PAGENO="0001" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY HEARINGS BEFORE THE SUBCOMMITTEE ON MONOPOLY OF THE SELECT COMMITTEE ON SMALL BUSINESS UNITED STATES SENATE NINETIETH CONGRESS FIRST SESSION ON PRESENT STATUS OF COMPETITION I~ THE PHARMACEUTICAL IN1~USTRY PART 4 OCTOBER 31, NOVEMBER 9, 15, 16, AND 28, i9~37 Printed for the use of the Select Committee on Small Business U.S. GOVERNMENT PRINTING OFFICE 81-280 WASHINGTON : 1968 r~7'1 For sale by the Superintendent of Documents, U.S. Government Printing Office Washington, D.C. 20402 - Price $1.00 PAGENO="0002" SELECT COMMITTEE ON SMALL BUSINESS [Created pursuant to S. Res. 58, 81st Cong.] (90th Cong., First sess.) GEORGE A. SMATHERS, Florida, Chairman JOHN SPARKMAN, Alabama RUSSELL B. LONG, Louisiana WAYNE MORSE, Oregon ALAN BIBLE, Nevada JENNINGS RANDOLPH, West Virginia E. L. BARTLETT, Alaska HARRISON A, WILLIAMS, Ja., New Jersey GAYLORD NELSON, Wisconsin JOSEPH M. MONTOYA, New Mexico FRED R. HARRIS, Oklahoma WILLIAM T. MCINARNAY, Staff Director and General Counsel JAM~DS H. GROSSMAN, Minority Counsel MONOPOLY SUBCOMMITTEE JOHN SPARKMAN, Alabama RUSSELL B. LONG~ Louisiana WAYNE MORSE, Oregon GEORGE A. SMATHEItS,* Florida BENJAMIN GORDON, Staff Economist SUSAN H. HEWMAN, Research Assistant *Ex officio member. II JACOB K. JAVITS, New York HUGH SCOTT, Pennsylvania NORRIS COTTON, New Hampshire PETER H. DOMINICK, Colorado HOWARD H. BAKER, JR., Tennessee MARK 0. HATFIELD, Oregon GAYLORD NELSON, Wisconsin, Chairman HUGH SCOTT, Pennsylvania MARK 0. HATFIELD, Oregon JACOBK. JAVITS,* New York PAGENO="0003" CONTENTS Statement of- Page Andersen, Mary Louise, second vice president, American Pharmaceu- tical Association, Washington, D.C.; accompanied Dr. William S. Apple, executive director, APhA 1267 Apple, Dr. William S., executive director, American Pharmaceutical Association, Washington, D.C.; accompanied by Mary Louise Andersen, second vice president; Max W. Eggleston, president- elect; and Robert F. Steeves, director, legal division 1267 Caceres, Dr. Cesar A., Chief, Medical Systems Development Labora- tory, heart disease control program, National Center for Chronic Disease Control, Public Health Service, U.S. Department of Health, Education, and Welfare, Washington, 1).C 1158 Callahan, George E., sales projects manager, American Telephone & Telegraph Co., 195 Broadway, New York, N.Y 1149 Cutler, Lloyd N., special legal counsel, Pharmaceutical Manufacturers Association, Washington, D.C.; accompanied C. Joseph Stetler, president, PMA 1323 Eggleston, Max W., president-elect, American Pharmaceutical Asso- ication, Washington, D.C.; accompanied Dr. William S. Apple, executive director, APhA 1267 Goddard, Dr. James L., Commissioner, Food and Drug Administra- tion, U.S. Department of Health, Education, and Welfare, Crystal Plaza No. 6, 2221 Jefferson Davis Highway, Arlington, Va.; accom- panied by Paul A. Pumpiaii, Director, Office of Legislative and Governmental Services; and William W. Goodrich, General Counsel 1219 Goodrich, William W., General Cqunsel, Food and Drug Administra- tion, ITS. Department of Health, Education, and Welfare, Crystal Plaza No. 6, 2221 Jefferson Davis Highway, Arlington, Va.; accom- panied Dr. James L. Goddard, Commissioner, FDA 1219 Laughlin, Dr. John H., attending physicist, Memorial Hospital for Cancer & Allied Diseases, 425 E. 68th Street, New York, N.Y - - - 1178 Meyer, Dr. Thomas C., associate dean, University of Wisconsin Medical Center, 1415 Linden 1)rive, Madison, Wis 1186 Nobel, Dr. Joel J., director, Graduate Pain Research Foundation, 2006 Delancey Place, Philadelphia, Pa 1170 Prihor, Hugo C., M.D., Ph. D., director, Institute of Laboratory Medicine, Perth Amboy General Hospital, 530 New Brunswick Avenue, Perth Amboy, N.J 1189 Pumpian, Paul A., Director, Office of Legislative and Governmental Services, Food and I)rug Administration, U.S. Department of Health, Education, and Welfare, Washington, D.C.; accompanied Dr. James L. Goddard, Commissioner, FT)A 1219 Quinnell, Dr. Robert, director, medical relations, Pharmaceutical Manufacturers Association, Washington, D.C.; accompanied C. Joseph Stetler, president, PMA 1323 Slesser, Dr. A. E., associate director of quality control, Smith, Klein & French Laboi~atorics; accompanied C. Joseph Stetler, president, PMA 1323 Steeves, Robert F., director, legal division, American Pharmaceutical Association, Washington, D.C.; accompanied Dr. William S. Apple, executive director, APhA 1267 UI PAGENO="0004" Statement of-Continued Stetler, C. Joseph, president, Pharmaceutical Manufacturers Associa- P~e tion, Washington, D.C.; accompanied by Lloyd N. Cutler, special legal counsel; Dr. A. E. Slesser, associate director of quality control, Smith, Klein & French Laboratories; and Dr. Robert Quinnell, director, medical relations, Pharmaceutical Manufacturers Asso- ciation 1323 Taussig, Dr. Helen B., professor emecitus of ~ediatrics, Johns Hopkins University School of Medicine, Baltimore, Md 1492 Wittson, Dr. Cecil L., dean, University of Nebraska College of Medicine, 42d and Dewey Avenue, Omaha, Nebr 1211 HEARING DATES * Octobei 31 - 1149 Afternoon 1188 November 9 - -- 1219 November 15 1267 Afternoon 1295 November16 1317 Afternoon 1366 November28 1489 *The testimony for May 15 16 17 Tune 7 and 8 1967 appears In pt 1 of these hearings the testimony for 1ane 27, 28, 29, July 24, and Aug. 8, 10, 1967 appears In pt. 2 of these hearings; the testimony for Sept. 13, 14, 29, and Oct. 13, 1967, appears In pt. 3 of these hearings. IV CONTENTS PAGENO="0005" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY TUESDAY, OOT0BEB~ 31, 1967 U.S. SENATE, MONOPOLY SUBCOM~ITTSE OF THE SELECT CoMMn'ri~ ON S~u4 BUSINESS, Wa8hington, D.C. The subcommittee met, pursuant to recess, at 10: 15 a.m., in room 318, Old Senate Office Building, Senator Gaylord P. Nelson (chairman of the subcommittee) presiding. Present: Senators Nelson and Hatfield. Also present: Benjamin Gordon, staff economist; James H. Gross~ man, minority counsel; Susan H. Hewman, research assistant; and William B. Cherkasky, legislative director, staff of Senator Nelson. Senator NELSON. We will now open the hearings of the Monopoly Subcommittee of the Small Business Committee. Our witness is Mr. George Callahan, of the American Telephone & Telegraph Co., who will discuss medical commumcation systems and their potential application in transmitting drug information as well as other medical information. This will include methods of acquainting the practicing physicians with new drugs, their uses, limi~ tations, contraindications, side effects, and their relative efficacy. In addition, such a system could be used to alert physicians, pharmacists, and the public about dangerous, adulterated, or mislabeled drugs. As I understand it, Mr. Callahan, you propose to manage the presen~ tation of the various kinds of communications equipment and tech~ niques; is that correct? STATEMENT OP GEORGE E. CALLAHAN, SALES PRQ.JICTS MANAGER, AMERICAN TELEPHONE & TELEGRAPH CO., NEW YORK, N.Y. Mr. CALLAHAN. Yes, sir. Senator NELSON. Then at the appropriate time Dr. Meyer, from the University of Wisconsin, will present what he has to present and Dr. Nobel will make his presentation? Mr. O~LLAHAN. Yes, sir. Senator NELSON. Go ahead. Mr. CALLAHAN. Thank you, Mr. Chairman. The need for recognition of the role that communications can play in assisting the medical profession has never been greater.. The infor- matione~plosion that is taking place in medicine is like a deluge to the practitioner trying to keep abreast of his discipline. Still, he must often wait hours, even days, to get information he dearly needs. Meanwhile, the population continues to soar and the hospital popula- tion soars faster as programs like medicaid and medicare extend the opportunity for medical service to millions more. 1149 PAGENO="0006" 1150 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Nurses also are caught between a growing avalanche of paperwork and patient care Wiule the average nurse devotes 40 to 60 percent of her time to clerical work the number of nursing school graduates falls further and further behind the need The computer, with its incredible memory capacity and processing speeds, offers the only hope for man uging the flood of medical information now being generated. But only those with access to the computer will be able to use it and its communi- cations growing in capability apace of the computer, which will extend the i eal benefits of the computer age to medicine as to others These, I think, are two mighty tools, the computer and communications Each reinforces the value of the other The marriage of the computer, with its ability to digest, manipulate, store, sort, and articulate mountains of data over any distance, and communications, with its ability to move these mountains of data over any distance at any speed in practically every form using the Nation's communications system, is a truly awesome union Throughout the Nation, a great effort is underway to harness the c~pability of the computer and communications to medical obiectives In my report I will describe several examples of how this is being accomplished In addition to computer data communications, I have selected ex amples of how voice, video, and simple data systems are `dso being used In all, 12 `ictual systems will be described These cases include the transmission of electrocardiograms and other medical data by tele phone- Senator NELSON The purpose of this is to transfer an electrocardio gram that has been taken under the direction of a physician someplace to a cardiologist in some other part of the country for assistance and diagnosis ~ Is that the kind of thing you are talking about ~ Mr CALLAHAN Yes, sir, exactly Senator NEE SON So, a doctor in some remote part of the country at his small hospital who may think he needs assistance or advice in dia~ nosing an electrocardiogram that he has taken, can instantly transmit it and get an answer back ~ Mr CALLAHAN Yes, sir Senator NELSON Where is the transmission equipment going to be ~ Mr CALLAHAN Well, the transmission equipment may be in the doctor's own office. There is portable equipment which he may carry with him to use even in the patient's home and, of course, the receiving equipment would be located either in the cardiologist's office or in a medical center, where the services of a cardiologist or other heart specialist would be available to assist the local doctor Senator NELSON There is small portable transmitting equipment that a physician might have ~ Mr CALLAHAN Yes, sir, and we are going to demonstrate that equipment today, also In addition to discussing the transmission of electrocardiograms, we are going to explain and show an automatic hospital emergency alert ing system, and to describe the use of telephone in operating rooms, we are going to describe a computerized cancer treatment planning system, an automated medical laboratory and medical record system, PAGENO="0007" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1151 a computerized arrangement for taking medical `histories directly from the patient. Senator NELSON. Is this the technique of using a machine to inter- view the patient? Mr. CALLAHAN. Yes, sir. The patient `sits at a teletypewriter, which is connected to a computer at the distant location and the computer, which h'as been programed to take a `medical hist'ory, actually works directly with the pati'ent in the role that frequently cohsu'mes many hours of the doctor's `time. Senator NELSON. This can be done by just the machine and `the patient? Mr. CALLAHAN. Yes, sir. Senator NELSON. With the patient `being interviewed by the ma- chine; is that correct? Mr. CALLAHAN. That is right; yes, sir. We will also discuss applications of Telelecture and tape libraries and television in continuing medical education. We will discuss a concept for a drug information system. Senator NELSON. With regard to drug information, are you talking about some system of furnishing information by p'hone or otherwise to physicians who call a center of some kind? Mr. cALLAHAN. That would be part of it, sir. We will be describing a system which will `make it possible to get information out promptly to the physicians all over the United States when there are some urgent needs to recall a drug, for instance, or any other information, possibly about an adverse reaction which has been discovered and there is an urgen't need so th'a't all who might prescribe or `dispense that drug will know `about it quickly. Senator NELSON. In other words, so far as the drug information system is concerned, if a physician had prescribed a drug for a patient and suddenly the patient had a dramatic reaction to it, `the doctor could call the center, describe the drug and the reaction, and `have `an expert advise him immediately as to what to do about it? Mr. CALLAHAN. Yes, that could also be incorporated in the system. But primarily the system we will describe would be for providing information which has been developed in research or has been re- ported by physicians who have learned about some unknown side effect or other adverse reaction to the doctor through a central controlling point. `The system would permit dissemination of that information all over the country so that those who need to know about it, not only phy- sicians but druggists and others, would know about this and still would be protected from the general public learning about it. Senator NELSON. Is there a need for a source of information for the doctor about drugs of which this would only be part? Supposing the doctor wants `to know what type of drug to use for a certain kind of situation. Is there a value in having a bank or an information bank he can call and find out? Mr. CALLAHAN. Well, we're going to talk about that kind ~f a tape library in use at the University of Wisconsin, Mr. Chairman. Whether or not there is a need or a value for `that, being a communications man, PAGENO="0008" 1152 COMPETITIVE . PROBLEMS IN THE DRUG INDUSTRY I am not really qualified to answer, but I would be glad to ask one of the doctors with us today if they might wish to comment on that. Senator NELSON. Go ahead. Mr. OALLAHAN. Finally, we are going to demonstrate several new services which have promising potential for medical applications, spe cifloally telewriting, Touch-Tone telephones, and Picture Phone service, As I mentioned, since I am a communications man and not a medical man, I have asked the professional medical people who are familiar with several of the systems that we are going to describe here to discuss the medical aspects and to make any evaluatory comments Two of these gentlemen are here with us, and four others will speak to us by teleleoture, which is an amplified telephone call. I would like to introduce at this point Dr. Joel J. Nobel, director of the Graduate Pain ResearchFoundation in Philadelphia. Dr Nobel- Senator NELSON. Glad to see you, Doctor. Mr CALLAHAN (continuing) And Dr Thomas C Meyer, associate dean of the University of Wisconsin Medical Center Dr Meyer- Senator NELSON Dr Meyer Mr CALLAHAN (continuing) Addressing the committee by tele lecture will be Dr Cesar A Caceres of the U S Public Health Service in Washington, D.C.; Dr. John S. Laughlin of the Memorial Hospital for Cancer and Allied Diseases, New York; Dr. Hugo C. Pribor of Perth Amboy General Hospital in New Jersey; and Dr. Cecil L. Wrttson, of the University of Nebraska College of Medicine The communications equipment you see displayed will be used in live dem onstrations of several of the systems we shall discuss. In concluding, I will briefly discuss the function of communications in the developing concept of regional medical centers. If it pleases you, Mr. Chairman, I will proceed now to discuss the first communications system, which is the transmission of electro- cardiograms by telephone. * Senator NELSON. Go ahead. Mr. CALLAHAN. During the time it takes us to present this pro- gram, hundreds of persons in the United States will die of coronary occlusions. How many of these could have been saved if proper means of diagnosis were available is problematic, but if the answer turns out to be one or more, then surely these prompter means must be found. One of the most widely recognized tools for the diagnosis of heart ailments is the electrocardiogram, which is commonly referred to as an EKG. By taking note of the relative amplitudes, durations, shapes, and relationships in time of the wave forms of an EKG trac- ing, a cardiologist can tell much about the condition of a heart. Data-Phone data sets are now being used to transmit EKG tracings over the regular telephone network, thereby permitting maximum utilization to be made of qualified specialists and skilled personnel in analyzing EKG's A Data Phone data set is a telephone which en PAGENO="0009" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1153 ables machines to talk to machines and, of course, it can also be used as a regular telephone for verbal communications. (The Data-Phone sender illustration referred to follows:) Mr. CALLAHAN. There are three types of data sets that are used in the transmission of EKG's. The sender, which is normally used in a. small hospital or a nursing home, from where a number of EKG's would be sent regularly, is permanently installed like a telephone. There is a portable sending set that is used with a portable EKG * machine and can be used with almost any telephone, whether it be in a hospital, a doctor's office, or even in the patient's home. The Data-Phone receiver would be located in a cardiologist's office or a hospital or regional medical center. in a typical transmission of electrocardiograms over a telephone line, a doctor, technician, or hospital staff member prepares a patient for a regular EKG examination. But before the examination begins, a phone call is dialed to a heart specialist. Before the EKG is trans- mitted, certain personal data about the patient is provided verbally- his name, his age, his sex, height, and weight. The examination takes about 5 minutes with both the transmitting and receiving locations getting simultaneous recordings of the tracing. Once the electrocardiogram has been sent, the specialist can analyze anel discuss the interpretation with the sending location. Several medical centers are using Data-Phone service to provide EKG service to doctors and hospitals in their region. For instance, there are 29 hospitals and doctors' offices located in Nebraska, Iowa and South Dakota which send EKG's to Creighton University School of Medicine's cardiac laboratory in Omaha. PAGENO="0010" 1154 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY In the picture we have on the screen now, an EKG is being received at Oreighton University of a patient in a rural hospital, suffering from a severe heart disturbance. As a result, the patient was moved to a larger hospital, where he could receive proper treatment. (The Data-Phone receiver illustration referred to follows:) Mr. CALLAHAN. In his office in a small town in Iowa, a doctor reads a patient's electrocardiogram while, simultaneously, it is being sent over the ordinary telephone lines to Creighton's cardiac laboratory for interpretation. In this case, the portable data set is used by the local physician. (The illustration referred to follows:) PAGENO="0011" COMPETITIVE PROBLEMS IN ~THE DRUG, INt~USTRY 1155 Mr. CALLAHAN. In the third illustration, a technician sends the patient's EKG from the patient's bedside to the center. Illustrating the flexibility of this service, the director of the Creighton Cardiac Laboratory receives EKG tracings in his home. At night, electrocardiograms are sent to `hin~ i~i the absence of a staff cardiologist or for consultation. At this point, with the assistance of my associate, Mr. Richard Murray, we will demonstrate the transmission of an EKG, using a mechanical heart for a patient. We have the equipment over on this table. Now, at his office or home or at the patient's home, the physician h~s a portable EKG machine about the size of a tape recorder, and he also has a portable EKG Data-Phone set. He attaches the leads of the EKG machine to his patient. In this case, that is a mechanical heart we will use to be the patient. He then calls a cardiologist or medical center, using any telephone that happens to be convenient. Upon receiving an answer, he describes the case and gives the name, age, height, weight, and sex of his patient. He then places the telephone handset in the Data-Phone data set and both he and the receiving location switch the Data-Phone over to an EKG transmission mode from the voice mode. Now, he starts his EKG machine and simultaneously he and the doctor at the receiving location receive a tracing, an EKG tracing. Senator NELSON. So the cardiologist who is being consulted 500 miles away, or 200, or whatever, is receiving this electrocardiogram on his machine at the `same time that the local physician is receiving it on his machine? Mr. CALLAHAN. That is right; exactly, sir. Senator NELSON. Then you are going to tell us how he makes his diagnosis and responds back to the consulting physician? Mr. CALLAHAN. Yes, sir. Normally, this transmission would run 4 or 5 minutes, because there are quite a number of body leads, but we are going to end it here. We have sufficient tape to show what the doc- tors would have in their hands at each location. Then, depending on the circumstances, `they could either proceed with an immediate discussion, analysis, and interpretation. Or if it is a routine diagnosis, the cardiologist would call back and discuss his interpretation with the local physician back in his office. Senator NELSON. Now, the cardiologist is not on the telephone all this time, taking the electrocardiogram; is he? Mr. CALLAHAN. No, sir; the telephone handset is actually over `there in the Data-Phone data sep, which make's the connection between the EKG machine and the telephone network. By this means the signals can be transmitted `to the distant end. Senator NELSON. Then if the cardiologist determines from his exami- nation 9f the electrocardiogram that there is a serious matter here and he ought to discuss it with the physician who transmitted the informa- tion on his patient, what does he do? Mr. CALLAHAN. After he sends the EKG tracings, he then takes the handset- Senator NELSON. Who takes it? PAGENO="0012" 1156 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Mr. CALLAHAN. Both the local doctor and the specialist. They can tell when the tracing ends. Then both the receiving end `and the local doctor take the handsets, switch into a voice mode again, and discuss the case at hand before hanging up. Senator NELSON So they are connected all the time ~ Mr CALLAHAN Oh, yes Therefore, as you said, if there is an mdi cation of an immediate need, they can make that analysis and inter- pretation right away and take appropriate action. Senator NELSON. I see. Is this being done anyplace now? Mr. CALLAHAN. Yes. In addition to ~reighton, we know' `of at least 17 other locations in the United States where such groupings are in operation. Senator :NELSON. I know, but are they using this equipment? Mr CALLAHAN Oh, yes, sir This is now standard equipment which is available to all of the Bell telephone companies, and there are installations in various parts of the country-New York, New Jersey, a number of them-out in Wyoming and West Virginia and Illinois; and almost weekly, there are new groups. By groups I mean you have to start with a regional center or a cardiologist, w'ho then arranges the service with other local physicians in his area for whom he will do the specialist work. In this `communications system I have just described, the medical data is interpreted and analyzed by a specially trained person. It is ap- parent `that the' processing of millions of EKG's annually in the fight against heart disease imposes a tremendous burden on these specialists. A research program presently sponsored'by the U.S. Public Health Service is proving the feasibility of applying modern data communica- tions and data processing techniques to the rapid, accurate interpreta- tion of electrocardiograms and other medical signals by computer. A computer is being used to analyze electrocardiograms transmitted over telephone lines from cooperating hospitals and Government clinics to the U.S. `Public Health instrumentation field station. Senator NELSON. Are you saying. that the computer does the analysis without the intervention of a doctor ~ Mr CALLAHAN Yes Senator NELSON Will that not upset what the medical profession is always worried about, the physician patient relationship ~ Mr CALLAHAN Well, in this case, it is an analysis and interpreta- tion, but it is not telling the doctor what to do, it is telling him what the condition of the heart is, which can be, as is being effectively demonstrated by the U S Public Health Service, very dependably performed by the computer. Senator NELSON. Is that kind of analysis of an electrocardiogram by a computer being done in practice now anyplace? , Mr. CALLAHAN'. Yes. Senator NELSON. Where? Mr. CALLAHAN. We `will show you some interpretations which yes- terday were transmitted from the Hartford Hospital in Connecticut to the U.S. Public Health Service computer and the analysis and PAGENO="0013" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1157 interpretations which were sent back to Hartford Hospital. We will show you copies that we have here today. It is actually a working system. Senator NELsoN. Does it just interpret normal electrocardiograms, or does it also interpret or analyze disease situations? Mr. CALLAHAN. It does all of the analysis and interpretative work which would normally be performed on an EKG tracing by a spe- cialist. It actually removes the burden of that. interpretative work from the cardiologist or specialist. Senator NELsoN. What does the cardiologist do with this infor- mation? Does he use it? Mr. CALLAHAN. The hospital then acts upon that information just as if they had received the interpretation from a cardiologist. Senator Ih'rrIEu~. Do I understand that the hospital actually will receive a monitor signal to be seen on their encephalographs or cardiographs? Mr. CALLAHAN. Yes, Senator. This question really does get over into the field of medicine more that communications, and, if it pleases you, I would ask Dr. Meyer of the University of Wisconsin if he would care to make some com- ment to describe that more clearly.' Dr. MEYER. Thank you, Mr. Callahan. Senator NELSON. Dr. Meyer, of the University of Wisconsin, we are pleased to have you here today. Dr. MEYER. Thank you very much. With an electrocardiogram, there are a great number of measure- ments, and a great number of judgments that have to be made, that can be done mechanically. The actual judgment of what the implication of this is to the patient cannot be done by a computer. This has to be done by somebody who knows the history and what they have found on physical examination. It is a synthesis of all the data that can only be done by the physician. But the mechanical reading of the electro- cardiogram can quite easily be automated. Senator NELSON. I still do not understand it very well. . What has it done that the cardiologist does not have to do over again? The cardiologist gets the machine's mechanical analysis. How does that save the cardiologist from repeating himself, and what good does it do him? Dr. MEYER. It saves him a tremendous amount of time in doing all these basic measurements that have to be done. It gives him these measurements in a form in which he can interpret from them what this cardiogram means to the patient, knowing the background of the patient, knowing the symptoms and the physical signs of the patient. A cardiologist spends perhaps, oh, 8 to 10 minutes looking at a cardio- gram and taking these measurements and this data from this. Senator NELSON. You are talking about actually-. Dr. MEYER. Physically doing this. Senator NELSON. Measuring in terms of centimeters and so forth? `See complete prepared statement of Dr. Meyer, p. 1204, infra. PAGENO="0014" 1158 C~OMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Dr. MEYER. It is usually in millimeters, and if one wishes to do any research on this, if you have this accurately measured and put down into retrievable form, in due course, this is going to cause a tremendous advance in the reading of electrocardiograms. Senator NELSON. Well, it reduces his time-if you say it takes 10 to 15 minutes for the doctor to do the measurements and evaluate an ordinary one, how much time is this going to save him ~ Dr. MEYER. I would think it would save him 50 percent, 60 percent of the time he spends actually on that tracing, and he would then look at that tracing for 4 or 5 minutes instead of 8 to 10 minutes. Senator NELSON. Then a cardiologist in a medical center could, in effect, in servicing the whole surrounding countryside for many miles, could double the number of diagnoses that he could make per day ~ Is that what you `are saying ~ * Dr. MEvm. Yes, sir; or he would be free or freer to discuss with the referring physician the implication of this particular tracing to the patient, and he would then have the opportunity to talk and to teach the person who is transmitting the EKG. Mr. `CALLAHAN. Mr. Chairman, we also have Dr. Caceres of the U.S. Public Health Service, speaking from the Medical Systems De- velopment Laboratory here in Washington, will be describing `his pro- gram to us by Telelecture in a moment. He is on the line now. If you wish, I am sure Dr. Caceres will be able to give you more information on this subject. Senator NELSON. Proceed. Any time the questioning interferes with the mechanical presentation of something you planned here, just interrupt Senator Hatfield or me. Mr. CALlAHAN. Yes, sir. I believe the discussion as a result of your questions has brought out the additional comment that I was about to make. Therefore, I would like at this point to introduce to the committee, Dr. Cesar A. Caceres of the U.S. Public Health Service, who is directing this program. Dr. Caceres, are you on the line with us now STATEMENT OF DR. OESAR A. CACERES, CHIEF, MEDICAL SYSTEMS DEVELOPMENT LABORATORY, HEART DISEASE CONTROL PRO- GRAM, NATIONAL CENTER FOR CHRONIC DISEASE CONTROL, PUBLIC HEALTH SERVICE, U.S. DEPARTMENT OP HEALTH, EDUCATION, AND WELFARE, WASHINGTON, D.C. Dr. CACERES. Yes; I `am. Mr. CALLAHAN. Would you go `ahead and make your presentation? Dr. CACERES. In a very short time there will be more `human beings alive at one time than have populated the world since the beginning of man. The need to provide for this sudden huge population growth creates new medical problems. Entirely new concepts of medical analysis and treatment-not merely improvements `of existing ones-must be de- PAGENO="0015" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1159 veloped to maintain the quality of metheal care needed for the rapidly increasing mass of human beings. In routine physical examinations and in the diagnosis and treat- ment of heart disease, physicians in the United States spend part of their scarce time analyzing some 50 million electrocardiograms per year, for example, as one of the things they have to do. These tests and many more can now be done on a mass scale- quickly, reliably, a~ud inexpensively-~by automated systems using computers. Just as automation in a thousand industries has jumped up produc- tion while saving time and money and conserving manpower, it can now be used in medical care. To be of greatest effectiveness, automation requires extensive communication facilities. Automation is a giant step in the battle against heart disease, with its annual mortality in the United States alone of well over 700,000- against stroke, with an annual mortality of `approximately 200,000-~ against other killer `diseases of the cardiovascular and cardiopulmonary systems. The growing number of physical and laboratory tests required `by our increasing and aging population, the shortage of physicians and other health personnel, and our awareness of the need for raising the quality of medical practice for `all our citizens, force us to utilize the precision and rapidity of computers and communications systems. These systems can be tools in medical practice to help us keep up and not fall `behind in our vital battle to preserve the health of our people. Delegation of routine duties to automated systems is an ideal w'ay in which the physician can find more time for development and exer- cise of higher professional skills and to provide leadership to the medical teams required in today's concept of comprehensive health care. Since a computer system can increase the effective use of the physi- cian's time, he can concentrate more on hi's needs for further education to maintain awareness of day-by-day scientific advances. The Qomputer can, for example, relieve the heart station physician, the industrial physician, and the physician in group or hospital prac- tice, of the tedium of reviewing predominantly normal electrocardio- grams. The' physician-time thus `saved can be reflected in better care of patients. The digital computer in this way can help `solve today's problem of the shortage of medical manpower. To make this major advance, research and demonstrations have been c~onducted the past several years in the use of computers and `modern eiectronic systems to interpret electrocardiograms and other medical ~ignais. 8yste~1m Development Several steps were necessary to develop a functional system. First, a new electronic instrument was engineered to take an electrocardio- gram. The unit, which can be operated by any EKG technician, is called a data acquisition conso'le. Slide No. 1 shows an example of this. (T'he illustration referred to follows:) PAGENO="0016" 1160 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Dr. CAOERES. It is similar to conventional electrocardiograph ma- chines. The technician connects the leads in the usual manner. The~ console unit is essentially a tape recorder plus :a conventional EKG machine. PAGENO="0017" COMPETITIVE PROBLEMS IN~ `TUE DRUØ: INDUSTRY 1161 The data acquisition unit provides many unique features-in addi- tion to the standard tracing. Among these features is a system for coding to identify the EKG and to identify the patient and record cer- tain of his physical characteristics,, ~ueJa as age, sex, height, and weight. An automatic timer is provided to i~ter staiid~rd lengths of recording. A side panel provides for the electrocardiogram and additional physi- ological inputs such as electroencephalography, phonocardiography, and spirometry. The unit is operated in the same manner as ordinary EKG machines. The patient and lead-identification codes are recorded both on the visible tracing and on analog magnetic tape, which can serve as the input to the computer system. In the second slide, we see an example of a service being provided today. The signal or the magnetic tape recording of the electrocardio- gram or other signal can be fed through a telephone from Hartford by use of data-telephone systems, which sends the~signal to the com- puter center, however distant. The slide shows you the diagrammatic presentation of what we are doing. There, the individual in bed, in the out-patient department or the emergency ward, can have an elec- trocardiogram recorded by telephone. This can be sent to the Public Health Service field station in Washington, D.C., where the telephone data is received and, if necessary, re-recorded on analog magnetic tape. This tape is fed into an analog-to-digital converter. (The illustration referred to follows:) 81-280-68-pt. 4-2 PAGENO="0018" 1162 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Dr. CACERES. This device samples the continuous EKG waveform 500 times per second. Each sample is thus tagged so that a computer program can identify the peaks and valleys of the wave complex. A method to determine the amplitudes and durations of the P, Q, R, S, and T waves, as used in present-day electrocardiography, has been programed into many thousand individual instructions. Each lead is monitored for several seconds. Within 15 seconds after the computer has recognized the waveforms of all the leads, it asso- ciates the values and can print out an interpretation, such as the physician would receive from an electrocardiographer. Storage of the processed data for later retrieval for comparison, followup, or statistical analysis can also be made from the processed data stored on digital magnetic tape. Within a few seconds, results can be fully processed and returned to the physician or to the hospital. High-speed teletype machines and printers, which make out reports for delivery by wire, can also serve in situations where rapid screening of large numbers of people is necessary. With this routine processing system, the Public Health Service has established less than 1 percent error in the computer system. This is far less than any human system can possibly produce. There is a high agreement between cardiologists and computer interpretations. More- over the computer helps the physician avoid missing any significant data. The field trials conducted by the heart disease control program have been highly successful. Forty thousand electrocardiograms were proc- essed in the first year of routine operation, using only one-third of the system's capability. For example, computer-analyzed electrocardio- grams have been routinely employed for the past 2 years at the Hartford Hospital. Records are processed in the evening and are available routinely at the hospital the following morning. Two-step exercise tests and continuous recordings will be analyzed, as well. Our computer system is being programed for these, to take advantage of the information obtained through post-exercise electro- cardiography. In the future computer analysis programs will also utilize other physiological data, such as the respiratory test, blood vessel volume changes, brain waves, and heart sounds. The computer system of the future can make complete electrocardi- ography service available full time in nursing homes, where the EKG can be recorded on tape for transmission to a computer center or in a patient's home while he is on home care. With the increasing sophistication of telephone technology, signals can be transmitted through specialized analqg data-telephone trans- mitters. A small, portable electrocardiograph machine used with a telephone interface developed by Bell TClephone employs any conven- tional telephone in transmitting the cardiographic signal. By simply dialing a special number, the sender can transmit the signal to a pre- determined computer center for recording and analysis. We have successfully transmitted electrocardiograms from France to Washington, D.C., for computer analysis and immediate return, us- ing telephone, RCA communications, and satellite transmission. PAGENO="0019" COMPETITIVE PROBLEMS IN TUE DRUG INDUSTRY 1163 8~stem advantages * The public health or home care nurse can keep the hospital, health department, or heart center aware of the patient's condition. The increasing costs of medical service, the considerations raised by regional medical programs on heart, cancer, and stroke, make the role of computer systems even more essential in large hospitals, and in programs involving cooperative arrangements in a group of hospitals. It is also a practical way of coordinating outpatient services, nursing homes, and home care with medical centers. Computer analysis of medical signals will reduce the cost of individ- ual patient care, while at the same time increasing the number of patients who can be seen and effectively treated. If emergency situa- tions dictate, interpretations can be made rapidly and continuously. Computer analysis will speed the phy'sician's diagnostic procedures to shorten hospital time and to alleviate crowded conditions. The Medical Systems Development Laboratory of the U.S. Public Health Service has processed over 15,000 electrocardiograms for a National Institute of Health-sponsored study across the seas in Israel, Computer analysis is being used iij a spirometry study in Ohio and an- other in Wisconsin. There is routine use of telephone and teletype transmission of EKG's from several Washington clinics. Within a few short years, large populations of the United States can obtain electrocardiograms through computer analysis, making possible early detection and aiding in the prevention of heart disease, our major cause of death. Discussing our Nation's urgent medical needs, and the effect of computer systems in medical practice and in research, the Public Health Service's Surgeon General has said: However much we may do to build schools and train more physicians, there is an immediate urgency to use the available human resources in medicine to the highest degree for which they have been trained, The physician should delegate as many of his duties as possible and reserve his time for the exercise of his highest professional skills. Computers and telemetry help him achieve that goal. * Thank you very much. Mr. CALLAHAN. Thank you, Dr. Caceres. Would you now transmit to us by teletypewriter a sample of the report that you would send back to a hospital after a computer analysis and interpretation ~ Dr. CACERES. Fine. It should begin to arrive now. Mr. CALLAHAN. In the meantime, we have distributed to the com- mittee copies of the reports which you sent yesterday. Mr. Chairman, the Telelecture Service is two ways, so that using the microphone before you, if you care to ask questions of Dr. Oaceres, it is as if he were in the room before us. Senator NELSON. Thank you. Dr. Caceres, this is Senator Nelson. Also with us is Senator Hatfield of Oregon. Do I understand you are going to transmit an electrocardiogram- Mr. CALLAHAN. Yes. Senator NELSON (continuing). Which is going to come out on this teletypewriter here in this room? PAGENO="0020" 1164 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Mr. CALLAHAN. The teletypewriter is now answering the call, just as if it were located in the hospital Then we will receive a copy of the analysis and interpretation, just as it would be received in a hospital. (the illustration follows; printout appears on facing page.) Senator NELsoN How is the information put in the transmitter at your end, Dr. Caceres, so you can put it in the teletypewriter? Dr CACERES After the computer has pei formed the analysis, it puts out a punched paper tape that is used as the input to a teletype. It could be done electronically, by passing the punch paper tape. That will be done in the future. Mr. CALLAHAN. Dr. Ca'ceres, this is Mr. Callahan. Senator Nelson and Senator Hatfield were over at the teletypewriter and watched the printout come through. Do you have any additional comment you would like to make now? Dr. CAOERES. Only that we would like to have this sort of service made available assoon as possible, to hospitals, clinics, and physicians,. so it can help them improve the quality of patient care Senator NELSON. I could not hear all of your original statement, so this may be repetitious. As I understand it, a physician with the proper equipment can transmit an electrocardiogram by telephone into some center? Dr. CAGERES. Yes. Senator NELSON. And then the analysis of that electrocardiograni would be done by machine, interpreted by a cardiologist, and then sent back to the doctor in the same fashion that you have just sent it into this hearing room; is that right? PAGENO="0021" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1165 INSTRUMENTATION FIELD STATION HEART DISLASE CONTROL PROGRAM COMPUTER PROCESSED ELECTROCARDIOGRAM G. HSART STATION NAME DIAGNOSIS NUMBER 325560 TAPE 637 OPTION 081 DATE 2.~6~6,7 TIME O2~~18*~27 HEIGHT 72 WEIGHT 162 AGE 42 ~LE PEDS ~NKWOWN lIP tM8NO~i LEAD I II III AVR Lvi. AVF VI ~ VS V4 VS V6 PA .05 .06 .03 ~.O5 .05 .08 .03 .04 .00 .04 .05 .07 PA P~ .0~ .06 .07 .20 .05 .10 .04 .07 .00 .06 .07 .~6 PD 0* -.07 .00 .00 .OO-.06 .00 .00 .00 .00 .OO-.I0-.08 QA GD .03 .00 .00 .00 .02 .00 .00 .00 .03 .00 .02 .O~ GD RA .46 .38 .04 .05 .30 .28 .17 .48 .54 1,25 1.66 .80 MA RD .04 .03 .02 .02 .05 .05 .04 .05 .05 .05 .04 .04 RD SA .`.14 *.36 -.33 -.41 .00 -.29 -.64 -.75-1.25-1.12 -.56 -.23 SA SD .03 .04 .05 .03 .00 .03 .06 .05 .06 .04 .03 .03 SD R'A .00 .00 .00 .15 .00 .00 .00 .30 .00 .00 .00 .00 R'A RD .00 .00 .00 .03 .00 .00 .00 .00 .00 .00 .00 .00 P'D ST .10 .09 .12 .12 .22 .20 .12 .22 .12 .22 .22 07 St Sb -.dl -.05 .01 .02 -.04 -.04 .00 .01 .08 .06 .02 .02 STO STM .03 -.04 .00 -.01 .01 .00 .04 .16 .27 .24 .14 .06 STM ST~ .07 .00 .02 -.06 .01 .02 .07 .40 .75 .71 .38 .0! STE V~ .18 .15 .12 -.22 .06 .16 .10 .64 1.10 1.21 .74 .33 TA ID .23 .23 .24 .15 .28 TO T'A .00 -.08 .00 .00 .00 .00 .00 .00 .00 .00 .00 .03 T' A I'D. .00 .14 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 T'D ~R .12 .12 .13 .23 .11 .14 .12 .11 .00 .12 .11 .13 PR QRS .10 .07 .07 .08 .07 .08 .10 .13 .11 .09 .09 .09 Qfl$ DI .,34 .30 .34 .34 .30 .33 .30 .35 .37 .36 .36 .35 DI RATE 77 78 83 84 13 7.9 80 83 75 75 81 84 RATE CODE 2 4 4 2 3 3 4 SC 4 4 3 3 CAL 230 100 100 100 100 200 100 130 100 100 100 200 CAL AXIS IN P OHS T 0 8 S STO ST-TGRS-T DEGREES 54 -38 35 20 265 210 177 71 8311 088 AXISRANGE -13 TO -59 6171 TALL T WAVES V LEADS Dr. CACERES. With one exception; the analysis is all done by machine. The patient is at the recording end, the computer receives the data from the patient, and the answer goes back to the physician request- ing it without ever having gone through a cardiologist's analysis. The physician cardiologist caring for the patient checks it before applying the results but is relieved of routine, repetitive procedures. Senator NELSON. Is the receiving physician a cardiologist? Dr. CACERES. The receiving physician need not be a cardiologist. For physicians who are not cardiologists, we are preparing a short pro- grain. At the end of the report you see, the computer will give him a statement to the effect that "this electrocardiogram is abnormal, fur- ther consultation is suggested," or that the tracing is normal. These statements would indicate to the physician whether he should get a eardiologist. In other words, we are developing programs that will be suitable for different types of practitioners. We are aware that certain types of practitioners, because of their practices, should not be expert cardi- ologists but should be expert in their own field. So we will have phrase. ology for them to let them take advantage of this system. * LEFT AXIS DLVIATLOH * CONSIDER V4YPERMALEMZA OR POSTERIOR WALL ISCHEMIA PAGENO="0022" 1166 COMPETITIVE PROBLEMS IN TIlE DRUG INDUSTRY Senator NELSON. So if the sending physician is a cardiologist and he has this patient there, he gets this mechanical interpretation back. Dr. CAOERES. Yes. Senator NELSON. Then he reads this mechanical analysis and makes his interpretation; is that correct? Dr. CACERES. That is correct. Senator NELSON. What is the benefit to the cardiologist of follow- ing this system rather than simply looking at the electrocardiogram tape as it comes off the machine? Dr. CACERES. At the present time, there are insufficient cardiologists to read the growing number of necessary electrocardiograms. Several hospitals in large centers find it impossible to obtain the services of cardiologists for routine reading of electrocardiograms. In the Hart- ford Hospital, for example, physicians have studied their speed in reading electrocardiograms with and without computer help. They found that the computer multiplies the quantity of work they do five times, which means that in reading electrocardiograms one cardiologist can do the work of five. Access to the computer system effectively mul- tiplies the professional manpower resources available. What we en- vision would be the cardiologist in his heart center reading a great number of tracings, say five times more than he ordinarily would, and with greater precision. In many other areas we are concerned with the problem of periodic examinations of people who must have electrocardiograms for such things as insurance examinations. These come to the cardiologist. It would be useful in these centers to have this type of work prescreened by a machine system. One of the problems in the delivery of health systems to heart pa- tients throughout the country is that there are an insufficient number of qualified readers of electrocardiograms. We need to train many more or to provide machine assistance. The latter is the easiest solution. Senator NELSON. I understand you to say that a cardiologist using this computer system could, in fact, do the work of five other cardiolo- gists daily? Dr. CACEI~ES. That is true. Those were the results of a study done in Hartford Hospital. Senator NELSON. Thank you, Doctor. Did you have any questions, Senator Hatfield? Senator HATFIELD. No. Mr. CALLAHAN. Thank you, Dr. Caceres. We appreciate your assist- ance today very much. Dr. CACERES. Thank you. Senator NELSON. Thank you, Dr. Caceres. The committee appreci- ates very much the contribution of your time. Mr. CALLAHAN. A somewhat different use will be made of telephonic transmission of EKG's at Salem Memorial Hospital, in Salem, Oreg.. Used in conjunction with physiological monitoring in the intensive- care section of the hospital, it will enable the hospital to present cardio- graphic data to a heart specialist at any time of the day or night. The time saved when an emergency strikes during periods ~vhen a cardi- ologist is not on duty can make the difference between life and death. The Salem Memorial Hospital system of EKG transmission is not for diagnostic use, as we have been discussing so far today, but rather PAGENO="0023" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1167 for determining the lifesaving steps that should be taken in aa emergency that occurs, let us say, in the middle of the night. immediate indication of a patient's condition is highly important.. If the doctor is at his home or office, precious time may be lost while he is driving to the hospital to prescribe the proper treatment. With the system as Salem Memorial is going to use it, when a patient's heart function either exceeds or falls below predetermined limits, an alarm system notifies the nurse. The nurse will call the doctor whose cardiac patient i.s experiencing difficulty, give oral details of the patient's con~, dition, and then transmit the patient's EKG via a Data-Phone arrangement. With this information, the doctor is able to determine what s'teps~ need to be taken immediately in treating the patient before he leaves~ for the hospital. We do not have anyone from Salem Memorial Hospital to partici- pate here today, but Dr. Meyer has indicated that if you have any questions wbout the application of this kind of a system, he would~ be glad to discuss them with you. Senator HATFIELD. I would like to comment that this has created a~ great deal of excitement out in my hometown. This hospital to which you refer has not only been pioneering in this field, but I think is the' first in our State, at least, to offer full helicopter ambulance service,, with a heliport on top of the hospital. When I was talking to Mr. Sukalak at Salem Memorial Hospital last time I was home, he indicated to me there was work well along on the heartline system about the development of a fully portable system,, usable wherever telephone service would be available. Could you telL me a little bit about how far along this particular development is? Mr. `CALLAHAN. Yes, sir. What he was referring to, of course, was~ a portable data-receiving set. The set which we have been demon- strating here is one which is used for the transmission and sending.. Work is being undertaken now to look at adapting the EKG Data-~ Phone receiving set for portable use. I cannot give you any indication at this time as to just exactly `how far along `that work has proceeded or What the possible availability might be. Sena'tor HATFIELD. He also ment'oned about the possibility of using the Data-Phone service to eliminate inventory or vastly reduce inven- tory problems as a service to hospitals. Would you care to comment on `that, please? Mr. OALLAHAN. I am not sure, Senator, I understand what he has- in mind. Senator HATFIELD. Well, areas of labor saving that would be in-. volved would be as it relates t'o the operation of hospital delays `and back-order delays due to mistakes, eliminates the need for extensive- warehouse services, and things of this type. Mr. CALLAHAN. Oh, yes. He was referring to administrative appli- cations of data transmission. For instance, in the ordering of supplies,. there are a number of systems in operation around the United States- now wherein the hospital supply company has installed Data-Phone service so that the hospitals which t'hey service can send their orders~ directly and be received on a business machine for prompt processing. By doing it in this way, they eliminate the always-present danger- of error being inserted by human beings copying and recopying ma- PAGENO="0024" 1168 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY terial. But not only that, they find thatin many cases it enables them to provide same-day service or service the following morning on orders received which, of course, makes it possible for the hospitals to vastly reduce the amount of drugs, the amount of equipment that they have to have on hand, because they have the assurance that they can order it today and have it tomorrow. Senator HATFIELD. As you know, one of the basic problems we face in the whole health field is the problem of rising costs, particularly as it involves hospital care. I think it is very significant in this poten- tial that you describe here for hospital administration, could repre- sent a significant reduction in costs of operation for hospitals. Is this not true? Mr. OALLAHAN. Yes, sir; and with the introduction of Touch-Tone telephone service which we will be desclibrng later on, that cost ieduc tion will be even further developed, because-well, a typical price of a Touch Tone telephone card dialer such as I have here is around $4.50 a month. It has the capability of transmitting ordering informa- tion directly to the computer in the way that the Salem people are planning, and replaces an arrangement that presently costs nearly $40 a month in total. Of course, at the same time, it serves the purpose of a regular telephone also. So there is real potential here for reducing hospital administrative costs. Senator HATFIELD. Thank you, Mr. Chairman. Senator NELSON. Go ahead. Mr CALLAHAN In pursuing the cardiac emergency one more step, I would like to raise the question of what happens when a cardiac arrest ocuurs, when a heart stops Today thousands are being restored to life through cardiopulmonary resuscitation, an emergency measure in which a stopped heart is brought back to life by rhythmic pressure on the chest. These hearts have been temporarily stilled by strokes, heart attacks, drug reactions, or accidents. According to the American He'trt Association Committee on Ex ternal Cardiopulmonary Resuscitation, the tragedy is that for every life saved by this technique, probably a dozen are lost because it is not used Resuscitation is possible in many of the over 500,000 heart disease deaths, the many thousand heart arrests in surgery, and the many thousands of deaths from drowning, suffocation, electric shocks, and other accidents Tests show that salvage from these deaths can perhaps average more than 100,000 lives per year The key difficulty is the need to reach the heart victim within 2 minutes, that is, before the brain dies or is irreparably damaged for lack of oxygen. When an attack occurs in a hospital, the staff can only respond if they are aware of the situation.. How do you notify everyone who needs to know-doctors, nurses, technicians spread throughout a large complex? Obviously proper communications are vital, for even within a hospital, it is estimated that 30 percent of patients having attacks die. The problem is compounded by the fact that if a patient is not in the intensive-care ward, staff coordination becomes even more criti- cal, since vital equipment is located in other sections of the hospital. It is therefore necessary to have some form of communications that will alert emergency team members wherever they may be in the medi PAGENO="0025" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1169 cal complex; also, to advise other personnel involved in the preparation of operating rooms and vital equipment. What we would like to show you now is a command alert telephone system that was specially designed to meet this need in any hospital with dial switching telephone service. The backbone of this system is dial switching equipment that provides the regular telephone service in a hospital. Let me briefly describe the actions that ensue in a matter of seconds. A patient in room 324 has suffered a cardiac arrest. A nurse can ini- tiate an alert from any dial telephone in the hospital-the one right next to the patient's bed, for instance. There is no special telephone needed for this purpose. The nurse simply dials a special number that has been designated for this particular purpose. Let's say 1212 is this emergency number. The telephone is immediately connected to an an- nouncement machine and a tone is returned to the telephone which tells the nurse, we are ready for message. The nurse now simply says, "Code Blue, Room 324," and hangs up. Now, this is a typical code used to indicate an emergency condition in a hospital, "Code Blue." This has only taken the nurse a few seconds and it is all the action that is required by her to bring the patient the support she needs. She now can devote her full attention to the patient. While the nurse is recording the message, the switching equipment is ringing preselected hospital telephones with a distinctive ringing signal. These can be any telephones associated with the hospital system and can vary according to the established emergency procedures. Any- one answering these telephones will hear the alert message, "Code Blue, Room 324." In the event the telephone is busy at the time of the alert, spurts of tone will be heard on the line signaling that an emergency condition exists. As soon as the person hangs up the telephone, it will ring with the distinctive signal. Upon answering, they will get the alarm, "Code Blue, Room 324." At the same time, the dial switching equipment can also seize control of the paging system, stop ~ll public address announcements, and broadèast the alert message. Also simultaneously, signaling devices such as pocket radios, horns, bells, or lights can be activated. Any members of the resuscitation team seeing or hearing the signal will dial a pre- determined number from any telephone in the hospital to receive the alert message. The emergency code would activate emergencyvehicles,. shutting off the 110-volt power supply that charges the self-contained batteries and activating the electronic apparatus contained in the cart, such as electrocardiographic and electroencephalographic equipment. This places all the equipment in a ready condition for service the instant the cart reaches the patient. An elevator ~s a key factor in moving the resuscitation equipment to the patient and can also be activated by the dial equipment. Upon receiving a signal, the elevator will close its doors and move automati- cally to the floor where the resuscitation cart or equipment is stored. On arrival, the doors will open and the electric power will be cut off to prevent the car's use by anyone else during the emergency. This cuts vital seconds off the time needed to move the equipment to the patient. The elevator will then be waiting to move the patient to the operating room. PAGENO="0026" 1170 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY All of this has taken place immediately and automatically as a result of the nurse making a simple telephone call of only a few seconds' duration. During this period, the system can also be monitored by the switch- board attendant, although no `action has been required on her part to coordinate any part of the procedure. The system is not limited to cardiopulmonary emergencies. A separate code could be established for an obstetrical emergency-say, 3333 instead of 1212, and a different set of hospital telephones would be activated. Likewise, surgical or civil emergencies could have their own separate codes. We have invited Dr. Joel J. Nobel, director of the Graduate Pain Research Foundation in Philadelphia, who has done considerable work in conjunction with this system, to describe the impact of the command telephone system on hospital emergency service. Dr. Nobel is with us today and I would like to present him at this `time. Senator NELSON. Dr. Nobel, the committee appreciates your coming here today. Would you furnish the reporter your full name and identification for the record? STATEMENT OP DR. JOEL J. NOBEL, DIRECTOR, GRADUATE PAIN RESEARCH FOUNDATION, PHILADELPHIA, PA. Dr. NOBEL. Thank you, Mr. Chairman. It is my privilege. I am Joel J. Nobel, director of the Graduate Pain Research Foun- ~dation in Philadelphia. Senator NELSON. Go ahead, Dr. Nobel. Dr. NOBEL. Thank you. The limiting factor in the survival of many patients requiring emergency medical care within the hospital or on arrival in the ~emergency room is the time required to mobilize emergency care resources. The patient with cardiac arrest is irretrievable if resuscita- `tion is not begun within a few seconds or minutes and the accident victim may die if emergency surgery is delayed. Despite the current tendency to concentrate more critically ill pa- `tients in specialized intensive or coronary care units, emergencies are ~tnd will remain a hospitaiwide phenomena. Our capability for pre- dieting which patient is a likely candidate for emergency care is still rather limited. From the staffing viewpoint, it is impossible to have a three or four person team with no other duties, standing by 24 hours a day awaiting an emergency. Team members normally have routine hospital duties which they interrupt for emergencies. Team members, like emergencies themselves, can therefore be in any location. The goal of emergency mobilization is, of course, to deliver a competent, well-equipped team to the patient's bedside as quickly as possible. The time required to bring personnel and equipment to the patient is directly related to delays in communications, elevators, and characteristics of equipment and the physical plant of the hos- pital. PAGENO="0027" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1171 In large or high-rise urban hospitals, it may require from 3 to 10 minutes to get personnel and equipment to the bedside. Rarely is emer- gency surgery underway in less than 20 or 25 minutes once a patient has reached the emergency room. The two greatest problems are com- munications and elevator delays. Over the past 3 years we have conducted time motion studies of emergency car and concluded that any mobilization system which relies on an entirely human-operated communications sequence is unsatisfactory. If, foi~ example, a switchboard operator must individually call and awaken four or five people for a night emergency, we can expect un- acceptable time delays. Frequently the room number of the emergency location is given in error, either because of the nurse reporting the ~emergency or, much more frequently, because the operator panics, confuses the message, and mispages the location. This error, due to the operator, actually occurs about 12 percent of the time. Following a study of many human and technical factors in emergency care mobilization, we identified the problem areas and designed a system which, we feel, will add a new measure of effectiveness to ~ernergency care w~thin the hospital. We are developing a hospital emergency command system with the support of the Research and Demonstration Grants Branch, Division of Hospital and Medical Facilities of the U.S. Public Health Service. ~The hospital emergency command system incorporates what was pre- viously described, the command system communications system, with one of its subsystems or components. The total system will permit simultaneous and immediate mobilization of communications, per- *sonnel, equipment, and elevators by a single initiating call from any hospital dial telephone. (The hospital emergency command system illustration referred to ~follows:) HOSPITAL EMERGENCY COMMAND SYSTEM SIMPL~F~ED BLOCK DIAGRAM PAGENO="0028" 1172 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Dr. NOBEL. Furthermore, it provides a selective mobilization response to the varying requirements of cardioptilmonary arrest, or emergency surgery, or obstetrical emergencies or civil disasters causing a large number of injured persons. ~ ~ What happens at the present time? An accident ward nurse must make from five to 10 individual tele- phone calls to `set up emergency surgery at the very time her assistance is most needed at `the patient's `side. Usually the operating room, admis- sions, anesthesia, hematology, blood bank, surgical resident, and intern staff physician must all be notified A nurse at the bedside of a patient requiring resuscitation must wait from 10 to 80 seconds for the switch- board operator to respond to her ~need for help with a busy daytime switchboard This is the very time when she must provide physiological support of the patient. She has `to breathe for the patient and perform other immediately necessary duties Communications is critical, but physiological support of the patient is `even `more desperate.' When the operator d'oes respond, she often mispages the room loca- tion Once knowing where to go, the emergency team members must then wait a lengthy period for an elevator Elevator delays in hos pitals-I am sure you have experienced these delays-~can be astro- nomical in terms of timing for emergency mobilization With the hospital emergency command system under development, the nurse at the bedside picks up the `telephone, dials a `specific number, for example 1912 Keep in mind again, this is the very time the critical support of the patient is required and we do not want the nurse pre occupied with administrative problems in communications `She say~s "Code Blue, Room 705" and h'angs up. There is no switch- `board operator l'a~ period. The nurses' voice is recorded. At the same time, a series of vital telephones ring simultaneously with a very dis tinct ring. Vital phones might inclnde heart station, `anesthesia, and night on-call rooms. If `the phone is in use, `there is a priority interrupt and the message is `still transmitted. Th'e system also transmits the message over the public address `system `and triggers pocket p'age re- *ceivers. The command system also activities `a special emergency cart. This mobile emergency life support system was developed by us ~ years ago to decrease the time required for critical medical emergency procedures, `to reduce the number of persons required on the team,. to eliminate many common errors in technique, and bec'ause of `self- contained power `and oxygen to `sustain the moribund patient in transit' to `the operating room or intensive care unit. Briefly, it reduces the time required for critical procedures tenfold `and reduces the size of the `team by half It is now in general use throughout the United States, in Europe and Vietnam (The mobile emergency life support system illustration referred to appears on facing page) Dr. NOBEL. The hospital emergency command system transmits an electrical `signal to this emergency cart which energizes its elapsed time meter and `electronic equipment. The elapsed time meter indicates, of course, the time `since `the initial `aler'ting telephon'e call and thus pro- vides `a continuous timing reference to the team. How long has it `been since the original event occurred, since `there was transmission of `the `message, what time has gone by, should we PAGENO="0029" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1173 give `this drug or `another drug which has to be ~`iven'at specific thn~ intervals? The electronic equipment preheats in transit to the bedside so no time is wasted with instrument warmup `and stabilization. Another elec- trical impulse is sent to the elevator `sh'aftway, to Override the auto- matic elevator programer which shifts to emergency alert status. Logic circuits select the best elevator in the bank, based on proximity and other factors, send it to the floor and lock it where the emergency cart is located. The elevator unlocks only when the cart is in its cab because of an electronic command interlock between the cart and elevator. Other elevators respond to pocket size command transmitters carrIed at `all `times by emergency `team members. For emergency surgical cases `brought to the accident ward, a dif- ferent dialing number is used-for example, automobile `accideiits, poisoning cases, and so forth. Various vital telephones are used to call different categories of personnel, while `the elevator goes to the `appro- priate floor `to receive `the patient. For large mul'tipatient accidenth or disasters, the system also links to telephones outside `the hospital `and can thus summOn physicians and supporting personnel from their homes `and offices. The separate events which take place when the hospital emergency command system is triggered by an alerting telephone call have taken some minutes to describe. They are actually simultaneous electrical events which take only several seconds. We have, in effect, substituted simple electrical circuits to provide communications and mobilization in parallel rather than relying on humans to act swiftly and consist- ently in series. This is not an esoteric research project. The significance of the hos- pital emergency command system i~ simply that it meets a very real need in a very practical manner. Because it utilizes the existing tele- PAGENO="0030" 1174 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY communications equipment and lines within the hospital and requires relatively minor changes in elevator programers, it will be econom- ically feasible for most existing hospitals over 30 beds. The cost is even lower when planned for new construction. In addition to the specific technical advantages of speed, simplicity, and reliability, the hospital emergency command system requires the hospital to reevaluate, rethink, and refine its internal organization for emergency care. This in turn will tend to upgrade personnel train- ing, professional competence, equipment maintenance, and other im- portant factors. When a system like this is brought into a hospital, it has a number of spinoff factors that raise the level of competence for handling emergencies within that hospital. In the ultimate analysis, however, the true worth of the hospital emergency command system must be measured in terms of decreased patient mortality and the increased number of long-term survivors who return to a meaningful and productive life. We shall soon begin a 2-year evaluation phase to determine the change in survival rates so that we have specific data. We feel that the hospital emergency command system will have a significant effect on patient mortality. It is our contention that there should be no such thing. as emergency care in a hospital. Emergencies within a hospital are expected and should merely evoke an effective routine response. Senator NELSON. Thank you, Dr. Nobel. What is the cost of installing such a system in a hospital? Mr. CALLAHAN. Mr. Chairman, I think that I can estimate that for you. In a hospital of 600 to 800 rooms, the cost would be about $150 a month, and for each additional alert arrangement, another $10, so~ that if you had two different alerting arrangements it would be around ~160, and so forth. Senator NELSON. You mean that in a hospital that has already been. built with the elevators operating on their own system, this system can be brought in at a cost of $150 a month? Dr. NOBEL. We should clarify this a bit. The communications phase can be brought in at that cost. There will be a cost, depending on the number of elevator banks used and installation costs for repro- graming, in the range of $10,000. Now, in the overview for hospital costs, $10,000 is not terribly significant for a refined emergency call system, and a monthly charge of $150 for a large medical center, which may have a telephone bill in the $20,000 range, does not appear to be very significant. Senator NELSON. Well, so that it is clear for the record, you have certain equipment, emergency equipment, for example, that is elec- tronically activated upon tht~ code call of the nurse in the room in which the emergency occurs. Then when that piece of equipment is brought onto the elevator, the elevator will not move until activated by the electronic relationship between that piece of equipment and the elevator. Can you take the hospital's emergency equipment and add this telecommunications equipment to it? Dr. NOBEL. That is correct. PAGENO="0031" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1175 Aètually, the electronic interlock on the resuscitation or emergency cart is a simple add-on black box. In effect, the cart says to the elevator electronically, I am here, and the elevator responds and says, OK, we will go. Senator NELSON. Are you saying, then, that if a hospital of 500 or 600 beds wished to install the systeth that you have described here, they could install the basic system for about $10,000? Dr. NOBEL. That is correct, sir. Senator NELSON. And then the cost of servicing or maintaining the system is about $150 a month? Dr. NOBEL. That is correct. Senator NELSON. How many hospitals in the country have installed this kind of a system? Dr. NOBEL. We should tell you that the system is in development and that we are currently installing three prototype test systems for long-term evaluations. We do not feel that we will go ahead with general availability until we have specific patient mortality data that shows how justifiable the system is. Now, looking forward, it will be a relatively short time before we have this data and we hope that the systems will be generally available throughout the couiltry within the next year, or two, Senator NELSON. Has this equipment been tested yet in an operating hospital? Dr. NOBEL. Not at present. We have operating laboratory models, we `have a computer simulation of the system underway, but the first full scale operating system will not be operating for severa months yet. Se~iator NELSON. Do I understand you to say that you are installing this system in three hospitals; pilot tests, so to speak? Dr. NOBEL. That is correct. Senator NELSON. Are you free to say what three hospitals they are? Dr. NOBEL. Yes; the hospitals are all located in the Philadelphia area-Jefferson Medical `College Hospital, Hahnemann Medical Col- lege Hospital, and Pennsylvania Hospital. These three hospitals were chosen because they represent a very broad spectrum of different problems in `architecture, elevators, communications, and so on. The system is quite adaptable. For example, if you have only manu- ally operated elevators, we go right into their telephone and speak to the elevator operator who makes an appropriate response. In the older hospitals with manually operated elevators, there is no requirement for a $10,000 change in elevator programers. The cost is actually lower. Senator NELSON. But I did understand you to say that to institute the whole `system, not just the elevator part, you are talking about an investment of $10,000? Dr. NOBEL. Assuming that we `are going to use `automatic elevators. If we are not going to use automatic elevators, then there is no $10,000 additional cost. Senator NELSON. Just the $150 monthly maintenance; is that it? Dr. NOBEL. Just the monthly cost; yes, sir. Senator NELSON. Then how long do you expect to test this system to find `out whether or not you are prepared to make it available to any hospital that wants it? PAGENO="0032" 1176 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Dr. NOBEL. We will complete a preliminary evaluation within 1 year and the actual study is a 3-year one, involving installation of systems and total evaluation. But within the first year of operation, we will have a very clear idea as to how justified we are in proceeding ahead on `a broad basis. Senator NELSON. Well, what is the main factor in consideration? If you cut the time in half, that is factor enough; is it not ~ Dr. NOBEL. We will do considerably better than cutting the time in half. We estimBte, for example, at one of the hospitals that we can reduce mobilization time from about 9 to 11/2 minutes. Now, this is certainly significant. However, even though the hospital emergency command system is desirable in terms of its fixed organization and its routinization of response, w~ have to show decreased mortality rates_increased sur- vival rates. In the ultimate analysis, this is what is important to us. These statistics take a little more time to gather. Senator NELSON. Well, I guess the doctors would have to decide that. I would assume that if you cut the time by 7 or 8 or 9 minutes in any emergency, you are going to find that sometime you save a life. I guess I could assert that. Dr. NOBEL. We are convinced of this, but we want to see it in numbers. Senator NELSON. Thank you very much for your very interesting presentation. We appreciate it. Dr. NOBEL. Thank you, Mr. Chairman. Mr. CALLAHAN. Thank you, Dr. Nobel. Mr. Chairman, the systems we have described so far illustrate some of the ways that modern communications can help the medical pro- fession fight heart disease more effectively. In New York, at the Memorial Hospital for Cancer and Allied Dis- eases, a relatively simple communication system permits computer planning of radiation treatment for other hospitals. Furthering the concept of regional medical `programs, Memorial Hospital, serving as one of th~ regional cancer centers, ha~ already extended the benefits of its unique, highly sensitive, and accurate treat- ment planning facilities to two other institutions, one located in the Greater New York metropolitan area and the other in San Francisco. The hospital plans to make this program available to other hospitals nationwide. Communication between the collaborating hospital and Memorial Hospital, which is a clinical unit of Memorial Sloan-Kettering Cancer Center, is via teletypewriter using the telephone network and a Data- Phone data `set. Patient medical data will be sent to Memorial Hospital via the teletypewriter from the participating hospital, describing cer- tain data about the patient contour, the treatment parameters such as the size of the field to be irradiated, the number of portals through which the radiation will be given, the angles at which X-rays will be PAGENO="0033" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1177 delivered, and the kind of radiation equipment for which the com- putation is to be made. - The data is received at Sloan-Kettering, both in printed form and recorded on punched paper tape. Since the teletypewriter is also equipped with the Data-Phone, the verbal communications can also be used when needed. The tape is fed into the computer, which is programed to prepare a complete treat- ment plan. The plan is then transmitted back to the hospital via tele- typewriter. Total computer time for the complete treatment plan runs between 5 and 10 minutes, according to the complexities of the com- putations involved. Representatives of Memorial Hospital state that before the advent of computers, radiation treatment planning was performed to the best of the ability of the professional making the computations. However, the plans had to be much more grossly calculated, because the time re- quired for highly refined figures would have delayed the treatment of the patient. But even with computer computation, it previously took approximately 4 days for hospitals outside of the New York area to avail themselves of this service by mailing or bringing pertinent pa- tient data to Memorial Hospital. The two hospitals who have already availed themselves of the pro- gram are St. Luke's Hospital in New York, and Mount Zion Hospital in San Francisco. This program will make Memorial Hospital's advanced comput- erized system and technical staff available to other hospitals, avoid- ing costly duplication of staff and equipment. Thus Memorial Hos- pital, functioning as a regional cancer center, will service institutions across the country. It is planned that this service will include guiding and advising collaborating hospitals via education and staff exchange programs. As more and more of such regional cancer centers are developed, technical information will be transmitted from one center to another, thus assuring every patient accurate quality radiation treatment whenever and wherever indicated. The radiation center service will make possible the practical and rapid diagnosis and determination of treatment planning that is so vital to the treatment of cancer patients by radiation. I have asked Dr. John Laughlin, Attending Physicist at Memorial Hospital for Cancer and Allied Diseases, to describe for us the kind of treatment the computer prescribed. Dr. Laughlin has been asso- ciated with Memorial Hospital for Cancer and Allied Diseases for many years. To augment his Telelecture communication, Dr. Laughlin will also use some telewriting. Telewriting with Data-Phone data communication service makes it possible for a speaker to supplement his telephone presentation with handwritten notes or drawings pro- jected on to a screen. (The telewriting illustration performed in New York follows:) 81-280-68-pt. 4-3 PAGENO="0034" 1178 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Mr CAM AHAN The notes or diagrams he makes at his study or laboratory are enlarged on the screen here as he writes Thus, a new capability will be added to graduate study or training programs through the application of a visual dimension to basic telelecture service (The telewriting illustr'ition received in the caucus room in Washington appears on facing page.) Mr CALLAHAN We would like now to use both these commurnca tions media to bring you Dr L'uighlin's presentation directly from New York City. Senator NELSON. Go ahead. Mr CAl LAHAN Dr Laughlin ~ STAT~EMENT OF DR JOHN H LAUGHLIN, ATTENDING PHYSICIST~ MEMORIAL HOSPITAL FOR CANCER & ALLTh~D' DISEASES, NZW YORK, N Y Dr LAUGHLIN Yes Mr. CALLAHAN. We are ready for your presentation. Dr. LAUGHLIN. Very well. This particular example pertains to the application of both corn- puters as well as teletype transmission in the field of radiation therapy. One of the major problems in radiation therapy is the use of radiation sources to treat cancer lesions inside the body. A typical external radiation source, in this particular case one of our linear accelerator X ray machines, is used to irradiate the patient externally from outside. Now, one of the major problems facing the radiation therapist is how to localize the radiation dose inside the lesion and decrease the PAGENO="0035" COMPETITIVE PRO~3LEMS IN THE DRUG INDUSTRY 1179 radiation damage to the surrounding healthy tissues on the way to the lesion. In order to approach this problem comprehensively, taking into full consideration the structure of the body, it has been necessary to go to automatic computers. The treatment planning procedure includes taking the patient's contour in relation to the size and position of the cancer and construct- ing dose curves which describe the extent to which the X-ray beams is attenuated as it passes through various tissues. If it is planned to direct the radiation beam from several different angles, the amount of radia- tion delivered to any given tissue must be codculated accordingly. Now, another approach to the same situation, again assuming that we have a lesion in the lung, would be the actual physical implantation of radioactive sources within the patient. This would involve a sur- gical procedure by the radiation therapist in which radioactive needles are physically implanted in the tumor. If this were done according to any particular pattern, a specific distribution of dose could be achieved, But just as in the previous case where external radiation was employed, it is particularly important that this patient receive the actual distribution of the radiation o~ dose as planned by the therapist. These are the two methods which are generally employed, both of which require accurate computation. We have indicated the objective of what we call realistic treatment planning. This is essentially with the necessity of taking into consider- ation the inhomogeneous structure of the body. PAGENO="0036" 1180 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Programs have also been designed to determine at which angles to aim the beam to give the optimum treatment to the tumor and the least radiation to normal tissues. The major result of the program is a three-dimensional distribution of dose in the patient, produced by the radiation fields as specified by the therapist. With the use of computers in the treatment planning, not only can more information be obtained in a short period of time, but the infor- mation is highly refined, so that the radiation therapist can know precisely how much radiation he will deliver to any specific area. A maj or recent development has been the extension of the com- puterized treatment planning carried out in individual centers to affiliated hospitals through the use of special interface equipment and telephone lines. The Memorial Computerized Treatment Planning Service is a pioneer effort in this respect and has been developed to make available to other hospitals the advantages of computer facili- ties and the associated treatment planning staff. The need to extend the facilities of computerized treatment plan- ning to radiation therapists in other hospitals which have limited treatment planning facilities has long been recognized. In the past, ocassional treatment plans have been hand-carried by messenger from various other hospitals in the metropolitan area for computation at Memorial Hospital. In order to provide a more convenient and prac- tical treatment planning service for collaborating hospitals, the present teletype linked treatment planning service was developed and put into operation in March of 1967. The initial two collaborating hospitals were Mount Zion Tumor Institute, San Francisco, Calif., and St. Luke's Hospital, New York City, N.Y. The teletype treatment plan- ning system was demonstrated at the American College of Radiology Computer Conference at the University of Missouri in April 1967 The input and output for treatment plans are transmitted via teletype over regular communication channels. On the average about 30 treatment plans per month are being computed by Memorial Hospital for each collaborating institution New programs are being continually developed, according to need The latest programs will compute dose distributions for any number of nonconverging fields, for any number of nonconverging arc rotations, for any number of wedged fields, as well as for any combination of weighted fields of different field size Provisions are also made to incorporate corrections for any number of inhomogeneities as well as irregularities in the patient's surface The computer programs for internal sources are capable of producing dose distributions in any plane at any desired orientation with as many as 100 implanted sources. Mr. OALLAHAN. Thank you, Dr. Laughlin. Mr Chairman, do you have a question of Dr Laughlin ~ Senator NELSON. Yes. I will have a question for you in just a mo- ment, Doctor. Are you still on, Doctor? Dr. LAUGHLIN. Yes; right here. Senator NELSON. Do I understand, then, that the radiologist can send to the computer the various computations, say, as to the size PAGENO="0037" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1181 and weight and age of the patient and the location of the carcinoma and that, then, the computer actually determines the quality of the X-radiation that will be used? That is, it decides how much, how much kilovoltage and how much milliamperage, for example, in this treatment process? Dr. LAUGHLIN. Yes; the computer is capable of providing the op.~ timum treatment. The way in which it is normally used, however, is that the radiologist would suggest a proposed treatment utilizing a specific radiation energy. The computer would compute this out and then the radiologist conducting the examination would say this is quite an acceptable treatment, or can you not do even better to avoid the radiation dose to a particular area. This would require a repetition of the computer analysis and would be a process of successive approxi- mation to the optimum dose distribution. Senator NELSON. Does the computer determine what the safety fac- tor is and how many roentgens a patient can take over a certain period, or is that left up to the radiologist? Dr. LAUGHLIN. That is definitely left to the radiologist. It is his business to have to determine how many roentgens of dose should be administered. But the computer can show him how that dose is going to be distributed throughout the patient's body and warn him of excessive dose level that is going to a healthy tissue region. Senator NELSON. Then the computer does have to have among its statistics all the factors about the size of that patient, obviously? Dr. LAUGHLIN. Yes. All the data on the anatomy of the patient, both externally and internally, in the regions which will be exposed to radia- tion will be vital. Senator NELSON. In summary, what is the main value of using this computer system rather than just having the roentgenologist make all these calculations himself? Is it a matter of time or is it a matter of time and accuracy? Dr. LAUGHLIN. It is a matter of both. As a matter of actual practice, if the roentgenologist had to do all these calculations, he ordinarily simply would not have time to do them and the treatment of the patient in that case would have to rely somewhat on judgment. With the use of these kinds of facilities, he is able to give to all patients a very comprehensive type of analysis which would be prohibitive timewise. Senator NELSON, Thank you very much, Doctor. It was a very in- formative presentation. The committee appreciates very much your giving so generously of your time. Dr. LAUGHLIN. Thank you. Senator NELSON. Did you have any other questions? Mr. CALLAHAN. No, thank you, Mr. Chairman, and thank you very much, Dr. Laughlin. Dr. LAUGHLIN. Thank you. Mr. CALLAHAN. Mr. Chairman, we will now move to discussion of medical information collection systems, which I have listed as item No.9 on the agenda. The communication system I will now report on is another unique and dramatic approach to collecting patient medical data. The tradi- PAGENO="0038" 1182 COMPETITIVE PROBLEMS IN TIlE DRUG INDUSTRY tionalmethod of taking and recording medical histories and the calcu- lation of test reports involves considerable time for the, physician. As an example, a physician investigating the symptoms of allergy may have to ask the patient several hundred questions and devote several hours of his time. A computer technique now under develop- mentat the University of Wisconsin' Medical School collects medical history information directly from the patient. It `is so simple in opera- tion that it can be used by the patients themselves A teletypewriter keyboard provides direct input to the computer. As used at Wisconsin in the investigation of symptoms of allergy, the computer questionnaire has been designed to imitate the normal physi cian-patient relationship `as closely as possible. Simple questions are presented to the patient either on a cathode ray tube similar to a TV screen or a teletypewriter. A typi'cal question would' be, "Have you ever had an allergic reaction ,to penicillin?" to which the patient replies "Yes," "No," "I do not know," or "I do not understand the question," by simply pressing one of four appropriate keys~ The choice of questions presented and the order of their presentation is controlled `by the patient's response. A "Yes" response to a general question is followed by a series of specific qualifying questions. A "No" response results in the skipping of such qualifying questions and the presentation of another general question. When the answers to questions are not known or not understood, these questions are clarified and explained with varying and simplified technology. T'he minimum number of question's to be answered by a patient who `has no allergy and has taken none of the potentially aller- genic drugs included in the program is 29 The maximum number of questions that can be answered by any patient is 320, but there are more than 500 question's in the program. A printed summary is generated by the computer in each case and the response to every question is recorded on tape and stored in the computer At this point, with the assistance of my associate, Mr Murray, we will call the computer and set it up for a demonstration which will take 2 or 3 minutes. Senator NELSON. I understand, then, that the compu'ter bank, for example, contains a series of questions on allergies. A patient can sit down in front `of this machine and `the computer can ask the questions `without the necessity of the doctor's presence. The computer will, in a very comprehensive fashion, explore this particular patient relation- ship to any allergy problem that has been programed and `the doctor can then use this information in place of an extensive consultation interview with the patient. Is that correct? Mr. CALLAHAN. Yes, sir, and after `the demonstration Dr. Meyer, who is here with us from the University of Wisconsin, will also `discuss in some detail more about the medical aspects of this. Actually, the best w'ay to ge't an appreciation of the relationship that is established between patient and computer is for someone with no previous experience to play the role of the patient PAGENO="0039" COMPETITIVE PROBLEMS IN TIlE DRTJG INDUSTRY 1183 Mr. Chairman, I wonder if you would care to be interviewed for allergy symptoñs? Senator NELsoN. We tried it for 5 minutes yesterday to~be sure I ~as smart enough to operate it. Mr. CAu~IxAN. OK. Mr. Murray, is the computer ready to talk with our patient? Mr. Mijiu~&y. In just a few seconds. Mr. CALLAHAN. Just to remind you again, Mr. Chairman, in order to respond with a yes to the computer, you simply strike the No. 1 key. To respond no, strike No, 2. If you do not know the answer to the question presented, strike No. 3. If you do not understand the ques.. tion, strike No.4. I will turn it over to you, Mr. Murray. Senator NELSON. The teletypewriter has given me some instructions. It has just typed out, "The demonstration you are about to see will show how a physician can use a computer to assist him in the gathering of medical data. You will be shown how a computer many miles away can remotely take the medical history of the patient. This is typical of the on-line computer medicine research at the University of W~s- consin Department of Medicine and Clinical Laboratories at Madison, Wis. "For complete program, push button 1 and return. For medical questions only, push No. 2 and return. For instructions, push No. 3 and return." I pushed No. 2 and return for the next question. The question asked by the computer is: "Are you a physician specializing primarily in the treatment of patients with allergies?" I will fib to it a little and say "Yes." So here are the questions that are being submitted now to the patient of a physician who primarily treats allergies. The question to the patient is, "Have you ever had asthma as defined by intermittent episodes of wheezing and dyspnea?" [will answer that "Yes." The next question is, "Have you ever had allergic rhinitis as defined by intermittent episodes of runny or stuffy nose and sneezing?" I can push "Yes" or "No" or I can push button "I do not understand," or "I do not know." I will continue with the yes and say "Yes" to it. Next question is, "Have you ever been married?" I had better say "Yes" to that. Next question is, "Have you ever been married to a spouse with asthma, allergic rhinitis, or exzema?" I will answer "No." What I assume is that this will go through a series of logical ques- tions based upon my answers until it has exhausted all of the informa~ tion put into the bank. Is that right, Doctor? Dr. METER. Yes. (The illustration and printout referred to follow:) PAGENO="0040" 1184 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY NOW IS THE TIME NO NJCJCJCJ WTCO ON-LINE WTCO ON-LINE ON AT 14:17 OH-E MN 10/30/7 TTY 13 USER NUMBER-E24400 SYSTEM-BASIC NEW OR OLD-OLD OLD PROBLEM NAME-PATINS WAIT. READY. RUN WAIT PATINS 14:18 CH-E MI 10/30/7 THE DEMONSTRATION YOU ARE ABOUT TO SEE WILL SHOW HOW A PHYSICIAN CAN USE A COMPUTER TO ASSIST HIM IN THE GATHERING OF MEDICAL DATA. YOU WILL BE SHOWN HOW A COMPUTER MANY MILES AWAY CAN ItEMOTELY TAKE THE MEDICAL HISTORY OF A PATIENT. THIS IS TYPICAL OF THE ON LINE COMPUTER MEDICINE RESEARCH AT THE UNIVERSITY OF WISCONSIN DEPARTMENT OF MEDICINE AND CLINICAL LABORATORIES AT MADISON, WISCONSIN. FOR COMPLETE PROGRAM-EPUSH 1 AND RETURN] FOR MEDICAL QUESTIONS ONLY-[PUSH NUMBER 2 AND RETURN] FOR INSTRUCTIONS-[PUSH NUMBER 3 AND RETURN] PAGENO="0041" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1185 NUMBER 1=YES. NUMBER 2=NO. NUMBER 3=DON'T KNOW. NUMBER 4=DON'T UNDERSTAND THE QUESTION. PUSH NUMBER 1 THEN RETURN BUTTON `TO SAY YES. TRY IT. ?1 GOOD-HAVE YOU UNDERSTOOD THUS FAR IF SO SAY YES BY PUSHING 1 THEN RETURN. IF NOT PUSH 2 THEN RETURN. ?1 I GOOD YOU ARE DOING WELL, ANSWERS ARE MADE BY PUSHING NUMBERED KEYS 1, 2, 3 OR 4. ARE YOU HAVING ANY TROUBLE `I'M GLAD. IF YOU DON'T UNDERSTAND A QUESTION YOU CAN PUSH NUMBER 4 AND RETURN BUTTON. TRY IT. ?4 WHEN YOU ARE READY TO BEGIN THE MEDICAL QUESTIONS, PUSh THE NUMBER 1 AND THE RETURN BUTTON. ?1 ARE YOU A PHYSICIAN SPECIALIZING PRIMARILY IN THE ~TREATMENT OF PATIENTS WITH ALLERGIES HAVE YOU EVER HAD ASTHMA AS DEFINED BY INTERMITTENT EPISODES OF WHEEZING AND DYSPNEA `11 BAVE YOU EVER HAD ALLERGIC RHINITIS AS DEFINED BY INTERMITTENT EPISODES OF RUNNING OR STUFFY NOSE AND SNEEZING ?1 HAVE YOU EVER BEEN MARRIED HAVE YOU EVER BEEN MARRIED TO A SPOUSE WITH ASTHMA, ALLERGIC RHINITIS OR EXZEMA ?1 WAS THIS ASTHMA `12 WAS THIS ALLERGIC RHINITIS `11 DID ANYONE LIVING IN YOUR HOME WHILE YOU WERE GROWING UP HAVE ASTHMA, ALLERGIC RHINITIS, OR EXZEMA ?1 WAS IT ASTHMA `12 WAS IT ALLERGIC RHINITIS ?5 WAS IT EXZEMA ?8 HAVE EITHER OF YOUR PARENTS HAD ASTHMA, ALLERGIC RHINITIS OR EXZEMA Senator NELSON. Is Dr. Meyer now going to explain how this opera- tion works? Mr. CALLAHAN'. Yes, sir. Dr. Meyer, would you please discuss some of the medical aspects `of this system of Dr. Slack's and any evaluatory comments about it you want to make? Senator NELSON. I want to say that I appreciate very much Dr. Meyer's willingness to come here today and present th:is testimony for the committee. PAGENO="0042" 1186 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY STATEMENT OP DR. THOMAS C. MEYER, ASSOCIATE DEAN, UNIVER- SITY OP WISC'ONSLN MEDICAL CENTER, MADISON, WIS. Dr. MEYER. Thank you, Mr. Chairman. You have heard of some of the uses to which computers are being put in medicine, and in fact, there are so many that this could be a subject of a hearing in itself. In Wisconsin, we have been interested in the use of computers in what we believe to be two critical areas of the health care process. We believe that significant practical improvement in the process of health care delivery will result. You have seen something of the use of the computer in taking a history and I will not go further into it. There are many ben.efits from this. Taking of a history is critical in the evaluation of a patient, but it is time consuming. While it is time consuming, it may be in- complete; therefore, something may be missed which is vital in the history and therefore to the diagnosis and management of the patient. There is lack of standardization by which histories are taken from interviewer to interviewer. Depending upon who is taking a history it may come out in a different way, although the same information may be there. Therefore, it is very difficult to abstract that history from the patient's chart. You know well of the traditional illegibility of physicians' hand- writing. The computer, once it has taken the history, prints it out in very legible form. There are other advantages that I do not think really one needs to go into at the moment. Dr. Warner Slack initiated this project of testing whether or not a reasonable history could be obtained from a patient by a computer and plans to do this routinely over the next several years. The history is taken from the patient. It is printed out in a recog- nized form to the physician who can then utilize what is in the his- tory. He knows what questions have been negatively answered. He knows what have been positively answered. His time in taking that history has been significantly cut down. Dr. Slack has developed history programs for gynecological his- tories, for neurology histories, endocrinology histories, psychiatric his- tory, gastroenterology, and currently pediatric histories are being developed. The teletypewriter extends the programs which are currently in Madison available only to patients at the University Hospital in Mad- ison. This process can be taken to wherever one plans to take it, utiliz- ing the teletypewriter. This can then go from a doctor's hospital office or a remote hospital to the computer and can be done relatively simply. Senator NELSON. May I ask a question at this stage? The doctor receives the typewritten result of the interview between the patient and the computer? Dr. MEYER. Yes. Senator NELSON. On a sheet just like the one there, I assume? PAGENO="0043" COMPETITIVE PROBLEMS IN THE I~RUG INDUSTRT 1187 `Dr. MEYER. Yes, he gets it in a digested form. The computer will ask all the questions and then it will print out the history in a digested form so that the physician does not have to go through all this. Senator NELSON. So the doctor will not read it in the form of 320 questions and answers; is that right? Dr. MEYER. No, sir; he will get the major portions of the history, the significant portions where that here been a positive response. He will get that; he will get the positively negative, if I could put it that way, points in the history. If he requests from the computer whether or not it has asked other questions, he can find out. The computer will also give the response to the particular question that the physician happens to be interested in, and that is not printed out in his printout. Senator NELSON. Then how much reliance `does he put on it? By that I mean does he read the history and then decide from reading of it whether or not he would like personally to explore some aspects of the various questions or answers in more detail? Or can you make this sufficiently sophisticated so that there would not be much point in the' doctor going any further? Dr. MEYER. I think that physicians will always ask some questions relating to the history. I think that the interview, and we teach in medical school that the history contributes significantly, probably 75 percent toward the diagnosis of the condition. From the information obtained from the history, the physician is directed to what type of examination he should do, what type of tests he should do in establishing the diagnosis for the patient. I think that physicians will be reluctant to not do anything in the way of questioning. I think that their questions will be very much' more directed, having obtained this backlog of history which they must have before they can proceed with their diagnostic process. Senator NELSON. I notice that on the machine the minimum number of questions that could be answered is 29, assuming, I suppose, that every answer was negative as to any allergic or complication at all. Dr. MEYER. Yes. Senator NELSON. The number of questions in the machine is 500 and the maximum that can be answered is 320-is that what Mr. Callahan said? Dr. MEYER. Yes. Senator NELSON. If a patient answered 320, what is your rough estimate of how much time it would have taken if a physician had followed that same procedure himself? Dr. MEYER. I would think it would be maybe an hour or an hour and a half, 2 hours. I really do not know. It depends a great deal on the ability of immediate recall of the patient. You know perfectly well that if somebody says to you, is there any diabetes in your family, you have to then think whether Great Aunt Maude had diabetes or what- ever. It is dependent on the intelligence of the patient, and on his ability to recall immediately the facts which you require: Senator NELSON. May I ask this-have you, in experimenting with ~this, taken some real situations in which you had an intern or doctor PAGENO="0044" 1188 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY interview or take a history of a patient, and then have a patient do the same on the computer to see what kind of time-savings you would be making for the physician? Dr MEYER This has been done and I wish I could give you the answer. I cannot give it to you with any assurance. There is a consider- able time saving to the doctor, but I cannot give it to you in minutes or seconds or hours. What I can tell you is that Dr. Slack is always very delighted when his computer picks up facts that the physicians, and usually he is testing them against the medical student, the intern, and the resident and the staff man. He will take everything they have obtained in inter- viewing the patient and he will match it up against what his computer gets from the patient, and he is always very delighted when the com- puter picks up things that the physicians do not pick up. To my knowledge, he has not yet got to the stage, or he has not found a sigmficant number of questions that the physicians have managed to pick up that the computer has not picked up. Now, this is in a development phase and when a question comes up, he can obviously have quickly put it into his computer program. Senator NELSON. May I suggest at this point, that if you wish to extemporize on anything to shorten the presentation, I would be pleased. We will print in the record the complete presentation of your prepared text. So if you can summarize it so it will be available for me and for the committee at the appropriate time, it will shorten the time of presentation.2 I do not know how soon the Senate may be taking some action, but I would suggest we recess for 35 minutes, until 1 o'clock, unless some- body has some time deadline or an airplane schedule they have to meet. We will resume at 1 o'clock. (Whereupon, at 12:25 p.m., the subcommittee recessed, to reconvene at 1 p.m. the same day.) AFTERNOON SESSION Senator NELSON. The committee will resume its hearings. I have been told that in the rear of the room they have not been able to hear very well this morning. I think it is because we have not been speaking directly into the microphone. You have to be 5 or 6 inches away speaking straight into it. I understand that you are going to have a demonstration that involves Dr. Hugo Pribor, chief pathologist at the Institute of Labo- ratory Medicine at Perth Amboy General Hospital, New Jersey. Is that correct? Mr. CALLAHAN. Yes, Mr. Chairman. Senator NELSON. Congressman Edward Patten is here. Would you like to sit up here, Congressman? Representative PATTEN. Thank you, but I will be leaving soon. Senator NELSON. Nice to have you come over. You are from Perth Amboy? Representative PATTEN. Yes. 2 See complete prepared statement of Dr. Meyer, p. 1204, infra. PAGENO="0045" COMPETITIVE PROBLEMS IN THE DRuG INDUSTRY 1189 Senator NELSON I knew that was a good city Representative PATTEN We have a lot of Nelsons there Senator NELSON. All right Mr. Callahan, go ahead. Mr. CALLAHAN. Thank you. Hospital laboi atory tests are becoming increasingly complex and difficult to perform. In many hospitals there is an insufficient number of trained or `experienced personnel to perform the various lab analyses. Also, smaller medical facilities do not have the automated analytical instruments to perform these tasks. The combination of communications and computers is helpino~ to solve this problem at Perth Amboy General Hospital in New ~ersey. A group of pathol- ogists and other laboratory specialists there developed a clinical laboratory automation system which employs a computer to handle the large volumes of data associated with a hospital laboratory'. The computer can, as with the other systems we have demonstrated, trans- mit information by telephone lines. B'y. placing a call to any location equipped with Data-Phone service and a teletypewriter, the computer can print out a variety of medical data reports As Dr. Hugo C. Pribor, director `of `the Institute of Laboratory Medicine of Perth Amboy General Hospital, will explain in a moment, this communications arrangement makes it possible to deliver data from the analysis of multiphasic screening tests and accumulated patient records direct to other hospitals, nursing homes, or even medi cal departments `of corporations. Dr. Pribor's presentation will show that any medical organization able to deliver patient specimens for analysis in a reasonable time could avail themselves of this service and enjoy the advantages `of the most up-to-date laboratory facilities and almost instant access to patient medical records Dr. Pribor is on Telelecture now speaking from Perth Amboy and at the conclusion of his remarks we will have an actual demonstration of this system with the thta being sent to the teletypewriter here in the caucus room Dr Pribor STATEMENT OP HUGO C PRIBOR, M D, PH B, DIRECTOR, INSTI TUTE OP LABORATORY MEDICINE, PERTH AMBOY GENERAL HOSPITAL, PERTH AMBOY, N J Dr PRIBOR Gentlemen, it is a pleasure to brief a Sen'tte committee on our work in applying data processing to the improvement of health care Last year, we described to the Subcommittee on Health of the Elderly our plans for setting up a multiphasic screening program for disease detection at this hospital I have taken the liberty of providing each of you with a copy of our testimony The activities I will outline represent a team effort The team con sists of our medical staff, Dr Samuel Breslow president, the hospital director Mr Robert Hoyt, our governing board, and the laboratory specialists outlined in this slide We have had good consultative sup port from Professors Welkowitz and Maloney in biomedical engineer ing at Rutgers, the State University of New Jersey Through joint PAGENO="0046" 1190 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY activities we have mad considerable progress in developing a small computer system to be used in the hospital laboratories We certainly agree that "research is good, but results are bettei Those of us who minister to the ill have always looked for ways to apply the products of basic research to patient care. Some of the greatest recent advances have been made in the area of chemistry and biology of disease processes. Through testing procedures, the clinical laboratory can give physlci'Lns information which help them apply these newer medical developments to the care of their patients For the most part our activities have centered on providing physi- cians with more and higher quality data One simple and inexpensive way is to perform a battery of "screening" tests on every patient as soon after admission as possible Admitted patients come to an admis sion lounge where a chart is generated, physical measurements are taken, and blood specimens are drawn by a technologist. Then the patient proceeds ;through X-ray and EKG to the ward. Through the use of automated data processing, results of tests on specimens col- lected in early afternoon or evening are reported on the patient's chart by 11 p.m. the same day. This could just as easily be reported to any neighboring hospital by Data-Phone. There are 12 ~hemical tests that comprise our basic "screening" program. In addition to `this, a complete blood count, a test for syphilis, and a uiinalysis are done on all adult patients It patients are sched uled for surgery, a bleeding time, a partial thiomboplastm time, and a tourniquet `test are performed to rule out any bleeding tendency This encompasses our multiphasic screenmg program on mpatients Often data is available to the physican by the time he sees his patient for the first time in the hospital This eliminates a great deal of the piecemeal collection of data that usually goes on in hospitals and often gives only a piecemeal picture of the patient's condition One recent report, in fact, shows that one out of 14 patients who undergo a battery of screening tests su~h as ours revealed a condition which would not otherwise have been diagnosed. So you see, biochemical screeening can establish a diagnosis more rapidly in order to help the physician evaluate his patient more accurately We hope that, as a result, this effort will shorten the patient's stay in the hospital. It is quite possible that application of this principle on a nationwide basis could lead to more efficient utilization of already overcrowded hospital facilities. In order to gather this laboratory data in our hospital, we have introduced a number of automated analytical instruments. The instru- ment you see in this slide simultaneously performs 12 chemical tests on a patient's serum. Other pieces of automated apparatus do the hematology testing. Many laboratories throughout the country are using automated equipment of this type right now and there is really nothing unique about it What is urnque about our system, however is the fact that we have linked these instruments directly to a com- puter. (The illustration referred to follows ) PAGENO="0047" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1191 Dr. PRIBOR. Why a computer? The data gathered by newer analyt- ical instruments is quite voluminous. Operating manually, medical technologists would have to spend increasing amounts of their time just handling data, and if we generate more and more data we would simply overload them. Here is the computer we are discussing. Actually it has many of the desirable features that are found in the laboratory instrument computer. (The illustration referred to appears on next page.) Dr. PRIBOR. Dr. George Williams, Chief of the Clinical Pathology Department of the National Institutes of Health, in a recent talk said, and I quote: Development and field evaluation of modular automated laboratory data processing systems is essential to permit adaptation to both small hospitals and large centralized laboratories. Two types of systems are minimal, one for the special purpose of hospital patient care, and the other for multiphasic diag- nostic orsereening use. PAGENO="0048" 1192 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY We believe that our system precisely fulfills the first type of system Dr Williams calls for and will be widely applicable in hospital labora tories throughout the country. The memory unit in our computer is small, but the four tapes can store tremendous amounts of information and retrieve it rapidly.. For example, one small tape handles all the laboratory information on all the patients in the hospital. Another feature of our system is that any of our laboratory person- nel can operate this computer. They converse with it through a stand- ard keyboard entry device and a small television display screen With only a few minutes' training the average person can learn to operate this computer. Much like a teaching machine, the computer guides the operator through the data processing sequence. Our computer contains four small tapes, a cathode ray tube, the core memory, and the printers This allows us to perform all routine data processing that `was formerly done manually in the laboratory For instance, the computei tells technologists what patients must have blood work. At the same time, it generates labels for technologists to place on specimen tubes. The computer also generates laboratory work lists and reports for the patient's chart. This is the type of clerical function that is normally expected of a computer, but of a large corn-- PAGENO="0049" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1193 puter. To achieve this with a computer this small and inexpensive is highly significant in the economics of hospital operation and disease detection. In addition to clerical work, there are .12. analog input lines that reach from the computer directly to the automated analytical equip- ment. While it processes other data as previously described, the com- puter actually takes readings directly from the various pieces of analytical equipment, interprets these readings, calculates the values and records these values as tests results in patient files stored on mag- netic tape.. This portion of the computer activity we call "on line" operation. A display on the video screen allows us to select which test the computer should perform. By depressing the E key, for instance, an electrophoresis program is called into the computer. Briefly to explain~ Senators, the electrophoresis test represents the separation of some proteins in the serum. This test can detect disease such as cirrhosis,. some cancers and other diseases. A variation of this test can be helpful in early detection of heart damage. A display on the screen shows the actual electrophoretic pattern as it would show on the computer screen. As the next step, I instruct the computer to analyze the pattern, give certain~ qualitative information and print out a complete report. To *give you a firsthand look at this test report, later I will generate a report in the caucus room on the teletypewriter via the Data-Phone. A routine physician's report formerly took at least 14 different slide rule calculations by a medical technologist, the time of the secretary to type it, and a considerable amount of time for the pathologist to review the pattern aii~d arrive at some sort of diagnostic statement. We have programed our computer to do all of this including differential diag- nosis. This computer will "diagnos&' by matching the pattern for the present specimen against standard patterns programed into the mem- ory. Reports are reviewed by the pathologist for validity and sent to the wards for placement on the patients' charts. Of course, you recog- nize that one ~ôuld generate these reports on the hospital wards by the telephone lines as well as anywhere else in the world. If we have requests for laboratory tests on a given day, we do these tests, and the computer puts information in the patient's file. When it is time to generate reports we add this data to all previous data on the patient, and prepare a new cumulative report. Patient information is provided on the heading and the test groups. We print out the normal values for each of the test procedures. We obtained these normal values in our own laboratory. Values are arranged in 12 different categories Of sex and age. By doing this, every patient's test values can be com- pared against normal values for his sex and age. Senators, a 55-year-old male doesn't look like a 2O-~year-old student nurse. Why should we ex- pect his blood chemistry values to be the same? A program written exclusively by our team is for retrieval of data from our surgical pathology files. Several similar reports have been printed there previously and are available for examination. The out- put you will see is real data although we have deleted every other character to obscure the patient's name for this demonstration. We are beginning to offer this type of data retrieval to various pathology and hospital laboratories. Soon, we will handle the sttrgical 81-280--68---pt. 4-4 PAGENO="0050" 1194 COMPETITIVE PROBLEMS IN THE DRuG INDUSTRY pathology data from the Albert Einstein Medical School in New York City in a demonstrating project with Dr. Maeir. He will send us his data. We will enter it in the computer. If he desires a particular type of retrieval, he calls us and we print out on a teletypewriter in his department. We have also programed a large computer at Rutgers University for retrieval of microbiology data One result of this is a periodic report to our staff physicians correlating bacteria type, body site, and sensi- tivity of these bacteria to various antibiotic drugs Such a report can help a physician select the most effective antibiotic to use m treating his patient even before the laboratory has positively identified the specific bacteria. Also underway under contract with the U.S. Public Health Service is a project to automate and computerize the screening and diagnosis of cervical Papanicolau preparations for the detection of cancer in women. The community hospital and its medical staff will remain the prrn cipal `igents for delivering health services for the care of the ill and for the preservation of the health of the well. Multiphasic health screening will become an important adjunct to community health services. Under our direction this hospital is establishing a multi- phasic screening clinic in this vacant supermarket near the hospital This will require the development of a considerable amount of auto- mation and data processing capability coupled with the careful study of the logistics of handling large numbers of people. It is possible that such a clinic could become an important center for servicing not only this hospital but also several neighboring hospitals. We can readily see how remote data input and output directly becomes an important function of this type of operation Now for those of you who are interested we will begin to print out various report forms on your teletypewriter in the Senate caucus room While these reports are being generated, I would be glad to answer any questions you might have Mr CALLAHAN Thank you, Dr Pribor We will pass out the copies of the reports that you sent yesterday. Mr. Chairman, that concludes Dr. Pribor':s remarks. Senator NELSON. I want to thank Dr. Pribor for a very fine con- tribution and for taking the time to make this presentation to the committee. Mr. CALLAHAN. Thank you, Dr. Pribor, and goodby. Dr. PRIBOR. Goodby, and thank you very much. Mr CALLAHAN As has been demonstrated here this morning, Tele lecture enables a group or groups to discuss important subjects with specialists in their particular fields, using telephone loudspeaker equip ment The lecturer may speak to one audience or several, even thou- sands of miles apart. Communication is two way, so listeners may question the speaker, while he in turn directs his presentation to the interests and responses of his audiences. The discussion need not be confined to one specialist only since panel participation can readily be arranged for several speakers, who may be in different parts of the country-or the world The Upstate Medical Center, Syracuse, N Y, is typical of a num her of institutions using the medium of Telelecture in continuing PAGENO="0051" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1195 medical education. Richard H. Lyons, M.D., director of the central New York regional medical program states: One of the biggest problems in conducting a regional medical program is in the ëommunications between hospitals in the region. * * * Most doctors are un- aware of what other community hospitals have to offer in the way of facili- ties and talent. Ideally, if all hospitals could be interconnected, gaps would be greatly reduced so that consultations between doctors could be expedited as well as the continuing education of physicians, laboratory personnel, nurses and others. With this objective and to make the best medical resources available ~to other hospitals in the region, Dr. Lyons established a multipoint telephone conference service interconnecting the Upstate Medical Center with 13 other hospitals within the region. This arrangement permits doctors in Syracuse to give lectures to groups assembled at the participating hospitals. The system is used between 6 and 13 hours per day and telephone conferences are conducted 6 days a week. The University of Wisconsin Medical Center is also making wide use of Telelecture to some 60 hospital locations across the State. The university is also pioneering in another program of continuing med- ical education which deserves comment. A Wisconsin physician, con- fronted late at night with a problem in treating acute meningitis, needs only to reach for a telephone to obtain expert advice. The same is true for the Wisconsin physician who would like to review basic informa- tion on the diagnosis and treatment of moles and melanoma. Informa- tion on these and 86 other medical subjects are available 24 hours a day through a unique service provided by the university medical center. By dialing a special telephone number, the physician may listen to tape-recorded lectures prepared by members of the medical school's faculty or the hospital's staff. The lectures average 5 minutes in length, and if the recorded lecture does not provide the specific information sought by the physician, he may contact the lecturer directly, because each tape is concluded with the lecturer's telephone number. Any new developments in the medical field can be directly taped and immediately made available through this program. We would like to make a demonstration call to the tape library at the university now and after we hear how it sounds to the local physi- *cian, we will ask Dr. Meyer who has been closely associated with both the Telelecture and the tape library to comment on the effectiveness of these programs. Senator NELSON. Is that call going to be made now? Mr. CALLAHAN. Yes. (Whereupon the demonstration described by Mr. Callahan was made for the subcommittee.) Mr. CALLAHAN. In the interest of time, if it pleases you, we will cut off the tape and ask Dr. Meyer to continue. Senator NELSON. As I understand, there are some 88 lectures on specific subjects which are available if a physician in Wisconsin makes the telephone call to the university hospital; is that correct? Dr. MEYER. Any physician throughout the country can call in to this and exhibit 2in the exhibits I have given you, gives an idea of the scope of the tapes that we now have available. There are now some 170-odd tapes that will become available actually in the middle of November. PAGENO="0052" 1196 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Senator NELSON. 170? Dr. MEYER. Yes, sir. Senator NELSON. I notice on the brochure-exhibit 2-that is issued, by the university, it says "Toll-free medical lectures." Does that mean the cost of the call is free? Dr. MEYER. It is free in Wisconsin. This was funded under the regional medical program. This is identified there and a physician~ calling in from anywhere in Wisconsin will get these lectures without cost of the telephone call to himself. Senator NELSON. On the program, the cost of phoning of this pro- gram to make these lectures available, who paid for that? Dr. MEYER. This was under agreement from the regional medical program in Wisconsin under Public Law 89-239. Senator NELSON. What is the frequency of the calls that you are now getting? Dr. MEYER. Currently over the first year of use of this library, there are on an average five calls a day. I would like to add to this that the funds that we had, when we initially started this, precluded us doing any more publicity than one brochure which was sent to each physi cian in Wisconsin in August 1966. The American Telephone `& Tele- graph exhibit has been carrying it around the country as part of the Bell seminars in Chicago and New York, and in actual fact, they have been doing more publicity for it than we have been able to do for lack of funds. Senator NELSON. Are the county medical societies in Wisconsin- Dr. MEYER. They are aware of it. The initial announcement of it' went out throughout the State and county medical societies. Senator NELSON. How long has this program been in effect? Dr. MEYER. Since April 1966. This brochure, the doctors in Wiscon- sin do not have it at the moment. They have the `old one which was the one that we issued in August 1966. Senator NELSON. Is the frequency of use increasing? Dr. MEYER. No; `at the moment it is really fairly static. It has re- mained at about five. For 4 or 6 weeks after they had printed this initial brochure, the calls went up to 10 or 12 a day, then they grad- ually dropped off and on&s feeling is that this was just our lack of publicity of the service. Senator NELSON. Do you anticipate that once you have broadened your list of lectures to cover a much larger number of medical prob- lems, the frequency of use will increase? Dr. MEYER. Yes; we do. We do feel that once people have gotten to know about it `and have an opportunity to utilize it, they would utilize it more and more as a storage mechanism for information that they can get instantaneously; that they do not have to memorize or that they can get up-to-date or authoritative information instantane- ously. We see a number of applications for this which, we have not utilized as yet, but I think it is merely a matter of time before"this is' done. Senator NELSON. Since this subcommittee is particularly interested~ in the question of d'rugs, will you at some time comment at least briefly on the question `of whether or not you feel that there is re'athly' available quickly reliable, authoritative information for physicians on drugs and reactions to `drugs and whether or not such a system of PAGENO="0053" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1197 ~disseminating information to physicians wo~ild `be `a valuable one in *the drug field? Dr. MEYER. We do feel that this has a great deal of flexibility and we could put into it a tremendous amount of information which would be potentially of a great deal of use to physicians in the State. It is a matter of finding the right people to make the correct recordings of the subjects in which they are particularly interested. We do have problems trying to persuade people to try to condense down the information that they are used to giving in 30 minutes to' 5 minutes, but `this has been, and is `being, overcome. I can see no good reason that we couldn't `start a drug information `service by which a physician encountering `a new drug for the first time can call into the library `and request information a'bout that drug, whether it be 2 a.m. or during working hours. The drawback of the library is that it is `the physician who has got to initiate the calls. We can bombard him with information about it, that it is available, that it is a free service, but unless he puts in the telephone call we `are unable to get to him with whatever message he happens to want. Essentially it was `designed to make available information to people as they required it-educa- tionally this is sound, that you teach a child what it w'ants when it asks. You teach anybody, wh'en they `ask and in their most receptive phase, to absorb that information. This was the idea in the background with thi's library. Senator NELSON. Could you give `an example of how this system might be used to inform a doctor about a drug? Dr. MEYER. What `I would like to do is to obtain fro'm `the recog- nized-probably university-based clinical pharmacologist their evalu- ation of drugs as they come on the market. When a doctor is approached by possibly a pharmaceutical representative concerning a particular drug, either at the time or immediately after the pharmaceutical rep- resentative has discussed it with him, he can `then `call in~ and ascertain the academic and practical view of th'at drug which has been detailed `to him. Again, it is a matter of how we organize it-that it is merely a matter of getting it organized, that this could very well `be put into effect within-we can put a tape into `a library within `a week of the person saying he will make the tape. If he says "I will make the tape tonight," we can put the tape in the library tomorrow. Senator NELSON. Supposing the physici'an is going `to prescribe a drug for a patient `and he wanted to be certain that a pati~n't who had, say, diabetes or `some other disease, would no't get a bad reaction to that drug, could he pick up the phone and find ou't whether this patient should or should not take the drug? Dr. MEYER. This is what the clinical pharmacologist would put into the tape when he was asked to evaluate the drug. The clinical phar- macologist will say, "This is the action of the drug, this is what it will do, this i's what it will not do, `and these are the `side effects; these are the to'xic effects and these are the potentially extremely dangerous effects of the drug," and, therefore, he would say that your patient- or if you are going to give this drug to thi's patient it `shoul'd not be given in the presence of diabetes because it will aggravate the diabetes and this would be the type of information that the physician wants. PAGENO="0054" 1198 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY If I could give you a parallel. One of the physicians who called. into the library had a young woman who had cancer of the breast with multiple secondary cancers `all `around throughout her body. This physician wanted to know what the current status of the taking out of the adrenal glands was in the treatment of widely diffused cancer of the breast. This was his only question. One of the tapes that is in the library discusses the management of what is called secondary carcinomatosis, which is widespread cancer. The man who made the tape made the specific comment that adrenalectomy, or t'he taking out of the `adren'ais was no longer ac- ceptable treatment. This is `all that doctor wanted to know from that~ tape. He got it within 5 minutes of his asking the question. He was really very enthusiastic about this. In `the same way with drugs, the doctor may well have only one problem in his mind about the drug-Will this drug affect the dia- betic patient? it is our hope that the clinical pharmacologist would. have included that in the tapes. If he doesn't, at least the physician knows who the recognized expert on that drug is and he can call him directly and say, "My patient has diabetes, you didn't say anything about di'abetes. Can you give him thi's drug?" Senator NELSON Thank you. Dr. MEYER. I would like to describe perhaps in more detail- Senator NELSON. Is there any source now availabe to the physician where he can get the kind of information authoritatively and quickly' that you have spoken about? Dr. MEYER. I think we are talking in relative terms. If we ~re talk- ing in `terms of hours or minutes, the answer `is "No." If you are talking' in terms of days or weeks the answer is "Yes." But there are publica- `tions which are well authenticated by which things are sent `around to physicians. These are done by independent clinical pharmacologists and these are sent to subscribing physicians and they can find out about the particular drug. Mr GORDON Which publications do you have in mind ~ Dr. MEYER. The one that comes to mind is the Medical Letter that is authoritative `and well-founded, and a lot of u's rely on it to a great degree. Senator NELSON. Does the Medical Letter have available all the in- formation on the most frequently prescribed drugs? Dr. MEYER. No, `sir. They put out every month the Medical Letter, and they select `drugs as they are evaluated by their experts that the physicia.n, if he gets the letter-the Medical Letter-will presumably re'ad it and file it for future reference. But there is `always a timelag between the time that the evaluators had evaluated the drug and it arrives on the physician's desk. Senator NELSON. Even so, `that wouldn't meet the problem, would it, of the physician who h'ad read the Medical Letter on a drug 4 months ago, and in the meantime clinicians had discovered that there were ad di'tional side effects from the drug? Can the pharmacologist revise hi's tape to say that "we found another side effect" ~ There is a lag there, too, is there not ~ Dr MEYER There is a certain lag, except the pharmacologist can revise it relatively quickly; `it becomes updated `and again authoritative fairly quickly. It my be `a matter of more months before the Medical Letter can get the revision published in the Journal. PAGENO="0055" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 119~ Senator NELSON. Does the Medical Letter purport to cover all the drugs? Dr. MEYER. No. Senator NELSON. So then the information the doctor may want about a certain drug may not have been covered by that publication. Dr. MEYER. That is true. Equally, we may not have the particular information `that physician may want. Senator NELSON. All right, go ahead. Dr. MEYER. I would just ilke to preface what I say about the Tele- lecture by a few thoughts that we do have about the need for continuing medical education and why we have taken the `two communications to `deliver `that need. There is `a great volume of comparatively static core information which every doctor has. But there is a great deal of information which is constantly changing `and which has `a relatively short, what is called~ half-life. The physician is in the situation then that having got his M.D. he must get to the `stage where he can unlearn what ha's `been disproved,. what he believed `at `the `time `that he was taught it. He must be `able to' revi'se `and upda'te `the things `that he did learn that are, in fact, still ex- tant, and he must have a mechanism for `acquiring new information which was never `taught when he was in medical school. We feel, as a `university, as a S'tate university, that we h'ave the re- sponsibility to `the physicians in the State `to provide `this information' for `them `and thereby `to the citizens of the `State to provi'de `the latest information to `the physicians. The sources of inform'a'tion f'or `the heal'th profession's-for the' health profession'al-~are m'any and v'aried. The quality and veracity of `this information is equally variable. F'or example, `the pharmaceuti- cal represent'atives serve a distinct purpose in bringing information concerning new drugs `to busy physicians and pharm'aci'sts. Bu't at the' university we have some concern about the appropriateness of the time' at which this information is delivered `and `the con'tex't in which it is delivered. The man has a job to do `and he does that job. Much information in `textbooks `and journals, `tex'tbooks certainiy,~ and in some journal's, is outda'ted almost by the time it is published and certainly ~by `the `time it has set on somebody's reference shelf for some `time. A busy physician delivering health care finds it difficult to leave `these responsibili'ties `to go to a medical center for his continuing education. Our problem as medical educators is that our primary responsibility is to medical students. Continuing educati'on or postgraduate education, has to compete with the other responsibilities that medical educators have. Now, medical practice today is very varied and really no two physi- cians practice exactly the same pattern of practice. Health care today is really a team effort. The nurse, medical technologist, pharmacist, X-ray teohno'io~ist, hospital administrator, physiotherapist, social worker, and dietitian all have critical roles to play in `the total medical care of the p'atient. They all contribu'te to the `health care effort, there- fore as fa'r `as we are `concerned, our educational efforts have really `been across the whole health care field. We decided that our major impact should `try to `be to make all this information available to' these health professions at `the time and in the form in which they most require it. PAGENO="0056" 11200 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY When it comes to implementing these we soon recognized that corn- rnunication~ technology was the way in which this could most simply be done. Truly continuing educational programs presented on a regular basis in the health care professional's community is optimal We must also give them some means of immediate access to authoritative infor- .mation. If I may have slide 1, the telephone-radio conference circuit was started in 1965. It has grown very rapidly and as you see in the slide, we have some 58 hospitals which are marked by the triangles linked in the telephone conference circuit. (The telephone-radio conference circuit illustration referred to follows:) 1967-1968 TELEPHONE/RADIO CONFERENCE CIRCUIT Telephone Stations 0 Radio Stations 0 0 0 & 0L~ 04 PAGENO="0057" COMPETITIVE PROBLEMS IN THE: DRUG INDUSTRY 1201 Dr. MEYER. The circles which you see are hospitals that are linked by radio link. Most of the stations are in the conference rooms of the hospital and each consists of a loudspeaker similar to the one in front of you, a telephone handset and a slide projector similar to the one we are using. Parenthetically the sound on these telephone conferences is vastly superior to the sound to which you have `been exposed today. We hold the conferences, and exhibits 1 and 4 that I handed out t& you are the brochures about these conferences; if you care to look through them you can see the range of material that is being presented over these. We send the slides and visual materials to each station in advance and you can see what happens in an outlying station at the commencement of the lecture. The pattern of each conference is similar to that developed by Dr. Frank Woolsey at Albany Medical College. He did it on radio. There' was a 30-minute presentation followed by 30 minutes of questions,. comments and discussion. All the conference participant has to do is merely pick up the telephone handset at his station and talk. What he says is heard over the whole circuit as is the response of the lecturer who is sitting in Madison. Senator NEI~soN. Hcw frequently do you have these conferences? Dr. MEYER. For physicians, we are now having them 3 hours a week. We have if I may just go on about this in 1 week various faculty members of the University may meet 1 hour each with perhaps 300 physicians, 450 nurses, 300 medical technologists, 250 X-ray technol- ogists, 125 hospital administrators, and 100 veterinarians.. None of these people have to have more than-20 miles from their community- in fact, most `of them stay right in their own community hospital. Senator NELSON. Is that how many people do listen or have listened ~ Dr. MEYER. Yes, sir; this is how many-we take a head count at each station during the conference. There are people taking a head count and this is reported back in to us. Senator NELSON. Was this an average figure? Dr. MEYER. This is an average figure. Senator NELSON. How many physicians in a week? Dr. MEYER. We have 300 physicians. We have a general medical conference which is up on `this corner on the brochure and then we have the specialized conferences. Some of the physicians that go on these general medical conferences may be taking some of the spe- cialized courses as well. But, on the whole, we meet with 300 to 350' physicians every week in one form or another. Mr. GORDON. How many doctors are there in Wisconsin? Dr. MEYER. 4,000. Mr. GORDON. You say you meet with about 300 doctors a week? Dr. MEYER. Yes. Mr. GORDON. Are they generally the same doctors from week to' week? Dr. MEYER. On the whole, yes. There is a little variation in that people tend to go to what interests them. But, on the whole, people sign up for either the general medical seminars or for the workshops PAGENO="0058" 1202 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY or the specialized conferences and the same doctors will come back each time Mr GORDON We have had estimates from doctors who testified here previously that no more than 10 percent of doctors generally attend medical conferences or participate in such types of continuing educa- lion. That seems to fit in fairly well with the figure you just gave us,, about 10. percent or a little less. Dr MEYER Yes, sir We hope that making this more available we have managed to get to some of the physicians who feel that they just cannot leave their health care responsibilities to go to other courses. The figures that you have been given are figures of people who go away to courses rather than the people who take courses in their own communities. I think it will be interesting to us to see how many get in to take these courses within their own community. If you will look at the bottom line on this slide you can see how the hours of instruction have increased in the past 3 years of our functions. We started out with 13,000 individual hours of instruction and we are now up to close to 80,000. Again, I would stress the fact that nobody has to mover-neither the lecturer or the participants. (The telephone radio conferences enrollment, 1965-68, illustration follows ) Telephone/Radio Con fe rences Enrolli~nt - 1965-1968 1965-6.6 1966-67 1967-68 Thysicians General Sainare 286 326 363 Short Courses 61 21,1 .1169' Nurses General Seminars 6811 1100 969 Short Courses 1118 Medical Technologists 220 255 1166 X-ray Technologists 217 176 262 Hospital Administrators - 75 130 VeterinSl7 Science 119 57 30, Pharmacists 150 326 350 Social Workers 236 200 - Nurse Anesthetists _____ 1,976 2,056 3,262 Individual Hours of Instruction 13,018 25,068 79,81 * Estimated - enrollment incomplete PAGENO="0059" COMPETITIVE PROBLEMS IN TUE ±~RUG INDUSTRY 1203 Dr. MEYER. I would like to just play a short piece of the recording that we took from the conference last week in that you can recognize the names of the places as I call them in and you can see how widely dispersed these conference stations are and how simple it is for them to get in to talk to the lecturer. If you look' at your program the lecture was on common derma- tological conditions and they are questioning the lecturer about their problems that they have with skin diseases. (Whereupon the demonstration described by Dr. Meyer was per- formed for the subcommittee.) Dr. MEYER. I think you can see how you can develop a really close relationship. They have listened to Dr. Johnson talk for some 40 mm- Mtes on this and they were now questioning him. As a result of that lecture he had at one session, he presented `this lecture twice. If you look at your program, this is on these hours on Tuesday and then `he had 17 questions asked him about his presentation in the morning. And he had 27 questions asked him at the afternoon period. We feel that this is achieving a great deal of interchange of information. I would like to insert some thoughts about our concern of other forms of communications in medical practice and education. You have seen and heard of some of the practical uses of television in service in education. This is as a vehicle for continuing education for physi- cians throughout the State and we do ~have `some reservations. This medium has been met with a mixed reception. There are enthusiastic reports and you will be hearing from Dr. Wi'ttson about this. Some of these reports are tempered by backroom conversations where dif- ficulties, expense, and time-consuming demands of the medium are discussed. We have doubts as to whether we can transform our busiest, yet most effective didactic and bedside teachers, into television per- formers. We do not think that much teaching can be accomplished without the teacher and the student being able to interchange ideas. The more sophisticated the student, the more he requires discussi'on with the teacher. We have greater interest in the potential of slow-scan television as the vehicle of our major continuing education effort. There are many reasons for this, but essentially `slow-scan television will enable us `to transmit live conferences at the medical center to as many hos- pitals as have the receiving equipment with no more than 2 hours of preparation time and at a cost significantly lower than regular tele- vision. The drawbacks of slow-sean do not appear to us to be critical in the teaching function. There is an area of international medical research seminars which would seem to us to be a log'ical use of satellites for the exchange of information between widely scattered groups of researchers working intensively on common problems. Again, this holds promise for great reduction in travel to `international meetings where exchange of ideas takes place in the rather artificial surroundings of a large convention center. Slow-scan television is adaptable to the simplest satellites which have radio receiving and transmitting ability. The university has a proposal in to the National Aeronautics and Space Agency to utilize `One of their weather satellites to l'ink our mcd- PAGENO="0060" 1204 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY ical center researchers with research scientists at four medical schools in Japan, four in Australia, one each in Canada, Hawaii, New Zealand,. and Mexico. We would conduct these pilot conferences in the same manner as we do the telephone-radio conferences in Wisconsin. In conclusion I would like to say that in my view we are on the threshold of many new and exciting methods of making available to physicians and allied health personnel the means by which they can review and upgrade their current knowledge, acquire new knowledge, and yet maintain the health care responsibilities they hold in their own communities. These methods will make it possible to meet the specific needs and programs to the varied learning habits of these health practitioners. It is possible to transmit conferences being regularly held at the medical center with two-way communication to any or many parts of the State or country, so that the Wisconsin idea of the university without walls can come to pass. The key to this venture, as it is to so many other ventures in our world today, is communications. The Wisconsin Telephone Co. has given to us every encouragement and cooperation as we questioned, complained, cajoled, demanded, and decided upon ventures that were as new and as radical to the company as they were to us. It seems to us that we are providing some services in the education of the physicians in Wisconsin. Thank you. Senator NELSON. Thank you very much, Doctor, for your most interesting presentation. We appreciate very much your taking the time to come here today and make this presentation to the committee. (The prepared statement of Dr. Meyer follows:) STATEMENT OP DR. THOMAS C. MEYER, ASSOCIATE DEAN, UNIvERSITY OF WISCONSIN MEDICAL CENTER SECTION I Mr. Chairman, computers have been put to many uses in medicine and could well be the subject of a hearing in itself. In Wisconsin we are investigating the use of computers in two critical areas of the health care process in the belief that significant practical improvement in that process will result. A. Taking of Medical Histories.-The medical history consists of information of potential clinical significance collected during the course of interview between doctor and patient. There has been relatively little research done on the medical history in spite of the fact that many clinicians consider this to be the most important aspect of the patient's examination. And there are certain practical reasons why research on the medical history is urgently needed. History-taking is very time-consuming and incompleteness often results from time limitations and other factors beyond the physician's control. Further, the lack of standardiza- tion from interviewer to interviewer, together with the traditional illegibility of hand-recorded patient records, makes information retrieval for patient care and clinical research difficult and often impossible. Improved methods of collecting and recorded detailed medical histories are needed. The use of a digital computer to interview patients regarding their medical histories was first tried in 1965 at the University of Wisconsin. The project, under the direction of Dr. Warner Slack, is still In the research stages, but it is hoped that computer-based patient interviewing will be done routinely within the next several years. The computer has been used in this project to collect the infomation of clinical histories directly from patients, print out summaries in a form immediately use- ful to physicians and for storage and future use in patient care and clinical re- search. The patient sits in front of the computer and questions are displayed on a cathode-ray screen. The presentation of questions is a function of patient PAGENO="0061" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1205 responses-qu~stions answered "YES" are followed up in detail and questions not understood are explained further. Responses are made by keyboard entries. Thus far, results with the program has been encouraging. Over 800 patients have been interviewed by computer. A general medical history `and specialty histories dealing with symptoms of allergy and gynecology have been developed and tried clinically. Endocrinology, neurology, psychiatry, gastroenterology and pediatric histories are currently under development. Teletype machines have also been used as interviwing terminals connected to the computer by telephone line. With this technique,, the computer is dialed from the phone on the teletype and when telephone connection is established, questions are printed by the teletyipe under computer control. Patient responses are made by the teletype keyboard to the computer, which in turn responds with the presentation of another question. Thus far, 60 allergy histories have been taken by teletype. Remote interviewing (teletypes on long distance phone lines to the computer in Madison) have been conducted on a demonstration basis from the Mayo Clinic `in Rochester, Minnesota, New York City, Chicago, and Los Angeles. It is hoped that, with such techniques, computer-based patient inter- viewing can be made available to physicians and their patients in areais removed from computer facilities. B. The Uomp~uter in the Laboratory.-The demands for laboratory services have been increasing rapidly over the past decade. Automated instrumentation which can perform certain laboratory tests have helped meet the increased demands, but there still remain the problems of calculating, processing, and communicating the mass of information produced by the laboratory. In order to continue to meet the increasing work load and still maintain the high quality of laboratory information, the use of high speed digital computers is being investigated in many laboratories. The use of LINO computers in clinical laboratories was pioneered by Dr. G. Phillip Hicks at the Univeraity of Wisconsin in late 1964. This has been operating in the University of Wisconvin Clinical Laboratory for over 2 years. At Wisconsin, programs have been developed to permit the laboratory computer to be used directly by all laboratory staff without special training in computer technology. Laboratory information is collected from the staff iby the computer, which provides a real service by performing calculations of test results and statistically analyzing the results. Where automated instruments perform anal- ysis in the laboratory, the computer collects the results directly from 16 4n- strunients simultaneously while checking the quality of each result as it is processed. In the Wisconsin laboratories, three remote teletype stations are connected to the computer for the distribution ~of information within the laboratory. The programs developed at Wisconsin have been placed in the public domain and are available to any other laboratory' upon i~equest. To assist' other labora- tories in evaluating computers, a two-week postgraduate medicine course was presented at Wisconsin in May, 1967. At present, the Wisconsin programs are being used in the Biochemistry Laboratory at fluke University Medical Center under the direction of Dr. Ralph E. Thiers. Upon request, specific programs have been made available. For example, the Wisconsin statistical programs for analyzing laboratory data have been used at Perth Amboy. As more laboratories throughout the nation Install such computer systems, telephone communication lines for the rapid communication and exchange of medical laboratory information, will be of great value. SEOT~(ON II The University of Wisconsin Medical Center and the University Extension have long Jeen pre-occupied with problems of health `care personnel which may best be summarized by a series of statements that are pertinent though they may not appear to be related. (1) While there is a great volume of comparatively static core information which is structural, functional and behavioral in pattern, there is a proportion of what we believe and teach in medicine today which will have been disproved in ten years. There will be a great new Jody of knowledge which the physician and all those delivering health care will have to acquire if they are to deliver optimal care. The physician is now and will continue to be in the constant state of having to unlearn certain segments of his fund of informaton, revise and update other PAGENO="0062" 1206 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY portion's of his knowledge and skills in addition to acquiring information which is completely new to him. (2) The University of Wisconsin has a responsibility to provide health prac- titioners in Wisconsin with the opportunity to constantly review and updat& their knowledge in order that they may improve the delivery of health care in their communities. (3) Optimal learning occurs when an individual has an immediate and urgent need for information. A great deal of information need not be learned provided it is instantaneously available when the physician requires it. (4) The sources of information for a health professional are many and varied; the quality and veracity of this information is equally variable, e.g., the pharmaceutical representatives serve a distinct purpose in bringing infor- mation concerning new drugs to busy physicians and pharmacists. At the University of Wisconsin we have some concern about the appropriateness of the time at which this information is delivered and the context in which it is delivered. (5) Much information in textbooks and journals is outdated or disproved by the time it is published, and even more unreliable after the publication has been on the individual's reference shelf for a number of years. (6) The demands on those delivering health care are such that time and dis- tance are barriers to continuing education. It is difficult to leave patient care responsibilities and travel to a medical center for a course which may or may not be relevant to the individual's needs. (7), The primary responsibility of the medical educator is to train medical students. Continuing education must compete with other responsibilities such as research and service in its demands on his time. (8) Medical practice today is so varied, it is our belief that no two physicians have the same pattern of demands placed upon them by their patients. Continu- ing education must be structured `to~em~bie the physician to identify and meet his specific needs. (9) Health care is becoming more and more a team effort. The nurse, medical technologist, pharmacist, x-ray technologist, hospital administrator, physio- therapist, social worker and dietician all have critical roles to play in the total medical care of the patient. Without any one of these ancillary personnel the phy- sician loses a great deal of his effectiveness. Any continuing education program for physicians must encompass opportunities for all health personneL To meet these problems the Continuing Education Committee of the University of Wisconsin has developed long-range aims which state: 1. The volume and opportunity for continuing education available is so great that the problems for the busy practitioner are "which, when, how good, and how am I to get it?" 2. The provision for the continuing education of the physicians in the state of Wisconsin is an appropriate function and the duty fo the state university. This education should be- a. Of the highest caliber and pertinent to current medical practice; b. Presented in a readily available form; and c. Available- 1. To physicians of varying interests and all areas of the state; 2. At convenient times of the day or night; 3. At lowest possible cost; 4. In various and diverse forms in which physicians may require it; and 5. Without the physician having to absent himself from the responsi- bilities of his practice for any prolonged period. 