Mr. WALLACE. So we try to show that in relation to other products, for example, housing and food, have gone up terrifically over drug prices. They are much higher in increasing expenses. At the same time we have drugs that are saving hospital costs. As I said, mastoid operations used to be a common thing. Now, I understand a drug is given and they do not even go to the hospital. Dr. CHERKASKY. That is right. My point to you is that we can even extend the extremely valuable contribution that drugs have made. It is because they have become so vital in medical care and so useful in protecting health and shortening hospital stays that we must do everything to make them secure, safe, and easily available. Mr. WALLACE. Doctor, let me ask you: On page 8 of your statement, you quote the drug costs of Mr. S. S. as $3,127. Do you have the figure on what his hospital cost was? Dr. CHERKASKY. I can tell you roughly. I can get it for you, but I can give you a rough guess. I would say to you that his costs would be, oh, 60 times $38 or $40. What would that be-$2,400 ? Mr. WALLACE. You said the drug cost was what, 20 percent of the total cost? Dr. CHERKASKY. Not for Mr. S. S. Mr. WALLACE. How about Mr. H. K.! Dr. CHERKASKY. I think if you multiply the stay that I have given there by $40, you will get about what his hospital costs are, and you can compare it to the drug costs. Mr. WALLACE. Those are the things that should be brought out, not just saying drugs are so much, but also point out what the others are. Dr. CHERKASKY. Yes, sir, I agree with you. Senator KEFAUVER. How long did he stay in the hospital? Dr. CHERKASKY. He had a hospital stay of more than 60 days. If you use the 60-day figure or even a 70-day figure, his costs would have been about $2,800 for his hospital stay; and his drug costs, about $1,800. Actually, during a 60-day period you would compare $2,400 to $1,800. Senator KEFAUVER. We thank you very much, Dr. Cherkasky. Dr. CHERKASKY. I thank you for allowing me to come and make this presentation, Senator. Senator KEFAUVER. This is a very splendid statement, and we hope you will tell the association what our position is. Dr. CHERKASKY. Thank you, sir. Senator KEFAUVER. We will stand in recess until 10 o'clock, next Tuesday. (Whereupon, at 1 p.m., the hearing was adjourned, to reconvene at 10 a.m., Tuesday, July 25, 1961.) DRUG INDUSTRY ANTITRUST ACT TUESDAY, JULY 25, 1961 U.S. SENATE, SUBCOMMITTEE ON ANTITRUST AND MONOPOLY Washington, D.C. The subcommittee met, pursuant to recess, at 10:15 a.m., in room 457, Old Senate Office Building, Senator Estes Kefauver presiding. Present: Senators Kefauver (chairman), Hart, and Hruska. Also present: George P. Larrick, Commissioner, Food and Drug Administration. Bernard Fensterwald, Jr., staff director; Horace L. Flurry, counsel; Peter N. Chumbris, counsel for the minority; Nicholas N. Kittrie, counsel for the minority; Dean W. Wallace, counsel for the minority; Lucile B. Wendt, attorney; Dorothy D. Goodwin, attorney; Dr. John M. Blair, chief economist; Dr. E. Wayles Browne, Jr., economist; Dr. Irene T. Hamilton, economist; Julian F. Granger, assistant editorial director; and Gladys E. Montier, clerk. (Present at this point: Senators Kefauver (chairman), presiding, and Hruska.) Senator KEFAUVER. The committee will come to order. We are delighted to have with us this morning Commissioner Larrick of the Food and Drug Administration. Commissioner Larrick informs us that one of our witnesses, Dr. Dowling, was his personal physician years ago. One point that I think we ought to get cleared up before we start with our witnesses this morning: We have discussed the matter of the package insert in the drug bottle, and that perhaps on occasion the doctor might get the package insert from the pharmacist to be able to acquaint himself with the drug. It is implicit in the bill S. 1552 that there should be a package insert in all cases, and also that the package insert should be sent in a general mailing to the physician. I found out just in the last day or so that many new drugs do not have the package insert included and that under present law it is not required that they have the package insert. However, the Food and Drug Administration in a series of proposed regulations dated July 22, 1960, did propose that it be required, but this