The MacNeil/Lehrer NewsHour

[Tones and intro music] I'm Judy Woodruff Congress and the debates over the budget and clean air. Drug companies making a profit from AIDS and a most unusual artist tonight on the McNeal/Lehrer NewsHour. [Beeping tones]

[Beep, Intro music] Good evening, leading the news this Thursday, Panama's Noriega claimed Washington recruited and paid leaders of the failed coup, the State Department called that absurd. Israel rejected Washington's call for an Israeli Egyptian meeting. Four Americans in a West German shared the Nobel prizes for chemistry and physics. We'll have details in our news summary in a moment.

Judy Woodruff is in Washington tonight. Judy? After the news summary, we go first to two tough issues facing the Congress, the budget and the Clean Air Act. Congress watcher Norman Ornstein walks us through both. Then two principles in the debate over clean air join us, Congressman Henry Waxman and Norman Lint. Next, a documentary report on how some pharmaceutical companies are making fat profits from AIDS and finally arts correspondent Joanna Simon with a profile of a controversial artist, Jenny Holzer. Funding for the NewsHour has been provided by AT&T. AT&T has supported the McNeal/Lehrer NewsHour since 1983 because quality information and quality communications is our idea of a good connection, AT&T, the right choice. And by the John D. and Catherine T. MacArthur Foundation, a catalyst for change. And by PepsiCo.

And made possible by the financial support of viewers like you and the Corporation for Public Broadcasting. Panamanian strongman Manuel Noriega claimed today that the Bush administration recruited and paid leaders of the failed coup. Noriega told reporters of the Boston Globe and Los Angeles Times, the United States was involved before, during and after the coup. He claimed that more than a million dollars was found at the bank account of alleged coup leader, Captain Eric Murillo. The State Department was asked about the charge. Do you have anything to say about Noriega's claim that the United States bought the coup plotters? That's absurd. What specifically is absurd? That the United States paid for the coup plotters? Did any U.S. government. That's a Noriega claim. What? Did have any U.S. government funds have been contributed to the bank accounts of any of the participants in the coup of whom the U.S. is aware?

I've never asked that question and I'd rather ask to find out for you. I don't know. One of the. It's never come up. White House spokesman, Marlon Fitzwater, said he also would look into the report, but he added I don't believe anything Noriega says. The President of Argentina, Carlos Menem, said today that Panama will be kept out of the group of eight Latin American nations until democracy is restored. He spoke in Peru at a summit meeting of the regional leaders where Noriega's regime was denounced as a dictatorship. Judy? Politicians across the country today began to size up the results of yesterday's abortion votes in the Congress and the Florida legislature. Both bodies voted against restrictions on abortions. Many elected officials, mostly Democrats, who favor abortion rights, claimed that they emerged in a stronger position. At the U.S. Capitol, Democratic leaders in both houses said yesterday's close house vote permitting government-funded abortions for victims of rape and incest represents a dilemma for President Bush, whose advisers say he might veto the bill.

The question is a narrow, but a very important one. If a woman is the victim of rape or incest and becomes pregnant, and she does not have enough money to pay for an abortion, should Medicaid pay for her abortion? The House of Representatives says yes. The Senate says yes. President Bush says no. The President's position is wrong. We do not have the votes, however, in House of Representatives and in my judgment to override the veto. So the President has the power, he has the power to deny an opportunity for poor women to make a choice in these tragic circumstances. I hope as Senator Mitchell hopes that the President will not exercise that power. Also today, the House voted final approval on a bill to ban burning or desecration of the American flag.

The bill provides up to a year in jail and a $1,000 fine for anyone who damages or burns a flag. President Bush has said, however, that he prefers a constitutional amendment to a simple statute. And a resolution to achieve that will be taken up in the Senate next week. In South Africa, two riot policemen were acquitted of charges that they acted like wild dogs against anti-apartheid demonstrators. The charges were brought by a fellow policeman. We have a report from Cape Town by Kevin Dunn of Independent Television News. Lieutenant Gregory Rockman is the first South African policeman to condemn publicly the actions of his colleagues, his accusations leading to a rare prosecution of these two riot squad officers for assault. The prosecution arose from this interview. I just noticed about 20 to 30 policeman, just rushing the crowd. The regional magistrate condemned the beatings as despicable, but said the officers in charge weren't personally responsible. He said, however, it was astonishing riot squad members could not be identified by the police

and brought before the court. Lieutenant Rockman said the not guilty verdict was unbelievable. It's ridiculous what the outcome was. If you can if you can take the state of emergency protected them, and that's why they therefore are not guilty, and the magistrate made it quite clear. So that means to say they can just go around and beat our people. But for the riot police, satisfaction. I'm proud of it. So you'll be in the... And what do you think of the outcome? It's good. It's good? Yeah. Lawyers said the verdict above all reinforced the immunity of the police under the continuing state of emergency. The man convicted of killing Swedish Prime Minister, Olof Palme, was set free today after an appeals court said there wasn't enough evidence against him. Christer Pettersson was convicted of the killing in July, even though no motive was established, no weapon was found, and no witnesses said they saw him fire the five shots that killed Palme in the street in 1986.

