next year, money manager Norm Fidel told the Bloomberg Forum. More than a dozen drugs will likely lose their patent protection over the next few years, including Eli Lilly & Co.'s antidepressant Prozac and AstraZeneca Plc's heartburn treatment, Prilosec. Yet the lineup of recently and soon-to-be introduced drugs will more than offset any declines in drug spending growth due to brand-name medicines being replaced by less expensive generic brands, said Fidel, an analyst and money manager of nearly $1 billion in health-care stocks for Alliance Capital Management. ''The big pile of drugs going off patent in the early 2000s will have some impact on slowing'' drug spending growth, but that ''should be overwhelmed'' by the introduction of new drugs, he said. U.S. spending per person on medicines will likely rise about 15 percent on average over the next few years, he predicted. That means drug costs may account for almost 10 percent of U.S. health spending in a couple of years, compared to 7 or 8 percent now, Fidel said. ''If we get a Medicare drug benefit, it will probably go up even more,'' Fidel said. President Bill Clinton will soon introduce a Medicare drug benefit proposal that would guarantee coverage to 40 million participants in the government health insurance program for the elderly. Fidel and other investors and industry analysts say it is unlikely that Clinton and the Republican-controlled Congress will agree on a Medicare drug benefit before he leaves office in January 2001. That was underscored today at a Senate Finance Committee, where Democratic and Republican moderates expressed skepticism about the Clinton proposal. Senator Bob Kerrey, a Democrat from Nebraska, said his constituents want him to support Clinton's Medicare drug benefit, but he won't until he can determine whether hospitals and other providers have seen their Medicare payments cut too deeply. Hospitals, nursing homes, health maintenance organizations and other health companies are lobbying Congress to restore some of the billions of dollars being squeezed from their Medicare payments as a result of the 1997 balanced-budget law. They argue they are underpaid and worry that Clinton and Congress would seek to cut the growth of their payments even more to pay for a multibillion dollar drug benefit. ''Adding more benefits (to Medicare) might be politically fun, but might be enormously expensive and might reduce our capacity to maintain high quality care in the rest of the (health- care) system,'' Kerrey said. Kerrey has backed a more modest drug benefit proposal by Senator John Breaux, the Louisiana Democrat who chaired a special commission on the future of Medicare that Kerrey served on. That proposal would use taxpayer money to pay for drug coverage of low-income senior citizens. Drug coverage for other seniors, however, would not be subsidized by the government. They could buy drug coverage that health insurers serving Medicare beneficiaries would be required to offer under the Breaux plan. Fidel said Congress will pass a Medicare drug benefit after the year 2000 elections. A Breaux-style plan without government drug-price controls could actually win the support of the industry, he said. A Medicare drug benefit without government price controls would cause drug use by the elderly to surge enough to offset any discounts that they would get on the cost of medicines, he said.