mpanies are aggressively seeking to acquire product and technology rights from US technology companies in order to quickly upgrade their scientific and industrial

pabilities. To aid this process, their government has allowed drugs to come to market at 3 times the price they could have expected in years past, hoping that this will encourage

e development of innovative products and thereby compete with the US.

We can slow research in the U.S. on diseases like cancer, AIDS and Alzheimer's.

e can create an anemic biotechnology industry in the U.S. We can copy the mistakes of

■r principal competitors. Or we can maintain a market-based system that has created one of e most competitive U.S. industries we have ever had.

Iternatives to Price Controls

BIO does not simply oppose the three price control proposals of the Administration.

We have proposed pro-innovation, cost-effective alternatives and let me outline them for you.

BIO supports market based competition among all health care products and services. The restraint on prices resulting from managed competition will serve to restrain prices for herapeutic medicines across-the-board, including prices paid under Medicare. We urge the Administration and the Congress to trust the market system that is the basis of our economy and its health care plan. If we cannot trust these markets to restrain the prices of drugs, it is

hard to see how we can trust in them to restrain other health care costs.

A

BIO supports data collection, research and analysis of the cost-effectiveness and

impact on patient outcomes across a spectrum of treatment options, including medicines,

devices, biological, diagnostics, services, and procedures. For example, this research shouk cover inpatient vs. outpatient care, medicines vs. surgery or hospitalization, and nursing homes vs. home care. We support the development and promulgation of patient practice guidelines.

We are confident that any comparison of health care technologies will find that biotech medicines are worth their cost and effective for patients. We know that managed competition with premium caps will create tremendous cost containment pressures in the health care marketplace, but we are confident that the biotech industry can sell into this market.

In terms of the new drug benefit for Medicare beneficiaries, we believe that this benefit should be provided through the private sector, not on a fee-for-service basis. If we rely on the private sector to deliver a drug benefit, we do not have to rely on heavy-handed, anti-innovation regulation.

Cost as the Only Issue

Biotech medicines are cost effective but the biotechnology industry believes that our concerns cannot focus solely on the issue of cost. Cost is not the only value we should

onor in our health care system.

There is no type of therapy more cost-effective than a vaccine. Any time a medicine

eeps a patient out of a hospital, it saves us money. A policy that discourages the most costffective treatments is incompatible with any priority placed on cost containment.

If we do not develop a cure or therapy for Alzheimer's, we will never be able to ontrol costs. The same is true for AIDS. The ultimate waste in our health care system is he cost of ineffective treatments that do not prevent disabling diseases and death.

Biotechnology therapeutics contribute substantially to a reduction in total health care costs in several ways. Bio-therapeutics shorten or eliminate the need for hospitalization, help o avoid emergency room visits, serve as substitutes for expensive surgeries and keep people out of nursing homes while restoring them to healthy and productive lives. Biotechnology herapeutics are also in many cases more cost-effective than the products they are taking the place of.

For example, granulocyte colony-stimulating factor (G-CSF) helps to restore the blood's immune cells in patients with small-cell lung cancer, reducing the number of days of hospitalization by approximately 50 percent compared with patients who were not treated with G-CSF. The drug costs about $1,000 per course of treatment, but by preventing

infections it can save roughly $7,000 in hospital costs".

The products developed by the biotechnology industry are not just cost-effective; they enhance the quality of life. They often treat diseases and conditions that were previously considered untreatable, for which no effective therapies existed. Alfa-interferon, the hairy cell leukemia example, actually saves the lives of cancer patients. Ceredase, used to treat an extremely rare genetic disease, Gaucher's disease, provides afflicted individuals with an opportunity to live something close to a normal life.

Let me emphasize, however, that if we only focus on costs or even on costeffectiveness, we will neglect some fundamental values. If a patient is likely to die, the least costly and most cost-effective strategy is probably not to treat them at all and to let them die as quickly as possible. This is not health care; this is euthanasia.

A health care system focusing only on financial issues, as important as they are, is not a health care system that any of us can support.

"Glaspy, J. et al, "The Economic Impact of Recombinant Granulocyte ColonyStimulating Factor," Health Systems-The Challenge of Change. Proceedings of the 5th International Conference on Systems Science in Health Care. Editors: Chytil, M.K., et al. Omnipress Publishers, Prague.

nclusion

BIO cannot support health care proposals that discriminate against technology, against w technology and against only one new technology: breakthrough therapeutic drugs.

Cost containment and universal coverage are critical issues, but it does a patient little od if he or she can pay the hospital and doctor bills but there are no treatments or cures - their disease.

BIO cannot support a proposal that looks only at the cost of breakthrough drugs, thout comparing these costs to the costs of any other therapy, and without analyzing the pact of these medicines on the outcomes for patients.

A health care system that discriminates against biotechnology research will undermine r financial markets, curtail funding for research and cripple the U.S. biotechnology dustry.

Destroying America's biotechnology industry would be a tragedy for one of the few merican industries that is dominant in international markets. This industry is the paradigm the high-tech, high-research, high-risk emerging industry that we all know is the hope for merica. We cannot expect to compete based on how low our wages are; we have to ›mpete with our brains.