Two more Nobel Prizes were announced today, and Americans took most of the honors. The prize in chemistry was shared by Thomas Cech of the University of Colorado and Sydney Altman of Yale. The prize in physics went to two Americans, Norman Ramsey of Harvard, and Hans Dehmelt of the University of Washington, and to a West German, Wolfgang Paul. Also today, investigators of this summer's DC-10 crash in Iowa say they have discovered a crack in the engine part that was found yesterday in an Iowa cornfield. They said the crack was probably there before the plane took off. It is not yet clear if this crack caused the engine failure that led to the accident. 112 people were killed in the crash, but another 184 survived. Israeli Prime Minister, Yitzhak Shamir, today rejected Washington's call for an Israeli-Egyptian meeting to break the log jam on Israeli-Palestinian negotiations. Secretary of State, James Baker, suggested that Egyptian and Israeli foreign ministers

meet in Washington. In a speech today, Shamir said the proposal was an inflated and unnecessary idea. Shamir also said today that Israel's air defenses failed to detect the Syrian MiG-23 fighter flown in by a defecting pilot yesterday. He said the Air Force was investigating how the Syrian flew unchallenged across northern Israel. After 45 years of communism, Poland's new solidarity government today announced a plan to shift the country to a free market capitalist economy. It would make Poland the first country ever to make such a switch. The plan includes an extensive sale of state-owned property and removal of restrictions on private ownership. And Yugoslavia's Prime Minister said today that his country will need $1 billion to convert to a market-oriented economy. Ante Marković, told reporters here in Washington that he has discussed the possibility of loans from a number of sources, and he will raise it with President Bush when they meet tomorrow.

That's our news summary. Still ahead, congressional politics, the high cost of AIDS drugs and artist, Jenny Holzer. [Music] We begin tonight with an update on the Congressional battle over the budget. This afternoon, the Senate began debating its version of the deficit reduction bill known as reconciliation. It needs to be passed by next Monday or mandatory across the board budget cuts totaling $16 billion will automatically take effect. At issue is whether to strip the bill clean of hundreds of what many members call extraneous measures in order to ensure quick passage. And if so, does the president's push for a cut in the capital gains tax rate get stripped along with them? So far, no agreement on what stays and what goes. But here's a sample of today's debate. This bill, this 1300-page bill, this bill which weighs 12 pounds and 15 ounces, this

bill which is a perversion of the legislative process, which is as one newspaper described it garbage, this bill which the chairman of the committee has correctly and aptly described as larded with the provisions that are by any reasonable standard unrelated to the reconciliation process. This bill, which trashes the legislative process, which corrupts the budget process, comes before us at the very last minute, now here we are confronted with a 1300-page bill. So far as I know, the first copies of which were first seen by the eyes of man at about 11 o'clock this morning, at least that's when I first saw a copy of it. Comes before us and senators are supposed to pretend that they can legislate responsibly on this kind of a piece of legislation. Mr. President, in my view, that's impossible. Senators are actually going to vote for a stack of papers that I am informed is taller than Dr. Ruth.

Just filed this morning at 815, our committee staff are pouring over those like you can't believe. And there's no way that they're consistent. And we're going to run the country on this type of an approach. Mr. President, will the senator yield to me for a moment? I will. Shocking. I have listened with with interest and growing admiration to the statement of the senator from Utah. I would like to ask if he is aware that there is sort of, in the corners of the chamber and in the cloakrooms and in the committee rooms, sort of a floating caucus that is trying to stimulate interest in the idea of stripping out everything from this bill that doesn't really address itself directly to curtailing the deficit. That, in fact, there's two or three points of view. One is that we ought to strip out those things which are technically in violation of the rules. But that there is a broader sort of bipartisan good government movement which we're trying to pump up a little. The effect of which would be to strip out maybe as much as 80 or 90 or maybe 95% of

this bill. All I can say is I can speak for our side of the floor. That is true. And I believe it has to be true on the other side. I can't believe that they're going to try to slip by on the American public and on businesses and labor all over America rules and statutory enactments that have no relationship to this just because just because the FLCIO wants it. We owe the American people something better than governmental deadlock over irrelevances. And I would say to my colleagues that we simply must keep the footnote here from displacing the full text. We've got to keep the tail from wagging the dog. We will work together to try to eliminate the elements that are clearly extraneous under our rules.

The capital gains threatens I fear to freeze us all together. In my view, capital gains is not deficit reduction, it's deficit addition. Joint Tax Committee estimates that the Jenkins Bush capital gains tax cut will begin losing substantial sums of revenue in fiscal 1994. By the end of the decade, it will add some $21.5 billion to the federal deficit. Surely that's got no business on a budget reconciliation bill that should be presented for the sole purpose of deficit reduction. I don't know of any reason in the world why the President of the United States ought to be expected to roll over and play dead or to fail to advocate something that he believes in. I say that while at the same time emphasizing that I personally believe if there were an agreement to take everything out of this bill that we ought to take capital gains out to and put it someplace else.

But if we're going to leave in some people's pet items or some people's worthy projects, then I don't know why the President should be treated any worse than anybody else. Joining us now to help explain the complicated maneuvering over the budget bill as well as one other prime issue now before Congress is Norman Ornstein, resident scholar at the American Enterprise Institute in Washington. Norman, it doesn't sound like they're much closer to agreement on the floor. What about off the floor and behind the scenes? What happened today? The maneuvering is furious. We're still seeing attempts by the White House and the Congress, by the Republicans and the Democrats in the Senate to come to some agreement, an agreement that would either result in a vote on capital gains now and try and get it dealt with before Monday. Or a guarantee of a vote soon thereafter, that from the perspective of the administration would keep them from having to overcome a filibuster, a super majority, just be able to deal with the 50-vote normal majority that would exist in the Senate. They're not getting close to that point.

