PAGENO="0001" Journtl ~ tke .4rnrri'mn &ssoci&tien, Vol. Y1, 471, AUtUSt iSto flttrmaceutical :M, `, pp. r adulteration, r~h ~ ly ~#$(,~ h~ G~i ~ ~ I ~`"~ ~ p.JLk~sd ~ ~ ~ ~ t'~' ~ ~~!** ~ ~ P~*, (4~)~~I~I ~()?~ ~,%~`4 ~ ()()? >~ ~ * ~?, !~~$#:`~ t~&)~?) h~. (~t($I()~ ~ ~ b) P~( ~ At h , tt~~ ~l. . ~ ~ ~ ~ ~ ~ 1 *? r~ ___ ~ t jtLIn2T~ I ~ -~- ;. r~ `. ~ -w S 0k t~ !! ~ ~ ~ `~ *~t , [;k4 ~ . ~rt~ :f ~ ~it:u~' ~ ;~i --- , -- - - . - .- - ~~~itW k~ ?~H ~. , ~ ,: ::~ I ~ ~ ~ t `1.~ ~ ,~: t ~ ` J. ~ *`!` ~ ` I . ~ ~ ;_ "* ~ ,1... ~ `t ~ ` .. :. ` , , ~ ~ ,-. ~ - ; .. ~ ..., ,` ~ ~ `..,~ l~% *l. ~ ~ ~ *! ~ ~ * * (..,,~, i ..`~, ~ ~ (I ~ ~ ~ ~ ~ ~ ~ * misbranding and illicii dt irug traffic S rx~IRrr A ¶I..~I ~ `(d'.~t, ?~?~ ~ .",..*. 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L ` ~ ~ ~ . fl ! ~ ; )~s~? ~ .. . !~ ~ ~ 4~. , - p PAGENO="0002" C~MP~TITIVE PROB~~EMS IN THE DRUG INDUSTRY 10519 ~%t%) ~ REPORT TO THE CONGRESS Problems Ir~ Obtaining And Enforcing CompIianc~ With Good Manufacturing Practices F~r Drugs Food and Drug Ad~mnistratson Department of Health, EdUcation, and Welfare I BY THE COMPTROLLER GENERAL OF THE UNIrED STA TES PAGENO="0003" PAGENO="0004" IV CONTENTS "What Kind of Games Are Being Played?", editorial from California Page Pharmacist, page 9, November 1973 10167 "Some Manufacturers Disclose Sources of Supply," article from California Pharmacist, pages 7-9, October 1973 10168 "Manufacturer Disclosures-Part II," article from California Pharmacist, pages 14-15, November 1973 10171 Letter dated February 25, 1974, to Senator Gaylord Nelson, chairman, Subcommittee on Monopoly, from Dr. Edward G. Feldmann, associate executive director for scientific affairs, American Pharmaceutical Association 10184 Letter dated February 22, 1974, to Dr. Edward G. Feldmann, associate executive director for scientific affairs, American Pharmaceutical Asso- ciation, from Senator Gaylord Nelson, chairman, Subcommittee on Monopoly 10205 Letter dated February 25, 1974, to Senator Gaylord Nelson, chairman, Subcommittee on Monopoly, from Dr. Edward G. Feldmann, associate executive director for scientific affairs, American Pharmaceutical Association 10206 Letter dated February 27, 1974, to Senator Gaylord Nelson, chairman, Subcommittee on Monopoly, from Dr. Edward G. Feldmann, associate executive director for scientific affairs, American Pharmaceutical Association 10211 Statements appearing in Pharmaceutical Manufacturers Association publications in connection with their claim regarding responsibility for 95 percent of the U.S. drug supply 10224 Membership list of the National Association of Pharmaceutical Manufac- turers as of January 1974 10248 Letter dated February 26, 1974, to Senator Gaylord Nelson, chairman, Subcommittee on Monopoly, from Joseph Barrows, chairman of the board, National Association of Pharmaceutical Manufacturers 10255 Veterans Administration experimental contract FSC Schedule 65, part I, section C, Drugs and Pharmaceutical Products, issued December 18, 1973, for the period January 1 through December 31, 1974 10459 APPENDIX Exhibits provided by the U.S. General Accounting Office: Prepared statement of Hon. Elmer B. Staats, Comptroller General of the United States 10497 "Problems In Obtaining And Enforcing Compliance With Good Manu- facturing Practices For Drugs," a report submitted to the U.S. Congress by the Comptroller General of the United States, B- 164031(2), March29, 1973 10520 "How to Improve the Procurement and Supply of Drugs in the Federal Government," a report submitted to the U.S. Congress by the Comptroller General of the United States, B-164031 (2), December 6,1973 10577 Exhibits provided by the Food and Drug Administration: Prepared statement of Hon. Alexander M. Schmidt, M.D., Commis- sioner, Food and Drug Administration 10638 Drug compliance information letter dated February 28, 1973, from the Office of Compliance, Bureau of brugs, Food and Drug Administra- tion, to manufacturers, repackers, and relabelers of drug products - - 10657 Drug compliance information letter, dated May 7, 1973, from the Office of Compliance, Bureau of Drugs, Food and Drug Adminis- tration, to manufacturers, repackers, and relabelers of drug products. 10660 Drug compliance information letter, dated July 18 1973, from the Office of Compliance, Bureau of Drugs, Food and 1~rug Administra- tion, to manufacturers, repackers, and relabelers of drug products - 10663 Drug compliance information letter, dated October 5, 1973, from the Office of Compliance, Bureau of Drugs, Food and Drug Administra- tion, to manufacturers, repackers, andrelabelers of drug products.. - - 10666 Drug compliance information letter, dated January 23, 1974, from the Office of Compliance, Bureau of Drugs, Food and Drug Administra- tion, to manufacturers, repackers, and relabelers of drug prodUcts.. - - 10669 Food and Drug Administration new regulations pertaining to the marketing of digoxin products which became effective on January 22, 1974 10673 PAGENO="0005" CONTENTS V Exhibits provided by the American Pharmaceutical Association: Prepared statement of Dr. Edward G. Feldmann, associate executive Page director for scientific affairs 10724 "Adulteration, Misbranding and Illicit Drug Traffic," article from the APhA Journal, vol. 21, No. 8, pages 470-471, August 1960 (facing page) 10734 "Drug Recalls," article from the APhA Journal, vol. NS14, No. 2, page 97, February 1974 10734 "Commentary on Digoxin Bioavailability by Colaizzi," article from the APhA Newsletter, vol. 12, No. 14, June 23, 1973 10735 "Keep Lot Number, Manufacturer's Name of Digoxin Tablets," article from the APhA Newsletter, vol. 13, No. 2, January 19, 1974.~. 10737 "Digoxin Recalls Requested by FDA Based on New Dissolution Requirements," article from the APhA Newsletter, vol. 13, No. 3, February 2, 1974 10738 Letter dated September 27, 1973, from Edward G. Feldmann, Ph. D., associate executive director for scientific affairs, to Director, De- fense Supply Agency 10739 Letter dated October 18, 1973, from Col. Perry E. Kimerer, USAF, Chief, Quality and Production Division, to Edward G. Feldmann, Ph. D., associate executive director for scientific affairs 10740 Letter dated March 29, 1974, from Dr. Edward G. Feldmann, asso- ciate executive director for scientific affairs, to Senator Gaylord Nelson, chairman, Subcommittee on Monopoly. - 10741 Letter dated March 25, 1974, from Senator Gaylord Nelson, chairman, Subcommittee on Monopoly, to Dr. Edward G. Feldmann, asso- ciate executive director for scientific affairs 10745 Letter dated March 5, 1974, from C. Joseph Stetler, president, Phar- maceutical Manufacturers Association, to Senator Gaylord Nelson, chairman, Subcommittee on Monopoly 10746 Exhibits provided by the United States Pharmacopeia: Prepared statement of Dr. Daniel Banes, director, Drug Standards Division 10748 Letter dated February 28, 1974, to Benjamin Gordon, staff economist, Senate Select Committee on Small Business, from Dr. Daniel Banes, director, Drug Standards Division 10755 Letter dated March 8, 1974, from Dr. Albert Bowers, president, Syntex (U.S.A.), Inc., to Senator Gaylord Nelson, chairman, Subcommittee on Monopoly 10757 Letter dated August 13, 1974, to Benjamin Gordon, staff economist, Select Committee on Small Business, from Dr. William S. Apple, executive director, American Pharmaceutical Association 10758 HEARING DATES February 20, 1974: Morning session 9921 February 21, 1974: Morning session 10163 March 5, 1974: Morning session 10423 March 6, 1974: Morning session 10483 PAGENO="0006" PAGENO="0007" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY (Present Status of Competition in the Pharmaeeuth~a1 Industry) WEDNESDAY, PEBRUARY 20, 1974 U. S. SENATE, SDBCOMMITrEE ON MONOPOLY OF THE SELECT COMMITTEE ON SMALL BVSINESS, Washington, D.C. The subcommittee met, pursuant to notice, at 10:05 a.m., in room 6202, Dirksen Senate Office Building, Senator Gaylord Nelson [chair- man of the subcommittee] presiding. Present: Senator Nelson. Also present: Chester H. Smith, Staff Director and General Counsel; Benjamin Gordon, Staff Economist; and John 0. Adams, Minority Counsel. Senator NELSON. The Subcommittee on Monopoly of the Senate Small Business Committee is today resuming its hearings on the efficiency, economy and rationality of the Federal agencies and de- partments in the procurement of drugs, as well as reimbursement under various programs of Government. The subcommittee is particularly interested in finding ways in which competition can be promoted and the cost of drugs to Govern- ment can be reduced both in direct procurement of drugs and in re- imbursement for drugs under medicare and medicaid. The witnesses have been asked to discuss: (1) efforts of Federal agencies to re- duce the cost and to improve the procurement and supply of drugs in the Federal Government; (2) progress by Federal agencies in im- plementing the recommendations included in the Comptroller Gen- eral's Report on Federal drug procurement dated December 6, 1978; (8) views of drug purchasing agencies concerning consolidation with- in the FDA of quality assurance activities relating to Federal pro- curement of drugs; (4) the efforts of the Federal agencies to: (a) promote the use of formularies and encourage the use of generic products, and (b) assure that only effective drugs are procured and used in Federal programs; (5) the relationship of FDA with other Government agencies in drug procurement and reimbursement; (6) the steps taken by the Food and Drug Administration to ensure a uniformly high quality for the Nation's drug supply. Our witnesses today are Mr. Elmer Staats, Comptroller General of the United States and Dr. Alexander Schmidt, Commissioner of the Food and Drug Administration. 9921 PAGENO="0008" 9922 COMi?ETITIVE PROBLEMS IN THE DRUG INDUSTRY Mi:. Staats, the Committee is very pleased to have you appear here today. We are well aware of the extensive work you and your agency have been doing in the field. We recognize it is a very valuable con- tribution to the problem that we are dealing with here. Your statement will be printed in the record and you may pre- sent it however you desire. And would you identify, for the record, your associates so that the reporter will know who they are in the event they have some comment to make?' STATEMENT OP HON. ELMER B. STAATS, COMPTROLLER GENERAL OP THE UNITED STATES GENERAL ACCOUNTING OFFICE, WASH- INGTON, D.C., ACCOMPANIED BY GREGORY I AHART, DIRECTOR, MANPOWER AND WELFARE DIVISION, GENERAL ACCOUNTING OFFICE; DEAN CROWTHER, DEPUTY DIRECTOR, MANPOWER AND WELFARE DIVISION; NAMES D. MARTIN, ASSOCIATE DIRECTOR, MANPOWER AND WELFARE IEIVISION; AND PAUL SHNITZER, ASSOCIATE GENERAL COUNSEL, GENERAL ACCOUNTING OFFICE Mr. STAATS. Thank you, Mr. Chairman. To my immediate right, Mr. Gregory Ahart, who is the Director of our Manpower and Welfare Division; to his right, Mr. Dean Crowther, who is Deputy Director of that Division; Mr. James Martin here to my immediate' left is an Associate Director of that Division; and. Mr. Paul Shnit- zer, Associate General Counse~l, of the GAO. Mr. Chairman, in the interest of saving time for questions and for your next witness, I will try to summarize and paraphrase the statement which you have before you, and I will refer to it by page as we go along. I believe we can cover the substance of the statement and speed up the process. We Ware going to be covering today in our testimony three subjects. One is our December 6th report on Federal procure- ment of drugs; second, the status of Federal efforts to promote the use of formularies and encourage the use of lower priced drugs, including generics; and third, the~ status of actions taken by the T~ ederal agencies to' assure that only effective drugs are procured. On page 2, we point out that Fe'deral expenditures and reimburse- ments for prescription drugs amounted to about $1.6' billion in fiscal year 1973, which is an increase of' more than $44 million over the expenditures for 1972. And, more significantly, a $500 million increase since 1970. This amount includes about $252 million in direct drug purchases by Federal agencies, and reimbursements of over $1.3 billion `under federally sponsored health programs such as medicare and med- icaid, which have increased some $430 million since 197~0, thus' accounting for more than 80 percent of the total increase. The in- creases in medicare and medicaid expenditures account for virtually all of the increases `in the reimbursement programs. Senator NELSON. What was that total increase? `See Information beginning at page 10497. PAGENO="0009" COMPJ~TITIVE PROBLEMS IN THE DRUG INDUSTRY 9923 Mr. STAATS. These are figures since 1970. Senator NELSON. What was the total? Mr. STAATS. The total is $1.3 billion there-it is in my statement. Senator NELSON. Yes, I see it. You said the increase was how much? Mr. STAATS. This increase is about $430 million since 1970, thus it is about 80 percent of the total increase and virtually all of the increase in the reimbursement category is in the medicare and medicaid programs even though there are some other reimburse- ment programs, such as CHAMPUS. The increases indicated by going back to 1970 are much more significant than those indicated by the increases from 1972 to 1973. Now if you turn to the next page, page 3, we point out here that about 84 percent of the total Federal expenditures for prescription drugs during fiscal year 1973 were indirect in that they consisted prin- cipally of the Federal share of drug costs provided to beneficiaries of health programs supported by the Government. Medicare accounts for about $675 million, medicaid $605 million, the Federal employee health benefits program $41 million, and the CHAMPUS program $30 million. We have a full table, Mr. Chairman, showing the increases in this program, both direct and indirect, beginning in 1969 and, if you agree, I would like to have that inserted in the record at this point. It just brings out the picture a little more clearly than I can in my summary here. Senator NELSON. It will be printed in the record at this point. [Testimony resumes `at page 9926. The material referred to follows:] PAGENO="0010" 9924 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY ESTIMATED FEDERAL EXPENDITURES FOR PRESCRIPTION DRUGS Fiscal year expenditures (inmi1lj~~~~ 1969 1970 1971 1972 1973 TOTAL FEDERAL EXPENDITURES $ 999.5 $1,065.9 $1,331.1 $1,527.9 $1,572.3 TOTAL DIRECT PURCHASE 203.2 177.3 268.7 275.0 252.0 Department of Defense Depot1 103.2 71.4 105.6 103.1 91.4 Veterans Administration Depot and Local 30.4 21.3 35.4 46.3 49.9 Federal Supply Schedule 57.4 60.4 75.2 77.0 78.2 Public Health Service2 12.2 6.4 18.3 20.0 13.6 Agency for International3 4 Development NA 14.0 11.0 19.2 10.4 Small Federal Programs5 NA 1.5 21.6 7.2 8.5 Office of Economic Opportunity NA 2.3 1 .6 2.2 NA TOTAL REIMBURSEMENT PROGRAMS6 796.3. 888.6 1,062.4 1,252.9 1,320.3 Medicare, Part A 460.7 482.2 541.2 6l6.8~ 674.0 Medicaid, Institutional 131.0 154.2 202.6 257.6 264.8 Medicaid, Ambulatory 158.1 206.0 252.8 308.8 340.5 Federal Employees Health7 Benefits 22.9 22.5 31.3 40.9 NA CHAMPUS, Institutional 12.4 13.0 18.6 21.4 2~.1 CHAMPUS, Ambulatory 2.8 3.6 3.8 4.7 6.1 VA Hometown Pharmacy 2.6 1 .4 3.2 NA 4.1 OEO Vendor Program 2.4 2.4 0.6 NA NA Public Health Service 1.7 1.2 5.8 NA 2.5 Federal Employees Compensation 1.7 2.1 2.5 2.7 3.2 Sources: Estimates for fiscal years 1972 and 1973 were made using data supplied by individual departments and agencies responsible for the programs and activities listed above. Data for fiscal years 1969 through 1971 were obtained primarily from the Prescription t~~9 Data Summary published by the Department of Health, Education, and Welfare, PAGENO="0011" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 9925 Data concerning non-Federal Supply Schedule local procurements made by DOD activities data is not available. These local procurements may approximate 18 percent of depot procurements. 2 Excludes data for St. Elizabeths Hospital, National Institutes of Health, and National Institutes of Mental Health. For fiscal year 1973, $6.2 million of the $12.0 million was procured for the Communicable Disease Center by the VA under special Federal Supply Schedule contracts but is not included in the $78.2 million procure- ments under Federal Supply Schedules. An undetermined amount of AID-furnished drugs are procured from DOD or VA depots. 4 Not available. Includes expenditures for U.S. Bureau of Prisons, Peace Corps, Coast Guard, D.C. Government, Job Corps, and several other small programs. For fiscal year 1971 data includes expenditures for unspecified small Federal programs. 6 Estimates for reimbursement programs include costs of drug dispensing. Amounts represent estimated expenditures for drugs in the Federal contribution to employeess health insurance premiums. PAGENO="0012" 9926 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Mr. STAATS. Now on page 4 we point out, in the first full para- graph, that pending legislation which would increase Federal participation in health care activities, suggests that Federal ex- penditures for drugs may increase in the future, and perhaps very substantially. During the first session of the 93rd Congress, numerous bills were introduced which dealt, in part, with drug purchases under the medicare program. Most of these bills included provisions to ex- tend medicare to cover the costs of certain drugs to be dispensed to eligible recipients on an outpatient basis, and used to treat specified chronic illnesses. * The Social Security Administration estimates that such an exten- sion of Medicare coverage would cost about $1.1 billion a year. Now on the next page, we point out that several national health insurance proposals are currently under consideration. The passage, obviously, of a national health insurance plan would represent a major upward impact on Federal outlays for drugs. Now, turning to our December 6th report, we discussed the effectiveness of Federal agencies' administration of programs and activities relating to the direct procurement and supply of drugs. This matter has been a subject of interest since at least 1963 when Federal agencies began studying the possibility of a single agency having Government-wide responsibility for managing pharmaceuti- cals. In February 1971, the General Services Administration, and the Department of Defense, agreed to assign medical material to DSA-tha,t is the Defense Supply Agency-for integrated manage- ment, but the assignment was deferred pending the outcome of a comprehensive study proposed by the 0MB in June of 1971. Now this study was started in January of 1972, just 2 years ago. Senator NELSON. What was the outcome of the discussions involv- ing the proposal to have all purcha.sing concentrated in just one agency? Mr. STAATS. I come to that a little bit later, if that is all right. I believe it is covered. As of December 1973, no final agreement had been reached as to whether a single manager for drugs would be established. Our report supports the need for coordinated action in procuring and supplying drugs. In summary, we concluded that significant savings and other advantages could result from greater coordination and cooperation between the agencies in procuring drugs, such as consolidating requirements, making joint procurements, and reducing small-quan- tity local purchases by authorizing use by any Federal agency of any centralized Government, supply source. Second, there should be increased use of specifications for drug products to encourage greater competition and central management of drugs to reduce costs. Third, better reporting of drugs bought locally and better use of related reports would improve selection of items for central management. PAGENO="0013" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY `9927 Fourth, responsibility for all quality assurance activities relative to Federal purchase of drugs should be assigned to the Food and Drug Administration. Turning to page 7, to improve the direct procurement and supply of drugs by Federal agencies, we recommended that the 0MB take the lead in developing policies and procedures, including consoli- dating requirements, to increase agency cooperation in buying drugs, and achieving substantial savings through large-volume buys. Field installations should be authorized to obtain their drug requirements from any centralized Government supply source. The VA should develop specifications for all new drugs which it decides to manage centrally and centrally managed drugs, for which it currently has no specifications. Third, the Department of Defense should revise its policy to ensure that drugs will be obtained centrally whenever savings would result. Fourth, Defense and VA should develop specifications which would satisfy all Federal agencies' requirements. Fifth, Defense should develop, for reporting local drug pur- chases, a uniform reporting system aimed at requiring all military activities with individual drug purchases exceeding specified cri- teria to report their purchases; and require centrally managed drugs purchased from other than a central manager to be reported. Sixth, the VA should require that its central office supply serv- ice prepare lists of summary and exception data from the informa- tion reported; require local field stations to report their purchase data correctly and consistently; and see that all vendors report de- tailed sales data when required, by contracts. Seventh, Defense and VA should consider using a standardized coding system, such as the National Drug Code, for identifying local purchases of drugs not having Federal stock numbers. Eighth, Defense, HEW and VA should review the frequency and type of inspections required and the related changes needed to transfer to FDA of all quality assurance responsibilities pertaining to purchases of drugs by Federal agencies. Mr. Chairman, this is a fairly long report, but it seems to us it might be useful to have it inserted in the record. Senator NELSON. It will be received for the record. Mr. STAATS. This is a very brief summary of that report. On page 9 we point out that the 0MB-and this gets to your question of a few minutes ago-in commenting on our final report, by letter dated January 14, 1974, stated that the study group had completed its report and had made recommendations which are currently under review by the principal agencies involved. The 0MB stated also that the findings and recommendations of its study closely paralleled those of the GAO report. Mr. GORDON. Are there any differences between your recommenda- tions and the recommendations of the 0MB report? Mr. AHART. I think, Mr. Gordon, that the recommendations of their report would be somewhat more specific than ours, because they made an in-depth study of the various agencies concerned, and prol- ably went much more deeply into it. ` PAGENO="0014" 9928 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY As the Comptroller General indicated, 0MB has stated that the recommendations are parallel to ours and are in line with our ob- jectives. Mr. STAATS. In the next paragraph, we point out that the Defense Department also, in commenting on our report, indicated general agreement. In the last sentence of that paragraph, they are indi- cating that a clarifying policy adapting medical items for central procurement is expected to be released in about 60 days. And, in the Veterans Administration's letter dated January 16, 1974, they also indicated general agreement with the report and indicating that its marketing centers and supply depots would accept orders from DOD field installations. VA will initiate a control system with DOD to assure that drug specifications are either developed jointly or coordinated; and it is willing to rely on FDA to provide quality assurance for VA drug purchases, provided that FDA makes the necessary data available in a timely manner. Now we point out here also that HEW likes the idea of a single agency plan for quality control, and it is indicated that the Food and Drug Administration is therefore currently developing an initial concept for that consolidated program, based on its assess- ment of quality assurance requirements. Now, turning to page 11, we turn to the second topic of our testi- mony, dealing with reducing drug costs through the use of formu- lanes, and encouraging the use of lower priced drugs, including generics. The military medical regulations require that Pharmacy and Therapeutic Committees be appointed by the commanders of u.S. military hospitals. Among the primary functions of the P. & T. Committees are the development and periodic review and revision of the hospitals' drug formularies. In making decisions concerning the addition or con- tinuation of formulary items, the P. & T. Committees consider the relative costs of therapeutic alternatives. In addition to the general use of formularies by the services, the Surgeons General and subordinate administrative levels issue month- 1.y newsletters or special letters to health facilities highlighting comparative prices of drugs maintained in central inventories and encouraging the use of less expensive `drugs when they are con-. sidered to be therapeutically equivalent to the more expensive items. Prescriptions written by military physicians and filled in military hospitals for brand-name products may be filled with generic equivalent products except when the physicians specifically require that such substitutions not be made. The DOD has not established regulations requiring the use of formularies in the CHAMPTJS program, and has not encouraged the use of generic drug products for either the inpatient or out- patient portions of the CHAMPTJS program. The Veterans Administration requires that each of its, medical facilities have a P. & T. Committee which develops and maintains PAGENO="0015" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 9929 a drug formulary. This formulary generally consists of mono- graphs on those products selected by the P. & T. Committees for use in the facility. Generally, prescriptions will not be filled for drug items not in- cluded in the formulary. However, exceptions may be made with special permission. These monographs include the nonproprietary names of the drug, therapeutic classification, dosage, and instructions regarding prod- uct usage. The VA has also instructed its physicians that generic identification of prescribed medications is preferred to the use of brand names. The HEW agencies that provide direct patient care, such as the Indian Health and the Federal Health Program Services of the Public Health Service, require that all field installations be serviced by P. & T. Committees responsible for the development and main- tenance of current formularies of accepted drugs. The formularies are required to list drug items by their official generic, or nonproprietary names, and only formulary drugs are authorized for routine use by HEW installations providing direct patient care. Among the items the P. & T. Committees are required to con- sider in developing their formularies are comparative efficacy of formulary drugs with other drugs intended for the same use, evaluation of the benefit/risk of formulary drugs, and cost effective- ness. TJnder part A of the medicare program, drugs are paid for by the Social Security Administration, through fiscal intermediaries, as part of the eligible recipients' total hospital bills. Under part B of the program, Federal coverage for physicians and related services are provided through organizations known as "carriers". Coverage of drugs under part B is limited to those drugs which are commonly furnished in physicians offices and which cannot normally be self-administered. The regulations for medicare state that in order for a drug to be covered under part A, it must represent a cost to the institution in rendering services to the beneficiary, and either be included or approved for inclusion in specified drug reference volumes or ap- proved by a P. & T. Committee_-~or equivalent__for use in the participating hospital. In order to be covered under part B, costs of eligible drugs, like those of other medical services, must be accepted by the carrier as reasonable and necessary. Under this system, SSA generally is not provided detailed infoi'- mation concerning the specific drugs that are being prescribed under medicare. SSA advises that there are currently no regulations which encourage the use of generic drug products. Under the medicaid program, which is administered by State agencies with Federal guidance and reimbursed in part by the Social and Rehabilitation Service, the use of formularies and g~neric products is optional. PAGENO="0016" 9930 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY The applicable Federal policy states that "where either is em- ployed, there must be standards for quality, safety, and effective- ness, under the supervision of professional personnel." Although SRS discusses the use of a formulary system as a means of reducing overall drug costs, the use of formularies is not required. Presently 20 States use some type of formulary. SRS, in its Medical Assistance Manual, points out the arguments for and against the use of generic drugs, but does not emphasize their use. Although the States generally accumulate data concerning the specific drugs being dispensed under the medicaid program, the data is not normally provided to SRS. As you know, Secretary Weinberger recently announced that HEW~will be publishing i'egulations for public comment which,, if adopted, would limit drug reimbursements under programs admin- istered by the Department to the lowest cost at which the drug is generally available, unless there is a demonstrated difference in therapeutic effect. The reimbursement policy is intended to result in major savings in the cost of providing prescription drugs under medicare and medicaid. The announcement prompted the Chairman of the Senate Subcommittee on Health, Committee on Labor and Public Welfare, to hold another hearing on February 1, 1974, to provide repre- sentatives of the administration and the drug industry the oppor- tunity *to clarify their positions concerning this significant new HEW policy. To date, the proposed regulations have not been pub- lished. Now, thirdly, and finally, we turn to the status of actions taken by the Federal agencies to assure that only effective drugs are procured with Federal funds. During our last appearance before this subcommittee, we com- mented on actions taken by DOD, HEW and VA with respect to the FDA's pronouncements on drug efficacy. FDA has categorized drugs as "effective", "probably effective", "possibly effective", and "ineffective" for one or more therapeutiè indications claimed on the drug's labeling. Legal action was brought against FDA in an effort to expedite FDA's completion of its determinations of drug efficacy under the Drug Efficacy Study Implementation, which is known as DESI. In October 1972, the Federal District Court for the District of Columbia ordered the FDA to meet specific target dates for various phases of DESI and to submit 6-month status reports to the court concerning its progress. It required the F1)A to make final determination on drug efficacy or to rule on drug sponsors request for hearings, by October 1976. Senator NELSON. Let us see, who initiated the lawsuit? You say the Federal District Court ordered the FDA to do certain things~? Who was the complainant? Mr. STAATS. I will have to ask one of my colleagues, Mr. Chair- man. Mr. AIIART. Mr. Chairman, the information I have is it was a PAGENO="0017" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 9931 joint suit by the Amerioan Public Health Association and the Na- tional Council of Senior Citizens. Senator NELSON. That was, I take it, to specifically implement the provisions of the 1962 amendment. Mr. AHART. I think the thrust of the suit was to require FDA to speed up the effort and to require the publication of the National Academy of Sciences evaluational report on drug efficacy. Senator NELSON. All right, thank you. Mr. STAA~S. As of January, 1974, FDA's initial ratings on all but one of the more than 4,000 drug products included in the study have been published in the Federal Register. However, in accordance with the procedures of DESI, FDA has revised its ratings for specific drugs as new information is sub- mitted by the drugs' sponsors. We inquired into the status of Federal agency actions to insure that only effective drugs are purchased with Federal funds an(l noted that, in general, definitive actions taken have been limited to direct Federal health care programs. We testified in May, 1972, that as of November 18, 1971, the De- fense Medical Materiel Board had initiated action to stop further procurement and to eliminate from the supply system all items that FDA had then pronounced "ineffective" or "possibly effective." Also, the surgeons general of the military departments had emphasized through instructions to medical organizations the DOD policy on such drugs, which became effective January 21, 1971. This policy provided `that remaining stocks of "ineffective" drugs withdrawn from the market were to be destroyed or other appropri- ate action was to be taken to remove them from the inventory. For items categorized "ineffective," but awaiting final determination of FDA, further use of remaining stocks was suspended until the final status was announced by FDA. P. & T. committees were required to question all prescriptions for "possibly effective" items, but local procurement of such items could be made if no alternative means of therapy was available. On June 11, 1973, DOD announced a revised policy which is a bit less stringent with respect to the use of "Ineffective" and "pos- sibly effective" drugs. According to DOD, the original policy was revised because the completion schedule for the PEST had been substantially extended from that originally anticipated "and because some of the FDA's more recent drug classifications would be re- vised following only minor changes in labeling or formulation of certain widely-used items. The revised policy provides that procurement of items classified by FDA as "ineffective" and ordered withdrawn from the market continues to be. prohibited. However, for items which FDA classi- fied as "ineffective" but has permitted to remain on the market pending final resolution of the items' classification, the policy per- mits the Defense Medical Materiel Board, in conjunction with the Surgeons General, to determine whether centrally-procured stocks q ~ to be discontinued. 32-814 (Pt. 24) 0 - 74 - 2 PAGENO="0018" 9932 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Additionally, the policy authorizes the services to make similar decisions concerning locally-procured drugs in this category or to delegate their authority to local P. & T. committees. The policy also authorizes the procurement of "possibly effec- tive" drugs when no alternative means of therapy is available and final determinations on their efficacy are expected to require a long period of time. However, both central and local procurements of these items are th be minimized to take into account the possibility that they may be finally determined by FDA to be "ineffective" and ordered removed from the market. Shortly after June, 1973, the military departments included the revised policy in their instructions for field installations, together with up-to-date consolidated listings of FDA drug safety and effectiveness data for use by military medical personnel. The CHAMPtTS program places no restriction on the drugs that may be prescribed, and is not supplied detailed data concerning the specific drugs that are being paid for. Therefore, DOD could be paying for drugs under CHAMPTJS which would not be procured for its direct care activities. Since December, 1970, the VA's policy has continued to be that all "ineffective" drugs must be removed from VA hospitals except where special approval of the Central Office Executive Committee on Therapeutic Agents has been obtained. Also, VA's policy con- cerning "possibly effective" drugs continues to require that con- sideration be given to using an alternative product having a higher FDA effectiveness classification. To strengthen the policy's implementation, the VA is furnishing a list of drugs ordered to be withdrawn from the market to the P. & T. committees at each VA facility which buys or dispenses drugs. Further, a current statement of VA policy on the use of drugs is now being developed by the Central Office Executive Committee on Therapeutic Agents for distribution to all VA facili- ties. HEW's policy has been that Federal funds shall not be spent for "ineffective" drugs except under approved clinical research projects, or for "possibly effective" drugs except under similar projects or when alternative means of drug therapy are not available. In October, 1971, HEW agencies involved in direct patient care were instructed to stop procurement and use of such drugs and to advise their contract physicians of the Department's policy. These instructions remain in effect. I think I can skip over the next paragraph. We sent a letter to the Administrator, SRS, in May, 1972, bring- ing the matter to his attention and asking him to advise us con- cerning SRS plans for implementing the Department's policy. In June, 1972, the Administrator told us that a draft of regulations lmplementing the Surge6n General's 1970 policy had been cleared in SES and was being prepared for transmittal to the Secretary for publication as a proposed rule. The regulation was not published. Now, we recently initiated a survey of the administration of the PAGENO="0019" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY `9933 medicaid drug program, and have already observed that States are continuing to pay for "ineffective" and "possibly effective" drugs. For example, in 1 month, September 1973, three States paid an estimated $692,000 for such drugs. Also, we contacted officials of two additional States-which were included in our 1972 review-and were informed that these States had not changed their policy concerning payment for ineffective and possibly effective drugs and would not do so until SRS issues its final regulations concerning this matter. Now, we have again brought this matter to the attention of HEW in a letter to the Secretary dated February 15, 1974, which we will be happy to have included in the record at this point. Senator NELSON. We would like to have the letter for the record. [Testimony resumes at page 9939. The material referred to follows:] PAGENO="0020" 9934 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY ~~$D S7~ UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 MANPOWER AND WELFARE DIVISION B -164031 C 2) FEB 1 ~ ~974i The Honorable The Secretary of Health, Education, and Welfare Dear Mr. Secretary: During our survey of the administration of the Medicaid drug program, we found that the three States included in the survey (California, Ohio, and Texas) were expending significant amounts of funds (portions of which are reimbursed by the Federal Govern- ment) for prescription drugs that have been declared ineffective or possibly effective by the Food and Drug Administration (FDA). The Department of Health, Education, and Welfare (HEW) has not issued regulations prohibiting the use of Federal funds for the purchase of ineffective and possibly effective drugs under the Medicaid program. We believe that HEW should expedite the issuance of such regulations. BACKGROUND The 1962 Amendments (P.L. 87-781) to the Federal Food, Drug and Cosmetic Act required that drugs be effective before they can be approved for marketing. Under these amendments, FDA began evaluat- ing the effectiveness of all drugs that it had approved for market- ing under a safety criteria in force before the amendments. After analysis by the National Academy of Sciences/National Research Council of the available data relating to the effectiveness of a drug, FDA publishes In the Federal Register a notice of its initial classification of the drug as being effectfve, probably effective, possibly effective, or Ineffective. If a drug is not classified as effective, a notice of an opportunity for a hearing is also published. If interested parties justify, on the basis of new evidence, the need for a hearing, one Is held. After the hearings FDA publishes its final determination of the effectiveness of the drug and declares It to be either effective or ineffective. PAGENO="0021" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 9935 The criteria for the initial classifications are: (1) effective meaning that the drug has the purported therapeutic effect; (2) prob- ably effective meaning that the effectiveness of the drug is probable, but additional evidence is required before it can be declared effective; (3) possibly effective meaning that there is little evidence of effec- tiveness; and (4) ineffective meaning that there is no acceptable evidence of effectiveness. On December 11, 1970, the Surgeon General requested all agencies within HEW to establish procedures within 45 days to prohibit the use of Federal funds for the purchase of drug products classified as inef- fective or possibly effective by FDA. Two exceptions were noted: --Ineffective and possibly effective drugs could be purchased for use in approved clinical research projects. --Possibly effective drugs could be purchased when no alterna- tive means of therapy with drugs in the probably effective or effective categories is available. On October 8, 1971, HEW issued a regulation prohibiting expenditure of Federal funds under its direct care programs for ineffective and pos- sibly effective drugs except under the two conditions listed above. How- ever, regulations prohibiting such purchases under Medicaid have not been issued. PRIOR GAO REPORT ON EIFECTIVE DRUGS On May 9, 1972, we issued a letter report to the Administrator, Social and Rehabilitation Service, HEW, in which we recommended that regulations to preclud.e the purchase of ineffective and possibly effec- tive drugs under Medicaid be issued without further delay. We stated that about $196,000 had been expended in Ohio during January, April, July, and October 1970, for 38,000 prescriptions for 106 ineffective drugs, and that about $99,000 had been expended in Illinois and New Jersey in July and October 1970, for 21,000 prescriptions for 16 ineffective drugs. In his reply, dated June 13, 1972, the Administrator stated that a regulation precluding expenditures for ineffective and possibly effec- tive drugs under Medicaid was being prepared for transmittal to the Office of the Secretary, HEW, for publication as a proposed rule. The proposed regulation has not yet been published. PAGENO="0022" 9936 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY B-164031(2) STATES STILL PAYING FOR INEFFECTIVE AND POSSIBLY EFFECTIVE DRUGS We found that the three States in our current survey were expending significant amounts for ineffective and possibly effective drugs. The costs and number of prescriptions of Ineffective and possibly effective drugs purchased under each of the three States' Medicaid programs are presented in the table below. The data for California and Texas is for September 1973. Because data was not available for Ohio for September 1973, the data presented is the average monthly figures for the period September 1972 through August 1973. California Ohio Texas Ineffective: Cost $104,754 $25,700 $ 81,264 Number of prescriptions (note a) 6,700 15,816 Number of drugs 27 80 93 Possibly Effective Cost 169,767 45,500 264,921 Number of prescriptions (note a) 8,300 36,863 Number of drugs 77 174 211 Total cost: $274,521 $fl,200 $!~,185 Percent of Total Medicaid Drug Costs 4.4% 6.6% 11.9% Note a: Data not obtained Expenditures at these monthly levels represent annual costs of about $8.3 million for ineffective and possibly effective drugs in the three States. Neither Ohio nor Texas have procedures for removing drugs classified as ineffective or possibly effective from their Medicaid drug formularles. California has a procedure for removing drugs which have been finally determined by FDA to be ineffectlve-~a State employee reads the Federal Register to determine which drugs have been finally classified aiine~ffec~ ttve an~ provides this information to the California Medical and Therapeutics Committee which has them removed from Cal ifornia's Medicaid PAGENO="0023" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 9937 drug formulary. This procedure is apparently ~ot fully effective, however, because California paid for three drugs in September 1973 which FDA had finally declared ineffective in March and May 1973. We also contacted officials in Illinois and New Jersey, which with Ohio were the States included in our prior review, who informed us that neither State had changed its drug payment policies. The officials told us that their States would continue to pay for drugs which had been classified as ineffective and possibly effective, until HEW made its final determination on this matter and issued regulations. CONCLUSIONS It has been more than 3 years since the Surgeon General requested HEW agencies to prohibit the use of Federal funds for the purchase of ineffective and possibly effective drugs, but regulations have not been issued for Medicaid. Such regulations should result in more effective utilization of Federal funds and improved health care of individuals included under Medicaid, through the substitution of drugs having evidence of effectiveness for drugs having little or no evidence of effectiveness. Since evaluation of specific drugs by FDA also ~pplies to identical drugs and may be applied to related or similar drugs', HEW should prepare and distribute a list of all drugs which are identical, related or simi~ lar to drugs declared to be ineffective or possibly effective. RECOMMENDATIONS SRS officials told us that a draft of a regulation precluding the use of Federal funds for ineffective and possibly effective drugs under Medicaid will be sent to your office shortly for your approval and publication as a proposed regulation. We recommend that you expedite. publication of the proposed regulation and that, after comments are received, final regulations be published without delay. 1An identical, related, or similar drug includes other brands, potencies, dosage forms, salts, and esters of the same drug moiety as well as of any drug moiety related in chemical structure or known pharmacological properties. PAGENO="0024" 9938 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY B464031 C~ 2) We recommend also that you direct the Administrator of SRS, in conjunction with the Commissioner of FDA, to establish procedures for providing to States and drug providers, lists of drugs declared to be ineffective or possibly effective, and lists of all identical, related, and similar drugs. We are sending copies of this report to the Chairmen, House and Senate Committees on Appropriations; the Chairmen, House and Senate Committees on Government Operations, the Chairman, House Committee on Ways and Means; and the Chairman, Senate Committee on Finance. Copies are also being sent to the Director, Office of Management and Budget. Sincerely yours, reg4y JV~hart DireUor I PAGENO="0025" COMPETITIVE PROBLEMS IN TEE DREG INDUSTRY `9939 Mr. STAATS. This conciudes my prepared statement. Senator NELSON. Thank you, Mr. Staats. You stated that the DOD spent $91,400,000, and the Veterans Administration about $38,100,000 in their central purchasing. They spent maybe $84 million for drugs at much higher prices through the Federal Supply Schedule, and more through local purchases at even higher prices. Why is it, or is it necessary at all, to spend such a large per- centage of the drug purchases, of money on drug purchases at such high prices? Mr. STAATS. Mr. Ahart will respond. Mr. AHART. I think there are several reasons for that, Mr. Chair- man. In some cases, the volume us&1 of a particular drug product would not be sufficient to justify the expense involved in bringing it into a central management position in a procurement center. You do have transportation costs involved in shipping it out to the local station when you bring it in centrally, and the economics of it call for it to be a local purchase or a supply schedule item. Secondly, you have certain- Senator NELSON. Well, on that point, we have lots of examples, and have had for several years off and on, of smaller purchases being charged at a unit price much lower than large purchases. Let me read from a speech given last summer by Mr. Vincent Gardner, Chief of Drug Studies Branch, Division of Health Insur- ance Studies, Office of Research and Statistics, U.S. Social Security Administration. Now Mr. Gardner says-and I shall just read an excerpt from one page of this speech: A recent pilot study by the Social Security Administration of drug product costs to non-government hospitals showed a wide variation in prices for simi- lar quantities of the same product. The cost to the hospitals for one manu- facturer's antibiotic varied from $29.85 to $92.68 for quantities of 500. The price of an anti-infective from another producer varied from $85 per 1,000 to $216 per 1,000. Or, take another anti-infective from a major producer which ranged in price from $9 to $43 per 1,000 tablets. Contraj~y to the conventional wisdom, industry claims and economic theory, little relationship was found between order size and price to the hospitals. In addition, in Instances where there were price differentials paid for different quantities, the differential was often much greater or smaller than would normally be expected on the basis of usual quantity discounts or different packing and shipping costs. For ex- aiiiple, in the case of an antibiotic, one hospital paid $39.50 for bottles of 500 in purchasing a total of 2,000 capsules, whereas another hospital paid $52.50 for bottles of 500 in purchasing 1,500 capsules. So you had a differential in quantity of 500 capsules, and yet one was, the one who brought 2,000 capsules paid $39.50 and the one who brought 2,000 capsules paid $52.50. Excuse me, the One buying 2,000 capsules paid $39.50; .the one buying 1,500 capsules pajd $52.50. The differential is not explicable o~ the economic theory. This from the same producer or hospitals in the same area. On this basis, it could be concluded that the first hospital received a dis- count of $62.60 per 100, simply for purchasing one bottle more than the sec- ond hospital. Or, to put it another way, one hospital paid $157.50 for 1,500 capsules, while another paid 50~ more for an additional 500. Now, there are lots of these examples. Here is an example of a purchase by the Defense Supply Agency in which they bought a product at the unit price of ~13.89 on a PAGENO="0026" 9940 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY bid; then buying the same drug off the Federal Supply Schedule from the same supplier, they did not pay $13.89 unit price, they paid $47.64. Is there any reasonable explanation for a differential that huge? Mr. AHART. Such examples are certainly well documented in these series of hearings. And as you know, Mr. Chairman, there are a lot of differentials in prices given to different hospitals. And in our review, certainly we found differences in prices given to the Veterans Administration vis-a-vis the Department of Defense for like quantities of the same item in relatively the same time frame. I think the explanation for this in the hospital situation that you mentioned just a moment ago and the DOD situation is partly at- tributable to just a different degree of aggressiveness in negotiating prices on the part of the various hospitals and on the part of the Veterans Administration and DOD. A certain amount of it is certainly due to the use of competitive contracting by one agency and non-competitive procurements by another agency for the same items. We did make a comparison of 13 sets of purchases between the Veterans Administration and DOD, where one of them had gone competitively and the other had gone negotiated with the sole source, and in 11 of those cases there were significant differences in the prices paid-favoring, of course, lower prices when competition was obtained in the procurement. But I do not think we are in a position to explain all of the differ- ences which you have put on the record, particularly between one hospital and another hospital when the buys were made from the same manufacturer. I think part of that is explained by a different degree of effectiveness in negotiating with the manufacturer to get the best price that they can. Now, we did include in our report, on page 37 of our report, the comparison that we made of purchases under the Federal Supply Schedule, with those that were purchased on a central basis. And the range we found is in some cases a very slight difference be- tween the price paid centrally versus the Federal Supply Schedule; but the range went all the way up to about 360 percent higher on the Federal Supply Schedule for certain items, with an overall average, I believe, of about 74 percent differential. Senator NELSON. Well, I am looking at another DOD example: for nitrofurantoin 100 milligram tablets ordered from the same company in bottles of 1,000, the same product from different com- panies. On bid the unit price for these tablets, 100 milligram-a bottle of 1,000 was $11.65. For exactly the same compound, brought from the Federal Supply Schedule, ihe unit price was $170. Well, it is just inconceivable that you could have that much differ- ence in the unit price accounted for by packaging, shipping, and individual handling. It is a differential of almost $160. Now, would you not suppose that a substantial purchaser, such as the DOD's Defense Supply Agency, when they had a successful bidder, could also make an agreement right then that if they needed some supplementary supplies, that it could be purchased at some reasonable markup? PAGENO="0027" COMPETITIVE PROBLEMS IN THE DRUG INDUSTR~( 9941 Can you think of any way to justify a markup of $11.65 unit price to $170? Mr. AHART. Offhand, the difference is quite striking. I really would not know how to explain it or how to justify it. It is possible that if it is a truly competitive situation, the manufacturer might find it to his ~dvantage to discount rather drastically off the catalog price in order to get the additional business which, if he does not get it, will go to someone else. The. manufacturer is not really in the same kind of a situation as when his products are listed in the Federal Supply Schedule since there often is no competition for the items included in the schedule. But again I would say that is a rather startling differential, and I think it would be very difficult certainly for us to explain it or for anyone else to explain that differential at this point. Senator NELSON. All right. Now, here are two interesting cases: One is a purchase of erythro- rnycin tablets, same company; off the Federal Supply Schedule, the unit price $8.90, locally purchased the unit was $7.79. That is totally illogical, isn't it? Mr. AHART. Well, I am not familiar with the details of the local purchase, Mr. Chairman, or what might have been involved in it. It does seem contrary to the logical situation. Senator NELSON. Well, here is one for tetracycline: Off the Fed- eral Supply Schedule the price is $27 unit price; locally purchased, same company's product, $13; so they are paying less than half as much for local purchase as they are paying off the Federal Supply Schedule. There has got to be something wrong with that, does it not? Mr. AHART. Well, I am really not in a position to comment on it, except it does not seem to be consistent with the logic of the Fed- eral Supply Schedule System. Senator NELSON. They ought to be able to purchase locally the whole thing and give up the purchasing agency if they are going to pay twice as much. Mr. STAATS. I might interject here and say that we see great problems in the Federal Supply Service, generally beyond the area of Federal drug procurement. We have studies going on now in our Procurement Division, looking at the operation of the Federal Supply Schedule. We think there are very serious problems. Senator NELSON. Well, to me it is just incredible to end up paying twice as much off the Federal Supply Schedule as you would have on the local purchase where the highest price logically should be. Mr. STAATS. There has been a general presumption-~and this is the substance of the issue that we are looking at-that an item on the Supply Schedule which normally~ carries a 10 or 15 percent discount is a good buy. In many instances we think you can get a much better buy by competitive bidding; and this is the issue that we are looking at generally with respect to the GSA's procurement supply program. Senator NELSON. Are you also looking at the question of the speci- fications that will be drawn in competitive bidding by the Federal PAGENO="0028" 9942 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY agencies, Defense Supply Agency, and the Veterans' Administra- tion, in which if you draw up the specifications in a particular way, there is only one bidder or only one person to negotiate with. I think it is an important point to look at because you can sit there and draw your specs, such as in the buying of tetracycline. If you are drawing up specs with some variations for tetracycline, you can end up getting a very expensive brand name of the com- pound tetracycline that has some modifications in the way it is compounded although it may have the same therapeutic effect. If you put the specs right, there will be only one company that can meet it; and that issue has been raised before. I think it is worth looking at. Mr. STAATS. Ten to 15 percent discount may or may not repre- sent a very significant discount in relation to what you might be able to get by developing specifications and then going for a broader-based competition in procurement. Senator NELSON. Now, what, if any, arrangements have been made between the DOD and the VA to coordinate and establish require- ments prior to negotiation of drug contracts? Mr. AHART. This is one of the things we commented on in our report, Mr. Chairman. At the time of our work in this area very little was being done to coordinate requirements into joint purchas- ing arrangements even though that seemed to be the appropriate way to go. Now, hopefully, as a result of our report and our recommendations and the general agreement of the agencies with those recommenda-. tions, and the corresponding 0MB study, and the implementation of what came out of that study, that there will be much better co- ordination, determination of requirements, and consolidated pur- chasing for the total Federal needs as opposed to each agency going out on its own and doing its own job. Senator NELSON. As of now they have not reached such an agree- ment? Or are they in the midst of negotiating some agreement or coordinating their activities? Mr. AHART. Well, *as the Comptroller General mentioned in his testimony, the 0MB study is with the various agencies for com- ment now; and hopefully within a short period of time they will reach agreement on just what is going to be done in this area. Senator NELSON. And then, what actions, if any, have been taken to transfer the quality assurance program to the FDA? Mr. AHART. It is my understanding that all three agencies are in general agreement with the proposition that one agency could do a better coordinating job in this area. The Food and Drug Admin- istration, I believe, has requested certain information from both the Veterans Administration and the Department of Defense, and should be, within a fairly short period of time, able to define con- ceptually what they are going to do in this area and start imple- mentation. Senator NELSON. Will that mean that the program for assuring quality will be exclusively within the Food and Drug Administra- tion, or will we continue to have duplication with the Veterans PAGENO="0029" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 9943 Administration and the Defense Department, with their own in- spectors and so forth? Mr. AHART. Well, I think if the intent of our recommendation is carried through, it will mean that the quality assurance function will rest solely with the Food and Drug Administration. Senator NELSON. Well, does it appear that they are proceeding to implement a policy of that kind? Mr. AHART. Every indication that we have is that they are mov- ing in that direction and are trying to reach the agreements necessary and move toward the consolidation of that function. Yes, Mr. Chairman. Senator NELSON. The GAO has no doubt that the FDA has the capacity to guarantee or the capacity to carry out an effective qual- ity assurance program? Mr. AHART. Well, I think certainly if they are not now in a position to meet the requirements of the Department of Defense and VA- Senator NELSON. If they are what? Mr. AHART. If they are not now in a position to do all of the things that DOD and VA feel are necessary to meet their require- ments, I feel certain that the potential is there for them to acquire that capacity and to carry it out. Senator NELSON. What does that mean? Are you suggesting that the VA and the Department of Defense carry on a quality assurance program that is somehow superior to what FDA now does? Mr.. AHART. No. What I am suggesting, Mr. Chairman, is that the Department of Defense does have quite a number of specific require- ments that go beyond the requirements for drugs which are now available to the general public in terms of- Senator NELSON. Well, what kind of requirements? Mr. AHART. In terms of color tolerances, indication of deteriora- tion of the drug, packaging requirements_~he~~ types of things that will have to be built into the FDA program if they are going to meet the specific requirements of the Department of Defense. Senator NELSON. Well, I guess we will be going into that later; but do those requirements have anything to do with the effectiveness of the drug? Mr. AHART. Well, I think we are talking here about meeting the specific military requirements which are above and beyond what would be suitable for the general public. Senator NELSON. I cannot quite understand what you mean above and beyond. Every witness we have had from the medical and science fields have stated that if you are meeting USP standards, that is as high a quality__as h~igh as there is. What quality would they have specified that is super-duper? Mr. AHART. Mr. Crowther has some examples to illustrate what I am talking about, Mr. Chairman, that might help clarify the situation. Mr. CROWTHER. Mr. Chairman, in a couple of cases, particularly one that the military brought to our attention_-it was called co- PAGENO="0030" 9944 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY caine penicillin C for aqueous injection, 300,000 units. The original technical requirements were the FDA and USP monographs. There was a field complaint that arose in DOD that involved the syringe- ability problem. It was reported the material could not be aspirated from the bottle or could not be injected from the syringe. Addi- tionally, there were some vials that were overfll*led. In order to avoid this they had to have a higher degree of con- sistency. For example, they added a standard that when the drug was reconstituted, each milliliter of the resulting suspension would contain not less than 280,000, not more than 380,000 lISP penicillin units, and when reconstituted and shaken for 30 seconds it should flow freely without binding with the contents of the final containers or aspirated through a 22 gage hypodermic needle using a suitable syringe. They found a particular problem with the drug in their use. Now, whether this had to do with the specific locations, temperatures, many other things, it is not obvious. But nonetheless, in their field use 1~hey did identi.fy these kinds of problems that required a higher degree of consistency and more specific tolerances. Senator NELSON. So you are not talking about the question of the quality of the drug. You are talking about problems that may arise from being shipped to different parts of the world, or shelved in a tropical climate versus a moderate one, or subjected to much rougher handling. Is that the kind of thing that we are talking about? Mr. CROWTHER. Generally that is the kind of specific requirements that they would have to include rather than ones dealing with effectiveness. Mr. GORDON. Mr. Chairman, may I ask a question at this point? Senator NELSON. Yes. Mr. GORDON. In your report of March 29, 1973, you stated that, "FDA has not always enforced aggressively compliance with good manufacturing practices by many drug producers." In fact, an employee of the Department of Defense, Mr. Max Fein- berg and also Mr. Stetler of the Pharmaceutical Manufacturers Association, have used quotations from your report to show that the ~FDA cannot be de drugs are produced pended on to insure that only high quality In this connection, then, can you tell us if the recommendations in your March 29, 1973, report have been accepted and are being followed by the Food and Drug Administration? Mr. AHART. To our knowledge, Mr. Gordon, all six of the recom- mendations we~ included in that report have been, accepted by the Food and Drug Administration, and action has been taken to implement those recommendations. So I think the Food and Drug Administration is in full agree- ment with the need for. improvement in those specific areas. Mr. GORDON. And they are doing something about it? Mr. AHART. They have implemented all six of the recommenda- tions. I think there is one that, just because of the timing of it, will not be in full implementation until about~ April; and that is the PAGENO="0031" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY `9945 registration requirement. But beyond that there is total agreement between the Food and Drug Administration and ourselves on the need to take these actions, and FDA has taken actions. Mr. GORDON. HEW's Secretary Weinberger said that his Depart- ment will adopt the policy for reimbursement for drugs under medicare and medicaid at the lowest generic price available. Do yon see any reason why this same policy should not be applied by the DOD to its CHAMPTJS program-that is, the DOD's home pro- gram-or the VA to its home program? Mr. AHART. Well, I think certainly the principle involved in the Secretary's policy decision would be applicable to the CHAMPUS program and to the Veterans Administration's home town pharmacy program, even though they are both smaller volume programs than the programs the Secretary is dealing with. But in principle, the same policy should be applicable. Senator NELSON. I guess that is all the questions I have. Thank you very much for you very valuable testimony, Mr. Staats. Do you have any questions, Mr. Adams? Mr. ADAMS. Just one, Mr. Chairman. Thank you~ Mr. Chairman. Mr. Staats, it appears from your testimony that neither DOD, HEW, or Social Security Administration require that formularies list drug items by their official, generic or nonproprietary names, while in some cases they are preferred or recommended. Would you share with the committee your thoughts as to whether you think this is a wise course of action, or whether the use of the generic, nonproprietary name should be mandatory, where possible, in this program and other Federal programs? Mr. STAATS. In general we do favor this, and we have previously testified here to that effect. As to whether it could be made manda- tory or not at this point in time I would like to ask my colleagues to express a judgment on that point. I think that would come down to a question ~f practicability. But in general, we do support the concept. Mr. AHART. Yes. I think many formularies in use in hospitals do use both the generic name in all cases and the brand names if ap- phcable; and certainly, I think we would, as the Comptroller Gen- eral has stated, agree with that principle, that the generic identifi- cation of the drug should be included in the formularies. Mr. ADAMS. On page 19 you discuss the fact that DOD has placed no restrictions on drugs that may be prescribed under the CHAMPUS program. I take it then that under this program DOD could and probably is paying for drugs already determined to be ineffective or possibly ineffective by the FDA. Is that an accurate understanding? Mr. STAATS. That would be correct. That would be a correct interpretation of our statement, yes, sir. Mr. ADAMS. And one last question. On pages 4 and 5 you discuss pending legislation that deal with medicare and medicaid and the possible future passage of a na- tional health insurance plan. Later on in your testimony you point PAGENO="0032" 9946 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY out that under the Social Rehabilitation Services program the States accumulate certain data regarding specific drug usage, but this data is not normally provided to the SRS. Would you recommend that in contemplation of additional Fed- eral health programs and their being administered by the State, that the State begin now to set up a reporting scheme to provide this kind of information on specific drugs to the Social Rehabili- tation Services group and to other Federal agencies~ Mr. AHART. Well, I think any information of this type that you can get back to the Federal program managers will be useful. I think it is particularly important at this point in time, based on the survey we are doing in the medicaid program, where you have a state of transition involved in getting "ineffective" drugs off the market, that the Federal Government be apprised and take such steps as it can take to make sure that it is not reimbursing for drugs which have been determined to be "ineffective" by the Food and Drug Administration. Now, whether you could justify economically a very detailed reporting system by all of the States, I think we would have some serious question on that as a long-term proposition. Mr. ADAMS. I just wanted to make sure that I have it right. As it currently stands, the States do not report this. And if I ëan understand the testimony correctly, you mentioned that the total Federal drug bill may increase in excess of $1 billion; and it is that $1 billion expenditure and keeping track of the drugs that are being paid for, especially the ineffective drugs, about which. I am concerned. I am simply suggesting that perhaps before we reach that crunch we set up some kind of mechanism whereby the States can report, and out of necessity, detailed information. Mr. AITART. Perhaps Mr. Crowther would like to comment in more detail on that. Mr. CROWTHER. Let me add to that just a little bit. There are several ways actually that you could set up a control mechanism to avoid the problem. You can set up as a condition of participation by each hospital, for example, under the medicare and medicaid program, that such drugs will not even be included in the hospital formulary or in the hospital pharmacies. So if they are not in the hospital at all, they cannot be administered to medicare and med- icaid patients. That is probably one of the best means of control. A second would be to provfde some system of reporting and con- trol, or at least testing of the controls at the State levels, particularly in the State programs of the medicaid type. Rather than have all of that type of information come centrally into Washington some- where and, in effect, create just a deluge of paperwork here, an effective control system and mechanism should probably be imple- mented at the hospital level or at the State levBl where the admin- istration of the care is actually carried on. There are several means by which that can be done, an~ I am sure they are under considera- tion at this. point, m~ther than ~necessarily reporting all of that data. For programs as large as these, this would be just a huge amount PAGENO="0033" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY `9947 of data being reported into Social Security Administration or the Social Rehabilitation Service. Mr. ADAMS. I see. Then that control should be in the field. Is that what you are suggesting. But it still should be controlled. Mr. CROWTHER. Yes. It still should be controlled. Mr. ADAMS. Thank you, Mr. Chairman. That's all I have. Mr. STAATS. Mr. Chairman, may I just say this before we con- clude. As you can see from the figures we have presented here today, the growth in the Federal costs involved in drug procurement has been very dramatic over the last few years. The potential is here for additional expenditures such as the inclusion of payment for certain drugs under the medicare program and the possibility of national health insurance. This subject takes on even greater significance than it has had in the past, so we commend you for your interest in this area. We want to continue to ~1o work' in this field. We think some real progress has been made since we last appeared before your com- mittee. We think also there is a great deal of potential for savings here and improved quality of drug care. Senator NELSON. There have been, as you know, proposals made and amendments offered on the floor that would cover all drugs in medicare, medicaid, or other proposals to cover in a more limited fashion drugs that are used on a continuino' basis. But in any event, if you would cover them all, you are looking at figures estimated at a couple of billion dollars. Have you done any studying or made any computations to indicate how much money would be saved if you achieved the ideal of purchasing all drugs at the lowest price of that compound, whether it was brand or generic name.-the lowest price of that compound that was avail- able? Do you have any notion as to what that might mean in the pro- gram of the size we are now involved in? I realize it is a growing program. Mr. STAATS. We can do it for individual drugs, but to take the whole universe, it would be a very, very major undertaking to try to develop anything like a reasonable estimate. Mr. Ahart or Mr. Crowther may ha~re' something to add to that. Mr. AIIART. No. We have not really tried to come up with any figure like that; and I am not sure it would be possible, Mr. Chair- man. As you indicated by some of the statistics on individual trans- actions that you have put on the record here, sometimes you really have a difficult time even finding out what is the lowest price at which a particular product might be available. Mr. STAATS. I personally think if you can take several good examples, the point is made without having to go through the effort to come up with an overall total. Senator NELSON. I suppose we do not even know what amount- or do we-what amount of money is spent under Federal programs for the, or, 25 or 40 most widely prescribed drugs. 