3. Discussion of patients and prepared material is the most effective method of continuing education and can best be done on patients well known to the physician. Implementation of these objectives has been the concern of the Department of Postgraduate Medical Education which soon recognized that communications offered the possibility of providing: (1)' Truly continuing educational programs for all health care personnel, presented on a regular basis in `the communities where health care is being delivered. (2) Greatly increased diffusion of the knowledge and skill of medical educa- tors and `at the same time reducing travel time of the faculty and course registrants. PAGENO="0063" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1207 (3) Immediate access to current and authoritative information of emergency nature and the means for the physician to update his knowledge in summary form at the time he requires it-whether this be during office hours or during the night. I would like, if I may, to give you some examples of the means we have utilized in Wisconsin in an attempt to carry out these objectives: 1. The Telephone/Radio Conference is in essence a party line with some 58 hospital stations linked by a private telephone line with another 9 hospitals listening on radio. Most of the stations are in the conference rooms of the hospitals and each consists of a loudspeaker, telephone handset, and slide projector. Conferences are held at a pre-determined time. Any station with its loudspeaker turned on can hear everything that is said from every other station on the line. Slides and visual materials for each lecture are sent in advance to each station. The pattern of each conference is essentially similar to the two-way radio conferences developed by Frank Woolsey, M.D. at Albany Medical College in Albany, New York. There is a thirty-minute presentation followed by thirty minutes of questions, comments and discussion. A conference participant having a question or comment has merely to pick up the telephone handset at his station and talk. This is heard over the entire circuit as is the response from the conference moderator or lecturer. This system has proved to be a very intimate form of instruction and yet one in which the participants can maintain anonymity if they wish. We have experi- mented with several forms of instruction/discussion programs, most of which have been successful. We have pretested, posttested, and late postte5ted physicians and demonstrated to our satisfaction that transfer of information is taking place. One final word about the Telephone/Radio Conferences: In one week various faculty members from the university may meet for an hour each with perhaps 300 physicians, 450 nurses, 300 medical technologists, 250 x-ray technologists, 125 hospital administrators and 100 veterinarians. None of these people have to move more than 20 miles from the community in which they are delivering health care, and the vast majority attend in their home communities. Programs for pharmacists, nurse anesthetists and possibly medical secretaries will be presei~ted in the winter and spring. (2) The Dial Access Medical Library was instituted In April of 1906 with 88 cartridge tapes of approximately five minutes playing time each. The idea of it was to have available to physicians in Wisconsin new information or informa- tion of emergency nature when they needed it. The subject matter range is from the treatment of diabetic coma to the management of bee stings. Physicians wish- ing informaion have merely to call the library at any time of the day or night and within 20 seconds the tape they have requested will be played for them over the telephone line. The library is located in the University Hospital which has a 24-hour-a-day staff on duty. Evaluation of this service is difficult at the moment, but we do have scattered evidence that the library has contributed to improved patient care. Due to lack of funds to promote it, we have been able to have only one mailing of the brochure to Wisconsin physicians. This was in August, 1966. Demonstrations have been given nationally through an AT&T exhibit at various conventions and during Bell Telephone seminars in Chicago and New York. We have recently been funded under the Wisconsin Regional Medical Program and the United Health Fouhdations to enlarge the library and set up a duplicate service in Milwaukee. Funds are now available to publicize extensively and, more important, to evaluate the role the dial access library may play in patient care. One great theoretical advantage it has is that the faculty of the University of Wisconsin reviews the tapes regularly (at least once a year) so that the calling physician knows that the information he is obtaining is not more than 12 months old. In many instances we liave inserted the date the iecording was made. A second dividend from the library is that it gives those of us who have the responsibility of programming future courses an objective account of what physicians in practice want to know. In addition, the calling physician finds out from the tape who the local expert on the subject is and may call, him directly for further information. I would like, if I may, to insert some thoughts which we have concerning other forms of communications in medical practice and medical. education. You have seen and heard of some of the practical uses of television in service and education. PAGENO="0064" 1208 COMPETITIVE PROBLEMS IN THE ~ETJG INDUSTRY (1) Television as a vehicle for continuing education of the health professions Is being extensively utilized throughout the nation with mixed reception. En- thusiastic reports are tempered by back-room conversations where the diffi- culties, expenses and time-consuming demands of the medium are discussed. We have doubts as to whether we can transform our busiest, yet most effective didac- tic and bedside teachers into television performers. We do not believe that effec- tive teaching can be accomplished without students being able to question the teacher. The more sophisticated the student, the more he requires discussion with the teacher. We applaud the prodigious effort which is necessary to de- velop educational television to meet the standards of the sophisticated medical audience of this decade. (2) We have greater interest in the potential of slow-scan television as the vehicle of our major continuing education effort. There are many reasons for this but essentially slow-scan television will enable us to transmit live con- ferences at the medical center to as many hospitals as have the receiving equip- ment with no more than two hours of preparation time and at a cost significantly lower than regular television. The drawbacks of slow-scan do not appear to us to be critical in the teaching function. (3) International medical research seminars would seem to be a logical use of satellites for the exchange of information between widely scattered groups of researchers working intensively on common problems. Again this holds promise for great reduction in travel to international meetings where exchange of ideas takes place in the rather artificial surroundings of a large convention center. Slow-scan television is adaptable to the simplest satellites which have radio receiving and. transmitting ability. The University of Wisconsin has a proposal in to the National Aeronautics and Space Agency to utilize one of their weather satellites to link our Medical Center researchers with. research scientists at 4 medical schools in ~apan, 4 in Australia, one each iii Canada, Hawaii, New Zealand and Mexico. We would conduct these pilot conferences in the same manner as we do the telephone/radio conferences' in Wisconsin. In conclusion, I would like to. say that in my view we are on the threshold of many new and exciting methods of making available to physicians and allied health personnel the means by which they can review and update their current knowledge, acquire new knowledge, and yet maintain the health care responsi- bilities they hold in their own communities These methods will make it possible to meet the specific needs and program to the varied learning habits of these health practitioners. It is possible to' transmit conferences being regularly held at the medical center with two-way communication to any or many `parts of the state or country, so that the Wisconsin Idea of the university without walls can come to pass. The key to this venture, as it is to so many other ventures in our world today, is communications. The Wisconsin telephone company has given us every encouragement and cooperation as we questioned, complained, . cajoled, de- manded, and decided upon ventures that were as new and as radical to the company as they were to us. We worked, almost failed, and it seems now have succeeded in providing a service to health professionals which is filling a significant need in Wisconsin. SECTION III ~ingZe Concept F&lms -There have been many techniques devised in the past 10 years which bare aimed at better care for the seriously ill patient Many of these techniques are new and complex but others are comparatively simple and should be mastered by most practicing physicians When described in texts techniques sound more complex than they actually are and there is reluctance to undertake a procedure the physican has never seen At the present time many of these procedures are being performed only in uni~ ersity medical centers or large community hospitals with regularly conducted in service train ing programs Nevertheless these procedures are as life saving in the smaller community hospitals and may contribute to patient comfort wherever the patient may be hospitalized There seemed to be virtue in making films available to physicans in all areas of Wisconsin demonstrating the simpler techniques For convenience the films aie provided in self re~inding cartridges and shown in automatic projectors PAGENO="0065" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1209 All the physican has to do is insert the cartridge and press a lever and the 5-10 minute film is shown for his personal study. He may repeat It as many times as he wishes. The films which we are currently circulating is Wisconsin have thus far been met with great interest, and enthusiasm by the viewers. Once again we are in the tedious process of evaluating this form of educational venture. The Picture-Phone would be a logical use for these types of demonstrations so that the physican could review these techniques at his leisure and, when required to utilize a technique, he could view it in much the same way as the dial-access li'brary is utilizing sound tapes only. Further, it is conceivable that utilizing the Picture-Phone and Touch-Tone the computer would be able to take a patient's history for the physician before the patient sets foot in the physician's office. This would, in my view, conserve a large portion of the physician's time for `the more important judgment and decision making process which is the physicians primary role. Mr. CALLAHAN. With your permission we will move ahead to item 14, discussing closød circuit television. I would like to describe two examples of how closed circuit television is being used to meet the urgent needs of continuing medical education. One is the Louisiana Hospital Television Network. The second is the Nebraska Psychiatriô Institute television system. Louisiana hospital officials seeking a new way to provide improved training procedures for medical students, doctors, and hospital per- sonnel throughout the State, have established a closed circuit television network that will link all of the State's major hospitals and medical schools. The first leg of the medical educational television network is in service between Baton Rouge and New Orleans. The second and third phases will be in service by January. Fourteen location's will then be participating in the medical TV educational system. The Louisiana Hospital Television Network will be the ~first closed circuit TV system providing medical training statewide and has drawn the interest of State hospital departments from all over the country. The network was conceived in May of 1964 by the Louisiana State Hospital Board. It will provide for doctors and specialists at State hospitals in scattered areas of the State a practically unlimited source of medical information from Louisiana State University, Tulane Uni- versity Schools of Medicine, Charity Hospital in New Orleans, and Ochsner Foundation Hospital in suburban New Orleans. In addition to material for interns and residents on matters such as surgical procedures, programing will include psychiatric confer- ences and continuing education for nurses and attendants. Training nurses and aids in the proper use of new equipment and procedures can be carried out effectively with closed circuit television. Not only do "live" demonstration's increase the speed and retention of education, but taping the programs permits all the shifts of the hospital staff to benefit. Lectures on highly specialized topics in which the availability of specialists is limited, infrequently occurring surgical procedures and demonstrations of techniques so complex and expensive as to prohibit their repeated performance can be recorded and viewed again and again. This slide shows a surgical anatomical demonstration performed by a professor of physiology at LSU. The observers are doctors from various parts of the State enrolled in a continuous education program. 81-280---68--pt. 4-5 PAGENO="0066" 1210 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY In delicate operations, only a few persons can view the operation. TV will allow students statewide to view the procedure live or later on video tape. A full production studio is planned for the Earl K. Long Memorial Hospital in Baton Rouge which will be completed in early 1968 and a mobile unit will enable lectures and operations at any point in the State to be videotaped for later use. In the inauguration ceremonies, the director of the State department of hospitals noted that the system will "make the really great men of medicine universally available." Certainly as other State medical systems are established and interconnected that prediction should be realized. (The illustration referred to follows:) Mr. CALLAHAN. One of the real pioneers in the application of closed circuit television to medical training was the Nebraska Psychiatric Institute centered at the College of Medicine at the University of Nebraska in Omaha. The affiliated State hospital is at Norfolk, 112 miles away. Because of the distance, the accessibility of resources be- tween locations was limited. Two-way closed circuit televisIon links the two institutions on a 24-hour basis. This makes it possible for per- sonnel at the University to view patients or other subject material at the hospital while, simultaneously, personnel at the hospital can view psychiatric specialists or presentations at the University. This television system has been in operation since December 1964. Dr. Cecil L. Wittson, dean of the Colle~e of Medicine at the University of Nebraska, will describe the interesting applications of this system. Dr. Witts'on is in New York and will address the committee by Telelecture. Dr. WirrsoN. PAGENO="0067" COMPETITIVE PROBLEMS IN THE 1~RUG INDUSTRY 1211. STATEMENT OP DI~ CECIL L. WIT'TSON, DEAN, UNIVERSITY OP NEBRASKA COLLEGE OP iV[EDI~INE, OMAHA, NEB1~. Dr. WIrrsoN. Two-way closed circuit television makes possible electronic face-to-face communication between indftiduals and/or groups, though they may be separated by any number of miles. In Nebraska we have used this communications tool for 3 years to link Nebraska Psychiatric Institute at the University Medical Center in Omaha and Norfolk State Mental Hospital~ 112 miles `away. Though this State hospital is a progressive institution, it still shares common problems with many such facilities throughout the country, problems such `as recruiting and holding staff, providing ade- quate staff education programs, and l'ast, but far from least, the prob- 1cm of utilizing much-needed specialist services, available only at a large but remotely located medical center. In 1964 we proposed to use two-way television to fill some of these needs and we received a 7-year grant from the National Institute of Mental Health for a pilot project. Northwestern Bell Telephone installed and now maintaihs our two- way transmission system which is in actual use an average of 50 hours each week. Educational uses Now, to give you some idea of the potential of the system, let me describe t'o you just a few Of the uses: Various disciplines in the two institutions-the nurses, social work- ers, and vocational rehabilitation counselors, each meet regularly for joint seminars, lectures, and videotape presentations. (The illustration referred to follows:) PAGENO="0068" 1212 COMPETITIVE PEOBLEMS IN THE DRUG INDUSTRY Dr WITTSON Two way television makes it possible for the pro fessional staffs of the two institutions to join in weekly grand rounds, with patient presentations and staff discussion Distinguished visitors who come to lecture at the University of Nebraska College of Medicine in Omaha are also shared with the State hospital via television Various medical college personnel frequently use the system to pre- sent programs to specific hospital or community groups. } or example, the Six County Medical Society in the Norfolk area devotes two of its monthly meetings to continuing medical education These programs are presented by the faculty of the medical college in Omaha, using two-way TV. Uses for patient service New and improved patient services are now available at the State hospital, too. I he medical college neurologist spends 1 hour each week observing neurologic examinations, or reading electroencephalograms, thus sup- plying a much-needed service. Consultation is also provided in such areas as child psychiatry, speech diagnosis and therapy, statistical methods, and psychosomatic medicine. Ward administration is considered one of the most effective uses of the system. There are 27 wards at the State hospital and not enough staff psychiatrists to go around. To help relieve this shortage a Nebraska Psychiatric Institute psy- chiatrist began administering wards on television in January of 1964. The change in patient care and `staff attitudes was rapid. Success of the project was beyond expectations. Today, three medical college psychiatrists administer 10 wards at the State hospital, spending television time each day with both staff and patients Forty three percent of the patients at Norfolk State Hospital are from the Omaha area Each week about 20 families use television to visit these patients, making it possible to keep the absent member in the family Unfortunately, time does not allow description of the many other uses, such as vocational counseling, placement and followup of the patient i eturned to the Omaha area, coordination of efforts of the welfare agencies working with the patient and his family, the evalua tion of new admissions by Nebraska Psychiatric Institute psychia trists, and the list goes on and on Su~mmary During the few years the system has been in operation its effects have been felt at both local and national levels Locally, utilization of the two way closed circuit television connec tion is improving the professional climate of Norfolk State Hospital, and improving its patient services Nationally, the program is serving as a pilot project, demonstrating the worth of modern methods of communication as a partial solution PAGENO="0069" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1213 to the problems which confront many mental institutions in this country today. Mr. CALLAHAN. Thank you, Dr. Wittson. Mr. Chairman, do you care to ask any questions of Dr. Wittson? Senator NELSON. I thank Dr. Wittson very much for taking the time to make this valuable presentation to the committee. I do not have any questions. Mr. CALLAHAN. Thank you very much, Dr. Wittson. Your partici- pation is very much appreciated. Dr. Wrr'rsoN. Thank you. Mr. CALLAHAN. Goodby. Dr. WITTSON. Goodby. Mr. CALLAHAN. Mr. Chairman, this is an appropriate time, I believe, to demonstrate two new communication services which we believe promise to open up new opportunities for the medical profession. One is Touch-ToneS service and the other is Picture-Phone service. I will discuss Touch-Tone telephone service because really in the traditional use, for people to talk to people, Touch-Tone service is different only in that it employs electronically generated tones instead of electrical pulses in the dialing funétion. I will demonstrate. (Whereupon Mr. Callahan demonstrated the Touch-Tone feature described.) Mr. CALLAHAN. This feature becomes very important, however, after the call is dialed, and the called station answers. Whereas, the electrical pulses of the dial phone do not pass through the telephone network after the call is connected, the Touch-Tone signals do. Therefore, Touch-Tone makes it possible to communicate not only verbally but with anything which can interpret the Touch-Tone signals-a business machine or computer, for instance. I will demonstrate how this capability makes it possible to retrieve information from a tape library with no attendant assistance. It will be apparent how this capability will serve medical tape libraries such as the University of Wisconsin's as the number of tapes in the library and the volume of calls becomes sizable. Touch-Tone phones can also carry on a dialog with computers equipped with voice answer back capability. I will demonstrate this by calling a computer at the Bell System Data Training Center in Cooperstown, N.Y., and performing some mathematical problems. The added capability of man-to-machine communication provided by the Touch-Tone phone, coupled with its very low cost, and the nearly universal nature of telephone service, I believe, offers exciting new opportunities to the medical profession. (Whereupon, Mr. Callahan demonstrated as described.) Senator NELSON. How does this system differ from what Dr. Meyer presented? Mr. CALLAHAN. Only that it makes it possible for a physician or anyone who has Touch-Tone telephone service to dial into a tape fa- cility any time of the day or night and select programs at random from the storage location. There is no need to have an attendant. Senator NELSON. All it eliminates is the conversation with the librarian; is that correct? PAGENO="0070" 1214 COMPETITIVE PROBLEMS IN THE DRIJG INDUSTRY Mr. CALLAHAN. Yes; the need to maintain soin~one on duty at all times. In the beginning of such a system, it doesn't make much dif- ference economically. But as traffic grows and the number of tapes to which access is available continues to increase and runs into hun- dreds and ultimately into thousands, possibly, then this ability to select any one of those tapes at random becomes very valuable. The second application of Touch-Tone phone service I would like to demonstrate relates to the computer demonstration we had earlier. As you are aware, Mr. Chairman, computers today have the ability not only to generate signals to a teletypewriter to type out informa- tion, they also have voice-answer-back capability or can be equipped with voice-answer-back capabilities so they can in effect converse by telephone with a human being. In order to demonstrate this feature and the ability of the Touch- Tone telephone to communicate with a computer, I would like to demonstrate how you can do some simple mathematics with the com- puter and the Touch-Tone telephone. I will call the computer at the Bell System Data Training Center in Cooperstown, N.Y. (Whereupon, Mr. Callahan demonstrated to the subcommittee the computer technique described.) Senator NELSON. What is the purpose of this? I mean what par- ticular aspect of it, the mathematics aspect? Mr. CALLAHAN. As an actual fact last year, under the auspices of the IBM Corp. and New York Telephone, some high school students in New York City used the Touch-Tone telephone and a computer to do their mathematics homework. Senator NELSON. Very practical. Mr. CALLAHAN. The student sets up the problem, and instead of having to go through all the trouble of working it out, he sets up the problem and puts it into the computer If he did it right, the answer will be right So what it does, with the computation capability of the computer, it will relieve from professional people the necessity of doing the burdensome labor of mathematical calculations. Senator NELSON. How would you use that in medicine? Mr. CALLAHAN. May I defe.r that question to Dr. Meyer? Dr. MEYER. We spend a fair amount of time doing physiological calculations. The one that drives me mad is the calculations that we were following of cardiac catheterizations where we calculate the flows and the resistances across valves or in holes in the heart and various physiological data like this. We get a certain amount of data and then it has to be processed in several different ways. Now, there are many, many types of uses where things are reduced to numerical figures, where physiological data is reduced to numbers and must be manipulated in the form of numbers to come out with some understanding, some understandable type of result. This is the type of thing that we would use it for in medicine. Senator NELSON. All right. Mr. CALLAHAN. Thank you, Dr. Meyer. The impact of Touch-Tone telephone, Mr. chairman, in medicine or in any other profession we believe is not very clear. It is a new service and like all other commnnications services it is going to have PAGENO="0071" COMPETITIVE PROBLEMS IN TITE DRUG INDUSTRY 1215 to stand the test of time and have an opportunity for people like Dr. Meyer and university people to begin to use it and to experiment with it. So that is why I say it has great potential, promise, but not such that we can document it. As I said, another new service is Picture-Phone and that really isn't a new service because although it is in operation commercially between Chicago, New York, and Washington, D.C., it is in such limited availability, and will be certainly until the seventies, that it would be more. appropriate to describe it as a forthcoming service rather than a new service. But looking to the future it seems that Picture-Phone service even has greater-far greater-implications than Touch-Tone because besically it is a Touch-Tone telephone, with the added dimension of vision. It will be able to do all the things Touch-Tone telephone can do. Not only will we be able to talk to other people, but we will be able to see each other while we talk. And as Touch-Tone telephone has the capability of talking to business machines or computers, so will the Picture-Phone have the capability of talking to a computer. The com- puter will be able to answer either in the voice mode or with a picture pre~ented to the viewer. I think the best way to appreciate Picture-Phone is to use it. I will call you on the Picture-Phone set, Mr. Chairman. (Whereupon, Mr. Callahan demonstrated Picture-Phone for the subcommittee.) Senator NELSON. What is the value of this as a medical matter? Mr. CALLAHAN. That's another question that I would like to defer to Dr. Meyer if you don't mind. May I demonstrate, before Dr. Meyer comments on that, on a second application of Picture-Phone. In ad- dition to its ability to show each `other's face, I would like to simulate a call to a computer and show the computer answer back. We are not equipped to do the demonstration from the caucus room to the Bell Telephone Laboratory computer in New Jersey. I will use slides to simulate the responses. So if you don't mind, Senator, I will say goodby on our Picture-Phone nOw and hang up. (Whereupon, the demonstration with Picture-Phone was con- cluded.) Mr. CALLAHAN. By using the Touch-Tone buttons of the Picture- Phone set, we could call a computer. It would answer us with a mes- sage presented visually on the Picture-Phone. (Whereupon, Mr. Callahan demonstrated the system described.) Mr. CALLAHAN. That concludes the demonstration of the capability that Picture-Phone will offer when it is available beginning in the seventies. If you now, Mr. Chairman, want to hear anything further about the medical implications of this from Dr. Meyer, perhaps he may comment. Senator NELSON. I do not have any more questions. Mr. CALLAHAN. Thank you. Finally, then, Mr. Chairman, we would like to discuss briefly a concept for a drug information system about which you have evi- denced considerable interest and a subject with which this subcom- mittee is particularly familiar. A subject with which this subcommittee is particularly familiar is the need for an effective communications system for drug informa- PAGENO="0072" 1216 COMPETITIVE PROBLEMS iN THE DRUG INDUSTRY tion, including continuing education for physicians and pharmacists, as well as for alerts on adverse reaction and recalls `1 lie need to quickly reach the large number of people who need to know and still restrict the information from the general public presents a real chal- lenge in planning and developing a system at reasonable cost. A drug recall, for example, should alert 286,000 physicians, 55,000 pharma- cists, 22,000 nursing homes, and over 9,000 hospitals, or a minimum of 375,000 locations Furthermore, we understand that recalls occur on an average of two to 10 times a week. The Food and Drug Ad- ministration is considering a plan which would capitalize on the uni- versal, yet discrete nature, of the telephone network. Initially, the national news services also would play a key role in the plan. The plan would combine two well-tested communications arrange- ments now in use. From the viewpoint of the doctors and others au- thorized to receive the drug information, the plan would be similar to the University of Wisconsin tape library. They would dial into a recorded announcement using unpublished telephone numbers which would be released only to authorized professional people To dissemi nate the information quickly to the local points where the announce- ment machines are located, teletypewriter messages would be sent to a point in each State which would in turn send it to the local announce ment points. This is very much like the national law enforcement teletypewriter system which links 48 States for fast, secure dissemi- nation of law enforcement messages. But an important question remains. How do we notify the physi- cians, pharmacists, and others that there is a drug-alert message for them to receive? An approach being considered is to use the national news services and the local newspapers When a drug alert was sent out, the newspapers could carry an inobvious signal such as an asterisk or other special mark in a specific place which would be an indication to authorized people If and when the system reached the point where urgent or im- portant iñfórmatiOn was carried daily the need. for. a notification scheme might be obviated. For instance, it might be used for the intro- duction of new drugs supplementing the present detailing system or for the continuing medical education of doctors in connection with beneficial or detrimental effects of certain drugs. The plan could be put into effect on a trial basis in selected regions without need for any capital investment and a relatively small monthly charge in each announcement location. After the plan was working for a reasonable period of time, the effectiveness of this form of com- munications could be determined. Further studies could then be made to decide on the value of developing a more sophisticated communi- cations system, if needed. Senator NEr~soN. Does yours relate only to the question of notifica- tion of physicians about a drug that has been recalled? Or, does your proposal also relate to the question of drug information centers in the way Dr. Meyer discussed them? Mr. CALLAHAN. Our proposal at this time is not that specific, Mr. Chairman. The Food and Drug Administration, I believe, is concerned primarily with the dissemination of emergency information. The sys- tem, as I described it, doesn't really even require new equipment to be installed in each State. PAGENO="0073" COMPETITIVE PROBLEMS IN TH~ DRUG INDUSTRY 1217 For instance, if in Wisconsin the University of Wisconsin were determined to be the dissemination point, then a teletypewriter pres- ently installed at the university could be used to receive this message and the university in turn would disseminate it to points through- out the State, possibly in each county, depending on what the traffic requirement would be, so that the information could be put on a tape and each doctor would only have to make what amounts to a local telephone call to gather the information. Senator NELSON. Does that cover everything? Mr. CALLAHAN. Yes, sir. I would like to briefly conclude this pres- entation on an observation about the regional medical center program now under development. I hope this presentation has demonstrated that communications can produce new efficiencies in many ways. Transporting a patient to a distant hospital or clinic for an on-the-spot examination and diagnosis will seldom be necessary. Pressure on the supply of beds in the large institutions will be relieved. Waiting for admission to those institu- tions will be greatly reduced, if not eliminated. The problem that results from a patient's returning home from a distant medical facility to a practitioner who has not participated in the medical discussions and who may not be entirely confident of. being able to provide the special treatment prescribed, which is com- mon in psychiatric cases, will occur less frequently. The hospital of the future will rely more heavily on physiological monitoring, com- puter-assisted diagnosis, television viewing of patients with concurrent consultation by doctors; and distance need not be a deterrent. Much more use will surely be made of data processing and information retrieval over the communications network. These capabilities are available right now. The communications developments discussed today show the trend toward community and regional centers linked by communications to serve hospitals and the medical profession. In turn these local centers will have access to State, area, and specialized information centers, teáhnical information centers, and other national resources or medical libraries. such complexes will require coordinated voice, video, and data communications, of whatever kind is needed, for administra- tion, patient care, research, and education. This is the overall communications concept that will be an indis- pensable part of the regional medical programs initiated by the Surgeon General. (The overall communications concept illustration referred to appears on next page.) Mr. CALLAHAN. Through the use of the nationwide communications network, any of the facilities available in State, regional, or national information and resource centers and medical libraries can literally be put at the fingertips of the doctor. Whether in his home or his office, at the clinic, the hospital, or at an extended-care facility, the doctor will be able to get the information he needs, when he needs it, in the form he wants it, by telephone, by telewriting, by television, or slow-scan television to retrieve X-rays or other photos, by facsimile to duplicate printed material, by tele- typewriter for printouts or displayed on a cathode ray tube. PAGENO="0074" 1218 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY MEDICAL INFORMATION AND RE$OURCE CENTERS ~i1 ~Jzw~M*mN cr~~T~ Any of these can also be available on a larger scale for group partici pation 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 he 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 ap- preciate 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 very much. This will be most valuable for our record. The subcommittee stands adjourned. (Whereupon, at 2:55 p.m. the subcommittee adjourned.) PAGENO="0075" (IOMPETITIVE PROBLEMS IN THE DRUG INDUSTRY THURSflAY, NOVEMBER 9, 1967 U.S. SENATE, MONOPOLY SuBCOMMITTEE OF THE SELECT CoMMITI~EE 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. Gross- man, 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 pro- ceed 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 OP DR. ~1AMES L. GODDARD, C:OMMISSIONER OP THE FOOD AND DRUG ADMINISTRATION, U.S. DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, ARLINGTON, VA.; ACCOM- PANIED BY PAUL A. PUMPIAN, DIRECTOR, OFFICE OF LEGISLA- TIVE 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 coth- pendium 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 sub- committee. 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 1 See complete prepared statement of Dr. Goddard, p. 1261, infra. 1219 PAGENO="0076" 1220 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 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 volumi- nous package inserts as such a compendium could appropriately re- place this type of labeling 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 phai macist'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 prmting, prep'iring, 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 add- when 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 ~ere 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 dragging- I 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 PAGENO="0077" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1221 Research Board of the Academy of Sciences ~tnd 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 Associa- tion 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, rather- 95 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 infor- mation on all of the drugs available. The format we have discussed in some detail. There doe's 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 ge- neric 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 Associa- tion's Council on Drugs feel that this is the only way in which a com- prehensive, 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 serpen- tina 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 in- gredient 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- PAGENO="0078" 1222 CO~nETITIVE PROBLEMS IN TIlE DRUG INDUSTRY dividual firms would probably not be listed in such a compendium. But we are interested in having those firms that produce and distribute na- tionally 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 pos- sible 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 PDIR were willing to engage in that. I say this because PDR has a great level of accept- ance in the couirtry, 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 PDR. 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 warn- ing 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 effec- tive are the package inserts-do the dodtors 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 p~ickage insert. I do not think many physicians are going to read this, if he even gets it. PAGENO="0079" COMPETITTV~E PROBLEM~ IN TI~ 1~RI1G INDUsTRY 1223 It has selected laboratory data for patients mi this drug in tabular form, for example. It is iii very small print. : The answer is "No;" but the physician does get one particular form, or package insert on biological products, and I think that this should be continued. It is important. These other package inserts, in all sorts of sizes, are printed on what i~ commonly called in the trade, "bible paper." Mr. GoimoN. What do' you mean by "bible paper"? Dr. GODDARD. Well, it is very thin. Mr. GORDON. You need a magnifying glass to read the print? Dr. GODDARD. That is true. Mr. GORDON. Dr. Goddard, doesn't this present situation really make the doctors more dependent on drug advertising and promotional activity? Dr. GODDARD. Yes. Of course, that is not their only source of informa- tion. But, as I have pointed out on numerous occasions, the industry does spend a significant amount of its income to educate the physicians through advertising. Mr. GORDoN. Are you using that word with quotation marks? Dr. GODDARD. Well, I say advertising in this field is a form of edu- cation, and I am serious when I make that point. And the AMA also now recognizes this point, apparently in response to a recent position the Internal Revenue Service took with respect to their income on gen- eral advertising. They pointed out this was different from routine advertising and that it did serve an educational purpose. And I must agree with that. Mr. GORDON. Who' took that position? Dr. GODDARD. The AMA. Mr. GORDON. How about the IRS? Dr. GODDARD. They haven't responded `to this, to my knowledge. But advertising apparently does influence the physicians' choice of the drug. Therefore, I think it is educational. And we are anxious to have a comprehensive, more impartial source of drug information readily available to every physician, every pharmacist and every hospital kept up to date with accurate prescribing information. Senator NELSON. I don't understand the mechanics of the delivery of the package insert. The doctor himself in hi's office' just writes a pre- scription. The drugs, with some rare exceptions, come into `the phar- macy. Does each package of prescription drugs, no matter how small, have to have an insert? Dr. GODDARD. That is correct. Senator NELSON. `So then the doctor does not come `in contact with that package insert- Dr. GODDARD. Except for biological products, which tend to go `di- rectly to his office. Senator NELSON. What do you mean `by "biological"? ~ Dr. GODDARD. Well, vaccines and things of this nature, you see. Senator NELSON. That he administers himself? Dr. GODDARD. That is correct. Senator NELSON. I see. Dr. GODDARD. And intravenous therapy in ward's in `the hospital `are accompanied by the package insert. But `by and large these are re- PAGENO="0080" 1224 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY ceived by the pharmacist and thrown `away after he has a file of them, you see. The physician can call the pharmacy and get information on a drug. And some of them do this. But `by and large `they do not see them. So the system does not accomplish what it `set out to accom- plish `at all. Senator NELSON. And do I understand that it is your position that if an acceptable compendium were adopted and published, you would be willing to remove the requirement that an insert be used except for biologicals? Dr. GODDARD. That is correct. Senator NELSON. Is `the insert required by law or is it the result of an administrative ruling? Dr. GODDARD. Those are the conditions for the approval of a new drug. Yes, sir; statutory. Senator NELSON. By statute or by a ruling of the FDA? Dr. GODDARD. Statute. Senator NELSON. So you would have to change `the law respecting the insert- Dr. GODDARD. Mr. Goodrich, do you want to comment on that? Mr. GOODRICH. We have authority to exempt a prescription drug from the requirement of that detailed label where it is not necessary for the protection of the publi'c health. We could do so if we had an alternative compendium available to the physici'an. Then it would not be necessary to carry that information in the packages. Senator NELSON. Go ahead, Doctor. I have some more questions, but I think you cover some of them in the statement. Dr. GODDARD. Let me just skip to the third page of the statement. These label requirements are obviously most essential for proper usage and in order to monitor recalls. The concept of a compendium should in no way abrogate such label information. Additionally, the regulations require that- Labeling on or within the package from which the drug is to be dispensed bears adequate information for its use, including indications, effects, dosages, routes, methods, and frequency and duration of administration, and any relevant hazards, contraindications, side effects, and precautions under which practition- ers licensed by law to administer the drug can use the drug safely and for the purposes for which it is intended, including all purposes for which it is' adver- `tised or represented; and If the article is subject to-the new drug, antibotic and insulin provisions-of the Act, the labeling bearing such information in tb.e labeling authorized by the approved new-drug application or required as a condition for the certification or the exemption from certification requirements applicable to preparations of insulin or antibiotic drugs: Provided, however, That the information required by (the above paragraph) may be omitted from the dispensing package if, but only if, the article is a drug for which directions, hazards, warnings, and use information are commonly known to practitioners licensed by law to administer the drug. The information required by this regulation is appropriate and use- ful. I wouldn't believe that anyone would say that the physician relies on promotional literature in medical journals and publications such as the PDR. As you know, we have instituted several regulatory ac- tions against drugs because of their advertisements, and we are pres- ently requesting four drug firms to issue "Dear Doctor" remedial letl ers in order to correct PDR monographs. PAGENO="0081" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1225 Mr. GORDON. Doctor, can you give us the names of those companies, and also the drugs involved? Dr. GODDARD. Yes. I can give you tho~e now or for the record. Mr. GORDON. Could you read them, and then we will put them in the record, also. Dr. GODDARD. S. E. Massengill, three products: Predsem, Salcort, Salcort-Delta; Organon: Cortrophin Gel, Cortrophin-zinc, Hexadrol phosphate injection, Hexadrol phosphate tabs and elixir; Lakeside Labs, Norparmin. Armour has not been issued, and I would prefer not to mention the drug yet. (The information referred to follows:) STATEMENT OF THE FDA CONCERNING COMPANIES REQUESTED To CORRECT PDR MONOGRAPHS The three pharmaceutical companies requested to issue "Dear Doctor" letters to correct misinformation occurring in the Physicians' Desk Ref erciwe, and the specific drugs involved are: S. E. Massengill Company: Predsem; Salcort; Salcort-Delta. Lakeside Laboratories: Norparmin. Organon, Inc.: Cortrophin Gel; Cortrophin Zinc; ilexadrol Phosphate In- jection; Hexadrol Tablets and Elixer. Senator NELSON. Is there approval required by FDA of advertising put in the Physicians' Desk Reference? Dr. GODDARD. No. That is, of course, a form of labeling, and we re- view it. And if we find flaws there, we then direct the firms to take remedial action. Senator NELSON. But you do not review it prior to publication? Dr. GODDARD. I do not think we should. I think the burden is on the firms. We have explained what the 1962 amendments meant. We are now prepared to explain in even further detail the regulations that we have issued as proposed regulations. And so I do not believe we should have to assume the burden of reviewing prepublication copy. It is quite clear what is required. It should be in fair balance. Physicians should be warned of the bad effects of the drugs as well as told of the good effects. This type of surveillance of ~advertising coupled with our admin- istrative action will, I believe, substantially increase the quality of such promotions. Nevertheless, advertising will remain advertising. The information contained in package inserts is essential to counter- balance the claims made in many drug promotions. As I have pointed out, these inserts are not accomplishing this function, primarily be- cause it does not reach the physician; secondarily, because it is not in readable form. Now, the compilation of a drug compendium will be a difficult task. The central issue, from FDA's standpoint, is how to abbreviate the package insert material without compromising the public health pro- tection that full information can provide. If we are to condense such labeling, it will still have to adequately reflect current knowledge about the drug. However, we believe that an objective summary, approved by FDA, would be preferable to a package insert which is never read. Also, we believe it will be possible to group several drugs into one category with a general summary covering all the drugs included in the group. 81-280-68-pt. 4-6 PAGENO="0082" 1226 COMPETITIVE PROBLEMS IN \THE DRuG INDUSTRY Senator NELSON. Are you satisfied that you have sufficient knowl- edge, have sufficiently analyzed the problems so that you could, in fact, undertake to develop a compendium in a reasonable amount of time? Dr. GODDARD. I believe it can be done. As I say, the best way to do it is outside of the Government, in my opinion. It is important enough to me that if it is absolutely necessary, then we can do it as a Federal agency. Senator NELSON. You would have to be a cooperating agent, any- way, wouldn't you? Dr. GODDARD. Yes. And I would still prefer, if we had to assume the direct burden, to have much of the work done by contract. Senator NELSON. And supposing the industry decided they would go ahead, they would, of course, work with you? Dr. GODDARD. Yes. Senator NELSON. Do you have any notion, as a practical matter, as to how long it would take to develop and publish an acceptable compendium? Dr. GODDARD. I think about 18 months would be realistic. It is a large undertaking. Of course, I am optimistic. I think we can do it in that period of time. There are some techniques now available that would lend themselves readily to the production of a volume of this type-the computerized storage of information. Of course, as Mr. Goodrich reminds me, and I bring up once again, the NAS summary is now coming to us, and this will be an integral and important part of that task. Senator NELSON. What are those summaries? Dr. GODDARD. These are summaries of their judgments as to efficacy of the drugs marketed between 1938 and 1962. And these represent the opinions of some of the top scientists in the United States who met and discussed drugs that were grouped in 27 categories; 3,000 drugs were involved. Mr. GOImON. Dr. Goddard, when you talk about efficacy, this is not relative efficacy, is that correct? Dr. GODDARD. No, sir. Mr. GoRDON. This is merely efficacy as compared to a placebo-better than nothing, is that it? Dr. GODDARD. Well, they are making judgments, sort of putting these drugs in pigeon holes, if you will, of efficacy. There are no doubts about digitalis you see, for example. We have good direct measuring capa- bilities that say digitalis changes the heart rate, slows up the heart, increases the force of it. So we have good information. And with those that ar~ probably effi- cacious like digitalis, where there is a body of experience in literature, the firms were given the opportunity to pick the best references that supported their claims for review. And, of course, this is primarily a review of the claims that are made for the drugs, too. So the next category would be probably "nonefficacious" and then "not efficacious." "Efficacious but" is another category. That would refer to trimming back some of the claims that are made, you see. So the judgments are made against the promotional claims the firms have advocated for this particular drug, not relative evidence. PAGENO="0083" COMPETITIVE PROBLEMS IN THE: DRUG. INDUSTRY 1227 Mr. GORDON. But the compendium that we are discussing today is not going to include anything on relative efficacy either, is it? Dr. GODDARD. No. Mr. GORDON. Well, how is a doctor~ going to know' which is the `best drug to prescribe for a particular illness from `a relative point of view? Or. GODDARD. Well, t'he physician has to make these judgments. all the `time. And the information contained in the compendium would be a useful guid'e to him. But there would not be a direct comparison of this product to that product, is the point I am trying to make. Mr. GORDON. And yet the doctors who have come before our com- mittee, who are from the academic field and who are connected with large and important hospitals have stated that the problem of relative efficacy is of extreme importance and should be covered by somebody someplace. Dr. GODDARD. Look, efficacy is a function of looking at the drug with respect to the claims tha't can `be supported for it in one sense. Now, this National A'cademy report and the material that i's em- bodied in the compendium will be restricted as far as claims are con- cerned-I mean, th.e claims have to be `substantiated. So in that sense, yes, relative efficacy `does get into it. But we have to be careful that we do not get in the business of this antibiotic versus `that antibiotic, and permit `the same claims for both. What we are saying is that the claims have to be substantiated, and thus the physician can draw conclusions about relative efficacy. Senator NELSON. Go `ahead. Dr. GODDARD. Another pressing consideration is whether `or not the package insert should `be `completely `done away with in view of the compendium, or merely the requirement of distributing it with eac'h package. As complete labeling i's the `basis of new drug `approval, we recommend that `such labeling `be retained, `and additionally, the pack- age in'sert type of informatioii `should remain `available for person's, such as clinical researchers, who are in need `of more exhaustive data. In a few instances, it probably will not be possible or even desirable to provide for `an exempti'on from distributing the package insert. For example, I mention the biologicals. That information needs to get to the physician for his views at the time of `administration. Another factor which prompts our endorsement, of `the compendium is that it will list all drugs, thereby increasing the physician's prescrib- ing range and, of course, pricing information could be included in a supplement thereby fostering more economic prescribing. However, `listing in the compendium `should n'ot be construed `as governmental approval. As I mentioned `before, we `are n'ot in `a posi- tion to guarantee the therapeutic equivalence of all' drugs or hence their quality. We are striving toward this goaL And I mentioned, also, the important role the efficacy review `being carried out by the Academy will play. Now, with sufficient funds-and we estimate about $5 million a year-we could publish such a compendium. We could `also provide th'at listing in the compendium would satisfy the requirements of full disclosure. Although the project could be `achieved without increased authority, it would not be the most `advantageous manner, in my opin- PAGENO="0084" 1228 COMPETITIVE PEOBLEMS IN THE DRuG INDUSTRY ion, in which to proceed. As the drug industry would be relieved of the cost of package inserts by this proposal, I believe it would be appro- priate to shift the cost of the compendium to the industry. This, of course, would require legislation. And additionally, legislation would be desirable to clarify the scope and purpose of the compendium and to realine some present provi sions of the act in greater conformity with the compendium concept. Now, a final comment on this subject-we believe that increasing access to the complete labeling of prescription drugs is in itself enough to justify publication and distribution of a drug labeling compen dium. Additionally, the compendium would list generic products together with their well-known trade name counterparts, thereby facilitating the economic prescribing of generic drugs and increasing the physician's familiarity with the presently complex drug nomenclature. Senator NELSON. As to the type of information you recommend be included in the compendium, ~ ould you consider inc1udni~r the pi ice Dr. GODDARD. I mentioned the possibility of a supplement as being a more appropriate way of doing this because price changes do occur rather frequently And it would tend to minimize the v'ilue of that information in `t hardbound volume that ii ould stay on the physici'tn's desk for a year ~t a tirnc, ~ hereas supplemental information `~ ill undoubtedly be provided to keep him current on changes on drug labeling, and so forth, perhaps as often as four times a year. So those supplements could also cont'un pricing in±orrn'ttion which might be useful to him. Sewttor NTLSON Would you continue to update the compendium by including in it additional scientific knowledge such as a Medical I etter report on, say, prednisone ~ 1)r GODDARD No, not unless thei e ~ as something derived from th'it letter that indicated a need for a change in labeling Senator NELSON. So in the compendium you would simply list the drug by generic name, the companies that manufacture this drug generically or under a trade name, the best known scientific knowledge there is about this drug, its purpose and use and side effects, and so forth? Dr. GODDARD. Yes; that is correct. And cross index it by both trade name and generic name. Senator NELSON And you would think it would take about 18 months to prepare and publish such a compendium? Dr GODDARD Yes, sir Senator NELSON And you think it would be best if the initiative, at least, came from the industry itself ~ Dr. GODDARD. I would hope that the private sector of our economy would do this. You know, we have been talking about the need for good information for the physician to prescribe drugs. This would represent good information, unbiased, a source book that he could turn to daily as he needed it I think this really would be not only in the interest of better medicine and the patients who receive the drug, but also in the long run be in the interest of the pharmaceutical firms. And I would much prefer to see them take the initiative and do the job, than have to have the Government step in and assume another function. PAGENO="0085" COMPETITIVE PROBLEMS IN THE; DRUG INDUSTRY 1229 Senator NELSON. A number of Members of the Congress have been interested in a compendium, How do we decide whether we are going to have to provide for it by legislation or whether the industry will do it on its own? What is the status of your dialog with the industry, so we might have some indication? Dr. GODDARD. Well, you know, Mr. Chairman, if I could answer that question, I think we would have a compendium now in terms of what is to be done. rfhe status is this: There is an additional meeting scheduled at the Academy where we will come together again and discuss this in the very near future. As I said, 18 months have now elapsed since the industry brought the matter to my attention and requested, in effect, exemption from my predecessor's provision that the package inserts be published con- currently with the compendium for a 1-year period. Now, I do not know how much longer one should allow before say- ing, "Well, we just have not been able to get this," and go ahead and have the Government do the job. Senator NELSON. Are you referring to the National Academy of Sciences? Dr. GODDARD. I am referring to the 18 months that have elapsed since the president of the PMA raised the question with me. Senator NELSON. But you said the National Academy. Dr. GODDARD. Well, the National Academy then became involved about a year ago, and we have had a number of meetings under their aegis since then. We have one more meeting, at least, scheduled in the very near future to discuss this again in detail. But, you see, we keep discussing it and we never get a yes or no from the PMA on it. Senator NELSON. Is the American Medical Association participating directly? Dr. GODDARD. They have participated. Their representatives have attended such meetings. The council on drugs of the AMA has ad- vocated for 10 years the publication of such a volume. I do not think there is any disagreement among the scientific community that this represents an unfulfilled need, an important objective could be ac- complished. But we just do not seem to be able to get off dead center. Senator NELSON. Well, is there any dissent in the scientific commu- nity as to the question of its feasibility? Dr. GODDARD. No, sir. Senator NELSON. When is your next meeting? Dr. GODDARD. Within 2 weeks. It was to have been tomorrow, but that meeting had to be canceled because not all the participants could attend. Senator JAVITS. Would the Chair yield for one question? Senator NELSON. Yes, Senator. Go ahead. Senator JAvITs. Do you have statutory authority to compile this compendium but no money; or do you lack both? Dr. GODDARD. We could publish such a compendium, Senator Javits, under present authority. Senator JAvIT5. And is there any inhibition on the part of the ex- ecutive department, the President, or anybody else stopping you from doing it? You just have no money? Dr. GODDARD. We have no money. And I made the point prior to your coming in that I would prefer to see it done by private industry. PAGENO="0086" 1230 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Now, if we are to do it, then I also feel that the cost of it should be borne by industry, which would be in effect, excused from a present $6- million-a-year program of package inserts. Senator JAVITS. The way you make them do it would be by imposing a duty and charging a fee or a tax? Dr. GODDARD. Yes; some sort of arrangement-let's say a registra- tion fee which could be related to the number of drugs that they pro- duce and the unit number, so that it would be a sliding scale. Senator JAVITS. But that would take legislation. Dr. GODDARD. That would require legislation. I would also like to see, if that is done, a revolving fund created so that those fees could be used specifically for the purpose of the publication of the com- pendium. Senator JAvIT5. Your agency comes under the Labor and Public Welfare Committee, does it not? That is where you were confirmed, was it not? Dr. GODDARD. TJnder Senator Hill. Senator JAvIT5. Labor and Public Welfare? Dr. GODDARD. Yes; Labor and Public Welfare. Senator JAVITS. I am the ranking minority member of that com- mittee, and I was just going to suggest to the Chair-he is a member of the same committe&-that we might consider information which would deal with the question. And if it did come before our committee, as it probably would, I think we could bring about fairly expeditious hearings and then you would come to grips with the industry, and they would have to fish or cut bait. Thank you. Senator NELSON. Well, I might say to the Senator I have already introduced a bill proposing a compendium, but after discussions with knowledgeable people who do not consider the bill to be adequate, we are preparing another one. I would certainly be pleased to join with the distinguished Senator from New York in making such a proposal. As Dr. Goddard said, for 10 years the Council on Drugs of the American Medical Association has been saying we need a compendium. There is no dissent in the scientific community about the feasibility of it. All the testimony we have had time after time from distinguished pharmacolo'gists and physicians before this committee is that we need one. Dr. Goddard's position has been that he would like to see the industry do it. But, Dr. Goddard, if you find out from your next~ meeting with the academy that they just are not going to do it, I certainly think that Senator Javits and I and whoever else is interested ought to put in legislation to develop the compendium. I do not see why we should wait another 10 years for that. Do you agree with that? Dr. GODDARD. I will be happy to keep you advised of the outcome of the meeting. Senator NELSON. I `think it would be worth while for you to mention Senator Javits' comments and mine at the next meeting with the industry. Dr. GODDARD. Senator, I am sure they will know about it even before the next meeting. PAGENO="0087" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1231 Senator NELSON. I don't know. Some of the representatives are forgetful. I thought you might call it to their attention directly. Dr. GODDARD. I will be happy to do that, Senator. Senator NELSON. Did you have any other questions, Senator, on the compendium? Senator JAVITS. No. Thank you, Mr. Chairman. Senator NELSON. Thank you, Senator. If you would just hold up a moment, I had some notes, and.I wanted to see if I covered everything I wanted to cover. Doctor, about 2 weeks ago, I think, the American Telephone & Tele- graph Co. appeared, as well as some distinguished physicians, and part of their presentation was a discussion of the idea of making avail- able by telephone communications and otherwise, electronically, infor- mation on drugs to doctors so that a doctor could just pick up his phone and dial a number and make an inquiry about a drug and get a ~- minute lecture from a very distinguished authority on the drug, plus the doctor's name so that if he wished to call that doctor directly for a broader exploration of the question, he could do that. Do you have any views upon the value or feasibility of the use of this kind of development? Dr. GODDARD. Well, I was acquainted once with an operation that was known as Mediphone, which was intended to serve some of the same purposes that you have talked about. It was a~ service offered to physicians. And as I recall, the subscription fee was $25 a year. And the physician could call in and get information on any drug in the marketplace. It went bankrupt-- Senator NELSON. That was on drugs? Dr. GODDARD. Yes; this was on drugs. Senator NELSON. Where was this system used? Dr. GODDARD. Well, it was introduced nationally. It was preceded by advertising, offering of subscriptions, and so forth, but it went bank- rupt within about 3 months. I would have to know more of the details as to how the physician would become involved: Would it be on a paid subscription basis? Would it be a free service? Would it be regionalized? We are looking at the use of the telephone from the standpoint of trying to improve the reporting of adverse reactions of drugs. We are working with the local medical societies to try to set up a trial to seeS whether physicians would be more willing to share their drug experiences by reporting them by just using the phone rather than by writing a report. And if this works locally, we may tend to try it regionally from, say, the New England region where the physi- cian could make a call free of charge to a number here in Washington and report adverse experiences. And if that were to work, then we could make it a national system. Now, ultimately you could have an exchange system built up where the physician could not - only call and report an experience, but call and get information. It is a difficult task. There have been a number of instances of attempts to provide information to physicians. RCA had a very unsuccessful one, a lecture series on the radio. I would have to know more about A.T. & T.'s proposal in depth before I com~iient on the merits of the points you have raised. PAGENO="0088" 1232 COMPETITIVE PROBLEMS IN. THE DRUG INDUSTRY Senator NELSON. Did you have the opportunity to read their testimony ~ Dr GODDARD No, I have not read it yet I ~ ill obtain it and do so ~,enator NELSON There was a representative present from the lJni versity of Wisconsin where, I think, with some Federal funding they have developed an information bank which the doctor can call directly. He has before him a listing of the problems that they are prepared to respond to, and he can call without cost and receive this information. The point was made that a doctor in an emergency situation cr quasi-emergency situation may be dealing with a reaction to a bee sting, for example. He has not had a serious one in the last 4 or 5 years. He wants the latest information and needs to get it quickly. He can pick up the phone and call and immediately would be told what drug to use under what circumstances and what reaction to expect. What I am asking you is, Does the concept strike you as a vain ible one? Dr GODDARD It certainly deserves a trial, Senator We need to u'~e modern communications techniques to a greater degree than we now do for dissemination that would assist the physician in the practice of medicine. Senator N1~LsoN. The other aspect that was raised in connection with this kind of communication is its use in the question of drug recalls. What is your present method of notifying physicians of a recall, e'~pecialIy if it is a very serious recall which requires immediate results? Dr. GODDARD. Well, for the recall where we deem it necessary to con- tact `ill physicians, the company is required to contact all prescribing physicians by direct mail. That is our present practice. Now, you will recall that on one or two instances it was deemed necessary to go right into the homes to advise housewives to look in the medicine chest. And that is accomplished by use of the public media. Normally-rather, usually the recalls are carried out either to the retail level or to the wholesale level, occasionally to the physician and rarely to the consumer level. Senator JAvIT5. Mr. Chairman, may I ask the special permission of the Chair to ask just one question of the witness- Senator NBL50N. Certainly. Senator JAvITS (continuing). On this marihuana issue. I just wanted to ask you one question. I read your statement-and Senator Nelson will deal with all the matters in it, I am sure, very effectively-but what I would like to know from you is this: I do not see anywhere in your statement what you did say that was misquoted. What did you say about marihuana? What was your actual statement? Dr. GODDARD. All right. May I do two things? One, submit for the record the actual words, but, two, just give you here and now in my own words what I said in response to the question. (The information referred to follows ) PAGENO="0089" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1233 TRANSCRIPTION OF WOCO TAPE OF GODDARD Pru~ss CONFERENCE, OCToBER 17, 1967, UNIvERsITY OF MINNEsoTA, MINNEAPOLIS, MINN. Dr. GonnAim. First of all, marijuana Is under the jurisdiction of the Bureau of Narcotics, U.S. Treasury Department. I've been asked to comment on the subject a number of times and I've tried to make my position clear, that first we need more long term research to detect any possible serious side effects from chronic usage. But, secondly, I feel that the present penalty for personal possession is too severe, and I've simply said that the penalties for sale and distribution should remain but, I favor a penalty more comparable to that, that we have for the other hallucinogens. LSD, which is far more a serious and toxic drug than marijuana is, after `all, a mild hallucinogen. It just isn't a rational kind of set of penalties for these two classes of drugs. Question. Would you describe it as being more dangerous than alcohol? Marijuana is more serious than alcohol? GODDARD. Well, trying to compare two different drugs is a very risky business itself. They have quite different mechanisms' of action; `alcohol's a depress~ant, where marijuana is a mild hallucinogen, at best, or maybe a euphoric. Now, they both share some properties in common, however, they both distort our sense of reality, and therefore it's dangerous to c~perate heavy equipment or drive a vehicle when we're under the influence of either one of these. Alcohol, probably lends itself more readily to control on the part of the least to the inexperienced. So, there are some similarities, but there are also some differences. And as I've mentioned many times, we don't know what the long term effects of smoking marijuana or using marijuana in other forms might be, and we have to carry out this kind of research before, I for one, would be satisfied to say that the drug is safe under any conditions. Question. Dr. Goddard, what major safeguards do we need in the commercial drug testing? GODDARD. Well, we seem to have good laws at the present time. It's a matter of having the laws that exist in the form of the Kefauver-Har~ris Amendment of 1962, followed by those who produce and distribute drugs for the marketplace. I'm satisfied we're making progress in this field. We're trying to get truth in drug advertising. I think we're beginning to see some signs of progress. Question. Do doctors know about the adverse effect of drugs? Are they well informed on that? GODDARD. Well, this is one of the areas that the Kefauver-Harris Amendments was designed to correct, the failure on the part of firms who sell these drugs to sort of obscure or tend not to tell the doctor about the bad effects. We are seeing improvements in this, but I'm still not satisfied, that all of the scientific data is properly being provided to the prescribing physician. Question. Can you specify some drugs that you think might have adverse effects? GODDARD. Well, we have recently in the past year, in fact, caused a number of "dear doctor" letters to be sent out, and I think the doctors know what these are well enough without my going into details now. Question. How serious is the shortages of flu serum going to be? GODDARD. Well, I haven't kept up with the flu vaccine problems this year. I used to, when I was chief of the Communicable Disease Center, because we were the group that predicted how serious the flu season would be. The Division of Biologic Standards, part of the National Institutes of Health in the Public Health Service, determines what the nature of the flu vaccine will be, that the manufacturers turn out. So, it's not under my purview, and I'm not all caught up on the subject righ't now. Question. How about drug pricing? Are you investigating companies that maybe sell drugs at inflated prices? GODDARD. No, we have no responsibility for pricing policies of the drug industry. I'd like to make that clear. Question. You were speaking of ante facto action by business, getting into' the area of your talk this afternoon. Could you communicate to us some of the idea in-in a minute or so? GODDARD. Well, I was simply trying to say that the business community, be more perceptive as to the writing that's on the wall and `begin to take actions PAGENO="0090" 1234 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY long before the Government pushes them into certain activities, become invoi~~ed in the community activities, in our national affairs in a different way than they have in the past. This is a risk type of thing, I admit, but it's essential in my thinking, if the business community is going to withstand increasing government re~gu1ation. I am simply trying to say that the automotive industry could have avoided the creation of a National Safety Agency had they built more safety into their vehicles, something they've always been capable of, they have the scientific- the engineering know-how; the only thing they lacked was the desire and the social perceptiveness to realize that if they failed to do it, it would be done for them. This is what I'm also trying to tell the drug industry, avoid the heavy hand of regulation by acting in a responsible way. Make the decisions yourselves. The food industry has done quite well. That kills it fellows. Dr. GODDARD. The question was raised: "Dr. Goddard, is marihuana dangerous, or more dangerous than alcohol? Would you prefer that your daughter smoked pot than drank a cocktail ?" I said, "No, I would not, nor would I want anybody's daughter to smoke marihuana as long as we know so little about the long-term effects. And, secondly, it is dangerous to use when you are operating a vehicle. And third, under the context of today's laws it would be very inappropriate." Now, I have paraphrased it some, but that was my answer. Senator JAVITS. That is what you said? Dr. GODDARD. Yes, sir. Senator JAvITS. And what they quoted, therefore, was something different? Dr. GODDARD. Yes, sir. Senator JAVITs. Are you going to put in the record what they quoted? Dr. GODDARD. I will do so. And I also have a letter from the wire service that apologized. They investigated the matter thoroughly, and they found I did qualify my statement and that they were wrong. They offered to do everything they could to correct the story that their wire service had carried. Senator JAVITS. Well, now, the Chair will deal with all of that. Dr. GODDARD. Yes. Senator JAVITS. I was only wondering because your statement did not say what you did say. Now, what did they quote you as saying? Dr. GODDARD. That I would rather my daughter smoke pot than drink a cocktail. Senator JAVI'rs. And was that in quotes? Dr. GODDARD. No, sir. Senator JAVITS. It was just their generally stating- Dr. GODDARD. That is right. Senator JAVITS. And you have now testified what you did say? Dr. GODDARD. Yes, sir. Senator JAVITS. And this represents your statement as a very high Government official? Dr. GODDARD. Yes, sir. Senator JAVITS. Thank you very much, Mr. Chairman. Senator NELSON. Thank you, Senator. PAGENO="0091" COMPETITWE PROBLEMS IN TUE DRUG~ INDUSTRY 1235 Dr. Goddard does address himself to that question in. a little more detail-. Senator JAVITS. Later on, yes. Thank you, Mr. Chairman.. Senator NELSON. You might as well proceed `with your statement on that question. Dr. GODDARD. Mr. Chairman, we appreciate this opportunity to clarify our position with respect to marihuana. As evidenced by the attention given by representatives of Govern- ment, the press, and the professions, `it is plain that the increasing use of marihuana is a matter of national concern. I am aware, Mr. Chair- man, that statements attributed to me, but which I did not make, have caused additional concern. Let me clarify the record in this regard at the very outset. I did not say that I would not object to my daughter smoking marihuana. I did not, and I do not, cond'one the use of marihuana. I did not, and I do not, advocate the abolition of controls over marihuana. I did not, and I do not, propose "legalizing" the drug. With your permission, Mr. Chairman, I would like to call your attention `to one point which arose as a result of an erroneous news dispatch from Minneapolis on October 17. I was reported `to have stated that I would not object any more to my daughter smoking marihuana than if she drank a cocktail. The news dispatch `was not correct and Mr. Julius Frandsen, vice president and Washington manager of United Press International, has written me a letter acknowledging error by the United Press In- ternational. With your permission, I would like to insert a copy for the record. Senator NELSON. A copy of the letter? Dr. GODDARD. Yes, sir. Senator NELSON. Would you read the letter? Dr. GODDARD. I can read two paragraphs or the entire letter. Senator NELSON. Read whatever you think is pertinent. Dr. GODDARD. Well, I think two paragraphs are most appropriate, and the entire letter I would like to submit for the record. Senator NELSON. We will print the letter in full in the record. (The information referred to follows:) UNITED PRESS INTERNATIONAL, November 2,1967. Dr. JAMES L. GODDARD, Commissioner, Food and Drug Administration, Washington, D.C. DEAR Di~. GODDARD: Following my return from a trip, I have been belatedly looking into the circumstances of our dispatches from Minneapolis on October 17 and 18.1 find we owe you an apology. I refer to the UPI dispatch which began, without qualification: "Food and Drug Administration Commissioner Dr. James Goddard says he would not object to his daughter smoking marijuana any more than if she drank a cocktail." Unfortunately, no complete tape exists of your exchanges with reporters. The questioning began in an informal session in the front of the auditorium after your speech and no recording equipment was there. Equipment was set up in another room and only the ensuing proceedings at that place were taped. PAGENO="0092" 1236 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY UPI was represented by Miss Judy Vick of the University of Minnesota News Service. She says her notes show that in the Q. & A. with reporters in the auditorium Victor Cohn of the Minneapolis Tribune asked whether marijuana is more dangerous than alcohol And that you replied Whether or not marijuana is more dangerous than alcohol is debatable. I don't happen to think it is." Miss Vick says that Mr. Cohn then asked whether you would mind if your daughter smoked marijuana any more than if she drank a cocktail, and that you replied "No, except in the context of the present law." I take that to be a reference to the fact that marijuana is illegal and alcohol is legal. Mr. Cohn's recollection is that his question was to the effect "Would you mind if your daughter took marijuana ?" His notes have you responding: "We have talked about it at home. I would (that is, would object) in terms of the law today and we really don t know what the long term effects (of man juana) are." Followed by some comments about distortion of perception fol- lowing use of marijuana. So it has become clear to me that UPI erred in attributing to you unqualified statements which in fact were considerably qualified. I am sorry if UPI has compounded your problems. We are prepared to carry a dispatch acknowledging our error. In view of the public uncertainty that now exists as to what you do and do not believe, I hope you will sit down with our Louis Cassels so that he can prepare a definitive dispatch. I believe you know Mr. Cassels and his outstanding record for accuracy and fairness. Please let me know. Several members of Congress have inquired about our original story, and I am taking the liberty of sending them copies of this letter. Sincerely, JuLIus FRANDSEN, Vice President and Washington Manager. Dr. GODDARD. In his letter Mr. Frandsen says, "So it has become clear to me that UPI erred in attributing to you unqualified statements which in fact were considerably qualified. I am sorry if UPI has compounded your problems. We are prepared to carry a dispatch acknowledging our error." Senator NELSON. Did they release a dispatch acknowledging their error? Dr. GODDARD. I didn't request them to do so, Senator, because of the hearings scheduled for yesterday And I understand they did carry a very comprehensive story on their wire service last night, although I have not seen it as yet. Senator NEr~soN. Thank you. Go ahead. Dr. GODDARD. A very good story, too, I am told. Mr. Chairman, I think the press recognizes the importance of the problem marihuana presents to society and makes every effort to provide the Nation with the best information available. My remarks concerning marihuana-in Minneapolis and else- where-have always been in response to questions from the press In every instance, I have made it abundantly clear that marihu'ina h'ls been and still remains under the jurisdiction of the U S Department of the Treasury It is often erroneously assumed that the Food and Drug Administration, which administers the drug abuse control amendments, has jurisdiction over not only the controlled drugs-the amphetamines, barbiturates, and hallucinogens-but maiihuana `is well. Our agency has made every effort to clarify the differences wherever possible. PAGENO="0093" COMPETITIVE PROBLEMS IN THE: DRUG INDUSTRY 1237 Senator NELSON. You do not have any jurisdiction over marihuana? Dr. GODDARD. No. I should point out, however, that the Department of Health, Education, and Welfare has a very broad interest in marihuana in that they have responsibility for the dissemination of information and educational materials on narcotics including-and drugs that are abused, including marihuana. The National Institutes of Mental Health specifically have responsibility for the conduct of research. The National Institutes of Mental Health have a responsi- bility to provide services under the Narcotics Addicts Rehabilitation Act. The Food and Drug Administration has a responsibility to control the distribution of synthetic marihuana, and to the investigation of the new-drug exemption provisions of the Food and Drug Act. And so the Department is broadly concerned in not only those ways but in its concern with respect to juvenile delinquency where marihuana is often involved in the acts committed by juveniles in our society. So although we have no responsibility for the control of man- huana-I am trying to say that the Department of Health, Education, and Welfare is very much concerned about the whole subject. Now, let me make several points about manihuana. First, the shock- ing growth and use of marihuana has been so rapid that none of us in government, in medicine, or the legal profession has been able to counter it effectively. The use of manihuana in this country and the rest of the world has a long history, of course. Senator NELSON. You refer to the shocking increase in its use. Do we have any good statistics on what the increased use is? Dr. GODDARD. I can give you-to answer you, good statistics in the sense they were seen by a practicing physician, no-some good data on arrests related to manihuana from the State of California. This one source shows, as I recall, juvenile arrests last year increased over the previous year 134 percent. It went up to about 3,800 arrests last year. Senator NELSON. In California? Dr. GODDARD. Yes-juveniles, now. Senator NELSON. When you say juveniles, do you mean under 18? Dr. GODDARD. That is my understanding of their definition; yes, Mr. Chairman. Now, in addition- Senator NELSON. Well, let me get this straight. In coming to your conclusion that there has been a shocking increase in the use of man- huana, you have relied upon various estimates? Dr. GODDARD (continuing). And statistics that are available. For example, it is estimated that between 400,000 and 3 million persons currently use manihuana or try during the year. Senator NELSON. Between 400,000 and what? Dr. GODDARD. Between 400,000 and 3 million people in a year try or use marihuana, and as many as perhaps 20 million people in our society have used marihuana. PAGENO="0094" 1238 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Now, some of the statistics I have referred to-the Department of Justice of the State of California reported a total of 28,319 adult drug arrests in 1966. Senator NELSON. How many? Dr. GODDARD. 28,319. Senator NELSON. Where? Dr. GODDARD. In the State of California. Senator NELSON. Just California alone? Dr. GODDARD. Just California. Senator NELSON. And what was the juvenile use, did you say? Dr. GODDARD. Well, if I ri~ay- Senator NELSON. Go ahead. Dr. GODDARD (continuing). Proceed to that. That was the highest figure to date. Fully 32 percent above the preceding year for adult arrests. Some of the increases came from the enforcement for the first time of the drug abuse control amendments, which became effec- tive on F'ebruary 1, 1966. "However," to quote from their report, "marihuana offenses amounted for approximately one-half of the 1966 arrests and showed a 71 percent increase over those reported in 1965. Arrests for man- huana and other narcotics increased by 11 percent." Senator NELSON. These statistics are not in your statement, are they? Dr. GODDARD. No. Senator NELSON All right. Dr. GODDARD.' "Dangerous drug arrests showed a 4 percent gain," the report adds. "California adult marihuana arrests in 1966 were three times what they were in 1960. Among juveniles the rise was even more dramatic Drug arrests in general increased 87 percent betv een 1965 and 1966, and 140 percent for juvenile marihuana arrest's." And the numbers were from 1,623 to 3,869, the lower figure being- Senator NELSON. From what? Dr. GODDARD. 1,623 in 1965 and 3,869 in 1966. Now, the marihuana arrests plus the 898 arrests for dangerous drugs that they made accounted for 93 percent of the juvenile drug arrests in California during 1966 Now, 60 percent of the juveniles arrested in that year were either age 17 or age 18. So it gives you an idea that the bulk of the'se people are- Senator NELSON Seventeen and 18 ~ Dr GODDARD Yes, sir Senator NELSON Do you have extra copies of that report ~ Dr GODDARD I can obtain them for you, yes, sir Senator NELSON I would like to print your statistics at this stage in the record, so do you have extra copies with you ~ Dr GODDARD We can give you this copy, yes Senator NELSON Fine (The information referred to follows ) PAGENO="0095" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1239 1966 Daua ARRESTS IN CALIFORNIA A PRELIMINARY SURVEY Data shown in this report are subject to modification by additional arrest information received prior to formal publication in the annual report Drug Arrests and Dispositions in California. ADULT ARRESTS The 1906 total of 28,319 adult drug arrests is the highest annual arrest figure recorded by the Bureau of Criminal Statistics to date; this figure exceeds the year~earlier total by 32.1 percent. Marijuana offenses accounted for approximately one-half of the 1966 arrests and showed a 71 percent increase over those reported during 1965. Arrests for "heroin and other narcotics" increased by about 11 per- cent while arrests ~for "narcotic addict or user" increased by 6 percent. Dangerous drug arrests showed a 4 percent gain. Neither Los Angeles County nor the remainder of the state conformed too closely to the statewide averages. Arrests for "narcotic addict or user" increased by 18 percent in Los Angeles County but decreased by 23 percent in the rest of the state. The converse was true for `dangerous drug offenses which decreased by 14 percent in Los Angeles County while exhibiting an increase of 33 percent in the other counties. In 1966 about 59 percent of the adult arrests occurred in Los Angeles County, as compared with 62 percent recorded in 1965, and 68 percent in 1960. There were 16,820 adult arrests reported by Los Angeles County in 1966; San Diego County reported 2,708; San Francisco County 2,187; and Alameda County 1,469. These four counties alone accounted for 82 percent of the total arrests. The total of 28,319 adult arrests involved 24,244 individuals. Of the arrests, 16,051 (57 percent) represented persons who were new to the drug file. Rela- tively few of the new offenders were involved with heroin-about 10 percent. This was in sharp contrast to marijuana, which accounted for over 60 percent of the new subjects. Of the 14,293 adult marijuana arrests during the year, 9,819 involved persons new to the study. About 38 percent of the subjects arrested were under some form of probation or parole supervision at the time of arrest. Six percent (1,716) were on parole from the Department of Corrections and 1,751, roughly the same proportion, from the California Youth Authority. Less than 3 percent were on parole from the California Rehabilitation Center. Approximately 20 percent were under adult probation supervision. Because these percentages are based on arrests, some of them multiple, they should be regarded as indications rather than as exact determinations. JUVENILE ARRESTS Juvenile arrests rose from 2,691 in 1965 to 5,034, an increase of 87 percent. Los Angeles County reported 3,189, or 63.3 percent of the total. En the other leading counties, Alameda County registered 295 such arrests; San Diego County 2.53; Orange County 251; and San Francisco 167. `San Mateo and Santa Clara counties reported 144 and 126, r~spectiveiy. The youth drug problem revolved around marijuana (3,869 arrests) and dan- gerous drugs (898 arrests). Together, these two offense groups account for 95 percent of juvenile arrests on drug charges. One hundred and nine arrests in 1966 compared with 60 in 1965 involved the possession, sale or use `of heroin and other narcotics. Age 17 appears to be the critical year for youths arrested for drug usage. Those born in 1949 (age 17) made up 40 percent of the total; combined with those born in 1950, the two groups accounted for 63.8 percent of all juvenile arrestees. PAGENO="0096" W -4 C) CD C,, DC ~. `-C> -v C/)~ ~ Q~Z ~ >~ C) -4 > C, C) C,, > > -< I. -4 0, > 0, -4 0, C, > C,, -4 C,, Cv ci- Di CD 0, ci- (11 CD ~C'~ ~; ~ ~ ~_~_~) ~ C) ~iii ~ i~ii~ ~ ~ !~ U,Cv ~ ~ ~Ii ~ ~ ~ ~ II ~-~) DQi~C~ c~NDOO~0,lD~C)C,CN~ICO ~ ~C DCICv CvICCC ~ z~~1 ~ ~o;~c~o~Ioo ~ ~ ~ ~ll ~ )~COC)~t ~-~-~--i ~iI,~OO~-J 0 0 t~rj (ft 0 (12 PAGENO="0097" C~__. a~o~9<~3-g~. ~J°~ ~ i~-'9 C,, ~ *`~°- : : F: ~: ~` ~E.: : : ~: ~ : : F: : : : : : ~ ~ : : : : : : : a. c~ -` cD 0 0 ~ 0 -~ -~ -~ 00 a-~~- H: ~ --4 ~ ~ ~ : ``::: `-3 ~ ~) ~0CD ~- ~-` ~ °° -I -- ~ .-~ ~ ~ ~ ~ 0 0 ~ ~- c~ ~ -~ ~ ~ c~ ~ ~ ~co-~i~ co~ -~ 0 ~ )~~-co: ~ ~`~-` ~ -`-~, ~ ~ - ~ 0 ~ I r I I ! 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C) N) - C~ N)C~~J ~ -C C) (000 ~ COO) N) C0N)C) C) (00)00CO0 ~ C0N)CP N) Cl)N)~ ~O) (0000)000) PAGENO="0099" COMPETITIVE PROBLEMS IN TIlE DRUG INDUSTRY 1243 TABLE 5.-DRUG ARRESTS OF JUVENILES (UNDER 18 YEARS) REPORTED BY CALIFORNIA LAW ENFORCEMENT AGENCIES, 1966 (PROVISIONAL) Statewide Heroin and Narcotic Dangerous Other County Total Marihuana 1 other narcotics addict-user drugs offenses 2 5,034 3,869 56 53 898 158 Los Angeles San Francisco - 3,189 167 - 2,501 97 33 5 29 573 3 49 53 13 Alameda 295 253 1 3 28 [0 Imperial Kern Orange 14 16 251 8 6 171 3 2 2 1 10 1 45 32 Riverside 30 22 1 1 5 1 San Bernardino 35 26 1 7 1 San Diego San Luis Obispo Santa Barbara 253 6 67 182 3 51 2 2 61 3 1 9 6 6 Ventura 66 3 5 8 3 Contra Costa 72 62 9 1 Mann 67 50 1 9 7 San Mateo 144 122 16 6 Santa Clara 126 96 1 22 7 Solano 2 2 Napa 1 1 Sonoma 32 29 2 1 Sacramento 37 30 4 1 2 Fresno 17 7 2 7 1 Kings Merced 3 7 7 1 2 San Joaquin Stanislaus Tulare 25 24 8 8 22 7 1 1 15 2 1 Monterey 21 14 4 3 San Benito Butte 1 1 Glenn Shasta 3 I 3 1 Sutter 2 1 1 Madera Humboldt 8 1 7 1 1 ~__. Lake 1 1 Mendocino 3 3 Inyo Santa Cruz 2 34 2 27 3 4 Placer 2 2 Yolo 1 1 1 Includes use or under influence of marihuana. 2 Includes prescription violations, possession of narcotic paraphernalia, etc. Prior to 1965 driving offenses and all Federal violations were included. Beginning with 1965, Federal violations are shown under the more descriptive offense groups wherever appropriate. Note: Data are subject to change as additional arrest information is received. PAGENO="0100" 1244 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY TABLE 6.-DRUG ARRESTS OF JUVENILES (UNDER 18 YEARS) REPORTED BY CALIFORNIA LAW ENFORCEMENT AGENCIES, 1966 (PROVISIONAL) EArea and offense by year of birthj Area and offense Total - Year of birth ~ ~- 1948 1949 1950 1951 1952and later Statewide 5,034 1,120 2,023 1,187 516 - 188 Marihuana 1 Heroin and other narcotics Narcotic addict or user~ 3, 869 56 53 888 13 17 1, 595 33 28 898 8 6 367 2 2 121 56 Dangerous drugs Other offenses2 898 158 169 33 311 56 232 43 130 15 11 Los Angeles County 3,189 706 1,221 770 367 125 Marihuana 1 Heroin and other 2,501 565 996 592 265 narcotics Narcotic addict or user_. 33 29 10 9 17 16 6 3 1 40 Dangerous drugs Other offenses 2 573 53 111 11 172 20 158 11 9 2 State less Los Angeles County Marihuana1 Heroin and other narcotics Narcotic addict or user__ Dangerous drugs Other offenses 2 1,845 1,368 23 24 325 105 414 323 3 8 58 22 802 599 16 12 139 36 417 306 2 3 74 32 149 102 2 1 38 6 63 38 ~6 9 1 Includes use or under influence of marihuana. 2 Includes prescription violations, possession of narcotic paraphernalia, etc. Prior to 1965 driving offenses and all Federal violations were included. Beginning with 1965, Federal violations are shown under the more descriptive offense groups wherever appropriate. Note: Data are subject to change as additional arrest information is received. PAGENO="0101" 10000 9,000 ~100O 7,000 6,000 5~000 4,000 ~,00o 1,000 900 ~0o 700 00 400 COMPETITIVE PROBLEMS IN THE DRtXG INDUSTET 1245 CILM~ A DRUG ARR$T$ PIPORTIb IV CALIFORNIA LAW NFOPGEMEN'I AGENCIES (960 THROUL~H (966 By HALF-YEAR FOR BOTI-( ADULTS AND JUVEWILES OF ARREStS 3O~000 ~im -1~ - i~ - -$ ~- , p~ POPULATION 1 I ~-~- ~ __ 20 I0 I,0 IS1* ~MD ST `iMO 1965 966 300 ;çr ~S( ~Mf~ 1ST ~NO 61 1960 961 1961 963 1AI~F~ -`(EAR 964 L(frhmi~ Vertio~ so~Ic PAGENO="0102" i~)QOO Loaar%~m$C VerIic.al Scalt 962. 963 964 YEAR OF ARRESr ~i246 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY CHART B ADULT DRUG ARRESTS 1960 ThROUGH $966 eY YEAR OF ARREST AND 0FFENS~ 1966 PAGENO="0103" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1247 Dr. GODDARD. I think there are other sources-the surveys on cam- puses that have been carried out to try to gain some idea of the misuse of drugs in general have shown on some campuses 20 percents others 10 percent. Senator NELSON. When you use this percentage, you mean those who have tried marihuana? Dr. GODDARD. Yes. Senator NELSON. Are you just talking about marihuana, or are you talking about- Dr. GODDARD. I am talking about abuse of `drugs, including man- huana. But marihuana is by all odds the most frequent and abused drug. Senator NELSON. What' is the source of the supply? Dr. GODDARD. Most of the marihuana, I am told, is smuggled into the country from other countries, particularly Mexico and Central America. Some of it is grown domestically. It grows wild, I might point out, in many parts of `the United States as a result of our Indian hemp production program during World War II. Senator NELSON. By what method is it made so easily available on campuses or to young people? Dr. GODDARD. Well, there is a distribution system that operates. We encounter this drug very often in our drug-abuse control program.' In fact, I believe 9 out of 10 arrests that we make we find the individual in possession for sale of not only LSD but also marihuana, or not only amphetamines but also marihuana, or barbiturates and marihuana- any combination. Of course, one of the reasons we have become con- cerned and I have made the statements I have concerning marihuana is because we do encounter it as a daily occurrence in our drug-abuse control work. It tends to run more to `the drugs that we are concerned with than it does with hard narcotics. Senator NELSON. What was your statistic on use in California by the 17- and 18-year-olds? Dr. GODDARD. Well, I was pointing out that the increase between 1~65 and 1966 was 140 percent in arrests of juveniles. The numbers involved were 1,623 arrested in 1965, and 3,869 in 1966. Now, of those arrested for marihuana possession in California, of the juveniles, ~30 percent of them were aged 17 or 18, which indicates the age group where the problem is centered. Senator NELSON. And this means, does it not, that these are high school juniors and seniors? Dr. GODDARD. Well, 17 and 18, you know, you are getting into- Senator NELSON. Seniors in high school. Dr. GODDARD (continuing). Seniors and graduates, recent grad- uates. Senator NELSON. Do you have any notion for the large percentage in this age group as to how they are getting it and why? Dr. GODDARD. Well, in many instances there is a drug subculture in a given area, let's say that these young people become involved with, or it becomes a thing to do, you see, a way of flaunting society's rules. This is one of `the things that people who study this phenomenon say accounts for the involvement of many youths. PAGENO="0104" 1248 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY I think the Bureau of Narcotics can probably provide you detailed information on sources, you see, how it gets into communities. We see it in our drug-abuse control work, though, where we concentrate our efforts on those who sell, distribute, and manufacture drugs that are under our jurisdiction. We also see them selling marihuana. Senator NELSON. You recited California statistics. Do you have any evidence to show that this would be representative of the country? Or is it just that California is doing it differently;. as they usually do? Dr GODDARD No I selected those because I am told that California does have more complete statistics perhaps than any other State.. It was for this reason. Also, the report happened to be available. It is an intriguing report to read in depth. The increases that have occurred since 1960 through 1966, and their breakdown of figures is perhaps more detailed than other areas provide. Senator NELSON. In the evaluation of the `California statistics, is there any element of more effective enforcement involved? Dr. GODDARD. Well, of course, this. has to be taken into consideration, too, because we are dealing with arrests which may or may not reflect accurately changes in usage.. But I think it is generally agreed by all who~ are involved, college administrators, sociologists who study this kind of societal problem, enforcement officials that we work with at the State and local level, and-~-well, I cannot speak for the Bureau of Narcotics. You would have to get their opinion. But I believe almost everyone agrees there has been a marked increase in the usage of rnari'huana in the past 5 to 6 years in this country. Senator NELSON. And this is a nationwide- Dr. GODDARD. Yes. It has occurred in many communities. The press has covered, or provided coverage of stories from almost all over the coun.try, you see. And so it is not an isolated thing. It is not something unique in California or New York City or Boston or Washington, but it is occurring all over. Mr. GoRDoN. Do you have any hypothesis as to the' cause of this increased use? Dr. GODDARD. It is very difficult to hypothesize. It is also very dangerous. I would be forced to judge that, as in all these things, multiple factors are at work. First of all, we have seen the . development of the so-called hippie generation. And one of the .things' that they are concerned about, I am told, is the experiences that enlarge' one's understanding of one's self, whatever that means. Mr. GORDON. Well, I was going to ask you what that means. Dr. GODDARD. I am only quoting. And certain drugs are held by the proponents of this type of su~bcuiture, certain drugs will help `a person understand `himself better. LSD has `been pointed to as one, rtiarihuana `as another. Well, both of these are hallucinogens. Of course, much of their attention has centered on hallucinogenic drugs. As I mentioned earlier, it may be an act of defiance. A psychiatrist at Harvard last week at a meeting I attended made a statement that he felt `strongly this was an expression on the' part of the' young people of their defiance to our age group, the societal control that they object to. And it was a way of them expressing their hostility. That is his opinion. It may well be a valid one. PAGENO="0105" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1249 The availability of it certainly has to be taken into account. It is more widely available today perhaps. The epidemiology and thus a bet- ~ter understanding of its availability and usage has to be studied. The National Institute of Mental Health is developing and Sup- porting projects which will give us a better understanding of why people do turn to drugs of all kinds `and abuse them. This, also, is the kind of research we are interested in supporting and are supporting. We work very closely with the National Institute of MentalHealth to try to develop this kind of information. So I do not think we have any real answer `to your question today as to why people use m'arihu'ana. We can `only speculate. But I think `there is general agreement on the point that t'he usage has increased at a large ra'te~ Senator NELsoN. It would seem to me `that one of the problems cer- tainly is the educational factor. And everybody, I `suppose, h'as read in the papers of some of the tragic inciden'ts of young people using LSD `with no no'tion about the effects `and receiving permanent injury. My `question is, what kind of `a job are we doing in putting into the high school educational literature, no't `only on drugs-some `of this is pretty tough to deal with-but also on such health hazards `as tobacco? We have `a pretty good tobacco lobby `around the country. But what good information in a readable `and interesting fashion is available in the high schools `of `this country `as, to what these drugs do, what their ~effects `are, and how dangerous they `are? What is av~ilable? Dr. `GODDARD. Senator, we think this problem is so important that we have `been working with `the National Education Association and the `Office `of Education `of Health, Education, and Welfare in `the develop.. ment of curriculum-content material, no't only for high school students `but elementary `school `students and junior high school `students `as well. And `the `attempt is to in'troduce into `this curriculum at `the early stage of development of thought patterns and processes so that the young people can incorporate and `acquire `attitudes of respeot toward drugs, something that seems to be lacking qu:ite often tod'ay. And so we have had the assistance of some of the best science `teachers in the United States in developing these materials. And I will be happy to provide you with a description of this program, which is a cooperative venture between FDA, the Office of Education, an'd NEA. Through this kind of an effort over the long term I believe we can have an impact on the problem. I really think the educatioiial ap- proach is very necessary and important. Until people's attitudes can be successfully changed, we might make, indeed, very little progress `in real control. And so we have viewed this as an extremely difficult undertaking. Now, there are, of course, other educational materials now available `through some of the major drug companies. Smith Kline & French developed a very excellent booklet for the use of high school teachers `on drug abuse in general. Senator NELsoN. Did they cover the specific drugs we are talking about? Dr. GODDARD. Yes, sir, they did; includin~ marihauana. And it is very well done, I must add, and has been widely digtributed by that corporation. An'd this is something that is needed because these source PAGENO="0106" 1250 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY materials have not been generally available to the teaching profession in a usable form in the past. Senator NELSON. Could you supply a copy of the Smith Kline &. French literature for the committee? Dr. GODDARD. Yes; I would be happy to do so.2 So we are beginning to develop these kinds of materials. We have worked, for example, with the college administrators in an educational program I think we held seven regional seminars, attended by deans and the administrators of colleges and universities, and have provided them with factual information that can be passed on to their students. Now, it has to be a very broad approach to the problem, on a very broad understanding developed on the part of our population about the drugs we are abusing. And this is a spectrum of drugs. And we think this is absolutely essential if we are going to check the marked increase in drug abuse of all types that has occurred in the past two decades. Senator NELSON. Does the program that you are working on with the National Education Association and the Office of Education have any specific legislative funding for this purpose? Dr. GODDARD. No. We are doing this out of existing funds. This is part of our general mandate, to provide information to the public. And then, also, under our Bureau of Drug Abuse control program we do have education as one of the major components, you see-enforce- ment, education, research of the major components of our drug abuse program. Senator NELSON. I know you believe that education on this: sub- ject matter is fundamental to any controlled program. Dr. GODDARD.. Yes, sir. Senator NELSON. I do not know what you contemplate in that field, but it would seem to me that at a minimum, at a very minimum, there are two things necessary. One is the presence of a teacher in each and every institution-every grade school and high school-who really knows the subject matter, and will develop and teach a course in it. And then, secondly, attractive, readable, interesting literature must be made available to everybody. Are you tackling these two problems? Dr. GODDARD. Yes. In fact, the thrust of the program I have already mentioned is to help the teacher have a detailed understanding of the probl~rn and the approaches to be used, give her specific lesson ma- terial to use with the youngsters. Beyond that, we are also working with other professional groups. The retail pharmacies, for example, represent a resource that the schools and the community in general can draw upon to help explain problems of drug abuse and our drug thuse program has effective working relationships with one of the professional organizations to do just this. We think the physicians in communities represent a unique resource that could be called upon. I know there are several com- munity programs of this nature already developed. We also have produced films-a specific film, for example, called "The Mind Benders," on LSD, hallucinogens We think this is am outstanding film that helps young people understand the risk involved 2 RetaIned in committee files. PAGENO="0107" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1251 We do not say you should not do this. We try to explain the risk, so that an intelligent person can make the decision without being preached at and see it is very obvious that they should not use the drug. Now, after having said all those things, we have to say, too, that we recognize the importance of enforcement. I do not wish to minimize this. The State and local officials as well as the Federal officials in the major agencies involved play a very important role. Because one of your major efforts is to decrease the availability, take the stuff out of circulation. If it is out of circulation, it can't be abused. So this is extremely important, that we have, we are provided training pro- grams for State and local officials, police, enforcement officials, and we will do so to an increasing amount so that they understand the whole problem of drug abuse control. We have found them most receptive to the training programs that we have offered to date and we hope to be able to do more of this in the future. So it is a wide and very broad effort to help bring drugs under con- trol in this country, drugs that are being abused, including marihuana. Senator NELSON. Specifically, are you developing a body of liter- ature that is going to be a~vailable in all the schools in the country? Dr. GODDARD. Yes; this is the effort that I mentioned to begin with. Senator NELSON. How far along are you? Dr. GODDARD. Well, we have some of them already delivered in the pipeline to the school systems. I will be happy to provide those to you so you may put them in the record or examine them as you wish.3 Senator NELSON. Are you including in it information about tobacco? Dr. GODDARD. No, tobacco is not included in this particular program. This is to try to provide an elementary understanding, l~t us say at the third grade level, of pharmacology. Because man does live in a chemi- cal environment, we want young people to begin to formulate atti- tudes, attitudes of respect toward these chemicals in their environ- ment at a very early age. Now, you obviously are not teaching anything very sophisticated to third graders, but you can begin to get the formation of good atti- tudes toward drugs, which are some of the chemicals that man has to contend with at that early age. Senator NELSON. But you do not intend to include tobacco. Dr. GODDARD. No, sir. There is a program within the Public Health Service, an education and information program, on that particular subject. it would be duplicative for us to engage in it. Senator NELSON. Who is engaged in that? Dr. GODDARD. Public Health Service. Senator NELSON. Do you have the money to print, publish, and exhibit to all the schools in `the country the literature you are talking about? Dr. GODDARD. I cannot say we have all the money that will be re- quired this year for the program. The program is phased over two budgets. I think we will have sufficient moneys. It is a high priority item, Senator. Senator NELSON. And you not only intend to distribute this to schools, but also to pharmacies and doctors? 8Retained in committee files. PAGENO="0108" 1252 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Dr. GODDARD. No, that is a different program. That is to utilize the professional capability that the pharmacist as a resource person within his community, drawing upon his understanding in depth of drugs, to be a person to lecture to civic groups or to help with a special program in school assembly, in the grade school or junior high or high school. Senator NELSON. What drugs are you preparing information on? Dr. GODDARD. These are the drugs that come under the drug abuse control amendments. Senator NELSON. What are these? Dr. GODDARD. These are the amphetamines, the stimulants, depres- sants, the hallucinogens. Senator NELSON. How many drugs does that involve? Dr. GODDARD. Several hundred in toto, counting the combinations, but they can be talked about in terms of the stimulants, amphetamines, depressants such as barbiturates, hallucinogens such as LSD, and so forth. Senator NELSON. How many of these drugs are available legally? Dr. GODDARD. Legally? Well, none of the hallucinogens are available legally. But the stimulants and depressants all are available legally. Senato~' N~soN. On prescriptions? Dr. GODDDARD. On prescriptions. Senator NELSON. Yet they somehow get into the consumer market without prescriptions? Dr. GODDARD. This is true and it is something which has been growing in terms of the past 20 years, the volume of drugs that have been diverted has apparently grown each year. When we first begin in this area as an agency back after World War II, the thought was that most of the abuse was probably the sort of casual refilling of prescriptions that were out of date or had not been checked as being refillable by the physician. But indeed, this was Rot the case. There are still, of course, a few drugstores where this goes on and some of our enforcement activities do reflect that. But by and large, we found that the major problem was diversion from legal channels of supply. I think one of the first awarenesses of this came about as the agency, one of its employees, was able to make a buy of 25,000 barbiturate capsules at a truck stop. This forced the agency to reevaluate how it would use its relatively scarce resources in approaching the whole problem of drug abuse. Instead of trying to concern ourselves with individuals, as I mentioned earlier, we began to go after the point of diversion-where was it being diverted from the legal system? Was it a wholesaler? Did it come from a manu- facturer-to identify and ferret out those sources and the impact would be greater. Well, that is the philosophy we still use in our drug abuse control program. We think it is the only rational one for us as a Federal agency to adopt, to go after illegal manufacturers if we are talking about LSD or some of the other hallucinogen; to go after the diverters, perhaps wholesalers, or in some instances, manufac turers, who make stimulants and depressants for the prescription drug trade. Some manufacturers have been found guilty of not keeping the appropriate records and of selling it to persons who obviously were not in the legal supply system. So the drug abuse control amendments PAGENO="0109" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1253 provided the authority for us to audit the books of all firms, not oniy manufacturers but wholesalers. We are also required to check phar- macies. Now, that is a tremendous undertaking. There are 55,000 pharmacies in the U.S.A. alone and, to audit their recordkeeping prac- tices, we have asked the States to assist us and we have effected con- tracts with 18 States to date to have the State board of pharmacies audit prescription practices, the recordkeeping practices of local pharmacies. So the program is proceeding and we think the main thrust of it is at those who divert, illegally produce, or legally produce and supply to those who are not in the normal channels of distribution these drugs that can be abused. Mr. GROSSMAN. Dr. Goddard, getting back to your purported com- ments, I am particularly concerned about this marihuana question. I wonder if I could read to you from the task force report on. drug' abuse from the President's Commission on Law Enforcement and Adminis- tration of Justice. It says: The inadequate data available today- on marihuana- Indicate that risk of crime, accldents~ and suicide.. . are not likely to be greater than those associated with alcohol and may be less. If the equivalence between alcohol and marijuana is to be accepted as the operating assumption until more facts are at hand-and we think that is a prudent position to take-it follows that a public debate Is in order with regard to th~ t~est regulation of' marljnana. Would you care to comment on that~ Dr. GODDARI. Well, I have c~minented a number of tunes as to the dangers of comparing these two. They are di~ereut drugs. One is a de- pressant, by and large. The other, marihuana, is primarily a hullucino- gen, although it does have certain depressing properties depending on the dosage level and the individual availability. Now, I hestitate to draw these comparisons, but I am asked to do so. So I say, well, it's dan- gerous for people under the influence of alcohol or marihuana to oper- ate heavy equipment or drive a vehicle. The latter distorts your per- ception of time and the former dulls your ability to handle this heavy equipment, which calls for fine coordination at low speeds. Even beyond that there are certain circumstances under which a drug is used, whether it be alcohol or marihuana, the amount one consumes, the amount one drinks or smokes, the personality of a user is~a factor. The user's previous experience with either alcohol or marihuana is im- portant. The inexperienced drinker does not know the signs and can go too far, just as, I am told, the inexperienced user of marihuana can go too far and get into a panic state~ Now, these are some of the compar- isons that can be made between these two. If you are talking about comparisons with respect to a health prob- lem, I think there is no question wO have more clearly defined the health problem that exists with respect to alcohol: 11,000 deaths a year attributed to cirrhosis; the fatalities fhat occur as a result of highway accidents caused `by people who have ingested too freely~ the number of estimated alcoholics in our society-four and a half to flve million; the number of heavy drinkers, that many more again, another four and a half or five' million. There are approximately 70 million users of alcohol in society. We know the social costs in gross terms of alcohol. We do not have these kinds of data for marihuana. PAGENO="0110" 1254 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY I. can give you a reference if you wish, a more precise pharmaco~ logical description of these drugs that are misused in our society. . But those are the general comparisons I would draw. ~ Mr GROSSMAN As far as you are concerned, is there any social or medical value for marihuana? . Dr. GODDARD. I certainly know of no medical value at the present . time. As I have mentioned before, the recent synthesis of the most active ingredient of marihuana, the tetraphdrocanabenols-T'F[C---iS rather rnteresting. The pharmac.o'logists familiar with this have indi- cated that it may be helpful to have some of these data available with the mechanism of sleep, possibly the study of euphoria, as a mild euphoriant, the active ingredient may have some merit. So I would not preclude or close the door to the possibility of some useful phaima ceutical agent being developed from one of the synthetic things But there is no medical purpose in our society for marihuana today and for practical purposes, there has not been since 1937 Now, social, it is hard to comment on, because it apparently does have some social use. People are using it quite widely. Mr. GROSSMAN. In your testimony you discuss the inconsistencies between the laws relating to LSD: and to marihuana. Have you spe- cifically recommended to Congress any changes in the laws relating to marihuana ~ Dr GODDARD No, sir, I am suggesting that they examine them I have not, for example, recommended, the removal of penalties for personal possession I am not talking now about possession for sale, but personal possession I am saying let's look at them It may be executive seizure is indicated here There is a whole spectrum of penalties one could consider I am saying, look, the usage seems to be increasing The major complaint we hear is about the inconsistency of the penalties and the question keeps coming up, time and time again I am simply saying, is it not desirable to reexamine it~ Mr GROSSMAN Do you feel at all inhibited, perhaps, by law enforce- ment problems ~ For example, in this task force report, there is another statement which says In any event it must be recognized that if the law does outlaw sale but does not allow arrest for possession whether this be for LSP marihuana or any other drug the work of the police will be long and hard and the public must not expect large numbers of arrests As a corollary it is quite possible that such a policy would as many law enforcement persons might fear result in less suppression of illicit drug traffic and subsequent greater use Now, my question is, basióaily,'dó you f eel that you have one point of view `and' that the law enforcement people are pushing against your making any changes in these laws ~ `Dr. GODDARD. Well, reading under the drug abuse control amend- ments, where we do not have a Federal penalty for personal possession but we do have `the privilege of executive seizure, we have not found this to be a handicap Our position has been that we want to concentrate our efforts on the sellers, the manufacturers, the distributors Now, we do not condone the possession of LSD and these drugs, nor would I condone the possession of marihuana. It should be seized and taken away. I want to make that clear. Certainly !there is room for dis- cussion on this point as to how effective `and how needed is the personal possession thing. PAGENO="0111" COMPETITIVE PROBLEMS IN THE; DRUG INDUSTRY 1255 No, in our society, if we have these young people who are, for what- ever their reason, flaunting the law, this is symptomatic of something deeper. Do we not need to examine what the underlying cause is and get at those problems? We are also concerned about the turning point in people's lives. Let me explain that by saying, if you have a 17-year-old who has never been arrested, has no record, and is suddenly arrested for possession of drugs, whatever it may be, he then can have a criminal record. Tile then can be thrown into close association with others who have already committed themselves to a certain way of life. This may be the turning point in this person's life. What I think our department is concerned with is these people. We see the social cost as a very great one. We are trying to say, let us at all points along the line constantly reexamine what itis we are doing to people. Mr. GROSSMAN. That is my point. Do you feel that, all the way along, you have enough influence with the police and the investigative au- thorities and that your point of view is put across? Dr. GODDARD. Well, we are trying in our educational program and seminars directed toward local . and State enforcement agencies to find them a broad understanding of the sociological phenomenon. No~v, we certainly are not soft on enforcement. `I must say I find it anomalous even to be accused in editorials of being a soft enforcer of the Food, Drug, and Cosmetic Act, `because most have `accused me of being quite the opposite in the past year and a half. We think our bureau of drug abuse control has been a hard-hitting group. But the emphasis has been somewhat different, primarily on the trafficker. That is where we think we have to place our emphasis. * Mr. GROSSMAN. If I may, just one further question on another area, with regard to LSD~ ` ` Following, I think, your' testimony in 1966 before the Government Operations Committee, there were some problems with the loopholes, you might say, in the law Or in your regulations. I' would like to. ask you-this i's' something from one of the committee reports in 1966- "it would appear po~sible for the amateur chemist and even the quali- fied inventor or'the unqualified to manufacture the drug for personal use without filing any application with FDA. Such a person might argue that he qualifies as a' bona fide experimenter in the absence of ~tuy standard qualifications for such an experimenter, that he manu- factured the drug `for personal use only and not f or `sale, delivery, or other disposition, and is~ not obligated `to file' `an application with FDA. Moreover, it would appear that this category of person is not required to'register' with the FDA as a manufacturer under' section 510." In other words, can I just go home to my little lab and take care of this without any problem? Dr. GODDARD. I think you might have a few problems, even if you were a good chemist, because we have placed under control most of the precursors that would be used to manufacture LSD~ This does not mean to say that LSD is not being manufactured. We are really still up against it. As fast as we get at one source of manufacture, it'seems that another one springs up.' Mr. GROSSMAN. Where have you been finding these sources? Dr. GODDARD. On the west coast, the east coast. Mr. GROSSMAN. I mean not where, but by whom, particularly? PAGENO="0112" 1256 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Dr. GODDARD. These are individuals who ar~ skilled chemists, 1et~ us say, moonlighting. Mr. GORDON. Commissioner, I nOtice you referred to the east coast.:. and the west coast. How about the middle? Dr. GODDARD. We have them in the Middle West, too. They are not~ devoid of skilled chemists. Mr. GORDON. I have a couple of questions not related to marihuana but to the FDA. Next week, some people are going to come to testify before our~ committee, and in one of the statements I found the following:. Quality firms are well organized to recall with precision-this deals with precision from all commercial channels-any particular lot of a suspected~ drug~ product at any time or to provide emergency advice as to where a particular drug product can be obtained when needed. Now, we have had, in fact we put into the record, considerable in formation about recalls and I notice that the recovery, especially from: the large companies, has been extremely small. For example, we listed, a recall from Ayerst Laboratories of 15 million tablets, of which only 30 percent was recovered. Squibb had a recall of Mycostatin. Only 20, percent of the 18 million tablets w'as recovered. Here is one recalled1 with 10 percent recovered, another with only 7 9 percent recovered, yet another with only 4 percent recovered. Now, would you comment on the statement I read in vIew of the material on recalls that we got from the FDA? Dr. GODDA1ID. Let me point `out that you want to be careful. A drug' company that only recovered 10 percent, this does not necessarily re- flect upon their effectiveness in `a given recall, but it may more accu- rately reflect the time period that elapsed between the production and distribution of the drug and the identification of the problem that required the recall. You see what I am driving sit? Mr. Goiwow. No. Dr. GODDARD. If a drug were subpotent, let us say, and batch No. 2;452~ was produced on January 5, 1967, and the subpotency was not dis covered until September 10, 1967, most of that batch may have been used by the time the recall is identified as being necessary So there are several `things that operate here One is the elapsed time Two is the effectiveness of the firm in getting at the batches at the wholesalers and' the retailers level. Now, they have control numbers on product. All companies are required to do this. So they do have a precise way of" identifying the drug to those who are ifl the system. Now, this does not mean that it i~ not .a lot of effort. It is. The whole- salers in meeting with them have expressed their concern about the~ cost `and the effort that they `are put to in helping in these recalls, and' the local pharmacist is as well. So effectiveness of re~all is again a. functiOn of several `things. You are hard put at times to know just how~ effective a recall may have been unless there has been `a very short pe- riod of time between the date of production and its entrance into th~ system. . ,. . .. Mr. Goodrich may wish to elaborate on this. Mr. GOODRICH. Simply to say that our good manufacturing practice regulations require that all cOmpanies have the capability of .reealling' from the market drugs that turn out to be subpotent or otherwise in violation. The mechanisms of action are applicable to' all drugs. A~ PAGENO="0113" COM]?EPITIVE PROBLEMS IN THE DRUG t~DtSTRY 1257' trade-name drug may have to be recalled just as rapidly as a generic name drug and vice versa. We hope that, we think we have the mech-. anism for getting the drug back off the market on signs of danger.. Mr. GoRDoN, But the size of the company has nothing to do with the efficiency of recall, then? Dr. GODDARD. Nothing. They may have a more expensive computer' system that will turn out the identification of the invoices, but we~ require that all companies~ large and small, have that capability. Senator NRLso~. From your experience with recalls, do you find any significant difference between the efficiency and the effectiveness. of the recall between or among the various companies? Dr. GODDARD. We find differences; yes. But we insist that, depending upon the nature of the hazard that calls for the recall, that steps be taken to get the drug back in the~ most expeditious way. If it happens to be a small firm that cannot do the job, then we have to use our own resources to get it back. But we do have, as I have said, under our requirements for good manu-~ facturing practice, a provision to require this capability. Senator NELsON. You mean that if a company does not have the~ capability, 1?DA will do it for them? Dr. GODDARD. We had an instance, Senator, in which a company put on the market a-it was not a drug, but a highly flammable, ex~ plosive waterproof compound, "X-~-33". It was necessary that that come off the market and come off the market promptly. The corn- pany did not have the money or the ability to get the product back,. so we had to make hundreds of seizures throughout the United States in the interest of lifesaving from accidents that could have occurred.. Now, the same could happen with a drug. But we expect to have as a part of our good manufacturing requirements a provision that be- fore a person can deal in drugs, he will have the capability of gettlng~ the product back, which does not mean that Food and Drug will never~ be called on to use its facilities. We frequently are. Senator NRr~so~. Do you find differences in either frequency or~ efficiency on the recalls based upon the size of the company? In other words, the point I am getting at here is whether small' companies are less effective than big ones? Dr. GODDARD. In general, the larger the company, the more responses~ they can afford and have available to devote to the problem; yes.. So there ar~e differences. Do not forget, we have a weiF-defined system in which these take- places namely, the pharmaceutical wholesalers and the retailers, the- drug store. These are well identified, whereas if you are dealing with other commercisi prothirts such as a solvent or a cleaner, ~ may be in a host of outlets of different kinds. So you have a much tougher problem. We had an~ oven cleaner recently that posed a threat. It was very- difficult. The effectiveness of that company's recall-~-and we worked with them on this-was at a very low level because of the diversity of' the kinds of outlets, you see. So the drug business is truly unique in many respects, mtd this i~one o~them. Senator NELSON. A fe'w~ntoments ago, you were discussingLSD and~ marihuana. I understood you to say that they are used socially; there- 81-280-68--pt. 4-8 PAGENO="0114" 1258 COMPETITIVE . PROBLEMS IN THE DRUG INDUSTRY fore, it has a social use. For clarification of the record, I am assuming you do not mean to say they have any constructive social uses. Dr. GODDARD. I hope my remark would not be interpreted that it did; * no. I tried to say tha~t it is a social phenomenon that we have to contend with. It is a bad one. Senator NELSON. I knew you intended to say that, and I did not want to leave the record open to an incorrect interpretation. Dr. GODDARD. There `are those who disagree. Mr. GoRDON. I have one more question. This is a quote from someone else's statement which we will hear next week: Recent figures of FDA inspections, for example, do little to encourage optimism in this regard. The agency made 3,651 inspections of drug plants in 1966. Impres'- sure as that figure may seem it is 150 inspections less than the 1965 figure and 34 less than the number for 1964 I do not recite these figures to criticize the FDA Mr Chairman Their inspections of necessity are becoming more complex and time consuming and FDA personnel shortages are persistent. Nevertheless, fewer inspections are being made, not more. It seems to me, therefore, it would be imprudent to rely heavily or solely on this mechanism as the method of assur- ing drug quality The import of this whole thing is that you cannot rely on the FDA, but rather you have to rely on the reputation and fame of the manu- facturer to insure good quality drugs Since you are here, I think it might be a good idea for you `to comment on this. Dr. `GODDARD. We are taking steps to make certain that you can rely on the FDA We are going to have two different approaches One is carrying out more selective kinds of inspections Working with Booz, Allen and Hamilton, we are identifying the critical areas of an inspection, those parts of the inspection that most frequently reveal flaws in the system So our inspectors will do more partial inspections, but more target kin'ds of inspections. Secondly, we are going to select 300 pharmaceutical firms next year for special attention, and add 300 more pharmaceutical firms for special attention the next year That second year, we will have 600 of the 900 that produce prescriptions under very close surveillance, and the third year, all 900 Now, let us not misunderstand what I am saying to mean that this will provide complete assurance of quality of drugs It will not Most of the responsibility stlll is and probably belongs on the manufacturer who enters commerce and produces these drugs. Concomitantly, we are operating and will be expanding the National `center for Drug Analysis, `where we `hope to get up to the analysis `of several `hundred thousand samples of drugs purchased at the retail level Thus we will be able to act as a further step in the manufacturer's own quality control program with respect to those features that can be seen in the laboratory Now, I would like to make the point that companies, large and small, require surveillance You look at the recall list and it is not uniquely the property of the small company. Companies constantly make this claim, "Our drugs are better, higher quality, they are guar- `ailteed," these kinds of things. `I would like to see the evidence that t'heir drugs are therapeutically more `effective than small companies. They point, to some isolated episodes that have occurred. We know these, too, and we have taken steps to correct them, such as the sugar- coated tetracycline episode several years ago. PAGENO="0115" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1259 Mr. GORDON. That was a big company, too, was it not? Dr. GODDARD. That involved a large company, yes. So, yes, they are making the claim, but their making the claim does not make the fact so, is my point. Mr. GORDON. But it is not so. Is that right? Dr. GODDARD. Our job literally is to assure the physician: "Doctor, you can prescribe any drugs in the marketplace with the assurance that it will do the job that you had in mind when you selected it." Once that is done, we will have taken a great step. Mr. GORDON. I have no further questions. Senator NELSON. We had testimony at an earlier date from a pharma- cologist. It was on the question that you have just commented on that I did not intend to raise at this hearing with you. It was on the ques- tion of whether, if a drug meets TJSP standards, the presumption can be made that all drugs which meet that standard are equivalent. The testimony that we have in the record is that there are only about a dozen cases where this did not turn out to be true. The testimony was that for almost all of the thousands of drugs on the market, if they met IJSP standards, they are equivalent in their therapeutic value and effectiveness. Do you agree with that position? Dr. GODDARD. I think that is a fair statement. Senator NELSON. This was the statement of Dr. Miller of tSP. Dr. GODDARD. I think Dr. Miller's point is well taken. However, I say there is enough concern at the present time about the question of therapeutic equivalency that we are undertaking the testing of about 40 or 50 of the most frequently prescribed drugs that are available as both generic and brand-name drugs to determine biological avail- ability, if you will, blood levels, which indicate that the drug has been absorbed. You can get some. direct n~easurement in hurnan~. Now, if we find that after 20, 80, 40 of these drugs have~ been tested that equivalency is present, I think we have reason to feel reassured that this is true across the board. Now, you see, there are also exceptions, in these systems. A. man working on a given piece of equipment in any. firm can fail to provide the proper maintenance or can make a slight change; for example, the tab letting pressure could be changed. This could influence tbe availability of a drug when. ingested. Senator NELSON. Well, it proba~bly would not meet tSP staa~dards. It would not dissolve at the proper rate. Dr. GODDARD. Right. But you see, there would not be any knowledge of that. This means a feedback into the production in terms of the ~ualitj program may have to be made. But generally, I agree with Dr. Miller. Senator NELsoN. We are talking about the heart of a persistent argument that goes on in the industry and the medical profession. Dr. GODDARD. This is why, Senator I have said, show me your evidence. The large companies that ma1~te this claim consistently, and I would like to see their evidence. They have not produced it yet, other than these 12 isolated episodes that you have been talking about. Senator NELSON. This is the problem about which there is so much confusion. It seems to m~ that what the industry is really arguing is that the exceptions that we find once in a thousand times prove PAGENO="0116" 1260 COMPETITIVE PROBLEMS IN TIlE DRUG INDtTSTRY the rule that there is not an equivalency among drugs that meet USP standards, when really it is the other way around. The excep- tion just tests the rule. Once in a while the clinical and pharmaco- logical knowledge `about a drug is not sufficient at first to set foolproof standards. When more is known, modified standards are developed which incorporate the new knowledge. But this is an exceptional case. So is it not really true that so far as we know, if drugs meets~ TJSP standards those drugs are equivalent therapeutically and you have to prove that they are not? As you know, we had this case' recently of prednisone reported on in the Medical Letter. They tested 22 prednisones and accumulated scientific expertise around the coun- try, and on this basis flatly stated that the present differential in price from 59 cents to $17.90 to the pharmacist is not warranted' by differences in quality. This has never to this date been refuted~ by anybody in the industry. Dr. GODDARD. We are trying to extend that to the drugs most fre- quently prescribed, those in the 200 most frequently prescribed list that are available by generic as well as by trade name. We are going to con- duct that kind of test on human volunteers~ you see, through George- town, with a contract there, through Public Health Service programs, and perhaps Veterans' Administration programs. Now, let me point out to support what I have said, every instance' that has Come up, we and others have moved in on it, have studied~ it in depth, and it has resulted in a change in the standards. That is iecessary. That iS a role we must play and the scientific community engages in these kinds of studies to try to understand why the finished product of tetracycline, for e,~ample, was not performing at that point in time. When we understand it, then the standard can be~ changed. But it would seem to me that your point that the exception proves the rule is a valid one. The drugs are therapeutically equiva- lent until proven otherwise. But we do feel a burden to carry out further testing and get this thing wrapped up. We are going to im- prove the good manufacturing practices, too, Senator, which will' aiso contribute to the ifriproved quality of drugs. Senator NEL5Oi~. You are going to what? Dr. GODnARD. Improve what we call the good manufacturing prac- tice~, the requirements that manufacturers must meet. Senator NELSON. You are going to increase the standard; is that what you are saying? Dr. GODDARD. Yes, in effect. Senator N~tso~. You referred to testing 200 of the most frequently' used drugs. Dr. GODDARP. No, selecting from the 200 most frequently pr&- scribed drugs those that are available in a generic name form. If' it is a unique sQurce, there is no point in checking, because of the unique source. Many of these drugs, by the way, came through the* NDA procedure originally, so we have the information on clinical effectiveness already in hand. Mr. G SS~tA~. Dr. Goddard, may I ask you, is then the purpose of' the study they are condudting to corroborate the position you now hold: as to equi~alency.? Dr. &000AnO. Yes; to lay to restthese- PAGENO="0117" COMPETITIVE PROBLEMS IN TIlE DRUG INDUSTRY 1261 Mr. GROSSMAN. This is really important in these hearings; you realize that? Dr. GODDARD. Yes. Mr. GROSSMAN. I just want to understand, what is your position as of right now? Dr. GODDARD. Our position is drugs generally are equivalent. These cases are the exceptions rather than the rule. I have not seen any evi- dence that I have asked for from the large companies to show me that ~this is not the case, other than on an exception basis. Mr. GROSSMAN. So this study will hopefully-~.--~. Dr. GODDARD. Lay this to rest, Mr. GROSSMAN. When do you assume the study will be completed? Dr. GODDARD. It will take about 16 months to complete. Mr. GROSSMAN. This is the same amount of time as the compendium. Dr. GODDARD. Yes; but for dijferent reasons. Mr. GROSSMAN. Thanl~ you, Mr. GORDON. Commissioner, Dr. Solomon Garb, a rather well known pharmacologist at the University of Missouri, testified before our com- mittee that a doctor has to assume, in order to practice medicine, that, when he prescribes any drug, it will be therapeutically effective.. Dr. GODDARD. That is correct. Mr. GORDON. Otherwise, you cannot prescribe-. Dr. GODDARD. And we think that is our job, to be able to say: "Doctor, you can make that assumption and it is a safe one," Mr. GORDON. They have been making it, have they not? Dr. GODDARD. Yes; they have been, or there would not be as many companies in the marketplace as there are. Senator NELSON. I do not have any further questions at the moment. There are, as per your first appearance, some other matters we will want to explore later and I assume we may bring that up with your staff and set another date for a hearing on some other problems we would like to discuss with you. Dr. GODDARD. Fine. Senator NELSON. We appreciate your testifying this morning. You have made a fine contribution. Dr. GODDARD. Thank you. \(The prepared statement of Dr. Goddard follows:) STATEMENT OF Da. JAMES L. GODDARD, COMMISSIONER, FOOD AND ADMINISTRATION Mr. Chairman: It is a pleasure for me to again appear before this distinguished Subcommittee. As you have requested, I will amplify my previous recommen~. tion 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 Subcomittee. 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 "pack- age inserts" into a readily readable compendium distributed without cost to the physicians, pharmacies, hospitals, etc., would be a signitlcant 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 coxnpepdium could appropriately replace tbi~ type of labeling. PAGENO="0118" 1262 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 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 medi- cal 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." They are printed in fine type and are extremely lengthy. Adidtionally, it is impossible to determine whether a particular insert is the most up-to-date version, thus the physician may prescribe a drug without full knowledge of recent discoveries that are impor- tant to proper use of the product. Although this full disclosure labeling provides an excellent library of drug Information for each pharmacy which might be used to advantage by the pre- scribing physician, it is essential in our view to develop a mechanism that makes it more available to and more useable by the practicing physician. The "package insert" only has to accompany the drug package from which the prescription drug is dispensed. The drug labeling would hardly be meaning- ful `to the patient and, indeed, could be detrimental. The legal basis for an insert is founded in regulations promulgated pursuant to Section 502(f) (1) of the Federal Food, Drug, and Cosmetic Act which re- quires the labeling of all drugs to bear "adequate directions for use." These regulations provide that the prescription drug label must bear: the statement "Caution: Federal Law prohibits dispensing without prescription"; the recommended or usual dosage; the route of administration if not for oral use; the name of all inactive ingredients (with some exceptions) if not for oral use; and an identifying code number from which it is possible to determine the corn- plete manufacturing history of the drug. These label requirements are obviously most essential for proper usage and in order to monitor recalls. The concept of a compendium should in no way abrogate such label information. Additionally, the regulations require: "Labeling on or within the package from which the drug is to be dis- pensed bears adequate information for its use, including indications, effects, dosages, routes, methods, and frequency and duration of administration, and any relevant hazards, contraindications, side effects, and precautions under which practitioners licensed by law to administer the drug can use the drug safely and for the purposes for which it is intended, including all purposes for which it is advertised or represented; and "If the article is subject to (the new drug, antibiotic and insulin provi- `sions) `of the `act, the labeling bearing such information is the labeling au- thorized by the approved new-drug application or required as a condition for the certification or the exemption from certification requirements applicable to preparations of insulin or antibiotic drugs: Provided, however, That the infoun~ati'on required by (the above paragraph) may be omitted from the dispensing package if, but only if, the article i's `a drug for which directions, hazard's, warnings, `and use information are commonly known to practitioners licensed by law to administer the d'rug. The information required by thi's regulation is `appropriate and useful. I do not believe that `anyone would say that the physician is not entitled to such h~beling. Instead, the busy physician relies on promotional literature in medical journals and publication's such as the Physician's Desk Reference (PDR). As you know, we have instituted several regulatory actions against drugs because of their advertisements, `and we are presently requesting four drug firms to issue "Dear Doctor" remedial letters in `order `to correct PDR monographs. We are also engaged in revising our `advertising regulations issued pursuant to the Kefauver-H'a'rris Amendments. This `type `of surveillance `of advertising coupled with our administrative `action will, I believe, substantially increase the quality `of such promotions. Neverthe- less, advertising will remain `advertising. The thformation contained in package inserts is essential to counter-balance the claims made in many drug promotions. Unfortunately, the inserts are not accomplishing this function. Primarily, this is because it is not directed to the physician himself. Further, it is not in an easily readable form because of its length, and, of course, there is no index to package inserts or coordination with other drugs. ObvIously, the "package stuffer" is just not an available reference PAGENO="0119" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1263 source. It is inconceivable that a practitioner would clutter his office with all this labeling in loose form. Compilation of a Drug Labeling Compendium will be a difficult task. The central issue, from FDA's standpoint, is how to abbreviate the package insert without compromising public health protection. If we are to' condense such labeling, it will still have to adequately reflect current knowledge about the drug. However, we believe that an objective summary, approved by FDA, would be preferable to a package insert which is never read. Also, we believe it will be possible to group several drugs into one category with a general sum- mary covering all the drugs included in the group. Another pressing consideration is whether or not the package insert should be completely done away with in view of the Compendium, or merely the require- ment of distributing it with each package. As this complete labeling is the basis of a new drug approval, we do not recommend that such labeling be completely eliminated. Additionally, the package insert type information should remain available for those persons, such as clinical researchers', in need of such ex- haustive data. In a few instances, it will probably not even be possible to' provide for an exemption from distributing the "package insert." For example, we believe it is essential to have complete, unabridged information actually accompanying the package when such information may be needed by the physician at the actual time of administration. Another factor which prompts our endorsement of a Compendium is that it will list all drugs, thereby increasing the physician's prescribing range. And, of course, pricing information could be included as a supplement to the Com- pendium thereby fostering more economic prescribing. Ho'wever, listing in the Compendium could be construed as Governmental approval of a product. As we have stated on numerous occasions, FDA is not presently in a position to guarantee `the quality of all drugs on the market, although we are constantiy striving toward this goal. Nor could we assure the effectiveness of a drug listed in the Compendium. As you know, the' NAS/NRC review of effectiveness of drugs marketed between 1938 and 1962 is not yet completed. However, if this review results in the removal of any drug from the market, it would likewise be removed from the Compendium. Thus, the Compendium would if adopted, have to grow with the FDA as we draw closer to our ultimate goal of complete assur- ance. In this context we would recommend quarterly supplements be published in order to keep the Compendium current. With sufficient funds (approximately $5 million per annum) the FDA could publish a Compendium. FDA could also provide that listing in the Compendium would satisfy the requirements of full disclosure. Although the project could thus be achieved withou't increased authority, it would not be the most ad- vantageous manner in which to proceed. As the drug industry will be relieved of the cost of "package inserts" by this proposal, it would be appropriate to shift the cost of the Compendium to that industry. This, of course, would necessitate legislation. Additionally, legislation would be desirable to clarify the scope and purpose of the Compendium and to realign some present provisions of the Act in greater conformity with the Compendium concept. A final comment on this subject-we believe that increasing access to the complete labeling of prescription drugs is in itself enough to justify publication and distribution of a Drug Labeling Compendium. Additionally, the Com- pendium would list generic products together with their well-known trade name coun'terparts, thereby facilitating the economic prescribing of generic drugs and increasing the physician's familiarity with presently complex drug nomenclature. Mr. Chairman, we appreciate this opportunity to clarify our position with respect to marihuana. As evidenced by the attention given `by representatives of Government, the press, and the professions, it is plain that the increasing use of marihuana is a matter of national concern. I am aware, Mr. Chairman, that statements attrib- uted to me, hut which I did not make, have caused additional concern. Let me clarify the record in this regard at the very outset. I did not say that I would not object to my daughter smoking marihuana. I did not, and I do not, condone the use of marihuana. I did not, and I do not, advocate the abolition of controls over marihuana. I did not, and I do not, propose "legalizing" the drug. With your permission, Mr. Chairman, I would like to call your attention to one point which arose as the result of an erroneous news dispatch from Minne- PAGENO="0120" .1264 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY apolis on October 17. I was reported to have stated that I would not object any more to my daughter smoking marihuana than i1~ she drank a cocktail. The news dispatch was not correct and Mr. Julius Frandsen, Vice President and Washington Manager `of United Press International, has written me a letter acknowledging error by UPI. With your permission, I would like to insert a copy for the record. Mr. Chairman, I think the press recognizes the importance of the problem marihuana presents to society and makes every effort to provide the Nation with the best information available. My remarks concerning marihuana-in Minneapolis and elsewhere-have ~always been in response to questions from the press. In every instance, I have made it abundantly clear that marihuana has been and still remains under the jurisdiction of the Bureau of Narcotics of the U.S. Department of the Treasury. It is often erroneously assumed that the Food and Drug Administra- tion, which administers the Drug Abuse Control Amendments, has jurisdiction over not only the controlled drugs-the amphetamines, barbiturates, and `ha'llucino'gens-~but marihuana as well. Our Agency has made every effort to clarify the differences wherever possible. Now let me make several points about marihuana. First the shocking growth and use of marihuana has been so rapid that none *of us in government, in `medicine, or the legal profession has been able to counter it effectively. The use of marihuana in this country and the rest of the world, has a long history, of course. In the United States, "marihuana" refers to any part of The plant, or an extract such as the resin, which induces changes in physical perception and in psychological reactions. These physical and mental effects will vary in the individual marihuana smoker depending on four major factors The circumstances in which the drug l5 :used; The amount consumed, usually by smoking; The personality of the user; and The user's previous' experience with marihuana. The most common reaction to marihuana is development of a state of mind in which ideas seem disconnected, uncontrolled, and freely flowing. Perception is disturbed, minutes seem to be hours, and seconds seem to be minutes. Space may be broadened, and near objects may appear far away. When large doses are used-doses generally heavier than normally used in this country-extremely vivid hallucinations may occur. With such large doses, panic `and a fear of death may make the experience highly unpleasant. Gentlemen, what I have just told you about marihuana is a resume from one of the most respected textbooks on drugs in this country. It is the third edition of the Pharmacological Basis of Therapeutics by Louis S Goodman and Alfred Gilman. I refer you to pages 299 and 300' of this volume. It should be made clear, however, that no one in the scientific or medical ~communitie's is satisfied with the level of knowledge we have concerning marl- huana and similar drugs. As I have stated on several occasions', `there is still `much research to be done. For example, the chemical composition of marihuana has not been fully determined, although what seems to be the plant's most active ingredients have been isolated and synthesized Scientificaly controlled niarihuana studies of varying lengths have not been conducted on animals or humans to determine effects on body tissue and metabolism, or neuromuscular response, and on psychological, and cultural reasons for marihuana use, especially among our young people. The number and characteristics of marihuana users in the United States are virtually unknown, and paths to such use are unexplored. Mr. Chairman, there are `a number of studies that are being conducted under `the auspices of the National Institute of Mental Health. I would like to deposit with the `Committee at this time a recent listing by the NIMH of their marihuana research and related grant `activities. You will notice that underway are several projects on the sociolo'gy of marihuana usage, the metabolism of marihuana in man and animals, and patterns of acquisition of the drug. Gradually, we will be able to construct a clearer picture-based upo'n hard, scientific facts~-of this drug, its short and long-term effects, its full identity, and the ways it can and cannot `be used by man. ` Meanwhile, our enforcement efforts in the Food and Drug Administration as well as in the Bureau of Narcotics must continue. The enforcement strategy of the FDA is to concentrate on those who engage in the illicit manufacture, distri- PAGENO="0121" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1265 bution, and sale of large quantities of those drugs which are abused by some mem- bers of our society. This was the position advocated by the Department of Health, Education, and Welfare. This was the position adopted by unanimous vote of the Congress in enacting the Drug Abuse Control Amendments of 1965. In my opinion, it has worked well. As you know, Mr. Chairman, the Drug Abuse Control Amendments, which we carry out, include a class of drugs called the hallucinogens. Among these drugs are lysergic acid diethylamide-or LSD-peyote, mescaline, psylocibin, and oth- ers, such as DMT and STP, which have recently come upon the scene. Since the establishment of our Bureau of Drug Abuse Control, in February of 1966, we have conducted over 2,000 criminal investigations. A third of these have involved the hallucinogens;. Marihuana has been offered for sale or seized in nine out of every ten investigations by our BDAC men following the hallucinogen leads. Our agents, Mr. Chairman, have moved in on these cases swiftly but with a good sense of who has jurisdiction. BDAC agents in Dallas recently seized 1,000 doses of LSD. At the same time they seized approximately 100 pounds of man- huana, which they turned over to Bureau of Narcotics agents. At New York's Kennedy International Airport, BDAC agents, again working on an LSD case, seized not only a quantity of that drug but about 230 pounds of marihuana as well, which wa's turned over to local police and agents of the Ti. S. Customs Service. There are countless instances of marihuana appearing together with the hallucinogens under our jurisdiction. Our agents, working in close cooperation with other Federal agencies' and with the excellent cooperation of State and local law enforcement agencies, can account for 931 arrests to date. Sixty percent of these arrests involved the hallucinogens. And, as I have indicated-in `both the investigational as well as the arrest stages-manihuana is usually present. The Food and Drug Administration and the Treasury Department's Bureau of Narcotics h'ave been cooperating in dealing wiith this problem. There is a formal working agreement between the Bureau of Narcotics' and our Bureau of Drug Abuse Control which provides for a close working relationship between our agents in the field as well as our staffs in Washington. From this brief bit of history let me point out a rather significant anomaly in the penalties with respect to the two hallucinogens, LSI) and marihuana. During the past year and a half I have become personally aware of the problem as FDA's Commissioner. For example, our agents may find two individuals in the same room, one possessing LSD-an extremely dangerous drug-and the other possessing marihuana. Our BDAO agents would seize the LSD under the executive seizure provisions of the Drug Abuse Control Amendments, but the person possessing the drug would not be subject to prosecution under the Fed- eral statute. Ills companion, however, would be taken into' custody and be liable to a felony conviction `under the laws governing the possession of manihuana, a drug which Is less potent than LSD. This is why I consider the penalties to be inconsistent. We find at our Agency, that this inconsistency prevents full and effective protection of the public interest in the matter of abused drugs of any kind. We believe that no useful purpose is served by making a felon of the individual who abuses the dangerous drugs. Let me emphasize again that I have never advocated the legalization of marihuana. Rather, I have raised the question of the severity of the penalties attached to possession of manihuana and I suggest that the Congress might also wish to review these penalties in the light of enforcement experience throughout local, State, and Federal Governments and as the results of drug' research may dictate. Thank you. I will be happy, Mr. Chairman, to answer any questions you or other Members of the Committee may have. Senator NELSON. The hearing is `adjourned. (Whereupon, at 11:55 a.m., the hearing was adjourned.) PAGENO="0122" PAGENO="0123" ~COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY WEDNESDAY, NOVEMBER 15, 1967 U.S. SENATE, MONOPOLY SUBCOMMITTEE OF THE SELECT COMMITTEE ON SMALL BusINEss, 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 and Hatfield. Also present: Benjamin Gordon, staff economist; James H. Gross- man, minority counsel; Susan H. Hewman, research assistant; and William B. Cherkasky, legislative director, staff of Senator Nelson. Senator NELSON. The meeting of the Subcommittee on Monopoly of ~the Senate Small Business Committee will come to order. Our witness this morning is Dr. William Apple, executive director of the American Pharmaceutical Association. Dr. Apple, the committee is very pleased to have you appear this ~inorning. We appreciate your taking the time to come here. The chair- man is aware of your distinguished background in the State of Wis- consin and here on the national scene, and we appreciate your contri- bution to these hearings. You may proceed to present your testimony in any way `you see fit `and I trust that you have no objection to the Chair interrupting you from time to time with questions relating to your statements while you are proceeding through your testimony? STATEMENT OP WILLIAM S. APPLE, PH. D., EXECUTIVE DIRECTOR, AMERICAN PHARMACEUTICAL ASSOCIATION, WASHINGTON, D.C.; ACCOMPANIED BY MARY LOUISE ANDERSEN, S~COND VICE PRESIDENT; MAX W. EGGLESTON, PRESIDENT-ELECT; AND ROBERT P. STEEVES, DIRECTOR, LEGAL DIVISION Dr. APPLE. Not at all, Mr. Chairman. Thank you for the opportunity. Senator NELSON. Would you identify your associates for the record? Dr. APPLE. Yes. Mr. Chairman, we have with us Mary Lou Andersen of Wilmington, Del., who is our second vice president. Mrs. Andersen, would you please stand? Senator NELSON. Welcome to the committee. Dr. APPLE. And Max W. Eggleston of Waverly, Iowa, who is a mem- ber of our board of trustees and president-elect. `. 