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SELECT COMMITTEE ON SMALL BUSINESS

[Created pursuant to S. Res. 58, 81st Cong. )

GAYLORD NELSON, Wisconsin, Chairman JOHN SPARKMAN, Alabama

JACOB K. JAVITS, New York THOMAS J. MCINTYRE, New Hampshire J. GLENN BEALL, JR., Maryland SAM NUNN, Georgia

BILL BROCK, Tennessee J. BENNETT JOHNSTON, Louisiana

LOWELL P. WEICKER, JR., Connecticut WILLIAM D. HATHAWAY, Maine

DEWEY F. BARTLETT, Oklahoma JAMES ABOUREZK, South Dakota

PAUL LAXALT, Nevada
FLOYD K. HAŞKELL, Colorado

BOB PACKWOOD, Oregon
DICK CLARK, Iowa
WALTER F. MONDALE, Minnesota

WILLIAM B. CHERKASKY, Staf Director
BENJAMIN GORDON, Staf Economist
JOHN 0. ADAMS, Minority Counsel
KAY KLATT, Research Assistant

SUBCOMMITTEE ON MONOPOLY

GAYLORD NELSON, Wisconsin, Chairman
THOMAS J. MCINTYRE, New Hampshire DEWEY F. BARTLETT, Oklahoma
WILLIAM D. HATHAWAY, Maine

J. GLENN BEALL, JR., Maryland
JAMES ABOUREZK, South Dakota

BOB PACKWOOD, Oregon FLOYD K. HASKELL, Colorado

JACOB K. JAVITS,* New York

•Ex officio member.

(11)

love

CONTENTS

Testimony of -

Ahart, Gregory J., Director, Manpower and Welfare Division, General

Accounting Office, accompanied by Thomas McCormick, Assistant

Director, Manpower and Welfare Division, GAO; and David Baine,

Pago

Supervisory Auditor, Manpower and Welfare Division, GAO... 11727

Apple, Dr. William S., Executive Director, American Pharmaceutical

Association, accompanied by Dr. Edward G. Feldmann, Associate

Executive Director for Scientific Affairs; and Carl Roberts, Amer-

ican Pharmaceutical Association Associate General Counsel

11663

Berliner, Robert W., M.D., Dean, Yale School of Medicine, and
Chairman, Drug Bioequivalence Study Panel -

11655

Lee, Lyndon E., Jr., M.D., Assistant Chief Medical Director for

Professional Services, Department of Medicine and Surgery, Vet-

erans Administration, accompanied by Roland F. Harding, Direc-

tor, Pharmacy Service; Donald P. Whitworth, Director, Supply

Service; John T. Manning, Assistant General Counsel; Eugene M.

Caffey, Jr., M.D., Deputy for Clinical Support Services; Richard

Parker, M.D., Chief of Infectious Disease; Robert G. Rose, Man-

ager, VA Marketing Center; Earl Berkshire, Chief, Marketing

Division for Drugs and Chemicals, VA Marketing Center; and

James Francese, Chief Pharmacist, VA Marketing Center...

11749

Margreiter, Douglas T., chief of pharmacy section, Colorado Depart-

ment of Social Services, accompanied by Donald Peebles, member,
Colorado Medical Advisory Board.

11700

McKenzie, Hon. Vernon, Principal Deputy Assistant Secretary of

Defense, Health and Environment, accompanied by Rear Adm. C.

Bruce Smith, Supply Corps. U.S. Navy, Commander, Defense Per-

sonnel Support Center; Brig. Gen. Benjamin Baker, Medical Corps,

U.S. Air Force and former chairman, Defense Medical Materiel

Board; and Lt. Col. Theodore D. Wood, Medical Service Corps,

U.S. Army-

11766

Michelotti, Carlo P., assistant chief, Medi-Cal Benefits Section, Cali-
fornia Department of Health...

11696

Pittman, James A., Jr., M.D., executive dean, University of Alabama

School of Medicine, Member, Drug Research Board, National

Academy of Sciences.-

11781

Schmidt, Hon. Alexander, M., M.D., commissioner, Food and Drug

Administration, accompanied by J. Richard Crout, M.D., director,
Bureau of Drugs; Thomas W. Brown, director, Compliance Coordi-
nation and Policy Staff, Office of Associate Commissioner for Com-
pliance; Peter Barton Hutt, Chief Counsel; Robert C. Wetherell,
director, Office of Legislative Services; Bernard T. Loftus, Bureau of
Drugs; and Francis J. Flaherty, Office of Associate Commissioner
for Compliance.--.

