THIRD PARTY PREPAID PRESCRIPTION

PROGRAMS

HEARINGS

BEFORE THE

SUBCOMMITTEE ON

ENVIRONMENTAL PROBLEMS AFFECTING
SMALL BUSINESS

OF THE

SELECT COMMITTEE ON SMALL BUSINESS HOUSE OF REPRESENTATIVES

NINETY-SECOND CONGRESS

FIRST SESSION

PURSUANT TO

A

H. Res. 5 and 19

RESOLUTIONS CREATING A SELECT COMMITTEE
TO CONDUCT STUDIES AND INVESTIGATIONS
OF THE PROBLEMS OF SMALL BUSINESS

65-414

WASHINGTON, D.C., JULY 7, 8, AND 9, 1971

Printed for the use of the

Select Committee on Small Business

U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON: 1971

SUBCOMMITTEE ON ENVIRONMENTAL PROBLEMS AFFECTING SMALL BUSINESS

WILLIAM L. HUNGATE, Missouri, Chairman

DONALD B. ROE, Subcommittee Counsel
JOHN M. FINN, Minority Counsel

Testimony of

Brill, Albert R., Merchant Prescription Pharmacy, North Hollywood,
Calif

59

Prepared statement..

Cain, Roger W., executive director, Illinois Pharmaceutical Associa-
tion..

Christy, Milton, Christy Apothecary Shop, Pekin, Ill
Crouch, Ernest, Pharmacist-State Legislator, McMinnville, Tenn..
Eden, James, pharmacist, Akron, Ohio.

Engel, Ralph, director, National Pharmacy Insurance Council_

Fleming, David W., counsel to Southern California Pharmaceutical
Association.

119

114

7

305

305

309

59

Garrett, E. Boyd, druggist, Nashville, Tenn..

7

Gosselin, Raymond A., president, R. A. Gosselin & Co., Dedham,
Mass...

151

Prepared statement_

154

Grossman, B. Barry, chief, Evaluation Section, Antitrust Division,
U.S. Department of Justice..

227

Khazarian, Sarkis, National Association for the Protection of the
Pharmaceutical Profession_-_.

212

Kintner, Earl W., Washington counsel, National Association of Retail
Druggists..

7

Mehrle, Kenneth G., National Association of Retail Druggists.
Oppenheim, S. Chesterfield, special counsel, National Pharmacy
Insurance Council__

41

305

Prepared statement..

306

Ott, David E., Shaw-Ott Pharmacy, Mansfield, Ohio..

Perhach, Michael, past president, National Association of Retail
Druggists, Binghamton, N. Y...........

Schwartz, Howard, Suburban Health Services, North Syracuse, N. Y..
Shark, James, president, Saint Louis Pharmacists Association
Simonetti, John, vice-president, National Association for the Protec-
tion of the Pharmaceutical Profession_.

Simmons, Willard B., executive secretary, National Association of
Retail Druggists...

206

136

136

41

212

7

Stevens, Waldo A., senior vice president, Blue Cross Association.......
Prepared statement.

285

285

Stewart, Lawrence L., immediate past president, Metropolitan Detroit
Pharmaceutical Association___

126

Thomas, William S., executive vice president, Metropolitan Life
Insurance Co. - - -

336

Prepared statement_

337

Weinstein, Burton M., general counsel, National Association for the
Protection of the Pharmaceutical Profession__.

212

Prepared statement__

212

Wilson, Hon. Bruce B., Deputy Assistant Attorney General, U.S.
Department of Justice, Antitrust Division__

Prepared statement_

227 228

Wilson, M. William, chairman, Council of the Missouri Pharmaceuti-
cal Association_.

41

Exhibits...

47, 233

Woods, William E., associate general counsel, National Association
of Retail Druggists.

7, 126

Woodworth, Fred L., Assistant Director, Office of Policy Planning
and Evaluation, Federal Trade Commission....