32-814 (Pt. 24) 0 - 74 - 3 PAGENO="0034" 9948 COMPEPITIVE PROBLEMS IN THE DRUG INDUSTRY When we are looking at the amount. of money spent on Federal programs, do we know what drugs it is being spent on? Mr. AHART. That information could be developed for the direct Federal procurements. I think it would be very difficult, because of some of the considerations Mr. Crowther spelled out, to develop it for the indirect procurements that the Federal Government par- ticipates in. Mr. STAATS. This would, I think, be a useful exercise on the direct procurement. I think that would give you some indication then, by extrapolation, of what you could save on the indirect pro- curements. Senator NELSON. When yOU refer to direct procurement, you are talking about procurement by negotiation, procurement by bids, and also procurement of drugs at the local level by a veterans hospital or a military hospital in one part of the country from a local sup- plier to supply some need they have. If you have that breakdown, it might be of some significance. Mr. STAATS. Let us explore that, if we may, and let you know what we think would be a feasible analysis. Senator NELSON. It would be interesting to see. I do not know if you could extrapolate from that. But we know what the 50 most widely prescribed drugs are. There might be some correlation be- tween what the Government buys directly of the 50 most widely prescribed drugs and what is purchased locally under medicare and medicaid programs, by prescription of a local physician filled by a local pharmacist. I do not know, but it might not be too difficult to figure thai out. Well, thank you very much, Mr. Staats. Mr. SPAATS. Thank you very much. Senator NELSON. Our next witness is Dr. Alexander Schmidt. Commissioner, Food and Drug Admini~tration. Dr. Schmidt, the committee is pleased to have you appear here today. You may present your statement and your material however you desire.' STATEMENT OP HON. ALEXANDER M. SCHMIDT, M.D., COMMIS- SIONER, POOD AND DRUG ADMINISTRATION, ACCOMPANIED BY J. RICHARD CROUT, M.D., DIRECTOR, BUREAU OP DRUGS; BERNARD T. LOPTUS, DEPUTY DIRECTOR, OPPICE OP COMPLI- ANCE, BUREAU OP DRUGS; AND ROBERT C. WETHERELL, ACTING DIRECTOR, OPPICE OP LEGISLATIVE SERVICES Dr. SCHMIDT. Thank you very much, Mr. Chairman. We are delighted to be here this morning to appear before you on a topic which, of course, is extremely important to the Food and Drug Administration. I would like to introduce my colleagues here with me. On my immediate right is Dr. Richard Crout, Director of the Bureau of Drugs. To his right, is Mr. Bud Loftus, Deputy Director of the Office 1 See Information beginning at page 10e38. PAGENO="0035" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 9949 of Compliance in the Bureau of Drugs. To my left is Mr. Bob Wetherell, who is in charge of our Office of Legislative Services. Mr. Peter Barton Hutt, our General Counsel, who usually accom- panies me on these occasions, could not be here. He will try to get here later, but is now attending another Senate activity. My statement is a little long. As I go through, I will try to summarize some areas, if that is acceptable to the committee. Senator NELSON. You go ahead and present it in any way you wish. We have the time if you desire to read it, and we shall have some questions to ask as you proceed. Dr. SCHMIDT. All right. We are pleased to discuss our drug quality assurance programs and the effect these programs may have on other Government agencies involved in drug procurement and reimbursement. Let me begin by stating that the pharmaceutical industry must bear the primary responsibility for assuring the production of high quality drugs. The Food and Drug Administration's role is to as- sure that manufacturers meet their responsibility. We do so by set- ting appropriate standards for the manufacture of drugs and by carrying out surveillance activities such as factory inspections and analyses of selected products. When firms do not meet their re- sponsibilities, the Federal Food, Drug, and Cosmetic Act provides us with authority to take certain measures to bring about correction and/or to remove offending products from the market. Our quality assurance programs for drugs are aimed at providing optimal assurance of drug quality to all physicians and consumers. These programs employ a major portion of our field manpower available for drug work and range in approach from continuing surveys of the manufacturing practices of selected drug firms to intensified targeted programs such as certification of specific prod- ucts or plant inspection and analyses involving a certain product with identified problems. The Federal Food, Drug, and Cosmetic Act requires inspection of every drug firm at least once every 2 years. In fiscal year 1973, we inspected 2,700 registered human drug establishments and made some 7,000 inspections of registered and related drug establishments. Senator NELSON. Doctor, you mentioned 2,700 establishments. How many are there in the United States that manufacture drugs? Dr. SCHMIDT. Well, counting all registered establishments of all kinds for all drug products, about 14,000 have registered during the biennium of 1971 to 1973. This is a very inclusive number, however. Senator NELSON. Are these both prescription and nonprescription establishments? Dr. SCHMIDT. Yes, sir. These include companies of all sizes that make prescription drugs, nonprescription drugs, food and bulk drugs, animal drugs, and so forth. Senator NELSON. Do you inspect only those that manufacture prescription drugs, or do you inspect those that manufacture both prescription and nonprescription? Dr. SCHMIDT. Well, as I just said, the requirement is, as you know from various speeches and remarks that have been made, the re- quirement is that we inspect all firms at least once every 2 years. PAGENO="0036" 9950 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY We find it necessary to set up a priority system and pay most atten- tion to those firms that produce most of the drugs in the country. At the top of our list are those large firms that produce 95 percent of the prescription items in the country. The number of inspections that I mentioned includes inspections of 100 percent of the firms in the country with business over $10 million a year that produce prescription drugs. Senator NELSON. What do you mean, inspection 100 percent? The law requires you to inspect them all once every 2 years, does it not? Dr. SCHMIDT. Yes, sir. Senator NELSON. Do you meet that requirement? Dr. SCHMIDT. No, sir, we do not, and I do not think that we ever could for a number of reasons. Certainly, we would miss one firm every 2 years, and, therefore, we would not meet the statutory re- quirement, by definition. We must have a flexible policy of priority inspections. When we do identify a very large problem in an important drug, we must be free to make as many inspections of one particular plant or one group of plants in a year as might be needed to correct the problem. A good example of this, for example, is the large volume parental industry that had a problem with manufacturing sterile products. This is, of course, a critcal problem, and we mounted an intensive program in this particular industry. We inspect many of the plants five or six times in 1 year if necessary, and some we do not get to, within the 2-year period. Senator NELSON. Let me put it another way. What percentage of the prescription drugs that go into the mar- ketplace, what percentage of those drugs do you inspect once every 2 years? Is it 95, 98, 90 or some other percentage? Dr. SCHMIDT. Our best estimate is 95 percent, sir. Senator NELSON. You are saying that companies producing 95 percent of all of the prescription drugs that go into the marketplace are inspected at least once every 2 years? Dr. SCHMIDT. Yes, sir. Senator NELSON. What about that other 5 percent? Are those producers never inspected, or inspected once in 3 or 4 or 5 years? Do you have any figure on it? Dr. SCHMIDT. Well, they are programed by our field force for inspection as soon as can be done. We have established, partially in response to the GAO report you just heard discussed, a system in which we monitor all firms and notify the field of those that have not been inspected within 11/2 years, then 2 years, then about 21/2 years, so that when a firm is not inspected within the 2-year period, it will move to the top of the priority listing of our inspectors. Senator NELSON. So it will get inspected within what period? Dr. SCHMIDT. Within 2 years. Senator NELSON. Two years after the expiration of the first 2 years? If I understood you, you said that when one has not been in- spected within the 2 years, they go into top priority. PAGENO="0037" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRt 9951 Dr. SCHMIDT. We would then put it at the top of the priority list and inspect it immediately. Senator NELSON. Well, then I do not- Dr. SCHMIDT. The result of this is that all firms should then be inspected within the 2'/2-year period. We would estimate that for these firms that we are talking about, the system will pick up 100 percent of them within a 2'/2-year period. Our aim is to hit them all within a 2-year period. Senator NELSON. So you are saying that within a 2l/2-year period, you inspect the firms that produce 100 percent of the drugs in this country? Dr. SCHMIDT. Yes, sir. Senator NELSON. Do your records show the names of the firms in all of the United States and that at least once every 21/2 years, every single one of them which produces prescription drugs is in- spected by the FDA? Dr. SCHMIDT. The firms are all on a computer system, and a com- puter can kick out for us the firms that have not been inspected within a 2-year period, and then within the immediate 6-month period, then, we would move to inspect all firms. The concern that has been expressed by the PMA, and my con- cern, frankly, is that there may be some small, vary small firms that might need inspection more than some of the large quantity firms, and that we might be missing some of these firms. Our data show that of the very small firms-and we classify those as being firms doing less than $500,000 business a year-we are only seeing about halt of those within a 2-year period. We will now do better with these firms. Senator NELSON. All right. Please proceed. Dr. SCHMIDT. We really wish to determine whether drug manu- facturers are following what the law refers to as current good manufacturing practices. And as you know, GMP's are spelled out in our regulations and serve to guide our inspectors when they review plant operations. In addition to providing routine surveillance on a scheduled basis, GMP inspections may be made on a selective basis, as I mentioned a minute ago. We often schedule inspections as a result of information obtained from our own product analysis or other reports that come to us of defective products. A pending New Drug Application or a request for certification of an antibiotic by a firm may also trigger an inspection, since a determination of compli- ance with GMP's is a required condition for approval. Senator NELSON. You mean this is a request from a company for certification to produce the antibiotic? Dr. SCHMIDT. Yes, sir. *Senator NELSON. All of its production would subsequently be batch tested by the FDA anyway? Dr. SCHMIDT. That is correct. Senator NELSON. But you require a prior certification of good manufacturing~ practices before you even permit the company to produce an antibiotic? Is that correct? PAGENO="0038" 9952 coM-IETITIVE PROBLEMS IN THE DRUG INDUSTRY Dr. SCHMIDT. That is correct, and this inspection is a very thor- ough inspection of their actual manufacturing practices. A second basic approach to assuring the quality of drugs is a monitoring program involving the sampling and analysis of mar- keted drugs to determine their adherence to compendial standards, as well as standards established in the NDA's. Criteria used in selecting drugs for examination include: Their therapeutic significance; the complexity of compounding-for exam- ple, some drug may have just a very small amount of the active ingredient in its final form; the history of that particular drug product. The objectives of the program are to: Identify defective batches of drug products and remove these from the marketplace;. help determine the reasons for batch failures and assure that the manu- turing procedures are corrected to eliminate these problems; pro- vide a means for measuring changes in the quality of drugs and. the relationship of such changes to actions that the FDA might take; and provide a statistically valid evaluation of the quality of selected drugs under study. The analytical work for this program is carried out in our St. Louis laboratory or in one of our 18 field laboratories. Where feasible, drugs of similar composition are assigned to one labora- tory for analysis. This increases laboratory efficiency by permitting the use of specialized and mass production techniques. During the last fiscal year, we analyzed over 9,000 human drug samples. During the current fiscal year, we programed for analysis of 15,000 samples of human drugs. In general, we have found that only a small percentage-and by small we mean 1 to 1½ percent overall-of the drugs analyzed are defective. And by defective, we mean that they do not meet all of the compendial standards. Now, those that are defective are followed up by our field officers to remove them from the market and to ascertain the cause of the defect. Also, we publish the results of our drug quality surveys in the FDA Drug Compliance Information Letter, and with your permission, I would like to submit a. copy of this letter for the record.' When our monitoring activities reveal problems with an entire class or type of drug, specific intensive programs are established. Our recent efforts to assure digoxin content uniformity and dis- solution and sterility of large volume parenteral solutions are exam- ples of such programs. In 1970, to assure digoxin content uniformity, we established an industrywide voluntary certification program. Until a firm demon- strated that it could consistently manufacture digoxin in compli- ance with standards, it had to obtain a batch-by-batch analysis and FDA release prior to marketing. When we later received information concerning variation in bio- availability-as opposed to the earlier content problem of digoxin manufactured by different firms and a new U.S. Pharmacopeia, or USP, dissolution rate standard was adopted, we instituted a certifica- `See pages 10657-10672. PAGENO="0039" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 9953 tion program similar to that employed in the content uniformity problem. We put forth new regulations pertaining to the marketing of digoxin which became effective on January 22, 1974. And once again, with your permission, I would submit a copy of these regulations for the record.' . The regulations require batch-by-batch certification of digoxin until the firm demonstrates that its product consistently meets the new USP dissolution standards. These regulations also require that all firms intending to continue the marketing of digoxin must pre- sent evidence of bioavailabiity within 180 days after filing such notice of intent. Senator NELSON. Are you able to assure that all digoxin now going into the marketplace meets the TJSP standards, the new TJSP standards? Dr. SCHMIDT. Yes, sir, we feel so. We worked with the industry to recall the defective products over the last few weeks, and we believe that the new program will give every assurance that the digoxin being marketed will meet the new standards. Senator NELSON. How many digoxin products were in the market- place when this issue was raised about lack of content uniformity and bioavailability? How many firms were in the marketplace? Dr. SCHMIDT. Dr. Crout was on top of this. Dr. CR0U'r. If you would allow me a little leeway with the num- bers-. *Senator NELSON. Yes. And if you want to submit for the record a correction and the names of the companies and the names-the trade names of those that had trade names-I would like to have it for the record at this point. But you go ahead and off the cuff tell me. Dr. CROUT. Fine. The problem with inconsistent tablet uniformity was discovered in 1969, and at that time there were, as I recall, 44 firms manufac- turing digoxin. [The information referred to follows:] DmoxIN MANUFACTURERS American Pharmaceutical Co., hillside, N.J. Banner Gelatin Products, Chatsworth, Calif. Barr Laboratories, Inc., Northvale, N.J. - Bell Pharmacal Corp., Greenville, S.C. Burroughs Welicome Co., Inc., Triangle Park, N.C. Blueline Chemical Co., St. Louis, Mo. Cord Laboratories, Inc., Detroit, Mich. J. Davis Laboratories, Inc., Palisades, Park, N.J. J. W. S. Deiavau Co., Philadelphia, Pa. Endo Laboratories, Inc., Wilmington, Del. Halsey Drug Co., Brooklyn, N.Y. Heather Drug Co., Cherry Hill, N.J. E. W. Heun Co., St. Louis, Mo. KASCO.EFCO, d.b.a. B. FOUGERA, Hicksville, N.Y. See page 10673. PAGENO="0040" 9954 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Ketchum Laboratories, Amityville, N.Y. Lakeside Labs., formerly Davies-Rose-Hoyt, Needham, Mass. Lannett Co., Philadelphia, Pa. Lederle Laboratories, Pearl River, N.Y. Marshall Pharmacal Corp., South Hackensack, N.J. Parke, Davis & Co., Detroit, Mich. Park Laboratories, Inc., Fredonia, Wis. Premo Pharmaceutical, South Hackensack, N.J. Philips Roxane Labs, Columbus. Ohio. Rexall Drug Co., St. Louis, Mo. Rondex Laboratories, Gutenberg, N.J. Stanley Drug Products, Inc., Portland, Oreg. ION Pharmaceuticals, formerly Strong Cobb Arner, Cincinnati, Ohio. Tablicaps, Inc., Franklinville, N.J. TownePaulsen & Co., Inc., Monrovia, Calif. Vale Chemical Company, Allentown, Pennsylvania. Vita-Fore Products Co., Ozone Park, N.Y. Vitarine Co., Springfield Gardens, NY. West-Ward, Inc., BronT, N.Y. Wyeth Labs, Philadelphia, Pa. Zenith Laboratories, Inc., Northvale, N.J. STATUS REPORT DIGOXIN CERTIFICATION PROGRAM-APRIL 9, 1974 On January 22, 1974, Regulation 21 CFR 130.51, "Digoxin Products for Oral Use; Conditions for Marketing" was published in the Federal Regi8ter setting forth FDA's position regarding the conditions for the continued marketing or~ oral digoxin products. The regulation, which became effective on the date of publication, has the following requirements for oral digoxin products: 1. Declared all oral digoxin products to be new drugs. 2. Requires submission of ANDA, including bioavailability tests for all oral digoxin products. 3. Requires a mandatory, FDA certification program based on dissolution testing by NCDA. No oral digoxin product may now be released without FDA approval. 4. Requires recall of any previously marketed batch of digoxin tablets found to fail USP dissolution specificatio~ms. A meeting was held on January 21, 1974, at the Parkl*awn Building prior to publication of the Federal Regieter announcement to advise the industry of the status and importance of the program and to enlist their cooperation for its success. The current status of the certification program is as follows: PREVIOUSLY MARKETED BATCHES 1. One hundred and fourteen (114) previously marketed batches of digoxin from twenty-seven (27) manufacturers have been tested for dissolution and the results reported to the manufacturers. 2. Thirty-four (34) manufacturer batches representing fifteen (15) manu- facturers and fourteen (14) distributor batches representing ten (10) distribu- tors have been found to fail the requirements of the Federal Regi8ter, state- ment and removed from the market place by recalls. BATCHES SUBJECT TO PREMARKETING CERTIFICATION 1. Thirty-four (34) digoxln manufacturers are involved in the program. 2. Twenty-one (21) batches from five (5) manufacturers have been certified by FDA and released for marketing. 3. One (1) manufacturer has submitted four (4) consecutive passing batches for each of its three (3) digoxin dosage strengths and has been temporarily released from the certification program. 4. One (1) manufacturer has submitted four (4) consecutive passing batches for its one (1) dosage strength and has been temporarily released from the certification program. PAGENO="0041" COMPETITIVE PROBLEMS IN THE DRUG INDV~TRY 9955 BATCHES REJECTED FOR CERTIFICATION Five (5) batches from three (3) manufacturers have been denied certifica- tion for failure to meet USP and/or P.R. requirements. Senator NELSON. So there were 44 cligoxin products jn the marekt- place by 44 different companies? Dr. CROUT. They were all making an identical product. They were making 0.25 milligram tablets, and there were, as I recall, 44 manu- facturers. Senator NELSON. How many of those had brand names and how many of those were generic? Dr. CROUT. Well, the most prominent brand name is Lanoxin made by Burroughs-Wellcome. I am not aware of any other brand name for digoxin. I think the other 43 were sold under the generic name of digoxin. Senator NELSON. Do you have the names of the companies that were manufacturing this drug? Dr. CROUT. We can submit that. Senator NELSON. Would you submit names of those companies for the record? Dr. CROUT. Yes, sir. Senator NELSON. And there was only one that met the standards? Dr. CROUT. No, by no means. Well, beginning back in 1969, the firms that had tablets out of compliance, from the stand- point, remember, of content uniformity, they had mixing problems- some tablets had more digoxin than was supposed to be in the tablets, some had less-entered into a voluntary certification program. Several firms dropped out of the business at that time, and we ended up with something on the order of 30 to 35 firms making digoxin between 1970 and now. The tablets entering the market from 1969 through now have met ~the USP standards for content uniformity. In 1970, I believe, 1970 or 1971, a new problem appeared with digoxin. The discovery was made that certain of the tablets lacked bioavailability; that is, that the blood levels in patients re- ceiving those products were not up to standard, even though the tablets themselves were meeting TJSP specifications at that time. So between 1971 and late 1973 a number of things happened in the research scene. The Food and Drug Administration, and the USP, went to work to develop a dissolution rate test for d.igoxin. When that became available in late 1973, we published our new regulations and said all manufacturers must meet the new USP dissolution rate specification. Senator NELSON. Was there a direct correlation between the dis- solution rate and the bioavailability? Dr. CROUT. If you will allow the word "direct" to be' interpreted a little broadly, yes; there is a pretty good correlation. We then tested almost all the products that were on the market in late 1973 for the new dissolution rate standard. We tested about 30 manufacturers' products. There may be. a few more, but we tested~ 30 manufacturers. Twenty of those passed, and the other ten were recalled. PAGENO="0042" 9956 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Now, everybody must do a couple of things at this point. They must enter a certification program, and they must submit to us an ANDA stating that they are going to do bioavailabihty testing within 180 days. We do not know yet how many manufacturers are going to submit ANDA's, but we would assume that it is on the order of at least 20. Senator NELSON. What do they have to put into the abbreviated NDA? Dr. GROUT. I beg your pardon? Senator NELSON. What do they have to include in their abbreviated NDA? Dr. GROUT. They have to include evidence of bioavailability. They have to include their specific procedures for making digoxin. They have a plant inspection and so on, which is part of the usual procedure of approving an ANDA. Senator NELSON. What about your batch testing? Dr. GROUT. Batch testing will go on for as long as necessary, but we assume that as the bioavailability data come in and as manu- facturers demonstrate repeatedly that they can make a good batch, they will drop out of this certification program. So we view this certification program as a transient and not a permanent phe- nomenon on the digoxin scene. Senator NELSON. You stated you discovered the problem in 1969. Dr. GROUT. Yes. Senator NELSON. The Defense Personnel Support Center state they learned about the problem in 1965. They have no record of ever having informed the FDA about that. Do you have such a record? Dr. CR01JT. No, and I am not certain what the problem could have been, because the problem discovered in 1969 required a methodology by which you could analyze individual tablets. That methodology was not available in 1965, so whatever problem you are referring to was not the problem that I am dis- cussing. Senator NELSON. Because the technique was not available? Dr. GROUT. The technique was not available in 1965. Senator NELSON. Since it is a very important drug and its availa- bility may very well be critical to patients, should the Defense Sup- ply Center not have notified the FDA of whatever problem it was they said they discovered at that time? Dr. GROUT. I would have thought so. As you know, I was not at the agency in 1965. I do not know what the communication channels between the two agencies were at that time. Senator NELSON. Well, ha,s any system now been established which would require any agency that discovered a problem with any drug to notify the Food and Drug Administration, which has the most significant responsibility for assuring quality? Dr. GRoUT. I think there are several systems established which the Commissioner deals with in his testimony coming up. Dr. SCHMIDT. I might say that when we heard of some criticism by the Agency, we took a look at the communications link, and I asked PAGENO="0043" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 9957 a team from the FDA to visit that Agency, which they did. And I made sure that, there will be effective communication henceforth, at least out of our Agency. Senator NELSON. All right. Go ahead, Doctor. Dr. SCHMIDT. Well, if I might, I would like to just make one point about digoxin. You have heard much about bioavailabthty problems, and the digoxin story is such a nice example of an important drug in which problems arose. The first problem turned out to be content; the second problem turned out to be a dissolution problem. We have instituted a program to handle the problem. In recent months and years much has been learned about bioavailabihty prob- lems, even though it is a young field. And we can now say that these problems are manageable, and I think that the digoxin story is a kind of case history that demonstrates the bioavailability problems very well. Mr. GORDON. Dr. Schmidt, I just want to go back to another prob- * lem that the Chairman was talking about just a few minutes ago, that- is, about your contacts with the DOD. The DOD stated in material given to us that there is a close work- ing relationship between Defense Personnel Supply Center (DPSC) and the personnel of the FDA. As far as I can see, there is no such thing as of now, anyhow. Would that be correct? Dr. SCHMIDT. Well, I do not believe we had a close working rela- tionship in the last few years with the DPSC. At least it does not meet my definition of close. Senator NELSON. But you do now? Dr. SCHMIDT. Well, very recently, we do, because I sent a team up there. I was intrigued by Mr. Feinberg's speeches, and it stimulated me to get a closer relationship. Senat.or NELSON. Please proceed. Dr. SCHMIDT. Thank you. In my prepared statement I use another example of this prob- lem, the large volume parenteral problem which I mentioned, and I would skip over that since we have talked about them. Another program we have for monitoring drug quality is a joint effort involving the various pharmaceutical associations, the IJSP and FDA. Under this program, pharmacists across the Na- tion report apparent product defects or problems to the tSP. Copies of these reports are furnished to the manufacturer or other distribu- tor of the product in question and to the FDA. Based on the evalua- tion of these reports, we issue investigatory assignments to the field when indicated, or in some cases institute special programs or surveys. During fiscal year 1973, we received 2,750 program reports. The program, while still young, is expanding at a very rapid rate as demonstrated by the fact that we have already received 2,350 re- ports for the first half of this fiscal year. We find in looking very recently that our reports now are coming in at the rate of about 1,000 a month, so that we believe this will be an extremely produc- tive information gathering source. I include an example on page 7 of the problem that came up with PAGENO="0044" 9958 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY nitroglycerin. We learned about this through the program and were able to take appropriate measures to solve the problem. Now, in conjunction with the total quality assurance program, the Agency conducts a number of programs which help assure a urn- formerly high quality Nation's drug supply, including establishment and product inventory. All drug manufacturers must register annually with the FDA. During the past 2 years, we have improved our data systems, and we continuously review our official establishment inventory list of regis- tered firms to verify its accuracy and to insure that all registered firms are active. This was another point made in one of the GAO reports and we agreed with their recommendation and are moving to comply with it. The Drug Listing Act of 1972 authorizes us for the first time to require information that will result in a comprehensive inventory of all marketed pharmaceutical products. We are currently process- ing submissions under this act and expect this file to be active within a few months. This will provide an important resource for other agencies as well as for us and will enable us to use in other areas field manpower formerly needed for gathering information on drug products. Now, another important drug quality assurance mechanism is the new drug approval process, the NDA process, and I believe this is so well known to you that I will not detail it now. Another important measure that, again, you have heard about already this morning from the previous testifier, is our drug efficacy study implementation that, is going on now. The PEST program rates the effectiveness of drugs and seeks evidence of their safety and efficacy. Under this program, some 5,600 ineffective drug products have been removed from the market, ineffective indications for use have been deleted from drug labeling, and where drugs have been shown to be only possibly or probably effective, manufacturers `have been provided an opportunity `to supply the data that will establish their effectiveness. In addition, manufacturers of many products not previously cov- ered by NDAs have been required to submit abbreviated NDAs. Senator NELSON. My copy does not have your figure. You say there are 6,000 ineffective drugs that have been removed from the market? Dr. SCHMIDT. To `date, 5,600 is the figure I gave. This ~s, within a few drugs, an accurate figure. Senator NELSON. That is based on the National Academy of Sci- ences-National Research Council studies? Dr. SCHMIDT. Yes, and our subsequent evaluation of their recom- mendations and our grading of the drug. Senator NELSON. You mention almost 6,000 ineffective drugs. That includes, I assume, those that were found to be "possibly effective" by the NAS-NRC, and subsequently the company could not pro- duce substantial evidence that they were, in fact, effective, so they became classified "ineffective?" Is that correct? PAGENO="0045" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 9959 Dr. SCHMIDT. If there are any in that category, it would be ex- tremely small, and there may be none as yet at all. Senator NELSON. What I am trying to get at is a definition. When you say almost 6,000 ineffective drugs have been removed from the marketplace, I take it that there are `a number of drugs that were classified "possibly effective," and FDA has required in accordance with the statute, that the manufacturers submit substantial evidence of effectiveness. And if they cannot do so, that drug that was classi- fied "possibly effective" then becomes classified "ineffective." Is that correct? Dr. SCHMIDT. Well, yes, sir. Generally where we are now in the process is that the clearly ineffectives for which there were no data supplied have generally been removed from the market. We are now in the process of evaluating data submitted to us by firms for drugs that have been classified as possibly or probably effective. In most instances-and this point relates to an earlier thing you heard about, and that is `the delay in our implementing the study and the court order that we are currently under-there are a num- ber of mechanisms that come under the heading of due process that caused delay in our taking action against drugs. For example, we would propose to remove drugs from the market. This proposal may be challenged, and, indeed, we will probably have to run a great number of hearings and probably then be in court a number of times before we can finish up this job. Senator NELSON. You mean the issue involved will be a difference of opinion between the manufacturer and the FDA as to the ade- quacy of the evidence to support the claim of efficacy? Is that what you are saying? Dr. SCHMIDT. Partly the argument should be scientific, and partly they will be procedural. But in general we are going down a care- fully constructed path that will include hearings before we remove some of the drugs that are in these intermediate categories for which conclusive data of efficacy has not been submitted. Senator NELSON. Please proceed. Dr. SCHMIDT. I mntioned that many products not previously covered by NDAs have been required to submit abbreviated NDAs, and as Dr. Crout has just mentioned, before such applications are approved, we require compliance with GMP regulations. As in the case of NDA submissions, this is determined by a very thorough plant inspection. This program has greatly increased our inspection activities in small and medium-size firms in the past and has re- sulted in substantial improvement in compliance with the require- ments of GMP regulations. The DESI program has also improved and promoted the exchange of information between FDA and other health agencies regarding drug efficacy status and does have an influence on purchasing poli- cies of various Government agencies. The impact of the program is remarkably broad. You heard some of it earlier from the previous testifier. The Secretary of DHEW has directed that Federal funds will not be expended for the purchase of drugs classified under the PEST PAGENO="0046" 9960 COMPETITIVE PROBLEMS IN THE DRuG INDUSTRY program as no greater than "possibly effective" for use in certain of t.he Department's programs, such as the direct care programs, contract care programs, and Federal grant programs. With the Drug Enforcement Administration, which now includes the former Bureau of Narcotics and Dangerous Drugs, we have established procedures for implementing the large-scale DESI re- view follow-up action against amphetamine-containing drugs not in compliance with current requirements. These drugs are under t.he jurisdiction of both the Drug En- forcement Administration and t.he FDA. Although this cooperative action has not as yet been completed, some L755 amphetamine- containing drugs manufactured by 351 firms have been effectively removed from the market.. This regulatory action involved 549 drug recalls and five seizure actions under the FDC Act. With co- operating State health officiais~ a. high degree of success has been achieved in the removal of these violative drugs from pharmacy shelves throughout the country. Liaison for exchange of DESI program information has been established with the Chief Pharmacy Officer of the Public Health Service. In addition, we have received numerous communications from State. foreign government, and United Nations health officials about drug status under the DESI review program. And we rou- tinely forward copies of the DESI announcements to several Gov- ernment agencies. The Federal Food, Drug, and Cosmetic. Act. requires that. samples of each batch of antibiotics and insulin be tested and certified by FDA before these products are released for sale. Batch certification is also imposed for other products when it is needed to assure uni- form quality. And as we have just. previously discussed, digoxin has been subjected to batch certification since our drug surveillance program revealed significant variances from official standards. The FDA regulations set. standards for the facilities and condi- tions under which drugs are manufactured. Because good manufac- turing practices should be "current" and change as drug technology cha.nges, these regulations are periodically updated. The regulations were last revised in 1970 and are currently under further revision. Among changes being actively considered is a requirement that all drug products bear an expiration date based on adequate stability data, and also addition of GMP regulations for specific classes of products such as large volume parenterals. N ow, to return to t.he bioavailability or the bioequivalency prob- lem, it has been shown in recent years that in a few instances chemically equivalent drugs, even ~though they meet all official standards, produce significantly different biood `levels in man, and this is referred to as either bioavailability or, the drugs lack bio- equivalency. To assure the bioequivaiency of chemically equivalent drugs~ we are taking three steps. First, we will shortly publish in final form regulations describing standards and procedures to be followed in conducting bioavailabilit,y studies. Second, we will shortly publish proposed regulations requiring bioavailabihty studies for all drugs of certain kinds; for exampl~., PAGENO="0047" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 9961 those for which the precise dosage is particularly critical and where a bioavailability problem would create a health hazard-and digoxm was certainly an example of that kind of drug; and also those formulations with previously documented bioavailability problems. And last, we will also publish in the near future a notice con- cerning the procedures we will follow in calling for and reviewing data about the potential for bioavailability problems with other drugs; that is, those without previously well-documented bioavail- ability problems. Mr. Chairman, in my opinion, the issue of bioequivalency is cur- rently being overdrawn. As we have learned more about nonequiva- lency problems, it has become clearer that they are limited in num- ber and are manageable. And, again, I think the digoxin story is a classic example of the problem. If I may speak for a moment to our relationship with other Gov- ernment agencies. Many Government agencies are involved in the procurement of drugs. An organization called the Intra-Govern- mental Professional Advisory Council on Drugs and Devices was established to provide these agencies with a forum for the timely interchange of medical-technical information, and, through coop- erative efforts, to improve the quality of drugs furnished to the agencies. Types of information exchanged include specifications, standards, and those involving quality control and inspection. The FDA is a charter member of this council. Working groups have been established within the council for in- depth exploration of appropriate subjects and areas. These groups meet every 4 to 6 months, which provides an opportunity for in- formal contact and exchange of information of mutual interest. The FDA supplies, the DPSC with copies of FDA daily action reports identifying all seizures, prosecutions, injunctions, and recalls involving drugs. Since September of 19'T3, we have also been supply- ing DPSC with unevaluated copies of all notices of observations, the form supplied to all drug firms by our inspectors at the end of inspections. These documents represent the individual inspector's raw and unreviewed observations. Representatives of the Bureau of Drugs maintain frequent con-. tact with the various Federal purchasing agencies and continually respond to inquiries, both written and, by telephone, from DPSC, Defense Medical Material Board, Veterans Administration, GSA, and Public Health Service Stock Pile Management, concerning firms and products. These inquiries generally involve such matters as the adequacy of labeling, "new drug" status of drugs, FDA inspectional and laboratory results, and tests, procedures or other data in New Drug Applications that `have been submitted to us. In addition, when a drug is to be recalled from the market and we determine from distribution reports that the firm has supplied the drug to DPSC, VA, or other Government agency, we notify that agency of the recall. It is then the responsibility of that `agency to insure appropriate recall of the drug under its control. When we receive a report through our Drug Defect Reporting System, the DPSC is notified whenever the report originated from PAGENO="0048" 9962 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY a Federal hospital or other Federal installation, and also where a Federal stock number is part of the labeling of that product. Again, as you heard earlier, we have completed actions to imple- merkt the recommendations of the March 1973 GAO report on En- forcement of Good Manufacturing Practices for Drugs. We have developed a monitoring system to identify, first, new drug firms that require inspection; second, existing drug firms that fall to re- register for a current year; and three, firms that require inspection to fulfill a statutory requirement for biennial inspectioii, as we d.is- cussed a few minutes ago. In addition, FDA has revised the Administrative Guideline f?r GMP's to -provide more specific guidance to FDA personnel in determining the need for regulatory action subsequent to a GMP type of inspection. Now, that guideline is under current considera- tion for further revision. The more recent GAO report in December of last year on Improv- ing the Federal Procurement of Drugs recommended that the sepa- rate quality assurance activities of the DOD, the Veterans Admin- istration, and the FDA, should be consolidated into a single organi- zation. We believe this to be a sound recommendation that will enhance the efficiency of the Federal quality assurance efforts. Senator NELSON. Is that recommendation being implemented? Dr. SCH~IIDT. Yes, sir. We have begun, we have proceeded perhaps a little further with the Veterans Administration, in part I think because it is a smaller operation. We have a general agreement with the Veterans Administration to have us provide for them drug quality assurance. Indeed, with the VA we have been doing drug analyses for them for a long time. With the Department of Defense, we have `been talking with offi- cers of the Department, and I believe have secured general agree- ment that the FDA can and will provide quality assurance. We do not have specific details worked out as yet. However, I will put it in the category of a general agreement to agree. Senator NELSON. It is your expectation that the responsibility for quality assurance for the DOD will be assumed by the FDA? Dr. SCHMIDT. We believe this is a proper thing to do. We be- lieve we can do it, and we `believe that the DOD agrees. There are probably two principal areas that I will wish to see adequately spelled out before I will be happy with any arrangement we might come up with. The first area regards purchasing. I think that we should and can and will see to the quality assurance, but I want to be assured that we do not get involved in the actual pur- chasing of the drugs and the setting of purchasing specifications, which I think is kind of another question. The second area is one that you have already touched on, and that has to do with the special requirements that Mr. Feinberg mentioned in his speeches. I am cautious in this area because I feel, first of all, I do n~t know enough about the special require- ments to speak comprehensively and wjsely to them. In general, we feel that the quality of drugs and the safety of drugs is the same thing for the military as it is for the civilian population. And if PAGENO="0049" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 9963 indeed there are requirements over and above our present compendia or other requirements for drugs that are laid clown by the DOD, and these are legitimate, then we should make the requirements for drugs that are issued generally to the population. Senator NELSON. Well, do you have any indication that the DOD has any standards or requirements that exceed the coinpendial re- quirements? Dr. SCHMIDT. I just have a series of questions about whether or not the requirements really reflect on the quality of the drug or not, or reflect on some more or less arbitrary requirements that are laid out by the DOD for some special purpose of their own. Now, there may well be, I suppose, some packaging requirements for shipment of drugs to Timbuktu or wherever, that really do not have to do with the quality of drugs. But in general I do not see the need for two standards of drugs, one for the military population and one for the civilian. In short, we feel that the FDA is the most logical focal point for the quality assurance responsibility of the Federal Government, and I mentioned we have been talking to the VA and the DOD re- cently about consolidating these efforts, and we requested from the Department of Defense and the Veterans Administration informa- tion as to precisely what resources they now expend for drug quality assurance. We expect that within 30 days of receipt of such data, as well as data involving any particular quality requirements they may have, we can prepare and circulate a program in both agencies that will give them the assurances that they can legitimately re- quire that we can in a timely fashion meet their needs. At the present time, we direct essentially all of our human drug budget, which is approximately $43 million to $44 million to assur- ing that the drugs in the marketplace are safe and effective. During the last 2 years we have analyzed thousands of drug samples in both certification and surveillance programs and have inspected 97 per- cent or 100 percent of those manufacturers of human prescription drugs who are responsible for about 95 percent of the marketed drugs. We believe that the impact of our quality assurance programs on the drug industry has made that industry one of the most quality control conscious industries in the country. This has resulted in a drug supply for this Nation that we believe to be of the highest quality in the world. We plan. to take any necessary measure to strengthen further our quality assurance program in the months ahead. We know we will find problems in the future. Indeed, this is to be expected. When they are found, however, we will correct them, and thereby take one more, step toward the goal of a consistently and uniform& high quality drug supply. Mr. Chairman, we will be very happy to respond to any questions that you or the staff members may have. Senator NELSON. Thank you, Dr. Schmidt. As you know, for quite some time a representative of the DPSC, Mr. Max Feinberg, has made public statements which, if true, 32-814 (Pt. 24) 0 - 14 - 4 PAGENO="0050" 9964 cOMPETITIVE PROBLEMS IN THE DRUG INDUSTRY would tend to cast doubt on the quality and vigor of FDA's quality assurance program. The Pharmaceutical Manufacturers Association has widely quoted Mr. Feinberg's statements and relied heavily on them in opposing Secretary Weinherger's proposals for drug re- imbursement costs. Mr. Feinberg has testified before State legislative bodies in oppo- sition to the repeal of the antisubstitution laws. This subcommittee has asked the DOD for material to support Mr. Feinberg's charges. This material will be placed into the record of these hearings at the appropriate place. A copy of this material was also given to the FDA and others for comment and analysis.' In addition, members of the office of compliance of the Bureau of Drugs visited the DPSC in Philadelphia to ascertain precisely what kind of data could have been the basis of Mr. Feinberg's many speeches and articles. We would like to have you discuss this matter and these data in detail. For example, Mr. Feinberg stated that: "We develop defini- tive product specifications which often exceed official or commercial standards." On the basis of the material submitted to you, would you please tell us the significance of these so-called extra requirements and the kind of drugs to which they are applied. Have any complaints about drugs or their manufacturing plants been submitted to the FDA by the Defense Department in the past 5 years? Have they ever resulted in FDA action? In other words, has DPSC ever given you information sufficient to bring about an action on your part? Given the information you have about DOD from the data they submitted to us and your examination of data in Philadelphia, how would you compare DOD's quality assurance program in size as well as quality with the FDA's? How significant really are DOD's ac- tivities in this field? Would you mind commenting on that? Dr. SCHMIDT. Mr. Chairman, I might make first just some gen- eral comments, and then if there are areas that you wish to explore in a more detailed fashion we can double back on it. I myself became aware of these particular speeches by reading them, and it may be that my scientific background helped me in evaluating them as I read them. But I was not particularly alarmed or upset by the speeches myself, because they were general. There were no specific figures or times or any solid evidence contained in the speeches. Mr. GORDON. Excuse me, Dr. Schmidt. There were some specific figures with respect to rejection of drugs and manufacturing plants. Dr. SCHMIDT. Well, again, I guess I began by saying that perhaps my having read scientific literature for 20 years or more kind of helped me with this, because if I see a figure that says 43 percent, and it does not say 43 percent of what, I generally sk~p to the next article. 1 See page 9978. PAGENO="0051" COMPETITIVE PROBLEMS IN THE DRuG ~X~VSTR~ 9965 Three, as you know, is 60 percent of 5. And 300 is 60 percent of 500. And there is a difference of several hundred there. And in gen- eral this does explain why I was not alarmed by what I read. I was somewhat alarmed, however, that the PMA and others began quoting from and basing testimony on what I considered to be quite insubstantial grounds. And I think that any critical reader of the speech or anyone knowledgeable in the area would realize that you really cannot say too much definitive on the basis of this. For example, it is stated that we do not inspect 100 percent of drug firms every 2 years. And of course we do not. We cannot. There is no way we can. Senator NELSON. But you do 100 percent in 21/2 years? Dr. SCHMIDT. Well, we do do that. We do 100 percent of inspec- tions of those firms that manufacture 95 percent, at least of pre- scription drugs. We do many more inspections of those drug firms in which we know there are problems. So that the main question I have in regard to what Mr. Feinberg says is, what relationship does all that he says bear to the quality of drugs. You mentioned early on his making the point of their standards exceeding compendial standards. Well, fine. My question is, what relationship do the standards they set, exceeding compendial standards have to do with the quality of the drug. And from what I have seen of their standards, they either do not relate to the quality of the drug at all or they may relate to packaging or some legitimate need of the military. I did send a team to visit the establishment and Mr. Feinberg was generally cordial and helpful to our team in reviewing what he does and how he does it. And I think perhaps, was a little em- barrassed after he had information provided to us that there were inaccuracies in his speech. He still did not change the speech. He apparently had some secretarial problems that prevented the speech from being retyped. The inspections, the big point about GMP's, I think, failed to find evidence to support his charges, and he has failed to provide us with evidence that support the charges in his speech that his inspections demonstrate our failure to maintain quality. The number of analyses of drugs done there is very small, and the principal analyses are done, not on production runs of drugs, but on special runs of drugs done by a new company wishing to make the drug, in many instances a company that has never made it before. And his 45-percent rejection rate is of a relative handful of drugs on a nonproduetion run by companies, some of which have never made it before and have never sold drugs to DOD before. Mr. GORDON. Dr. Schmidt, may I interrupt for a moment? Here is the kind of statement the public has been hearing-I am going to quote from his speech: The rejection rate on DOD plant inspections is 45 percent, and the rejec- tion rate on precontract award samples Inspections is 42 percent. It does not say percentage of wh~it or anything. Now, when a lay reader sees this, he is going to be alarmed, do you not think, when he sees this? PAGENO="0052" 9966 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Dr. SCHMIDT. Well, an uncritical reader may very well be misled by those statements. Mr. GORDON. Here is another statement: Based on my experience of drug plants, it is my firm conviction that the primary problem lies in the fact that many producers in the business today ~re in gross violation of FDA's good manufacturing practices regulations. `L1hose same firms are manufacturing drugs on a daily basis. Here is another quote: We have seen totally unacceptable housekeeping conditions involving dirt, fifth and rodents. We have reviewed production records that showed noncom- pliance with the company's own standards. We have found instances where Ingredients in finished products are not adequately tested. If a person reads or hears this, I would think he would be alarmed. I certainly would. We asked the DOD for evidence to support these statements. We submitted the information to you. And what do you have to say about it? Dr. SCHMIDT. Well, many, many of the inspections that they have done, I think principally the inspections that he is quoting from there, were not done when the company was in full production. I really do not know on what basis the author of those statements is convinced. He would have to speak for himself in those matters. I think it is true, I could go into the kitchen of the home of every individual in this room and shut it down for being unsanitary. I made a specialty of that when I was in the service, and I think that as the GAO found out I could probably go into drug firms today and find some violation of GMP in some plant at some time. If we find major and serious GMP violations we take corrective. actions immediately on these. Part of his statement, and I think part of what he was able to put together with other things to convince him, was the statement in the GAO report that in some. instances we have not taken action when a "critical" GMP violation was discovered. We had a problem with the GAO and the definition of the word "critical." We supplied the GAO with proper definition of the word "critical" which did not mean in that report what it sounded like, that we were ignoring critically important GMP violations. It is true that we make informed judgments and wise judgments, hopefully, from time to time not to shut down a plant for any GMP violation. We could readily shut down ever3r pharmaceutical plant in the United States if we went in, as I would in your kitchen if I wanted to find dirt. So that, you know, there is an element of truth in some of these statements. But again, the relationship of these statements to the quality of drugs is inapparent to me, and many of the statements are unsupported totally by any evidence, either in the paper or by any evidence that he has provMed to us. I mention the sampling; the program includes, as you know, drug sampling and inspections, and the numbers of these both are small, and when these are done raises a question, because some of the inspections are not done when the plant is in operation, and therefore would have no meaning to the quality of the drug produced. PAGENO="0053" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 9967 As far as the statements he makes about bioavailability, we spoke of one or two or those already, and I will just say that he has really provided us with no specific special evidence of bioavailability problems that he has that we do not have. The drugs that he men- tions as having bioavailability problems generally everybody knows and has known about the problems, and indeed, we have moved to correct the majority of those problems. Mr. GORDON. Coiicerning the "definitive product specifications" he talks about, he says they often exceed official or commercial standards. Now, on the basis of the material submitted to you, would you tell us the significance of these so-called extra requirements? He makes a big deal out of this. Dr. SCHMIDT. Well again, I would just divide them into two cate- gories. There may be some that are required by the Department of Defense that do not relate to drug quality, but rather relate to shipping problems or maintenance problems in an extremely hot, humid atmosphere or some such. We would need to look at those carefully, and I think work out with their purchasing people the kinds of specs that are legitimately required by the DOD which do exceed compendial standards. There is another group as I look at them, and I will ask Dr. Crout or Mr. Loftus to comment on this in a moment, that do not seem to us to relate to drug quality at all. Do you have a comment? Dr. CROUT. Yes. If we have to base an answer to your question on what was submitted to us through you, then it is quite clear that most of the violations of GMP's as we see them are relatively trivial and unrelated to the quality of the drug. It is quite clear that these specifications relate to the needs of a purchaser, rather than to a general assurance of quality. I think we are hesitant only in that, as Commissioner Schmidt mentioned before, our communications with DPSC have not been strong through the years. We are in many respects still in contact with them on the issue of what is it exactly they do. I do not mean to quote back to you something that you already know about. But I think we can all read down here and read de- scriptions of violations. You know, washroom was not clean; no receptacle for used towels; a loose, slightly soiled roll of towels was available for drying hands; paint had flaked from the ceiling on many locations; dust and refuse was found on the floor in work areas. Again, these are true. But an in-depth GMP inspection is quite a different thing. One is really interested in the recordkeeping of a firm; evidence of repeated weighings, of two people weighing some- thing carefully and checking each other; evidence of analytical pro- cedures at various steps along the way; evidence that the tempera- ture during a cooking procedure was indeed maintained for the right number of minutes at the right temperature. Those are the kinds of information you get Out of a GMP inspection. Now, ~there is not anything like that in anything here. This is a superficial look in and glance kind of an operation. We are not say- PAGENO="0054" 9968 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY ing that the DPSC does not do a good GMP inspection. But if you ask the question on the basis of this piece of paper that you have supplied to us, the answer is "no" in our view. Mr. GORDON. Well, that is what they supplied to us in response to our request. Now, Mr. Loftus was in Philadelphia. Perhaps he might tell us what they are doing there and the significance of what they are doing. Mr. LOFTUS. Yes, sir. Mr. Chairman, when I got these answers I sent wires out to six of our field district offices and I said, the Department of Defense has furnished us this information. DPSC has furnished us this information. They furnished it to the Nelson subcommittee, and we sent it out to you. Wimt did you do about it? What did you think of it in your judgment? These people are professionals. They have been in Food and Drug a long time. They are management people. They have been in a lot of drug firms. And I have wires back from four of those districts, and I have telephone reports from the other two. I believe there are 25 of these reports here, and I think I have 18 or 19 re- ports back. Some of them we never got. One involved a foreign firm that we did not inspect. But what comes out of it is that in one instance the district said in response to a recent inspection that was reported to us by DPSC, yes, Mr. Feinberg was right. We have documented what he said and we are going to do something about it. You will get a regulatory rec- oinmendation of some sort. I got that telephone report. In the main, they said, we either made an inspection as a result of the report or we had already made an inspection or we evaluated it, and in our opinion it was either not a GMP problem at all, or if it was, it was a minor UMP problem. What I am saying to you is that representatives of six different field districts of the Food and Drug Administration-I am talking about management people who have been in the Food and Drug Administration a long time-arrived at value judgments that in the main-not in every case, but in the main-these are relatively minor things. Now, I do not want to put this, or take this thing out of per- spective. Nothing, nothing is completely minor. What we aim for, Mr. Feinberg aims for, is abso'ute perfection. Absolute perfection does not exist in a drug firm. It does not exist in this room. It does not exist in my home or yours. But we aim for it. We do not mini- mize and we do not belittle what Mr. Feinberg has reported to us. We are glad to get it. As~ a matter of fact, when we make an inspection, at the end of that inspection our inspectors do precisely what Mr. Feinberg's in- spectors do. They write down on a piece of paper a last of every- thing they find wrong in their opinion with the firm, inc~luding, if it is so, an unscreened window that has been locked for years. They will report that, too, for the edification and the knowledge of the management, a goodwill gesture. We do this. We are not required by law to do it. We do it as a simple gesture of goodwill toward the industry, here is what our inspector found. Look to it. PAGENO="0055" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 9969 But when it comes to whether or not the law has been violated and the law says that drugs must be manufactured under current good manufacturing practice, and `the courts have held that this current good manufacturing practice is articulated in the regula- tions under part 133 in the Code of Federal Regulations, title 21, what we call GMP regulations. If there is-I hate to use these adjectives, because they get us in trouble-but if there is a significant deviation from GMP, if a reasonable man who knows something about drug manufacturing would be led to believe or would believe that something is going on in that firm might cause that drug to become adulterated, FDA has an obligation, a duty to act and act now. Our position i~ t~at we do. The allegation of Mr. Feinberg's speeches-and it is throughout many of his speeches, throughout the years-that many drug firms in the United States operate under gross violation of FDA's GMP's is his own private, personal opinion. He believes this. I have had conversations with him that convinced me he believes this deep in his soul. I do not agree with him, nor do our people in our Washington headquarters or in the field. There is a situation which DPSC follows-I have no quarrel with it-the military sets its own rules. We do not interfere with them-in which for some reason a firm that wants to bid and is not on a bidders list must pass a pre-award survey inspection. The preaward survey inspection requires absolute perfection. I do not understand this, but I do not quarrel with it. For some reason, again that I do not understand, once a firm has a contract to manufacture drugs, the rules change and the abso- lute perfection parameters disappear. Proof of this is the fact that samples that they analyze-what do they call them, first production -or samples that they analyze of drugs when a-first article sam- ples-when a production just starts under contract are 20 percent defective. These are their own figures. I do not know how they could be 20 percent defecti\te while they are under inspection by the Department of Defense-they call it DCAS inspector-if they have absolute perfection. It does not make sense. Again, I do not want to, and the Commissioiier has tried very hard not to deprecate the requirements of as much perfection as you can possibly get. This is what we are working for. We are not trying to pooh-pooh good housekeeping. We want good housekeep- ing in drug firms. Senator NELsON. But if I understand your testimony and that of the Commissioner: One, that you have considered their criticisms on good manufacturing practices in the main to be insubstantial; two, that if there was any violations of good manufacturing prac- tices that affected the quality of the drug, you would consider that a major, important matter, and if they did not affect the quality of the drug. you may require them to correct it, but that you do not consider it a substantial matter. PAGENO="0056" 9970 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Is that a roughly correct statement? Mr. LOFTEIS. I would only qualify it, sir~ to say that might, in our judgment, affect the quality of the drug. If it is established that the quality of a drug is affected, there is no question but that we would take action. Dr. CROIIT. May I add one other point that I think we are mak- ing. And that is we think that based upon the man effort that goes into an inspection, \the DPSC, like everybody else must rely on the FDA inspector for the indepth inspection of plants for GMP's. Senator NELSON. Because they do not have the personnel to do so? Dr. CROTYr. And simply do not put the time into it, based upon- they have one inspector in a plant for a couple of days. You cannot figure out whether an enormous operation is making drugs by GMP's with one man in a couple of days. It just takes more work than that in a big plant. Senator NELSON. What is the dimension of this inspection made by FDA? I realize it varies, but one man in 2 days could not inspect a major operation. If it is a major operation, what do you generally consider a necessary commitment of time and personnel to make an adequate inspection? Dr. CROUT. This has varied from time to time depending on the inspectional program; but let Mr. Loftus speak to that, and I think maybe the IDIP program would be a good model. Mr. LOFTUS. Yes. It would vary, sir, depending on the size of the firm and the type of the operation. Are they making tablets, are they making a particular type of tablet. For instance, the problem, the GMP problem, the manufacturing quality control problems with regard to meprobamate manufacture or aspirin m.anufacture would be considerably different from the manufacturing problem involving digoxin or prednisone or something like that, where the ratio of active ingredient to inactive ingredient in the one case is extremely high and in the other case is extremely low. You would have tablets in both cases, but one inspection you might do in a couple of days, another inspection might take a week. You get into a manufacturer of parenterals. Whether you are talking about large volume parenterals or small volume parenterals, these are the type of inspections you do not make in a couple of days. Dr. Crout alluded to what we call the IDIP program. We had a few years ago a. program, as we call it, the indepth inspectional program of the entire prescription drug manufacturing industry. I say entire, but I do not deal in absolutes. I think there were a few that we -missed, but we got most of them. And some of those in- spections lasted as much as 6 months, and we did not leave those firms until-_any of those firms-_until our district people were satisfied insofar as human beings can be satisfied that those firms Were actually producing prescription drugs under proper GMP conditions. I have years ago been an inspector myself, and it was nothing to spend a week or 2 weeks in a parenteral plant, to spend several days or a week in a tablet plant, depending on the size. You cer- tainly would not spend 2 weeks or a week in a little mom and pop PAGENO="0057" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 9971 drugstore that works up some sort of a little salve for the local business. I am told, or we are told by Mr. Feinberg and his colleagues, we were told this when we visited them in .January, that DEOAS has some 20 full-time drug inspectors. I checked that in one of his speeches that he made in 1972, and he used the figure 20. More recently, in my dealings with Colonel Huyck and others of the Pentagon, I have been told that figure is a little higher. But they have some 20 full-time drug inspectors, 5, 6, or 7 of whom, depending on day-to-day problems, I suppose, are what they call resident inspectors. For instance, Lilly might have a resident inspector full-time in the plant. I do not know if that is so. But Lilly might have a re'sident DECAS inspector full time. But in the main, their drug inspectors spend very little time on- it is pretty obvious that they spend very little time in drug plants, because you cannot stretch 20 inspectors very far. Senator NELSON. How many does FDA have? Mr. LOPTUS. FDA has-do you know, Dr. Crout? Dr. CROUT. I might comment on the scope of our programs, yes. There is in the Bureau of Drugs headquarters for fiscal year 1974 an assigned 1,026 people. In the field the drug programs involve 839 people. Senator NELSON. 839 who are inspectors? Dr. CRO1JT. Inspectors and analysts. Senator NELSON. And analysts? Dr. CROUT. And analysts and chemists. Now, inspectors will be about a third of it, I suspect. Mr. L0PTUs. About half. Dr. CROUT. About half. Senator NELSON. About 400 plus? Dr. CROUT. And we would consider of all of these people that roughly, I would say, one half of the whole Bureau's programs are in the quality assurance area, another 40 percent perhaps are in the drug review area; and there is some spinoff, as you recognize, and some linkage between the drug application review and quality con- trol areas. So really, 80 to 90 percent of everything we do is in one of those two areas. And-.