PAGENO="0001" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY HEARINGS BEFORE THE SUBCOMMITTEE ON MONOPOLY OF THE SELECT COMMITTEE ON SMALL BUSINESS UNITED STATES. SENATE NINETY-FIRST CONGRESS FIRST SESSION ON PRESENT STATUS OF COMPETITION IN THE PHARMACEUTICAL INDUSTRY PART 14 JUNE 19, AUGUST 7, AND 12, 1969 MEDICAL STUDENTS-AMA-FDA (DRUG TESTING) Printed for the use of the Select Committee on Small Business U.S. GOVERNMENT PRINTING OFFICE 81-280 WASHINGTON : 1969 For sale by the Superintendent of Documents, U.S. Government Printing Office Washington, D.C. 20402 - Price $1.75 PAGENO="0002" SELECT COMMITTEE ON SMALL BUSINESS [Created pursuant to S. Res. 58, 81st Cong.] ALAN BIBLE, Nevada, Chairman JACOB K. JAVITS, New York PETER H. DOMINICK, Colorado HOWARD H. BAKER, Ja., Tennessee MARK 0. HATFIELD, Oregon ROBERT DOLE~ Kansas MARLOW W. COOK, Kentucky TED STEVENS, Alaska CHESTER H. SMITH, Staff f3ireotor and General Counsel JAMI?S P. Durrx III, Minority Counsel SUBCOMMITTEE ON MONOPOLY GAYLORD NELSON, Wisconsin, Chairman JOHN SPARKMAN, Alabama MARK 0. HATFIELD, Oregon RUSSELL B. LONG, Louisiana ROBERT DOLE, Kansas THOMAS J. McINTYRE, New Hampshire MARLOW W. COOK, Kentucky ALAN BIBLE,* Nevada JACOB K. JAVITS,* New York BENrAMIN GORDON, Staff Economist ELAINE C. DYE, Clerical Assistant JOhN SPARKMAN, Alabama RUSSELL B. LONG, Louisiana JENNINGS RANDOLPH, West Virginia HARRISON A. WILLIAMS, Ja., New Jersey GAYLORD NELSON, Wisc~nsln JOSEPH M. MONTOYA, New Mexico FRED R. HARRIS, Oklahoma THOMAS J. MCINTYRE, New Hampshire MIKE GRAVEL~ Alaska *Ex officio member. (II) PAGENO="0003" CONTENTS Statement of- Page Brodkin, Henry, medical student, Case Western Reserve University Medical School, 2701 Hampshire Road, Cleveland Heights, Ohio - 5561 Dole, Hon. Robert, U.S. Senator, State of Kansas 5569 Goodrich, William W., Assistant General Counsel, Food and Drug Administration; accompanied Dr. Herbert L. Ley, Jr., Comrnis- sioner, FDA 5642 Harrison, Bernard, director, legal department, American Medical Association; accompanied L. 0. Simenstad, M.D., and Max H. Parrott, M.D., members of the board of trustees of the American Medical Association 5573 Hayes, Thomas, M.D., executive secretary, Council on Drugs; accom- panied L, 0. Simenstad, M.D., and Max H. Parrott, M.D., mem- bers of the board of trustees of the American Medical Association. - 5573 Hewitt, Charles C., executive director, Student American Medical Association, 2635 Flossmoor Road, Flossmoor, Ill.; accompanied Edward D. Martin, national president 5490 Jennings, Dr. John J., Acting Director, Bureau of Medicine, Food and Drug Administration; accompanied Dr. Herbert L. Ley, Jr., Commissioner, FDA 5642 Kelsey, Dr. Frances 0., Bureau of Medicine, Food and Drug Ad- ministration; accompanied Dr. Herbert L. Ley, Jr., Commissioner, FDA 5642 Ley, Dr. Herbert L., Jr., Commissioner of Food and Drugs, Consumer Protection and Environmental Health Service, Public Health Ser- vice, Department of Health, Education, and Welfare; accompanied by William W. Goodrich, Assistant General Counsel, FDA; Dr. John J. Jennings Acting Director, Bureau of Medicine, FDA; Dr. Frances 0. }~`elsey, Bureau of Medicine, FDA; and Dr. Alan Lisook, Division of Scientific Investigation, FDA 5642 Lisook, Dr. Alan, Division of Scientific Investigation, Food and Drug Administration; accompanied Dr. Herbert L. Ley, Jr., Commis- sioner, FDA 5642 Martin, Edward D., national president, Student American Medical Association, 2635 Flossmoor Road, Flossmoor, Ill.; accompanied by Charles C. Hewitt, executive director 5490 Nathan, Carl, medical student, Harvard Medical School, 415 Vander- bilt Hall, Boston, Mass 5549 Payton, Charles, medical student, University of California San Francisco Medical School, 1245 Lawton, San Francisco, Calif 5530 Pohl, Richard, medical student, Harvard Medical School, 415 Vander- bilt Hall, Boston, Mass 5549 Rowlands, Marvin L., Jr., editor, American Medical News; accom- panied L. 0. Simenstad, M.D., and Max H. Parrott, M.D., members of the board of trustees of the American Medical Association 5573 Simenstacj, L. 0., M.D., Osceola, Wis.; Max H. Parrott, M.D., Port- land, Oreg.; members of the board of trustees of the American Medical Association; accompanied by Bernard Harrison, director, legal department, AMA; Thomas Hayes, M.D., executive secretary, Council on Drugs; John Talbott, M.D., editor, Journal of the Ameri- can Medical Association (JAMA); and Marvin L. Rowlands, Jr., editor, American World News - 557~ Spiegel, David, medical student, Harvard Medical School, 415 Vanderbilt Hall, Boston, Mass 5549 Talbott, John, M.D., editor, Journal of the American Medical Associa- tion; accompanied L. 0. Simenstad, M.D., and Max H. Parrott, M.D., members of the board of trustees of the American Medical Association 5573 III PAGENO="0004" IV CONTENTS EXHIBITS Letter, dated February 27, 1969, to Senator Gaylord Nelson, chairman, Monopoly Subcommittee, Select Committee on Small Business, from C. Clement Lucas, Jr., national president, Student American Medical Page Association Letter, dated April 8, 1969, to C. Clement Lucas, Jr., national president, Student American Medical Association, from Senator Gaylord Nelson, chairman, Monopoly Subcommittee, Select Committee on Small Busi- ness - Editorial: "Cost of Drugs," from the New England Journal of Medicine, November 14, 1968 5481 Article: "36 Medical Students Reject Industry Gifts," from the Washington Post, November 18, 1968 5482 Letter, dated January 31, 1969, to Eli Lilly & Co., from 45 students, Harvard Medical School 5482 Article: "Students Reject Drug Co. Gifts," by Carl M. Cobb, from the Boston Globe, February 1, 1969 5483 "Students Veto (rjft of Drug Firm," by Morton Mintz, from the Washington Post, February 1, 1969 5483 "Students Send Back Drug Maker's Gifts," from the New York Times, February 2, 1969 5484 "Medical Students Fear `Unhealthy Relationship'-Drug Firm Gifts Shunned," by Bruce McCabe, from the Sunday Herald Traveler, February 2, 1969 5484 "Medical Students Plan To Return Gift Instruments," by Richard D. Lyons, from the New York Times February 2, 1969 5485 "Medical Students Return Gifts to ~i~r g Companies," by David N. Hollander, from the Harvard Crimson, February 3, 1969 5486 "Getting Unhooked," by John Herling, from the Washington Daily News, February 4, 1969 5487 "Students Query Drug Firm Ties," by Hal Willard, from the Wash- ington Post, February 28, 1969 5488 "Some Medical Students Shock Drug Companies by Sending Back Gifts," by Earl C. Gottschalk, Jr., from the Wall Street Journal, March 28, 1969 5489 "Gifts Undesired," from the Washington Post, April 9, 1969 5490 Pharmaceutical Contributions to Student American Medical Association, Scientific and Convention Programs - 5515 Student American Medical Association 1969 House of Delegates Resolution No. 25, entertainment funds - 5515 "Symposium on Medicine and Society," published by the Student American Medical Association 5516 Student American Medical Association, balance sheets, month ending April 30, 1969 5525 Letter, dated July 4, 1969, to Benjamin Gordon, staff economist, Select Committee on Small Business, U.S. Senate, from Charles E. Payton, medical student, University of California San Francisco Medical School, with accompanying memorandum 5536 Articles: "Drug Industry Qifts," from Medical Care Review, volume 26, No. 3, March 1969, pages 249-252 5542 Memorandum, dated June 5, 1969 from Raymond yard, to Charles Payton, re complimentary me~chandise given to medical students by various pharmaceutical houaes - - 5544 Letter, dated Jan. 10, 1969, to Lilly Pharmaceutical Co., from concerned students in the sophomore medical class, UCSF 5544 Letter, dated April 15, 1969, to James L. Blattau, from Henry F. DeBoest, vice president, corporate affairs, Eli Lilly & Co 5545 List of senior gifts presented to the graduating class of 1969 of the Uni- versity of California School of Pharmacy 5546 List of medical student recipient awards 5546 List of teaching aids furnished by industry 5546 Letter, dated January 30, 1969, to Eli Lilly & Co., from first year medical students, Harvard Medical School - 5559 Letter, dated June 23, 1969, to Benjamin Gordon, staff economist Select Committee on Small Business, U.S. Senate, frOm Carl Nathan, Etarvard Medical School, class of 1971_ - - - 5560 PAGENO="0005" CONTENTS V Article: "Lilly Defends Practice of Giving Doctor Kits," from Harvard Page Crimson, volume CXXXXLX, No.2, February 4, 1969 5560 Letter, dated October 22, 1968, to Ayerst Pharmaceutical Co., from Charles E. Payton, president, Student American Medical Association_ - - - 5570 Letter, dated June 10, 1969, to Senator Robert Dole, Select Committee on Small Business, U.S. Senate, from Dr. Millard E. Schulz, re statement of Dr. John Adriani 5571 Letter, dated July 14, 1969, to Dr. Ernest B. Howard, executive vice president, American Medical Association, from Senator Gaylord Nelson, chairman, Monopoly Subcommittee, Select Committee on Small Bus- iness, U.S. Senate 5573 Letter, dated October 13, 1969, to Dr. Ernest B. Howard, executive vice president, American Medical Association, from Senator Gaylord Nelson, chairman, Monopoly Subcommittee, Select Committee on Small Busi- ness, U.S. Setiate 5585 Letter, dated October 15 1969, to Senator Gaylord Nelson, chairman, Monopoly Subcommittee, Select Committee on Small Business, U.S. Senate, from Bernard P. Harrison, director, Legislative Department, American Medical Association, with accompanying AMA submissions.. 5586 List of panels on anti-infective Drugs-Panels I to V 5620 Article, "AMA Denies Refusing To Print Attack on Combination Drugs," by Morton Mintz, from the Washington Post, May 12, 1969 5624 Letter, dated July 18, 1969, to Dr. Herbert Ley, Commissioner, Food and Drug Administration, from Senator Gaylord Nelson, chairman, Monopoly Subcommittee, Select Committee on Small Eusiness, U.S. Senate 5627 Letter, dated July 25, 1969, to Senator Gaylord Nelson, chairman, Monopoly Subcommittee, Select Committee on Small Business, U.S. Senate, from Dr. Herbert L. Ley, Jr., Commissioner, Food and Drug Administration 5627 Letter, dated July 3, 1969, to Dr. Ernest B. Howard, executive vice presi- dent, American Medical Association, from Dr. Herbert L. Ley, Jr., Commissioner, Food and Drug Administration 5628 Case summaries from the clinical investigation files of the Food and Drug Administration 5647 Notice of claimed investigational exemption for a m1~w drug, published in the Federal Register 5650 Address, "Shared Responsibilities," by James L. Goddard, M.D., Commis- sioner of Food and Drugs, delivered at the annual meeting of the Pharma- ceutical Manufacturers Association, April 6, 1966, at Boca Raton, Fla. - 5667 Address,"FDA Today and Tomorrow," byHerbert L. Ley, Jr., M.D., Commis- sioner of Food and Drugs, presented at the 12th FDLI-FDA Joint ~Edu- cational Conference at Washington, D.C., on December 3, 1968 5670 Letter, dated October 20, 1969, to Senator Gaylord Nelson, chairman, Sub- committee on Monopoly, Select Committee on Small 1~usfrtess, U.S. Senate, from Dr. Herbert L. Ley, Jr., Commissioner, Food and Drug Administration, with enclosures 5678 Summary by Dr. Herbert L. Ley, Jr., Commissioner, Food and Drug Administration, on drug testing by Dr. Austin Stough in the Alabama prison system ~680 Memorandum, dated July 29, 1969, to Dr. Herbert L. Ley, Jr., Com- missioner, Food and Drug Administration, from Dr. John Jennings, Acting Director, Bureau of Medicine, re Austin R. Stough, M.D., with accompanying IND's and NDA's 5681 Correspondence between Senator Gaylord Nelson, Chairman, Subcom- mittee on Monopoly, Select Committee on Small Business, U.S. Senate, and Dr. Roderick Murray, Director, Division of Biologic Stnndards, National Institutes of Health, Public He~ilth Service, Department of Health, Education, and Welfare - - - ~5686 Study: "The Use of Prisoners for Drug Trials in Alabama," by T. R~ Harrison, M.D., J. N. Clanton, M.D., P. N. B. Pe~tcock, M.D., B. R. Williams, Ph. D., R. T. Hamner, L.LB., and L. P. Patterson 5689 Article: "Drug Aide Admits to Doubts on Tests," by Walter Rugaber, from the New York Times, August 5, 1969 5703 Article: "Clinical Research on Humans: Ineffective Laws," by Nicholas Horrock, from the Washington Daily News, June 24, 1968 5711 PAGENO="0006" VI CONTENTS Article: "Medical Test Dilemma: Whose Need Greater?" by Nicholas Page Horrock, from the Washington Daily News, June 25, 1968 5713 Article: "The Race Is On to Regulate Medical Tests," by Nicholas Horrock, from the Washington Daily News, June 26, 1968 5714 Letter, dated October 28, 1969, to Senator Gaylord Nelson Chairman, Subcommittee on Monopoly, Select Committee of Small Business, U.S. Senate, from Dr. Paul Lowinger, Associate Professor, School of Medicine, Wayne State University, with attachments 5715 APPENDIXES 1. Statement of Dr. Edward R. Pinckney, former associate editor, Journal of the American Medical Association 5723 II. Statement of Joshua Lederberg 5734 111. Letter, dated January 21, 1969, to Benjamin Gordon, Staff Economist, Select Committee on Small Business, U.S. Senate, from Glenn R. Markus, Education and Public Welfare Division, Library of Congress, re Federal expenditures in support of medical education 5735 IV. Article: "A Survey of Physicians' Reactions to Drug Promotion," by R. W. Fassold, M.D., and C. W. Gowdey, D. Phil., from the Canadian Medical Association Journal, April 6, 1968, volume 98, pages 701-705 V. Articles from various sources on drug testing: "The Immunization of Drug Testers," by Morton Mintz, from the Washington Post, January 9, 1969 5746 "Drug Testing: Is Time Running Out," by Dr. William M. O'Brien, from the Bulletin of the Atomic Scientists, January 1969 "Prison Drug and Plasma Projects Leave Fatal Trail," by Walter Rugaber, from the New York Times, July 29, 1969_ 5755 VI. Correspondence between Senators Nelson and Javits, with accom- panying statement of Dr. A. Dale Console 5765 VII. Correspondence between Senators Nelson and Javits, with accom- panying letters of the Student American Medical Association 5768 VIII. Report on a study of advertising and the American physican. Part I: The advertisers' viewpoint 5771 IX. Report on a study of medical advertising and the American physician. Part II: The physicians' viewpoint 5802 X. The Fond du Lac study: An intensive study of the marketing of five new ethical pharmaceutical products in a single market, resulting in some theory of scientific marketing and service pro- grams for action. (Excerpts) 5806 XI. A study of medical advertising and the American physician. (Excerpts)_ - 5810 XII. The Fond du Lac study: An intensive study of the marketing of five new ethical pharmaceutical products in a single market, resulting in some theory of scientific marketing and service programs for action (full text) 5811 HEARING DATES* June 19, 1969: Morning session 5479 August 7, 1969: Morning session 5569 August 12, 1969: Morning session 5641 *Tbe testimony for May 15 16, 17, June 7 and 8, 1967, appears in pt. 1 of these hearings; the testimony for June 27, 2~, 29~ July 24, and Aug. 8, 10, 1967, appears in pt. 2 of these l~ea~ings; the testimony for Sept. 13, 14, 29, and Oct. 13 1967, appears in pt. 3 of these hearings; the testimony for Oct. 31, Nov. 9, 15, 16, and 24, 1967, appears in pt. 4 of these hearings; the testimony for Dec. 14, 19, 1967, Jan. 18, 19~ and 25 1968, appears in pt. 5 of these hearings; the testimony fGr Nov. 29, 1967, Feb. 6, 8, 27, 24, and 29, 1968, appears in pt. 6 of these hearings; the testimony for 4pr. 23, 24, and l~1ay 1, 1968, appears in pt. 7 of these hearings; the testimony for May 2~ 3, and Sept. 17, 1968, appears in pt. 8 of these bearings; the testimony for Sept. 18, 19, and 25, 1968, appears in pt. 9 of these hearings; the testimony for Dec. 11, 17 18, 19, 1968, and Jan. 23, 1969, appears in pt. 10 of these hearings; the testimony for 1~eb. 19, 20, 26, 27, Mar. 13, 18, 25, and 26, 1969, appears in pt. 11 of these bearings; the testimony for May 6, 7, 20, and 27, 1969, appears in pt. 12 of these hearings; the testimony for July 16, 29, 30, and Oct. 27, 1969, appears in pt. 13 of these hearings. PAGENO="0007" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY THURSDAY, JUNE 19, 1969 U.S. SENATE, MONOPOLY SUBCOMMITTEE OF TIlE SELECT COMMITTEE ON SMALL BUSINESS, Washington, D.C. The subcommittee met, pursuant to recess, at 9:15 a.m., in room 318, Old Senate Office Building, Senator Gaylord Nelson (chairman of the subcommittee) presiding. Present: Senators Nelson and Dole. Also present: Benjamin Gordon, staff economist; Elaine C. Dye, clerical assistant; and James P. Duffy III, minority counsel. Senator NELSON. The Monopoly Subcommittee will open its hearing. Our first witness this morning is Mr. Edward D. Martin from the Student American Medical Association. He is accompanied by Charles Hewitt. Mr. Martin, I understand you are from Kansas. Mr. MARTIN. Yes, sir. Senator NELSON. Senator Dole had hoped to be here to introduce you this morning and was delayed by other business and asked me to ex- tend his regrets. He hopes to get down here before you finish your testimony. We welcome the Student American Medical Association. They re- quested an opportunity to appear and we are pleased to `have them here today. 1 The information follows: STUDENT AMERICAN MEDICAL ASSOCIATION, Plossmoor, Ill.,February 27,1969. Senator GAYLORD NELSON, ~5enate Office BuiZd~ng, Wa8hington, D.C. DEAR SENATOR NELSON: The Student American Medical Association would like to re- spectfully request an opportunity to appear before your committee in order to delinente some of our views c'c~ncern1ng the problems of high cost of drugs, Thank you very much. With best regards, I remain, Sincerely yours, C. CLEMENT LUCAS, Jr., lYationaj Pres4de~t. U.S. SENATE, Washington, D.C., April 8, 1969. Mu. C. CLE1~XENT LVCAS, Ja., National President, ~5tudent American Medical Association, Plosimoor, Ill. DEAR MR. LUCAS: The Monopoly. Subcommittee of the Senate Small Business Comnilttee has been conducting extensive hearlbgs on various aspects of the drug industry over the period of the last 24 months. During the course of these hearings we expect to hear the viewpoints of all representative groups and individuals. We know that you can thake a valuable contribution to these hearings and are prepared to set asidetime for your appearance. Presently we are working out a schedule, and Benjnmin Gordon, staff counsel, will be a'vailable to work out a hearing date for you. Sincerely, GAYLORD NELSON, Chairman, Monopoly Subcommittee. 5479 PAGENO="0008" 5480 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY I will not read my full opening statement. It will be put into the record at the appropriate place. There is growing concern, as reflected in medical literature, as well `as in testimony before the Senate Small Business Committee's Monopoly Subcommittee that the increasingly close financial relationship between the drug industry and `the medical profession may be contrary to the best interests 9f the profession and public. We have been exploring this question in some detail over a period of time. (The complete prepared statement and supplemental information submitted by Senator Nelson follows:) OPENING STATEMENT BY SENATOR GAYLORD NELSON There is growing cop~cern, as reflected in medical literature, as well as in testimony before the Senate Small Business Committee's Monopoly Subcom- mittee, that the increasingly clOse financial relationship between the drug~ industry and the medical profession may be contrary to the best interests of the profession and `the `public. At the very time the Committee was exploring this subject at length early this year, medical students at several `of the nation's leading universities voluntarily returned `to `the drug companies' gifts such as bags and diagnostic instruments `as a symbolic protest against wha't they term "an unhealthy relationship" `between `the drug `industry and the medical profession. Thirty-six students `at Case Western Reserve school of Medicine `wrote a public letter to the New 1~lngland Journal of Medicine in which they stated that the bags and tools presented to them a's gifts by a drug firm "are not gifts but rather are inappropriate advertisements . . . and that all but the most nacLve realize that (the company's) motivation `is to `influence our future choice of drugs." Shortly thereafter more than one-third of the second-year class at Harvard Medical School said in a letter to a drug cQrnpany which had provided them with these so-called gifts, "medical students who accept gifts acquire a sense of fam'iliarit~V and gratitude toward the donors that can undermine objectivity." And they further stated that, the medical prof~ssion is largely responsible for the "unhealthy relationship" because it "h'as failed to maintain proper distance from the Industry." Following the action taken by the Harvard students, one-third Of the' first-year medical students at Oolumbia University's College of Physicians' expressed their "dissatisfaction with the exploitative practices of the American drug industry" and said `that as a result they returned gift stethoscopes to `the Eli Lilly Company. In the letter which the students sent to Lilly they said: "ProzxLQtioua~ programs of this sort are obviously intended to .in~tiate the establishment of `close ties between physicians and pharmaceutical houses, for mutual benefit. Such a relationship relegates the needs of the patient to a role of secondary `imp~ytánce." On February 27, medical students at the University of Virginia's School of Medicine embarked on a campaign to direct attention amoug medical students across the country to controversial links between future doctors and the drug industry. Declaring that the actions taken by the medical students at Case Western Reserve `and Harvard were not enough, the Virginia medical ~tudeflts said their campaign plan Is to stir the consciences of other medical students across thO country through debates similar to the one they held. Dr. William O'Brien of Virginia's School of Medicine stated: "Medicine is the highest paying profession and it should never get In a conflict of Interest. It is definitely wrong." The major issue of the debate at Virginia was on conflict of interest. Coincidentally, a notice on the bulletin board a few steps down the hall from the debate instructed students on how to obtain free drugs for themselves and family members living with them from drug company representatives. They were also instructed to ask a physician writing a prescription to note the name of the preferred drug company on the prescription. On March 28, Earl Gottschalk, Jr. wrote an article in the Wall Street Journal covering the action of these medical students in some detail. As Mr. Gottschalk pointed out, "the gift issue has caused quite a stir in the medical world * * * The gifts are more than tokens." lie went on to note that one medical school professor estimates that the average student receives $500 worth of gifts and PAGENO="0009" COMPETITIVE PROBLEMS IN THE DRUG INDuSrrRy 5481 free drugs during hIs days at medical school. And more, "If the student's wife needs a birth control pill prescription or his mother-in-law requires diabetes medication, he merely has to tell a drug company `detail man' (salesman) to get the drugs free." Dr. Joseph W. Gardella of Harvard School of Medicine stated: "Students be- lieve the patient is a pawn between the doctors and the drug companies * * * They feel the responsibility for the patient's welfare-holding down the cost of drugs-has gone begging." It is interesting to note that at least one drug official has been quite candid. Dr. Harold Upjohn, Vice-President of the Upjohn Company of Kalamazoo, Michi- gan recently told a group of medical students: "You know why they give them (gifts). No question about it. They want doctors to be interested in prescribing their brands." I commend Dr. Upjohn on his forthright statement. It Is, indeed, gratifying to note that so many of our prospective physicians are equally well aware of this and concerned enough to take strong and positive action to halt this type of activity on the part of the pharmaceutical industry, I will place the letters and newspaper articles dealing with this subject at this point in the hearing record. (From the New England Journal of Medicine, Nov. 14, 19G8] (Editorial) COST OF DRUGS To the Editor: The undersigned students in the second-year class at Case West- ern Reserve University School of Medicine have not accepted a drug company's gifts of an Instrument bag and diagnostic tools, and believe that merely re- tafning the gifts is not a sufficient action. We should like to toake this action and the reasons for it public. Below is the letter `we sent to the drug company. We are returning these gifts because we feel they are not gifts but rather are in- appropriate advertisements. Although many of these gifts are useful, all but the most naive realize that your motivation in giving them to us is to influence our future choice of drugs. We are struck by the fact that ultimately It is the consumer who pays for these gifts in the form of higher prices. Returning these gifts demonstrates our disapproval of the relationship which they fOster. This relationship is one which has as Its goal the mutual benefit of both the doctor and the drug company, with consideration of the patient rele- gated to a place of secondary importance. In so falling to consider the patient, both the drug company and the doctor are not properly serving the public to whom they are responsible. MICKEY EI~isNDEEG GORDON LAKE BERNARD ROAZAN HENRY BEomcIN JIM MAHER NEvIN KATZ SIGNE DYSKEN ` JUDITH'GOODRIOH BETSY Lozor~ MICHAEL D. KLEIN TERRY STEIN JOHN MCBRIDE DICK GLENDON H. M. SLYTEtLI WILLIAM R. BEARDSLEE ScoTT C. MCCUSKEY MARTIN FO5BURG WILLIAM HARMON NORMAN R. GORDON JULES R. LODISH JOHN R. NEVILLE THEODORE J. STRANSKY GEORGE E. MILLER WILBERT C. JORDAN MARGARET C. MCBRIDE ROBERT B. GOULD RICH FRIEDELL GARY M. BRITTENHAM PRISCILLA WARE RICHARD R. LovE STEPHEN CANTRILL JERRY J. ROBBINS BARRY J. RICHMOND JEFFERY J. WI5NIE5KI MING WANG JEFFREY TEICH PAGENO="0010" M82 COMPETITIVE PROBLEMS IN TH~ DRUG INDUSTRY [From the Washington Post, Nov. 18, 19~8j 36 MEDICAL STUDENTS REJECT INDUSTRY Glrvs-OFFErrnn $25 Kirs Thirty-six medical students in Cleveland have publicly bitten the hand of the *drug industry, which long has been teeding gifts to prospective doctors every- where. The students, who comprise two-fifths of the second-year class at Case Western Reserve University School of Medicine, rejected a drug maker's gifts of instru- ment bags of simulated-leather and diagnostic tools. The bags would retail for about $25, one of the students estimated. He valued the tools at a few dollars. The rejection is a dramatic symptom of increasing concern in the Nation's med- ical schools over the practice of presenting gifts to future doctors. Beyond that, the student action is a symptom of an activist ferment, which in several ways- including volunteer work in .the ghettos and understaffed hospitals-is challeng- ing the rockbound conservatism of much of organized medicine. In a letter to the Nov. 14 New England Journal of Medicine, the 36 students said that "merely returning the gifts is not a sufficient action -. ." They said they had told the drug company, which `was unidentified, that the bags and tools "are not gifts but rather are Inappropriate advertisments." Their lettei~ to the firm also said that "all but the most naive realize that your motivation.. . is to influence our future choice of drugs," so that usually higher- priced trade-name products will be prescribed. Last year on Capitol Hill, two medical educators testified that drug com- panies they did not identify give some graduating medical students and their wives free trips to New York City. And in 1961, the question about whether drug company gifts to students and medical organizations are "paola" was raised by Dr. Charles 0. May, a leading pediatrician, iii the Journal of Medical Education. The article, entitled "Selling Drugs by `E~~cating' Physicians," estimated that in 1959 the makers of prescription medicines spent $750 million on promotional activities-more than 3~/2 times the $200 million available in 157 to all American medical schools for educational purposes. JANUARY 31, 1969. ELI LILLY & Co. GENTLEMEN: A year ago, as first year medical students, we invited drug com- panies to provide us with a variety of instruments, like those commonly distrib- uted at most medical schools. As second year~ students, we now feel we made a mistake, and think it proper to return the instruments for the following reason. We believe an unhealthy relationship exists between the drug industry and the medical profession. The profession is largely responsible, because it does not maintain a proper distance from the industry. This distalice is essential for the doctor's objectivity. Since the doctor is in a unique economic position, namely that of directing what the consumer shall buy, strict objectivity Is his obliga- tion to the patient. This objectivity is endangered when medical students accept instruments. Nat- urally, such gifts engender in the student a sense of famil,i'arity and gratitude toward the houses thai~ can afford to give them. In a subtle but real way, these attitudes can undermine the critical objectivity which must underly both the medical and economic decisions of prescription writing. In an analogous situa- tion, it is universally recognized that an official who awards. contracts should not accept gifts from bidders. It is also clear that the cost of these instruments and other elaborate promo- tional eom.paigns is paid by the consumer. We view our ~etion in returning the instruments as a signal to the industry that as future doctors we would applaud a deesicalation in the ever-mounting tide of promotional campaigns. Our aim is to establish good h~thit~ for ourselves early in our training and to promote discussion of the relationship between the drug industry, the medical profession and the patient. We support the thirty-six Case Western Reserve med- ical students who first returned drug company instruments and urge others to follow their example. Forty-Five Students of Harvard Medical School. PAGENO="0011" COMPETITIVE PROBLEMS IN THE DRUG INDUSfFRY 5483 [From the Boston Globe, Feb. 1, 1909] STUDENTS Rn.nicT. flaire Co. GIFTS (By Carl M. Cobb) Nearly half of the sophomore class at Harvard Medical School has decided it was a mistake to accept medical instruments and doctor's "black bags" from drug companies. They are shipping the gifts back. The 45 students believe an unhealthy relationship between doctors and the na- tion's drug companies has developed and do not wish to undermine their objectiv~ ity or create conflicts of interest by accepting `the' gifts. More than $2000 worth of free stetbosc'opes, tuning forks ~nd other free items from the Eli Lilly drug company are being returned by the 45 students. Richard Pohi and Allen Binder, who organized the movement, said the students receive a wide range of "gifts" from drug companies during their medical train~ ing. "We get free records, text books, Summer training grants, drug samples as well as these kits. Naturally such gifts engender in the student a sense of famili- arity and gratitude toward the drug houses that can `afford to give them," Pohi explained. The students are ~ifraid these subtle influences and changes in attitude "can undermine the critical objectivity which must underlie both the medical and eco- nomic `decisions of prescription writing." Binder said the mass equipment return is intended as a symbolic gesture that will prompt other students and doctors "to think twice before t~ccepting gifts from drug `houses'." The students are also concerned about the cost of this kind of "subtle adver- tising" and the fact that it is ultimately paid by the consumer. There are esti- mates, Pohl s'aid, that the drug industry spends between $3000 and $5000 on every physician in the nation every year in advertising. In a letter to the Eli Lilly Co., the students said "Our aim is to establish good habits fo'r ourselves early in our training, and to promote discussion of the rela- tionship between the drug industry, the medical profession, and the patient." P'ohl said similar movements are underway at Tufts Medical School and other institutions across the country where students are, he said, growing increasingly disenchanted with the perv~asive influence of the pharmaceutical industry at the expense of `the consumer. Binder said the problem is all the more difficult because the consumer has no say in the product he purchases and can apply no consumer pressure to brthg down prices with his pureha~ing practices. "The doctor prescribes the drug, he makes the `decisions, but does not pay the bill." [From the Washington Post, Feb. 1, 1969] STUDENTS VETO GIFTs OF DRUG FIRM (By Morton Mintz) More than a third of the second-year class a't I~arvard Medical School cut an economic umbilical cord with the drug industry yesterday. They piled gifts from a drug maker-percussion hammers, stethoscopes, tape measures, tuning forks and vinyl black bags-on a couch in the Boston dormitory room of Richard L. Pohl, of Lynbrook, N.Y., one of their leaders. Then a press conference was called to explain tha't the gifts will be returned to the company as a symbolic protest against "an unhealthy relationship" between the industry and `the medical profession. PRECEDENT CITED In a letter to the manufacturer, 45 medical and dental students-out of a class of 125-said that a doctor should not accept gifts from a drug house for the same reason "tha't an official who awards contracts should not accept gifts from bidders." The action is the second of its kind. The first was taken last November in Cleveland by 36 second-year medical students at Case Western Reserve IJni- versity. PAGENO="0012" 5484 colinir~rn'xvi~ PROBLEMS IN THE DRTJG INDUSTRY Yesterday, in a phone Interview, Pohi said that some among the 45 Harvard students are encouraging medical students elsewhere to turn back gifts ~from drug companies. Pohi, whose co-leader Is Andrew Binder of Boston, said that such action already is contemplated by students at other Boston area medical schools, Pohi also said that the decision to return the gifts, which be estimated have a retail value of $35 per student, had two primary catalysts: the Western Reserve precedent and a recent series of lectures by drug industry critics, STANDARD PRACTICE The gifts were made by Eli Lilly and Co., of Indianapolis, but Pohi emphasized that the choice of Lilly had no special significance because gifts to medical students are standard industry practice. The letter to Lilly said that a year ago the students had "invited" gifts of instruments, but that "we now feel we made a mistake," They also said their own profession is "largely responsible" for the "unhealthy relationship" because it has failed to maintain the "proper disance from the Industry . .. essential for the doctors' objectivity" In writing prescriptions. Medical students who accept gifts acquire "a sense of familiarity and grati- tude" toward the donors that can undermine objectivity, the letter said, [From the New York Times, Feb. 2, 19691 STUDENTS SEND BACK DRUG MAKER'S GIFTS One-third of the first-year medical students at Columbia University's College of Physicians and Surgeons said yesterday that their "dissatisfaction with the exploitative pricing and promotional practices of the American drug industry" had compelled thepi to return gift stethoscopes to Eli Lilly & Co. This follows a similar move announced Friday by 45 second-year students at flarvard Medical School. The Harvard students, returned to the Lilly com- pany a black bag and kit of diagnostic instruments-including a stethoscope. Robert S. Pynoos, spokesman for the protesting Columbia students, said his group bad written a letter to Lilly in which they had expressed disapproval with "the motivation behind these gifts." The letter said in part: "Promotional programs of this sort are obviously intended to initiate the establishment of close ties between physician and pharmaceutical house, for mutual' benefit." "Such a relationship," the letter continued, "relegates the need's of the patient to a role of secondary importance." Henry F. DeBoest, vice president of corporate affairs for Lilly, said yesterday that the medical instruments "have been offered with the prior approval of the medical `schools." The gifts were "a mark of appreciation for their [the students] willingness `to undertake the long, difficult road of an education as a physician." _______ [From the Sunday Herald Traveler, Feb. 2, 1969] Daua FIRM GIFTS SHTJNNED-MEDIQAL STUDENTS FEAR "UNHEALTHY RELATIoNSHIP" (By Bruce McCabe) Two students who persuaded 45 others at Harvard Medical School to return gift kits of medical Instruments to a national drug manufacturer hope students at other Greater Boston medical schools will follow their lead. Richard L. Pohl, 23, of Lynbrook, N.Y., and Andrew Binder, 23, of Boston, both second-year students at HMS, said the gesture dramatizes their belief that there is an "unhealthy relationship" between the drug industry and the medical profession. The kits, worth an estimated $40, were supplied by Eli Lilly and Company of Indianapolis, to second-year students on request. They include a stethoscope, a black bag, a tuning fork, a percussion hammer and a tape measure. There are 125 second-year students at HMS. Pohl said there were three "catalysts" for the movement. PAGENO="0013" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY M85 One was a letter from 86 Western Reserve medical students in the Nov. 14 Issue of the New England Journal of Medicine saying they were returning kits they had received under similar circumstances. Another catalyst, Pohi said, was an elective series of five lectures on phar- macology delivered as part of a second-year course by Dr. Richard Burack, author of "The Handbook of Prescription Drugs," and a teacher at the school. Dr. Burack ~as described by Pohi as "the Ralph Nader of the medical pi~ofession." Still another Source of inspiration for the move was a talk given by a guest lecturer in Dr. Burack's course. Pohi identified him as Benjamin Gordon, a staff economist for the Senate Committee on S~mall Business's subcommittee on monopoly. Pohl said the 45 medical kits were taken by car late Friday afternoon to Lilly's office in the Prudential Building. He said a secretary told him she was not authorized to take back the kits and advised Pohl to return Monday. P'ohl said he would. Efforts to reach spokesmen for Lilly proved unsuccessful. "We are not attack- ing Lilly," Pohi said. "What they've done is good business, good advertising and perfectly legal. Our point is that an unhealthy relationship exists between the drug industry and the medical profession. We don't think this relationship will be improved by the sending of free medical kits by a drug ~ompany to young medi- cal students." Pohl emphasized that neither Dr. Burack nor Gordon had participated in any way in the movement. He said that although Dr. J3urack "seemed pleased" by the movement, "he'll probably hate the publicity." Pohl conceded that Lilly, along with other drug companies, had been invited by the class to send the kits last year but that "we now feel we made a mistake." In a five-paragraph letter sent to the company headqrtarters in Indianapolis, the 45 students charged that the medical profession "does not maintain a proper distance from the (drug) industry." "This distance is essential for the doctor's objectivity," the letter continued. "Since the doctor is in a unique economic position, namely that of directing what the consumer will buy, strict objectivity in his obligation to the patient." "This objectivity is endangered when medical students accept Instruments. Naturally, such gifts engender In the student a sense of familiarity and gratltu~e toWard the houses that can afford to give them." "In a subtle but real way, these attitudes can undermine the critical objectivity which must underlie both the medical and economic decisions of prescription writing," the letter stated. [From the New York Times, Feb. 2, l9Et9) MEDICAL STUDENTS PLAN TO RETURN GIFT INSTRUMENTS (By Richard D. Lyons) Forty-five students at the Harvard Medical School, who said they believed that "an unhealthy relationship exists between the drug industry and the medical profession," decided Friday to return a $40 bag of diagnostic instruments that each had been given by a pharmaceutical company. The second-year students, who conceded that they had invited the offer last year, said in a statement that "we now feel that we made a mistake and think it proper to return the instruments" to Eli Lilly & Co. of Indianapolis. In a letter to the company, the students said that such gifts undermined the "objectivity" of doctors and medical students because such gifts "engender a sense of familiarity and gratitude" toward those companies that dispense them. "In a subtle but real way these attitudes can undermine the critical objectivity which must underly both the medical and economic decisions of prescription writing," the letter continued. "In an analogous situation, it is universally recognized that an official who awards contracts should not accept gifts from bidders. "Our aim is to establish good habits for ourselves early in our training and to promote discussion of the relationship between the drug industry, the medical profession and the patient," the letter said. PAGENO="0014" 5486 COMPETITiVE PROBLEMS IN THE DRUG INDUSTRY PRICED AT $40 Richard Pohi, 23 years old, of Lynbrook, LI., who acted as a spokesmen for the group, said the instrument package consisted of a black bag, a stethoscope, i~ tuning fork, a percussion hammer and a tape measure that, together, retail for about $40. Mr. Pohi said thre were about 125 students in his class, some of whom did not `choose to accept the instruments when they were distributed last year. "We want to make this a national issue if possible," Mr. Poh'l said, adding that the Harvard group was talking to medical students at Tufts and Boston Uni- versity in an attempt to have more instruments returned. Last November, 36 students at the Case Western Reserve University School of Medicine in Cleveland returned similar gift~ from a drug company whose name was not announced at the time. In a letter to the New England Journal of Medicine, the Cleveland students said: "We are returning these gifts because we feel they are not gifts but rather are inappropriate advertisements. Although many of these gifts are useful, all but the most naive realize that your motivation in giving them to us is to influence our future choice of drugs." Mr. Pohi said in a telephone interview that he and his fellow students had attempted to return the instruments to a Boston branch office of the Indian- apolis company yesterday but that "no one in a position of authority was there to accept them." He added that another attempt would be made on Monday. Attempts by The New York Times to telephone officials of Lilly in Indianapolis for comment were unavailing. The company is but one of many pharmaceutical corporations that give medical instruments and other materials such as textbooks and sample drugs to doctors and medical students. Some of the companies also distribute scholarships and grants to medical schools. Dr. Richard Burack, a specialist in pharmacology at the Harvard Medical School who has been a critic of the prices and quality of drugs, applauded the students' actions. H~ said in a telephone interview that "it was about time that something was done to widen the link between the drug industry and the medical profession." [From the Harvard Crimson, Feb. 3, 1969] MEDICAL STUDENTS RETURN Gir's TO DRUG COMPANIES (By David N. Hollander) Forty-five second-year students at the Medical School, concerned that an unhealthy relationship exists between the drug industry and the medical profes- sion, are returning doctor's kits given them by a leading pharmaceuticals firm. Each kit, valued at $40, contained a black bag, a stethoscope, a percussion hammer, a tuning fork, and a tape measure. Andrew S. Binder and Richard L. Pohl, second-year students who organized the action, said the students felt the kits were inappropriate advertising rather than gifts. The kits were gifts from Eli Lilly and Company. Binder emphasized that the students were not attacking Lilly or the drug industry in general. "We concentrated on our end of the bargain," he said. "Some students argued that if we turned the gifts back, drug companies would retract their scholarships and gifts to medical schools. That's the way they have us booked. We have to wean ourselves away," Binder said. "Gifts to students are just a drop in the bucket," Binder added. "All the houses producing name-brand drugs hold conferences for doctors and sponsor more blatant dinners and trips," he said. Estimates place the cost of advertising by the companies at more than $3000 per physician each year, Binder noted. "Even if doctors aren't bribed to prescribe certain drugs, it's still costing the consumers." The 125 members of the medical school class decided last year to ask the drug companies for the gifts, Binder said. The University will not make arrange- ments for the gifts with the companies, and in past years Harvard students had been among a minority of the nation's medical students not receiving kits. A letter in a respected medical journal and a seminar at the Medical School later convinced the 45 protesting students that the gifts were inappropriate.. PAGENO="0015" COMPETITIVE PROBLEMS IN THE DRUG iNDU~TE'~ M87 Binder said that a sitnilar number of students agree the gifts should not be accepted but are reluctant~to give ~ip the $40. In a letter published in the Nov. 14 issue of the New England Journal of Medicine, 36 Western Reserve University medical students said they were declining gifts offered in similar circumstances. The Harvard students were also influenced by a seminar on the relation of the pharmaceuticals Industry to the medical profession, conducted by Dr. Richard Burack, clinical associate in Medicine, whom Pohi called "the Ralph Nader of the medical profession." Burack said yesterday he thought the students' action was very wise. "I'm beginning to wonder whether it's proper for doctors' professional actions to be guided by `advertising at all," he said. Pohl attempted to return the kits to Lilly's Prudential Center office Friday, but a secretary told him he was not authorized to accept them and asked him to return today. [From the Washington Daily News, Feb. 4, 1969] GETTING UNHOOKED (By John Herling) The patient-doctor relationship seems about to take on new meaning. Many of the young doctors of the nation have now decided that no third party-like a drug company-shall stand between them and their ethical prescriptions to the American public. For years now the American drug industry has administered tender, loving care-solicited and unsolicited-to young medical students by way of gifts and other "things of value." The gifts were not merely sample drugs-and other "educational" material-but substantial things like stethoscopes, black bags and percussion hammers to test the reflexes. Medical students at Western Reserve Medical School in Cleveland, and the Harvard Medical School in Boston, have now bade the drug companies to cease and desist from sending them donations. They have decided to ship the loot back to the drug company which happily showered such benefactions upon them. Over the weekend, Harvard medical students, in a dramtic onset of virtue-a third of the school-held a "pile in" of medical instruments at a dormitory. The leaders of the "giveback" ~ the drug companies are two Harvard medical stu- dents: Richard L. Pohl of Lynbrook, N.Y., and Andrew Binder, of Boston. In a news conference, the student spokesmen announced they had written a letter of rejection to the Eli Lilly Co., of Indianapolis, one of the nation's leading drug companies. They have concluded, they told the corporation, that a doctor ought no be a recipient of goodies from a drug company any more than should an official who awards contracts accept gifts from bidders. They also might have added that under the Taft-Hartley Law a union officer would be guilty of an unfair labor practice if he received a "thing of value for services which are not performed, or not to be performed." The Lilly Co. appears to be one of many drug companies that typically ply young doctors with rather costly professional instruments. In fact, the practice has become so "normal" that medical students themselves frequently request such gifts from the companies. But Harvard and Western Reserve medical students have now said goodby to all that. They say a doctor's behavior must conform to ethical standards not only in the traditional mode of the Hippocratic Oath, but in the avoidance of the more subtle forms of temptation which could undermine the integrity of the medical profession. In their letter to the drug company, Messrs Pohl and Binder acknowledged that as recently as last year students bad actually invited gifts of medical instruments, an act of solicitation which they now consider to have been a mistake. In all candor, they acknowledge that the medical profession itself is largely to blame for the failure to keep the "proper distance from the industry . . . essential for the doctor's objectivity" in writing prescriptions. On this whole issue, the American Medical Association has not yet talked up. But the ethical stethoscope is beginning to register murmurs in the student bodies of other medical schools. PAGENO="0016" 5488 COM~TITIVE PROBLEMS IN THE DRUG INDUSTRY (From the Washington Post, ~`eb. 28, 19G9] STUDENTS QUEEr DRUG FIRM Tins (By Hal Willard) CHARLOT~rESVILLE, Va.-Students at the University of Virginia Medical School en~barked today on a campaign to direct attention among medical students across the country to controversial links between future doctors and the drug industry. It was immediately apparent at a public debate today between an industry spokesman and a faculty doctor that the campaign has a long way to go in Charlottesville before it hilts the road. Some medical students led by second-year man John Wasson became concerned about the proper relationship between the medical profession and the drug in- dustry. The group decided that the action of students at Western Reserve and Harvard universities in sending back such gifts as stethoscopes, received from drug companies, was merely a "publicity stunt" and a peripheral issue. Their campaign plan is to stir the consciences of other medical students across the country through debates similar to the one here. In today's debate, Dr. William O'Brien, of the faculty, and Dr. Harold L. Up- john, of the Upjohn Co., were asked to discuss, among other things, conflict of interest, drug testing before marketing and drug company advertising. FREE GIFT5 One question asked, "Why do drug companies give free gifts, bags, trips, drugs? Should doctors and students accept them?" Dr. Upjohn replied: "You know why they give them. No question about it. They want doctors to be Interested in prescribing their brands," He then discussed the attitude of the times, pointing out that there should be limitations on gifts and that drug companies should not be too aggressive. "It it (the giving) is excessive, it is wrong," Dr. Upjohn said. Dr. O'Brien replied: "Medicine is the highest paying profession and it should never get in a conflict of interest. It is definitely wrong." He then speculated that he would be dismissed from the faculty if he accepted bottles of whisky from a student in return for A grades instead of Cs. Dr. Upjohn said: "Well, the student could say `Good mornlng~ to you and maybe influence you. What the hell." LAUGHTER AND APPLAUSE! This was greeted with laughter and applause by the estimated 300 medical stu~ dents and faculty physicians who attended the debate. It also brought an inter- loper to the microphone, Lawrence Cranberg of the University physics depart- ment and chairman of the ethics committee Of the American Association of University Professors. "Dr. Upjohn's response is unsatisfactory and rather frivolous," Cranberg said. He then discussed the evils of drug industry hospitality suites at conventions. and sat down to dead silence. But the major issue of the debate was on conflict of interest. Coincidentally, a notice on the bulletin board a few steps down the hail from the debate instructs. students on how to obtain free drugs for themselves and family members living with them from company representatives. Students are told to instruct a physician writing a prescription to note the name of the preferred drug company on the prescription. In a discussion after the debate, several medical students said they never thought of the bulletin board notice as part of the conflict question. They in- cluded some of the group that plans to mimeograph a transcript of today's debate and send it to other medical schools in an eft~ort to inspire similar action. Meanwhile, Professor Cranberg of the ethics committee expressed "indignation at the reaction of the students to Dr. Upjohn's cynicism." PAGENO="0017" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5489 [From the Wall Street Journal, Mar. 28, 1969] SOME MEDICAL STUDENTS SHOCK DRUG COMPANIES BY SENDING BACK GIFTS REBELS SAY MANUFACTURERS TRY TO "BITV" THEM; A FIRM DENIES ANT SELFISH MOTIVE (By Earl C. Gottschalk, Jr.) Inside the classroom, the medical student is sternly instructed in the cthic's of his profession. Outside it, he is showered with gifts and favors by `drug manu- facturers building goodwill for `the day when the young man will be writing prescriptions. Freshman year brings free medical textbooks and plastic models of body organs. In sophomore year, there is a free bag of diagnostic instruments. And in senioi~ year `the blooming physician is likely `to be invi'ted-with his wife-for an ex- pense-paid weekend in New York City to "see the plant" of a major drug maker or tWo. "In the old days we didn"t do much thinking about all of this," says one senior physician. The gifts, in other words, were accepted. But lately, to the embarrass- men't of `the drug makers, a number of young doctors-in-training have been reject- ing the gifts-and giving the drug companies `a sharp lecture on ethics to bo~'t. "The drug industry should realize that these students are a new breed," says Dr. J~oseph W. G~trdella, associate dean for `student affairs at Harvard medical school. Dr. J. L. C'aughey, associate `dean for student affairs at the medical school of Case Western Reserve University in Cleveland, s'ays the drug companies "are alienating `a significant segment of the student body at the present time." The gift issue-~which sometimes arlse~ in other fields, such as journalism- has caused quite a stir in the medical world. Prestigious publications like the New Engl'and Journal of Medicine are publishing letter's on both sides of the controversy. NO THANK YOU The grass-roots rebellion began last fall when 36 `students at Oase Western Reserve returned `their gift bags of instruments `to Eli Lilly & Co. of Indianapolis- `the donor of `that gift-with a tart letter abo'ut conflict of interest. Forty-five Harvard students followed suit, and the revolt soon spread to the medical schools `at Columbia University and the University of Virginia. The gifts in question are more than tokens. One medical school professor esti- mates that `the average student receives $500 worth of gifts and free drugs during his days alt medical school. If the student's wife needs a birth control pill prescrip~ `tion, or his mother-in-law requires diabetes medication, he merely has to tell a drug company "detail man" (salesman) `to get the drugs free. The gifts countinue When he graduates, with drug companies offering free dinners o'r cocktail parties at medical meetings. Dr. Donald H. Atlas, a Chicago physician, declared in a letter to `the New England Journal: "The ubiquitous blandishments of the excessively profitable pharmaceutical ind'ustry begin in medical schost and continue inexorably even beyond our retirement. I should not be surprised to meet a detail man in Abaddon or Nirvana." Clifford Crump, a 22-year-old freshman at Case Western Reserve, is one of the medical studen'ts determined to `resist the blandishments. "Moral outrage" explains the returned gifts, he say's, asserting that the students "feel the drt~g companies are trying to buy them." Some of the rebels, Mr. Crump asserts, have the patient in mind. These stu- dents, he says, believe the drug companies "make `too much on profit on products, spend `too much on advertising compared to research `and misuse `the patent laws by merely developing variations o'f the same drug rather than new drug entities." THE PATIENTS' WELFARE At Harvard, Dr. Gardella detects similar sentimen'ta "S'tudents believe the patient is a pawn between the doctors and `the drug companies," be says. "They feel the responsibility fo'r the patients' welfare-1bolding down the cost of drugs-' has gone begging." Two Harvard studen'ts who wrote the New England Journal said: "The cost of `these instruments and other elaborate promotional campaigns is paid by `the consumer." One drug official recently was quite candid about the gift-giving, Dr. Harold Upjohn, vice president of medical affairs for Upjohn Co., Kalamazoo, Mich., told 81-280-69-pt. 14-2 PAGENO="0018" 5490 COMPETITIVE PfiOBLEMS IN THE DRUG INDUSTRY a group of medical students: "You know why they give them. No question about it. They want doctors to be interested in prescribing their brands." (Upjohn ackknowledges that it also offers some gifts to students.) However, officials at Eli Lilly, the original target of the revolt, seem a bit hurt by the rejections. One company source says that if Lilly stopped sending out the free instruments, the savings to patients wouldn't amount to more than 1-20th of a cent on each prescription. Henry F. DeBoest, vice president for corporate affairs at Lilly, says, "For many years we have given basic medical instruments to students as a mark of our appreciation for their willingness to undertake the long, difficult road to an edu- cation as a physician. Over the years, most students have accepted them grate- fully." Now, "a minority of medical students have been making headlines by public pronouncements rejecting gifts," says Mr. Defloest. "It is our feeling that a gift is unacceptable all that is really needed is a polite, simple, `No, thank you.'" C. Joseph Stetler, president of the Pharmaceutical Manufacturers' Association, says that the drug companies' expenditures on gifts are small compared with their contributions for scholarships, teaching aids and a variety of educational materials that have no product orientation. And some older doctors scoff at the revolt. Dr. Saul B. Gibson of New York says that physicians are "continually exposed to advertising blandishments of all kinds . . . and many of us come through unscathed." Do the protesting students, he wonders, really believe that doctors "are so weak-minded that eevryone has a price-and such a low price"? Dr. C'aughey of Western Reserve says the dispute poses a delicate issue for the mhnufacturers: "The drug industry will have to make up its mind whether it is building good will or creating a negative response." [From the Washington Post, Apr. 9, 1969] GIFTS UNDESIRED Twenty-five second-year students at the University of California School o~ Medicine have urged drug companies to stop supplying medical students with gifts and use the savings to provide medicines on a regular basis to neighborhood health centers. The California students, who comprise slightly less than one-fifth of the class of 130 at the medical school in San Francisco, made the request in a letter to a large drug firm which has given them black bags and other gifts. The letter, which was made available yesterday to The Washington Post, said that "many" of the 25 signers have returned the gifts to the manufacturer. This was the third such episode in recent months. The earlier ones, also by second-year students, were at Case Western Reserve and Harvard Medical Schools. Senator NELSON. Mr. Martin, you have a prepared text. Now, you may present it in any way you desire. If you wish to depart or ex- temporize on anything from your text, feel free to do so. You may proceed. STATEMENT OP EDWARD D. MARTIN, NATIONAL PRESIDENT, STrt1~ DENT AMERICAN MEDICAL ASSOCIATION; ACCOMPANIED BY CHARLES C. HEWITT, EXECUTIVE DIRECTOR Mr. MARTIN. Fine. Thank you. I am a senior medical student at the University of Kansas, and I am appearing here today as president of the Student American Medi- cal Association at the request of Senator Gaylord Nelson. We have been asked to discuss as concretely as possible the activities of the pharmaceutical industry in medical schools, especially with respect to students, possible impact when they go into practice, possible effect of pharmaceutical advertising on the quality of medical care and the relationship of the medical profession to the pharmaceutical industry. PAGENO="0019" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5491. There has been some confusion about the capacity in which oth~ er medical students and I would be testifying. I have a quote here from the PMA newsletter, volume II, No. 23, June 6, 1969, in which they write: Although not yet announced by the subcommittee, the scheduled witnesses are four representatives from the Student American Medical Association. There are no other medical students testifying for or at the request of the Student American Medical Association. I would hope that this would help avoid any further misinterpretation about my testimony as related to other students who have been invited or have requested to testify before this committee. There seemed to be some misunderstanding by PMA-we do not understand how they got the information-in regard to who was testi- fying for our organization. The first category in my testimony documents the activities of the pharmaceutical industry in medical schools and with medical students that we have been able to compile in our initial study. I have included 18 categories of materials which are provided by phar- maceutical companies mostly free and also mostly at the request of medical students in schools across the country. These are from pre- liminary discussions with students at this point at 46 different mecli- cal schools. Senator NELSON. Forty-six medical schools? Mr. MARTIN. Forty-six at this time; yes, sir. In addition- Senator NELSON. Does every medical school have a chapter of your organization? Mr. MARTIN. No, sir. Senator NELSON. How many do? Mr. `MARTIN. There are 87 chapters. Senator NELSON. How many? Mr. MARTIN. Eighty-seven medical schools do have SAMA chapters :and seven do not. Senator NELSON. All but seven do have chapters? Mr. MARTIN. Yes, sir. Senator NELSON. I see. How many members do you have? Mr. MARTIN. If you include last year's seniors who gradua:ted, not counting the incoming freshmen, 27,000 members. Senator NELSON. 27,000? Mr. MARTIN. Yes; of about 35,000 total `medical students. In addition to the above medical materials, arrangements are made at some schools for students in certain classes to visit the plants of pharmaceutical firms. This is mostly the case in the midwestern schools. It is our understanding' that this entails the medical student providing his own trans~portation, with the company providing for room, board, and entertainment. Now, this offer is not taken by a ma- jority of medical students in the schools like the University of Illinois where this is a big program. The medical student, intern, or resident may also receive any drugs, he or hi's family needs without cost from detail men. Medical students, in most cases, need to have prescrip- tions signed by licensed physicians for prescription drugs. Baby foods, Similac, and other baby supplies are usually available without cost when they are requested. PAGENO="0020" 5492 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY In some schools and hospitals, drug companies also pay expenses for residents and interns to attend scientific meetings. It is the feeling among most students that the majority of gifts listed above do serve an educational or utilitarian purpose, but stu- dents also recognize there is a certain number of the gratuities which have no value whatsoever. Only rarely, to my knowledge, have any students communicated this feeling above a specific item to the phar- maceutical company involved, except for the recent returns. This is the first time, I think, that this has ever happened. I apologize for the incomplete nature of the information, but we are undertaking a very thorough study of the extent of the gratuities through our committee on pharmaceuticals. This study, which will be quite detailed, will be completed this summer through areas directed at medical students, interns, and residents, as well as through a re- quest for this information from major pharmaceutical companies. From our initial requests for informatiop in this area, it is clear that the pharmaceutical companies. will probably provide the request spe- cifics. We `are also quite concerned about what the total cost is of the black bag, for instance. While it is $20 retail, we would be very inter- ested. to know, when they buy it in lots of 8,000, what the actual cost is, what their actual efforts are in regards to cost. And `we do hope they will provide us with this information. In regards to the medical, student organizations, on the local level the pharmaceutical companies are active in many schools supporting social functions, newspapers, `and the like. There are two national medical student organizations. One is the Student Health Organi- zations- Senator NELsON. Excuse me. What is it? Mr. MARTIN. The Student Health Organizations is `a loose confed- eration of 1,000 to 3,000 health science students in autonomous local chapters. T'he Student Health Organizations holds a national assembly each year and `has the loosest of structures with the SHO rarely having a national position on issues. They are a multidisciplinary organization and have been associated primarily with the large summer health proj- ects of the past three summers, active resistance to the `war in Vietnam,. ending minority group admissions discrimination by medical and health science schools, and actively discussing ethical questions which confront the health professions-especially in regard to accountability of the professions to the communities they serve. They have received over $3 million in support from the Federal Government, primarily to support the large summer health projects. Senator NELsoN. What kind of health projects are those? Mr. MARTIN. In the summer of 1967, they `had a project in Chicago, the `South Bronx, and in the `San Joaquin Valley where 270 health science students were involved in active participation, in `community organizations, working with community agencies, `basically learning about community advocacy, working in the community doing various and sundry tasks with physicians, with community organizers and the sorts. The year following, 1968, there were eight projects, and I think this summer there are two, one in Milwaukee and one in New England, the Tufts-Harvard-Boston complex. Senator NELSON. How many students participate in these projects? Mr. MARTIN. The first summer about 270, the second summer about PAGENO="0021" COMPETiTIVE PROBLEMS IN THE DRUG INDUSTRY 5493 ~00, and I think this summer about 120 to 140. The students are on stipends running from $700 to $900 for the 8-week summer program. To my knowledge, the SHO has neither requested nor received an support from the pharmaceutical companies except for drugs whic are utilized in their community clinics, of which they have 10 or 12. Their publications are financed by grant. money and individual con- tributions, and they have, in the past, allowed no advertising to be included. Their publivations include Encounter, Fe$, Borbyrgmd and Conception, and are published locally and distribute.d irregularly, cer- tainly not to the bulk of the students in the country. Mr. GORDON. Excuse me, Mr. Martin. Does your organization en- gage in the same type of activity that the Student Health Organiza- tions participates in? Mr. MARTIN. In regard to the activities, the basic areas of concern, most certainly, yes. This summer we have Appalachian project. There will be 130 medical and nursing students working in Appalachia. We have a Job Corps program. We have 26 local community health proj- ects. We have a very large project in Kansas City. In the area of minority group admissions we are very active. Our organization has not to this time taken a definitive stand on the war in Vietnam as the SHO has; but has been of course quite concerned, and there has beeti a lot of active debate in our House of Delegates, but in most areas we are very active. Senator NELSON. How are your activities in Appalachia, Kansas City, and elsewhere funded? Mr.. MARTIN. All from different sources. The Appalachian program is funded by the Appalachian Regional Development Commission through their 202 program. in.the Appalachian States. The Job Corps program is funded by the Department of Labor, The Kansas City project is funded at about $35,000 a year by the American Medical Association. Senator NiELSON. What kind of work do you do in the Job Co±ps program, for example? Mr. MARTIN. This summer we will have 16 medical and dental students working with the health facilities people in the Job Corps centers to observe health care delivery to Job Corpsmen, and I think most importantly to start to evaltiate what wa.s the health care for the Job Corpsmen before they came into the program, and most im- portantly what is being set up to make sure that these people are bein followed up. These young people have terrific health problems, an the 6 to 18 months that are involved is not enough to completely pro- vide care. So we are going to try to provide recommendations as to how we might be able to follow them up more comprehensively after they leave the Job Corps center. Senator Dorrn. Is there an SHO chapter in the University of Kan- sas Medical School? Mr. MARTIN. That is very difficult to answer. This is sort of a local political problem. The Student American Medical Association in 1965, 1966, and 1967 certainly did not represent the majority of medical students. It had a very dubious relationship to the medical student activists in the country. In the 1968 House of Delegates, though, it completely changed. I think the greatest change that occurred came from people who had been involved in the SHO who forced a change PAGENO="0022" 5494 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY in the organization. So at Kansas, where I was initially involved in an 5110 chapter when its definition was completely different, we be- came an SAMA chapter essentially, and this happened at most of the schools across the country. These usually are not both chapters, and if there are, one is usually very weak. Many schools, for instance- Senator DOLE. Then there is or is not one? Mr. MARTIN. There is not one at this time. Senator DOLE. How many students belong to the Student American Medical Association at Kansas Medical School? Mr. MARTIN. About 80 percent of the students belong. Our 5110 chapter had only 20 members. Senator DOLE. And are these Student Health Organizations found around the country? Mr. MARTIN. Yes, sir. There are some schools where they are very strong. They have gone from medicine to the war in Vietnam, apparently. Senator Don~. Well, I think they found a strong relationship be- tween health care and the war in Vietnam. Senator NELSON. They probably thought the war was bad medicine. Mr. MARTIN. In their past three national assemblies of the Student Health Organizations, the issue of the pharmaceutical industry has not been a significant issue, and they have issued no policy statements in this regard. * I certainly cannot speak for the association of local organizations and would not presume to do so. The information above is based on my personal communication with leaders of the various 5110 chapters which is extensive, and my past involvement with many members of the 5110, most particularly in regards to my interest in community health of which they have had a great deal of experience. * On the local level, drug companies as I point out do help medical student organizations in varied ways. The Student American Medical Association is an autonomous na- tional organization with chapters at 87 medical schools, and has 21,000) active medical student members and 35,000 affiliate intern and resident members. This year we have had an approximate income of $455,000 with roughly $153,410 (or 33.7 percent) coming from pharmaceutical com- panies. This income can be broken down as follows: For scientific and conventional programs, $46,410; advertising in our Journal, The New Physician, $102,900, and sustaining memberships, $4,100. * Senator NELSON. What are the duties of your organization? How much are the annual dues? Mr. MARTIN. We do not have annual dues. Each freshman pays $5, and this is his dues for the subsequent 4 years. Senator NELSON. I see. Senator DOLE. I wonder, on page 5 you say- The full extent of these activities are also undocumented but will be available to this Committee, if it wishes, as soon as our information has been gathered. Mr. MARTIN. Yes, sir. Senator DOLE. I think it might be helpful to have- Mr. MARTIN. Well, I can basically-our Committee on Pharma- ceuticals, which was just formed at our last House of Delegates- Senator Dor~e. Which was when? PAGENO="0023" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY .5495 Mr. MARTIN, In April, it was April 4 of this year-has seven mem- bers who are very actively investigating, or that is a bad word, ac- tively trying to determine the extent of the pharmaceutical involve- ment in medical schools and in medical student organizations, and they are gathering a considerable amount of information. And as I pointed out, both in my testimony and in the correspondence with, or commum- cation with Senator Nelson, we will make all this information avail- able as soon as we gather it in any complete form. Senator DOLE. This information is not forced upon your associa- tion, is it? You can decline it, I understand, if you wish. Mr. MARTIN. I am sorry. Senator DOLE. These so-called, the undue influence, if any, by a pharmaceutical company, is not that voluntary-in other words, can you not decline whatever is offered? Mr. MARTIN. Oh, yes, not only can the association, but the individ- uals can, and I think I make this point later. The scientific and conventional programs are elucidated in ap- pendix A.~ Mr. GORDON. You say that one-third of your income comes from the pharmaceutical industry? Mr. MARTIN. Yes, sir. Mr. GORDON. What percentage of your income comes from the Amer- ican Medical Association? Mr. MARTIN. The American Medical Association's contribution to the Student American Medical Association is, I think, about $4,000 worth of advertising for their specialty journals in our journal, The New Physician. Each year until this year, they have put on a banquet or a luncheon but our House of Delegates has said this will not be the case anymore for any organization. So they have made that contribu~ tion. In 1962, we were bankrupt, and they made a long term low in- terest loan of $50,000 to the association. Since then they have given no financial support except to grant the Kansas City project, which is not national SAMA money; it is spent all locally. It is for a very large community health project in Kansas City. So their actual contribu- tion in regard to funds is a very small part; 1 percent, one-half of a percent to the association. Mr. GORDON. Well, let me turn the key around. What percentage of your income comes from the students themselves? Mr. MARTIN. Unfortunately, only about 4 to 6 percent. Mr. GORDON. Four to 6 percent from the students. And it is a student organization! Well, where does the rest come from? Mr. MARTIN. Well, the Federal Government through programs we have developed, for example, the Appalachian program, Job Corps, provides a considerable part of the income of the organization. The pharmaceutical companies, of course, 34 percent. Another very large category, there was a life insurance plan that was developed in the late 1950's which is a low-cost term insurance program for medical students and resident interns which was developed and which the, which is th& most inexpensive insurance policy that students can get. But the ar- rangement that was made in the late 1950's was that if the student so wished, he could have his dividends assigned to the association and we 1 See Apipei~dixes, pp. ~J515-5524. PAGENO="0024" .5496 COMPETITIVE PROBLEMS IN THE DtWG INDtBT'~Y have received each year about $81~O00 in these assignments, although we have no commercial relationship with the sales of the insurance whatsoever. This was a previous arrangement and it does indeed contribute to a considerable amount of our income. Mr. GORDON. But only 6 percent, 4 to 6 percent comes from your own members, though, right? Mr. MARTIN. Yes, sir, which is a situation we are trying to obviously remedy. But it is very difficult to drag fees out of medical students, and this has been our basic problem. Our organization has undertaken a very profound change in the last 1 or 2 years and now we are trying to correct these practices. Senator DOLE. In what respects? Mr. MARTIN. Well, I think in the past it can be fairly said that SAMA was a commercial organization, and, to use the rhetoric of many of my peers, it was irrelevant to students who were actively con- cerned. And it really was sort of a fraternity type of outfit, and for it `to engage in things like pharmaceutical and insurance programs and this sort of thing was consistent basically with the ways of the stu- dents then. This has changed. Now we are obviously needing and find- ing ways to change our financial base so we will nbt feel any obligation. Senator Dou~. What do you mean by "com'mercial-~ocial organiza- tions?" You say it was a commercial-social oFganization. Mr. MARTIN. Well, I think when you have an association whose basic emphasis and income are in the areas of insurance and special member- ship service programs, you are ta1kin~ about a commercially inclined organization. I think we are a professional organization now and our basic commitments are definitely . in other areas. We spend no time on these other things. Senator NELSON. Is this budget for the past 12 months the $455,000, is that typical, or could you not say you had a typical budget? Mr. MARTIN. Oh, no, sir. The year before that it was a little less than ~3O0,OO0, and then you were really starting to talk about a higher per- centage of pharmaceutical income reflected in this. And certailily the insurance moneys. Next year's proposed budget is about $750,000. Senator `NELSON. What will be the source Of that? What is your hope? Mr. MARTIN. The basic source is Federal funds for programs. Senator NELSON. This is for programs? Mr. MARTIN. Yes, sir. Senator NELSON. So in this $455,000 there is one $53,000 here enumerated under the three different items, and $80,000 now from the insurance dividends. Mr. MARTIN. Yes, sir. Senator NELSON. Then that leaves well over $200,000. Is that all- Mr. MARTIN. I can quickly break the other $200,000 down; $30,000 `from subscription and membership dues; about another $20,000 from sustaining memberships (private physicians who subscribe to The New Physician); about $60,000 from other advertising sources like the Armed Forces; $3,000 a year for advertising the Journal of the AMA. Senator NELSON. What do the Armed Forces advertise for? PAGENO="0025" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5497 Mr. MARTIN. For their internships and residencies. And the other $60,000 comes from Federal programs in the areas of Job Corps, Appalachia we have already initiated this year and which is reflected in this year's budget-the bulk will be next year, but will be included this summer which is the next fiscal year. Senator NELSON. And so the substantial increase that you are pro~ graming for will be Federal moneys for projects or programs of some kind, is that correct? Mr. MARTIN. Yes, sir. We are a very project-oriented organization now, and we are also changing. I think our dues structure is going to change profoundly in our next House of Delegates; we are going to go to $5 a year. Our membership is up substantially. Our sub- scriptions are up for The New Physician very substantially so all this will change the organization. It has become a very active organi- zation in terms of financial support, much broader and greater in terms of students and practicing physicians. Senator DOLE. Could you review for my benefit-you say you get about 4 to 6 percent income from the membership, right? Mr. MARTIN. Yes, sir. Senator DOLE. And, what, a third from the pharmaceutical companies? Mr. MARTIN. Yes, sir. Senator DOLE. That is about 39 percent. Now what-do you have any general breakdown of the balance? Where does the other 61 percent come from? Mr. MARTIN. Well, I broke it down by dollars. I think I could submit for the record an exact statistical breakdown.1 Senator DOLE. I would like to have that for the record but just now could you give me any other sources of income you have besides the uiembers, pharmaceutical companies--for instance, what percent do you receive from the Federal Government? Mr. MARTIN4 In the budget that we are looking at now, $455,000, probably around 20.percent. Senator DOLE. Twenty percetit? Mr. MARTIN. Twenty percent. Senator DOLE. That. would be 59 percent. Now, where does the' other- Mr. MARTIN. And for the other sources of advertising'we are talking about 20 percent, and insurance providing about 15 percent, sustain- ing memberships'about another 8 to 10 percent, and I think- Senator DOLE. I `think that probably accounts for most of it. I did not quite understand the insurance you were discussing with Senator Nelson. Will you run that by me again? Mr. MARTIN. Yes, sir; in 1956, our previous executive director, who had been an insurance salesman, set up a group plan for all SAMA members which was a very inexpensive plan. Part of the stipulation of this plan was that you had to be part of the group; in other words, a SAMA member, and the second was that if you so chose you could assign your dividends back into the organization, and this was the SAMA life insurance plan. Senator DOLE. The life insurance? 1 See pp. 5525-5529. PAGENO="0026" M98 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Mr. MARTIN. Yes, sir; term life insurance policy for the $10,000 or $20,000. And I think there is $108 million worth of this plan in effect right now. And the dividends from these are rebated back to the organization and come to about $81,000 a year, but the organization itself is not involved in the sales of the plan. This is through a com- mercial insurance company, the Minnesota Mutual Life Insurance Co. Senator DOLE. I see; do you still have that plan? Mr. MAR~rEN. Yes, sir. Senator DOLE. Are you given any preference over other groups, non- medical students, for example, as far as cost of insurance, or don't you know? Mr. MARTIN. I think-well, yes, sir, we are a group plan by being .a very large group, 65,000- Senator DOLE. You mean you pay the same rate as another group of the same size? Mr. MARTIN. Yes, sir; it is just another group plan. I began to talk about advertising income and of The New Physician itself, which fits in very well with previous testimony. Forty-nine point six, or around 50 percent of our advertising income does come from pharmaceutical advertisements. The ndvertising policy of The New Physician has been to only advertise those drugs which have been ap- proved by the AMA Council on Drugs and have met with the adver- ~tising standards of the Journal of the Americ~an Medical Association. The AMA has provided this help without cost in the. past. Our last House of Delegates specifically instructed our executive council, our governing board consisting of 10 elected medical students, to create specific standards for all advertising in The New Physician, and we will set these standards this summer after consultation with the appro- ~priate organizations and informed groups, including the AMA Coun- ~ci1 on Drugs, the A.Ph.A., the staff of the Medical Letter, the FDA, and the PMA. Right now two of our members of the executive council are gather- ing information and reviewing the standards of other organizations and other journals as to exactly how they are going about making sure that the advertising is of an ethical nature and we, of course, have had some great difficulty. And I might say the 10 books that were supplied by Mr. Gordon were. of considerable. help to this committee. I think probably we will develop a policy by August which is very specific and we will have a review board composed of members of professional caliber; people like Dr. Adriani, we hope, will accede to our request; people on the staff of the Medical Letter and these types of individuals so we can be sure. I think we would be very vulnerable to a criticism of our advertisingpolicies in the past. I think there have been some criteria which were probably inappropriate-not probably, \we~'e inappropriate. Mr. GORDON. Excuse me. Would you repeat that? I did not hear that. Mr. MARTIN. I think our criterion for advertising in the past has been poor, as a whole. Before September 1968, when our student eth- tors assumed control, we had advertising inserted in the text. We had advertising that was, if not misleading, it certainly did not provide information for the student. No*, the practiôing physician might have the information necessary to make a critical judgment, but most students are unaware of some of the contraindications and this sort ~of thing. We are now hopeful]y moving toward a real critical evalua- PAGENO="0027" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5499 tion of each advertisement as it comes in and does this or does this not meet an educational requirement that we hope to set in regards to what is the drug, what are its indications, contraindications, this sort of thing.. Senator NELSON. I am interested to hear that. On careful reading, the AMA's advertising principles would appear to be very sound, ex- cept they do not live up to their own principles. That has been their problem. For example, AMA has had one principle, one guideline, for years-that is, that they would not accept advertising for any fixed combination drug unless there was adequate controlled scientific evi- dence to support its use, yet they carried advertising for all fixed ratio ~combination antibiotics for years despite their own principle that they would not. And there was no scientific evidence that supported the use of fixed combinations. The then chairman of the council on drugs, Dr. Dowling, in 1957, wrote a very strong piece critical of the use of fixed combinations. Dr. Adriani, the current chairman, is very critical of thern use of fixed combinations. The National Acadamy of Sciences, as you know, recom- mended removal of Panalba which is a fixed combination of tetra- cycline and novobiocin. And even after all this and after the recom- mendation of the National Academy, .JAMA carried full page ads on Panalba. So it is one thing to have standards for the acceptance of advertising that reads very well but it is quite another thing to live up to them. And I certainly commend you for e~tabiishing a pro~ cedure for evaluating the ads to see to it that they are educational rather than promotional, so to speak. I think that is certainly a sound step in the right direction. I do not know how much advertising you will get hut- Mr. MARTIN. This remains to be seen. I think it probably will not change significantly, but that of course is suppositional. Going on to activities in regards to the- Senator NELSON. Where are you exactly? I am sorry. Mr. MARTIN. I am on the middle of page 7. Senator NELSON. In the middle of page 7? Mr. MARTIN. Yes, sir. In addition to the direct income above2 one. ~pharmaceutical company has sponsored a large party at each national SAMA convention for several years, and this is characteristic of the industry. In the past the pharmaceutical industry has endowed our organization heavily in the areas of social functions. Our House of Delegates this year voted almost unanimously to approve a resolution, which is included as appendix B attached to my statement, resolution No. 25, which ended all funding by our organization of any other con- tributors for social activities at any of our regional or national con- ventions. These moneys, the delegates felt, should be diverted into educational programs such as the "Symposium on Medicine in Society," which was a series of speeches delivered by experts on topics pertinent to future physicians. A program of this symposium. that we held is included as appendix C. The sponsor, when informed of the delegates' decision, readily agreed to the reallocation of the funds for educational purposes.1 1 See appen~cIixes, pp. 55i~-5524. PAGENO="0028" ~5OO COMPETITIVE PROBLEMS IN TUE DRUG' INDUSTRY Another company has directly sponsored "Conversations in Medi- cal Ethics" each year at our national conventions. This year's "Con- versation" dealt with "Prolonging Life" and has been scheduled for similar presentations by 22 SAMA chapters across the country. Pharmaceutical companies have contributed drugs to most local SAMA community health projects, and several companies are dis- cussing with us further ways to aid in these areas of medical educa- tion `and community `health. The Nigeria-Biafra medical relief program sponsored by the Stand- ing Committee on International Health of SAMA has collected about $75,000 worth of free pharmaceutical's from pharmaceutical firms and has made arrangements to have these distri'buted overseas. It is clear `from the incomplete information above that the phar- maceutical companies are quite active both in medical schools and in medical students organizations. To present a broad but incomplete picture of the degree of phar- maceutical company activities related to medical students with limited preparation is difficult, to presume to present definitive testimony on student attitudes toward these activities, is almost impossible. I do so with trepidation, based only `on extensive contacts with my fellow students, and with the recognition that there is the broadest diversity of opinion among medical students on this issu&-~as on all issues. A small but growing and well-publicized minority of medical stu- dents are refusing certain gifts by pharmaceutical companies and re- turning them. Some feel that drug companies are trying to buy them, others `that excessive costs for promotion and substantial profits by the pharmaceutical industry serve to chea't the consumer. And, finally, some feel that attacking the pharmaceutical industry `is a successful way of confronting a decadent, bourgeoise, capitalistic society. Mr. DUFFY. Mr. `Martin, if I may interrupt you at this point, would you perhaps give me an idea o'f the ntim.ber of the small but growing minority that you speak of? Mr. MARTIN. In numbers? Mr. Dupry. Would you tell me what' percentage that might repre- sent in terms of the total medical student population' in this country? Mr. MARTIN. I think a total of 100 and some students have i~eturned gifts, the students of Western Reserve, Harvard, Columbia, and I think the University of Virginia, which was not inoluded on this. So even assuming there about 200 or 150, you are talking I think about one-half of 1 percent, one4hird of 1 percent. I do not think that- Mr. DUFFY. Would you' say there are 65,000 medical students? Mr. MARTIN. I am sorry, 35,000 medical students and about 30,000 interns and residents. Mr. Duñr. Do you feel that fewer than 200 is the size of this minority? Mr. MARTIN. Well, I do not feel it. It is a fact. There are fewer than 200 who have returned their bags. Mr. Durs'r. Thank you. Mr. MARTIN. The vast majority of students, as was just pointed out, however, do accept gratuities-not passively, but by requesting certain items or by picking up the equipment or books that they know are being distributed. And this is one of the clear things we found out from our survey: the fact that very rarely in most schools is this given away or jammed down the medical student's throat, but rather PAGENO="0029" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5501 the student actually had to make some kind of an effort to get in,' even if it meant walking to the post office, but nonetheless he had to pink it up. There is no question that many of the gifts are of significant edu.. cational value to medical students, and they consequently accept them readily. The black bags, stethoscope's, and other equipment are ai~o accepted since they represent items which otherwise would have to be purchased by students with limited incomes-made more limited by `a 8.5-percent prime rate, a failing guaranteed loan program and the imminent danger of decreased funds from Health Professions Act loan program-and rapidly increasing education and living expend- itures. The vast majority of students I have spoken with do not feel they are compromising their professional ethics by accepting gifts that are educational or utilitarian in nature. The issue of gratuities, however, has now. been raised and there will be an increasing number of students who will be `forced to more tare- fully define their own ethics in the context of the arguments being raised by their smaller number of students. There probably will be a larger number of gifts returned next year, although by no means a majority. Senator NELSON. On the question of free drugs for the student or his family, if he has one-is it generally accepted by the students that if they need some prescription drugs, that they will go to the detail man to get them? Mr. MARTIN. I make this point later in my testimony, but in the majority of medical schools, medical students are sequestered from detail men. In fact, this is my fourth year in medical school and I have not yet seen a pharmaceutical detail man. But what you must do; you know their names and you know the companies, you have to get a prescription signed by an intern or resident usually if it is a pre- scription drug, and then you leave your request at the pharmacy. Our school and most other medical schools are very negative toward "commercial influences" and protect the students from pharmaceutical representatives. So in almost every case I know of it is necessary to go through an intern or to go through a pharmacy in order to get the equipment. I never met a pharmaceutical representative. Of course, I have never requested free drugs either, but I do know the students never meet the detail men or never ask them directly, at least in the majority of the schools that we have- Senator NELSON. The school keeps a list of companies and detail men who can be called? Mr. MARTIN. Yes, sir. For interns and residents, of course, that is a different question. It is SAMA's policy that it is undesirable for our profession to be receptive to promotional activity that does not contribute directly to the physician's or medical student's scientific or professional knowl- edge and thus has no foreseeable benefit to health care recipients. And this became our policy at the last House of Delegates by the resolu- that was passed. We acknowledge not only the right, but the' responsi.. bility, of an individual physician to use his professional discretion and judgment in choosing the appropriate drug, not only in regards to quality but to cost. We believe that, as the issues involved are rationally discussed by medical students across the country, a more discriminating approach PAGENO="0030" 5502 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY toward gratuities will rapidly develop. There is no reason to believe that students who have accepted questionable gratuities are "immoral" or "dishonest" but rather that they have only recently been confronted by these isSues. Mr. GoiwoN. ~W~y have they recently been confronted by this? Have not these issues always been here? And this so-called minority that you talk about, is it not the minority that is reaily bringing it up? Mr. MARTIN. Oh, yes. I think, to wander, there are a great number of problems which have been with us for many years and neither the medical student nor the society nor even the Congress has faced them. There is talk about racism; there is talk about wars; there is talk about military-industrial complex; there is talk about a very large number of issues, ethical and moral, that have never been broached by anybody. And I think for some strange reason, I am not quite sure what it is, students, in particular, in medical schools, I can assure you, are facing these very complicated issues in an increasing number at all times; for instance, the whole idea of community accountability has been raised in lots of medical schools and caused a great deal of unrest in schools. Minority-group admissions, where, in the past, there have been blatantly racist admissions, not requirements but limitations, the students are the ones that brought these up. And so these issues, as many others, are being brought up. Maybe this existed a long timer but, like other issues, they have just been brought to the fore by these minority students. I do not underestimate the issues they are bringing up and I think I pointed that out. Mr. GoiwoN. Would it be correct to say that these resolutions that have been passed by SAMA in the last convention resulted from the efforts of this minority? Mr. MARTIN. There is no question about that. What happened at the convention for the first time in 3 years that I had attended, the issue was brought before the students. It was very roundly and heatedly debated and the students made a decision, and this was their decision,, which I think was predictable. Medical students predictably are con- cerned about these kinds of ethical relationships. But they did not ac- cept all premises, I might add, that were introduced in the arguments.. Senator NELSON. May I ask, what would be your opinion of the reason that the drug companies give stethoscopes or medical bags or free drugs and various `other types of gratuities? What is the objec* tive of a company which does that? Mr. MARTIN. I make the point later in my testimony, but I think the president of Upjohn has told us all quite well. They are trying to acquaint the student with the name of the company, which they do. And I think secondly, they are trying to; as part of an overall plan, influence another generation `of physicians to the utilization of brand-name drugs which are associated with companies and names over a generic approach. I think there is no question about it. I think the best people to talk to are the management advertising people of pharmaceutical companies. At least some of them have said that. I think that is why they are doing it. That is a little different field than' miner-management advertising. Mr. Durrv. Mr. Martin, I would just like to follow through on your thought. Certainly you say the accepting of gratuities is not immoral or dishonest, but the inference is there that. there is some- PAGENO="0031" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5503 thing seriously wrong. I have read your testimony. I am not at all exactly sure what you are saying, or whether there is not a different inference here.. Can you tell me in just a few words what is the prob- lem here? I would like to come to grips with this problem. Mr. MAR~E~N. I see the prthlem,' and unfortunately I was ambigu- ous here. I think I make the point in the next two statements. I think to say that the majority of these students are dishonest, unethical, or anything else, is absurd. They are not. To go on, they are not insensi- tive to the problems of the community. They are not insensitive to health care costs. They are not insensitive to any o.f these things. I do not think that my testimony should reflect any degree of negative evaluation on the part of these students. To say that is, I think, absurd. I `have a `black bag, and I consider myself deeply involved; very concerned, and I do not think that my taking a `black bag or a stetho- scope has tarnished my ethics or concern for the community. I think this goes for the vast majority~ of medical students, and I have a feeling this is a symbolic gesture, for some people it is a very sym- bolic gesture. I happen to think that they are missing one of the major points of the entire issue, and if this is their symbol, fine. I think that most medical students have not chosen to make this symbolic gesture and are none the worse for it as far as morals or ethics go. I want to make that clear and I tried to later in my testimony. I point out in the next paragraph that at our convention this was a very hotly debated issue. Some of the students who were indeed the students behind the return of the black bags were very ascerbic. They argued very loudly, often rudely. They confronted the drug companies. They picketed. They were almost at the point of physical confrontation with a lot of the. drug people-hardly a rational argument about what needed to be done in regard to a very large problem, of which black bags happened to be a very small part when you talk about health care problems in our country. But nonetheless, I was very impressed by the fact that the pharmaceutical companies, even after this, showed no vindictiveness in regard to retaliation on our organization. And, in fact, they have very recently become desirous of much more com- munication. And I go into this in more detail later. It is also my belief that pharmaceutical companies will come to recognize the changes that are occurring in medical students across the country. I think they will increase their support to community- oriented projects and they will accept the deemphasis of funding of social functions and begin to shift their support to more clearly definable educational programs. Like I point out, there `has been ilo retaliation. In regard to the impact, to say drug companies are suc- cessful in "buying the future physicians of America" is both without basis in fact and a slur on the professional ethics of a future generation of physicians. I do not think that the moral outrage of a very small percentage of' medical students reflects mora.l purity on their part by any means. Rarely do students feel any obligation to the company that has provided them with a particular instrument, book, or service. And I for one am included in this category. There can be little question, however, that promotion does make company names more familiar and that advertIsing can make brand names almost second nature, especially when most available sources of information are based on company or brand name distinctions. PAGENO="0032" 5504 co~nwrmvE PROBLEMS' IN THE DRUG INDUSTRY Massive advertising campaigns certainly do influence medical stu- dents, but only when conducted in the absence of reliable,'unbiased, and current drug information-~such as the Medical Letter, or, hopefully, the AMA Drug Evaluation. Senator NELSON. May I ask a question there? Mr. MARTIN. Yes, sir. Senator NELSON. What percentage of the students would you guess receive or read the Medical Letter regularly? Do you know? Mr. MARTIN. I do not know at this point in time-like I said, our information is incomplete, but we know of 15 schools' where the en- tire sophomore class receives it while they are taking pharmacology. At the end of their sophomore year they are `faced with the option of subscribing or not subscribing. At that point, I cannot tell you what percentage do. I do see a lot of them in my school. I subscribe to the Medical Letter. Senator NELSON. What is the student's subscription `price for the Medical Letter? Mr. MARTIN. At our school we get it for $8, but I think there is an arrangement between our pharmacology department and the Medical Letter. I cannot tell you if you just bought it from the company what it would be. I think it is $15 or $18 a year for practicing physicians. But I think students have a decreased rate. The widespread use of the Physicians' Desk Reference as a single source `of information by medical students, house stalT, and faculty clearly creates a problem in regard to obtaining information with the previously mentioned characteristics. For 2 consecutive years, the SAMA House of Delegates has urged the AMA and/or the Depart- ment of Health, Education, and Welfare, to publish a suitable reference source. From the preliminary reports I have read, the AMA Drug Evaluation may well indeed serve this purpose. The naive feeling that medical students are at the mercy of the pharmaceutical industry in regard to their training in pharmacology and therapeutics overlooks several important points. `They are: (1) The available basic information in these areas is increasing and each class of medical students is exposed to more complete mecha- nisms of action and therapeutic fundamentals; (2) The academic setting is the source of a large amount of the anticommercial and antidrug company discussion and a few medi- cal students `are left unexposed to these criticisms; (3) University administrations are generally unsympathetic to drug promotions and most medical student's are sequestered from detail men throughout their medical school careers; (4) In many schools, gifts must be approved by the sc'ho~l admin- istration before there can be `any distribution of material; (5) Prescription-writing habits are generally developed by watch- ing housestaff physicians write orders, ,who usually are'limited by uni- versity formularies; (6) Today's medical students are more critical than ever before and questions concerning activity, efficacy and p~rice are being asked with increasing frequency. Mr. PUFFY. Mr. Martin, if I may, in point No. 4you indicate in many schools gifts must be `approved by the school administration. Mr. MARTIN. Yes, sir. ` ` ` PAGENO="0033" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5505 Mr. DUFFY. I am just curious if you know of any schools where this is not the policy. Mr. MARTIN. Well, of the 26 medical schools that we have complete information on, not one. Mr. PUFFY. Not one in 26? Mr. MARTIN. Not one `of the 26. Mr. PUFFY. How many medical schools are there- Senator NELSON. What about that 26? I did not understand your answer. Mr. MARTIN. Of the hundred medical schools, or 98 at this time; we have done an in-depth survey on 26 to find out what the extent is. Those 26 all have to have administration of approval before distribution. Senator NELSON. The rest do not? Mr. MARTIN. Well, the rest we do not know. Senator NELSON. I see. Mr. MARTIN. I would assume it is a very high percentage. I mean the first 26 we know about are a hundred percent. Mr. PUFFY. Are you going to be completing the study to the point where you will know how many of these 100 schools do require approval? Mr. MARTIN. We should know exactly by the middle of August. Mr. PUFFY. Would you be good enough to supply that for the record? 1 Mr. MARTIN. Yes, sir. Senator NELSON. On the whole question of the relationship of the profession to the industry, which is an issue we have been discussing, the relationship starts obviously with the freshman medical student in one way or another. Maybe this is not a fair question since you are not a practicing physician, but what makes me curious about the re- sulting influence of prescribing practices is the recent cas.e of the evalu- ation of fixed combination antibiotics. In this case so far as I can find out, there is no scientific literature that supports the use of the fixed combination antibiotics. I am not aware of any medical school which supports the use of fixed combinations. The United States Pharma- copeia does not list them. The Council on Drugs, as I mentioned, the former chairman of the council, Dr. Dowling, and the current Chair- man, Dr. Adriani, are all critical. All the scientific evidence, and all the literature so far as I am aware is critical. The companies that sell fixed combination antibiotics could not produce for the National Academy of Sciences-National Research Council any controlled sci- entific studies to prove their efficacy. How would you explain the fact that nevertheless they are widely prescribed? Mr. MARTIN. Well, I think your opening statement included the fact that I was not a practicing physician. I can suppose, and I think I have pointed out, one of the reasons is information to the physician. I think the supposition is made by most practicing physicians, certainly by students, that if a drug is on the market, the Food and Drug Ad- ministration had said that it is at least an acceptable preparation. And indeed the approval of these drugs by the Food and Drug Adminis- tration previously indicated this-I think the recent action to take 75 `of these drugs off the market sort of defines this problem. I mean we This and other supplementary Information, when available, will be incorjorated In a subsequent volume. 81-280 O-~~9--pt. 14-3 PAGENO="0034" 5506 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY assume that drugs on the market are acceptable in quality and potency I think the use of the PDR, as soon as it is replaced by a book which is prepared by something like the AMA Council on Drugs, which did disapprove their use, will make a significant difference in regard to the actual decision that takes place in the physician's mind when he uses these drugs. I am sure they work. I do know whether their efficacy increased. Obviously we are taught that it is better to write two prescriptions. I think for a busy physician, they write one. I, again, think you would have to ask the practicing physician, not a medical student. Senator NELSON Well, I understand that, but the point I raise is that medical schools teach rational prescribing-that drugs should be given for a specific purpose. Mr MARTIN I think that is a fair assumption Senator NELSON I think it ought to be made clear that a good many doctors in this country never have and never would use fixed combina tions, but if you look at the dollar sales, there is a tremendous number of physicians (whatever the percentage), who are using fixed combina- tions. I think that 83 of the 200 most widely prescribed drugs are com- binations The physicians say they do not prescribe based on adver tising and promotion They say "We are not fooled by that sort of thing Our prescribing practices are based upon scientific evidence" But the fascinating issue raised here is there is no scientific evidence to support this type of prescribing and no medical school teaches it What possible explanation is there other than that they are prescrib ing based upon promotional literature rather than on scientific evi dence? Mr MARTIN That is an excellent question, but I think it would have to be answered by somebody else. Senator NELSON I just raise it here I do not expect you to involve yourself in it, but I think it raises a very serious and important ques tion involving prescribing practices of many physicians On what basis do many of them prescribe? On the scientific evidence to support the use of the drug or upon promotional advertising? Since we can find no scientific evidence, I think you would just about have to conclude so far as fixed combinations are concerned it has to be the promotional advertising that is responsible, certainly not the scientific evidence Senator Dor~ Mr Chairman, I might suggest that question you indicate would be better proposed to a practicing physician rather than a student. Senator NELSON. I made the statement that I did not expect him to respond to it, however, I thought since we are on the question that involves the relationship of the drug industry starting with the fresh- man in medical school all the way through, that I would raise the question for the record at this point Naturally, I do not expect Mr Martin to have an informed opinion about it Senator DOLE. Perhaps in 10 years he would probably give us a good answer. Mr. MARTIN. I hope so. I would like to go on to discuss the relation- ship of the medical profession to the pharmaceutical industry since this is one of the most important aspects of our group's feelings about this This issue is always raised and I think it is an important one to look at more carefully than we have done before PAGENO="0035" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5507 To me it is inconceivable that practicing physicians, often with in- comes greater than $30,000, would be swayed to any great degree by an autographed golf ball or a cocktail party. The vast majority of medical students, as well, are either indifferent or critical about the overt blandishments of the pharmaceutical companies, and it is un likely that future medical professionals would be involved in unethical schemes for $500 worth of gratuities The problem in regard to the relationship of medical orgamza tions and medical journals is quite complex but there has been little substantive evidence to show that there is an unethical relationship between the editors of JAMA, the New England Journal of Medi- cine, the American Journal of Medicine, or various AMA specialty journals and pharmaceutical companies. Senator NELSON. Exactly where are you now? Mr. MARTIN. I am on top of page 14, `sir. We are talking about the ethical relationship In your letter you requested a discussion about the relationship of the mcdical profession to the pharmaceutical in dustry Implicit from previous testimony, I think, was a question of the ethical relationship between these two groups, and I was trying to address my comments to that. Senator NELSON. I understand. Mr. MARTIN. Our journal, as I pointed out, has had a student edi- torial staff since September of last year, and in our journal there is no relationship between our editors and the advertising policy, which is set by our editorial board. In other words, they are never influenced one way or the other In fact, Mr Gordon who receives The New Physician, will tell you that we publish a great number of articles with a wide diversity of views about many issues, many of which are unpalatable to the drug industry, independent of the rise and fall of our income There is no question that a pullout by pharmaceutical advertisers would hurt the journal, but I can assure your committee that we will continue to publish and I think this helps to define the relationship at least in regard to this one journal. More independ- ently, or in addition, there has been no indication that the pharma- ceutical industry has or would exert pressure of the sort with our journal We have received no pressure whatsoever in rBgard to our editorial pohcv Senator NELSON We have heard testimony to the effect that- Mr MARTIN I was just speaking of our journal I cannot speak for, of course, other journals. Senator NELSON (continuing) Companies have withdrawn adver tising from a journal because of criticism in the journal's editorial literature of their particular drug. Mr. MARTIN. This actually happened with ours, but this did not affect our editorial policy whatsoever. That is really not overt pressure to us I mean it is sort of their choice anyway, and we just change the number of pages that are put out I would submit that the true relationship of the medical profession to the pharmaceutical industry is exceptionally poor There appears to have been little meaningful communication between the pharma ceutical companies and physicians in regard's to the basic ethical ques- tions which now confront both groups For example, only now are medical students and pharmaceutical management representatives be- ginning to undergo the necessary metamorphosis to a joint professional PAGENO="0036" 5508 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY relationship with the best interests of the patient as a mutually under- stood and cooperative goal. I have tried, as objectively as possible, to summarize our knowledge and feelings in the areas about which you have requested us to testify. The Student American Medical Association is greatly concerned with the basic problems and issues which confront our profession and society in regard to health care. However, we would not be so arro- gant as to presume we had a simple explanation, analysis, or solutions for these complex problems. I know of no medical student who is well-informed enough especi- ally in the face of the enormous amount of expert testimony you have heard, to take an unyielding stand on either side of the incredibly complex issues your committee is investigating. Nonetheless, our stands on specific and definable issues are clear. SAMA stands firmly behind obtaining the highest quality drugs at the lowest consumer costs and endorses only those promotional practices that either contribute to the knowledge of the physician or students or benefit the health care recipient. SAMA also fully supports the development of a comprehensive drug compendium which includes generic as well as brand name cross references and includes the wholesale price of each drug for the pur- pose of comparison by physicians We `ilso support an increase in the screening and control facilities administered by the Food and Drug Administration to insure in creased unbiased evaluation of new drugs. The Student American Medical Association recognizes that there have been abuses in the drug industry, as well as in our own profes- sion, in regard to pharmaceutical promotion. SAMA encourages and supports the work of this committee to elucidate more fully the spe- cific instances of these abuses. We also strongly feel that these abuses are not representative of the entire pharmaceutical industry nor the medical profession and that violations should clearly be prosecuted under existing laws and regulations. However, we feel that deliberate publicity which seeks to indict the entire drug industry or medical pro- fession is irresponsible and not in the best interests of the American people. Mr. Chairman, and members of the committee, I sincerely hope that our efforts have been of some value. I assure you that any further information SAMA obtains through the coming months will be readily made available if you feel it would be helpful Senator NELSON. I want to thank you very much, Mr. Martin, for. your very thoug~htful testimony. We appreciate your taking the time to come before the committee today Senator DOLE Mr Chairman, I apologize first for the two Kansans being here and I being absent. I have three meetings going on at the same time. They are all on the same floor. I am not certain I have done justice to any. But I have read the statement, Mr. Martin, and Mr. Hewitt has made no statement. Have you made any statement? Mr. HEwIrr. No. Senator DOLE. You are the lucky one. Mr. HEWITT. Yes. Senator DOLE All right But at any rate it is an excellent state ment and I certainly appreciate your taking time to come to Wash- ington, I understand, at your own request; is that correct? PAGENO="0037" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5509 Mr. MARTIN. No, sir. Senator Nelson requested that we come to testify.1 Senator Dou~. At any rate, I think you have performed a valuable service and I appreciate your statement and the contents of it. Thank you very much. Senator NELSON. Thank you very much. Mr. MARTIN. Thank you sir. (The complete prepared statement and supplemental information submitted by Mr. Martin follow :~ STATEMENT OF THE STUDENT AMERICAN MEDICAL ASsoCIATIoN, BY EDWARD D. MARTIN, NATIONAL PRESIDENT I am Edward P. Martin, a Senior medical student at `the University of Kansas and I am appearing here today as President of the Student American Medical Association at the request of Senator Gaylord Nelson We have been asked to "discuss as concretely as possible the activities of the pharamaceutical industry iii medical schools, especially with respect to students, possible impact when they go into pradtice possible effect of pharmaceutical advertising on the quality of medical care and the relationship of the medical profession to the pharamaceu tical industry These has been some confusion about the capaci'ty in which other medical stu- dents and I would be testifying. ("Although not yet announced by the subcom- mittee, the scheduled wi'tnesses are four representatives from the Student Ameri- can Medical Associa'tion. Among the subjects expected to be discussed is their position on gifts from the drug industry to medical students and the use of fixed combination antibiotics"-PMA Newsletter, Volume II, Number 23, June 6, 1969.) There are no other medical students testifying for or a't the request of the Stu- dent American Medical Association. I would hope this would help avoid any fur- ther misinterpretation about my testimony as related to other students who have been invited or have requested to testify before this Committee I. ACTIVITIES OF THE PHARMACEUTICAL INDUSTRY IN MEDICAL SCHOOLS AND WITH MEDICAL STUDENTS A. In medical school In regards `to the activities of pharmaceutical companies in various schools we have initial data from preliminary discussions with students at a majority of American schools `that indicate that there are a large number of gratuities pro- vided to medical students. These include, a't most schools: 1. A stethoscope (provided for most freshmen studen'ts) (Eli Lilly). 2. A black bag with a few examining instruments (Eli Lilly). 3 A text Documenta Geigy (a compilation of scientific and mathematical tables (Geigy) 4. A molded rubber model of a brainstem (used in freshman neuroanatomy study) (Warner-Chilcott). 5 An illustrated anatomy text (Lederle) 6. Pocket notebooks (2) ((a) Burroughs-Wellcome (b) Eli Lilly). 7. A monthly reminder calendar (paper) (Squibb). 8. A plastic slide-rule---calcijiator (CIBA). 9. A black leather bag upon graduation (Eli Lilly). 10. A textbook `chosen from a series of specialty texts (upon request) (Roche). 11. A series of extended monographs on sleep, alcoholism, anxiety, etc. (upon request) (Roche). 12. A monograph on diabetes (Upjohn). 13 Consultant a monthly series of reviews (upon request) (Smith Kline & French) 14 Blood Groups Antigens end Antibodies a paperback text on serology and. blood-bank theory and procedures (by request) (Ortho). 15 Pediatric Bulletin a monthly series of monographs and reviews (by re quest) (Ross). 16 CIBA ~5ymposia a series of monographs based on the illustrations of Dr i\etter (by request) (CIBA) 1 See footnote, p. 5479. PAGENO="0038" 5510 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY :I_7. A large number of movies on a large variety of medical subjects such as shock, heart surgery, procedures, etc. (by request-for a limited time only) (most companies). 18. Numerous monographs and "how-to" books on examination of patients, procedures, specialty fields, etc. (by request) many companies). In addition to the above, arrangements are made at some schools for students in certain classes to take trips to visit the plants of pharmaceutical firms. It is our understanding that this entails the medical student providing for his own transportation, with the company providing for room, board, and entertainment. The medical student, intern or resident may also receive any drugs, he or his family needs without cost from detailmen. Medical students, in most cases, need to have prescriptions signed by licensed physicians for prescription drugs. Baby foods, Similac, and other baby supplies are usually available without cost when they are requested. In some schools and hospitals, drug companies also pay expenses for residents and interns to attend scientific meetings. It is the feeling among most students that the majority of gifts listed above do serve an educational or utilitarian purpose, but students also recognize there is a certain number of gratuities which have no value whatsoever. Only rarely to my knowledge, have any students communicated this feeling above a specific item to the pharmaceutical company involved. I apologize for the incomplete nature of the information above but a complete study of the number and extent of pharmaceutical company gratuities has just been undertaken by our Committee on Pharmaceuticals This study which should be quite detailed will be collected this summer through questionnaires directed at medical students, interns and residents as well as through a request for this information from major pharmaceutical companies. From our initial requests for information in this area, it is clear that the pharamaceutical companies will probably provide the requested specifics. B. With medical student organizations A second category of pharmaceutical company activities directed at medical students, interns and residents involves support given to their particular orga- nizations. There are at present, only two national organizations~-the multi- disciplinary Student Health Organizations and the Student American Medical Association which is composed primarily of medical students; and house staff. The Student Health Organizations (5110) is a loose confederation of 1000- 3000 individuals in autonomous local chapters SilO holds a national assembly each year and has the loosest of structures with the 5110 rarely havmg a national position on issues Phe~y are a multidisciplinary organization and have been associated primarily with the large Summer Health Projects of the past three summers, active resistance to the war in Vietnam, ending minority group admissions discrimination by medical and health science schools and actively discussing ethical questions which confront the health professions- especially in regards to accountability of the professions to the communities they serve. They have received over 3 million in support from the Federal govern- ment, primarily to support the large Summer Health Projects. They have recently rceived a grant of about ~5O 000 from the Carnegie Foundation to support a National Service Oenter in Chicago and there will be two Summer Health Projects this summer-one in Milwaukee, and one in Boston. To my knowledge they have neither requested nor received any support from the pharmaceutical companies except for drugs which are utilized in their community clinics Their publications are financed by grant money and individual contributions, and they have, in the past, allowed no advertising to be included. Their publications include ENCOUNTER, YES, BORBYRGMI and CONCEP- TION, and are published locally and distributed irregularly. In the past three national assemblies, the issue of the pharmaceutical industry has not been a significant issue and they have issued no policy statements in this regard. I certainly cannot speak for this association of local organizations and would not presume to do so The information above is based on my personal commu nication with leaders of the various SilO chapters and my past involvement with many members of the SilO. The pharmaceutical industry is also active with other groups of students and with national SAMA On a local level, drug companies help publish medical student newspapers, help support social functions and contribute funds and drugs to support local PAGENO="0039" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5511 community health projects. The full extent of these activities are also undocu- mented but will be available to this committee, if it wishes, as soon, as our information has been gathered. The Student American Medical Association is an autonomous national orga- nization with chapters at 87 medical schools, and, has 21,090 active medical student members and 35,000 affiliate intern and resident members. This year (past 12 months) we have had an approximate income of $455,000, with roughly $153,410 (or 33.7%) coming from pharmaceutical companies. This income can be broken down as follows: 1. Scientific and convention programs $46, 410 2. Advertising in THE NEW PHYSICIAN 102,900 3. Sustaining memberships 4, 100 Total 153,410 A further breakdown of the scientific and convention programs may be found in Appendix A with a short description of each program. THE NEW PHYSICIAN is the Journal of the Student American Medical As- sociation and since September of 1968 has been edited solely by medical students. It is distributed to 21,000 medical students and 35,000 interns and residents. The subscription rate for students is $5 for the entirety of their medical school and house staff careers. Subscriptions for other individuals are $10 and together with student subscriptions (5,000 per year for incoming freshmen) account for about 10% of the journal's income. In fact, it has been necessary for SAMA to supplement THE NEW PHYSICIAN income with general funds in excess of $20,000 each year for the past several years to meet the expenses of the Journal. The total advertising income for THE NEW PHYSICIAN for the 12 months ending in March of 1969 was $207,432 with $102,901 (or 49.6%) coming from pharmaceutical companies. The advertising policy of THE NEW PHYSICIAN has been to only advertise those drugs which have been approved by the AMA Council on Drugs and have met with the advertising standards of the Journal of the American Medical Association. The AMA has provided this help without cost in the past. Our last House of Delegates specifically instructed our Execu- tive Council to create specific standards for all advertising in THE NEW PHYSICIAN, and we will set these standards this summer after consultation with the appropriate organizations and informed groups including the AMA Council on Drugs, the A.Ph..A., the staff of the Medical Letter, the FDA, and the P.M.A. The editors this year have changed the format of the journal considerably, and income has decreased due to exclusion of advertising in the text and possibly due to the controversial topics discussed in many issues. There has been no pressure on the editorial staff of THE NEW PHYSICIAN by the pharmaceutical industry. The income from drug company sustaining memberships ($4100) is used solely to support the work of the national SAMA committees, which include Medical Education, Community Health, International Health, Legislation and Medical Trends, and Minority Group Admissions. In addition to the direct income above, one pharmaceutical company has spon- sored a large party at each national SAMA convention for several years. Our 1969 House of Delegates voted this year to approve Resolution #25 (Appendix B) Which ended all funding by our organization of other contributors for social activities at regional or national SAMA conventions. These monies, the delegates felt, should be diverted into educational programs such as the "Symposium on Medicine and Society," which was a series of speeches delivered by experts on topics pertinent to future physicians (Appendix C). The sponsor, when Informed of the delegates' decision, readily agreed to the reallocation of funds for educa- tional purposes. Another company has directly sponsored "Conversations in Medical Ethics" each year at our national conventions. This year's "Conversation" dealt with "Prolonging Life" and has been scheduled for similar presentations by 22 SAMA chapters across the country. Pharmaceutical companies have contributed drugs to most local SAMA com- munity health projects, and several companies are discussing with us further ways to aid in the areas of medical education and community health. The Nigeria/Biafra Medical Relief Program sponsored by the Standing Corn- mittee on International Health, has collected about $75,000 worth of free phar- maceuticals from pharmaceutical firms. PAGENO="0040" 5512 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY It is clear from the incomplete information above that the pharmaceutical companies are quite active both in medical schools and in medical students organizations. C $tt~dent attitudes toward the pharmaceutwal industry To present a broad but incomplete picture of the degree of pharmaceutical company activities related to medical students with limited preparation is diffi cult-to presume to present definitive testimony on student attitudes toward these activities is almost impossible I do so with trepidation based only on extensive contacts with my fellow students, and with the recognition that there is the broadest diversity of opinion among medical students on this issue-as on all issues. A small but growing and well publicized minority of medical students are re fusing certain gifts by pharmaceutical companies and returning them. Some feel that drug companies are trying to buy them, others that excessive costs for pro- motion and substantial profits by the pharmaceutical industry serve to cheat the consumer. And, finally, some feel that attacking the pharmaceutical industry is a successful way of confronting a decadent bourgeoise capitalistic society The vast majority of students however do accept gratuities not passively but by requesting certain items or by picking up the equipment or books where they are being distributed There is no question that many of the gifts are of significant educational value to medical students, and they consequently accept them readily. The black `bags, `stethoscopes and other equipment are also accepted since they represent items which otherwise `~would have to' be purchased by students with limited in- comes (made more limited by a 81/2% prime rate a failing Guaranteed Loan Pro gram and the imminent danger of decreased funds from Health Professions Education Act Loan Program), and rapidly increasing education and living expenditures'. The vast majority of students I have spoken with do not feel they are compromising their professional ethics `by accepting gifts that are educa- tional or utilitarian in nature., The issue of gratuities however has now been raised and there will be an increasing number of students who will be forced to more carefully define their own ethics in the context of the arguments being raised There probably will be a larger number of gifts returned next year. It is SAMA. s policy that it is undesirable for our profession to be receptive to promotional activity that does not contribute directly to the physician s or medi cal student s scientific or professional knowledge and thus has no forseeable bene fit to the health care recipient. We acknowledge not only the right of an indi- vidual physician or student to refuse gratuities that do not serve an educational purpose, but his responsibility to do so. We feel it is the duty of the physician to use his professional discretion and judgment in choosing the appropriate drug, not only in regards to quality but to cost. We believe that, as the issues involved are rationally discussed by, medical students across the country, a more discriminating approach toward gratuitie's will rapidly develop. There is no reason to believe that students who have ac- cepted questionable gratuities are "immoral" or "dishonest" but rather that they have only recently been confronted by these issues. These students', who by the thousands are beginning to develop a new social awareness, are not insensitive to either the ethics of their profession or the needs of their communities. I have seen more than once a black bag in the hands of a medical student headed to' work in a student community health project in the inner city. At our recent national convention, there was much ascerbic rhetoric directed by a few medical `students at the exhibiting drug company representatives and picketing and demonstrations outside of the exhibit hall. Even with these demon- strations, and the resolve of the House of Delegates to `look into "abuses by the pharmaceutical companies" in a rational and unbiased way, `there still has been nothing to demonstrate anything but concern for communication and dialogue by the pharmaceutical companies. It is also my belief that the pharmaceutical companies will come to recognize the changes occurring in medical students across the country. They, have con- tinued to increase their support to community-oriented projects and have, with- out exception, accepted the de-emphasis of funding of social functio'ns of our organization and begun to shift their supnort to educational pro~rrams To date, there has been no "retaliation" for the criticism they have received from those SAMA members who disagree with their point of view, and we expect none. PAGENO="0041" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5513 II. THE PO55rI3LE IMPACT OF PHARMACEUTICAL PROMOTIONS UPON MEDICAL STUDENTS To say that drug companies are successful in "buying the future physicians of America" is both without basis in. fact and a slur on the professional ethics of a future generation of physicians. Rarely do studehts feel any obligation to the company that provided them with a particular instrument, book or service. There can be little question however that promotion does make company names more familiar and that advertising can make brand names almost second- nature, especially when most available sources of information are based on company or brand-name distinctions. Massive advertising campaigns certainly do influence medical students but only when conducted in the absence of reliable, unbiased and current drug infor- mation (such as the Medical Newsletter or hopefully the AMA Drug Evalua tion). The widespread use of the Physician's Desk Reference as the single source of information by medical students, house staff and faculty clearly creates a problem in regards to obtaining information with the previously mentioned char- acteristics. For two consecutive years, the SAMA House of Delegates has urged the AMA and/or the Department of Health Education and Welfare to publish a suitable reference source. From the preliminary reports I have read, the AMA Drug Evaluation may indeed serve this purpose. The naive feeling that medical students are at the mercy of the pharma- ceutical industry in regards to the training in pharmacology and therapeutics overlooks several important points. These are: 1 The available basic information in these areas is increasing and each class of medical students is exposed to more complete mechanisms of action and therapeutic fundamentals; 2. The academic setting is the source of a large amount of the anticommercial and anti drug company discussion and a few medical students are left unex posed to these criticisms 3. University administrations are generally unsympathetic to drug promotions and most medical students are sequestered from detailmen throughou ttheir medical school careers 4. In many schools, gifts must be approved by the school administration before there can be any distribution of material; 5. Prescription-writing habits are generally developed by watching housestaff physicians write orders, who usually are limited by University formularies. 