1267 PAGENO="0124" 1268 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Senator NELSON. Welcome to the committee. Dr. APPLE. To my right is Robert F. Steeves who is director of our legal division. Senator Ni~soN. Mr. Steeves. Would you for the record, Dr. Apple, recite your professional cre- dentials and professional background? Dr. APPLE. Mr. Chairman, I will be glad to submit a biographical sketch for the record, but very briefly, I have a bachelor of science degree in pharmacy, a masters in business administration with a major in marketing, and a Ph. D. in pharmacy administration from the University of Wisconsin and an honorary doctor of science degree from Long Island University. I am also a registered pharmacist in the State of Wisconsin. Senator NELSON. And were you associated with the University of Wisconsin School of Pharmacy while you were in Wisconsin? Dr. Appi~. Yes, for a number of years I was a member of the faculty, and chairman of the department of pharmacy administration at the University of Wisconsin. Senator NELSON. Then subsequent to that? Dr. Appi~. I left the University of Wisconsin to come here on July 1, 1958, and became executive director of the association on August 22, 1959. Senator NELSON. Thank you very much. I have a couple of prelimi- nary questions I would like to ask. How many members are there in your association? Dr. APPLE. Mr. Chairman, every time we appear before a congres- sional committee we are asked what our membership is, so I thought for once I would try to settle it. We have our membership roster on a computer, and I have brought with me the entire membership list of the American Pharmaceutical Association. As of November 6, 1967, we have 46,000 paid members of which approximately 14,000 are student members. Senator NELSON. And these are, except for the students, all prac- ticing pharmacists? Dr. APPLE. No, sir; they are not. There are roughly 787 who are not engaged in the practice of pharmacy. Senator NELSON. And what is the activity of those 700-plus? Dr. APPLE. Well, some of them are teachers, some of them are re- searchers, some of them are in the category of people who are interested in pharmacy and are employed in some administrative or executive positions. Senator NELSON. What percentage of the practicing pharmacists in the United States do you have in your association, do you know? Dr. APPLE. Roughly a third of those actively engaged in practice. Senator NELSON. Is there any other national organization of phar- macists? Dr. APPLE. Yes, Mr. `Chairman, there are `a number `of specialty organizations of pharmacists. Two of them-American Society `of lios- pital Pharmacists and the American College of Apo'theca;ries-are directly affiliated with us. There is another association made up of owners of drugstores; there is another association of chainstores. There are wholesaler organizations. There are organizations `ad in- finitum in pharmacy. But the only organization that speaks for the PAGENO="0125" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1269 profession as a whole is the American Pharmaceutical Association which was established in 1852, 5 years after the American Medical and 5 years before the American Dental Association. It is the pro'fes~ sional society, sir. Senator NELSON. Your association is a nonprofit, tax exempt asso- ciation? Dr. APPLE. We are a 501 (c) (6). We also have a foundation which ~s a 501(c) (3). Senator NELSON. But it is a tax exempt organization? Dr. APPLE. Yes, `sir. It is. Senator NELSON. What is the basis of this exemption? Mr. Sa~n~vES. It is exempt, a tax exempt organization as a business league under section 501(e) (6), which includes trade associations and professional societies. Senator NELSON. HOW many people do you employ in your national office? Dr. APPLE. We have currently a staff of around 75 full-time profes- sional and clerical employees. Senator NELSON. Do you have any objection to submitting your financial statement to the committee? Dr. APPLE. Mr. Chairman, each year we submit a report to our entire membership, active and student, published in `our journal which con- tain's the complete proceedings of our annual meeting, its house of delegates, all of its committee reports, the reports of the officers. For example, in this document you will find the report of the treasurer for 1966 on page 300, and you will find our fmaneial statement under exhibit B in schedule 1. Senator NELSON. Is this the statement that you submit to IRS? Dr. APPLE. Yes, sir. Senator NELSON, This is the full'stwtement? Dr. APPLE. Yes, sir. It isn't the copy `of our income tax return. It is the statement prepared by certified public accountants for distribution to our members which shows the source of our entire income as well as the expenditures in detail made by the association. We would be glad to submit a copy of our income tax return if that is what the Senator wishes. Senator NELSON. If you would submit it to the committee we will decide whether or not we will print it, hut we will at least print your financial report to your members in the record. (The financial report referred to follows:) AMERICAN PHARMACEUTICAL ASSOCIATION, FINANCIAL STATEMENTS, DECEMBER 31, 1966 OLIVER T. GRAHN, CERTIFIED PUBLIC ACCOUNTANT, Severna Pa~'1c, Md., March 18, 1967. Dr. HUGO H. SCHAEFER, Treasurer, American Pharmaceutica' Association, Washington, D.C. DEAR SIR: I have examined the combined statement of assets', liabilities and fund balances at December 31, 1966, of the Amei~ican Pharmaceutical Association and the related statements of income and expenses for the year then ended. My examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting reOords and such other auditing procedures as I considered necessary in the circumstances. PAGENO="0126" 1270 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY In my opinion, the accompanying combined statements of assets, liabilities and~ fund balances, and of income and expenses present fairly the financial position of the American Pharmaceutical Association at December 31, 1966, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. OLIVER T. GRAHN, Certified Public Accountant. EXHIBIT A AMERICAN PHARMACEUTICAL ASSOCIATION-COMBINED STATEMENT OF ASSETS, LIABILITIES, AND FUND BALANCES, DEC. 31, 1966 Total $312,857.77 81, 808. 25 522,105.13 3, 471. 26 1,345,232.97 1. 00 31, 195. 93 425. 00 52, 688. 72 2,349,786. 03 143, 577. 55 3,471.26 216,343. 80 200,916.39 47,702. 35 612,011.35 Permanent Building Special General fund Fixed assets funds and trust funds and funds grants -- $228,984.04 $50,700.17 $471.66 $32,701.90 81, 499. 53 308. 72 267,031.79 253,661.89 1,411.45 3, 471. 26 - $1,345,232.97 1. 00 31, 195. 93 425. 00 52, 688. 72 665, 296. 27 1,345, 233. 97 304,670.78 1, 883. 11 32,701. 90 143, 512. 55 65. 00 3,471.26 203,696. 80 12,647.00 200,916.39 47, 702. 35 595, 828.09 3,471.26 12, 712. 00 ----- ASSETS Cash Accounts receivable Securities,schedulel Dues from other funds Land and buildings Furniture and equipment____ Prepaid expenses Deposit, airline Deferred NFXI I costs TotaL LIABILITIES Accounts payable: Trade Tofunds Deferred income: Dues and subscriptions___ National Formulary XlL.~. Other Total FUND BALANCES . Balance, Jan. 1, 1966 E,aess of income over ex- penses, general fund, exhibit B Excess of income over ex- penses, other funds Reserve for survey of the profession Transfer of building fund deficit Total j---- -- -- --~ ~- 1,629,622.94 25,662.24 446, 257. 14 100, 000. 00 (463,767. 64) 1,737, 774. 68 407, 573. 58 1, 345,233.97 317, 893. 55(462, 172. 03) 21, 093. 87 25,662.24 (16,694.03) 464, 055. 14 (1, 103. 97)~ 100, 000. 00 (463, 767. 64) ---------- 69, 468. 18 1,345,233. 97 301,199. 52 1, 883. 11 19,989. 90 - --- ----- -----j- --- - PAGENO="0127" .~ Q(D N~4~ C) 2 C) -4 C) -4'- Cl) -< C') m 0 >C) ~ 2 0 02 C)~ >( > = -4 U 2 0> 2 C) 2 C) C) > 2 C) >< 2 C', C,, C) II 0 `-4 `-3 `-4 0 C12 OC~ 2 ~~22 2 ~HH . P0 :~ ;~~:: :; ; ~, - Cl~ N)00'-' ~C), (0 ~ - ~oo~0~ (0000) ~ -, (00)C~ C)C,) 000000* 2 00(0 2 -oo~ -j~ ~ .~(0 (0' 1~3~ (1)0) ~..4~0)--.--(O..* ?~ ?~?°?1N$" 0000 ~` ooo~c~r'., ~ 0)N) F'l* C) (1~ 0)00 ~ F.) C) (OC) - F~1 CJ~ 0000 (1)0) N) 9'~4 0); 00-'.JQ' PAGENO="0128" C,, C, -( ~`)p~ ~ -4-4-4~ I Hg' CO C) C) -w C) -4 C) 1~ C,) CO 0 C) -4 C,) C) -4 C,) 0 P 0) -4 0000000000000000 000000 ll~ II ~ - 00 (O~U1 0 000000 2 C) -4 0 -4, co~- ~ o r~r~Z ~ 00 COC0) 00CO~0 ~0 0 0)C~) 0 ~ ~ Qor%)QCOCOO COO 0CON~QCO0 CO00 CO00~~Q~ COO 0 O ~ ~ ~000)C~3 O~ O~)CO(D-J00 ~c~- ~ ~oco ~ oor',c,, - ~ C~) ~(0CO O-~cO00~ N~4 0 ~CDCOCO CO PAGENO="0129" COMPETITIVE PROBLEMS IN ThE DRUG INDUSTRY 1273 Senator NELSON. You mean your organization pubiishe~ it, the Na- tional Formulary? Dr. APPLE. That is right, sir. Mr. GORDON. That is one of the official compendia of the United States; is it not? Dr. APPLE. The National Formulary is one of the official compendia recognized under the Food, Drug, and Cosmetic Act. Senator NELSON. how long have you published the National Formulary? Dr. APPLE. Since its inception. Senator NELSON. And was the National Formulary authorized by the act of Congress? Dr. APPLE. Yes. The United States Pharmacopeia and National Formulary are two of the official. compendia that are recognized under the Food, Drug, and Cosmetic act. Senator NELSON. Do you in any of your publications regularly pub- lish scientific material respecting drugs for distribution to the pharmacists? Dr.. APPLE. Yes, sir. In both of the Journal of the American Pharmaceutical Association, material which will be of interest to the practicing pharmacist and in the Journal of Pharmaceutical Sciences material which will be of particular interest to researchers, educators, scientists as a whole, not only in pharmacy, but in many other disciplines. Senator NELSON. Go ahead, Doctor, and present your statement as *you see fit. We welcome Senator Hatfield here this morning. Dr. APPLE. Mr. Chairman, we are pleased to have this opportunity to present the views of our profession on some of the issues involved in these hearings. The subcommittee's invitation to us listed specific topics youf ~is1ied us to cover and we are happy to respond. We can assure you that the Nation's pharmacists have been follow- ing closely the hearings o~ this subcommittee. Many of the ques- tions that have been asked of witnesses here publicly have been asked from pharmaceutical association platforms and in other forums for years. Fortunately, the subcommittee has access to informatioii and resources to generate a more informative dialog on many of the issues. The records of these hearings contain a wealth of information about the pharmaceutical industry, its marketing structure, its economics, and its conttibutions to our society. And, the record for the industry is being made by those most capable of presenting an accurate and de- tailed explanation for individual firms involved in the hearings. Our profession, as well as the public, is learning a great deal from the testimony and resultant discussion of these hearings. Senator NEtJSON. Dr. Apple, may I interrupt for just a moment? Rave you read all of the published hearings thus far? Dr. APPLE. I have read most of the statements, Senator. Senator NELSON, We are interested as a od~inmittee in the best sci- entific presentation of the varying viewpoints about the problem~ we are considering. Are you familiar with the professional reputation of the professional witnesses who ha~re appeared h~i~e? * . . 8i-~28O--6S-pt. 4-9 PAGENO="0130" 1274 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Dr. APPLE. Mr. Chairman, as I read the statements and the bio- graphical sketches of the individual witnesses, I certainly was im- pressed with the individual qualifications of the scientists who ap- peared before yOu as well as the executives of the pharmaceutical industry. Senator NELSON. If you have any suggestions, from your wide pro- fessional contacts, as to additional witnesses with special expertise in any aspect of the hearings that we are conducting, the chairman and the committee would appreciate your suggestions and would be willing to consider hearing them. We welcome suggestions from any- body in the related professions, whether it be pharmacy, pharma- cology, medicine, or the manufacturing side of drugs. So if you can suggest witnesses who have some special knowledge in fields that have been covered or should be covered, the committee would be glad to consider calling any of the witnesses you may suggest. We do wish to have the best possible record and where viewpoints are in con- flict we want to be sure that we have both sides or more, if there are more than two sides, so that the committee and the public will be better prepared to evaluate the testimony that has been presented. I might say that some people have been critical of my conduct of these hearings on the grounds that the hearings haven't been objec tive or haven't been fair. It has been my attempt to make them so, and I repeat what I have said on previous occasions: We want to hear from the best witnesses representing all Viewpoints of the problems that we are considering. We can't hear everybody, of course. We have, had requests from all over the United States, and we would have to run for several years to meet all the requests. But in order to have balance, we will hear testimOny from those who have conflicting viewpoints about various problems that we are presenting, whether they represent industry or whether they are critical of industry, or whether they are out of the professions, practicing physicians or professors, or what have you. So if you have some suggestions we would like to put them together with the other requests that we have had and then attempt, in a anced way, to invite the best experts that we can find so that all view- points will be heard. Dr. APPLE. Mr. Chairman, we will be glad to review the list of wit~ nesses who have already appeared and those scheduled to appear and. send you any recommendations we have on that subject Senator NELSON. I guess, as of this d~t'e, you represent the only major profession in the health field which we have not, in fact, invited to appear before the committee So if anybody has a complaint it is your organization, not the others They have all at least had one witness here, but I don't want you to think that I have been inten- tionally discriminating against your organization I realize you have been called to appear here very late, just as the Pharmaceutical Manufacturers Association has, although representa tives of individual firms have been here previously Dr APPLE Frankly, Mr Chairman, we were appearing before other Senate and House committees rather frequently the last few months aiid we appreciate the reprieve Senator NELSON. Proceed, Dr. Apple. PAGENO="0131" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1275 I know Senator Hatfield, as you have questions, you will interrupt. Dr. Apple is perfectly agreeable to having his testimony interrupted at any time. Dr. APPLE. Quite honestly we regret that some individual firms in the pharmaceutical industry as a whole are again being exposed to public scrutiny, lay press headlines and uncomplimentary discussions. We would far prefer to see such changes as are needed accomplished voluntarily, out of the public spotlight. Unfortunately for all of us, the industry generally has refused to take appropriate action. Prod- ding and protests from our association `over `the past decade, from individual pharmacists and fro'm the profession as a whole have been to little avail. Senator NELSON. What kind of prodding and protests are y'o'u refer- ring to, or do you get specific about that at a later place in your statement? Dr. APPLE. Well, we do generally throughout our testimony, Mr. Chairman, but basically here I have reference to the meetings that we have had with individual firms, with industry spokesmen, with the committee reports presented at our annual meetings over the years, where specific issues were discussed and our recommendations and pleas to industry were outlined in detail; resolutions adopted by our Association on price discrimination, on nomenclature, on samples, and other subjects in which we have a `mutual interest. Senator NELSON. Have you had `any success with `the major issues that you `have raised with the industry? Dr. APPLE. We have copies of our committee reports here which we will be glad to file with the committee so that they can see the `specific comments we have made to industry. Senator NELSON. The committee would like to have those reports for the files, and if it seems appropriate we will incorporate them into the reco'rd of the hearings.1 Dr. APPLE. We are `surprised and sh'ocked .that industry spokesmen would now accuse us of being political opportuni'st's or insincere for saying publicly what we and `other pharmacists `have `been s'aying in industry-profession meetings for many years. We suppose that the industry's complaint is `designed to rally it's forces `and create doi~bt in the ~ninds o'f pharmacists who have not `studied the issue's. For years we have heard attempted justifications for the large pri'ce differentials and `discriminatory pricing practices. None of `them rings true, th'ough there i's `some `substance `of `truth in the many rationaliza- tions' that `have been offered. We fully understand that research costs must be recovered, that quality-control costs must be included, that premarketing `testing and promotion and all other operational and administrative costs must be covered by sales `income. Thi's i's elemen- tary bu'siness economics. ` Senatoz NELSON. You surmise that the industry's complaint is de- signed to rally its forces and create doubt in the'm'inds of pharmacists. Do you have any specific evidence other than `the publicity that appears in various professional journals and publications that there have been specific attempts by the industry to appeal to the, pharmacist with respect to the issues `that you have been raising for years? 1Retained in committee files. PAGENO="0132" 1276 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Dr. APPLE. I certainly have personal conversations and corre- spondence from our members that start out and say "Mr. So and So, the sales representative of :t,he .X Co., was in today to tell me this and I didn't know we had this position," and they proceed to outline what to me is apparently gi~oss misinformation. In other words, I would say candidly that I thiiik the industry is detailing the pharmacists very well about our position these days, very well from their standpoint but not from ours. Senator NELSON. Do I understand you to say that from what you hear and see the industiy is u~ing detail men to advance its position with respect to the problems you raise and to be critical of your associa- tion as such? Dr. APPLE. Yes, sir. Senator NELsoN. Do you h~ve evidence that this is a widespread at- tempt by the industry all over `the country through their detail men Dr. APPLE. I don't know to what extent very frankly. 1 have asked my staff not to even bother to tell me about it because we have more im- portant things to do, Senator. Senator NELSON. Have they sent out any publications or communica- tions or letters directly to your members Dr. APPLE. Well, they have taken certain papers and. reproduced them and distributed them to members. Senator NELSON. When you say certain papers, to what do you refer? Dr. APPLE. Speeches that were presented at certain meetings. Senator NELSON. Speeches made by whom? Dr. APPLE. Educators basically; material that is pro their viewpoint. I don't see anything wrong in this, Senator, because we have our method of communicating to our members with our viewpoint. Senator NELSON. I wouldn't suggest there was anything wrong in it. It is a free country and everybody is entitled to present his viewpoint to the public. Dr APPLE I think the thing we resent is now being accused as being political opportunists for expressing our viewpoint. Senator NELSON.. The committee would simply be interested in how widespread the activity ~5. Dr. APPLE. This statement was made in the last few weeks by the president of the Pharmaceutical Manufacturers at two public meetings. Senator NELSON. What statement? Dr. APPLE. The fact that we are being political opportunists and in- sincere for expressing our viewpoints. Senator NELSON. And these statements were made on what occasion? Dr. APPLE. On occasion of the public meeting of drugstore owners in Houston and on occasion of the midyear meeting of the Pharma- ceutical Manufacturers Association. . Senator NELSON. I know that you say on page 3 that "for years we have heard attempted justifications for the large price differentials and discriminatory pricing practices." And "none of them. rings true," to quote you Are you referring in particular to the discrimination in price to the pharmacists~ the drugstore owner, versus the price offered to the Defense Supply Agency or Veterans' Administration or to hospitals or public institutions for the same drug? Dr APPLE In general, yes, but I explain that in detail a little farther on here, Senator PAGENO="0133" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1277 Senator NELSON. Senator Hatfield has some questions. Senator HATFIELD. Dr. Apple, I would like to ask you, in terms of your testimony here, what is the basis for the `accusation of being "political opportunists," as you use the phrase? What `are the words "political opportunists"; what appropriate use of those words in rela- tio'n to your profession? Dr. APPLE. Well, Senator, I suppose I should have put that ma- terial in quotes because that was exactly the words used in the speech made. That sentence perhaps should have been put in quotes.. Those are not my words. Those are Mr. Stetler's words. Senator HATFIELD. How are we to interpret that as a committee ? What is your professional organization and professional group, how does political opportunism get involved here? Is there some reference to this committee, coming before this committee, or what? Why did they use the words "political opportunists?" Dr. . APPLE. Senator, if I can quote from this statement presented by the president of the Pharmaceutical Manufacturers Association on November 1, 1967: "Our industry has been under attack from various"- Senator NELSON. Excuse me, whose statement is this? Dr. APPLE. Mr. Stetler's. Senator NELSON. Before what group? Dr. APPLE. Before the National Association of Retail Druggists. Senator NELSON. Where was this? Dr. APPLE. Houston, Tex. Senator NELSON. All right. Dr. APPLE (reading): Our industry has been under attack from various `politicians for too many y~ars. We are getting a little tired oct the game and in the present instance it Is more than a little disconcerting to know, and we certainly do, that the Nelson Subcommittee and Russell Long and his staff have been getting considerable assistance and encouragement from some representatives in pharmacy. This in my opinion is an unexplainable and a most reckless type oct activity. Senator NELSoN. Qbviously, since Senator Long and I are states- men, he is referring to you as a politician. [Laughter.] Senator HATFIELD. I didn't quite catch where the phrase "political opportunists" was referred to. Dr. APPLE. That came earlier in the speech, sir. It goes on to say: For those who have chosen this latter course based on honest personal calcula- tions or beliefs I have no criticism, but those who, based on cold political calcula- tions, have decided they can Improve their personal or professional position by throwing an industry, another profession or a segment of their own profession, to the Oongressional wolves in my opinion deserve our collective condemnation. Senator HATFI~ILD. Those are very interesting statements but I don't quite follow the use of, in your testimony, the words "po1~iticaI opportunists." Mr. STEEVES. I think that particular statement, Senator, was our interpretation of those two passages. Senator HATFIELD. So yo'u are really not then quoting directly, this phrase from any testimony? Dr. APPLE. It is based on- - Senator HATFIELD. This is an interpretation of your association or your group on what was said? PAGENO="0134" 1278 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Down in the next paragraph it tends to be, on the surface at least, a bit contradictory: For years we have heard attempted justifications for the large rise differentials and discriminatory practices. None of them rings true, though there is some substance of truth. Well, what ratio of truth to untruth is there in this statement that you make ~ How is this committee to mterpret your comments here, is there a 60-40 differential or ratio, or is there a 50-50 or a 70~-30? How much truth and how much untruth? Dr. APPLE. Senator, I think if I am allowed to proceed with my statement you can make your own evaluation where I have tried to point out the specifics and certainly you can judge on that basis. Now, when an industry representative says that he can't sit in a room and explain why his price is different than someone else's price, there is an element of truth. Perhaps the antitrust laws won't permit such a gathering But it doesn't explain away the price differences Mr. STEEvE5. It is also the case in the area of quantity prices, Senator. Of course, there is some economy in bulk purchases and prices, so when an industry spokesman explains the disparity in prices based on the quantities, there is some substance of truth to that. However, that is not a complete explanation for some of the wide price differentials that we have seen.. This is what we mean by saying there is some substance of truth. There is some promotional value, there are some economic savings through quantity purchases but, of course, it is only part of the story. I don't know that we could evaluate it in terms of 60-40 or any percentage. Senator HATFIELD. Then, actually, the phraseology here should have been perhaps a little differently stated "None of them rings true" is pretty categorical. Mr STEEVES That is right Senator HATFIELD If you had started the sentence as if there is some substance of truth and then qualify that-but when you start out by saying "none of them rings true" and then try to qualify something as categorical as that, I think it is a little misleading On this price point, I gather from your testimony and from others representing your viewpoint, there is a feeling that the pharmacist has a greater understanding of the price problem in the new drugs coming on to the market, and the changing price picture and struc- ture than the physician has The pharmacist is dealing with this day in and day out and, therefore, he has a better comprehension of the overall price problem, is this not the essence of your thinking- Dr. APPLE.. Yes, sir. Senator HATFIELD (continuing). Than the practicing physician? Dr. APPLE.. Yes, sir. Senator HATFIELD. Yes, all right. Then let me ask you this: Do you have ~ny knowledge of pharmacists who seek to keep doctors in- formed ~ Let's say, here is a pharmacist who has a continuing relation ship with certain physicians through prescriptions that are sent by the physician, and over a period of time this pharmacist realizes that this doctor is prescribing a certain and particular drug, and that there are some new changes in this drug picture or new prices that are in- volved and perhaps other drugs that are equally good. Does the phar- PAGENO="0135" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1279 macist initiate any kind of an action to inform this doctor or doctors of these changing situations? Dr. APPLE. Senator, I would say that many pharmacists have done this over the past, and it is going on with increasing frequency, ~special1y because, as we have mentioned in our testimony, the Ameri- can Medical Association has asked the doctor to be conscious of what the patient is paying for his drugs, which has in itself motivated the physician to ask the pharmacist more questions. On the other side of the fence, we have, o~ course, the public itself saying to the pharmacist "Why do I have to pay so much ?" Now this particularly happens when, for example, you have a prod- uct that a physician can buy at a fraction of the price the pharmacist has to pay, and the physician may give that product to his patient, and subsequently that patient may go somewhere else or may need some and it is not convenient for him to get back to the physician's office, and the physician will say "Well, I will call your pharmacist. Which pharmacy do you want me to call ?" And the patient will go there and the pharmacist will say "That prescription is so many dollars." Then, the patient will blow up-he will come right out and say "But Dr. So and So only charges me so much for the drug." Well, even removing the pharmacist's fee for the service he renders, the pharmacist must charge much more than the physician because the drug cost him much more. Mr. STEEVES. I also have, Senator, from November 13, Drug Topics, ~ trade publication, which discusses what pharmacists think about generics. One paragraph says: Asked if physicians discussed the use of generics with them, 81 percent of the respondents gave a negative reply. However, 38 percent reported having had such ~discussions with their doctor clisruts. So I think that this would be one barometer of the number who may be involved in this type of activity. Senator NELSON. Did I understand you to say that betwe~n the price paid by the dodtor supplying the drug to his patients and that paid by the dispensing pharmacist, there is a differential in favor of the. doctor? If the doctor decides that he wants to buy directly from a manufac- turer, does he buy at a price that is lower as a matter of practice than the price the retail pharmacist has to pay? Dr. APPLE. Sometimes that occurs. We know there are various promotional efforts that are directed exclusively toward the physician and that the pharmacist doesn't have the opportunity to participate in them. Senator NELSON. But the individual practicing physician, unless he has his o*n pharmacy, doesn'Jt as a matter of practice buy drugs di- rectly; does he? Dr. APPLE. Well, dispensing physicians are still a problem to our profession, sir. Senator NELSON. But if he is a dispensing physician, does he buy at a lower price as a matter of practice than the pharmacist? Dr. APPLE. In the case of many drugs, that is true, sir. I wouldn't want to categorically say it happens with every single purchase made by the physician, but in sufficient cases to cause the pharmacists serious relations with his patients. PAGENO="0136" 1280 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Senator NELSON. What kind of a ôase were you' referring to in which. the patient gets a drug from a doctor and `then subsequently the doctor writes a presëription and the patient then objects to the price he' pays at the `drugstore? `. ` Mr. STEEVES. Frequently, in order to get-there was a case of the' diuretic in which the company, as a promotion to hospitals and to dispensing physicians, would give 500 tablets free with the purchase of 500. This would `be a 50-percent break. Senator NELSON. You mean if the physician would buy 500- Mr. STEEVES. They would get 500 free. The community pharmacist now would have to pay the list price. So the physician would be buy- ing at a 50-percent discount. Senator NELSON. You are not talking about ,the phy'sician wh'o has his own pharmacy? Mr. STEEVES. No. ` ` ` Senator NELSON. You are just talking `about `an ordinary practicing physician who buys 500 of this diuretic directly from~ the manufac- turer and then receives 500 free, `although he does `not have his own pharmacy? Mr. STEEVES. He dispenses directly from his office those drugs that he uses.' Senator NELSON. And then he charges his patients a fee for the drug? Mr. STEEVES. It varies. Some of them charge `a fee depending on the cost of the drug involved `and some of them include drugs in their overall fee. This varies with dispensing physicians. Senator NELSON. I am not talking about the case where the manu- facturer supplies samples of drugs and' the physician gives them aw'ay to patients without `a fee. I am raising an issue that I wasn't aware of, where an individual, practicing physician who doesn't have his own pharmacy, as' a matter of general practice, is offered a `drug at a certain price and then is given 500 units free. I's the charging of a fee by the doctor for such `drugs a common practice? Mr. STEEVES. I think that the Subcommittee on Antitrust and Monop- oly has been holding hearings on the problems of physici'in ownership of pharmacies and drug companies and' some, of the information they have developed there shows that there are companies who cater, wh& specialize in catering, to dispensing physicians with low-cost drugs. Senator NELSON. I am not talking `about dispensing physicians. I am talking about the ordinary physician in his office who doesn't dispense drugs `at `all except in a special case when a manufacturer wants to promote a `drug with the doctor, `and sells him 500 units and gives him 500 free. Is that a practice that occurs frequently? ` Dr. APPLE. Senator, I think a physician basically is either a pre- scriber or dispenser, as we use that terminology. As a general rule, he prescribes all drugs and, perhaps, the only ones he actually hands to a patient are samples, in contrast to a physicion who makes it a routine and regular practice of furnishing medication `to the patient. Senator NELSON. So that it is clear in the record, we are talking about a physician who dispenses the drug from his own office The mann facturer may take this diuretic to which you referred, and sell 500 to the doctor `and give him 500 free, and he is then in direct competition with the pharmacist. The doctor is honest, so he charges the same' PAGENO="0137" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1281 markup fee that the pharmacist would. But since the drug costs him only half ~s much the patient pays much less than the normal retail price. Is that the kind of caSe you are talking about? Dr. Appn~. That is one example; yes, sir. - SenaWr NELSON. Why would they give this deal to the dispensing physician and not give the same deal to the pharmacist? Mr. STEEVES. The physician, of course, has the' advantage that he can choose which drug he is going to dispense. So that if he is going to have a thousand of company X's product there, he is going to dispense that particular product. The pharmacist, on the other hand, has to dispense what the doctor prescribes, and, therefore, the way it has been explained to me is that this is the way to ge't the doctor to use your particular product if he is a dispensing physician, give him a price break so he gets the product in there and he' is going to use it. On the other hand, if he is a prescriber and you detail him, the next detail man may come along and have you prescribe something else. So there would `be no promotional advahtage of giving the price break to the~pharmacist.' ` ` Senator~ `~NELs~n~. So' if IL understand you cOrrectly, you `are saying th~it to give the dispensing physician a price bieak is a matter~ of pro- motion since the doctor is the prescriber and if he `gets used to pro- scribing this drug he may continue to prescribe ,by the brand' name of the firm which sdld him the drug.' Mr.' SiTEv~s. No~ because -ordiharily if it is a dispensing physuuan, he is going to be dispensing that drug continually.,' It is generally thought that price here is a, major c9nsideration `and'that perhaps' if the next company' comes kiolig and' gives a little better price the next time he needs a diuretic, he will use the next cothpa~iy if it meets with his medicatjudgmnent~ I don't think the firms' suppo~that `the physician will change from dispensing toprescribing. ,` Senator NELSON. I don't nie~n that. The idea of the promotion was to introduce this particular trade name diuretic to the do~tor; is that what you are saying? ` ` ` Mr. S~r~vns. It could be., , " `Mr. GORDON.. You' are nbt referring only, to iujecta~ble~, `are you? Aren't you referring also to oraldiuretics? ` " Dr. APPLE. I ~vas'referrin~ to au' dosage forms `basically. Mr. Goimow. `The physician has to dispense, the ~n'j'ectabIe `hithself, doesn't he? ` ` ` ` ` `Mr. SmEv~s'. He ordiua~iiy~ administers that. ` ` ` `Dr. APPLE. He administers the drug or has his nurse administer it' under `his supervision.' ` " ` ` - `Mr. G~imON. Yes.: Mr. STEEVES. Butthe di'scussions ~ve were talking about here, Mr. Gordon~ relate primarily `to drugs that `CaR be self-administered, tab- let's, capsules. ` " - Mr. GoR1ioN~ All right~ `, Senator HATPIELI. May.I ask ~ q'iie~tion on this In the field of non- prescription drugs, are there any price benefits o~ br~aks or wh~teyer you call it, given from the ~industry' to the pharmaei~ts directly? You are speaking `of a pri'ce brea'k being given `froth' a ph~irm'aceutical house to a ~phy'sici'an, a~dispensing'physi'cian, a's' I understand. Mr. STEEVES. `Of prescription drugs? PAGENO="0138" 1282 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Senator HATFIELD. Prescription drugs. All right. If he gets 500 he get 500 or whatever it is Are there any such price breaks given to the pharmacists running a drugstore, a pharmacy ~ Mr. STEEVES. Yes. Senator HATFIELD. From `the piharmaceutical house for nonpre- scription drugs? Mr. STEEVES. Yes. Senator HATFIELD. So in other words, you then can get the same kind of price `breaks if you push certain drugs under this same basic ar- rangement? Mr STEEVES This is correct If you pick up the pharmaceutical literature you will see an extra 10 percent if you buy a case of this cough syrup or that cough syrup; yes. Senator HATFIELD. But, it is wrong for the physican, and it is right foryou? Mr. STEEVES. No. Dr. APPLE. No, Senator, I think the analogy is between pharma- ceuticals and nonprescription drugs or any other commodity that might be available in a drugstore In the latter case, you will find that the manufacturer publicly offers a deal, a quantity discount, a p:romoti'on which is available ito anybody who wants to buy it. Now- Senator HATFIELD To any pharmacies who want to buy it ~ Dr. APPLE. it can be to grocery stores. It can be `supermarkets. It can be any type of retail outlet Mr SmBv1~s Dispensing physicians ~ Dr APPLE It can be physician himself if he wants to buy it Senator HATFIELD I see How do they make this selective list then with physicians ~ I sup- pose you are inferring that this broad type of price deal is not given to every physician as it is to every drug~ist? Mr STEEVES Generally, I think it would be available to any physician. Dr APPLE I think ut would be Senator HATFIELD In other words, it is the same broad base proposi- tion, so to speak, professional proposition Mr. STEEvlis. For those in the medical profession; yes. Senator NELSON But not to the pharmacist at that stage Mr. STEEVES. There is another factor, Senator. You mention these price breaks and `so on. Our journal policy will not `accept these ads em- phasizing the profit or the deal promotion This has been our policy for a number of years. We would like to have the drugs promoted and sold to our members and sold to the public on the basis of intrinsic merit, not on the basis of an extra 10 percent, `and if-we could go through our journal over the last several years `and you will see some of the ad's that have been modified at our request. Some of the ads which ap- pear in the general trade press have not run in our journal. Senator NELSON Does `this philosophy prevail within the profession of pharmacy ~ Mr. `STEEvES. I think it is growing. I don't know whether P~could `say it prevails at the present time. Senator NELSON Let me ask you another question on this pricing PAGENO="0139" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1283 Certain physicians have said that `they sometimes use symbols in prescription's that `are taken to a drugstore to indicate that the in- dividual who needs the drug is an indigent `and, `therefore, a different price should be `applied than `in the case where that symbol is not present. Do you know about this practice? Mr. STEEVES. Yes. Dr. APPLE. There was `a code word that was fostered by one of the other organizations in pharmacy for a number of years, but about 4 or 5 years ago they dropped `the word on advice of the Justice Depart- ment-I `think-you `h'ave reference to a symbol pu't on. the prescrip- tion which indicates `to `the pharmacist what `the price `is `as well as sym- bols `that encourage the pharmacist to give special price consideration to individual patients. Senator NELSON. Yes. Dr. Ai~LE. For example, designation "PP" referring to an indigent person. Senator NELSON. That is the prac'tice `today so there is this pricing difft~rential within the pharmacy outlet. Dr. APPLE. I would say that the practice is disappearing rather rapidly because in most cases some State program or third party is paying for them rather than the individual. Mr. STEEVES. If I could add for just a minute, Senator, I have just talked to two of our community practitioners. Mr. Eggleston says it has been a long time since he has seen that abbreviation' and Mrs. An.- dersen says that title 19 has just about eliminated it in her area. I think this is generally true, before we had the title 19 broad program, before we had any of these poverty programs on drugs, this was a more wide- spread practice but it is on the wane now. Senator HATFIELD. On this practice of pricing in the pharmacy out- let, do you have `any records or any evidence on this constant report we get that in the ghettos the pharmacy outlets are charging higher prices for tl~eir drugs than they are in other parts c~f the same city? Dr. APPLE. ,Mr. Chairman, .1 have no direct informatiOn yet. I `have read the article that ~appeared~in the. New England Journal of Med- icine. I understand that the Boston newspapers this week are carrying some survey of their own. We are now starting to look into this situa- tion. We haven't proceeded far enough where I could intelligently and accurately give the committee any information. I can say that our association certainly does not condone the practice of an individual being charged a different fee for his prescription based on any kind of discrimination whatsoever. Senator HATFIELD. But you are involved right now, I understand you to say, in' investigating this discriminatory pricing within the pharmacy profession that you represent? Dr. APPLE. Well, we aren't investigating that. We are investigating the reports that we have brought to our attention. Our association per se is not an investigatory body. In other words, when we see something that involves an individual member of our association, for example, we are concerned. We do mention some of this- ` Mr. STEEVES. I think on page 15, Senator, to get down to the position of the `association, we do say that there are some pharmacists who op- pose price discrimination by drug manufacturers, but who support the inequitable markup system of prescription pricing. PAGENO="0140" 1284 COMPETITIVE PROBL1~MS IN THE DRUG INDUSTRY Senator NELSON. Does the Senator object if we just get to that in the normal course of the testimony, unless you really want to pursue it at this point? Senator HATFIELD. I have just one further question on this point. I will be very happy to wait until you develop it in your testimony. When you were talking about discriminatory practices toward you from a pharmaceutical house or a manufacturer, I want to just get clearly in mind that you are just as concerned about discriminatory price fixing or price practice as it relates within your profession toward the general customer. Is it not true you are just as concerned with that? Dr. AFPPLE. We are certainly concerned with that, Senator. Senator HATFIELD. And you are utilizing yçur office and your as- sociation to correct that problem toward other people as you. feel should be corrected toward you. Is that correct? Dr. APPLE. That is exactly our position. Mr.. STEEVES. Correct. Senator NELSON. Go ahead, Doctor. Dr. APPLE.. One of the difficulties we have had, and continue to have, is how these various calculations balance out or fail to balance out. For example, testimony before this, subcommittee from the repre- sentativ~s of a particular firm shows that 5-milligram prednisone tab- lets 9an be produced for about $0.50.. per hundred. The break-even point for this major, research-oriented manufacturer was estimated by it t~ be $1.36. Add to this 25 percent for profit and 10 percent for research costs and the accumulated total is about $1.84. Yet the price to the pharmacist for,.the past decade has been nearly $15. Are we to believe that a quality product canndt be produced and marketed below this price by any other manufacturer? We have not taken the position that there are any "unwarranted profits" in the drug indus&y. Our profession has not criticized th~ profit kvels of the industry as being excessive. In fact, we have taken no position on this subject to date, We have assumed that the profit level was adequate and proper-though certainly much greater than community pharmacists enjoy. We want. the pharmaceutical industry to be profitable. rrhe material issues are whether the prices are justifiable and whether the marketing policies that produce these profitsare in the public interest. It may be that ~he price of drugs could be.reduóed and marketing p~actices could be changed without altering the o~erall profit level of the industry. Mr. Chairman, we favor and support the patent system which has contributed so much to the progress of our country and the welfare of its citizens. We do not distinguish here `between patents for drugs and other discoveries. We firmly beli~eve that discovery and invention should be rewarded handsomely. to' encourage continued development and progress. We feel certain that the American contributions to pharma- ceutical and medical science would not have been so rapid and im- portant without the patent system. Senator NEr~soN. May I interrupt just a minute to go back to page 4? You refer to prednisone priced at $1.84 by a calculation you used which begins with the manufacturer's estimated costs of $1.38. With a 25-percent profit, and 10 percent for research costs, the cumulative total is $1.84. Are you familiar with the Medical Letter that came out some several weeks ago on the drug prednisone? PAGENO="0141" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1285 Dr. APPLE. I am, sir, in geriei~al, with its contents; yes. Senator NELSON. In the Medical Letter, which I have before me, they discussed the results of tests run on 22 prednisone products plus the opinions of their consultants with respect to the drug. They also listed price differentials for this drug that ranged from. $0.59 all the way up to $17.90. I think your $16 is probably the latest revised price; is that what you are using? Dr.APPLE. No; I said, "has been nearly $18." Senator NELSON. In the Red Book the highest price has been listed at $17.90 for 100 `tablets. Dr. APPLE. That is right. Senator NELSON. But the price of that drug goes all the way down to $0.59 a hundred, and the price charged by Merck, a research-oriented corporation, is $2.20 a hundred. So the Medical Letter shows that the 22 prednisones they tested vary in price from $0.59 a hundred to $17.90 a hundred, and they `assert that all these products are of equivalent therapeutic value. Do you have any explanation for this, astonishing difference in price? If the `argument is that those who are charging $0.59, and $0.75, and $0.93, and $0.85, and $OM1 a hundr~d are not research oriented, the fact of the matter is `that Merck, for example, is research oriented and they charge $2.20 a hundred. And Upjohn is research oriented and they charge $2.25 a hundred. Do you have any explanation of how it is possible for the $17.90 tablets to be `sold in the retail market when there is available a brand name, even skipping the `much cheaper ones, at one-eighth the cost from Upjohn, for example, and from Merck? How is it possible in a competitive situation that `although `all these drugs `are of equivalent value therapeutically, the one selling to the pharmacist for $17.90 i's obviou'sly `being used the most-as a matter of fact `that company has a third of market in the world on Meticorten. How do you explain that at the retail level Merck isn't the one that just takes over th'e whole market, to take `a trade-name company, or any other trade-n'ame company selling at much lower prices? This w'ouldn't happen if we were talking a'bout `automobiles; it wouldn't happen if it were clothes or shoe's. People look at `the price differential in such products, it seems to me. How do you explain the fact that in the retail drug market `the $17.90 product keeps selling?' Dr. APPLE. Mr. Chairman, if the physician prescribes the $17.90' drug, obviously, the pharmacist is going to have no choice but to dis- pense it,so I think you are going to have to look for your answer to the prescribing habits of the physician rather than the dispensing habits of the pharmacist. But I might `add that at our house-of-delegates meeting last April our committee on legislation recommended the following to the house, which was adopted: The Committee is cognizant of the wide price discrepancies charged by some individual manufacturers for their own products where it can be assumed there is no difference in either quality' or effiç~acy. The Committee recommends that the Association, if invited to testify at these hearings, no't presume that it has the facts and information to ezplain these wide price differences. This is data that the individual manufacturers will have to provide themselves. PAGENO="0142" 1286 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY I think our house-of-delegates took a very wise position. We don't have the facts that account for this difference We can explain to the committee that the mechanism is obviously the use of the brand name, which creates a captive situation Senator NELSON. But you see this gets right to the very heart of the argument made by the manufacturers, in which they claim that the doctor can only rely upon a distinguished, reputable, established trade-name company. Therefore, the doctor doesn't dare to ga~mble and shouldn't gamble with his patients' health by prescribing a predrnsone made by Wolins Pharmacal that costs $0 59 a hundred, or Zenith at $0.75 a hundred, or Sherry Pharmacal, or U.S. Vitamin Pharmacal at $2, or any of the rest of them. Here we have a case that goes right to the heart of their argument. There is available from a distinguished trade-name company, Merck, a prednisone product at $2.20. This is not a generic company and they do conduct search and, like the rest of these companies, they are a reputable firm. You also have Upjohn's product available at $2.25. And yet in the marketplace, Meticorten, at a cost of $17.90 to the pharmacist, is selling very well. Why do the doctors prescribe it? You know, most people would be pretty outraged to have a copy of the Medical Letter, which every doctor in this country says is a very distinguished scientific publication, and which industry repre sentatives who testified here called a very reliable publication and then have their physicians prescribe Meticorten at $17.90 plus the mark-up, when right there in the marketplace-taking the industry's argument on their own grounds that you should stick to the research- oriented trade-name companie&-another distinguished company is selling the drug at one-eighth the cost. Now, what is your explanation for how this can happen? Dr APPLE Mr Chairman, 1 think we said here, "are we to believe that a quality product cannot be produced and marketed below this price?" We don't believe it, as a matter of fact, and I think there is a trend going on, as Senator Hatfield indicated, where pharmacists are now starting to point to physicians and say, you have one product by Upjohn and one product by Merck, Sharp and Dohme at a fraction of the price and there is no~-they don't get into the quality argument, generic brand name argument, because I would say that basically any physician in the United States would accept Upjohn's reputation or Merck, Sharp & Dohme's reputation, as well as they would Scher- ing's reputation So there are no question marks there It boils down exactly to price We don't have the latest market figures but certainly the industry can provide them It would seem to me that either Upjohn or Merck, Sharp & Dohme could move ahead in this particular market by just telling the medical profession that their product is available at $2.20 or $2.25. Pharmacists tell me, our president-elect behind here told me just the other day, that he no longer stocks Meticorten because physicians are prescribing the other products after he discussed comparative costs with them Senator NELSON What does he do when the prescription which comes in is for Meticorten, for example ~ Mr EGGLESTON Of course, I am a community pharmacist in a com- munity of 6,500 people. PAGENO="0143" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1287 Senator NELsoN. Would you identify yourself? Mr. EGGLESTON. My name is Max Eggleston. I am a community pharmacist from Waverly, Iowa, and president-elect of the American Pharmaceutical Association. In a community of 6,500 people it is a little easier to talk to physicians. But in the case of prednisone, when the price differential and the quality from a good manufacturer be- came available as the result of the expiration of patents, we let our physicians know that prednisone was available from a research- oriented pharmaceutical house and we were going to provide those if so desired. As a result we get no prescriptions for Meticorten and, as a matter of fact, I would say we never get them. Senator NELSON. I can only say about that that the ordinary, hard- pressed little consumer having trouble meeting the grocery bill and paying the taxes ought to be shocked out of his shoes, and would be, if he knew that he is paying $17.90 plus a markup for a drug when right there in the marketflace there is an equivalent item, with scien- tific evidence to support its therapeutic value, at one-eighth the price, and one-tenth, and one-twentieth the price, as a matter of fact at $0.59. I don't care what price anybody charges, but what bothers me about this is that the public doesn't have the facts or have the opportunit to pay $0.59 and is reaching down into his piggy bank to come up wit $17.90 plus a markup. This is a shocking business. I don't know of any other area in the marketplace, unless there is a monopoly, where competing items are available, and where this kind of disparity would last 1 day. It wbuldn't last a day in this case, either, if the consumer knew the whole story. Dr. ArPI~F~. Later on here, Mr. Chairman, we have explained some of the actions that we think pharmacists can take to help the public. Senator HATFIELD. Mr. Chairman, and Dr. Apple, I quite agree with what our chairman said in this matter of the problem of the consumer in not having this information. And I appreciate what you said about the pharmacists informing the doctors about these price differentials, and even in larger communities than 6,500. I hope this can become a more general practice. Let me ask you, is this not also the case, as it involves a multimillion- dollar business today known as vitamins that are not on the pre- scription requirement list, on which there are brand-name vitamins in a drugstore, where the average consumer goes, which are selling for a great deal higher price than, say, nonbrand names? And doesn't the pharmacist here have also a role to play in helping counsel in terms of what is equivalent and within the variation of price? I have read articles, as I am sure you have read articles, about the vitamin industry today and what it does in terms of moneymaking, economic growth, and so forth, but isn't this something your associa- tion is also desperately involved in and concerned about as it relates to the consumer? Mr. STFEvLS. What you say is true in terms of, if you will, the private label versus the national brand, I guess, would be the best way to describe it. And I am sure you are also aware of the controversy over the rationale of daily supplementation of vitamins, the scientific con-, troversy that is going on in this country in this area. We have to get the scientific desirability of supplementing and who gets supplemented set- tled as well. In other words, some people, no matter what the cost of PAGENO="0144" 1288 COMPETITIVE PROBLEMS IN THE DRuG INDUSTRY vitamins would be paying too much for something they don't need. We have to identify where vitamins can be used properly, and then, of course, you come to your question on price. We would hope that we could resolve the first question as to the need for supplementation and the proper use of supplementation by vita- mins, and then I think we would be in a position to deal with the second question of price. Senator HATFIELD. But at the present time there is a distinct problem here in this price field of a variation, a wide variation, of vitamins available to the consumer at the drugstore. Mr. STEEVES. That is correct. Senator HATFIELD. And pharmacists are in a role of prescribing, if you can say it in a broad sense, because they are counseling the cus- tomers. The customer says, "Well, Mr. Brown, which one of these is the best vitamin ?" Well, now, he can help that customer by selecting an equivalency that is less costly or he can push the brand name and make mere in his markup, and so forth. This is a problem. Dr. APPLE. Well, Mr. Chairman, arid Senator Hatfield, I would have to answer that there may have been a time, a decade or so ago, when the pharmacist could have participated in this kind of educational activity for the consumer, with. the consumer, but in the case of vita- mins, that day is gone because most vitamins are now being sold in other installations, in grocery stores, supermarkets, vending machines, and you name it. One of the largest sales promotions for vitamins is by the mail-order distributors. Senator HATFIELD. But there are a goodly number of us who are still going to drugstores to buy our medicines and our vitamins and prescriptions. Dr. APPLE. We are delighted to hear that, Senator. Senator HATFIELD, Are you engaged, though, in an educational pro- gram within your profession? Dr. APPLE. Yes. We have a program called a health education service in which we actually work with all voluntary health agencies and the agencies of the Federal Government accumulating literature for consumer education. These racks, containing educational pamphlets on many subjects, are being, and have been, placed in pharmacies for a number of years. We also have, as I have indicated later in our testimony, prepared educational material for the pharmacist on nonprescription drugs. Our first "Handbook of Non-Prescription Drugs" does not cover~ the subject of vitamins. I think I would agree with the Senator that our profession has a public responsibility in this area. Senator HATFIELD. And we are shocked at prednisone today, as an example you cite here. But I think we could be shocked, also, at some of the price differentials within the vitamin field and the kind of rela- tionship of seller to customer as it relates in that field as, by the analogy we are now drawing, of the relationship of prescriber to patient. I am just as concerned that we move in every way possible to help protect the consumer, and that. we raise these questions and these examples which I think are properly raised by you this morning. PAGENO="0145" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 128~ But, also, I thi~ik we ought to `be making certain that your asso- ciation is doing everything it can to have completely clean hands on this whole problem of the consumer and his well being. Mr. GROSSMAN. Dr. Apple, may I ask you a question, too, in the same light? In other words, following Senator Hatfield's line of ~uestIoning, why, in other words, ~are you any better than a doctor who prescribes a brand-name drug, when I can go into your drugstore and the phar- macist puts out in front of me a brand-name vitamin, what is, the difference? In other words, the industry- Dr. APPLE. I think you have to draw a basic distinction between prescription drugs in which the consumer does not have a say-and I have indicated that further on iii our testimony-and other consumer goods, such as vitamins, which are legally available without a third party's order and the consumer is free to choose. The same applica- tion can be made to' tires as well as to Vitamins. The consumer needs more information to be an intelligent purchas- ing agent for himself. He needs the best advice he' can ~`et. But in the case of prescription drugs the consumer is not in this picture. Mr. GROSSMAN. I just wonder who can better provide him with that information than the pharmacist when he comes in. I frankly don't see the distinction. Mr. STEEVTES. This is true,. that `the pharmacist can provide him counsel, except it is the patient in this particular case that makes the final decision. Also, you have to recognize that some of the same prob- lems are involved in the Vitamin field that are involved in the area of prescription drugs the subcommittee is investigating. Some pharmacists believe, and I don't think this has been investi- gated publicly, that the `brand-name vitamin, even though it may sell at two or three times the price or at double the price, or whatever the premium may be, is actually `the best thing for the patient. That the other vitamin may be subpotent or poorer quality-some of the same issues you are facing with prescription drugs. Perhaps resolution of the issue as to prescription drugs on this therapeutic equivalence will be of some help to the pharmacist in the- Mr. GROSSMAN. I want to make it clear I am not `intending to defend anyone, but I am wondering, you say the industry should take the lead, and I see the sathe point here so far as you are concerned. Dr. APPLE. I am happy to answer the question now. One of my staff just told me that a vitamin chapter will be published in the February issue of our journal. The delay was in waiting for clarification of the Food and Drug Administration on proposed regulations. Mr. GROSSMAN. Thank you. Senator HATFIELD. Thank you, Mr. `Chairman. Senator NELSON. Just so the record is clear on this: A few moments ago Senator Hatfield referred to the question of `the consumer not having enough information. I am sure he agrees with me that in order to insure that nobody will be misled, it is really the doctor and the' pharmacist who need the information. So far as I am concerned, and I~ am sure the committee will agree, the discretion to make the decision- about prescribing drugs of, a brand 81-280-68--pt. 4-1O PAGENO="0146" 1290 COMPETITIVE PROBLEMS IN THE DRuG INDUSTRY company is in the hands of the physician, and unless he is operating under a formulary of some kind or another, which is a very good sys- tem, he is frequently working with inadequate information So it is my position that what we are trying to do mostly is to be sure that the doctor gets adequate information about drugs I think if he had the kind of information that is found in the Medical Letter he would be prescribing one of the cheaper brands, of prednisone, in this case, as is recommended by the Medical Letter itself. So what we are trying to do is not interfere with the physician's dis- cretion, but to see to it that he gets enough information so that he can exercise wisely the discretion that he has. Go ahead. Dr. APPLE. There has been much discussion about patents for "mo- lecular manipulations." This form of research sometimes leads to new discoveries of considerable value. To the extent that potential patent- ability for "molecular manipulations" leads to new compounds and therapeutic entities, it serves a useful purpose for society. We do, however, believe that the patent system and not the trade- mark statute provides the incentive for research and innovation in the pharmaceutical world It is the patent system which provides a modicum of protection for risk capital, for investment in product and market development, and for investment in the education of the prescribing and dispensing practitioners. In our view, there is nothing wrong with this system and its rewards. A patent on a drug product marketed under its generic name pro- vides as much protection, revenue, and benefit as does the same prod uct marketed under a brand name Briefly stated, the nomenclature under which a drug product is distributed has no effect on its ther- apeutic value or safety for the patient The patentee can set a price on his product, however named, to return more than his investment in research, development, production, and distribution. These basic facts have not been sufficiently emphasized in the current discussion. Also overlooked is the fact that the patentee of a drug is the sole source of that drug unless he, voluntarily, licenses someone else to enter the market. `Where a licensee is also marketing the same product, we would expect that the licensee's price would be much less because of the absence of research, development, and other costs which justify the patentee's price. `When such a situation exists, we would expect pharmacists to act as the public's purchasing agents and obtain the drugs as economically as possible. Mr GORDON You mean as economically as possible consistent with quality; isn't that correct? Dr. APPLE. Yes; we certainly do. Quality is certainly a factor. We would have to take into consideration whether the drug was a post 1962 drug, whether it had an NDA, whether safety and efficacy had been approved by FDA, whether it was a certified drug, but we are certainly not talking about the cheapest drug, Mr Chairman In testimony before the Senate Committee on Finance, during Sep tember, we reported that the "brand-name era" in pharmaceuticals is coming to an end. We were merely reporting an observation about prescription drugs as we and others have seen it Senator NELSON. What do you mean, the brand-name era coming to an end? PAGENO="0147" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1291 Dr. APPLE. I think I explained it, sir. Certainly the public interest in the quality and cost of drugs has been effectively rekindled since your subcomrnitte initiated its hearings several months ago. In addi- tion to focusing attention on specific issues, these hearings have stimu- lated examination of policies and positions by most of the parties involved. The unrest of the public, organized labor, the aged and other groups in our sQciety, as well as the Government, reflects their concern about the cost of drugs and the lar~e price differentials to various buyers, between "brands" and "generics" and among various "brands" and "generics." This restiveness originally spared the physi- cian and the pharmacist, but it now has taken hold among all of the health practitioners. The interest of the American Medical Association in the cost of drugs is evidenced by its own suj~veys conducted earlier this year in Chicago. Mr. Chairman, you have very timely and cogently exposed these surveys for what they are, but the very fact, for whatever reason, that the National Professional Society of Physicians chose to involve itself directly in drug costs to patients is conclusive evidence of the growing public impatience. Senator NELSON. As you are aware, some weeks ago, the Peoples Drug chain and the Gray's Drug chain representing over 400 retail outlets announced that they were going to stock a complete line of generic drugs from reliable manufacturers. Is this the kind of thing you are referring to when you say that the brand-name era in phar- maceuticals is coming to an end? Dr. APPLE. It certainly is, Mr. Chairman. One of the questions that the pharmacist has had over the past decade is, Where do I get a quality generic? He always has been in doubt about the use of the drug, and we see evidence now where many manufacturers have come forward and offered the pharmacist a line of generics certainly he can feel confident about. Mr. Chairman, you mentioned one of them just now, and I think you would be interested in seeing what we are talking about. This is the line of generics offered by Alliance, and I don't mean to imply that there aren't others that are available by equally competent manufacturers. Senator N1~a~soN. How broad a spectrum of different drugs do they offer? Dr. APPLE. These are the drugs that they are currently offering. Alliance is a group of wholesalers and, apparently, the wholesalers must feel that the pharmacist needs such drugs or they wouldn't go to the extent of arranging to pool their interests to have one of the pharmaceutical manufacturers in this country who is well known, produce this line for them. Now, historically speaking, of course, there have been companies that have made generic products to specifications of other manufac- turers, or other agencies interested in purchasing large quantities of drugs. Many of them cater directly only to large institutional pur- chasers. They aren't interested in putting up a batch of 50 bottles or 100 bottles of a hundred tablets. The mechanism, of course, is now available through the change that has taken place in the marketplace and this is one of the reasons why we think the brand-name era is coming to an end. Articles have been printed, and we have a number of them here we would be glad to submit- PAGENO="0148" 1292 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Senator NELSON. They are articles on what, Doctor? Dr. APPLE. The increasing use of generics all over the country. Senator NIrLS0N. I would like to have you submit them for the com- mittee files and if they seem useful for the record we will have them printed in the record.2 It is your view, then, that developments like that initiated by Peoples & Grays and this one here indicate a growing demand for reliable quality generics and the beginnings of an expanded program of stocking generic drugs by the retail pharmacist? Dr. APPLE. Generic in itself has always had the connotation of being a bad word, an evil term, and I think we finally have come to an edu- cational point where we recognize that what you call a drug is no criterion of its q~uality. The label, the nomenclature, goes on last. The quality is built in first, and for this reason, I think prescribers and others, pharmacists certainly, are taking a keener interest in the use of generic drugs. Senator NELsoN. Well, it is true, is it not, that a number of the most distinguished brand-name manufacturers also are manufacturing gen- eric drugs, is that not correct? Dr. Appu~. Yes, it is. Mr. GORDON. They are really not generic drugs. They are regular drugs under a generic name.. We are really talking about names rather than drugs, aren't we?. Dr. APPLE. I would agree with you, Mr. Gordon, that there isn't such a thing as a generic drug. It is the use of, we prefer to-fl--- Mr. GoiwoN. Why don't we call it official names rather than generic names? Dr. APPLE. Official name, scientific name, established name is the nomenclature system we go by. Senator NELSON. Go ahead. Dr. APPLE. Because of the interest of this subcommittee and other~ congressional bodies, the public, the professions and the government at all levels are taking a thorough look at drug costs and expenditures. The day is not far away, as we see it, when the prices for similar dosage forms of drugs with identical therapeutic ingredients and comparable therapeutic effectiveness will be narrowed to insignificance. Mr. GORDON. How do you expect to get this without legislation? Dr. APPLE. Well, I have said the tinanswered question is whether~ this result will be achieved without legislation. We see it happening through the mechanism of a hospital pharmacy and therapeutics committee-first, the general deemphasis on the brand name, the increasing emphasis on established nomenclature, the hospital formu- lary system being adopted in a general community environment as a community formulary system which we comment on later in our~ testimony, the comparative knowledge about manufacturers' prices, both among physicians and pharmacists. Certainly the commentary of the General Accounting Office, the implementation of title XIX, the legislation offered by Senator Long and Senator Montoya, the~ hearings by Mr. Dingell and the hearings of this subcommittee are all factors that are going to, as we see it, produce some changes. 2 Retained in committee files. PAGENO="0149" `(COMPETI'~IVE PROBLEMS IN THE DRUG INDUSTRY 1293 Perhaps the hearings of this subcommitte~ and others of the 90th Congress will appear in historical perspective as the' major social pressure of this transitional period, Certainly, the transition would `be much slOwer ~without this congressional prodding and the support of the profession `Of pharmacy. In our statement to the `Senate Committee on' Finance, we also `reported that pharmacists have no regrets~ over the demise of the "brand-name era" for prescription drugs. We believe that we ade- quately reflected the attitude' of the' practitiOners of our profession. The "brand name era" has been characterizedby large price differ- `entials for identical products sold to governm~nt, hospitals, and other preferred buyers; heavy promotional costs; excessive sampling; ~pecia1 prices to dispensing physicians to gain ceptance for a particular brand; free goods to pharmacists `with large volumes; and price pre- miums for what are essentially identical, drugs. `The testimony presented on predni~one and reserpine before the subcommittee forms cases in point. The manufacturers could not;affirm, scientifically, that any O~ie of th~ir particular btands was in' any thera- peutic sense, superior to any of the others~ yet community pharmacists `are forced to purchase some at substantial price premiums. We ~cannot believe that any enlightened member~ of our profession would urge continuance of a system that spawns these practices. We are confident that ~ of the leaders in the.pl~iarmaceut'ical industry are recognizing ,the basic irEet~uities which both patients and phar- `macists have had to `ei~dure, Even `if, it w~r~ in our self-interest, pharmacists cøuldn't restore the "brand, r~aInc percentage market" era. We would be at a' `loss as to how t& begin the first step in turning `the clock backward. ` ` ` ` ` There are several benefits which will accrue to the public and t~ our `profession if prescribing by'scientific nomenclature bec~m~s the rule by choice rathe'r than the exceptiOn by necessity. ` . ~ Mr. GORDON. The formei~ president of the: Pharmaceutical' Mann- `~facturers Association Ønce stated that, and I quote, `~Qne; of the great- est evils o'f the use of protected names lies in thef confusion they create."~ , Do you agree with hWi? ``*` ` `~ Dr. Appt~. I would certainly, agree ;wjth that statement. Mr. GolmON. That ~tas, as you know, Dr. Austin Smith. Dr. A~rLE. If I recall correctly, though,. I think he said that when `he was with the Council on' Drugs "of the American Medical Asso- ciation. ` ` ` , ` Mr. GoiwoN. That is correct. ` ` Senator NELsoi~. He would stand by it all right after he became presiden't of the manufacturers association, don't you think?. Dr. APPLE. Leading medical practitioners and educators who have testified before congressional committees have pointed out the manifold `benefits to medh~al care through the emphasis on scientific nomen- clature in prescribing medication for patients. From the viewpoint of `the pharmacist, all of his professional education woulcibe better util- ized for the benefit of' patients if nonproprietary nomenclature was `employed by manufacturers as well as prescribers. ` The pharmacist is the member of the health team who is the specialist in drug therapy. Today, a pharmacist studies drugs a minimum of 5 PAGENO="0150" 1294 COMPETITIVE PROBLEMS IN TIlE DRUG INDUSTRY or 6 years at an accredited college of pharmacy, and spends a year of internship dispensing drugs This knowledge of drugs is more fully and effectively utilized when the pharmacist has a greater role in the selection of the drug product to be dispensed than when that decision is preempted by the mechanism of a brand name. The pharmacist can also exert a greater influence and effect as the patient's purchasing agent when he is given a choice in selecting the particular product to be dispensed. Senator NELSON. What role, precisely, do you think a pharmacist should play, and does your concept of this involve the question of the State antisubstitution legislation that has been passed which permits the pharmacist to exercise his discretion ifa generic name is prescribed but takes away all of his discretion if a brand name is prescribed ~ Dr. APPLE. Mr. Chairman, I will come to the latter part of your question in a moment, but to answer the first part of your question, some years ago I gave a speech and outlined a situation where I envi- sioned, if you will, the future of pharmacy in relationship to medicine being where the physician would make the diagnosis, would send his chart down to the pharmacist who would then confer with the physi- cian and recommend to him the therapy to be used. I think we will become that sophisticated in the role that we play in medical care in the future. Now, in the last 5 years, the profession's educational program has shifted in that direction. We already have at the University of Wis- consin, at the University of Cahforrna, at Ohio State University, where pharmacy students are now being brought to the bedside, as well as practicing pharmacists employed in the hospital, as members of the staff making rounds with physicians, discussing the therapy, the regi men to be used, and utilizing their scientific education, if you will. Senator NELSON Isn't it correct that in a good hospital practice or in a group practice where there are pharmacists present they are in continual consultation both as to the establishment of the formulary, changes in the formulary, and the physician's day to day prescribing ~ Dr APPLE In all the accredited hospitals that have a pharmacy and therapeutics committee the phax macist is generally the secretary o f that committee and plays the role of providing the impetus for its actions to be sure, in the kind of situation you describe, Senatoi But, as a matter of fact, I see a more increasing role than that The more we attend meetings and conferences on the shortage of medical manpower in this country, and the fact that our population ex- plosion indicates that we can't build medical schoo1~ fast enough, we are going to have to find better utilization of these medical skills and here we sit with a profession that is ready to provide an ancillary serv- ice to a much greater degree than it is being utilized We think in the interest of society we ought to move ahead Mr. GORDON. Dr. Apple, you say the pharmacist can act as the patient's purchasing agent in selecting the particular product to be dispensed. At present, the pharmacist generally adds a certain percentage markup to his cOst when dispensing the drug to the patient. That is correct, is it not ~ Dr APPLE The maikup system is still the most prevalent in this country. PAGENO="0151" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1295 Mr. GORDON. Now, it is also correct, I believe, that the higher priced drug gives the pharmacist a larger absolute profit. Dr. Appu~. That is a matter of sheer mathematics. Certainly it does. Mr. GORDON. Given the present system, then, isn't there somewhat of a conflict of interest ~n allowing the pharmacist to select the particular product to be dispensed? In other words, it is to his economic interest to dispense a higher ~priced product than a lower priced product given the present system; isn't that correct? Dr. APPLE. That is theoretically true, but I think I go into that later on here, Mr. Gordon, in which I explain the markup system, the professional-fee system, the contrast in these systems, and I would prefer to go through it at that point if you don't mind, and give you an answer to that question after we have covered that. Mr. GORDON. All right. Senator NELSON. We will at this time recess until 12:30, if that is aliright with everybody here. (Whereupon, at 11:55 a.m., the subcommittee recessed, to reconvene at 12:30 p.m., the same day.) AFTERNOON SESSION Senator NELSON. The hearing will resume. Dr. Apple, I believe you were on page 11; is that correct? Dr. APPLE. Yes, `sir. Senator NELSON. You have referred to research in your statement,, and this `committee has continually had discussions `about trade names and generic names and what they mean, and so forth. If trade names were to be eleminated from use, do you have any judgment or guess about how that might `affect research in the drug field? STATEMENT' OP DR. WILLIAM. S. APPLE ET AL.-Resumed Dr. APPLa. We~l, Mr. Ch~irrn'an, if you mean by the use of some coined name rather than the established name, a proprietary namer which has no scientific relationship to the drug itself, it would seem to us that, certainly, if `a manufacturer is going to invest in research to discover or improve a drug, and receives a process pa'ten't which per-. mits him to have a 17-year limited monopoly, he has complete access to' reimburse himself for that research investment. We can't fathom how the use of proprietary names has anything tx do with research because we have the cases of m'any firms which ck no research but which use proprietary names. And they really don't mean anything. Brand names `assist the advertising and promotion of a drug; they' do not have `anything to do with the effect of the drug, the `scientific production and discovery, and certainly not with the patent system,. which guarantees manufacturers the reward of their investment in research. Our association stan'ds for the patent system 100 percent. We don't see how anybody can be asked to invest millions of dollars and not have an opportunity to reuover his investment. But we don't see where brand names have anything to do with the system of recovering for i'esearch. PAGENO="0152" 1296 COMPETITIVE 1~R0BLEMS IN THE DETIG' INDUSThY Senator NELSON. Then do I understand you to say that it would be preferable if the name used on `a prescription was the established name and if the doctor wished to name the company that he Should do that on his prescription? Dr. APPLE. Prednisone Schering would have given Schering as much protection for its research as any other nomenclature system. Senator NELSON. We have had previous testimony, too~ that en- dorses this position and I am interested to see that you, as a represei~ta- tive of the National Organization of Pharmacists, also endorse this position. I would like to have you just proceed with your statement. I have to leave shortly. The reason you didn't get farther in your statement is that I occupied most of the time in questioning, but in any event I do have a commitment to keep. Senator Hatfield hopes that he will be able to get back aroundl ~3O. If he doesn't, Mr. Gordon and the minoi~ity counsel will listen to the testimony and ask questions. I assume you have no objection to that. Dr. APPLE. Certainly not, Senator. We firmly believe that pharmacists, in community and institutional practice, will contribute an ever-increasing amount of the drug ther- apy information to physicians. This aspect of the practice of the pro- fession of pharmacy will be enhanced when more pr~scription orders are written in nonproprietary terms. The whole emphasis m drug education will be shared more equally by the physician and the pharmacist, as we think it should be. The pharmacist will then have *the opportunity of serving the medical profession as a therapeutic consultant more frequently and effectively than at present. This is logical because the pharmacist is more readily available when the decision for a particular patient is being made than is the manufacturer's representative, and the pharmacist has a knowledge of all available drugs on the market, not just those of a particular firm. * There are economic benefits which also will be realized by wider use of established names. In the case of prescription drugs, the one who orders does not pay and may have little knowledge about the cost of his order or the cost of alternatives. We do not criticize com- pany salesmen for not presenting these alternatives to the physician. We do not criticize physicians for not having an independent knowl- edge of comparative drug costs. After all, this is the pharmacist's area of expertise and we think society will be better off when the physician makes better use of the pharmacist's knowledge. With any ordinary consumer commodity, the consumer makes the choice on how much a given branded article is worth to him. He can examine the relative merits and costs of alternatives and arrive at his own decisio'n. The Congress has enacted legislation to assist the con- sumer in making some of these decisions more intelligently. Presciption drugs are not ordinary consumer commodities. Our laws do not treat prescriptions as ordinary consumer commodities. With prescription drugs, the consumer cannot weigh the alternatives, so others must do it for him. We fail to see how brand names for prescrip- tion drugs help either the physician or the pharmacist weigh the alternatives. And, we think this important distinction itself suggests PAGENO="0153" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1297 that the public interest is not best served when prescription-drug products are promoted by brand names. Brand names for prescription drugs are a very effective marketing tool for the manufacturer. The use of a brand name on prescription drugs permits the manufacturer to establish that name during the pro- tected patent period and then to extend his market share far beyond the life of the patent. After a minimum of 17 years of prescribing a brand name for a given therapeutic agent, the mere expiration of the legal patent period will not overnight result in a change of prescribing patterns. There is the cost, during the patent period, not only of developing a market for the therapeutic agent itself, hut an additional cost for promoting and establishing the brand name of the drug product. This latter cost little benefits medical care. it does, however, provide a sub- stantial benefit for the manufacturer. Through brand-name dominance in the marketplace, it is possible to perpetuate a price differential even when "generic" or other "brand" products appear on the market after the patent expires. This dominance also permits the manufacturer to practice price discrimination selectively among different purchasers- a fairly common practice. Not only do we have trademarks for various brands of drugs, but we also have trademarks for dosage forms of drugs, such as Pulvules, Spansules, Tabloids, and other designations. One wonders what the result would be under the substitution laws if the established name of the drug were prescribed with a trademarked dosage-form designation and the pharmacist dispended a "generic." Competition in the pharmaceutical industry is concentrated at the prescribed level for the particular brand names on a prescription order. Brand names for prescription drugs effectively eliminate price com- petition in ~ large number of cases, whether or not the drug is patented. While we can accept and support the limited monopoly of the patent system, we cannot support the brand-markup concept for prescription drugs and its attendant consequences. Mr. Chairman, there are subjects which every profession discusses ad infinitum. In pharmacy, one of these subjects is prescription pricing. The current discussion boils down to this: Should pharmacists use the markup system or the professional fee system? In addition to A.PhA, the advocates of the fee system within pharmacy include the American College of Apothecaries and the American Society of Hospital Pharmacists. While not active advo- cates, members of the National Association of Chain Drug Stores favor the fee system. A recent survey of NACD'S members reported in the September 18, 1967, issue of FDC Reports, "The Pink Sheet" revealed that: 52 percent of the members replying to an NACDS questionnaire favored pricing pegged to cost plus a fixed fee, and 28 percent favored cost pins a fiexRde fee.. While we do not think that the Pharmaceutical Manufacturers Asso- ciation or individual companies shonild tell pharmacists what to charge for their dispensing services, publicly and privately most of the. indus- try is actively opposing the professional fee for pharmacists. Spokesmen for the drug firms say they oppose the professional fee because they fear pharmacists will lose interest in brand names if their PAGENO="0154" 1298 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY remuneration is dissociathd from the cost of the drug product dis pensed. It is not difficult to understand why pharmacists who use the markup system are complacent about brand name prescribing. APhA for the past several years has been trying to educate phar- macists on the advantages that the professional fee `system holds for both the patient and the prescriber as well as the pharmacist. We `think the fee system also serves the best interest of the pharmaceutical industry Briefly stated, the cost of the `drug to the pharmacist has absolutely no bearing on the professional functions he performs in dispensing a prescription order. If he applies a 40-percent markup on an $18 drug cost, he must add $12; on a $1.80 drug cost he mu'st add $1.20. The professional service rendered in each case is the same `There `are some pharmacists who `op' ~pose price `discrimination by `drug manufacturers but w'h'o support the inequitable markup system of prescription pricing. The `inherent in'equity `of the markup system is `that patients who require `the more expensive drug products must subsidize patients who require the low cost medications and this results in price `discrimination among patients. `One of the most frequently voiced objections to the professional fee is that it does not take into consideration elementary cost account ing fact'ors. Let's look at this myth. A recently reported cost accounting `study revealed the U.S. average cost `of dispensing a prescription order is $1.69. If w,e add $0.31 average net profit per prescription, we would h'ave $2 as the total which would have to be added to the actual `cost o'f the dru'g product `to recover all of the operating costs and yield an 8 5 percent net profit on the 1966 U.S. average prescription charge `of $3.60. According to the 1966 Lilly Digest, the average number of prescrip `tions dispensed was 19,962 per pharmacy `reported in its study. Again using the $2 figure, the total amount of dollars required to pay for operating expenses and yield an 8 5 percent net profit would be $39,924 Under the markup system, some prescriptions would contribute as little as $0 25 or $0 50, while others might contribute as much as $5 or $10 to yield the $39,924 gross margin. Under the professional fee `system, each prescription would contribute $2-the average fee required to provide professional service in this hypothetical example If one patient requires a drug `which cos'ts `the pharmacist $12, we see no reason why he should be charged $27, while another patient who requires a drug whi'ch costs `the `pharmacist $1.20 should `be charged only $2.70. Under the markup' `system, one patient is overcharged $13 to recover the $0.50 undercharge to 26 patients. Isn't it more equitable for the patient `who needs the $12 drug to pay $14 for his prescripti'on while the 26 pa'tients who need the $1.20 drug each pay $3.20 for their' prescriptions? ` The opponen'ts of the m'arkup system will quickly point ou't that the inventory investment in a $12 drug is $10.80 more than in a $1.20 drug while completely ignoring that the $1.50 markup added to the $1.20 cost of the drug fails to even cover the bare operating expenses The point is that in the end each system will produce the same number of dollars for a specific pharmacy when the professional fee established by that pharmacy is equated to the gross margin `of the average prescrip- tion charge of that pharmacy PAGENO="0155" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1299 A new distraction recently has been interjected in the discussion. Opponents of the professional fee claim it could become a political football. They argue that if the Government reimburses pharmacists on the basis of an average fee, Government might initially establish an equitable fee, but as costs for Government-financed programs in- crease, the Government can be expected to try to force the fee down- ward. They overlook the simple fact that Government can just as easily reduce a percentage markup or the base cost to which the markup is applied. We feel that there is less danger of this happening under the fee method because the cost of providing the pharmaceutical serv- ice in dispensing a prescription can be readily verified and is inde- pendent of the drug acquisition cost. The American Pharmaceutical Association supports and is encourag- ing the use of the professional fee system because we believe that it serves the public interest as well as provides a sound economic base for the services provided by the practitioners of our profession. We have encouraged its use in public assistance and prepayment programs. We have supported its inclusion in legislative proposals before Congress and State legislatures. Some have characterized our efforts as unexplainable and almost reckless type of activity. Without apology or hesitation, we have ex- pressed our opinion in unmistakable terms. We are pleased with the progress we are making. The professional fee method is now part of the reimbursement procedure for pharmaceutical services in many State public assistance programs. It was incorporated in the prepay- ment program for pharmaceutical services recently negotiated by the United Auto Workers. The Government Accounting Office has recom- mended the professional fee as the preferred method for reimburse- merit in Government-financed programs. On a nationwide basis, the professional fee has been used in the CHAMPUS program since Octo- ber 1, 1966. We would like to complete our comments on this subject by quoting the summary of a recent article by Dr. Robert V. Evanson, professor of pharmacy administration, Purdue University: The leaders in pharmacy who say that drugs are not articles of trade in phar- *macy at the practitioner's level are correct. * * * In the pharmacy they are dis- pensed as component parts of a professional service. Therefore, legend drugs should not be classed as consumer goods, nor should they be sold at a markup. If this concept is ever fully accepted by pharmacy's functionaries, and espe- cially its practitioners, a lot of currently sticky problems will eventually be solved. The Pharmaceutical Manufacturers Association will not have to be evasive on price discussions with practitioners, nor will it have to sit in Senate invesitiga- tions trying to double-talk its members' pricing practices to the detriment of pharmacy as a whole. The American Medical Association will not be sounding off about pharmacists' high prices and drug shopping to its physicians' patients. Each physician will be stuck with his own treatment costs to justify to his own patients. Pharmacists Will define their role as professionals and will charge fees commensurate with the services rendered and the lowest cost possible for those services. Finally, when the patient asks the pharmacist, "Why does this prescription cost so much ?", he can answer very simply and truthfully. He can cite the manufac- turer's cost, or be can cite the higher priced drug selected or the total quantity prescribed by the physician. In every instance, `he can tell the patient that he is getting exactly what the physician ordered at the manufacturer's cost price to him, and that all he is paying the pharmacist is a small fee for his professional service. Every element involved is openly and diredtly responsible to the patient for his own part in the cost of drugs, and to me this makes sense in a system now given to buck-passing and laws. PAGENO="0156" 1300 COMPETITIVE PROBLEMS IN THE DRTJG INDUSTRY The American Pharmaceutical Association supports the right of any manufacturer to make and market prescription drugs just as enthusi- astically as we support the right of any pharmacist to practice where he prefers We don't expect the economic system of our country to guarantee either the manufacturers' or our practitioners' financial or professional success. Just a manufacturers claim the right to put as many drugs on the market as they can, so do pharmacists have the right to attempt t& eliminate needless duplication in the inventories they cai ry For ex ample, there are more than 70 sources for prednisone, but it would be inefficient and costly for every pharmacist to have a product from each on hand. Mr GORDON Would it be correct to say that the widespread pre scribing by official names would simplify the inventory problem for the pharmacists ~ Dr APPLB It certainly would, in my opinion Mr. GORDON. Would you explain how. Dr. APPLE. Well, as I have indicated, there are 70 sources of predni- sone, there are endless sources for tetracycline, and many other drugs The pharmacist might, in consultation with the practitioners of medicine, he serves in his particular area, decide to stock two or three or four different ones depending on this consultation, but it would not result in the kind of a situation where whatever is called for he would. have to produce, and, therefore, there is no limitation at the moment on the inventory he might have to carry. Here we are just saying that the forces of the marketplace ought to work in terms of the pharmacist having the right to keep his in- ventory down. If he can convince a group of physicians that they ought to pre- scribe a particular drug manufactured by a particular firm, that ought to be his prerogative, just as much as it is the manufacturer's preroga- tive on the other side of the coin. Commissioner Goddard recently reported that. our drug armamen- tarium currently includes about 7,000 single chemical entities and compounds sold under 21,000 different labels. This, in no small meas- ure, is a blessing for our society, but at the same time it is a serious problem for both the practitioners who prescribe and dispense drugs In some instances we have many firms manufacturing the same thei apeutic agent in the same dosage form We have a number of firms producing slight variations of the basic ingredient and others. producing essentially new products for the same ther'Lpeutic use We fully expect that pharmacists always will carry a represonta tive inventory-an inventory from which prescribers may select an appropriate therapeutic agent of their choice to treat the symptom they diagnose But, we sincerely hope that physicians and pharma cists, working together, can help bring some of the efficiency and econ- omy in the community environment that they have been successful in. implementing in the institutional environment. Rational drug therapy can be achieved with a 1 elatively small number of drugs Evidence of this fact is that a mere 200 drug prod ucts-many representing different brands of the same therapeutic agent and others combinations of two or more ingredients-accounted PAGENO="0157" COMPETITIVE PROBLEMS IN TUE DRUG INDUSTRY 1301 for about 50 percent of the prescription medication dispensed last year. Under current law, the success or failure of a given drug has been entrusted to the marketplace. If the marketplace is to perform this function for society as intended, we must insure that its various forces operate freely and effectively. There is unlimited duplication of brand name pharmaceuticals, and this problem was apparent long `before attention was focused on the generic brand issue. In our opinion, it was this proliferation of different brands' of the same drug which contributed to the enactment of the antisubstitu- tion laws `and our profession helped `and, indeed, led the battle for enactment of these statutes in some instances. To our knowledge- Mr. GROSSMAN. Dr. Apple, I wonder if I might ask just one ques- tion with regard to inventories. In `all that you have presented here, would you not say then that one of the ramifications of what you recommend is that it would cost the pharmacist less because he would have to stock less,, is that true? Dr. APPLE. Well, it would cost him less in terms of dollar invest- ment. But equally important, he might be able to buy in larger quantities, and that `also would help reduce the cost. Mr. GROSSMAN. I wondered if you would care to comment on some- thing that the industry people have talked about. Basically there are some drugs that are very seldom used, `and that they are forced to produce-not forced, but they produc&-and that I assume that the pharmacies would carry, and yet the cost of these drugs, of course, is ~very high because they are very little used. Mr. GORDON. May I comment on that? Mr. GROSSMAN. Certainly. Mr. GORDON. What puzzles me is why shouldn't those who get these rare drugs pay a price for them, that would cover their cost? For example, I cannot see `any justification for a person in a ghetto who needs tetracycline having to pay a higher price for tetracycline ~because a wealthier person might need `a rarer drug. Why should he subsidize that wealthier person? Mr. GROSSMAN. What I am getting at is, would you continue ts stock these items? Dr. APPLE. Let me say most of the drugs that you have reference ;to, I believe, are not stocked generally i~y pharmacists; `anyway'. Mr. GROSSMAN. I see. Dr. APPLE. Because they are so rarely used, they are kept in inven- tory by the manufacturer, and as `the manufacturer directly makes them available to the physician at the hospital or at the particular time they are needed. ., ` ` ` ` * ` Mr. GROSSMAN. So ~ou,do not,nori~ially carry them anywy. Dr. APr~E. Thatis right. Mr. GORDON. Flow big a deal is this anyhow? Does it involve so `much money? Does it invjolve ~many. products? flow big is' it? Dir. APPLE. Mr. Gordnn, w~ have no knowledge-we know what some of the drugs~are, but to the extent they are used and all that we have no statistical mforitiation. ` ` ` To our knowledge, no State which did not have an antisubstitution provision in a prior law has enact?d sttch a ~ep~ate statute in the last PAGENO="0158" 1302 COMPETITIVE PROBLEMS IN THE DRIJG INDUSTRY decade. Also, none of the States which has such a statute or regula-- tion has repealed it, and we count 39 at the present time. In our opinion, the substitution concept of today is a far cry from that which we knew prior to 1950. Substitution, historically,~ referred to the substitution of a different therapeutic agent than that prescribed by the physician However, the brand substitution concept is relatively new and is based on the premise that the substitution o± one brand for another brand of the same drug is analogous to supply ing a different therapeutic agent This is largely a thesi' that no one can seem to prove. Mr. G0IW0N. Since the antisubstitution laws, as you say, are anachronistic, would you support their elimination? Dr. APPLE. Mr. Gordon, 2 years ago, at our 1965 meeting, there was considerable discussion about this subject, and our house of dele gates took the position that a special ad hoc committee should be ap pointed to study the entire issue, and such a committee was appointed and has met on several occasions and will continue to meet until it is~ ready to submit a report to our house of delegates Offhand I would say repeal does not seem to appear to be practical and may not even be desirable, but perhaps the antisubstitution laws can be made to serve a useful social purpose I think later on here we indicate that. Mr. GORDON. You are saying, I guess, that they do not serve a useful social purpose at the present time, is that correct ~ Dr APPLE Well, this is a subject matter which our committee has been asked to come up with an opinion to pass on to the house of dele gates, so that the association will have a definite position, and I am sure you can appreciate that this is a policy matter that the house of delegates is going to have to speak on before I can speak for it or against it Mr GORDON Let me ask you this Who or what organizations were responsible for getting these laws on the books? Dr. APPLE. Well, as I indicated,, at times our own profession did through our own associations, but, as I recall the situation, it evolved in this way I think others could, perhaps, give you a better account ing of it The pharmaceutical industry created a special task force, a special organization called the National Pharmaceutical Council, which led the effort for the enactment of these antisubstitution laws Mr GORDON They worked through the State legislatures, I presume, on a State by State basis Dr APPLE Yes, sir Mr GORDON Please continue Dr~ APPLE. We recognize that there are isolated examples of seem- ingly identical drug products which are not therapeutically equal In some of these cases, the evidence is only the report of a single obser vation with no indication as to whether th~ result was due to some idiosyncrasy of the patient or the drug In others, it is clear that the product involved should not have been on the market at all because it failed to meet the legal standards, due to poor manufacturing prac tices And, because our knowledge about drug action in humans is still incomplete, a differential response may be identified but not explained Mr GORDON Dr Apple, you quoted Commissioner Goddard on page 21 of your statement as saying that there `are about 7,000 single PAGENO="0159" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1303 chemical entities and compounds sold on the market which are sold under 21,000 different labels. Can you tell us how many drugs you know about which meet standards set by the TJSP and the National Formulary and are not clinically effective? Dr. APPLE. We have published in our journal, as I recall, one or two isolated experiences of this kind. Mr. GORDON. Well, to your knowledge, has the report of these cases been based on high-quality `scientific studies? Dr. APPLE. I do not think that I could characterize the quality of the study. I do know from the reading I have done, and I `do not claim to have any expertise `in this particular area, that there is a great deal of concern about the quality of some of this type of research and' verification process itself. There was `a book recently published by Dr. Barnard Beard, who is a `sociologist, but also serves on t'he National Research Council,.' that characterized this whole type of research, and pointed `out that the most qualified researchers do not seem to have any appetite for' this routine type of testing. But I would be glad to ask our scientific' division to submit to the committee any information we have on this subject. Mr. GORDON. I think the subcommittee would appreciate that very much. I want to pursue this a little further. Do you `happen to be ac- quainted with the material which currently appears in the Reader's' Digest as a paid advertisement of the Pharmaceutical Manufacturers Association? Dr. APPLE. You mean "Medicines and Your Family~s Health"? Mr. GORDON. I believe that is what it is called. Now, there is a reference to a patient almost losing hi's life because' a pharmacist `dispensed tolbutamide under its official name. What is your reaction to this article? Dr. APPLE. We were `concerned when we first read that article je- cause there was an implication, of course, that the pharmacist-regard- ing the pharmacist's conduct, No. 1. No. 2, we were concerned in finding out the facts, so we proceeded' to go back to the original report in the literature, and we traced the situation back from there. According to the' information we have received from our colleagues in Canada, this particular drug was dis- pensed as a `brand-name drug to a patient a number of times, and then subsequently because of the complaint of the patient about the cost of the drug, the pharmacist was authorized to use a drug under its established name which cost considerably less, and the patient received supplies of this drug in May, June, and July of 1962, and then in September of `1962 he' received another prescription for tolbutamide tablets, and it was this last prescription that the tablets were found to pass through the patient and found in the stool unchanged. At that point, `the drug wa~ .assayed to determine whether or not it' met the standards, and they quickly found out it did not disintegrate after 45 minutes in gastric juice, followed by 63 minu'tes in intestinal juice. The point was the drug did not meet the established standards of the law of Canada and, therefore, should not have been on the market.. PAGENO="0160" 1304 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Here is a case of a drug that did not meet the standards that was out on the market. I want to make it clear I am only saying that particular last batch did not meet the standards, because there is no evidence of the patient having suffered any untoward reaction or having any problem with that same generic drug during the tifree previous periods in which a prescription was dispensed for him. But I think the key point here is that the fact that the drug did not meet the standards established by the law in Canada in the first place. Mr. GORDON. The article does not have that additional essential in- formation, does it? Dr. APPLE. No, the article does not. I have receiVed numerous phone calls from pharmacists, feeling that the article reflects on their integrity and their profession'il acumen and other things, and pharmacists have chosen to write directly to the Pharmaceutical Manufacturers Association about this particular situation. I would say that this is just starting to come in because this, I believe, appears in the November issue of the Reader's Digest. I have an ad- vance copy which was sent `to me `by the Pharmaceutical Manufacturers Association. But, as I understand it, it is in the current issue, the November issue, and we are just' starting now `to get a reaction from pharmacists as to what they think `of it. I might tell you here is a, I just yesterday received a letter, and I think this letter is, perhaps, typical of the few others I have received, as well as the telephone calls I have received. I will be glad to sub- mit this. Mr. GoImoN. Would you read it, please, and submit it for the record also. Dr. APPLE. Well, `the letter is addressed to the Pharmaceutical Manu- `facturers Association, and it says: Your letter to our hospital administrator containing a copy of articles to he published in the November issue of Reader s Digest has been reviewed by myself. ` As I am certain that you are inteiested in the opinions of people concerned with these matters, I do wish to make a few, comments. In brief I feel that articles such as The Anonymous Drug That Hospitalized a Patient is in poor professional taste It pictures a dispensing pharmacist as being a part in a medication error Further it does nothing to instill patient confidence in the physician and pharmacists who c'tre for him since the patient has no idea as to the quality controls of the company' manufacturing his drug.. To' me, the article seems to do little to instill confidence in the patient of American Pharma- ceutical Manufacturers. The increasing frequency of drug recalls from reputable companies is gradually becoming known to the public and may well create doubt in the mind of the patient as to the efficacy of a prescribed drug regardless of Its source This is from the director of pharmacy service at St Luke's Hospital Ill Cleveland, Ohio Mr GORDON Will you submit that for the record, please ~ Dr. APPLE. Yes, sir. (The information referred to follows ) PAGENO="0161" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1305 SAINT LUKE'S HOSPITAL OF THE METEODIST OHURCE, Ulevelaisd, Ohio, November 10, 1961. Air. C. JOSEPH STE~bLEB, President, Pharmaceutical Manufacturers Association, Washington, D.C. DEAR Mn. SPETLFJR: Your letter to our hospital administrator containing a copy of articles to be published in the November issue of Reader's Digest has been reviewed by myself. As I am certain that you are interested in the opinions of people concerned with these matters, I do wish to make a few comments. In brief I feel that articles such as "The Anonymous Drug that Hospitalized a Patient" is in poor professional taste. It pictures a dispensing pharmacist as being a part in a medication error. Further it does nothing to instill patient confidence in the physicians and phamacists who care for him since the patient has no idea as to the quality controls of the company manufacturing his drug. To me, the article seemS to do little to instill confidence in the patient of American Pharmaceutical Manufacturers. The increasing frequency of drug recalls from reputable companies is gradu- ally becoming known to the public and may well create doubt in the mind of the patient as to the efficacy of a prescribed drug regardless of its source. Sincerely yours, FRANZ W. Gzisz, Pharm. D., Director of Pharmacy Service. Mr. GORDON. Please continue. Dr. APPLE. We think that the problem of poor quality drugs is diminishing. Legislation in 1962 substantially strengthened regulatory control of the drug supply of this Nation. Added and improved manu- facturing standards through regulations and new analytical proce- dures and equipment are contributing to improved quality. In recent testimony before the Senate Committee on Finance, the president of the Pharmaceutical Manufacturers Association, representing pro- ducers of over 95 percent of the brand and generic drug products made and sold in this country, stated: We already have, under the Federal Food, Drug and Cosmetic Act, compre- liensive mechanisms for assuring that only safe and effective drug products are on the market. Even if we can prove, with reliable scientific evidence, that a few drugs in final dosage form vary significantly in therapeutic response produced in the patient depending upon which manufacturer made them, this would still not explain why we should not use interchange- ably other drug products with insignificant therapeutic differences. The exceptions, if any, should be kept in perspective; they should not govern our entire prescribing and dispensing decisions. If our drug laws must be strengthened to provide batch certifica- -tion for clinical effectiveness of every drug product before marketing, then we should be prepared to take this step. We do not believe that this drastic step is either necessary or desirable but will reserve judg- ment on this point. This dilemma of duplication of drug products has been solved in hospitals, welfare programs, and elsewhere-such as in some clinic- and physician-owned pharmacies-by establishing formularies. We have not heard evidence that a properly functioning formulary system has had either an adverse effect on patient care, the quality of drug 81-28O---48--pt. 4-11 PAGENO="0162" 1306 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY used or competition or innovation in the pharmaceutical industry In fact, all reports indicate that price competition is much greater-and prices much lower-in the hospital drug market, patient care is im- proved and economic benefits are realized. The formulary system in hospitals has the endorsement of our asso- ciation, the American Society of Hospital Pharmacists, the American Medical Association, and the American Hospital Association. Mr. GORDON. Dr. Apple, what brought all this about? Dr APPLE Well, as I have indicated in my next sentence, these four organizations several years ago sat down and drafted a set of guiding principles for hospital formularies, and a copy is appended for refer- ence. We have also included for the committee's files a copy of the state- ment by the American Society of Hospital Pharmacists which gives you the hospital formulary system, a formulary service, drug coding, and outlines of this entire subject matter. We would like to submit this for the committee files, too. Mr. GORDON. Fine. Dr A~~ri~ Your question was, How did it come about ~ Mr. GORDON. Yes, what brought this about? When was the necessity or desirability of having these formularies determined ~ Dr APPLE I did not understand your question, Mr Gordon You want to know when the formularies started or when this last situation that resulted in these four organizations establishing a policy state- ment occurred? Mr GORDON Yes, that latter one Dr. APPLE. It is the latter one you want to know? Mr. GORDON. Yes. Dr APPLE In 1962 we sent a letter to the American Hospital Associ ation, the American Medical Association, and the American Society of Hospital Pharmacists I could read the letter or insert it for the record. Mr. GORDON. Why don't you submit it for the record. (The letter referred to follows ) AMERIcAN PHARMACEUTICAL AssoCIATIoN, Washi~igton, D.C., December 26, 1962. Dr. EDWIN L. CROSBY, Director, American Hospital Association. Dr. F. J. L. BLASINGAME, Ea,eoutive Vice-President, Amervccsn Medical Association Mr JOSEPH ODDIS Eo~ecutive secretary Amerwan society of Hospital Pharmacists GENTLEMEN: During recent months there has been increasing discussion of the subject of "prior consent" in medical, hospitai and pharmaceutical circles. A careful review of papers presented on the subject and analysis of off the record corn~ents which have been brought to our attention as well as discussions in which our officers and staff have participated have led to our concluding that the professions concerned urgently need to improve their communications on. this subject. Many people consider the subject of "prior consent" as directly and only related to the practice of medicine and pharmacy in hospitals. Others consider it as an appendage of some formulary system. Still others confuse it with the subject of "substitution." The subject has been addressed from both ethical and. legal considerations in the narrowest and broadest sense. PAGENO="0163" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1307 The American Pharmaceutical Association has a particular interest In this subject because "prior consent" is involved in the practice of pharmacy as often, and perhaps more frequently, outside of the hospital environment than Inside. Prescribers have for years given their "prior consent" to pharmacists outside of the hospital environment. From a legalistic viewpoint we have from time to time cautioned the members of our profession about the personal liability that may be involved and the necessity for their securing such "prior consent" in writing rather than verbally. The American Pharmaceutical Association recognizes that the professional privilege and legal responsibility for prescribing medication rests with the medi- cal practitioner. The professional privilege and legal responsibility for dispensing medication rests with the pharmacist. Moreover, in good practice and under long established interprofessional relations, a prescriber may authorize a phar- macist to select the particular article to be dispensed pursuant to the prescriber's order for a therapeutic substance. If a prescriber has the right to give "prior consent" to a pharmacist selecting the particular article to be dispensed, then the pharmacist can dispense the prescription medication in accordance with such "prior consent." By selecting the particular article we have reference to the maker or source of a drug and not to the particular therapeutic substance. Pharmacy has never questioned the right of the prescriber in this matter. Moreover, no federal or state statute prohibits the exercise by a physician, of his right in this matter. On the other hand if the medical profession should decide that it is against their principles of ethics for a physician to exercise his right by giving "prior consent" then the profession of pharmacy would be obliged to review its position. The urgency for all interested parties in arriving at mutual concepts and hopefully an understanding in this matter stems from the fact that many state legislatures will be in session during 1963 and there is more than a possi- bility that certain interested parties may present their solutions to the problem to the legislatures for consideration. We believe this could be most unfortunate and decidedly not in the public interest. Because of the confusion which already exists among some of our respective practitioners there can be little doubt that legislative hearings would be clouded with conflicting testimony and leave the public with the impression that the professions are not competent to resolve questions arising within their own practice. Because of these reasons the American Pharmaceutical Association recom- mends that a conference be arranged for the explicit purpose of reviewing our respective understandings on the subject of "prior consent" and its applica- tion to our respective professional practices. We would like to suggest a date mutually convenient during the last week in January at our headquarters in Washington, D.C. Sincerely, WILLIAM S. APPLE, Ecoecutive Director. Mr. GORDON. I was just wondering what- Dr. APPLE. In the letter we said that during recent months there had been increasing discussion of the "prior consent" in medical, hos- pital, and pharmaceutical services, and a controversy was developing. We suggested that we sit down and try to develop a statement which everybody could subscribe to. In other words, the formulary system was being attacked at that particular time. Mr. GORDON. By whom? Dr. APPLE. Basically `by interests of the pharmaceutical industry, and to some extent by some interests in the medical profession. Mr. GORDON. At what level was all this discussed? Dr. APPLE. When I initiated this request for this conference and followed it up with personal telephone calls to the executives of these organizations, I asked that they either personally serve or be repre- sented by at the highest possible level. We had Dr. Crosby, the director of the American Hospital Association, at some of these meetings; we PAGENO="0164" 1308 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY had his pharmacy staff member and others; Mr. Oddis represented the American Society of Hospital Pharmacists; I represented the Ameri- can Pharmaceutical Association, we had AMA at the executive vice presideiit level, the general counsel, the director of their law division. Mr. GORDON. Who was the general counsel at that time? Dr. APPLE. Mr. Stetler was the person who participated in most of these meetings in 1963. Mr. GORDON. And he was at that time in favor of the formulary system? Dr. APPLE. I cannot answer that. Mr. GoRr~oN. At least he represented the AMA. Dr. APPLE. He represented the AMA, and the statement that was finally worked out during these conferences was subsequently ratified by the boards of the four organizations, including the AMA Board of Trustees. We have a copy of that statement appended to the record here of our testimony. Mr. GORDON. Do I understand correctly that Mr. Stetler now is op- posing the formulary system? Dr. APPLE. I have no knowledge of this. Mr. GORDON. I was just wondering. Dr. APPLE. We think the formulary concept can be extended through communities with the cooperation of the medical and pharmaceutical professions and with the same beneficial effects. For lack of a better title, we refer to this as a community formulary. The antisubstitution laws would not pose any serious impediment and, in fact, would assure effective functioning of the community formulary. The local medical and pharmaceutical societies would establish a pharmacy and therapeutics committee to develop a list of drugs to be utilized. This listing then would be circulated to all physicians and pharmacists in the area. Information included would be the scientific name of the drug and the acceptable suppliers chosen on the basis of the collective experience of the panel, literature reports, comparative product costs, therapy rationale-in much the same manner as is now done in hospitals. When the prescriber wrote his prescription order, he would merely signify that he wished the pharmacist to use the "formulary equiv- alent," or he could prescribe by established name with the direction that a formulary-accepted product be utilized. If the pharmacist dispensed a product other than that listed in the formulary, he would, of course, have violated the aiitisubstitution law, just as if he had used one brand in place of another. Under this system, the physician would know that he was not receiving an "unknown" product of dubious~ quality. Several pharmaceutical groups have indicated an interest in "test- ing" this cOncept in a number of States, and we plan to lend our every assistance to these efforts. We think that effective development of such a system would be consonant with the hallowed principles of medical and pharmaceutical practice and serve the public interest Much has been made of the need for pharmacists to know why two drug products may be different But, if the pharmacist is going to be able to use this knowledge for the benefit of society, he must have the PAGENO="0165" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1309 factual information on how the drug products do in fact differ. Until now, this information has not been available. All accredited hospitals must have pharmacy and therapeutics committees. The purpose of these committees is to constantly improve the quality of drug therapy. A byproduct of their activity is to keep the hospital pharmacy's inventory to the minimum by eliminating needless duplications, not by reducing the useful therapeutic agents available to the prescriber. Another byproduct is purchasing an ac- ceptable quality drug product at the lowest possible cost. We believe that physicians and pharmacists can effectively introduce some of these same benefits for patients outside the hospital by developing a com- munity formulary system. Seven years ago a discussion started on. how more complete and reliable information on prescription drug products could be made available and disseminated to the prescribing and dispensing pro- fessions. In 1960, we flied statements with the Department of Health, Education, and Welfare outlining our interest and making specific suggestions. It was our position then that the increase of information on the package or package insert would not effectively provide the prescriber with the desired information. As we pointed out, the prescriber seldom sees the product or its packaged content. Moreover, we also pointed out that the package insert constitutes an inefficient and ineffective means of promptly communicating current information to pharmacists. As an alternative to the proposals offered by the Food and Drug Ad- ministration at that time, we recommended a nine-point program in- volving the cooperative efforts of FDA, the pharmaceutical industry, and the health professions immediately involved. Copies of our 1960 statements are attached. Since 1960, we have had discussions with FDA and members o~ the pharmaceutical industry on this subject. For example, we have pointed out that when there are supplements to, or modifications in, the package insert, there may be a considerable timelag before the information reaches the physician or the pharmacist. These prac- titioners have no obvious way of knowing if the package insert they have in their possession at a given moment is the most recent one ap- proved by FDA. In 1964, APhA considered publishing a compilation of the latest approved labeling for the 500 most frequently prescribed drugs. We were forced to abandon the project because at that time FDA was unable to provide us with the information we required. Currently, we are participating in the discussions of the National Academy of Sciences/National Research Council on the possible al- ternatives for the current package insert system. Based on our expe- rience the past `1 years we can underscore the growing importance of a better means of communicating specific drug product information to the medical and pharmaceutical professions. This need is not limited to prescription legend drugs. It extends to drug products available and utilized in self-medication. We believe that our association is making I real progress in meeting this need, Three months ago, we published a "Handbook of Nonprescription Drugs"-the first such comprehensive reference in the world. It has PAGENO="0166" 1310 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY been well received by physicians and pharmacists, and before the year ends we will be reprinting it for the third time. APhA is still hopeful that the need for information on prescription. legend drugs can be met promptly through the voluntary, cooperative efforts of the professions concerned and the pharmaceutical industry. We can assure the manufacturers and FDA that any soundly conceived effort will have our assistance. In conclusion, we recognize that the health and life of people today increasingly depend upon drugs For 115 years, the American Phar maceutical Association has supported constructive steps-and ini- tiated several-to improve the Nation's drug supply and, Mr. Gordon, as a matter of fact, just late this month our Academy of Pharmaceu- tical Sciences is sponsoring a program here in Washington, and the entire symposium is devoted to the subject of development of safer and more effective drugs. I would be glad to supply the committee copies of the program and abstracts for its files. Mr GoiwoN Thank you very much We do appreciate that Dr APPLE As I have indicated, we have supported constructive steps and initiated several, to improve the Nation's drug supply and the professional services involved in making drugs available to pa- tients. This will continue to be one of our major objectives. Thank you. (The attachments to Dr Apple's statement follow ) AMERICAN PHARMACEUTICAL AssoCIATION, Washington, D.C., ~September 20, 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. 6985). HEARING CLERK, Department of Health, Education, and WeZf are, Washington, D.C. DEAR Sm: The following statement is submitted In response to the oppor- tunity afforded by the Commissioner of Food & Drugs for interested persons to express their views on the proposed labeling regulations. Realizing that others will comment upon those phases of the proposed regula- tions of immediate interest to them, our remarks will be confined to matters directly affecting the American Pharmaceutical Association, the profession of pharmacy and the efforts of pharmacists to discharge their professional responsi bilities as drug and therapeutic device consultants to prescribers and as com- munity custodians of drugs and such devices We are in complete agreement with the intent of the proposed amendments which are advanced in the interest of providing more complete information rele vant to the professional use of any article bearing a prescription legend or other wise limited to order of particular practitioners. Our Association has repeatedly advocated increased disclosure of product information in order that pharmacists may serve more proficiently in their capacity as consultants to prescribers of all prescription legend articles To meet the demand for reliable information mdi vidual pharmacists have among other things attempted to maintain product reference libraries and to develOp extensive product reference brochure files within pharmacies. At their own expense, in order to be of service to prescribers, some pharmacists have even attempted to publish and distribute product infor- mation gleaned from a variety of reference sources. For the guidance of every practitioner licensed by law to administer preserip~. tion legend articles, complete product information concerning use, dosage, cau- tions, and contraindications should be readily available. For these reasons, we believe in the prmcipie embodied in the proposed regulations that is of dis seminating additional product information. However, we seriously question the practicality of certain aspects of the mechanism proposed for achieving our mutual purpose-the availability of complete product information for prescribers. PAGENO="0167" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1311 SE~CTI0N 1.106(b) (3) The information required by this subsection is designed for communication to, aind use by, practitioners licensed by law to administer prescription legend drugs. However, in the usual course of employing such a drug, the prescriber creates* a prescription which in turn is communicated to the pharmacist. Therefore, the prescriber does not see either the product or its packaged contents. It is the pharmacist who has physical possession of the product, its container or wrapper, and any written, printed, or graphic material accompanying such an article. `Coi~sequently, there is no basis for believing that by increasing the volume of literature included in every prescription drug container, communication of in- formation to prescribers will thereby be facilitated. A pharmacist with numerous packages of a particular drug in stock will have numerous copies of the same literature, which will seldom or never be seen by the prescriber. Moreover, as supplementary information develops, each existing product container and enclosures would be incomplete, inaccurate, or otherwise deficient under the proposed regulations. A realistic appraisal of product expense for initial packaging, shipping, and storage in relation to the degree of product information communicated to pre- scribers which might be achieved by the proposed procedures will reveal the impracticality of this particular mechanism. This significant expense ultimately would have to be passed on to the patient, thereby increasing the cost of his medication, with little hope of achieving the desired purpose of the proposed regulations. Furthermore, the existence of extensive professional information within each product package increases the risk of this information passing into hands of the laity. Obviously, this might easily result in untoward consequences. It must be remembered that the purpose of exempting drugs, subject to the requirements of Section 503(b) (1) of the Act, from Section 502(f) (1) is to preclude the use of dangerous prescription legend drugs except under the direct supervision of a practitioner licensed by law to administer such drugs. As an alternative to the proposals contained in this subsection, we recommend a cooperative arrangement, involving the Food and Drug Administration, the pharmaceutical industry, and the health professions immediately involved, through which the following procedures would be effected: 1. Every manufacturer would be charged with the responsibility of preparing, for each product subject to the regulations, a complete "official brochure" con- taining full professional information. 2. The "official brochure" would be in accordance with the new regulations proposed by the Food and Drug Administration. 3. A non-governmental, non-profit agency approved for that purpose by the Food and Drug Administration, the United States Pharmacopeia Revision Com- mittee, and the Committee on National Formulary would serve as the coordina- tor and distributor of each "official brochure." 4. The "official brochure" design would be uniform in format and conform to specifications developed by the agency referred to in paragraph 3 with the advice of the United States Pharmacopeia Revision Committee and the Committee on National Formulary. 5. All production, publication, and distribution costs for each "official bro- ~hure" would be borne by the respective manufacturer. 6. The agency referred to in paragraph 3 would promptly distribute each "official brochure" to every pharmacy in the United States. 7. Pharmacists would be advised that the availability of these brochures is as essential for the proper information of the medical and pharmacal profes- sions with regard to the drugs involved as is the case with the latest editions of the United States Pharmacopeia and the National Formulary. By state board ruling or by state law the availability of the resulting compilation of "official brochures" could be made a part of the standard prescription equipment of every pharmacy. 8. Additional copies of each "official brochure" would be made available for `distribution to pharmacies so that `any practitioner licensed to `administer the drug described in an "official brochure" could obtain the desired information or a copy of the "official brochure" from a pharmacy as well as from the agency referred to in paragraph 3, or from the manufacturer of the drug. PAGENO="0168" 1312 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 9. It would be expected that accredited institutions engaged in preparing per- sons to practice any of the professions in the health science group would als& be supplied with copies of the "official brochure." A unique feature of this proposal is the added benefit of having the "official brochure" information locally available to the practitioner through every pharmacy although supplies of the drug may not be at hand. Furthermore, the "official brochure" information could thereby be available to the practitioner even before the manufacturer begins the initial marketing and distribution of his product. If, as we trust, our suggestion meets with favor, we will be pleased to coop- erate with the Food and Drug Administration, the United States Pharmacopeia, the National Formulary and the pharmaceutical industry in order to make this essential distribution of information on each product subject to the regulationa effective. SECTION 1.106(b) (4) This proposed regulation would require that fufl information accompany all labeling "that furnishes or purports to furnish information for use or which pre- scribes, recommends, or suggests a dosage" for use. Some modification is needed.. It is our belief that journal advertisements and promotional literature sent directly to professional personnel should be clearly differentiated from "label- ing." Because of inclusiveness usually associated with the term "labeling," we fear that without modification unreasonably long, involved, and extensive ad- vertising copy could be required for otherwise simple advertisements. Under the proposed regulation, serious questions arise about possible signi- ficant curtailment in the degree of advertising in professional and scientific journals. We believe such advertising curtailment will adversely affect the con- tinued publication of professional journals, the principle purpose of which is the dissemination of scientific, technical, and research information irrespective of products advertised. The sale of advertising space in professional journals helps in large measure `to defray the costs' of these essential publications, It is our opinion that the purposes intended by the proposed regulations would be achieved through an arrangement by which all advertisements would contain a precautionary statement referring the reader to the "official brochure" for additional necessary information and indicating its availability from (a) any pharmacy, (b) the. non-governmental, non-profit agency approved for that pur- pose by the Food and Drug Administration, the United States Pharmacopeia Revision Oommittee, and the Committee on National Formulary, or (c) the manufacturer of the drug. By employing the mechanism we have just suggested, the purposes of the proposed regulations would be achieved without placing' unreasonalde burdens upon advertising copy `and interfering with the publication of essential professional journals and the dissemination of scientific information. SECTION 1.106 (C) (3) AND (d) (3) Because our comments, opinions, and suggestions pertaining to these sections parallel those stated in relation to Section 1.106(b) (3), in the interest of con- serving your time, we will not repeat them. SECTION 1.106 (C) (4) AND (d) (4) Because our comments', opinions, and suggesticeis pertaining to these sections parallel those stated in relation to Section 1.106(b) (4), in the interest of con- serving your time, we will not repeat them. The American Pharmaceutical Association, its facilities, and its entire per- sonnel, are ready to assis't the Food and Drug Administration in effecting the objectives we have outlined. We also respectfully request that our Association be given the opportunity to participate in any future hearings which may be held to resolve differences of opinion over the proposed regulations which have beem expressed by interested persons. Sincerely, WILLIAM S. APPLE, Scoretary. PAGENO="0169" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1313 AMERICAN PHARMACEUTICAL AsSoCIATIoN, Washington, D.C., September23, 1960. Ibe notice of proposal to amend labeling requirements (21 CFR 1, 130) dated July 18, 1960; appearing in Federal Register, July 22, 1960 (25 P.R. 6895). HEARING CLERK, Department of Health, Education and Welfare, Washington, D.C. DEAR SIR: The American Pharmaceutical Association desires to file the follow~ ing supplemental statement. Our original statement was filed on September 20, 1960. We have noted that statements filed by other interested parties contain diver~ gent 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 As~ soci'ation i's 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 meet- ingstha~ we have had, and un'til `the State and local organizations coi~- ~cerned have come to a `firm decision `and have had their conferences with `the counterpart medical societies at the respective level's, I. think it would be ~remature to. comment on our discussions. Mr. GROSSMAN. For example, could not t~iese be us~d in certain d~s- ~dvan'taged areas th. 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 ~harma- ~cists in the area of O~O clinics, for example, get tQgether in just this type of a proposition, develo~ a formulary so that `they can meet the ~conomios that `are involved in these OEO clinics, and we have been doing this for some time. This is `already in progress `and being con- sidered in a number of areas. Dr. APPLE. ~Thu 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 O1~O. 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 opportu- nity hingesba~icalIy on two things: One, the opportunity for pharma- cists to buy as ,cheaply~ a'~ the Government buys and other favored PAGENO="0170" 1314 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 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 pharma- ceutical 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 ArPLE 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 V' 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 inpa tients in the hospital obviously does not affect the pharmacist who is serving noninstitutiona:lized 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 hospital2 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-Stuy- vesant, `and similar places like that, soon? Dr. APPLE. I do not think there is a major impediment. I just think it is m'atter `of an educational program. I would `say `that when ph'ar- PAGENO="0171" COMPETITIVE PROBLEMS IN THE. DRUG INDUSTRY 1315 maoists understand this and can sit down and help explain it to physicians-4his is basically what has happened in the hospital envi- ronment-you take the physician who is in the hospital 3 hours a day, accustomed to praoticing~ 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. GoiwoN. 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.) PAGENO="0172" PAGENO="0173" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY THURSDAY, NOVEMBER 16, 1967 U.S. SENATE, IIONOPOLY SuBCOMMITTEE OF THE SELECT CoMMIrrni~ oN SMALL BusINEss, Washington, D.C. The subcommittee met2 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. Gross- man, 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 Busi- ness 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 repre- sentative of the public, has an important responsibility to protect the public interest. The PMA and many others, including doctors, phar- macists, 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 sub- ject 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 As- sociation 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 1317 PAGENO="0174" 1318 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY and criticisms that PMA has, or any member of the PMA has, of the conduct of these hearings, and let the record speak for itself. I am confident that the record will show that we have given every consideration to the industry that it is possible to give, and if there is some consideration I have omitted, I would be glad to hear about it. I publicly invited every single member of the PMA to appear before the committee months ago. They are all free to come and make any statement that they may wish to make before this committee. Of the 136 PMA members, only two thus far have volunteered to come. Three others have come at invitation. I would ask the Pharmaceutical Manufacturers Association what more this chairman can do, to give the members of the industry a chance to be heard so that their case can be fairly presented ~ I now repeat my invitation to every single member company of your association to appear before this committee If all 136 want to appear, we will hear them-if I am still here long enough to hear that many At the end of today's hearings, or next week, or any other time, I will accept from the president of the PMA a list of your members who want to testify. I will make arrangements for them to testify. And then, if you have any legitimate complaints against the conduct of these hearings, I think you should tell us today exactly what those complaints are, so that the committee may consider them. If not, then I think you should not make criticisms elsewhere around the country that you are not willing to make to the committee itself. I think that is fair. * So at some stage, I would like to hear the complaints you have about the hearings and if there is any way I can rectify them, I `will, be- cause I have not offered the medical piofession, or the pharmacolo- gists, or the pharmacists, or any other group, the right to send in every single member, as I have in the past to the Pharmaceutical Manufacturers Association, without any results thus far, except for the volunteering of two companies. The `amount of material that you have presented ~:S quite massive. I am not sure what is the best way to handle it, or whcther with the amount we have it will be possible to get through all of it today. But there are a number o~f matters that I want to take up first. One of them is immediately current, and I would like some discussion of that sometime today. I refer to a PMA advertisement which `appeared in the Reader's Digest this month And I will read-in order to be more precise-my comments on that. An advertisement by the Pharmaceutical Manufacturers Associa- tion in the form of an eight page pullout pamphlet has appeared in the November 1967 issue of the Reader's Digest. The format of the section is designed to look like part of the ordmary editorial content of the magazine. The only indication that this section is paid advertising is the words "Special Advertising Section" which appear in small print on only the first page of the eight-page section. On the next page, the first of four articles which comprise the section begin without any further indication that these articles are, in fact, the advertising matter to which reference has been made. To further con- fuse the reader, ads clearly identifiable as product advertisements have PAGENO="0175" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1319 been interspersed among regular Reader's Digest articles which imme- diately follow the PMA section. Thus, the reader may be led to believe that it is these latter ads which actually make up the "Special Adver- tising Section." At the same time that this ad is being run in the Reader's Digest, reprints of this pamphlet are being circulated to offices of practicing physicians for their waiting rooms and to. various government agen- cies. These reprints, however, differ from the section which appears in the Reader's Digest in one very important respect: The PMA has deleted the words "special advertising section." The result, of course, is that there is absolutely no' indication that this pamphlet is an adver- tisement. Neither the doctor nor the patient who reads this ad while waiting to see his docto'r has any way of knowing that he is reading ad copy which glorifies the members of the very group who paid to have this material written. Further, a note appears opposite the first page of the section which tells the reader that he may o'rder a reprint by writing to "Health," Post Office Box 28111, Washington, D.C. The designation "Health," rather than the actual name of the organization invo'lved, seems to me to give the impression~ that a no'nindustry philanthropic group is spon- sormg the reading matter which follows-not a trade association repre- senting drug manufacturers. I wrote to the U.S. Department of Justice, the Federal Trade Com- mission, and the Foo'd and Drug Administration to call this matter to their attention and to ask for their comments. `The Department o'f Justice subsequently took an interest in this question and in a letter which I received on Monday, Edwin M. Zim- merman, Acting Assistant Attorney General, Anititrust Division, stated that: The omission of the words "Special Advertising Section" might mislead the recipients into believing that material prepared by the Association or its mem- bers for purposes of an `advertisement was initiated `by disinterested authorities, for the purpose of discouraging the sale of generic drugs. Accordingly, this circulation of the reprints may raise problems under Section 5 of the Federal T'rade Commission Act which proscribes unlawful and deceptive practices in commerce. We are conferring with representatives of the Federal Trade Commission to determine what further action should be taken. In a response received by me on Tuesday, Paul Rand Dixon, Ohair- man of the Federal Trade `Commission, informed me that an investi- gation is being undertaken by his staff "to determine whether the practices in question constitute a violation of section 5 of the Federal Trade Commission Act, which prohibits unfair methods of competi- tion and unfair or deceptive acts or practices `in commerce." I have also received an answer from Dr. Herbert L. Ley, Director of the Bureau of Medicine of the Food and Drug Administration. Dr. Ley"s review of the section for content accuracy revealed that parts of the four articles which make up the section contain material which is misleading in its implications .as to the industry's accomplishments and the relative quality of brand name and generic drugs. (The letters referred to follow:) PAGENO="0176" 1320 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY U.S. DEPARTMENT. OF JUSTICE, Washington, D.C., November 15, 1967. Hon. GAYLORD NELSON, Cli,coirnia,n, Monopoly Ssbcomrnittee, U.S. Senate, Washington, D.C. DEAR SENATOR NELSON.: The Attorney General has asked us to reply to your letter dated November 2, 1967, the receipt of which he acknowledged to you by letter dated November 3, 1967. Your letter requested our views as to a special advertising section placed in the Reader's Digest `by the Pharmaceutical Manufacturers Association, reprints of which were thereafter circulated by the Association without disclosing that the reprint was a paid advertisement and not part of the editorial content of that publication. Such an omission `from the reprints might mislead the recipients into believing that material prepared by the Association or its mern~bers for purposes of an advertisement was initiated by disinterested authorities for the purpose of dis- couraging the sale of generic drugs. Accordingly, `this circulation of the reprints piay raise problems un'der Section 5 of the Federal Trade Commission Act which proscribes unlawful and deceptive practices in commerce We are conferring with representatives of the Federal Trade Commission to determine, what further action should `be taken. Sincerely yours, EDWIN M. ZIMMERMAN, Acting Assistant Attorney General, Antitrv~st Division. FEDERAL TRADE COMMIsSION, Washington, D.C., November 1~, 1967. Re file No. 682 3194. Hon. GAYLORD NELSON, Chairman Monopoly Subcomnvittee, Select Committee on Small Business U.S. Senate, Washington, D.C. DEAR MR. CHAIRMAN: In accordance with your request, I have made inquiry as to the status of the consideration being accorded by the Bureau of Deceptive Practices to the matter of the publication of a section in the November, 1967, issue of `The Reader's D'igest, paid for `by the Pharmaceutical Manufacturers Association,' and the dissemination `of a `reprint thereof. I am advised that the `staff i's now engaged in an inquiry seeking to develop sufficient evidence to enable the Commission to determine whether the practices in question constitute a violation of section 5 of the Federal Trade Commission Act, which prohibits unfair methods of competition and unfair or deceptive acts or practices in commerce. You will, I am sure, understand that I cannot at this time offer any comment respecting the legality of the practice, inasmuch as `the `matter will `be before me"for decision when' the pending investigation ha's been concluded. With `best wishes, lam, Sincerely yours, PAUL RAND DIXON, Chairman. DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, FOOD AND DRUG'ADMINISTRATION, Washington, D.C. Hon GAYLORD NELSON Chairman Subcommittee on Monopoly, Select Committee on Small Business US Senate Washington D C DEAR SENATOR NELSON This responds to your request for our comments on the advertisement by the Pharmaceutical Manufacturers Association which appeared in the November, 1967 issue of Reader's Digest. This advertisement is not product oriented in the usual sense. Primarily be- cause the advertisement is not specific as to the name of a drug manufactured, packed or distributed by a named firm, we do not believe that the Federal Food, Drug, and Cosmetic Act provides a clear `basis for proceeding against the ad or its subsequent use as a promotional pamphlet under any provisions of the PAGENO="0177" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1321. Act. Our regulations In point are concerned primarily with advertisements and other promotional material directed to .prescribers~ not to the public. About a year ago, we discussed with the advertising agencies and the phar- maceutical firms some of the problems that would arise if promotional labeling for prescription products, particularly oral contraceptives in that case, should be directed 4o the public. We concluded that such promotions would be acceptable provided that they included appropriate warning information and specified the particulars in a policy statement published in the Federal Register on September 13, 1967. Since that time we have discussed with individual pharmaceutical firms the content of institutional advertisements which offered the possibility of crossing the line to product promotion. Adv~ertisements that are product oriented (which the Reader's Digest article is not) would require a brief summary of indica- tions, side effects, and contraindications and they would have to contain this information in a form that would be understandable to the non-professional audience. The portion of the Reader's Digest reprint titled "What Ever Became of Those Quarantine Signs" has been reviewed for factual accuracy. No direct claim for pharmaceutical company research involvement is made except for whooping couch (pertussis) "vaccine," and in that case It appears that several pharmaceu- tical firms supported extramural basic research on pertussis Immunization in the 130's and 40's. The other "vaccines" were developed from basic research not supported to any significant extent by pharmaceutical firms. Although the function of the pharmaceutical industry in production of "vaccines" for mar- keting is an important credit in their favor, the tone and implications of this article for the general reader go beyond mere credit for manufacturing ability. The facts stated in the article "The Anonymous Drug That Hospitalized a Patient" are in general agreement with those given In Dr. Arnold Carter's letter to the Canadian Medical Association Journal. Attached is a copy of Dr. Arnold Carter's letter to the Journal. The fact that this "generic" brand did not meet the official monograph specifications makes it improper to compare its effective- ness with a product meeting official compendium specifications. It cannot be determined whether only a batch failed in meeting the disintegration specifica- tions or whether the manufacturer produced most of his tablets in this manner. Failures of this type can be checked In the laboratory and action taken. accordingly. The comparable product sold in the United States was Introduced to the market in 1957 and has been subject to United States Pharmaeopeia standards, including disintegration time testing, since 1960. To the best of our knowl- edge no comparable problem has been identified in the American product. The facts in the section entItled "Medicines for the Troubled Mind" could present better historical perspective. By stating that "Dr. Kline reported to the New York Academy of Sciences in 1954 that reserpine had `proved an effec- tive sedative in mental hospitals,'" the unnamed authors of the article totally disregard historical fact. Reserpine was supplied by the Swiss from CIBA to the Psychiatric University Clinic Burgh'oelzli in . Zurjch, Switzerland, where in 1953 it was first used in the treatment of mental illness In the Western world and reported to the medical profession. Similarly the Implication of the para.~ graphs relating to the use of the phenothiazine related compounds Ignores the fact that the earliest useful member of this group, chiorpromazine (Thorazine),. was synthesized In France in 1950 and first used clinically in France in 1952. If we can be of further assistance, please let us knew. Sincerely yours, HERBEBT L. Lny, ,Tr., M.D., Director, BiArea~ otMecUcine. Senator NELSON. There is no question that the entire ad is designed to avoid disclosing that it is, in fact, advertisement paid for by the drug industry. This calculated deception even goes so far as to in- clude a solicitation to the ~e1a~der to write to an organization called Health for reprints of the section. Even on the last page, th~ words, "PubIi~h~cT as a. Public Service by the Pharmaceutical Manufacturers Association," are misleading since advertising is not generally considered to be a public service. 