-- Senator NELSON. You mean the whole Agency? Dr. CROUT. The whole Bureau of Drugs. Senator NELSON. Oh, the whole Bureau of Drugs. Dr. CROUT. And the other things- Senator NELSON. With over 1,000 people in the Bureau? Dr. CROUT. The other things involve medical communication, or adverse reactions reporting. They are small, and they pick up about 10 to 20 percent of our resources. So we are talking about a t~tal operation of 1,800 people; some- thing like 40 to 50 percent of that entire effort is in the quality assurance area. - Now, the DPSC, as we understand it, is something on the order of 20 to 30 people. We are talking about a diffe~enóe of 50 fold or something between us. That is why I say there is no question that PAGENO="0058" 9972 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY simply on a resource basis the primary inspectional mechanism of the Federal Government that monitors the drug supply in this country is in the Food and Drug Administration. Mr. GORDON. How about laboratory facilities-that is, testing of samples and so forth-how would you compare DPSC? DPSC claims it does not have any M.D.'s. Now, the FDA has M.D.'s, pharmacolo- gists, pharmacists (many at the doctorate level), toxicologists, chem- ists, biochemists, all kinds of specialists-does it not? Dr. CRour. Correct. Mr. GORDON. Now, compare that with what DPSC has. Dr. CROUT. Well, I think you have enumerated what we feel to be our resources. I cannot compare that because I personally do not know exactly what the personnel of DPSC are. Mr. Loftus, do you? Mr. LorTus. The DPSC-neither DECAS nor DPSC has any pharm:acologists, toxicologists, medical people, these kind of thing. Mr. GORDON. Or M.D.'s? Mr. LOFTUS. Or M.D.'s. The DMMB, Defense Medical Materiel Board I believe is what they call it-this is composed of the Sur- geons General of the three services-have advised DPSC to rely on FDA for bioavailability information and support. We are told this by Mr. Feinberg. I believe you have also been told this by the Department of I)efense in answers that they submitted to you. That laboratory-DPSC has a nice little laboratory in Philaclel- phia. It is a good lab, and they have got good professionals there; but they have from 8 to 9 analysts, one of whom is a microbiologist working on human drugs. Now, I do not know how much of their time is spent on drugs, but let us say all their time is spent on drugs. They also work on medical devices and other medical things. Mr. Feinberg told us when we were there in January that that laboratory-Mr. Feinberg and/or his staff told us in his presence that that laboratory analyzed from 600 to 700 samples of drugs in fiscal 1973. Of that 600 to 700, more than 600 involved preaward sample analyses and first article sample analyses. So what this tells us is that that laboratory analyzed somewhere between 0 and 100 finished product samples in fiscal 1973. We do know from information that your committee obtained from the Department of Defense that there were something more than 400 samp1e~s analyzed in fiscal 19Th on contract by other persons other than their own lab. But it all comes down to a rather miniscule effort. Again, it represents a difference in philosophy between the approach that FDA takes to quality assurance, and the approach that the military takes. I am~ not faulting it or criticizing it in any way. But the ap- proach is that when they are satisfied that a particular drug firm can make drugs well, then everything is fine. If they have an in- spector in the plant fuiltime, which is the case with very few or part-time-and I do not know what that part-time comes down to- PAGENO="0059" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 9973 once that inspector is satisfied that the output of that firm is fine, that is it; they accept the drug. I have no quarrel with that either, because we, too, have to rely on the drug firm. But it would seem, and it is FDA's position, that a good quality assurance program operated by Government has to take into account post-manufacture analysis of finished product. It just has to be. Mr. Feinberg said in one of his speeches that the inspector has the right and the duty to utilize the. drug firms' laboratory facilities to make whatever laboratory analyses he thinks are indicated. I said I have difficulty with this, because I know in my own experience that when I was a drug inspector I would have been thrown out of the plant if I tried to use somebody's laboratory facilities to do analyses. He agreed, and he said no, they do not do assays. They do not do content uniformity. They do not do steriliza- tion. But they watch the professional in the firm who does. We asked them what happens if a piece of equipment is out of calibration. Obviously, the results are going to be wrong. What check have you here? And he says, we will be wrong, too. Okay; I was satisfied with that, but it does not help. Senator NELSON. But your inspectors check the calibration, do they? Mr. Loi~rus. Well, they may or they may not, but they certainly do check the finished product. Senator NELSON. Well, do they have the qualification to check the calibration of the material? Dr. SCHMIDT. Mr. Chairman, I think the point here is we do not rely on their laboratories at all; and that is not wheth~r the issue is in or outside of calibration. What we do is take the drug, take it to our own laboratories where we know the calibrations are accu- rate, and do the analysis of the finished product. The point is that he is re.lying on their labs but we do not. We rely on our own laboratories. Mr. LOFTUS. The qualifications of analysts vary. The way to check that is to check the output of those `analysts. Dr. CROUT. Again, if you are interested in a comparative size figure, I can supply or will supply a more precise one. But we run on the order of 10,000 drug analyses in a year. Senator NELSON. Is this against the 800? Dr. Cnotrr. One hundred, as I understand. This is on marketed products. Senator NELSON. They do about 100, and you do about how many? Dr. CROUT. Ten thousand. Senator NELSON. And these are done in your own labs? Dr. CROUT. Yes. Mr. GORDON. Do I understand correctly that they do not `do any testing of finished products? Dr. CROUT. Again, I `think we have to keep in mind that our objectives are somewhat different. We run a monitoring system designed to assure to the extent possible that drug manufacturers are making a quality drug product. They are running a system PAGENO="0060" 9974 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY designed to see that the drugs the military buys meet whatever standards they choose to set up. Now, one of the things they do is say to a manufacturer if you want us to buy your drug, submit us a sample of what you can make. And the manufacturer may never have made it before. He may not be marketing that drug. And those are the ones they ap- pai~entlv, as far as we can tell, put most of their laboratory invest- ment ir~to testing. And therefore, they are dealing with a different population of drugs than we are dealing with. That is why they get defect rates orders of magnitude different than we see. Their testing is done for a different purpose. Senator NELSON. I take it from your comment, Dr. Schmidt, on page 14 then, that you agree with Dr. Edwards' statement made on February 1st before the Health Subcommittee: "Nevertheless, based upon present knowledge, I believe that with very few exceptions any drug prescribed in this country will give the same therapeutic re- sults as any other chemically equivalent product. . . . we regard this issue as limited, well recognized, and manageable." Do you agree with that? Dr. SCHMIDT. Yes, sir. I do. Senator NELSON. Then you stated on February 1st yourself, you estimated that there may be "10, 12 or 14 drugs" which may have bioavailability problems. Is that correct? Dr. SCHMIDT. Yes, sir. Senator NELSON. Can you give us the number of drugs which in the opinion of the FDA present bioavailability problems at this time? Do you have them along? If not, can you submit their names? Dr. SCHMIDT. Yes, sir. My comments were based on a comprehen- sive analysis of list of drugs that have been mentioned in articles, drugs that are in our own files, and so on, that are purported to have bioavailability problems. I need to take a moment to define carefully this list, because the proper assessment of the bioavailability problem includes answering the questions about precisely what drug one is talking about. We ask the question in how many cases have two or more drugs which contain the same active ingredient, the same chemical, which would include the same salt which is in the same dosage form, that is, in pills as opposed to one pill and one capsule, in the same amount-~ that is, the same amount of the ingredient__in which dosage form meets all official compendium standards. Now, I think it is only fair to say that there are bioavailabilit problems with a drug when one can say. that he is dealing wit two things that are the same salt, in the same amount, and the same dosage form, both of which meet compendium standards. When we analyze then the drugs that there have been shown bio- equivalency problems with that meet those requirements, we come up with a list of 12 or 13, which include-would you like me to read the list? Senator NELSON. Sure. PAGENO="0061" COMPETITIVE PROBLEMS IN THE DRUG ItrSTR~ 9975 Dr. SCHMIDT. Acetazolamide, acetylsalicyclic acid in two forms. This list is 13 drugs, and 2 of them are acetylsahcychc acid in 2 different forms. Ampicillin, chloramphenicol, both of which, of course are anti- biotics; digoxin, which we have mentioned; diphenylhydantoin pedi- atric suspension form; nitrofurantoin; oxytetracycime, which is an- other antibiotic-these, of course, are batch-tested; phenylbutazone. Senator NELSON. Not tetracycline itself, but oxytetracycime? Dr. SCHMIDT. I am sorry. Would you say that again? Senator NELSON. You mentioned oxytetracychne. You did not include the parent drug, tetracycline. Dr. SCHMIDT. The antibiotics we are batch testing, as you know. Senator NELSON. You mean this one teracycline- Dr. CRotrr. No. Tetracycline is also on the list. We are coming to it. Dr. SCHMIDT. I mentioned oxytetracycline, then phenylbutazone; riboflavin sugar coated tablets; then tetracycline hydrochloride, which is a plain tetrachloride; and then finally, trisulfapyrimidine, another pediatric suspension. Now, I would again hasten to add that digoxin and the anti- biotics and so on are batch tested, so that while there have been substantiated bioequivolency problems, we feel these problems are being managed. When I said in my testimony that I felt that the bioequivalency area is being overdrawn, what I mean by this is that a lot of en- thusiastic people are in the field hunting up names of drugs that have been suggested that might have bioavailability problems or whatever. I think that one must be precise, and logical, and scientific in his thinking about such problems. And I have been unsuccessful in finding any large mysterious problem area that people hint at in their testimony about drugs. Mr. GORDON. Well this has become a WPA project for many people, It puts them to work to try to dig up these drugs. Excuse me, Commissioner. Did you say that these drugs that are on the market-say tetracycline-may present a bioavai.lability problem. Those that are on the market, however, are bioequivalent, are they not? Dr. SCHMIDT. Well, this list is a list of drugs which we feel meet our requirements for having had a genuine bioequivalency problem. This is not a list of current problems. Mr. GORDON. Oh, not a list of current problems. Senator NELSON. Is it feasible for chemists, pharmacologists, scientists, to make an educated guess in advance, about what kind of a compound and what kind of a form might likely present the bioavailability problem? Dr. SCHMIDT. Yes. And I think very importantly we have in our regulations-and again, I mentioned that we will deal with this problem-dealt with this issue-perhaps I could ask Dr. Crout very briefly to- Dr. CROUT. Yes. I think the answer is yes. And there is increasing data in that area. It is a little easier, I think, to specify the kinds PAGENO="0062" 9976 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY of drugs which are perhaps unlikely to have a bioavailability prob- lem than it is those. which are likely to. And in general, the water- soluble compounds and those which go into solution readily in the stomach, do not have bioav'ailability problems. I would like to, as a general principle, state something that I think has caused a lot of confusion. There are two issues that I think are being mixed up at the moment by a number of people; and they should not be mixed up for us to properly consider public policy. One issue is are there lots of examples of a drug in different dos- age forms, in different crystal sizes, and so on, and different salts, which produce different blood levels? The answer to that is yes. There is an enormously expanding literature to the effect that the same active molecule, if you compound it differently and put it in the form of a different salt, if you put it with different binders in a tablet and so on, that you may get different blood levels. Now, that is being done purposefully by people in biopharmaceutics who are experts, for the purpose of identifying the principles of how to compound a good tablet. Now, you cannot mix that literature up with another problem. The other problem is: If there are already well-known standards for the manufacture of a drug, and if two manufacturers are trying to make the identical thing, absolutely identical-same salt, same dosage size, same tablet, everything-how often-excuse me-and the products they make meets all the compendium standards, how many examples are there then that unsuspectingly those two prod- ucts were different? Now, that is the issue in public policy. And that is the short list which the Commissioner just gave you. Now, I think there are some-they include both the Pharmaceuti- cal Manufacturers Association and the Academy of Pharmaceutical Sciences-who are tending to mix up those two issues and tending to take the large literature, demonstrating a lot of differences be- tween drugs when they are in slightly different dosage forms, and say that is relevant to the second issue, which is two manufacturers trying hard to make a drug, and they both meet identical standards. And those should not he mixed up. I want to make it very clear, because otherwise the list we gave you is subject to attack. But we do not think it is subject to attack if the attackers will stick by the ground rules we just gave you- namely, identical product, identical salt, made by-all meeting corn- pendium standards, and the difference between them* is unsuspected. Senator NELSON. Is there not a further question, and that con- cerns a drug that achieves a different blood level at a different rate, but that this difference has no therapeutic significance. Dr. CROUT. Yes. That is possible; indeed, it happens all of the time. And that is a matter then of judgment on whether these two different forms are identical. But that is a judgment of man that applies to all issues, if you will, and indeed, to all drug issues besides bioavailability. ~We have to make those kinds of judgments, for instance, on clinical data or on efficacy also. PAGENO="0063" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 9977 Senator NELSON. Well, you had the case of chloramphenicol. Dr. CROUT. Correct. Senator NELSON [continuing]. In which the brand name product Chloromycetin achi~eved a higher peak level much more quickly than all of the others, with the blood level dropping off much more quickly. When you look at the charts, one of the other products looked like a bell curve while the other one went up quickly-with a high peak and went down precipitously. Dr. CROUT. Yes. Senator NELSON. Now, at the time the FDA required the other companies to comply with the blood level achieved by the Chloro- mycetin; and there has been no evidence, and I have heard of none since, that the Chioromycetin was more effective therapeutically than the others. But since it had been in the marketplace for many years; physicians had dealt with it; and it was an effective drug for the purpose for which it was indicated, therefore you required the others to achieve the same blood level. If it had been ~the other way around, that the Chloromycetin had a bell curve level and the others achieved a higher level and went down, I assume you would make the same decision, make them meet that same blood level-not based upon the evidence that one was more efficacious than the other, but based upon the fact that you knew one was effective and had been in the marketplace. Is that correct? Dr. CROUT. Correct. Mr. GORDON. Concerning the extra requirements that the DPSC has for some of the drugs which you examined, would it be fair to say that some of the requirements there, which may not have med- ical significance, tend to undermine competition? For example, the use of certain expensive equipment, which may not have any med- ical significance, would at the same time exclude many small com- panies from supplying drugs to the DPSC? Dr. SCHMIDT. In looking over the requirements I would think that some of them would have the effect of limiting those that could meet the standards, yes. Mr. GORDON. Even though they may not have medical significance? Dr. SCHMIDT. Yes. Senator NELSON. Thank you very much, gentlemen, for your very valuable testimony. Dr. SCHMIDT. Thank you, sir. (Whereupon, the hearing in the above-titled matter was recessed at 1:05 p.m., to be reconvened the following day, Thursday, Feb. 21, 1974, atl0a.m.) [Testimony resumes at page 10163. The information referred to by Senator Nelson follows:] PAGENO="0064" 9978 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY MATERIAL SUPPLIED BY THE NELsoN SUBCOMMITTEE TO THE FDA AND OTHERS FOR COMMENT AND ANALYSIS ALAN lISLE, HEY., CHAIRMAN JOHN SPARKMAN, ALA. JACOS K. JAVITS, N.Y. GAYLORD NELSON, WIN. PETER H. DOMINICK, COI.O. ThOMAS J. MCINTYRE. N.H. EDWARD J. GURNEY, FLA. SAM MJNN, GA, J. GLENN SEALI., JR.. MD. EN Err ONNETON LA MEG SUCICLAY ~ E `~Cnff~b ~1ez .~cncd~c DICK CLARK, IOWA SELECT COMMITTEE ON SMALL BUSINESS CHESTER H. SMITh. (CREATED PURSUANT TO S. KEG. 55, SIN? CONGRESS) STAFFOIRECCOR AND GENERAL COUNSEl. WASHINGTON, D.C. 20510 January 17, 1974 The Honorable James R. Schlesinger Secretary of Defense Department of Defense The Pentagon' Washington. D. C. - Dear Mr. Secretary, The Monopoly Subcomeitte of the Senate Snail Business Coadttee has been studying various aspects of drug procurement by agencies of the ~edera1. Government. in connection with our study we would be very grateful if you would send us the information requested on the attached sheets. The Subacemittee would appreciate receiving the requested information by Januar~~ 30, 3.974. If there are any questions, please contact .aen~amin Gordon at the office of the Senate Small Business Comeittee 2254489. Sincerely yours. GAYLORD NRLSOR Chairman' Subcomaittee on I4onpoly Attachments PAGENO="0065" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY. 9979 DEPAU~T OF DEFJSE 1. * On what percent of contracts awarded do you do a pre.award survey just prior to a specific award? 2. What percent of pre~award surveys are done by DPSC? iy DSA? 3 * on What percent of contracts awarded do you do laboratory analyses of pre~'award s~1es? were 4. nov many man.years/devot*d in Tf 1969. 1971 and 1973 to the inspection of drugs by DPSC? By DS~? S * What percentage of aanyears of inspection time was devoted in the same years tos pre.~award surveys? Inprocess inspection? - Acceptance of product inspection? Other? Instore (Depot) surveillance? 6. For Ff 1969. 1971 and 1973 how many mansyear$ of laboratory work went into support of the inspection process? Plesee breakdown the total laboratory Manlears intos DPSC laboratory contract laboratories Other (specify) 7. For fiscal fear 1973 please give the n~er of people ins DSA overhead assigned to DPSC Medical Material DCU Medical rnaterial Sup~t for dr~s Other medical uiIten~II* 32-814 (Pt. 24) 0 - 74 - PAGENO="0066" 9980 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY DPSC a Medical Directorate Supply Operations Technical Operations Laboratory Overhead Procurement Directorate Medical Division Drugs Other S. For Fiscal 1973 give total annpsver of laboratory personnel chemists Pharmacists Support (Specify) Overhead Other 9. Please give total DOD annual budget invo*ved in inspection of drugs for Fiscal 1969. 71, 73. 10. Who evaluates the clinical effectiveness data you re~ quire from some supplies? 11. So.t many M.D.'s are there on the DflC staff? Of these, hat many are pharmacologists? Same information for 1)0* staff. Do you contract for these types of services? (to determine clinical effectiveness)? If yes, please name the contractor and drugs studied for years 1969, 1971, 1973. 13. Please list all technical division personnel who~have s scientific degree of Meeter or PhD? PAGENO="0067" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 9981 13. ror the 150 top dnqs - by dollar volume - bought by DCS, Which pharsaceutial coopanies supplied the in- formatis which was incorporated into each specification? ror each of these drugs, give the niseof phar-' maceutical companies who have been successful bidders on DPSC contracts for each product since original specification was first written. Please give stock nuWaere, and established and trade naMe of each product. 14. Wu*er of c&uq contracts in Europe for the past year? Svj~er of DOZY representatives in Europe that in- epect drug facilities. 15 * In the past several scathe Mr. Feinberg of the DPSC has publicized certain problems for which the Subcosittee is very anxious to secure additional information. His statement and our questions are ~ follows, (a) 0The rejection rate on DOD plant inspections is 45 percent lad the rejection rate on prescontract award sample inspections is 42 percent.~ Would you please explain ~exactly ~ these figures were derived? (b) `aased on ny experience of drug plants, it is my f ira conviction that the primary problem lies in the fact that many producers in the business today are in gross violation of FDA's good manufacturing practices regulations. Those same firms are menu-' facturing drugs on a daily basis. Will you ilease supply, (I) the names of the firms; (2) the dates of the 0groes violations of FM's * good manufacturing practices regulations; (3) were e3s PAGENO="0068" 9982. COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY these were reported to the FDA and other govern- nat purchasing agencies, and if so, when and in what details (4) the exact description of the violation (not a general statement like "p housekeeping," etc). (a) "We have seen totally unacceptable house- keeping conditions involving dirt, filth, and rodents. We have reviewed production records that shaved noncompliance with the companies' own standards. We have found instances where ingredients and finished products are not adequately tested." in the previous question. please su~ply the names of the companies involved$ateS on which violations were found) were these reported to the FDA and other government agencies, and if so, when and how; and the exact description of the violation. (d) With respect to problems of digoxin tablets "This was no surprise to the drug specialists in DflC because we know of many other exasflples demonstrating that compliance with laboratory standards is not necesearily indicative of clinical effectiveness." When did the DPSC drug specialists first learn about the problem with some digoxin tablets on ~ market? Was the IDA informed of this problem by your organization and if so, when' and hafl~ Which of your dflq specialists first be- cs acquainted with the problem? PAGENO="0069" COMPETITIVE PROBLEMS IN TUE DRUG INDUSTRY 9983 Please name the "many other exa~Ies" mentioned. Was the FM informed? When and hoe? (Jive ns and title of drug specialists who discovered these problems? (e) "We develop definitive product specifi- cations which often exceed official or corner- cial standards." Please name each product for Which such speci- fications have been dsveloped~ the significance for each product of these extra requirements, and the medical purpose served by these extra require- nntss / 16. Please state deviations frcs FDA's good manufacturing practices regulations which the DOD considere~ significant, and which are not considered significant by the FM? please identify where there is a difference of opinion. Who in One makes the determination whether the raw observ$tions are significant? What criteria does DPSq use? Does DPSC relate the violation to a particular product? in other words, does the violation, for example, contribute to the contaminat,ion' of the product? -Se PAGENO="0070" 9984 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY RECEIVED JAN 3 1 197k ASSISTANT SECRETARY OF DEFENSE WASHINGTON. 0. C. 20301 HEALTH AND ~I ) J1~1 (I~74 ENVIRONMENT Honorable Gaylord Nelson Chairman Subcommittee on Monopo]~y Select Committee on Smai~l' Business United States Senate Washington, D. C. 20510 Dear Mr. Chairman: This is in response to your letter of 17 January 1974 in which you requested certain information pertaining to the procurement of pharmaceuticals within the Department of Defense. Selected manpower and cost data pertaining to prior years was not readily available. Additionally, our accounting system does not provide for a separate breakout of inspection manpower staffing and costs by commodity. The appropriate activities within the department are engaged in obtaining thedesired data and it will be furnished to you in the near future. You will note that enclosure 1 does not contain a response to the question regarding clinical effectiveness data. The following response is provided: "The Military Medical Services rely upon the evaluations of clinical effectiveness data as accomplished by the Food and Drug Administration pursuant to applicable Federal Regulations (i. e., New Drug Applications, etc~). There are, however, some exceptions such as drugs developed primarily for military uses, i. e. antidotes for chemical warfare agents, certain anti- malarials, etc. Additionally, on an infrequent basis, the Services have been asked to evaluate studies presented by the Defense Personnel Support Center (for example, bio-availability/ clinical effectiveness studies on a few drugs). In the case of these exceptions, the bio - availability/clinical effectiveness data related thereto has usually been evaluated by the appropriate expertise among the professional staffs of all three Surgeons Gene ral's Offices." PAGENO="0071" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 9985 it is hoped that the information provided wlll be of assistance in the conduct of your study. If there are any additional questions regarding this matter please contact Lt. Colonel Theodore D. Wood in my office (Tel. 695-4938). Sincerely, ~ George . Ires Major General, MC USA Principal Deputy Enclosure (1) PAGENO="0072" 9986 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY ~t QUESTIONNAIRE iNFORMATION REQUIRED BY SENATOR NELSON FROM DEPARTMENT OF DEFENSE 1. QUESTION: On what percent of contracts awarded do you do a "pre-award survey" just prior to a specific award? ANSWER: A pre-award survey is an evaluation by a contract administration office of a prospective contractor's capability to perform under the terms of.aproposed contract. Such evaluation shall be used by the contracting officer in determining the prospective contractor's responsibility. The evaluation may be accomplished by use of (a) data on hand, (b) data from another Government agency or commercial source, (c) an on-site inspection of plant and facilities to be used for performance on the proposed con- tract or (d) any combination of the above. Pre-award surveys shall be conducted in accordance with Appendix K, Pre-Award Survey Procedures. A pre-award survey shall be required when the information available to the purchasing officeis not sufficient to enable the contracting officer to make a determination regarding the responsibility of a prospective contractor. Dcfcn~r P~r~.Q~nC1 Support Canter (DPSC) obtains Defense Contract ~ facility surveys on approximate~T iötof the contracts awarded. 2. QUESTION: What percent of pre-award surveys are done by DPSC? By DSA? ANSWER: 100% are performed by DCAS. DPSC may elect to participate and does send technical personnel as part of the pre-award survey team. In FY 73 DCAS conducted 206 pre-award surveys. Of these, DPSC participated in 100. DCAS man-hour expenditure was about 9,000 (about 5,000 in quality and about 4,000 in production). Of this total, approximately 5,000 man-hours were expended by DCAS for drug pre-award surveys (abq~it 3 ~000 quality as~~~.ca..ar~d about 2,000 nonquality assurance).. The remaining man-hours were expended for other Medical Materiel. Enclosure PAGENO="0073" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 9987 Information Required by Senator Nelttn horn D~p4rtment of Defense 3. Qi~ESTION: On what percent of contracts awarded do yoti do laboratory analyses of pre-award samples? ANSWER: For Medical Materiel, pre-award samplesare evaluated on approxi- f inately 9% of the contracts awarded. For drugs the rate is closer to 5%. Laboratory analysis of pre-award samp~I~s is pe~!orinec1 in order to supplement the currently available information and/or pre-award survey and assist the Contracting Officer in determining if a prospective contractor is responsible. The need for samples is predicated upon the available quality history of the prospective contractorand/or the item being procured. 4. Q~jESTION: How many man-years were devoted in F? 1973 to the inspection of drugs by DPSC? By DSA? . ANSWER: DPSC - Approximately 6 man-years of' the technical personnel assigned to the Quality Assurance Branch, DPSC were devoted to the inspection of drugs. DSA - DCAS personnel devoted to the inspection of drugs not readily available, and will be provided in second increment. 5. Q~$~TiON: What percentage of man-years of inspection time was devoted in the same years to: Pre-award surveys? In-process inspection? Acceptance of product inspection? Other? In-store (Depot) surveillance? 2 PAGENO="0074" 9988 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY ~~nformation Required by Senator Nelson from Department of Defense 5. ANSWER: * Domestic Pre-kward Surveys - Preparation, on-site DPSC Participation and Report * Preparation 16% - Requesting, Evaluation, and Report Preparation / where DPSC did not participate 277. Foreign Surveys 177. In-Process Inspection. Acceptance of Product Inspection 37. Other Quality Audit 177. Pre-Award Samples 57. Misc (Supervision, Review of Protocol, Special Inspection Requests, Contract Review, etc.) 117. In-Store (Depot) Surveillance (Quality System Management Visits only) 47._ 1007. * Percentages apply to DPSC man-years of inspection time only. *DCAS percentages not readily available, and will be provided in second increment. 6. Q~JESTION: For FY 1973 how many man-years of laboratory work went into support of the inspection process? Please break down the total laboratory man- years into: * DPSC laboratory * Contract laboratories Other (specify) * ANSWER: Laboratory work in support of the inspection process for Fiscal Year 1973 covering Pre-Award Samples, Contractual Samples, Pre-Acceptance Samples and samples submitted by the QAR for verification is as follows: 3 PAGENO="0075" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 9989 ~.nformation Required by Senator Nelson from Department of Defense 6. SWER: (Cont'd) DPSC Laboratory: 9 Man~Years Cost Contract Laboratories *8 $` 845.00 Other Laboratories: *213 $4,819.55 Walter Reed *144 $3,101.00 U.S. Army Medical Research Lab., Ft. Rnox *69 $1,718.55 * Man-~year data not available. 7.' QtJ~$T1QN: For Fiscal ~ear 1973 please give the number of people in: DSA overhead assigned to DPSC Medical Material' DCAS Medical Material Support for drugs & other medical material DPSC Medical Directorate Supply Operations Technical Operations Laboratory Overhead Procurement Directorate Medical Division Drugs Other ANSWER: Fiscal Year 1973 manning was as follows: DSA - overhead assigned to DPSC Medical Materiel O~. DCAS - Medical Materiel Support for drugs 4 other Medical Materiel -~ nOt readily available. Data.will be pro- vided in second increment. 4 PAGENO="0076" 9990 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY information Required by Senator Nelson from D~partment of Defense 7. ANSWER: (Cont'd) Medical Directorate Supply Operations * Technical Operations Laboratory Branch Provisioning Branch Procurement Overhead * Includes 22 military personnel. DPSC Overhead 8. QUES1~P~: For Fiscal 1973 give total manpower of chemists Pharmacists Support (Specify) Overhead Other ANSWER: Total manpower for the Medical Materiel 1973 is as follows: chemists Pharnacis ts Microbiologists Engineers Engineering Technicians Clerical Support Laboratory DPSC TOTAL *482 115 168 (22) (9) 163 DRUG OTHER 83.5 398.5 12 103 32.5 135.5 (9.5) (12.5) (9) 35 128 36 4 32 130 (Includes 3 military) laboratory personnel Laboratory for Fiscal Year 7 1 6 1 22 PAGENO="0077" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 9991 Information Required by Senator Nelson from Department of Defense 9. QUESTION: Please give total DoD annual budget involved in inspection of drugs for Fiscal 1973. ANSWER: Data not readily available, and will be provided in second increment. 10. QUESTIO~: Who evaluates the clinical effectiveness data you require from some suppliers? ANSWER: Not applicable Will be answered by the Defense Medical Materiel Board. 11. QUESTION: How many M,D.'s are there on the DPSC staff? Of these, how many are pharmacologists? Same information for DSA staff. Do you contract for these types of services? (to determine clinical effectiveness)? If yes, please name the contractor and drugs studied for years 1969, 1971, 1973. ANSWER: The DPSC Medical Materiel Dir~çtorate and the HQ DSA staff do not have an M.D. or a Phar~iaco1ogist assigned. These types of services are not contracted for by DSA. 12. QUESTION~ Please list all technical division personnel who have a scientific degree of Master o.r PhD? 6 PAGENO="0078" 9992 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY ,tnformation Required by Senator Nelson from Department of Defense 12. ANSER: The following Technical Division personnel have a scientific degree of Master: LtCol Jordon D. Johnson, Jr., USAF, BSC MS LtCdr Paul B. Donnelly, MSC, USN MS Lt R. D. Tackitt, MSC, USN MS LtCol Douglas J. Silvernale, MSC, USA MS Mr. Leon Jdzwiak MS Mr. William MacGowen MS Mr. Sidney Genn MS Mr. Paul Licht Mr. Robert Simon MS * Mr. Glenn Kent MS Mr. Irving Meisel MS 13. QUESTION: For the 150 top drugs -- by dollar volume -- bought by DoD: * Which pharmaceutial companies supplies the information which was incorporated into each specification~ For each of these drugs, give the names of pharmaceutical companies who have been successful bidders on DPSC contracts for each product since original specification was first written. Please give stock numbers, and established and trade names of each product. ANSWER: 15Q TOP DRUGS The "Remarks" column of the attached sheets has been annotated to show the names of other bidders who bid on the indicated item but have not received an award. In addition, the "Remarks" column includes information as to whether a New Drug approval, Antibiotic Certification (Form 6), or Bureau of Biologics (BoB) License is required by a firm as a prerequisite to marketing the item. * 7 PAGENO="0079" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 9993 ~tnformation Required by Senator Nelson from Department of Defense `it' 13. ANSWER: (Cont'd) The "Sources of Industry Information" column lists companies that furnished data. The industry information is always reviewed to determine its applicability and suitability. In addition, specification specialists develop significant product data with the assistance of quality assurance personnel, the Nedical Laboratory, plant inspectors, and from literature. A close working relationship exists between DPSC and the ~ersonne1 ~~e'~~ted States Pha~~n ~he Natio~i_Fonnu.l~~, Further. eve.~4rug ~pecification, pu~ç~~ de~criptiQn~ and rnodifica~$~n. is forwarded to FDA, US?, N?, VA, and U.S. Public Health Service. PAGENO="0080" OT' `f~\~:C NT~r(s) & Co. TC(CJST&Y INFO. oloo&&s Valium Roche Labs. Roche Labs. Roche Laboratories Aldomet Merck Sharp & Dohme Merck Sharp & Dobme Merck Sharp & 1~ohme Wyeth Labs Pfizer Labs. 8. R. Squibb 4 Sons S. R. Squibb & Sons Pfizer Labs. Romar Labs. * Eli Lilly & Co. Pfizer Labs. Pfizer Inc. ~li Lilly & Co. * Travenol Labs. Baxter Labs. Cutter Labs. Gantrisin Roche Labs. Roche Labs. Roche Labs. Pfizer tabs. E. R. Squibb & Sons H 783-7218 Diazepam Tablets, NP, 5 mg, 500s 2 890-1856, : Methyl6opa Tablets, USP, 0.2~ Gram, lOGs 3 664-7116 Potassium Penicillin G for Injection, USP, 1,000,000 Units 4 753-5042 Streptornycin Sulfate, USP, Equivalent to 1 Gram of Stràptomycin Base 5 116-4600 DextrOse Injection, lISP, 5t, 1000 cc, 6s 6 146-4425 Stzlfisoxazole Tablets, USP, 0.5 Cram, l000s 7 16(~-74L0 Procaine Penicillin Pot' Aqueous Injection, 1,500,000 Units Pa4ent, NDA Patent, NDA Porm 6 E. S. Squibb & Sons ~orm6 Warner-Chilco~t Labs. Upjohn Labs. NDA F~rrn 6 PAGENO="0081" ________ TF.NiE N.~J.(N) L CO. Polvcillin Bristol Labs Beecham-Nassengill Pharmaceuticals Totacillin Princicen 1 E. R. Squibb & Sons Penbritin Averst Labs. Omninen Wyeth Labs SO5NCNS OF SUCCESSFUL I'~)CSTiFi INFO. BIDDERS Bristol Labs. Bristol Labs Wyeth Labs Beecham-'tassengill Beecham s~assengili Pharmaceuticals B. R. Squibb & Song Aycrst Labs. Eli Lilly & Co. Eli Lilly & Co. Form 6 Metrix Div. of BOB License Armour PharmaceuticaX :Hyland Labs .E.R. Squibb Cutter Labs Courtland Labs Wyeth Labs Form 6 0 Ayerst Labs Unjohn Co. worm 6 Patent 8 181-7635 Amoicillin Cansules, DSP, * 0.25 Gram, l000s 9 165-6545 Ccnhalexin Nonohydrate Cansules, * Equivalent to 0.25 Gram of Cephalcxln, lOOs 10 299-8179 Albumin, Normal Human Serum, USP, 25%, 100 cc 11 687-8047 Bcnzathine Penicillin C Suseension, Sterile, USP, 1,200,090 units. in * Aqueous Susocnsion, Cartridge-Needle Unit, 2 cc size, 20s 12 958-2364 Pronoxvnhene Hydrochloride Causules, USP, 65 mg, SODs Keflex Eli Lilly & Co. Bicillin ~eth Lass Darvon Pulvules Eli Lilly & Co. Wyeth Labs Eli Lilly & Co. Eli Lilly & Co. Smith Kline & French Labs. NDA Ilachelle Labs. Anabolic Labs. Nvlos Labg. Barr Labs. Ledcrle Labs. off natent in 1972 PAGENO="0082" 13 961-55)4 14 890-1fl4 15 014-1028 15 656-16:2 17 901-0043 18 : 90O-21'~6 19 059-90:7 20 : 145-04F9 S(~i$:~CUS (YE SUCCESSFUL TY~\DF N'.FUS) & Co. INUUN':RY INFO. ~iior~ss Nystatin, Gramicidiri, Neornycin Su1fate,~ Mycolog Cream E. R. Squibb & Sons IE. R. Squibb & Sons Patent and Triamcinolone Acetonide Cream, E.. R. Squibb ~ Sons Form 6 * Topical, 15 Grams Plasma Protein Fraction, USP, Heat- Plasmanate Cutter Labs Cutter Labs BOB License Treated, 5% Solution, 250 cc Cutter Labs Hyland, Div of *Hyland, Div of ~rra~'enol Labs lravenôl Labs Chlorpheniramine Maleate, Isopropamide Ornade Spansules Smith Kline & French Smith Kline & French ~4DA * Iodide, and Phenylpropanolamine : Smith Kline & French Labs Labs Labs Off patent in 1957 Hydrochloride Capsules, 500s Potassium Phenox)Jmethyl Penicillin V-Cillln K Tablets Eli Lilly & Co. ~orm 6 Tablets, USP, 4000,000 UnIts, lOOs ~ljLi1li&Co~_____ Abbott Laboratories L Pen-Vee K TaFlets Biocraft Wyeth Labs Triamterene and Hydrochlorothiazide Dyazide Smith Kline & French Smith Kline & French NDA Capsules, l000s Smith Kline & French Labs Labs Labs Patent Sodium Cephalothin, Sterile, USP, Keflin. Eli Lilly & Co. Eli Lilly & Co. Form 6 Equivalent to 1 Gram of Cephalothin Eli Lilly & Co. . * Chlordiazepoxide Hydrochloride Librium koche Labs Roche Labs ~atent Capsules, USP, 10 mg, 500s Roche Labs . ; NDA Norgestrel and EthinyJ Estradiol Ovral wyeth Labs wyeth Labs hDA Tablets, 63s Wyeth Labs PAGENO="0083" * i~:: SOUUCES OF SUCCESSFUL 21 . - . : 912-2404 . * i;~ABLiS}IET) NA~E TRAI)E SAME(S) & CO. IRDUSTRY INFO. DIDDEES - -- ~ Hydrochloride Cap.~ Lincocin The Upjohn Co. The Upjohn Co. sules, tJSP, Equivalent to 0.50 IThe Upjohn Company Gram of Lincomycin, lOOs . . 22 23 660-1676 . ~ 299-R615 ~ ; & *Kaqamycin Equivalent Kanamycin Ringer's US?, 1000 S Sulfate Injection, USPII(antrex . to 0.333 Gram of BristOl Labs Bristol Labs per cc, 3 cc . j . Injection, Lactated, ~ .. CC,; 6s 1, . . . . . Bristol Labs . Cutter Labs Baxter Labs 1M~Gaw Labs. Ts'avenol Labs 24 * ~ . 662-~790 . ~ ., . Erythromycin lOOs . ~ Tablets, 0.25 Gram,1 * . .. . . S Ilotycia Eli Lilly. ~ Company . Erythrocin Abbott Labs . Eli Lilly B Co Abbott Labs I ~ . . .. Eli Lilly B Co. Abbott Labs ~ ~ ~ 25 ~ ~82-~5lO ~ ~. Gram, Gviseofulvin~Fablets, USP, 0.50 500s . . jGrifulvin V Tablets McNeil Labs McNeil Labs - . McNeil Labs Scbering~ Corp . . . . . . . . . . Fulvicin . Schering Corp . . I * 26 27 181-7180 ~ . l42-~206 . ~ Gentamicin Equivalent per cc, Tripo1id~inè Tablets, Sulfate Injection, to 40 ag Gentamicin 2 cc . . Hydrochloride and . Pseudoephedrine Hydrochloride lOOOs . Garamycin . ¶Scberinj Corp Scher.ing Corp I . . . . Actifitd Tablets &,~urroug~s Well- Burroughs Wellcome come B Co, Inc. B Co,, Inc . . I Schering Corp . Burroughs Well- come B Co, Inc . 28 753-2609 ~ * for to 100 [fydx~ocortisone Sodium Succinate Injection, US?, Equivalent mg }tydrbco~tisone Base Solu-Cortef Mix-0- The Upjohn Co. Vial The Upjohn Company S I The Upjohn Co. . REMARKS Patent Form 6 Patent Form 6 Th'e Upjohn Co. Form 6 Off patent in 1972 Patent Form 6 Form 6 off-patent 1972 NDA Patent NDA 0 ITJ in 0 w LT.J in ci 0 z ci PAGENO="0084" `K' ~tCF~ O~ `tcc"$SSUL ` LJIfr ~k1&L~. ~ZWflUrLtc2_. t2LL$° w'rn~EaS ~ RE~MR¼S 29 926-8996 SPIRONOLACTOBE TAMPETS US? 25mg "ALDAC*GNE tAILSIS" Searts I Sesrle Patent, IWA C) SODs i G D~ SearleSto } 30 165-6519 MEASLES MUMPS and RUBELLA VIRUS )SSR J MED 1(50 BoB license VAItINNE LIVE lOs Nerd Shatp'Al)obse I j 31 117-( 450 CULO*OQUIOW PHOSPHATE TABLETS US? ARALEN PHOSPIII,TE I Winthrop Wln;hrop Patent, NBA a 5 Gras, SOOs I Winthrop Laboratories 32 998-' 381 ALLOPURINOL TAALETS US? 100 ag bOg ZYLOPRIM' Burroughs Welleow Burroughs ~elltome Patent NBA Burroughs Vellcome & Co I 33 153-' 738 ESTROGENS CONJUGATED ZkBLETS US? PREMARIN" Aye~t Aysrst 1 25 tag SOOs Ayers! Laboratories L!J 34 926-'019 D5XBRONPUENIRAIIINE MALEATE and `DZS0PHR0T~ CIIRONOTAB White Schering Patent PSBUDOEPBEDEINE SULFATE TABLETS bOOs TABLETS" I NBA~ rJ2 I White Laboratories Inc DRI2tORAL Schering 35, 869-4178 !0DIUM CEPHALOTHIN, STERILE, US? : "ICEFLIN" Lilly Lilly Patent, Form 6 Equivalent to 4 G~sia of CEPUALOTHIM Eli Lilly & CO. 36 782-2662 QUIMIME SULFATE TABLETS USP 0 324 Vitatite Vo * Greta, l000s : **~ Sçrong cobb Amer - Pinray 37 965-2439 OXYGEN, US? with Tube and Face Mask Life-0-Gen ` Union Csrbide Corp Lit a-0-Gen Co * 24 gal, (90 liters) Life-0-Gen Co, (Linde) Union Carbide Corp. * I LiferO-Gen (Linde) * Oxequip Health * Induat,1 .1 ** *4 35 754-0086 DIGYCLOMINE HYDROCHLORIDE, DOXYLAMINE. "BDIDECTIN" Wa. S. Merreil Merrell-Mationsi ~4DA SUCCINATE, and ?YRIDO2CINE -j. MS. S. Merrell Laboratories. MYDROCMLQRIDE TABLETS toes 1 PAGENO="0085" 4lcdhoi, TJSP~ S gal. &l8~92 liters) e ~riajncino1one ~cetonide, Cream, USP, I `Ari~tocort" Lederle 0.51 8oz. (227 Cram) Lederle: Laboratories Ealothane, US?, 125cc `Eluothane' Ayetmt A)rerst Labpratories ~. Eth~diol Di~etate with Meetra~o1 `0~r4en~' Searle *2ahlets, 63s G~ L~Sear1e & Co. Metronidazole Tablets, US?, 0.25 Cram, `flagyl" Searle 2~0s .. ~. 1~. Searle $c Co~ Mulcivitamin ~or Inje~tiou, 10cc `$oluS-Por;e" jl7pjobn Hix-0..Vial 1 * j I The Upjohn Co. Clindamycin Hydrochloride Hydrate *. "Cleoci&' . Upjohn - Caps~les., Equivalent to 150 mg of The. Upjohn Go. Clindaaycin, lOOs - ~~SrJST{T~fl ~E~ML . TRMwS~'F(s2&co. - l04-~000 40 071-f 547 854-~ 504 93~-f~836 43 -1840 44 ~Th4-~34o 45 i59~-892 * SOULCUS OF SUCCESSFUL IFDTJS1S~.'__rNFo. BrDrE~Rs U.S. Indus. thea. Publicker md. Let Chemicals Inc. Carbide and Carbon Chemicals Co. Div. * of Union Carbide * Enjay Chem. Co. Lederle * Ayerst Halcarbon Ltd Scene * Seanle Upjohn Upjohn REMARKQ ______ NDA Patent ~PA ~NDA Patent NDA Form 6 F PAGENO="0086" ~) ERTA~3LISRED N~JIE 46. l4.6-2Z0O~ ISulfadiazine Tablets, lISP, 0.5 Gram; l000s 47 ll6-~000 Dextr~se and Sodium Chloride injection, USP, 100~ cc~ 6s 48 138.4610 Protein Hydrolysate lajectiofl, USP, IGOO c~, 6s 49 7n~.ft383~. T~CO Penbritin Ayerst~ Laboratories POlycillin Bristol Laboratories Omnipen Wyeth Ptix~cipen E R~ Squibb Amcill Parke-Davis t Co Lasix Hoechst Atrónild-S ityerst So 945-6535 51 062-~336 52 998-5812. SOURCES OF SUCC1~SSFUL INDUSTRY INFO. RIDDERS Lederle Labs * Dorsey Labs Reecham- S Massengill * Travenol Labs * Cutter Labs Abbott Labs - McGaw Labs McGaw Labs Travenol Labs * Baxter Labs Don Baxter, Inc Strong Cobb Amer Chase Chem .1. B. Roerig Bristol Bristol Wyeth Wyeth Ayerst kyerst HOechst Hoechst Ayerst Ayerst Muitivitamin Tablets, lOOs Arnpi~[l1.im for Oral Suspensiàn, ~USP, 7.5 Gram Purosemide Tablets, TSP, 40 ag, 1O~s Clofibrate Capsuies, NP, 500 ig ~l0Os. REMARKS MDA Patent Form 6 Beecham-Massengill Patent NDA Patent NDA I. cA 0 LTI LTJ 0 z I PAGENO="0087" TRAU~ N~U(5) & CO. "Surfak Catsules" Hoechst "Indocin" Merck Sharp and Dohme "Xylocaine" Aetra "Lomotil" .G. B. Searla & Co. "Itobitussin Syrup" A. H. Robins "Tinactin Solution" Schering Children's Aspirin Various Piri~ 53 890-l6U 54 926-21S4 55 576-'88'.2 56 074-47)2 57 O84-87~5 58 ~26-22.~l 59 l04-97:~3 r ;~;TSHED ?:A.~!1~ ________________________ Bioctyl Calcium Sulfosuccinate Capsules, HF, 1000's Indsisethacin CapsuLas, NP, 25 mg, lOOs Lidocaine Hydrochloride Injection, US?, 2Z, with Epinephrine 1:100,000,; 1.8 cc, 50's Diphenoxylate Hydrochloride and Atropino Sulfate Tabletg, NP, 500's Glyceryl Guaiacolate SyruD, NP, 100 ag per 5cc, 4 fl. oz. (118 cc) Tolnaftate Solution, USP, 1 B, 10 cc Aspirin Tablets, US?, 75 mg, 36's SOURCES OF SUCCESSFUL ~EDUSTEY INFO. BIDDERS Lloyd Bros. Hoechst Hoechst Merck Sharp Merck Sharp and and l3ohme Dohme Astra Astra Searle Searle A. H. Robins A. H. Robins 0 & W Laboratories :Strassenburg Dorsey Schering Schering Plough PATENT CS 0 PATENT NBA NBA PATENT NBA w L~1j Natcon NDA~ PATENT tTi * I. C C C PAGENO="0088" ESTM3r1 SHED NAME SOURCES OP SHCCESSFUL ~RADENA~1E(S)&CO. INDUSTRY INTO. BIDDERS "DBl.~TD" Geigy jYSY U$V "Meltrol~50" U.S.V. Geigy (v.) ~R) 60 724~6331~ 61 181.~7774 82 j~S6--l344 * 63 ~5~95143 64 1450309 65 ~354O95 66 .9E413593 Phenformin Hydrochloride Capsules, 50 mg, l000s Sodium ~olistimethate, GSI',* ~.yop1~ilized, Equivalent to 0.15 Oram of Colistin Base Tetracycline Syrup, Equivalenz to 25 mg of Tetracyc~&ne H~~droLtb1oride per cG,l6 El. oz~. <473 cc) CalcIum G1uce~tate IüjIc;ion, S c~, 25s NOrethin4ràne and Mestranol Tablets, 63s Bromphenirarnine )(aleate, .Ph4nylephrine HydrocbtGride and Phenylpyopanola.. mii~ Hydruchioride ~E1txir, 4 ft. oz, (118 oc) Povi4one ló4ine Solution, ME, 107, 1/2t1. oz., 15cc, 50* "Colytmycin H" Warner Chjlcott :"ACHROMYCIN-V Syrup" Laderle "Norinyl.t plus 80" Synte~ "Ortho-Novwfl 1/80" Ortho `~Di*etapp" A. H. Robina `B~tadine SQlUtioU". Purdue Pr~ederick Warner Chilcott Lødérle R4chelle Roerig EU Lilly Roused Syn~ex -. Orthà A, H. RobIns 1* 0 0 REMARKS : Patented 0 NDA Geigy L~ Eorm6 Patented Form6 0 L';J ri»= tWA NDA Ortho tWA Off Patent in 1973 Warner Chilcott Lederte Rache1~le Roerig Reine Carlo Eiba Pfizer L~Vttartn~ Abbott EU Lit~y *Pasadgna Research Gotham Syntex A. H. Robins Purdue P~èd~ric1~ I PAGENO="0089" FSPAI~!.;!SJ~Et) NAME 4 Neomycin Sulfa~e~. Hydr*cOrtisone, and Poiymyxin: B Su1f~te Suspen- sion, `Otic, s ~ Ind~me~hacin Capsules, NP, 25 mg,~ l000s ` lm.ipramine Hydr*chloridó Tablets,~ `LISP, 25 mg, 100$ Butalbital, Aspirin, Caffeine, and Phenacetin Tablets, bOOs Plague Vaccine, USP, E Medium, .20 cc Mal linckrodt Chemical Works A. H. Robins 67 754-2436 SOUPCI~S' OF $UCCf~SSFUL . A.1 ~~\~(S)&CO ~ ST~I fld~O 3D~S Rr1~U~CS ~ Càrtisporin BurroughsWell- Patent. Burroughs. Weilcome' come Form 6 Merck-Sharp-Do1~m~ Burroughs Weilcome )Ierck~$harp- ~Dohme 68 931-2680 69 853-4799 70~.j 962-4375 71 935- :128 72 074-4582 73 660- 601 Indocin' Merck- Sharp- Dohme Tofranil Geigy Presamine UsV Piorinal Sandoz Military Item Róbaxin A. 11. Robins Geigy USV. Sandoz Cutter Quinine Dihydrochboride Injectior NP, 0.3 Gram per cc, `2 cc, l2s Methocarbamol Tablets, NP, 0.5 Gram, SOOs Geigy Sandoz Cutter in co- operation with Walt'e~ Reed Army Institute of Research* A. H. Robins NBA Patent NDA Off patent in 1972 BoB License Off patent in 1973 NBA 0 0 (12 0 PAGENO="0090" SOCRCE~ OF SUCCESSFUL -- 74 926-4768 ~ - . ~ 75 l06'7395 * . 76 153-8651 * ~ ~ ~ ITr `n r~\:(S)&CO I\)~ "my I\EO BI~flL~mS Lincomycin Hydrochloride Injec- Lincoc~in Upjohn Co Upjohn Co : tion, USP, Equivalent t.o 0.30 Upjohi~Co Gram of -Lincomycin Base per cc, -10cc . Propranol Hydrochloride Tablets, Inderal Ayerst~ Ayerst 10 mg, lOOs Ayerst Sodium Chloride Injection, USPI I . . Travenol Labs .1000 cc, 6s . McGawLab~ . . Cutter Labs Abbott Labs .* . . Baxter Labs 77 :- 315-1584 . . Foot Powder, Fungicidal, 1 oz (28.35 Gram) . : I Desenex Foot Powder Maltbie Lab Division of Wallace- TiernaS, Inc Wallace and Tiernar~, Inc . Pharmacraff Seaboard t4fg Co . 78 ~8S-7110 ~ 79 890-1907 ~ . .Fluocinolone Acetonid~,Cream, . 0.025%, 15 Gram Colistin Sulfate, Hydrocortisonel Acetate-, NeOmycin Sulfate and Thonzon.ium Bromide Suspension, -Otic, 5 cc Synalar Cream Syntex Labs Coly-Mycin Otic Dropst WarnerChilcott ~Syntex.Labs , Warner Chilcott . Syntex Labs ~ Warner Chilcott ~ -80 754-0374 ~ Povidone-lodine Solution, NP, 10%, 1 Gal (3.78 liters) Betadine Solution Purdue Frederick RFMA~LES - - -- Form6 Patent Patent NDA NDA Form 6 Patent NDA Off Patent in 1973 1' C) 0 L~J Tailby Nason Co Perdue--Frederick Perdue-Frederick PAGENO="0091" S)~CTS 01 SUCCESS!IJL PL1SHED 1'11 Tt~C)C ~`~T.(S) & CO. IM)USIOY liclO. Bhf)DE1tS R&MAOKS 81 375-8555 ~Diazepam Injection, NP, 5 my per cc, Valium Injection Roche Labs jRoche Labs NDA :2 cc, lOs Roche Labs Patent 0 82 689-4177 Oxymetazol.tne Hydrochloride Solution, AFRIN Spray Schering Corp. Schering corp. NDA 0.05%, 15cc Schering Corp. 1 Patent 83 .24-6358 Amitriptyline Hydrochloride Tablets,USP Elavil $erck Sharp & Dohme !Marck Sharp & Dohme INDA 25mg, lOOs Merck Sharp & Dohme Patent 84 ~946-47O0 Sodium Ampicillin. Sterile, LJSP, Polycillln-N Pristol Lab ~ristol Lab Ayerst Equivalent to 0.50 Gram of Ampicillin Bristol Lab. ~4yeth * Beecham Massengill 0 * * I~orm6 Patent 85 994-7224 Detergent, SurgIcal, 7 1/2% Povidone- Betadine Skin Cleanser railby-Nason Purdue Fredericks Off Patent in 1973 Iodine, I galH(3.78ltters) Purd~e-Fredericks Physican's Products NDA Co. Purdue-Fredericks 86 `116-1750 Detergent, Surgical, Liquid, 1 Gal PHISOHEX Winthrop Labs ~4inthrop Labs Off Patent in 1959 WInthrop Labs I. 87 299-9674 ~soniazld Tablets, (iSP, 100 my, lOOs INH -Eli Lilly * ~Iallinckrodt NDA Niconyl- Parke Davis ~, Parke Davis Nydrazid - Squibb * ~anray * ~ll Lilly & Co. Strong Cobb Amer PAGENO="0092" tnuS~wa at & 88 299-8095 Isopropyl Alcobolb NP Sgal 89 299-BAtS Selenj%a suUi4e Lotion NP J $elsu~t 2 5%'Z 81 os (118 cc) Abbott LabS ~o 1as-~4;~ Rifaispin Capau1,a 0 30 Gre lOOt { Ebsactane-Ciba Nil adin-Dow Chat 91 S43r4028 Water for tujention Sterile USP, S cc-, Z~s-- 92 OM-4&92 Chlorctiaaepoxide Rydroàhlpride and -S4btaz- Clidinium Bromide Capsules, 500's Roche Labs~ 93 6164128. Nystatin Tablets, USP, Vaginal, $tycostatfn Vaginal 100,000 units, l5s- : - tablets, 1.LtSquibb&Sona £ Nilatal- Vaginal Tablets- US? I Ledirle Labs. 94 092.2659 Amitriptyline Rydrochloride. Tablets, Elavil, US?, 25 ag, 100's Merck Sham & Dohma *SOUReES OF SUccESSFUL INDUSTRY-. IIITO. BIDDERS: REt4RKS Raskon Inc. I - jshal} (Abbott ISa. : * iciba Pharm. - PATENT Finia receiving * fawarda are- Licensees * rand Liaçenaor is Crápo Lepetit, Spa, a subsid~sry of ow Chemical ~Lincoln tabs, *;torrigis,~. Vitarine Co. Roche Labs. Ikocha Laba. B. ft. Squibb A Sons Lnderle Labs. 1E. ft. Squibb &- Eons Abbott Lbs& Ciba Pbaii~ Dw Chat. Co. -a 0 0 C) PATENT NBA àf I Patent in 1972 Pors 6 Merck Sharp & Dohna Remit Sharp 4 Dohas PATENT NBA PAGENO="0093" (~ ~) ESTARLIEHED_NAIE - TRADE NAME(S) & Co. 889-7929 Iiydrochlorthtaztde tablets, USP, 50 mg~ i000's SOURCES OF SUCCESSFUL iNrusrOY INFO. BIDI)ERS REMARKS Ciba Abbott Lab. NDA Abbott Lab. Ciba Pharin. Merck Sharp & Dobmel 95 94.' 100 101 812-2579 B9O~l534 811-2279 55~i289 890-1496 Esedrex-Ciba Hydro-Diutil4lerck Sharp &Dohme Oretit-Abbott Lab. Myad~butot Tablets Lederle `Labs. Tuberculin Tine Test (T-b Tine Test) Lederle Labs. Diabiflese Tablets if izer Lab. Gelusel Tab Warner-Cbilcott Empirin Compd. Burroughs Welicoine APC Tablets Other Firms "~yde~trasol" Merck Sharp & Dobme Ethambutol Hydrochloride Tablets, 400 mg, lOGs Tuber~u1in, Old Dried Tine Test (Rosenthal) Chlorpropaiflide Tablets, DSP, 0.25 Gram 250s Aluminum Hydroxide Gel and Magnesium Triatlicate Tablets, lOOs Aspirin, Phenacetin, and Caffeine TAblets, NF, 1000 Prednisolone Sodium Phosphate tnjectiox US?, Equivalent to 20 rng of Prednisólone Phosphate per. cc, 5 cc Lederle Labs. Lederle Labs. Pfizer Lab. Warner Chilcott Strong Cobb Amer Notwich Pharmacal Co. Merck Sharp & Dobme Lederle Labs. Lederle Labs. Pfizer Lab. Warner Chilcott Lab `Chase Chemical Co. Whitehall Norwich Pharmacal Beecham-MasSengill Upjohn Company E. R. Squibb * M.S.D. `Patent NDA Patent BOB License Patent NDA Strong Cobb Amer Patent I NDA I .1 0 C 0 PAGENO="0094" TR!~T)E NI~i~(S) & Co. Aspirin Tablets, USP, 0.324 Gm, *l000s Ampicillin Capsules ~"?olycillin" Bristol ~ "Totacillin" Beecham-Massengill "Prin~ipen" E.R, Squibb "Penbritjn" Ayerst "0mni~3en" * Wyeth Benzonatate Capsules, NF, 100 mg, lOOs "Tessalon Perles" * Ciba Pharm. Potassium Phenóxymethy.l Penicillin for Abbott "Compocillin-VK" Oral Soin (16,000,000 Units) Bristol "Eetapezv-VK' * (10 Gram) Eli Lilly & Co. V-Cillin E.R. Squibb Veetids Ampicilhin for Oral Suspension, USP, "Penbritin" 3.75 Gm Ayerst "Polycillin" Bristol "Omnipen" Wyeth "Principen" E.R. Squibb "Amcill" Paike-Davis & Co. &;~CE~ OF SUCCESSFUL INDIJSTRY 1NFO.~ 3fl~DI:RS Norwith S~rong Cobb Amer Parke-Davis E.R. Squibb Bristol Laboratories Ayerst Bristol Wyeth Beecham-Nassengill LR. Squibb 102: 153-8150 103 770-8 343: 104: 66O'l~98 105 080-0852 106 926-8924 REMAP~S *Ayerst Labs. Upjohn Co. Form 6 Patent Beechais-Massengihl Pharm. E.R. Squibb & Son8 Ayerst Laboratories Ciba Pharm.. KI Bristol Wyeth Ayerst I. C Ciba Pharis. 0ff-Patent 1972. NDA Bristol Laboratories1 Form 6 Pfizer Laboratories Ayerst Patent Bristol * 1 Form 6 * Wyeth * Beecham-Massengill PAGENO="0095" 107.125-9922 108 584-59~t7 109 059~27~O 110 584~03~*8 111 ~50-45~7 112 ~i49-l 720 113 :687-22(5 f~~Li~H~J) ~ Vitamin-Mineral Capsule, lOGs Methenamine Mandelate Tablets, USP 0.5 ~n, 500s Sodium Oxacillin Capsules, USP, Equivalent to 0.~5 Gram of Oxacillin in each capsule, lOOs Propantheline Bromide Tablets, USP, .15 mg, lOGOs Psyllium Hydrophilic Mucillotd with Dextrose, 14 oz (397 Grams) ~Water for Injection., Sterfle, USP, 1000cc, 6s CetylpyridiniUm Chloride Lozenges, 400s 3OU~~S OP SPCCESS?UL T:~~f$ N~~(S) & CO. . STi(~T I?:FO. BIDDERS ERMARKS `Filibon F.A." Lederle Laboratories Lederle Laboratori~s Léderle Laboratories `Mandelamine' Warner Chilcott . Warner Chi-lcott Warner Chilcott . ,. `Prostaphli n ~ri stol Laboratories Bristol Labôratories~ Patent ~Bristgl Laboratories . iForm 6 -~ . I Beecham-Massengill `Pro-Banthine Bromide Searle & Co. . Searle & Co. . I NOA' Tablets' .. . 8. 0. Searle & Co. . "Metamucil' .6. 0. Searle & Co. ,tG. U. Searle & Co. I G. 0. Searle & Co.. . . Burton-Parsons ~. ~Baxter Laboratories Don Baxter Inc. McGaw Travenol `Cepacol Throat Lozenges" IWm. S. Merreil Merrell. National NOA ~Wm S Merrell Laboratories ci 0 ITJ 0 w ITJ (/2 LTi ci (I) `.3 I. 0 PAGENO="0096" Plasmanate' Cutter Cutter :Hyland Div. Travenol Premo Strong Cobbkrner Beecham Mas3engill Eli Lilly & Co. Norwich We S. Merrell Brewer & Co. 114 . 299-86 17 115 106-73)9 116 931-4329 117 8904541 .118 080-0975 Sodium Salicylate Tablets, US?, 0.324 Gram, l000s Propranolol Hydrochloride Tablets, 40 ag, lOOs Theonhylline Ephedtine Sulfate and Hydroxyzine Hydrochloride Tablets Sodium Methicillin for Injection, USP, 1 Gram Aluminum Hydroxide Gel, Magnesium Hydroxide and Simethicone Suspension, Sfloz., 48s 119 880-3935 Plasma Protein Fraction, US?, Heat-Treated, 5%, 500cc Inderal' Ayerst Ayerst Marax 3. B. Roerig J. B. Roerig `Stapitcillin for Injection'Bristol Bristol Laboratories Mylanta' Stuart . Stuart Strong Cobb Amer Eli Lilly Chase Chemical Ayerst PATENT NDA 3. B. Roerig NDA Bristol PATENT I Form 6 Stuart PATENT BoB License 120 114-8935 Codeine Sulfate Tablets, HF, 32 mg, lOOs Cutter Hyland Div. Travenol I. C I. C PAGENO="0097" 0 121 764-: 313 122 985-7301 123 685-5442 124 926-8985 125 926-9083 126 182-6761 127 890-1355 SOCP~CFS OF :~C~ISUTC UVIE _________ T1~DE YCUE(S) 0 CO. I::CCSThY INFO. Chlorzoxazone and Acetaminophen HcNei 1 McNeil * Tablets, SOOs "Parafon Forte" Acetaminophen Tablets, HF, 0.325 Gram, "Tylenol" McNeil l000s McNeil Head Johnson Dextrose in Lactated Ringer's * Injection, 57., 1000 cc, 6s * Dextromethorphan Hydrobromide and "Robitussin-ON" Robins :Glyceryl Guaiacolate Syrup, 4 fL oz., A. H. Robins Dorsey (118cc) !Atropine Injection, 2 mg Triprolidine Flydrochioride and Actifed Syrup . Burroughs Weilcome * Pseudoephedrine Hydrochloride Burroughs Weilcome & Co. and Co. Syrup 4 fl. oz. Medroxyprogesterone Acetate Tablet, Provers Tablets ~Upjohn Co. USP, 10 rag, lOOs Upjohn Co. SUCCESSFUL 3I:~DERS jMcHeil McNeil Head Johnson rDorsey Travenol Cutter Robins *C&W Pennwalt Reine Rodana Research Corp. Burroughs Wellcome &Co. Upjohn Co. NDA Patent Natcon Patent off Patent in 1972 NDA Patent ND& PAGENO="0098" Cutter, Travenol McGaw Abbott Pasara Sodium Tablets Dorsey Lab Dorsey Parasal Sodium Panray Pamisyl Sodium Parke-Davis AVC Vaginal Cream Herrell-National Merrell-National "Ferro Sequels Capsules' Lederle Lederle Ciba Pharm. Co. NDA U~john Co. PATENT NDA Mead Johnson PATENT NDA Travenol Lab. !lcGaw Labs. Abbott CuEter Labs. Dorsey Labs NDA Strong Cobb Amer Panray Miles Merrell-National NDA Lederle 128 584-28)5 129 982-9059 130 937-1758 ~:~r.cs~ ~ (`0. Hydralazine Hydrochloride Tablets, Apresoline Hydrochloride NP, 25 mg, l000s Tablets * Ciba Pharm. Co. Tolbutamlde Tablets, USP, 0.5 Gram, Orinase Tablets 200s Unjohn Co. Ethinyl Estradiol Tablets & Oracon Diethesterone w/Ethinyl Estradiol Mead Johnson Labs. Tablets, 63s 131 222-1357 Sodium Caloride Solution, DSP, 0.9% 1500 cc, 6s 132 861-0867 Sodium Aminosalicylate Tablets, DSP, 1.0 Gram, 10005 * Ciba Pharm. Co. Uojohn Co. Mead Johnson 133 890-2217 134 074-2981 * Sulfanilamide, Allantoin and Aminacrine Hydrochloride Cream, Vaginal, 4 oz (113.4 Gram) Ferrous Fumarate & Dioctyl Sodium Sulfosuccinate Capsules, l000s :~ C 1~ 0 LTJ ITJ 0 LTJ PAGENO="0099" 135 2998739 Chlortetracycline Hydrochloride Aureomycin Patent Ophthalmic Ointment, l~i, 1/8 02. 3.5 Gm, l2s Ointment, 17. Lederle Laboratories . , 0 136 * 153-8278 Immune Serum Globulin, US?, Human, 10 cc ~; `Hyland E. R. Squibb Lederle BOB license ~ ~ ITJ Wyeth Wyeth NDA 137 5843277 ~ :Promethazine Hydrochloride Tablets, US?, 25 mg, l000s . Phenergan Hydrochloride Tablets Endo ~d Wyeth Lab. ~ 138 963-5355 ~ . . Dexamethasone Sodium Phosphate Injection, US?, Equivalent 10 4mg of Dexamethasone Phosphate per cc, 5 cc l3ecadron Phosphate Merck Sharp & Dohme ~ . Merck Sharp & Dohme ~ Merck Sharp 6 Dohme NDA :Patent ~ ~4 LTJ ~ ~f3 139 003-5112 Minocycline Hydrochloride Capsules, Equivalent to 100 mg of Minocycline, sos ~ Minocin :Lederle Labs. Lederle : Lederle ` Form 6 Patent : ~ i.~ ~ LTJ 140 299-8013 * Insulin, Isophane, Suspension, US?, 0-80, 10 cc ~ Lilly MPH Iletin Squibb Insulin E. R. Squibb . ~ Eli Lilly : ~ NDA ~ ~ Q 141 &90-1554 Flurandrenolide Cream, NP, 0.05%, 15 Grams Cordran Cream Eli Lilly ` ` Eli Lilly ~ ~ , Eli Lilly : : Patent NDA ~: I- ~ ~ I. CB3 PAGENO="0100" Sodium Diatrizoate Injection, USP, 50%, 30 cc, 25s Oxtetracycline Hydrochloride and Pol)rnyxin B Sulfate Ophthalmic Ointment 1/8 oz (3.5 Grams) lOs Nikethamid~e Injection, NF', 25%, 1-1/2 cc, Ss Abbott Form 6 Merck, Sharp, & Dohme NDA Ayerst NDA Day Baldwin Premo Form 6 Pfizer * Strong Cobb Amer Eli Lilly Abbott * Winthrop Pfizer * Premo * Elkins-Sinn Natcon Vitarine Gotham Carlo Erba Brewer Torrigian Pharmich Gold Leaf Eaton T. Si~V 1\2:~~. 142 080-0(53 Ervthromycin Ethyl~tsuccinate for Oral : Erythrocin Suspension, NP, Equivalent to 8 Grams Abbott Labs Abbott of Erythromycin Base 143 181-8:87 Probenecid Tablets, USP, 0.5 Gram, Benemid ~ierck,Sharp,&Dohme I000s Merck, Sharp, and Dohne 144 584-OLl2 Estrogens, Conjugated, Tablets, USP, * Premarin 0.625 mg, l000s Ayerst Labs. Ayerst 145 159-6(25 Bacitracin Ointment, USP, 500 Units per Gram, 1/2 oz (14.2 Grams) 12s 146 443-4~59 147 299-8(08 148 130-1805 Hypaquc Sodium 50% Winthrop Labs. "Terramycin Ophthalmic Ointment with Polvmyxin B Sulfate" Pfizer "Coraminc" Ciba Winthrop Pfizer 0 0 ci 149 130-1(60 Nitrofurazone Ointment, NP, Water Furacin Soluble Dressing Eaten Soluble, 1:500, 1 lb. (453.6 Grams) Eaton Labs. EPA PATENT ~orm 6 PATENT NDA PAGENO="0101" * Theophylline, Ephedrine Hydrochloride and Phenobarbital Tablets, NP, l000s TRADE EAMIL(S) & CO. Tedral Tablets Warner-Chilcott REMARKS - SOUi~CES OF * SUCCESS1UL INDUSTRY INFO. BIDDERS Warner Chilcatt : Eli Lilly * rwarmer-Chilcott *D) r~srAnrIS~n~D NAME 150 ;7s3-4;66 PAGENO="0102" 10016 COMPETITIVE PROBLEMS I~ THE DRUG INDUSTRY Information Required by Senator Nelson from Department of Defense - 14. `QUESTION: Number of drug contracts in Europe for the past year? Number of DOD representatives in Europe that inspect drug facilities. ANSWER: During the past year DPSC did not have any contracts in Europe. Surveys of overseas drug firms are condueted by a DPSC Liaison Officer. 15. Qj~ESTION: In the past several months Mr. Feinberg of the DPSC has publicized certain problems for which the Subcommittee is very anxious to secure additional information. His statement and our questions'are as follows: (a) "The rejection rate of DOD plant inspections is 45 percent and the rejection rate on pre-contract award sample inspections is 42 percent." Would you please explain exactly how these figures were derived? (b) "Based on my experience of drug plants, it is my firm conviction that the primary problem lies in the fact that many producers in the business today are in gross violation of FDA's good manufacturing practices regulations. Those same firms are manufacturing drugs on a daily basis." Will you please supply: (1) the names of the firms; (2) the dates of the "gross violations" of FDA's good manufacturing practices regulations; (3) were these reported to the FDA and other govern- ment purchasing agencies, and if so, when and in what detail; (4) the exact description of the violation (not a general statement like "poor housekeeping," etc). (c) "We have seen totally unacceptable housekeeping, conditions involving dirt, filth, and rodents. We have reviewed production records that showed noncompliance with the companies' own standards. We have found instances where ingredients and finished products are not adequately tested." As in the previous question, please supply the names of the companies involved; dates on which violations were found; were these reported to the FDA and other government agencies, and if so, when and how; and the exact description of the violation. PAGENO="0103" COMPETITIVE PROBLEMS IN TH~ DRUG INDUSTR~Y 10017 Information Required by Senator Nelson from Department of Defense 15. ~~STION: (Cont'd) (d) With respect to problems of digoxin tablets "This was no surprise to the drug specialists in DPSC because we know of many other examples demonstrating that compliance with laboratory standards is not necessarily indicative of clinical effectiveness." I'Jhen did the DPSC drug specialists first learn about the problem with some digoxin tablets on the market? Was the FDA informed of this problem by your organization and if so, when and how? Which of your drug specialists first became acquainted with the problem? Please name the "many other examples" mentioned. Was the FDA informed? When and how? Give name and title of drug specialists who discovered these problems? (e) "We develop definitive product specifications which often exceed official o~ commercial standards." Please name each product for which such specifications have been developed; the significance for each product of these extra require- ments; and the medical purpose served by these extra requirements. ANSWER: (a) The 45 percent rejection rate in plant inspections refers to our FY 1973 responses to the contracting officer regarding award or no award recommendations resulting from pre-award surveys of manufacturers of drugs and devices. There were 216 such responses where an award/no award recommendation was made as a result of a pre-award survey. Of those, 97 or 44.9~ recommended no award. The 42 percent rejection rate on pre-award samples refers to our F? 1973 responses to the contracting officer regarding award or no award recommendations resulting from the evaluation of pre-award samples from manufacturers of drugs and devices. There were 320 where an award/no award recommendation was made as a result of evaluation of a pre-award sample. Of those, 136 or 42.5% recommended no award. 10 PAGENO="0104" 10018 COMPETITXVE PROBLEMS IN THE DRUG INDtTSTRY Information Required by Senator Nelson from Department of Defense 15. ANSWER: (Cont'd) (b) and (c) Upon completion of a plant inspection, an e,dt inter. view is generally conducted with the company representatives at which time the findings are discussed. A summary of those findings is then forwarded to the company as a ~ ~ t~i~ ~Mr ~ymond ~amilt~n DivLsion of Case duid~~ Veterans' Administration, and SE ~ubiic~tealth Service. The attached compilation depicts examples and dates of quality control and housekeeping deficiencies ré é~rt~d in 15 (b) and (c). 11 PAGENO="0105" - 1 0 .tko~oic. Cc. Dnca~tcr 1971 deuce:-, 1972 .!c quuidicd refossioncl 7rsoo in charno cf orod~ctioo and 00 ::c fc~i-td a qoelifiid quality control war-aqor. iJst air. refuse was found on the floor and in the work areas. Paint had flawed fron the coil inn at uacy locations in thu -lane. ::hito tatlots of a product identified CS Lot 30550 `CPP rite AC Stat placod on trays in wioden rack nrior to contino. heavy pink tat nas nhsnrvnd on the ranks and on tho acconparyiso .hutci record pupers isyino on a tray in nhn rauk. This .condttioc indicotes poasitil ity of cross cootawioution. £The dryion ovon was found to contain red 8-istophon nranuiatioji and a yollow Iristoohon granulution in trays ins tho sawo oven. This condition could lcc.i to cross-contanioution of two pro~ucts. 110 lifforent colors ropresont oifforont dosano strongtr-s of the cern pro-act. January 1572 iNc company's staff ion consisted of two full tiomo 5flploy~ CS (President aid dice Prosidant) plus two curt twin enployoes (hioh school students). Neither of tho tao full ties crelovecs had oxporiunco rolatin~ to pmarwocautical nronaratioqs. The Prod: cot's luacceround was in tine priotion ficld and tho Wicn President was a graduate chesiat with exoorience only in ~nsiytical lahoretorios. ~i!ashroon nsa not clean; no receptacle for usod towels, and only a looso, slightly soiled roll of tewels was available :for drying thewiands. January 1972 0ankljnyii Ic, NJ -Oocor:ber 1971 Poly Rosourch Inc. eievic:,o.I. ,Y danunry 1172 C) C z ÷3 tTi 0 In (12 ci C) ci (12 I. 0 0 PAGENO="0106" dnite Cross PharcacaliFebroary 1972 `February 1972 COwPany Derrost, -lIch. The firm has no full time Quality Control Director. A pharmacist who owns a retail drugstore would be cafled in. This pharmacist was not in the plant at the tine of the survey. The firs esed `rea, Manufacturod h~ de-ck S Company, Lot 51432, in their forculation of the Vaqinal Crezxi. Tnis lot of material is 21 years old. The United States Pharr~acopeia. XIV was then in effect. Tests in the meltinq mccc and lack of assay requircmcnts differ from the requirements of the cirront United States Pharmacopele. XVIII. The firm has no program of retostinf mat*ial in stock. `Do Pastor-Formula hr Batch-Production Record was available for the bid item, Sul facetaniiue. Sal faheozacide. Sul fathiozol ic and Urea Vaginal Cream. The firm mad an inadeqante loL control numbering system. Finished material (Hycirecertisonn Creni and Sulfathiazole Cream) hat no lot numbers. A ban of "Suifathiazole', lot ST53333, which is a component in the bi~ item, Vaginal Cream, was found in thu same container with a bag of `SaSicylic Acid". Tnere was a lack of efficient exhaust systre in their tablet corcrossion area. At tire of visit, the firm was compressinc Vitcoin B 12 Lot 01290g. The entire area was heavily laden with the pint powder. Hardly a wall, eiuifment or container - did not have a heavy layer of pink pow!or on it. Halls, floors and overhead pipes in the quarantine location (where hold material is sampled) were dusty arm dirty. The firms policy is to assign only one lot number to incoming :ra~1 materials, no matter how many different lots of the samo ito:-i they received at the sans time. An example was: Bolar's -Ascorbic Acic, lot 3037 was composed of supplier's lots F2325, P2973. ann P2937. DESCOIPTIOP OF Vl('LATIOD Bol ar Pharmaceutical Corp. February 1972 February 1972 I. 0 ci 0 ITJ `.3 0 t~4 (12 PAGENO="0107" General Packacing Gory. Naidwick, lId February 1972 diocraft Labs. Inc. dast Patterson, NJ Linden Lobs. Inc. Los Angeles, CA R.S.A. Corp. Arisley, NY September 1972 SCOIPTION OF ViOL~TiON iiarch 1972 The storage ares is dirty. Layors of dust, powder rest on surfaces of ccetairers and packaqino moterial. These surfaces are not cleamel prior to transfer into the production area. Handlinq is such that the dust, cirt, pow-Icr on the containers and packaqine caterial are discharred into the atmosphere of the dru~j processing area. Contamir.atior of various products wIth fcrui~n matter *;ay occur. A second storage area for material remiirinp air conditioning teeperaturu is also dirty. Cartons and containers and shelvine are covere.~ with layers of dust and dirt. No rooru exists for orderly placeu.eit of meterial. Tablets in cellophane strip packages aced bottles of Sine-aid tablets were scattered over tee floor. One drus of Teed laxatiee tablets, lot 051124, was also identified as Coricidin tablets. Nay 1972 Quarantine material found available for use in the eroduction area. I-lay 1972 A bird and flying insects were noted in the areas for quarantine, ;samp1ir~g and storage. The Howe scale d8l42 used in the weichior area was heavily encrusted with residue frore previous weiqhinqs. There were various colored materials on the equionicnt. September 1972 Improper release of products. Analyticcl records for approved Oiiodohydroxyquin tot 1-1971, (which is the sanc item used in the manufacture of the bid tablets), renorted a `Loss on Drying" lISP Test, of 4.0%. This shculd never have been approved. The tolerance specified in the U.S.P. is "Net sore than 0.511'. In addition, the required lISP `Identification Test" was never oar forced Improper testing of raw material. Jim ohydroxvquin, Lot 1-1271 "Residue en Ic'nition' test was run at 500°C, whereas the 051 spscified 80010. I-lay 1972 May 1972 0 L'li ITi 0 (12 LTJ 0 ci (12 `.4 0 I. PAGENO="0108" Ketchum labs October 1972 ?anityviiie, 1Ff The overhead duct in the area used for samplina of raw materials was heavily laden with dust. In this area, raw material containers are opened for samolinri and thus, dust could enter raw material. Ceiling tiles were loose and separated from the ceiling in the Granolation storage area. No documented procedures were available for housekeepin'j and maintenance metnods for cleaning oronection oquipment. fleactors. vessels, and crystallizers are dirty. Outside surfaces and associated pieirq are rusty and covered with a block oily substance. Tank and piping asbestos in~ulation are in Oisrepeir. These conditions represent a potential source of contamination. Scoops, beepers, shovels, trays, dippers used in the handlina of Procaine Fydrochloride crystals arm not cleaned promptly after use. These ,ceusils are dirty and encrusted with proiuct mcd are )otential sources of contarination. - DESCRIPTIOP OF ViC~ATION October 1972 October 1972 Universal Oil Products October 1972 East Rutherford, lId I. 0 PAGENO="0109" Lypho-Med, Inc. November 1972 Chicago, IL February 1973 March 1973 Reine Pharm. Corp Roosevelt L.I., NY Failure to perform ccrrplete monograph testing of propylparaben, lot RLN68, reed irethylparaben, lot RLMI55 in accordance with the compane~ a written test requirements. Loss on drying for each raw material was not done as receired. Failure to maintain building free of insects. A live cock- roach was noted in the raw material storage area. The general appearance of the Quarantine Area reflects a lack of adequate janitorial service. it was heavily laden with dust and evidence of spilled raw material. It is not orderly and not arranged to facilitate cleaning and handling of containers. The Technical Quality Control Director is not a full time employee and may be absent, due to family commitments at home, as toted during the survey visit. There is no designated assistant to assures duties of tire Quality Control Director in the temporary a'eaenee of toe Technical Quality Control Director. Ihe plant was in poor state of repair. Diservations included a cracked wooden floor in the receiving department and leakage from ceiling in the liquid fill area. Pools of water in the filling room were noted that could be tracked from one room to another. The floor drain appeared clogged with water from the leaking roof with water up to level of the drain cover. Packaging Corporationr October 1972 Vernon, CA Toilets open directly to the manufacturing area. Zenith Laboratories Uorthvate, NJ November 1972 November 1972 February 1973 March 1973 0 t.Tj 0 w (p LTJ `-4 z rn `.4 I. 0 PAGENO="0110" I. -~ :- :nr)C~-~T5( 0 Hygeia Products Inc. - March 1973 April 1973 There are no written quality control procedures. ~:ew York, lIT - The firm assigns a single lot number to multiple batches and this reaults in a Lack of traceability to source material 0 - - and manufacturing data for the specific batches. The platform scale used to weigh iniredients was inaccurate. - The zero reading was plus 5 lbs. The section of the scale holding the weight indicator was shaky. There is no hot renning water or individual towels in the ladles washroom and there is no hot runnin4 waler in the mans - washroom. 0 The platform scale used to weigh intredients is heavily crusted. W Allergan America April 1973 April 1973 A sterile 45 liter glass jug previously cleaned and sterilized :-Iormigueros, P.R. - and availing use as a surge vessei in a sterile filtration - was found with an oily fun and visible oil droplets on the - inside surface of the bottle. the oil; area mas larger than the size of a half dollar. isa of the jtg anould have - contarainsted the product with foreign material an.d compromised the purity of the final product. Zenith Laboratories June 1973 June 1973 the general appearance of the `Quarantine are-a" reflectr a lack S'orthvala, NJ of adenuate general janitorial service. It was heavenly laden with dust end dirt. It is mat orderly and not arrrm;ed to - - facilitate cleanIng ard handling of material. Failure to maintain buildine free of insects. Flies were noted - in the production and other plant areas. - Prior lai-eling was rot effaced. A natal drum still bore the - - label as "Sseorbic acid on the container wrile it was also - labeled Starch, lot 11i39. PAGENO="0111" 5L~) TO fit. DFSCP~PTTDN OF VT1BT~TTO~ Abbott Pharmaceuticals June 1973 Inc. Barcelonela, P.R. : ~ ~ ~ July 1973 ~ ~ ~ ~ * ~ Excessive use of masking tape on capsule filling machines provides a potential for contamination of product. Equipment was not routinely inspected and cleaned before each use. A capsule machine in roots 506 showed evidence of dual and powdery residues when claimed to be clean and ready for use and start tip. Bay Laboratories Inc. August 1973 Skokie, IL ~ : September ~ ~ ~ 1973 The Quality Control Director has never worked in a pharmaceutical manufacturing plant. His only experience has been in retail pharmacy stores. On his own admission he does not have the nece~sary experience related to drug manufacturing operations. , Abbott Laboratories Ltd. Queensborough, Kent, August.l973 England ~ September ~ ~ ~ t ~ . 1973 The operator batch production records for bulk rrimethadione does not reflect the total yield of material obtained in each batch process. The records for blended commercial lots of Trimethadione did not include the nuantity and batch number of all production hatches entering into the final blend Lots. There was no operator record covering the milling/blending step for Trimethadione to show such information as component batches, and input weights, times, cquipment and operator. PAGENO="0112" No written operating or inspection procedures. Insecticide, Sodium Fluoride, is packaged in the center of a large room used to store chemicals used in formulations. Metal scoops in ready-for-use racks had residue material from previous batches. Stainless steel tanks had residue of previously manufactured liquid material. Two of the tanks had odoriferous mold growth in the liquid. Master Formula for the proposed production batch of Lanolated Mineral Oil rot a~ajlable. Control of labels and labeling not established. Written procedures not available for production, quality control, laboratory, calibration, maintenance and senitalion. The low velocity exhaust system in hood area permits residue to fall on the work area in the hood. The hood exhaust system and balances in the hood area contained residue of previous operation. Cobwebs and dust was noted in the synthesis plant on a large number of drums of raw material. A fly was noted in the area where Meclizine Hydrochloride Powder was being transferred, after centrifuging, into plastic bags. The three different shifts in the plant use differing Systems of lot identification for the same product. As a result the integrity of the lot numbering system could not be satisfactorily explained by the company. DESCRIPTION OF VhF hTTON FJA, VA. Kantuckisna Septeaber 1973 October 1973 Pharmaceuticals Inc. Louisville, KY Solar Laboratories December 1973 December 1973 Brooklyn, NY Mallinckrodt Che'oical November 1973 December 1973 Works St. Louis, MO PFizer Pharmaceuticals December 1973 December 1973 2arc~lonela, PK 8 PAGENO="0113" 0 15. ANSWER: (Cont~d) (e) EXPLANATORY NOTES FOR ADDITIONAL REQUIREMENTS ADDITIONAL REQUIREMENT EXPL~NAT1ON AND SIGNIFICANCE Color Limits In the procurement of injectabies and other preparations, the procuring agency experienced instances wherein the products offered varied in color (darker than usually encountered) within the lots, from lot to lot, and from manufacturer to manufacturer. This was objectionabte to the medical personnel administering the injections or dispensing the preparations, because the dis- colored or tinted liquids were suspected of beang degraded, and therefore not suitable for issue and use. Without standards for color limits, a "colorless" requirement could not be enforced contractually. It became necessary to develop color limit standards in order to uniformly procure material of adequate purity so that the con- tents are suitable not only at the time of procurement but after exposure through the military supply channels. Color developnent can be progressive in nature, and thus it is the desire to start with a product which has less color at the outset and therefore, represents a purer material with less possibility of degradation at time of use, PAGENO="0114" ADDITIONAL REQUIREMENT EXPLANATION AND SIGNIFICANCE Classification of Defects Classification of Defects is a list of deficiencies which can be tolerated to a limited extent. These physical defects are de- tected upon examination of the product. For contractual purposes it is necessary to delineate the physical characteristics, desig- nate a sampling plan, and determine the amount of defective characteristics that are permitted within the sampled quantity. It should be noted that such test characteristics as strength and parity are not designated within the Classification of Defects because compliance with those requirements is fully mandatory. Without a Classification of Defects and an Acceptable Quality Level, a procurement agency could not contractually limit such defects as excessively chipped tablets, excessive powder in a tablet container, broken tablets, cracked capsules, etc. The Classification of Defects, therefore, defines the general quality of the item in terms of physical characteristics, which subse- quently may have a bearing on the dosage administration to the patient. Solubility Time Limit With the advent of Parenterals for Injection in which powdered or freeze-dried material is solubilized prior to use, it became necessary to assure that the contents would readily and completely ~ solubilize upon addition of diluants prior to use. This require- ment establishes the rate of solubility and presents a basis for examining for the presence of particulate matter. Compliance with- such requirements renders the product more rapidly available for use and precludes the injection of particulated or undissolved material for which there are no official standards. `.4 PAGENO="0115" ADDITIONAL REQUIREMENT EXPLANATION AND SIGNIFICANCE Hardness Limits Tablet hardness is a function of the pharmaceutical manufacturing process and is an appropriate tool to measure uniformity and con- sistency in products. It may have a bearing on breakage or crumbling of the tablets in shipment as well as uniformity from lot to lot and within a lot. Therefore tablet hardness represents another important control factor in assuring uniform and constant dosage for the patient. Accelerated Aging Test In the large volume procurement of medical materiel, which may undergo lengthy and adverse transportation and storage, it is desirable to determine in advance whether a product that may be offered will remain stable for the required period of time. In addition, drug products generally have a deterioration rate which may vary with the product, the formulation, and the method of manufacture. In those instances where proof of stability is necessary because of a predetermined long shelf life or because deterioration has been experienced, it is necessary to establish standards prior to contracting. This serves to preclude the potential for administering/dispensing deteriorated medicaments. Compliance with this requirement contributes to longer shelf life and reduces the possibility of having deteriorated stock on hand that, must be destroyed. Maximum Unrefrigerated Drug products which require refrigeration are sensitive to unre- Shipping Times for Items frigerated conditions such as room temperature or elevated temp- Requiring Refrigerated erature. There are no established requirements which would limit Storage the unrefrigerated shipping time from manufacturer to depots and 0 PAGENO="0116" I. 0 ADDITIONAL REQUIREMENT EXPLANATION AND SIGNIFICANCE to the ultimate user. In order to prevent or retard deterioration or decomposition, it is necessary to designate how long a refrig- erated product may be out of refrigeration. This reduces the potential for administration of substandard medication. 0 Leakage Tests for Ampuls There was a time when the procuring agency experienced leakage of flame-sealed ampuls. In order to preclude the procurement of material with such defeCts, it is required that all flame-sealed ampuls be subjected to a leakage test. Ampuls which are not totally sealed are subject to contamination which would be detrimental to a patient. Taste/Palatability Panel - The procuring agency experienced instances wherein a product could not be tolerated by patients because of objectionable taste. DPSC experienced a drug recall because of such circumstances. Accordingly, when appropriate for the particular item, samples are requested from bidders and are evaluated by a panel for acceptance of taste and palatability. This helps to preclude the problem of patients refusing to take medicine because of particularly objec- tionable taste. ci C12 `.3 PAGENO="0117" Thioridazine Hydrochloride Tablets DisIntegration CaP, 10 tag, 1000's fhioridazene Hydrochloride Tablets, DSP, 50 tag, 1000's Thioridazene Hydrochloride Tablets, US?, 100 rng, 1000's Thioridazene Hydrochloride Tablets, US?, 25 tag, l000s Potassium ?»