6. Today's medical students are more critical than ever before and questions concerning activity, efficacy and price are being asked with increasing frequency. In summary there is little que'~t]on that promotions and advertising do have an effect upon medical students-in fact ,the desired effect of company and brand name familiarization but with the increasingly critical nature of the medical student and the advent of reliable and unbiased sources of information this effect will probably be minimized. Hopefully this can be done without losing the educational value of the promotions or advertisements which are a valuable ad3unct to the educational process III. POSSIBLE EFFECTS OF PHARMACEUTICAL ADVERTISING ON THE QUALITY OF MEDICAL CARE The most important effect of abuses in advertising and promotion is the misin- formation directed at the physician and the resultant confusion about what drug to prescribe in a given situation. This type of abuse can easily be corrected by the development of an authoritative reference for physicians which while neutralizing misleadng promotion would strengthen promotional efforts for new and valuable drugs. The problem, as this committee well knows, is much broader than advertising or promotional practices of the drug industry. Abuses may also exist in research and developing, manufacturing and marketing. Poor quality drugs probably will have a much more profound effect on the quality of medical care than question- able advertising. Examining the issue more broadly, health care is provided by a team of pro- fsesionals, and abuses on the part of any member of the team should be actively expo'~ed, carefully reviewed, and corrected with dispatch. The problem which faces this committee, the medical profession, and the pharmaceutical industry is how to create mechanisms which serve to expose and limit abuses in all areas without stifling the creativity of active and competi- tive research, development, marketing, or the prerogatives of prescribing or dis- pensing. PAGENO="0042" 5514 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY The new AMA Drug Compendium, increasing controls on advertising by the industry and the medical profession, increasing the ability of the FDA to re- view new drugs scientifically, education of the medical profession to a more critical evaluation of drug usage and efficacy, and an increased role of the pro- fessionally trained pharmacist all are steps which need to be taken to increase the quality of medical care. IV. RELATIONSHIP OF THE MEDICAL PROFESSION TO THE PHARMACEUTICAL INDUSTRY The question of an unethical relationship between physicians and the pharma- ceutical industry is always raised when the issue of abuses is raised. It is incon- ceivable to me that practicing physicians', often with incomes greater than $80,000, would be swayed to any great degree by an autographed golf-ball or a cocktail party. The vast majority of medical students, as well, are either indiffer- ent or critical about the overt blandishments of the pharmaceutical companies; and it is unlikely that future medical professionals would be involved in unethical schemes for $500 worth of gratuities. The problem in regards to the relationship of medical organizations' and medical journals is quite complex but there has been little substantive evidence to show that there is an unethical relationship between the Editors of JAMA, The New 1~Jnglaad Joarnal of Medicine, the Ameriectn Journu~ of Medicine, or the various AMA specialty journals and pharmaceutical companies. Our Journal, THE NEW PHYSICIAN, has a student editorial staff whose policy for text is completely separated from that of the staff or policy of our advertising director. It is our policy to present a wide diversity of views, many unpalatable to the drug industry, independently of the rise and fall of publication income. There is no question that a pullout by pharmaceutical advertisers would hurt the Journal, but I can assure your Committee that we would continue to publish. More independently, there Is no indication that the pharmaceutical industry has or would exert pressure of this sort with our Journal. I would submit that the true relationship of the medical profession to the pharmaceutical industry is exceptionally poor. There appears to have been little meaningful communication between the pharmaceutical companies and physi- cians in regards to the basic ethical questions which now confront both groups. For example, only now are medical students and pharmaceutical management representatives beginning to discuss the joint professional and ethical responsi- bilities they share as part of the emerging health care team. The relationship of the physician and the pharmacist has long been a professional~cornmercial one and this, too, is beginning to undergo the necessary metamorphosis to a joint professional relationship with the best interests of the patient as a mutually understood and cooperative goal. V CONCLUSION I have tried as objectively as possible to summarize our knowledge and feel ings in the areas about which you have requested us to testify The Student American Medical Association is greatly concerned with the basic problems and issues which confront our profession and society in regards to heatlth care However we would not be so arrogant as to presume we had a simple explanation analysis or solutions for these complex problems I know of no medical student who is well informed enough especially in the face of the enormous amount of expert testimony you have heard to take an unyielding stand on either side of the incredibly complex issues your Committee is investigating. Nonetheless, our stands on specific and defineable issues are clear. SAMA stands firmly behind obtaining the highest quality drugs at the lowest consumer cost and endorses only those promotional practices that either con- tribute to the knowledge of the physician or students or benefit the health care recipient. SAMA also fully supports the development of a comprehensive drug com- pendium which includes generic as well as brand name cross-references and includes the wholesale price of each drug for the purpose of comparison by physicians. We also support an increase in the screening and control facilities administered by the Food and Drug Administration to insure increased unbiased evaluation of new drugs. The Student American Medican Association recognizes that there have been abuses in the drug industry, as well as in our own profession, in regards to PAGENO="0043" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5515 pharmaceutical promotion. SAMA encourages and supports the work of `this Com- mittee to elucidate more fully the specific instances of these abuses. We also strongly feel that these abuses are not representative of the en?tire pharma- ceutical industry nor the medical profession and that violations should clearly be prosecuted under existing laws and regulations. However, we feel that delib- era'te publicity which seeks `to indict the entire drug industry or medical pro- fession is irresponsible and not in the best interests of the American people. Mr. Chairman, and members of the Committee, I sincerely hope that our efforts have been of some value. I assure you that any further information SAMA obtains through the coming months will be readily made available if you fee] it would be helpful. Thank you. APPENDIX A Pharmaceuticai contributions to $~AMA-&iientific and convention programe Norwich Laboratories, Eaton medical arts $5, 000 Squibb, medical exhibits 12, 000 Mead Johnson, SAMA IJPMB 5,451 Merck, Sharpe & Dohme 1,000 Wyeth 2 000 Hoffman La Roche 7 500 Potal medicine and society 10 500 Abbott Ball (direct) emith Kline & French symposium on prolonging life (direct) oustaining members several companies 4 100 Hoffman La Roche infusion 8 666 Total 46 410 APPENDIX B RE5OLUT~ON 25-ENTERTAINMENT FUNDS Whereas In the past it has been typical for regional and national conventions to spend large sums of money for banquets and social activities which provide only temporary enjoyment of those delega'tes present; and Whereas SAMA operates and finances a number of student health projects such as ghetto clinics and Appalachian projects which benefit the underprivileged and medically indigent therefore be it Resolved That we as SAMA members believe that to continue to support such entertainment activities in the face of suffering and illness around us is to ignore our responsibility to the community and be it further Resolved That future SAMA conventions follow `the trend of this year s con vention in that funds previously spent for entertainment be used to support edu cational programs such as Medicine and Society which will aid students in fulfilling their responsibility to `the health needs of the public PAGENO="0044" 5516 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY APPENDIX C MEDICINE AND SOCIET~i THE INSTITUTh FOR THE STUDY OF HEALTh AND SOCIETY PAGENO="0045" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5517 INTRODUCTION Most health professionals are aware of the thesis that the ideal of health is more than the absence of disease. Few would argue that our efforts to reach this ideal must be augumented. The present influence of societal problems on medical crises is unprecedented. As an initial effort to identify and analyze some of the societal problems which influence the state of health, the Institute for the Study of Health and Society presents the program, "Medicine and Society." The Symposium is made possible by grants from Hoffman-LaRoche, Merck, Sharp and Dohme, and Wyeth Laboratories* Funds which have traditionally been used to sponsor the "Doctor and the Law" Luncheon were apptied to the Symposium expenses. PAGENO="0046" 5518 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY THE BACKGROUND Wednesday, April 2, 1969 INTRODUCTORY REMARKS CHRISTIAN N RAMSEY, JR Chairman, Board of Directors Institute for the Study of Health and Society I. THE PROBLEMS - 9:00 - 11:30 The Introduction HON. WILBUR J. COHEN The People Problem ROBERT HATCHER, M. D. The Commission Report . SENATOR FRED R. HARRIS, L . L . B. The Environment CHARLES C. JOHNSON, JR. II. THE COMMUNITY - 11:30 - 12:30 The City of Man ADAM YARMOLINSKY, L . L . B. The Establishment and All That PETER ROSSI, Ph. D. PAGENO="0047" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5519 THE RESOURCES Thursday, April 3, 1969 I THE NEW TECHNOLOGY - 9 00 - 9 30 The Age of Advance WALTER CRONKITE II. THE ECONOMICS OF MEDICINE - 9:30 - 10:00 The View of An Economist RALPH BERRY, Ph D Ill. THE HEALTH PEOPLE AND FACILITIES - 10:30 - 12:00 The Team MARTIN CHERKASKY, M. D. The Training DANIEL H FUNKENSTEIN, M D The Facility SHIELA CLIBBON, A R I B A IV. THE FUTURE - 12:00 - 12:30 The Summary: Concern - Committment - Action MAX LERNER, Ph. D. PAGENO="0048" 5520 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY PARTICIPANTS WILBUR J. COHEN, former Secretary of Health, Education and Welfare, was graduated from the University of Wisconsin. He served as Chairman of President Kennedy's Task Force on Health and Social Security. In 1965, Mr. Cohen was appointed by President Johnson as Under Secretary of Health, Education, and Welfare, and in March, 1968, he was appointed Secretary of HEW. Because of his wide experience in fields related to human well-being, Mr. Cohen was selected to open the Symposium. DR. ROBERT A. HATCHER of the Department of Gynecology and Obstetrics at Emory University School of Medicine m Atlanta received his M D degree at Cornell University Medical College Dr Hatcher is a Board Member of Planned Parenthood of Atlanta He was Director of the Muscogee County Family Planning Program in Columbus, Georgia. Dr. Hatcher was chosen to speak on "The People Problem" because of his knowledge and world wide experience in studying population dynamics. SENATOR FRED R. HARRIS of Oklahoma was graduated from the University of Oklahoma Law School. In 1964, he was elected to the U. S. Senate. He is a member of the Subcommittee on Executive Reorganization which has conducted studies in urban problems. He has sponsored major legislation in the Senate, including bills to advance the fields of social sciences and medicine Senator Harris was selected to discuss racial discrimination because of his work as a member of the Kerner Commission. MR. CHARLES C. JOHNSON, JR., is the Administrator of Consumer Protection and Environ- mental Health Service of the U. S. Department of Health, Education, and Welfare with the rank of Assistant Surgeon General, Public Health Service. He is Associate Professor at the N. Y. U. School of Environmental Medicine and is a diplomate of the American Academy of Environmental Engineers Mr Johnson was chosen to speak on this program because of his expertise and knowledge of the problems of our environment today. PAGENO="0049" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5521 MR. ADAM YARMOLINSKY took his A. B. degree at Harvard and was graduated from the Yale Law School. He was a chief architect of the Kennedy Administration War Against Poverty and is a member of the Institute of Politics of the John Fitzgerald Kennedy School of Government at Harvard. He is a member of the Board of Medicine of the National Academy of Sciences. He is a recipient of the Department of Defense Public Service Medal and served as Principal Deputy Assistant to the Secretary of Defense under Robert McNamara. DR. PETER H. ROSSI, Chairman of the Department of Social Relations of Johns Hopkins University, received his Ph. D. degree from Columbia University. Dr. Rossi has written several books and numerous articles concerning sociology and social problems of today. The topic, "The Establishment and All That," is being discussed by Dr. Rossi because of his know- ledge of the theory and practice of community groups and because of his interest in social structure, public opinion, and policies in the local community. MR. WALTER CRONKITE, CBS News Correspondent, is managing editor and anchor man of the CBS EVENING NEWS. Mr. Cronkite is also reporter of "The 21st Century, "a CBS News series on the world of tomorrow. He was the reporter on the award-winning "The Twentieth Century" series for nine years. Mr. Cronkite has received numerous awards for his achievements in journalism. He was chosen to participate in the Symposium on the basis of his longstanding interest and expertise in the area of the new technology. DR. RALPH E. BERRY received his Ph. D. in economics from Harvard University in 1966 with special training in economic theory, public finance, and the economics of health and welfare. Currently, he is Assistant Professor of the Harvard University Department of Economics. He currently serves as consultant to the Department of Health, Education, and Welfare and the Bureau of the Budget. Dr. Berry was chosen to participate in the Symposium because of his present research on the efficiency in the Production of Hospital Services. &1-280 O-69-pt. 14---4 PAGENO="0050" 5522 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY DR. MARTIN CHERKASKY is, at present, serving as Director of Montefiore Hospital and Chairman of the Department of Community Health at Albert Enstein College of Medicine. Dr. Cherkasky has served on numerous committees in the interest of public health and is presently on the Committee for National Health Insurance. He was chosen because of his experience and ideas in the area of organizing comprehensive health services for the future. DR. DANIEL H. FUNKENSTEIN is the Director of the Program of Research in Medical Education and Assistant Professor in the Department of Psychiatry at the Harvard Medical School. Dr. Funkenstein currently serves on the Commission of the Future of Medical Education of the National Board of Medicine as well as the Student American Medical Association's Commission on Medical Education. Dr. Funkenstein was chosen for the Symposium ~n the basis of his work and innovative ideas for the restructuring of medical education. MISS SHIELA C. CLIBBON is the Director of the Architectural Research Unit at the University City Science Center in Philadelphia and is a lecturer and research associate at the School of Fine Arts of the University of Pennsylvania. Miss Clibbon was asked to speak at the Symposium because of her creative and productive work in developing a model for the health care facility of the future. This work has resulted in new institutional concepts of patient care. DR. MAX LERNER, a famed author and journalist, did both his undergraduate and law studies at Yale University. Currently, he is Professor of American Civilization and World Politics at Brandeis University in Waltham, Massachusetts. Dr. Lerner also writes a column three times a week which appears in the New York POST and is widely syndicated. Dr. Lerner was selected to appear on the program because of his belief that a man has not lived unless he has been active in the problems of his times. PAGENO="0051" COMPETITIVE PROBLEMS IN THE DRuG INDUSTRY 5523 THE INSTITUTE FOR THE STUDY OF HEALTH AND SOCIETY We believe that the ideal of health is more than the absence of disease. The Institute for the Study of Health and Society is conceived as a response to our health crisis in the year 1969 It is born out of the conviction that we are at the crossroads one road leads to patch- work health care with the professional as a helpless cog in a behemoth machine, the other to a renaissance of humanism and hope- -to the development of health care that puts technique in the service of man's well being. The Institute is meant to identify and clarify the issues for those who have not clearly recognized our dilemma, and it is an appeal to action predicated upon the philosophy of providing a new and informed leadership for the health profession and for our country. Stated in the broadest terms, the long range objective of the Institute is to operate as a tool for analysis and responsible change in health and society Although the Institute for the Study of Health and Society may be responsible for widening circles of discussion and subsequent influence on health policy, its primary concern will not be with immediate results Rather, it shall look first to the future. We believe that the future is too important to be left to tomorrow. The hurried, pressured, distracted life of contemporary America is *caught up with the urgent at the expense of the important. There must be a place where rational, mformed students begin a dialogue which will give thoughtful, measured, and sustained attention to tomorrow The Institute will be such a place. With dialogue as its method, this is what gives the Institute such unique value to the long range goals of the health profession and of our democratic society. PAGENO="0052" 5524 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY THE STUDENT AMERICAN MEDICAL ASSOCIATION During the year 1968, the Executive Council of SAMA set up, as priorities, three basic areas of operation which include Medical Education, International Health, Community Health. In addition, THE NEW PHYSICIAN, the official journal of SAMA, was taken over by a student editorial staff for the first time in the eighteen year history of the organization. The SAMA Committee on Medical Education has been active this year in putting together the First Annual Student Conference on Medical Education. This event was held in early February in Chicago and was attended by several hundred undergraduate medical students including representatives from ninety percent of the nation's medical schools. Additionally, a SAMA Education Commission was formed during the year which consists of twelve medical students and an advisory council. The Commission is presently at work critically examining medical education and is expected to produce a report of its recommendations for change In the area of Community Health, SAMA also operates a large and active committee. Besides coordinating the activities of many student - run community health projects, the committee members have been sponsoring regional community health conferences throughout the year. SAMA officers have arranged several summer programs for medical students. The Appalachian Program will have in attendance fifty medical students and twenty nursing students These individuals will be placed throughout the Appalachian States and will study the health needs of people who live m Appalachia They will identify and analyze the health and health - related social problems and conceptualize solutions to these problems. International Health opportunities have been located for some five-hundred American medical students in the SAMA International Exchange Program. Conducted in conjunction with the International Federation of Medical Student Associations, the SAMA program will be the largest bilateral exchange of professional students ever completed. Additionally, members of the International Health Committee have been workmg on a proposal which would create a Pan - American Health Conference Scheduled for early summer in 1970, the conference would bring together medical students from twenty-seven countries to discuss international health problems. PAGENO="0053" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5525 STTJDENT AMERICAN MEDICAL ASSOCIATION BALANCE SHEET, AS OF APR 30, 1969 ASSETS Cash: Cash in bank $3, 666. 87 Petty cash 300. 00 Subtotal, cash 3,966. 87 Investments: U.S. Treasury bills 4, 686. 67 Accounts receivable 59, 329. 80 Advances and deposits: United Air Liiies 425. 00 Prepaid postage 694. 69 Prepaid insurance - - - - - 101 88 Prepaid expenses 8, 669. 48 Miscellaneous advances 2, 496. 02 Prepaid convention expense 21, 968. 11 Subtotal, advances and deposits 34, 355. 18 Total current assets. - - - 102, 338 52 Real estate: Land 10, 000. 00 Buildings 50 773 96 Less reserve for depreciation - - - 5, 217 67 Subtotal, buildings 45, 556. 29 Equipment 16, 800. 23 Less reserve for depreciation 14, 168. 37 Subtotal, equipment 2, 631. 86 Furniture and fixtures 15, 036. 35 Less reserve for depreciation 13, 067. 06 Subtotal, furniture and fixtures - - 1, 967 29 Total assets - - - - 162, 49596 LIABILITIES Accounts payable -- - - - - - 49, 293 97 Advances for convention 34, 617. 60 Taxes accrued and withheld 3, 458. 05 Accrued interest 999. 96 Accrued real estate tax 2, .211. 30 Advances for grants . 2,500. 00 Total current liabilities - 93, 080 88 Long term loan 50, 000. 00 Real estate mortgage 22,. 889.67 Capital accounts Balance as of July 1, 1968 -- - - - - (10, 582 14) Income over expense for 10 months ending Apr 30, 1969 7, 107 55 Balance as of Apr. 30, 1969 (3, 474. 59) Total liabilities 162, 495. 96 PAGENO="0054" Month Year to date INCOME Publication: Advertising $18,757. 43 $183, 188. 38 Subscriptions 59. 75 5, 216. 00 Subscriptions bulk 373. 00 1, 593. 85 Reprints 358. 75 3, 878. 20 DoctorandTheLaw 1,172.50 11,288.50 Mailing list 69. 71 332. 16 Infusion 8,666.66 Total, publication income 20, 791. 14 214, 163. 75 Other income: Membership dues 360. 25 17, 366. 30 Insurance 6,750.00 67,500.00 Grants 19,301.00 71,001.00 Miscellaneous 13.58 1,528.15 Sustaining membership 1,030.00 15,540.00 Woman's auxiliary 1, 160. 82 7, 468. 82 Exhibit space Convention International exchange 84.50 6,828.33 Total, other income 28,615.65 187, 232. 60 Total, publication and other income 49,491.29401, 396.35 EXPENSE Publication 22, 092. 61 226, 643. 96 Other expense 23,197.11 167,644.84 Total, expense - 45, 289.72394,288.80 Excess income over expense . 57 7,107.55 Publication expense: -________________________ Salaries 3,030.77 34,010.41 Payroll tax 152.82 1,595.06 Employees welfare 318.73 4,546.52 Telephone and telegraph 149.98 1,813.08 General postage 96.80 782.44 Office supplies.. 352.73 3,252.60 Contract printing 13,263.53 127,811.50 PostageThe New Physcuan 865.95 6,058.40 Editorial expense 1,028.77 5,229.22 Circulation 351.40 3,331.16 Mailing The New Physician 579.39 5,749.96 Advertising promotion 36.00 486.42 Discount on advertising 256.20 2,864.89 Advertising services 574.36 7,046.49 Reprints 201.78 2,695.99 Doctor and The Law 114.94 1,289.15 Legal and audit 40.00 409.56 Miscellaneous 54.80 837.04 Interest on loans 113.61 1,256.12 Depreciation and amortization 129.31 1,293.10 Electric and gas 55.45 361.06 Insurance 50.00 500.00 Building maintenance 150.32 1,631.26 Real estate tax 72.50 715.00 Interest on mortgage 52.57 528.74 Infusion 10,548.79 Total, publication expense 22,092.61 226,643.96 Convention-national and CPC: Salaries 244.06 2,742.44 Payroll tax 12.24 127.61 Employees welfare 25. 50 363. 70 Telephone and telegraph 5.65 General postage 119.04 149.58 Office supplies Exhibit space 76.51 Other convention expense 73~ 50 Chapter presidents, conference 13, 160.14 Total convention-National and CPC 400. 84 17,363.13 5526 COMPETITIVE PROBLEMS TN THE PRUG IN~DUSTRY STUDENT AMERICAN MEDICAL ASSOCIATION, STATEMENT OF INCOME AND EXPENSE, MONTH ENDING APR. 30, 1969 PAGENO="0055" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY STUDENT AMERICAN MEDICAL ASSOCIATION STATEMENT OF INCOME AND EXPENSE MONTH ENDING APR. 30, 1969-Continued 5527 EXPENSE-Continued Month Year to date Medical education expense: Salaries $61. 01 $685. 61 Payroll taxes 3.05 31.90 Employees welfare 6. 37 90, 94 Telephone and telegraph 14. 03 184. 10 General postage (55. 47) 299. 51 Office supplies 35. 27 315. 70 Programs and projects 2, 299. 67 7, 358,97 Total, medical education expense - 2,413. 93 8, 966.73 Community and international health: - Salaries Payroll taxes Employees welfare Telephone and tolegraph General postage Office supplies Community health International health Total, community and international health expense Scientific activities: Salaries Payroll taxes Employees welfare Telephone and telegraph General postage Office supplies Grants and awards Scientific activities general Total scientific adtivities expense 8, 470. 88 16, 730. 41 Total, national committees expense 195. 29 3, 977. 17 Regional activities: Regional vice presidents expense (219. 07) 4, 321.46 Executive council expense: Telephone and telegraph General postage Office supplies Officers expense Total, executive council expense Liaison activities: Teiephoneandtelegraph 28.09 General postage (10.96) Office supplies 35. 27 Officers expense Total, liaison expense WA-SAMA: Salaries Payroll taxes Employees welfare Telephone and telegraph General postage Office supplies Projects, activities and travel Total, WA-SAMA expense 183.05 2,056.80 (4.64) 215.34 19.13 272.79 14.03 170.81 (3. 66) 220. 27 49.38 442.01 5,916. 51 34, 748. 79 1, 072. 78 4, 387. 76 7, 246. 58 42, 514. 57 122.23 1,371.23 6.10 63.80 12.74 181.85 14,03 186.70 3.66 330.63 42.35 375.85 7,685.51 12,685.51 597.78 1, 534. 85 National committees: - Salaries Payroll taxes Employees welfare Telephone and telegraph General postage Office supplies General expense 61.01 685.61 3.05 31.89 6.37 90.94 14.03 172.26 (5.49) 512.49 35. 27 315. 70 81.05 2,168.28 14.03 361.98 24. 86 349. 87 49. 38 442. 02 68. 40 15, 902. 69 156.67 17,056.56 429. 97 630.71 303. 64 2,240. 72 52. 40 3,605. 04' 366.09 4,153.10 18.34 191.41 38. 26 545. 59 14.03 182.25 11.61 190.52 35.27 515.97 469.35 6,419.65 952.95 12,198.49 PAGENO="0056" 5528 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY STUDENT AMERICAN MEDICAL ASSOCIATION, STATEMENT OF INCOME AND EXPENSE, MONTH ENDING APR, 30, 1969-Continued Month Year to date EXPENSE-Continued Membership and service programs: Salaries $183.05 Payroll tax 9. 18 Employees welfare 19. 11 Telep~oneandteIegraph 14.03 General postage (5.49) Office supplies 35. 27 Membership promotion 136. 00 Dues and subscriptions Insurance promotion Sustaining membership Total membership and service programs expense 391. 15 7,745. 80 National headquarters personnel: Salaries 1,830. 46 20,778. 78 Payroll tax 270.18 1,124.54 Employees welfare 191. 24 2,727. 95 Total, national headquarters personnel expense 2, 291. 88 24,631. 27 $2, 056. 82 95.70 272.77 217.55 391.37 315.70 3,318.63 259.50 249.75 568.01 National headquarters office expense: Telephone and telegraph General postage Office supplies Legalandaudit Miscellaneous Intereston loans Total, national headquarters office expense National headquarters physical plant expense: Depreciation and amortization Electric and gas Insurance Building maintenance Real estate tax Interest on mortgage - 14.03 170.80 (5.49) 198.36 35. 27 336. 87 40. 00 409. 57 54. 79 837. 02 113.61 1,256.10 252.61 3,208.72 129.31 1,293.10 55.45 361.05 50. 00 500. 00 150.32 1,631.25 72.50 715.00 52.57 532.53 Total, National headquarters physical plant expense 510. 15 5, 032. 93 Public relations expense 51. 15 292. 56 PAGENO="0057" C) -4 *0 ~ -~. ~*~; ~ I B C) 0 0) c~0 -~C)~-4~000000U' ~4~-' ~ C,, -l 0 -4 C) 0 C, C,) C,, 0 C) -I 0 ~4 N~a)oC~3 ~-J~ ~)000 0(0 ~ -4oor%~ ~J ~(~~c) r~-4a) +++~- I++i± +~ Lt+ ± + 0~~I~0) -~ + 00000 C~C~ N~0000 - CO 00000 + + +~ + w -w 0 ~Io + PAGENO="0058" 5530 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Senator NELSON Our next witness is Mr Ch'trles Payton, a medical school student at the University of California San Francisco Medical School. Mr. Payton. Is Mr. Payton here? I wonder if Mr. Henry Brodkin of Case Western Reserve lJniversity Medic'tl School, and Rich'trd Pohi of the Harvard Medical School would like to sit together in case ~ e have some questions, each of you might want to respond to them. Mr POHL Senator Nelson, pardon me I have brought two class mates with me from Harvard Medical School and we have a presenta tion and statement worked up, too I will sit here but my classmates are also- Senator NELSON. Well, fine, then. We will proceed as is. If any of you wish to respond to particular questions we ask, we will be glad to have you. Go ahead, Mr. Payton. Your statement will be printed in full in the record. You may present it as you desire. And if you wish to extem- porize from any part of it, feel free to do so And I assume you do not have any objection if we should interrupt with a question now and then. STATEMENT OF CHARLES PAYTON, MEDICAL STUDENT, UNIVER SITY OP CALIFORNIA SAN FRANCISCO MEDICAL SCHOOL Mr PAYTON No, sir That is perfectly fine with me Thank you very much Senator Nelson, members of the subcommittee, ladies and gentlemen, I am Charles Payton, a medical student ~tt the University of California San Francisco Medical School I would like `to describe `today how the relationship between the American medical profession and the American pharmaceutical in dustry has influence upon the education of American medical students. Senator DOLE Could I interrupt there to `isk, do you belong to any association or the SHO or any group, or `are you speaking as an indi- vidual? Mr. PAYTON. No, sir. I am speaking for myself as a medical student. I count myself as a member of the profession by way of the fact that I am a medical student. Senator DOLE But you belong to neither the SAMA or SHO ~ Mr. PAYTON. I think it would be safe to say that I a:m an active member of both organizations. Senator DOLE. You are an active member? Mr. PAYTON. Yes, sir. The factual data presented here were collected by me at the Uni- versity of `California San Francisco Medical School and the conclu- sions presented are my own assessmen'ts of the existing situation. During the period of formal education of health professionals- Mr. DUFF'Y. Mr. Payton, if I may, you say they are your own evaluations? Mr PAYTON Yes,sir Mr. Duio'y. Are you able to tell us whether this represents a sig- nificant body of your peers evaluations as well? Do you feel your feelings are reflective of many of your fellow students? PAGENO="0059" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5531 Mr. PAYTON. Later in my testimony I have presented a letter that was written by some of the members of my sophomore medical class to the Lilly Co at the time we returned certain of the instruments which they had presented to us I think that the numbers related at that point, being 25 individuals from my class who signed that letter, gives you some idea of the proportion of students who support the type of state ment which I am presenting today. This, I might add, is25 out of a class of 128 Mr. Du~ry. But you are not speaking for them? Mr. PAYTON. I do not presume to. However, my testimony has been seen by some of these students and read, and they have said that it would be their interest that I am representing also However, I do not intend to offer any names or any numbers. During the period of formal education of health professionals, stu dents `ire exposed to and subjected to direct and indirect influence by pharmaceutical companies I have identified five categories of industry programs that I believe directly affect the education of students in the health professions The "visibility" of a promotional effort may not be a valid measure of the return a company achieves from a particular form of advertising. I will therefore be considering some forms of industry involvement in education which would not be covered by the conventional definition of "advertising," believing, however, that the manner in which these practices are conducted represents a promo tional effort by pharmaceutical companies. In the order of their visibility, the categories I will refer to are: 1 Gifts 2 Awards 3. Financial aids. 4. Educational materials. 5. Teaching faculty. GIFTS Students, house staff, and physicians can in good conscience claim that gifts in no way obligate them to a drug company Gifts do have the result, however, of creating an impression in the minds of some physicians favorable toward a certain manufacturer The giving of gifts is a promotional practice In a recent talk at the University of Virginia, Dr Upjohn, of the Upjohn Co, explained this approach on the basis that companies "want doctors to be interested in prescrib ing their brands"-exhibit A.1 An analysis of the attitude with which these gifts are received must also be discussed. The gratuities received by students at the University of California San Francisco, which is an all health science campus, represents a significant investment on the part of the pharmaceutical industry If the industry were to have found the giving of gifts to be ineffectual in influencing the process of drug prescription and acquisi tion, this practice would have been discontinued long ago Gifts offered to medical students at UCMC during their 4 years in dude a stethoscope, percussion hammer and black leather bag A full list of the items available is appended to this statement-exhibit B- and shows a retail value of more than $67 per student. 1 See exhibits, p~. 5542-5546. PAGENO="0060" 5532 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY And I might add here to provide further information to the tes- timony which Mr. Martin gave, that at our medical school, these gratuities, gifts, whatever you will, are distributed through the book- store. I was informed by the bookstore manager that some years ago under a different chancellor the pharmaceutical industry approached our school through the chancellor asking if they could provide cer- tain gifts to medical students. At that time it was the decision of the chancellor that these had to be distributed through the bookstore to the students, that this was the only basis on which the industry was allowed to provide them. This has continued to today. All of these items are purchased by the individual drug company and delivered to our university bookstore which serves only to distribute the gifts to the studen'ts. I make that point because the bookstore does not serve as a financial intermediary. In other words, there is no benefit to them. The manager only feels that he is providing a service to the students which is the purpose of the bookstore. Senator DOLE. With reference to the distribution, in other words, you are not required to accept anything that may come to the book- store, right? Mr. PAYTON. This is correct. Senator DOLE. So those who returned the gifts did accept the gifts in the first place? Mr. PAYTON. Yes, I think that would be fair to say. Senator DOI~E. So they had already compromised their principles when they accepted the gifts. Mr. PAYTON. No, I do not think that is fair to say, however. `The question had to be raised, ~ h'~t is going to happen when these gifts are left in the bookstore? Senator DOLE. Well, I mean- Mr. PAYTON. They may be returned without the company knowing why they were returned. This is the reason why we picked up the gifts, put them together, composed a letter which we felt represented our opinions on the issue and returned the;m. Senator DOLE. How long did you retain the gifts? Mr. PAYTON. We received the gifts approximately NoVember 1. Senator DOLE. You are ta1kin~ tho'ut these 25 students? Mr PAYTON No, the entire cliss i eceived them at this time Senator DOLE. Everybody took them? Do you know? Mr. PAYTON. Yes, sir; as far as I know. Senator Dor~E. You are not positive? Mr. PAYTON. No, sir. I have no information about that. The man- ager did not tell me if any instruments had not be'en picked up. What we did at that point was bring the issue to the class. We began class discussions. I believe that I was actually the first person to sug- gest to the class that po~sibly the indications in the situation ~ ere that we should return the gifts. Senator DOLE That was when in ielition to the time you received the gifts? Mr PAYTON That ~ as probibly 3 ~ eeks later During th~t time, we had been trying to gather some information and put together a written statement so that v~ e cou1d develop the rationile for returning these gifts more completely During the next 3 to 4 weeks, we pub hshed the letter to `the Lilly Co., put it on the bulletin board for the PAGENO="0061" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5533 students in the classes to read, and then gave them the opportunity of signing it. We waited until after the Christmas vacation to be sure that we had plenty of time, that everyone would be aware of what we were doing, collected the instruments that were to be returned and packaged them, sent them off during January. I think that the appendix here indicates that the Lilly Co. received them sometime toward the end of February. Senator DOLE. I thought you said there were 25 who returned- Mr. PAYTON. There were 25 who signed the letter. Senator DOLE. Some kept the gifts and signed the letter, right? Mr. PAYTON. There was a difference in the numbers here. There were complete sets of instruments returned from about eight students; 25 signed the letter. Now, in talking with some of the students who signed but did not re- turn gifts, the opinion expressed was that they were in agreement with our stand, but that they were already into their clinical medicine, that they at that time did not have the money to purchase immediately the kinds of instruments that they had to use. If I can offer my opinion on this, had we brought the subject to their attention earlier, more of these students would probably have re- turned them, had they been given the opportunity to allocate approxi- mately `another hundred dollars which would have been needed at that point. A hundred dollars is a significant sum to a medical student. Senator DOLE. I do not have `any quarrel with your returning the gifts. I think there is some serious question involved here. I `am cer- tainly in agreement with some of the statements that you made, but I think it would appear that this small group, which doe's not reflect the majority of your class, are trying to have it both ways; they want to sign the letter exonerating them from any involvement, but they want to keep the gifts. Mr. PAYTON. Well, I think that is conjecture. `The indication which I presented `as their attitude was that they were compelled by certain pragmatic concerns, tha't being financial, at tha't point. I do not in- tend at this point to impugn any `of their moralistic opinions. Senator DOLE. But you intend to impugn the moralistic judgments of the company, not `the students. Mr. PAYTON. No; I would say `that-I think I have made the point later-whatever forms of promotion the industry chooses to use are those which the profession allows it to use. Senator DOLE. Right. `Mr. PAYTON. In other words, if we did not receive these in the fash- ion whi'ch they foun'd beneficial for `their interests they would no longer continue to utilize those forms of promotion. Senator Dor~e. It would appear that perhaps there are only about eight of you in a class of 12.5 who really stand on the principle; the other 117 stand somewhere in the middle between principle and prag- matism. Mr. PAYTON. That may well be. I do not feel confident to make that determination. The list provided by the `bookstore shows those i'tems which have been given annually for the last several years. T'he addition of two more item's in the last several months~ a pocket calculator `and a `hard bound book on the EKG interpretation, indicates continued utiliza- tion of this approach. PAGENO="0062" 5534 COMPETITIVE PROBLEMS IN TIlE DRUG INDUSTRY In the fall of 1968, sever~tl members of the sophomore medical class determined that acceptance of these gifts was inconsistent with the precept of independent, rational judgment in medical practice. We expressed our feelings by returning these gifts, and 25 students signed the letter which accompanied the instruments when they were returned to the Eli Lilly Co. The full text of the correspondence with Eli Lilly ~ Co. is attached as exhibits C and D, Senator DOLE. I just want to emphasize again that 25 students signed the letter and eight returned the gifts, is that right? Mr. PAYTON. That is correct. Senator NELSON. May I ask a question? Mr. PAYTON. Yes. Senator NELSON. If I understand what you have been saying, this practice has been going on and approved by the university for many, many years- Mr. PAYTON. Well, I am not sure of what the term "approval" con- notes, but I will operate under that definition. Senator NELSON. Tolerate, perhaps-would that~ be acceptable? Mr. PAYTON. FIne. Senator NELSON. At any rate, it went on under their auspices. And at a certain stage some of you started to question the soundness of the policy, is that not correct? Mr. PAYTON. Yes, sir. Senator NELSON. And then after discussing it., 25 students agreed to question the soundness of the policy and they did sign a letter ques- tioning it, is that not correct? Mr. PAYTON. That is correct. Senator NELSON. I just want to make the point, which I think is perfectly valid, that students may be, or anybody may be, participating in a practice over a period of time and someone says, "Well, now, this raises a serious question." In this case the students upon reflection agreed it did and about 25 of them signed the letter, isn't that about what happened ? Mr. PAYTON. Yes, I would say so. I would guess that rather than saying one or two people initiated the discussions, that it would have been more on the order of eight or 10, it was more or less spontaneous within a group of individuals. Mr. Dui~i'r. Mr. Payton, if I may inquire about the student body's plans for next year, you said that these gifts were distributed `on or about November 1? Mr. PAYTON. That is approximately correct. Mr. DUFFY. Well, of course, November 1 is a little bit off at this point. What is the program that the student body is pursuing at this point? Do they intend to accept the gifts `this year and then return them also? Mr. PAYTON. I think again, this is a case where it would be pre- sumptuous of me, because I am not a member of the class that will be directly involved with the largest portion of this, since I have stated it is the sophomore class. However, I might say that I am aware that there are members of the incoming sophomore class who share the opinion of those who returned the gifts and who are going to bring the discussion directly to their class. Now, I might add, also, that for a campuswide consideration of our relationship with the pharmaceutical industry, we are attempting PAGENO="0063" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5535 to put together a series of six or eight programs, whether they be workshops or symposia, we are not sure, which will involve the stu- dents with individuals concerned with the present situation. In other words, this may be medical professionals, pharmacists, probably some representatives who have contact with the industry. We are going to define specific topics and attempt at least to create an awareness and some sort of an educated decision about our rela- tionship. I, again, refer to a point, later in my statement concerning the interest of those people, I think, here today and many more across the country who have considered that problem, that it is incumbent upon them to discuss this with their fellow colleagues and at least have the issue broached. Mr. Duypy. One other question, Mr. Payton, if I may. When did you become aware in 1968 that you would be a potential recipient for these instruments and bags? Mr. PAYTON. I really cannot answer that. I think that it has prob- ably developed sometime during the week which the instruments were being handed out at the bookstore. Mr. DUFFY. Did you not say that this was a continuing, a long- term continuing practice at your school? Mr. PATTON. Right. I had some idea of what types of things were being passed out. I did not know exactly when they were given and to what degree. Mr. DUFFY. Perhaps you may have even been aware of this your freshman year. Mr. PATTON. I was aware that things were being provided because I was given a stethoscope. My contact during my freshman year was minimal. I really did not consider the situation then. I think that that provides ample commentary upon the level of awareness of the medical students today. Senator DOLE. Did you return your gifts? Mr. PATTON. Yes, sir; I did. Senator DOLE. But you did not sign the letter? Mr. PATTON. I did not because of some of the contacts I had had with the pharmaceutical industry. I was concerned that they would misconstrue this expression of my opinion as a response only to some contacts I had had earlier with various companies. Senator DOLE. The point I make is that some who did not sign returned the gifts, and some who signed the letter did not return the gifts. Mr. PATTON. To my knowledge, I was the only individual who re- turned the gifts and did not sign the letter. Senator DOLE. And you did not sign the letter for what reason? Mr. PATTON. Because I had had contacts in attempting to gather information about company interests- Senator DOLE. Could you give more specifics on those contacts? Mr. PATTON. Yes, sir. Senator DOLE. With whom and what dates? Mr. PATTON. I had contacted the local representatives of approxi- mately 25 pharmaceutical companies. Senator DOLE. By letter? Mr. PATTON. Yes; by letter-actually, the letters were sent to their national offices. PAGENO="0064" 5536 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Senator DOLE. Do you have copies of the letters available for the file? Mr. PAYTON. No; I do not. have a copy. of the letter I wrote avail- able. I could make that available. I have a copy- Senator DOLE. Would you make that available? Mr. PAYTON (continuing). Of their responses. Certainly. (The subsequent information was received and follows:) JULY 4, 1969. Mr. BENJAMIN GoimoN, Staff Economist, U.S. Se~aate Small Business Committee, Washington, D.C. DEAR Ma. GORDON: * * * * * * * At the time I was testifying before the subcommittee I did not realize that the deadline for submission of the information I said I could make available would be so short. When trying to arrange for your receipt of this information I ex- plained that whatever was available was in my files in San Francisco and that I would not be returning to that city until sometime in September As I inferred earlier we had left San Francisco June 12 and had arrived in Minneapolis at the time of the June 19th hearing. After returning to Minneapolis following the ses- sion with the subcommittee we resumed our trip to the East coast and I was unable to obtain the letters referred to in the testimony. I am including a page explaining what went into the letters which I sent to several companies.. * * * * * * * You are free to use any information in this letter you wish. Sincerely, CHARLES E. PAYTON. Jui~ 4, 1969. To: Gaylord Nelson, Chairman, Monopoly Subcommittee of U.S. Senate Select Committee on Small Business. From: Charles E. Payton University of California San Francisco School of Medicine Re lThcplanation of Letters referred to in June 19 1969 testimony During the fall of 1968 I had a question in my mind, whether the gifts I had already received from pharmaceutical companies were the gestures of companies wishing to facilitate my education in a philanthropic fashion, or represented an advertising venture designed to influence my prescribing habits As I have stated in my testimony there were only a few of my colleagues discussing this question at the time. I did not feel that my answer could be born solely from intuition, rather I had to seek data such as presented in my statement of June 19, 1969 In seeking a resolution to this dilemma I decided to carry the question of providing instruments not already provided by the Lilly Company to other pharmaceutical firms I hoped this would serve two purposes 1. I wanted to ascertain what the rationale was on the part of pharma- ceutical companies for allocating time and money to such a program. 2. If the collection of further information indicated that the receipt of mate- rials provided by pharmaceutical companies did not conflict with the student or physician s commitment to (a) scientific objectivity and (b) the total welfare of his patients any increased financial assistance students as a result of my efforts would have been of great value to my fellow students and myself I received responses to the letters in point from slightly over half of the companies addressed It was my impression from the communication with these companies that their priority ranking for such expenditures started with practicing physicians and descended in the order of residents interns and medical students This happens to coincide with the proximity of medical per sons to the utilization of pharmaceutical therapeutics. It would appear that funds for such programs must come under promotional categories MDMORANDUM PAGENO="0065" COMPETITIV]~ PROBLEMS IN TI~E DRUG INDTYSTRY 5537 My direct communication with these comp~i11ies was one of several coiitribut- ing~ factors which led to the realization* that these gifts~ were of a promotional nature. This presented the conflict with my professional commitments which indicated that those gifts already accepted must necessarily be returned. A classmate and I drafted the letter to the Lilly Company Included elsewhere in my statement which was sent with the instruments that we~re returned. I did not sign that letter because I did not want the indusry to feel that it was in any way a result of the poor response to my communication with the several com- panies to whom had become known. Certainly the slightly better than fifty per cent reply rate to my letter attests to the fact that the companies did respond "poorly." This was not, and is not, however, a factor determining my opinion as presented in my statement before the Monopoly Subcommittee. The arguments for reaching the conclusions I have are se1f~contained in that document. Mr. PAYTON. I can tell you what, in essence, I did. I did not know what the companies' interest in providing these sifts was. I asked them with a certain double purpose, I have to admit, if they were interested in more completely supplying the black bags. I wanted to find out what their priorities were. Their responses were that-and I think it was made very clear in several of the letters-their priorities began with the practicing physicians, with residents, then with interns, medical students being last. They also claimed that they were interested in educational con- cerns. We followed this up by contacting 10 companies at the time that we were presenting a symposium on community health to find out if 10 companies which had either by word of mouth or in a letter told us that they were interested in supporting educational symposia, if they would actually follow through on this. Three of the 10 responded. Senator DOLE. When were these letters written, what date, ap- proximately Mr. PAYTON. In January. Senator DOLE. January? Mr. PAYTON. 1969. The symposium I am speaking about is a sym- posium on community health, which was February 21-22, at the Uni- versity of California. I do not refer to these things in my statement because similar cases have been already documented in areas I will refer `to later. Senator DOLE. Is anyone present today who signed the letter? Mr. PAYTON. No, sir. Senator DOLE. Who did they choose- Mr. PAYTON. I composed portions of this letter, however, and re- turned the gifts I had picked up at the bookstore. Senator DOLE. Oh, you were invited `to come to the committee? Mr. PAYTON. Yes, sir. Senator DOLE. Even thoug~h you had not signed the letter ~ Mr. PAYTON. Yes, sir. Senator DOLE. That makes sense. Proceed. Mr. PAYTON. Drug samples for personal use must be included in the classification of gifts. The hospital pharmacy file contains the business cards of the representatives of 90 drug manufacturers. A recent check of this file, which is open to faculty, staff, and students at the medical center, revealed the following: Five medical students, 19 house staff members, one dentist, one pharmacy resident, and three medical center employees requested drug samples for personnel use. Two of the medical students stated that the 81-280-139-pt. 14-5 PAGENO="0066" 5538 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY samples were for their mothers. Two individuals requested a particu- lar company's attractive calendars and one individual requested a copy of the Physicians' Desk Reference. The total-32 requests waiting to be filled by various detail men. Five companies place sample request pads and self-addressed post cards in the files. Hoechst, Merrell, Robins, Smith Kline & French, and Upjohn. The Hospital Pharmacy Committee has recently taken steps to con- trol the distribution of samples throughout the medical center. Use of the hospital pharmacy as a clearinghouse for any samples and a by invitation only policy toward the presence of detail men are two specific measures presently under consideration. Each senior in the School of Pharmacy Class of 1969 received gifts from eight pharmaceutical houses. These range from samples to a hard-bound book, "Great Moments in Pharmacy." A complete list of these gifts is found in exhibit E. This year the pharmacy seniors were guests of Barnes Hind Co. at a class luncheon, and Cutter Labs at a class dinner. Host drug com- panies offer to and do pay the costs of food and lodging when a phar- macy student visits a city in which a company plant is located, pro- vided the student visits their plant. A representative of the TJpjohn Co. has informed the Dean's Office of the School of Medicine that this company would make funds avail- able to cover travel expenses for medical students. No funds have been requested by the school, and neither the amount available nor any restrictions on its use have ever been disclosed. I personally was informed in a telephone conversation with the local representative of the Burroughs Weilcome Co. that his company would be willing to provide funds for a class party, should we so desire. And I might add again that these have never been sought. Senator DOLE. You do not have class parties ~ Mr. PAYTON. Yes, sir; we do, but we finance them ourselves. Senator DOLE. That's good. You have to have a little fun. AWARDS Mr. PAYTON (reading). Awards bearing company iiames are fre- quently given by pharmaceutical manufacturers for excellence in a particular area of student achievement. In other instances, a company will ask the school to determine the criteria for selecting an award recipient. Although the qualities which these awards claim to honor are commendable, the fact that ~ student is a "Roehe Award" winner rather than the "Scholastic Achievement Award" winner makes a spurious association between the company and the student. Now, the reason I used the terminology "Scholastic Achievement Award" is that this definition is given for the student receiving at least one `of the awards which I am referring to today. In past years, support of this type of award has enabled companies to get their names before the campus community in individual school catalogs. In the future, I believe, this process will be changed. An emotional response to a company name has no place in rational thera- peuti CS. PAGENO="0067" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5539 Medical students have been recipients of awards ranging from cash gifts to gold watches. Several similar awards have been pre- sented students in the School of Pharmacy. A more complete listing is attached as exhibit F. FINANCIAL AID The contributions the pharmaceutical industry makes to student financial aid affects the Schools of Medicine and Pharmacy but not Dentistry and Nursing, and are made both from corporations and foundations. The scholarship committees for the Schools of Medicine and Pharmacy select the recipients for aid funds using their own criteria. As in the case of awards, these funds are provided to stu- dents under the name of the supporting organization. Six organiza- tions have provided approximately $9,000 in student support at Uni- versity of California Medical Center in less than 1 year. Industry and foundation support for education has become an accepted and essential fact in the present educational system. Yet it must surely be a rare occurrence that we have allowed this support to be manifest in a manner which may exclusively benefit an individual company or industry. EDUCATIONAL MATERIALS Educational materials provided by the pharmaceutical industry include audiovisual aids, pamphlets, monographs, and atlases. These published materials, records, and models are distributed at times through teaching departments in the medical school, but are not inte- grated into the general course work. By that, I mean when instructors cite references, or refer us to a portion of some text, they do not receive these referrals or cited references. Films have been shown during noon hours in vacant classrooms~ These are `arranged and publicized by the detail men or representatives of the responsible company. Exhibit & gives a listing of the materials' which I have found to be available. For the most part, the content of the materials whi'ch are being' considered, represents a duplication of that which is available to me in my texts and courses~. Use of privately produced material demands continual evaluation of the objectivity of the information and presen- tation, which I `do not feel is necessary to the same degree when I am using educational material produced or recommended for purchase by the university. Industry participation in the educational process seems to be gain- ing devotion by company sponsors. Or, perhaps greater efforts are being made to disseminate materials which have always been available. From personal communication with drug company representatives, I have learned that more programs are contemplated in the future than have been evident in the past. Companies are turning their atten- tion toward establishing departments specifically responsible for the production of educational and instructional tools. This effort has been extended to the production of video tapes for distribution to medical schools for use in the teaching of certain disciplines. Each `of the items listed in exhibit & are provided free of charge and carry the name of the company which produced and furnisht~d them. PAGENO="0068" 5540 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Senator DOLE. Now, you mention companies turning their attention. Do you have any speciftcs there, every company or half the companies, or- Mr. PATTON. No, sir. My communication, personal communication, which I refer to here, was by word of mouth, and these statements were made by company representatives- Senator DOLE. Which company? Mr. PAYTON (continuing). Voluntarily. Senator DOLE. Which companies? Mr. PATTON. I cannot cite individual companies at this point be- cause these communications were approximately 6 months ago, at which time I was not aware that I would ever be utilizing this inf or- mation and presenting it to anyone. Mr. GORDON. Mr. Payton, on exhibit G, you have a list of teaching aids furnished by industry; for example, Abbott Laboratories, Warner Chilcott, Smith Kline and French, all of these. These are educational materials, aren't they? Mr. PATTON. Yes, sir. I am sorry. I thought he was referring to specific companies that were either initiating or making increased use of special departments for educational purposes. Senator DOLE. You are talking about future plans here, and I was trying to point out what plans may be in the mill. You are here as a witness with that knowledge, and I thought we ought to have it for the record. Mr. PATTON. I do not really think I possess the knowledge of what individual companies are either proposing or at the moment imple- menting on their own basis. Senator Don~. So you are not- Mr. PAYTON. I am simply here to relate to you certain pieces of information that have come to my attention. And in this instance it was statements by local representatives that their companies were approaching the situation with a greater interest in educational and instructional tools. Senator DOLE. Now, these 25 companies, or approximately that many, that you have written communications with, did you receive answers from each of these companies? Mr. PATTON. No, I did not. Senator DOLE. Did you receive any answers at all? Mr. PATTON. Yes, I did. Out of 25, it was on the order of about 15, 14, or 15. Senator DOLE. And you will make this information available to the committee? Mr. PATTON. Yes, sir; I can. TEACHING FACULTY The relationship of drug companies to teaching faculty is poten- tially the most dangerous involvement of an industry in the educational system. Individual instructors on the university campus may, and do, receive substantial portions of needed research funds from the pharma- ceutical industry. Given this situation, where the same researchers are teaching faculty, dependent upon the industry for renewal of grants from year-to-year, there is an unwarranted danger of passing on bias of a subjective nature. PAGENO="0069" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5541 Ideally, no situation should be allowed to exist in which scientific principle and financial gain can be confused. SUMMATION In the course of my statements, I have presented information which demonstrates that medical students, the future drug prescribers, are the prime target for company expenditures. Pharmacy students, who will soon become an integral part of the drug distribution system, are also courted by the drug companies. The dental profession receives only token recognition, while the nursing profession is completely ignored. If these programs were based upon a concern for improving the health of the American peo- ple, a more equitable distribution of financial support would certainly be expected. I believe that any program which continues to spend money in the manner described in this text is improper. Whether the relationship created involves an entire industry or a single company, if it is con- tradictory to the goal of educated, rational delivery of health care, it must be avoided. I see no reason why American drug users should finance luxuries for health science students; this, in effect, represents payment "before the fact" for our drug prescription habits, an idea unacceptable to me~ Recent criticism of this committee and some of my fellow profesS sionals who have testified before it claims that the dirty wash of the industry and the profession has been hung in view of the entire coun- try. That this should be detrimental is based on the reasoning that the public is losing faith in the profession and the industry. Should. this break in faith occur, the natural recourse, it is alleged, will be through the legislative bodies of this country. Once legislation has been enacted, certainly the possibility exists that individuals will no longer be able to seek their own solutions to this. problem. I take a different view. I believe the American public finds more necessity for reliance on its legislative system when full awareness of the problem has not been reached. Confidence in the competence of the health system will be increased when we demonstrate to them that many of us, in the health sciences and in industry, recognize the failings of the present system and show that we are searching for ways to rectify the situation. As I have pointed out, industry promotional practices will continue only so long as the desired result is achieved and the medical profession continues to accept and be swayed by these practices. It is, therefore, incumbent upon me and my fellow professionals concerned with this problem to bring it to the attention of the health care community. It is only through such a mechanism that we can formulate a uniform code of medical ethics and assume a responsible role in our relationship to the pharmaceutical industry. CONCLUSION In the beginning of my statement, I used the word "influence" when I spoke of the relationship which the pharmaceutical industry's in- volvement in education creates. The word "influence" was chosen spe- cifically because it carries no evaluation of a positive or negative PAGENO="0070" 5542 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY process. One method for making an assessment of this influence is to attempt to determine its effect on the efficiency, competence, and sen- sitivity of the medical profession. Is there listed anywhere in the methods and forms of influence described in the five categories an industry expenditure which will make me a better doctor, which will during my professional life benefit those whom I may treat? I believe not. I believe these forms of influence have a goal contradictory to the rational application of pharmactutical therapy and quality patient care. In a conversation with a representative of a pharmaceutical com- pany concerning my attitudes about promotional practices, the detail man said: "What is it that you do want that I can do for you?" I responded to that question by saying that I want the pharma- ceutical industry to make the best possible products available at the lowest feasible price. I will take the responsibility for acquiring the materials for my education and the tools of my trade. I thank you. (The exhibits attached to Mr. Payton's statement follow:) EXHIBIT A [From Medical Care Review, Vol. 26, No. 3, March, 1969, pp. 249-252, Published by the Bureau of Public Health Economics, School of Public Health, the Uaiversity of Michigan I Dnun INDUSTRY GIFTS Richard D. Lyons, "Medical Students Plan to Return Gift Instruments," New York Times 118:72 February 2, 1969 "Forty-five students at the Harvard Medical School, who said they believed that `an unhealthy relationship exists between the drug industry and the medi- cal profession,' decided . . . to return a $40 bag of diagnostic instruments that each had been given by a pharmaceutical company. "The second-year students, who conceded that they had invited the offer last year, said in a statement that `we now feel that we made a mistake and think it proper to return the instruments' to Eli Lilly and Co. of Indianapolis. "In a letter to the company, the students said that such gifts undermind the `objectivity' of doctors and medical students because such gifts `engender a sense of familiarity and gratitude' toward those companies that dispense them. `In a subtle but real way these attitudes can undermine the critical objectivity which must underly both the medical and economic decisions of prescription writ- ing,' the letter continued. `In an analogous situation, it is universally recognized that an official who awards contracts should not accept gifts from bidders. Our aim is to establish good habits of ourselves early In our training and to promote discussion of the relationship between the drug industry, the medical profession and the p~atient,' the letter said. "Richard Pohi.. . who acted as a spokesman for the group, said the instrument package consisted of a black bag, a stethoscope, a tuning fork, a percussion ham- mer and a tape measure that, together, retail for about $40. Mr. Pobi said there were about 125 students in his class, some of whom did not choose to accept the instruments when they were distributed last year. `We want to make this a na- tional issue if possible' Mr. Pohi said, adding that the Harvard group was talking to medical students at Tufts and Boston University in an attempt to have more instruments returned. "Last November, 36 students at the Case Western Reserve University School of Medicine in Cleveland returned similar gifts from a drug company whose name was not announced at the time... .`~ *See: Medical Care Review, January, 1969, p. 32. PAGENO="0071" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5543 "Mr. Pohi said in a telephone interview that he and his fellow students had attempted to return the instruments to a Boston branch office of the Indianapolis company. . . but that `no one in a position of authority was there to accept them.' He added that another attempt would be made. "Attempts by the New York Times to telephone officials of Lilly in Indianapolis for comment were unavailing. The company is but one of many pharamaceutical corporations that give medical instruments and other materials such as textbooks and sample drugs to doctors and medical students. Some of the companies also distribute scholarships and grants to medical schools. "Dr. Richard Burack, a specialist in pharmacology at the Harvard Medical School who has been a critic of the prices and quality of drugs, applauded the students' actions. He said in a telephone interview that `it was about time that something was done to widen the link between the drug industry and the medical profession.'" Hal Willard, "Students Query Drug Firm Ties," Washington Post and Times Herald 92:lc February 28, l96~ "Students at the University of Virginia Medical $chool embarked . . . on a campaign to direct attention among medical students across the country to con- troversial links between future doctors and the drug industry. "It was immeditaely apparent at a public debate . . . between an inoustry spokesman and a faculty doctor that the campaign has a long way to go In Charlottesville before it hits the road. "Some medical students led by second-year man John Wasson became com'- cerned about the proper relationship between the medical profession and the drug industry. The group decided that the action of students at Western Reserve and Harvard universities in sending back such gifts as stethoscopes, received from drug companies, was merely a `publicity stunt' and a `peripheral issue.' Their campaign plan is to stir the consciences of other medical students across the country through debates similar to the one here. "In. . . debate, Dr. William O'Brien, of the faculty, and Dr. Harold L. Upjohn, of the Upjohn Co., were asked to discuss, among other things, conflict of interest, drug testing before marketing and drug company advertising. "One question asked, `Why do drug companies give free gifts, bags, trips, drugs? Should doctors and stuents accept them?' "Dr. Upjohn replied: `You know why they give them. No question about it. They want doctors to be interested in prescribing their brands.' He then dis~ cussed the attitude of the times, pointing out that there should be limiations on gifts and that drug companies should not be too aggressive. `If it (the giving) is excessive, it is wrong,' Dr. Upjohn said. "Dr. O'Brien replied: `Medicine is the highest paying profession and it shoulu never get in a conflict of interest. It is definitely wrong.' "He then speculated that he would be dismissed from the faculty if he ac- cepted a bottle of whiskey from a student in return for A, grades instead of Cs. "Dr. Upjohn said: `Well, the student could say "Good morning" to you and maybe influence you. What the hell.' "This was greeted with laughter and applause by the estimated 300 medicam students and faculty physicians who attended the debate. It also brought an inter- loper to the microphone, Lawrence Cranberg of the University physics depart- ment and chairman of the ethics committee of the American Association of Uni- versity Professors. `Dr. Upjohn's response is unsatisfactory and rather frivo- ions,' Cranberg said. He then discussed the evils of drug industry hospitality suites at conventions and sat down to dead silence. "But the major issue of the debate was on conflict of interest. Coincidentally, a notice on the bullentin board a few steps down the hall froni the debate in- structs studcnts on how to obtain free drugs for themselves and family members living with them from company representatives. Students are told to instruct a physician writing a prescription to note the name of the preferred drug company on the prescription. "In a discussion after the debate, several medical students said they never thought of the bulletin board notice as part of the conflict question. They included some of time group that plans to mimeograph a transcript of the debate and send it to other medical schools in an effort to inspire similar action. "Meanwhile, Professor Cranberg of the ethics committee expressed `indigna- tion at the reaction of the students to Dr. Upjohn's cynicism.'" PAGENO="0072" 5544 COM~PETITIVE PROBLEMS IN THE DRUG TN.DIJSTRY EX~IIBIT B UNIVERSIPY OF CAIFORNIA SAN FRANCISCO MEDICAL CENTER, June 5, 1969. To: Charles Payton. From: Raymond Ward. Subject: Complimentary merchandise given to medical students by various pharmaceutical houses. Lilly Pharmaceutical: Freshmen, 1 Littmann stethoscope $24. 00 Sophomore, 1 tape. measure 4. 00 Sophomore, 1 percussion hammer 2. 70 Sophomore, 1 black bag 7.00 Sophomore, 1 tuning fork 6. 00 Junior, 1 notebook 2. 00 Senior, 1 black leather bag 20. 00 Warner Chilcott: Junior: 1 covered clip board 2. 00 CIBA: One pocket size medical tables and calculator 4. 00 Hard bound text on the interpretation of the EKG. ExHIBIT C CONCERNED SrunENTs OF THE SoPHoMoRE MEDICAL CLASS, UNIVImSITY OF CALIFORNIA MEDICAL CENTER, 2am Francisco, Calif., January 10, 1969. Lirix PHARMACEUTICAL Co. DEAR Sms: The pharmaceutical companies' policy of providing gifts to medi- cal students creates two moral dilemmas for the students. One of the future physician's first responsibilities is to his own integrity; yet, the acceptance of gifts may incur a definite, albeit subtle, sense of obligation, thus threatening the physician's integrity. The physician should in no way be made to feel some kind of loyalty to a company, because it has given him some instruments. This gift-giving policy, then, appears to be thinly~disguised advertising. Yet the fact that drug companies continue to distribute gifts would seem to indicate that this subtle form of advertising does pay off. The second moral `dilemma involves our ultimate primary concern-our re- sponsibility to our patients. While initially grateful and happy to receive your gifts, upon more rational examination, we've had unsettling thoughts as to who ultimately bears the cost of these gifts. It can be none other than the drug- consumer, our patient. For, the drug company, spending a great deal of money on these good-will programs, must ultimately raise the price of their drugs to absorb promotional expense. And while medical school is a financial struggle for many of us, considering our potential earning power in the future, we should be better able to afford the cost of our instruments than can the major drug consumers-the aged and the chronically ill, who have exhausted their earning power. To those who insist the drug company is serving a worthwhile function b3' improving the education of medical students, we would readily agree. We ap- predate the books, scholarships, research grants and travel fellowships provided by the drug companies and acknowledge their, value in our education. We feel, however, that gifts such as black bags, stethoscopes and reflex hammers, do little to improve our education. Perhaps our main complaint, then, is priorities. In our opinion, money spent by drug companies which directly affects the quality of our education, such as the grants, etc., mentioned above, `is money well Invested. Money spent on in- struments, etc., on the other hand, could be used so much more wisely-and where it Is so much more urgently needed. Having stated our moral obligations, we would hope the drug `industry would demonstrate a comparable sense of responsibility. We offer the following suggestion for the use of money now spent in supplying medical students with gifts. Those of us endorsing this letter con- sider this the most admirable form' of advertising imaginable: A special fund should be created by drug companies for the purpose of dis- tributing drugs `to neighborhood health centers. We recognize that some firms PAGENO="0073" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5545, are already donating drugs to such centers, but this has been on an irregular basis, failing to demonstrate any concrete policy in this direction. With drug in- dustry support, doctors and community leaders could create neighborhood health clinics. This would obviate such federal programs as that involving the expendi- ture of $94 million by ORO to establish 51 neighborhood health centers and would improve health conditions through action at the local leveL The sale of donated drugs at reasonable prices by clinics would avoid the stigma of charity projects and would provide, in part, the operating funds for such clinics. The Lilly Company has spent several thousand dollars' on the class of 1971 at the University of California San Francisco alone. The problems besetting this country urgently demand that in the future, this money, and that of all companies allocated for similar promotions, be redirected into an imaginative new program that will provide health care to the underprivileged, so that they may no longer remain isolated from the main stream of this nation's society simply because they cannot buy good he~Uth. Sincerely yours, CONCERNED STUDENTS IN TEE SOPHOMORE MEDICAL CLASS, UCSF. Note: Some of the above students will be returning their gift instruments under separate cover. ExHIBIT D Er.i LILLY & Co., Indianapolis, md., April 15, 1969. Mr. JAMES L. BLATTAU, ~an Francisco, Calif. DEAR MR. BLATTAU: Your letter dated February 28 was received in Indianap- olis on March 31, and has just been called to my attention. Taking the letter somewhat in reverse, may I hasten to state `that we share with you and your associates the concern you express for the inequities that we are experiencing in the delivery of medical care and in `the availability of therapy. This, we regard as a problem of all our people, not just those who either furnish health care or drugs. True it is, your group, those in active practice, and our in- dustry in carrying out our daily tas'ks are closer to these problems and, for that reason, are more acutely aware of them. Our company over the years has worked at the business of being a good corporate citizen, both in the communities where we have plants and with the public in general. That part of citizenship which more recently has been described as "social concern" is an area to which we have given and are giving a lot of attention. As an approach to one of the problems you mention, namely, those individuals of marginal financial independence, the possibility of prepayment plans for drugs, similar to plans presently being used for hospitalization and,medical care, might answer the burden of heavy costs when illness strikes. Such plans are being studied by our industry in cooperation with the insurance industry and agencies of government. The presence or absence of our gift program would have an infinitesimal effect on the truly large problems you pose. The gifts are offered, of course, for a dual purpose-one of which is to call our company to the attention of the medical student during his' learning period and, secondly, to say thank you for having undertaken an anything but easy road. The idea that the clinical judgment of the recipient can be bought is repugnant to us and, we believe, an insult to him. Whether or not under such circumstances a gift can be accepted it, of course, a matter of individual judg- ment. We truly do not see it as a moral issue. In closing, may I say that we as a company, and as individuals within a company, feel the same sense of social responsibility that you and your asso- ciates exhibit. Sincerely, HENRY F. DEB0EST. PAGENO="0074" 5546 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY ExhIBIT E SENIOR GIFTS PRESENTED TO THE GRADUATING CLASS OF 1969 OF THE UNIVERSITY ti~ CALIFORNIA SCHOOL OF PHARMACY Lilly-Two spatulas, one product reference book. Upjohn-One plastic desk name plaque. Merck, Sharp & Dohme-One porcelain ashtray. Owens-Illinois-One 1'6~oz. painted Rx bottle. Parke-Davis-One hardback bound `book entitled "Great Moments in Pharmacy". Dorsey Labs-One `package of samples, including Chexit (12 tabs), Triarninicin (12 tabs.), Triaminicol (4 oz.). American Greetings Corporation-One graduation greeting card. Lewis/Howe Company-Arch Laboratories-One roll of Turns with dispenser, one emblem to be attached to a car bearing an Rx and "Registered Pharmacist," one role of Dicarbosil. Schering-One metal "decorative" mortar and pestle. EXHIBIT F Medical students are the recipients of the following awards: Upjohn Achievement Award-Presented for overall academic achievement to a graduating senior .$150.0O and plaque. Hoffman LaRoche Award-Presented to a graduating senior. Merck Manual Award-Three Merck Manuals are awarded to three graduating medical students. Roche Award-Omega watch given to a third year medical student. Pharmacy student's are the recipients of the following awards: Bristol Award-Choice of Modern Drug Encyclopedia or Gould's Unabridged Medical Dictionary. Lilly Achievement Award-Gold medal for superior scholarship-to a senior. Merck Awards (2)-One copy of Merck Index: one copy of Merck Manual. Rexall Drug Company Award-Replica of medieval mortar and pestle to out- standing senior. Lehn and Fink-Gold medal to graduating student. Dentistry students are the recipients of the following awards: Block Drug Company-For highest scholastic average. Block Drug Company-Essay Contest Award. EXHIBIT G TEACHING AIDS FURNISHED WV INDUSTRY Smith Kline & French-Films to accompany "Essentials of the Neurological Examination." Merck, Sharp & Dohme-Recordings of simulated heart sounds and accompany- ing pamphlets. Warner Chilcott-A recording of simulated heart sounds. Roche Films-"Edema `and Diuretics" with book, "Treatment of Hyperten- sion" with book, "Congestive Heart Failure." Abbott Laboratories-Atlas of Diagnostic Microbiology. Warner Chiicott-Molded rubber brainstem. Smith Kline & French-"Essentiais of the Neurological Examination" (mono- graph), `essentials of the GyneCologic History and Examination" (mono- graph). The Upjohn Co.-"A Monograph on Diabetes Mellitus." CIBA-"Clinical Symposia." Ames (Miles Labs)-"A Primer on Urinalysis." Warner Chilcott-"An Atlas of Normal Anatomy." Senator N1~LsoN. Thank you very much, Mr. Payton. I personally want to commend you for raising the issue and evalu- ating the relationship and involving yourself in the discussion of the PAGENO="0075" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5547 relationship between the medical profession and the drug industry. It should have been, in my judgment, raised many years ago and should not have been left to students to do it. It should have been raised, in my judgment, and critically evaluated by the senior mem- bers of your future profession. And I think the question of the relationship of the drug industry and the medical profession is an important and serious one, and I personally commend you for your thoughtful consideration of it. Mr. PAYTON. Thank you. I would hope that students here and other individuals who may hear of this question being raised would pursue the issue on their own, in their own local areas. I think the University of Virginia students, as has been mentioned earlier, have attempted to make their own campus and other students aware of the situation. I can assure you that we are going to be doing the same thing on the west coast. I hope that through some mechanism we might bring this to a national consideration. I believe that the testimony of Mr. Martin indicates that possibly the Student American Medical Associa- tion would see fit to have the discussion at least taking place on a national basis. Senator NELSON. Thank you very much. Senator DOLE. I want to generally join in what the chairman said. I think you have raised some very good questions. I think perhaps part of the answer lies in your summation, that is, maybe some self discipline on the part of the student. I am not certain what influence the gifts you mention may or may not have on the student. I think perhaps I have enough faith, as you do, in young men and women in the medical schools that probably they have no real influence at all. I am not certain it is a good practice, but I think the fact that you have raised it, that there is a moral principle involved, at least on the part of eight students in your class out of 125, does indicate some little concern, and perhaps this will grow. But at the same time I would say apparently some want to have it both ways, and I do not think that is going to solve, the problem either. Mr. PAYTON. Well, as I commented earlier, I think maybe we can niake a more `valid decision on that situation once we have brought the issue to their consideration at a more opportune moment. Senator DOLE. Thank you. Sen'a~or NELSON. Thank you very much, Mr. Payton. Mr. DUFFY. May I ask one question? Senator NELSON. Yes'. Mr. flUFFY. I would just like to pursue a line of thought that we were developing earlier, and that is the awareness that you had and the awareness that the student body in general may have had of certain of these gifts. I am wondering if, for instance, you could have sent a letter to Eli Lilly, telling them that you were not picking up the gifts. I am also curious as to whether you had full opportunity to adopt a procedure such as this last November. I think all of us at this table have been exposed to academic insti- tutions. And I know that as a flrst year law student I was well aware of what was going to be given to students during the 3 years. And I guess my question touches to some degree on the method of approach PAGENO="0076" 5548 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY It seems to me that perhaps you have chosen the more sensational method of going about this, whereas if you were really sincerely interested, wouldn't you have chosen some perhaps less sensational approach, but a more effective approach ~ Mr. PAYTON. I think, again, that this relates to the situation I described earlier, and that wa~ that many of us had not considered the question at that point. I have already made it rather clear, I believe, that many students have not had the question presented to therri. They are not either conversant or aware of what these gifts represent. I can speak for myself in that I was not aware of when these things were being provided to me. I was not aware that they had actually come to the university until the week that they were in the bookstore and were to be presented. At that time, as I said, we felt that to simply leave the articles there would possibly fail in our communications with the industry. And I think~that we have an obligation to communicate with them if we are truly going to have a relationship with them. And I see no way that we can get around that. I think that there is a proper relationship. I think we have to have communications. I think that you are suggesting that next year an earlier communication telling them a certain number of students, if so chosen on their part, will not be receiving or accepting the gifts, then they need not send them. I might comment here that I think it is presented in some of the other testimony and it is true also at the school, University of Cali- fornia San Francisco School of Medicine, that at least one of the gifts provided by the Lilly Co., the leather black bag in the senior year now is distributed on an optional basis, such that the student receives a letter explaining that this gift is available and he must return a card saying that he is desirous of receiving this gift. So that if this is any indication, there may come a day shortly when they will make these things entirely optional so that the student must actively solicit or seek some sort of gift from the company. Mr. DiJFFY. Mr. Payton, are you aware-I am informed by repre- seritatives of the Lilly Co. that this year the optional acceptance of these gifts exceeded 90 percent. Mr. PAYTON. That very well could be. Mr. DUFFY. I would be curious to hear your comments on that. Mr. PAYTON. I think that the information presented earlier that on the order of 200 students in the country have returned the instru- ments-that certainly was an active process on their part-is very valid, rfhat would probably give you a fair representation of the number of individuals that have some insight into the situation. I think that to feel that we are now going from two-tenths of a percent, or whatever the figure quoted was, to maybe 10 percent not utilizing thi~s service provided by the industries, that represents a significant achievement on our part. And I would hope that further discussions that we would have with fellow students would increase that number. Mr. DUFFY. Thank you, Mr. Payton. Senator NELSON. Let me say, Mr. Payton, my father used. to say to me, "It is never too late to raise an ethical question and never too late to question past policies." PAGENO="0077" COMPETITIVE PROBLEMS IN THE DRTJG INDUSTRY 554~ And I want to commend you, again. I do not think it ought to be expected of any student going into a profession, whether it be engi- neering or medicine or law or any other, that the day he arrives he has a well-thought-out viewpoint upon what the proper role of the profession is and the relationship of that profession to those with which it deals, So if a practice has been going on for years, it is normal to accept it until you have an opportunity to think about it and evaluate it. I regret very much that the issues you have been properly raising here have not been raised within the profession itself more vigorously, though I would say to you--and you are probably aware of the fact-th'a,t our 5,000 pages of testimony are replete with testimony from some of the most distinguished pharmacologists and some of the most distinguished clinicians in America that say everything that you have said today and say it stronger. And so you are in good company with some of the finest physicians in America. And I want to commend you, again, for your ethical con- cern and your concern about the relationship of the profession to the industry, which is indeed a very important matter to your future pro- fession and to the people of this country. Thank you very much. Mr. PAYTON. May I simply ask, does the invitation to share the table with the other students extend to me, also Senator NELSON. Certainly. Any of you are free to comment on any question I ask, in any event. Our next witness will be Mr. Richard Pohl, who is accompanied by Mr. David Spiegel, and Mr. Carl Nathan, all from the Harvard Medical School. The committee is very pleased to welcome you gentlemen here today, and you may present your statement as yoi~i desire. STATEMENTS OP CARL NATHAN, RICHARD POHL, AND' DAVID SPIEGEL, MEDICAL STUDENTS, HARVARD MEDICAL SCHOOL Mr. NATHAN. Thank you. We would like to begin by describing exactly what the second-year class has received from drug companies in the first 2 years of medical school. (Whereupon, there was a short recess.) Senator NELSON. You may proceed with your statement. Mr. NATHAN. Fine. Among the books that 125 members of our class has received during medical school is one called "Documents Geigy Scientific Tables," which was requested by the administration and distributed through them and contains no advertising of Geigy products. Another was "A Primer on Urinalysis,"which simply appeared in student laboratories and it is marked with the name of'a distributing drug company. Another is "The Atlas of Normal Anatomy," by the Lederle Labo- ratories, which, again, was distributed through the medical school ad- ministration. Each page is marked with the insignia of the company and there are four pages of advertisement. PAGENO="0078" 5550 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY "Anatomical Chromographs of the Human Male and the Human Female" was distributed at the school dormitory and contains no ~tdvertising. The "Atlas of Diagnostic Microbiology," from Abbott Laboratories, was, again, distributed in the laboratory and contains no advertising. A monograph by Upjohn Co., "Diabetes," was distributed through the administration. Sections of this book are devoted to the treatment of diabetes with Upjohn products. Package inserts for these drugs are reprinted at the end of the book. "Human Mycoses," a monograph by the Upjohn Co., was distrib- uted in the laboratory without the knowledge of the administration. Drugs are recommended for the treatment of the various mycoses. The book downplayed the role of antibiotics, steroids, and certain other drugs in the rising incidence of systemic fungal infections. Mr. SPIEGEL. I would just like to point out that that seems to be a clear case of misinformation in the so-called educational material that we are receiving, that while later in the book they refer to the fact that drugs, although they soft-pedal certain drugs, can give rise to sys- temic fungal infections, when talking about the increase in these in- fections in the country, now they list two reasons-that is, better detec- tion and better transportation-which they claim is spreading fungi nround more, and they do not mention the fact that the tremendous increase in antibiotic drugs and others is causing a large part of the increase in the fungal diseases, and I think that is a clear area of niisinformation. Senator NELSON. Will you identify yourself for the reporter so the record will show who you are. Mr. SPIEGEL. Yes. David Spiegel. Senator NELSON. If at any time any of you wish to make a comment, state your name so the reporter will have it correct for the record. Goahead. Mr. NATHAN. Among educational aids which we received was a rtibbermodel of the human brain stem which was distributed by faculty anem'bers in class from Warner-Chilcott Laboratories. A record, "Auscultation of the Heart," was provided by a lecturer. A ~boxed set of 10 records on ausculation of the heart from Merck ~Sharpe & Dohme was distributed through various tutors at the teach- iing ~hospitals. A statement that Merck Sharpe & Dohme provided these records introduces and concludes each of the records. We have received a black bag from the Eli Lilly & Co., containing a stethoscope, percussion hammer, a tuning fork, and a tape measure. These items were ail~distri'buted through the class officers. The Lilly name is stamped on each of these items. It cost students in our class about $50 apiece to replace these items at our own expense. However, we recognize that the cost to Lilly must have been considerably less. Mr. GORDON. May I ask a question here. Let us go back to the bottom of the previous page where you talk about the Upjohn Co. putting out a book on diabetes. Now, as I under- stand it, Upjohn has Orinase as one of its leading products from which it gets a large part of its income. PAGENO="0079" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5551 Would it not be suspect right off the bat that they have an interest in selling Orinase? Mr. NATHAN. Well, it certainly would be. Orinase is-about half of the book is devoted to the rationale of using Orinase in the treatment of diabetes. And as I said, at the end of the book, the typical package insert for Orinase is reprinted in full. Mr. GORDON. You would not call that an educational piece., then, would you? It is more of a, let's say, propaganda or advertising type of piece; isn't that correct? Mr. NATHAN. I certainly regard it that way. It is true that the. first half of the book is a scientific discussion of diabetes, although iii my opinion it is far inferior in quality to that easily available in all the textbooks which most medical students own. Mr. POHL. I would also call attention to the nature of this .book on thabetes. If Upjohn gets across to you the fact that you are to asso- ciate treatment of diabetes with Orinase, and you make that initial prescription, that prescription is likely to stick for 30 years, and that the price that it costs Upjohn to print this particular monograph, I think that it is very profitable for them indeed, if they do manage to make that association in your mind. Mr. NATHAN. I should also point out that we received this book in the first year of medical school before we had had any training in pharmacology. So this was our first introduction to the therapeutics of diabetes, and we were in no position to judge. the merits of various therapeutic courses. Senator DOLE. I have read the list of the `books and materials sup~ plied. These were supplied to 125 members in the class of 1971, and you are a part of that class? Mr. NATHAN. That is right. Senator DOLE, Do you belong to either of the groups mentioned earlier, SHO or SAMA? Mr. NATHAN. I belong to neither of the groups. There is no SAMA chapter at Harvard. Mr. SPIEGEL. I belong to another organization called the Medical Committee for Human Rights. Senator DOLE. What is this one? Mr. SPIEGEL. The Medical Committee for Human Rights. Senator DOLE. How large is this? Mr. Spiegel. Well, it has chapters in about five, major cities. I do not have figures on the number. It was organized originally to provide medical support for civil rights marches and since has involved- medical support, rather, for civil rights-has since involved itself in programsi similar to SilO, aimed at medical students and practicing physicians. Senator DOLE. Mr. Poll? Mr. POHL. I am involved in neither of these. Senator DOLE. Now, all these things were offered you, and I `assume you did not accept any of them; is that right? Mr. NATHAN. No; that is not true. We accepted all the books and all the instruments. In fact, we requested some of these items, especi. ally the instruments. And the question was raised, why take this approach in dramatizing our concern? PAGENO="0080" 5552 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY The whole point is that we were completely ignorant of the signifi- cance of accepting these items at the time we accepted them. And for my part, I was very reluctant to have to return an item I had re- quested. It is certainly an inconsistent position. But that is the posi- tion I found myself in when my eyes opened, and I could only deal with it. Senator DotE. Do you feel you have been unduly influenced by accepting any of these things? Mr. NATHAN. I feel I might have been if I had not been made aware of the implications involved. I think by returning them I have made so definite a gesture that it will not be possible to influence me very easily in this way in the future. Senator DOLE. I would ask the same question of all of you as a matter of information. I assume there are 125 rather intelligent young men or young ladies in your class, and I would hope that the black bag is not going to influence you in what products you use several years hence. I am not, again, certain whether it is a good practice. I remember in law school, I think I received a law book or two, but I understand from Mr. Gordon this is a different situation. I cannot see much difference, frankly. I probably should not have taken the book, but I did not buy all the books these people printed. I did not want to read, any more books than I had to at that point. Mr. SPIEGEL. There is a clear difference, though. The difference is if you were influenced by a law publisher, then you can make the deciSion whether you want to spend your money on their law books or not. We make the decision about whether other people should spend their money. And my own feeling is that I `am, as well as being concerned about being influenced, I am concerned about the fact that I think it is improper for people to pay in this indirect manner for me to get something. If they are going to pay for medical services, that is fine. But I just do not think it is fair to take their money. Senator DOLE. This is the basic question, no doubt about it, whether l~his practice should continue, because, unquestionably, somebody is going to pay for it. I mean, just to spend money, unless it is the Govern- ment-we do not have to pay for Government money, but private industry must pass the cost along. And I think you are right; this is a basic question, one that we are concerned about. But I would also say in deference to all 125 in the class of 1971, that I would assume that you are very intelligent young men, and this may have little, if any, effect on anyone. Mr. NATHAN. I think this had a considerable effect. I would like to spell out the ways a little later on, but I could just mention, as Senator Nelson brought up several times today, somebody is prescribing ~Panalba, quite a few people. Senator Doi~. Not to a judge in Wisconsin. I think there has been a judge in Wisconsin who still thinks it may have some merit. Senator NELSON. Michigan. Senator Doii~. Michigan; yes. Mr. NATHAN. Even so, I think that it is programs like this in medical school, and their continuation into the years when a doctor is prescrib- ing that has caused the situation to develop as Senator Nelson ha~ described. I think that it is a very real influence. PAGENO="0081" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5553 Senator DoLE. I think it is going to be up to your profession-and you are going to be part of it-to make these decisions. I appreciate your willingness to accept this responsibility. I think it is going to be a matter of discipline and a matter of leadership among the medical profession members. Mr. NATHAN. I would like to point out, having concluded this list of items we received, that in the opinion of many of us very few of them are of any great educational value. One of us approached the administration of the medical school about its role in distributing some of the items above. The administration responded that as long as the majority of students continued to re- quest or accept such items, the administration would accommodate majority opinion and distribute them. Another of us wrote to Warner-Chilcott and suggested that they sell their record, "Auscultation of the Heart," rather than giving it out free. This is one item which was of considerable educational value. The company responded that in making such gifts of educational materials, it follows guidelines established by the Student AMA. Harvard Medical School has a program of making individual $700 grants to support student research work during the summer months. In 1967, $78,000 was available for this purpose from the U.S. Public Health Service under its medical student training research program. In 1968, these funds were no longer available. The medical school turned to drug companies, among other organi- zations, to help fill the gap. Out of the approximately $111,500 raised for the summer grants program in 1968, $35,000 or 31 percent was con- tributed by drug companies. Of the 134~ students who received grants, 69 were in the class of 1971; and of these, 17 were specifically sup- ported by drug company funds. Thus $11,900 went to our classmates from the drug companies. No student was required to approach a drug company to win sup- port for a particular project. Instead, all applications were judged by the medical school. Awards were assigned without the participation of the drug companies. Students were notified at the end of the sum- mer that their sponsor had been a particular drug company. They were then asked to thank the sponsor and to acknowledge the sponsor's sup- port in any publication of their results. Senator NELSON. Who asked them to do that Mr. NATHAN. The administration. Senator NELSON. The medical school administration? Mr. NATHAN. The administration of the medical school, yes. I would like to discuss now how it came about that we were rather abruptly exposed to the significance of having accepted or requested these gifts. As an elective within our second year course in pharmacology, about 30 members of our class attended a series of six lectures by Dr. Richard Burack, a former member of the department of pharmacology. Dr. Burack presented findings from the Task Force on Prescription Drugs of the U.S. Department of Health, Education, and Welfare and testi- mony given before the Select Committee on Small Business of the U.S. Senate. Other material included samples of journal ~articles and advertise- ments, decisions of various court cases involving drug firms, price lists 81-280---69---Pt. 14-6 PAGENO="0082" 5554 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY for drngs, descriptions of State laws affecting the sale of drugs, and so on. Thus, most, if not all, of our exposure in this course was to docu- mentary information. Prior to our exposure to such information, most of us were almost completely unaware of issues involving prescription drugs. The drug industry and the medical profession both are such large, familiar pres- ences on the American scene, with records of such outstanding service, that it had scarcely occurred to moist of us that anything could be amiss in their relationship. As a result of what we heard during the elective course, and the reading we were stimulated to do, many of us came to feel that doctors were at fault for allowing an intimate, unbusinesslike relationship to develop with the drug industry. We felt that many doctors accept gifts, contracts, literature, and financial support for journals and meetings with an uncritical attitude, placing themselves in a position of gratitude and even financial dependence which may detract from their objectivity. Mr. PUFFY. May I interrupt for a moment at this point? I am curious as to how you would consider a doctor who is teaching with a Government grant. As I understand, many doctors and profes- sors are across the country. He falls in very much the same category. What is your reaction tb this? Mr. NATHAN. I do not see what category you are referring to. Mr. PUFFY. Well, he certainly is in a position of gratitude and financial dependence with respect to the Government, which may detract from his objectivity. Mr. NATHAN. Well, this is true except the Government does not sell drugs. And another point is- Mr. PUFFY. Is this the nub of it? I mean, we are selling drugs and this is bad? Mr. NATHAN. Well, the point is that the man who is receiving money from the drug companies, if that were the source of his -funds, is the same man who is sending customers to the drug company, whereas no one sends customers to the Government. I think that is a poor distinction. In one case there is a conflict of interes~- which is potential, although I am sure very rarely actually realized. In the other case, I do not think there is any conflict of interest, or if it is, it is very subtle, hard to discern. Mr. PUFFY. Thank you. Mr. NATHAN. Two points in our course made an especially sharp im- pression on us. First, the prescription drug industry is founded on an economic relationship unique in American business; namely, the ma n who selects a product for purchase is not the man who pays for it. Second, since the man who selects the product is likely to have less Concern for its price than if he also had to pay for it. Advertising practices have developed which are also unique: the price of the product is almost never mentioned in advertisements. Indeed, a very unusual price structure has developed without much comment from physicians. This information caused a great deal of debate in our class. Many students, not present at Pr. Burack's talks, simply could not believe what they heard he had reported. Others thoutht the facts were cor- rect but felt that anyone with any strength of character could easily maintain his objectivity without being influenced by advertising or PAGENO="0083" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5555 any other promotional efforts. Still others thought the presentation had been one sided. And another group had rio interest in problems of this kind. We attempted to arrange a debate between Dr. Burack and a repre- sentative from a drug company, so that both sides of these issues could be aired. The company declined. Instead, it sent a copy of a Medical Tribune article attacking a book written by Dr. Burack, The article evaded the issues raised in the book. As an aside, I would like to emphasize the bad impression this made on the people who were on the fence with regard to this issue. This may not be true, but it seemed the drug company was not able to defend itself. Our experience taught us that many, if not most, medical students have a very limited awareness of issues pertaining to the drug industry. Mr. Martin, in his discussion of the Student American Medical Association position wrote that he thinks very few medical students are insensitive to these issues, but I think so many of them are ignorant of the issues that sensitivity is something which can develop only after one is aware of an issue. Mr. Poim. I would also like to say something- Senator NELSON. Would you identify yourself for the reporter? Mr. POHL. Richard Pohl. I would like to say something about the numbers which Mr. Martin talked about. Forty-five members of our class signed this letter; 49 members of our class gave in their instruments. We required people who gave in- struments to sign the letter. Had we not required this, it is my opinion that we could have gotten at least a hundred people in the class out (if 123. So I think when Mr. Nathan says that there is an abundant interest in the problem, I think he is correct. Mr. NATHAN. Our response to this information and situation can only be understood in terms of our ethical goals as future prescribers of drugs. We feel the following standards should be met by the doctor in his role as intermediary between drug producers and drug con- sumers. First of all, the doctor must attempt to answer the following ques- tions on the basis of sound, objective information: Does the patient need any drug? If so, what type? Which drug of this type will be most efficacious? What are the contraindications, pos- sible side effects and adverse reactions? And, finally, what is its cost Second, if the patient's needs could equally well be met by two different drug preparations, the doctor should prescribe the less expen- sive one. Third, the desirability of an open, frank relationship between pa- tient and doctor involving trust and mutual respect dictates that: the doctor must not derive pecuniary benefit from the patient in a way of which the patient is unaware; the doctor generally avoids, as far as pos- sible, not only actions which would be indefensible to the patient, but also actions which might give the appearance of being improper. For example, a possible conflict-of-interest situation involving a doctor is potentially as damaging to the patient's respect for the doctor as an actual conflict-of-interest situation. PAGENO="0084" 5556 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY We feel that the educational aids and medical instruments we re- ceive from drug companies were primarily designed to influence our future prescribing habits. They were advertisements for certain drug companies as a whole rather than for individual products. We feel that it is wiser for medical students not to participate in this advertis- ing process, because it tends to put them in conflict with the ethical goals listed above in the following ways: 1. We feel this advertising is founded on the psychological principle that doctors, like people generally, will feel that a better-known com- pany makes better products. The more gifts the medical student re- ceives from a company, the more familiar he will be with its name, and the more he will trust the company. Obviously, this does not con- stitute an adequate basis for the objective assessment of each drug on its own merits. Yet this preconceived trust has a tendency to supplant critical thinking. It is the medical student's responsibility to fight this tendency. Again, I would bring up the Panalba situation that Senator Nelson mentioned. Somewhere that attitude arose, and I think it was here. 2. Through this form of advertising, the medical student becomes disproportionately familiar with those drug houses which can offer expensive promotional campaigns. Frequently these same companies can afford such campaigns because they charge higher prices for cer- tain drugs. Moreover, drug advertising generally fails to carry any price information. Thus the student may become familiar with ex- pensive brand-name drugs while remaining unaware of the merits of less expensive equivalents and, what is more dangerous, never be aware of the imbalance of his knowledge. 3. The gifts we received were ultimately paid for out of the pockets of the patient. They represent a hidden part of the cost of the drug. The patient is generally unaware that lie is paying for free gifts to medical students, as well as gifts to doctors in innumerable forms. This constitutes a form of income derived from the patient without his knowledge or consent. It is also equivalent to charging excessive medical fees. In both ways, we feel, it is damaging to the relationship between the doctor and the patient. 4. We fear the appearance of a conflict-of-interest. By accepting these gifts from drug companies, while directing patients to buy their products, we would be deriving pecuniary benefit from drug companies at the same time as we created pecuniary rewards for them. This would entail an actual conflict-of-interest only if we sent patients to buy a particular drug `because we have received gifts from its manufacturer. We all feel this is very unlikely. However, no matter how great the rectitude of every member of the profession, we maintain that it is unwise voluntarily to enter into a situation which has even the appear- ance of impropriety. A dramatic illustration of this principle at a high level in the Federal Government is fresh in our memories. 5. The sense of gratitude which the student naturally develops toward the companies providing gifts, interferes with his motivation to examine, with a critical eye, the whole complex of socio-economic issues involving drug prescriptions. On the one hand, the student feels it is ungentlemanly to be critical of an organization from which he has received a gift. On the other hand, the student who has accepted a gift cannot criticize the giver without criticizing himself. Thus to PAGENO="0085" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5557 accept gifts from drug companies makes it difficult to be critical of drug companies without appearing both rude and inconsistent. We feel the drug companies do effectively forestall not oniy criticism of drug companies but even a desire to examine issues which might con- ceivably lead toward such criticism. In this way, such gifts are detri- mental to the ability of the profession to become either well-informed or independently minded on broad issues concerning drug prescription. I would like to add, when we returned the gifts to Eli Lilly, which was perhaps ungentlemanly and rude and in a sense inconsistent, Eli Lilly responded by saying they thought we were very ungrateful, which brings up the whole problem: why should we be grateful to a company whose products we have to prescribe to patients? In concluding this list of ways in which we feel drug company ad- vertisement could influence us, I want to emphasize I do not think any of the points apply differently to gifts that are educational and gifts that are not educational. And, obviously, I am critical of the position of the Student American Medical Association that such a distinction should be made and that it is right to receive educational gifts. To comment on the fellowships we have received from drug com- panies, there is apparently a trend toward decreasing Government support for medical student fellowships and loans, and increasing support from the drug companies. For summer research fellowships drug company funds helped fill the gap left by the withdrawal of the Public Health Service support, as noted above. Now Congress is considering a cut in the health professions student loan program. Correspondingly, drug company fellowships of $3,200 each have been awarded to eight of the students in the class of 1972, the class behind us. None of these fellowships were held by members of our class. We feel that financial support of medical students by drug com- panies is undesirable for the same reasons that it is undesirable for medical students to accept free educational materials from drug com- panies. The student who receives $700-$3,200 from a drug company has accepted a stake in its pricing policies, made it hard for himself to be critical of those policies, and risked the appearance of a conflict of interest. If we contrast drug company funds with Government funds as a source of support, we feel that Government funds are derived from a progressive income tax, while drug company profits represent a tax on the ill. The latter is essentially regressive, since a high proportion of drug users are the elderly and the poor. The support of student summer research is an excellent educational program. It would be seriously disrupted if drug company funds were withdrawn without being replaced from other sources. Hence, we feel that Government funds should be restored before drug company fundino~ is discouraged. The ~agful of instruments from Eli Lilly & Co. was the costliest single item given by a drug company, and the only one we would be compelled to replace at our own expense if we returned it. Hence we thought that returning this item would dramatize our concern with the relationship between medical students and drug companies, and most importantly, direct the attention of medical students at other schools to these issues. On January 31, 1969, the letter appended at the end PAGENO="0086" 5558 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY of this statement was sent to the Eli Lilly & Co., to various news- papers, and the New England Journal of Medicine where it appeared in the letters column on March 13, 1969; 45 students in our class signed the letter. The New England Journal of Medicine reported that the following students had notified the journal of their intent to return or refuse their bags: 16 at Johns Hopkins, 25 at the University of California, and 57 in the fourth year at Temple, and we have heard from other people today that bags have been* returned elsewhere as well. By our count about 200 students have actually returned bags so far that we are aware of. We would like to make several recommendations. First, that infor- mation about drug users, drug makers, and drug distributors, and the social and economic implications of this information, as described in the report of the Task Force on Prescription T)rugs, should be a standard part of the pharmacology course at every medical school. Mr. POHL. I would like to add something here. A lot of the infor- mation that we got during our pharmacology course came actually out of the testimony heard by this committee. And we have been accused by Eli Lilly, among others, of seeking wide publicity just to become sensational. Now, we feel that we have sought wide publicity but not to be sen- sational but to get this information to other doctors, to other medical students because this is the only way this problem is going to be confronted. This information in testimony as heard before the com- mittee has to be examined by all physicians and medical students, and this is why we have sought this type of publicity. Mr. NATHAN. As our second recommendation, we feel drug corn- panies should give no free gifts to medical students. Medical students should refuse to accept such gifts and should request the medical school administration not to distribute them. Third, if a drug company produces an educational aid, such as a book, record, device or model, which is of exceptional educational value and cannot be obtained elsewhere, then the company should place that item on the market along with all other such aids customarily produced by publishing houses or instrument manufacturers. If stu- (tents, faculty or libraries need the item, they will buy it. If no one wants to buy the item, then its manufacture was probably a waste of money in the first place. Mr. SPIEGEL. One member of our class, who actually refused to ac- cept the bag in the first place, is the only one of us, a year ago, first~ year students, who sought to buy "Auscultation of the Heart" com- mercially rather than accept it from a drug company. 1-Te found out that most of the companies that made these records had ceased making them commercially because they had been run nfl the market by the drug companies. He received the record approximately 3 months on order after lie put in the order and much too late to use it. So I would like to point out that when the drug companies claim that they are performing an educational function, what they are doing often is driving legitimate producers of educational material off the market so that a student who wants unbiased information is unable to get it. PAGENO="0087" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5559 Mr. NATHAN. Also, a tape of "Heart Soundness," which is equival- ent in quality to this record was available through the medical school and we just want to emphasize that none of the items or gifts or books was essential to us. Most of the information could be more easily and reliably obtained elsewhere. And we think it was superfluous. Our fourth recommendation: If drug companies wish to support scholarsl~ips and fellowships for medical students, they should do so by contributing to a collective fund at each medical school. The names of the companies contributing to the fund should be made public, but the donor of a given scholarship dispensed from the fund should be anonymous. Finally, Congress should restore the full funding of the health pro- fessions student loan program and the U.S. Public Health Service medical student training research program. I will read the letter that we sent to Eli Lilly Co. Shall I read the letter that we sent to Eli Lilly & Co.? Senator NELSON. We will print it in the record. Mr. NATHAN. OK. Senator NELSON. Right here at the conclusion of your statement. (The letter referred to follows:) JANUAEY 30, 1969. ELI LILLY & Co., Indianapolis, hid. GENTLLMEN: A year ago, as first year medical students, we invited drug com- panies to provide us with a variety of instruments, like those commonly distrib- uted at most medical schools. As second year students, we now feel we made a mistake, and think it proper to return the instruments for the following reason. We believe an unhealthy relationship exists between the drug industry and the medical profession. The profession is largely responsible, because it does not maintain a proper distance from the industry. This distance is essential for the doctor's objectivity. Since the doctor is in a unique economic position, namely that of directing what the consumer will buy, strict objectivity is his obligation to the patient. This objectivity is endangered when medical students accept instruments. Naturally, such gifts engender in the student a sense of familiarity and gratitude toward the houses that can afford to give them. In a subtle but real way. these attitudes can undermine the critical objectivity which must underlie both the medical and economic decisions of prescription writing. In an analogous situa- tion, it is universally reeognzed that an official who awards contracts should not accept gifts from bidders. It is also clear that the cost of these instruments and other elaborate promo- tional campaigns is paid by the consumer. We view our action in returning the instruments as a signal to the industry that as future doctors we would applaud a deescalation in the ever-mounting tide of promotional campaigns. Our aim is to establish good habits for ourselves early in our training, and to promote discussion of the relationship between the drug industry, the medical profession, and the patient. We support the thirty-six Western Reserve medical students who first returned drug compaiiy instruments and urge others to follow their example. Senator NELSON. I thank you very much for your excellent presenta- tion, all three of you. Do you have any questions? Mr. DUFFY. I just have one question. What do you think to the cost of medical education if your sugges- tion that the drug companies not provide fellowships, grants and so on were followed, particularly if the Government were not able to respond to your call for an increase in participation on their part? PAGENO="0088" 5560 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Mr. NATHAN. Well, I am not an economist, and it is hard to project. But I would think its effect would be very upsetting. And I would hate to pull the rug out from any of my classmates by urging the immediate cessation of drug company funding of such piograms before any substitute funding had been found But historically, or at least in the immediate past, the relationship has been the other way around, th'tt the Government has been there and is only now retreating and the drug companies advancing to fill the gap I just hope that this trend could be reversed Mr GORDON May I interrupt here for a moment ~ I think we do have information in our offices that approximately 2 percent of the expenses for medical education comes from the pharmaceutical industry. So you c'tn see the very small amount Most of it comes from the Federal Government ~ Senator NELSON Thank you very much Mr Durr~ I just have one other question, if I may Senator NELSON I wonder if you would do this I wonder if you would allow the final witness to present his statement I have an en gagement to go to-if it is all right with you Mr Durr~ Yes (Subsequent information was received and follows ) BOSTON, MASS., June 23,1969. BENJAMIN GORDON $enate Committee on $mall Business Old $enate Office Bwtlding Washington D C DEAR MR GORDON Thank you for the opportunity to present our views to the Senate Small Business Monopoly Committee on June 19 During our testimony the minority counsel requested a copy of the news paper article in which Eli Lilly & Co responded to the return of black bag'~ and instruments by Harvard Medical School students The enclosed is repro duced from the Harvard Crimson volume CXXXXLX No 2 luesday Feb ruary 4 1969 page 1 Sincerely, CARL NATHAN, Harvard Medical school Class of 1971 ~From Haivard Crimson vol CXXXXLX No 2 Feb 4 1969 page 1J LILLY DEFENDS PRACTICE OF GIVING DOCTOR KiTs In response to the proposed return of its free doctor s kits by 45 Harvard medical students Eli Lilly and Company has issued a staeinent defending its policy Because of exams in the Medical School the kits were not returned yesterday as planned 9nd will be retuined today to Lilly s Boston office The Boston office refused to comment on the action and inquiries were referred to the main office in Indianapolis. There Henry F. DeBoest, vice president of Corporate Affairs, s'ud For many years we have given basic medical instruments to students as a mark of our appreciation for their willingness to undertake the long difficult road to an education as a physician The instruments have been offeTed with the prior approval of the medical schools Over the years most students have accepted them gratefully In recent months on several campuses a minority of medical students has been making headlines by public pronouncements rejecting gifts It is our 1 See Appendix III pp 5735-5739 PAGENO="0089" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5561 feeling that if a gift is unacceptable all that is really needed is a polite `no thank you.'" MED STUDENTS REPLY Andrew S. Binder and Richard S. Pobl, second-year students who organized the action at the Medical School, said last night that the students had accepted the gifts without knowing what it entailed and thus had missed the chance to refuse them. The students involved, they believe, in no way mean to be un- grateful. The action was made public, Binder said, because the Harvard medical stu- dents want to raise the issue of the possible unethical aspects of the gifts on other campuses. Consumers are affected by their doctors' decisions and by the price of drugs and therefore ought to know about the matter, he said. Pohi emphasized that the Lilly Company in its statement admitted the feelings of gratitude that naturally arise in the students' accepting gifts. He had denounced these feelings as possibly serving to "undermine the critical objectivity which must underlie the medical and economic decisions of prescrip- tion-writing" in the letter to the press that made the current controversy public. Senator NELSON. Our next witness is Mr. Henry Brodkin, medical school student at Case Western Reserve University Medical SchooL We are pleased to have you here today, Mr. Brodkin. STATEMENT O~' HENRY BRODKIN, MEDICAL STUDENT, CASE WESTERN RESERVE UNIVERSITY MEDICAL SCHOOL Mr. BRODKIN. The relationship of the pharmaceutical industry to the medical profession begins in medical school. It is there that the stu- dent first has contact with the drug industry and that his attitudes begin to be formc~d by gifts from drug companies. Mr. PUFFY. Mr. Brodkin, if I may interrupt you for a moment, could you tell us just briefly whether you are speaking for yourself only or for the students at your school? Mr. BRODKIN. I am a representative of Case Western Reserve Uni- versity Medical School chosen by the president of the Student Council. I represent also 36 medical students who signed the letter to the New England Journal of Medicine which I will refer to later, and I am one of those students. Mr. PUFFY. Thank you. Mr. BRODKIN. The pharmaceutical industry initiates the contact by giving gifts to medical students, ostensibly to aid them in their studies. But the gifts are also advertisements and must benefit the drug com- pany in the form of increased sales or else they would be discontinued. We feel that although gifts may appear to be insignificant, they are characteristic of the continued relationship between the drug, company and the physician after he graduates, and that they are an early factor in determining a lifelong professional relationship with the drug indus- try. The effect gifts have cannot be ascertained or documented exactly, especially by students who have not even begun to see patients. There are, however, tentative conclusions that many students have drawn about their effects. Now, what I would like to do now is just briefly mention the gifts that are given, and it is remarkable that they are very similar from the east to the west coast. as we have just seen, and as a glance at my statement will show. The drug companies are the same-I would like to know- would you like me to read all the gifts? They are very similar at San Francisco and Harvard. PAGENO="0090" 5562 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Senator NELSON. We will just print them in the record as though they were read. Mr. BRODKTN. OK. (The information referred to follows :) To begin with, I would like to state the exact involvement of the drug com- panies at CWRU Medical School. Before this year, when the movement to reject gifts began, drug companies had a fairly well established program in the medical school. After ascertaining the number of students in a class, the drug company mailed that number of gifts to the medical school, or sent a man there with them, and then the gifts were either handed out to each student, or put on his laboratory desk by a representative of the drug house. The following gifts were made in this way. First year: Geigy.