The Senate Democratic leaders believe they've got some leverage here. They're not at all happy with what they see as unreasonable demands and stalling on the part of the administration. You could see last night, Senator Mitchell, who normally is as genial as could be on this program, was anything but genial. But they're still trying to get it done. The big problem that they've got, Judy, is that we have a very tight deadline here. They don't operate very well with tight deadlines. If we don't get this done by the end of the weekend, we're going to get these across the board budget cuts that hit deeply, particularly in areas in defense and the domestic arena. That'll cause some chaos out there. Members of Congress went to the brink. They saw what it would do. They decided they don't particularly want it from conservative Republicans like Armstrong and Hatch all the way over to liberal Democrats. But if they keep a lot of these other matters in there, the child care bill that passed as part of this omnibus package in the House, the catastrophic health bill, which was repealed entirely in the House in a different approach taken in the Senate. Or capital gains, they have to get and negotiate a package in the House and Senate that they agree on entirely before sending it to the President.

They're simply not time to do that. They've got to strip it down. Now the leverage is a question of where your capital gains is. Again, last night on the show, it sounded as if they were not even close, that they had tried, but were not even close to an agreement. But you're saying that 24 hours later, there's been no progress made. They've been meeting and meeting, but nothing's— No, you have both sides unwilling to budge at this stage. But remember, many other things are happening. Several senators, David Bourn, a Democrat, and Bob Packwood, a Republican, are trying to find a capital gains bill with a lot of sweeteners to individual senators that will get the 60 votes. If they can come up with a package very soon, they may say, all right, forget it. Which is what they have to do in order to get this. Yeah, as we saw, we'll discuss a little bit last night, in a budget bill, in this particular budget bill, part of the budget act that was put in by Senator Byrd, the former Democratic leader some years ago, is that if you've got something that is extraneous to the specific question of getting to the budget targets and that would lose revenue over a five-year period, you need a super-majority or 60 votes to bring it through. That's the arcane provision of the rules, which has been used before that Mr. Darmon

was complaining about. Which is what some of these Democrats are trying to come up with, but have not been able to reach agreement. Right, and we may see a vote now on something that can get 60 votes, which will have a lot of other sweeteners built into it. We might well see, and what we're likely to see now is the Senate simply go ahead, vote on a stripped-down package, end up with something that they can compromise with the House, send it to the President, and see him veto it. Remember to one other aspect of this, a lot of what's going on in the maneuvering is, who's going to take blame for this? And the Senate and House are trying to get- I mean, if capital gains doesn't pass or- No, if we get to a sequester across the board budget cuts and all kinds of chaos breaks out many program areas for lots of Americans, Congress wants to say, George Bush vetoed it, we didn't have to have this happen. The President wants to be able to say, we were trying to be reasonable and they brought it about it. But right now it's not clear which side would take the blame because they're both looking exactly, but blame avoidance is a major motive here. All right, let me turn you to another subject, and that is a vote in a House Subcommittee just yesterday on the Clean Air Bill.

There was an interesting line-up of supporters and opponents there. Just talk about that. Okay, we have had the Clean Air Package that the President submitted being considered in the House Energy and Commerce Committee, and its subcommittee on the environment, Health and the Environment, chaired by Henry Waxman, for several weeks now, and it's had its ups and downs. It has many different provisions. One of the key provisions in the bill, as proposed by the President, was a move very strongly towards alternative fuels being used in automobiles by the end of the century. And the bill, as the President had proposed it, would have required automobile companies to have a million cars fueled by a methanol or some comparable, very clean fuel by 1997. That was scrapped in effect on the Auto companies, auto industry does not like that. Neither does the oil industry. They'd prefer to go with a reformulated gasoline, which doesn't burn as cleanly as methanol, and in effect, they won a victory yesterday by a very narrow vote, 12 to 10, with the President's position being basically supported by the Democrats and the Republicans voting for the weakening amendment.

And how did that come about? I mean, you also had the interesting phenomenon of one key part of the administration, the President's, the White House Chief of Staff, Staff John Sununu, sending one signal, saying it's okay to weaken the President's bill, and Mr. Riley, the head of the Environmental Protection Agency, sending a different signal. What's going on here? There's some confusion in the part of the administration, I think, in terms of what it really stands for, and also a reluctance to twist arms on an issue like this, where the strongest proponent of weakening this provision was John Dingle, a very powerful Democratic Chairman of the Commerce Committee, and most Republicans wanted to go along with the wishes of the auto industry and of the oil industry. But basically, I think what you had here, as well, was a little bit of chaos. We had the head of the Environmental Protection Agency calling from a payphone in Chicago to Henry Waxman, the Chairman of the Subcommittee, saying, we oppose this amendment which would weaken the provision. But Norman Lent, a ranking Republican on the subcommittee, saying, well, I talked to John Sununu, the Chief of Staff, in the Oval Office, and he says that's not true. Now we're getting conflicting judgments here.