81-280-68--pt. 4-12 PAGENO="0178" 1322 COMPETITIVE PROBLEMS IN TUE DRUG INDUSTRY Clearly, an attempt has been made here to use the wide circulation of the Reader's Digest to convince a large segment of the public that an advertisement written on behalf of the drug industry and paid for by its trade organization is an ordinary unbiased magazine article The implication, of course, is that the PMA is supporting an objec- tive discussion of health problems as a matter of public service, rather than an advertisement calculated to serve the interests of its member firms. I am sure that the PMA was aware of the implications of the ad when they inserted it. I think that as a matter of public interest this ad ought to be discussed here at some stage, because I am of the opinion that a vast majority of the public would not recognize the insert in the Reader's Digest and certainly not the reprint as in fact an advertisement. And. whereas PMA is entitled to advertise. I think the public is entitled to know whether an article is an independent objective research article written by an independent individual or whether it is an advertisement sponsored by a trade association. That is why I have brought this out today. I do not by any means want to preempt all your time-but I shall preempt some of it One other matter I want to raise, which I shall not raise immedi- ately, is the question of your obvious strong feeling that there has been a distinct bias against the industry in the witnesses who have appeared here I would like to take up that question, but I will defer that to a later moment How long is the summary that you have there, Mr. `Stetler? Mr. STETEJER. My summary will take between 15 and 20 minutes. Senator NELSON Well, I have not in the past permitted witnesses to summarize for the very simple reason that I have questions to ask about the full statement as I go along. What happens is that if a summary is given and the statement is merely printed in full, I have to go back to the statement and go through it to ask questions which occurred to me in my reading of the material. Now, I am willing to try that, if you prefer. I am not sure it will shorten the time A couple of weeks ago one of the witnesses wanted to summarize, and I declined because what happens is that we print your summary, then we print the whole testimony Then after it is all printed we start asking questions about the full text, which appears somewhere else in the record So the reader has to jump back and forth from the questions to the testimony itself, whereas the only way it is really understandable is if as your presented statement appears in the record, the questions are raised and answered at the approi~riate place. Don t you suppose that you could start reading, and at various places where you elaborate, just suggest that you would like to sum- marize in a sentence or two, and if I do not have any questions, we can skip a page here and there. Would that be satisfactory? Mr STETLER Senator, I will be delighted to do it any way you want it done I can do it either way Senator NELSON. Let us try it that way. I think it will make a better record. PAGENO="0179" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1323 Mr. STETLER. Before I begin the statement, I would like to ask this question. You have raised two important points. Do you want me to comment on those now, or did you say you would prefer to wait until later? Senator NELSON. Well, I am happy to have you comment on it right now, if you like. Mr. STETLER. I think it might be better. STATEMENT OP C. JOSEPH STETLER, PRESIDENT, PHARMACEUTI- CAL MANUFACTURERS ASSOCIATION, WASHINGTON, D.C.; AC'CO~- PANIED BY LLOYD N. CUTLER, SPECIAL LEGAL COUNSEL; DR. A. E. SLESSER, ASSOCIATE DIRECTOR OF QUALITY CONTROL, SMITH, KLEIN & FRENCH LABORATORIES; AND DR. ROBERT QUINNELL, DIRECTOR, MEDICAL RELATIONS, PHARMACEUTICAL MANUFAC- TURERS ASSOCIATION Mr. STETLER. On my comments with respect to the hearings, I have never felt nor have I ever said that this is not an appropriate activity of Congress or this committee, nor that such hearings may not be necessary. Senator NELSON. You understand that I did not assert that you did say that. I said that various groups have made several criticisms, and one of them is that this is not an appropriate subject matter for con- gressional consideration. I am not aware that you have ever said that. Mr. STETLER. As a matter of fact, I think it is a completely appro- priate subject for inquiry. And my comments as to who have or who have not been heard have not related to the members of the pharma- ceutical industry primarily, although I did comment that we would prefer that the PMA have an opportunity to testify before individual companies. And as you know, we discussed that before. But five com- panies were put on in advance. If other companies should be here, I think they will be glad to appear. But I think the predominant view in the industry is that the subjects that have come up in these hearings, that affect the industry, can be appropriately discussed by me or by the men that I have with me from our companies and our sections. Now, what I have said-and this is in the area of criticism- Senator NELSON. Let me go back to that point for a minute. As you are aware, from the very beginning, 5 days before the hear- ings ever started, you were in my office with your counsel to ask when you could be heard. I told you to let me imow when you wanted to be heard. And I also stated very early in the hearings that I would be happy to hear from the whole industry, all its individual members, as well as the PMA. I trust you don~t think it is a matter of fairness, so far as the com- mittee is concerned, whether we invite and schedule individual member companies to appear before or after the association, do you? Mr. `STETLER. We thought it would be preferable-it would add something to the hearing-if we cou'ld give a general presentation. As you know- Senator NELSON. But that is not a matter of fairness, is it? PAGENO="0180" 1324 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Mr. STETLER. Oniy that three of the five companies that were in- volved were before the committee because of a particular price situa- tion that was of interest to the company and to the committee. And that seemed to us like rather specific items which might better follow a general presentation by the industry. But I must say that is not my main point. The main point is this. The major items that have come up in the hearings have dealt with medical and scientific issues-primarily the subject of generic' and therapeutic equivalency-the major issues, it seems to us, have dealt with issues of equivalency-generic and therapeutic-some on the compendium, and some on the de'ta'ilin~' of doctors. But certainly' doctors `and `scientists and some of these sc~eritific issues have been in the forefront of the hearings Now, we think that to the extent that medicine or pharmacologists has been heard, they have expressed a minority view. We think there is another view, and in our opinion it is the predominant view. And, that there are some people that `should be called by the committee or" if they have asked `to testify, that they should be allowed to `testify... And there have been quite a number that have done just that. I think really it is with respect to the scheduling of some of those~ nonindustry, witnesses that there has been, in our opinion, a problem.. It is in that area that I have said I think the other side of `the scien- tific case before the committee should be more fully exposed. I still have that feeling. Senator NELSON. Well, I am sure that if you were conducting the'~ hearings, you would conduct them differently. But `a serious question that seems to me to be raised is that in a number of speeches you have~ made, you stated directly or implied that the hearings have been loaded against the industry, that you have not had `a chance to appear, or that you do not know when you can appear And this was said very shortly after `the hearings started, even though I had gone into that in some detail with you in private Here is the sort of thing I am referi ing to In Chicago, on September 23, a little more than a month ago, in a speech to the annual convention of the American Medical Writers~ Association, you stated, "The fact is the pattern of the hearings was set on the first day by the testimony I have just described, and it has not changed in 4 months as one handpicked witne's~ has followed the other to the stand I use `handpicked' in the most liberal, deliberate, and factual way." That was said with the intent of convincing those people that these hearings have been unfair, biased, and loaded against the industry-. isn~t it? Mr STETLER Not against the industry They have not covered the scientific issues in a way to give the other side-and there is `another" side-an opportunity to present their views Now, I mean by the other side groups that have `asked to testify, like' the American Academy of General Practice, the two national orgamza tions of interns, the American Medical Association, `the Association of" Abdominal Surgeons-groups of `this type that speak for large num- bers of doctors and scientists. I think they can give a more representa- tive view than `an individual physician who speaks for himself. PAGENO="0181" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1325 Senator NELSON. How do you knOw all these organizations have asked to appear'? Mr. STETLER. They have told me they have asked to appear. Senator NELSON. As you are well aware, we cannot hear everybody on the same day. I simply respond to that by saying that there is no- body, no group that is better prepared, it seems to me, to answer any single question about generic equivalency, quality control, or pricing than your individual members. At the beginning of the hearings, I publicly extended an invitation to every single PMA member to appear before this subcommittee. I will document this in the record later-I begged them to come during the first week of the hearings. So you are not satisfied with the fact that I did not invite as wit- nesses some people that you would like to have. But I do not know how you can prefer any witness in the world over your own members, and I do not know of any witnesses that are better prepared to talk about generic equivalency and all the aspects of the problems that we have `discussed than your own members. I have asked them to come, and they have not come. So how can you go to Chicago and say the witnesses who have been picked are loaded against you, when at any time I would have taken any one of your members and put them on, but I could not get them. Mr. STETLER. Senator, in your remarks on the 15th, which were most appropriate, and frankly is what guided me-when these hearings started-you not only invited industry witnesses, but you very prop- erly invited anybody with an interest in this controversy to come and be heard. Now, I have not said that industry has been disadvantaged. What I have said is that these other groups should be heard. Now, as far as the Academy of General Practice is concerned, they have been advised that they will not have an opportunity to be heard, that there is not enough time for them. And I think, frankly, that when they represent 30,000 .active general practitioners, they have a right. to be heard. Senator N~LSON. Well, the Academy .~f General Praetiee will be Theard. If the ~ta~ff members sent out a lettersaying they won't, the stan is in error. I have said repeatedly that every valid, viewpoint will be heard. I caiuiot hear everybody Yesterday,. for the first time, we had testimony from a representative of the American `Pharmaceutical Association. I suppose they are en- titled to exactly the same complaint~ as you haye made-they got on the same week. The Academy of General Practitioners could have the same complaint. We cannot take them all ~t onc~. But my point is that the one advantage I gave to the industry, that I did not give, because Icould not, to' any other interested group was to tell you in my office, and tell them here from the chairman's chair sev- ~eral times that I will take any single industry witness that is willing to come because this involves~them more directly, ~nore immediately, a~nd in mOre ways than any other group in America4 So in order to be fair, I said "Come on in any time you want to.!' They have au the expertise in the world. They manufacture the drugs. They know what generic equivalency is. , No representative o~f the Academy of Physicians has more knowledge about this than the best PAGENO="0182" 1326 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY experts in the industry. No private practicing physician can match that knowledge. No single pharmacologist could match'knowledge that these big distinguished companies have themselves. So I repeatedly said "Come on in." Now, you charge that the hearings have heard, as you put it, only "handpicked witnesses." Well, I was trying to handpick yours. I in- vited them all. And they would not volunteer. My point is that you should have said to that audience in Chicago in order to be fair yourself, "I don't like the order in which the witnesses have appeared, but my own representatives, my own 136 members, defaulted and did not step forward and volunteer to appear." Then I would not have any criticism. Bt the fault lies exactly and precisely right on the shoulders of the member companies that manufacture drugs, because I begged them to come in. I cannot think of anybody better prepared to discuss this question. If they do not come, I am not to be blamed for that, am I? Mr. STETLER. Senator, we are obviously in disagreement on this point. Senator NELSON. Am I or am I not to be blamed for your members failing to come in and present their case? Mr. STETLER. You are not to be blamed for that, and you have not been blamed for that. I get back to my other point. It is the other element that I think should be heard in these hearings. A good deal of time was spent, for instance, last Thursday, by Dr. Goddard on the subject of a drug compendium. And we came in for some kicking around on that occasion. Now, a drug compendium is allegedly for physicians. I think physicians should have a chance to tell you what they think they want or need with respect to a drug com- pendium. Let us hear from doctors on that one. Senator NELSON. Where would you start? I suppose everybody could have different ideas as to where we might start to have testimony on the drug compendium Do you know of any better place to start than with the head of the Food and Drug Administration ~ Mr STETLER I would start with the American Medical Association or the Academy of General Practice because- Senator NELSON I am glad you raised that question We invited Dr Thomas Hayes of the American Medical Association to come before the committee-the AMA refused to let him come. Mr. STETLER. Senator, the American Medical Association has written three times to the committee to be heard. Now I think- Senator NELSON Just a minute We invited br Thomas Hayes He is head of the drug council; is that not correct? Mr. S1~mER. Correct. Senator NELSON. We invited him to come, and the president of the AMA refused to let him come. Do you know that? Mr. STETLER. I think the AMA should be permitted to select their witnesses, if they are going to appear before this committee. And they did not want Dr. Hayes to be the witness. Senator NELSON. He is head of the drug council. Mr. STETLER. They have a lot of people in higher positions in the AMA than Dr. Hayes. Senator NELSON. Can you speak for the president? Would the president of the AMA come Mr. STETLER. I do not know. I think he probably asked to come. PAGENO="0183" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1327 Senator NELSON. We would like to have the president of the AMA. We would `like to have the head of the drug council. And if they have some suggestions we will take those, too. But I don't think the AMA ought to select exclusively who would come. The fact is, as you know, that Dr. Annis, past president of the AMA, wrote to Senator Smathers and said he would like to come. He was not on the board of the AMA at that time. Mr. STETLER. He is on the board now. Senator NELSON. I told Senator Smathers that we will put on indi- vidual doctors when we can arrange the time. Then, when Dr. Annis became a member of the board, the AMA wrote and said, "We want Dr. Annis to speak for us." Well, I would like to hear the head of the drug council, who was willing to come, as I understand it, but who was not permitted to come by the president. I would like to have the AMA president testify. And we would take Dr. Annis, too. Is there anything unfair about that? Mr. STETLER. I think they should be heard and I think that is a good idea. Senator NELSON. Well, we have already invited Dr. Hayes, and they have turned that down. Mr. SricrLEn. I think they are waiting now for a reply to their request to be heard. Senator NELSON. Well, I make an open invitation to the president of the AMA, and again to Dr. Hayes, head of the drug council, to come. If they are willing to come, we will also take Dr. Annis, who was not on the board at the time that he made a personal request to come.. Subsequently he went on the board, and then the AMA said, "He will speak for us." Well, that is fine, but I am not prepared to permit him to be the exclusive spokesman forthe AMA, and I do not think I have to be. Mr. STETLER. Well, I cannot comment on that, obviously. Senator N~so'N. Well, just so the public knows I invited Dr. Hayes, director of the drug council for the AMA, and he was willing to appear, but the AMA would not let him come. I think that ought to be a part of the record. We made a public statement inviting the president of the AMA to come, too. We have not heard from that invitation. Mr. STETLER. Senator, actually, I think you have a fairly recent letter from the AMA reiterating their desire to have a date set for them to appear. Senator NELSON. Who is "them"? Mr. STETLER. Whoever they select as their witness. Senator NELSON. The letter said they want Dr. Annis. Mr. STETLER. He is a perfectly legitimate witness. He is a member of their board, a past president of the AMA. Senator NELSON. Fine. I am glad to have past presidents. I would like the current president.. Mr.. STETLER. I am sure he will be available and willing to testify. Senator Nm1soN. All. righ.t. He has notresponded toour pu~biic.invi- tation. Dr. Thomas Hayes has not been permitted to come. I want to be fair about this. I want the AMA to be represented by their top people, their drug council. I will repeat the invitation publicly, as I have in the past, to PAGENO="0184" 1328 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY the president of the AMA, and to the head of the drug council, Dr. Hayes, and they can bring Dr. Annis along with them. We will hear them all in 1 or 2 days. This has been my posture from the beginning. rro leave the impression I have not been offering the change to these people to appear is not correct. For them to say that they want Dr. Annis, otherwise they won't come and that I am unfai.r is a lot of non- sense. I think the committee ought to have something to say about who they ask to come, too. If the AMA wants to bring Dr. Anms or a dozen other people, we are perfectly willing to hear them. But to say that we 7have been unfair about this I think is quite preposterous. And you have repeated this kind of statement in Montreal, Canada. There is loads of this material, Mr. Stetler. I have a TV transcript, "Interview with Joseph Stetler. Interviewed by Steward Finley." Mr. Finley asked you: Has the pharmaceutical industry been asked to testify yet? No; we have not been asked as yet. We are assured by Senator Nelson that we will have that opportunity, but we have not had it yet. Some of the issues that have developed in the hearings to date are medical in nature. We understand that some qualified physicians of medical organizations have asked for the opportunity to testify. We are hopeful they will have that chance soon. What date was that TV script? Mr. STETLER It has been a couple of months ago. I am not sure of the date. Senator NELSON. That was after you had been in my office and been `assured you would have a chance. It is after I invited the whole in- dustry to come one by one; is it not? Mr. STETLER. It is also after I wrote about three or four letters trying to pin down specific dates, letters to which I never received a response. Senator NELSON. We are going to put this all in the record. Etit the fact of the matter is that you did `not write a letter until you made all kinds of speeches saying I did not let you appear. This was after weeks has passed subsequent to the conference in my office. Mr. SPETLER. Senator, I wrote to you early in June, before that statementwas ever made. Senator NELSON. Do you have the date of that TV script? Mr. STETLER. I do not have it right here; I could supply it. I think it was probably in August. I would have to check that. Senator NELSON. And then there was a radio script at the same time. Would you mind telling the committee where you distributed this TV spot and the radio script? Mr. STETLER. That was distributed to 100 TV stations around the United States. Senator NELSON. How many in the State of Wisconsin:? Mr. STETLER. Probably one, but I do not know for sure. Senator NELSON. Would you give me a list of the statiOns, radio and TV, that it was distributed to? Mr. S'rlrrLria. It went to 100 TV stations and 200 radio stations. I will be glad to supply that list. Senator NELSON. I would like to have you supply the list of radio and TV stations to which the statement was sent, as well as the date on which it was made. Mr. STtiTLER. Right. (The information referred to, subsequently received, follows:) PAGENO="0185" COMPETITIVE PROBLEMS I~ THE DRUG INDUSTRY 1329~ WATM, Atmere, Ala. WAPI, Birmingham, Ala. WBIB, Centreville, Ala. WHOS, Decatur, Ala. WWWF, Fayette, Ala. WAAX, Gadsden, Ala. WERH, Hamilton, Ala. WLOB, Moulton, Ala. WFEB, Sylacauga, Ala. KC'AM, Glenailen, Alaska KAPR, Douglas, Ariz. KFIF, Tucson, Ariz. KJWH, Camden, Ark. KCCB, Corning, Ark. I~MAG, Fort Smith, Ark. KOSY, Texarkana, Ark. KIBS, Bishop, Calif. KBMX, Coalinga, Oalif. KRDU, Dinuba, Calif. KOAD, Lemore, Calif. KFWB, Los Angeles, Calif. KGOL, Palm Desert, Calif. KIBE, Palo Alto, Oalif. KRLA, Pasadena, Calif. KLOA, Ricigecrest, Calif. KOBQ, San Diego, Calif. KWJZ, Santa Ana, Clalif. KSUE, Susanville, Calif. KOMY, Watsonville, Calif. KSYC, Yreka, Calif. KOIW, Alamosa, Cob. KVFC, Cortez, Colo. KAVI, Rocky Ford, C41o. KOEK, Sterling, Cob. WLAD, Danbury, Conn. WSUB, Groton, (J~nn. WLIS, Old Saybrook, Genii. WSPC, Stamford, (J~nn. WTOR, Torrington, Conn. WILl, Willimantic, Oonn. WEHW, Windsor, Conu. WZEP, Defuniak Springs, Fla. WFBF, Fernandina Beach, Fla. WYSE, Inverness, Fia. WFFG, Marathon, Fla. WPC'F, Panama City, Fla. WSOM, Pamana City, Fla. WTRR, Sanford,Fla. WALT, Tampa, Fla. WQXI, Atlanta, Ga. WBBK, Elakely, Ga. WDYX, Buford, Ga. WGAA, Cedartown, Ga. WTTI, Dalton, Ga. WDGL, Douglasv&lle, t~a. WSGC, Elberton, Ga. WBHB, Fitzgerald, Ga. WVOH, Hazelhurst, Ga. WLOP, Jessup4 Ga. WLFA, Lafayette, Ga. WSNP, Sandersville, Ga. WPAX, Thomasvillè, Ga. WAOL, Waycro~s, Ga. KPOI, Honolulu, Hawaii KUPI, Idaho Falls, Idaho KAIN, Nampa, Idaho WOAZ, Carthage, IlL WAAF, Chicago, Ill. WDQN, Du Quoin, Ill. WRMN, Elgin, Ill. WMIX, Mount Vernon, Ill. WOMY, Ottawa, Ill. WIRL, Peoria,IlL WIZZ, Streator, Ill. WOSI, Columbus, md. WCMR, Elkhart, md. WROZ, Evansville, hid. WASK, Lafayette, md. WJC'D, Seymour, md. WGVA, South Bend, md. KSO, Des Moines, Iowa KMAN, Manhattan, Kans. KULY, Ulysses, Kans. WHBN, Harrodsburg, Ky. WKIO, Hazard, Ky. WMTL, Leitchfield, Ky. WPHN, Liberty, Ky. WNVL, Nicholasville, Ky. KCIL, Houma, La. KXKW, Lafayette, La. WBME, Belfast, Maine WLKN, Lincoln, Maine WFBR, Baltimore, Md. WNAC, Boston, Mass. WHAV, Haverhifl, Mass. WMRO, Milford, Mass. WBRK, Pittsfield, Mass. WAAB, Worcester, Mass. WABX, Detroit, Mich. WFDF, Flint, Mich. WC'SR, Hillsdale, Mich. WJBL, Holland, Mich. WJPD, Ishpeming, Mich. WKLZ, Kalamazoo, Mich. WJPW, Rockford, Mich. KDHL, Faribault, Minn. KDWA, Hastings, Minn. KLFD, Litchfield, Minn. KYSM, Mankato, Minn. KCUE, Red Wing, Minn. WHNY, McComb, Miss. KFVS, Cape Girardeau, Mo. KDFA, Doniphan, Mo. KHMO, Hannibal, Mo. WMBH, Joplin, Mo. KQYX, Joplin, Mo. KOMK, Kansas City, Mo~ KFUO, St. Louis, Mo. KDRO, Sedalia, Mo. KALM, Tahyer, Mo. KWRE, Warrenton, Mo. KGVW, Belgrade, Mont. KBMN, Bozeman, Mont. KLTZ, Glasgow, Mont. KUDI, Great Falls, Mont. KGEZ, Kali~pell, Mont~ RADIO STATIONS TO WHICH TAPED INTERVIEW FEATURING C. JosEPH STRTLER WERE MAILRD, JUNE 5, 194~T PAGENO="0186" 11330 COMPETITIVE PROBLEMS IN THE DRuG INDUSTRY WJAG, Norfolk, Nebr. XNEV, Reno, Nev. KWNA, Winnemucca, Nev. WRAN, Dover, N.J. XRAC, Alnaagordo, N. Mex. KSRC, Socorro, N. Mex. WKSN, Jamestown, N.Y. WICY, Malone, N.Y. WHN, New York, N.Y. WIRY, Plattsburgh, N.Y. WAPC, Riverhead, N.Y. WKJK, Granite Falls, N.C. WDSL, Mocksville, N.C. WPAQ, Mount Airy, N.O. WKRK, Murphy, N.O. WRNB, New Bern, NC. WYNA, Raleigh, N.C. `WN'CA, Slier City, N.C. `WMFD, Wilmington, N.C. WGTM, Wilson, N.C. WKRC, Cincinnati, Ohio WMNI, Cleveland, Ohio' WWOW, Conneaut, Ohio WTIG, Massillon, Ohio KGYN, Guymon, Okla. KT1V[C, McAles'ter, Okia. KLCO, Poteau, Okia. KGFF, Shawnee, Okia. KROW, Dallas, Oreg. .KWV'R, Enterprise, Oreg. KTIX, Pendleton, Greg. XPRB, Redmond, Oreg. WAEB, Allentown, Pa. WISR, Butler, Pa. WWGO, Erie, Pa. WHTJN, Huntingdon, Pa. WDAS, Philadelphia, Pa. WBRC-TV, Birmingham, Ala. WMSL-TV, Decatur, Ala. WTVY-TV, Dothan,, Ala. WOWL-TV, Florence, Ala. WAAY-TV, Huntsville, Ala. WKAB-TV, Montgomery, Ala. WSLA-TV, Selma, Ala. KPHO-TV, Phoenix, Ariz. KOLD-TV, Tucson, Ariz. KBLU-TV, Yuma, Ariz. KFSA-TV, Fort Smith, Ark. KAT'V, Little Rock, Ark. KERO-TV, Bakersfield, Calif. WHSL-TV, Chico, Calif. WCFT-TV, Concord, Oalif. KIEM-TV, Eureka, Calif. KJEO-TV, Fresno, Calif. KOET-TV, Los Angeles, Calif. KSBW-T'V,' S'alinas,.Oalif. KAAR-TV, San Diego, Calif. KSBY-PV, San Luis Ohispo, Oalif., KEYT-TV, Santa Barbara, Calif. WATS, Sayre, Pa. WMBT, Shenandoah, Pa. WAN'B, Waynesburg, Pa. WHIM, Providence, R.I. WERI, Westerly, R.I. WOOS, `Columbia, S.C. WF1S, Fountain Inn,S.C. WTND, Orangeburg, S.C. W'BBR, Travelers' Rest, S.C. WGOG, Walhalla, S.C. KNWC, Sioux Falls, S .Dak. WOPI, Bristol, Tenn. WJJM, Lewisburg, Tenn. KBOX, Dallas, Tex. KWRD, Henderson, Tex. KBNO, Houston, Tex. KGVL, Port Lavaca, Tex. KPE'O, San Angelo, Tex. KWTX, Waco, Tex. WFLS, Fredericksburg, Va. WDDY, Gloucester, Va. WRUM, Richmond, Va. WEER, Warrenton, Va. WHWB, Rutland, Vt. KAPS, Mount Vernon, Wash. KONP, Port Angeles, Wash. KGDN, Seattle, Wash. KDNO, Spokane, Wash. WBOY, Clarksburg, W. Va. W'T'OS, Fairmont, W .Va. WPAP, Parkersburg, W. Va. WHLL, Wheeling, W. Va. WHBY, Appleton, Wis. WRJ'C, Mauston, Wis. WEMP, Milwaukee, Wis. WIBU, Poynette, Wis. KMER, Kemmerer, Wy'o. RADIO STATIONS TO WHICH TAPED INTERvIEw FEATURING C. JOSEPH STETLEB WERE MAILED, JUNE 5. 19fi7-Oontinued `TV STATIONS TO WHICH FILMED INTERvIEw FEATURING C. JOSEPH STETLEB WERE MAILED, JUNE 5, 1967 KRDO-TV Colorado Springs Cob KREZ-TV, Durango, Cob. KREX-PV, Grand. Junction, Cob. KTVS, Sterling, Cob. WHNB-TV, W. Hartford, Oonn. WTTG-TV, Washington, D.C. WINK-TV, Fort Myers, Fla. WLBW-PV, Miami, Fla. WFTV, Orlando, Fla. WJHG, Panama City, Fla. WOTV, Tallahassee, Fla. WPTV, West Palm Beach, Fla. WALB-TV, Albany, Ga. WMAZ-TV, Macon, Ga. WTOC-TV, Savannah, Ga. KTVB-TV, Boise, Idaho KID-TV, Idaho Falls, Idaho WCHU-TV, Champaign, Ill. WIIU-TV, Chicago, Ill. WTVP-TV, Decatur, Ill. WIRL-TY, Peoria, Ill. WREX-TV, Rockford,. Ill. PAGENO="0187" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1331 Senator NELSON. Let us look at a statement of yours made at the annual meeting of the National Association of Retail Druggists, No- vember 1, 1967; Houston, Tex., just a few days ago: I cannot emphasize too strongly the significance of the Nelson hearings as they stand today, not only to drug manufacturers, but to the health professions and the public as well. If, as is now the case, the final record of the Nelson hearings is filled with distorted and biased material, it could eventually become the foundation for ill-conceived legislation such as I have just described. The record should and must be straight in the public interest. You say "filled with distorted and biased material." I want to go through the witness list with you witness by witness, and find out what parts are distorted and biased. You refer to people like Dr. Modell? Mr. STETLER. No; I refer to the first witness, for one, Mr. Haddad. Senator NELSON. I guess the committee would concede that he was not on your side. Mr. STETLER. Not only not on our side; I do not think he was on anybody's side with some of the material that went in the record. Senator NELSON. You could have had an industry witness on the stand at any time afterward to refute him, and you can do it today. I have no defense of anything any witness says here. They have to stand on their own. Mr. STETLER. Senator, I want to say the comments made were not directed at you, but to the testimony that went in. I happen to think some of the testimony that went in, and we can document~-some that went in was not proper, not fair-not because the witnesses were not on our side. But the main issue again I have tried to make is that certain groups that have not been heard should be heard, because only TV STATIONS TO WHICH FILMED INrxRvmlw FEATURING C. JOSEPH STETLEE WERE MAILED, JUNE 5. 1967-Continued WSJ V-TV, Elkhart, Ind. WHET-TV, Evansville, Ind. WPTA-TV, Fort Wayne, Ind. WLWI-TV, Indianapolis, Ind. WFAM-TV, Lafayette, Ind. WLBC-TV, Muncie, Ind. KVFD-TV, Fort Dodge, Iowa KTVO-PV, Ottumwa, Iowa KTIV-TV, Sioux City, Iowa KWWL-TV, Waterloo, Iowa KAYS-PV, Hays, Kans. KSLN-PV, Sauna, Kans. KAKE-TV, Wichita, Kans. WLTV, Bowling Green, Ky. 1VKYT-TV, Lexington, Ky. KALB-PV, Alexandria, La. TKATC-TV, Lafayette, La. KPLO-TV, Lake Oharles, La. WVUE-TV, New Orleans, La. KTBS-PV, Shreveport, La. WABI-TV, Bangor, Maine. WAGM-TV, Presque Isle, Maine WJZ-TV, Baltimore, Md. WBOC-PV, Salisbury, Md. WGBH-TV, Boston, Mass. WHYN-TV, Springfield, Mass. WTVS-PV, Detroit, Mich. WJRT-TV, Flint, Mich. WKZO-TV, Kalamazoo, Mich. WJIM-TV, Lansing, Mich. WWTV, Traverse Oity, Mich. KMBC-PV, Kansas City, Mo. KTVI-TV, St. Louis~ Mo. KBIM-TV, Roswell, N. Mex. WBEN-TV, Buffalo, N.Y. WROC~-TV, Rochester, N.Y. KOLN-TV, Lincoln, Nebr. WYNE-TV, Omaha, Nebr. WRAL-TV, Raleigh, N.O. WOPO-PV, Cincinnati, Ohio WEWS-TV, Cleveland, Ohio WBNS-TV, Columbus, Ohio KATV, Portland, Oreg. WIBF-TV, Jenkintown, Pa. (Phila.) WRCB-TV, Chattanooga, Tenn. KRLD-TV, Dallas, Tex. KHOU-TV, Galveston, Tex. WLVA-TV, Lynchburg, Va. WTVR, Richmond, Va. I(XLY-PV, Spokane, Wash. WEAU-TV, Eau Olaire, Wis. WBAY-TV, Green Bay, Wis. WISO-TV, Madison, Wis. WISN-TV, Milwaukee, Wis. WSAU-TV, Wausau, Wis. WHTN-TV, Huntington, W. Va. PAGENO="0188" 1332 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY one side has been heard to date. I just make that point. I think it is a simple point. If you say that the Academy and the AMA and thes& other people are going to be heard, I think the other side will be heard. Senator NELSON. Well, why didn't you tell the druggists, at the meeting of the National Association of Retail Druggists that I have repeatedly stated that every single valid viewpoint would be appro- priately represented? We cannot hold the hearing in the stadium and have everybody speak at once. What you are arguing about is the order in which they have been heard. The point I want to make clear to the public is that this chairman has said from the first day that we will hear every single member of your association and every drug manufacturer in America. And they did not come. I cannot help that. But to leave the impression that the hearings, have been filled with distortion and bias, when your own members refused to come is prepos'- terous. And when I asked a half dozen of their representatives, "When would you like to come?" they said, "Senator, we do not want to come." You know that as well as I do. Mr. STEPLER. Senator, they have said they would like to have thefl PMA present the case for them. And we are happy to be here today* to have that chance. Senator NELSON.. Mr. Stetler, I am happy to have you here today, but on the first page you say, "I am not of course in a position to answer charges or questions addressed to any particular company." Mr. STETLER. That is right-against `~y particular company. But. the charges and the issues before this committee are much broader than. that. We are prepared with six men here, all highly trained in their field, to tell you in some considerable detail about the major issues that have~ been raised in the hearings. Sen'~tor NEI SON We are glad to have you But my point is that we had particular comp'uiies first because we had particular issues we wanted to raise. And, furthermore we were willing to hear these companies on all the general issues as well. Every one of your major companies has people who are prepared to discuss all the issues affect- ing that company, or the industry as a whole. Mr. Si'irrn~'n. It would have been a complete waste of your time to bring in 136 companies. We can do it if we have the chance today to present thistestimony. Senator NELSON. You did not even want to bring in any of them. really. We have had an open invitation since last May, and yet you. are compl'unrng that the viewpoint of the industry has not been heard You are not the industry. You are a hired representative of the indus- try. You represent the firms who account for. 95 percent of the produc.- tion in the industry, as I understand it. But the people who manufac- ture the drugs and their scientists, their chemist's, their pharma- eolog]sts, their researchers, their business managers, their presidents, are in the companies you represent. Nobody in the world can speak' better for the industry `than these distinguished. people. You have.left the impression `all over this country-the implication is perfectly clear in your speeches-that this committee,, meaning Senator Nelson, ha's loaded the record with biased material. You woulct PAGENO="0189" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1333 have had all the material you wanted, biased or unbiased, by your own companies in this record, but they have declined to come forward. I think that has to be made clear. I say again-bring in your companies. I will give them dates. Mr. STETLER. The men I have with me today come from particular companies. They are the qualified experts that you want to hear from. Senator NELSON. Well, let me give you another example of what I mean. This is from a speech you made in Montreal, Canada, October 25, 1967: As you well know, our industry has been under attack from politicians such as Senator Nelson for too many years, and believe me we are getting a little tired of the game. It is also more than a little disconcerting to know, and we certainly do, that the Nelson Subcommittee and Russell Long and his staff have been getting considerable assistance and encouragement from some representatives of phar- macies. This in my opinion is unexplainable, and a most reckless type of activity. ~Would you like to comment on that? Mr. STaTLER. Yes. Senator NELSON. Now, you have been under attack by Senator Nel- son. Start there, will you? Mr. STETLER. I did not say I have. I said the industry has. And the industry has. Any casual reading of the transcript of these hearings to date could not be interpreted as anything but an attack on the drug industry. Also comments that have been made-the speech that was given for you in Wisconsin, on August 25, stated a lot of conclusions with respect to the issues before this committee-conclusions that I think probably should await the outcome of the hearings when all of these people have had a chance to testify. Now, as far as pharmacy is concerned, certain elements of pharmacy have been active in helping to draft bills like S. 2299 which we happen to honestly think are not only detrimental to the industry, but to medi- cine, pharmacy, and the public. Now, there are different feelings in pharmacy on this particular issue, and I think both sides ~hou}d be heard. I made those statements. And until all of the elements and all of the interested parties that were invited on May 15 are heard, I think the hearing is not full and complete. Senator NELSON. Let me quote a statement of yours given before a meeting of the Texas Medical Association in Austin on January 21, 1967, before the hearings ever began. It might remind you of a little bit of a slight bias in advance. We are facing a hydra-headed threat from two directions. Senator Gaylord Nelson of Wisconsin, Chairman of the Senate Monopoly Subcommittee of the Small Business Committee has announced he is going to hold drug hearings during the next couple of months. This will undoubtedly mean side trips into the field of prices, profits-as well as industry marketing and promotion. It sounds like an inquisition in the classic mQld, which will test our capacity for taking verbal punishment, our ability to absorb Ill-founded accusations and bounce back with reason and truth, and our willingness to stay on our feet fighting for what we believe is right and best for the Nation's health care. You had us all categorized 3 months before the hearings started. Or was it 5 months? PAGENO="0190" 1334 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY I repeat-all sides will be heard as I have said in the beginning. And I cannot hear them all at once. I suppose Dr. Apple could have complained. I apologized to him yesterday. I said, "You are the first representative of the pharma- *cists which I have called, and tomorrow Mr. Stetler will appear. If there is a complaint about the order in which you are called or about how long it has taken, you have the same complaint that Mr Stetler has expressed all over the United States. But at least I have told Mr. Stetler to have every single company who supports his association to appear before the committee, and we have only had two volunteers." So I repeat my offer for them to come again. All the viewpoints will be heard. I cannot hear them all at once. I suppose if you were chair- man, we would have a different order in which you would call them. But I think we have had a long list of very distinguished witnesses although you may differ with them. Let us take a look at them. On the fourth day of the hearings we started with experts in the field. We had Dr. Walter Modell, director, clinical pharmacology, Cornell University Do you consider him an expert witness ~ Mr. STETLER. I consider him to be a well-qualified man in the field. Good man. Senator NELSON, Dr. Walter Richard Burack, Harvard Medical School; Dr. Melvin D. Small, Georgetown Medical School; Dr. James Haughton, first deputy administrator, Health Services Administra- tion, New York City, Dr Harry L Williams, profesor of pharm'L cology, Emory University, Dr P F McGee, chairman, Depaitment of Pharmacology, Creighton University; Dr. Lloyd C. Miller, director' of revision, United States Pharmacopeia-your organization partici pates in the standards for establishing `the standards for the drugs in the Pharmacopeia-Dr Solomon Garb, Department of Pharmacology, University of Missouri, Dr J Fitelson, drug and therapeutic infor mation, New York; Dr. Leighton Cluff, chairman, Department of Medicine, University of Florida; Dr. Margaret McCarron, Los Angeles County Hospital, Harold W Burrows, president, Parke Davis Co, Detroit; W. H. `Conzen, president, Schering Corp., New Jersey; Dr. Calvin Kunm, Department of Preventive Medicine, University of Virginia, Dr Martin Cherkasky, director, Montefiore Hospital, Bronx, N Y, Dr James Goddard, Commissioner of FDA, Henry DeBoest, vice president of the Eli Lilly Co , Richard Furlough, presi dent, E R Squibb & Sons, Dr Frederick Wolff, director of research, Washington Hospital Center, professor of medicine at George Wash ington School of Medicine, President Silloway of CIBA, George Callahan, sales projects manager, American Telephone & Telegraph Co , Dr James Goddard, again, Commissioner, Food and Drug Ad ministration; Dr. Edward G. Feldmann, director of the National' Formulary. Aren't these distinguished `people with knowledge in this field? ` ` Mr Sa~rJrLrit Some are and some are not Senator NELSON Which ones are not ~ Mr. STETLER. Well, some of them are relatively unknown. I am sure they have a right to their own view, and they expressed it But I make the point there are others who speak for greater numbers, who are PAGENO="0191" COMPETITIVE PROBLEMS IN THE. DRUG INDUSTRY 1335 better qualified than many of those witnesses, and whose views have not been telegraphed in advance-some of those men were witnesses before the Kefauver committee, 7, 8, 9 years ago. Senator NELSON. Do you have any suggestions, pharmacists,. pharmacologists, doctors, or others who you would like to have appear? Mr. STFJrLER. Yes, sir. Senator NELSON. Who have you? Mr. Sa~mi~i. I could supply you with a list, if you would like. Senator NEr1soN. How about Dr. Alfred Gilman; is he distinguished in the field? Mr. STETLER. Yes, sir. Senator NELSON. Would you be satisfied that he was scientifically qualified? Mr. STETLER. I am sure he is well qualified. Senator NELSON. He had told us he did not want to come, but we will reinvite him. Mr. STETLER. Of course, that is his personal decision. He is a well- qualified man-I can assure you of that. Senator, you raised an important issue with respect to the Reader's Digest. Could I comment on that? Senator NJ~SoN. Sure. Mr. STETLER. This Reader's Digest program was brought to the PMA's attention something over a year ago. And it was presented t~ us by the Reader's Digest, and by N. W. Ayer, an advertising agency. It is a new venture for us, and we thought a v~ery fine venture, one which we envisioned as giving us an opportunity to communicate on an institutional basis with the public. And it is something that as an industry and as an association we have not done in the past. Now, I realize-because I have gotten the results of your letters tG these agencies of Government-that there now are questions raised about it. I can say this about it-that the format of the publication in the Reader's Digest was presented to us by this magazine and by this ad agency. Very frankly-I am familiar with the format and agreed with it. Senator NELSON. Was it your ad agency? Mr. STETLER. No; they came to us with Reader's Digest. It was a. joint presentation by the agency and the Reader's Digest. Senator NELSON. Did you approve of the ad? Mr. Sn1~mir~n. Yes. I saw the format and I didn't disagree with them.. It is an eight-page, detachable insert in Reader's Digest. As you know, the first page indicates that it is a special advertising section, and the last page indicates that it is sponsored by the PMA. Senator NELSON. As a public service? Mr. STETLER. That is right. But nobody gets eight pages in the Reader's Digest without paying for it. I think everybody realizes that. Also, those eight pages are separately numbered from the rest of the book. I believe the paper is the paper they normally use for ad copy. But I can tell you this. And I can say this emphatically, because I had a great deal to do with the decision. There was definitely no intention of any deception. We have sent this to many, many people. I have yet to receive a letter from any- PAGENO="0192" 1336 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY body that says they were deceived by the format or the lack of any clear identification in the tear-out-other than the people we heard from at your-in response to your letter. Senator NELSON. You have not i~eceived a letter from anybody who said they were deceived? Mr. S~ri1mER. That is right. Senator NELSON. Well, if they were deceived, how would they know it? Mr. STETLER. They could take affront at the format. They could say, "In my opinion, this format is deceptive," as you have said in your letters to the Department. But nobody has called this to our nttention and said they had a problem with it. Senator HATFIELD. Mr. Chairman, I would 1ike~ to comment that could happen after the fact. They may have been deceived or brain- washed, either one. Senator NELSON. You are talking about your side of the political field, not mine. Go ahead. Mr. STETLER. I can tell you this. I assure you that we did this in good faith. We thought, and would still believe, that anybody that has as much experience as the Reader's Digest, and this ad agency, which is a nationally known agency, would know what is the proper form of an ad and what is not. We took their approach, and we accepted it. And we still think it is not misleading. As I say I have heard nothing from' anybody other than the agencies of the Government that have been asked to comment, that there has been any trouble with it. I will say this in addition. Since this question has been raised, I can assure you that in the next issue, on each inside page, there will be a repetition of this special advertising section-just on the chance that somebody has been misled. But that does not mean that when this thing was started there was any concept that that could be a possibility, and I assure you on my part it was not, or on the part of the PMA who is responsible for this. Senator NELSON. Well, a couple of questions about that. I looked at this ad very carefully, and it says "Special Advertising Section." And then you flip the page and it appears to be-the objec- tive is clear-it appears `to be just an independent article in the Reader's Digest. Mr. STETLER. That was not my objective or ours, I can assure you. The table of contents on the front also indicates that there are four articles, and what the titles are for the articles inside this eight-page *detachable magazine within a magazine. Senator NELSON. If you look at every other ad before and after- I have looked at 10 or 15 of them-they are all clearly marked as advertisements. This is the only one that is not. And then opposite *the front page it says, "If your copy has been removed, write to Health, Post Office Box 2811." Why not write to the Pharmaceutical Manufacturers Association? Is that your post office number? Mr. STETLER. Let me comment on that. First of all, incidentally, this type of a detachable insert did not start with us in the Reader's Digest There have been many many others and they have handled these in a variety of ways but this was PAGENO="0193" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1337 not-the inception of this kind of an approach with this magazine. This magazine goes to something like 17 million people, and I do not ki~ow how many others, whose hands it comes into. But we did not want them writing to the PMA for copies of reprints, not for any deceptive reason, but just because it would be very tough to handle our mail if it came that way. I understand it is notunusual in getting a post office box to use sortie other word than the name of the corpo~ ration or a long name. Once again, I do not think anybody was de- ceived by that. And certainly nobody that has written in for a reprint has indicated a problem with it. But if that creates aprob1em-.--~- Senator N1~LSON, Do you really mean if an ordinary reader looke'd at this, and it says "Write to Health," he wouldn't have the impr~s- sion he is writing to some independent health publication? Mr. STEPLER. I don't know what his impression might be. All I know he is writing for a reprint. When he gets it he will know what this is and what it says. It is clearly indicated. Senator NELSON. On page 24 it says, "If your copy has been re~ moved," and if it has been removed, there is nothing to tell them anything about an advertisement. Mr. STETLEE. As you would label this as propaganda-there is no propaganda on this page, either. He has to write for the reprint. When he gets the reprint it is clearly identified. Senator NELSON. No. When he gets the reprint, very carefully the words "Special Advertising Section" have been removed. Why is that done? Mr. STETLEE. It is indicated where it was in the journal-on the back-that it is part of a series from the Pharmaceutical Manufac- turers Association. Senator NELSON. You are saying here that if your copy has been removed write to "Health." On this opening page the words "Special Advertising Section" appear. Then on the reprint that you send them ~`S:pecial Advertising Section" has been removed, so that you receive a reprint that says "Why have many dread diseases vanished, what is the drug name, what are the drugs that reach troubled minds, where are prescription prices going?" And it says "Medicines and Your Family's Health," reprinted from the November 1967 issue of the Reader's Digest. Now, Mr. Stetler, you know that every single person in the United States, with the rarest of exceptions, is going to say "Well, this is a very interesting little objective health article." I am not talking about the quality of it. You may defend that or r~ot. But the point is that the reader, the doctor, the pharmacist, the patient, is going to look at that and say "This is a very nice little article about drugs." And he is going to be misled. I think that is clear as a bell. Mr. STETLER. Well, I hope that is not so. It was not intended. I have had nothing to indicate that ~hat has happened. I think it would have been really in many ways-I suppose it would be difficu1t for us to tell our story where somebody would not feel that we were trying to be deceptive. But this was a very honest, sincere effort for the first time to get a message across to the public, and we `have not communi- cated with the public before. I `am sure somebody would find fault with it, no matter how we prepared it. 81-280--68-pt. 4-13 PAGENO="0194" 1338 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Senator NELSON. You can criticize all kinds of advertising. But here is a tax-exempt organization circulating to the public all over the United States `a pamphlet which would require a fairly `sophisti- cated person to discern as an ad, when the only indication after he gets through reading, if he bothers to read the fine print, is the phrase "First in a series published as `a public service by the Pharmaceutical Manufacturers Association." If this was the only thing I ever saw, my interpretation would be that the Pharmaceutical Manufacturers Association selected an article written by an independent source that they thought was pretty reliable and favorable to their industry, and decided to `spread it aroi~ud the country. It would not occur to me from just glancing at these words that it was prepared by the PMA I might wonder who the author was, but ordinarily not. So I do not see how the public is going to know that.this piece that is being circulated is in fact a piece of advertising. And if it is ad- vertising, at least you should alert the people of that fact. Now, it seems to me that as a tax-exempt organization, you have a double responsibility, a higher responsibility to the public than some* of those who are not tax exempt. Mr STDTLER We have the same responsibility as far as not deceiv mg, whether we are tax exempt or not And there is no intention here to deceive Just two points I say again that this was j~repared in this format at the requeat of people that have had experience I can tell you one thing, one final thing on this, as far as we are concerned, and that is, since a question has been raised, on the reprints I am going to make sure that in future quarterly supplements, and there are going to be three more in the Reader's Digest, on the front page it is going to say "Advertising Section, reprinted from the Reader's Digest." Senator NELSON Where is it going to say that ~ Mr STETLER Right there on the reprint, right on the front (in dicating) Senator NELSON Have you discussed this with the Federal Tride Commission? Mr ST1JTLER Yes, I have I spent an hour last Friday afternoon in Mr Sweeney's office, and we have supplied him with all of the background and all the information. I should say one other thing. The letters that we sent out distributing these reprints clear]y in dicated that there was a project sponsored by the Pharmaceutical Manufacturers Association Now, we have given him all the back ground We sent out a press release We have given him that All this clearly identifies the PMA as a sponsor of this project We have never tried to hide it We have been rather proud of it Senator NELSON You mean to the doctors you sent it to ~ Mr STETLER We sent it to a lot of folks We sent it to you as a Member of the Congress, to the Members of the Congress, to vai ions State legislators. And frankly we have gotten a great number of good letters in response to it. Senator NELSON. How many of these reprints have you sent out? Mr. STETLER. There were a million reprints produced, `and I think most `of them have been distributed. Senator NELSON Has every doctor in the United St itcs i eceived one PAGENO="0195" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1339 Mr. STETLER. I am sure he has not; no. We have had requests from some. But not a very high percentage; no. Senator NELSON. But you have printed a million of these copies? Mr. STETLER. A million of these were prepared by Reader's Digest, and supplied to us as an overrun. Senator NELSON. What is the nature of the list you are sending it to? Mr. STETLER. This was sent with a covering letter to Members of Congress, to members of State legislatures. Senator NELSON. One copy each? Mr. STETLER. On those, yes. I will read the list here. They went to our members, copies for distribution to employees, stockholders, physi- cians, they went to Federal and State executives, university officials, went to hospital administrators, to news media, to physicians and hos- pitals on request, and to pharmacists on request, and to National-State professional organizations. The physician requests have numbered 23,000. Senator NELSON. Physician requests? Mr. STETLER. Yes. Senator NELSON. How many physicians did you send it to directly? Mr. STETLER. Only to those who requested it-23,000. Senator NELSON. The patient, of course, would not see the letter. He would see this ad here which does not contain the word "advertising" in it a single time. Mr. STETLER. He would. And as I have just said, since the question. has been raised, the next issue is going to be clearly identified, But I can assure you that from the source of this suggested format, and On my reading of it, I did not think it was misleading, and I still do not. And apparently the people we have heard from do not think so. Senator NELSON. What is the total cost of the series of four? Mr. STETLER. Each of these inserts in the Reader's Digest cost about $250,000. That is close to a million dollars for four. Senator NELSON. This is part of a series that will be run 4 months in a row? Mr. STETLER. It is going to be run quarterly; four times; yes. Senator NELSON. What is the cost of the reprints? Mr. STETLER. It is a very small amount. I cannot recall. It is a small amount. It is an overrun when they run the magazine, and the reprints are inexpensive. I would say maybe a million reprints cost ~ I would have to check on that. Senator NELSON. Would you send the committee the amount? Mr.STETLER. Oh, surely.1 Senator NELSON. The reprints, or the overrun, as you called it, was printed and supplied to you by the Reader's Digest? Mr. STETLER. Right. Senator NELSON. So when you compare the front page of the two, it is clear that a positive action was taken to remove the type which says "Special Advertising Section" in the magazine, and leaves it off in the reprint; correct? Mr. STETLER. Left off. Senator NELSON. It would have to be removed? 1 Mr. Stetler subsequently stated: "We obtained a total of 1,250,000 reprints of the PMA advertising section from the November issue of the Reader's Digest. The cost of these re- prints was $6,287.50." PAGENO="0196" 1340 COMPETITIVE PEOBLEMS IN THE DRUG INDUSTRY Mr. STETLER. When they did the excess run, they took that off. Senator NELSON. Well, can you believe there was any intent on the part of whoever did it, other than to mislead the public as to what it was? Mr. STETLER. I can tell you with assurance there was no intent on my part. And I am responsible for the PMA's part of it. It was their recommended format. I accepted it. And I do not attribute deception to them, and certainly there was none on our part. Senator, could I begin on this statement? Senator NELSON. I just have one other item here, and then Senator Hatfield has a question. I think with regard to this ad I ought to put something in the record at this stage. It is a letter from Wolins Pharmaceutical, and Iquote: As a follow-up to our report to y.ou of October 19, 1967, we enclose the Novem- ber issue of Reader's Digest. This issue as you no doubt know contains an 8 page advertising section placed by the Pharmaceutical Manufacturers' Association. We offer it as addi- tional and continuing evidence that the PMA is going out of its, way to malign generic name drugs and undermine public confidence in them. We draw your particular attention to page M-4, second column, to the article's reference to tolbutamide. We were not aware that toibutamide was available under its generic name. The patent is owned by Upjohn, circa 1957, and the drug is produced and sold in the United States only by Upjohn under the name Orinase. It is one of the fifty most prescribed drugs. Wolins has no knowledge of it ever being offered in this country under its generic name; in fact, we believe that we are safe in saying that no other brand name manufacturer in the U.S. produces it either. We wonder why the PMA has to go all the way to Canada to find an example of an unsatisfactory generic name drug? Canada, of course, does not impose the strict manufacturing controls in operation In the United States Yet 50 mu lion people were exposed to this distorted presentation. Mr. STETLER. We are prepared to illustrate in our testimony some very specific examples in the United States. Senator NELSON. All right. One more thing about the example of toibutamide. I want to put in a letter in the record to the Canadian Medical Journal by Arnold K. Carter, M.D., of Windsor, Ontario, in which he comments on the case of tolbutamide used as an example in the Reader's Digest article: The firm replied at once that the tablets submitted were not of their manufac- ture, as judged by physical appearance, but that they would analyze them and report. The findings, which I received shortly, were as follows': These tablets contained 500 mg. of tolbutamide but did not disintegrate after 45 minutes in gastric juice followed by 63 minutes in intestinal juice. They are completely outside the limits set by the food and drug regulations for tablets sold in Canada. This is the exact example you are using-then the drug being used manufactured in Canada did not meet Canadian standards, and cer- tainly did no't meet ours, so it `certainly cannot be an. indictment of generic drugs as such. Mr. STETLER. Senator, this drug was sold in Canada. Whether it met standards or not, it was available as a generic product. I am sure it is easy after it passed through the patient for somebody to ~ay it did not meet standards. PAGENO="0197" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1341 (Tlieleitter referred to follows:) [From the Canad. Med. Ass. J., Jan. 12, 1963, vol. 88] SUBSTITUTION FOR BRAND-NAMJDO DRUGS To the EDITOR: The serious consequences of a request by one of my diabetic patients that his druggist be allowed to supply a cheaper drug to refill my prescription for a brand- name tolbutamide prompts this communication. I believe it has a significant bear- ing on the present controversy about generic drug prescribing and might well alert some of my fellow physicians to hazards inherent in this practice. This patient who bad been controlled for 11 months on diet and 1 g. daily of tolbutamide (Mobenol) inexplicably went out of control recently, his fasting blood sugar rising rapidly to 287 mg. %. At that time the patient noted tolbu- tamide tablets intact in his stools and brought one tablet in to me. He was then asked to bring in the remainder of his prescribed tablets, and since his case record still specified that he was taking Mobenol, these were forwarded to the manufacturer, together with the passed tablet. At the same time the patient was hospitalized and his diabetes mellitus was controlled on the former dosage of tolbutamide. The firm replied at once that the tablets submitted were not of their manufac- ture, as judged by physical appearance, but that they would analyze them and report. The findings, which I received shortly, were as follows: "These tablets contained 500 mg. of tolbutamlde but did not distintegrate after 45 minutes in gastric juice followed by 63 minutes in intestinal juice. They are completely outside the limits set by the Food and Drug Regulations for tablets sold in Canada." In other words, although these tablets contained the labelled quantity of drug, they were to all intents and purposes quite useless. This episode has, therefore, resulted in temporary lapse in control of the patient's diabetes, and also necessitated the expense and inconvenience of a period of hospitalization in order to regain control. It has also resulted hi sub- sequent Investigation of the pharmacy concerned by the Ontario College of Pharmacy inspector which revealed a notation on the prescription concerned that permission to substitute a cheaper brand had been obtained from myself by telephone through my nurse. This case, which has been a traumatic experience for the patient and myself, of course, does not necessarily indict all or even the majority of unhiranded drugs as being suspect. However, since diabetes is one of the few areas of therapeutics where failure of response to a drug can be observed dinicaily and measured objectively, I consider this instance most significant and revealing. It makes one wonder how many product failures occur in other circumstances where results are less obvious or dramatic. Until existing regulations allowing the import into Canada, distribution and sale at discount prices,, of unassayed drugs are altered, I will henceforth not prescribe any drug without specifying a brand or manufacturer. ARNOLD K. CARTER, M.D. WINDsoR, ONTARIO. Senator NELSON. Senator Hatfield. Senator HATFIELD. Mr. Chairman, I would like to pursue this for Just one or two moments, because as I understand, Mr. Stetler, you said earlier that the Reader's Digest approached you on this possible adver- tisement, and that it was drawn then in conjunction with an advertis- ing company? Mr. STETLER. Yes, sir. Senator HATFIELD. Mr. Ohairman, I suggest that perhaps you have focused upon something that might involve even the Reader's Digest, that perhaps we might have them before our committee-for the simple reason that if you look a few pages later, you will find another advertisement, a single-page advertisement which is not perforated, but purely a part of the magazine-it is not listed with a page number, because it, like this particular advertisement that we are talking PAGENO="0198" 1342 COMPETITIVE PROBLEMS IN THE DRuG INDUSTRY about, precedes the actual articles that are listed in the index. It uses the same format as a regular article, like on page 111-I just choose this at random It says this article is "Cool Talk About Drugs" That is a regular article But on this one it says "Advertisement-Doctors find way to shrink painful hemorrhoids and promptly relieve pain, itching, in most cases, by Dr James Henry ~ Then it talks about-and I want the full page in the record, if you will, please-"the effectiveness of this treatment has been convincingly proved by leadmg doctors in New York City, Washington, D C, and a Midwest medical center." (The article referred to follows ) PAGENO="0199" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Advertisement Doctors Find Way To Shrink Painful Hemorrhoids and promptly relieve pain, itching in most cases. 1343 B~ JAMES HENRY WESTON The effectiveness of this treatment has been convincingl~t proved by leading doctors in New York City, Washington, D.C., and at a Midwest Medical Center. A scientific research institute has L 1~discovered a medication which has the ability in most cases - to actually shrink hemorrhoids and to promptly stop the itching, burning, and relieve pain. In case after case, the sufferer first notices relief from the itching and pain. Then tender swelling of the inflamed hemorrhoids is gently reduced. And all without the use of narcotics or stinging astringents of any kind. Tests conducted on hundreds of patients by a leading hemorrhoidal specialist in New York City, in Washington, D.C., and at a Midwest Medical Center proved this so. The answer is Preparation H®. There's no other formula for the treatment of hemorrhoids like it. Preparation H also lubricates, soothes irritated tissues and contains a special bacteriostatic to help pre- vent further infection. In fact, Preparation H has proved so suc- cessful that it outsells all other hemorrhoid remedies combined. Preparation H is obtainable in ointment or suppository form at drug counters everywhere, No pre- scription is needed. PAGENO="0200" 1344 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Senator hATFIELD I am not going to read the entire article, but it is in the exact format of a regular printed article in the Reader's Digest. But it says in the last sentence or two- Preparation H- And that is what is being advertised- the answer is Preparation II. There is no other formula for the treatment of hemorrhoids like it. Preparation H also lubricates, soothes irritated tissues, and contains a special bateriostatie to help prevent further infection. In fact, Prepara- tion H has proved so successful that it outsells all other hemorrhoid remedies combined. Preparation H is obtainable in ointment or suppository form at drug counters everywhere. No prescription is needed. Now, that is pretty sound, I suppose. In advertising that is a pretty hard sell. But if you note, Mr. Chairman, this is in the `same format as an article that would appear as a regularly written article in the Reader's Digest. Now, if the Reader's Digest is going out to companies and associa- tions and other groups, and selling advertising on this format basis that most represents their own normal format, which was brought up by our chairman so well this morning as a tendency to mislead the pub- lic-whether it is the intention of the advertiser or not-that the im- pression that is given to many casual readers~. It seems to me, then, rather than merely focusing upon this gentleman and his association, that perhaps we ought to bring in the Reader's Digest, or ask the Fed- eral Trade Commission to investigate the entire advertising policy of the Reader's Digest-because to me this can be as misleading-even though it is headed "Advertisement"-as the one we are talking about with the PMA, which is also headed up in the Reader's Digest "Special Advertisement," and has perforated pages, which this other one does not. So I think we may have even a bigger subject than what we have been talking about thus far this morning. Senator NELSON I thrnk the distingmshed Senator from Oregon is correct. The fact of the matter is that the intent of all of these kinds of ads is to mislead the consumer. There cannot be any other intent at all. And this is why everything is played so subtly. In this piece by the PMA, the word "advertisement" does not appear one single time. I think I could pass that out to ordinary people all over, and then give them a test on it, and `there would not be one, in a thousand who would guess it was an ad. Now, if the consumer, who has a difficult enough time in these complicated days of sophisticated material and equipment on the market, is going to be professionally and calculatedly misled by clever advertising firms, and the biggest circulation magazine in America, I think Senator Hatfield is correct that this particular question ought to be looked into also. I do not know any other way to protect the consumer. In the article the Senator just read, if a person did not happen to notice the word "advertisement" he would take it as the gospel truth, and the answer to his problem, and be fooled and confused by the whole business. I think it is a sad commentary on the integrity and quality of pres- entation of products and material to the consumer in this country today. PAGENO="0201" COMPETITIVE ?ROBLEMS IN THE. DRUG INDUSTRY 1345 Mr. GORDON. Mr. Stetler, pursuing the problem of content rather than format, the article, "The Anonymous Drug That Hospitalized a Patient," which is part of the advertisement is based on a letter which was sent to the Ctmadian Medical Journal on January 12, 1963, on tolbutamide. The chairman referred to `it `a while ago. The article in the PMA ad does not include the fact that the generic product used was outside the limits set by the Food and Drug regulations of Canada as the chairman stated. Don't you think, that was a very important piece of information that should have been included? Mr. STETLER. No, I do not. Mr. GORDON. In other words, you are comparing a brand name drug with a generic named drug that was on the market illegally? Mr. S~ITrr~r~n. Well, I suppose all `of them that after the fact are determined not to meet standards are on the market illegally. But they are on the market to be used to fill prescriptions that are written generically at that time. Th'at is the point that is being made here. It is very easy after the fact to say it is `an illegal drug-~-it does not meet the standards. But who knows that when the prescription is presented and it is on the shelf of the drugstore, `and it is used~-this is basically one of our points. That merely `an indication on a label that it allegedly meets TJSP or NF standards is not the beginning and the end of the story. Mr. GORDON. But we are dealing with the problem of equivalency, or at least clinical effectiveness of drugs that meet lISP standards- not drugs that do not. Mr. SPEPLER. I suppose the person th'at got this, and the phar- macist that dispensed this assumed it met TJSP standards, or it would not have been on the market to be'available to fill that prescription. Senator HATFIELD. Mr. `Chairman, I would like to interrupt here. Mr. Gordon brings up something I have found over the hearings to be difficult to comprehend and `a lot of discussion but little fact. Is there in your opinion any kind of `scientific data which shows therapeutic equivalency between generic and brand names, or a differential? Mr. STETLER. It is not a matter of opinion of mine, Senator. We have had concrete, specific, scientific documented evidence that was presented to the committee on Monday of this week, which we are prepared to pre- sent today- Senator HATFIELD. You have it with you? Mr. STETLER. We have it. Senator HATFIELD. Could we h'ave it? Mr. STETLER. This is from Parke, Davis. Dr. Lueck is here prepared to discuss it if he is permitted to. Senator HATFII~LD. Mr. Chairmnn~- Senator NELSON When did we receive that testimony? Mr. STETLER. Monday of this week-the first chance we had to give it to you. But on the 6th of this month, when we presented my `state- ment and Dr. Lueck's statement we said "We have preliminary in- formation `and we will have more, and we will get it to you `as `soon `as we can." That was delivered on Monday of this week, 3 or 4 days ago, in full detail, with `all the charts to document the material in the state- ment, `and Dr. Lueck is here prepared to talk about it today. PAGENO="0202" 1346 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Senator NELSON. I have not had a chance to read that. It is difficult enough to read the material that `arrives 10 days in advance. Mr. STETLER. This is a comparison of four brand and generic ver- sions of Chioramphenicol that shows very dramatically the differences that exist therapeutically between these different versions of this drug. Senator HATFIELD. Mr. Chairman, to follow up my question, is this the document that you are talking about that has been handed me- "Supplement to the statement of Dr. Leslie M. Lueck?" Mr. STETLER. Correct. Senator HATFIELD. Will this be presented today in the testimony for the record? Mr. STETLER. He is prepared to do it. Senaitor HATFIELD. I think it is important to have this type of thing in the record, because I feel we have had a lot of discussion-most `of it has been opinion. And I have not read this, because this is the first time I have seen this. But if this is scientific evidence, Mr. Chairman, I think it ought to be a part of our record-whether you read it or not. Mr. STETLER. That is our wish. Senator HATYIELD. May we make it then-accept it as that? Because I have not had a chance to re,ad it. But I think if it is what they claim it to be, it ought to be part of our record. Senator NELSON. I have not had a chance to read it, because it only came in on Monday, and not 10 days ago. So I do not know what is in it. Senator HATFIELD. May I move to accept it as part of the record? Senator NELSON. Well, I would rather wait until Dr. Lueck testified. Senator HATFIiLD. Are you going to read this in your testimony, Mr. Stetler? Mr. STETLER. He is. But he is No. 5 at bat here. At the rate I am going, I am not going to be through today. Senator HATFIELD. Mr. Chairman-let me say, Mr. Stetler, the chairman has-we have pursued these hearings by interruptions, be- cause we have felt it is important to clarify points being made by the witness. But I think it is also the policy of this committee, according to my understanding, that when a witness has not been able to give all of the statements that he has prepared, the committee receives that and incorporates that in the record as if he had given it. Because of time restrictions that we have, it is not always possible to hear all these statements in full. But the chairman has always been very fair in accepting all the written material prepared for this committee, and making it a part of the record as if it had been given. Is that correct? Senator NELSON. My policy has been that if the witness who appears before the committee has submitted his statement in adequate time for me to look at it, and then there is not enough time for him to cover all of it, we have printed the complete testimony in the record of that day's proceedings. I have reserved the right not to put it in if there are some important questions that ought to be asked of the witness. I do not know enough about this statement because it did not come in 10 days in advance. Senator HATFIELD. Mr. Chairman, then may I ask if it is not possible-to me this is the guts of what we have been discussing for a long time-to get the witness on the stand today, for the full in- PAGENO="0203" COMPETITIVE PROBLEMS IN TE[E DRUG INDUSTRY 1347 corporation of this material in our record. Or, may I request that the witness be called back next week, or some future time when we can get this into the record? Senator NELSON. There is no question about that. When I looked at the mass of material that had been submitted, the supplementary documents, and the size of the statements, I told the staff that there was no doubt in my mind that we would never finish this in 1 day. And to be fair to the PMA, as I always have been, we will have them back for several more days if it is necessary-as many days as is necessary to cover all the details of the problems that have been raised. You asked for 3 days, and I have given you 3 days. I am sure we won't finish it in 3. I will be willing to give you 3 more or 5 more, whatever is necessary. Mr. STETLER. Dr. Lueck happens to be from Detroit. He is here today. If we could get to him, I would appreciate it. Senator HATFIELD. Mr. Chairman, what I would like to clarify for the record-if this is what you claim it to be, then in the 3 days that you have before this committee2 may I depend upon the fact that you will get this material before this committee in some form so it can be part of the record, Mr. Stetler? Mr. STETLER. It is before the committee as far as we are concerned. We will be glad to present it any time we have the opportunity. Senator HATFIELD. The point is that I want to see this as part of the record of the committee. If it necessitates your returning again and giving some of your time up for Dr. Lueck- Mr. STETLER. We would be glad to do that. Senator NELSON. All right. Thank you. Go ahead, Mr. Stetler. Why don't you proceed, and at any place you want to summarize or skip, where it is just elaboration, or a point that it is not necessary to go into detail, since the full statement will be printed you may do so and if I have a question at that stage, I will interrupt you at that time.2 Mr. STETLER. Thank you, Mr. Chairman. I would like to introduce the gentlemen that are with me-a little late, but I guess I can do that. Mr. Lloyd N. Cutler, our special legal counsel, Dr. A. E. Slesser, who is the associate director of quality control for Smith Klein & French Laboratories, and Dr. Robert Quinnell, who is on the staff, a physician from the PMA. I want say, Senator, despite what has gone ahead of this, I do ap- preciate the opportunity to come before the committee, and to answer some of the charges made by previous witnesses in the hearings, and to describe how this industry does its job, and, of course, we think it does it well, and how it serves the public health. My statement and the statement of the other witnesses that are scheduled to follow me, not only today, but on November 29, and the third day in December, which we have been promised-it has not been assigned yet-are going to address themselves to the principal 2 See complete prepared statement of Mr. Stetler, p. 1414, Infra. PAGENO="0204" 1348 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY questions that have been raised here, as well as to the other issues which we believe merit the committee's consideration.3 Senator NELSON. Let me interrupt just to say that our problem with the third day is that it appears that Congress may b.e running into December. And if we are-which I think we will-then we will be at the tail end of a heavy session, and going from 10 o'clock in the morning straight on through the day. And I cannot very well handle a hearing under those circumstances because some of the most im- portant bills will be before us. Mr. STETLER. I appreciate that. I think if we just can get across that we have really gotten a lot of people prepared, and there are studies in depth that have been done, that we would like the oppor- tunity to get into the hearing, and whether that is in December or January-just so we have that opportunity. Senator NELSON. You will hare the opportunity if it takes 5 days of hearings or 10 or whatever length `of time it takes, to cover `all the material on all the issues, so `that you won't feel that the industry has been discriminated against. Mr. STETLER. As far as today `is concerned, as you know, as you have mentioned, in `addition to the lengthier prepared statements, we have submitted for inclusion in the record some of the studies_and I am not now referring to the supplemental statement that was just dis cussed-but material that was submitted as of the 6th `of November. We would like to have that made a part of the record `of today's hearings. Senator NELSON. I have not `had a chance to go through all those. I will look at them and see. I do not know how necessary you feel they are. Mr. STETLER. We do think they are necessary, sir, and we would like to have them part `of the `record. Senator NELSON. If they are a useful pai~t of the record, I will put them in. I have not studied th:ose. I don't know what is in them,. Mr. STETLER. There is a lot of material that we have gone to a lot of trouible `and expense to prepare. And I h'ope you will see fit to put it in the record. Senator NELSON. I will put it in. I have not had a chance to go through `it all. But we will put. it in the record.4 Mr. STETLER. They were `submitted on the Gth. That is part of attachments to our statements today. Senator NELSON. All right, proceed. *Mr. STETLER. The PMA witnesses who follow me tod'ay and later will comment in greater detail on some of the points I am going to touch on briefly in my statement We will deal with the issues oE pre scribing and dispensing drugs by their generic names, and will discuss drug prices and profits We will deal with research trends and expendi tures We will discuss the high risk characteristics of the pharmaceuti cal industry and its need to attract capital for growth and for con trnued health progress. `We will also discuss the vital aspects of produc- 3 The statements of Dr. Leslie M. Lueck, Dr. A. E. Slesser, Dr. Leonard A. Scheele, Dr. Hart E. van Riper, and Leland W.' Blarey, originally scheduled for appearance with Mr. Stetler, appear In hearing date, Wednesday, Nov. 29, 1967, CompetItive Problems in the Drug Industry, pt. 5. Material retained In files of committee's record of the hearings. PAGENO="0205" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1 ~49 tion and engineering techniques and quality control in the manufacture of drugs, and the difference that may exist among drug products con- taining the very same active ingredient, but which come from different manufacturing sources. We will set forth the unique importance of the industry's promotional efforts in the delivery of product informatiom to physicians. It is not an exaggeration to say that much of the mis~? understanding that exists with respect to the drug industry arises~ from the failure to distinguish between these different types of manu~ facturers that are now in this business. The company which has the complex and extensive facilities `and the highly trained personnel nec- essary to discover and develop drugs which someone else has not al- ready marketed maintains cost burdens which are reflected in its prices. The noninnovator does not support such effort and therefore does not incur the expense in time and dollars necessary to make com- parable vital contributions to the heal of mankind. Senator NELSON. YOU have 136 members of your association? Mr. SmmER. That is correct. Senator NELSON. Do I remember correctly from your testimony that your members manufacture 95 percent of the prescription drugs sold in this country? Mr. STETLER. That is right. Senator NELSON. Do any of your companies manufacture nonpre- `scription drugs? Mr. STEPLER. Several of our companies do. I might say that as far as the PMA is concerned, we represent them only with respect to their prescription drug business. They are represented by other associations in those other activities. Senator NELSON. You have 136 members? Mr. STETLER. That is correct. Senator NELSON. And how many of those members would you call innovators, and how many are not? Mr. STETLER. I would say that the vast majority attempt to be in- novators. In other words, they do research. They do it with varying degrees of success. But one of the requirements at the present time for admission into our association is that the applicant be significantly engaged in research. This varies obviously with the size of the firm. Senator NELSON. And you do in some of your supplemental material list the new drugs, as I recall it? Mr. STETLER. Yes. Senator NELSON. For `the past how many years? Mr. STETLER. This is since 1940 to 1966-the last 27 years. Senator NELSON. You list some 800? Mr. STETLER. 823 I believe was the. number. Senator NELSON. I cannot recall `from my glancing at your material. Are they li'sted by year? Mr. STETLER. No; they are not listed by.year. Senator NELSON. Would it be too difficult to identify them by year so that we have some picture of the development of innovative drugs? Mr. STETLER. I am fairly confident that is available. I am not going into the detail of listing. But I will check back to see if that cannot be supplied for the record. Senator NELSON. Somebody else will discuss those drugs? PAGENO="0206" 1350 COMPETITIVE PEOBLEMS IN THE DRTJG INDUSTRY Mr. STETLER. Our following witnesses are going to discuss the testing that has been done, the quality control, the research and development, the medical aspects of manufacturing, and production and engineer- ing. The discovery of a new potentially useful product moreover is merely the beginning. It must then be developed, another long and costly procedure which often requires more pople, more processes and more time than the original discovery. This stage requires years of animal and clinical testing, and the submission of a New Drug Ap- plic~tion, plus e~haustive supporting data to the Food and Drug Administration. Because the innovator discovers new compounds and health-saving uses for them that have never before existed, he must be particularly sensitive to, and capable of, assuring purity, potency, and safety through the uncompromising high quality of his product. Quality control and quality manufacture are the sine quo non of the research- oriented pharmaceutical industry. These precise disciplines are in- ~extricably linked with the operation of the innovator firm. Briefly, they consist of indispensable specifications and tests for ~aeh ingredient in the formula, proper design and formulation of the product, multiple inspections and test during processing and packag- ing, final product checks, and the preparation of detailed and metic- ulous records to show the complete manufacturing and control history of each batch, and to enable the manufacturer to trace his products after shipment. Quality firms are well organized to recall with preci- sion from all commercial channels any particular lot of a suspected drug product at any time, or to provide emergency advice as to where a particular drug product can be obtained when needed. Beyond the production process, the drug product, in all its forms and dosages, must be available when it is needed, where it is needed. Through his system of distribution points, the innovator reaches the entire Nation. Furthermore, through the same system, he can cover an emergency within hours in virtually any village, city or county in the United States. No matter what the market situation, his product-in its full line-is there whenever and wherever the physician needs it. Senator, on page 6, where we describe the PMA, I could skip that. I would like to start over on the top of page 8. The pharmaceutical industry as we know it today is very young- less than 30 years old. Within these three decades, we have seen the emergence of a variety of new drugs that have all but revolutionized the practice of medicine--sul fonamides and antibiotics, cardiovas- cular preparations and antidepressants, vitamins, hormones, and tranquilizers-~an impressive array of drug products that have vir- tually wiped out some killing diseases, have shortened the length of the average stay in hospitals, have reduced the space requirements of mental institutions, and have been a boon to doctors everywhere in the practice of their calling. From 1940 to 1966, an amazing total of 823 new single chemical en- tity drugs were introduced as prescription drugs in the United States. That is the listing that was attached as a supplement that you referred to a moment ago. PAGENO="0207" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1351 It does, Senator, in the front of that break them down by year, as to number. Senator NELsoN. I had forgotten that. Mr. `STETLER. At this time, I would like to submit this document, and you have it, for the record, this listing which was prepared by Paul de H'aen who is an authority on the listing of the drugs, and has done it for many years.5 I think this compilation is significant in your reconsideration of this great industry for it shows that the United States originated 502 of the 823 new weapon's against disease and suffering which have been placed in the physician's arm'amentarium in the last 27 years. `Senator NELSON. May I `interrupt for `a moment? You mentioned 823 new weapons against `disease. Were they `all brand new en'tities that treated `some disease in a different way, or were they `drugs that went on the market `although `there was already `a drug available to treat the disease? Mr. STETLER. Well, I am sure they varied. They are single `chemical entities. Some of them replace `a drug on `the market for the reason probably that it was `a more effective product for that particular dis- ea'se. But it does not include the list of combinations or mixtures. They are really the new single entities, innovative type of drugs. Senator NELSON. Is there any claim `by `the industry that in each one of `these 823 cases `the new chemical entity wa's `a better and more ef- fective drug t'o `treat `a particular `condi'ti'on than `the ones `already in existence? Mr. STETLER. No; that is not the claim. The point is merely that each drug is effective for the claims made. As you know, under the Food and Drug Act, that agency does not look at relative effectiveness. It looks at safety and effectiveness. So that there obviously are drugs on the market that-all or several of which treat a particular disease. Senator NELSON. We have had some testimony that some of the drugs that come on to the market are simply drugs that treat a condition for which there is another drug alret~dy marketed that is just as good, or better, than the new drug. What I am wondering is, do you break this 823 down in such a way as to indicate for the record how many of them are new drugs to treat a condition in a new way as contrasted with a new drug which treats a condition in the same way that other drugs in existence already do? Mr. STETLER. Senator, that would be impossible, because of the var- iety in medical opinion, as to the relative effec'tiveness of drugs that attack the same di'sease entity. I am sure you wOuld get one opinion from certain physicians, and you would get varying opinions from others. So this is not really susceptible of that kind of breakdown or documentation. Senator NELSON. You are aware that there are distinguished people in the field of pharmacology who do state, and some have testified, others will later, I assume, that a considerable amount of research is done simply to find molecular manipulations of other drugs. These modifications, which' do the same thing as the original drugs can get their own trade names, when in fact they are not necessary, and do not Material retained in files of committee's record of the hearings. PAGENO="0208" 1352 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY do anything other drugs do not do. You are aware of that assertion, are you not? Mr. S1~mEn. Very definitely. And actually Dr. She~ie, who is here to testify today, when he talks about research, wants to deal in, some little detail with molecular modification, and to show the other side of this situation He will mention some of the very fine products and cures that have resulted from this research which I assure you is not fallacious or flimsy. Senator NELSON. We have had testimony, as you know, that there have been fruitful results from what is sometimes called molecular manipulation and modification On the other hand, we have had testi mony that there is a considerable amount of research which is really aiming at getting another combination of molecules to develop a drug which is not more effective than a drug that is already on the market But the new version can be identified with a brand name, and then. promoted. Mr. STETLER. .Of course, the mere existence of multiple drugs on the market that have a similar effect is not necessarily bad. I suppose if we were to outlaw that, we would eliminate a lot of very healthy coin- petition. So. that there is an economic and a medical aspect to this. question,.both of which are complex. Senator NELSON. I have not suggested that it be outlawed. But.. I think there ought to be some attempt to understand this. Mr. STETLER. I really think that the statement that Dr. Scheele; has submitted, which we will comment on later will help to clarify that. Of the U.S. discoveries, the laboratories of American manufac- turers were responsible for 87 percent. The others came from univer~ sity, nonprofit, or Government sources. The issue of generic prescribing and dispensing-and that certainly has been one of the major issues discussed-a great deal has been. said during these hea.rings about prescribing by the generic name of the drug. I would like the record to `be perfectly clear that the prescription drug industry and the PMA do not oppose the physicians' freedom to prescribe in this way. We believe a physician should be entirely free to prescribe as he wishes, whether by a manufacturer's. brand name, by the generic name with the manufacturer identified,., or by the generic name alone. Senator NELSON I do not think we have had any witness before us who has testified that the physician should be deprived of his~ right to prescribe by trade name? Mr. STETLER. Well, there has been legislation introduced which- at least with respect to governmental programs, like medicare-would. involve compulsory generic prescribing or compulsory substitution if a doctor prescribed by brand name. Obviously, that legislation has.~ not been before this committee. But there has been a close tie-in in.. some of the discussion by people who have advocated that, and some of the theories I think lap over There also has been a misunder standing that our association is strictly brand oriented, and that we are advocates of a compulsory or exclusive brand prescription posture' for doctors. And that is really the point I wanted to make here- that we recognize all three are completely legitimate depending on the circumstances and the doctor's wish. PAGENO="0209" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1353 Senator NELSON. To the best of my memory, we have not had any witness who said that doctors should be allowed to prescribe only by generic name. We have had some distinguished pharmac~logiste and doctors who have said that it is much better medical practice to pre- scribe by generic name, and then if the doctor wishes, to name the brand he wants-whether it is prednisone, Schering, or prednisone, Lilly, or predisone, Wolins, or predisone something else. It is a much better way to practice medicine. But our witneses did not testify that the doctor ought to be deprived of his right to name the company where the generic name drug is manufactured. Mr. STETLER. That is my recollection. In a true generic prescription, the physician delegates to a pharma- cist or nurse the selection of the manufacturing source for the product prescribed. Senator NELSON. The suggestion that generic prescribing delegates to the nurse is new to me. Mr. STETLER. In `some situations, in some areas, `the nurses have some authority that would extend into the prescription drug field. This is obviously not to the degree with nurses as it is with pharmacists. The predominant situation would be that delegation of authority goes to the pharmacist. Senator NELSON. I have never heard of this kind of responsibility being given to a nurse. That is why I raised the question. Are you referring perhaps to a situation in which a nurse may be practicing in a hospital which has a formulary? Mr. STETLER. No, I am not trying to make a big point of this. I am not thinking of a nurse in the situation, where the hospital has a formulary. That would normally be the decision of the hospital phar- macist. Senator NELSON. You agree that whenever a hospital establishes a formulary, you do deprive, for all practical purposes, the doctor's right to prescribe entirely as he sees fit. Now, in all formulary situations that I am aware of, the formulary committee `and the hospital administration says, "Well, if the doctor really wants to prescribe this brand name, he can come to us, and he may be authorized to do so." But as a matter of practice, what you have done is agreed by an evaluation of the drugs through the formu- lary committee that this will be the formulary for the hospital, and maybe 99 percent or more of the prescriptions written by the doctors are written according to that formulary, and it is only the rare ex- ception, when a doctor says "I want to prescribe this brand name." Isn't that correct? Mr. STETLER. That is true. Of course, with respect to a formulary-the word covers a large area. There are all types of formularies, even at the hospital level. I think the important thing to remember in connection with the formulary is that most of them operate at the local or the hospital level, and the decision is a.s to the drugs included on the formulary is made by a therapeutics committee, probably consisting of the doc- tors who practice on that staff, and the administrator, and the hospital pharmacist, that you have got a pretty good formulary in terms of the practices of the men that are going to be governed by it. 81-280-68-pt. 4-14 PAGENO="0210" 1 354 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY But the one thing you mentioned which is important is that escape valve that permits the doctor to go outside of the formulary if he decides to do so I think that is the ultimate saving feature Senator NELsoN. I take it yoU agree that the formulary system, if it is a good formulary, is a sound method of establishing the drugs to be prescribed in a hospital; do you not? Mr. STETLER. We have not opposed it. I `think the formul'ary system has been effective in. many of the* larger hospitals, particularly where they have people with particular competence that can serve on these therapeutic committees, it has been used as sort of an inventory control in some situations to reduce the cost to the hospital. Now, that is not necessarily bad, if it is tied in with the sound medical decisions or drug decisions that go into the ultimate listing of the drug products. But we have not taken a position in opposition to hospital or local formularies. Senator NELSoN. What is your view with regard to the adoption of hospital formularies by practicing physicians or by smaller hos- pitals? In other words, you have a hospital in New York `or Los An- geles that has a large number of patients, and all th~ specialties of medicine practicing there. The formulary is developed by the spe- cialists in all aspects of medicine, along with the pharmacists, and then published for that hospital. What is your view of a smaller hospit~ii without those facilities ~dopting this formulary, or of `t pi ivate practicing physit ian adopting a formulary to use in his own practice? Mr. Sa~mi~R. I think the test really is, and the one that would govern our reaction to your question-if the doctor decides it for him- self, that is, if it results from his independent professional decision, it is agreeable. As far as the decision by even a small hospital is con- cerned, if it really represents the wishes of the doctors that are going to be governed by it, there is no objection to it. If it is something that is foisted on them by the administration, or somebody that cannot Speak for the medical judgment within that hospital, then it is prob ably wrong. Senator NELSON Well, would you agree or disagree that it is a very sound and beneficial approach to use a formulary system and make it available from distinguished hospitals, and to encourage doctors to use a formulary that has been developed by the great variety of special expertise that a hospital has? Mr. STETLEE. I think that depends on the local situation. If, in the opinion of the doctors that are governed by it, it does not impede their practice, or thwart `their individual decisions with respect to drug therapy, then it is a fine, valid procedure. If it impinges on any of those things, then it is probably not good. That means it is going to be difficult to transplant a formulary that happens to work at one particular hospital to every other hospital situation around the country. Senator NELSON. I wasn't suggesting the question compulsion. I was simply suggesting that because there are 7,000 different drugs and 21,000 brands of these 7,000 drugs, it is really hardly possible for a practicing physician to be aware of the best selection to be made unless he is in a very narrow specialty, and only uses a handful of drugs. My question is whether it would be a good educational device, good PAGENO="0211" COMPETITIVE PROBLEMS IN TIlE DRUG INDUSTE~ 1355 for the practice of medicine, and good for the patient. Should not the use of the formu1~ry system be encouraged-not compelled-but encouraged? Would you not solve a lot of problems if the physicians practicing in New York City or Chicago or any place else had avail- able to them a formulary developed by a distinguished group of clinical specialists in all aspects of medicine, so that they could use such a formulary in their daily practice? And, would it not be bene- ficial to the patient? Mr. STETLER. Just commenting on that, I really think the fallacy that exists is the impression that a doctor, any doctor in practice any pla~e~ver gets close to 7,000 drugs. Senator NELSON. I have nOt suggested that. Mr. STETLER. No-I am just commenting on that. Because the need to solve all these problems for a doctor in terms of how many drugs he must be conversant with is not as big as some would indicate. I have a hunch that most doctors in their practice probably routinely use no more than 25 or 50 drugs. I think it would be a good exercise for some hospitals to just keep track of all the prescriptions written by their medical staff in a year, and see how many drug products are involved. I think you could devise a formulary after that that would not be very restrictive, and would probably accommodate the great bulk of the needs or the prescribing habits of the doctors that operate on that staff. And it would not approach anything like 7,000 products, even for a hospital. I am not in disagreement. I am not saying formularies are bad. I think when they are devised and administered, taking into consid- eration the needs, the wishes of the doctors, and it can be done without really leaning on them-then I think it can serve a good purpose for all-for the hospital, and for the doctor, and for the public. Senator NELSON. One of the problems, as you are aware-your asso- ciation and the industry people raise it very frequently-is the re- liability of drugs, the problem that perhaps some of the generic drugs do not meet USP standards. Since a private practicing physician does not have the facilities to do the testing, and cannot always have the consultation of distin- guished specialists, there may very well be a tendency for him to stick to a drug priced far higher than it ought to be, when in the hospital formulary they are using the same drug at a fraction of the cost. And from a patient~s viewpoint, in terms of cost, the doctor is charging this patient much more than the patient ought tO be charged. The doctor may not be aware of the alternative drugs, or he may be con- cerned about prescribing one that he does nOt know, whereas the hos- pital may be using generic or trade-name drugs that are much cheaper. This is one pa~rt of the question I am getting at. Mr. STETLER. I am going to get into that in a little bit. There is no question in our minds~-there are valid and serious differences between drug products, and just because they have the same generic name, you cannot equate that with therapeutic effective- ness. That is a little bit of a side issue. But it is certainly germane to the point. I would also say I am sure there are individual and I hope rare situations where a price disparity might be handled by a knowledge- PAGENO="0212" 1356 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY able formulary committee to the advantage of the patient and the doctor. But nobody should get so enthusiastic about price that they override the medical judgments of a doctor because he happens to practice in a hospital that has a formulary. I do not think you are suggesting that And that is all I am trying to say. That is the element that ultimately has to be preserved. Senator NELSON. This dispute about therapeutic equivalency and clinical effectiveness, and so forth, keeps being raised all the time. The reason I raise it here is, if we had a formulary, I doubt if there would be very many doctors, if any, in the United States who would prescribe a prednisone that cost $17.90 to the pharmacist, which would be about $27.28 to the consumer, depending on the fee, when an equiva- lent drug is available at $2, or $1, or even at as little as 75 cents. This is what bothers me. The Medical Letter, on the basis of chemical tests and opinions of a distinguished group of authorities consulted around the United States, flatly asserted that the 22 pr~dni'sones `they tested are equivalent. Really it would be a shocker to me-and more of a shocker to some poor person who is on social security-if he found that he pays $25 or $26 for a hundred prednisone tablets when therapeutically effective tablets are available according to the Medical Letter, at $2 a hundred. This is what shocks me. Now, if there were a formulary-I doubt whether there is a physician in America who would be using Meticorten at $17.90, when they can get Merck's at $2.20. Mr. STETLER. A comment on that, Senator. As you know, from previous, testimony that was presented, the feeling does exist, and I share it, that doctors should be permitted to make the decision on the drug But-I am sure this is not an appealing statistic to one *of our members, Schering-but, nevertheless, their share of the market on prednisone has gone from a hundred percent down to 5, so absent the formulary-they apparently have decided on their own to either write for a generic product or for another brand. So. the free forces of our economy, and the knowledge of doc:tors about not just medicine, but economics, have in a large extent taken care of' the prednisone differential. As far as the Medical Letter is concerned, they have not said that based on their testing, they have found therapeutic equivalency be- tween the products they looked at. One other thing There are prthably 75 or a hundred manufacturers of predmsone, and if a doctor were to write generically, neither he nor the patient would know whether they are getting one of the products from the 21 who they found chemical equivalency for, or the other 50 that nobody has bothered to look at all. But the Medical Lette.r does not talk in terms of therapeutic equivalency. Senator NELSON. What they do is just to reach a flat conclusion, which is just as good. "The great price spread-purchased from different pharmaceutical companies suggested the desirability of prescribing by generic name, and specifying that the prescription be filled with low priced predni sone tablets." They just flatly reach the conclusion that they are equivalent. PAGENO="0213" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1357 Mr. STETLER. They have reached a very broad conclusion, if they have made it based on the testing they did. Senator NELsoN. I suppose what is proper to say about it is that if there is any evidence they are wrong about it, the evidence ought to be presented. Mr. STETLER. Well, that is what we are prepared to do. Senator NELSON. But if you have a formulary, you would not be paying $17.90. I am not picking on any particular company. I think I can find a case like this in almost every company manufacturing trade names. Mr. STEPLEEt. I doubt that. But in any event, as I say, in 95 percent of the cases it has been taken care of, because they only have 5 percent of the market. Senator NELSON. There is another company charging $17.88. Mr. STETLER. They are not charging $17.88. You remember when ;Schering testified the average price they reported to the committee was considerably less than that. There is a disparity, however. Senator NELSON. We also referred to the Red Book and used the Red Book figure. When Schering testified they said that subsequent to the last publication they had reduced the price. Well, it doesn't matter. It is off a dollar or two. We took this from the Medical Letter, and the Medical Letter was June 2, 1967. Mr. STETLER. Are you interested in some comment on that particular thing? Senator NELSON. We would be glad to have it. I was thinking of prednisone where the manufacturer said the price we list is not the price charged to the pharmacist. They said there was another Red Book coming out. Mr. STETLER. I wondered if you wanted any discussion of any length on the study done by the Medical Letter on prednisone. Senator NELSON. Yes; go ahead. Mr. STETLER. Could I ask Dr. Quinnell to comment on that? Senator NELSON. The time is now 12:20. Why don't we hold that question and resume with it after lunch. Senator JAvITS. Mr. Chairman, I would like to ask a couple of ques- tions before lunch, if we could lay prednisone aside momentarily. May I ask you this, Mr. Stetler. Would you agree that what the problem here is, is that there is some kind of a cabalistic mystery about what a doctor writes in a prescrip- tion. Hence, it is not as though the patient went down to a department store and shopped competitively with a supermarket or the drugstore, a large drugstore, where he might buy notions and other things that he knows about. But if Dr. A says-this particular kind of a product- he is scared to death to take any other. The c&uestion that I would like to ask you is this: Isn't it really the duty of the industry to put competition on a basis on which it exists in most other elements of American business- where the consumer can buy any brand of product that he wishes to? He doesn't have to buy percale sheets, other than Burlington, if he doesn't want to. But he can, because he knows that percale sheets are percale sheets, and they are made with a certain kind of denier, and a PAGENO="0214" 1358 COMPETITIVE PROBLEMS IN THE DRuG INDUSTRY certain kind of weave, and a. certain kind of cotton, and the rest is up to him. Now, what is your comment on that ~ We talk about formularies and compendiums and so on. But isn't, that really the essence of the thing? That is what this is all about? Mr. STETLER. Senator, if we were-if we could-and I make the point right at the beginning we cannot-if we could be sure that all of the drug products that are on the market were safe, effective, and if they bear the same generic name, that they are equivalent thera- peutically, then a doctor could with freedom and ease and safety write generically and permit the prescription to be filled by any drug the pharmacist carried. That is not a fact That assumption cannot be made today in this country. And I doubt, frankly, given the varying credentials of man- ufacturers and the way they do their job, that it will ever be made validly. But I do not disagree with your basic premise, and that is that the people that make the decision as to what drug they are going to finally purchase, whether it is the patient or whether it is the doctor as the agent for the patient, has to knov~ more about the prices that exist for the products that he is going to prescribe. He has to make that decision first on the, basis of known therapeutic effectiveness and a quality source. Bu.t assuming there are multiples that fill that r~quirernent, he should know something abopt price, and he should help the patient save money. We say that in our statement, and we are sincere about that view. Senator JAVITS. Dr. Goddard-and I am obliged to the chairman for this, and the minority counsel, Mr. Grossman-testified as follows on page 768 of the record. , This was in answei to a question by Senator Scott Senator Scott asked: At this time your agency cannot assure physicians th'it the chemic'il equivalent drugs now on the market are therapeutically equivalent But is it not a fact that you are working toward that end, that you are seeking to be able to do that? Dr GODDARD Yes sir I do not think anyone can provide absolute assmanee that the therapeutic equivalency exists for, every drug in the marketplace. But by the same token I have not seen any good evidence from any firm, large or small, that their drug is superior to anybody else's. I hear the statement., made time and again. I have challenged representatives from firms who have made this statement to show me the evidence that its drugs are superior Generally now we are talking, you understand, from the pre-1962 drugs where' effectiveness did not have to be prOven. Now do you have any comment ~ Mr STETLER I have a very specific comment on that I cannot recall when Dr Goddard made that statement But some of the discussion that has gone here a little earlier today- Seiiator JAvITS The 10th of August Mr STETLFR We have stated that we have today, and the material has been given to the Food and Drug Administration, that on a veiy significant product, chlorampherncol, these tests have been made, FDA has had them, the preliminary results, for sevei al weeks, they now have all the results, and so does this committee Now, we are prepared to discuss it. But it was deèided earlier today that the committee has not had a chance to review it. But whenever PAGENO="0215" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1359 the committee is ready for it, we are prepared to discuss it in great detail. Senator JAvITs. Dr. Goddard testified to the same thing on Novem- ber a-practically the same words. Mr. STETLER. He has had this material in his hands before Novem- ber9. Senator JAvITs. This is all lost in the whole forest of the fact that you submitted highly complex data on one product among many, and he has got it, and everything is hung up in long discussions. I was a lawyer long enough to know how this can be done, and business can go on as usual for decades. Some cases are still pending that I had before World War TI-not in this field, but in others. What I would like to ask you is this: Is there any plan to be affirmative and constructive that you can bring in, if we give you time to do it, which would try to make a better competitive situation than-and I think the word "we" is not inappropriate-certainly I think so-exists today? What about an industry plan which will give the public a better break so the public can have more weight in the decision than in my judgment-I won't join anybody else with me-it has today? I am all for your innovations, and I am all for profits. I am very straight about that. I don't want to thwart you in that. We don't expect you to give the stuff away. But I think that the competitive result of letting the buyer make the decision on some concrete base which either the Government or the industry will establish will right the competitive situation, and you will not have these extremes, which seem ridiculous to me, too, of one outfit selling prednisone at $2 and another outfit at $17.88. I cannot believe that competitive advantage is warranted. I am just a reasonable fellow buying it at the window and paying for it. So I would like to ask you that-to answer it now or answer it later. But I think the industry ought to think through the deep complaint here. And I will tell you one thing. Something is going to happen. There is just too much evidence on this to let it stand as it is. Now the question: Isn't it better if the industry can come in with a recommendation as to what is the best thing to do to right a serious competitive situa- tion? And I think a serious competitive situation exists. It is very unfair to some that the public cannot tell between the fellow that charges $2 and the fellow that charges $17.88, just because the doctor writes cabalistic symptoms on a prescription. Mr. STETLER. Well, I will comment on that briefly. Obviously, that is a big order. The point about how the doctor prescribes and the fact that it may seem complicated, is justified because of the fact that regardless of what Dr. Goddard said just a week ago, these variations do exist, and a doctor cannot safely write his prescriptions generically. Now, that does not get to your economic question, I agree. But you have to start there. There is a serious problem there, and it can- not be solved. The economic question cannot be solved just by generic prescrib- ing. We are not at that stage yet. Whether we will get there, I don't know. PAGENO="0216" 1360 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY But absent that-I think that we should, and we are willing to try and devise a system. But when we talk about the economics of drugs- we cannot start or stop at manufacturers' prices. We have to be pre- pared tO talk about it up and down the line, because ultimately we are talking about the price paid by the patient. So we have to examine the elements of this whole distribution sys- tem. The pharmacist, the wholesaler, and manufacturer. Now, to the extent there is inadequate price information available to anybody that makes that decision up and down the line, we think he should get more information. We think he should have more in- formation about manufacturers' prices, and we think the public and the doctors should have more information abou:t retain prices. When he gets this, he is going to be able to make a more intelligent decision. Now, how this is done, I don't know. Getting this information around and making it available is not a simple proposition. But we definitely would like to be a party to the discussion of how that could be done most effectively. Senator JAVITS. I don't think I .quite got my point across to you, from your answer. My point isn't that I want to take surveillance over the distribution costs, advertising cost, research cost, and so forth. I want it to be a matter of private business decision. * But what I say is, Why can't a fellow who goes into a drugstore, or a doctor who prescribes, the minute he says predrnsone, then the patient knows and the doctor knows that he cannot possibly get a product from the pharmacist that does not meet certain minimum standards set by the FDA or by you people- Senator NELSON. Senator, he can. Senator JAVITS. Just a second-which qualifies for prednisone. Now, if the doctor says, "Look, there are lots of prednisone. They all qualify technically. I don't like most of them. I like this one. I want you to have this one." The patient would prthably do it. But, nevertheless, having that concrete base that anything marked "prednisone" is illegal unless it meets certain minimal standards, the competitive situation will bring down these inordinate disparities in price. The question I asked you is, Who do you want to do that-do you want the industry to do it or the Government to do it, and if you want the industry to do it, what kind of a plan have you got? Mr. STETLER. Obviously, we want the industry to do it. But could I just say that the premise that you state with respect to prednisone is not right. You cannot say today that the hundred sources of predm- sone on the market are all in compliance with Government standards. Senator JAVITS. Let me interrupt you.* I am not saying it today. I am asking you, How do I get to the point where I can say it? Mr. STETLER. I suppose we get to that point when we can say that all manufacturers of drugs at least meet some kind of standard as to expertise of their employees, adequacy of their facilities, know how, and some consistent way to assure that on a day-to-day basis they utilize the facilities and the people they have in the proper way. Now, we don't have that today. PAGENO="0217" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1361 I realize an effort is made through the FDA and the Food and Drug Act to attain this. But it doesn't exist today. And this is not critical of the Food and Drug Administration. Senator JAVITS. I am sorry, sir. You and I have one point that we don't see eye to eye. All I want to know is that the end product meets a certain standard when tested. I don't care how he made it. If he has a better way to make a mousetrap, bless him. If his employees work 8 hours instead of 81/2, that's his business. Performance is the only thing I care about. I don't care about all the other things you talked about-except I ask you, How do you get to the point where if a person goes in and buys a particular item that is designated by a particular name-not a trade name, but a generic name-that he knows at least it meets such and such minimum performance standards? That I think is the real issue. Mr. STETLER. I thought I was being responsive to that. Maybe I am not. I am interested in performance, too. But you don't get perform- ance in the drug industry unless you have the other ingredients. Senator JAvITs. .That is not our business or the consumer's or the Government's business. Mr. STETLER. It may be the Government's business in this way. In our present Food and Drug Act, we anticipate that the FDA can do a continual surveillance on whoever is in the drug manufacturing business. Now, we don't look initially at the credentials of people that are in the drug business, and given the number and variety of people that manufacture drugs, we burden the FDA with an impossible situation,. in my opinion. At least to that extent, maybe we ought to look again at what the Government might do properly in terms of the credentials, first of all, of the people that manufacture drugs. That will get down. to the end process, the end product. Senator JAVITS. All right. I think we have made our respective points of view clear. I don't think they are necessarily parallel yet. I would like to ask just one other question. You have talked about a formulary. We have been up and down that track. What about this compendium? Now, are the industry and Goddard together on getting this out~ He says it will take 18 months and you people think it will take 2 years. Well, that's not too much difference. Are you people and Goddard together in getting that out, and if not, what's holding it up? Mr. STETLER. May I have a moment to discuss this. This has a little history to it. This discussion of a compendium has gone on now for two and a half years. It was initiated at that time by the Food and Drug Administra- tion when they asked representatives of the PMA and the American Medical Association to consider the possibility of eliminating the pack- age insert that is now a regulatory requirement with respect to drugs and substituting a compendium. Those discussions broke off. They did not get very far along because Mr. Larrick, who was then Commissioner, indicated that such a corn- PAGENO="0218" 1362 COMPETITIVE PROBLEMS IN THE DRUG `INDUSTRY pendium would have to be in existence for some time before he `would entertain the idea of discontinuing the package inserts. More recently, the Drug Research Board of the National Academy of Sciences has had for the last year or 18 months a series of meetings with interested parties. That is riot just tIre FDA, and it is not just the PMA. It includes the American Medical Association, the Ameri- can Pharmaceutical Association, the American Society of Hospital Pharmacists. Those conferences have been held to answer five or six specific ques- tions. Is an additional compendium Uecessary-and mind you, there are compendia now on the market and available. If it is necessary, what should its format be? Should it be published by private sources or by the Government? What is its estimated cost, and how should it be financed? Now, despite the fact that Dr. Goddard sincerely believes that all these questions have been answered to everybody's satisfaction, they have not to the satisfaction of most of the parties involved and they have not been to ours. We have a serious question as to whether or not existing compendia, such as the U.S. Pharmacopeia, the National Formulary, New Drugs, put out by AMA, or the Physicians' Desk Reference, possibly could `be revised to make acceptable document for the physician. I have been personally at every meeting that has bene held by the Drug Research Board on this question. I know the nature of the dis- cussions. I have yet to hear what the doctors think about this proposed com- pendium. I happen to believe, in view of my past employment, that doctors are not in agreemnt with this compendium as now proposed. And I think, since we are talking about a tool for physicians, the best thing we could do is ask the doctor-What do you need or what do you want in the way of a compendium? They are not, despite what was said last week, in agreement that this compendium should be initiated. Frankly, if we are going to be asked to pay the bill, we think we should have the answer to such things as, What is the format of this book going to be; are all drugs going to be listed; are they going to be listed generically; is there going to be a classification for a group of therapeutics; how are they going to be handled? Will all dosage forms be accommodated or not? Now, I know that the objection to the PDR is that it is a document paid for by the industry. In other words, these are allegedly ads put in this book. Senator NELSON. They are ads; aren't they? Mr. STETLER. They are paid for. But they are labeling-that is why these "Dear Doctor" letters have gone out. They have got to comply with FDA regulations. Senator NEr~soN. Just to have it clear-they don't go in the PDR unless they are paid for. Mr. STETLER. That's right. I am not denying that. Senator NELSON. So it is a paid ad. Mr. STETLER. If PDR is vulnerable for that reason, would any com- pendium be Suspect if industry paid for it? PAGENO="0219" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1363 I am wondering if possibly the material in PDR could be made ac- ceptable if in every instance it had to be FDA-approved language. Senator NEI~soN. You are aware, of course, of Dr. Goddard's pro- posal which he has discussed casually a few times-once before this committee-that he would like to see the publication of a compendium financed by industry. And if you have a compendium, he would waive the requirement of the package insert which costs $5 million a year; and then that $5 million would be spent by the industry on the com- pendium. His further comment was that he would like to see it done by PDR, because every doctor is familiar with it. The compendium should list all the drugs by their generic name, use, side effects, the contra- indications, and then list the companies that manufacture the drug. * All of this would be done with FDA approval. This, I think, is a rough statement of his position. And if publishing it and keeping it up to date regularly would cost $5 million, as Dr. Goddard estimates, the industry would break even on the cost. Mr. STETLER. Both of those figures, of course, are pure guesses. Senator NELSON. Correct. I said "if he is correct, they would break even on the cost." Mr. STETLER. Obviously, one point I think we should be interested in, and you, too, as asponsor of a bill-What would the doctors want in the way of information on drugs? I think that is the main point- one concerning which we would like to hear more discussed. Now, I don't think whether it is $1 million, $2 million, or $5 million we would be interested in paying for a book if it is going to be a futile exercise and not of use to the doctor. Senator NELSON. You say you want to know if the doctor is inter- ested in such a compendium. These discussions started with Mr. Larrick two and a half years ago. Haven't you been able to find out in the last tw~ and a half years what doctors might want? Mr. STETLER. I happen to think that the doctors don't want this compendium. I realize you heard testimony last Thursday to the contrary. But let's hear from the doctors. I think they do not want this compendium. If they don't, I don't see why we should put up $5 million to pay for a useless book. Senator JAvITs. What about the millions of consumers that pay the bill? Mr. STETLER. This book would not be for the consumer. Senator JAVITS. Wouldn't it help the consumer in the sense that you have a group of doctors advancing through medicare and many other ways in which the Government pays doctors-which would have to use this book, and the way it should be used, on a competitive level? In other words, if you don't prepare it at all, this thing will never get off the ground. I am considering, as you have heard, to join the Chair in a piece of legislation. Then we will have some hearings and find out what this is really all about. Mr. STETLER. I happen to think that's exactly what you should do. I think there should be a bill introduced and I think there should be hearings, and everybody should be allowed- Senator JAvIT5. Good. And if the doctors have an objection, they should state it, and especially,, why. PAGENO="0220" 1364 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Mr. STETLER. I think there should be hearings. Senator JAVITS. I think that's extremely helpful. And probably any proposal on this subject would come to the Labor and Public Welfare Committee-thus giving us a chance to get at it. Senator NELSON. The point the Senator makes is a very good one from a consumer's standpoint. I am not frozen into any position as to what I think ought to be in a compendium. But one item that might be in there-I think the Senator would be interested-is the price of each drug listed, and, of course, FDA must be equipped with the per- sonnel to properly inspect plants and assure quality control. If you did that, when a doctor opened up the compendium and found 22 pred- nisones, or 50 or 75 reserpines listed or something else, he would know that FDA has quality-control checks, that all drugs meet lISP stand- ards, and that FDA has given them all a stamp of approval.. I think the doctor would be pretty likely, unless he had specific clinical expe.rience that somehow would persuade him otherwise-to look at that com- pendium, see the FDA approval, have confidence in the quality-control program that is being supervised, and prescribe the. drug that is most economical for the patient. I suppose that the industry would object violently to that, because they like to get into the marketplace and advertise, and even after the patent runs out have so imprinted the name of the drug in the doctor's mind that he is going to prescribe it even though there are equivalents on the market. I don't blame the companies for that, but that, in fact, does happen. Mr. SlIER. Senator, you know from our statement that we have made the point, and I make it very sincerely, that I think more price information should be made available to the doctor an.d to the public. I know you have written to a lot of people and a lot of companies to ask about their views on a compendium, so that a bill could be per- feeted. But on this issue of price-~and I want to tell you I am not op- posed to price information being distributed. But consider for a minute whether price is a proper ingredient of a compendium.. Are we talking about manufacturers and retail prices in the com- pendium? If the former, would the prices of the hundreds of manu- facturer~ that are in this business be shown.? If it is retail-I don't know how we could keep up in a compendium with the day-to-day, store-to-store differences in price or how it would be shown and kept up to date. Senator NELSON. As I say, I don't have a rigid position on that, be- cause I don't know. It is worth cofisidering. And, `as you are well aware, under the present law no prescription drug can go onto the market in America and comply with the law unless i.t complies with lISP standards. You shake your head? Mr. CUTLER. I am shaking my head, sir, because while it is .a vio- latioii of law for drugs to go on the market under those circumstances, the FDA is in no position to assure that it does not happen. It can and it does happen. For example, the FDA today has no inspection or registration pro- cedure for foreign plants-a very difficult problem, of course. But they don't. They don't have any idea whether those drugs entering this country do meet these standards, except on a spot check basis. PAGENO="0221" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1365 Senator NELSON. You should have been nodding your head. You are saying exactly what I said. Mr. CUTLER. It is a violation of law. Senator NELSON. I said under the law a prescription drug may not go onto the market in this country unless it meets US? standards. And if it doesn't, it is in violation of the law. Mr. CUTLER. That's correct. Senator NELSON. You just repeated what I was saying. Mr. CUTLER. We are quibbling, sir. Senator NELSON. I am not quibbling, you are. Mr. CUTLER. It can get onto the market even though it violates the law. Senator NELSON. Under the law a prescription may not go onto the market in America unless it complies with US? standards. If it doesn't, it is in violation of the law. Do you agree with that? Mr. CUTLER. I agree with that; yes, sir. Senator NELSON. That's exactly what I said. So there are some problems. One of them is whether or not there is adequate plant inspection. The Chair is well aware of that. We have had many witnesses long before you came here on this exact point. The question is to be sure that the inspection is adequate to assure that only high quality drugs are on the market. Everybody wants that. If the manufacturer cannot meet the standards or won't or is not equipped to, I am the first one to say we ought to close his business. One of your major members had his business closed up by the Government 3 years ago. Mr. STETLER. Senator, that plant was closed voluntarily by Squibb, not ~ the Goveiument. Senator NELSON. It was after a very tough report by the Govern- ment. Mr. STETLER. But it was not closed by the Government. Senator NELSON. In any event, if `drugs mee~t USP standards, and you have had adequate inspection, then you are all set. I think you probably need some support from PMA that will increase the inspec- tion capacity of the FDA. Do you support a big expansion of their inspection program? Mr. SlTmmi. We have supported their request for appropriations for additional inspectors, and think they should be given more of the tools to do that job. Senator NELSON. Good, I commend you for it. I think that is part of the problem. Mr. STETLER. Me, too. Senator JAvITS. I hope you will understand my point. I want to see a compendium or call it what you will where the whole list' of avail- ability is there. But when the name "prednisone" appears on a product, whatever else appears, how much advertising they do-it is all private enterprise. When the name "prednisone" appears on a product, that it is a criminal offense if it does not meet a minimum standard, so that the patient knows when he takes a tablet marked "prednisone" somebody is guilty of a crime if it does not at least meet a minimum prednisone `standard. I think if you did that, the marketplace would take. care of not all the rest but mostof the rest. PAGENO="0222" 1366 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Mr. CUTLER. May I say one thing on that? I don't know of a product-you spoke earlier of your vast business experience, which you certainly have, and your legal experience. But I don't know of a single product, no matter how many Government standards there are, as to which the buyer of that product, be he a giant corporaton or an individual, does not make a judgment in the market based both on quality and price. There are differences in quality among products that meet some minimum Government standards, be it steel, automobiles, bourbon whisky, anything you mention. The problem we face-and it is a real problem-you have your finger on it-and that is the judgment for a drug as to quality really cannot be made by the patient-it must be made by the doctor. At the same time the doctor is not spending the money. So the doctor may be more indifferent to price than he should be. But that is our dilemma Senator JAVITS Well, that is not my dilemma My dilemma, as a Senator, is to get the Government to lay down a standard foi prednisone You can claim X is better than Y But I say if a patient knows that anything he takes, that his doctor prescribes, or however he gets it- if it says predrnsone, he is getting a basic minim'd p1 oduct that the U S Government says satisfies a basic minimal standard for pred nisone That is in my judgment the reason for the competitive base And I think it is the same i eason you have the FDA-because this i~ a business in which the individual cannot himself judge that the minimal standard is met And I think-for myself, I think if that happens, then you would be well abreast of dealing with this ~nd still leaving a very large field for private enterprise. Mr CUTLER On that we fully agree Senator NELSON. I might say, that there is a Government ~tandard,. and it is not a minimum, it is a maximum The drugs have to meet the USP standards The drug industry, pharmacologists, physicians, and so forth, consult and establish highest standard possible for every drug and it is a criminal offense to violate the standard So if there is a problem, the problem is on surveilhince of the maiket place. Senator JAvirs And setting it down somewhere where the consumer can see it That is why we are talking about this compendium That is what I `am talking about. Senator NELSON We will recess at this time and resume at 2 o'clock (Whereupon, at 1 p.m., the hearing was recessed until 2 p.m., the same day.) AFTERNOON SESSION Senator NELSON. We will resume the hearings. STATEMENT OP C JOSEPH STETLER ET AT -Resumed Senator NELSON. Mr. Stetler, were you on page 10? Mr. STETLER. Yes. Senator NELSON. As I said, if there is any place where you want to~ summarize or skip, you go ahead and do it. Since you did prepare a summary, you are a better judge of what you might want to skip~. PAGENO="0223" COMPETITIVE PRO]3LEMS IN TUE DRUG INDUSTRY 1367 Mr. STETLER. What I have done on my copy is bracket out para- graphs. I am going to be skipping through. If you want me to answer a question just refer to the page- Senator NELSON. If you do, just let me know. I may have some questions. Mr. STETLER. Should I proceed, Mr. Chairman? Senator NELSON. Go ahead. Mr. STETLER. We also believe that, in prescribing, doctors should supplement their medical judgments and decisions regarding drug quality and effectiveness with considerations of cost to the patient. If the doctor believes that two manufacturers market drug products of substantially identical therapeutic effectiveness and quality, he should, of course, prescribe the less expensive one for his patient. I would like to say a further word on the subject of prescribing by using the generic name of the drug. While we favor the right of the doctor to prescribe as he wishes, we emphatically disagree with the assumptions and statements advanced by certain earlier witnesses be- fore your subcommittee that generic and therapeutic equivalenóy go hand in hand. Senator NELsoN. What do you mean by that? Mr. STETLER. You can have'equivaleney in terms of equal content of the drug, and you may have chemical equivalency, but that is not the whole problem. Yoñ have to detei'mine whether or not the drugs act the same way in the patient, and that is how we refer to therapeutic equivalency. Senator N~soN. All right. Mr. `S~ETLER. As has been pointed out in papers by a number of lead- ing physicians and pharmacologists in the previous testimony before this subcommittee, th~ term "generic equivalent" refers only to the name of a drug product and does not necessarily connote its safety or therapeutic effectiveness. Although two drug products may contain, or are supposed to contaii~i, the sa~ne amount of the same active in- gredient, this provides no assurance that both products will produce the same clinical effect in any particular patient. Senator NELSON. Are you going to give sOme examples where two drugs did in fact meet [JSP standards and they were not therapeu- tically equivalent? Mr. STETLER. Yes, sir. That is the thing we talked about this morn- ing, and the thing I really am alluding to in this next paragraph. Two of our witnesses scheduled for today-Dr. Slesser, who is sup- posed to follow me, has an extensive indication of published data in this regard-and then Dr. Lu~ck who has submitted the supplemental statement, has the results of some very specific testing on the product Chioramphenacol. Between those two presentations I think we will have provided you with a considerable amount of evidence in that field. Senator NELSON. My memory is that Dr. Miller, Director of the IJSP, took the position that `there are only about a dozen examples of drugs which meet USP st~tndards and are not equivalent. Mr. STIETLER. Dr. Goddard made that statement in his `testimony-- yes, sir. Senator NELSON. In testimony before this subcommittee, Dr. Miller stated: PAGENO="0224" 1368 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY The important point, however, is that not more than a dozen drugs have presented problems with respect to physiological availability. Thus to damn the entire Pharmacopeia of some 2,000 drugs for the failure of a mere handful is unseientific in the extreme. As I understand his statement it is that drugs that meet USP stand- ards are equiva'ent, and that, to! his knowledge, there are oniy a dozen proven cases of two drugs meeting TJSP standards and having different therapeutic results. Mr. STETLER. I think ybu are entitled to that conclusion from what was said But I think really what he said is that~-he estimatesr-12 drugs where there is proof of lack of equivalence But the burden has alwa~ s been shifted to the proof of lack of equivalence Nobody has come up with proof of equivalency This is a very spurious assumption that. is made because TJSP has standards. Whether or not they exist, whether or not they are followed, and what they mean in. the final analysis in terms of therapeutic effectiveness is still a question Now, he talks about 12.1 think Dr. Goddard and FDA! are currently testing about 50 products We have some others here that we will talk about when we get around to it. But the important thing which cannot be. forgotten is that there is not absolute proof of effectiveness for the 3,000 products There is lack of proof of therapeutic equivalence for maiiy or most o~ those products It is a question of where the burden of proof lies in this matter. Senator NELSON. But I would suggest that if Dr. Miller is right, tha!t there are about 12 proven cases-not just testimonial's_proven cases, that the burden would rest, it would seem to me, in my approach to the matter, on those who say that this is not the exception that tests the rule. Now, if it is the other way around, that the bu~den is on lISP to prove that if they meet lISP standards they are thorapeuticaily equiv- alent, the doubt that is cast is cast equally upcn all brand flares and all generic names. So what you have done is eliminated the whole argument There is no use in pressing the point at all, because since you do not have any evidence to the contrary, there is no basis for selecting one drug over another, brand name or otherwise, since there is no positive proof that they are equivalent-you would end up just a guess anyway. Mr. CUTLER. If I could just say' one thing,! Senator. A new drug under the food and drug law--and most of the ones we are talking about I think are new drugs-must be proven to the satisfaction of the FDA to be safe and effective You cannot have your New Drug Appli cation approved if you offer evidence! that there is no proof that it is unsafe or ineffective You cannot get by with a double negative You must prove the positive And many of the drugs that you are speaking of, particularly those developed by the innovative manufacturers, have survived that test. ! Under the 1962 law-they have been proven to the satisfaction of the FDA to be `safe and effective. Senator NELSON. Yes. I do not quarrel with that. So if you take any of the drugs to which the 162 statute applies, and the compounds on the market manufactured and produced by 20 companies meet tSP standards, they are considered to be safe and effective. PAGENO="0225" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1369 Mr. CUTLER. But oniy one. submitted proof it was safe and effective. The other 19 did not. And the FDA did not find proof that the other 19 were safe and effective. Senator NELSON. Are you talking about the case where a New Drug Application is approved and the company licenses 19 other companies to manufacture it? Mr. CUTLER. No, sir. Mr. STETLER. That could be one situation. But whether you have a licensing arrangement or not, the ones that come later with an identical or similar product, are not necessarily required to have proof of clinical effectiveness of their products. You cannot assume just because the first one who processed the NDA has proven up all these things, that everyone who follows has the same capabilities or that their drugs have. One other thing on DSP. We have talked about 7,000 drugs today. You know, TJSP only includes 600 drugs. So there is a question of coverage-even if you make the assumption, which is not valid, that because DSP standards are identified, that you have the therapeutic equivalency. Mr. GORDON. Dr. Modell says that if the drugs have the same chemi~ cal components, and they do meet DSP standards, then the assumptiol has to be made tha't they are clinically effective. I do not want to get the two terms mixed up-"effective" and "dm1- `cally equivalent." Mr. STETLER. There is a good deal of difference between clinical equivalency and therapeutic equivalency. Dr. Modell may have said that the assumption can be made. The assumption does not have to be made and really should not `be made, in our opinion. Mr. Gortr~oN. Dr. Garb says you cannot practice medicine unless `you make the assumption that when a doctor'prescribes something here or in California, or this year, or `20 years from now, that drug is the same-otherwise you cannot practice medicine. Mr. STETLER. I think the doctors that prescribe generically ~robab1y make that assumption. But you reaii~e that `in 95 percent of the cases the doctor either prescribes by brand name or indicates the source. So he has not'made that assumption. He practices medicine in'95 percent of the cases not making that assumpthn. ` This is a statement in DSP: The term physiological a~aila'bili:ty connotes an `attribute of dosage ~orm of a drug that constitutes a measure of the extent to which the active' ingredient is taken up by the `body'~n a useful form. Progress has been slow in developing methods to measure physiological availability that would be suitable for. USP use. "Consequently, however desirable it is to gice assurance or complete avail- ability to every patient requiring the USP article, th'e problem of providing objective standards and methods remains in the exploratory stage at this time. The NF has the same paragraph. I do not mean to say that Dr. Miller has made `a misstatement. And we have no quarrel with the DSP or NF'. It is Just that while it is an easy transition to make from DSP standards to therapeutic equivalency, it is a faulty one, and one which we think should not be made. ` Senator NELsoN. Correct me if I am wrong about this, If a New Drug Application is approved, its approval is based upon the testing that has been done by the applicant, in compliance with `the 81-280-68--pt. 4-15 PAGENO="0226" 1370 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY law, on animals and humans, and substantial experimentation to demonstrate that they have gone through all the steps to prove the safety and efficacy of the drug. Then the New Drug Application is approved. Am I correct thus far? Mr. STETLER. Senator, you are absolutely right on the first New Drug Application. But somebody else can come along later, file another New Drug Application for the same drug, and on the second, third, or fourth time around, a New Drug Application can be approved with less than all of the data you have described. Animal toxicology, animal testing, clinical investigation to the same extent may not be required the second time or third time around. The first one has met all these requirements. The latter ones may or may not have, and probably have not. Senator NELSON. If I recall the law correctly, this matter is in the discretion of FDA. In other words, X may be granted a New Drug Application after he submits all the extensive tests. Then this drug is in the marketplace and extensively used by the clinicians, and they have not developed any contraindk~ations or bad side effects, and find that it is effective and valuable. Thus, you have developed a whole body of medical knowledge about the drug. At the stage that the FDA is satisfied that the tests that were sub- mitted in fact' prove that a drug is effective `and valuable they have the discretion to say, "A, B, C may now market this di~u~ without further clinical proof &f safety and efficacy provided that their product meets the chemical standard." Is' that correct? Mr. STETLER. That is correct. And as a matter of fact, the example that we are going to talk to you about, that Dr. Lueck is going to talk about, is a :specific situation where for the first brand of Chloram- phenacol, Chloromycetin, a New Drug Application, or the coñiparablè form for an antibiotic, was processed by Parke, Davis. Later, the three `othe~ products that are discussed in this comparative testing were ap- proved by FDA. But the FDA did not require clinical investigation. Now, this was a discretionary matter, and they said "No." Now, as we look at these produdts on the market available from the drugstore, we find that in performance they lack the ncessary ability to get into the bloodstream and to perform effectively. With an antibiotic of this type, that, is a very serious proposition. But it did represent an exercise of discretion. *:` But our case will show that unless you `do require clinical proof from every manufacturer, you have a problem, or at least a potential problem, with that'drug. Senator NELSON. Well, this gets at the question I am interested in. The New Drug Application is approved after extensive investigation and testing. And nobody else can go to the market with that drug, except the one who got the New Drug Application. However, the firm whose application was approved can, under the law, turn around and license other manufacturers; can he not? Mr. STETLER. No, sir. His only authority to license is with respect to his patent rights. Senator NELSON. He cannot license the new drug? Mr. STETLER. No, sir. PAGENO="0227" COMPETITIVE PROBLEMS IN TIlE DRUG INDUSTRY 1371 Senator NELSON. To be manufactured by anybody else? Mr. STETLER. No, sir. Senator NELSON. This is contrary to the testimony we had. Mr. STETLER. Normally, if it is still a new drug, the second manu- facturer will be required to go through the NDA procedure at Food and Drug. But a drug can become an old drug, either by being declared so by the FDA, or by becoming generally recognized as safe and effective. When that happens, another manufacturer can produce it,, without going through the new drug procedure. Senator NELSON. We will check the testimony. I think Dr. Goddard said when a New Drug Application is granted, the company that is granted the New Drug Application may then license X, Y, Z to manu- facture the same drug forthwith. Mr. STETLER. I think that is incorrect. Mr. CUTLER. The first company, Mr. Chairman, could provide its clinical data to the second company it licenses, and FDA then in its - discretion might decide to approve the second company's application based on that data. That is a possibility. Mr. STETLER. No, but that is different. They still have to go through the FDA procedure. FDA makes that decision, not the company. Senator NELSON. As I recall, Dr. Goddard said that if X gets the New Drug Application approved, and supplies his data on experiments to companies 1 through 10, they can then manufacture the same drug and put it on the market without doing the experiments that were re- quired for the drug that received the original approval, is that correct? Mr. STETLER. They can do that. But still it is within the discretion of the Food, and Drug Administration whether they want to approve that application or whether they want to let that manufacturer put that product on the market. A company that has a New Drug Application processed does not make that decision for the Food and Drug Administration. If they want to give their data, that is all right. But even if they give it, the FDA is going to look very carefully at the capabilities of the new manufacturer, as they should. I could get a lot of data, but it would not qualify me to manufacture drugs. So unless I have the capabilities to duplicate all of the protocols of this first manufacture, and can demonstrate that I can do that, I have no right to be in the drug busi- ness. And the FDA has to check that. Senator NELSON. You are putting in the reservation that the right to license has to have the approval of the FDA. Mr. STETLER. This is not a licensure procedure. The company does not license an NDA. Senator NELSON. What do you call it? Mr. STETLER. They license if they have a patent for the drug. Senator NELSON. I have been using the term license as it relates to a patent. The patent holder may make an agreement to permit other companies to manufacture this new drug? Mr. STETLER. Not without the authority of the Food and Drug Ad- ministration, sir. Senator NELSON. Well, I am not talking about that. Mr. STETLER. If they want to, if they have a New Drug Applica- tion' approved, and if they want to pass over to some manufacturer all of the testing and research and clinical work they have done, and in- PAGENO="0228" 1372 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY vito them to go to FDA, they can do it. This is not going to be a very prevalent practice in the industry. Senator NELSON. I believe Dr. Goddard testified `that they could do this. I will have to check the record. The question I raised with the FDA was that a company with a New Drug Application approval can authorize 20 other companies to manufacture the drug, with the approval, as you say, of FDA. N,ne of them need to be any of the known brand name companies. And yet the best known brand name companies who have not received a license :from the one who received approval cannot go on to `the market with it, even if he duplicated it from analysis as perfectly as it could be done, even if you could take his tablet and mix it up with all the rest and never tell the difference. Mr. STETLER. I really th.ink on this point, we are proceeding on a wrong premise. I would suggest we check that testimony. Senator NELSON. I will read that testimony again. I had `a long colloquy with Dr. Goddard on this exact point. I will read it and bring it up at a later date. Mr. GROSSMAN. I would like to ask a question, Mr. Stetler. With regard to the equivalency question again-we had testimony from Dr. Goddard last week that "The drugs are therapeutically equivalent until proven otherwise." And I specifically asked him whether this was an ~assumption or what we could call it. And when I asked him if the purpose of the present FDA s:tudy into equivalency then is to corroborate the position lie now holds as to equivalency, his answer was "Yes." In other words, lie is conducting the study to corroborate a position that the FDA I assume now holds ~ Mr. STETLER. This is an assümption"he has *stated.'Ifyou look back where this has . been discussed by Dr. Goddard from time to time, I think he has said rathei specifically that the FDA is in no position to guarantee equivalency between drug products. Tile has said "I personally believe;that when products are chemically equivalent, usually you can assume they are. `therapeutically equivalent, * * * to prove whether we are right oi wrong, I ~tm in the process," he says, "of conducting a test on X products." I understand that test- ing is being done at Georgetown University, and it will be helpful. But there is no valid assumption on that at the moment. As a matter of f~ct, our position is diametrically opposed `to that assumption. Mr. GROSSMAN. Have you been coiisult:ed at all, with regard to this study? Mr. STETLER. No. Well, there may be people in the industry that have discussed it from `time to time. But the protocols for the study and the way it is being handled and the selection of the drugs .being tested is pretty much a project between FDA and Georgetown University. Mr. GROSSMAN. The problem I see here is that we are going to have an endless series of these studies. You `will `do a study and prove there is an example where they are not therapeutically equivalent. Dr. God- dard will do a study that proves they are. And we `are going to go on for years and years. What is the end `of all this? Mr. STETLER. Although it would be a nice, handy, easy thing, to be able to say "We have proven equivalency" the facts of the matter are that nobody will ever be able to make that statement as long as there PAGENO="0229" COMPETITIVE PROBLEMS IN TUE. DRUG INDUSTRY 1373 are so many well- poor- and medium-qualified people making drugs. Because you have to be able to say therapeutically equivalent today, tomorrow, and next week-because they do not always do the same job every day. Now, we did not make this problem, and we are not trying to coin- plicate it. It just evolves from the nature of the situation that exists. Mr. GROSSMAN. Can I assume then you would feel that the lISP standards, the standards they now have, are not adequate? Mr. STETLER. lISP standards-in other words, the lISP does a fine )ob as far as they have gone. They recognize as we recognize, that there probably should be other standards developed, and they are now being developed with. the cooperation of the manufacturers~ What we say on lISP standards is not intended at all to be critical of that book, and it is not. But lISP is not the whole answer. There are other standards, and they are being revised now. When those are in the book, lISP standards will mean more than they mean now. Whether they will ever answer completely the problem, I cannot say. Mr. GROSSMAN. We can probably say., then, as soon as Dr. Goddard's study is completed, we will be in no better position than we are now. Mr. STETLER. Well, we will be in a better position as to what he finds on those 12 or 50 products. But I don't think, after he studies the 12 or 50, that he caii say across the board all products be~iring the same generic name are equivalent-no; he cannot say that. Mr. GROSSMAN. Thank you. Senator NELSON. All right. Go ahead. Mr. STETLER. On that pointr-if you would like-I would read just one statement here. This is from Dr. Feldmann, of . the National Formulary. This brings up a closely related matter that is a national limitation of the compendia.. Many people in pharmacy have the mistaken notion that if a product meets all the specific tests and requirements detailed for the article in the U$P or NF monograph, then that particular product has to be perfectly satisfactory. While I wish this were true, I am sorry to say that it is not, and the nature of the problem is such that we can never hope to develop compendium monographs which will give complete assurance of any product's complete and absolute suitability. Mr. GROSSMAN. Could I ask you one last question. With regard to the lISP, I understand their tests are essentially physical; is that correct? Dr. SLESSER. Yes. Mr. GROSSMAN. Could you then recommend their tests be extended to biological areas, and to animal testings like that? Dr. SLESSER. Mr. Grossman, according to Dr. Miller a committee has been appointed for this very purpose, and they are exploring this particular matter, and hopefully some time in the future they may come up with tests which will come much closer to doing what you have indicated here than the present compendia are able to do. Senator NELsoN. In establishing the lISP standards, it is not purely a chemical matter, really, is it?, That is, the consultants involved in setting standards include not only the industry but also the expert physicians who have used this drug around the country. So there is a cumulative clinical knowledge about this compound and its effect that PAGENO="0230" 1374 COMPETITIVE PROBLEMS IN THE DRIJG INDUSTRY goes into the final decisions as to what the chemical tests should be. Is that not correct? Mr. STETLER. There is no question that the people that work on the compendia are well-qualified people, and the standards that are there are well done. Our quarrel is only with what you can assume, having those standards, and recognizing they are good standards. Senator NETJSON. I. guess we have been through that before. The point is, it applies to any drug, whether it is trade name or any other. Go ahead. Mr. STETLER. Bottom of page 11. On this subject, there appears to be a rather common, mistaken belief that the Federal drug laws some- how guarantee a uniform high level of quality in all drug products which reach and are dispensed from the shelves of a pharmacy. This is not so and, as a practical matter, can never be so. Although Food and Drug Administration personnel do a conscien- tious job, it is impossible for them to inspect every manufacturer and distributor often enough to insure that every drug product meets every bare minimum quality standards. Maximum quality and reliability can only be built in by the manu- facturer. Even antibiotic drug products, every batch of which FDA tests before shipment, have turned up with variations in quality and potency. Mr. GORDON. Mr. Stetler, your testimony suggests that simple re- liance upon a product meeting official compendia tests and specifica- tions is not sufficient. Mr. S11J~rr4ER. Correct. Mr. GORDON. You also suggest because of this situation the physician or pharmacist should rely upon the reputation of the particular manu- facturers. Is that correct? Mr. STETLER. Correct. Mr. GORDON. Apparently you feel that some firms are not perform- ing adequately insofar as their quality control, good manufacturing practices, and so on are concerned with the result that they do not produce reliable drugs. Is that a correct interpretation of your statement? Mr. STETLER. For some manufacturers; yes. Mr. GORDON. Will you name some of these firms? Mr. STETLER. Will I name some? Mr. GORDON. Yes. Mr. STETLER. No. Mr. GORDON. If you have such knowledge, it should be made part of this record. Mr. STETLER. I think it is obvious to you that this statement is not meant as an indictment of any firms. What I am saying is that there are varying capabilities in drug manufacturers. Some produce con- sistently poor drugs. Some do it sometime. My purpose is not to identify them, it is not my job, and I do not propose to do it. Mr. GORDON. If you won't disclose this information, and if the infor- mation is not generally made available, how, then, is the physician who writes a prescription out in~ some small isolated town to know this? Certainly we cannot expect a busy general practitioner to be familiar with all of the qualifications of personnel, or adequacy of facilities and PAGENO="0231" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1375 procedure utilized by various manufacturers hundreds or even thou- sands of miles away from him. Obvhmsly, such a physician or a pharmacist, must rely upon objec- tive standards to evaluate the quality of the drugs he prescribes and dispenses. We have heard a great deal of propaganda about a manu- facturer's reputation, and yet just about a month ago the ~`witnesses, from Squibb & Co. `freely admitted before the subcommittee that their Brooklyn facilities had been in atrocious condition only a short time agb. Would you com'ment on that, sir? Mr. Srumm~. Yes. What you `say makes my point. I am ready `to agree with you that doctors are in no position to pre- scribe generically and take their chances with the product of any of these manufacturers, some who are not, or some who are poorly qu'ali- fled to produce. So given the inability of anybody, including the Fed- eral Government, to guarantee, certify, or approve the products that are on the market, the physician~s best and the patient's best safegu'ard is in the doctor being free to prescribe the quality products' that he knows to `be quality products, to use `~s his source of products, m~nu- faeturers `that have consistently done a, good job for him with, hi's patients, in his private practice. On your other point-I have not said, and :1 make the point again, th'at just because a company is a member of the PMA they are automatically perfect.. Our cou~ipauies mistakes, and' `they will make some' more. But given their capabi~Iities and their attention to quality and their expertise in personnel, the chances of them making mistakes are much less, and they do a con- sistently better job, obviously, than a manufacturer that is not similarly qualified. Mr. GoiiroN. He has a better chance, but he is not sure of that, either; right? , Mr. STEmER. I said nobody'is sure. Nobody can every day produce a perfect product, even with all the expertise and capability. Mistakes happen. Mr. Go~oN. So much of your statement and testimony leaves me with the impression that you are attempting to say that if a physi- cian prescribes a drug by its generic name `he is not certain the pa- tient will end up getting a good product-whereas if he prescribes by brand name, he will be sure. Mr. S~rETLEiu. No; I have not said that. As a matter of fact, ,I have already read that paragraph and said very specifically-I think a doctor should be free to prescribe generically, generically with a manu- facturer identified, or by brand-~anything he decides is fine. But he probably has based it on a good professional decision. Mr. GormoN. Well, I have here some information to shOw that many brand-name products have had changes in their `formulas, while the official generic names `mentioned have not been changed. And in look- ing at these changes we find that they represent changes not only in flavor, solvent, and excipient, but actualiy in the therapeutic or active ingredients. When; a drug product has been changed to the extent that' an active mgredient is either added or deleted from that preparation, this means the patient is `getting a substantially `different `product from the case of t~e previous formulation. PAGENO="0232" 1376 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Mr. STETLER. You realize when this happens, this all has to be proc- essed through the FDA with a supplemental New Drug Application. So it is not something a manufacturer just decides to do on his' own He has `to prove up again by clinical testing what happened,: and then it is approved Mr GouroN That is not entirely true, either, sir I have here some information we secured from the Food and Drug Administration, where a drug called Lomotil, which is sold by G D Searle & Co, had a very important ingredient added, atropine sulfate, after the FDA had accepted the original drug without it. I ask that this mformation be put in the record at this point Senator NELSON. So ordered. (The information referred to follows :.) SUMMARY FOR NDA 12-462 LOMOTIL (G D Searle & Co Chicago Ill AP 13-505) This review was initiated because of the reports of two fatalities in children due to overdose of Lomotil Tablets. Lomotil is put out both in the tablet form anU the liquid form. Each of these doses that is one tablet or 1 teaspoonful of the liquid contains 2.5 mg. of diphenoxylate and .025 mg. of atropine sulfate. The drug is promoted for producing hypomotility of the gastro4ntestinal tract primarily of course, in cases of diarrhea and dysintery. According to the PDR of 1964, the recommended adult dose is two tablets 3-4 times daily and for children 3-6 months of age 3 mg. daily and for children 4-12 years of age 8 mg. daily. The doses for ages in between these ranges must be interpolated. According to the labeling atropine sulfate is added to discourage deliberate overdosage but I cannot understand why this is so. Atropine sulfate is not notorious for being an emetic. The first case reported was a 22-month-old child who received 26 tablets which contained 0.65 mg. of atropine sulfate and 65 mg. of diphenoxylate hydro. chloride. The usual dose of atropine Is 0.01 mg./kg./24 hours, Assuming this child weighed 11 kg. the usual daily dose would be .11 mg. He actually received 6 times this recommended dose of atropine or average dose of atropine. The second child weighed 35 pounds (16 kg.) and received approximately 15 tablets which contained 0.375 mg. of atropine and 37.5 of diphenoxylate chloride. The usual dose of atropine to a child this size would be 0.16 hours. Therefore each of these children got an excessive dose of atropine as well. The weight of a normal child at 3 months of age can vary from 9.8 lbs. to 16.4 lbs. depending on sex. At 6 months of age the range is from 12.7 lbs. to 20.8 lbs. At 8 years of age from 45.3 lbs. to 79.4 lbs. and at 12 years of age from 94.5 to 179 lbs. Taking the smallest size child at 3 months and the smallest at 8 years the recommended dose of atropine in this labeling would not be excessive. With this background data on the ingredients and labeling of the drug and the two fatalities from overdose, I will now review the single volume of the NDA to determine the adequacy of the data to substantiate the safety and efficacy of this drug in all age groups. This will be reviewed in chronological order start- ing at the rear of the NDA with the original submission and proceeding forward to the most recent data. Before starting this review I might point out that the original submission was on May 31, 1960 and it was found incomplete on July 29, 1960. It was subsequently ~nade conditionaly effective on August 30, 1960 and fully effective on Septem- ber 15, 1960. Subsequence of this there were several supplements. The first paragraph is subdivided into 7 different parts. Section I appears to be a general summary of the data Included in the other sections referring to diphenoxylate hydrochloride (R-1132). The descriptive formula of diphenoxylate hydrochloride (R-1132) Is 2,2-dipbenyl-4-(4-carbethoxy-4.phenyl-1-piperidene) butyronitrale hydrochloride. The toxicity data is briefly reviewed an it Is obvious these data were obtained only from work done on this chemical entity which did PAGENO="0233" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1377 not include atropine at the time. In other words, the toxicity data were not obtained from the drug as it Is marketed in a combination of atropine sulfate and dipheñoxylate hydrochloride. It is obtained only on the diphenoxylate hydro- chloride. Under the heading Clinical Evaluation it points out tl~at 31 clinicians have sub- mitted observations on 521 patIents. When I review these in detail it will be seen that very few individual case histories were submitted and these were glossly inadequate. It will also be seen that most of the data were submitted in the form of tabulations which gave us absolutely no information of any significance about the clinical course of these patients. Under the heading Types of Diarrhea and Response to R-1132 it recounts how the drug was used in all types of diarrheas, specific and nonspecific. Under age range it refers to the drug as being given to patients as young as 3 months of age and that 89 of the~ patients ranged In age from 3 months to 14 years. The oldest patient in this series was 80 years of age. Again, as I will point out later, the data on children is grossly inadequate and incomplete. Under the heading discussion of clinicians report in referring to the work of Dr. David Cayer was pointed out that some patients had nausea, itching of the skin and skin rashes. There were two episodes of hepatie coma which occured in one patient with advanced, cirrhosis during medication and recovery occured in each instance when the drug was stopped. This of course, suggest that the drug is toxic to the liver. It also indicates clearly that the clinical trials were performed with only one ingredient of the drug as ft Is now on the market. The work of E. C. Texter, Jr., also indicated that patients had nausea, drow- siness and light headedness. Dr. H. C. Moeller noted that his patients developed nausea, vomiting and numbness of the extremities all of which disappeared when the medication was stopped. A Dr. W. H. ~acharach noted that in addition to two ~at1ents whO complained of nausea, one patient developed a progressive anorexia. One of the clinical investigators was a Dr. A. J. Modlin, a pediatrician frQm Laurel, Maryland who submitted patient record forms on 27 patients, 14 of whom were 3 to 21 months of age and 13 were In the age range from 2 to 9 years. It is interesting that the company did not submit' these individual case histories of Dr~' Modlilis' but merely listed them in the tabulation. It is also interesting that Dr. Modlin was a close friend and neighbor of Dr. Bennett A. Robin who just today, May 4, 1904 pleaded nob contendere to charges of falsifying data that came into the Food and Drug Administration. Certainly ,the least we can do Is demand that we be furnished these individual case histories on the 2T patients of Dr. Modlin. A Dr. 0. IL Brown who treated 50 patients described an episode of hypotension in 1 patient while undergoing anesthesia who had received the drug up to the time of the operation. The patient bad alsb received an anime oxidase inhibitor and it was believed that this drug rather than the drug under discussion perel- pated to hypotenslon. A Dr. Frank ~EcGlone had a patient who developed ataxia confusion and hallucination when also receiving a barbiturate. A Dr. Hugo Moeller had a patient who had a similar response so the statement is made that it might seem desirable to, include in the Physicians Reference Manual on Lomotil a statement to the effect that the preparation should be administered with caution to patients taking barbiturates concomitantly. A Dr. David 0ayer ha.d a patient who developed two episodes of hepatie coma in a patient with cirrhosis of the liver. Under the heading Discussion of Addiction Liability it was concluded that the product R-1132 possesses abuse liability. This seemed definitely less than that of morphine and greater than that of d-propoxyphene. It seemed about comparable with codeine in several respects. Some of these patients experience insomnia. It seems that the atropine sulfate was added not exert any clinical effect but to make it much more difficult if not impossible to extract the drug R-1132 for purposes of abuse. However, it seems obvious that this mixture of atropine sulfate and the dyphenoxylate hydrochloride which is the R-1132 is an entirely different drug from the R-1132 alone. Under the heading Other Studies not in the United States, it quotes the Janssen Laboratories, Belgium, as providing a summary of observations made on 830 patients by 89 clinicians and these in- cluded 122 children ranging in age from 1 month to 12 years. It is stated that the results of these observations were in general the same as those obtained PAGENO="0234" 1378 COMPETITIVJ~I PROBLEMS~ IN THE DRUG INDUSTRY in the United States with perhaps a somewhat lower incidence of side effects. Section 2 is a paper from the Journal Medicinal and Pharmaceutical Chemistry Vol. 1, No. 4 of 1959 by Paul A. J. Janssen and others concerning the pharma cci- ogical properties of R-1132 and related compounds. There was no clinical material included. Section 3 was a confidential brochure of the Searle Company concerning the pharmacological and toxicological data on R-1132. This section also had to do with 14 day oral toxicity studies in rats. Section 4 was a report from the Woodard Research Corporation to the Searle Company on the Chronic Oral Toxicity of R-1132. Section 5 was entitled a Summary of Oase Reports of 521 patients to whom Lomotil was administered by 31 clinicians. This does not make clear whether the Lo'motil included the atropine or not. Furthermore this was merely a tabula- tion which listed the investigator by number, the number of patients be saw, the age range, the diagnosis, the clinical result, side effects, dosage, and milligrams per day and duration. I presume that is duration of treatment. It is noted that investigator number 5 had 30 patients but only 16 record forms were submitted. Investigator number 6 had 39 patients but only 22 record forms were submitted. It Is noted that investigator number 18 bad 28 patients of which 14 supposedly ranged from 3 to 21 months of age and 13 ranged from 2-9 years of age. This was probably Dr. Modlin because his location is listed as Laurel, Md. Investigator number 28 bad 25 children. Investigator number 29 had 18 children. The final sheet is a summary of side effects which included nausea, drowsiness or sedation, dizziness, vomiting, skin eruption, restlessness, itching, cramps, headache, swelling of gums, numbness of extremeties, blurring of vision, euphoria, depression, malaise and abdominal distention. Section number 6 contained some covering letters which were mainly testi- monial and a few individual case histories. There were 43 individual ease his- tories which were grossly inadequate as far as details were concerned. Most of them are not legible and in general they add very little to the new drug application. In this whole original submission there is no explanation of the physiological effect of this drug on the human being except for the gastrointestinal tract where it is supposed to produce hypomobility. Neither are we told anything about its absorption, its metabolism or its excretion. The receipt of the NDA was noted by a letter dated June 7, 1960. A FDA memorandum dated July 18, 1960 from the Division of Pharmacology to Dr. Madigan in the New Drug Branch who was handling the NDA, which stated "The animal toxicity data are sufficient and satisfactory to suggest safety of Lomotil at the recommended dose levels (up to 20 mg. daily for adults and lesser amounts for children); however, because of the limited clinical studies in children less than 3 months old the dose level recommendations for children under 3 months of age should be deleted from the labeling. I recommend that this NDA 12-462 for Lomotil be made effective upon compliance with the labeling changes suggested above." This was signed by Kent J. Davis and initialed by V. J. Vos. On July 22, 1960 a letter was written by the firm to Dr. Madigan and Dr. J. William Crosson of the firm stated "In accordance with our telephone discus- sion on this date, we wrote delete from the labeling reference to administration of Lomotil to children under 3 months of age." Comment After reviewing this original submission it is very obvious to me that there was inadequate data on children of all ages under 12 years of age. In the 43 individual case histories there was only 1 child 8 years of age. Furthermore, all of the animal toxicity data were obtained on animals from the diphenoxylate hydrochloride alone which did not include atropine sulfate as the finished formula drug on the market included. In a letter dated July 29, 1960 Dr. Madigan found the NDA incomplete on 1) manufacturing controls 2) on the basis that the application proposes to make the literature furnishing information for the professional use of this drug available to physicians solely on request. In a letter dated September 13, 1960 from the firm to Dv. Madigan, this was a covering letter for the final printed labeling. Dr. ~acUgan acknowledged this in a letter dated September 29, 1960 and stated that the NDA was now effective. The next item of any significance was a letter from the firm dated September 18, 1963 to Dr. Madigan to report the occurrence of a fatality with Lomotil. This PAGENO="0235" COMPETITIVE PROBLEMS IN THE: DRUG INDUSTRY 1379 was a two year old child who had ingested approximately 15 Lomotil Tablets of 2.5 mg. each. Dr. Madigan replied to this on October 15, 1963. He requested a copy of the autopsy report on the child. This was submitted with a covering letter dated November 1, 1963. This was acknowledged on February 28, 1964. In a letter dated December 26, 1963 the firm reported the occurrence of a fatality with Lomotil following the ingestion of 26 tablets of 2.5 mg. or a total of 65 mg. of Lomotil, by 22 month old child. Substantiating data was included. This was acknowledged by FDA on February 28, 1964. Additionally data was sent in on February 24, 1964. This was acknowledged on March 3, 1964 and additionally data was requested. The firm replied in a letter dated April 6, 1964 stating that the data requested had been furnished. This completes the new drug application. Although both of these children died as the result of ingesting a marked over- dose of the drug and not from a recommended dose, nevertheless, review of the new drug application finds it deficient in data to substantiate the safety or efficacy of the drug. All of the animal data were obtained with the one ingre- dient and without atropine. Apparently all of the clinical studies were done on the same ingredient. The atropine sulfate seems to have been added after all of the studies were done. In the whole NDA there are only 43 individsial case reports of which only one is a child. The remainder of the clinical data is represented by a tabulation in which not even the name of the clinical investigator is listed. It is indicated tl3at more individual case reports were furnished to the firm than were submitted to FDA. At least 1 clinical investigator who did work with children is a man whom I suspect because of his association with Dr. Bennett A. Robins and the general quality of the work I have seen elsewhere from him. Since the data now in the NDA do not substantiate the safety and efficacy of this drug particularly in children there is no choice but to state that from the strictly medic'al point of view this drug should not be on the market. My recoin- mendation is that the New drug application be suspended and the drug removed from the market until data are submitted which substantiate safety and efficacy. TOux 0. NEsTeR, M.D. SUMMARY OF NDA 12-462 VoL. 2 LOMOTTL. (G. D. Searle & Co., AF 13-505) At the time I reviewed Vol. 1 it was my understanding that it contained all the data pertaining to this new drug. Dr. Ellenhorn has since sent me Vol. 2 With a note to the effect that there may also be another volume. To begin with, it might be well to state that in the entire NDA I could only find evidence that 84 children were given the drug. I could not find evidence that a single pregnant woman had received the drug. In general the clinical data consisted mainly of medical testimonials which were obviously uncontrolled studies. Laboratory work was practically nonexist- ent, that is, such things as stool cultures. In many cases there was concurrent therapy with other drugs such as steroids, sulfonamides, tranquilizers, etc. In many eases it was difficult or impossible to read and interpret the individual case histories which were lacking in significant detail. For instance, In many cases there was no record of the age, sex, name, or weight of the individual. Side effects consisted of nausea, vomiting, sedation, restlessness, dizziness, vertigo, weakness, dry mouth, ataxia, confusion, hallucinations, angioneurotic edema, giant urticaria, swelling of the gums, malaise, flatulence, and bloating. Although this NDA pertains only to tablets it appears that many of the children were given the drug in a different dosage form, that is a liquid form A Dr. Charles N. Brown of the Cleveland Clinic who was one of the investi- gators mentions a confidential brochure which I have not seen in the NDA. The last item number 38 is a report from the research laboratories of Dr. C. Jaussen of October 1, 1959 which is stamped confidential, and refers to the use of R11~2. in 830 cases. R1182 is the code assigned to this drug Lemotil which is also known by the generic name of diphenoxylate. The human pharmacology and investigation of the addictedness of the drug is in section 36 and was worked out at the Public Health Addiction Research PAGENO="0236" 1380 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Center in Lexington, Kentucky by H. F. Fraser and H. Isbell. This was quite a thorough work and naturally I can only summarize the high points It seems that diphenoxylate is a congenar of meperithne and it produces euphoria in somewhat the same fashion as morphine and codeine. It is about 1/2 as potent as morphine and 1 and a half times as potent as codeine The main difference from the codeine effect was the time of effect the codeine took from one to two hours and R1132 which is the diphenoxylate took from four to six hours R1132 is an effective suppressor of abstinence from morphine. It induces constipation similar to that of the opiates such as morphine and codeine It `also depresses the respiratory rate, is addicting, constricts the pupils, produces euphoria, and when administered in large doses orally and intravenously in subject to abuse liability It has no advantage over codeine in physical dependence Addiction to it is similar to that of morphine and codeine The final clinical study was done by a group of three men from the Department of Internal Medicine at the University of Louvaine in Belgium The clinical pharmacology was included in section number 37 and in section number 38 there is a tabulation of 830 cases This is strictly a tabulation giving the case numbers, sex, age, weight, daily dose, duration of treatment, the doctor who treated, side effects, results, and diagnosis. No mention is made of laboratory work and there are no individual ease histories. In this particular study there were supposedly 51 children of which 23 were cases of acute diarrhea and 28 cases of chronic diarrhea This drug does have a constipating effect but also it is like opiates in that it can produce addiction There are fewer than 100 children in the two volumes of the MDA reviewed to this~ point, and there are no pregnant women. Except for the excefient study in human pharmacology done by Fraser and Isbell in a relatively small number of the total number of patients, the clinical data is testimonial in character and does not represent well controlled studies Labora tory data is practically nonexistent Since to this point I have not run across any labeling in this volume I must conclude that the small amount of labeling in volume 1 constitutes the total at the present time. The additional clinical data submitted in this volume 2, despite its inadequa- cies, do seem to indicate that the drug can produce constipation and control diar- rhea. The data also indicate that it produces a significant number of adverse toxic effects. Certainly the data do not substantiate the safety and efficacy of this drug for use in children under 12 years of age and in pregnant women. Until the additional volume of the MDA is found I will be unable to draw any final conclusions. I had previously pointed out that it had not been used at all in pregnant women during the investigative stage as far as the MDA showed, and that there were very few individual case histories pertaining to its use in children although there was one long tabulation of children from a study done in Belgium How ever this was merely a tabulation and did not contain any significant details of the medical history and laboratory work There were a total of only 40 very brief completely inadequate individual case histories submitted in children. 