299

Prepared statement___

301

Additional information:

Aetna Life and Casualty agreement

Altmiller, William A. El Tejon Drug Co., Inc., Bakersfield, Calif.,
letter to M. N. Kafenhaus, Pharmaceutical Claims Consultants,
North Hollywood, Calif., July 24, 1970-
Amalgamated Meatcutters, Local No. 576, Suspensions and Cancella-
tion List, Edition No. 3, 1971___

Antitrust guidelines for third party prepaid prescription programs
Avco MediMET prescription drug program participating pharmacies__
Balchunas, S. G., R. Ph., Mahnomen, Minn., excerpt from letter to
Representative William L. Hungate..

Breen, D. L., R. Ph., Benson, Minn., excerpt from letter to Repre-
sentative William L. Hungate..

Bizzari, A., Liberty Mutual, Los Angeles, Calif., letter to Sherman
Oaks Plaza Pharmacy, Sherman Oaks, Calif., May 11, 1971..
Blue Cross claim form...

Bregman, A. Arnold, Valley Rx Pharmacy, San Gabriel, Calif., letter,
March 10, 1970-

Capsule Communicator, 1971__

Carter, Proctor N., Department of Public Health and Welfare,
Jefferson City, Mo., letter to all participants in Missouri drug vendor
program, July 9, 1970...

Page

105

76

269

35

100

3

3

67

268

72

98

265

Clark, James G., Abrams & Clark Pharmacy, Long Beach, Calif.,
letter to Metropolitan Life, April 30, 1971.

67

Clark, Ron, Akron Beacon Journal, article, "10 Prescriptions for Same
Drug-10 Prices," October 4, 1970.

Eden, James S., Independent Drug Co., Tallmadge, Ohio, letter to
Hon. William L. Hungate, July 14, 1971...

Engel, Ralph, National Pharmacy Insurance Council, statement for
record..

Exhibit A-Antritrust implications of the Virginia Blue Cross
decision

Exhibit B.

Exhibit C-letter from Donald R. Gronewold, R. Ph., Illinois
Pharmaceutical Association, to Leonard J. McNamara, Metro
Life, New York, June 15, 1971_

Exhibt D-Statement from Congressional Record, February 11,
1971, by Hon. George P. Miller of California, in the House of
Representatives, February 10, 1971, including letter to Cali-
fornia officials from Lester E. Johnson, M.D., Alameda, Calif__
Engen, Larry, R. Ph., Karlstad, Minn., excerpt from letter to Repre-
sentative William L. Hungate...

Folson, G. L., R. Ph., Parker Prairie, Minn., excerpt from letter to
Representative William L. Hungate..

Gosselin, R. A. & Co., Inc., booklet, "Variability Analysis-Pharmacy
Charges for Proscritpion Drugs Under Third Party Programs".
Group Hospital Service, Inc., prepaid prescription agreement
Hanson, Warren, R. Ph., Elbow Lake, Minn. Excerpt from letter to
Representative William L. Hungate...

Hiskey, Frank J., Hiskey's Prescription Pharmacy, Long Beach,
Calif., letter to Pharmaceutical Claims Consultants, North Holly-
wood, Calif., February 21, 1971.

Homer, Frederick R., R. Ph., Utah Pharmaceutical Association, Salt
Lake City, Utah, letter to Hon. William L. Hungate, July 9, 1971.
Hunt, Judge Robert D., opinion...-

292

A9

309

318

326

329

330

2

3

163

92

3

70

A13

117

Johnson, W. A., R. Ph., Crookston, Minn., excerpt from letter to
Representative William L. Hungate...

3

K. K., Pharmaceutical Claims Consultants, letter to Reed Prescrip-
tion Pharmacy, San Fernando, Calif

Kafenhaus, Michael N., Pharmaceutical Claims Consultants, North
Hollywood, Calif., letter to:

El Tejon Drug Co., Kern County, Calif

Reed Prescription Pharmacy, San Fernando, Calif., October 22,
1969-

Reed Prescription Pharmacy, San Fernando, Calif., November 17,

1969_

Valley Rx Pharmacy, San Gabriel, Calif., March 8, 1970.__