It's not unlike some other issues, the catastrophic health bill that came up in the Senate a little while back, where we got conflicting signals from Dick Darmon, the budget director and Louis Sullivan, the head of HHS, and people are a little unhappy on the Hill about these mixed signals. What does that say about the administration's ability to get its message across to the Congress? Is this just an isolated incident, do we think, or do we know if it's a pattern? We've not had a particularly good week or ten days for the administration in terms of its relations with Congress. Clearly, tempers are frayed here on the budget issue. There are a lot of people unhappy about the mixed signals on the clean air issue. We had problems with that regard on catastrophic health. All coming after the smashing victory the President had on capitol gains in the House of Representatives just 10 days ago. They don't quite have their act together yet in terms of communicating with the Hill and deciding on a set of priorities. And there's clearly some reluctance here and there to twist some arms and bang some heads together to get the President's way in terms of setting those priorities. This may be part of a learning curve, I don't think it's a deliberate, uh, uh, uh set of. You don't think they're - screw ups - doing this on purpose?

No, I don't think so. Okay. Norman Ornstein, thank you once again. Thanks, Judy. Robin? As we just heard, that House Subcommittee, yesterday struck a blow at one of the key provisions in the President's Clean Air legislation. With us are two key players in that action. Henry Waxman, Chairman of the Subcommittee on Health and the Environment, and Norman Lent, ranking Republican on the full Energy and Commerce Committee. They join us from Capitol Hill. Gentlemen, you've been listening to Norm Ornstein, Congressman Waxman, with a day to think it over. How do you explain what really happened yesterday? Well, I don't know how to explain it. All I know is that the President of the United States, who wanted to be known as the Environmental President, sent a Clean Air bill to us. And the centerpiece, as he identified it, was alternative-fueled motor vehicles that would burn cleanly. And his Environmental Protection Agency said that if we're ever going to get the clean air, we need these alternative-fueled vehicles. And then, in our committee, the ranking Republican member, Mr. Lent, and almost, well, not almost every Republican but one, voted to gut the President's Clean Air bill alternative-fueled section.

I think it's a blow to the administration goal in this clean air bill, and I think it's a big blow for our environmental efforts where we've been trying to work on a bipartisan basis. How do you explain Congressman Lent, what happened yesterday? Well, I think all of you folks, including my good friend Henry Waxman here, are missing the main story. The main story being that George Bush's Clean Air bill cleared the House Subcommittee chaired by Henry Waxman by a unanimous vote of 21-to-nothing. The part that you're talking about, the alternative-fuels provision, is a provision in a 300-page bill that includes acid rain, air toxics, and a host of other very complicated issues that amounts to less than 1 percent of all of the cleanup that will take place under the terms of this Bush Clean Air bill. I'm the chief Republican sponsor of the bill. I'm very proud of the fact that the bill was reported out. This is the first time in 12 years that Chairman Waxman's Subcommittee has reported out

a clean air bill. He didn't do it last year. He didn't do it the year before. This year, because of the leadership provided by President George Bush, we have the bill out of the committee. I want to congratulate Henry because we've had our problems in the past. I've had to write him letters. Let's take the bill up and let's get it moving in past years. We had no progress. But the bill was reported out last night by a vote of 21-to-nothing, unanimous. We're now going to go to the full committee and we're going to get a clean air bill. The American people are not going to have to wait any more years for cleaner, fresher air to breathe. This is a good bill and the provision you're talking about, I don't want to quibble with you, but it amounts to 0.9-tenths of 1 percent of all of the pollutants that are going to be cleaned up under the terms of this bill. Congressman Waxman, are you quibbling over such a tiny piece of it? I think Mr. Lent is certainly minimizing what the President of the United States called

the centerpiece of his program. Now the program is to clean up the air where a hundred and fifty million people in this country live that exceeds the health standard. The leading cause of air pollution in this country is the motor vehicle. The President said, let's work on something innovative. Let's develop cars that will not pollute. And the way to do that is to get away from gasoline and go to natural gas or methanol or ethanol, not just rely on gasoline alone. This provision that was gutted, was gutted by a replacement that said, we'll have gasoline, we'll have a standard that will, for all practical purposes, be gasoline-powered cars. And the automobile industry won't have to manufacture them. They'll only say they have to certify their ability to manufacture them. It is a central point of the bill. It is the main strategy for cleaning up the air. And I'm pleased we got this bill out. We didn't vote it out unanimously because we liked every provision, but we want to get

this bill moving. But this is a blow to what the President wanted and what we're going to absolutely need, not according to Henry Waxman, but the Environmental Protection Agency as appointed by the Bush administration. There are just so the viewers understand this Congressman Lent before I ask you a question. The bill did say that it would require automobile manufacturers by a certain date to manufacture a million cars a year capable of burning alternative fuels. The amendment said they would be required to demonstrate their capability to do that. Now, why is it good public policy for you to require them to demonstrate their capability and not go ahead and make the cars? Well, let me again say the original Bush bill has been amended at least 25 times. When we add up all those 25 improvements and corrections, we have increased the amount of pollutants that will be taken out of the ambient air under the Bush bill by at least

four times. Now this particular provision, which you're speaking of, would amount to less than 1% of all the pollutants that would come out of the air. The original bill, it's not an unimportant provision, of course it's important. And we're trying to, as with other provisions, strengthen it and improve it. The bill did say, as originally put in, that manufacturers had to manufacture 1 million cars. But it didn't say who was going to buy them. And they would have to provide for alternate fuels. Now we know that a car which burns a methanol, 100% neat methanol, would have to be bought by someone. This isn't Russia, it isn't Poland, we have no way. And there was nothing in the bill that said which Americans who live in nine cities, which are the most worst non-attainment areas, Houston, Los Angeles, New York, Chicago, Hartford, San Diego, which of the citizens in those nine areas? And I represent one of them, Henry represents another of them, we're going to be chosen.

