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know whether you wish me to repeat what I have written or hear comments on it.

Senator KEFAUVER. I think what you have written is brief and it would be well for you to read it.

Dr. Barr. I simply say that I can agree wholeheartedly

Senator KEFAUVER. Just a moment, Dr. Barr. Mr. Chumbris had some matter he wanted to bring up.

Mr. CHUMBRIS. Yes, sir, Mr. Chairman.

I just want to comment, on page 2 you made a broad or what I determine to be a broad statement that the use of brand names instead of generic names for drugs greatly increases the cost to the consumer.

I wanted to point out, Mr. Chairman, that there is a very excellent editorial in Good Housekeeping magazine of this month in which the magazine requested its editors to look into the question of trade names versus generic names and determine, also, the difference in costs, and they came to the determination that the costs of trade names over generic names amounted to somewhere between 7 and 12 percent additional. Their inquiries of the doctors were to the point that the difference in the cost was such that many doctors would prescribe the generic name and the trade name, and the pharmacist in some of those instances would go ahead and prescribe the trade name or the generic name because of the 7- to 12-percent difference in price.

My point here was that we insert in the record, Mr. Chairman, this editorial of Good Housekeeping magazine, because it is contra to the broad statement that you have made here, Dr. Barr, that it would greatly increase the cost to the consumer.

I think, also, Mr. Chairman, that we ought to probably get more information on the difference, not just by one or two particular products, because this is a study of the whole business of ethical drugs throughout the country. We ought to get a probably more complete record as to the differences to the consumer as well as to the various institutions that handle drugs.

The editorial states that with the institutions the difference is not so important because many of the drug manufacturers give a 10-percent discount to institutions anyway on their trade name, which would offset the 7 to 12 percent.

Senator KEFAUVER. All right. Let the article you refer to be exhibit 40.

(Exhibit 40 may be found on p. 829.)

Senator KEFAUVER. We have considerable evidence in the record already as to the difference in prices. We will, as time goes on, show the tremendous savings effected by some States since this investigation started. They have started buying their drugs by generic name rather than by trade name. The statistical evidence will be submitted along that line.

Dr. Barr. Could I make one comment on that?
Senator KEFAUVER. Yes, indeed, Dr. Barr.

Dr. Barr. At the health insurance plan of Greater New York, we conducted a small study, a partial study, in some of our groups as to the differences in cost in trade names or brand names and generic names, and we found actually that there was in the aggregate not very much difference, but the reason was that in the drugs which we were studying many had no generic or official names. Thus physicians were using the brand names of necessity.

Therefore, it did not appear that there was much saving because so many of the drugs did not have generic names.

I think that one has to keep this factor in mind in interpretation of any such statistics as Good Housekeeping has now assembled ?

Senator KEFAUVER. Yes, I would think so. So the only comparison that could be made would be on nonpatented drugs. Of course, the patented drugs are not sold on the generic name basis, is that not correct?

Dr. BARR. That is right.
Senator KEFAUVER. As a general rule.

Well, you have discussed part of the generic matter here. Do you want to

Dr. BARR. No, I do not need to repeat this, I think.
Senator KEFAUVER. All right.

Dr. BARR. Except that I would like to emphasize what you have already said, Senator: That the work of the American Medical Association through the council of pharmacy and chemistry, and later through the council on drugs, has been meritorious, has been a noteworthy contribution, and one would hope that in the new legislation full use can be made of the mechanism they have established. That, I believe you stated as your intent.

Senator KEFAUVER. That is right.

Dr. BARR. Lastly, I have some comments on the necessity of assigning to the Secretary of Health, Education, and Welfare large responsibility for the education of physicians concerning the efficacy and toxicity of drugs.

It is in this area that the American Medical Association has performed one of its most useful functions. The textbook "New and Nonofficial Remedies" is a mine of very carefully prepared information published annually on the basis of monographs written by experts and published throughout the year as a column in the Journal of the American Medical Association. In its smaller book on "Necessary Drugs" and in other publications the American Medical Association has digested existing knowledge for use of the practitioner as rapidly as it becomes available.

