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EXHIBITS PROVIDED BY THE AMERICAN PHARMACEUTICAL
ASSOCIATION

STATEMENT

OF THE

AMERICAN PHARMACEUTICAL ASSOCIATION

TO THE

SELECT COMMITTEE

ON SMALL BUSINESS

OF THE

UNITED STATES SENATE

94TH CONGRESS, 1ST SESSION

WASHINGTON, D.C.

MARCH 20, 1975

MR. CHAIRMAN, MEMBERS OF THE SUBCOMMITTEE, I AM DR. WILLIAM S. APPLE, EXECUTIVE DIRECTOR OF THE AMERICAN PHARMACEUTICAL ASSOCIATION (APHA) WHICH, AS YOU KNOW, IS THE NATIONAL PROFESSIONAL SOCIETY OF PHARMACISTS IN THE UNITED STATES. I AM PLEASED, ONCE AGAIN, TO APPEAR BEFORE THIS DISTINGUISHED COMMITTEE WITH MY ASSOCIATES, DR. EDWARD G. FELDMANN, ASSOCIATE EXECUTIVE DIRECTOR FOR SCIENTIFIC AFFAIRS, AND MR. CARL ROBERTS, APHA ASSOCIATE GENERAL COUNSEL.

THIS IS THE THIRD OPPORTUNITY WHICH APHA HAS HAD TO EXPRESS ITS VIEWS DIRECTLY TO CONGRESS REGARDING THE MAXIMUM ALLOWABLE COST POLICY ANNOUNCED BY HEW SECRETARY WEINBERGER ON DECEMBER 19, 1973. HOWEVER, IT IS THE FIRST OPPORTUNITY WE HAVE HAD TO

COMMENT ON THE PROPOSED IMPLEMENTATION OF THAT POLICY.

SENATOR NELSON, I KNOW THAT YOU PERSONALLY ARE WELL AWARE THAT APHA HAS STOOD VIRTUALLY ALONE IN SUPPORT OF THE "MAC" POLICY SINCE IT WAS UNVEILED BY SECRETARY WEINBERGER. YOU KNOW THAT APHA HAS PUBLICLY ENDORSED THE BASIC CONCEPT EMBODIED

IN THIS POLICY AS FAIR AND MAKING GOOD SENSE.

IN TESTIMONY IN FEBRUARY OF LAST YEAR, APHA NOTED THAT--
"WHAT THE SECRETARY HAS SAID IN ESSENCE IS THAT

THE FEDERAL GOVERNMENT AND THE TAXPAYERS WHO
SUPPORT IT SHOULD NOT PAY DRUG MANUFACTURERS
MORE FOR DRUG PRODUCTS OF ACCEPTABLE QUALITY
THAN A COMPETITIVE MARKETPLACE REQUIRES.
IMPLICIT IN THE PROPOSED FEDERAL POLICY IS A
RECOGNITION THAT AT PRESENT THE FEDERAL

GOVERNMENT IS PAYING MORE FOR SOME DRUG

PRODUCTS THAN IT SHOULD HAVE TO PAY."

WE ALSO NOTED AT THAT TIME THAT, WHILE NO CONTROLS HAD BEEN APPLIED TO DRUG PRODUCT COSTS, THE PROFESSIONAL SERVICE COMPONENT OF THE PRESCRIPTION CHARGE HAS ALWAYS BEEN TIGHTLY REGULATED

UNDER FEDERALLY SUPPORTED HEALTH CARE PROGRAMS:

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" . . WHILE DIRECT CONTROLS OVER THE FEES
REIMBURSED TO PHARMACISTS HAVE BEEN EXERTED

BOTH BY GOVERNMENT AND THE PRIVATE THIRD

PARTY MANAGERS, NO SIMILAR CONTROLS HAVE BEEN
IMPOSED WITH REGARD TO THE DRUG PRODUCT

COMPONENT OF THE PRESCRIPTION COST. DRUG

PRODUCTS ARE PAID FOR ON THE BASIS OF

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