We don't know if it was by lot or by lottery or just how it was going to be done. But those people would have to pay an awful lot more for their cars. They would have to pay an awful lot more for the fuel that would go in those cars. And they would then, if they wanted to take a drive in the car and they drove out of their non-attainment area out of their city, they would go to a filling station where they would find that they couldn't tank up. Methanol would only be sold within the non-attainment area. I represent a hard working middle class district on Long Island. We have towns like Hicksville and Levittown. I don't represent Hollywood and fancy neighborhoods in California like my colleague here, Henry. And I can't ask a vote for a bill that's going to require my constituents to buy two cars. One car, one car fueled by 100% methanol that would have to be the neighborhood car, because you couldn't take it out of the Long Island, New York area and find a gas station that

could have methanol. Well, let's hear a second car to take long to hear Congressman Waxman again on this. Well, I am anxious to respond to this. The criticism that Mr. Lent is making is of the bill he introduced on behalf of the administration. Now that bill would have provided that cars be available, that we start moving down the road to get these alternative clean burning cars. Now I've been in Long Island, Mr. Lent. I know you don't have automobile's manufactured there, and you don't have oil there, refined. But you do have a lot of pollution. And the president said this was going to reduce pollution. His amendment is terrific for the oil industry. They don't want competition. They don't want alternative fuels. They want the monopoly over the fuel that's sold. And the auto manufacturers don't want to be required to make available cars that are cleaner burning because it's going to be a burden for them. Well, it may be a burden for oil and it may be a burden for autos, but it's a greater burden on human health in New York, Long Island, Los Angeles, and all over this country where people are adversely affected by ozones.

Okay, gentlemen, excuse me, you both explained what you feel about the substance of the bill. Now, I'd just like to go back in a couple of minutes left. What happened yesterday, you were told, you say, Congressman Lent, you said on the floor, you were told by the Chief of Staff John Sununu that the administration did not object to the amendment that was passed. Mr. Waxman, you said you were told by the Chief of the EPA, Mr. Riley, that the administration did object. Now, Congressman Lent, what happened? What was the explanation for that? Look, it was a very exciting markup. There were amendments flying. As I said before, we had over 25 amendments to the bill. There were many conferences, many huddles, many telephone calls back and forth. It was my understanding that the administration had not made any overt attempt to oppose this amendment. Uh, Congressman Waxman has a different concept. But the important thing is, the amendment was passed and then the bill, which is a monumental historic achievement, passed unanimously.

So the Bush bill has been approved by a subcommittee that failed to act for eight or nine long years, and the American public will have a bill before the full committee very, very shortly. The details of who called who and who called one, frankly, I don't think that's the point. It's almost quibbling over who said what to who. The important point here is that the bill is passed the House Subcommittee. It's before the full committee, and I look forward to working with Chairman Waxman. And that section is going to be revisited in the full committee. Once again, the administration may have some amendments they want to offer. We'll look at them and we'll consider them. Let's have a final word from Congressman Waxman, we're almost out of time here. How do you explain the division of opinion within the administration? Is this chaos or confusion or something else? Well, I don't know quite that was going on, but this wasn't the Bush bill that was passed out of committee. It was the gutting of the centerpiece of the Bush bill. And I talked to Bill Riley an hour before the markup, and he told me that they were against

this because this was a strong, they had strong feelings they wanted to keep this part of the bill. And I asked him if I could represent it, that was the administration point of view. He said I could. Evidently, Mr. Sununu told something else to Mr. Lent, it's not something quibbling. This is an important part of the Clean Air Act. And Mr. Lent is the Chief Republican sponsor of it. And the Republican members wouldn't even stand by their own administration. Gentlemen, I have to thank you both and say that's our time for tonight Congressman Lent Congressman Waxman. Thank you both. Judy. Still ahead on the news hour overcharging for AZT and an artist who has no stranger to controversy. [Music] Next tonight, the high cost of AIDS drugs. In the first move of its kind, a pharmaceutical company announced yesterday that it would provide an approved drug to needy AIDS patients free of charge. The company, Lyphomed, of Rosemount, Illinois, has the sole licensing rights for the drug

aerosol pentamidine, which prevents pneumonia in AIDS patients. Critics protested the high cost of the drug and asked the Food and Drug Administration to allow foreign manufacturers to compete in this country, in an effort to bring the price down. The company's action may blunt that effort, but there are many other drug makers whose profits are being questioned by those infected with AIDS. Spencer Michaels, a public station KQED, San Francisco, has this report. 41-year-old Dan Turner, a former typist, is the longest surviving AIDS patient of Dr. Paul Volberding, director of the AIDS clinic at San Francisco General Hospital. Turner started having symptoms of Kaposi's sarcoma in 1981. Just as AIDS was becoming known, and he was treated over the years with a wide range of drugs. I began by taking a vinblastine chemotherapy for four months, then I was one of the first ten people to do alpha interferon.

