THE WHITE HOUSE

Office of the Press Secretary

                            PRESS BRIEFING BY 
       PRESIDENT'S PRINCIPAL HEALTH CARE ADVISOR, CHRIS JENNINGS

The Briefing Room

12:50 P.M. EDT

MR. MCCURRY: Good afternoon, ladies and gentlemen. Today's daily press briefing will begin with the President's principal Health Care Policy Advisor, Chris Jennings, to tell you more about the event soon upcoming.

Chris, come on up here, help us out.

MR. JENNINGS: Later this afternoon at I believe it's 1:45 p.m., the President is going to unveil a new FDA regulation which will require pharmaceutical manufacturers for new and current drugs to do both testing and labeling for medications that are widely used by pediatric populations, or of course, children.

And this is something -- a regulation that the Department of Health and Human Services and FDA have been working on for a good time now. It follows in an effort by HHS to do this on a voluntary level, on a voluntary basis. Unfortunately, over the last several years we've noted that we've actually seen a decline in the amount of testing and labeling done for children, despite the voluntary efforts. So we have been working with the industry, pharmacists, providers, and of course, consumer groups to develop a regulation that the President will be unveiling.

This is just the unveiling of the reg. There will be a 90-day comment period, and then we will go to final. We think it works to complement legislation that is on the Hill, or it can complement legislation on the Hill that also tries to deal with this initiative. And the President will be with the Vice President, the First Lady, and the Secretary of Health and Human Services, and the parent of a child who has had great difficulty for herself and their pediatrician to have adequate information on labeling.

So that's it. Any questions?

Q How much is this going to cost --

MR. JENNINGS: Well, it's unclear. The FDA assumes it's about one percent of the current cost of drug development. It's a very, very modest amount according to them. I think the industry may say it's more. We will certainly be getting comments during the upcoming period, but we do anticipate it being very, very modest because, one, it does not necessarily require clinical studies. They can do pharmakenetic studies, which means they don't necessarily have to have populations of children in order to get the type of information that's necessary. Also, there has been some information for current drugs that are already out there that drug companies can access to get the type of information necessary and required under this legislation.

Q Does it apply to all medicines?

MR. JENNINGS: It applies to all prescriptions that will be used widely by children or are meaningful to children. We anticipate for new drugs that's about 12 to 14 new drugs a year and current drugs, too. And the regulation itself it will mention a category of about 10 drugs that are currently on the market that have inadequate testing.

Q Did the drug companies fight this?

MR. JENNINGS: Well, the drug industry has indicated today and last night that they look forward to working with us in a collaborative effort. I think that they are not overly thrilled about the concept of it being required or mandated. We would only point out that in the last five years we've actually seen a decline in necessary testing and that we see no other way to address the problem. I anticipate that over the next 90 days we'll have even more serious discussions with them. And I hope by the end of the day they will be supportive of other regulation by the time it goes final.

Q Did you say you identified just 10 drugs that are currently on the market that need --

MR. JENNINGS: The regulation itself lists 10 categories of drugs ranging from asthma to antibiotics to pediatric AIDS and particularly these protease inhibitors that are being used in a significant way. There may well be others but we will go ahead and review. Of course, many of these drugs have been on the market for so long that some information has become available, and pediatricians feel that they have the information they need and getting the adequate clarifications will not be difficult.

Q So is this a problem -- are kids being over-medicated?

MR. JENNINGS: I think that you'll see that the major problem is that there are three categories -- what happens is really three choices for a physicians. One, because they don't have the information they need, they don't prescribe medications that children may benefit from, which obviously is an unfortunate outcome. Secondly, and what I would anticipate happens most frequently, is they guess. Frequently, they guess right. They've had lots of experience. Physicians know -- have a good sense of their patients and their needs. And third, they guess wrong. They either under-medicate or over-medicate, sometimes with tragic consequences. There have been some cases of deaths that have been reported because of the lack of information. That's why the American Academy of Pediatricians and many other physicians throughout the country, the Family Physicians, the College of Physicians, strongly, strongly endorse this information being made to them -- and this regulation.

Q Chris, are there any liability concerns? Are the companies concerned that if they say that this drug might be all right to use on children under 18 or under 12 and it turns out that it isn't, then all of a sudden they've got a problem.

MR. JENNINGS: They actually raised liability concerns during the vaccine compensation debate several years ago, then they dropped that as a major concern of them. We have no indication or no evidence whatsoever that information on such testing has created any liability concerns. We've asked in the past for specific examples. They have given us none. I don't anticipate that being a very significant concern. We will talk to them about that the during the comment period, but, again, I do not think that is a serious concern.

Q How many children take these medications?

MR. JENNINGS: Millions. Certainly we're talking about everything from asthmatics -- children with asthma, to children who have AIDS, to every known disease that children access. So we're talking about probably anywhere between millions to even more than 10 million children.