11732

Stetler, C. Joseph, president, Pharmaceutical Manufacturers Associa-

tion, accompanied by Bruce J. Brennan, vice president and general

counsel; and Howard L. Binkley, vice president for Research and

Planning -

11798

Trygstad, Vernon, president, National Pharmaceutical Council, Inc.

,

Washington, D.C., accompanied by Stanley L. Temko, Covington

& Burling, National Pharmaceutical Council Counsel..

11676

(III)

EXHIBITS

Material supplied by the Nelson Subcommittee for inclusion in the hearing

record:

Letter dated February 13, 1975, to Hearing Clerk, Food and Drug

Administration, from Earl J. Kolb, Jr., M.D., Central Medical

Clinic.---

118 15

Abbott comments on Upjohn studies--

11815

Letter dated March 3, 1975, to Hon. Alexander M. Schmidt, M.D., Com-

missioner, Food and Drug Administration, from Senator Gaylord

Nelson, Chairman, Select Committee on Small Business, U.S. Senate,

with accompanying reply -

11820

Letter dated Feb. 24, 1975, to Hearing Clerk, Food and Drug Ad-

ministration, from Charles A. Tobin, Secretary, Federal Trade Com-

mission, with accompanying statement-

11823

Letter dated June 2, 1975, to Hon. Caspar W. Weinberger, Secretary,

Department of Health, Education, and Welfare, from Senator

Gaylord Nelson, Chairman, Select Committee on Small Business,

U.Š. Senate, with accompanying enclosures -

11831

Letter dated June 19, 1975, to Senator Gaylord Nelson, chairman,

Select Committee on Small Business, U.S. Senate, from Hon.

Caspar W. Weinberger, Secretary, Department of Health, Educa-

tion, and Welfare..-

11832

Letter dated Jan. 10, 1975, to William L. Davis, president, Ayerst

Laboratories, from William F. Appel, R.Ph., Appel Pharmacy--

11834

“Recently, the future of your health was debated. You won," adver-

tisement from U.S. News and World Report, Oct. 21, 1974.

11835

Letter dated Mar. 11, 1975, to Senator Gaylord Nelson, Chairman,

Select Committee on Small Business, U.S. Senate, from Edward G.
Feldmann, Ph.D., Associate Executive Director for Scientific

Affairs, American Pharmaceutical Association..

11836

“Brand vs Generic Drugs: It's Only a Matter of Name," by Henry

E. Simmons, M.D., M.P.H., Director, Bureau of Drugs, Food and
Drug Administration, article reprinted from FDA Consumer, March
1973..

--- 11841

V

Appendix-Material supply by Nelson subcommitte-Continued

Letter dated Feb. 12, 1975, to Senator Gaylord Nelson, chairman, Pago

Select Committee on Small Business, U.S. Senate, from Dr. Philip
Handler, President, National Academy of Sciences, with accom-
panying press release.

11845 Letter dated March 18, 1975, to Senator Gaylord Nelson. Chairman,

Select Committee on Small Business, U.S. Senate, from James L.
Henry. M.D., President, Ohio State Medical Association, with ac-
companying enclosure.

11850 Letter dated March 25, 1975, to Senator Gaylord Nelson, Chairman,

Select Committee on Small Business, U.S. Senate, from James H.
Sammons, M.D., Executive Vice President, American Medical As-
sociation

11857 Prepared statements:

Ahart, Gregory J., director, Manpower and Welfare Division, General
Accounting Office..

11862 Berliner, Robert W., M.D., dean, Yale School of Medicine, and Chairman, Drug Bioequivalence Study Panel ..

11876 Lee, Lyndon E., Jr., M.D., assistant chief medical director for Profes

sional Services, Department of Medicine and Surgery, Veterans
Administration..

11881 McKenzie, Hon. Vernon, Principal Deputy Assistant Secretary of Defense, Health and Environment..

11898 Schmidt, Hon. Alexander M., M.D., Commissioner, Food and Drug Administration..

11908 Trygstad, Vernon, president, National Pharmaceutical Council, Inc., Washington, D.C.

11924 Exhibits provided by the U.S. Department of Health, Education, and Welfare:

Prepared statement of Hon. Caspar W. Weinberger, Secretary - 11936 List of drug recalls conducted by the Food and Drug Administration in fiscal years 1974–75.--

11965 Exhibits provided by the American Pharmaceutical Association:

Prepared statement of Dr. William S. Apple, Executive Director.. 11995
Comments of the American Pharmaceutical Association on proposed

rulemakings: 39 F.R. 40302, 39 F.R. 41480, 40 F.R. 3218, and 40
F.R. 3219.

12007 "MD attacks arguments against MAC program,” article from American Medical News, Mar. 3, 1975.-

12013 Exhibits provided by the California Department of Health:

Prepared statement of Carlo P. Michelotti, assistant chief, Medi-Cal
Benefits Section..

