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This has been brought about by the proposed health care center in Montgomery, Ala., which will, among other things, dispense drugs to those persons who have been declared below the poverty level of earnings.

I might point out, Mr. Chairman, that Montgomery is not in my district. But I do have two counties that border Montgomery County. and these counties would be affected because many people who live in my counties, in my district, trade across the line in the Montgomery

area.

I am also told that surveys are now underway in my State and other communities and other counties to determine the feasibility of such dispensaries throughout the State. It is my understanding that in all probability the Montgomery program will serve as a pattern for the other programs which are now being planned.

Mr. Chairman and gentlemen of the committee, I want to make it explicitly clear that I am not opposed to helping poor people maintain their health. I realize that there are many people in Alabama. and every other State in the Nation, for that matter, who cannot afford the drugs that are prescribed by physicians. Some program help these people is certainly worthwhile. I could and would support a program that utilizes the privately owned and operated drugstores. which has the support of the local community involved.

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The druggists of Montgomery, Ala., have made an offer to the officials of the OEO which I feel is a very reasonable offer. These drug gists have offered to fill any prescription presented by a person eligible to participate in the program for only $1.75 above the wholesale cos of the drug prescribed. This $1.75 fee would include, Mr. Chairman. the delivery of that prescription anywhere within the city limits of Montgomery, Ala. OEO, however, seems to feel that by setting up its these prescriptions for only about $1.15 above cost. And there might government and government-operated dispensary, it can distribute be also some savings in the price which the Government has to pay for its drugs over which the local pharmacists could buy them from the

drug houses in my area.

On the surface, it would appear that by setting up its own drugstore. the Government and the OEO could save some funds over the vendor plan submitted by the pharmacists. But I have found in my very short service here in the Congress that very few Government agencies Iseem to be able to operate and conduct business in the equitable and like to list the number of reasons that I feel that the poverty program, economic manner as is being done by private industry. And I would the OEO, and the Government should get into the drugstore busi ness or any other business, for that matter, which is in competition

with privately owned businesses.

could

First-a program such as the one proposed in Montgomery be the forerunner of other similar programs, and if expanded to other judgment it could seriously affect the future of privately owned drug persons who qualify for any and all Federal health programs, in my businesses in my State and throughout this country.

In the second place, it seems to me that such a program eliminates the freedom of choice that we have talked about for so long in which a person has the choosing-he maintains this inherent right to choose

where he purchases his drugs. This freedom of choice is still left for those persons who qualify for the medicare and the medicaid programs, and these programs allow a person to choose his own doctor as well as his own hospital.

In the third place, Mr. Chairman, I have just recently completed in my State a series of meetings with officials of the Small Business Administration, in which we have gone into each and every county, bringing the small business program directly to the business people throughout my district. These men who attended these meetings came from every segment of the business community, including druggists. And I heard many of them complain that while the Government is making a pretense at helping the small businessman on the one hand, it is choking him on the other hand. And I have here a letter from a druggist who indicates that he would like to apply for an SBA loan, but because of this survey that is now going on for these health centers in his area, he is not sure what he is going to do. This is a young man that has worked his way through college, 5 years in a pharmacy school, and now he sees his dream of building up his own drugstore business going out of the window.

Finally, Mr. Chairman, our country is able to operate such programs as the poverty program and the OEO only because of the prosperity that we have achieved in recent years. This prosperity I believe has come about because of the well-functioning free enterprise system we have in America.

If we now put the Government into business and into competition with the private businessman, it seems to me that we are going to weaken this system which has produced a tremendous amount of revenue for use by the Federal Government.

Mr. Chairman, these are the people that pay the taxes that run this country. And we have seen what increased Government intervention into business has done in England. This once proud nation is now struggling to keep its head above the water.

Finally, and in conclusion, Mr. Chairman, I would like to point out that the Federal Government makes an allowance to small businessmen in many ways. One of these is the differential it grants Government agencies which buy materials from private industry. A certain percentage of the total business in many areas is set aside, as you know, exclusively for the small businessmen. In our "Buy American" law, a Government agency can purchase goods from a small businessman, even though his price in some cases may be as high as 12 percent above that of a foreign-based company. It seems to me if we are going to put the Government into competition with the small druggist, some similar differential could be arranged. I would surely hope that this committee in its wisdom might take the proposed OEO health centers, and the effect that they will have on our private drug firms into consideration and perhaps suggest some similar advantage to druggists in competing with the Government.