I started AZT. I have also done acyclovir for herpes virus. I hope to start DDI, which does not suppress the bone marrow like AZT. Although Turner got many of his drugs free as part of clinical studies, AIDS treatment has still been expensive for him. Myself and most of my friends have are totally broke, and we don't have any money, so we do rely on the system to get these experimental drugs. Those who have had an income and some type of savings have to pay for the drugs, and of course immediately lose their savings because of the high cost of the drug. It tends to be an expensive disease in that the patients often have multiple problems that require chronic drug therapy at the same time. It seems to me that in most diseases patients may require just as expensive a drug, but they need them for shorter period of time, and they don't usually require three or four

or five drugs simultaneously, and AIDS that's not the case. Activists, most patients and doctors alike have zeroed in on this drug as one place where AIDS costs should be reduced. Labeled as retrovir, it is more commonly known as AZT, and it is the only drug approved by the FDA to slow the progress of the AIDS virus, HIV. New evidence shows that AZT is also effective in delaying the onset of AIDS symptoms in patients with the virus. A year's supply of AZT at first cost $10,000, then it dropped to $8,000, and in mid-September its manufacturer, Burroughs Welcome, reduced the price to $6,400, or $1.20 per pill. With 43,000 Americans currently stricken with AIDS and at least a million others carrying the virus, the potential market for AZT is enormous, and so are the potential profits for Burroughs Welcome.

They cut costs by 20%, clearly a step in the right direction, there's no question about that. Pat Christian is executive director of the San Francisco AIDS Foundation, an educational and political group which lobbied to get the price of AZT reduced. They are entitled to earning a fair profit, but the issue here is what is a fair profit, and I would argue that billions of dollars carried on the backs of people with AIDS in this country is not a fair profit. Another group of AIDS activists ACT UP, took more direct action. They vented their wrath at the drug industry by disrupting the New York and Pacific Coast stock exchanges. ACT UP member Michelle Roland says militant activists are having an impact in reducing drug costs, although she says the price is still too high. People don't always like what ACT UP does, and that's okay. What ACT UP does is it raises the issues, and it makes people think about the issues. Unfortunately, they often focus on the techniques, and they'll say, gee, we don't like it that they've chained themselves to the stock exchange, but now they're talking about the price of AZT, and they're looking at a national health care crisis.

Whether they felt that this was a causal or fortuitous association between their activism and our lowering the price is really their opinion, there's no question, however, that it was relayed, that it followed a very long and very careful calculations of what we believe the appropriate price would be, so that we could continue to have the return needed to fund our very innovative research program. Dr. David Barry is Vice President for Research for Burroughs Welcome, the British-owned firm that manufactures AZT in North Carolina. Burroughs Welcome has defended its pricing of the drug, explaining that research and development costs, including clinical trials, are high. The elements that go into deciding the cost of a drug include not only its cost of manufacture, but the number of patients taking the drug, how long they take it, what dose they take it in, and what our expected needs for continuing research are.

But AIDS activists point out that AZT was synthesized in 1964 by a cancer researcher working on a government grant, and not by Burroughs Welcome. They were not involved in the early development, they were certainly involved in the development and testing of the drug as it relates very specifically to HIV infection in AIDS, however, as a company, they stand to make billion dollars or more off of this drug, their costs surely were not anywhere near a billion dollars, so for them to say that they have to continue charging these extraordinary prices because they have to cover their costs is now a vacant argument. There's no basis in it. I think it's inappropriate and would lead to false and misleading conclusions if one tried to say, well, how much money do you make on an individual drug? Because they don't answer the question, how much money do you lose on the 10 sometimes hundreds of drugs that are complete failures?

I have to point out that in developing drugs for diseases that are yet to be treatable, failures are far more common than successes, and that the failures never pay for themselves. The successes have to pay for the failures. Burroughs' need to make a profit get support here at the University of California Medical Center in San Francisco. Pharmacy Pschool Dean Jerry Goyan served as head of the Food and Drug Administration during the Carter presidency. What's frightens me is the Congress deciding what we're going to do is we're simply going to tell the companies what they can charge for things. And if they cut that back too far, then it would basically choke off the flow of new drugs in the future. You look around the world, countries that come up with new drugs, our countries in which people can make a dollar by doing it. But government ends up paying part of the high bills for drugs like AZT because many of the patients get assistance under various federal and local programs. In addition to drugs, there are enormous hospital costs.

In San Francisco with just three quarters of a million people, where the disease has had especially hard, the price tag is astounding. In a study just released, San Francisco's Public Health Department projects that care for individuals in this city infected with the HIV virus will cost $430 million a year by 1992. Treating patients outside of hospitals alone will cost $100 million a year. And 70% of that will be for drugs. Those costs, especially the new costs of taking care of asymptomatic people infected with HIV, are more than the city can afford, according to George Rutherford, the MD who heads the city's AIDS effort. I think the city has shouldered in a vastly disproportionate amount of the load compared to any other city in the world and compared to most states. And this additional cost, I think, has to be viewed as beyond even the resources of this

city, which has been extraordinarily generous in fighting the AIDS epidemic. This has to be federal costs. Keeping medical costs down is one of the hallmarks of Kaiser Permanente, the nation's largest health maintenance organization, or HMO, with more than 6 million members. Kaiser's Northern California medical centers are currently handling 2,000 active AIDS cases. And the cost of that care is of great concern to Dr. Paul Larsson, chairman of the organization's AIDS Committee. We probably do a better job of taking care of chronically ill patients than most other organizations do. We have a continuum of care from inpatient to outpatient. Early on in the epidemic, we shifted care from the intensive care in the hospital to the outpatient setting. Our costs in providing care in a study that we did 2 years ago was around $30,000 from diagnosis to death.

