this carefully. And I think those attacks are unjustified, when, in fact, the DRB has acted in a very responsible manner.

The rest of this statement is in answer to the questions in your letter. I think the important thing is that the amount of information available needs to be increased to the individual making the selection. In making the decision about the selection, the point is to emphasize the amount of information available. And I think the manufacturing plant is often not known.

For example, when Mylan Laboratories makes a number of different tetracyclines and then Mylan does not appear on the final packed form at any place, that is information the prescriber and dispenser need. So that in making the decision of the drug product selection, the most important thing needed by the physician or the pharmacist, but now lacking is information as to the actual manufacturer of the various drug products.

It seems to me that the reasonable conclusion of this whole affair might best be simply to require the distributors of drug products to designate in writing, on each bottle or package of the drug product being dispensed to the pharmacy, the actual manufacturing laboratory or unit in sufficient detail to inform the pharmacist and physician accurately as to the origin of the material. With this information and the price of the various drug products in hand, and the recommended changes in prescription forms, selection of the best product for the lowest cost should not be difficult.

Thank you, sir.

Mr. GORDON. I would like to summarize your statement and ask if my summary is correct. Is this a fair summary of the situation? The Drug Research Board twice passed unanimously a resolution in essence that the antisubstitution laws in the various States should be repealed or substantially modified, is that correct?

Dr. PITTMAN. No. The second time it was 13 to 1, it was almost unanimous.

The CHAIRMAN. With one abstention?

Dr. PITTMAN. The second time one of the industry-related members voted against it.

Mr. GORDON. This resolution was accepted by the parent National Research Council, National Academy of Sciences, is that correct? Under extreme pressure from the Pharmaceutical Manufacturers Association and the American Medical Association, the Drug Research Board subsequently reversed itself by adopting an amendment offered by one of the industry members. Is that substantially correct?

Dr. PITTMAN. The Drill amendment would have reversed the intent of the thing. This was not accepted by the Assembly of Life Sciences.

Mr. GORDON. The National Research Council refused to accept the reversal, is that correct?

Dr. PITTMAN. That is correct.

Mr. GORDON. So that there is no change in the NAS/NRC position from the document issued in January 1975?

Dr. PITTMAN. That is correct.

Mr. GORDON. And as I understand it, there is a meeting of the DRB called for the latter part of May to reconsider the resolution?

Dr. PITTMAN. That is right.

I might add one thing, and that is that the implication is that the physicians are all up in arms against this. And I don't believe that is correct. I have talked with some physicians in Michigan, where they have a law, which we examined in the course of this, which we thought was a reasonable law, and also in Florida. And while some of them may find it an annoyance-one used the word "harrassment” I don't think most of them consider it any problem. Dr. Brush, the president of the Michigan Medical Association said it was not a problem. The headquarters of the Michigan Medical Association has had one call about this in the past year which asked about it. But they have had hundreds of calls about malpractice.

So I don't think this is an issue that the doctors are all exercised about. I think when AMA talks in this vein, they are really reflecting the PMA. And this I find offensive.

The CHAIRMAN. Reflecting the Pharmaceutical Manufacturers Association?

Dr. PITTMAN. Yes. I think the AMA should not permit itself to be used that way.

The CHAIRMAN. Thank you very much, Dr. Pittman, for your very thoughtful statement, and for taking the time to come here and appear before the committee.

Our next witness is Mr. Joseph Stetler, president of the Pharmaceutical Manufacturers Association.

The committee is pleased to welcome you back again, Mr. Stetler. And would you identify your associates for the record so the record will be accurate? And then you may present your statement however you desire.1

STATEMENT OF C. JOSEPH STETLER, PRESIDENT, PHARMACEUTICAL MANUFACTURERS ASSOCIATION, ACCOMPANIED BY BRUCE J. BRENNAN, VICE PRESIDENT AND GENERAL COUNSEL; AND HOWARD L. BINKLEY, VICE PRESIDENT FOR RESEARCH AND PLANNING

Mr. STETLER. With me are Bruce J. Brennan, who is PMA's vice. president and general counsel, and on my right, Howard Binkley, who is the association's vice president for research and planning. The CHAIRMAN. Welcome, gentlemen.