Mr. Chairman, with your permission, I would like to submit this statement along with two letters from my constituents, if I might, for the record.

Mr. SMITH. That will be done.

(The letters for inclusion in the record follow :)

Representative BILL NICHOLS,
House of Representatives,
Washington, D.C.

MARCH 9, 1968.

DEAR MR. NICHOLS: Recently I noticed in the news your expression of concern over the fact that Alabamians are not taking full advantage of the funds offered through the Small Business Administration. I agree that this is unfor tunate, but as a young pharmacist and someday a potential S.B.A. applicant I cannot see how I will ever have the opportunity to take advantage of this program myself. As you know the federal government through the O.E.O. has proposed a program in Montgomery county which would establish a central dispensary in that county and would be in direct competition with the retail drug stores of that area. Realizing that this will cut deeply into the business of many of these stores, it is probable that some of the well established business men will not be able to absorb such losses, and if these men cannot stay in business how in the world is someone like myself ever expected to get started! You can see that this projects a dismal picture for someone who struggled through five years of education to reach a goal in life and now have to watch not only the past achievements, but the hopes of the future destroyed by one single socialistic piece of legislature. It is not only discouraging but disgusting to see the federal government in its war on poverty destroy free enterprise, individual initiative, and the American way of life itself. Please don't misunder stand, I am for the poor people because I know what it is to be poor, like a lot of other folks around Cragford, Ala. (Clay Co.). But thanks to parents who believe in hard work and have a little pride, I am somewhat of a success today and in my opinion if the government wants to give many of these so called poor people medicine then the best they could give them would be a good dose of dignity. But unfortunately that cannot be legislated into a person. It has

to be earned.

It is my future and the future of many pharmacists in Alabama that rests in the hands of you and your fellow Congressmen. I hope that you will join us in this fight and refuse to allocate the funds for the program in Montgomery

County.

Sincerely,

Hon. BILL NICHOLS,
Longworth House Building,
Washington, D.C.

CHARLES R. PERRY, Jr., R. Ph..
Brown Drug Co., Selma, Ala.

MARCH 16, 1968.

DEAR SIR: Through the various channels of communication, the Washington Office of Economic Opportunity has recently informed the pharmacists of Montgomery County, Alabama, that their proposed professional fee for compounding prescriptions under the OEO Plan greatly exceeded estimates projected by the Washington OEO for a Government-owned, Government-controlled dispensary in the Montgomery area. It is the contention, therefore, of the Washington OEO to ask Congress for approval to proceed with its present plans to establish a to the citizens of Montgomery County who qualify for this program. Government-owned, Government-controlled dispensary to dispense prescriptions In the event that this Government-owned, Government-controlled dispensary is established, I understand that all other assistance programs, including Medicare, Medicaid, Mental Health, Rehabilitation, Planned Parenthood. Military Benefits, and others will be channeled through this dispensary and others to be

established throughout the state.

I can see only one clearly defined path along which our legislators are leading this country, in particular the small business man of this country. As I see it. our hard earned tax dollars are being spent to help put us out of business. I urge you to consider the position of the pharmacist of our country in this matter. We are caught in the midst of a price struggle to advance the health care of our nation. Billions of dollars are now being spent to implement the and hospital costs have risen sharply. The Pharmacist's fees have remained the same or lower throughout all of this. Now we are told that our professional Nation's government health program. In the face of Medicare, Physician's fees

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services are too expensive and we must be by-passed-slowly legislated out of practice, out of business-in the interest of better health care for our nation and a sounder economy for our country.

May I remind you that no other member of the health team possesses the educational back-ground to perform the various functions of the Community Pharmacist. Today's pharmacist must complete five years of highly specialized college education plus one year of internship to practice his profession.

The Community Pharmacist stocks a complete compliment of Medicinal Agents to meet every need of his patients.

The quality of medical care for the citizens of our great country is second to no other nation of the world. We have achieved this high standard of health service because of our "Free Enterprise System". The logical course for the OEO to follow is along these lines.

It is imperative that you, our elected representatives, decide in which direction you choose to lead this great nation of ours. Throughout our history, the Free Enterprise System has produced progress in every phase of economic expansion. It has been the motivating force behind the men and women of the Health Professions exhibiting imagination, initiative, and perseverance.