Q Why aren't drug companies are already doing something that sounds like it makes so much sense?

MR. JENNINGS: Well, I think that they would say that they have some -- I don't know exactly what they would say. I think you should ask them. My personal belief is that they think that a lot of the information they have obtained for adults is somewhat adequate, that it's not necessary to impose additional costs on the industry, and that they've raised concerns. They would also argue that they're doing better, notwithstanding some of the data to the contrary.

Q If I could switch that question just a little bit, why is it that the FDA hasn't done this before?

MR. JENNINGS: Well, the FDA, and before Dr. Kessler left, he worked very hard on this regulation. He consulted with the industry for a number of years. They asked for us to go voluntary compliance and to come up with some incentives for them to do it on a voluntary basis. We did that. We released a reg in 1994. It clearly has not had the desired effect, and so we're going beyond that today.

Q You mentioned prescription drugs, but how does this apply to over-the-counter medications?

MR. JENNINGS: Well, this is for prescription drugs that doctors prescribe frequently. A lot of over-the-counter drugs do have pediatric labeling information, but that's something that I will tell you I have not looked into or is not part of this regulation today.

Q Secretary Shalala yesterday was indicating that so many OTC medications just simply say, ask your doctor, and that she indicated that this may move to clear that up.

MR. JENNINGS: Well, this is for prescription drugs, and, certainly, if there is a major concern on OTC level, we will be consulting with the FDA about that.

Q You mentioned protease inhibitors. What is the problem there with the drug companies -- they are not adequately providing information to patients, or doctors, or who?

MR. JENNINGS: Well, as you may know the protease inhibitors are some of the most difficult to use medications and to prescribe. They are very complicated. They deal with regimens of prescriptions. They are usually and sometimes called drug cocktails. They have very, very differential impacts on children. There have been drug companies, and I'm sorry there was one Angoram or a smaller drug company that did do pediatric studies much to the praise of the AIDS community and others recently, but many other companies have not. This is very, very significant and absolutely essential information for any pediatrician for treating a child who has AIDS.

Q Chris, does this mean that a lot of parents will be asking to have their children tested?

MR. JENNINGS: No, not necessarily, because a lot of this testing can be done on information currently available. Pharma-kinetic testing, which does not require that I have actual children doing testing. It's based on computer simulations of differential metabolism rates of patients. So we don't anticipate it to be a major population although there will be some of that testing. And, obviously, all of that testing is done on a voluntary basis in trials throughout the country.

Q Do you expect that the industry will try to block the regulation?

MR. JENNINGS: We would be very disappointed if they blocked this regulation. We would fight very, very hard, and I doubt that they would want to do that this year in this Congress. But I think you better ask them. But my general sense after conversations with the pharmaceutical manufacturers association last evening was that their desire was to work with the administration on this regulation in a collaborative, constructive way. We anticipate that they will live up to that commitment.

Q You mentioned categories of drugs. In what categories of drugs do you see most of the over-prescribing or the guessing by physicians that --

MR. JENNINGS: You know, I think that that's a question better answered by some of the physicians groups who will be here later this afternoon, so -- I'm not a doctor and I wouldn't want to guess some specific data in that area.

Q Chris, Mike indicated we could run a couple other health-related questions by you today.

MR. JENNINGS: It would be my pleasure. Thank you, Mike.

Q On the Medicaid situation with New York, there are some accounts saying you're trying to get together with New York legislators to fashion another solution. Is it accurate to say you're backtracking on this, or what are you trying to do exactly?

MR. JENNINGS: No, I welcome the question. I think we need to backtrack a little bit about this whole issue, just for one moment. We have worked very hard with the New York delegations, with the committees of jurisdiction, with Senator Moynihan, Senator D'Amato, with other members in trying to fashion a way to assist some of the problems New York is facing with their provider tax situation.

We explicitly raised concerns and objections -- very, very serious objections to the way the Senate Finance Committee passed a broad-based waiver approach to New York only on the provider tax issue. We made that very clear in a letter from Frank Raines and in subsequent conversations from myself and other representatives of the administration to members and staff on the Hill.

In an effort to try to work out a compromise, we worked very closely with the Secretary's office and Bruce Vladeck's at the Health Care Finance Administration to see if we could look at a compromise approach to dealing with legitimate concerns that New York had raised about provider tax issues. We gave them some specific alternative language that would have addressed about half their problem. The New York delegation -- the committees of jurisdiction were given that language. They said they needed to run it by folks. It was rejected.

We explicitly said we still had major concerns to that. No one ever reached any agreement on what was agreed to by the Senate Finance Committee by any representative of the administration. And we continue to have objections to that process.

