Additional information-Continued Food and Drug Administration-Continued New York District Inspectors' Work Plans, March 1966- Statement regarding reported instances of lack of therapeutic Statement regarding cost of batch certification of all drugs.. Page 484 451 378 381 384 412 Guilford Drug Co., Hartford, Ala., letter to Hon. Bill Nichols, March 16, 1968.. 932 Herbert, John, letter to Dr. Frankel. Hoffman-La Roche, Inc., answers to written questions of House 1043 570 Exhibit A. Exhibit B Exhibit C. Exhibit D. Exhibit E. Infant mortality rates... 573 574 575 575 576 993 A170 536 Iowa Methodist Hospital, letter to Hon. John D. Dingell, March 22, 1968 Junker, David S., counsel, Wyeth Laboratories...... Kaufman exhibits: 1.-Office of Economic Opportunity letter to Project Directors, 2. Maryland Pharmaceutical Association letter to Dr. Talmadge Provident Hospital Comprehensive Neighborhood Health 3.-"Minutes, Board of Estimates" (Community Action Agency- 4. Letter to Auxiliary Members and Provident Supporters, Sep- Survey-Neighborhood, residents... 5. City Council Ordinance 2259 appropriating $800,000 for ter... 6. Sunpapers article November 7, 1967, "Council Cool to Phar- 8.-Form letters sent to Baltimore City Council re Provident 943 944 946 946 948 949 950 951 952 Lilly & Co., Eli: Lakeside Laboratories, Division of Colgate-Palmolive Co., "Dear 13. Baltimore City Council letter to John M. Frankel, February 12. Office of Economic Opportunity letter to William D. 10. Article by Stephen J. Lynton, January 17, 1968, “OEO 8A. Amendments to City Council Ordinance 2259_ 954 961 962 964 965 966 967 390 Diversified operations.. Number of generic drugs manufactured. 501 Warehousing and distribution service agreement.. Wholesale distributors and availability of drugs (map) Response to questions forwarded by Representative Joe D. 508 512 502 524 1967... Quantity discounts___ Additional information-Continued Lilly & Co., Eli-Continued Wholesale drug distributors added in the last 10 years, through Maryland Pharmaceutical Association, letters to: Page 528 532 J. Joseph Curran, November 9, 1967.. 1053 Maryland Pharmacist, August 1966 article, "Maryland's Medical 1055 Massengill Co., The S. E., "Dear Doctor" letter.. Medical World News, March 8, 1968, article, "For Those Who Need It 386 989 Merck Sharp & Dohme: Invoice specimen_. 646 Statement of principles on distribution and possession of sample "Trading areas," where paucity of independents are concen- 333 Entire States with not a single independent full line NWDA 336 Great American cities with only one "full line" NWDA whole- 363 States containing 75 percent or greater multibranched NWDA 364 Statement of election to accept the District of Columbia Non- Memorandum re "guidelines for Comprehensive Neighborhhood 1002 Organon, Inc., "Dear Doctor" letter 391 Ortho Pharmaceutical Corp.; answers to questions by Committee___ Pfizer, Chas., & Co., Inc., letter to Hon. John D. Dingell, March 27, Plan for pharmaceutical services.. Pharmaceutical services for the Letter to Auxiliary members Sept. 13, 1967.. Additional information-Continued Provident Hospital Comprehensive Neighborhood Health Center-Continued Area pharmacies... Page 981 1054 1049 1051 Record card_. Letter to Charles G. Tildon, Sept. 21, 1967_ Robins, A. H., Co.: Answers to general questions submitted by committee.. 1051 976 871 Additional questions answered... 874 Manufacturer-wholesaler agreement.- 875 1967 sales by major product to Defense Personnel Support 688 Wholesalers appointed, 1961-67. 690 Shrage, Nathan, letter to Hon. John D. Dingell, July 3, 1967---. A169 A169 Smith, Kline & French Laboratories: Customers added, 1958-68_. Wholesalers distribution and promotion agreement, 1966--- 708 713 697 701 707 Tilden-Yates Laboratories, Inc.: Physician price list, July 1967. 887 884 Letter to House Small Business Committee, March 18, 1968--- Wholesale price list, May 1967. Tufts University Health Center, letters to Dr. Greenfield- ___ 1015, 1016 Upjohn Co., The: Recent changes in discount structures. Trade catalog price changes, from June 1, 1967.... Warner-Chilcott Laboratories: Answers to general questions submitted by committee... Equanil, average of annual purchases by ten 250-bed hospitals.. 668 674 630 631 633 634 635 637 639 640 547 549 SMALL BUSINESS PROBLEMS IN THE DRUG INDUSTRY TUESDAY, AUGUST 8, 1967 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON ACTIVITIES OF REGULATORY AGENCIES OF THE SELECT COMMITTEE ON SMALL BUSINESS, Washington, D.C. The subcommittee met, pursuant to recess, at 10:10 a.m., in room 2359 Rayburn House Office Building, Hon. John D. Dingell (chairman of the subcommittee) presiding. Present: Representatives Dingell, Smith, and Conte. Also present: Gregg Potvin, subcommittee counsel; Myrtle Ruth Foutch, clerk; and John J. Williams, minority counsel. Mr. DINGELL. The subcommittee will come to order. This is a continuance of the scrutiny of the Small Business Committee Subcommittee on Regulatory Agencies