Other organizations at that time were putting out cost figures of up to $150,000. While it pays about the same as other institutions do for AZT, Kaiser economizes in other ways, principally by giving AIDS therapy not in a hospital, but at this infusion center. Here, infected patients who need intravenous antibiotics to fight infections brought on by AIDS, get their medicine by appointment, in a setting away from the hospital and its built-in cost. And in some cases, Kaiser does this therapy in a patient's home, also saving money. The patients here have prepaid medical insurance, and in 80% of the cases, their drugs are included in the plan. But even for these men, there are financial worries. If I would lose my medicaid, I wouldn't have any way to pay for my drugs. Well, I'm on a very limited income, so I've got to watch everything, because by the time I pay my rent, my bills is like 350, that only leaves me like 250, and that's the eat-on, and for any share of costs that I have to do with any medicine, and so yeah, the financial thing

is a big worry. In the past month, Kaiser announced a 20% increase in premiums, and listed the cost of AIDS care as one of many reasons. Need to take a look at you today, some. Outside Kaiser or City Run medical facilities, private physicians see some patients who can't seem to penetrate the bureaucracy or whose benefits have run out. So they simply don't get the drugs they need. It's not uncommon for a patient to come in, and I'll say, well, how are you doing on the medicine? Are you taking it all right? Are you tolerating it all right? And they say, well, I ran out, and I couldn't afford to get it anymore, so I haven't been taking my medicine, and I'll get some more money out. I'll try to get back on the medicine again. We oftentimes just don't charge patients for visits, trying to help out because their medicines are just so expensive. As new AIDS drugs are developed and more patients demand them, the financial crunch gets even more critical.

Unless the drug companies voluntarily reduce prices, the federal government can either try to force a price drop or pay the going rate. [Music] Finally tonight, the artist Jenny Holzer. You may not know her name, but you may have seen her work, not in museums or art galleries, but in everyday life. People sit on it, wear it, and gawk at it on city streets and suburban malls. Arts correspondent Joanna Simon has a profile of this provocative artist as she breaks into the big time. New York City's Times Square, on December 31st, it's the nation's timepiece, ushering in the new year. [Crowd chanting] The rest of the time, the electronic billboard displays advertising, enticing people to drink more, eat less, charge up, get tranquilized, consume, and don't forget to save. But recently, the billboard's message changed.

I really don't understand what it's saying. It's just very odd. Well, I think this is a real threat to our security. What had the tourists baffled were the messages tucked in between the commercials. One moment the sign was extolling the virtues of a roach killer and the next. And who is Jenny Holzer? Holzer seems to me a very specifically American artist, and I think that's a lot of baloney. Controversial, yes, but Jenny Holzer is an artist, not in the traditional sense because she uses words to create visual art. Instead of paint or clay, Holzer's message is her medium. The phrases she invents wind up on cotton t-shirts, marble benches, bronze plaques, electronic signs. Holzer's sayings have appeared everywhere from German rail cars to

the scoreboard at San Francisco's Candlestick Park. When did you first get the idea to combine words with art? I suppose I wanted to communicate things very directly, and I never liked paintings, narrative paintings or social realist paintings that showed people, you know, hard at work or something or another. So given that I wanted to be very direct about subject matter, I realized that language was a logical way to go about it. Holzer was born and raised in Ohio and studied art in college and graduate school, but she ultimately rebelled. It was a course on the great books of the Eastern and Western worlds that did her in. I was, I think, so appalled at the prospect of plowing through it. I decided to condense all the great thoughts of the Western and Eastern world into one liners. I realized that you could condense a number of things and put them back in the public sphere and have people study them and worry them and hopefully act on them eventually. Jenny Holzer is now well on her way to fame and probably fortune, but just 10 years ago

she was an underground artist, pasting up posters anonymously throughout New York City, often in the middle of the night. Her sometimes bizarre sayings resembled cliches, but often with far darker meaning. Those guerrilla art techniques got her noticed. Michael Opping is chief curator of the Albright Knox Art Gallery in Buffalo. I began seeing things around the city, around New York City and these simple messages. And I didn't know who it was and I was fascinated by it. I thought it was a unique way of entering the art world. Here was someone who had found a way of infiltrating the city with her art, low-cost, economical and poignant. People were talking about it. People continued to talk when Holzer went above ground with her first show in 1982 at Marine Midland Bank in New York City. But the show was abruptly canceled when a bank executive objected to one of her messages. It's not good to operate on credit.

That was crushed. But then I laughed. [Laughter] Holzer continued to antagonize the establishment. In 1984, on the eve of the presidential election, she emblazoned her messages on a truck in Midtown Manhattan. Holzer cheerfully admits to being a quote, lefty liberal. So many are surprised that next year's Venice Biennale, a major international exhibit of contemporary art, will feature a Jenny Holzer pavilion. She was given that honor by a U.S. government-appointed panel, which in recent years sent the work of older, more mainstream artists to Venice. Isamu Noguchi represented the United States in 1986. Jasper Johns in 1988. But the United States has also been criticized for playing it too safe. Kirk Barnardo is director of painting and sculpture at the Museum of Modern Art in New York. What do you think went into the choice of Jenny Holzer? Personal taste on the part of the committee, sooner or later most of the important energies

in the art world are driven by people with individual and personal commitments to the art they like. And I think that this group of curators, who made the selection for the Biennale, felt personally that this was moving, invaluable art to them, and they felt that it was an apt representation of what's going on in the art of the United States today. Would you agree with that? Yes. I find that the work constantly intriguing or unsettling when I'm in the presence of it. And that to me is something that attracts me. But those who were not attracted to Holzer's work were outraged by her selection. Hilton Kramer, a noted art critic, is editor of the Conservative Journal, The New Criterion. I think the show will be, as they say, a success because this is the way a certain segment of European intellectual opinion really likes to think of America anyway. Their idea of America is shock America.