In these publications all known toxic actions of drugs are fully exposed.

I feel that the American Medical Association in this work needs the active support and cooperation of Government. It is doubtful, however, whether Government should attempt to duplicate or parallel the information which, over the years, has been assembled, is being assembled, by the American Medical Association.

That leads me to my final comment which is that it is my hope that no provision of the proposed bill will tend to separateness of effort on the part of Government where existing efforts of the medical profession in one form or another have shown themselves to be effective.

Senator KEFAUVER. I want to say that I think you are right about that. As we discussed the matter of generic names, certainly the cooperative work of the AMA and the U.S. Pharmacopoeia should be used to the greatest extent possible. So I agree with you on that.

That is a very fine statement you have given us, Dr. Barr. Your advice and counsel are very valuable to this committee, to the Congress, and to the public.

a

Dr. BARR. Thank you for the opportunity, sir.
Senator KEFAUVER. Perhaps counsel has some questions to ask.
Mr. Flurry?
Mr. FlURRY. I have no questions.
Senator KEFAUVER. Mr. Kittrie?
Mr. KITTRIE. No, thank you, Mr. Chairman.
Senator KEFAUVER. Mr. Wallace?
Mr. WALLACE. I may ask one question on behalf of Senator Hruska.

I notice on page 5 of your statement you state that the granting of patents for new drugs should obviously depend upon demonstration by the applicant that modification of molecular formula or combinations of two or more drugs can offer benefits significantly greater than preparations now available.

I assume you are referring to that part of the bill which requires the denial of a patent if the Commissioner determines that the therapeutic effect of the drug is not significantly greater than the drug so modified. Yesterday Dr. Goodman testified, and he pointed out some of the real problems that he thought existed with this part of the legislation in that he did not see how the Commissioner could determine, or a body of experts could determine, what is a “significantly greater therapeutic effect." Is it 5 percent, 10 percent, 20 percent?

Also, he pointed out that there are many other matters which the Commissioner or the group of experts can take into consideration such as odor, taste, esthetic appearance, and so forth. On the matter of absorption, it can be tested at the time for absorption and so forth.

Would you like to comment on that critical analysis of Dr. Goodman's, Doctor? What do you think of his remarks in that regard?

Dr. BARR. I think that the matter is very complicated, and that the decision is difficult and involves many aspects. I think, if I may summarize my attitude, it is that the burden of proof of effectiveness or greater effectiveness of superiority should be upon the applicant.

It is not that the Secretary should decide arbitrarily whether it is or is not effective or more effective but that the burden of proof should be on the applicant.

Mr. WALLACE. As the bill reads, it says: The Secretary of Health, Education, and Welfare has determined that the therapeutic effect of such modification is significantly greater than that of the drug so modified or that the therapeutic effect of such drugs when taken in combination is significantly greater than the therapeutic effect of those drugs when taken separately.

In other words, he has to make that determination.

Perhaps there should be a change in wording of the bill to include your thinking.

Dr. BARR. If it is intended that the Secretary of Health, Education, and Welfare is to make this determination from his own individual experience, I think the legislation would be harmful.

But if he is to decide on the basis of submitted evidence about it, I think it is quite appropriate.

Senator KEFAUVER. I think in fairness to Dr. Barr, two things should be pointed out:

First, the bill provides that the applicant shall furnish to the Secretary such clinical data and other information as the Secretary may require for his determination, and so forth, which does place å burden

Dr. BARR. That is right.

Senator KEFAUVER. The second thing is that in general these determinations are now being made at the Patent Office by nonphysicians, and this would change that situation by requiring that a determination be made by the Secretary of Health, Education, and Welfare, who, of course, would act through the Food and Drug Administration and its physicians.

The certification as to these matters would be by HEW to the Patent Office rather than having the whole determination made by the Patent Commissioner. The HEW would inject medical considerations into the determination.

Mr. WALLACE. Doctor, do we not get back to the same problem that you have raised before about how we determine whether or not a drug is significantly greater in its therapeutic effect. I think you stated that drugs must have widespread use and must be prescribed by physicians on a large scale before you can really determine what the effects of the drug are, and that while one drug may do the job for 1 person out of 10, it will not do the job for the other 9, and that to leave this decision to a Government official, even though proof must be presented to him

he makes the decision—to leave that decision to him rather than to the physicians who are prescribing these drugs, it seems to me, might be a dangerous position.