21 of these were for children under the age of 2 years 14 for the ages between 2 years and 6 years, and five between the ages of 6 years' `and 12 years. The sum total of all of the children mentioned in this MDA whether it applies to the 40 individual case histories or to the tabulations amounted to a total of 235. Obviously, this was grossly inadequate to substantiate the safety and efficacy of the use of this narcotic drug in infants and children. Obviously also there was no demonstration whatever of the safety or efficacy of this in regard to the fetus of a pregnant woman. Since the best study in the .NDA was the study performed by Dr.'s Fraser and Isbell of the National Institute of Mental Health Addiction Research Center in Lexington, Kentucky I will review that work in more detail. The title was, "The Human Pharmacology and Addictedness of Diphenoxylate or R1132." These authors pointed out that this drug is a congener of meperidine which is Demarol. They stated that it had a pronounced constipating and anti- diarrheal effect in man `and many species of animals. Small doses of 2.5 to 5.0 mgs. daily with a maximum dose of 30 mgs. are effective for this purpose. Because of the potential use of the drug for this purpose they decided to study this human addiction liability. They performed a series of very careful studies and came up with the following information. PAGENO="0237" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1381 As a eupheriant or `a euphorogenic agent 60 mgs. of 111132 is more effective than 30 ings. of morphine or 90 mgs. of codiene. It is roughly 1/2 as potent as morphine and 1 and one half `times as potent as codeine in this respect. The peak effect with codeine `was in one to `two `hours and with 111132 was in four to si~ hours, however, the effect lasted much longer with 111132. R1132 proved to `be an effective suppressor of abstinance from morphine. It was more effective th'an codeine In this respect. Long-term studies in persons who were not addicted and who received the drug for an average of 57 days produced. sleepiness, depressed respiratory rate, and produced abstinance effects. A short double-blind direct addication test of 18 days duration showed that patients developed constriction of the pupils, considerable sedation, constipation, and pruritus plus nausea. Compared to morphine and codeine it had more sedative effect than epiete effects. The intensity of the abstinanee syndrone was only slightly less severe than from codeine withdrawal but significantly less severe than from morphine withdrawal. The continuous administration of R1132 was associated with a low incidence or morphine-like subjective effects but with definite morphine-like changes in be- havior and was associated with a moderate degree of physical dependence. The incidence of nonnarcotjc symptoms was far greater from 111132 than from codeine. It was concluded that when 111132 was administered on a temporary "Euphoregenic" schedule the patients liking for the drug was comparable to that of codeine. Since the doses of morphine, codeine, and 111132 used In these euphorogenic studies were from 3 to 16 times those which would be used clinically for controlling diarrhea it was apparent that addiction to any of these drugs is not likely to occur if given orally under strict medical supervision for the purpose. Comment This careful study clearly outlines that this drug is a narcotic with addicting potential and ability. There is no doubt that it cfl~vr stop' diarrhea and produce constipation, but it also can produce opiate-like effects. Wi'th this~ in mind I will review the presently approved labeling for `the drug as well as recent advertising promotional material in medical journals. The final printed labeling for thi~ drug was submitted on September15, 1960 and was acknowledged as effective by Dr. Madigan in a letter dated September 29, 1960. I will now review this labeling to see how well it correh~tes with the data i~i the two volumes of the ND4 just reviewed. The physicians brochure number 81 and the package in~ert se~ñ to be identical and therefore the comment made about the statements in the brochure would apply to the package insert also. Immediately it becomes apparent again that the drug Leinotil, as promoted, is a combination of diphenoxylate hydrochloride with atropine sulfate where as all of the investigational studies both on man and animals and all of `the clinical work wa~ done on only diphenoxylate hydrochloride. [n the investgatiopal stage this was in the form of 5 mg. tablets, whereas for final use it's in the form of 2.5 mg. tablets. Also, it is well to point out that when given to the children in many cases it was given in a liquid form which was not part of the NDA. It is stated in the brochure thattliè su'btherepeutic amount of atropine sulfate included in Lemotil is to discourage deliberate overdose. Each 2.5 mg. tablet contains .025 mgs. or 1/2400 of a grain of atropine sulfate. Since the labeling permits up to eight tablets a day this would be a total of 1/300 of a grain of atropine sulfate in 24 hours which is certainly within the therapeutic range. Atropine is not noted for being a good emetic and therefore it is difficult for me to understand how this would produce or would discourage deliberate overdose. In fact, deliberate overdose might produce atropine toxicity in addition to narcotic toxicity. On page 3 of the brochure is the following paragraph, "Diarrhea has also been treated classically by the Administration of Narcotics such as camphorated tinc- ture of opium, but such agents are frequently ever constipating, and they have a recognized addicting potential. Comment This paragraph is obviously misleading because it implies that this is not a narcotic and It implies that it is markedly different from camphorated tincture of opium which is paragoric. It also implies that this drug, Lomotil it not recognized as having an addicting potential, when, in fact the opposite is true. As a matter of fact this is the excuse given for adding atropine to Lomotil. Starting on page PAGENO="0238" 1382 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 3 is the following quote, "The pharmacology studies in many of the clinical in- vestigations reported herein were conducted with the single chemical substance described under chemistry. To this substance has been added a subtherapeutic amount of atropine sulfate to discourage deliberate overdose." Comm~ent Since up to eight tablets a day are permitted this would include a dose of 1/300 of a grain of atropine sulfate which is within the therapeutic range. There- fore this statement is misleading and incorrect. I am in the process of reviewing the brochure and the insert. On page 7 of the brochure under the heading "Children" the following quote: "adequate daily dosage of Lomotil for children is determined by the child's age and is given in the following table": Milligrams "3to6months 3 6tol2months 1 to 2 years 5 2to5years 5 to 8 years 8 8 to 12 years 10." Coln4nent As I previously pointed out, the data to substantiate safety and efficacy in in- fants and children is extremely inadequate and incomplete. The drug was ad- ministered in a liquid form instead of in the tablet form as indicated here. There were only 40 individual case histories submitted for children and these were grossly inadequate and incomplete as far as clinical data and laboratory data were concerned. These detailed dosages were not worked out in the NDA. On page 8 the following quote: "Side effects incidental to Lomotil administra- tion are relatively uncommon." Conwinent This statement is certainly untrue, for instance 10 out of 25 children in one series had side effects. The authors write "Their incidence, in 501 patients as reported by 28 United States investigators, is shown in the accompanying table." Com4n43nt Actually this table plus the caption unler it indicates that in this 501 patIents there were 104 side effects which represent an incidence of over 20%. Further- more, the side effects were listed in such a way as not to indicate completely the nature. For instance, there were 6 cases of skin eruption noted but it did not state that in this group there was one case of giant urticaria and one case of angio- neurotic edema. There was one case of euphoria noted in the footnotes which in- dicates very clearly the opiatelike effect of this drug. On page 9 the following quote: "Because of the structural similarity of Lomo- til and drugs with a definite addiction potential, Lomotil should be admin!stered with considerable caution to patients who are also receiving such addicting drugs." Conztment In view of the data in the NDA which demonstrates definitely that Lomotil is a narcotic and has a definite addiction potential, this statement is very mislead- ing. It implies that Lomotil does not have an addiction potential which it obvi- ously does. It imples that Lomotil only has a structural similarity to these other drugs and yet the firm's own data demonstrates that it has a very similar action to codeine and morphine. It differs from these mainly in degree. In the next paragraph on the same page 9 the following quote: "Finally, competent studies indicate a possible dependenëy when Lomotil is given in high dosage." Comment In view of the previously quoted paragraph referring to addiction, then this reference to dependency is misleading. Furthermore, these competent studies did not indicate a possible dependency when Lomotil is given in high doses, they indicated a definite dependency or addiction. At the bottom of page 9 the authors Quote Mdllardy as stating "I frankly feel that we have satisfactorily disproved the possibility of addiction to 111132." PAGENO="0239" COMPETITIVE PROBLEMS IN THE; `DItUG INDUSTRY 1383 Of cburse, the ~excellent study done at the Lexington Center has proved that this drug is addicting when given in tha high dose for even' a relatively short period of time. Obviously, Dr. McHardy had not proved that there was no pos- sibility of addiction to 111132. If he had, Why is the firm `adding atropine sulfate to the drug to prevent it being used for overdose and addiction. On page 10 the statement under the heading "Chemistry", "Lomotil consists of this si,ibstance to which a sub-therapeutic amount of atropine sulfate is added deliberatoly to discourage overdosage." Comment As I stated before, "I don't understand how atropine sulfate is going to dis- courage `overdosage, and I don't agree that it is a sub-therapeutic amount of atropine sulfate when under the recommended dose you can get 1/300 of a grain in one 24 hour period." On page 11 under the heading "Addicting Liability" the following quote: ~`Lomoti1 prevented withdrawal symptoms when it was administered to monkeys addicted to morphine. Thus, the drug can be saki to have addicting liability." Comment It seems unusual that they would cite the monkey studies and not the human studies in the NOA which clearly indicated that the drug could be addicting in humans~ Also, page 11 the following quote: "When measured on a milligram-per-milli- gram basis, the addicting liability of Lomotil was approximately equal or slightly less than that of meperidine. However, meperidine Is used clinically as an analgesic in doses `of 100 or 150 milligrams three or four times daily while Lomotil is effective in adults as an anti-diarrheal agent in oral doses of 5 milli- grams three times daily." Comment * I do not recall seeing this work with meperidine in the NDA. I do recall seeing the work done comparing it with codeine and morphine illustrating that `60 milligrams of this drug has the effect of producing the equivalent euphoria of about 30 milligrams of morphine or 90 milligrams of codeine. It was con- sidered one half as potent as morphine and one and `one half times as potent as codeine in this resf~ect. The final quote in this paragraph on addicting liability is "This low dosage of Lomotil carries little or no risk of addiction as clinical evaluation has not revealed any evidence of dependency." Comment This statement is patently untrue because Fraser and Isbell in their study at Lexington showed th'at `this drug could produce addiction in humans. Obviously this entire paragraph is very misleading and should `be revised completely. On page 12 under the heading "Mydriatic Activity" with regard to a study in mice, the following: "Doses `of 10, 20, 40 and 80 milligrams per kilogram of body weight failed to produce significant mydriasis." Comment However, the human `studies done by Fraser `and Isbell demonstrated definite mydriasis in humans when used. On page 12 under the heading "Human `Pharmacology" the following quote: "In these studies it was observed that Lomotil was capable `of preventing with- drawal symptoms in known narcotic addicts. Because of this observation Lomotil must be legally classified as a narcotic, although there is little or no evidence in clinical use of any tendency for it to cause either dependency or"analgesia." Comment Again the `studies don~ at Lexington by Fraser a~id Isbell prove that this is a narcotic, that it produces euphoria in humans, that it produces mydriasis, that it produces nausea, that it produces constipation. Furthermore, it also produces euphoria and is more potent in this respect than codeine. Obviously, then, this statement could serve to mislead the practicing physician and should be completely rewritten. On page 12 under the heading "Addiction Potential" tht~ authors referred to the study done by Fraser and Isbell and on page 13 under the same heading they write~ "As a result of their studies they conclude, in general, that the abuse liability is less than that o'f morphine and more comparable to codeine." PAGENO="0240" 1384 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Commeat This is proof of the criticism I expressed over the previous paragraphs. I therefore conclude this summary with the statement that the presently approved labeling is grossly inadequate and would serve to mislead the practicing physician. I might add that the advertisement for Lomotil which appeared in the July, 1964 issue `of the Virginia Medical Monthly on page 23 could also serve to mis- lead. This advertisement promotes' both tablet and' liquid and nowhere in these two volumes of the NDA did I see any data or anything in the approved labeling that would substantiate the use of the liquid. JOHN 0. NESTOR, M.D. REFERRALS AND RECOMMENDATIONS ISSUANCE DATE MAY 25, 1964 To: Division of Toxicologic~i Evaluation, Please review `Dr. Nestor's & Dr. Moling's comments. Do you have further comments? Thank you. M. J. ELLENHORN. NDSnB. M.J.E. My summary states my view and points in detail but I will list some briefly below: j. The promotional material in PDR is labeling and the source of the material is the firm. My understanding is. the firm submits the material in exactly the. form it is to be printed. 2. The animal `studies were performed only on one ingredient and. not on the final product `as marketed. 3. The clinical data are grossly inadequate in all age groups but especially in children. 4. The investigators were not fully and adequately identified. Many individual case reports were not submitted. There were only 43 in the whole NDA. .5. Finally, two children died as the result of ingesting this drug. 6. In my opinion the data to substantiate safety and efficacy are grossly defi- cient and the drug should come off the market. J. 0. NESTOR, M.D. July 8, 1964. REFERRALS AND RECOMMENDATIONS ISSUANCE DATE MAY 18, 1964 To: 1. H. Moling. Do you have any comments on this summary (of Dr. Nestor) or the NDA? M. J. E~LENHORN. M. J. Ellenhorn: Have reviewed Dr. Nestor's summary and major portions of NDA 12-462. Dr. Nestor notes the factual deficiencies in the clinical work in this NDA as usual.' The tovicity studies apparently were on the diphenarylate Rd only but the drug is marketed with a small atropine content, possibly to pre- vent overdosage. This obviously was not effective in the two deaths reported. D,P. would pei~haps like to comment further on the toxicity studies in this light. The ease histories are tabulated rather than being submitted in original form but it would appear that the pediatric experience was wanting as Dr. Nestor suggests. Hepatle toxicity is alluded to in the labeling but the hazard of such is not thoroughly explored in the clinical data submitted. These data and deficien- cies should be satisfied or the labeling modified to exclude the younger age groups. The NDA is effective as it exists but efficacy may be questioned in Oct. if not safety. J. H. M0LING, M.D. PAGENO="0241" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1385 MEMORANDUM JULY 8, 1964. To: Joseph F. Sadusk, Jr., M.D., Medical Director, Bureau of Medicine. Through: Ralph G. Smith, M.D., Dlrector/DND. From: Mathew J. Ellenhorn, M.D., Chief, New Drug Surveillance Branch. Subject: NDA 12-462. Lomo'til safety and efficacy. Recommendations for action on new drug application. (0. D. Searle & Co., Chicago, Ill., AF 13-505) I have revicwed this subject including the comments and memoranda sub- mitted by Dr. John 0. Nestor and Dr. John H. Moling, pediatricians in the New Drug Surveillance Branch, and Dr. Kent J. Davis, pharmacologist, Division of Toxicological Evaluation. Certainly the two deaths in children are unfortunate occurrences but must be considered as strictly a problem of overdosage. The fundamental basis for action in this NDA ~s stated by Drs. Nestor and Moling and as reflected in the new drug application are the paucity of clinical reports' which form the basis for substabtiating safety in this drug. We, of course, may consider action with regard to efficacy at the appropriate time. However, at this time and with the Inadequate data present in the NDA both from a pharma- cological (absence of studies on the full preparation) and clinical viewpoint (minimal studies performed), it would now seem advisable to consider issuance of a letter to the, firm requesting immediate submission of detailed data on the cases originally submitted with the NDA ~nd any further data that they ~have to substantiate safety. If such data is not forthcoming after a reasOnably short period of time~ then it would appear Indicated to initiate action for withdrawal" of th!s~ new drug application. MEMORANDUM MAY 16, 1966. To: Commissioner of Food and Drugs. From: Robert J. Robinson, M.D., Acting Director. Subject: IND 1454, Lemotil Pharmacologic E~ects. (0. D. Searle & Co., Chicago,. Ill. (AF 13-505)) 0. D. Searle & Co., sponsor of the subject IND, notified the Food and Drug Administration of discontinuance of clinical, investigation of their product in a communication dated November 9, 1965. This notification tollowed requests for additional information in a letter dated October 22, 1965, from Frances 0. Kelsey, M.D., Chief of 1DB'. These requests were found to be necessary after review of the submission and `parts of NDA 12-~62, to which we were referred, failed to support the studies outlined. "Lomotil" is a product presently on the American market which contains in each tablet or 5 cc: Diphenoxylate hydrochloride 2.5 mg. Atropine sulfate 0.025 mg. Diphenoxylate is chemically related to meperidine (Demerol). Reference was made to the dosage recommendation and to the animal data contained in the approved NDA (#12-462) as supporting informution for the exemption. Data obtained from the NDA revealed the following facts: 1. There was no recommended dose for infants under the age of 3 months. 2. The toxicity studies in animals were done with diphenoxylate alone. There was no evidence that studies in very young. animals bad been done. 3. Atropine was added to the formula after all studies (animal and human) had been completed. This, apparently, was to qualify the drug as an exempt narcotic. The 1DB Medical Officer, Everlee 0. Franks, M.D., recommended suspension of studies in infants under the age of 3 months pending completion and evaluation of acute, subacute and chronic toxicity studies in animals using Diphenoxylate 81-280-68-pt. 4-16 PAGENO="0242" 1386 COMPETITIVE PRO~3LEMS IN THE DRUG INDUSTRY and atropine in the proportions present in the product. These studies were also to include acute toxicity studies in animals under 24 hours old. The need for these studies was further emphasized by the fact that older children have died or become seriously ill following the recommended dosage of the drug. The clinical picture of toxicity closely resembles atropine poisoning which suggests synergism of diphelioxylate and atropine. IND A 2849 is for Lomotil with Neomycin and is sponsored by the same com- pany. It is still active and studies include patients of all ages. DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, FOOD AND DRUG ADMINISTRATION,. Jan~e 6, 1966. MEMORANDUM To: Ralph G. Smith, M.D., Director, Division of New Drugs. From: Frances 0. Kelsey, M.D., Chief, Investigational Drug Branch. Subject: IND 1454. Note that the recommendation we submitted to the Office of the Commissioner has been returned and the point has been raised "why should this letter issue." Our concern is that this drug appears to have considerable toxic potentiality when used in young children. The company has withdrawn the application, but of course at any time they could resume clinical testing by just notifying us. We should like to impose upon them the condition that they must await posi- tive assent from us before resuming such testing. We would not, of course, approve of resuming human testing unless the requested animal work had been submitted. In the past it has not been possible for a letter of this type to Issue at the Branch level. For this reason, we drew up the letter for the Commissioner's signature. JUNE 12, 1964. To: Division of New Drugs, Surveillance Branch, attention Dr. Ellenhorn. From: Dr. Kent J. Davis, Division of Toxicological Evaluation. Subject: NDA 12-462. Lomotil Safety and Dr. Nestor's May 1964 Review, G. D. Searle & Oompany Chicago, Illinois AF Number: 13-505. Following generally the order of Dr. Nestor's review we can add the following: (1) The PDR apparently rounded off dosages since the company's literature gives more specific and detailed Instructions for younger age groups. I don't know how much influence FDA has on the PDR editorial policy and expect that the company is still less influential so I don't know whether FIJA can make the PDR expand their recommendations to conform with package inserts. (2) The 22-month old child which died took approximately 52 times the recom- mended single dose. Atropine intake was only approximately double the recom- mended therapeutic dose and was probably not influential in the outcome with this patient. (3) The second child took approximately thirty times the recommended dose. The atropine dose in this case would hardly be considered excessive. (4) We agree that addition of atropine sulphate to R-1132 would make the combination a new and different drug from R-1132. The addition of atropine in these proposed amounts would not be considered a serious alteration in formu- lation, however, and additional safety data required by this change would be minimal. (5) There is considerable information included in the NDA on the absorption metabolism and/or excretion of the drug from the standpoint of safety. Toxicity data are the screen for absorption since most of the toxicity can be attributed to the portion of the drug absorbed rather than to local effect. Toxicity tests also screen against the mast toxic fraction in the amounts present whether it is parent compound or some metabolite. Recovery and repeated dose studies give infornia- tion as to the metabolism and/or excretion of the active and/or toxic principle of the drug. In addition the animal toxicity studies have the advantage that the animals taking the drug evaluate the significance of the toxicity, while reviews of pages of tables of chemical formulas of possible metabolites and serum or tissue levels only give something for the people not involved in the test to speculate on. PAGENO="0243" COMPETITIVE PROBLEMS IN THEi DRUG INDUSTRY 1387 Explanation of the physiological effects is lacking on many drugs hieluding aspirin. (6) WhIle `the incidence of reported side effects is somewhat higher than we would like, it should be noted that patients reporting side effects also had diarrhea. The diarrhea existing prior to taking the drug can hardly be con- sidered a side effect attributable to the drug, and it is questionable whether the more common side effects reported-nausea, sedation, `dizziness, and vomit- ing-should be entirely attributed to the drug. Certainly I did no't consider the side affects predominantly attributable to the drug at the time the drug was originully reviewed, nor do I do so at this time. (7) I considered the ,ahimal safety data sufficient and satisfactory when reviewed in 1960. I see no reason for requesting any additional animal studies now. trnless there are additional data being withheld, safety is apparent from clinical experience to date. We still would not recommend the drug for very young children. (8) I't was my understanding that atropine was added primarily to make the drug less attrae~ive to addicts. This would not have anything to' do with preventing a single over dose. Some synergistic effects against diarrhea might also accrue from the atropine addition. (9) Clinical safety and efficacy evaluations should be readily apparent after a review of the company's production and complaint records. Acceptabifity and repeat sales should be good indicators, since few customers are likely to continue to use a drug which either, sickens them or which doesn't help their diarrhea. (10) While the deaths of the two children are unfortunate, few drugs are "safe" when the recommended doses are exceeded by factors of thirty and fifty-two times. (11) Most of these differences appear to be matters of professional opinion. Dr. Madigan considered the data adequate when he had to make a decision on the NDA in 1960. Dr. Nestor considers the data inadequate when reviewing it in 1964. While the NDA ha's deficiencies under the present standards of review, it was not considered unusual at the time it was received. (12) We see no reasç~n for questioning `the status of this NDA 12-462 at this time unless there are additional factors involved wbieh we are not now aware of. KENS ~T. DAVIS, D.V.M. MEMORANDUM JUNE 18, 1966. To: Director, Minneapolis District. From: Fred S. Halverson, Inspector. Subject: Adverse Drug Reaction Investigation-DPO/DRM Memo of Phone Call, June14, 1966. In response to the above listed memo, I visited Dr. Charles Jarvis at Chil- cirens Hospital on June 14, 1966. Dr. Jarvis is the pathologist for Ohildrens Hospital. On February 25, 1966, at 2:45 p.m., Dr. Jarvis performed an autopsy on Ter- rance J. Ehrich, a three-year-old white male, who had expired on February 25, 1966, at 10:10a.m. at Children's Hospital. Dr. Jarvis listed Diphenoxylate (Lomotil) toxicity under the "Diagnoses" section of the autopsy report. (Se'e exhibit #1, which is the autopsy report of this case.) Dr. ~Iarvis stated that he attempted to obtain Lomotil toxicity data from the 0. D. Searle Company, and he was not satisfied with the information they were able to provide. ExhibIt # 2 is a copy of a letter of reply to a phone call made by Dr. Jarvis to the 0. D. Searle Company. Dr. Jarvi~ had sent blood samples from the deceased to 0. D. Searle for chemical analysis; and he filled out the adverse drug reaction form referred to in the letter and returned it to- gether with a copy of the autopsy report. Exhibit #3 is a copy of a letter acknowl- edging a telephone call from Dr. Jarvis; a copy of a memo concerning the deter- mination of Lomotil in the serum sample which is referred to in this letter was not available from Dr. Jarvis. He stated that he had sent this memo together with the letter which he had written to Dr. Goddard, Commissionei~ of the Food and Drug Administration. Dr. Jarvis feels that the child died as a direct result of an overdosage of Lomotil. He feels that the overdosage resulted from the child getting too much Lomotil, that the drug is apparently not excreted, and is accumulated to toxic levels. Dr. Jarvis gave the opinion that any pediatric medica- PAGENO="0244" 1388 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY tion should be capable of a double or triple dose without any toxic reaction be- cause of the possibility of this happening to the measuring of the dose by the mothers. Dr. Jarvis felt that the information provided by the G. D. Searle Corn- pany was wholly inadequate and his feelings are expressed in the letter which he sent to Dr Goddard dated May 19 19~3~ which is quoted below The 1 D Searle Company apparently knows little or nothing about their product Lomotil (Diphenoxylate HCA with/Atropine) On February 25 I per formed an autopsy on a three year old boy who (I believe) died as a direct re suit of Lomotil overdosage Enclosed is a copy of a report from the Searle Corn pany which appears to say that the postmortem serum samples submitted to them for assay had a Diphenoxylate level as high as their high standard However in personal conversation with Dr McGovern of their Division of Clinical Research I gather that they do not know what an overdose is or bow it reacts ozi the living organism "I find this state of affairs ~omewhat appalling, sO I am referring the matter to you. If you wish, I will send a. copy of the autopsy." . The sequence of events with respect to this case are as follows The patient was examined at a Minneapolis Naval Air Station Outpatient Clinic on 10/20/65 1/22/66 1/29/66 and 1/30/66 (The father was a member of the Navy at this time ) The patient was seen for respiratory problems ( See exhibit #6 which is a copy of Doctor s Progress Notes from the Naval Air Station) The Doctor s Progress Notes indicate that in the course of the visit to the facility Penicillin and an expectorant were prescribed Note that the entry dated 1/30/66 indicates an Rx of referral to a private M D for hospital admission On 1/30/66 at 4 05 pm the patient was admitted to Bethesda Lutheran Hospital St Paul Minnesota again with a diagnosis of respiratory distress (See exhibit #7 for the complete chart of this hospital admission) Phe attend Ing physician was Dr S Loken St Paul Minnesota Again the patient was given Penicillin tind also Decadron Chloromycetln and on 2/3 and 4 Lomotll was given (The progress and treatment record dated 2/3/66 indicates a loose stool and this was when the Lomotil was first presribed The patient was discharged on 2/6/66 On 6/15/66 I talked with Dr Loken at his office Dr Loken stated that the patient w~s suffering from upper respiratory trouble with difficulty in breathing and that he was rather acutely ill for what his tempera ture and other vital things would indicate He stated that he was rather alarmed and called in Dr Jack Hilgen an ear nose and throat specialist (See exhibit #7 for notes of Dr. Loken and Dr. Hiigei~ and others.) 1~r. Loken stated that the patient was listless and had difficulty in breathing over and above what would be expected from his temperature. . On 6/14/66 I talked with the parents of the deceased Mr and Mrs Richard Ehrich at their home at Route 1 Hugo Minnesota (The address of 445 Sher burne, St. Paul, Minneso~á, on the hOspital forms is not correct since the family has recently moved) According to the mother the patient was receiving Peni cillin for his throat and on approximately February 19 a prescription for Lomotil was obtained from Dr~ Lokeii for diarrhea. According to the mother, the Lomotil was given at the rate of 1 teaspoon four times each day. On 2/24/66, the child could not be awakened and was again taken to Bethesda Lutheran Hospital St Paul Minnesota The provisional diagnosis discharge summary etc may be seen on the chart for this second admission to Bethesda Hospital which is exhibit #8 The child was admitted in a comatose state as indicated Dr Martha Strickland pedatrician at Ohildrens Hospital at St Paul Minnesota was brought in as a consultant The child was transferred to Childrens Hospital on the same day The patient was admitted to Childrens Hospital on 2/24/66 at 6 45 pm and expired on 2/25/66 at 10 00 a m The sequence of events and the notes on this episode ma~ be seen on the chart for this admission to Childrens Hospital which is exhibit #9 Many of the entries are by Dr Strickland and some by Dr Bloom who was a pediatric resident at that time. On 6/20/66 I talked with Dr. Strick- land at Childrens Hospital, St. Paul, Minnesota. Dr. Strickland stated that she first saw the patient at Bethesda Hospital when be was brought in comatose on 2/24/66 The patient had pinpoint pupils and other indications which caused her to think first of an overdo'~e of some opiate The patient at his best downhill course did not appear to have the classic encephalitis symptoms According to Dr Strickland the patient had very low blood pressure (impossible to get a blood pressure reading initially) and low renal function, neither condition being PAGENO="0245" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1~389. normal in pneumonia, although the patient had aspiration pneumonia on aclmis- sion. Dr. Strickland stated that similar aspiration pneumonia cases have not been fatal. When I talked to Dr. Jarvis, he told me of two Other cases where Lomotil toxicity was suspected in the death of children of the same approximate age as Terrance Ehrich. Therefore, in connection with this investigation I also obtained information on these two additional eases. The first of these is the case of Lisa Hoffman of Coon Rapids, Minnesota, who expired on 5/16/66 from an overdose of Lomitil. In connection with this case, I talked with Dr. Ronald Bloom at Uni- versity of Minnesota Hospitals, Minneapolis, Minnesota. According to Dr. Bloom, he is familiar with the case, but the attending physician was Dr. Gregory Oulley, who saw the patient ~on admission and stayed on the case until the patient expired. (Dr. Bloom also worked with Dr. Strickland on the Ehrieb case.) Dr. Culley was not available for an interview at this time. The hospital chart for this case contains a sequence of events and notes on the case by Dr. Culley and is exhibit #10. The patient apparently ingested 25 milligram Hydrodiruil and Lomotil tablets. According to Dr. Bloom he was interested in this case because of his association with the Ehrich case. Serum from the Lisa Hoffman case was sub- mitted to G. B. Searle Company, and the letter of reply is exhibit #11. Accord- ing to Dr. Bloom, the figures given with respect to the blood level are absurd, taking into account the blood volume, of a child of this size. Dr. Bloom stated that T. 0. Hiebert, Pb. D., MD., the Director, Division of Medical Intelligence at G. D. Searle Company, visited the hospital. but could not provide them with any defini- tive information with respect to what constitutes a therapeutic or toxic blood level of Lomotil. Also, the Searle people allegedly could not provide any informa- tion with respect to Lomotil toxicity. Dr. Bloom also pointed out that after 18 hours (see exhibit #11) a drug is still absorbed. However, no meaning can b~ attached to the blood level figures since, according to Dr. Bloom, the Searle peo- ple could not indicate what these figures meant with respect to Lomotil toxicity. The background information referred to in the exhibit #11 letter is a binder of information entitled "Lomotil Background Information" which wasi sent to Dr. Bloom by the 0. D. Searle Company. Dr. Bloom pointed out that the only study he could find in this where the Lomotil was the only vartable is the Study No. 5, which is circled on the contents page. Parts of this background information are in French. An autopsy was performed on the deceased in this case, but the report was not available at this time. The report is being sent to me by the University of Minnesota Hospitals and will be available if desired, The second of the additional Lomotil intoxication cases is that of James Hesse, St. Paul, Minnesota, who expired on 9/1/63. The attending physician was Di~. Leonard Phillips, St. Paul, Minnesota. This is a case of a two-year-old white male admitted to St. Joseph's Hospital, St. Paul, Minnesota, on 8/29/63 in a comatose state. According to Dr. Leonard Phillips, the child was receiving Lomo- til for a chronic diarrhea thought to be caused by teething. The child ingested 10 to 20 tablets of Lomotil, and according to a consulting pediatrician, Dr. Shirley Lanske of the University of Minnesota Hospitals, the patient was un- responsive from the time of admission until the time of death. According to Dr. Lanske, there was a time lapse of 12 to 15 hours between the time of ingestion and the time she saw the patient in the emergency room of St. Joseph's Hospital. The patient was receiving Lomotil tablets at least several days prior to the time of the overdosage. According to Dr. Phillips, this is a litigation case. The chart from St. Joseph's Hospital, St. Paul, Minnesota, on James Hesse is exhibit #13. A drug reaction report was made out by Dr. Jarvis for the Ehrich ease for the G. D. Searle Company. A copy was obtained and is submitted as part of exhibit #1, with the autopsy report. The Information not filled in was left out by Dr. Jarvis because it was either available in the autopsy report or in the charts. Drug reaction reports have been filled out for the other two cases as truly as is possible. FRED S. HALVERSON, In~spector. PAGENO="0246" 1390 COMPETITIVE PROBLEMS IN THE DRUG INDUSTEY ~ JUNE29 196G. To Acting Chief DSB/DMR From A L Kairnnsky M D Medical Officer DSB/MI3R Subject Lomotil NDA12-462 12-699 Toxicity and lethal effects in children (G P Searle & Co Chicago Ill AF 13-505) Hospital records and autopsy protocols received in deaths of Terrence J Erich 3 years old and James Besse 2 years old The former due to toxicity to thera peutic (`?) dose and the latter to overdosage Dr Charles Jarvis Pathologist to Children s Hospital St Paul Mimi sums up the substance of the death in a letter to Dr Goddard dated May 19 1966 quote I gather they (Searle & Co) do not know what an overdose is or how it reacts on the living organism I find this state of affairs appalling Conclusion It was recommended in a Summary of Supplement of September 16 1965 dated April 27 1966 signed Aaron L Kaminsky M D that 1 Dosage-Children Delete entire section No studies have been performed using diphenexylate hydrochloride with 005 mg atropine sulfate in children The uncontrolled studies on children were ac complished using R1135 (diphenoxylate hydrochloride) Adverse reactions in eluding deaths have been reported in children using therapeutic doses Further more fraction of tablets and teaspoons (varying from 4-5 cc) are really not proper dosage forms for children who are very sensitive to the action of atropine 2 Summary It is recommended that 1 The drug be discontinued for children under 12 years of age No valid well controlled and double blind studies were performed delineating the safety and efficiency of diphenoxylate hydrochloride with atropiue sulfate (0025 mg) for children 2 A warning label to indicate the dangerous nature of the drug on children e g Warning Keep Out of Reach of Children Dangerous Drug 3 Labeling change are necessary as enumerated to labeling action The labeling is in dire need of updating correction, amendment additions and deletion of dosage for children 4 Atropine even in subtberapeutic doses should be removed from the mixture especially to obviate mortality in children It is the considered opinion of the undersigned agreed to by G M Carroll M P (Pediatrician) that Lomotil HC1 with atropine sulfate is not safe for children under 12 years of age There are no adequate controlled studies for various age groups and for delineation of absorption degradation and excretion in children in a time sequence SUMMARY or SupPlEMENT NDAs 12-462 (tablet) 12-699 (liquid) G D Searle & Company Chicago Illinois AF 13-505 App. Date: 9/29/60 (NDA 12-462); 1/17/61 (NDA 12-699). Nov. 22, 1961 (Supplement). Aug. 9, 1965 & Sept. 16, 1965-( Supplement). Type of Drug~-Antidiarrheal. Trade Name.-Lomotil. Generic Name.-DiphenoXylate Hydrochloride and Atropine Sulfate 0.025 ing, (1/2400 gr.). Dosage Form-Tablets 2.5 mg; Liquid 2.5 mg per 5cc. Date of Supplement -Nov 22 1961 Aug 9 1965 and Sept 16 1965 Chemist ~Summary.-see Chemist Summary Pharmacologist $ummary.-No new pharmacology. Vol. 1 three III, 130.13 re- port of September 14, 1965. Clinical Evaluation._DiPhenOxYlate Hydrochloride, a congener of meperidine (Demerol) with atropine sulfate 0.025 mg. (Lomotil) is indicated in the treat- ment of diarrhea secondary to motor disturbance, acute or chronic discs sos of the gastrointestinal tract, and systemic disease. It is an adjuvant to specific and general therapy for the various functional, organic and post operative disorders of the gastrointestinal tract manifested by diarrhea. PAGENO="0247" COMPETITIVE PROBLEMS IN THE DRUG INt~USTRY 1391 All studies cited as part of the NDA's were performed with diphenoxylate hydrochloride without atropine sulfate, which is now included in the mixture called Lomotil. The original liquid form was deleted from NDA 12-462 because of stability problems. The company modified the liquid dosage from 2.5 mg. per 4 cc., in NDA 12-699, to 2.5 mg. per 5 cc. to conform with that enumerated, in the approval as an exempt narcotic, in the Federal Register, Tuesday, July 25, 1961. The same studies used for NDA 12-462 were used in the application of NDA 12-699. Labeling remained unchanged. The drug was approved as Lomotil, (diphenoxylate hydrochloride with atropine sulfate), without any clinical, phar- macological, (animal and human) and toxicological data and studies evaluating actions, safety and efficacy of the drug as a mixture. The company reported on 521 patients evaluated by 31 clinicians in the United States and one (1) in Belgium; 830 cases by 88 investigators in Belgium, France and the Belgium Congo. The studies were poorly controlled to uncontrolled, and testimonial as noted in an "Evaluation and Summary" by John Nestor, M.D., Vol. I (7 pages) dated 5/14/64 and Vol. II (7 pages) dated 7/21/64. G. van Dorstoppen et al, used R1132 (diphenoxylate hydrochloride) in 10 ileostomy patient's and evaluated the drug against a placebo. The drug was effective in 8 patients. Isbell and Fraser, in a beautiful study, evaluated the abuse potential and addicting dosage for diphenôxylate hydrochloride. They found the drug non- addicting in therapeutic doses. The clinical reports indicated that the usefulness of the drug was greatest in the diarrhea associated with the irritable bowel syndrome, (functional bowel), and in the acute diarrhea. It was least effective in the. diarrhea associated with moderate to severe regional enteritis, ulcerative colitis and other inflammatory disease of the bowels. The fact of that specific modalities of therapy were used must be noted, e.g. drug, supportive and psychologic. These, in themselves, may modify the diarrhea by either ameliorating and/or curing the underlying dis- order. Lomotil is only an adjuvant in the treatment of diarrhea. The only double blind study available to me was by H. Barowsky and S. A. Schwartz, JAMA 1962. They used Lomotil tablets, placebo and camphorated tincture of opium in 40 patients with varying diarrheal disorders. They con- cluded that, "at varying levels of daily dosage a 2.5 mg. dose of diphenoxylate hydrochloride (1 tablet) is equivalent in antidiarrhea efficacy to 4 cc. of camphorated tincture of opium." In mild cases, Lomotil tablets gave good re~ suits with a decreasing effectiveness with. increasing dosage in moderate to severe conditions. The drug was found useful in chronic diarrhea where addic- tion to an opiate may be undesirable Clinical experience, as revealed in the reference section and the letter of Davis, DVM, (FDA) .of the toxicology section, indicated safety and efficacy of the drug in tablet or liquid form for adults. There are no valid or controlled clinical studies using diphenoxylate hydro- chloride with atropine sulfate in children, pregnancy or lactation. Adverse re- action of serious import involving atropine toxicity have been reported in chil- dren; 13 with recovery, 6 with deaths, overdosage with tablet and liquid forms of the drug were responsible for 14 reactions with 4 deaths. Therapeutic dose regimens accounted for 2 deaths and 4 reactions with recovery; 1 child had permanent brain damage. Review of Labeliii~g.-Last approval date supplement September 24, 1965 and date of insert 1960 and 1961. The last, insert of 1961 reads as follows: "References and a more detailed discussion of Lomotil are contained in Searle Physicians Product Brochure No. 81, available from the Medical Service Dept. 0. D. Searle & Company, P.O. Box 5110, Chicago SO, Illinois." "September 5, 1961". The 1961 insert is an abbreviated 1960 new Product Brochure #81. The physicians brochttre and the insert are in dire need up updating, correction, amending with additions as noted below: 1. Contraindications. 2. Precautions. 3. Adverse reactions and deaths. 4. Overdose and treatment. 5. Antidotes. 6. Elimination of dosage for children. A partial review Of the Brochure #81 añddrug insert dated in 196l~ reveals the following deficiencies and need for change: PAGENO="0248" 1392 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Page 1, par. 3 line 4: Substitute: "but such `agents have an addiction potential with long term use except in those individuals with a history of addiction or barbituation to nar- cotics in the past." Instead of: "but such agents are frequently over constipating and they have a recognized addicting potential." A double blind study concluded 2.5 mg. Lomotil was effective as 4 cc. of cani- phorated tincture of opium (Barowsky and Schwartz). Codeine was preferred by a few patients to Lomotil (Bachrach and Voigtlin). Codeine, tincture of opium and other narcotics are not more constipating than Lomotil, a congener of me- peridine (Demerol). The addiction potential of a narcotic is type, time and dose related. The longer the use of a narcotic the greater the addiction or abuse potential. The only ad- vantage of Loinotil, in therapeutic doses only, over the use of other narcotics for the treatment of a symptom chronic diarrhea it is minimal addicting potention en long term use. Page 2 Clinical Application: line 1 delete "excessive" after "undergone." Line 2: Substitute: "It, as an `adjuvant to specific therapy and `a general treat- ment program" for: "It is the sole treatment or as part of a general treatment program." Line 12: Add after "regional enteritis" mild. It has been shown that moderate and severe inflammatory disease of the intestinal tract, e.g. regiOnal. enteritis, ulcerative colitis, acute ileitis of varying etiologies, etc., react poorly, if at all, to the administration of Lomotil and other narcotics. A compensated incomplete intestinal obstruction secondary to the intrinsic granulamatous disease process of regional enteritis may be converted to a com- plete obstruction by the use of this drug; and, an ileus created in ulcerative colitis. (Sleisinger and Almy) Line 14: Add "mild" after "ulcerative colitis". Poor results were reported. in the use of Lomotil in moderate and severe ulcerative colitis. Precaution~must be exercised in the use of the drug to obviate ileus with possible complicating toxic megacolon, perforation, etc. Page 3, par. 2 line 3 beginning "Machella" change "6" to "8". Line 4: Change "9" to "8". Line 17: Add, after "seen no undesirable sequelae", the statement: "There were no efficacious results even with high dosage (40 mg. daily) in sprue, re- gilonal enteritis and fair to poor results in 5 cases of ulcerative colitis". Line 18: After "have ever used" add in parenthesis (1 case). The testimonial of one ease questions the accompanying quote of "it is the best I have ever used" in the brochure. Page 5 par. 1 line 8: After "treatment" add~8 patients benefited from treat- ment. See authors summary and conclusions. Par. 2 line 6: Add "which is generally a self limiting disease" instead of "effect in acute diarrhea." Dosage-Children: Delete entire section. No studies have been performed using cliphenoxylate hydrochloride with 005 mg. atropine sulfate in children. The uncontrolled studies on children were ac- complished using R1135 (diphenoxylate hydrOchloride). Adverse reactions, in- cluding deaths, have been reported in children using therapeutic doses. Further- more, fraction of tables and teaspoons (varying from 4-S cc.) are really not proper dosage forms for children who are very sensitive to the action of atropine. Par. 6-Side effects: Add: headache, lightheadethiess, toxicosis, angloneurOtic edema giant urticaris lethargy anorexia atropine effects respiratory thffi culty and coma. NoTE-The statement that "Side Effects are relatively rare" Is not accurate e.g.: Schwartz, 24 sIde effects in 53 pts. 24/53. Bachrach, 2 side effects In 6 pts. 2/6. Voigtlln, 5 side effects In 11 pts. 5/11. Klotz, 4 side effects in 24 pts. 4/24. Texter, 3 side effects In 15 pts. 3/15. McGlone, 5 side effects In 24 pts. 5/24. (Severe enough to wlt~drawd~ug) European study, 24/364. This does not constitute, in any language. statistically or otherwise Infrequent reactions, nor can one justify the appellation of relatively rare" to the number and type of reactions. Nausea, as one (1) symptom, was corrected In many Instances by wIthdrawing the drug or reducing the dose. Can this deserve the statement that most cases of nausea were due to the underlying conditIon or it Is apparent the drug contributed Its share to the production of nausea in bothadults and children? PAGENO="0249" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1393 SUmsuary It is recommended that: 1. The drug be discontinued for children under 12 years of age. No valid, well controlled and double blind, studies were performed delineating the safety and efficacy of diphenoxylate hydrochloride with atropine sulfate (0.025 mg.) for children. 2. A warning label to indicate the dangerous nature of the drug on children e.g. "Warning: Keep Out of Reach of Children, Dangerous Drug." 3. Use in pregnancy and lactatioti is co~tralndicated unless studies are avail- able to indicate safety. 4. Diphen'oxylate hydrochloride with atropine sulfate is a safe and effective drug for diarrhea when used as an adjuvant to specific therapy for the under- lying disorder causing diarrhea in adults. 5. Labeling changes are necessary as enumerated in labeling section,. The labeling is in dire need of updating, correction, amendment, additions and dele- tion of douage for children. 0. Lomotil is no more effective thau other narcotics. The only advantage it en- joys is that of markedly decreased addiction potential over other narcotic drugs used in diarrheal disease. 7. Atropine, even in subtherapeutlc doses, should be removed from the mixture especially to obviate mortality in children. A. L. KAMINSKY, M.D., Drug ~urveiUance Branch/DMR. SUMMARY OF Rur'owrs Date Summary Completed: 10/24/67. NDA 12-462 (tablets), 12-699 (liquid). G. D. Searle & Co., Chicago, Ill., AF 13-505. Original approval date: 9/15/60 (12-462); 1/17/61 (12-699). 2~Tam,e of Drug.-Trade: Lomotil. Generic: diphenoxylate hydrochloride and atropine sulfate. Dosage form8 a~ul route of adinAnistration.- 1. Tablets, oral; diphenoxylate HC1 2.5 mg., atropine SO4 0.025 mg. 2. Liquid, oral; diphenoxylate HC1 2.5 mg., atropine 504 0.025 mg. per 5 cc. Category or Use of Drug.-Antidiarrheal (exempt narcotic) Date of Reports.- 1. April 18, 1966 7. June 20, 1966 2. May 17, 1966 8. July 14, 1966 3. May 24, 1966 9. March 2, 1967 4. June 6, 1966 10. April 19, 1967 5. June 14, 1966 11. April 27, 1967 6. June 15, 1966 Reason for Reports.-Adverse reaction reports Material Reviewed.-Report as follows: / uearz~ Dates of uearze Dates of Case No. Reports Case No. Reports A. LO 2-66 1. 4/18/66 G. LO 8-66 1. 6/20/66 2. 6/15/66 2. 7/14/66 B. LO 3-66 1. 6/6/66 H. LO 2-67 1. 3/2/67 C. LO 4-66 1. 5/17/66 2. 4/19/67 D. LO 5-66 1. 5/24/66 I. LO 4-67 1. 4/19/67 2. 6/15/66 2. 4/27/67 B. LO 6-66 1. 6/14/66 F. LO 7-66 1. 6/20/66 2. 7/14/66 Clinical Evaluation. A. Searle Case #LO ~-66 dated 4/18/66 and 6/15/66. Adverse reaction report follow-up (of 3/18/66 report) of fatality in a 3 year old child who had received Lomotil tablets under the `supervision of C. W. Jarvis, PAGENO="0250" 1.394 COMPETITIVE PROBLEMS . IN' THE DRUG INDUSTRY M.D., St. Paul, Minn. Analysis of blood samples submitted by the child's physician to G. D. Searle and Co. for serum diphenoxylate, levels (Searle analytical #A-7202) revealed values for the sample of &9 mg. or 4.4 mg. per 1. depending on whether the standard reference sample was a 2 mg. or a 11/2 mg. standard, respectively. The . former figure was believed to be the most, accurate value (3.9 mg.). No conclusions regarding the blood level figures were made by the firm. Autopsy of patient T. J. E., age 3, male at The Childrens Hospital, 311 Pleasant Avenue, St. Paul, Minn. 55102, yielded the following final diagnosis: 1. Complete bundle branch block with acute cardiac decomp~nsation. .,~ 2. Diphenoxylate (Lomotil) toxicity. 3. Puin~ouary edema., , ` ` . 4. Pneumonia. 5. Cerebral edema. , :6 Acute passive congestion of the liver. , . B. Searle Case #LO 3-66 dated 6/6/66. Report of urinary retentiOn in `a 2 year' oldchil'd (male with initials C. S. `F.) following 4 doses of' approximately 1/2 tsp. Of Lomotil liquid gii'en at' 6 hour intervals because of diarrhea. The drug was discontinued and the child catheter- ized. ROcovery followed. ` ` ` ` . Impression: D,rug related adverse reaction. ` ` ` "` C. Searle' Case #LO 4~-66 dated 5/17/66 A ease of aplastic anemia in~a `73 year old housewife (initials L. B. F.) was reported by George El. Clark, Jr., M.D.; No. `1 Medical Arts Squire, Austin, Texas. The only drug taken by the patient prior to onset of the disease had `been Lomotil tablets 1 to 2 daily taken interrnittentl~ sinëe `5/10/65 for chronic diarrhea. A bone marrow study on 4/4/66 showed marked hyperplasia. The patient died on 4/30/66. ` . No past report similar to the above have been reported to this drug, Impression: Cause and effect relationship considered uncertain., D. Searle Case # LO 5-66 datel 5/24/66 and 6/15/66 Report of a death of a 2 year old child by Fred Heaton, M.D., 7000 Cutler `Street, N.E., Albuquerque, N.M., who accidentally ingested between 12 to 22 tablets of Lomotil. (Death occurred despite, intensive symptomatic and sup- portive therapy carried out at St. Joseph Hospital, Albuquerque, N.M.). Impression: Cause due to accidental Lomotil overdosage. Autopsy report on patient F. M. H., age 2, female from the Presbyterian Hos- pital, Albuquerque, N.M'. 1. Intrapulmonic hemorrhages, moderate, bilateral. 2. Petechial hemorrhages, epicardium. 3. Reactive lymphadenitis, moderate, mesenteric. 4. Medullary and cerebral edema, moderate with a few petechial hemor- rhages of the cerebellum. No anatomical cause of death ascertained. El. Sear'le Case # LO 6-66 dated 6/14/66 Report of a fatality involving a 3 year old child who ingested an overdosage of Lomotil and Hydrodiuril. (Two vials containing 30 Lomotil tablets' and 10 Ilydrodiuril `tablets were found empty and it was assumed that the child had ingested them). Despite heroic measures at the local hospital in Elk River, Minn. and later at the University of Minn. Hospital, the child expired. Death was considered to be due to an overdosage of Lomotil, with, hydro- chlorothiazide d'osage a contributing factor. F. Searle Case # LO 7-66 dated 6/20/66 and 7/14/66 Ingestion of 20 to 30 Lomotil tablets by a 19 month old child 12 hours prior to examination by Dr. A. P. Hartman, Box 2555, Billings, Montana on 6/15/66. Hospitalization, use of Nalline and artificial ventilation were advised. On 7/15/66, a follow-up report stated that the child had recovered. Impression: Reaction from accidental Lomotil overdosage. G. Searle Case # LO 8-66 dated 6/20/66 and 7/14/66 Ingestion of 10 Lomotil tablets by a 2 year old girl approximately 3. hours prior to hospital E. R. visit at Lutheran General Hospital, Park Ridge, Ill. Gastric lavage carried out and the patient was hospitalized. Nalline administration ad- PAGENO="0251" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1395 vised, as well as close observation and artificial respiration. A follow-up report dated 7/14/66 stated~that the child had recovered. Impression: Reaction from Lomotil overdosage. II. Searle Case # LO 2-67 dated 3/2/67 and 4/19/67 Report of a fatality in a 2 year old child *ho accidentally ingested approxi- mately 8 Lamotil tablets 12 hours prior to arriving at the Shawnee Mission Hospital, Shawnee, Kansas, D.O.A. An autopsy was perfortned which revealed pulmonary congestion consistent with the picture of Interstitial viral pneumonitis, reticuloendothelio byperpla sia, and a hypoplasia of the adrenal cortex. The final diagnosis of cause of death is listed as acute pneumonitis. "The results of toxological examination of the stomach contents show no atropine nor diphenoxylate to be present. The blood sample was insufficient for evaluation (quantitative) of diphenoxythte. Histo- logical iinding~ are consistent with those seen in children dying of acute viral pneun~onitis and it is felt that the cause of death in this child is of this etiology." Impression: Death probably not hue to drug but viral pneumonitis. I. Searle Case # LO 4-67 dated 4/19/67 and 4/27/67 Case of fatality from Lonrotil overdosage in a 2'/2 year old girl treated at the University Hospital, Western Reserve University, Cleveland, Ohio. Sh? allegedly ingested 8 tablets of Lomotil. Heroic symptomatic and supportive i~herapy given. Follow-up autopsy by the Coroner's Office, Cleveland, Ohio yielded the fol- lowing: a. Lungs: Hcm.orrghagic broncbOpneumonia. b. Stomach: Acute ulcer. c. Kidney: Renal tubular necroses; Protein casts. (Most of tubular epi- thelium is preserved). d. Brain: Marked cerebral and cerebellar edema. Subarachnoid hemor- rhage, focal, slight. The tissue forwarded to Searle for laboratory analysis was received by the firnr in such pOor condition as to make them useless for analysis. Impression: Possible death from Lomotil overdosage. MARVIN SEIFE, M.D., Acting Director, Di/vision of Cardiopulmonary Re~uti Drugs/ODS. PIIARMAC0L0GI5T's SUMMARY Date Summary Completed: July 21, 1967, NDA 12-699. Company: 0. D. Searle & Co., Chicago, Ill. Original Effective Date: September 19, 1960 (12-699 OED 1/17/61). Name of Drug.-Lomotil. Generic, Narne.-Diplienoxylate hydrochloride with atropine sulfate. Category.-Antiperistalic agent. Dosage.-To 20 mg/day for adults in divided doses, orally. Material Reviewed.- Report of Acute Oral Toxicity of Lomotil Liquid dated July 12, 1967. These are useless studies on the toxicity of the components of the vehicle of Liquid Lomotil. We requested ~`acute and subacute studies of toxicity in the newliorn and adult to determine the relative toxicity of the mixture of drugs (2.5 mg diplienoxylate and 0.025 mg atropine sulfate) as the dry powder and as the syrup." Studies of the vehicle or components of the vehicle do not give any information as to a possible difference in absorption of the drug in the presence of the liquid vehicle. The studies which were requested should be submitted. Loulsu L. PHILLIPS, Ph. D. ADDENDUM TO SUMMARY OP SUP~'LEMENT NDA 12-699, DATED AUGUST 1, 1967, REGARDING Ruronv DATED AUGUST 16, 1967 Report on NDA 12-699 (Lomotil Liquid) entitled "Acute Oral Toxicit Study- Weanling Rats, Diphenoxylate ItCL-R1132, Lomotol Power, Lornotil Liquid- Final Report" dated 16 August 1967 and signed by Herbert Helling, Food and Drug Administration Liaison Coordinator. The report supplements the previous incomplete report. PAGENO="0252" 1396 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY The FDA pharmacologist, Dr. L. L. Phillips, has `reviewed the above report concluding that " * * `Lomotil is more toxic to the young animal than to the adult and that the liquid form is more toxic than the powder-~perhaps due to increased absorption from the gastro-intestinal tract." Her recommendation was that "k * * weight proportional doses should he prescribed for children and that lower doses of the liquid than the powder should :be recommended." The `reviewer cannot but wonder whether the acute studies in weanling rats can be extrapolated to human infants and children. `J~'be majority of deaths with Lomotil were accidental. There have been a paucity of deaths on therwpeutie- dosages, after 6 years of use of the drug. The drug was approved 9/15/60 and 1/17/61. The `study on `dosages in a large number of children, supposedly near completion, is awaited before a request for dosage studies and absorption studies may `be requested. Conclusions The drug is safe as originally approved. Efficacy is being evaluated `by the appropriate NAS-NRC panel. Recom~mendations 1. The `supplement and reports reviewed be permitted under 130.9(d) of the regulations. 2. The company be `requested to revise the package insert as recommended. AARON `L. KAMINSKY, M.D., Division of Cardiopulmonary Renal Drugs/ODI&. PHARMACOLOGIST'S SUMMARY Name of Druy.-~Trade: LomotiL Generic: Diphenoxylate hydrochloride with atropine sulfate. Dates of ~upplement.-Supplement August 9, 1965 and September 16, 1965. Annual Report August 30, 1966. Therapeutic Indication.-Antiperistaltic agent. Usual Human Dose and Route.-To 20 mg/day for adults in divided doses, orally. Material Reviewed.-Two reproduction studies from Huntingdon Research Center. Huntirigdon, England. One acute toxicity study from Searle Toxicity Lab. July 20, 1905. Bummary Teratologic studies have been performed on three animal species: rabbit, rat, and mouse at doses of 0.4, 4.0 and 20.0 mg/kg/day of Lomotil equal to 1X lox ahd 50X human theraupeutic dose (HTD). There was no evidence of anomalies in any of the fetuses. This included 69 rabbit, 91 rat, and 105 mouse fetuses at the two higher doses. Abnormalities in all species were found on thalidomide (150-200 mg/kg) used as a positive control in the ratio of 6/6 rabbits, 1/56 rats, and 4/32 mice. Resorptions and stillbirths were similar in the test and negative control groups but higher in the positive control in rabbits and rats. There was a slight reduction with borderline significance in fetal weight In the mice given Lomotil but the differences were not dependent. In a different series on long term subacute toxicity studies carried out on male and female rats with feeding lox and 50X HTD for 80 days prior to mating and then throughout three cycles of pregnancy and weaning there were no differences in mortality of the adult groups. Food consumption for the first 8 weeks did not vary significantly but was slightly elevated in males' and slightly decreased in females of all test groups. Weight changes reflected the food consumption for this period with an increase for males and a decrease for females. Fertility in term.s of percent pregnancies and size of litters was depressed In animals receiving 20 mg/kg/day Lomotil, and thalidomide. Neonatal loss was also greater in these two group's but losses were high in all groups due to handling. The decreased fertility on the high dose of Lomotil and on thalidomide was nocentuated in the 2nd and 3rd matings. No anomalies were observed in 143 young at 4 mg/kg level or 45 young at 20 mg/kg level. Two abnormalities appeared in the first pregnancy on thalidomide and 4 in the second from a total of 33 offspring. PAGENO="0253" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1397 Acute toxicity studies of Lomotil and Neomycin showed LD~0 in the adult mouse administered intragestrically to be greater than 1 gram/kg for either drug alone or as a mixture. Intraperitoneally, LD50 in the mouse was greater than 1 gram/kg for Lomotil, 240±24 mg/kg for neomycin and 315±32 mg/kg for the mixture (1 part of Loniotil to 50 parts Neomycin). In the rate a 4ouble peak of 50% mortality made precise LD50 calculation of Lomotil alone impossible. These peaks came at 130 mg/kg and 450 mg/kg both orally and I.P. LD50 for neomycin and in the mixture were greater than 1 gram/kg orally but 420±64 mg/kg for neomycin and 465±47 mg/kg for the mixture when given I.P. There appears to be no potentlation of LD50 between the two drugs. Evaluation Both reproduction studies indicate that there is no teratogenie effect of Lomotil when fed during pregnancy but that very high doses adversely affect the fertility of the adults (no studies on fertility of offspring) when fed for long periods (60 days prior to mating). However, there is no evidence from the report of the laboratory as to the form in which the drug was given. If the studies were performed on the mixture (2.5 mg cliphenoxylate to 0.025 mg atropine sulfate) then the results suggest a statisfactory margin for safe usage in pregnancy. If they were performed only on the diphenoxylate they should be repeated using the mixture. There is also no indication as to whether the syrup or dry material was used. There might possibly be an increased absorption of either or both drugs from the syrup. (The deaths in children, except those due to accidental Ingestion of huge doses, followed administration of the syrup rather than the tablet form). Acute and subacute studies of toxicity in the newborn should be run con- currently with adult studies to determine relative toxicity of the mixture in both forms-dry mixture, and syrup. Until the comparative newborn Vs. adult studies are reported and evglu~ted, It is urgently suggested that a stronger contraindication be placed In the labeling against administration to infants and young children. * S L. L. PEn.LiPs, Ph. D. SUMMAU OF REPORT `Date Summary Completed: 9/11/67. NDA 12~462~12-699. 0. D.~S~arle, Chicago, Ill. Original Approval Date: 12-462 9/19/60; 12-6991/17/61. 5 Name of Drug.-Tràde-Lomotil. Generic-DiphentxyIate.Ho1 with atropine sulfate. Doeage Forrn~ and Rante of 4drnini8tratlon.-To 20 mg/day for adults, orally; children from 3mg (3-6 months old) ; to 10mg/day (10-12 years old)~ , Category or Use of Drug.-Antiperistaltjc, "S' S S S Material Reviewed S Report entitled "Acute oral toxicity study in weanhing rats, of diphenoxylate MC1, Lomotil Powder, and Lomotil Liquid. The report shows that diphenoxylate HC1 alone has an LD50 of less than 117 mg/kg while the Lomotil Powder has LD5O of 47 (males) to 71 (females) mg/kg in 25 day old weanling rats. This is from 2. to 10 times the toxicity found in the adult LD5O (130-450 mg/kg). The Lomotil Liquid has an LD5O equivalent to 22.8 mi/kg or 11.4 mg/kg in the weanling rats. This is 4 to 6 tImes the toxicity evinced by the dry powder. Most of the deaths of rats with the powder occur within 2-S `days following ad- ministration of the drug and the dose response curve is flat. This tends to inch- cate that there may be occasional extreme susceptibility to the drug or increased absorption. On the other hand after Lomotil Liquid `the animals ustially died Within 24 hours `of dosage and the dose-response curve was steeper. Both of these facts iridi- cates absorption of the drugs to be more rapid and more uniform from the liquid than from the powder. ` * Clinical Evaluation * S These studies make it evident that Lomotil is more toxic to the young animal than to the adult and that the Liquid form is more toxic than the powder-per- haps due to increased absorption from the gastro-intestinal tract. This increased PAGENO="0254" 1398 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY toxicity may explain the two deaths of children from relatively normal doses of the Lomotil Liquid. Recommendations The subacute toxicity studies which are supposedly in progress may add more information on the relative toxicity of liquid vs powder and child vs adult. It would appear that less than weight proportional doses should be prescribed for children and that lower doses of the liquid than the powder should be rec- ommended. LOUISE L. PHILLIPS, M.D. MEMORANDUM DECEMBER 22, 1965. To: R. r. Robinson, M.D., Chief, Drug Surveillance Branch/DMR. From: L. V. Pascual, M.D., Medical Officer, DSB/DMR. Subject: Report of overdose in association with the use of Lomotil. (G. D. Searle & Co., Chicago, Ill. (A.F. 13-505) NDA 12-4~2) This "Drug Reaction Report" from Dr. Miller was submitted by AdversO Reaction Branch/DMI on September 20, 1965. This report as well as two others was submitted by the company to FDA on July 20, 1965. Lomotil went through the New Drug Application stage' without th~ atropine added. ` ` The marketed drug contains atropine' sulfate supportably in sub-therapeutic quantity "to prevent overdosage". We are not aware' of any pre-clinical ` oi~ clinical trials performed with this combination. This combinatiOn should be considered a new drug. (Please see Memo of Dr. J. Nester dated May 14,' 1964). Concinsions The suggested warning statement pertaining to overdosage should be considered together with a complete revision of the labeling following evaluation of the data submitted in the NDA. (The supplemental information submitted by Mr. Stetler, subse- quently received, follows:) ` ` ` PHARMACEUTICAL MANUFACTURERS `ASSOCIATION, Washington, D.C., December 1'~2, 1l~67. Hon. GAYLORD NELSON, ` ` ` ` Cha~lrman, Subcommittee on Monopoly Select Committee, om~ SmaU Business, U.S. Senate, Washington, D.C. DEAR SENATOR NELSON: I respectfully refer you to pages `2269 to 2272 of the hearings conducted on November 16, 1967, before the Senate Monopoly Subcom- mittee of the Select Committee on. Si~nall~ Business. `` On the cited pages Mr. Benjamin Gordon made certain statements alleging that the G. D. Searle & Co. added the active ingredient' atropine sulfate to its drug LOMOTIL witbo~t first ottaining the approv'al of the Food and" Drrig Administration even though a' new drug application covering the drug was, at that time, in effect. Mr. Gordon stated that his allegation was based upon in- formation appearing in "a summary of the NDA. 12-462 Volum~ II . . ." The "summary" was "signed by John Nester, Medical Director, FDA" (page 2272). The document involving LOMOTIL is' apparently not "a `summary of the NDA." Instead, it appears to be an internal FDA memorandum prepared by Dr. John Nesto'r, to serve as a critique of the material in the NDA file. G. D. S~arle & Co. holds an approved new drug application for LOMOTIL. The com- pany has informed us that this application was originally approved on Septem- ber 29, 1960, for a product with atropine, wi'th exactly the same ingredients as those in the product now marketed. The product originally tested did not contain atropine, but this was never marketed. Atropine, in a non-therapeutic quantity, was added to the formula, prior to approval of the NDA, at the request of th'e Bureau of Narcotics. The Bureau's suggestion was in accordance with a recommendation of an advisory con~milttee of distinguished scientists. On November 16 you asked Mr. Gordon, "Are you `saying that after a new drug application was granted, that the company involved added another active PAGENO="0255" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1399 ingredient without nc~tifying the FD'~?" Mr. Gordon stated that, "That is cor- rect." `(Pag~ 2272) On the contrary, it appears that the active ingredients were not changed after the product was on the market. I request that this letter be made part of the hearings and that in the final printed record it be ins~rted' immediately after the materials presently con- tained on pages 2269 to 2272. Sincerely, C. JOSEPH STETLER. Mr. STETLER. Are you saying this is a situation where they should have and did not have it approved by the FDA? Mr. GORDON. That is right. Mr. `STEmER. What I am stating is, I cannot account for any excep- tion. But the rule is that to make a change of significance of this type in a product it shall be cleared with a supplemental NDA. So this is not a free right the company has to make these decisions. Mr. G0IWON.. Let me read part of the NDA summary on Lomotil: Laboratory work was practically nonexistent. That is such things as stool cultures. In many cases there was current therapy with other drugs, such as steroids~ sulfanoinides, tranquilizers. In manycases it was difficult or impossible to read, and interpret the individual case hjstories which were lacking in sig- nificant detail- and so on. No mention is made of laboratory work, and there are no individual case histories. This is still about j~motii,: It immediately `beeo~ies appar&~t that the drug LomOtil as promoted is a combination of diphenoxylate. and atropine sulfate whereas all of the investiga- tional studies, both on man and animals, and all of `the clinical work was done only on dlphenoxylate hydrochloride.' This isau ~ample where the FDA approved a ai~ug.'and then the f~rmuia ~ chauged. `, , , ". Mr.,'S~r~Eji. .Obvipusly, I 4c not know what you are reading from.. Mr. GORPQN.T am read~ngfrc~m the surnmary of N~A, which came from `the files `~f the F'ood and Drug Administration. Mr. S~nrn~. Is that an NDA that they filed and the FDA found that the `evidence was inadequate? `Is it a complaint `against `Searle that they did not file a supplemental NDA? My point is, it is required to be filed. If. somebody did not do it properly, `and you `have one specific example of it, that'does not prove the rule. Mr. CUTLER. May we have the document you are reading from, Mr. Gordc~n? Mr. GORDON. Yes; you can have it right here. This is `a summary of the NDA 12-462, volume II,, on NDA 12-462, Lomotil, and it was signed by .John 0. Nestor, Medical Director, FDA. Senator NELSON. Are you saying that after `a New Drug Application was granted, the company involved added another active ingredient without no~ifyiug `the FDA? , . , Mr. GORDON. That is correct.. Mr. STETLER. I am not saying they did or did ,not. All I am saying is that the rule requires that it be done. Senator NELSON. That was not clear from what you were saying. I suppose `the only point of that is that a substantial number of com- panies have had drug recalls7 both brand- and non-brand-name firm's. An'd `the, problem we deal with here continuously is the assertion by brand-name companies or supporters of brand-name companies that PAGENO="0256" 1400 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY all the problems-far and away the major problems that occur with respect to drug quality and quality control-are with generic drugs, and, therefore, everybody is out to prescribe brand names. I do not think the evidence we have been gathering support that assertion. I do not know that it would support an assertion either way. Mr. STETLER. The last paragraph on page 12 in my statement is right on that point. Let me state emphatically that we do not claim that all drug prod- ucts marketed by brand name are high quality or that all products marketed generically are low quality. Many PMA member companies market some of their drugs under generic rather than brand names. We do claim that two drug products containing a specified amount of the same active ingredient may, depending on manufacturer capabil- ity and quality control know-how, vary in quality and therapeutic effect, and that this can be so whether one or both products are mar- keted by brand or generic name, and whether one or both manufac- turers are members or nonmembers of PMA. Senator NELSON. I do not think anybody will argue with that sta1~&~ ment. It is true. That isn't the test of whether or not the drug meets a proper standard. Mr. STETLER. May I go on? Senator NELSON. Yes. Mr. STETLER. On pages 13 and 14 we talk about various surveys, and the experience of the Department of Defense-all relating-for the nexit two or three pages, through 15-to really what we think are available or not available to the doctor in his actual prescribing. Senator NELSON. I have read that, and I do not have a question on it. Mr. Si~wrLm~. On the bottom of page 15 I would pick up and say, in summary on this point, that I do not presume to speak for .the medical profession, but I cannot imagine there would be any sub- stantial dissent within that body from the following propositions: (1) A physician should consider first the known therapeutic effect and known quality of each drug product available to meet the particular needs of his patient. (2) If a choice is available among effective drug products of satisfactory quality, the physician should take price as well as therapeutic effect and q~ualIty into consideration when prescribing. (3) Unless the physician is satisfied that all drug products of the generic class he decides to prescribe are substantially thera- peutically equivalent and of high quality, he should identify the source of the drug product on his prescription that he wants his patient to receive. As we have said, we believe the doctor's most reliable guarantee of quality is his prior experience with the product of a particular manu- facturer. Nevertheless, recognizing the importance of price, we would support effective methods of informing physicians, dentists, and other practitioners more fully than they already are about the comparative prices of different drug products containing substantially the same active ingredients. Senator NELSON. What kind of idea do you have for supporting a more effective method of informing the physician? Mr. Sn~mru. I was able this morning to talk about price in con- nection with the compendium. And I say that with a full realization PAGENO="0257" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1401 that it is easier to say why price should not be in the compendium than it is to come up with a satisfactory alternative. I will say this however: Given the variations that exist in price from day to day and from store to store-and of course the doctor, if he is going to help his patient, has to be concerned with retail prices- it is difficult to suggest a practical current way. I would just say as one possibility-and I have no great pride in this suggestion-possibly through the only organization that is avail- able to him, through a county, possibly a local city or county medical society-they could assume some responsibility in making price in- formation available. That is far from perfect, I am sure. But `I believe it provides more chance of general distribution, and more chance of remaining current, than to try and bind it in' a compendium or in a quarterly supplement to a compendium. Senator NELSON. This morning we talked briefly about a compen- dium. You are aware of Dr. Goddard's testimony last week? Mr. SmmER. Yes, I am. Senator NELSON. At that time he said the industry and FDA would be conferring with the Drug Research Board on this matter. And he also expressed some concern about the lack of progress since the first time this issue was ra~ised 2½ years ago. Is there any realistic prospect that some agreement may be reached on a compendium? Mr. STETLER. I would have to say in terms of one more meeting of the Drug Research Board, the prospects are not good. Just let me men- tion a couple of reasons. `One I mentioned this morning, and that is I really have a very dis- tinct feeling that the doctors, at least to the extent the American Medi- cal Association speaks for them on this issue, do not believe the type of compendium that has been discussed for this last 18 months or 2 years is the kind of book they want. Given that lack of enthusiasm by doctors for the book that is sup- posed to serve them, almost anything I had to say on the subject would not be binding. Secondly, we really have not come to grips with the questions I identified this morning, on the format, the size. UntJi those things are resolved, it is going to be difficult to come to a decision. Now, I am sur~ it is obvious that the industry is not interested in a completely generic compendium. First of all, it gives no identification to their products. It equates the worst manufacturer with the best manufacturer. Unless the manufacturer had some opportunity to indi- cate in the compendium where he might be different or excel-in other words, if he has done the clinical testing we have talked about if that could be identified, as contrasted with those that have not-if he has an opportunity in this compendium to capture or retain some `of the differentiation that is possible in the package insert, I think there would be some enthusiasm in the industry for the compendium. But if he is just going to obtain anonymity in the book, it is going to be hard to expect him to put up the money to pay for it. But I do think until the doctors are much more specific on what they want, it is going to be a tough question to resolve. Now, as far as this meeting of the Drug Research Board is con- cerned, to get a little closer to `the answers to these questions, and since 81-280-68-pt. 4-17 PAGENO="0258" 1402 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY FDA is going to be the final authority on the approved language, it may be a worthwhile exercise to take the first 50 or 100 drugs in the Physicians' Desk Reference, and for the Food and Drug to put down how they would be handled. If I could see the format for the first 100 drugs ui the Physicians' Desk Reference, how that is going to be handled, I think I could come to a much quicker recommendation to our industry as to our rea~tion to that kind of book And I think maybe the doctoi s could say yes or no-that it is a good book, or that is a bad book. Senator NELSON. What is your view of the problem that is sought to be resolved by the use of the compendium? Mr. STETLER. I think there is a very legitimate desire to place in the hands of doctors information about available drug products-not nec- essarily every available drug product, but certainly the ones that are in common usage. Now, I think it should be something less than a package insert, which is much too long and detailed in many respects. But in fairness, again, to the manufacturer, and to the doctor who is going to be making some drug decisions from this book-we should give him some information that is going to let him make a better as- sessment of the producer or the source of these products. I do not think that the doctor now gets that type of information readily from the package insert. But we should not necessarily jump from the package insert to something that also is not going to meet the problem. I am not as impatient as Dr. Goddard is about trying to find out more specifically the answer to some of these questions. But that does not mean that we are opposed to a compendium. We have looked very carefully, incidentally, at your bill, S. 720, which you have said you want to look at some more. But I think, as I said this morning, there is some desirability to the introduction of a new bill and to the conduct of some hearings on it. Senator NELSON. Tell me this. I don't have sufficient knowledge to know what the problem really is. But it is certainly a different problem for the physician who is prac- ticing daily, say, in a university hospital, or in a big city hospital, with a formulary, and pharmacologists and pharmacists available for con- sultation The problem of the physician practicing there is certainly dramatically different respecting the availability of information about the use of the drug in a particular instance than it is, to take the ex- treme case, of a country practitioner alone in a rural area. And it is quite different, I would suppose, for the specialist who deals only with heart patients or who deals only with allergies, or who is an ear, nose, and throat specialist using a very limited number of drugs, than it is for an internist, for example So, for each one of these specialties you have a different problem. And I suppose that the problem of getting information is not as seri- ous for physicians practicing in the hospital as it is for one who does not, nor is it as difficult for one who is in a specialty which requires the use of a very limited number of drugs, as it is for a general prac- titioner. So one problem that has concerned me is how the practicing physi- cian who is alone, or in a very small group, or in a very small hospital, PAGENO="0259" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1403 or a small clinic, is informed about drugs. What is the basic, handy soui~ce? How many drugs would the average internist use? Does anybody know? Mr. STETLER. I suppose anybody could guess on that. I would say, if you had to pick a number, no more than 50 on the average. Senator NELSON. So depending upon how broad his practice, and what kind of a circumstance- Mr. STETLER. An average internist would have this experience in an average type of practice. Senator NELSON. Well, is there any reason why a somewhat limited compendium of a couple of hundred drugs could not be put together that would solve the basic problem for an ordinary practicing physi- cian? I am not sure that the specialist in the hospital is really worry- ing that much about it. Mr. STETLER. I think that is one of our points. When people talk about a compendium of 7,000 or 10,000 products, this is what concerns the doctor.. He says, "You are giving me a useless book that is going to be several volumes that I cannot use effectively." I think you are right when you say that realistically we have to think in terms of a more limited type of compendium. Now, I do know that one difficulty between AMA and the type of compendium that has been discussed by Food and Drug is that any book they put out, such as New Drugs, or the one they are contemplating now for publication in 1968, involves comparative analyses between drugs. That is a different kind of a book, and it is really not the kind of com- pendium that the FDA is talking about. But I think if we could talk, and get the kinks out in terms of a more limited compendium, I think it would have some utility. And I want to make sure you understand we are not adverse to a compendium, depending on what the compendium is for and what it will do. Senator NELSON. We are in the process of preparing another bill, because I am not satisfied with the one I put in. Did I understand you to say this morning that you thought it might be of some value to conduct some hearings so that we could afford an opportunity to the physicians practicing in the various fields, as well as others, to comment on the idea of a compendium? Mr. STETLER. Yes, and industry, and anybody else that is interested. Now, I don't know what might evolve from that, but I think you and Senator Javits have `both said if you had your preference you would rather see the doctors or the industry put out such a book. Maybe through the process of these hearings we would end up there. If we did not and ended up with a Government compendium, so be it. But I think that might be the proper forum to get all of these attitudes and opinions out where they can be observed properly. Senator NELSON. Thank you. I think it might be of some value, too. This would be one way to get in the record the best testimony we could from the various special- ties of medicine as well as industry and government. Go ahead. Mr. STETLER. I am at the bottom of page 16, under "Prices." We have heard a great deal during these hearings about allegedly "high drug prices." The fact is, however, that all available price in- PAGENO="0260" 1404 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY dices show that drug prices are going down while other prices are going up. Mr. GORDON. Mr. Stetler-I would like to put in the reèord an article entitled "Examination of Anomalies in Prescription Drug Prices and Utilization1" It was written by Agnes W. Brewster and Juanita Horton. Mrs. Brewster is Chief, and Mrs. Horton is Pharmacist- Economist of the Health Economics Branch, Division of Medical Care Administration, Public Health Service. It was presented at the Drug Utilization Session,, sponsored by the Medical Care Section of `the American Public Health Association, in Florida, October 25, 1967. I would' like to read a couple of excerpts. Starting ten years ago in 1957 what happened to this 1965 list in the way of price movement? More than half had no price change. For 57 the price ad- vanced sometimes more than once and for 27 the price was reduced sometimes twice However the increases in the prescription price (less than a dollar) were much smaller than the decreases, which were so large on a few products that the average was six dollars. The picture that emerges from this analysis `is certainly not in conformity with the downward trend for the consumer price `index for drugs. True, antibiotics such as Achromycin and Terramycin dropped dramatically. But most drugs re- mained unchanged, and the remainder rose in price. For the consumer to experi- ence the price decline `indicated by the OPI behavior, the drugs ordered for `him would have been from a narrow list and not at all typical of the market as a whole. Generic prescriptions are used to provide the consumer price index even though more than 90 percent of prescriptions which consumers purchase are trade name drugs. , I ask, Mr Chairman, that this document be put in the record at the appropriate place Mr. CIJTLEIt. May we have `a copy, Mr. Gordon? Mr. GORDON. I have only one, but I will have it Xeroxed. Senator' NELSON. Mr. Stetler, I have to run up to the Senate floor momentarily. Do you want to wait, or do you want to proceed with minority and majority counsel? I will be back soon. Mr. STETLER. Do I understand as far as our other witnesses, they are not going to be going on today-~they will `be delayed until the 29th? Senator NELSON. If that is satisfactory with you, we will conclude your testimony, and pick theirs up on the 29th If it is not, I am av'ul ahie to go on later this evening. Mr. S'r~ri~'R. Since these people have spent a lot of time on their testimony, I would rather give them, a time when they can put it on in sufficient detail for you and other members of the committee that might be presen't. So far as our next five witnesses are concerned, I would be agreeable to the, 29th, assuming they can be available. Senator~ NELSON. I would substitute these gentlemen for the wit- nesses you planned to have onthe 29th. Mr. STETLER. And then we would put them on our third day in December hopefully and have a fourth day for the ones that were due in December. Sen'~tor NELSON And a fifth and sixth day- Mr. STETLER. Four will do it. . (At this point in the hearing Senator Nelson withdrew from the hearing room.) °See p. i424, infra. PAGENO="0261" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1405 Mr. GORDON. In addition, I would like to read to you some of the testimony that Mr. Ross, Commissioner of the Bi~reau of Labor Statis- tics, gave before our committee at the beginning of our hearings. I asked Mr. Ross, "But we do know that the consumer is paying more for his prescription; isn't that right?" And Ross answered, "Yes, sir; there can be no doubt that average prices of prescriptions have risen. The four surveys listed above ~how increases of 6 to 10 percent." Mr. STETLER. On this-as I indicated in my statement-we are f a- miliar with that testimony by Mr. Ross. And two of the men that we had scheduled for the 29th-aôtually, now they will be put off-are men who we have selected to talk about the price indexes, to discuss Mr. Ross' testimony and the price performance of generic, brand, patented, nonpatented products. I do not really presume to have any expertise in this field, except to recite the statistics-I could do that. But in detail-I would prefer to wait until these men testified. Mr. GoiinoN. I just wanted to bring up some of the statements which show the limitations of the Consumer Price Index to which you referred. Mr. STETLER. Well, we referred to the statistics, Bureau of Labor statistics. Now, that is the agency of Government that is responsible for de- ciding how price indexes shall be devised, and I think it is proper for our prices to be measured by the same criterion by which other prices are measured. The statistics that are cited for- Mr. GORDON. There is a great difference, Mr. Stetler. But since you are going to have experts come, let us postpone that. Mr. STETLER. I will let them discuss this subject. Mr. GoiiroN. In that case, why don't we take a break until the chair- man comes back. (Short recess.) Mr. GoiwoN. Mr. Stetler, will you please resume with your testi- mony? Mr. STETLER. As indicated, I am going to get to the tail end of my statement and conclude this in a couple of minutes. As you know, we submitted with our statements some studies that go into fairly extensive detail about the contributions of the industry in a variety of areas. I will comment on that very briefly, and then give the conclusion as it is in my statement. In the foregoing disscussion, I have tried to provide an insight into the achievements and aspirations of reputable pharmaceutical firms, the complexities of their operation, and their continued striving for excellence. I have tried to show the amount of effort and investment involved in research, in developing and marketing a new drug prod- uct, and the commercial risks that must be taken as the price of phar- maceutical advances. Leading firms produce and stock certain so-called public service drugs which seldom yield a penny of profit. They are used in the treat- ment of rare, low-frequency diseases and the demand is simply not sufficient to justify the costly production process. They include anti- rabies serum, botulism antitoxin, gas gangrene antitoxin, Rocky Mountain spotted fever vaccine, and many others. PAGENO="0262" 1406 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY There is no question that these medications must be available when- ever and wherever needed, and they are, thanks to the belief of many drug manufacturers that they have a moral responsibility to provide them Usually they are provided without charge by the firms to the unfortunate persons who contract the diseases or to their physicians In conclusion I would like to say that in our continuing activities the pharmaceutical industry is pursuing the following aims, aims with which I believe this subcommittee would agree: First, to provide doctors and their patients with drug products hay ing the highest degree of safety, effectiveness and quality we can achieve for the lowest price at which these standards can be attained Secondly, to provide the doctor with a choice among such drug products as varied as the human idiosyncracies among the patients he treats and as divergent theories of medical therapy may require Third, `to cooperate with the Government in assuring tha't these objectives are achieved at a reasonable cost. We respectfully and urgently submit, however, that the way to at- tam these objectives is not to force physicians into generic prescribing or into prescribing the lowest price product regardless of the doctor's medical judgment as to its comparative quality and therapeutic effect. Instead, we submit that the wise course for Government policy, in administering drug programs under various laws, is to assure (1) That physicians are provided with as much reliable information about the comparative effectiveness, quality, and price of d'rug prod- ucts as our society can provide Mr. GORDON. Mr. Stetler, I think I can say fairly safely that the chairman and the rest of our subcommittee would agree with you com- pletely. I certainly would like to underline the word "reliable." The information must be reliable. And I think that we are going to do everything possible to make sure it is so. Mr STETLER Thank you (2) That physicians are left free to prescribe the particular prod- uct and manufacturing source they think best fo'r particular patients; and (3) That patients are provided with reliable information about corn parative retail prices for that product In short, we urge that Government policy be aimed' not at eliminat- ing competition, but at making competition work as e~ectively as pos- sible at all levels of the drug distribution system I can assure you that the Pharmaceutical Manufacturers Association and its member com- panies will cooperate fully in all reasonable measures taken to achieve that end. Thank you. Mr GORDON Mr Stetler, we certainly agree with you This is a very fine statement Practically every one of our previous witnesses have agreed with these points you have mentioned We would appreciate it very much if you would `submit to us any other ideas as to' how `we can implement this as early as possible. Mr. STETLER. Thank you. We will do' that. Mr.. GORDON. Do you have any questions, Mr. Grossman Mr. GROSSMAN. I have a couple of questions. One-I think there w~ts some confusion earlier during the question ing and colloquy with Senator J'~u its I would like to ~sk ~`ou at this PAGENO="0263" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1407 time-to get back to the same issues we were talking about then, with regard to price differentials-you were talking I think at that time that a great deal of the reason for price differentials was the quality controls. I have been talking and I think he was talking about improv- ing minimum standards, pushing up minimum standards. Now, if we did push up minimum standards, could I assume or could we assume that the prices of the less expensive drugs would also go up to reach towards your quality control drugs? Is that fair to say? Mr. STETLER. Yes; that is fair to say. That would be a demonstrable fact, I am sure. As the quality increased and the expense of providing that quality increased, it would have to be reflected in price. Mr. GROSSMAN. Is there any evidence this ha;s happened. in the past when standards have been tightened or anything like that? Mr. STETLER. I believe there is. I am not prepared to really document that fully today. But I think when our people testify about trends in generic and brand name prices, which might be as close as you can come to that, I think we will find that as the requirements of the Food and Drug Administration increased, there was more of an increase in price in the generic products than in the brand name products, which I think would be an index to the sort of thing you are talking about. Mr. GROSSMAN. If you have any such information, could you supply it for the record? Mr. STETLER. Yes; I will check to make sure-if it is going to be supplied by our group of witnesses, we will do it at that time. If it is not there, I will make sure I get it in. connection with this day's hearings. Mr. GROSSMAN. Yesterday the APhA. testified as to a suggestion I think that has been made by other witnesses that generic patents be maintained, `but that no trade names be attached. And I wondered if the PMA has any position on this. That is to say, that a doctor would just prescribe a generic, and if you wanted Schering or Upjohn, he could just put "Upjohn." Mr. `STETLEJi. I would like to make a brief comment on that, and let Mr. Cutler expand on it a little. We definitely have a belief about that. We are not in agreement with the statement or the concept that the brand name era is dead. It cer- tainly is not dead, should not be dead, and we hope we will not live to see the day when it is. As far, as the drug products are concerned, when we are faced with the reality-and it is one-that doctors prescribe by brand names 95 percent of the time, obviously these names have utility to physicians. It is easier by `the us~ of a brand name for a doctor to identify the source of the product than it is to use a generic name and indicate the manufacturer. Now, this does not disparage a statement I made earlier-that we feel sincerely that doctors should have a right to prescribe any way they want `to. But still the fact is that in the prescribing habits, and this has gone on for many years, they find it better and easier to use the brand name. Unless and until that situation Is different, we cannot mandate different prescribing habits. Mr. GROSSMAN. Do you think your position would be different if we had some kind of upgrading of minimum standards? Mr. SncrLER. I doubt that upgrading of minimum standards would affect significantly that problem but it might. Now, just on `the brand PAGENO="0264" 1408 COMPETITIVE PROBLEMS IN THE DRUG. INDUSTRY name item, and the brand name as a property right, I think Mr. Cutler might comment on that. Mr. CUTLER. Mr. Grossman, as you know, trade names and trade- marks are permitted under our laws for all products really as a means of encouraging competition enabling manufacturers to call attention to their ma~rk which identifies their origin, and to enable them to help the customer differentiate their product and someone else's product. The problem is just the same in drugs as it would be in Coca-Cola, bikes, or Mustangs, or whatever other brand name or trademark you might select. There is no reason why drugs should be treated any differ- ently. Mr. GORDON. Are you saying that drugs can be compared with bi- cycles, shirts, shoes, and other things? Don't you see any difference at all in the drug industry? Mr. CUTLER. Certainly I see difference in products. Mr. GORDON. I do not mean just in products. Mr. CUTLER. I believe the same competitive forces and competitive values in calling to the customer's attention, in this case the doctor, the difference between one manufacturing source and another apply in drugs as they do in automobiles, Coca-Cola, or food or whisky or anything else. Mr. GORDON. But you do see, do you not, a certain social responsi- bility the drug industry has? Mr. CUTLER. Absolutely. Mr. GORDON. That other industries do not have? Mr. CUTLER. No question. Drugs are one of the most important prod- ucts we have. But there is no reason why competition, as Mr. Stetler has said, should not be the method by which different drug products win their way into the favor of the doctor who is making comparative judgments. Mr. GROSSMAN, Would you not agree they should win their way based upon one product being better than another product?. Mr. CUTLER. No. question about it. The presence or absence of a trademark would not affect that. The value of. the mark or the trade name is to permit the manufacturer to call attention t.o his product., Mr. GROSSMAN.' I have just looked through some of the literature sent out `by industry to doctors, and sometimes I just see a picture of some people looking very happy and healthy, and just a big trademark name right in front of it. That doesn't tell me or the doctor why that product is better than any other product. Mr. `CUTLER. It would be equally true if the same ad said "Merck's prednisone." The fact that it migh't or might not have a trade name does not really affect the point, it seeffis to me. Mr. GORDON. I think there is another very important problem. with respect to using a trade name. I think Dr. Modell and others have testified that trade names can cause cert.ain confusion. But from your point Qf view, you say it makes no difference whether you `use a trade name, or whether you say reserpine-Ciba? Mr. STETLER. We say the important thing is for the doctor to identify the source. If he does that more easily or more effectively by using a brand name, he should have the right to do it. But the important thing is the identification of the source There is no question about that Mr. GROSSMAN. Thank you. PAGENO="0265" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1409 Mr. GORDON. I have a couple of additional questions, Mr. Stetler~ You discussed the differences at the beginning of your statement between the innovator and the non-innovator. The inevitable conclu- sion is that every licensee of a patent holder is a non-innovator, is that correct Mr. STETLER. That may be true with respect t~ that product. But, of course, most firms have a variety of products. They do an extensive job of research. But part of their product line may be a drug that has been researched and marketed or patented by someone else. But you cannot put them in the category of an innovator, or a non-innovator, depend- ing on what they do with just one product. Mr. GORDON. As I understand your statement, you are saying that a person is an innovator, hence the quality of the product is necessarily better? Mr. STETLER. No. If I have left that impression, it is wrong. There are two elements, obviously. One is innovation, the activity of the company which does the research, and does develop new products. That is a specific contribution which that type of a manufacturer makes. He cannot stop there. In addition, he has to do all of the quality control work that is essential to producing that product properly. But you will find, if you look at the manufacturers, that the companies engaged in significant research effort, those that have acquired this type of ex- pertise and personnel, do not skip the quality process. They are more or less automatically in that role. But they are two distinct things. A company that does not do research can do a quality job. * Mr. GORDON. In other words, a certain company can also emphasize the manufacturing aspects, not the research aspects, and produce a drug of the same high quality as another company which may be an innovator. Is that reasonable? Mr. STETLER. Quite possible. Mr. GORDON. Now, Mr. Stetler, you justified the high cost of adver- fising a.~s a necessary cost. Where would that be in your statement? Mr. STETLER. Page 22. Mr. GORDON. No; page 4. The fact ~is that advertising is the most economical `and efficient means of getting the facts about the new product to the physicians who need them. Page 4, the third paragraph down. Is it not a fact some of the most extensive advertising campaigns have been for old products, under a new name? For example-Noctec? A new name, ~relatively for an old product, choral hydrate. A lot of advertising is being done to advertise that particular name. This is not what you had in mind, though? Mr. STETLER. Well, there are obviously some expenditures in adver- tising for old products, and if that is indicated-it gets the product back ~o the attentidn of the doctor, and the purpose of advertising is still to sell drugs. But I think you will find that the larger proportion of the advertis- ing budget is expended to get infOrmation available to physicians and pharmacists on new drugs rather than old drugs. As a general rule, I think that is a safe statement.. Mr. GORDON. We have also been told by Dr. Cluff, of the University of Florida Medical School, that another effect of advertising, both direct mail advertising and the efforts of detail men, is to cause serious PAGENO="0266" 1410 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY overprescribing of drugs. Is it your opinion that the type of advertis- mg that causes this phenomenon would be in the public interest ~ Mr. STETLER. I really do not believe it does come from that. If there is overprescribing-and I am not prepared to say there is-I cannot speak on that with authority I have read the statements and recent statements there is overprescribing I doubt that that is so However- Mr. GORDON. If it is so, what would he your answer? Mr. STETLER. My answer is, I don't know the cause of it. But I have serious doi~bts that it would come from advertising No doctor, no good doctor is going to give a patient a drug that is not necessary or going to give a patient a drug in excessive quantities because he has happened to read a drug ad. I cannot believe that. I think the medical profession is a good deal more responsib1e than that. Mr. GORDON. Have you any idea, Mr. Stetier, how many cases have been brought against drug firms in the last few years for false and misleading advertising ~ Mr STETLER Yes, I do Mr GORDON Could you tell us what they are ~ How many PMA members were mvolved ~ Mr. STETLER. Well, I am going to equate that to a claim that was made some time ago, since that is really the extent of the checking I have done. I cannot tell you,beoause I do not know, how many questions have been raised by FDA with respect to ad violations or ~what categories they fall in. But, there was a statement made last year that one-third of the members of the PMA were found to have had ads in violation of the regulations. Now, when this statement was made-and I think it was in April or May of 1966-we attempted very diligently to find out exactly what the data was. We could not get that until September when we received it through a member of the press Now, as you know there are hundreds or maybe thousands of ads that are checked routinely, or at least annually, by FDA. When we checked back-we had at that time I think 138 members- rather than one-third of the PMA members being found in violation, only nine PMA members were involved in ads that were forwarded to the HEW's lawyers for review. That was less than 5 percent of PMA membership. Only 89 ads at that time in the period indicat~d were even questioned by FDA medical evaluators. And that was druing a 2-year period. The number of companies mvolved m these cases fell far below the one third that was alleged In other words, that particular allegation was a gross overstatement of the problem. I hasten to add-there are obviously co~npanies that have been questioned. But when we talk about members being found. to have ad~ in violation of the regulations, that is a case that has been queried and adjudicated Those are relatively few But when you are dealing with ad regulations that have subjective terminology, like "fair balance," "brief sununary," you are dealing with language where two very rea- sonable, honest people can have distinct differences of opinion and still the one who may be with the company can have no intention of misleading PAGENO="0267" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1411 The language of the 1963 advertising regulations is difficult to com- ply with. It is easy to see where there might be questions raised. But when you talk about ad violations you get down to a relatively small number. Mr. GORDON. Mr. Stetler, I shall put into the record at this point some material that we have received from the Department of Justice- complaints of the Government in these nine cases you mentioned. One criminal case closed-now there are two criminal closed-and three criminal cases pending, I think; four civil cases closed, and one civil case pending.7 Mr. STETLER. I think it should be clear many of these cases are still under consideration. Actually in terms of violations adjudicated, it is something like three, and nothing close to one-third of PMA member- ship involvement as was originally indicated. Mr. GORDON. I shall also put into the record a large number of "Dear Doctor" letters which have been sent from 1961 to date.8 I notice that every one of these are from members of PMA. Mr. STETLER. I think if we do 95 percent of the production and 95 percent of the drugs come from qur firms, it is obvious that the good deeds and few mistakes will be dominant from those sources, too. Mr. GROSSMAN. I have a question. Talking about good deeds in the industry-yesterday we had testi- mony from Dr. Apple about the concept which he called the community formulary. Are you familiar with that concept? Mr. STETLER. I have not read his statement. I am not familiar with how he used that terminology. Mr. GROSSMAN. If I may, I will just read something. "The local medical pharmaceutical societies would establish a pharmacy and therapeutic committee to develop a list of drugs to be utilized." This might be in a community such as a disadvantaged area in New York or in Chicago, Watts in Los Angeles. In other words, what I am getting at here is what is the industry doing in areas like this? Has the industry made any contribution in disadvantaged areas? Mr. STETLER. They have made significant contributions, but not of the type that would fall in the category of a formulary. Mr. GROSSMAN. I am aware Smith, Klein & French has been help- ful in Philadelphia in housing. What about in the particular field of drugs and lower cost to people in these areas? Mr. STETLER. Well, I think it is probably spelled out pretty well in some of those blue books attached to my statement. But there are a great number of price concessions that have been made by firms to cer- tain categories of beneficiaries under State, local, and Federal pro- grams that would,~ I am sure, be pretty specific answers to your question. Mr. GROSSMAN. What about this idea of a community formulary in an area such as Harlem or Bedford-Stuyvesant in New York? Mr. STETLER. I think if you are going to talk in terms of a commu- nity formulary, it really would make no more sense or as much sense ~ See p. 1427, infra. S See p. 1450, infra. PAGENO="0268" 1412 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY in a disadvantaged area as in any other area. I do no:t think we should consider it just in terms of a disadvantaged area. Now, if there is any rationale to such ~ formulary, it has to be based on medical considerations not price. If you base it strictly on price, you run a direct risk of ending up with a listing of second- class drugs, and you do not want that for your disadvantaged areas. Obviously-those people are entitled t~ the same quality of medical care, including drugs as anyone else. So I do not think you can think of a community formulary just in terms of a disadvantage area. If there is any rationale to the concept, I think it would go across the board. Mr. GROSSMAN. You would not say that hospital formularies dis- pense second-class drugs? Mr. STETLER. No. And I am not saying your concept would. I am just saymg the further you get away from the individual doctor, and that `individual medical decision, with a formulary, the better chance you have of making arbitrary decisions that do not reflect his individ- ual views. Mr. GROSSMAN. Let me just ask one final thing. It is kind of on a broader plane. I think I started on this this morning, and I am still concerned about it. I still foresee this controversy going on and on and on. I can be assured when Dr. Goddard comes out with his new study- where are we going to be. Are we in any better position `than we are right now? In other words, what is going to happen in the long run, what is the industry going to do? Mr. STETLER. I think that is a very legitimate question. And again I will give you a personal reaction to this, because I want to make sure you understand this is not an indus'try concept. I believe `that one of these days or years soon we are going to have to `take nother look at' the theory or the rationale of the Food and Drug Act. I do not believe th'at we are ever going to get to a position where we can `say with assurance that there is equivalency among drug products, given the base from which we start. Now, you can ask five people, and you will get five answers, a's to how many manufacturers of prescription drugs there are i.n the TJnited States. A good figure `to use is 1,500, Now, when you realize `that our 136 members make 95 percent of the prescription drugs, 5 percent are being made by some 1,374 drug companies. Now, they must have some' rather insignificant or small operations. They may be `rather short in quality control. I am sure they are not getting the inspections that we get from, Food and Drug, and let me say I would not `do it any other way, if I w'as FDA. Mr. GORDON. Dr. Goddard says there are not that many manu- facturers. ` ` Mr STFTLEP I said you can talk to five people and get five different answers. And that is true. But I think what we should have, so that this question could be resolved, in our registration of manufacturers, we should know, not guess, how many manufacturers `there are, how many distributors there are, how many repackagers there are. The fact is today we do not know. PAGENO="0269" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1413 Mr. GORDON. How about intrastate manufacturers? Aren't there intrastate manufacturers? Mr. STETLER. There are literally thousands. Mr. GORDON. They do not come under the FDA regulations, do they? Mr. STETLER. As for FDA controls, the answer is no. If they go across State lines; yes, but if they strictly manufacture and do an intra- state business, the'answer is no. I would like to go back just to the one concept, and that is I tlirnk personally, before we can get to the point where we can approach this problem differently, instead of looking every day at every manufac- turer, how he does his job, we are going to have to establish some credentials and qualifications for being in the business of drug manu- facturing, and to check that from time to time to make sure that they are still able to do the job. Now, concomitant with that, I think the Government should stay away, at least on a day-to-day basis, from policing that qualified com- pany, and let him assume, as he should, some of the responsibility for doing a good job. But if we start off with people that have had to com- ply with certain basic criteria to be in the business, then I think we have come a lot closer to ending up with products that deserve to be on :the market. Now, that is a personal view~ Mr. GROsSMAN. You do force the small businessman out. Mr. STETLER. No necessarily. But, I do not want a small business- man or a big businessman making pills for me if he is not qualified for the job. Mr. GROSSMAN. You see, the problem in a broad view from my point of view is that if we want to know about airports-I am talking about the committees of the Senate or the Congress-we usually get the De- partment of Transportation up here and they talk about it. If we want to know about something in another field, we usually get an executive agency to talk about it, and they tell us what they think. Now, we call on the FDA, and they come up here and say there is therapeutic equivalency. Mr. STETLER. Actually Dr. Goddard has not really said that. What he said is, "We cannot today say there is therapeutic equivalency. We hope soon to be able to say that with assurance, I have an idea there is and I am trying to validate it." I do not think if you were to ask him that question specifically that he would say, "We, the FDA, say there is therapeutic equivalency in drug products." Mr. GROSSMAN. And this is the designated agency to oversee this ~job? Mr. STETLER. Yes. Now, I do not want to say I am critical of them. I think that is an impossible job given today's circumstances for the FDA or anyone else. Mr. GROSSMAN. Thank you. Mr. GORDON. And yet according to the Sainsbury Committee rec- ommendations, England might be getting a similar type of organiza- tion. Mr. STETLER. That is right. But you have to look at what they have now, and what their problems are, and contrast it with what we haveand what our problems are. PAGENO="0270" 1414 COMPETITIVE PROBLEMS IN THE DRTJG INDUSTRY Mr. GORDON. Are you acquainted with the Sainsbury report rec- ommendations on the elimination of brand names ~ Let me put it this way What they suggest is that the first manufacturer adopt a name, a trade mark, and then every other manufacturer can use that name That will be the name Mr STETI ER "New drugs should be marked only under Commis sion approved names" they say And I think they are talking in terms of a generic concept. But, of course, the 1962 DrugAmendments gave the authority to FDA to make the decision on generic names. So really we have this provision right now. Mr GORDON Mr Stetler, on behalf of the subcommittee I want to thank you very much for giving us a very fine statement. We are extremely sorry that we could not hear all of your people We look ~forward to hearing the rest of them on the 29th. Mr STETLER Thank you And I really appreciate the chance to be here today to present our views. (The complete prepared statement submitted by Mr Stetler follows:) STATEMENT OF C. JOSEPH STETLER, PRESIDENT, PHARMACEUTICAL MANUFACTURERS AssoCIATION Mr. Chairman and Members of the Committee, I am C. Joseph Stetler, Presi- dent of the Pharmaceutical Manufacturers Association. Accompanying me are Lloyd N. Cutler, Special Counsel to the PMA, and Dr. A. E. Slesser, Associate Director Quality Control Smith Kline and French Laboratories I welcome the opportunity to appear today to answer charges made against the pharmaceutical industry during the current hearings of the Committee, and to describe bow the industry serves the public health. I am not, of course, in a position to answer charges or questions addressed to any particular company You have already heard testimony from representatives of five leading phar- maceutical firms, and I am confident that any other PMA member company you desire to hear will be willing to testify. My statement and those of the other witnesses scheduled to appear on behalf of the Pharmaceutical Manufacturers Association will be addressed to the prin- cipal questions which have been raised here, as well as to other issues which we believe merit the Committee's consideration. We have submitted, with our prepared statements, a considerable volume of additional material which we would like to have included in the printed record of the heiririgs It consists mainly of the results of a broad range of studits by authorities in their respective fields undertaken to proiide the Committee with a comprehensive picture of the industry s operations and achievements and to place in better. perspective some of the testimony you have heard to date. The PMA witnesses who follow me today and later will comment in greater detail on many of the points I will touch on briefly in my testimony. We will deal with the issue of prescribing and dispensing drugs by their g'eneric names, and will discuss drug prices and profits. We will deal with research trends and expenditures. We will discuss the high-risk characteristics of the pharmaceutical industry and its need to attract capital for gr:owth and for continued health progress We will also discuss the vital aspects of production and engineering techniques and quality control in the manufacture of drugs, and the differences that may exist among drug products containing the same active ingredient, but which come from different manufacturing sources. We will set forth the unique impoitance of the industry s promotional efforts in the delivery of product information to physicians The backbone of this industry consists of the innovators-4hose firms that strive through creative effort to assure the continuing flow of valuable new pharmaceuticals, and to maintain the highest quality standards for their existing products There are other companies in the pharmaceutical industry which engage only in the manufacture of drug products developed by others. I am not here to criticize these non-innovators. Theirs is a legitimate business undertaking. All firms marketing high quality drug products at competitive prices perform an important economic function The fact remains however that their costs of PAGENO="0271" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1415 doing business and their contributions to the public health, are generally much less than those of the innovator companies. The Innova~tor vs. the Non-Innovator It Is not an exaggeration to say that much of the misunderstanding that exists with respect to the drug industry arises from the failure to distinguish between these different types of manufacturers. The company which has the complex and extensive facilities and the highly-trained personnel necessary to discover and develop drugs which someone else has not already marketed maintains cost burdens which are reflected in its prices. The non-innovator does not support such effort and therefore does not incur the expense in time and dollars nec- essary to make. comparable vital contributions to the health of mankind. The innovator must assemble and support a highly specialized team of research scientists such as physicians, pharmacologists, toxicologists, virologists, biologists, chemists, *biochemists, pharmacists, engineers and other technical specialists. When their knowledge and skills are applied to a disease problem, there is no way to tell in advance how much time and money will be required to find a solution, if, indeed, one is found at all. The discovery of a new potentially useful product moreover is merely the beginning. It must then be developed, another long and costly procedure which often requires more people, more processes and more time than the original discovery. This stage requires years of animal and clinical testing, and the sub- mission of a New Drug Application, plus exhaustive supporting data to the Food and Drug Administration. The approval of the NDA, clearing the product for marketing, marks the point at which the manufacturer may begin for the first time to recoup his investment. This step, alone, from the time the NDA is filed, can take from 18 months to five years, sometimes longer. Once cleared for marketing, an extremely costly, but necessary effort is then required to make the product known to the physician, the pharmacist, and other professionals who will be working with the new agent. While there are those who would suggest that the promotion effort is too costly, or not necessary, the fact is that advei~tising is the most economical and efficient means of getting the facts about the new produét to the physicians who need them. Journals of medicine, pharmacy and nursing provide the vehicles. These promotion costs cannot be avoided if information is to be communicated. It is a necessary cost that the innovator must bear. Because the innovator discovers new compounds and health-saving uses for them that have never before existed, he must be particularly sensitive to, and capable of, assuring purity, potency and safety through the uncompromising high quality of his products. Quality control and quality manufacture are the sine qna non of the research-oriented pharmaceutical industry. These precise disciplines are inextricably linked with the operation of the innovator firm. Briefly, they consist of indispensable specifications and tests for each ingredient in the formula, proper design and formulation of the product, multiple inspections and tests during processing and packaging, final product checks, and the prepa- ration of detailed and meticulous records to show the complete manufacturing and control history of each batch, and to enable the manufacturer to trace his products after shipment. Quality firms are well organized to recall with precision from all commercial channels any particular lot of a suspected drug product at any time, or to provide emergency advice as to where a particular drug product can be obtained when needed. The medical profession not only demands quality in drug products but it also expects the product to be available in every form and dose that might be needed to treat a wide variety of conditions-including capsules, tablets, lnjectables, oral and topical liquids, concentrates, suspensions, suppositories and ointments. Not all are commercially profitable, but a capsule cannot be used to fill a prescription for an ointment, nor a cencentrate when an injection has been ordered. Innovator firms accept this responsibility as a matter of course. The non- innovator, in contrast, frequently does not feel obligated to provide the drug product in every possible form. Rather, his tendency is to concentrate on the most heavily prescribed and the simplest and most economical forms to produce. Beyond the production process, the drug product, in all its forms and dosages, must be available when it is needed, where it is needed. Through his system of distribution points, the innovator reaches the entire nation. Furthermore, through the same system, he can cover an emergency within hours in virtually PAGENO="0272" 1416 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY any village, city or county in the United States. No matter what the market situation, his product-in its full line-is there whenever and wherever the physician needs it. The Pharmaceutical Maiwfacturers Assookz~tioa Turning now to the Association for which we are speaking today, let me quickly describe its structure and the companies that make up its membership, and tell you something of their accomplishments and aspirations. The PMA is a non-profit trade association which traces its history through two predecessor organizations to 1907. Its 136 active members engage in the production of prescription drug products- those which are primarily dispensed by licensed pharmacists at the direction of medical, dental and other practitioners who are licensed by state law to prescribe and administer them. These member firms account for upwards of 95 percent of the prescription drug products made and sold by the entire industry in the United States at the present time. PMA firms currently have facilities in 44 states. In the United States, the prescription drug industry employs 125,000 workers, including a high per- centage of scientists and research specialists. The annual payroll is more than $897 million. They pay taxes of approximately $506 million per year to federal, state and local governments in this country. These figures do not take into account the activities of the thousands of supplier companies that depend wholly or in part on the prescription drug industry. The wages, dividends and taxes paid by the manufacturers of pack- aging materials, machinery and other equipment represent another sizable contribution to the economy. Member companies vary greatly in size. Several do an annual business of less than $200 thousand, while others have drug sales of $100 million or more. Approximately one-half of our member companies would qualify as "small business" as that term is defined by the Small Business Administration. Drug Industry-Competition and Accosnpl;ishments No one company accounts for more than 7 percent of total domestic prescrip- tion drug sales, which last year reached more than $3 billion. This low degree of concentration is approached by very few other manufacturing industries of comparable size. Constant striving for discovery and excellence has resulted from competitive rivalry in the marketplace and through such competition has come the strength and viability of the drug industry which has contributed so much to medical progress over the years. The pharmaceutical industry as we know it today is very young-less than 30 years old. Within these three decades, we have seen the emergence of a variety of new drugs that have all but revolutionized the practice of m.edicine-sulfona- mides and antibiotics, cardiovascular preparations and anti-depressants, vita- mins, hormones, and tranquilizers-an impressive array of drug products that have virtually wiped out some killing diseases, have shortened the length of the average stay in hospitals, have reduced the space requirements of mental institutions, and have been a boon to doctors everywhere in the practice of their calling. These developments reflect the results of an outstanding system for the discovery, production and distribution of drug products which have made a truly unprecedented contribution to human progress. The system may not be flawless. It is, however, the most efficient, the most dynamic and the most innovative of that of any country in the world. From 1940 to 1966, an amazing total of 823 new single chemical entity drugs were introduced as prescription drugs in the United States. Perhaps I should explain that a "single chemical entity" in the field of pharma- ceuticals is a unique substance unlike any other drug. It becomes the active ingredient in one or more drug products, or it may be employed as one or two or more active ingredients in so-called combination products. At this time, I would like to submit for the record a compilation of the 823 new drugs which have been introduced since 1940. The list' was prepared for PMA by Paul de Haen, Inc., the nation's foremost authority on the origins of drugs. The compilation is significant in your consideration of this great industry for `"Review of Drugs 1940-1966", American Professional Pharmacist, Paul de Haen, Inc., November, 1967. PAGENO="0273" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1417 it shows that the United States originated 502 of the 823 new weapons against disease and suffering which have been placed in the physician's armamentarium in the last 27 years. And the U.S. shares credit with foreign sources `for several others. Of the U.S. discoveries, the laboratories of American manufacturers were responsible for 87 percent. The others came from university, non-profit or gov- ernment sources. The Issue of Generic Prescribing and Dispensing A great deal has been said during these hearings about prescribing by the generic name of the drug. I would like the record to `be perfee'tl~' clear that the prescription drug industry and the PMA do not oppose the physician's freedom to prescribe in this way. We believe a physician should be entirely free to prescribe as he `wishes, whether b'y a manufacturer's brand name~ by the geperic name with the manufacturer identified, or by the generic name alone. In a true generic prescription the physician `delegates to a pharmacist or nurse the selection of the manufacturing source for the product prescribed. If the physician considers such a delegation not to be contrary to the interest of his patient, he should be free to prescribe in that manner. If the physician prefers. he should also be free to designate a brand name or to specify the manufacturing source by designating the generic name of `the drug together with the name of the preferred manufacturer. We also believe that, in prescribing, doctors should supplement their medical judgments and decisions regarding drug quality and effectiveness with considera- tions of cost to the patient. If the do'ctor believes that two manufacturers market drug products of substantially identical therapeutic effectiveness and quality, he should, of course, prescribe the less expensive one for his patient. Contrary to a general impression, most prescription products' are not fair-traded, an'd there- fore manufacturers impose no restrictions `on the prices charged `by retailers. I would like to say a further word on the subject of prescribing by using the generic name of the drug. While we favor the right of the doctor to prescribe as he wishes, we emphatically disagree with the assumptions and statements ad- vanced by certain earlier witnesses before your Subcommittee that generic and therapeutic equivalency go hand in hand. As has' been pointed out in papers by a number of le'a'ding physicians and pharmacologists and in previous testimony before this Subcommittee, the term "generic equivalent" refers only to `the name of a drug product and does not necessarily connote its safety or therapeutic effectiveness. Alth'ough two drug products may contain, or are supposed to contain, the same amount of the same active ingredient, this provides no assurance that both products will pro'duce the same clinical effect in any particular patie'nt. Mr. Chairman, you have asked s'everal previous witnesses' whether they can present `any scientific evidence that drugs with the same generic name do not have the same quality and therapeutic effect. The witnesses who follow me today have such evidence to pres'ent, and they are prepared to discus's it in depth. Drug manufacturing is a complex and exacting process. In our member com- panies 18 percent `of all production employees are directly engaged in quality con- troL Even that d'oes not guarantee perfection, but these unflagging efforts provide the best means of achieving the highest degree of quality that is realistically possible. On this subject there appears to be a rather common, mistaken belief that the federal drug laws somehow guarantee a uniform high level of quality in all drug prothicts which reach and are dispensed from the shelves of a pharmacy. This is not so and, as a practical matter, can never be so. Although Food an'd Drug Administration personnel d'o a conscientious job, it is impossible for them to inspect every manufacturer and distributor often enough to insure that every drug product meets even bare minimum quality standards. Maximum quality and reliability can only be built in by the manufacturer. Even antibiotiedrug products, every batch of which FDA tests before s'hipment, have turned up with variations' in quality and potency. Clearly, the public in'teres't musl ultimately be served by private responsibility. Deeply ingrained in the business philosophy of the reliable manufacturer is the desire to excel in product quality as a competitive measure. This system of striving to produce only the best is the physician's and the patient's strongest safeguard. Mr. Chairman, although our member firms strive for perfect quality, even the best companies do not. always attain it. You have read into this record lists of drug recalls that illustrate that mistakes still are made. But the fact that 81-280-68-pt. 4-18 PAGENO="0274" 1418 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY mistakes are made even by the best manufacturers only proves the im- portance to physicians and patients of selecting the manufacturing source that has the best record of achieving quality, and the least likelihood of making future errors. Medicine is an art as much as `a science, and by prescribing the manufacturing source in which he has the most confidence, the physician mini- mizes one of the many elements of risk in therapy. Let me state emphatically that we do not claim that all drug products marketed by brand name are high quality or that all products marketed generically are low quality. Many PMA member companies market some of th'eir drugs under generic rather than brand names. We do claim that two drug produ&s containing a specified amount of the same active ingredi'ent may, depending on manufacturer capability and quality control know-how, vary in quality and therapeutic effect, and that this can be so whether one or both products are marketed by brand or generic name, and whether one or both manufacturers are members or non- members of PMA. You have already heard significant testimony that the exacting laboratory tests run by the Department of Defense often turn up such differences. Congress- man Durward Hall placed in the Congressional Record on August 9 a letter from the Defense Supply Agency stating that there bad been 143 rejections of drug bids tendered by apparent low bidders in competitive Defense Department drug procurements during the 22-month period from August 1965 through June 1967. In each case the drug products were rejected either because the sample subnlitted failed to meet the specifications or because the `bidder failed to meet quality con- trol or housekeeping requirements. Some 58 different firms bad apparent low bids rejected for one or both of these reasons. All of the 58 firms are on the Defense Department's list of responsible prospective contractors and many are frequently successful bidders who deliver products that meet all specifications. But in 143 instances these firms failed to meet the Defense Department's require- ments. Some firms had as many as 10 and 20 rejections. Others had only one rejection each, and a great many firms, of course, had no rejections at all. Thus, the experience of the principal procurement agency large enough to conduct rigorous `tests of all products it considers buying and possessing a mammoth physician feedback of therapeutic experience shows clearly that drug products which are supposed to contain the same amount of the same active ingredient do differ in quality, and that some manufacturing sources are more consistently reliable than others. For the physician and pharmacist who cannot conduct his own tests and inspections, manufacturer identification of drug products has proven itself to be the most practical and reliable measure of consistent quality. Approximately one billion prescriptions are dispensed by the nation's retail pharmacists every year in the United States. Surveys have shown that more than 90 percent of them signify a particular drug product of a specific manufacturer. Once a physician has identified a particular manufacturing source for a