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Washington, D.C., September 23, 1960.

Re notice of proposal to amend labeling requirements (21 CFR 1, 130) dated
July 18, 1960; appearing in Federal Register, July 22, 1960 (25 F.R. 6895).


Department of Health, Education and Welfare,

Washington, D.C.

DEAR SIR: The American Pharmaceutical Association desires to file the following supplemental statement. Our original statement was filed on September 20, 1960.

We have noted that statements filed by other interested parties contain divergent recommendations worthy of consideration and suggestions for discussions on their viewpoints. In the interest of bringing to the Department of Health, Education and Welfare the most constructive consensus possible on the major problem of placing adequate information in the hands of the health professions, the American Phamaceutical Association recommends that an early conference be arranged by the Food and Drug Administration with representatives of the pharmaceutical industry, medicine, and pharmacy.

We feel that such a conference under the leadership of the Food and Drug Administration would be most productive, and the American Pharmaceutical Association is prepared to participate.

Sincerely yours,

WILLIAM S. APPLE, Secretary.

Mr. GORDON. Mr. Grossman, do you have any questions?
Mr. GROSSMAN. Dr. Apple, I have several questions here.

Getting back to your community formulary, I think this is a very progressive, constructive idea, and I wondered-you say on page 27 of your testimony that several pharmaceutical groups have indicated an interest in testing this concept in a number of States. I wonder if you could be more specific.

Dr. APPLE. Well, not at this time. These are all preliminary meetings that we have had, and until the State and local organizations concerned have come to a firm decision and have had their conferences with the counterpart medical societies at the respective levels, I think it would be premature to comment on our discussions.

Mr. GROSSMAN. For example, could not these be used in certain disadvantaged areas in large cities to cut the prices of drugs to these people that Senator Hatfield was talking about earlier?

Mr. STEEVES. We have suggested, Mr. Grossman, that the pharmacists in the area of OEO clinics, for example, get together in just this type of a proposition, develop a formulary so that they can meet the economics that are involved in these OEO clinics, and we have been doing this for some time. This is already in progress and being considered in a number of areas.

Dr. APPLE. You see the immediate reaction of a Federal agency is to go in there and start its own pharmacy program, and we do have this problem right now with OEO. As we have indicated in testimony before other committees of the Senate and the House, there are ways which the community pharmacist can continue to serve without this disruptive situation if we are given an opportunity, and the opportunity hinges basically on two things: One, the opportunity for pharmacists to buy as cheaply, as the Government buys and other favored

customers; and two, on the utilization of a formulary system to avoid a lot of duplication.

Mr. GROSSMAN. Have you been in touch with the industry on this one point you raise about whether you would be able to buy at the same rates that the hospital formularies would be able to buy or are now able to buy?

Mr. STEEVES. No; but the problem is, Mr. Grossman, that you might not be able to purchase the identical product from the same company, but you can get a comparable price under the formulary system. If the Government can buy, let us say, prednisone at $1 a hundred, you can find other products on the market that are a dollar a hundred.

Mr. GROSSMAN. This is just the kind of thing that I think you are talking about that the industry could do, it is the kind of thing that the insurance industry is moving into, and I see no reason why the pharmacists would not want to expedite this kind of thing and try to show you are going to make a contribution in these areas.

Mr. STEEVES. We have said that we would.

Dr. APPLE. We would welcome any pronouncement by any pharmaceutical manufacturers of such decisions or a pronouncement by the Pharmaceutical Manufacturers Association that this is its new policy. Mr. GROSSMAN. One of the questions that I have is, What is going to happen to the little pharmacist who has a little store down in his area? Is he going to fight you through the local organization to set up these kinds of things? Have you had any problems with him yet or is this still in a thinking stage?

Dr. APPLE. Well, you are talking about the little man-
Mr. GROSSMAN. The small businessman.