has not been put fully into effect although it is partially in effect; is that correct, Mr. Larrick? Mr. LARRICK. Yes; that is correct, Senator. Senator KEFAUVER. Will you tell us the situation about the require ments? Mr. LARRICK. Under the 1938 law, the original regulation provided that patent medicines would have to have the whole of the informa 405 tion, but in the case of drugs for physicians it provided that it could either Senator KEFAUVER. Go ahead. Mr. LARRICK. It could either have the full information with the package or it could have a statement on it: "Literature available upon request.' But in our experience with that provision and with some of the revelations that came out as a result of these hearings, we proposed to require that it be placed in the package in all instances. That aroused a great deal of opposition and a great deal of comment, and the final resolution of that matter by our General Counsel and by ourselves has not yet been completed. Senator KEFAUVER. Partially, at least, as a result of these hearings there were quite a number of proposed regulations, promulgated by Food and Drug? Mr. LARRICK. And all of them except that one are now in effect. Senator KEFAUVER. Let us make these regulations exhibit No. 54. (Exhibit No. 54 may be found on p. 894.) Senator KEFAUVER. All of them except Regulation 3 are now in effect? Mr. LARRICK. That is correct, sir. Senator KEFAUVER. Regulation 3 would require the package insert in every case? Mr. LARRICK. Right. Senator KEFAUVER. You say there was opposition to that? Senator KEFAUVER. Where from? Mr. LARRICK. Well, there was opposition from the AMA. I hate to state somebody else's position, but they thought it would be better to get the package insert actually into the doctor's hands rather than to the drugstore. There was opposition from some drug manufacturers who did not have cartons with their packages, and they felt that the cost of putting cartons on all of them would be high. And there were some other miscellaneous objections that I do not recall, but those were the principal reasons. And I should say that the people who have opposed that proposal, in general, have come up with a counterproposal. For example, the AMA has proposed that they set up a system whereby they will be responsible for mailing the brochures, at least to their own members; and there are numerous groups Senator KEFAUVER. You mean on all drugs? Mr. LARRICK. On prescription drugs, as I understand it. Then there is the U.S. Pharmacopoeia group which has been studying a possible plan for them to distribute, and we are studying all of these different plans to see whether or not our regulation should be in the alternative, perhaps, but that has not yet been the result. Mr. FENSTERWALD. Did you say the AMA wanted the inserts to go directly to the physicians? Mr. LARRICK. That is right. Mr. FENSTERWALD. That would be provided under this bill that we are considering now. Mr. LARRICK. Yes; that is my understanding. Senator KEFAUVER. Senator Hruska has some questions. Senator HRUSKA. I just wondered, you say in the law of 1938 the alternate given for so-called prescription drugs is that either the insert shall be with the package or there shall be endorsed on the package language to the effect that: "Literature is available on request?" Mr. LARRICK. That is correct, Senator. Senator HRUSKA. In view of that statutory provision Mr. LARRICK. That is regulation. Senator HRUSKA. Oh, that is regulation? Senator HRUSKA. That is not statute? Mr. LARRICK. That is right. Senator HRUSKA. But the regulation was issued on the basis of the 1938 law? Mr. LARRICK. Right. Senator KEFAUVER. I think we might read the regulation. The law gives Food and Drug control of the labeling? Mr. LARRICK. Correct. Senator KEFAUVER. And under that you have a Regulation No. 3. It is from 1.106 (a) (3), title 21, Code of Federal Regulations, part 1. The No. 3 provision: The labeling of the drug (which may include brochures readily available to licensed practitioners) bears information as to the use of the drug by practitioners licensed by law to administer it: Provided, however, That such information may be omitted from the labeling if it is contained in scientific literature widely disseminated among practitioners licensed by law to administer the drug. Mr. LARRICK. That