Dr. BARR. Is not the question whether you are going to admit the drug, whether you are going to patent the drug and put it on the market for wholesale use, or whether the Secretary is going to require that it be selectively tested before that hapens?

There is a vast difference between setting up a test and an appropriate test of a proposed drug and the administration of that drug to general use.

Mr. WALLACE. The point being, though, that maybe they would deny a patent on a drug which would, in turn, reduce the extent of its manufacture.

In other words, they may not get it on the market, while if it had gone on the market, it might very well become a useful drug.

I understand that there are slight modifications of drugs, particularly in the penicillin field, which came about, very slight modifications.

Of course, we must assume that the Secretary of HEW would see that this drug would have a significantly greater therapeutic effect. However, as I say, we are leaving that to the Government official rather than to the physicians in practice.

I do not mean to delay this. I was just asking for your comment about it, and I think I understand your position. Thank you. Mr. FLURRY. Mr. Chairman, the bill does not prevent such a drug

a from being placed on the market if it is safe and efficacious as determined by the Secretary with respect to all new drugs under the bill.

The question here simply goes to the patentability of the drug. If the molecular modification or the combination is not significantly greater in therapeutic effect, it is not subject to being patented, but that does not mean that the drug cannot be put on the market.

Mr. WALLACE. But, Mr. Flurry, if the manufacturer is not going to be able to get a patent to put it on the market, what is his incentive in discovering and producing it? He must have some protection.

Mr. Flurry. There are drugs on the market which are not patented or on which patents have expired and the manufacturers continue to manufacture them. I assume they produce them for a profit motive.

Senator KEFAUVER. Of course, somebody has to pass upon whether a patent is going to be issued or not. I am sure Mr. Wallace does not want a patent issued on any product that is presented, whether it is new or not.

The thing is, somebody is doing it now and what we are trying to do here is to get some medical consideration in passing on that question.

Very well, thank you very much, Dr. Barr.
Our next witness is Dr. Williams B. Bean.

Dr. Bean, we are glad to have you back with us. You and Dr. Lasagna and some of our other witnesses were good enough to testify earlier during our general inquiry into the drug industry, at which time

you discussed generally the problems raised from the physcian's point of view. The purpose of your appearance and of the other physicians who have been here before, or who have not been here before, is to comment on a specific piece of legislation, S. 1552, that is before the committee.

Of course, it may well be that some of you who are authorities feel that the bill goes too far. Others may feel that it does not go far enough. You and others may have recommendations as to its improvement, or changes in language. We have already heard some of them. Or you may have recommendations as to provisions that might properly be included in the bill but which are not included in this rather modest measure, as I term it.

So, as you are an authority, we are glad to have you back with us to discuss this particular legislation.

Your very eminent record and biography, has been placed in the record earlier. I would only mention again the fact that you are now the professor and chairman of the Department of Internal Medicine at the University of Iowa; physician in chief of the Universty Hospitals in Iowa; vice president and chairman of the Medical Section of the World Medical Association; and chairman of the board of regrets of the National Library of Medicine. We are honored to have you with us again today.

STATEMENT OF WILLIAM B. BEAN, M.D., PROFESSOR OF INTERNAL

MEDICINE, SCHOOL OF MEDICINE, IOWA STATE UNIVERSITY

Dr. Bean. Senator, members of the committee, ladies and gentlemen, I have been sufficiently identified. I appear here as a physician representing no organized or unorganized group of doctors or anybody else. I speak my personal convictions based on my own experience. It might be said that I represent the patient—the great American public consuming the commodities of medical arts and medical science.

I shall deal only with such parts of S. 1552 as come within my competence. I am not prepared to discuss the validity of proposals dealing with the Sherman Act and amendments to the patent law, but will confine my attention largely to those provisions of section

1 The full text of Dr. Bean's prepared statement may be found on p. 1067.

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