of practices in the retail, wholesale, and manufacturing pharmaceutical industry. The committee has been scrutinizing certain practices which may or may not involve violation of the antitrust laws, the Robinson-Patman Act, and certain other Federal statutes. As part of these hearings, the Chair is happy to welcome Dr. William S. Apple, executive director of the American Pharmaceutical Association, who is accompanied by Mr. Robert Steeves. Gentlemen, the Chair is happy to welcome you for your statement this morning. The Chair notes that you do have a prepared statement, Dr. Apple, So we will be most pleased to recognize you for that. Parenthetically, the Chair has to note with some regret that the public television bill is up before the Commerce Committee and-I do not think Mr. Conte is aware of this yet, but, Mr. Conte, you may be called upon from time to time to chair the committee, and we will rely upon your good graces so to do. Dr. Apple? TESTIMONY OF DR. WILLIAM S. APPLE, EXECUTIVE DIRECTOR, AMERICAN PHARMACEUTICAL ASSOCIATION; ACCOMPANIED BY ROBERT F. STEEVES, DIRECTOR, LEGAL DIVISION Dr. APPLE. Mr. Chairman, the American Pharmaceutical Association is the national professional society of the pharmacists of the United States. I am Dr. William S. Apple, executive director of the American Pharmaceutical Association, and I am accompanied by Mr. Robert F. Steeves, director of our legal division. Mr. Chairman, on April 3, when you first invited me to appear, we were getting ready for our 114th annual meeting. We appreciate your postponing our appearance not only as a matter of convenience, but because our committees and house of delegates extensively discussed the problems about which we are testifying. In his message to the Congress on older Americans last January, President Johnson noted: Medicare does not cover prescription drugs for a patient outside the hospital. The President then said: We recognize that many practical difficulties remain unresolved concerning the cost and quality of such drugs. This matter deserves our prompt attention. I am directing the Secretary of Health, Education, and Welfare to undertake immediately a comprehensive study of the problems of including the cost of prescription drugs under Medicare. On May 31, 1967, Secretary Gardner, in announcing the establishment of the special task force on prescription drugs, stated: Prescription drugs are an essential element of modern medical care. In the last 25 years we have witnessed greater advances in the use of drugs than in the whole previous history of medicine. Today, drugs and biologicals make possible the prevention and successful treatment of illnesses that were formerly serious and frequently fatal. The major functions of the profession of pharmacy are involved with the distribution of prescription drugs to patients. We have been following the hearings of this subcommittee because the economics of the distribution system that provide our practitioners with their drug inventory are directly related to the economics of the final charge patients must pay pharmacists for their prescriptions. Some people argue that individual and governmental expenditures for drugs and pharmaceutical services are too high. Others argue that the expenditures are relatively insignificant compared with the value received. We didn't come here today to play the "numbers game" or discuss percentages. We did come here to describe a critical problem facing our profession-a problem in which every American has a stake. We need not describe to the Congress the critical health manpower situation which now exists in our country. Of all the health professions, pharmacy is in the best position to meet the expanding demand for service. The bulwark of our strength is the private practicing pharmacist who has located himself to conveniently serve the noninstitutionalized patient. Yet it is this very same pharmacist who is now being threatened with extinction because of gross inequities in the distribution system. When a patient learns from the public news media that congressional hearings have revealed that the Government paid only 50 cents for the prescription drug for which he has just paid his pharmacist $20, all "hell" breaks loose, to put it mildly. Patients who turn to the pharmacist for an explanation won't be any happier when the pharmacist explains that he had to pay $17 for his inventory. Many patients don't even give the pharmacist this opportunity. They write their Congressmen demanding relief. We are not suggesting that the public be kept in the dark or that congressional inquiry be terminated. Nor do we suggest that the overall profit structure of the pharmaceutical industry is unreasonable. No one can deny the great contributions that our pharmaceutical industry has made to health care in the United States and the world. We do not think that the industry is guilty of amassing tremendous profits at the expense of the sick. But some of the current marketing practices which |