considered part of standard medical practice. Most third-party contracts specifically exclude coverage of investigational drugs.

Although such policies seem straightforward, they leave considerable room for interpretation. For example, when a severely ill patient receives an investigational drug, how much of that patient's care is attributable to the investigational protocol and how much would have been required in any case? Also, how should one handle costs for a disease such as AIDS, in which the appropriate and medically required treatment for a patient may be investigational in nature? Finally, how should third-party payers assess coverage for FDA-approved drugs used in ways that are not specified on the drug's FDA-approved label?

Some patient advocates claim that worsening economic conditions in health care have caused third-party payers to become increasingly restrictive in their reimbursement policies. In certain situations, they say, a patient's decision to enter a clinical trial has led insurers to refuse reimbursement for hospitalization, physician fees, and patient care costs that would have been required even if the patient had not been involved in a research protocol. They worry that such behavior will have a negative effect on drug innovation; physicians and institutions that become wary about reimbursement policies might stop entering their patients in clinical trials.

Patient advocates also express concern about the emphasis on drug labels; they say that they have seen a growing tendency to restrict reimbursement for FDA-approved drugs to indications specified on the drug label. They suggest that this practice, and the related practice of requiring prior approval for reimbursement of unlabeled indications, interfere with the physician's ability to provide good medical care. For example, a representative of the Association of Community Cancer Centers reports that there are 12 indications for interferon specified in the U.S. Pharmacopoeia (USP), but only 3 are listed on the FDA label.

Third-party payers, on the other hand, say that they have responded as quickly as possible to a series of very rapid shifts in medical practice, especially with regard to new therapies. A spokes-woman for Blue Cross and Blue Shield uses recent changes in the treatment IND program to illustrate this situation. From the perspective of third-party payers, she says, the treatment IND was supposed to act as a bridge from phase 3 trials to FDA approval. Suddenly, however, the FDA approved a treatment IND for ddI, which had not even entered phase 2 trials.

Blue Cross and Blue Shield, the Health Insurance Association of America (which represents about 320 independent insurance companies

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