=rnianga.;ate Tablets Soiubdlity Tine Lint (T~tiots) for Solution, USP, 0.30 Graoi,iOOs Allow less time to assure tOe tablets will disintegrate faster 0 thus release the active ingredient sooner. To assure that impurities are detected that may arise from production procedures or from changes in sources of materials or in the processleg of the item. The presence of these impurities is ioconsLstent WIth good manufacttring praccices. A more specific assa in as much as it is being compared to a reference standard. See Excianatory U~taa. - See Exeia':atey ~~tos See Explanstery This oJIi lionel assay noo:sserv since the fl ccc. ott-ic procedure is ore specific fe- the isonrctnrcnoi :olcc:i in thel trc hydroovi coo c- nert vot~va in tern of with i;tacl isoirolerceol To esetre chet the cebicts will :issnlve withic a rotsorebie tint so that the soittion can be ese~ Cv the patient for oxtericri use. See Exolatcceory lotus. Scoci?i a tietter tine iit:it of ii) seconds in lint of 2 minuies. Co:piaints on render U.S.?. tablets wets receisi includinq one frost tne phvsiciee to thr ConCross of the Unitec Staten. Sea Exelarstory lotss. Sc-a Explanatory Cotos. I soeroterenol lydrochlori do ehalation, US7, 1:200 Soletion~ 10 cc Limits for foreign substances (arsenic and heavy metals) Additional Assay Classification of defects Color licits Accalerat:d AlicE Test (Stability Tett) Additional assay itro~lycunir Tablets, 13?, 0.6 s~, lOOs Citro~1ycurin Tablets, US?, 0.3 mg, iQOs * Classification of Defccls Solubility Tires Limit (Tablecs) * f\cceloralnd Apin5e costs Classification of elects PAGENO="0118" Dsnztrorine Desylite Tablets, DSP, Uardnsss limits (for tablets) 2mg, lOOs Classification of Defects l~ycirocalorotiiizide Tablets, US?, Classification of DaUcts 50 mg., fropylbexedririe Inhalant, U?, Assay limits 0.25 Grais ~oparidine Hydrochloride Injection, Color limits US?, 50 iag per cc, 30cc Classification of Defects Aminophylline Anesthetic Suppositor- haltIng tixe for Suponsitoriea las 0.5 Cram, Us Leakage Test (for packaging) Djceryl (tuilacolate Syrup, tU, Irate! `aiatahilitv Dost T3u mg per 5cc, 4 fl. oz. and i gel. Accelerated Aging Test Color value, Specific Gravity~ P\efractive Index. See ixpianetory Dotes. * defining tDe vehicle for this syrup in * the N.?. roncOraph. These requirements - teri-i to ieire tie vehicis and yet pernit corpetitive ioriul:tions. See Explanatory ~otes. See Ceriarory :ocs. The lower iC5ty lilt is tithtar than that fr the N.?. since cIa type of item ic tale er loilacio, ~t to readily release its :tive ingredient by volitili- of delivery. See Exciariatory Dotes To assure that the sunpositories are made with a base which Will melt within a specified time frame to release its medicament. No such renuirement exists in the coapenoia. To assure that this product will riot leak In its packaging. I. LT-j 0 ITJ (11 PAGENO="0119" idoxuridCne Ophthalmic Ointment, DSP, ~arcicle size ci active i:~gredier.t in oint- Ti is reruireiseist ic cci covireJ by 3.3C, 4 Crams ifiCOt (not over SC microns) DSP monograph. Chis re~uirzne'~ vas added to control the particle ssze of the active ingredient in the ointment * which is instilled into the eyes. Leakage test To assure that the tubes of ophthaln c * ointment do not leak. Alcohol, DSP, 5 gal (18.9: ~lers) Zinc Sacitracin, ieomycin Sulfate, and Polvaiyxin 3 Sulfate Ophthalmic Ointment, 1/8 07. iTS: For ophthalmic ointments this Center ried for sterile ointments in early 1550's and afain 1971. Iii tse interim the Cec:ce: dCd have Laterial 1ir~itc nith no :~~i0monas organisms to hi oresnet. In 973 ehe DSP, NP and Foe took action for sterility for ophthalmic ointsents. Color Limits Classification of Defects. Particle sire of active ingredients in Leakage Test Melting Range * See Explanatory gores. See Explanatory Notes. This resuirement was added to control the particle size of the active ingre- dients in the ointment which is instiller * into the eyes. To assure that the tubes of ophthalmic ointment do not leak. To assure that the ophthalmic ointment with a base which will salt upon appLication to tise eyes. See Explanatory Notes. Classification of Defects PAGENO="0120" Liocai~c Hyrochloride IfljOCtiOfl, Color units See OxpiOratorv mites. *~SP, 1-1/20, oitrr Epinaphrine 1:200,030. 30 cc, 5s Classification of Oefacts Sme Exolarotory ~ot~s. Corticotropjn Injection, USP, 40 Color limits See Exmlenatorf `otus. OSP Units ;Solubility time limit See Expinnetory Ortos. Content Uniforr.rity The J.S.P. reoaonr:p)~) foes cot specifically require connoliance with Cuntait uniformi for this iten. Our roecirercat assures anifora quanti~~' nithin limits Ems promer and umifcri dosaqe. See xplnrnatcry ktes. Sen Exclamatory hates. See Selector-p dotes. he I.E. 1c:cmrcp~ thus not seacifically romuirm comeliance Win1 content cmi loraity cr tnis i corn. Our rc~uircmnent assurs nrrifornr qoantity nitinin liei:s and ties pacer cr1 UniSon osnoe. See ExalaceOry dotes See Exolanatorv Notes. Sen Exolan:ntery dotes. See Exclamatory etes. ,Ciassificaci~çn of dePects For Injection, IJF,23s Color limits SalabilIty time limit Contort uniformity Classification of Defects ~ethylurgonovine daloato Injection, Color limits 05?, 0.2 crc, Icc, 12s Leskamo test fan- souls £lass,ficatien OT Jefects I. 0 ITi c12 0 PAGENO="0121" L~c~s~yrocorice Injection pL 1i~its Li. o:ai"~ Hyirochiorife injoction Classification of Ocfcccs 2?, 22, 20 cc iriC2locsa~inO lydrochlc'iie Classification cf Dcfects 33 cs, l000s [r;ovcc cl3a~c Tabl:ts~ 0S7 Classificsticc of P}rcar~itil Injcctior, 6Sf Color Licits 0.62 pr cc, 2 cc, Is Clsssificatior of Onfects Lenkogc Tosc for L~puis 1 tichtor r~rrn is soccifiss is cr~r to sssC~2 scoator sfsh~litv ocor thoshol ife of cho iCon Son Exolaroctory ofss. See Exnianstory 60 Son Explanatory LoCos. Sen fn:clanetoe3' 2 050 cx)iaflatOry 22.co. See ixplanctory fetes. PAGENO="0122" 10036 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Information Required by Senator Nelson from Department of Defense 15. ANSWER: (Cont'd) (d) RE: Digoxin Tablets Learned of problem - 1965. Information to FDA - No record. This was before the Intra- Governmental Professional Advisory Council ,on Drugs and `Deyices (IPADD) was fully operational. Drug Specialist - Cannot determine who became acquainted with problem first. The subjectarose as a result of field ~omplaints. RE: Other examples The other examples refer to information obtained through published literature, and complaint reports received by DPSC. Such publications as The Bio-availability of Drug Products by the American Pharmaceutical Association and the Pharmacokinetics discuss equivalence and inequivalence of drug products, Such drug products as Diphenylhydantoin Sodium Capsules, Nitrofurantoin Tablets, Prednisone Tablets, Nitroglycerin Tablets, Cortisone Tablets, and Thyroid Tablets were the subject of field com- plaints dealing with effectiveness. All field complaints are routinely forwarded to FDA as agreed upon via IPADD. The dates of complaint submittals are shown as follows: ~EM INEFFECTIVE PDA ADVISED Diphenylhydantoin Sodium Capsules 4 December 1963 12 December 1963 15 April 1964 27 January 1966 2 May 1966 Nitrofurantoin Tablets 22 May 1961 16 June 1961 5 March 1962 11 April 1962 25 November 1969 (2 reports) 23 December 1969 2 January 1970 17 February 1970 15 May 1970 12 July 1971 12 PAGENO="0123" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10037 Information Required by Senator Nelson from Department of Defense JI~ 15. ANSWER: (Cont'd) ITEM INEFFECTIVE FDA ADVISEI) Predisone Tablets 16 March 1970 12 December 1970 12 July 1971 Nitroglycerin Tablets 12 July 1971 Cortisone Acetate Tablets 12 July 1971 16 November 1973 Thyroid Tablets 16 February 1961 14 March 1961 6 July 1961 8 September 1961 16 October 1961 The drug specialists who first became acquainted with the problems are those who saw the field complaints first. Our records do not identify the personnel in that manner. 13 PAGENO="0124" 10038 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Information Required by Senator Nelson from Department of Defense; 16. Qj~ESTION: (a). Please state deviations from FDA's good manufacturing practices regulations which the DOD considers significant, and which are not considered significant by the FDA? Please identify where there is a difference of opinion. (b) Who in D~SC makes the determination whether the raw observations are significant? (c) What criteria does DPSC use? (d) Does DPSC relate the violation to a particular product? In other words, does the violation, for example, contribute to the contamination of the product? ANSWER: (a) The FDA Papers of April 1967 in an article "Good Manufacturing Practice" states the Food and Drug Administration is convinced that most, if not all, of the problems of drug quality can be solved by compliance with the minimum requirements of the Current Good Manufacturing Practice regulations. The article also states, "Analysis of the fiscal year 1966 recalls shows that 351, or 78 percent, were for reasons which would be related to a failure to observe GMP regulations." The FDA Handbook of Total Drug Quality of July 1971 states in an article: Case Studies of Drug Recalls, "We found that 75.8O percent of the errors contributing to drug recalls were due to deficiencies and failures to meet the require ments of the Current Good Manufacturing Practice regulations." The FDA Compilation of Cabe Studies of Drug Recalls of March 1973, lists case after case with the app~.icable GMP sections which relates to the apparent cause(s) of the recall. All the GMP's are considered significant in order tp manufacture quality drug products. The problem is that the FDA GMP's provide only general guidelines. This is recognized by FDA as in the federal Register o~ January 15, 1971, it was stated, "In the Federal Register of August 22, 1969 (34 F. F. 13553) a notice was published proposing a.revision of Section 133.1 - 133.14 to cl~rtfy, strengthen, and make more specific the good manu~actur~qg practice regulations for drugs." The DPSC Standards for the Mapufacture and Packaging of Drugs, ~harmaceutica1s and Biologicals were published in 1968. It was necessary to set these practices down in more detail and with a higher degree of specificity. This is absolutely necessary to accomplish the mission of DPSC -- to deal with our suppliers and potential suppliers in a contractual, not a regulatory capacity. A prime obligation of this relationship is that DPSC must deal with all on an equal basis and before this equality can be established it is essential th~t all suppliers and p~)tential 14 PAGENO="0125" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10039 information Required by Senator Nelson from Department of D?fense 16. 4NSWER: (Cont'd) suppliers fully understand the requirements that must be met. The DPSC Drug Standards with their definitiveness are very essential for the continued support of quality procurement. It has been announced that the followIng proposed revisions In GMP's will be made in 1974: a. Add a section on Sanitation. b. Personnel responsible for Quality Control shall not also be responsible for production. c. Requirement that all production and control procedures be reduced to writing. d. Provision for the establishment of definitive records of all tests and assays. e. A written record shall reflect which pieces of equipnent within each operation are or were in operation at any point in time. f. Establish a requirement for the formal training of employees. g. Each container sampled shall be suitably identified. h. Require reserve samples of inactive ingredients shall be ~retained. i. Qualifications of consultants. (b) A brief explanation of the scope and effectiveness of the pre- award survey is as follows: The Armed Services Procurement Regulation (ASPR) requires that the contracting officer shall make a determination of responsibility or non-responsibility of the prospective contractor. If the information available to the purchasing office is not sufficient to enable the contracting officer to make a determination regarding a prospective contractor, a pre-award survey is conducted by the Contract Administration Office. 15 PAGENO="0126" 10040 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Information Required by Senator Nelson from Department of Defense 16. ANSWER: (Cont'd) A Pre-Award Survey required in-depth knowledge of various technical areas in order t& derive the necessary professional judgments regarding the bidder's capability to perform in accordance with the terms and conditions of proposed contract. The Pre-Award Survey involves expertise in such areas as finance, development and production operations, production engineering, specialized engineering, quality control, accounting, industrial management, industrial property management and disposal, com- modity specialist and purchasing activity representatives. In addition, assistance frequently may be required from legal, small business and industrial labor relations specialist. Consideration is given to utilization of available DCAS experts and likewise to those technicians and specialists available from purchasing activities. Each team member contributes his specialized knowledge and professional judgment under and with the overall guidance of the team coordinator and Pre-Award Survey Monitor. The monitor, in turn, is responsible for submitting the integrated results of the survey to the chairman of the Pre-Award Survey Board for approval and transmittal to the purchasing office. The survey report and recommendations are then forwarded to DPSC where the report is reviewed and evaluated by pers9nnel in the Quality Assurance Branch. A summary of technical findings, which required approval by the thief of the Branch, is prepared together with a recommendation to the contracting officer. (c) DPSC utilizes the DPSC Drug Standards; Federal Standards on Tablets, Capsules and Parenteral Preparations; Military Inspection System Specification, and any other specific specifications contained in the procurement solicitations. (d) Inspection is done in the plant for the procurement item to determine complianc~ of plant and product to requirements. Violations may contribute to the contamination of the product. 16 PAGENO="0127" COMPETITIVE PROBLEMS IN THE DRUG flThUSThY 10041 ~QNTENTS Answers to Senator Nelson's questions pertaining to DCAS TAB A Additional information related to Senator Nelson's questions TAB B pertaining to DCAS Answers to Senator Nelson's questions pertaining to DPSC TAB C ENCLOSURE 1 PAGENO="0128" 10042 COMPETITIVE PROBIjEMS IN THE DRUG IND~STR~ TAB A QiJESTIQ~AIRE INFORNA?~IO~ RE9UIR~D BY SENATOR NELSQ~ FR~ P~PAR~NT OF DE~~NSE (B~4S INPUT) 2. q~~ESTION: What percent of pre-award surveys are done by DPSC? By DSA? AN$W~: (Revision to answer contained in first increment) All pre-award surveys are done by Defense Contract Administration Services. Defecpe Personnel Support Center may elect to participate. In yiscal Year 1973 DefenSe Contract A4miniatr~140fl Services c~n4ucted 397 pre-award surveys o~ medical material. Of these 235 were o~ drugs. Defense Personpel Support Center participated in a total of 156 pre.- award surveys. Of these participations, 101 weye on drug pre-award surveys. During Fiscal Year 1973, oe~ense Con~ract Adminis~et~.On S~rviceC devote4 ~ ~an-yea~s to medica~. pre-awar~ surveys. Of this figure, 3.4 i~an-y~rs were devoted to 4rug pre-award ~ 4. O1)~TIO~: IIpw many man-years were devQted in FY5 ~.969, 1971 and 1973 tp the inspection of dyugs ~y DP~C'~ ~.y DSA? ~jSW~ By DSA. (p~AS) Fiscal Year 19~9 -- A~p~px~ately 3p " Fiscal year 1971 -- Approx~a4tel~T ~O v Fiscal Year 1973 -- Appro r~atel~~ 30 / 5. ~JE$TIQ~j: What percentage of man-years of inspection time was devoted in the same years to: pre-award surveys? In-process inspection? Accep~ance of product inspection? pther? Fiscal Year Fiscal Year Fiscal year 12Th pre-Awar4 Surveys Approx. 11% Approx. 14% Approx. 20% In-Process Inspection Approx. 19% Approx. 18% Approx. 18% ~cceptance of Product Inspection Approx. 39% Approx. 42% Approx. 40% Other Approx. 31% Approx. 26% Approx. 227. PAGENO="0129" COMPETITIVE PROBLEMS IN THE~ DRTJG INDUSTRY 10043 7. QUESTI~: For Fiscal Year 1973 please give the number of people in: DSA -- Overhead assigned to DPSC Medical Material DCAS -~ Medical material support for drugs and other medical material DPSC -~ Medical Directorate Supply Operations Technical Operations Laboratory Overhead Procurement Directorate Medical Division Drugs Other ANSWER: DCAS -- Medical material support for drugs and other medical material: Drugs -- 303 Other -~ 267 It should be emphasized that the above figures represent full, part- time and/or backup personnel. Those on part-time or backup assignments have other non-drug or non-medical duties such as medical devices, chemicals and petroleum. consequently, man-years give more objective measurement of manpower, as was done in the answer to question 4 cover- ing drug procurements for Fiscal Years 1969, 1971, and 1973. A similar measurement in man-years would be helpful in assessing the other non- drug medical procurement manpower data. For Fisca1~ Year 1973, the Defense contract Administration Services manpower effort (full, part- time and backup) in support of drug procurement is b oken down by organizational units approximately as follows: Qualty Assura~ce -- 71 percent, Produ~tion -- 12 percent, Contract Administ ation -- 15 percent and2 percent for other support. 9. QUESTION: Please give total DoD annual budget involved in inspection of drugs for Fiscal Years 1969, 1971 and 1973. ANSWER: Defense Contract Administration Costs -- Drugs Fiscal Contract Year Quality Production Adrnini~tration Other Total 1969 $443,~304 $121,756 $80,698 $9993 $655,751 1971 $404,593 $103,076 $96,373 $4393 $608,435 1973 $547,090 $ 87,859 $89,853 $5750 $730,552 32-814 (Pt. 24) 0 - 74 - 9 PAGENO="0130" 10044 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY TABB NON-PROCURENENT QUALITY ASSURANCE TASKS PERFOR1~1ED BY DRUG QUALITY ASSURANCE REPRESENTATIVES (DCAS) Quality assurance representatives support other contract administra- tion elements and the Defense Personnel Support Center in the following areas upon request or as the occasion demands: a. Damage, Abuse, Destruction of Government Furnished Material. Unauthorized damage, abuse, or destruction of Government-owned material is reported to the property administrator. b. Strikes and Walkouts. Occurrences are reported to Industrial Labor Relations. c. Buy American Act. Unauthorized purchases of raw materials from foreign sources are reported to Defense Personnel Support Center. d. Physical Security. Unsecure storage and handling of narcotics and dangerous drugs are reported to the contractor and the Drug Enforcement Administration of *the Department of Justice. e. cidents. The Office of Specialized Safety and Flight Operations is advised of accidents resulting in injury to Government employees or jeopardy to delivery schedules. f. Termination Settlements. Costs are validated in support of the termination contracting officer. g. Carrier Damage Complaints. Complaints are investigated in support of the Office of Transportation. h. Production Suppprt. Problems that may influence delivery schedules are reported to the industrial specialist. PAGENO="0131" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10045 PREAWARD SURVEYS (DCAS) In the process of awarding a contract for goods or services, it is the policy of the United States Government to evaluate business organizations submitting bids as to their competence, capability and responsibility to perform on the contract. The purpose of this policy is to assure timely delivery of quality products at fair and reasonable prices. The evaluation is called a "preaward survey.' Another preaward action, separate and distinct from the one described above, is performed by Department of Defense Contracts Compliance Offices. This is known as a preaward review and is performed to determine if the contractor is in compliance with Executive Orders and Department of Labor regulations regarding equal employment opportunity. Preaward reviews performed by Contracts Compliance Offices are separate and distinct from preaward surveys. The two should not be confused. - For the Department of Defense and other selected Government agencies, the majority of preaward surveys are made by nationwide offices of the Defense Contract Administration Services (DCAS) according to guidelines outlined in the Armed Services Procurement Regulations. As the situation may require, other DOD or non-DoD specialists may participate in the surveys also. A survey is conducted at the request of a buying agency. It is a team effort by military and civilian personnel who are specialists in fields such as accounting, production, contract management, business administration, property management, quality assurance, engineering, transportation, packaging, industrial labor relations, industrial security, legal counsel, and industrial readiness. They investigate the prospective contractor's technical capability, production capability, purchasing and subcontracting methods, accounting methods, quality control system, transportation and packaging facilities, plant safety, labor resources, performance record, and other factors which may be specifically requested by the buying agency. The findings are reported to the purchasing agency who makes a determination of the contractor's responsibility, as well as the decision to award the contract. The enclosed pamphlet describes preaward surveys in detail. 1 End Preaward Survey Information for Prospective Government Contractors, January 1973 PAGENO="0132" 10046 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRT TAB C QUESTIONNAIRE INFORMATION REQUIRED BY SENATOR NELSON FROM DEPARTMENT OF DEFENSE (~SC INPUT) 4, ~STION: How many man-years were devoted in F~ 1969 and 1971 to the inspec- tion of drugs by DPSC? By DSA? ANSWER: Approximately 5.5 man-years of the technical personnel assigned to the Quality Assurance Branch DPSC were devoted to the inspection of drugs in FYs 69 and 71. 5. QUESTION: What percentage of man-years of inspection time was devoted in the same years to: Pre-award surveys? In-process inspection? Acceptance of product inspection? Other? In-store (Depot) surveillance? ANSWER: FY69 FY71 Domestic Pre-Award Surveys Preparation/on site DPSC Participation 197. 19% and Report Preparation Requesting, Evaluation, and Report 32% 32% Preparation where D?SC did not participate Foreign Surveys 19% 19% In-Process Inspection - - Other Pre-Award Samples 10% 8% Misc (Supervision, Review of Protocol, 15% 17% Special Inspection Requests, Contract Review, etc.) In-Store (Depot) Surveillance * (Quality Systems Management Visit only) 5% 100% 100% PAGENO="0133" 6. QUESTION: For FYs 19.69, 1971 and 1973 how many man-years of laboratory work went into support of the inspection process? Please break down the total laboratory man-years into: DPSC laboratory Contract laboratories Other (specify) ANSWER: Laboratory work in support of the inspection process for drugs and non-drugs ** (covering pre-award samples, contractual samples, pre-acceptance samples and samples submitted by the QAR for verification) is as follows: FY69 FY71 FY73 DPSC Laboratory 12 man-years (4.4 man- . 7 man-years (1.8 man- 9 man-years ~ years devoted to drugs) years devoted to drugs) years devote orugs.~c Sam~p1es* Cost Sa~p~* Cost Samp~* Cost Contract Laboratories 14 $845.00 9 $380.00 8 $845.00 Other Laboratories 413 $7,720.18 464 $8,032.59 213 $4,819.55 Walter Reed 373 $6,585.74 390 $6,327.86 144 $3,101.00 * U.S. Army Medical 40 $1,134.44 74 $1,704.73 69 $1,718.55 Research Lab, Ft. Knox * Man-year data not available. **Added for clarification. PAGENO="0134" 10048 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 9. QUESTION: Please give total DoD annual budget involved in inspection of drugs for Fiscal 1969, 1971, 1973. ANSWER: Estimated DPSC Budget for Inspection of Drugs Fl 69 $165,000 - See 9a for details. FY 71 $157,000 - See 9b for details. Fl 73 $187,000 - See 9c for details. 3 PAGENO="0135" CO1~~tPETITWE PROBLEMS IN THE DRUG INDUSTRY 10049 S.c. lY ~) Lab -1 echni cal and Cl cr1 ccl J/ Persons X Annual Salary @ GS-9 + Related (8+1/2%) 4.4 X $9320.00 X 1.085 $44,827.86 Oualit~y Ass urance Branch Te chni cal 1/ Persons X Annual Salary 8 GS-l2 +. Related (8+1/2%) 5.5 X $13,389.00 X 1.085 79,808.86 ATQ - ualit~Assurance Branch Clerical # Persons X Annual Salary 8 GS-3 + Related (8+1/2%) 1 X $4360.00 ~ X 1.085 4,730.60 DPSC Oyerhead,_ # Persons X Annual Salary 8 GS-7 + Related (8+1/2%) .2 X $7639.00 X 1.085 16,576.63 TOY Foreign & Domestic $3650;00 $6900.00 10,550.03 ~dEL~flJ~flfl9 Walter Reed & Ft. Knox & Commercial $6585.74 & $1134.44 & $845.00 8,665.18 $ 165.14913 PAGENO="0136" 10050 COMPETITIVE PROBLEMS IN TUE DRUG INDUSTRY 9.1). V 71 L0i 1~niiical ano Clc cal # Per ens X Annual Salaly ~ OS 10 Rc~atc~ (811/2/) 1 8 X $10 252 X 1 085 $~0 072 16 ~ ~/ Persons Y Annual Salary 0 CS 2 Rclated (8+1/2/) 5 5 X $15 040 Xl 085 /~JQ Qua]~yP s Sw in cc Branca Cl en cal # Persons X Annual Salary @ GS-3 ÷ Related (8+1/2%) X $5524 X 1.085 DPSC Overhead # Persons X Annual Salary @ GS-7 + Related (8+1/2%) 2 X $8582 X 1.085 TOY Foreign & Domestic $7490 & $7300 Outside Lab TesU~ Walter Reed & Ft. Knox & Commercial $6327.86 & 1704.73 & 380.00 89,005.45 5.993/34 18,622.94 l4,3~O.OO 8,412.99 $157,246.98 PAGENO="0137" COMPETITIVE PROBLEMS IN - THE DRUG INDUSTRY 10051 9.c. FY 73 Lab Techni cal and Cl cci cal # Persons X Annual Salary 8 OS-b + Related (o+l/2%) 2.3 $12,775 X 1.085 $31,880.01 ~ # Persons X Annual Salary 8 GS-l2 + Related (8+1/2%) 6 X $16,682 X 1.085 108,599.82 ~ cal # Persons X Annual Salary 8 GS-3 + Related ( 8+1/2%) 1 X $6120 x 1.085 6,648.88 DPSC Overhead ~ Persons X Annual Salary 8 GS-7 + Related (8+1/2%) .2 X $9520 X 1.085 20,658.40 TOY Foreign & Domestic $6150 ~ $7030 13,180.00 Out IL bTeutin Walter Reed & Ft. Knox & Commercial $3101.00 & 1718.55 & 845.00 5,601F! $i86,C31.~C PAGENO="0138" 10052 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 13. ~~TI0N: For the 150 top drugs -- by dollar volume -- bought by DOD: Which pharmaceutical companies supplied the information which was incorporated into each specification? For each of these drugs, give the names of pharmaceutical companies who have been successful bidders on DPSC contracts for each product since original specification was first written. Please give stock numbers, and established and trade names of each product. ANSWER: The list of 150 top drug items forwarded with original submittal was based upon demands from customers. This was the only listing that was available within the prescribed time frame. We have now developed a list of top dollars purchased (drugs) and find that 27 products should be added to the list, and correspondingly 27 items should be deleted from the list. Attachment (a) is the list of 27 items that should be added. It should be noted that the numerical sequence is stated for each item. The numerical Sequence of the original list (attachment (b)) is modified accordingly and forwarded herewith. PAGENO="0139" * ~5) ESTABLISHED NAME 54 : 721-9232 Diiodohydroxyquifl Tablets, USP, 0.65 Grain, 60's 57 104-8069 Methylprednisolonn Sodium Succinate for Injection, N~, Equivalent to 1 Gram of Meth~lprednisolone 62 105-9500* Aminophylline Injection, USP, 25 tag per Ce, .10 cc,25's .65 985-7224 Test Kit, Syphilis Detection, rewer Type, 100 Tests 69 299-8610 ChlorpheniratnineMaleate Tablets, USP, 4 tag, l000'i Potassium Penicillin G, Sterile, USP, 20,000,000 Units Sodium Sulfacetamide Ophthalmic Ointment, Modified 37., 1/8 oz., 12's Diodbquin ~ 0. Searle & Co. Solu-Medrol 1000 tag Upjohn Company Aminophylline IV 250 tag, 10 ml G. 0. Searle & Co. Brewer Diagnostic Kit- RPR Card Test Hynson, Wescott and Dunning, Inc. Chlor-Trimetont Tablets. Schering Corp Penicillin 0 Potassium Ampoules, Sterita, USP No. 537, 20,000,300 Units 100 ml. size Eli Lilly & Co. SUCCSSSFUL BII)DERS REMASKS C. 11. Searle & Co. Strong, Cobb, Amer Panray Upjohn Company Patent NDA Gothain Vitarine Elkins-Sinn Natcon Hynson, Westcott and Dunning. Anabolic 1n6. NDA Dow Nutrilite Nysco Beecham-Msssengill Panray Schering Corp. Pfizer Form 6 tEli Lilly Presto Scheming Corp. NDA Strong Cobb Amer / TRADE NAME(S~ & CO. SOURCES OF INDUSTRY INFO. G. 0. Searle & Co. Upjohn Company Hynson, Westcott and Dunning Inc. Schering Corp. Eli Lilly & Co. Scheming Corp. Strong Cobb Amer 84 890-2172 299-8175 ci PAGENO="0140" i~3LISllED NAME 101: 680-7352 Promethazine Hydrochloride Injection, US?, 25 mg per cc, 25's 107 530-6470 Prednisone Tablets, USP, ~ mg, I000s 108 900-0354 Sodium Oxacillin for Injection, US?, Equivalent to 1.0 Gram of Oxacillin 112 890-1373 Simethicone Tablets, 40 mg, 500's 118 914-5297 Hemorrhoidal Suppositories with' Hydrocortisone Acetate, 12's 120 226-1203 Test Strips and Color Chart Urinary Glucose and Protein, 100's 122 181~7895 Phenylbutazone Tablets, US?, 100 mg, 1000's 124 064-3940 Triamcinolone Acetonide Cream, US?, Topical, 0.17,, 5 lb. (2,27 kg) . I. TRADE NAME ( N) & CO. ~____j_ Phenergan Injection Wyeth Labs. SOURCES OF INDUSTRY INFO. . ~. Wyeth Labs. . SUCCESSFUL BIDDERS Wyeth Labs. ~.* . ~** . - REMARKS -:~ NDA 0 0 ~ Meticorten . . Schering Schering Schéring NDA 0 Deltra Merck, Sharp & Dohme Deltasone Merâk,. Sharp 6. Dobme Upjohn Co. . Premo Upjohn Co. Lensnon . L~J .. Upjohn Co. . . .1 * * * Halsey Strong Cobb Axue. Success . Chase. ~. * Prostaphlin . Bristol Labs. . Bristol Labs,' Briétol Labs. . . . Form 6 d Mylicon Tablets . Stuart Stuart Patent Stuart . .1 Anusol-HC Warner Chilcott Labs. Warner Chilcott Labs. . - Reed & Carnrick ., Warner Chilcott Labs. . L~J ~ ~J3 Uristix AmesCo. "Butazolidin" , -~ Geigy . Azolid U. S. Vitamin Pharm, Corpl Co. . Geigy U. S. Vitamin . Pharm. Corp. * Ames Co. . U. S. Vitamit~ Pharm. Corp. Geigy . . . .~ . MDL .. . - .. ~j ~ Aristocort Lederle Labs. - Kenalog E. R. Squibb & Sons ~"Lederle. Labs. ~Lederle Labs. E. R. Squibb 6. Sonsi E. R. Squibb & Sons I - . . . . :~ NDA . . I PAGENO="0141" 125 105-8900 129 080-0617 131 159-5011 133 854-2242. 134 :784~4977 135 55918456 136 890-1657 i~3~~- ~153-8480 ESTABLISHED NAME *. ~RADE NAME(S) & CO.. Aluminum Hydroxide Gel, USP, 1. pt. (473 cc) Test Kit, Pregnancy Detern4nati~rI, 25 Tests . Test Kit, Syphilis Detection, Brewer Type, 500 Tests GUanethidine Sulfate Tablets, USP, 10 mg, 100's Sodium lothalamate Injectioti, .USP, 66.81]. Sodium Chloride Injection, USP, 5 cc, 25's Kaolin and Pectin Mixture, Dehydrated, 47Grams . Hydrogen Peroxide Solution, USP, 1 lb., (453.6 Grams) SOURCES OP SUCCESSFUL INDUSTRY iNFO. BIDDERS REMARKS Wyeth Labs. Wyeth Labs. Organon Inc. Organon Inc. B 0 B Hynson, Westcott, Hynson, Westcott and and Dunning, Inc. Dunning, Inc. Ciba Pharm. Co. Ciba Pharm. Co. Patent * . NDA Mallinckrodt Mallinckrodt Chem. Wks. Chem. Wks. - Natcon Lincoln Labs. Vitarine * Abbott * Torigian Upjohn Co. Upjohn Co. L *r~oxide & Axnole * Specialties Co. ~ewey Products Co. ~ertified Labs. /, Amphojel Suspension Wyeth Laboratories Pregnoaticon Accuspheres Organon Inc. Brewer Diagnostic Kit- RPR Card Test Hynson, Westcott, and Dunning, Imc. Ismelin Ciba Pharmaceutical Co. Conray 400 Mallinckrodt Chemical * Works ci PAGENO="0142" c~1'iC3LISHED NAME TRADE NAMU:S) & Co. Methyiphenidate Hydrochloride Tablets, "Ritalin" US?, 10 mg, l000's Ciba Pharm. Mumps Virus Vaccine, Live, Attenuated, "Lyovac Mur~psvax" Jeryl Lynn, (B Level) Strain Merck, Sharp & Dohme Lyophilized Dried, Equivalent to 0.5 cc, Single Doses Betamethasone Valerate Cream, NP, "Valisone" Equivalent to 0.17, of Betamethasone, Schering Corp. 45 Grams Quinidine Sulfate Tablets, US?, 0.2 Gram, lOO's * SOURCES OF SUCCESSFUL INDUSTRY INFO. BIDDERS Ciba Pharm. Ciba Pharm, Merck, Sharp Merck, Sharp & Dohme & Dohme 139 584-3179 141 142-9203 148 107-0922 149 138-7400 Schering Corp. REMA~ ES NDA Patent BOB NDA Schering Corp. Norwich Eli Lilly Premo Wm. S. Merrell Parke Davis Davies Rose Hoyt Strong Cobb Amer Vitarjne PAGENO="0143" rST4BLrSHED NAME SOURCES OF SUCCESSFUL TL~1E SAM1~(S & Co. .INISIJSTRY INFO.. BIDDERS Valium Roche Labs. Roche Labs. Roche Laboratories Aldomet Merck Sharp & Dohme Merck Sharp & Dobme Merck Sharp & Dc~hme I ~. 783-7218 2 890-1856 C 664-7(16 4 753-5042 5 ~gll6-45oo 146-4425 3 160-7410 Diazepam Tablets, NF, 5 mg, 500s Nethyldopa Tablets, US?, 0.21 Gram, lOOs Potassium Penicillin C for Irjection, US?, 1,000,000 Units Streptomycin Sulfate, US?, &uivalent to 1 Cram of Streptomycin I ass Dextrose Injection, DSP, 57., 1000 cc, 6s JAN 2 6 i974~ REMADES ___________ Patent, NBA Patent, NBA Form 6 E. R. Squibb & Sons Form 6 Warner-Chilcott Labs. Upjohn Labs. NBA Form 6 Pfizer Labs. E. R. Squibb & Sons Romar Labs. Pfizer Inc. Eli Lilly & Co. Travenol Labs. Baxter Labs. Cutter Labs. Roche Labs. Sulfisoxazole Tablets, US?, ~.5 Cram, Cantrisin l000s * Roche Labs. Procaine Penicillin For Aquecus Injection, 1,500,000 Units Wyeth Labs E. R. Squibb & Sons Pfizer I,abs. Eli Lilly & Co. Pfizer Labs. Roche Labs. Pfizer Labs. B. R. Squibb & Sons - Inc. PAGENO="0144" . souncr~s OF SUCCESSFUL ."~N 2 \ ~ I~b1D `~ L~L~~_L CO Ii~~)USTRY INro 1310r)EPs St 8/~l8l-7635 Aapicillin Capsules, USP, Polvcillin BristolLabs. Bristol Labs Ayerst Labs 0.25 Gram, l000s . . Bristol Labs Wyeth Labs TJD-john Co. Beecham-~1assengill Beecham-Massengill jBeecham Massengil]. Form 6 Pharmaceuticals . Pharmaceuticals Patent Totacillin ~. R. Squibb & Song f,~ ~ I. ~ ~ ~ ~ o . . . . . . ~ Principen E. R. Squibb & Sons Penbritin Ayerst Labs. Aycrst Labs. . . . . . . . : ()~flfl~ . . , ~ . ~ . : 9 ~l65-6545 ~ ~ . . . . Cenhalexin ~fonohydrate Ca~s~iles, Equivalent to 0.25 Gram of C3phalexin, lOOs . Wyeth Labs . . ,. . Reflex . .~ .* . Eli Lilly & Co. Eli Lilly & Co. Eli Lilly & ~o. , . ... Form 6 0 w ~ ~J ~12 . 10 299-8179 5~p ~ Albumin, Normal Human Serum, USP, 25%, 100 cc . . . .. ..~ . . . . .. . . . . .* ~ Div. of . .. ~Armour Pharmaceutics .~ Hyland Labs BOB License . E.R. . 11 687-8047 ~ . . . . S Benzathine Penicillin G Sus~ension, s Sterile, TJSP, 1,200,000 units in . . . . . . .. . . . . Cutter Labs . . . .~`.1- .. I Courtland Labs .~ Bicillin . Wyeth Labs . Wyeth Labs Wyeth Labs . . * 5orm 6 , : Aqueous Suspension, Cartridge-Needle Unit, 2 cc size, 20s . : . 12~~958-2364 Pro~oxyphene Hydrochloride Capsules, USP, 65 mg, 500s Darvon Pulvulas Eli Lilly & Co. - Eli Lilly & Go. ..~ai Eli Lilly & Co. th Kline & NDA . - . ; . . . . . . . .. . . .. . . . ... . - . . ...J . . French Labs. ~> " : Rachelle Labs. Anabolic Labs. Nylos Labs. Barr Labs. Lederle Labs. - . . . . . ., J off Patent in 1972 PAGENO="0145" 0 ITi 0 w (12 0 02 `*l I. cJ, 13 /1 961 -6504 *.~ 14/7 890-1764 15 1014-1028 16 ~7656-16l2 177 901-0043 LI 2~90O-2146 13 ~059-901 7 23 /q145-0429 SOURCES OF SUCCESSFUL ~3L1SHiLD NAMI _______ TRADE NAME(S) & CO. INDUSTRY INFO. BIDDERS REMARKS Nystatin, Gramicjdjn, Neomycin Sulfate,Uiycolog Cream E. R. Squibb & Sons 1E. R. Squibb & Sons Patent and Triamcinolone Acetonide Cream, E. R. Squibb & Sons . . Form 6 Topical, 15 Grams I .. . Plasma Protein Fraction, US?. Heat- Plasmanate butter Labs Cutter Labs bOB License Treated,. 5% Solution, 250 .cc Cutter Labs . kyland, -Div of Hyland., Div of Travenol Labs Travenol Labs Chlorpheniramine Maleate, Iscproparnide Ornade Spansules Smith Kline 8 French ~mith Kline 8 French ~4DA Iodide, and Phenyipropanolamine Smith Kline & French Labs )..abs J.abs 0ff patent in 1957 Hydrochloride Capsules, 500s Potassium Phenoxymethyl Penicillin fV-Cjlljn K Tablets . . ~1i Lilly & Co. form 6 cthiets, US?, 4000,000 Units, lOOs ~EliLi11y& Co. :,. Abbott Laboratories Fen-Vee K TaFkts 1 Biocraft Wyeth Labs .S *~ . Triaruterene and Hydrochlorothiazide Dyazide . Smith Kline & French smith Kline 8 French IDA Capsules, l000s Smith Kline & French Labs Labs . . .. abs . f)atent Sodium Cephalothin, Sterile, US?, Keflin . ~. Eli Lilly & Co. Ii Lilly & Co. Form 6 Equivalent to 1 Gram of Cephalothin - Eli Lilly & Co, . - . . ~- Chlordiazepoxide Hydrochloride iLibrium - -. ~ ~che Labs -. ~óche~Labs . . j'atent- Capsules, US?, 10 mg, 500s * Roche Labs . . . DA Norgestrel and Ethinyj Estraciol I Ovral . .~tyeth Labs~ yeth Labs * : DA Tablets 63s Wyeth Labs 7 ~ ~J __ PAGENO="0146" ~i!ARLISHTJ) ~`\~T. SOURCES OF SUCCESSFUL 2 6 TRADE NAEE( ) & CO. INDUSTRY INFO. BIDDERS REEARRS Lincocin The UpjQhn Co. The Upjohn Co. I Patent The Upjohn Company Form 6 Kant rex Bristol Laba Bristol Labs ~1 912-2404 i~~3 22 ~ 660-1676 23 ~i29I_S615 - 24 j~ 662-0790 25 ~~782-65l0 26 j~/ 181-7180 27 /~ 142-9206 2S~ 753-9609 Lincomycin Hydrochloride Cap- sules, USP, Equivalent to 0.50 Gram of Lincomycin, lOOs Kanamycin Sulfate Injection, USP Equivalent to 0.333 Gram of Kanamycin per cc, 3 cc Ringer's Injection, Lactated, USP, 1000 cc, 6s Erythromycin Tablets, 0.25 Gram, lOOs Griseofulvin Tablets, USP, 0.50 Gram, SOOs Gontamicin Sulfate Injection, Equivalent to 40 mg Gentamicin per cc, 2 cc Tripolidine Hydrochloride and Pseudoephedrine Hydrochloride Tablets, l000s Hydrocortisone Sodium Succinate for Injection, USP, Equivalent to 100 ag Hydrocortisone Base Ilotycin Eli Lilly B Company Erythrocin Abbott Labs Grifulvin V Tablets McNeil Labs Fulvicin Schering Corp Garamycin 1 Schering Corp'. Actified Talets Burroughs W.~ ilcome I Co, Inc Solu-Cortef Mix-0- Vial The Upjohn cmpany Bristol Labs Cut t ut Baxter Labs MoGaw Labs Travenol Labs* Eli Lilly B. Co Abbott Labs McNeil Labs Schering Corp Schering Corp Burroughs Well- come B Co, Inc The Upjohn Co. Eli Lilly B Co Abbott Labs McNeil Labs Schering Corp .Burroughs Well- come `B Co,. Inc The Upjohn Co. 0 C Patent Form 6 The Upjohn Co. Form 6 Off patent in 197 Pat ent Form 6 Form 6 0ff-patent 1972 NBA Patent NDA PAGENO="0147" TRADE NA~1F.(S) S CO. "ALDACTONE TABLETS' C. D. Searle & Co. Merck, Sharp, & Dohee "ARALEN. PHOSPHATE" Winthrop Laboratories "ZYLOPRIM" Burroughs Wellcome & Co. "PREMARIN' Ayerst Laboratories "DISOPHROL CHRDNOTAB TABLETS" White Laborat,ries Inc. "DRIXORAL" Schering "KEFLIN" Eli Lilly & Co. "BENDECTIN" We. S. Merreil 0 `.3 tTj 0 w CD tTi 0 EST! DLI MD6I) NA2IE 292~Th26-8996 SPIRONOLACTONE TABLETS, USP, 25mg, 500s 30&'165-6519 MEASLES, MUMPS, and RUBELLA VIRUS VACINNE LIVE, lOs 2!,~i~7-6430 CELOROQUINE PHOSPHATE TABLETS, USP, 0.5 Gram, 50Cc 32 968-4381 ALLOPURINOL TABLETS, USP, 100 mg, lOOs. ni 153-~I38 TSTRJGENS, CONJUGATED, TABLETS, USP, 1.25 rag, 50Cc 926-9019 DEXBRO~2HENIRANINE NALEATE and PSEUDOEPHEDRINE SULFATE TABLETS, lOOs ~ S69-4175 SODIUM CEPUALOTHIN, STERILE, USP Equivalent to 4 Gram of CEPHALOTHIN 36 ~/ 782-2662 QUININE SULFATE TABLETS, USP, 0.324 Grara, l000s 37~ 965-2439 OXYGEN, USP, with Tube and Face Mask, 24 gal. (90 liters) 36 754-0086 DICYCLONINE HYDROCHLORIDE, DOXYLANINE V SUCCINATE, and PYRIDOXINE HYDROCHLORIDE TABLETS, lOOs JP~N 2 i~t4~ JIEMARMS Patent, NDA. BoB license Patent, EDA Patent, HDA NDA Patent NBA - - Patent, Form 6 SOURCES OF SUCCESSFUL INDUSTRY INFO. DIDt)ERS Searle Scans MSD MSD Winthrop Winthrop Burroughs Wellcom~ Burroughs Weilcome Ayerst Ayerst White Schening Lilly Lilly Vitarine Co. Strong Cobb Amer Panray Union Carbide Corp.Life-O-Gen Co. (Linde) . Union Carbide Corp. Life-O-Gen (Linc~) Oxequip Health Indust. We. S. Merrell I Merrell-Na~iona]. Laboratories Life-O-Cen Life-C-Cam Co. MBA PAGENO="0148" * *. :~ .~iRLlSiiEI) N:~~ME 39~,iO4-9OO0 Alcohol, USP, 5 gal. (18.92 liters) 43 7.~O7l~6547 41 854-2504 42 q39355836 43 ~890-l840 44 764-3340 45 ~2j 159-4892 Triaacinolone A9etonida, Craam, USP, 0.5% 8oz. (227 Gram) Halothane, USP, 125cc Ethynodiol Diacetate with Mestranol Tablets, 63s Matronidazole Tablets, USP, 0.25 Gram, 250s Multivitamin for Injection, 10cc Clindamycin Hydrochloride Hydrate Capsules, Equivalent to 150 mg of Clindaisycin, lOOa SOURCES OF TRAURNAMF.(S) & CO. INDUSTRY INPO~ `Aristocort" * * Lederle Lederle Laboratories "Fluothane" * * Ayerst Ayerst Laboratories * "Ovulen" * Searle 0. 13. Searle & Co. "Flagyl" : Searle 0. D. Searle & Co. "Solu-B-Forte", Upjohn Mix-0-Vial The Upjohn Co. *. "Cleocin" Upjohn The Upjohn Co. J/iN~:. SUCCLSSFUL. * BIUDERS :~ REIIARKI' - - U.S. Indus. Chem. Publicker md. Lac Chemicals Inc. Carbide and Carbon Chemicals Co. Div. of Union Carbide Enjay ~hem. Co. - Lederle NBA Ayerst * Patent Halcarbon Ltd NBA Searle NBA Searle Patent NBA Upjohn. Upjohn Form 6 0 LTJ 0 w LTj CII ci 0 ci PAGENO="0149" ESTABLISHED NAME JAN 2 6 1974 ( ~;j) )~,*~) 46 146-2200 Sulfadiazine Tablets, USP, .0.5 Gram, l000s `47 t 116-5000 Dextrose and Sodium Chloride Injection, USP, 1000 cc, 6s~ j48 138-4610 Protein Hy4rolysate Injection, !USP, 1000 cc, 6s 49q~ 721-~383 Multivitamin Tablets, lOOs 5O~J 93S~653S Ampicillin Tor Oral Suspension, USP~, 7.5 Gram 51L~062-33~6 Furosemide Tablets, USP, 40 mg, ~lOOa S2 ..~.`9~S-5872 C1~ofibrate Capsules, `NP, 500 mg lOOs . * TRADE' NAME(S) & CO. SOURCES OF INDUSTRY INFO. SUCCESSFUL ` , BIDDERS ` - REMARKS . ~ . * . ` ` ` .. `.. ` * ` . . ` ` `. . * .. ` * S * * . *` * ` ` . * . . ` `` `S , , :. . ` `*. . ., . : *, *.. -` . *S , . . , * ..* . ` . ` `, . .* ** . *~ . ` *`` ,.. ` S.' ` ."* *. ` . *. ` . . ` ` , Lederle Labs , Dorsey Labs Beecham- Massengill Travenol Labs . Cutter Labs * Abbott Labs McGaw Labs McGaw Labs .. Travenol Labs *, Baxter Labs Don Baxter, Inc ` Strong Cobb Amer , ` Chase Chem J. B. Roerig NDA ~ ~ . . S 0 ~ ~ ~ ~ ~ L~ ~ o W t4 ~ ~ ~ . Penbritin Ayerst Laboratories * Polycillin ` Bristol Laboratories Bristol , Wyeth , Ayerst * * ` S , `` 5' `` * , .* Bristol Wyeth * * Ayerst ` * , ** ` ` * * Patent ~Form 6 Beecham-Massengil ` L~ Omnipen \. , Wyeth . *~ S * **. S ` * ., * Principen , ` S. R. Squibb *. *` *: * . S `~ ` * * Amcill , Parke-Davis 8 Co * Lasix * }Foechst * * ` * * ` S * , * * Hoechst *, ` ` * * Hoechst /., * ` cn ~ ~4 Ayerst Atromid-S Ayerst * Ayerst Patent NDA Patent NDA PAGENO="0150" 53 890-1627 -. 54 926-2154 55 576-8842 33 567; O74-47~2* 57 064-8765 qs- ~`~~JLiSELD N~4 ____________________ Dioctyl Calcium Sulfosuccicate Oapsulas, NP, 1000's lndomathacjn Capsules,. NP, 25 ing, lOOs Lidocaine Hydroch1or~da Injection, 2%, with Epinaphrina ~ 1.8 cc, 50's Diphenoxylate Hydrochloride and Atropine Sulfate Tablets, NP, 500's Glyceryl Guaiacolate Syrun, HF, 100 ing per 5cc, 4 fl. oz. (118 cc) TRAD1~ NA?fl(E & CO. "Surf ak Ca,,sulns'! - Hoechst "Indocin" Merck Sharp wad Dohme "Xylocaina" Astra "Lomotil" C. D. Scans Co. "Robitussin Syrup" A. H. Robins "Tinactjn Solution" Schenixng \\ Children's Aspirin Various Firms I. 0 0 SOURCES OF SUCCESSFUL TEDUSTRY INFO. BIDDERS . B MIRES Lloyd Brps. I Hoechst PATENT Hoechst S * Merck Sharp PATENT * and NBA * Dohine 55 926-2241 34, S 55 104-9723 Merck Sharp * ama Dohme Astra Seanle A. H. Robins Scherixng Tolnaftate Solution, lISP, 1 %, 10cc Aspirin Tablets, lISP, 75 mg, 36's Scans A. H. Robins 0 & W Laboratories Strassenburg Dorsey Schening Plough PATENT NDA Natcon NDA PATENT PAGENO="0151" Sodium Colistirnethate, USP, Lyoohilizrd, Equivalent to 0.15 Cram of Colistin Base Tetracycline Syrup, Equivalent to 25 mg of Tetracycline Hydrochloride por cc, 16 fi. oz. (473 cc) Lederle Rachelle Roerig Reine Carlo Erba Pfizer Vitarine Abbott Eli Lilly Pasadena Gotham Syntex ~T~\i~L~5ryhI4 N.SME TRATSU NAUE( I) S CO. PhenforrninHydrochloride Capsules, `DBI-TD" Gei;~ 50 mg, l000s "Meltrol-SO' U.S.V. * .724-6331 ICr' 181-7774 Iq~-~ z?~3 654-1344 "Colymycin M" Warner Chilcott "ACHROMTCIN-V Syrup" Lederle ~4N26 r-.; SOURCES OF SUCCESSFUL INDUSTRY INFO. BIDDERS - USV USV. Patented Geigy NDA I Geigy Warner Chilcott Warner Chilcott Forn 6 Form 6 .3 ~559-5l43 Calcium Gluceptate Injection, 5 cc, 25s 145-0309 Norethindrone and Mestranol Tablets, `Norinyl-l plus 80" I'30 63s Syntex "Ortho-Novum : Ortho 935-4095 Broupheniramine Maleate, Phenylephrine; Dimetapp" Hydrochloride and Phenylpropanola- A. H. Robins mine Hydrochloride Elixir, 4 ft. oz. (118 cc) 4 .~, ;lr-3593 Povidone Iodine Solution, HF, 105, ` `Betadine Solution" - 1/2 f 1. oz., 15cc, SOs Purdue Frederick Lederle Rachelle Roerig Eli Lilly Roussel Syntex Ortho. A. H. Robins Research NDA NDA Ortho NDA Of f Patent in 1973 A. H. Robins Purdue Fre,darick PAGENO="0152" Butalbital, Aspirin, Caffeine, sand Phenacetin Tablets, l000s Plague Vaccine, USP, B Medium, 20 cc Quinine Dihydrochloride Injectior NF, 0.3 Gram per cc, 2 cc, l2s Methocarbamol Tablets, NP, 0.5 Gram, SOOs SOURCES OF SUCCESSFUL J~J ~ 6 ~ ESTA~LISMED NAME TRADE NAME(S) & CO. INDUSTRY INFO. BIDDERS_________ REMAMES Neomycin Sulfate, Hydrocortisone,1 Cortisporin ~Burroughs Well- Burroughs Patent and Polymyxin B Sulfate Suspen- , Burroughs Wnllcome $ come Wellcome Form 6 sion, Otic, 5 cc j Indomethacin Capsules, NF, 25 mg,~ Indocin Merck-Sharp-Dohm4 Merck-Sharp- NBA l000s Merck-Sharp-Dohme Dohme Patent 67~9 754-2436 6S-~' 931-0680 6D).~ 853-4799 70 962-4375 71 935-1128 72 ~ 074-4582 73 660-1601 Imipramine Hydrochloride Tablets) Tofranil US?. 25 mg, lOBs Geigy : Presamine iUSV Fidrinal Sandoz Military It3m Robaxin i' A. H. Robins NBA O~9 1972 BoB License Off patent in 1973 IWA Geigy Sandoz :Cutter in co- operation with Waiter Reed Army institute of Research A. H. Robins Geigy USv Sandoz Cutter Maliinckrodt Chemical Works A. H. Robins PAGENO="0153" J14N2 ~ SOURCES OF SUCCESSFUL ThAflE NAME(S) & CO. INDUSTRY INFO. BIDDERS REMARKS Lin.cocin Upjohn Co Upjohn Co Form 6 Upjohn Co . Patent Inderal Ayerst. Ayerst Patent Ayerat NDA Travenol Labs McGaw Labs * Cutter Labs 1 Abbott Labs Baxter Labs *Ph armacraff Seaboard Mfg Co Syntex Labs Warner Chilcott ~4 /~ - Lincomycin Hydrochloride Inj e~. tion, USP, Equivalent to 0.30 Gram of Lincomycin Base per cc, 10cc s~q 106-7395 Propranol Hydrochloride Tablets, 10 mg, lOOs ~j. 153-8651 Sodium Chloride Injection, USP, 1000 cc) 6s 7 515-1584 Foot Powder, Fun~icida1, 1 Oz (2835 Gram) 985-7110 Fluocinolone Acetonide Cream, i~O 0.025%, 15 Gram 9 890-19:07 Colistin Sulfate, Hydrocortisone Acetate, Neomycin Sulfate and Thonzonium Bromide Suspension, Otic, S cc 754-0374 Povtdnne-Iodine Solution, NF, 10%, 1 Gal( 3.78 liters) Desenex Foot ?owder Maitbie Lab Division of Wallace- Tiernan, Inc Synalar Cream Syntex Labs Coly-Mycin Otic Drops Warner Chilcott Wallace and Tiernan, Inc Syntex Labs Warner Chilcott Tailby Naso6 Co Perdue-Frederick NBA Fdrm 6 Patent NDA Off Patent in 1973 ITJ 0 w iTi ~I2 I Betadine Solution Purdue Frederick Perdue- Frederic~ PAGENO="0154" :i,s75~6o55 3E9-4177 7~4-6358 994-7224 116-i750 299-9674 Diazepam Injection, NE, 5 mg per cc, 2 cc, lOs Oxytazoline Hydrochloride Solution, 0.05%, 15cc Amitriptyl me Hydrochloride Tablets,USP 25 og, 10Cc Soditzn Ampicillin, Sterile, USP, Equivalent to 0.50 Gram of Ampicillin Detergent, Surgical, 7 1/2% Povidone- Iodine, 1 gal(3.78 liters) Detergent, Surgical, Liquid, 1 Gal iconiazid Tablets, iSP, 100 mg, lOOs SOURCUS OP SUCCESSFUL fT~~i)U XAME(S & CO. INDUSTRY INFO. 011)1)509 - RFMADKS Valium Injectio.i Roche Labs Roche Labs INDA Roche Labs Patent AFRIN Spray Schering Corp. !Schering Corp. NDA Schering Corp. IPatent Elavil ~lerck Sharp & Dohme Marck Sharp & Dohme INDA Merck Sharp & Dohme Polycillin-N ~risto1 Lab Bristol Lab Ayerst Bristol Lab. ~4yeth Beecham Massangill Form 6 Patent Off Patent in 1973 NDA Off Patent in 1959 NDA Betadine Skin C eanser Purdue-Fredericks Purdue Fredericks 1' 0 t~Ti 1-4 1.3 L~i 0 t~Ti Ff2 PHISOHEX Winthrop Labs .~ INH -Eli Lilly Niconyl- Parke levis Nydrazid - Squi )l) -Tailby-Nason *Physican `s Products Co. ~`urdue-Fredericks ~1 inthrop Labs ~4inthrop Labs ~1al1inckrodt Parke Davis ~anray Eli Lilly & Co. trong Cobb Amer PAGENO="0155" :~.jDtI)!FI:L) N~1~E TRADE SOURCES OF ~»=~~_&co. INDUSTRY INFO. IS 299-6095 6/ 165--6575 ) 1~443_4048 92 074-4652 / oq ~3 616-9128 S 0~2-265I /03 Isopropyl Alcohol, NP S gal. Selenium Sulfide Lotion, NP 2.5%, 4 61. oz. (118 cc) Rifarmin Capsule 8.30 Gram, lOOs Wetar for Injection, Sterile, DSP, 5 cc, 25s Chiordiazepoxide Hydrochloride and Clidinium Bromide Capsules, 500's Nystatin Tablets, US?, Vaginal, 100,000 units, 15s Amitriptyline Hydrochloride Tablets, US?, 25 mg, 100's Abbott Labs. Ciba Pharm. Dow Chest. Co. Roche Labs. E. R. Squibb Selsun. Abbott Labs Rimactane-Ciba Rifadin-Dow Chest. Librax- Roche Labs. Hycostatin Vaginal Tablets, E. R. Squibb & Sons Nilstal Vaginal Tablets- USP - Lederlo Labs. Elavil, Merck Sharp & Dohme SUCCESSFUL BI!)DERS George Senn & Co. Haskon Inc. Shell Abbott Labs. Ciba Pharts. Do: C~ Firms receiving awards are Licensees and Liscensor is Grupo Lepetit, Spa, a subsidiary of Chemical Lincoln Labs. Torrigian Lab. Vitarine Co. Roche Labs. Sons Ledeple. Labs. E. R. Squibb & Eons Merck Sharp & Dohme J.'-L~ 2 5 REM~RP:S NDA PATENT PATENT NDA off Patent in 1972 Form -6 PATENT NDA 0 I, Merck Sharp & Dohme PAGENO="0156" SOURCES OF SUCCESSFUL _~ L1'~liFD \ ____________ Tm\1 L ~\i( I) I\OUSTRY NFO BIDi)ERS Hydrochlorthiazide tablets, USP, 50 mgj Esedrex-Ciba Ciba Abbott Lab. 1000's Hydro-Diuril-l:erck Sharp Abbott Lab. Ciba Pharm. & Dohme Merck Sharp . Dohmef Oretic-Abbott Lab. .. : Lederle Labs. . ILederle Labs. 95~9 889-7929 96I~..8l2.2579 890~l534 )S-.? 317-2279 99 558-1289 3~-# i~)0 . 100-6245 101 B 890-1496 iO ~ Myambutol Tablets Lederle Labs. Tuberculin Tine Test (T-B Tine Test) Lederle Labs. Diabinese Tablets Pfizer Lab. Gelusel Tab Warner-Chilcott Erepirin Compd. Burroughs Welicome APC Tablets Other Firms "Hydeltrasol" Merck Sharp & ~ohme Ethambutol Hydrochloride Tablets, 400 mg, lOOs Tuberculin, Old Dried, Tine Test (Rosenthal) Chiorpropamide Tablets, USP, 0.25 Cram 250s Aluminum Hydroxide Gel and Magnesium Trisilicate Tablets, lOOs Aspirin, Phenacetin, and Caffeine Tablets, HF, 1000 Prednisolone Sodium Phosphate Injectiot USP, Equivalent to 20 mg of Prednisolone Phosphate per cc, 5 cc JMfl2e~, ~ REMARB~S N0A 0 Patent ITi NDA BOB License LTJ Patent 0 NDA Strong Cobb Amer Patent NDA I tederle Labs. Pfizer Lab. Warner Chilcott Strong Cobb Amer Norwich Pharmacal Co. Merck Sharp & Dohme Ledarle Laus. Pfizer Lab. Warner Chilcott Lab~ Chase Chemical Co. Whitehall Norwich Pharmacal Beecham-Massengill Upj~hri Company E. R. Squibb M.S.D. H . PAGENO="0157" SOURCES OF SUCCESSFUL LiD~M( )~LO ThDJS~PY~O U 11)11 S 1O3~ 77O-8343~ 1C4 660-1798 105 080-0852 106 926-8*24 r~1A1~LISHFD NAME Aspirin Tablets, US?, 0.324 Gm, l000s Ampicillin Capsules Ampicillin for Oral Suspension, :~*~~ ~" Bristol Laboratories Be4cham-Nassengill Pharm. E.R. Squibb 6 Sons Ayerst Laboratories Ciba Pharm. "Polycillin" * Bristol "Totacillin" Beechaa-Hassengill "Principen" E.R. Squibb "Penbritin" iAyerst "Omnipen" Wyeth Benzpnatate Capsules, NP, 100 tag, lOOs "Tessalon Perles" Ciba Pharm. Potassium Phenozyget~iyl Penicillin for Abbott `Compoc:tllin-VK" Oral Sam (16,000,000 Units) Bristol "Betapen-VK" (10 Gram) Eli Lilly & Co. V-Cillin B E.R. Squibb \Teetids USP, "Penbritin" Ayerst "Polycillin" \\ Bristol -- "Omnipen" ~Wyeth "Principen" E.R. Squibb "Arncill" Parke-Davis & Co. Norwich I Strong Cobb Amer Parke-Davis: E.R. Squibb Ayerst Bristol Wyeth E.a,squibb Ciba Pharm. Bristol Laboratories Ayetsc Bristol REMA.flXS Ayerst Labs. Upjohn Co. `.3 Forr6 t!i 0 0ff-Patent 1972, NDA r12 Form 6 Pfizer Laboratories `1 Patent F~rm6 Wyeth Beecham-Nassengill Bristol Wyeth Ayerst PAGENO="0158" "Cepacol Throat Lozengest Wm.S. Merrell 0 C) 0 IT] ~~4 IT~J 0 w IT] CD IT] `.4 ~JiL: SOIDCES CF SUCCESSFUL INOUSTUY_INFO. BIDfJERS ______ Lederle Laboratoriest Lederle Laboratori~s Warner Chilcott j Warner Chilcott Bristol Laboratories Bristol Labor2torie~ Beecharn-Wassergill NBA S ~ 107 125-9922 . I5O FSTARLIS1IFD N!FI:. TU:UF NA I~(E~' & Co. Filibon F.A." Lederle Laborat3ries ~itarnin-Mineral Capsule, lOOs S ~CS 584-5997 ~ r4athenamine Mandelate Tablets, USP 0.5 Gm, 500s `Mandelamine Warner Chilcott 059-2760 ~ * Sodiun Oxacillin Capsules, USP, Equivalent to 0.5 Gram of Oxacillin in each capsule, lOOs ~Prostaphlin .~Bristol Laboratories S 110 584-0393 ~ ~ Propantheline Bromide Tablets, USP, 15 ing, l000a ,- `Pro-Banthine Bromide Tablets' G. 0. Searle & Co. 111 050-4567 ;/~ Psylliun~ Mydrophtlic Mucilloid with Dextrose, 14 ôz (397 Gr4ms) j'Metamucil" G. 0. Searle & Co. 112 149-1720 ~ W~terfor Injection, Sterile, USP, 1000 cc, 6s 113 687-8235 ~ C9t~ipyridinium Chloride Lozenges, 400s * earle & Co. B. Searle & Co. Wm. S. Merrell Searle & Co. G. D. Searle & Co. Burton-Parsons Baxter Laboratories Don Baxter Inc. McGaw Tra~eno1 Merrell- National Laboratories I,- NBA PAGENO="0159" 1SfiFl) N~3 ____________ Sodium Salicylate Tablets, USP, 0.324 Gram, l000s Propranolol Hydrochloride T~iblets, 40 mg, lOGs Thccnhylline Ephed~ine Sulfate and Hydroxyzine Hydrochloride Tablets i Sodium Methicillin for Injection, US?, 1 Gram Alunir.u:n Hydroxide Gel, Magnesium Hydroxide and Simathicona Suspension, 5 fl Os., 48s Pi~saa Protein Praction, US?, Heat-Treated, 5%, 500cc "Inderal" Ayerst 3. B. Roerig "Staphcillin for Injactios Bristol Laboratories "Mylanta" Stuart 114 `299-8617 15Q'136-73-)9 - 111-4339 17 400-1561 /00 3 a~103O-3975 ItO 340-3905 33~Ll4-S985 SOURCES OF SUCCESSFUL - TRADE NAME(S) & CO. INDUSTRY INFO. Bhl)I)ECS - Strong Cobb Amer - Eli Lilly - Chase -Chemical Ayerst Ayorst 3. B. Roerig 3. B. Roemig "Bristol Bristol Stuart REC4I11S PATENT NDA NSA PATENT Form 6 PATENT BoB License Codeine Sulfate Tablets, N~, 32 mg, lOOs "Plasisanate" Cutter - I- Stuart Cutter 1Hyland Div. Travenol Premo Strong CobbAmner Beecham Hassengill Eli Lilly &.Co. Norwich tWm S. Nerrel] Brewer & Co. Cutter !!yland Div. Travenol PAGENO="0160" ~ST;~is~!~D DA2E Chlorzoxazone and Acetatninophen Tablets, 500s Acetaminophen Tablets, HF, 0.325 Gram, l000s Dextrose in Lactated Ringer's Injection, 57,, 1000 cc, 6s Dextromethorphan Hydrobromide and Glyceryl Guaiacolate Syrup, 4 fl. oz., (118 cc) - `Atropine injection, 2 mg ;Triprolidine HydrochlorIde and * Pseudoephedrine Hydrochloride Syrup 4 ft. oz. Medroxyprogesterone Acetate Tablet, US?, 10 mg, lOOs SOURCES OF SUCCESSFUL ______ 7~ CO. INDUSTRY INFO. BIDDERS REMARKS McNeil McNeil McNeil, *` NBA "Parafon Forte" : . Patent "Tylenol" . McNeil McNeil McNeil . Mead Johnson Nead Johnson Dorsey I * Travenot Cutter "Robitussin-DM". Robins ~. Robins Natcon A. H. Robins Dorsey *. G & W Pennwalt * . Reine Rodana Research * Corp. Burroughs Wel]come Bur~oughs Weilcome andCo. * .8 &Co. "Upjohn Co.- .. Upjàhn Co. Patent NDA *1,1. 3313 965-7301 23 695-5-42 /0). 24 925-8985 926-9063 782-6761 27 690-1355 I ,~( Actifed Syrup * Burroughs Wellcome & Co. Provera Tablets *, Upjohn Co. Patent off Patent in 1972 NBA PAGENO="0161" 584-2895 - If 7 L2~) 982-9389 937-1758 /4/3 I ~2 222-l3~7 £ i610567 SOURCES OF ~UL__~'i~L ~_Qç7 I~JU°TPY INDO Apresoline Hydrochloride Tablets Ciba Pharm. Co. Ciba Pharm. Co. Orinase Tablets Upjohn Co. Oracon Need Johnson Labs. Pasara Sodium Tablets Dorsey Parasal Sodiutr Panray Panisyl Sodiur Parke-Davis AVC Vaginal Cream Merrell-National "Ferro Sequels Capsules" Lederle RE~'~RKS `8 0 _____-, Hydralazina Hydrochloride Tablets, HF. 25 mg, l000s Toihutamide Tablets, US?, 0.5 Gram, 200s Ethinyl Estradiol Tablets & Di~thcstcrone w/Ethinyl Estradiol ThbJats, 63s Soliun Caloride Solution, US?, 0.9% 1500 cc, is Sodium Aminosalicylate Tablets, US?, 1.0 Gram, l000s Su~ftni1amido, Allantoin and Aminacrinc Hydrochloride Cream, Vaginal, 4 oz (l13;4 Gram) Ferrous Fumarate & Dioctyl Sodium Sulfosuccinate Capsules, l000s Head Johnsoa * - -? 893-2217 374-2931 /4/'- SUCCESSFUL ___________ BIDDERS Ciba Pharm. Co. Upjohn Co. : Upjohn Co. Travenol Lab. Abbott Dorsey Labs Strong Cobb Amer Panrdy Miles `Merrell-National ILederle NDA PATENT NDA NDA McGaw Labs. Cutter Labs. NSA NSA Cutter, - Tràvanol NcGaw Abbott Dorsey Lab - Nerrell-National Lederle /- PAGENO="0162" 294-5739 :3c~ 153-5275 550-3277 Chlortetracycline Hydrochloride Ophthalmic Ointment, 17,, 1/8 oz. 3.5 Gm, 12s Immune Serum Globulin, USP, Human, 10 cc Prc.~sthazine Eydrochloride Tablets, US?, 25 ng, lOGOs 353- 5355 Dexamethasone Sodium Phosphate th injection, US?, Equivalent to 4 mg of Dexamethasone Phosphate per cc, 5 cc 013-5112 Minocycline Hydrochloride Capsules, t37 Equivalent to 100mg of Minocycline, SOs ~ 299-c013 Insulin, Isophana, Suspension, USP, 10cc ` TRUC N\UE( ~ & CO. . oounc~s or INIUSThY INFO. Ji~;1; SUCCESSFUL I3IDDErIS .~ 2~,-.,,,, ~`i Aureomycin Ophthalmic Lederle Lederle Form 6 Ointment, 17. 1 Patent Lederle Laboratories Hyland 808 license ~E. 3. !Lederlo Phenergan Hydrochloride Wyeth Wyeth NDA Tablets Endo Wyeth Lab. Decadrort Phospate NerckSharp & Dohme Merck Sharp & Dohme INDA Merck Sharp & Dobme I Patent Minocin Lederle Lederle Form 6 Lederle Labs. Patent Lilly E. R. Squibb Eli Lilly NDA MPH helm Squibb MPH Insulin Cordran Cream Eli Lilly Eli Lilly Patent Eli Lilly NDA ,,/~ ~ 590-1554 Flu:sndrenolide Cream, N?, 0.05'!., 15 Grams PAGENO="0163" Nitrofurazone Ointment5 NP, Water Soluble, 1:500, 1 lb. (453.6 Grams) Ilypaque Sodiuzi 50% Winthrop Labs. "Terramycin 0,hthalmic Ointricnt with Polymyxin B Sulfate" Pfizer "Coramine" Ciba Furacin Soluble Dressing Eaton Eaton Labs. Prams Eli5ins-Sinn Natcon Vitarine Ciba Gotham Carlo Erba Brewer Torrigian Pharniich Cold Leaf Eaton TI4.1.t0 x:~i:s ( N) & CO. Erythrocin Abbott Labs Benemid Serck, Sharp, and Dobme Premarin Ayerst Labs. Erythromycie Ethyl~succinate for Oral Suspension, NP, Equivalent to 8 Grams of Erythromycin Base Probenecid Tablets, USP, 0.6 Gram, l000s Estrogens, Conjugated, Tablets, USP, 0.625 eg, l000s Bacitracin Ointment, tSP, 500 Units per Gram, 1/2 oz (14.2 Grams) l2a Sodium Diatrizoate Injection, US?, 501., 30 cc, 25s Oxtatracycline Hydrochloride and Polymyxin B Sulfate Ophthalmic Ointment 1/3 oz (3.5 Grams) lOs Nikethamide Injection, NP, 25%, 1-1/2 cc, Sa 1.42 083-0553 11.3 181-5337 1.4 384-0412 159-8625 146 443-4553 147 299-3508 :48 130-1305 ~.a9 130-L960 SOURCES OE SUCCESSFUL INDUSTRY INFO. BIDDERS - ______ Abbott Abbott Porm 6 Berck,Sharp,&Dobme Merck, Sharp, 8 Dohm4 NBA Ayerst A;1.'~-0 X71. Day Baldwin - Promo Form 6 Pfizer IStrong Cobb Amer Eli Lilly Abbott Winthrop Winthrop NBA Pfizer - Pfizer PATENT Form 6 C) PATENT BRA PAGENO="0164" `I'i~ADE ~\M1.~ & CO. Tadral. Tablets Warner-Chilcott ~) srt ~TF~;~ L~O 733-4~66 Thcophyllino, Ephodrine * Hydrochloride and Phenobarbital Tablets, NP, l000s SOUHCNS OF ])US'tRy INFO. Warner Chilcott I. SJJCCESSFUL * - BIDDERS * flEMARKS 511 Lilly Warner-Chjlcott * PAGENO="0165" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10079 15. Q~ESTION: In the past several months Mr. Feinberg of the DPSC has publicized certain problems for which the Subcommittee is very anxious to secure additional information. His statement and our questions are as follows: (e) "We develop definitive product specifications which often exceed official or commercial standards." Please name each product for which such specifications have been developed; the significance ~Eor each product of these extra require- ments; and the medical purpose served by these extra requirements. ANSWER: There are approximately 1200 drug items in FSC 6505 managed by DPSC. About 800 items are monographed in the IJSP or NF; the balance is not covered by official standards. In preparing spe~ifications for USP and NF items, the compendial standards are the focal point for the technical data. Additional standards are added in those instances where the need exists. ..~ç~iided~ded are general requirements that exceed the standards of the US? and NF ~ fl f~t~t~t.ihich are neces sáry contractual pruposes limit on unrefri erated shi in time for r - - era ems, and leakage testing for flame-sealed ampuls. Stan~~s ~fo~ii~dividual items are ad~T~Tiih problem areas are anticipated or complaint background develops. Such additional data may be obtained or developed from literature, industry, DMMB, DPSC staff, or DCAS Quality Assurance Representatives. For those items that are not covered by the USP/NF, specification. data are requested from those firms listed by the DNNB as the commercial reference. The Chemists/Pharmacists carefully review the submitted specifications, taking into account published information found in the literature, journals, handbooks, as well as their background and experience with similar items. There are times when a firm's submitted data do not contain sufficient requirements to insure a quality product. Other times, the methods are not entirely satisfactory. The DPSC specifications are coordinated in house before a specifica- tion review board which consists of members of the Technical Services Branch, the Office of Counsel, the DPSC Medical Laboratory, and the Quality Assurance Branch. Additional requirements for USP and NF items follow. PAGENO="0166" Diazepam Tablets, NP, 5 mg, SOOs DL~zcpan Tablets, NF, 2 mg, SOOs D~azepcm Tablets, NP, S mg, lOOs A~stohexasajde Tablets ~ccly1 Sulfisoxazole Oral Suspen~ion, NP, Pediatric, 1 pt o assur~ the stability of the product, in It~t excessive moisture may cause deterier- ~tion. the active ~~4ditional test to assure the purity of ~ctive ingredient.. Not in NE monograph. ~eeExplariatory Notes. bce Expltnatory'Notes. - cc Explanatory. Notes. b assure that the proper appearance of .h~ product is obtained sii~ce complaints ~ve been received on this product due to iscolora-tion. Complaint history. cc Explanatory Notes. o assure that the tablets do neutralize xcess gastric acidity * cc Explanatory Notes. * cc Explanatory Notes. ADDITIONAL !u~TuTRnMDn'rs Cinnamon Oil, USP, I oz (28.35~) ~ihoflavin Tablets, USP, lag, lOOs Chioral Betaine Tablets, NP, o.s.q Stars, 30s ~1SNiFICANUIi To assure best productiort procedure~ s~nd~ - Icontr~ls are utilized consistoi~t wi~~i .~ good manufa~turing practices. jSee Expianatory Notes, ~ee Explanatory Notes. Free from sediment Classification of Defects Hardness Limits - *: Moisture Limits Additional test :réqUireinent for ingredient (Melting Range) Classification of Defects Classification of Defects Classification of Defects Color Amjnu,qr Hydroxide Gel, Dried, Tablet~, Classification of Defects USP, 0.324 Gm, lOOs * Acid conswning capacity* D~sipra-zine Hydrochloride Tablets, Classification of Defects - - ~P, 10 m~, ?000s * *. IHardness:Limits PAGENO="0167" 0 LTJ L~i 0 w L~J cia ITJ z Cii I. * ____________ AODITIONAL RoQU ~REMENTS 5 1 N ``C~l Trjoctir,n, US?, 0.25 mg/cc, Classification of Defects See Explanatory Notes. Leakage Tests for Ampuls See Expi~natory Notes. - - - CoIoi~ Limits See Explanatory Notes. * :~.l -c~~ ::rafluoethane, NP, 8 oz Classification of Defects See Explanatory Notes. N Initial boiling and end boiling point. The N? adnograph only raquires an approximate temperature. `To dafine the purity of the item which is used as a local anesthetic on the skin. The NT monograph has no official * requirement. This requirement is an &dii- tional measurement of purity of active * ingredient. See Explanatory Notes. Specific gravity ~za~rn'mnc Sulfate Tablets, Classification of Defects *henhydrmz ice hydrochloride Free from sediment ~~xir, US?. I gal * ;onhydraai~e Hy~rochiorzdc Classification of Defects des, US?, SO rig, lOOa ~.ivdrariieHcz;'achioride * -~cLes, J:i~, 50 rig, lOGOs N. iUohyd:-cxyquin Tablets, USP; Iclassification of Defects Tablecs, US?, 0.25 mg, lOOs Classification of Defects Tablets, US?, SO ag, Classification of Defects To assure that proper filtration of the lixir was utilized in accordance with ~ood manufacturing practices. See Explanatory Notes. ;ee Explanatory Notes. ee Explanatory Notes. ee Explanatory Notes. PAGENO="0168" ADDITIONAL REQUIREMENT SIGNIFICANCE Sodir Scobarbital Capsules, USP, lOOs Secobarbital Capsules, USP, iptyline Hydrochloride US?, 10 ag, lOOs JIt:13:yllce Fiydrochlocide inlets, US?, 25 ag, lOOs ijr~i. rinty) me Hydrochloride Thblets, US?, 25 ag, l000s 1i~, Protamine ZIIAc, Suspension USi 0-40, 10 cc iii Iniection, iS?, U-40, 10cc In Injection, US?, U-SO, 10cc lnsui.±n, isophane, Suspension, U-SO, 10cc i:~u1in, Isophane Suspension, U-40, 10 cc iisulin, Zinc Suspension, USP, 0-40, 10 cc insulin, Zinc Suspension, USP, 0-80, 10 cc .lninophylline Tablets, 0.2 Gram, US?, lOOs Classification of Defects Maximum unrefrigerated shipping times for items requiring refrigerated storage Classification of Defects Tablets shall be white. Tablets shall be free of ainmoniacal odor. Aminophyllineis composed of theophylline and ethylene dianine held together by weak chemical bonds. The ethylene diamine component is responsible for the aisaonia- like odor produced and this odor will be more prevelant after decomposition of the aininophylline. This type of chemical deconposition may be due to age of material, conditions of storage, the quality of the active ingredient, the method of manufacture of the product or a combination of any of these factors. `.lassltlcation of Defects Accelerated Aging See Explanatory Noti~ See Explanatory Notes. See Explanatory Notes. Seq Explanatory Notes. See Explanatory Notes. I. 0 0 PAGENO="0169" S15141i (.1'('~i ___________ * See* Explanatory Notes. * `To assure best production procedures and * controls are utilized consistent with * good manufacturing practices. See Explanatory Notes. * tTo assure greater stability over the shelf life of the item. Not included in USP monograph. * See Explanatory Notes. ~See Explanatory Notes. * See Explanatory Notes. FR does not specifically require corn- ~liance with weight variation for this item. Our requirement assures uniform * ~eight variation within limits and thus roper and uniform dosage. ~ee Explanatory Notes. * pee Explanatory Notes. * ~ee Explanatory Notes. ~ee Explanatory Notes. ADDITIONAL REQuIFalENncS Classification of Defects Free from sediment Classificatjon of Defects pH Limits ~n1Sine Sulfate Tablets, USP, Sn, lOSs (`ntor Oil, lISP, I qt .~..~ooraI~~ntjr, lrjsction, lISP, ricrograrns ~ec cc, 10 cc ~.rciccopj; injs~ction, Repository, Classification of Defects 1.) .`uits per cc, 5 cc * * Mayimum unrefrigerated shippIng times for items requiring refrigerated storage. Cc!Oncine Tablets, lISP, 0.65 mg, Classification of Defects ~`~nalexin Nonohydrate for Oral Weight Variation 30 pension Pi::epam Injection, NF, 5 mg per cc, Classificatton of Defects lOs * * Leakage Test for Mipuls ~~,`oolexin Monohydrate Capsules, Classification of Defects 3o 0.25 Gram of Cephalexin~ -* Casara ~ablets, NF, 0.25. Gm, lOOs Classification of Defectn; I. C C PAGENO="0170" ADDITIONAL REQU1REME~rfS *)~oc~Lzine Uydrochloride t:~c~, US?, 25 ag per cc, ~ ~ * 0 Injec- 2 cc, 6s . . . - . * . - S1CNII u:s.N(:D - Classification of Defects * See Explanatory Notes. - Color Limits ** See Explanatory Notes. Leakage Test for Ampuls See Explanatory Notes. Limits for foreign substances (color, pH, To assure that impurities are detected unchlorinatecl compound for active ingredient that may arise from-production procedures,- and -4-Chlorophenothiazine for intermediate) or from changes in sources of materials, - - ~ in the proce~ssing of the item. The . . - . presence of these impurities is inconsis. . . . . *- . kent -with good manufacturing pzactices. *~nyi \tr~tc Inhalant, 33 cc NF, Ampuls, * - . . . Preservatives - . -~ . - . . - Classification of Defects - * o assure greater stability over the shelf life of the item. See Explanatory Notes. NP, 1 Pt (473 cc) - . . Higher minimum limits for vitamins A and D . . . . * . . . . *. lore potent Cod Liver Oil so that the uantity of oil taken per dose may be freduçed. 3rocholic Acid Tablets, -. ~3 Gram, lOOs NP, - 0 Classification of Defects - * * 0 * * ce Explanatory Notes. . ~cchiorperacine Edisylate Injection, Equivalent to 5 mg of Prochior- -~razine per cc, 2 cc, lOOs 0 - - - 0 -. 0 * Classification of Defects * * Color Limits * . * Leakage Test for Ampuls -. * Limits for foreign substances (color,. pH, unchlorinated compound for active ingredient; and 4-Ch-lorophenothiazjne foi~ intermediate) ~. - - -* - * / * -. .. * * - . ** * ee Explanatory Notes. .ee Explanatory Notes. - .ee Explanatory Notes. - o assure that impurities are detected hat may arise from production procedures, r from dhanges in sources of materials, r in the processing of the item. The resence of these impurities is inconsis- ent with good manufacturing practices. -~ne hydrochloride :~6Os Tablets, Classification of Defects - * Hardness - Free and combined Hydrocl-.loric Acid * - . 0 - ee Explanatory Notes. cc Explanatory Notes. uantitative assay for the chloride as ell as for the limit of the impurity ree hydrochloric acid. PAGENO="0171" ,~:~r~cphyiiine injection, USP, 25 mg e 4cnz~!ko,iius Chloride Solution, US?, 4 ft cz (118 cc) Ac~ta~olaeadc Tablets, US?, 250 rng, C:~'cisone Acetate Suspension, art Ic, US?, 25 mg per cc, 20 cc Collodion, Flexible, US?, 1 fl'. oz (29,5 cc) ~\tropine Sulfate Ophthalmic Solution, `iSP, 1%,.1S cc tighter pH range is specified in order to afford greater stability over the shelf life of the item. To assure less irritation upon instillation into the eye. ~o reduce the potential for irritation to the eye. See Explanatory Notes. ADDITIONAl. DEOUIREMENTS STENU: ICANCU ______________ Color Limits . See Explanatory Notes. Leakage Tests for Ampuls ` See Exp~Ianatory Notes. Classification of Defects See Explanatory Notes. Benzalkonium Chloride, lB?, is not available 1To assure that impurities are detected to manufacture this mono~raphed item. There- that may arise from production procedures, fore Defense MEdical Pur~hase Description * or from changes in sources of materials, de1ineat~s tests and reqiirements for a or in the processing of the item. The ,Benzalkonium Chloride coocentrate for use in presence of these impurities is inconsistent manufacture of 10% solution. The US? mono- with good manufacturing practices graph fGr the solution requires limited tests since it is assumed USP Benzalkonium `Chloride will be used. : See Explanatory Notes. See Explanatory Notes. To assure less irritation upon instillation into the eye. See Explanatory Notes. Classification of Defects `, Classification of Defects Shall be isotonic Classification of Defects Tighter pH Isotonic Rabbit Eye Irritation Test\' Classification of Defects Classification of Defects C:J.~aroaua4de Tablets, US?, 0.25 Gram, ~ Clofibiate Capsules, Nl~, 500 mg,. lOOs 0 LTI `-I ITJ 0 w LTJ cli See Explanatory Notes. PAGENO="0172" Chiorotrianisene Capsul~s,' NF, og, 48s Caffeine and Soditha Benzoate Injection, tJSP, 0.25 Gram per cc, 2 cc, 12s Classification of Defects 1~imits for foreign substances (Color, pH,. unchlorinate4 compound for active ingredient and 4-.Chlorophenothiazine. for intermediate) Classification of Defects I' Color Limits Leakage Test for Ampuls Classification of Defects To assure the stability of the product, , in that excessive moisture may cause: deterioration.. See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. To assure the stability of the product, in that excessive moisture may caus~ deter- ioration. See Explanatory Notes. *See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. To assure that impurities are, detected that may arise from production procedures, or from changes in~sources of materials, or in the processing of the item. The presence of these impurities is inconsis- tent with good manufacturing practices. See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. SeC Explanatory Notes. ADDITIGNAL RE IT M?NT~ SIGN) I TCANU:n Aspirin, Phenacetin and Caffeine Tablets, NP A~pirin Tablets, US?, 0.324 Gram, lOGs Aspirin Tablets, USP, 0.324 Gram,. lOGOs C~lcIun Lactate Tablets~ NP, 365 Gram, lOGs ChIcrlhalidofle TabLets, tJSP, a, lOGs Chlorpromazine Hy~ rochloride Tablets LiSP, 25 mg, l000s Ch1orp~ornazine Hydrochloride Tablets, US?, 50 ag, l000s Chiorproma me HydtOchloride Tablets, LiSP, 100 mg, l000s * Moisture Content; Classification of Defects Accelerated Aging Test . : Hardness . . * Moisture Content .. classification of Defects. ** * * Classification of Defects . . .. 4 Classification of Defects . Hardness limit :, 0 *`i PAGENO="0173" ADDITIONAL_?EQTJIREMENTS Color Limits * Leakage Tests for Ainpuls. Shall be isotonic Classification of Defects Hardness Moisture Classification of Defects Classification of Defects More Stringent: Limits of impurities (Non- aspirin salicylates) Classjfication of Defects Classification of Defects I4entity * Maximum unrefrigerated shipping time Classification of Defects Classification of De~fects sI(;w1;CCANCU Phonyiep~rinc Hydrochloride !ii1CCt~Ofl, HIP, 1%, 1 cc, 25s Asp. cii Tablets, US?, 0.324 Grain, kiicpul'imol Tablets, DSP, 100 mg ~rpinn Tablets, DSP, 0.324 Grain, (Enteric Coated) ~oizonatate Capsules, N?, 100 mg, SODs ~1buo1n, Normal Human Serum, US?, 100 cc .\rcorbic Acid Tablets, US?, 50 mg, A~corhic Acid Tablets, US?, 0.50 ~, * See Explanatory Notes. See Explanatory Notes. : O prevent harnolysis of red blood cells at the site of the injection. See Explanatory Notes. See Explanatory Notes. - o assure the stability of the product, in ~that excessive moisture may cause deteriora- jtion. jSee Explanatory Notes. 3cc Explanatory Notes. Fo provide tighter limits in c~rder to assure the best production procedures and controls .rc utilized consistent with good manufac- uring practices. Complaint history. ce Explanatory Notes. ce Explanatory Notes. o assure that impurities are detected that ay arise from production procedures, or ~rom changes in sources of materials, or in he processing of the item. The presence ~f these impurities is inc~nsistent with good manufacturing practices. ~ee Explanatory Notes~ cc Explanatory Notes. me Explanatory Notes. 0 PAGENO="0174" A tighter pH range is specified in order - to assure greater stability over the shelf life of the ito's. To assure a tighter manufacturing control since this itme coetains 2 mg of Atrcpirie Sulfate par cc. See Ilaplunatory Notes. See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. ~ee Exolanatory Notes. See Explanatory Notes, To assure the stability of the product, in Nleat excessive coisture rtey cause dc-tori~-a-- htion To assure that impurities are detected that hey arise from isrcduction procedures, or free changes in sources of materials, or in the processing of the item. The presence of these impurities is inconsistent with hood manufacturing practices. ~ee Explanatory Notes. See Explanatory Notes. See Explanatory Notes. to assure that the active ingredient is got readily lost from the containers. Mala~te Tablets, Classification, of Defects See Explanatory Notes. CIa-asian So]f~tc injection, US?, pH Limits so ~ US?, n ~l/l5') ge) per cc. CE cc Thlos-icie Tablets, USP, -nIrin Tablets, LiP, 77 ag, 36s Arceatic, NP, 1/4 pt Y;sr.ara ,:`saoanlo-scie esject eon, Tighter Assay Limits Color Limits Classification of Defects Classification of Defects Classification of Defects I-hardness I iaaüts Moisture Content Limits for foreign substances (Heavy Metals), oH and clarity of solution for active ingredient Pal atabilitv Hardness Classification of Defects Removal toruue for closure on immediate containers I. C 0 `.3 `-4 `.3 LTj 0 tmJ (152 ITJ 0 z Classification of Defects See ixptanatorv Notes. PAGENO="0175" (l~ssifleatico of Defects See Explanatory Notes. -. - * ~c~u Icec for Arpuls See Explenatory Ectos. - Cie:a14i ration of Defects Sra Explanatory Notes. Color NArita Sec Explanatory Notes. Cx"lty of Solution To assure that impurities are detected * that may arise free production procedures, 2 or free chaogos in sources of materials, * - or to tie orocoxssng of the item. The presooca of thesa impurities is incoosis- * tent with good manufacturing practices. :*e.kogo Tests for inputs See Exolrnatory Notes. * CArsesfication of Defects Sea Explanatory Notes - l~grter Asset Limits - To provide tlgNcor liaits to order to assure the `cost product-i on proceducos nod controls re c' ill cod ,ocststent sitO good 0 - anoufecturiog pr'ccieos. W Liolt for ilkaloid Isomer - to assure that iapurties arc fotected that - - may arise f-rum production procedures, or - * free chsoges In sources of eaterists, or - in the processing of the item. The o t ~ou ~ ncrc I S :lu~er Dir iriegration - Co allow less time to assure the tableta - are disintegreted fsstsr aod thus release - the active iogrrdieut seeoer. - AceeieratrdArgiog Test See txplnnatery Notes. - 0cc-Year Storage Test assuec that tehiate conform to all the - - recjutrsnents for one year after the data - of delivery to the teverneent. C - Diseacutton Test To assure the proper release of the active ingredient. Comniatna otstery. d ci) `.3 I. - 0 0 Co PAGENO="0176" iuran~l'enolide Cream, NO, 0.05~, 225 Crar~s Niursuthenolide Cream, NF, 0.05%, 5 Craps idiurandrenolids Cream, NP, 0.02515, zlO Crams flicctyl Calcium Selfosucci.nate psuies, NO, C. 14 (Iran, lOOs OioctyI C~lcium Sulfassdcirata `0, 0.24 Gram, IPOsIs icczyi Calcium Sulfosuecirate sa~uies, NO, 0.24 Grass, S000s uiociyl Sodium Sulfosuccinate Ca;~sules,. 