particular drug product which he considers, on the basis of his own recurring experience, as best for a particular patient, he can have a high degree of certainty that each succeed- ing prescription of the same drug product from the same source will carry the same `built-in therapeutic performance. Moreover, if anything does go wrong after the prescription is filled-if there is an unexpected side effect or a lack of effectiveness-the doctor who has specified the manufacturing source will `be able' to communicate promptly with the manufacturer, and obtain the prompt assistance of the company's medical staff in identifying and evaluating the problem and in taking proper corrective measures. He can `also assist both the manufacturer and the FDA in maintaining an accurate and up-to-date record of adverse drug reactions for the information of the medical profession. But if the physician has prescribed generically, leaving it to a pharmacist to select the manufacturing source, the physician may or may not be able to take these important steps for the health of his patient and the advance of medical knowledge. He may be unable `to ascertain promptly, if at all, the identity of the manufacturing source, particularly if the prescription has been refilled generically from a variety of sources. And if he does learn the producer's identity, the manufacturer may not have a medical staff qualified to evaluate the information. Indeed, many generic manufacturers or distributors have not filed New Drug Applications for the products they market, and under the law, are not even obliged to file periodic experience reports with the FDA. The physician's identification of a particular brand of drug product, or a par- ticular manufacturer, in turn, justifies the manufacturer's investment, his corn- PAGENO="0275" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1419 mitment to superior performance in products and in services. It provides an in- centive to compete for quality recognition which no set of government regulations will ever provide. For very direct and acute economic reasons, the producer cannot afford the loss of his good name in the marketplace. He must develop and improve methods of total quality control most likely to result in superior products and all~around performance, thereby earning for his products the con- tinued confidence of the physician. In summary on this point, let me say that I do not presume to speak for the medical profession, but I cannot imagine there would be any substantial dissent within that body from the following propositions: (1) A physician should consider first the known therapeutic effect and known quality of each drug product available to meet the particular needs of his patient. (2) If a choice is available among effective drug products of satisfactory quality, the physician should take price as well as therapeutic effect and quality into consideration when prescribing. (3) Unless the physician is satisfied that all drug products of the generic class he decides to prescribe are substantially therapeutically equivalent and of high quality, he should identify the source of the drug product on his prescription. As we have said, we believe the doctor's most reliable guarantee of quality is his prior experience with the product of a particular manufacturer. Nevertheless, recognizing the importance of price, we would support effective methods of in- forming physicians, dentists and other practitioners more fully than they already are about the comparative prices of different drug products containing sub- stantially the same active ingredients. Prices We have heard a great deal during these hearings about allegedly "high drug prices". The fact is, however, that all available price indices show that drug prices are going down while other prices are going up. I will not attempt to dis- cuss the intricacies of how price indices are or should be compiled. These points will be covered by two expert witnesses who will testify on November 29. But the Department of Labor's Consumer Price Index shows that the decline in retail prescription drug prices has continued to a point where these prices are now more th~1n 10 percent under the 1957-59 base period. The latest government re- port with respect to prescription drugs for the first six months of this year shows a record low ,f 88.8 compared to the 1957-59 base of 100. For the same period, the index for all consumer items reached a record high of 116. Moreover, the more comprehensive BLS Wholesale Price Index for Ethical Preparations also shows a significant current downward trend. Since this Index covers 55 leading drug products, it is far less subject to substantial variations due to the introduction of a few new products. Finally, of course, any of the defects ascribed to our Index system applies equally to the prices of the other commodi- ties being measured-not just to drugs. A computation based upon figures of the Department of Commerce shows that only 14 cents of the consumer's medical care dollar currently are required to pay f9r drug products of all types. Only seven years ago that figure was 19.5 cents. Prescription products, as distinguished from drug products in general, now account for only 9.8 cents of the consumer's medical care dollar as com- pared to 11.7 cents ten years ago. As all of these figures show, and as the President's Economic Report for each of the last two years has expressly noted, prescription drug prices have behaved much better than most other prices, both in the medical care field and in the economy as a whole. In June of this year, a national conference on health care costs was held under the auspices of the Department of Health, Education and Welfare. As was effectively illuminated throughout the proceedings by speakers and panel discussions, the principal medical cost problems relate to the other elements of health care, not to drugs. Differences Between Brand and Generic Prices There have been references during these hearings to "tremendous" price differences between brand name drug products and so-called "generic equiva- lents". As you know, from our earlier comments, we believe the doctrine of "generic equivalency" is at best a dangerous oversimplification of a complex PAGENO="0276" 1420 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY medical problem. Nevertheless, it should be well understood that the price differeiices paid at the retail level by ~onsumers for drug products marketed by brand names and those marketed under a generic name are not nearly so high as statements of previous witnesses would have one believe. Furthermore, price variations of the order of 50 to 100 percent and more between different manufacturers or sellers of "identical" or substantially similar' consumer products are not at all unusual in most fields. Differences in quality, iehability and satisfaction are matters for the subjective and often differing judgments of consumers and they are properly resolved and balanced against price in the marketplace. The p'irallel betu een prescription drug product choices made by a trained physician. and other consumer product choices made by the general public is adinittc'dly far from exact But it is significant that the general public regu larlv tcilances quality against price and is often willing to pay a wide differ ential in price for compensating differences in quality. Product differentiation and price variations are hallmarks of our f'ree market economy. The im- portant thing is not to force this wide range `of prices into some narrower band,. but to give consumers, and in the case of prescription drugs to give doctors; and other practitioners, as much information as they need about the variety of items a~ ailable the comparative merits of each and their differing prices to consumers. The Issue of High Profits Much has been made and continues to be made of the question of drug industry profits. Some, who on the one hand praise the pharmaceutical' industry as the source of life-saving, health-giving drug products, on `the other hanl. accuse it of making unconscionable profits at the expense of the ill and elderly.. It does not seem to matter that the price level of prsecription drugs, `as mdi-. cateci, has been declining in the last 10 years by m.ore than 10 percent, while the prices of other necessities hai e been pushed up by inflationary pressures of the period. In this high-risk industry, a high rate of profit is essential to attract the capital and other resources necessary to achieve further breakthroughs in medical prog- ress. As you know, we have requested an `opportunity for a team of economists to appear as a part of our presentation to dis;cuss the "high-risk" natuye of the industry and to present the results of studies which have been conducted for us this year comparing the drug industry with a number of other manufacturing pursuits Ihese men are now scheduled to testify on November 29 T'hey will point out that arbitrary reduction or elimination of the manufac- turer's profit would not produce a substantial reduction in the price a patient pays for a prescription. We must look elsewhere than to manufacturers' profits in reducing prescription prices to the public. Let me go further and ask this question: "Is the public interest served or' harmed l)y the slight differential in retail drug prices caused by the fact that' the profits' of drug manufacturers are above the national average for industry generally ?" We think the public interes't is served, not harmed, when quality-conscious and research-oriented prescription drug manufacturers earn enough to intensify' their activities and to attract other like-minded firms t'o enter the field. The development and marketing of new drug products is an uncertain enter-. prise at best. The percentage of the sales dollar which the research-oriented" drug companies spend to discover and develop new prod'ucts is by far the highest' of any American industry. Only one out of about 6,000 compounds tested by drug companies turns out to be a marketable product, and even then it `can reach the market only after years; of animal and clinical testing. In addition, a competitor's new or improved product for treatment of the same disease can appear at any moment to over- shadow or make obsolete a profitable product perfected at great cost. T'o illustrate, 16 drug products which were listed among the 200 most com- monly prescribed products in 1965 had disappeared from the list when the 1966' annual audit of prescriptions filled in retail stores was completed. Three-quar- ters of those 16 products had been on the market 10 years or less. The same - survey disclosed that 100 products dropped in frequency of prescribing rate between 1965 and 1966. Only 84 remained the same or rose in rank. The struggle within the industry f~r success-the competition to be first with; the new drug discovery-is costly ami risky. Without the profit incentive it could~ not be continued. If it stops the pubiic will be the loser. PAGENO="0277" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1421 We agree that the profitability of the drug industry is above average. We say this is not a unique phenomenon. It is one which characteTizes rapidly growing industries generally where there is a high rate of new product innovation. Other innovative growth industries today, such as aerospace instruments and photographic goods, office equipment and computers, also return higher than average profits on capital invested. On the other hand, the more stable, less dynamic industries, such as cement, iron and steel and textile products, tend to have lower profit margins. As a result, capital and management are attracted to the growth industries, intensifying the competitive nature of these industries and their rate of innovative progress. Above average profits in innovative growth industries perform a valuable eco- nomic function by serving to allocate capital and management resources where * they can be most productively and beneficially employed. We hold that the industry's profits are healthy and desirable. They provide the incentive to manufacturers to continue to operate their businesses the way they do, and the incentive to others to invest capital and resources in such companies. With all the important and unfinished tasks that lie before the drug Industry, ~we submit that it would be a grave mistake to arbitrarily ~educe its profits and thus ruin the chance of reversing the major allocation of private capital re- sources to this industry that has proven so beneficial to the public over the past three decades. The Issue of Promotional Eo,penditures Some earlier witnesses have expressed the belief that pharmaceutical manu- facturers spend "too much" in promoting their products an~ that they could materially reduce their prices by spending lesis. Their underlying theme seems to be that either the government or the manufacturers themselves should take steps to cut down the size of expenditures for advertising, sales representatives and other forms of conveying drug information to physicians. We believe this to be a very strange and dangerous doctrine. Whether couched in terms of government regulation or In terms of collective arrangements among manufacturers, it goes to the heart of the competitive principle that our economy functions most effectively and efficiently when individual business- men make individual decisions on how to make and market their products. It is self-evident that no manufacturer spends money for the fun of throwing it away. Money is spent on promotion and marketing and on keeping physicians currently advised on drug products because, in the judgment of the manu- facturer, the expenditures so made will have a direct favorable impact on sales volume and profits. Individual decisions in these matters are the essence of a free market econ- omy. Obviously our antitrust laws forbid any group of manufacturers from agreeing among themselves to reduce or eliminate competitive factors *~ueh as promotion expenditures, so that the same sales volume and market shares can be achieved with a lower competitive effort and a lower level of expenditure per manufacturer. Nor is there any way for the government effectively to regu- late the volume of promotional expenditure~s or any other element of the cost of doing business. Regulation of this type is wholly impracticable, is bound to i~esult in inequities, and is certain to deprive the public of the benefits of a free market economy. Only in times of gravest national em~rgency have we ever resorted to the regulation of manufacturing prices, and even then we have never been so foolish as to regulate the amounts individual manufacturers can spend to develop and manufacture their products. Moreover, the professional judgment of the government official responsible for regulating the safety, efficacy and distribution of prescription drug prod- ucts appears to be that the amounts spent on drug ~dvertising and labeling serves an important public health purpose. On April 17, 1967, FDA Commis- sioner Goddard, in issuing "FDA Concepts for Proposed Revisions of Medical Advertising and Labeling Regulations," had this to say on the value of journal advertising and labeling: "We believe that good medical advertising is essential to good health in America today. The educational value of journal advertising and all forms of labeling is greater than `the dollar outlay for it." It should be borne in mind that the selling efforts of ethical drug products are made up of quite different activities and expenses from those of ordinary con- sumer products. You will hear from subsequent PMA witness about the activities of detailmen in supplying current information to doctors on the subject of drug PAGENO="0278" 1422 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY therapy. These detai'lmen are generally college graduates who have the back- grounds and capabilities for an intelligent understanding and presentation of devblop'ments in drug therapy. The function of a detailman is both that of a salesman for bus company's drug products and that of a quasi-educator. We make no claim that physicians rely on detail `men for `medical a'dvice. It would be imprope'r for them `to do so. These men do, however, play a useful role in supplying physicians with accepted product literature an'd in rbferring a physician's inquiries to doctors on the staff of the company for reply. Neither the industry nor the medical profession will claim that the detailing system is free of faults. But I `think on balance 1st has proved an effective solution to a difficult marketing and educational problem. Other Contribution~s of the Pharmaceutical Industry In the foregoing `discussion, I `have tried to provide an insight into the achievements and aspirations of reputable pharmaceutical firms, the complexi- ties of their opera'tion, and `their continued striving for excellence. t hav~e tried to show the amount of effort and investment involved in research, in developing and marketing a new drug product, and the commercial risk's that must be taken as the price of pharmaceutical advances. The record speaks for itself. Competition to develop new drugs has forced our industry to maintain an unparalleled rate of technological progress with untold benefits to the public. But this is an enterprise of many unique dimensions. Its role of service to man- kind goes far beyond the usual commercial concept of producing and marketing merchandise for profit, as desirable `and beneficial as that merchandise may be. This is not to suggest for a moment that other commercial and industrial enter- prises which bring to consumers the boons of modern creativity and technology are not performing an outstanding service to society. But the responsible members of the pharmaceutical industry have long recog- nized that their obligations are special. Their products are required for illness. Their basic aims from the laboratory test tube to the end of the assembly line are the prevention of disease and the provision of aid and comfort for the afflicted. These aims for years have found expression in the voluntary contributions regularly made by many firms toward enhancing the values of our society in a variety of ways. Leading firms produce and stock certain so-called "public service drugs" which never yield a penny of profit. They are used in the treatment of rare, low-fre- quency diseases and the demand is simply not sufficient to justify the costly produc'tion prQcess. They include anti-rabies serum, botulism antitoxin, gas gangrene antitoxin, Rocky Mountain spotted fever vaccine, and many others. There is no question that these medications must be available whenever and wherever needed, and they are, thanks to the belief of many drug manufacturers that they have a moral responsibility to provide them. Usually they are provided without charge by the firms to the unfortunate persons who contract the diseases or `to their physician. Among the most significant general public services rendered by the industry are those in the fields of education and research. Tens of millions of dollars in grants and aids for pharmacy and medical education have been donated by our member firms. These include scholarships, fellowships, `and internships for medical and pharmacy students; science awards; post-graduate medical information programs for practicing physicians; and medical symposia for interns. Substantial amounts are channeled to medical, dental and pharmacy schools. The industry also pro- vides many teaching aids-publications, films, tapes, etc. In addition to their cash contributions to promote health and welfare and scientific progress, many firms support their own foundations through which con- siderable funds are made available to further the same basic objectives. They underwrite scholarships and fellowships, furnish both teaching and research grants, and allocate funds to universities and teaching hospitals. I cannot leave this subject without specific reference to another foundation established almost three years ago by the Pharmaceutical Manufacturers Asso- elation and now being supported by the voluntary contributions of its members. In its way, it seems to me, this undertaking epitomizes the attitude of respon- sible manufacturers toward their industry, and their determination to go the exra mile when the need arises to produce better and safer drugs in the public interest. I believe, for this reason, I might discus's one or two details about the PMA Foundation and its' highly specialized objectives. PAGENO="0279" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1423 The staI1~d purpose of the Foundation is "to promote the betterment of public health through support of scientific and medical research with particular refer- ence to the study and development of the science of therapeutics." In its operations, the Foundation has very deliberately avoided duplicating or competing with the federal programs of research and other research already being supported by private sources, including industry contributions of various kinds. Its concentration is currently in two areas of interest-fundamental research in drug toxicology, and research and training of personnel in the field of clinical pharmacology and drug evaluation. The Foundation has already authorized grants of more than $1,000,000 from funds derived from PMA firms, plus added support from organizations related to the drug industry and individuals. There will not be a dime of monetary return to the contributors. No product research is involved. What will be returned is new scientific knowledge, better methodology in the field of drug testing, and trained scientists who have had the oppQrtunity to study drug toxicity and pharmacology. The PMA Foundation represents an effort by the members of our Association to solve pressing problems in the pub- lie interest. We are confident of its future and look for it to become an out- standing force for progress in the medical and scientific community. These have been merely the highlights of a wide range of activities of the pharmaceutical industry which are not generally known or appreciated outside the industry and the scientific community. Yet we believe they are important in the consideration of the role of responsible drug manufacturers in modern society. Their direct contribution to the common good through the medicines they discover and produce simply cannot be questioned. Interestingly, these same discoverers-the innovators, or originators of new drugs-have been the ones who have made the extra efforts I have outlined to extend the frontiers of knowledge and contribute to the health and well-being of society here and abroad. In order that you might have the full details, too voluntinous to recite here, of the vast array of these activities, the PMA commissioned the management con- sultant firm of Klein and Saks, Inc. to make studies of several fields of particular interest and compile their findings in convenient form. I have their reports here and would like at this time to introduce them in the record.2 Conclusion Mr. Chairman, in conclusion I would like to say that in our continuing activi- ties the pharmaceutical industry is pursuing the following aims, aims with which I believe this Subcommittee would agree: -First, to provide doctors and their patients with drug products having the highe~t degree of safety, effectiveness and quality we can achieve for the lowest price at which these standards can be attained. -Second, to provide the doctor with a choice among such drug products as varied as the human idiosyncracies among the. patients he treats and as divergent theories of medical therapy may require. -Third, to cooperate with the government in assuming that these objec- fives are achieved at a reasonable cost. We respectfully and urgently submit, however, that the way to attain these objectives is not to force physicians into generic prescribing or into prescribing the lowest priced product regardless of the doctor's medical judgment as to its comparative quality and therapeutic effect. Instead, we submit that the wise course for government policy is t~ assure: (1) that physicians are provided with as much reliable information about the comparative effectiveness, quality and price of drug products as our society can provide; (2) that physicians are left free to prescribe the particular product and manufacturing source they think best for particular patients; and (3) that patients are provided with reliable information about compara- tive retail prices for that product. In short, we urge that government policy be aimed not at eliminating competi- tion, but at making competition work as effectively as possible at all levels of ~ (a) Contributions of American Prescription Drug Manufacturers in the United States- Iclein and Saks, Inc-March 1967. (b) Contributions to Medical Education by American Prescription Drug Manufacturers-- Klein and Saks, Inc-August 1967. (c) Contributions of American Prescription Drug Manufacturers in International Devel- opment-Klein and Saks, Inc-November 1966. PAGENO="0280" 11424 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY the drug distribution system. I can assure you that the Pharmaceutical Manu- iacturers Association and its member companies will cooperate fully in all rea- sonable measures taken to achieve that end. (The supplemental inform'ttion submitted by Mr Gordon follows ) :ExAMINATION OF ANOMALIES IN PRESCRIPTION DRUG PRIcES AND UTILIzATION* Agnes W. Brewster, B.A., F.A.P.H.A.; Juanita P. Horton, B.S., R.P'h., MS., F.A.A.A.P.E. From time to time the Health Economics Branch of the Public Health Service is asked to examine seeming anomalies in medical care prices, expenditures, use rates and cost. One such recent study related to prescription drugs. Totally and per `capita, con:5'Umer expenditures for drugs have been rising, reflecthig increased numbers of prescriptions per capita and a rise in the average cost of a prescription (table 1). Yet the `Oonsumer Price Index for prescription drugs has ~ho'wn an almost continual decline over the past 10 year.s (table 2). How does one..explain this seeming contradiction? `T~ better understand the elements of price movement an~1 increased utilization as they might affect the consumer, we undertook a study using the 200 drugs most frequently prescribed in 1965 as a. point of departure. This: `1ist-~pifbli!shed .annually-i's prepared by R. A. Gos'selin and Company. It is reported to reflect about two-thirds of all non-compounded prescriptions filled in the given year. The 200 most frequently prescribed products are part of a list that runs: to thousands of different `drugs. Since the 200 also `re'p'res.ent aibout two-thirds of the pres'c'rip- `tion dollar market of $2.9 billion for 1965, the list provides an adequate base for observing trends in prices. This study pertains to the 188 trade name products in the listing. A word of explanation is in order. Generically prescribed drugs were excluded because there is no way of determining their prices or price changes since the various inanu- facturers of the generic product's are not `specified in the Gosselin listing. The top twelve generic products listed among the 200 most prescribed drugs for 1965 accounted for approximately :6.2 percent of all 550 million prescriptions making up the top 200 drugs. Their removal does not appreciably affect the results of the study. The Drug Topics Red Books for the years 1957-1967 were used for determining wholesale price. Any changes in wholesale price would very shortly be reflected in price to the consumer. One dosage form, strength, and quantity was selected for each of the 188 trade name products in the study. The price of the described item was found in the Red Book for the appropriate years. As you know, this is the standard source for pharmacists to determine the wholesale price of drugs. ~or example, the price of 100 one-grain Proloid tablets was traced from 1957 to 1967. The 1957 Red Book listed the price as $0.75; `the 1961 and subsequent Red Books, $0.85.~ In our analysis, this represents one product which ha.d a single price increase. Some prod.ucts had more than one price change in the period under review. Usually a product carries a higher price when first introduced; therefore, our first step was to .sort the 188 drugs by the date they were introduced. Eighty- six percent had been on the market five or more years by 1967. Interestingly,, 1959 was a year marked by new drugs-20 `of our top 200 were introduced that year. Relatively few drugs-26 in number, or 14 percent-could be classified as really recent, introduced after .1962 (table 3a). Thus, the majority of the drugs leading in popularity, are old standbys o'f the physici'ans' practice, avail- able o'n `the market for quite a span of years. Starting 10 years ago, in 1957, what happened to this 1965 list in the way of price movement7 More than half had no price change For 57 the price ad `van'ced, sometimes more `than once, and for 27 the price' was reduced, s'ometimes twice (table 4) However the increases in the prescription price (less than `$1.00) were much smaller than the decreases, which were so large on a few products that the average was over $6.00. The picture that emerges from this analysis is cerlainly not in conformity with a downward trend for the Consumer Price Index for drugs. True, antibiotics *Presented at the Drug Utilization Session, sponsored by the Medical Care Section of the American Public Health Association at the Ninety-Fifth Annual Meeting In Miami, Florida, `October 25, 1967. Mrs. Brewster is Chief and Mrs. Horton is Pharmacist-Economist of the Health Economics Branch, Division of Medical Care Administration, Public Health Service. PAGENO="0281" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1425 such as Achromycin and Terramycin, dropped dramatically; but most drugs remained unchanged and the remainder rose in price. For the consumer to experience the price decline indicated by the OPT behavior, the drugs ordered for him would have been from a narrow list and not at all typical of the market as a whole. The Consumer Price Index for drugs has been under close scrutiny and sub- sequent revision a number of times throughout the lifetime of the Index. During the period 1935-March 1960, the Index was based on first two, and later three relatively simple compounds. Over the entire period, the prices of these prescrip- tions advanced 77 percent while the overall Consumer Price Index showed a rise of 114 percent. The Bureau of Labor Statistics came to realize that the origir~al list of drugs was no longer adequate to represent the type and kind of prescriptions con- sumers purchase. The Bureau then embraced the concept of therapeutic categories under which a number of prescriptions could be priced. Beginning in April 1960, prices were collected for a new list of 13 drugs sold on prescription within the seven end-use categories. After 9 months of pricing prescriptions under the new procedures, indexes of prices for the three old prescriptions and the 13 new prescriptions were computed. The Index, based on the revised list, was 2.4 per- cent lower than it would have been if just the previous three items had been continued. In 1964, the Consumer Price Index was again revised to include 14 prescrip- tion drugs and a new sampling technique was instituted. The Index continued to show a decline. In March 1967, the sample for prescription drugs was once again revised to include nine instead of seven end-use categories with no change in the number of drugs priced. The antiarthritic group has been dropped while internal analgesic, anti-obesity and hormone categories' have been added. Even so, the OPT for June 1967 shows an overall decline of 1.2 percent from the March Index-a much greater percentage than for any three month period in 1966 under the prior sample. Unlike the drugs in the top 200 list, only two drugs in the Consumer Price Index since 1964 were introduced after 1957 (table 3b). Generic prescriptions are used to price the Consumer Price Index even though r~iore than 90 percent of the prescriptions which consumers purchase are trade name drugs. Six of the 14 drugs in the OPT 1964-1966 were among the top 12' generic products in 1965 and five others could `be purchased generically. The three remaining drugs in the Consumer Price Index are available from only one manufacturer because their patent rights are still in effect even though the prescription order specifies the generic name. Only one drug in the Con- sumer Price Index had an increase in its wholesale price. Pencillin G, tetracycline,. and prednisone all had dramatic decreases. CHANGES IN DRUG PATTERNS A5 AN ExPLANATION OF PRICE MOVEMENT Since the Consumer Price Index for prescribed drugs is necessarily altered so slowly to reflect newer drugs, we decided to examine how much alteration there bad been in the pattern of the 200 "best-sellers". Oomparison of the 1962 and 1965 drug lists indicates that 31 drugs were dropouts and 31 drugs were re- placements. The terms "dropouts" and "replacements" are not intended to imply that the new drugs in the listings were substituted therapeutically for those dropped. Two' thirds of the replacements were recent drugs introduced between 1963 and 1965. A comparison of the prices of the replacements with the prices of the dropouts indicates an overall upward trend in expenditures associated with changes in utilization for prescription drugs. The analysis of dtopouts and replacements by therapeutic categories reveals 28 pattern changes in utilization of drugs. The greatest number of replacements occurred in the hormonal category with seven oral contraceptives and one thyroid preparation added (table 5). There were no dropouts in the hormonal class. On the other hand, no replacements occurred for the five anti-spasmodic dropouts and for the one dropout in each of the antihistamine, dermatologic, and oxytoxie categories. The categories with the greatest amount of activity are: anti-infectives, cough and cold preparations, and cardiovasculars. It is in- teresting to note that three of the cardiovascular and one of the cough and cold replacements bad been on the market prior to 1961. The analysis of price by therapeutic category shows that the replacement drugs generally cost more than their predecessors in popularity for the same PAGENO="0282" 1426 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY therapeutic purpose. For e±ample, in the antibiotics, the average price of the two trade name replacements was $25.64 while the average price of the three dropouts was $12.39. It should be noted, however, that the third replacement in this group was generic tetracycline for which the wholesale price could not be determined. This finding, coupled with the price changes already reported, seem to bear out the intuitive reaction of the consumer that drug prices have not fallen, albeit they have not risen ~as fast as other items in the Consumer Price Index for medical care. We are of the opinion that the day is getting much closer-thanks to elec- tronic data processing-when the Consumer Price Index for prescribed drugs could be refined. With drugs becoming increasingly significant Items of out of pocket consumer medical expenditures, the Consumer Price Index should be- come a more sensitive instrument. TABLE 1.-TOTAL AND PER CAPITA PRESCRIPTION DRUG EXPENDITURES, NUMBER OF PRESCRIPTIONS PER CAPITA AND AVERAGE PRESCRIPTION PRICE, 1959-66 Year Total consumer ex- Per capita expenditure Number of prescrip- Average price per penditure (in billions) tions per capita prescription 1959 $2.0 $11.12 3.54 $3.14 1960 2.11 11.33 3.52 3.22 1961 2.1 11.75 3.65 3.22 1962 2.3 12.30 3.83 3.21 1963 3.4 12.37 3.83 3.23 1964 2.6 13.33 4.09 3.26 1965 2.8 14.37 4.29 3.35 1966 3.1 15.47 4.51 3.43 Source: Derived from American Druggist, Mar. 19, 1962; Mar. 15, 1965; and Mar. 13, 1967. TABLE 2.-CONSUMER PRICE INDEX FOR PRESCRIPTION DRUGS, 1958-66 Cardio- Sedatives Cough vascular Year All items Prescrip- Antiin- and hyp- Atarac- Antispas- Antiar- prepara- and tions tectives notics tics modics thritics tions antihy- perten- sives 1958 100.7 100.7 1959 101.5 103.0 1960 103. 1 102.6 98. 5 100. 4 99. 5 100.6 99.9 99.7 99.6 1961 104.2 99.2 91.9 99.4 96.5 99.2 99.9 98.3 97.6 1962 , 105.4 95.3 86.2 97.0 93.8 97.7 97.7 95.8 94.7 1963 106. 7 93. 0 82. 2 96. 4 93. 2 97. 1 97. 6 95. 6 93.7 1964 108. 1 91. 8 80.3 95.6 92. 2 97.4 95. 6 94. 8 93. 2 1965 109.9 90.8 77.4 `95.7 91.2 97.7 91.9 95.7 93.6 1966 113. 1 90. 6 75. 1 97. 0 90. 9 98. 5 90. 4 97. 2 93.7 Sources Consumer Price Indexes for Selected Items and Groups annual averages December 1958 December 1966 and annual averages computed from fiaures published in Consumer Price Index Components of Prescription Drugs, as prepared by the U.S. Department of Labor, Bureau of Labor Statistics, quarterly averages 1958-67. TABLE 3a.-NUMBER AND PERCENT OF TRADE NAME PRODUCTS IN LIST OF 200 MOST FREQUEN DRUGS FOR 1965 BY DATE OF INTRODUCTION, 1927-65 TLY PRESCRIBED Year of introduction Number of Percent of drugs total Total 188 100 1927-56 79 42 1957-61 83 44 1962-65 26 14 PAGENO="0283" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1427 TABLE 3b.-NUMBER AND PERCENT OF DRUGS IN THE CONSUMER PRICE INDEX FOR 1964-66 BY DATE OF INTRODUCTION, 1927-65 Year of introduction Number of drugs Percent of total Total 14 - 100 1927-56 12 86 1957-61 2 14 1962-65 TABLE 4-NUMBER OF DRUGS BY YEAR OF INTRODUCTION, NUMBER OF PRODUCTS WITH PRICE INCREASES, DECREASES AND NO PRICE CHANGE AND NUMBER OF PRICE INCREASES AND DECREASES, 1957-67 Year of introduction 1 Number of drugs Number of drugs with price increases Number of drugs with price decreases Number of drugs with no price change Number of price increases 2 Number of price decreases Total 188 57 27 104 78 38 1927-56 79 35 7 37 55 8 1957-61 1962-65 83 26 19 3 20 0 44 23 20 3 30 0 1 Prepared from list of 200 most frequently prescribed drugs, 1965, R. A. Gosselin & Co., Dedham, Mass. 2 Some drugs had more than one price increase or decrease. TABLE 5.-DROPOUTS AND REPLACEMENTS IN THE LISTS OF THE 200 MOST FREQUENTLY PRESCRIBED DRUGS FOR THE YEARS 1962 AND 1965 BY THERAPEUTIC CATEGORY Number of Numberof Therapeutic category dropouts replacements Total 31 31 Analgesics 2 Antibiotics Antihistamines 1 0 Anti-infectives 2 6 Antiobesity 0 1 Antispasmodics 0 Ataractics 3 1 Cardiovasculars Cough and cold Derinatologics 1 0 Hormones 0 8 Psychostimulants 2 1 Sedatives and hypnotics 1 2 Oxytoxics 1 0 In the United States District Court for the District of New Jersey Criminal No. [21 U.S.C. 331(a), 333(a), 352(n)] UNITIED STATES OF AMERICA, V. WALLACE LABORATORIES, A DIVISION OF CARTER PRODUCTS, INC., A CORPORATION, DEFENDANT Information COUNT I (39-859 A) The United States Attorney charges: That within the period from on or allout June 15, 1964, to on or abont June 17, 1964 Wallace Laboratories, Division of Carter Products, Inc., a Maryland Cor- poration, the defendant herein, did, within the District of New Jersey, in viola- PAGENO="0284" 1428 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY tion of the Federal Food, Drug, and Cosmetic Act [21 U.S.C. 331 (a)], unlaw- fully cause to be introduced and delivered for introduction into interstate corn- merce at Cranbury, New Jersey, for delivery to Dallas, Texas, coi~signed to the Great Southwest Warehouse~s, Inc., ~ a number of bottles containing a drug designated by the name "Pree MT"; That displayed upon said bottles was certain labeling which consisted, among other things, of the following printed and graphic matter: "50 tablets Pree MT Each tablet contains meprobamate. . . . 200 mg. hydro- chlorothiazide. . . . 25 mg. Caution : Federal law prohibits dispensing without prescription. Wallace Laboratories Division of Oarter Products, Inc., Cranbury,. N.J." `That said `drug, when caused to `be introduced and `delivered for introduction: into interstate commerce as aforesaid, was a drug required to `be dispensed only upon prescription as provid'ed by 21 U.S.C. 353(b) (1) since it was a drug in- tended for use by man and covered by an approved new drug application which became effective under 21 U.S.C. 355 prior to October 10, 1962, and which limited said drug to use under the professional `supervision of a practitioner licensed by law to administer such `drug; That said drug, when caused to be introduced and delivered for introduction: into interstate commerce as aforesaid, was misbranded within the meaning of 21 U.S.C. 352(n) in t'ha't said drug was a prescription drug `distributed and offered for sale in the United State's an'd `said defendant, the manufacturer of `s'aid drug, failed to include in advertisements, caused to be issued by said defen'dant with' respect to `said `drug in the editions of June 1, 1964, and June 8, 1964 of the' Journal of `the American Medical Association, a true `statement of `information in brief summary relating to `the `side effects' `and cont'rain'dications of `said `drug a's' required `by Section 1.105(f) (2) of the regulation's' `published in the Federat Register of January 10, 1964 (29 FR. 257), to wit, the aforesaid advertisements did not present, `from the labeling accepted in the aforesaid new drug applica- tion, as required `by said regulations, information conce'rning certain side effects and contraindication's of `said `drug t'hat were pertinent with respect to the use recommended an'd `suggested in said advertisements, namely, premenstrual ten- sion, and `with respect to the uses for which the dosage form advertised wa's commonly prescribed, namely, hypertension and congestive heart failure, since (1) the `aforesaid advertisements did not state in brief summary or at all with respect `to the side effects of `said drug and its ingredients', namely' `hydrochioro- thiazi'de and meprobamate, that excessive resp'onse and resulting undesirable' electrolyte imbalance may be caused by the administration of sai'd `drug, that azotemi'a may be precipitated or increase'd by `hy,droc'hlorothi'azide, `that it may be necessary to discontinue administration of said drug to patients with se~ ere liver or renal disease that gout has been precipitated that all patients on hydro chlorothiazide should be carefully followed to detect s'i'de reactions or unusual manifestation's of drug idiosyncrasy, s'uc'h as leuko'penia, agran'ulo'cytosi's, or' aplastic anemia, that from the use of meproham'ate `allergic reactions: most often in for~n of a skin rash, have been reported and, le'ss: frequently, more severe reac- tions (`fever, angio-neuro'tic edema an:d bronchial `spasm) have occurred, that ot'her allergic effects from use of meprob'am'ate th'ough rarer, include nonthrom- bocytopenic `purp'ura, chills, edema `and arthralgia, and that said `drug `should be discontinued w'hen hypersensitivity `develop's; and (2) the aforesaid advertise-' melts contained the statement "Contraindication's: None known" which was false~ and misleading as'applied to `said `drug for which contrain'di'c'ations were known; and (3) the aforesaid a'dverti's:ements `did not state in `brief summary or at all with `respect to the contraindica'tions of said' `drug and its ingredients, nam'ely~ hydrochiorothiazide an'd mepro'bamate, th'at hydrochiorothiazide is `con'train'di- cated in the presence of anuria, that therapy with hydroclilorothiazi'de should' not `be reinstituted in patients `who have bad toxic reactions to hydrochlo'ro- thi'azi'de, and that therapy with me'pro'bamate `should not be reinstituted in patients `who have ha'd an allergic reaction to meprobamate. COUNT II (98-706 A) The United States Atto'rney further charges: That on or about June 26, 1964, Wallace Laboratories, Division of Carter Products, Inc., a Maryland Corporation, the defendant herein, did, within the District of New Jersey in violation of the Federal Food Drug and Cosmetic Act [21 U.S.C. 331 (a') I, unlawfully cause to be introduced and delivered for PAGENO="0285" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1429 introduction into interstate commerce at Cranbury, New Jersey, for delivery to South San Francisco, California, consigned to J. F. Coffman and Sons, a number of bottles containing a drug designated by the name "Pree Mr"; That displayed upon said bottles was certain labeling which consisted, among other things, of the following printed and graphic mat1~er: "50 Tablets Pree MT Each tablet contains meprobamate. . . . 200 mg. h~dro- chiorothiazide. . . . 25 mg. Caution Federal law prohibits dispensing without prescription. Wallace Laboratories Division of Carter Products, Inc., Cranbury, N.J." That said drug, when caused to be introduced and delivered for introduction into interstate commerce as. aforesaid, was a drug required to be dispensed only upon prescription as' provided by 21 U.S.C. 353(b) (1) since it was a drug intended for use by man and covered by an approved new drug application which became effe~ctive under 21 U.S.S. 355 prior to October 10, 1962 and which limited said iir1~ig~ to use under the professional supervision of a practitioner licensed by law to administer such drug; That said drug, when caused to be introduced and delivered for introduction into interstate commerce as aforesaid, was misbranded within the meaning of 21 U.S.C. 352(n) in that said drug was a prescription drug distributed and offered for sale in the United States and said defendant, the manufacturer of said drug, failed to include in advertisements, caused to be issued by said defendant with respect to said drug in the editions of June 1, 1964, June 8, 1964, June 15, 1964, and June 22, 1964, of the Journal of the American Medical Associa- tion, a true statement of informaion in brief summary relating to the side effects and contraindications of said drug as required by Section 1.105(f) (2) of the reg- ulations published in the Federal Register of January 10, 1964 (29 F.R. 257), to wit, the aforesaid advertisements did not liresent, from the labeling accepted in the aforesaid new drug application, as required by said regulations, informa- tion concerning certain side effects and coutraindications of said drug that were pertinent with respect to the use recommended and suggested in said advertisements, namely, premenstrual tension, and with respect to the uses for which the dosage form advertised was commonly prescribed, namely, hyper- tension and congestive heart failure, since (1) the aforesaid advertisements did not state in brief summary or at all with respect to th~ side effects of said drug and its ingredients, namely hydrochlorothiazide and meprobamate, that excessive response and resulting undersirable electrolyte imbalance may be caused by the administration of said drug, that azotemia may be precipitated or increased by hydrocblorothiazide, that it may he necessary to discontinue administration of said drug to patients with severe liver or renal~ disease~ that gout has been precipitated, that all patients on hydroclorothiazide should be carefully followed to detect side reactions or unusual manifestations of drug idiosyncrasy, such as leukopenia, agranulocytosis or aplastic anemia, that from the use of meprobamate allergic reactions most often in form of a skin rash, have been reporlied and, less frequently, more severe reactions (fever, angioneu- rotic edema and bronchial spasm) have occurred, that other allergic effects from use of meprobamat though rarer, include nonthrombocytopenic purpura, chills, edema and arthralgia, and that said drug should be discontinued when hypersensitivity develops; (2) the aforesaid advertisements contained the statement "Contraindications None known" which was false and misleading as applied to said drug for which contraindications were known; and (3) the afoilesaid advertisements did not state in brief summary or at all with respect to the contraindications of said drug and its ingredients, namely, hydro- chlorothiazide and meprobamate, that hydrochlorothiazide is contraindicated in the presence of anuria, that therapy with bydrochiorothizide should not be reinstituted in patients who have had toxic reactions to hydrochlorohiazide, and that therapy with meprobamate should not be reinstituted in patients who have had an allergic reaction to meprobamate. Unitel states Attoraey for the District of New Jersey. PAGENO="0286" 1430 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY FEBRUARY 16, 1906. Re 17 S V WalLace Laboratories criminal No 322-65 DJ#FMV JWD aiw 21- 4&-334. (Attention of Harold P Shapiro Chief Administrative Regulations Section Criminal Division.) DEPARTMENT OF JUSTIcE, Washixn~gton, D.C. SIRs: Reference Is made to your letter dated February 9, 1966. Please be advised that the Honorable Arthur S. Lane sentenced the above- named defendant to a fine of $1,000.00 on each of counts I and II of the information. Respectfully, DAVID M. SATZ, Jr., US Attorney By MARK E Lrrowrrz Assistant U.S. Attorney. In the United States District Court for the Northern District of Illinois Eastern Division No. (21 U.S.C. 331 and 333) UNITED STATES OF AME1uCA V ABBOTT LABORATORIES, A CORPORATION COUNT I The United States Attorney charges: That on or about May 6, 1965, Abbott Laboratories, a corporation, organized and existing under the laws of the State of Illinois and trading and doing busi ness at North Chicago Illinois the defendant herein did within the Eastern Division of the Northern District of Illinois, in violation of the Federal Food, Drug and Cosmetic Act [21 U.S.C. 331(a)], unlawfully cause to be introduced and delivered for introduction into interstate commerce at North Chicago Illinois for delivery to Milwaukee Wisconsin consigned to St Mary s Hospital a number of bottles containing a drug designated by the name Eutonyl [2] That displayed upon said bottles was certain labeling which consisted among other things, of the following printed and graphic matter: 100 No 6876 Filmtab EUTONYL 10 mg PARGYLINE HYDROCHLORIDE Caution Federal (U S A) law proihibits dispensing without prescription Each tablet contains Eutonyl (Pargyline Hydrochloride) N Benzyl N methyl 2 pro pynylamine hydroehioride-lO mg Lot No 771-1413-22 Abbott Laboratories North Chicago Ill U S A That said drug when caused to be introduced and delivered for introduction into interstate commerce as aforesaid was misbranded within the meaning of 21 U S C 352(f) (1) in that its labeling failed to bear adequate directions foi use and it was not exempt from such requirement since it was a prescription drug which was a new drug subject to 21 U S C 355 and its labeling namely the monograph relating to said drug set forth in the 1965 Edition of the Physician's Desk Reference, was not, as required by regulations, 21 CIFR 1.106(b) (4) (i), substantially the same as the labeling ~uthorized by the approved new drug application effective with respect to said drug. [3] That said drug, when caused to be introduced and delivered for introduction into interstate commerce as aforesaid was further misbranded within the mean- PAGENO="0287" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1431 ing of 21 U.S.C. 352(n) in that said defendant, the manufacturer of said drug, failed to include in the advertisement caused to be issued by said defendant with respect to said drug in the February 8, 1965 Edition of the Journal of the Ameri- can Medical Association, a true statement of information in brief summary re- lating to the side effects, contraindications and effectiveness of said drug as re- quired by regulations, 21 CFR 1.105(e) and (f), to wit, the aforesaid advertise- ment did not present a brief summary which fairly showed the effectiveness of said drug in the conditions for which it was recommended in the advertisement, together with a showing of all side effects and contraindications of said drug that were pertinent with respect to the uses recommended and suggested in said advertisement, including the information from the approved new drug applica- tion labeling for said drug concerning said side effects and contraindications. United States Attorn~ey for the Northern District of Iflinois. In the United States District Court for the District of New Jersey UNITED STATES OF AMERICA v. CIBA PHARMACEUTICAL COMPANY, DIvIsIoN OF CIBA CORPORATION Criminal No. 391-66 (21 U.S.C. 331(a) and 333(a)) Infornia~tion COUNT I The United States Attorney charges: That on or about September 30, 1964, CIBA Pharmaceutical Company, Division of CIBA Corporation, a dorporation organized and existing under the laws of the State of Delaware, and trading and doing business at Summit, New Jersey, the defendant herein, did, within the District of New Jersey, in violation of the Fed- eral Food, Drug and Cosmetic Act, [21 U.S.C. 331(a)], unlawfully cause to be introduced and delivered for inti~oduction into interstate commerce at Summit, New Jersey, for delivery to Glendale, New York, consigned to Barry Division of Ketchum & Co., Inc., a number of bottles containing a drug, Esidrix-K. That displayed upon said bottles was certain labeling which consisted, amkmg other things, of the following printed and graphic matter: Esidrix-K 50/1000. Each tablet contains Esidrix Brand of Hydrochlorothiazide 50 mg. Potassium Chloride 1000 mg. Caution: Federal law prohibits ~lispensing without prescription. Lot No. 282 305 CIBA Pharmaceutical Company, Summit, N.J. That said drug when caused to be introduced and delivered for introduction into interstate commerce as aforesaid, was misbranded within the meaning of 21 U.S.C. 352(f) (1) in that its labeling failed to bear adequate directions for use* and it was not exempt from such requirement since it was a prescription drug, which was a new drug subject to 21 U.S.C. 355 and its labeling, namely, a mailing piece identified as A/9507 February 1964 entitled in part "For `K-Losers' in edema Esidrix-K," was not, as required by regulations, `21 CFR 1.106(b) (4) (i) sub- stantially the same as the labeling authorized by the approved new drug appli- cation effective with respect to said drug. That said drug, when caused to be introduced and delivered for introduction into interstate commerce as aforesaid, was further misbranded within the mean- ing of 21 U.S.C 352(n) in that said defendant the manufacturer of said drug, failed to include in the `advertisement caused to be issued by said defendant with respect to said drug in the Septemiber 21, 1964 E'dition of the Journal of the American Medical Association, a true statement of information in brief summary relating to the side effects, contraindications and effectiveness of said drug as re- quired by regulations, 21 CFR 1.105(e) and (f), to wit, the aforesaid advertise- ment did not present a brief summary which fairly showed the effectiveness of said drug in the conditions for which it was recommended in the advertisement, together with a showing of all side effects and contraindications of said drug ~that were pertinent with respect to the uses recommended and suggested In said advertisement, including the information from the approved new drug application labeling for said drug concerning said side effects and contraindications. PAGENO="0288" 1432 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY ~ COUNT II The United States Attorney further charges: That on or about November 13, 1964, CIBA Pharmaceutical Company, Division of CIBA Corporation, a corporation organized and existing under the laws of the State of Delaware, and trading and doing business at Summit, New Jersey, the defendant herein, did, within the District of New Jersey, in violation of the Federal Food, Drug and Cosmetic Act, [21 U.S.C. 331 (a) I , unlawfully cause to be introduced and delivered for introduction into interstate commerce at Sum- mit, New Jersey, for delivery to New York, New York, consigned to New York Division Ketchiim & Co., Inc., a number of bottles containing a drug, Esidrix. That displayed upon' said bottles was certain labeling which consisted, among other things, of the following printed and graphic matter: Esidrix Hydrochiorothiazide U.S~P. 25 mg. Each tablet contains Esidrix, brand of Hydroc'hlorothiazide USP 25 mg. Caution: Federal law prohibits dispensing without prescription. Lot No. 282281 Ciba Pharmaceutical Company, Summit, N.J. That said drug when caused to be introduced and delivered for introduction into interstate commerce as afore'~aid, was misbranded within the meaning of 21 U.S.C. 352(f) (1) in `that its' labeling failed to bear adequate directions for use and it `was not exempt from such requirement since it was a prescription drug, which was a new drug subject to 21 U.S.C. 355 and its labeling, namely, a mailing piece identified as A~/9507 February 1964 entitled in part For K Losers in edema Esidrix-K," was not, as required by regulations, 21 CFR 1.106(b) (4) (i) substantially the same as the labeling authorized by the approved new drug ap- plication effective with respect to said `drug That said drug, when caused to be introduced and delivered for introduction into interstate commerce as aforesaid, was further misbranded within the mean- ing of 21 U.S.C. 352(n) in that said defendant the manufacturer of said drug, failed to include in the advertisement caused to be issued by said defendant with respect to said drug in ~the `September' 21, 1964, Edition of the Journal of the American Medical Association a true statement of information in biiet summary relating to the side effects contraindications and effectiveness of said drug as required by regulations 21 CFR 1 105(a) and (f) to wit the aforesaid adver tisement did not present a brief summary which fairly showed the effectiveness of said drug in the conditions for which it was recommended in the advertise ment together with a showing of all side effects and contraindications of said drug that were pertinent with respect to the uses recommended and suggested in said advertisement including the information from the approved new di ug ap plication labeling for said drug concerning said side effects and contraindications COUNT III The United States Attorney further charges: That on or about April' 8, 1965 CIBA Pharmaceutical Company, Division of CIBA Corporatio'n, a corporation org'anized and existing under the laws of the State of Delaware, and trading and doing business at Summit, New Jersey, the defendant herein, did, within the District of New. Jersey, in violation of the Fed- eral Food, Drug and Cosmetic Act 21 U.S.C~ 331(a)], unlawfully cause t'o be introduced and delivered for introduction into interstate commOrce at Summit, New Jersey; for delivery to New York, New York, consigned `to New York Division of Ketchurn'& Co., Inc., a number of bottles containing a drug, Esidrix. That displayed upon said bottles was certain labeling which consisted, among other `things~ of the following printed and graphic matter: 1~sidrix Hydrochlorotbiaslde U.S.P. 50mg. Each `tablet contains Esidrix, brand of Hydrochlo'rothiazi'de USP 50 mg. Oaution: Federal law prohibits dispensing without prescriptio'h. Lot No. 282' 944 Ciba Pharmaceutical Company, Summit, N.J. That said drug when caused to be `introduced and delivered for introduction into `interstate commerce as `foresaid, was misbranded within the meaning of 21 U.S.C. 352(f) (1) in `that its labeling failed to bear adequate directions for use and it was not exempt `from such requirement `since it was a prescription drug, which was a new drug subje~t to 21 U.S~C. 355 and its labeling, namely, the monograph `relating to said drug set forth in the 1965 Edition of `the Physicians' Desk Reference was not, as required by regul'atious, 21 CFR 1.106(b) (4) (i) sub- stantially the same as the labeling authorized by the approved new drug appli cation effective With respect to said drug... PAGENO="0289" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1433 That said drug, when caused to be introduced and delivered for introduction into interstate commerce `a's aforesaid, was further misbranded within the mean- ing of 21 U.S.C. 352(n) in that said defendant the manufacturer of said drug, failed to include in the `advertisement caused to be issued by said defendant with respect to `said drug in the April 5, 1965, Edition of the Journal of the American Medical Association, a `true statement of information in brief summary relating to the side effects, contraindication's and effectiveness of said drug as required by regulations, 21 CUR 1.105 (e) and (f), to wit, the aforesaid advertisement did not present `a brief summary which fairly shOwed the effectiveness of said drug in the conditions for which it was recommended in the `advertisement, together with a showing of all `side effects a'nd eontraindic'ations of said drug that were pertinent with respect to the uses `recommended and `suggested in said advertisement, in- cluding the information from the approved new drug application labeling for said drug concerning `said `side effects and contrai'ndic'a'tions. COUNT IV The United States Attorney further charges: That on `Or about April 8, 1965, CIBA Pharmaceutical Company, Divisi'on of CIBA Corporation, a corporation organized `and existing under the laws of the State of Delaware, `and trading and doing business at Summit, New Jersey, the defendant herein, did, within the District of New Jersey, in violation `of the Fed- eral Food, Drug, and Cosmetic Act, [21 U.S.C. 3~31(a)], unlawfully cause to be in- troduced and delivered for introduction into interstate commerce at Summit, New Jersey, for delivery to New York, New York, consigned to New YOrk Divisi'on of Ketchum & Co., Inc., a number of bottles containing `a drug, Esidrix. That displayed upon `said bottles was certain labeling which consisted, `among other things, `of the following printed and graphic matter: Esidrix Hydrochlorothiazide DSP. 25 ~ng. Each tablet contains Esidrix, br'and of Hydrochiorothiazide USP 25 mg. Caution: Federal law prohibits dispensing without prescription. Lot No. 282 982 Ciba Pharmaceutical Company, Summi't, N.J. That said drug when caus'ed to be introduced and delivered for introducti'on into interstate commerce as afores'aid, was misbranded within the meaning of 21 U.S.C. 352(f) (1) in that its labeling failed to bear adequ'a'te directions f'or use and it was not exempt from `such requirement `since it was a prescription drug, which was a new d'rug `subject to 21 U.S.C. 355 and its labeling, namely, the monograph relating to s'aid drug set forth in the 1965 Edition of `the Physician's' Desk Reference, was not, as required by regulations 21 CUR 1.106(b) (4) (i.) sub- stantially the same a's the labeling authorized `by the approved new drug `appli- cation effective with `respect to said drug. That said drug, when caused to be introduced and delivered for introduction into interstate commerce as aforesaid, wa's further misbranded within the'me'an- ing of 21 U.S.C. 352(n) in that said defendant the ~nanuf'acturer `of said drug, failed to include in the advertisement, caused to be issued by s'aid defendant with respect to said drug in the April 5, 1965 Edition of the Journal of the American Medical Association, `a true `statement `of information in brief summary relating to the `side effec'ts, contraindic'ations and effectiveness of said drug as required by regulations, 21 CUR 1.105 (e) and (f), to wit, the aforesaid advertisement did not presen't a brief summary which fairly showed the `effectiveness of said drug in the conditi'ons for which it was recommended in `the advertisement, to- gether with a showing `of all `side effects and c'ontraindic'ati'ons `of `said drug that were pertinent with respect to `the uses `recommended and suggested in said advertisement, including the information from the approved new drug appli- cation labeling for said drug concerning said side eff'ects `and c'ontraindications. DAVID M. SATZ, Jr., United $tatcs Attorney, District of New Jersey. 81-280-68----pt. 4--lO PAGENO="0290" 1434 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY In the United States District Court for the District of New Jersey Criminal No. 391-66 Bill of Particulars UNITED STATES OF AMERICA V. CIBA PHARMACEUTICAL COMPANY, DIVISION OF CIBA CORPORATION Now comes the United States of America by David M. Satz, Jr., United States Attorney, and Matthew J. Scola, Assistant United States Attorney for the Dis- tricj of New Jersey, and pursuant to Order of the Court, under Rule 7(f) of the Federal Rules of Criminal Procedure, provides the following Bill of Par- ticulars: COUNT I 1. The mailing piece referred to was not substantially the same as the label- ing authorized by the approved new drug application effective with respect to the drug Esidrix-K in the following respects: (a) Taken as a whole, the mailing piece would leave the prescribing phg- sician with a different interpretation of the effects of the drug than he would have by reading the authorized labeling, in that the mailing piece implies that the drug would protect all patients against potassium electrolyte imbalance. (b) The mailing piece omits the caution statement: "Combined therapy: When necessary, other hypertensive agents may be added cautiously. Since this drug potentiates the antihypertensive effect of other agents, such addi- `tions should be gradual. Dosages of ganglionic blockers in particular should be halved." (c) The mailing piece omits these factors which predispose to hypokelernia (hypopotassemia) : "intensive and prolonged diuretic therapy," "restricted sodium chloride intake" and "corticosteroid therapy." (d) The mailing piece omits the information expressed in the approved labeling: "Since these tablets may not provide all the potassium required by some patients, a diet rich in this element will help obviate depletion." (e) The mailing piece misleadingly claims that the drug affords "protec- tion" by the following two statements: "Nearly twice the potassium pro- tection offered by any other combination tablets for edema/hypertension" and that the drug "provides the most potassium protection", thereby in- viting unwarranted reliance in the use of the drug, by leading the reader to believe that Esidrix-K, in recommended dosage, can prevent or correct potas- sium electrolyte imbalance in all patients, whereas there are some patients who require much more potassium than can be supplied by the upper range of the usual dose of Esidrix-K recommended (1.048 grams of potassium, or 2 .grams of potassium chloride in two tablets), and, therefore, some patients who may not be protected at all from potassium imbalance by the highest recommended daily dose of this drug. (f) The mailing piece states that the drug provides an "amount [of po- tassium] well within recommended prophylactic range (1-3 Gm.) ," which statement is misleading and at variance with the approved labeling in that only the higher recommended maintenance daily dose of two tablets of Esidrix-K 1000 supplies sufficient potassium (1.048 Gin.) to he within the lower part of this prophylactic range. The statement is further misleading and at variance with the approved labeling because even 1.048 Gm. of potas- sium daily would not protect all patients against potassium electrolyte imbalance. (g) The mailing piece states, as one reason for the claim that Esidrix-K provides the most potassium protection, that the 50/1000 tablet "dissolves completely and consistently in the upper intestine within 17 to 20 minutes, facilitating rapid absorption and full therapeutic benefits," which statement has not been approved for package in~ert labeling, and is contrary to fact, since the work described in the new drt~g application to which the statement refers was on simulated intestinal fluid in vitro and not in the actual upper intestine of men or animals. (h) The mailing piece distorts the scientificarticle of R. E. Ray (Reference No. 6) to an extent that it implies approval of a more prolonged adminis- tration of the drug than the author in fact gave it, in that the article is quoted incompletely to imply that Ray gave Esidrix-K, with good results and without untoward reactions, to 45 women with obesity and cyclic edema PAGENO="0291" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1435 in continuous prolonged therapy for 6 months, whereas the article reported in fact that Esidrix-K was not administered continuously over that period, but was given intermittently, two weeks on and two weeks off during the first 3 months and thereafter only as required. 2. The advertisement in the September 21, 1964 edition of the Journal of the American Medical Association failed to present a brief summary relating to side effects, contraindications and effectiveness of the drug Esidrix-K as follows: (a) The advertisement omits the following essential information: (1) That the drug potentiates the antihypertensive effect of other agents, that additions of such agents should be gradual, and that dosages of ganglionic blockers, in particular, should be halved. (2) That some of the factors predisposing to hypokalemia (hypo- potassemia) are intensive and prolonged diuretic therapy, restricted sodium chloride intake, and corticosteroid therapy. (3) That "In severe hypokalemia, large oral doses of potassium may be necessary to correct the deficit" and "Since these tablets may not provide all the potassium required by some patients, a diet rich in this element will help obviate depletion." (b) In the statement "Important . . . for doctors who want to be sure their patients on diuretic antihypertensive therapy have potassium pro- tection: Be sure to prescribe 1~sidrix-K . . ." the advertisement does not fairly show the effectiveness of the drug and lacks fair balance in presenting information as to such effectiveness, since it implies that the drug, in recommended dosage, can prevent or correct potassium electrolyte imbalance in all patients, while in fact there are some patients who may not be pro- tected at all from potassium imbalance by the highest recommended daily `dose of Esidrix-K. (c) The advertisement claims that Esidrix-K "dissolves consistently and completely in intestinal juices within 17 to 20 minutes . . .", accompanied by a sketch of part of the gastrointestinal `tract, thereby implying, unfairly and falsely, that this dissolution occurs in intestinal fluid `within the intestines of patients, contrary to results of investigations made by defendant which report that the earliest complete disintegration time of Esidrix-K observed in the actual intestines of a patient was two hours. COUNT 2 1. The mailing piece was not substantially the same as the labeling authorized by the approved new drug application effective with respect to the drug Esidrix in the following respects: (a) The combined therapy warning set out above in Count 1, gl (b) is omitted. (b) The mailing piece distorts scientific reports to an extent that they appear to say something that was not in fact reported, as follows: (1) The findings reported in the 1959 article by Hejtmancik, Hap- mann and Kroetz (Reference No. 4) are misrepresented so as to exagger- ate efficacy, in part by failing to mention that 7 of the 19 patients re- referred to were given a daily maintenance dose of 50 mg. three `times daily, contrary to the claim that "Effective maintenance dosage was 50 rng. twice daily," and further, that these 7 patients were given an initial dose of 300 mg. rather than the recommended initial dose of 50-100 mg.; and the mailing piece further fails to mention that the authors' patients suffered such side effects as depression of serum potassium levels below normal, including one case of clinical hypopotassemia with marked weakness, and elevation of blood urea nitrogen levels, which prompted the authors to warn that "the rise in the values of blood urea nitrogen observed in some indicate a need for caution in the administration of this drug." (2) The mailing piece reports only the satisfactory clinical responses noted in the 1959 article by Zuspan, Barnes and Bell (Reference No. 5), but fails to mention the unsatisfactory effects reported by the authors, including the fact that 18% of the group of patients treated with the drug experienced adverse reactions, as compared to no adverse reactions among a group receiving a placebo. (3) The mailing piece quotes the 1959 article of Kemp and 1~'indley (Reference No. 7) to show that Esidrix is "completly effective" in treat- PAGENO="0292" 1436 COMPETITIVE PROBLEMS iN THE DRUG INDUSTRY ing 26 out of 30 patients with edema, but fails to disclose the fact `that these authors utilized concomitant adjunctive therapeutic measures in those patients where required (including `bed rest, digitalis, codium ,restriction~, etc.), and further that they reported side effects of bypokale- mia, mild~ azotemia with weakness and postural hypotension, a tendency toward hypontremia and hypochioremic alkaloris, and salt depletion. (4) The mailing piece, in citing the 1959 statement by Clark (Refer- ence No, `8), fails to make clear that this statement reported observa- tions based not on an acceptable clinical study, but on only two patients with edema whom he treated with Esidrix in the course of his practice. Further, the mailing piece cites the Clark statement to support etlicacy - in diuresis of "steroid-induced edema", while the Clark statement dis- closes that he did not know whether the edema was caused by the disease itself or the steroid therapy. 2. The advertisement in the September 21, 1964 edition of the Journal of the American Medical Association failed to present a brief summary relating to side effects, conttaindications and effectiveness of the drug Esidrix, as follows: (a) The advertisement omits the essential information set out above at Count I, § 2(a) (1).. (b) The advertisement did not present a fair balance of information on effec~ivene*ss and side effects and contraindications in that the advertisement distort~ scientific reports, as follows: (1) With respect to the 1959 article by Dr. B. Calesnick (Reference No. 1) the advertisement gives the general impression that the author mipimized the potential dangers of Esidrix, although he, in fact, stressed the potential dangers of the drug, particularly the side effect of potas- sium depletion; and further the advertisement misrepresents both the extent of initial transient hypokalemia observed by the author by stating that it was noted in a `few patients", whereas the author does not so limit its occurrence, and the effect of continued medic'ation o'n potassium level by stating that the potassium levels returned to "normal" with con- tinued medication, whereas the author reported only a "trend toward a return to th~ control level" with continuous medication. (2) With respect to the 1959 article by Drs. Kemp and Findley (Reference No. 2), the advertisement misleadingly implies that in all of the 30 patients in that study serum potassium levels were slightly elevated and that danger of a lowered blood potassium in all those patients was non--existent, whereas serum electrolyte studies were made on only 18 patients and, although the average serum potaSsium level showed a slight increase after 10 days of Esidrix therapy, five patients showed a decrease in serum potassium and one of the five was diagnosed as having hypokalemia. COUNTS III AND iv 1. The monograph relating to the drug Esidrix in the 1965 edition of the Physicians' Desk Reference omits the caution statement on combined therapy set out aboveat Count I, § 1(b). 2. The advertisement in the April 5, 1965 edition of the Journal of the Amer- ican Medical Association failed to present a brief summaCy relating to side effects, contraindications and effectiveness of the drug Esidrix as follows: (a) The advertisement fails to contain in brief summary a warning relat- ing to the possibility of the drug's causing bowel lesions. (b) The advertisement omits in brief summary the caution statement on combined therapy set out above at Count I, § 1(b). United states Attorney. Assistant United iltates Attorney. PAGENO="0293" COMPETITIVE `PRO~LEMS IN THE DRUG INDUSTRY 1437 In the United StaI~es District Court for the Western District of Michigan Southern Division UNITED STATES OF AMERICA. V. PIlE UPJOHN COMPANY, A CORPORATION No. 21 U.S.C. 331 and 333 COUNT I The United States Attorney charges: That on or ahout August 26, 1965 the Upjohn Company, a corporation, or- ganized and existing under the laws of the state of Delaware and trading and doing business at Kalamazoo, Michigan, the defendant herein, did, within the Southern Division of the Western District of* Michigan, in violation of the Federal Food, Drug, and Cosmetic Act [21 U.S.C. 331(a)], unlawfully cause to be introduced and delivered for introduction into interstate commerce at Kalama- zoo, `Michigan for delivery to Cleveland, Ohio consigned to the Upjohn Company warehouse at 1740 Chester Avenue, Cleveland, Ohio, a number of bottles con- taining a drug designated by the name "Orinase"; That displayed upon each of said bottles was certain labeling which con- sisted, among other things, of the following printed and grapihic matter: 200 Tablets No. 5849, Orinase (tolbutamide) 0.5 Gm. Each tablet contains Tolbutamide . . . 0.5 Gm. Caution: Federal law prohibits dispensing without prescription. The Upjohn Company, Kalamazoo, Michigan. That said drug, when caused to be'introduced and delivered for introductiofl into interstate commerce as aforesaid, was misbranded within the meaning, of 21 U.S~C. 352(f) (1) in that its labeling failed to bear adequate directions for use and it was not exempt frQm such requirement since it was a prescription drug which was a new drug subject to 21 U.S.C. 355 and its labeling, namely, the monograph rela±ing to said drug set forth in the 1965 Edition of the Physician's Desk Reference, was not, as required by regulations, 21 CF~R 1.100(b) (4) (1), substantially the same as the labeling authorized by the approved new drug ap- plication effective with respect to said drug. HAROLD D. BEATON, United ~S1tates Attorney. In The United States District Court for The Eastern District of New York No. 66-M-163 UNITED STATES OF AMERICA, LIBELANT V. WARNER-LAMBERT PHARMACEUTICAL COMPANY, Claimant An article of drug consisting of 68 bottles, more or less, of an. article labeled in part: "100 80 mg. Tablets Peritrate SA Sustained Action (pentaerythritol tetranitrate) (Warner-Chilcott Laboratories Div., Morris Plains, N.J.)" DECREE On the 28th day of February, 1966, a Libel of Information, against the above- described article was filed in this Court on behalf of the United States of America by the United States Attorney and the Assistant United States Attorney for this District. The Libel alleges that the article, namely 68 bottles of Peritrate SA, pro- ceeded against is a drug which was shipped in interstate commerce and is in violation of the Federal Food, Drug, and Cosmetic Act [21 U.S.C. 355 (a) and 21 U.S.C. 352(a),352(f) (1) and352(n)]. Pursuant to monition issued by this Court, the United States Marshal for this District seized said article on the 28th day of February, 1966. Thereafter, Warner- Lambert Pharmaceuth~al Company of Morris Plains, New Jersey, intervened and PAGENO="0294" 1438 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY filed claim to said article. Now without admitting any of the allegations of the Libel, Claimant consents that a decree, as therein prayed for, be entered. It is therefore ordered, adjudged and decreed That, based on the consent of the Claimant which does not admit any of the allegations of the Libel, the said article, namely 68 bottles of Peritrate SA, under seizure, is in violation of the Federal Food, Drug, and Cosmetic Act [21 U.S.C. 355(a) and 21 U.S.C. 352(a), 352(f) (1) and 352(n)] and it is hereby condemned pursuant to 21 U.S.C. 334(a); And it is further ordered, adjudged and decreed That the United States Mar- shal shall destroy the said condemned article; costs of which shall be taxed and paid by the Claimant subsequent to destruction. And it is further ordered, adjudged and decreed That the bond for costs executed a nd filed herein be and the same hereby is canceled upon payment by Claimant of Oourt costs of $35.00, and $25.88 Marshal's fees. Dated this 12th day of May, 1966. GEORGE ROSLING, U.S.D.J. We hereby consent to the entry of the foregoing decree. WARNEE-LAMBERT PHARMACEUTICAL COMPANY By ROBERT B. CT~AIL, Vice President. ROGERS, lOGE & HILLS, By JAMES S. IIOGE, Attorneys for Claimant Warner-Lambert Pharmaceutical Company. UNITED STATES ATTORNEY, By CARL GOLDEN, Assistant United States Attorney. STAlE OF NEW YORK County of New York, ss: Personally appeared before me Robert B. Clark who being duly sworn deposed and said that he is the Vice President of Warner-Lambert Pharmaceutical Com- pany and the seal affixed hereto is the seal of said corporation and that his signature is duly authorized. LEONORE H WICEMANN Notary Public State of New York District Court of the United States, Eastern District of New York THE PRESIDENT OF THE UNITED STATES OF AMERICA To the Marshal of the Eastern District of New York-Greetings: Whereas, a libel of information hath been filed in the District Court of the United States for the Eastern District of New York, on the 28th day of February, in the year of our Lord one thousand nine hundred and sixty-six by Joseph P. Hoey, Esquire, United States Attorney, on behalf of the United States of America, against An article of drug consisting of 68 bottles, more or less, of an article labeled in part: (btl.) "100 80 mg. Tablets Peritrate SA Sustained Action (Pentacrythritol tetranitrate) Caution: Federal law prohibits dispensing without prescription. Warner-Chilcott Laboratories Div., Morris Plains, N.J. Usual Adult Dose: b.i.d. 1 tablet immediately on arising and 1 tablet 12 hours later *** Read accom- panying directions ~ Quality Control No. 3264115B" (Package insert) "349G243 Peritrate SA (pentacrytbritol tetranitrate) pen- trate with Phenobarbital SA Sustained Action Each tablet contains: Phenobar- bital 45 mg. (3/4 gr.) `u"' Pentacrythnitol Tetranitrate 80 mg. ~`~" (For breach of the provisions of 21 U.S.C. 301 et seq.) for the reasons and causes in the said libel of Information mentioned, and praying the usual process and Monition of the said Court in that behalf to be made, and that all persons interested in the said above-entitled article may be cited in General and Special, to answer the premises, and all proceedings being had that the said above-entitled article may, for the causes in the said libel of Information mentioned, be condem- ned as forfeited to the use of the United States. You are therefore hereby commanded, to attach the said above-entitled article and to detain the same in your custody until the further order of the Court respecting the same, and to give due notice to all persons claiming the same, or knowing or having anything to say why the same should not be condemned and sold pursuant to the prayer of the said libel of Information, that they be PAGENO="0295" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1439 and appear before the said Court, to be held in and for the Eastern District of New York on the 23rd day of March, 1966, at 10:30 a.m. of the same day, If the same shall be a day of jurisdiction, otherwise on the next day of jurisdiction thereafter, then and there to interpose a claim for the same, and to make their allegations in that behalf. And what you shall have done in the premises do you then and there make return thereof together with this writ. Witness, the Honorable Joseph C. Zavatt Chief Judge of said Court, at the Borough of Brooklyn, in the Eastern District of New York, this the 28th day of February, in the year of our Lord one thousand nine hundred and sixty-six, and of the Independence of the United States of America the one hundred and ninetieth. LEWIS ORGEL, Clerk. By MARIE R. BARETTI, - Deputy Clerk. In the United States District Court for the Eastern District District of New York No.- UNITED STATES OF AMERICA V. An article of drug consisting of 63 bottles, more or less, of an article labeled in part: (btl.) "100 86 mg. Tablets Peritrate SA Sustained Action (Pentaerythri- to! tetranitrite) Caution: Federal law prohibits dispensing without prescrip- tion. Warner-Chilcott Laboratories Div., Morris Plains, N.J. Usual Adult Dose: bid. 1 tablet immediately on arising and 1 tablet 12 hours later * * * Read ac- companying directions * * * Quality Control No. 3264115B" (package insert) "3490243 Peritrate SA (pentaerythrltol tetranitrate) Peritrate with Phenobar- bital SA Sustained Action Each tablet contains: Phenobarbital 45 mg. (84 gr.) * * * Pentaerythritol Tetranitrate 80 mg. * * *" LIBEL OF INFORMATION To The Honorable Judge of the United States District Court For The Eastern District of New York. Now comes the United States of America, by Joseph P. Racy, United States Attorney for the Eastern District of New York and shows to the Court: 1. That this libel is filed by the United States of America and prays seizure and condemnation of a certain article of drug, as hereinafter set forth, in accord- ance with the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.). 2. That there Is at Glendale, New York, in possession of Barry Division of Ketchum and Company, Inc., 80-00 Cooper Avenue, an article of drug consisting of 63 bottles, more or less, of an article labeled in part: (btL) "100 80 mg. Tablets Peritrate SA Sustained Action (Pentaerythritol tetranitrate) Caution: Federal law prohibits dispensing Without prescription. Warner-Chilcott Laboratories Div., Morris Plains, N.J. Usual Adult Dose: b.i.d. 1 tablet immediately on arising and 1 tablet 12 hours later * * * Read accompanying directions * * * Quality Control No. 3264115B" (package insert) "3490243 Peritrate SA (pentaerythritol tetra- nitrate) Peritrate with Phenobarbital SA Sustained Action Each tablet contains: Phenobarbital 45 mg. ($4 gr.) * * * Pentaerythritol Tetranitrate 80 rug. * * *" which were shipped, on or about February 4, 1966, by Warner-Chilcolit Labora- tories, Inc., 201 Tabor Road, Morris Plains, New Jersey, via Parcel Delivery Service, Inc. 3. That the aforesaid article is a new drug which may not be introduced or delivered for introduction into interstate commerce, under said Act, 21 U.S.C. 355(a) since it is a new drug within the moaning of 21 U.S.C. 321(p) in that it is not generally recognized as safe and effective for the uses recommended or suggested in the labeling, and no approval of an application filed pursuant to 21 U.S.C. 355(b) is effective with respect to such drug for all of such uses, since the labeling of the drug, namely, the aforesaid package insert and the mailing piece which is identified "490T718 October, 1965," and contains the reprints entitled `Pentaerythritol Tetranitrate, As Adjunct Therapy In The Immediate Pastin- farction Period," reprinted from Angiology, Vol. 15, 11, November 1904, and "The Use Of Coronary Vasedilators In Acute Coronary Occlusion," reprinted PAGENO="0296" 1440 COMPETITIVE PROBLEMS IN THE DRIJG INDUSTRY from "A Scientific Enhibit Presented at The American College of Cardiology, Boston, Mass., February 17-21, 1965," offers the drug for the following purposes for which the drug is not generally recognized as safe and effective, and under the following representations of safety and efficacy, which purposes and rep- resentations are not contained in the labeling accepted by the Food and Drug Administration under the presently approved new drug application for the article: (Package insert)- 1. "This drug increases blood flow and oxygen supply to the myocardium... 2. ". . . the dilation of the capillaries of the postarteriolar bed with a resultant greater flow of blood through the arteries and arterioles to supply these capillaries. 3. "This drug, because of its gradual onset of action, is safe for prolonged use in all patients with coronary artery disease, because it does not signifi- cantly change the blood pressure, cardiac output, or pulse rata 4. ". . . for adequate, sustained increase in blood flow and oxygen supply to the myocardiam. . ." (mailing piece identified "490T718 October, 1965") 1. that the drug is for use in the immediate postinfarction period and in acute coronary occlusion. 2. that a purportedly well-controlled clinical investigation, comparing patients treated with Peritrate SA with similar patients treated with a placebo beginning at a time closely following the onset of acute mnyocardial infarction, proved that the fact that 22 percent more patients treated with Peritrate SA remained alive after two years than patients treated with a placebo was due to the action of the drug. 4. That the aforesaid article was misbranded when introduced into and while in interstate commerce within the meaning of said Act, 21 U.S.O. as follows: 352 (a) in that its labeling, namely, the mailing piece identified "498T718 October 1965," contains statements which represent and suggest that a pur- portedly well-controlled clinical investigation comparing patients treated with Peritrate SA with similar patients treated with a placebo beginning at a time closely following the onset of acute ayecardial infarction, proved that the fact that 22 percent more patients treated with Peritrate SA remained alive after two years than patients treated with a placebo was due to the action of the drug, which statements are false and misleading since they are contrary to fact; and in that said mailing piece also contains statements which represent and suggest that the referenced study by Lumb, 0. D., and Hardy, L. B., Circulation (Pt. II, Oardiovascular Survery) 27:717, 1963, supports the claim in said mailing piece that "from the first sign ~tnd throughout the course of coronary artery disease . . . Peritrate SA (pentaerytbritol tetranitrate) 80 mg Sustained Action . . . stimulates development of collateral circulation," which statements are false and misleading since they are contrary to fact. 352(f) (1) in that its labeling fails to bear adequate directions for use and it is not exempt from such requirement, since it is a prescription drug within the meaning of 21 U.S.C. 353(b) (1) (0), and a new drug subject to the provisions of 21 U.S.C. 355, and its labeling, namely, the package insert, is not the labeling authorized in an approved new drug application as required under the exempting regulation 21 CFR 1.106(b) (3) (ii), and the mailing piece identified "4981718 October 1965," which is labeling within the meaning of (21 CFR 1.105(1)), is not substantially the same as the labeling authorized in an approved new drug application, as required under the exempting regulation 21 CFR 1.106(b) (4) (i). 352(n) in that it is a prescription drug distributed and offered for sale in the State of New York, and the advertisement for the drug appearing in the Journal of the American Medical Arsoeiation from December 6, 1965 through January 3, 1966 and in the Journal of the American Medical Association for February 7, 1966, identified "PE-OP-527-40 December 1965," caused to be issued by the manufacturer, packer, or distributor of the drug, failed to include a true statement of information in brief summary relating to the effectiveness of said drug as required by regulations 21 CFR 1.105(e) in that the advertisement lacks fair balance in its presentation and does not fairly show the effectiveness of the drug in the conditions for which it is recommended or suggested in the advertisement since the advertisement represents (1) that a purportedly well- controlled clinical investigation, comparing patients treated with Peritrate SA with similar patients treated with a placebo beginning at a time closely follow- ing the onset of acute mycardial infarction, proved that the fact that 22 PAGENO="0297" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1441 percent more patients treated with Peritrate SA. remained alive after two years than patients treated with a placebo was due to the action of the drug, which representation is false and misleading since it is contrary to fact; and (2) that the referenced study by Lumb, 0. D., and Hardy, L. B., Circulation (Pt. II, Cardiovascular Surgery) 27:717, 1963, supports the claim that "Peritrate SA (pentaerythritol tetrenicrate) 80 mg. Sustained Action . . . stimulates develop- ment of collateral circulation," which representation is misleading in that the advertisement fails to reveal the material fact that the research involved the use of young pigs in a manner which in no way approximates the human disease situation. 5. That the aforesaid article is in the possession of Barry Division of Ketchum and Company, Inc., 60-80 Cooper Avenue, at Glendale, New York, or elsewhere within the jurisdiction of this Court. 6. That by reason of the foregoing, the aforesaid article is held illegally within the jurisdiction of this Court, and is liable to seizure and condemnation pursuant to the provisions of said Act, 21 U.S.C. 334. Wherefore, libellant prays that process in due form of law according to the course of this Court in cases of admiralty jurisdiction issue against the aforesaid article; that all persons having any interest therein be cited to appear herein and answer the aforesaid premises; that this Court decree the condemnation of the aforesaid article and grant libellant the costs of this proceeding against the claimant of the aforesaid article; that the aforesaid article be disposed of as this Court may direct pursuant to the provisions of said Act; and that libellant have such other and further relief as the case may require. Dated: Brooklyn, New York, February 28, 1966. JOSEPH P. HOEY, United States Attorney, Eastern District of New York, Practor for Libellant, 521 United States Court House, Brooklyn, New York. By CARL GOLDEN, Assistant United States Attorney. DEPARTMENT OF JusTICE, U.S. MARSHAL, EASTERN DISTRICT OF NEW YORK, Brooklyn, N.Y., March 2, 1966. NOTICE OF ATTACHMENT U.S. Marshal's No. 20166 U.S. Court No. 66~-M-163 Hon. JOsiepH P. HoEY, U.S. Attorney, Brooklyn, N.Y.: Notice is hereby given that on February 28, 1966, this office libeled the article of drug consisting of 68 bottles, more or less, of an article labeled in part: (btl.) "100 80 mg. Tablets Peritrate SA Sustained Action ( Pentaerythritol tetranitrate) Caution: Federal law prohibits dispensing without prescription. Warner-Chilcott Labs. Div., Morris Plains, N.J., etc. of which you are reputed to be the proctor. Process returnable in the U.S. District Court, 225 Washington Street, Brooklyn, New York, on the 23rd of March, 1966. Libeled by United States of America for breach of the provisions of 21 U.S.C. 301 et seq. Respectfully, GEORGE J. WARD, U.S. Marshal, E.D.N.Y. In the United States District Court for the District of New Jersey No. UNITED STATES OF AMERICA V. An article of drug consisting of 100 bottles, more or less, labeled in part: (btl.) capsules 14747 Serax (Oxerepam) * * * 10 mg. Caution: Federal law prohibits * * * See accompanying information. Usual Dosage: Use or two PAGENO="0298" 1442 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY capsules 3 or 4 times daily. Wyeth Laboratories, Inc. Philadelphia, Pa. * * *" Control No. 1660711 * * * (insert) "Serex (Oxerepam), Serex is 7-chloro4, 3-dihydro-3-hydroxy-5-phenyl-23-1, 4-benzediazepin-2-one. Wyeth Laboratories, Inc. Philadelphia, Pa., Cir. 2473, January 24, 1966 * * *" LIBEL OF INFORMATION To The Honorable Judge of the United States District Court for the District of New Jersey. Now comes the United States of America, by David N. Sats, United States Attorney for the District of New Jersey and shows to the Court: 1. That this libel is filed by the United States of America and prays seizure and condemnation of a certain article of drug, as hereinafter set forth, in accordance with the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.). 2. That there is at Secaucus, New Jersey, in possession of Wyeth Laboratories, Division of American Drug Products Corporation, 555 Secaucus Road (ware- house), or elsewhere within the jurisdiction of this court, an article of drug con- sisting of 150 bottles, more or less labeled in part: (bottle) "100 Capsules 13737 Serea * * * 10 mg. Caution: Federal law prohibits * * * see accompanying in- formation. Usual dosage: one or two capsules 3 or 4 times daily. Wyeth Labora- tories, Inc., Philadelphia, Pa. * * * 3. That the aforesaid article was misbranded when introduced into and while in interstate commerce, within the meaning of said Act, 21 `U.S.C. 352(a) in that it is a prescription drug within the meaning of 21 U.S.C. 353(b) (1) (C), it is distributed in the State of New Jersey, and the advertisement for the drug appearing in the April 25, 1956 issue of the Journal of the American Medical Assoc~cstion, in the March 1956 issue of American Journal of Psychiatry, and in the April 18, 1956 issue of Medical Economics, caused to be issued by the manu- facturer, packer, or distributor of the drug lacks fair balance in its; presenta- tion and does not fairly show the effectiveness of the drug in the conditions for which it is recommended in the advertisement, as required by regulations 21 CFR 1.105(e), in that: (A) The advertisement emphasizes use of Serex by elderly persons, and implies that Serex is quite s'afe for elderly persons through use of such statements as "Possesses extraordinary safety margin" and "stamia, drowsi- ness, dizziness rare," but fails to provide fair balance in that the advertise- ment does not emphasize the fact that Serox should be used cautiously in the elderly, particularly because of the possibility of serious hpotessive reactions in elderly persons. (B) The advertisement refers to a study by Chesrow, et al., as one in- volving "145 elderly patients," but fails to show that the patient group of 145 ranged in ages from 33 to 97 (men) and 33 to 8 (women). (C) The advertisement is false and misleading in that it quotes from the Ohestos, et al paper a dosage of the drug up to 40 mg. a day; while the ap- proved package labeling for limits the initial damage of the drug in older patients to 30 mg a day the advertisement thus misleadingly pro motes a dangerous use in the age group on which the promotion is based. (D) The advertisement promotes effectiveness of Serax by the closis "con- trols . . . anxiety-linked depression," which claim i.s not permitted in the approved package labeling; further, aiuco "depression" may vary between neuresis and psychosis (Serax being contraindicated in psychotic patients), the claim is dangerous. (E) The advertisement lacks "fair balance" since it selects one paper to emphasize favorable aspects of Serex therapy, in relation to a competitive product, while failing to mention other studies which present different views; and the advertisement falsely implies that the Chesrow et al paper represents the medical consensus as to the performance of Serex in comparison to chlordiozopozide. 4. That by reason of the foregoing, the aforesaid article is held illegally within the jurisdiction of this Court. and is liable to seizure and condemnation pursuant to the provisions of said Act, 21 U.S.C. 354. Wherefore, libellant prays that process is due form of law according to the course of this Court in cases of admirality jurisdiction issue against the aforesaid article; that all persons having any interest therein be cited to appear herein and answer the aforesaid premises; that this Court decree the condemnation of the PAGENO="0299" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1443 aforesaid article and grant libellant the cost of this proceeding against the claim- ant of the aforesaid article; that the aforesaid article be disposed of as this Court may direct pursuant to the provisions of said Act; and that libellant have such other and further relief as the case may require. UNITED STATES OF AMERICA By United States Attorney. United States District Court, Southern District of Ohio, Western Division Civil No. 6273 UNITED STATES OF AMERICA V. 14 Cases, More or Less, of an Arti~le Labeled in Part "24 Capsules * * * LINCOCIN" CONSENT DECREE On the 27th day of October, 1966, a Complaint in the form of a Libel of In- formation against the above-described article was filed in this Court on behalf of the United States of America by the United States Attorney for this Dis- trict. The Complaint alleges that the article, namely 14 cases of Lincocin cap- sules, proceeded against is a prescription drug which was shipped in interstate commerce and is in violation of the Federal Food, Drug and Cosmetic Act (21 U.S.C. 352(n)) because of an advertisement which it was claimed failed to com- ply with 21 CFR 1.105(E) and 21 CFR 1.105(G). Pursuant to monition issued by this Court, the United States Marshall for this District seized said article on the 27th day of October, 1966. Thereafter, The Upjohn Company, of Kalamazoo, Michigan, intervened and filed claim to said article. Now, without admitting the allegations of the Complaint, Claimant, hav- ing discontinued the advertisement, consents that a decree, as hereinafter pro- vided, be entered. It is therefore ordered, adjudged and decreed that, based on the consent of the Claimant which does not admit the allegations of the Complaint, the said article, namely 14 cases, more or less, labeled "24 Capsules * * * LINCOCIN" under seizure, is in violation of the Federal Food, Drug and Cosmetic Act (21 U.S.C. 352(n)) and it is hereby condemned pursuant to 21 U.S.C. 334(a); And it is further ordered, adjudged and decreed that the United States Marshal shall deliver the said condemned article in equal amounts as follows: (a) to the Belivue Hospital Center, First Avenue and 27th St. New York City (A. Wyman) 7 cases of Lineocin for its use; (b) to the Los Angeles County General Hospital, 1200 N. State Street, Los Angeles, California (A. Witherill) 7 cases of Lincocin for its use. And it is further ordered, adjudged and decreed that Claimant shall pay Court costs of $-~-, and Marshal's fees of $-. Dated this 6th day of December, 1966. TIMOTHY S. HOGAN, United States District Judge. We hereby consent to the entry of the foregoing decree. DIN~MORE, SHOHL, BARRETT, COATES & DETJPREE, By THOMAS S. CALDER, Attorneys for Claimant, The Upjohn Company. UNITED STATES ATTORNEY, By THOMAS R. SMITH, Assistant United States Attorney. PAGENO="0300" 1444 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY United States District `Court, Southern District of Ohio, Western Division Civil No. 6273 UNITED STATES Or' AMERICA V 14 cases more or less of an article labeled in part 24 capsules ~` ~` * Lincocin CLAIM OF OWNER The Upjohn Company, a corporation duly organized and `existing under the laws of the State of Delaware with its principal place of business in Kalamazoo Michigan appears before this Court intervening in this proceeding for the interest of itself as owner of the articles above described, and makes claim to the said articles which have been attached by the Lnited States Marshal for this District under process of this Court at the instance of the United States of America, libelant; And said claimant avers that it is the true and bona fide owner of `the said articles and that no other person is the owner thereof; wherefore `it prays to defend accordingly. THE UPJOHN OOMPANY, `By `GERARD THOMAS, Vice President. AFFIDAVIT STATE OF MICHIGAN County of' Kalamazoo 88 Gerard Thomas being duly sworn deposes and says that he is the Vice Presi dent of The Upjohn Company the corporation which is described herein and which executed the foregoing claim that he has authority to act on behalf of the corporation in this matter and that he signed said claim pursuant to said authority that he has read said claim and knows the contents thereof and that the same is true to the best of his knowledge information and belief GERARD THOMAS Vice President Subscribed and sworn to before me this 2nd day of December 1966 HOWARD D KALLEWARD Notary Public My commission expires December 8 1967 PROOF OF SERVICE A copy of the attached Claim of Owner and Affidavit of Gerard Thomas wis de]ivered to the Office of Thomas R Smith Assistant United States Attorney this 6th day of December 1966. THOMAS S CALDER lion. ROBERT M. DIw?ER, U.s. Attorney', Cincinnati, Ohio. DEAR SIR: There is at Cincinnati, in possession of The Upjohn Company, 4910 Para Drive (warehouse), an article o'f drug consisting of 14 cases, more or less, each containing 48 24-capsule bottle's of an' article labeled in part: (btl.) "24 capsules * * * Lincocin (lincomycin hydrochloride monhydrate) equiv. to 500 mg. lincom.ycin. * * * Caution: Federal Law * * * Usual Adult Dosage: 500 mg. three or four times daily * * * Lot No. WG969E6 * * * Expires May 1, 1969, * * * The Upjohn Co., Kalamazoo, Michigan." which were shipped, on or about October 4, 1966, by The Upjohn Company, 9171 Portage Road, Kalamazoo, Michigan., via Holland Motor Express. No analysis has been made. It is assumed that the article contains the ingredi- ents declared on its label and labeling. The aforesaid article was misbranded when introduced into and while in inter- state commerce, within the meaning of the Federal, Food, Drug, and Cosmetic, 21 U.S.C. 352(n) in that it is a prescription drug which is subject to' certification and is distributed and offered for sale in the State of Ohio, and the advertis~- ment for the drug appearing in the Journal of the American Medical Association for October 3, 1966; identified "C 1966 by The Upjohn Company J66-6375-2" PAGENO="0301" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1445 caused to be issued by the manufacturer, packer, or distributor of the drug, failed to include (A) a true statement of information in brief summary relating to the effec- tiveness of said drug as required by regulation 21 CFR 1.105(e) in that the advertisement lacks fair balance in its presentation and does not fairly show the effectiveness of the drug in the conditions for which it is recommended or sug- gested in the advertisement since the advertisement represents, (1) That therapy may be initiated parentally and then followed through orally without switching to another antibiotic but fails at this point to refer to the sensitivity study requirement contained in the labeling accepted under the certification requirements for the drug that " . . . in vitro sensitivity studies should be performed before Lincocin is utilized as sole antibiotic therapy ;" (2) That reactions are rare, even for patients sensitive to penicillin- does not share antigenicity with the penicillin group of compounds, "which representation is misleading, and fails at this point to refer to the "adverse experience" information contained in the labeling accepted under the certifi- cation requirements for the drug that "A few cases of hypersensitivity reac- tions such as angioneurotic edema, serum sickness and anaphylaxis have been reported;" (3) That there are "no serious renal or neurologic abnormalities, no ototoxicity" and "no tooth discoloration to date" which representations are misleading in that the audience for whom the advertisement is intended is not advised at this point or with equal prominence or in reasonably close association with this information the facts that hematologic toxicity, mani- fested by neutropenia or leukopenia can occur and that the frequency of severe diarrhea is a unique feature of Lincocin therapy. (B) a true statement of information in brief summary concerning those side effects and contraindications that are pertinent with respect to the uses recom- mended or suggested in the advertisement and any other use or uses for which the dosage form advertised is commonly prescribed as required by regulation 21 OFR 1.105(g) in that the advertisement failed to include the following infor- mation from the labeling covered by the certification, or the applicable certifica- tion regulations (21 CPR 148.3 and 148X): (1) The precautionary information that "With B-hemolytie streptococcal infections, treatment should continue for at least 10 days to diminish the likelihood of subsequent rheumatic fever or glomerulonephritis (2) The side effect information which specifies the serious nature of the cases of hypersensitivity reactions, i.e. ,..."Angionet~rotic edema, serum sickness and anaphylaxis" and fails to identify the usual agents which should be available for emergency treatment, i.e., "antihistamines, pressor amines, corticosteroids ;" (3) The precautionary information that ". . . in vitro sensitivity studies should be performed before Lincocin is utilized as sole antibiotic therapy." (4) The statement "Other adverse reactions observed in a small propor- tion of patients . . ." appearing in the labeling is not included and is mis- leadingly changed in the advertisement to read "Side effects of small pro- portion . . ." The aforesaid article misbranded when introduced into and while in inter- state commerce, is subject to seizure and condemnation under 21 U.S.C. 334. Immediate seizure is requested. Please advise the action taken. Very truly yours, WILLIAM W. Goomucir, Assista~tt General Counsel, Food and Drug Division. PAGENO="0302" 1446 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY In the United States District Court for the Eastern District of Pennsylvania No. UNITED STATES ~F AMERICA, PLAINTIFF V. An article of drug consisting of 45 individually cartoned bottles, more or less, labeled in part: (bottle and ctn.) "Lasix 40 Mg. Furosernide 100 Tablets Caution: Federal law prohibits * * * Directions: * * * 1 or 2 tabs. see insert * * * Hoechst Pharmaceuticals, Inc. 11 oimerly Lloyd Bros Inc Cincinnati Ohio 45229 * * Control 60037GB (insert) "Lasix Brand of furosemide * * * Original Printing June 3, 1966" DEFENDANT COMPlAINT FOR FOR~EIIURE To The Honorable Judge of the United States District Court For The Eastern Districtof Pennsylvania. * Now comes the United States of America, by Drew J. T. O'Keefe, United States Attorney for the Eastern District of Pennsylvania and shows to the court: 1. That this complaint is filed by the United States of America and prays * seizure and condemnation of a certain article of drug, as hereinafter set forth, in accordance with the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.). 2. That there is at Philadelphia, Pennsylvania, in possession of Drug House, Inc., 1011 West Butler Street, or elsewhere within the jurisdiction of this Court, an article of drug consisting of 45 individually cartoned bottles, more or less, labeled in part: (bottle and carton) "Lasix 40 Mg. Furosemide 100 Tablets Caution : Federal law prohibits * * * Directions: * * * 1 or 2 tabs. See insert * * * Hoechst Pharmaceuticals, Inc. Formerly Lloyd Bros., Inc. Cincinnati, Ohio 45229 * * * Control 600376B" (Insert) "Lasix Brand of furosemide * * * Original Printing June 3, 1966" which* were shipped, on or about November 3, 1966, by Hoechst Pharmaceuticals, Inc., Cincinnati,. Ohio, via unknown carrier. 3. That the aforesaid article was misbranded when introduced into and while in interstate commerce, within the meaning of 21 U.S.C. 352(n) in that it is a prescription drug distributed and offered for sale in the State of Pennsylvania and the advertisements for the drug appearing in the Journal of the American Medical Association fOr October 10, 1966, Medical World News of October 21, 1966, Medical Economics of October 31 1966 and MD Medical News Magazine of November 1966, caused to be issued by the manufacturer, packer, or distributor of the drug, fail to include a true statement of information in brief summary relating to the effectiveness and contramndictions of said drug as required by regulations 21 CFR 105 as follows: (A) the advertisements lack fair balance in their presentations on effectiveness and contraindications, and do not fairly show the effectiveness of the drug in the conditions for which it is recommended or suggested in the advertisements, as required by regulations 21 CFR 105(e) since the advertisements represent, (1) That when the drug was compared with bydrochlorOthiazide substan- tial increases in water and sodium excretion were shown in the case of furosemide (by reference to a paper by Dr. H. Kleinfolder, published in German M. Month. (8 :459, 1963) but fail to reveal that the studies were conducted with only eight patients, and that the overlap of the standard errors of the means derived from the data is so great thkat the data do not permit their unspecified repetition in the advertisements and the implied extrapolation to experience to be expected in the general population; (2) That a paper by R. J. Timmermafl, M.D. published in Curr. Therap. Rea. 6:88, 1964, pertains to the time of onset and length of action of the drug in edematous patients but misleadingly fail to reveal that the studies reported by the paper were not conducted on edematous patients; PAGENO="0303" COM1~ETITIVE PROBLEMS IN THE DRUG INDUSTRY 1447 (3) That two references, namely, a paper by L. B. Berman, M.D. et al., published in Proc. S'oc. Exp. `Biol. Med. 118: 333, 1965, and a paper by L. Bencomo, M.D. et al., published in Cur. Therap. lIes. 7: 339, 1965, pertain to use of the drug when other diuretic regimens have failed when in fact the papers do not show that the patients in the studies were refractory to other diuretic therapy; (4) That two references, namely a paper by D. E. Hutcheon, M.D. et al., published in Arch. mt. Med. 115: 542, 1965, and a~ paper by H. Kletnfelder, M.D. published in German M. Month. 8: 459, 1963, support the claim that natriuresis with furosemide far exceeds that of the thiazides and that there is no parallel increase in kaliuresis, but misleadingly fail to reveal that the papers also show that the 24-hour urinary potassium excretion is essentially no different with furosemide than with thiazide in most patients, and that potassium depletion and hypokakiemia do occur with furoseniide; (5) That there is a "highly favorable urinary Na/K ratio" and "greatly enhanced Na, proportionately low increase in K excretion" : but fail to present in fair balance (a) that there is almost always a marked increase in urinary potassium when furosemide is given as compared to potassium excretion with no diuretic, (b) that the 24-hour urinary potassium excretion is usually the same or greater with furosemide as compared with thiazide or mercurial diuretics, and (c) that notwithstanding the quoted claims, hypokalemia may develop during the use of furosemide; (6) That data in graphic form obtained from two papers, namely, by R. r. Timmerman, M.D. published in Curr. Therap. lIes. 6: 88, 1964 and by H. Kleinfelder, M.D. published in German M. Month. 8: 459, 1963, accurately reflect general experience concerning effectiveness of the drug but fail to reveal that the data are from studies conducted on only 15 patients in the former and four patients in the latter study; (7) That furosemide is a "non-thiazide diuretic" but misleadingly fail to present at this point in fair balance that furosemide shares many impor- tant corrtraindications, warnings and side effects with the thiazides and in this important sense the two classes of compounds ar quite similar; and (8) In the advertisements in Medical Worki News of' October 21, 1966, Medical Economics of October 31, 1966, and MD Medical News Magazine of November 1966, it is claimed that, "When the effects of Lasix (furosemide) and hydrochiorothiezide were compared over a 24-hour period, fluid output produced by Lasix (furosemide) was 200% greater, and sodium excretion was 167% greater," which claim is not a true statement in that the data in the paper by H. Kleinfelder, M.D. German M. Month, 8:459, 1963, show that the correct percentages are 105% and 67%, respectively; and (B) Each of the aforesaid advertisements suggest, contrary to the require- ments of regulation 21 CFR 1.105(f) (1), dses for the drug that are not in the labeling accepted in the approved new drug `application for the drug since the advertisements represent that the drug is for use in a variety of condi- tions "from the easy to control to the severe and thiazide refractory edemas . . and "Throughout the spectrum, from the mild to the most severe and refractory edema," which representations exceed the indications for use as specified in the labeling accepted in the approved new drug application. 4. That by reason of the foregoing, the aforesaid article is held illegally within the jurisdiction of this Court, and is liable to seizure and condemnation pursuant to the provisions of said Act, 21 U.S.C. 334. Wherefore, plaintiff prays that process in due form of law according to the course of this Court in cases of actions in rein issue `against the aforesaid article; that all persons having any interest therein be cited to appear herein and answer the aforesaid premises; that this Court decree the condemnation of the aforesaid article and grant plaintiff the costs of this proceeding `against the claimant of the aforesaid article; that the aforesaid article be disposed of as this Court may direct pursuant to the provisions of said Act; and that plaintiff have such other and further relief as the case may require. UNITED STATES OF AMEMCA, DREw J. T. O'KEInrE, United States Attorney. Assistant United States Attorney. PAGENO="0304" 1448 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY In the United States District Court for the Eastern District of Pennsylvania No 56 of 1966 UNITED STATES OF~ AMERICA, PLAINTIFF V. An article of drug consisting of 45 individually cartoned bottles more or less labeled in part: (btl. and ctn.) "Lasix 40 mg. Furosemide 100 Tablets Caution: Federal law prohibits * * * Directions: * * * 1 or 2 tabs. see insert * * * Hoechst Pharmaceuticals, Inc. Formerly Lloyd Bros., Inc. ~ii~cinnati, Ohio 45229 * * * Control 600376 B" (insert) "Lasiz Brand of furosemide * * * Original Printing June 3, 1966" DEFINDENI DECREE OF CONDEMNAIION And now to with this 5th day of April 1967 on motion of DREW J ni 0 KFEFE United States Attorney for the Eastern District ot Pennsylvania it appearing to the Court that upon the Complaint for Forfeiture filed in the within cause on November 21, 1966, a warrant of attachment duly issued and was served; that proclamations were duly made in accoidance with law and no one havin~ filed an Answer to the Complaint or filed a Claim to the property mentioned in said Complaint and attached by the Marshall it is ordered adjudged and decreed 1. That said property, to wit: An article of drug consisting of 45 individually cartoned bottles, more or less, labeled in part: (btl. and ctn.) "Lasix 40 mg. Furosemide 100 Tablets Caution Federal law prohibits `~ * * is misbranded 2 That said property be and the i~ame is hereby condemned and forfeited to the United States for the cause set forth in said Complaint and It is further ordered adjudged and decreed that the United States Marshall deliver said condemned article to Jefferson Medical College Hospital, Department of Pharmacy, Phila- delphia Pennsylvania for use by them solely pursuant to the package mnseiL and not for resale. By the Court: (s) RALPH C. BODY. In the U S District Court for the Northern District of Illinois No. L7C686 United States of America Plaintiff V. An article of drug consisting of 34 cartons more or less each containing 4 plastic boxes each box contains 6 ampules labeled in part (carton) 4 Boxes 6 Ampules Each of 2 cc Warning Not for Injection Indokion Flurothyl (bis) 2,2,2~trifiuoroethy1 ether *** Distributed by Ohio Chemical Ohio Chemical and Surgical Equipment Company (A Division of Air Reduction Company, Inc.) Madison 10, Wis. * * * Control No. 7155" PAGENO="0305" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1449 (plastic box) "6 Ampules, 2 cc Each Warning: Not for Injection Indoklon *** Distributed by Ohio Chemical Ohio Chemical and Surgical Equipment Company Madison 10, Wis. * * * Control No. 7155" (Insert in plastic box) "Indokion Fluorothyl *** A convulsant agent for psychiatric use * * * (Ampule): "2 cc Ampule Indoklon Flurothyl For Inhalation Only Caution: * * * Warning: * * * Ohio Chemical Madison, Wisconsin Control Ne. 7155", Defendant COMPLAINT FOB FORFEITURE The United States of America, by Edward V. Ilanrahan, United States Attor- ney for the Northern District of Illinois, shows to the COurt: 1. This complaint is filed by the United States of America and prays seizure and condemnation of a certain article of drug, as hereinafter set forth, in ac- cordance with the Federal Food, Drug, and Cosmetic Act, (21 U.S.C. 301-392). 2. There is at Chicago, Illinois, in possession of The Ohio Chemical and Surgical Equipment Company Branch Warehouse, 3100 South Homan Street, or elsewhere within the jurisdiction of this Court, an article of drug consisting of 34 cartons, more or less, each containing 4 plastic boxes, each box contains 6 ampules, labeled in part: (carton) 4 Boxes, 6 Ampules Each of 2 cc., Warning: Not For Injection, Indoklon, Flurothyl, (bis) 2,2,2-trifluoroethyl ether, * * ~`, Distributed by Ohio Chemical, Ohio Chemical and Surgical Equipment Company (A Division of Air Reduction Company, Inc.) Madison 10, Wis. * * *, Control No. 7155 (plastic box) 6 Ampules, 2 cc each, Warning: Not For Injection, Indoklon, * * *, Dis- tributed by Ohio Chemical, Ohio Chemical and Surgical Equipment Com- pany * * *, Madison 10, Wis. * * *, Control No. 7155 (Insert in plastic box) Indoklon, Flurothyl, * * ~`, A convulsant agent for psychiatric use * * * (Ampule) 2 cc Ampule, Indoklon, Flurothyl, For Inhilation Only, Caution: * * *, Warning: * * *, Madison, Wisconsin, Control No. 7155 which were shipped, on or about February 20, 1967, by The Ohio Chemical and Surgical Equipment Company, Cleveland, Ohio, via the company's own truck. 3. The aforesaid article was misbranded when introduced into, while in, and while held for sale after shipment in interstate commerce, within the meaning 81-280---68--pt. 4-20 PAGENO="0306" 1450 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY of said Act, 21 U.S.C. 352(a), in that it is a prescription drug offered and dis- tributed for sale in the State of Illinois, and the advertisements for said drug appearing in the February, 1967, and April, 1967, issues of the American Journal of Psychiatry and in the February, 1967, issue of the journal, Diseases of the Nervous System, reading in part: When convulsive therapy is indicated * * * Indokion * * * Eliminates patient fear and anxiety of electroshock, Indoklon pharmacoconvulsive Therapy is safe and dependable * * * failed to include a true statement of information relating to the side effects and contraindications of said drug as required by the regulations, 21 C.F.R. 1.105, since said advertisements failed to include any information relating to said side effects `and contraindications. 4. By reason of the foregoing, the aforesaid article is held illegally within the jurisdiction of this Court, and is liable to seizure and condemnation tursu- ant to the provisions of said Act, 21 U.S.C. 334. Wherefore, plaintiff prays that process in due form of law according to the course of this Court in cases of actions in rem~ issue against the aforesaid article; that all persons having any interest therein be cited to appear herein and answer the aforesaid premises; that this Court decree the condemnation of the aforesaid article and grant plaintiff the costs of this proceeding against the claimant of the aforesaid article; that the aforesaid article be disposesd of as this Court may direct pursuant to the provisions of said Act; and that plain- tiff have such other and further relief as the case may require. Dated ~ 1967. EDWARD V. HANRAHAN, U.S. Attorney. STATE OF ILLINoIs County of Cook, ss: AFFIDAVIT Roger J. Balla, Assistant United States Attorney, being first duly sworn on oath, deposes and says that he has been appointed by Edward V. Hanrahan, United States Attorney for the Northern District of Illinois, to represent the United States of America in the instant cause; and that he has read the above complaint, `and the complaint is true in substance and fact. ROGER J. BALLA, Assistant U.S. Attorney. Subscribed and sworn to before me this day of April, 1967. Notary Public. LAKESIDE LABOItATORIR5, DIVISION OF COLGATE-PALMOLIVE `CO., Milwaukee, Wis., November 1967. DEAR DocToR: The Food and Drug Administration have requested that we call you'r attention to the monograph for No'rpramin (desipramine hydrochloride) in the 1967 PDR: page 687, white section. The FDA `consider this monograph incorn- `plete (in relation to the official la~beling, the package insert), and therefore poten- tially misleading as prescribing information to allow `safe and effective use of the `drug. `To provide you `with the necessary adequate reference, we enclose a revised monograph for 1967 Physicians' Desk Reference in which the `changes have leen emphasized `by italics. Please insert this revision opposite page 687. Sincerely yours, WILLIAM 0. JANSSEN, M.D. THE S. E. MASSENGILL Co., Bristol, Tenn., November 1, 1967. DEAR DOCTOR: The Food and Drug Administration has requested that we call your attention to the monographs for our products, Predsem, Salcort and Salcort- Delta, in the current (1967) Physicians' Desk Reference. The FDA considers these monographs to `be incomplete in presenting the necessary information for the safe and effective use of these drugs and thheref ore potentially misleading. PAGENO="0307" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1451 To provide you with the necessary information, we enclose revised mono- graphs for insertion at page 812 of your current (1967) PDR. The nature and extent of the additions and other revisions in the enclosed monographs are emphasized by use of italics. Sincerely, ROBERT P. EWING, TTioe President, Marketing. OBGANON INC., West Orange, N.J., Qctober 27, 1967. DEAR DOCTOR: The Food and Drug Administration has requested that we call your attention to the monographs for Cortrophin ® Gel, Uortrophin © Zinc, Ileaadrol © Phosphate Injection and Heceadrol © Tablets and Elixir in the current Physicians Desk Reference. The FDA considers these monographs to be incomplete in presenting necessary information for the safe and effective use of these drugs, and, therefore, potentially misleading. To provide you with the necessary information, we enclose revised monographs for insertion in your PDR. The nature and extent of the additions and other revisions in the enclosed monographs are emphasized by use of italics. Sincerely yours, JosEP1~I D. CuoNo, M.D., Director, Professional $ervicea. E. R. SQUIBB & SONS INC., New York, N.Y., October 24, 1967. DEAR DOCTOR: The Food and Drug Administration has asked us to call your attention to certain advertisements for Mysteclin ®-P products which the FDA regards as misleading. The main theme of the advertising, which we have stopped, suggests that "almost every candidate for broad-spectrum antibiotic therapy, is a candidate for Mysteclin-F." We wish to emphasize that those patients selected for tetracycline therapy who are know to be particularly susceptible to candidal superinfection are the potential candidates for Mysteclin-F therapy. The FDA points out that recent journal advertisements for these products suggested that candidal superinfection is a serious problem with the use of ampicillin. This was not supported by the reference used in the ads. Although the reference cited included the statement that eandidal overgrowth may follow ampicillin therapy, the FDA has asked that we point out that the significance of this overgrowth has not been established. Further, the same ads omitted important warning information relating to precautions and side effects. The nature and extent of the omission are capitalized in the enclosed "Brief Summary". Sincerely, SQUIBB. ENDO LABORATORIES INC., Garden City, N.Y., October 14, 1967. DEAR DOCTOR: Undoubtedly you are aware of the unfortunate widespread confusion which surrounds the recall which we are presently conducting of cer- tain specific packaging lots of our Coumadin Tablets 2 mg., 21/2 mg., and 5 mg. We enclose: 1. A copy of a public statement issued yesterday, October 13, 1967, by James L. Goddard, M.D., Commissioner of Food and Drugs. 2. A copy of a letter whjch is today being sent to every hospital pharmacy, retail pharmacy and drug wholesaler throughout the country. We, of course, also regret that this confusion has arisen, and we feel that the attached letters will reassure you and your patients concerning Coumadin. Very truly yours, LEONAIID S. BEAHEN, M.D., Medical Director. Oorommn 13, 1967. From: James L. Goddard, M.D., Commissioner of Food and Drugs. There has been widespread confusion among heart patients, their physicians, and the public generally, since it was reported yesterday that approximately PAGENO="0308" 1452 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 30 million tablets of Coumadlin, a brand of the anticoagulant sodium warfarin, are being recalled from the market. I would like to explain as clearly as I can what the facts of the situation are. The recall was requested by `the Food and Drug Administration because assays of `samples showed that some tablets were above or below required potency Ievels-but the variations found do not pose an imminent danger to' the health of the user. It could be more hazardous to abruptly halt use of the medication. The safest course the patient can follow is to continue the medication his doctor prescribed. The recall cove'rs 16 packaging lots of Coumadin tablets in three dosages. For the information of physicians, 2 mg. and 2.5 mg. Ooumadin tablets being recalled were slightly below allowable potency levels. Only the 5 mg. tablets were found to be above the allowable potency limits, ranging in strength from 5.49 to 5.56 mg. Excessive potency is likely to be more hazardous than subpotency with this particular drug, but the variatiousi found in this case do not represent an imme- diate hazard to patients fo'r whom the drug has been prescribed. However, the manufacturer, Endo Laboratories, agreed that the' table'ts should be withdrawn from the market since they do not meet potency standards of the U.S. Pharmac'opeia. Pharmacists will be notified of the lots to be returned. The recall involves only a small part of the supply of this drug on the market. ENDO LABORATORIES INC., Garden City, N.Y., October 14, 1967. IMPORTANT-DRUG RECALL Re Coumadin (sodium warfarin). We are recalling from the market certain specific lots of Coumadin Tablets 2 mg., 21/2 mg. and 5 mg., because recent re-assays have shown these lots to be above or below the allowable limits of label strength as follows: Product Packaging lot No. Package size Coumadin, 2 mg Do 5020 7C0140 ~ottIes of 100 and 1,000. Bottles of 100. Do 7C0141 Do. Do 7C0142 Bottles of 1,000. Whereas the allowable lower limit of 2 mg. Coumadin Tablets is 1.90 mg., the above lots range from 1.68 mg. to 1.86 mg. per tablet. Product Packaging lot No. Package size Coumadin, 23i mg Do 5171 6129 Bottles of 25, 100, and 1,000. Do. Do 7B0105 Bottles of 100. Do 7C0156 Do. Do 7C0157 Bottles of 25. Do Do 7C0158 7D0236 Bottles of 1,000. Bottles of 100. Do 7F0235 Do. Whereas the allowable lnwer limit of 21/2 mg. Coumadin Tablets is 2.375 mg., the above lots range from 2.29 mg. to 2.32 mg. per tablet. Product Packaging lot no. Package size Coumadin, 5 mg Do 5191 6152 Bottles of 100. Do. Do 7E0118 Do. Do 7E0322 Do. PAGENO="0309" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1453 Whereas the allowable upper limit of 5 mg. Ooumadin Tablets is 5.25 mg., the above lots range from 5.49 mg, to 5.56 nig. per tablet. Only the above packaging lots are involved. Please return only these lots of Coumadin immediately as follows: 1. Fill out and enclose the packing s1ip with the merchandise. 2. Use the enclosed postage paid address label on the package. No stamps required. Do not insure. We will immediately replace the merchandise returned. This recall is being made with the knowledge of the Food and Drug Adminis- tration. We appreciate your assistance. Sincerely yours, END0 LABORATORIES INC. ASTRA PHARMACEUTICAL PRoDUCTs, INC., Worcester, Mass., Augnst 23, 1967. DEAR DOCTOR: The Food and Drug Administration has asked us to call to your attention two of our recent mailing pieces for Citanest® which the FDA regards as so substantially misleading and lacking in adequate professional use information that in its viOw they represent potential hazards to health. These mailing pieces, identified as 118-67 and 119-67, should be discarded if still in your possession. 1. Intravenous Regional Anesthe9ia Mailing piece 118-67 recommended the use of Citanest in intravenous regional anesthesia. The FDA regards use of this drug by that technique as experimental. The package insert for Citanest contains no information for its use in intra- venous regional anesthesia and the drug has not been approved for used in that procedure. 2. Macviumum single Dosage Mailing pieces 118-67 and 119-67 contained statements which implied that dosages of Citanest in excess of the maximum single dose (600 mg.) could be employed in clinical use. ~o such implication was intended by Astra, and Astra reaffirms that no more than 600 mg. of the drug should ~e used during any two-hour period. 3. Professional Use Information Both booklets omitted essential and required professional use information~ The attached page contains the warning, precautionary, and adverse reaction information which was omitted from the "full disclosure" sections of the booklets. The safety and effectiveness of Citanest (prilocaine), when used in accordance with the conditions specified in the enclosed package insert, are not in question. Sincerely yours, ASTRA PHARMACEUTICAL PRODUCTS, INC. NEISLER LABORATORIES, INC., SUBSIDIARY OF UNION CARBIDE Cone., New York, N.Y., August 11, 1967. DEAR DOCTOR: The Food and Drug Administration has asked us to call your attention to a recent advertisement for Diutensen-R which the FDA regards as misleading. The Food and Drug Administration regards the warning information in the ad to be so substantially deficient that the ad represents a potential danger to health. Therefore, we have rewritten our "Brief Summary", and the nature and extent of the changes are shown in capital letters in the attached revision. We have discontinued the ad in question and all future ads will carry the new "Brief Summary". The safety and efficacy of Diutensen-R are not in question when used in accordance with the prescribing information in the official package insert. Sincerely, NEISLER LABORATORIES. PAGENO="0310" 1454 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY SMITH KLINE & FRENCH LABORATORIES, Philadelphia, Pa., ,Tidy 1967. DEAR DocToR: Smith Kline & Ftench has recently received reports of auditory and visual hallucinations and of disorientation and confusion which occurred in patients during the administration of "V'ontro'l" (brand of diphenido'l), our drug for control `of vertigo, and nausea and vomiting. Approximately twenty such cases have been reported. In most of these, the reaction occurred within two days after the start of "Vontrol" in the recom- mended dosage and subsided spontaneously, usually within 24-48 hours' after the drug was stopped. Although most of these patients had been receiving other drugs, "Vontrol" is believed to be the causative agent. We have not been able to establish a correlation between the reaction and any concomitant therapy nor have we been able to relate the reaction to sex or any specific age group. Because it is impossible at this time to identify the individual patient in who'ni this reaction might occur, and because there is no specific treatment for this reaction `other `than allowing it to run its course (usually 24-48 hours' after stop~ ping `the drug), `the benefit to be derived from the use of `this drug must be weighed against `the risk `of this serious and potentially dangerous reaction. In view of the above, the use of "V~ntrol" (brand of diphenido'l) should `be limited to hospitalized patients or to patients under comparable continuous close professional supervision. We shall continue to `study the cause and the frequency' of this adverse effect. We have revised the package insert for "Vontrol" (brand of diphenidol) to in- dicate this limitation and to include a warning regarding this reaction. A copy of the revised package insert is enclosed bearing the limitation legend and warning as follows: Vontrol (brand of diphenidol) Use Limited to Hospitalized Patients or Patients Under Comparable Continuous. Close Professional Supervision Warning: Use limited to hospitalized patients or patients under comparable continuo'us' close professional supervision. Auditory and visual hallucinations, disorientation and confusion have been reported associated with the use of' "Vontrol". The frequency of this reaction is unknown. Thus far, the reaction has occurred within two days of starting the drug in recommended dosage and has subsided spontaneously usually within 24 to 48 hours' after discontinuation of the drug. Patients on `Vontrol' (brand of diphenidol) should be observed closely and in the event of such a reaction the drug should be stopped. We are continuing to report the available information to the Food and Drug Administration. If you should observe a similar reaction during treatment with "Voritrol" (brand of diphenidol) please send us full information con- cerning your case. Sincerely yours, MAURICE R. NANCE, M.D., Medical Director. FLINT LABORATORIES, DIVISION OF TRAVENOL LABORATORIES, INC., Morton. Grove, Ill., July 20, 1967. DEAR DOCTOR: The Food and Drug Administration has' asked us to call your attention to the initial advertisements for Choloxin® (sodium dextrothyroxine), currently appearing in several journals, which are regarded by the FDA as misleading. The headline, "A significant new advance in the management of bypercholes- terolemia", does not include the qualification that Choloxin is indicated for the treatment of hypercboleste'rolemia in selected patients, i.e., euthyroid patients with no known evidence of organic heart disease. Also, the ads fail to stress that Choloxin is not intended to replace or to lessen the desirability of considering dietary regulation in the management of hypercholesterolemia. The FDA points out that, while the ads emphasize that Oholoxin effectively lowers blood cholesterol levels, they fail to emphasize that this effect has not been proven to alter the morbidity and mortality of atherosclerotic disease. The claim in the ads that Choloxin (sodium dextrothyroxine) is "significant in its accepted physiologic mode of action" is considered to oversimplify the extent of knowledge of its mode of action. Further, the reference to "over G,000 patients PAGENO="0311" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1455 treated in clinical studies" overstates pertinent clinical experience, since only 2.967 patients were in the diagnostic categories for which the drug is cur- rently indicated. The FDA also considers the summary of warning information in the ads to be incomplete. The enclosed "Brief Summary" contains information in capital letters that was not present in the current ads, but will be incorporated into future ads for Choloxin. We are discontinuing the ads in question. The safety and efficacy of Choloxin are not in question when used in accordance with the official package circular, which remains unchanged. Sincerely, THOMAS A. GARRETT, Vice President, Medical Affairs. EATON LABORATORIES, Norwich, N.Y., July 10, 1967. Urgent: Drug Recall.-Furacin® Solution Aerosol, 1 oz., all lots. DEAR DocToR: There is a possibility that absorption of hexylene glycol, one of the components of the base used in Furacin Aerosol may cause coma if used in relatively large quantities on severely burned patients. We have discontinued sales of the product and are withdrawing all existing stocks of Furacin Aerosol from the market. Please destroy any of the Aerosol which you have in your possession. (Do not incinerate.) Prescriptions for the product will not be filled. This problem concerns only the base of the Aerosol formulation. No other Furacin formulation contains hexylene glycol. This notice does not involve any other Furaci'ii product. We have had two reports of possible reactions of this class involving the use of the Aerosol, both oc4~urring in infants with large area burns. Both children recovered upon cessation of therapy. In both cases, there is evidence to indicate that other causes may have been involved. We regret that this action is necessary. Your cooperation is sincerely appre- ciated. EATON LABORATORIES. MEAD-JOHNSON LABORATORIES, Evansville, md., June 30,1967. DEAR DOCToR: The Food and Drug Administrafion has requested that we call your attention to current medical journal advertisements for Oracon and Questran which the FDA regards as misleading. Oracon® The ad claims that the drug provides ". . . oral contraception with effects which closely parallel those of the natural hormonal cycle" and also contains a related slogan implying, such effects are "So Close to Nature." The FDA points out that not neary all effects of oral contraceptives parallel those of the natural hormonal cycle and that some of the effects of these drugs are of profound or undetermined nature. The ad emphasizes the low incidence of certain less serious side effects such as amenorrhea, breakthrough bleeding, weight gain, etc. However, it fails to give adequate emphasis to more serious known side effects-or adequate emphasis to the possible occurrence of thrombophlebitis, pulmonary embolism or cerebral vascular accident. The FDA points out that the pregnancy rates claimed in the ad were in- correctly based on 1065 women instead of only 880, and that the ad improperly features a pregnancy rate of 0.2 per 100 woman-years. While available data do not provide a reliable scientific basis for a statement of true pregnancy rates, experience reported to us shows that the unadjusted rate for all women who were given Oracon was 2.0 per 100 woman-years. The rate of 0.2 used in the ad included only those patients who insisted that they had adhered to the regimen. Questran® The FDA considers the summary of warning information in the journal adver- tisement for Questran to be inadequate in that it did not contain any informa- tion on precautions and warnings. We have attached a revised "Brief Sum- PAGENO="0312" 1456 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY mary," which contains the `omitted precautions and warning information in capital letters. We are discontinuing the ads in question, and future advertising will incorpo- rate the aboi~e corrections. The safety and effectiveness of Oracon and Questran are not in question when the drugs are used in accordance with the official package inserts. Sincerely P. A. WALTER, M.D., Director, Medical Research Deparmteñt. GEIGY PHARMACEUTICALS, DIVISION or GEIGY CHEMICAL Coup., Ardsley, N.Y., June 1, 1967. DEAR DOCTOR: The Food `and Drug Administration has asked us to call your `attention to recent journal advertisements for our products (Hygroton® and Regroton®) which the FDA considers to be misleading Hygroton advertisement This ad is headlined Do your patients shell out too much for a diuretic? It states that a published report on a new short acting diuretic supports the clam' that If one considers maximum recommended doses for each product tablet for tablet Hygroton was clearly superior Two tablets of Hygroton were found to produce almost 40% more natruresis and 20% more weight loss than five tablets of the other diuretic." The FDA points out that the studies were based on small numbers of patients (6 to 1~) that the actual differences repored were clinically insignificant and th'it the ad s claim for superiority was not supported by the data or by the authors' conclusions. Further, the report was not a direct comparative study of the two drugs but rather a comparison of data obtained on the new diuretic with data obtained on Hygroton in a previous study. In addition, the table-for-tablet comparison in the ad is not regarded a's sound because single tablets of Hygroton and the other diuretic do not contain coin- parable therapeutic dosages. Regroton advertisement This ad displays a single Re~roton tablet in relation to two sets of five tablets representing drug regimens for treating hypertension The ad states that in moderate hypertension Regroton was better than reserpine+hydralazine+ bydrochlorothiazide in 41 of 43 patients and better than reserpine~methyldopa+ hydrochlorotbiazide in 34 of 37 patients". These numbers, taken from a paper referenced in the ad, refer specifically to a comparison of average `mean blood pressures after two years on Regroton with responses to prior therapy utilizing the other drug combinations'. The FDA points out that the differences observed in the. blood pressure re- sponse to the various treatments were neither statistically nor clinically signifi- cant. Further, the study was not done on patients diagnosed as "moderate hypertension", and the authors did not state that .the effect of Regroton on the patients blood pressure was better The FDA also cons'iders the summary of prescribing information in each ad to be inadequate. Each enclosed "Brief Summary" contains information in capital letters th'it was not included in our current ads We are discontinuing the ads in question and future advertising will incorporate the revised "Brief Summary". The safety and effectiveness of the products are not in question when used in accordance with the official package inserts. GEIGY PHARMACEUTICALS. PFIZER LABORATORIES, DIVISION, CHAS. PFIZER & Co., Iuc., New York, N.Y., May 22, 1967. DEAR DOCTOR: The Food and Drug Administration has requcuted that we call your attention to recent promotional messages' for our products (Ro'ndo'mycin, Renese, and Renese-R) which the FDA regards as potentially misleading. PAGENO="0313" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1457 Renese' and Renese-R The monograph in the 1967 Physicians' Desk Reference for Renese and Renese-R is considered inadequate in presenting information necessary for their safe and effective use. To provide you with the necessary additional information, we are ei~cl'os'ing a revised monograph for insertion into your PDR. The changes include additional warnings and precautions concerned with electrolyte imbal- ance, bepatic coma, maintenance dosage, and, in the. case of Renese-R, the possi- bility of Parkinsonism and confusion. Roná'ornycia The FDA ha~ also asked us to call to your attention certain features of our current advertising for the broad spectrum antibiotic, Rondomycin. The ad does not disclose that it is a member of the bacteriostatic tetracycline family and that administration for ten days is especially important in the `treatment of Beta-hemolytic .stre~tococca1 infections. In referring to the "Protective dose (PD50) tests~" the ad did not specify that they were performed in mice utilizing laboratory strains of organisms injected intraperitoneally. While demonstrating the activity of Rondomycin against these test strains, the PD5, tests cannot be extrapolated directly to the clinical, situation, in which sens.itivity testing is recognized to be important for selection of the most appropriate antibiotic for a specific patient's infection. In addition, the "Brief Summary" of warning information in the above ad, and also in the current journal ad for Renese-R, is considered inadequate. We are modifying the advertisements in question and future advertising Will include the requested additional warning information. Sincerely yours, JOHN L. WATTERS, M.D., Medical Director. ABBOTT LAB0RAT0nIEs, North Chicago, Ill., April 13, 1967. DEAR DocToR: The Food and Drug Administration has asked us to call your attention to a recent advertisement on Enduron® (methyclothiazide) and En- duronyl® (methyclothiazide and deseripidine). The advertisement, headlined "Thiazide-potassium problems, doctor?" is regarded by the FDA as misleading. The ad state's that the advertised drugs provide "excellent sodium output with less potassium loss than either chiorothiazide `or hydro'ehlorothiazide." The consensus of expert medical opinion is that there is no significant dif- ference in the amount of potassium loss caused by tiiiazide agents, including methyclothiazide (Encluron'). The ad suggests that any physician taking a patient off a thiazide-potassium combination may wish to copsider Enduron as alterna~ive therapy. It states that the product will "do an outstanding job for you, withont routine potassium sup- plementation," and that it has "potassium-sparing characteristics." The FDA believes that these claim's could lead to the erroneous conclusion that hypo- kalemia is less likely to ocCur, and consequently, that potassium supplementation is less often necessary with. Enduron than with other thiazides. In point of fact, the need to consider proper potassium supplementation, dietary or otherwise, is no less with Enduron or End,iironyl than with any other thiazide drug. Because the ad's "brief summary" of warning information was considered inadequate, a new one is enclosed. The information capitalized in the attached revised "brief, summary" is not present in current ads, but will be incorporated into future ads for these' products. ABBOTT LABORATORIES. WALLACE PHARMACEUTICALS, DIVISION OF CARTER-WALLACE, INC., Cranbury, N.J., March 31, 1967. DEAR DOCTOR: At the request of the Food and Drug Administration, we are calling your attention to one of our recent advertisements captioned, "The pub- lished clinical studies indicate: 3 of ~ non-psychotic depressions respond to `Deprol'." T~he FDA considers that this advertising may hate been misleading. PAGENO="0314" 1458 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY In the advertisement, we listed 21 studies comprising the total published "Deprol" literature containing data on non-psychotic depressions. While the ad does not reflect the fact, data from these studies were e~ccluded in whole or in part if- (a) the diagnosis was not entirely clear; (b) the recommended maximum dose of 6 Deprol tablets per day was exceeded; (C) other psychotropic drugs or electroshock were part of therapy. Moderate, marked, excellent, and complete responses were counted as favor- able, while mild, fair, slight, and no responses were counted as pnfavorable. Using the above criteria, the final number of patients included was 323 selected from ten of the 21 listed studies. Nine of the ten studies were uncontrolled, and most patients in the ten studies concomitantly received informal or structured psychotherapy. The reported therapeutic results (ranging from 0% in a study with two non-psychotic depressed patients, through 64% in a study with 53 such patients, to 90% in two studies with 38 and 41 such patients respectively) also include, to an undetermined degree, placebo responses and spontaneous re- missions known to occur in the therapy of neurotic depression. The factors noted above represent problems that exist in working with any literature and are present in some "Miltown" advertisements carrying the theme "one of a series". In order to avoid any misunderstanding, we have dis- continued the use of these "Miltown" advertisements as well as the described "Deprol" advertisement. Sincerely, WALLACE PHARMACEUTICALS. DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, FOOD AND Dnua ADMINIsTRATIoN, Washington, D.C., March 15, 1967. IMPORTANT PRE5CRIBIN~ INFORMATION DEAR DOCTOR: The association of ulcerative stenotic lesions of the small bowel with the use of coated tablets of potassium chloride alone or combined with thiazide diuretics has been generally recognized by the medical community In March 1965 a warning paragraph was placed in the labeling of coated potas- sium chloride products, including those combined with thiazides, and of the thiazides themselves, pointing out this hazard. Since that time there has been a decline in the number of reported cases of this lesion. That the hazard still exists is shown by the 75 cases reported to have occurred since the warning was issued. Of these, 63 were associated with the combined thiazide-potassium chloride products, 6 with thiazide. where coated potassium chloride tablets were administered separately, and 6 with thiazide where it is not known if potassium chloride tablets were administered. Of the cases reported, o4 involved surgery, 51 of which were associated with the combination prepara- tions. Among these cases, 12 deaths were reported, but as yet a definite causal relationship to the medication has not been established. Current data provide neither a determination of the frequency of occurrence of the lesion, nor conclu- sive evidence of a dose-related effect. Animal studies do suggest that the Im- portant etiologic factor is a high concentration of potaissium chloride in contact with the mucosa. All the thiazide-potassiüm preparations are capable of causing the lesion in the monkey. In view of this, the Food and Drug Administration has directed the manufac- turers of thiazide-potassium chloride preparations to limit the indications for use in the package insert and other labeling to the following: (Trade Name-Generic Name) is indicated for Thiazide-Responsive Edema of Cardiac, Rental or Hepatic failure, chronic steroid administration, and for hypertension, but only where development of even a mild degree of 1-lypokalemia might have serious consequences. Note: (Trade Name-Generic Name) in the recommended dosage may not alone provide sufficient potassium to prevent hypokalemla in chronic Diuresis. (Trade Name-Generic Name) should never be used for the treatment of Hypokalemia. We have further directed that the package insert and other jabeling for potassium-thiazide preparations which also contain reserpine or rauwolfia be similarly revised. These preparations will be limited in their indications to the PAGENO="0315" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1459 treatment of hypertension where the development of mild hypokalemia might have ~erious consequences. The following preparations will be affected by these required labeling changes: Merck Sharp ~ Dohme HydroDIURIL-Ka (hydrochiorothiazide with potoasium chloride) ; Hydropres- Ka (hydrochlorothiazide reserpinc, potassium chloride). Eli Lilly ~ O'o. Anhydron K (cyclothiazide with potassium chloride); Anhydron KR (cyclo- thiazide with potassium chloride and reserpine). B. B. Squibb & Sons Naturetin i~ K (bendrofiumethiazide with potassium chloride) ; Rautrax (ran- wolfia serpentina whole root, fiumethiazide potassium chloride); Rautrax-N Modified (rauwolfia serpentina whole root, bendrofiumethiazide with potassium chloride); Rautrax-N (rauwolfia serpentina whole root, bendroflumethiazide with potassium chloride). Ciba Pharmaceutical Co. Esidrix-K (hydrochlorothiazide and potassium chloride). It should be noted that the labeling for all capsules or tablets which provide 100 mg. or more of potassium per dosage unit or in the case of liquid prepara- tions 20 mg. of potassium per milliliter are required to contain the warning concerning the occurrence of ulcerative~stenotic bowel lesions or directions for dissolving or diluting the preparation adequately to minimize the possibility of gastrointestinal injury. Potassium preparations with this potential hazard should be used only when adequate dietary supplementation is not practical. To assist us in further evaluation of this problem, the Food and Drug Adminis- tration would appreciate your reporting to us any cases of the small bowel lesion associated with the use of thiazide and potassium preparations either alone or in combination. Your cooperation will be greatly appreciated. Sincerely yours, HERBERT L. Lirx, Jr., M.D., Director, Bureau of Medicine. ROCHE LABORATORIE5, Divisiox or HOFFMANN-LA ROCHE, INC., Nutley, N.J., March 10, 1.967. DEAR Docron: At the request of the Food and Drug Administration, we are extending the "brief summary" of prescribing information for Librium® (chlor- diazepoxide 1101) which appears in medical journal advertisements by adding several phrases and items from the unchanged official package circular. The revised "brief summary" for medical journals is attached, indicating by capitalization the requested added material. Prescribing information in all Librium (chiordiazepoxide 1101) package circulars, direct mail information and brochures is complete and requires no change. The safety and effectiveness of the product are not in question. In addition, in future medical journal advertisements for Librium (chlor- diazepoxide 1101) in geriatric patients, we are amplifying statements which have appeared concerning possible side effects and initial dosage: The statement that "Side effects in most instances are mild in degree and readily reversible with reduction of dosage," will be extended by the observations made in our package circular which point out that drowsiness, ataxia and con- fusion have been reported in some patients, particularly the elderly and debili- tated, occasionally at lower dosage ranges, and that in a few instances syncope has been reported. Whereas in geriatrics, the usual daily dosage is 5 mg, two to four times daily, the initial dosage in elderly and debilitated patients should be limited to 10 mg or 1es's per day, adjusting as needed and tolerated. We hope the additional detail in medical journal advertising clarifies the use of the product in accordance with the enclosed package circular. Sincerely, ROBERT E. DIxoN, M.D., Director, Professional Services. PAGENO="0316" 1460 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY ORT1I0 PHARMACEUTICAL CORP., Raritan, N.J., February 1, 1967. DEAR DOCTOR: The Food and I)rug Administration has asked us to call your attention to the fact that a claim in our recent advertising of ORTHO-NOVUM SQ* may be misleading. In our introduction of this product to the medical profession we featured the theme, "The Most Effective Sequential", based on a comparison of pregnancy rates published in manufacturers' package inserts. The Food and I)rug Adminis- tration has pointed out that such a comparison is invalid because there has been neither a direct comparative study of the efficacy of the three sequential oral contraceptives in the same population nor individual studies of the three products in population groups shown to be comparable. We are therefore discontinuing the promotional theme in question. ORTHO PhARMACEUTICAL CORPORATION. CARNRICK LABORATORIES, DIVISION OF G. W. CARNRIcK, Co. f~ummit, N.J., January 10, 1967. IMPORTANT NOTICE DEAR DOCTOR: This is to bring to your attention a possible incorrect identifica- tion of sample tables mailed to you. During the latter part of December you were mailed an extra long (11 inch) envelope which contained an almost equally long product sample folder and the Carnrick Classified. This sample folder was actually three product samples in one, which could be detached from one another by simply separating at the perforated lines. The 3 product samples contained were Bontril Timed No. 1, 3-layer (yellow, white and orange) tables for obesity; Hormonin No. 2, 2-layer (blue and white) tablets for menopause; and Sinulin (peach colored) tablets for sinus headache. However, a small number of the sample folders were produced with the Bon- tril Timed tablets attached to the Sinulin segment of the folder and vice versa, We regret this error and would sincerely appreciate your cooperation in dis- carding this sample material. A new mailing will be reaching you soon. Sincerely yours, ROBERT G. DAVIS, Medical Service Department. MERCK SHARP & DOHME, DIVISION OF MERCK & Co., INC., West Point, Pa., December 20, 1966. DRUG SAFETY INFORMATION DEAR DOCTOR: From time to time, we have sent you new information regard- ing "Indocin" (indomethacin) as greater clinical experience is gained. At this time, I would like to reiterate that the drug should be used only in those con- ditions which are indicated in the package circular and it should not be prescribed for children because safe conditions for use have not been established. We are reminding the physician of this by placing an important note to this effect at the beginning of the package circular, a copy of which is enclosed. There are a few other changes in the circular and for easy recognition these have been put in boldface print. Sincerely yours, FREDERICK K. HEATH, M.D. Vice President, Professional Communications. THE UPJOHN Co., Kalamazoo, Mich., November 9, 1966. DEAR DOCTOR: Recently you probably learned that a token quantity of one of our products had been seized by order of a U.S. District Court at the request of PAGENO="0317" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1461 the Food and Drug Administration because of an advertisement in the Journal of the American Medical Association. Because of confusion which has resulted from this action, we are enclosing for your information a public statement which we have made concerning it. At issue here is the clarity of the regulations concerning medical advertising. Our product Lincocin, the effectiveness and safety of which has not been ques- tioned, has not been removed from the market. We invite you to continue to prescribe Upjohn products. They are fine products based on Upjohn research and presented to the medical profession by an or- ganization which does identify itself with the best principles and practices of American science and medicine. Very truly yours, J. 0. GAU~vTLETT, Vice President for Pharmaceutical Marketing. MERCK SHARP & DOHME, DIvIsIoN or MERCK & Co., INC., West Point, Pa., October 1966. DEAR DOCTOR: It is only natural that with over 144,000,000 patient days of therapy in 99 countries,, we have added to our cumulative knowledge of Indocin ® (Indomethacin) in the treatment of arthritic disorders. This greater experience is reflected in the revisions contained in the enclosed package .circular. These revisions will be made in all promotional material and package inserts as rapidly as possible. While we urge you to rnacquaint yourself with the entire package circular as revised,.we want to call your attention to one change in particular: "In common with other drugs w1~ich have anti-inflammatory, analgesic and antipyretic properties, indomethacin possesses the potential of masking the signs and symptoms which ordinarily accompany infectious disease. The physician must be alert to this possibility to avoid undue delay in intiating appropriate treatment of the infection. Indomethacin should be used with caution in patients with existing, but controlled, infections." This and other important changes in the jackage circular have been set in boldface type so that you may find them easily. They should assist you in the more effective use of Indocin-which has become, next to aspirin, the most frequently prescribed antirheumatic drug. Sincerely yours, FREDERICK K. HEATH, M.D.