-Documen~a Geigy, a compendium of mathematical tables, constituents of body fluids, metabolic pathways and other medical information, 778 pages, Hardcover. Lederle.-A Picture Atlas of Gross Anatomy, 47 pages, Softcover. Lilly-A Littman stethoscope. Upjohn-A Scope Monograph of the Cell, 46 pages, Softcover. Upjohn-A Scope Monograph on the Nature, Diagnosis and Treatment of Dia- betes, 110 pages, Hardbound. Warner-cl/ijleott.-A rubber model of the brainstem. Second year: Abbott-Atlas of Microbiology, 79 pages, softcover; Four 7-inch records on auscultation of the heart. Lilly-Plastic black bag, reflex hammer, tuning fork and metal tape measure. ymith, Kline ~ French-A pocket book of normal Clinical values. Upjohn-A scope vitamin manual, on the function and metabolism of vitamins, 88 pages, softcover. Warner-Uhjlcott.-EKG, a book on the interpretation of electrocardiograms, 40 pages, hardcover. Warner-Ujjjleott.-Auscultati'on of the heart, a 331/3 longplaying record put out by London. Third year: Abbott-Physician's desk reference, a compendium of information on a large number of the drugs currently in use. Lilly-A pocket looseleaf binder. Warner-Elhilcott.-A combination notebook and clipboard. Fourth year: Lilly-Mails students a card offering a genuine black leather bag with the student's name engraved on it. If the student indicates that he would like it and returns the card, he receives the `bag. Hoffman-LaRoehe.-Offers to buy the student one of several standard text- books in different fields of medicine. Mr. BRODKIN. I would like to mention that in addition to presents, we receive in the mail or personally, through the drug company repre- sentatives, any drug we need that does not require a prescrlptlon. We can just write it on a card and send it to the company that makes it, and it will be sent to us free. Lilly and Upjohn do this. Lilly provides you with a postcard order form. Senator NELSON. For any nonprescription drug ~ Mr. BRODKIN. Right. Now, for prescription drugs, you can get those free by obtaining a prescription and calling a drug company man. On seeing that prescription i'lC will give you the drug, or else you will be reimbursed. Another form of gift has been provided by Lederle and other companies. Lederle offers, through its sales representative, an expenses-paid weekend in New York, provided that the student pays his way there and spends an a fternoon touring the plant. The request is initiated by the student by calling the detail man and specifying the weekend desired. The detail man then makes the arrangements. PAGENO="0091" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5563 Once there the student and his wife are put up in a hotel where food and lodging bills are paid by Lederle, which also provides free tickets to some nightclub or show. Some years ago the whole graduating class would be taken on such a weekend and some schools still participate in this program. This year, after the returning of gifts by the second-year class the practice at CWR[J has changed. No longer are drug companies allowed to use the medical school as an intermediary in the giving of gifts. As of November 1968 all gifts must be made on an individual basis, and not involve the school, similar to the way Lilly gives the 4th-year bag, as has been mentioned previously. I would like to comment on the question brought up before about whether we accepted gifts or not. Mr. Payton was questioned on that. At Reserve it was slightly different and it might be interesting to hear how. When you come into the laboratory the gifts are on your desks. Since you have to work there you have to handle them in some way. In a spontaneous move we began giving them back and that precipitated the action I will describe now. Those of us at Reserve who have spoken out against the giving and accepting of gifts have stated our reasons in the following quote from our letter to the New England Journal of Medicine: We are returning these gifts because we feel they are not gifts but rather are inappropriate advertisements. Although many of these gifts are useful, all but the most naive realize that your motivation in giving them to us is to influence our future choice of drugs. We are struck by the fact that ultimately it is the consumer who pays for these gifts in the form of higher prices. Returning these gifts demonstrates our disapproval of the relationship which they foster. This relationship is one which has as its goal the mutual benefit of both the doctor and the drug company, with consideration of the patient rele- gated to a place of secondary importance. In so failing to consider the patient, both the drug company and the doctor `are not properly serving the public to whom they are responsible. This letter appeared in November, and you have heard testimony about `a similar letter appearing from Harvard later on and about medical schools taking similar action across the country. I would like to take this opportunity to elaborate on some of the points in the letter `and comment on some of the criticism against it that we have heard today. Many doctors h'ave argued that accepting the gifts does not influence their choice of drugs. Although this may be true for some doctors, it is irrelevant. This discussion should not start at the question of wheth- er or not the advertising works. The answer is `in. Advertising works. Drug companies would not spend $750 million a year advertising to doctors year after year if it were not effective.1 The pharmaceutical industry is highest or second highest in returns on investment, `and makes almost two times the rate of profit when compared to industry as a whole.2 Of the 300 to 400 companies making prescription drugs, 20 accounted for two-thirds of the pre~eription sales in l958.~ These same companies are the ones involved in medical school gift prot~rams. It is our belief that there is a relationship here; that companies big 1 Kefauver. B. "In e Few Hands," Pantheon, 1965. 2 "Fortune's 500," Fortune. May 15, 1969. a. 186. 2 Harris, R., "Real Voice," Macmillan, 1964, p. 84. PAGENO="0092" 5564 COMPETITIVE PROBLEMS IN TEIE DRUG INDUSTRY enough to invest; heavily in advertising, including gifts, have a better chance at being successful, and, conversely, that companies that ad- vertise and give gifts do so to enlarge their profits. Advertising has, in fact, taken on added significance to the medical profession in that for the most part there is no other compendium of drug information than the Physician's Desk Reference, which is composed of advertisements bought at the rate of $115 per column inch. This book and some of the brochures of drug companies are given away and are used by doctors as a source of objective information. When we say that "We are struck by the fact that it is the consumer who ultimately pays for these gifts in the form of higher prices," we do not mean that the cost of giving medical gifts is the factor which makes the cost of drugs so high. The point here is that because of the relationship which the gifts and other advertisements succeed in bringing about, the drug companies are able to charge higher prices. Now, there was some question before about whether intelligent stu- dents can be influenced by getting gifts, and I do not think it is a matter of intelligence. I do not think it is that simple, and I would like to tell you how I feel that this influence is brought about. The high prices are related to the unique arrangement of drug sales, where third parties are paying. The following quote delineates this situation nicely: Perhaps it Is most realistic to think of the prescribing physician as our customer, for the use of our product is almost entirely dependent on him and consequently the great bulk of our marketing effort is directed toward him. The drug company, in forming a relationship with the doctor in which the doctor comes to know and trust that particular company, has established an access to sales that is not affected by the price of the drug. When we first published our letter, many doctors and students wrote in saying that it was insulting and incorrect to imply that physicians were so weakminded as to be influenced by gifts. I have already stated why I believe this objection to be beside the point, and bring it up to illustrate the nature of the drug company-medical student relationship. We have a situation where, in many ways, it can be shown that doctors are indeed influenced by advertising, and yet, when this is pointed out, everyone involved says he is not influenced. How does it happen? I can only speak from my personal experience thus far and state the conjectured, results which prompted myself and some of my classmates to decide not to become a party to this mutually profit- able relationship. When a student enters medical school, drug names and `drug com- nany names are fairly foreign to him. He is in a position to learn what is significant with few biases. Although pharmacology lecturers uni- formly use generic names of drugs, by the second or third year there are few students who do not know the names of the same several large drug companies, and also the brand names of many important drugs. The third year student feels that he has been exposed to much of the basic pharmacology in medicine and the fact that he has not heard of a company or product may make `him feel that it is of dubious impor- tance. Knowing the names of these companies and believing them to comprise all of the legitimate pharmaceutical industry comes about, I believe, because students have been exposed to these companies' nam~s PAGENO="0093" COMPETITIVE PROBLEMS IN TIlE D1~UG INDUSTRY 5565 on the gifts they receive. The stethescope we receive has "Lilly" clearly engraved on it. Each book we find on our desk is clearly labeled with the name of the company that put it there. After 2 years and without any contact with the real products of drug companies, medical students are familiar with the names of and own or carry with them irrelevant products from the same group of large drug companies. We do not believe that this situation is innocuous. Doctors prescribe by brand names in situations where that brand has not been shown to be more efficacious than a generic name drug. Perhaps this is because doctors feel more comfortable prescribing a product from a company they have come to know. Knowing the names and then the products of a drug company is the first step in coming to have the familiarity with that company that later leads to prescribing their drug. Prescribing a drug from a company that one has come to trust is reasonable, `but the basis on `which that trust is founded is what is suspect. Beginning in medical school, the drug company that gives you a book or a week-end in New York is becoming known, whether the recipient wants to believe it or not. The advertising in the journals or through the 15,000 detail men, with their brochures, free samples and gifts, adds up to more than $3,000 per `doctor spent each year by the drug industry. This volume of advertising is intended to make `a doctor familiar with a company or product. Since even a cursory glance at advertisements reveals that claims are ill defined or unsubstan- ;tiated to a large extent, this means that a `doctor's choice of drug in- cludes in its formulation a volume of contact with a drug company which is almost wholly irrelevant; and medical students, in fact, start out with purely irrelevant contact in the form of gifts. Thus, when we return gifts, we are not merely rejecting an "innocent token of appreciation for the rigorous educa'tion we have committed ourselves to," as a vice president in charge of corporate affairs `at Lilly characterized t'he gifts at a recent debate at Western Reserve. We are calling the gifts subtle advertisements and rejecting not only the advertisements, but the idea that the familiarity which advertising creates is revelant to our choice of therapeutic agent. We are question- ing the ethics of `trying to influence such an important decision as a doctor's choice of drug by anything other than objective, controlled trials of efficacy. When we return these gifts we are also acknowledging the primary responsibility we have to the public, for this gesture demonstrates that we feel that our relationship with drug companies is not a private matter. We want, in fact require, in order to deliver the best medical care possible, the confidence and respect of the public. Being involved in the acceptance of favors from drug manufacturers casts doubt on our position of objectivity. It is therefore proper, in order to preserve the respect of the community which we serve, to reject gifts; and it is necessary, in order to preserve our own objectivity and hence quality of professional performance, to advocate only ex- perimental evidence as admissible consideration in the choice of drugs. Senator NELSON. I want to thank you very much for your very thoughtful presentation. Do you have some questions? Mr. Dun~'r. Mr. Brodkin, I congratulate you on the cogent statement of your position. However, as an attorney, I have several problems. One is, to a great degree, you are dealing with potentialities. PAGENO="0094" 5566 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY You are not dealing with facts or realities. We do not convict people in this country because they may have thought about committing a crime. They must do some sort of overt act before our system permits us to interfere in private relationships. You talked here in terms of tentative conclusions and you say, "The basis on which that trust is founded upon is suspect." And you are asking us, in essence, to take action on suspicion. Perhaps the function of this committee is to provide a record upon which the legislative process can operate. Therefore, I would feel much more comfortable if we could talk in terms of actual realities, if you can demonstrate to me and to this committee that, in fact, we have actual facts, actual activities that really do violate some known principle of our law or where we should create some sort of new concept of law that permits us to take action on these suspicions. I am not at all sure that you have convinced me. I think that to base action on what you have said here troubles me. And I think this troubles a lot of people. I would like to hear what you think about that. Mr. BRODKIN. Well, I can only say that it is not a matter of conjec- ture that we get gifts. You are certainly convinced that we do. Mr. DIJFFY. That appears very obvious from the testimony here this morning. Mr. BRODKIN. And it is not a matter of conjecture that much of the practice of prescribing in the United States is by brand names. You are not troubled by that. It gives me a great deal of trouble to figure out why that is so, why doctors prescribe by brand names. Mr. SPIEGEL. Could I make a statement? I would just like to add that the letter that was sent to Eli Lilly was listed an example which I believe in law is considered wrong, and that is if a governmental offi- cial who is deciding for a project accepts a bid, he is considered guilty of conflict of interest regardless of whom he gives that contract to. And I believe that the situation we are in is exactly analogous to that. Mr. GORDON. You may also add, I suppose, the problem of chlor- amphenicol where, according to our records, millions of people have received it for nonindicated purposes. Also, the question of Panalba as the Chairman mentioned before. I think that an ample reading of our hearings-b volumes are printed, and the 11th and 12th are coming up soon-would demonstrate the relationship that you discuss. Mr. Dun~v. We still, though, get back to the basic question here, is this suspicion or circumstance of doubt something upon which we should act? You say drug companies advertise and you cite that to me as an example. You say they must be doing this for some reason. A lot of companies advertise. And I submit that they are all doing it for some reason. I would like to know exactly what you are asking us to do? Mr. BRODKIN. I think several of us would like to answer this point. Let me say that when an advertisement is other than the result of an experiment which shows a specific preparation to be specifically better than another existing preparation, then in the field of medicine and specifically in the field of prescribing drugs, I would say that this. advertisement is suspect. PAGENO="0095" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5567 Does it make sense to you to ask a doctor to prescribe a drug oniy because it has a nice layout in a magazine page? It would seem to me that the only form of advertisement that is really relevant to giving good medical care to people is when you say, "chloramphenicol produced by us has been shown in every single trial in 400 patients at a certain hospital," and~ou give the controls, "to be better than all other drugs presently on the market." Then a doctor is justified in choosing that company's drug. But until such evidence is presented in advertisements I suspect those advertise- ments. I also suspect the gifts in the same way, that this is not pertinent in the prescribing of drugs. Mr. PUFFY. This is the problem. We all have the right to suspect. Any time I want to suspect a person's motives or the like, I may. Now, whether I have the right to take action on that suspicion is another thing, Mr. BRODKIN. Let me be even stronger by saying I not only suspect, I know that the company is trying to get me to buy that drug, and for reasons which I do not feel are legitimate, is that not so? Mr. PUFFY. Well, No. 1, I hedge that question by saying I am not a doctor. I think you have presented a very cogent argument, but I still come back to the point that we are grounded on suspicion. And I think you have as much right to hold your suspicions as I hold mine. But I ques- tion whether it is advisable for you to recommend that the forces of government or some other forces enter into this area on suspicion. We have dealt with this problem a long time ago and determined the Government does not have the right to enter an area on mere suspicion. Mr. BRODKIN. Perhaps Mr. Nathan can help you. Mr. NATHAN. I know it would help a great deal if we had specific examples in your personal experiences how advertising has influenced us adversely. And, of course, that is hard because we do not prescribe drugs yet. But in our very narrow range of experience, I can point out the fact that because we all accept these gifts, the class of 1071 at Harvard Medical School, for that reason many of my classmates felt that it was not at all proper for them to examine the issues involved in prescribing drugs, which is certainly beneficial action for a physi- cian. And clearly the advertising had operated to create a situation which is detrimental ultimately to the patients these people will later be treating. Mr. DUFFY. Senator Nelson, I have some other questions but I will be happy to submit them to these gentlemen in writing for the record. Senator NELSON. I am late now. You would be willing to respond to some questions for the record from the minority counsel if they are submitted? Mr. BRODKIN. Yes.' Senator NELSON. I want to thank all of you gentlemen for your very thoughtful testimony. I think your expressions of concern demon- strate a commendable level of idealism of which we have too little in practice in this country today. Your testimony in respect to your relationship to the drug industry is just part of a very large mosaic and I think it fits in with all the 1 See Appendix VII, pp. 5768-5770. PAGENO="0096" 5568 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY other testimony. And I might say that it is not a legal question and that nobody has testified that anything illegal has been done. But in our system anyone is entitled to raise issues and discuss all aspecth of the social, economic, and cultural structure of the country, and that is the kind of discussion that we are having here today. I think each of you has done an exception~lly fine job. I appreciate your taking the time to come. Thank you. (Whereupon, at 12:10 p.m. the subcommittee adjourned subject to the call of the Chair.) PAGENO="0097" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY THURSDAY, AUGUST 7, 1969 U.S. SENATE, MONOPOLY SUBCOMMITTEE OF THE SELECT COMMITTEE ON SMALL BUSINESS, Washington, D C The subcommittee met, pursuant to recess, at 9 40 a m, in room 318, Old Senate Office Building, Senator Gaylord Nelson (chairman of the subcommittee) presiding. Present: Senators Nelson, Hatfield, and Dole. Also present Beniamin Gordon, staff economist, Elaine C Dye, clerical assistant, and James P Duffy III, minority counsel Senator NELSON. Senator Dole, go ahead. STATEMENT OP HON ROBERT DOLE, A U S SENATOR PROM THE STATE OP KANSAS Senator DOLE Mr Chairman, on June 19, 1969, Mr Charles E Pay ton, a student at the University of California School of Medicine, tes tified before the Subcommittee on Monopoly At that time, Mr Payton made several serious allegations against the pharmaceutical industry `md generally charged they attempted to exert influence which was contradictory to the "rational apphcition of pharmaceutical therapy ~nd quality patient care" Mr Payton indicated that several members of his class had deter mined that acceptance of gifts was inconsistent with their "precept of independent, rational judgment in medical practice," and returned the gifts Under questioning, Mr Payton admitted he was not one of these students Since the conclusion of that hearing, it has come to my attention that on October 22, 1968, the same Mr Charles Payton wrote to pharma ceutical companies requesting their `issistance in outfitting a "black bag" for the second year students `it the University of California Scnool of Medicine Mr Chairman, Mr Payton, in concluding his statement, claimed that in response to a question from a detail man as to what he could do tor him he replied "I will take the responsibility for acquiring the materials for my education and the tools of my trade" It is apparent that Mr Pavton did not disclose the complete facts on the question of pharmaceutical practices to this committee In my opinion, this casts serious doubt on the credibility of his testimony. Mr. Chairman, I ask that a copy of the letter Mr. Payton forwarded to the Ayerst Pharmaceutical Co. be made a part of the permanent record of these hearings. 5569 81-~28O 0-439--pt. 14-7 PAGENO="0098" 5570 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Senator NELSON. It will be printed at this point, Senator. (The letter referred to follows:) STu~iNT AMERICAN MEDICAL AssoowrIoN, TJNIVERSITT OF CALnr0RNIA, SAN FRANCISCO ScHooL OF MEDICINE, San Frtinoisco, Uaiif., October 22, 1968. AYERST PHARMACEUTICAL Co New York, N.Y. GENTLEMEN I am writing on behalf of the second year class (71) of the University of California San Francisco School of Medicine During the second year it is necessary for each medical student to provide a set of clinical in struments for his own use These include a sphygmometer a diagnostic kit consisting of an opthalmic and otoscopic instrument and specula a percussion hammer, a tuning fork, a metric tape measure, a stethoscope and a black bag. All but the first two of these have been presented to the students as a gift from the Eli Lilly company The first two are however the most important and the most substantial in terms of cost to the student I am contacting all of the maior pharmaceutical companies to find out how many are interested in participating in a program to completely outfit the second year stndent 5 black bag Many companies may not find it reasonable to consider the presentation of a complete diagnostic kit (approximate retail cost $85 00) as a method of familiariz ing students with a company name I would like to know if you are interested in contributing to the purchase of a diagnostic kit or sphygmometer Once I am informed of your desires, I will arrange for two or three companies to cooperate in the purchase and presentation of each item It would be possible for each company to include a brief statement with, the instrument when it is given to the student. I wotild appreciate your early consideration of this matter as we will be needing these instruments by January 1, 196g. I would like a preliminary response as soon as possible since some students may intend purchasing these items in the near future. I have contacted your local representative, Mr. Beck, about my proposal. During our discussion he offered his support and assistance in making this project a success. I will be happy to provide you with more information of any nature, either in direct correspondence with your office or through Mr. Beck. Sincerely, CHARLES E. PAYTON. Senator DOLE Second, on May 20, Mr Chairman, Dr John Adriam, `issociate director of Charity Hospital, New Orleans, La, testified before the Subcommittee on Monopoly. In his testimony, Dr. Adriani argued for the adoption of compul- sory generic labeling of drugs Because of my interest in this question I submitted a copy of Dr Adriani's testimony to my fami]y doctor, Dr Millard E Schulz of Russell, Kans Mr. Chairman, I feel Dr. Schulz's letter would be of interest to the committee and request unanimous consent that it be made a part of the committee record You will note thit Dr Schulz does not believe generic labeling would be helpful to the physician or the patient Mr. Chairman, I might suggest that family doctors such as Dr. Schuk be invited to appear before this committee in order to put the ques tion of generic labeling in perspective Senator NELSON That will be printed in the record We have had a number of witnesses on that issue, and we would be glad to have more. PAGENO="0099" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5571 (The letter referred to follows:) . WHrrE, Pm~TIJouN & SCHULZ, PHYSICIANS AND SURGEONS, Rtu~eU Ka~v~ June 10 1969 Re Statement of John Adriani, M.D., Charity Hospital New Orleans La SENATOR BOB DOLE, U.H. $eiia~te, Washington, D.C. DEAR BOB Thank you for the report of the Senate Sub Committee on Monopoly to which I have referred above You have asked for our comments on this statement I have read the report in its entirety and if you would like to have my opinion I feel that as a prac tical matter it is not worth the paper it is written on Generic labelling would be impossible for most doctors to carry out They are already overburdened with all kinds of extra paper work produced by the Federal Government I think you know my background as well as anyone I had my original training in pharmacy and pharmaceutical education and also practical training in this regard I worked for a large pharmaceutical house for three years previous to my entrance into medicine I cannot of course qualify as Mr Adriani has given, and I am no't in a teaching position as one would compare with the Ivory Tower However my degree is in the practical method of taking care of patients and for your information which was left out of this report all of the short names for these drugs contain in parenthesis below theni on every package, the generic name. If our present system would not supply `the doctor with the correct and the ea'siest w'ay, he could write the generic' name, because it is there on the box on the label and on everything that is present So why have the generic name mandatory'? Also, I think you `should realize t'hat private industry is doing a considerable amount of research which the government would not undertake without being let s say bureaucracized Here again we step on the threshhold of perfection by a government which is not only coddling and interfering with private enter prise `but `subjecting people ~to unnecessary effort in order to' comply with their requests. Bob, if the government continues to carry out the procedures' that they have carried out in the past at any particular rate within the next twenty years there will be `no private enterprise. When I mention private enterprise, I mean physi- cians as well. This man's report is oversimplified, and I would be glad, and think I am capable to debate him in any particular way that he would care to debate In the first place he has had no experience with taking care of patients He is in an "Ivory Tower" teaching institution. He may be a surgeon but I'll bet that he does not work his own patients up and interview his patients as a private prac titioner He is probably having an intern or resident do all the work and he runs in and does the surgery and takes all the glory I am sure this letter will not be adequate to present to your committee, hecause it is so obviously honest and without prejudice. These men in the high authority in the "Ivory Tower" research portions of our schools have no idea even at the K U Medical Center do they have an idea, about the simple practice of medicine; that is, seeing patients and con- cern for the patient who only wants to come in for some small thing without waiting three days for an appointment. There are any number of young married couples who are going to physicians in cities even private practitioners who cannot see a physician without an appointment This entails a tremendous amount of money on their part and a tremendous amount of time. We are not taking care of people in the United States We are just overworking doctors in a maze of bureaucracy and paperwork I realize that I am just as guilty as any one for accepting government subsidy in the form of Medicare but I did not want It in the first place as you know nor do I think I have the proper strength and power to resist the taking of such subsidy at the present time. So, therefore, that makes me guilty too. The question, Bob, is no't what Dr. Adriani said, "Should we use generic names"? The question is, "Should we start practicing medicine instead of bureaucracy and `Ivory Tower' nonsense"? Sincerely yours, MILLARD E SCHULZ, M.D. PAGENO="0100" 5572 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Senator NELSON. The subcommittee is pleased to welcome today Dr. Simenstad of Osceola~, Wis., and Dr. Max Parrott of Portland, Oreg Dr Simenstad is a long time friend of our family, comes from the best county in the State, Pork County, `md the second best village in the State, Osceola We are very pleased to have you here today, Dr Simenstad Senator Hatfield wished to present Dr Parrott Senator HATFIELD Thank you, Mr Chairman I am very pleased this morning to present to the committee, Mr Chairman, `m very dis tinguished physician from the State of Oregon, a State which is known for its quality of medic'ml practice, primarily based upon, ob viously, the quality of educational experience of physicians who make up our medical community. But even beyond the outstanding record that Dr P'mrrott has made within the field of professional medicine, he had equally distinguished himself in the field of public interest `mnd public issues When I was Governor of the State, we undertook to establish `m medicare program under the Kerr Mills legislation, be coming one of the first States to establish such a program It was the very able assistance of the Oregon Medical Society and the leadership of Dr Parrott which provided us with the expertise to develop a meaningful program under Kerr-Mills. So I would say at least in our State, the medical society had been intimately involved and deeply concerned with the programs of providing medical service for indi- gents and others in our society who could not otherwise acquire medi- cal support. Dr Parrott received his basic medical education at the University of Oregon Medical School and studied further `tt the University of \~Iichigan He ~ as during World War II in the auxiliary surgical hospital program Then, like Teddy Roosevelt, who said every man owes some time in public life to the building of his profession, he served some time in the Oregon State Medical Society, was in the house of `delegates to the AMA from 1960 to 1961; and played, an active role in AMA legislative activities 1961-66. He was elected to the board of trustees of the American Medic'ml Association in 1966, re elected this year, 1969, by acclamation I am pleased to present to you and to the members of this com imttee an eminent physician and `m longtime friend, Dr Max Parrott Senator NELSON We are pleased to have you with us today, Dr Parrott Dr Simenstad, I understand you will present the first part of the statement on behalf of the American Medical Association. Please pro- ceed. If we have some questions as we go along, perhaps you will have no objection PAGENO="0101" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5573 STATEMENT `OP L. 0. SIMENSTAD, M.D., OSCEOLA, WIS.; MAX H. PARROTT, M.D., PORTLAND, OREG.; MEMBERS OP THE BOARD OP TRUSTEES OP THE AMERICAN MEDICAL ASSOCIATION; ACCOM- PANIED BY BERNARD HARRISON, DIRECTOR, LEGAL DEPART- MENT, AMA; THOMAS HAYES, M~D., EXECUTIVE SECRETARY, COUNCIL ON DRUGS; JOHN TALBOTT, M.D., EDITOR, JOURNAL OP THE AMERICAN MEDICAL ASSOCIATION (JAiVIA); AND MARVIN L. ROWLANDS, JR., EDITOR, AMERICAN MEDICAL NEWS Dr. SIMENSTAD. We would rather read the statement and then have the questions. Is that satisfactory? It will not take long. Senator NELSON. That is fine. Dr. SIMENSTAD. Mr. Chairman, I am Dr. L. 0. Simenstad, a prac- ticing physician from Osceola, Wis. With me to present the statement of the American Medical Association is Dr. Max H. Parrott, a prac- ticing physician of Portland, Oreg. Dr. Parrott and I are members of the AMA board of trustees. We have with us selected members of the AMA staff, Marvin L. Rowlands, Jr., editor of the American Medical News; Dr. John Talbott, editor of the Journal of the American Medi- cal Association; Bernie Harrison, director of the legal department; and Dr. Tom Hayes, director of the department on drugs, so that we can provide you with the information that you may require. Mr. Chairman, when Dr. Annis, who was then a member of the AMA Board of Trustees, appeared before this committee in behalf of the association, on March 18 of this year, he presented a 24-page statement with many exhibits. His testimony, which had been pre- pared so it would be responsive to this committee's needs, included the subjects of AMA advertising, advertising revenue, our views on a drug compendium, and prescription labeling. Included in the exhibits were: a copy of an AMA annual report, with financial information; lists of AMA publications; copies of the principles governing the ad- vertising of the AMA publications; financial information with respect to advertising rates and revenues in the publications of the associa- tion; the 1969 AMA budget; and excerpts from publications, includ- ing a copy of the chapter on anticonvulsants, to be published as part of the new association book "AMA Drug Evaluations." It is our intent to be as helpful to the committee as we can be, by contributing to a discussion which could help Congress, industry `and the profession move toward an advanced system of health care, par- ticularly as it involves drugs. We hope that this will be the tenor and intent of these hearings today. Mr. Chairman, we have reviewed the seven questions contained in your July 14 letter 1 and which you asked that `we answer at this time. ~ The Information follows: U.S. SENATE, SELECT COMMITTEE ON SMALL BUSINESS, July 14, 1969. ERNEST B. HOWARD, M.D., Ea,ecutive Vice President, American Medical Association, Chicago, Ill. DEAR DR. HOWARD: This is to supplement my letter of June 5 concerning your appear- ance before the SenRte Small Business Committee's Monopoly Subcommittee on August 7. The subcommittee would find it very helpful if you would discuss the following questions: 1. What are the procedures followed by the AMA in accepting advertising from drug firms? For example: Who determines whether an advertisement is consonant with the PAGENO="0102" 5574 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY This will be done.. But at the outset, we wish to make one point clear. The American Medical Association has been serving the public inter- est since 1847. Throughout these years, and today, the physicians of this country and their professional association have had a single pur- pose: "To promote the science and art of medicine and the betterment of public health." It is so stated in the Constitution of the American Medical Association. We have no compacts with industry, with any vested interests, or even with Government which can thwart this ob- jective. Our agreement is with our oath, our consciences, and with the patients we serve. Now to turn to the seven questions. The first requests information concerning procedures in accepting advertising of drugs. The Division of Scientific Activities, Dr. Hugh H. Hussey, director, formerly dean of the Georgetown University School of Medicine, is charged with the responsibility for administering the association's advertising principles. The Office of Advertising Evaluation, a depart- ment in the Division office, performs the necessary staff functions of the program. It is important to note that administratively the depart- ment of Advertising Evaluation is not answerable to the Advertising Department. It is a separate function responsible only to the mem- bers of the AMA staff who have the responsibility of directing the association's activities in scientific areas. -- Since the American Medical Association established the Journal of the American Medical Association in 1884, advertising copy submitted for publication has been evaluated and required to conform to the association's advertising policies as a prerequisite for publication. Repeatedly since 1870, the House of Delegates has directed `that adver- tising principles govern acceptance of advertising in all AMA scien- tific publications. As early as 1870, the house requested that no adver- tisements of drug products be accepted unless the official or chemical name and the formula were inserted as part of the advertisement. AMA's stated principles of advertising, which you have already supplied for the record? Who makes the final determination whether an advertisement is acceptable, especially when there is a question of its conformity to your stated standards? .2. How many drug company advertisements have been rejected by the Journal of the American Medical AssociatIon in the last 5 years? Please supply the names of the products, companies, detailed reasons for rejection, and final disposition. 3. I understand that the AMA receives grants and , other contributions from drug firm.s and their foundations for special purposes. Please tell us how much was received from such sources for the past 15 years? What were these funds used for? 4. The AMA News, dated May 2, i966, shows the AMA's net worth to be $i4,307,344 as of December 31, i965. The AMA News for May i3, i9e8, shows a net worth of $19,011,610 as of December 3i, i967. This is about a $5 million increase in 2 years. Does this reflect profits made in the advertising you carry? 5. Your investment portfolio increased by about $5 million in a 2-year period. Can you tell us about this? Does your portfolio include any investments directly or indirectly in drug firms? Please give us details. 6. What are the names of AMA personnel who went to industry directly or indirectly and those who have come to the AMA from industry for the last 10 years? 7. Many authorities who have appeared before our committee have expressed concern that the Food and Drug Administration has neither the funds nor the personnel to adequately perform its proper role-i.e., namely, the responsibility of seeing to it that drugs approved for marketing are both efficacious and safe. It goes without saying that some means must be devised by which the public interest is protected. In this regard: (a) What official steps, if any, has the AMA taken to solve this important problem? (b). Does AMA have any concrete suggestions as to the manner in which it might work with the FDA in resolving this problem? (c) In what ways might the AMA assist the FDA in carrying out this crucial function? As stated in my letter of June 5, we would appreciate receiving 15 copies of your statement by July 25 and 75 copies on the date of your appearance. Sincerely, GAYLORD NELSON, Chairm~aa, Monopoly Subcommittee. PAGENO="0103" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5575 During the same year, the house urged enactment of Federal regula- tory control of drug manufacture and distribution in order to protect the public. The advertising policies of the AMA have recognized consistently the uniqueness of drug advertising in that it should not be directed to the public, but to physicians, and because of the public interests in- volved, it should be responsibly presented. As the drug products in this country have become more sophisticated, the association's advertising policies have undergone evolution. Initially, an "ethical" manufac- turer was required to disclose the formula of his advertised products. "Secret nostrum" could not be advertised in responsible medical jour- nals such as JAMA. Today, honest presentation of claims is the primary criterion. The FDA has been given the authority to make certain that pre- scription drug advertisements appearing in the medical journals do not contain misrepresentations or omissions and do inform the physi- cian succinctly of the uses and attendant hazards of the drug. If drug advertisements do not conform to the regulatory requirements, the drug may be cited as misbranded and the FDA has the power to insti- tute seizure actions or enjoin the manufacturer, packer, or distributor from distributing the drug until such promotional claims are discontinued. The policy of the AMA has been to update the advertising stand- ards as the drug field changes. Two of the basic tenets have remained unchanged, however. One is that "the appearance of advertising in AMA publications is not an AMA guarartee or endorsement of the product or the claims made for the product by the manufacturer" and the other is that advertising space will not be sold unless "the inclusion of advertising material does not interfere with the pur- pose of the publication." Under the AMA advertising principles, advertisements for phar- maceutical products for which approval of a New Drug Application by the FDA is a prerequisite for marketing must have such approval to be eligible. Supportive data to document the efficacy and safety of drugs marketed prior to 1938 is required. The full generic name of each active ingredient of a drug must appear in the advertisement and the advertiser and the product must be identified clearly. Adver- tisements are not acceptable if they conflict with the principles of medical ethics. The AMA cannot guarantee that the manufacturer has fulfilled his responsibility to comply with the laws and regula- tions applicable to the marketing and sale of his products, however, since the FDA has that responsibility backed by enforcement powers. Thank you very much. Senator NELSON. Thank you, Dr. Simenstad. Dr. Parrott? Dr. PARROTT. Thank you, Mr. Chairman, Senator Hatfield, Sen- ator Dole. I wish to take this opportunity to thank the committee for having us here to testify. I will continue with the answers to the seven questions posed by this committee to the American Medical Association. Senator NELSON. May I interrupt one moment? Senator Hatfield advises me that he had some questions of Dr. Simenstad. Perhaps for continuity in the record, it may be better that PAGENO="0104" 5576 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY those questions be asked immediately following Dr. Simenstad's state- ment, if you have no objection to deferring. Dr PARROTT We have no objection Senator NFLSON Senator Hatfield Senator HATFIELD I am re~J1y not concerned about who responds to the questions. But I think it is pertinent to what has already been stated. We had a statement presented to this committee dated July 17, 1969, by Dr Edward R Pinckney In this st'vtement, on page 2,1 would like to quote a brief statement that he made. Then perhaps either Dr. Parrott or Dr Simenstad could respond Dr Pinckney s'tys To be sure here is the standard cliche retort by some physicians that drug use can only be decided by the prescribing physician at the moment of diagnosis and that only prescribing physicians can take i nto account all the various judgmental factors that exist at the time that led to the drug to be used. Of course, there can be no argument about this. At the same time, it is my belief that this same physician's judgment has been wrongfully influ- enced by what he has read in the advertisements for the drugs he uses Since most physicians learn about drugs especially the newer drugs through adver tising it is not wrong to concentrate on this medium of information Now, my basic question to either one of you gentlemen has to do with whether or not it is true that most physicians learn about drugs mainly from advertisements Dr SIMnNSTAD I do not think so, but Dr Parrott had better answer Dr PARROTT Well, actvertising as far as the physician is concerned is only one of the many methods by which drugs are brought to his mind. I have practiced now for almost 20 years. I can never in my experience remember a drug ad ever being the prime purpose I used the drug I think I can speak for most of my confreres the same way After nfl, education in drugs is not basically built on advertising in the medical journals. I think it is just a tool for the manufacturer to keep a product identification before the profession. The education in drugs that doctors obtain is b'tsically beyond medical school I know that there have been a number of pharmacologists testify before this com mittee, but the physician's education in drugs does not stop with the pharmacologist It goes on with the clinician, goes on with his whole life experience, in the handling of patients, in the attending of meet ings, but basically in treating the patient I ~ ould say that the drug ad in magazines is a very minor factor in the education of physicians Senator HATFIELD But as Dr Simenstad has testified here this morn ing, you do have in your own `tssociation this group which is charged with responsibility of making evaluation on such proposed advertise ments that you may receive from the pharmaceutical houses. There- fore, it is not purely `t matter of receiving requests for `tn `~d and then merely reprinting that ad at the behest of some pharmaceutic'tl house Is this correct? Dr SIMENSTAD That is correct, Senator Hatfield The scientific department has charge, but they have `i drug evaluation committee and that is staffed, of course They go over all these things first and they recommend ~ hether or not that should be accepted Now, the committee does not ~tccept the ad unless it is approved by the Food and Drug Administration. The committee's word is final- I rn~an Dr. Hu~~ey or ~om~body ~1s~ can't take that adverti~ing if this drug evaluation committee says it is no good PAGENO="0105" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5577 Senator HATFIELD Then this distinguishes the whole policy of youi journal from, say, that of the Readers Digest-I am only using the Readers Digest `is an example because it has been presented to this committee before-in the matter of what kind of advertisements it carries Your journal does make, then, separate, independent scientific evaluation of all products which are presented in any advertisements, is this correct? Dr. SIMENSTAD. Mr. Harrison had better answer. He is more con- versant with that. Mr HARRISON Senator, we do not attempt to make a scientific evaluation of drugs that are submitted for purposes of advertising Frankly, we just could not do that We do not have the kind of per sonnel that the Food and Drug Administration has Nor do we have the authority under the law What we do at the present time is accept the word of the Food and Drug Administration The Agency is charged with the authority to determine whether a drug is efficacious, whether a drug is safe, and whether a drug may be placed upon the market. Beyond that, the Food and Drug Administration has the authority and the obligation to determine whether the advertising claims meet their approval under the law and the regulations; that is, whether they correspond with the labeling of the drug, and the insert, and so forth. We examine that That decision is binding on the AMA If we have knowledge that approval has not been granted, we will not accept that ad. Beyond these, we also check the advertising to see if it is within our ethical standards-whether they conform to the other principles with respect to the kind of advertising we will accept and whether it con- forms with our principles of ethics. These are things which we do which go beyond that which may be done by other publications. I wish to make it clear to the committee that with respect to the scientific evaluation of the drugs, we have neither the personnel nor the money to do this job, nor do we have the authority That reposes within the FDA Senator HATFIELD Then as I understand it, the office of advertis ing evaluation is making a determination based upon a t~o point cri tenon. First, whether or not it carries with it the FDA approval, which is more or less a perfunctory activity, because if a paper or a situation or some sort of written evidence can be shown that the FDA has ap- proved it, that passes that criterion. Second, a determination in the field of ethics. Can you tell me what's involved in determining whether to accept advertising or not within your field of ethics? Mr HARRISON I can give a simple example There are many cases which may arise. For example, take the case of a drug advertisement which contains the name of a physician, an endorsee, cleverly placed on a bag or something of that nature The name of a physician as such in the advertisement would not be within the ethics of the AMA. Ac- cordingly, such an ad would be rejected. That is a simple illustration, but it is probably the clearest one I could make at the moment. In addition, beyond ethics, we are concerned in our principles with respect to the kinds of advertising the magazines or the newspapers may receive. For example, we will not accept all kinds of advertising PAGENO="0106" 5578 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY in the journal. I think our advertising there more clearly relates to ethical drugs and certain other very restrictive kinds of material. We will not accept general commercial advertising for the drugs.. `Senator HATTIEI4D. What's the definition of a "drug"? Mr. HARRISON. Prescription drugs, primarily. Senator HATFIELD. In other `words, Alka-Seltzer, Bufferin, aspirin, or Excedrin, or so forth, would not necessarily be accepted? Mr. HARRISON. I believe that is correct. We can check that in a moment. Such things as automobiles and other types of advertising which `may be `acceptable in another publication would not `be accept- able in our scientific journals. Scientific journal advertisements relate primarily to `the prescription drug and prescription device kind of advertising. Senator HATFIELD. Then any claim which is made in terms of the efficacy or the therapeutic value of a drug is to be determined by the FDA. But the FDA is only looking at t'he scientific value. What about a pharmaceutical house? I~t's take a hypothetical case. A pharmaceutical house has received the approval of the FDA for a certain drug. Then through its advertising agency or such, it beefs up a hard-sell type of program and makes all sorts of fantastic claims. You have no way, then, to `make judgments on those claims on it~ merely because it says it `carries the FDA "good housekeeping seal" of approval. Mr. HARRISON. There are two points I would make in response to that. First, the Food and Drug Administration goes far beyond that. It actually checks the claims. It has the responsibility of checking the claims, making sure the claims are accurate and scientifically correct. But even beyond that, when I say the Association will accept the fact that the Food and Drug Administration has accepted that drug as being safe scientifically, efficacious scientifically, and that the claims being made for it are acceptable to the Food and Drug Ad- ministration, even beyond that, the Association would not accept ad- vertising which clearly is "puffy," in nature. For example, if the ad- vertiser says, as you have indicated, that this is the best drug or the only drug, or uses that kind of language, we would screen the ad for the purpose of rejecting it, or we would request the agency for a change in language. So to that extent, too, we would look at the ad and not accept for our publications puffing or exaggerated statements which can clearly be seen as such on their face. Senator HATFIELD. My understanding is that oftentimes, the FDA does not really take any action in policing or reviewing advertising programs until after the fact, until after the advertising program has been on the market or has become evidenced by printing or other means. Mr. HARRISON. I think there are instances where the manufacturer has submitted a drug in advance of seeking FDA approval, but that may not be correct, Senator, as to advertising. Senator HATFIELD. So hypothetically again, you conceivably could receive an advertisement which has not received FDA approval as it relates to the claims for that drug, then later finding that you have to withdraw it because the FDA in its policing activity has determined that these claims are not in keeping with what the actual scientific review of it shows. Is this possible? PAGENO="0107" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5579 Mr. HARRISON. It is possible, but let me go beyond that again, Sen- ator, if I may. Advertising is primarily part of the labeling provisions of the law. The labeling provisions are exactly spelled out in the la~ and the regulations. The manufacturers advertising then must con- form with those provisions. Now, generally, then, we might say that the advertising claims as such have been screened by way of the re- quirements of the law and the regulations. If a manufacturer were to go totally beyond that which has been approved by the Food and Drug Administration-I cannot imagine~ that kind of possibility with any kind of responsible manufacturer, because it would soon be withdrawn from the market-then it is possi- ble that such a matter might not come to our attention. But remem- ber, if you would, that the advertising as such is part of the labeling provisions and that these are screened in advance. However, if a claim is made which is not provable or, what more often happens, additional information which comes to the attention of the Food and Drug Ad- ministration after the initial approval of the application indicates that there has been a change in use or there have been new contraindica- tions that have been discovered then the Food and Drug Administra- tion will require that the advertising be changed to reflect this, as well as the labeling. Senator HATFIELD. I believe Dr. Simenstad has already said to us that the Office of Advertising Evaluation does require the listing of the scientific ingredients or the chemical ingredients for all advertised drugs. Now, the question is, are these any requirements over and above what would normally be printed in or on the label of this description or this drug that is given to you? Dr. SIMENSTAD. No. Do you want to answer? Mr. HARRISON. The answer is "No." Senator NELSON. In other words, it is basically that which is already going to be revealed by the manufacturer in any of his marketing program? Mr. HARRISON. As he is required to do by law. Senator HATFIELD. Getting back to the fundamental question, Dr. Parrott, is it a real basic question whether or not a physician is intro- duced to a new drug through an advertisement? The physician, as you indicated, I believe, is going to make his own judgments and his own diagnosis and evaluations over and above merely reading about a drug, but is there anything basically wrong about a physician becoming acquainted or introduced to a drug through an advertisement? Dr. PARROTT. None whatsoever. Senator HATFIELD. There is nothing antiethical in that, is there? Dr. PARROTT. Nothing whatsoever. Senator HATFIELD. There is nothing what you would call unscientific or nonscientific about being introduced to a new drug through this medium? Dr. PARROTT. No. Many times a physician could be introduced to a new drug in this way, but 1 believe the competent physician would go far beyond that. Senator HATFIELD. That is the point. It is not the question of intro- duction, it is a question of the judgments made following this introduc- tion, is that not true? PAGENO="0108" 5580 COMPETITIVE PROBLEMS IN TUE DRUG INDUSTRY Dr PARROTT That is correct After all, I feel the physician, the medical student, the intern, the resident, is f'tr too sophisticated to be controlled or totally influenced by advertisements, whether they be in scientific journals or not. Senator HATFIELD. Are you not really, in a sense, in many of your meetings, and I have read your journal, there are so-called professional articles written about new drugs or new processes and techniques, which is `mother form of communication, oftentimes without recom mendation, without promoting that new technique or that new drug it is merely purely an `m'tlytical statement `Lnd then `i physici'm is in troduced through that medium Dr PARROTT Yes, sir As a matter of fact, the American Medical Association his for `t number of years now published `t volume known `ts "New Drugs' `1 his ~i ill eventually be `tmalgamated into a volume ~ hich you h'~ve prob'tbly heard `tbout, the ADE, or the "American Drug Evaluations Compendium." Senator HATFIELD So th'Lt all your idvertising, then, is of such `t stand'trd that it meets all the legal requirements with respect to the claims `~s permitted by FDA Just to reiter'tte `tnd make this point clear, that is true ~ Dr PARROTT That is correct Senator HATFIELD I have no other questions Senator NELSON I would like to pursue this point I have asked committee counsel to go to the office and get the Fond du L'ic study i~hich was done under the auspices of the AMA several years ago in describing prescribing pr'tctices of physicians 1 The study will speak for itself. My remembrance is that 50 percent of the doctors in that study said they prescribed a new drug based upon information from the detail man and advertising I hope I `tm not misstating what the AMA study found I think that is correct At any rite, it was `L large percentage which indicates, if the study was accurate, that detail men and advertising are a very significant influence in the decisionmaking of the doctor being introduced to and prescribing `i new drug I would like to ask about `t more recent drug, perhaps you can ex plain If advertising is not powerfully persuasive, how do you ex plain the rather tragic chloramphenicol case? Here is a situation in which the journals, including JAMA, carried articles in the editorial section-one, I recall, by a very distinguished blood dyscrasia ex- pert, Dr. Dameshek, of Mount Sinai Hospital-warning the doctors tgainst the misprescribing of chioramphenicol We had testimony which remains unrefuted in the record by five very distinguished doctors who made their own statement based upon their experience Now, Dr Dameshek treated lots of people who ended up in his hands as a consequence of the administration of chioramphenicol for a nonmdicated case One of them was a pathologist who said in all the deaths he had ever seen from aplastic anemia caused by chlorampheni- col, he had not yet seen a case in which it was administered for an indicated situation. One of the doctors said that he felt that less than 1 percent of chloramphenicol administered in this country was ad- ministered for an indicated case Dr Dameshek thought perhaps it was prescribed 90 percent of the time for nornndicated cases In 1967, 1 S~e Appendixes VIII to XII pp 577i-~9i9 PAGENO="0109" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5581 4 million people received it. If you use the conservative figure of Dr. Dameshek, then you had 3,600,000 people who were administered chioramphenicol for nonindicated cases. Now, in all the literature, the indications for the administration of chioramphenicol are perfectly clear. If any doctor turned to the litera- ture-it could be any of the scientific literature, it could be Goodman and Gilman, any sourc&-they would find very limited indications for its use. In fact, according to the National Academy of Sciences, it is no longer the drug of choice for any disease. Through all these years when the drug was being widely mis- prescribed, the AMA journal carried promotional advertising for chloramphenicol, Parke, Davis' Chloromycetin. I have looked at many of these ads. One of them that ran in the journals, including JAMA, was an ad which had only a few words- "Chloromycetin when it counts." That is all it said. Then it showed a picture of a bronchoscope. All the testimony of the experts was that there are no upper respiratory diseaseis for which chloramphenicol is indicated. The journal accepted the ad, the journal carried the ad. Leading physicians in the American Medical Association were aware of the wide misprescribing of the drug. I would like to ask: One, why would they carry an ad like that, which is very misleading? Two, if it is not the promotional advertising that convinced the doc- tor to use the drug, what did convince him? Certainly not the scientific literature. Dr. PARROTT. Have you read the scientific literature on chloram- phenicol of 15 years ago? Do you know the scientific literature on the drug as of 15 years ago? Senator NELSON. I read what claims were made for it in 1954 and what happened when it was taken off the market and the revised claims made for it in the advertising for probably every year since 1954. Dr. PARROTT. Do you also know how many other broad spectrum antibiotics were associated with it or on the market at the same time? Senator NELSON. Well, tetracycline and a number of others- Dr. PARROTT. How are you going to cover gram-negative infections of 15 years ago? Senator NELSON. I am not talking about 15 years ago. I am talking about last year. After our hearings, after the publicity- Dr. PARROTT. That is after the education on the drug built up. I have read the testimony on this committee before. I have not heard you say this before, but I have certainly read it many, many times before. I have read it in the Adriani testimony, I have read it in the Anni's testimony, in the McGill testimony. I don't know why we have to repeat this so many times, but I would like to point out, just as an aside, that after all, chloramphenicol was a good drug, is still a good drug for certain things. I know the indications have decreased with time because other things have taken its place. But when you make the statement that 90 percent or- Senator NELSON. Not my statement; Dr. Dameshek's, Dr. Best's, Dr. Lepper's. Very distinguished people. Dr. PARROTT. I understand, but you keep repeating, sir. Obviously, you are getting at a point, I think, that you are trying to prove some- thing. You are trying to prove, first, that advertising had something PAGENO="0110" 5582 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY to do with the chioramphenicol problem. I do not think it did. I think chioramphenicol was widely used at one time because it was a good drug. You point out that it was used 90 percent of the time- Senator NELSON. I do not want to continue to interrupt you but I did not point that out. If you want to quarrel with Dr. Dameshek, Dr. Lepper, Dr. Best, some of the most distinguished people in this country-I have quoted them. I do not pose as having any expertise independently at all. So you quarrel over the statistics with them. If you have some statistics that refute them-we have said this to Parke, Davis, we have said it publicly-we will be happy to have such testimony for the record. Dr. PARROTT. You can't refute statistics that do not exist. In the first place, that statistic that Dr. Dameshek referred to was not a statistic, it was more or less a retrospective impression of what had happened. He was talking about 50 to 56 deaths that occurred from this drug over a 10-year or 15-year period. Now, there is no way that you can hang anything rational on a statistic that is done in a retrospective fashion unless you have a control on all the people that took the drug, all the people that are walking the streets today because they took the drug as against those that had problems. I would dare say, some of the people who died of this drug would have died of their disease anyway. Nobody has that statistic. What I am getting to is this: You are hanging your hat on statistics that do not exist. I do not think you can use Chloromycetin in that fashion because of adver- tising or because of what detail men did. The drug was a good drug for the day it was used. It is still a good drug, except its demise is al- most obvious now. It is a dead issue because it is a medical-legal issue, not a physiologic issue at all. I would like to point out, though, that this has been before this committee many times and I do not want to belabor the point. About the bronchoscope-perhaps that did represent enthusiastic advertising, I do not know. But it is not) in the journals anymore. If something hap- pened in ads that has not been continued, I do not see how anybody could object to that. You might object to it at the time. Senator NELSON. That was a year ago. Dr. PARROTT. Yes, but this thing has been pointed out and I do not know why we have to belabor the point. What are you trying to prove here? Are you trying to prove that there is some kind of im- plied conspiracy between the drug industry and the Medical Association? Senator NELSON. No, I hope I don't give that impression. Dr. PARROrr. That is the impression we get after reading the testi- mony. I think this is a preconceived notion in your mind. Senator NELSON. No, I think there is a pretty close tie which is obvious and I, personally, feel it is not very healthy. I am prepared to say that. Now, take the claims that are consistently made by people that advertising does not influence the doctor-to illustrate the Chloro- mycetin case is not over with. It is still being widely misprescribed. However, after the hearings before this subcommittee and after Dr. Goddard appeared before our committee and he agreed to send out a "Dear Doctor" letter to every doctor in America, the use of chloram- PAGENO="0111" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5583 phenicol was reduced from something like 40 million grams to 18 million in a 1 year period This certainly indicated to me that there must have been some widespread misuse. But it is still being widely used. But this is not the point, Doctor. You say it is a good drug. I am in no position to quarrel with that I `tccepted the testimony of t number of distinguished doctors such ts yourself who testified that it is a good drug used for the proper purpose But when you say `idvertising does not influence the doctor, I think I am entitled to raise a case, `md we h'mve r'used it several times Now, the drug was never indicated for acne, it was never indicated. for headaches, sorethroat, hangnails, minor infections. Yet we have a file full of cases in which it was administered for that purpose and the patient died. My question is, Where would the doctor get the im- pression that he could prescribe this drug as recently as a year ago, and probably still today, for nonindicated cases, unless it was through promotion2 Thit is the issue, you see If the literature does not indicate it for these purposes, the promotion, in my judgment, must do it Maybe you hive `m better ide'm M'mybe I am wrong about this But if the literature is all against this use, w'mrns against it for years, but advertising is promot.ing it, such as "Ohioromycetin when it counts," `mmd a bronchoscope-what does th'it mean2 Is that `m sensible ad ~ Somebody must believe it. Mr. HARRISON. Senator, do you have examples of when that drug ~i as advertised for hangnail2 Senator NELSON No It was just `idvertised "Chioromycetin, when it counts "But where does the doctor get the idea2 Mr HARRISON Apparently, you `ire indicating that it was used foi purposes that were not indicated. SenatorNELsoN. Right. Mr. HARRISON. And that this came about through the advertising efforts of the manufacturei I do not ~i ant to speak for the manu facturer or his advertising efforts, but I would be curious to find if it were advertised with respect to hangnail. You indicate that your files ire full of cases where it was- Senator NELSON. My files are full of cases where is was prescribed for that purpose Mr HARRISON Presumably those prescriptions did not come about by `mdvertising that w'ms carried in `my American Medical Association publication Senator NELSON Oh, I suspect it did Mr. HARRISON. You suspect we advertised it for hangnail, is that correct? Senator NELSON. When I see an ad, "Chioromycetin when it counts"-what does that mean to you? Mr HAPPISON It does not mean that we advertise it for use in h'mngnail Senator NELSON. No, for upper respiratory. Mr HARRISON But not for hangnail We have discussed this many times before Senator NELSON I know it embarrasses you Mr HARRISON It does not, Senator PAGENO="0112" 5584 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Senator NELSON. I am not going to run from it because you say we have talked about it before. Let's assume there was no advertising at all, for a moment, which I think would probably lead to the benefit of the profession. Let's assume that now, `the only place you could find out about the use of chioramphenicol was to turn to Goo'drnan-Gilman, turn to scientific literature, and they specifically describe its indicated uses, very limited, and they give its side effects, the blood dyscrasia that can result. Do you think doctors would end up prescribing it for something else if that were the only source of information? Mr. HARRISON. I think that possibility exists. Let's understand the total picture here. Not only does the doctor go to the scientific infor- mation contained in publications for what we may call his postgrad- uate education on any of a number of matters, he also talks with his colleagues, he gets information from them, he attends meetings and so forth. So it is not only the scientific information that may be pub- lished; this is what was indicated earlier `to you, I think, by Dr. Par- rott. He was not indicating that advertising is totally without influ- ence. What he was indicating is that it is another means of communica- tion. And so we stated in our statement. But primarily, the physician receives his important information from the scientific literature, from the information he receives from his colleagues, from his own expe- rience and education, and that information which he may receive in attending hospital staff meetings, county medical society meetings, and other kinds of conferences and meetings which are aimed at providing him with the same kind of information. This is the total picture. Now, somewhere in this picture is a reminder ad that he sees from time to time about a certain drug and other ads about other drugs that perhaps compete with it. And this is the total picture and I think we can, each of us, draw upon our own experience as to how adver- tising relates to us. I do not use any particular golf ball when I go out and play golf, but I certainly see advertisements with respect to different kinds of golf balls. They remind me of these particular balls; I may recall that bail when I am purchasing golf balls, but primarily, I deal in my own experience and the question of what the cost to me may be. Senator NELSON. I certainly agree that there are a large number of very distinguished, very competent, highly qualified physicians in this country. I have never disagreed with that. It is a great profession. But I am raising the question of the influence of advertising. If advertis- ing does not have an influence, it strikes me as strange that the drug companies spend about $800 million a year on advertising and promo- tion. But let us move to a different drug. Let's take Panalba. Panalba, as you know, is a fixed combination of tetracycline and novobiocin. I want to read to you the principles of advertising in the AMA Journal and then ask you to explain something to me. Under "Mixtures of Drugs"-~this is under the general principles- "Clinical and laboratory data should be submitted for review by the Office of Advertising Evaluation. Clearance depends primarily on showing justification for the rationality of the combination." PAGENO="0113" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5585 Then under submission of data, procedures of the AMA Office of Advertising Evaluation Submission of data The Office of Advertising Evaluation requires that scien tific data be submitted to substantiate claims made for new products such as drugs devices and foods or new claims for products which appeared previously in the AMA scientific journal data should include pertinent reports-published and unpublished favorable and unfavorable-of clinical and laboratory invesiti gation covering `the efficacy and relative safety of the product under consideration. These data should be based upon sound studies and should be sufficiently com prehensive to permit a critical evaluation of the subject matter The quality of evidence is regarded as highly important In this respect the importance of suitable controls is emphasized Compilations of subjective mdi vidual case reports and testimonials are not considered acceptable evidence Now, the Council on Drugs of the AMA has regularly taken the position that they were opposed to fixed combinations and they en dorsed unanimously the report of the National Academy of Sciences, National Research Council, on fixed combination antibiotics In 1957, a signed editorial appeared in the JAMA signed by-one of them was Dr Dowhng, who was, at that time, I believe, chairman of the AMA's Council on Drugs, and a number of others, taking a very, very strong position against fixed combinations Now, Panalb'i has been recommended for removal from the market place The AMA News ran an editorial attacking the FDA for that recommendation My question is, in compliance with your principles, what proof of efficacy did you have that fixed combination Panalb't was efficacious and safe2 Mr HARRISON Senator, we have Dr Tom Hayes, who is, as you know, director of the Council on Drugs and secretary of the Council on Drugs. He will respond directly to that part of your question which deals with the statements by the Council on Drugs of a fixed combi- nation. I think first I should indicate to you that the principles or guide lines from which you are reading, those have been changed not too long ago-modified, I should say, not too long ago Senator NELSON Since Dr Annis' testimony on March 18th 2 Mr HARRISON Since Dr Annis' testimony Senator NELSON I have not seen the new modification Mr. HARRISON. I will be happy to supply you with a copy. Senator NELSON. If you would. (Subsequent information follows:) U.S. SENATE, SELECT COMMITTEE ON SMALL BUSINESS, Washimgton, D.C., October 13, 1969. DR. ERNEST B. HOWARD, Ec,,ecutive Vice President American Medical Association Chicago Ill DEAR DR HOWARD Enclosed is an unedited transcript of the AMA s testi mony before the Senate Small Business Committee s Monopoly Subcommittee on &ugust 7 1969 On pages 6851 6863 6864 and 6865 references are made to material which your organization is to supply for the printed record but which has not yet been received. It would be greatly appreciated if you would send me as soon as possible the material referred to on the above pages. Sincerely yours, GAYLORD NELSON, Chairman, Monopoly $ubcom~mittee. Enclosure. [Omitted.] 81-28O O-69---pt. 14-S PAGENO="0114" 5586 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY AMERICAN MEDICAL ASSOCIATION, Chicago Ill October 15 1969 H0IN GAYLORD NET SOI\ Chairman Monopoly Subcommittee Select Committee on Small Business, U.S. Senate, Washington, D.C. DEAR SENATOR NELSON Doctor Howard has asked me to reply to your letter of October 13, 1969, which requests certain information offered to be provided in our testimony before your Subcommittee on August 7, 1969. This information was forwarded to you with a cover letter dated September 15, 1969. On the assumption the material has gone astray, we are forwarding duplicate information. I am returning the transcript of the August 7 proceedings as you requested. Very truly yours, BERNARD P. HARRISON. Enclosure. cc Ernest B Howard M D SEPTEMBER 15, 1969. HON. GAYLORD NELSON, Chairman, Monopoly Subcommittee, Select Committee on Small Business, U.S. Senate, Washington, D.C. DEAR SENATOR NELSON: During the testimony of the American Medical Asso- ciation before your Subcommittee, it was indicated that certain material would be forwarded to you. I am enclosing the following (page references are to the stenographic transcript) P. 6851-Principles Governing Advertising in AMA Scientific Publications.' P. 6SS4-(a) letters to Dr. John H. Talbot dated January 24, January 29, and April 30, 1969 from Duke C. Trexler, Executive Secretary, National Academy of Science National Research Council (b) White paper on Therapeutic Equi\alence of Chemically Equi%alent Drugs excerpt from JAMA, May19, 1969. (c) Letter from Calvin M Kunin M 1) dated May 12 1969 to John H lal bott, M.D. (d) Letter from Dr. John H. Talbott, to Calvin M. Kunin, M.D., dated May 19, 1969. (e) Editorial-"Editorial Responsibilities-Editorial Procedures," excerpt from JAMA, July 28, 1969. (f) List of Consultants for JAMA in 1967, excerpt from JAMA, November 4, 1968. (g) Memorandum from Duke C. Trexier dated April 11, 1969, re Editorial Comment on the White Paper in JAMA. P 6900-Article FDA Officer Explains Combination Decision from Amei ican Medical News, dated August 4, 1969. Sincerely yours, BERNARD P. HARRISON. Enclosures. PRINCIPLES GOVERNING &D\ i.RIISING IN AMA SCIENTIFIC PUBLICATIONS The American Medical Association seeks to promote the science and art of medicine and the betterment of public health In serving these aims the AMA communicates regularly with the members of the medical profession, with profes- sional persons in allied fields, and with the public. A substantial part of this communication is carried on through the regular production and distribution of its publications. The appearance of advertising hi AMA publications is not an AMA guarantee or endorsement of the product or the claims made for the product by the manufac turer. The fact that an advertisement for a `product, service, or conpany has appeared in an AMA publication shall not be referred to in collateral advertising. As a matter of policy, the AMA will sell advertising space in its publications when (1) the buyers believes purchase of such space represents a sound expendi- ture, and (2) the inclusion of advertising material does not interfere with the purpose of the publication PAGENO="0115" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5587 These principles are applied by the American Medical Association in determing the eligibility of products and services for advertising in AMA scientific publica- tions-The Journal of the American Medical Association and the ten specialty journals. The Association reserves the right to change these principles in the light of developments in medicine or in industry. ELIGIBILITY FOR ADVERTISING * 1. Products or services eligible for advertising shall be germane to, effective in, and useful in the practice of medicine and shall be commercially available. 2. Pharmaceutical products for which approval of a New Drug Application by the Food and Drug Administration is a prerequiste for marketing will not be eligible for advertising until such approval has been granted. 3. "Institutional-type" advertising germane to the practice of medicine and "public service" messages of interest to physicians may be considered eligible for appearance in the scientific publications. 4. Alcoholic beverages and tobacco products are not eligible for advertising. ELIGIBILITY REQUIREMENTS 1. Drugs: (a) Products which are not prohibited from being marketed in the United States by the Federal Food and Drug Administration are eligible for ad- vertising in AMA scientific journals. (b) Supportive data are required to document the efficiency and safety of drugs not covered by the Food and Drug Act of 1938. (c) Eligibility of mixtures of drugs not covered by the Food and Drug Act of 1938 depends on the rationality of the combination. 2. Apparatus, Instruments, and Devices-The Office of Advertising Evaluation determines the eligibility of advertising for products intended for preventive, diagnostic, or therapeutic purposes. Complete scientific and technical data con- cerning the product's safety, operation, and usefulness may be required. The data may be either published or unpublished. Samples of apparatus, devices, equip- ment, or instruments should not be submitted. The AMA reserves the right to decline advertising for any product which is involved in litigation with a govern- mental agency with respect to claims made in the marketing of the product. 3. Food Products: (a) General purpose foods such as bread, processed meats, fruits, and vegetables are eligible. (b) Special purpose foods (e.g., foods for carbohydrate-restricted diets, sodium-restricted diets, and other therapeutic diets) are eligible when their uses are supported by acceptable data. 4. Vitamin Preparations: (a) Rational mixtures of the vitamins recognized to be essential in hu- man nutrition or metabolism in amounts not differing greatly from the rec- ommended dietary allowances are eligible as supplemental vitamin prepara- tions. (b) Rational mixtures of the vitamins recognized to be essential in amounts not greater than five times the recommended dietary allowances are eligible as therapeutic vitamin preparations. If claims not generally recognized are made for any of the vitamins, such claims must be substantiated by clinical studies acceptable to the Association. 5. Books-A book may be requested for review so that its eligibility may be determined. 6. Miscellaneous Products and Services-Products or services not in the above classifications may be eligible for advertising if they satisfy the general prin- ciples governing eligibility for advertising in AMA scientific publications. The advertisement should clearly identify the advertiser and the product or service being offered. In the case of drug advertisements, the full generic name of each active ingredient must appear. Layout, artwork, and format should be such as to avoid confusion with the editorial content of the publication. The word "advertisement" may be required. Advertisements will not be acceptable if they conflict with the principles of medical ethics. It is the responsibility of the manufacturer to comply with laws and regula- tions applicable to mimarketing and sale of his products. Acceptance of advertising In AMA publications should not be construed as a guarantee that the manufac- turer has complied with such laws and regulations. PAGENO="0116" 5588 COMPETITIVE PROBLEMS IN THE DRIJG INDUSTRY NAIIONAL RESEARCH COUNCIL Washington D C January 24 1969 Dr JOHN H TALBOTT Editor Journal oj the Amerwan Medical Association American Medical Asso ciatioii, Chicago, Illinois DEAR DR. TALBOTT: Since our telephone conversation about the DES paper on fixed combinations of antimicrobial agents Dr Kunin has approved the attached draft, and I am forwarding it at once for your consideration. As you know, we are hopeful that, if you see fit to publish the paper in JAMA, it can appear as nearly simultaneously as possible with FDA s `innouncement in the Federal Register. Thus, I would ask that you call me at your convenience when you have reviewed the report so that these arrangements can be discussed. Please let me know if any problem of interpretation presents itself Dr Kunin has stated his willingness to help in this regard and I will be glad to set up a conference call as indicated Sincerely, I)UKE C TREXLER Ecoecntive Director. cc: Dr. R. K. Cannan Dr. C. L. Dunham Dr. H. H. Hussey Dr. C. M. Kunin Enclosure. NA~rIONAL RESEARCH COUNCIL, Washington, D.C., January 29, 1969. Dr. JOHN H. TALBOTT, Editor, Journal of the American Medical Association, American Medical Asso- ciation Chicago Illinois DEAR DR TALBOTT As of this date I have not been able to determine from FDA the date they will publish the Federal Register reports on the combinations referred to in our white paper As you know the white paper should be held in privileged category until we have this word from FDA, and I will write or call you about this as I am informed by FDA. Sincerely, DUKE C. TREXLER, Eccecutivc $ecretary. cc Dr H H Hussey Dr. C. M. Kunin NATIONAl RESEARCH COUNCIl Washington, D.C., April 30, 1969. Dr. JOHN H. TALBOTT, Fiditor, Journal of the American Medical Association, Chicago, Illinois. DEAR DR. TALBOTT. The high degree of interest in problems of therapeutic equivalence of drugs prompts us to transmit to you herewith the final version of the Drug Efficacy Study's "White Paper on Therapeutic Equivalence of Chemi- cally Equivalent Drugs". We feel free to authorize publication in the Journal of the American Medical &ssociation of the text of the white paper together with editorial comment if you think such editorial comment to be desirable As you know the white paper is prepared by a subcommittee of the Policy ~dvisory Committee of the Drug Ffficacy Study The subcommittee members are Dr W B Castle Chairman Dr E B Astwood Dr Maxwell Finland and Dr Chester S. Keefer. If any question presents itself with respect to the white paper on which you feel I might comment please call on me Sincerely, DUKE C. TREXLER, Ea~ecutive Director. Enclosure. PAGENO="0117" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5589 [From the Journal of the American Medical Association, Vol. 208, No. 7, May 19, 1969, pp. 1171-1172] WHITE PAPER ON ~HE THERAPEUTIC EQUIVALENCE OF CHEMICALLY EQIJIVALE~NT DR~JGS-SPECIAL COMMUNICATION (Prepared by `t Subcommittee o1~ the Policy Advisory Committee Drug Efficacy Study) Recent i epor ts ot considerable ariation in the serum le% els and therefore in the piobable biological activities of equal doses of certain drugs marketed by different manufacturers focus attention upon an important determinant of drug efficacy These variations indicate that therapeutic equiv~tlence or equal biological activity cannot necessarily be inferred fi oni equivalence in the chemical con stitution of different formulations of the same drug. In the Drug Efficacy Study, it has been found that in many cases no data bearing on biological activity of chemically equivalent drugs are available other than those submitted by the manufacturer who originally filed t New Drug Application for his product For this reason the following qualifying addendum was approved by the Policy Ad visory Committee of the Drug Efficacy Study and was forwarded to the Food and Drug Administration with each of the 26 groups Drugs of identical chemical composition (so called generic drugs) formulated and marketed by numerous individual firms under generic or trademarked names have been evaluated foi efficacy as a group without considcra tion of therapeutic equivalence In the event that no evidence for pharmacological availability oi therapeutic efficacy in man can be presented for any of the drugs in the attached listing, their classifications of effectiveness may need to be modified if future regulations of the FDA requires such proof This statement defines the problem but offeis no solution Iheoretically biologi cal tests in man of every formulation of a drug would be needed in order to establish proof of therapeutic equivalenc~ In many but not all instances blood levels might be a satisfactory index of therapeutic activity as well as of the ab sorption of oral preparations 1~ urtheimore if appropriate chemical or physical tests should be found to correlate consistently with serum concentrations these in vitro tests might be substituted for the moie burdensome tests in animals or man Indeed blood levels in animals can be acceptable tests only if they correlate with comparable observations in man. The more potent the pharmacodynamic action of the drug the more imperative ~ ould be the need for proof of the equiva lence of biological and physical or chemical tests. The Policy Advisory Committee of the Drug Efficacy Study is aware that con- sistent evidence of therapeutic equi~ alence of oral preparations even when based upon simple study of blood concentrations in man might require the testing of each lot of each formulation and so become a large scale clinical operation re quiring consent of large numbers of patients and volunteers A strict interpreta tion of therapeutic equivalence might even require biological tests of individual capsules or successive batches of the drug selected at random Moreover variation in biological response of individual subjects would seem likely to be greater than compositional differences among enteric coated tablets or timed-release capsules. Let us not deceive ourselves: if tests in human sub- jects constitute the only reliable method of demonstrating therapeutic equiva- lence, an unacceptably large burdeii will be imposed on drug manufacturers. Such biological tests may represent the most valid measure of comparative ther- apeutic activities but the measure is one that is impossible of technical achieve ment by the pharmaceutical and medical professions. What in this less than perfect world can be done? All producers of drugs `~hould be required as they ire now not only to provide evidence of composi tion purity and quality but `ilso evidence of physical availability as judged by tests of disintegration di'~persion and dissolution rates in appropriate solvents In the majority of cases, this should suffice, but in every case in which there may *Drugs that meet the current standards of identity purity and quality and quality of the active ingredients established by competent authority. PAGENO="0118" 5590 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY be doubt of biological equivalence (eg, calcium added to tetracycline), biological tests should be required. The exploration of possible chemical, physical, and animal tests that might satisfactorily be substituted for biological tests in man has already begun, and this should most certainly be encouraged. Particular attention is being paid to relatively insoluble drugs dispensed in solid forms as tablets or capsules. A Joint Panel of the United States Pharmacopeia and the National Formulary has been at work for some months on the development of standards and test pro- cedures in vitro that will permit better definition of physiological availability. Biological data on the lack of therapeutic equivalence of various preparations of chloramphenicol recently dramatized this problem. Critical investigation of the chemical and physical properties of these preparations is currently in prog ress, and such investigations should certainly be encouraged. The whole subject will require extensive scrutiny as well as close attention to process control of the unitormity of the chemical and physical properties of both generic and trademarked preparations Appraisal of problems concerned with particular drugs will represent various degrees of medical as well as tech nical difficulty For example are high blood concentrations of short duration medically more desirable than lower more prolonged concentrations'? The deci sion would be quite different in the case of an antibiotic in contrast with an anti epileptic preparation What if such criteria a generic formulation turns out to be biologically superior to the original proprietary'? What if blood concentrations cannot be measured'? With some drugs there are reasonably good analytical methods for biological assays whereas for others a meaningful test is virtually impossible at this time Consequently the problem of the biological equivalence of drugs should be ap proached exj~ctant1y and progressively Critical e~ idence of chenucal and physi (al equivalence is the first order of business Obviously new drugs and accepted drugs of greatest pharmacodynamic action or therapeutic importance may addi- tionally require careful biological scrutiny. It would seem reasonable for the FDA to require that the generic manufacturei submit, in addition to evidence of chemical equivalence and purity, data on dis- solution rate and data from other in vitro tests demonstrating equivalency. How- ever, if there is evidence that in vitro evaluation or animal tests do not correlate well with pharmacodynamic effects in man, there may be need to resort to clinical tests In this way the principle of generic prescribing based on therapeutic equiv álence may become acceptable to the medical profession and be supported by the pharmaceutical industry. W. B. CASTLE, M.D., Chairman. E. B. AsTwooD, M.D. MAXWELL FINLAND, M.D. CHESTER S KEEFER M D UNIVERSIFY OF VIRGINIA SCHOOL OF MEDICINE, Charlottesville, Va., Mcty 12, 1969. Dr. JOHN H. TALBOTT, Editor, Journal of the American Medical Association, Chicago, Ill. DEAR DR. TALBOTT: I aiii disturbed by the publicity given to the decisions of the J.A.M.A. not to publish the paper prepared by Anti-infective Panels II and IV of the NAS-NRC drug efficacy study. I hope that you will have the opportunity to read the testimony I presented before the Nelson Committee on May 7. A copy of my formal testimony is enclosed for your interesL In my verbal answers to questions, I acknowledged that the J.A.M.A. had rejected the paper as submitted by Mr. Trexler of the NAS-NRC. I also indicated that I have always been treated well by AMA publications and did not consider this action to be in any way directed against me personally. Indeed, you did recently publish a paper of mine on closed catheter drainage in the J.A.M.A. and on oral contraceptives and blood pressure in the Archives of Internal Medicine. PAGENO="0119" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5591 I hope that this unfortunate incident is now closed and that you will consider any other papers submitted by me or the NAS-NRC according to your customary critical editorial review on the basis of their intrinsic merit. Sincerely yours, CALVIN M. KUNIN, M.D., Professor and Chairman. Enclosure-Senate testimony. AMERICAN MEDICAL ASSOCIATION, Chicago, Ill., May 19, 1969. CALVIN M. KUNIN, M.D., University of Virginia Echool of Medicine, Charlottesville, Va. DEAR DocToR KUNIN: I was somewhat surprised to `discover that in the only communication that you have had with this office in recent months you refer to the belief that "this unfortunate incident is now closed." The enclosed copy of my memo to my file as of May 8 refers to your statement published in the New York Times to the effect that I had rejected your manu- script. However, it is apparent that your remarks about the "rejection" in the question and answer period were based upon hearsay evidence-a very tricky business in a formal senate hearing. Do you have any document that I had ever received a "publishable copy" or any document from my office that I had "rejected" such a copy? Insofar as other manuscripts are concerned, submitted by you or the National Research Council, they will receive the customary editorial review only after the final publishable copy has been submitted, similar to the enclosed letter from Dr. Trexier. This accompanied the recent manuscript which was published in the May 16 issue of JAM.A Sincerely yours, JOHN H. TALBOTT, M.D. Enclosures: NYT's Report; Memo of 5/8/69; Dr. Trexler's correspondence. [From the Journal of the American Medical Association, Vol. 209, No. 4, July 28, 1969, p. 5521 EDITORIALS-EDITORIAL RESPONSIBILITIES-EDITORAL PROCEDURES During the past ten years as Editor of this JOURNAL under authority from the Board of Trustees, I have assumed my responsibilities in keeping with current practices for many scientific publications, as well as other substantial periodicals. A statement of responsibilities and procedures such as this had scarcely seemed necessary until recent months. Two statements have appeared in the press raising certain questions, which, because of their repetition, demand a breach of the silence usually kept. In carrying out the charge from the Board, a statement of the current pro- cedure which has been in effect for a decade, and which has been reaffirmed in writing to anyone who has inquired, is as follows: "No decision can be expected regarding acceptance, revision or rejection of a manuschipt until this office has had an opportunity to review critically the final draft submtited by the author(s) of a publishable copy. This review includes PAGENO="0120" 5592 COMPETrETVE PROBLEMS IN THE DRUG INDUSTRY expert consultation by one or more of the Editorial Staff and the opinion of one or more out-of-office consultants'." The first item concerns wide publicity to The Journal'si "refusal" to publish a "white paper" on fixed combinations of antimicrobials. This office did not receive a completed draft of a publishable copy of this document and no letter was prepared by this office taking any action. Any statement to the contrary is hearsay only. Decisions reached after editorial review according `to current procedures, whether accept, reject, or revise, are given in writing. The second item concerns the discussion in the MedAeal Tribune and Medical News, Monday, June 23, 1969, entitled ~~Unpublished Paper Center of Rumors." The report referring to this office is correct except for one statement and one impression. The manuscript was not "turned down" if this term means "rejec- tion," and any mystery regarding ultimate' fate is nothing more than a respect of confidence afforded all manuscripts submitted until a final decision has been reached and, if acceptable for publication until the manuscript is published. This manuscript, originally entitled "Prevalence Rates of Uterine Oervical Carcinoma and Carcinoma in Situ from Women Us'ing the Diaphragm and Con- traceptive Oral Steroids," was processed through channels of in-office and out- of-office review, with serious deficiencies noted by the out-of-office consultants. These referred specifically to the implication by name that carcinoma had de- veloped following recommended use of the steroid. Equally important were the criticisms regarding the programming of the study and the selection of controls. These were brought to the attention of the authors, who in turn "revised" the manuscript. Again, in keeping with the current policy, the revision was returned to the consultants, who noted that it failed to incorporate substantial phases of the critical review. At this stage of the appraisal and because of the importance of the subject, three pathologists were asked to review the pathological data and a biostatisti- cian was asked to review the programming, consultants who had not been called upon previously. Equally critical comments were returned and, in the interest of sound medical publishing, I didn't consider the "revised" manuscript as ac- ceptable for publication in JAMA without well-documented qualification. The authors were given the choice of either making fairly extensive revisions to satisfy the new group of consultants (and biostatisitician) or else publishing the manuscript as revised, accompanied by abstracts of the consultants' reviews, since their opinions differed significantly from the conclusions stated by the authors. The authors requested return of the manuscript. T'his was done with a letter of transmittal explaining the suggested procedure for publication. As of this date the authors have neither acknowledged this letter nor have they accepted the suggestions. The charge that the drug industry, especially the makers of oral contracep~ tives, had "put pressure on this Journal to withhold the manuscript" is com- pletely false. At no time has there been any communication, written or un- written, from any representative of the drug industry or group concerning this manuscript in the study, except as noted above, to wit, physicians and biostatistici'ans, who were representatives only of research or educational institutions. J.H.T. PAGENO="0121" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5593 [From the Journal of the American Medical Association, Vol. 206, No. 6, November 4, 1968, pp. 1292-1297] CONSULTANTS FOR THE JOURNAL IN 1967 We wish to acknowledge with appreciation the valued services of our consultants in the year 1967-EDS. J~hysic~an Cort~ul?.arlts A ABERN~iHY, ROBERT S~, Little Rock, Ark. At~.~tsoN, Ar~1FIulL New York ABRAMS0N, DAVID 1., Chicago AcKERM.~N, lAUREN V., St. Louis ADDISON, ROBERT G., Chicago ADRIAN!, JOHN, New Orleans ArcoEx, FRANKLIN S., Chicago Atn~ici-t, C. KNIGHT, Chicago ALF0rW, Bon R., Houston Ai ~ ARTHUR C., Brooklyn, NY Art RN, RICHARD J., Arm Arbor, Mich Ai.JFN, TERRY D:, Dallas ALI)ER5; BERNARD 5., PlIilade!phk! ~ ~;`iI.r.1A.~I A., Cincinnati ALTER, MIL1O~c~ Miuneapo!is AMBERG, JOHN R., Mika uker AVDELSON, F1o'IcARI) A., Rochester, Minn ANDFgscj,.; GA'i.oRo V''., Minnnpotis Arao~so:.;, Airx'\t~R `s?.. `itinipeg /`~rck{uN,'s, B's~o:.t F., ~\ooiieanoiis A?~A!~, VIRC,1:'iA ~oO `~ AprrL. NArn.~ N!PI. S.. Chicaco ARENA, J.~' M.. Dutha n, NC A.P1sESM.~N, CARt. L, ~U1taiO ARIA, IRWIN M, ~en York ASPEP, SA~ttlY P., ~tt., Baitimc're ATkINS. RtH}:~.T W.. Rc'chester, NY koCHtN.:Lo~, jOSit'H H., JR., Syrac~~se, NY 5. Bt.~r:~'~, Sen Antonio, Te~z Ayo, FRANK J., lIt, Baishnore BARR, RUDOlPH I.. , New York BAGGENEToss, ARcSLE H., Rochestet, Minn BAILEY, ORVILLE T., Chicago *BAKER, DAVID H., New York bAKER, ROGER C.. JR.~ Waslungtor~, DC * BALDWIN, DAV~O S., New York B.'u., ROBERT W., Columbia, SC BANTA, JAMES F., Washngton, DC LIARROaS, HossanoS., Jo~An~;eles BASCoM, AN ION'.' F., ~Unct~tlis fL&rs,~z'~ JOHN 0., Ann A~bor, ?~Tich f3Aonl1 MO';, Rtcn~'~o F)., I L'.no':er, NFl BVs!.ES, IHEOturE B., B~oc'kliie, ~fas~ FIRM L, ARTHUR C., JR., .Hou~ton BEASER, SAMUEl. B., Boston BLAUDRY, CLAUDE, Montreal BECK, WILLIA~[ C., Sayre, Pa BecK, WIt 11AM S., Boston BECKER, ALVIN, Boston BECKER, SAMUEL W., JR., Chicago BEECHEL, HENRY K., Boston BEERMAN, HERMAN, Philadelphia BEHNKrt, ALBERT R., Jto, San Francisco BEIERWALTES, WILLIAM H., Ann Arbor, Mich BENCHIMOL, ALBERTO, Phoenix. Aria BENEDICT, EDWARD B., Bos~ocs BENSON. DONALD W., Ba!timore BENSON, RALPH C, Portland, Ore I3ERGER, ROBERT L., Boston BErtK, 5. EDWARD, Los Angeles BERKOWDI z, DONALD, Philadelph a BERLIN, NA'IHANIFL 1., BerhesJa, Md BERMAN, LEONARD B., Louisville BERNA1Z, PHILLIP E., Rochester, Minr BERNSTEIN, DANIEL S., Boston BEST, WiLLIAM B.., Chicago BFUTLER, FaINES'l, r)uttcte, Calif BIGLIERI, EDWARD G., San Francisco BING, RICHARD J., Detroit Bisiro~, hARRY C., Philadelphia BLACKEA, KAY H., Sa~ Francisco Bz.ACK, ROGER L, Bethesda, Md BIAHD, WIJ.LIAM H., Los Angeles' BLaa.~K, HARVEY, Miami, Fia BI.ATTNER, RUSSELL J., Houston LOAZINA, MARTIN E., Los Angeles BLocit, KURt 3., Brookline, Mass' BLOUNI, JOHN C , Durham, NC BLUEFARD, SAMUEL M., Chicago Bi UEMLL, LEWIS W, Jn., Philadelphia BOGDONOFF, i't[ORTON F)., Dutha n, NC Bo~.a); VICTOR P., Upton, Long Tsland, NY BONDURANI, Sru &R~ (`, iI.diena['eils BOSIIES, lotist'., (hwaL'o Isouoo I', K,;'L'!IARINE R., Philadclpi'ks Bc'vE, JOSFt'AI B.., New Haven, Conu Bow.~IM'~, JOHN M., \";nnipcg llOY.t~st.rY, SAUL, Durham, NC Bo~sE, `kr's.'u~.o A., New York `BRACH 1 0 LD~ NoB `.t .~, New York BRADI US, S1,'.N eax E., New York BRAIst~o.k AJ.EX, Rochcstei, NY BR Vi; Ni/5 ID, NJNA S., Pt/the sda, ~sld b~tt s'i, AL14EI~ ?J., Philoklphht PAGENO="0122" 5594 COMPETITIVE PROBLEMS IN TUE DRUG INDUSTRY BtUCKPFt, NEAL S., St. Louis BEtEL, HENRY, Long Island, NY BRODsKY, IsADoEF, Philadelphia BRODY, J.~coB A., Bethesda, Md BROMACE, PinUP T~., Mon~reaI BRooK, JosEp~ Saskatoon, S~ skatehtwan BROWN, ARNOLD I.., JE.. Rochester, Minn BROWN, BOFtRY C., Atlanta BRoWN, DONALD 1'., San Francisco BROWN, ELMER B., JR., St. Louts Baowr;, HAROLD W., New York BRO~c~a, Ma.ti~, Augusta. Ga BRow~;, IFIOR NEON. Boston BROWN, WII.ItA~1 J., Atlanta BRUCE, ROBERT A., Seattle BRUCSaR. MARS tALL H., lucson, Aria BRUN3 LING, LOUIS A., Sit., Tucson, Atir BRYANT. J. MA Etc. r~r, New York BtJCHWAJ 0, HENRY, Minneapolis BrmNu~it, RICIARS) E., Chicago BUNOF, R,\Y~roNti G., Iowa City BurccHw., Ho"x'~' RD B., lUxhesrer, Mien BUJLCHENAT., Jo.aoH H., Nc~ Yorl~ BURKE, B., Chicago BUR;E, JOhN F., Boston BULKET, LES'Ien W., Phi hidelghia BURNELL. JAMES M.. Seattle BURROWS, BELTON A., Boston BITT, Hucri R., Rocht.ster, I'.flnn j. Scoir, Net'.' Yotk C C,~!ocEs, CRsAR. \Vas retcrr;, DC CAHILL, C onrr;E F., JR.. Boston CAur.RONSi, M.'.;tv S., Gi~n Head, ~ CAL L1Y~7A.Y, JASPEU'. L., i)urhai~., NC CAHERON, r)~\LE C., W.~shn,gtoo, DC C~PL3LLi., J).utREI.r. A., Ann Arbor, MiUI CAMPBELL, Hoi~ACE E., Denier CA.i.snku.I.L, TOUN A., 1ndi'in~ip~lis C/.E'REta., i'i.IER.EDTTIr j: l'OIr.pE~() T3C~ICit, F!a C.'Ar~Y, JOHN J., Qashirigton, DC CANIZ,~LEs, ORI.ANOO, NewYorit. CANNON, J\CK A., Los Angeles CARnsONR, JOHN V.. San Fr.u~is:o C;~Ei,E ro~r, RIc.HUU) A., Chicago CARE, EDWARD A., Jnt., Anti Arbor, Mkh CARROLL, WALTER W., Chicagn CAtucycte, H1trmoN M., Rochester, \iiui CMACP.itNDE, Pri FR A., Buffa~o CAsTLEAAN, BENJAMIN, Boston CAUTHORNE, ROnsI:RT T., Albuquenque, NM CHALMERS, THOMAS C., Boston CHANOCK, ROBERT M., Bethesda, Md CHAPUXY, HIGH, J~., St. louis EARLE ?~L, Boston CHARDACK, WILLIAM M., Buffalo CIIAKI:ES, N.. D.tvlr), Philadelphia - . Cnn~sr, RICEItRD A., Baltimore CHERNIAFK, RIIEBEN M., `~tinnipeg CHI'ENOEF, AMoz 1., Knoxville, Tenn CnIcssIcK, RIcH.tRo D., Evanston, III CHILD, CHARLES G., Am Arbor, Mich CHOBANIAN, Aa.~s V., Boston C~ooor'u, PAUL V., Boston CituN, RAYMOND W.M., Madison, Wis CLAMAN, HENRY N.. Denvet CLARK, GLENN M., Memphis CLARK, JAMES E., Upland, Chester, Pit. .CLARKSON, B.&YARD D., New York CLIFToN, EUGENE E., New York CLOWARD, RALPH B., Honolulic Ci.uei', LEIORroN B., Gainesville, l'La CoBe., SmNrt'~', Ann Arbor, Mich COGAN, DAvIo G.~ Boston CoI.TEN, MANFREn I.., Pittsburgh COisEN, MORLEY, Winnipeg COHN, CLARENcE, Chicago COHN, JAY N., Was!tington, DC COLBY, KENNETH MARK, Stanfosd, Calif CoLE, JONATHAN 0., Bethesda, Md CoLLzt~s, VINCENT J., Chicago Cot~u'ERn, CLINTON L., Chicago ~ONDEMI, Jot-IN J., Rochester, NY CONN, JERO~.IE W., Anti Arbor, Mich Cot.xN, R0RERYD., Seattle - CooK, CHARLES D., New Ha~cn, Conn CooK, Lo N., Rochester, Mb-in Coooets, JRVtNG S., New York COOPER, REGINALP R., Iowa City COPE, OLIVLiR, Boston Cos'rrL.&No, BRAnLEY F., Boston C0PLAN, MILTON M., Miami, Fia CORDAY, ELIOT, Los Angeles CORnEA, Roy, JR., Seattle CoR.R';EN, GUENTER, Ann Arboc, Mich CovENt Pt', Mar: B., ~hichester, Minn Cni.~DcocR, CHAIu.Es G., Jri.,Los Angeles CRAIG, FREL)txtctc S., New York CRAWFoRD, F. STANLEY, Houston Caeev~', CD, MrincapoUs CRiER, LEo IL, Pittshnrgh CRIKEIAIR, GEORGE F., New York ~ CRISTOFORI, FRED C., Minneapolis CROCHETT, JAMES, Kansas City, Mo CR0uN5E, ROBERT G., Augusta, Ga CuGELL, DAVID W., Chicago CuLLEN, STUART C., Sari Frautdsco Cun.p, ORMOND S., Rochester, Mit-in CuwrIN, JAMES A., Washington, DC CURTIS, ARTHUR C., Ann Arbor;Mich L Curra~zER, JANET, New York PAGENO="0123" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5595 DALE, W. ANDREW, Nashville, Teon DAr. SANTO, GrANFRANc0, Detroit DALY, WALTER J., Ind~anapohs DAMESHEK, WILLtA~, New York DANOW SKI, THADDEUS S., Piusbu4th DAO,THOMASL., Buffalo DARIN, JOSEPH C., i\[tlwaukee DAVENPORT, FRED M., Ann Arbor, Mich. DAVID, NORMAN A., Portland, Ore DAVIDSOEIN, ISRAEL, Chicago DAVIDSON, CHARLES S., Boston DAvis, M. EDWARD, Chicago DAwBER, TIxo~tAs R., Boston D.&v, HUGHES W., Kansas City, Kan DECOSTA, EDWIN J., Chicago DEES, JOUNE., Durham, NC DEGRAFF, ARTHUR C.. Ncvi York: DEGR0OT, LESLIE j., l3osro' Daiss, WILLIAM P. ~ Galv~sto.', Te~: DEL GREc0, Fp Nu~a:~o, Ch~cage DELAND, FR.~NK H., P. tirnor~ DRafts, D. JOSEPH, Albany, NY DENNY-BROWN, DEREK F., Eo~on DEPASQUALE, NRCHOLAS I'., Ne~v ?o..k DESANCTIS, ROMAN W., Bcrton [)E Voa, A. GFRAI.D, New York DR Wi~u., RICHARD A.,t)a~ ton, Ohio DR WIlLED, JAm'S IL, RochesHr, M~oni DR WELSE, JAMES A.. Ro.1aes~cc. NY DR WOLFE, VICtOR G., Clevelard DEXTER, Lawis, k3oston DIANf0Nn, BERNARD L., Berkeley. Calf DIAsI0NE', Lours K., Boston DIcK, DONALD AL., Augusta, Ga DICKSON, JAMES F., TB, Bethesda, Md Dirosiruat, PAUL, Rochcsrer, Mm a Dt Guu.io. `~T4.LTI.IL, Ann Arhot, Mkh DIMOND, F. GREY, La JulIa, Ca!i.' DI SANT'AGNI:SE, PAUl. A., Bcth~sda, Md Douo, GERALD D., Houston DONAGHY, RAYMOND M.P., Burlington, Vt' DONAlDSON, DAVID D., Boston DOXIADFS, TI-Ioat~\s A., Athens, Greece DOYLE, JOSEPH T., Albany, NY DRkGSTEDT, LEsTER R., Gainesville, Fla DREIFUS, LEONARD S., Philadelphia DR~ISBACM, ROEIERT H,, Palo Alto, Calif PRUSS, RICHARD G., N~v Yoik DuBors, ARTHUR B., Philadelphia DuBois, EDMUND I.., Beverly Hills, Ca~f DuBois, KENNETH, Chicago Dutr, H. BRUCE, Atlanta DUMONT, AlLAN E., New York DUNEA, GEORGE, Chicago :PUNN, JOHN T., Charlottesville, Va DUNPHV, J. ENGLERERT, San Francisco DURKAN, JAMES P., Baltimore DYCH, PETER J., Rochester, Mino E \ErUILC, ARTHUR S., San. `Valley, i&:ho EARLE, DAVID P., Chicago ECHENHOFF, JAMEs, Chicago EDELMAN, IsADoRE S., Sans F;a~c.scu EnGERTON, MILTON T,, Baltimore LDSALL, GEOFFREY, Boston Fns~LL, JOHN T., Cambridge, Mass EDWARDS, JESSE F., S~. Paul EDWARDS, W. S~ERLtNG, Birmingham, Ala FFFLER, DONAI.D B., Clcrelanid EGER, EDSI0ND I., H, San Fnanis~sco F.IsrNisErnG, I lION, Baltimore .ELAM, JAMES 0., Chicaao FIKEs, JOEL J., Baltimote - ELKINS, HARRY K., Los Altos, Calif EeLIOTT, D.SNJEI. W., Pittsburgh ELLIOTT, FRANK A., Philndelphia ELLIS, F. HENRY, JR., Rc.chcsten, Minri ENGISRING, NORMAN H., Milwaukee ENGEL, GEoRGE L., Rochester, NY ENGEL N!.~i, KARL, Bethesda, Md EI'~c:Lis!-1, HARLAN, Danville, Ill EpsTrtrsT, F.RHST, San Matec, Calif EPSTEIN, ERVIN H., Oakland, Calif EPSTEIN, FRANKLIN FL, New Haven, Conin. EPSTEIN, rREDERTCK Ti., Ann Arbor, Mich EI'SrEIN, J~ciN H,, ~ati Francisco Ec\ssI~'.~, A. (.,~lI5,,t.f Cleveland hs~t-' SA, PAUL F, tl.ochestet, Minri }~~iEttI.Y, JAMES A., Chicago Es'u:s, ED'~cARD H., jrc., Durham, NC Ev~ouis, Ci-n.cRLFs ~l., Cleveland EYT.ER, \\ ILI,,IAM B., F.~itEv, JoHN L., Be~hesda, Md `FAIR BAIRN, JOHN F., II, Rochester, Mini 1A~RBANi:S, \~IRGiL F., 1~chest r, Mian fAJ~tNs, STCt.-sN S., Anti Arbor, Mkh FsaAH, ALFRED F., Syracuse. NY FARNSWORTH, DANA L., Cambridge, Mass PARR, LEE F., Berkeky, Calif F~iusow, JOSEI'H H., New York FEIGENBAUM, HARVEY, Indi'arapulis FEINSTEIN, ArYAN R., N..nv Ha~en, Corn FELDMAN, HARRY A., Syracuse, NY FERGUSON, DONALD J., Chicago FERGUSON, JAMES H., Miami, Fla FIELDING, J. WILLIAM, New York TINt AND, MAXWELL, Boston PAGENO="0124" c;AD~OYS, HOWARD I.., New York GAItNSLF.R, tLOX'1~RD A., i3ost~c~ c;ALL, Eo~~.'.~rir, A., Cincinnat GANGAROSA, ETJGRNE J., Atlanta GAIWNEF, FRANK H., Phi Ladephia GARDNER, GEORGE F., BoSton G~rotra Roisio 1 A md i' GATI~'xon 0 G'~\E B Pahinte GEDC U RAS F1IGE Ijus M "vlpoEI GELLER `, tii'~ Ne~c ao GENEST, JM.QUES, Moritr~a1 $ .GERB0nE, FRANK L., San Francisco GLF!oE ~&~W JR Cl ~elv~~ Gr.Eu:1, c;ERA.ID J*, Rochrsnr, ~iirin (. TE\N ~ ~ \ork GLENN, \`cJLUAM W.L New Haven, Coon GLIsNN0N, JOSEPH A., Madison, \\`is GLuEcK, BERNARD, Hartrord, Coon GLLhcK, Ho~.E~: I., Cincinnati GOLD, ELI, Cleveland L `~ 0 \\ I ON $ a I nc SW Gor.rou.cc, Roro:aa A ~.L, ~`~ew `York GOLDSTEiN, FRANZ, Phi~atI&phia GoLDSTEIN, MAURiCE S., Chicago GOlDSTEIN, NORMAN P., Rochester, Minn GOODRICH, JACK K., Dorliarn, NC GooDWIN, WIlLARD F., Los Angeles GORDoN', ARcIIER S., Albuquerquc,NM GoIwoN, BERNARD I., San Francisco GoRHA~f, GEORGE W., New `York' GORLIN, RICHARD, Boston GOTTSCHALK, CARL W., Chapel Hill, NC GOTTSCHALK, PAUL G., JR., Rochester; Mrnn GRACE, WILLIAM J., New York GRAErrINGER, JoHN S., Chicago GRAHAM, JOHN R., Boston GRALNICK, HARVEY R., Bethesda, Md GREEN, HAROLD D., Winston-Salem, NC GREENE, DAVID G., Buffalo GRENFELL, RAYMOND F., Jackson, Mis~ GRIE~'a, MELVIN L., Chicago GRIFFiTH, GEORG.E C., Los Angeles GRISHMAN, ARTHUR, New York GROSS, Ro~sEitT F., Boston GRO\E RAc\fUSS3~N MOR1 .i Boston GRuPP, GUNTHER, Cincinnati GUILD, WARRF' R., Boston GULYASSY, PAUL F., San Francsco GUNNAR, ROLF M., Chicago GURDJIAN) ELISHA S., Detroit GuTHRIE, ROBERT, Buffalo GUTTMACHER, ALAN F., New York Gux, ERNEST P., San Francisco HALLENBECK, GEORGE A., Rochester, Minn NAMBY, WAI.L ACE B., Cleveland 1-L'~MILTON, WILLIAM K., San Francisco HAMMON, WILLIAM M., Pittsburgh HAMMONt~, F. CUTLER, N~w York HAWES, LISISURN C., JR., Jackson, Miss \ POErRI M III 1 DC HaRos' JA\ E T~ J4c1 son Mi s II R~ EN D\~ te `31 E Poston HARPER, HARoLD A., San Francisco HkIIIR PAul \ Chca~n HARRiS, JOHN B., San Franciseo HARRISON, DONALD C., Palo Alto, Calif HARRISON, J. HARE WELL, Boston HARTRLOGE, VIRGINIA B., Rochester, Minki HARVEY, A. MCGEHEE, Baltimore 5596 COMPETITIVE PROBLEMS IN THE DRuG INDUSTRY }i\1LY KNO~H Sin }rarn SW FISCH, CHARLES, Indianapolis F ~LHLi~ ER' aT Rich'nend Va 1 P01 kLF ~ P Ne'. `x ork F1L1~~II~RA, NICFIOL.A.s J., Bo~ton FI.ARSHItI.M, ALFRED B., tThicago Fcooo CrI.~RrFsA \CV. IC I I'OLDES, FRANCIS F., New York For.p.y, JOSEPH M., CLeveland FOOTE, FRANK W., JR., New York FoItr, STARR, Ja., Ciricinnat.i rO~D1R~\ jot S DaIl s FORSELASI, PETER H., San Francisco FOITtSTER, FPANC1S M., Madison, Wis FOWLER, N0BL ii 0., Cincinnati * Fox, HENRY M., Boston Fox IRWIN 3 Mmnc ~ 0~ FRASER, HAvE LOCK F., Indianapolis FRAWLEY, THOMAS F., St. Louis FR~DEIUCKSON, D0N.\LD S., Bethesda, Md FREEDEERi~ A. STONE, Boston FReEDMAN, DANIEl. X., Chicago FREEDMAN, Puu,ir', Chicago `FRrrEioaN, RlcH,~RD B., \Vasliington, DC N \X ALT~i los Alto., Calif FREL, EMIL, HI, Bethesda, Md FiEIREICH, EMIL J., Houston Fx~oMoNx.SMLTH, KENNEl ta, Brookline, Mass FRENCH, ARThUR B., Ann Arbor, Mich FRF.NKEI.., JACOIS K., Kansas City, Kan * FREYFSERG, RICHARD H., New York FRIEDMAN, GERALD, New `fi~rk FRIEND, DALE GJ,~., Boston' ERSEtEN, RrnoiERrAitr F., Wlnnipcg FURCOLOW, MICHAEl. L., Lexii~~ton, Ky Fuam, JACOB, New York *FYLER, DONALD C., Boston PAGENO="0125" HASTiNGS, DONALD W., Minneapolis HAUBRICH, WiLLIAM S., Detroit HAIISER, HAROLD B., Clevdand HAYES, JACK, Atlanta HAYES, WAYLAND J., Jic, Atlanta HAYES, ALVIN B., Rochester, Minn FIAYNES, HARLEY A., Bethesda, Md IrAYNIE, GoRDoN D., Portland, Ore HAYI~IIE, T~t.~s P., Houston HEATH, ClARK W., Medford, Mass HENRE, EDWARD J., Nt~w York HELFMAN, RIcH,&Rn J., Coral Gables, Fla HErJ.ER, PAr.~J., Chkago HELoERN, MIlTON, New York HELSPER, JAMES T., Pas,ikna, Calif IIEI.WIG, ElSON B., \Vashington, DC HENDERSON, DONALD A., Atlanta HENDERSON, EDWARD S., Bethesda, Md HENKE, WILBERTJ., St. Paul HENNESSY, ALBERT V., Ann Arbor, Mkh HERZ3ERT,VICTOR D., New York HERNDON, CHARLES H., Cleveland HERNDON, C. NASH, \Vinston-Salcrn, NC HFRTIG, ARTHUR T., Boston HERTZ, Roy, Bethesda, Md HICKMAN, JOHN B., Indianapolis HIGGINS, JosEPH J., Philadelphia Hit I., FRANK D., San Francisco HINMAN, FRANK, JR.,. San Francisco HIRSCHFIELD, ALEXANDER H., Detroit HITCHCOCK, CLAUDE R., Minneapolis HOAGLAND, ROBERT J., Atlanta HODGES, FRED J., III, BaltinaoLe HOFFMAN, FRANCIS H., Philadelphia }1OI.DEN, WILLIAM D., Cleveland HOLLAND, JAMEs F., Buffalo FIOLLANDEre, JOSEPH L., Philadelphia HOLLANDER, `WILLIAM, Boston HOLLISTER, Li~o E., Palo Alto, Calif HOLM ES, RICHARD A., Ba!timore H000SrRATEN, JAN, Winnipeg HooK, EDWARD W., New York HOPKINS, ROBERT W., Cleveland HORAN, LEO G., Memphis HOROWiTz, HERBERT I., New York FIORSTMANN, DOROTHY M., New Haven. Conn HOUDE, RAYMOND W., New York HOuGIE, CECIL, Seattle HOWARD, FRANK A., Boston HOWARD, FRANK M., JR., Rochestei~ Minn HOWELL, DAVID S., Miami, Pta ROWLAND, WILLIAM S., New York HOYT, WILLIAM F., San Francisco ilsiA, D.~vio Y., Chicago HUEBNER, ROBERT, J., Bethesda, Md HUFNAGEL, CHARLES A., Washington, DC DOMES, CARl. \V., Washington, DC HUGHES, EDWARD C., Syracuse, NY HUNT, JAMES C., Rochester, Minn HUSSEY, CLARA V., Milwa~ikee HUTCH~ISON, GEoRGE B.; Boston INGALLS, TIEoDoRI~ H., Framingham, Mass ISBELL, HARRIS, Lexiiigton, Ky IVINS, JOFIN C., Rochester, Minn J JACKSON, DONALD D., Palo Alto, Calif (deceased) JA~SON, DUDLEYP., Baltimore JACKSON, GEORGE C., Chicago JACOBSON, BERNARD M., Boston JACOBY, J. JAY, Philadelphia JAMES, THOMAS N., Detroit .JANOWITz, IIENRY D., New York JENKINS, H. DALTON, Denver JILI.SON, OTIS F., Bangor, Me JOHNS, RIcIARD J., Baltimore JOHNSON, RALPH E., Bethesda, Md JOHNSoN, RICHARD T., Cleveland JOhNSTON, C. CONRAD, Indianapolis JOHNSroNF., DOUGLAS E., Rochester, NY JOSSILYN, JItENE M., Phnenix, Ariz JuDE, JAMES B., ~ural Gables, Fla JLJIutGFNS, Jonaa I., Rochester, Minis JULIo N, Oa~'teNo C., Chicago K KAISER, HAROLD B., Minneapolis KAYSER, IRVIN H., Salt Lake City KAMPMRIFR, RuDolpH H., Nashville, Tenn KANTRO'~fl'Z, ADRIAN, Brooidyn, NY KAPLAN, JEItROLD M., Heidelberg, Gernaanyl KkRK, ROBERTM., Chicago KARNES, WILLIAM F., Rochescer, Minn KASIVR, CAP.OL K., J.os Angeles KASS, EDWARD H., Boston KASShRER, JEROME P., Boston KISSSRIE L, ROBERT S., Chicago KATTUS, ALBERT A., Los Angeles KATZ, RONALD L., New York KAUFMAN, I. CHARLES, Brooklyn, NY KAUHMAN, M. RALPH, New York KAY, EARLE B., Cleveland KaARNS, THOMAS P., Rochester, Minis KEELEY,JOMNL., Chicago * KEMPE, C. HENRY, Denver KNNADY, JOHN C., Torrance, Calif RENT, F.DWARD M., Pittsburgh COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5597 PAGENO="0126" 5598 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY KETCHAM, ALFRED S., Bethesda, Md KILUP, THOMAS; Ill, New York. KIMMELSTIEL, PAUL, Oklahoma City. KI.RKENDALL, WALTER ~L, Iowa City KIRSHIN ROBERT Chi.tgo KIRSNER, JOSEPH B., Chicago KLTTLE, CHARLES F., Chicago KLEBANOFF, SEYMOUR J., Seattle KLEEMAN, CHARLES R., Los Angeles KLEIN, DONALD F., Glen Oaks, NY KLEIN, EDMUND, Buffalo KIIGMAN, ALBERT M., Philadelphia KNIGHT, J. VERNON, Houston KNOBLOCH; HTLD.& R., Chicago KNOWLES, JoHN H., Boston KNOX, JOHN M., Houston K0IB, LAWRENCE C., New York KOLEF, WILLTA2~f J., Salt Lake City Koop, .CHARLESE., Philadelphia K0RELITz; BURTON I., New York Koss LEOPOLD G., New York KOTIN, PAUL, Bethesda; Md KOUNTZ, SAMUEr. L., Palo Alto, Calif KOZOLL, DONALD D., Chicago KRAKOFF, IRWIN H., New York KRALL, LEo P., Boston KRAMER, JOHN C., Corona, Calif KRAUSE, RIcHARD M., New York KROOTH, ROBERT Si., Ann Arbor, Mich KRuPI', MAR us A., Palo Alto, Calif KUBIE,.LAWRENCE S., Sparks,Md KUHL, DAVID F., Pittsburgh KUHN,.LESLIE A., New York KURLAND, GeORGE S., Boston L 1 AL It A\ I HO V I .cInn Arbar lu.h LAMBERT, EDWARD H,, Rochtster, Miun LAMBFRTSF'~, CHRISII'N J 1 hiLd l~ hi LANDAU RICHA DL Ch~aco L.kNDIs, JAMES B., Philadelphia LANGFr~DORF, RIcu.Aiw, Chicago LANGMCIR, .ALRXANDLR D., Atlanta LAPIDES, JACK, Ann Arboi, Mich LARac;Ft, JOHN II., New York * 1.ARMON, WILLIAM S., C.hkago LARSON, CARROI.I. B., Iowa City LASTEII, lEONARD, Be~ic~da, Md LATTES, RAtFAE i,r, New York J.ArrlMrm, Joiu~r K., New York LAULER, DA' 0 P., Boston LAWRENCE, JOHN S., Los Angeles LAWSON, ROBERTB., chicago LEADCETTEIS, WYLAND F., Bos~n LEEVY, CARROLL M., Jersey City, NJ LEHFRLDT, HANS, New York Lan HOLD, STANLEY L., Chicago LEMANN, JACoB, Ja., Milwaukee LFMBEKG, Lows, Miami, Fla Lr~rNoN, EDWARD J., Milwaukee. LF.~LEY, DERWARD, JR., Milwaukee LaPPER, MARK H., Chicago LE SlIER, DEAN A., Detroit LEssENDEN, CHESTER N., JR., `Topeka, I(aa Lay, MAURICE W.,Chicago LEVINE, HERBERT JR., Boston. LEVINE, JEROME, Bethesda, Md LEVINE, RACHMIEL, New York LFVINSKY, NORMAN G., Boston LEVITAN, ALEXANDER A., Bethesda, Md. LEVITT, LaRo~ P., Chicago Lawas, JESSICA H., Pittsburgh LIDD, DAVID, \Vashington, DC ~ LIDDLE, GRANT W., Nashville, Tenn LIEBOW, AVERILL A., New Haven, Conn L.IEF, HAROLD I., New Orleans 1ILIF~.,FELD ABRAIIA\I M Baltimore LILLINGTON, GLEN A., Palo Alto, Calif LIND, JAMES F., Winnipeg LINOSKOG; GUSTAF F., New Haven, Corin LINMAN, JAMES W., Rochester, Minn LINTON, ROBERT R., Brookline, Mass Lipp, WILLIAM F., Buffalo, NY LIPSETT, MORTIMER B., Bethesda, Md LITMAN, ROBERT F., Los Angeles LrrrMANN, DAVID, West Roxbury, Mass LITWAK ROBERT S New York LIVINGOOD, CLARENCE S., Detroit LIVINGSTON, SAMUEL, Baltimore LoBrT~,,WALTER C., JR., Portland, Ore L0CKIARDT, WILLIAM F., Alpine, Tex LOGAN, GEORGE B., Rochester, Minn LOGUE, ROBERT B., Atlanta LOKEN, MERLE K., Minneapolis LORINCZ ALLAN L., Chicago LOUIS, JOHN, Chicago LOUNSBURY, B. FRANKLIN, Chicago L0URI `~ DO'.,ALD B New York LOWELL, FRANCIS CABo~I, Boston LOWMAN, EroiaARD W., New York L0WN, BERNARD, Boston LTJBRAN, MYER M., Chicago LUISADA, ALDO A., Chicago LUKES, ROBERT J., Los Angeles LUTZNFR, MARVIN A., Bethesda, Mel LYoN, AlAN F., Bronx, NY M MACCARTY, COILIN S., R~cli~~er, Mimi MA IN `~ jOrPI B ba ~ u'a NY ~a4~cM lION Bi r.' l3os n MAC}'HFRSON COLIN R Con I u Ohio MAGNIJSON, HAROlD J, Ann Arbor, Mida MAilER JOHN F., Washington, DC PAGENO="0127" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5599 * MANEGOLD, RICH.'Jw F., Bethesda, Md MASON-BAHR, Prnr.ip E.C., New Otleans MARBLE, ALEXANDER, Boston MARCUS, CYRU. C., New York MARCUS) STE WAIT L., New York MARN, VERNON H., Boston MARRIOTT, HENRY J.L., Sr. iktec~bur~, Fla MARSHALL, BRYAN F., Philadelphia MARSHALL, JOHN A., Bethesda, McI M.ARSFIAI L, VICTOR F,., New York MARTIN, Gonno:'t M~ Rochester, M~nn MARTIN, JOHN T., Rochester, Mlr1n MASON, DeAN `1., Bethesda, Md M..kssuMr, R.~smo A., Washin~t&, DC MASTER, ARTHUR M., Nevi York I MASTERS, R0NAI.n F., Des Plaines, Ill MASTERS, WILLIAM FL, St. Louis MATTJNGLY, IHOMAS W., Itheada, Md MAYNE, JOHN G., Rochester, M~nr: MAXWELL, SaM B., Indianapolis MCCARTY, DaNIEL J., Chkago McCis COlE, JOHN A., London, Ontario MCCURDY, PAUL R., Wash iogton, DC MCDONALD, J0FIN,C., Buffalo MCDONNELL, EDMOND J., Baltimore MCDOWELL, FLETCHER H., New York MCGOON, DWIGHT C., Rochester, Minn MCGREW, ELIZABETH A., Chicago Mc HUGH, PAUL R., New York MCINTOSH, HENRY D., Durham, NC MCKAY, DONALD G., New York MCKEGNEY, FLANK P., New Haven, Conn MCKUSICK, VICTOR A., Baltiniore MCLENNAN, CHARLES E., Palo Alto, Calif MEACHAM, WILlIAM F., Nashville, Turin MEDOV~, Haiu~y, Winnipeg MEIKLEJOHN, GORDON B., Denver MELTZER, LAWRENCE F., Philadelphia MENDELOFF, ALBERT I., Baltimore MERRILL, JOHN P., Boston MERRITT, H. HOUSTON, New York MEYER, JOHN S., Detroit M~IYERS, RUSSELL, Williamson, WVa MIALE, JOHN B., Miami, PEa MILlER, DANIEL G., New York MILLER, DONALD S., Chicago MILLER, JOHN M., Houston MILLER, ROBERT W., Be~hesda, Md MILLICHAP, JOSEPH G., Chicago MILLIKAN, CLARK H., Rochester, Minn MILLS, DON HARPER, Los Angeles MrrcaELL, ROGER S., Denver MOE, GORDON K., Utica, NY MOERSCH, HERMAN J., Rochester, Mian MOERTEL, CHARLES G., Rochester, Minn MONTGOMERY, MAX M., Chicago MOORE, CARL V., St. Louis -~ MOORE, FRANCIS D., Boston MOORE, GEORGE F., Buffalo MORGAN, ALFRED P., Boston MORGAN, HAROLD S., Lincolo, Neb MORRIS, GEORGE C. JR., Houston MOSLEY, JAMES W., Atlanta MOSS, ARTHUR, J., Rochester, NY Moss, WILLIAM 1., Chicago MOST, HARRY, New York MOTLEY, HURLEY L., Los Angeks MOTULSKY, ARNO G., Seattle MOYA, FRANK, Miami, PEa MOYER, CARL A., St. Louic MOYER, JOHN H., Philadephia r4UDGE, GILEERT H., Hanover, NH MLTENSTER, JOsEPH J., Chica;o MUFSON, MAURICE A., Chicago MULI.INS, J. FREDERIC, ~alveston, Te:e MUSTARD, WILLIAM T., Toronto MUSTER, ALEXANDER J., Chicago MYERS, WARREN P. LAIRD, New York MYERSON, RALPH M., Philadelphia MYMIN, DAVID, Winnipeg N NACUMAN, RALPH L., New York `NADAS, ALExaNDEi~ S., Boston NADER, PHILIP R., Atlanta Narro~, Geocee L., B~StOn NA~rHANsuN, LARRY, Boston - N~LscN, DONALD K., Los Ar~~eles Ncr BIT,,REID M~, Ann Arbor, Mich NEW, PAUL F.J., Boston NIcE, CI-ARLE5 ~\f., JR., Nu;~ Orleans Nicocore, DEMETRE M., Minneapolis NixoN. Rosri-ar K., Deiruit NOPNL, k'i{N H., Philade~phia NOEIIREN, THEODOtE H.. Buffalo NOECROSS, BERNARD M., Buffalo Noiu~s, ARTHUR L., inapolis Nortals, CHARLES M., Philadelphia Cl OBRYAN, ROBERT M., Detroit OCHOTA, LESZEK, Wheacon, Md OCHSNER, F. AJ.TON, New Orleans OJLMANN, ROBERT G., Boston OKEN, DONALD E., Chevy Chase, Md OLANSKY, SIDNEY, Atlanta OLDENDORF, WILLIAM H., Los Angeles OLSEN, ARTHUR M., Rochester, Minn * ORGAIN, EDWARD S., Durham, NC OSSERMAI'~, KERMIT E., New York OSTRANOER, LEON D., JR., Ann Arbor, Mich _________ PAGENO="0128" 5600 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY OWEN, CHutLEs A., JR., Rochester, Minn. OWENS, JAMES CUTHBERT, Denver P PACE, WILLIAM G., Columbus, Ohio PACK, GEoRGE T., Ne~~ Yoik PAGE, IRVINE H., Cleveland PALMER, EDDY D., Montclair, NJ PAPPER, EMANUEL M., New York PARKER, BRENTM., St. Louis PARMLEY, Lo~.tN F., Ja., Washington. DC PAFRISH, HENRY M., Columbia, Mo PARROTT, ROBERT H., Washington, DC PARSONNET, VIcTOR, Miliburn, NJ PAYNE, BEVERLY C., Ann Arbor, Mich PAYNE, W. SPENCER, Roches~r, Minn PELLEGR1NO, EDMUND I.)., Stony Brook, NY PELTIER, I.EONARD F., Kaucas City, Kan PERKOFF, GERALD T., St. louis PEELMAN, FRANK, Portland, Ore PLR.LOFF, JOSEPH K., Washington, DC PERRY, H1~Roto, Detroit PETERSDORF, ROBERT G., Seattle PZIILLIPS, ANNE W., Boston PHILLIPS, OTTO C., Pittsburgh PIERCE, JOHN A., St. Louis PILLSBURY, DONALD M., Philadelphia PINKUS, FIERMANN KB., Detroit Paa'~CANO, NICHOLAS 3., Le~ington. Ky PISAN1, JOSEPH N., Washington, DC PiscxorrA, ANm0NY D., Milwaukee Psrrs, NEAL C., Bluifton, Trid PioriuN, STANlEY A., Philadelphia PLUM, FRED, New York POLESKY, IIERBERr F., Minneapolis POLITANO, VICTOR A., Miami, Fla P0I.I.AK, VICTOR E., Chicago POOL, 3. LAWRENCE, New York PooL, \~VINFORD H., Augusta, Ga POPPER, HANS, Nenv York PoRTER, GEORGE A., Portland, Ore PorrER, EDITH L., Ft. Myers, Ha POWER, GORDON A., Philadetphia PRICE, HENRY L., Jr,., Ph[ladelphia PRICE,JOI*LND.,Vancouver, BC PRIEN, EDWIN L., Newton, Mass PRINCE, ALFRED M., Ches!~ire, Conn~ PRYSTOWSKY, HARRY, Gainesville, Fla PYLE., Huoir N., Bos~3n PYLE, JAN R5GEf~, San Fraucisco QUIGLEY, TIioi~[As B., Boston QUINN, EDWARD L., Detroit QUIN:'i, JAMES L., Chicago RABINOVITCH, JACOS, Brooklyn, N? RAD50N, S. MILTON, Los Angcle3 RACKEMANN, FRANCIS N., Boston I~AE, JAMES W., JR., Ann Arbor, Mkh RAMMELK.AMP, CHARLES H., Cleveland RANDALL, CLYDE L., Buffalo RANDOLPH, MARTIN F., Danbury, Conn RAPAPORT, FELIX T., New York Ra~, ROBERT D., Chicago RECANT, LILLIAN, Washington, DC REDDING, JosEPa-L S., Baltimore REECE, RICHARD L., Minneapolis REED, HOWARD N., Winnipeg RE ES, REEs B., San Francisco REIMANN, HOBART A., Philadelphia REPPERT, EDMuND H., JR., New York RHOTON, AlBERT L., Rochester, Minn RICHARDS, DICKINSON W., Netr York RICKETTS, HENRYT., Chicago * RIDER, J. ALFRED, San Francisco RILEY, RICHARD L., Baltimore ROBBINS, FREDERICK C., Cleveland ROBINSON, HARRY N., JR., Baltimore ROBINSON, WILLIAM D., Ann Arbor, Mich ROCK, JOHN, Brookline, Mass RODDARD, SISI0N, Duarte, Calif RODMAN, THEODORE, Philadelphia ROGERS, DAVID F., Nashville, Tenn ROGERS, W. GERALD, Oklahoma City ROMANO, JOHN, Rochester, NY ROMANSKY, MONROE 3., Washington, DC ROME, HOWARD P., Rochester, Minrl ROPES, MARIAN W., Boston ROSE~ BRAM, Montreal Ross, JOHN, JR., Bethesda, Nd Ross, JOSEPH C., Indianapolis Ross, WARREN B, Boise, Idaho ROTHSCHIth, ED~.tuNu 0., New York ROUGHGARDEN, JEAN W., Nashville, Teon ROVNER, t)AVID R., Ann Arbor, Mich Rowa, CAROLYN W.,Galveston, Tex RowE, GEORGE G, Madison, Wis ROWLAND, LEWIS P., New York RUBIN, ALBERT L., New York RuIIIN, PHILIP, Rochester, NY RUDINY, MIlTON B., Los Angeles RUESCH, JURGEN, San Francisco RUGS, DANIEL A., Chicago RUPE, ClARENCE F., I)rtroit d RU5K, HOWARD A, New York RUSSELL, PAUL S., Boston RYAN, KENNETH J., Cleveland S SADIN, ALBIRS B., Cinc;nn Ri PAGENO="0129" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5601 S4F3Ij1ON D ~SI1) C J~ Dun in N( S1I'JL IA NAHU t ~` B' he u~ Md s~ ~ IN \Iri v~ Cht a~ I S~ruM~ ~ NOR ~AN F J SADUSK, Jos~~i~i F., Detruit * .~ ~ S Paio Alto, Calif SAFAR, Pi~1LR J., Pi~sbur~ii S~r~r RoBn'cr G., Rochester, Minn S~us, A!)OLP1~ I.,, Iowa City' Sxu~r~ ~`rr!IA~t, Boston S1~~.uir, PF1ILD', Miami ~ VIa S'.LVER~ 1-JENRY K., Denver SAMSON, PAUL C., Oakla~-d, Calif SEvER, LARRY B., Washington, DC SANDEERO, AvERY A., Buff,ilj SiMs, JON LEROY, Mad~on, Wis SANDOERO) EUGENE C., FakI /alio, Calit SINCLAIR, JOHN C., New York S~rou. 1 P D Ii S i-~ii~i ,`~ G~oi ci. I Gawe 111k rN Sk'\ILILI TI-OIl cV ~ \o -~ Ssvm T'MFSC /iriArbo `~licn Sw ~r Jo~r~ F D cM S r~ Ir is. Scit VFRGIL N Ann r\rbo ?~`~ S LI taR RICHIRDD Mirs~ie1d `~cis SIFILI AIE'c-~'~o Nia~iri Li's NY S o [POTU I ro La in.,ton R~ SLOAN HLRI3 RTF JR Ann tub ~v1 cli S HAl/ lRIcI\ J D~ ro t SLOt~i Sm-IDo\ J Chn~c SCHAT7K!, RICHARD, Brookline, Mass SMImr, GEoRc;E V., Brookline, Mass Sci-i Ii- H-\~oLD G Ito' dop i SMITH JACI- so-.~ / Hin~ Ill SCHPRF, DAVID, New York SMIrl-i) ROGERT ., Boston Sci.i~i-t- GILBERT M., Cincinnati SHun, T1FODORE C., Philadelphia Sç~ r~-i LION Cincinlalt SMrO it Cot I) N I Mit c .ut ~ S.. ~ilf E~ ~OnQPT A N v~ One r~, SOFt I Rit JOHN S rIo on ~ 001 H ~N FLARo~ D M hini.~ Ill SonIFLr H o OLD A 0 -~ Scni. N ROBERT Hiucs Ill So &i Jo i-pu B hi ~uu ScintOlOiR HE'.,RY A B attlcbarc Vt So~.orori- Li ON Pi.th~sl1l Md SCHULH IN Jr ROME I N `a ~ ork SONNI- Fil ~ La ~r ND T~J Bethod Md SCHUM ~CHLI GEORGF i-~ Pu IiriEtufl Vt Soi TI-IA CIIFI Ii ~ I Ne'a \ or' SCHUM Id-rI HARrIS h Jr md Yipolls Si F) o.xo M BtooLl1n N Sci-n~\c~-. 1 LONARD M \Iinne Dolls SPARk- Il N Do- lID P Ol~ ,~ i \Va Ii SCH'EAB POBERTS Boston ~ y Nt D I Scii'a Al I? Ii SQ IS Bronx NY .. FR F ~ ~. ~ C N o SCHWARTZ, WILLIAM B., Jr~., Boston 5pENCER, `~ILLIAM A., Houston SCOTT, ROLAND B., Washington, DC ~F1EGEL5t~-;, ANN.s R., New York - SCOTT ~VILLIA\( WALL'CF BaRu ore Su-~ NI SI k-I \~ Minine.i1 otis SCRIBNER BELDING H Seattle Sr -~ P \L~I N, (li p 1 Hill NC SEEGAL D&VID Ni. i~ork STAFIUR Foas oS I timo C SEEvI RS M IL ElI H Ann Arbor Mich St ~s iv ~`-. \~ 01 LU Ci o ~ .ttle Src IL BERN sito I Philadeiphil SIA IV) ii CM / 1~tlo At o Calif SItGAL, MAURiCE S., Boston STANSEL,'HORACE C., JR., New Haven, CQrin SELZER, ARTHUR, San Francisco STARE, FREURICK J., Bosto~i SEVER, JoHN L., Bethesda, Md STARR; Ai.iso-~-,.i-ordand, Ore SHAMBAUGH, GEORGE B., JR., Chicago STARZI., ThoMas B., Denver SHANDROM, EDWARD, Santa Ana, Calif STATES, JoHN D., Rochester, NY SHAPIRO, ALVIN P., Pittsburgh STEAD, WILLIAM W., Milwaukee SHARP, JOHN T., Hines, Ill STERNER, JAMES H., Rochester, NY Sa- AW FD~VARD B Sin Fr-inc sco STET-ILN DEWI-n JR Ness Brunsvick NJ SI-SAW M RIhI `x ~ Ann Arbor Much STEVENS PAL I \f Le\in~ron KI SFIELINE GLENN £ San Francisco STEVENSON CH~RLCS S * Dettoit SHES IEI ~~AL1LR B Philadelphia STEWIRT BRLCE H Cleselind SHEP SuELOO\ G Rothcstcr ilinn STFWIE JOHN A Atlalti S IFR'I-INT \`IILITl\l B Nev ~ork STILWELI GEORGE G Rochester Minn Smi~sr~y, SOL, St. Louis STU~CHF1ELD, FRANK B, New York Si IKIN MJCII IL B Ph li1i t1bi i S1RANDJORD NELS M Kinsas (its Kan S1-HNEFIEI.D, HENRY R., San Francisco STURIM, HOWARD S., Pittsburgh SI-lntKEY, HENRY C, Birmingham. Ala SUGAR, OSCAR, Chicago SHOEMAKER Wn LI-IM C Cnica~ St I11VAN JOHN F BOStOn Sito'ni. lIo'a ~w B 0' ihami City SUM IERSKILL \\ ILl tAM H J ~*FiUF"NFR\N Barb do Wts Indic Rochester Mtnn SHuetN S HERUEIU Los Ar ,e'c SURAWICZ BORIS I P\ington K} 81-280 O-~S9---ipt 14-9 PAGENO="0130" 5602 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY SuTToN, WILLIAM L., Rochester, NY SWAN, HAROLD J., Los Angeles SWANK, Roy L., Portland, Ore SWEAR!NGEN(ALFRFD G., Ft. Wayne, hid SWEET, ROBERT B., Ann Arbor, Mich SWEET, WIt LIAM H., BOston SwatNsoN, Oav,~, Chica~!o SwLs~R, Scorr N., East lansing, Mich SZILAGYI, 1). EMERICK, Detroit TALMACE, DAVID W., Denver TAPLIN, GEoRGE V., Los Angeles DAYLOR, WARREN J., Maiden, Mass `thoMAs, l)UNcAN P., Boston THOMAS, Louis B., Bethesda, Md THOMPSON, JAMES R., Sao Frandsco THOMi'SON, WALTER AL., New Ybrk THORN, GEORGE W,, Boston TOBIN, JOHN P~., JR., Chicago Tou~rAN, MAURiCE M., Boston `l'RIMELE, GroRnit X., Kansas City, Mo TUFFANELLI, DENNY L., San Francisco T1JMLJLTY, PruripA., Baltimore TURINO, GERARI) M., New York TUTTLE, RO~.E}tT L., \VinstonSale;n, NC TYLER, ED\c'ARD T., Los Angeles TYLLE, FLANtZ 1!., Salt Lake City TYLER, JOHN M., Boston ULFEWER .HOW.sRo, Boston Uu.ERY, JOHN C., Columbus, Ohio Ut'.roert, P~uJL N., Miami, Fla UR.IIACH, FREoRRICK, Philadelphia VArI'KnvI:tus, VAINUTIS K., Detroit VMLBONNA, CARLOS, Houston V~~1.LFF, BERT I.., rJ~~~-~h VANDAM, LEROY D., Boston V~~N ITALLIE, `fnroooio: B., Ne~ York VAN Scoi s', EuoaNa J., Be~hetda, Ml) VARc0;RICHARD L., Minneapolis VAUGHAN, DANIEl. O, San Jose, Ca~f VAUGHAN, JoHN H., Roches:er, NY ~VEIGA, SEcui';DtNo, B.., Chicago VOGEL, JOHN IlK., DerI\er VOGEL, ViCTOR H., Corona, Calit VOLWILER, `<`ADF,..Seattle WAGNER, HENRY N., Ji~., Baltimore \VAGONER, RICHARD D., Rochester, Mnu WAINE, HANS, Boston WALDORF, DONALD S., New York \VALKER, A. EARL, Baltimore WALL ROBERT L., Columbus, Ohio WALLERSTEIN, RALPH 0., San Francisco WALLYN, RICHARD J., Hornewood,.Ill WALMANN, THOMAS A., Bethesda, Md WALTER, CARL W., Boston ~ PAUL H., Nashv.iile, Tents WARNER, HOMER R., Salt Lake City WARNER, NANCY E., North Hollywood, Calif WARREN, JAMES V., Columbus, Ohio WARREN, KENNETH S., Cleveland WARREN, RT~HARD, Boston WARTMAN, WILLIAa~t B., Chicago WATERHOUSE, CHRISTINE, Rochester, NY WATKINS, ARTHUR L., Boston WATSON, CECIL J., Minneapolis WATSON, THOMAS A., London, Ontario WAY, WALTER I,., San Francisco WEHRLE, PAUL F., Los Angeles WElL, MAX H., Los Angeles WEISMAN, AVERY D., Boston WEIss, EARLE B., Boston WEISS, WILLIAM, JR., Philadelphia WENGLR, JULIUS, Atlanta WESTON, JEAN K., Washington, DC WF.STURA, EDWIN E., ~ ashington, DC U WHEELER, RALPH E., Chestnut Hill, Mass WHITE, RAYMOND L., Boise, Idaho WHITEHORN, JOHN C., Baitithore WIGGINS, WALTER S., Chicago * WILENS, SIGMUND L., New York WILKINS, ROBERT W., Boston WILLARI), WILLIAM R., Lexington, Ky V WILlIAMS, GEORGE F., Bethesda, Md WILLIAMS, JOHN RILEY, Gar~usd, lox WILLIAMS, RoGEIt D., Galveston, Tex * WILLIAMS, ROBERT FT., Seattle WILLIAMS, ROBERT I.., Gainesville, Fla WILLIAMS, `~`ILLIAM J., Philadelphia WILLIAMSON, WILLIAM P., Kanse~. City, Kan WILSON, HENRY F., Jrt., Columbus, Ot~io W1NDESHEIM, JoHN H., Bexkeiey, Csl~ WINKELMAN, JAMES W., Van Nuys, Calif WINKELMANN, RICHARD K., Rochester, Minn WINTER, CHESTER C., Columbus, Ohio Wise, ROBERT I., Philadelphia ~X1ISSRMAN, CH.