Mr. STETLER. We are here today at your request to discuss the proposed Maximum Allowable Cost drug reimbursement plan that was announced by the Department of HEW in testimony in December 1973, and formally proposed in the Federal Register on November 15, 1974.

Obviously, the previous testimony deals with a different subject, a subject that I did not know was going to be discussed today. But equally obviously, it deals with a subject that involves PMA and myself personally.

Now, I would like either initially, or after we talk about MAC, to discuss this other issue, because I personally have decided by different recollection of some of the things that happened in the de

1 See information beginning at page 12330.

liberations of the Drug Research Board than was just presented in testimony.

The CHAIRMAN. If you would like, you can either respond now, or if you would prefer to look at the record itself and draft your response later and submit it in a week or 10 days, you may do that, either one.

Mr. STETLER. With your permission I would like to do a little of rief, because this is a complex and complicated issue. And I think you probably can detect that from what you have heard already today.

The CHAIRMAN. All right, it will get more complex as you deal with it.

Mr. STETLER. No, I am going to try and clarify it for you a little bit.

The CHAIRMAN. You may handle this in any way you desire. Mr. STETLER. I will give it to you right now. It will be brief. The CHAIRMAN. All right. We would like to have it, I suppose, juxtaposed with the previous testimony. Go ahead.

Mr. STETLER. First of all, the issue of substitution law repeal or retention was an issue that was brought to the Drug Research Board's attention by the PMA. But we did not approach them. The PMA was invited by the Drug Research Board to have a meeting with the DRB to discuss a variety of subjects. In response to that invitation, we prepared an agenda with Duke Trexler, their executive secretary. And one of the items on that agenda was the effort to repeal State drug antisubstitution laws. And we did discuss it.

Subsequently at a later meeting of the Drug Research Board, a resolution was presented which would have attempted to sustain the present laws. A representative of the American Pharmaceutical Association asked for an opportunity to comment, and they were given that opportunity, and properly should have been. They had a meeting, a separate meeting with Dr. Pittman and Dr. Hussey, a committee of two were appointed by DRB to consider it. On that occasion they were invited to submit material, which they did.

Later, representatives of the PMA and APhA met with Pittman and Hussey on September 26th. The resolution that was discussed, although not agreed to at that time, was different from the resolution that went to the Drug Research Board on October 25th. I didn't attend the meeting on October 25th, although our representatives were there.

You asked a question which I think deserves clarification. Was the resolution adopted tantamount to an agreement in support of generic prescribing? It is important to know that on October 25th, Dr. Azarnoff, a member of the Drug Research Board, moved that the resolution be amended to be very specific in support of generic prescribing. That amendment was specifically rejected by the Drug Research Board. Since there was a vote on that issue, I think it is clear that they didn't mean to endorse generic prescribing.

I would agree that the "resolved" at the October 25th resolution is ambiguous. And I think the trade press account that interpreted it in very different ways indicates that it has been read by different. people differently.

I wrote to Dr. Shideman long before the January 21st press release came out. I wrote to him twice in November 1974 indicating that I thought the resolution was confusing and that the intent of the Drug Research Board was not clear. I asked that it be reconsidered and clarified. Although we raised the issue, if they wanted to take a position in support of repeal of the drug substitution laws, so be it. But I frankly couldn't tell from the resolution which side of the issue they were on.

Although a meeting was set for March 14th, the subject was not on the agenda. There was a motion made by Dr. Kohlstaedt that it be made the first order of business. And under Robert's Rules of Order that was put to a vote by the chairman. And every member had to vote unanimously that this become the first item of business. They also voted, including Dr. Pittman.

Now, that issue was discussed for 3 hours and 15 minutes on March 14. And at the end of that time two actions were taken. They reaffirmed the resolution of October 25, and they adopted a clarifying statement to say what they meant by the resolution.