~, Vice President, Professional Communications. B. R, SQUIBB & Sous, INC., New York, N.Y., July 8, 1966. IMPORTANT DRUG RECALL-STREPTOMYCIN SULFATE INJECTION DEAR DOCTOR: Since February of this year we have been distributing Strep- tornycin Sulfate Injection U~S.P. of a slightly modified formulation for improved color stability. Although this formulation still meets all legally required stand- ards, data recently accumulated with the more stringent Squibb standard for mouse acute toxicity lead our scientific staff to suspect that this formulation, at a future date, may not continue to meet the regulatory standard. It should be noted that to date, we have received no reports of unusual human toxicity related to this formulation; however, it is our opinion that its use should be discontinued. In keeping with the traditional Squibb policy for quality, we have decided to recall this formulation from the market. If you have material in your possession bearing the following control num- bers, we urgently request that you promptly return it to the source from which you obtained it. Appropriate credit will be arranged. PAGENO="0318" 1462 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY List Product description Control No. No. 84221 Streptomycin sulfate injection 0.5 gm/cc. 2 cc. vial -_ I 5M908 84231 Streptomycin sulfate injection 0.5 gm/cc. 10 cc. vial ~5M835 (6D999 84826 Streptomycin sulfate injection 0.4 gm/cc. 2.5 cc vial 5W748 These control numbers are the only ones involved. The above action has been discussed with and agreed to by the scientific staff of the Food and Drug Administration. We sincerely regret this incident and request your cooperation by promptly returning the material. NEISLER UNION OARBIDE, June 7, 1966. DEAR DOCTOR: This is a drug recall notice. Please immediately stop using all stocks of Unitensen Aqueous. Return to us by insured parcel post your complete inventory of Unitensen Aqueous. Do not include any other merchandise with this shipment. Neisler Laboratories, Inc. will issue full credit to you and also reimburse you for the parcel post expenses. This recall notice Is leing sent you because our current laboratory tests indi- cate that the potency of some batches of Unitensen Aqueous may sometimes diminish during storage under some conditions. Pending further work we are recalling this product. The Food and Drug Administration has been advised of our action. We have not received any reports indicating a lack of safety or efficacy for T]nitensen Aqueous. Our decision to withdraw the product is solely based on the fact that it appears to have inadequate shelf stability. Sincerely, GERAAD G. HUNT, Eceecutivc Vice President. CHA5. PFIzEB & Co., INC., New York, N.Y., May 18, 1966.. Re Buclizino~containing drugs. DEAR DOCTOR: The Food and Drug Administration has requested that the pack- age inserts for buclizine-contaifling products be revised to contain the following statement: "Contraindication: Buclizine, when administered to the pregnant rat, induced fetal abnormalities at doses above the human therapeutic range. Clinical data are not adequate to establish nonteratogenicity in early pregnancy. Until such data are available, buclizine is contraindicated for use in early pregnancy." Buclizine is contained in Pfizer Laboratories' Terracydin Capsules, and in J. B. Roerig's Tetracydin Capsules and Tao AC Capsules. We have obtained F.D.A. approval to remove buclizine from each of these prod- ucts in order to eliminate this contraindication to use in pregnancy. All new pro- duction of these products will omit buclizine from the formulations. However, we have on hand a sizable inventory of each of these drugs contain- ing buclizine not yet finally packaged and which will not be exhausted for several months. This inventory will contain a package insert which includes the con'tra- indication quoted above. Sincerely yours, J. RALPH FOWLER, M.D., Medical Director, J. B. Roerig d~ Co. JOHN L. WATTERS, M.D., Medical Director, Pfizer Laboratories. PAGENO="0319" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1463 CHAS. PFIZER & Co., INC., New York, N.Y., May 18, 1966. DEAR DOCTOR: The purpose of this letter is to call to your attention in the con- traindication and precaution sections of the package inserts for our drugs which contain hydroxyzine or mecl!zine, revisions which pertain to use during .pregnancy. These revisions have been requested by the Food and Drug Administration. The package Inserts for products containing hydroxyzine have been revised to include the following statement: "Contraindication: Hydroxyzine, when administered to the pregnant mouse, rat, and rabbit induced fetal abnormalities in the rat at doses substantially above the human therapeutic range. Clinical data in human beings are inadequate to establish safety in early pregnancy. Until such data are available, hydroxyzine is contraindicated in early pregnancy." The clinical use of hydroxyzine as an adjunct to the management of labor has been extensively reported in the literature without evidence of harm to the mother or fetus. PRODUCTS CONTAINING HYDROXYZINE Pfizer Laboratories J. B. Roerig Vistaril Capsules Atarax Tablets and Syrup Vistaril Oral Suspension Atarax Parenteral Solution Vistaril Parenteral Cartrax Tablets Ataraxoid Tablets Marax Tablets and Syrup Enarax Tablets Amplus Capsules The package inserts for products containing meclizine have been revised to include the following statement: "Use in Pregnancy: The following information should be taken into account in determining whether the potential benefits of meclizine outweigh the risks of its use in women of childbearing age and particularly during pregnancy. A review of available animal data reveals that this drug exerts a tertogenic re- sponse in the rat. While available clinical data are inconclusive, scientific experts are of the opinion that this drug may possess a potential for adverse effects on the human fetus. Consequently, consideration should be given to initial use of a nonphenothiazine agent that is not suspected of having a teratogenic potential. In any case, the dosage and duration of treatment should be kept to a minimum." PRODUCTS CONTAINING MECLIZINE Pfizer Laboratories ~T. B. Roerig B'onine Tablets Bonadoxin Tablets and Drops Antivert Tablets and Syrup Meclizine when administered to the pregnant rat, mouse and rabbit induced fetal abnormalities in the rat only at doses substantially above the human therapeutic range. (For details of animal studies please see enclosed package insert.) An estimated billion doses of medlizine-containing drugs have been consumed in this country alone since 1953,. including an estimated one million prescriptions annually for pregnant women in recent years. While there have been a numiber of malformations associated with the use of meclizine, the evidence is incon- `ciusive as to causation since malformations also occur `among the offspring of mothers who ta'ke `other drugs or no drugs at all. As you no doubt are aware, as increasing scientific attention is being focused on the subject of teratology, studies are demonstrating that a fairly impressive number of drugs, when administered to `laboratory `animals, generally `at doses substantially exceeding the comparable human dose, produce malformations among the offspring. Regretta'bly, the end point of scientific knowledge in the floid `of teratology is not at hand. PAGENO="0320" 1464 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY In conclusion, we fully endorse the well established medical principle that care should be exercised in the use of any drug during pregnancy. Sincerely yours, J. RALPH FOWLEa, M.D. Medical Director, J. B. Roerig ~ Co. JOHN L. WATIERS, M.D. Medical Director, Pfizer Laboratories. Pun STUART 00., DIVISION OF ATLAS CHEMIcAL INnusanIns, INC., Pasadena,Calif.,MaylO,1966. DEAR DocToR: We have just been advised by the Food `and Drug Administration of conclusions reached by that agency concerning the teratogenicity of buclizine in rats. FDA `has decided that buclizine should be eontraindi'cated for use in early pregnancy. Recent data, including animal experiments still in progress in our Rio-Medical Research Laboratories, indicate that buclizine (an active ingre- dient in Bucladin and Softrari) induces a teratogenic response in rats when administered at dosage levels substantially higher than the maximum recoin- mended dose for humans. These findings are at variance with earlier enperiments in mice and rats performed by others which disclosed no indication of terato- genicity at high dosage levels. We accept the FDA decision in this matter even though our own animal experiments are still inconclusive and we have not had an `opportunity to examine the data or reports upon which the agency's decis'ion is based. We have been requested to add the following caution to the labeling for Bucladin and Softran: CONTRAINDIOATIONS Buclizine, when administered to the pregnant rat, induced fetal abnormalities at doses above the human therapeutic range. Clinical data are not adequate to establish non-teratogenicity in early pregnancy. Until such data are available, buclizine is co'ntraindicated for use in early pregnancy. Since the nausea and vomiting of pregnancy (an indication for Bucladin) are not usually of a critical nature and can generally be controlled by other means, it does not seem feasible to conduct extensive clinical experimentation in women in early pregnancy to establish beyond doubt the non-teratogenicity of buclizine. Bucladin was introduced in 1957. In this period of almost nine years, there have been no reports received by Stuart of human malformations in which it could be established that buclizine was the causative agent. Because of this extensive his- tory of use in pregnancy without demonstrated teratogenic effect, there does not appear to be reasonable cause for concern among your pregnant patients who have taken Bucladin or Softran. The Stuart Company will continue~to make Bucladin and Softran available on prescription for use by your patients when jndicated at any time except during early pregnancy. Sincerely yours, R. J. KROENERT, General Manager. CHAS. PFIZER & Co., INC., New York, N.Y., April 27, 1966. DEAR DocToR: The purpose of this letter is to request that you promptly destroy all samples of our Pfizer Laboratories and J. B. Roerig divisions, which are in your possession. We make this request because we have detected some instances of mislabeling of drug samples which were packaged and labeled for us by outside suppliers. This request is made because we fully share with you the high degree of im- portance attaching to the integrity of any drug sample given to a patient. We have every confidence that our request will meet with your sympathetic under- standing, and your aquiescence to our request. It is important to emphasize that the instances of sample mix-ups that we have discovered all involve samples packaged by outside suppliers which we and other pharmaceutical manufacturers use from time to time for this purpose. We realize that you have no way of knowing which of the samples you have were PAGENO="0321" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1465 packaged and labeled internally by us, so in the interest of expediency we are asking you to destroy all Pfizer Laboratories and J. B. Roerig sample~s. As to trade packages of Pfizer Laboratories and J. B. Roerig drugs, you can have every confidence that when the pharmacist fills your prescriptions for these products they will continue to meet every applicable standard of identity, quality, purity and labeling. Needless to say, we regret this situation and any incoilvenience it causes you and we assure you that every step is being taken to prevent its recurrence. We will expend every effort to replenish your supply of Pfizer drug samples as rapidly as possible but If at any time you are faced with a need for samples, in the interim, may we suggest that you contact your Pfizer Laboratories or J. B. Roerig professional service representative. Sincerely yours, J. PHILIP SMITH, Group Vice President. MERCK SHARP & D0nME RESEARCH LABORATORIES, DIVISION OF MERCK & Co., INC., West Point, Pa., April13, 1966. Subject: Association of positive Coombs test with Aldomet® therapy. I should like to call your attention to a recent addition we have made in the enclosed package circular for our product Aldomet (methyldopa). You will find the new reference encircled in the Side Effects section of the circular. The same change will be made in the Aldoril® package circular. As background, there has been a recent report in the British literature by Carstairs, Worlledge, Dollery and Breckenridge. They noted two patients in whom hemolytic anemia with a direct positive CQombs test developed after more than one year of treatment with Aldomet. They have reported also obser- vations of a positive antiglobulin (Coombs) reaction in six patients receiving Aldomet in whom there was no evidence of bemolysis, reticulocytosis, or anemia. A copy of their paper is attached. Further observations during the past few weeks both in England and the United States have confirmed the fact that some patients receiving Aldomet may develop a positive direct Coombs test without demonstrating any evidence of anemia, reticulocytosis or hemolysis. Several studies are now under way to determine the mechanism of these reactions, and whether they are the result of an altered immunologic process or a chemical interJ~erence with the Coombe reaction by Aldomet or ar~y of its metabolites. S These observations suggest that if unexplained direct, positive Coombs reac- tions are found in the course of crossmatching studies for transfusions, the possibility should be taken into account that Aldomet is being administered to such patients and might elicit such reactions. If you have noted this occurrence in your own experience, I would appreciate learning of your observations. Sincerely yours, S ELMER ALPERT, M.D. S Prizim. L~O~ATO~IES, DIVIsioN Øy Q~rx~h~ ~ 00., Ixo., ~en~Tb~1~ ~\~~Y~,,April 1, 1966. S IMPORTANT SAMPLE RECALL DEAR DOCTOR: In reviewing our inventory of physician samples, we have found a small number of 100 mg. Dibinese (chlorpropamide) tablet samples, lot 46460, incorrectly identified by the card enclosed with them as 250 mg. Dia'binese tablets. Because the possibility `exists `that this incorrect card may have been employed in other samples in l~t 46460, we are recalling this entire lot of 100 mg. samples. No other lots are involved, nor are any 250 mg. sample tablets involved. The sample in question is a unit consisting of a ~even~tablet circular plastic dispenser, a large printed card with a brochure in its pocket, and a booklet en- titled "If You Have Dialetes," all enclosed In a clear acetate wrapper. Please inspect your total inventory of Diabcinese samples of this tyj~e. If you have any, remove the `booklet and the card containing the brochure. The lot number is em- 81-280-68-----pt. 4-21 PAGENO="0322" 1466 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY bossed in the upper left-hand corner of the foil backing. If the number 46460 appears on any of your samples, please i~eturn them to us as `indicated below. We also ask that you contact any patients to whom you may have given Diabinese samples recently. If by chance you received and gave to a patient a sample from this lot identifying the contents as 250 mg. Dia'hinese, ~hen in fact the contents were 100 mg. tablets, the patient would obviously be `taking less medication than you prescribed. Our professional Sales Representatives would have distributed samples from this lot to physicians no earlier than December 15, 1965, so it will be necessary for you to contact only those patients to whom you may have given `these samples between December 15th and the date of this letter. If you find any Diabinese samples from lot 46460, even if they bear the correct card identifying them as 100 mg. tablets, please promptly mail `them to: Mr. John Mayreis, Chas. Pfizer & Co., Inc., 630 Flushing Avenue, Brooklyn, N.Y. 11206. We `wish to tha'nk you for your coopnration in this matter, and to express our regrets for any inconvenience it may cause you or your patients. Please let us know if there is anything we can do to assist you. Very `truly yours, JoHN L. WATTERS, M.D., Medical Director PFIZER LABORATORIES, `DIvIsIoN, CIIAS. PFIZER & Co., INC., Nei~~ York, N.Y., March 15, 1966. IMPORTANT DRUG ALERT DEAR DOCTOR: During the course of distribution to our Professional Sales Representatives of one lot of professional sample packages of 4 mg. Renese tab- lets, we found that some of the white shipping cartons containing 18 sample packages (6 tablets per package) were incorrectly labeled as 2 mg. Renese tablets, lot 51425. The sample packages themselves are properly labeled as 4 mg. Renese tablets. Normally in supplying your needs for professional samples, our Professional Sales Representatives would not have supplied this shipping carton to you. Since we cannot rule this out as a possibility in every case, however, we are taking this opportunity of writing to you. We therefere ask that you inspect all `the Renese tablet professional samples that you have on hand. Please immediately destroy any white shipping cartons you may have in your possession which bear the following information on the flap: Renese 2 Mg. (6 T'ablets), Lot No. 51425, 18 Detail Samples Whether these white shipping cartons contained 2 mg. tablets (yellow) or 4 mg. tablets (white), the individual sample packages bear the correct identifi. cation. Neither the labeling of the sample packages nor the potency of the medica- tion are at all In question. Should you find as a result of this review of your samples that you require clarification or additional drug, please call upon your Pfizer Laboratories rep- res'en'tative. Thank you for your cooperation in this matter. Sincerely, JOHN L. WATTERS, M.D., Medical Director. ROCHE LABORAToRIEs, DIvISIoN OF HOFFMANN-LA ROCHE, INC., Nutley, N.J., March 9, 1.966. IMPORTANT: DRUG RECALL DEAR DOCTOR: On February 28, we received a letter from FDA Oommissioner James L. Goddard advising us of his intention to remove Madricidin from the market by regulatory means unless we chose immediately to withdraw the product. Despite our belief that this should not be done, we have no practical alter- native but to accede to the demand of the Food and Drug Administration to PAGENO="0323" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1467 immediately suspend sale of this product and to withdraw existing ~tóeks from the market. It is the contention of the Food and Drug Administration that present evi- dence for Madricidin does not establish its safety and effectiveness in the treat- ment of the conditions for which it is recommended and that "hazards" accom- panying its use outweigh potential benefits. However, we should like to make you aware that ever since this preparation was marketed with the accord of the Food and Drug Administration in January 1959, it has been prescribed by physicians for more than two million patients. The Government's position apparently discounts the experience accumulated by thousands of physicians and the hundreds of thousands of `patients that have benefited from its use. During the seven years that this product has been avail- able, we have received reports of only five cases of side effects and no reports of Stevens-Johnson syndrome in patients treated with it. While we believe firmly that the demands of the Food an'd Drug Administra- tion are inconsistent with this outstanding record, we have no choice but to comply. This is preferable to exposing the physician, his patients, and our com- pany to the possible detrimental effect of the only alternative, government legal action to remove the product from the market. Recall of Madricidin from patients is not deemed necessary. However, your patients will not be able to refill their present supplies once they have been ex- hausted, and all samples of Madricidin in your possession should be destroyed. We regret any inconvenience that this announcement or newspaper stories prior to this letter may have caused you and your patients, and pledge our continuing efforts to safeguard and constructively advance traditional manufacturer-physi- cian-patiept relationships. Sincerely, ROBERT E. DIxoN, M.D., Director, Professional Services. WARNER-CIIILCOTT LABORATORIES, Morris Plains, N.J., March 7, 19i$6. DEAI~ DOCTOR: You may be aware of recent publicity concerning legal action taken by the Food and Drug Administration on February 28, 1966 with regard to Peritrate SA, the sustained action dosage form of Peritrate. In connection with this action we believe it is important to bring to your attention the following statement issued on March 4, 1966 by the Commissioner of the Food and Drug Administration~ "It has come to my attention that physicians are receiving calls from their patients asking whether or not they should continue, to take Peritrate SA. "The FDA has never indicated that .this drug is unsafe for use for the treat- ment of angina pectoris and wishes to reassure both patients and physicians that the recent action by FDA against the product was related solely to advertising and other promotional claims made by `the manufacturer." We are gratified that the Food and Drug Administration has made clear that its action has nothing to do with the safety of Peritrate. This prompt action `not only represents a fine example of cooperative working relations between industry and government but will serve to allay the fears of those of your patients who may have been calling you. Peritrate® in all its dosage forms remains available for your prescription. Sincerely, FRANK DITRAGLIA, M.D., Medical Director. CIBA PHARMACEUTICAL Co., DIVISION OP OIBA CORP., Sununit, N.J., February 16, 1966. IMPORPANP DRUG RECALL DEAR DOCTOR: CIBA Pharmaceutical Company has agreed,' at the request of the Food and Drug Administration, to suspend sales of 1~llipt~n tablets and with- draw all existing stocks from the' market. The Food and Drug' AdiPinistration considers that there is a lack of substantial evidence that Elipten' tablets are effective in the treatment of epilepsy; that it causes adverse reactions including PAGENO="0324" 1468 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY sexual precocity and masculinization of young females and that labeling with respect to Elipten does not cover all claimed adverse reactions. We are studying these questions raised by the Food aud Drug Administration and have agreed to their request that we immediately withdraw all supplies of Elipten from the market. Because all Elipten stock is being withdrawn, your patients will not be able to refill their present supplies. However, the Food and Drug Administration has agreed that we furnish physicians who request it sufficient supplies to pei mit patients now on Elipten to be tapered off and transferred to other anticonvulsant therapy In this connection we draw to your attention the following precaution stated in our Elipten labeling: At no time should anticonvulsant drugs be abruptly withdrawn as this may precipitate a marked increase in frequency of seizures or even status epilepticus On the basis of your own experience and in the light of this recall, we trust that you will be able to make whatever adjustments in your patients therapeutic regimen you deem advisable. Any stock of Elipten in your possession should be retuimed to CIBA Pharma- ceutical Company, 556 Morris Avenue, Summit, New Jersey, Attention: Return Goods Department. Sincerely, C. H. SULLIvAN, M.D., Director, Drug Regulatory Affairs. FATON LABORATORIFS DIVISION OP THE NORWICH PHARMACAL Co. Norwich, N.Y., January 18, 1966. URGENT: DRUG RECALL, FURACIN OPHTHALMIC LIQUID DEAR DOCTOR: Several recently manufactured lots of Furacin Ophthalmic Liquid have had a significant decrease in potency since the date of manufacture. Please destroy any samples in your possession. We have temporarily suspended all sales of this product and have withdrawn all existing stock from the market. We have resolved the difficulty and will resume distribution shortly. In the meantime, prescriptions for this product will not be filled and its use should be discontinued. This notice pertains to Furacin Ophthalmic Liquid oi~ly, not to Furaciti Oiththalmic Ointment. We regret that this is necessary. We shall continue to expend our best efforts to assure you of safe and effective products, always resolving any doubts in favor of your patient's safety and better treatment. EATON LABORATORIES. LEDERLE LABORATORTEs, DIVISION, AMERICAN CYANAMID Co., PEARL RIVER, N.Y., PARKE, DAVIS & Co.. DETROIT, MICH., ROCHE LABORATORIEs, DIvIsIoN or HOFFMANN-LA ROCHE INC., NUTLEY, N.J., January 11, 1966. DRUG WARNING DEAR Docuon: Since 1t~57 to date, reports in the medical literature have been accumulating concerning the occurrence of Stevens-Johnson syndrome (erythema multiforme exudativum) associated with the use of long-acting sulfonamides. This is a serious complication since it carries a mortality rate of approxi- mately 25 per cent. To date, 116 cases of Stevens-Johnson syndrome (including 81 cases from the United States) have been reported in association with the use of lông-acting sulfonamides~ Almost two-thirds of the reported eases were chil- dren. In addition to the Stevens-Johnson syndrome, it is also known that serious blood dyscrasias Including aplastic anemia agranulocytosis pancytopenia and thrombocytopenla can occur. We `are, therefore, taking this opportunity to bring PAGENO="0325" COMPETITIVE PROBLEMS IN THE DR~JG INDUSTRY 1469 to your attention the fact that the package inserts of the products listed below are being revised to contain the following prominently displayed warning: Warning: Patalities have occurred due to the development of Stevens-John- son syndrome (erythema multiforme exudativum) following the use of (drugs~ listed below). Therefore, the patient must be closely observed and should a ras1~ develop during therapy with (drugs listed below), the drug should be discom- tinued immediately. (Drugs listed below) is a sulfonamide which maintains a long-lasting blood level due to slow excretion. Because of the long-lasting blood levels, a smaller dosage than is normally employed with shorter-acting sulfonamides should be administered. Since the short-acting sulfonamides are effective for most of the same conditions, their use should be considered before the long-acting sulfona- mides are employed. Serious reactions associated with the use of long-acting sulfonamides should be reported promptly to the manufacturer or to the Food and Drug Adminis- tration. Lederle Laboratories Division KYNEX® (sulfamethoxypyridazine) Tablets. KYNEX® AOETYL (n' acetyl sulfamethoxypyridazine) Pediatric Suspension. AZO KYNEX® (phenylazodiamino-pyridine HCI sulfamethoxypyridazine) Tablets. Parke, Davis ~ Co. MIDIOEL® (sulfametboxypyridazine) Tablets. MIDIOFIL® AOETYL SUSPENSION (n' acetylsulfamethoxypyridazine). Roche Laboratories MADRIBON® (suLfadimethoxine), Tablets, Chewable Tablets, Suspension, Pediatric Drops. MADRICIDIN® Capsules: Each capsule contains: sulfadimethoxine, phenin- damine tartrate, acetaminophen, caffeine. ROCHE LABORATORIES, DIVISION or IIOFFMANN-LA ROCHE, INC., Nutley, N.J., December 30, 1965. IMPORTANT: DRUG RECALL DEAR DOCTOR: Iloffmann-La Roche, has agreed at the request of the Food and Drug Administration, to suspend sales of Librax® Capsules and withdraw all existing stocks from the market. In view of the widespread use of this product since 1961, we feel that an explanation of the circumstances leading to this with- drawal is in order. In November, we advised you that we had received isolated reports of en- hanced atropine?like side effects in patients on Librax therapy and had deter- mined by the use of new analytical procedures that certain specific batches of Librax contained a trace amount of an analog of the clidinium bromide com- ponent which accounted for these effects. At that time, we voluntarily withdrew the involved lots and replaced pharmacists' stocks with capsules which had passed our new analytical procedure. Up to this time we have received no reports of adverse reactions involving this new material. Because all Librax stock is being withdrawn, your patients will not be able to refill their present supplies once they have been exhausted. As you know, all new drugs must be the subject of an approved New Drug Application in order to be marketed. We have been advised by the Food and Drug Administration that it was not willing to approve a supplement we bad filed to our New Drug Application on Librax, concerning the clidinium, bromide component. This supplement contained revised analytical procedures, data on the `supplier of clidinium bromide and other technical information. The Li'brax on the market wads produced in accordance with these revisions. A~s a result, on December 28th the Food and Drug Administration requested us to withdraw all supplies of Librax or the necessary legal steps would be initiated to have it removed since the Librax currently on the market was not produced in accord- PAGENO="0326" 1470 COMPETITIVE PROBLEMS IN TIlE DRUG INDUSTRY ance with the provisions of the original New Drug Application. Under these cir- cumstances we elected to withdraw the stocks of Lib'rax. Since clinical experience has shown that Li'b'rax `can be a valuable therapeutic aid for many patients, and we continue to be convinced that Li'brax is a `safe and effective drug, we shall continue to explore with the Food and Drug Administra- tion means for marketing Librax again a's soon as possible. Meanwhile, we regret any inconvenience this may cause you and your patients and pledge our con- tinuing efforts to make availaJi~e drugs assuring `patient bene~ts in efficacy, safety and practicality. Sincerely, ROBERT E. DIXON, M.D., Director, Professios~a1 Services. RocHE LABoRAToRIEs, Natley, N.J., November 19, 1965. DEAR Doc~oR: Over the last two weeks we have received isolated reports from widely scattered communities to the effect that a few patients were experiencing enhanced atropine-like side effects in response to Librax therapy, such as blurring of vision, dryness of mouth, urinary hesitancy and constipation. Assays of the clidinium bromide component of ce'rtain of the offending capsules indicated their conforman'ce to the normal rigi'd quality control standards. Not content with these assays we `submitted the capsules to a more critical test- a newly developed thin-layer chromatogra'phi'c procedure that is far more sensi- tive than the method heretofore employed. This new `procedure will be used in all future assays of the anticholinergic agent in Li'brax. The presence of a trace amount of an analog of clidinium bromide at approxi- mately the level of one two-millionths of an ounce `per capsule was revealed in certain recently distributed `batches of Librax-infinitesimal but sufficient to account for the enhanced atropine-like effects reported. Therefore, `we are voluntarily replacing all involved lots of Librax presently in distri'bution, Librax is the only Ro~he product containing clidinium bromide. Your `pharmacist will `have new stocks within ten days. Physicians should he alert to the possibility of increased reports of these atropine-like `side effects in patients receiving Librax, particularly the elderly and those receiving `higher dosages. Therapy should be discontinued in patients who exhibit these symptoms until they can `purchase new supplies. Any Lthrax sample's or trade package's with lot numbers beginning 143- through lot numbers beginning 172-w'hic'h you presently have on hand should be destroyed. You `will receive fresh clinical supplies from your Roche re'presentative or through the mail within the next three,weeks by sending t'he enclosed business reply card. We want you to know that you ean continue to prescribe Librax with confi- dence based not only on your clinical experience with the drug but also on this further proof of Ro~he's continuing effort to improve and sustain precise quality `control. A `Librax package circular is enclosed for your reference. Sincerely, ROBERT E. DIxoN, M.D., Director, Professional Services. MCNEIL LABORATORIES, INC., Port Washington, Pa., November 12, 1965. IMPORTANT: SAMPLE LABEL PRINTING ERROR BTJTISERPAZIDE®_50, BATCH 8948, DATED 8/10/65 DEAR DOCTOR: During the period October 13 to October 15, 1965, you may have received two folding catch-cover samples of tablets BUTISERPAZIDE-50, which we mailed to physicians in your area. Each such sample folder was labeled cor- rectly on the outside and inside "BUTISERPAZIDE®_50" and contained four, orange BUTISERPAZIDE-50 tablets in transparent film jackets. However, due to incorrect printing, as you will note on the facsimile provided `below, the quantitative formula information lists the hydrochlorothiazide content in each tablet as 25 milligrams (% grain) when in fact they contain 50 milligrams (% grain) also, imn~edidately below the formula information, it is stated the tablets are "Colored Green" when in fact they are colored orange. These incorrect `sam- PAGENO="0327" COMPETITIVE PROBLEMS' IN THE DRUG INDUSTRY 1471 pie folders are all dated 8/10/65, which is shown on the outside of the folder. Because of this incorrect quantitative statement of hydrochiorothiazide, it is respectfully requested that you destroy these two sample folders that are in your possession. At the same time, we ask that you sign and return the enclosed postpaid card for our records. The two sample folders of BUTISERPAZIDE-50 were mailed in a small box together with two similar folding catch-cover sample folders of BUTISERPA- ZIDE-25, which are correct in every respect and need not be destroyed. We regret a'ny inconvenience caused you, and will appreciate your prompt attention to this matter. R. R. SMITH, MD., Medical Director. Priznn LARORATORIR5, New York, N.Y., 19, 1965. DEAR Docron: Subsequent to the market introduction of Tyzine® (tetrahydro- zoline HC1) in 1954, in'frequent instances of drowsiness `have occurred when the drug has been administered to children under two years of age. Marked somnol- ence or even shock, especially after ingestion of the solution, has been en- countered rarely. In every instance the effect has' been reversible and without sequelae. A caution regarding the possible occurrence of this syndrome in cases of overdosage has appeared in the Tyzine package circular. Nevertheless, infre- quent instance of this effect in children under two have continued to `be reported. Therefore, in consultation with the Food & Drug Administration the T~zine labelling has been revised to contraindicate its use in children under two years of age. Tyzine has been `successfully employed as a topical na~a'l decongestant through- out the country for the last 10 years. It continues to be a most valuable thera- peutic agent for the 1~elief of inflammatory hyperemia and edema of the nasal rnucos'a and congestive obstruction of sinus and Eu'stachian ostia, as may occur in the common cold, hay fever, and other related disorders, in patients over two years of age. Tyzine 0.1% (Spray or Drops) may be used in patients over 6 years of age. Tyzine Pediatria .05% (Drops) should be used in patients from 2 to 6 years of age. For complete dosage and prescription information, please consult the accompanying package circular. Sincerely, JOHN L. WATERS, M.D., Medical Director, Pfizer Laboratories. MARCH 1, 1965. To: All Physicians From: CIBA Pharmaceutical Company, Division of CIBA `Corporation; Merck Sharp & Dohme, Division of Merck & Oo., Inc. We should like to call your attention to the attached reprint entitled "Ulcerative-Obstructive Lesions of the Small Intestine," which appeared in the J.A.M.A. 191 :116-119, Feb. 22, 1965. This article contains the most comprehensive information on this subject to date. You will also be interested in an editorial concerning this subject in the same issue of the Journal. The available information based on the results of the hospital survey and other reports has implicated coated potassium salts in about half the known patients who have developed the obstructive-ulcerative lesion. Therefore, coated potassium-containing formulations should be administered only When indicated and when adequate dietary supplementation is not practical. Such preparations should be discontinued if abdominal pain, distention, nausea, vomiting or gastrointestinal bleeding occurs. As a result of these `findings, Merck Sharp & Dohme, CIBA and the FDA concluded that an informative statement be incorporated in the labeling of ~ippro- priate products. Subsequently the FDA has requested all manufacturers of thiazide and certain other oral diuretics as well a's coated potassium salt prepara- tion's to add the following statement to the labeling of all such products: Warning:, There have been `several reports, published and unpublished, concerning non- specific small bowel lesions consisting of stenosis with or without ulceration associated with the administration of enteric-coated thiazides with potassium PAGENO="0328" 1472 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY salts. These lesions may occur with enteric-coated potassium tablets alone or when they are used with non enteric-coated thiazides or certain other oral diuretics. These small bowel lesions have caused obstruction, hemorrhage and perfor- ation. Surgery was frequently required and deaths have occurred. Based on a large survey of `physicians and hospitals, both American and foreign, the incidence of these lesions is low, and a causal relationship in man has not been definitely established. Available information tends to implicate enteric-coated potassium salts, although lesions also occurred spontaneously. Therefore, coated pc~tassium- containing formulations should be administered only when indicated and should be `discontinued immediately if abdominal pain, distention, nausea, vomiting or gastrointestinal bleeding occurs. Coated potassium tablets should be used only when adequate dietary sup- plementation Is not practical. Euao LABORATORIES, INC., Garden City, N.Y., October 1964. DEAR DOCTOR: Since the introduction of Numorphan (oxymorphone) some five years ago clinical experience has shown that it is a very useful drug in the relief of severe pain. We enclose a file card, brought up-to-date, giving full product information including precautions side effects indications and dose recom mendations. We call your special attention to the fact that the safe use of Numorphan (oceymorphone) in children under 12 years of age has not been established. Among the advantages of Numorphan for pain relief are the following: 1. Prompt onset of action, (10 to 15 minutes). 2. Prolonged duration of effect. 3. Ten times as effective as morphine and 100 times as effective as meperidine, wei.ght for weight. 4. Broad therapeutic index. 5. Tranquility with only slight soporific effect-patients remain alert, capable of cooperation and self care. 6. Infrequency of side effects with recommended therapeutic doses. Please do not hestitate to write us should you wish to obtain reprints of published articles on the use of Numorphan. Very truly yours, Ross SAYERS, M.D., Medical Director. E. FOUGERA & Co.. INc., Hicksville, N.Y., April 1964. IMPORTA~ T-DRUG RECALL-ORABILEX Because of reports that Oliguria renal insufficiency and death may be asso ciated with repeat doses of Orabilex,, this product was withdrawn from the market in January. However, the Food and Drug Administration has advised us that some physicians have failed to return their supplies of Orabilex. In the event that you or your referring physicians have Orabilex on hand, please immediately return all supplies to your vendor for return to us for credit. DEAR DOCTOR: In 1958, after several years of chemical, pharmacologic and clinical investigation, we introduced the new gallbladder contrast medium, Ora- bilex. Since that date this product has been employed by physicians throughout the world in several million patients. More than thirty papers have appeared in the medical presis of this country alone, attesting to its excellence in providing accurate gallbladder studies. As you are aware, there have been report's alleging that in rare instances: the use of Orabilex has been associated with the development of renal insufficiency. In many of these cases recommended dosage was exceeded or Orabilex was used when cholecystography was contraindicated. In other instances Orabilex was ad- ministered concomitantly with other preparations. Also, past extensive toxicity studies under various conditions and at. different dose levels failed to reveal any evidence of a nephro'toxic propertyof Orabilex. Whereas medical opinion has failed to establish a cause-and-effect relationship, we nevertheless deemed it advisable to withdraw Orabilex from the market pend- PAGENO="0329" COMPETITIVE PROBLEMS IN THE DRTJG INDUSTRY 1473 ing further investigation. All channels of supply `have been notified of this decision. We feel we would be remiss if we failed to express in this letter, our sincere thanks for your acceptance of Orabilex, and for your confidence in us as ex- pressed in the many letters we have received. We consider ourselVes to be dedi- cated to the research and investigation of products of service in radiology. With renewed assurances of our desire to be of service to yoti, we remain Sincerely yours, C. H. BRADNEY, Ea,ecutive Vice President. ABBOTT LABORATORIES, North Chicago, ill., April 24, 1967. DEAR DOCTOR: Attached is a duplicate of a letter we recently sent you on EutonylTM (pargyline hydrochloride). Because of the importance of the subject matter, we urge you to read it, if you happened to miss the original. It places in perspective recent medical information on Eutonyl-and may an- swer any questions you may have regarding the current status of Eutonyl in treatment of hypertension. Many thanks in advance for your interest. Sincerely, W. D. PRATT, Professional Services. P. S-Also please note the reply card. It will bring a generous supply of sam- ples Simply sign and mail. ABBOTT LABORATORIES, NORTH CHICAGO, ILL. DEAR DOCTOR: We hope in this letter to clear up any confusion you may have had regarding our recent precautionary letter on EutonylTM (pargyline hydro- chloride). Recently, we asked the F.D.A. for permission to include in our literature new precautions relating to ingestion of cheese and also certain statements reempha- sizing the need for caution in use of sympathomimetic drugs in patients taking EutonyL We also asked to be permitted to send physicians a letter outlining our recommended changes. This permission was granted on Wednesday, February 26, and our letter went into the mail two days later. That same week, however, doctors were receiving a letter from another manufacturer announcing withdrawal (under protest) of another drug from the market. That drug, of course, was Parnate® (tranylcypromine). We've learned now that the near simultaneous release of the letters has caused some confusion. In fact, quite a few reports have come to us that some physicians have concluded that Eutonyl was taken off the market. Please be assured that Eutonyl is very much in the market. The other drug, Parnate, was used for treatment of mental depression. Eutonyl is a drug for hypertension. Below, we've summarized the important. changes in the literature. The Com- ment in each case will help put this material in perspective. 1. We have added a contraindication against cheese. This is a result of hypertensive reactions in some patients on Eutonyl who have eaten aged or nonprocessed cheese. Comment; We have received only 12 such reports. There may have been a few other cheese reactions, of course, which have not been reported to Abbott. The reactions are due to the presence of tyramine in certain types of cheese. Until more information is known about these cheese reactions, we can not recommend any "exceptions" to the rule of not eating cheese. 2. We are reemphasizing the possibility of hypertensive reactions in pa- tients on Eutonyl who are given a centrally or peripherally acting sympatho- mimetic drug (e.g. amphetamine or ephedrine). Included are certain over- the-counter drugs-cold preparations, reducing pills, etc.-products that might contain amphetamine, ephedrine, or their derivatives. Comment: The number of such reports is `quite small-less than 15 out of an estimated 1,700,000 drug uses in some 400,000 different patients. (A "drug use" is any occasion in which the drug is prescribed or dispensed.) The im- portant point is that these hypertensive reactions are avoidable. With the PAGENO="0330" 1474 COMPETITIVE PROBLEMS IN THE DRTJG INDUSTRY exception of a single patient who had undiagnosed pheochromocytoma, every report of hypertensive reaction received to date has involved either the eat- ing of cheese or the taking of a drag containing a sympatho~imimetic amine. (Pheochromocytoma is a basic contraindication to the use of Eutonyl). 3. Our new literature coutraindicates the use of other MAOI or methyldopa (non-MAOI) in patients taking Eatonyl. Gomment: The use of MAO inhibitors is contraindicated simply because of the possibility of augmented side reactions. Similarly, with methyldopa. Keep hi mind, however, that lThitonyl may be used very successfully with the triazides, and most other oral antihypertensives. In such cases, the dosage of Eutonyl can and should be reduced in order to obtain the benefits of com- bined drug action with fewer side effects. Finally, doctor, we'll ask you to consider these background facts on Eutonyl. Keep in mind that Eutonyl has been in widespread clinical use or more than a year. 1. There have been no reports of organ system toaicity from ase of Eutonyl. This includes blood dyscrasias, kidney damage, liver impairment, or optic changes which have occurred with other antihypertensive drugs or olther MAOJ. 2. There have been no deaths reported from use of Eutonyl. 3. There have been no reports of hypertensive reactions resulting from use of Eutonyl alone. In closing, we would like to emphasize that Eutonyl has been thoroughly re- viewed by the F.D.A. * * * that it is still very much in the market * * * that it is one of the major and most effective drugs available for treatment of hypertension. In case you missed it, a copy of the revised Eutonyl literature is enclosed. All of the new information is clearly presented. Thank you for your interest-and your time. LAKESIDE LABORATORIES, INC., Milwaukee ,Wis., March 30, 1964. IMPORTANT: DRIJG WARNING Dear DOCTOR: We have received two reports regarding fatalities due to anaphylactic shock following injections of Imferon® (iron dextran injection). In cooperation with the Food and Drug Administration, we are informing you and all other physicians of these reports. One of these cases was called to your attention in our 1904 PDR monograph and also has been noted in our journal advertising. Since 1954, when iron dextran injection was introduced to physician~, a total of three such fatalities, including the two above ,have been reported. One report, published in the Pharmaceutical Journal (Pharmaceutical Society of Great Britain) May, 1900, is included in its entirety in our enclosed revised package insert, under ADVERSE REACPIONS. Please note also the new WARNING section. - In regard to the reactions reported to us, one of the patients was a sixty-six year old female with no history of allergy. The reporting physician ascribed the cause of death to anaphylactic shock following ten to fifteen minutes after the first dose of iron dextran injection. The other fatality occurred approximately one hour after the fourth injection of the drug. The patient was an eighty-one year old female being treated for hypertension, heart disease, diabetes and anemia secondary to gastritis. The injection caused intense pain and slight urticaria which had not been evident previously. On the day of the injection the patient did not appear to be feeling as well as usual. Death was thought by the physician to be due to natural causes but was reported to us as a possible anaphylacic shock because of the pain, urticaria and suddenness of death. Although the incidence of reported fatal reactions is very low-one is well over four million-we wish to make certain that members of the medical pro- fession are fully aware of possible reactions as well as the usefulness of the drug, when its use is indicated. We respectfully request that you submit to Lakeside Laboratories and the Food and Drug Administration reports of all side effects and adverse reactions, PAGENO="0331" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1475 particularly of the anaphylactic type, that you have encountered in your patients during or subsequent to the administration of Imferon (iron dextran injection). Sincerely, WILLIAM C. JANSSEN, M.D., Director, Clinical Research. SMITH KLINE & FRIrNCH LABORATORIES, Philadelphia, Pa., February 24,1964. IMPORTANT-DRUG WITHDRAWAL NOTICE DEAR DOCTOR: Late last fall we notified you of certain hypertensive reactions that had occurred during `Parnate' (tranylcypromine, SK&F) therapy. We pointed out that these hypertensive reactions sometimes resulted in cerebro- vascular accidents, occasionally fatal in outcome. And we revised our Prescribing Information to Include this material. We also requested physicians to send us additional information as to any similar cases encountered in their practice, and as a result, we have received a number of additional reports. After reviewing with the Food and Drug Administration the data from this country and abroad, we believe that of the hypertensive reactions reported, approximately 50 cases of cèrebrovascular accidents, including 15 fatalities, may be attributable to the use of `Parnate' (tranylcypromine, SK&F), among the more than 31/2 million patients who have received the drug. We are now informed by the FDA that because of these reactions they believed that `Parnate' (tranylcypromine, SK&F) should be taken off the market. With all due respect for the FDA, it is the opinion of the SK&F medical staff and the opinion of many eminent physicians whom they have consulted that the benefits of `Parnate' tranylcypromine, SK&F) outweight the risks; that it is a useful and valuable drug for the treatment of a serious illness and should remain available to the medical profession. This view is supported by the recent findings of the British Safety of Drugs Committee. Nevertheless, under protest, we are withdrawing `Parnate' (tranylcypromine, SK&F) from the U.S. market. We are taking this step because under the present law and regulations, where there is an honest difference of medical opinion On scientific matters, there is no effective appeal to an impartial body of iuedic~l experts by whom the matter can be considered in a calm, scientific manner. Such a procedure has been strongly advocated by leading medical authorities. In view of the withdrawal of the product, would you therefore please iastruct your patients who are taking ~Parnate' (tranylcypromine, ~S~K~-P) to discoutinue and to destroy whatever remaining tablets they may have. In transferring patients from `Parnate' (tranylcypromine, SK&F) to another antidepressant, allow a medication-free interval of at least a week. We will continue to present our views to the Food and Drug Alministration and to explore with them the possibilities and procedures for having `Parnate' (tranylcypromine, SK&F) made again available to the physician. Very sincerely, WALTER A. MIJNNS, President. SMITH KLINE & FRENCH LABORATORIES. Philadeipli ia, Pa., December 1963. IMPORTANT-DRUG WARNING DBAR DOCTOR: Although paradoxical hypertension and severe headache have always been listed among the possible side effect of Parnate (tranylcypromine, SK&F), instances of an unusually severe reaction of this type have come to our attention. The reaction is described in detail below. Reports of serious sequelae from this reaction have appeared in the foreign literature, but no reports have been published in this country. Accordingly, in our continuing effort to keep you fully informed about our products, we are passing this information on to you. In cooperation with the Food and Drug Administration, we have revised our Parnafe (tranylcypromine, SK&F) Prescribing Information, a copy of which is enclosed. Following are sections from it that have been revised either wholly or in part: PAGENO="0332" 1476 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY CONTRAINI)ICATIONS A. The following contraindications should be carefully observed because hyper- tensive episodes associated with a distinctive reaction have been reported. such reactions are charaeteri~ed by some or all of the following symptoms: occipital headache which may radiate frontally, paipitation, neck stiffness or soreness, nausea and vomiting, sweating (sometimes with fever and sometimes with cold, clammy skin) and photophobia. Either tachycardia or bradycardia may be pres- ent, and associated constricting chest pain and dilated pnpils may occur. In rare instances, intracranial bleeding, sometimes fatal in outcome, has been reported in association with this paradoccical increase in blood pressure. 1. IN PATIENTS WITH CEREBROVASCULAR DEFECTS OR SEVERE CARDIOVASCULAR DISORDERS Parnate (tran,ylcypromine, ~K~F) should not be administered to any patient with a confirmed or suspected cerebrovascular defect or to any patient with severe cardiovascular disease. 2. IN COMBINATION WITH `TOFRANIL'*, `ELAvIL'*, OR MAO INHIBITORS Under no circumstances should Parnate (tranylcypromine, SK&F) and `To- frãnil' be administered together or in rapid succession. In addition to the possi- bility of a hypertensive reaction, severe seizures have been known to occur in patients receiving such combinations. Likewise, Parnate (tranylcypromine, SK&F) should not be used with other MAO inhibitors or with `Elavil'. In patients being transferred to Parnate (tranylcyprornine, SK&F) from an- other MAO inhibitor or from `Tofrflnil' or `Elavil', allow a medication-free in- terval of at least a week, then initiate Parnate (tranylcypromine, SK&F) using half the normal dosage for at least the first week of therapy. Similarly, at least a week should elapse between the discontinuance of Parnate (tranylcypromine, SK&F) and the administration of another monoamine oxidase inhibitor or of `Tofr~nil' or `Elavil'. 3. IN COMBINATION WITH SYMPATIIOMIMETICS Based on reactions seen in a few patients who have received sympathomimetics or other stimulants, particularly methamphetamine by injection, during Parnate (tranylcypromine, SK&F) therapy, it appears that certain patients are particu- larly vulnerable to the effects of these drugs when the activity of certain enzymes is inhibited. Use of these drugs with Parnate (tranylcypromine, SK&F) may precipitate hypertension, headache and related symptoms. Methyldopa and re- search compounds such as dopamine and tryptophan, and according to a recent speculation, the ingestion of cheese, may also contribute to the possibility of a hypertensive reaction. Parnate (tranylcypromine, SK&F) should not be used in the presence of pheochromocytoma since such tumors secrete pressor substances. Important: Recommended treatment in hypertensive reactions-If a hyper- tensive reaction occurs, Parnate (tranylcypromine, SK&F) should be discon- tinued and therapy to lower blood pressure should be instituted immediately. Headache tends to abate as blood pressure is lowered. On the basis of present evidence, phentolamine (available as `Regitine'~) or pentolinium (available as `Ansolysen't) is recommended. (The dosage reported for pheiitolamine is 5 mg. iv., and for pentolinium, 3 mg. s.c.) Care should be taken to administer these drugs slowly in order to avoid producing an excessive hypotensive effect. Fever should be managed by means of external cooling. Other symptomatic and sup- portive measures may be desirable in particular cases. WARNINGS The occurrence of palpitation or unusually frequent headaches during Parnate (tranylcypromine, SK&F) therapy may indicate intolerance to the drug. Therapy should be discontinued when these signs are seen. *,Trade Marks Reg. U.~S. Pat. Off.: `Tofranil' for irnipramine, Geigy, and `Elavil' for amitriptyilne, Merck & Co., Inc. .~Prade Marks Reg. U.S. Pat. Off.: `Regitine' for phentolamine and methanesulfonnate, U.S.P., CIBA; and `Ansolysen' for pentoilnium bitaritrate, Wyeth. PAGENO="0333" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1477 We are investigating all possible aspects of this problem. If you have any direct knowledge of a hypertensive episode, a cerebrovascular accident or other untoward reaction associated with Parnate (tranylcypromine, SK&F) therapy, we would appreciate your sending a complete description to our Medical Depart- ment or to the FDA. If possible, case reports should include a detailed statement of the patient's medical history and a listing of the foods and other drugs ingested immediately preceding the onset of acute symptoms. We will provide all physi- cians with a further report on this subject as soon as definitive information is available. Very sincerely, WALTER A. MUNNS, President. PFIZER LABORATORIES, New York, N.Y., Au~gust 21, 1963. IMPORTANT DRUG WARNING PLEASE READ DEAR DOCTOR: It has come to our attention recently that Diabinese® (chior- propamide) is being used in some instances for the treatment of diabetes during pregnancy. Sulfonylurea therapy of diabetes during pregnancy is contrary to the advice and recommendations of the general consensus of expert opinion on the subject, and there is, therefore, insufficient data supportng its efficacy and safety in this condition. Pregnancy, along with infection, surgery, trauma and other stressful situa- tions has always been considered to be a complication of diabetes and an indica- tion for insulin therapy. It is almost axiomatic that diabetic control becomes more complicated and insulin requirements increase under such conditions. The primary indication for sulfonylurea therapy is uncomplicated diabetes mellitus of the stable, mild or moderately severe, non-ketotic, maturity-onset type. Accordingly, the use of this drug in pregnancy is not indicated. In addition, diabetes in the majority of women capable of bearing children is not of the stable, maturity-onset type. We are unaware of significant reliable data on the use of chlorpropamide dur- ing pregnancy, and therefore, its use is contraindicated in this condition; Indeed, caution is urged in prescribing this drug to any woman capable of bearing children because of the potential danger to the mother and to the embryo or fetus in an unsuspected pregnancy. Accordingly in cooperation with the Food and Drug Administration, we have revised our Diabinese (chiorpropamide) package insert to include the following caution: "Diabinese (chlorpropamlde) is contraindicated in pregnancy. In view of the question of safety in this condition, serious consideration should be given to the potential hazard of its use in women of the childbearing age who may become pregnant." In closing, we urge that any reports of your past experience with Diabinese (chlorpropamide) during pregnancy, either adverse or favorable, be forwarded in detail to us and to the Food and Drug Administration. We shall hold such reports in strict confidence. Very truly yours, ROBERTS M. REEs, M.D., Medical Director. LLOYD BROTHERS, INC., Cincinnati, Ohio., August 6, 1963. DEAR DOCTOR: We would like to call to your attention a mystery and possible problem which has been encountered with our new product Oopoietin Ferrous Tablets. Copoletin Ferrous was introduced eight weeks ago after several years of clinical research. The results convinced us that we had a quality product to offer for the treatment of anemia. During the past week, we have discovered that some tablets of Copoletin Ferrous do not disintegrate properly in the body although every batch has passed the rigid table disintegration tests as established by TJ.S.P. For some as yet unexplained reason, the accepted standard disintegration tests do not en- able us to assure Lloyd Brothers' standards of quality. Until this mystery can be solved, Lloyd Brothers has elected to withdraw from distribution all stocks of the drug presently available for sale. We ask that you destroy any samples PAGENO="0334" 1478 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY of Copoietin Ferrous that may be in your possession in order to ensure against any therapeutic failure in your patients We have elected to take this course of action voluntarily in order to ensure the highest quality of drugs consistent with our standards. We hope that this apparent mystery can be resolved with scientific facts in the near future. When this takes place, we will again offer Copoletin Ferrous for your consideration In the meanwhile we beg your indulgence We sincerely appreciate your interest in. Lloyd Brothers' products and assure you of our in- terest in supplying only the best products possible for your patients. Sincerely H. R. REAMES, Ph. P., M.D. WALLACE LABORATORIES, Uranbury, N.J., July 30, 1963. DEAR DOCTOR: As you know, we have periodically revised and issued copies to you of the Physicians Reference Manual on Miltown (meprobaniate) in order to keep you up-to-date on all information on meprobamate available in the world's literature. As part of our medical information program, also, we have periodi- cally sent to you copies of the current package insert. Accordingly, we wish to call your attention to a revision of the package insert, and especially to the sec- tions on "Important Precautions" and "Side Effects" of the enclosed. The choice of any drug-any therapy-as you well know, must always involve acceptance of the drawbacks with the advantages. The continued use of meproba- mate over the years is largely due, we feel, to its unusually favorable balance between high efficacy and low toxicity In most cases of anxiety and tension this balance has made meprobamate the drug of choice over other tranquilizers. This favorable balance between efficacy and toxicity was reflected at the Annual Meeting of the American Medical Association in Atlantic City last month where three physicians, practicing independently and in totally different settings, re- ported their work with tranquilizers and sedatives. One physician treated psychiatric outpatients at a clinic in a large eastern city; the second reported work with hospitalized psychotics and neurotics in a southern state institution; the third, in private practice, treated anxiety and tension ifl professional and skilledworkers. All these physicians have been using Miltown (meprobamate) for nearly a decade and were thus able to make evaluations based on long experience. All of them found meprobamate to have a favorable balance between efficacy and toxicity as compared with other tranquilizers studied. Our facilities are available to you for summaries of the above reports, and for `ibstracts or complete papers on any aspect of meprobamate therapy If you contact me directly, I will see that your request receives immediate attention. Cordially MARTIN 0. SAMPSON, M.D., Medical Director. ROCHE LATi0RAT0Rm5 Nutley, N.J., July 3, 1963. DRUG WARNING LETTER Re: Intravenous use of KONAKION® (phytonadione) vitamin K i activity. DEAR DOCTOR Konakion Injectable has been in general use in the United States since early 1959. It has recently come to our attention that five patients receiving Konakion (phytonadione) by intravenous administration experienced serious reactions including one fatality We are therefore advocating the elimination of the intravenous use of the product In an emergency situation such as actual hemorrhage the treatment of first choice is the administration of whole blood or plasma Konakion (phytona dione) may then be administered intramuscularly. You are requested to submit to the Company or the Food and Drug Adminis- tration reports of all side effects and all adverse reactions that you have en- countered in your patients during or subsequent to the administration of Konakion (phytonadione) Injectable Sincerely ROBFIiT E DixoN, M D, Director Pro fesswnal services PAGENO="0335" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1479 WINTHROP LABORATORIES, NEW YORK, N.Y. IMPORTANT DRUG PRECAUTIONS DEAR Doovon: The recent experience of various investigators has shown that Aralen® (brand of chioroquine), used alone or as an adjunct to other drugs and therapeutic measures, may be very helpful in the management of patients with lupus erythematosus or rheumatoid arthritis. Although many physicians have found that the incidence of serious side effects is lower than that en- countered with other potent agents that are often employed in such patients, certain ocular complications have sometimes been reported during prolonged daily administration of chioroquine. Therefore, when chloroquine or any other antimalarial compound is to be given for long periods, it is essential that measures be taken to avoid or minimize these complications. Thus initial and periodic (trimonthly) ophthalmologic examinations (in- cluding expert suit-lamp, fundus and visual field studies) should be perform~d. The initial examination will reveal if any visual abnormalities, either coinciden- tal or due to the disease, are present and will establish a base line for further assessment of the patient's vision. Should corneal changes occur (which are thought to be rev~rsible and which sometimes even fade on continuance of treatment), the advantages of withdrawing `the drug must be weighed in eac'h case against the therapeutic benefits that may accrue from continuation of treat- ment (sometimes a severe relapse follows withdrawal). If visual disturbances occur-which are not fully explainable by difficulties of accommodation or corneal opac'ities-and particularly if there is any suggestion of visual field restriction or retinal change, administration of the drug should be stoppe'd immediately and the patient closely observeud for possible progression. We sho'uld like to request your cooperation in i~eporting to Winthrop Labora- tories or to the Food and Drug Administration any patients in yo'ur own practice who have developed impairment of vision or retinal change during or subsequent to the administration of chloroquine. A reference card of a convenient size for filing is enclosed. It contains in- formation on the various indications for Aralen (including lupus erythematosus, rheumatoid arthritis, malaria and amebiasis), dosage, side effects and pre- cautions. Very truly yours, E. J. FOLEY, M.D., Vice Pi'esident, Medical Director. PARKE, DAVIS & Co., DETROIT, MICH. DRUG WARNING-ZARONTIN DEAR DOCTOR: In conformance with our policy to inform physicians promptly of adverse or unusual effects from our products, and in co-operation with the Food and Drug Administration, we `are calling attention to several reports re~ ceived recently Zarontin® (ethosuximide). Several cases of agranulocytosis and severe pancytopenia have been reported. Recently two cases (one fatal) of bone marrow depression have been received. These reports came from Europe; and even though many details are not known, the following information was supplied to our representatives. Case I. Patient was a 15-year-old female with a history of having received Zarontin for four years in a dosage range from 7 to 10 capsules daily. The diag- nosis was agranulocytosis and marrow transplants were not successful. Case II. Patient was a 15-year-old male who developed increasing pallor and bleeding from the nose during the autumn of 1961 while receiving Zarontin and phenobarbital. A severe anemia (hemoglobin 5.1 Gm.), leukopenia (2480) with a pronounced granulocytopenia, and a severe thrombocytopenia were found.. Zarontin was discontinued. The patient received a blood transfusion, and a bon~ marrow aspiration on October 20, showed hyperplasia with increased erythropoiesis and many immature red cells. During the next two months he received seven blood transfusions and 25 mg. of prednisone daily and penicillin prophylactically. The thrombocytopenia and granulocytopenia persisted and on February. 2, 1962, a splenectomy was performed. During the following four months transfusions were not necessary, but the platelets and granulocytes re- mained low.After two transfusions the hemoglobin began to increase, reticulocy- PAGENO="0336" 1480 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY tosis developed, and there was a steady increase in the number of platelets and granulocytes. On February 11, 1963, the hemoglobin was 84 per cent, white blood cell count-58O0 with 30 per cent granulocytes, platelet count-208,000 and reticulocytes-5 per cent. He is still receiving steroid therapy and pheno- barbital. The enclosed copy is a revised package insert which will accompany the market package of Zarontin. The insert provides the latest essential informa- tion regarding precautions, side effects, pharmacology, indications, and dosage for the recomm~nded use of this anticonvulsant. We would appreciate the sub- mission of any report, at your earliest convenience, to the Company, of side effects or adverse reactions following the use of Zarontin. Sincerely yours, P. F. R. DR OAIRES, M.D., Director. DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, FOOD AND DRUG ADMINISTRATION, Washington, D.C., May 28, 1963. IMPORTANT-DRUG WARNING DEAR DOCTOR: New warnings are being required in the labeling of topical cortico-steroid preparatiOns for ophthalmic use. The warnings are sho~n in the attached memorandum prepared by our Bureau of Medicine. We have requested all manufacturers of Topical Corticosteroid Preparations and Steroid Antimicrobial Combinations intended for Ophthalmic use to include the warnings in labeling and advertising of these preparations. From time to time, the Food and Drug Administration, individually or in co- operation with professional or industry groups, will issue statements of important drug developments from the standpoint of new and serious adverse reactions, warnings, and contraindications. The envelopes and letters in such cases will generally be marked to show that they transmit such information; for example, with a statement such as Drug Warning. We will be glad `to have you report to us any adverse reactions associated with the use of any drug. These reports will be given the most careful consideration. Sincerely yours, GEO. P. LARRICK, Commissioner of' Food and Drugs. MAY 28, 1963. MEMORANDUM To : Geo. P. Larrick, Commissioner of Food and Drugs. From: Ralph G. Smith, M.D., Acting Director, Bureau of Medicine. Subject: Contraindication's and side Effects of Certain Optbalmic Preparations. Recent information gathered by the medical staff of the Food and Drug Ad- ministration with the assistance of `a number of outside medical experts show's a need to warn physicians of certain contrai.ndications to and side effects in the ophthalmic use of topical corticosteroid preparation's, including their combina- tions with `antimicrobial drugs. 1. The following are the "contraindications": a. acute herpes simplex, v'accinia, varicell'a, and most other viral disease's of the cornea `and conjunctiva; b. tuberculosis of the eye; c. fungal diseases of the eye; d. `acute purulent untrea'ted infections of the eye, which, like other dis- eases caused by microorganisms, may be masked or enhanced by the presence of the steroid. Purulent conjunctivitis `and purule'nt blepharitis are not mdi- cations, but contraindication's for topical steroid or `steroid-antibiotic com- binations. If conjunctivitis and blephtaritis are listed as indications, they should be qualified as non-purulent, not purulent. PAGENO="0337" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1481 2. The following are two important "side effects": a. extended use of topical steroid therapy may cause increased intra- ocular pressure in certain individuals. It is advisable that intraocular pres- sure be checked frequently; b. in those diseases causing thinning of the cornea, perforation has been known to occur with the use of topical steroids. All manufacturers of Topical Corticosteroid preparations and steroid antimicrobial combinations intended for ophthalmic use have been requested to revise the labeling and advertising of these preparations to include warnings concerning the above contraindications and side effects. AYERST LABORATORIES, New York, N.Y., May 3, 1963. IMPORANT-DRUG WARNING Dn.&R DOCTOR: During the past several years, there have appeared reports totalling approximately 12 cases of fatal liver necrosis following surgical pro- cedures performed under anesthesia technics of which "Fluothane" (Halothane) was a major component. It is interesting that a considerable proportion of these cases are accounted for by cholecystectomies. It has thus far not been possible to establish a clear cause and effect relation- ship between the liver necrosis and the anesthetic although studies are under way. Results from these studies will be presented as soon as they become available. Meanwhile the administration of "Fluothane" (Halothane) to patients with known liver or biliary tract disease is not recommended. Enclosed with this letter is a copy of the revised package insert and attention is drawn to the following statements: Adverse Reactions Fatal massive hepatic necrosis or cholestatic jaundice may occur follow- ing surgery performed under anesthesia of which Halothane in its usually safe concentration is a major component. Contraindications The administration of Halothane to patients with known liver biliary tract disease is not recommended. Halothane is not recommended for obstetrical anesthesia except when uterine relaxation is needed. Halothane is rarely indicated in operations for the removal of retained products of conception. The uterine relaxation obtained, unless carefully controlled, may fail to respond to orgot derivatives and oxytocic posterior pituitary extract. Halothane is primarily a uterine muscle relaxant, and its employment should be reserved for cases of external cephalic version and for those phases of operation during which intrauterine manipulation or the removal of the placonta demand greater ease of ac- cessibilty to the uterine cavity. Precautions Halothane may increase cerebrospinal fluid pressure. Thus, in patients with markedly raised intracranial pressure. Halothane administration must be preceded by measures which will effect a reduction in cerebrospinal fluid pressure. We will appreciate the submission to us or the Food and Drug Administration of any reports of adverse effects associated with the use of "Fluothane" (Halo- thane) in your own practice. - Assuring you that we shall keep you fully informed regarding future developments, I am sincerely, JOHN B. JEWELL, M.D. S1--280----C$-pt. 4--22 PAGENO="0338" 1482 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY DRUG WARNING IMPORTANT-FOR IMMEDIATE READING DOSAGE-PRECAUTIONS A1\ D CONTRAINDICATIONS IN CHOLECYSTOGRAPHY E-FOUGERA & Co., INC., Hicksvifle, N.Y., March 1963. DEAR DOCTOR: Recent reports have described the occurrence of certain severe side effects following the administration of more than 4.5 gm. of Orahilex (bunamiodyl sodium). Dosage recommendations and precautions have been revised as follows: 1. Repeat doses (that is, more than 4.5 gram) of Orabilex may be asso- ciated with the development of oliguria, renal tubular necrosis, and death. Use of other cholecystographic agents within one week after Orabilex ingestion may be dangerous and even fatal. 2. Orabilex is contraindicated in patients with a history of renal disease, or in the presence of any symptoms or signs suggestive of renal disease or dysfunction. Evaluation of renal function should be performed preparatory to the use of Oiabilex A revised package brochure is enclosed for your review The mechanism by which multiple doses of cholecystographic media may con- tribute to renal embarrassment is not known. Continuing clinical and laboratory investigations bearing on this problem are in progress We would appreciate the submission of reports of side effects or adverse reactions following the use of Orabilex or other cholecystographic media at your earliest convenience. Sincerely yours, F. J. SANEN, M.D., Medical Director. DRUG WARNING LETTER SANDOZ PHARMACEUTICALS, Ha~ivover, N.J., March 8, 1963. DEAR DOCTOR: In accordance with our desire to keep you up-to-date with the latest information on all our products, complete product information on Torecan is enclosed. The purpose of this letter is to draw your attention to certain modifications in indications and precautions which under FDA regulations are considered changes in labeling 7 or~ecan (thiethylperazrne) has been on the market as an antiemetic and antinauseant since September, 1961. In the course of its broader therapeutic application some aspects associated with its clinical use have emerged with greater clarity. In common with other phenothi.azines, Torecan may produce extrapyramidal stimulation (pseudo parkinsonism) with the varied symptom complex charac teristic of this complication. As this is more likely to occur in children and young women, Torecan is contraindicated in children under twelve years of age and in pregnancy. Extrapyramidal effects may be manifested as a dystonie reaction (e.g. tor- ticollis, dysphagia, oculogyric crisis, convulsion), akathisia or as pseudo- parkinson syndrome. When seen for the first time, such reactions may be mis- takenly diagnosed as tetanus hysteria encephalitis etc While the syndrome is self-limiting if therapy is stopped, the clinical course may be curtailed by the administration of sedatives, anti-parkinson agents or intravenous injection of ç~affeine and sodium benzoate. Diphenhydramine hydrochloride intravenously has also been reported to bring relief of these symptoms. When used as an antiemetic against vomiting induced by anesthesia, occasional instances of moderate hypotension have occurred within one-half hour of ad- ministration. This has also been reported with other phenothiazine-type antic- metics, but unlike other phenothiazines, no case of delayed hypotension has been reported with Torecan. Restlessness and postoperative depression have not been a serious problem, but the possible development of other known reactions to the phenothiazine-antie- metics must be borne in mind. PAGENO="0339" COMPETITIVE PROBLEMS IN TIlE DRUG INDUSTRY 1483 We will be most happy to answer any questions or comments that you may have on Torecan or any other of our drugs. Sincerely, CRAIG D. BURRELL, M.D., Director Medical ~S1ervices. GEIGY PHARMACEUTICALS, Yonkers, N.Y., No~vember 27, 1962. DEAR DOCTOR: The November 17, 1062 issue of the British Medical Journal car- ried a letter to the editor concerning a woman who had taken Preludin®, brand of pherimetrazine hydrochloride and who had been delivered of two children with severe congential defects of the left diaphragm. Although this internal defect bears no relation to phocomelia, the authors reviewed the patient's history of drug therapy during early pregnancy, and reported that she had taken Preludin between the fourth and twelfth weeks of pregnancy. We enclose a reproduction of the full publication. Apparently, the history of drug ingestion "on the advice of a friend" was obtained in retrospect years after the event. There is also no information concerning the nature of two earlier mis- carriages in the same patient. The recurrence of congential defects in repeated pregnancies of the same woman is well recognized. Butler and Claireaux (Lancet, March 31, 1962, pp. 659- 663, "Congential Diaphragmatic Hernia as a Cause of Perinatal Mortality") described this phenomenon and cite inherited factors and several common com- plications of pregnancy as possibly etiologic. Their description of pathologic find- ings closely parallels that reported in the British Medical Journal, and includes an instance of two infants with diaphragmatic hernia born to the same mother eight years apart. It is estimated that there have been over ten million patient months of therapy with Preludin in the United States. Approximately 85% of these patients were females, and about 5 to 10% of them had obtained their prescriptions from obste- tricians. We estimate that about 500,000 pregnant women received Preludin in the United States. There has been no evidence of a change in incidence of fatal diaphragmatic hernia as compared to the pre-Preludin era and we know of no other reports suggesting any type of congential problems in relation to Preludin. Accordingly, we believe that the position of Preludin in the treatment of obesity has not been altered by the recent publication in Dngland. In general, we can understand the view expressed in some medical circles that no drug should be employed during early pregnancy unless the physician feels there is a clear need for it. However, we see no reason why Preludin differs from literally hundreds of other comiponly used drugs in this respect. Only the physician can evaluate the dangers of obesity to the health of each individual patient, and match this with the therapeutic measures he deems advisable. Sincerely yours, HART B. VAN RIPER, M.D., Medical Director. G. D. SEARLE & Co., Chicago, Ill., Auç,'ust 7, 1962. IMPORTANT-DRUG CAUTION DEAR DOCTOR: We are addressing this letter to you in keeping with our policy of bringing to you all of the pertinent facts concerning our products and as a response to recent publicity dealing With the occurrence of thrombo~embolic phe~ nomena coincident with women receiving Enovid. Since its introduction there have been reported to us as of this date 28 cases of thrombo-embolic disease in the more than one million users of Enevid in the United States. Among these were 10 cases of pulmonary embolism, 5 of which were fatal. In addition, there are press rep'orts of 4 cases, including 1 death from the United Kingdom. In some of these one or more of the usually accepted inciting causes of throm- bophlebitis were evident; in some they were not. Reports to the manufacturer do not reflect the accurate incidence of reactions and the available statistics are not adequate to determine whether or not there is a causal relationship, but caution requires consideration of this possibility. PAGENO="0340" 1484 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY It must be remembered that pulmonary embolism can occur without discernible inciting cause and without preceding peripheral thrombophiebitis. Nevertheless, careful studies by investigators experienced in the measurement of the extremely complex factors involved in the clotting mechanism are continuing, including an evaluation of the role of fluid accumulation sometimes seen after Enoyid admin- istration. This will be reported in a technical bulletin at an early date. At the present time the available laboratory data neither prove nor disprove a causal relationship between Enovid administration and the occurrence of thrombo- phlebitis. The cases of thromphlebitis reported to us have usually occurred early in the course of Enovid administration and at the lower dosage level. Experience based on patients taking Enovid at higher doses has not demonstrated any dose re- sponse relationship. Physicians should be as alert to the possible occurrence of thrombophlebitis in patients to whom Enovid is prescribed as they are in patients taking other medication. The above facts should be given particular attention if Enovid is considered for administration to patients with thrombotic disease or a history of throm- phlebitis. We request that any thrombo-embolic occurrence in women receiving Envoid be reported to us and to the Food and Drug Administration. Sincerely yours, IRWIN C. WINTER, Ph. D., M.D., Vice President, Medical Affairs. THE WM. S. MERRELL Co., Cincinnati, Ohio, April 17, 1962. DEAR DOCTOR: This letter is to inform YOU of the Merrell decision to withdraw MER/29 (triparanol) from the market. We are today, with the cooperation of the Federal Food & Drug Administration, asking all hospital and retail phar- macies, as well as other possible outlets, to return immediately their total stock of this drug. This decision is based on additional reports of side effects of the kind reported to you in our letter of December 1, 1961, some of which have occurred at the usual dosage. It is recommended that you have your patients discontinue use of MER/29. As you probably know, Merrell has had and will continue to have an extensive research program in cardiovascular disease. MER/29 has been one important phase of this effort. The work on this compound by us and many others has made contributions to basic knowledge in this field. We would appreciate any data you may be able to furnish us concerning your own past experience with this drug. Such data are most useful when supplied in case history form. Sincerely yours, FRANK N. GETMAN. PFIZER LABORATORIES, New York, N.Y., March 1962. DEAR DOCTOR: Enclosed you will find a copy of the new Product Brochure for our multi-spectrum antibiotic, Signemycin. In October 1961, we informed you that studies were in progress to investigate reports of changes in tests of liver function in some patients treated with triacetyloleandomycin. Confirmatory studies have been concluded and the results have led to revi- sions which have been incorporated in the new Product Brochure. Sincerely yours, ROBERTS M. REES, M.D., Medical Director. THE UPJOHN Co., Kalamazoo, Mich., March 15, 1962. DRUG WITHDRAWAL-MONASE DEAR DOCTOR: In spite of extensive pre-marketing clinical and animal studies which indicated a wide margin of safety, an occasional patient has developed PAGENO="0341" COMPETITIVE PROBLEMS IN THE DRTJG~ INDUSTRY 1485 agranulocytosis in association with the administration of Monase Because of this unforeseen and nonpredictable occurrence The Upjohn Company in coop eration with the Federal Food and Drug Administration is withdrawing Monase from the market It has not been possible to establish definitely that Monase was the sole causa tive agent in every case since other drugs were sometimes administered con currently However in each instance Monase was the common factor We request that you instruct your patients to discontinue Monase Refund for returned tablets will be arranged through the dispensing pharmacist Very sincerely yours EARL L BURBIDGE M D THE WM S MIiRRELL Co Cincinnati, Ohio, February 21, 1962. I)EAR DOCTOR: On December 5th, 1961 we advised you of the possible relation- ship of congenital malformations observed abroad in offsprings of certain pa tients who had taken thalidomide (Kevadon in Canada) early in pregnancy. This letter is to summarize the current status There still is no positive proof of a causal relationship between the use of thalidomide during pregnancy and malformations in the newborn Reports are now appearing in the medical literature indicating only that thalidomide was employed in certain cases where malformation developed The research necessary to determine whether or not such malformation may indeed be related to the drug is continuing and because of the complexity of the problem will require con siderable time. It is encouraging to note that studies in pregnant rats have not shown a single malformation in more than 1 100 offsprings of thalidomide treated animals Additional surveys are under way to determine if there has been an increase in the incidence of malformations both in eo~ntries where thalidomide has been extensively employed as a sedative/hypnotic and in certain other countries where it is not marketed In view of the complexity of the problem and the time required to delineate the facts the contraindication stated in our December 5th letter is still necessary A new and fully descriptive brochure containing the contraindication to the use of Kevadon in women of child bearing age will reach you shortly Sincerely yours, JOHN N. P1iEMI, M.D., Medical Director. WYETH LABoRATonIES, Philadelphia Pa January 23 1962 NEW INFORMATION-TIiIACETYLOLEANDOMYOIN DEAR DOCTOR In October 1961 I informed you of the occurrence of jaundice and bepatic biochemical abnormalities resulting from the administration of triacetyloleandomycin administered in doses of one gram (1 Gm) per day for periods of two weeks and longer These observations have been confirmed by further studies and appropriate changes have now been incorporated in our directions for use of triacetylolean domycin Wyeth Cyclamycin® A copy of the revised directions for use is en closed for your study and reference Additional studies of triacetyloleandomycin Cyclamycin administered in doses of one gram (1 Gm ) per day for one week reveal no significant hepatic abnor mality and that the drug is safe for use by the recommended dosage schedule The effectiveness of triacetyloleartdomycjn Cyclamycin is such that prolonged therapy is seldom required in the treatment of most common susceptible infec tions for which it is recommended Sincerely yours GEORGE E FARRAR J~ M D Medical Director J B R0ERIG&Co New York N Y January 1962 DEAR DOCTOR We are pleased to report to you in the enclosed new prescrip tion information the current status of our antibiotic products TAO and TAOMID These revised brochures are based on extensive carefully controlled clinical PAGENO="0342" 1486 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY studies and provide you with complete prescription information for your guidance in the use of our TAO products in your practice As you may recall in October 1961 we advised the medical profession of two preliminary studies in which abnormal changes in liver function tests had been observed following the administration of TAO for 14 days or longer These observations have been confirmed by further studies and appropriate changes have now been incorporated in our directions for use of our TAO product The effectiveness of TAO is such that prolonged therapy is seldom required in the treatment of most common susceptible infections for which it is rec ommended. It is therefore concluded that you may continue to employ TAO in your practice with full confidence in the treatment of acute bacterial infection including cases due to staphylococci resistant to other antibiotics in accordance with the enclosed prescription information. Sincerely yours, JOHN L WATTERS M D Medical Director. THEWM S MERRELLCO Uincmnati Ohio December 5 1961 DRbG WARNING-KEVADON DEAR DOCTOR We have received information from abroad on the occurrence of congenital malformations in the offspring of a few mothers who had taken thalidomide (marketed in Canada as Kevadon) early in their pregnancies It is impossible at this time to determine whether, in fact, there is any causal relationship. However until definitive information is available to us as a precaution we are adding the following contraindication to the use of Kevadon Kevadon should not be administered to pregnant women nor to pre- menopausal women who may become pregnant. We are actively following this matter and you will be advised when it is finally determined whether or not this precautionary step was necessary Sincerely yours JOHN N. PREMI, M.D., Medical Director. THE WM. S. MERRELL Co., Cincinnati, Ohio, December 1, 1961. DRUG WARNING-MER/2 9 (TRIPARANOL) DEAR DOCTOR: In cooperation with the United States Food and Drug Ad- ministration we are writing to inform and caution you concerning adverse effects including some unpublished reports associated with the use of MER/29 (triparanol) Although comparatively few serious clinical injuries ha\ e been reported to date their possible significance is emphasized by findings fi om animal studies Cataracts. Four cases of cataracts in humans are reported in patients who have received MER/29 One of these cases occurred in a patient receiving the recommended dosage of 250 mg. of ME~R/29 daily. Cataracts and corneal opaci- ties have `also been produced with MER/29 in animals. `Slit lamp examinations are necessary for early detection of developing cataracts. For this reason ~uc'h examinations are indicated prior to and periodically during therapy Before this problem came to our attention approximately one thousand persons being treated with MER/29 were patients of ophthalmologists Most of th in ha\ e had careful eye examinations, including use of the slit lamp, before `and during drug therapy. Results on these patients will be reported to you as soon as they are available Hair Changes. There have been many cases of hair loss, either baldness or thinning of hair changes in hair color and texture and loss of body hair Su Ii hair change's may be related to the skin change discussed below as well as to the eye changes `dIscussed above. It is recommended `that ME~R/29 therapy be dis- continued promptly at the first evidence of hair or skin change~ `to minimiie progressive effects possible including eye injury PAGENO="0343" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1487 Ichthyosia and other skin changes. There are reports of skin reactions rang- ing from dryness, itching, and scaling to severe exfolint'ion, and ichthyosis. Some of these changes were also associated with hair loss and cataracts. It is recommended that MER/29 therapy be stopped immediately if such skin changes occur. Depression of Adrenocortica,l Function. Adrenocortical function depression as shown by reduced output of adrenal steroids has been produced by M~iR/29 in animals, and in man at high dosage levels. This effect has not been ruled out in humans at recommended dosage levels. Appropriate precautions should be ob- served if M~lR/29 is employed in patients with suspected borderline ad'reno- cortical function or in patients who are subjected to stress. Other Adverse Effecta. Other adverse clinical effects reported include 4 possible cases of leukopenia and scattered cases of abnormal liver function tests, im- potence, diminished libido, veginal smear alterations, nausea, vomiting and urine tesit changes simulating proteinuria. At a level of 25 mg/kg per day of MDR/29 deaths ba~e occurred in some dogs within 35 days, with liver damage in some animal's. It has caused abortion and prevented conception in rodents, diminished spermaitogenesis in dogs, stopped egg laying in chickens, and was assumed to cause acute intravascular hemolytic episodes in some dogs in one study. The side effects of all types reported to us to date total substantially less than one percent of the patients treated. This includes a number of patients who have been treated with MER/29 in clinical reseilrch studies for continuous periods of more than a year, including a few in excess of three years. In view of all reports concerning adverse effects, it is recommended that MER/29 be used only in patients who can be maintained under very close super- vision and frequent observation. Dosage should never exceed 250 mg. per day. Further studies are under way to assess more fully the incidence and serious- ness of adverse effects, with a view to a re-evaluation of the conditions and indications for use of MER/29. We will appreciate any information you may contribute from your clinical experience with MER/29. Sincerely, CARL A. BTJNDE, PH. D., M.D., Director of Medical Research. (Whereupon, at 4:20 p.m. the subcommittee was adjourned to re- convene at 10 a.m., Tuesday, November 28, 1967.) PAGENO="0344" PAGENO="0345" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY TUESDAY, NOVEMBER 28, 1967 U.S. SENATE, MONOPOLY STJBCOMMITrEE OP THE SELECT COMMITTEE ON SMALL BusINEss, Washington, D.C. The subcommittee met, pursuant to recess, at 10 :15 a.m. in room 318, Old Senate Office Building, Senator Gaylord P. Nei~on `(chairman of `the subcommittee) presiding. Present: Senators Nelson and Hatfield. Also present: Benjamin Gordon, staff economist; James H. Gross- man, minority counsel; Susan H. Hewman, research assistant; and William B. Cherkasky, legislative director, staff of Senator Nelson. Senator NELSON. The hearing of the Subcommittee on Monopoly will come to order. Our witness this morning is Dr. Helen B. Taussig. Dr. Taussig, the committee is very pleased that you have been willing to take the tinte to come here and testify this morning. You have a most distinguished record and I have `here your biographical background, which I will ask be printed in the record. (The biographical data referred to follows:) BI0GRAPHIOAL DATA-DR. HELEN BROOKE TAUssIG Born in Cambridge, Massachusetts: May 24, 1898. EDUCATION Radcliffe College, 1917-1919. University of California, 1919-1921: A.B. Special Course at Harvard, Fall of 1921. Boston University School of Medicine, 1922-1924 (One year research). Johns Hopkins University, School of Medicine, 1924-1927 : `M.D. Archibald Fellow in Medicine, 1927-1928. Interne in Pediatrics, 1928-1930. APPOINTMENTS Physician-in-Charge, Harriet Lane Home, Cardiac Clinic, Johns Hopkins Hospital, 1930-1963. Instructor, Pediatric Cardiology, Harriet Lane Home, `Cardiac Clinic, Johns Hopkins Hospital, 1930-1946. Associate Professor of Pediatrics, Johns Hopkins University, July 1, 1946-June 30, 1959. Professor of Pediatrics, Johns Hopkins University, July 1, 1959-July 1, 1963. Professor Emeritus of Pediatrics, Johns Hopkins University, July 1, 1963. Appointment to President Lyndon B. Johnson's Commission on Heart Disease, Cancer and Stroke, March 9, 1964. President-Elect, American Heart Association, October 1964-October 1965. Alternate United States Delegate to the XX Internation Conference of the Red Cross Meetings, Vienna, Austria, October 1-10, 1965. President of the American Heart Association, October 1965-October 1966. Chairman, Central Committee of the American Heart Association 1966- 1489 PAGENO="0346" 1490 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Member of the Board of the International Cardiology Foundation, representing the American Heart Association 1967- Honorary Chairman-Committee of Responsibility, 1967 (January) Concern- ing the war-burned, war-injured children of Vietnam. Mem~er Emeritus of the Board-Sub-Board of Pediatric Oardiology, April 25, 1967- Director-at-Large: American Heart Association, 1967-1970. Member of the United States Delegation-2Oth World Health Assembly, Confer- ence-Geneva, Switzerland, May, `1967. MEDICAL SOCIETIES Pediatric Research Society American Pediatric Society American Heart Association: Member of the Editorial Board of Circulation Vice-President, October 1960-1963. President Elect October 1964-1965 President, October1965-1966. Council Representative, Editoral Board of Supplements, American Heart Asso- ciation, July 1, 1963-1966. Maryland Rheumatic Fever Association Association of American Physicians Heait Association of Maryland President 1952-1954 Secretary 1959 American College of Physicians 1957 International Academy of Pathology Tetratological Society British Oardiac Society-Honorary Member Medical International Cooperation Medical Advisory Board Board of Trustees American College of Cardiology Awarded Honorary Fellowship 5/27/60 American Boaid of Pediatrics Membership on the Sub Board of Pediatric Cardiology. New York Academy of Sciences Member April 1962 New York Academy of Sciences, Fellowship, 1966. National Association of Standard Medical Vocabulary, March 1962. AWARDS Women's National Press Club Award, 1947. Chevalier Legion d'Honneur, 1947. Mead-Johnson Award, 1948. Passano Award, 1948. Feltrinelli Prize Awarded in Rome, Italy, 1954. Albert Lasker Award, October, 1954. Elizabeth Blackwell Citation, New York Infirmary, January, 1954. Award of Merit, American Heart Association, June, 1957. Eleanor Roosevelt Achievement Award, September, 1957. Award of Merit, Gairdner Foundation, Toronto, Canada, May-1959. Woman of Achievement Award, American Association of University Women, Denver Colorado June 24 1963 `1 homas Rr~ or Memorial Research Fellowship Award 1963-1968 First Award National Foundation Baltimore Maryland (June 26 1963) Gold Heart Award American Heart Association October 27 1963 Los Angeles California. Medal of Freedom~: Presented by-President of the United States of America- Lyndon B Johnson Monday September 14 1964 fhc Theodore and Susan Cummings Humanitarian Award February 20 1965 American College of Cardiology For generous sharing of knowledge with your Colleagues overseas, which created goodwill for our country". Spirit of Achievement Award The Women s Division of the Albert Einstein College of Medicine l~ew York City April 20 1966 John Phillips Memorial Award (Bronze Medal) American College of Physicians April 21 1966 Founders Award: Radeliffe College, Cambridge Massachusetts, June, 1966. PAGENO="0347" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1491 Myrtle Wreath Award: Hadassah, Women's Zionist Organization of Awerica, Inc. New York Hilton Hotel, December 14, 1986. Carl Ludwig-Medal of Honor-1967. Deutsche Gesellschaft Für Kreislauffor- schung, Received April 1967. William G. Kerckhoff-Institut, Bad Nauheim, Germany. Medal arid Plaque: Visiting Professor; "In Recognition of her outstanding con- tributions to the Field of Heart Disease. Presented at the Georgetown UnIver- sity Hospital. October 4, 1967. Washington, D.C. HONORARY SOCIETIES Pi Beta Kappa-University of California, 1921. Alpha Omega Alpha-Johns Hopkins University, School of Medicine, 1927. American Academy of Arts and Sciences. HONORARY DEGREES D. Sc., Boston University, School of Medicine, 1948 D. Sc., Goucher College, 1949. D. Sc., Woman's College of the University Qf North Carolina, 1950. LL. D., Hood College, 1950. D. Sc., Northwestern University, 1951. D. Sc., Columbia University, 1951. D. Sc., Women's Medical College of Pennsylvania, 1951. ID. Sc., Middlebury College, Middlebury, Vermont, 1952. D. Sc., Western College for Women, Oxford, Ohio, 153. D. Sc., University of Athens, Athens, Greece, 1956. D. Sc., Harvard University, 1959. D. Sc., Göttingen University, Göttingen, Germany 1960. Dr. Med.: University of Wien, Austria, 1965: Ceremonies of the 600th Anni. versary of the University of Wien. D. Sc., Randolph-Macon Woman's College, Lynchburg, Virginia, March 12, 166. D. Sc., Cedar Crest College, Allentown, Pennsylvania, May 166. Dr. Humanity: Oolby College, Waterville, Maine, June 1966. D. Sc., University of Massachusetts, Amherst, June 1966. D. Sc.: Jefferson Medical College and Medical Center, Philadelphia, Pennsylvania. Presented at the 143rd Commencement Exercises-June 2, 1967. Honorary Degree-Professor 1~meritus and Doctor of Medicine, University of Athens, Athens, Greece, November 1956. Honorary Medal: American College of Chest Physicians, May, 1953. Elonorary Member: Sociedad Venezolana IDe Cardiologia, 1957. President-Elect: American Heart AssocIation, October 1964-1965. President of the American Heart Association (First Woman President) October 1965-1966. Chairman of the Central Committee, American Heart Association, Oct. 1966-67. Director at Large, American Heart Association, October 24, 1967-1970. CONSUlTANT Pediatrician and Pediatrician OPD-Johns Hc~pkins University, School of Medicine. Consultant in Pediatric Cardiology to the Marine Hospital. I'ecUatric Consultant Staff of the Baltimore City Hospitals. Visiting Consultant In Medicine, Sinai Hospital. Consultant in Pediatric Cardiology-Greater Baltimore Medical Center. Senator NELSON. We note you were physician in charge of the Har- riett Lane Cardiac Clinic, Johns Hopkins Hospital, from 1930 to 1963; that you were appointed by President Johnson to the C'ommissioil on Heart Disease, Cancer, and `Stroke in March 1964; that you were president of the American Heart Association from October 1965 to October 1966; that you are a member of the Board of International Cardiology Foundation, representing the American Heart Association in 1967; and that you are director at large of the American Heart Association, 196~t to 19'TO. PAGENO="0348" 1492 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY I note a long list of very distinguished awards that you have received, as well as a long list of honorary degiees This biography will be pi inted in the record I think everybody knowledgeable about medicine and health mat- ters is familiar with your great and distinguished contribution to health and medicine in this country, and I suppose the contributions of which the public is most aware of are that you were the codeveloper of the blue baby operation, and that you are the one who alerted the med- ical profession in this country to the dangers of thahdomide. The committee appreciates very much your taking the time to come here to make your contribution to the hearings which this committee has been conducting now for several months. I would ask you if it is satisfactory with you that you proceed to read your statement, and if you have no objection, from time to time I would like to interject some questions, so that you may develop in greater detail some of the points you have made. Thank you, Do'~tor. STATEMENT OP DR HELEIi B TAUSSIG, PROFESSOR EMERITUS 0]? PEDIATRICS, JOHNS HOPKINS UNIVERSITY SCHOOL `OP MEDICINE, BALTIMORE, MD. Dr T ~ussio Thank you, Sen~tor Nelson It is a pleasure to be here today and I am glad to be of any help and service I can You have already explained to the people here who I am, so I don't believe that I need to repeat that. By way of introduction may I explain to you how I first hetrd about thalidomide One of my former fellow s, Dr Alois Beuren of West Germany had studied with Dr Bing and Dr Andrus and then studied with me for a year in the days when Congress permitted postdoctoral trainee fellowships of the National Institutes of Health to be granted to foreign doctors I emphasize this because although some foreign fellowships have been abused, some have brought us rich returns In a very real sense the same is true about trainee fellowships as is true of research fellowships. Just a `small percentage of research really pays off but that which pays off, p'ays off so well with such high divi- dends that it justifies all the other money w hich goes into research And I feel in a sense so it is in `traineeships. Only a few pay off with high returns both to their own country and to ours. The only difference between `the two is, virtually every doctor is a better doctor for having had an additional period of training So I think there is no lost money there Dr Beuren's training brought rich returns in Germany and here Thanks to an evening he spent at my house when he returned for a brief visit that I heard about thalidomide That evening he told me that the doctors in West Germany ~ ere seeing a great number of chil dren born with gross malformations of the extremities, little flippers instead of arms or legs, or no arms or no legs; and what was more, that Dr Lenz thought the malformation was caused by a sleeping tablet. I brought over with me some slides only hoping to remind you of how miserable the malformation i~ Here is a picture of my reprints I also have some pictures of these unfortunate children PAGENO="0349" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1493 Senator NELSON. We will accept those for the record, Dr. Taussig.1 Dr. TAUSSIG. Thank you. I would like to add right here that when you see a picture of a child with a little flipper of a hand arising from the shoulder, it may seem bad but when yOu see the child in life, it is infinitely worse because you have got a child that can't do anything, and that wants to do something and it can't. It was the next morning, after Dr. Beuren had been talking to me that I realized the full implication of the situation,. namely, the danger which might lurk in drugs if indeed it were true that a sleeping tablet did cause such a malformation. By then,Dr. Beuren had left for Ger- many so I wrote, airmail, asking if I would be welcome to investigate the situation. Dr. Beuren telephoned transatlantic "Yes" and 3 weeks later I landed in Hamburg and Dr. Beuren's chief, Dr. Joppish, loaned me their best resident to help with my travels. Two points must be clearly held in mind. I went to Germany because I realized that if true, the phenomenon had a deep, wide, and serious implication. Nevertheless, Dr. Frances Kelsey in the Food and Drug Administration was the person who refused to release thalidomide for sale in this country. Senator NELSON. Let me ask you, if I may at this point, Doctor, a couple of questions for the record. Clinical tests were conducted in this country in any event, weren't they? Dr. TAUssIG. Clinical tes't were conducted in this country and I think was the tremendous effort to obtain a rapid clinical test and wide dis- tribution of the drug that inflamed the country. It was themthe law of the land that clinical tests were allowed without the control of the FDA at all. It was only when the drug was released for sale that it came under the surveillance of the FDA. Senator NELSON. And there were some proven cases of deformities in this country as a consequence of the clinical testing, is that correct? Dr. TAUSSIG. Yes, I think so. I believe that lawsuit is still coming up in this country. There were some cases where it certainly was strongly indicated or known that the mother had taken Kevadon and had a malformed baby. There were other drugs which have been brought into this country which resulted in malformed babies. Senator NELSON. Who discovered this drug? Dr. TAusstG. The drug was developed by Chemie-Grünenthal, I heard stories that it had been developed by another company, and then thought it was not worth producing, and then that company denied doing it. Certainly Chemie-Grhnenthal in Germany developed and manufactured the drug and put it on sale in Germany in large quantities. Senator NELSON. I don't recall that you state this in your testimony, but do yOu know the date on which the drug was first used anywhere in the world? Dr. TAUSSIG. Well, let's not say anywhere, but first used widely in the world. I believe it was 1958. I have it in the article here and can check it in a moment, but it was either 1958 or 1959, and it was fairly widely sold by 1961, and the country was in trouble by 1961. I think 1958 was the first time they marketed the drug. 1 See supplemental information beginning at p. 1522, infra. PAGENO="0350" 1494 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Senator NELSON. What was the date that you went over to Germany to make your own investigation? Dr. TAUSSIG. February 1962. Senator NELSON. Had there been publicity in Germany about the adverse effects of the drug as of that time? Dr. TAussm. Yes, there had. I am coming to it again in my testi- mony, Senator. One of the striking things to me was that they had a serious epidemic. They had had very widespread publicity in Ger- many in November 1961, and scarcely a word of it reached our press over here. Senator NELSON. In November of 1961 there was widespread publicity? Dr. TAUSSIG. In Germany. Yes. Senator NELSON. Specifically naming this drug as the probab~Ie cause? Dr. TAUSSIG. Yes. This was 2 days after the drug was withdrawn from the market in Germany, and 4 days after it was publicly an- nounced at a pediatric meeting. First Dr. Lenz announced that he suspected a specific drug and he didn't mention the name. A number of doctors that evening said to him, "Just confidentially, will you tell me was it Contergan"-as it was known in Germany-"I asked because we had such a child and my wife took such a drug." And he said "Yes," and 2 days later at the meeting it was generally known that Contergan was suspected to cause the malformation. The drug was then withdrawn from the market, and the health department put on a tremendously wide newspaper, television, and radio publicity throughout Germany. It was barely picked up by the press over here. Senator NELSON. Then it was November 1961 when there was wide- spread publicity in Germany? Dr. TAUSSIG. Yes. Senator NELSON. When did the first widespread publicity occur in this country? It was after your trip, I take it? Dr. TAussifi. Yes, it was well after my trip. I 5UPI)O5~ that really Mr. Morton Mintz' article had given widespread publicity to it in July. I had spoken at medical meetings when I came back, and it was known in the medical profession by then, and I testified in Congress in May. I don't think the entire country was inflamed until the summer. Senator NELSON. And when was the article written by Mr. Morton Mintz printed in this country? Dr. TAU55IG. Mr. Mintz is right here and I can assure you, I have the date as July 15, 1962, in the Washington Post. Is that correct? Senator NELSON. About July 15, 1962? Dr. TAUSSIG. Yes. Senator NELSON. This is almost nine months after the widespread publicity in Germany; is that correct? Dr. TAUSSIG. Yes, that is right. Could I just read you a few dates here that I have? Senator NELSON. Yes, go ahead. Dr. TAUSSIG. My own investigation clinched the matter in my mind, and in Dr. Kelsey's mind. It is important to emphasize that the public ordinarily never hears about drugs which are not passed by the FDA. There isn't widespread publicity. It is just silently refused. Hence I PAGENO="0351" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1495 think the country might not have realized the potential danger of drugs, had I not gone to Germany. Now, this was in spite of the fact that 3,000 to 5~000 children were injured in West Germany. West Germany was wrought with anxiety and fear but we knew nothing about it, As I told you, Dr. Lenz first announced that he thought that thalid- omide might be the cause, and the drug was withdrawn from the market, and this was at the end of November 1961, and I was told that the publicity in Germany was tremendous. It was carried on the radio, the television, and the front page of virtually every ~newspaper in that country, and yet scarcely a word of it reached the American press. Senator NELSON. What about the professiohal journals in this coun- try? Were articles carried at that time? Dr. TAUSSIG. At that time, no. Time magazine was the only journal that I know that picked it up; they sent a man over to investigate and published a brief column on "The Nightmare of a Sleeping Tablet." That was in February 1962. I know people read it but I don't think the true significance of it made any impression on them. Senator NELSON. Do you have any explanation for the reason that the professional journals in this country didn't even carry articles about it? Dr. TALTSSIG. No, I don't. I believe they didn't realize what was going on in West Germany. I think the first professional report was the one I gave to the American College of Physicians in April 1962. I did give a report at the Johns Hopkins Hospital and at the Urn- versit.y of Maryland, when I first came back, immediately after my trip. I got back on the 1st of April, and I think it was about the 15th of April that I spoke in Philadelphia at the American College of Physicians, and that was carried in the press. Senator NELSON.. I take it, then, that even after the widespread pub- licity in Germany in 1961, the experimental clinical testing continued in this country for quite some time? Dr. TAtISSIG. Yes. I believe application for the sale of the drug in this country was not withdrawn until April 1962. Mr. GORDON. Was this before Mr. Mintz' article was printed or after the article? Dr. TAUSSIG. I believe that the company had tried to withdraw the drug distributed for clinical trial, but not a very tremendous effort to recall the samples, before Mr. Mintz' article. Senator NELSON. It was only being used in this country at that time in clinical tests? Dr. TAUSSIG. In clinical tests, and I am sure no more was given out, but the percentage of recall was not great. It wasn't recalled in Can- ada until the middle of the summer. It wasn't recalled in other coun- tries until after the outbreak of phocomelia had come to an end in Germany; that is, 8 months after the drug had been withdrawn and women had been warned not to take the drug. Senator NELSON. I had thought that in the scientific community there was a fairly rapid exchange of information around the world on matters such as this. Is there any reason to account for this situation? Dr. TATJSSIG. Well, as I say, I came back on the 1st of Apri]. I talked to the American College of Physicians in the middle of April. PAGENO="0352" 1496 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY I talked to the American Pediatric Society in the first week of May, and then I reported here to the Antitrust Subcommittee of the Judi- ciary Coramittee on Food and Drug Regulations on May 24, 1962 Senator NELSON That was the Kefauver committee at that time ~ Dr. TAUSSIG. Yes, that was the Kefauver committee or subcommit- tee. I must say when I first published or reported it, I was criticized by some of the people, saying that I was not a pharmacologist, I was a physiologist, and my response was I might not be either a physiologist or a pharmacologist, but if any of you had had a child with as severe malformation: as that, you would be trying to prevent it happening here. I don't think you had to be anything great but a humanitarian, per- haps, to be convinced of what was right in the situation. I published, or at least I sent in a short editorial, and was not very warmly received, and finally published my longer article on June 30, 1962, reporting my findings in Germany Mr GORDON Dr Taussig, which American company was seeking to m~rket thalidomide in this country ~ Dr TAiJSSTG William S Merrell Senator NELSON I see Now, a New Drug Application was apptr ent~y filed. Was it flied under the name of thalidomide or under a trade name of Kevadon? Dr TAUSSIG I believe it was filed under the trade name of Ke~ adomi It was, and I believe is, so far as I know, in countries the accepted procedure, that if a product is produced by one pharmaceutical com- pany, and they license another company to sell it, they give that corn p'iny the permission to select their own name, and have an independ ent name, and that means that every company that makes a drug puts it out under a different name. This makes it extremely difficult to trace the drug. Senator NELSON. Go ahead. Whereare you, exactly? Dr. TATJSSIG. I was saying that my scientific article was published on June 30, 1962, and I published one in the Scientific American in August 1962, but I do think it was Mr. Morton Mintz' article in the Washington Post in July 1962 that did more to inflame the country than any other s ngle `irticle, and I think that I can get the copy, I hoped to have a copy of his original article, to have it incorporated into the record.2 My purpose today is to reemphasize the danger that might lurk in drugs, and the difficulty that the lay people have in identifying drugs. As our drugs become more specific and more useful, they become more potent, and consequently there is greater danger of side effects. Furthermore, the late side effects are the hardest of all to detect. For example, if you take a pill and you immediately develop hives or you shortly thereafter develop nausea or vomiting or diarrhea, you readily connect the reaction you are having with the drug you have taken. If so, you certainly not only don't want to take it again, you want to know the name of the drug, but you also want to know what other preparations contain the same substance. In contrast to this, when you take a drug and everything is lovely afterwards, you take a sleeping tablet, and if you get the best sleep 2 See supplemental Information beginning at p. 1522, infra. PAGENO="0353" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1497 you have had for a long time, you have slept well and awake refreshed, it is fine. You may like to know what you have taken, but you are satis- fied with that particular pill, and as long as you can purchase it, all is well and good, and moreover, if you really get rehet, you care very little about the price. And I think that is an important point also. You continue to take the drug and other drugs, and then after a year or two you develop numbness and tingling in your hands an~l legs,, which we call polyneuritis. You can't sleep and you take more sleeping tablets. You take the best sleeping tablet you have had before, namely, the one you took some years ago, and it is quite a long time before you or your doctor realize that the nervous trouble you are suffering from is caused by the long continued use of this sleeping tablet, as other sleeping tablets have not been known to cause such trouble. Then the problem arises to know what other medicines contain that ingredient. It is particularly bad when you get a bad ingredient in something like a sleeping tablet, because sleep brings relief to many ills, and a great many conditions, perhaps a majority of illnesses, are helped by sleep. Thus,, if you have a headache or arthritis, a pill which relieves the pain, and when combined with one which will give you sleep, is very beneficial. The same is true of a gastrointestinal upset, or an attack of asthma, or a migrane headache. Alas, even the morning nausea of early pregnancy is relieved by a tranquilizer. Most sleeping tablets, when given in small doses act as tranquilizers. Hence thahdomide was combined with many other drugs, and each combination was given a new name. The drug was so good that the pharmaceutical right's for manufac- ture were sold to many other drug firms in many other countries, and as 1 tohi you, the accepted practice is that each firm which manufac- tures the drug has the permission to use a brand name of its own choosing. And so when the danger of thalidomide was recognized, it was found that the drug was masquerading under at least 50, if not 100 or more different names. I have given you a list in the appendix of the different names I verified as containing thalidomide.3 Mr. GORDON. Dr. Taussig, did any of these have the generic name on them? Dr. TAUSSIG. Not that I know of. I looked up most of these and I had to struggle to find out what company produced them, and then I had to write to the company and 1 asked them whether the drug con- tamed, thalidomide, if so how much, when was it marketed and when was it withdrawn, and it was only when I got a definite statement from `the company yes, it did contain thalidomide that I put them on this list. Senator NELSON. Did ail the companies respond to your inquiry? Dr. TAUSSIG. These that I listed here did. Some others I didn't get any response from. A few of them responded late. The preparations at the bottom which came from South-America, I didn't check. Earlier I had been told that the drug was not sold in South America, and then in August 1962, after the last, or virtually the last case had been seen in Germany-because it was 8 months from the time the woman took See p. 1521, infra. 81-280--OS-pt. 4-23 PAGENO="0354" 1498 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY the drug in the sensitive period, to the time the infant was born- a month after that, the end of the epidemic in Germany, they found that the drug was sold in South America under the seven different names listed here Senator NELSON And none of those drugs contained on the label the generic name of the drug ~ Dr. TAUSSIG. So far as I know, none. I did not see the bottle myself, but I understood that the health department went in and made a search for them and the amount, of Thalidomide they found in Sao Paulo was almost beyond belief, something like 96,000 kilograms of the pure substance. Senator NFLSON Go ahead, Doctor Dr. TAUSSIG. I gave the list of these. I have been told that this list is not complete at all, but it was as far as I was able to check on the amount, and it is enough certainly to illustrate the number of names under which it passed. It seemed incredible at first, to the medical profession, but it cer- tainly became evident that one tablet of 50 milligrams, which was less than one-half of what had been considered a full normal strength dose if taken at the critical time during pregnancy, could severely injure the fetus. The usual dose was 100 milligrams. The medicine was considered safe, so safe that man could not commit suicide by an overdose, and yet a dose of 50 milligrams could seriously injure the unborn child Indeed nine doses of 30 milligrams have been found to injure the fetus Moreover, I believe it is only one of the degradation products of Thalidomide that injures the fetus, and that product is only in the bloodstream for a short period of an hour or two and hence it doesn't seem probable that it has a cumulative effect, but rather that each successive dose injures the embryo at, a particular stage in fetal development. Thus the evidence is overwhelming that a single very minute dose, but certainly a very small dose of a toxic substance can be highly in jurious Of course, the embryo is tiny and only a minute amount of toxic material is required to injure it at a specific point Another thing, of course, we learned from thalidomide was that a chemical could have an entirely different effect on an embryo or a fetus than on a person after birth. Thalidomide reacted on the nervous tissue of the adult giving sleep, and it reacted on the mesenthymal tissue, the fOrerunner of bone and muscle, in the embryo. In addition, it is important to appreciate that the medical profession now recognizes that a number of conditions are late effects of earlier insults. When a late effect becomes manifest, that is the starting point for the investigation. In the case of thalidomide the starting point was the malformed infant, and the natural supposition was that something had injured the fetus durmg pregnancy Drugs are not the only thing which could cause such an injury. Some element in some detergents might, something you inhaled might, food preservatives might Indeed, such possible sources were investigated in Germany, but today we are discussing drugs. The problem is how to detect injurious reactions or side effects to the drugs, when they do occur. Clearly the more names the offending agent is distributed under, the more difficult is the problem of detection. It is PAGENO="0355" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1499 obvious that if you have an epidemic that is nationwide and an epi- demic is produced by a drug that is sold or distributed under a hundred different names, its detection becomes much more difficult. I shudder to think that if a drug were ever produced as a tranquilizer or as a good tonic or a drug claimed to increase virility, and it affected the sperm in such a manner as to injure the brain or even the repro- ductive organs of the fetus, h.ow difficult it would ever be to trace that drug, and how virtually impossible if the drug masqueraded under 500 different names. I don't think this is an impossibility, in truth I don't believe it is more improbable than landing a man on the moon seemed 30 years ago. Therefore, one of the helpful things we can certainly do, is to see that the generic name is on the label. Senator NELSON. In your article published July 11, 1963, in the New England Journal of Medicine, on page 93, you address yourself directly to this point. I want to read from that, and ask you a couple of ques- tions, because I think you have addressed yourself specifically and clearly to the issue that you raise here, as to the manufacture and dis- tribution of drugs, the same drug under a multiplicity of trade names, and the danger involved. In that article you said: The difficulty in detection of the production and sale of drugs containing thalidomide is illustrated by a report iti the Brazilian magazine, Ocruziero of September 6, 1962. The investigation was precipitated by the birth of a child with phocomelia. The magazine writer was told that thalidomide was not on sale in Brazil, but through his own inquiries he learned of 50 other infants born with phocomelia. Thereupon, he visited a pharmacy and purchased the drug under the name of Sedin. Later he found that Sedalls and Slip were also manu- factured in Sao Paulo and distributed in Brazil. Thereupon, the health authorities instituted an investigation. They found that thalidomide was sold under five different names, Sedin, Sedalis, Slip, Ondasil, and Verdil. MOreover, in a ten-day surprise search, they confiscated nearly .2,500,000 pills-or boxes of pills-46,000 flasks containing thalidomide and 96,000 kilo- grams of the pure substance in the pharmacies and pharmaceutical firms in Sao Paulo. This was in the summer of 1962. Dr. TAUSSIG. Yes. Senator NELSON (reading): Such events illustrate the importance of an international office of drug informa- tion that would notify the health authorities in all countries of the world when a drug was suspected of being dangerous. Although the drug has been withdrawn from the market, the danger is real that thalidomide, which has masqueraded under so many different names in so many parts of the world, will turn up again and again. Some pills, which were prescribed, in good faith by physicians are now tucked away in many a medicine closet, with only a prescription number and no name. The serious consequence of this well established custom of filling prescriptions by number is illustrated by one unfortunate woman who, because the bottle was unlabeled, unwittingly took Distaval during two successive pregnancies and has two children with phocomelia. There is a movement in England to change the law so that the pharmacist would be required to put the name of the drug on a prescription unless specifically requested by the physician to withhold it. Although there is no law in the United States regarding withholding the name of a medicine given by prescription the custom is firmly established `that prescriptions are filled by number and the name of the drug is withheld. This is a dangerous custom since it means that a large amount of unlabeled medicine is accumulated by everyone. There is danger not only that a medicine that has been withdrawn from the market may remain available but also that, when medicines are taken by mistake, especially by children, the doctor may be at a loss to know wha't has been taken. Although PAGENO="0356" 1500 COMPETITIVE PROBLEMS IN TEE DRUO INDuSTRY common sense calls for a change'in this custom a concerted effort by the medical profession will be necessary to effect such a change What method or organization would you suggest be established to provide this type information internaüonally ~ Di TATISSIG I am very happy to say that last May at the World Health Assembly they said they were attempting to set up some form of international, not necessarily monitoring but advisory system for reporting drugs and for distributing the information, especially warning of dangerous effects. I think the most one would hope to do ~ ould be to have an international authority notify health authorities in the v'irious countries that such and such a drug had `been found thngerous and had been withdrawn It is true of other drugs that have far less serious complications and I have heard from a number of my friends in India th'Lt they don't know of `these until they are finally published in journals, and the journals reach them, which is quite a lot later, or until travel and exchange of knowledge occurs I think World Health is working on thit particular problem, and I was very happy to hear that `they were Senator NELSON On the question of `putting the generic name on the prescription, as you state in your testimony, it is not the practice to do so in this country We have had testimony by distinguished physi cians `tnd pharmacologists that it is very important that the generic name be put on the label of the bottle that the paient gets, so that a doctor can check and will know at a su'bsequent date what is in the bottle You said that it will require a concerted effort, as you put it, by the medical profession, to effect such a change Do you have any opinion as to why the medical profession, through its major organizations, `has not `~lready done this, since it is so obviously in the public intei est2 Di TATJSSIG No, I don't, except that they are busy with many other things. It has been `such a firmly `established practice. I think that I said it will require .concentrated effort of the medical society only because of the feeling that it might be impossible to get a law through Congress, and `there are so many more important aspects to get into `the actual law `of t'he land. Probably it stems from deficiency in the teaching in pharm icology and medical schools and lack of `~p precia'tion Today if an M P writes the name of the drug and does not state specifically to have it written on the bottle, it does not appeir on the label. In former days, I think `two generations ago, people were not `taken into the confidence of the doctors quite as much, and the doctor thought the patients shouldn't know what they were taking But certainly in oui country today we are dealing with a sophisticated public, and in most instances the patients want to know what `they are t'iking, `md they have a right to know what they are taking It is only occasionally that there is some psydhiatric reason ~mhv you don't ~m ant to put a name on, and it could certainly be `dlowed, but if it were more generally accepted, I think it still would be a very wise thing I would be very strongly in favor of feeling that the generic name should be on every bottle of medicine that goes out Senator NELSON. As I understand your testimony; you feel that the generic name should appear on every bottle; except in" a specific case PAGENO="0357" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1501 where a physician may have a special reason for requesting that it not be done? Dr. TAUSSIG. Yes. I feel that if there really is good reason, he should have that right, and I think unless you were granted that there would be tremendous ~p'position, because of the few conditions where it is undesirable for the patient to know the name of the drug. Senator NELSON. This has beer~ precisely the same testimony that we have had from other distinguished authorities who have appeared before the committee, It still puzzles me why the AMA, the Academy of Gene~al Practice, or various professional organizations, have not taken a stand on this and advocated this kind of a practice, which is obviously in the public interest. Thus far we have heard no testimony to indicate that it would be contrary to the public interest. Dr. TAUSSIG. ii think it is in the public interest, and I think in fair- ness there are some physicians who specifically request it, but unless it is specifically requested when. they write it, custom and tradition is such that it does not get on, and occasionally it doesn't get on then. Senator NELSON. I might say we intend to take further testimony on this issue and hear all viewpoints. Dr. TAUSSIG. I would back you strongly in saying that we should have the generic name on the bottle, and I say the generic name, be- cause if it is produced under 50 different names,it is very hard to know whether you may not be changing to exactly the very same product you have had before. Senator NELSON. After we hear further testimony, I intend to have legislation drafted which will require what your testimony and the testimony of other witnesses advocates. I hope that at that time you and many other experts in the field appear in behalf of this kind of legislation. Dr. TATJSSIG. If I am here and able to, I certainly shall. Senator NELSON. Now, if there had been this legal requirement that the generic name of the drug be included on the label in the case of thalidomide, is it your judgment that some of these cases of phoco- melia would have been avoided? Dr. TAUSSIG. I would hope so. I think widespread use-I slay I would hope so, because we can't dictate what other countries are gomg to do. That is one of the difficulties, and a widespread variety of names occur in the sale of drugs in other countries as well as here. Now, I don't know much here-they actually take the others-or they try to produce a better or a somewhat better and slightly dif- ferent product in the various drug companies here, but it would then still have the basic principles on it, with the generic name on the bottle, so that you would know what it is. Senator NELSON. As you recite in your testimony, there were 50 to 100 different brand names of thalidomide on the market. Dr. TAUSSIG. Yes. Senator NELSON. In South America there were five when they didn't think there were any. My question is, if the practice all over the world was to include the generic name might we have avoided tragedy? Dr. TAUSSIG. If the practice was all over the world, yes; and even also if the people got suspicious and wished to know what they were taking when they bought drugs in other countres that they bring PAGENO="0358" 1 502 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY into our country or if even they knew in our country it would have helped with the people who brought in the drug, had they known that the drug was thalidomide Senator NELSON. I notice you said in your article in the New Eng- land Journal and/or in your testimony that thalidomide was used in combination with a number of other drugs, and that these prob ably are sitting on somebody's shelves around the ~ orid now Dr TAUSSIG I wouldn't be a bit surprised Senator NELSON And may still be used without any knowledge on the part of the individual that this dangerous .drug thalidomide is in the preparation? Dr. TAUSSIG. Yes. Senator NELSON. I ask that this very fine article by Dr. Taussig be printed in the record at the conclusion of her testimony Mr GORDON Dr Taussig, I would like to clarify one point here The chairman asked you in regard to the 50 infants, who were born with phocomelia in Brazil, whether some of these cases could have been avoided if the drug had been known by the generic name of thalidomide. I am not sure I understood the answer to his question. Dr. TAUSSIG. Yes. I think they definitely would, for the simple rea- son that a number of physicians, I don't say how many, but certainly the physicians that I talked with from South America were well aware that thalidomide was a dangerous drug, and that they were telling me that they were fortunate they did not have thalidomide in South America. Therefore, I think if they had known that they did have it, they would have warned people against taking it But they didn't recognize that there was any relation to thalidomide in the drugs they kid The names on the labels meant nothing to them Senator NELSON. As a matter of fact, you note in your article in the New England Journal, on page 93, that the Brazilian magazine Oc- ruziero had investigated the problem and the m'igazine writer was told that thalidomide was not on sale in Brazil, when in f'ict it was on s'ile, under five different trade names I)i `IATJSSTC Absolutely I think if they kid known that it w'ts on sale, they would have t iken action, `md I `mm quite sure the he'rlth de p'rrtment acted extremely promptly there when they found it out, but it just escaped them entirely Mr GORDON Given the potent drugs ~ hich are now being developed, is it your judgment that this type of a situ'ition could occur `ig'un ~ Dr TAussm Yes, it is As I hive s'iid, I don't think i~ e can get `mibsolute safety, it can't be guaranteed for any nei~ product or drug, but certainly major risks can be detected by careful testing I think we h'ive to know to prevent `is much as possible, `md further more testing in prim'mtes w'ms required to demonstrate cleirly that thalidomide did produce phocomeh i It i' `m question whether every drug can `be so t.ested, but nevertheless elementary precautions niust be taken Drugs c'mn and should be tested mm v iriety of `mnimals and a v'mriety of ages, for instance, for pregnant mothers, and the `i.~ed people who `ire known to re'mct differently to different drugs Although a drug may be tested and tried for a specific dise'mse in `m specific age group, and recommended foi such, if the drug i~ effective, See supplemental information beginning at p. 1522, infra. PAGENO="0359" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1503 almost invariably the use of the drug will be extended beyond its orig- inal purpose both by the medical profession and by the lay people who so glibly recommend drugs to their friends. They think they know a great deal better than doctors know what is good for their friends to take. Senator NELSON. In your article and/or your testimony, you refer to the fact that phocomelia did appear in tests using thalidomide at some stage in rabbits and in some other animals. From your checking in Germany, was there a failure here of proper testing of the drug to find this out? What kind of testing was done? Dr. TAUSSIG. Well, the German laws are very much more lax than ours. There is extr~mely little animal testing done. Of course, at that time it was not the type of reaction they were looking for. They had not thought of considering this. Really they felt it was a sleeping tablet, and when at first they tried it in animals and the drug didn't make any animals sleep, and so the company thought it must be something that will be good for epilepsy, and they sold it first as an anticonvulsant and word came back it was no good as an anticonvulsant, but it is a beautiful sleeping tablet for man; so then they sold it for that. Subsequently after the drug was suspected of causing phocomelia, it was massive doses in rabbits that finally produced the malformation. I think we learned a great deal about testing since then, and since then it has also been found that nonhuman primates do react very similarly to man, and that you can produce phocomelia in the rhesus monkey with doses relatively comparable to man, with extraordinary regularity if the drug is given at the right time. Of course, there remains the possibility that other drugs may cause other types of injury. Now we are beginning to recognize that as the organs are developing is the time that a drug will injure the organ. Once you have a good arm, you are not going to get a medicine that is going to injure the development of that arm. We haven't in the least answered the question of whether you can alter the metabolism of an organ, whether you can change the function of the liver or the pancreas by a drug given later in pregnancy or whether you can hurt the brain later in pregnancy, so that you can't say the only time you should test for drugs is during the first or early portion of pregnancy; it is only during early pregnancy that a drug is going to produce organ difficulties. It is a very, very complicated question. But a lot can be done by careful testing, to have indication of whether it is safe or not, and I am sure we will learn more. But with it all, we ought to have very careful records kept when it is first tried in man, because you can't ever say that `man always reacts even like the rhesus monkey. But you can keep very careful records and not have the widespread disaster. The later the untoward the reaction comes out, the more difficult it is to trace it to the drug. If you see it immediately after it is relatively easy; if you see it 9 months after pregnancy it is harder; if you saw it as the child reaches maturity, it would be very hard to trace back what had been taken. But if we can keep careful monitoring of this, it is going to help us a lot, and it ought to go a long way to prevent a widespread disaster. PAGENO="0360" 1504 COMPETITIVE PROBLEMS ~ IN THE DRUG INDUSTRY Senator HATFIELD. Dr. Taussig, according to my understanding, the I_TSP standards are more physical than biological Do I understand from your statement here about drugs that they can and should be tested on a variety of animals before use for the infants, the pregnant mother, and so forth? Does this recommendation of yours go beyond what are present USP standards? Dr TAUSSIG I don't know how specific the regulations are I think a number of doctors are woikmg on the problem, and I think the various standards would follow very quickly when the best methods and the best animals for trial are known There is a great deal of keen interest in trying to determine it today, which we have learned from sad experience is necessary, and until one really a~preciathd it, one hadn't started to study which was best J think with our present experience, a few preliminary things are clear If a drug is obviously bad for a variety of animals, it is probably bad for man If it doesn't hurt those, it should be tested more carefully Senator HATFIELD Do you feel then that there should be a more extensive and comprehensive testing than is presently used to establish lISP minimum standards ~ Dr TAussIc I think they are trying to do a pretty good job right now I think that the ideal, perhaps even the best, is really not known As I say, I think you have got to be fair to both sides, and to realize that drugs are tremendously valuable, and that you don't want to discourage all production of new drugs, but you certainly want to get all known dangers eliminated. Senator HATFIELD Let me ask you another question When you say that the drugs react differently upon different people, how do we get then to the so-called equivalency tests and other such problems in dealing with the generic or brand names ~ Dr. TAUSSIG. As to age groups, I think there is a general under- standing today in testing various drugs that are going to be used for children, on very young animals, and on newborn animals, that older people react differently, and it is only really after this that we have seriously taken into cOnsideration what is the effect on the fetus, and testing that. Of course, the danger may be something quite unexpected. For ex- ample, if it is so good as a sleeping tablet for older people, why is it not equally good for a younger person or for a pregnant woman Senator HATFIELD. Will drugs act differently on different people within the same age group? Dr. TAUSSIG. Well, some drugs. Of course, the sensitivity varies,. some drugs people find more effective than others. This is an individ- ual variation. Senator HATFIELD. But doesn't this then raise a problem as to deter- mining equiv~lency, efficacy, and all these other measurements of drugs? Dr TAUSSIG I thmk it raises a problem I don't believe it raises insurmountable problems, to know what is its reasonable probability One difficulty lay m the lack of regulation for a clinical test The doctor just gave a sample and the patient responds, yes, he had a good night's sleep; or, no, it didn't give him a good night's sleep, and that was considered as a trial and virtually no records were kept PAGENO="0361" COMPETITIV1~ PRO~t1~MS IN TIt~ `IiEUG' INDT~STRY 1505 Sen~tor HAT~IEth. Do you think the tSP should u~se, n~ore biologi- cal testing than what it dOes now to determine standards for theSe drugs? Do you feel that there is sufficient biological tests, as you advocate here, in using both animals and people to determine these minimum standards? Dr. TAussifi. Well, I think they are doing a good job now in the face of a difficult problem. I believe, that the recent evidence that has been brought forth by James Wilson that you can produce phocomelia in Rhesus monkeys is going to encourage testing in these higher animals. That is an expensive way of doing it, but, if it is going `to save untold lives, it is going to be less expensive in seeing that a dangerous drug gets on the market. It will be expensive for the drug companies, but, if that iS going, to be the means of safety, the public will want it. Gradually, I think, we are going to realize which drugs are likely to have more severe reactions, than we have today, In other words, I wouldn't like to put more in the Bureau of Standards until we are perfectly sure we are givi~ig the right lead and the right line. Senator N1~LsoN. Earlier in your testimony you referred to an article by Mr. Morton Mintz which appeared in the Washington Post on July 15, 1962, regarding thalidomide. You said you would furnish us with a copy. We have a copy of that article. Dr. TAusslo, Oh, fine. Senator NELSON.' And I would request that at the end of your testimony the article by Mr. Mintz be printed in the record. Go ahead, Doctor.~ Dr. TAUSSIG. Thank,you. Senator NELSON. I think you were on page 6. Dr. TAtrssIa. Yes, at the top. One of the basic simple elementary precautions is to have the generiè name on. every drug, and when the drug is a compound with the various preparations, each of the sub- stances should b~ clearly listed so that thelay~ person and ,the physician may have the opportuuity to know what the preparation contains. The question `has been raised as to'inactive ingredients. These too, might be listed, so that people who are allergic to `an inactive sub- stance could j~now it. It is a very difficult thing of bow much to list. You don't want to get so much on the label that uobody is going to read it. The most important thing is to know, I think, if they are allergic tq some inactive ingredient, that `that person probably knows it and would try to find out whether it was in all the pills that come in. Senator NEI~sow. flut you do advocate that the generic name of the active ingredients of any drug or drug combination be placed on the label of the prescription bottle that the patient himself gets? Dr. `UAUsSIG. Yes. Let's be fair to the drug companies because they have produced many valuable drugs. The wonder drugs of today have altered the face of medicine. Private enterprise and the competition which results therefrom has been and is a tremendous stimulus, and we want this to continue. Quite rightly if a pharmaceutical manufac- turer produces a superior product, they wish their name on the pro- duct. It could be either the name that catches the imagination or the name of the company. See p. i52~, infra. PAGENO="0362" 1506 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Some drugs are chemicals which are manufactured by the ton It seems doubtful that such drugs, for example, as aspirin, doriden or thahdomides vary in potency, but in these drugs competition keeps the price down. Senator Nelson. The competition keeps the price down? Dr. TAUSSIG. Yes. On the other hand, potency can vary in the preparation of antibio- tics, and probably in hormonal drugs and other synthetic preparations Minor variations in manufacture may make a major difference. I be- lieve in a very real sense the Food and Drug Administration can only demand certain standards. Under most circumstances where standards are set, I think most per sons or most manufacturers try to produce a superior product It mat ters not whether it is minimal standards for a nursing home, for the care of laboratory animals or for drugs. By and large the persons in- volved in working with them try to do a superior job, especially when superiority brings profits. It is highly desirable, and should be encouraged, therefore, to gether with the generic name the company's name should appear on the product The medical profession in turn should be encouraged to try the various products and try to determine which is most effective There is no fear that the drug companies will not encourage them to try the various products We need put no effort on that The doctors should imow which preparation he is using, but above all he should know the vai~ious ingredients in the preparation he is giving. It is for that reason I firmly believe that the generic name of the drug or a simplified generic name should be on the name of the bottle as well as the manufacturer's name Senator HATFIELD On the bottom of page 6, when you mention that the medical profession in turn should be encouraged to try the various products and try to determine which is most effective, are you speaking now within generic compounds and generic drugs ~ Dr TAUssIG Yes Senator HATFIELD Or as between brand names or what ~ Dr. TAUSSIG. I was speakin~' that if two companies produce products, for example, in antibiotics that are basically similar. There is variation in each. Of course, each drug firm. is trying to produce the best one Senator HATFIELD Yes Dr TAussIG That is true and we want them to try to produce it There is no question about that This is where we do get improvement in combination Senator HATFIELD So there may be differences here even within a generic compound, is that right ~ Dr TAUSSIG Yes, I believe so Senator HATFIELD As to the efficacy and potency ~ Dr. TAUSSIG. As to how it is finally produced. I think today we must meet basic minimum standards. Senator HATFIELD. So in the competitive world of brand names of various manufacturers, there is this goal that they are seeking? Dr. TAUSSIG. Yes. Senator HATFIELD. To be better than their competitor? PAGENO="0363" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1507 Dr. TAussIG. I think so. Senator HA~mELD. Even though they are dealing within the same generic relationship? Dr. TAU55IG. Either seeking to be better than their competitor or equally good and be able to price it lower. I think that is more like it, either one, but both of which- Senator HATFIELD. And there may be therapeutic differences here in the generic- Dr. TAussIe. Yes, I think there may. It is very hard to say. I also believe that the pharmaceutical firms would derive certain benefits in having the generic name of the drug on the bottles. For example, if the generic name was on the bottle, it would prevent a less scrupulous company from marketing a product which did not contain the essential ingredient and giving the product such a closely similar name that people b~lieve it is the same product. This again is more outside the country than in the country. For ex- ample, Softenon was the trade name given to thalidomide sold in Spain. I was totally unable to find out whether Softenil contained thalidomide. It was a question of which company and then getting them to answer. But they are so close that anyone might perhaps think they were taking the same product. In the same way the drug companies would derive another protec- tion by having the generic name on the label. Were such a procedure common, it would prevent the less scrupulous company from studying the formula, manufacturing the drug, and selling it under a differ- ent name. Although such a procedure is illegal, nevertheless this cer- tainly occurred in the case of thalidomide. It was outside this coun- try of course. Moreover, when this occurs it is only if the sale is of sufficient magnitude does it pay the original manufacturer of the drug to sue the other company. Our Food and Drug Administration I believe prevents the stealing of formulas on any wide scale in the United States, and of course the FDA has no control over what happens within a State, and it has no control of what happens outside the country. The FDA is concerned with interstate commerce. We cannot control drug manufacturers throughout the world, nor should we attempt to do so, but I do think we should keep our own house in order. And I think it helps to set a standard of what you hope others will follow suit in doing. Are there any further questions here before I turn to another subject? Senator NELSON. No, go ahead. Dr. TAussm. This brings me to another problem which I hope will be of vital concern to your committee; namely, the quality control of the drugs which are exported from the United States. My interest and concern in this problem was aroused last May in 1967 when President Johnson gave me the privilege to attend the World Health Organization Assembly in Geneva as an alternate delegate. One of the major subjects of discussion was the quality control of drugs. This subject had been under study by the World Health Orga- nization for several years, but little had been achieved. PAGENO="0364" 1508 COM~PETTTIVfi PROBLEMS IN THE DRUG INDUSTt~Y The official record of the World Health Organization, volume 157, the Executive Board of the 39th Session in Geneva, January 1967, on the quality control of pharmaceutical preparations: Having considered the report of the Director General on the quality control of pharmaceutical preparations, noting that this matter has been the subject of repeated discussion at previous sessions of the Executive Board and the World Health Assembly; Bearing in mind resolution WHA 18.36, which invited governments to take the necessary measures to subject pharmaceutical preparations, imported or locally manufactured, to adequate quality control; Recalling particularly resolution WHA 19.47, requesting the Director-General to continue his assistance to member states for the improvement of the quality control of pharmaceutical preparations, and for the establishment of quality control laboratories for national or regional purposes, as well as the establish- ment of general principles for the quality control of products entering into international commerce; Noting with concern that the requests of member states that drugs should not be exported without having been subject to the same quality control as those issued to the home market in the country of origin are not yet generally applied, and that in many cases pharmaceutical preparations are continuing to circulate with- out such control; Noting, however, with appreciation, that certain member states are pre- pared-~ And we are, too- to place their facilities for quality control at the disposal of other countries, upon request to W.H.O. or direct to the member states. 