12014 Letter dated Jan. 8, 1975, to hearing clerk, Food and Drug Adminis

tration, from William Mayer, M.D., Director of Health, Depart-
ment of Health, State of California..

12022 Letter dated Mar. 10, 1975, to Mark Novitch, M.D., Deputy Associate

Commissioner for Medical Affairs, Food and Drug Administration,
from Mario G. Obledo, Secretary, Health and Welfare Agency,
State of California.

12046 Exhibits provided by the Colorado Department of Social Services: Prepared statement of Peter Samac, Deputy Director..

12070 Medical Advisory Council composition as dictated by Colorado statute..

12084 Exhibits provided by the Office of Management and Budget and General Services Administration: Prepared statement of Hugh E. Witt, Administrator for Federal Procurement Policy, OMB.

12085 Prepared statement of Ronald E. Zechman, Associate Administrator, Office of Federal Procurement Policy, GSA.

12089 Attachment A: Study of An Optimum Procurement and Distribution

System(s) for Medical and Nonperishable Subsistence Items - 12098 Attachment B: OMB Memorandum Dated June 4, 1974, Subject:

Procurement and Distribution of Medical and Nonperishable
Subsistence Supplies, and attachment.

12178 Attachment C: The Interagency Medical and Nonperishable Sub

sistence Supply Management Charter, Approved September 1974. 12182

Exhibits-Continued

Attachment D: Task Order No. 1, Approved Sept. 27, 1974, Sub- Page

ject: Establishment of a Task Group to Determine Criteria for

Defining Categories of Medical Items

12190

Attachment E: GSA Order (ADM 5420.46 Dated Feb. 3, 1975),

Subject: Establishment of the Interagency Medical and Non-

perishable Subsistence Supply Management Committee

12193

Attachment F: Memorandum dated Feb. 20, 1975 to the chairman of

the Medical Item Task Group, Subject: Your report dated Jan. 14,

1975, "Criteria for Defining Categories of Medical Items," and

attachments.

12196

Attachment G: Memoranda of Mar. 3, 1975 and Feb. 6, 1975 to MED/

NPS Supply Management Committee, Subject: Nonperishable sub-

sistence, DOD/VA plan of action dated Jan. 21, 1975

12202

Attachment H: Minutes of the MED/NPS Supply Management Com-

mittee: July 8, 1974; July 22, 1974; Aug. 13, 1974; Sept. 6, 1974;

Sept. 27, 1974; Oct. 29, 1974; Dec. 18, 1974; Jan. 31, 1975; and

Mar. 18, 1975.-

12208

Exhibits provided by the Drug Research Board, National Academy of

Sciences:

Prepared statement of James A. Pittman, Jr., M.D., executive dean,

University of Alabama School of Medicine, and member, DRB.--- 12287

Chronology of events concerning DRB's position on antisubstitution

laws.

12302

Four tables giving data on drug manufacturers, distributors, brand

names, and prices.

12303

Letter dated Aug. 2, 1974, to James A. Pittman, Jr., M.D., executive

dean, University of Alabama School of Medicine, from Hugh H.

Hussey, M.D., editor Emeritus, American Medical Association,

with accompanying correspondence--

12311

Proposed resolution of the Drug Research Board with regard to drug

product antisubstitution laws..

12316

"Substitution Gets Limited Okay From Science Group-- Drug

Research Board Says Physician Shouldn't Specify Brand Un-

necessarily,” article from American Druggist, Nov. 15, 1972.--- 12317

Memorandum dated Nov. 21, 1974, to members of the Drug Research

Board, from Duke C. Trexler.

12319

Memorandum dated Dec. 20, 1974, to members of the Drug Research

Board, from Duke C. Trexler.

12320

“Drug Board Urges Change in Drug Substitution Laws, press

release from the National Research Council, dated Jan. 21, 1975 .- 12321

"Comments on Hyperbole: Statement of the Drug Research Board,"

editorials from the Journal of the American Medical Association,

Apr. 28, 1975, vol. 232, No. 4, pages 380-381..

12325

American Medical News articles on Drug Research Board resolution,

Mar. 24, 1975.

12327

FDC report of Mar. 18, 1975, concerning the Drug Research Board's

clarifying statements”.

12329

Exhibits provided by the Pharmaceutical Manufacturers Association:

Prepared statement of C. Joseph Stetler, president-

12330

Letter dated June 9, 1975, to Senator Gaylord Nelson, chairman,

Select Committee on Small Business, U.S. Senate, from C. Joseph

Stetler, president, Pharmaceutical Manufacturers Association,

with accompanying enclosures.-

12337

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