\rtoEs I.., JR., Baltimoro \VUEBSKY, ERNEST, BoJTslo W ` / Woi,r, STLWART c;., Oklahoma City WOl.rF, FREDERICK ~X'.G., \XTashingro.s, DC WACKER, \X'satRFN F., Boston Wox.r'i, JoHN R., Chicavo W 000NER R~vt MORD~I'~ kr &rDOL fICI' Wui IL S F N M P~ ~d Md PAGENO="0131" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5603 W0LLMAN, HAR~Y, Plla -h 0 :a~ ~ ~ ~ C D o~- ~> ~ ~- CD. ~. ~-9. Cl) 0 0 t~rJ ~ L~ ~CJ2 I! ~>g~ ~: ~ ~ ~ ~~FP ~ C~DD0C-~Cl~ ~CDDO)-CD~ (J~ ~0 ~ ~ DC ~ 000 2. CD CD CDCDDQ CD 0r~CDDQ 00 CD C, C)~ Cl) PAGENO="0212" 5684 COMPETITIVE PROBLEMS IN THE DRTJG INDIJSTRY UPDATE ADDENDUM-Continued IND/NDA Drug Status Date Sponsor 3827... Depo MedroI Apr. 16,1969 Do. 5097 Protriptyline HC1 and Perphenazine Jan. 15, 1969 Merck. 5407(L) SU 177,708 Jan. 13, 1969 Ciba. 5535 U-25030 Mar. 3,1969 Uphohn. 16-845 Aristosol Feb. 17, 1969 Lederle. DR. EARL LONG With Dr. IND/NDA Drug Stough Date Sponsor 188 Megestrol Acetate . Feb. 26,1968 Mead Johnson. 191 Provost X Mar. 27,1969 Upjohn. 247 Levoxadrol HCI X Aug. 28, 1967 Cutter. 453 Bandol Squibb. 616 Penicillin Apr. 25, 1968 Bristol. 666 Delestrec injection X Squibb. 1669 Mebutamate Mar. 22, 1968 Wallace. 1760 Polycillin Dec. 11, 1967 Bristol. 1766 BL-P#1011 Mar. 23, 1967 Do. 2290 CL#1190C X Feb. 20,1967 Cutter. 2426 SU#14,542 X Ciba. 2477 Voranil X Do. 2498 Hetacillin X Mar. 13, 1968 Bristol. 3192 THFES Caps X Commercial Solvent. 3196 BA#31531 X Ciba. 3436 W#1673 X Jan. 5,1968 Wallace. 3585 Trobicin injection X Sept. 9, 1968 Upjohn. 3810 Rifampin X Dec. 28, 1966 Ciba. 3848 MJ #1992 X Feb. 25, 1967 Mead Johnson. 4097 U #24, 973 AC 14 X July 7, 1957 Upjohn. 4177 SC#17914 May 10,1968 Searle. 4215 WIN #11, 464 X Sept. 5, 1967 Sterling-Winthrop. 4266 NOR #5204 X Oct. 3, 1967 National Drug. 4285 Dilabron X Oct. 11, 1967 Breon. 4373 Zaroxolyn X Jan. 30,1968 Strasenburg. 4448 Flagyl w/Nystatin X Jan. 8, 1968 Searle. 4524 , Persol Cream Oct. 28, 1968 Carter-Wallace. 4557 MK#835 May 1,1968 Merck. 4643 Megestrol Acetate Feb. 13, 1969 Mead Johnson. 4814 SCH#12i69 X Aug 2,1968 Schering. 4821 NOR #5998-A X May 14, 1968 National Drug. 4871 U#25,927 X June 4,1968 Upjohn. 4884 Anna PM X June 10,1968 Pitman-Moore. 5018 Pentids P #1200 X July 29, 1968 Squibb. 5046 Riker#760 X Aug. 7,1968 Riker. 55096 CL #65,562 X Aug. 29, 1968 Lederle. 5281 RS 3540 X Dec. 16,1968 Syntex. 1407 SU #177,708 X Jan. 13, 1969 Ciba. 56-826 Bandol Nov. 13,1968 Squibb. 50024 Versapen Aug. 16, 1966 Bristol. 50098 Polycillin IM X Nov. 22, 1967 Do. 50102 Dynapen Powder Feb. 19,1968 Do. 50103 Dynapen Injection Feb. 20, 1968 Do. Senator NELSON. In the last sentence, Dr. Jennings states that al- though Dr. Lisook's two investigations of Dr. Stough's operations disclosed no violations of our regulations, obviously, we should be concerned that such an operation can exist under current regulations of FDA and the DBS, and so on. "Aside from the welfare of the sub- jects, the question of validity of the studies may still be raised, espe- cially the possibility of concurrent testing of drugs." It seems to me that that sentence in itself is a strong indictment of the criticism of the methods being used by Dr. Stough when Dr. Jen- mngs says that we should be concerned that "such an operation can exist under current regulations." PAGENO="0213" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5685 Dr. LEY. Mr. Chairman, the most effective measures to correct such problems as exist in the operation there is the peer review committee. That is, to my way of thinking, after reading very, very carefully the Alabama Commission report, the one major item that would have made that event in Alabama unlikely. On the other hand, I do not wish to give the impression that I can or should attempt to place fault at any one level in the complex system that is responsible for oversight of such studies. Dr. Stough had certain responsibilities. The institution or prison had certain responsibilities. The Alabama Medical Society in turn had responsibilities, the sponsor did, and last but not least, we in FDA did. Senator NELSON. What is the legal responsibility of the Alabama Medical Association? Dr. LEY. The Alabama Medical Association does have an oversight function here in terms of the physicians operating within their State. They did become involved in what amounted to a peer review of the Alabama prison operation at the request of the warden. This is the responsibility that they perhaps should have been fulfilling earlier. Senator NELSON. Do I understand, then, that you will make a pro- posal for a peer review committee? Dr. LEY. That is correct. Senator NELSON. Is this under statute? Dr. LEY. This is a part of our regulations. I would propose that this be published as a proposal, with 30 days for comment. We undoubted- ly, as I indicated, will have considerable comment. But I see no reason why the establishment of a peer review structure in experimental drug testing should not and can't be applied in this area. Senator NELSON. Would it be one of the first orders of business, then, that once a final decision to establish peer review committees was made, they will be used in the experiments being conducted in the prisons in this country? Dr. LEY. It would indeed. Senator NELSON. I have read, as I know you have, a very comprehen- sive 22-page-what amounts to a peer review, I guess you would say- report from the Alabama Medical Association, signed by six persons, three of whom are M.D.'s, one a Ph. D. and one a lawyer and another one identified as Mr. Patterson, but not identified as to his profession. Let me say that I read it as a very damning indictment of the conduct of studies by Dr. Stough. The medical group states on page 14: "The work of Dr. Stough and to some extent Dr. Long is, bluntly, unacceptable." I would like to ask, because I could not get it straight from reading the news stories, as I understand it, Dr. Stough was doing drug IND studies for ethical drug houses, correct? Dr. LEY. This is true. Senator NELSON. He was also doing studies for the Division of Biological Standards, is that right? Dr. LEY. I cannot speak for this, because I am not that familiar with the record. I do not believe that that operation, as I believe Dr. Murray told me, was in the Division of Biological Standards. Senator NELSON. He was, as the news story appears, extensively collecting blood plasma. Dr. LEY. This is correct. PAGENO="0214" 5686 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Senator NELSON. Was that for the DBS? Dr. L~ir. T'hat was a source of plasma for use in preparing gamma glcibulm, as the situation was outlined to me by Dr. Murray. Senator NELSON. I realize that is not your field. But it was drawn for DBS, then? Dr. LEY. It was drawn for production of gamma globulin by corn- mercial processors. Senator NELSON. I see. Under the supervision of DBS? Dr. LEY. Again, you are getting into detail, Mr. Chairman, that- Senator NELSON. All right. I will inquire of them. (The subsequent information was received and follows:) U.S. SENATE, SELECT COMMITTEII ON SMALL BusINEss, Washington, D.C., August 13,1969. Dr. RODERICK Munn~v, Director, Division of Biologic Standards, National Institutes of Health, Public Health Service, Department of Health, Education, and Welfare, Washington, DC. DEAR Dn. MURRAY: The Alabama Medical Association and the New York Times have reported on the, plasmapheresis program recently carried on in various state prisons by the Southern Food and Drug Research Company. It is my understanding that Drs. Stough and Long, officers of the company, and their assistants were collecting plasma for use in preparing gamma globulin, an activity which comes under the jurisdiction of the Division of Biologic Standards. It would be greatly appreciated if you.would send me a detailed description of the past and present activities of Southern Food and Drug in this field, your rela- tionship to these activities and your findings with respect to the quality of the work of its personnel. Sincerely, GAYLORD NELSON, Chairman, Monopoly Subcommittee. DEPARTMENT OF HEAL~H, EDUCATION, AND WELFARE, PUBLIC HEALTH SERVICE, Bethesda, Md., September 12, 1969. Hon. GAYLORD NELSON, U.S. Senate, Washington, D.C. DEAR SENATOR NELSON: This is in reply to your letter of August 13th concern- ing the activities of Southern Food and Drug Research Company in relation to the collection of plasma for processing to albumin and globulin. The events re- ferred to occurred in 1964 and we have had some difficulty in identifying the records relating to this matter since our information came to us through the re- ports filed by the processors of the plasma to albumin and globulin. What follows may seem lengthy but this description of the elements involved in the production of albumin and globulin are essential to an understanding of what is involved as far as the safety and effectiveness of these products is concerned. The "biological products" provisions of the Public Health Service Act apply to the safety, purity and potency of such products. In the case of albumin and globulin, which are prepared from human plasma, these criteria are met if the final product is safe, pure and potent. Thus, for example, the residual blood present in human placentas has provided a valuable source of these materials (particularly immune serum globulin) for many years. On the basis of this and other experiences, it has been fully accepted for the past 15 years or more that the method of processing plasma to globulin and albumin renders the final product safe for administration. There is no recorded instance of hepatitis hav- ing developed following the administration of albumin or globulin prepared by the Cohn method used by industry (alcohol fractionation followed by heating developed by Dr. Edwin Cohn and associates during the period 1940-1947). Since the incidence of hepatitis following blood transfusion is 0.1 to 1.0%, it is PAGENO="0215" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5687 believed that a plasma pool used for fractionation, representing usually 1,000 or more donors must have some hepatitis virus in it. There is no way of prevent- ing this. Even if a pooi does contain such virus, it is clear that a safe, pure and potent product is assured by the method of processing plasma to albumin and globulin. Plasma for fractionation is frequently obtained by manufacturers under the so-called "short supply" provisions of the regulations concerning biological prod- ucts. Under these provisions the manufacturer establishes procedures with the suppliers, determines that these are adhered to and informs the Division of Biologics Standards of the arrangements, together with the names of the sup- pliers operating under these provisions-usually a great many sources of various kinds such as licensed and unlicensed blood banks, plasmapheresis centers, blood collecting stations, etc. Personnel from the Division check on these suppliers from time to time to determine adherence to the agreements between the manu- facturer and the supplier which spell out the procedures to be followed. Copies of these agreements are filed with DBS. There are no provisions within Sec. 351 of the Public Health Service Act, which addresses itself only to the safety, purity and potency of final products, for the development of requirements for the protection of the blood donor except as they might affect the safety, purity and potency of the final product. If the donor is injured by the bleeding process used to obtain plasma for fractionation; e.g., by suffering anemia, infection or physical damage, recourse may be made to local laws-laws relating to malpractice, etc. In the case of products where the procedures may affect the safety and purity of the final product, as in the case of blood for transfusion, regulationsare adopted. When the Division of Biologics Standards became aware in June 1964 of the occurrence of a number of cases of hepatitis in the Alabama prison, presumably related to the plasmaplieresis program, it conferred with the National Com- municable Disease Center which collects epidemiologic data on infectious dis- eases, including hepatitis, and attempted to investigate the plasmapheresis operation. However, an on-the-site inspection was not possible because operations had been indefinitely suspended. In order to be sure that the saf~ty of the albumin and globulin had not in some way been compromised, the following actions were taken: (1) An embargo was placed on any lots of albumin and globulin which may have been prepared from plasma pools which contained any plasma coming from this source. This was done on July 2, 1964. The manufacturers complied. (~) Surveillance of hepatitis in relation to products already released to the market was instituted by the manufacturers and by the National Communi- cable Disease Center. Since 1964 there has been a considerable voluntary tightening of the plasma collection procedures used under the "short supply" provisions. These included more frequent inspections by representatives of the manufacturers and the formulation of more detailed instructions to be followed by the supplier of plasma. Manufacturers have provided us with detailed statements of the proce- dures used. Those operations which we have inspected since this time have been satisfactory. Our records indicate that in 1963 three manufacturers of albumin and globulin were receiving plasma from Dr. Stough and his associates. In 1964 there were two. Since 1964 only one manufacturer is indicated as having obtained plasma intermittently from this source. There is no indication from the record to indicate that the plasma supplied by Southern Food and Drug Research Company was not suitable for producing satisfactory albumin and globulin. If we can provide any further information in this matter, we would be happy to be of assistance. Sincerely yours, RODERICK MURRAY, M.D. Director, Division of Biologies Standards. Senator NELSON. You have read the medical association comment, has the FDA done a comparable study in depth of the work being done by Dr. Stough, in the kind of depth that was done by the Alabama Medical Association peer group, so called? PAGENO="0216" 5688 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Dr. LEY. We have very recently completed a detailed review of all results Dr. Stough obtained in his studies in the Alabama prison system. In our context and in our framework-that is, in the frame- work of the investigational drugs followed-comparing his results with other results of other investigators, looking at comparable re- sults from related drugs, and so forth, we find in the sense of a scien- tific investigation no reason to question the basic validity of Dr. Stough's observation. Indeed, in several instances, he was highly criti- cal of drug products because of adverse reactions which he reported and which were reported by other people. So we have conducted a review. But it is not in the context of a commission report. Senator NELSON. Let me understand you-the review was done on the written material submitted to the FDA? Dr. LEY. Right. Senator NELSON. My question is: Has the FDA sent its own team of investigators to do an on-the-spot evaluation of the performance of the protocols he has? Dr. LEY. This we have, Mr. Chairman. Senator NELSON. A team? Dr. LEY. A team. I think at this point, my statement would be very appropriate, because it tells you what we have done. Senator NELSON. All right. So you may wish to have in mind some points raised by the medical association, let me give you a couple of points from there. As to your review and your conclusion as to the adequacy of the written material you have, what's your response to the story in the New York Times that, for example, they are paying the prisoner-he gets paid $1 a day-and I understand from the story that his monthly stipend is 50 cents. It was a strong motivation to get the $1 a day. How can you tell from the studies you reviewed, the written materials sub- mitted to your office, how can you tell that the side effects on these prisoners were reported when the reporter says that one of these prisoners, or maybe more, was sick from the drugs, but declined to report it because he did not want to lose the $1. How do reports from your office discover that? Dr. LEY. Our reports and our investigations do not specifically approach this type of question. This is a question of not only the quality of informed consent, because the money provided to the patient offer an unusual stimulus for him to stay in the program and an unusual stimulus for him not to exercise his right as a subject to with- draw from the experiment if the effects were exceedingly unpleasant or unsatisfactory to him. The points raised in the Times article are more matters of considera- tion by an appropriate peer review group in the Mabama situation. The questions that were raised there are not questions that can be answered by our investigative team of an inspector in a position to visit the ~prison for a day or two. It is impossible to get that type of information by an outsider coming in for a relatively short period of time. The appropriate group for resolving the questions raised in terms of remuneration would be a peer review group. Senator NELSON. What about the question of the prisoner not report- ing toxic side effects which would certainly be critical to an evaluation PAGENO="0217" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5689 of the drug and are not found in your files-the patient who does not report it b&~ause he wants to continue to get the money? Dr. LEY. The basic problem here, Mr. Chairman, is that the remu- neration to the prisoner was too much. This meant that the prisoner had a very strong pressure not to report and not to withdraw from the study. Therefore, he would decline to say that he felt any adverse reac- tion. This is bad for the prisoner in that it exposes him to unnecessary risk, it is bad for our records in that it does not provide us full informa- tion. If the stipend system had been set by the peer review group at a much lower level, there would have been no such insistence on the prisoner's not reporting because he wanted to stay in the study. Senator NELSON. I am going to ask that the full report of the Ala- bama Medical Association study of the use of prisoners for drug trials in Alabama be printed in the record at this point. (The study referred to follows:) THE USE OF PRIs0NEEs FOE Dnuo TRIALs IN ALABAMA INTRODTJCTION Statement of the Problem: It has been well said that while conflict between right and wrong is melodrama, conflict between right and right is tragedy. It is right that the health of the public be protected by drug testing. Following extensive animal experimentation, such as that now being conducted by (or for) all of the ethical manufacturers of pharmaceutical products, there inevitably ar- rives the time when someone has to be the first human to receive the new drug. We strongly endorse the policy of the Food and Drug Administration which insists that in most instances the someone be, not an enfeebled, sick man, but a healthy human volunteer. Who should that volunteer be? We shall shortly return to that question. It is also right that every precaution be taken to safeguard the health of the prison inmates. We believe that this has been done in principle and in policy but that under the existing circumstances, it has not been possible to do so in detail. At first glance, it may seem that there is an inevitable conflict between these two "rights". The major effort of this committee has been directed toward this dilemma. In this effort, we have been aided by the complete support of the gov- erning body of the Medical Association, and by the cooperative attitudes of the Food and Drug Administration, of the State Health Officer, the Montgomerp Advertiser, the members of the Board of Corrections, the Commissioner and staff of the prison system, the representatives of a number of leading pharmaceutical manufacturers, and of a variety of consultants froni inside and outside our State. We wish to thank these groups and individuals. Without such support and cooperation, it would probably have been impossible for us to arrive at any practical conclusions and recommendations. BAOICGROIJND INFORMATION It appears that the Southern Food and Drug Research, Inc. has been operating a research program in the Alabama Prison System since 1962 with the approval of Commissioner Frank Lee and the Alabama Board of Corrections. The president of Southern Food and Drug Research (known between 1963 and 1967 as JEMCO, Inc.) is Dr. Austin H. Stough who is a graduate of the University of Oklahoma and of the Medical College of the University of Tennessee. He conducted re- search programs in the Oklahoma prison system and the Arkansas prison system before coming to Alabama. Dr. In Long who was previously in general practice in Montgomery and who is still prison physician for Kilby Prison is associated with Dr. Stough in providing medical direction for Southern Food and Drug Research. The original emphasis for Southern Food and Drug Research was on a plasmapheresis program but this was discontinued in 1964 following an outbreak of hepatitis which involved 376 prisoner participants with three deaths. (A Public Health Service investigation showed that the outbreak was definitely PAGENO="0218" 5690 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY linked with the plasmapheresis program and a significant break in aseptic technique was found which accounted for this,) In 1963, however, the Food and Drug Administration set for the various drug houses much stricter stand- ards for drug testing and these included a greatly increased demand for Phase I testing (Phase I testing is that done on healthy humans after completion of the animal experimental work). As a result, proficient investigators with adequate facilities were in considerable demand and Southern Food and Drug Research then concentrated its attention in this area. Over the years since `then, the drug houses seem to have been generally satis- fied with what was done in Alabama and the Food and Drug Administration has had no specific complaints although they queried the number of investigations being done at any one time as being perhaps too many for adequate medical supervision by the limited medical staff of Southern Food and 1)rug Research. Internal control over the program by the Board of Corrections and its officers appears to have been limited in amount with the Medical member of the Board (Dr. `McLaughlin) briefly reviewing the protocols for each new drug trial and occasionally mentioning them to members of the Board. Membership on the Board of Corrections is not a full-time position. With their primary interest to attend `to, it could not be expected `that members of this Board be completely and constantly aware of every transaction affecting the prison system at a given time. A `busy physician could not devote the time re- quire'd to properly evaluate the protocols without neglecting his private patient's. The Commissioner an'd his wardens `apparently gave Dr. Stough and his group ready cooperation with very few questions being openly asked. The prison phy- sicians for the other two prisons involved in `the drug testing program (Dr. Ed- wards at Tutwiler an'd Dr. Mracek at Draper) generally required that they be kept advised of new `drug testing programs in their own prisons when these were initiated. While most of the work done by Southern Food and D'rug Research was for private drug companies, other programs were occasionally undertaken for agen- cies such as NASA and on a subcontracting basis for the Medical College of Albany, New York. Conversely, `a very limited use ha's been made by the Univer- sity of Alabama Medical Center of prisoners for drug `trials and the Red Cross has, at infrequent intervals, taken blood from prisoners. In January, 1969, the Montgomery Advertiser-Journal, over the byline of Mr. Harold B. Martin (Editor and Publisher) launched a series off attacks at the drug `testing program `being conducted in Alabama prisons. In addition to hint- ing `at excessive profits being made, `at the expense of `the health of the prison- ers by Sou;thern Food and Drug Research, certain `additional medically orien'ted accusations were m'ade: 1. Although `the inmates signed a waiver they were not told of t'he possible effects of tests while the prisoners' strong need for extra money largely invalidated the requirement `of informed consent. 2. Physical examinations were not being performed before each program `as required in s'ome protocols. 3. A `doctor was not present during many of the potentially `critical periods' of reaction. 4. Some of `the experiments left the men too sick `to perform their regular duties. 5. Prison inmates drew blood and performed `other technical procedures. 6. The contrast between the facilities for the private concern's testing pro- gram an'd the extremely inadequate facilities available for treating sick prisoners was shocking. 7. A number of quite serious reactions had occurred among prisoners but these had received little attention. 8. The administration of the progra'm with prisoners sometimes, giving false histories and not taking the medicine provided for them, made the `results of the testing program somewhat unreliable. The newspaper articles were not enti'rely nega'tive `and they did point `out that nee'ded research was carried out, inmates di'd receive money to buy cigarettes and other needs, and `the Prison Welfare Fund received some monies which could be used for programs that the State did not provide. (At Kilby `and D'raper twenty percent `of `the money paid to the prisoners went to the Prison Welfare Fund), The newspaper suggested that the en'tire program be placed under the authority and `supervision of the University of Alabama Medical School, that the participants be properly remunerated, that profits from the program should PAGENO="0219" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5691 go for improvements in the prison system, that the testing program be so sched- uled as not to interfere with the work or training at the prison, that the partici- pants be clearly informed of possible dangers involved in the program, that the controls over the program provide for good scientific evaluation and that good medical supervision be exercised at all times. Following this adverse publicity which Carried distinct connotations of laxity on the part of the Board of Corrections and possible dishonesty on the part of certain of their senior employees, the Board of Corrections adopted the follow- ing resolution. "That the Chairman be authorized to appoint a committee of two or more persons qualified to determine from a medical standpoint, and not connected with the Board of Corrections, `to investigate any drug testing programs con- ducted in the State prisons, to determine whether the programs are properly supervised to protect the health of the participants, both in `testing and in the event of any after effects of the testing, to determine whether any prisoners are being abused in any way, and to report `to the Board their findings." Upon receipt of this request, this committee was appointed by the governing body of the Medical Association. The report constitutes `our findings. FINDINGS The findings of the Committee may be summarized under the following headings: 1. Prison `testing facilities 2. Equipment and staff (Southern Food and Drug Research) 3. Drug house relationships 4. The situation in other states 5. The present medical program (Alabama Prison System) 6. Errors of fact 1. Prison Testing Facilities Kilby, Tutwiler and Draper Prisons were visited during the course of the investigation. Private conversations were held with the th'ree wardens, the three prison physicians (two of these were seen elsewhere than in the prison for which they were responsible), Dr. Stough, the staff providing medical care in the three prisons, technicians involved in the testing program, and a number of prisoners who were on or bad been on one or other of the testing programs together with a number of more junior prison officials. At Kilby Prison a list was seen of prisoners who bad been selected by the Southern Food and Drug Research from their records as being suitable subjects for a new test which was being started that morning. No person in the prison system had any hand in selecting this initial list. From about 60 names which had been submitted, the warden had deleted about ten because, so he advised us, these persons could not be spared by their division heads from their official prison occupation. Most of the remaining 50 prisoners ha'd been called into the testing room in the prison that morning in groups of about six persons. While blood was being taken from them (apparently for laboratory testing) they bad received a ra'pid explanation of the purpose of the test, (there was considerable variation in the understanding of what had been said) with the statement that the drug being tested was safe and should the laboratory tests be satisfactory, they would be asked to sign a waiver-consent form. All this had seemingly been done by technicians with no physician being present as far `as could be deter- mined. Two of the four prisoners who were interviewed indicated that they bad never been examined by a physician while they were in the prison although they had been on several drug trials. One of these prisoners told of tests wjth an anti-hypertensive drug which had bad to be discontinued `after three weeks (the trial was supposed to run for four weeks) because of severe reactions among those taking the pills. He himself bad hung on to the end although be had been feeling very ill and had not complained of this illness, because it would have meant his losing the pay which he was hoping to receive for his participation. The majority of the prisoners Interviewed indicated that the only reason they participated in the drug trials was because of the money which they were paid. At Kilby, the original medical screening of convicts and the treatment of those who fell ill appeared to be largely in the hands of Mr. Howell, a man with very little previous medical training. His prior experience before entering his present position had been that of a venereal disease inspector. This man is supplemented in hi's duties by a number of part-trained inmates who are used as orderlies. PAGENO="0220" 5692 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY It was stated, with pride, by this individual who functions as hospital director that he himself was able to deal with nine out of every 10 patients who came to him so that the doctor was not bothered. Mr. Howell has the title of Medical Technician. However, it is apparent that he ha's been permitted to usurp respons&bilities far in excess of his qualifica- tions. It has been learned that this individual is responsible for the filling of requisitions for drugs from the other prisons within the system. In this capacity he has made substitutions for the drugs requested. Such decision should be made by a licensed physician. It is apparent to this committee that with proper controls this situation could not have existed. Conditions in the so-called hospital at Kilby were appallingly bad and would not have been acceptable fifty years ago, let alone today. One felt that a little extra effort and a little additional money would have made a tremendous dif- ference if only the drive had been there. The importance of this hospital at Kilby is that it turned out later that persons having severe reactions to any of the drug trials in any of the prisons were transferred to this hospital for more intensive care. The situation at Tutwiler Prison where only women are housed was im- measurably better than at Kilby. Both the warden and the hospital matron knew what was going on and had details of `each protocol in front of them. Only relatively innocuous drugs such as certain hormonal products were tested at Tutwiler (the potentially dangerous drugs were tested at Draper and Kilby where only men are housed). The subjects in each trial knew the purpose of the trials and reported regular and adequate supervision. Housing and care were generally satisfactory and the morale of staff and prisoners was obviously high. It was notable that these prisoners received a larger weekly allowance than was the case in the other two prisons and appeared to make good use of this. We were told with pride by the prisoners `of patients with cancer, which had been diag- nosed early as a result of the testing program and that these patients were flOW receiving proper treatment. The difference in this prison was more than could be accounted for by the nature of the trials being undertaken, or by the fact that this was a woman's prison. The situation in Draper was similar to that which had been found at Kilby, though not as bad. The difference was probably related to the dedication of the prison physician and to the strong sense of responsibility of the warden. There was no question here but that inmates had been used as `technicians until very recently, while severe drug reactions were not being given the attention (medical or experimental) which their condition deserved. Supervision for patients who had been "stopped up" in the special room constructed by Southern Food and Drug Research, appeared to be almost entirely non-medical in nature and no really adequate provision had `been made for any serious, unexpected, severe reaction. Once again, it appeared that most of the prisoners were volunteering purely for monetary reasons and were staying on the tests even `after disturbing reactions had occurred simply to be paid more. There was some question whether a phys'ician was being called on to decide what reactions were serious enough to constitute a demand for a patient to be withdrawn from a trial or whether this decision was in the hands of a technician. Here also, it appeared that the drug trials were given priority over the normal business of the prison and this division of authority could hardly have benefited the status of the local prison officials who were doing, apparently, a good job under difficult circumstances. Your committee believes that by and large, the research studies completed and published in highly respected journals by staff members of Southern Food and Drug Corporation represent creditable, useful, and practical contributions to medical science. However, th'is good should not be permitted to hide the manifest defects in the present system. The Board of Corrections with its physician member has naturally assumed that any doctor conducting experimental studies on human subjects would take the utmost precautions to safeguard the health of such subjects. Their confi- dence has been gravely abused. It is `the opinion of the committee that the prison testing facilities in Kilby and Draper do not measure up to minimum standards and compare unfavorably with what has been described to us as existing in several other states (see later in this report). Within Alabama, the limited testing done on prisoners at the Clinical Research Center of the University Hospital under the direction of Dr. Clifton Meador (now Dean of the Medical School) provides a striking con- PAGENO="0221" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5693 trast to what was observed in Kilby and Draper. In this University program, a few prisoners were selected for good behavior and understanding of what was involved. They were housed in the same quarters where other non-prison volunteers were housed with no guards. None took advantage of the easy oppor- tunity to escape and since discharge from the prison at least one former prisoner has revisited the Research Center to express his gratitude at being given this opportunity for moral rehabilitation. This committee was confronted with a seeming conflict of interest when it viewed the dual role of Dr. In Long serving as both senior prison physician and as an officer of Southern Food and Drug Research. Even Dr. Long readily acknowledged that a potential conflict of interest could exist. This unconscion- able situation, regardless of reason, should never have been permitted to come into existence. This situation places all persons concerned in an untenable position exemplified by the necessity for the investigation. 2. Equipment and Btaff (~S'outhern Food a'nd Drug Research) The laboratory of Southern Food and Drug Research occupies the second floor of a building at 306 Arthur Street in Montgomery, Alabama. Space seems adequate and work tables, casework, shelves, record storage areas and equip- ment seemed sufficient for the work done. Reagents appeared fresh, were well labeled, and stored in an orderly manner. Major equipment consisted of micro- scope, large centrifuge, freezer, refrigerator, flame photometer, water bath, spectrophotometer, P.11. meter, Coulter counter, and a dual channel auto- analyzer for doing several routine chemical procedures using several manifolds. Procedures determined with the autoanalyzer consisted of BUN, sugar, alkaline phosphatase, total bilirubin, total protein, and albumin. Several enzymes were being determined by manual methods. CBC's and uninalyses were done by routine methods including a Coulter counter for cell counts. The refrigerator contained Dade commercial control sera and some homemade pooled sera. We examined a series of alkaline phosphatase and bilirubin values directly from the autoanalyzer chart paper and saw one set of standards and one control for about twenty unknown patient samples. The control was calculated from the chart and showed an error of about 40% on the alkaline phosphatase. This was pointed out to the laboratory director and he excused it on the basis that commercial controls were sometimes wrong and that they could depend more on their own values (In our experience this is occasionally true but it requires repeating the tests with other controls.) His attitude to us was unacceptable and reflected poor technique. The technician operating the analyzer on the day of our inspection had limited knowledge of the instrument. All personnel were certified by American Medical Technologist which has limited significance in our opinion, but most had received military training in laboratory schools. These military programs are frequently quite good, and the laboratory director seemed well informed. We conclude that the laboratory is adequately equipped, staffed by people with minimal, if not marginal, acceptable training and results are generally but not always accurate. It probably compares favorably with many small hospital laboratories in Alabama but lacks the better qualified personnel and more careful quality control seen in better run labora- tories. Some tests such as Pap smears and PBI's have been done by Dr. Robert Adams of the Montgomery Baptist Hospital for the past four years and Dr. Adams has given free consultation about laboratory procedures to Dr. Stough by personal contact and telephone on several occasions. Random samples of the other procedures have at other times been sent to Dr. Adams' laboratory for comparison of results. Our conclusion that Dr. Stough operates an acceptable but not always reliable laboratory was shared by Dr. Adams who has privately recommended to Dr. Stough better supervision of the laboratory and indeed of the entire testing program. 3. Drug House Relationships Reputable drug firms are concerned with developing and producing effective, safe medications. Their record in carrying out this function is unassailable. In their search for new therapeutic agents they maintain an impressive laboratory operation with a competent, highly trained research staff. All newly Isolated or synthesized entities to be evaluated for drug potential are carried through an exhaustive battery of tests in several species of animal subjects providing toxicity data and general pharmacological profiles to serve as a basis for pre- diction of human responsiveness to the same agent. PAGENO="0222" 5694 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY The preclinical or animal work required of the drug developer is not specified in detail by the FDA and may vary within limits depending on the nature of the compound. The studies, however, must leave no "blind spots" in the animal pharmacology. It is generally accepted that the need of the manufacturer to intimately and thoroughly know his product and the responsibility of the FDA to protect the public from drug hazards is adequate proof that the manufacturer has done everything possible to provide, by animal studies, predictive informa- tion for use in human studies. Regardless of the sophistication and exhaustiveness of animal studies, how- ever, the definitive test of what the drug will do in the human is learned only by use in humans. The predicitive value of animal studies is less than absolutely established. Litchfield, in a retrospective study of six drugs evaluated in labora- tory animals and man, found inconsistencies but concluded that some predictive value could be shown. Penylbutazone threshold difference between rabbit and man is more than forty fold. A compound shown by Brodie to anesthetize the rat satisfactorily so that infusion for 8 hours was followed by complete recovery in 10 minutes was, in a careful study In the first human subject, found to require 48 hours for recovery after a 10 minute Infusion. Thus, there is inherent in the clinical testing to follow some usually small but inassessible hazard. It is reassuring to remember, however, that the compound's activity is in the physical and chemical properties of its molecule. A clinical pharmacologist thoroughly familiar with the physical and chemical nature of the drug and with appreciation of the fact that the body's ability to dispose of a drug often depends on any enzyme system with broad or narrow substrate limits, will be prepared for dealing with blood levels that might result from the human's not possessing a polarizing enzyme with spectrum broad enough to include it. Clinical testing should either be done by an investigator trained in clincal knowledge of the new and potentally hazardous test material; or there should be extensive con- ferences between preclinical and clinical investigators and not just a mere pres- entation of the animal data reports with the assumption that they will be read and perceived. It is our opinion that Phase I studies, in general, and, in particular, those involving a first human testing, do not give sufficient importance to either the ~hoice of the investigator or the briefing of the investigator. This is particularly relevant for agents of an entirely new action category or having a new chemical configuration. There is the impression often that protocols are passed to any available clinical investigator to be carried out in a routine sterotype manner. A clinical investigator may thus be doing a job in which be feels competent from having performed perfunctorily in the same capacity for many years but with very little understanding of the role he is performing, FDA and pharmaceutical manufacturer's monitoring is provided but this evaluation may be too super- ficial and too remote to provide maximum safety. Less than ideal Phase I testing inevitably increases the risk for those volunteers used in Phase II (the first testing on selected sick patients). In a recent discussion of a new drug product, Dr. Gilgore of Pfizer Laboratories remarked that- "For the early Phase II studies we want our investigators to be the most ex- perienced available. Careful review of the literature and discussion with physi- clans at scientific meetings are important aspects in our investigator selection process. We selected four well-recognized experts in the field as our principal Phase II investigators. With these we discussed the experimental procedures to be followed and with collaboration of statisticians, designed the clinical pro- tocol. . . . After pilot studies were completed We called our investigators to- gether for a `think tank' type Of discussion at which their results were received." In contrast the only iz~ention of selection and briefing of Phase I investigators is that "two were selected." In the present instance there is no reason to believe that the pharmaceutical firms failed to act in good faith or failed to discharge their responsibility to the general public to develop safe effective therapeutic agents. They contracted with approved clinical investigators to carry out approved research projects. However, there are some points for possible criticism, (1) There may have been a too superficial monitoring of the clinical work which they support, (2) They demon- strated some lack of discretion in selection of their Phase I investigator. Thus, there was a need tO consider the number of projects to which the prospective in- crestigator was already committed, (3) Their initial conference sessions malT not have provided for adequate grounding of the investigator in all the significant basic properties of the test material, a particularly important point when the PAGENO="0223" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5695 limited training in basic pharmacology of both clinical investigators (Drs. Stough and Long) is considered. That the drug manufacturers are interested in conducting and supporting re- search programs of quality is confirmed by a consideration of two clinical pro- grams established and operated by two of the major firms, the Upjohn Company and Parke-Davis at the Southern Michigan State Prison. These programs in- volved an initial expenditure of perhaps one half million dollars for facilities and are generally believed to be first class, both in providing for optimum safety and welfare of the human subjects and in providing dependable clinical data. There is no reason to doubt that excellent programs are desired by the drug manufacturers or that they would support such programs. Despite this, both the drug firms and FDA have given tacit approval to the research in Alabama prisons, an approval based on their confidence in the reliability of data so obtained. It should be noted, however, that neither is primarily concerned with the rights and welfare of the institutionalized research subject. There is within the body of the law some provision for protecting the welfare and rights of prli~oners used as research subjects, but in the absence of sufficient funds and some watchdog mechanism, these rights may be abu~ed. There is the justifiable view that the drug manufacturer is not abandoning any moral or ethical responsibility in assuming that the welfare of institutionalized human subjects used in testing its products will be adequately underwritten by the administrators of the in- stitutions or by other state agencies, boards, or commissions charged with that responsibility. The states in which prison inmates are used as experimental sub- jects provide examples of very adequate provision for welfare of the human sub- jects through "human use" committees and "human experiment review boards" which are concerned primarily with protection of the human subjects. That, ex- cept at the Medical Center, there is no such firmly structured monitoring group in Alabama should not be considered to extend the responsibility of the drug manufacturer to assume this neglected duty. There is good reason to believe, however, that the pharmaceutical manufacturers would much prefer to have their clinical programs conducted under an officially supervised system in which the welfare of the human subject is assured. The committee is of the opinion that drug companies would also prefer a sys- tem which would provide for on going "quality control" during a drug testing program and a certainty that all possible toxic reactions, whether real or only apparent were being fully reported. An agency which would establish clinical research standards and policies and critically assess the safety and propriety of all procedures and the conducting of these would serve the cause of drug re- search and the principle of inividual rights. In summary it may be concluded that the pharmaceutical firms are generally not subject to criticism for the present state of the clinical research program under investigation. They have contracted with approved clinical investigators to do approved research on compounds which they have developed and for which they have provided very thorough preclinical testing. That they may have been unwise in their selection of a clinical investigator is a point for criticism but is understandable. That they have not shown greater interest In the welfare of the subject used in the clinical investigations is explicable since they would un- derstandably assume that such an obligation would be underwritten by alert state agencies. There is evidence that the pharmaceutical firms would prefer to have their clinical research program conducted under a system by which adequate state provision for prison inmate welfare would be assured. 4. The situation in Other states During the course of this committee's work, a survey was made on the use of in- mates for drug testing in the prison systems, of other states. This survey was made by written inquiry to the commissioners or their counterparts of the 49 other prison systems. At the time of this writing 85 responses have been received. Twenty states do permit drug testing within their prison systems. Fifteen states do not permit testing; however, the State of Tennessee has proposed legislation which would permit testing within the system there. In those states where testing is permitted, their programs appear to be well structured along two main lines, in order to insure (1) ultimate protection of the health and safety of the human subjects and (2) minimum interference with the operational aspects of the prison itself. The protective mechanism in most instances is centered around a professional committee which passes judgment on each testing program that is proposed. Such PAGENO="0224" 5696 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY a committee then makes a recommendation to the prison board which must have final authority before testing can be conducted. In these states without testing programs the reasons, Where given, for their non-existence were usually a lack of proper facilities and medical facilities in particular. The one general area of agreement in those opinions expressed or inferable is that drug testing is essential. Further, the presence of drug testing programs in a prison affords another means of rehabilitation through the provision of a channel by which the prisoners can make both a humane and financial contribution to society and their families. The programs in other states have far superior controls, both medically and administratively, to those presently found in the Alabama system. The relative lack of controls could well account for the vast amount of testing done in the Alabama system. The appendix to this report contains examples of some procedures used in other systems in which the committee feels have considerable merit. 5. The Present Medical Program (Alabama Prison System) We believe that the physicians responsible for the health of the prisoners at Atmore, Draper, and Tutwiler Prisons have done a magnificent job when their work is considered in relation to the pitiful and almost scandalous lack of fa- cilities, funds, and personnel available to them. At the expense of personal eco- nomic loss, lack of time with their families and almost complete sacrifice of opportunities for recreation and relaxation they have proven their dedication to the Hippocratic tradition. We applaud the degree of voluntary devotion, to their own concepts of their obligation to society, displayed by these three prison physicians. Certain aspects of the various prison medical facilities have been described earlier in this report. They, with the exception of Tutwiler, are unacceptable. The Tutwiler dispensary while superior to that in the other prisons, could be improved. 6. Errors of Fact Respect for the Board of Corrections and for Commissioner Lee requires that the committee report that certain errors of fact did appear in the newspaper articles concerning the drug testing program. These include: (1) The ownership of the ward constructed at Draper. This building is used by Southern Food and Drug Research, Inc. and was paid for by the corporation. It is now property of the Alabama Prison System. (2) The "blood draws" allegedly taken at Atmore did take place, but these were donations to the American Red Cross. We were unable to confirm any plan to expand the drug testing program to expand the drug testing Drogram to the Atmore facility. (3) At no time has an expansion of the testing program been planned to include the testing of foods. Southern Food and Drug Research, Inc. did offer (this offer was accepted) $7,000 toward the purchase of new kitchen equip- ment badly needed at Draper. (4) No modern laboratory facilities were found to exist at any prison facility. The laboratory of Southern Food and Drug is in Montgomery. It is not this committee's responsibility to pass judgment upon the motivation behind the printing of these stories. We do not believe these articles were errors of intent; however, they are errors of fact. The implications of some of these articles were not substantiated in this committee's findings. IMPLICATIONS Our investigations have shown substantial defects in the drug testing program as administered at present in Alabama prisons. This does not, however, change our opinion that drug trials using prisoners can and do serve an essential pur- pose. They benefit the Nation and provide the prisoner with an opportunity to contribute something back to society, to earn some extra needed money and to improve living conditions in the prisons through a well developed welfare fund. In addition, a well conducted drug testing program would provide extra medical coverage for prisoners with the possibility of the early diagnosis and treatment of disease and better diagnostic facilities then might otherwise be available. Actually this has frequently happened in Alabama. PAGENO="0225" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5697 Considering the pre,sent situation we regard it as being distinctly unsatisfac- tory. The prisoners' welfare is not being adequately safeguarded and the validity of the drug trials themselves mUst occasionally be seriously in doubt. The chief deficiencies are undoubtedly the lack of an `adequately trained staff, the lack of sufficient interest in the prisoner as a patient, the lack of medical supervision, the unique pressure toward signing a "consent form" because of the need for money, unsatisfactory conditions for the treatment of those prisoners who do fall ill and the lack of any adequate peer review of protocol which are submitted. For `the staff and facilities w'hich are available, there is no question but that far `too many trials are being conducted at the same time. Thus, at the time of our visit it `appeared that no fewer than seven separate trials we're `being conducted in the three prisons we visited. Faced with the present situation one is tempted to look back and ask, "How did this happen ?" It is not our intention, however, to rake over old coals, except where such a review might lead `to improvements in the future. In general, we would comment that supervision over the program has been inadequate and the responsibility for this must fall to some extent on all senior administrative levels. Men, no matter how worthy, simply cannot do what they wish to do, without the needed funds. The work of Dr. Stough and, to some extent, Dr. Long, is bluntly unacceptable. Others seem to have been involved more through innocent acceptance than through anything else. In retrospect it is easy to see that a request to the State Health Officer for an adequate control inspection might have saved a lot of grief, but this overlooks reality. It is oniy right that prisoners, as wards of the state, should, `in the absence of a drug testing program, receive medical care of the same general quality as that received by the average citizen of the state. We believe that with very little help from the State, a sincere attempt has been made at Atmore prison to give this level of medical care. The dedicated physk~ian providing this care has paid not only with time and at the probable price of his own health but, in part, out of his own pocket. It is totally wrong that a physician should, because of his own dedication be forced to meet an obligation that should rest firmly on the shoulders of the taxpayers of Alabama. Where there is a drug testing program the obligation is different. Here the responsibility is to provide the quality of care that a volunteer ordinarily receives at a first class research institution. The fact that the volunteer is a prisoner does not alter this. Because there are fewer prisoners and because (see above) the drugs tested are relatively innocuous, the care of Tutwiler has been of high qu'ality. Again the cost has been met in part from the po'cket of a dedicated physician. The situation at Draper is different in some respects and similiar in others. There are many more prisoners, many more testing programs, and drugs that are far more likely to produce adverse effects are being tested. Despite the strong attempt `and the out-of-pocket contributions of a third dedicated physician who like the other two; has the full support of his warden, it has not been possible to provid'e the minimally acceptable standard of care that could probably have been provided had there been no testing program. The responsibility fo'r the greatly increased cost of a higher standard of medical care that should be a direct consequence of drug testing is not that of the tax- payers of Alabama. It is directly or indirectly the responsibility of the com- panies whose drugs are being tested. There is one large difference, the Alabama taxpayers have, as yet, shown no desire to meet their responsibility while the drug manufacturers have seemed willing to meet theirs. We do not know what the expense of this difference between the cost of average quality health care without drug testing and superior care with drug testing will be. We are `certain it will be substantial. Nevertheless, we have hopes that the drug companies will do their part. It seems to us now that with the exception of the noted errors of fact and their perhaps graver errors of implication the Montgomery Advertiser was correct in most of its criticisms of the present drug program. There were insufficient con- trols over the drug testing program in allowing Dr. Stough a free hand within the prison system. The responsibility for this omission of controls to protect the prisoners must rest by virtue of their authority ultimately on the Board of Correc- tions. But `we repeat tha't no man or group of men can possibly meet' a responsi- bility that requires funds when `they' are not provided by the State with even minimal necessary funds. 81-28O-Ol~-pt. 14-15 PAGENO="0226" 5698 COMPB~TITIVE PROBLEMS IN THE DRUG INDUSTRY ALPERNATIVSS As the problem has been described, we are faced with, the dilemma of "right'~ versus "right." It is certainly "right" that new drugs should be evaluated before release to the general public, it is "right" that this evaluation should be mean- ingful-that is, it should be don.e in a thorough, scientific manner by competent individuals. It is "right" that the individual who is to participate in the trial (whether he is a prisoner or not) should do it purely on voluntary basis with full knowledge of the hazards involved. In this area we are to be guided by the principles outlined in the Nuremberg' Code, the Declaration of Helsinki, and the American Medical Association's Ethical Guidelines for Clinical Investigation-see Appendix. It is "right" that the prisoner with few rights of any kind should receive at least the average medical care available to free citizens, and be protected from those who might abuse his position and sometimes his ignorance to the detriment of his health for experimental purposes. It is certainly good if not right that prisoners be given a chance to earn some money (especially considering the pittance they receive otherwise in the Alabama Prison System). It is also good that prisoners so motivated may enhance their self esteem by making a positive contribution to the general public welfare by participating in a medical research program.. (Our interview with Dr. Clifton Meador, the Dean of the Medical School, shows that a well-run program by properly motivated people may have `a definite rehabilitative benefit to the prisoners in their ability to relate to the free society). If there is so much right and good about the program, then what is our prob- lem? Just as it is good that a well-run private enterprise such at A.T. and T.. runs a superb telephone service in most of the United States, it is also right that such a monopoly should be regulated for the benefit of the customer who has no choice. By the same reasoning the highly desirable drug testing program might be well run by reputable free enterprise (such as ethical drug firms pre- sumably do in Michigan~) or by nonprofit research organizations as long as the research is monitored adequately by the officially designated commission or regulatory board. There are, however, certain practical problems which make such a free competition system awkward. These stem from the necessity that a unit capable of conducting such research establish major facilities such as clinical laboratories, research laboratories and offices in the vicinity of the research site and maintain a staff of highly qualified, carefully selected per- sonneL This constitutes a highly specialized functional unit, the existence of which would be without purpose in the absence of contracts for research. It is' doubtful that even an altruistic private organization would `be willing to make such investment without assurance of continuing contracts. If there was such,. a free competition system would seem impractical or would likely revert to a monopoly system which would be subject to criticism. A foundation established by a state institution such as a major university would be a logical alternative. Such a foundation would serve as a functional unit with laboratories and other necessary fixed facilities and with clerical and administrative staff directed by a clinical pharmacologist qualified to conduct humkn drug research. This foundation would be under control of a board of' appointees qualified in medico-legal aspects of human experimentation, with the foundation director serving as permanent chairman. The controlling board would be charged with the responsibility of reviewing all protocols from pharmaceuti- cal firms, or others submitting fl~linical research projects, assessing hazards in- herent in the projects and critically evaluating the safeguards to be provided. The controlling board would also be responsible for seeing that all research subjects were aware of hazards and entered the program's voluntarily. To protect themselves from any po's'si'ble imputation of a "conflict of interest,'~ the controlling board of the responsible foundation might advantageously appoint a Prison Experimental Review Committee to advise them on any potential risk to the health of the prisoners. The members of this Committee should not be related to the research foundation and might include a competent praetic1ng~ physician appointed by the Board of Censors, a lawyer nominated by the Attorney General, and a designee of the State Health Officer. Since our suggestion does not' envisage a monopoly for the responsible foundation (though the bulk of research investigations would be channeled through them) the proposed Committee could also advise with regard to other groups which wish to conduct their own research in the Alabama prison system. PAGENO="0227" COMPETITIVE PROBLEMS IN THE DRUG ~NDtSTRY 5699 Moving from the general to the specific, the two major university-related non- profit organizations In Alabama which might fittingly establish the research foundation to which we have referred, are the Auhurn University S~b~ool of Pharmacy and/or of Veterinary Medicine and the University of Alabama Medical St~hool. The authorities of the University of Alabama Medical Center and Medi- cal School have, however, stated that directing and operating such drug testing programs is not within their sphere of interest. On the other hand, they would be happy to do all that they reasonably could do to aid in providing proper medical care to the prisoners and in protecting them from the possible harmful effects of drug testing. Preliminary discussions with Auhurn University have been encour- aging since this University has all the necessary potential and excellent leaders. This committee thanks both universities for the interest and attention they have given to this matter. We are thus suggesting that all research proto~ols from drug companies and others be submitted to a new research foundation (hopefully sponsored by Auburn University) which would review these protoc~ois. After approval by the Foundation Contro1lin~ Board (with advice from the Prison Experimental Review Committee) the Board of Corrections would con- sider the proposal from the point of view of prison organization; and if they approved, submit it to the Medical Director and Warden of the Prison in Which the experiment is to be conducted. Any one of these groups or individuals would have the right to reject the program with writtea justification for their decision. (This might reduce the number of programs or participants from the present excessive level, but it would introduce adequate safeguards for the health of the prisoners.) Note that we have refrained frOm mentioning Southern Food and Drug Re- search and Dr. Stough, Obviously such a proposed system of controls would require considerable changes in his present operation. In a free enterprise sys- tem properly regulated he would have every right to submit his programs to the research foundation for consideration. Other interested parties might do like- wilse. No firm or individual should hold an exclusive contraclf to conduct ex- periments within the prison system. Each would be judged on its merit, safety and efficacy. We are assuming, however, that in the vast majority of instances the research foundation would be asked not only to review the protocol, but also to undertake the research envisaged in the protocol. It would seem reasonable to assess the firms submitting research projects not only for direct costs, but also to cover the costs of the additional safeguards to the prisoners (including those of the Prison Experimental Review Committee) required by the research foundation and the Board of Corrections. Pursuant to an amendment of the initial request made by the Board of Cor- rections, this committee has considered what it believes to be suitable alternatives to the present drug testing procedure in whole-or certainly in part-where needs are apparent. These suggestions have been incorporated in Figure 1. Admittedly, both plan- ning and money will be needed to implement an ideally structured program. The numbered items are discussed further in the text of this report, following Im- mediately after Figure 1. PAGENO="0228" !3CAtW OF CORR~C11ON~ -I-) 1 7 RespO~s~b~lty ftw h&afth P~1ED~CAL E~R~CTOI~ COMMiSSIONER (part-t~e) /14, SEN IOR PRISON PHYSICIAN / ~ (pat~k~e ~ch pri~«=c~) JU~OR PRISON PHYSICIAN Q~ach pri«=on) RESEARCH STAFF OTHER APPLICANTS FOR ~ PRISON WARDEN RESEARCI4 PRPGRAMS .3 ~R~SON EX?ERIMEN~AL REVIEW COMMITTEE 1' cED~AL FUNDS Cors~i%ttiOfl GIFTS ~ RFSEARC~ CUNDATION f / 1/ R~cpo~sibk~y fbr all el~ 6/ OUTSIDE MEDiCAL ADVISOR (Non-&u~ pro~m rdat~l problerAs) ?HARMACEUT(CAL FIRMS 0 0 0 z (I) `if PAGENO="0229" COMPETIPIVE PEOBL1~MS IN THE DRUG INDUSTRY 5701 (1) As we see it the chief problem that may stem from the lines of responsi- bility and of authority that are illustrated in the diagram (Fig. 1) included in this report relates to the Medical Director. Should the Medical Director for the entire prison system of Alabama be dF rectly responsible to the Board of Corrections or indirectly through its highly respected Commissioner? There are obvious potential advantages and disad- vantages in each method. We believe that this is a decision that only the Board should make. However, since it is our present impression that the Commissioner would prefer not to assume any responsibility in health matters', the diagram as presently drawn, indicates direct responsibility of the Medical Director to the Board. Obviously, the Board should have complete authority to make any changes it wishes as regards such an arrangement. We are suggesting that the Medical Director be part-time but that a substantial part of his income come from the Board of Corrections. He should receive no direct payment from any research group. (2) The Research Foundation has been discussed elsewhere. The Foundation would share with the Board of CorrectiOns the responsibility for obtaining fund- ing which would make adequate supervision of all drug tesing programs in th~ prison system a reality. (3) The Prison Experimental Review Committee has also been discussed else- where. It is essential that this Committee take an active interest in what is happening and not degenerate into a rubber-stamp mechanism giving approval as a matter of form. (4) The Senior Physicians for each prison would continue as at present to be part-time, but an increased remuneration is strongly recommended. It is pro- posed that this be achieved by augmenting their salaries by additional funds received indirectly (see later in this report) from the Research Foundation through the Board of Corrections. (5) It is contemplated that the Junior Physician would be a resident on leave from a medical center for one year. This doctor would be paid by the Board of Corrections an adequate salary plus the benefits accorded other full-time prison system employees. An additional sum of money would be placed in escrow with the academic institution or hospital from which he is on leave to supplement his residency stipend during his final period of study. (6) We have noted earlier in this report that the University of Alabama Med- ical Center has volunteered to do all that they reasonably can to aid in seeing that prisoners get proper medical care. This committee recommends that the Depart- ment of Public Health and Epidemiology at the Medical Center be asked to name a medical advisor to the prison system who would be outside the prison system. In addition to advising on the delivery of medical care, be could advise on matters of public health, communicable diseases, sanitation and the relative importance to be attached to health expenditures in a limited total budget. (7) We have indicated earlier that the responsibility for the greatly increased cost of a higher standard of medical care that should be a direct consequence of drug testing is not that of the taxpayers of Alabama. It is suggested that the Board of Corrections (with appropriate advice) determine an estimated total cost for providing this extra care and that this cost, through the Research Foundation, be debited back to those drug firms making use of the Alabama Prison System for drug testing. It seems possible to the Committee that this cost might well be more than the present total cost of providing medical care in the prison system. It must be emphasized that if this arrangement was achieved, this would not relieve the prison system of its own financial responsibility for providing ac- ceptable medical care to prisoners. Indeed, this should provide a stimulus for much needed improved support from Within the prison system. SUMMARY It is the unanimons opinion of this committee that the `drug testing program ~s almost essential and should be continued for the benefit of the prisoners and society in general. However, as presently conducted the program does not pro- vide adequate safeguards for the health of the prisoners and leaves something to be desired in quality of results obtained. In order to alleviate these problems, we have made suggestions for certain structural and organizational changes in the program which should produce a system for drug testing that might serve as an example for the nation. PAGENO="0230" ~7O2 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Early in our report, we likened our task to that of observing and commenting upon a "play" in a theater. Perhaps it Is not inappropriate to pursue that analogy. It has been our privilege to sit on the front row. We have observed a drama that has displayed certain minor aspects of comedy and many features of melo- drama. But the major impact has been that of `tragedy. There has appeared, over and over again, conflict between right and right. From our posts of vantage we have watched the entrances and the exits of the characters and `the unfolding of the plot of this drama, we have constantly asked ourselves one question: "Who If anyone, is the villain in the Play ?" From time to time we have made `tentative judgements as indicated earlier In this report, but our final judgement indicates that our search has been successful and `that the greatest villain has been identified. At times, he brazenly occupied the spotlight; at others he has been seen flitting In the shadows. More often his presence has been felt even while he remained hidden in the wings. That villain Is human nature. The same character is also the knight in shining armour, the hero of the play. COMMITTEE MEMBISES Tinsley R. Harrison, M.D., Chairiuan, Birmingham. J. N. Clanton, M.D., Huntsville. Peter N. B. Peacock, M.D., Birmingham. Byron R. Williams, Ph. D., AuburiL Reginald P. Hamner, L.L.B., Motitgon~er3r. L. P. Patterson, Montgomery. Senator NELSON. I would like to ask this question: You have, I understand, taken a careful look at the Alabama study. Dr. Lu~. I have. Senator NELSON. Do you have any reason or any evidence that would refute any conclusions or any statements made by `the Alabama Medi- cal Association in this report? Dr. LEY. This is a very difficult question to answer off the cuff. Much of the criticism or comment of the Alabama commission is aimed ut specifically this area of informed consent, the degree of stipend or the amount of stipend available to the prisoners-all items which, tech- nically, fall outside the present existing regulations of the Food and Drug Administration. So that when the statement appears here, "The work of Dr. Stough and to some extent of Dr. Long is bluntly unac- ceptable"-I must caution the committee and any other persons inter- ested in the subject that this sentence, although it may be quite appro.. priate when you consider everything that was considered by the com- mission, is not appropriate on the basis of our review of the scientific details of the reports of doctors found in our file. However, it is very difficult to go line by line and make this sort of comment throughout the report. I believe that in general, the major thrust of this report is that there was inadequate, incomplete understanding on the part of both Dr. Stough and on the part of the institution, the prison, of some of the responsibilities which each had in this particular situation in which prisoners were used for investigational studies. Senator NELSON. But they make a substantial number of observa- tions which, of course, are not related to paperwork that was sub- mitted in the studies by Dr. Stough. Dr. LEY. One of them that bothers me specifically, Mr. Chairman, is the remark about the quality control procedures utilized hi the clinical laboratory, performing laboratory studies on blood specimens of the patient. Even the commission, however, recognized that the laboratory personnel were minimally trained for the work, but were probably no different from the majority of personnel in most medical laboratories in the State of Alabama. PAGENO="0231" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5703 Senator NELsoN. I have been taking excerpts. I do not want to leave the impression that everything in here is negative as to Dr. Stough. It is not. That is why I wanted to print it in full in the record. And I am not asking you to endorse or give an opinion, either, on everything they said, because obviously, your team did not do the same kind of a peer evaluation that this team did. But if there were anything in here that you knew of or were certain of that you thought was not correct, I would think it would be helpful for the record to put it in. Dr. LET. I know of nothing right at this moment. I would appreci- ate the opportunity to review it once more and perhaps submit a state ment for the record if there is.' Senator NELSON. We are very pleased to have you do so. I want to skip to Senator Dole now so he can ask his questions. I then can conclude that you feel it is very important to establish a peer group to evaluate the performance of the protocols not only in teaching hospitals, and so forth, but as soon as possible in all the prison experiments being done in this country? Dr. LET. I do indeed. I think this is a very important matter. Senator NELSON. Senator Dole? Senator Doiai. Let me observe, Mr. Chairman, that this committee is very appropriately named the Monopoly Subcommittee. The chair- man monopolizes selection of the witnesses and all the time. I believe on the part of the minority, certain changes should be made. We also have an interest in the subject matter and it is unfortunate that 99 percent of the time is taken by the chairman. Second, with reference to the article, the memorandum from Dr. Jennings to you, Dr. Ley, do I understand this contains a list of drugs and companies which own the drugs? Dr. LET. I believe I only have a superficial memorandum here. There was an appendix and attachment which have been reviewed in greater detail since this memorandum. Senator NELSON. I intended to ask that that appended list be printed along with Dr. Jennings' memorandum. The list is here so that Senator. Dole may see it. Senator DoLE. Would this information have been available to any- one who requested it? Dr. LET. In terms of the listing of the studies which Dr. `Stough had been involved in by manufacturer and by IND number? Senator DOLE. Yes. Dr. LET. This type of detailed information would ordinarily not be available to the public or to the members of the press in this form. Senator DOLE. Now, the article that I referred to should be made a part of the record, the New York Times article of August 5. It also states that many of the drugs were listed in code. (The article referred to follows:) [From the New York Times, Tuesday, Aug. 5, 1969] DRUG AIDE ADMITS To DOUBTS ON TESTS (By Waiter Rugaber) WASHINGToN, Aug. 4.-A leading official of the Food and Drug Administra- tion has acknowledged that scores of drugs now on the American market have undergone safety and efficacy tests of questionable validity. 1 See pp. 5675-~5679. PAGENO="0232" 5704 COMPETITIVE PROBLEMS IN THE DRtG I~DVSTRY fl'~ubts about the tests, conducted in a number of southern prisons by one of the nation's most active evaluators of new pharmaceutical products, were apparently felt within the Food and Drug Administration as long as two years ago. Dc~spite the shortcomings, the agency made no move to regulate the tests or to disqualify the physician responsible for most of them, Austin R. Stough. Dr. Stough isnow based in Montgomery, Ala, Dr. John Jennings, acting director of the agency's Bureau of Medicine, argued that two inspections of the prison drug testing programs had turned up no vio- lations of the agency's regulations. But Dr. Jennings went on in a recent memorandum to declare that "ob- viously we should be concerned that such an operation [as Dr~ Stough's] can exist under current regulations." The memorandum went to Dr. Herbert L. Ley Jr., Commisioner of the Food and Drug Administration. It was dated last Tuesday and was made available today by a source outside the agency. The document briefly recounted the history of Dr. Stough's activities, be- ginning with a 1964 hepatitis epidemic "subsequently proven to be caused by his poor technique in the conduct of a plasma-pheresis program." In addition to drug testing in the Alabama and Oklahoma state penitentiaries, Dr. Stough took blood from the inmates and extracted the plasma for use in a large number of the nation's gamma globulin products. Gamma globulin is widely used to improve a patient's immunity to various diseases. One `Federal Government source has estimated that Dr. Stough's plas- ma could have produced a fourth of the national supply. A study by the National Communicable Disease Center at Atlanta showed that the 1964 epidemic afflicted hundreds of prisoners in Oklahoma and Alabama and in Arkansas, where Dr. Stough also worked. Dr. Jennings noted `that Dr. Stough's plasma and th'ug testing operations bad been stopped in Oklahoma "when unfavorable publicity and press criticism led to his expulsion" from the prison there. The plasma program continued in Arkansas, however, until late in 1967. It was halted in the Alabama prisons in 1964, but Dr. Jennings noted that Dr. Stougli "set up shop" there for drugs tests, and these continued. Dr. Alan B. Lisook, the lone, physician regularly employed by the Food and Drug Administration to make field investigations of drug testing activities, visited Dr. Stough only twice. "The February, 1969, inspection of Southern Food and Drug Research [Dr. Stough's company] was not materially different from that of 1967," Dr. Jen- nings wrote in his memorandum. "Physician-subject contact again appeared to be minimal and the execution of the studies was primarily left up to medical `technicians." "Physical examinations appeared to be performed as required although they were somewhat cursory in nature. The administration of medication appeared to be properly policed. "Laboratory records and progress reports appeared to be complete, for the most part, and in original form. There was no evidence `to indicate that the tests were not actually performed, or that inmates were participating in the selec- tion of subjects. ENDED AFTER PUBLICITY "The use of convicts to draw blood samples was acknowledged, but such prac- tice was `discontinued in the wake of the January, 1969, publicity. It was noted that the interviews for subjective complaints by medical `technicians were ex- cessively brief." The January publicity consisted of more highly critical articles in The Mont- gomery Advertiser and The Alabama Journal. A committee of the Alabama Medical Association found that physical examina- tions were not only "somewhat cursory" but also occurred in some instances which no doctor on hand. "Interviews for subjective complaints," said by Dr. Jennings to have been "ex- cessively brief," are considered essential by clinical pharmacologists judging a new drug. "Although Dr. Lisook's two investigations of Dr. Stough's operations disclosed no violations of our regulations," Dr. Jennings said, "obviously we should be concerned that such an operation can exist under current regulations of F.D.A. and D.B.S." PAGENO="0233" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5705 D.B.S. is the Division of Biologics Standards, another agency within the Department of Health, Education, and Welfare. It has responsibility for plasma programs, but its officials contend that its regulations cannot be used to protect blood donors. "Aside from the welfare of the [prison] subjects," Dr. Jennings observed, "the question of validity of the studies may still be raised-especially the possi- bility of concurrent testing of drugs." "Concurrent testing of drugs" apparently refers to testing more than one ex- perimental drug on the same person at the same time. Dr. Jennings could not be reached for elaboration on this point. Attached to the memorandum was a list of some 175 experimental drugs tested by Dr. Stough and an associate. The list also named the companies for which the work wasi carried out. This information had been repeatedly sought by The New York Times when it was preparing an article on Dr. Stough's operations. The article was published in last Thesday's editions. The memorandum and the list were made available by the staff of the Senate Subcommittee on Monopoly of the Small Business Committee after part of the information had been given by the agency to a medical newspaper. In the form that the list of drugs and conmpanies was provided, it was gen- emily meaningless. Many of the drugs were listed by code names and there was no indication of what Dr. Stough reported about them. It is understood that most of his reports were favorable even though a number of the drugs involved were controversial. Some have been criticized on the ground that they caused serious side effects. The Food and Drug Administration may provide a more comprehensive view of Dr. Stough's tests when officials appear before the subcommittee at a special hearing scheduled for next Tuesday. Senator DOLE. Did the FDA give the key to the code to any out- side person, or did the FDA break the code for any outside person? Dr. LEY. The listing in the code as so stated is only for purposes of this list. The file for each one of these products contains a complete disclosure of the components of the medication. We did not, to my knowledge, make this information available in the public area, nor should we. In many cases, the products are listed as a generic or a trade name. The code is used frequently in investigational work early in the investi- gation prior to the coining of a trade name for a product. But we did not provide the compositions corresponding to the codes to the press or to the public. Senator DOLE. Do you know whether or not-do you know, Dr. Ley, when this list of drugs was furnished to this subcommittee? Dr. LEY. I do not know without questioning the staff. I do not know. Senator DOLE. The reason I ask the question is that much informa- tion furnished to the subcommittee reaches only certain members of this subcommittee and is rarely made available to the minority side. This is unfortunate, hence I wonder if this was given to the chairman or Mr. Gordon, a majority staff member, with any restrictions on its usage with reference to information? Were there any restrictions placed on the report when it was made available? Dr. LEY. Ordinarily, such items as this are provided to several com- mittees having oversight or general interest in agency operations. Some committees, without mentioning them, I think have files that are as good or sometimes better than ours. Senator NELSON. May I respond to that question so Senator Dole will have it clear? Dr. LEY. Yes, sir. Senator NELSON. The statement, the release was made public to the medical press. After it was made public, the committee counsel, who PAGENO="0234" 5706 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY is very alert, sought and got copies of what was public knowledge. It was available to the minority just as well as to the majority. I might add to that that all statements that come from the witnesses are supplied to the minority. If we find some information separately, apart from that~ we have no obligation to distribute it to the minority, any more than the minority distributes some independent information furnished by a drug company. Senator DOLE. Let me say in response to that that I was not under the impression these are partisan hearings. If Mr. Gordon is not pro- fessional staff and does not wish to furnish information, we will take proper steps to require the information be furnished. Senator NELSON. The information was made public, Senator. Senator DOLE. Part of the information was made public. The same is true of statements of every witness. They come to us at 5 o'clock the day before the hearing or later. Senator NELSON. If you have any instance that you are not getting it, call it to my attention. I was conducting hearings for 2. years, Sena- tor, long before you came here and I have never heard any compliant. Senator DOLE. That is because no one ever showed up on my side. Senator NELSON. That is my fault; is it, sir? Senator DOLE. No; but I intend to be here. If we are going to con- duct these hearings in the public interest, we had better erase the partisan lines and- Senator NELSON. If you want to call a meeting of the committee to describe any specific unfairness or injustice that is done, Senator, I will be glad to attend it. If you have a specific case in mind,, make it specific. Let's not have general charges that you cannot support. Senator DOLE. I have attended many sessions and perhaps it is time that we have some understanding on how we divide the time on this committee, not 99 percent to you and 1 percent to others who may attend. Senator NELSON. I am here 99 percent of the time alone and we have not decided to give it to the majority or the minority. Senator DOLE. We can remedy that, too. There is a report from Alabama; I don't know when that was fur- nished to the committee. It has never been made available to the minority. We have not had a chance to review that report. Senator NELSON. That was not `sent to the committee at all. It is a public document that anybody alert can get. I regret very much that the other side has not been conscientious, `but this is not part of any testimony. I do not think that everything I am able to discover or read I am obligated to spoon-feed to anybody else. All documents, all testimony, goes to the minority. If you have any complaint about that, be specific about it. Senator DOLE. I have mentioned a couple of specific things now. Senator NELSON. What were they? Senator DOLE. The Alabama report. Senator NELSON. That is public in Alabama. We sought it and got it. Senator DOLE. If we are going to operate as a committee, we should operate as a committee. If you are going to operate as a one-man act, we ought not to call it the Monopoly Subcommittee. We ought to have a hearing on the monopolistic activities of the majority if we are going to get into this. PAGENO="0235" COMPETITIVE PROBLEMS I~ THE DRUG INDUSTRY 5707 Senator NELSON. Fine. You set the date, Senator, and I will be there. Senator DoLL. Today we are going into an area involving a legisla- tive matter pending in another committee. The question with refer- ence to the peer review committees has been discussed at great length. As one member of this subcommittee, there may be some merit to this suggestion. I am not certain whether the FDA could ever be in a position to supervise all of the new drug investigations. But I was curious in reading a statement that there are some 15,000 new drug investigators. Who are these people generally? Are they etigaged in phase 1 or phase 2 or phase 3 of the investigations? Dr. LEY. Senator, they may be engaged in any one of these phases. Customarily, we find more frequently the general practitioner engaged in phase 3 testing which has as its objective, indicated in the testimony, to determine the effects of the drug as it would normally be given in clinical practice. So we do have this provision. But this is only in very general terms. We may have certain people with general medical backgrounds doing a type of work that we consider quite appropriate, what Dr. Stough is doing in Alabama. Senator DOLE. What field is Dr. Stough in? A general practitioner? Dr. LEY. Dr. Stough's training was that of general medicine. Senator DOLE. Is he engaged in that practice now? Dr. LEY. He is not. His total activities are those of drug testing. In this sense, he is unique among-not totally unique, but a rare ani- mal among the total group of investigators. Senator DOLE. Do you have a list or catalog of 15,000 investigators? Is that material available? Do you keep a record of those? Dr. LEY. We have this material. It is not as convenient or accessible as we wish until we finish the computerization of it. But it is available ~n part in our file. Senator DOLE. These are on a State-by-State basis, I assume? Dr. LEY. No, we do not have a breakdown on this basis. These are some of the problems we hope to solve by the computerization of the file. It is on an alphabetical ground, I believe. I am pleasantly surprised. The staff tells me that the names of the investigators are presently computerized. The additional information about training facility, and so forth, is not yet available by that basis. This is availthle, but it requires deep research of the record. Senator DOLE. What purpose is served by your having a list of all the investigators? Do you review that list occasionally? Dr. LEY. Two purposes, Senator, are served by this list. First of all, we may by this technique identify those investigators who have the largest nnmbersr of investigations in progress. Second, it gives us the opportunity, if the man whom we disqualify is listed as an investigator by a sponsor, to say no, you may not utilize it. It serves these twc func- tions. Senator DOLE. Do you have any record of the compensation paid by, say, Dr. Stough to the clients he has? Dr. LET. No, that is not part ofour record in any place. Senator DOLE. There is no effort made to determine that? Dr. LET. I do not think that would be a legitimate item under the regulations or the law. I would have to turn to Mr. Goodrich. PAGENO="0236" -~57O8 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Senator Doi~ii The reason I raise the question is because of an earlier question by the chairman, that it is a temptation on the part of the investigator to make improper findings depending on whom he repre- * sented. It might also be a factor in the amount he is paid. I also understand that he made reference to a certain prisoner in Alabama who perhaps was paid too much for participation in testing. I am wondering what he was paid, what the going rate was in Ala- bama. Perhaps this may be in the report which we may receive. Senator NELSON. $1 a day. Dr. LEY. Dr. Lisook tells me that the fee varies depending on the test, and I suspect, as usually is the case, on the number of times the prisoner has to be bled. But an average figure across the board would be somewhere about $1 a day. Senator Dor~. I understand that in the State of Kansas, there was some testing done in the Kansas State Prison at Lansing, but it was terminated by prison officials partly because prisoners could make more money taking pills than by working and some preferred to stay in their cells and take pills than engage in any other activity. I also understand that in the State of Wisconsin, one of the prisoners has gone to court demanding the minimum wage. Senator NELSON. A very progressive State. Senator DOLE. Right; but it is a very real factor and I am not cer- tain whether you can compensate anybody properly. I assume all the tests, most of the tests in institutions are in the phase 1 category, is that correct? Dr. LEY. Most of the prison-type testing is in phase 1; yes, sir. Senator DOLE. Now, out of 15,000 new (1mg investigators, there have been a total of 11, I guess, suspended. I assume there are two possible answers. One is that this is only one-tenth of 1 percent of the total, that the obvious response `might be that you do not have an opportunity or the facilities or the funds to properly review the other 14,989. Is that a fair assumption? Dr. LEY. I am not satisfied with our total effort in this area today, Senator. This is a problem, of course, with every administrator, trying to balance one need against another. I would like to see more effort in this. On the other hand, I do not believe that anyone can be expected to visit every one of the 15,000. There are other aspects to this overall problem that are equally important. Another one would be that we need some more effective means of getting information directly to the clinical investigator. This pamphlet is an example of the effort, of our direction. It is not a translation in terms of lay language. But it is a good job. I would like to see this type of information distributed more widely to the investigators by FDA rather than rely totally on the sponsor to provide this. But there are educational actiyities which are very important in this area which I think `we should be doing more of. Senator DoLE~ Well, assuming that a law is passed, the one the chairman is interested in, now pending before another committee- this is not a legislative committee-there is still no assurance there would not be some mistakes. The passage of a law in itself does not assure anything. Second, there should be a presumption that drug companies are seeking good quality drugs and that the investigators are generally PAGENO="0237" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5709 men of integrity, assuming there may be a few who do not follow the regulations. This may also be true in politics and in other things. But there is not any ironclad way-this is the point-to make certain mistakes are not made. There is always that possibility that we are going to make mistakes in whatever we do. Do you have any suggestions in addition to the two specific sug- gestions you make on page 11 and the one you discuss on page 7 with reference to the peer review committees? But I believe as one who is, as has been noted, a very junior member of this committee, that the steps that have been taken have merit and they will be met with some opposition, but at least we are stepping off in the right direction. Senator NELSON. I guess I asked you, do you know how many IND's are currently pending? Dr. LEY. There are currently approximately 2,700. Senator NELSON. In the past 12 months, how many IND applications have been submitted? Dr. LEY. 900 during this last fiscal year. Senator NELSON. How many IND's does Dr. Stough's corporation have? Dr. LEY. 114. We would have to do a search to provide the informa- tion for the record on how many are currently active this past fiscal year. That we can provide. I do not have it immediately in front of me. Senator NELSON. I would appreciate it if you could submit to the committee the IND's that Dr. Stough has had submitted and handled in the past 3 years vis-a-vis all others. Dr. LEY. We will be pleased to make this available. Senator NELSON. Then the number of people involved if you have that. Dr. LEY. This will be available. Senator NELSON. Could you submit the same for the next four or five investigators with the largest number of IND's? Dr. LEY. There is no problem with this except for the total number of subjects. This will require considerable effort. All right; yes, sir. Senator NELSON. You may submit that for the record.1 Counsel has some questions. Mr. GORDON. Dr. Ley, in your statute, you have something about obtaining a signed agreement from each of such investigators that patients to whom the drug is administered will be under his personal supervision or under the supervision of investigators responsible to him; also, that it is necessary to obtain the consent of such human beings or their representatives except where they deem it not feasible or, in their professional judgment, contrary to the best interests of such human beings. Last summer, the Washington Daily News carried a series of arti- cles on testing of drugs on humans. Let me read some of it to you. In 1963, Welfare Department physicians tested two new drugs on 67 elderly patients `at `the city's District of Columbia Village facility. 1 See pp. 5~678-5679. PAGENO="0238" ~571O COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY The tests were part of what the Washington Daily News' has found to ~e a pattern of clinical research with humans, but possibly more important, they may depict the ithpotence of regulations in the field. The trials with the drugs were conducted nearly 16 years after an inter~ national tribunal had set the norm that humans `must volunteer to take part in medical experiments and months after this norm was codified by the United States, yet the Welfare Department physicians did not seek individual consent from the `patients involved. Then further down: Welfare medical director Dr. J'ack `Kleh claims drug tests did not undergo the 4lepart'ment's review policies because they were "controlled by `the Food and Drug Administration and was, therefore, in the scope of responsibility of the research committee." Yet a FDA spokesman claims that they only "monitor" such tests and the `burden of obtaining releases' from patients is placed squarely on the drug `company involved and t'he physicians it engages `to conduct the tests~ Dr. Kleh reports these two drugs were handled `by Welfare Department doctors. Now, I understand that in `orphanages, children-at least occa- sionally-are used for human experiments. What I would like to know is how does this problem of informed consent apply to elderly patients in institutions or to children? Dr. Li~. The consent in this category `o'f elderly patients and chil- dren is a difficult problem. If you turn to section 130.37 of our regu- lations, we have a definition of consent which means that a person involved has legal capacity to give consent and so situated as to `be able to exercise free power of choice and is provided with a fair explanation of pertinent information pertaining to investigation of drug, et cetera. Obviously, this definition does not apply to the case of children or to persons who might be not in full possession of their mental facul- ties. This is a very serious and controversial area of discussion among medical investigators today. There are many studies that should be done in children if children are to receive the drugs which `are available to the adult. Under normal circumstances, the guardian of the child has the right to provide consent for participation by the child in such studies. Similarly, in the case of a person who is incapacitated, senile, or otherwise not mentally capable of giving consent, the guardian or 1)earest relative would have this power to grant consent for investiga- tional study. Mr. GonroN. Dr. Ley, who is the guardian of, say, a retarded child in an institution? Dr. LEY. This would depend upon the situation. If the child's pa- rents are alive, I believe the parents would be the legal guardian. I would have to turn to counsel for further comment on it. Mr. GOODRICH. That would vary from State to State, Mr. Gordon. In some instances, the superintendent of the institution would be the legal guardian; in other instances, the director of welfare. But in all instances, there would be someone'who would be the legal guardian. Mr. GORDON. But the point here, I think, or at least one of the points is that the relationship between a parent and his or her child would not be the same as a legal guardian to one of his wards, say a superin- tendent of an institution. I do not think he would have that love or feel- ing toward the child. The situation is quite different, I think, In another article in the same series, a doctor claims that there is a widespread practice of using institutionalized patients and indigent persons in public hospitals `to try out medical techniques which physi- PAGENO="0239" COMPETITIV~~ PROBLEMS IN THE DRUG INDUSTRY 5711 cians would not attempt on private patients or persons in a private hos- pital. Would you comment on that ~ Dr. Lriv. I can only comment to the extent that the words used in that article are obviously the opinions of the writer. I would like to state that the peer review approach which the Public Health Service has been utilizing for its research grants and these regulations on informed consent have done much within the past 2 years to modify this cir- cumstance. I would also like to go emphatically on the record, because FDA was responsible for one study in the District of Columbia Village complex, that one study was conducted with full regard to patients' consent and informed consent was obtained with every subject in that particular study. That was the only study that FDA had direct re- sponsibility for. (The articles referred to follow:) [From the Washington Daily News, June 24, 1968] OLD STANDARDS AND NEW THINKING ON TES~INo-4JLINIOAL RESEARCH ON HUMANS: INE OTIVE LAws (By Nicholas Horrock) In 1963, Welfare Department physicians tested two new drugs on 67 elderly patients at the city's D.C. Village facility. The tests were part of what The Washington Daily News has found to be a pattern of clinical research with humans, but possibly more important, they may depict the impotence of regulations in this field. The trials with the drugs were conducted nearly 16 years after an international tribunal had set the norm that humans must volunteer to take part in medical experiments and months after this norm was codified by the United States, yet Welfare Department physicians did not seek individual consent from the patients involved. Tho both drugs were new and not approved for public sale, the Welfare Department's Research and Education Committee did not first review the projects and doctors neither sought nor received individual permission from the patients to conduct the tests. EXPLANATION Welfare Medical Director Dr. Jack Kleh claims the drug tests did not undergo the department's review policies because they were "controlled by the Food and Drug Administration and was therefore not within the score of responsibility of the Research Committee." Yet an FDA spokesman claims that it only "monitors" such tests and the burden of obtaining releases from patients is placed squarely on the drug company in- volved and the physicians it engages to conduct the test. Dr. Kleh reports these two trials were handled by Welfare Department doctors. One of the two drugs, a pain killer produced by Squibb Company, has never been cleared for public sale. Dr. Kleh suggests it may have been withheld because it caused gastric disturbances in patients. But he strongly argues that neither of the two drugs was dangerous nor had ~`serious adverse effetcs." (The other drug tested was a psychotrophic agent used to control "agitated" senile patients. Developed by Wallace Laboratories, it was later approved for public sale.) OUR PROBE During the course of a two month investigation, The Washington Daily New~ has found a series of tests such as the 1963-D.C. Village experiments, a pattern that includes trials of such concoctions as a diet pill, a patent medicine, a shampoo and an acne treatment. In a number of the tests it was difficult to discover any logical benefit to the patients involved, in others It was impossible. Subjects for these experiments included juvenile delinquents, retarded children and retarded adults. PAGENO="0240" 5712 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY The Welfare Department was unable to document that obtained consent of patients or relatives in a number of these tests. There are nearly 4,000 persons in the city's welfare institutions, most of' whom cannot legally give their consent to anything. They are, in effect, a captive audience; totally dependent upon the Welfare Department for medical care. They cannot choose their physician, approve or disapprove of a treatment technique or agree or disagree to take part in a medical experiment. OLD STORY The controversy over regulating medical experiments with humane is not new. Nor is the aspect of controlling experimentation on humans in institutions. In 1948, the Nuremberg military tribunals set forth a 10-point code for clinical research with humans as a reaction to the horrors depicted in Nazi death camps. The first point reads "The voluntary consent of the human subject is absolutely essential." Despite the semantic strength of the "code," it was more than 15 years before the philosophy of getting a patient's consent was actually codified in the United States. It was not until Congress passed a series of amendments to the Food, Drug and Cosmetic Act which strengthened control over the testing and marketing of new drugs. Specifically the legislation empowered the Food and Drug Administration to require drugs be tested for efficacy as well as safety and set down a framework of required "clinical" investigations. HILL ACTION New York Sen. Jacob Javits was successful in attaching a rider to this bill which required that the doctors employed by the drug companies or other testing agency explain the test to a patient and obtain consent. The 1962 law, however, actually shut only a few doors. In the initial regula- tions written by FDA, the manner of consent, that is whether written or oral, was not specified. J~urthermore it permited doctors to waive getting consent when they believed it was "justifiable" not to inform a patient. At the same time human experimentation regulations have been painfully evolving, medical research in this country bad skyrocketed. Freeman H. Quiniby, a science research specialist at the Library of Congress, prepared a report for Sen. Javits last year that found the American drug and medical research industry was spending 20 times as much in medical qxperimenta- tion than it had in the 1940's. He estimated the gross expenditure at $2 billion. He also found: "a growing need for larger numbers of human subjects per clinical trial so that the efficacy, side effects, and precautions for the increasing volume of the new drugs and biologicals can be established with statistical rigor before approval for general use by practicing physicians." Dr. Henry K. Beecher, a Harvard medical professor, and critic of the standard of medical ethics in research work claims physicians are doing research work under other pressures: "Medical schools and university hospitals are increasing dominated by (medi- cal) investigators. Every young man knows that he will never be promoted to a tenure post or to a professorship in major medical school, unless he has proved himself as an investigator. If the ready availability of money for conduct research is added to the fact, one can see how great the pressures are on an ambitious young man." In 1964, the World Medical Association met in Helsinki, Finland and adopted a set of standards for research on humans. This was later called the "Declaration of Helsinki," and won quick support from major U.S. medical associations. It specifically noted that consent should be obtained from relatives or legal guard- ians if the patient was incapable of rendering it. It said written consent was preferable. TROUBLES But two years later, when FDA Commissioner James Goddard issued a policy guide calling for "written consent" forms, the medical associations weren't so ready to go along. "It is impossible for the commissioner to codify realistically, in the form of a policy statement, the legal requirements for valid consent under the myriad PAGENO="0241" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5713 varying circumstances which exist . . ." wrote American Medical Association Executive Vice President Dr. F. J. L. Blasingame. In a sense the variation in attitude reflected a mainstream of the human experimentation argument. The medical profession has generally taken the position that it must regulate itself and that stiff inflexible laws on experimentation would retard medical research and are unnecessary. [From the Washington Daily News, June 25, 1968] RIGHTS OF TEST PATIENTS VERSUS SoCIETY's GOOD-MEDICAL TEST DILEMMA: WHOSE NEED GREATER? (By Nicholas Horrock) Willowbrook State School rambles lazily over wooded acres on the Jersey side of Staten Island in New York. It is, many people guess, `the lai~gest institution for care of the mentally re- tarded In the world and its crowded dormitories house more `than 5500 youngsters. It has also become a symbol in `a national controversy over the use of human in medical experimentation: over what one New York State Senator charges has turned the children of Willowbrook into "human guinea pigs." ITS USE Twelve years ago a team of research physicians from New York University began a series of investigations into the cause and tre'atment of hepatitis and measles. Among `the methods employed in research was the purposeful giving of hepatitis `and measles to children in `the institution. Outside `of medical journals `the testing received little critical or public aliten- tion until 1965 when a Harvard physici'an, Dr. Henry K. Beecher, mentioned `the experiments in an attack on `the medical ethi'cs surrounding human research. The following year, however, State Sen. Seymour B. Thaler, a lawyer and Democratic representative of Queen's residential Forest Hills `area, charged the manner in which the tests were administered was unethical. "The price of being poor or mentally incompetent in New York State," he argued in a recent interview, "is being a human guinea pig. "I suspect this largely true thruout the country." He claims that `there is a widespre'ad practice of using institutionalized pa'tients and indigen't persons in public hospitals to tryout medical techniques w'hich physicians would not *attem~t on private patients or persons in a private hospital. But along with Sen. Thaler's charges comes a dilemma. `Can `the medical re- sea'rch be regulated to protect humans enlisted for `tests without stifling the progress for which s'o many millions are grateful? Physicians, both those in research `and in patient care, maintain `that at some point all drugs and all new techniques must be `tested on humans. They claim `that if these tes'ts had not been conducted such drugs as quinine and measles vaccine could not be used. Last year Sen. Thaler introduced two bills designed `to control human experimentation. One of them, which a national drug publication suggested m~gh't be a "model for legislation in other states," called for voluntary informed consent in writing in all experimentation. It barred p'arents from offering up `their children to medical experimentation unless it was `an "emergency" in "which immediate treatment was necessary for the physical or mental ailment with which `the subject was suffering" and made court review mandatory for `other experiments on minors. The bill, Sen. Thaler said, "got nowhere. Everybody w'as against it." He said it met widespread opposition from medical societies and from the State Depart- ment of Mental Hygiene. He then introduced what he regards as "compromise" bill calling for "registra- tion" of all research projects, disclosure of where the financial support comes from, written consent of pa'tien't or guardian, review of projects by a State Health committee, and medical "insurance" for `any subject who `suffers further illness as a result of the test. 81-28O--43O----~t. 14-16 PAGENO="0242" 5714 COMPETITIVE PROBLEMS IN TUE DRUG INDUSTRY This legislation, Sen. Thaler said, got a "little farther." It passed `the Senate, bu't was defeated in the state assembly. He has reintroduced the measure and called for public hearings on experimentation in the state. MAJOR CRACK By scheduling hearh~gs at which state hospital `officials, medical associations and individual doctors can testify, Sen. Thaler may have opened the first major public debate `on the need for legisl'a'tion to control human experimentation. It is a debate in which Dr. Saul Krugman feels his position is already clear. "The most imj~ortant factor in assuring ethical and careful medical experimen- tation is to have physicians wi'th great integrity." Dr. Krugman is the physician in charge `of the Will'owbrook experiments and to him the `attack levelled by Sen. Thaler `and `the news media w'as uninformed and ruthles~ly harmful to' medical science. "No one ever came to me and asked about our work. Sen. Thaler never called me. The first I heard of `the charges was when a newscaster called me at 11 a.m and asked me to prepare a retort by `t'he 6 o'clock news." sciuxon According to Dr. Krugman, the Willowbrook experiments were `approached with `the greate'st of scientific care and responsibility. He claims `the pro'jec't was cleared by University Hospital officials, sta'te school doctors and review boards of Federal `agencies and that furthermOre `the physi- cians had permission of the parents. Dr. K'rugman acknowledges `that the method of `obtaining consent has changed, and n'ow reports `that a doctor take's time out to brief parents carefully on all aspects of the experiment before con'sent is asked. It is still obtained in writing, he said. [From the Washington Daily News, .Tune 26, 19681 SELF-DIsCIPLINE OR FORCE OF LAW ?-THE RACE Is ON TO REGULATE MEDICAL TESTS (By Nicholas Horrock) The Department of Public Welfare this week is expected to release a new policy proposal governing the use of human beings under Its care in medical research. T'he policy review was instituted by Dr. Jack Kleh, Welfare medical director, after a series of articles in The Washington Daily News revealed that retarded children, juvenile delinquents and the elderly were being used in tests of such drugs as a diet pill compound, tranquilizers an acne treatment and a patent medicine. In many o'f these cases, `the department could not document that it sought or received the consent of the patient or the family; in other cases it acknowledged it did not. In its reviews, `the District's Welfare Department has' embarked on a problem which has received ever-increasing attention by legis'lators', physician's, and the general pnblic. Thru a series of interviews with doctors here and in other states, lawyers~ and legislative experts, The News developed `these points of s'tr'es~. `Consent-The bulwar'k protection encompassed in all treatises on human experimentation since 1946 is "consent." It is `a philosophy that a person must understand the hazard of `the drug o'r operation he will undergo and must "con- sent" voluntarily to take part. Many research physicians argue that the layman cannot truly comprehend the risks of an experiment and that "informed" consent is often impossible, yet it has remained an unwavering requirement. Institutionalized guinea pigs-Medical researchers as well as many other sources contacted maintain that the human in an institution, (the prisoner, the mental patient, the retarded), present special problems to a reseacher looking for subjects for an experiment. The British, for example, virtually exclude all these persons from medical experimentAtion at all. PAGENO="0243" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5715 As one British physican serving with a government organization here explained it, even the use of inmates of a penitentiary in med~ca'l tests raises serious ques- tions about whether the subject actually "volunteered" or was pressured to get involved because of the promise of reward. He said that the absence of absolute quality of consent among prisoners undermines their scientific value for experimentation. Possibly more important, however, was his opinion that medical research In Great Britain has not been retarded by the stiff standards in selecting subjects for tests. Discipline-Herein lies the nub of the greatest controversy about medical experimentation. Who decides if a test on humans is necessary, if consent is "informed" and if all other procedures are valid. By and large the medical profession both here and abroad have jealously guarded its right to decide what's good for the public. But other voices are creeping in. In New York, a state sen~tor is proposing a law to oversee human experimenta- tion; in other areas laymen (ministers, social workers) are being placed on medical research review committees to take part in review of projects. Critics of the medical profession claim its internal discipline is not strong enough to afford the public real protection against the incompetent or over- zealous researcher. They cite, for example, one of the few instances in which physicians have been "censured" for research foul-ups-a New York case in which two doctors were given a year's "probation" by the state licensing agency for administering live c~incer cells to patients without consent. As one critic charges, "These doctors never even lost a day of practice . . . is that disciplining them ?" He and others foresee a race in which the profession moves to tighten internal controls before the lawmakers take over. Senator NELSON. That is a rolicall. I will have to leave. If there are `any questions from either the minority or the majority or any of the members, if they want to submit them to Dr. Ley to respond for the record-yes, Mr. Duffy. Mr. Dtirr'y. Doctor, there has been some considerable publicity about ~ study that FDA has released recently. If you would care, perhaps you might submit a statement in regard to that. Dr. LEY. I `would not wish to submit a statement as Commissioner, because that is a very preliminary study. My staff will not finish com- ment on it until September. At that time, we probably will have a statement. Mr. DUFFY. All right, `thank you. Senator NELSON. That will conclude the hearing for today. (Subsequent information follows:) WAYNE STATE UNIvERsITY, Detroit, Mich., October 28, 1969. Hon. GAYLORD NELSON, U.S. Senate, Old Senate Office Builaing, Washington, D.C. DEAR SENATOR NELSON: It has come to my attention, through Geoffrey Cowan of the Center for Law and Social Policy in Washington, that your Committee is about to publish recent hearings with Dr. Ley and other data about new drug testing. I would like to urge you to include our critical review of proposed FDA regulations for peer group review of clinical investigation of new drugs in human beings. These recommendations to FDA from the Council of Health Organiza- tions were prepared by myself and Dr. Henry K. Beecher. They include a proposal to strengthen the entire area of new drug evaluation with special reference to protection of human subjects and scientific adequacy of testing. The Council of Health Organizations which has undertaken to advise in this matter is composed of three organizations, the Medical Committee for Human Rights, Physicians Forum and Physicians for Social Responsibility, comprising approximately 10,000 doctors, nurses and other health professionals. I will ask our Washington counsel to forward our full statement to you for consideration. PAGENO="0244" 5716 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY The impact of the Nelson Committee is excellent in the health institutions which I have visited recently. Sincerely, PAUL LOWINGER, M.D., Associate Professor. COMMENTS OF THE COUNCIL OF HEALTH `ORGANIZATIONS ON PROPOSAL FOR PEER GROUP COMMITTEE REVIEW OF CLINICAL INVESTIGATIONS OF NEW DRUGS ON HUMAN BEINGS On August 22, 1969, the Food and Drug Administration published a Notice of' Proposed Rule Making concerning Peer Group Committee Review of Clinical Investigations of New Drugs on Human Beings. 34 Fed. Reg. 13552-53. The notice stated that interested persons had 30 days to submit written comments on the proposal. By letter of September 17, 1969, the Council of Health Organizations ("The Council") requested an extension of time for the filing of its comments. A 30-day extension was granted. The Council is a coalition of medical organizations, including the Medical' Committee for Human Rights, The Physicians Forum, and Physicians for Social Responsibility. The Council represents the interests of more than 10,000 health personnel on issues of national health policy. The Council and its constituent organizations are concerned with the social aspects of health care and the' responsibility of the health professions in the society. Since many of our members are actively engaged in new drug testing, the Council has a special interest in the FDA's methods of insuring the safe and effective development of new drugs. We are familiar with the tragic consequences of unsafe or inappropriate new drug tests. We know that testing must be more effectively regulated, not oniy in order to produce good scientific data, but also to protect the safety and welfare of the human test subjects. The drug industry appears to share this view. The drug manufacturers and new drug investigators who had filed comments on the FDA's proposal by the time these comments were prepared, do not question the basic thrust of the proposal-more effective review of n~w drug tests on human subjects. The Council considers the FDA's proposal grossly inadequate. While it appears to recognize the problem, the proposal is hopelessly fragmentary and vague.. Unhappily it does not represent a meaningful step toward effective regulation. On behalf of thousands of members of the health professions who have a professional interest in adequate drug testing, the Council urges the FDA to reconsider its proposal and `to seize this opportunity to take effective action. In these comments the Council will analyze the problem of new drug testing' on human subjects, set out the inadequacies of the FDA proposal, and suggest some methods for establishing meaningful review committees In the preparation of its position, Dr. Henry K. Beecher served as a consultant to the Council. A statement released by Dr. Beecher on October 6 regarding the FDA proposal is appended thereto. I. THE PROBLEM The ethical and practical problems inherent in new drug testing on human sub- jects pose a dilemma which requires great sensitivity to resolve. America prides itself on new developments in medical science and people have come to expect' new scientific advances each year. Doctors and patients across the Country anx- iously await the development of new drugs-yet for all those who await the benefits of new drug testing, who Is willing to share the risks? The FDA must daily deal with the tension between the government's obligation to safeguard the rights and safety of test populations and its obligation to assure that the' safety and efficacy of new drugs has been demonstrated by human experimenta- tion before new drugs are made available to the general public. As members of~ the health professions, the members of the Council Of Health Organizations ap- preciate the difficulty of finding suitable a'nd acquiescent patients, of fully in- forming them of the nature of the test and bow `it may affect them, and of pro- viding adequate medical supervision once a test Is underway. The welfare and safety of the test population for new drugs has never been' adequately protected. Every few years some freshly revealed drug testing abuse shocks the conscience of the nation. The studies conducted on prison inmates by Dr. Austin Stough have been the focus of recent attention. Five years ago the' public was aroused by the case of 22 elderly, seriously ill pa1~ients at the Jewish' PAGENO="0245" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5717 Chronic Disease Hospital In Brooklyn who were injected with live cancer cells as a part of a research project. In 1966, Dr. Henry K. Beecher published under the title "Ethics and Clinical Research" in the New England Journal of Medicine, 274:1354-1360, a study of 22 cases of questionable testing practices. Those of us in the health professions know that the pressure on a new drug investigator to produce results are often so intense that It is all too easy to treat subjects in an assembly line fashion. Moreover, the Investigator, by virtue of his role, does not have sufficient detachment to weigh objectively the sensitive ques- tions involving the rights and welfare of the human subjects of his tests. These problems are most acute in tests involving the poor, the dispossessed, and the helpless. Since few people are anxious to participate in medical experi- ments, drug investigators understandably make heavy use of those people least able to resist the investigator's request. Such people are especially valuable to the investigator when they can be tested and observed in institutionalized settings such as orphanages, prisons, mental hospitals, and homes for the elder- ly. Experiments in hospitals also tend to utilize the poor since they are, in effect, wards of the state and have no private physician to protect their interests. The FDA's 1967 regulations requiring informed patient consent (21 CFR § 130.37) address this prob1em-~but they do little to protect society's outcasts. What does it mean to require the informed consent of orphans, the senile, the mentally ill, or their respective guardians? How much information must they be provided? What kind of independent decision can a prisoner make when he believes that his consent will secure favorable treatment and better prospects for parole? Some outside group, independent of the investigator and the new drug sponsor, is needed to protect the rights and safety of human test populations. The FDA has proposed that "peer group committees" be established to func- tion as an independent reviewing body. We agree that much good could be accomplished by an experienced, Independent review committee operating under a clear mandate to safeguard the test subjects' rights, safety, and welfare. Yet the FDA proposal would not establish such groups. The National Institutes of Health have led the way in the development of peer group committees to review experimentation with human subjects. In a well- thought-out pamphlet entitled "Protection of the Individual as a Research Sub- ject," Public Health Service, May 1, 1969, the responsibilities and characteristics of the peer group committee are set out in considerable detail. The peer group review committees proposed by the FDA are loosely patterned after the PBS-NIH peer groups, but the detailed provisions of the PBS-NIH scheme-which assure the effectiveness and independence of the PHS-NIH peer groups-are omitted from the FDA proposal. What is more, while it may make sense to establish a peer review committee in a hospital or university setting, the FDA proposal does not address itself to the difficult problems of adapting the peer group concept to such institutions as prisons or orphanages. It is arguable that the peer group review concept is inapplicable as a real solution to the problems of testing in institutions in which medical research is not normally carried on in a professional setting. Perhaps it will prove to be too cumbersome and expensive in practice. However, for the present, the review committee approach, if constituted along the lines proposed by these comments, holds sufficient promise so that it should be established. The Council recognizes the complexity of the issues involved in policing new drug testing. The Council proposes that the Food and Drug Administration, per- haps with the cooperation of the NAS-NRC, establish a procedure-which might include FDA hearings-for developing information and soliciting opinions which will enable the FDA to formulate a long-range strategy to assure the welfare of test subjects-including appropriate guarantee of the scientific necessity and adequacy of new drug testing. In conducting the study, the Food and Drug Administration should solicit the participation of public groups-consumer, patient, para-professional, and health care groups-as well as drug manufac- turers and new drug investigators. Detailed information should be accumulated on new drug testing: which kinds of institutions are most frequently used; which classes of the population normally are used for new drug experimentation; what percentage of new drug tests are conducted in scientific and professional settings as opposed to other institutional settings; what percentage of new drugs are tested by individual practitioners not operating in any institution. The inquiry should explore the way that the peer group review system has operated under the NIH-PHS system. PAGENO="0246" 5718 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY The FDA should also consi~Ier alternative ~r supplemeptal approaches to thia problem, including solutipps Which are less oriente~i toward individual institu- tions than the peer group review committee~ It may be that the FPA jtself should set up a number of regional panels to oversee and review the testing of new drugs. II. ANALYSIS or FDA PROPOSAL AND SUGGESTED AMENDMENTS The FDA Peer Group Committee proposal was apparently developed in the wake of the testimony of Commissioner Herbert Ley on August 12, 19(39, before the Subcommittee on Monopoly of the Senate Select Committee on Small Busi- ness. In testifying on the use of human subjects for new drug testing, Commis- sioner Ley stated that the FDA was developing a "peer group" proposal, which, he indicated, would help insure the scientific adequacy of new drug tests and help protect the rights and safety of test populations. While the Council agreea that action is sorely needed in both of these areas, the Council submits that the proposed peer group committee proposal does nOt deal effectively with either. Our major objections fall into four categories: 1. The composition of the review committee would not assure sufficient com- petence or independence; 2. The responsibilities of the review committee are almost totally undefined 3. The authority of the review committee is undefined; 4. The range of the new drug testing situations covered by the committee proposal-which is limited to Phase 1 and 2 tests in institutional settings- is too restricted. The Council urges adoption in lieu of the proposed regulation, of a more detailed and carefully articulated system of review committees, to be imple- mented at once, to provide supervision of new drug testing in all appropriate situations. 