1. Considers that the formulation of generally accepted principles for quality control of pharmaceutical preparations entering international commerce and their adoption by all member states are desirable; and 2. Requests the Director-General: (i) to proceed with the formulation of such principles; (ii) to continue to assist member states in developing facilities for quality control of drugs they may have to import, or in securing access to facilities elsewhere; and (iii) to report `to the Twentieth World Health Assembly. Professor Gene opened the discussion saying- that the head of his delegation had referred, in the general discussion to quality control of pharmaceutical preparations M a question to which his delegation attached particular importance. The subject had been considered by the Health Assembly for many years. There was still inadequate control of preparations exported to the developing countries and on occasion out-of-date preparations were exported. Senator NELSON. I note from the Food and Drug Act that the only requirement that exists for the exportation of drugs from this country to foreign countries is that,- A food, drug, device or cosmetic intended for export shall not be deemed to be adulterated or misbranded under this Act if it, (1) accords to the specifications of the foreign purchaser, (2) is not in conflict with the laws of the country to which it is intended for export, and (3) is labeled on the outsIde with the shipping package to show that It is intended for export, but if such article is sold or offered for sale in domestic commerce, this subsection shall not exempt it from any of the provisions of this Act. Now my question is this: If the requirement is that a drug exported from this country "accords to the specifications of the foreign pur- chaser and is not in conflict with the laws of that country," it seems to me that your criticism is well directed, since there probably are no underdeveloped countries in the world which have laws on the matter or have the expertise or competence to develop the laws. Further, they PAGENO="0365" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1509 do not have the scientific personnel to set the standards and enforce the law in any way; is that not correct? Dr. TAu5SIG. I think that is the great, thii~ig. The drug impo$ing nations are on the whole the developing nations. The small nations do not begin to have the facilities to iiispect the drugs to see what they are getting or to set the standards for what they want. Senator NELSON. I think I can guess from you~' testimony what you would say, but let m~ put th~ question specifically. Do you see any reason why the laws of our own country under the Food and Drug Act should not set standards as high for the exportation of drugs to other countries as for the distribution and co~sumptio4. of dri~g~ in this country? Dr. TAUSSIG. I see no reason; I think it is a disgrace that we do' not. I think we should not sell drugs to foreio'n countries that we would not permit to be sold in our own country. ~ow that is all the developing mitions are asking, that they could be assured that they were of the same quality that is required in the exporting country. Senator NELSON. I want to say to you that the Chair agrees with you 100 percent that it is a disgrace that our law will permit us to sell drugs iii the international trade to foreign counti~ies that are not equipped to protect themselve~ of a quality not considered to be adequate for con- sumption in this country. The committee certainly appreciates that you have called this to our attention and the committee will address itself to that problem with some appropriate legislation if that seems to be the best way to deal with it. Dr. TAUSSIG. Thank you. I think that the rest of my testimony shows that the World Health Organization is not a police force, that they cannot dictate to our country what we can sell elsewhere. They can only hope to recommend, and it certainly has not come forcefully home to our country that we are selling drugs to foreign countries, not ob- serving the same standards for export that we require in this country. There is some feeling that the smaller countries should set their own standards, but I think that practically it is impossible, and that the testimony at the World Health Assembly showed that most countries thought it was asking more than could reasonably be expected from a small emerging country. Senator NELSON. The Chair would simply state that the Chair agrees with you that this country has a moral obligation to distribute in international trade drugs of equivalent quality to those we distrib- ute in our own domestic market. Dr. TAUSSIG. That is right. Senator HATFIELD. Dr. Taussig, what kind of a position does this kind of situation put the American representative on the World Health Organization in? Dr. TAUSSIG. Well, I think that everyone felt that it was an import- ant thing. Dr. Blood said that the U.S. Government would be glad to help other countries in testing their drugs or to help in setting up an international committee and that they were glad to put their consulta- tive technical assistance and their training facilities to use by the World Health Organization and to help any countries that they could. They did not feel that it was perhaps a problem to legislate. Senator HATFIELD. Do you not think that puts us in a rather hypo- critical posture though, if we are out trying to assist other countries PAGENO="0366" 1510 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY through the Peace Corps, through economic aid, and all these other things, and this kind of action is permitted? Dr. TAtrssm. And this kind of action comes in. Yes, I do. I think it is a very, very disgraceful thing. Senator HATFIELD. It tends to undo all the other work we try to do. Dr. TAussm. The FDA undertakes-I believe the new drugs are regulated, but not the antibiotics, and technically I think that if the pharmaceutical firms say this drug is potent at the time they are selling it, and then take off the expiration date-they do not have to put on an expiration dat&-by the tune the drug is shipped halfway around the world, and by the time it has been bought in quantity, and dispersed again it maybe a good deal later. The drug may have been potent at the time it left this country, but by the time it got distributed over there, it was no longer within the date. Senator HATFIELD. Is there a way for the manufacturer to an- ticipate the time of use? Dr. TAUSSIG. Well, all the antibiotics give you the date of expiration. Now the pharmaceutical firms will say, and I think it is true, that most of them are still potent quite a considerable period of time, but how long beyond is not known The last thing the developing nations want is to get a drug which is not a potent drug, and no country likes to have it said "It is good enough for your country but it is not for ours. We do not know if it is potent, but you can use it" Senator HATFIELD According to your answer to the question of the chairman, we are in effect permitting the marketing of a lesser stand- ard, lesser quality of drugs than we permit our own people in this country to use. Dr. TArssm. Yes, and that, I think, is wrong. And there is another point in that regard, that if you are considering legislation that I would like to bring to your attention, and it is the further problem, and I do not think it is in the least an insurmountable problem, that there are some pharmaceutical companies, and naturally we are in the group manufacturing and exporting, that manufacture some drugs for export that are not used in their own country, so that you do not have the same standard of quality control. Sir George Godber of England expressed the opinion that for drugs which were manufactured but not used in the producing country, it would `be possible to use standards that were used in another country that did both produce and use the drugs. And something to that effect or that some other regulations should come in is quite important. For example, we have very little leprosy, it is practically unknown here. The parasitic infections are a tremendous problem in many of the other countries of the world but scarcely one of concern to us. Nevertheless our drug companies are interested. Schistomiasis is a widely prevalent parasitic infection that is found in contaminated water and the drug firms are making a tremendous effort to find and sell some beneficial drug. The best product I was told has been developed by Ciba, which is partly a Swiss company, and of course we do not control that, it is a drug which is taken by mouth. It has been effective They had a clinical trial in Africa, and they said this is a fine drug PAGENO="0367" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1511 JaJ?an and the Philippines reported very serious reactions of hallu- cinations and even convulsions from taking the drug. There was a meeting of the New York Academy of Science discuss- ing it and these facts were brought out, and in the end the feeling of our scientists here was that it was not a drug that should be distributed as mass distribution out in the country, because under such circum- stance it could not be controlled. It was a good drug for use in the hospital. The drug companies, as I understand it, said well, it does not cause liver damage and the untoward reaction is not irreversible if the drug is stopped, we think it is safe for mass distribution. Our scientist did not agree. Now Parke-Davis has a drug that is a suppressant. I do not know that they will, but it is the natural thinking that the drug companies try and consider "Now can we produce a better drug that has this benefit but not this bad side effect? Well now, if they do, certainly that drug ought not to be sold mas- sively in that country, if we have not had some trial or supervision here, at least know that they have had a careful clinical trial there to know that it is safe before it is widely sold. I think we ought to have some regulation. If the drug is never goin to be used in this country, we should have some check of a controlle clinical trial before we give our approval for sale, or large scale, in foreign countries. I think you will see that this is a little different question than that which we consume in our country and then export and that which is merely made for export, and yet I think we should be honorable there and as careful as we reasonably can be, and certainly I would feel very badly if I `thought that we even could allow, permitted the drug com- pany to export a drug that had not been carefully tested, or reasonably carefully tested. I suppose, nothing is perfect. Senator NELSON. Do we allow a company to sell a drug overseas that has not been adequately tested `to met the FDA standards in this country? Dr. TAU5SIG. Well, I think that if the drug is not used in this country, it does not have to pass any FDA standards in this country, if it is not for sale in this country. Senator NELSON. I did not realize that. Dr. TAUSSIG. I think so. I think if it is not for sale in this country, just as much as within a State as I understand it, the company can produce anything. `They cannot produce a great deal that is not inter- state, and when it is interstate the FDA regulates and puts in its regulations. I think that is straight, that any small pharmaceutical firm can produce anything for sale within its State that does not pass the FDA. Senator HATFIELD. Mr. Chairman, Dr. Taussig, do we have any problems with imported drugs from other countries on this same basis? Dr. TAUS5IG. Well, I think the imported drugs from other countries, major ones, are imported and sold through some pharmaceutical firm to which they sell the rights. I think the FDA does not allow drugs to be sold interstate that have not passed regulations. Of course, that is where they were able to hold up thalidomide. And they wanted PAGENO="0368" 1512 COMPETITIVE PROBLEMS IN TIlE DRUG INDUSTRY to know if it was safe. It has been a very bitter bone of contention be- tween the pharmaceutical houses and the FDA. They say if it is all right in other countries why is it not sold in our country? Why is it not safe? Is that not a good enough clinical test? I think thalidomide showed.it was not a very good clinical test. Senator HATFIELD. In other words, a drug manufactured in country S cannot be imported into this country for direct distribution to a consumer? Dr. TAU55IG. I do not know. Senator HATFIELD. It has to be through a drug house, a pharma- ceutical house, which in turn comes under the control of FDA; is that correct? Dr. TAUssm. I would have to look up the law. I do not know whether drug manufacturers can sell directly over here. He must have some campany that represents him over here, and I think once he is represented here, I think so, but I would ask you to check that to be sure of the law in this problem~ Senator NELSON. You mentioned some time back the concern World Health Organization has expressed about the shipping of out-of-date drugs. Can you of your own knowledge give us any specific cases, and if not, does the World Health Organization have on file specific cases of drugs that were shipped out of our country which were out of date at the time of shipment, or because of the distance and the problem of distribution were out-of-date before they could be consumed in the receiving country? Dr. TAUSSIG. I do not know what the World Health Assembly or Organization has on file. I do know that it was repeatedly emphasized that a lot of the countries were receiving outdated or poor medications, and I do know that we are not the worst offenders, but I dislike to think we are or even could be offenders at all. As regards my own particular experience, I do know of a slightly different experience at the Hospital Amazonica Albert Schweitzer in Pucallpa, which is high in the Andes where Dr. Binder is taking care of a great many of the Indians. It is an extraordinary hospital, and again as most such hospitals is financed on extremely limited funds, and he requested his organization to help get some drugs. When I was there they were trying to `treat tuberculosis without any of the modern drugs at all. He told me that they had been sent a ship- ment of drugs which the drug houses had contributed, and that most of the antibiotics were out of date by the time they reached him. He said, he did not know whether the drugs were potent but they had a date but the expiration date had gone by, by the time that the drug actually reached him. When shipping drugs one should take into con- sideration the time required for the trip, plus clearing customs, let alone distributing it; in addition one does not use up all drug supplies in a couple of weeks or a month after it gets there, you hope that the drug supply is going to last some time. Dr. Binder could not possibly have offered the drug to other hospitals in the region because he did not want to offer to other hospitals drugs that he thought were bad and that he knew were out of date. Senator NELSON. How did he know they were out of date? Dr. TAUSSIG. Those had an expiration date on them, and the expira- tion date had gone by, by the time it had reached them. PAGENO="0369" COaW?1~TITIVE PROBLEMS IN THE DRUG INDUSTRy 1513 Senator NELSON. So this~was .a contribution from a drug house, but by the time he received it the expiration date had passed. Dr. TAUSSIG. It really was not much of a contribution by the time they received it. Moreover, he would have been very much more sus- picious had he got the next batch without any date on it. Senator NELSON. It would be interesting to find out whether it was a deductible expense also. Go ahead, Doctor. Dr. TAUSSIG. I think that mainly the rest of my testimony here was emphasizing that they did feel very strongly that quality control of drugs was needed and I mention on page 13 that I did not know the law regarding the export of steel, but that the U.S. Government or a manufacturer in the United States, if it sold steel of inferior quality and the building collapsed, I am sure the repercussions would be great and terrible. But unfortunately, when we. permit the sale of an anti- biotic which is no longer potent and people die in a far-off country where disease is rife and the mortality rate is already high, nothing is heard therefrom. Nevertheless, such a thing is possible and it is a dis- grace to the Nation. Not only is it morally wrong not to insure that the drugs that are exported are of the same quality that is required for home consumption, but I think our relations with other nations demand that disasters and deaths from the use of impotent and out- of-date preparations should not be permitted to occur and far less tolerated. Furthermore, if the richest country in the world does not care whether it exports pharmaceutical products that are substandard in quality, how can we expect other countries not to do the same. I do not think it is a matter that the World Health Organization should try to control. I think the responsibility rests in each country. I feel that we have a moral obligation to do so. Dr. Alan of Turkey said "only some of the producing countries and a minority of the importing countries are in a position to offer effective control. Accordingly, the majority of the population of the world are being treated by pharmaceutical preparations that have not been carefully controlled." The Russian delegation expressed the importance of it, especially in the developing countries, against the flood of preparations, many of them of inferior quality which are released in the market. One delegate said that the best solution would be for the countries. exporting pharmaceutical preparations to apply the same strict con- trol measures as they provided in preparations within their country, and I certainly hope that our national pride and our fundamental honesty demands that the Congress of the United States enacts such legislation to be the law of the land. Simply do unto others as we would be done by. I am really ashamed that we permit and even foster the dispensin of pharmaceutical products to other lands that are not permitte to be sold in this country. Senator NELsoN. Let me say again that the committee certainly appreciates your calling this to our attention. I certainly agree with you that our national pride and fundamental honesty demands that the U.S. Congress should enact legislation which would make it the 81-280-68-pt. 4-24 PAGENO="0370" 1514 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY law of the land that the drugs we export meet the same standards required of drugs to be distributed domestically. Dr. TAUsSIG. I will be happy to come and testify again.~ Senator N1~soN. We will draft some legislation to that effect and perhaps invite you back, if you are willing to come, to testify specifi- cally on this question. Dr. TAUSSIG. I shall be happy to come. Senator HATFIELD. Dr. Taussig, I wonder do you know whether or not the ability to control the quality of exported drugs would necessi- tate special or new legislation, or do you know whether the FDA could do this now under its present authority? Dr. TATJSSIG. I understand that it did not have authority to do it. Senator HATFIELD. It did not have authority. This would need specific legislation. Dr. TAussm. I think it would necessitate this. I think Mr. Gordon told me that they did not have the authority Mr. GouDoN. Mr. Chairman, I ask that some statistics on thalido- mide which were secured recently from the Food and Drug Adminis- ti `ition be inserted in the record it the appropriate place Senator NELSON. They will be inserted in the record. (The statistics referred t, follow:) (Excerpts-Hearings on Interagency Coordination in Drug Research and Regula- tion, Senate Subcommittee on Reorganization and International Organizations, Committee on Government Operations, August 1 and 9, 1962, 87th Cong., 2d Sess., Pt. 1, p. 249) THALIDOMIDE U.S. Statistics as of August 21, 1962: 1 Deformities caused by Kevidon in the U S 9 children were born with deformities definitely attributable to the drug; 5 cases of deformity in addition mere possibly related to the drug 2 Approximately 1267 physicians had Thalidomide to give to their patients on an experimental basis. 3. Approximately 19,822 people were given Thalidomide by these clinical in- vestigators. 4 Approximately 624 pregnant women were given Thalidomide 5. Prior to FDA decision to confiscate the drug, no reports on its effects had appeared in U. D. medical literature. Dr TAussifi That completes my testimony, thank you I believe you have the articles, at least two of them that are together, in the record. Senator NELSON Which two do you refer to ~ Dr TAussm The one in the New England Journal, and the cdi tonal on lesson of the effects of thalidomide Senator NELSON. Yes; we have your article on the New England Journal and the editorni `is well as Mr Mrntz's article Dr. TAUSSIG. I do not know whether you care to have my original article published in the AMA or not If so, you are welcome to it Sen'ttor NELSON Yes, do you h'ive a copy of that ~ Dr TAUSSIG I have a copy of that and I have a copy of the article that came out in the Scientific American only that it is written for lay consumption and is perhaps more comprehensible, but I do not think thei e is anything very technical in my article for the medical profes sion Senator NELSON. We would like to have each of those, and they will be inserted in the record in the appropriate place. PAGENO="0371" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1515 Dr. TAUSSIG. Thank you very much. Senator NELSON. I want to thank you very much, Dr. Taussig. Your testimony has been very helpful to the committee, and we appreciate your taking the time to come here. Dr. TAussIG. Thank you. Senator NELSON. Senator Hatfield, did you have any questions? Senator HATFIELD. I have no other questions. I note that you have inserted Mr. Mintz' article in the record. There are a number of other articles that I have seen, and it seems to me that they might all be made at some point appropriately a part of this record. Dr. TAussm. If you would like, I would be glad to send you a list and you can select what you wish. Senator NELSON. There have been some very fine articles onthalido- mide that are appropriate at this point, and if the minority and major- ity counsel could call them to our attention, we will insert them at the proper place in the record. And, Dr. Taussig, if you have any addi- tional articles relevant to the testimony you have given today that you think would be helpful to the committee, and valuable to the hearing record, we would appreciate your sending them to us. Dr. TAUSSIG. Thank you very much. I will be glad to. Senator NELSON. Thank you very much, Doctor. Dr. TAUSSIG. Thank you. (The prepared statement and supplemental information submitted by Dr. Taussig follow:) STATEMENT OF Da. HELEN B. TAUSSIG, PROFESSOR EMERITUS OF PEDIATRICS, JOHNS HOPKINS UNIVERSITY ScHooL OF MEDICINE I am Dr. Helen Taussig, Professor Emeritus of Pediatrics at the ~obns Hopkins University, and best known as co-developer with the late Dr. Alfred Blalock of the "Blue Baby" operation, and also known to this committee as the doctor who alerted the medical profession and the country to the dangers of thalidomide. By way of introduction may I explain to you how I first heard about thalid- omide. One of my former fellows, Dr. Alois Beuren of West Germany had studied with Dr. Bing and Dr. Andrus and then studied with me for a year in the days when Congress permitted post-doctoral trainee fellowships of the Na- tional Institutes of Health to be granted to foreign doctors. I emphasize this because although some foreign fellowships have been abused, others have brought rich returns. In a very real sense the same is true about trainee fellowships as is true of research fellowships. Just as only a small percentage of research pays off but that which pays off, pays off with such high dividends that it justifies all the other money which goes into research. So it is in traineeships. Only a few pay off with high returns both to their own country and to ours. The only difference between the two is that virtually every doctor is a better doctor for having had an additional period of training. Dr. Beuren's training brought rich returns in Germany and here. Thanks to his training in this country he was given the first Chair of Cardiology in Germany. Thanks to an evening he spent at my house when he returned for a brief visit that I heard about thalid- omide. That evening he told me that the doctors in West Germany were seeing a great number of children born with' gross malformations of the extremities, little flippers instead of arths or legs, or no arms or no legs; and what was more, that Dr. Lenz thought the malformation was caused by a sleeping tablet. It was the next morning before I realized the full implication of the situation, namely, the danger which might lurk in drugs if indeed it were true that a sleeping tablet did cause such a malformation. Dr. Beuren had left for Ger- many so I wrote, air mail, asking if I would be welcome to investigate the situa- tion? Dr. Beuren `telephoned transatlantic "yes" and three weeks later I landed in Hamburg and Dr. Beuren's Chief, Dr. Joppish, loaned me their best resident to help with my travels.. ` . . PAGENO="0372" 1516 COMPETITIVE PROBLEMS IN, THE DRUG INDUSTRY Two points must be clearly held in mind I went to Germany because I realized' that if true, the pheno;wenon had wide and serious implications. Nevertheless, Dr. Frances `Kelsey in the Food and Drug Administration was the person who refused to r~lea5e thalidomide' for sale In `this `country. She saved this country from untold tragedy. My investigation not only clinched the matter in her mind but ordinarily the public never hears of the drugs which are not passed by the Food and Drug Administration; hence this country might never have realized the potential danger in drugs had I not gone to Germany. In spite of the fact that three `to five thousand children were injured `in West Germany and the country was wrought with anxiety and fear, we knew nothing of it. When Dr. Lenz first announced that he thought that thalidomide might be the c'ause and the drug'was withdrawn from the market, I am,told the publicity in West Germany was tremendous. News was `carried on radio, television and the front page of virtually every newspaper in the country and yet the news scarcely reached the American press. Certainly our country was not disturbed., Time magazine picked it up, `sent a man over to investigate and published one brief column on "the nightmare of a sleeping tablet." (February, 1962). Some persons read the report but the true significance was not appreciated at that time. After my trip to West Germany, I reported my findings to the American College of Physicians. in April, 1962 and to the American Pediatric Society in May, 1962, and on May 24, 1962, I testified before the Antitrust Sub-Oormnittee of the Judiciary Committee on ll.R. 6245. The Journal of the American Medical Association, issue of June 30, 1962, carried my first medical article on the subject and the Scientific American published my lay article in Augus't, 1962. Nevertheless, Morton Mintz' article in the Washington Post, on July 15, 1962, `did more to inflame the country than any other single article. I have a copy of his article; will you kindly incorporate it into the record at the appropriate place? The major purpose of my testimony today is to re-e'mphasize the danger that may lurk in drugs and the difficulty which the lay public has in identifying' a drug. As drugs become more specific and thus more useful, they become more potent and consequently the `danger of side-effects increases. Furthermore, the late side-effects are the `hardest of all to' detect. If you take a pill and you imme- diately develop hives or you shortly thereafter develop nausea and vomiting, or' diarrhea, you readily connect the reaction with the drug. If so, you certainly want not only to know the name of the drug but also what othe'r preparations contain `the same substance. In contrast to this, when you take a drug and' everything is lovely afterwards, as with a sleeping tablet and you've slept well and awake refres'h'ed, it is fine. You may well like to know what you have taken. Nevertheless, that particular pill satisfies you. As l'ong as you can purchase it, all is well and good. Moreover, if you get the relief you need you care little' about the price (a point to which I shall return). You continue to take the drug and `other drugs too, and after a year or two you develop polyneuriti's, that is, numbness and tingling in your han'ds and feet. You cannot sleep and you take more sleeping tablets, and you take the `best sleeping tablets you have ever had, namely, the same one you took a year or so~ ago. It is a long time before you or your doctor realize `that the nervo'us trouble you are suffering from is caused by the long continue'd use of that sleeping' tablet. Then the problem arises to kn'ow what other medicines contain that ingredient. Sleep brings relief to many ills. A great many conditio'ns, perhaps the majority of illnesses, are helped by sleep. Thus, if you `have a headache' or arthritis, a pill whic'h relieves the pain, and when combined with one which will give you sleep, is very `beneficial. The same i's true of a gastro4ntestinal upset, of an asthmatic attack or a migraine headache. Alas, even the morning: nausea of early pregnancy is relieved by a tranquilizer. Most sleeping tablets given in small doses act as tranquilizers. Hence, thalidomide was combined with many `other drugs and each combination was given a new name! The drug was so good that the pharmaceutical `rights for manufacture were sold to `drug firms' in many other countries and the accepted practice is that each firm which manu- factures the d'rug has permission to use a `brand name of its own choosing. So~ when the danger of `thalidomide wa's recognized it was found that the drug was masquerading under at least 50, if n'ot 100 or more, different names. Appendix I gives a list of names which I have verified as containing thalidomide. I was told by one o'f the leading European pediatricians that the list is far from complete. Incredible though it Initially seemed, it became evident that one pill of 50 mgm which was less than one-half of what had been considered full strength and PAGENO="0373" COMPETITIVE PilOBLEMS IN'~PIf~ `DIlU~ `INDTJ~TEY 1517 entirely safe, if taken at the critical tithe thiring~pregnan'cy could sever~ely injure the fetus. The usual adult dose wa~ 100 `mgm. Th~ medielneWas' cOnsidered safe, so safe that man could not commit sui'ctde by overdose, yet one `dose of /50 mgm. could cause a serious malfOrmation In the unborn child. Indeed, nine doses of' 30 mgm. have been known to injure the fetus seriOusly. MoreOver, I believe that only one of the degredation products of thalidomide injures the fetus and that product is only in the blood stream for an hour or two. Hence it is not a cunlu- lative effect but rather it would appear that each of the nine doses of 3~ mgm. injured the embryo at a p~trticu1ar stage lii fetal development and' the result was a severely damaged child (no arms or legs),. The' evidence is overwhelming that a `single minute dose' of a toxic substance can be highly injurious. The embryo is tiny and only a minute amount of a toxic material is required to Injure it at a specific pOint. Another thing learned from thalidomide was that a chemical may have an entirely different effect on an embryo or a fetus than `on a person after birth. Thalidomide was found to react with `mesënchymal tissue (the fore- runner of muscle and bone) in the embryo and on nervous tissue Of the adult. In addition it is extremely important to appreciate that the medical profession now recognizes that a number of conditions are the late effects from an earlier insult. When the late result becomes manifest that is the starting point for' the investigation. In the case of thalidomide the starting point was the malformed infant. The natural supposition was that something had injured the fetus during pregnancy. Drugs may `not be thO only thing which could cause injury, some element in detergents might, some food preservative might, air `pollution might. Indeed such possible sources' were investigated in Germany. Today we are dis-, cussing drugs and how best to have drugs both as potent as possible and' as safe as possible. The problem is how to detect the injurious reaction or side effect to the drug when they do occur. Clearly the more names the, offending agent is distributed under, the more difficult is `the problem of detection. The' difficulty in the detection of a drug sold under trade names iS illustrated by `the fact that not until August 1962 was it discovered that thalidomide was ~ol'd under five different names. Moreover, a surprise search by the health authorities resulted in the confiscation of two and one-half million' pills (or boxes of pills), 46,000 flasks containing thalidomide, and 96,000 kilograms of the pure substance in Sao Paulo. Thus, it is obvious to everyone that If an epidemic is' nationwide or worldwide and the casue of the epidemic' lies in the product which is sold or distributed under 100 different names, the detection and recognition of that product is extremely difficult. T shudder to think that if a drug was ever produced which was a tranquilizer, a good tonic, or a drug claimed to increase virility' and it affected the sperm In such a manner as to injure the brain or even the reproductive `organs of the fetus, how difficult it would be to trace that drug and how virtually impossible if the drug'masqueraded under `500 different names! This is not an impossibility nor in truth is it more improbable than landing a man on the moon seemed thirty years ago. Hence, the value of having the generic name on the label seems incontrovertible. Absolute `safety cannot be guaranteed for any new product `or drug. The major risks can `be detected by careful testing. Furthermore, testing in primates was required to demonstrate clearly `that thalidomide produced phocomelia~ Perhaps every drug cannot be so tested but, nevertheless, elementary precautions can be taken. Drugs can and `should be tested on a variety of animals and `a variety of, ages, for infants, the pregnant mother, and the aged are known `to react differ- ently to drugs. Although a drug may be tested an'd' triOd for a specific disease in a specific age group, if the di~ug is effective, almost inevitably `the'use of the ~tüg will be extended beyond Its original purpose `both by~.t1~O medical profession and by lay people who so gibly take a drug recommended by a frie'nd. Again, one basic simple elementary preeautlo~ i's to hate the gOn~rlc name oh every drug and when the drug i's a compound of varioñs preparations it should have each of the substances oZear~y listed so that the lay perSon and the physician may have the `opportunity to know what the preparation contains. The inactive ingredients, too, should be listed `as some people may be `allergiC `to the ipactive ingredient, `but they should not be listed `as conspicuously a's the active ingredi- ents. Now let us be fair to the drug companieS for they have produced ma~iy valuable drugs. The wonder drugs of today have altered the face `of medicine. Private enterprise and the competition wh'ich results therefrom has been and Is a tre- mendous `stimulus. We want progress to continue. Quite rightly, if a pbarmaee~ti- cal manufacturer produces a superior product they wish their name on the prod- uct. It could be either a name that catches the imagination or it could be the PAGENO="0374" 1518 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY name of the company. Some drugs and chemicals are manufactured by the ton. It seems doubtful that such drugs as for example-aspirin doriden or thali doniide vary in potency but In these competition keeps the price down On the other hand potency can vary in the preparation of antibiotics and probably in hormonal drugs and other synthetic preparations. Minor variations on manufac- ture may make a major difference. I believe in a very real sense the Food and Drug Administration can only demand a certain standard. Under most circum- stances where standards are set, most persons or manufacturers try to produce a superior product. It matters not whether it is minimal standards for a nursing home, for the care of laboratory animals, or for drugs. By and large the persons involved try to do a superior job especially where superiority brings profits In the competitive world the pharmaceutical firms try to produce stiperior products This is highly desirable and should be encouraged and therefore together with the generic name, the company's name should appear on the product. The medi- cal profession in turn should be encouraged to try the various products and try to determine which is most effective The doctor should know which preparation he is using but above all he should know the various ingredients of the prepara tion he is giving. Therefore I firmly believe that not only the generic name of the drug (or a simplified generic name) should appear on every bottle but also the manufacturer's name. The pharmaceutical firms would, I believe, derive certain benefits by having the generic name of the drug on the bottle For example if the generic name was on the bottle it would prevent a less scrupulous company from marketing a product which did not contain the essential ingredient and giving the product such a closely similar name that people believe it is the same product. For example Eioftenon was the trade name under which thalidomide was sold in Spain. I was unable to find out whether or not Fioftenil contained thalidomide. The ~harmaceutical firms would also derive another protection by having the generic name on the label. Were such a procedure common practice, it would prevent the less scrupulous companies from studying the formula manufacturing the drug and selling it under a different name Although such a procedure is illegal, nevertheless, this occurred in the case of thalidomide. Moreover, only if the sale is of sufficient magnitude does it pay the original manufacturer of the drug to sue the other company. Our Food and Drug Administration regulations, I believe prevent the stealing of a formula on any wide scale in the United States but the F D A has no control over what happens within a state and sup port your local product" i's a common slogan. We cannot control drug manufacturers throughout the world nor should we attempt to do so, but we can and should keep our own house in order. This brings me to another problem which ~hould be of vital concern to your committee, namely, the quality control of the drugs which are exported from the United States My interest and concern in this problem was aroused last May (1967) when President Johnson gave me the privilege to attend the World Health Organization in Geneva as an Alternate Delegate One of the major si~bjects of discussion ~s as the quality control of drugs This ~sub}ect had been under study by the World. Health Organization for several years but little had been achieved The Official Record of the ~ orid Health Organization Volume 157 Executive Board report of the 39th `Session in Geneva 17-27 January 1967 (E'B 39 R8) on the Quality Control of Pharmaceutical `Preparations Having considered the report of the Director General on the quality control of pharmaceutical `preparations Noting that this matter has been the snbject of repeated discussion at pre vious seusions of the E~recutive Board and the World Health Assembly Bearing in mind resolution WHA 1836 whwlv i,ivvsted governments to take the necessary measures to subject pharmaceutical preparations, imported or locally manufactured, to adequate quality control: Recalling particularly resolution WHA 1947 requesting the Director General to continue his assistance to Member States for the im'provement of the quality control of pharmaceutical preparations, and for the establishment of quality control laboratories for national or regional purposes as well as the establish ment of general principles for the quality control of products entering into inter national commerce. Noting with concern that the requests of Member $tatcs that drugs should not be e~rported without having been subject to the same quality control as those issued to the sa~ne market in the country of origin are not yet generally applied and that in many cases pharmaceutical preparations~ are continuing to circulate without such control; PAGENO="0375" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1519 "Noting, however, with apprehension, that certain Member States are prepared to place their facilities for quality control at the di~posal of other countries, upon `request to W.H.O. or direct to the Member States. "1. Considers that the formulation of generally accepted principles for quality control of pharmaceutical preparations entering international commerce and their adoption by all Member States are desirable: and "2. Requests the Director-General: "(i) to proceed with the formulation of such principles. "(ii) to continue to assist Member States in developing facilities for quality control of drugs they may have to import, or in securing access to facilities else- where; and "(iii) to report to the Twentieth World Health Assembly." Professor Gene (Yugoslaitla) opened the discussion (quoted from page 2- A20/P&B/SR/8. and recalled "that the head of his delegation bad referred, in the general discussion to quality control of pharmaceutical preparations as a question to which his delegation attached particular importance. The subject had been considered by the Health Assembly for many years. There was still inadequate `control of preparations &rported to the developing countries and on occasion ov~t-of-date preparations were e~vported. It was apparent, accordingly, that the problem was a grave and `complex one. The time bad come for energetic, albeit, cautious action by the international community with a view to arriving at some solution." The problem is grave and complex as the quality control of drugs concerns the identification of the product, the purity, the sterility, and also the importance of the study of toxic effects, and in addition, the process of packaging and labelling. An ideal solution may be difficult to arriVe at and virtually impossible for the World Health Organization to control the manufacturing process in the various nations. Nevertheless, a few broad facts emerged: First, that the nations of the world were divided into three groups, those who manufacture drugs but did not export them; second, those who manufacture and export drugs; and third, those who do not manufacture and only import drugs. More- over, the repeated plea from the developing nations, which by and large are the drug importing nations, was that the same level of quality should be required for the drug which was exported as for those destined for home consumption. Dr. Otolorin of Nigeria, stated that the countries importing pharmaceuticals required something positive to be done to protect these countries from mal- practice. He said that he, like the Delegate from Norway, was taken. aback by the statement: "At the 19th World Health Assembly a suggestion was discussed for a system of certification to be evolved for drugs to be exported in order to ensure that they were subjected to the same quality control as applied to drugs for consumption in the exporting country. It was concluded that such a system did not appear feasible". Such a regulation may not be feasible for the World Health Organization to enforce but surely no more reasonable request was ever voiced by importing nations than that the drugs which were e~oported to them should be subject to the same measures of control as these drugs were for home consumption. Not only the Delegate from Nigeria voiced this request but also the Delegates from Senegal and from Spain. This was the repeated plea from the developing nations of the world. The World Health Organization is not a police force and therefore such a regulation does not apj~iear fea~ible for W.H.O. to enforce. Therefore, W,H.O. turned its attention to trying to set up a mechanism to help the importing nations test for the quality of drugs they import. Furthermore, our government has offered to aid the drug importing nations in testing the quality control of the drugs they import. I quote from Dr. Blood's r~eport (of U.S~P.H.) in which he reiterated "that wider national and inter- national control of pharmaceutical products continue to be a matter of very great concern to our country. His government (i.e., the United States Govern- ment) had been and would continue to be ready to provide consultative tech- nical assistance and training facilities to W.H.O. or any of its Member States in developing international standards and national codes for control, inanu- facture, processing, packaging or marketing of drugs. It was also prepared to provide certain testing services if some practical international system could be developed under the aegis of W.H.O.". I am glad that the United States Government, through the U.S.P.H.S. has offered to help the drug importing nations to test their drugs. This approach to the problem is, however, unrealistic. The plain truth Is that the countries which are too small to manufacture drugs or which have so recently emerged PAGENO="0376" 1520 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY that they are unable to produce drugs, are not in a position to afford the elaborate laboratories necessary to test drugs. Dr. Aujoulat of France stated "one of the most important difficulties facing the Organization in its aim to control the quality of pharmaceutical products was that of the creation of laboratories at the level of each. country-it would be difficult for many countries. . . . He believed that countrieS with populations of less than two million should give up the idea, for the present, of having their own laboratories or industries". Dr. Alan of Turkey stated that "the su~ject of quality control of pharmaceutical preparations had appeared on the agenda of the Health Assembly for many years and was likely to do so for many more. As the situation stood at the present, only some producing countries and the minority of importing countries were in a position to effect quality control. Accordingly, the majority of the world population was bein~j treated with pharmaceutical preparations which had not been full controlled". Dr. Commissiong (of Trinidad and Tobago) pointed out that "the Director- General's report was evidence that something was being done in a very vexed area." He thanked the delegate of Norway for his contribution and had some points to add, namely, "The cost of adequate control procedures and laboratories was the same for small countries and large countries, and was outside the scope of small countries. His country depended on aid from outside for supplies of drugs. Standards in his country were based on whether the product was suitable for use in the exporting, country". - "To hear of the `double standard' used by some manufacturers was very distressing. The establishment of regional laboratories would assist greatly. Countries producing drugs should be responsible for the standards of drugs they exported. It was a moral obligation not to capitalize on the deficiencies of others". Dr. Commissiong is right, the drug exporting nations have a moral obligation not to capitalize on the weakness of other countries. Each nation should assume responsibility for the standard of the drugs they export. Our present laws require that all new drugs which are exported meet the same standards as those which we consume in our country. I am ashamed that the United States belongs to the group of nations which may on occasion export out-of-date preparations. No law exists to require antibiotic preparations so urgently needed in so many countries to meet the standards required in our country. The consequence is that manufacturers are permitted to ship out-of-date antibiotics and, I believe, with no expiration date on the bottle. Many phar~ maceutical manufacturers will maintain that these preparations are potent for a far longer time than the date of expiration. Be that as it may, shipments to the. other side of the world, take time and more time is required to dispense the drug. Moreover, the fact remains that the United States Government permits antibiotics to be sold or distributed to other countries which they would not permit to be sold in our country. This, in my opinion, is a disgrace. Antibiotics which have lost their potency are almost worse than useless. I do not know the law regarding the export of steel but if the United States Government or a manufacturer in the United States sold steel of inferior quality and the building collapsed, I am sure the repercussion would be both tremendous and terrible. Unfortunately, when we permit the sale of antibiotics which are no longer potent and people die in a far off country where disease is rife and the mortality rate already high, nothing is beard therefrom. Nevertheless, that such a thing is possible is a disgrace to this nation. Not only is it morally wrong not to insure that drugs exported are of the same quality that is required for home consumption, but our relations with other nations demand that diasters and deaths from the use of impotent or out-dated preparations are not to be permitted to occur, far less are tolerated. Furthermore, if the richest country of the world does not care whether it exports pharmaceuioal products of sub- standard quality how can we expect other countries not to do the same. This is not a matter for the World Health Organization to try to control. Each country should assume that responsibility. We have a moral obligation to do so. As Dr. Alan from Turkey said "only some producing countries and the minority of importing countries were in a position to effect quality control. Accordingly the majority of the world population were being treated with pharmaceutical preparations which has not been fully controlled". Dr. Novgorodcf~r (U.S. SR.) stressed the importance of control of pharmaceu- tical preparations in view of the defencelessness of the population, especially in developing countries, against the flood of preparations, many of them of inferior PAGENO="0377" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1521 quality, released on the market. One Delegate had said that the best solution would be for countries exporting pharmaceutical preparations to apply the same strict control measures as t)iey applied to preparations used within the country. The World ITeaIth Organization should not have to make recommenda- tions or try to set such standards for us. Our national pride and fundamental honesty demands that the United States Congress should enact legislation so that would be the law of the land. It is simply "do unto others as we are done by". I am ashamed that the United States Government permits or even possibly dipenses, through USAID, any pharmaceutical product to other lands which is not permitted to be sold in this country. There is one further probiletti that should be taken into consideration when the new law is written, namely, ~oipe drug firms manufacture drugs for export which are not used in their own country. The exiport of such products should also be subject to quality controL . Sir George Godber of England expressed the opinion that for drugs that were manufactured but not used in the prbducing co~iatries, it would be possible to use the standards used by one or another of the producing cQuntrie~ wi~ich did use the drug. ~rhis, too, is a iound and reasonable suggcstiO~~nd sbO~iid be the law of our land. - Other problems concerning the quality control of drug~ and theirpossibl~ toxic effects ar~ difficult to solve I ai~i glad that the United stales Gover±inlent has offered to help the World J~ealth Organization to aid the drug importing nations to test the drug they import. In addition, the U:~.P.Il.S. has offered to a~sist W.fl.O. to establish some form of s~stem for repotting ~hd warnin~ nations of the untoward side effects, especially the late siide -toxic effe~ts of drugs, as for example, the injury to the fetus from thalidomide. Such measures are needed and I ath proud ~ttd happy that the United States is ready to help on these different problems. These offers, however, .db not lessen otu~ dbligation to respond to the repeated pleas from the drug importing nations that all pharmaceutical products which we export are s'iibjnct to the saanè quality controls as are required for home consumption. The enactment of legislation tO eliminate the sale of inferior or~ Ont-of-date preparations to other countries is urgently needed. Such legislation would be a concrete step forward lii the problem of the quality control of drugs and of great benefit to the world. I hope and pray that such may become the law of our land. This concludes my testimony. Thank you. APPENDIX ThALIDOMIDE PREPARATIONS (50-400 mgm.) (20-25 mgm.) Contergati Algosediv Distaval Bonbrain Softenon Glutanon Kevadon New-Nibrol Talimol Shin Nibrol Imidene Ipnotico Noctosediv Quetimid Sanodormin Quietoplex Talinette Sedimide Imidene Thalin Sedatum Sedoval K17 Ulcerfan Isomin Neurosedyn (In sn~al1 amount) Neurodyn Asmaval (Eng.) Neosedyn Admadion (Italy) Noxodyn (40 mgm) Enterosediv Lulamin Grippex Sleepan Polygripan Valgis Polygiron Talargan Preni-Sedin Profamil Gastrimide Sediserpil Pro-Ban-M Tensival Valgrain Peracon Expectoran PAGENO="0378" 1522 COMPETITIVE PROBLEMS IN TEE DRUG INDUSTRY OTHER PREPARATIONS (Amount unknown. Sold in South America) Slip Verdil Sedin Neurofatis Sedalis Noccus Ondasil [From the New England Journal of Medicine] MEDrOAL INTELLIGENCJII THE EVILS OF CAMOUFLAGE AS ILLUSTRATED BY THALIDOMIDE.1 (By HELEN B. TAUSSIG, M.D.)' The abrupt decline in the occurrence of pl~ocomelia in West Germany eight months to the day after the public announcement that thalidomide (contergan) was suspected as the cause offered conclusive evidence that Lenz (1) and McBride (2) were correct in their belief that the ingestion of this substance in early pregnancy caused phocomelia in the offspring. Indeed, the incidence of phocomelia dropped almost to zero. In September, 1962, I was advised that 1 case had been reported in August; this woman had not heard the warning and had taken thalidomide in early pregnancy. These events show bow widespread the publicity was on November 28, 1961 Lenz and Knapp (3) have emphasized the fact that injury to the fetus occurred only when the drug was taken during the "sensitive period," which was between the twenty-eighth and the forty-second day (inclusive) after con- ception or the thirtieth to the sixtieth day after the first day of the last menstrual period. In a subsequent careful analysis of his material Lenz (4) has correlated the time during which the mother took thalidomide with the type of abnormality found in the infant In every case in which the infant was born with an ab- normality of the arms the mother had taken thalidomide between the thirty- ninth and the forty first day (inclusive) whereas when the legs weie abnormal the mother had taken the drug between the forty-first and the forty-fourth day after the last menstrual period. This observation is in line with the fact that arm buds appear slightly before the leg buds. When the infant was born with an abnormality of the external ear, however, the mother was found to have taken thalidomide between the thirty-fifth and the thirty-seventh day after the last menstrual period. This is in striking contrast to the fact that the exernal ear is not discernible until after the arms and legs are readily apparent. The early date at which injury occurs to the anlage of embryonic cells destined to form the ear is similar to the effect of the rubella virus on the heart. The commonest cardiac abnormality resulting from an infection with the rubella virus in early pregnancy is persistent patency of the ductus arteriosus, whereas the cells destined to be concerned in the closure of the ductus arteriosus are among the last cells in the heart to be discernible. The incidence of cardiac abnormalities caused by thalidomide is relatively high. In Lenz's 4 series 17 per cent of the livinig infants and 50 per cent of those who had died had cardiac abnormalities. Nev'ertheless, no specific type or types were apparent. A wide variety of other malformations have been observed from thalidomide poisoning but as yet the relation of these abnormalities to the time of ingestion of the drug has not been determined. The problem remains whether thalidomide alone is responsible for the outbreak of phocomelia or whether other drugs may cause a similar deformity. This question is raiised because a history of the ingestion of thalidomide has been obtained only in approximately 50 per cent of the cases If however thalido mide was responsible for only half the cases the incidence should have declined markedly, but the outbreak of phocomela would scarcely have come to an abrupt end. In a recent letter Dr. Lenz 5 advised me that during the first six months of 1962 the incidence of phocomelia in Hamburg was 1 or 2 per 1000 births, whereas after August 1, 1962, among the first 5000 births in the city of Ham- `From the Cardiac Clinic of the Harriet Lane Home, the Johns Hopkins Hospital, and the Department of Pediatrics Johns Hopkins Unlver~lty School of Medicine 2 Professor of pediatrics, Johns Hopkins University School of Medicine. PAGENO="0379" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1523 burg, 2 infants had been `born with phocomelia. In both, the mothers had failed to hear the warning, and both had `taken thalidomide in early pregnancy. Amnesia is a gi~eat factor. Few people, if any, could swear whether or not they `have taken any pill eight months ago, far less two or three years ago. The small amount of thalidomide that can injure the fetus renders it difficult to trace `the drug. One tablet of 100 mg. taken during the "sensitive period" can severely injure the fetus. Possibly, 1 tablet of 50 mg. is sufficient. Nine tablets each containing 30 mg., taken over a period of a week, have been known to injure the fetus severely. The pill need not have been a tranquilizer or sleeping pm, for thalidomid~ was added `to a number of other drugs `that were used for headache, migraine, asthma, ulcers, en'terltis'and arthri'tl~. The mnny dti!erOnt names (Table 1) under which the drug has been marketed make it difficult to determine whether the woman has taken thalidomide. In- deed, almost every firm' that makes or is licensed to sell the drug sells it under a different name. Such a policy is in all probability financially advantageous to the firm, but it presents a real difficulty to the doctor and the patient. Moreover, the drug has been sold or distributed a's `samples in many, many countries. T'he names Contergan, Dista'val, Softenon, Kevadon and Talimol are familiar. Softe- non was the trade name used for export. Softanon was distributed `to Austria, Belgium, Holland, Finland, Switzerland, Spain, Portugal and Sweden. France refused `to grant a license merely `because of technical `difficulties, not because of any suspicion of late untoward effects. In Sweden, Norway and Denma'rll firms were 1icen~ed to sell the drug un'der the respective names of Neurosedyn, Neurodyn and Neosedyn. In addition Sweden had Noxody'n; Denmark had Lu1~'min. Finland had a number of drugs ,containingthajidomide; thus~ in addi- tion to Softenon, Polygrion, Preni-Sediv, Noctosediv and Enterosediv were ~avallable~ Polygripa'n, all~hcugb containing only a small amount of thali- domide, was exported to Iraq, Iran, Palestine, Turkey and Greede, Pakistan, India, and Hong Kong. In Israel thalidomide was licensed for sa'le as Tlialin and Phalinette. Fortunately, the firm was late in obtaining its license, and the sale of the drug was permitted for only a few w~eks. TABLE 1. Trade names nnder which thalidomide was marketed (50-100--mg. amount) Shin-Nibrol Contergan Noctosediv Distaval Sanodormin Softenon Thalinette Kevadon Imiclene Talimol Sedatum Imiden'c Ipnotico Ulcerfan Quetimid (Amount not known) Quietoplex Slip Sedimide Sedalis Thalin Ondasil Sedoval K17 Verdil Isomin Neurofatis Neurosedyn Noccus Neurodyn Imidan Neosedyn (Small amount) Nonodyn (40 mg.) A'smaval Lulamin Admadion `Sleep'an ` Enterosecliv Valgis ` Grippex Talargan Polygripan Profamil Polygiron Sediserpil Preni-Sediv Sedin ` Gastrinide (20-25-mg. amount) Pro-Ban M Algosediv Tensival Bonbrain Vaigraine Glutanon Peracon Expectorans New-Nibrol Other countries were more progressive and consequently less fortunate. Al- though Grunenthal withdrew the drug for export at the same time as the firm withdrew it from the West Germany market, and also notified the pharmaceutical PAGENO="0380" 1524 COMPETITIVE PROBLEMS IN THE DRt~G INDUSTRY firms whose sale of thalidomide it bad licensed, the countries in which the drug was manufactured independently from Grunenthal continued to sell it for varying periods. One' large firm in Japan, which started to manufacture thalidomide shortly after Grunenthal first marketed it, was sued by. Uiiinenthal for priority, and th~ suit was won, Thereafter, the Japanese llrm sold "Isomin" under license for ,Gruneñthal and withdrew it in December, 1961. At least seven other small pharmaceutical houses in Japan manufactured the drug and sold it under various names: Bonbrain, Neo-Nibro'l, Shin Nibrol, Glutanon and Sanodormin. These sales were independent of West German regulations, and the drug was not with- drawn from the market until the end of May, 1902, when `TOO cases of phocomelia had been reported in Japan, .. . A similar thing happened in a ~umb~r of other countries, Various pharmaceu- tical firms studied the formula, `manufactured the drug and sold it under a variety ,of trade naT eS. Thus, in Italy thalidomide was sold under the names of Iw'ldene~ Irrudene Ipnotico Profamil Quetimid Quietoplex Sedimid~ Sediserpil Sedoval K17 and:Ulcerfan. Inspite, of an outbreai~ of phócomella in Turin in June 1962, Sowe of these prothlcts were not withdrawn In. Italy until September, 1962. The :difficulty. in detection of .the production and sale of drugs containiifg thalidomide is illustrated by a report in the Brazilian magazine Ocruziero of SeptembE~r. 6, 1962, The Investigation w~s precipitated h~ the birth of a child with phocomelia. The magazine writer was told that thalidomide was not on sale in Brazil, but thrOugh hIs own inquiries he 1earn~ed of 50 other infants born with phocOmelia'. Thereupon, hevisited a parmacy and purchased the drug under the name Of Sedin. Later, he found that Sedalis and Slip were also manufactured in S~o Paulo and distributed in Brazil. Thereupon, the health authorities in- stituted an investigation. They found' that thalidomide was sold under five different names, Sedin~ Sedalis, Slip,.Ondasil and lTerdil. Moreover, in a ten-day surprise search, they confiscated nearly 2,500,000 pills (or boxes of pills), 46,000 flasks containing thalidomide and 90,000. kg. of the pure `substance in the pharmacies and pharmaceutical firm's in S~o Paulo. This was in the summer of1962. Such events illustrate the importance of an international office of drug informa- tion that would notify `the health authorities in all countries of the world when a drug was suspected of being dangerous. Although the drug has been withdrawn from the market, the danger is real that thalidomide, which has masquer'aded under so many different names in so many parts of the world, will turn up again and again. Some pills, which were pre- scribed in good faith by physicians, are now tucked away in many a medicine closet, with only a prescription number and no name. The serious consequences of this well established custom of filling prescription's by number is illustrated by 1 unfortunate woman who', because the bottle was unlabeled, unwittingly took Distaval during two successive pregnancies and has two children with phoco- melia. There is a movement in England to change the law so that `the pharmacist would be required to put the name of the drug on a prescription unless specifically requested by the physician to withhold it. Although there is no law `in the United States regarding withholding the name of a medicine given by prescription the custom is firmly established that prescriptions are filled by number and the name of `the drug is withheld. This is a dangerous custom since it means `that a large amount of unlabeled medicine is accuthulated by everyone. There is danger not only `that a m'edicine that has been withdrawn from the market may remain avail- able but also that, when medicines are taken by mistake, especially by children, the doctor may be at a loss to know what has been taken. Although common sense calls for a change in this custom a concerted effort by the' medical profes- sion will be necessary to effect such a change. Experimental work with thalidomide `ha's been initiated in many places. Somer's (6) experimental production of phocomelia in the offspring of New Zealand white rabbits, fed enormous doses of thalidomide from the eighth to the sixteenth day of gestation, has been repeatedly confirmed by him and in other labo~ratories. The Himalayan white rabbits (7) appear to be susceptible to the effect of thalid- omide on the fetus. Furthermore, Somers (8) has reported that although the does is seventy-five time that given to man, the blood levels (9) in rabbits are only three times that normally obtained in man after a full therapeutic dose. Nevertheless, the production of phocomelia in other animals and even in other breeds of `rabbits has not met with the same degree o'f success. Much remains to be learned. Clearly, all animal's do not react alike. Wh'at is safe for one is not necessarily safe for another. Even after all known `safeguards PAGENO="0381" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1525 are taken, new drugs must be tested on man with the greatest caution. A central computing office for the evaluation of these reports i's essential. Such an office must be impartial and mCst have no financial interest in the product. Absolute safety is impossible. The final test of any drug used by man is horw it affects man. Nevertheless, `the medical profession must make `a coucentrated effort to give the public the greatest possible protection. Therefore, extremely careful records must be kept when drugs are first given to varlous~ group's of persons. Furthermore, these records must be filed in such a manner that possible untoward late complications can be correlated with the various drpgs. Although this is especially important for drugs used during pregnancy it j;~ by no means limited to such drugs. Other drugs may have late untoward effects on man; con- sequently, all new drugs recitlire careful scrutiny. Therefore, it should be re- emphasized that drugs should be prescribed `with the greatest of caution to women in the childbearing age. The list of drugs in Table 1 that I have been able to verify is not a complete one since Dr. Fanconi (10) told me that he had seen a list hI Switzerlan,~I containing more nearly 100 than 50 names. Nevertheless this list illustrates the many names under which a single drug may be marketed, and thereby shows the wisdom of the recent change in the laws requiring that official names be printed on the label in letters half the size of the trade name. REFERENCES 1. Lenz, W. Ki.ndliche Missbildungen nach Med'ikaiuent-Einnahrne w~hrend der Gravidität. Deatsehe med. Wch,aschr. 86:2555, 1961. 2. McBride, W. G. Thalidomide and congenital anomalies. Laneet 2 :1358, 1961. 3. Lenz, W., and Knapp, K. Die Thalidomid-Embryopathie. Deutsche med. TTTclo'ischr. 87:1232, 1962. 4. Lenz, W. Presented at Fourth World Congress of Cardiology, Mexico City, Mexico, October 7-43, 1962. 5. Idem. Personal communication. 6. Somers, G. F. Thalidomide and congenital abnormalities. Lancet 1 :912, 1962. 7. Spencer, K. B. V. Thalidomide and congenital abnormalities. La~wet 2:100, 1962. 8. Somers, G. F. Personal communication. 9. Green, J. M., and Benson, B. C. Spectrophotometric determination of thalido- mide in body fluids. J. Pivarm. ~ Pharmacol. 13 (Supp.) :117-121, 1961. 10. Fanconi, G. Personal communication. [From the Washington Post, July 15, 1062] "HERoINE" or FDA KEEPS BAD DRUG OFF MARKET (By Morton Mintz) This is the story of how the skepticism and stubbornness of a Government physician prevented what could have been an appalling American tragedy, the birth of hundreds or indeed thousands of armless and legless children. The story of Dr. Frances Oldham Ke1~ey, a Food and Drug Administration medical officer, is not one of inspired prophesies nor of dramatic' research break- throughs. `, She' saw her duty in sternly simple terms, and she carried it out, living the while with insinuations that she was, a bureaporatic ~nitpicker, unreasonable- even, she said, stupid. That such attributes could have been ascribed to her is, by her own acknowledgement, not surprising, cousidering all of the circumstances. What she did was refuse to be hurried into approving an application for mar- keting a new drug. She regarded its safety as unproved, despite considerable data arguing that it was ultra safe. "` It wa~ not until last AprIl, 19 months after the `application was ~filed with the FDA, that `the terrible effects of the drug' abroad wer~ "widely reported' in this country. What remains to be told is how and why Dr. Kelsey blocked the intro- duction of the drug before those effects were suspeetOd by anyone~ Dr. 1~elsey invoked her high standards atld her belief that the drug was "peculiar" against these facts: , ` PAGENO="0382" 1526 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY The drug had come into widespread use in other countries. In West Germany, where it was used primarily as a sedative huge quantities of it were sold over the counter before it was put on a prescription basis, It gave a prompt deep natural sleep that was not followed by a hangover It was cheap It failed to kill even the would be suicides who swallowed massive doses And there were the reports on experiments with animals Only a few weeks ago the American licensee told of giving the drug to rats in doses 6 to 60 times greater than the comparable human dosage Of 1510 offspring none w'is delivered with evidence of malformation In a separate study one rat did deliver a malformed offspring but the dosage had been 1200 times the usual one Rabbits that were injected with six times the comparable human dose also were reported to have produced no malformed births. Recently the FDA publicly decried the excessive contacts made with its per sonnel by pharmaceutical manufacturers who are anxious to speed the agency's handling of new drug applications MANY REQUESTS So it was not at all surprising that dozens of contacts were made with Dr. Kelsey by representatives of the American licensee for thalidomide the chemical name for the sedative. They had what they strongly believed was a clear and overwhelming case-but Dr. Kelsey delayed, and delayed, and delayed. They visited her in her drably furnished, bare-floor office in an eyesore Tempo on Jefferson dr. sw. They phoned. They submitted a flow of reports and studies. It was apparent that substantial investr~ents and substar~tial profits were at stake. And all of this was routine. The application had come to Dr. Kelsey-simply because it was her turn to take the next one-in September, 1960. The European data left her "very unimpressed." In an interview, she said she had "lived through cycles before" in which a drug was acclaimed for a year or two-until harmful side effects became unknown. And she said she could not help regarding thalidomide as a peculiar drug It troubled her that its effects on experimental animals were not the same as on humans-it did not make them sleepy SAME QUESTIONS Could there be danger in those few people whose systems might absorb it? Could there be a harmful effect on an unborn child whose mother took it? (In other countries obstetricians were innocently prescribing it as an anti-emetic for pregnant women.) Dr. Kelsey regarded the manufacturer's evidence of thalidomide's safety as incomplete in many respects The drug was not after all intended for grave diseases or for the relief of intolerable suffering but primarily for sleeplessness for which many drugs of known safety were already on the market. All of this being so, she saw no need either to hurry or to be satisfied with the approach that nine chances out of ten it s safe She was determined to be certain that thalidomide was safe ten times out of ten, and she was prepared to wait forever for proof that it was. When the 60-day deadline for action on the application came around, Dr. Kelsey wrote the manufacturer that the proof of safety was inadequate. Perhaps with an understandable feeling of frustration the manufacturer produced new research data, new reasons for action. Each time a new 60-day deadline drew near, out went another letter insufficient proof of safety UPHELD BY SUPERIORS Dr. Kelsey's tenacity-or unreasonableness,., depending upon one's viewpoint- was upheld by her superiors, all the way. Although she takes her work seriously indeed, her contacts with applicants are in her words usually amiable We see their point and they see ours But the responsibility for releasing a drug is ours, not theirs." And that is the responsibility she would not forget. In February, 1961, she chanced to read, in a British medical journal,, a letter from a British doctor questioning whether certain instances of peripheral neu- ritis-a tingling and numbness in the feet and the fingers that is sometimes irre- PAGENO="0383" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1527 versible-might not be due to intake of thalidomide. To her this was a danger signal. She called the letter to the attention of the applicant. His investigators re- ported that the incidence was apparently negligible, one case among 300,000 adult users. Six months later, Dr. Kelsey said, the Incidence among adults who took thalidomide regularly for months at a time was found to be 1 in 250. But neither she nor the. applicant yet had the slightest inkling that the drug could be responsible for the birth of malformed babies. That awful circumstan- tial evidence became known to the applicant-in a cablegram from Europe-on Nov. 29, 1961. APPLICATION WITHDRAWN He reported it to Dr. Kelsey early the next day. Although this was followed by a formal withdrawal of the application, as late as last month the applicant described the birth abnormalities as "alleged effects" of thalidomide. The story begins, in 1954, six years before Dr. Kelsey, a pharmacologist as well as a physician, went to work in the FDA's Bureau of Medicine. She and her hus-. band, F. Ellis Kelsey, a pharmacologist who is now a speical assistant to the Sur- geon General of the Public Health Service, came here from the faculty of the University of South Dakota School of Medicine. For the account that follows, the primary sources were Dr. Kelsey and reports by Dr. Helen B. Taussig to a medical meeting in April and in the June 30 issue of the Journal of the American Medical Association. Dr. Taussig, professor of pediatrics at the Johns Hopkins School of Medicine in Baltimore, went to West Germany in January to investigate the relationehip be- tween thalidomide and an enormous increase in the birthrate of malformed infants. Eight years ago a West German manufacturer conceived of the drug, synthe- sized it-~and discarded it after discerning no effect on test animals. In 1958 another West German firm also developed thalidomide and found it to be, by all indications, the best sleeping compound ever devised. LARGE SALE The sale was tremendous. It even came to be used for grip, neuralgia, asthma, in cough medicines and to calm children before they were given electroen- cephalograms. In Germany it was marketed as Contergan, in the British Commonwealth as Distaval, in Portugal as Softenon. Dr. Kelsey's native Canada accepted It on April 1, 1961, for manufacture by one firm under the name Talimol and by an- other firm, the William S. Merrell Co. of Cincinnati, under the name Kevadon. It was the 134-year-old Merrell firm that was seeking to market Kevadon as a prescription drug in the United States. At this time-April, 1961-West German investigators were desperately grop- ing for an explanation of an unprecedented outbreak of phocomelia, the malfor- ination hitherto so rare that it isn't even listed in some medical dictionaries. An 86-year-old Gottingen specialist in human deformities told Dr. Taussig that he had in his whole lifetime "seen as many individuals with two heads as he had with phocomelia." Usually, phocomelia deprives its victim of one arm. Rudimentary fingers that look, said Dr. Taussig, "like the flippers of a seal" arise from the stub below the shoulder. CLINIC CASES In eight West German pediatric clinics there were no eases at all between 1954 and 1959. In 1959 there were 12, in 1960 there were 83, in 1961 there were 302. These were not the ordinary textbook cases'. Not just one arm was affected. These children were without both arms, or without both legs, or without three limbs, or they were without any limbs at all. In some, the external ear was missing and hearing was grossly impaired. There were deformities at the eyes, esophagus and intestinal tract; and even this Is not a complete list. Once the suspected link with Contergan was established, Contergan was taken off the West German market. The expectation is that the last mothers who could have taken it during early pregnancy, the danger period, will be delivered in August. The estimates are that by the end of next month'the total of deformed PAGENO="0384" 1 528 COMPETITIVE PROBLEMS IN THE DRuG INDUSTRY children born in West Germany will `be between 3500 and 0000. Two out of three are expected to live. Most are apparently of normal mentality. Thc drug was withdrawn from the British market five days after the with cirawal in West Germany. The Guardian, Manchester, has predicted that August will see the birth of 500 deformed English children. The Ministry of Health has begun to fit 50 victims with artificial limbs. EIGHT IN CANADA An article prepared for the May 19 issue of Maclean's Magazine said that at the time of writing eight victims of phocomelia' had been born in Canada, two of them to physicians' wives who had used "samples of thalidomide donated to their husbands." Because the Department of Health did not order thalidomide withdrawn from sale until March 2, Maclean's said the last Canadian casualties are not expected until November. The cause of the West German outbreak was hard to trace. Hereditary fac- tors, blood incompatibility between parents, abnormal chromosomes, radioactive fallout, X-rays, detergents', food preservatives-all of thes'e things, and more, were suspected, checked and discarded as possibilities. A Hamburg pediatrician Dr Widukind Lenz made prehmmary studies show ing that about 20 per cent of the mothers who brought deformed infants' to his clinic had taken Contergan. Dr. Taus'sig wrote: "On Nov. 8, 1961, it occurred to him that Contergan was the cause. He re- questioned his patients and the incidence promptly rose to about 50 per cent Many of the patients said they had considered the drug too innocent to men- tion it on the questionnaire . MAKER WARNED "On Nov. 15 he warned Grunethal (the manufacturer) that he suspected Con- tergan was the cause and that the drug should be withdrawn." Five days later, at a pediatric meeting in Dusseldorf he reported his' suspicions and his actions but, did not name the drug. That night Dr. Taussig related, "a physician came up to him and said, `Will you tell me confidentially, is it the drug' Oontergan? I ask because we have such a child and my wife took Contergan.' "A couple of days later it was generally known that Contergan was the drug under suspicion. On Nov. 26 Grunenthal withdrew the drug from the market. On Nov. 28 the Minis'tr3T of Health issued a firm but cautious and widely publicized statement that Oontergan `was suspected to be a major factor in the production of phocomelia.", Dr. Taussig reported that an Australian physician, Dr. W~ G. McBride, saw three severe cases in April, 1961, and three more in October and' November. "He found that all `six mothers had taken Distaval in early pregnancy,'! the Journal article said. , In Stirlingshire, Scotland, Dr. A.' L. Spiers saw 10 severe `phocomelia victims during 1961 and ultimately "obtained positive proof that 8 Out of 10 of these patients had taken Distaval DIFFICULT CONNECTION ` Making the connection-which s'ome physi~ians ~ay is not conclusively es- tabllshed-'was extraordinarily difficult. Dr Lenz for example had to contend with the lack of records during the time when `Contergan `was `sold' without prescription, and with his p'atlepts" natural difficulty in recalling' if and precisely when they had taken a sleeping pill' months earlier. In one instance Dr Tattssig wrote a doctor swore the mother had not received Contergan He had prescribed an entirely different sedative On inVes tigation at the pharmacy Dr Lenz found the pres'crtption was stamped `drug not in stock, Contergan given instead'." ` ` Dr. Taussig said `the investigations of Dr. Lenz in particular indicate that the' embryo is endangered `if a mother takes `thalidomide within about 20' to 40' days after conception, a time when `she may not `even know that she is pregnant. H'e believes that during that sensitive period the chances that a mother who has taken the drug will deliver a deformed baby are at least two in five. PAGENO="0385" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1529 COMPANY VIEW `I~he Merrell firm says that conclusive proof is lacking for such assumptions and cites a clinië in Kiel at which, Merrell reported, half of the deformed chil- dreii were deljvered to mothers who probably had not taken `thalidomide. "Everyone admits," Dr. Taussig wrote, "that no information is available con- cerning how many women may have taken the drug in the sensitive period and have had a normal child." Dr. Kelsey said the molecular complex of thalidomide i's being broken down and studied in an effort to determine the causative agent in `thalidomide. In all of this Dr. Taussig sees compelling reason for caution in the use of new drugs by women of child-bearing age. A Canadian physician ipterviewed by Maclean's said, "There is too much demand on the pa.rt of the public for relief of mild or even moderately severe symptoms. People won't put up with even the slightest discomfort or headache; they demand medication from their doctor. If they can't get it from one, they'll go to another." Dr. Taussig also wants the 1938 Food and Drug Act strengthened to provide greater assurance that new drugs will not harm unhorn children. B'u*t to Assist- ant FDA C'ommissioner Win'ton B. Rankin, the significant thing about the law is that it gave Dr. Kelsey the weapon she needed to `block `the marketing of thalidomide in the United States. "The American public," he said, "owes her a vote of thanks'." The 47-year-old Dr. Kelsey lives at 5811 Brookside dr., Chevy Chase, with her husband and daughters, Susan, 15, and Christine, 12. She is grateful for the praise-but r'Ocognizes that, had thalidomide proved to be as safe `as the applicant believed, "I would have been~ considered unrea- sonable." She intends to go on "playing for that 10th chance in 10" to assure safety in new `drugs "to the best of my ability." For 20 years. she taught pharmacology. She knows the dangers, and she has not the `slightest i'ntefition of ~o'rgetting them. [From the Journal of the American Medical Association, June 30, 1962, vol. 180, pp. 11O6~-1114,] A STUIY OF THEI GEEM~N OUPaREAK o~' PH0cOMEuA TUFI PIlA~IDQMIDE SYNDROME (By Helei~ B. Taussig, M.D.)1 In l~e~auuary of this year I,h~ard that a large tuimber of infants had been born i~ West E~rmany with severe `n~lformations of the extremities and that a sleep~g tablet was su~pected as t~ie ea~e. I immediately went to West Germany t~ iuye~tigate the situation and `traveled tbroug~iotitWest Germany with excep- tion oj~ West Berlin. It was indeed true that a new clinical syndrome had appeared~ The outstanding featu~ was phoç~omelia.' Phoconlella mea4s "s~a,1, extremities"; the word comes from 2 Gree1~ words ,~J~o7~os meanipg "se~1" apç~ nielo~, m'ean~pg "extremitie~," In phoço'meli'~ th~ hopes between th,e han~ ~nd'tbe sl~eulcler are d,efective or absent and the Ijaticis Or rudimentary finger~ `arise d{rectly from the end of the affected bone as the fiipp~r~ of a seaL The ~i~st ~ such cases were presented by Kosenow and Pfeiffer (1) `as"an'e~hib1t at the `German Pediatric Meeting in Kassel In 1960. At this exhibit Kosenow `and Pfelffer reported that no `hereditary factor was found, nor was ati~'-blood Incompatibility demonstrable and no chromosomal abn~pmali'ty was detect~c1. LittJ~ attention was paid to the exhibit. Dr. Guiclo Fanconi, however, studied the cases an'd stated he had never seen the clinical syndrome. In retrospect, it is surprising that so little attention was paid to this exhibit becai~se during 1960 infants with th'is syndrome had been brought to aln~o'~t every pediatric clinic in West Germany. Phoeomelia has long been known as a rare malformation but usually affects only one limb. Dr. GrUber of G5ttingen, who is now 86 years old and has devoted 1 From the Department of Pediatrics, the Johns Hopkins University, School of Medicine, and the Harriet Lane Home of the Johns Hopkins Hospital. Dr. Taussig's trip was supported by the International Society for Cardiology Foundation, the Heart Association of Maryland, and the National Institutes of Health. 81-280----68-pt. 4-25 PAGENO="0386" 1530 CO1~fl~TITIVE PROBLEMS IN THE DRUG INDUSTRY his life to malformations in man and animal, told me be had seen as many Indi- viduals with 2 heads as he had with phocomelia. Suddenly in 19(31 the incidence of phocomelia increased rapidly. Almost every clinic in West Germany admitted 3 times as many such infants in 1901 as in 1960. The data in Table 1 shows the incidence which was reported to me in March, 1962, by various university pediatric clinics in West Germany and also in 3 centers in the British Commonwealth. By the time of the 1961 pediatric meeting in Düsseldorf almost all pediatricians were aware of the outbreak of phocomelia. TABLE1.-INCIDENCE OF PHOCOMELIA IN THE VARIOUS UNIVERSITY PEDIATRIC CLINICS 1949-59 1959 1960 1961 In3years Bonn 2 19 50 71 Bremen 4 20 24 Frankfurt 1 4 11 16 Göttingen 3 1 10 14 Hamburg (Lenz-person) 1 16 57 74 Hamburg (Lenz-letter) 1 30 154 185 Hei~1eiberg:::::____::_:::::::::_:::_:::::::::::::::::::: :::::::: 2 5 26 Munchen 3 2 14 44 60 Munster 1 4 3 27 96 126 Birmingham ~ 13 17 Liverpool 8 25 33 Stirling 10 These include peromelia, amelia, and micromelia as well as phocomelia-per year. In September, 1961, Wiedemann (2) reported the first series of 33 such children and delineated the clinical syndrome. As in most malformations, the severity varies but the pattern is remarkably specific. The essential feature of the ab- normality concerns the long bones of the extremities (Figs 1 and 2). The prehensile is Jest (Fig. 3). The hand arises directly from the distal end of the affected bone. The radius is absent or both radius and ulna are defective; in some instances only one short bone remains; in extreme cases the radius, ulna, and humerus are lacking and the hand buds arise from the shoulders (Fig. 1). Both sides are affected but not usually with equal severity. The legs may be affected in the same manner; in most instances the deformity of legs is less severe (Fig. 2). The tibia fails to form. The fibula also may not form and the femur may be short. The hip girdle is not fully developed and there is a dislocation of the hip with external rotation of the stub of the femur. The feet are externally rotated. Polydactylism and syndactylia of the toes are common (Fig. 3). In the extremely severe cases the arms and the legs are missing (Fig. 4). In some instances the external ear is missing and the internal auditory canal is abnormally low (Fig. 5). Usually hearing is not grossly impaired. Unilateral facial paralysis Is relatively common, The vast majority of children are of normal mentality. Pfeiffer and Kosenow(4) noted that a mid-line facial hemangioma on the forehead which extended over the nose to form a "moustache" on the upper lip was almost pathognomic of the syndrome (Fig. 1). A saddle nose was also common. These features diminish and tend to disappear as the infant grows. In some TABLE 2.-INCIDENCE OF MAJOR MALFORMATIONS' Type Personal ob - Number servations - Percent Left --- Number ers --- Percent Arms only Arms and legs Arms, legs, and ears Arms and ears Ears only tegs only Other malformations Total 43 23 2 3 7 1 3 82 52.4 28. 1 2.4 3.7 8.5 1.2 3.7 103 60 7 10 14 4 5 203 50.6 29.6 3.4 4.9 6.9 2.0 2.5 1 Courtesy of Dr. W. Lenz, Hamburg, Germany. PAGENO="0387" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY TABLE 3.-OT}l~R MALFORMATIONS OCCURRING IN 203 CASES OF PHOCOMELIA 1531 Number Pylorospasm 2 Duodenal stenosis 3 Duodenal atresia 3 Esophageal atresia 2 2 Anal atresia. - -- 3 Cardiac abnormalities 17 Anencephaly 2 Microcephaly 3 Eye malformations Nasal obstruction 1 1 Courtesy of Dr. W. Lenz, Hamburg, Germany. 2 DoubtfuL instances, usually in severe eases the internal organs are affected. Malrotation of the gut occurs with duodenal stenosis and anal atresia (Fig. 6). Asplenia may occur and the musculature of the uterus may be so affected as to make a bihorned uterus. A, variety of cardiac malformations have also been reported but these did not fall Into any specific pattern. Thus hypoplasia of the aorta, defects of the a'urieular and ventricular septa, all forms of `transposition of `the great vessels, tetralogy of Fallot, and pulmonary stenosis have all been reported. The frequency with which the various abnormalities occur in Dr. Lenz's series are shown in Table 2. The variety of other malformations, is shown in Table 3. Pfeiffer and I~osenow(4) reported extensive family studies on 34 children. They found no similar traits among the relatives and no consanguinity among the parents. Chromosoinal analysis of 12 patients showed no chromosomal aberration either in the number or form of the chromosomes. Four of 6 pairs of dizygotic twins had the same type of malformation but the twins were not equally affected. These investigators thought that the causative faet~r was exogenous and acted during Fg 0-Old ,, ~i ph corn 1 PAGENO="0388" 1532 COMPETITIVE PROBLEMS IN THE DRuG INDUSTRY the critical phase of development i e between the third and sixth w eek of pregnancy Although the critical time w as similar to that of German meales viral infection was excluded by the steady increase in the number of patients over a 2-year period and also by the distribution of the cases Viruses know no territorial borders This epidemic remained strikingly centered in West Germany German pediatricians became aware of the problem Fxtensive studies had been instituted in a number of centers Lenz in Hamburg Weicker in Bonn Wiedemann (2) in Kiel and Pfeiffer and Kosenow (4) in Munster etch undertook special ~tudies Many doctors suspected radioactive fallout Lengthy questionnaires were sent out inquiring about X ray exposure hormones detergents foods (and food preserva tiveb) contraceptive measures and tests for pregnancy Most of these were retro spective studies Dr Lenz s initial studies showed that approximately 20% of his patients had taken Contergan On Nov 8 it occurred to him that Contergan was the cause He requestioned his patients and the incidence promptly rose to about 50% Many of the patients stated that they had considcred that drug too innocent to mention it on the questionnaire. Fig. 5.-Infants with severe phocomelia (Wiedemsnn5). PAGENO="0389" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1533 Contergan is the West German trade name for thalidomide. The chemical struc- ture is shown in Figure 7. Thalidomide is a synthetic drug which, as the story is told in West Germany, was first conceived and made by Ciba and found by them to have no effect on animals; therefore, it was discarded. In 1958 Griinenthal developed the drug and tried it on ani~nials; they, too, found it had no effect on animals. Thereupon it occurred to the inventors that it might be useful in epilepsy and was marketed as an antic'onvul's'ant drug. It was soon found to be worthless for epilepsy but it caused sleep. Thereafter, it was sold as a sleeping tablet, a sedative, and tranquilizer. It had a prompt action, gave a natural deep sleep and no hangover. It appeared innocent and safe. Man could not commit suicide with it. It became West Germany's most popular sleeping tablet and was widely used in hospitals and in mental institutions. Thalidomide was added as a sedative to other drugs such as algo'sediv (thalidomide and acetylsalicylic acid), peracon expectorans, grippex, and polygripan; thus it was used for grippe, neuralgia, asthma, and as a cough medicine. A liquid form was made for children. It was used in hospitals to quiet `a child for an electroencephalogram. It became West Germany's baby~sitter. It was `also found useful as an `antiemetic hi pregnancy. The drug was manufactured "by the ton" and sold without prescription. Inas- much as the drug was cheap and an excellent `sedative, the `sale was tremendous. The rights to market the drug were `sold `to pharmaceutical firms in `other coun- tries. In the British Commonwealth it was marketed by Distillers (Biochemicals) as Distaval. In Portugal it was sold as Softenon `and it was manufactured in the United States as Kevadon (but it was never passed by our Food and Drug Ad- ministration). It was sold both as Kevadon `and Talimol in Canada. Thalidomide was `also added to the English drug's known as Valgis, Ten'sival, Valgraine, and Asmaval. I do not know whether the drug was added to any Portugese prepara- tions. In April, 1961, a new form of polyneuritis appeared: tingling of the hands, sensory disturbance, `and later, atrophy of the thumb and motor disturbance's. It was soon recognized that the long continued use of Co'ntergan in adults was responsible fo'r polyneuritis; furthermore, unless the drug was promptly dis- continued, the po'lyneuritls was irrever~iblie. Thereafter, the drug was placed upon prescription. Nevertheless, it remained a very popular drug and continued to be widely used in hospitals and alsQ in the home. As previously stated, on Nov. 8 it occurred to Dr. Lens that Co'ntergan was probably responsible for the catastrophic outbreak of phocomelia. On Nov. 15 he warned Grtlenth,al that he suspected Oontergan was the cause of phocomelia and that the drug should be withdrawn. On Nov. 20, 1961, at the Dtisseldo~f Pediatric Meeting, Lenz (5) reported he suspected a specific drug was the ca~se of the "Wiedemann syndrome" and that be had warned the company that the drug should be withdrawn. He did not name the drug. That night a physician came up to him and said, "Will you tell me confidentially, is the drug Contergan? I ~ask because we have such a child and my wife took Contergan." In the ne~t few days he received a half dozen letters asking the same question and saying, ~`My Wife took Oontergan and we have such a child.." A couple, of days later it was generally known amor~g the doctors that Oontergan was' the drug und~r suspicion. `On Nov. 26 Grflenthal withdrew the drug from the market. On Nov. 28 the Ministry of He'alth issued a firm but cautious statement that Contergan was suspected to be~ a major factor in the production of phocomelia and stated that the drug had been withdrawn from the market. Women were warned not to take the drug. The announcement was carried on the front page of every newspaper, o'n the radio, and on television. Phocom'el'ia not only suddenly appeared in Germany, but the same unusual type of malformation equally suddenly made its appearance in Australia. - In April, 1961, Dr. W. G. McBride (6) in a relatively short time saw 3 babies born with severe phocomelia. He saw no more such infants until the fall o'f 1961. In October `and November, 1961, he saw 3 more such infants. Thereup~on he re- viewed the 6 cases and he found that all 6 mothers had received Distaval in early pregnancy. Pr. McBride communicated his findings to' the Australian Branch of Distillers Limited and they In turn cabled thdir London ollina `on Nov. 27, 1961. Distaval is the English trade name for Contergan. Thus, within a couple o'f days the English firm received similar reports from 2 widely sep- arated countries. The drug was promptly withdrawn from the market. The latest report is that it is available tohospitals in limited sales. PAGENO="0390" 1534 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY McBride (7) in a brief note in the Dec. 16 Laiiwet, reported a 20% increase in severely malformed babies from the use of Distaval in early pregnancy. The mal- formation affected the mesenchymal tissue, both the long bones, and the muscula- ture of the gut. Had anyone else seen anything like it? Lenz 8 replied to his letter in the Jan. 12 issue of the Larwet. Spiers (9) in Stirlingshire, Scotland, had seen 10 infants with severe phocomelia during 1961. He immediately set to work to ascertain whether his cases were associated with Distaval. On questioning mothers and doctors be obtained a his- tory of Distaval in 2 of the patients. Then he went to the office where all pre- scriptions are filed and with the names of the patients and the approximate date on which the medicine was given, he asked to have the prescriptions checked. It took 3 weeks. During this time he interviewed the mothers and in 2 instances the mothers finally remembered they had taken sleeping tablets and produced the bottles from which the tablets had been taken. The tablets therein were stamped DP/DL. Ultimately, he obtained positive proof that 8 out of 10 of these patients had taken Distaval in early pregnancy. Thus, between Nov. 20, 1961, and January, 1962, the circumstantial evidence rapidly accumulated in different parts of the world which indicated that thalido- mide played an important role in the production of phocomelia. Further studies were instituted everywhere. Many clinics reported a history of the ingestion of Contergan could readly be obtained from the women in one-half of the instances but not in all cases. A few, but remarkably few, prospective studies were instituted. One obste- trician asked each of 65 patients whether Contergan bad been taken in early pregnancy and obtained a positive reply in only a single instance. He said if that woman had an abnormal baby he would believe Lenz. She did! Professor Von Masselbach made a prospective study of 350 patients in his obstetrical clinic. Thirteen women had taken Contergan, 6 in the second half of pregnancy and 7 in the first half, i.e., in the first 4~ months. Among these 7 women, 2 had babies with phocomelia, 1 had a baby with an anal atresia, and 4 were normal. In Düsseldorf, in a group of 300 women who had not taken Contergan, all the babies were healthy, whereas one-half of the women who took Contergan had abnormal children. These investigators also had collected 40 cases over a 2-year period. Seventy-five per cent of these mothers gave a history of Contergan. Since Fig. O.-Radiologic evidence of intestinal obstruction and defects of bones of extremities. PAGENO="0391" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1535 the records were not checked, the history of Contergan was recorded as prob~ able but not proven. Dr. Weicker 10 in Bonn was collecting 100 cases of photo~ melia with a history of Contergan. In March, 1962, when I was in Bonn, he had over 90 such cases. Dr. Lenz (13) undertook a study to ascertain in how many patients who had given birth to infants with phocomelia he could obtain proof that the mother had taken Contergan during early pregnancy. He considered a case as proven only by a p]aotostatic copy of a prescription or by a hospital record showing the date and amount of Contergan given. The difficulty in obtaining such information was great because prior to April, 1961, the drug was sold without prescription. By and large, women in the early months of pregnancy are not cared for in a hospital. Dr. Lens, however, found that a number of women had been admitted to a hospital for some minor operation before they knew they were pregnant. Many of these patients had received a sleeping tablet while in the hospital and thereby Dr. Lens could obtain proof that Contergan had been prescribed. In many West German hospitals sleeping tablets are given by the nurses as freely as laxatives are given in the United States. Few of us can remember what medicine we took a year or more ago. Far less, exactly when and how much we took. In some instances, however, special events enabled the patient to remember the date or the approximate time during which she took a sleeping tablet. Travel was a common event. Many people do not sleep well when traveling. Such persons usually know if and approximately when they took sleeping tablets. One woman knew the date she took a sleeping tablet: it was the night the neighboring farm house had burned down. Another woman recalled she had taken Contergan for 3 nights after her father.~ in-law had been murdered. The date was clearly imprinted on her mind. Two other incidents reported by Dr. Lens illustrate how difficult it may be to obtain accurate information. In one instance in which the mother gave birth to a baby with phocomelia, the doctor swore the mother had not received Contergan. He 0 0 THALIDOMIDE H Alpha (N~ phthalirnido) glutarimide 0 II N II I Fig. 7..-..-Formula of thalidomide. PAGENO="0392" :t536 COMPETITIVE PROBLEMS IN THE DRUG iNDUSTRY had prescribed an entirely different sedative. On investigation at the pharmacy where the mother had bought the medicine, Dr. Lenz found the prescription was stamped "drug not in stock, Contergan given instead." In another instance in which Dr. Lenz talked with the parents for more than one-half hour and both denied the mother had taken Contergan, 3 weeks~ later Dr. Lenz received a letter (I read the letter) saying : "I have been told not to write but I can no longer sleep without telling you I did take Contergan but, as my husband was once in a hospital for drug addiction, I had promised I would never take such a drug ; I could not tell him I had broken my promise." By the middle of March, 1962, Dr. Lenz had analyzed 50 cases (13) in which he Interviewed parents, reviewed bos~ital records, and determined the date of the last menstrual period and in many instances be obtained the date of c'once~tion and also had proof of the date on which Oontergan had been taken. Forty-five of 50 women had taken the drug between the 30th and 50th day and 5 had taken it between the 50th and 60th day after the last menstrual period. Among the 21 instances in which the date of conception was known, the mothers had taken contergan between the 28th and 42nd dray (inclusive) after conception. Although the exact time during which the drug has a teratogenic action may be found to vary slightly, the period in which it affects the development of the embryo appear's to be relatively brief. These observations clarify the finding of Dr. W. Hillmich (14) of G~ittingen who made a prospective study of 99 patients who had taken Oo*ntergan during pregnancy. He found none had taken the drug in the first 3 weeks; one had taken 1t in t'he fourth week, none in the fifth, one in the `sixth, none in the seventh, and `one in the eighth week. All of the remaining patients brad taken the drug after the ninth week of pregnancy. The mother who had Oontergan on the 42nd day after the last menstrual period was the only one who bad an abnormal baby. The woman who `had taken Contergan in the 6th week had taken it on the 51st day after her last menstrual period which l:S probably `safe provided `she had a normal ovulation time. All other's had taken the drug well after the sensitive period. The incidence `of phocoinelia in West Germany i's terrific. Studies from the Institute of Human Genetics in Mflnster showed that between 1949 and 1959 they saw an average of 4 children per year with severe malformation of the extremities. T'hese malformations included peromelia (amputation of a limb), amelia (absence of a limb which may be the extreme either of peromelia or of phocomelia), micromelia (a small limb), and phocomelia. Even the `pbo'comelia of former year's differed from the present phocoinelia in' th'at it was usually unilateral. Suddenly, in 1959, 3 case's of bilateral ph'o'comeli'a were seen in that institute; 26 cases occurred jfl 160 and 96 cases in 1961. Furthermore, to date 13 pairs `of twins have been registered; hence they estimated there `should be 1,300 caises. The Minister of Health of Westpha'lia has set up a name registry for all children With `defective hands and arms, `i.e., all `children' who would need orthopedic help. This registry included clubbed hands and p'olydacty:lis'm `as well as rphoco'melia. They estimate that about 80% of these cases will be phoco- melia. As of Jan. 1, 1962, they had 800 registered `cases and at that time reports bad been received from only one-half of W'estphal'ia. I saw the pile Of records for Janu'ary and February, 1962. These had n'ot yet been counted but there must have been approximately 200 This mdicates that there will be probably 1500 to 2,000 such children' in Westphalia and the North Rhineland `by August, 1962. This estimate agrees with the estimate from MUnster. Westphalia is but one section of West Germany. Thus the `estimation of 3,500 to 4,000 ca'ses appear's to be a minimal figure. Probably the number will be fa'r larger. Two-thirds of the children `are expected to live. We `visited Freihurg `because it was reported that there were 100 cases there. At the University Clinic, Dr. Keller `advised me that they bad seen approximately 10 or 20 cases `and showed me one `infant in the hospital. He kindly offered to look up the exact number. Subsequently, he `wrote me that they had `seen 37 infants in the clinic and they had received reports of 200 such infants born `in the environs of Freiburg. In contrast to these findings, Dr. Immon `at the Headquarters of the United States Army of Occupation in Heidelberg told me on March 6 `that he was reasonably confident that there had been no cases of pho'comelia among the 16,000 babies born in the U.S. military hospitals in Germany in 1961. He had PAGENO="0393" COMPETITIVE PROBLEMS IN THE DRI~G INDUSTRY 1537 traveled extensively and had visited all their hospitals. He had been shown the unusual cases but had seen no infants With phocomelia up to March 12, 1962. Further, they were certain that any and all such infants would be immediately evacuated to the United States. All evacuations passed through their office and no case of phocomelia had been reported. As of April 14, no such cases had been received from overseas at the Walter Reed Hospital in Washington, D.C. In a recent letter, Dr. Immon reported one infant born with phocomelia in a U.S. Army hospital. The infant's mother, who was a German, volunteered the infor- mation that she had taken Contergan in early pregnancy. Alas, the incidence in England is also high. Reports are steadily appearing in the Lancet of the occurrence of phocomelia in infants born of women who have taken thalidomide in early pregnancy. Dr. Clifford Parsons (15) advised me that at a recent medical meeting almost everyone in `the audience had seen at least ~one such case. The total incidence is expected to be in the hundreds but fortu- nately not in the thousands. Reports are still coming in from all over the World which ~how' that phoco- melia has occurred where Contergan has been used. As of March 22, 7 cases were reported in Sweden in which Contergan bad been purchased in Germany; 2 cases in Belgium and the Contergan was known to have been bought in Germany; 4 eases in Switzerland with a history of the ingestion of Contergan; 7 cases in Lebanon where the Portuguese preparation, Softenon, is available; 1 case in Isratd and the m~ther took Distaval; 1 case in Peru and the father had obtained ~Contergan in Germany. Seven cases have been reported in Canada in women who had taken Kevadon in early pregnancy. One' sad instance in the United States is that of a German woman who had married an American, and brought Contergan with her to the United States. She took the drug and has given birth to twins; one has phocomelia and the other duodenal atresia and a rectovaginal fistula. As yet, I have received no information of the incidence of phocomelia in Portugal. Dr. Lenz, however, has written me that he has learned of an outbreak of phocomelia in Brazil asstocia~ted with thalidomide. There are, however, still many perplexing problems. One concerns twins. Usually both twins are affected even when they are dizygotic but not always to the same extent, as in the above mentioned case. Another case is known in which one twin died at 5 months and was delivered at term with the living twin. `The living twin had a phocomelia and the bones of the dead twin were normal. I learned of a physician who had taken Contergan until she developed p~sriph- eral neuritis. Thereupon she stopped taking the drug until she was pregnant and then took it again through 2 successive ,pregnancies and both children were normal. The question arises as to how early in pregnancy did she take the drug, or is she one of the fortunate women? Everyone admits that no information is available concerning how many women may have taken the drug in the Sensitive period and have had a notmal child. Some doctors in Germany are still doubtful about the exact role of Conteçgan. Most doctors, however, believe that Contergan plays a major role. Dr. Pfeiffer remarked that most phenomena are more complicated than they seem and there- fore he cannot believe that the cause of phocomelia is as simple as Contergan alone. Nevertheless, he, too, believes that Contegan plays a major role. Many English physicians believe there must be some other substance or factor which also causes phocomelia because a history of Distaval cannot be obtained in every case. No relation has been found between the amount of the drug ingested and the severity of the malformation. A single dose of 100 mg. is thought to be sufficient to cause severe phocomelia and repeated doses may give only a mild nbnormality. The obly other drug with which I am familiar1 which is similar to Contergan is glutetbimide (Doriden). Although in a few instances, a history of glutethi- mide, not Contergan, has been obtained glutethimide has been widely used in Switzerland since 1955 and pbocomelia was not known until 1961 and then only a few cases were seen and in most instances, a history of Contergan was obtained. Little is known concerning the metabolism of thalidomide or bow it is ex- creted from the body, nor the length of time the teratogenic factor persists in the body. Virtually all that is known is that it is insoluble in water and in fat. 1 My attention has recently been called to 2 other drugs which contain radicles similar to `thalidomide, ilamely, bemegride (Megimide) and chiorthalidone (IlygrOton). PAGENO="0394" 1538 COMPETITIVE PROBLEMS IN TIlE DRUG INDUSTRY It affects the nervous system of mature people and the mesenchymal tissue of the embryo Few animal experiments have been done As previously mentioned thalido mide does not induce sleep in the usual laboratory animals Gninenthal has tried to reproduce phocomelia in rats mice and rabbits and has failed In Keil the drug was fed to hens and the chicks were normal GrUnenthal has shown that the drug passes through the placenta of rabbits but in their experience the offspring were normal. Somers (16) has, however, re- cently reported the production of abnormalities in rabbits which are remarkably similar to those in infants Although the offspring were not equally affected the extremities did appear to be grossly abnormal and radiological examination of the extremities showed that the long bones were defective. Although Somers believes the ill effects of thalidomide are proven others disagree Murphy (17) has recently reported the production of phocomelia in the offspring of a rat by intraperitoneal injection of an enormous dose of thalidomide on the 12th day of pregnancy. Clearly these observations require confirmation. Should the obser- vation not be confirmed, it should be remembered that thalidomide makes a horse sleep Therefore the horse might be found to react as man does Simian ex periments would also be of interest Once a susceptible animal has been found, a new avenue of approach to mal- formations will be available. It is quite clear that the drug acts during the period in which the embiyo is developing as is the case with the virus of German measles It is equally clear that it acts at a different point or in a different way than does the virus of German measles the resultant malformations are totally different Furthermore thalidomide is a synthetic chemical and it should be possible to test the action of the separate chemical radicals from which the drug is compounded Even though this drug has not been conclusively demonstrated to have the same effect on animal and man it does indicate that all new drugs which cir culate through the blood stream should be screened for their effect on the offspring of pregnant animals Distillers Limited is already attempting to develop tests by which to screen drugs for this serious untoward effect It is however an cx tremely difficult problem and it demands extensive study. Our Food and Drug Act although better than most of the other countries should be strengthened Women in the childbearing age must be educated not to take new drugs Often the harm is done before they know they are pregnant and with the best of mcdi cal knowledge some other harmful preparation may be incorporated into some drug We do not know how to completely eradicate such a danger but let us do what we can Thus the tragic effects of thalidomide have opened up a new avenue of ap proach to the etiology of malformations What is the precise factor that causes phocomelia? Where does it act? How does it inhibit growth? Many physicians have also asked how about its effect on cancer9 One sad story is we hope coming to an end It should be the dawn of new and better control of drugs Let us hope that itis also the dawn of new knowledge SUMMARY In 1960 Kosenow and Pfeiffer reported a new clinical syndrome the essential feature was phocomelia. The incidence of the malformations rapidly increased and by the end of 19t~1 thousands of children had been born with severe mal formations of the extremities The causative factor appeared to be an exogeneous agent Many retrospective studies were instituted Almost simultaneously Lenz in Hamburg and McBride in Australia suspected that the malformations were caused by taking thalidomide in early pregnancy Thalidomide is a synthetic drug deveoped by Grunenthal and marketed in Ger many as Contergan in England as Distaval in Portugal as Softenon as Kevoadon in the United States (though not released by our Food and Drug Administration) and as Kevadon and Tahmol in Canada It was an excellent sleeping tablet and tranquilizer and was added to a number of other compounds which were used for the relief of grippe migraine and asthma and also for expectorants The circumstantial evidence is overwhelming that this drug does cause severe malformations of the extremities. Grtinenthal showed that the drug passed through the placenta of rabbits Distillers Ltd in England have reproduced the malformations in rabbits by feeding the drug to pregnant animals Murphy has PAGENO="0395" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1539 produced phocomelia in the rat by an enormous dose of thalidomide given intra- peritonerall~ to a pregnant animal. Certainly new drugs, which are of use to persons of all ages and which enter the blood stream, should be screened for possible teratogenie action. Futhermore, young women must learn that nothing is foolproof and new drugs should not be taken unless absolutely necessary, as the damage often occurs before the woman knows she is pregnant~ This drug shows how serious the side effects of drugs may be and it also opens up a new avenue to the study of the etiology of malformations. GENERIC AND TRADE NAMES OF DRUGS Thalidomide-Contergan (West Germany), DistavaZ (British Commonwealth), Softenon (Portugal), Kevadon (United States and Canada), Tal'imoZ (Canada). Thalidomide is also a constituent of the following drugs: algosediv, peracon expectorans, grippex, polygripan (West Germany) ; Valgis, Tensival, Valgraine, Asmaval (British Commonwealth). Glutethimide-Doriden. Bemegricle-Megimide. Chlorthalidone-Hygroton. REFERENCES 1. Kosenow, W., and Pfeiffer, R. A.: Micromelia, Haemangioma und Duodenal Stenosis Exhibit, German Pediatric Society, Kassel, 1060; reported by title in Mount, Kinderrheilk 109:227 (March) 1961. 2. Wiedemann, H. R.: Iflnweis auf eine derzeitige Häufung hypo-und aplas- tscher Fehlbildungen der Gliedmasses, Med Welt 37: 1863-1866 Sept 16) 1961. 3. Wiedemann, H. R., and Aeissen, K.: Zur Frage der derzeitigen Häufung von Gliedmassen-Fehlbildungen, Med Mschr 12:816-818,1962. 4. Pfeiffer, R. A., and Kosenow, W,: Zur Frage einer exogenen Verursachung von schweren Extremitatenmissbildungen, Muench Med Wschr 104:68-74, 1962. 5. Lens, W.: Kindlicbe Missbilclungen nach Medikament während the Gravidi- tat, Deutsch Med Wschr 86 :2555-2556 (Dec 29) 1961. 6. McBride, W. G.: Personal communication from Distiller, Ltd., in London, 7. McBride, W. G.: Thalidomide and Congenital Abnormalities, Lancet 2:1358 (Dec. 16) 1961. 8. Lens, W.: Thalidomide and Congenital Anomalies, Lancet 1:45 (Jan. 6) 1962. 9. Speirs, A. L.: Thalidomide and Congenital Abnormalities, Lancet 1:303-305 (Feb. 10) 1962. 10. Weicker: Personal communication to the author. 11. Lens, W.: Thalidomide and Congenital Abnormalities, Lancet 1:271-272 (Feb. 3) 1962~ 12. Lens, W.: Eintstehung von Missbildungen durch Medikamente, Arrt Mitt 47 :494 (March 3) 1962. 13. Lens, W.: Personal communication to the author; full report to be given at International Pediatric Congress, Lisbon, Sept., 1962. 14. Hillmich, W.: Personal communication to the author. 15. Parsons, C.: Personal communication to the author. 16. Somers, G. F.: Laneet, April 28, 1962; personal communication, Brown and Somers of Distillers, Ltd., London. 17. Murphy, M. L.: Reported at meeting of American Pediatric Society, Atlan- tic City, May 10, 1962. [From the Scientific American, August 1962, vol. 207, No. 2] THE THALIDOMIDE SYNDROME A MILD AND SUPPOSEDLY SAFE SEDATIVE TAKEN BY PREGNANT WOMEN HAS DEFOEMER THE LIMBS AND OTHER ORGANS OF SEVERAL TBOUSANB INFANTS IN WEST GERMANY ENGLAND, CANADA AND OTHER COUNTRIES (By Helen B. Taussig) Two grossly deformed infants were the subject of an exhibit at the annual meeting of the pediatricians of the Federal Republic of Germany held in October, 1060, in the city of Kassel. Photographs and X-ray pictures showed that the PAGENO="0396" 1540 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY long bones of the infants' arms had almost completely failed to grow; their arms were so short that their hands extended almost directly from their shoulders. Their legs were less affected but showed signs of a similar distortion of growth. Both infants were also marked by a large hemangiorna (strawberry mark) ex- tending from the forehead down the nose and across the upper lip; one of them was also found to have a duodenl stenosis, that is, a constriction of the begin- rung of the small intestine. The physicians who presented the~e cases, W. Kosenow and R. A. Pfeiffer, members of the staff of the Institute of Human Genetics in Münster, had never seen quite this combination of anomalies in a single infant. They regarded it as a new clinical entity. The deformity of the limbs was characteristic of a malformation known as phocomelia, from the Greek words phoke, meaning seal, and melos, meaning limb. Phocomelia is so rare that most physicians never see it in a lifetime; more- ovre, it usuajly affects only one limb. Kosenow and Pfeffer reported that they could find no hereditary indication for the condition in the history of either family, no incompatibility in the blood types of the parents and no abnormality in the chromosomes of the tissue cells of either child. Guido Fanconi, a Swiss pediatrician who has long been interested in congenital deformities, declared that he too had never seen infants afflicted this way. Otherwise little note was taken of the exhibit. I missed it myself, although I was at the meeting In retrospect it is surprising that the exhibit did not attract a great deal of `attention. During 1960 almost every pediatric clinic in West Germany had seen infants suffering such defects. In Mtinster there bad been 27, in Hamburg 30 and in Bonn 19. There had been perhaps `a dozen cases of phocomelia in 1959, whereas in the preceding decade there had been perhaps 15 in all of West Germany. During 1961 the incidence of phocOmelia increased rapidly; hundreds of afflicted infants were born. When the West German pediatricians gathered fo'r their 1961 meeting in No- vember at Düsseldorf, almost all of them were aware of the mysterious outbreak of phocomelia. At the meeting Widukind Lenz of Hamburg made the disclosure that he had `tentatively traced the disease to a new drug that had come into wide use in sedatives and sleeping tablets. The generic name of the drug was thalido- mide. Under the trade name Contergan, it had been marketed as freely as aspirin in West Germany from 1959 into the spring of 1961. Lenz had found that many mothers `of "seal limb" infants admitted to the Hamburg clinic had taken this drug early in pregnancy. Contergan and other preparations containing thalido- mide have now been withdrawn from sale. But infants injured by the drug are still in gestation. When the last of them has been born by the end of this sum- mer or early in the autumn, thalidomide will have produced deformities in 4,000 or even as many as 6,000 infants in West Germany alone, and probably more than 1,000 in other countries where it has been marketed. The one-third who are so deformed that they die may be the luckier ones. It happens that thalidomide-containing drugs did not reach the market in the U.S. This was because of a lucky combination of circumstances `and the alert- ness of `a staff physician at the Food and Drug Administration-not because of the existenc'e of any l~gal requirement that the drug might have failed to meet. If thalidomide had been developed in this country, I am convinced that it Would easily have found wide distribution before its terrible power to cause deformity had become apparent. The marketing techniques of the pharmaceutical indus- try, which can saturate the country with a new drug almost as soon as it leaves the laboratory, would have enabled thalidomide to produce thousands of de- formed infants in the U.S. I believe that it is essential to improve both the tech- niques for testing and the legal controls over the release of new drugs. The news that `a large number of malformed infants had been born in West Germany and that a sleeping tablet was suspect~ed as the cause first came to me in late January of this year. I was particularly concerned because of my lifelong interest in malformations~ That a drug was implicated was of especial interest, because little is known about the cause of the various congenital anomalies that arise in the course of gestation. I immediately went to West Germany to investi- gate the situation, and I have also conferred and corresponded with physicians in other countries where thalidomide, under various names, has `been sold. In West Germany I was told that a Swiss pharmaceutical house, interested in producing a new sedative, had first synthesized thalidomide in 1954. Be- cause it showed no effects on laboratory animals the co'mpany discarded it. Then the West German firm Chemie Grünenthal undertook the development of the compofind. Once again thalidomide showed no effect on laboratory animals. PAGENO="0397" COMPETITIVE PROBLEMS IN THE DRtJG INDUSTRY 1541 Since the structure of the molecule suggested that it should work as a sedative, Grtinentbal tried it as an anticonvulsant for epileptics. It did not prevent con- vulsions, but it worked as a hypnotic, acting promptly to give a deep, "natu- ral" all-night sleep without a hangover. Given the trade name Contergaii, it became during 1960 the favorite sleeping table of West Germany, inexpeti- sively available without a prescription and widely used in homes, hospitals and mental institutions. It turned out to be as safe for humans as for animala Would- be suicides who tried it after it came on the market survived larg~ doses of it without harm. Grilnenthal combined thalidomide with aspirin and other medicines. Ger- mans consumed these compounds-~---Algosediv, Peracon Expectorans, Grippex and Polygrippan-for such conditions as colds, coughs, grippe, nervousness, neuralgia, migraine and other headaches and asthma. A liquid form made especIally for children became West Germany's baby sitter. Hospitals employed it to quiet children for clectroencephalographic studies. As an antiemetic, it helped to combat the nausea of pregnancy, and of course Contergan gave many a pregnant woman a good night's sleep. Grünenthal was manufacturing it almost by the ton. Soon pharmaceutical companies in other countries began to make or market thalidomide under license from Grtinenthal Distiller's (Biochemicals) Ltd. sold it as Distaval in the British Isles, Australia and New Zealand. Combinations received the trade names of Vaigis, Tensival (a tranquilizer), Valgraine and AsmavaL An advertisement in Great Britain emphasized the safety of the drug with a picture of a small child taking a bottle from a medicine shelf. From Portugal it went into local and international channels of distribution as Softenon. In Canada Frank W. Homer Ltd. of Montreal marketed it as Taliinol and the THALIDOMIDE is a synthetic 4ru~ in this diagram, of its moiecule~ carbon aton~s are, repr~sented by black bali~,, hyd~'oge~i by small ~iay hails, oxygen. by whfte baih and the two nitrogen atoms by iai~ge gray ~ba11s. PAGENO="0398" 1542 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Canadian branch of the Wm. S. Merrell Company of Cincinnati as Kevadon. In September, 1960, the Merrell Company applied to the Food and Drug Administra- tion for clearance to sell Kevadon in the U.S. At that time no one had reported any untoward side effects from thalidomide. During the next few months, however, German medical journals carried reports of a new polyneuritis associated with long-term use of the drug. Patients com- plained of tingling hands, sensory disturbances and, later, motor disturbances and atrophy of the thumb. By April, 1961, there was a sufficient number of ill effects reported in West Germany following the use of the drug to place the thalidomide compounds on the list of drugs for which prescriptions were required. (It was under prescription from the beginning in most other coun- tries.) Nevertheless, thalidomide remained popular and continued in wide- spread use in the home and in hospitals. By the summer of 1961 physicians all over West Germany were realizing with alarm that an increasing number of babies were being born with disastrous de- formities of their arms and legs. In Kid MOnster, Bonn and Hamburg four dif- ferent investigations were under way. From a study of 32 cases in Kid and its environs H. R. Wiedemann found that the malformations followed a specific pattern, although they varied in severity. Abnormality of the long bones of the arms characterizes the great majority of the cases, with the legs involved in half of these. The radius or ulna (the fore- arm bones) or both may be absent or defective. In extreme cases the humerus (upper-arm bone) also fails to appear. Typically both arms are affected, al- though not necessarily equally. When the legs are involved, the hip girdle is not fully developed. Dislocation of the hip and outward rotation of the stub of the femur turns the deformed feet outward. The worst cases have neither arms nor leg; since they cannot turn over in the crib or exercise they usually succumb to pneumonia. The hemangioma of the face, as Pfeiffer and Kosenow pointed out, is possibly the most characteristic feature of the syndrome. it is, however, neither harm- ful nor permanent. A saddle-shaped or flattened nose is common. In some cases the external ear is missing and the internal auditory canal is situated abnormally low in the head. In spite of this deformity hearing tends to be fairly good if not normal. Many of the children display paralysis of one side of the face. Many suffered from a variety of malformations of their internal organs, involving the alimentary tract and also the heart and circulatory system. Most of the children seem to be normally intelligent. Pfeiffer and Kosenow in MOnster had found no evidence that the phocomelia in their first two cases was hereditary. Eventually they completed detailed studies `of 34 cases, with the same result. This was surprising because many of the previous eases of phocomelia could be traced back in the family~ These two investigators concluded that an unknown agent from the environment, affecting the embryo at some time between the third and sixth week of pregnancy, had caused the damage. During this period, when most women do not yet know they are pregnant, the embryo goes through the principal stages of development. Was the unknown agent a virus? An infection by rubella, or German measles, during this critical period of gestation results in severe malformations but not In phocomelia. That it might be some other virus seemed to be ruled out by the fact that the increase In the incidence of phocomelia had been steady, not abrupt, and by the fact that the cases were confined within the boundaries of West Germany. By the time of last year's pediatric meeting at Dusseldorf in late November the range of speculation Included radioactive fallout. Lens meanwhile had formed a new suspicion. Like the other investigators, he had been sending out lengthy questionnaires to the parents of deformed infants and to the physicians who attended them, asking about X-ray exposure, drugs, hormones, detergents, foods and food preservatives, contraceptive measures and tests for pregnaney In his initial returns he noted that approximately 20 per cent of the mothers reported taking Contergan during pregnancy. On November 8, he recalls, It occurred to him that Contergan might be the cause. He now asked all the parents specifically about Contergan, and 60 per cent reported use of the drug. Many of the mothers said that they had considered the drug too innocuous to mention on the questionnaire. On November 15 Lens warned Grilnenthal that he suspected Contergan of caus- ing the catastrophic outbreak of phocomelia and be urged the firm to withdraw it from sale. On November 20, at the pediatric meeting, he announced that he suspected a specific but unnamed drug as the cause of the "Wiedemann syn- PAGENO="0399" VICTIM OF THALIDOMIDE SYNDROME typic~a11y has short, deformed and useless arms and hands. The actual case shown in this drawing displays the hemangioma, or strawberry mark, on the forehead, nose and upper lip, which is the most characteristic (a!- though harmless) feature of syndrome. Other abnormalities that may occur include deformed legs and feet and a wide variety of deformations of the ears, digestive tract, heart and large blood vessels. Most of the afflicted children have normal intelligence. PAGENO="0400" 1544 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY drome" and said that he had warned the manufacturer. That night a physiciaiv cam.e up to Lenz' and said: "Will you tell me confidentially, is the drug Conter- gan? I ask because we have such a child and my wife took Contergan." Before the meeting was over the doctors generally knew that Lenz suspected Contergan. On November 26 GrUnenthal withdrew' the drug and all compounds containing it from the market. Two days later the West Germany Ministry of Health issued a firm but cautious statement that C?ontergan was suspected as the major factor' in causing phocomelia. Radio and television stations and the front pages of' newspapers promptly carried announcements warning women not to take the~ drug. On the other side of the world W. G. McBride, a physician in New South Wales, Australia, saw three newborn babies with severe phocomelia during. April, 1961. In October and November he saw three more. From the histories of the mothers he found that all six had taken Distaval in early pregnancy. McBride' notified the Australian branch of Distillers Ltd. and it cabled his' findings, to the London headquarters on November 27. This and the news from. Germany caused. the firm to withdraw the drug on December 3. Because of the demand by physicians it has been returned to limited sale in England, but in Germany it is now illegal to possess thalidomide. The news of the Australian experience prompted A. L. Speirs, a physician of Stirlingshire, Scotland, to review 10 cases of phocomelia that he had seen in his practice during the preceding months. By checking prescription records and. medicine cabinets in the victims homes he obtained positive proof that eight of the mothers had taken Distaval in early pregnancy. Typical Phocomelia or seal limb is readily apparent in this X ray of chest shoulders and arms of West German infant In classic phocomeha usually only one arm was affected Phocomelia caused by thalidomide almost always deforms both arms Thus in the last weeks of 1961 circumstantial evidence accumulating in various parts of the world indicated that thalidomide played an important role in the `causation of phocomelia. Physicians now began asking women who were still pregnant about their experience with the drug. One obstetrician in Germany asked 65 pregnant women if they had taken Contergan in early pregnancy. Only one said that she had. The physician declared that if she had an abnormal baby he would believe Lenz She did' A drug w;ith a molecular structure similar to' that of thalidomide is D'oride'n,. also used as a sedative. Although in a few cases of phocomelia the' mother' says she took Doriden, not C'o'ntergan, Doriden has been widely used in Switzerland" PAGENO="0401" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1545 since 1955, and phocomelia did not appear there until 1061. Almost all the few Swiss cases have been traced to Contergan from Germany. Little is known about the metabolism of thalidomide, how the body excretes it or how long the de~ormity-preducing factor persists in the body. About all that is certain is that it Is insoluble in water and In fat. Obviously the usual labora- tory animals metabolize it differently from human beings; it does not induce sleep in the animals. Investigators at the Grfinenthal laboratories have tried unsuccessfully to produce phocomelia In rats, mice and rabbits. They have shown that the drug passes through the placenta of rabbits, but the offspring were normal in these experiments. G. F. Somers Of the Distillers Ltd. laboratories has fed massive doses to pregnant rabbits. Tire rabbits did not sleep; they did, however, produce offspring with abnormalities remarkably similar to those in human infants. Since thalidomide makes a horse sleep, it may be that the horse will react in other ways as man does. Experiments with monkeys and apes will also be of interest. When the proper experimental animal is found, thalidomide does offer the possibility of stud~4ng the origin of malformations. It is not yet possible to determine the exact number of Infants born with phocomelia in West Germany, but the outbreak was devastating. The records of the Institute of Human Genetics in Mtinster show three cases of bilateral pho~ comelia in 1959, 26 caises in 1960 and 96 in 1961. Up to this spring 13 pairs of twins afflicted with phoeom.elia had been registered. Since twins occur once in every 100 birth~, the institute egtimates that there will be 1,300 cases in the state of North Rhlne-Westpbaiia, where it is located. It is an indication of the preva- lence of phocomelia that the stat&s Ministry of Health has set up a registry for all children with defective hands and arms who will need orthopedic help. As at January, 800 had been registered, 80 per cent suffering from phocomelia, and reports were in from only half the state. By now the total may have reached 2,000. Applying this experience to the population of West Germany as a whole, the country anticipates a minimum of 4,000 cases. I should not be surprised by a total of &000. There is every reason to believe that two-thirds of the infants will live for many years; indeed, the children appear to have a normal life expectancy. * In England, alas, the incidence is also high. Reports of phocomelia associated with Distaval appear regularly in The Lancet, the British weekly medical jour- naL Clifford G. Parsons of Birmingham has advised me that almost every physi- cian at a medical meeting in England last spring had seen at least one case. The total for the the country will probably be in the hundreds, however, not in the thousands. Reports are still coming in from all over the world showing that phocomelia has occurred wherever thalidomide has been used. Sweden has had 25 cases, from Contergan purchased in Germany. Switzerland has had four cases. The Portuguese preparation, Softenon, has caused seven cases in Lebanon. Distaval has produced a case in Isiraei. In Peru, Contergan obtained by the father in Germany caused a case. Lenz has written me of an outbreak of phocomelia in Brazil. As yet I have received no figures for Portugal. In September, 1960, when the Merrell Company apj~lie4 t~ the Food and Dri~ig Administration for permission to distribute the thalidonlidu compound, none of these untoward developments could have been anticipated. Clearance was delayed because the initial submission of papers was found to be "incomplete," Over the next few months, while the manufacturer gathered an4 filed additipnal material in support of the application, the first indications of the drug's ~ieitropathic side effects were reported in the German medical press. Frances Oldham Kelsey, a physician and pharmacolqgist at the agency, tool~ note o~ tl~ese reporls. Sjle also noted that the proposed label for. the drug recommended its use against the nausea of pregnancy. Frpm her work with quinine in connection with the malaria project during World War II, 1\~rs. Kel~ey had become "particularly consciOus of the fact that the fetus or newborn may be, pharmacolo~lcally, an entirely different organism from the adult." She therefore requested more data from the manufacturer to show that th.e drug was safe in pregnancy. 13ef~~e her qu~s~iobs were answered the outbreak of phocomelia i~n Gergu~ny had. brought wlthdtnWal of the drug from the market in that cQnntry~ if tha~içlomide had been devel~pe~ in t$s country, the stcir~ woti]4 have been quite different. Almost everyone agrees that with no kp~wjqdge of the delayed neuropathic effects of the drug and no appreciation of its dangers in pregnancy, the thought would not have occurred to anyone that it might injure the unborn 81-280-68-pt. 4-26 PAGENO="0402" 1546 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY child. Therefore permission for sale of the drug as a sedative would have been granted; it was an excellent sedative and appeared to be safe. In the U.S. there have been only a few cases of the syndrome-two of them the twin offspring of a German woman who had married an American and brought Contergan with her to the U.S. Even the families of U.S. personnel sta- tioned abroad have escaped-with one exception. At the U.S. Army headquarters in Heidelberg, in March, Thomas W. Immon was able to assure me that not one of the 16,000 babies born in U.S. hospitals in Germany during 1961 had pho- comelia. More recently, however, he has had to report the birth in a U.S. Army hospital of one infant with phocomelia The mother, a German, reported that she had taken Contergan in the early weeks of her pregnancy. Unfortunately the people of Canada have had a different experience, even though the Dominion Government has a drug-regulating agency like that of the U.S. With two thalidomide preparations on the market in 1961, many pregnant women were exposed to the drug. At least 12 have delivered offspring afflicted with deformed arms and legs. The manufacturers issued a warning to physicians in December, advising them not to prescribe thalidomide for pregnant women. It was not until March, however, that governmental authorities asked the manu- facturers to withdraw the drug entirely. Between now and the fall there will un- doubtedly be additional casualties. A generation ago new drugs, particularly those for relatively minor com- plaints such as insomnia, only gradually achieved widespread popularity. The rather small number of people using them in the first few years provided, albeit unwittingly, test cases not only for the efficacy but also for the long-term safety of the drug. Today "educational" representatives of drug houses visit each physician regularly. Pounds of lavish and expensive drug brochures assault the physician by mail. Most medical journals are crowded with handsome advertise- ments, many printed in full color on heavy cardboard or metallic paper, extolling the virtues of this year's model or modification of some recently invented tran- quilizer, diuretic or antlhypertensive compound. New drugs thus find huge mar- kets within a few months. In most countries, with the exception of Canada, governmental regulation of the pharmaceutical trade is less stringent than it is in the U.S. The Food and Drug Administration, however, is limited to considering only the safety and not the efficacy of a drug, and it exercises no control until the drug is ready for sale. During testing, conducted by and for the drug houses, a new compound may be distributed for clinical trial to many physicians. They are supposed to warn patients that the drug is experimental and to obtain a release signed by the patient. Not all physicians keep careful records of the cases in which they have distributed such test drugs. Clearance by the Food and Drug Administration, which rests on evidence of safety submitted by drug companies, must often be based in part on reports from observations made under clinical conditions that are, to say the least, not ideal. Certainly the procedure needs strengthening here. Until recently no thought had been given to the need for the testing of drugs for potential harmfulness to the human embryo. In my laboratory~at the Johns Hopkins School of Medicine I have not been able to obtain abnormalities in baby rabbits with thalidomide primarily because the massive doses I have used bring on so many abortions. This illustrates one of the problems .of testing new drugs: what size dose in animal makes for a fair test? As thalidomide shows, animals may not react at all like humans. Of course, no drug can ever be certified as completely safe. But all the hazards of a given drug should be established before it is marketed. In dealing with cancer and other serious diseases there Is some justification for taking chances with new drugs. The less serious the illness is, the more certain it should be that the drug is harmless as well as effective. In the case of thalidomide, I wonder bow long it would have taken to determine the cause of the malformations if the drug had produced some more common but less spectacular congenital defect. Any drug labeled safe should be relatively harmless for all people of all ages, inclu4lng the unborn. Married women of childbearing age should avoid drugs as much as possible, particularly new ones. For most people the story of thalidomide has ended. The tragedy will go on, however, for the infant victims of the "harmless" sedative and their families for the rest of their lives. PAGENO="0403" FOURTH WEEK DEVELOPMENT OF HUMAN EMBRYO from third week after conception (far Left) through eighth week (far right) is cruciaL FIFTH WEEK The embryo grows from about a quarter of an inch in length at end of third week to one and a quarter inches at end of eighth. Thalid~ PAGENO="0404" SIXTH WEEK SEVENTH WEEK omide seems to cause almost all its deformities when the mother takes the drug during the fourth, fifth or sixth week of pregnancy, as limb buds, ears, intestinal tract, heart and blood vessels are forming and going through first growth. These embryos are normal. EIGHTH WEEK PAGENO="0405" COMPETITIVE PROBLEMS IN TIlE DRUG INDUSTflY 1549 [From the American Journal of Diseases of Children, August 1962, vol. 104, pp. 111-118] TnALIDo~xnJl-A LESSON IN REMOTE EFFECTS OF DRUGS In late January, 1962, my attention was attracted to reports of an outbreak of congenital malformations in children being born in Germany and its possible re- lation to a specific drug. Because of my interest in congenital malformations of the heart I decided to examine the situation myself. My trip was supported by grants from the International Society of Cardiology Foundation, the Heart Association of Maryland, and the National Institutes of Health. I traveled throughout West Germany with the exception of West Berlin. The results of this investigation seem to me so important and so pressing that I feel it my duty to report them to the medical profession without further delay. The malformation with which I was concerned was phooo'melia; the name comes from the Greek words Phokos, meaning seal, and Melos, meaning extremi- ties. According to definition the development of the limb buds is so affected that the hands and feet arise from the trunk in a way suggestive of the flippers of a seal. Actually the injury affects the long bones of arms and legs; the hands `and feet arise beyond the affected bone. In some instances the arm's are rudimentary- 4 such children are shown in Figure 1. The malformation involves both sides, but usually one side is more seriously affected than the other. The legs, too, may be affected. In 50% of the cases the arms only were affected, and in another 25% both the arms and legs are affected. At birth, a central hemangioma extending from the forehead over the nose to form a moustache on the upper lip is con- sidered by Pfeiffer as characteristic of the syndrome. In some babies the external ear was absent. In the most severe cases malformation of the gut occurred accom- panied by duodenal stenosis and anal atreasia, asplenia, and occasionally by a malformation of the heart. Mental retardation was found in only approxi- mately 1%. Phocomelia had long been known as a rare malformation. In 1959 a few cases were seen; these increased in 1960. By 1961 there was a veritable "epidemic" of phocomelia in Germany. Last November, Lenz suggested the possibility that the occurrence of the sudden outbreak of this malformation was connected with the use of a new sleeping tablet. The drug is known as thalidomide. It is a synthetic preparation whose chemical structure is shown in Figure 2. The drug was made by GrUnenthal and marketed as Contergan in Germany, Distaval in the British CommonweaItb, Softenon in Portugal, Kevadon (on trial in the U.S.A., but not released by the Food and Drug Administration), and Talimol In Canada. Thalid- omide was also added to other medicines. The German drugs known as Algosediv, Peracon Expectorans, Grippex, and Polygripan all contain thalidomide, and so do the English drugs, Valgis, Tensival, Vaigraine, and Asmaval. The drug was invented by a German firm and first marketed during 1958; by 1960 it became Germany's most popular sleeping tablet and tranquilizer. The drug was sold without prescription until its long-continiied une was found to cause polyneuritis; thereafter it was sold freely on prescription. In November, 1961, W. Lenz in Hamburg (Germany) and W. G. McBride in Australia Independently and almost simultaneously reall~ed there was a close association between the new sleej~1ng tablet and the outbreak of phocomelia. Both doctors reported their findings to their respective manufacturers in Germany and in A~ustralla, and they also reported them to their Medical Societies, As soon as A. Sjders in Scotland heard these reports he checked his 10 recent cases of pho- comella with great care and obtained positive proof that S of the 10 mothers had taken Distaval.. Thus, in three widely separated parts of the world, phocomelia occurred In the offspring of women who had taken thalidomide In early pregnancy. The dru~ was witl~c1rawn from the market at the end of November, 1961. Since then much circumstantial eYidence of the relation betwee~ thalidomide and phocomelia has been collected. Lenz told me in March, 1962, that be had collected 50 cases of women with infants who have phocomelia in whom be knows the date of the last menstrual period (in about one-half of the instances the date of conception) as well as the date at Which Contergan was taken, either as recorded on a hospital chart or a photostatic copy of the prescription. He found the sensitive period was between the 30th and 60th day after the last menstrual period; in most cases the drug had been taken between the 30th and 50th day. In the cases in which the date of conception was known the sensitive period was from the 28th to 42d day inclusive. The sensitive period may be found to vary, and some women may prove to be Immune, but the circumstantial evidence is overwhelming that the drug, if PAGENO="0406" 1550 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY FIGuRE 1 PAGENO="0407" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1551 Thalidomide. FIGURE 2. taken during a sensitive period, can cause phocomelia. A single dose of thalidomide at the sensitive time is thought sufficient to damage the embryo. The most conservative estimate is that by August 1962, 3,500 babies will have been born in Germany with phocomelia; two-thirds of whom will live. England will probably have several hundred. The drug was not passed by the U.S. Food and Drugs Administration; therefore, its use was not permitted to the U.S. Army of Occupation in Germany, and consequently the wives of men in our Armed Forces have been spared. There were 16,000 birth:s in 19~31 among the wives of the Army of. Occupation, and no cases had been reported up to March 10. 1962. The U.S. Army Headquarters had no knowledge of cases of phocomelia which might have occurred among German wives of American soldiers who were cared for by German doctors. Although our law requiring careful tests on animals before a drug is released by the Food and Drug Administration has been a tremendous protection to our country, nevertheless, the routine testing of the effects of drugs on the offspring of pregnant animals is not regularly required. Needless to say, this experience in Germany and the British Commonwealth illustrates the need for stricter laws and for routine testing of the effect of all drugs on pregnant animals. Definite proof that thalidomide does cause phocomelia must await further confirmatory animal experimentation or the cessation o1~ the outbreak in August, 1962, which will be eight month~ after the withdrawal of the drug. Nevertheless, the circumstantial evidence is so strong that this drug does cause congenital malformations, and the effects on the children are so terrible that I feel that the situation should be brought to the immediate attention of the medical profession in this country. It is also important to remember that in many instances the damage is done before the mother knows she is pregnant. Therefore, young women must learn to be cautions about new drugs. Until research concerning the proper tests has been completed, doctors must bear in mind that sleeping tablets, tranquillizers, and other apparently innocent drugs may do terrible harm to the rapidly growing embryo and the unborn child. HIsLEN B, TAUSSIG, M.D., Professor of Pediatrics, Johas HopMas Hospital, Baltimore. [From Science, May 25, 1962, vol. 136, No. 8517] DANG]~iROUS PIIANQUTLIPY In late January 19~32 my attention was attracted to an outbreak of congenital malformations in children in Germahy and its possible relation to a specific drug. Eecaiisé of my interest In congenital malfortnatiolls of the heart I de- cided to examine the situation myself. The malformatioft was phocomelia, which is characterized by reduction in the length of the long bones of the arms or legs, or both. In extreme cases the appendages are reduced to completely functionless nubbins. Occasionally the exterfial ear is absent, and in the most severe cases the visceral organs are badly malformed. Phocomelia has long been known as a rare malformation. In Germany, a few cases were seen in 19&~, more were seen in 1960, and oases In "e~1demic" num- bers were seen in 1961. By November 1961, W. Lens of Hamburg and W. G. McBride In Australia suggested that the outhreak was con~ieeted with the use of a new sleeping pill and tranqulliser containing thalidomide [alpha-(N- phthalimido)glutatlmide]. A. Spiers In Scotland ~oufirmed the relation b~ show. PAGENO="0408" 1552 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY ing that the mothers of at least eight out of ten of the affected babies had taken the drug. Thalidomide was on trial In the United States, but fortunately it had isot been approved for use by the Food and Drug Administration, owing to the fact that polyneuritis developed in some users and owing also to Dr. Frances 0. Kelsey's doubt about the safety of its use in pregnancy. The drug was first marketed in Germany in 1958, and by 1960 it had become Germany's most popular sleeping tablet and tranquilizer. It was sold without prescription until the polyneuritis showed up; thereafter it was sold freely on prescription. Thalidomide was withdrawn from the market in Germany by November 1961 and slightly later in England, Australia, and Canada. Much additional circum- stantial evidence of the relation between thalidomide and phocomelia has now been collected. Lenz (personal communication) has studied 50 cases of women whose offspring have phocomelia and who bad also taken the drug during..preg- nancy. He finds that the period of sensitivity is between days 30 and 60 after the last menstrual period, and that in most cases the drug had been taken between days 30 and 50. In those cases in which the date of conception was known, the period of sensitivity was from the 28th to the 42nd day. The most conservative estimate is that by August 1962 some 3500 babies with phocomelia will have been born in Germany and several hundred will have been born in England and elsewhere. Definite proof that thalidomide does cause phocomelia must await further confirmatory animal experimentation or cessation of the outbreak in August 1962, 8 months after withdrawal of the drug. Nevertheless, the circumstantial evidence that this drug does cause congenital malformations is so strong, and the effects on the children are so terrible, that I feel the situation should be brought to the Immediate attention of the public In this country. It is also important to remember that in many instances the damage is done before the mother knows she is pregnant. Therefore, young women must learn to be cautious about new drugs. Until new laws have become effective, and indeed until research for the proper tests on pregnant animals has been completed, physicians must bear in mind that sleeping tablets, tranquilizers, and other apparently innocent drugs may do terrible harm to the rapidly growing embryo and the unborn child.- HELEN B. TAussIa, M.D., Johns Hopkins Hospital, Baltimore, Md. (This editorial is based on a longer editorial to be pubUshed soon in the New England Medical Journal.) ______ {From American Journal of Obstetrics and Gynecology, St. Louis, vol. 84, No. 7, p. 979, Oct. 1, 1962] PH000MELIA AND TuALID0MIDE To the Editors: This is a comment with reference to the article, "Phocomelia," by P. M. Dunn, A. M. Fisher, and H. G. Kohler of Birmingham, England, as well as your editorial in the same issue (August 1). As part of a government mission to Europe to inspect these babies, I think the magnitude of the tragedy can scarcely be overstated. At the end of November, 1961, when the possible relation between thalidomide and phocomelia was reported, the drug was withdrawn from the West German and British markets. Nevertheless, the incidence in West Germany is terrific. The most conservative estimate is that a minimum of 3,500 infants will be born with phocomelia by August, 1962, 8 months after the withdrawal of the drug. Phocomelia has appeared where the drug has been available. Thus, the British Commonwealth has several hundred cases of phocomelia. Sweden has reported 25 cases with 100 per cent history of Contergan. Belgium has a number of such cases; Softonon is sold there. Italy has recently reported 5 cases in 5 weeks. Brazil has an epidemic of phocomelia related to thalidomide. Canada had both Talimol and Kevadon and, unfortunately, these drugs were not withdrawn until April 1, 1962; therefore, it will be November before the last of these unfortunate babies have been born. The United States Army of Occupation in West Germany has been spared because the United States Food and Drug Administration re- fused the application of the Merrill Company to market Kevadon and no drugs :are permitted in the United States military services which have not been ap- proved by the Food and Drug Administration. A few cases, however, will ~nndoubtedly occur in the United States as travelers from other countries have ~bought the drug abroad and brought it to this country. PAGENO="0409" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1553 The Food and Drug Administration would probably have permitted the sale of thalidomide had the drug been invented in this country because it was the finding th~tt the long-continued use of the drug had caused polyneuritis in adults, combined with the advertisement by the Merrill Cbrnpany that in addition to being a sedative the drug was an antiemetic in pregnancy, which led to the refusal of the Food and Drug Administration to permit the sale of the drug in this country, as Dr. Kelsey did not think it had been proved safe for pregnancy. The routine testing for the teratogenic action of drugs has not been required in this country. Indeed, it still remains to be seen how easily the teratogenic action of the drug can be produced in animals. The injury occurs as the embryo is developing; thus, the damage is done early in pregnancy-often before the woman knows that she is pregnant. Therefore, women of the childbearing age must be taught to stay away from drugs. Physicians in Germany, England, and Canada are urging that careful records be kept of all drugs taken by women during pregnancy, and that this information together with a report of the infant's condition be sent to a central computing office in an effort to detect any untoward effects of drugs. HELEN B. TAussIG, M.D., Department of Pediatrics, The Johns Hopkins University School of Medicine. [From Circulation, March 1963, Vol. XXVII, No. 3] EDITORIAL 1-THALIDOMIDE The effects of the thalidomide upon the unborn child are now well known. Even though the precise mechanism by which thalidomide impairs growth remains to be explained, it is clear that thalidomide has totally different effects upon the adult and the embryo. For man, it is an excellent sleeping tablet but its long-continued use injures the nervous tissue and ëauses polynéuritis. In the growing human embryo it injures the mesenchymal tissue and causes phocomelia and abnormalities of the internal organs. In most laboratory animals the drug is ineffective. It has, however, now been shown that the absorption of thalidomide varies greatly in different animals. Rabbits fed 75 times the dose given to humans have a blOod level three times that normally found in man after a therapeutic dose of 100 mg. These high doses have caused phocomelia in the offspring of rabbits when fed to a pregnant rabbit at the critical time. It is important to appreciate that injury to the embryo occurs during a relatively brief specific time, i.e., the time when the limb buds are forming; Thus the drug can be taken at other times during pregnancy without injury to the child. The number of women who may be immune and may be able to take the drug during the "sensitive" period and have a normal child is not known. Nevertheless, a single dose of 100 mg. of thalidotnide during the "sensitive" period, which for woman appears to be between 28 and 42 days after conception or the thirtieth to sixtieth day after last menstrual period. may cause severe injury to the fetus. A single dose of 50 mg. is suspected of causing injury; even as little as nine daily doses of 110 mg. of thalidomide have been known to cause severe deformity of the offspring. The problem concerning the safety of drugs will require much difficult re- search and much careful testing. In the final analysis one cannot be certain of man's reaction to a drug until it is given to man. Nevertheless, a number of excellent suggestions have been made. It has been suggested in Germany and England that a record be kept of all drugs taken by women during pregnancy and that the report, together with the infant's condition at birth, be sent to a central computing office. Such a sys~ tern would permit the detection of gross malformations that were readily apparent at birth. The cards should be set up In such a manner that subsequent information concerning mother and child could be added thereto, so that the late effects of drugs and more snbtle abnormality might be detected. The above suggestion is excellent, It would seem wise, eventually, to have some similar arrangement for testing all new drugs that have a systemic From the Department of Pediatrics, The Johns flopkins Vnlverslty School of Medicfne, Baltimore, Marrland. PAGENO="0410" 1554 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY reaction. Such an undertaking Is difficult; the difficulty, however, should be con- sidered as a challenge. A central regulatory agency is necessary. A central office need not necessarily be a government office but It must be a disinterested central regulatory office with no financial interest in any drugs or substances coming within its province to evaluate. Another excellent plea has been made in England, namely, that the law be changed in regard to prescriptions. The present law in England and the cus- tom In our country is never to put the name of the drug on a prescription unless requested by the physician. The reverse Is recommended. In England one woman, after she had had one infant born with phocomelia, unknowingly because no name was on the bottle, took Distaval in a subsequent pregnancy and has two children with phocomelia. To prevent such catastrophies, it would be wise always to have the name of a drug on a prescription, unless requested by the physician that the name be withheld. Our concern should not be limited to our own country. Communications between nations is important. The fact that thalidomide was withdrawn from the Ger- man and English markets at the end of November and early December 1961 and was not withdrawn in Canada until the end of March 1962, and in Italy or Japan until the end of May 1962, shows a basic difficulty in communications. Thalidomide was marketed under at least 52 different names. To my certain knowledge phocomelia has occurred in 19 countries following the use of thalido- mide. A number of countries have no food and drug regulations. The only way the doctors hear of untoward effects is through articles appearing in medical journals. Consequently warning reaches them 6 to 18 months late. It takes time for the investigator to amass the information. Frequently it takes 6 months or more for publication and another month or two for perusal of the journal in a distant land. It is fundamentally wrong that a drug suspected of a serious un- toward reaction should be permitted to circulate in foreign lands after it has been withdrawn in other land's, especially when withdrawn by the firm that originated it. Communication of unfavorable and untoward reactions is quite as much the responsibility of the medical profession as is the spread of beneficial re- sults of therapy. Furthermore, the great number of trade names under which a drug may be marketed presents a problem. Indeed, it is difficult for the physician in one land to know that a drug discussed under an entirely different name from any in their country is the same or similar to some preparation in their country. To avoid such difficulty, some central office of information appears necessary. As we learn the dangers that drugs can cause jn early pregnancy, the as- sumption should never be made that only during embryonic growth is it pos- sible to injure the unborn child. Gross malformations occur as the embryo is developing. Serious abnormalities in function may occur later in pregnancy as a result of injury to the various organs of the rapidly growing fetus. Injury to liver function may not necessarily be evident at birth. Injury to the gonads might pass unnoticed until puberty; injury to the brain might be even more difficult to detect. Injury to the chromosome is yet more obscure. Therefore, women must learn to abstain from all unnecessary drugs through- out pregnancy. Indeed, women of the childbearing period should learn to abstain from drugs because the injury to the fetus may occur `before the woman knows she is pregnant. It should also be remembered that just as x-ray and radioactive fallout may injure both sexes, drugs may yet be developed that may injure the sperm. There- fore, men, too, should be cautious about drugs. We must all learn not to clamor for new and more potent drugs. Furthermore, people must learn not to prescribe glibly to one another and not to take drugs over the back fence. What is good for one is not necessarily good for another. Caution concerning drugs may strengthen `our future generations. HELEN 13. TAUSSIG. Senator NELSON. That concludes the hearing for today. We will adjourn until 10 o'clock tomorrow morning. (Whereupon, at 11:45 a.m., the committee adjourned, to reconvene at 10 a.m.,,Wednesday, November 29, 1967.) 0