No issue is more important to the clinical quality and financial stability of healthcare in America than the future of the pharmaceutical enterprise. The First Annual National Congress on the Future of Pharmaceuticals in Medical Care - Innovation and Cost Management is the preeminent national conference on this crucial topic.

Number of New Drug Approvals by FDA 1988-1998

Pharmaceutical Innovation. America's 40-year investment in biomedical research has paid off. An abundance of new and improved drugs and devices offers unprecedented opportunities to better the quality of patients' lives.

The United States leads the world in pharmaceutical innovation. Of 152 major global drugs launched between 1975 and 1994, nearly half originated in the United States. An estimated 50,000 pharmaceutical company scientists are currently researching more than 1,000 new medicines for cancer, heart disease, AIDs, Alzheimer's and other diseases.

Pharmaceutical Cost Management At the same time, the unparalleled advances are presenting payers, providers and policy makers with enormous challenges.

• How should costs and benefits be weighed?
• How can appropriate use be encouraged without also promoting inappropriate and wasteful use?
• How might available policy and economic levers be used to promote the very best outcomes?

While consumers, biotech and pharmaceutical firms, clinicians, and payers are all ultimately interested in improving health, each has different, often conflicting short-term objectives. Until now there have been few settings for all the players to come together and discuss strategic solutions. The First Annual National Congress on the Future of Pharmaceuticals in Medical Care - Innovation and Cost Management will be such a collegial forum.

Considering what is at stake, the dialogue is overdue. The biomedical, consumer, and information revolutions are among the drivers that are projected to increase pharmaceutical spending by an estimated 300% in the next decade (according to the Agency for Health Care Policy and Research), compared with a 6% decrease in spending for hospital services. Prescription drug costs as a proportion of health plan premium revenues have increased from 5.4% in 1990 to 11.4% in 1997. For example:

Pharmaceutical Research and Development Expenditures by U.S. Pharmaceutical Companies Selected Years, 1980 -1999

• The pace at which new drugs and devices are being introduced is quickening: it is now double what it was just five years ago.
• Consumers are more aware than ever of these new agents, thanks to their greater interest in health, direct-to-consumer advertising, and the use of the Internet.
• Consumers, particularly the elderly, greatly value pharmacy benefits and dislike changes in formularies.
• New research and development techniques are leading to innovative treatments for conditions never before effectively treated, greatly expanding the markets for drugs and devices.
• Lifestyle-enhancing drugs are causing controversy and raising legal issues about the appropriate and realistic use of resources and coverage.

The bottom-line effect for health plans, and ultimately purchasers and consumers, is sobering. In 1997, 39 new drugs were introduced following FDA approval, and in 1996, 53 new drugs were brought to market. It is estimated that approximately $25 billion will be spent on pharmaceutical research and development in the United States in 1999. One leading managed care organization, Harvard Pilgrim, has estimated that drugs will account for 22% of healthcare costs in 2002, a greater proportion than that allocated to hospital costs. Per-member per-year costs for prescription drugs have risen by 57% between 1993-97, and approximately 16% in 1998 alone.

We know little at this point what the effects or outcome of the enormous investment in new and improved pharmaceuticals will be and whether, in the end, overall medical costs will be reduced. The strategic and policy decisions made while we are searching for those answers are, however, critical.

US National Health Expenditures for Prescription Drugs and Percentage of Change 1993-1997

During 5 pre-conference symposia, 11 plenary sessions, and 40 concurrent sessions with approximately 100 national experts, the Congress will focus on not only major issues of public policy pertinent to the pharmaceutical enterprise, but also on related clinical, regulatory, financial and operational issues. The Congress will address the concerns of all sectors of the pharmaceutical enterprise, including pharmaceutical manufacturers of both patented and generic drugs, pharmacy benefit management firms, distributors of pharmaceuticals, governmental and private purchasers, health plans and health care providers.

Average Cost of Retail Prescriptions in the United States 1996 - 1998