Bush names Medicare candidate

President George W Bush has nominated Dr McClellan as his preferred candidate to head up the Centers for Medicare and Medicaid Services, another agency likely to have a deep impact on the fortunes of the pharmaceutical and biotechnology industries over the next few years.

Dr McClellan will be missed by the pharma industry as he has been responsible for putting in place a number of reforms, including some designed to reduce the time the agency takes to review new drug applications. With ever increasing pressures on drug companies' patent estate, it has become well recognised that shorter review times can provide millions of dollars in additional revenues over the lifecycle of a product.

At the CMS, he is charged with implementing the Bush Administration's controversial new prescription drug benefit plan for the elderly and disabled. This could expand the use of prescription drugs in these populations and thereby boost revenues of the pharmaceutical industry by $139-$150 billion over the next decade, according to estimates.

Analysts at Goldman Sachs believe there will be little impact from McClellan's departure on drug review times because his reforms are in place and working well, although other new initiatives, such as the FDA's new programme looking at routes for the approval of biological generics, could experience some delays. This would be positive for established biotechnology companies but a blow to those with ambitions to build a market for biogenerics.

FDA Deputy Commissioner Lester Crawford, will become the acting Commissioner at the FDA. He previously led the agency from February to November 2002.