1. Composition of the review committee (a) Criticism of' FDA proposal.-The regulations fail to spell out methods by which review committees may be selected to assure that the committees are truly independent and competent to review the testing of new drugs on human subjects. In the present FDA proposal, the selection process is totally undefined and the possibility that the committee would be a "rubber stamp" is left open. tithe entire committee apparently could be chosen directly or indirectly by the drug sponsor or by the investigator. Apparently the FDA anticipated that the selections would somehow be made by the institutions, though this requirement does not appear in the regulations.1 Even were It established that institutions would name their own committees, major questions about committee membership would remain. Neither the regula- tions nor Dr. Ley's testimony specify whether the committee members would come from within the institution itself, what their qualifications should be, or whether their qualifications could be reviewed by the FDA~ Other significant questions are raised by the FDA's use of the Public Health Service peer group committee model, since those committees are specifically de- signed for the unlversitie~, research institutions, and hospitals which do research with NIH funds. There Is reason to doubt that the same model without modifica- tion would suit the prisons, orphanages, or homes for the aged where new drugs are often tested. The NIH-PEtS program is grounded on the assumption that all members of the hospital community share a professional concern about experi- mentation with human subjects. As a result, the staff has the competence and motivation to make certain that the hospital selects a knowledgeable, concerned, and objective review committee. There Is no evidence that any similar widespread concern and competence exists In other kinds of institutions. As a result, an investigator operating in a prison or orphanage might have inordinate Influence in choosing the members of the committee. Furthermore, if the committee mem- bers come from within the institutions-as the NIH-PEtS committee members often do-there is little likelihood that they would have either the requisite Interest or competence. It is unclear who on the staff of a prison, for example, is 1 Dr. Ley testified before the Subcommittee on Monopoly of the `Senate Select Committee on Small Business on August 12, 1969, that the review committees would follow the model of the committees which the Public Health Service has required Institutions receiving NIH grants to establish. He said: "The peer group set up by the Public Health Service is a group of physicians, lawyers, ministers formally appointed by the instithtion-thè hospital in the present contract (siel, although it would be equally applicable to a prison situation- formally appointed as the reviewing body for all investigational work deaIing~ wIth kuman subjects tarried on in that Institution." PAGENO="0247" COMPETITIVE PROBLEMS EN THE DRUG INDUSTRY 5719 a "peer" of the investigator. In our view, to speak of a "peer group" in a prison is a non sequitur. For the review committee concept to work, the committees will have to be genuinely independent. The proposal paVs lip service to the concept of incle- pendence in requiring "assurance that the review committee does not allow par- ticipation in its review and conclusions by any individual involved in the conduct of the research `activity under review (except to provide information to the com- mittee)." But Independence requires something more, It requires that the com- mittee be selected in some objective manner and it requires that its members have a degree of experience and expertise which staff members at institutions like prisons and orphanages may not have or recognize. (b) The Council's proposal.-Some institutions in which new drugs are tested have preexisting peer group committees, established to meet the Public Health Service requirements. At present, most and perhaps all of those committees review all research done by their institutions, including tests of new drugs. If those committees are functioning adequately,2 they presumably could continue to oversee research on new drugs undertaken within the institution. This would avoid administrative duplication and help assure supervision by a group with some experience and sophistication. The names and qualifications of persons on such committees should be submitted to the FDA on Form FD 1571. For institutions which do not already have peer group committees, the FDA's regulation should establish guidelines for instituting review committees. A description of the selection process and the requisite qualifications for committee memberships should be Included. In prisons, orphanages, and homes for the aged, the institution staff would probably not include enough appropriately trained personnel to compose a competent review committee, nor would they have the expertise or resources necessary to select a review committee which could, in the language of the proposed rule, "assure complete and `adequate review of research. " Participation by the investigator or the sponsor of the research in the nom- ination or selection of peer group members should be explicitly prohibited in the regulation. The regulation should require among the members of the commitee at least the following: experts adequately qualified to assess the potential med- ical `benefits of the research and consider potential benefits against risks; an attorney selected, perhaps, by the local bar association; an independent physician having no connection with the institution or the investigator, selected, perhaps,. by the local medical association; qualified representatives of appropriate uni- versities; and representatives of the community. The names and qualifications of all members of the review committee should be submitted to the FDA on Form FD 1571 for its approval. The mode of selection of the ~ommlttee should also be explicitly stated. The FDA staff should be available to assist institutions. which lack the necessary competence in constituting a review committee. In some cases a single review committee might review the Pew drug testing in a number of Institutions in the same area. Several institutiçns might jointly establish a single review committee, or one institution might accept a cOmmittee established by another institution. 2. Responsibi'ities of the review committee (a) Criticism of FDA proposal.-Like the Public Health Se~vice peer group~ committees on which they were modeled, the FDA committee~ ought to have their purposes and functions carefully outlined in agency regulations. Unfor- tunately, the FDA proposal leaves the responsibilities of the review committees unspecified. There is, indeed, much confusion about the iapp1~opriate subject matter for the committees. In one sense their power seems v~ry broad: they are "responsible for initial and continuing review and approv~U of the experi- mental project ;" the investigator must "report to the comn~itee for review any emergent problems or proposed procedural changes which may affect the status of the investigation ;" and "no change will be made without committee 2The adequacy of the functioning of existing peer group committees is a matter which? the FDA should consider. 8 The Public Health Service states in a similar context: "The membership f of a review committee] should possess not only broad specific compe- tence t~ comprehend the nature of the research, but also other competencles necessary In the judgments as to the acceptability of the research in terms of Institutional regulations, relevant law, standards of professional practice, and community acceptance. The commit- tee's maturity and experience should be such as to justify respect for its advice and counsel." Pt-otectjon of the Indltncjual ae a Research Rubject, Public Health Service, May 1, 1969, p. 6. PAGENO="0248" 5720 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY approval except where necessary to eliminate apparent immediate hazards." Any "modification of the experimental design on the basis of experience gained" must also be made with the approval of the review committee. Yet just what all of this reviewing will mean is not clear. The central concern of the FDA proposal seems to be to assure the safety and welfare of human subjects of new drug tests. As stated in the preamble to the proposed regulation, the committees are to assure appropriate supervision and "adequate safeguards for the health of human [test] subjects." This is an appropriate function for an independent peer group committee and closely re- sembles the purposes of the Public Health Service committees. Commissioner Ley suggested in his testimony before Senator Nelson's Sub- committee on Monopoly of the Select Committee on Small Business on August 12 that the review committees would also provide a check on a test's scientific adequacy and necessity. This aspect of th~ review committee's role is totaly ambiguous in the FDA proposal. The scientific quality of new drug testing badly needs to be improved,4 and some consideration of the scientific adequacy and necessity of a new drug test is essential to a consideration of the rights and welfare of test subjects. (b) The Council's Proposal-The regulations should set forth in some detail the legitimate concerns and method of operation of the review committees. The review committee should, at the least, explicitly be given powers analogous to those of the committees established under the NIH grants. The NIH-PHS regulations require that its committees shall assure that- (a) the rights and welfare of the individuals involved are adequately protected, (b) the methods used to obtain informed consent are adequate and ap- propriate, and (c) the risks to the individual are outweighed by the potential benefit to him or by the importance of the knowledge to be gained." Protection of the Individual as a Research $ubject, Public Health Service, May 1, 1969, p. 1. All of these considerations deal with the welfare and rights of the patient population. The assessment of the relative benefits against risks also calls for some scientific expertise and understanding of the particular area of medicine in which the experimentation is taking place.5 The review committees will have to be especially vigilant to insure that, in the words of the NIH-PHS regulation, "adequate and appropriate" methods are "used to obtain informed consent." Major problems were left unresolved by the FDA regulations adopted in 1967 (section 130.37) concerning consent by test subjects. For example, obtaining the consent of children in orphanages and the senile in homes for the elderly is a delicate matter at best. Often their legal guar- dian is the state. Members of such groups would benefit from a review committee acting in their interest to make sure that the state safeguards their rights.8 The committee should also consider whether the information to be given to a test subject is adequate for him to make an informed judgment, in light of all the circumstances. There are other areas in which the review committee's responsibilities will be especially great. It ought to develop enough information to allow it to be satis- fled that the investigation provides maximum assurance of patient safety and that members of the test population receive adequate supervision and medical attention. 3. The authority of the Review Committee (a) Criticism of FDA proposal-No enforcement power is specified in the FDA's proposal. While the review committees are made "responsible for initial and continuing review and approval of the experimental project," the proposal does not describe what happens if a committee disapproves of a project. The The FDA can impose new testing standards by devices specifically designed for that purpose. The new regulations providing "Rearing Procedure for Refusal or Withdrawal of Approval of New Drug Applications and for Issuance, Amendment, or Repeal of Antibiotic Drug Regulations; Interpretive Description of Adequate and Well Conti~olled Clinical Investigations" which the FDA published in the Federal Register on September 19 are a useful step in this direction. (21 CFR § 130.12, § 130.14, and § 146.1). The Council believes that it can never be ethical to ask a person. to .take the risks associated with new drug testing if the tests themselves are unnecessary or will not, because of their design, yield significant results. Hence, any committee charged with pro- tecting the rights and safety of test subjects must have the capacity to review the scien- tific aspects of the tests. Indreed, it is arguable thrart such grourps should never be used In new drug testing where there is no expected benefit to the subject. PAGENO="0249" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5721 proposal provides no mechanism by which the committees could prevent the in- vestigators from taking what they regard as unwise action. Nor does it effectively give such power to the FDA itself, since the proposal provides no method for even informing the FDA of committee findings or concerns. When Senator Nelson asked how the FDA would know "whether the peer group was just perfunctory," Dr. Ley answered: "There would have to be as part of the submission of the investigational insti- tution to the sponsor and from the sponsor to us a statement that such a peer group existed, that such a peer group had reviewed the material, and that the minutes of the group were available and where. This is the minimum." Actually, this "minimum" is not included in the FDA proposal. The proposal does not require the investigator or the sponsor to insure that minutes either be kept or be made available. (b) The Council's proposal-The regulations should state that no new drugs can be tested without the approval of the review committee. When it does not approve of a particular aspect of a new drug test, the review committee should report its findings to the institution as well as the investigator. In appropriate cases the review committee should immediately reports its conclusions to the FDA. The review committee should analyze the testing program for research at the outset, before any work has begun. If the review committee concludes that any aspect of the program shows insufficient concern for the interests and welfare of the test subjects, it should be empowered to disapprove the program or require modification. In addition, the review committee should in a systematic way peri- odically review the testing procedures. The FDA proposal requires that the in- vestigator return to the review committee for review when he is changing his protocol. But it is equally important that the review commitee from time to time review the progress of the tests on the basis of reports from the investigator and other data. For example, other developments in the scientific community might obviate the necessity for the particular experiment being undertaken; or pre- liminary test results might reveal unanticipated danger to test subjects. The regulation should state that review committees should review the reports submitted by investigators to the new drug sponsors to make certain that such reports are complete. The review committee should also make a report detailing all of its findings and conclusions, copies of which should be sent both to the institution involved and the FDA. Minutes of review committee meetings should be kept and made available to the FDA on request. 4. Coverage of the review committees The most glaring omission of the proposed regulation is the failure of the FDA to deal with phase 3 testing problems or to provide a review mechanism for noninstitutional tests of new drugs. Any comprehensive `scheme adopted by the FDA to safeguard the rights of human subjects on whom new drugs are tested must deal with phase 3 problems as well as phase 1 and phase 2. In addition, the FDA should devise a method of bringing noninstitutional investigators under the surveillance of a review committee, perhaps through regional review committees. III. CONCLUSION For the reasons stated in these comments, the Council urges substantial revi- sion of the proposed amendments regarding peer group committee review. As presently drafted, the proposal gives the delusive appearance of dealing in a meaningful way with a major problem. See New York Times, August 13, 1969, page 1. The Council and its members are prepared to assist the FDA staff in the draft- ing of a meaningful review committee proposal and in undertaking an analysis of other approaches to this problem. (Whereupon, at 12 noon, the subcommittee adjourned, subject to the call of the Chair.) PAGENO="0250" PAGENO="0251" APPENDIXES APPENDIX I STATEMENT OF EDWARD R. PINCKNEY, M.D. I am Dr. Edward R. Pinckney and I am here at your request to discuss the ~rol*e of medical advertising in relation to the practicing physician's knowledge of drug use-that is, the role the pharmaceutical company plays in its attempt to influence rather than honestly educate the doctor who prescribes drugs, There is no question that drug advertising has a profound effect on both the cost as well as the quality of medical care by causing overuse and misuse of drugs. ~The one particular aspect of drug promotion I would like to emphasize is the role of the scientific medical publication that carries medical ads within its pages and the influence of those ads on the doctor, which eventually reflect on the health and safety of the doctor's patient. In the past 15 years I have been an editor of five different medical journals, ~including The Jo~rna1 of the American Medical As$oolation,. I have written, and had published, more than 100 scientific articles and editorials in medical journals, and I have written (jointly with another physician) one book for the medical profession. I have written four other medical books and authored a daily and Sunday newspaper column for the general public all stressing how best to utilize physicians, drugs, and other medical services. Academically, I have held professorial positions on the faculty of two medical colleges, and while teaching at Northwestern University Medical School, I was chairman of Pre- ventive Medicine and Director of the Comprehensive Medical Clinic. I have also been in the private practice of medicine, specializing in internal medicine. To begin, I would like to state that in spite of any laws or regulations that now exist that allegedly control medical advertising, it is my opinion that the primary responsibility for the ethical and accurate advertising of drugs to the medical profession lies within, and on, the editorial board-and especially the editor-of the medical journal that carries the advertisement. I say this because the medium of the scientific journal is really the only medium oyer which there can be peer control and especially because this is the one medium that can command the professional respect of the practicing physician. (Unfortunately, many physicians do not "respect" governmental agencies.) I unhesitantly state that the problems related to drugs, such as their use without proper scientific indication or the use of combinations that tend to cause more harm than good or even the dangerous "side effects" that offset the intended therapy, come more from the lack of ethical standards within the leading medical organization than from a manufacturer trying to make a profit from his product. To be sure, there is the standard cliche retort by some physicians that drug use can only be decided by the prescribing physician at the moment of diagnosis rand that only prescribing physicians can take into account all the various judgemental factors that exist at that time that lead to the drug to be used. Of course, there can be no argument about this; at the same time, it is my belief that this same physician's judgment has been wrongly influenced by what he has read in advertisements for the drugs he uses. And, since most physicians learn ~about drugs, especially the newer drugs, through advertising it is not wrong to concentrate on this medium of information. Mention must be made at this point of the "detail man * or drug company representative who visits the doctor personally to promote his company 5 prod- ucts. Even with laws on the books, it is virtually Impossible to control the detail man's "pitch." While it is a known fact that drug companies spend the major portion of their advertising dollar on "detail men," what is not ~often publicized is why. Simply put, this is the one approach to the doctor where there need be no negative emphasis on the drug being "pushed. I (5723) PAGENO="0252" 5724 COMPETITIVE PROBLEMS IN TIlE DRUG INDUSTRY can say, as a result of my own direct experience with "detail men," that rarely, if ever, do drug company representatives mention, let alone stress, the known side effects of the product they are promoting. I must also say, at the outset of my statement, that I really cannot blame the pharmaceutical manufacturer for trying to promote his product for profit; profit is primarily why he is in business. If someone has a product to sell, it is only natural that he wants that product to be known as the best there is and not, willingly, disclose any defects. But before you refute this opinion with still another cliche that drugs are different because they effect a person's health, `think how the law allows, and even exicuses, "puffing" in real estate sales where an entire family's health and well~being can virtually be destroyed because no one dares stop a real estate agent from grossly exaggerating the merits of a home that, after purchase, turns out to be a real "dud." So it is `that I feel strongly that if drug companies are going to be forced to be completely honest, the way to achieve this~ goal is not p'rimaril~7 through legislation but `through a form of professional control th'at is respected and followed by the medical profession. You have had legislative controls of drug ads on the books for years now and, even including the ones that went into effect last month, the result of the laws has not brought about any improve- ment as `shown by lessened drug reactions, hospitalizations as a result of over- use, and misuse, `of drugs and really, wb'at is worst of all, failure to be cured because of use of the wrong, or ineffective, drug (an example might be the use of an antibiotic against a bacteria that is resistant to the drug, or the use of a drug without providing the proper environment). What we have not had, however, no matter what you may' bear, is absolute professional control over the way a drug is advertised; control that is depended upon by physicians because they respect the authority in control. Again, it is my opinion that the majority of physicians learn about new drugs through advertising as opposed to postgraduate courses on drugs or scientific articles in medical journals. And the relation of drug information on adver- tising pages compared to editorial pages offers a good example of what I mean. A randomly selected issue of JAMA (as The Journal of the American Medical As ~ociation is best known) contained advertisements for nearly 100 drugs and other therapeutic products. Wi'thin that same issue of JAMA, the editorial sec- tion contained only five specific references to drugs, four of which were letters to the editor. I probably should mention how I "randomly" selected the par- ticular issue of JAMA (May 26, 1969) ; it arrived in the mail on the same day I received your request to testify. But returning to the "editorial" material within `a medical journals pages, it must `be stressed that insofar as editorial material is concerned (the scientific article `or report on a `case) if the ti'tle of the article does not `catch the doctor- reader's eye because he cannot see any relationship to his own immediate needs, then he is not as apt to read the article-even if it contains extremely essential information about a drug from `the strictly scientific point-of-view. In contrast, advertisements for drugs make a direct `appeal to the doctor-reader, implying an answer to his most commonly seen patient-problems. A't this point I `should like to take a "ty'pic'al" ad, from the same randomly selected issue of JA]JIA, and demonstrate just how misleading it can be (Exhibit A) *1 This ad appeared right up front in the magazine, within the section I and many `other physicians turn to first: "Medical News." The product advertised is Ananase, a traden'ame for `an enzyme product claimed by the manufacturer to: "redu'ce inflammation and edema," and to speed up the healing `process. As y'ou know, Inflammation is the way the body-or more specifi- cally some tissue of the body su'ch as skin-reacts to injury. We say a tissue is "inflamed" when it is red, hot, swollen and painful. More often than not these are the symptoms `complained of by the patient. T'his particular `ad m'ake's a distinctly `separate claim that its product is effective `against edema, or `swelling of tissue usually `without redness or heat. I am sure you are `all familiar wit'h the fact that a swelling on your skin can be quite painful even if not red `or hot. A't `the same time, edema ca'n als'o be simple swelling of tissue filled with fluid as is `seen when the ankles `become swollen `as a con'sequence of heart or lung disease, varicose veins, `or just `standing too long. The eyelids can be edemato~us, or swollen, after rubbing, lack of sleep or too much liquids and/or salt. 1 Exhibits retained In committee files. PAGENO="0253" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5725 Also, inflammation, or injury, say to the skin, need not always come from an accident; the `act of surgical Incision Is considered of equal injury. This is pointed out because the ad stresses that surgical, or post-operative, patients recover faster if the promoted drug is `administered. A physician, reading this ad and `accepting it at face value, would be justified in prescribing this drug in the firm belief that his patients would recover much, much f'aster after s'urgery or after virtually any form to injury, or if suffering from edema not necessarily related to injury. In the best interests of his patient, he would certainly be tempted to utilize this product for his patient's benefit and, in fact, might even be considered negligent for delaying his patient's progress by failure to prescribe the drug. But now let us look at this ad more closely. The first definitive implication within the ad's "copy" is that `it reports on three different studies or evaluations of the product. This is indicated by `the three separate "references" near the end of the ad's read'ing matter Such references are `an extremely important part `of most ads for drugs (the exception being ads that are only intended to' remind physicians of the name of a previously advertised drug; `a way of repeating the fact that the product exists and its purpose). These references `allegedly tell the doctor th'at the product has been tested and obviously found superior (or why advertise). They also intend to indicate the extent of `the testing and ostensibly the efficacy `and safety `of the product. In other words, the references in an ad lend authenticity and professional backing to `the product supposedly by impartial clinicians (`clinicians meaning `doctors who work directly with patients-either their own or in clinics, as opposed to academicians and theoreticians). Note that the second and third references are papers by the same author. In the second paragraph of this ad (the fifth line) there are the words: "In another study . . ." which alludes to number 3 in the references. In actual fact, these words are untrue. The "another" study is no'thing more than a continuation ~f the same study numbered 2 in the reference list. The author of the study himself call's `his first 24 patients (cited in the ad as reference 2) a "progress report" leading specifically to reference 3. Thus, the `two seemingly separate studies, so indicated by the ad and implying greater (diversified) testing of the 4mg than was actually performed, are in reality one and the same study by the same mafl. Now let us look at the specific study referred to in the ad, as actually reported by the doctor in his published article. The ad, in the sec'ond paragraph, makes the point that the treatment period of "inflammation following surgical proce- dures" was much shorter for patients who received Ananase. The ad does not say `that the same article reports, with equal emphasis, that only 29.2 of these pa- tients who allegedly healed faster had an "excellent" or even "good" response- as compared to the average response. This measure of the quality of the response to the drug, following surgery, was the poorest result obtained in this doctor's study. It is not therapeutically significant when less than one of `three patients who take a drug show no better results than if the drug were not taken at all. That this drug company was well aware that a doctor would look for some in- `dication of the quality of response to the drug, can be proved by the fact that the third reference, or la'ter report on the same study, calls' attention to the quality of results. Evidently to nullify the lack of quality that did riot accompany the claimed sh'ortened time for healing, in the second reference, the advertiser takes data from the third reference to s'how that 27 out of 46 patients (still only a bit more than `half) were judged to have "superior" results. Of even greater interest, is that in this third reference, which is used for quality claims, the doctor reports that far less than half the cases of inflammation from contusions, abrasions, ab- cesses and perforating wounds-a form of surgical wound, achieved so-called "superior" results. This observation was not mentioned in the ad. T'he question arises, why did the drug company not use the corresponding figures from the same report in the ad? Obviously the ad is intended to promote the time factor in healing. Why, then, does the ad n'ot tell that the doctor who made the study used to support the company's claims also s'tated unequivocally that when he measured the number of days it took to heal "soft tissue trauma," another term for inflammation, the time for `healing for those who took the advertised drug was identical-not faster-to the number of days it took similar patients to heal who' did not take -the drug. Thus the drug did not accelerate the healing process here but this fact is ignored in the ad. PAGENO="0254" 5726 COMPETITIVE PROBLEMS IN THE flRUG INDuSTRY Also missing from this ad is the type of surgery performed (the technique used), the part of the body operated i~ipon, the type of post-operative dressing or bandage used and many other factors that any surgeon will tell you without which it would be worthless to try and evaluate the effect of any particular drug on healing. If all appropriate information about this drug is to be offered to the physician,~ it then becomes of interest to know why the company did not cite a very late reference (~n the medical journal Angiology for J~anuary, 1969) of another study of their drug. In this study, where Ananase was tested against a placebo, not one of the symptoms of inflammation showed any significant statistical difference, or Improvement, whether treated by the drug or by the fake, inactive, substitute. As a matter of fact, when the patients in this latest study were evaluated by doc- tors who did not know whether the patient was receiving Ananase or not, the evaluating doctors felt that over 70% of those who took the placebo had improved over what they normally would have expected. Should a doctor, reading this ad for possible use on his own patient, be told this information before he decides to employ the drug? Of course he should. Believe me, gentlemen, this. ad is not unusual. In fact, in order to emphasize my point that advertisers only use information they want to, and exclude all per- tinent data, let me show you a different ad for the same product. (Exhibit B) This ad stresses "a superior therapeutic response with Ananase in 4 out of 5 cases-of hematoma." The reference to back up this claim was used in the previous ad (Exhibit A). In this ad, however, the other reference in the pre- vious ad (the one that reports on the entire study by the same man) is omitted! A look at the results obtained in that reference (which was good enough to use in a different ad) will easily show why it was forgotten. In the omitted reference the same doctor stated that out of 59 cases of hematoma (a swollen black and blue result of injury) and contusions (bruises), only 28, or less than haif, ob- tained "superior" results when they were given the drug. 31 patients received the drug but the results were no better than would have been expected had the drug not been used. This is certainly not a "superior" response in 4 out of 5 cases, as the ad claims. Finally, if a doctor wants a complete picture of the drug, Ananase, he might read The Medical Letter, a private publication on drugs without advertising sup- port. Volume 4, page 60, of The Medical Letter contains a report on the use of Ananase, the specific enzyme in the advertisement under consideration. The edi- torial board, and its professionally respected consultants state, without equivoca- tion, they "find no satisfactory evidence of the effectiveness of Ananase." What is important about the published findings as they appear in The Medical Letter as opposed to the claims in the ad is that both cannot be right. And this is not merely a quaint controversy where two opposing parties offer divergent opinions with no real consequences dependent on who is right. It is of great importance to the patient who may well pay a great deal of money (either directly or through some government or private agency) for something that does not work. What is even worse, use of this drug could delay proper healing by depending on some- thing ineffective or it could cause a severe sensitivity drug reaction that subse- quently would cost the patient a great deal more money and anguish than did the original illness. Now it must be admitted that this ad saw print in spite of the regulation on. drug advertising that exist. This brings me back to the matter of editorial con- trol over advertisements in scientifice medical journals. If conditions that gov- erneci the AMA 15 years ago were still in effect, this type of ad would never have appeared in an AMA publication. It was just about 15 years ago that the AMA abolished its council approval for products to be advertised in AMA media. In 1953, just preceding the removal of council control over advertised products, the AMA sponsored a survey made by Ben Gaflin & Associates to specifically de- termine why advertising revenue was falling. The result of the Gaffin study was quite blunt in showing that the major cause of why the AMA received less and less money from advertising was because of the meticulous scrutiny given to~ any product to be promoted in an AMA publication. Drug manufacturers resented not being able to say anything they wanted to about their product in AMA pub- lications so they simply took their advertising dOllars elsewhere where their claims were not questioned. Although it is circumstantial, to be sure, the AMA initiated a study to find out why they were taking in less and less money through advertising. The study revealed that the strictness of the AMA Council on Drugs-the council wanted~ PAGENO="0255" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5727 proof of an advertiser's claims-was the reason. There followed, close upon the results of the survey being made known, the sudden demise of virtually all AMA "screening" of drugs. And then AMA advertising revenue began to climb again. While on the editorial staff of JAMA, I noted many discrepancies in the ads published within JAMA's pages. I brought these to the attention of the editor and each time I was referred to the "advertising review committee," which was not part of the editorial department of JAMA. In reality, the "advertising re- view committee" (and this was after the abolishment of council review for all AMA advertised products) was' nothing more than one woman, medically un- trained, who glanced at the ads, and seemingly did nothing more than admire them for overall appearance. Not once was any overtly misleading statement in an ad corrected. I can say, therefore, that although the AMA claimed to have "advertising principles," such principles never really existed in fact. I remember quite distinctly pointing out specific discrepancies in certain medical ads such as the use of alleged references to support a product, even though the "cited" reference did not exist or' was one reference that was dup- licated and even triplicated to appear to be separate and distinctive supportive studies. In far too many instance's, when `tracked down, all the alleged references turned out to be one small study supported and paid for by the company ad- vertising the product. There were instances where a reference was' cited as' if in absolute scientific support for the drug advertised, yet if that reference was re- searched it turned out to be nothing more than a general discussion of the over- all chemically related group of drugs, o'f whic'h the advertised product might be considered a part. Some references merely turned out to be a one word men- tion of the generic name of the product being advertised, and it is interesting to note that the same drug company that denounced the use of generic products did not hesitate to refer' to that generic product in support o'f its ad. In other' words, the reference cited in ads' which were intended to Indicate general clinical testing, acceptance and success of a drug-in order to influence the potential prescription for that drug-we're not at all what they implied. And unless the doctor-user of the' drug traced down the multitude o'f references, he naturally assumed widespread support for the advertised product. As a result of my own studies and investigations, I w'rote an editorial for JAMA (writing editorials was a major responsibility `o'f mine while on the JAMA edi- torial staff) pointing out some of the things I felt were misleading to physician readers. I can, if you desire, read the editorial, but I have attached it as an exhibit (Exhibit C). The editorial was eventually published in THE NEW PHYSICIAN, the official journal of The Student American Medical Association (SAMA), of which I became editor. Needless to say, the AMA never allowed publication of that editorial. It was specifically vetoed by the present Executive Vice-President of the AMA, who at `the time I wrote the editorial, was the man who' approved all such editorials before publication. Rather than try and quote his words to me, at that time, I would prefer to quote his printed words, since they say essentially the same thing. In Volume 13, page 10, of `the BULLETIN OF THE AMERICAN WRIT- ERS' ASSOCIATION, Dr. Ernest B. Howard, now administrative chief o'f the AMA, was asked if advertising should be eliminated as a source of drug infor- inataion. Dr. Howard answered: "No. Advertising is the medical journal's prin- cipal source of revenue, and I hope it will continue for many years to' come." I cannot help but feel that such an atttiude on the part of the administrative side of the AMA best illustrates another pertinent finding of the Gaffin study on medical journal advertis'ing made for the AMA; that ~5, `the relationship be- tween the editorial department of JAMA and the administrative department of the AMA proper. As the Galfln study revealed: "It is obvious that there neces- sarily exists a basic conflict of interests between the business office, whose pri- mary purpose Is increasing advertising revenue and the editorial office, whose primary purpose is in turning out as professional a publication as possible. Often, what will increase advertising revenue will decrease professional stand- ing. And `that, Mr. Chairman, is what, in my opinion is essentailly wrong with drug advertising to'day. The professional standards of medical publications have suffered at the expense of bringing in advertising revenue. Frankly, as an AMA member, I also take issue with the concept that the prim'ary purpose of the busi- ness office of my association should be to increase advertising revenue, and I feel safe in saying that I am not alone in this attitude. The primary purpose of the AMA, to me, is to represen't medicine from a scientific point-of-view and to PAGENO="0256" 5728 COMPETITIVE PROBLEMS IN THE DRTJG INDUSTRY offer the medical profession the most unbiased information on all forms of therapy. May I digress for a moment here and say that the information I am offering today is not something I have just decided on. I should point out that I offered some of this information to the Food and Drug Administratin twice in 1963. Had some of my suggestions been adopted then, or had those that were adopted been enforced, an ad such as the one I have exhibited could never have been printed to mislead today's prescribing physician. Now, let me reinforce my testimony with another ad from the same issue of JAMA from which I obtained the Anarase ad, and but a scant 14 pages away from it. Please keep in mind that most physicians will accept this ad at face value simply because it is in JAMA; they assume it has been screened for absolute accuracy (Exhibit D). This ad is for Mandelamine, a chemical to use against infections in the urinary tract (kidneys and bladder). This ad uses five published references to support its claims. Although the ad cites the first reference for one purpose, it is of interest to note that another, important, part of that first reference is not only omitted, but is even contradicted in the ad. In the ad it is pointed out that art acid urine is essential for the antibacterial activity (of Mandelamine). The ad goes on to say that maximum efficiency of the drug occurs at pH 5.5 or below. I am sure members of this committee under- stand the terms acid and alkali; the letters pH followed by a number being a specific indication of whether something is acid or not-in this instance we are considering urine. Normally, most people on an average diet will produce urine with a pH of 6, or slightly acid (7 being the neutral dividing point between acid and alkali). When we eat an excess of proteins, it tends to make the urine more acid; while vegetables and citrus fruits do the opposite, that is, make the urine alkaline or with a pH greater than 7). Now you might possibly remember that at the beginning of my statement I mentioned it was possible for a drug to fail in its intended effect because of im- proper environment. The use of Manelamine illustrates what I meant; if the drug is not used in a very acid environment, it has no therapeutic effect. This, in turn, is not only a waste of money for the patient but could be even more dangerous than the original infection since an ineffective drug allows the infec- tion to grow and become worse. To come back to the ad, the first reference used in the ad to support the com- pany's claims not only stresses the need for acidifying the urine, it specifies just how acid the urine must be. The original article, indicated by reference number 1, says the pH must be "less than 5." This is very acid, and more often than not must be achieved by adding another chemical (e.g., methionine, ammonium chlo- ride, lysine) or forcing the patient to drink a great deal of cranberry juice or take large doses of Vitamin C. In other words, to use this drug without making equally sure the patient's urine is very acid is not only likely to be ineffective but could even be considered negligent. Now look at the ad again. The ad states that maximum efficiency occurs at pH 5.5 or below. The ad does not hestitate to use reference 1 to support some of its claims, but it evidently does not agree with that same reference when it comes to acidifying the urine. While it may not seem much in the way of numbers, there is a great deal of physiological difference in a pH of 5.0 or below and 5.5. Actual- ly it is as if the acid strength were doubled when the lower figure is used. If the reference's claims for bow acid the urine must be is correct, then the doctor who reads only the ad will wrongly feel he is doing a proper job if his patient's urine reaches an acidity of pH 5.5, as the ad says. Thus, by following the ad alone, the doctors may well prescribe an ineffective drug. What is flagrantly missing from the ad is the fact that the doctor must monitor his patient's urine-at the very least once a day-in order to achieve and maintain the proper pH. In another portion of this same ad, where the effectiveness of this drug is boasted about, it is importatit to note the "fine print" statement that in a true scientific sense actually discredits the very claim the ad is making. The ad ad- mits, almost as an aside, that those who benefited most from Mandelamine also received greater amounts Of antibiotics for greater periods of time. How can you honestly measure the effect of one drug when other drugs were used at the same time? And, with certain antibiotics, especially ones used most often to treat the identical urinary infection for which Mandelamine is recommended, it is best to have an alkaline urine-one that would render Matidelamine com- pletely ineffective. PAGENO="0257" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5729 This brings me to the matter of reading a complete advertisement, without consideration of searching out and reading the supportive references. Do you know how long it takes the average physician-with his knowledge of medi- cine-to read this particular ad, and to read it for meaning? I asked five dif- ferent physicians to read the ad so they felt they understood it. The average time was 4 minutes. This may not seem like much in itself, but if you multiply just the ads in the one journal where this came from, you would require that average doctor to spend over 61/4 hours on the advertisements alone. And this would not even include a glance at the editorial material-the doctor really should read; nor does this 61/2 hour reading time include advertising pages for items other than drugs which make up another 105 pages for another 7 hours. And this is only one of the minimum of ten medical journals that arrive on the doctor's desk each and every week. I make this point because I want to Stress that even If an ad does contain an abundance of information, it cannot be assumed that the physician can or will read nrnch more than the promotion-styled headlines. As a further extension of the reading experiment, I found it took me just about 24 hours of reading time to get through this one issue of JAMA~ Now add on the time it took me to track down the reference to these ads (with great help of the Los Angeles County Medical Association Library). I can fairly estimate the search tOok another hour and the reading another three hours~ And as an incidental note, of the five doctors who read `the Mandelamine ad for me, for timing purposes, not a single one could immediately, or correctly, name a "ureasplitting bacteria" a's so importantly specified in the ad. Thus it is easy to see that a careful follow-np to `this `ad would require a great deal of reading before the drug could properly `be used. But if the reader accepts all the claims, and directions, at face value thinking it `absolutely accurate, he could fail to treat his patient successfully. An'd this is where the editorial board of the medical journal that published the ad comes to the fore. If the editorial board of JAMA, through it's experts and consultants who have access not only to the complete references used in an `ad~ but also to references not used by the drug company, took the trouble to review the claims of the ad, and clarified any discrepancies before publication, the physician-reader could actually practice better medicine. More so, if the editorial board saw `to it th'at the most important adverse or relevant facts about the drug were given the same eye-catching attention as are the alleged indications for the drug, I do believe the incidence of drug failure as well as drug danger would decrease markedly. What is more, I believe that simple overuse of drugs, without any scientific reason for the use, would diminish allowing not only a great saving in the coSts of drugs to patients but a great saving in life. At one time, when the AMA did carefully screen its ads, even the Gaffin report reported that AMA. council approval of `an ad "relieves the physician of much of the personal responsibility which he assumes when it is absent." But, and this is a big but, if the leading medical publication in this country refuses to adhere to strict standards in advertising you cannot expect any other publica- tion, nor any other form of medical advertising for that matter, to adhere to any standards. And I think it is plainly obvious that the AMA has all too willingly succumbed `to virtually no standards when it comes to `the advertising it accepts. And since it was the AMA that initiated and paid for an expensive survey for the primary purpose of increasing advertising revenue, there seems little doubt that revenue has taken precedence over professionalism. Let us look at another ad from the same issue of JAMA (Exhibit E). Quite obviously this ad is for Serc a chemical that allegedly "helps control the fre- quency of episodes in those patients with a high level of recurring attacks of) vertigo of Meniere's disease." One year ago this month, the Food and Drug Administration announced it was taking action to stop the sale of this specific product. Just two months ago there were many emphatic public pro- nouncement's about the FDA's move to withdraw approval for Serc, This in- formation was also given attention in various medical publications that reach physicians. Yet in the May 26, 1969 issue of JAMA, there' is an ad for Serc. The ad obviously implies the drug is effective and cannot help but nullify the FDA's recommendations. This ad could easily have been cancelled (there was ample time after the most recent FDA announcement) if the JAMA editorial board had any consideration for its readers. The real issue, however, is whether a journal with the ostensible status of JAMA should even carry an ad for a drug under question. Only a stronger desire f~r revenue as oppos~ U to pro- Si~28O-69-pt. 14----17 PAGENO="0258" 5730 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY fessionalism would have allowed such a disservice to the medical profession. At this point it seems quite proper, and most appropriate, to discuss the AMA in relation to Its evident honesty, authenticity and accuracy. Since it is my belief that unless and until the AMA takes the lead in setting standards for ethical adverising, no other form of medical advertising will feel it has to conform to any ideals, I do think a few examples of how the AMA operates, in connection with its publications, are in order. Let us look at another example of the apparent dishonesty that seems to result in that conflict between the editorial and the business side of medical publications. For many years the AMA has sent out, free (the AMA uses the word complimentary), two, not one mind you, but two, copies of Today's Health magazine to every AMA member. Now, it is recognized that one indication to a potential advertiser whether he wants to advertise in a magazine is that magazine's paid circulation or the number of people evidently willing to put out their own money to buy the magazine. The greater the paid circulation, the greater the chance that the reader will actually go through the pages and see the advertisement; the more consumers that will be reached. If, there- fore, you want to impress an advertiser in order to solicit his business, what you need to do is show a real reader interest in your publication. Can you imagine a potential advertiser's attention if your paid circulation suddenly-- almost overnight-more than doubles? I am not talking about an increase from 3,000 to 6,000, I am talking about 350,000 to over 700,000! Well this is what happened to Today's Health several years ago. When the AMA decided to send out two free copies of Today's Health to all its members, it suddenly showed a rise in paid circulation of about 400,000. And it so reported these figures to the Post Office Department year after year, as required by law. Yet, in spite of the fact that such a statement was false and even though this matter was brought to the attention of the Post Office Department, nothing was done to the AMA to make it tell the truth. For if the truth were known, the required statement of circulation would indicate more free copies than paid for copies. To be sure, the AMA can claim the two free magazines are part of its dues structure, but it has, in print, said these are "complimentary" copies. And the membership was never asked if it wanted the magazine in return for payment of dues. Because we are discussing the AMA publication, Today's Health, I would like to give another indication of the accuracy and authenticity of the information published by the AMA. In the February, 1969, issue of Today's Health, the last two lines on page 78 read: "Date over-the-counter drug supplies when you buy them. Some lose their effectiveness when they are store~l, or they may become toxic." Now this is an extremely serious statement for the AMA to make. If it is true, then it should be documented by the use of names of products that could become poisonous after any period of time. If it is not true, then the AMA should be taken to task for such irresponsibility I tried to obtain additional information directly from the AMA but to no avail. I then asked a former editor of Today's Health who was returning to the AMA to secure the source of this startling statement as well as the names of such products. He told me, after a vain attempt within AMA headquarters that there did not seem to be any basis for this alarming pronouncement-other than to entice people to get rid of "old" drug products and buy new ones. I do think this committee will agree that if there are any products being sold over-the-counter that prospective patients can easily obtain and that might, at a later date, specifically be the cause of Illness, the medical profession should be made aware of same. I then contacted the FDA and was told they knew of no basis for the AMA's statement. Just as I have tried to emphasize the fact that the AMA is not strict and responsible about what they allow advertised in their publications, so do I feel that such a profound, yet seemingly erroneous, declaration published in Today's Health is another concrete example of AMA irresponsibility. To go back to the matter of paid circulation of AMA publications and the relation of allegedly paid subscribers to advertising revenue. When I was on the JAMA editorial staff, there was a definite problem with the circulation of other AMA scientific publications. Some were so small (only a few thousand paid subscribers) as to be relatively unprofitable to the AMA. In addition, the small circulation tended to keep authors from submitting manuscripts for these "specialty" journals of the AMA (papers submitted to JAMA were shunted to other journals to supply them with editorial content.) PAGENO="0259" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5731 Marty ways were considered to raise the paid circulation of all AMA publi- cations-with primary purpose again to bring in to *the AMA additional ad- vertising revenue. The drug companies were quite frank in telling the AMA that they could not see advertising in a medical journal that had no real paid circulation. And here it must be noted that the lack of paid circulation was a definite index of the lack of interest by physicians for, at that time, JAMA. came to them without actual subscriptions; it was part of the dues structure. So now that the advertisers had advertising restrictions removed, they now wanted to know that other AMA publications had wider distribution. What did the AMA do? They followed the Today's j~1ealth "gimmick" and lit- erally forced another free copy of one of its other publications on every mem~ her. As a result, TJie Arcltivps of Internal Medicine circulation increased ten fold, when, in fact, the increase was really the result of giving it away. The same was true for other AMA scientific publications. And, when advertisers felt the magazines were going in.to the hands of so many more readers, they, in turn, increased their advertising in more AMA publications. The result: even greater advertising revenue for the AMA. It must be noted that AMA members were never offered the alternative of re- jecting the free copies forced upon them, thereby reducing their dues (e.g., $12 a year for one of the Archives; $12 a year for the two copies of Today's Health; and $10 a year for the AMA News, which literally duplicates information sent out by free publications to all physicians). Were this choice alone allowed, the dues of every AMA member could be cut in half. Instead, the AMA continues to raise its dues and force its publications on its membership. I am sure you are all aware that, for most doctors, membership in the AMA is compulsory, not voluntary, so the mailing of these publications as part of membership insures a relatively large circulation with its attendant large ad- vertising revenue. To be sure, the AMA will tell you they have nothing `to do with the fact AMA membership is co'mpulsory~ but the fact remains that a simple directive from the AMA prohibiting this practice would stop it immediately. This has never been done for it has been fairly estimated that if AMA member- ship were not so fixed that it is literally required to practice medicine, more than half the present membership would resign. The same AMA that fights so hard for so-called "free choice" of a physician has never allowed the physician to make a "free choice" in regard to his membership. How does compulsory membership work? In all too many areas, a physician cannot obtain a hospital staff appointment (the right to treat his own patients in the local hospital) unless he is a member of his County Medical Society. The County Medical Society requires that membership must include membership' in the State association, The State Association then requires that membership mast include membership in the AMA. So, to take care of his patient in a hospital, the doctor must be a member of the AMA. He is not given the option of joining only those associations he would choose; he has no choice. Thus a great many doctors, with nothing to say about it, indirectly contribute to the false circulation figures of the AMA's publications, and, consequently contribute to increased AMA revenues and thus' to what seems to be deliberate careless~ ness in advertising standards. And if the AMA will not set the highest standards for medical advertising, you cannot expect any other medical publication to follow suit-especially where such standards could interfere with obtaining the advertising dollar. Nat- urally, if the AMA continues to refuse to' take the lead in setting advertising standards that have meaning to the practicing physician, then the only recourse is legislative action to achieve the same result. That standards are absolutely necessary, there can be no question. The very fact that just one misleading ad- vertising exists that could eventually cause harm to a patient is' sufficient justification. What could AMA standardization mean? If it were known that the AMA did not allow an ad in its pages unless that ad met all professional requirements (this does not limit ads'; it merely means that equal eye-catching attention is given to all the important aspects of a drug), the doctor would know that a product advertised in an AMA publicatiog~i had been reviewed with his (the doctor's and the patient's) benefit in mind as opposed to the revenue for the AMA being of primary concern. An AMA ad should mean that the claims can be justified. In contrast, an ad in some other medical publication `that was not found in AMA pages would clearly indicate to the doctor that the ad had not been screened by AMA physicians and was, therefore, not to be accepted at face PAGENO="0260" 5732 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY value. it is my contention that if this fact were known among the medical pim- fession, other pubications would soon follow the AMA's lead, and what is more important, drug companies would be much more careful about what they say in their ads. What I hope I am really stressing is that the AMA should return primarily to scientific activities and that the business end of AMA should end its rule of the professional end. I frankly do not see bow the present AMA administration can deny that there is a most unwholesome relationship between it and the drug manufacturers; the AMA today virtually exists more for the benefit of phar- maceutical companies than It does for its membership. As an interesting side- light here, several years ago the total membership of the AMA (in spite of com- pulsory tactics) decreased. Rather than let that fact become public, the AMA then gave away, without even asking, free membership to physicians in Govern- ment service military, public health, etc.). This, in turn, raised the total num- ber `of members' so as to give the impression that AMA membership was on the increase. Of course, such `an action also raised the circulation of its publica- tions-again appealing to potential advertisers. Naturally, the question comes up, what if drug companies again refuse to advertise in AMA publications because of scientific and ethical scrutiny-as they did two decades ago? Two answers appear. First, can you imagine the attitude of physicians across the country If they knew that an ad in an AMA. publication relieved them of a certain amount of legal responsibility, while an ad in some other publication left them a bit more open to question? It is quite possible that advertisers would recognize this aspect of `liability and be more apt to conform to standards. But, second, does the AMA really exist to make money from drug ads? Is not the proper role of the AMA, an organization ostensibly to protect the pa- tient's health and welfare, to disseminate scientific information to its member- ship? In a real sense, why should the doctors of this country prostitute them- selves in order to bring their professional association money to use in non- professional (e.g., political) activities? I feel I must stress the fact that there is no medical advertisement so urgent that it cannot be put off until the claims are verified and that all aspects of a clinical study are reviewed to balance the claims and put them in proper per- spective. The FDA was charged to do this for the past 5 years, yet there are many, many misleading ads `in medical publications every day. When the AMA allows such ads in i'ts publications it becomes a panderer of drugs rather than a sci- entific evaluator. And here I must stress again, at the risk of repeating myself, that too many doctors believe that if an ad `is in an AMA publication it has been properly screened. I think I have shown this to be false. Furthermore, the very fact an acT does appear in an AMA publication has tended to make doctors believe that the company-whose ad is in JAMA must be all right. That, too, just is~ not so. The AMA has actually pushed the idea that an ad in one of its publi- cations implies "official" acceptance; at the same time the AMA has done noth- ing to earn that reputation. You know, If nothing else comes out of these bear- ings' other than the fact that you have made physicians aware that, at pres- ent, they must read every ad f'or a drug with innate bias, you will have per- formed an extremely valuable service for the people of this country. In a sense, you may have achieved more than any legislation could accomplish. Thus far, my testimony has hopefully given you evidence that although drug manufacturers obviously mislead physicians as a form of "puffing," (either by not telling the whole trnth or by not stressing the dangers of their products), the real culprit behind the dissemination of this misleading information is the medical journal that publishes the ad. As I said, it is virtually impos~ib1e to control the detail man. At a recent medical meeting (California Medical Asso- ciation) the detail man fo.r a drug company told me: "Although the FRA re- quires us to say, in ads, that the dosage of our drug is I capsule four times a day, (and the written ad even goes so far as to say: `the recommended dosage must remain unchanged.' we can tell you that two capsules twice a day works just as well. It would be too much trouble to petition the FDA for permission to change our ads." Could there be any better Indication that even existing laws can- not do the job? Before I conclude my testimony, I would like to say a few general words about the education o'f doctors about drugs. It is my opinion that many doctors do not know as much about the drugs they use as they should. As evidence for this statement. I would like to refer to the May, 1969 (10 :209) issue of THE BUL- LETIN OF THE AMERICAN COLLEGE OF PHYSICIANS, probably the most PAGENO="0261" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5733 respected professional scientific organization in America today. The Executive Director of this association gave, what he called "startling" statistics about drug reactions as they were discussed by Dr. Leighton E. Cluff, Professor of Medicine at the University of Florida College of Medicine. For one thing, it was stated that about 15% of patients are admitted to hospftals because of adverse drug reactions. He claimed "this represents 1.5 million patients a year." And this does not include patients who have a drug reaction after being hospitalized. Virtually every drug reaction could be prevented if the doctor was aware of what the drug can do-in addition to its alleged therapeutic effect. Even excusing undetected idiosyncratic patient allergies, the fact the vile doctor clainis a million and a half patients a year suffer drug reactions has to indicate a gross failure of doctors to know all they should know about drugs. Another reported observation was that 20% of all hospitalized patients re- ceived antibiotics, but that this number was not conipatible with the reported number of infections. In other words, patients were given antibiotics without any evident reason. The Executive Director of The American College of Physi- clans is not afraid to say that: `It is possible physicians themselves may be over- influenced by claims made for drug efficacy." Unfortunately, there are relatively few opportunities, other than medical jour- nals, for practicing physicians to learn about drugs today. Most post-graduate courses stress theory and dwell on diagnosis-with the emphasis on how the medical laboratory (rather than the physician himself) can best make that diag- nosis. One reason for this lack of academic courses on drug education th that where such courses do exist, they are more often than not, sponsored by a drug company-and they inevitably Include free drinks and dinner for the doctors who attend. Again, you start such a meeting with a built-In bias and it is difficult for human beirmgs~-even if they are doctors-not to be influenced under such condi- tions. Medical schools just cannot compete with drug companies when it comes to offering seminars on drugs. That physicians want to know more about drugs is quite evident. While on of ,JA1i/A's editors, I bad the responsibility of running the Queries and Minor Notes Department (now called the Questions and Answers Department). This editorial department handled letters to the editor that asked questions about drugs and diseases. Often, a physician sent in an abbreviated case history of a patient he was treating and asked for specific advice as to what drug to use, or whether it was all right to utilize a certain drug. Several times these questions and their answers were published in book form end sold by the AMA. I recently took another look at one of these books, entitled "Selected Queries and Minor flotes," and found that half of all the questions asked related to drugs, as opposed to diagnostic procedures, surgical techniques, etc.). What was of even greater inter- est, ih reviewing this book, specifically with this testimony in mind, was that 4 out of every 5 questions on drugs asked for information that should have been common knowledge to the medical profession (side effects o1~ drugs, proper dosage, specific rather than general indications for use, etc.) ; these were ques- tions that showed the ads for the drugs had omitted the most important prescrib- ing informatioi~ But doctors only have time to read the "headlines" in a drug ad; not because the doctor does not want to read more, but because he just does not have the time to read all the details-and especially to search out and study the refer- ences that really tell about the drug. And he does assume that if the ad Is in his "official" association journal, it must be all right. This is becanse most doctors are quite unaware of the dichotomy between the editorial departments and the business departments of their association. And, it is my opinion that this false trust in advertising in JAMA, and other AMA publications, is what has led to the gross overuse, as well as misuse, of drugs. It seems obvious that legislation now Ofl tile books, has not reduced the in- cidence of drug reactions-the very best indication of drug use and abuse. To reqmre that certain information be In fine print does not, at the same time re- quire that the doctor read that fine print. But to require that the headlines in a drug ad emphasize-with equal attraction-the bad along with the good could help reduce the drug reaction problem. Properly evaluated advertising could be the best method of bringing the doctor up-to-date on drugs. But only the medical profession can insist on such stand- ards. I hope the past and future bearings of this committee will bring this fact to the attention of the doctors and that they, in turn, will insist on such stand- ards as a rigid policy in their "official" publication. PAGENO="0262" 5734 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY But, if the AMA will not take the lead in setting advertising standards, and more so if the doctors of this country will not demand that the AMA. assume this responsibility, then I must admit that it becomes an absolute and necessary duty of some legislative body to take over the task that medicine will not do for itself. The dangers of drugs, and the obvious misuse of drugs, are such that it is irresponsible for doctors to obtain distorted education about the products their patients take. The important thing is that the legislation must be strong enough, and adequately enforced, to do some good. Unlike almost any other form of advertising, drug advertising is not directed toward the ultimate consumer- allowing that consumer to make a "free choice" with a full awareness of the dangers involved. Therefore it does not seem wrong to have adequate controls over the education the doctor receives so that his' course of action is based on full, rather than inadequate or distorted, information. And when the doctors of this country fully under~tand the reasons behind such actions-that the protection intended for the patient is equal protection for them-I feel they will back any modality that offers them better educaion. Thank you. I do have other advertisements that illustrate how doctors are deceived (`such as the ommission of extremely pertinent data). I will gladly show these ads, if you so desire. APPENDIX II STATEMENT OF JO5JITJA LEDERB~RG "Lack of knowiledge and sophistication in the proper use of drugs is perhaps the greatest deficiency of the average physician today." This indictment is one of the most disturbing conclusions of the task force on prescription drugs, headed by Dr. Philip B. Lee, recently Astsistant Secretary for Health and Scientific Affairs in the Department of HEW, and Ohaneellor of `the University of California Medical `Center in San Francisco. This theme is now also the focus of hearings before the Monopoly Subcommittee being chaired by Senator Gaylord Nelson (D., Wisconsin). Its critical tone is shared by almost all of my own colleagues in academic medicine. This appraisal of the competence of medical practitioners, at large, to make informed and critical, judgments about drugs has ramifications even wider than an obvious concern about the quality of care offered by iadlvidual physicians. If the prescribing physician were qualified, he could be relied, upon to winnow fact from self-interested fancy among the clatter of claims for new drugs, or old ones in fancy new packages, constantly being promoted ,by the drug industry. The creative efforts of that industry would then be directed primarily, to com- petent research to find new `agents capable of persuading competent `and critical judges of their value i~ medicine. Without that reliability, we need ever more stringent policing of the industry and its propaganda to protect physicians, or rather their patients, from a crime that may be closer to self-delusion than fraud but is no less dangerous. This kind of policing on the `part of a government agency is not only clumsy, contentious and expensive. It also leads to the opposite error, of bureaucratic negativism on the principle that no one is ever applauded for approving a risky application: the lives that, might be saved by taking a chance w'ith a new drug will never be counted by comparison wi'th a single unhappy death or malforma- tion. But if the doctors cannot police themselves, what other choice do we have? The evidence for widespread incompetence in drug prescription is impelling, hut mostly anecdotal. Some rather superficial s'urveys have been made of the sources from which physicians obtain their drug information, and their own views of its reliability. The importance and credibility attached to detailmen's presentations should be alarming on the objective principle that they can hardly be expected to criticize their own products. Chlorampheni'col was widely used long after its potential hazard for producing fatal aplastic anemia bad been widely publicized, This has been the most instructive case study so far, because one could search out this rather rare disease from death certificate files. In California, between January 1963 and June 1964, there were 60 deaths from aplastic anemia, out of a total of 225,000. Ten out of these 60 were related to chiorathp'henicol, which had been administered `to about 220,000 patients. The risk of drug-induced, fatal anemia is then about one in 22,000, which is thirteen times the general population risk. PAGENO="0263" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5735 Most medical authorities condemn the use of chioramphenicol except for typhoid fever arid a few other diseases, and some believe that it is never the drug of choice. Most of the eases where doctors had prescribed it certainly did not meet these needs. Why then did they use it? Were they ignorant of the published hazards? Did they discount them on the grounds of their own experience with the drug, which may have cured many infections without the misfortune of an aplastic anemia ease? That is, were they their own experts, or are they incom- petent or both? We do not know. Most of the remedies so far proposed are unlikely to go very far to meet the problem. A government-sponsored drug compendium, free of advertising bias, may be very advantageous for other purposes, but will It be read by busy practitioners for drug information, any more than they now consult the journals? The Medical Letter is a particularly useful, convenient, and critical review of contemporary drugs that deserves to reach far more than the twenty percent of U.S. physicians who now consult it. Above all it is a voluntary, independent evaluation; a principle that suggests that if it is* imperfect, others can try to improve on the effort. If indeed many physician's are incompetent to evaluate drugs, they can hardly justify the `monopoly of prescribing them, and we will have to set up special examinations and licenses for the privilege of, say, prescribing drugs less than ten years old, and with the legal obligation to report adverse effects. The indictment has, however, not been proven by objective, quantitative evidence. According to Medical World News, Dr. Maynard I. Shapiro, president of the American Academy of General Practice, flatly denies it and complains that he has not yet been heard by Senator Nelson's committee. If anything, he also points out, physicians get too much information, with many warnings about isolated cases of possible side-effects whose significance is impossible to evaluate. Medical centers see (and sometimes produce.) too many cases of drug-induced illness for this problem to be hastily discounted. However, before we prescribe drastic remedies for this disease, it needs more research both on efficacy `and side~effects. What exactly Is the problem-is there an identifiable group of physi- cians who need to be restricted or re-educated? How much of the issue Is within the range of valid medical judgment; and to what extent should "experts" dic- tate the practice of a conscientious' but dissenting practitioner? Does overt pro- motion of drugs by manufacturers serve any useful social purpose, except as impelled `by competition with others? What measures are likely to be effective in improving the drug-prescribin.g behavior of physicians, and how can we pre- test and evaluate them? , APPENDIX III Tnn LIBRARY or Coxenass Washington, D.C., January 21, 1969. To: Senate Select Committee on Small Business, Subcommittee on Monopoly (Attention of Mr. Benjamin Gordon). From: Education and Public Welfare Division. Subject: Federal expenditures' in support of medical education. This is in reply to your request for information on the amount of Federal ex- penditures used to support medical education in the United States. Since the academic year 1958-~9, the Association of American Medical Ool- leges has conducted a survey of medical school expenditures based upon re- ports of the financial data submitted from each of the accredited institutions in the country. The results of the survey are published annually in the Educa- tio~ Issue of the Journal of the American Medical Association near the end of each year.1 The data included in this report to the Subcommittee are for the year 1966-67 and are the most recent available. Total medical school expenditures for 1966-67 amounted to $1,010,327,369 and represents an increase of $128,143,207, or 14 percent more than the amount spent by these schools during 1965-66. Among the four-year schools, total annual ex- penditures ranged from a minimum of $2,332,264 to a maximum of $43,417,130. Total expenditures, incidentally, for the academic year 1958-59 amounted to ~ "Medical Education in the United States," Journal of the American Medical Associa- twa, Vol. 206, No, 9, November 25, 1968; animal report on medical school expenditures. PAGENO="0264" 5736 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY $319,028,651, so that expenditures for 1966-67 were 217 percent greater than amount expended at the end of the previous decade. Expenditures reported by the medical schools are generally divided into two categories: sponsored progran-i expenditures and regular operating program expenditures. Sponsored program expenditures are medical school activities that are fostered and supported under special contracts, restricted grants, or restricted gifts, by agencies or organizations interested in special medical school programs. Regular operating program expenditures are those made from funds en- tirely under the control of the medical school. The overwhelming proportion of Federal funds expended by medical schools are under the category of "sponsored expenditures." In 1966-67, expenditures for sponsored teaching and training programs amounted to $138,216,973, of which 92 percent came from Federal contracts and grants :2 SPONSORED PROGRAMS-TEACHING AND TRAINING Category 1958-59 1966-67 Percent increase Federal contracts and grants Non-Government contracts, gifts, and grants Total $20, 772, 182 4, 660, 146 25,432, 328 $126, 672, 337 510 11, 544, 636 148 138, 216,973 443 According to the survey report, funds expended in support of this activity are for most of the postdoctoral education programs conducted by medical schools. In 1966-67, $420,231,585 was spent for sponsored-research programs, of which $344,480,141 was provided by the Federal Government (82 percent of all. spon- sorect research in medical schools). Non-Federal divisions of government provided about 3 percent of the funds, while the remaining 15 percent came from non- government sources (industry, foundations, voluntary health agencies, individ- uals, and others) : SPONSORED RESEARCH EXPENDITURES Category 1958-59 1966-67 Federal grants and contracts for research $74, 128, 157 $344, 480, 141 Non-Federal divisions of government 2,855, 127 12, 732, 011 Industry 5,800,286 9,001,266 Foundations 8,277,327 16,926,247 Voluntary health agencies 12, 935, 649 16, 823, 251 Individuals and others 4,924,113 9,771,507 Total 133, 705, 625 420, 231, 585 Approximately 41 percent of all medical school expenditures are for sponsored research, and 52 percent of all medical school expenditures are funded from Federal sources. About 134 percent of all expenditures come from Federal re- search expenditures. We are enclosing the tables which show the sources of these expenditures for your review. These data do not include capital-outlay expendi- ture figures nor teaching hospital financial data. . . If information on basic medical education programs is required, please let us know. GLENN II, MARKUS. 2 See footnote No. 1; table 50. See footnote No. 1; table 50. PAGENO="0265" 1958-59 1965-66 4-year colleges (~) 0 TABLE 30-SUMMARY OF MEDICAL SCHOOL FINANCIAL REPORTS, 1958-67 1966-67 Colleges Colleges Colleges using using using source Amount source Amount source Amount Minimum Maximum ~ A. SOURCES OF SUPPORT FOR SPONSORED PROGRAMS 1. Fedvralcontractsandgrantsforteachingandtraining 85 $20,772,182 86 $110,730,028 88 $126,672,337 $100,909 $4,771,836 2. Nongovarnment contracts, gifts, and grants for teaching and train- ing 68 4,660,146 74 10,423,085 79 11,544,636 0 812,018 3. Total of sponsored teachingandtraininggrant programs(1 plus 2)_.. 85 (25,43Z328) 86 (121,153,113) 88 (138,216,973) 102,278 5,478,090 ~ 4. Federal contracts and grants for research 85 74,128,157 87 307,401,572 88 344,480,141 256,473 14,036,153 5. State, city, and county contracts, gifts, and grants for research 43 2, 855, 127 59 12, 081,831 63 12, 732, 011 0 1, 645,429 ~ 6. Nangovernment contracts~gifts, and grants for research (1) 31, 937,435 87 48, 179, 199 88 52, 522, 271 20, 157 2, 134, 156 7. Endowment income restricted for research 34 3,029,630 42 5,506, 157 43 6,405, 834 0 1,017,668 i-4 8. Otherfundsrestricteclforresearch 17 1,755,276 15 1,947,659 13 4,091,324 0 2,182,772 ~ 9. Total of non-Federal support for sponsored research (total, items 5 through8) 85 (39,577,468) 87 (67,714,846) 88 (75,751,444) 20,157 4,047,475 ~ 10. Total expenditures for sponsored research (4 pius 9) - 85 (113,705,625) 87 (375,116,418) 88 (420,231,585) 314,281 17,727,818 ~ 11. Federal grants and contracts for foreign teaching programs (included initeml2) 10 (1,322,940) 6 (887,212) 0 427,128 ~ 12. Miscellaneous sponsored programs (exclusive of research teaching, training, and studentaid) (1) 5,099,963 43 17,936,783 39 22,675,558 0 11,272,523 13. Total expenditures for sponsored programs (items 3, 10, 12) 85 (144, 237,916) 87 (514, 206,314) 88 (581, 124, 116) 514, 294 34, 478,431 `Part of combined items; total number not computed. PAGENO="0266" B. SOURCES OF SUPPORT FOR REGULAR OPERATING PROGRAMS 14. Tuition and fees 85 $24, 368, 278 15. Overhead on Federal contracts and grants 16. Overhead on non-Federal contracts and grants 17. Total overhead on contracts and grants (15 plus 16) 85 13,339,212 18. Endowment income 17, 576, 918 19. Unrestricted gifts and grants 10~ 960,387 20. Medical college expenses paid by teaching hospitals and clinics 28 13, 727, 30 8 21. State, city, and county grants-in-aid or subsidies paid to medical college 22. Medical college expenses paid by medical service funds 23. Income from college services (medical laboratory, etc.) 45 5,259,981 24. State payments or subsidies paid through compacts such as WICHE and SREB 11 573,342 25. Other income from regular operations 6,501,150 26. Miscellaneous income (total of items 23, 24, 25) 45 (12, 334,473) 27. State appropriations for defrayal of medical college expenditures - - - 40 49, 778, 410 28. Miscellaneous medical college reserves 29. Miscellaneous university income and reserves 45 14,477,884 30. Total expenditures for regular operating programs (exclusive of sponsored programs) (174,790,735) 31. Total expenditures 319,028,651 O 2,355,538 Z 0 3,065,449 0 2,498,814 ~ 0 275,000 0 3,450,023 ~ 0 3,913,272 ~ 0 7,346,619 0 0 389,140 0 2,400,915 1,308,431 17,662,899 2, 332, 264 43,417,130 TABLE 30--SUMMARY OF MEDICAL SCHOOL FINANCIAL REPORTS, 1958-67-Continued 1958-59 1965-66 1966-67 4-year colleges Colleges using source Colleges Colleges using using Amount source Amount source Amount Minimum 0 Maximum 87 $41,019,126 88 $43,943,788 $41,400 $1,477,385 ~ 87 53,730,487 84 55,410,997 0 2,809,703 ~ 85 5,114,871 68 4,628 760 0 674,826 87 (58, 845, 358) 84 (60, 039: 757) 0 3, 293~ 342 ~j 53 26, 227, 239 51 28, 016 439 0 3,163,530 85 13,771,283 83 14,038235 0 1,163,957 33 31,047,912 37 46,789,800 0 11,986,593 ~ 11 7,592,430 6 6,816,009 7 8,265,103 22 10,635,435 33 25,203,185 41 30,247,655 55 14,112,449 53 15,293,171 7 783,206 8 825,656 59 15,829,695 67 27,157,669 79 (30,725,350) 81 (43,276,496) 43 111,985,457 47 132,992,088 3 226,539 6 779,774 51 22,110,390 49 20,804,148 87 (367,977,848) 87 882, 184, 162 88 (429, 203, 253) 88 1,010,327,369 PAGENO="0267" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 573~ TABLE 31.-MISCELLAN EOUS MEDICAL SCHOOL Fl NA1~CIAL DATA, 1958-1967 , 1958-59 1965-66 1966-67 EXPENSE ITEMS BY SOURCE OF FUNDS 1. Expenditures for teachin9, training, and research from all Federal grants, contracts, and subsidies 2. Expenditures for research paid by nonfederal divisions of government 3. Expenditures for research from nongovernment gifts, grants, and con- tracts (a) Paid by industry 5,800,286 (b) Paid by foundations 8, 277, 327 (c) Paid by voluntary health agencieq 12,935, 649 (d) Paid by individuals or other organizations 4, 924, 173 4. Expenditures for equipment purchased from school funds but not in- cluded in "Summary of Medical School Financial Reports" $4, 1.86, 842 5. Number of schools in which operating income exceeded operating expenses (12) 6. Total operating surplus funds of colleges referred to in Item 5_ - - -. $941, 541 7. Disposition of operating surplus of funds referred to in Item 6: (a) Held for future operationS (b) 1-laid as part of generaluniversity funds_ 941, 541 (c) Used for purchase of equipment, improvement of facilities, etc (d) Refunded to State treasury or paid to university as reim- *bursement for services 8. Unrestricted university funds used to support medical school opera- tions (exclusive of State approptiations) 10,953,600 8,779,751 15, 092, 399 15, 908, 032 8,399, 017 9,001,266 16,926 247 16, 823, 251 9, 771,507 ` $5, 627, 795 (13) $2, 938, 933 - $6, 552, 600 (11) $2, 709, 106 2,137,850 79, 052 600,000 122, 031 25, 049, 323 2,252; 895 110,074 32,924 313, 213 23, 175, 461 9. Source øf funds referred to in item 8: (a) General university unrestricted gifts and grants 632, 390 1, 514,519 (b) Profit on auxiliary enterprises (bookstore, snack bar, etc.) 2, 244, 311 2,491,708 (c)~lOIlocated from miscellaneous university income and reserves 17, 235, 633 13,718,435 (d) Unrestricted university endowments - -- 4,936, 9895,450,799 10. Percentage of total medical school expenditures applicable to regular opetating programs (excluding sponsored programs) 55 11. Percentage of total medical school enpenditures for all sponsored programs . 45 12. Percentage of total medical school expenditures for sponsored research - 36 13. Percentage of total medical school expenditures paid by Federal funds 30 14. Percentage of sponsored research paid from Federal funds 65 15. Percentage of sponsored research paid from non-Government funds 35 16. Percentage of sponsored research paid fromstate and local govern- ment funds 17. Percentage of total medical school expenditures paid for Federal research 23 APPIINDIX IV [From Canad. Med. Ass. J., Apr. 6, 1968, vol. 98, p~. 701-705] A SURVEY OF PHYSICIANS' REACTIONS TO DRUG PROMOTION (R. W. Fassold, M.D.,* and C. W. Gowdey, D.Phul.t London, Ontario) The purpose of thin study was to obtain an objective assessment of how physi- cians react to current drug promotional methods and whether they feel that they are being provided with enough reliable informatiosi on drugs to meet their requirements for prescribing. It was considered possible that the posing of certain questions on drugs might encourage more physicians to greater participa- tion in formal programs of continuing education. METHOI) To test the reactions to drug promotion, a list of questions was compiled which was revised repeatedly after consultations' with several practising physicians, pharmacologists and a pharmacist, and with the aid of Payne's "The Art of Asking Questions". (1) The questionnaire was pretested by two local practition- *Rese~arch done while a medical student, University of Western Ontario. tProfessor and Head~ Department of Pharmacology, University of Western Ontario. NOTE-Numbered references at end' of article. $94, 900, 339 5474, 948, 244 2, 855, 129 12, 081, 831 31, 937, 435 48, 179, 199 $524, 685, 047 12, 732, 011 52, 522, 271 42 42 58 58 43 41 54 52 82 82 15 15 3 3 35 34. PAGENO="0268" 5740 C0~1PETIrIVE PROBLEMS iN THE DRUG INDUSTRY ers who suggested several minor cMnges and estimated the time required for completing the questions. In June 1966 the questionnaire was mailed to the 1584 doctors in the 14 counties of Southwestern Ontario. Included with it were a cov- ering letter from Dr. A. T. Hunter, Director of Continuing Education, encouraging participation in the study, and a stamped self-addressed envelope. No rewards were offered for returns and no reminder letters were sent. The covering letter did state, however, that if the questionnaires were signed, the results would be sent to all participants. RE5~JLTS AND DISCiJSSION A total of 531 questionnaires (33.5% of those originally sent) were returned completed; 10 more were returned incomplete because the physician was no longer in practice. Of the completed returns 253 (48%) were from general prac titioners and 270 (51%) were from specialists, but for eight `the type of practice was not indicated and could not be determined. Although the distribution of general practitioners and specialists in the mailing list is not known, it is worth noting that the percentage distribution of the returns was very close to the distribution of all Canadian physicians as reported by Canadian Facts Com- pany Limited (2) (i.e. specialists 48%, general practitioners 52%). The distri- bution of specialties in our returns is also very similar to that for the Canadian physician populatian, except that our percentage of returns from psychiatrists was higher, and from surgeons was lower than the actual distribution. This may reflect a great interest by psychiatrists in a study of this type, or probably that psychoactive drugs are being more actively promoted now; the surgeons would not be expected to have as great an interest in drug protaotion. Although the instruction stated that a signature was not required, it is of interest that 91% of all doctors replying did sign the questionnaire. That many of the doctors who replied did so conscientiously can be `inferred from the detailed answers to some questions and from the number of unsolicited observations and thoughts expressed on drug promotion. It might be argued that doctors with strong opinions on drug promotion would be more likely to return completed questionnaires. Nevertheless, these were the opinions expressed by a group of over 500 doctors representing a cross.section of the Canadian medical profession. The answers to questions Concerning the size of the community in which `the doctors practised and the country and year in which they graduated revealed that, as expected, 95% of the specialists practised In communities with popula- tions exceeding 20,000, and 78% in centres over 50,000. Of the general practi- tioners, 45% practised in communities under 20,000. Most of the doctors replying graduated between 1940 and 1950: 71% of specialists and 63% of general practi- tioners. There was little difference between `the group as to the country where ~they became medically qualified. Although 80% of all doctors qualified in Canada, 10% in the United Kingdom and 3% in the United States, a total of 14 countries were represented in the remaining 7%. In the tabulation of results all respondents indicating a specialty are called "Specialists". The eight returns where the type of practice was not specified are not listed separately but are included in the totals for "All Doctors". The results throughout are given in percentages of answered questions with the totals in parentheses. Any discrepancy between the totals Shown `in the tables and the number of respondents (531), or between "General Practitioners" and "Spe- cialists" replying and the total replies, is accounted for by the eight unspecified returns and by those in which that particular question was unanswered. Because in all tables the percentages shown have been rounded off to the nearest whole number, not all the figures add up to exactly 100%. For questions containing "other" categories, there were not enough of any answer to be considered signifi- cant and these are not subdivided. PAGENO="0269" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5741 TABLE I-PERCENTAGE DISTRIBUTION OF ANSWERS FROM ALL DOCTORS Most informatige and/or most acceptable Least informative and/or least acceptable 1st choice or 1st choice or Choice of answers no rank 1 no rank 1 Direct mail advertising 6 67 Drugdetailman 46 13 Exhibits at medical meetings, etc Advertising in medical journals Other 20 19 9 8 12 0 Total number of doctors replying 521 521 iTo the question on `Most acceptable" 16 doctors gave more than 1 answer but did not rank them; both answers are included in totals and percentage calculations. Similarly, for `Least acceptable", 39 doctors gave 2 unranked replies and these are included. The questions can be grouped into three main categories: (a) general, (b) those dealing with the sources of drug information, and (c) those seeking opin- ions as to the quality of drug information. Question 1-Which of tile following drug promotion methods do you think usually is most informative and/or most acceptable? and Which of the follow- ing drng promotion methods do you think is least informative and/or least acceptable? Analysis showed that 56% of the general practitioners replying to this ques- tion considered the drug detailmen most informative and/or acceptable and 7G% indicated that direct mail advertising is least informative and/or acceptable. Not so many speci~a1ists (37%) appeared to find the drug detailmen most in- formative or acceptable, and not quite as many (59%) reacted adversely to direct mail. Fig. 1 summarizes the reactions of all doctors replying and shows clearly that, taken separately, the method of drug promotion most informative and/or ac- ceptable involves the drug detailmen, whereas the least informative and/or acceptable is direct mail advertising. It is realized, of course, that some of the reactions expressed to this and several other questions may have been coloured by the impressions made on doctors by the drug detailmen and direct mail arriving in the office just before the questionnaire. But the answers given lead us to conclude that in many cases these opinions are held strongly and were not prompted by the questions themselvee. Question 2-Which of the following do you think most influences you to use a drug for the first time? From these results it would appear that most doctors like to obtain informa- tion on new drugs from their colleagues (Table II). Continuing education pro- grams dealing with pharmacology and therapeutics could supply at least some of this information. TABLE Il-PREFERRED SOURCE OF INFORMATION ON NEW DRUGS Choice of answers Distribution of answers Percent Manufacturer's written advertising(direct mail, advertisements iniournals, Specialists 6 etc.). General practitioners 3 All doctors 4 Manufacturer's spoken advertising (detailman, exhibits, etc.) Specialists 18 General practitioners 31 All doctors 24 Colleague or consultant recommendation Specialists 57 General practitioners 54 All doctors 56 Patientrequest Specalists General practitioners 2 All doctors 1 Other Specialists is General practitioners 11 All doctors 15 Note: Total number of doctors replying, 521. PAGENO="0270" 5742 COMPETITIVE PROBLIiMS IN THE DRUG INDUSTRY Question 3.-Do you think the methods of promoting and advertising drugs in general are: ethical? beneficial? economical? Of the doctOrs who answered either "yes" or "no" to this question a total of 92% thought that they were not "economical" but more than half considered them "ethical" (Tiable III). TABLE Ill-OPINION ON METHOD OF PROMOTION Choice of answers . Yes No Don't know Total (percent) (percent) (percent) answers Ethical 62 23 16 498 Beneficial 48 32 20 484 Economical 6 77 17 492 Question 4-Do you think that drug adivertising round in medical journals is subject to stricter, more impartial censorship than most other forms of written drug advertising, and therefore contains more accurate and less biased inf or- mation? Of the 518 doctors who answered this question, 44% said "no" and of the 363 who said either "yes" or "no", 04% believed that drug adve?tiselnents in medical journals were not that different from other written `advertising. This was the feeling in spite of the fact that a number of the leading journals have in the past few years made their criteria for accepting journal advertising much more rigorous. Question 5-What happens to the drug advertising you receive in the ma4l? The answers given to this question correlate well with those to questiotke 1 and 2: otily 34% try to read all or some of the direct mail advertising; 20% never or rarely see the material, and 45% sort through but rarely read any of it (Table IV). TABLE IV.-FATE OF MAILED ADVERTiSING [In percentJ Choice of answers Specialists General practitioners All doctors Do you: Tryto read all of it? Try to read some of it? Sort through but rarely read any of it? Rarely see any of it, i.e. your nurse or receptionist disposes of the material as she sees fit? 5 33 48 5 3 26 43 10 4 30 45 8 Im~riediately discard without looking at any of it? Other 8 2 -~ 15 2 12 2 Total answers 266 250 523 Question 6-"Briefiy, what are your thoughts on direct mail drug advertising?" After reading through many of the answers to this question, it was decided to group the replies as shown in Table V. Some doctors gave answers which fitted into more than one category (e.g. they said "waste of time and of little value"); hence in this question the sum of the percentage of distribution of answers exceeds 100. PAGENO="0271" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY ~743 TABLE V.-ASSESSMENT OF DIRECT MAIL ADVERTISING Distribution Quotations from replies of answers percent Waste of time and/or money Useless; of little value; can do without Too much volume; too much repetition; too long Sometimes useful Annoying Inadequate; inaccurate; misleading Too promotional; gaudy Of little interest to practice, or no interest to practice Wants reprints or reviews only Wants file cards or standard brochure once 38 36 27 19 15 12 5 4 3 3 To announce new drug only 2 Total number of doctors answering 518 Using these and other quotations it was found possible to classify the answers into three groups: (a) mostly favourable, (b) mixed or indifferent, and (c) negative or hostile (Table VI). In some cases when the answer was mostly negative or hostile but the reply to the preceding question indicated that the physician tried to read some or all of this mail, the reply was classified as "mixed". It is noteworthy that only 3% of the specialists and 1% of the general practitioners did not express an opinion in reply to this question. TABLE VI.-REACTION TO DIRECT MAIL ADVERTISING [In percentj General Category of reply Specialists practitioners Negative or hostile Mixed or indifferent 68 23 67 27 Mostly favorable Total answers 6 259 250 Canadian doctors may have been influenced in their reactions to drug adver- tising by the 1960 report of the Committee on Pharmacy to The Canadian Medical Association (3). After the appearance of this report, Kelly (4) sum- marized what believed to be the attitude of most doctors to the "flood of direct mail advertising" by pointing out that: "it is so voluminous that only the most conscientious recipient opens each piece before consigning it all to the waste basket . . . most of it constitutes outstanding examples of the printer's and lithographer's art which conveys the impression of great expense and consequent wastefulness . . . it appears so expensive that doctors feel that it may con- tribute materially to the cost of prescribed drugs to the patients . . . it pro- duces in the minds of many doctors an unfavoura'ble image of the firm which sponsors it." Since that report, efforts to improve this medium were certainly made by some of the pharmaceutical companies and the total volume has been reduced. The fact remains, however, that in 1966 over two4hirds of 509 doctors still reacted in a negative or hostile manner to direct mail advertising and a total of 65% stated that they rarely read, rarely saw, or immediately discarded mailed drug advertising. These reactions to our questionnaire are different from those re- ported by the Oanadian Facts Company who claimed from their survey (2) that "only 16% of doctors allowed anyone else to discard any of their pharmaceutical mail `before they themselves saw it . . . as many as 70% gave an affirmative answer to the question `Do you make a point of trying `at least `to look at all your advertising mail? . . . only `30% expressed any dissatisfaction with the selection of mail sent to them". Qses~ti'on 7. How would you grade most detailnwn with regard to the following a~ttributes? Table VII shows that the majority of doctors rated most detailmen favourably (i.e., "good" or "excellent") as to personality (86%), reliability (65%) and honesty (69%) ; not so favourably (i.e~, "fair" or "poor") in the categories of general knowledge (67%), knowledge of drugs (63%) and usefulness (59%). PAGENO="0272" 5744 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY TABLE Vll.-ASSESSMENT OF DETAILMEN Poor Attribute (percent) Fair (percent) Good (percent) Excellent (percent) Total answers Personality Reliability 5 Honesty 2 General knowledge 11 Knowledge of drugs 13 Usefulness 18 14 30 30 56 50 41 74 56 60 32 34 38 12 9 9 2 3 3 519 504 503 506 513 509 Question 8-Have you ever reduced or stopped your use of a drug manufac- turer's products because of what you believe to be misleading or objectionable advertising in any form (i.e. include Impressions made by drug detailman)? In their answers to this question there was a marked divergence between specialists and general practitioners, but the reasons for this are not known (Table VIII). In any case, it is significant that almost one-half of all doctors replying stated that they had reacted in this way to misleading or objectionable advertising. TABLE VIII-INFLUENCE ON PRESCRIBING PRACTICES OF OBJECTIONABLE ADVERTISING Choice of answers Yes (percent) No (percent) Total answers Specialists General practitioners - All doctors 39 59 49 61 41 51 263 248 518 Qeestion 9.-Do you think there should be a regular publication by an independ- ent medical body, giving practical and unbiased guidance on new drugs? An overwhelming majority (94%) of doctors replying thought that there should be such a publication (Table IX). TABLE IX.-DESIRE FOR INDEPENDENT OPINION ON NEW DRUGS Choice of answers Yes (percent) No (percent) No opinion (percent) Total answers Specialists General practitioners All doctors-.~ 94 92 94 4 6 5 2 1 2 269 249 524 The need for such information was recognized by the Royal Commission on Health Services. (5) One of their recommendations (No. 62) was that a National J)rug Formulary be prepared, issued and maintained on a current basis. "This Forniulary would include only those drugs which meet the specifications of the [Food and Drug] Directorate "There should be established . . . an Infor- ination Service which would issue periodic bulletins providing the latest infor- mation on drugs and drug therapy to physicians, pharmacists and hospittals." Whether a Canadian Drug Formulary can be produced and kept up to date is questionable, but there are several currently available publications which do give information on the newer drugs. (6-10) Question 10.-Are you familiar with The Medical Letter? It appears that somewhat snore general practitioners than specialists are familiar with and use this publication (Table X). Analysis showed that of the 79 specialists who stated that they read it "regularly" or "often," 28 were specialists in medicine, 11 in psychiatry and 8 in obstetrics. The proportion of psychiatrists who said that they read this publication is relatively high and may be another reflection of their current interest in drugs. PAGENO="0273" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5745 TABLE X,-FAMILIARITY WITH "THE MEDICAL LETTER" [In percent[ General Choice of answers Specialists practitioners All doctors Yes, I use It regularly Yes, I use it often Yes, but I rarely use it Yes, but I have never used it No Total answers IT 20 10 36 7 28 - 25 20 25 10 20 22 15 30 8 4 523 Question 11.-Do you consider The Medical Letter an adequately authorita- tive, unbiased, and thereof useful source of information on new drugs? Although the doctors were directed to omit this and the following question if their answer to Question 10 was "No", it was realized during the analysis of results that this was an error in instruction (Table XI). Therefore we recorded answers to these questions only if the preceding answer was either "Yes, I use it regularly" or "Yes, I use it often." TABLE XI.-OPINION OF "THE MEDICAL LETTER" [In percentJ General Choice of answers Specialists practitioners All doctors Yes 56 42 47 No, but it is the best source of information of this type presently available_ No 39 2 56 1 49 2 No opinion.. 2 2 2 Total answers 1 79 113 195 1 See text for explanation Question 12-If the Medical Letter presented a clearly adverse report on either the safety or effectiveness of a new drug you were using, or anticipated using, what influence do you think this might have on your treatment plans? (Assume the drug in question could not generally be considered a `life-saving drug', and that there are older, more widely used drugs available, and recommended for the condition.) Of the 195 doctors who answered this question, and had stated earlier they read this publication regularly or often, 89% stated that they would heed the adverse report. Several suggested that if the adverse report bad to do with safety, they would not use the drug until they had more information, but if the report concerned efficacy, they would use their own judgment as to con- tinuing it. SUMMARY A total of 531 physicians from Southwestern Ontario responded to a question- naire that sought their reactions to current methods of drug promotion-a re- sponse rate of 33.5%. The distribution of general practitioners and various special- ists was comparable to the Canadian average. Most physicians bad graduated in the 1940's; 80% had qualified in Canada, 10% in the United Kingdom. Direct mail drug advertising was reported to be the least informative and/or accept- able to 67% of all doctors, and the same number gave negative or hostil answers when asked for their thoughts on this type of promotion; it was sorted through but rarely read by 45%, and rarely seen by another 20%. Drug detailmen were reported to be most informative and/or acceptable by 46% of the doctors and most of them were rated favourably as to personality, reliability and honesty, but not so favourably as to drug and general information, and usefulness to doc- tors. The majority of doctors declared that recom~nendations from colleagues (or consultants) were the greatest influence to use a new drug. On the promotion of drugs in general, a majority thought it ethical and 77% thought it was not economical. Of the respondents, 94% thought there should be a regular publication S1-2B0 09-pt. 14-iS PAGENO="0274" 5746 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY giving practical, unbiased guidance on new drugs; 49% reported that they had reduced or stopped using a manufacturer's products because they believed the advertising to be misleading or objectionable. The authors are indebted to Dr. J. M. Parker, Department of Pharmacology, for his advice and help with the manuscript, and to Dr. A. P. Hunter, Director of Continuing Education, Faculty of Medicine, for his interest and his kind co-operation in sending out the questionnaires. Dr. Hunter and Dr. W. W. Wigle, President of the Pharmaceutical Maufacturers Association of Canada, provided some financial assistance to defray the mailing costs, which is gratefully ack- nowledged. REFERENCES 1. PAYNE, S. L.: The art of asking questions, Princeton University Press, Princeton, N.J., 1951. 2. Canadian Facts Co. Ltd.: A study of Canadian physicians' attitudes to medi- cal mail advertising and pharmaceutical literature, Seccombe House Canada Ltd., Toronto, September 1966. 3. Canadian Medical Association, Committee on Pharmacy: Canad. Med. Ass. J., 83: 505, 1960. 4. KELLY, A. D.: Ibid., 83: 553, 1960. 5. Canada, Royal Commission on Health Services: Report, vol. 1, Queen's Printer, Ottawa, 1964, p. 42. 6. American Medical Association, Council on Drugs: New drugs evaluated by the A.M.A. Council on Drugs, Chicago, 1967. 7. HUGHES, F. N., editor: Compendium of pharmaceuticals and specialties (Can- ada), 3rd ed., Canadian Pharmaceutical Association, Toronto, 1967. 8. American Society for Pharmacology and Experimental Therapeutics: Phar- macology for physicians, vol. 1, Philadelphia, 1967. 9. Consumers' Association: Drugs and therapeutics bulletin, vol. 1, London, May 3, 1963. 10. AARON, H., editor: Medical letter on drugs and therapeutics, vol. 1, Drug and Therepeutic Information, Inc., New York, 1959. APPENDIX V ARTICLES FROM VARIoUs SouRcEs ON DRUG TESTING [From the Washington (D.C.) Post, Jan. 9, 1969] Tua IMMUNIZATION OF DRUG TESTERS (By Morton Mintz) The quality of testing of prescription drugs is one of those problems whose complexities elude the grasp of most of us but whose implications are of life and death importance. For if poor testing is allowed to conceal from a physician that a medicine is useless, inferior of even positively harmful, it is not the doctor but the patient (or hundreds, thousands or even millions of patients) who may be exposed to needless exploitation, delay in obtaining effectve therapy and even injury or death. Periodically something happens to make the problem surface. There were, for example, congressional investigations by the late Sen. Estes Kefauver, Rep. L. H. Fountain and former Sen. Hubert H. Humphrey. Some testing was "superb," Humphrey once said. He found other instances of outright fraud. But much more often, he said, "mediocre and substandard testing was . . . conducted on good, bad, or indifferent drugs." Humphrey's inquiry ended in 1964, when he ran for Vice Presidet. Then, just three years ago, a tired industry-oriented Food and Drug Administration got a new Commissioner with a rock `em sock `em style. A mere 11 weeks after Dr. James L. Goddard was sworn in he told the Pharmaceutical Manufacturers Association that he was "shocked at the quality" of much of the test data EMA members had submitted to the agency, "The hand of the amateur is evident too often for my comfort," he said. Last July 1, Dr. Herbert L. Ley, Jr. succeeded Dr. Goddard. Dr. Ley's style is anything but rock `em, sock `em. For five months he made no public speeches PAGENO="0275" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5747 at all. But when be did, Last Dec. 3, he, too, focused on unsatisfactory testing of drugs. "I must tell you frankly that we have not seen the degree of improvement in the quality of clinical data from drug investigations that we would like," Dr. Ley told an educational conference sponsored by the FDA and the Food and Drug Law Institute. He documented bi~ point with a capsule review of the 406 drug-marketing applications received by the agency in the fiscal year ended last June 30. Only 59 were approved-about one-fifth as many as were so low in quality as to be "not approvable." Of the rejected applications, Dr. Ley said, more than half "suffered from deficiencies in clinical studies and inadequacies in efficacy data." "I intend to give this matter renewed attention * * * and possibly call upon experts outside the agency as well to see if we cannot find means to correct existing shortcomings," he said. As `if to underscore his point, the FDA soon thereafter disclosed that it in- tends to halt the sale of six antibiotic-containing combination drugs for which investigation showed there was little if any scientific evidence of efficacy-but whiëh nonethless were widely advertised and, over the years, prescribed for millions of patients. Two days after Dr. Ley spoke, support came from an unexpected quarter. In the Dec. 5 Medical Tribune, spokesmen for two major pharmaceutical houses were reported to have made a joint statement in Geneva, Switzerland, that despite improvement in recent years, "the vast bulk of clinical work with new drugs that is published is of abysmally low quality." This fact often is held against the drug industry, Drs. H. Bloch of CIBA, Ltd., in Basel and G. B. Paget of Smith Kline & French Laboratories, Ltd., acknowl- edged at a meeting sponsored by the Council for International Organizations of Medical Sciences in cooperation with the World Health Organization and the United Nations Educational, Scientific and Cultural Organization. But, the two doctors said, "it is as much to industry's disadvantage as to medicine's that this situation exists. This unsatisfactory state of affairs does not come about because industry seeks third-rate investigators to carry out these [drug testing] trials in the hope that they will thereby obtain an unreasonably favorable outcome It arises because of the dearth of investigative facilities and first-class investi- gators throughout the world." As they saw it, the answer lies in "a complete revolution in the attitude of medical schools and teaching hospitals to the' clinical investigation of drugs and the training of investigators." Their advice is no't out of proportion to the seriousness of the problem. But al'one it is not enough. The Government might well look upon the training of drug investigators as a public health necessity and pay the bill. Apart from that, as witnesses have told the continuing drug hearings led by Sen. Gay~ord Nelson, steps must be taken to eliminate the possibiltiy of bias in testing. As it is, manu- facturers commission testing. Those who do it know what company is paying the bill, whether a gift to a favored medical scho'ol may somehow be in the balance, whether there will be such forms of ego massage as honorariums for speaking at a conference in a distant city, whether a favorable result will cause a rise on the stock market from which personal advantage may be derived. One way or another, testing should be done by specialists who do' not know the identity of the manufacturers, who cannot benefit financially from the result, who are not motivated even subconsciously by a desire to get anything but the truth. If war is too important to be left to the generals, so Is drug testing too important to be left to manufacturers and to investigators who have not been immunized against possible bias. [From the B.ull)e?tin, at the AtomIc ScIentists, Jan'uaru 19691 Dnua TusTING: Is TIME RUNNING Our (By William M. O'Brien) (NoTir..