is correct. Senator KEFAUVER. As a result of the hearings here on July 22, 1960, you proposed to put into effect another regulation, which is Regulation 3 in exhibit 54, to require it in all cases? Mr. LARRICK. Right. I would not say in all cases. Senator KEFAUVER. In all new drugs? Mr. LARRICK. That is right. As a matter of fact, as the new drug applications are coming in now, we are increasing the we are making that a requirement under the new drug application, but that does not go back to pick up the ones where we did not do it at the time we made it effective. Senator KEFAUVER. Then, Mr. Larrick, as I understand it, you feel that the package insert should be put into all new drugs? Mr. LARRICK. That was the proposal that I made. Senator KEFAUVER. And you think it would be wellMr. LARRICK. I still have to study all of this record. Senator KEFAUVER. Yes, I know. And that in general mailings to physicians, the information contained in the package insert also be sent to the physicians? Mr. LARRICK. I think that would be helpful. Senator KEFAUVER. Is there any other colloquy? Senator HRUSKA. Do you feel there is any merit to the contention that there is no room in the package for this insert or on the label? Mr. LARRICK. My personal view is: Where you have a matter of economics coming in conflict with a matter of health, that you have to resolve it in the direction of health rather than economics. Senator HRUSKA. Is it the basis of that objection that it would cost too much? Mr. LARRICK. Yes; and that it is unnecessary, perhaps, if an alternative plan were adopted. There is merit in many of these alternative plans, and they should be studied with care. Senator HRUSKA. If that is true, Mr. Larrick-and you do not ask for that to be done in every event-would there be some disadvantage to having it frozen in inflexible form in a statute so that you would have to do it whether you wanted to or not and whether the circumstances called for it or not? Mr. LARRICK. I would think it would be nice to have some administrative discretion. Senator HRUSKA. Some discretion? Mr. LARRICK. Yes. Senator HRUSKA. Is there such discretion in the bill as we have it, or is it just a flat requirement which would impede the efforts of the Food and Drug Administration to protect the public welfare? Senator KEFAUVER. Will you read the language of the section of the bill that is referred to at page 14 of the committee print, Mr. Flurry? Mr. FLURRY. The printed language is: A true and correct copy of all printed matter which the Secretary has required to be included in any package in which that drug is distributed or sold Senator KEFAUVER. Shall be sent to the physician in general mailings. Mr. FLURRY. Yes. A true and correct copy of all printed matter in which the Secretary requires that that drug be distributed. Senator KEFAUVER. We will hear from Mr. Larrick later on this matter, but what I wanted to get cleared up now is that it is not mandatory at the present time that there be a package insert on all new drugs, and a sizable proportion do not have package inserts. Mr. LARRICK. That is correct. Senator KEFAUVER. But in your proposed regulation which has not been put into effect fully it is proposed that on new drugs there be a package insert? Mr. LARRICK. Correct. Senator HRUSKA. We will hear from Mr. Larrick at a later time, but I would be concerned a little bit getting bound in such an inflexible statutory straitjacket that they would not be able to effect a useful and a workable administration of this particular law. Senator KEFAUVER. Our first witness is Dr. Harry F. Dowling of Chicago, Ill. His full biography was included in the record of this hearing when he testified here on September 13, 1960, and his testimony on that previous occasion is at page 14166. At that time he was testifying in connection with antibiotics, in which area he is one of the world's leading authorities. To restate part of his eminent qualifications and experience, he was born in 1904; obtained his M.D. degree at George Washington in 1931; is a native of Washington, D.C., I believe, Dr. Dowling; certified in internal medicine in 1940'; interned, Baltimore Hospital after that; fellow in medicine at Harvard 1933-34; clinical instructor in successive posts of professor of medicine, George Washington Uni |