The vote to reaffirm the resolution was 13 to 1. The vote on the clarifying statement was unanimous by all present, including Dr. Pittman's vote.

Now, they said some things in that clarifying statement-and incidentally, it was adopted as one statement-the first part of it was authored by Paul Calabresi. The last part of it was authored by Dr. Drill, with an assist from the Chairman of the Board, Dr. Shide

man.

They voted on one clarifying statement and they agreed unanimously. What they said was that the doctor should have the prerogative of selecting the product; that each time he writes a prescription he should make a conscious decision whether to retain that prerogative or delegate it, and should so indicate.

They also said in the final paragraph of the clarifying statementwe do not intend this resolution to be used to change or repeal State antisubstitution laws.

Now, that wasn't an idea presented just by Dr. Drill, an industry representative, as it is now depicted. It was a statement authored by him and adopted unanimously by everybody there.

When this came up 3 days later on March 17, the Assembly of Life Sciences saw fit to accept the reaffirmation of the resolution, and they summarily rejected the clarifying statement.

Now, that confuses me somewhat. I don't know what body has the authority, God given or otherwise, to tell somebody else what they meant when they described their action in plain English. But that is where it is now. It will be discussed again on May 29.

Incidentally, that is an executive session. I won't be there. But I guarantee you if Ben Gordon is there. I would like to be there, too. I think it should be an open meeting. I don't think this thing should be discussed in any star chamber proceedings. Whoever has an idea or comment on it should be there.

Finally, I disagree completely with Mr. Gordon's summation of what happened as a result of the deliberations of the Drug Research Board. They did not on two ocassions vote unanimously to have the

antisubstitution laws of the States repealed or amended, or at least they didn't so state.

There is a lot more detail to this that is pretty boring, frankly. But for the record I would like to have the opportunity to submit it. The CHAIRMAN. You may submit whatever you wish for the record on that point.

Mr. STETLER. On Maximum Allowable Cost, the PMA submitted comments on this proposal in very extensive detail on February 14

The CHAIRMAN. May I interrupt just 1 minute. If there is any difference or further elaboration that Dr. Pittman would like to make in the record along with your statement, the record will be open. And if you wish to respond to it, you may.

Mr. STETLER. On that, incidentally, we are discussing an action of the Drug Research Board. I think it might be appropriate to ask the Chairman of the Drug Research Board what happened. Dr. Pittman's views on this issue have been well known.

On occasion they have been minority views on the Drug Research Board. We are talking about an action of the Drug Research Board. I would like to request the committee to ask the Drug Research Board, through its Chairman, if its action needs clarification that it be submitted.

Incidentally, if we have differences of opinion on this, everything that went on, on September 26, October 25, and March 14 is on tape, if anybody would really like to hear the conversation. At the March 14 meeting every member of the Drug Research Board was polled to ask him what he meant when he voted for the October 25 resolution. You don't have to take my word or Dr. Pittman's, it is right there on tape for anybody to listen to it.

The CHAIRMAN. Do you suppose that all of that discussion on tape would be clearer than that clarifying amendment that you are talking about?

Mr. STETLER. That clarifying amendment covers what the members said when they were asked what they meant when they voted for the October 25 resolution, and especially whether they meant to repeal the State antisubstitution laws. Now, what they actually said in detail, is on the tapes.

The CHAIRMAN. I have a letter here from Dr. Philip Handler, president of the National Academy of Sciences and the press release issued by that organization. Both will be printed in the appropriate place in the record. Dr. Handler said: "Last month the National Research Council's Drug Research Board adopted a resolution concerning drug substitution laws. Briefly, the resolution urges that a physician should be required to give to, or explicitly withhold from, the pharmacist the option of substituting one brand of drug he prescribes for another brand of the same drug-an option which could, in many cases, provide the same treatment at lower cost. I am enclosing a copy of the Academy's press release on the subject," and so forth.

I would ask that the letter from Dr. Handler, as well as the release, be printed in the record.