2SF, 100 ag, l000s I xapram Uy2rochloride Injection, yr 20mg per cc, 20 cc Classification of Defects Leakage Test See Explanatory Notes. To assure that impurities are dttected that may arise. from production procedures, or from changes in sources of materials, or in the processing of the item. The presence of these impurities is inconsis- tent ssith good rsanufacturing practices. See Explanatory Notes. listassinc Phosphate Injectios, USP, I cc, 6s ADGITICNM. lrQunl1111 siP Classification of Defects Leakage Test for Ampuls Color Limits Classification of Defects Leakage Test See Explanatory Notes. - See Explanatory Notes. - . - - See Explanatory Notes. See Explanatory Notes. To assure that the containers of cream do not leak. See Explanatory Notes. To assure that the liquid fill does not leak, (arsenic) in the Classif~cation of Defects Limits for foreign substance active ingredient Classification of Defects rigoxin Elixir, USP, 0,05 e.g/cc, 60 cc Free fposn sediment 0 0 0 ci 0 LTj To assure the best production procedures and controls are utilized consistent with good manufacturing practices. PAGENO="0177" ___________ ADDITIONAL RLQUILOM}E': I'S S (;N I F [CAN(H ____________________ Erythroaycin. Tablets, 0.25 Gram,lO0s~ Classification of Defects See bxplan~tory Notes. - DiphctM.h~dantoin Tablets, USP, Classification of Defect~ `: I See. Explanatory Notes. 50-mg, lODe Tighter Assay Limits. ) To assure a tighter manufacturing contrp.l. Tighter Assay and Meitin~ Range for To assure that impurities are detected that Active Ingredient may arise from production procedures,*or 1 1 from changes in sources of materials, or in the processing of the item. The - presence of these impurities is inconsis- * tent with good manufacturing practices. See Explanatory Notes. Cortiao~e 5cetate Tablets, US?,. 25 og, 40s Etachioc~nr~ol Camsules, NE, 500 mg, lOOt See Explanatory Notes. See Explanatory Notes. To assure best production procedures and controls are utilized consistent with good manufacturing practices. To assure best production procedures and controls are utilized consistent with good manufacturing practices. - To assure that impurities are detected that may arise from production procedures, or from changes in sources of materials, or in the processing of the item. The presence of these impurities is incon- sistentwigh good manufacturing practices. To assure proper quantity of this stabilizer to prevent pnlymerization. 0 ~0eetthc Hydrochloride lnj ection, US? Ot ag, I cc, Es - Ethyl Chloride, NF, 100 Grains Formaldehyde Solution, US?, 1 qt (946 cc) See Explanatory Notes. Classificatidn of Defects Classification of Defects Classification of Defects Leakage Tests, for Ampuls Free from Sediment Free from Sediment APHA Color Assay Requirement for Methanol. PAGENO="0178" - `- a Cc a: ~2S. ii (Irce;s) free from cedioent To assure best production procedures an~ - - -- controls era utilized consistent with good sisnufacturing practices. o Tablets, NSF, Classification of Defects See Explanatory Notes. -zr z frI 7~e I -at, tic Cral height Variation The Ni monograph does not specifically t a F recuire compliance with contont uniformity for this item. ~zr requirement sasures unifore quantity within limits snd thus proper and uniform dossge. .Tnste/i'slatsbllity Test :500 Explanatory Notes. - a- `a - `-:,cI'i rate for .Ieipht Variation The DSP nonograph does not specifically - - . :~-~ art to Can't require coeplianca with content uniformity - 7--ta, 5- for this item. ~ requirement assures oaf fos-o quantity within limits end thus proper and uniform dossge. Satu:7lity Tire Cmii fiLe txrl:natory Notes. C!nsaffic,-tioo of Defects Sos txptanatory Notes. acer, DSP, 5/4 IL Nero Stringent Limits of tnpuritias.(Non- To provide tighter limits in order to sssu~o Volatile-Residue) (Foreign Odor) (Substances the best product-inn procedures and controls .Darkcn:dby Sulfuric Acid) ore utilited consistent with good manu- facturing prscti cos. Percnidos - To sssure thai ionurjtiss are detected toot say arise from production procedures, - -or from changes in sources of eatcri-ais, - - ;OC `n the processing of the item. The - -presoaco of these lnpuritiss is inconsistert with good nsnufocturing practices. folor l'o assure that irpuritios are detected that say- arise from production prococ!ures, or from changes in sources of mnterisis, Or in the processing of the item. The presence of those impurities is incuosistere - with good manufacturing practices. Stability To assure that the product is stable over tho shelf life of the item. Corspdaint history. PAGENO="0179" Classification of Defects Hardness Classification of Defects Lekkage "lest Upper assay lieits C1ass~fication of Defects Leakage Test clas~l Tsbets, NE. 2 sg, i000s Classification of Defects Hardness * Thin LayLr Chromatography * for Active Ingredient * A~i:C~Al ~ S:'lH hAN( C i ~caia iohlcts~. US?, 0.0 ag, iOOs Classification of Defects See Explanatory Notes. Color The color pink for this dosage is ` - important to differentiate it from another dosage size. See Explanatory Notes. See Explanatory Notes. To assure that impurities are detected that * may arise from.production procedures, or from changes in sources of materials, or in the processing of the item. The pres- once of these impurities is inconsistent * with good manufacturing practices. See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. - :c-1rositc Tebiocs, Nt, I ag, "lintan~t, NE, 3.05%, euvitarnir To %ssure that the tubes of ointment do not leak. To preclude possibility of use of superposant nìateria~. See Explanatory dotes To assure that, the tubes of cream do net C) PAGENO="0180" ~luorouracil injection, `dSP, SO ag pal cc, it) cc. lOs !ivJ:ocortlsone Tablets, `dSP, 20 ag, inns Criseofuivia Tablets, US?, 050 Gm, 501's A10iT1ONAL R1QUIRIIL:;TS S inn :`d'dC C -- Classification of Defects See Explanatory Notes. Shall contain not sore than 0.3 zig free fluor-~ To provide tighter iisii~s in order to ide per ml assure the best production procedures and controls are utilized consistent..with good manufacturing practices. See Explanatory ~tes. To asSure that pyrogens are not present. See Explanatory Notes. To assure beat production procedures and * contgols are utilized consistent with good isanqfacturing practices. See Explanatory Notes. See Explanatory Notes. Classification of Defects See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. To assure that impurities are detected that may arise from production procedures, or from changes in sources of materials, or in the processing of the item. The presence of these impurities is incon- sistent with good manufacturing practi~es. lnjectthn shall be colorless * Pyrogeii Test * Leakage Test for Ampuls Free from Sediment Lactic Acid, US? lcohendyiaee Injection, `dSP, 3 cc, 3, to faint yellow Classification of Defects Leakage Test for Ampuls See Explanatory Notes. iodized Oil, A?, 20 cc lana Doxt~-sn lejection, US?, 10 cc *iochlornydnxyquin, US?, 1/4 lb ~tC.4 Grs2; Classification of Defects Classification of Defects ClassificatIon of Defects Color and Clarity of Solutions PAGENO="0181" Classification of Defects Leakage Test Classification of Defects Hardness. Limits Color of solution, limits for chloride and sulfate, and Percent of Furosemide breakdown for active ingredient Aids in maintaining suspension and ease - of resuspension. See Explanatory Notes. To asspre greater stability over the shelf lIfe of the item. Not included in DSP monograph. See Explanatory Notes. To assure that the tubes of ointment do not leak. To preclude possibility of use of super- potent material. No upper assay limit given in regulations. To assure that tubes of. ointment do ~ot leak. To allow less time to assure the tablets are disintegrated faster and thus release the active ingredient sooner. See Explanatory Notes. See Explanatory Notes. To assure that impurities are detected that may arise from production procedures, or from changes in sources of materials, or. in the processing of the item. The presence of these impurities is incon- sistent with good manufacturing practices. S N. Kaolin Mixture with Pectin, NF, I gal (378 liters) Kaolin Seive Size Li 3orathc Ointment, DSP, 5's, 35 Gram~ Color Limits pH Limits 01 n~ment, lISP, 500 Units Upper Assay Limit per Gram, 1/2 at (14.2 Grasis) 12s Leakage Test Furosemide Tablets, lISP, 40 ag, lOOs Disintegration LTJ `.3 PAGENO="0182" LINk Class ificution of Defects See Explenatoy'~ Noses, - - - F.:. II - :J - tI-J :e;-ae be lea- of lohlsts In nre~- to differentiate tahlets uakcn 0 F in Logieeing af cycle with those to ha 0 taken toward end of dosage cycle. I ~ C vS 0'- o~ oe e~. S e xp1e Story ho es Oc::::2len:.~ Iab~cts. DSP; Clessificatien of Defects See Explanatory Notes. Palatability See Explanatory Notes. Loss on Drying To assure the stshility of the product, an thst excessive moisture may cause deterioration. Accelerated Acing Test (Stability) See Exolanstory Notes. - 0 w -:-i~olazie is'i'acI-lucido teoleas, -I:. IS mg, - S - height Variation - As an added check to assure proper nanu- Iccaure of this tablet which consists of a core which is then costed wita dry ingre- dients and coapressed. :Ciaeaaficaticn cf Defects ace Explanatery Notes. 0 F tO SO ~3Svccanrte - Llaata for °ereign Substances (Arsenic) for : To assure that Impurities ste detected thct a a o, LI, II. 33 cc Active lnercdient cay arise free ecoduction procedures, or from cheages in sources of materials, or in the processing of the item. The presance - of these impurities is inconsistent with goed manufacturing practices. `~1 PAGENO="0183" tPDtti (iNtL IEO1iIPJNLNI A ph sang.c is not given in NP, thea a range is specified to assure grearar s-a-- - btiity ever the shelf life of the iCes. Bacteria limits to control the arouse oc viable microorganisms and to prohibit those organisms that should not be present in thu predict. This assures that undesirable con- tamination is not present in the product. Leakase Test To assure thai the tubes of cream do not leak. Weight of Purpoaitery To assure uniformity in weights of sup- - aositories. Not included in NP innoegreoh. Drip point and melting time for suppositorieai To assure that the suppositories are erie with a base which will melt within a specified tisie frase to release its medaca- nent. No such requirement exists in the compendia. pa ligits To assure greater stability over the shelf life of the item. Not included in NP monograph. Lcdnaaa Emits See lx lanotory Coses. n~e ub tr ~ ~`-~ Ye S ~ ~ ~ ~ .~rri ~s sr e for Acohve Ingredient may arise froo production procedures, or ft-ac changes in seurces of materials, or in processing of the itani. The presence of lh.sc impurities is inconsistent with good manumancturing practices. - ci:-:- aeon: ,al:atens.u NP. oh to 5 os basanotasa-rie. s-st-non ":iorcie Crams, NP. Nicrobial Lnmits a ~-ls-st to Dli of ietanclhasone, -L -~; p1 Suimositories, NP, II' ag, nueshal- - Pa ls:ncs (Plasm, US?, lab-lets, DSP, iSl:ssification of Defects See Explanatory Notes. PAGENO="0184" :~L~:ln~iu Sulfate lnjection~ liSP, 1 c, i2s ~1ccma Tincture, liSP, 1 Pt Classification of Defects Leakage Test for Ampuls *CQIOr Limits Free from sediment Leakase Test for Ampule Classification of Defects ~oiubi1ity Time ,Limit Autoclave Test See Explanatory Notes. See Explanatory Notes, See Explanatory Notes. To assure the best production procedures and controls are utilized condistent with good manufacturing practice. See. Explanatory Notes. See Explanatory Notes. See Explanatory Notes. To assure the suitability of the product to withstand autoclaving. See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. DDITiOHAc P~ill0Si~TS iy~Lroe1ioride Color Linits ic~ccuc~, uSP, 50 per cc, 10 cc Classification of Defects ~ oda~ Hydrochloride ~ ion. 331, 10 ag per cc, 10 cc SIHNi P See Explanatory Notes. See Explanatory Notes. lflO Hydrochto~ide~ Searile, ISP. 510 mg, 10a !lpnethin~ Sulfate Injection, ISP, icc, l2s I. C C 0 ITJ t,TJ 0 w ITJ C12 L~laasification of Defects ~eakage Test for Ampule Color Lialts PAGENO="0185" Classification of Defects ~iaximum dnrefrigeraeed shipping times for items requiring refrigerated storage No albumin or fibrinogen shall be permitted the finished product. S~e Explanatory Notes. See Explanatory Notes. miTe assure that impurities are detected that may arise from production procedures, or froa changes in sources of materials, or in toe processing of the item. The preaencs of these impurities is inconsistent with good manufacturing practices. To avoid unwanted blood specific substances which are present in placental bloOd. To assure that impurities are detected that nay arise from production proceduoes, or from changes in sources of materials, or ~in the processing of the item. The preiencc of these impurities is inconsistent with good manufacturing practices. See Ex~lsnstory Notes. ~See Explanatory Notes. See Explanatory Notes.. See Explanatory Notes. gi~y ~ ~;;CDi'd C co.; T5OiCt5; iSP, 5.5 Gra:n, Ci~ssificatiop of Defects See Explanatory Notes. c'. ml a a ra'~l~ C s ~ on o~ Dc t S~ ExpU"atory Notes Serum, liSP, (human), Derived from Venous Blood Only Clear and Free of Turbidity, Sediment, and Particulate Matter C.~rosa soc Sodium Chloride Injection, Classification of Defects 5% Dextooso in 5.5i Solution of ~.m Chla';du, Cu, Cs Chloriuc Injoctien, liP, S cc, Classification of Defects Lcskage Test for Aspuls Color Limits 0 PAGENO="0186" 0 Ciass~fication of Defects See Explanatory Notes. Mcxiae:r Unrefrigerated Shiuping Time for Items~ See Explanatory Notes. - ?e~uiring Refrigerated Sto cage - Venous Blood Origin To avoid unwanted blood specific substances which are present in placental blood. Shall be clear and free from Turbidity, Sedi- To assure that impurities are detected that sent, and Particulate Matter may arise from production procedures, or from changes in sources of materials, or is the processing of the item. The presence of these impurities is inconsistent with good manufacturing practices. Shall not Contain Albumin or Fibrinogen To assure that impurities are detected that may arise from production procedures, or from changes in sources of materials, or in Ithe processing of the item. The presence of these impurities is inconsistent with * good manufacturing practices. Classification of Defects See Explanatory Notes. Tetanus, lrxsune, US?, Ph Pt *Uiection, USP, So.:i~:t Chlcr~ - Inlection, US?, ChlziL-; lojection, US?, - cc, ~ -cr for Ifijectiun, Sterile, US?, 5c,25s * f~- 1nctioe Sans-iso, US?, ~ Sterile, US? Classification of Defects Color lisits Leakage Tes~ for Ampuls Classification of Defects Color Limits I. 0 I. 0 0 C0l~riJe Soletion, US?, 0.9%, Color LImits ic Sterility and Pyrogenicity 0. U~:oiccaae ln;ection, US?. bassification of Defects ~See Explanatory Notes. tSee Explanatory Notes. See Explanatory Notes. See Explanatory Notes. ~See Explanatory Notes. See Explanatory Notes. To assure proper requirements for a solu- tion used as irrigating fluid. ~See Explanatory Notes. PAGENO="0187" * a at ~onr *ia.~ tees Suseensian, C.Cs:.Mu~:cc, Sec Classification of Defects leakage Test for Aisputs Classification cf Defects L:sdts for Stabilizer (if used) fee:- Limits Meisture Ciassificaticri of Defects Cocr liuits Free of Sedisent Sea Exnianatory Notes. * bce Explanstcry Notes. To present heeclysis of red blood cells at site oil injection. * See Explanatory Notes. `To essay the peeper quantity of stabilizer. See Explsnstcry Notes. To assure the stability of the product. See Explanatory Notes. See Explanslery ides. See Expisestory Ne3ss. See End snatnry Fates. `In assure best production arocedutes end *ccntfols are ttilitcd consistent with good s:cufacroa Inc nrtctices. ilo assure that inpurlties are detected that may arise face croduction procedures. or frois changes in sources of materials, or in the processing of the item. The prekerce ~ these impurities is incensisteet wath `Iced nanufacturirg practices. 5: IfIf - i:;iiii::a ShY' r,~,Y 1 ________ -. - - cc: SC: icjcetian, YiP, 5Db, SD cc, flea sificatiuc of Defects `See Expls:ctory Notes. Lakage Test for kzpuls See Explanatory Notes Cater Linits See Expianator': Notes. ncjacticn. tSP, Si, IniDd cc, Classification of Defects See Exelecetery Fetes. icieccicn, NP) 1PM tag it: : - ci : i scala::, tiasslaicetice of Defects laciness -tar - C ayc-nshl.: rile Injection, I nt (473 cc) C) tTJ 0 w Lxi (12 Lxi ci C) ci (11 0 I. 0 ACres tttsor PAGENO="0188" Classification of Defects Classification of Defects Leakage Test for Ampuls Color Limits Autoclave Test Classification of Defects Color Limits Color Limits Isotqnic Leakage Test for Ainpuls f~raxolidone and Nifuroxime Melting Time for Suppositories ~u~oositories, NP, laginal, 24s See Explanatory Notes. -~ See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. To assure the suitability of the product, * to withstand autociaving. See Explanatory Notes. See Explanatory Notes. * See Explanatory Notes. To prevent hemolysis of red blood cells at the site of injection. See Explanatory Notes. To assure that the suppositories are made with a base which will melt wi\thin a* specified time frame to release it~ medicament. No such requirement exiits in the compendia. To assure the suppositories do~ not leak from container. * See Explanatory Notes. * See Explanatory Notes. * *I.See Explanatory Notes. See Explanatory Notes. ~lhocarbaro1 Tablets, NF, 0.5 Gram,. ~oso lojection, iSP, 10%, 3 cc,,~ N~t~rio el Bitertrace Injection, lISP, S~juisalent to 10 eq of Metara- 10 cc ~~~aiee ~yirochlorj Is injection, eSP. 1%, 2 cc. 12s Leakage Teat 2rcdei~one Tablets, DSP, S mg, l000s Classification of Defects ~thyltestostes'onc Tablets, NP, 10 mg, Classification of Defects Mecbvpryior. Capsules, NF, 0.3 Grain, Classification of Defects SOds 2en~drire Sulfate Caps~c1es, USP, Classification of Defects rug, Suds 1~ 0 0 t~Ti 0 (12 PAGENO="0189" Tcio~!yd.~oxyquin and Hydrocor- Microbial Limit To control the amount of viable mic~o- C~as, ~iF, withl~ lUcronized organisms and to prohibit those organisg~s flydroeoa-e~sone, I oz (2835 Grams) that should not be present in the p2oductL . This assures that undesirable contamination is pot present in the product. Accelerated Aging (Stability) See Explanatory Notes.. Antipyrine and Benzocaine Solution, Classification of Defects See Explanatory Notes. 0 33 cc Moisture Limit (NMT 0.2% moisture at time of To assure the stability of the product, in delivery to the.Governmett) that excessive moisture may cause deter- ioration. -- dydro~yzine Hydrochloride Syrup, NF,~ Tighter Assay -Limits To assure a tighter manufacturing control. 2 sg per cc~ I pt (473 cc) Taste/Palatability Panel See Explanatory Notes. iiydraxrina Hydrochloride Injection,; Classification of Defects See Explanatory Notes. N7~ SO ag p~' cc, 10 cc pH Limits . A tighter pH range is specified in order to o assure greater stability over the shelf lii' W of the item. Color Limits See Explantory Notes. L~ctose, DSP, 1 lb (453.6 Gm) Particle Size Limits for the Powder To assure better incorporation of the lactose when mixed with other ingredients. LemoC Oil, DSP, I £1 oz (29~S cc) Free from Sediment - To assure that impurities are detected that * : - S - - .- may arise from production procedures, or from changes in sources of materials, or in the processing of the item. The presence of these impurities is inconsistert, with good manufacturing -practices. Nikethamide Injection, NF; 25%, Classification of Defects -. See Explanatory Notes. - 4-1/2 cc, Ss - Color- Limits :, See-Explanatory Notes. Leakage -Test for Ampuls See Explanatory Notes.~ IS - - .5 5--. 5. S S - ~- - - - - - 0 - - I - S -- - S . 0 - -- PAGENO="0190" Soc Explanatory Notes. - See Explanatory Notoa. - To prevent `gersolysix of red blood cells at the site of the injection. See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. * See Explanatory Notes. Sea Explanatory Notes * See Explanatory Notes. To assure the stability of the product; in that excessive moisture may cause deterior- ation. See Explanatory Notes. Sea Explanatory Notes. See Explanatory Notes. CFR does not xpecifically requtre compliancc * with weiEht variation for this item. Cur - requirescot assures uniform weight within limits sod thus proper and uniform dosage. See Explknatory Notes. ct~ cc ci illtarcrvco inlc-ctien, Classification of Dafecta 2. * ca, ICe Leakage Text for Aaipu1s -c ~-tc-- -c. ch-ylx-clfaro Icieccion, CasxiP4acctien of Defeats 12Cc, 10 aa Color Lieitx ccth-lsuifaca Injection, Classification of Defects -22 &~ 1 aa lIe Color Liattx Leakage Test for Arapuls cc cceio Tolcac. icIP, 53 .~, bOa Classification of Defeats Ccoxyzlne Hyleoccclocide Tob'.ots, Classification of Defects 0 ,g~ cli's Hardness Limits - c'c'xyzsne si-'.c'u-chlora,.lc Tablets, cl, 25 mg, SCOs 3- caxyrino Pa-c-ccclc. lopelos, "5, Classifiaarcion of Defeats `cvalcot- cc 2o ot~ tclro'c,'ri.nv Moisture Liait. c'oahloti'o 52-s `1 rx, N1~, SI ;s-~, 1001's Cleecifiastian of Defeats 1:-I Ccc cccl Classification of Defeats S c. 1-Cc; - Color Liaits Scac. --cIa iCccachl~r*-lo Capsules, Weight Variation DSP, ccc iv:: coca to C SO Crest of I Classification of Defeats C I. C C) PAGENO="0191" To assure that impurities are detected that may arise from productj~n orecedures, or from chsnqes in sources of materials, or in the processine of the item. Toe presence of those irouritios is inconsistent with good a. nufacturjnn practices. To dntoct and I imdt cotential cercinec~njc nalyneclear hydrocarbons. Soc Explanatory dotes. To. assure that impurities cr0 detected thrt sac arise from production orocefuros, or frosi change; in sources of materials, or in. the nrocscsinn of the itt's. The arasenco of these Impurities is Inconsistert sntn 0000 oanufactursne, nract~cos. See Explanatory dotes See Explanatory dotes See Explanatory Notes inopnaejne Ilyorohlorhde Tablets, Classification of Oefects See Explanatory Notes. 10Cc hiT. dSP, I qt (945 cc) Shall ha free Icon v5sihle water, uSC. I cci (3.73 liters) paraicalate ratter & sodieent. o 25; niediene ~e,cct~on. `Sp, 10 eq. oO,bs loutacce islets, dSP, 100 ar, ;;y~'lbuts;eec aelets, dSP, 1011 519, Shell he testes' he a'd shall comply ruth t.nooe:hoo A agecilicasiors of come; rf the Associeticu cf Official `nalyticsl Chruists. Clessiriratlen 01 Uciacts IC Ideutification of Raw isterial Leakage Test for Ampuis Classification of Defects Accelerated Aging Test PAGENO="0192" ThPDiTW~\L ;t~iRGPENTS SNi~C.~CF ~.t~ycin Sulfate, ~USP, ivalet to I Grant of StrepLomycinj Gene Coceirun Elixir, PotassL: Pericillin Sterile USP, 2O~UO;GUO iJ;tits 1 Sodium *~thjcji1in for Injection, ~.SP I Iram Classification of Defects Solubility Time limit tieight Variation Classification of Defects Classification of Defects CoI~,r limits Weiqht Variation Solubility Time Limit Ciansificetion of Defects Solubility Time Limit ~icight Variation See Explanatory Notes See Expl~ratory Notes The USP and Code of Federal Regulations do not specifically require compliance with weight variation limits.. Our require- ient assures a uniform quantity within limits, and thus, proper and uniform dosage. To assure that impurities are detected that nay arise from production procedures, or from changes in sources of materials, or in the processing of the item. The presence of these impurities is inconsistent withgood manufacturing oractices. See ~xplanatory Notes Sc-a Explanatory Notes See Explanatory Notes The USP monoqraph:and CFR does not specifically require compliance with content uniformity for this item. Our requirement assures uniform quantity within limits and the proper ahd uniform dosage, See Explanatory Notes See Explanatery Notes See Explanatory Notes The USP monograph and CFR does not specifically require compliance with content uniformity for this item. Our requirement assi~r~s uniform quantity within limits and the propem and uniform dosage. Free from sediment - I. I. 0 PAGENO="0193" Sodtt Socci-ieto, to :1st lprssloL~oloos Ci aosstsoarooo of Jofecta rasutiacy Tine Lilt Coatcut uoi foroity Sea Explanatory Notes. See Ixplomotory Notes. See Explanotory Notes. The TIP Monograph does not apecificatly require com~iiance with content uniform- ity for this item. Our requirement assures uniform quantity within limits and thus proper and uniform dosage. `:1 colecco 3oficn Scccocmatc I ;.uIclo;edccsut:eco - 1:1cc ~ dir scocinate lprc1cicotooe Claaatficatson of Defects Coior limits Sotubility timo Limit Content uaiformity See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. The NE Nonograph does not specifically require compliance with content uniform- ity for thie item. Our requirement assures uniform quantity within limits and thus proper and uniform dosage. cdftm - lerna cL scjeetion, lISP, Classification Deferts 5 og pot cc, NC tt os Loakaqe Teat for anpuls Color limits Totoroit :i:sil f~ toe lmjnctioc, C'nesification of Defects Isp, ,( C hlem Solubilfly Time Limit Co:m-sie.c irdeillin C for Injection, Cotot limits N Orals Toight Variation See Explanatory Notes. See ExplanntOry Notes. See Explanatory ilotea. See Explanatory Notes. - See Cxplmnatory Notes. Sea Explanatory Notes. The tSP oonoccraph ano CFR does not specifically require compliance with coolant uniformity for this item. Our requirement assures uniform quantity within limits and proper and uniform dosage. PAGENO="0194" 10168 COMPETITrVE PROBLEMS IN THE DRUG INDUSTRY OCTOBER 1973 issue of CALIFORNIA PHARMACIST SOME MANUFACTURERS Retain for future reference DISCLOSE SOURCES OF SUPPLY The last issue of theCalifornia Pharmacist (September, 1973, page 5) reported the implementation of regulations which reqelrepharmaceu- tical manufacturers to disclose the name and place of business of the manufacturer who produces the finished dosage form of thnir prsdscts. The regulation, effective July 28, 1973, provides that manufacturers musteither includethe names of the mixer sf the final ingredients and the encapsulator ortabulator inthe product's labeling and advertising mater- ial; or provide this information in response to the written or oral request of any physician, pharmacist, or their professional associations. In an effort to supply information to the profession, the California Pharmaceutical Association requested the identity of the manufacturer who mised the final ingredients and encapsulated ortableted the finished dosage formo of products manufacturered or distributed by over fifty different companies. The results of these requests, mailed on the 15th and 16th of August, are compiled in the following table. At the time of publication, over one month past the date of writing to the manutaclur- DISTRIBUTOR DATE MANUFACTURER' REPLiED ers, many firms have not complied with the Association's request for information. Under the provisions of these regulations (Section 10386 of Title 17 of the Ca(ifsrniaAdministrative Code), failsre to respond to requests forthe identityof themanufaclorerof the finished dosage form shall result in the products of the firm failing to respond being deemed misbranded. Those companies who have not responded to the Association's requests are being sent a final notice which will preceed the inot)tslion of legal proceedings against nov-complying firms. Pharmacists who have not been provided information as to the identity of the manufacturer of any prescription drug as provided loris California law, should notify the CPhA offices so that appropriate action may be taken. The following list indicates the replies received at this office as of October 1,1973. "Acknowledged request" indicates thatthe distributor has advised CPhA of the receipt of the request but has not supplied the name of the mansfacturer of the final dosage form prior to press time. DISTRIBUTOR DATE MANUFACTURER1 REPLIED AMPICILLIN TRIIOYDRATE 250 m~ Capsules American Pharmaceutical Ce. No Reply American Quinine Products Zenith Labs., Inc. (Nerthvale, NJ) B. F. Ascher & Cs,, Inc. International Labs., Inc.2 (Mayagaez, Punvo Rico) Ayerst Laboratories Beecham-Massengill Pharm.' IPincataway, NJ) Beecham-Massengill Pharm. Beecham, Inc. Bristol Laboratories, Div. Bristol Labs. of Bristol-Myers Co. (E. Syracuse, NY) coastal Pharmaceutical Co. No Reply Columbia Medical Company yiocrah Labs. (C. Paterson, NJ) Cnnsolidated Midland Corp. Reid Provident ur Zenith Labs., Inc. SN Pharmaceuticals, Inc. No Reply Strong Cobb Amer Parke, Davis & Company Replied" Parepac Pharmaceutical Co. Ne Reply Rachelle Laboratories, Inc. International Labs.' (Atlanta, GA) Sherty Pharm. Co., Inc. Ho Reply Smith Kline & Prench, Labs. No Reply C. R. Squibb & Sons, inc. C. R. Squibb & Sons, Inc. Stayoor Corporation International Labs. (Atlanta, GA) Iowoe, Paulsen & Co., Inc.. international Labo. Atlanta, GA) JohnS. Capanos & Cs., Inc. (Baltimore, MD) Biacraft Labs. (C. Paterson, NJ) West-ward, Inc. No Reply Wolino Pharmacal Corp. Bincraft Labs. OCTOBER, 1073 AMPICILLIN ANNY800LIS Wyeth Laboratories BFIOPHENIRAM1NE MALEATE -Elixir (Dimotane) A. H. Robins Company -Sustained Retoaso lablelo )Dlmelaoo Exluntabs) A. H. Robins Company , ICN Pharmaceuticals 8-27-73 Strong Cobb Amer Cincinnati, OH) 82173 -Sautuleeil Release Tableto with phenylephrine and pbenyfpropanolamine (Dlmelapp Esteotabo) A. H. Robins Company ICN Pharmaceuticals 0-27-73 9-19-73 Strung Cobb Amer (Cincinnati, Off) 8-24-73 DEXAMEThASONE 0,75 mg Tablets CIBA Pharmaceutical Cs, No Reply Consolidated Midland Corp. Danbury Pharmacat' or 0.31-73 Cord Laboratories 8-20-73 Merck Sharp & Dohmn acknowloolgod request Div. of Merck & Co., Inc. 8-27-73 Organon, Inc. Oroanon. Inc. Schering Corp. Schoring Corp. Sherry Pharm. Co., Inc. No Rpply USV Pharmaceutical Corp. IJSV Pharmaceutical Corp. Zenith Laboratories, Inc. Zenith Labs., Inc. )Nodhvale, NJ)~ 9-06-73 (Continued on page 8) 0-29-73 9-07-73 9-05'73 9-27-73 0-29-73 Wyeth Labs. Philadelphia, PA) A. H. Robins Company Richmond, VA) 0-24-73 0-27-73 0-21 -73 8-20-73 8-23-73 9-18-73 0-31 -73 0-20-73 PAGENO="0195" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10169 (Continued from page 7) DISTRIBUTOR MANUFACTURER1 DATE REPLIED DISTRIBUTOR DATE MANUFACTURER1 REPLIED DONNATAL Tablets A. H. Robins Company A. H. Robins Company (Richmond, VA) ERYTHROMYCIN STEARATE 250 mg Tablets Abbott Laboratories Abbott Labs.6 American Quinine Products Zenith Labs., Inc. (Northvate, NJ) Bristol Laboratories, Div. Bristol Laboratories of Bristor-Myers Company (E. Syracuse, NY) Columbia Medical Company Zenith Labs., Inc. (Nodhvale, NJ) Mallinckrodt Pharmaceuticals No Reply Parke, Davis & Company Replied3 Sherry Pharm. Co., Inc. No Reply Smith Kline & Prench Labs. No Reply Towne, Paulsen & Co., Inc. Mylan Pharmaceuticals )MorVantown, WV) West-ward, Inc. No Reply Wyeth Laboratories Mylan Pharmaceuticals7 )Morgantown, WV) Zenith Laboratories, Inc. Zenith Labs., Inc,6 )Northva)e, NJ) HYDROCHLOROTIIIAZIDE 50 mg Tablets Geigy Pharmaceuticals No Reply Div. of Ciba-Geigy Corp. Merck Sharp & Dohme acknowledged request Div. 01 Merck & Co., Inc. Wo)ina Pharmacat Corp. Zenith Labs , Inc. L-DOPA 250 me Capouleo Eaton Laboratories, Div. Eaton Laboratories. Inc. Morton-Norwich Products, (Norwich, NY) Inc. Roche Laboratories, Div. Roche Laboratories Hoyfmann-LaRoche, Inc. )Nuttey, NJ) MEPROBAMATE 200 & 40B me Tablets 8-27-73 American Pharmaceutical Co. No Reply American Quinine Products Zenith Labs., Inc. )Northvalt, NJ) Barr Labs., Inc. )Nnrthvale, NJ) Zenith Labs., Inc. No Reply No Reply No Reply Rep lied 13 No Reply Richlyn Labs , Inc Philadelphia, PA) No Reply. No Reply No Reply 9-19-73 Zenith Labs., Inc. )Northvale, NJ) Towne, Paulsen & Co~. Inc B-29-73 (Monrovia, CA) Wallace Pharmaceuticals Cader-Wallace, Inc. Div. of CarTer-Wallace, Inc. )Cranbury, NJ) 8-24-73 Wolins Pharmaca) Corp.8 Heather Drug Co. Inc. Wyeth Laboratories Wyeth Labs. 8-20-73 (Philadelphia, PAl Zenith Laboratories, Inc. Zenith Labs., Inc.° )Nodhvale, NJ) PREDNISONE 5 mg Tableto American Pharmaceutical Co. No Reply Barr Laboratories, Inc. Barr Labs., Inc. (Nudhvale, NI) Columbia Medical Cv. Blue Cross Products (Brooklyn, NY) First Texas Pharm., Inc Pirot Texas Pharm.. Inc (Dallas, TV) ICN Phanmaceuticalt., Inc. No Reply Strong Cobb Arni'r Kirkman Laboratories No Reply McKesson Laboratories, Div. No Reply Foremost-McKesson, Inc. ERYTHROMYCIN BASE 250 mg Tablets Eli Lilly & Company Eli Lilly & Company (Indianapolis. IN) The Upjshn Company The Upjohn Company 8-30-73 8-130-73 0-24-73 0-29-73 8-29-73 9-05-73 Barr Laboratories, Inc. Columbia Medical Co. ICN Pharnraceuticals, Inc Strong Cobb Amer Kirkman Laboratories0 McKesson Laboratories, Div. Foremost-McKesson, Inc Parke, Davis & Company Purepac Pharmaceutical Co Aichlyn Laboratories, Inc.8 Sliniry Pharm. Co., Inc. Stanlabs, Inc. Smith Kline & Prench Labs. Stayner Corp. Towno, Paulsen & Co., Inc. 0-29-71 8-20-7" 9-05 91977 9-05-73 8.20 . 3 8-27 `3 8-20-73 9.06 .7 82473 8-20 `1 9 3.' 0.2' 73 8-27-7 3 0-29i3 6-27 7. 8. 20-73 9-UI 73 8 23 73 ENFLURAMINE 20 me Tableto A. H. Robins Company A. H. eotoins Company 8-27-73 (Richmond, VA) PENICILLIN R POTASSIUM 250 mg Tablets ICN Pharmaceoticals, Inc. No Reply GLYCERYL GUAIACOLATE Syrop Strong Cobb Amer A H Robins Company A H Robins Company 8-27-73 Lederle Laboratories, Div. Ledarle Laboratories (Richmond, VA) ot American Cyanamid Company Eli Lilly & Company Eli Lilly & Company8 HEPARIN SODIUM 1000 Ueltt)cc Injectlse Indianapolis, IN) Abbott Laboratories Abbott Laboratories6 8-24-73 A. H. Robins Company Biocraft Laboratories Century Pharmaceuticols, Inc. Medwick Laboratories, Inc 8-29-73 )E. Paterson, NJ) (Chicago, IL) Robinson Laboratory, Inc. No Reply Consolidated Midland Corp. Elkins-Sinn or 8-27-73 Sherry Pharm. Co., Inc. No Reply Medical Chemicals4 E. R. Squibb & Sons, Inc. E. R. Squibb & Sons, Inc. Eli Lilly & Company Eli Lilly & Company 8-30-73 Towne, Paulsen & Co., Inc. Mylan Pharmaceuticals Inc. (Indianapolis, IN) )Morgontown, WV) Medwick Laboratories, Inc. No Reply John D. Copanos & Co., Inc. OrBanon, Inc. Organon, Inc. 0.27-73 (Boltimoro, MD) Parke, Davis & Company Replied13 9-19-73 West-ward, Inc. No Reply Robinson LaboratorIes, Inc Ne Reply McKesson Laboratories, Div. No Reply Towne, Paulsen & Co., Inc. Medwick Laboratories, Inc. 0-27-73 Foremost-McKesson, Inc. (Molmoso Park, IL) Pfizer Laboratories, Div. No Reply The Upjohn Company The Upjohn Company 0-30-73 Pfizer, Inc. Wyeth Laboratories Wyeth Laboratories 8-24-73 Purepac Pharmaceutical Co. No Reply (Philadelphia, PA) 8-20-73 9-06-73 8-23-73 8-21-73 CALIFORNIA PHARMACIS1 PAGENO="0196" - To assure that i,souritics ~re iatoctar `that nay arise from pro fiction p~'oce°ures, or from char-nes in socirccs of materials, or in the prrc~ssinq of the item. The oresenco of thoso imourities is ioconsistont with goon manufacturina practices. See Explanatory Notes Classification of Gefecto See Exolanstcrc~ Notes Color. liocits See Explanatory liotos See Explanatory Notcs `Sa/ 2 cx uorrtrccrasorJ snipping times foe Exolanatory ilotos for ifeocs rcquirinq roirigoratoS storano. This is a skin cost and tho dye shows tfo piscoo..nt of the ccstA~iaS. Sea Explanotory Notes Soo Explanatory flotes Sao Exolanatnrv liotos Sac Explanatory Notes A2-01TIo~yj. 0.43: 321% Color Classification of Dofccta 4. 5 30 ~:- hcl - c (C-to cc) I ~t (95 cc) so Livo, 2. :1% 3, 13 do-sos -rS:soec:;.:, ive,ur, Sn:: soc-s ), 2 Sic. .3, 00 -coos ::o.,:sc000 Sc-:.-: .r:ccsc:nstr Oct13 -, iSP, Ec:i-alsr; to 5) ok Proonirol on-.: Phosr-%-s tanitol injectico, lISP, 15%, 150 itoOiasaiifl, LSP~ 0.21 cc ?-otaeine SIfata injoction, 5P, 4 ogparco, C-cc, Cs cc,! Classification of Sofocts I, 0 I. 1' 0 C) a Clascification of Pefects Coicr lisits Laaka-o Tcsc. for [ipuls Sax .Ircfricara55c5 Shicpina tioos for i Coos ros.irinq rofrigoratod storogo. PAGENO="0197" or s~joct4ar, LIP. .0~ L~jcrt~o;i, Classification of Deferts Solubility Timo Limit Coon Liaise Weight Variation See Explenatory Notes See Explanatory Notes See Exolanatory Notes The US~ mononreph & CFR (10 not specifically require compliance with content uniforoity fqr this item.. Our requirements assure uniform quantity within limits & thus proper uniform dosage. C) 0 It In S H tn It 0 w CI) ilerThin TaOThts, 252 5 my, Sooiie Warfanir Tablats, J52, 2 oq, Shell be Endo Lehoratoslee "Coumedin" Profeeeionel requiiement. S(anmous Fi~coHa. 22, 120 D~oo Limits for foreign. substances (Iron, Nickel, Copper, Lead, and At-senic) To assure that impurities are dotocted that may arise from nrohuction proceduras or from channos in sources of materials, or in the production procedures, or from chanqes in sources of materials, or in the processing of the item. The presenco of these impurities is inconsistent with good manufacturing practices. ~d'ocluri a daly, USP, : Classification of Defects Visoosity Lea:caqe Test * See Explanatory Notes The 0S2 monorrs~h does not require comolience mite viscosity, yet this characteristic is necessary for the proper consistency to allow for the snrasding A application of the jelly. To assure the containers of jelly do not leak. PAGENO="0198" 10164 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY dispensed in the United States. The pharmacist's interest stems primarily from the fact that the pharmacist knows how important the medication is to the patient and the pharmacist has to look the patient or a member of his family in the eye. The pharmacist has no vested economic self-interest in the price the manufacturer charges for his drug products because the pharmaceutical service system provides that the pharmacist be reimbursed what the phar- macist pays for the drug product. On the other hand, the pharmacist does have an obvious professional objective in providing patients with effective and safe medication at reasonable prices. No subject investigated by your subcommittee in the almost 7 years of your extensive work is, from the pharmacist and patient point of view, more important than the hearings you are now hold- ing. More than two billion prescriptions are being dispensed annu- ally-more than five million daily-and the patients who take these prescriptions have a right to expect their government to resolve the question of how much confidence can be placed in the medicines their pharmacists dispense. APhA as the national professional society for all pharmacists has no ax to grind for anybody, but the patient and his pharmacist. The pharmacist does not care whether a drug product is made and mar- keted by a large firm or a small firm, as long as the pharmacist can be assured of the product's safety and efficacy. APhA knows that high quality prescription drugs can be and are fabricated by manu- facturers of all sizes. APhA also knows that the hallmark of quality is not derived by giving a product a euphonious brana name. And we have watched with interest the development of so-called "branded generics" by such fine firms as Lilly, Lederle, SKF and Upjohn. Simply stated, the situation in our country today is that one agency of the Federal Government says that you can depend on the quality of the Nation's drug supply, and another agency of the same Gov- ernment would like you to believe otherwise. Regardless of how this controversy is resolved, APhA is sick and tired of having the finest drug supply in the world under a constant cloud of suspicion. It was bad enough when only the pharmacist was the target of this propaganda, but now prescribers and patients are asking the phar- macist for assurance. APhA believes the country can ill afford further delay in putting the issue to rest. Thank you, Mr. Chairman. I will be glad to answer questions now or after Dr. Feldmann submits his testimony. Senator NELSON. Well, when you refer to "another agency~ of the same government," you are referring to the Defense Department? Dr. APPLE. Mr. Chairman, I am saying that HEW-the Food and Drug Administration-says the drug supply is good, and the Department of Defense has been casting clouds over the Nation's drug supply for the last several years with statements made by some of their spokesmen. Senator NELSON. Well, the same thing is true, is it not, of the Pharmaceutical Manufacturers Association in respect to generics? PAGENO="0199" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10165 In other words, they repeatedly said, sometimes subtly, more fre- quently not so subtly, that you can only trust the big brand name companies, of which most all of them are members of the PMA, is that not so? Dr. APPLE. I would certainly have to agree that that is the thrust of their propaganda. Senator NELSON. I thought it was interesting. You say that the APhA "also knows that the hallmark of quality is not derived by giving a drug product a euphonious trade name, and we have watched with interest the development of so-called `branded generics' by such fine firms as Lilly, Lederle, SKF and Upjohn." I found interesting a recent report from the FDC reports-f r& quently called the Pink Sheet-of July 16, 1973, which states that: Squibb, Pfizer and Wyeth have recently joined SKF, Robins and Parke- Davis as purchasers of antibiotics and other generic dosage forms from Mylan a private formula manufacturer in Morgantown, West Virginia. Mylan's private formula sales to major drug manufacturers jumped to $4,800,000 in fiscal year 1973 ending March 31 from $2,200.000 a year earlier. Emerging as Mylan's top major pharmaceutical marketing customer in fiscal year 1973, Squibb purchased $1.3 million erythromycin in the first year it bought anything from the Morgantown private formula manufacturer. Mylan is sole supplier for Squibbs' erythromycin. introduced in 1972. A Squibb spokesman said the company decided to use Mylan rather than processing erythromycin itself because of the "difficult technology involved." Mylan is one of the few companies capable of making the product, the Squibb spokesman said. Well, I think that is rather interesting, since their own associa- tion keeps attacking the generics as not being of the same quality as the trade name products. And here you have Squibb saying that this little company which hardly anybody has heard of has the difficult technology to master this, and I think we ought to lay to rest this propaganda campaign that the Pharmaceutical Manufac- turers Association and the DOD have been carrying on. Dr. APPLE. Mr. Chairman, if I could comment on that. We tried to lay that issue to rest. Our association has a policy encouraging legislation that would reveal the actual identity of the fabricator of the dosage form on the label, as well as the identity of the dis- tributor. That legislation has been enacted in the State of Cali- fornia and more recently in the State of Kentucky. There is an effort by the Pharmaceutical Manufacturers Associa- tion now in California to have that legislation amended, and I regret to say that it has already passed one House of the California legislature. For the record, I can give you the information that California was able to gather under prevailing regulations of this so-called "Crown Statute." And I would particularly like to call to your attention an editorial which appeared in the November 1973 California Pharmacist, in which the editor asked, "It is difficult to understand why the drug industry is fearful of having the pharmacist and physician know who really makes their drug products. PMA consistently maligns small manufacturers by suggesting their products may not be of adequate quality. Yet, they are attempting to deny the pharmacist the informa- PAGENO="0200" Cr.ClycoI , ND?, I lb Dr~i~) Maximum unrefrigerated chipping times for items requiring refrigerated storage. Classification of Defects Moisture Claceification of Defects Leakcge Tear for Ampuls ClassIfication of Defects Maximum unrefrigerated ihipping Times for items Requiring Refrigerated Storage See Explanatory Notes: See Explanatory Notes. To assure the stability of the product, in the excessive moisture may cause deterioration. To assure that impurities are detected that may arise from production procedures, or from chances in sources of mate~ials, or in the processing of the item. The presence of these impurities is incon- sistent with good manufacturing practices. To assure best production procedures and controls are utilized consistent with good manufacturing practices. See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. Classification of Defects ~rurN rn:' ~r, DD?1jD?D :1mM N: Classificatior. o? Defects See Explanatory Notes. Acidi:ional idestlty test To further-assure `that the 21cc y ~chlorlde active ingredient is present in 1.1 Dccc, lOs the tablets. auN E'cNinyl See Explanatory Motes. MeN iet~, `I, b3s ~,`~cjrIJ~n~ `?~hth~l'ii,~ Solution, DSP, c IcHd frD?Lels, `T, O.5D APHA-Color Free from sedimant Classification of Defects .D.csrts iojcottoc, Lectaled, DSP, - - DihrecN~~i~ 1c~ection, 3 Ore pee cc, 2 cc, l2s "esilfex "accime, IMP, Freeze Drie-t, MOD Doses :ilM,"x clue, DSP, Freeze Dried, iSP, Freaze Dried, 1' I I' 0 L~i ITJ 0 L~J z PAGENO="0201" Classification of Defects Color Limits Color Limits Classification `of Defects Leakage test for ampuls Additional Assay SIGNIFOCEYCE See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. See Explanatory dotes. See Explanatory Notes. This additional assay method was necessary since lisa fluorometric procedure is core specific for the isoproterenol molecule in that a trihydroxindole derivative is forced with intact isoproterenol. To assure the stability of the product, in that excessive moisture may cause deterioration. See Explanatory Notes. * See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. ALOl; l0N5L Or ~TRhi3Nrs Classification of Defects :°~° HNdrochloride Injaction, ~0pivtcc ha ii ~c;roa~;0oride ia3ection, F I 55, 30 cc ii irochioride Injection, 30 cc a acne ;i'irochOoride Injoctina, ~hrtripc ii'a~ h~d'roc~0orida to 25 j artapaylie `hat, i03s Igroie~aioi FSrcc;iorida Injectic', NSF, 0.2 mg, F cc, 5s Ffc;soioce c'aoiete, USP, a mg, `lets, hP, 0.25 Cram, .~NrO''iPaOCttterOne Acetta Tablets, Moisture Content Classification of Defects i-ardcess limits Clacaification of Defects Accelerated agio5 test Classification of Defects PAGENO="0202" 10160 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Kapco Inc. Sodtum Aminosalicylate Tablets Major Deficiencies 1. Failure to provide adequate space for orderly placement of materials to minimize any risk of mix-ups between components. Commingling of approved material, material with no approval sticker and in-process material, with no indication of approval for use in the storage area for approved materials. In addition, an affiliate company utilizes approximately 25~ of the warehouse for general equipment and raw material storage.. 2. Laboratory Control Deficiency In complete testing of incoming raw materials. Suppliers' protocols missing to substantiate material approved for use. 3. Production Control Deficiency Lack of adequate control to ensure that only approved material is issued for manufacturing purposes. 4. Common loading platform ~or shipping and receiving is not arranged to prevent the commingling of incoming and outgoing material. . . 5. Unsanitary household practice. Food is stored and eaten in the packaging room. PAGENO="0203" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10161 Richlyn Labs. Major Deficiencies 1. Staffing Deficiency Failure of one supervisor to have technical qualifications for the necessary supervisory functions. Another supervisor who is a chemist with pharmaceutical experience cannot allocate adequate time for supervision between operations of Richlyn and another affiliated company. Inadequate laboratory supervision and technical review by chemist in charge. Release of a batch which should have been rejected'by the chief chemist based on test data indicates violation of quality assurance.~ 2. Laboratory Control Deficiency. Incomplete and improper testing of raw material. Failure to reject material in non-compliance with applicable specifica Lions. 3. Production Control Deficiency Absence of specific instructions on the Master Formula and production records for the manufacture of each item. Personnel manufacture in accordance with their experience rather than with delineated procedures. This may create non-uniformity of finished product. Failure to record total granulation weight on batch production record in accordance with company requirements, thus recluding checks of theoretical yield against actual yield. Absence of temperature recorder in drying oven to verify temperature used in dr~ring granulation. Temperatutes of all ovens varied although temperature control settings were the .\same. 4. Poor Housekeeping Regular cleaning failed to remove drug residues or dirt accumulations on drying racks, walls, floors, containers tabletting machine and filter in air system supply heat to drying ovens, thus resulting in the possibility of cross contamination of product. * Exhaust fan in weighing room not screened, thus creating possibility of entrance of flies and other flying insects. - ** PAGENO="0204" 0 L~J 0 w rJ2 S 0: Co iicn, Froc from sec~or~t : To assure ~b2t inpurities are etectef hbat ray arise from S irofuctjon oocr'ores, or from ohanpos in sourcos of materials, or in tho nrecassino of abe item. The or-ese000 of these immurities S is inccrsistont with good manufacturing oractices. Color limits See Explanatory Dotes oh rss The iSP oars: rosh has no specific requirmoert for oh. This requirement S assura gruater stability over the shelf life of the items. Prosorvative shall be present. DSP monoqraoh states that a S oreservative may be oresent. By S our P. 0. rcruirirq the presence of a pros2rvatise~ we are assuring oreatar stah~lity of the item. Clasa:ficatior of Dofccrs See Explanatory Dotes S airs f~t~r injoct4si, Cisssficaticr of Defects I See Explanatory Dotes - o-siur Cr-lu: ~io !nfoct~on, DSP, Classification of Defects See Explanatory Notes 00, Color li:uits See Exolanatory Dotes Leaza~e Tests for ieipuls See Sxolanatorv Dotes I ~~:1ct-:, DSP, Oral, 000,030 Classification of Defects See Explanatory Notes PAGENO="0205" 0 0 0 tON ROCUi%L,i~'S __________________ Sl~N [P -- [>ott~s:-~uet P~enox~methyl Penicillin Classification of Defects. ~See Explanatory Notes. [aClets, COP, 400,000 Units, Accelerated Aging Test ~See Explanatory Notes. - ind~viduaily Sealed, lOOs Tighter lower limit for issay and an upper The tighter lower limit for assay assures Io':t~sium Phenoxymethyl Penicillin assay limit . the best production procedurda and controls Tabilts, USP, 300,000 Units, are utilized and the restricted upper 3ndividua[ly Sealed, lOOs limit will preclude possibility of use Of superpotent material. No upper assay limit given in regulations. Prop~ntheline Bromide, Sterile, USP, Classification of Defects See Explanatory Notes. 30 ag 25a Solubility Time Limit See Explanatory Notes. tUiSraviolet and infrared identity active A more definitive identification for the ingredient . active ingredient. rOcue Hydrochloride Capsules, Classification of Defects See Explanatory Notes. at, 500s ~ugocryprcene Hydrochloride Capsules, 65 Individually Segled, lOOs i Nr-thol, USP, I cc (28,35 Gram) Levorotatory :3 :-atmn Ointment, USP, 30 Grams ~eakage Test Sc.-tiua Pentobachital Capsules, USP, blassification of Defects Sg, Individually Sealed, 25s ~cdiua Lactate lnjection, USP, 1/6 classification of Defects rolar, 1000 cc, 6s )ioctyl Calcium Sulfosuccinate Capsules,~Classification of Defects P Leakage Test The Synthetic levorotatory form is subjectel to more purification to eliminate stereo- ismera which may possibly differ. in phar- ~aacolo~ical action. fro assure that the tubes of ointment do not ~eak. ~ee Explanatory Notes. ~ee Explanatory Notes. ~ee Explanatory Notes. To aisure that the liquid fill does not teak - PAGENO="0206" 10156 COMPETITIVE I'ROBLEMS IN THE DRUG INDUSTRY Bell Pharmacal Corp. Table Rock Labs. Divisio~i ~jor Deficiencies Surveyed and Rejected by the Veterans Administration. PAGENO="0207" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10157 SThNLABS Codeine Sulfate Tablets Calcium Lactate Tablets Major Deficiencie~ 1. Laboratory Control Deficiency Absence of written laboratory test methods setting forth test procedures. Incomplete monograph testing of raw materials. Absence of in-house standards of finished product to provide uniformity of product. Examples: Company has no standard for hardness of compressed tablets indicating lack of quality of control. Further, firmuses Pfizer tester~and Monsanto Tester. No correlation in hardness test values found between the two. Incomplete testing on finished product. 2. Production Control Deficiency Failure of Master Formula and Batch Production Record to be exact duplicate. Example:~ Batch Production Record specifies "Plasdone C" whereas the Master Formula indicates "Plasdone". Failure to perform inspection of end item in accordance with established sampling plan and classification of defects, thus creating the possibility of non~uniformity of product. Weighing area for raw material batch components adjacent to open receiving area to street. Flies and other insects accessible to contaminate raw materials. - Batch formulations ready for compression stored in reused fibre drums bearing identification of previous contents creates the possibility of product mix-up and mislabeling. Reuse of fibre drums without new polyethylene liners creates the possibility of product contamination. 3. Defective overhead construction and openings in walls that permits contamination of products being manufactured. 4. Failure of Regular cleaning to remove drug residues from maüufacturing equipment may result in cross-contamination. Drains in production area covered with slime. PAGENO="0208" Taste/Palatability For Active Ingredient: Tighter Melting Range Tighter Specific Rotati Classification of Defects For Active Ingredient: Tighter Melting Range Tighter Specific Rotati Classification of Defects Classification of Defects Melting Point Accelerated Aging Test Limits for Foreign Substances (Color, Unchior- mated Compound for Active Ingredient and 4-Chlorophenothiazmne for Intermediate) See Explanatory Notes. See Explanatory Notes. To limit deterioration which is evidenced by discoloration; See Explanatory Notes. To reduce incidence of impurity isomers. on See Explanatory Notes. To reduce incidence of impurity isomers. To assure that the suppositories are made with a base which will melt within a specified time frame to release its medica- ment. No such requirement exists in the compendia. See Explanatory Notes. To assure that impurities are defected that may arise from production procedures, or from changes in sources of materials, or in the processing of the item. The pre~nce of these impurities is inconsistent with good manufacturing practices. Reaer~'ine Tablets, USP, 0.25 ag,l000s~ Classification of Defects ~ Tablets, USP, 0.3 Cram, l00a~ Classification of Defect!; 3aniazid Tablets, USP, 100 mg, lOOs White Tablets )seudoephedrine Hydrochloride Syrup, It) mg Per 5 cc, I pt (473 cc) Pseudoephedrine Hydrochloride Tablets, SF, 30 og, lOOa ?yrime:a-ansine Tablets, liSP, 21 mg, 1005 ~roCaline hydrochloride Injection, SF, 50 ag per cc, 2 cc, 25s ~ruchiorperaziae Suppositories, NF, -rochiarperazine Suppositories, NF, Ii :u;, 6s I. 1~ `a' See Explanatory Notes. See Explanatory Notes. PAGENO="0209" nctaratc Tablets, JSP, 0.4 Gram, Ti:'i or for Fc"c~gr Suhs;ar:ccs (colorifo tost~ To assure thrt irmuritios are : - fosLec cc iccition) if.- active inorodient cmtcctetthct cay arise from oroduction procaduros or from changos in sources of materials, or in tho processing of tho item. The oresence of these impuritiss is incoosistont with good manufacturing * nracticos. C) 0 t~T~J S -C LI!] 0 LII (12 edita Oxaclllin cassalas, 05?, 0 uivaient to 3.5 fran of Oxacillin each Capsule, lOts classification of Oefects weight Variation See Explanatory Notes The O5P mooo;rsph eod GEE do oot speciflce~ly require compliance with weight vmrietion for this item. Our requirement secures uniform quantity within limits and thus proper uniform dosage. Pro~aothaltns Bromide Tablets, usE, ~1 ~:a Bromide Tablets, US?, see Explanatory Notes See Explanatory Ootes To assure that inpurities are detectad that may arise from production pro- cedures or from changes in sources of i materials, or in the processing of the item. *The presence of these impurities is inconsistent with good manufacturing practice's. Sc ~ -~ `c. lc)ectioc, : ~i~alet to cc Tthscrvcic Scic Iccalorated Aging Tost Cias~ification of Omfacts Classificatioc of Defects Solehility.Tise Limit See Explanatory Motes See Explanatory Motes See Explanatory Notes Sma Exnianatnry Notes Classification of Oefects Accelerated Aging Test - Limics for foreign impurities (Completeness of solution and Infrared spectrum) for active ingredient z PAGENO="0210" 10152 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Kirkinan Labs. FSN 6505-110-4075 Bismuth Subcarbonate Tablets Major Deficien~ce! 1. Production Control Deficiency Inadequate Master Formula and Batch Production Record * Lack of explicit instructions, precautions as to steps to be followed in preparation of the drug which may lead to non-uniformity of batches. Operating personnel unaware of in-process test standards. Although in-process testing is conducted, it is not known when to take corrective action. Use of city water instead of purified water in batch formulations. This may. affect the purity of the product. Lack of traceability .of water used in batch formulations. 2. Housekeeping Deficiencies. Potential for product contamination exists due to: Absence of covers on hoppers of tabletting presses. Failure of tabletting ~perators to wear suitable head covering to prevent the possibility of hair, dandruff from falling into the powder. Insects may enter granulation in drying oven from the outside through oven exhause. PAGENO="0211" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10153 Strong Cobb Amer FSN 6505-550-8464 Meprobamate Tablets ~jor f1cLet~c~es New plant where bid item is to be produced is not yet in operation. PAGENO="0212" 1~ 0 LTj 0 ct~ `-4 z Thiami'~e ~iydrochinride injection, CSP, 100 pe~ cc, 1C cc Thiethylperazi~e Maleate Tablets, NF, 10 tag, lC3~ Oxyphenbutazone Tablets, HF, 100 mg, l000s thi~erosol Tincture, OF, 1 Pt Free from Sediment To assure that impurities are detect~'d (i~ 3 cc) that may arise from production pro- - cedures, or from changes in sources of materials, or in the processing of the item, the presence of these irnpur- ities is inconsistent with good manufacturing practices. See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. Classification of Defects Color limits Classification of Defects Hardness Classification of Defects Ethosuximide Capsules, USP, 0.25 Cram, lOOs TriamcinololLe Acetonide Aerosol, NF, 0.0066~;, 150 Grams Classification of Defects Spray delivery Moisture See Explanatory Notes. To assure rate of delivery. To assure the stability of the product, in that excessive moisture may cause deterioration. PAGENO="0213" 1~t~azine tablets, USP, 3.5 Cram, Classification of Defects See Explanatory Notes. Limits for foreign subs :ances (color, To sssure that impurities are detected chloride and sulfate) for active ingredient that may arise f ore pro~Nciion procedures, or from changes in sources of materials, or in the processing of the item. The presence of these impurities is incorr- sistent with good manufacturing practices -~e~ Tr~ancinolone Discetate Suspension, Classification of Defects See Explanatory Notes., Sterile, NF, !~3 erg per cc, 5 cc Particle size of Trisxucinolone Raw Material This requirement was added to control 0 the particle SliS of the active ingredient in the long acting parenteral suspension. Particle size is related to the release rate. This requirement is not covered by the NF monograph. Pyrogen test To assure that pyrogens are not present. JSP, 3.5 Cram, Classification of Defec:rr See Explanatory Notes. Tol~~de ~brrta, tsP, 253 mg, 100 Classification of Defeces See Explanatory Notes. i03~~ Moisture To assure the stability of the product, in that excessive moisture may cause - deterioration. C/) Thirrar)eal Solution,CF, I pt (473 cc~ Color limits To assure that impurities are detected that may arise from production procedures, or from changes in sources of materials, or in the processing of the item. The presence of these impurities is incon- sistent with good manufacturing practices. PAGENO="0214" 10148 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY As is the custom the FDA is advised of all plant survey rejections when Quality Control and Housekeeping deficiencies are the cause of the rejection. The normal method is by mail. This was followed in the cases cited above except for the ICN (Strong Cobb Arner) rejection, since our telecons with the FDA. revealed that they were aware of the relocation of the plant and the fact that they had not yet been registered or inspected by the FDA. Accordingly, no letter was forwarded. End PAGENO="0215" COMPETITIVE PROBLEMS IN THE DRTJG INDUSThY.. 10149 Barr Labs. Pyridoxine Hydrochloride Tablets Dyphenhydramine Hydrochloride Tablets ~jor Deficieflc~i~Q Plant Deficiencies ~ncoinplete raw material testing. Production equipment not clean~ed before and after use. Live spider in drying oven. Inadequate quarantine of raw material. -- No Calibration program. PAGENO="0216" ~;ioa~ospha~ido Tablets, US?, 50 ing, 103s Ophthalaic Solution, US?, Classification of Defects Limits of: l7J~dihydroequi1in 10.0-20.0% l7~estradio1 3.0-5.0% Equilenins Max 15.0% SIGNJ 0 See Explanatory Notes. See Explanatory Notes. The CFR does not specifically require ôompliance with con- tent uniformity for this item. Our requirement assures uniform quantity within limits and proper and uniform dosage. See Explanatory Notes. See Explanatory Notes. To assure the stability of the product, in that excessive moisture may cause deterioration. To assure the best production procedures and controls are utilized consistent with good manufacturing practices. To assure greater stability over the shelf life of the item. See Explanatory Notes. See Explanatory Notes. To assure that impurities are detected that may arise from production procedures, or from changes in sources of material, or in the processing of the item. The presence of these impurities is inconsis- - tent with good manufacturing practices. See Explanatory Notes. Without these limits pharmacologic testing may be required to assure therapeutic effect Spa~t1nomycin Dihydrochloride, Sterilol Classification of Defects iouv to 2 Grass of Spectinomycin Solubiiity Time Limit 1pcct2'~-cla Dihydroehloride, Sterile~ Weight Variation ~u~'iV to 4 Grams of Spettinornycin Classification of Defects Hardness Limits Moisture Free from Sediment Tighter Lower pH Limit ~incristine Sulfate for Injection, US?, Classification of Defects 5 eg Maximum Unrefrigerated Shipping Times for incristine Sulfate for Injection, USP,!Itcas Requiring Refrigerated Storage ing ~olnaftate Solution, US?, 1%, 10 cc APHA Color Free from Foreign Particles Estrogens, Conjugated For Injection, USE, Freeze-Dried, 25 og C) PAGENO="0217" Tetracyol inc Hydrochloride for lirjection, DSP, 0.1 Grain rohucurarine Chloride In5ection, DSP, P ig cer cc, 10 cc, 6s Vitamin A Capsules, DSP, 50,000 DSP VEils, lOOs Classifitation of Defects. Solubility Time Limit Weight Variation See Explanatory Notes. See Explanatory Notes. The DSP monograph and CFR do not specifically require compliance with con- tent uniformity for this item. Our requirement assures uniform quantity within limits and thus proper and uniform dosage. See Explanatory Notes. See Explanatory Notes. The DSP monograph and CFR do not specifically require compliance with con- tent uniformity for this item. Our requirement assures uniform quantity within haiti and thus proper and uniform dosage. See Explanatory Notes. See Explanatory Notes. To assure greater stability over the shelf life of the item. To prevent homolysis of red blood cells at the site of the injection. To preclude possibility of use of super- potent material. No upper limit in DSP. Fat soluble vitamins are stored in the body. See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. lotr~voline Hyd'ochlorida for Classification of Defects Ta a:tioa, DSP, Intravenous, 0.50 Gras Solubility Time Limit Weight Variation Ctassiftcation of Defects Color Limits Tighter Lower pH Limit Shall be Isotonic Upper Assay Limit Classification of Defects Classification of Defects Classification of Defects Solubility Time Limit Perphenazine Tablets, W~, S rig, SODs CyctopPospbeide for Injection, DSP, 100 og, Its 0 0 t~TJ Eli I PAGENO="0218" Diphenoxylate Hyd~ochloride and Atropitle Sulfate Tablets, NF, Individually Sealed, lOOs Pralidoxime Chloride, Sterile, USP, 5 Grams pR Rabbit vaginal irritat~.on test ~and shall produce no Cornification In vaginal smears of rats (on the formulation) Classification of Defects Tighter Assay Limits Classification of Defects St~ability test (Accelerated Aging Test) Color test, loss on drying, Elemental Analysis (C, H~, N2 Cl2 02), Bromide, Iodide3 Sulfate, and Neutralization Equivalent. Solubility Time Limit Tighter Weight Variation CLassification of Defects' To~cicity test Double the current USP Pyrogen teSt dose Leakage test for ampuls Classification of Defects Bloavailability Test A pH is specified in. order to as.juri~ greater stability over the shelf life - of the item. To assure that formulation does not cause irritation. See Explanatory Notes. More stringent assay limits to assure the best production procedures and controls are utilized, consistent with good manufacturing practices. See Explanatory Notes. See Explanatory Notes. To provide tighter limits in order to assure the best production procedures and controls are utilized consistent with good manufacturing practices. See Explanatory Notes. Our requirements assure more umiform quantity within limits and thus proper and uniform dosage. See Explanatory Notes. To assure that the injection which is given intravenously is non-toxic. Retained the pyrogen test dose of USPXV. See Explanatory Notes. See' Explanatory Notes~ Product $uitability~ DienestrOl Cream, N~, 0.017., 2 3/4 oz (78 Gram) Ar)DITIONAL REOUIREMCNTS . . . S~GNIPICANCE Sodium Sulfobromophthalein Injection,~ US?, 50 mg per.cc, 3 cc,, lOs Sodium .Sulfobromophthalein Injection,~ US?, 50 mg per cc, 7.5 cc, lOs Methenamine Mandelatè Tablets, US?, 0.5 Gram, l000s PAGENO="0219" Acetaminophen Elixir, NF, 0.12 Gram per. 5 cc,1 gal (3.78 liters) ADDITIONAL 1~EQUIRE~4ENTS Maximum unrefrigerated shipping times for items requiring ~refrigerated átorage Maximum unrefrigerated shipping times for items requiring refrigerated storage Classification of Defects C1assifi~ation of ~efécts- Moisture Limits Hardness Color of Tablet: Melting range for active ingredient IR for Extracted Petn Chromatographic Purity for Extracted l'etn No Nitrates other than Path No Nannitol in Pormulation Taste and Palatability Accelerated aging test Free p-aminophen*l in Elixir To assure the stability of the product, ia that excessive moisture may cause deterioration. See Explanatory Notes. Due to nature of use of this drug for long term therapy color is considered a necessary factor for patient acceptance and patient assurance. To assure that impurities are detected that may arise from production pro- cedures, or from changes in sources of materials, or in the processing of the item. The. presence of . these impurities is inconsistent with good manufacturing practices.. Interferes with Actiyity o~ See Explanatory Notes. See Explanatory Notes. . I. To limit a hydrolysis impurity which results from degradation. C,' NAME Candicidin Si.ippositories, NP, Vaginal, 3 mg, 28s Candicidin Ointment, NP, Vaginal, 0.067., 150 Gram Diphenhydramine Flydrochloride Capsules, USP, .25 mg, 30s Bisacodyl Tablets, NP, 5 mg, l000s Bisacodyl Tablets, NP, 5mg, Individually Sealed, lOOs Pentaerythritol Tetranitrate Tablets~, NP, 10 mg, i~0Os Se~ Explanatory Notes. See Explanatory Notes.. See Explanatory Notes. See Explanatory Notes. . PAGENO="0220" Undecylenic Acid Ointment, Compound, HF, 28.35 Gram Free from particulation and sediment Classification of Defects Limit on Blood Group A and B Substances. Maximum unrefrigerated shipment time for refrigerated item To assure that impurities are detected that may arise from production pro- cedures, or from changes in sources of materials, or in the processing of the item. The presence of these impurities is inconsistent with good manufacturing practices. See Explanatory Motes. To assure a tighter manufacturing control. To assure at least a minimum quantity of preservative will be present for stability of product. Obtained from R &`D study to prevent ready deterioration. To assure that the tubes of ointments do not leak. To assure that the ointment will be usable after freezing and heating. To assure that the correct amount of double bonds are in the compound. ~TTT~h~ P°QU ~H\1°NTS ___________ SOh~ 0 ~~YCF Purified, DSP, Distilled, Color Limits See Explanatory Motes~ - - 1503 cc, 65 Sterility and Pyrogenic:t:y To assure proper requir~ments for a solution used as irrigating fluid. P~nyLephrine Hydrochloride Solution, DSP, IS, I pt Cholera Vaccine, US?, 20 cc Color Limits Tighter assay limits Minimum limit for the quantity of preser- vative at time of delivery Formula specified I. See Explanatory Notes. To avoid unwanted blood specific substances. See Explanatory Notes. Leakage for tubes Stability Iodine number PAGENO="0221" AL'D[TICN'i. RiOitREM'~NTS SIGY~FIC iNCE He'glunine lodipamide Injection, 52'L, 20 cc I Irofurantoin Oral Suspension, 5 tag per cc, 16 fi oz (473) Antigen, Lymphogranuloma Venereum, USE', icc Collor Limits Bulk Solution shall have an adjusted pH and finished solution shall fall within specific pH limits Tighter Assay Limits Minimum limit for the qi~ntity of preserva- tive at time of delivery. Classification of Defects Each lot must be checked against known cases of Lymphogranuloma Venersum, and yield a positive skin response. Maximum uorefrigerated saipping time for refrigerated items. To assure that impurities are detected~ that may arise from production pro- cedures, or from changes in sources of materials, or in the processing of the item. The presence of these impur- ities is inconsistent with good manufacturing practices. See Explanatory Notes. The DSP monograph dbes not specifically require compliance with pH for this item. Our P.D. specifies a pH range in order to afford greater patient acceptance in pediatric use (Professional requirement). To assure a tighter manufacturing control. To assure at least a minimum quantity of preservative will be present for stability of product. See Explanatory Notes. See Explanatory Notes. To assure that the antigen is spfcific for its intetided use. See Explanatory Notes. ?h~nylephriue Hydrochloride Solution, USP, O.25A, 15 cc Free from parciculation and sediment DSP, US',, Classification of Defects 0 LTJ t~Tj 0 PAGENO="0222" i\!)T)ITTONAL PEQU1RF3~13NTS Isotonic Color limit pH To prevent irritation to the nasal membranes. See Explanatory Notes. A pH range is not given in~NF, thus a pH range is specified to assure greater stability over the shelf life of the item. Bacteria limits to control the amount of viable microorganisms and to prohibit those organisms that should not be present in the product: This assures that undesirable contaminatiofl is not present in the product. To provide.tighter limits in order to assure the best production procedures and controls are utilized consistent with good manufacturing practices. To prevent irritation to the nasal membranes. See Explanatory Notes. A pH ran~e is not given in NF, thus a pH range is specified to assure greater solubility over the shelf life of this item. Bacteria limits to control the amount of viable.microorgafliSms and to prohibit those organisms that should not be present in the product: This. assures that undesirable contamination is. not present in the product. To provide tighter limits in order to assUre the besl . production procedures and cOntrols are utilized consistent with good manufacturing practices. s1(;NIFIC~\NCt X~rlot~etazolifle ~ydrochloride Solution, SF, O.l~i, 15 c~c Bacterial count Xylometazol me Hydrochloride Solution, SF, O.l7~, 1 pt (473 cc) I. 0 0 Additional requirements of active ingredient more stringent limits of impurities (arsenic) . Isotonic Color limit PH Bacterial Count Additional requirements of active. ingredient more stringent limits of impurities (arsenic) PAGENO="0223" Dexanethasena Sodium Phosphate Injection, US?, Equivalent to 4 mg of Dexamethasone Phosphate per cc, 5cc ~ethyiprednisolone Acetate Suspension, Sterile, NF, 40 mg per cc, 5cc Methyprednisolone Acetate Suspension, Sterile, NE, 40 mg, 1 cc f~idocaine Hydrochloride Injection, US?, 1~ with Epinephrine 1:100,000, Chicroqulne Phosphate Tablets, is?, 0~5. Gram, 500s Quinidine Sulfate Tablets, US?, 0.2 Gram, Individually Sealed, lOOs Acetaminophen tablets, NP, 0.325 Crane, 100Cc APOiTIO:~L iU~()UiREHi-NTS Classification of Defects Color Limit Classification of ~efects STCI TPICANCS Color Limits Classification of Defects Classification of Defects Classification of Defects Disintegration (5 minutes) Free p-aminophenol in tablet Accelerated aging test Classification of Defects C) See Explanatory Notes. See Explanatory Notes. tTJ `-4 See Explanatory Notes. * * 0 ITJ See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. Same disintegration time as M~irin ~ tablets. . To limit hydrolysis impurity which results from d~gradation. See Explanatory Notes. See Explanatory Notes. PAGENO="0224" )Ik1T~ONAL ~i)UtiC~~1'NTS hLoog Grouping Serum, ~nti B, US?, Drird, E~uivaient to 5 ml diood Grouping Serum, Anti A, US?, DrieG, Equivateot to 5 ml 3lood Grouping Serun, Anti A, B, Cii', Dried, E~uivalent to 5 rat Absence of false agglutinins or other react ions Higher Avidity Requirements Tighter Titer requiremetts Certification by Blood Bank Center, Ft. of final filled container Maximum unrefrigerated shipping time for refrigerated material To assure that impurities are detdctdd that may arise from production pro- cedures, or from changes in sources of materials, or in the processing of the item. The presence of these impur- ities is inconsistent with good manufacturing practices. To assure against false positive reactions. To assure a more potent reagent to reduce the possibility of error. Requirement of military medical services which assures that each filling is tested and approved by their professional laboratory. FDA releases bulk lots; not necessarily filling lots. See Explanatory Notes. Food Grouping Serum, Anti RN, US?, i'rrrivalent to 5 cc Maximum unrefrigerated shippint time for refrigerated material To assure that impurities are detected that may arise from production pro- cedures, or from changes in sources of materials, or in the processing of the item. The presence of these impur- ities is inconsistent with good manufacturing practices. To assure against false positive reactions. To assure a more potent reagent to reduce the possibility of error. Requirement of military medical services which assures that each filling is tested and approved by their professional laboratory. FDA releases bulk lots; not necessarily filling lots. See Explanatory Notes. Clear, free from particulate matter and sediment ~Knox~ Clear, free from particulate matter and sediment Absense of false agglutinins or other reactions Gigher Avidity Requirements Tighter Titer requiremeats - Certification by Blood dank Center, Ft. of final fitted container Knox PAGENO="0225" ADOTTIONAL RLoUP~FMENfS SIGNTFCANCE Succinyicholine Chloride, Sterile, US?, 1 Crate Succistyicholine Chloride, Sterile, US?, 0.5 Gram Succinylcholi~ne Chloride Injection, US?, 20 tag per cc, 10 cc, 6s Classification of Defects More Stringent limits o~! impurities (Total lactate content) Classification of Defects Solubility time Limit Nitrogen Content Acute Toxicity Classification of Defects Color Limits Shall be isotonic Nitrogen Cohtent Acute toxicity' Maximua unrefrigerated shipping time items requiring refrigerated storage. Additional tests for active ingredient (Nitrogen content, acute toxicity) Classification of Defects Leakage tests for ampuls Color Limits Maximum unrefrigerated shipping times for items requiring refrigerated storage See Explanatory Notes. See Explanatory Notes. An additional indirect assay and identity test. To assure the product is non.toxic. See Explanatory Notes. See Explanatory Motes. To prevent hemolysis of red blood cells at site of the injection. As an additional indirect test for identity and assay. To assure the product is non-toxic. See explanatory Notes. An additional assay and to assure the. active ingredient is non-toxic. See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. 