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Any of these can also be available on a larger scale for group participation in continuing medical education.

Most of the communications of tomorrow are in fact here today. The widespread application of today's capability will be tomorrow's communications. It is the pioneering efforts of the medical profession, such as the examples reported on today, which will point the way to the realization of what communications can accomplish.

I hope this presentation has been informative and will be helpful to this committee. And I appreciate the opportunity to make this report. Thank you.

Senator NELSON. Well, I thank you, Mr. Callahan, and you, Dr. Meyer, as well as the American Telephone & Telegraph Co., and the doctors who participated by telephone from other locations.

This has been a very informative and useful presentation. We appreciate very much your taking the time and I appreciate how much time you did put into setting up this rather elaborate display.

We thank you all
This will be most valuable for our record.
The subcommittee stands adjourned.
(Whereupon, at 2:55 p.m. the subcommittee adjourned.)

very much.

COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY

THURSDAY, NOVEMBER 9, 1967

U.S. SENATE,
MONOPOLY SUBCOMMITTEE OF THE
SELECT COMMITTEE ON SMALL BUSINESS,

Washington, D.C. The subcommittee met, pursuant to recess, at 9:45 a.m., in room 1318, Old Senate Office Building, Senator Gaylord P. Nelson (chairman of the subcommittee) presiding.

Present: Senators Nelson and Javits. Also present: Benjamin Gordon, staff economist; James H. Grossman, minority counsel; Susan H. Hewman, research assistant; and William B. Cherkasky, legislative director, staff of Senator Nelson.

Senator NELSON. We will resume the hearings of the Monopoly Subcommittee of the Select Committee on Small Business.

Dr. Goddard, we welcome you back to the subcommittee to continue our dialog about a number of problems as we discussed previously when you appeared.

Your statement will be printed in full in the record. You may proceed to present it as you see fit. And I assume you have no objections to our interrupting with questions as you go

along.' Dr. GODDARD. None at all. Senator NELSON. Fine. Go ahead, Doctor.

STATEMENT OF DR. JAMES L. GODDARD, COMMISSIONER OF THE FOOD AND DRUG ADMINISTRATION, U.S. DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, ARLINGTON, VA.; ACCOMPANIED BY PAUL A. PUMPIAN, DIRECTOR, OFFICE OF LEGISLATIVE AND GOVERNMENTAL SERVICES; AND WILLIAM W. GOODRICH, GENERAL COUNSEL Dr. GODDARD. Mr. Chairman, it is a pleasure for me to appear again before this distinguished subcommittee. As you have requested, I will amplify my previous recommendation to this subcommittee that a compendium of prescription drugs should be published by the United States. I will also direct my testimony to an issue which has engendered considerable controversy since my last appearance before this subcommittee. Thus, as you have also requested, I will attempt to clarify my position on marihuana.

As you know, vital information concerning all prescription drugs is presently disseminated via the package insert. A condensation and compilation of package inserts into a readily readable compendium distributed without cost to the physicians, pharmacies, hospitals, et cetera, would be a significant step forward in educating the health professions to the safe and effective use of therapeutic agents. It could also relieve the drug industry from the burden of printing the voluminous package inserts as such a compendium could appropriately replace this type of labeling:

1 See complete prepared statement of Dr. Goddard, p. 1261, infra.

The content of package-insert type of labeling is initially approved by FDA during the new-drug clearance procedure and is constantly reviewed by our medical staff

to insure that the labeling is consistent with current knowledge. Often the package insert is the only source of such necessary data on medicines which are prescribed daily.

Unfortunately, this information seldom reaches the physician; it remains on the local pharmacist's shelves. Proper utilization of this information is further hampered by the present format of the package inserts.

Senator NELSON. May I interrupt a moment?
Dr. GODDARD. Certainly.

Senator NELSON. Do you have an estimate on the cost of printing, preparing, and supplying these inserts along with the drugs?

Dr. GODDARD. I was advised by the Pharmaceutical Manufacturers Association—this subject was first raised by them, I might addwhen they asked would I consider a drug compendium to replace the package insert, that the program presently costs industry about $6 million a year.

Senator NELSON. $6 million ? Dr. GODDARD. Yes, sir. Senator Nelson. Do I understand you to say that the Pharmaceutical Manufacturers Association raised the question of the preparation of a compendium in place of this?

Dr. GODDARD. Yes. This was in April of 1966. And they pointed out that the matter had been discussed with my predecessor, Commissioner Larrick, and his position was that they could publish a compendium but would have to also continue the use of package inserts for 1 year in order to evaluate the effectiveness of the compendium.

Now, they were anxious to move ahead with this program but didn't see the necessity for running two programs in tandem for a year.

I agreed at that time that we would not require the package insert for the year after the compendium was published.

This was the beginning of our discussions on the drug compendium.

Now, we have had nothing but discussions since that time, and I am hard put to understand the recent statement of the president of the PMA where he was critical of my testimony before a committee of Congress where I expressed my displeasure with the foot draggingI think I characterized it as that. He said, “Why, we are discussing that matter right now."