-Dr. O'Brien, who is associate professor of preventive and internal medicine at the University of Virginia, Oharlottesville, discusses the' hazard of drug testing in the diseased human being. He contends that the FDA should be strengthened by improving its scientific status and upgrading the quality of its scientists; that drug testing should be taken out of the hands of the pharamaceu- tical industry, which he criticizes for showing unwarranted optimism about drugs.) PAGENO="0276" 5748 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY The vast majority of physicians feel that the best way to test drugs is to use the "art Of medicine"-every doctor should be allowed to try out a new drug and see how it works, and the doctors' testimonial should be sufficient evidence. After all, shouldn't a drug be tested and judged just as1it is used-by the physician in his office? A second approach considers medicine to be a science and not an art, and demands rigorous experiments in drug testing. Since the course of most diseases is highly variable, a control period is essential. Testing a new drug implies a com- parison with a standard established remedy or, if there is no evidence that drugs in any way benefit the disease being studied, a comparison with an inert dummy medication, usually referred to as a placebo. The drug and placebo treatments are randomly assigned to comparable patients and, to avoid any possible bias, the physician evaluating the response and the patient are unaware of which medica- tions are active. The second approach is rarely used. Most clinicians are skeptical of controlled trials, and particularly distrust the final statistical analysis which is required to insure that the investigator has not been misled by chance or deceived by natural fluctuations in disease activity. Drug companies prefer the first approach; uncontrolled trials are easier, and the resulting testimonials are apt to be favorable. A. famous physician once remarked: "Drug trials can be divided into two groups; enthusiastic trial with no controls and controlled trials with no enthusiasm." The uncontrolled trial-the "art" of testing new drugs-is, however, full of logical traps. Caring for disease is depressing, and both physician and patient may become wildly enthusiastic about new remedies. Sir William Osler is re- puted to have remarked: "We must use drugs quickly before they lose their power to heal." A new drug is introduced, has its fling, and then is discovered to be of little value or comes to be associated with severe toxic reactions. This pattern has repeated itself over and over again. FLIPPING THE COIN Another trap concerns the widely used technique of placebo substitution. Consider a disease with a highly variable course. Let us suppose that a patient has just experienced a severe exacerbation of disease activity. The physician, confronted with a patient who is doing poorly, decides to start a promising new drug. He gradually increases the dose of the drug, and eventually the patient has a remission of the disease process. Now the physician substitutes an illert dummy medication, a placebo, and the patient soon gets worse. He repeats the process several times, and each time obtains a verdict in favor of the drug. But has the favorable effect been due to the drug, or is it due to the cyclical nature of the disease? This is the same fallacy as a coin-flipping game with the rules which require that if it's heads I win; but if it's tails, you don't win, we flip again. Under these circumstances, it is hardly a fair game; if the game goes on for a number of coin tosses, the chances of your winning becomes virtually nil. Placebo substitution is an example of just such a logical fallacy, since the physician can decide to substitute the dummy whenever he wishes. The rules of the game must be determined before the game begins, not during the play. In a recent congressional hearing on the adequacy of drug testing, when the fallacy in the placebo substitution technique was pointed out, a vice president in charge of research at one of the largest drug companies defended it: "To imply that these clinical investigators purposely chose to institUte pli~cebo at the point in the patient's disease when the patient is about to experience an exaspera- tion of his illness, is sheer nonsense, and is a reflection on the scientific integrity of the observer and also on his moral character." Most physicians would agree, and would still prefer the "art" approach, in spite of this and many other falla- cies in the use of these uncontrolled techniques. A final problem in the art of drug testing revolves around payment for the tests. The companies must have favorable reports in order to market new products. If a physician constantly produced scientifically sound but unfavorable reports, would he continue to receive support from the drug industry? My ex- perience would indicate that he would not. If a physician consistently produced favorable testimonials, would he receive generous support? One physician is known to have received considerably more than $32,000 for results of drug tests praising new remedies over a two-year period. The Food and Drug Administra- titon (FDA) later produced evidence that these trials involved gross fraud and the physician was convicted in Federal Court. This is hard~y an isolated ex- ample. Marketing of the pain killer Norgesic was based on tainted data, and PAGENO="0277" COMPETITIVE PhOBLEMS IN THE DRiJG INDUSTRY 5749 numerous other instances could be cited. One wag suggested a second way to classify tests: "Drug trials can be divided into two groups: fraud and gross fraud." DRt~G PROMOTION I am a specialist in rheumatic diseases, and through my career I have watched the development of a series of new drugs for the treatment of rheumatoid ar- thritis. I, and many other rheumatologists, have considerable doubt that any drug is really effective in arresting the course of rheumatoid arthritis, so surely our first concern should be primum no~ nocere: first not to ii~jure the patient. Often it seems, however, that for the long-suffering arthritic the purported cure is worse that the disease. Early in my career, corticosteroids were being widely acclaimed. Unfor- tunately, they cause a variety of severe and even fatal side reactions including psychoses, peptic ulcers, osteoporosis, fractures, cataracts, diabetes, and so forth. Another great hope was phenylbutazone, which was moderately effective, but which unfortunately caused peptic ulcers, and even worse caused severe depression of the bone marrow and occasionally resulted in leukemia. Next was chloroquine, which was relatively weak, but seemed almost free of side effects. Unfortunately, after a few years of therapy, some patients became totally blind. Theii came indomethacin, another rather weak drug, which had numerous serious side effects. More recently dimethylsulfoxide (DMSO) was proposed as a panacea. Phis drug probably has no effect at all, but acts as a classical counter irritant. When rubbed on the skin, it causes redness, scaling, burning, and pain-the skin hurts so badly that the patient forgets his arthritis. Some patients developed ocular changes, and a few died of shock after receiving DMSO; human use of the drug is now prohibited. Today, we are beginning the era of the immuno- suppresslves, which can cause total depression of the blood-forming elements in the bone marrow. These are the most dangerous agents ever used in treating rheumatoid arthritis, and we can only wait to see what will result. THE INDOMETJ{ACIN 5TORY Indometbacin is a good example of how a drug is tested and promoted. The drug was developed at the research laboratories of Merck, Sharpe and Dobme, and the basic studies represented careful pharmaceutical research. By 1964, exjtensive clinical testing of the drug was underway. The only requirement of present U.S. law ia that a drug I~e safe and effective as labeled. Advertising is legally defined as labeling. By June 1965, the FDA felt that the drug met these requirements and that it was relatively safe if used as labeled, so they allowed the drug to be marketed. Merck immediately embarked on an ambitious advertising campaign. By early 1966, most medical journals contained eight-page color advertisements with head- lines stating that indomethacin was "the most promising antirheumatic agent that has been made available for clinical investigation since the introduction of cortisone." Many physicians might misinterpret this statement as meaning the drug could be used in any rheumatic disease. In fact, it has been tested and approved in only four specific diseases. Phe advertisements also stated in large type that the drug "extends the margin of safety in long-term management of arthritic disorders." Again, this implied that the drug was safer than other drugs and it could be used in any form of arthritis. Unfortunately, it did not specify what indomnethacin was safer than. The advertisements also contained four testimonial statements by eminent pratitioners, two of which stated indomethacin was "the drug of choice," imply- ing this drug in comparisons had been found more effective than other drugs when in fact such comparisons had not been made. One physician claimed that he had found the drug "extremely helpful in over 500 patients." Later, FDA officials indicated Merck's own records revealed the physician bad never treated anywhere near 500 patients. The claim was also made that the drug did not increase susceptibility `to infection. They omitted mentioning that these claims were based on experiments in a few rats with a system involving bacterial endotoxins, evidence which certainly could not he projected to claim that all infections in human beings would behave in a similar fashion. In fact, the drug ipereases human susceptibility to infection. Further, the advertisements stated periodic blood counts were not necessary, implying that the drug did not depress the hone marrow: the drug is known to cause total fatal marrow depression. PAGENO="0278" 5750 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY The direct promotion of the drug to physicians seemed even more distorted than the advertising. One regional sales manager instructed detail men under hi~ supervision: "It is obvious that Indo'cin will work in that whole host of crocks and cruds which every general practitioner . . . sees everyday In his practice." (The drug is too toxic for routine use in minor com~ilaints, and the "crocks and cruds" indicates considerable contempt for the public.) Further, the salesmen,: were told to play down side effects. A SEMANTIC PROBLEM In the summer of 1966, officials of the FDA demande~l that Merck drastically alter its advertising. Officials felt that the advertising did not contain sufficient information on toxicity and overstated the usefulness of the drug, particularly in implying that it could be safely used in any form of rhe~imatic disease or arthritis. Merck complied for a brief period, but in Novethber l9'66 the firm began an even more objectionable campaign, resulting in a second crackdown, and a request by the FDA to' the Justice Department that the compan3~ be crim- inally prosecuted for the November adverti~e'nieñts. At the Senate hearings on indomethacin, the president of Merck and Company pleaded: "Language is not a perfect method of communication, and it may well be that words ançl phrases that we used in the belief that they mean one thing may have been ihterpr~ted by sOnié physicians to mean something else. Such are the complexities of semantics." This company's advertising cornte~ted the legally approved labeling of "Indocin itself may cause peptic uiceratioi~. . ." unto "Ulceration of the stomach. . . ha~ been reported." The difference is hardly semai~ti~, since the second statei~i~iit implies doubt as to causality, while the first does nOt. Rven worse "semantic" difficulties were arising over the use of the drug in.children. In late 1964, the FDA had recommèndèd to Merck that the prescribing direc- tions for the~drug state that this drug should nt~t be used in children. No experi- ences in children had accumulated and children often react differently to drugs than do adults. Unfortunately, in the prescribIng directions issued with the drug, *this warning was altered to read "not recommended for use in children," rather th'a~ an absolute pro'biX4tion. In the fine print in the advertising, this was further changed to `~Safety in pediatric age groups. . . has not been established," implying that the drug was safe in children, but little experience had accumulated as yet, This ~anguage was, indeed, not a perfect method of communication, and physi- cians did use `the drug in children. By July 15, 1966, the FDA had learned of sudden deaths due to overwhelming infection iii several children receiving In- domethacin. The officials requested that Merck immediately warn all American physicians by letter against the use of `this drug in children. In addition, the FDA required that the labeling include additional warnings, contraindications, and clear indications of adverse reaction and precautions, By November 1966, the Canadian Food and Drug Directorate became increas- ingly concerned about deaths in children. Rather than rely on the company to warn physicians, the Directorate sent letters directly to every Canadian physi- cian, stating: "Several deaths have been reported in children with severe forms of rheuma- toid arthritis, dermatomyositis, and rheumatic fever who were receiving indome- thacin. Some of these children succumbed to an intercurrent infection, the severity of which may have gone unrecognized during treatment. The exact relationship to indom.e:thacin was difficult to determine in these reports. However we recom- mend that indomethacin should not be used in children until the results of further studies become available." A PILL PER ILL In early 1967, further disquieting news appeared. Previous evidence of the effectiveness of indomethacin had been based almost solely on testimonials by physicians and much of this information had never been fully published in reput- able scientific journals. In early 1967, for independent, careful, double-blind trials were ~published in leading medical journals. In these trials two' groups were used, one receiving indomethacin and another receiving some contrast medication (either a standard drug such as aspirin or an inert dummy). Neither the physician nor the patients knew which capsules were active. All four of theCe independent scientific trials (none of which relied on art or clinical opinion) failed to show that indomethacin had any more potency than simple aspirin. PAGENO="0279" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5751 The trials could not substantiate any of the claims made in previous reports, which had indicated that 60 per cent of patients had improved. The company declared some of these trials were totally invalid and in later testimony urged that drugs be evaluated in an uncontrolled fashion by physicians who were expert in the treatment of rheumatic diseases. While no one could question that many of the company-sponsored physicians were expert clinicians, the question of whether they were performing scientific experiments remains unresolved. The company also implied in later testimony that the controlled trial is something new in medicine. An excellent controlled trial was performed in 1747 on board the British warship salisbury by Dr. James Lind. Twelve seamen with scurvy were divided into six groups of two. He tried different therapeutic regimens on the similar groups and found that only the two sailors who received citrus fruits were cured. The technique of controlled experimentation is hardly anything new in either science or medicine and the issues in drug testing really boil down to art versus science and testimonials of "experts" versus numerical evidence. Certainly the public desperately hopes that the medical profession will provide a pill for every ill'. The public realizes that pharmaceuticals are Important and represent a potential cure for any disease. But the public Is also coming to realize that they may be killed by drugs, and particularly, that they may receive new and untested drugs without even being informed of thepotential dangers. Even worse, the physician himself may be unaware of the potential dangers of the drug. The medical profession responds that every physician should use new drugs and get acquired with them and that it is only in this way that the public will receive instant benefit from latest advances. Doctors certainly like to try the newest remedies. About one third of American thalidomide babies were born to wives of physicians who had received free samples of the drug~ SPEND $900 MILLION ON AD5 The average physician's utilization of drugs is at best disturbing. In a.study of 408 cases o1~ bone marrow depression due to ebloramphenicol, of which one half resulted in death, the drug was prescribed for a valid reason in only ~ix per cent of the cases, and was given for common colds in 12 per cent. The drugs industry spends about $3,500 per physician on salesmen who personally "detail" the doctor on the latest breakthroughs. A total of $900 million is spent on advertising, about three times the amount spent on medical education. And the advertising is suc- cessful. A recent survey of drugs dispensed by the mail order drug service of the 4~merican Association of Retired Persons revealed that Peritrate, an expensive, long-acting dilator of the coronary arteries, was the most commonly prescribed drug in old persons This is indeed a `triumph for the hard sell Madison Avenue campaign which modestly billed the drug as "life sustaining," for several careful scientific trials have shown the drug has no pharmacologic effects of any kind on coronary artery disease. Of the 12 top drugs prescribed for these retired persons, two were expensive substitutes for aspirin, and four were expensive substitutes for phenobarbi'taL The use by physicians of fancy, dangerous, and expensive sub- stitutes for old standard remedies undoubtedly contributes to the staggering costs of medical care. In a survey of 1,014 consecutive medical admissions at Yale University's teaching hospital, 10.3 per cent of patients had a drt~g reaction; in 1.4 per cent the reaction threatened the patient's life; and in 0.4 per cent the patient died as a result of the reaction. A similar survey at Johns Hopkins of 714 medical patients. revealed 17.1 per cent had reactions and 1.55 per cent were fatal. Even If only one-tenth of one per cent of all hospital admissions died of drug reactions, the deaths would approach 29,000 per year. Deaths due to drugs would be a major public health problem comparable in importance to infectious disease, cancer of the breast, and nephritis as a cause of mortality. I would be the first to admit we have no idea what the magnitude of the problem is, but I would violently disagree that no problem exists. Physicians are not legally required to report drug reactions to the FDA. In fact, it is to their advantage not to report reactions since it might involve theni' in a possible lawsuit on the part of the injured patient. Just what percentage of drug reactions are not actually reported is unknown, but most informed sources feel that it is less than one per cent. Lowinger recently reported in Science maga- zine that only 10 of 26 reports on drug safety which he had submitted to 19 pharmaceutical manufacturers had ever been forwarded to the FDA. He further PAGENO="0280" 5752 COMPETITIVE PfiOBLEMS IN THE DRUG INDUSTRY stated that 14 companies which failed to submit toxicity reports included some of the largest and most scientifically capable pharmaceutical houses. We do not know the extent to which adverse reactions `to drugs are a problem in American society, and probably we will never know since the physician and the drug company both attempt to conceal evidence of toxicity. NATIONAL TESTING POLICIES The medical profession has generally felt that the practitioner should be allowed to use any drug in any way be sees fit. Attempts to control his use, of drugs or to prevent him from using new compounds would be interpreted as an infringement of his basic right to practice medicine and to prescribe in a way in which he sees fit. The FDAdoes not actually prevent doctors from experiment- ing with new drugs, but does request the physician to register with the agency. keep accurate records, and that either be or his sponsor promptly informs the agency of adverse reaëtions. The American Medical Association, which receives over half `its income from drug industry advertising, has not been vigorous, in fact not even feeble, in demanding careful clinical testing, honest advertising, or the control of highly toxiC drugs. The pharmaceutical industry itself has demanded a hands-off attitude and has vigorously fought every attempt nit any Inquiry into drug testing or drug toxicity and has opposed all legislation aimed at controlling drugs in any way. It has done little to police itself and undoubtedly will do little in the future, The Indus- try has established warm and cordial relationships with, and donates funds to, medical organizations. In return, the pharmaceutical industry has an undue influence over the policies of these organizations. America's great disease-oriented foundations, that rely on public contributions to study cancer, heart disease, arthritis, and so forth, have not made any major attempt to protect the public against drug reactions. This is perhaps understand- able, since most of the fund-raising abilities of these organizations is based on promising the public a cure, usually by drugs, and scary stories about toxic reac- tions to drugs will hardly help fund raising. Furthermore these foundations have strong ties with the drug industry. The nation's medical schools are too poor financially to do much to promote either better trials or good postgraduate education on the use of drugs. Phe faculty of medical schools probably represents the only major source of physicians with the talent and skill required to scientifically test and evaluate new drugs. Contrary to what most people believe, the drug industry is not pumping money' into medical schools to support research on dntgs. During 1965-66 the medical schools' total expenditures for sponsored research was $375 million. Of this, they received $3 million from nongovernment sources for unrestricted research. If one assumed half of this came from the drug industry, this would amount to about half of one per cent Of the total research budget of the schools. The widely publicized Pharmaceutical Mdtnufacturer's Association Foundation, which devotes itself to the "betterment of public health," had awarded only $55,000 in faculty development awards in clinical pharmacology up to the end of 1967. A few com- panies-notably Burroughs Welcome-provide excellent faculty fellowships, but' these are few and far between-about 20 in the entire country. Considering the numbers of MDs and PhDs which the drug industry consumes annually, they may actually make no net cOntribution and may even represent a drain on the resources of the schools. NIh SUPPORT The only substantial source of `support for good testing and research on drugs comes from the National Institute of Health (NIH). The total expenditures for support of reseai~ch on drugs are about $50 million, of which $3.5 million is spe- cifically earmarked for drug testing. This amount, less than five percent of the total NIH budget, is hardly enough to support all the work that needs to be done. Because of the difficulties in obtaining funds for clinical pharmacology, most departments have drifted to where the money is: basic molecuiar biology. The result has been good, bat medical pharmacology has become lopsided. Most departments are headed by molecular biologists, and emphasize basic research. Only two or three real departments of clinical pharmacology are to be found in the entire country. The bright young clinical investigator finds support difficult to' obtain for testing drugs, and tends to gravitate into other areas where funding is easier to obtain. PAGENO="0281" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5753 Unfortunately, many medical school investigators whose research programs are funded by NIH also receive personal honoraria from the drug industry. While federal funds are paid only to the medical school and can be used as prescribed in strict budgets, the industry funds may be received as personal income outside the framework of medical school salary scales. Some of these Investigators seem far more concerned about the welfare of the pharmaceutical industry than they do about the tax-paying public, even though the public actually provides most of their support. The industry has every right to pay their consultants as they see fit, but publicly-supported investigators should not be permitted to be inv~1ved in serious conflict of interest. The FDA is the only real organization solely devoted to protecting the American public. This agency is the stepchild of two great drug catastrophes: the Food, Drug and Cosmetic Act of 1938 was passed as a result of the elixir of sulfanila- mide catastrophe in which 108 children died, and the 1962 Harris-l~efa~ver amendments were enacted because of the thalidomide catastrophe. The powers of this agency are limited by law and the officials are subject to political pressure. If anyone in the medical profession wishes to criticize or belittle the FDA, he can find an immediate audience in almost any medical journal and his efforts will bring him rich rewards from the pharmaceutical industry. Claims are continually being made that the agency is interfering with research and depriving the public of life-saving drugs. The truth, more lik~ly than not, is that the agency has prevented doctors from poisoning patients with some new, expensive drug of questionable merit. This agency has a long way to go. Under Commissioner James Goddard many improvements came about. Officials gradually began to, insist on better quality trials, and a crackdown on false advertising was begun. Although Goddard was overly frank, and the drug industry capitalized by both misquoting him and exploiting his candor, the public owes him a great debt for improving the Admin- istration. There is every expectation that his successor, Dr. Herbert Ley, will continue to serve the public interest, and see that the FDA becomes even more effective in its mission. FUTURE THERAPEUTIC CATASTROPHES Over the past 30 years, this country has experienced several major therapeutic disasters. Many patients were needlessly killed or badly injured by indiscriminate use of certain new drugs. It is said that this is tt price we must pay for progress. If a good scientist examined the records of these disasters, he would have to conclude that if testing were conducted in a totally impartial, highly scientific manner, all of these catastrophes could have been avoided. But the Pollyannas of the drug industry assure us that new disasters are impossible. A few Cassandras, however, prophesy even worse calamities. Pharmaceutical companies are producing new and highly toxic compounds at a startling rate and the number of new drugs being introduced for clinical testing is rapidly increas- ing. What are the possibilities of another major drug disaster? Dr. H. Friedman, in a letter to Science magazine, stated: "Let us assume that a drug (such as a combination psychic energizer and diuretic) with no known side effects is aggressively promoted and very widely used throughout North America and Europe. Some 16 years after its adoption, the first hints of unexpected side effects begin to appear and several more years are required before they are confirmed. All children born to mothers using this drug during the first three months of pregnancy (effective as it is for morning sickness) are found to be sterile. The use of the drug for 20 years has affected the larger proportion of an entire generation so that populations of countries effected will drop sharply for several decades and require several additional decades to recover if given the opportunity. "The effects of thalidomide were relatively easy to discover and limit, but how readily can we detect more subtle effects in time to prevent the possibility of a history-changing catastrophe? In contrast to such a situation, the individual tragedies attributed to past and present drugs would seem rather tolerable." All the elements for vast future catastrophes are present: lots of new, highly toxic drugs, sloppy and dishOhest testing, and hard-sell, dishonest advertising campaigns, to which the average doctor is highly susceptible~ PAGENO="0282" 5754 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY WHAT CAN BE DONE? I think we can expect little stimulus for correcting the inadequacies of our present system from organized medicine. Physicians' organizations and our disease-oriented foundations have been sweethearts and financial dependents of the drug industry too long to desire any effective change: drug testing must be cleaned up. Pests are not getting any better. In 1960, McMahon and Daniel, reporting in the Canadian Medical Association Journal, found only five per cent of. published trials met even the crudest scientific standards. The trials I reviewed in 1967 were not any better. The doctrine that other parts of medicine are science, but that drug testing is a mystic art which can be performed by only uncontrolled dabblings of so-called experienced clinicians is a sham. Further, it is ethically unacceptable to subject human beings to dangerous drugs unless the experiments are scientifically excellent. The FDA has made some feeble beginnings, but society must demand that only scientific experiments which produce meaningful numerical results :be acceptable. Drug testing should be taken completely out of the hands of the pharmaceutical industry. They have repeatedly been guilty of irresponsible optimism about drugs, and their use of paid testimonials is a shallow substitute for good scientific trials. The distorted Madison Avenue approach used in the promotion and advertising of drugs must be completely eliminated. How can society, which spends only $250 million on medical education, idly stand by and watch the drug industry spend $900 million annually on the post-graduate miseducation of physicians? The public eventually foots not only the bill for the advertising, but also the biB for the new, dangerous, fancy substitutes for the old established remedies. The annual $5 billion drug bill could easily be reduced by $2 billion. Claims that ad- vertising is necessary, and that promotional efforts serve a useful purpose are D joke. The physicist would hardly think of announcing the discovery of a new particle by an aggressive advertising campaign. Why can't physicians get in- formation on new drugs from scientific journals? This is exactly the manner in which they learn about the latest observations on complications of pneumonia, or electrocardiographic changes in heat block. New legislation is needed. The present laws require only that a drug be safe and effective as labeled. A drug must meet no pressing need, and a more toxic substitute for a standard drug can be marketed. The penalties for violations of the present laws should be increased. Convictions for serious fraud in adver- tising may carry only a maximum penalty of $1,000 under the present legislation. The penalties are so trivial and prosecution so infrequent, that huge settlements in personal liability suits resulting from dthg injuries have a much greater in- fluence on controlling the drug companies' advertising `than does federal legis- lation. A lawsuit to attempt to collect damage for a death is a very poor sub- stitute for preventing the death. A STRONGER FDA NIH should surely expand its work in clinical pharmacology, making every effort to upgrade it as a precise science. But simply providing more support is not enough. The public must be assured that investigators who receive public grants are loyal to the public cause, and are not involved in any financial con- flicts of interest. The FDA likewise should be further strengthened. FDA officers receive a~ constant diet of abuse and rarely if ever congratulation for the vital public service they perform. All of us have a role to p~rform in refuting frequent un- founded attacks on officials of this agency. At the siathe time, every scientist should in any way possible prod the FDA to improve its scientific status and the quality of its staff. Scientists must urge the public not to accept excuses for drug catastrophies or for excessive medical costs due to drugs. The scientist must particularly guard against the jargon games used by the pharmaceutical industry in obscuring any problem. Endless demands for proof positive, suggestions for long-term studies, and frightening announcements that any action will destroy the entire phar- maceutical industry are all part of this game. Dr. I. D. J. Bross, in science, has particularly warned against the fallacies: PAGENO="0283" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5755 "The only way to close the credibility gap is for the spokesmen for science to speak plainly, honestly, and bluntly-without minimizing mistakes, evading responsibility, rewriting history, or otherwise trying to cover up unpleasant facts. Language games in technical jargons have long been a favorite academic sport, but this is too dangerous a game to play when human lives and well-being are) at stake." Finally, the physicist or other scientist who is totally removed from the sphere of medicine and drugs should riot ignore this area. Obviously the medical pro- fes'aion it~'e'lf has been remiss in demanding the highest ethical and quality standards. Nowhere is the American public more exposed to the fruits' of good scientific research than when it benefits from drugs which are useful in com- batting disease. Likewise, the public is never more conscious of bad scientific research than when it is the victim of a therapeutic catastrophe. We must all face the unpleasant fact that adverse reactions to drugs are major public prob- Jems. Surely all scientists should do everything possible in their public roles to see that the quality of scientific research in drug testing is upgraded, and that the public interest is always first. [From the ~New York `Times, July 29,, 1969] PRIsoN DRTJG AND PLASMA PR0JE0TS LuAvu FATAL TRAIL (By Walter Rugaber) WASHINGTON, July 28.- The Federal Government has watched without inter- ference while many people sickened and some died in an extended series of drug tests and blood plasma projects. The profits generated by these activities have gone to an enterprising contractor for the nation's biggest pharmaceutical manufacturers. The immediate damage has been done in the penitentiary systems of three states. Hundreds of inmates in voluntary programs have been stricken with ill- ness and serious disease. An undetermined number of the victims have died. In a broader sense, countless millions of American consumers. have been in- volved. Potentially fatal new compounds have been tested on prisoners with little or no direct medical observation of the results. Prisoners failed to swallow pills, failed to report serious reactions to `those they did swallow, and failed to receive careful laboratory tests, These studies have generated data that have in turn been used to justify the sale of drugs at prescription counters across the country. This forbidding trail has been marked out by an Oklahoma-bor~i physician named Austin R. Stough and corporations in which he owns a substantial in- terest. Despite his importance in two vital fields, he is practically unregulated in either. As a general practitioner who reports no formal training or education in pharmacology, he is said to have conducted between 25 per cent and 50 per cent of the initial drug tests in the United States. The 59-year-old doctor, whose companies have been blamed for the repeated use of dangerous methods and inadequate equipment, is estimated to have produced the plasma for about a fourth of an important byproduct that is widely used to protect people exposed to infectious diseases. These prison-based enterprises have regularly incurred local disfavor. Dr. Stough was evicted from one prison by the Oklahoma authorities in 1964. He was forced out of an Arkansas prison by officials there in 1967. One of his corpora- tions is now under orders to close down prison operations in Alabama.. But Dr. Stough (rhymes with How) is said to retain financial interests In some private blood banks in Birmingham and Dallas, and he is known to be seeking connections with prison systems in new areas. He can do so freely. He has incurred no penalties, and dissatisfaction with his performance in one state has not prevented a repetition of it in another. * The Federal Government and the pharmaceutical industry-the two forces with enough broad power to compel safe practices from state to state-have main- tained a general indifference at every turn. Several agencies within the Department of Health, Education and Welfare have known the details of Dr. Stough's plasma collections and drug tests for years. They have not curtailed them. PAGENO="0284" 5756 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Some officials in Washington have attributed their inaction to gaps in the law and in the regulations under which they work, and a shortage of specific Federal standards is occasionally apparent. But critics in Congress and elsewhere have blamed bureaucratic inertia and timidity for the failure to regulate drug and plasma operations, and a lapse in enforcement is also occasionally apparent. For example, the Food and Drug Administration employs only a single physi- cian to conduct field investigations of all the studies underway in the United Stateis, and the Agency's inquiries rarely go behind the dry scienkific data. METHODS CALLED DANGEROUS The Division of Biologics Standards, a unit of the National Institutes of Health that Is responsible for the regulation of blood products, recently asserted that the safety of plasma donors was not its concern. Several major pharmaceutical manufacturers have recognized that some of the methods employed by Dr. Stough were extremely dangerous. They continued to support him with large sums of money. An executive of Cutter Laboratories once acknowledged, for instance, that gross contamination was apparent in the areas where the largest blood plasma operations were conducted. The rooms were "sloppy," he observed, When a Government doctor asked why Cutter continued to reward such an enterprise with hundreds `of thousands of dollars' worth of `business, the execu- tive explained that the Sto'ugh group enjoyed crucial "contacts" with well-placed officials. FEES AND PARTNERS These contacts involved, among other things, the payment of sizable retainers `to influential lawyer-legislators and the establishment of "partnerships" for a number of prison physicians who remained on the public payrolls. With neither Government nor industry intruding, w-ith most of their records held in secret, with officials passing the problem on to someone else, Dr. Stough prospered at his work throughout the nineteen-sixties. He has generally declined to talk with local newspapermen about the con- troversies involving him. And he recently refused to grant an interview with `a reporter for T'he Times. "We've taken the position of no comment," Dr. Stough said during a recent telephone conversation with a reporter who had asked to see him. "I don't think we're interested in airing anything in the newspaper." "We think some people `have made a `mistake," he remarked, referring to the medical observers, editorial writers `and st'ate officials who have assailed him. But, he `added, "I'm not looking for revenge on anybody." `efforts to photograph Dr. Stotigh were unsuccessful, and an extensive search of newspaper files an'd other sources turned up the pictures of the physician. STARTED IN OKLAHOMA Dr. Stough graduated from the University of Tennessee Medical College, spent a one-year internshi'p in Oklahoma City, and opened a private practice in McAlester, site of the Oklahoma Sta'te Penitentiary. late in 1937. He `soon `began to serve, on a part-time basis, as the prison physician. With direct access to more than 2,000 inmates, his drug tests began to grow extensively. In' the meantime, he started a new endeavor. On March 25, 19~2, `the inniates at MeAlester began lining up to participate in a `medical procedure called pla'sma-p'heresis. Under it, a unit of whole blood is drawn and the plasma, a fluid that makes up about 5~ per cent of the blood, is taken out. The remaining cells are reinjected. That was the critical step on Sept. 19, 1902, when one of Dr. Stough's technicians processed an inmate named Tommy Lee Knott, 47, `an illiterate prisoner with a long criminal record. Knott's `blood type was 0-positive, but he subsequently charged in a lawsuit that after the plasma had been drawn off, the technician pmnped another man's cells, which happened to A-negative `back into his veins. ORGANS DIAGNOSED Unfortunately for Knott, hi's liver, lungs, brain, kidneys and other organs were iniured, his nervous system underwent shock, and his weight dropped 58 pounds in 17 `days. PAGENO="0285" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5757 In suing Dr. Stough and two associates for $270,000 in damages, Knott also reported that the incompatible blood had caused a double hernia, permanent secondary anemia and a 10 per cent reduction in life expectancy. The defendants managed to settle out of court for $2,000 after Knott, who had been removed from the penitentiary for treatment, went off on a crime spree that landed him in a small town jail, Only three months after this inauspicious episode, Dr. Stough embarked on an ambitious expansion effort. The financial rewards inherent in his initial plasma- pheresis program would now be greatly multiplied. lie brought his plasma operation to Kilby Prison, a drab institution near Montgomery, Ala., in December, 1062, and in the following year he began drawing blood in two more of the state's prisons, Draper and Atniore. In October, 1963, he started a plasma program at the Cummins Farm, a sprawling unit of the Arkansas state penitentiary that was quietly going through an era of general `brutality and neglect. PROTEINS EXTRACTEE) Plasma itself can be used In the treatment of shock, but it also contains a number of proteins, inclhding gamma globulin, that can be extracted and employed to counteract a variety of medical difficulties. The gamma globulin from most donors contains enough antibodies against such diseases as measles and hepatitis to be effective when it is reinjected into a person who has been exposed to those diseases. This is not the case, however, with diseases such as mumps, whooping cough, tetanus and smallpox. Groups of donors receive vaccinations to build up the anti- bodies in the gamma globulin intended to treat these illnesses. The result is know as hyperimmune gamma globulin, and much of `the plasma Dr. Stough extracted was used by manufacturers to produce this serum. It can be a hazardous process. I)r. Stough demonstrated this immediately upon his arrival in Arkansas. Andrew Buddy Crawford, a 45-year-old inmate at the Cnmmins Farm, received the first in a series of whooping cough shots on Nov. 23, 1063. ifiEl) AFTER 8TH ShOT More amounts of `the vaccine were iniected weekly for a time, and on March 7, 1964, after a two-month lapse, Crawford received his eighth shot. He became ill about a week afterward. Crawford died slowly and in very painful fashion, and three Little Rock physi- cians, who reported the process with the lack of patients' names often encoun- tered in medical journals, said it was probably the result of the repeated vaccina- tions. It was left to The Pine Bluff (Ark.) Commercial to report, only last January, that the man who died on June 13, 1964, was Andrew Buddy Crawford, and that the progrom involved was directed by Austin II. Stough. As a inca sure of his grip on the market at about this time, a Government source calculated that Dr. Stougli's plasma would produce 193,970 cubic centimeters of byperimmune gamma globulin solution monthly. Since only about 800,000 cubic centimeters of this type of plasma product were distributed each month throughout the United States, Dr. Stough's output was the source of practically a fourth of the entire national supply. OTHER PRI5ON5 EYED "With demand exceeding supply," a Government doctor wrote of the hooni, "inquiries were made in other states concerning the possibili'ty of opening plasma- pheresis centers in other. . . prisons." A certain style had developed. In Oklahoma, Dr. Stough himself was the prison physician, The salary of $13,200 a year was inconsequential by his standards, but the standing it gave him within the prison was invaluable. So, in Alabama, be awarded Dr. Irl R. Long, `the senior prison physician, a financial interest in `the program. Until a few weeks ago, Dr. Long ~imu1taneously received a salary of $942 a month from the state. A committee of the Alabama Medical Association remarked in a report issued earlier this year that "this unconscionable situation, regardless of reason, should never have been permitted to come into existence." PAGENO="0286" 5758 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY The prison physician in Arkansas, Dr. Gwyn Atnip, was paid $20,000 .a year for his work i~ the plasma program there. As a desperately needed doctor among the inmates, he received $8,000 annually from the st~te. GOT POLICIAL AID Dr. Stough also lined up political support outside the prisons, a tactic that demonstrated its importance when members of the Oklahoma Legislature began to ask wether his penitentary operations were sanctioned by law. One of Dr. Stough's most vehement opponents was Gene Stipe, then a state Senator. But early in 1963 Senator Stipe changed sides and successfully pushed a bill that firmly established the physician's standing in the prison. Later it was discovered that at about the time this change of direction occurred and the saving law was enacted, Mr. Stipe, a lawyer, began to receive a $1,000-a- month retainer from `the concern headed by Dr. Stough. A spokesman for the organization asserted that the money was for legal services only. Mr. Stipe agreed. Henry Belimon, then Governor, expressed displeasure but noted that the state had no applicable confiict-of-in'terest law. The political nature of the matter was usually most apparent when Dr. Stough moved to enter the penitentiary system in a new state. His drive on `the major prison at Reidsville, Ga., was an example of the technique. CHECKED WITH CENTER Dr. Joseph Arrendale, the institution's medical director, one day telephoned Dr~ Ronald F. Johnson, then on `the staff of the National Communicable Disease Cen- ter in Atlanta. Dr. Johnson had followed Dr. Stough's plasmapheresis operations for some time. and Dr. Arrendale wanted advice. In a memorandum of `the conversation, Dr. Johnson reported as follows: "It was clear that Dr. Arrendale did not favor [a plasma program]. However, he felt tha't Dr. Stough might be `bringing poli'tical pressures to bear through the state legislature' which could clear `the way for such a program." The Georgia campaign ultimately failed, and a similar move on the state prison at Parchman, Miss., was also turned back. But by then Dr. Stough had encountered serious difficulties in his existing programs. The five prisons in which he was operating by the end of 1963 all were dras- tically in need of operating funds, and all exhibited obvious signs of longstanding general neglect. NO RECORDS The factors pertinent to Dr. Stough's activities Included a lack of medical attention (it bordered on the nonexistent in Arkansas), an absence of records, and an atmosphere of isolation and secrecy. Still, Dr. Stough's trail remains vivid at each significant turn, and its progress behind the high walls of Kilby Prison serves to illustrate the type of infection that was spread through four other institutions. By April, 1963, five months after Dr. Stough had opened his plasmapheresis center at Kilby, the incidence of viral hepatitis, an often fatal disease of the liver, was climbing sharply. From none or one or two cases a month, the disease now rose to more than 20 in a single period. Moreover, the outbreaks held generally firm between 10 and 15 a month through the following November. The rates then soared again. There were 29 cases in December, 22 in January, 1964, 23 in February, 27 in March, and 27 in April. A tenth of the prison popula- tion had been admitted to the Kilby hospital. Joe Willie Tifton, 46, died on March 18. Emzie B. Hasty, 42, died on April 14. Charlie 0. Chandler Jr., 31 died on April 10. David McCloud, 27, died on May 22. Each death was attributed to infectious hepatitis. Little bits and pieces then began to leak to the outside world. A penciled note from one inmate said, "They're dropping like flies out here." But a prison spokesman said: "The doctOrs are quite confident that there is no connection between the plasma program and the cause of hepatitis and jaundice." Dr. Stough's partner, Dr. Long, spoke as the senior prison physician. "That same program is being carried on at Draper aild Atmore," he declared, "and there have been no cases' reported there." This assurance was published in .The Montgomery Advertiser on May 24. PAGENO="0287" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5759 INMATES AFFLICTED Actually, the records show that by the end of May, at the time he spoke, 37 inmates had been hospitalized at Atmore and six sent to the infirmary at Draper, all with the same symptoms. It was not then mandatory in Alabama to report hepatitis cases to the public health authorities, and in that respect Dr. Long overlooked not only the cases at Atmore and Draper but also those at Kilby. Dr. Ira Myers, the state's public health officer, told the National Communicable Disease Center as late as June 5 that an epidemic "apparently" was under way in the prisons. There was, he said, "no direct confirmation" The exact number of hepatitis cases in the five prisons was never established and is never likely to be. Too many medical histories vanished, too many were never comliletéd, and too many were improperly kept by "inmate doctors." Some 544 cases were firmly established, and that conservative figure is the one most often used. But the communicable disease center records also contain esti- mates of mOre than 800 and evidence that the figure could run to more than 1,000. The number of deaths is similarly undetermined. In addition to at least the four in Alabama, there were reports of at least one in Arkansas and at least one in Oklahoma. The dimensions of the disease were more clearly and precisely stated in sets of percentages, or "attack rates," that measured the incidence of hepatitis among those who gave plasma and those who did not. At Kilby, for example, 28 per cent of the men who participated in Dr. Stough's program came down with the disease. For those who did not take part, the rate was only 1 per cent. The rate for participants in one of the barracks at Kilby was 39.1 per cent. At the four other centers, the illness struck between 20 per cent and 26 per cent of the donors and from 0.9 per cent to 1.8 per cent of the nondonors. FIRST ALLIED TO JAUNDICE The Federal investigators, reflecting scientific caution, initiajly referred to the prison cases as "illnesses associated with jaundice." A number of their records employed this phrase. Jaundice means a yellowish skin, and while it is a symptom of hepatitis, its presence is not conclusive. After extensive testing and study, however, the Gov- ernment doctors concluded: "The illnOsses seen in these prisons seemed to be indistinguishable with viral hepatitis. It is not felt that any serious question of the nature of the illnesses need be entertained." Hepatitis is a threat in every blood and plasma program, but the careful use of properly designed equipment can reduce the danger virtually to zero. Dr. Stough managed a double play: technique and apparatus both were cited in the epidemics. The details are complicated, but the general picture drawn by the experts was reflected by K. T. Kimball, an executive of Fenwal Laboratories who bad observed some of the plasma operations and who reported to Dr. Johnson of the Atlanta center, according to a written memorandum, as follows: "Mr. Kimball directed the conversation to the general level of care exercised by Dr. Stough's technicians. He felt that collection of large amounts of plasma in a rapid operation using equipment of Simpler design that Dr. Stough approved might easily lend itself to a high level of contamination of technicians' hands and surfaces of tables, equipment, and the actual bags and tubing used in the proce- dure. "He felt that contamination of these objects by the plasma of all donors could have occurred, and that absence of strict medical supervision could easily have led to short cuts in and inadequacies of sterile technique." SAYS lIE WAS "APPALLED" This was equally apparent to Byron Emery, an official of Cutter Laboratories who also visited some of Dr. Stough's `operations and who also talked with Dr. Johnson. Another Federal memorandum reported: "Mr. Emery stated that when be visited Alabama in April, 1964, he was `ap- palled at the `situation' he found. He said the plasmapheresis rooms were `sloppy' and that gross contamination of the rooms with donors' plasma was evident. PAGENO="0288" 5760 COMPETITIVE PROBLEMS IN THE DIIIJG INDUSTRY "Mr. Emery stated that [Dr. Stough and an associate] . . . could not be trusted to carefully supervise such a plasmapheresis program. "I then asked Mr. Emery why Cutter did not choose to operate such plasma- I)heresis programs by themselves without using Dr. Stough's group as an inter- mediate company... "Mr. Emery replied that Dr. Stough had contacts at the prison and it was through him the permission was obtained from the prison officials to operate the program." REMAINED BIG CtJSTO~IER Cutter nevertheless remained one of Dr. Stough's biggest customers. Alabama shut down the plasmapheresis centers in the middle of the epidemics and blocked Dr. Stough's efforts to start them up again. Oklahoma had taken over the plasma and drug-testing programs almost simultaneously just before the Federal investigation. In Arkansas, where he had never tested drugs, Dr. Stough was permitted to continue his plasma operations for three years before a quasi-public foundation successfully replaced him. And although the Alabama authorities bad stopped the traffic in plasma, they permitted him to continue hi~ drug tests without interruption. The enterprise was quickly stepped up. A pharmaceutical manufacturer generally develops a new product in the labo- ratory, tests it on animals, and then notifies the Food and Drug Administration that a three-phase tryout on human beings is ready to begin. Phase one is in many ways the most delicate step of the three because it is designed to establish basic factors such as toxicity, safe-dosage rates, metabo- lism, absorption, and elimination. Because of their critical nature, the first-phase tests are usually carried out on healthy subjects. The drug is tried on people who suffer from the target disease only after the phase one hurdle is cleared. Phase two involves limited administration of the drug to "carefully supervised patients," and phase three embraces "extensive clinical trials" that can include studies by doctors in private practice. COMPANY JUDGES DOCTOR The Food and Drug Administration is responsible for * * * the advance from phase to phase. The role of the individual manufacturer is substantial, however. It is basically the company, for example, that judges a doctor's qualifications as a drug investigator, chooses him to do the job, directs the testing, assembles the results and pays the fee. Healthy prisoners who by definition exist in closely controlled circumstances are perfect for phase one studies, and Dr. Stough remained hi heavy demand by pharmaceutical concerns. The Food and Drug Administration, citing regulations of the Department of Health, Education and Welfare, refused requests by The Times to exan~ine its records on Dr. Stough. A spokesman for the agency said, however, that since 1963 the physician has carried out some 130 investigational studies for 37 drug companies. Other types of tests arid work by an associate involved 45 additional programs. The F.D.A. declined to disclose the names of the drugs that Dr. Stough exam- ined or the names of the companies for which he worked. Some of the information has been obtained from other sources, however. BIG COMPANIES The companies included the Wyeth Laboratories Division of American Home Products Corporation; the Lederle Laboratories Division of American Cyanamid Company; the Bristol-Myers Company; the El. R. Squibb & Sons Division of Squibb Beech-Nut Inc.; the Merck, Sharp & Dohme Division of Merck & Co. and the Upjohn Company. These concerns, according to the current directory pub- llshed by Fortune Magazine, are among the 300 largest corporations in the United States. An investigation of Dr. Stough's work for thCse and other concerns began earlier this year after Harold El. Martin, editor and publisher of The Montgomery Advertiser, wrote a series of highly critical stories about the drug studies. PAGENO="0289" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5761 The State Board of Corrections asked the Alabama Medical Association to name a committee of inquiry, and Dr. Tinsley R. Harrison of Birmingham, a nationally known cardiologist, was selected as chairman. Even when the committee dealt with the welfare of the inmates its investigation inevitably raised broader issues, for Dr. Stough's "findings" became data and the data helped to justify public sale. The medical association investigators concluded not only that Dr. Stough's work had been "bluntly unacceptable" but also that as one result, "the validity of the drug trials themselves must occasionally be seriously in doubt." Because of the Food and Drug Administration's refusal to permit an inspection of its files, it is impossible to determine conclusively whether Dr. Stough ever reported unfavorably on the drugs he was paid to test. However, ho has published a number of scientific articles on his findings, and a review of those cited in the comprehensive Cumulated Index Medicu's singe 1960 discloses not a single critical appraisal. It was learned from independent sources that one of the drugs Dr. Stough had tested was Indocin, a best-selling product of Merck, Sharp & Dohme that is used in the treatment of rheumatoid arthritis. Dr. Stough's findings on Ind~cin are unavailable, but it went on the market after largely favorable data had been generated by company-paid Investigators, and the subsequent controversy points up the broad significance of testing. Indocin was assailed * * * the Senate Subcommittee on Monopoly. Contrary to findings of the initial data, witnesses said, careful tests had found the drug no more effective than aspirin, and it produced serious effects as well. A careful medical examination in advance of a drug test is regarded as essential to insure that the prisoners involved do not show signs of subtle disabilities that would make the study invalid. A member of Dr. Harrison's committee recalled during an interview that one day he and another investigator turned up at Kilby Prison to discover that 80 inmates had been examined for a new program in just four hours. Since that meant an examination every three minutes, the investigators asked to see the records. None were found on the premises-not for `a single prisoner. The records that existed were said to be at Dr. Stough's headquarters. The committee noted in its report that prisoners about to embark on a new test had "received a rapid explanation of the purpose" that left "considerable varia- tion in the understanding of what had been said." NO DOCTOR PRESENT The committee continued: "All this had seemingly `been done by technicians with no physician being present as far as could be determined. Two of the four prisoners who were inter- viewed indicated that they had never been `examined by a physician while they were in the prison although they had `been on several drug `trials." The fundamental purpose of a drug test is to spot any adverse effect and report it. There were breakdowns in Dr. Stough's operation, and Dr. Harrison's com- mittee cited a number of examples. First, it encountered a Mr. Howell, "a man~ with very little previous medical training whose experience before entering his present position h'ad been that of a venereal disease inspector." "It wa's stated with pride by this individual who functions `as hospital direc- tor, that he himself was able `to deal with nine out of every 10 patients who came to him so th'at the doctor was not bothered." A number of qualified medical sources said `that without a physician regularly on hand `to look over the inmates wh'o `took drugs, it would have been "totally impossible" to gauge reactions. PRISONER FEES VARIED Dr. Harrison's committee took up the question of fees paid by Dir. Stough to inmates who participated in drug tests. These varied widely, but a man could usually make a't least $1 a day for taking a series `of pills. This was big money for people who `otherwise received only 50 cenis every three weeks for incidental spending, `and it created what one investigator called "a built-in negative feedback." 81~-28O 0-69-pt. 14-19 PAGENO="0290" 5762 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Prisoners often covered up severe reactions in order to keep on with the tests, and several told The Montgomery Advertiser that they shammed taking pills and later spit them out. The medical group said of one inmate: "He h:ad hung on to the `end [of a test] although `he :had been feeling ver~ ill and had not complained of this illness because it would have meant his losing the pay which he `was hoping to receive for his participation." One conscientious experimenter who has gone deeply into the question of fees believes that a prospective subject should be offered no `more than two or three times the amount he would receive without taking part. NUBEMBERO CODE CITED The medical investigators underlined the importance of the fees and inadequate explanations `of the tests by attaching to *their report `the Nurem:berg Code, developed after the concentration camp excesses of Nazi `doctors. `The code calls for "free power of choice" and `holds that a subject "should have sufficient knowledge and comprehension of the elements of the subject matter involved as to enable him to make an understan'ding a'nd enlightened decision." `The Alabama committee `also inspected Dr. `Stough's laboratory. Its role in aaalysis samples taken from `the inmates was especially important since the direct `medical observation was rated low. In one instance the group found an error of about 40 per cent in the control agent against which laboratory samples from about 20 prisoners were being measured. The investigators `said: "This was pointed out to the laboratory director and be excused it [on grounds that the `committee rejected]. His attitude `to us was unacceptable and reflected poor technique." The operation "probably compares favorably wit'h `many small hospital labora- tories in Alabama," the group concluded. But it "lacks the `better qualified personnel an'd more careful quality control `seen in `better run laboratories." The committee reported that on top of the `other problem's, both Dr. Stough and Dr. Long had "limited `training In basic pharmacology." The `available bio- graphical information shows `they had no formal education i'n the field at all. "You might say they have had a lot of on-the-job training and backgroun:d," one clinical pharmacologist `said. "But this is a weak argument. Nowadays, with the `sophistication of modern drugs, you need more than this." Last May, after the State Board of Corrections had a look at the committee's report, Dr. Stough received another evicti'on n'otice and started to close down the `drug studies in Alabama. Thus, D'r. Stough suffered another setback. As before, a state `saved its prisons, from any further trouble. But as usual, the Federal `authorities end the pharma- ceutical companies remained `silent. ONLY ONE PHYSICIAN The single physician employed by the Food and Drug Administration to investi- gate drugs tests throughout the United States has visited Dr. Stough's operations twice, an agency spokesman said. Some citizens tend to think of the agency as an eternally vigilant organization, and in his dealings with local officials and newspapermen Dr. Stough has turned this misapprehension to advantage. "They [F.D.A. officials'] love to close people down," he said in the brief tele- phone conversation in which he refused to grant an interview. "So if I was off- color, they'd be on me like a hawk." "That's one of the reasons the [Alabama Corrections] Board wasn't con- cerned," explained Frank Lee, the state's commissioner. "We knew they [F.D.A. officials] came i'n here and looked into the operation." Dr. Herbert L. Ley, Jr., the F.D.A. Commissioner, branded Dr. Stough's asser- tion "a non sequitur." The Food and Drug Administration's lone medical inspector is alert to "fla- grant" dishonesty, and there have been men who tested drugs on nonexistent people and who produced imaginary results. But an inspection is limited mostly to checking data that have been submitted to the sponsoring drug co'mpany to insure that it agrees with data s'ent to the agency. There is little or no effort to look behind the figures. PAGENO="0291" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5763 "Our responsibility is not the direct supervision of the [drug] investigators," Dr. Ley said in an interview. "Our responsibility is to evaluate the data that come in to us. We can't be omnipotent or omniscient." While the agency has never found occasion to reprimand Dr. Stough, its inspec~ tor, Dr. Alan B. Lisook, did make some "suggestions" earlier this year about "the lack of medical supervision of patients." NOT ENOUGH SUPERVISION "We told him we thought there should be more supervision," Dr. Lisook said, "and he admitted there was not as much as he would like because of the volume of drugs being tested." This was virtually an acknowledgement by Dr. Stough that more tests had been undertaken than could be adequately overseen, but the F.D.A. did not require changa The agency "frowns" on insufficient supervision, Dr. Ley said, but under present policies there are no specific minimum standards. In the gray area that results, frowning is about the limit. Since between 25 per cent and 50 per. cent of the phase one studies have been concentrated in Dr. Stough's hands, Dr. Ley was asked whether volume alone- quality aside-concerned his agecny. "It's a red flag, there's no question about that," he replied. But the commis- sioner explained that neither law nor regulation permitted the agency to force a cut back in the number ofLstudies assigned to a single man. There is no step short of outright disqualification for obvious misconduct, Dr. Ley said. That is an action the F.D.A. has taken no more than a dozen times in its history. SHORTAGE CHARGER The drug companies contend there is a shortage of investigators, and Dr. Ley said that while he believed there were enough to study the "really new drugs," he wanted to avoid charges that the agency blocked progress. "It's harder to get a driver's license in the United States than it is to get fatal drugs," complained Dr. William M. O'Brien, an associate professor of preventive and internal medicine at the University of Virginia. He added: "To get a driver's license you have to take tests, show you know how to drive, and so on. For drugs, you just walk in the door and say, `I'm an M.D. I want to test drugs.' It's fantastic. It's unbelievable." It is difficult to measure the precise sums of money that the pharmaceutical industry has poured into Dr. Stough's operations, but a number of reliable clues are available. Operating within at least nine separate corporations, the major one of which is Southern Food and Drug Research, Inc., Dr. Stough has a gross income in a good year probably approaching $1 million. SMALL OVERHEAD He has not carried a high overhead. His net income in Alabama in 10G7 was nearly $300,000 (on a $500,000 gross), and his profit before taxes in Arkansas in 1906 was about $150,000. The Alabama Medical Association's committee treated the drug manufacturers with circumspection in its report, suggesting that the companies could hardly police the state's prisons. But it pointed out that the makers, as well as the Food and Drug Administra- tion, had engaged in monitoring of the drug tests that might have been "too super- ficial and too remote to provide maximum safety." The committee also found that in sponsoring Dr. Stough's tests the drug con- cerns had given "tacit approval" to his research. In this, it reported, the com- panies had "demonstrated some lack of discretion." "Our companies are usually pretty careful about who they have doing phase one work," said Dr. C. Joseph Stetler, president of the Pharmaceutical Manu- facturers Association. "They aren't interested in guys who aren't doing a first- class job." Mr. Stetler said that some concerns might make more rigorous over-all studies of potential investigations than others and that in some instances the day-to-day supervision "gets to be seemingly routine." PAGENO="0292" 5764 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY DOUBTS NEED FOR BARS Heavy demand for phase one work may also be a factor in quality, Dr. Sitetler added. But he said he was not sure the Government should restrict an investiga- tor's work for high volume if the "end product" was satisfactory. Each of the pharmaceutical companies that could be identified as having re- tained Dr Stough was asked to comment on Ins drug testing and each defended the validity of the data he submitted. For example Merck Sharp & Dobme said in a prepared statement that Dr Stough s facilities staff volunteer group and prior experience were particularly suited for the studies it required The physician has conducted 14 projects for the concern since January 1968 and the company s statement concluded in our opinion the studies were properly conducted and the data provided have been sound Merck, Sharp & Dohme asserted that practically all of the studies carried out by Dr Stough had been extensively studied and clinically used by others and that some of the drugs had already been approved for marketing LACK OF CRITICISM A spokeman for Lederle Laboratories pointed out that Dr Stough s testing operations at the Oklahoma State Penitentiary had not been criticized publicly by qualified medical observers Wyeth Laboratories said it had retained Dr Stough for only a single study The company said he was hired in 1964 to test an experimental drug that was never placed on the market and has not been used since One company official who asked not to be identified remarked How he [Dr. Stough] operated, how he had his machinery set up-Ihey didn'teven know a1t the prisons." To ship blood products in interstate commerce requires a license from the Di vision of Biologics Standards and when a manufacturer obtains one he must face and continue to face regular inspections DOCTOR NOT LICENSED Dr Stough does not have and never has had a license from the division Under the so called short supply provision of the agency s regulations a licensed company can pick up the scarce plasma at Dr Stough s door and ship it to its laboratories without violation Serious things can happen if the slightest thing goes wrong once the plasma reaches the hands of a licensed company. Nothing can happen, so far as the standards division is concerned, if everything goes wrong before that time. Dr. Stough incurred no Federal disfavor for the hepatitis epidemic in three states because the disease apparently was routinely killed out in the manufac- turing process that turned his plasma into gamma globulin. "The conclusion that we came to was that the quality of the product was not affected," recalled Dr. Roderick Murray, the division's director, "and therefore we had no backing to tell them (the companies) not to use plasma that came from Stough." INVITATION REJECTED This is felt so keenly at the division that Dr John Ashworth, then an agency official refused an invitation from Dr Johnson just to go and look at a plasma pheresis operation. "He said that his appearance at the plasmapheresis center would not be con- sistent with the policy of D B S Dr Johnson wrote because the policy did not include "direct supervision or policing of the actual procedures." "Any time that we've attempted to write into the regulations elements that are designed to protect the donor," Dr. Murray said, "this has been disallowed be- cause there's no statutory authority." What about the communicable disease center, which traced the hepatitis epi- demic directly to Dr. Stough's programs? That agency, a spokesman said, is only a consultant to the states Enforcement is up to the state authorities The question thus is put to the Alabama public health officer Dr Myers He answers that the State Health Department has "no specific jurisdiction in the prisons' PAGENO="0293" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5765 APPENDIX VI U.S. SENATE, SELECT COMMITTEE ON SMALL BUSINESS, Wci~shington, D.C., JnIy 7, 1969. Hon. GAYLORD NELSON, U.S. Senate, WasMsrgton, D.C. DxAR GAYLORD: I am writing as the ranking Minority Member of the Monopoly Subcommittee and at the request of the other Minority M~embers. I understand that the staff of the Monopoly Subcotmniittee has submitted a list of questions to Dr. A. Dale Console regarding his testimony submitted to your Subcommittee on Thursday, March 13, 1969. These questions and their answers, I understand, are to be included in the record. Because Dr. Console was unable to attend the hearing due to illness, the Sub- committee Members and their staffs did not have an opportunity to question him in person. The Minority Senators would like to request at this time the oppor- tunity to submit certain questions to be included, with Dr. Console's answers to them, in the hearing record, along with those of the Majority staff. I have reviewed Dr. Console's March statement, together with his prior testi- mony before the Kefauver Committee in 1960 and his answers to the questions submitted by the Subcommittee staff and feel that the following questions would be appropriate. 1. In your opening statement before the Kefauver hearings, Wednesday, April 13, 1960, you stated: "Since I destroyed the records in my private file when I resigned from the industry, I can offer nothing which can construed as proof. I can offer a distillate of my experience and the opinions I have formed as a result of the experience." (Hearings Before the Subcommittee on Antitrust and Monopoly of the Committee on the Judiciary, U.S. Senate, Eighty-Sixth Congress. Second Session, p. 10368.) In your opening statement submitted to the Subcom- mittee on Monopoly of the Sbnate Select Committee on Small Business, March 13, 1969, you wrote that "for almost ten years I `have devoted 90% of my time to the private practice of psychiatry and my contact with the so-called `white towers of medicine' has been minimal." You continued, "the primary justification for my appearance here derives from a degree of expertise I gained during six and one-half years I spent as Associate Medical Director and Medical Director of E. R. Squibb & Sons." Could you outline what contact you have had with the drug industry since the time you left Squibb twelve years ago that `has enabled you to keep your information and conclusions current and updated, especially in light of the statements just quoted. 2. On page 8 of your question and answer pages you were asked a question on the "role of testimonials in the advertising and promotion of drugs with respect to efficacy and safety" `by the Subcommittee staff. In answering this question you referred to examples from your experiences which occurred while you were at Squibb. You also requested part of your testimony before the Kefauver hearings in 1960 be included in the record as part of your answer. Would you have any more recent information that would be relevant to this question. 3. While at Squi'bb did you have a great deal of contact with Medical Directors from other companies? Further, since) the time you left Squibb twelve years ago have y'ou had any subsequent contact with Medical Directors of either Squibb or any other company. If so, how extensive has this been? 4. In response to a question by the Subcommittee staff on overseas promotion, advertising and marketing of drugs, you referred almost exclusively to expe- riences you had while you were at Squibb. Over the past twelve years with the exception of the Marsalid example you found in Mexico "about four years ago," have you had any contact with the drug industry so as to be aware of `the policies it is currently pursuing in overseas sales? And, if so, how extensive has this been? 5. In answering a questi'on by the Subcommittee staff referring to estimates by Dr. Frederick Wolff and Dr. George Baehr of New York on drug expenditures you stated: "I know of no way to make an accurate estimate of the percentage of drugs that patients pay for unnecessarily." You then went on to estimate that 50% of prescription drugs are worthless. Could you give us some idea of the basis which supports your belief that 50% `of prescription drugs are worthless. 6~ Throughout your testimony and the answers you submitted to the Sub- committee staff, you have made numerous references to your experiences at Squibb. In reading through the testimony, however, one frequently has the PAGENO="0294" 5766 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY impression that you are speaking of the drug industry as a whole. Could you clarify for us whether you intended to discuss the entire industry, or whether you intended your testimony to refer to Squibb. I would appreciate your submitting the above questions to Dr. Console and inserting his answers, together with these questions, at the proper place in the record. With best wishes, Sincerely, JACOB K. JAVIT5. U.S. SENATE, SELECT COMMITTEE ON SMALL BUSINESS, Washington, D.C., July 17, 1969'. Hon. JACOB K. JAVITS, U.S. Senate, Washington, D.C. DEAR SENATOR JAVIT5: in accordance with your request, I am submitting your questions to Dr. Console. Since Dr. Console's original statement and his answers to my questions have already been printed in Part 11, of our hearings, I have asked the Committee staff to include your questions and Dr. Console's answers-when received-nt the appropriate place in the printed record of the `hearings. The questions sent to Dr. Console were submitted by me as Ohairman of the Subcommittee in accordance with my opening statement of March 13, at which time I said: "The questions I had planned to ask will be sent to Dr. Console, and his answers will be placed in the record immediately following his statement." (P. 4477, Vol. II of our hearings..) Naturally, as is always the Subcommittee's policy, had any other member or inember~ indicated an interest in submitting questions, I would have been more than happy to accommodate them and this material would have been placed in the record with Dr. Console's statement, which, incidentally, was available to all the Subconunittee members in advance of his scheduled appearance. Sincerely, GAYLORD NELSON, Chairman, Monopoly Subcommittee. U.S. SENATE, SELECT COMMITTEE ON SMALL BUSINESS, Washington, D.C., July 17, 1969. Dr. DALE CONSOLE, Princeton, N.J. DEAR Da. CONSOLE: I am attaching a letter which I received from, Senator Javits, in which he asked that certain questions be submitted to you for your consideration. Senator Javits' questions and your answers will be inserted in the printed record of our hearings at an appropriate place. Sincerely, GAYLORD NELSON, Chairman, Monopoly Suboo'rnmSttee. A. DALE CONSOLE, M.D., Princeton, N.J., July .20, 1969. Hon. GAYLORD NELSON, U.S. Senate, Washington, D.C. DEAR SENATOR NELSON: I enclose my answers to Senator Javits' question. I agree that the Minority Senators have an equal right to submit questions and that the answers to those questions should be made a part of the record. Sincerely, 4. DALE CONSOLE, M.D. The major thrust Of most of Senator Javits' questions appears to be based on the assumption that the practises I observed 12 years ago are no longer pertinent and that the industry has changed. This is a valid point and I believe it deserves serious consideration. In my opinion, however, the conclusion that the drug PAGENO="0295" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5767 industry has changed must be based on the assumption that the basic nature of man has changed in 12 years. I know of no evidence that supports such an assump- tion. When I went into the drug industry a door opened and exposed drug industry practices that are unknown to any one who is not in, or has not been in the industry. Similarly, when I left the industry, that door closed and I have had only one reliable guide that permits me to draw conclusions about changes in the drug industry. That guide is the advertising and promotion practices that always have been and still are exposed to public view. The manner in which a drug firm advertises and promotes its products is a reliable index of the firm's philosophy. Since I have seen no change in these practises since I left the industry I find little reason to conclude that other practises have changed. Yet it is possible that improvements have occurred and that I have been unaware of that improvement. It is equally possible that the situation has deteriorated and I have no knowledge of that either. The practises I have de- scribed and criticized arise out of a basic conflict between the profit incentive that motivates any big business and the ethical considerations of medical prac- tice. The practises derive from human frailty which always has been, and still is with us. Quoting from the individual views of Senator Wiley in the Kefauver Subcom- mittee report to the parent Judiciary Committee he said, "Still there is often a tendency, both on the part of individuals and of business, to become preoccupied with their own point of view and their own narrow outlook in a manner which is contrary to the best public interest". I find no reason to believe that this funda- mental observation on the nature of man and of business has changed in the past 12 years:. Poor research, poor designs in clinical studies, the use of testimonials, and shabby methods of advertising and promoting drugs derive from this funda- mental conflict and from the nature of man. The few improvements that have occurred are those that were forced by the 1962 legislation. The drug industry opposed those changes and still uses every trick in the book to evade the law. Answering Senator Javits' question specifically: 1. Since I left the industry 12 years ago I have had no direct contact with the industry. My only reliable guide has been a continuing study of advertising and promotion practices. Drug industry practices are similar to an iceberg. Only a small portion of the practices are exposed. Until the portion that is exposed shows significant changes there is no good reason to conclude that the unexposed portion has changed. There has been no significant change for the better in the adver- tising and promotion practices over the past 20 years. If there has been any change it has been for the worse. 2. Even superficial perusal of advertising and promotion will demonstrate that the testimonial still plays the same significant role i~ played during the time I was in the industry. Examples can be found in the record of these hearings. Probably 90% or more of the letters the FDA has received relative to the pre- posed ban on fixed antibiotic combinations have been testimonials and I have yet to see evidence of any attempt to supply data which would satisfy the definition of efficacy contained in the Kefauver-Harris Amendments. Testimonials were used when I was in the industry. They were used in 1963 in the proposed ban on antiS biotic-cold preparations that I described in my testimony. They were used in 1968 and are still being used in 1969. 3. The last experience I had with the contr~idictory practices used in the do- mestic versus the overseas markets was the Marsalid episode I described. I be- lieve that we must strain reasoning more to couclude that those practices have changed than to conclude that they have not changed. I am quite certain that chloramphenicol is still marketed in other countries without adequate warnings. If I am wrong about this I would appreciate it if evidence that I am wrong is brought to my attention. 4. During the time I was in the industry I had close contact with physicians employed by other drug companies. Since I left I have maintained some contact with some of these physicians who became friends. Nevertheless I would not want to leave the impression that this contact has been significant or that it has fur- nished me with a pipe-line into the inner workings of the industry; it has not. 5. My 50% figure was an estimate and I called it such. I also said, "I know of no accurate way to arrive at such an estimate." My response was a reasonably informed guess and was made relative to higher percentages estimated by other witnesses. PAGENO="0296" 5768 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY After all I am still a practicing physician and I maintain contact with other physicians as well as with patients who have been treated by other physicians or are being treated for non-psychiatric problems. I am impressed by the fact that the American Psychiatric Association is considering a closer look at its own ad- vertising pages because drugs are being advertised and promoted for use in any and all human problems which are essentially normal stresses of every day living and in which no drug therapy is required or indicated. This is a recent decision which appeared not 12 years ago, but in the last issue of the Psychiatric News. Since drug advertising that does not sell drugs does not survive it follows that the advertising that does survive is effective. A study of advertising that has survived is amply evidence that many drugs are being abused. In addition it has been estimated that 40% of all drugs are fixed combinations. With very few ex- ceptions these are deplored by the majority of experts because they are considered irrational. To this estimate of about 40% we need only add 10% misuse of single drug entities. While my estimate Is a guess it is also my guess that it errs on the low side of the true incidence of irrational prescribing. I still believe that the "chances that a patient will get the right drug in the right amount at the right time is in the order of 50%". 6. It has never been my intention to single out and to criticize Squibb. The practices I have described are drug industry practices and apply across the board. As I have pointed out on several occasions, I was aware of practices used by other companies that Squibb would not stoop to. While I was one of the executives who played poker with Dr. Henry Welch, I know of no evidence that Squibb supported his very profitable business in selling reprints or that Squibb tried to introduce a sales slogan into a supposedly objective symposium on anti- biotics. rrhe conclusions I have drawn are based on an inside knowledge of the practices that were used, on a knowledge of why they existed and still exist, and on the information derived from `a continuing study of advertising and promotion practices. So long as the profit motive is considered a legitimate part of medical and para-medical practices and drugs are advertised and promoted by "Madison Ave. tricks" that sell soap, cigarettes and toothpaste we will continue to have abuse. Finally let me point out that my criticism of advertising and promotion prac- tices included exhibits of advertisements printed in March 1969. APPENDIX VII U.S. SENATE, SELECT COMMITTEE ON SMALL BusINEss, Washington, D.C., September 2, 1969. Mr. EDWARD D. MARTIN, National President, Student American Medical Association, Flossmoor, Ill. DEAR Mn. M~&RrIN: I am attaching a letter which I received from Senator Javits, in which he asked that certain questions be submitted to you for your consideration. Senator Javits' questions and your answers will be inserted in the printed record of our hearings at an appropriate place. Sincerely, GAYLORD NELSON, Chairman, Monopoly Subcommittee. U.S. SENATE, SELECT COMMITTEE ON SMALL BUSINESS, Washington, D.C., June 24, 1969. Hon. GAYLORD NELSON, U.S. Senate, Washington, D.C. DEAR GAYLORD: At the conclusion of the hearings on the promotional activities of drug manufacturers which were held before your Monopoly Subcommittee on June 19, 1969, you granted the Minority Counsel's request to submit written questions to the witnesses, specifically to Messrs Henry Brodkin, Charles Payton, Edward Martin and Richard Pohl. PAGENO="0297" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5769 I have reviewed the matter and feel that the following questions would be appropriate: 1. In your opinion have the drug manufacturers, in engaging in the type of promotional activities described in your testimony engaged in conduct which is actionable criminally or civilly, or which violates any existing government regulations. 2. Should drug manufacturers have the right to engage in promotional activity, except to the extent restricted by existing law? 3. If you believe that a drug manufacturer's right to engage in promotional activity should be restricted beyond the limitations presently imposed by existing law and regulations, please state the manner in which such activities should be limited and the objectives sought to be achieved by such limitations. 4. Who shiould have the responsibility for determining the precise nature and extent of such limitations and for their enforcement? 5. Would such further limitations on the right of a drug manufacturer to engage in promotional activity result in a significant reduction in health care costs, and if so, how much of a reduction? I would appreciate your submitting the above questions to each of the wit- nesses who testified on June 19, and inserting their answers, together with these questions at the proper place in the record. With best wishes, Sincerely, JACOB I(. JAVITS. STUDENT AMERICAN MEDICAL ASSOCIATION, PUBLISHERS or THE NEW PHYSICIAN, Flossmoor, Ill., September 23, 1969. Senator GAYLORD NELSON, Chairman, Monopoly Subcommittee, U.S. Senate, Washington, D.C. DEAR SENATOR NELSON: This letter is in response to your letter of September 2, 1969, in which you requested answers for questions submitted to us by Senator Javits. The following are our responses to the questions enclosed in your letter. 1. In your opinion have the drug manufacturers, in engaging in the type of promotional activities described in your testimony engaged in conduct which is actionable criminally or civilly, or which violates any existing government regulations. We are in no position to judge whether drug manufacturers have engaged in activities which violate existing government regulations or conduct which is actionable criminally or civilly. It was our feeling, however, that we must take a close look at the professional standards which the profession sets in accepting promotional material or advertising. It is the government and the courts that should give opinions as to the legal considerations and how they are adhered to, not medical students. 2. Should drug manufacturers have the right to engage in promotional activity, except to the extent restricted by existing law? The drug manufacturers should have the same rights and responsibilities to engage in promotional activity as does any industry related to the health of the people in the free enterprise system. If these privileges are adjudged to have been violated, as in the case of misleading advertising, price-fixing, etc., one would assume that extensions of the existing laws would be made by Congress, as with any other industry or business. 3. If you believe that a drug manufacturer's right to engage in promotional activity should be restricted beyond the limitations presently imposed by existing law and regulations, please state the manner in which such activities should be limited and the objectives sought to be achieved by such limitations. Our testimony clearly defined areas such as increased support for FDA investi- gative and regulatory work, the development of a drug compendium, etc. The ques- tion whether extensive promotional activity is detrimental to the American people should be answered by Congress in the form of legislation. It is our feel- ing that while we perceive inconsistencies in the present promotional efforts with the best interests of educating the profession, we, as medical students, are not able to propose limitations on the scope of promotional activity. We can say that PAGENO="0298" 5770 COMPETITIVE PROBLEMS IN THF~ DRUG INDUSTRY all advertising should be factual, not misleading, and should not confuse or seek to influence the physician about the actual efficacy or indications of a drug in a way not ~onsistent with objective research and clinical trials. Means to objectively evaluate these criteria are needed by the FDA and regulatory powers should be given to them so as to control misleading promotional activity. 4. Who should have the responsibility for determining the precise nature and e~vten,t of such limitations and for their enforcement? The Food and Drug Administration as directed by Congress. Professional or- ganizations, the drug industry, pharmacologists, etc., should have their profes- sional advice available on specific cases for the FDA, who should be responsible for evaluation and enforcement. One great weakness in the present system is that the FDA does not have the facilities and personnel available for evaluation, and must depend upon the drug industry. This should be changed by legislation and increased appropriations. 5. Would such further limitations on the right of a drug manufacturer to engage in promotional activity result in a signicant reduction in health care costs, and if so, how much of a reduction? This is a difficult question to answer. It is now clear that a great deal of money goes for promotion and advertising, and limitations theoretically could reduce this and divert savings to the consumer through decreased costs. How- ever, the greater questions of quality control, generic equivalency, competition to develop superior pharmaceuticals, the differences in price after retail mark-up, and the educational value of detail men to physicians make this a question that I, in good faith, cannot answer with a simplistic statement. The development of an objective drug compendium, available to all physicians, with wholesale prices included will do a great deal more to save the consumer money than arbitary limitations on the ai~iount of advertising dollars a company can spend. I hope this is a satisfactory response to your question. Thank you again for the opportunity for us to let our feelings on this very important issue be known. With best regards, I am, Very sincerely yours, EDWARD D. MARTIN, National President. PAGENO="0299" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5771 APPENDIX VIII REPORT ON A STUDY OF ADVERTISING AND THE AMERICAN PHYSICIAN PART I. THE ADVERTISERS' VIEwPoINT AN OPINION SURVEY MADE FOR THE AMERICAN MEDICAL ASSOCIATION BY BEN GAFFIN & ASSOCIATES, BOARD OF TRADE BUILDING, CHICAGO 4, ILLINoIs, MARCH 6, 1953 FOREWORD This report covers "The Advertisers' Viewpoint", the first part of the study of Advertising and the American Physician, made by Ben Gafiln and Associates for the American Medical Association. The second part, "The Physicians' View- point", will be submitted in April, 1953. In our proposal to Mr. Thomas Gardiner dated September 3, 1952, we defined the objectives of the study: "To uncover fundamental thinking of advertisers and physicians regarding basic advertising problems in general, and the peculiar problems of medical advertising in particular. This information will enable the American Medical Association, through its publication advertising, to better serve its readers and advertisers and by so doing, to increase its advertising revenue". This first report on "The Advertisers' Viewpoint" is based upon extensive informal personal interviews with 92 executives of 78 representatiVe companies. These companies, all interested in medical advertising, range from ethical drug manufacturers, medical equipment manufacturers, and their advertising agencies, to large consumer product manufacturers with only slight interest in medical fields, and large consumer-account advertising agencies. The firms rep- resented are located in New York and Chicago, and the areas in between. A list of the companies and the individuals interviewed is contained in the ap- pendix. These interviews were conducted between October 20th and December 12th, 1952. We would like to include in this foreword what is probably an unnecessary word of caution. In reading over this report one will find a number of unflat- tering comments regarding the AMA, the Councils and the AMA space-selling methods. In context, these critical comments were aimed at AMA policies and practices as interpreted or misinterpreted by the advertisers, and not at any Individuals in the AMA administration. A number of the advertisers~ as a matter of fact, stated specifically that the present AMA administratlye, editorial, and advertising department personnel were the most cooperative and the most efficient that they had ever dealt with at the AMA. Almost universally, too, the fact that they were being Invited to express their opinions and make suggestions in the survey was taken by the advertisers as an indication of the progressiveness and desire for improvement of advertiser relations of the current AMA personnel. This report is divided into three parts: recommendations based on what the advertisers told us, the advertisers' attitudes toward their own problems, and the advertisers' views of how the AMA can sell more space In its publications. CONTENTS Foreword. Recommendations. Findings.. Part I. Problems Facing the Medical~ Manufacturer: 1. Purpose of Advertising. 2. Budgeting. 3. Selection of Advertising Channels. 4. Deciding For or Against Council Acceptance. 6. Selection of Specific Journal Media. Part II. Advertisers' Views on How the AMA Can' Sell More Space. 1. The AMA Should Change Its Attitude Toward Advertisers. 2. The AMA Should. Improve the Councils and Sell the Value of the Seals. 3. The AMA Should Sell the Journal as a Medium. 4. The AMA Should Increase the Value of the Journal for It's Readers. (a) Suggestions for technical or production changes. (b) Editorial changes. (e), Changes in advertising policy. Appendix: Companies and Individuals Interviewed. PAGENO="0300" 5772 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY RECOMMENDATIONS The AMA has two strong motives for improving its relations with medical advertisers The AMA is the logical agency to exercise leadership in medical advertising This leadership will enable the AMA to raise the standards of medical advertising and to help convert the $130 million now being spent each year on medical advertising from an annoyance to the average physician into a constructive source v~f useful information on new developments in the fields of drug and other medical products. The second motive for improving its relations with medical advertisers is the possibility of increasing its advertising revenue by several million dollars per year. The following recommendations, based on the comments and suggestions of ad- vertisers, constitute a program for the AMA which will help to accomplish these objectives. These recommendations are offered with the realization that the official nature of JAMA and the overall policies of the AMA involved may m~1itate against their complete adoption as given 1 Improve AMA advertv~er relatwns The advertisers should be made to feel that the AMA personnel believe in the honesty of the advertisers and that they feel that medical advertising has a worthwhile place in AMA publications The advertisers in general feel that the AMA especially through the Coun ells distrusts them and views them as potential crooks who wiuld become ac tively unethical if not constantly watched This feeling of the advertisers may or may not have foundation. If it does, then the AMA should review' its attitude and attempt to correct it. In any case, whether true or not, this mutual feeling of distrust must be eliminated as the first step in improving AMA advertiser relations The basis for cooperation and foi a really successful sales campaign on the part of JAMA must rest on the establishment in the minds of the advertisers of a feeling of mutual respect and a belief in the willingness of the AMA to go half way in working out mutual understanding between the AMA and the advertisers The professional advel tisers must be made to feel that their advertising is wanted by the AMA At present they have the feeling that the AMA looks on space selling as a favor to the advertisers and merely as a source of some addi tional revenue which it can very well do without The fact that in 1q52 the AMA derived $3 1d7 000 from advertising most of it from JAMA is an indication of the importance of advertising to the AMA. The manufacturers of drugs and other medical supplies are no lo~nger in the position where they have to bow down to the AMA. They can circumvent direct control of their advertising and products by the AMA by refraining from submit- ting products to the Councils and by channeling their advertising and promo tion efforts through non AMA journals or through detailing and direct mail Ihe fact that since 1948 `~tdvertising space in Methcal Economics and Modern Medwine has increased 40% w hue AMA space sold has decreased 3% during the same period is proof that `idvertisers are tending more toward non AMA media The fact that the AMA gets as much advertising income as it does the major ity of advertisers state is because of the unique position of JAMA and in spite of the feeling toward the AMA and the AMA s relatively ineffective spacesell Ing methods. The report will show that a number of advertisers question the need for get- ting Council Acceptance for the ordinary product, and question whether or not JAMA is well-read by physicians. It seems likely that more than a little of this feeling is an attempt to rationalize the advertisers' resentment at AMA "aloofness." The industry expresses a desire for working with the AMA in maintaining high standards in the medical field rathei than in working independently of it It feels however that the AMA should give some conciete evidence of willing ness to cooperate on the other side. Good advertiser relations can be built if the &1~IA will make a systematic ef fort thoiugh editorials through speeches and through personal contact with manufacturers and their trade associations to explain its point of view to the industry, and to attempt to understand the industry's problems and point of view. PAGENO="0301" COMPETITIVE PROBLEMS IN TIlE DRUG INDUSTRY 5773 2. Set up a joint AMA-advertiser board One cd the best ways for the AMA to learn the advertisers' problems and ex- plain its own problems to the advertisers would be through the establishment of a joint AMA-industry board, the purpose of which would be to work out mutu- ally satisfactory solutions to various problems. This could be done through one or more of the already existing trade associations, such as the American Pharmaceutical Manufacturers' Association and the American Drug Manufa~- turers' Association. Such an offer of cooperation on the part of the AMA would indicate positively to the industry the desire of the AMA for greater mutual understanding. 3. Aim at higher advertising standards for AMA publications The majority of medical advertisers definitely prefer the AMA to accept for advertising in its publications only products of professional interest presented In a professional way. They furthermore express the belief that if the AMA would adopt this policy, additional revenue from increased medical accounts would more than make up forthe loss of the non-medical income. It would probably be unwise to make this change suddenly. A gradual change, however, could be achieved by concentrating selling effort exclusively on pro- fessional advertisers, and by gradually tightening the restrictions on the non- medical product copy. As a first step, the advertisers almost universally suggest that the advertising of non-COuncil products be made to conform to the "honesty in advertising" rules to which the Council products are subject. They would apply this restriction particularly to advertising by cigarette manufacturers who make pseudo-scien- tific claims in their copy. 4. E~rpand direct-mail promotion The advertisers, practically without exception, agree that if they were pre- sented with more evidence of the value of AMA space, if they were shown how they could increase their results proportionately more by devoting their budgets to AMA publication space rather than to non-AMA space, they would increase their space purchases in AMA publications. The direct-mail promotion program should be carefully set up to tie in with the personal sales calls of the space representatives. It should be designed so as to cover continuously the various areas which need to be covered. It should allow for the continuous turnover of personnel on the mailing list, so that new people are informed of points which they should know and that old hands are periodically reminded of these points. Throughout, a systematic effort should be made to build up the prestige of the AMA and to increase the good-will of the recipient toward the AMA. The direct-mail pieces would fall roughly, according to purpose, into three classes: public information, which would aim at giving Information on how specific AMA publications serve the medical industry; service pieces, which would aim at giving the manufacturer helpful statistical compilations, informa- tion on how to write more effective ads, survey results on attitudes of physicians, etc.; and public relations pieces, aiming at creating favorable attitudes toward the AMA and its publications, and practical esteem for Council Acceptance, reprints of ads, editorials and articles about how the AMA is trying to improve the attitudes of physicians toward using medical advertising, etc. 5. Improve personal selling The advertisers universally comment that the AMA is doing a poor job of promoting and selling publication space. All but the larger accounts state the space representatives call on them infrequently, that their presentations are non-existent or poor, and that the representatives are poorly informed on AMA policy. The advertisers say that if more selling effort is made by the AMA, the AMA will sell more space. From a purely business point of view, it would seem that the possibility of increasing advertising revenue by several million dollars per year would justify increasing the expenditures made for promotion and selling of space. The first step, it appears to us, would be the establishment of a system of remuneration of all A~MA personnel connected with sales. which reflects directly their productiveness. This would enable the AMA to get and hold ton caliber personnel who would do the kind of promotion and selling job which the AMA publications as leaders In the field, deserve. Secondly, establishing a centralized PAGENO="0302" 5774 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY systematic method for prospecting and contacting clients. And thirdly, develop- ing good presentation materials, and training representatives in the proper use of these materials. 6. Standardize Council procedures insofar as possible The subject of Council rulings is a difficult one for many of the advertisers. if the objectives of the Councils could be re-evaluated and logically justified in the light of current conditions, and if standardized procedures could be worked out so that manufacturers could know what to expect from the Councils in advance, much of the present apathy and ill-feeling toward Council Acceptance could probably be eliminated. The manufacturer frequently has a large investment tied up in a new product. He feels that the Councils do not understand nor appreciate his problems and his need for prompt action. He also feels that the slowness in publishing the notice of acceptance in the Journal is a result of the AMA's lack of understand- ing and interest in his problem. 7. Review the Council stand on trade names and micetures The chief and almost universal criticism of the Council is on its stand on the use of trade names in advertising, and on compounds and mixtures. Even the companies most favorably disposed toward the AMA feel that on these two points the AMA is often arbitrary and unrealistic. This feeling is intensified by the admission into JAMA of general products which are not subject to similar restrictions. If changes in circumstances since the adoption of these two rules are such as to enable the AMA to reconsider and modify them on a professional basis, con- siderable additional advertising revenue would accrue to the AMA with little or no additional effort. 8. Sell Council acceptance to the physician The advertisers place little value on the Council Seal for the ordinary product because they feel that the average physician does not understand it, and does not usually value it. The AMA could improve its position' both with its members and with the advertisers by setting up a definite program to educate the physician on the meaning and value of the Council Seal. As part of this program, it might be worthwhile to include as one of the. privileges of membership in the AMA a free copy of the "New and Non-Official Remedies". 9. Publish an mdccv of advertisers Include in a prominent spot in the AMA publications an "Index of Adver- tisers", and differentiate in it between Council Accepted and non-Council ad- vertisements. Indicate there, for the physician, a brief outline of what stand- ards the accepted products have met. Include along with the Index of Advertisers a "reader request for Information" check-list. This would tend to eliminate the measurability-by-coupon-return advantage which direct mail and detailing possess in the eyes of a great many of the advertisers. It would also help physicians to get more direct informa- tion on new product developments from reading JAMA advertisements. 10. Review policies on inserts Much of the criticism of the Pfizer insert in JAMA might be eliminated by more clearly labeling the editorial matter as an advertisement. Many of the advertisers who resent~ the Pfizer insert state that they feel that in the editorial matter, the company has usurped the editorial funcion of the AMA. Unmis- takable labelling of it as advertising might help to eliminate sonic of the criti- cismn The AMA would also Improve its advertiser relations If it would clearly define its policy on inserts, and make this information available to all the advertisers through a release. This would do much to eliminate the feeling (unwarranted though it may be) that the AMA plays favorites with certain advertisers. 11. Make AMA `publications as attractive as possible to the readers The more physicians read the AMA publications, and the more they value them, the greater will be the value which the advertisers attach to them. PAGENO="0303" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5775 In general, JAMA is rated very highly by the advertisers. There is some feeling expressed, however, that JAMA is frequently inclined to be over the heads of the majority of the readers. There are several requests for a clearer definition of the function of JAMA. The feeling is also expressed that JAMA, in attempting to be so complete as to satisfy the one or two percent of the readers at the high extreme, tends to overawe the great majority of readers, who are interested in greater simplicity and less completeness. Most of the 135,000 AMA members, several advertisers point out, ~vil1 never take any refresher courses, and the AMA Journal should do its best to take their place. FINDINGS In the "Recommendations", we have listed specific methods whereby the AMA can improve medical advertising and increase its advertising revenue. The majority of these recommendations were made explicitly by the manufacturer and advertising agency personnel with whom we talked. It has been estimated that medical advertisers spend around $130 million a year for advertising and promotion: $100 million for detailing, $221/2 million for direct mail, $7'/2 million for journal advertising. In 1952, the AMA re- ceived $3,137,000 of this, of which $3,009,000 was for space In the Journal of the AMA. The AMA received an additional $270,000 for convention exhibit.~. The dollar increase over previous years is the result of rate increases, not of increases in the amount of space sold. This has decreased slightly since 1948, during the period when Modern Medicine and Medical Economics have in- creased their amount of space sold by about 40%. The total amnount of expenditures for advertising and promotion of medical products is very large. Much of it, as we shall see in our physician survey on advertising, is wasted. The AMA has a serious responsibility to the medical profession to raise the level of medical advertising, and to make It as useful as possible to physicians. Especially today, with so many new developments in the field of medicine it is extremely difficult for the average physician to keep current, Of the 150,000 physicians who are practicing In the U.S., only a very small propor- tion get any additional formal medical training after completing their intern- ship. Keeping them up on new developments, insofar as it is done, is accom- plished not only through professional journals and meetings, but in probably a larger degree than the medical profession has ever admitted to itself, through the efforts and expenditures of the advertisers-through detailing, direct mail, and journal advertising. The advertisers, as we shall see, have the feeling that physicians, and even more so the AMA as an organization, view them as greedy, selfish promoters who are interested in exploiting the medical profession and the ignorant gen- eral public. Unquestionably, there are a small number of fly-by-night operators who would take every advantage possible, if not controlled. The reputable, large drug and equipment manufacturers, however, who ac- count for the great majority of sales, have long ago realized that, from the point of view of self-interest, If for no other reason, they must maintain high standards and go in for a high degree of self-policing. For the AMA to raise the standards and effectiveness, of medical advertising, there must be mutual understanding and respect between itself and the medical suppliers. If the AMA fails to be more understanding of the real problems of the medical suppliers, if the Council requirements are unnecessarily exacting and the administrative processes unnecessarily involved and time-consuming, then the medical manufacturers will circumvent direct control by the AMA. This is not a vague or remote possibility. It is happening today to an in- creasingly large degree. The only direct control which the AMA can exercise on the medical manu- facturers Is through the Councils, and the acceptance or rejection of advertis- ing In the AMA publications. Medical manufacturers do not have to work through the AMA. Failure to get Council Acceptance on products will not hurt sales in most Instances. Advertising of their products is eagerly and aggres- sively sought by a large number of medical publications which have wide cir- culation and readership among physicians, and who do not require Council Acceptance. The AMA is the logical organization to maintain high standards, both in medi- cal products and in medical advertising. The manufacturers would rather that PAGENO="0304" 5776 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY it be the one to do. so. But the AMA must make an effort to maintain this leadership. The first part of t-his report will present, from the advertisers' point of view, the problems facing the manufacturer. In it we will attempt to give the inanu- facturers' point of view on the promotion of his products. The second part of the report will give the advertisers' views on how the AMA can strengthen its leadership in maintaining high standards in medical products, and can raise and maintain higher standards in medical advertising, and increase its usefulness to the physician. PART I. PROBLEMS FACING THE MEDICAL MANUFACTURER The medical manufacturer, like any business man in the U.S. today, operates under what is called the "free enterprise system." As an individual, he is in the business of manufacturing medical supplies to gain financial profit and to gain the personal satisfaction which comes from doing a good job. He is usually satisfied with an overall profit from his operations. Quite often, he will manufacture one or more items knowingly at a loss as a "service", or for prestige, or for some other reason which will in the long run work for the long-term profitability of his operations. He is generally much more interested in long-term than in short-term profit. I-Ie realizes that shoddy products on which he might niake an excessive profit (luring the short time it would take for his buyers to catch on, would hurt him in the long run much more than it would help him. As a result, he conscien- tiously tries to turn out only products of unquestionable value. Because he is interested in the long term, he plows back a good proportion of his profits each year for research and for the development of new products. After he has developed and started manufacturing a new product, he must find someone who will buy it. In the medical field, he is faced with the unique problem of having his products bought to a large extent by people who do not make the decision themselves on buying, but have this decision usually made for them by their physicians or druggists. Accordingly, the reputable medical manufacturer puts the emphasis in his efforts to make known and "sell" his product, not on the ultimate consumer, but on the druggist, and to a greater degree, the physician. 1. Purpose of advertising The medical manufacturer, then, is faced with the problem of informing the i)hysician that there is in existence such a firm as his own, that there Is in exist- ence such a product as he has to offer, that his product is useful for certain pur- poses, and that his product is better, or at least as good, as any product offered for the same purpose by any other firm. Many advertisers have never formally thought this through. Many of them operate only on precedents, and do what they do merely because all their com- petitors do it. Some of them are entirely selfish in their viewpoint, some are much more far-sighted. In our interviews with advertisers, one of the topics on which we tried to get them to express an opinion was on what they considered to be the purpose of their advertising. An eastern advertising agency man offered the following: "The sole end use of advertising is the promotion and sale of products, and the establishment of the good name of the manufacturer before the audience he seeks to impress." An X-ray manufacturer offered this: "The purpose of advertising is to make the selling job easier for the sales- man, to keep our name in front of the doctor, to do the selling job on the doctor on an institutional basis. We must put out excellent equipment and service continuously, because our good name is very important. We are consciously aiming our advertising at this point." A small east-coast chemical manufacturer put it this way: "The purpose of advertising is two-fold-educating the physician and selling our drugs." The head of one of the large ethical drug manufacturers expressed it as follows: . "The doctor has problems in the form of patients. Our job is to assist him In the solution of these problems by providing useful medicine which he can use. In order to get him to use our product, we must tell him what it is, what it will do, where and how it is to be used and how it is available." PAGENO="0305" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5777 A middle-western ad agency president expressed it more specifically In terms of the Journal of-the AMA: "The pharmaceutical world never pays enough attention to one fact: when physicians leave school and go into practice, only a small percentage ever go back for refre.sher courses; only a small percentage follow all the advances in the medical journals. Much information must come from advertising. Ad- vertising in the JAMA is screened and sound, and physicians can place con- fidence in what is stated there." The AMA can help considerably both the profession and the advertiser by helping the advertiser understand more clearly the purpose of his advertising. The level of medical advertising would be raised considerably if the ad- vertisers and their agencies viewed their advertising as a mutual service to the medical profession and to themselves. 2. Budgeting Most decisions about advertising are based on precedents and hunch. This applies to medical advertising as well as general advertising. The large majority of advertisers told us that they determined their adver- tising budgets. as a percentage of anticipated sales, which practically speaking means on past sales. Accordingly, when sales are high, advertising budgets are high. When sales fall off, and advertising is needed most, advertising budgets are cut. Although this is patently lacking in rationality, it is the accepted practice In advertising and will probably continue to be so. An X-ray manufacturer's advertising manager told us this: "About the budget-we get the total amount of money to be spent from a per- centage of sales. Of the total appropriation, media of all kinds (journals, etc.) get about 25%, conventions get about 40%, and direct mail, sales litera- ture and other miscellaneous activities get the rest." A medical equipment manufacturer states: "About the budget-we try to stay between 5% and 10% of gross sales. We work with our advertising agency in setting up a budget for the following year. They do the art work, and we do the copy. To us, advertising budget means only magazine advertising and conventions. We do not include direct mail as part of the advertising budget. As far as proportions into which the budget is split; conventions come first and then journals. Of the journals, first comes the Bone and Joint book, then SAMA. We wouldn't miss these. They are important because they are the specialized books. They are the first channels for new information." A drug firm which publishes a full-line catalog told us this: "On the older products, we use a percentage of sales in setting up the budget. On the new products, we try to determine what we will do with it the first year, then estimate how much we would like to invest in it. Mostly, we use sampling and direct mail because in these we can see our results. For example, on Vita- min B-12, we made two mailings, got a 12% and a 15% response respectively. This gave us leads to follow up." Another drug manufacturer said: "First, we get our advertising appropriation for the operating period. This is determined in part as a percentage of sales. We then decide the job to be done, and determine what we can spend on this job. We then split up the appropriation between the various methods. The best combination is then used. We need all of the advertising methods. About all I can say on that score Is that we split up our appropriation according to our best judgment. We don't have any fixed method. The importance of the various means changes from time to time." A large ethical drug manufacturer who uses the "task" method of figuring budget put It this way: "Our budget is not based on sales, our proposals are based on the job to be done, on the need for selling the product. We look at each product individually. Each product stands on a budget of its own. We consider what is needed to carry this product for the next fiscal year. We use one advertising means to accom- plish one objective. Certain products have characteristics which make them more susceptible to specialty advertising. Everything goes back to exactly what is needed to advertise each individual product. We then dovetail all media t- gether for the good of an individual product. "To take a specific case, let's take JAMA. We set a schedule for so many pages among the products that are Council-Accepted. This is based on the cost and frequency of the ads. It is not much of a problem with JAMA. We have 81-280 0 - 69 - pt. 14 - 20 PAGENO="0306" 5778 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY only certain products which are Council-Accepted which we want to advertise In JAMA. There are some products on which we can do a better selling job with- out suffering the restrictions on claims by the Council. There are times when. regulations are so restrictive that a better job can be done without Council Acceptance." Of the firms we interviewed, the large majority got up their budgets as a percentage of past sales, modified on the basis of hunch. A few used the "task" method, whereby they determined what they wanted to accomplish In the way of sales, and then guessed how large the appropriations would need to be to ac- complish these objectives. If the AMA, through research, could arrive at some more scientific method of budget determination, it would render a real service to its advertisers. It might also be well to point out that using the relatively flexible methods that they do in determining their budgets, advertisers are very open to selling on the part of JAMA. If convinced of the value to them of JAMA or special journal spaced compared to other media, advertisers can fairly easily change their minds-and their budgets. 3. Selection of advertising channels A medical advertiser has three main methods whereby he can tell his story to the physician: through detail men, through direct mail, and through journal advertising. Each of these methods has advantages and disadvantages which vary in weight, depending: on the type of product to be advertised; the age, size and reputation of the advertisers; and the period of development of the product at the particular time. Each method supplements the other and usually the manufacturer ties them together as much as seems effective. There is no hard and fast rule in media selection and the emphasis put upon each of these three methods varies considerably with the individual advertiser. Because of this fact, JAMA's potential sources of advertising revenue include not only advertising now going to other journals, but also what is now going into direct mail, and possibly even to some extent, what is now going into detailing. For JAMA to develop fully these potential markets for its space, it must not only do considerably more and better selling and promotion of its wares, but it must also develop more fully the usefulness of journal advertising in general, and Its own in particular. It must work both with the advertiser and with the physician-reader to accomplish this. It must help the advertiser develop the~type of journal ads which are of maximum usefulness and interest to the physician. And it must change the physicians' attitude toward advertising, and help him to learn how to get the most benefits from advertising. The following comments, selected from Interviews with advertisers, are typical of the attitudes of advertisers toward their problem of advertising-channel se- lection. As one of the large medical ad agency people expressed it: "It Is generally agreed that the order of effectiveness is, first, detailing; second, direct mail; third, journal advertising. The emphasis, however, varies from one advertiser to another." A physician connected with a large ethical drug manufacturer stated: "The three basic media complement each other. A detail man does more than a journal ad-provided he can see the doctor. If he can't, a journal ad is ob- viously more effective. Similarly with direct mail." The double problem of first deciding how much emphasis is to be put on each of the three basic advertising channels, and then secondly, how much of the journal advertising is to be run in a specific journal was expressed by the head of an ethical drug manufacturing firm as follows: "We first decide whether to use direct mail or journal ads, and then we con- sider which jourinal Is best for the particular product under consideration." The idea of the different contributions which are made in varying degrees by the different journals was added by a medical supply manufacturer: "Because we manufacture medical supplies, which are also advertised directly to the consumer, we consider the purpose of our advertising to be institutional, both to the medical profession and the consumer. We want to keep our name be- fore the audience in JAMA, and we push our special products in the other jour- nals. "JAMA has the best coverage, but we spread out into the other journals, par- ticularly because of our specialty products, like baby products. JAMA is the best for CP's. We use other journals for pediatricians, etc Other journals are useful because they help keep our products before the public. PAGENO="0307" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5779 "Direct mall is also good for us, and we use it a lot." A medical ad agency executive gave this statement on media: "Media are selected on the basis of the objectives sought in the promotion, of a product. JAMA is good to keep the name of the House before the physician- public, and to advertise Council-Accepted products, particularly new or special- ized ones. We use other journals particularly for specialty products or for proprietary drugs. Direct mail is used to push specific products." A manufacturer of industrial chemicals and pharmaceuticals outlined his formula: "For a new product that requires presentation to the medical profession, a com- pany should get Council Acceptance if possible. It should then run an insert or series of inserts in JAMA announcing the product. But it won't get the desired interest or distribution unless it also announces it to wholesalers and hospitals, and the JAMA ads should therefore be tied in with detailing. The next step should be a follow-up by direct mail, and by ads In the specialty journals if ap- propriate. Direct mail Is the costliest of the three media, but it is the most selective." The same man said elsewhere: "There has been a lot of money spent on pharmaceuticals recently, but this year there has been a falling off. I guess all advertising budgets will be cut next year. "Our policy, in a depression, would be to cut down on detailing, direct mail, and ads in specialty journals. We would concentrate on ads in JAMA and other top-circulation journals." As we mentioned earlier, the amount of emphasis put on the ~rarious adver- tising channels varies considerably from company to company, and in the same company from product to product. One of the main reasons advanced by advertisers for preferring detailing and direct mail over journal advertising is that In the first two the advertiser has a measure (if crude) of its effectiveness, through inquiries and returns: "Pharmaceutical houses prefer detailing to all other advertising and selling methods. They know how much they are paying out and how much they are getting in return. This i.s also true of direct mail, to a great extent-you have some check on its profitability. Journal advertising is the least attractive to them because its profitability is impossible to check. It would be helpful, in this connection if advertisers could be Informed of the extent to which doctors read JAMA." The president of an X-ray equipment company stated: "Our journal advertising is purely prestige and institutional advertising. Direct mail is used for specific products. However, we intend to get prospects from journal ads also, because most ads have coupons attached. Both means of advertising are important. We would not have one without the other." A large ethical drug manufacturer mentioned that they split their advertising budget among the three channels: "Generally we advertise in JAMA for institutional purposes and other non- specialty journals for broad coverage. The journals get about 20 percent of our advertising and promotion budget, direct mail gets about 30 percent and detailing about 50 percent." Another ethical drug manufacturer, in summarizing their position on media selection, said: "This depends on many factors. With a new product, direct mail is usually preferable; with an established one, journal advertising. However, In the case of a new product that has received Council Acceptance, JAMA advertising is a `must'." The advertising manager of a chemical and pharmaceutical house emphasizes the interdependence of the various media: "We look on JAMA advertising as a means for building our reputation and for activating our direct mail at low cost. Direct mail sells our products, but it has to follow journal advertising and would be useless without it. We spend comparatively little on detailing at present, since we are a new firm with a small sales staff." This same idea wan expressed by a drug manufacturer, most of whose products are not eligible for Council Acceptance: "Direct mail and journal advertising complement each other. We do not use one for one purpose and the other for another." A consultant stated: "Direct mail is the most effective medium for a new product. You can aim more effectively at the specific group you want to read; for example, specialists PAGENO="0308" 5780 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY or regional groups Also the response for samples is better from direct mail than from journal advertising After the product has gained acceptance how ever institutional advertising in the journals acts as a n~essary reminder To summarize journal advertising seems to be used most widely for re nunder advertising direct mail to introduce a new product Usually the two of them are tied together Detailing is generally considered the most effective of the three and is used both for new products and for reminding If JAMA would set up a reader service where the physician could return a postcard or list to the AMA on which he had checked off literature or samples of products advertised in JAMA which he would like to get JAMA would be rendering a very useful service both to the reader and to the advertiser. The inquiries could then be turned over to the advertisers for follow-up. This service would also do much to counteract the feeling of the advertiser that direct mail and detailing are more effective because their results can be measured 4. Deciding For o~r Against Applying For Council Acceptance One of the problems which plays a large part in determining which 3ournals in which to advertise is the question of Council Acceptance If the product i~ by its very nature one which is ineligible for acceptance by the Council there is no problem-the product will not be submitted to the Council and only non AMA publications can be used for advertising If the product m of such a nature that it has a possibility of being accepted then the manufacturer must decide whether or not the disadvantage of having his advertising claims reviewed and approved by the Council outweighs the advantage of having the product carry the Seal of Acceptance. His decision will depend on how great he considers the disadvantage to be in the particular case as against how valuable in the particular case having the Seal will be The value of the Seal will vary in his eyes in proportion to the value which he thinks the physicians place upon the Seal in connection with this specific product In the case of an unknown firm whose name is no recommendation to the physician its product will be more able to compete with similar products of well known firms if it has the Seal Or even in the case of well known firms if the product is one which is dangerous or unknown and the physician may be fearful of using the product then the Seal enables the physician to pass respon sibility for the results back on the Association and in that case may attach im portance to the Seal. In the case of well-tried and well-known products put out by firms whose names are highly respected the physician will usually evince no interest in whether or not it is accepted and therefore the advertiser will also attach little or no importance to getting the Seal In this case it is highly likely that the bother of submitting the product and the requirement of Inniting advertising claims to those acceptable to the Council will outweigh whatever slight and questionable value there might be to having the Seal The only real advantage the Seal would have in this case would be that it would enable the advertiser to run his copy in AMA publications There is as we shall see later considerable resentment on the part of ad vertisers toward the Councils especially the Council on Pharmacy and Chem istry The two main sources of ill will are the rules of the Council on trade names and its refusal to accept certain compounds and mixtures even though they are widely used and accepted by the medical profession, and even though the firm putting them out has top standing. The manufacturers in general are favorable toward the idea of having Coun cils They feel that since its founding in 1905 the Council on Pharmacy and Chemistry has served a ~ aluable purpose especially in the years prioi to the tightening up of federal legislation regaiding food and drug standards Practically all of the manufacturers feel that the Council still serves a worth while purpose in maintaining high standards both in products and in advertising Much of its influence however they feel is being lost because of what they con sider unieasonableness in its stand on trade namhes and mixtures and compounds About h'~lf the advertiseis we talked to stated that they considered Council Acceptance as being useful in selling `md stated that they would get the Seal if it wasn't too much trouble." About a quarter said they considered it of value only in the case of new or controversial di ugs or in the case of an unknown firm On established products they would not bother to get it Another quarter stated PAGENO="0309" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5781 that they practically never bothered getting Council Acceptance, except on one or two products so they could carry institutional advertising in AMA publications. A small drug manufacturer stated: "Council Acceptance has value in the case of new or toxic drugs, and with people in teaching institutions. Council Acceptance is easier to get when re- searchers in medical schools have tested it extensively. We always send them our stuff if we want Council Acceptance on it. On routine drugs, Council Ac- ceptance means nothing at all. As far as actually insuring the quality of the drug, it is useless; F&DA does the interstate job pretty well." A consultant ip medical advertising pointed out: "The main value of Council Acceptance is that it increases the prestige of a firm. The average drug firm is selling the firm, rather than the product; its integrity, rather than its manufactures. Anything that helps establish the in- tegrity of the firm is therefore important. By obtaining Council Acceptance, even for one product only, a firm can advertise in JAMA and thus get institutional entree and build up its prestige." One of the large medical ad agency people had considerable to say on Council Acceptance. His comments are fairly representative of the feelings of the reputable medical advertisers: "Council Acceptance means practically nothing to today's MD. If the drug is new and toxic, it is helpful to have it, but not a hindrance if you don't. In the case of a small house, it is probably always of some value. On routine prepara- tions, and on the products of an established firm, it is meaningless. Very few MD's ever inquire and most of these are not much impressed by It. "The Council is much too slow. It often takes a year or more to get a product through. Meanwhile, your whole investment is tied up. * * * "A reputable house today must test its products far beyond the limits of any Council requirements, for it risks its entire reputation if it puts out one bad drug. Yet the Council doesn't even trust its own colleagues and the evidence which is presented to it from certified sources. "The policies of the Councils are sometime.s ludicrous. They refuse to allow but one company to have a trade name advertised for a given drug. When a market has been established for a drug, no manufacturer is going to change the name. Yet he can't advertise In JAMA or have it accepted unless he uses only the generic name. "Another instance Is the rule on mixtures, many of which are commonly ac- cepted by the profession today. Vitamins are the best example of this. Even standard techniques are not accepted under these rules. The profession has long accepted the combination of pencillin and sulfanlamides in certain combinations. Not only won't the Council accept that product for advertising, but it won't even allow any abstract of the article in JAMA to be printed as an ad, though no ad copy was to be included. "Competitors do not trust the Council and are continually disappointed by It. It seems to play favorites a lot of the time, and what applies to one doesn't apply to another in what seems to be Identical circumstances. Big advertisers, Chi- cago firms, and oldest advertisers seem to get away with things that no one else could. "Since a company cannot depend on getting Council Acceptance, even If it meets all the requirements and submits the evidence, and since the Council has no sense whatever of the time Involved in these things, many advertisers must cut their schedules, or just leave JAMA out to a large extent. "Let me give you one example. Although a folder was submitted based on the papers written on a drug by three of the country's recognized leaders In pharmacology, the Council refused to allow their statements as advertising, though these were statements of pharmacologists, in no way connected with the company. "Essentially, medical advertising is the most honest of all advertising today. The Councils had a lot to do with making it that way. But this isn't 1910, and the first-class firms are beyond reproach today. Besides that, the F&DA is always watching them. "Yet the Council behaves as though the industry were still full of barbarians. * * * * * * * "On the other hand, it allows the most extraordinary claims on products the AMA accepts which are not subject to scrptiny. Respect of advertisers and readers is gone when they see cigarette ads and ethical ads side by side and assume both have been approved by the AMA." PAGENO="0310" 5782 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Another smaller medical ad agency head made some of the same points: "The value of Council Acceptance is greater for the small advertisers because It makes their products more valuable in the eyes of the physician. It is lessened, though, because of the trade name restrictions. This antagonizes many manu- facturers, especially where several have been working on the same sort of drug over the same period of time. * ~* * * * * * "More publicity should be given on Council Acceptance, directed at physicians, who generally know little or nothing about its meaning. This would increase the value of the Seal. Also, what Council Acceptance involves should be re-stated to the manufacturers, and consistent treatment should be given to all comers. "There is too much discrimination and waiving of the rules for the bigger companies. Manufacturers never know where they stand on Council Acceptance on their products. Also, there is too much delay and too many refusals without giving constructive criticisms on products or copy." A New York ethical drug manufacturer, who certainly would not be considered an opportunist, made the following rather typical comment: "Since the new F&DA, Council Acceptance doesn't mean nearly as much as it used to. The AMA restrictions don't carry the same weight on new products as they did in the past. It's a good thing to have the Seal if you can get it without too much heartache. But it isn't necessary to have. "JAMA is frequently left out on our schedules for new products because of Council delays. The F&DA must act in six weeks if your case is good. With the Council, it is two or three months at best. "They want to quibble over copy-have a regular schoolteacher attitude. The Council's attitude is that the industry is a crook. The industry resents this attitude-that the Council Is always trying to catch it doing something that is crooked. The biggest bone of contention is that they figure you are guilty till you prove yourself innocent." * * * * * * * The criticisms of the Councils were practically never that the Council standards for products were too high. Practically universally, however, the manufacturers and agencies were critical of what they considered the attitude of the Councils, their lack of standardiza- tion, and the two points which the advertisers considered pointless and archaic, the prohibition of the use of trade names and the refusal to accept any mixtures. * *. * * * * * Several of the manufacturers actually felt that the standards for products were not high enough. One of them put it this way: "The Council Acceptance Seal is of no more value than the Good Housekeeping Seal. They are getting lax in their standards. It lowers my opinion of the Journal." Another one said: "Some doctors feel that the Seal has become too easy to get. For example, we have a good but very potent drug that has to be used very carefully. The special- Ists resent the fact that it has been okayed for GP's." Sometimes the value of the Seal lies in the fact that if the manufacturer doesn't have It, his competitors use this fact against him with the doctors. The larger ethical drug firms, for the most part, attach little or no value to Council Acceptance as a selling aid. One of the country's top drug firms had this to say: * `Being able to tell the doctor that a product is Council Accepted doesn't make much difference to us. The doctor doesn't place any particular value on the Seal. Our detail men do not even bother to tell the doctor that a product is Council Accepted. The fact that (NAME OF MANUFACTURER) makes it, carries more weight than the fact that the Council has approved it. "In general, most doctors do not know whether a product is accepted or not. over 90% of the dotcors are in this category. If they did pay any attention to the Seal, they would ask about it. I do not recall a single instance where the doctor has asked whether or not our product was Council Accepted." Three more comments, each following the pattern indicated above, but with slight variance, will suffice to give the sentiments of the firms and people with whom we talked. A New York medical ad agency head: "The average MD doesn't rely on Council Acceptance, and knows little about It. He relies primarily on the company's reputation. Because it takes so long PAGENO="0311" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5783 A small drug manufacturer had something slightly different to say: "JAMA is used for prestige purposes. It gets about half of our ad budget. We use other journals and throw-aways for the same purpose for which we use direct mail-for product selling. The non-JAMA media combined get the other half of our budget." The advertising head of one of the top drug firms had this to say: "Actually, we would never advertise a good product in only one journal. We want to get better coverage. We know every doctor doesn't read every ad. Therefore, with multi-journal coverage, we know we improve our chances of contact with any one doctor." The three following statements represent the opinions of those who are most favorable to JAMA. Here is what a medical advertising agency head said: "JAMA is by far a better publication than the throw-aways. We advertise in the throw-aways because we find it difficult to get some products Council Ac- cepted. We use throw-aways for Council Accepted products only for the addi- tional coverage we get. That is the only reason." A small catalog-pharmaceutical manufacturer said: "JAMA is the best medium. There is no question at all in our minds about it. It is the most widely read of the journals, If journals are read at all. I am not too familiar with distribution figures, but I know that when a doctor is busy, he will flip through JAMA whereas he may not in other journals he gets. I base this on my own experience." Another manufacturer of drugs stated: "JAMA is best for new, highly experimental or toxic drugs. We use other journals mostly for non-Council Accepted drugs, and direct mall for all-out product pushing. This year we are experimenting, giving Modern Medicine and JAMA each 45 percent of our ad budget and 10 percent to other journals." This ethical drug manufacturer favored JAMA for GP's, other medical society publications for specialty products: "Journals that are the official journals of the various medical societies (for exaniple, the American College of Surgeons) have greater standing than the AMA special journals, but JAMA is the most effective for GP's." Some advertisers decide how their budget will be spent by the worthiness of the cause which expenditures will help support. For example, this ethical drug manufacturer: "Our primary objective in journal advertising Is circulation. But we also advertise In every state medical journal, most of which have small circulation, on the theory that our success depends on the good will of the doctors and that we owe them support in their work. We feel that it is our duty to contribute to the support of the state journals. In the same way, we contribute directly to the revenue of the AMA special journals by buying space in them, and in- directly by buying space in JAMA, whose profits help support the special journals." Less philanthropic, at least toward JAMA, are these two ethical drug manu- facturers: "We do not advertise in JAMA as a contribution toward anything. We take a hard, cold look and consider what s~e can get out of It. If our money could be spent better somewher~ else, we would pull out of JAMA without any compunction." "We feel a certain obligation to help support some organizations, such as state medical groups and state pharmaceutical groups. About the AMA, we approach It more strictly as a business proposition." Most of the advertisers feel that JAMA Is particularly good for certain pur~ poses, and that others are better for other purposes. For example, this large ethical drug manufacturer: "We select media on the basis of purpose. JAMA Is best for new and Council Accepted drugs, but other journals are better for intensive selling when coupled with detailing and direct mail. Personally, we like JAMA best because It is highly thought of, and has the best coverage both across the board and in several specialties." An eastern medical ad agency head views the situation somewhat differently: "We use JAMA for intensive promotional work in the first phase of sales campaigns whenever the product has the Seal. Other )ournals take it from there and we tie detailing, in with the ad campaign. JAMA gets about 20%, other journals about 80% of our ad budget. With non-Council Accepted drugs, we advertise heaviest In the throw-aways." PAGENO="0312" 5784 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY to get acceptance on many products, many manufacturers wait until the market has been built before applying for it. The entire investment of expensive re- search and expensive production may otherwise be tied up while awaiting Coun- cil Acceptance. "Since the penicillin episode, when the F&DA stepped in and set standards for manufacture, value of Council Acceptance has lessened even more. The Councils are too slow, too conservative, prejudiced in favor of the large com- panies, and too whimsical. They allow some companies to do things which they forbid other companies to do." A large drug house head of high reputation in the field: "Council Acceptance on a drug does no harm, and might even do some good. It certainly is not a great asset, however. "The top men in the pharmaceutical manufacturing houses are still suspicious of the Council. Although it has improved in the past years, there is still the great grief Of the years gone by. The pressures on the AMA are great, and their ways are devious. * * * * * * * "The AMA has kept itself out of contact with management in the drug field, and as a result operates In a vacuum as to the actual conditions which manage- ment people face. "Because so many good drugs are readily accepted by physicians without hav- ing gotten Council Acceptance, and because of the great trouble required to get acceptance, as well as because the Council seems to adopt the rules its wants to apply to a case as it goes along, there doesn't generally seem much sense to getting Council Acceptance. At least, until the market is established anyway." Another large drug manufacturing head: "Many pharmaceutical houses consider it a definite disadvantage to have Coun- cil Acceptance on a product The Council is so hypercritical of the ads, so `holier-than-thou', that it's really painful. An advertiser necessarily doesn't want to say merely that his product is `good'; he wants to say that it's `better'. This is the very essence of competition. "The limitations on the wording of ads for Council Accepted products in many cases actually prevent the doctors from getting the real facts about a product. For this reason, too, many of the best drug houses wouldn't dream of applying for the Seal as a regular procedure. "It Is undoubtedly true that the Seal has a very definite advantage as a sell- ing point. However, its advantages are considerably outweighed by these dis- advantages I've mentioned. "After all, the AMA is no more honest than the reputable pharmaceutical firms, and no more Interested in maintaining the quality of their products." 