0 .Chlordiazepoxide Hydrochloride Capsules, US?, 10 tag, 500s Chiord.iazeputdde Hydrochloride Capsules, US?, 5 ag, 300s Chiordiazepoxide Hydrochloride Capsules, US?, 25 mg, 500s See Explanatory Notes. ` -` To provide tighter limits in order to assure the best production procedures and controls are utilized consistent with good manufacturing practices. I Chiordiazepoxide Hydrochloride, Sterile, US?, 100 tag, lOs for item 0 l'cJ (12 I I. 0 PAGENO="0226" X~r1one tazoline ~ydroch1oride Solution, HF, 0.17., 15 cc Xylo~tetazoline Hydrochloride SoLution, HF, 0.1%, 1 Pt (473 cc) Isotonic Color limit pH Bacterial count Additional requirements of active ingredient more stringent limits of impurities (arsenic) I Bacterial Count Additional requirements of active. in~redient more stringent limits of impurities (arsenic) To prevent irritation to the nasal membranes. See Explanatory. Notes. A pH range is not given inNF', thus a pH range is specified to assure greater stability over the shelf life of the item. Bacteria limits to control the amount of viable microorganisms and to. prohibit those organisms that should not be present in the product: This assures that undesirable contamination ~5: not present in the product. To provide . tighter limits in order to assure the best production . procedures and controls are utilized cotsistent with good manufacturing practices. To prevent irritation to the nasal. membranes. See Explanatory Notes. A pH range is not given in NF, thus a pH range is specified to assure greatersolubility over the shelf life of this item. Bacteria limits to control the amount of viable microorganisms and to prohibit those organisms that should not be present in the product: This. aSsures that undesIrable contamination is not present in the product. to provide tighter limits in order to assUre the besl . production procedures and controls are .utilized~ consistent with good manufacturtng practices. i~r)DiTTONAL REOUIRtMENTS . SI(NIFICANCC Isotonic Color limit pH. I. 0 w t!i (12 z 1'l 0 1*.* PAGENO="0227" Dexamathasone Sodium Phosphate Injection, DSP, Equivalnint to 4 mg c~f Dexamethasone Phosphate per cc, ~ethy1prednisolone Acetate Suspension, Sterile, NP, 40 mg per cc, 5 cc Hethyprednisolone Acetate Suspension, Sterile, NP, 40 mg, 1 cc Lidocainc Hydrochloride Injection, DSP, l~ with Epinephrine 1:100,000, cc, ,5s Chioroquine Phosphate Tablets, US?, 0.5. Gram, 500s ~uinidine Sulfate Tablets, DSP, 0.2 Grain, Individually Sealed, lOGs Acetamiaophan tablets, NF, 0.325 Crams, l000s Classification of Defects Color Limit SILl IFICANCE See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. Same disintegration time as Aspirin tablets. To limit hydrolysis impurity which results from d~gradation. See Explanatory Notes. See Explanatory Notes. ADD iT!O~~L I~D~NJIRE~DNTS See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. Classification of Defects Color Limits Classification of Defects Classification of Defects Classification of Defects Disintegration (5 minutes) Free p-aminophenol in tabJ~et Accelerated aging test Classification of Defects L~!J 0 0 PAGENO="0228" ~c~~oiamin~s Hydrobromide Injection, lISP, 0.5 mg,l cc, 12s Sulfisoxazole Tablets, USP? ~ Greta, i000s ADDITIC;NAL RI3QUIPJP~EN ~S Classification of Defects Leakage Test for Ampuls Color Limits Safety Test (mouse test) Moisture X-Ray Diffraction Limits of foreign substances (Color of l07 solution, Chlorine NMT 100 PPM) See Explanatory Notes. See Explanatory Notes. See Explanatory Notes. To assure the material is non-toxic. See Explanatory Notes. To assure that impurities are detected that may arise from production pro- cedures, or from changes in sources of materials, or in the processing of the item. The presence of these impur- ities is inconsistent with good manufacturing practices. To assure the stability of the product, in that excessive moisture may cause deterioration. Insures that the particle size of the active ingredient in the finished tablet is optimal. To assure that impurities are detecte4 that may arise from productiotypro- cedures, or from changes in sources of materials, or in the processing of the item. The presence of these impur- ities is inconsistent with good manufacturing practices. S1&NIPICANCE Classification of Defects Ill identity of Active ingredient in tablets- compared to US? standard I. Soda Lime, US?, 2~l/2 Lb (1.13 Kg) Tighter Moisture Tighter Hardness To assure optimum moisture at time ~f use. This item is in a canister for use in the field. Soda Lime, US?, 5 lb (2.27 Kg) Tighter Moisture To assure optimum moisture at time of use. PAGENO="0229" - Ampicillin for Oral Suspension, US?, Equivalent to 5.0 Grams of Ampici1Li~n Axapicillin for Oral Suspension, USP, Equivalent to 3.75 Crams of - Aznpicillin AnpIcillin for Oral Suspensipn, US?, Equivalent to 7.5 Grams of Ampicillin. Aspirin Tablets, US?, 0.324 Gram, in4ividually Sealed, 1.OOs SiG>JFICANCE ____________ To assure contact of the active ingredient with the eye for main- tenance of effect. Reduce potential for irritation to the eye. Chiorobutanol tends to break down and make the solution more acidic. The LISP monograph and CFR do not require compliance with content uniformity f or this item. Our requirement assures uniform quantity within limits and thus proper and uniform dosage. See' Explanatory Notes. See Explanatory Notes. See Explanatory Notes. To assure the stability of the product, in that excessive moisture may cause deterioration.. ADDTTIONAL REOI}TREMHN?S NA~ Piiocarpine Hydrochloride Ophthalmic~ Shall contain suitable thickening agents - Solution, US?, 17., 15 cc Viscosity limits specified Pilocarpine Hydrochloride Ophthalmic I I Solution, USP, 27., 15 cc Rabbit eye irritation test Pilocarpine Hydrochloride Ophthalmic~ Solution, USP, 47., 15 cc Ch].orobutanol shall not be used in the solution Ampicillin Capsules, US?, 0.25. Cran, l000s' tmpicillin Capsules, US?, 0.25 Cram, lOOs Ampicillin Capsules, US?, 0.50 Cram, lOOs See Explanatory Notes. Classification of Defeccs Weight Variation Classification of Defects Accelerated Aging Test Hardness Moisture content Classification of Defects Codeine Sulfate Tablets, NF, 30. mg, `lOOs See Explanatory Notes. I. PAGENO="0230" Tighter Assay Limits Classification of Defects Stability test (Accelerated Aging Test) Color test, loss on drying, Elemental Analysis (C, H2, N2 Cl2 0~), Bromide, Iodide4 Sulfate, and Neutralization Equivalent. Solubility Time Limit Tighter Weight Variation Classification of Defects To~cicity test Double the current USP Pyrogen teat dose Leakage test for ampuls A pH is specified in. order to asjuru greater stability over the shelf life of the item. To assure that formulation does not cause irritation. More stringent assay limits to assure the best production procedures and controls are utilized, consistent with good manufacturing practices. See Explanatory Notes. See Explanatory Notes. To provide tighter limits in order to assure the best production procedures and controls are utilized consistent with good manufacturing practices. See Explanatory Notes. Our requirements assure more uniform quantity within~ limits and thus proper and uniform dosage. See Explanatory Notes. To assure that the injection which is given intravenously is non-toxic. Retained, the pyrogen test dose of USPXV. See Explanatory Notes. ADDITIONAL REOtJIREMCNTS S~GhIPICANCE Rabbit vaginal irritation test ~nd shall produce no Cornilication In vaginal smears of rats (on the formulation) Classification of Defects NA~~E Dienestrol' Cream, NP, 0.0l7~,, 2 314 os (78 Gram) Diphenoxylate Hydtochloride and Atropirke Sulfate Tablets, NF,. Individually Sealed, lOOs Pralidoxime Chloride, Sterile, * DSP, 5 Grams Sodium Sulfobromophthaleifl Injection, * USP,' 50 mg per cc, 3 cc, lOs Sodium Sulfobromophthalein Injection,~ DSP, 50 mg per cc, 7.5 cc, lOs See Explanatory Motes. I. 0 L*sJ ri~ I t4ethenamin.e Mandelatè Tablets, DSP, -~ Classification of Defects 0.5 Gram, l000s * * Bioavailability Test See' Explanatory Notes~' Product Suitabi1ity~~ PAGENO="0231" `Candleidin Siappositories, NT, Vaginal, 3 nig, 28s `.Candjcidin Ointment, NP, Vaginal, * O.O67~, 150 Gram Diphenhydramine Hydrochloride Capsules, USP, .25 eg, 30s * Bisacodyl Tablets, NP, 5 eg, l000s Bisaàodyl Tablets, NP, 5mg, Individually Sealed, lOOs * Pentaerythiitol Tetranitrate Tab1ets~ NP, 10 mg, 100$ Acetaminophen Elixir, NP, 0.12 Gram per 5 cc,l gal (3.78 liters) Maximum unrefrigerated shipping times for items requiring refriger.ated' Storage Maximum unrefrigerated shipping times for items requiring refrigerated storage Classification of Defects Class~itation of befScts- Moisture Limits Hardness: Color of Tablet Melting range for active ingredient IR fox- Extracted~ Petw Chromatographic Pdrity for Extracted Petu No Nitr4es other than Petn' See Explanatory Notes.. See Explanatory Notes. To assure the stability of the product, in that excessive moisture may cause deterioration. - See Explanatory Notes. Due to nature of use of this drug for long term therapy color is considered a necessary factor for patient * acceptance and patient assurance. To assure that impurities are detected that may arise from production pro- * cedures, or from changes in sources of materials, or in the processing of the item. The. presence of . these impurities is inconsistent with good manufacturing practices.. Interferes with ActiyitT of' Item. See Explanatory Notes. See Explanatory Notes. To limit a hydrolysis impurity which results `from degradation. ADDITIONAL RtQUTREMDNTS See Explanatory Notes. See Explanatory Notes. I No Mannitol In ~ormulation- Taste and Palatability Accelerated aging test Free p-aminophenOl in Elixir, PAGENO="0232" JDITI;NAL REOUIRE~NTS Classification of Defects Classification of Defects - Maximum Unrefrigerated Shipping Time for Items Requiring Refrigerated Storage SICN!P~CANC13 __________ Notes. * 0 w CI) Digoxin Tablets, USP, 0.25 ag, Individually Sealed, lOOs Insulin, Isophane, Suspension, USP, U-lO0, 10 cc Insulin, Zinc,Suspension, US?, U-l00, 10 cc Insulin Injection, US?, U-l00, 10 cc Methenamine Mandélate Oral Suspensioi USP, 0.5 Gram per S cc, 8 11 oz See Explanatory Notes., See Explanatory Notes, See Explanatory Notes~ See Explanatory , Taste/Palatability Test PAGENO="0233" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10147 REPLY TO QUESTION 1AOF DSA CAMERON STATION MESSAGE - R271751Z FEB 74 At one point in Mr. Feinberg's 8 November speech a list of Meprobamate suppliers as taken from the Blue Book was presented on the screen. The narrative indicated that ten of the firms were rejected as.a result of plant visits. There was no indication that these re- jections were for Meprobamate Tablets alone. In fact not all of these firms ar~ bidders.for Meprobamate Tablets. Surveys are listed below along with the dates of rejection and notification to FDA. A summary of the majoi~ deficiencies is attached: Company Barr Labs. Product Diphenhydramine HC1 Pyridoxine HC1 Mepz'obamate Date of Rejection July 73 October 73 Date FDA Advised 25~July 73 -`~ 25 October 73 Kirkman Labs. Bismuth Subcarbonate July 73 12 July 73 ICN (Strong Cobb Amer) Meprobamate . June 73 June 73 .-.-~ Zenith Meprobamate June 73 29 June 73 American Quinine (Natcon)(Napp) Propoxyphene HC1 April 73 3 May 73 ~ Bell Pharmacal Corp. No Specific Product ~ February 73 February 73 Stanlabs. \ Codeine Sulfate Calcium Lactate May 68 . September 68 Bowman Sodium Fluoride March 67 March 67 Fellows (Xapco) Sodium Aminosalicylate July 66 July 66 Richlyn No Specific Product February 66 April 66 PAGENO="0234" 10148 COMPETITIVE PROBLEMS IN THE DRUG INDUSTR'! As is the custom the FDA is advised of all plant survey rejections when Quality Control and Housekeeping deficiencies are the cause of the rejection. The normal method is by mail. This was followed in the cited above except for the ICN (Strong Cobb Arner) rejection, since our telecons with the FDA revealed that they were aware of the relocation of the plant and the fact that they had not yet been registered or inspected by the FDA. Accordingly, no letter was forwarded. End PAGENO="0235" COMPETIflVE PROBLEMS IN THE DRtXO s'rin~.. 10149 Barr Labs. Pyridoxine hydrochloride Tablets Dyphenhydramine Hydrochloride Tablets ~j~c~r Deficiencies Plant Deficiencies ~ncomplete raw material testing. Production equipment not clean~ed before and after use. Live spider in drying oven. Inadequate quarantine of raw material. No Calibration program. PAGENO="0236" 10150 COMPETITIVE PROBLEMS IN THE DRUG INDVSTRY Barr Labs. Meprobamate Tablets, USP. Major Deficiencies 1. Laboratory Control Deficiency. Absence of testing of raw materials. Company does not perform specific identity test to assure material La what it purports to be. (Company relies on suppliers' protocol). Incomplete monograph testing(suppliers' protocol) of components Lot DPSC. Failure to;incorporate changes in USP XVIII in test procedures as part of the firm's test procedures of the end item. Example: DiSsolution and assay procedures were not performed in accordance with changes reported in the `!Fifth Interim Revision to USP XVIII". Failure to documen~t compliance of in-p~ocess testing with written specification requirements. 2. Production Control Deficiency Failure to record lot numbers of all raw materials used in the production of "crude" Meprobamate on the batch production record. Failure to identify equipment used in a manufacturing - step. Ta~bletting operations of as many as 6 different products conducted in a single room at one time without benefit of itructural separations between machines creates the potential of cross contaminatiqn. Improper use of hot air ovens during drying operations. \All doors of the 12 ovens open at the same time presents the \poasibility of crosS contamination of material in the different ovens. Failure to provide an appropriate procedure to minimize the hazard of contamination of material in trays to be dried or which have been dried from air borne contaminants.. PAGENO="0237" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10151 Barr Labs. Meprobainate Tablets, TJSP. Major Deft4encies 3. Lack of a dust control system. Collected powder present on. overhead beams and tops of other manufacturing equipment such as dryers and ovens. 4. No record on verification of regular cleaning of equipment and no documentation to assure that drug residues have been removed to avoid cross contamination, PAGENO="0238" 10152 COMPETITIVE PROBLEMS IN THE DRUG INDUSTR'Y Kirkinan Labs. FSN 6505-110-4075 Bismuth Subcarbonate Tablets ~~jor DeficienCe! 1. Production Control Deficiency Inadequate Master Formula and Batch Production Record. Lack of explicit instructions, precautions as to steps to be followed in preparation of the drug which may lead to non-uniformity of batches. Operating personnel unaware of in-process test standards. Although in-process testing is conducted, it is not known when to take corrective action. Use of city water instead of purified water in batch formulations. This may. affect the purity of the product. Lack of traceability ~of water used in batch formulations. 2. Housekeeping Deficiencies. Potential for product contamination exists due to: Absence of covers on hoppers of tabletting presses. Failure of tabletting ~perators to wear suitable head covering to prevent the possibility of hair, dandruff from falling into the powder. Insects may enter granulation indrying oven from the outside through oven exhause. PAGENO="0239" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10153 Strong Cobb Artier FSN 65O5-55O~8464 Meprobamate Tablets Major Deficiencies New plant where bid item is to be produced is not yet in operation. . . PAGENO="0240" 10154 COMPETITIVE PROBLEMS IN TBE DRUG INDUSTR'Y Zenith Labs. FSN 65O5-55O~8464 Meprobamate Tablets ~j~r Deficienci!!1 1. Production Control Deficiency. Improper testing schedule for~in.'process hardness of tablets. 2. Laboratory Control Deficiency. Improper testing of active ingredient and end item. 3. Improper Control of Raw Material. Commingling of drums of raw material with empty drums for discard.. presence of 2 different lot numbers on drum of raw material. Drum of raw material labeled "Ascorbic Acid" and "Starch". Non.released material commingled with appràved material in the release, storage area. PAGENO="0241" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10155 NAP? Chemical Co(Subcontractor) to'Natcon. (&aerlcsn Qutuths) PSN 65O5..958~2364 Propoxyphene Hydrochloride Capsules Major Deficiencies 1. Laboratory control Deficiency Incompicte testi.ng of material .. Lab work not initialled by analyst. .S~ 2. Production Control Deficiency. Eacb step of manufaCturing prCcèss ~hown on batèh produôtion rec~ord is not initialled by operator performing operations and verifying individual. Rusty drying trays which create the potential for product contamination. * *~ Comaingling of approved and cintested raw material. .* 4 Poor Housekeep2.ng Sweating pipes in storage area over raw material creating the possibility of contamination of raw materia3.s. - D~ust o~ raw material containers which may lead to product contamination. Open window jn work area not screened, * * * * * Broken receiving door leading to outside of building. ** 32-814 (Pt. 24) 0 - 74 - 16 PAGENO="0242" 10156 COMPE~IPIV~ ~ROBL~MS iN THE DRUG TNDtTSTRY. Bell Pharmacal Corp. Table Rock Labs. Divisio~t Maicr Deficiencies Surveyed and Rejected by the Veterans Administration. PAGENO="0243" COMPETITIVE PROBLEMS IN TIlE DRIJG IN~JSTRY 10157 Codeine Sulfate Tablets Calcium Lactate Tablets Major DeficienciC!L 1. Laboratory Control Deficiency Absence of written laboratory test methods setting forth test procedures. Incomplete monograph testing of raw materials. Absei~ce of in-house standards of finished product to provide uniformity of product. Examples: Company has no standard for hardness of compressed tablets indicating Jack of quality of control. Further, firm~uses Pfizer tester~and Monsanto Tester. No correlation in hardness test values found between the two. Iñcom~1ete testing on finished product. 2. Production Control Deficiency Failure of Master Formula and Batch Production Record to be exact duplicate. Example:, Batch Production Record specifies "Plasdone C" whereas the Master Formula indicates "Plasdone". Failu~e to perform inspection of end item in accordance with established sampling plan and classification of defects, thus creating the possi~bility of non-uniformity of product. Weighing area for raw material batch components adjacent to open receiving area to street. FlieS and other insects accessible to contaminate raw materials. - Batch formulations ready for compression stored in reused fibre drums bearing identification of previous contents creates the possibility of product mix-up and mislabeling. Reuse of fibre drums without new polyethylene liners creates the possibility of product contamination. 3. Defective ovethead construction and openings in walls that permits contamination of products being manufactured. 4. Failure of Regular cleaning to remove drug residues from manufacturing equipment may result in cross-contamination. Drains in production area covered with slime. PAGENO="0244" 10158 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY STANLABS Codeine Sulfate Tablets Calcium Lactate Tablets ~~jp Deficiencies 5. Failure to louvers attached to exhause fan in the manufacturing ares to close, thus permitting the entrance of flies and other insects. 6. Improper control and handling of raw materials. Failure to store raw materials undet conditions to prevent their decomposition and deterioration and/or becoming contaminated in storage. Material stored in warm, moist basement near boiler room. Floors in disrepair. Poor lighting exists and flammable finished goods stored near boiler presents safety hazard. Receiving area for raw material is adjacent to open receiving area adjacent to street. Sampling of raw material is done in dirty, dusty atmosphere creating the possibility of contamination of the open contaimers with foreign aIrborne mattcr. Failure to provde adequate space for the orderly placement of materials `to minimize any risk of mix-ups .Ex. Commingling of rejected and hold material in the Drug Abuse Finished Goods Storage Area with finished and approved products. 7. Absence of calibration program for test equipment. 8. Absence of a stability testing program~. PAGENO="0245" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10159 Bowmàn-Braun Pharmaceutical Sodium Fluoride Tablets M~a1or Deficiencies 1. Production Control Deficiency \ a. Failure to record of theoretical yield against actual yield and actual yield at various stages of processing. b. Failure to maintain equipment used for manufacture in a clean and orderly manner to exclude the drug from contamination from previous and current production that might affect the safety, identity, strength, quality or purity of the drug. Examples are: Tape on tablet filler, counting machine filling spout and other associated parts had accumulation of caked material and the presence of powder of a previous run. Coating of pink dust on the structural braces of exhaust system and dust and caked material on outside surfaces of coating pans. Presence of various colored tablets behind tape protector attached to drive of tablet sifter. c. `Uncovered vessel during manufacturing process creates the potential for cross contamination. - 2. Laboratory Control Deficiency Incomplete testing of components and finished product. Incomplete laboratory records. 3. Lack of a stability testing program. `No data available to determine minimum shelf life of finished product. 4. `Inadequate calibration program of test equipment(gages, seals, thermometers). 5. Box of rat poison on same shelf side by side with cans of Aspirin. 6. Inadequate dust control system. Miscellaneous equipment in mixing area, wall clocks, air conditioner, mixers were dusty. PAGENO="0246" 10160 COMPETITIVE PROBLEMS IN .~E DRUG INDUSTRY Kapco Inc. Sodium Aminosalicylace Tablets Major Deficiencies 1. Failure to provide adequate space for orderly placement of materials to minimize any risk of mix"ups between components. Commingling of approved material,' material with no approval sticker and in-process material, with no indication of approval for use in the storage area for approved materials. In addition, an affiliate company utilizes approximately 25% of the warehouse for general equipment and raw material storage.. 2 * Laboratory: Control Deficiency In complete testing of incoming raw materi~als. * Suppliers' protocols missing tà substantiate material approved for use. 3. Production Control beficiency `Lack of adequate control to ensure that only approved material is issued for manufacturing purposes. 4. Common loading platform for shipping and receiving is not arranged to prevent the commingling of incoming and outgoing material. * 5. Unsanitary household practice. Food is stored and eaten in the packaging room. PAGENO="0247" COMPETITIVE PROBLEMS IN THE DRUG INDUSTR~Y 10161 Rtchlyn Labs. Major Deficienc~!, 1. Staffing Deficiency Failure of one supervisor to have technical qualifications for the necessary supervisory functions. Another supervisor who is a chemist with pharmaceutical experience cannof; allocate adequate time for supervision between ope~Ations of Richlyn and another affiliated ~ompany. Inadequate laboratory supervision and technical review by chemist in charge. Release of a batch which should have been rejected by I the chief chemist based on test data indicates violation ot quality assurance.~ 2. Laboratory Control Deficiency. Incomplete and improper testing of raw material. Failure to reject material in non-compliance with applicable specifica Lions. 3. Production Control Deficiency Absence of specific instructions on the Master Formula and production records for the manufacture of each item. Personnel manufacture in accordance with their experience rather than with delineated procedures. This may create non-uniformity of finished product. Failure to record total granulation weight on batch production record in accordance with company requirements, thus recluding checks of theoretical yield against actual yield. * Absence of temperature recorder in drying oven to verify temperature, used in drying granulation. Temperatures of all ovens varied although temperature control settings were the same. 4. Poor ifousekeeping Regular cleaning failed to remove drug residues or dirt accumulations on 4rying racks, walls, floors, containers tabletting machine and filter in air system supply heat to drying ovens, thus resulting in the poss'ibLRity of cross contamination "of product. , Exhaust fan in weighing room not screened, thus creating posstbility of entrance of flies and other flying insects. *. PAGENO="0248" PAGENO="0249" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY (Present Status of Competition in the Pharmaceutical Industry) TEURSDAY, FEBRUARY 21, 1974 U.S. SENATE, SUBCOMMITTEE ON MONOPOLY OP THE SELECT COMMITTEE ON SMALL BUSINESS, Waeliington, D.C. The subcommittee mets pursuant to notice, at 10 :15 a.m., in room 6202, Dirksen Senate Office Building, Senator Gaylord Nelson Fchairman of the subcommittee] presiding. Present: Senator Nelson. Also present: Chester H. Smith, Staff Director and General Counsel; Benjamin Gordon, Staff Economist; and John 0. Adams, Minority Counsel. Senator NELSON. Our first witness this morning will be Dr. Wil- ham Apple, Executive Director of the American Pharmaceutical Association. You may go ahead and present your statement. The committee is very pleased to have you here this morning.1 STATEMENT OF DR. WILLIAM S. APPLE, EXECUTIVE DIRECTOR OP THE AMERICAN PHARMACEUTICAL ASSOCIATION, ACCOMPANIED BY DR. EDWARD G. FELDMANN, ASSOCIATE EXECUTIVE DIREC- TOR FOR SCIENTIFIC AFFAIRS; AND CARL ROBERTS, COUNSEL Dr. APPLE. Thank you, Mr. Chairman. I am Dr. William S. Apple, Executive DirectQr of the American Pharmaceutical Asso- ciation. I am accompanied by Dr. Edward G. Feldmann, Associate Executive Director for Scientific Affairs, and our Counsel, Mr. Carl Roberts. Before Dr. Feidmann presents our specific comments on the sub- ject matter requested in your invitatioi~ for APhA testimony, we feel that it is most important first to make the following genera] comments. Senator Nelson, APhA wants the Congress to know that no one has a greater interest than the pharmacist in clearing up the doubts and suspicions that have been propagated in an obviously organized campaign questioning the safety and integrity of prescription drugs 1 See information beginning at page 10724. (10163) PAGENO="0250" 10164 COMPETITIVE PROBLEMS IN THE DRUG INDUSTR~~ dispensed in the United States. The pharmacist's interest stems primarily from the fact that the pharmacist knows how important the medication is to the patient and the pharmacist has to look the patient or a member of his family in the eye. The pharmacist has no vested economic self-interest in the price the manufacturer charges for his drug products because the pharmaceutical service system provides that the pharmacist be reimbursed what the phar- macist pays for the drug product. On the other hand, the pharmacist does have an obvious professional objective in providing patients with effective and safe thedication at reasonable prices. No subject investigated by your subcommittee in the almost 7 years of your extensive work is, from the pharmacist and patient point of view, more important than the hearings you are now hold- ing. More than two bill~on prescriptions are being dispensed annu- ally-more than five million daily-and the patients who take these prescriptions have a right to expect their government to resolve the question of how much confidence can be placed in the medicines their pharmacists dispense. APhA as the national professional society for all pharmacists has no ax to grind for anybody, but the patient and his pharmacist. The pharmacist does not car~ whether a drug product is made and mar- keted by a large firm or a small firm, as long as the pharmacist can be assured of the product's safety and efficacy. APhA knows that high quality prescription drugs can be and are fabricated by manu- facturers of all sizes. APhA also knows that the hallmark of quality is not derived by giving a product a euphonious brand name. And we have watched with interest the development of so-called "branded generics" by such fine firms as Lilly, Lederle, SKF and Upjohn. Simply stated, the situation in our country today is that one agency of the Feder&l Government says that you can depend on the quality of the Nation's drug supply, and another agency of the same Gov- ernment would like you to believe otherwise. Regardless of how this controversy is resolved, APhA is sick and tired of having the finest drug supply in the world under a constant cloud of suspicion. It was bad enough when only the pharmacist was the target of this propaganda, but now p~escribers and patients are asking the phar- macist for assurance. APhA believes the country can ill afford further delay in putting the issue to rest. Thank you, Mr. Chairman. I will be glad to answer questions now or after Dr. Feldnjai~in submits his testimony. Senator NELSON. Well, when you refer to "another agency~ of the same government," you are referring to the Defense Department? Dr. APPLE. Mr. Chairman, I am saying that HEW-the Food and Drug Administration-says the drug supply is good, and the Department of Defense has been casting clouds over the Nation's drug supply ~or the last several years with statements made by some of their spokesmen. Senator NELSON. Well, the same thing is true, is it not, of the Pharmaceutical Manufacturers Association in respect to generics? PAGENO="0251" COMPETITIVE PROBLEMS IN THE 1~RUG INDUSTRY 10165 In other words, they repeatedly said, som~times subtly, more fre- quently not so subtly, that you can only trust the big brand name companies, of which most all of them are members of the PMA, is that not so? Dr. APPLE. I would certainly have to agree that that is the thrust of their propaganda. Senator NELSON. I thought it was interesting. You say that the APhA "also knows that the hallmark of quality is not derived by giving a drug product a euphonious trade name, and we have watched with interest the development of so-palled `branded generics' by such fine firms as Lilly, Lederle, SKF and Up)ohn." I found interesting a recent report from the FDC reports-fre- quently called the Pink Sheet-of July 16, 1973, which states that: Squibb, Pfizer and Wyeth have recently joined SKI, Robins and Parke- Davis as purchasers of antibiotics and other generic dosage forms from Mylan a private formula manufacturer in Mprgantown, West Virginia. Mylan's private formula sales to major drug manufacturers juniped to $4,800,000 In fiscal year 1973 ending March 31 from $2,200.000 a year earlier. Emerging as Mylan's top major pharmaceutical marketing customer in fiscal year 1973, Squibb purchased $1.3 million erythromycin in the first year It bought anything from the Morgantown private formula manufacturer. Mylan Is sole supplier for Squibbs' erythromycin. introduced iii 1972. A Squibb spokesman said the company decided to use Mylan rather than processing erythromycin itself because of the "dlfficult technology involved." Mylan Is one of the few companies capable of mal~ing the product, the Squibb spokesman said. Well, I think that is rather interesting, since their own associa- tion keeps attacking the generics as not being of the same quality as the trade name products. And here you ~-iave Squibb saying that this little company which hardly anybody has heard of has the difficult technology to master this, and I think we ought to lay to rest this propaganda campaign that the Pharmaceutical Manufac- turers Association ~nd the DOD have been carrying on. Dr. APPLE. Mr. Chairman, if I could comment on that. We tried to lay that issue to rest. Our association h~is a policy encouraging legislation that would reveal the actual identity of the fabricator of the dosage form on the label, as well as the identity of the dis- tributor. That legislation has been enacted in the State of Cali- fornia and more recently in the State of Kentucky. There is an effort by the Pharmaceutical Manufacturers Associa- tion now in California to have that legislation amended, and I regret to say that it has already passed one House of the California legislature. For the record, I can give you the information that California was able to gather under prevailing regulations of this so-called "Crown Statute." And I would particularly like to call to your attention an editorial which appeared in the November 1973 California Pharmacist, in which the editor asked, "It is difficult to understand why the drug industry is fearful of having the pharmacist and physician know who really makes their drug products. PMA consisten1~1y maligns small manufacturers by suggesting their products may not be of adequate quality. Yet, they are attempting to deny the pharmacist the informa- PAGENO="0252" 10166 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY tion that would be helpful to him in determining who actually makes these products." Senator NELSON. Yes, we would receive that editorial and the other information for the record. [Testimony resumes at page 10173. The information referred to fol- lows:] PAGENO="0253" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10167 NOVEMBER 1973 issue of CALIFORNIA PHARMACIST WHAT KIND OF GAMES ARE BEING PLAYED? Editorial Dun~g Ins ast week of the 197~ Legislative. ~sion. the Pharmaceutical Manufacturers Assa~iation (PMA1 ~1; ~td on ..-k'n~ up a bill, AB 1535, introdue' `~ on April 24, 17~, ut the aquestothedrug industry. The pur~se of this ?iili~' `i'nate the requiremenr ~f AB 1404 to pla~' `ne namO 0' 1I~" itac- turer of thefinishad dosage form on ha drug label ~` ~` duct idvertis;ng. "he Caiifornia Pharmaceutical Ass ciation, with the s.~ .1 of iSIC Cali'ornia Medical Association, was successful in passnsg AB 1404 in 1971. `the purpose of this ~gislation is to sussl the physician and the pharmacist in knowing who adtually `ne'~utac~ lured the drug product being presc'i ed and dis~'e'rae~s `c the patient. The legislation, signed intp law a 1971 by Governor Reagan, had passed the Legislature by a nearly unanimous vote. For two years the drug ridustry was successful In delaying implementa- tion of AB 1404 through lhelr constant instigation of misleading statements and a general smoke screen that hampered the De- partmentofHeatth'sefforfs in adoptingthe necessary implement- ag regulation. Subsequently, the regulation to implement AB 1404 also was passed by a unanimous vote of the Board of Health. When the industry was unable to de'eat the bill and the regula- tion, they endeavored to gain CPhA's support to permitthe man- ufacturer to merely file the required information as to the actual manufacturer of the drug product with the Department of Health, CPhA refused, inasmuch as it was recognized that this was a mere subterfuge on the part of PMA, to withhold the Information from the practitioner, The State of California does not have the funds to serve as a data bank for Ihe industry nor Would such information on file in Sacramento be of any assistance to a pharmacist at the time that he elects to purchase or dispense a drug product. Failingtogain CPhA'ssupportthe drug industryhasattempted to get the Legislature, via AB 1535, to buy their filing co.tcept. They have amassed the efforts of their three Sacramento lob- byists and all of the resources that PMA can bring to bear to overturn AB 1404. Their tactics at this 11th hour must be questioned. Whydidthey endeavoron September 10th, the lastweekof the `73 Legislative Session, to have AB 1535 considered when it had been on file In the Committee since April 24th? NOVEMBER, 9913 Inasmuch as the regulation wtiich implements AB 1404 re quiresthe nametoappesroa the label byJune 1, 1~74, whatwas the purpose of taking up AB 1535 on September 10th sinc2 it couldn'tbecomeeffective, even i'passed, untilJanuary 1, 1975' Just as AB 581, the drug n"i'~uct selection bill, was ta'ien ill calendar aweek before it wi'~ is, `ieard inthe Sa"~le Business and Professions Committee, similar strange in..aii~es W4:' occurring with respect to AB 1535 in September. ft is difficult to understand why the drug induct', is fearful ~t havingthe pharmacistand physician knowwho re~ "nakeatheir drug products. PMA consistently malignes small manufacturers 5y suggesting their products may not be of adequate quality; `~t. they am attempting to deny the pharmacist the informatic'a el would be helpfulto him indeterminlngwhoactuallymakesths products. It is equally difficult to determine whythe Depart' entof Health reversed itself at the 11th hour and switched from an oppose to a neutral position on AB 1535. The PMA endeavored on September 10th lii crc' ile the illusion that too much confusion surrounded AB 1404; an one but the industry, however, seems to be confused. CPhA, under the provisions of the regulation, has written and obtained Information with respect to the actual `nianufacturer which hes readily been provided by many manufacturers and distributors as witnessed by the report contained in this and the October issue of the CaiFornia Pttarmaclst. Whatarethe restattemptingtoconceaIandwhatkindofgame~ are being played? The Assembly Health Committee did not succumb to the PMA tactics on September 10th and refused to jeport the bill Out of Committee, What wilt happen next January when the Committee reconvenes? It will be well for you to make certainthat your legislator knows thatAB 1404, as itwasenacted, isappropriateandltelpfullegisla- tionandthesubterfuge attempted by PMAthrough AB 1535ia not in the best interest of the profe~slon or the public -RCJ PAGENO="0254" 10168 coMp~rIpIv~ PROBLEMS IN THE DRt~ IND~STRy OCTOBER 1973 issue of CALIFORNIA PHARMACIST SOME MANUFACTURERS Retain for future reference DISCLOSE SOURCES OF SUPPLY Thelast issue of the CaliforrriO Pharmacist (September, 1973 page 5) reported the implementation ef regulatiefls which require pharhracee- tical manefaclerers te disctese the name and place of business of the manufacturer who produces thefinished dosage to~m of their products. The regulation, effective July 28, 1973, provides that manufacturers musteither includethe namesef the mixeroIthefio~l ingredients and the encapsufafor ortabutaferintheproduct'slabeling and advertising mater- at, or provide thin information In response to the w~itfen or oral request of any physician, pharmacist, or their professiendl associations. In an effort to supply InformatIon to the profession, the Catifornis Pharmaceutical Association requested the Identity) of the manufacturer who mixed thefinal iegredienls and encapsulated orlabtetedthefinished dosage forms of products maflufacturered or diqtribsted by over fifty different compaeies. The results of these request~, mailed on the 15th avd 16th of August, are compiled in the following table. At the time of publication, over one month pastthe date of writling to the manufactur- AMPICILIJN TRINYDRATE 280 mg Capsules American Pharmaceutical Co. No Reply American Quinine Products Zenith Labs., Inc. (Northoaly, NJ) 0. F. Aucher & Cu., Inc. Inlernallunat Labs,, Inc.° (Mayaauez, Puerto aico) Ayorst Laboralnries Beucham-Manaeo~ill Pharm.3 IPincataway, NJ) Beecham-Masseogill Pharm. Beecham, Inc. Bristol Laboratories, Dlv. Bristol Labs. or Bristol-Myers Co. (C. Syracuse, NY) Coastal Pharmaceutical Cs. Ne Reply Columbia Medical Company Blocraft Labs. IC. Paterson, NJ) Cenaolidated Midland Corp. Reid ProvIdent or Zenllh Labo., Inc. ICC Pharmaceuticals, bc. No Reply Strong Cobb Amer Parke, Dade 8 Company Replied'3 Porepac Pharmaceutical Cd. No Reply Rachelle Laboratories, Inc. International Labs.° (Atlanta, GA) Sherry Pharm. Co., Inc. No Reply Smith Kline & French, Labs. Na Reply C. R. Squibb & Sans, Inc. C. A. Squibb & SOns, Inc. Stayner'Corporatlon Internalbonal Laba. * lAtlaista, GA) Tewne, Pauluee & Co., Inc.. Intemneliunal Labs fAtlanta, GA) John D. Copanos & Cu., Inc. (Oaeimure, MO) Biocraft Labs. (C. Paterson, NJ) West-ward, Inc. Ne Reply Wolins Pharmacal Corp. Biocraft Lobs. OCTOBER, 1073 9-19-73 8-24-73 ers, many firms have not complied with the Association's request tsr information. Under the provisions of these regulations (Section 10386of Title 17 of the California AdministrativeCode), failureto respond to requests forthe identity of the mansfactureiof thefinished dosageform shall result in the products of the firm failing to respond being deemed misbranded. Those companies who hAve sot iesponded to the Association's requests are being sent a Iina) notice which will preceed the insl(lutioo of legal proceedings aguir)st non-complying firms. Pharmacists who have nolbeen provided informationastotheidentily of the manufacturers) anyprescriplion drug as provided for in California law, should notify the CPhA offices so that appropriate aCtion may be taken. The following list indicateb the replies received at this office as of October 1, 1973. `AcknoWledged request" indicates that the distributor han advised CPhA of the receipt of the request but has net supplied the name of the maedtacturer of the final dosage form prior so press time. DISTRIBUTOR AMPICILLIN ANNYOROUS Wyeth Laboratories BROPIIENIRAMI$E MALEATE -Clink )Olmetane) A. H. Robins Company DEXAMEThASONE 0,75 log Tsblele CIBA Pharmaceutical ~o. No Reply Cuvsolldated Midland Corp. Danbuly Pharmacut4 or 8-31-73 . Cord Laboootorlua 8-20-73 Merck Sharp & Dohmd acknowledged requeur Die. of Melck & Co., Inc. 8-21-73 Organon, Inc. ` Organun, Inc. Schurlvg Cor~. Scheriog Corp. Sherry Pharni. CO., h~c. No Reply U5V Pharmaôuetiou) Curp. IJ5V Pharmaceutical Corp. Zenith Laboratories, Inc. Zenith Labs., Inc. (Northvale, NJ)° 9-06-73 DATE DISTRIBUTOR MANUFACTURER~ REPLIED 8-29-73 9-07-73 9-05-73 9-27-73 8-29-73 9-05-73 8-21-73 DATE MANUFACTURER' REPLIED Wyeth Labs. 8-24-73 (Philadelphia, PA) A. H. Robins Cumpany 8-27-73 (Richmond, VA) -sustaIned Release TabloId lDinleaeee EolaiylNhnf A. H. Robins Compasy. ICC Pharmaceuticals 8-27-73 Strong Cobb Amour (Cincinnati, OH) -.---$aulalued ReleuIh,ts~I,te wIth pheeylephrloe aIfd'pfteoylprOpaeolamlae (Dtmelapp Entoelabbf A. H. Robins Company) ICN Pharmaceuticals 8-27-13 Strong Cobb Amer (Cincinnati, Cl-I) 8-21 -73 8-20-73 8-23-73 9-18-73 8-3n-73 B-20-73 (ContAined O?r page 8) 1 PAGENO="0255" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10169 ERYTHROMYCIN BASE 250 mg Tablets Eli Lilly & Company Eli Lilly & Company (Indianapolis, IN) The Upjohn Company The Upjohn Company ERYTHROMYCIN STEARATE 250 mg Tablets Abbott Laboratories Abbott Labs.6 American Quinise Products Zenith Labs., Inc. )Nudhvale, NJ) Bnittol Laboratorieo, Dlv. Bristol Laboratories of Bristsr-Myert Company )E. Syracuse, NV) Columbia Medtcal Company Zenith Labs., Inc. (Northvalli, NJ) Mallinckrodl Pharmaceuticals 540 Reply Parke, Daoit & Company Repliedla Sherry Pharm. Co., Inc. Na Reply Smith Kline & French Labs. Ne Reply Towne, Paulsen & Co., Inc. Mylan Pharmaceuticals )Morqantown, WV) West-ward, Inc. Ne eeply Wyeth Laboratories Mylun Pharmaceuticals7 (Morganlown, WV) Zenith Laboratories, Inc. Zenith Labs., Inc.6 (Northoale, NJ) FENFLURAMINE 20 m~ Tablets A. H. Robins Company A. H. Robins Company (Richmond, VA) GLYCERYL GUAIACOLATE Syrep A. H. Robins Company A. H. Robino Company (RichmoVd, VA) HEPARIN SODIUM 1000 UnIte/cc Injectlen Abbott Laboratories Abbott Laboratoriese Century Pharmaceuticals, Inc. Medwick Laboratories, Inc. (Chicago, IL) Consolidated Midland Corp. Elkins-Sinn or Medical ~hem)calt~ Eli Lilly & Company Eli Lilly & Company (Indianapolis, IN) Medwick Laboratories, Inc. Ne Reply Organon, Inc. Organon, Inc. Parke, Davis & Company Repliedma Robinson Laboratories, Inc No Reply Towne, Paulsen & Cs., Inc. Medwick Laboratories, Inc. (Melrose Park, IL) The Upjohn Company The UpjU(mU Company Wyeth Laboratories Wyeth Laborytories 8 (Philadelphia, PA) HYDROCHLOROTHIAZIDE 50 mg Tablets Geigy Pharmaceuticals No Reply Div. of Ciba-Geigy Corp. Merck Sharp 8 Dohme acknowledged request Div. of Merck 8 Co., Inc. `Wetiss Pharmacal Corp. Zenith Labs., Imrc. L-DOPA 250 mu Capsalea Eaton Laboratories, Div. Eaton Laboratories, Inc. Morton-Norwich Products, (Norwich, NY) Inc. Roche Laboratories, Div. Roche Laburatorios Hoflmasn-LaRoche, Inc. (Nutley, NJ( MEPROBAMATE 200 8 400 mu Tablets 0-2773 American Pharmaceutical Co. Na Reply American Quinine Products Zenith Labs.. Inc. )Nndhvale, NJ) Barr Laboratoniou, Inc. Burr Labu., sc. 8-30.73 )Nodhvale, NJ) Columbia Medical Co. Zenith Lubo., Inc. 0-30-73 ICN Pharmaceutipals. Inc. No Reply Strong Cobb Amer * Kirkman Laboratories8 No Reply McKesson Laboratories, Div. No Reply 8-24-73 Fonemoss-MclCeoson, Inc. 8-29-73 Parko, Davis & qumpavy Replied13 Purepac Pharmakeulical Co. 540 Reply 8-29-73 Richlyn Laboratories, Inc.6 Richlyo Labs , Inc (Philadelphia, PA) 8-05-73 Slimirry Pharm. Co., Inc. No Reply. Slanlabs, Inc. No Reply Smith Kline 8 French Labs. No Reply 9-18-73 Stayner Corp. Zenith Labs., Inc. )Nodhvale, NJ) Towre, Paulsen 8 Co., Inc. Tuwne, Paulsen 8 Co., Inc. 8-29-73 (Munrooia, CA) Wallace Pharmaceuticals Carter-Wallace, Inc. Div. of Curler-Wallace, Inc. (Cranbury, NJ) 8.24-73 Wolins Pharmacal Corp.8 Heather Drug Co., Inc Wyeth LaboratorIes Wyeth Labs. 0-20-73 (philadelphia, PA Zonith Laboratories, Inc. Zenith Labs., Inc.6 (Northoale, NJ) 8-27-73 PENICILLIN V POTASSIUM 250 mg Tablets ICN Pharmaceutipals. Inc. No Reply Strung Cobb ~mner 8-27-73 Lederle Laboratupies. Div. Ledarle Laboratories of American Cyanamid Company Eli Lilly & Company A. H. Robins Company Robinson Laboratory, Inc. Sherry Phurm. Co., Inc. C. R. Squibb 8 Sons, Inc. Towne, Paulsen `~ Ca., Inc. West-ward, Inc. McKesson Luborytunies. Dlv. Furemoot-McKeusos, Inc. Pfizer Laboratories. Div. Pfizer, Inc. Pumepac Pharmaceutical Co. PREDNISONE S mg Tablets - American Pharmaceutical Cu. No Reply Barr Laboratories, Inc. Barr Labs., Inc. (Nsrthvale, Nil Columbia Medical Co. Blue Cross Praducts (Brooklyn, NY) First Texas Pharm., Inc. First Texas Phurm., Inc. Dallas, T5( ICN Pharmuceut$call., Inc. Ne Reply Slromlg Cobb ~mntr Kmrkman Labura(ories No Reply McKesson Labupatoriex, Div. No Reply Furemuol-Mcl~enson, Inc. (Continued from page 7) DISTRIBUTOR MANUFACTURER' DONNATAL Tablets A. H. Robins Company A. H. Robins Company (Richmond, VA) DATE DATE REPLIED DISTRIBUTOR MANUFACTURER' REPLIED 0-29-71 8-20.73 905 `3 919-17 00573 0203 8.27./3 0-2073 0.0k 8.24 73 0-20 .1 8* 1.' 0-2' 73 0-2773 829'i.I 8-27.73 0.20-73 9-05 73 0.23 73 8-24-73 0-29.73 8-27-73 8-30-73 8-27-73 9-19-73 8-27-73 8-30-73 8-24-73 Eli Lilly & Company8 (lnmtianapolio, IN) Biscruft Laboratories (E. Paterson, NJ( Na Riply No Reply K. A. Squibb 8 Suns, Inc. Mylan Pharmaceuticals Inc. (Morguntown, WV) John 0. Copa000 8 Co., Inc (yaltimore, MD) No Reply No Reply No Reply No Reply 8-20-73 9-06-73 8-23-73 8-21 -73 CALIFORNIA PHARMACIS1 PAGENO="0256" 10170 COMPETITIVE PROBLEMS IN THE DRUG INDIJSTRY DATE DISTRIBUTOR MANUFACTURER' REPLIED Merck Sharp & Dohme acknowledged request Dlv. of Merck & Ce., Inc. Ormont Drug & Chemical Co., No Reply Inc. Parke, Davis & Company Replied'3 Purepac Pharmaceutical Co. No Reply Richtyr Laberatoniea, Irc. Richlyn Labs., Inc. (Philadelphia, PA) Rolell Laboratories, Inc. Rowetl Labs., Inc. (Bandette, MN) Schering Corporation Schering Corp. Stanlabo, Inc. No Reply Stayner Corporation Stayner Corporation (Berkeley CA) or Zenith Labo., Inc.4 (Nosthvale, NJ) Towne, Pootser & Co., Inc. (Monrovia. CA) The Upioho Company USV Pharm. Corp. No Reply Zenith Labs., Inc. and Phoenio Labs. ZenIth Labs., Inc.' Towne, Paulsen & Co., Inc. The Uplohn Company USV Pharmaceutical Corp. West-ward, Inc. Wolins Pharmacal Corp. Zenith Laboratnrleo, Inc. PROPOXYPHENE HCI 65 mg American Quinine Products 8-20-73 TETRACYCLINE HCI 250 mg Capsules American Pharmaceutical Co. No Reply American Quinine Products Zenith Labs., Inc. (Northvale, NJ) 9-19-73 Barr Laboratories, Inc. Barr Labs., Inc.' Bristol Laboratories, Div. Bniotol Labs.'2 9-05-73 Bristol-Myers Company )E. Syracuse, NY) Columbia Medical Company Richlyn Labs, Inc. 8-23-73 (Philadelphia, PA) Dow Pharmaceuticals, Dow Pharmaceuticals'0 9-18-73 The Dow Chemical Company First Texas Pharm., Inc. International Labs, Inc. 8-20-73 (Mayaguez, Puerto Rico) ICN Pharmaceulicalo, Inc. Ne Reply Strong Cobb Amer Ketchum Laboratories, Inc. Replied3 8-27-73 Lederle Laboratories, Div. Lederlo Labs. of American Cyanamid Co. 8-30-73 McKesson Laboratories, Dib. No Reply 8-31-73 Foremsst-McKeSsOn, Inc. Parke, Davis & Company 9-06-73 FIber Laboratories, Div. of Pfizer, Inc. 8-20-73 Purepac Pharmaceutical Co. Rachelle Laboratories, Inc. Richlyn Laboratories, Inc. 8-29-73 A. H. Rsbins Company Sherry Pharm. Co., Inc. Smith Kline & French Labs. C, R. Squibb & Suns, Inc. Stayner Corporation Towne, Paulsen & Co., Inc. Replied 13 No Reply No Reply Rachelle Labs., Inc.0 Richlyn Labs.. Inc. (Philadelphia, PAl Mylan Pharmaceutical Co. (Morgantown. WV( No Reply No Reply 6. R. Squibb & Sons, Inc. Rachelle Labs., Inc. (Long Beach, CA) Towne, Paulsen & Co., Inc. (Monrovia, CA( Rachelle Labs., Inc. (Long Beach, CA( Mylan Pharmaceuticals Inc. (Morgantown, WV( The Up(ohn Company No Reply Heather srsg Co., Inc. and Mylan Labs. Mylan Pharmaceuticals (Moroantown, WV( 8-24-73 FooTNOTEs `in the table, man~lacturer is defined as that company vita mated the inst egredients and asleted 0' - - encapsulated the Ilnished dosage arm ate pnianmaceuteat prodtot. aoisconvnued distribution, January, 1913. avnNoveheId5vthedisrnlbuto,.evoaisespeoile5th5msoutwtWinsn10040utmand0~b0mv5Aam 9-06-73 monthly. asecond manulaotu'er listed o a bauk-up supple,. 5Ptans to decontintte diutnibuien when present stocks a,eeaheosted. `Oernibutor sates tlneyctmnrpieteiy merutactune the product. nyeiease is subleOt to the distributors quaiOt control 82173 `Ourtibuled by Diets Pnoducts Co., Oicken nosy Lilly & Company in some areas. `400mg Tabby cliv. `etcyanclaotcredbylhe OowChemeatComPalv, 000Pha,tflaoelttioaleor its vhoiiv'oatred Vi,gin Islands Company. "Oat, Labonatotes is awaiting ray approoat ctncludnn both intracyclirn vCl and phosphutn comptes 8-28-73 "Clardicaten 01 responve resuested byCPhA. `5As at September 27, 1973 0 DATE DISTRIBUTOR MANUFACTURER' REPLIED 8-29-73 0-20-73 0-29-73 9-05-73 0-20-73 0-27-73 8-29-73 0-24-73 9-19- 73 0-21-73 9-85-73 8-27-73 8-29-73 0-20-73 0-27-73 8-30-73 9-06-73 0-24-73 Barr Laboratorioa, Inc. Columbia Medical Company Loderle Laboratories, Div. of American Cyanamid Company Rachelle Laboratories, Inc. Rlchlye Laboratories, Inc. Smith Kline & French Labs. Tswne, Paulson & Ce., Inc. West-ward, Inc. WelIns Pharmacot Corp. Zenith Laboralnrloa, Inc. Zenith Labs., Inc. (Norlhvale, NJ) aod Natcen Chemical Co., Inc. (Plaieview. NY) Barr Labs., Inc. (Northvale, NJ) Richlyn Labs., Inc. Lederle Labs. Rachelle Labs., Inc. (Formerly by Cord Labs., DetroIt, Ml)' Richlyn Labs., Inc. (Philadelphia, PA) No Reply Aaabolic Inc. (Irvino, CA) No Reply Rlchlyn Labs., Inc. and Belar Labs. Zenith Laba., Inc. (Norlhvale, NJ)° 8-20-73 9-05-73 8-24-73 8-21 -73 9-05-73 8-27-73 9-11-73 8-20-73 The Upjohn Company Wear-ward. Inc. Wolins Pharmacal Corp. Wyeth Laboratories TRIMETHOBENZAMIDE HCI 250 mg Capsules Beecham-Maosengill Pharm. Beocham, Inc.'4 PROPOXYPHENE 001 65 ma CONFOUND Lederle Laboratories, Div. Lederlo Labs. of American Cyanamid Co. Smith Kline & French Labs. No Reply Towre, Paulsen & Co., Inc. Caribe Chemical Compony (St. Croix, US Virgin blonds) West-ward, Inc. No Reply Wolino Pharmacal Corp. Canibe Chemical Co. and MylaR Laboratories RESERPINE 0,25 ma Tablets Eli Lilly & Company Eli LIlly & Company (Indlonapolbs, IN)' RIFANPIN 300 ma Capsules CIBA Pharmaceutical Co No Raply Dow Pharmaceuticalo, Dow PharmactutiCalO'° The Dow Chemical Company OCTOBER, 1973 PAGENO="0257" AMPICILLIN TRIHYORATE 250 mg Capsules Airierican Pharmaceutical Company Acknowledged Request3 Coastal Pharmaceutical Company No Reply ICR Pharmaceuticals, Inc. International Laboratories (Aiiania, 50)~ Parke, Davis & Company Rii,lied° l'urepac Pharmaceuticat Company Acknowledged Request0 Sherry Pharrnaceuticat Co. nc. Zeinth Laboratories. Inc. Siriiili Kline & French Laboratories Bristol Laboratories4 (E Syruruse, NY)2 Siarlabs. Inc Whitewotth Pharmaceuticals. Inc. iNcLear, SO)' West-ward, Inc Zenith Laboratories, lsc.r CHIORPROMAZINE HCI 25 & 50 mg Tablets Pureyac Pharmaceutical Company Acknowledged Bequest DEXAMETHASONE 0 75 mg Tablets Ciba Pharmaceutical Company Pharmaceuticals Division 01 Ciba-Geigy Corp. Sumnit, NJ)4 Merck Sharp & Dohme Merck Sharp & Dohme Div of Merck & Co., Inc. Sherry Pharmaceutical Company, Inc. Danbury Pharmacal Danbury, CN)2 DIGOXIN 025 mg Tablets Progress Laboratories, inc. No Reply Purepac Pharmaceutical Company Rondee Laboratories5 iuunenbura. NJ)2 32-814 IPt. 24) 0 - 74 - 17 ERYTHROMYCIN STEARATE 250 mg Tablets' Maltinckrodt Pharmaceuticals Mylan Pharmaceuticals, Inc. (OIDMVCIN°) Meigarivun. WvI' Parke, Daub & Company Replied3 Sherry Pharmaceutical Company. Inc. Mytan Pharmaceuticals, Inc. Smith Kline & French Laboratories Mylan Pharmaceuticals, Inc.4 (SK-ERYTHROMYCIN°l West-ward, Inc. Zenith Laboratories, lnc.r HEPARIN SODIUM 1000 UnIts/cc electIon Medwick Laboratories, Inc. Medwick Laboratories, Inc. Meinose Park, iL) Parke, Davis & Company Replied~ Progress Laboratories, Inc. No Reply Robinson Laboratory, Inc. Acknowledged Request HYDROCFILOROTHIAZIDE 50 mg Tablets Geigy Pharmaceuticals Pharmaceuticals Division of Division of Ciba-Geigy Corp. Ciba-Geigy Corp Merck Sharp & Dohme, Division of Merck Sharp & Dohme Merck & Co., Inc. (HYDRODILIRIL3I INDOMETHACIN 25 & 50 mg Capsules Merck Sharp & Dohme, Division of Merck Sharp & Dohme Me ck & Co Inc (INDOCIN MEPROBAMATE 200 & 400 mg Tablets American Pharmaceutical Company Acknowledged Request3 ICN Pharmaceuticals Inc tCN Pharmaceuticals Inc )cirvnirari, 5l1I~ It rkman Labo at es Inc Ba r Labo ator es Inc IN Ii I NJI McK sson Labo atones Div McKesson Laborato es Foremost-McKesson, Inc. (KESSO- (Fairtieid, cnia BAMATE0) Parke, Davis & Company Replied3 Purepac Pharmaceutical Company Purepac Pharm. Co. Ieiieabeth, NJ)~ Robinson Laboratory, Inc. Acknowledged Request COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10171 NOVEMBER 1973 issue of CALIFORNIA PHARMACIST Reeal for tutu e reference MANUFACTURER DISCLOSURES PART II This article is provtded as part of the As ociatlon 5 continuing efforts names of those firmo failing to reopond to CPhA s final notIce will be to furnish the profession with meaningful information on the actual reported in the next issue of the CPhA Journal. Under the provisions of sources of manufacture of pharmaceutical products. The October issue the regulations the failure of these manufacturers to respond results iv of theCalifornia Pharmacist contained the first of a series of compils- their prodocto being deemed mtsbranded. Thts matter will be brought to lions of drug products distributed by various pharmaceutical firms the attention of the Food and Drug Section of the State Department of identifying the manufacturer of the finished dosage form, and this issue Hestth for action. includes similar information received since October 1, 1973. The Association has requested the information contained in this and The following table reflects the most recent information suppited by lIne previ000 article purboant to Section 19386 of Title 17 of the California theftrms distnibutingthe specified products Those companies who have Administrative Code which was published in the Seplember 1973 not yet provided the tnformation requested by CPAA are indicated as No Catiforona Pharmacist Several firms h failed to comply with the Reply The table also indicates that several firms have advised the Cat fornia law ignoring CPhA o inittal and fi I requeots for the identity of Association of the receipt of the request for information Acknowledged tine manufacturer of various inroducto distributed by these firms The Request but at press time have not responded with the specified data DISTRIBUTING FIRM MANUFACTURER DISTRIBUTING FIRM MANUFACTURER AMITRIPTYLINE HCI 25 mg Tablets Merck Sharp & Dohme, Division of Merck Sharp & Dshme Merck & Co., Inc. IELAViL0I )Wasi Porn, PO)' 14 CALIFORNIA PHARMACIST PAGENO="0258" 10172 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY "OISTRIBIJTING FIRM MANUFACTURER' DISTRIBUTING FIRM MANUFACTURER' MEPROBAMATE (ceel) Sherry Pharmaceutical Company, Inc. Zenith Laboratories, Inc. Smith Kline & French Laboratories Smith Kline & Fren.tr Laboratories4 (Ptuiadelphia, PA)~ Stanlabs, Inc. Stanlabs, Ioc.(Pornland, Ov)8 METHYLDOPA 250 mg Tablets Merck Sharp & Dohme, Division of Merck Sharp & Dohnte Merck & Co., Inc. (ALOOMETa) PAPAVERINE HCI 150 mu Capsules Punepac Pharmaceutical Company Ronden Laboratories5 PENICILLIN V POTASSIUM 250 mu Tablets ICN Pharmaceuticals, Inc. Zenith Laboratories McKesson Laboratories, Div. John D. Copanos & Company, Foremost-McKesson, Inc. (KESSO- Inc. leatimone, Coy PEN~VKe) Pfizer Laboratories, Div. Pfizer, John D. Copanos & Company, Inc. Inc. Progress Laboratories, Inc. Na Reply Purepac Pharmaceutical Company Rondeo Laboratories5 Robinson Labnratory, Inc. Acknowledged Request Sherry Pharmaceutical Company, Inc. Mylan Pharmaceuticals, Inc. Stanlabs, Inc. Biocraft Laboratories (E Paterson, NJ)~ West-ward, Inc. Biocraft Laboratories8 PENTAERYTHRITOL TETRANITRATE 10 & 20 mg Tablets Stanlabs, Inc. Stanlabs, Inc. PENTOBARBITAL SODIUM 100 mg Capsules Stanlabs, Inc. Stanlabs, Inc. K-V Pharmaceutical Company lOt. Louis, MO(2 K-V Pharmaceutical Company PHENFORMIN HCI Geigy Pharmaceuticals Division of Ciba-Geigy Corp. )DBI~ 25 mg Tablets) Geigy Pharmaceuticals Division of Ciba-Geigy Corp. )DBI.TDe 50 & 100 mg Capsules) PHENOBARBtTAL 30 mu Tablets Purepac Pharmaceutical Company Stanlabs, Inc. Rondea Laboratories5 Stanlabs, Inc. PREDNISONE 5 mu Tablets American Pharmaceutical Company Acknowledged Request3 ICN Pharmaceuticals, Inc. ICN Pharmaceuticals, Inc. Kirkman Laboratsrles, Inc. Klrkman Laboratories, Inc. IPomfaed, ORI~ McKesssn Labsratarles, Dlv. McKessos Laboratories Foremost-McKesson, Inc. Merck Sharp & Dohme, Division of Merck Sharp & Dohme Merck & Co., Inc. (DELTRA®) Grmont Drug & Chemical Company, Drmont Drug & Chemical Inc. Company, Inc. (Englawood, NJ)a Parke, Davis & Company (PARACORTe) Replied3 Progress Laboratories, Inc. Na Reply Purepac Pharmaceutical Company Rondeo Laboratories6 Robinson Laboratory, Inc. Acknowledged Request Stanlabs, Inc. Stanlabo, Inc. West-ward, Inc. West-ward, Inc. (trans. NY)° NOVEMBER, 1973 PROBENECID 500 mg Tablets - Merck Sharp & Dohme, Div. of Merck Sharp & Dohme Merck & Co., Inc. (BENEMID~) PROPOXYPHENE HCI 65 mg Progress Laboratories, Inc. Na Reply Smith Kline & French Laboratories Smith Kline & French Laboratories4 West-ward, Inc. West-ward, Inc. PROPOXYPHENE HCI 65 mg COMPOUND Progress Laboratories, Inc. Ne Reply Smith Kline & French Laboratories Mylan Pharmaceuticals, Inc.4 West-ward, Inc. Carlbe Chemical Co.' lot. Cram, 00 VirgIn Islands) RESERPINE 0 25 mg Tablets Progress Laboratories, Inc. No Reply Purepac Pharmaceutical Company Rondes Laboratories5 Robinson Laboratory, Inc. Acknowledged Request Stanlabs, Inc. Stanlabo, Inc. RIFAMPIN 300 mg Capsules Ciba Pharmaceutical Company SECOBARBITAL SODIUM 100 mu Capsules Stanlabs, Inc. Stanlabs, Inc. TETRACYCLINE HCI 250 mu Capsules American Pharmaceutical Company Acknowledged Requesta ICR Pharmaceuticals, Inc. ICN Pharmaceuticals, Inc. Ketchum Laboratories, Inc. Replied5 McKesson Laboratories, Div. Foremost- Mckesson Laboratories McKesson, Inc. )KESSO~TETRAe) Parke, Davis & Company.)CYCLOPARe) Replied3 Pfizer Laboratories, Div. of Pfizer, Pfizer, Inc. (New York, NY)3 Inc. (TETRACYN®) Progress Laboratories, Inc. Na Reply Purepac Pharmaceutical Company Rondea Laboratories6 Robinson Laboratory, Inc. Acknowledged Request Sherry Pharmaceutical Company, Inc. Heather Drug Company, Inc. (Cherry viii, NJ)° Smith Kline & French Laboratories Mylan Pharmaceuticals, Inc,4 Stanlabs, Inc. Heather Drug Company, Inc. West-ward, Inc. West-ward, Inc. THEOPHYLLYINE 130 mu - EPHEDRINE 24 mg PHENOBARBITAL B mu Stanlabs, Inc. Stanlaba, Inc. THYROID 60 mu Tablets Purepac Pharmaceutical Company Rondos Laboratories5 TRIMETHOBENZAMIDE HCI 250 mu Capsules Beecham-Massenglll Pharmaceuticals Hoffman.LaRoetree FoonNonso `Inthiatable.merufaoturerisdefinadastheproducensnthaniniavaddoaaganormehichirciudaamaingtha final ingredients and fableting or encapsulating the finished doaage non of a pharmaceutical ptoduo. 3Raoa of business of manufacturers are only fisted fe Iiral time the name Of ha firm appaats. aClarificatior on response requested by CPVA. 5Ptoducr inspected by the distributor prior to release on the drug. eRondee is a wholly owned subsidiary of Punapas Pharneoeutloal conpany Lrsted inerroraseeeoham, Inc. intheOctober neporr. Oaecltam, Inc. intendatonanunaoturathisproduct pending approval from the Foe. npreduot softest to distributor's quaOft oonttol procedures prior to nelaasa. 0iatributor statw that distribution of thia product has bean disconVnuad. 15 Pharmaceuticals Division of Ciba-Geigy Corp. PAGENO="0259" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10173 Mr GORDON Were there cases of the companies refusing to tell who actually manufactured the product, or did they disclose every thing~ Dr APPLE Mr Gordon, I cannot say that they refused But as of the compilations in November and December-October and No- vember, rather-there were a number of firms that had not re- sponded to the request for the information. In the article, the tables here show the actual date replied. In a number of instances there are \blanks-actually it states "no reply" Mr GORDON What about these statements that Mr Feinberg has been making about the rejection rate on DOD plant inspection is 45 percent, and th( rejection rate on precontract award sample inspections is 42 percent ~ The FDA explained what that meant yesterday Do you have any omments on that ~ Dr. APPLE. Well, Dr. Feldmann may later on. He has studied the tables, and I have not I can make this general observation My concern when I hear a statement that 45 percent of the manufac- turers have been rejected-I am interested in what the universe is, because it would be like my going up to Walter Reed Hospital or Bethesda Naval Hospital and going into the VD ward and then walking out of ther( and saying that 90 percent of the patients have venereal disease Well, sure they do in the VD ward But this does not characterize th total universe of patients in that hospital So I think these statements that you cited are grossly misleading, and they are intended to be inflammatory and cast suspicion on the Nation's drug supply. This is not to say th'~t every firm meets the criteria But I `~m saying that these are generalizations that we have been trying to find some documentation for. Mr. GORDON. Well, you have the documentation. We gave it to you Dr APPLE Well, Dr Feldmann will comment on that He has studied that material I have not, Mr Gordon Mr GoRroN All right Senator NELSON. Our next witness will be Dr. Feldmann, Asso- ciate Executive Director for Scientific Affairs of the American Pharmaceutical Association. Go ahead, Dr. Feldmann. Dr. FELDMANN. Thank you, Mr. Chairman. I am Edward G. Feldmann of the American Pharmaceutical Association You have requested that we discuss the views of the APhA on the potential value and usefulness to pharmacy practitioners of data and information secured by the Defense Personnel Support Center-DPSC-of the Department of Defense In order to provide a frame of reference for our response, as well as our interest in obtaining such data and information from DPSC relative to drug products and pharmaceutical manufacturers, permit me to desc ribe briefly our ongoing involvement and ~ctiv ities in the area of drug product quality PAGENO="0260" 10174 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY The very first object listed in both the APhA Certificate of In- corporation and the APhA Constitution is directly addressed to this matter. Specifically, object A of the Association's Constitution appears in my prepared statement. To save time I will not read it. But it addresses itself to the fact that the Association shall publish a compendium of standards and specifications known as the "Na- tional Formulary", and also will promote the safe use of drugs by taking certain steps as an Association in cooperation with other organizations to assure drugs of the highest quality. Since its founding 122 years ago, APhA has pursued a consistent and relentless effort not only to ferret out and identify adulterated and misbranded drugs, but also to disseminate and publicize such information to the pharmacy profession. It has been our firm belief that such information is necessary if pharmacists are to practice their professions most capably and if the public is to be best served with pharmaceutical products which are both effective and safe. I have appended to my statement as submitted an exhibit A, which is an illustration of an article from the 1960 "APhA Journal" exposing unqualified drug manufacturers. Moreover, the Association each month publishes lists of FDA drug recalls, complete with pertinent ancillary information per- taining to each recall, in order to ensure prompt and widespread dissemination of such information to practicing pharmacists. I have. appended exhibit B to my statement as submitted, which is a tear- sheet from the February 1974 APhA "Journal". At times, recall information either may not be sufficient or ap- propriate to communicate the peculiar problems which may relate to a certain drug, in which case APhA has prepared and published specially written articles, such as the recent series in connection with digoxin. And I have provided you with several examples of those. Furthermore-__ Senator NELSON. May I ask a question there? Dr. FELDMANN. Yes, sir. Senator NELSON. When did your organization become aware of the digoxin problem? Dr. FELDMANN. Well, there have been two so-called problems in- volved with digoxin. One of these pertained to content uniformity, and the other an indication that there is a bioavail.ability problem involved with the product. We became aware of the matter of the content uniformity prob- lem in the late 60's, and as was testified to yesterday by Commis- sioner Schmidt, the lISP adopted a content~ uniforrriity test, after which the FDA implemented it via a certification program in their St. Louis facility to batch certify digoxin. More recently there has been indication that there is a problem involved with the bioavailability of the product. This came to the public eye with the so-called "Lindenbaum study", which was pub- lished in the "New England ~Journal of Medicine" along about late 1971. This has resulted again in lISP taking action to adopt a dissolution test, which has been adopted by way of a recent interim PAGENO="0261" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10175 revision announcement. And again, the FDA has been implement- ing that, as was testified to by Commissioner Schmidt. Now, in the DPSC material that DOD supplied to you, they indi- cate in answer to your question-about when did they become aware of this, question 15(d)-they indicate that they learned of the problem in 1965. But they do not say what the problem was. They do not identify it in any way. You also asked them about whether they supplied information about this to the FDA, and they responded there is no record on this. Their explanation is that this was before the so-called Inter- government Professional Advisory Council, or IPAD, was fully operational. I find this a little puzzling, because further on in their same re- sponse under 15(d), they say that they were regularly supplying such information-for at least several other products that are listed -going back to May of 1961; they supplied information in 1961, 1962, 1963 and so forth. So I do not quite understand that as an explanation. Senator NELSON. Well, there is another contradiction, it seems to me, and that is, the Intergovernmental Professional Advisory Coun- cil on Drugs was established in July 1963, 2 years before the De- partment of Defense said they discovered problems with digoxin. The other question is, why do you need an intergovernmental advisory council anyway; if you found some serious defect in a drug you would thi:nk that the agency would feel the responsibility forthwith, if it were a matter of any consequence, to notify the Food and Drug Administration. Would you not? Dr. FELDMANN. Well, I would think that it is desirable by what- ever mechanism you choose to use to have exchange of information, whether it is this intergovernmental council or some other mecha- nism. I would be more apt to question how effectively this particular operation has worked to achieve that intended purpose. The indica- tions I have gotten are that for the most part information has been irregularly exchanged, and where it has, it has been largely pro- vided to the DPSC, rather than the reverse being the case. Senator NELSON. Well, since the DOD does not recite what the problem was, we do not know whether it involved a question of bicavailability or a question of product uniformity or neither. Dr. FELDMANN. Correct. I would also expand on my earlier statement to indicate to you that whether or not they informed FDA-and they apparently have no record-certainly they did not inform the professions. They did not inform the APhA, who, as I have indicated just in my imme- diate preceding testimony, has over the years made an effort to disseminate such information to the professions-to alert the pro- fessions, particularly pharmacy, but also the health professions in general, when to be alert to a potential problem or to take note of it. And I think it is most unfortunate that they have not seen fit to make such information available, if indeed they have had it. PAGENO="0262" 10176 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Senator NELSON. Please go ahead. Dr. FELDMANN. Furthermore, we have viewed our responsibility as being more than serving simply as an information pipeline to the profession As that component of the health care community having the greatest immediate training, experience, knowledge, and interest in drug quality, and in the factors which cumulatively go into a quality pharmaceutical product, ph'trmacy-through the Associa tion-has conducted t comprehensive spectrum of ongoing activities designed to foster and require quality attributes relating to drug efficacy and safety. These activities include: sponsoring meetings and symposia, pri- marily through the APhA Academy of Pharmaceutical Sciences, at which scientific papers and reports are presented describing new test procedures and methodology, the publication of the APhA's "Jour nal of Pharmaceutical Sciences", which serves as the primary ye hide for communicating the latest such research on a worldwide basis among scientists, the cosponsorship-with the AMA and the USPC-of the Drug Standards Laboratory, which is housed in the APhA building and which conducts laboratory studies designed to develop and evaluate new di ug testing procedures, the revision and publication program of "The National Formulary," an official compendium recognized under Federal and State laws as providing standards and specifications for drugs and for their dosage forms, `md the est'mbhshmeut of `m bioavailability project whereby, in an efficient and coordinated manner, such information might be com piled, evaluated, and made available relative to competing drug product formulations Moreover, the association has lent its endorsement, cooperation, and strenuous support to efforts `mnd activities of other groups en gaged in comparable efforts to foster the reliability of marketed drug products. *To mention but two examples: The association has collaborated with efforts of the California Pharmaceutical Association in sup- porting the so-called Crown bill and regulations for its implementa- tion This is what Dr Apple referred to just a few moments ago in response to one of youi questions `mbout requiring the name of the actual manufacturer or fabricator on the product label This is an important piece of information to assist practitioners in making quality judgments relative to that article And the association endorsed and cooperated with the Food and Drug Administration and the U S Pharmaeopeia in a type of grass roots national drug surveillance program designed to provide a broad network for the purpose of identifying and reporting to re sponsible agencies drug product defects detected at the pharmacy practitioner level. FDA Commissioner Schmidt's statement yesterday mentioned, as single example of this, the fact that a pharmacist in the course of his practice noted the problem with respect to the novelty container used for nitroglycerin tablets Senator NELSON. Is that the plastic container case? PAGENO="0263" COMPETITIVE PIWBLEMS IN THE DRUG INDUSTRY 10177 Dr. FELDMANN. Yes, right. The pan shaped container. Mr. Chairman, the broad spectrum of activities briefly described above has afforded us a unique perspective from which to assess the general quality of the Nation's drug supply. Earlier this month, we testified before the Senate Subcommittee on Health, and in our testimony we concurred in the assessment that the Nation's drug supply is of the highest quality. As we noted then, no matter how perfect any human system may be, the drug industry can never achieve, nor FDA enforce, a "zero defect level." The various pro- grams and activities conducted by the FDA indicate to us that all reasonable steps are being taken in an effort to assure the highest level of quality in our drug supply as the present state of knowl- edge, science and technology permits. In recent years, we have heard a number of disquieting speeches, and we have read a number of disturbing articles-all emanating from DPSC spokesmen-which in toto have served to cast doubts and suspicion on various unidentified drug products, as well as various unnamed drug manufacturers. These speeches and articles have suggested that problems pertaining to unreliable drugs, pro- duced under shoddy condition of manufacture, are widely prevalent on the American drug market. Mr. GORDON. May I interrupt for just a moment? This is to Dr. Apple. What is a "schlock" manufacturer? This word "schlock" is used especially by the big firms. Dr. APPLE. I would have to describe it in the field of pharma- ceuticals; it is certainly a derogatory euphemism, frequently em- ployed by industry propagandists to describe a small firm which concentrates on producing drug products which are in the public domain. I suppose the inference is that such a firm cuts corners, at least the way the term is used. That is, that these firms, schlock manu- facturers, cut corners on quality; they cut corners on meeting the legal standards; and that they are in business to make a fast buck. I do not know of any. Senator NELSON. Any such manufacturers? Dr. APPLE. Mr. Chairman, I cannot identify any particular manufacturer that meets this description. Mr. GORDON. Actually, that word is also onomatopoeic. In the sense it is an invidious word. It is supposed to engender hostility toward a person who can be identified by that word. Now, I notice that the APhA Academy of Pharmaceutical Sci- ences says that there is a considerable ar~iount of "schlock" manu- facturing going on in this country.1 Does the APhA have any facts to support this? Dr. APPLE~ Mr. Gordon, we have not received from any member of the association, and we have not read anywhere, where any firm has been identified this way. We do not know the identify of such firms. I agree with you that the term is frequently used, especially in speeches at pharmacy meetings. It is used frequently in discussions. 