| JUDITH H. BELLO, EXECUTIVE VICE PRESIDENT FOR POLICY AND STRATEGIC AFFAIRS, PHARMACEUTICAL RESEARCH AND MANUFACTURERS OF AMERICA BEFORE THE SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS April 15, 1999 Mr. Chairman and Members of the Subcommittee:On behalf of the Pharmaceutical Research and Manufacturers of America (PhRMA), I am pleased to report that the research-based pharmaceutical industry will be well-prepared to meet the systems-related challenges presented by the Year 2000 (Y2K). PhRMA represents the country’s leading research-based pharmaceutical companies, which are investing more than $24 billion annually in the search for new cures and treatments. Our members discover and develop the innovative prescription medicines that play such an important role in keeping all Americans, including our nation’s veterans, healthy and productive. Because we are keenly aware of the critical importance of our products to people’s lives and welfare, our industry launched a massive readiness effort more than three years ago to ensure that there will be a continuous supply of medicines to patients during the Year 2000. Our companies are continuing to perfect their systems to combat any Y2K problems. A survey of our members – released 10 days ago – showed that:
The respondents represent about 90 percent of the U.S. research-based pharmaceutical industry. Our industry’s ability to cope with Y2K challenges is enhanced because we do not operate on a "just-in-time" manufacturing basis. For this reason, we have learned from discussions with wholesalers and retailers that the supply chain on average contains a 90-day supply of medicines. Further, a robust rapid-response network of manufacturers, wholesalers, and retailers already exists to deal with supply shortages, whether at a particular pharmacy or caused by any emergency or natural disaster. We are working to ensure that this rapid-response network will be prepared to handle Y2K disruptions. We are also fully cooperating with Congressional Y2K Committees, the President’s Council on Year 2000, the Food and Drug Administration, and the Departments of Veterans Affairs and Health and Human Services in preparing for the Year 2000. For example:
Our industry is committed to working with our suppliers and distribution channels around the world – as well as with the federal and state governments – to continue our efforts to facilitate an uninterrupted supply of medicines throughout the healthcare chain. We also are committed to reassuring physicians, patients, and consumers by informing them of what we are doing and will continue to do to ensure a continuous supply of medicines. Ultimately, success in meeting the Y2K challenge depends not only on our industry and the other links in the supply chain, but also on doctors, hospitals, insurers, and – not least – patients themselves. Hoarding and stockpiling by patients could create a greater threat to the uninterrupted supply of medicines than any computer glitch. In closing, Mr. Chairman and Members, let me stress that we in industry face two Y2K challenges. Our first job is to fix any problem. Our second job is to fully cooperate with Congress, the Administration, and the myriad other parties involved in health care to engender fact-based consumer confidence that the problem is, indeed, being fixed, in order to avoid the far greater, more certain problem that hoarding would create. These two industry jobs are linked. We cannot avoid panic-driven hoarding by correcting the Y2K problem alone; we must also engender consumer confidence that hoarding is not needed and, in fact, would be counterproductive. On the other hand, we cannot engender such confidence without first fixing the problem. Please understand that the same experts within our member companies who are working to correct and avoid any problem are the same experts who have the facts that numerous parties are seeking to assess Y2K readiness in health care. While we are pleased to cooperate with everyone, these experts must be able to fix the problem – which only they can do – so that the public can be assured that the medicine supply will be uninterrupted and hoarding will be unnecessary. To avoid a health-care problem, we must succeed in both jobs, and we are committed to doing so. The complete results of our survey, a press release about the survey, and a statement by Kevin L. Thurm, Deputy Secretary of Health and Human Services and Chair, Health and Human Services Sector of the President’s Council on Year 2000, are attached to my statement. The survey results also are available on our website. I appreciate the opportunity to testify before the Subcommittee on the vital Y2K issue, and will be pleased to respond to questions. Back to News from Hearing
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