If you take this motivating force away from us, you are destroying the future progress of the Community Pharmacist and endangering his very existence as a self-employed health professional.

I ask you not to think just for today, but to consider the future of the Pharmaceutical Profession and the Community Pharmacist when you decide on the methods by whick OEO Plans will be implemented.

Sincerely yours,

RAYMOND V. WOJTYNA,

Registered Pharmacist, Guilford Drug Co., Hartford, Ala.

Mr. SMITH. I assume from what you said that all of the druggists join in this offer; is that correct?

Mr. NICHOLS. That is correct to my knowledge, Mr. Chairman. I have received numerous telegrams. I have received numerous letters. I have received numerous phone calls from alarmed and concerned druggists, because they see this as just choking them off and putting them out of business.

Mr. SMITH. I wonder if the druggists in Montgomery use a flat charge per prescription method of determining the sales price of the prescriptions, or do they use a percentage basis?

Mr. NICHOLS. You mean at the present time, Mr. Chairman?

Mr. SMITH. Yes.

Mr. NICHOLS. I am sorry, sir, I could not answer that. But it does seem to me that $1.75 above the cost of the prescription is certainly a nominal fee, when you take into consideration that these druggists have offered to deliver any where within the city limits.

Mr. SMITH. Some places they use a flat markup, and some places. they use a percentage add on or another method of arriving at a retail price.

Mr. NICHOLS. Let me say, Mr. Chairman, of my druggists, that they want to cooperate, and they want to help, and they are not opposed to the dispensing of medicines and drugs to people who are not able to buy them. Certainly we could not be opposed to that.

Mr. SMITH. Thank you very much.

Mr. NICHOLS. I appreciate very much the opportunity to appear before the committee, Mr. Chairman.

Mr. SMITH. The next witness is the Honorable William Donald Schaefer, president of the Baltimore City Council, Baltimore, Md.

TESTIMONY OF HON. WILLIAM DONALD SCHAEFER, PRESIDENT,
BALTIMORE CITY COUNCIL, BALTIMORE, MD.

Mr. SCHAEFER. Thank you, Mr. Chairman.

Mr. Chairman, and members of the Select Committee on Small Busi ness-I appear here today on behalf of the small businessman of Baltimore City.

Some years ago, when a Baltimore City delegation concerned with the plight of the small businessman came to Washington, we met with the Honorable Wright Patman, who said to us (and I quote), "I am not interested in your problems. I know what they are. What we need

are answers."

In Baltimore, the mayor's advisory committee on small business heeded this message and began to look for answers to the problems. The mayor's committee has, over the past 4 or 5 years, had an oppor tunity to work with the Select Committee on Small Business and has made recommendations which I believe have been incorporated into law. We have always attempted to bring constructive ideas and suggestions to the attention of the committee members.

As the Congressman said, "You can bring all the problems over, but if you cannot give us any of the answers to them, you sort of waste

your time and our time."

We have followed the doctrine of self-help whenever possible. Today, however, I present to you a problem for which you may have

an answer.

We are progressing with our work for small business in Baltimore, but now we find that some branches of the Federal Government appear to be working at cross-purposes. On the one hand we have a Select Committee on Small Business in the House of Representatives whose work it is to aid the small businessman in his attempts to remain in business. And on the other hand, we are confronted by the Office of Economic Opportunity which seems to be stifling our efforts. A proposal has been made to have a comprehensive health center in Baltimore City. I favor this project. However, when the matter was presented to the Baltimore City Council, the pharmacists filed objections to the establishment of a full-service pharmacy for the result of this opposition, it was suggested that the full-service phar center. They believed that they would be deprived of business. As a be deleted from the project. This action apparently caused great controversy in the Office of Economic Opportunity and Baltimore City was told in so many words that we would take the entire project "as

macy

is" or lose it.

are to be encouraged. This is part of the Federal legislation. There It has been my understanding that local resources and local business have been numerous sessions between the pharmacists, the local community action agency, and the Office of Economic Opportunity but to

date the situation has not been resolved.

Now what might be the answer to this problem. The pharmacists community. The Office of Economic Opportunity says that the phar say that they can provide adequate pharmaceutical services to the macy must be in the health center. It has been suggested by the munity and after 6 months, if the service is not adequate, this part pharmacists that they provide pharmaceutical services to the com

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