Clee Reverse Side) MONTHLY PRESCRIPTION RECORD Record the totals from the daily prescription record each day under the appropriate date. Complete the record at the end of each month and make the simple calculations which will reveal your "Average R charge" and "Average professional fee." The difference between your total B charge and total Ṛ cost for the month is the actual total number of dollars you realized for professional services rendered. Was this total number of dollars realized for professional services adequate to cover your cost for providing the services and the yield you expected as a return on educational and capital investment? These questions can be answered accurately only if you have an operating statement for the prescription department. Most pharmacists do not have such information, and must depend on the interpretations they can extract from the operating statement of the total pharmacy. The fact that a complete analysis may not be immediately feasible should not dissuade the practitioner from learning the basic facts about his practice-especially when the effort required is so minimal and painless. Why not start today? Forms are available from your national professional society. COPTRIENTED BY AMERICAN PHARMACEUTICAL ASSOCIATION Sample Completed Forms 2919 $2.00 to $2.99 702 24.1 11499.39 $1.00 to $3.99 666 22.8 12.7 5926.08 : Average Ex Charge 3.94 203 191 CAPTRIANTED BY AMERICAN PHARMACEUTICAL ARROCIATION, WASHINGTON, B.C., 1998 BIOGRAPHICAL SKETCH-WILLIAM S. APPLE, PH. D., EXECUTIVE DIRECTOR, AMERICAN PHARMACEUTICAL ASSOCIATION William S. Apple, Ph. D., Executive Director of the American Pharmaceutical Association, grew up, was educated in and has spent his working life in the profession of pharmacy. Dr. Apple is serving his third term as the elected administrative official of the national professional society, having been elected to the APhA post first in 1959, and re-elected for another three-year term as Executive Director in 1962 and 1965. He served in the APhA Headquarters as Assistant Secretary from 1958 to 1959. Born in Spokane, Washington, in 1918, Dr. Apple was reader in Duluth, Minnesota. He attended Wayne State University and then transferred to the University of Wisconsin. It was at Wisconsin that he received his Bachelor of Science degree in Pharmacy, his Masters degree in Business Administration and his Doctor of Philosophy degree. He continues his pharmacy registration in Wisconsin, where he was both a practitioner and consultant. He served as Head of the Department of Pharmacy Administration at the University of Wisconsin prior to assuming his APhA duties in Washington. Active in Wisconsin pharmacy activities, Dr. Apple served as Vice-President, President and Chairman of the Board of Directors of the Wisconsin Pharmaceutical Association. Dr. Apple entered the U.S. Army in 1941 as a Private and rose to the rank of Lieutenant Colonel. He served on the staff of Fleet Admiral Nimitz in the Pacific Theater. Dr. Apple is President of the American Council on Pharmaceutical Education. He is a Charter Board Member of Community Health, Inc. He is the Representative of United States pharmacists on the Council of the International Pharmaceutical Federation and a member of the Board of Directors of the American Association for World Health Inc. and the U.S. Committee for the World Health Organization. He represents the National Health Council on the American Association of Junior Colleges-NHC Committee on Health Technology Education. Until recently, he served several terms as Vice-President and a member of the Executive Committee of the NHC. He is Chairman of the Pharmacy Committee on Public Health Service Medicare Traineeship Program. His professional and honorary society memberships include Phi Lambda Upsilon, Rho Chi and Phi Kappa Phi. His awards include: American Druggist Man of the Year (1960), J. Keon Lascoff Memorial Award (1961), Rho Pi Phi Man of the Year (1961), Colegio de Quimico Farmaceuticos de Chili (1961), Wayne State University Distinguished Service Award (1962) and the Hugo H. Schaefer Medal (1966). The University of Wisconsin recognized his "eminent professional services" in 1965 with its Citation, and the University of Long Island awarded him a Doctor of Science (Honorary) degree in 1966. He has been named recipient of the 1957 Remington Honor Medal, presentation of which is scheduled for November 29, 1967, in New York. His home is in Falls Church, Virginia, where he resides with his wife, the former Lucille Josephs. Mrs. Apple, like her husband, comes from a pharmacy family. Mr. DINGELL. Dr. Apple, you have presented a very fine statement to the committee and to the Chair, and I am sure the committee is very grateful to you for this. The Chair will recognize Mr. Potvin, counsel of the committee, for insertion of a number of items into the record of the hearing. Mr. POTVIN. Mr. Chairman, I would like to offer for the record at this point, if I may, the following, as a function of the Task Force on Prescription Drugs referred to by the witness. First, a statement by John W. Gardner, Secretary of HEW, on the task force, and another