1 See page 10758. PAGENO="0264" 10178 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY It has crept into the literature. I regret that it has even crept into some of the comments by eminent scientists in our field who tend to use this euphemism without identifying anyone. Mr. GORDON. Well, is it possible for you to send a letter to the academy members to find out exactly what evidence they have on this particular subject, and perhaps submit it to the Committee for our records? Dr. APPLE. Yes, it is possible. We would be glad to do it. We would like to know who they are as well as the committee does. Yes, we will do it if you wish. Mr. GORDON. Thank you. Senator NELSON. Please go ahead. Dr. FELDMANN. I would simply add to Dr. Apple's statement that we would welcome having the identity of these firms brought out for us, because if we were aware of them, the association would feel it is incumbent upon us to make pharmacists aware of them; that was the purpose of my exhibit A in this testimony, where I showed that in the past, going back to 1960 when there was a problem of this nature and the association became aware of it, we took the action necessary to make pharmacists aware of it also. Senator NELSON. I suspect you will not find any evidence. We have been taking testimony for 7 years on this question, and those who make that kind of a criticism have yet in 7 years to come up with any specific evidence. So I think reasonable persons can con- clude that it is a propaganda campaign based on no substance what- soever. I)r. APPLE. Well, Mr. Chairman, you asked the question at the February 1 hearings at the Subcommittee on Health from Dr. Cavallito. I do not know if you received any response to that yet. Senator NELSON. No, we have not. We have asked questions of some of these people that are 7 years old and we have not gotten a response yet, though they promised that they would give us one. I know the mail is running slow, but- Dr. FELDMANN. I will continue. Such implications and allegations appear to run contrary to in- formation available to us from other sources. And these are the implications and allegations made by the DPSC spokesmen. More- over, because of their very serious nature, these assertions have demanded our attention and investigation. It is our position that such charges should not be made, such inferences should not be drawn, unless factual experience will, in fact Support them; and, if indeed there is factual evidence to sup- port such statements, then it is~ also our belief that protection of the public health demands that such information be made publicly available to the health professions in order that appropriate steps can be taken to avoid the distribution, the prescribing, and the dispensing of hazardous or ineffective drug products. In our effort to analyze this subject, we have considered two possi- bilities: Either that the existing standards and specifications may not be generally adequate; or that the existing standards and spec~- fications, while being adequate, are not being adequately enforced. PAGENO="0265" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10179 With respect to the former possibility, we note that then-Brig. Gen. George J. Hayes of the Medical Corps, U.S. Army, Principal Deputy Assistant Secretary of Defense, had testified before your subcommittee, Mr. Chairman, on February 3, 1971, and in his pre- pared statement-again, I will not read the entire quote that is reproduced here. But I would specifically call your attention at the top of page 8 to where he says, We cannot procure competitively without generic specification. Our stand- ards are basically those of the USP and the NF, supplemented with such additional standards as are necessary to ensure suitability riot only at the time of procurement, but also following possible long-term storage through- out the world in Arctic, temperate or torrid zones. So, as General Hayes states, the DPSC standards are basically those of the official compendia simply supplemented with additional standards peculiar to the special needs of the military. Consequently, although additional specifications may be adopted by the DPSC, this does not mean that the official compendia standards are inadequate as applied to drug products as intended for use by the general public. For example, the critical consideration of minimizing unnecessary weight might necessitate specifying the use of a lightweight plastic container for drug products to be carried on board spacecraft. On the other hand, the use of somewhat heavier containers, such as those made of glass, would be perfectly appropriate for use in packaging drug products intended for normal channels of distribu- tion. However, the speeches and articles by DPSC officials previously mentioned have suggested that deficiencies in products and manu- facturers are not simply related to the special needs of the military, but that they are far more serious and reprerent a public health hazard. Senator NELSON. :Have these suggested deficiencies ever been de- lineated by the DOT)? Dr. FELDMANN. I am sorry, Mr. Chairman? Senator NELSON. Have they ever described what the deficiencies were? Now, the statement by General Hayes does not suggest any de- ficiencies whatsoever. All he is saying is that they use the compendial standards. That is all we have ever heard specifically, and that is that in the han- dling of products overseas there may be circumstances which would be quite different from handling products within the boundaries of the United States. They may have to be hauled into a jungle and be there a month or two or three in a humid climate, whh~h does not exist here. They may be taken into the Arctic under circum- stances which do not exist here, and that, therefore-understand them to be saying--we require in some circumstances certain specifi- cations for packaging, handling, that would not be necessary in this country. But I have not seen any description of any deficiencies in the drug products themselves from a medical or therapeutic standpoint. Have you? PAGENO="0266" 10180 COMPETITIVE PROBLEMS IN THE DRUG ~ INDUSTRY . ~ Dr. FELDMANN. Getting information from the ` DPSC has been a very tortuous task, Mr. Chairman. It is very difficult to get informa- tion from them. I have seeii very little except for these statements that were referred to earlier about so many percent of unnamed drug manufacturers, so many percent of drug products. Now, in the information that you mentioned a moment ago that ~ ou obtained from DPSC, and which y ou provided to me prior to our ippearance here today to examine, one section did ask them, under question 15(e)- Senator NELSON Tinder which one Dr FELDMANN Fifteen (e) You quoted-a statement made b~ Mr Feinberg, "We develop definitive product specifications which often exceed official or corn mercial standards " You asked them to please name each product for which such specifications have been developed, the significairce for each product of these extra requirements, and the medical pur pose served by these extra requirements I examined the answer that they provided, and there are a num ber of drugs which are either in the USP or the NF listed in their response Knowing that Dr Banes will be testifying later, I will not address myself to the TJSP drugs But there are four NF articles that are listed in their response One of these is Glyceryl Gu'uacolate syrup NF This is cough syrup, an expectorant. They list three additional tests. One of these is a "taste palatability test" Well, the matter of taste is a subjective matter, Mr Chairman, at least in my opinion This can be a matter of preference for the patient, but I would hardly say that this falls into a critical medical consideration They have a so called "accelerated aging test" Senator NELSON Accelerated aging ~ Dr FELDMANN Yes, which simply metns that the product is sub iceted to intensified environmental conditions to see whether it will stand up Well, the NF specification is such-the "general notices" in the NF require-that an article meet the standards during its entire shelf life So this is, in a sense, really already covered by the NF monograph They then have a requirement for "color value, specific gravity and refractive index" Well, in our opinion, Mr Chairman, in the opinion of the official compendia, the NF and TJSP, these types of specifications are totally inappropriate They are appropriate for an `ictive ingredient, something that will go into the formulation, to `t~certain its purity, but to apply to a formulation which is a mixture of ingredients, they are inappropriate It would appear that such specifications may be largely geared or skewed around one particu ]`rr formulation Senator NELSON Well, that is the issue or suspicion, to use a more `tccurate description, of wh'rt may be going on That is to say that they may be taking a drug, in this case a cough syrup, and deciding they want to buy it from a part1cular manufacturer, so they take `dl of the manufacturers' specs and then ask for a bid, and there is PAGENO="0267" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10181 only one manufacturer who can meet it. Else why, or how, would they ever be able to decide what the specific gravity ought to be? They could decide what the specific gravity ought to be, and then ask for bids and find out that there is no manufacturer in America that produces one with that specific gravity. So I suspect what they actually do is to take a cough syrup and then test the specific gravity and the other aspects of taste and so forth and then write a spec and ask for bids. And what you have done is eliminate all of the competition. Whether that is intentional or not, that would be the effect, would it not? Dr. FELDMANN. Yes, it would appear to be, Mr. Chairman. I am not in a position to be able to draw a conclusion from these things, but I can certainly supplement what you have said with some rather dramatic examples, i f you would care to have me do so. Senator NELSON. We would like to have them for the record. Dr. FELDMANN. I might simply mention several descriptions, purchase descriptions, which are the only things that we have gotten from DPSC prior to the material you supplied to me. I will be happy to submit approximately a half dozen or a dozen of these chosen simply at random from their listings, but they cover various things, such as optional rotation, specific gravity, very narrow pH limits and so forth. Beyond this, however, they have some other very strange specifica- tions. For instance, under ethynodiol diacetate with mestranol tab- lets, they require that the shape of these tables shall be pentagonal, which is a rather unusual specification, I would think. Senator NELSON. Do they identify the manufacturer who can meet that spec? Dr. FELDMANN. No, and I am not able to, Mr. Chairman. Senator NELSON. Can you see any therapeutic service or thera- peutic benefit from the shape of the tablet? Dr. FELDMANN. I am not aware of any, Mr. Chairman. Senator NELSON. If you hear of any, would you please let us know? Dr. FELDMANN. Under dimenhydrinate tablets, they require that the uncoated tablet shall be yellow in color. Well, this would be logical if the drug substance itself were yellow, but the TJSP XVIII description of this says that it is a white, crystalline, odorless powder. So, again, the *fact that these tablets must be yellow in color would seem to be rather a peculiar requirement. Similarly, the same can be said about ethinyl estradiol tablets, which, again, state that the sugar-coated tablet shall be light tan in color, and the article itself is coloreless. But I think that one that is really the epitome here is doxepin hydrochloride capsules, which specify that the capsules shall have a pink body and a blue cap. Now, the message begins to come through here a little bit, when one reads their purchase description for clindamycin hydrochloride hydrate capsules, on which they issue a correctIon that under the assay the word lincomycin is deleted, and substitute clindarnycin. PAGENO="0268" 10182 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY This would suggest to me that the specifications may, or must have been written from a draft that had a specific company's drug name in originally, and they forgot to delete it in one case. Mr. GORD~N. We ar~ going to get those for the record, are we not? Dr. FELDMANN. Yes. I think that any doubt is removed when one goes to clomiphene citrate tablets, in \vhic.h it states a trade name at the beginning of their bid specification: "shall be the William S. Merrell Company's Clomid tablets, and in addition shall comply with." I do not see how suck a bid specification can go out t.o multiple bidders, or can be competitively bid upon. Senator Ni~sON. That. is one way to insure that you get only one bid. Please go ahead. Dr. FELDMANN. Going on with the four examples from the Na- tional Formulary that were cited in their response. to you, Mr. Chairman, under propylhexedrine inhalant NF, they specify certain assay limits which they claim are higher or will insure greater adherence to a 100 percent of label claim. In fact, their specification ~Ioes permit assay at not less t.han 93 percent up to 90 days, whereas the NF limits are a. minimum of 90 percent for the entire shelf-life of the article. Senator NELSON. What is t.he shelf-life? Dr. FELD1~JANN. Whenever it is offered for dispensing to the pa- tient-in other words, whenever it is in the channels of distribution. Senator NELSON. How can you have a definition of shelf-life like that? There is some termination da.t.e. Dr. FELDMANN. The manufacturer would need t.o state an expira- tmn date if he is not confident or sure that. it will maintain its potency under the normal conditions of storage-or as stated on the label, if there are special conditions of st.orage. If it will deteriorate to an extent that it would fail below the standard, t.hen it is up to him to recall the product and remove it from the channels of distri- biitjon. Senator NELSON. Well, does the manufacturer know what the shelf-life of the product is in all cases? Dr. FELDMANN. I do not know whether he does or not., Mr. Chairman. This should be a. factor in his being permitted tomarket a drug. In other words, this would be a responsibility which a manufacturer should assume. Senator NELSON. Well, does the label show it, the shelf-life? Dr. FELDMANN. Those product.s which are expected to possibly deteriorate or which might be expected to deteriorate would carry an expiration date, or should carry an expiration date, which would indicate a point or a date beyond which the integrity of t.he product could not be assumed. Senator NELSON. Well, then, the specification, if I understood you correctly, of the compendia is higher than the specification of the DOD in this case. Dr. FELDMANN. In our opinion, it is at least as good. That is correct. PAGENO="0269" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10183 The third item that they list is an ophthalmic ointment, contain- ing three antibiotics. And since this is an antibiotic, it is covered by the FDA's certification regulations, and the compendia do not pro- vide separate standards for those in addition to FDA's, so this would not be higher than compendia standards. Mr. GORDON. If this is a form 6 drug, that is an antibiotic subject to batch testing, the requirements are set by the FDA. And, as I understand it, additional requirements cannot be set up by the DPSC. Is that correct? Dr. FELDMANN. I am afraid I cannot answer that question. Per- haps the FDA would be able to. I am afraid I cannot. Mr. GORDON. Because if they batch test it, they have to meet certain FDA requirements. Dr. FELDMANN. I would think if they meet the FDA require- ments, I know of no case where additional requirements above and beyond those should be necessary for an article marketed in this country for public consumption. The final example that they listed for you. Mr. Chairman, is hyaluronidase for injection, which they list that they have certain color limits. The NF states that the article shall be colorless, which in essence is saying the same thing. Senator NELSON. The National Formulary says that? Dr. FELDMANN. Yes, the NF states that it shall be colorless. DPSC also states a solubility time limit, which, again, the National Formulary requires that the article completely dissolve in solution; and DPSC lists a content uniformity test. Now, this may, on the surface, appear to be a substantial added requirement, above and beyond the NF requirement. Well, as it so happens, back in the late 1960's, I had correspondence at that time, when I was director of the National Formulary, with personnel in the DPSC. And in three pages, I tried to explain to them that a content uniformity test in this particular case was entirely superfluous, that the assay and the other provisions of the monograph were such that they assured content uniformity of the article. And, again, Mr. Chairman, I would be pleased to submit this cor- respondence for your record. Senator NELSON. If you would. [Testimony resumes at page 10217. The information referred to follows:] PAGENO="0270" 10184 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1 ~ A M E R I C A N P H A R M A C E U T C A L A S S 0 C I AT 0 N Th~ N~ti~& P~f,ss:o,& S~iUy ~f Ph~a~:Us February 25 1974 Honorable Gaylord Nelson United States Senator Senate Select Committee on Small Business Room 424 Old Senate Office Building Washington, DC 20510 Dear Senator Nelson During the hearings of the Monopoly Subcommittee on February 21 I referred to a number of documents or matters of information in the course of my testimony You requested that I submit copies of pertinent material to you for the Subcommittee record On this basis I am herewith enclosing the following items a. Copies of letters dated September 30, 1969 and October 8, 1969 which I sent (in my capacity at the time as Director of the National Formulary) to Defense Personnel Support Center (DPSC) staff. In particular, I quoted during my testimony from the latter half of the first paragraph which appears on page three of the September 30 letter and which explains to the DPSC staff the fact that a weight variation test and a content uniformity test in the case of Hyaluronidase for Injection would be meaningless and redundant b Copies of pertinent pages of Defense Medical Purchase Discription documents issued by DPSC These include identification of the drug dosage forms involved as well as the specific requirements or specifications j~flI ~j~my `mom as bein -- in pinion .an~i based upon knowledq~~ilab e to me -- ~mnecessay~,n~ meamingIè~s from ~ medical or drug quaLity s~tandpoii~j~, ~`~-e~ 1~é~cited in~j context of the discuss.iop ~?`&Iàtive to examp es 0 D SC requirements whic ma com e i ion amon y eing stru ed in a manner that they escri e a sing e manu acturer's -1- 2215 CONSTITUTION AVENUE, NW,, WASHINGTON, D.C. 20037 * (202) 628-4410 CABLE ADDRESS: AMPHARMA PAGENO="0271" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10185 Honorable Gaylord Nelson -2- February 25, 1974 C. A list of dates and meeting information relative to the Intra-Governnental Professional Advisory Council on Drugs and Devices (IPADD) -- working group on specifications and quality control of drugs of which Mr. Max Feinberg is chairman. During my testimony I referred to the fact that this Committee has met less and less frequently and that meeting minutes were not issued for the past two meetings. I believe this provides all of the supplemental information you requested from me during the February 21 hearing. In the event that additional information or documents are desired, I shall be pleased to attempt to provide them. Sincerely, /~ ~ Edward G. Feldmann, Ph.D. Associate Executive Director for Scientific Affairs EGF :ehb Enclosures PAGENO="0272" 10186 coMI'~nTwE PROBLEMS IN THE DRUG INDUSTRY ~ `~ ç,~ S.ptc~er 30, 396~ mr,1~baMeC,~13cda os~ ~ssice21 ~it ~*~th 1~rm~e*s1 Pupport C.st.r ieo. i~u~aot~ ltieet PbU$uZpb$s, * Z9101 ~ * p~dii~~ So yo~ eo~uoLouttcs det.S~.~8~3~ (IiC~~1Th~a4~*g) with ithich y~ouo1oou* s dreft, ØSoh,~ whew sd ~w fiaa)~ fore, would b.co~ port of ~srsl4 *t*o4ort~. *~*. i, $43 ~. ldtt~ requested tbit our reply be seat vithis 30 d~w, .x would sot. fbr the zecord thet up associate a~ ~Pi;oftiaew~ ~ ~ussd Dodpa, baa k2ap~~dyououd 1~o;~~tt2aY O*~ this: 5tSo7 aorezu~ ti$ 4urisg the post susth.i these dtsseuteas,.be woe isforsod. that our c~~,~vou2*~br scups4~ eat ~y. ow Sato acooret ewes though they did sot ~Ioh~yow~ outil. tI~*~CIote. . *. .~ `, ~ ~ 3~.i 1, ~ A ps1~cLpol rosses forthe delsy. So our ouspouse cea~b.stts1hwted~~ Ia~etfort to. edit or revise your dpeZt bossO ~* our ottbe ~. sosogxsp** Lawolved, the p. Usant ~ $*re$ssd, dd the basis foe each of. these as eall~oa their~azopsr sad Sotsopretattos. Our etfusts is this. regu~t boos'. sot b~ci po$ col*x. successful. b~sievur, aisos wo ore tbo5su~r*~u~ft of your p~odIed spiciftootiow will,ieaaese$ly *~ `$hepiects. results. which you ieIsad.~ Ciii ``Uy~~vp ass. forced to c*clsd. that it would be'~to~est.to piv~'~U1ptth~i.i f the bests of the P~ atseiside eat loie Wto~mte~ ~seor apply this Sotorestios as yas~ see ftt'ls dswole$IS' your.. ~~ap~o&f~owtioso. . . .. ~ ~*. ,~` ~ ,,. ~W hesteoreirech of the I? with rspsstto steefle solids' is 4~. sod coosisteat with our .ppraa* to other dase~ iox.. ~Mtiug .tsbhots sad cppsslas. `. . . b.". ..~ ~ ..~ ~. ~` ~ . .. . . ., . :. . . `~`~&~ Is `theesee of 5t.~tl. solids beviag ditusots preseat' (taos. sre $4$Lf~of by maiogrsph titles *oeduag ~ ~ 1W 1w$ctias"), the sterile solid is required to cosply 1~tb. a ncgnpb rotrie te~iiooe which previOus limits, couplissos with which is Outezeuasd through the Aesey wtiuaiag * pooled sample of a saa~sr of contetusys.: Zn lbs osoc of these aonogxaphs, moreover, the snide asset comply with a opsotticatioc is the monograph cocera1a~ either weight iuntas ~ tian or coatset uatforetty. 1 * PAGENO="0273" 0 LTJ 0 TI I N .1 PAGENO="0274" 10188 COMPETITIVE PROBLEMS IN fliE DRUG INDUSTRY Hr. Thoumns C. fl]accis a 3 September 30, 1969 t* sbuS constitute the general policies involved in drafting the renpecUve *Onoflsphs for NV sterile solids. J~ceptionsaay be ado ona individual basis tot Justified reasons. I sm/enclosing with this latter S tabulation of fl Xii sterile solids end NV XXIX flqUe solids, uhiab may be of interest to you. The P xii sterile nolide do not include the content $nitonit~r test because this' as sin4y introduced in the case of this dosage form Sic xiii. There is sa, ~tency in this - XXI tabuMtiozQ~ In that Oslcrdlaseponide Ibrdrochloride tbr injection should he entitled Sterile atov4issepoxide IWroeh]oride, As initially marketed, this artjela,tmcluded diluests. ~ the ti~e the nonograph was csplet.d, hiwini Us snide availabis costajia no added. subetances but has flpa!ste, dilunnts. Ccnsequsntlj, the monograph title should have been revised *ctordlngijr, although the monograph definition end the content of the noaograph is all satisfeotozy. In the case of fl Xiii sterile solids, the `artl4es are all consistent with our policies wi~th the aflarent Inception ot the monographs Sterile O*ymotrypsin aid fluioajdec for n4e4i0a. Nenever, there are special `cirtastances partainlig to etCh' of these articles which require than to be exceptions to the general policies. These revolve about the that that both an eusyaw products, with peculiar problea associated with the aoaahoaogensity of ensymes. You will mote that in each case (NP XUX page proof, page 169 sad page 3k?), the Aessj directives cell for conducting the Assay cm individuel vials of the article rather than poclad sanpias. As a eoneequence,~ weight variation taste s~sani*ns and the Assay itself nounts to content uniformity, * tiruet that the information provided above will be~ helpfll to psi in nvi*iaE pair specifications. )~ pri$4psl desire tat been to indicate the basis for the NP approach to these~\nonognphe and to p01st out that the appsoach follond not Oflly provides adetuate assurance of suitable standards aid specifications, but that the sta4ard.s end specifications for this type of dosage torn are consistent with other doaage foss such as tablets sad capsu'es. in particu'ar, we find the proposed wording under item S6.k.2. to be espeeiali~ objectionable and would recosmend that appropriate changes be inecarponted, S would *`arther recanond that comparable changes be incOtporated in section $1e.3 of the proposed esentient to N4pral St~rd S. lbaa,I* GOflS;derQd, Sthcerely yours, Edward G.~ ?elduano, Ph.D. Din'i~tor S2spal aslesre `F PAGENO="0275" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10189 October 8, 1969 2~n Peiuberg D.t~e Ysreosed Support Center Directonste of Iledical Material 2800 South 20th Street Philedelpids, N 19101 Dear Mmxi * On Saptimber 30, 1969, I sent a letter to Mr. Itleecta e.bo6yin~ an explanation of the U approach to providing standards and specifications for sterile solids. I have nay received a copy of your letter dated October 1, 1969, addressed to Dx'. Miller, in further connection with this subject (yowr r.ftrenc* DNC.A?TN.'214:kae). ~ end largft, the docunents enclosed with your October 1 letter restate the DPSC viewpoint as previously expressed end as reflected in the draft document which Hr. Ytleecis had transmitted for review and comment. As such, I will not reiterate the 17 viewpoint in these areas, but ~r*ild simply refer you to ~ September 30 letter. Ihere is, however, one now point which is introduced in the enclosures to your October 1 letter which had not arisen before and coucerning which I have, therffar., not previously commented. This is the wetter of sterile solids with added substances which are lyophilized in the final container and for which the NT provides an exemption fron compliance with the Content Uniformity Test, as noted in the enclosure which aecoupasied your letter. Please note that there axe several conditions embodied in the N? exemption which are not specifically nentionad in your discussion of this ennaptiom. These conditions ares (a) that the article was prepared fron a ~, j~4~; (b) that the lyophilination process be performed in the final tcsi~r,I sad (c) that the te~el ~ carr~q t~n~ to this eTI~i La order for the exemption froIthie Contejit Uniformity requirement. Pii~Uy, while am article meeting these three conditions is then exempt from the Content Uniformity requirement, you will note that the 1? specificitioa then states that the preparation is required t~ meet the Weight Ysriation Teat for sterile solids. This exeaption was adopted onl.y after careful consi~[eration by the N? Board and appropriate study of the manufacturing proceduros utilized within the pharmaceutical industry. This study convinced the liatiosal Phrumxlary that such en exemption would be entirely appropriate and would adequately assure suitable potency, homngeneity, and related standards of quality. If the conditioss exist which would ~uslify a product for this exemption, one is PAGENO="0276" 10190 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY blr. Wex Ieiab.rg 2 October 8, 1969 assured of $ )*omogencus distribution of the active ingredient, since it Ia £attiaUy in the form of a true solution. The Weight Variation requirement, ocebined with the assay and rubric definition, then provide compLete assurance of the sstisfactory~quality of the lyophiitzd asterisi]. in the ~individua1 final containers. Consequently, it is our opinion that theretic no basis for the statement in the third ~mrsgrsph of your enclosure which reads "DPS feels the abave~atvu1srds ire inadequate." (Incidentally, the sentence which iiedIgte]y tollovs this quoted sentence does not appear to make sense as it resds*.~it would appear that the word "not" was left out of to. aesoed clause in this sentence.) I trust these additional c~wiments will be helpful to you In prepari~g your Amendments to the Federal Standard for Parenterala. With kind regards, Sincerely, edward 0. Pei4msnn, Pa.D. Director E~Pspnl ~iclosure PAGENO="0277" COMP1~TITIVE PROBLEMS IN THE DRUG INDUSTRY 10191 T~F~ JUN 23 1972 MODIFICATION NO. 3 DATE: 21 April 1972 / , MODIFICATION TO DEFENSE MEDICAL PURCHASE DESCRIPTION This modification forms a part of Defense Medical Purchase Description No. 3, dated 28 May 1970, and covers the following item to the extent specified herein: Federal Stock No. Item Identifi~atiofl 6505-926-8985 DE~CTROMETHORPHAN HYDROBROMIDE 3.1.9 Qicalrot,~on. Delete in its entirety. There in no substitute paragraph. 4.3.2 Assay (dextromethorphan hvdrobromide in the finished preparation). Line 8, delete "282 mu" and substitute "278 mu." 5.2.1 Immediate containers. Add the following new subparagraph: `(i) the following or similar statement:' ~A precipitate may form in the syrup on exposure to freezing temperatures. On warming the precipitate should redissolve. In the event it does not redissolve, discard the syrup." 5.4.2 "intermediate package" and "5.4.3 "Exterior container." - Delete "STORE IN A COOL PLACE (50° - 80° F.)" and substitute: "STORE AT CONTROLLED ROOM TE3~ERATURE (59° - 86° F.)." Page 1 of 1 SSC'l M PAGENO="0278" 10192 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 6~o~926.~898~ (P. P. No. 3) 3.1.3.3 Alcohol. The finished pre~arat~on shafl `assa~r to contain *nol less than 1.1 percent and not more than 1.7 percent ethyl alcohol, by volume, when determined as snecified In 1~ ..3 .3. ~dJ1 Identity. The retention time for the.glyceryl guaiacolate evtracted from the sy~r, shall be the same ~s the retention time of Glyceryl fluaiacolate NJ. Standard when determined as specified in L43.i. 4 cony of the standard graph shall be kent on file at the Defense Ppeonnel Sunnort Center ror use if samoles are subeitted. :3.1.5 Color. The finished r~reparatjon shall have a range of % to 65 nercent transmittance when determined as specified in Lt.3.5, using a IC nercent solution of the syrup. I 3.1.6 rH. The nH of the finished preparation shall be between 2.00 and 3.00 at 25° C., when determined potentiometrically, using the U.S.P. ~s'ethod. 3.1.7 ~necific eravity. The soe~ific gravity of the finished preparation shall he not less than 1.235 arid not more than 1.2% at 25°t~r" when deternttnpd using a pycnometer~ hydrometer, or specific gravity bath~,'p'. 3.1.8 Pefr*actvp Index, The finished preparation shall have a fi réfract~yp jnc~ex of not less than l.~3O0 and not more than l.~tho0, when 9 delerriner' it 25° C., using an Abbe R~fractometer or equivalent instrument ri vms comnarable resultg. 3.1.9 Ontical rotation. A 20 percent solution of the nreparation ~hall hate an optical rotation not less than .85° and not ~tore than .100° when detP~".~1ned using a 100 set tube and a sodium light source, Multiply the observed rotation by 10. .l.lO Flavor and na1~tabflity. The finished syrupshall be ment ho] `ited~ cherry vini lla flavored, and shall be palatable and pleasant t~ the taste with no uneleasant after..taste. Not later than the tine ~recifie~i f~roneninr~ of bids or receipt of nronosals, the offeror shall nubrilt to thr contra~tj n~ ~ffices six (6) individually nackaged samples (eieh centriThin~ ), fl oz)of Pextromethorphan Rydrobromide and Glyceryl 1~ua1acola~e $~yrtrn, rerresertativo of the eroduct which the offeror pro~ Poses to fur~1sh. Two (2) samples will be subjected to nanel testing for a deteryninatjbn ~f' palat,abilit~r (see lt.3.6 Palat,ability test). The remsinirir' sample.s will be used by cognisant Government inspection and ounli ty assurance activities for determining compliance of supplies fi.~rriishcd h~reunder with the nalatability requirement. Approval as to palitabjUty of any sample submitted by the offeror will not constitute anproval Of the sample is to any other requirement of this specification. 2 PAGENO="0279" DPSC FORM ~J87 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10193 ~1L&T1ER AUG 31197? `~ DEFENSE I4EDICAL PURCHASE ~ I"; ~ 6505-26l-72~6 ~ USP, ~ i Snail be Etainyl Estradiol Tablets, USP, and shall be in accordance with all. applicable requirements of Federal Standard Fed. St4. No. l)sOa, dated October 30, 196o, and Amendisent-l, 25 March 1970 and as specified herein. S2. Classification. Shall be type I, class 2, style A, grade 1. S5.2 The following additional requirements and tests are added to this paragraph: Shall be sugar coated tablets containing 0.02 eg of Ethinyl Zstrediol per ~ tablet, within the applicable assay limits for the tablets. Color. The sugar coated tablets shallb htIinii~ ?o~ (~ ~ Not more than 6 ~ionths shall have elapsed from date of eanufactur. until. delivery to the Government. PREPARATION FOR DELIVS2~Y Shall be in accordance with all applicable requirements of Interim Federal Specification PPP.C-00l86a, dated 15 May 1969, and Aaendment~l, dated 27 October 1969, and as specified herein: Immediate containers. Shall comply with the following cI*ssiftcatics: GROUP A CLASS 1 TYPE e ST!LE 2 GRADE 1 CLOSURE A, B, or F SEAL A or B Labeling~ Labeling shall be in accordance with the requirements of the F~deral Food, Drug and Cosmetic Act, and shall include the inforeation re~uir~ below: Iaunediate containers. Each immediate container label shall bear the following information. Rowever, the inforemtioi is not required to appear in the sequence indicated. Page 1 of 3 M SSC-l PAGENO="0280" 10194 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY MT?fthYl,hINATI TArJ~ll, TSP, 0 r~, lOOa Shall a h~c `It ~. ~:t,lets, U.S.P., and shall be in accordance with all app] icabla re .1. ic i. ~`ede ccl Stance tla. hOc, 160 30 October 1966, and ~merarnenf~l, bit .: .bix,ti 11aQ~ and Ca II~aCafI.ed rca fl: :7. `Ocat t'i~;at ,,,,. it. I `ta I, ~ a ic] Imu t ~t. lanai rae ~rem~nt .i i adIaf i tlals paragraph: I . 1 i i, hO `tb ill1, i. yt~ Itt thin the applicable assay TaLli a shalt c .`aiiuw:ttoir~ P.1,7 icaring. it t. snail be acorel. Fee . a. bItt `it Ja.L St~J.i tr. ac"'r .; all ~, .cal']t a ,1:iemCrt f Interim Federal Slactiicaticr PEt-P c:, ~ .~ lacy ~cy in: tacit-nt-i, dated 27 October 1909, and a. ~ ii a. in: ii ` a.., `s. heal mpi~' wilt, tb. faa) alng classification: I.'. ii' , .. `5 `On GRADE 1 or 2 SEAL A or B Ii: :~] I I i ace i a ,. it., t a'- rc"~uIrernents of the c antic ~ a.i ~. ~.da `cc information x~quired ii inn .1.- c 1 i. ~ r label shall bear the fai V'. it' i,.'',' V . . :a 1,~i'c' ".~uired to appear in Ice, ~` *t:I " it, ii' 1 c.) a i . act dc,'rctf.f in a-tie LtIIJJ' . t. jj7a" t a, I'. .1' cIte' . dirt ti, ig ted as I t,.,t Ii::] el''..)' . . S at; p In' 1) Is- DEFENSE MEDICAL PURCHASE DESC~ DPSC~ORM 20i7 M PAGENO="0281" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10195 ~87 DEFENSE MEDICAL PURCHASE DESCRIPTION J~_~~2 *~2~Lrjiif~7i p 3C P 6 ~~1~IA~FTATh ~TH ~ ~ A CL ~Bi~t t 63a Box 1. SCOk~E 1.1 This sr'ecificatio~ covers Fthynodiol Diacetate with Mestranol Tablets, 63s. 2. Af'PLICA131.~ DOCUMENTS 2.1 Unless othen~ise indicated, the issue in effect on date of invitation for bids or request for proposals of the specifications and standards referenced in the body of this specification shall apply to the extent specified herein. These documents may be obtaix~d as directed by the ccntracting officer. 3. PJqUIREMF N73 3.1 Material. Shall be Ethynodiol Diacet.ate wilt Mestr~nol Tablets and shall be in accordance witt~ all applicable requiremements of Fed. Std. No. 1I,Oa, dated 30 October 1966, and Amendment-i, dated 2~ March 1970, and as specified herein; S2. Classification. Shall be tyne I, class 1. Shall be suitatle for use as an oral contraceptive. Sc3 The following additional requirements and tests are added to this paragra~*i: Each tablet shall contain the following: Eftyxndiol Diacetate - 1.0 mg Meats ~nol 0.1 s~ The tablets shall assay to contain between 93.0 percent and 107.0 percent of the labeled strength of Fthynodiol Diacetate, and between 90.0 percent and l]5.C percent of their labeled strength of ?Ieatranol, when assayed as specified in ~ .3.1. The Ethy-nodiol Diacetate powder used jr nt manufacture of the tablets shall be in accorcance .iith the tests, standaras, and requirement a of the U.S.P., inclnding any supplersmnts or revisions thereto. The Mestranol no.ider used in the marnfacture of the tablt-ts shall be in accordance with the tests, standasds, and requir tents of the U.S.?. and, in a~k~ition, sbaU comply with the fo]]*ing: Plethoxyl (ra'iral). Shall contain nct less th~ 9.7~ percent ar~i oct ~ore than I ~ percent of ss~thoxy1 (radic. when aasa~ed by art aprrossi.~e, reyroducible aethod. Page 1 of 6 PAGENO="0282" 10196 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 65O5..935.5~36 (P. D. No. 2) AU other ingredients used in the manufacture of the tablets shall comply with sS.l. 86.li.2 Color. Uncoated tablets shell be white. 86 olt.S Shape. The tablet5 5~?~be n!nta 86.14.9 Disintegration and solubility. Tablets shall meet the * requirements of the U.S.P. tablet disintegration test for umoate~ tablits in not more than IS minutes.. 86.14.10.1 Uncoatèd tablets. Thbl~t.s shall meet the requirements of the Weight Variation Test for Tablets, as set forth in the U.S.P., including any supplements or revisions thereto. 14. QUALITY ASSURANCE PROVISIONS 14.1 Supplier responsibility for inspection. Unless etherwise specified in the contract or purchase order, the supplier is responsible for the per- * formance of all inspection requirements as specified herein. ?xcept as otherwise snecified in the contract or order, the supplier may use his own or any other facilities suitable for the performance of the inanection requirements specified herein, unless disapproved by the Government * The Government reserves the right to perfori any of the inspections set forth in the specification where such inspections are deemed necessary to assure Supplies and services conform to nrescribed requirements. 14.1.1 Records of examinati~Pis and tests performed by or for the Contractor shall be maintained by the contractor and made available to the Government, up*n the Government's request, at any time, or from time to time, during the performance of the contract and for a period of 3 years after delivery of the supplies to which such records relate. * 144.2 No company supplying any ingtedient(s) to the contractor will be considered an acceptable facility for the performance of any inspection * requirements specified herein. 14.2 Sampling and inspection. The classification of defects as shown in Fed. Std. No. 1140k shaUbe applicable. 2 PAGENO="0283" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10197 ~ APR 26 1912 MODIFICATION NO. 1 DATE: 20 March 1972 MODIFICATION TO DEFENSE MEDICAL PURCHASE DESCRIPTION This modification forms a part of Defense Medical Purchase Descripticn~ No. 1~, dated 10 August 1970, and covers the foiloving item to the extent specified herein: Federal Stock No. Item I ication Page i:6505~172279 CHLORPROPAMIDE TABLETS, US?, 0.25 Gram, 250a At top of page, in the block headed "Item Identification" add the following: "I Po'2ENcY-7' 1 60 I Months In the first paragraph, delete the last line in its entiret3 and substitute: "1966, and Amendment-i, dated 2~ March 1970, arid as specified herein." Under "55.2" - In the first paragraph, delete "hypoglyclycemic agent" and substitute "hypoglycemic agent." Under "FREPARATION FDR DELIVERY~' - "Immediate container~" - Delete "CLOSURE 0" and substitute "CLOSURE B or 0" Add "SEAL A or B (for CLOSURE B only)." Page2: Under "Labelin~" - "Imriediati containers" - Delete subparagraph (f) in its entirety and substitute: "(f) the expiration date." Page ~: Under "Marking:" "Intermediate package" - Delete last sentence entirel? and substitute: "Type f Shei.?-Life markings as specified in IiIL-STD-l29 shall he shown." "Exterior container. Delete last sentence entirel~ and substitute: "Type I Shelf-Life markings :.s specified in EIL-STD-129 sh&~ll be shown." Page iofl ssr.~i M PAGENO="0284" 10198 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY ?~DERALSTOCkNO MEDICAL PURCHASE DESCRIPTION ~NUUBtR ~ ~~atl97~ 6505-817-2279 CHL0R?R0PAMIDF~ TABLETS, US?, 0.2~ Gram, 250e Bottle Shall be ChloDorOpamide Tablets, U.S.?., and shall be in accordance with all applicable requirements of Federal Standard Fed. Std. Ito. 1140a, dated 30 October 1966, together with the or~tions and additions stated herein: 52. Classification. Shall be type I, class 1. Shall be suitable for uso as an oral hypoglyclycevnic agent in the treatment of uncomplicated diabetes mllitus of the stable, mild or moderately severe nonketotic, maturity-ons L type. S5.2 The following additional requirements and tests are added to this paragraph: Shall be tablets containine 250 mg of chiorpropamide ~i-(p-ch.orobenzenesulfonyl) 3..propylure~per tablet, within the applicable assay limits for the tablets. 56.1.4.2 Color. Uncoated tablets shall be ~led blue. 56.14.5 Shape. Tablets shall be "I)" shaped. 56.14.7 Scoring. Tabi.ets shall be scored. PRFPARA'rIoN FOR PFLIVFPY Shall be in accordance with all applicable requirements of Interim Federal Snecification PPP~C-O0l~6a, dated 15 May 1969, and Amendment-l, dated 27 October 1969, together with the deletions or additions as indicated herein: Immediate containess. Shall comply with the foiiwir~ classification: (~t0UP A CLASS 1 TYPE a STYLE 2 (PADE 1 or 2 CLOSURF 0 Rape 1 of 3 l79a DPSC FORM ~87 PAGENO="0285" COMPETITIVE PROBLEMS IN THE DRUG INDUSTR~Y 10199 ~~LkHflF?C JUN fl H1e~ INUNSIPS Js*yt DEFENSE MEDICAL PWS* 5_~! ~ 1 11 April 1972 i1~'1':j~: `~`~ - 1 ~ ~ to25o25*.f Pk~. 1 1 This specilication covers Doxepin Hydrochloride Capsules, Equivalent to 25 zeg of Doxepin, lOGe 2 APPLICABL? DOCUMJD~T8 2 1 Specificati.rie and standarde Unless otherwise indicated the issue in effect on date of invitation for bids or request for propo.~als of the specifications and standards referenced in the body of this specification shall apply to the extent specified herein. These documents may be obtainid as directed by the contracting officer. 3 R~UIhEM1iMTS 3 1 Material ~tha1l be Dox.pin Hydrochloride Capsules containing Doxepin Hydrochloride equivalent to 25 mg of Doxepin and shall be in accordance with all applicable requirements of Interin Federal Standard mt Fed Std No 00285, dated 21 July 1911, a~d as specified herein: 52 Classification Shall be t)fpe !, cia. No 3, shape a, grade A, dame 1 Shall be suitable for use as a psychotherapeutic agent. b622 Color Capsules shall have a ~t~bod~ and a hluac&p~ s6.2. 6 Disinteg~ation and solubility. Shall disintegrate in not more than 15 minutes, when tested using the U.S.?. apparatus and procedure for disintegration testing of uncoated tablets, using Simulated Gastric Fluid, T.S, as the isinersion fluid. For the purpose of this test, complete disintegration is defined as that state in which any residue of the capsule remaining on the screen is a soft mass having no recogni:able capeuie shape 56 2 7 Moistura content Shall contain not more than 9 0 percent moistere when determined u trig the Karl Fischer method for water determination, as specified in the U.S.?. S6.2.9 Weight variation. Shall comply with the tJ.S.F.Weight Variation Test for Capsules. In addition, the capsules shall comply with the U.S.?. Content Uniformity Test for Capsules when determined r~ specified in L.3.l.l. SSC~l DP$CPORM Page 1 of lIs N PAGENO="0286" 10200 COMPETITIVE PROBLEMS IN THE DI~u~~ ~1~NTIfK~ JAN 24 1972 MODIFICATION NO 1 ])ATE 19 November 1971 MODIFICATION TO DEFENSE MESICAL PURCHASE DESCRIPTION This modification forms a part of Defense Medical Purchase Description No I dated 26 August 1971 and covers the following item(s) to the extent specified herein Federal Stock No Item Identification 6505 159 ~692 ~~cin Hydrochloride ~ `~sules, Equivalent to 150 ag of Clindarnycin, lOOs 3 1 Material Delete third from last word in paragraph and substitute 1 1 Assay Delete the work Lincomycin and substitute C1indamycin~ ~ 3 2 2 Unfilled cepsules Delete second line and substitute tnanufactt~re of the finished product shall conform to PAGENO="0287" COMPETITIVE PROBLEMS IN TIrE DRUG INDUSTRY. 10201 DEFENSE MEDICAL PURCHASE DESCRIPTION J 1 August 1971 FEDERAL STOCK NO. TOM DENT IF CATION .` POTENCY UNIT 6SOS-1S9-1~E92 CLI ~DP `YCIN HYD'IOCHLORTDr HYDRATE C? TJi~ 2L~ Bottle Equivalent to 1~0 mg of Clindamycin, lOOs Months 1. SCOPE 1 1 This purchase description covers Clindasoycin HFdrochloride Hydrate Capsules Equivalent to iSO mg of ClindanFcin 2 APPLICPBLE DOCU 1EN'~S 2 1 Specifications and standards Unle s otherwise indicated the is ue in effect on date of invitation for bids or request for proposal~ of the specifications and standards referenced in the body of this pacification hail apply to the extent specified herein. These documents say be obtained as directed by the contracting officer. 3. REQUIREMENTS 3.1 Material. Shall.be Clindamycin Hydrochloride Hydrate Capsules, equivalent to l~O mg of clindasycin Base. Shall be suitable for use an an antibiotic. Shall conform to the applicable regulations for the Certification of Antibiotics and Antibiotic-Containing Drugs as promuigate~ by the Food and Drug Adriinistration, U. S. Department of Health, Education, and Welfare. Each lot shall be certified by the F.D.A. In addition to complying with the F.D.A. regulations, the finished capsules shall comply with the following requirements: 3.1.1 Assay. The capsules shall assay to contain not less than 90.0 per~n~ and not more than 120 0 percent of the requiree amount of Lincosoycin i~hen assa o~ in accordance with the applicable F.D.A. procedure. 3.1.2 Weight variation. The finished capsules shall comply with the requirements of the U.S.P. Weight Variation Test for Capsules. 3.1.3 Identification. The retention time of the clindamycin peak of the sample preparation in the assay is identical, within experimental error, to that of the Clindamycin Hydrochloride Hydrate Reference Solution. 3.1.~i Filled capsules. The filled capsules shall be uniform and free from manufacturing or other defects, such as, cracks, dents, splits, specks, etc. Page lofS SSC-l M DPSC FORM 2087 REOLUCER OLOSC FOOD TRIUD/Il, `OAR SM. RAICK DILL OCT*8 SE UREA UNTIL D~P~E,~ED, PAGENO="0288" 10202 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY F") JIlL ~ DATE, 28June1972 APP tOVED !4~ D~JG APPLICATIOII REQUIR&) The supplier of any item(s) listed belm, must possess, at time of award of contract for such item(s), a New Drug Application which has bess approved by the Food and Drug Administration. Item Identification 6505-181-7678 CLOMIFFIENE CITRATE TABLETS, SO ag, 30s Pege 1 of I SSC-]. N PAGENO="0289" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10203 ~Ef [NSF MIS [! L P~a~'H&SE ~ R(PT ON L l~17b Cl P ~AP1~S, ~O ~, ta~~~r t~ ~`ach tablet shall contain ~O rip of Clomiphene Citrate. Shall be supplied 10 tshl'th as specified her (n. Not more than 6 months shall have elansed from the date of ranuCanture t.~ the date of delivery to the Oovornment. PRFPAPA'lION FOP rtFLTv~wf Shall be in accordance with all applicable reoutrements of Thte"im Federal Specification PPP-C-00156a, dated l~ May 1969, and Amendment-l, dated 27 October 1969, and as specified herein: I~ediatecontainers(1oflpacke~. 3hall comply with tbc following Fach tablet shall be packaged in a hermetlcafly sealed, aluminum foil packet. LabelIng. Labeline shall be in accora'ance with the renOirements of the Feder~ Foed, Drue, and Cosmetic Act, and shall include the i'fcrsiation rmqui red below: Immediate containers. Each Immediate container (pscket~ shill be nermanently an~I leg) b)y mart~l with the tot or control nuahe-. Unit nackaper Fach unit nackare shall bear the following information. Powever, t~ normaTI~n ii. not required to appear Ic the serluence mdi ated: (a) lab-lint' information In accordance with cemmerri al pract `p (b) the iteri name designated as "CLO"fl HEN F' CITRATE TABLETS" (See additional labeling information on nare 2) Fa~e 1 of It .RC-). N )PSC FORM 2087 ~ . 32-814 (Pt. 24) 0 - 74 - 19 PAGENO="0290" 10204 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY February 15, l97L~ Intra-Governmental Professional Advisory Council on Drugs and Devices (IPADD), Working Groupon ~pecifications and Quality Control of Dr~~ 10-6-70 Working group reactivated 10-27-70 Meeting (Washington) 12_1I_70 Meeting of Subcommittee on Plastic Containers (Washington) 2-16-71 Meeting of Subcommittee on NDA's (Washington) 3-17-71 Meeting (Washington) 8-12-71 Meeting (Washington) 5-25-72 lVleeting (Washington) 10-17-72 Meeting (Philadelphia); ~ - (no minutes issued) 9-211_73 Meeting (Perry Point); I (no minutes issued) 7~I02l5 PAGENO="0291" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10205 tntteb ~Stafcs ,S~nnate DICK CLASS, ISSA SELECT COMMITTEE ON SMALL BUSINESS CSSSTSS S. SMITh, (CREATES PUSSSAST TS S. SEA. ES, 51ST CKSSRSSS) STAFF CIRSCTSS ASS SSSSSALASSSSSL WASHINGTON, D.C. ZUS1O February 22, 1974 DtA Edward Feldmann American Pharmaceutical Association 2215 Constitution Avenue, NAWS Washington, OS C5 20037 Dear Dr. Feldmann Thank you very much for your very valuable contribution to our bearings on government procure'S meat of drugs. In order to complete the hearing record on this subject, it would be grenusy apprcciated if you would send us a detailed ann1yG~s of the Dcpartmcnt of Defense data which our staff has submitted to you for your study. Kindest personal regards5 Sincerely, GAYLORD NELSON Chairman Subcommittee on Monoply PAGENO="0292" 10206 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY AMERICAN PHARMACEUTICAL ASSOCIATION The Notioool Prof.eeonoI Society of Phermec,ste February 25, 1974 Honorable Gaylord Nelson Chairman, Subcommittee on Monopoly Senate Select Committee on Small Business Room 424 Old Senate Office Building Washington, DC 20510w Dear Senator Nelson: This will respond to your letter of February 22, requesting that I analyze and comment upon the information submitted to the Senate Subcommittee on Monopoly by the Department of Defense, as per your request to them dated January 17, 1974. I will restrict my comments to those subject areas in which I feel qualified, and I will not comment upon such aspects as the budgetary and fiscal matters, relative allocation of personnel, and so on. For purposes of ready reference, I have organized my review of the DOD response in the following areas which I will comment upon in turn: (a) plant inspections, (b) product testing, (c) problem drugs, and Cd) specifications. a. Plant Inspections DOD's response to your question 1 reveals that DPSC, in fact, surveys only about 10% of their prospective contractors and that this 10% is the result of a conscious selection process. In other words, DPSC has already concluded that the remaining 90% constitute prospective contractors which are fully capable -~ in the judgment of DPSC of performing satisfactorily under the terms of the proposed contracts. Therefore, combining this information with the ee45% r~jection rate0 for fiscal year 1973 mentioned in DOD's answer to question 15(a) -- results in a true rejection rate of only 4.5% of all prospective contractors; that is, fufly 95.5% of the contractors submitting a bid during, fiscal year 1973 were judged by DPSC to be capable to perform under the terms of the proposed contracts. -1- 2215 CONS1frLjrto~ AVENUE, NW., WASHINGTON, D.C. 20037 * (202) 828.4410 CASLE ADDRESS: AMPHARMA PAGENO="0293" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10207 Honorable Gaylord Nelson -2-- February 25, 1974 Under your question 15(b) to DOD, you requested the names of the firms, the dates of the "gross violations," whether or not they were reported to FDA, etc., and the exact description of the violation. Further elaboration was requested under your question 15(c). Although DOD's response under 15(a) stated that during FY 1973 there were 97 rejections based upon plant inspections, DOD did not provide you with the specific information you requested relative to these 97 cases; instead, as stated on page 11 of their response, they simply provided "examples" without comment as to how these examples were chosen by them. Since there is no indication that DOD selected these examples purely at random, and since your request was couched in terms of the "gross violations," it is logical to assume that the examples they provided to you were actually the most extreme or serious violations among the 97 identified during FY 1973. Turning to the list of violations supplied by DOD as "examples," it will be noted that there is a total of 12 entries for FY 1973. Certain comments can be made based upon inspection of the information provided relative to these 12 entries: `.The nature of the violations is such that they are essentially technical in nature, and are minor and/or easily correctable. (Your hearing record indicates that an FDA spokesman has characterized them as "relatively trivial.") -- Of the 12 entries, Zenith Laboratories of Northdale, New Jersey, is listed twice, thereby2 reducing the number of plants to~a total of 11. -- Of these 11 plants, 3 are located in Puerto Rico and one is located in England. -- There appears to be no correlation between these 11 plants and the size or "reputation" of the company involved; 5 out of the 11 examples appear to be plants operated by member firms of the Pharmaceutical Manufacturers Association (the PMA has approximately 130 member firms) while' 6 out of 11 are not PMA member firms. (There are probably several thousand drug companies operating in the United States which are not members of the PMA.) b. Product Testi~ The DOD answer to your question 3 reveals that it is their' practice to make a preliminary determination of what drug products should be subjected to laboratory analysis in contrast to those which can be judged 3uitable without such PAGENO="0294" 10208 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Honorable Gaylord Nelson February 25, 1974 testing. The DOD response specifically reveals that only 5% of the drug products obtained based upon contracts awarded are, in fact, subjected to laboratory testing -- the remaining 95% are judged satisfactory based upon other DOD information. Combining this response with the information provided in the second paragraph of DOD's answer to your question 15(a) -- in which they give the ratio of drug samples rejected to drug samples tested -~ the composite true rejection rate in terms of total drug samples involved, amounts to less than 2.5% (that is, 42% of the 5% increment). In other words, over 97.5% of all drug product samples offered are judged satisfactory by DOD-DPSC. No breakdown was provided by DOD relative to the 136 cases which they recommended for rejection during FY 1973; therefore, no comments can be offered relative to the severity of the alleged product deficiency or upon the appropriateness of the finding on which the rejection was based. c. Problem Drugs In your question 15(d) to DOD, you requested specific information relative to findings made by DPSC personnel, as well as action taken by DPSC personnel, concerning problems pertaining to digoxin tablets. You also asked DOD to name the "many other examples" referred to by a DPSC spokesman, along with other specific information pertaining to these "examples." During my testimony before the Subcommittee on February 21, I commented specifically concerning apparent inconsistencies or peculiarities in the DOD response pertaining to digoxin tablets; since comments on this matter are already part of the hearing record, I shall not repeat them here. With respect to the "other examples," DOD's response mentions that such information has been obtained through two sources; namely, the "published literature" and "complaint reports received by DPSC." Concerning the published literature, they cited two dxamples (one of which, incidentally, is published by the American Pharmaceutical Association, the organization which I represented in my testimony before the Subcommittee). Such publications are generally available, and anyone having an interest in drug quality could be expected to be as familiar with them as the DPSC spokesman. Consequently, this does not represent any special information source beyond what is widely available and already known to FDA, the official compendia, and health professionals involved in procuring or selecting drug products. PAGENO="0295" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10209 Honorable Gaylord Nelson / -4- February 25, 1974 The "complaint reports received by DPSC," as tabulated in the DOD response, listed only a total of 6 drugs -- it is a matter of personal opinion as to whether this relatively small number truly constitutes "many other examples." Moreover, examination of these 6 items reveals the following: -- Most of the complaints are rather old and, in fact, only one (November 16, 1973, regarding Cortisone Acetate Tablets) has been made since July 1971 -- fully two and one-half years prior to your request to DOD. Indeed, the latest complaint concerning Thyroid Tablets was in October 1961, and the latest complaint concerning Diphenylhydantoin Sodium Capsules was in May 1966. This paucity of complaints suggests that few drug problems either have occurred in recent years, or remain today. -- The first 4 complaints relative to Nitrofurantoin Tablets were filed in 1961 and 1962; since USP XVII, published in 1965, identifies this ~rug as still being under patent as of 1965, it would appear that the article was available only from the single manufacturer who held the patent -- and at least these initial "complaints" would have pertained to that company's product. -- There is no indication in the DOD response as to the nature of the specific problems or complaints associated with the 6 drugs listed. For example, to my knowledge, the only publicized problem which has come to light relative to Nitroglycerin Tablets pertained to the packaging of the article. Consequently, even among these six drugs, one or more "examples" listed in the DOD response may very well not be "bioavailability problems" in the sense that this term is usually used. d. Specifications Provided Your question 15(e) requested DOD to provide information to document the DPSC claim that they "develop definitive product specifications which often exceed official or commercial standards." In the DOD response they provided a listing of drug articles along with the additional DPSC requirements and their explanation. During my testimony before the Subcommittee on February 21, PAGENO="0296" 10210 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Honorable Gaylord Nelson -5-- February 25, 1974 I commented in detail concerning the four articles appearing on their list which are recognized in the current National Formulary. Consequently, I will not repeat those comments here. Moreover, following my testimony, Dr. Daniel Banes testified on behalf of the USP, and during his appearance before the Subcommittee Dr. Banes offered his views relative to comparing the DPSC "additional requirements" with the specifications in the current USP. Hence, I also will not comment here on the so-called additional DPSC specifications for the USP articles. ** * * * * I trust that the above comments will provide you with the analysis and evaluation desired by the Subcommittee. If I can be of any further assistance, or if you desire clarification relative, to any of my comments, I shall be happy to cooperate. Sincerely, ~ Edward G. Feldmann, Ph.D. Associate Executive Director for Scientific Affairs ehb PAGENO="0297" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10211 A M E R I C A N P H A f~ M A C E U T I C A L A S S 0 C I AT I 0 N The N.t~on.I Prof.sswn~I Society of Ph.rm.c~sto February 27, 1974 Honorable Gaylord Nelson Chairman, Subcommittee on Monopoly Senate Select Committee on Small Business Room 424 Old Senate Office Building Washington, DC 20510 Dear Senator Nelson: This will respond to your request that I supplement my letter to you of February 25, 1974, with a review and analysis of the second increment of information sent to ~ou by the Department of Defense. In view of the fact that this information was only recently received in this office, coupled with the fact that you have requested my response promptly, my analysis of necessity has had to be both concise and relatively general. In the event that a more detailed response even on an item~by-item basis is desired, I will undertake to provide such an effort at your additional request. Turning to the specific material provided by DOD, the data under "tab A" and "tab B" all appear to pertain, to matters about which I did not comment in my February 25 analysis. Consequently, I have no comments relative to these sections. On the other hand, the information provided under "tab C" does contain supplemental information relative to one question about which I had commented earlier; namely, question 15(e), in which you had requested that DOD-DPSC name the products for which additional specifications have been developed by them, and that they indicate the signifi- cance and purpose of these extra requirements. In essence, the DOD in its original response dated January 30, had provided a representative sampling of drug items along with the so~°called "additional requirements" they have developed and applied to these drug items. In testifying before the, 2215 CONSTITUTION AVENUE, NW. WASHINGTON,. D.C. 20037 * (202) B2$.4410 CABLE ADDRESS: AMPHARMA PAGENO="0298" 10212 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Honorable Gaylord Nelson -2- February 27, 1974 Subcommittee on February 21, I reviewed the NF articles included in this sample that they provided, and I offered my general conclusions. Later that same day, Dr. Daniel Banes testified on behalf of the USP, and he offered a very similar assessment and opinion with regard to the USP articles in that sample listing. Based upon my review of the current material submitted by DOD as its second increment of information, I have concluded that the general assessment I presented on February 21, can be applied with little, if any, modification to the entire list of NF items which the DOD has just submitted. -- The overwhelming majority of so-called "additional requirements" are identified in the DOD list as "classification of defects," as defined and explained in the explanatory notes which accompanied their January 30 letter. This "requirement" is desirable or perhaps necessary for contractual purposes. This does not constitute a standard of quality in the usual sense; therefore, while such a requirement may be useful for administrative purchasing purposes, it should not be considered as, nor confused with, quality specifications. -- A very substantial number of the other "additional requirements" are of such a nature that they may contribute to the elegance or aesthetics of the product, but they have no apparent relevance from the standpoint of medical value or safety of the article. -- A very significant number of so-called "additional requirements" are already covered in the overall NF standards and specifications -- either in the pertinent monograph, related monograph for the active ingredient, or in some other section of the NF pertaining to general product specifications. (A list of selected examples, along with comments, is appended to this letter for illustrative purposes.) -- And finally, there are a fe~i "additional requirements" which are not currently specified in the National Formulary for the pertinent drug items. In most of these cases, it is not apparent that such additional requirement is either neces~;ary or serves a meaningful PAGENO="0299" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10213 Honorable Gaylord Nelson February 27, 1974 purpose; however, without any supportive information or explanation from DOD, it is impossible to make a judgement that they do or do not serve a useful purpose. However, I would emphasize that at most, these represent a very few isolated incidences and that they probably total less than 2% of the so-~called "additional requirements" listed by DOD in connection with the complete listing of NF items. * * * ** I trust these comments will be of assistance to you in your evaluation of the material submitted by DOD. Sincerely, Edward G. Feldmann, Ph.D. Associate Executive Director for Scientific Affairs ehb Enclosure PAGENO="0300" February 27, 1974 Comments On "Additional Requirements" listed by DOD/DPSC regarding selected National Formulary (NF) articles, appearing in second increment of DOD response to Senator Nelson's request of January 17, 1974. These comments prepared by Edward G. Feldmann, Ph.D., American Pharmaceutical Association. [Note: The listing submitted by DOD was not page niii~E~red, nor were items in alphabetical order. These comments are presented on drug items in the same order that they appeared on the DOD listing.] Name Additional Requirement Comment (EGF) Chloral Betaine Tablets, NF, Additional test requirement Melting Range of Chloral Betaine cannot 0.50 Grain, 30s for the active ingredient be determined either with accuracy or (Melting Range) consistency due to inherent nature of compound. Hence, inappropriate as a standard or specification. Therefore, it is in the NF monograph, but is given under the heading of "Description" to distinguish from an enforceable standard. Cyproheptadine Hydrochloride Free Hydrochloric Acid There is no reason to expect any free Tablets, NF, 4 mg, lOOs hydrochloric acid to be present, and even if there were, it would be a micro- quantity since there is only a total of 4 mg of active ingredient per tablet. Moreover, in light of the composition of gastric fluid there is no medical purpose served by this limit. Aspirin, Phenacetin, and Moisture Content The NF monograph provides a test and Caffeine Tablets, NF limit for the deterioration product which would result from any moisture present. This is a more meaningful standard in judging the quality of the product. -1- PAGENO="0301" -2- Name Additional Requirement Comment (EGF) Benzonatate Capsules, NF, Identity The NF monograph specifies two identity 100 mg, lOOs tests and both of them are quite o specific. Additional tests for this purpose are redundant. Ammonia Spirit, Aromatic, Removal torque for closure The NF monograph specifies packaging 1/4 pt on immediate container in a "tight container" which is defined in the General Notices, and which provides ~ adequate protection for the product. Hydralazine Hydrochloride Weight Variation The NF monograph includes a Content Tablets, NF, 25 mg, lOOs Uniformity test, which is even more precise than the Weight Variation test, making it superfluous for this item. Cli Methylprednisolone Sodium Content Uniformity Contrary to DPSC statement, the NF Succinate for Injection, NF, monograph does require compliance Equivalent to 1 Gram of with Content Uniformity specification. methyiprednisolone Methyiprednisolone Sodium Content Uniformity (ditto; see above) Succinate for Injection, NF, Equivalent to 40 mg of methyiprednisolone 0 Methyiprednisolone Sodium Content Uniformity (ditto; see above) Succinate for Injection, NF, Equivalent to 125 mg of methyiprednisolone Soap, Green, NF, 25 lb Vegetable Oil (Cottonseed NF monograph does require use of a Oil, Corn Oil, or Soya suitable vegetable oil, and specifically Bean Oil) excludes coconut oil or palm kernel - oil. Additional requirement is redundant. PAGENO="0302" -3- Name Additional Requirement Comment (EGF) Phenazopyridine Hydrochloride Additional identity test NF monograph specifies two identity Tablets, NF, 0.1 Gram, lOOs tests, both of which are quite specific. Additional identification tests are redundant. Undecylenic Acid Ointment, Iodine Number NF monograph for the active ingredient Compound, NF, 28.35 Gram does include such a test and specification. `d NF requires all dosage forms to be prepared with active ingredients complying with their pertinent standards. Hence, this specification is redundant here. .1 PAGENO="0303" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10217 Dr FELDMANN In other words, it makes a nice little piece of added window dressing, but it adds nothing to the integrity of the article. Senator NELSON Would you please explain what you mean, the content uniformity is assured ~ In what way is it assured ~ Dr FRI DMAN~~ It is assured in this particular case because the assay provides-let me just-I will not read the three pages of the letter, but let me read just a couple of pertinent sentences from my response In the case of the NF XIII sterile solids the articles are all consistent with our policies, with the apparent exception of the monographs for Sterile Chymotrypsin and Hyaluronidase for Injection. However, there are special circumstances pertaining to each of these articles which require them to be exceptions to the general policies. These revolve about the fact that both are enzyme products vuth peculiar problems associated with the non homogeneity of enzymes. You will note that in each case the Assay directives call for conducting the Assay on individual vials of the article rather than pooled samples. So the assay, as it is done in each particular case, is to take mdi vidual unit vials Therefore, a content uniformity test, which is also to take individual unit vials, is simply duplicative of the assay Senator NELSON I see Go ahead Dr FELDMANN Returning to page 9, Mr Chairman If such as the case, pharmacists and physicians should be made aware of the facts in order that they might take appropriate pro- fessional action even before FDA takes legal action to remove such products from the marketplace. In APA's role of monitoring and disseminating such information, we have attempted to obtain specific details from DPSC as to which drug products have been rejected and the basis for rejection, as well as which drug manufacturers have been judged to be unsuited to manufacture products of ac ceptable quality Regrettably, our efforts in this regard have to date met with abso- lutely no success. In light of the fact that our informal requests for such information ha'~ e been repeatedly rejected, this past Septembet a formal request for such infoi mation was filed with the Defense Supply Agency of DOD under provisions of the regulation entitled Availability to the Public of Official Information, as it was promul gated in the Federal Register Again, this effort failed to elicit the kind of information we seek And I have provided you, Mr Chairman, with copies of our correspondence as exhibits F and G Mr. Chairman- Mr GORDON Dr Feldmann, this is rather puzzling in view of the statement the DPSC makes that: "A close working relationship exists between DPSC and the personnel of the FDA, the U S Pharmacopeia and the National Formulary" Here you are unable to get information from them, and they claim you have a very close working relationship What is the explanation ~ PAGENO="0304" 10218 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Dr. FELDMANN. I think that largely, Mr. Gordon, this depends upon how one defines "a close working relationship." It is true that we have had contact with them when we have sought information; they have at times provided it to us, such as the purchase specifi- cations, which they have made generally available to all bidders, so that this was not unusual information. But other than that, they have not provided us with much information and, certainly, none of the information that I have just described here-namely, where they have encountered problems, and what drugs they have en- countered problems with, and so forth. We have made a practice of trying to supply them with informa- tion. I note in yesterday's testimony of Commissioner Schmidt he mentioned any number of areas that FDA has provided informa- tion to the DPSC and DOD. Again, unfortunately, there has been little response, very little-it has been sort of a one-way street. This organization mentioned earlier, this Intra-Governmental Pro- fessional Advisory Council on Drugs and Devices, has a working group on specifications and quality control of drugs. This working group is chaired by Mr. Feinberg of DPSC, and the meetings of this group have been progressing with less and less frequency. They have had only one meeting in over the last year and a half. There have been no minutes issued from these, at least from the last couple of meetings. I do not know how else I can characterize this, Mr. Chairman, but I think that the idea of "a close working relationship," perhaps is a subjective evaluation, but I think it may be a bit exaggerated here. Mr. Chairman, it is our position that pharmacists require factual information in order to be able to select and dispense quality drug products which will be safe and effective for the needs of the patient. Moreover, it is also our position that the pharmacist requires such, information in order that he might be able to select, from duplicative drug products of comparable quality, that product which will represent the most reasonable cost to the patient. If the Department of Defense has information which would be useful and pertinent in distinguishing between good and bad drug products or in distinguishing between good and had drug manu- facturers, it is our plea that your committee see that such informa- tion-which was developed at taxpayers' expense-be made publicly available, so that it might be used to the public's benefit. We intend also to continue our efforts to obtain such information from DOD directly. By the same token, if the suggestions of widespread avail- ability of defective drugs-and of widespread existence of incompe- tent manufacturers-represent exaggerations, hyperbole, or unsup- ported propaganda, then you committee would certainly render an equally beneficial service by exposing the truth of the matter. Thank you, Mr. Chairman. Senator NELSON. You state on page 9 that you made in September a formal request for such information "was filed with the Defense Supply Agency of DOD under provisions of the regulation en- titled Availability to the Public of Official Information as promul- PAGENO="0305" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10219 gated in the Federal Register dated September 6, 1973. Again, this effort failed to elicit the kind of information we seek. Then you say "See correspondence appended as exhibits F and G." I have not looked at that correspondence. Are you saying that your request, that their answer was unre- sponsive to your request? Dr. FELDMANN. Yes, I am, Mr. Chairman. This was one of a number of requests we have made. We have made other requests we have *asked the DPSC people, following their statements that there is so much percent of manufacturers that are deficient and so much percent of products, if they would provide us with such information. And on this, nothing was forthcoming to us. We used this route that I mentioned-as provided for in the Federal Register-to ask for a list of such manufacturers, and their response was, "we have no list." I am gratified that you have been more successful than we have been. It has been as difficult as pulling teeth to get an answer out of these people, or to pull something out of them. Senator NELSON. They said to you they had no such list? Dr. APPLE. Oh, yes.. Senator NELSON. That is hard to believe that they developed some statistics on rejection, but they do not keep any track of who the manufacturers were. Dr. FELDMANN. They told us that, "please be advised that such lists are not developed or maintained by the DPSC or the Defense Supply Agency; thus we cannot respond to your request for stich information." This is in Colonel Kimerer's letter to me dated October 18, 1973, which is exhibit G, the first paragraph of that letter. Mr. ADAMS. Dr. Feldmann, I just want to clear up a couple of points, if I may. Thank you, Mr. Chairman. In your response to one of the Chairman's questions you read from some DPSC or DOD bid specification sheets? Dr. FELDMANN. Yes, sir. Mr. ADAMS. These specifications were circulated, and perhaps continue to be circulated, supposedly requesting competitive bids? Dr. FELDMANN. I would assume that that is the purpose of them, yes, sir. Mr. ADAMS. Am I to understand, further, that these sample speci- fications in at least one instance, contain the name of a particular drug manufacturer, and in another case the brand name of a particular drug, followed by an amendment to the bid specification, replacing the brand name with the generic, non-proprietary name? Dr. FELDMANN. Yes, sir, that is correct on both counts. Mr. ADAMS. As to the drug list supplied by DPSC, which you previously commented on, I understand that list contains at least a portion of DPSC's list of drugs for which they have additional specifications. Do you recall listing the additional specifications from the list of drugs the Committee supplied to you, which the Committee received from DPSC? PAGENO="0306" 10220 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Dr. FELDMANN. Yes, sir. This is not the bid specifications, but rather the material supplied to the `Committee; yes, sir. Mr. ADAMS. Now, in no case were there an additional specification that dealt with th~ safety or efficacy of a ding mentioned in your opinion? Dr. FELDMANN. I addressed myself only to those drugs that are recognized in the National Formulary. I deferred response to those in the LTSP. WTit.h respect to those in the National Formulary, ni my opinion, approximately half of the asPects referred to were matters that are not of a medical significance. In other words, color-excuse inc-taste, and specific gravity, t.iungs of this nature, for the formula. Now, concerning the other half, that could be regarded as having a medical significance, or a quality significance., I concluded that there were none of those requirement.s which were not adequately covered by the existing National Foi-mulary specifications; so that. indeed, there were n~ specifications among those listed by the DPSC in their response, which would have led one to believe that the product would thereby be of a higher quality, or would need to be of a. higher quality, in order to meet their standard than if it simply met the NF st.aiidard. Mr. Ais~rs. Limiting yourself simply to t.ha.t list., would it be fair to say that. making an additional requirement dealing with taste, color, and shape would yield a higher bid price? Dr. FELDMANN. That they would warrant a higher *bid price? Mr. ADAMS. That is correct. Dr. FELDMANN. Unless I were t.o see some specific reason for it, that I am presently unaware of-in my opmion, no, it would not warrant a higher bid price. Mr. AD~rS. As to the other list, the bid specifications, I just want t.o make sure I understand it correctly, in t.he cases where the Gov- ernment. orders drugs under their generic name, it is generally less expensive than ordering drugs under a. brand name. Is that an accurate generalization? I realize there may be some exceptions? Dr. FELDMANN. It is my understanding that all DPSC bids are made under the generic name, so that all of the specifications, there- fore, are titled by the generic name. The Chairman drew a conclu- sion ~from some of this information, as I interpret it, that the speci- ~ca.t.ions could be designed in such a way that only one product would meet all of those. I just take note of that conclusion. Mi'. ADAMS. Thank you, Mr. Chairman. Senator NEI~soN. On February 1, Dr. Edwards, commenting on the issue in general-and I think he also was commenting, on the bio- availability question-stated before the Health Subcommittee of the Labor and Public Welfare Committee: Nevertheless, based upon present knowledge, I believe that with very few exceptions, any drug prescribed in this country, will give the same thera- peutic results as any other chemically equivalent product e regard this issue as lixilited, well-recognized, and manageable. PAGENO="0307" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10221 What would be your observation about that statement by Dr. Edwards? Dr. FELDMANN. I'll ask Dr. Apple to respond to it first. Dr. APPLE. Basically, the association supports that observation by Dr. Edwards. We went into considerable detail at the Senate Sub- committee on Health on that subject. WTe do recognize there are drugs that are subject to inequivalency. We are doing a great deal of work, through both our Academy of Pharmaceutical Sciences and our Academy of General Practice, to try and identify actual prob- lem drugs. As I indicated in my testimony on February 1, we cannot support negative hypotheses with regard to this subject. There are some people who want to refer continuously to probabilities-of things that may happen. Today, it is commonly recognized among scien- tists that we may have, 15, 20 or some such drug entities of that magnitude that are subject to this problem. Other scientists talk about the probability of there being 70 of them, or 80 of them. We have got to deal with the real world, because our pharmacists are dispensing real drugs to real patients every day. I recognize the value of this scientific exercise, on the part of people who are interested in this, and we encourage them to pursue that type of scientific investigation. But I do not think it can be used to characterize the present status of the Nation's drug supply, or the quality of the Nation's drug supply? In other words, Mr. Chairman, I would say that I cannot think of a pharmacist who would knowingly and wantonly dispense a bad drug to a sick person. Senator NELSON. Well, is not the truth of the matter really that the Pharmaceutical Manufacturers Association is not really saying that we do not have high-quality drugs in this country; nor is the DOD. The Pharmaceutical Manufacturer's Association will say that we have got the finest drugs anyplace on earth, manufactured by our members. What they are really trying to say, or are saying, is something quite different; that you cannot trust anybody who does not make brand names. Is that not the heart of the matter? They are not attacking the quality of the production of their members, but what they are attacking is those who do not carry a brand name, those who com- pete under a generic label at a much cheaper price. Is that not what they are really doing? Dr. APPLE. Mr. Chairman, there are times when I do not know what they are attacking, because they make 95 percent of the Na- tion's drug supply, and I cannot think it through on the basis of brand or generic name, because some of their manufacturers-PMA members-also make generic-labeled products. Likewise, in the other 5 percent, you have a number of firms that produce products under brand names. Now, you get on a juxtaposition here that just does not make sense, if you try to rationalize it out in any way, shape or form. On the one hand, you cannot claim to be producing 95 percent of PAGENO="0308" 10222 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY the Nation's drug supply, and you cannot be claiming that we make high-quality drugs. And on the other hand, say there is someone else who makes bad drugs. Well, who are they, and what percent? They have to fall within that 5 percent, or less than 5 percent, and we want to know who they are. We do not believe it, frankly, Mr. Chairman. Dr. FELDMANN. Mr. Chairman, I would like to add a little bit to what Dr. Apple has said here. I think it goes beyond simply the brand name versus generic name aspect that they are attempting to muddy the waters with. I think that they have attempted, in a type of psychological warfare, almost, to create a climate of distrust, so that the individual practitioner-and this is especially true of the practitioner who might have an opportunity to choose between dif- ferent company~s products-would be fearful of making his own decision. In other words, you could have three or four brand name articles, but they do not even want the pharmacist to be able to select among those. So they have created an atmosphere of fear, of concern, so that the guy is afraid to make a choice, because he thinks he is taking a chance. So I think this really is at the heart of the matter. Incidentally, in Dr. Apple's response a minute ago-I believe he meant to say that some people have said there is a potentiality that there might be 70 drugs involved in this matter, and he inadvertently said probability; this is just to correct that record. Mr. GORDON. Where did you get that number, 70? Dr. FELDMANN. I believe Dr. Cavallito mentioned it in his testi- mony before Senator Kennedy, and you will recall that we tried to emphasize, following his testimony, that in each case, he did qualify his statements by saying, potential bioequivalence problems, potential inequivalency. Now, there is a great deal of difference between "potential" prob- lems and actual problems, and I think that that is a distinction that all of us, and particularly your committee, Mr. Chairman, must not overlook. What has, in fact, been the record; what has, in fact, been the number of therapeutic failures; how many drugs, actually, will present a problem; and once a problem has been identified, continue to represent a problem? And that has not been adequately corrected, and is not just ancient history now? Senator NELSON. I think the testimony was yesterday on the ques- tion of bioavailability, that there were perhaps 12 or 13 cases of such problems. As a general proposition, the same compound, the same salt, and the same dosage form will produce the same result therapeutically, with limited exceptions which have been discovered. I suppose there will be some in future dates. But it is a limited, manageable problem. `Would that be a correct statement of the issue? Dr. FELDMANN. I think that that would represent our assessment of it. Mr. Chairman; yes, sir. Mr. GORDON. You mentioned that the Pharmaceutical Manufac- turers Association's members manufacture 95 percent of the drugs. PAGENO="0309" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1U22~i Are you sure that the proper stateme~it is that they market 95 per- cent of the drugs? You know that a large number of drugs which are marketed by the big companies are produced by smaller com- panies. Dr. APPLE. Mr. Gordon, I can get you the exact quote. Wait a moment-I may have it here. I think they use the word "produce," where I use the word "manufacture," where you are using the word "market." Mr. GORDON. I recall, in the early part of our hearings, the Geigy Co., for example-before they even built a plant in the United States did not manufacture any drugs in this country. They ~just bought them from small companies, put their own label on them. I think during the Kefauver hearings, it was disclosed that-J think it was Parke, Davis-manufactured only about 20 percent of the items they marketed. So I am just wondering if the 95 percent- maybe they say produce-but I am wondering if that is really what they mean. Dr. APPLE. I do not recall that the term has ever been defincd by PMA, but let me just say, in the context of testimony presented to State legislatures and to the Congress, the term is used in a context in which, I think, the average listener would at least gain the impression that they are saying that our members are responsible for 95 percent of the Nation's drug supply. They do iiot characterize it finely. I can get the exact wording for the record. I think it is produce. 