They admire us for our shock, not for our great things. And Jenny Holzer is perfect for them. Do you consider Jenny Holzer's work art? Well, unhappy as I am to have to admit it, I guess I do, but on the terms, on the understanding that failed art is also art. That is just as bad sex is still sex and bad politics is still politics, bad art is still in some sense art. As long as it's Hilton who's mad, that makes me happy. Why? I guess probably wouldn't support his political positions. So as long as I'm offending him, I guess I'm on the right track. What kind of response do you want to provoke with your art? I suppose I want to point out things that need some kind of work, some things that need to be prevented, some kind of actions that need to be undertaken. So do you believe that you really have a social conscience and this is what you're trying

to bring out? Well, I hope so. But is that the main purpose of your art? Probably. Yeah, that and to stretch my own thinking and other people's thinking to see what you can do with your mind. For someone who didn't play by the art world's rules, Holzer now finds herself embraced by that establishment. In addition to next year's show in Venice, Holzer has a major exhibit coming up at the Guggenheim Museum in Manhattan, she was there recently to plan its installation, choosing marble for the benches that will be engraved with her sayings. The same phrases will be displayed on a 530-foot moving message unit to be mounted on the outer walls of the museum's spiral ramp. Up until now, you've made a career by going outside the museum and gallery system. Now with your shows at the Guggenheim and being in the Venice Biennale, that's all changed. How do you feel about that? I'm surprised, on some days, pleased, other days, harried. I think it's important for my work to remain in public places.

I still like the way it functions when people do come across it and are surprised by it. To that end, Holzer continues to create public art. This summer with a grant from New York City's public art fund, she installed benches in Central Park. Everyone found thoughts they could relate to. One of the things that's carved in the benches is manual labor can be refreshing and wholesome. What about that? It ain't to refreshing and wholesome to me. [Laughter] Sometimes we like to get a break from manual labor. Three days later, when construction was finished, the benches had become a popular lunchtime attraction. Offering seating for eating, as well as food for thought. Especially that one day, you have to hurt others to be extraordinary. Okay, I say this, that's what it takes sometimes. Across town, the spectacolor sign of Times Square was featuring Holzerisms.

Another project sponsored by the public art fund, but the public wasn't quite sure what to make of it. I think it's what New York is all about. It's a little bit crazy, a little bit neurotic, a little bit different, strange, bizarre, something for everybody. Where are you from? Florida. Can you imagine seeing this in Florida? No, thank goodness. The sign is supposed to be informative, not that crap they're puttin' up there. Do you think something's gonna happen as a result of the sign? Very well could happen, yes. Like what? People could go home agitated and that could ruin their whole evening. I think what scares some people is that she deals with the central issues that we think about probably daily, but nobody really wants to talk about sex, death, and war. They're pervasive in our daily thoughts, and she throws them out there like confetti. It's no wonder we're frightened, because it's like a black Egyptian mirror what we see there is ourselves.

Holzer's most ominous show to date is called Lamentz. It opened in the spring at the Dia Art Foundation in New York and runs through next year. It contains coffins and electronic columns with foreboding messages. I was trying to talk about death to acknowledge that death, unfortunately, is getting a little too familiar with everything from bad politics to epidemics. A lot of my work warns about what will happen if you do do this or if you don't do this. I thought maybe it was time to show what does happen if the worst occurs. Jenny Holzer will be sending her vision of death to Venice, along with her affirmations of life. Benches and signs, as well as coffins, will be in and around the American pavilion. But even her curator for Venice wonders how the exhibit will ultimately affect her career. There will be a lot of pressure for her to lighten it up, you know, be nicer. Remember, you know, this is an international dinner party.

Be nice. It's not in Jenny's nature to be nice, it's in Jenny's nature to be truthful. The truth of the matter is, Jenny Holzer's genius may be debatable, but her timing seems close to perfect. [Music] Again the main points in today's news. The Bush administration denied a claim by Panama's Manuel Noriega that Washington recruited and financed the aborted coup against him. And Israel's Prime Minister Shamir rejected a U.S. call for an Israeli, Egyptian foreign minister's meeting to advance the Middle East peace process. Good night, Judy. Good night, Robin. That's our news hour for tonight. We'll be back tomorrow night. I'm Judy Woodruff. Thank you and good night. Funding for the news hour has been provided by PepsiCo. Every day we enjoy people being cold to us, cutting us up, getting fresh with us, tearing into us, and calling us chicken.

In fact, the more people do it, the happier we are, PepsiCo. And by the John D. and Catherine T. MacArthur Foundation, a catalyst for change. And by AT&T. And made possible by the financial support of viewers like you and the Corporation for Public Broadcasting. [Music] [Music] This is PBS. [Silence]