May 9, 1994

In a tectonic shift of industrial power, drug manufacturers have lost control of the sale of their products to a handful of upstart managed-care companies, which have rapidly taken charge of more than half the nation's $60-billion-a-year drug business. Trying to regain control of their market, some drug companies have acquired managed-care drug companies of their own. On Tuesday, SmithKline Beecham bought Diversified Pharmaceutical Services for $2.3 billion, following the lead of Merck & Company, the world's largest drug maker, which acquired Medco Containment Services last November for $6.6 billion.

After a six-week review of an Administration policy that he said is no longer "sustainable," President Clinton appointed a well-known black Democrat today as his new special adviser on Haiti. The President also announced plans to allow Haitian refugees hearings at sea to determine whether they should be granted asylum. Mr. Clinton said that the evidence of mounting political violence in Haiti made the new asylum policy necessary and asserted that the United States also considered it necessary for domestic and foreign policy reasons to use sanctions to force a return to democracy.

In the days after he was elected, Rudolph W. Giuliani scratched the title of First Deputy Mayor out of the government organization chart. But he clearly has not eliminated the job. To the contrary, Peter J. Powers, the shy, self-effacing Deputy Mayor for operations, has emerged over the last four months as the strongest second-in-command seen at City Hall in years, despite a profile so low that a police officer recently asked him for identification when he tried to enter the building.

This was Jericho today under the Palestinian self-rule that went into effect four days ago: Israeli soldiers set up roadblocks along the main roads outside town and, offering no reasons, declared the area to be a closed military zone. No one could be found at the local office of the Palestine Liberation Organization.

Voters in Austin, Tex., made their city the first to repeal a policy that had provided benefits to companions of municipal workers. Page A8.