5. selection of specific journal media In the case of those products which the advertiser decides will not benefit sufficiently from having the Council Seal as to make It worthwhile to go to the trouble of getting it, the advertiser merely has to decide which of the non-AMA. publications he wishes to use. Where Council Acceptance has been applied for and received, the advertiser decides whether to use AMA publications or non-AMA publications, or a coni- bination of both, for his journal advertising budget. In general, the majority of the advertisers consider JAMA tops for institution- al and prestige ads. Most of them also consider it the top publication for the GP and the mass physician market. Where the product is accepted, the big majority of the advertisers will use JAMA. About a third state that they also run the same ads in the controlled- circulation publications, as well as in some of the other general journals. For specialty products, accepted or not, the majority of the advertisers choose specialty publications because JAMA is too expensive for the average selected market advertisement. Better than half of the advertisers who were interested in discussing special journals as media volunteered the comments that they considered some or meet of the non-AMA specialty journals superior to their AMA equivalents. One of the book publishers stated: "We do our media selection on the basis of purpose of the ad under considera- tion. ~ ug~ JAMA where we want wide coverage and prestige, use other journals for specific markets. Actually, we use direct mail most of all. This is used continuously to push the firm's wares." PAGENO="0313" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5785 A contraceptive manufacturer stated his policy as follows: JAMA provides us with a measure of prestige. We use other books to push our sales." Another ethical drug manufacturer offered a more explicit statement: "We use JAMA particularly for prestige purposes and as a reminder of the product. But the other publications are more profitable because JAMA is too crowded with its concentrated ads. For this reason, we have built up a big representation in state and county medical journals, which are more local and personal, and which are less competitive, and give better visibility. I have a high regard for Modern Medicine and Medical Economics. We need their mass circulation to reach the GP's, who are our chief market. We use the specialist journals chiefly for our endocrine products." This same idea was mentioned by another small ethical drug manufacturer: "My feeling is that each of the three general journals-JAMA, Medical Eco- nomics and Modern Medicine-all play a part in the medical field. I personally prefer Modern Medicine and Medical Economics because their advertising, being interspersed with copy, has a better chance of being seen." Medical Economics and Modern Medicine both have some strong supporters. It is interesting to note that most of these are also most bitter in their com- ments about the Councils. It seems more than likely that their favorable atti- tude toward the throw-aways is a rationalization of their dislike of the AMA. An advertiser, head of a small drug firm, bitter toward the Council, stated: "For selling, we use Medical Economics and Modern Medicine. Our detail men have noticed that these books are widely read by physicians, much more so than JAMA, which just seems to pile up in offices." A specialty drug manufacturer who fits into the above-mentioned category expressed a different slant: "With other firms who use JAMA, there is no doubt that JAMA Is used for prestige. JAMA is, however, the kiss of death for product selling. Principally, this is because of lack of readership. The JAMA editors expect too much of the JAMA readers. The articles are too advanced, too obstruse for the general practitioner. JAMA is too much of an intellectual affair, not at all practical. Furthermore, its frequency of publication is too great." A physician connected with a large drug firm who has had considerable trouble with the Council stated: "This question of the relative effectiveness between Medical Economics, Modern Medicine and JAMA is a very moot one. No two people in our organiza- tion agree. I think it is the consensus that both Medical Economics and Modern Medicine are better read by doctors than is JAMA-but this does not mean that they are more influential." The fact that Council Acceptance is the key to the selling of JAMA space appears again and again. Witness this eastern ad agency man: "JAMA is used for mass circulation and wide coverage. It is the best possible organ for this, but it is only half as valuable as it could be, because of unrealistic and shopworn methods and restrictions that have no application today. Be- cause of this fussiness, and In many cases inconsistency, JAMA loses lots more advertising which it could otherwise have. "We use JAMA to get acceptance of new products by the profession. The ad budgets for established products are very low, and therefore we can't afford to use JAMA for them. Besides this, the value of JAMA for an established drug is questionable. "We use other journals to push new specific products or for non-Council Ac- cepted products. We can conduct a heavy campaign in them, even though the coverage is not as wide as JAMA's, because the readership is considerably higher." Another ethical drug manufacturer mentioned a different variation of the effect of Council Acceptance on JAMA space selling: "Of course, we have to advertise our non-Accepted products in non-AMA journals. We accordingly feel that we must also support these non-AMA jour- nals with Council Accepted products as well." As indicated above, most of the advertisers who use detail men and journal advertising usually make an effort to tie them together. This also applies to JAMA advertising, possibly to a higher degree than with the others. About a third of the advertisers who discussed the subject of tying in JAMA advertising with detailing stated that their detail men regularly carry the JAMA ads. Another third state that they usually carry the ads but generally use them only in the case of certain products. Another third mentioned that they had no PAGENO="0314" 5786 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY particular tie in plan because the Council Seal was not considered of any particular help with the physiu~ns Iwo variations of tie-in are gi~en in the following comments The first by the head of an ~d agency the second by an ethical drug manufacturer Our detail men mal e the fullest use of our JAMA ads on theu visits to doctors. They do not use theiii with druggists, though they should. All our disti ibution points are kept informed of our JAMA advertising and are sent copies of the ads. Our detail men who visit doctors must not only carry copies of our JAMA ads with them, but they are also supposed~ to read the Journal." Our in un tie in between det'tiling `md journal advertising is in the matter of tuning. We place our greatest weight of ~ ads when our detailing is heaviest. On the other hand, we sometimes deliberately withhold our ads until after our detailing is completed, using the ads as a follow-up. It all depends on the product." PART II. ADVERTISERS' VIEWS ON HOW THE AMA CAN SELL MORE SPACE This survey of advertisers and the one with physicians which is currently in the field were undertaken to discover how the AMA could increase its advertis ing revenue It seems to us that while the possibility of increasing advertising revenue by seveial million dollars per year is `i good moti'e for putting into effect the inform'ition g'uned fi oiii these tv~o studies there is an even more important reason for so doing. By undertaking the betterment of advertiser relations the AMA has an oppor tunity to assume leadership in improving some $130 million worth of medical advertising per year. Through its leadership the AMA can show atheitisers the way to make ad vertising a much more positive force for helping the practicing MD keep current on de~ elopinents w hich hive occurred after he has completed his formal medical training By accomplishing this the advertiser will get more value for his money spent and will receive better reception for all his advertising efforts By failing to impros e its relitions with the medical manufacturers and adver tisin~, igeacies the AMA is going to find itself losing its present none too strong direct control. This direct control is exercised by the AMA only through the Councils and through the limitations it puts upon the advertising space it sells. As we pointed out earlier, the AMA is not in a monopolist's position: the manufac- turers and agencies have alternative choices. As the facts show, and the com- ments of .the advertisers given herein re-state, the manufacturers can and are achieving excellent sales results with products which have never been submitted to the Councils. The advertisers can and are getting their advertising messages to the physicians without using AMA media. The manufacturers, at least most of them, prefer that a spirit of mutual under- standing and trust and cooperation exist between themselves and the AMA. They are willing to go at least half way to accomplish this. They feel that if the AMA would also go half way, then AMA-industry cooperation can be a reality. In this part of the report we are going to show how in the opinion of the advertisers, a common ground can be found. This will mean not only the rais- ing of standards for medical advertising, but it also can mean an increased ad~ ertising revenuO to the AMA of several million dollars which are now being spent on advertising in other medical publications in direct mail and to some extent, possibly even in detailing. The four main changes which will be indicated in this section are the change needed in the attitude of the AMA toward advertisers; the moderniza- tions and improvements needed in the Council rules and procedures the need for the AMA actively to sell and promote the Journal and its other publica tions as advertising media and the fact that the AMA should continue to im prove the Journal so as to make it of increasingly greater value to its readers. 1 The AMA 8hould change its attitvde toward adtertmsers Though we are repeating what has already been said, we feel it necessary to mention again the fact that the advertisers resent being treated as irresponsible or incompetent opportunists. PAGENO="0315" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5787 In our interviews with the advertisers, we got the definite Impression that the AMA, while widely respected as the strongest single political factor In the medical field, was liked or understood by practically none. The new and marginal manufacturers were fairly subtle in their stating of these attitudes. The strong, established, leading ethical drug manufacturers, on the other hand, were very explicit in their statements. The theme runs continuously through the interviews and through the comments reproduced in this report. At least a large part of these unfavorable attitudes are based on misunder- standings of the AMA, or even on definitely false beliefs. Public relations experts say that good relations with the public are never achieved by accident. They are the result of a definite, organized and con- tinuous program of telling the public the favorable things about oneself, and admitting one's past faults and telling the public about the efforts that are being made to correct them. The AMA has a two-fold job: that of understanding the problems of the advertisers, and making the advertisers understand the problems of the AMA. A comment of a small drug manufacturer indicates the consciousness on the part of the advertisers of a need for closer cooperation: "The ironing out of the difficulties and disagreements between the manu- facturers and the AMA is of tremendous importance. JAMA could and should be a made-to-order, natural medium for advertisers of medical products. It has everything, or It could have, if it would clean itself up and become a real professional journal. I should like to be able to use JAMA to the exclusion of all other medical journals." Another drug manufacturer made a similar statement: "We would like to see the Industry get closer to the AMA. from the marketing standpoint. There has been a step in that direction here. For a while, this company has been a bit standoffish. The trend is going in the other direction now. We actually submitted more products in the last six months than in the previous two years." One of the large ethical drug firms issued this plea for cooperation: "Wet get along very well with the AMA, but they could do a better job with their advertisers if they found out what problems those people have to face, and cooperated with them. A committee of the pharmaceutical Industry might be jointly set up with one from the AMA to work out some of these problems In an across-the-board fashion." There were a number of advertisers interviewed who expressed the opinion that the AMA today is considerably better off than it has been in the past. We quote the following large drug manufacturer as typical of this group: "There have been improvements. Dealings with the AMA are easier now, but still hard, although Storment personally is wonderful. His predecessors, how- ever, will not easily be forgotten. The damage Leach did will rankle for many years to come. The AMA cannot go ahead on the policy that everyone is out to get the better of it. It must know that most of the manufacturers respect and want its approval, but by making it Impossible to deal with them, they antagonize the very people who are doing their best to uphold the AMA's standards." Here is one medical advertising agency head's comment on the AMA's need for better public relations: "I do think that the AMA ought to do a better public relations job. No one, for example, knows the new editor of JAMA; and in some areas, such as New England, the doctors are anti-AMA, which means, among other things, that Council Acceptance carries little weight. Something should be done about this." The aloofness of the AMA was expressed by one contraceptive manufacturer as follows: "The journal Is too far away. Many of us would do more in JAMA If the AMA acted like they wanted us to. They act like they don't want to sell space. If they offered to help us get approval, we would undoubtedly advertise more in the Journal. Our only contacts with the AMA are through our agency." One of the bluntest statements was made by a small eastern ethical drug manufacturer: "The public relations of the AMA are lousy. They have no thought of dealing with anyone in any but a high-handed manner, including the people who support them." PAGENO="0316" 5788 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY A softer-spoken manufacturer said: "Our biggest gripe is the old-fashionedness of the AMA, and their apparent lack of interest in the advertisers' products or markets." A manufacturer of professional equipment interpreted this disinterest in a different fashion: "The legitimate manufacturers feel that the AMA is not interested in them. It is only interested in selling space-both at the conventions and in JAMA." Three final comments, the first by an agency man, the second an ethical drug manufacturer, and the third another manufacturer of contraceptives, tie in their feelings with the old bugaboo, Council Acceptance: "JAMA could get lots more ads by applying a little common sense, and 1952 thinking. Reasonableness on requirements, on time, etc., in the case of Council- Accepted drugs; acceptance of advertising on non-acceptable drugs from Grade A houses; dropping the rule on mixtures and combinations; and working with, rather than against, the industry-would make things much better for all concerned." "The whole problem of JAMA advertising turns on the Council. We went through lots of trouble needlessly to get acceptance on drugs, and then found out that we didn't need it. Other journals do just as well for us as media as does JAMA, .and we don't have to break our necks to meet the Incomprehensible and in many cases ridiculously arbitrary demands of Council people. Com- binations should be allowed in JAMA. But again, acceptance should be easier and less like a schoolboy's history examination. The AMA doesn't trust its own colleagues or anyone else. It is too arbitrary and prejudiced." "For advertisers, meet time scheduled on Council Acceptance, andy give them the consideration that any magazine does. Work with them, and be reasonable about policies. Don't treat them as if you are doing them a favor to let them into the book. Modernize JAMA, also. Modify the format and the page layout. Make the book more attractive to the physicians and it will be more attractive to the advertisers. The type is good, but use better stock, this present stuff offsets and shows through too much." 2. The AMA should improve the councils atvl sell the value of the seals The complaints of the advertisers about the Councils follow fairly definite patterns. They criticize the Council for the stand on trade names and mixtures. They complain that it takes too long to get decisions, and that the basis for deci- sions oftentimes seem arbitrary and contradictory. The following comment by a highly respected drug manufacturer is typical: "Certain things about the Councils are silly to the point of annoyance. It is most difficult to get reasonably fast answers from the AMA on most questions. Once the AMA has made a decision which they later may acknowledge as wrong, it is still almost impossible to get it changed. A case in point is the trade name (BLANK). The Council gave the drug a name completely different from the common one. We prepared a long brief on the history of medical nomenclature and on this drug in particular. There was no objection from them, but they wouldn't change it for a year and a half. "Combinations, too, must be allowed. It Is silly not to allow combinations of accepted drugs, and to ban combinations of drugs that are commonly in use. The Council is so hidebound in many affairs that they simply refuse to accept what has been a fact for a long time. "Council procedure should be standardized, speeded up, and constructive- not just yes or no. The same rules should apply to everyone. "But most of all, the AMA should show It respects the pharmaceutical manu- facturers as they respect it; and it should work with them, not against them." A man with one of the big international consumer ad agencies expressed his feelings as follows: "The business of Council Acceptance is a constant source of irritation. I used to think it was Fishbein, but the same kind of thing still goes on. It's just handled in a most unbusinesslike way. "For example, when one of the JAMA representatives in New York said that they would consider Upior ads of an institutional nature, we asked him how *~ could get consideration for (BLANK). He was completely vague-just said be wanted a specimen of the ad, etc. "What the JAMA representatives need is a printed form for applicants spe- cifically stating all conditions and requirements. "Another trouble is the difficulty of getting Council Acceptance. There Is always too much delay. You can't get decisions on anything, which means that PAGENO="0317" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5789 you can't allocate or prepare your ads. We were once told we couldn't get an answer because several of the Council doctors were away in Europe. The New York representatives do their best They make fiequent calls to Chicago for us but they don t seem to be able to get any information They are kept in the dark Among other things all this mystery and delay makes space buyers and agencies wonder whether they are being discruninated against A more businesslike policy is needed to convince us that we are getting fair and equal treatment" The apparent arbitrariness on decisions about copy is another source of mis understanding. Witness the comment of this ethical drug manufacturer: "Council Acceptance is valuable to us as a selling point, and we tie it in with our direct mail and detailing whenever it is appropriate, but its value could be increased if the difficulties it presents to advertisers could be removed There are too many objections to valid statements in the copy-statements which are supported by the best research in the best houses I appreciate that JAMA must maintain a high standard But when clinical investigations prove certain things about a product why can t the ads say so ~ The AMA and the manufacturer should work together to inform the doctors but the limitations imposed by the AMA prevent this We have also found that there is unnecessary delay in granting Council Acceptance This comment on the same subject was offered by the head of a large medical ad agency The Councils are inconsistent They want a statement of facts as they see them, regardless of the truth or the requirements of good advertising. They even edit doctors' direct quotes. "No one wants JAMA to accept junk, but reputable firms know what they are doing and self-policing is general. The fact that an advertiser naturally plays up the best features of his product doesn t mean that his claims are untrue But the Council frequently objects to the emphasis in ads For this reason many manufacturers will establish a new product making all the claims they want to make before applying for Council Acceptance Or some times they deliberately refrain from getting Council Acceptance at all because of the way it restricts their advertising Another complaint on trade names was offered by an executive of one of the large ethical drug firms "The policy on advertising of trade names is ridiculous. The product is actu- ally sold under the trade name by every other method of selling Another large ethical drug firm offered this comment on mixtures and combi- nations: "From an advertiser's `standpoint, combination drugs should be given Council Acceptance if at all possible. We are terrifically restricted by not being able to get Council Acceptance on combinations The rules of the Council definitely limit the amount of advertising which is allowed to appear in JAMA There is no question about the fact that space we use would increase if it were not for these restrictions This double barrelled comment came from an X ray manufacturer About acceptance of the Seal speed it up If the Seal meant anything ~s e would definitely hold up an advertising campaign but it doesn t mean anything now, so we don't." An otherwise happy ethical drug ad manager offered this comment: `The time taken to grant acceptance is not bad considering the problems in volved. We got quick action on our last three applications. "However, JAMA does take far too long to publish the official notices of ac- ceptance. For instance, we had a product accepted last May and the announce- ment of acceptance has still not been published even though this is December Considering the number of ad pages they cover TAMA should devote more space to these official notices if lack of space is the reason for this delay The foregoing comments were criticisms of the Council as far as its standards or its operations are concerned A number of manufacturers felt that the AMA was remiss in not doing a better job in selling the value of the Council `~4eal to the phvslel9n They felt that the advertisers niaced comparatively little value on the Seal, because physicians place little value on and know little about, what the Seal stands for. A medical equipment manufacturer gave as his opinion: If I hid anything to do u ith the promotion and direction ed the formation of policy of the Council. I would promote the Seal to the doctors. Don't make a commercial venture of it Think of it in the light of protection to the doctor PAGENO="0318" 5790 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY A contraceptive manufacturer stated it this way: "The principal drawback to Council Acceptance is that most physicians are not aware of the meaning of Council Acceptance. They should be made more conscious of the Council purposes and their methods. NNR should be more widely distributed, and the value of it should be stressed. Druggists don't care one way or another about Council Acceptance. The AMA should not have given up publishing NNR. It would be better if they published it, rather than Lip- pincott." A medical and agency head said: "The AMA should develop material showing the purposes and methods of the Councils, and should re-emphasize the value of Council Acceptance. They should educate MD's as to the real meaning of Council Acceptance. "They should also speed up processing of drugs which have been submitted, and loosen up their policy on trade names." Another medical ad agency man, himself a physician, offered the following: "Its value could be increased if the laity knew more about it, and if the Seal could be put on the package. The doctors, too, should be better educated about what the Seal is and means. Many of theni seem to think you can buy it. Drug- gists are even more ignorant and cynical about it." A manufacturer of commercial chemicals expressed the same thought some- what differently: "The value of the Seal could be greatly increased if the AMA would take steps to explain its real meaning to doctors. Most of them don't appreciate its im- portance, especially in the case of new drugs. And there are lots of things they don't realize, such as the fact that if a firm has some Council Accepted products, it can't advertise its full line In direct mail, but has to keep its Seal products separate." One of the large ethical drug manufacturers, motivated by self-interest, made this unusual comment: "From the standpoint of the AMA, the AMA should promote the Seal with the druggists. Such promotion would do no good with the doctors. In fact, promoting the Seal would bring the smaller companies with Council accepted products to a par with the larger, established companies-that would be the trend." - $. The AMA 8hould sell the Journal as a medium One of the commonest reactions to our interviews with the advertisers was surprise that the AMA was interested In the opinions of the advertisers. More than one of the interviewees, when we explained the purpose of the survey, ex- pressed amazement and said something like, "Do you mean the AMA Is really interested in what I think?-I never thought they cared." The general reaction, expressed or implied, was a feeling of hope that the present AMA administration was going to initiate some long-needed steps toward Improving relations between the AMA and the advertisers. In general, a number of the advertisers spontaneously stated that the present AMA operating organization, in its various departments, was the most coopera- tive and progressive that the AMA has had. The typical advertiser reaction to AMA space-selling methods ran along the lines: "I never thought the AMA was at all interested in selling space. I thought they looked on advertising more or less as a favor to the advertisers and a source of some extra income which they don't especially need." About three-quarters of the people we talked to said that they were perfectly satisfied, from their own viewpoint, with the low-pressure, non-promotional methods employed by the AMA. When the question was put to them in terms of "How can the AMA get you to buy more space?", however, the answer was Invariably, "They are going to have to sell me by showing me why I should buy more space in AMA publications, and to do this they are going to have to cultivate me considerably more and give me considerably more services than I have been getting." The other quarter of the advertisers stated right off, "The AMA needs more promotion if it is going to be competitive to the throw-aways in selling space." Only a handful of the largest and most important advertisers stated that they had frequent contact with JAMA space salesmen. The large majority stated they seldom saw JAMA representatives, they re- ceived practically no promotional materials, and that in comparison to the materials with which they are bombarded by the throw-aways, the AMA mat- ter was not very well done. PAGENO="0319" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5791 An eastern medical ad agency head stated: "The salesman from JAMA comes in only about once a year. Though this is December, there has been no one here yet this year. JAMA puts out little promotional work, and that is poor compared to what we get from the others. They are mostly just circulated letters from Tom Gardiner. The pitch on the Student Journal isn't too bad, though. "The JAMA salesmen should be better equipped." A small ethical drug manufacturer made this comment: "I have never had a salesman from the AMA call on me. As far as I can recall, I have never received any promotional literature. The AMA leaves you with the impression that it is always doing you a favor. Today, advertising of medical products doesn't have to be in JAMA and most of it is going else- where. A lot of this is done to the hidebound conservations of JAMA and the Councils which won't come up to date." Along with these comments on lack of promotion is the frequent statement that the AMA has a really valuable piece of merchandise to sell, and that it is a shame it is not being promoted as it could be. Witness this ethical drug nianu- facturer's comments: "The AMA doesn't seem to realize what a valuable piece of merchandise they have. "There are constant personnel changes in medical advertisers. You have to keep selling the new people. 1 don't think the AMA has ever participated in specialty journal advertising promotion. They aren't promoting them at all. It isn't enough to send out a rate card. "The AMA has never made any real effort to sell the advertisers. The Journal has been my bible. But you have to know your way around. They haven't sold either the advertiser nor the profession. I am sure everybody doesn't realize what you can get out of the Journal. "While I find Modern Medicine's "Topics" on market research very valuable, I think that some of the non-AMA publications go too far and bother you too much. "But the AMA has never gone far enough. This is especially true of the AMA special journals. They are good, but nobody is told about it. "It is not enough to say, `Only Council Accepted products are carried in our Journal'. There have been too many successes without Council Acceptance. "The AMA attitude is that they are giving you a favor. This attitude is not conducive to selling. Henry, who was previously here in New York, just never caine around-only about once a year." An executive at one of the small drug firms pointed up the fact that person- nel changes make continuous promotion necessary: "I have been here only a year, and I have never seen an AMA representative nor any promotional literature of any kind. In my opinion, their salesmen should be out selling the book, and the AMA shouldn't behave as though it were doing us advertisers a favor letting us into the book. The throw-aways don't do this." One of the larger ethical drug manufacturers stated: "What do I think about the AMA space-selling and promotion techniques? There is damn little of the first, and none of the other. "It doesn't really matter a damn bit to me, because I don't want to see them, since I already have more than enough to do, and it is more pleasant this way. "For their own sake, however, they should get out and do some selling or one of these days they are going to find they haven't any new customers." A midwestern medical supply firm put it this way: `The AMA space salesman should definitely make more calls. Even though JAMA now gets the largest percentage of our media advertising, if their soles- men made more calls on me and had a decent story to tell, it is more than likely that we would increase our space in JAMA. "The AMA doesn't make any effort to sell anything or help anyone with any problems. It's there if you want to use it, and it's perfectly okay with the AMA if you don't. . . "Although this policy is okay with me, I suggest that a little more planning in a sales campaign would certainly be productive of excellent results for them. A specialty food manufacturer made a similar statement: "I don't think I have seen a space salesman from the AMA in the last ten years. I see Mr. Lyon at meetings, but can't remember when I had a call from one of their salesmen. PAGENO="0320" 5792 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY "Modern Medicine uses more aggressive sales methods. I have got to know their man, and I have confidence in him. And it does result in our buying more space in Modern Medicine than we would otherwise. "Our company is growing, and so is our advertising budget. As of now, the increases in our budget for the most part go into Modern Medicine. We are also thinking of going into Medical Economics, although we have not done so as yet. "I would really like to be sold on buying more space in JAMA, and I think I could be. A better sales presentation on the part of JAMA, if it did nothing else, would reinforce our own feelings. It would get us off the fence." A number of the advertisers felt that merely seeing the AMA space sales- men more often would not be an answer to the problem. The space salesmen, they felt, were not sufficiently trained in the policies of the AMA nor the facts about the publications as media to be of any real help. A medical ad agency head stated it as follows: "It has turned out to be a waste of time to talk to the AMA men. Nothing Is being done by them to help the advertisers. If you want to know what should be done, see anyone in the consumer field. Who buys, where do they buy, what do they buy? Consider Mademoiselle and Charm as two examples. They give a magnificent analysis of their markets. The JAMA salesman walks in and says, `Why don't you buy ?`. They should hire men to do a constructive job of salesmanship." A large ethical drug manufacturer felt much the same way: "As far as the space selling and promotional practices of the AMA are con- cerned, there just aren't any. But in view of the way the AMA doesn't use Its salesmen for anything but errand boys, we don't want any. They make very few calls, and the AMA promotional material is scarce and lousy. From our point of view, this doesn't make any difference.-in fact, we like it, because they don't bother us or take up any time. "From their point of view, however, it's not very good. I don't know why the AMA doesn't let their men sell the book. It's a hell of a good product and the arch-conservatism of the AMA is ruining it." Another medical ad agency man felt that the AMA salesmen's hands are tied by AMA policies: "The AMA has very little promotional materials, and their salesmen make few calls and no presentations. I don't think this will Improve until the AMA modifies its policies. It ties its salesmen's hands. "Of all the medical books, the least promotional work is done by JAMA. The State journals do a little more. The throw-aways do the most. "The AMA policy on trade names must be changed first, and in a hurry. Their salesmen should get out and sell. They should make calls-lots of them. The AMA should also help the advertisers with their general plans, and on specific problems involving the advertiser and the AMA. "The last presentation we got was the AMA readership survey, which was presented in too complicated a fashion. The AMA salesmen use very poor sales techniques. However, help on specific problems has been good." A third medical ad agency man, who was in general very favorable to the AMA, made the following comment: "The AMA does practically no promotion. They should tell their story to medical agencies and to manufacturers. They can take cases and specific ex- amnies showing the effectiveness of the Journal. "JAMA actually does a far better selling job than any other journal, but they don't tell that fact to the advertisers. The mass journals tell the ad- vertisers they have to use them *to sell. When they increase their budgets, they do so in the throw-aways, and not in the AMA publications. The manu- facturers, being constantly reminded of Modern Medicine and Medical Eco- nomics by their direct mail promotion and sales calls, feel that the doctors are also being reminded just as often, though they aren't. "The main thing I would like the Journal salesmen to do is to show me what JAMA can do for my clients." A number of the advertisers expressed the sentiment that constructive sell- inr by the AMA would unquestionably increase their use of AMA publica- tions. A drug manufacturer, known as a good friend of the AMA, put it this way: "If the AMA wants to sell more space, we are satisfied with our present alloca- tions and it will take some doing, but they might be able to convince us, PAGENO="0321" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5793 through research and working with us, that we'd do better to spend all our money with the AMA by taking out two-page spreads or 12-page inserts. It would require a lot more cultivating of us than is now done, and it would require their giving us fact.~. If they could show us it was to our advantage, we would do it. I don't know whether they would be able to do this or not." "If I were the AMA advertising manager, I would give the pharmaceutical industry the best evidence I could dig up that JAMA is the No. 1 spokesman for science and practice in this country, that it is editorially, and as an advertising medium, the most reliable for advertising. "I would also sell the mantle of the AMA. I would sell it as the only journal with only medical advertising. I would also try to disabuse the advertisers of the belief that the AMA is serving any special interests. "In promoting and selling JAMA, I would use direct selling and direct mail. JAMA can be sold only by keeping the respect and esteem of the physician and the advertiser." An executive of one of the large ethical drug firms, known In the industry as a leader, had this to say: "If I were promoting the AMA publications, I would try to find out what JAMA can offe; and can do that other publications can't. I would then under- take an aggressive mail-promotion campaign. "I would do this, not because JAMA is in need of advertisers, but to build up the special journals and to protect JAMA if things in the medical field retrench. "I would also do a step-by-step redesigning of the publication. I don't think JAMA needs any more personal representation than they now have. It doesn't need the personal effort and pressure that the others do, because of its unique position in the field." A consultant on medical marketing and advertising had some specific sugges- tions to make: "I think that space sales in JAMA could be increased by a direct-mail cam- paign to firms whose products are acceptable. Other medical journals do this and get good results. "Such a campaign might then be followed up by visits from space salesmen. The campaign should emphasize the values of advertising in JAMA. For ex- ample, the special importance of JAMA to GP's, who are the predominant type of physician and the importance of the Seal of Acceptance to physicians who are Impressed by the fact that the ads are strictly limited and controlled. Use snob appeal. Convince the advertisers that you are really a high-class publi- cation. "I also think that JAMA should be more adequately represented at trade as- sociation affairs. Its representatives should get around more and meet people. "It is not competitive enough at present. It has enormous prestige, but per- haps it is almost too dignified in its refusal to compete vigorously with its rivals. "Space selling is a tough business for JAMA since it must compete not only with other journals but also with the other media, such as detailing and direct mail. The advertiser must be convinced that space purchases in JAMA are the best investment." One of the previously quoted medical ad agency heads dwelt on the necessity for continuous promotion: "The AMA needs a promotion manager to develop direct mall to medical ad agencies and manufacturers. Tell the true facts on AMA publications over and over again. Then advertisers will be more conscious of their value and budget increases will be more apt to go to AMA than the throw-aways. "But don't go in for the high-pressure personal selling of the throw-aways. It isn't necessary and will cheapen the AMA's position." A large ethical drug manufacturer suggested more service-type promotion pieces: "Medical Economics and Modern Medicine both send us promotional stuff that Is of real value to us. "Medical Marketing", "Economic Facts" and information on the preparation of advertising is of definite value to us. "I think the AMA, as a long-term proposition, should provide to advertisers and prospective advertisers helpful Information with the idea that by giving helpful service, It can build a warm spot for itself with the advertisers." Another large ethical drug manufacturer put the same thing this way: "We like to have facts to base our decisions on. At the present time, much of what we do Is based merely on precedence. We would like to know, have the 81-280 0 - 69 - pt. 14 - 21 PAGENO="0322" 5794 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY conditions changed since the precedents ~ ere e'~tab1ished ~ W e w ould ( ertaiiiI~ like to know the answers to that Two advertising `tgency people and one manufacturer gave requests for re'~d ership survey s, which wei e typical of the expre~secl or implied wishes of the majority of the advertisers: "I should like to be convinced that JAMA is actually read by doctors and not just filed." "Continuing surveys by independent groups should be made of readership and other information about who the readel s are Cei tam other questions would be influential in getting advertisel s to place ads for example regular media in formation We would like to know such things as what Is the value of regional Inserts The AMA should have some fuiltime people in Chicago preparing in formation cm the media value of JAMA and comparing it with other books National regional and specialty influence should be measured and these facts put in the hands of advertisers. Surveys on the order of Medical Economics should be studied. They are excellent. Because of the widespread distrust of AMA, however, readership and ad effectiveness surveys should be by independ- ent agencies and certified as such." A good readership study would be very helpful We would buy It if the AMA put it out I believe the AMA is basically honest in that I have never had rea son to believe otherwise." Survey material should howe~ er be carefully worked out and carefully pre- pared since a number of the advertisers expressed skepticism in regard to the typical magazine surveys One of the large ethical drug manufacturers ex pressed this attitude Watch out for this-everyone in the publishing field is running surveys to prove that they are the best de~1 We question each and every survey that these fellows present The AMA however is a high caliber outfit and we would prob ably believe that any surs ey they did and results they presented would be done In good faith There are also a number of miscellaneous suggestions for services which the advertisers would like from the AMA. The most frequently mentioned was a request for circulation breakdowns, information on JAMA readers by age, spe- cialty, etc. Other suggestions included information about what AMA services are available to advertisers more hospital unfornation an absti act service which would fur nish bibliographies on request a library clipping service to furnish clippings of everything published in AMA journals on a particular subject and a request that manufacturers should be notified about articles in which their drugs are recommended. One person stated that he believed the AMA should do promotional work at pharmaceutical conventions Another mentioned AMA promotion should concentrate on firms with new products and prestige products which are the natural market foi TAMA In its promotional litera ture, the AMA should continually emphasize the value of the Seal as a builder of prestige." Nearly three-quarters of the advertisers Interviewed requested information on topics which are already currently being covered in the survey on attitudes of physicians toward medical advertising, which is now in the field. 4. The AMA should increase the value of the Journal for its readers As has been mentioned earlier the large majority of the advertisers indicsted that their attitude toward a publication was based primarily on what they thought was the attitude of the readers toward it The more valuable a publica tion is to its readers the more valuable it is as an advertising medium to advertisers The suggestions for improving the value of JAMA to its readeis were basially of three kinds suggestions for technical or production changes suggestions for editorial changes and suggestions for advertising changes The three main advertising changes suggested were icceptance of only pio fessional ads ertising interspersing the ads with more editorial matter if this can be done without offending the readers; and some kind of regulation of Inserts (a) Suggestions for technical or pi oduct ion changes -Roughly a third of the advertisers suggested th'it JAMA could be m'ide more attr ictise `is an ith ei tising medium by improving the physical make-up or production methods used in preparing JAMA Many of these invols ed comments on the qu ility of the printing and the paper stock used. PAGENO="0323" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5795 Typical of this type of comment is the one made by a medical advertising agen- cy head: ,` Do a better printing job Reproductions are poor stock is terrible Format md layout are okay I personally don t care whether or not the ads `md the ethtorial matter are mixed An industrial chemical manufacturer commented: Look at such magazines as &P and Po8t G~ aduate Medicine They have good design layout paper etc JAMA can learn something from them A number of the comments on production changes were tied in with suggestions foi overall modernization of the appearance and editorial presentation of J ~MA An example is the following offered by a large ethical drug manufac turer who was fundamentally very favorable to the AMA "In my opinion, the whole make-up of the Journal is archaic. The British journals do a much better job-far superior-in spite of the limitations of good paper. "We also carry a little space in Today's Health. Really, as a magazine, it is amateurish as hell. I don t think Austin Smith should feel that changes have to be made veiy slowly and gradually Look at the British Medical Journal That used to be terrible. Then they had Eric Gill redesign it and they changed it overnight. The AMA production equipment is definitely archaic What they call a bleed is laughable A small drug manufacturer put more emphasis on the original articles "Typography and format should be cleaned up; articles should be shorter, sum- m'tries better Long articles should be condensed material should be updated It is much too far behind. "But most important, the articles are of little interest to the GP. There is considerably too much specialization. "Reproduction should be better. There is too much show-through and offset. i~Iore care should be used in editing the magazine and an advertising depai t ment section should be established that would work with the ad~ ertisers and help them w7ith their problems." A surgical* instrument manufacturer was quite drastic in his suggestions: The format is lousy they should redesign the book they should intersperse editoi ial matter with ads they should use better heads and redesign the whole layout They should run articles of more general interest and they should not publish it as often as they do The average doctor can t possibly read all of it regnlarly-it comes out too often and has too much in it They should condense the technical reports like Modern Medicine and Medical Economies do The articles should be no longer than one page The summaries should be at the head, not at the end of the article. There should be more cuts and more (olor and they should use a smaller format They should sectionalize the book and let the advertisers go in the particular section which they want to hit The editorial board should abstract each section and run a summary at the beginning of it They should `ilso cut the time okays for copy (b) Editorial changes -The three main suggestions for editoiial changes w ere conceined with presenting the material in the Jouinal in a more interesting manner giving more attention and more space to material which is inteiesting to the avei age doctor and giving less attention and space to unusual cases which `ire of interest only to a comparatively few specialists, and cutting down on the time lag between the w i iting of an article and its appearance in the Journal These two comments both from large ethical drug manufactuiers weie typical of the comments regarding the unmterestingness of the editorial matter Mv stiongest Objection is to the editorial matter which is fundamentally uninteresting JAMA would be very smart if it would model itself on the Lancet md the Bi mtisli Medical Jouinal But this is probably impossible It would in olve the re education of Amei ican doctors They just can t write om express themselves in the way that British doctors can I ha~e no real quarrel with the subject matter But as it is now written JAMA is just hard to read The atmosphere of JAMA is boiingly pontificqi Medical writing needn t be dull continuously I think there are make-up devices that could make JAMA more interesting to the physician It like the AMA puts a high premium on orthodoxy-to hold out against change to the last ditch The fairly numerous suggestions that JAMA concentiate on seiving the mass (~P physician rather than the minority specialist are mepresented by the three PAGENO="0324" 5796 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY - following comments, the first two of which were made by drug manufacturers, the last by a medical auvertising agency head: "Editorially, there should be more articles of interest to the OP. Most of the articles are over the heads of the GP's, and the specialists usually get their in- formation from other journals. The abstracting could be improved. It is not complete enough in this respect." "Material in JAMA is too technical for the 1~ID of general work. JAMA is the best medical journal in the world, but it belongs in libraries, since it is only read for specific articles by MD's." "Ultra-scientific articles should be cut down and more articles of interest to the GP should be run. There should be more review articles and better abstracts. The ad should come off the cover. OP and Post-Gradnate Medicine are both ii~uch better looking books. Modern Medicine has much better abstracts. Either kill Tonics and Sedatives or get Fishbein back to do it." The requests for making the articles in JAMA more timely were fairly wide- spread. This first comment, by a medical marketing consultant, went further, stressing the part which JAMA plays as a medical news publication: "I think it would be a great improvement if the editorial pages were made more newsworthy and included more about new products and developments. This, of course, is also the job of the advertiser. In fact, it should be a coopera- tive job between the advertiser and JAMA." More along the usual line are these three comments made by various ethical drug manufacturers: "Articles are too late. They are published in many cases a year or so after they are received. Most of the articles are too high-blown for the readers. As a result, the average doctor who receives JAMA reads neither the articles nor the ads." "There is too much time-lag between the time a paper is submitted and when it is published in JAMA. This is especially true in the case of important papers. This is a frequent occurrence. I am under the impression that many times a paper doesn't appear in print until a year after it is submitted. Also, sometimes articles appear that are of no consequence, when there are important articles which are held up and kept waiting to be published. These things are important to the pharmaceutical advertiser, because many times these articles are favorable to a new product in which the advertiser is vitally interested." "I have a specific suggestion for an improvement on the editorial side. When- ever JAMA carries articles on drugs where therapy changes frequently occur, for example in the field of antibiotics, there should be a note saying when the article u-as submitted and what changes have been made since then. Sometimes there is an eight or nine months delay between the submission and the publication of an article. Such articles should be brought up to date." (c) Changes in advertising policy-The comments on suggested changes in advertising policies centered around three main topics: acceptance of only pro- fessional products, or at least limitation of amount and higher standards for non-professional ones; requests for interspersing as much editorial matter with advertisements as would be agreeable to the readers; and regulation of inserts, with a definition of what is acceptable, so that all advertisers are treated impartially. Nearly two-thirds of the advertisers definitely preferred to have JAMA accept only advertising of products of professional interest to the physician. A num- ber of these centered their attack on cigarette advertisers who made pesudo- scientific claims. The pattern of reasoning on the subject of accepting only professional ad- vertising was very consistent. It was tied in directly with the requirement that only therapeutic products which have been accepted by a Council can be ad- vertised in AMA publications. The advertisers consistently resented intensely the fact that they had products on which they had considerable difficulty getting Council Acceptance which appeared right alongside cigarette and soft-drink advertisements which had had practically no scrutiny by the AMA. This feel- ing was even more intensified in the case of ethical drug manufacturers who had compound products which they could not advertise in JAMA. This comment from a large medical advertising agency man is typical: "JAMA should have ethical ads only. It is certainly inconsistent to run such ads as the Philip Morris ads and at the same time impose such rigid restrictions on the ethical ads." PAGENO="0325" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5797 An ethical drug manufacturer expressed the same though a little differently: "Only products of professional interest should appear in JAMA. Otherwise the value of it as an advertising medium is considerably lessened, particularly since most readers don't discriminate between ads subject to control and those that aren't." Two drug manufacturers took a more positive approach in their views: "The book is much too important to have valuable space being taken up by ads of no professional value." "Only ethical products, or those of specific professional use, should be allowed in the book. There is no cookbook purpose behind JAMA. It is one of the best medical journals in the world and it shouldn't be all cluttered up with ex- traneous nonentities. There are too many ethical manufacturers who coud use the space to bring products of important professional use to the physician's eye." Some of the advertisers took a more liberal view. For example, this medical advertising agency man: "I don't blame JAMA personally for accepting non-professional ads as long as they don't insult the intelligence. It's good business. But it is strongly re- sented by my clients. In fact, they feel so strongly about the matter that al- though they are all increasing their ad budgets for 1953, they will all have fewer pages in JAMA than in 1952." Cigarette advertising was heartily damned by nearly every advertiser, with whom we talked. Even the non-professional advertisers in JAMA felt that way. The representative of one of the large manufacturers' trade associations stated it bluntly: "Cigarette advertising in JAMA should definitely be eased out. `More doctors smoke Camels than anything else' is just a bunch of crap. It adds nothing to the believability of other ads in the book, to put it mildly. I have no objection to the Buick ads. But the cigarette stuff is obnoxious to almost anyone, in- cluding members of the profession." An ethical drug manufacturer stated: "Food ads belong in the Journal. Cigarettes, especially Philip Morris ads, are completely out of place. Pheir exhibits-the rabbit's eye with a pseudo-scientific approach-is greatly resented by the manufacturer who has had the headaches of getting Council Acceptance." A small drug manufacturer extended his restriction of non-medical advertis- lag to the conventions: "Non-professional products should be completely excluded from JAMA. This is extended to conventions, which have become like twice-a-year circuses. If the AMA expects its advertisers to be ethical, and enforces standards against them, it should at least do likewise to the non-medical advertisers. The non-ethical Inclusions, and especially those of pseudo-scientific validity, have been making everyone sore. They should be tossed right o~it. The cigarette ads especially." A large consumer advertiser who has very little advertising in JAMA stated: "About JAMA advertising-when an advertiser advertises in JAMA, he should advertise to the reader as a human being, or he should talk to him in professional language. Mixing consumer talk with professional talk doesn't get very far. Such a practice degrades the publication. The car advertising is okay. But JAMA should definitely cut out cigarette advertising as it now appears. I object in general to any medical claims where there is no matter of medicine at all involved." A publisher of medical books give this suggestion: "Limit the proportionate amount of space allowed to nonprofessional ads in the book. Throw out all the phonies. This means especially cigarettes." Most of the people who condemned non-professional advertising in JAMA condemned it also at the conventions. Here are two typical statements, the first by a large ethical drug manufacturer, the second by a manufacturer of X-ray equipment: "The conventions have become a circus because of the type of people they let exhibit there. It takes an active imagination to associate them with the medical profession. They even display pots and pans. Make it more of a medical meet- ing and less of a circus-this is what they should do." "The AMA has done itself discredit by securing a lot of diverse products ~which have no relationship to the medical field. This is very evident not only in JAMA but also at the conventions. The conventions are becoming a circus." PAGENO="0326" 5798 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY A medical advertising agency man stated: "Conventions are a laughing-stock. Burlesque shows complete with life-and- death products and developments of legitiwate advertisers." Another ad agency man commented: "Clean up conventions and take out of them the burlesque show routines." This statement, offered by a large ethical drug manufacturer, introduces the Idea of Council Acceptance at the conventions: "Conventions first of all must be improved. They are like county fairs, and things are not only disorganized but ridiculous. Not only cannot samples of non- Council Accepted products be given out, but instead of trying to make a conven- tion a dignified affair and keeping out the side-show experiences, the AMA spends its time sending spies around to find out if a manufacturer is giving away free headache powders. Even if a physician personally requests a product which is not advertised, we can't give it to him." Three ethical drug manufacturers made these comments: "Conventions are terrible. Our own queries show that physicians regard con- ventions as holidays, and as the least effective phase of the AMA operations." "Conventions are terrible for advertisers. Besides too much midway activity, they are always out of the way. The point system, too, is very bad." "The midyear clinical session is a poor thing. It could be good, but it is al- ways in an out-of-the-way place. If you don't go, however, you get a bad spot in the main convention." One ad agency man complained of discrimination at conventions: "The AMA conventions are too much like county fairs. The point system is unfair and discriminatory. The ethical advertisers and exhibiters are unable to compete with the girly shows. The AMA is not consistent-it lets big advertisers do what small ones can't." The last comment on conventions which we are quoting, made by a manufac- turer of X-ray equipment, was concerned chiefly with samples: "The objective at AMA conventions seems to be to collect free samples. In fact, some of the commercial firms even furnish shopping bags with their name on the side as another means of advertising. "The conventions give the appearance of being tremendous affairs, crowded with people. As far as the exhibitors are concerned, however, the attendance is often not good, even in spite of the big crowds. At least half of the people who attend the conventions could not buy the products exhibited anyway. "It might help if the AMA could tighten up a little better as to who is allowed to attend the convention. They are not so big that they cannot be handled except in certain cities. The clinical meetings are always handled in other parts of the country, and this adds greatly to our expense. We dropped the clinical meetings this year." The question of inserts was mentioned spontaneously by the majority of the advertisers interviewed. About half of the advertisers expressed a definite dis- like for the Pfizer Spectrum insert because they felt that it gave Pfizer an unfair advantage over the other advertisers and because they felt it made the AMA the publisher of the Pfizer house organ. About a quarter of the advertisers expressed admiration and complete ap- proval of the Pfizer insert, and regretted that they had not initiated the idea instead of Pfizer. Roughly another quarter approved completely of the ad from Pfizer's point of view but felt that from the AMA's point of view, It was a mistake in policy to accept it, chiefly because if others followed the precedent, JAMA would end up as being a hodgepodge of house organs and editorial matter, with the reader confused as to which was which. One medical ad agency man made the following favorable comment: "Spectrum is a big help to the book. It dresses it up and makes it more in- teresting. The MD's will turn to It the way they do to OP and P~M. It helps the book in appearance and helps the advertisers because it brings on more iliterest and readership of the ads. The rest of the book ought to be as good." Four different ethical drug manufacturers made these comments: "I suppose the Pfizer insert is being criticized by a lot of people, but person- ally I consider It helpful rather than the opposite. I wish all advertisers would make their ads as interesting to the doctor as these Pfizer ads. I should like `to see a campaign to encourage advertisers to produce educational copy of this kind." PAGENO="0327" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5799 "I think the Pfizer ad is an excellent idea as long as it remains as good as It is, and I think it ~vill. Other advertisers can't complain. As a matter of fact, I think the greatest opposition comes from the competitors of JAMA, not from other advertisers." "The Pfizer ad is a decided relief from the rest of the magazine. It is the only bright spot in the book. The rest of JAMA should come up to it, both editorially and productionwise. It is probably the only thing in JAMA that the physician really enjoys." "It looks as though Pfizer now owns JAMA, but considering the high reputa- tion of JAMA, this isn't too serious a consideration. JAMA must sell space, and this is one way to do it. I have no objections to the Pfizer insert or to the binding-in of an insert of this kind. As a matter of fact, it somewhat dresses up the book. The trouble is, too many people will probably read `Spectrum' and not JAMA." Two different medical ad agency people made unfavorable comments about Spectrum: "This sort of thing can lead to trouble since the AMA is apparently publishing the house organ of Pfizer. Occasional inserts are okay, even as extensive as Spectrum, but should not be done regularly. It is a coup for Pfizer's ad boys, but it is bad for the AMA." "As for the Pfizer ad, many agencies and manufacturers thinl~ that it nullifies the effectiveness of their own ads. It is no answer that they can do the same thing. I'm in favor of anything that will make the doctors more interested in JAMA, but I don't think Spectrum does this. It Is also generally felt that there is AMA sponsorship of Pfizer in the sense that clearance was made easier for them." Three ethical drug manufacturers also made critical comments: "JAMA has sold out to Pfizer. It has cheapened itself. You get the Impres- sion that it will sell the whole magazine if anyone will pay for it." "The Spectrum ad is deplorable. The whole principle of accepting large in- serts from big companies is bad. Suppose other advertisers wanted to do the same thing? I feel sorry for the AMA. They are prostituting themselves. It doesn't affect us, however." "The idea of binding a house organ into JAMA is a poor idea because it de- tracts from the value of the book. However, if inserts of this type are accepted, they should be limited to number of times and pages. Otherwise, JAMA is bound to accept other advertisers' inserts like this, and will become a journal of inserts. In fairness to other advertisers, Spectrum should be dropped or others accepted. The latter would be preposterous." Other comments were offered regarding other advertising policies. The most frequenly offered one concerned the interspersal of advertising with editorial matter. About a third of the advertisers interviewed definitely stated that they would like to see ads interspersed, since they felt that this would improve the readership of the ads. Roughly another third stated that as advertisers, they would like to see the ads Interspersed, but they knew that the physicians would not like this change, so they were willing to go along with the present arrange- mnent. Another third stated that they were satisfied with the present arrange- ments, and did not want the ads interspersed. About a quarter of the advertisers felt strongly that there should be an Index of Advertisers. Though a large number of the people we interviewed did not explicitly state their stand on this subject, we received the impression that the addition of an advertiser index would be universally appreciated by the advertisers. An example of the comments made regarding mixing advertising and edi- torial matter is the following comment by an ethical drug manufacturer: "It's difficult to say what to do about the position of the ads. From the adver- tisers' point of view, of course, they should be interspersed. But from the doctors' point of view, they are better as they are. You would probably spoil the high standard and professional integrity of JAMA if you interspersed the ads." This suggestion, made by a medical equipment manufacturer, was also made by several others: "The Table of Contents is good on the cover. It could be made a little more artistic. If the book goes only to the GP, it is satisfactory as It is. But If It also goes to the specialist, the book should be divided into sections: compare it to Time magazine-that's sectionalized-national affairs, foreign affairs, etc.- PAGENO="0328" 5800 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY JAMA could then be sectionalized by specialty This applies both to the editorial matter and to the ads It would then be possible to have the editorial matter snore closely positioned to the ads A list of the individuals and firms whose opinions are repiesented in this report follows APPENDIX Companies and individuals interviewed Company Individual Title Abbott Laboratories, North Chicago, Ill. W. D. Allison Co., Indianapolis, Ind.~. -- American Home Foods, Inc., New York, N.Y. American Meat Institute, Chicago, Ill..... American Pharmaceutical Co., New York N.Y. Ames ~io., Inc., New York, N.Y Armour Laboratories, Chicago, Ill Ayerst McKenna & Harrison, Ltd., New York, N.Y. Batten, Barton, Durstine & Osborn, Inc., New York, NY. Bauer & Black, Chicago, Ill Back Lee Corp., Chicago, Ill Dr. S. H. Blackberg, Chicago, Ill Borchardt Malt Extract Co., Chicago, Ill. Branstater & Associates, Inc., New York, N.Y. Burroughs-Weilcome Co., Tuckahoe, N.Y. Chilcotte, Morris Plains, N.J Ciba Pharmaceutical Products, Sum- mit, N.J. Clay-Adams Co., Inc., New York, ~ Commercial Solvents, New York, ~ Doherty Clifford & Shenfield, Inc., New York, N.Y. Edison Chemical Co., Chicago, Ill Cortez F. Enlee, Inc., New York, N.Y.~ Ethicon Suture Laboratories New Brunswick, N.J. Fellows Medical Manufacturing Co., New York N.Y. B. Fougera ~ Co., New York, N.Y L. W. Frolich & Co., Inc., New York, N.Y. Geigy Co., Inc., New York, N.Y Gray & Rogers, Philadelphia, Pa Grune & Stratton, Inc., New York, N.Y Harrower Laboratories, Jersey City, N.J.. Arthur D. Herrick, consultant, New York, N.Y. Hoffman Advertising, Inc., New York, N.Y. Hoffman-LaRoche & Co., Nutley, N.L - Holland-Rantos Co., Inc., New York, N.Y. Johnson & Johnson, New Brunswick, N.J. Jones Metabolism Equipment Co., Chicago, Ill. Jordan Advertising Agency, Chicago, Ill - ICelley-Koett Co.; Covington, Ky Kiescutter, Associates, Inc., New York, N.Y. Paul Klemtner & Co., Inc., Newark, N.J Lanteen Medical Laboratories, Evans- ton, Ill. William Russell Paul Roder Emil Davidson John Croak Philip Reichert, M.D Dr. S. M. Edison John Johnson Mr. Sanford. Miss Vahl Robert Chase Charles Lewis Perry Stocker Ed Thomas. -- Henry Stratton Mr. H. Hettrick Arthur D. Herrick Harry Hoffman Mr. I. Content Leo Cole Mr. P. Hoffman - -- fMr. ~l Hart ~Dr. Jones Charles Jordan Frank Teamons H. M. Kiescutter I Paul Klemtner iPaul Potter R. C. Kocher Leo Hudson Leo & Febiger Co., Philadelphia, Pa ~Mr. Wilcox (Advertising personnel Lederle Laboratories Division, New David A. Bryce, M.D~ - -- York N.Y. Lewis h Gilman, Inc., Philadelphia, Pa~ Ralston Lewis Liebel-Flarsheim Co., Cincinnati, Ohio~ Vern Curran Eli Lilly & Co., Indianapolis, md W. F. Krass L. G. Maison & Co., Chicago, Ill Dr. L. G. Maison Charles S. Downs A. F. Hoop William Laurie Norman Draper B. E. Wallach Paul De Haen James Scheller Loren Simpson Robert Anderson George Percy Charles Glasser fDr. S. H. Blackberg IMiss Roberts John J. McKeen Henry Branstater Cles Baker Vice president in charge of adver. tising and public relations. Sales manager. Advertising manager. Do. Do. Assistant. Advertising manager. Do. Vice president. Advertising manager. Do Vice president. Advertising manager (specialties). Sales manager. Advertising manager. Presiddnt. President. Advertising manager. President. President. Assistant to Paul Klemtner. President. Vice president. Director of advertising and litera- ture. Advertising manager. Do. President. PAGENO="0329" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Companies and individuais interviewed-Continued 5801 Company. Individual Frank Madi DeForest Ely, M.D Henry McNeil jAlbert Carroll 1George Wolf 5 Dr. Chuning lMr. Stensby Harold Collins Miss Dorothy Noyes B. 3. Todd Harry Treace Mr. Griffith Mr. Braden Walker Mr. Sichler Mr. Chase Mr. Cotton Mr. Ferren H. 0. Ball Mr. Werner T. H. Vets Gerald Rorer Sam Fossle Dr. Charles E. Dutëhess~~ John McDonald, M.D.~ John Pringle John Scott Victor Filler Tobias Wagner William Hoel jMr. M. S. Herman lMr. S. J. Heinreck H. A. Wilt JJack Gauntlett lDr. E. G. Upjohn B. A. Fuchs Mr. Chiappini Charles Silloway Robert Wilson Dr. Frank Stockman 5 Mac Green lMr. Williams Title Sales manager. Vice president. Advertising manager. Assistant advertising manager. ~dviser.. Advertising manager. Vice president. Do. Director of professlonalrelations. Sales manager. Director of advertising. Assistant director of advertising. Assistant to Canadian manager. Vice president of L. W. Froblich Advertising Agency. Public relations director. President. Vice president. Advertising manager. Do. Advertising director. Vice president in charge of sales. President. Advertising manager. Executive vice president. Assistant to president. Vice president. Do. President. Advertising manager. Mattern Mfg. Co., Chicago, Ill Wm. Douglas McAdams, Inc., New York, N.Y. McNeil Laboratories, Inc., Philadel- phia, Pa. Merck & Co., Inc., New York, N.Y William S. Morrell Co., Cincinnati, Ohio. The National Drug Co., Philadelphia, Pa. Noyes & Sproul, Inc., New York, N.Y - - Ortho Pharmaceutical Corp., Raritan, N.J. Orthopedic Frame Co., Kalamazoo, Mich Parke Davis & Co., Detroit, Mich Pitman Moore Co Procter & Gamble Co., Cincinnati,.Ohio~ Professional Equipment Co., May- wood, Ill. William H. Rorer, Inc., Philadelphia, Pa. Sandoz Chemical Co., New York, N.Y.. Schenley Laboratories, Inc., New York, N.Y. Schering Corp., Bloomfield, N.J Julius Schmid Inc New York N Y 0 D Searle & Co Skokie Ill J. Sklar Manufacturing Co., Long Is- landClty, N.Y. Smith, Kline & French Laboratories, Philadelphia, Pa. E. R. Squibb & Sons, New York, N.Y.~ Testagar Co., Inc., Detroit, Mich 3. Walter Thompson Co., New York, N.Y. Upjohn Co., Kalamazoo, Mich U.S. Vitamin Corp., New York, ~ Henry K. Wampole & Co., Inc., Phila- delphia, Pa. W. R. Warner & Co., New York, ~ Robert Wilson & Associates, New York, N.Y. Winthrop-Stearns, Inc., New York, N.Y. Yearbook Publishers, Chicago, Ill PAGENO="0330" * 5802 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY APPENDIX IX A S~LUDY OF i~F'~)ICAL A.)VFRTISIhG ~TD THY A rPICtIT }9YSICLU~ "ART II * IHS i~HYS.ICIM1S' VIE'~POINT An Opinion Survey x4ade for the American ~redical Association * R1~COW~ENDATION5 ~) THE A~ERICMT MEDICAL AS~OCIATIOM The t1~o main purooses of this study iere to learn why JAi~A advertisinc' space sales have fallen behind those of JIEDICAL ECO1~TONIC.S and ODS~Y1 4EDICINE and how to reverse this trend; and to gather information which will be useful in promoting JAdA. The facts uncovered have oertinence in varying degrees to various depart- ments within the AiIA or"anization This section of the report attemots to summarize the significance of the findings to the Councils, the Business Office, and the 7iditorial Department. A. R1~COU1E1~DATIOUS TO Th~ COUNCILS lihe findings indicate that the crux of the problem of selling advertising space in AUA publications lies in the fundamental relationship between medical manufacturers and the Coumoils. The solution o~ this problem involves much more for the AiA than just adver- tising revenue it involves as well the future strength of the leadership which the A'~A can exert directly through the Councils on medical products, nomena~ure, and medical advertising. The medical manufacturer is torn two ways he realizes that the AMA' s restrain- ing influence on medical marketing and riedical advertising claims, through the Council 8eals of Acceptance, is beneficial for the industry over the long term, and therefore tends to want to supp'rt it; but on the other hand, he rebels against the restraint in specific instances, knows from experience that he can sell the ohysician on the product without, having the Seal, and can advertise it as he wishes throw'h non-Council-supervised publications The question of. whether or not to submit a particular product for Council Acceptance then becomes a problem of weighing the advantages of having the Seal against the disadvantages of requirements for J~cceptance and the limita- tion of claims in advertising, in the soecific ins1 ance The current trend seems to be for the medical manufacturer to circumvent the J.~ by taking his product directly to the physician without submitting it to the Councils. Because of this fact, the AlIA publications are to an increasingly large extent barred to him as advertising media, and therefore, he is neces- sarily relying more and more on 1~ and !~1 advertising pa2es to tell his product story. * by Ben Gaff in & Associates, Chicago, Illinois, August 31, l9~3. PAGENO="0331" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5803 The main reason for this trend is that the manufacturer knot a from exper~ence that he can successfully advertise and market non-Council Accented products as long as the product is not a controversial one, arid his firm name is well-established. To get Council Acceptance in such a case is to bind himself to the limitation of claims allowed by the Council, submit to ~~hat he con- siders say be lon~_drawn..out and excessively formalistic negotiations, and get in return an approval which he believes has little or no practical value. The solution to this problem facing the AN& seems to be four-fold: 1. Review the Council rules, make them as simple and clear-cut as possible, and eliminate all requirements which are not essential to the fundamental purposes of the Councils 2. Streamline the administrative procedures involved in getting Council Acceotancé so as to make it as easy and as quick as possible for the manufacturer, as long as he. meets the essential requirements. 3. Undertake a broad educational pro~ram to inform the American physician why the Councils exist, how they operate, and why the physician should be prejudiced in favor of products which bear the Seal, and why the physician should use generic names in writing prescriptions 1~, Have Council or other top AHA staff members explain to the~ medical manufacturers why the Councils exist and how they operate, what is involved in getting Council Accentarce for a product, and, why it is to the manufacturers' long-term advantage to getCouncil Acceptance whenever possible. This can be done through speeches at neetings of medical manufac- turers and advertisers, through direct mail, through ex- hibits at medical conventions, and throuEh presentations made to the manufacturers and advertising agencies by the AflA service representatives. In view of the fact that the per- sonnel of the manufacturers and agencies are continually changing, it must be a continuous and never-ending process UNLFSS TH~ A~4A TAK1 S POSITIV STEPS TO 1~V?~SE IW~ P'~ESE1TT TRT~ND, THE INFLIflNCE O~ THE COU?TCILS WILL COITINUE TO LESSEN AND THE JIEDICAL PROF~SI(W IJILL SUFFt~R THROUGH LCVER STAUDAROS OF ~EDICAL UAI~ETING A1"i) ADVERTISING. ADDITIONALLY, THE AMA WILL FI'~D THAT ITS PUBLICATIONS WILL ATTAACT A CO1~TINUOUSL1 DECI~&A3ING A1~OUNT OF ADVERTISI1G B ~ECOI4IICNDATIONS TO THE 3JSINESS OFFICE The survey of advertisers reveals an underlying belief on the part of the majority of advertisers that AMA space-selling and promotion methods have not kept up with the changing times and the changed comietitive conditiOns intro- duced by the growth of lIE and 1414 PAGENO="0332" 5804 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY The advertisers generally feel that the underlying philosopoy o~ selling of the MA is outmoded that advertisers no longer consider that the A~A is doing them a favor by allowing them to buy apace in the pages of its publica- tions They feel, moreover, that the AMA, to get their business, must resent evidence of the value of its publications as advertising ~eo~a, that t~e ad- vertising representatives should niake a positive effort to convince them of the value bf advertising in A~1A publications, and that the representatives should also give a level of service comparable to that given by the repre- sentatives of the competitive publications. Translating this into action, it means that the survey findings reveal the need for four areas of increased activity on the part of the business office: 1 Do considerably more, and better, direct mail oroniotion 2 Train service representatives better on knowledge of the AMA, the Councils, and their basic policies and methods of operating. 3. Give service representatives more and better presentation materials, so they will have an opportunity to help the ad- vertiser solve his problems, and can show him why Council Acceptance and the AMA oublications will help him more than ?E and NM, and other publications. l~ Exercise nore sales-management control over the activities of the service representatives, to make certain that the right firms are called on at regular intervals, and that the men in the field are given more and better support by the main office. Sections I through ~C of the physician survey findings iiill lend themselves for use by the business office both in the preparation of rersonal presen- tations by the advertising representatives, and for mailing as service pieces to advertisers. Moreover, there is considerable information which will fur- nish ammunition to the advertising representatives when competing against representatives of other ~ for the advertiser's business. C. CON~NATIONS TO ,TW~ JAMA E~)ITORS The JAHA readers strongly approve of the editorial changes made in JAIIA in the last three or four years. This fact should encourage the present editors to continue their program of JA .A improvement One suggestion offered for the consideration of the readers was strongly approved that of organizing the original articles in the Journal into sec- tions -- for example, pediatrics, surgery, etc. This is an editorial policy decision involving considerations of which the average reader is unaware and therefor the editors may be quite justified in not following the suggestion. If, however, there are no reasons militating against it, the adoptionS of this chan'~e would be approved by two-thirds of the readers. PAGENO="0333" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5805 Most of the pressure to take the Saunders' ad off the cover and to expand the index revealsed in the l9~O survey, was relieved by cutting down the size of the ad There is evidence, however, that the majority of readers would be pleased if the ad .iere entirely removed, and the snace used for even further expansion of the Index. One last supgestion involves basic advertising policy It is obvious that there necessarily exists a basic conflict of interests between the business office, whose nri~ ary interest is increasing advertisin' revenue and the editorial office, whose primary interest is in turning oit as nrofessional a publication as possible Often, what will increase advertising revenue will decrease professional standing. It is probable that at present, the AMA cannot afford to remove the Saunders' ad from the cover, even though a more detailed index would be welcomed by the readers. Even less, at present, can the AMA probably afford to exclude non-professional advertising, even though nearly two-thirds of the readers would prefer it ~ven excluding cigarette advertising, ihich is heartily damned by a third of the readers and substantially all of the professional ad- vertisers, will involve giving up sizable revenue It Is possible that raising professional advertising standards in the Journal may result in some coripensating increase from the professional firms It seems to us that the change should be a gradual one, the timing of which will be determined largely by the rate of advertising revenue increase from the increased sales efforts of the business office. The steps to be followed, as we see them, are: 1 Concentrate sales and promotion efforts on orofessional medical advertisers Accept non-professional advertising which is offered, but do not solicit it from new accounts 2 Ps soon as financially oossible exclude ci'arette adver- tising, and other non-professional products which tend to use pseudo-scientific or exa~gerated advertising claims 3. Remove the Saunders' ad entirely from the JAIIA cover, and expand the Index to occupy the complete cover L~ If and when the professional advertising revenues have been built up to the point where it can be afforded, establish the policy of carrying only professional medical advertising. These steos, premised as they are on increased advertising revenue from professional firms will probably require some years before complete adoption PAGENO="0334" 5806. COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY APPENDIX X ThP POND DU LAC SIUDY An Intensive Study of the Marketing of Five New Ethical Pharmaceutical PXO ducts in a Single Market, Resulting in Some Theory of Scientific Marketing and Service Programs for Action A Basic Narketirg Study made for the AMERICAN MEDICAL ASSOCIAflON* l9~6 CHAPI?R 1 OBJECTIVES The Fond du Lao Study Is Part of a Series In 19S0, Ben gaff in & Associates made its first study for the American Medical Association on Attitudes and Practices of U S Physicians Thward the Journal of the American Medical Association,~ This study revealed to the JAMA editors both the reading habits, and the favorable and unfavorable attitudes toward the Journal held by the various types of physician audiences constituting the overall JANA circulation The l9S3 Survey of Advertisers In the fali of 19S2, ~fr'. Thomas Gardiner and ~r. Robert Lyon of the AMA Business Office invited us to apply survey research methods to uncovering ways in which the sale of advertising space in JANA and other AMA publications could be increased ~ie outlined for them a two..~step study: A Study of Advertising and fr~o American Physician, Part I The Advertisers' Viewpoint, and Part II The Physicians' Viewpoint The utilization of the study findings netted the AMA a return of 36OO~ in increased pharmaceutical advertising for each dollar spent on the research The survey of pharmaceutical advertisers played a part in bringing about & number of policy changes the institution of an index of advertisers, the exclusion of cigarette advertising, and the eventual dropping of the ~8-year old Council Seal of Acceptance Program The 1953 Surv of Physicians The survey of advertisers also served as a pilot study in orienting the general survey of physicians on the channels of product information, which comprised the second part of the study This Physician Survey furnished the information released by the At4& Business Office to the pharmaceutical industry in a series of 20 mailing pieces, the last of which was sent out the end of 1955 This survey was designed to give information on: the U. S. phy3ician market; how physicians learn about new products; comparable information p. 1 ~by Ben Gaffin & Associates, Inc., Chicago, Illinois PAGENO="0335" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5807 on detailing, house organs, other direct mail and the medical journal as advertising media, attitudes of physicians toward Council Acceptance; JANA as an advertising medium, the Pfizer Spectrum insert, nhysioian ratings of the nine AMA special journals, and attitudes of physicians toward some JAMA editorial and advertising policies. Designed as it was, it was necessarily more b~'oad than deep. D~ding on Another St~~y Throughout 19S14, discussions were held on the advisability of designing another study to serve as the basis for a second series of mailing~ pieces by the AMA to the pharmaceutical industry, The most promising tocic for intensive and thorough exploration was the pay~off question of "How Physicians Learn About New Products." This question is a vital one, since the pharmaceutical industry annually spends around ~l3O,OOO,OOO a year with almost no factual knowledge on which to base the allocation of this huge expenditure. The Proposal on the Fond du Lao Stud~y In September l9~L~ we submitted a "Preliminary Proposal" for an Intensive Study of the rmrketing of Some Pharmaceutical Products in a Single Marketing Area" to Mr. Gardiner and Mr. Lyon of the AMA Business Office. The Objectives As We Started Out The objectives of the study, as far as the pharmaceut~.cal advertisers was concerned, were given as follows "To uncover, in as much detail as tossible, all rel `~ant facts which have a bearing on the sale of a particular brand of the selected new and established products over competitive products, in this specific market. In other words, we will study the factors which have motivated the physicians to prescribe the specific drugs `they prescribe, the factors which have motivated the pharmacist to stock the particular drug and comnetitive ones, the factors which have influenced the hospital in selections of specific drugs to use; and how much each of these three groups influence each other; and the relative weight of the influence of each upon each other. "Among the specific influences upon the doctor, the nharma~ist, and the hospital, we will attempt to study the nart played by the commercial communications channels, detailing, direct mail, and medical journal advertising; and the relative influence of the professional channels; journal articles, medical society papers, hospital news, word of mouth, etc. pps. 1 and 2 by Ben Gaff in & Associates, Inc., Qiicago, Illinois PAGENO="0336" "As in any sound research project, we will attempt to uncover general principles from the study of this particular local situation which may be applied in the future in such a way as to increase the desired results following from the application of this new knowledge," The proposal then went into the reasons for the selection of this particular area of knowledge to study "Th our knowledge, no previous study of this type and scope has ever been undertaken The area covered is a most fundamental one on which all major marketing decisions are based It is, moreover, our impression that less is known about this particular area than in any of the less important areas, though there are more divergent theories, `seat of the pants' decisions, and pet hunches follo~ed in this area than in any other. "If this study reveals a tenth of what we have reasonable hopes of learning, it will enable the American !4eaical Association to perform a service f or the industry of such magnitude that the industry will be very mindful of AMA publications whe'i setting up aavertising media al lo~'ations " 5808 COMPETITIVE PROBLEMS IN TIlE DRUG INDUSTRY p2 by ~3en Gaff in & Associates, Inc., Chicago, funds PAGENO="0337" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5809 A STUDY OF MEDICAL AtiVERTISING ANI) THE A1~iERICAN PhYSICIAN PART II. THE PHYSICIANS' VIEWPOINT An Opinion Survey Made for the American Medical Association CHAPTER VXI ATTITLDEC OF PHYSICIANS TOWARD COU~ CIL ACCEPTANCE From the survey of advertisers, we learned that the majority of medical advertisers believe that physicians attach little or no importance to the Council Seal of Acceptance in the case of a product which is not dangerous, especially if the manufacturer is well-known and of good reputation. Medical advertisers generally believe that the Council's Seal has considerable value in the case of a new, potentially dangerous drug, or any drug put out by an unknown firm To learn the facts about the attitudes of physicians to~ ard Council Acceptance, we asked them three questions "When learning about a new product which is not particularly dangerous, do you usually have any special interest in whether or not it is `Council Accepted,' or doesn `t it make any difference?" "In the case of a drug which is not particularly dangerous, would you feel safer in prescribing it if it had the Council Seal of Acceptance, or wouldn't it make any difference" "Which do you think is usually of greater importance to you in connection with a new drug - the name of the manufacturer, or the fact that the drug has the Council Seal?" On the first question (see Table 48), the answers of physicians as a whole broke down as follows: 71% have special interest, 27% makes no difference, 2% qualified or other There are some interesting variations on the part of special groups from this national average The physicians who write over 100 prescriptions per week were considerably more inclined to be interested in Council Acceptance (85%) than those who write fewer prescriptions The full-time G P is more interested (77%) than the full-time specialist (68%). The physicians of 40 and over were more interested (73%) than those under 40 (65%) Geographically, physicians living in the East were the least interested (67%), while those in the South expressed a considerably higher interest (average, 79%) Physicians living in cities under 100,000 were considerably more interested (76%), than those living in cities of a million and over (62%) p. U?, by Ben Gaffin & Associates, Chicago 4, Illinois, August 31, 1953 81 2800 69 pt 14 22 PAGENO="0338" 5810 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY APPENDIX XI A STUDY 01? MEDICAL ADVERTISING AND THE AMERICAN PHYSICIAN ~PRT II. THE PHYSICIANS' VIEVPOINT An Opinion Survey Made For the Pmerioan Medics]. Association There seem to be no pronounced or consistent differences on the basis of variations in exposure to commercial advertising channels. On the second question (see Table 49), the breakdown was as follows: 79% would feel safer, 20% makes no difference, 1% qualified or other. The same relative differences between various groups holds true on the answers to this question as on the preceding The third question (see Table 50), produced the following overall breakdown 55% Council Seal is more important than the name of manufacturer, 33% name of manufacturer is more ir~ortant than Council Seal, 5% they are both equally important, * 3% other factors are more important than either, and 4% undecided There are some differences between the national average and the averages for special groups which one would not expect from the answers to the two previous questions Twice as many physicians who wrote the largest number of prescrip- tions consider the Council's Seal as of greater Importance than the manufacturer (60% vs 30%), among those who wrote the fe'? eat prescriptions, this difference dropped to 48% vs 39'~' Full-time G .P. `s were highest by type of practice (57% for the Council Seal vs. 34% for the manufacturer), and Internists attached most importance to the Council Seal (66% vs 28~' manufacturer) of any of the specialities Most surprising, the physicians under 40 attached relatively more importance to the Council's Seal (56% vs. 35%), than did the physicians 60 and over (53% for Council Seal vs. 31% for manufacturer). As in the preceding questions, the small town physician living in towns under 10,000 population was relatively irore impressed by the Council's Seal (62%) than by the name of the manufacturer (31%). pps. ll7~-ll8, by Ben Gaffin & Associates, Chicago 4, Illinois, August 31, l95~ PAGENO="0339" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5811 APPENDIX XII THE FOND DU LAC STUDY: AN INTENSIVE STUDY OF THE MARKETING OF FIVE NEW ETHICAL PHARMACEUTICAL PRODUCTS IN A SINGLE MARKET, RESULTING IN SOME THEORY OF SCIENTIFIC MARKETING AND SERVICE PROGRAMS FOR ACTION A BASIC MARKETING STUDY MADE FOR THE AMERICAN MEDICAL ASSOCIATION, 1956 By Ben Gaffin & Associates, Board of Trade Building, Chicago, Illinois CONTENTS Foreword. Section I. Introdiuction to the Fond du Lac study: Chapter 1. Objectives. Chapter 2. Methods and procedures. Chaj~ter 3. What the study means. Section II. Description of the 1~'ond du Lac market: Chapter 1. Fond du Lac as a consumer market and medical service area. Chapter 2. How Fond du Lac physicians keep current on new drugs. Section III. The marketing of five new ethical pharmaceuticals, and what happened to them in Fond du Lac from the product point of view: Chapter 1. The story of Ciba's Serpasil. Chapter 2. The story of Eaton's Furadantin. Chapter 3. The story of Geigy's Butazolidin. Chapter 4. The story of Lederle's Achromycin. Chapter 5. The story of Upjohn's Pamine. Chapter 6. Some questions raised by the stories. Section IV. What happened to the five new ethical pharmaceuticals from the market's point of view: Chapter 1. Fifty-five physicians and how they accepted these five new tools. Chapter 2. Thirteen pharmacists and the addition of these five new inventory items to their stocks. Section V. An approach toward a science of ethical pharmaceutical marketing developed from the Fond du Lac study: Chapter 1. The idea of scientific marketing. Chapter 2. The first principle: The reputation of the company preconditions the market's reception of the product. Chapter 8. The second principle; The product determines Its own market. Chapter 4. The third principle: The market for the product exists in terms of the physician types who will understand the product, and need it. Chapter 5. The fourth principle: Each physician type has its own motivations, and promotion of the product must be based on the motivations of the types who con- stitute its market. Chapter 6. The Fifth Principle: For Each Product There Is an Ideal Budget: Falling Short of It Delays Success and Exceeding It Is Wasteful. Section VI. Designing a Scientific Marketing Program for Your Product. Chapter 1. A Checklist for Designing Your Next Marketing Program. Chapter 2. The Rewards of Scientific Marketing. PAGENO="0340" 5812 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY (The Fond du Lac Study: An intensive study of the marketing of five new ethical pharmaceutical products in a single market resulting in some theory of scientific marketing and service programs for action-A basic marketing study made for the American Medical Association by Ben Gaffin & Associates (full text) FORgWOI The Fond du Lac Study has been sponsored aiit financed tv the American Wedical Association as the second in its series of basio studies in phar. maceutical n* rheting undertaken as a service to the pharmaceutical industi~. The first study, also undertaken as a service to the phar' maeeutical industry, was titled "Advertising and the Pmrican Physician" Completed in 1953 by Den Gaffin & Associates, it was made available as a series of twenty mailing pieces sent to pharmaceutical companies by the American ~bdical Association. The earlier study oxrphasized, if it did not discover, the impc*taoce in physician education of pharmaceutical adver' tisin.g and promotion to the medical profession. It revealed that physicians receive a large proportion of their post' graduate medical education from the advertising and detail' trig which are paid for by pharmaceutical companies. The present study, through intensive investigation of the marketiri.g of five new ethical pharmaceutical products in a single market, attempts further to help pharmaceutical companies develop more efficient methods of promoting their products. Is,J~istribution Still Too G~et,~? The 1939 Twentieth Century Fund study titled "Does Dist,ribution Cost Too L~uch'1" indicat~d tl~at distribution cost paid by drug r~inufacturors was the highest of any class of products and that three'fourths or more of the retail price of a drug was going for costs and profits in the various stages of distribution. If one asks today, "Does pharmaceutical advertising still cost too mush?", the ansiier must be that any unmcessai~ cost, any waste of money spent for promotion and distribe" tion of phariiacoutical products is "too mush" `hat part of the ~l3O,COO,0OO spent on medical advertising this year vill be i:asted is another cuestion, but it must run into 8 figures. The American )`odical Association, as the most iqortant single influence in the field of zr.ocLtcime, is recognizing its leadership responsibilities to the public, to the physician and to the pharmaceutical industry in sponsoring this series of basic irarl'eting research studies B7 help' jug the pharmaceutical industry do a more effective pro' irotion job at decreasing costs, it helps make the promo. tional efforts more useful to the physician 4th 3iess waste of his time and it helps the public obtain better drugs it loser cost. PAGENO="0341" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5813 Fb~r"~ceutical )isrkstin~~P~sear~ Marketing and cpinion research is a new field1 which the pharmaceutical industry is just beginning to discover. Yet, although this industry has been sa~what slower than eons other Industries to discover its value and uses, ther. is every indication that the pharmaceutical industry is n~ learning acre at a faster rate abeut the real possibilities of marksting research than other industries ~diioh have been using it for twenty years or mars. !.t, the pharmaceutical Industry is spending only tenthe of mile for mar1cst~ jug research compared with thousands of doliers for laboratory and clinical research. The pharmaceutical industry has recognized the importance and used for product research as no other industry has. It annually plows basic into the devolopsont of new products a greater percentage of its earnings than does any other industry. La the pharmaceutical industry learns more about the benefits of ma ting'ren3arch, this great d.tscropancy in allocation of research funds will be adjusted. Efficient marketing will be granted more iinpcr~'tance than before in the industry's total contribution. ~inrch Philosopj~y The pharniceutical industry is entering into markot and opinion research at a sufficiently advarcod stage that it can avoid cone of the pseudo. scientific fade and escape so~ of the faulty generalizations of fledgling rescarch efforts. The Fond du Lao Study can holp the industry develop a sound philosophy of market and opinion research. The ccrn3retozw of this philocophy is the appreciation of the individual and the recognition that all markets are people. The Fond the Lao Study shc~,s thet there is no such person as an "ovorag3 doctc?". Tao industry will coo that its promo- tiona]. efforts are not directed at "the krarican phyaician" but to all or port of the 160,000 individual hunan beings who are also physicians. Arrf categorization of thuse individuals ie made oolely for the convcnier.:e of people who have to deal with there. Although such cate~ories may be usoful, it must be remambored that they are baoically arbitrary the 160,000 individuals and not the cato~or1ea are the reality. In studying iran, it is either convenient or faehionab]a soma- tietee to view him through the eyes of the poychologiot; scoa' times through the eyes of the econcirnist; euzretiiuas through the eyes of the sociologist; the anthropologist; and the historian. ~e can and somatimas we have to use the tools of the various sciences, but we should not mahe the mistake of confusing what is only the man made categories of the specific social* scienc, with the actual persons. PAGENO="0342" 5814 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY ~ IT*1i44Ia4 1~op3~ Each one of th.l6O,OOOpI~siciane inthe U.S. I. first .ndfcronost individual human bdxtg. He starts in lif, with a physical make-up including glandular s*zucture, which gives him a certain tmpsr mient and predispositions which are the heritage of his ancestors. He rows up in an individual faintly environment ~there he is exposed to certain cuitmal, social, psychological, educational end other influ- ences which me)d his views and attitucbs and behavior patterns, and to cain extent modify the organic struottwe through which ha acts. After receiving a basic educa. tion in his local environment, he is oxpocad f or several years to the stu4y~ of the basic sciences, and then j~on several more years to clinical studies. After a year or more of apprenticeship, be begins to have other human beiri~s c~ to him for treatment for physical or emo~ tional difficulties. After ha finishes his n~dical scheol, he seldom or mayer gets any additional formal education. Moat of the na~ ideas which he gets conie from reading, from formal or informal diocusoions with other doctors, from printod advortioin3 to which ha is exposed, and to a larr~3 c~tc~t, from detail men from various plurnaceu-' tied firz~ with wham ha talks for a few minutes nearly evo~ day. a human being, ha is comparatively quick or coxe- ~xiratively clc~:; he is cozparativoly hardworking or he is co~p~ativoly lacy; ha is fricndly or crabby; social or cdlitaiy; happy or unhappy. His morning contacts with his wife and childron affcot Sn a groator or leesol' deCrce his attitude tc~zard patic~its, toward co-workers, and toward dotoil men, lie bade towpcrc~ant, modified by his daily intcrpcrsonal rolation3, inf]xemco all his actions aid attitudes to come extent. His hw.en..bcingnacs is modified by his being a physician. As a phyeician, both society and ha himself cat up scan principles of belief and behavior which tend in cortain recpects to make him more like other physicians than like other groups who have different basic intorests aid approaches to life. We can safoly make a number of generalizations about all human beings as human beings, including that they are social animals rho are happiest when they have the reopoct and affection of the people around thea. PAGENO="0343" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5815 We can safely make sa~ generalizations about the 160,000 human bein. whe are the practicing physicians in the U S.s that as physicians9 they tend to be idealistic, and that taken as a ~g they tend more to be motivated hy helping mankind than do other groups1 such as~ used ear dealers. We can make further, wYe specific generalizations about physicians cm the basis Cf types cI practice; For e~cainple, that the internist usually tends to be more of a student and ~o be somewhat more motivated by scientific proof than is the dispensing general practitioner. V~ must always resezaber, however, that these are generalizations which us have made only fcr our own convenienee, that the individual physician is the ultimate reality, and that we must make our generalizations fit the individual and net vice versa. ~jvreciattoj~ ve wish to acknowledge the very generous cooperation whioh we received from nearly everyone we approached. PTe are especially grateful to the ~iba~Eaton, Geigy, Isdor and ~ managements and detail nen, who furnished information requiring conaiderab]13 of their tine ant efforts. ~e also thank the people in other pharmaceutical companies whose conanents and counsel helped in the devolopment of the study. Xncidontally, we ]narned in the course of our research that there are no secrete in pharaacaut.ical marhoting. Any firm ~ individual ~tho is willing to go to the tine and oxponao of collecting it can got nearly any informa. tion about any p'~arutacoutical company cr the marketing of any existing pharmaceutical produet. 3, of course, included products only of companios that wore willing to cooperate in the study. Vie thank the officers end irm~aors of the Pharmaceutical Advertising Club of Law York uho gave coumaol and took a continuing in~oroct in the study. ISoat of all, we want to thar& the physicians and p~tarm~aist.s of Fond du Lac, `asconoin, who wore as hospitable in giving of their tine and help in the intervic is ~`o alco thanic the interviovers who workad with us on compLeting the background and d~pth interviews with the phyoicians and pharmacists, and the men from the Univoroity of Wisconsin School of Pharmacy rho made the proscription audits. Finally, we hope that this report will satisfactorily repay the Aserican L~dical Association for its financing of the Fond du Lee Study. o ap- preciate the patience of its executive staff in allo'~ing us the tAme in which to dovelop a thorough report. B~n H. Gaffizs Ban Gaffin & Associates, Inc. Chicago, Illinois t~3y 15, 1956 PAGENO="0344" 5816 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY SECTION I. XNT1~0DIJCTION W TN~ FOND DU LAO STUD! CHAPTER 1. OBJECTIVES The Pond dtt Lao 3tu~ I. Part of s$eriea In 1950, Ben Oaf tin & Associates sods its `first study for the Merican Medical Association on Attitudes and Practices of U. S. Physicians Toward .the~Journal at the American M~diod Association. This study revealed to the JAMA editors both the reading hahits, and the favorable and untavor'. able attitudes toward the Journal held by the various types of physician audiances constituting the overall JAMA circulation. o 1951 Survei of Advertie~rt In the fall of 1952, Mr Thomas Gardiner and Mr. Robert lyon of the AMA Business Office invited us to app3y survey research methods to uncovering ways in ~hich the sale of advertising space in JAMA and otter AMA publi- cations could ha increased. ~e catlinsd for them a two-step study: A Study at Advertising and the krican Physician, Part I The Advertisers' Viewpoint, and Part II The Physicians' Viewpoint. Th3 utilication of the study findings netted the AMA a return of 3600% in increased pharaa- coutical advertising for each dollar spent cm the research. The eurvcv of pharmaceutical advertisers played a part in bringing about a nurabur of policy changes: the institution of an indax of advertisers, the exclusion of cigarette advertising, and the eventual droppiri~j of the 5~-'yoar old Cc~incil Seal of Acceptance Program. ~ The survey of advarticora also served as a pilot study in orienting the general survey of physicians on the channels of product information, which co'ip iced t)a second part of the study. This Physician S~zrvcy furnished the inforra~tion released by the AMA I~ioinccs Office to the pharc2aceutical industry in a series of 3) mailing pieces, the last of which was sent out the end of 1955. This survey was dosignod to give information on: the U. S. physician w~:ot; how physicians loam about new producto; coitparablo information on d3tailing, houo argana, other direct nail and the medical journal as advertising it cia, attitudes of p~iyoicians to iard Council Acceptance; JAMA as an athertising medium; tb Pfizer Spectrwa insert; pltjeioian ratings of the nine A~A special joui nJ.c; and attitudes of physicians toward sm~e JA CA editorial and advertising policies Designed as it wac, it was necessarily noro broad than deep. ~ St~JJ Throughout 1954, discussions wore held on the advisability of designing another study to serve as the basin for a second series of mailing-pieces by the AMA to the pharmaccutical Lnduetry. The moat promising tcpic far intensive and thorongh exploration was the pay-off q~~ation of "How Physicians Learn About t~w Produsts". This qieeticn is a vital one, since the pharmaceutical industry annually spends arc 0,000 000 a year with almost no factual knowledge an which to base the a oca cm of this bigs expenditure. PAGENO="0345" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5817 ~t1ropoge1 en i~h~ Pond du. Lao Stu1~ In. September 1954 se submitted a "Prelim1nai~ Proposal' for an Intensive Study of the Marketing at Some Pharmaceutical Products in a Single Marketing Area' to Mr. Oardtner and Mr. I~ron of the AMA Buaine8s Office. ~Obienttves I, ~Te $tarte4 Out~ The objectives of the study, as far as the pharmaceutical advertisers was caicermd, were given as follow~ !To uncover, in as much detail as possible, all relevant facts ubich have i bearing on the sale of a perticular brand of the selected nei and established products over * c:.petitive products, in this specific market. In other words, we will study tha factors which hawe motivated the physicians to prescribe the specific drugs they prescribe the factors which have motivated the pharmacist to stock * the particular drug and cc titive ones; the factors which have influenced the hespital in selections of specific drugs to use; and ho, much each of these three ~oupa in' flucnce each cther; and the relative weight of the influenci of each upon each other. `Among the specific infli.~nees upon the doctor, the pharmacist, and the hospital, no vzill attempt to study the part played by the cc.Qrcial u~iccticns channels; detailing, ~3irect mail, and cacc3ical journal advartising; and the re]~ ativo influmce of the professional channels; journal articles, medical society papers, hospital ness, word at mouth, eta. "As in any sound recearch project, wo will attempt to uncover gcrioral principles from the study of this particular local situation thick cay be ap~Ucd in the future in such a way as to inc~oacethe ck~aired rc~ults follo~iing from the appli~. cation of this now kno4cd~e." The propoøal then went into the reasons for the selection of this partic ular area of kno~rledge to studys * "To our knowledge, no previous study of this typo and scope has ever been undertaken. The area covered is a most fundamental one on `~thich all major marketing docisiona are bacod. It is, csrcover, our impression that less is known abeut this particular area than in any of the loss important areas, through there are more divergent theories, ~ of the pants' decisions, and pet hunches, foUo~ied in this. area than in any other. 11f this study reveals a tenth of what we have reasonable hopes of learming, it will enable the An3rican Medical Association to porfaria a sorvic3 for the industry of such mageiitude that the industry will be very mindful of AMA publications when setting up advertising media allocations.' PAGENO="0346" 5818 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY ~inht Awaro~che~ The proposal then recommended developing a series of separat. drug case studies, 4th the marketing of each product studied from eigt~ separat. approachess (1) the marketer and thC pecgram which he developed for the drug (2) the detail wan and what he did in the specific market (3) the sales audit to enable us to trace prescriptions to specific individual physicians (4) the pharmacist, and his comments, criticisms and suggestions on the product marketing (5) the influence of the hospital on the marketing of the products (6) the influence of the local medical society cc the marketing of the product (7) the influence of the clinics cc the marketing of the product (a) the influences acting on the physician: "Intensive Interviove `4th tho physician possibly a series of interviews will be required will uncover in as much d3pth as possible the various factors which have influenced the physician in his personal use and prescribing of the products. Among these in. fluencee wilt be the formal onoa the detail man, direct nail advertising and journal advertising. There will also be the informal influences word of mouth con=ente of other physicians, hospital staff xeaetinge, etc.N ~bj~octive~ As Ye &e ~Tiom ~ In retrospect, now that the Fond du Lac Study is coapletod, uo feel that wo have more than accomplished tno original study objectives It has been the most complex study ~re have undertaken, both because of the an. bitiousnone of our goals and becauze of the tremendous amount of data of all kinds 7htch we accumulated, which have reouired months of study. W would now add th~ following objectives to the list of thone e~e contemplated originally. To describe the m~koting of new pharmaceutical products from two points of view -~ from the viewpoint of the mew product and from ties viewpoint of the market. lb determine as tar as possible why and ham, the reception givon different types of phorinecouticul produots differs so widely. lb analyze why a certain few doctors account fcr the balk of ties prescriptions for one drug and another group for the bulk of prescriptions faa' another drug. PAGENO="0347" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5819 To bring the findings together for a final objective ee veu]d seek the general principlss that aigI~ be applied to the marketing cf other new drugs even to the developx~nt cC a fcrmula to be used as an advance cheek list for scientific marketing. Ira the following sections at the report it 411 be seen that the Pond d* Lea Stu4y furnishes a basis for advancing knoalodge along the lines at .11 the objectives we have mentioned. ~e ~uld be the last to say that this one study contains all the anevmrs, or even~ a single final. enseer for any one objective, but it does give better understanding of a]] at then and underscores what, once stated, nay appear to be s~.e colt. evident truths. PAGENO="0348" 5820 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY CHAPTER 2. MEWOW AND PEOCRXRES The Fmid ~a Las Stu4y was authorised the and of *Septeiabor 1954. ~twse* the suthca'izetion of th. stu4 and our talk on the stu~ to the Pharaacsu. tical Athortising CLub cC Eaw York in Aril 1955 the following stu4 st.j* were con~lat.ds ~~oct&~on of the 1farkst&~~~j It was decided that the marketing ares would have to ha located in the Middle ~~3et, since each of the othez' geographical areas seem to possess stronger regional characteristics. Several dozen potential markets were considered and discarded becazee of various factors which would have mad the compLLotion of the field work inca's difficult or impossible. Wisconsin was recommended by Dr. Frank Dickinson of the AUA on the basis that it has one of the best state medical statistical reporting offices in the country. Mr. Earl Thayer, the Public Information Director of the Wioconein State L3d.ical Society, discussod poasibilitios for selection and finally concluded that the Fond do Lac area was the beat oco for our purpocea, since it is reasonably clone to the U S average in terms of population per active physician (U. $ 958, Oehkooh, Appleton, Fond do Lao, Primary Center, 1180) hospital beds per thow3and population, prow portions of various sp3cialtios of physicians, mixture of agi~icu1tura1 and ~ndx~atria1 eaiployzront, and lack of predox:iinating nationality extiac. ttcno. ~i1-3 fact that this community is insulated from strong university influonco, though not icelatod; the fact that noarl,y all of the doctors in the a~roa ore on the staff of the scan hoopital, belong to the sana county mocitcal ecoiot.y, and in gonoral are oxpocod to the same influences to a mmoh more equal degree than in other markets that were considered all of theco factors lcd to choice of Fond du Lac. rrj~vi"itic'nrrth,Pc~'ddoLnc Larket A prelinirary irrzoctigation of the war~oting area was male, statistics v ore ga~J ercd ci the c poaitic~i of the maricot and intorvioi a wore made with OaC'~& of tie ll~ pIi~aciao in the aroa, all but ore of which agreed to ccop~rato on the study. V~'a harmed from oth,r courcos that this cais excop~icn accounted for probably fewer than ten proocriptions per month. The fact that the study director had livod in this test. mer~ot was of conaidorablo help both in understanding come of the influences which might not have otherwise boon undoratood and in obtaining the cooperation of the laige nL~.acr of people without ~hcoe help the study would have boon irnpoeaibl~s. szr~Lci~4 o~~4t'U inofaotu~~ On the basis of our talks with the Pond do Lao p'iarmaciets, we made a prolininary list of fourtece druge in varicme fields of therapy which coc~:d cuitabb on a tcntative beats. ~Va than discussed the concept of the study, Fcad du Inc as the tentative market in the study, the list of tentative druga, and the willingness of the manufacturer to coopc~ate with fourtoon advertising managers of pharinacautical mansfacturing firma. Mr. Ittchard L. Ilull of Smith, Kline & French was very helpful on review. ing the tentative drug cobectione. As the reault of these talks, final selection of the druga to be studied was lade PAGENO="0349" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5821 ~~yoj~rin~ 3t tPl.pn en4jrocedu~ Mart people with whota we discussed the stuty during the following weeks eads helpful sug~3stior$ regarding the study plan and procedures. ~ceg these were fr. Gorald L. long and Mr. Spencer K. Foseell of the New York Pharmaceutical Advertising Club. During March and April & 1955 we finalized the study plan and procedures. Y1 decided first to interview each cf the 55 physicians using a formal questionnaire which basically covered the sane information as that in the 1953 national study on advertising and the American physician This ques~ tionnaire was modified to include questions regarding the specific drugs to be studied. We planned also to audit prescriptions in all Fond dii Lao pharmacies to end up with a separate IEI card for each proscription on the five dru. we were studying and the principle co.iipotitive drugs in each at these groups. Fj this mthod we could analyze not only the total sales figures for each drng but aloe hy individual physicians and we could study practices of individual physicians regarding the drtigo separately and in relati&t to each other. Arirod with the b~ckc~'ound inforniation on each physician, and with a tabis eho~ming what prescriptions the physician wrote during the audit period, we would thcn ga back to the ptiynician for an inforril discussion interview cLring which wO would probe into the factors which lcd him to do what he did. In A~ri1 1955 we c~linsd the final otuly plrno in a talk to the !.ow York Pharcacau4col Advertising Club ~ The physician bacL~~ound intorviewo acre cosoloted during L~y 1955. Tb qr~tiOr13 ac ~cd in th bac'c~round intorvior3 are roproc~..c~d bob', `fl~e boc' lot roforrod to in the q~ctio-3 was moroly a convcni~nt r.thod of placing the lic~ts of ac~.'orticin~ ndia, dru~e, nadica]. journols, and pharw~acz~utical cornpciy houns organs, in front of the physician for his consideration PAGENO="0350" 5822 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY ~~~sj°j~fl !ackçound Int.rutew 1. There are so nynew Iru.beingdevelopedtoda'thatitSa hardf~ a physician to )csp current. Which c~s c( the methods listed on the front pags of this book]øt ds you find aicst important to you person" ally in learning about new drugs? ADVERTISING Di MEDICAL JOURNAlS NATI~IAL UD)ICAL CONVENTXOI~ COUNT! MEDICAL MEETINGS PAPERS Cit ARTICLES IN JOURNAlS TETAIL MEN STAY? MEETINGS AT HOSPITAL DIRRCT MAIL FROM IEUG FIRME 2. IyoudltwrntothesecondpeIeof thatbocklet,youwillfiflds list of drugs. Thich ones of thea tuve you prescribed? FUflADANTIN ACHRO!S!CD1 PAMDIS SERPASIL J3UTAZOLADIN 3. Since they are all fairly i~w drugs, can you tell me what mouth yea first p~hescribod thea? 4. Where did you happen to g~t the information about ______ which led you to proscribe it? Mywhere else? 5. As you raantnbor it, which of the five drugs have never been discussed. with ycu by detail men? 6. t~ich of the six drugs have you ever received as samples? 7. 0th~r thc~ the sar~1~o you recoive, do you ever dieponse drugs your~ self instead of writing a dru~iat'e prescription? S. (I? "YES"): Which, it any, of those five drugs have you diaponcsd yourself? 9. In writing a prescription, hew do you usually designate it by trade~narno, anna of mcnufacturer, or hew? 10 About how many prescriptions did you happen to write in the last Decides the medical profession's efforts, medical manufacturers spend about 160 million dollars ovory ysar to inform physicians about n~w developetonts. By anc~:oring the fo1lc~iing qu3ationa as accurately as possible, you can help have this money spsnt in ways that will do physicians the most good. 11. 0! the four sources at information from manufacturers, which one do you find ~ for learning about now products in~!oal journal ad~rtising, co~c*y periodicals, dot.ailing or direct mail? 12. Which do you consider ~ worthehile to you personally? Now I'm going to ask e~a questions about your reading of medical journals and publicatione. We roalis you have littic or no tins for reading, and that it is probeb],y intorruptod. But cnn if it is bard for you to do, p~r' t oanir~,a' t~c3q te~,a~Curat2~End as com~bto]y~~ po'~b1e.~ %~catio~w3.ar3 I~ctqI~tO proj~ct i~h~~e tigü~e. PAGENO="0351" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5823 33. On tI~ third par. of tl~ booklet there aa liet of 35 s~dtoa1 pub' 1icatio~ * 1~hich of theee do you happou to read's? AI~IaCAI~ JOURNAT~ 0? M1~DICAL 8~ISNCi AI~RICAN JOURNAL OF SURQ~RT A1~RIOAN JOURNAL 0? OBST~TRICS & GZNEOCLOG! AflNA][3 07 Ifl~Z~~JAL IIFjDICDJI: ANIIALS 0? SUR~~T ARCHIVES 07 IN~RNAL MEDICINE ~JflREN? MEDI~AL DIQ~S? 0. P. JOURNAL O~ TUE A1~ CAN W~DICAL ASSOCIATION MEDICAL ECO~OUIC3 VOIEE~ L!I~DICINE L~DICAL TIMES PEDIATRI~ su'~a~nr, cri~coLoar & OESTUT}~(~ SURGICAL CLINICS OF ?~OItTH AMERICA 14 Thich of thee3 publicotione on the list have you happened to read or look throurjh during the ~ct~3O4ay~? 15. Pi~o~* tI'o pcint of view of ueofulncas in your evoryday pra~tice, which ore of thc:a pL)licatjcne on the list do you coneidor moat valuable to you parc~na11y? 16. rhich put~lication do you feel moot ~ y~b~u~ to røad? 17. Y~'hich publicatiàn do you ~ reading the moot? 18, You no do~~bt kno-, that the AUA has diecontint~ad ito Council Seal ot Acccptanco Do you think they should have dropped the Council Soal, or not? 19. T~y do you say that? 20. Do you hap~'en to read the Journal of the Anorican I!odical Associati~i ________ that is, at beat half the ia~uoe? 21 Have you noticed an~ chances in the AMA JQTJ~NI~L in the loot throc or four years? 22, 23 (11? "YbS"): %`ore there any ci2anjys you ecpecia].3y liked? Which ones? 2~, 25. Wore there any chan~oe you ~ 3iko? thich ones? Another nethcd nany drug fire u~e to inforza p~yoicians about their products era ~çdic~,, aloe called "houco organs". PAGENO="0352" 5824 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 26. On the fourth peg, of the bookist 1* a lt.t of eleven ce.pan.y perio~ ice], pit out by]e.dingdrugfir.e. TIhichof these doyc~shapp.nto receive? Abbott Laboratories WHAT'S ~ Hoffman LIHOCts -~ TH~tAPIA leders - EULLETII Eli Ii]]y PHYSICIANS MJLLETIN Merck - MERCK REPORT Parke Davis ThI~RAPEUTIC MOThS SPECTRUM Sharpe & Dchize SEMINAR Scheriog MEDICINE IN ThE NEWS Upjo)ui-SCOPI Ciba - STMP(~IA 27. Which of these do you usually read or lock through? 20. What company do you think usually does the beat job on its period- joel? Now for a few questions on direct mai' medical advertising. 29. About hew many pieces at medical direct nail advertising (other than poriodicalo) have yo~i rmc'ivc~ du~'in~ the last 7 days as clone an estiranto as possible? 30. 0! thoce, about bow many pisces have you read or looked at during the last? day.? 31 Who usually docides which pieces you viii read do you look then over yourself, or does your girl weed thcra out first? 32. On what basis are thoy weeded out -~ by coripany, type of product, sasplo, appsaranco, or hew? 33. That con'~any do you think usually does the best job on its j~i_re~g~ The last method, though the most expensive, which medical manufacturer. use to maintain contact uith physicians is the detail man. 34. Do you usually see ~]J~t4l m'~n that call on you, or do you make it a practice to see Qpç~, or of them? 35. On what basis do you se3sct those you see? 36. About how many detail man have you ~ during the last ~even_day~? 37. What ocm~arq do you think usually does the best job of detaili~~? PAGENO="0353" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5825 low a few questionS on i*'oI~setónal eti*P5. 3B. Did you attend the AMA meeting in San I~ancisco last 7. 39. Did you attend the AMA meeting in 111a4 last j~q~j~? 40. Do you plan to attend the AMA meeting in Atlantic City in ~? 41. 1kw maey state medical conventions have you attended in the last twelve wonttm? 42. Hew ~ local or county medical society meetings would you say that you attended in the last twelve menths? 43. Have you attended any special meetings with other doctors in the last twelve mentha? V~hat organizations were they? 44. Please turn to the back pace of the boclclot and tell an which ons of these categories best describes your present practice. FULL.'TII~E CEHERAL PRACTITIONER FULL-TIL!E SPECIALIST G3RAL PRACTITIONER lflM SPECIAL INTEREST FULLTE!S ELPLOYEE OP C RCIAL FIRIL OTHER 45. What is your speciality? E!E, EAR, NOSE & THROAT PEDIATRICS INTErNAL L~DICflIE SURGER! Ot3Ti~TiUC~ & GY!ECOWG! OTHER 46. Do you hold a certificate froia the £~ncrican E.erd in your speciality? 47. Are you aff~liatod with any hoepital or clinic? T~ith ones? 4~, Are you a n:~'aer of tha kiorican L~ed.tcal Association 49. Row many years have you been practicing andicine? 50. And how mer~y years have you been practicing in the ~bnd du Lac area? 51. T~hat medical cehool did you attend? 52. Do you expect to be in Fond du Lao moat of next month Juno., that is, or ~e you planning your vacation then? IThan will you be away? We rotafred ~illiam S. Apple, Ph.D., Azoiatnnt professor of 1tariuaey Adainiotration, at the U~ivoraity of t~icconain School of Pharmacy, to undertake the ai~1its. I~ arranged to have two graduate pharmaaeinte, Mr. David Sanders and 1r * F~bort Haxel who were working on their doctorates in phanr.acy adainiotration to make the audits in the 13 pharmacies which were cooperating in the study. They made a selection of competitive drugs in cceh of the five fields of theraoy and cc.~apleted the audit as their contribution to the study. 81-280 0 - 69 - pt 14 - 23 PAGENO="0354" 5826 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY ~ bialget did not allow for dolAg an audit of the entire sear's prescription; so that fo*w sir~3 weeks equal]y spaced were covaredn beginning Uay 9, 1954; Septenbez' 12, 1954; Jania~y 9, 1955; and May 8, 1955.. The competitive dr~s which were selected for inclwaicn Sn the audit are sheen mrs under each of the five which we were studying~ Aureoa~ycin Pátno with Phenobarbital Chlorociyc.tin £ntrer~y1 Ilotycin Danthi Terranycin Eanthinie with Phenobarbital Tstracyn. Co~'F.lorbn * Prentat * ________ Pro.Banthine Pabajate Pro-Banthins 4th Phenobarbitel Pabirin Sodium Salicylate S±er~sj~ Sodium Pree Pabalate I?audixin Raused * ________ Rauwiloid Lndalcmine R3sorpoid * Pyridiun Sarpasil with Apresoline Sereniiz* Thorazine * Sulaiayd Thiosulfil %~ h~oinc3 lOarn3d that some of the above drugs are not comparable and that some others should probably have been included. For the purpc3e of the audit, tEl workingsonoing cards were used for 1~t~r punching and tatulating. Tha audit was made during Juno 1955. rforrIr~o~tewe With ~ The informal interviews with physiciani and phnrr.ecists were completed the last of June and the first twe weeks of July 1955 by 1.~r. ~illiam Chapp3ll, research director of Abbott Laboratories, who was intarostod in observing our methods, and tlu'co Ban Gaffin & Associates staff m3zflbers, L~cssrs. John Flaho$y, Hal I!itchaU and Ban Gaffin. Prior to each interview, the interviewer reviewed the background quoaUon~' naire and the prescription audit tabuiction report for the physician whoia ha was going to interview. To insure comparability of these interviews, a 33-point topic list was cbvelopad which each interviewor carried and referred to during the course of the interview. As an experiment, most of the intorvisas were tape recorded, with the permission and prior knowledge of the physician. These interviews, some of which wandered far afield, ware later thoroughly edited in our office and transcribed according to an interview analysis outline. The topic list followsi PAGENO="0355" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5827 ItPIC LIST TOE INFORMAL INThRYZEP 1. Attitudes toward the oompe~. 2. Attitudes toward the product. 3. Does he proscribe it? Elueivo]y or with con~st. iti~. product. 4. What dos he prescribe it for? 5, When does he first remember Inoring abc*at it? There? 