statement, also by Mr. Gardner, on the areas of study to be covered by the task force, and enumeration of the members of the task force. Mr. DINGELL. Without objection, it is so ordered. (The document referred to follows:) STATEMENT BY JOHN W. GARDNER, SECRETARY OF HEALTH, EDUCATION, Two basic aspects of health care are the quality of the care and how much it costs. The Federal Government is concerned with both. We want to achieve the highest quality health care possible for all Americans, and we want to achieve the lowest possible cost consistent with high quality. Prescription drugs are an essential element of modern medical care. In the last twenty-five 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. Yet for many older Americans the cost of needed drugs prescribed by a physician is a heavy burden, representing 15 to 20 percent of their medical care costs. Many older Americans find themselves with limited financial resources at the very time that age brings an increasing incidence of chronic disease and greater needs for medical care, including prescription drugs. Since the Medicare program began last July, it has been of substantial help to Americans 65 and over through its coverage of bills for hospital care and physicians' services. Almost 3.5 million older Americans have received health services totaling nearly $2 billion under the Medicare program since July 1 of last year. But, as President Johnson noted in his Message to Congress on Older Americans last January, "Medicare does not cover prescription drugs for a patient outside the hospital." "We recognize," the President said, "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." Since that time, the Department has had underway a number of staff studies of the problem. I now wish to announce that I have established a special Task Force on Prescription Drugs. I have appointed to the Task Force the Deputy Under Secretary, four Assistant Secretaries, the Commission of Social Security, the Commissioner of Food and Drugs, the Acting Commissioner of Welfare, and the Surgeon General of the Public Health Service. I have asked the Assistant Secretary for Health and Scientific Affairs, Dr. Philip R. Lee, to serve as chairman. The Task Force has no prior commitment to recommend for or against the inclusion of prescription drugs in the Medicare program. Its directive is first to investigate and then to make whatever recommendations it considers appropriate. The Task Force will examine a wide range of factors which are involved in the use of prescription drugs and will offer its recommendations within six months. The problems are numerous and complex. Some answers may be found speedily; others may take many months, possibly even years, of work, including laboratory research and clinical trials. In all of its work, I have asked the Task Force to measure the value of possible solutions not only in terms of dollars to be saved, but in the quality of health care to be delivered. TASK FORCE ON PRESCRIPTION DRUGS AREAS OF STUDY The Task Force will examine a number of factors which are closely involved with the use of prescription drugs and with present and proposed methods of purchasing them. Many of these factors concern not only drug costs-and who pays them-but also the quality of medical care. Among the major areas for Task Force study are: 1. Present patterns of drug prescription by physicians. 2. Present patterns of prescription drug use and expenses by patients. 3. Present resources used to meet drug costs (including personal resources, aid from relatives, insurance government assistance). 4. Present drug cost coverage programs (including Federal, State, commercial insurance, union, and foreign programs). 5. Distribution systems (including independent pharmacies, central pharmacies, mail-order distribution, physician dispensing, and hospital dispensing). 6. Reimbursement factors (including determination of costs; co-insurance; deductibles; and limitations on dollar costs, drug quantities, and drug types). 7. Accounting methods (including nomenclature, coding, data processing). 8. Pharmacological aspects (including generic equivalents vs. clinical equivalents). 9. Clinical aspects (including formulary systems). 10. Legal and fiscal aspects. 11. Impact of proposed methods of purchasing prescription drugs on costs and quality of patient care, on medical profession, on pharmacy profession, on drug industry, on government. MEMBERS Philip R. Lee, M.D.-Assistant Secretary for Health and Scientific Affairs (Chairman) Dean W. Coston-Deputy Under Secretary Lisle C. Carter, Jr.-Assistant Secretary for Individual and Family Services Robert M. Ball-Commissioner, Social Security Administration James L. Goddard, M.D.