Dr. APPLE. The little man as you refer to him, the pharmacist in practice in the community, is the gut of our membership, and he is the one who is turning to us for assistance and help. He is the one who wants to know, "What can I do that will help me compete with the Government, help me compete with other people, to help me to be able to provide my service more economically so that physicians are not directing prescriptions to discounters and everybody else?"

Mr. GROSSMAN. I take it that these same small pharmacists are having difficulty with the hospital formulary competition; is that true? Dr. APPLE. Well, the hospital formulary when it works for inpatients in the hospital obviously does not affect the pharmacist who is serving noninstitutionalized patients.

Mr. GROSSMAN. I am talking about outpatient services.

Dr. APPLE. You are starting to get a meld of services between the institution and the home environment. We used to look at the hospitals as a distinct separate world of their own, and the community pharmacy in another world. But that has all disappeared. They are all serving patients, one day the patient is in the hospital, the next day he is an outpatient, and he needs the same pharmaceutical service.

Mr. GROSSMAN. Just one final note then: What would you say then, what are the major impediments to setting this kind of thing up in the Woodlawn area of Chicago or in New York, in Bedford-Stuyvesant, and similar places like that, soon?

Dr. APPLE. I do not think there is a major impediment. I just think it is matter of an educational program. I would say that when phar

macists understand this and can sit down and help explain it to physicians this is basically what has happened in the hospital environment—you take the physician who is in the hospital 3 hours a day, accustomed to practicing this way, if he stops and thinks about it, why shouldn't he practice the other 8 hours a day using the same type of system. I have had a number of physicians, when I have put it to them this way, say, "Come to think of it, why shouldn't we? If it is good enough for us in the hospital it ought to be good enough for our patients outside of the hospital."

Mr. GROSSMAN. Thank you.

Mr. GORDON. Dr. Apple, on behalf of the subcommittee I want to thank you very much for coming here and giving us the benefit of your views. Thank you very much.

Dr. APPLE. Thank you, Mr. Gordon.

Mr. GORDON. The hearings will resume tomorrow morning at 10 a.m. in this room.

(Whereupon, at 1:45 p.m., the subcommittee adjourned until 10 a.m., Thursday, November 16, 1967.)






Washington, D.C.

The subcommittee met, pursuant to recess, at 10 a.m. in room 318, Old Senate Office Building, Senator Gaylord P. Nelson (chairman of the subcommittee) presiding.

Present: Senators Nelson, Javits, and Hatfield.

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. The Monopoly Subcommittee of the Small Business Committee will come to order.

The subcommittee welcomes the Pharmaceutical Manufacturers Association this morning and its president, Mr. C. Joseph Stetler, and his associates. We appreciate having you here today to present the industry viewpoint on the important issues that are being considered by the committee. You represent a distinguished industry that has made a great contribution to the health and welfare of our country and the rest of the world. Your member companies employ a number of the finest scientists, doctors, pharmacologists, and researchers in the medical health field. Since your industry does work in the field of health directly affecting all of our citizens, the Congress, as a representative of the public, has an important responsibility to protect the public interest. The PMA and many others, including doctors, pharmacists, pharmacologists, editorial writers, and interested specialists in the health field have been critical of some aspects of the conduct of these hearings. Some have said they are unnecessary or that the subject is not a proper concern of Congress, or that the hearings are unfair or loaded against the industry.

Since I am conducting these hearings, the major responsibility is mine, subject, of course, to direction by the members of the committee itself. And, I accept that responsibility quite happily.

I have attempted to conduct these hearings as fairly and honestly as I know how. I have been conducting hearings for 20 years as a State legislature and Governor and U.S. Senator, and this is the first time I have been criticized as being unfair in the conduct of hearings. I have repeatedly assured the Pharmaceutical Manufacturers Association and its member firms that all valid interested groups would be heard and in proper balance. I think we are doing just that.

But since the PMA does not believe that to be the case, we will explore at some period during these hearings in detail all complaints

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