One last point that I think I've got to make is that there are at least 14 other states who have provider taxes in this country who were not given any type of waiver protections as was outlined in the New York provision. Had we gone to doing New York it would have been a classic Washington-based rifle shot provision for one state and one state only. And it would have been impossible for us to say no on provider taxes that we believed to be impermissible under current law and statute.

As to your original question as to when we are going to meet with them or will we meet with the New York delegation, we have ongoing strong relationships with New York. I think that's best exemplified by the New York waiver negotiations that were completed about a month or two ago. It was widely praised by the Governor, by the New York delegation, by the Mayor, by representatives of Labor. We have a very good track record in working out problems with New York that are legitimate in nature. We will do the same as it relates to the provider tax issue. We will be more than happy to meet with them in the upcoming weeks. It will be done in a way that is consistent with our ongoing negotiations with every state. And it will be done by the Department of Health and Human Services.

We will be happy to help facilitate that but those are conversations that have to be done by HCFA, HHS and the state of New York in consultation with OMB and the Domestic Policy Councils.

Q So when Mr. Raines said that this question had not been raised at his level, he was mistaken?

MR. JENNINGS: No, he -- in the meetings with the members, when they were talking about children's health, Medicare, Medicaid, education, welfare, taxes and all the other multitude of issues that were raised at that level, an issue with regard to one state's labor provisions did not get raised to that level. Mr. Raines did send up a letter outlining all of our concerns with Senate provisions, including the New York problem. We, as the administration, are on record opposing the approach the Finance Committee took. But it was not raised at that level, but it was raised directly to -- by me and many other representatives of the administration to the committees of jurisdiction. And we went the extra mile in a good-faith effort to try to address concerns that would not have had a special impact on any other state, would have only dealt with a New York issue that is unique to New York, which is this regional tax issue.

Q When you said that you had discussed language that would have addressed about half of New York's problem, do you mean financially -- in other words, it would have helped them recoup about half of the $317 million that they would have gotten out of this over five years?

MR. JENNINGS: Whatever the estimate of the number is, we think it's about half dollar-wise.

Q So you think you can come up with a solution that's legally defensible that will get them back half?

MR. JENNINGS: We made a proposal that moved in that area on the legislative front. The question now remains whether we can do it on a regulatory-administrative front ourselves without legislative action. We think that there might be possibilities. We will be deferring to conversations with HHS on that matter.

Q The Republicans say that in the final negotiations any serious issue was kicked up to the top level, and so the fact that you never kicked this up to the top level gave them every reason to believe it was not a major obstacle or in any way veto bait. Given that other issues were kicked up to the top level, didn't they have a legitimate basis for concluding that you had decided to give on this since you didn't kick it up to the top?

MR. JENNINGS: Well, I honestly do not believe that that's the case. There are hundreds and thousands of provisions in this legislation; not every single provision could be kicked up to the top. Members of this budget committee, of our working group and on the Hill, were working around the clock on major, major issues that had profound effects on the whole country. This was an issue that was related specifically to New York. Clearly, it was a major concern to us. The President, subsequent to the agreement, asked us to go through the balanced budget agreement to see if there were any provisions that met his criteria for potential line item provisions. New York, by definition, made those criteria and was the reason why we went to the action of line item.

Q If I could just push that one more time. Given that this is the only spending issue that was vetoed, doesn't it seem logical, if it was so serious a concern that it would ultimately be vetoed, that it should have been kicked up to the top? And again, doesn't their argument that you never signaled that it was this important seem to have some basis?

MR. JENNINGS: Well, we had many issues that could have been potential veto items throughout this negotiating process that there were specific discussions, and we worked them out to a compromise -- in some ways that we would have preferred not to have been the case. There are a number of Medicare provisions, Medicare savings, MSA, the private fee for service option, et cetera, are things that we had to negotiate out, things that we didn't particularly like a great deal, but we had to go for.

There are going to be examples of provisions in any budget reconciliation legislation, I would suspect, that include hundreds, if not thousands, of provisions that may not meet the criteria of a presidential discussion that still do not meet the criteria of an acceptable provision. And this was just one of those.

Q Just to make sure I understand you correctly, are you saying now the administration is considering a regulatory compromise that will give New York roughly half of what it would have gotten under the bill?

MR. JENNINGS: What I'm saying is, we had a specific legislative authority to move into that direction and what we are trying to do is to evaluate if we have the authority to move in that direction on an executive-administrative approach.

Q You said there were about 14 other states that have this same problem with provider taxes. Did you offer them a similar -- have you been offering them similar sort of compromise?

MR. JENNINGS: That's a very good question. On the regional tax issue that we have offered, or we've tried to offer to New York, as far as I'm aware of there is no other state that has a similar concern. What New York has is a whole bunch of other issues related to other provider tax issues that are very similar to other states. But on the issue of regional tax, it is a small provision that has a significant impact on New York and New York only that does not have ramifications to a broader population of states.