6. What was the direct occasicn for his starting to prescribe it? 7. What other impressions were made? 1. Detail men (Who?) 2. flirect mail (What kind?) 3. Ads in 1~edical Journal (ulitch?) 4. Sampling SUL2fART 8. Professional impa'eaeiems 1. Paper, in Journals (Which?) 2. Ibdical meetings (Which?) 3. Hospital staff rieetirgs (What?) 4. Other Doctc~s (Who, when, where, what?) 5. His clinic influence 6. The druggist influence 7. TIn hospital influence 8. The local medical society 9. Where did he learn dosage, uses, eta? 10. Whatexporloncee has he had with the drug? 1].. Does ha still use the drug? 12. Does he expect to continue? ~at is his present attitude? 13. Is there any particular way he prefers to learn about new products? ~ - While th3 pIl7oicion intcrv~iOwe were being complcted, wo developed and sent out a quotior.uiiro to each of the m~nufact~rors who had agreed to cooperate with us en the product otudy: Ciba, Fi~itcn, Goigy, liaderlo, Upjohn. The quor3tions, which cciered the atanufa cturer 1s marketing program for the drug, followi I~anufacturer ~s (~uestjonnaire The Ac~erican L~edical Aosociation, as a contribution to pharmaceutical marketing, is financing this study of the marl:oting of five ncn'conipetitive ethical drug products. Eceontially, it is ~a etudy of how pI~ysioiane learn about now products9 and what loads theme to start prescribing them. Tie information you furnish here will be held in strict confidence. Tow will have an oppcrtunity to approve or disapprove the publication of may of this information before it will be a'eleaaed. If we can get ccmnplote information on cost figures, it will macice the study mare worthwhile, both fee' you people and for the irdustry. ~~~hore the management chooses not to roleac3 this information to a9 wa shall have to use estimates of what tin figures are. PAGENO="0356" 5828 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY We sincerely belie~ that you will be helping your own company, as well as the industry as a whole9 by cooperating fully. ~ cn the other hand9 will cooperate with you hy xwt revealing anything which might injure 7o~ co~n7 or its interests. 1. (a) Was this a product at your ccrpany's own research. or was it obtained by licensing, perches., or hew? (b) bwlcnga tiicelapsedfroathstimneyoufirstbeganworkirmgon the idea of this product until you started fult-scale marketing? Cc) Rid you do any marketing research on it test markets, sample surveys, etc.? (Pisces describe) Cd) men did you first market the product? (e) When &d you begin national distribution? 2, Approximately how much do you figure it cost your company to bring the product to the point of marketing it? 3, (a) That did you conmider as the main use (s) for the product at the time you first introduced it to the market? (b) Was this original concept of its uses modified later? (if "Tea") In what wQ'? Row did this happen? 4. That was the overall mamrkoting and promotion program you followed in int~roduoing the product to the market? (a) Proliminazy sampling or testing what9 when and estimated cost. (b) Exhibits at nudical nnetings what, when and estimated coat. (c) t~tailing what, when and estimated cost. Cd) Direct mail what, whcn and estimated cost. (Please furnish copies of roprescntative ads) (e) L'adical journal ads what, when and estimated cost. (Please furnish copies of representative ads) (t) Other what, when and estimated cost. 5. Y~hat information, favorable or unfavorable, about the product went to physicians through the national ~foocion~ channels, to your knowledges (a) Papers or .arti~lea in journals how many? (Please furnish examples or bibliography, if possible) (b) Papers or articles at andical asetings how many? (Please furnish examples or bibliography, if possible) (a) Other what, when? (Furnish ar materials possible) PAGENO="0357" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5829 6. (a) In the Pond th Lao, Wisconsin markettng area (Fond ch~ lao and Chilton), wint detail man or non have detailed this product? (namas, addresses and phone numbers). (b) would you have ar~y objection to ow interviewing this non (these ann) on exactly what Is (they) did, and vim? 7. Our study plan calls for etuc~ing th. local professional influences5 and then informal intorviews with each of the I~eons physicians in the Fond dii Lac-Chilton area and with the 32 pharmacists there. We will do ow best to learn which of the influences directed at tim physician and pharmacist concerning your product registered, and which wore the major and contributory influences in getting him to prescribe your product (if he does proscribe it). We have started en audit on the sale of yoiw produet in the 32 pharmacies in this area, by physician, to learn the relative value of the results of the various influences. Do you have any suggestions or criticisss uhioh may help to maka this ettdy of greater value to you and the industry? If so, what? Pteil_l~riJntor~viown Each of the cooperating pharmaceutical manufacturers furnished us mamas of the detail man or man who detailed its product under etu4 in the Fond dii La~ area from the time the product vine first introduced to M~ of 3955. We wrote each detail man enclosing an interview outline as well, as a list of phyciciano and pharmacios in the Fond cbi Lao aroa to refresh his memory. At our request, thoce man telephoned us instead of mailing their replies. These interviews, which lasted from 30 minutes to 2~ hours, were recorded and wore lator analyced and typed in convcniont form. These telephone interviews were math the last of July and the first of August 1955. The questions which we sent to the detail man for discussion over the tolophone wore as foilowas Detail Mer Interview Qitlin. ~7e are interested in gathering as much factual data as poasib]a about your activities ro~erding the marketing of the drug ` in the Fond dii Lao area. Your answers, as accurately as you can ootina~o them, will prove of value to the AMA, the physicians, your company and ultimately to you. ALl questions refer only to efforts made in the Fond dii Lao area. 1. How did your company introduce the product to the Fond dii Lao physicians and druggists? 2. Then did you begin to detail this drug? Tear ~Month ~,,_,? 3. Wan much direct mailing done by your company regarding this drug bei!ore you bcgan detailing it? After you began detailing it? 4~ Appromtmately how many horn's did you spend familiarizing yourself with the drug before you began detailing it in Pond dii Lac? PAGENO="0358" 5830 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5. Which of the p!~ysicians and pharmacies on the attached ltt did you sell on and detail abo~di this hiug? 6. ~ the average5 bow mush time did you 1~mrd detailing this drng with the physicians? The druggists? 7. Wails you were promoting this drug, what proportion of yo~w total working tine in the fond di Lao area do you estimate you used doing so? 8, Did the phyaiaiare appear to be familiar with the product prior to your detailing them? Was this also true of the druggists? 9. lIsa there advertising in the ith~~ or the ~rropt L~ediouJ ~ that you felt was particularly effective in if orming~U~ phynicians of this sow drug? 10. Whaa did you call on first, the doctors or the druggists, when you began detailing this drug? 11. Did you leave samples with the doctors; the druggists? If so, eppr~ iraato2y how much? 12. ~ you unually detail more than ona drug during your visits with physicians; with druggists? 33. In the promotion of this n~w drug, how would you rank the offocttve~ i~,85 ofi _______ Direct mail advertising _______ Journal advertising _______ f~prints of p~'ofocoiona3. articles regarding the drug ______ Samples R~oica3i.y, the above information is the sort that we are c~c~cing but other ~ootione will, of cc~n'oo, once as we talk to you. V~e will be Z03t awre. ciütivo of any information that you cart pass on to na that will supplement the above and imprcrrn our knor:]odga of how you promotod this now drug. *~,ingtha Arlitriterialo ~ndBa~~ound Interviews This concluded the field work on the Fond du Lao $tudy. i'~b now had on a national scale the reports on hew the manufacturer sot up the marketing program and carried it out for each of the five drugs. From the detail men1 we had the story of the localized product promotion. For each of the 55 phyz~idane we had the background int~rviow, the pie. acription audit tabulation sheet which ehoicd the nwztbor of prescriptions and the total coat for each proscription In wrote on each of 33 drugs dunihg each of th3 4c!c periods. Additionally, for all but a few physi.. ciana, we had the oxtonaive informal interview containfr~g groator details on how he happenod to start prescribing those of the drugs under study which he prescribed; his attitudcs and mental images of the drug fizun; as welt as his personal ovaluation.s of the various channels of marketing come manication aid other ccxnmente. PAGENO="0359" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5831 Finally, we bad the early, infcrmal interviews with moat of the pharusciste, covering nearly the saue material that covered in the. informal interview with the physicians. ~nis oLDs~ arid ~ In the wenthe between September 1955 and V~y 1956 w have worked over the data, resisting the increasing `presetree to get the study completed in favor of developing a report of maximum value to the AMA, the cooperating manufacturers, arid the pharmaceutical indust~. In `Jamary of this year, Robert Lyon of the AMA gave a speech to the Pharmaceutical Advertising Club of New York on the basis of our then tm~ completed analysis * Dr. E3r10 Crawford of L~oad, Johnson & Company5 apoic. to the Mideost Pkmrnmc3utical lianu.tacturors' Association in Thbruary 1956 from the aaom incomplete materials. ~e asewne the responsibility for any incorroot interpretation of the moaning of the study conveyed by those preliminary talks. We believe that this, the official report, will correct any former ad~a~ conceptions of the Fond dii Lao St.udy. PAGENO="0360" 5832 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY QIAPTER 3. WHAT THS STUD! It~A We believe that the Fond do Lao Study is a pioneering study in several waye * in subject netter, in methodology, in intensity, and in concle. stone. It is one ~ the first studies attempting to get at how to improve marketing communication with physicians. II con~ines a number cC innovations in method, starting with the promotion program of the annufacturer and following the proscription audit with interpretive per~ aerial interviews of the prescribere. It investigates the Fond do Lao andical community most thoroughly, wing every technique that w~uld çonceivahly add to understanding. It contd.ne onnclunione of far reaching importance, and the five principles v~ich it offers as an approach to a science of pharmaceutical marketing can have marked in~ flusnco upon pharn~a ceutical advertising and promotion. The Fond dii Lao Study is not a eanpie survey. It is a complete study of a single marketing area -~ including every physician, the only hospital, the cbtail nn for the products studied, every pharr~ccy (but one), and every ~oecriptton of certain ethical drugs filled there during four full.. week periods. S~e have taken a microcosm and placed it ~.mder the micro- scope, as it wore, to see has it works, from looking at it first one way and then another we have learned a great deal that we could not have hopod to learn through the typical, lei'~e.~aca3,a, national study. ~oonnri~o,jactible The tindtnge on the five drug in the Fond dii Lao area are riot rnccssarily projoctible to the national market. They are the facts in Fond dii Lao; thoy may prav~e to be true nationally; but we would neither operate on that assumption nor advice others to do so. As far as the national market is concerned the Fond dii Lac Study provides hypotheses for further testing. For example, we would urge the executives at Ciba not to asswr~ that three-quarter of- their Serpanil sales come from internists nationally, just because that was the case in Fond dii Lao, Y:e suspect that Sorpasil is pro- dominantly an internists' drug but, until vorified~ our suspicion is only a theory. The ec~e reservation must be hold for the other specific findings in the Fond do Lao market. Vie hope in future studies to be able to test whether the hypotheses hold trns on a national basis and to what extent they reed to be modified to fit the larger market. PAGENO="0361" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5833 )~*t~The Principles ~re~is We should emphasis. that, ~uhile the specific facts reported for Fond 4* Lao are not necessarily true elsewhere, the principles derived f row the Pond 4* Lao Sbidy ar untverea].ty true and universally applicable. The five principles of scientific pharmaceutical maitet. ing which we define are true * They may net be complete and they may aone day be restated to have more meaning, but as general principles they are true. Any manufactin'er ~tho approaches the marketing of a new product according te the steps nitlinod in Section VI if he carries out these steps intelligently and thor- ai3hly is certain to dovelop a more efficient, more effective and ~e scientific marketing program. ~t~_The Lest Y7orJ ~h by no means believe that the Fond du Lee Study is the last word. it ia a pioneering study that makes a beginning and points the way for fut~we work. YTe recognize the ambitiousness of a program of learning ho~ to predict and control human behavior. We otter thase findini~a with humility and ask that the short. comings be w~ighcd against the poasiblo contribution to the 4ovolopxt~nt of further research and to the future of scientific pharmaceutical marketing. PAGENO="0362" 5834 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY SECTION II. DESCRIPTION OP THE POND DU LAO MARKET CHAPTER 1. POND NJ LAC AS A COIISIWRR MARKEt AND MEDICAL SERVICE AREA The area included in thin study comprises Pond dii Lao, Wiscci~1n, the five satellite towns of Chilton, Mount Calvary, ft'OsnsVil]a~ JLosendal. arid Theresa, and the open coixitry intervening. The area is roughly an oval, with the city of Fond dii Lao at the center, measin'ing about 40 miles from Chilton to Tho~asa and about 2A miles from Roaandsls to Ui. eastern boimdary. It includes the greater part of Fond dii Lao County and touches upon Cabinet, Dodge and Sheboygan counties. The nearest city of ez~ size is (~hkosh, 16 miles awey. Uilw~uko, is 60 miles southeast, Green Bay 60 mile. north'. east, and Uadieon 70 miles aouth*s.t. ~onul~ation Charjeteris%iq~ The population of the area is approximately 60,000 inhabitants, of whas about half live in the city of Pond dii I~*. Population per squcre mile 1. about 80 persons, compard with the United States average of 51 and the `3ieconsin average of 61. Probably ~on~iwhat more than half of the psople az's of Carnian extraction, although there also are strong `Irish, French and otbr nationality backgrounds all of which are in procosa of commingling through intermarriage. The two major religious denominations in the area are Catholic and Lutheran, with sizeable representations of Episcopalian and Evangelical groups. Employment in the area is about ono'.half in business arid trade, a quarter In manufacturing and a quart4~ in farming. Fond dii ~ is in the heart of the `itsoonain dairy country arid is a irajor dairy ccriter. Itø lar$33t single manufac'. turer is Giddings arid Le4~, which employs 2,500 people in the manufacture of machine tools. The FOnd dii Lao (Foot of the Ialee) area encloses the southern half of L~Jc~ ~innebago, the largast inland tndy of fresh water lying within one state. L~k~ ~tinnebngo and other smaller lakes r*~arby provid. facilitba for boating arid fishing. Summer cottages abound. The soveral ~o1f clubs are popular places for meals and driaks * Both duck and doer hunting w* popular with the residonts. PAGENO="0363" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5835 The city has xcsl]øflt petIte and parochial (Catholte and Inti~ran) school systems. it has eevóral Iwivate schools and a Junior college, stitch is Catholic operated. The area is served ~ so evening newspaper, the Pond ha Le~ Ccimr~onwei1th Reporter. The Mileaukee Journal and the Chicago Tribune are the chief Sunday newspapers and con. pete as dailies with the local paper. The local radio station is XFIZ. Railroads serving the area are the Ibrth Weatórn, the Milwaukee and the Soc ]ir.s. ~ if o~&aJ~ AU but four of the pt~ysieians within the Fond du Lao area are on the staff ct St. Agnes Hoopital in Fond do Lio. St. Agnes Hospital originally was an Episcopalian ho.. pital but is now operated by the Sisters of St. Agnes, a c~all order of Catholic nuns whose mother house in in Fond du Lao. The hospital his 400 beds, of which 100 have been added in the iciot t~:o or three ye are. It hoe its own pharmacy aclainiotorod by a nun who is a registered pharmacist. Alco in the area arc the Fond do Lao County Hospital, a n~ntal irtctitutiOn1 and the ~scon3in Hone for Wonon, a S~ato pricon, neither of which hea a resident pI~ysician. ~i~ni~ The area has co~on clinics, with which about t~o~thirds of the doctors are affiliated. The Fond do ~ Clinic, with 12 affiliated phyoicians, is the lar~ect. The n~xt lar~ect clinic has 7 nocbors, ~:hile at the other extrcrao tv~o clinics have but two mcrnbors each. 2iic~es. tihon the field work was in process, a total of 55 phyoician8 were prac~ ticing in the Fond du Lae area. Eleven doctors, all of them general practitionors, lived in the five satellite towne while the other 44, including all of the epocialiote and general practitioners with special interest, had their practices in the city of Fond do Lao. PAGENO="0364" 5836 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY An essential part of the .t* is the Sndividea1~ss ct the pI~sician bit, cmos it was underetoo4 that doctors would not be identified tq name, descriptive cods letters have been aesignad to that by type of j*'actios$ ~ gsmral practitioners O,P.A. O.PJ. ~, general practitioners with special * - interest (parttino specialists) 4 with special interest In obetst. rice and mecolog P.T.A. P.T,D. 5 with special interest in am'gsry P.T.E. P.T.I. 2 with special interest tnt anesthesiology, gynecology and urology P.T.J. - P.T,K. ~ specialists 3. internists 1st. A, .- 1st, C. 6 ophthalanlogists and eye, ear, nose and throat specialists Eye A. - ~e?. 6 surgecns and orthopedic surcaone Snrg. A. Surg. F. 6 other specialists: anesthesi. o1o~'j, obatotrics and gynecology, patholo~y, pediatrics, radiology, and urology Spec, A. Spec. F. 2 foruer surgeons now in general office practice G.O.P. A. - 0. O.P. B. As is true nationally about half of the specialists and general practitioners with special interest hero have certificates front the Am3rican ~ards. F&ght rc9.rod doctors also reside in the area but are not included in the study. The Fond du Lao area has a total of 13 ~bammaciee currently licensed. Nine of these are public pharmacies in the city of Fond du Lao, one is an exclusive ~tharmaceutical outlet rue in conjunction with a clinic, two are pharmacy~gcnoral inarchandise stores in (hilton, and the other is the St. Agnes Hospital Phanaacy, which fills prescriptions only for bed patients in the hospital. Two other pharmacies in smaller t~,ns let their licenses lapse several years ago because the nearby physicians dispensed all their oun prescriptions.. At the tIme of the st~4', 10 doctors reported that they dispensed drugs regu1~w1y, 6 admitted occasicnal dispensing, and the rest stated that other than samples they did no dispensing. PAGENO="0365" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5837 Tin's. Fond hc lee pharaactse ti]] tuosthirdi ~ .11 the preuri$ioea filled Sn the area. Following are our estimates of average weekly rnbara .e original prescriptions filled, based on the fo~u' week of our audits$ Origin4 Phsraa~ pr.eoripttcbs COdS ~D~? wedt~ `?~ii.~ allphemac±ien - 1745 720 2 235 3 210 4 140 * 5 110 6 100 7 60 a 9 ii) 10 30 11 25 12 15 13 10 The appra,dnato3y 20,000 houaoholda in the Pond ~i Lao area account for a].i~t $75,000,000 in retail cabs a your about $3600 a household, or $1100 per capita. Thus, Fond d.c Ice paople spend eomarhat more at retail than the avoraga for the cowit~ as a whole and a little more then the avoz'cce for ~ioecnsin. Compared with $3600 a houcohold in the Fc~id du Lao area, the na~ionol average is about $3100 and th3 State avor~o is about $3300. Compared 4th the local $1100 pci' capita the national average is about $960 and the State avoraga is about $1000. Di'ug stores in the fond du Lao area do an annual business totaling about $2,250,000. This amounts to about $110 a houcohold or about $35 a parson. National drug store sales average out to about $97 a house" held and $30 a person, while the correspanding figures fcc' Wisconsin are about $87 and $27. (The above figures are rough estimates for 1950 based upon Lnformation obtained from "Consu~r Marketed, a 8tandard Rate and Data Sarvice publication) PAGENO="0366" 5838 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY PrescrintIoii_$4~& Sine. ~&qj~ estimates that a ltttia w~r 21 pw cent of all ~ug store sales are presariptiona, it would appear that prescription sales in the Fond thi L~* area ~ount to somathing like $475,000 a 7U~. Thi. ai~imte to app d.mately $24 a household and $7 a person. If the average prescription price in Fond du Lao Ii the sane as the national average of $2.33, as reported is ~ade$ri. then approxtmately 200,000 presoripe tions are now1~y writtn refills accounting for a large share of the total sales. PAGENO="0367" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5839 CHAPTER 2. HO~T POND DV LAC PHfSICIA1~ EE~' CUR~NT ON NEW MU~ P~r~icisns in the Fond dii lao area appear to havó as wide a variety cC information sources about maw pharmaceutical products as doctors .ls~ where across the countzy have. Furthefmore, they show as ouch individuality in cheosir4. among the available taurces as other doctors do. In tie background interviews we asked broad questions about which one source of maw product infcrnatton aach pl~yaician considered to be most in~ortant to him, which ore of the coinucrcial sairces ho found to be meat worthwhile and which one be considered to be least worthwhile to him personally. In later chapters of this report we dli report also what cources the doctors remcnber as having first ac~ qnaintod than with each of the five drugs under study. ~ Sourc~ Dtail non and articles in zncd.tcal journals are selected by the most p~iyoicians in the Pond do Lao area as their mont important sources of information about mw drugs. Th3c3 too com'C~o are nr~ad by 20 and 19 doctors each; and no other caurce is credited as being most important by more than four doctorsi "1~hich do you find moat important to you personally in learning about maw drugs?~ ~pl doctor~ Dataji man 20 PapQrs or articles in journals 19 Ad~rortiaing in m~dica1 journals 4 Direct mail from drug firms 1~ National medical conventions 2 County medical mactinge 2 Staff meetings 2 Roference books .1 Poat ~~aduate courses 3, The above list is an varied as that found Sn our national survey in 1953, but by no moans cxhau~ts all the possible ways in which doctors learn of n3w products. The eources which doctors think of as being g~ncrc3lly moot ~ rnportant are not riscocoarily the ono s throu~h which they learn of every maw drng * For exrrapl.o, ecoz~ndaticns of other doctors are often recalled whom a doctor roconotructs the hiotoi~ of his use of a particular dru3, and one physician credits a pharmacist for telling him of Scipasil. PAGENO="0368" 5840 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY ~bit Worthwhile Caimeroi4 3ou~* ~oause many of the sources by which physicians learn of new pharmaceutiod products are not. twider control of the pharmaceutical company, it is ~siz. able to ask the physician to evaluate the canntercial somoes of information separately. When the diacission is confined to the ccnuercial sources~ detailing is reported to be moat worthwhile by abont twio~ as many doctors as name all other methods canbined. Ev.ay one of the media has th. support of at least five physicians, homaver. "Of the four sources of information from manufacturers, which one do you find most worthuhii~1~ifl~earning about new products?' TptaLdoct~ççj Detailing 33 Canpany periodicals 7 M3dical journal advertising 5 Direct mail 5 No choice 7 Converoe]y, direct mail is reported to be least worthwhile by more than half of the physicians in the area. ~bich do you consider least worthwhile to you personally?' ~.o~t~l~dQctor* Direct mail 30 JZ~,dical journal advertising 16 Datailing 5 Conpcny periodicals 1 No choice 3 tnii4ng~~~~rt AdverUnin~ M~,diu~ ?ln large majority of physicians in the Pond .du Lac area, 39 of the 55 (or 7l~) see all detail non vtho call on them. * Only two of the doctors say that they refuse to see any detail man and the other 14 are more or lees selective aboit which once they grant an audienae most often dc~ciding on the basis of the company represented. The 1953 survey found almost the sans situation among physi. cians natioriall3, with 74% seeing all detail men. Sons doctors say that they are visited ~y as many ten detail non a week, while others willing to see them have none call on thcm. The moat typical number seen in one week is about three detail men. PAGENO="0369" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5841 `About hew msny detail eon have you, seen during the last seven days?' !çt4doet~ a 6 3 Two $ Three 16. Four 6 FiT. 9 Sjx~n~ve * 7 Five canpzniea are each named by more than one Fond do Lao physician as usually doing `the best job of detatl~ in?' EU Lilly, named by 9 doctors; ParloDavis, by A; Abbott, by 5; Hoffman LaRoche, by 3; and Upjohn, by 3. Co~ntsaoutDotptUn~ lit the informal interviews many of the doctors elaborated on their opin'. ions about detailing arid their attitudes toward detail men, making aug.' gostions as well as criticisms. Some of the moat favorable ccminnts are mate by doctors G.P.C., G.P.S.,P.T.B.5 P.?.?., P.T.G., and Eye E. Dr. G.P.C., "Detailing is of prime importance. I don't understand the attitude of doctors who push the detail man aside and refuse to listen to him. The detail man is an excellent aom'ce on indications arid contra.'indications, dosages and comparisons betaoen products.' Dr. G.P.S.t "Good1 fast detailing is the best means of co~miunicating with us * It's the personal contact that counts. :~ don't have tizt to go throuGh the professional Uteraturo, and the detail sian can ~rovide us everything we need. Of cours3, his word is likely to be biased and we resont his spending 25 or 30 minutes trying to detail on their entire line. Good detailing should take about 5 minutes and should be a fast aunmary.' Dr. P.T.B.z "I prefer to loam about new drugs that way. (detailing). The other media are too uncertain and leave it up to the doctor to sort it out. The detail man1 on the other hand, is quite careful about what he tells the doctor because of possible repercussions later. Generally, they are quite conatderate of r~ tine and will sit outside until I can listen to thorn.' Dr. P.T.F.t "Tb us, detailing provides the quickest infer.' mnation with the least effort en a~ part. I rely on it wholeheartedly.' 81-280 0 - 69 - pt. 14 - 24 PAGENO="0370" 5842 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Dt. P.'f.O.s "The detail man is the first contact, U~ real]; effective eantact. Then, the direct mail and other sources add their littl bit to keep reminded that the product is available. Dr. Eye E.* "Ibe only means of ccntactingm. is the d.tdl man. Ise.alotofthemandtrytolistentOthe*aU. Vest doctors seem to wmat fast detailing bit an occasional one, like 1k'. G.P.R., looks at it different];. -~ Dy* G.P.R.s "I like to take plenty of time with the detail sian so that we can cover the drug as thorough]; as possible. Xf two companies have comparable drugs out, I prescribe the one whose detail man I like best. This applies to large groups of drug products and it has developed a hind of mutual aid society between the detail man arid me. I resent any pushing to get n*to try a particular product. Some doctors look to detailing to fill them in on products they have heard about elsewhere ~- Internist B.s "~ihon I hear about a new product, I question the detail man on his next trip." Surgeon F.: "Once a doctor has become aware of the exist. enco of a now drug, it is often the dotail man who provides the final motivation which convinces the doctor he should give it a trial." Dr. O.P.N., a dispensers "Doctors should keep notes on questions and to show then th3ir supply is low. t~n wh3n a detail man comes in, his tine can be u&~d more efficient];." 3~n suggestions for detailing as given by a few physicians - Internist C.: "The detail man should be careful of the authorities he quotes, and the technical literature he loavos should be scrupulously accurate." Dr. P.T.'~.: "If the detail men could lead me direct]; to outside sources in journals or articles, I might feel more kind]; toward their efforts." Dr. Eye ~,: "I weeld like to see the literature and the detailing linked together. That is, it would be a good idea to have the literature on now products a week in advance of the detail man. That way I might have a chance to g'ance at it~ and then ask him specific ques- tions." PAGENO="0371" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5843 Surgeon C.t wi can't always talk to the detail man bat just ask him to leave literature onUs izsoduct.In qiss~ tAco. Reprints of journal articles and definitely tech. nical material would be a big help.' Fond dii La~ area physicians differ among themselves as to the technical competency of the detail con. Dr~ P.T.A.s "I think of the detail man cot as a aa]esmiea but more as a friend and educator who can give out tech. nical details.' Dr. G.P.H.s "I regard them as salesmen and not as tech. nical experts. O~ly ors of them around here has a pharmacy background and only one has had pro-med training,' Dr. P.T.H.z "They are primarily salesmen who are trying to pneh their products, and the stuff they present Si primarily advertising and is biased.' Dr. P,T.J.: "XC you want n~ reaction to that, it's this. I any not be scientific enough to go into a lot of details but I like a detail men whe canoe in and assumes that I )aiow something abc*zt his product and that I haven't got a lot of time to waste with him. ~e wili give me the high spota and litorature, than.got up and go. `I don't like to listen to a lecture abant drugs.~ Dr. Lye A.: "Detail men are calesann and they are just as good as their sales manager. They apparently do what he tells then to do. They aren't particularly technical and always just study the saits literature which they give the doctor and give him a quick eurrtnuiry of it. That helps, becc~ce it gives the doctor an idea of generally what the product is. Than, if he wishon be can road up on it." A most common fooling is that the detail man should not try to high pzee~. sure the doctor, as summed up here in this one quotation Dr. G.P.I.: "The doctor should not allow the detail man to practice medicine." Simm Every one of the doctors in the Fond dii l~O area had received samples of one or more of the five drugs in the study, and nll are familiar of course, 4th the sample method of introducing new products. No gen3ral questions were asked about sampling on the background questionnaire bit the subject was discussed in the informal interviews with the doctors. PAGENO="0372" 5844 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Attitude. toward eampling range from strong approval to strong disapprov4, with certain pot peeves very evident Dr. Eye Ca `Samples are of great value in giving the product a reel clinical test, provided the sample package is large enough for a trial. Tue tablets of a product strike uc as being particularly absurd.' Dr. G.P.D.: `Samples help in becaning familiar with a new product since they enable us to try them on our own to get a direct clinical impression. I do object to being deluged with samples of a wide variet~ in which I have no in~rest whatsoever such as, vitanins.' Dr. G.P.B.: `Samples from the big houses we uØG, from the small ones we don't use.' Dr. P .T.G.: "They are a means of trying a new drug product so that if a patient develops an allor~ or if the drug is not izmodiatoly effective, the patient is not paying for high cost products which are not going to work.' Dr. P.T.C.: "I set the samples cm my desk ard look at them for a few days until I am familiar with the trade maine and the appearance of the bottle or package and kaow how to spell the r~e. The literature piles up end gate thrown out, but the sample is likely to stay a little longer.' Dr. P.T.A.: "Sarplee ore a sort of handy thing to have. I give them out often where I know the patient will find it hard to pay for the proscription.' Surgeon C.: "L~'. primary u~e of samples is for my own family.' Surgeon E.: "I refuse most samples. I pre3cribe on the basis of laboratory teats or bocauce I boliovo the drug is the most effective one in the particular case * I would not utilize the samples if I had them.' Dr. G.P.J.: "I don't go much for samples, boe~use I Us~ pence soao and it will get patients started on it and I will have to order it. Then I vould have to have a reg ular drug store. I don't hand out any samples for that reasan.' ~dici1 Journal Reading Mast Fond du Lac physicians èubscribe to more mcdical Journals then ths7 are able to read but each of than manages to look through at least ane. PAGENO="0373" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5845 When ehoun a basic hit of 15 of the mere popular med. ical journals1 the physicians repcrted that they r.eeiv* an average of about 5 journals apiece and that they road or look through an average at three each. ~Which of thesd 15 medical publications ~ 7011 happen tO receive? Which have you happenad to read or hock through during the last thirty daye? Read or ~acoive4 looked thro~ugk ?otal doctorA One journal 4 11 ~ journa]s 1 11 Three journals 11 33 Four journals a Five journals 14 7 Sixjourna3.s 6 3 8e~en journal. 7 1 Eight or more 4 1 Tin p~oblen which the busy physician is confronted with in reading his journals is well stated by Dr. P.T.B., uho receives 10 of the 15 journals and gets to read only three or four "I lay aside those with particular articles I want to read. Than they pile up in a stack until one day I close ~v eyes, pick up the stack of books and dump it out.TM The moat comnonl.y received as well as the most often read medical publi~ cations in tin Fcad du Lao area are the 4~r~i1 of the A'~orioan 1adi~c~3 Minttnii and ~ are the top eight journals in number of mentions on both scores Read or Received looi~d throu~ L~oct~ . ~ournal of the A.M.A. 47 35 Modiø~3. Economics 47 35 Modern fl3dicine 39. 22 M~djc Times 24 10 Ourrent Medical Digest 21 13 0.?. 19 17 Surgery, Gynecology and Obstetrics. 14 10 Annals of Surgery 13, 7 PAGENO="0374" 5846 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY £ somewhat l*'ger number of doctors claim regular z~adsr. ship then report rea~ng a journal within the lowt 30 days. Par canparison with the 35 shown above for JrnA a total of 41 say that they read at least half of the 7~'issmes. Tin top three journals in number of am,*~icns as the most valuable are g4~ with 23 nantiona, ft,~ with 7 and ~rnJ~odicfrj, with 6. The top two for enoynnnt in reading are i~dice1 Economici with 17 nantions aM J~ with 10. ~ is the only pIi~3licaticn which as many as five doctors say they feel `duty bound' to read. çpnvnente about Journal Articlea Speald.ng broadly, it a~~ears that to many physicians of Pond dii Lao prom fessional articles seem to be the most reliable source of new product in. formation or that such articles would be the most reliable soiree if they could be published sooner. Some doctors will wait for journal publication before using a new drug -~ Internist C.t "The moat desirable source t~ fan' is direct articles in the literature. Ordinarily I will use a new drug only after reading an evaluation by a known authority.' Surgeon C.: "I am interested only in reports on clinical tests `as a basis for ny decision to use a drug or not.' Dr. G.P. R.s "Che good article cc a new drug product will do more to convince ma that I should try it than unlimited detailing and advertising will do.' Dr. G.O.P. A.: "I will wait for a corv3iderable length of time before trying a product until technical data appears in the journals.' ~zt others feel that they either cannot wait ~r cannot take the tine for professional articles Surgeon P.: "Characteristically, I go to the table of contents first and then directly to the article that interests ne. Saneti,nee I search through the literature for technical material, but I know that many physicians do not have the tine for that sort of searching. I will trust a reprint of an article more than the literature put out ~q the pharmaceutical house.' Dr. E~e A.: "Journal articles ar. the best eource of data in the long run. It is a very long time before they are out, however, so tin only practical thing is to rely on detailing and whatever other data is immediately available.' Dr. O.P. E.: "I have a conflict here. I trust profes~ioflal evaluation above any other source, but at the same time I do not have sufficient reading time to dig through the journals.' PAGENO="0375" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5847 Journal articles also oem. in fa' thair share of criticts* Surgeon S.~ "Ibe val~ of prctesatona]. articles hinges directly upon the morn of the anther and his professional reputation. I have a suspicion of statistici since the7 can prere almost eoything depending upon the wq they are applied. This piaces most professional writings on a par with pharmaceutical hones literature and advertising. I would net trust one abowe the other.' Dr. G.P. H.: "I have one complaint about medical journals and their use of chemical and generic means. The in&tvidi us]. physician has to somehow make the tie-up with the par- ticular brand or trade name * This is confusing since a doctor not only has to know that a product is available hat whore to got it and what to Cal]. it. If you prescribe by generic nones the druggist aw even call you back to ask for the trade nann.~ 9pntn~on_Jo~nal Advertieinm Just as in the ease of other `media, soiie Pond do Lao area doctors appear to rely heavily upon advertising in medical journals while others say that they ignore it. First, some of the favorable comments Dr. P.?. A.: "I am truly a cover-to-cover reader of the journals and so I have to read all of the ads.' Dr. P. T. 0.: "To me there is no real distinction between the ado in the journals and the scientific articles. I read the journals a lot, so I pick up a good deal of scientific information on products.' Dr. G.P. C.: "I like journal ads particularly those with pictures, charts and graphs * An attractive ad helps a good deal to stimulate my interest in a product.' D~. Eyø C.: "The advertising in the profuseional publi- cations is a more reliable source once a dotail man has made me av:are of the existence of a product.' Next, some comments about the auxiliary effect of journal advertisements Internist B.: "I do not often notice them except for very new products which I have not heard about before. Seeing the ad lets me ask quoctions of the dotail man his next time aourd.' Dr. O.P. K.: "I `read them if they doOl with a product I rn interested in and which I have heard about somewhere cisc.' "Br. P.?. G.: `Such ads are a reminder to es, becaae ttey raise a certain amount of skepticism about whether a drug will do what it claims to do.' PAGENO="0376" 5848 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Md sece e~nts at thee. who accept joural advertising with receive. tie-..,. Surgeon Es, *~y ire a valuable soisce, bat ! resent advertising which i. non..profeeeionsl. What the average doctor is locking for is a drug to do a specific Jobà do if the advertising gives technical detail without ballyhoo he is satisfied.' Dr. Eye D.: "It is often too long before dafinite data areoutonadrugeo eometinneltryaproduotfroaepeo. ifications in the ads, but I don't like to do thi. unles* it is not going to be at all risky.' Finally, the inevitable disclaimers about advertising - Dr. 0.?. U.: "I rover look at the ado too much,' Surgoon F.: "I rarely look at the journal ads.' Dr. (hP. H.: "I ruver read journal advertising.' ~ Pond du Lao area p~iysicians receive company periodicals from pharmaceutical firms in even greater abundance than medical. journals, ar4 they look through or read thins house organs in fairly high proportions. The doctors wore shcin a list of devon con~any period~ icals. On the avorage each doctor said that he received nine of thoco p'~blicatiorie and that hi usually read or looked thro'ijh six or eov'on of them. V~hile seven doctors cay that thcy novor look at coi~any poriodicalo, 15 in~ dicato that thcy locc through all eleven. `~Thich of thoce cozt,cny periodicals do you happon to receive? Which of those do you usually road or look through?' Rouse organs Read or ~~4__ Te~docto~j No house organs Onoortwo 2 4 Throeorfour 3 6 Fiveoreix 5 3 Sovonoroight 5.. 6 Nine ci ten 12 9 Allelaven 23 15 Three compcny periodicals are each singled out by five or more doctors as doing the boat job. They ares ~ of Ciba, nar.od by 11 doctors ~n~'i~Jic~j of Parke, Davis, mound tg 10 doctors ~That'o tStt of AUiott, noised by 5 doctors PAGENO="0377" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5849 ~iDi~~ef~Idl do ~ec Phioldans, like doctors s,.xiohere, are dologed 4th direst matladvertising. Qi]ytwoofths 55saythattbsyreadcr lock atali ~ the direct mail they receive. Most doctors in the area say that tiny receive acre then 50 direct mail pieces a week and most doctors indicate that tiny read fewer than 9 of them. `AbOUt how many pieces of medical direct mail advertising (oUnr than periodicals) have you received during the last seven days as close an estimate as possible? ~ those, about how many pieces have you read cr looked at during the last seven days?' Pieces Reador z'~ceived ?otsl. dootor~ 1-9 pieces 1 25 3D-24pieces 3 9 25-49 pieces 13 2 50-99 pieces 15 2 lO0oruiore 22 1 Don'tknow .1 2 Five of the doctors say that thay never read direct mail, tim report reading all of it, and of the remaining led, all but four say that they do the sorting themselves. ~7h3th3r thoy or their girls do. the sorting, here is the basis for the choices irada, socte using more than ore methodS Sort by specialty, type of product, euljoet matter 23 Sort by company name 9 Road about nay products, discard duplications 9 Sort by appearance of piece 5 Sort by information on envelope 5 Readiflluve tine 3 Other methods 2 UO special way, don't know 2 Only three cou~anic3 are singlad out by as many as three doctors for doing tin best job on direct nail Smith, Kline & French, 4 mentions Abbott Laboratories, 4 mentions Pfizer Laboratories, 3 mentions PAGENO="0378" 5850 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY E~inta~aboi4 1~eet N41 Direct mail baa re3Atively few .tren$ supporter. among pb~yiioiaxa of tba area, but a few do depend 1PCO it Dr. G.P. 11.1 `Direct mail is ~ first choicea I eeps~" cialZi like the email file cards that 1 can fi]* uay fer reference. Di*oct miii is tim fastest forms of ecms asudcating and, I think, the most efficient.' Dr. G.P. I,: "Direct maUls of help sea stimulus to start looking for more con~1ate data. Advertising in general helps am to familiarize myself with now product earns and applications. I neually let the mail pile up sizl then read it all at one time.' *Dr.EyeA.s `Itkoepesapoathdbutteeeon].ythe bettor stuff I macan technical panphleta containing scientific material. The rest goes in the round file (waste basket).' Sug~eetions f or improving the impact of direct mail are made by a few pbysicians Dr. 0.1'. La "Papetit~ton of the sane material every few days is a source of irritation, not a source of inforama~ ticm. It is very wasteful. Direct mail should be atm tractive, skort and concise d330riptions of the drug, nacs, abuaco, cautiorn, and so forth. Ba informative. This probably won't please the ultra-~scientifio men, but it would certainly help the ordinary practitioners.' Internist B.: "I dislike the flood of mad]. across a~ dock. I i~ould rather receive one letter three to five ps.~eo lcr~ from the dircetor of research for a partic- ular huse whon a new product coma a .° Dr. P.T. C.: "I will not open or read any mail unle~ it tma a licked st~amp on it.' A number of doctors apparently associate direct mail with their waste baskets, as examplified in this one c~uotation Dr. P.?. H.: "This morning, as an example, I picked up the direct mail at the desk and dumped all of it immedi- ately. It is purely advertising.' !~ti~pjnd Cop~mientiorrm Not counting hospital and clinic staff deotings, physicians of the IbM dii Lao area report attending more than 10 professional meetings a year on the average. PAGENO="0379" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5851 About halt of them (26) say that they attend praetio.fl~ evezy county ewdical society emoting end $ fo~wth (33) think that they *ies coly oz* or tem local emetings $ year. The record for attendance at state arid national conien tions during the preceding year was held t~ era of the older doctors, Dr. G.O.P. A.; and all but six doctors had attended at least one convention. The average nwa ber of state and national conventions attended wra l.S per physician. Only one doctor in the area coca not belong to the ~morican Vedical Association. ui addition, 38 of the doctors had been present at one or mere meetings of other professional organizations. Each of the 38 mentioned two organizations on the average, and some attendod several meetings. ebout~i)thcr ~octore as i~it~on Sourcee Despite their frequent meetings and contacts 4th other physicians and their own sometimes contradictory testimony when speaking later aboi* learning of specific drugs, most doctors do not give much general credit to othor members of the profession for telling them of new pharmaceutical products. Ibre are sone of tin exceptions who state that they often learn of raw drugs from other doctors Dr. 0.1'. R.: "Now that .1 thir~lc' about it, I ~1ace my professional contacts in first importance." Dr. C.?. J.: "You talk these things over with fellows specializing in certain fields and use what they reconunond in referred caee~.' Dr. P.T. P.: "Other doctors help considerably in passing along information on new products. Furadentin is a case. in point. I first hoard of it from Specialist A.' Dr. P .T. D.: "Undoubtedly the best is a direct reconunrida- tion from another physician whose professional standing is unquestioned. Vinn I really want to know about a drug in a hurrj, I call my friends at the hospital.' Dr. 0.1'. 1'.: "I think you feel better about a new drug it. you mar about it at a medical meeting -~ somebody etse `s experience with side effects and so on.' tkre typical of the statements made by other physicians are theses Dr. P. T. J.: "Once In a while the doctors will get together and talk about it after emetings.' Dr. o.P. if.: ~`1Spocific discussions between, doctors cm new products are'~the' exception rather than the rule, except in oases of consultation.' PAGENO="0380" 5852 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Dr. ~je C.i `I mentioned times two doctors at tlis slide for a couple of new dries, bit I don't think at the. me really reliable sources as far as learning about all prce Preocrintiena Vrit~ The ~ctent of prescription writing done by Pond dii La~ area physicians is sub3ect to the highest individual variation. Pci' the week preceding the bac1c~ground interviews nine doctors indicated that they wrote no prescriptions, while seven doctors estimated that they wrote more than l(~ apiece. `About hon many prescriptions did you happen to write in the last seven d~ys?' ~pte1~doctor~ Z Ouer 3)0 prescriptions 1 15l-'Z)O prescriptions 2 lOl-~].50 prescriptions 4 5]...lO0 prescriptions 8 .31.50 presôriptions 12 11-30 prescriptions 9 1-10 prescriptions 10 No prescriptions 9 The above distribution is very important because it means that 7 of the 55 doctors wrote almost half of the preecrip tions. Or loo'ced at the other way, half of the doctors, 2~ of the 55, accounted for only 10% of all the prescriptions. Of coia'ee, some of the low prescribing doctors do their own dispensing, so that proscription writing does not give full measure of their importance to the pharmaceu~. tical manufacturer. It seems probable, however, that dispensors as a group tend not to use new drugs so readily as proscribera do. ivi~c~l ~se ot Seurc The following chart lists the 55 physicians in order of the amount of pre- scribing done and shows usage of the different sciirces of information hy each one, PAGENO="0381" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5853 - - ~ - Co ~ N Co Co N - Co N Co ~0 ~ 000 0 0~ ~ NO CO Co Co Coo N N - N N - - ~ N - 00 ~ 00 00 Co Co 00 Co 00 Co Co Co ~ CoO CoO N CO ~OCO I : ,~ Co `~ Co Coo 00 ~ Co 00 N Co N N 00 Co N ~ N ~-4 ON N NNN 0CC) 00 Co N Co Co ~0 00 0000 Co Co Co N g~: I bC~ 0000 00 0)0) ~M CC C)~1~ ~ ,~ ~ 0)0) 0)Oo .~C-C~ ~E CCC ~ I I :r~ 00~ ~ NCot~ ,~ ~ 0 g 0 0) ~ ~ ~ ~ I I I ~ ~°!~ ~ II 1 H I~ b ~ ~ 0~ h 4~C,U) 0 ~ J ~b0b0 ,0~.E ~0)0) ~ CO z 0 CC 8 Co Cl) 0 Cl) 0 Cl) z 0 0 Cl) o C/) 0 C/) CO z 0 0 CO Cl) 0 CO C~N~-IC-INNCoCo COCCCo~~CoCC Co Co Co C) Co Co Co N - CO - C) ~ CO - Co Co Co ~ Co - ~I ~ ~ 000000 ~ E ~ bob 000000 000000 00 EE'~EE.~~ ~ ~ 0000 EE ,.~ ~ 000005000000.05 b000b0~!C E.s ~ ~ E00 ~ 0)_~~ ~- - Q ~ ~ Q PE ~ ~ 0 0 PAGENO="0382" 5854 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY ~1p C, ~ 0~~~ CO - - - ~ 00000 ` Co I Co O3~ CO COO cq Co cq - - COO C~ 0 0 - - C, C, - ~q COO ~1 C, CO C, ~O ~ 000 Co~M ~o o~ ~.E ~ ~ III,,',,, C~C)9J ~ ~.E ~ 0 ~- C, C~' C~ OCO 0 ~h ~ x~ ~ ,~ iij:::: Co z 0 C) Co Co C) CO CO ~ CO - r~1 Co 0 Co 0 C) I .~ ~ ,~ I~ p .~- ~ Co~P~MCoCo ~~CoA4~Co PAGENO="0383" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5855 Sone very illuminating comparisons axe availabLe in this chart, largely confirming for the ?ond óz Lao ares acne of the national findings of our 1953 stu4$ Contrasts between the seven heavier subscribers and the nir seo.'.ub scribers are most sa*hed 1~ heavier prescnibers place more reliance on detail sen five of the seven say that detailing is the most important source of information about new products; and they see ~ avorage of six detail sen apiece in $ week. The heaviest prescriber of all, however1 rates. detailing as the least worthwhile coirnercial source of information, although be saw four detail men in the week. No~..presoribere saw an average of only 2~ detail sen in? days, but this is not entirely due to dtoinclinaticn on the doctor's part both specialists, for example, sq that they would welcome any detail man who wishod to call on them. The tact that more detail men called on O.P.'e A. end B. than on any other doctors indicates that they probably recognise the importance of these two heavy prescribers. Another difference between the heaviest presàribsre and non.'preacribers is in their readership of sedical journals. Two of the heavier preecnibere read an unusual number of journals, bringing the avora~e up to four. journals a doctor as compared with only abont three journals for the non..prcscribers. Vaavior preceribors as a group read en avoraga of only six company .peri~ odica].s while the non preocribors road an average of sovcn or eight. Heavier proceribore chotx ec~ao~TIut ieee interest in direct mail and do not am often report perfect attendance at county medical society flleQtings as the non-presoribers do. Finally, the heavier proscribers con~rine one internist, two general practitioners and four general practitioners 4th special interest. The non-proscnibors include four specialists, four general practitioners of whom three are dispensers, and one genera] practitioner with special interest. PAGENO="0384" 5856 COMPETITIVE PROBLEMS IN TIlE DRUG INDUSTRY SECTION III THROUGH VIII FOND DU LAC STUDY 1956 SECTION III: The Marketing of Five New Ethical Pharmaceuticals and What Happened to Them in Fond Du Lac From the Product Point of View. PAGENO="0385" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5857 SECTION III Chapter 1. The Story of CIBA's Serpasil DEVELOPMENT OF THE TRANQUILIZERS Serpasil and the drugs included for study with it are considered here as tranquilizers for mental and emotional disturbances, since this seems to have become their main common usage. Most of them were originally developed as hypotensive agents to lower blood pressure, but the tranquilizing side effect has assumed greater importance. The drugs in this group, except Thorazine, were developed from Rauwolfia serpentina, a snake-like root from India long used in that country as a cure-all. In 1931 two Indian chemists isolated five crystalline sub- stances from the dry powdered snake root; and in 1949 success was reported in the use of some of these substances in reducing high blood pressure. Experiments with these snake root substances attracted the inreres~ of a number of pharma- ceutical manufacturers at about the same time. Raudixin, the powdered whole root, was brought to the market first1 in May 1953, by Squibb. Riuwiloid, which Riker introduced very shortly thereafter, is an alkaloidal extract obtained from the snake root. Serpasil was the outcome of attempts to iso- late the active ingredients from R.auwolfia serpentina which had been started at Ciba in 1947. A research team there succeeded in 1952 in isolating reserpine, the most active snake root component. It was marketed in powdered form in November 1953 as SerpasiL Thorazine, a derivative of phenothiazine, was originally introduced by Smith, Kline & French for control of nausea, vomiting and hiccups, but is now used extensively as a tranquilizer. Rau-sed, which is the alkaloid reserpine, was the second snake root drug introduced by Squibb. Reserpoid, also alkaloid reserpine, is an Upjohn product Serpasil-Apresoline is a combination which has more effective hypotensive action than Serpasil, its fellow Ciba product 81-280 0 - 69 - pt. 14 - 25 PAGENO="0386" 5858 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY NATIONAL PROMOTION ~ SERPASIL Ciba already had a large investment-approach- ing $1,500,000-4n its forthcoming product when Raudixin and Rauwiloid came on the market. The impressive rating of Raudixin in the Nielsen drug report speeded up the entry of Serpasil into the field. The first year's national, advertising and pro- motion effort for Serpasil cost in rough figures about $1,900,000. The largest incurred expense was for detailing, Serpasil having been the company's featured detailing item since its introduction. An esti- mate of the 1954 cost of detailing. comes to about' $900,000 Direct mail for~he first year-self- mailers, letters, enclosures, etc.-re- quired roughly $400,000 Journal advertising represented a cost of $250,000 (two-thirds in the first six mOnths and one-third in the second six months, when an equal size jour- nal campaign was being run for Serpasil-Apresoline). Sampling was very heavy `also-a small pre-introductory supply was sent to each drug store, and physi- cians were sampled liberally through detail men and direct mail $200,000 Exhibits, in commercial and scien- tific sections at medical meetings where permission was granted to feature the item, and at selected hospitals $150,000 It may be noted here'for future re- mark that Ciba did no test market- ing or marketing research on the product other than referring to site Nielsen figures. The ratios of one~ and-a-half million dollars for tech. nical research and development and almost two million dollars for advertising and'promotion to psac- tically nothing for marketing re- search are not uncommon in she pharmaceutical industry. This is * constant `source of amazement so many practitionersof scientific mar- keting in other fielda PAGENO="0387" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5859 PROFESSIONAL EVALUATION OF SERPASIL (RESERPINE) Reserpine has been the subject of considerable professional attention since its isolation from the other snake root substances; and a large amount of clinical experimentation has been reported in the literature and at meetings. At the time of the study, over 200 articles on reserpine had appeared in journals and about 150 papers had been devoted exclu- sively to it at medical meetings. The product had received mention along with other items in numerous other papers also. Two meetings of the New York Academy of Science had been devoted entirely to reser. pine. Ciba helped finance these meetings, and paid for very widespread distribution of akstracts and a book on the full proceedings. GENERAL PUBLIC INFLUENCE The tranquilizing drugs have caught the popu- lar imagination to an unusual degree; and there have been a number of articles in the lay press on "New Hope for the Insane "Miracle Pills for the Mind~' and similar titles. While such articles have no official status, they unquestionably create interest both in physicians and patients, or relatives of pa- tients. Although physicians frequently complain about the patient who asks so,be treated.with a drug hehas read about~ there probably is no stronger incentive to send. them seeking professional information about it. This public influence is difficult to determine, since physicians would no. doubt underrate its importance. We believe, however, that it is a most important influence in the case of many drug products. PAGENO="0388" 5860 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY SERPASIL DETAILING IN THE FOND DU LAC AREA It can reasonably be assumed that the 55 prac- ticing physicians in Fond du Lac and its satel- lite towns received their fair share of direct mail, journal advertising, journal articles, ex- posure to convention exhibits and papers at meetings. The same is probably true for detail- ing, but through our interviews with the detail men it is possible to elaborate somewhat on their approaches locally. Two men detailed for Ciba in this area dur- ing the year of study-one who covered the territory at the time Serpasil was introduced until August 1954 and a replacement who then took over. The original detail man was briefed on Serpasil at a three-day regional meeting in Chicago in November 1953. later that month he made his first detail on Serpasil in the Fond du Lac area. His schedule called for three days in Fond du Lac and he was able to see about six doctors a day. Every six weeks he returned for another three days, always calling upon ~ 15 doctors he considered most important ~d, by rotation, upon three or four others each of whom he visited only once or twice a year. It is interesting to note that 10 of the 12 physicians who wrote Serpasil prescrip- tions during our audit period were among the 25 or so that he detailed during its first year. Whether they prescribed because of his detailing or he selected them as the most likely prescribers cannot be determined, but probably it worked both ways. Not only did he leave samples of Serpasil with each physician,but also simultaneously with his first visit to Fond du Lac the coin- pony mailed samples to them. He spent about 9 hours on each visit detail- ing the pharmacies in Fond du lac, and be left with each an initial supply of 25 Serpasil tablets. He also called on the hospital,. set- ting up an exhibit there and visiting both the hospital pharmacy and laboratories. During Serpasil's first year he also detailed other drugs,but devoted 80 to 90 per cent of his effort to this one drug. He estimated that he spent 40 to 50 minutes of each work- ing hour waiting and only 10 or 20 min- utes in actually talking with physicians and pharmacists. The second detail man carried along in much the same pattern, but visited Fond du Lac only six times a year for two days each time. He devoted only about half of his efforts to Serpasil. Neither one of the two men detailed physicians outside of Fond du Lac proper; and only 36 of the 55 doctors remembered ever having been detailed on thisdrug. PAGENO="0389" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5861 TRANQUILIZER SALES Hypotensives and tranquilizers have developed a market of respectable size in the Fond du Lac area but are not a type of drug that is pre- scribed every day by every physician. For example, 35 of the 55 doctors indicated during the interviews that they had pre- scribed. Serpasil and 39 said they had pre- scribed Thorazine. During the four weeks when the prescription audits were. made, only 26 doctors prescribed any of the seven drugs in this group. They wrote a total of 110 prescriptions selling at $455. On an annual basis this would amount roughly to 1450 original prescriptions, or a $6000 mar- ket exclusive of refills and direct dispensing However, the demand. for these products in- creased substantially during the early part of the audit period. The number of prescriptions for the seven tranquilizers almost tripled between the May and September 1954 audits and leveled off thereafter. OriginaiPreuriptions 7 drugs Week of audit Number Price May 1954 13 $ 48 September 1954 36 150 January 1955 30 144 May1955 33 113 SERPASIL SALES During the prescription audit periods, a total of 28 prescriptions for Serpasil were filled for 12 physicians. This was about a third of those who reported ever prescribing it. The price of these prescriptions was $102. This means that Serpasil accounted for a fourth (25%) of all tranquilizer prescrip- tions and for 22 per cent of the dollar vol- ume of original prescriptions. In terms of annual sales this translates into about 365 prescriptions and $1325 at retail, exclusive of refills and direct dispensing Looked at another way, the 55 Fond tin bc area physicians may be considered as repre- senting 1/3000th of all practicing physicians in the country. This market's share of the Serpasil development cost then comes to about $500 and about $635 of the fIrst year's promotion. This may be compared with the $1325 retail sale figure for original prescrip- tions filled. CONCENTRATION OF SERPASIL PRESCRIPTIONS A most remarkable revelation of the prescrip- tion audits is the fact that over half of the Serpasil prescriptions during the audit perL~ds were written by three physicians. Furthermore, all 3 of these doctors. are full-time internists. Total Internist B Internist C Internist A Nine other prescribers Four-week Serpaiilprescriptioni Number Price. The three internists in Fond du bc thus accounted for 57 per cent of the prescrip- tions of Serpasil and for 63 per cent of their. dollar value. This finding that Serpasil was predominantly (although not exclusively) an internists' drug in Fond du bc has important implica- tions for marketing strategy. 28 $102 8 $30 5 20 3 14 12 38 PAGENO="0390" 5862 COMPETITIVE PROBLEMS IN THE DRTIO INDUSTRY souRcEs OF~ IN FORMATION ABOUT BERPASIL Important differences are observable between the prescribers and non-prescribers of Serpasil in their exposure to information about the product. In the first place, the great majority of 5cr. pasil prescribers remembered having been detailed on Serpasil, and all but two said that they had received samples of the product. In contrast, fewer than half of the non-prescrib- era were detailed or received samples. Other Serp4s~ z~.- Internists prescriber, prescriber, 3 32 20 Although "other prescribers" of Serpasil most often report that detail men led them to make their initial prescriptions, the in- ternists credit professional sources for theirs. "Where did you happen toget the infor- mation about Serpasil which led you to prescribe it?" Other lnternists prescriber: Total 3 32 Detailmen - 15 Papers, articles in journals 1 10 National convent ons 2 3 County meetings - 3 Directmail - 2 Journal advertising - 1 Staff meetings 1 Other sources - 4 (some physicians named more than one source of information) `Accounted for 37 per cent of préscriptio~s written.- and 63 per cent of dollar s~oIume for Sespasil durigig the prescription audit perioda. "Can you tell me what month you first prescribed Serpasil?" Other Internists prescriber: Total 3 32 1953 January-April 1954 May-August 1954 Sçptember- December 1954 January-April 1955 Total Serpasil discussed by detail men Serpasil received as samples .3 25 8 Two of the internists were among the early pre. 3 30 9 scrlbersofSerpasil. 4 2 4 1 9 7 - 8 PAGENO="0391" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5863 GENERAL SOURCES OF INFORMATION Local Serpasil prescribers place more emphasis "Which of the four sources of informa. on detailing as a source of information about tion from manufacturers do you find new drugs generally than do nonprescribers. most worthwhile for learning about new products?" `But none of the internists mentions detail Other * men as his most important source, even . Secp.sil No.- It~en,iss: prescriber: prerceibers though two of them see all detail men who call and the other sees those from the lead- Total 3 32 20 ing pharmaceutical houses. Detailmg 22 9 Company "Which of these methods do you find perioclicah 2 5 most important to you personally in Jo~l learning about a new drug?" advertising 1 Z 2 Directmail - 4 1 Other Serpasil No~,- Nochoice 2 2 3 I,v:er,sis:s prescribers pre:cnb.rs Total 3 32 20 "Which do you consider least worth. Detail men 15 5 while to you personally?" Papers, articles in Other Serpasil No. journals 1 11 7 Internist: prescriber: pre:ctii.rs Journal advertising - 2 2 Total 3 32 20 Direci mail 1 2 1 National Direct mail 1 15 14 conventions - - 2 Journal County meetings - i i advertising - 13 3 Sraffmeenngs 2 Detailing 2 2 .1 Reference books ~ Company Pose-graduate periodicals I Nochoice 1 2 courses 1' - In fact, two of the internists go against t~ trend by saying that to them detailing is the least worthwhile commercial medium. PAGENO="0392" 5864 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY THE SERPASIL MARKETING MIX `Ciba already had a large investment-approach~ ing $1,500,000-in its forthcoming product when Raudixin and Rauwiloid came on the market. The early impressive rating of R~u- dixin (Squibb) in the Nielsen drug report speeded up the entry of Serpasil into the field. The first year's national `advertising and pro~ motion effort for Serpasil cost, in rough fig~ urea, about $1,900,000. PAGENO="0393" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5865 SUPPORT FOR SERPASIL IN MEDICAL JOURNALS Reserpine has been the subject of considerable professional attention since its isolation from the other snake root substances; and a large amount of clinical experimentation has been reported in the literature and at meetings. At the time of the study, over 200 articles on reserpine had appeared in journals and about 150 papers had been devoted to it at medical meetings. The product had also CORRELATION WITH SOURCES OF INFORMATION ON SERPASIL. L received mention along with other drugs in numerous other papers. Two meetings of the New York Academy of Science had been devoted entirely to reset- pine. Ciba helped finance these meetings, and paid for very widespread distribution of abstracts and for a book on the full pro ceedings. Total Prescribers L 12 J Journal articles and Journal advertising conventions [~J direct mail 15 detail men 8 ] other sources including county meetings, staff meetings "Where did you hap~pen to get the infotmation about Serpasil which l~d you to prescribe it?"* some physicians named more than one source of information PAGENO="0394" 5866 GO~fl~~ITIVE PROBLEMS IN THE DRUG INDUSPI~Y GENERAL SOURCES OF INFORMATION "Which of these methods do you find most important to you jersonally in learning about new drugs?" A TOTAL OF 55 physicians in the study Journal articles and Journal advertising direct mail detail men f~3j~ other sources induding county meetings, staff meetings Legend: ~] Internists (3 interrnsts accounted for L j 57% of prescriptions written and 63% of dollar volume for Serpasil during the prescription audit periods). non-prescribers of Serpasil conventions other Serpasil prescribers PAGENO="0395" COMPETITIVE PROBLEMS IN TIlE DRUG INDUSTRY 5867 CHARACTER OF SERPASIL JOURNAL. ADVERTISING Ciba ran multiple half pages and full page ads in each issue of a selected journal list. Copy and art emphasis was on drug action and product name. IN T*NNION AND NVPN*T*NSION ~ ~!1~ © Bi tN. (rcscrpine ala) A pure crystalline alkaloid of rauwolfia root first identified, purified and introduced by CIBA In anxiety, tension, nervousness and mild to severe nen. roses-as well as in byperfension-SERPASIL provides a nonsoporific tranquilizing effect and a sense of well. being. Tablets, 0.25 mg. (scored) and 0.1 mg. CIBA $*N$UT. NI. PAGENO="0396" 5868 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY INTERVIEW PROFILE G.P. "E" G.P "E" is one of the younger doctors, only re~ cently admitted to practice. He is on the staffs of the hospital and a small clinic. So fat, he has attended all local medical society meetings and most conventions at the state level. He learned about some of the drugs on our list while a resident in training. In fact, he did some experimental work there on one of them. A more.frequent.than.average prescriber, be admits that he is more susceptible to most ad~ vertising than many other doctors are. He sees all detail men, uses samples on a trial basis, reads or looks through every house organ that he receives and the direct mail that is more comprehensive than single sheets or cards. To him, medical. journal advertising is the most worthwhile source of information and direct mail the least. His original use of both Buta~ zolidin and Serpasil was impelled by advertise~ menis he read in journals. He receives four of the leading journals, reads all four, and considers J.A.M.A. the most useful to him personally. As he reconstructs it, he gets his preliminary information on new products from detailing and from direct mail, both of which sthnulate him to look for information in the journals. He regards the professional articles as a more certain and accurate check on the products, and he leafs through the journal advertising to re~ mind himself about them. Then comes the first trial during which he prescribes the drug, if the reactions are favorable, he continues to use it. Because of his relatively recent experiences in training, he also tends to keep close to the rec~ ommendations of others on the hospital staff about products they are utilizing on an experi mental basis. PAGENO="0397" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5869 MEDICAL JOURNAL READING Most Fond du Lac physicians subscribe to more medical journals than they are able to read, but each of them manages to look through at least one. When shown a basic list of 15 of the more popular medical journals, the physicians re~ ported that they receive an average of about 5 journals apiece, and that they read or look through an average of three each. "Which of these 15 medical publications do you happen to receive? Which have you happened to read or look through during the last thirty days?" The response indicates the following num* ber of journals were received and read: Read or looked Received tbrougb Total doctors 55 55 One journal .4- 7.2 11-20.0 Two journals 1- 1.8 11-20.0 Three journals 11-20.0 13-23.6 Four journals 8-14.5 8-14.5 Five journals 14-25.4 7-12.7 Six journals 6-10.9 3- 5A Seven journals 7-42.7 1- 1.8 Eight or more 4- 7.2 1- 1.8 The problem which the busy physician is con~ fronted with in reading his journals is well stated by Part.Time Specialist B, who receives lOof the 15 journalsandgetstoreadonly three or four- "I lay aside those with particular articles 1 want to read. Then they pile up in a stack until one day I close my eyes, pick up the stack of books and dump it ouC PAGENO="0398" 5870 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY SECTION III - Chapter 2 - The Story of Eaton's Puradantin DRUGS FOR URINARY TRACT INFECTIONS Fourother drugs were included for study in the group which may be considered as competitive with Furadansin. Strictly speaking, however, two of them are analgesics rather than ~ntibac- terial agents. Pyridium and Serenium, Sharp & Dohme and Squibb products, respectively, are azo dyes and established urinary tract analgesics. Mandelamine, made by Nepera, is a combi- nation of two older ~rug~. rnethenamine and mandelic acid. Mandelamine's action is bac- reriostatic and it appears to be competitive with Furadantin. Thiosullil (an Ayerst product) is a modern sulfonamide used for urinary tract infections. It is competitive with Furadantin both in in- dications and in timing since it appeared on the market at about the same time. Furadantin, or nitrofurantoin, was first syn- thesized in 1948 after Norwich and Eaton had been working on the nitrofurans since 1939. It was brought to market in February 1953 and announced to urologists. In 1954, i~ was made available to the entire profession. PAGENO="0399" COMPETITIVE PROBLEMS IN TIlE DRUQ INDVSTRY 5871 NATIONAL PROMOTION or FURADANTIN Dollar estimates of the amount of Furadantin urologists, pediatricians, and general advertising and promotion are not readily at practitioners hand, but some idea of the cost may be obtained 25 mailings were made in the first quar- through indicated use of various media. ter of 1956 to the above groups plus At the time of the study about 150 different obstetricians and gynecologists. pieces of direct mail had been sent out- Some mailings were also sent to druggists, technicians, and hospitals. 12 mailings were made in 1953 to urologists only Furadantin was detailed nationally, although not until October 1954 in the Fond du Lac 110 mailings were made in 1954 to area. A sizable part of the advertising budget was Samples of Furadantin had been sent to or left devoted to journal advertising. The 1954 jour- with selected physicians and about half (28) nal schedule serves as an example- of those in the Fond dii Lac area recalled re- ceiving samples. American Journal of Medicine 12 insertions Annals of Internal Medicine 12 insertions California Medicine 12 insertions Eaton had helped defray the expense of scien- GP 12 insertions tific exhibits at four national conventions of J.A.M.A. 60 insertions urologists and the profession and at one meet- Journal of Urology 12 insertions ing of the New York Academy of Medicine. In Medical Examiner 17 insertions addition, from the introduction of Furadantin Medical Times 12 insertions up to the time of this study, Eaton had shown Modern Medicine 12 insertions commercial exhibirs at 66 medical conventions. World Medical Journal linsertion New York State Journal The only market research done for this product of Medicine 12 insertions consisted of prescription panel surveys to check Journal of Pediatrics 7 insertions the size of the market, the competition, etc. No American Druggist 10 insertions test markets were used. PAGENO="0400" 5872 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY FURADANTIN DETAILING IN THE FOND DU LAC AREA No detail man was assigned by Eaton to the Fond du Lac area until October 1954. After that, the Eaton representative' visited Fond du Lac eight to ten times a year for two days each time. On his lirst visit he stopped at the largest pharmacy to make an inventory of similar or competitive drugs and left samples. In order to work efficiently he went through the entire list of physicians in Fond du Lac (he did not visit the surrounding towns) and eliminated unlikely users of Furadantin - such as surgeons, pathologists, radiologists, anesthetists, etc. He further refined his list by including only those whom he expected to be the heaviest users of the drug. These physicians he called upon three or four times to discuss Furadanrin. All those on whom he called knew something of the drug already. In his first year in Fond du Lac he spent about 8O~ of' his time pushing Furadantin. This amounted to some 40 hours, only a fraction of his office waiting time. On each visit he stopped at the pharmacies and at St. Agnes Hospital as well. PAGENO="0401" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5873 SALES OF DRUGS FOR URINARY TRACT INFECTION.S The need for Furadantin or competitive drugs was apparently much more restricted than many of the other drugs studied. During the. four weeks covered by the pre- scription audits a total of only 40 prescrip- tions on the five drugs were filled and 14 of these were for the two analgesics, Pyridium and Serenium. The dollar value totaled $211 for the five drugs. The 40 prescriptions were written by 20 physicians. On an annual basis this amounted to ap- proximately 520 prescriptions and about a $2750 market not counting refills or direct dispensing. Analgesics excluded, the annual totals would have come down to about 340 prescriptions and $2200. Sales of these products are too small to justify comparisons of the four audit periods. FURADANTIN SALES Only 13 Furadantin prescriptions were filled during the four periods under audit, but be- cause this product was relatively expensive (it was reduced in price in March 1955) the dol- lar value was nevertheless substantial. The price of these 13 prescriptions was $148. This meant that Furadantin made up 33% of the prescriptions for the five drugs and 70% of their dollar volume. In terms of an- nual sales this became about 170 prescrip- tions and $1925, exclusive of refills and whatever amount may have been dispensed by the one physician who said he had dis- pensed this drug. 81-280 0 - 69 - pt. 14 - 26 PAGENO="0402" ~874 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY PROFESSIONAL EVALUATION OF FURADANTIN Furadantin was not as controversial a drug nor perhaps so spectacular as some of the drugs reported in this study so it had not had as many articles written about it A professional bibliography starting in 1952 and including some of the early 1955 arti- cles had 79 listings, however. And 13 papers in which nitrofurantoin oc- cupied a major portion of the discussion had been read at medical meetings from 1952 through 1954. CONCENTRATION OF FURADANTIN PRESCRIPTIONS A total of 26 Fond du Lac area physicians re- ported that they had prescribed Furadantin at some time but only five of them appear in the four prescription audits. Two, of these doctors accounted for 10 of the 13 prescriptions-Internist "A" and Specialist ~ These two doctors were directly respon- sible for 87~~ of the Furadantin dollar vol- ume. The other three doctors are another internist and two general practitioners with special interest in obstetrics and gynecology. Four- Week Furalantin prescriptions Number Price 13 $149 7 $103 3 26 3 20 The above figures (although not large) seem to establish the fact that in the Fond du Lac area, at least, Puradantin was a spe- cialist's drug. This was a fact that Eaton evidently realized when it elected to stress it most strongly among urologists. Total Internist "A" Specialist "A" Threeotherprescribers PAGENO="0403" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 587~ SOURCES OF INFORMATION ABOUT FURADANTIN The most unique feature of the Puradantin story in Fond du Lac is the apparent influence that other prescribers attribute to Specialist "A' One prescriber in every three states that Spe- cialist "A" recommended Furadantin to him. "Where did you happen to get the informa- tion about Furadantin which led you to prescribe it?" 21 Furalantin prescriber: Specialist."A" 7 Detail man 7 Journal articles 6 Directmail Hospital staff meetings 2 Medical journal advertising 1 National conventions 1 County meetings 1 Specialist "A" himself said that he learned of the drug at a national convention. He was also sampled and later was detailed, too. Internist "A" credited journal articles for telling him of Furadantin. He was never de- tailed or sampled. Of the 26 prescribing doctors, 18 were de~ tailed and 17 received samples. Of the 29 non-prescribers, only 9 were detailed and 11 received samples. Most of the 26 prescribers did not get around to prescribing the drug until the latter part of 1954. Specialist "A" first prescribed it in June 1954 and Internist "A" began using it in August or September of that year. Other comparisons of Furadantin prescribers and non-prescribers as to source of informa- tion are unproductive and will be passed over here. PAGENO="0404" 5876 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY NATIONAL PROMOTION OF FURADANTIN Dollar estimates of the amount of Furadantin advertising and promotion are not readily at hand, but some idea of the cost may be ob- tained through the indicated use of the various media. At the time of the study about 150 different pieces of direct mail had been sent out- 12 mailings were made in 1953 to urologists only. 110 mailings were made in 1954 to urologists, pediatricians, and general practitioners. 25 mailings were made in the first quarter of 1956 to the above groups plus obstetricians and gynecologists. Some mailings were also sent to druggists, technicians, and hospitals. Furadantin was detailed nationally, although not until October 1954 in the Fond du Lac area. A sizeable part of the advertising budget was devoted to journal advertising. The 1954 journal schedule is shown here as an example- American Journal of Medicine Annals of Internal Medicine Medical Times 12 insertions Modern Medicine 12 insertions World Medical Journal 1 insertion New York State Journal of Medicine 12 insertions Journal of Pediatrics 7 insertions American Druggist 10 insertions Samples of Furadantin had been sent to or left with selected physicians - about half (28) of those in the Fond du Lac area recalled receiving samples. Eaton helped defray expenses of scientific exhibits at four national conventions of urologists and the profession, and at one meeting of the New York Academy of Medicine. In addition, from the introduction of Furadantin up to the time of this study, Eaton had shown commercial exhibits at 66 medical conventions. SUPPORT FOR FURADANTIN. IN MEDICAL JOURNALS As Furadantin was not as controversial a drug nor perhaps as spectacular as some of the other drugs studied, it hadn't had as many articles written about it. A professional bibliography starting in 1952 and including some of the early 1955 articles lists 79 papers. In addition, 13 papers in which nitrofuran- tom occupied a major portion of the dis- cussion had been read at medical meetings from 1952 through 1954. It is probable that there was little public influence brought to bear upon the profes- sion regarding this drug. California Medicine GP Journal of the A.M.A. Journal of Urology Medical Examiner 12 insertions 12 insertions 12 insertions 12 insertions 60 insertions 12 insertions 17 insertions PAGENO="0405" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5877 CORRELATION WITH SOURCES OF INFORMATION ON FURADANTIN "Where did you happen to get the information about Furadantin which led you to prescribe it?" - 21 prescribers III 1 7 medical journal, articles and advertising 1 4 1 direct mail Eli national conventions L ~ I specialist A* L 7 ] detail men 1 3 ] others including county meetings and hospital staff meetings (Some physicians gave more than one source of information) The unique feature of the Furadantin story in Fond du Lac is the apparent influence that prescribers of the drug attribute to a specialist (specialist A) in the community. PAGENO="0406" ~Th: COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY CHARACTER OF FURADANTIN JOURNAL ADVERTISING Eaton selected a few publications and ran Furadantin ads in high frequency in these journals. Copy stressed rapid action and a symbol ~ras developed ~urine glass) to demonstrate the best product benefit visually. use FURADANTIN first.... IN URINARY'~\ - JTRAcT INFECTIONS for: rapi clearmg \ / of the / urine \.I. ____________ Sn 30 mInutes: antibacterial concentrations in the urine In 24 hours: the urine is frequently clear Sn 3 to ~ days: complete clearing of pus cells from the urine In 7 d~ys; st~riizatIon of the urine in the majority of cases W~tIt 1uradan6n there,is no proctitia, pruritus ani,, or crystalluria. Atn~e odoSs d.s.ge: F..s, 10 ag. tablet. da,ly, taken with meal. nod wIth food or milk t.fore ,etieing. SOmsd 100 mg tablet.. OmlSuopension. 5mg. piece. NAYON LABONATOASU $oNwscs, New vomit P11 RADAN TIN' brand ef nltr.fuonnt.ln, Iet.n PAGENO="0407" COMPETITIVE PROBLEMS IN THE DRUG INDUS~2RY 5~79 INTERVIEW PROFILE-SPECIALIST B Specialist B is one of the few Fond du Inc doctors who is on the staff of the hospital only and is not affiliated with a clinic. He has been. practicing, wholly in Fond du bc, for about 25 years. He says that he attends mOst of the county medical society meetings, a couple of state meetings each year, and every meeting of his specialty group in Milwaukee. An average prescriber (40 or so prescriptions a week) he has used only two of the live audited drugs, Furackintin and Achromycin. He credits his use of both drugs equally so medical journal articles and `journal advertis- ing. He has never been detailed on Achromycin and claims never to have been sampled on any of the five products under investigation in this study. Specialist B is a staunch supporter of journal advertising and of company periodicals. He subscribes to and reads three journals and says that the company periodicals "are much pre. ferred to `detail men:' He grants. audiences to detail men only when he has "free time-and that is rare:' lie reserves his strongest criticism for direct mail, saying that over 90 per cent of it goes into his wastebasket unread. Such mail that he selects to read is chosen primarily by company narne~' PAGENO="0408" 5880 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY COMMENTS ON JOURNAL ADVERTISING Just as in other media, some Fond du Lac area doctors appear to rely heavily upon ad- vertising in medical journals while others say that they ignore it. Some of the favorable comments- Part-time Specialist "A": "I am truly a cover-to-cover reader of the journals and so I have to read all of the ads' Part-time Specialist "D": "To me there is no real distinction between the ads in the journals and the scientific articles. I read the journals a lot, so I pick up a good deal of scientific information on products:' General Practitioner "C': "I like journal ads-particularly those with pictures, charts and graphs. An attractive ad helps a good deal to stimulate my interest in a product:' Eye Doctor "C": "The advertising in the professional publi- cations is a more reliable source once a detail man has made me aware of the exist- ence of a product:' Some comments about auxiliary effect of jour- nal advertisements- Internist "B": "I don't often notice them except for very new products which I have not heard about before. Seeing the ad lets me ask questions of the detail man his next time around:' General Practitioner "K": "I read them if they deal with a product I am interested in. and which 1 have heard about somewhere else:' Part-time Specialist "G": "Such ads are a reminder to me, because they raise a certain amount of skepticism about whether a drug will do what it claims to do:' And some comments from those who accept journal advertising with reservations- Surgeon "E": "They are a valuable source, but I resent advertising which is non-professional. What the average doctor is looking for is a drug to do a specific job, so if the advertising gives technical detail without ballyhoo he is satisfied." Eye Doctor "D": "It is often too long before definite data are out on a drug so sometimes I try a product from specifications in the ads, but I don't like to do this unless it is not going to be at all risky' Finally, the inevitable disclaimers about ad. vertising- General Practitioner "M": "1 never look at the ads too muciL" Surgeon "F": "I rarely look at the journal adt:' General Practitioner "H": "I never read journal advertisin( PAGENO="0409" COMPETITIVE PROBLEMS IN THE DRUG INDUSf1~RY 5881 (AMA. Fond du Lac Study, 1956) SECTION III Chapter 3. The Story of~r"sButaZ0li4i~!i THE NON HORMONAL ANTIARTHRITICS. Butazolidin and d!e drugs included foi study with it are labele~l here a~ antiarthritics al- though they have other uses as well. The basic active ingredient in the other four drugs is a salicylate, while Butazolidin is the trade name for phenylbutazone. These drugs of course compete with corti- sone, corticotropin (ACTH) anJ related products but are of synthetic, nonhormonal origin and may be considered here as a sepa- rate family. Sodiunisajj~d~c is an official drug Sodium Salicylate Enseals is a Lilly product. Pabalate contains sodi~ sail late, para- aminobenzoic acid and ascorbic acid. It is a Robins product. Pabalate-Sodium Free is also a Robins item in which pQtassium replaces sodium. It isin- tended for use in place of Pabalate where sodium intake must be restricted. Pabirin is a produà of Smith.Dorsey. It con- tains aspirin, para-aminobenzoic acid and ascorbk~ acid. It is also available in capsule form with codeine. Butazolidin was the latest of these products to appear. It came on the market in May 1952, four years after phenylbutazone was first synthesized in the Geigy laboratories. No estimate is available of the amount of research funds which went into developing the product, but a total of five years was spent working on it before it was marketed. PAGENO="0410" 5882 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY NATIONAL PROMOTION OFBUTAZOLIDIN In the first seven or eight months on the mar- ket, the national advertising and promotion cost for Butazolidin amounted roughly to $420,000. The following are the amounts spent from May.to the end of 1952- The largest advertising expense in. curred was for direct maiL The 21 mailings made in 1952 came to a total cost of about * $190,000 Detailing was of secondary impor- tance as the company had oniy 14 representatives at the time, and these were located primarily on the east and west coasts. At no. time was there a detail man for the Fond du Lac area. The 1952. costs are estimated at $140,000 Ads were~ run in eleven medical journals during 1952 at a cost of about $45,000 Sampling was done in three mail- ings in 1952 $40,000 Exhibits were made at medical meetings in four states (not Wis- consin) $6,000 Very little marketing research was done on Butazolidin. No test markets or sample sur- veys were used. The market was studied "in general but without a formal research pro- gram' PAGENO="0411" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5883 PROFESSIØNAL EVALUATION OF BUTAZOLIDIt~1 (Pk..y~is..) Like most of the antiarthritic drugs, Butazolidin has occasional tendencies toward undesirable side reactions in individual cases. The possibil- ity of such limitations in comparison with the marked therapeutic effects'Iias given risen to a large number of professional communications. At the time of the study, a bibliography was available listing over 500 references to writ. ings about phenylbutazone, or Butazolidin, specifically. These articles, letters to editors, etc. were divided roughly three-to-one in foreign.and United States publkations, show- ing the wide interest in this drug. No estimate has been made of the number of papers presented on this product at pro. fessional meetings but it is' no doubt sub. sandaL GENERAL PUBLIC INFI~UENCE Some newspaper publicity had appeared on Butazolidii~, `but perhaps its most important general public notice was by word of mouth. it is possible that some public demand was created by its discussion by the American Rheumatism Association. No public relations programwas established. PAGENO="0412" 5884 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY NONHORMONAL ANTIARTHRITIC SALES These five antiarthritic drugs together appear to have a fairly steady or even slightly ipcreas.. ing market in the Fond du lac area, and a widespread appeal to the doctors of the area. During the four weeks of the prescription atIdits a total of 28 of the 55 doctors pre. scribed one or more of the five drugs in this group, writing a total of 96 prescriptions which sold at $225. On an annual basis this would amount to about 1250 original pre. scriptions and a $2900 market, exclusive of refills and direct dispensing. Both the number and dollar value of the prescriptions were larger during the last week of the audits than for earlier weeks. Original Prescriptions 5 drugs Week of Audit Number Price May 1954 23 $59 September 1954 20 $49 January 1955 21 $45 May 1955 32 $72 Butazolidin, Pabirin, Pabalate, Pabalate.Sodi. urn Free and sodium salicylate. PAGENO="0413" COMPETITIVE PROBLEMS IN TIlE DRUG INDUSTRY 5885 BUTAZOLIDIN SALES During the prescription audit periods, a total of 22 prescriptions for Butazolidin were filled. These prescriptions were written by only six doctors, whereas 22 of them reported that they had prescribed it at some time. The price of the 22 Butazolidin prescriptions came to $93, and indicates that prescriptions for this drug were priced higher than for the salicylates (although considerably lower than for the hormonal products). Thus, the Butazolidin prescriptions made up about a fourth. (23%) of the total number of pre. scriptions for the five drugs and twolifths (41%) of their total retail dollar volume. In annual sales the above rate of Butazolidin prescriptions translates into about 285 pre~ scriptions and $1200 at retail, exclusive of refills and direct dispensing. Or, looked at another way, if the 55 Fond du Lac area physicians are considered to share 1/3000th of the national promotion, exclusive of detailing, then this market's share of the cost projected for the first year might have been about $150. This may be compared with this later year's retail sale figure of $1200 for original prescriptions filled, PAGENO="0414" 5886 CO~ETITIVE PROBLEMS IN TUE DRUG INDUSTRY CONCENTRATION OF BUTAZQLIDIN PRESCRIPTIONS It is important to note that 13 of the 22 Bua. zolidin prescriptions tilled during the four audit periods were written by one genesal practitioner, G.P. "G:' And he probably was not always the heavi~ est prescriber of Burazolidin. Onepharrnacist stated that "it is not a big number today,.but used tobeWhenDr.- was alFvelastyearwcusedtobuyinthe thousands; now we buy it in the hundieds:' OP.. "O'~ accounted for $48 of the $93 worth of Butazolidin prescriptions during the audit periods, while the next largest pte* scriber (G.P. "A") in his three prescriptions accounted for only $19 of the ~oea1. Unlike Serpasil, Butazolidii~ apparently was a general practitioner's drug in Fond du I1sc. The four top prescribers of Butazolidin and of the competidve drugs were all general practitionets. PAGENO="0415" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5887 SOURCES OF INFORMATION ABOUT BU~AZOLIDiN Because the sources of information about Buta- zolidin were limited so far as Poid dii lac physicians were concerned, they report only four sources which originally led thorn to pie. scribe it~ The two sources most often mentioned were journal articles and journal advertisin& `Where did you happen soget the informa. tion which led you to prescribe Butazolidin?" 21 Butazolilit* presc,ibr,s Papers and articles in journals 12 Medical journal advertising . 11 Direct mail . . 4~.. Other physicians . 2 G.P. "G" named two sources-journal aid.. des and direct mail-u. prompting him to write his first prescription. Most Fond du Lac area physicians (36) in-. dicated thai they had never received samples of Butazolidin. 12 of the 21 prescribers and 7 of the 34 nonprescribers recalled hav- ing been sampled G.P. "G" was not among the earliest pie. scribers of this drug. Nine of the 21 doctors who had prescribed Butazolidin began using it prior to 1954, but G.P. "G" waited until thefirstpartofthatyear. PAGENO="0416" 5888 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY GENERAL SOURCES OF' INFORMATION Butazolidin prescribers are almost indistin- guishable from other Fond du Lac physicians in their ratings of general sources of informa- tion about new pharmaceutical products. In proportion, they mention detail men and journal articles about as often as nonpre- scribers do. "Which of these methods do you find most important to you personally in learning about a new drug?" Detail men P~rs, articles in journals Journal advertising Direct mail National conventions - 1 ~ - Reference books 1 Postgraduate courses - However, in their evaluations of the com- mercial media, Butazolidin prescribers do reveal some differences from nonprescribérs. The prescribers appear to be relatively im. ~ressedornmerc~f~ources of informa- tion, except that ~~(ewer of them are ~i&iof~oumal advertising "Which of the four sources of information from manufacturers do you find most worth. while for learning about new products?" 21 Butazoliriin 34 so.- prescriber; fre;c,ibøz 13 18 2 5 1 4 5 5 2 "Which do you consider least worthwhile to you personally?" 21 Bjv:azolia'in 34 non- prescriber; prescriber; Direct mail Journal advertising Derailing Company periodicals - Nochoice 2 The largest prescriber of Butazolidin, G.E "G' thought that detailing was the most worthwhile, Detailing 21 B,aazolidin 34 non- tömpany periodicals prescriber; prescriber; Journal advertising Direct mail 8 12 No choice 7 12 2 2 2 2 2 2 11 4. 4. 19 12 1~ PAGENO="0417" * MARKETING MIX FOR BUTAZOLIDIN In the first seven or eight months of its exist. ence on the market, the national advertising and promotion cost for Butazolidin amounted roughly to $420000 The following are the amounts spent from May to the end of the first year of promotion. $190,000 Direct Mail $45,000 journaLcidv. $40,000 sampling * 14 detail men located primarily on the east and west coasts. A: no Sims has there been a detail inanin the Pond du Tic ares. COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5889 $6,000 convention exhibits 81-280 0 - 69 - pt. 14 - 27 PAGENO="0418" 5890 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY MEDICAL ARTICLES AND BUTAZOLIDI N At the time of the study, a bibliography was available listing over 500 references to the use of phenylbutazone (Butazolidin). These articles were divided roughly three- to-one among foreign and United States publications, showing the wide interest in the drug. S~me newspaper publicity had appeared on Butazoliclin; perhaps its most important public notice had been by word of mouth. It is possible that.some public demand bad been created by discussion through the American Rheumatism Association and by articles written by medical columnists. The drug is restricted to use on prescription only. SOURCES OF INFORMATION ABOUT BUTAZOLIDIN `Where did you happen to get the informs. non which led you to prescribe Butazolidin?" L . 21. T 12 1 L 11 *] 1 . direct mail other physicians Butozolidin prescribers Papers and articles in medical journals Medical journal advertising some physicians named more thati one source of information PAGENO="0419" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5891 GENERAL SOURCES OF INFORMATION Butazolidin prescribers are almost indistinguishable from other Fond du Lac physicians in their ratings of general sources of information about new pharmaceutical products. `Which of these methods do you find most important to you personally in learning about a new drug?" Detail men Reference books 21 Butazolidin prescribers 191 1 nonprescribers ] 12 1. Postgrad. courses `Journal articles and journal advertising combined lead all other methods of com munication in telling physicians about new drugs This is true of the prescriber and nonDrescriber of Butazolidin. Journal articles* _____ 12 J Journal adv.* E~J Direct mail 1~i E~1 Conventions Nati. E~I County & Staff Meetings [~] PAGENO="0420" 5892 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY INTERVIEW PROFILE, GENERAL OFFICE. PRACTITIONER `~A" GOP. "A" is one of the older doctors in Fond du Lac-a former surgeon who has onw it- stricted himself to general office practice~ He remains one of the more frequent prescription writers, however, and is still a clinic and hospi- tal staff member. Like many other older doctors, his limited mi~him~be~veinot~ professional activities. He attends national £~X~itI2~i~te conventions, county medical meetings and several surgical society meetings as welL He regularly reads four of the leading medical journals, but he likes JAMA best and considers it the most valuable as well as the journal he feels most duty-bound to read~ He says that journal articles are the most important sources of his information about new drugs, and jour. nal advertising gave him the information which led to his first prescriptions of Achrornycin. He first prescribed Serpasil after hearing about it at a convention and Butazolidin when a local doctor recommendecJ it to him. While he sees all derail men who call, he thinks of that method as the least worthwhile of dat company media. He says that he teases them a little bit each time but he resents those who try to push their products soóhard. * He reads about half of the house organsand * very little of the direct mail that is sent to him.. Once in a while a piece will catch his eye, um * ally because it reminds him of something from his earlier days-then he will save iL He will seldom prescribe a new product bet relies on his old stand.bys until sufficient .tech~ nical data has been collected to indicate a de~ sirable reason to make the 4iange. He will wait a considerable time until definite1 tuchnial * data does appear in the journal& PAGENO="0421" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5893 THE CHARACTER OF' BUTAZOLIDIN ADVERTISING Butazolidin advertising was characterized by the use of anatomical drawings and copy emphasizing action, efficacy and indications. arthritis and allied disorders Rapid ReUef of PI~ usually within a fewdiy$ Greater Freod. * and Ease .f Movement functional improvement in a signiLead percentage of Cases N.Development of T.ler~aes even when administered ovar aprolongedpedod BUTAZOLIDIN* (knddphsá~ecuuss) Its usefulness and cthcacy substantiated by numerous published reports, BUTAZOUDIN baa received the Seal of Acceptanceof ibeCouncil on Pharmacy and Chemistry of the American Medical Association for use in: * Costy Arthritis . * Rheumatoid Arthritis * Psorlatlc Arthritis * Rheumatoid Spoadylitis * Painful Shouldev(lsaeludlng perltendinIth,esp.ui1da~bursltie and acst* arthrItis) Since SUTAZOUDIS Is. potent ageni.pstlent* (or therapy should be selected with care; dosage should be judiciously controlled; and ths patient should be segelsily observed so that treatment may be discontinued attist Smi 4 of teals reneths. Deacdpsive litermsre .,eiIebk an re~seat. 5vvatouss~* (brand .1 pbesplbvtsssan),esSsed ssMs,sdlS5~ f~ GEIGY PHARMACEUTICALS onni., otCelsy ciastul Csipsntm f~ trY 335 Qoct S.,esi, Mm. TM U.*T. ~ te Cab: Ge~ *osmsOS*, MimeS *111 PAGENO="0422" 5894 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY READING OF'. HOUSE ORGANS Fond du Lac area physicians receive company periodicals from. pharmaceutical firms in even greater abundance than medical journals, and they look through or read these house organs in fairly high proportions. The doctors were shown a list of eleven comrn pany periodicals. On the average each doctot said that he received nine of these publica~ tions, and that he usually read or looked through six or seven of them. While seven doctors say that they never look at comrn pany periodicals, 15 indicate that they look through all eleven. "Whiéh of these companyperiodicals do you li~pen to receive? Which of these do you usually read or look through?" House organs Read or received looked through Total doctors 55 55 Alleleven * 28 15 Nineorten 12 9 Seven or eight 5 6 Piveorsix S 8 Thteeorfour 3 6. Oneortwo 2 . 4 No house organs - 7 Three company periodicals are each singled out by five or more doctors as doing the best job. They are: Symposia of Ciba, named by 11 doctors Therapeutic Notes of Parke, Davis, named by 10 doctors W21a/s New of Abbot named byS doctois PAGENO="0423" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5895 SECTION III - Chapter 4. The Story of Lederle's Achromycin DEVELOPMENT OF THE BROAD SPECTRUM ANTIBIOTICS Soon after production of penicillin was begun ~luring 1942 and 1943, wide attention was directed to discovering other antibiotics. For example, Dr. Benjamin M. Duggar joined the Lederle staff specifically to lead a program for screening potential antibiotics. In a little over ten years the pharmaceutical industry isolated and studied more than 3500 different antibiotics, but low potency or high toxicity prevented use of almost all of them. The average of success has been about one new useable antibiotic a year. The five antibiotic drugs included in the Fond du Lac study are "broad-spectrum' since they are active against both grain- negative and gram.positive bacteria, rick- ettsiae and certain viruses. The expression "broad.spectrum" dissociates these drugs as a class from such drugs as penicillin, which is active primarily against gram-positive bacteria. The five drugs have a common derivation- from various species of the actinomycete mold, Streptomyces. Their chemical formu- las, except that for Chloromycetin, also are very similar as evidenced by their generic names, ~nd Tetracyn is actually the same as Achromycin. Because exact dates of scientific discoveries are difficult to establish, the most useful dates are those of introductory mar-' keting: Aureomycin or chlortetracycline (Lederle) December 1948 Chloromycetin or chloramphenicol (Parke, Davis) March 1949 Terramycin or oxytetracycline (Pfizer) M~O Achromycin or tetracycline .(Lederle) November 1953 Tetracyn or tetracycline (Pfizer') February 1954 Because of their wide range of applicable use the five drugs come in a variety' of forms. Aureomycin, for example, is available in 20 forms while Achromycin comes in 11 forms ...including capsules, tablets, drops, oint- ment, powder, and vials for intramuscular and intravenous injection. PAGENO="0424" 5896 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY NATIONAL PROMOTION OP ACHROMYCIN Achromycin was launched with a very heavy advertising budgut in its first year-somewhere in the neighborhood of $2,500,000. Most of this advertisingwas of ~ for I example, every physician in the country re~ ceived on an avërageof two Achromycin mail- ings each week. Heavy outlays were made for other media, especially detailing- Detailing $1,026,000 including literatures an4 spin- ples ($85,500 a month) Direct mail ~ 851,000 105 mailings to full list of M.D.'s 7 dental mailings 2 druggist mailings Medical journal advertising $ 470,000 monthly insertions in Modern Medicine, Medical Economics, regional journals, all state journals, 116 county journals, and most specialty journals. 26 insertions in ~he journal of the American Medical Arm- ciation Exhibits at medical meetings 200 during the year $ 100,000 * (plus sales promotion devices such as pens, tongue depressors, and brushes) De~~the fact thtatj~asts~earswere s~~on research to develop this drug and tce~ys spent to promote ~no research of any kind was undertaken to determine the potential market, advertis- ing appropriation, media, etc. Of course, it could be argued that Lederle already had a * wealthY of experience on Aureomycin and * other prcxlucts to go on; but even so, a mar- keting research department would have been needed to best utilize this information. PAGENO="0425" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5897 PROFESSIONAL EVALUATIONS OF ACHROMYCIN (TETRACYCLiNE) It can -be said, with reasonable justification, that the former success of `penicillin and AureOrny.. cm had the professional world eagerly awaith~g' Acbromycin, especially since it was reported to be effective over a wider range and to- be some~ whatbetter u)!erateL A -partial bibliography of only the first year's writings on Achromycin shows 118 tides and the number of papers read `at medical meetings is also impressive. GENERAL PUBLIC INFLUENCE The influence of the public on physicians with respect to Achromycin may or `may not have been of much importance. - Ontheonehand,asoneolthe"wond~r -- drugs" Achromycin had received its share of attention in the lay press; and the public should.have been more aware of it than. of any other drug. On the other hand, physicians were made thoroughly aware of Achromycin early enough so that any mention of this drug by patients would have been like "carrying coal to Newcastle:' Then, too, man pie rob.. ably did not PAGENO="0426" 5898 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY ACHROMYCIN DETAIL.INQ IN THE FOND DU LAC AREA The report of the Lederle detail man indicates how intensive the detailing on Achromycin. was: He had some 300 doctors in his territory and managed to see 150 or l6Oof them a month, giving the heavy prescribers the most atten. tion. Thus, he saw some doctors three times a month, some once a month and some just once in a while. He visited the largest vol wne druggistevery week, the least busy ont once a year. He spent a day a week in Fond du Lac and one day a month in Chilton. On his first visit for Achromycin, he checked with the pharmacies to make certain that they had received their initial supply of the 250 mg capsule. Later, when other Achromycin products were added to the line, he used different. methods of detailing for different doctors. With one doctor he would show the cap- sules and tablets and leave samples of them. As new dosage forms were introduced he might concentrate on the cherry flavored oral suspension and leave a sample of that. If one doctor showed little interest in a par- ticular product form, the detail man would show him another. In most cases he found that the doctors already knew of Achromycin from journali and direct mail. PAGENO="0427" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5899 BROAD SPECTRUM SALES The five broad spectrum drugs as a group had by far the widest usage among Fond du Lac physicians of any drugs studied, both in num- ber of prescriptions written and in dollar volume. During the four prescription audit weeks, for example, 41 of the 55 physicians each wrote prescriptions for one or more of the five anti- biotics. On an average, these prescribers wrote 31/2 broad spectrum prescriptions a week, at a cost to their patients of about $4A0 a prescription. On an annual basis, this would add up to about 7500 original prescriptions and $33,000 for the Fond du Lac market alone, exclusive of refills and direct dispensing by physicians. Demand for drugs in this group was well es- tablished in May 1954, at the time of our first prescription audit. Sales continued at a fairly steady rate except for a spurt in the winter months, as repre- sented by our January audit week. . Number Price May 1954 129 $504 September 1954 128 $632 January 1955 202 $841 May 1955 118 $567 ACHROMYCIN SALES Achromycin is a vet)' broad-based drug, and 50 of the 55 doctors reported having prescribed it. The only physicians who did not were two EENT men, an anesthesiologist, a radiologist and a pathologist. During the four audit peri- ods 260 prescriptions were filled in the Pond du Lac area over signatures of 33 physicians- an average of two a week per prescriber. The total price of these Achromycin pre- scriptions was $1224. This figure represents almost half (49%) of the total for die broad spectrum drugs, Annual projection of these figures adds up to 3400 prescriptions and $16,000 at retail for Achromycin alone -again not counting refills or direct dis- pensing. The Fond du Lac area's pro rata share of the first year's advertising budget for Achromy-. cm would have amounted to about $850. This means that despite the heavy pr~no- tion in total dollars the Achromycin Cam- paign was relatively inexpensive. Original pre:crjption.r Week of audit 5 drug: PAGENO="0428" 5900 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY SALES OF COMPETITIVE DRUGS The four audit weeks represent a very .interest~ ing period in the histories of these five drugs. Aureomycin, far from being rep~aced by A~ivaj~ta1fsecond in sales in du Lacas late as May 1955. chioromycetin, which had suffered aserious setback apparently because of reports of blood dyscrasias, was making a comeback at the end of the period due so appearance of more reassuring reports. Tetracyn, another brand of tetracycline, Was not at any time an important factor in d~ market Here are the number of prescriptions filled. for Achromycin and its four competitors dur- ing the audit weeks: Week of Or! escri jtio~is of ~. Acbro- Aareo- Te,~- CMo,o. T.sr~. auuit myci~i myci. mycis myceli. cys May1954 57 51 17 1 3 September 1954 67 37.12 4 8 January * 1955 81 5.1 3O~33 7 May1955 55 32 8 `22 1 PAGENO="0429" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5901 BREADTH OF ACH ROMYCI N PRESCRIPTIONS For most of the drugs reported in this study the breadth of usage was narrow, only some of the physicians having prescribed them. At the same time usage of the other drugs had depth, in that one or two or three physicians relied very heavily upon them. The Achromycin situation was different. Achro. mycin enjoyed wide breadth of usage, having been prescribed by almost all doctors who pre~ scribed any drugs at all, and had not quite so much depth in that one or two doctors did not write the majority of prescriptions. The heaviest prescriber of Achromycin wr~ 21% of the prescriptions, while it took the top five prescribers to account for 54% of them and for 45% of the dollar volume. Four-week Acbromycm prescriptions Number Price Total 260 $1224 G.P. "F" 55 $ 195 P.T. "A" 30 111 P.T. "D" 23 104 P.T. "G" 20 91 G.P. "C" 14 60 Spec.'~A" 13 66 G.P. "K" 13 56 P.T. "F" 12 62 G.P. "A" 11 59 G.P. "I" 8 38 23 other prescribers 61 382. The initials assigned to the ten doctors listed above indicate the wide applications of Achromycin and that it is. nor a specialist's dru& G.P. - general practitioner P.T. - part-time specialist SpEC. ~ spia.1~st PAGENO="0430" 5902 COMPETITIVE PROBLEMS IN TH~~RtG INDUSTRY SOURCES OF' INFORMATION ABOUT ACHROMYCIN Three out of five Fond du Lac doctors said that the Lederle detail man was instrumental in getting them to prescribe Achromycin. Forty-seven of the 55 doctors recalled hav~ ing been detailed on the drug and 30 of these said that they prescribed it based on information which he gave them. All five of the heaviest prescribers said that the detail man got them to prescribe Achromycin. In- cidentally, only four doctors indicated that they received no Achromycin samples. `Where did you happen to get the informa- non about Achromycin which led you to pre scribe is," 5 heaviest 45 other * prescriber: prescriber: Detailman 5 25 Journal articles 1 11 Direçtmail S. Journal advertising . 4 Other physicians' recommendations - 3 National conventions 1 County meetings - 1 (some. physicians named more than one source of information) Evidence of the quick acceptance of this.drug is the fact that 32 of the physicians who pre scribed it said they had used it within tl~ first two months after its release. PAGENO="0431" COMPETITIVE PROBLEMS IN THE DRUG INflUSTRY 5903 THE ACHROMYCIN MARKETING MIX The first year's national advertising and promo' non effort for Achromycin~cost in rough figures about $2,500,000. Advertising was addressed to the mass physician audience; in the early stages of promotion every physician in the country received on an average of two Achro' mycin mailings each week. *indudes literature and samples for the detOil men PAGENO="0432" 5904 COMPETITIVE PROBLEMS IN TUE DRUG INDUSTRY SUPPORT FOR ACHROMYCININ MEDICAL JOURNALS It seems justifiable to say that the previous success of penicillin and Aureomycin made the professionaiworld eager for such a drug asAchrornycin, since it was reported to be effec. tive over a wider range and to be somewhat better tolerased A partial bibliography of just the fIrst year's writings on Achromycin shows 118 articles, and the numbers of papers read at medical meetings is also impressive. CORRELATION WITH SOURCES OF INFORMATION ON ACHROMYCIN "Where did you happen to get the information about. Achromycrn which led you to prescribe at? a L~ 45 Total Prescribers 16 ] Journal articles and Journal advertising 1 conventions [~,] direct mail L 30 1 detail men [~] other sources including county meetings, staff meetings *some physicians named more than one source of information PAGENO="0433" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY ~59O5 CHARACTER OFACHROMYCIN JOURNAL ADVERTISING Achromycin ads were run in a long list of publications, at high ftc quency, and for month after month. The idea was' to "sell" d~ Achromycin name. Detail men reported ahat many doctors already. knew about Achiomycin when they first called upon them. This is the character of the advertising that did it. k ~ ~.- broader tolerancs greater stability faster diffusion 81-280 0 - 69 - pt. 14 - 28 PAGENO="0434" 5906 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY INTERVIEW PROFILE-~PART-TIME SPECIALIST "E" P.T. "F' is one of the heavy prescribers, writ. ing more than 100 prescriptions, a week. He has been practicing medicine for more than 20 years in Fond du Lac, and is on the staff of the hospital as well as being active in one of the' smaller clinics. He seldom if, ever attends any national conventions or meetings of other doc~ tor groups, but is present at most local medical society meetings and attends some state medical conventions. This doctor professes to pay little attention to pharmaceutical promotion, admitting detail men from only three or four of the larger' companies and discarding all direct mail and most house organs. When pressed to name the most worthwhile1 source of information from manufacturers, `he chooses company periodicals. However, he does not mention this source for either of the two audited drugs which he has prescribed. He considers that papers and articles in medical journals are the m~&t important means of his Tëârning about new drugs. And, although he i~es medical journal advertising as not very' worthwhile, he credits such advertising with causing him to write his initial prescription of Achromycin. He takes six of the leading jourr~als and reads three of them, including J.A.M.A., regularly. He is one of the few doctors who admit that pharma'~i' may be an informative `source. In fact, a local druggist first s~ggested that be use Serpasil.. PAGENO="0435" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5907 READERSHIP OF MEDICAL JOURNALS IN FONDDULAC The most commonly received as well as the most often read medical publications in the Fond du Lac area are the Journal of the 4mer~ ican Medical Association and Medical Eco~ nomics. Here are the top eight journals according to the number of mentions on both scores- Read or looked Received through `Total doctors 55 55 J.A.M.A. 47-85.4 35-78.7. Medical Economics 47-85.4 35-78.7 Modern Medicine 39-70.9 22-5&4 Medical Times 24-43.6 10-41.6 Current Medical Digest 21-38.1 13-61.9 GP 19-34.3 17-89.5 Surgery, Gynecology and Obstetrics 14-25A 10-71.4 Annals of Surgery 11-20.0 7-63.6 A somewhat larger number of doctors claimed regular readership than those report~ ing having read a jouinal within the last 30 days. For comparison ~with the 35 shown above for J.A.M.A., a total of 41 said that they read at leastiialf of the J.A.M.A. issues. The top three journals in number of men.. tions as the most valuable were J.A.M.A. with 13 mentions, GP with 7 and Mode,u Medicine with 6. The two that doctors said they enjoyed `reading most were MedIcrI EcOnomics with 17 mentions and j~tM.4.' with: 10~ J.A.M.A. was the only publication about which at least five doctors said they felt "duty bound" so read. PAGENO="0436" 5908 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY SE~ZION III Chapter 5. The Story of UPJOI*T's Pamine DEVELOPMENT OF THE RECENT ANIICHOLINERGIC DRUGS Pamine and the other drugs included for study in this group are useful in the treatment of pep tic ulcer and gastrointestinal disorders. Banthine (methantheline bromide) was in. troduced .by Searle in 1950. It was the first of a new type of anticholinergics. Like the ones to follow, it is basically an antispas- modic and is believed to have some effect in reducing secretion of hydrochloric a~i'd. Within the next two or three years the other products studied came on the maricet. The order may not be as shown here. Prantal (diphemanil methylsulfate) was in- troduced by Schering. Antrenyl (oxyphenonium bromide) was brought out by Ciba. Co-Elorine (tricyclamol sulfate and amo- barbital) was a comparable Lilly product. Pro-Banthine (propantheline bromide) is a Searle improvement of its original Banthine, having the advantages of the original prod. uct with almost none of its side actions. It was first marketed in February 1953. Pamine (metbscopolamine bromide) was one of the last products to be added, in July 1953. It is the result of three years of re- search at Upjohn and cost over $20Q,000. Demand for this group of drugs appears to have fluctuated only slightly, but the total price of prescriptions showed more variation: 4-week prescriptions An:icbolinergic group Week of audit Number May 1954 September 1954 11 17 $38 $63 January1955 12 $28 May1955 PAGENO="0437" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5909 BREADI'H OF ANT1CHOLINERGIC us~ This group of drugs is another that does ~t show extremely heavy concentration of usage by just one or two physicians. For example, the five top prescribers of these antkhölinergks aCcount for less than half of the number of prescriptions, whereas in some. of the other groups a single doctor may have been responsible for a majority of the pie One fact disclosed by the above listing is that these drugs have been adopted rather heavily by surgeons. Not only are two specialists in surgery shown in the eight top prescribers but also the two part-time specialists both have special interest in surgery. scriptiofls. 4-week /n'escriptions An:kbolinergic~rosp,. Number P~ice Total 54 $181 Surgeon "B" Internist "A" Surgeon "A" G.P. "B" Rt"G" Internist ~"C" PX"H" G.R "E" 14 other prescribers 8 $24 5 $23. 4 $17 4 $ 17 4 $13. 3 $10. 3. $.:8 3 $5 20 $64 Pt - part-time specialist. PAGENO="0438" 5910 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY PAMINE, BANTHINE AND PRO-BANTHINE SALES Pro-Banthine was the most used of this class of drugs in the Fond du Lac area during the audit periods, followed by Banthine and then Pamine in third place. Pro-Banthine and Pro-Banthine/Phenobar- bital were prescribed 39 times; Banthine and Banthine/Phenobarbiral, 10 times; and Pa. mine and Pamine/Phenobarbital,5 times (by three doctors). ANTICHOLINERGIC SALES Of the five groups of drugs singled out for in. vestigation in the Fond du Lac study, the anti. cholinergics were used the least. During the four audit weeks only .54 pee. scriptions for this group were filled over the signatures of 22 doctors. These prescriptions sold for $181. This would mean about 700 prescriptions a year at roughly $2350, ~. chisive of refills and direct dispensing by physicians. Most of these products have since been man- ufacturedin combination with phenobarbital for its sedative action. No distinctions be. tween Pamine and Pamine/Phenobarbital and of similar combined forms of the other drugs will be made here. PAGENO="0439" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5911 NATIONAL PROMOTION OF PAM!NE Upwards of llioniqllars had been spent on the promotion of `Pamine at the start of the `Fond du Lac study. By far the greater part of these efforts were spent on detailing the new product. Derail- * ing was done in two stages-intensively for for the first two months after introduction and again intensively for two months the fol- lowing year- Detailing $850,000 Major detailing effort two months in 1953 and two months in 1954 Medical journal advertising $153,000 (UproMay 1955) * Direct mail $ 59,000 (UptoMay 1955) No commercial exhibits were prepared, on Pamine for medical conventions. Sampling of Pamine was nor so lavish as that of other products. For example, the de- rail man left no samples with pharmacists, because of Upjohn's pre.stockingpolicy. Phy- sicians were offered a sample supply suffi- cient for one, or possibly two, prescriptions. Studies of market potential were made at Upjohn but no sample surveys or test mar- ketswereused. S PAGENO="0440" 5912 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY PAMINE DETAILING IN THE FOND DU LAC AREA It was necessary to interview three different Upjohn detail men to learn just how Painine was detailed in this area because one man is assigned to Fond du Lac and another to Chihon *and there had been a replacement. `The original representathr~s eath had spent about 16 hours studying the drug, half of this thne in grOup lectures. * The 1~ond dü'Lác detail man spent one week of each month there, and estimates that the equivalent of a full two weeks was devoted to Pamine although' he details more than * one item at a visit. He. would spend about .~flve' minutes talking about the drug with a physician , and approximately two minutes with a pharmacist. The original detail man for Chilton spent as much time at the two pharmacies as he did with the five physicians there. He di. vided his time about 20: tø 30 minutes with each pharmacist and 5 to 15 minutes with each physician. He was in `Chilton one day every month and called on every doctor and both drug stores each time. He accomplished his detailing of Pamine `there the first day that he worked on is.. He did mention it later but did not have to. go into elaborate detailing of the drug' and its uses. As he recalled i~, the physicians were not conversant with the drug before he intro- duceci it, but the pharmacists had read about * it in their journal. The replacement detail'.man confirmed that Pamine was known to the Chilton doctors when he took over although he refreshed their memories when needed, Both of the Chilton representatives men. tioned that they thought technical"reprin*s on Pamine' had been most effective in getting Chilton doctors to utilize the drug. PAGENO="0441" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5913 PROFESSIONAL, EVALUATIONS OF PAMINE (METHSCOPOLAMINE BROMIDE) Pamine attracted less experimental attention than the other products in the study and was lesi productive of professional articles and papers. Through; April 1955 a bibliography coin* piled at Upjohn. included 13 titles, while 5 papers ad been read at national and local medical meetings. A scientific exhibit had been shown at the San Francisco Meeting of the A.MA. in June 19~4 Not a single prescriptioàwas filled for the other three drugs, Antrenyl, Co.Elorine and Prantal, during any of the four audit weeks -another indication perhaps that the anti. cholinergic market wasnot very active. Number * of original prescription.r Week P~o. of dudit . Banthine Banthine Pamine * Thtal 39 10 5 MAy1954 11 September 1954 10 6 1 January 1955 9~ 3 2 May1955 9 .1 2 The total price of the five Famine prescrip.' tions was $14. On an annual basis (although it is hazardous to project such small fig. ures) this would amount to some 65 pro. scriptions retailing at roughly $180, not counting prescription refills and direct dis~ pensing by the six doctors who reported dis. pensing Pamine. At this rate, if the Fond du Lac situation were at all general, It *ould take a long time for the manufacturer to recover his promo. tional expenses. The Fond dii Lac area's 1/3000th share of those expenses amounted to more than $300. PAGENO="0442" 5914 COMPF~TITIVE PROBLEMS IN THE DRUG INDUSTRY SOURCES OF INFORMATION ABOUT PAMINE Most of the seventeen Fond du lac area doc- tors who said they prescribed Pamine gave credit to detail men for prompting them so use the drug. None of the three who credited other sources were detailed. All but one of the 17 re- ceived samples. "Where did you happen to get the inforina- tion about Pamine which led you to pre- scribe it?" l7Psmssss presc~ibers Detailmen 14. Journal articles 3 A total of 26 doctoñ recalled having been detailed on Pamine, while 27 remembered receiving samples of it. PAGENO="0443" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5915 THE PAMINE MARKETING MIX' Upwards of a million dollars had been spent on the promotion of Pamine at the start of the Fond du Lac study. By far the greater part' of this effort was spent on detailing the new product. Detail- ing was done in two stages-intensively for the first two months after introduction and again intensively for two months the fol- lowing year- Major detailing effort two months in 1953 and two months in 1954 $153,000 Ii' MEDICAL JOURNAL ~ ADVERTISING (Up to May 1955) ~ DIRECT MAIL (Up to May 1955) No commercial exhibits were prepared on Pamine for medical conventions. Sampling of Pamine was not so lavish as that of other products. For example, the de- tail man left no samples with pharmacists, because of Upjohn's pre-stocking policy. Phy- sicians were offered a sample supply sut~- cient for one, or possibly two, prescriptions. DETAILINë~ PAGENO="0444" 5916 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY SUPPORT FOR PAMINE IN MEDICAL JOURNALS Parnine attracted less experimental attention than the other products included in the study and fewer professional articles and papers were published. Through April 1955 a bibliography compiled at Upjohn included 13 titles, while 5 papers had been read at national and local medical meetings. A scientific exhibit had been shown at the San Francisco Meeting of the A~M.A. in June 1954. CORRELATION WITH SOURCES OF INFORMATION ON PAMINE "Where did you happen to get die information about Pamiüe which led you to prescribe it?" 17 Total Prescribers [~f] iourna' articles conventions direct mad 14 1 detailmen other sources includingcounty meetings, staff meetings *theso doctors wire not detailed PAGENO="0445" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 591~ CHARACTER OF PAMINE JOURNAL ADVERTISING Upjohn ran multiple half pages on Pamine in each publication for a 3-month saturation period. Then the journal program was cut back to one page once a month. Ads emphasized the length of Pamine antncid action and product name. PAGENO="0446" 5918 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY INTERVIEW PROFILE INTERNIST `C" Internist "C" is a young doctor who has been practicing medicine only a few years. He is on the staff of the hospital and a clinic, attends all county medical society meetings, a monthly conference in Oshkosh, some state conventions, and other special meetings. The most significant attitude of Internist "C" is his heavy reliance on medical journals and his complete rejection of direct mail. He throws out everything that looks like advertising whether it is house organs or other pieces. He does talk with all detail men who visit him and considers detailing of some aid to him, although he says that detail men merely repeat what they have memorized and really add. nothing that is not in the literature. He accepts samples and will use them, particularly for pa- tients whom he knows cannot afford expensive prescriptions. Sometimes detailing and sam- pling give him the final push which encourages him to try a product at a particular time. He places strong emphasis upon the desirability of direct articles in the literature, and states that ordinarily he uses a new drug only after reading an evaluation by a known authority. He does not' trust clinical tests re~ported to him by detail men since he does not know the doc- tors that they quote or their reputations. He states that he was led to prescribe four of the five audited drugs from information given in journal articles. The fifth one, he first used after learning about it at a medical convention. He receives a number of medical journals and reads those on internal medicine most thor- oughly. PAGENO="0447" COMPETITIVE PROBLEMS IN THE DRUG INDUSrPRY 5919 PHYSICIAN COMMENTS ABOUT JOURNAL ARTICLES Speaking broadly, it appears that to many of the physicians in Fond du Lac, professional arti- cles seem to be the most reliable source of new product information-or that such articles would be the most reliable source if they could be published sooner. Some doctors will wait for journal publication before using a new drug- Internist "C": `The most desirable source by far is direct articles in the literature. Ordinarily I will use a new drug only after reading an evaluation by a known authority:' Surgeon "C": "I am interested only in reports on clinical tests as a basis for my decision to use a drug or G.P. "R": "One good article on a new drug product will do more to convince me that I should try it than unlimited detailing and advertis- ing will do:' G.O.P. "A": "I will wait for a considerable length of time before trying a product until technical data appears in the journals:' But others'feel that they either cannot wait or cannot take the time for professional articles- Surgeon "F": "Characteristically, I go to th~ table of con-. tents first and then directly to the article that interests me. Sometimes I search through the literature for technical material, but I know that many physicians do not have the time for that sort of searching. I will trust a re- print of an article more than the literature put out by the pharmaceutical house:' Eye Doctor "A": "Journal articles are the best source of data in the long run. It is a very long time before they are out, however, so the only practical thing is to rely on detailing and whatever other data is immediately availabl:' G.R "E": "1 have a conflict here. I trust professional evaluation above any other source, but at the same time I do not have sufficient 1~ead- ing time to dig through the journals' Journal articles also come in for their share of criticism- Surgeon "E": "The value of professional articles hinges directly upon the name of the author and his professional reputation. I have a suspi- cion of statistics since they can prove almost,' anything depending upon the way they are applied. This places most professional writ- ings on a par with pharmaceutical house literature and advertising:' G.P. "H": "I have One complaint about the use of chemical and generic names. The individual physician has to make the tie-up with the particular brand or trade name. This is con- fusing since a doctor has to know that a product is available, where to get it and what to call it. If you prescribe by generic name, the druggist may even call you back to ask for the trade ~~:` a PAGENO="0448"