Well, they are going to discuss it to death. And I think we stand at a unique point in time. With the National Academy of Sciences efficacy review reports beginning to come back to us, these can form the basis for much of what will be needed in the compendium on the drugs that were marketed between 1938 and 1962. So we truly have an opportunity that is well perceived by the members of the Drug Research Board of the Academy of Sciences and by others in this field. And that is why I am anxious to get on with the job.

Senator NELSON. Are you carrying on continuous discussions with the Pharmaceutical Manufacturers Association respecting this matter?

Dr. GODDARD. We have been through the good offices of the National Academy of Sciences meeting on this, and, as I say, for many, many months now.

Senator NELSON. Has the Pharmaceutical Manufacturers Association made any specific proposal as to what kind of a compendium they would like to see?

Dr. GODDARD. Yes, sir.

Senator NELSON. Have you discussed with them who would publish it; would pay for it? Dr. GODDARD. Yes. Senator NELSON. What is

Dr. GODDARD. Let me just state our position for the record. We feel that the Pharmaceutical Manufacturers Association should pay for it.

I have pointed out that this is an opportunity for them to exercise leadership. They state that they sell—that they manufacture, rather95 percent of the drugs that are sold as prescription drugs. And I say, therefore, they should assume the burden of the additional 5 percent, pay for the publication of a compendium that will be useful to every physician in the country and provide him with comprehensive information on all of the drugs available.

The format we have discussed in some detail. There does seem to be a problem, I am told, from their point of view with a requirement that I wish to impose; namely, that the drugs be discussed under the generic heading, including a brief discussion of the important uses, the dosage, side effects, contraindications for the drug, followed then by a ! listing of the trade names of the drugs, the dosage forms, and the manufacturers.

Such a book would be cross indexed by both trade and generic name. But this does seem to be a stumbling block—at least I am told that it is.

Now, on the other hand, the people who have been advising me from the Drug Research Board and from the American Medical Association's Council on Drugs feel that this is the only way in which a comprehensive, intelligent job could be done. From just the standpoint of format, it seems necessary to do it this way, otherwise there is great duplication, you see. There may be many manufacturers—there are indeed, I think, some 42 firms or more which produce rauwolfia serpentina as a prescription drug, and I think that Serpasil under the generic name reserpine has 70 firms manufacturing it.

Well, it does not seem sensible to produce a volume that would have in 70 different places the description of a drug; that is, the active ingredient is identical.

Senator NELSON. I guess you address yourself to this question a little later in your statement, but if you produced a compendium, would you contemplate listing every single manufacturer of every drug?

Dr. GODDARD. I hestitate to say every single manufacturer, because, as the Senator knows, there are a number of manufacturers who do a very small intrastate business only, and I do think just as a practical limitation on size, you have to have a cutoff point somewhere. These in

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dividual firms would probably not be listed in such a compendium. But we are interested in having those firms that produce and distribute nationally and even regionally included.

Senator NELSON. How many drugs would be involved ?
Dr. GODDARD. Well, there are 21,000, approximately,
Senator NELSON. Different or

Dr. GODDARD. Different dosage forms of the some 7,000 drugs in the marketplace today. These would all be included.

Senator NELSON. And would a compendium and the drugs included have the approval of FDA?

Dr. GODDARD. It would have to be approved by the Food and Drug Administration since it does serve as a form of labeling. The best possible outcome as far as I am concerned, would be for PMA to exercise leadership in this area, assume the burden and use, if such could be arranged, the format of the PDR, if the owners of PDR were willing to engage in that. I say this because PDR has a great level of acceptance in the country, and this would become competitive, you see.

If such a marriage, if you will, could take place, I think it would find instant acceptance on the part of the practicing physicians. They would receive this volume each year, as they always

have, and it would provide them with comprehensive information in terms of coverage of the drugs, as opposed to today's PDR which is on the basis of paid advertising. Even the major firms do not include all of their drugs in today's PÕR. So I think it would be a marked improvement and everyone would benefit.

Senator NELSON. All the drug products listed there would have the approval of FDA?

Dr. GODDARD. Of course, the drugs have to have our approval to be in the marketplace.

Now, if you are saying that we would be offering an implicit warning or guarantee that they are efficacious, until the academy review is completed, we could not offer such a guarantee. Until we are in a better position to apply therapeutic equivalency than we are today, we could not offer the physicians such a guarantee.

But that is our goal. It is an achievable goal, and I think it is one that we can accomplish by 1971, as I have indicated in other testimony.

Senator NELSON. Am I correct in saying that to get approval to be introduced into the marketplace at all, a prescription drug has to meet USP standards?

Dr. GODDARD. If it exists in the USP or NF, yes. Combinations are not in USP, of course, so there are many combination drugs in the marketplace today, too.

Mr. GORDON. Well, there are FDA standards, too, aren't there; for example, on antibiotics?

Dr. GODDARD. Yes, there have to be standards, and we do certify them on a batch-by-batch basis.

Mr. GORDON. Perhaps you cover this later, but how useful and effective are the package inserts do the doctors really read them?

Dr. GODDARD. Most of the time the physician does not receive them, so he does not really have an opportunity to read them.

I have some here, for example. Here is a package insert. I do not think many physicians are going to read this, if he even gets it.

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