Q Where do you stand in your discussions with those other states? I mean, all those states with provider taxes that are deemed unacceptable, inappropriate, or illegal --

MR. JENNINGS: Right.

Q So where are you on the status of those?

MR. JENNINGS: We've already indicated to many of them that we do have concerns. We are going to have further discussions with them in the very near future.

Q New York was the only one that's being offered a compromise --

MR. JENNINGS: New York has one provision that is not applicable in any other part of the country, and that's something that we're willing to look at because we think it may be consistent with the original intent with the law that was passed in 1991.

MR. MCCURRY: Two last questions, here and here.

Q I've been told that New York has been applying for this waiver from HCFA since 1991. Why hasn't HCFA ruled on this previously?

MR. JENNINGS: Well, there was a question of whether we had the legal authority under the statute to be able to do that, and also to determine what kind of impact it would have on all other states. There are many other states who have waiver requests into the administration on these provider taxes. We are currently undergoing an intense review of all of those states and we will be doing -- you will be, I'm sure, hearing more of that as time goes on.

Q We understand the President has on his desk for action today a law that would create a postage stamp to support breast cancer research. If the President plans on signing this, we understand the administration had raised objections to it -- that you didn't like the way it allocated funds. Have those objections been overcome, or have you just decided as a political matter to go ahead and sign it? And are you concerned that this could result in sort of the disease of the week type legislation?

MR. JENNINGS: Well, we have raised some concerns about this. We think on balance it builds on a lot of the efforts that the administration has had. We've had a significant increase in breast cancer research dollars that the President has personally been very, very support of. The First Lady and others and Secretary Shalala has had great interest in pursuing this. We think this is just one more way to get additional resources.

The one thing that we are concerned about and will still guard against is to make sure that these dollars are not used to replace current allocation resources -- in other words, those dollars are used -- they will not supplant they will supplement what we already have in the system. And that was a question we've always had about this approach. We're going to make sure that we do everything possible working through Treasury and HHS to make sure that it happens.

Q What about other diseases? People may come and want an AIDS stamp or a leukemia stamp -- are you prepared to go along with those proposals?

MR. JENNINGS: I think that's a legitimate question that we're going to have to evaluate and, again, we did not make the proposal ourselves. I think that there is -- you know, people can raise concerns about that approach. But, again, on balance, we think that this is more than acceptable and that we're going to do everything that we can to address our concerns.

Q And the President will approve it today?

MR. MCCURRY: I expect him to sign it today.

Q Can I just ask one question about the President's event. First of all, $13 to 20 million is the number that has been bandied about about what this would cost drug companies. Is that about right?

MR. JENNINGS: That is a number that is included in the current reg that is being made public today. It is an FDA estimate. I assume that the industry will raise questions about that estimate. And, again, this is a reg that is being released today. There are 90 days of comments and before it goes final, we review all that data before we make a final determination of the exact cost impact of these regulations.

Q And there are 10 drugs right now currently that will be affected?

MR. JENNINGS: There are 10 that are listed explicitly in the reg. That does not mean that that covers the whole panoply of drugs that would necessarily come under the jurisdiction.

Q Can you give an estimate for that, for that whole gamut -- 10s, 100s, 1,000s?

MR. JENNINGS: There are about, I would say, on a yearly basis we're talking about roughly 15 or so drugs a year that will have to come under this because we're estimating about -- I'd say 12 to 15, maybe more.

Q Those are new ones. I was talking about the existing ones.

MR. JENNINGS: The new drugs -- I mean, the existing drugs, there is at least 10; there may be more. And we're going to have to see how frequently -- how rapidly FDA can get that information out to pediatricians and the families who need this information.

Q Do you know those 10 off the top of your head?

MR. JENNINGS: It's in the regulation and I can tell you that asthma drugs are one of them. But if you'd like to afterwards, I can get you a list.

Q At the President's news conference last week, he said that the administration would be addressing the issue of health care quality for nursing homes and I think possibly home care shortly. Can you expand on that at all?

MR. JENNINGS: Not in this context. No, I think he's, the President has a long -- from the days he was even an Attorney General in the state of Arkansas, he had major concerns about quality issues with the nursing homes and also has a great interest in seeing if there are ways that we can look at alternatives to institutionalized care because he thinks that there are cost-effective approaches.

In so doing, though, he also wants to make sure that we address what he considers to be unacceptable situations as it relates to allegations of and real fraud and abuse in home care. And so he wants to -- he will be, I assume, in fairly short order, Looking at potential actions to address both issues coming from different angles.

Thank you.

MR. MCCURRY: Thanks, Chris.

END 1:15 P.M. EDT