-Commissioner, Food and Drug Administration Mr. POTVIN. Further, Mr. Chairman, minority counsel has, I believe correctly, pointed out that it was the intention of the witness that the matters appended at the rear of his statement were for the record. Is that correct, Dr. Apple? Dr. APPLE. Right. Mr. DINGELL. Without objection, that will be inserted in the record at the appropriate point. The Chair will recognize Mr. Smith for whatever questions he may want to ask. Mr. SMITH. What professional competence is necessary to dispense these prescriptions that are not prescribed generically? Dr. APPLE. Mr. Smith, I would have to answer that the same competence is required on the part of the pharmacist, regardless of the nomenclature system used by the physician in prescribing the drug. The functions that the pharmacist must perform, the professional care, the series of activities-we have a document which enumerates all these that I would be glad to submit. But basically, the pharmacist must go through and perform these functions regardless of how he receives the prescription in terms of the nomenclature by which the doctor has ordered the drug. Now, when the doctor prescribes it generically, the pharmacist has an additional professional function of deciding which product he is going to use, the latitude having been given to the pharmacist by the physician in that case. Mr. SMITH. Is there not more than one price level on the nongenerically prescribed drug? Dr. APPLE. Yes, there is. But we strongly urge our practitioners, first, in making that decision, to decide on the quality of the product, and then in keeping with the price considerations. For example, we may find a spectrum of prices running from, let us sav, $1 to $10. He may see clustered, at $2 or $3, products whose manufacturers he has dealt with for years, and has some good solid understanding of what their plant, their quality control activity is, and has a sense of well-being about using that drug. It also may be the one he has in inventory; therefore, he is going to feel better about prescribing it. I think there is a practical problem here, and that is that the pharmacist, if he is going to carry every generic drug at every price level in inventory, is going to have a further complicating expense to the operation which is going to increase the cost to the public, too. So it is not the customary practice of the pharmacist to have more than one or two manufacturers by generic name in inventory at several cost levels. But even more important than all this from our viewpoint is that these are considerations which are subject to interprofessional discussions. In other words, we feel that the pharmacist and the physician should get together, and the pharmicist point out: "Now, you are going to prescribe this drug generically; I will stock this manufacturer's generic so-and-so drug so you will know whose I have, and we will have a good understanding of what is going on." Mr. SMITH. What is the real difference about which manufacturer manufactures this drug? Dr. APPLE. Well, over in the other body, the subcommittee has been going at that extensively. It is a very difficult question to answer in some respects; that is, it has been subject to a great deal of debate. On the other hand, it is a very simple question to answer, for the individual practitioner. For example, there is a certain product available at $18 a hundred, roughly, $17.90 a hundred. It is made by one of the largest manufacturers in this country. Under a cross-licensing agreement, another firm makes the same product and has it available at $2.25 a hundred. Now, if the pharmacist had the discretion of dispensing, it would be in the public interest that he dispense the $2.25 one, because I do not think there is any serious question of quality that can be raised in the individual professional practitioner's mind when he compares the two companies and their quality-control programs. Mr. SMITH. Then explain further why this one company is able to market this drug which the competitor is selling at $17.90 at the competitive price of $2.25 if the competitor is carrying through their professional competence? Dr. APPLE. That is a question that the Senate subcommittee had invited company presidents to testify about the industry to explain. I think this is a result of certain practices of the industry, rather than our profession. Mr. SMITH. I am getting at it from the other end. Why does the pharmacist in the one case in some cases, apparently Dr. APPLE. Stock the $17.90 one? Mr. SMITH. Yes. Dr. APPLE. Because he has no choice unless we change our laws to dispense the exact drug prescribed. When it is described by a brand name and that brand name is the $17.90 price, the pharmacist has a definite order from the physician that he must follow. Mr. SMITH. Now, to come back to my first question: If he had no choice and he had to dispense the drug prescribed by the doctor, what professional competence was involved in dispensing the drug? Dr. APPLE. Well, I think you are talking about the functions of the pharmacist which, in the public mind, all too often are just a matter of receiving a piece of paper and counting out 12 tablets or pouring out so many ounces of liquid. This is the general conception, you might say unfortunately, too many people have of the dispensing function. Mr. SMITH. If they prescribe 90 percent of these prescriptions by brand name is that correct? Dr. APPLE. Yes, sir. Mr. SMITH. It sounds like only about 10 percent of the time, he is really using his scientific background. |