1 could be wrong there, but I would rather submit it. Now, as to what it means, I would have to agree with you. It does not say that they-it does not imply that they are the actual fabricators. It says imply that they take final responsibility for the quality of the product going out under their label, and I think that is important. [Testimony resumes at page 10230. The information referred to follows :3 PAGENO="0310" 10224 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY PMA PRESCRIPTION DRUG INDUSTRY FACTBOOK, 1973 The PMA.. The Pharmaceutical Manufacturers Association is a non-profit sci- entific, professional and trade organization. Its active membership comprises 115 firms that are principally engaged in the manufacture of prescription pharmaceutical and biological products; these are primarily promoted to medical and dental practitioners licensed by law to administer and prescribe them and are dispensed by licensed pharmacists. Financial support is derived mainly from dues based on the annual sales volume of member firms. Membership in PMA is voluntary, and consists predominantly of manu- facturers that produce ethical pharmaceuticals for their own label and who also are engaged in a significant research effort. ~pr~ ent members acc~~J~r apirc~teate~ 95 p~rc~~ ~ prescrtpt~ and over-the-counter "ethical" products, as well as half of the free world's supply of such medicines. PMA was founded in 1958. It is the successor to the American As- sociation of Pharmaceutical Chemists, organized in 1907 and re- named the American Pharmaceutical Manufacturers' ~riat~on in 1922; and to the National Association of Manufacturers of Medicinal Products, founded in 1912 and called the American Drug Manufac turers Association after 1916. PMA is governed by a 30-member Board of Directors, one-third of whom are elected each year at an annual meeting of the membership. There cannot be more than one Board member from any one firm and two new members must be selected each year. The Association's work is facilitated by ten functional units, known as Sections; these are composed of representatives of member firms ~r ~. organii~tic'i wh~ work closely with the permanent staff on nume' ~us projects. The staff of PMA is organized into five major divisions: Research and Planning; Legal; Scientific and Professional Relations; Public Relations and International. PAGENO="0311" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10225 The Industry At A Glance SaIe~ and Growth Total domestic and overseas sales of ethical drugs (human & veterinary) by U. S. firms: 1970 $6.9 billion 1971 7.4 billion Forecast 1972: (estimate) 8.1 billion Earnings (Manufacturers), 1911 On Sales 9.5% On Net Worth 17.9% Employment, 1971 In the United States 142,970 Overseas 97,650 Total 240,620 Price Levels Government wholesale (manufacturers level) price index for ethical pharmaceutical products (1967 = 100) 1970 99.2 1971 98.8 Rese~.rch and Development Expenditures: 1971 $684 million 1972 (budgeted) $728 million Scientific and Technical Manpower 11,310 Productivity: New Single Chemical Entities introduced to the U. S. Prescription Market from: 19404971 898 1972 14 lnt~ratsonal Operat:~m:, 1~i71 Foreign Sales $2.4 billion * **`; *:~~ 1~j:~. Personnel 23.8 million Exp~n~rures Fiscal 1971 $75 billion PAGENO="0312" 10226 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY PMA PRESCRIPTION DRUG INDUSTRY FACTBOOK 1973. lndustry Structure Periodically, the government analyzes industrial concentration based upon the Commerce Department's "Census of Manufactures" data. According to the latest report, published in 1967, 1,130 establish~ ments produce pharmaceutical preparations. (As defined, an "estab. lishment" is a statistical concept which itemizes each plant location as a separate entity. This differs from a "firm", in that a firm may include two or more divisions of the same corporation.) Data gathered by the U. S. Treasury Department (again, 1967 is the most recent year reported) indicate that individual corporations filing "drug and pharmaceuticals" corporate returns numbered 1,265. Not all of these firms, however, made prescription pharmaceuticals. Table 3 provides a breakdown of market shares for companies in various sales size groups, as compiled from PMA surveys. The PMA estimates that perhaps 60~0.700 firms in the United States produce prescription products. Many of these firms are quite small. P~~AreI~!esents fl5~nanufacturer~~ both larRe and small~~ Table 3. U.S. Market Shares by Sales Size Group, 1970 $25450 350 Less than $25 538 ______ $4,701 (5) AN other companies. Firm Sale Size (millions) Total Sales By Group (millions) Percent of Domestic Market Number of Companies $200 & over $1,793 38.1% 6 $1004200 1,244 26.5 9 11 $50410c~ 775 16.5 7.5 10 11.4 100.0% PAGENO="0313" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10227 account for anoroxjjnatelv~~ oercent gf ~ DreSfrjpti9lI orodL1c~f~ s~iin tjiej)nited States, ai~dan estimatei 50 percent of total free- - world output. The prescription pharmaceutical industry is not dominated by any one firm. In 1971, the largest firm's share of the V. S. ethical market was only seven percent. The 10 leading firms accounted for 51 percent of the total. Each of 37 companIes had an ethical product volume totaling $30 million or more. Nineteen firms had sales of more than $100 million; 15 had sales which exceeded $200 million. .D~ring the year, an additional firm joined the ranks of the $300 million-and~over group, bringing the number of firms in that category to seven. The asset size of firms in the "drugs and medicines" industry is reported periodically by the Internal Revenue Service. This informa- Assets - $100 million.' or more From 50 million to 99 million I From 5 million to 49 million ~rom 50,000 to 4.9 millIon From zero to 50,000 Zero *ssets. ~ All corporations tion is summarized above. These figures are not comparable to those in Table 3, since the IRS definitions are based upon a broader def- inition of "drug" company than PMA employs. However, as shown in Table 4, the majority of the firms had assets in 1968 (the most recent year for which statistics have been compiled) of less than $5 million. Taxes Total taxes paid by the prescription pharmaceutical industry in 1970 declined for the first time in the history of the PMA survey of men' ber firms' operations. The $828 million in such outlays was 5 per- cent less than that ifl 1969. U. S. federal taxes, which had risen by 25 and 15 percent respectively in 1968 and 1969, dropped from Table 4. Drug Manufacturing Corporations by Number of Companies 21 `.3. ~ 440 18 Asset SIze, 1968 (Do!lars--add !~CU) 6,161,697 244,868 ~` 629,505 .268,239 1,422 $7,508,292 PAGENO="0314" 10228 COMPETITIVE PROBLEMS IN THE DRUG INDIYSTRY ~~ey Report. `71-72;~. ~a~mace.~1-~ Industry Operations Research and Development Activity FOREWORD Each year the PMA surveys its member firms' sales, operations, research and development expenditures, employment and R&D manpower. These data are then compiled into a report which reflects the prescription and over-the- counter ethical pharmaceutical industry for that year. The 1971 survey is the 13th in a series of reports which began in 1959. The report is intended to provide information which will be useful to industry executives, financial analysts, educators, and other interested groups. PMA is *DrofiL1c!~e~aiS0Ciati0fl and renresents 115 nhsfV~,~ ~~I1 firni~th~t ~srtwicj~ about 95 rceiof the ecal drugs in the United Siatco and about 50 percent of the world supply. The cOoperati~'~l member firms in providing data for this survey is gratefully acknowledged. GROWTH PiCTURE OF ETHICAL DRUG SALES AND RESEARCH & DEVELOPMENT R&D SALES (millions) (millions) $900 ~9,0C0 800 ~ 8,000 700 /-~ 7,000 600 ---`- / / 6,000 World Sales, U.S. Firms / ~ 500 . ,r ~ ,&~. 5,000 ~ ~ *15* 400 5 4,000 S,, `~°"..s"~N&~ - 5_S 300 - s ae~ ~` 3,000 - `` * Sales (U.$) --5, 200 - ~ ~4'~' --2,000 100 ~-~- `~°"° - 1000 1950 `55 `60 `65 `70 `71 `15" *(J5, Dooest~c Dosage Form, Humao-Use Sales *0 Eslimala PAGENO="0315" COMPETITIVE PROBLEMS IN THE DRUG INDUSThY 10229 The Pharmaceutical Manufacturers Association is a ison-profit scientific. proh,'~- sional and trade orginization Its activc inembersiup comprises 136 firms piti ipall engaged in production of prescription drugs-those which are primarily promoted to )ractitioners licensed by law to administer and prescribe them and dispensed h~ ii censed pharmacists Mernkershrn is voluntani._TF~e uxesent members accosuit soi upwards of 95 p±_c ofUS sales of oroçljicts of the ethical ~ PMA was founded in 1958 It is the successor to the American Assure ti ii Pharmaceutical Chemists organized in 1907 and renamed the American Pharina uti Manufacturers Association in 1922 and to the National A socistion of Maiiu4 icturer of Medicinal Products, founded in 1912 and called the American Drug Manutacturer~ Association after 1916. Objectives 1 To encourage consistently I igh ta idard of pote s y quality a d purity for pharmaceutical and biological products for the cure, mitigation, treatment, prevention or diagnosis of disease. 2. To encourage research toward development of new and better nie- dicinal products, better facilities aiid methods for tb~; pharmacological aid clinical evaluation of theth, and safer methods for their manufacture, pack- aging and transportation. 3 To disseminate information to and on behalf of the pls srmaceuti al industry, on governmental regulations and policies and other subjects of interest to the industry 4 To work onstantly and closely on a vsry broad trout with )thci ~t fessional associations or groups is the health ficld with allied iudnst and with governmental authorities for the advancement of medical science. PMA, PRESCRIPTION DRUG INDUSTRY FACT BOOK 1968 (-_-_ A Few~W~rds About PMA L (Continued inside brick core") -j PAGENO="0316" 10230 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Senator NELSON. Well, I think quite clearly they market 95 per- cent, but since they also purchase from generic manufacturers, the latter are also producing some percent of that 95 percent. Up until about a year ago, there was not any bulk meprobamate produced in the United States. All was imported into the country. Domestic manufacturers merely put it into tablet form and then put it into bottles. Carter-Wallace, the marketer of Miltown, produced the drug neither in bulks or finished form, but merely put its own label on it. I ask that a speech on this subject be inserted in the record at the appropriate place. So it would be interesting to have the statis- tics. I suspect the reason they are trying to upset the Crown law in California is it might be a good opportunity to find out how much is produced by the manufacturers that their association is attacking all of the time, and that could be embarrassing. Dr. APPLE. We have the same problem, frequently, with pharma- cists in terms of convincing our own membership as to who is the actual manufacturer-_a pharmacist may inquire as to a certain product, and we inform him that that product is actually being made by so-and-so for the well-known company that is distributing the product, and the first reaction of the pharmacist is total dis- belief. But when we can cite some of the evidence to them, the pharmacist then says, "well, why should I not buy it directly from Mylan, or Strong-Cobb-Arner, or this firm, or that firm, instead of buying it under a brand name from the other manufacturer ~ And this is one of the issues that is involved in the so-called Crown Act. Now, the Food and Drug Administration is requesting additional statutory authority from Congress now to improve its capacity and ability to function, and we have specifically suggested already to Dr. Edwards that the legislation the administration is currently seeking ought to be amended to include the requirement of the identity of the actual fabricator of the dosage form. Senator NELSON. Thank you very much. Gentlemen, we appreciate your very valuable testimony this morn- ing. Dr. APPLE. Thank you, Senator. Senator NELSON. Our next witness is Dr. Daniel Banes, Director, Drug Standards Division, United States Pharmacopeia. Dr. Banes ~ STATEMENT OP DR. DANIEL BANES, DIRECTOR, DRUG STANDARDS DIVISION, UNITED STATES PHARMACOPEIA, ACCOMPANIED BY DR. JOSEPH G. VALENTINO, EXECUTIVE ASSOCIATE, UNITED STATES PHARMACOPEIA Dr. BANES. Thank you, Mr. Chairman. I am Daniel Banes, Director of the Drug Standards Division of the United States Pharmacopeia, and I am accompanied today by an associate of the headquarters staff of the United States Pharma- copeia, Dr. Joseph G. Valentino on my right. My professional history and qualifications are detailed on the PAGENO="0317" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10231 opening page of my prepared statement, and I will dispense with a recitation of them.' . Mr. Chairman, I am grateful for your invitation to discuss with you the question proposed by your subcommittee, namely, how well is the quality of the Nation's drug supply being monitored and protected by our system of compendial specifications and standards coupled with FDA's enforcement of them. My answer, in brief, ]S that the system is working quite well, comparatively speaking, but that it could and should be working much better. I should like to enlarge upon that response in several dimensions. In the first instance, if we consider progression on a time scale, there can be no doubt that the standards and specifications of the United States Pharmacopeia are far more perceptive and more de- manding than they were 35 years ago. Similarly, the potentialities of the Food and Drug Administration in monitoring the quality of our drug supply has been considerably extended during that time. The regulatory powers of the Food and Drug Administration have been significantly strengthened by several amendments to the Fed- eral Food, Drug and Cosmetic Act of 1938-most notably the Ke- fauver-Harris Amendments of 1962, and the Good Manufacturing Practice provisions of that amendment. Furthermore, the remarkable advances in all of the pharmaceutical sciences during the past 3 decades and particularly in drug analysis and biopharmaceutics, have stimulated the adoption of more exact- ing requirements in governmental and pharmacopeial standards, and in manufacturers' drug quality control programs. Second, if we compare the quality of the drug supply and the effectiveness of drug regulation in the United States with those en- countered elsewhere, we can again affirm that we have much, to which we can point with pride. The drug industry of the United States, the U.S. Food and Drug Administration and the United States Pharmacopeia are generally cited as the hallmarks of pre- eminence in pharmaceutical circles throughout the world. Only Canada, Scandinavia and parts of Western Europe-and I should add Japan-approach or equal the levels of excellence that we have established. None of them surpass us to a significant degree. Senator NELSON. Well, outside of Scandinavia, which countries in Western Europe.? Dr. BANES. Great Britain. The United Kingdom is at the stage where it is about equivalent to, or approaches. the standards set by the United States. Senator NELSON. In addition to Canada and Scandinavia, does England have safety and efficacy requirements? Dr. BANES. Yes, sir. They do. The British laws have been modified during the past few years, and they have approached the system now in effect in the United States. Senator NELSON. How about the question of advertising? Dr. BANES. In some respects advertising is even more restricted in some of these countries than in the United States. Furthermore, `See page 10748. PAGENO="0318" 10232 COMPETI~IVE PROBLEMS IN THE DRUG INDUSTRY most of these countries requii e registration and licensing of all drugs during definite periodic intervals, which in my opinion is a more stringent type of control than we have in the United States today A third dimension to be considered in evaluating the effectiveness o:1: the present drug system is the climate of attitudes toward the regulation of drug production and distribution. It seems to me that there is a growing recognition among drug manufacturers that strict compendial standards and active governmental enforcement of these standards-measures intended primarily to protect the con sumer-also benefit the drug industry itself I base this statement on the observation that many quahty con trol scientists employed by industry now collaborate actively on t voluntary basis in helping to improve the standards and specifica tions of the USP for use as regulatory measures by the enforcement agency Such an attitude not only reflects an awareness among en lightened members of the industry that these endeavors are neces sary to ensure the quality of drug products in the market `Lnd to protect the good health of both the consumers and the producers It also iesults in adherence to good manufacturing practices within the factory, and the establishment of strict internal quality controls Please note that I have referred to enlightened members of the industry, for it must be admitted that the laudable attitude I have described does not command a unanimous consensus In my mm istrations as Director of the USP Drug Standards Division, I have sensed a reluctance on the part of some few companies to releise scientific information necessary to the progressive development of sound public standards for drugs. Previously, as an official of the Food and Drug Administration, I had reason to believe that more than a few companies were oblivious to the principles of good manu facturing practices nd quality conti ol At USP we rely e~cclusively upon voluntary cooperation and the `tssessment of empirical scientific evidence by peer group review Withholding of significant new dati would result in the persistence of mediocie, irchaic stindards and inalytical tests, unless the miss ing information can be developed by more cooperative scientists else ~ahere in industry, or by research laboratories in the acidemic or Governmental sectors Fortunitely, we have been able to enlist thc aid of several interested research laboratories in this enterprise, particularly those of the Food nd Drug Administration Another `ivenue for eliciting informitmon leidmng to the revision of tests md standards is i new USP publication entitled "Comment Proof" This periodicil, circulated on subscription, shows the tenti tive monogriphs for drug irticles md the chapters on generil tests proposed for adoption in forthcoming USP issuinces, miter de liberitions by panels of USP idvisers The TJSP Committee of Revision receives comments and recom menditions for chinges in these proposils from representitmves of tride `issociations and of indmviduil minuficturers, from Govern ment officials, including those~ from the Defense Personnel Supply Center, the National Institutes of Health, the Veterans Admiii- PAGENO="0319" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10238 istration, and the Food and Drug Administration; from scientists iii schools of pharmacy and medicine; from scientists associated with foreign pharmacopeias, foreign companies and foreign governments; and from unaffihiated scientists writing as private individuals. It is my responsibility to review these comments, in concert with the responsible subcommittees of the TJSP Committee of Revision. We then incorporate those changes that are deemed scientifically valid and explain to proponents why certain changes they suggested have not been adopted. . In this manner, the TJSP evolves publicly scrutinized, objective, scientifically verified standards, and practicable tests and assays, through the collaborative efforts of disinterested scientists. Senator NELSON. May I ask a question which we asked Dr. Apple also? The Defense Department spokesmen have stated that they develop drug specifications that often exceed official or commercial standards. What is your observation about that? Dr. BANES. I have examined the responses sent to me by DPSC. When we circulate "Comment Proof' they respond as well as these other scientists I have mentioned. They sometimes say, we think certain standards ought to be adopted, see the specifications that we have put out. And they insert these specifications into our record for "Comment Proof." My general impression is very similar to that narrated to you by Dr. Feldmann. For the most part, I would say they are trivial. In some instances, they are so exacting that you wonder why they were set up as they were. For example, on the monograph for sulfasoxazole. (This is a sulfa drug. We have many such drugs in the U.S. Pharmacopeia with their standards, specifications and tests and assays.) I find in looking through the specifications sent by the Department of Defense that the tablets are to be examined by a method of analysis called X-ray diffraction. Now, this is an approach that requires a tremendous piece of apparatus costing in the neighborhood of $50,000 or $100,000. But when I examine the data to be obtained by this test, I see nothing that goes beyond what is already in the specifications. And here is a test to be applied which is superfluous, gives no more data than is already available from more readily procured equipment. And the question arises, what is the point of such a requirement? H 1~were to suggest to our committees of scientists that we add this specification, they would say, What on earth for? We have already pinned down the identity and quality and the purity of the material by means of our simpler tests. Why should we go to this one? On top of it, we have a specification for the sulfisoxazole that goes into the tablet, requiring a chloride determination. Well, chloride determinations are worthwhile in some instances, and they are provided in many of the monographs, but not for these sulfa drugs. But in addition to this trivial requirement, the method to be ap- plied and so specified in the write-up given by the Department of PAGENO="0320" 10234 COMPETITIVE PROBLEMS IN THE DRUG INDUSThY Defense is that it shall be done by X-ray fluorescence. Again, it is a question of shooting down a dragonfly with antiaircraft artillery. And at the end of it all, you ask what you wanted to bring down the dragonfly for in the first place. These are really superfluous. This is not to say that all of their suggestions are of the same nature. When there are good suggestions that will improve the quality of the drug or the language of the standards, we do proceed to adopt these recommendations. Senator NELSON. Have you adopted any of their recommendations ~ Dr. BANES. Yes, indeed we have. Senator NELSON. In what nature ~ Dr. BANES. With respect to constituted solutions of injectables. In one of their comments, the Department of Defense said that they favored a specific statement in the Pharmacopeia that these mate- rials, which are prepared for injections or dried powders to be dis- solved, dissolve completely and be colorless and be free of signifi- cant particulate matter. Well, we have adopted that statement and it will be included in all of the pertinent monographs in the USP. There was a statement with respect to ophthalmic ointments, that all of these be sterile. The Department of Defense stated that in 1966 and 1971-I am paraphrasing-they asked for sterile ophthal- mic ointments, and in 1973 finally the TJSP and the NF and the FDA took action. Well, the fact of the matter is that while I was with the Food and Drug Administration, the divisions under my supervision were doing the research on which that sterility test is based, that in 1970 when the 18th revision of the USP was published there was still doubt about the adequacy of the equipment available and the re- agents, so that the USP did not contain the statement that ophthal- mic ointments be sterile, but that as soon as a collaborative study in which FDA participated, and in which I think in fact FDA led, when these difficulties were resolved, a method of sterility was adopted. In 1971 the lISP came out with a requirement that ophthal- mic ointments shall be free of certain microorganisms, staphylococcus and pseudomonas, and in 1972 the interim revision said that here- after all ophthalmic ointments in the lISP will be sterile, because by now we had confidence that the method would work. As a matter of fact there are still criticisms of the method and we are still purifying the reagents. But this is a mode of improving standards which is progressively pursued by the national compendia, by the lISP and the National Formulary. Now, the Department of Defense had the idea that these things should be sterile. FDA wanted them sterile and certainly tested all antibiotics to make sure that they were. As soon as the standards, as soon as the methods of analysis were available, the standards were promulgated. So here is an example of where DOD says we should have sterile ointments, everybody agrees we should, and as soon as scientifically we can support that position we adopt a standard, and there it is. Senator NELsoic. Thank you. PAGENO="0321" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10235 Dr. BANES. Continuing on page 5: USP does receive funds for services rendered under not-for-profit contracts with Government agencies where these projects bear upon the improvement of standards or test procedures, regardless of whether the drug products involved are USP articles. Although TJSP is increasing its standards-setting activities and the 19th re- vision of the TJSP now in preparation will contain 38 percent more monographs for drugs than TJSP XVIII, the fact is that there will be no public compendial standards for more than half the drug products on the market. We believe that USP could quickly move to fill this void with appropriate support through not-for-profit contracts. We must recognize, however, that regardless of the virtues written into compendial standards, they will remain meaningless dead letters unless they are effectively enforced. Under delegation of authority from the Secretary of HEW, the Food and Drug Administration is charged with responsibility for enforcing the provisions of the Federal Food, Drug and Cosmetic Act. The agency cannot dis- charge its responsibilities adequately unless it has the requisite in- formation and resources. We are aware of charges that FDA does not inspect drug factories frequently enough to determine whether good manufacturing prac- tices are in fact observed, or has failed to take notice of defertive manufacturing practices known to officials from other agencies. In regard to the latter charge, it would be well to ascertain whether the alleged violations were indeed called to the attention of the responsible agency in a timely manner, and if not, why not. Unless the Food and Drug Administration has authenticated infor- mation, it cannot be expected to initiate punitive or corrective action. It is our impression at USP that FDA does react rapidly to rectify problem situations. Under a recently instituted project, USP has been in a position to bring certain drug product problems to the attention of both FDA and the drug industry. To our knowl- edge, FDA has moved promptly to investigate these problems and to deal with them. The other charge, relating to a low frequency of factory inspec- tions, is far more serious in its implications. If it is true that FDA cannot investigate and correct poor manufacturing conditions among unenlightened producers because it does not have an adequate force of trained drug inspectors, then there is indeed a deficiency in the present enforcement of drug control standards. If this deficiency exists, it must be eliminated as rapidly as pos- sible. It seems to me that if there is a group of trained drug in- spectors elsewhere in Government ~agencies, they should be trans- ferred to the Food and Drug Administration forthwith, in accord- ance with the principle that the agency responsible for enforcing the laws should be given the needed resources that will enable it to do so effectively. Furthermore, a cadre of inspectors within FDA should be trained intensively for drug work and centralized under the direction of the agency unit responsible for monitoring drug quality. Specia1i-~ 32-814 (Pt. 24) 0 - 74 - 21 PAGENO="0322" 10236 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY zation and centralization has markedly improved the efficiency of the FDA analytical drug laboratories during recent years. A similar regrouping of its drug inspection capabilities should likewise result in more efficient operations. I believe that the measures proposed for strengthening the drug control apparatus of FDA, together with our own progress in strengthening USP will eventually permit an unreservedly affirma- tive answer to your original question-that the system for monitor- ing and protecting the quality of the Nation's drug supply is work- ing very well indeed. If you have any questions, Mr. Chairman and staff, I should be pleased to respond. Thank you. Senator NELSON. As I recall, yesterday-and the record will speak for itself-that the testimony of Dr. Schmidt was that there was about 800 inspectors in the FI)A. I believe that he said about 800 or a few more. And that wherever problems arise they will have inspectors there as long as is necessary to solve the problem, that many of the com- panies producing a substantial percentage of the drugs in the coun- try are inspected much more frequently than the statutory require- ment of once every 2 years. But they have now a computerized sys- tem whereby any company that has not been inspected within the 2-year period, the computer kicks out the names and that they are all then inspected within the next 6 months. They go to the top of the list. I have no notion of what may be required. I suppose if a company has a good quality control system, once every 2 years may be per- fectly adequate. If it does not, once a month may not even be ade- quate. But the system they described rather impressed me as a pretty efficient, effective system, though I have no basis for making a judgment as to what the optimum or ideal frequency of inspection would be. Do you? Dr. BANES. No, sir. I do not. And I would leave that to the ad- ministrative judgment of those responsible for it. In the past I believe that these inspectors available to the Food and Drug Ad- ministration were assigned to all of the problems that come under its purview, and one of the difficulties there is that when you have a crisis hazard due to food problems there are no inspectors avail- able for a steady continuous attention to drug problems. The point of my discussion, Senator, was that in my opinion there ought to be a group of highly trained specialized drug in- spectors who are continuously assigned to these drug problems, and when crises arise on~ the drug side the attention should be given. But this of course is the responsibility of the officials who are charged with that responsibility. I note that the President in his health message has requested an augmented staff of inspectors for FDA, because I am sure they could use a far greater component of inspection force than they now have. Mr. GORDON. Dr. Banes, with respect `to the use of these large machines you mentioned to perform unnecessary assaying or testing, PAGENO="0323" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10237 would it be fair to say that if not the intent, at least the effect, is to eliminate competition? Dr. BANES. Well, the effect is to limit the number of laboratories that are capable of doing that kind of an analysis. And if the speci- fications say that this chloride determination shall be done in the following manner, then that effectively limits the number of lab- oratories that can do that test. Mr. GORDON. Now, how important and widespread is the problem of lack of bioavailability? How many drugs do you know of that have this problem? Is this problem manageable by the FDA? Would you comment on that, please? Dr. BANES. Well, there have been many, many references to prob- lems in bioavailability. In my opinion, the number of authenticated episodes of lack of bioequivalence among chemically equivalent products for which there are compendial standards are a handful. The numbers have a habit of varying. I would say somewhere be- tween half a dozen and a dozen authenticated cases of lack of bio- availability when the products actually meet the standards that are set up for them. And where we have recognized these problems, investigation has shown the reason for them, and we have taken regulatory measures to eliminate these problems. Digoxin tablets have been mentioned here and it seems to be a very popular example of this kind of problem. And I think it should be, because it is the most significant one that we have en- countered because of the high toxicity of digoxin. It is a very im- portant drug. It is very important for heart patients. It is very widely i~ed, and if the tablets do not deliver the active ingredient to the bToodstream in a predictable manner, then difficulties will result. Dr. Feldmann spoke about the timeframe, that methods of analy- sis for digoxih in blood were developed only within the last 5 or 10 years, that in 1971 the paper by Lindenbaum of Columbia tTni- versity and his associates first pinpointed the problem. Following his discovery there were many other studies that confirmed his results. Some of these studies showed a very good correlation between bio- availability and rate of dissolution of the tablets. That is, if the digoxm tablets dissolved very quickly, then there was good, uniform bioavailability. If the tablets dissolved very slowly, then you can expect that the tablets will not deliver the active ingredient. As a consequence, TJSP was the first in the world to adopt a dissolution standard for *digoxin. tablets. Although the problem was widely recognized, TJSP was the first to set up a standard. FDA followed it up with a certification program, so-called, for digoxin tablets. And in my opinion, given these two quick reactions, with a strict clis- solution standard and FDA's program, there should be no problem in the future with cligoxin. I should say that digitoxin tablets will, in my opinion, present a similar problem. But we are moving there to preclude it without waiting for further evidence from scientists throughout the world. PAGENO="0324" 10238 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY There are two further footnotes that I would like to make for the record with respect to digoxin tablets: First, the worst problem in bioavailability of digoxin tablets emerged in Great Britain with the original producer of this drug, the manufacturer who had had the lengthiest experience, the largest production in the United King- dom. Serious problems were encountered with bioavailabihty that they did not know about, but which were discovered only later in practice, and they were serious because of the widespread use of that manufacturer's product. Furthermore, the problems of bioavailability in Scandinavia were minimal, and in my opinion one of the reasons for that is that the Scandinavian Pharmacopeia sets standards not only for the finished tablets, but also gives a specified formulation, that is a fixed formula, for digoxin tablets. It says it must possess digoxin and only certain other inert ingredients which it enumerates, and then says it shall be punched in a certain manner. One of the difficulties in this country was that manufacturers used their~ own imagination in incorporating inert ingredients and punching in any manner that they wished, and consequently some of these other ingredients interfered with the dissolution of digoxin from the tablet. That was one of the factors. So in my opinion, this fixed formula, this requirement of the Scandinavian Pharmacopeia did eliminate some of the bioavail- ability problems. Mr. GORDON. Why do we not have a fixed formula for all drugs? Dr. BANES. That has be&n suggested, but that has never been a principle in the standardization of drugs for the most part in this country. I should say that there are fixed formulas for some types of products, and such formulas are in both the U.S. Pharmacopeia and the "National Formulary". Such articles as phenobarbital elixir have definite fixed formulas. Anything which purports to be pheno- barbital elixir USP must be made in accordance with that formula. But that is true only of a small number of drugs in the United States. Mr. GORDON. If you have a fixed formula~, then, for most drugs, you would not have a problem of bioequivalency, is that correct? Dr. BASES. Well, I think that would be too sweeping a statement. I would hesitate to predict. It is always risky to prophesy, and I am sure problems will emerge. But in my opinion, with certain drugs such as digoxin tablets, a fixed formula which is known to deliver the active ingredient in a predictable manner would be helpful. It might be helpful for some of the most important drugs, among which I would include digoxin tablets and digitoxin tablets Senator NELsoN. Thank you very much. Mr. Adams? Mr. ADAMS:Just one question, Dr Banes. As to the drugs that have ~ bioavailability problem, regardless of the number, are there any general statements you cmi make about them? That is, are they all new drugs or new comnbiuations ~ PAGENO="0325" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10239 Or are they critical in the treatment of common diseases. Are they generally the drug of first choice? How common is their usage? Do they fall into any of those kinds of groupings? Dr. BANES. The drugs I have in mind are widely used and are of importance. As a general statement, the active ingredient is usually a substance which is difficultly soluble in aqueous fluids, so that when it goes into the stomach it does not readily dissolve and might pass through the whole gastrointestinal tract without being trans- ferred to the bloodstream. It is a question of transference from the inside of the gastro- intestinal tract through the walls of that tract into the bloodstream, and if the material is very difficult to dissolve then it might not get into the bloodstream at the crucial points of the GI tract, and consequently will not be absorbed and go to the target organs. Important drugs have been involved. I mentioned digoxin and digitoxin. Chioramphenicol was the subject of a bioavailability prob- lem. Some of the Corticosteroids-all of these are important drugs. They all fell into that same category, somewhat difficultly soluble. Now, for the most part the problems arise with such things as tablets and capsules which are swallowed and then require dissolu- tion and the other steps in absorption. If you have a simple solution of a salt which is to be injected then there is no problem of bio- availability if it meets all of the standards. If it is pure and of high quality and the strength is proper, it is in solution and it is injected in the proper manner, then there is no question it will get into the bloodstream or the target organ in the correct manner and there are no problems. It is most usually with tablets and capsules containing active ingredients that are difficult to dissolve that the problem does de- velop. Mr. ADAMS. Thank you. Mr. GoRDoN. I have one more question. What about the other drugs mentioned by the DPSC, which, they claim, have turned out to be ineffective? Do you recall that material? Dr. BANES. Yes. There is a more extensive number of USP drugs and NF drugs, and I did not want to take the time to enumerate them. But in general my observations were like Dr. Feldmann's. For the most part, their specification as to color or colorless- Mr. GORDON. They claim they are ineffective drugs. For example, diphenyihydantoin and nitrofurantoin. There are a few drugs that they claim they found to be ineffective and about which they had complaints. Dr. BANES. Well, they had complaints that a particular batch did not do what it was supposed to. Let us take nitrofurantoin, which is a tSP drug and has been for some time. In a certain proportion of users the drug is ineffective. In a certain proportion of users it leads to adverse effects. Mr. GORDON. No matter who manufactures the drugs? PAGENO="0326" 10240 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Dr. BANES. No matter who manufactures them. There has been some talk about the rate of dissolution again, and the USP did adopt a dissolution test. We have been in contact with the Department of Defense on this particular drug, and I recall it specifically because there was a negotiation about the details about the dissolution test. And after a good deal of communication with them and with manufacturers and with the Food and Drug Administration and the Canadian Health Protection Branch-be- cause they also use the U.S. Pharmacopeia and are involved-we decided on certain specifications, and then got a letter from De- partment of Defense saying, forget the whole thing. They decided that that specification was not necessary. Well, we do think it is necessary, so we will continue with it. But that is typical of this kind of statement with respect to any drug. A doctor may administer it and not find the effect that he expects. And who knows whether it is the drug, that particular batch of drugs, or the patient not responding? Senator NELSON. Thank you very much, Dr. Banes, for your very valuable testimony. We appreciate it. Dr. BANES. Thank you. Senator NELSON. Our next witness is Mr. Joseph l3arrows, chair- man of the board of directors, National Association of Pharma- ceutical Manufacturers. The committee is very pleased to have you here today. Senator Javits was planning to be here. But because of other commitments he asked that I extend his regrets. Mr. ADAMS. Senator Javits was unable to attend this morning's hearings due to a prior commitment, but he did want me to thank you for your taking the time and showing the interest in appearing and testifying before the committee. He has reviewed your written statement and was particularly interested in your comments and observations as to possible impact the drug procurement practices of certain agencies might have on small business. He asked me to extend his greetings to you and his apologies for not being here. STATEMENT OP IOSEPH BARROWS, CHAIRMAN OP THE BOARD, NATIONAL ASSOCIATION OP PHARMACEUTICAL MANUPAOTLTR- ERS, ACCOMPANIED BY MRS DOROTHY RRIC~IELT Mr. BARROWS. Thank you so much for conveying the sentiments of Senator Javits. I am Joseph Barrows, chairman of the board of National Asso- ciation of Pharmaceutical Manufacturers. I am accompanied today by my associate, Mrs. Dorothy Reichelt. And, Senator Nelson, as chairman of the Senate subcommittee, I want to thank you for the opportunity for presenting the views of the National Association of Pharmaceutical Manufacturers to the Senate. Gentlemen, the National Association of Pharmaceutical Manu- facturers, also known as NAPM, is a nonprofit trade association representing over 80 manufacturers and distributors of generic drug products and drug specialties throughout the United States. PAGENO="0327" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10241 The purchasing actions of the U.S. Government reflect prejudices against small businesses. The philosophy of Federal purchasing agencies is that small businesses, because they are small, cannot produce quality drugs. By so doing the Government compounds the propaganda of the large companies who for their own selfish inter- ests espouse the superiority of their comparable drug products. In behalf of the National Association of Pharmaceutical Manu- facturers, I appear here today to go on record to suggest means of eliminating unfair Government practices which require unreasonable duplication of inspections, absurd specifications designed to be dis- criminatory against the smaller drug manufacturers, and to prevent a practical solution to assure the equivalence of compendial drugs. We want the opportunity to bid on Government business as we do manufacture quality drug products. In fact, many of the larger companies' labels are affixed to products manufactured for them by the smalled drug manufacturers. Products such as, Nitrofurantoin~ Propoxyphene Hydrochloride Capsules, Tetracycline Hydrochloride Capsules and Syrup, Ampi- cillin Capsules, Chloral Hydrate Soft Gelatin Capsules, a variety of controlled substances in tablet and capsule form, narcotics, paren- terals-Lyophilized and solutions-ointments, lotions, suppositories, cough and cold preparations, sterile eyedrops, nasal decongestants, hormonal products, steroid products, chlorpromazine, et cetera. Subsequent to the New Drug Amendment of 1962, particularly the Good Manufacturing Practices Regulations set forth by the FDA in 21, Code of Federal Regulations, part 133, and section 505(b) of the Federal Food, Drug and Cosmetic Act, no double standard of the quality of drugs can exist. The tactics of Government purchasing agencies denying the right of HEW registered manufacturers to enter into competition for Federal health-care business, because of requirements and specifi- cations which are arbitrarily contrived by the agencies, tend to undermine competition. Smaller drug plants have been rejected by the Defense Person- nel Support Center because the firms' windows, although perma- nently fixed and sealed, were not equipped with screens, and be- cause the firm has a common door for both receiving and shipping, but diligently segregates quarantine drugs from release status drugs in conformity with good manufacturing practices. FDA plant inspections in both large and small firms are con- ducted in like manner and with equal vigor to determine compli- ance with all requirements of the Federal Food, Drug and Cos- metic Act and all FDA regulations. These GMP inspections are carried out on a routine basis, espe- cially for holders of New Drug Applications. Dosage form samples are routinely collected by FDA inspectors for all classes of drugs and are subject to complete compendial assays for validation, often in two separate laboratories. We, as representatives of the sma]ler drug manufacturers, can assure you that we subscribe to a single standard, the manufacture of high quality drug products in full conformity with the Federal Food, Drug and Cosmetic Act and all the regulations thereunder. PAGENO="0328" 10242 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Therefore, competition should be encouraged to meet the drug needs of the Defense Personnel Support Center, the Veterans' Ad- ministration, and other Federal agencies. It is reasonable to assume that if drug costs are considerably reduced by fair competition without sacrificing patient care, that more drugs will be available to treat more patients. It is unreason- able to assume that the reduction of drug costs necessarily means ineffective therapeutic response as some Government purchasing agents lead you to believe. Mr. GolmoN. Which ones? Mr. BARROWS. Specifically, the spokesman for the DPSC, Mr. Max Feinberg. The propaganda which has evolved from the larger firms that. "Chemical equivalency is not clinical equivalency" emanates from the thirst and greed for the revenues of the medicare and medicaid programs, coupled with proposed national health insurance plans, and the drug requirements of Federal purchasing agencies. It is indisputable that lack of therapeutic equivalence among comparable products conforming to official standards has been demonstrated in only a very limited number of cases. We are told, in fact, that it has been demonstrated in only 20 drugs, out of literally thousands. Products such as, Aminosalicylic Acid tablets, Nitrofurantoin tablets and oral suspension, Imipramine Hydrochloride tablets, Propoxphene liydrochloride Capsules, Quinidine Sulfate tablets, Sulfasoxazole and Triple Sulfa tablets, Probenecid when used in conjunction with penicillin, primarily in gonorrhea. Chlorproma- zine tablets, Thiazides, Glutethimide tablets, Digoxin tablets, Aceta- zolamide and diphenylhydantoin capsules. Primidone tablets. Pro- cainamide Hydrochloride capsules, Isoproterenol, Amitriptyline, Hy- drochloride tablets, Phenylbutazone and Aminophylline suppositories. As I mentioned before, many of these products are manufactured for the larger companies by the small drug manufacturers. Mr. GORDON. Excuse me, what is the significance of this list of drugs? Mr. BARROWS. These are products which the Food and Drug have indicated that there is a question with regard to the bioavailability equivalency of comparable products chemically the same. In reviewing DPSC, defense medical purchase descriptions, for many drugs one notes that apparently the composers of the specifi- cations are most often the recipient of the contract awards. Federal Stock No. 6505-104-8672 for meprobamate tablets, 0.4 grams, U.S.P. The defense medical purchase description for this product states the following: The meprobamate powder used in the tablets shall be in accordance with the tests, standards and requirements of the USP, including any supplements or revisions thereto. In addition, the meprobamate powder shall comply with the infrared spectrum and the chloride limit as set forth in Volume 25, Num- ber 3, pages 88 and 89 of "Drug Standards." The meprobamate powder shall comply with the following additional tests: The residue on ignition, sulfated ash, shall be more than 0.10 percent when determined by the US? method. PAGENO="0329" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10243 The Federal agency is requesting unnecessary additional tests as the TJ.S.P. XVIII under "Identification" requires, and I quote: The infrared absorption spectrum of a potassium bromide dispersion of it, about 1 mg. in 200 mg, previously dried at 600 for 3 hours, exhibits maxima only at the same wavelengths as that of a similar preparation of USP mepro~ bamate reference standard. The USP XVIII does not set a "chloride limit," nor does it re- quire a "residue of ignition test"; both of which have no significance as modern techniques assure that all impurities are eliminated. Embodied in "55.8" of the same description under "Pre-Award or Pre-Acceptance Samples" are the duplication of inspection and sampling requirements, as follows, and I quote: The approval of these samples will not constitute approval of the sample as meeting the other requirements of this purchase description. Included in the same "S5.8," and I quote: Unless otherwise specified in the contract or purchase order, the supplier is responsible for the performance of all inspection requirements as specified herein. The government reserves the right to perform any of the inspections set forth in the specification where such inspections are deemed necessary to assure supplies and services conform to prescribed requirements. This is a typical example of unnecessary duplication of good manufacturing practice surveillance by another Govermnent agency as the FDA requires the following: A New Drug Application from all firms manufacturing and dis- tributing meprobamate tablets, TJSP. San~ples of the active ingredients and of the final dosage form have to be submitted to the FDA. A conmiitn~ent by each manufacturer to the FDA that they will perform, or will have performed in their behalf, all compendial tests both on the active ingredients and the final dosage form. The producer has to certify that they will manufacture the prod- uct in conformity to the good manufacturing practice section, part Stability reporting, and updating data pursuant to the NDA is a definite requirement. And routine inspections by the FDA monitors the compliance. Senator NELSON. Let me ask a question at this point. On item 1, you say the FDA requires a New Drug Application from all firms manufacturing and distributing meprobamate tablets, TJSP. Mr. BARROWS. That is correct. Senator NELSON. Do you mean an abbreviated NDA? Mr. BARROWS Well, Senator, this goes back originally to the rec- ommendations of the Kefauver committee at a time when they released under the patent controls of the Carter Wallace Co. They had to release at a certain rate according to the index, the price index at that particular time, to other companies to manufacture. And originally, the firms that went into meprobamate at that particular time had to file a full NDA. PAGENO="0330" 10244 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Just recently, the Food and Drug Administration has changed that policy; and they will accept now an abbreviated New Drug Application. But under an abbreviated New Drug Application, under paragraph 8, a company has to certify that they will conform and shall comply with chapter 133-with part 133 of the good manu- facturing practice. Senator NELSON. Which part is which? Mr. BARROWS. That is under paragraph 8 of the abbreviated New Drug Application Form No. 356-H. Senator NELSON. I do not have it before me. What is that re- quirement? Mr. BARROWS. The requirement is that the company manufactur- ing or submitting the abbreviated New Drug Application must sub- mit a certification statment to the effect that they will comply and conform to the good manufacturing practice section of part 133. Senator NELSON. Is that objectionable? Mr. BARROWS. Not at all. Senator NELSON. Then as of now, that item 1, the FDA does not require a New Drug Application for firms manufacturing and dis- tributing meprobamate. It is just abbreviated. Mr. BARROWS. An abbreviated New Drug Application. Senator NELSON. Now, is the abbreviated NDA a particularly burdensome discipline to go through? Mr. BARROWS. No, Mr. Chairman, our Association was the first to suggest to the Food and Drug Administration the vehicle of ab- breviated New Drug Application; that was under Commissioner Goddard. At that particular time there was a question with regard to the nitrates, the effectiveness of nitroglycerin. Senator NELSON. All right. Please proceed. Mr. BARROWS. Another example of DPSC specifications which is in variance with existing compendial monographs, and which cur- tails competition is as follows: FSN 6505-290-0022 for Reserpine tablets, U.S.P. 0.25 mg, which apparently was composed by Ciba for their Serpasil tablets. Tht~ DPSC's specifications state under specific rotation: "Shall be between -115° and -121° when determined as follows :" The TJSP has no such requirement. The British Pharmacopeia under specific rotation states: -113° to -123°. Several years ago at one of our annual association meetings I criticized Mr. Max Feinberg, Directorate of Medical Material De- fense Personnel Support Center, for the unscientific specification his Agency required for dextroamphetamine sulfate with and with- out amobarbital sustained release Capsules (FSN 6505-526-0393, 6505-526-0394, 6505-754-2486, 6505-754-2507) which stated that each capsule had to contain a specific number of pellets which had no significance to the safety, efficacy, potency or release rate of the medicament. There is no doubt that this specification was written by Smith, PAGENO="0331" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10245 Kline & French, Inc. who was the sole recipient of the contract award. Senator NELSON. Well, was it the only company that had capsules with that precise number of pellets? Mr. BARROWS. Senator, when we tested this material, because at that particular time the Barrows Chemical Co. was a subcontractee of the S. F. Durst and Co. with regard to that specific contract award; and when we counted the pellets of Smith, Kline & French, we did not find it to conform specifically to that specification. Senator NELSON. Well, then how do you conclude that there is no doubt that it was written-the specs were written by Smith, Kline & French? Mr. BARROWS. Yes. Only because of the fact that the-at that particular time the people who were at the head of the S. F. Durst Co., particularly Admiral Knickerbocker was quite familiar with the practices of the DSA at that time and also with Smith, Kline & French, Inc., because he was affiliated with the DPSC. He at that particular time informed us that the specifications were then taken from Smith, Kline & French, and I have the- Senator NELSON. You are suggesting' that there is nobody at Smith, Kline & French who could count the number of pellets in their own capsules? You would think they could at least come out right on that one. Mr. BARROWS. Se~nator, just of recent date I have examined some of the pellets with regard to the sustained release capsules of Smith, Kline & French, and I find there is quite a variance even with regard to content uniformity from one capsule to another. And I would suggest that in the future, if they really want to have* the capsules manufactured and manufactured with a better form of content uniformity, that perhaps they ought to have that farmed out. Senator NELSON.' Please proceed. Mr. BARROWS. At that time I questioned Mr. Feinberg regarding the necessity of the Armed Services requiring a product whose main pharmacological use was as an anorexient, especially the one with Amobarbital-and if so required, why in a sustained release form. He did not reply. It is my understanding that the product has since been deleted from the DPSC list of requirements. We respectfully submit that discriminatory practices by Govern- ment agencies which lock out the smaller drug manufacturer should be immediately eliminated. The smaller manufacturer whose facili- ties, manufacturing and production practices comply with the law and FDA regulations should be able to bid and compete on an equal footing with the larger drug companies. The economic powers of the larger companies permit them to absorb the costs of the unnecessary and duplicating tests, specifications and procedures, often authored by themselves, to exclude competition by the smaller company. The higher prices that Federal agencies are PAGENO="0332" 10246 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY expending for comparable drugs because of this scheme taxes all our citizens. A responsible drug association must not only advance criticism but suggest means which will ameliorate that which is obviously wrong and in doing so assist their Government. We have advocated the adoption of the fixed formula concept, whether it be incorporated into existing compendia or instituted by the FDA, which would negate much, if not all, of the duplication now necessary by all drug manufacturers pertaining to clinical studies and bioavailability comparisons. The fixed formula concept when related to official drugs locks in the specifications, standards and methodology of analysis of not only the finished dosage form, but also of all of the components, the procedures and equipment to be employed in the compounding of the drug. The fixed formula concept applied to an official drug will assure that the same drug manufactured by any registered firm will be the same in composition; was manufactured in the same manner; and will be the same in efficacy. The bioavailability will be assured as the drug will be equated with its bioavailability-then and only then will the formula be fixed, and the official drug of one company will be the same as the official drug of another. WithOut the imple- mentation of the fixed formula concept, the problem of therapeutic equivalence will always be argued. We are proposing a national drug formulary which will incorpo- rate the fixed formula concept. This will resolve the criticisms that the official standards are too simple and not sufficiently advanced or sophisticated to be meaningful; and too, that the official standards are merely chemical or physical tests that have no relevance to therapeutic equivalence. We have urged the USP and the NF organizations to consider the fixed formula concept from the standpoint of achieving uniformity in product equivalence and consistency of bioavailability-and were informed that our proposal has considerable merit. It is exactly the procedure followed by the single producer of a drug product, who develops, tests, evaluates, and then freezes his product composition and method of manufacture, often on a world- wide basis in their plants all over the world. The identification of like products o~ a given drug compound through the publication and acceptance of a common composition and procedure for manufacture would surely be in the public interest. The concept of fixing compOsitions and manufacturing details for a number of established and important drug products is an extension of the standardization process and a way of assuring the equivalence of official drug products. Before this very committee on May 20, 1~69, Dr. John Adriani appeared and entered this statement into the record, and I quote: PAGENO="0333" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10247 A Code of Good Manufacturing Practices and other criteria with a licens- ing system and registration for all individual pharmaceutical products is essential. All drugs would then meet the same standards. This, of course, would be imposing the same requirements on all firms manufacturing drugs equally and would do much to solve the problem and obviate the objection which allegedly exists that some drugs are chemically equivalent but not biologically equivalent. This is not an impossible problem to resolve. The fixed formula concept included in a National Drug Formulary would negate the licensing requirement and would accomplish the equivalency of official drug products. Thank you. If there are any questions that you would like to ask, I would be perfectly willing to answer them. In summary, we recommend that: (1) HEW registered drug manufacturers in possession of ap- proved New Drug Applications should be acceptable to all Federal agency drug bidders' lists for all products. (2) Duplicative inspections, specifications, and requirements not having any medical or other significance should be eliminated so that competition may be encouraged. (3) Inclusion of the fixed formula concept within a Nationai Drug Formulary would assure that all official drugs are chemically as well as clinically equivalent. (4) Resident drug plant inspectors now detailed by the Defense Personnel Support Center should be incorporated within the ranks of the Food and Drug Administration. (5) The Food and Drug Administration should be adequately funded so that drug inspectors, trained as specialists, are not subject to diversion by food recalls. (6) Payments for drugs delivered to Federal agencies should be made promptly to encourage the smaller drug manufacturers to submit their bids. We appreciate this opportunity to submit our testimony before the Subcommittee on Monopoly of the Senate Small Business Committee, and trust that you will consider our recommendations. Senator NELSON. How many small manufacturers does the National Association of Pharmaceutical Manufacturers represent? How many manufacturers? Mr. BAmiows. We have a membership of a little over 80 members, consisting of manufacturers and distributors. And at this time I would like to submit our roster of membership to the committee. Senator NELSON. The committee will receive it. [Testimony resumes at page 10253. The information referred to follows:] PAGENO="0334" 10248 COMPETITIVE PROBLEMS IN THID DRUG INDUSTRY NATIONAL ASSOCIATION OF PHARMACEUTICAL MANUFACTURERS 342 Madison Avenue, New York, New York 10017 M1.4~ List As nf .Tsniisrv 1 q7LL ~gH1ar Members: ALLIED LABORATORIES, INC. 975 Lake Road Redina, Ohio 44256 ANTHONY PRODUCTS CO. 11634 McBean Drive Elmonte, California BARR1~ DRUG COMPANY, INC. 4128 Hayward Avenue Baltimore, Maryland 21215 BARTH-SPENCER CORP. 270 W. Merrick Road Valley Stream, New York 11580 3ELL PHARMACAL CORP. 1*85 At Exit U.S. 276 t~.O. Box 1968 Greenville, S.C. 29602 BIOCRAFT LABORATORIES, INC. 92 Route 46 East Paterson, N.J. 07407 BIOPHABMA, INC. (~25 Broadway flew York, N.Y. 10012 BOLAR PHARMACEUTICAL CO., INC. 130 Lincoln Street Copiague, New York 11726 -CHROMALLOY AMERICAN CORP. Route 7, P.O. Box 180-A Evansville, Indiana 47712 COLUMBIA MEDICAL CO. 38 East 19 Street New York, New York 10003 CONSOLIDATED MIDLAND CORP. 195 East Main Street Brewster, New York 10509 CRAMER PRODUCTS, INC. 153 West Warren Gardner, Kansas 66030 ROBERT DANIELS & CO., INC. Div. of Generics Corp. of America 333 Sylvan Avenue Englewood Cliffs, N.J. 07632 DAY-BALDWIN, INC. 1460 Chestnut Avenue Hillside, N.J. 07205 DEL LABORATORIES, INC. 565 Broad Hollow Road Farmingdale, N.Y. 11735 ENCAPSULATIONS, INC. 269 Chestnut Street Newark, New Jersey 07105 FARADAY LABORATORIES 100 Hoffman Place Hillside, New Jersey 07205 FOOD PLUS, INC. 77 Moonachie Avenue Moonachie, New Jerseyl. 07044 PAGENO="0335" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10249 O & W lABORATORIES, INC. 20 Markley Street Port Reading, New Jersey 07064 HALSEY DRUG CO., INC. 1327 Pacific Avenue B:ooklyn, New York 11233 HUDSON PHARMACEUTICAL CORP. 89 Seventh Avenue N~w York, New York 10011 H?.ATHER DRUG COMPANY 1 Fellowship Road Cherry .Hill, New Jersey HUMPHREYS PHARMACAL, INC. 63 Meadow Road Rutherford, New Jersey 07070 IUWOOD PHARNACAL, INC. 303 Prospect Street Inwood, New York 11696 K'~TCHUM LABORATORIES, INC. 2:, Edison Street At~ityville, New York 11701 LI:FE ABORATORIES, INC. 8111 Lankershim Blvd. North Hollywood, Calif. 91605 LINDBERG NUTRITION SERVICE 3945 Crenshaw Blvd. Los Angeles, Calif. 90008 LINDEN LABORATORIES, INC. Dlv, of Chromalloy American Corp. 5353 G~o~vernor Blvd. Los Angeles, Calif. 90066 MLRICON INDUSTRIES, INC. 4~O S.W. Washington Street Ptoria, Ill. 61602 M ?FLIN McCAUBRIDGE CO. 6100 Rhode Island Avenue Riverdale, Maryland 20840 MURO PHARNACAL LABS., INC. 121 Liberty Street Quincy, Mass. 02169 REXAR/OBETROL PHARMACEUTICAL CORP. 396 Rockaway Avenue Valley Stream, New York 11581 O'CONNOR DRUG COMPANY 12115 Woodbine Avenue Detroit, Michigan 48239 ORMONT DRUG & CHEMICAL CO., INC. 223 South Dean Street Englewood, New Jersey 07631 PENNEX PRODUCTS CO., INC. Eastern Ave. at Pennex Drive Verona, Penn. 15147 PHARNACAPS, ICN. P.O. Box 547 1111 Jefferson Avenue Elizabeth, New Jersey 07207 PHARNADERM, INC. Cantiague Rock Road, Box 730 Hicksville, New York 11802 PHOENIX LABORATORIES 175 Lauman Lane Hicksvillé, New York 11801 PLUS PRODUCTS, INC. 2425 E. 38th Street Los Angeles, Calif. 90058 PRESTON PHARMACEUTICS P.O. Box 8 Butler, New Jersey 07405 PUREPAC CORPORATION 200 Elmora Avenue Elizabeth, New Jersey 07207 PAGENO="0336" 10250 COMPETITIVE PROBLEMS IN TFIE DRUG INDUSTRY REID'PROVIDENT LABORATORIES, INC. 25 Fifth Street, N.W. Atlanta, Georgia 30308 RI~PUBLIC DRUG CO., INC. 175 Great Arrow, Buffalo, New York 14207 SIMPAK CORPORATION 2021 15th Avenue West S~attle, Washington 98119 STUR-'DEE HEALTH PRODUCTS, INC. 13 land Park Nc~w York 11558 VITA~FORE PRODUCTS CO. 95~O7 98 Street Inc. O:one Park, New York 11416 v:tTARINE COMPANY, INC. 2'7-15 North Conduit Avenue Sjringfield Gardens, New York 11413 V ~TAMIN SPECIALTIES CO. 5:;21~25 Wayne Avenue Philadelphia, Pa. 19144 W ST~WARD, INC. 7i.5 Eagle Avenue Bronx, New York 10456 X TRIUN LABORATORIES, INC. 4~~5 West Pershing Road Chicago, Ill. 60609 ZhNITH LABORATORIES 11~0 Le Grands Avenue N'rthvale, New Jersey PAGENO="0337" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10251 N.A.P,M. ASSOCIATE. MEMBERS A2ENOL CHEMICAL CORP. 40-33 23rd Street Ling Is land City, N.Y. 11101 CLASE MANHATTAN BANK 1 Chase Manhattan Plaza N w York, N.Y. F~'LLE1( PRODUCTS CO., INC. 4~O Park Avenue N~w York, N.Y. 10022 FOOD & DRUG RESEARCH LABS., INC. Mturice Ave. at 58th Street N spe th, New York 11378 F2EEMAN INDUSTRIES, INC. 100 Marbledale Road Tuckahoe, New York 10707 G,\LTARD-SCHLESINGER CHEMICAL MFG. CORP. 5(4 Mineola Avenue Ctrle Place, L.I., N.Y. 11514 R.W. GI(EEFF & CO., INC. 1 Rockefeller Plaza N~w York, N.Y. 10020 G.~MA LABORATORIES OF AMERICA, INC. 62-04 34th Avenue Wodside, New York 11377 H :XACON LABORATORIES, INC. 336 Peartree Avenue B:onx, New York 10469 H~JNTINGTON LABS, INC. P.O. Box 710 Htntington, Indiana 46750 K OLL FINE CHEMICAL, INC. 120 East 56 Street N w York, New York~ LANCO CONT.~INER CORP. 70 Washtington Street Brooklyz~, New York 11201 LEBERCO LABORATORIES 123 Hawthorne Street Roselle Park, New Jersey 07204 P. LEINER & SONS, AMER., INC. 20101 Nine Mile Road St. Clair, Michigan 48040 DR. MADIS LABORATORIES 375 Huyler Street So. Hackensack, N.J. 07606 MAJESTIC DRUG CO., INC. 721 East 136th Street Bronx, New York 10454 MALLINCROL)T CHEMICAL WORKS P.O. Box 384 223 West Side Avenue Jersey City, N.J. `~TI0N C~OO R~ii:~-7.d Avenue North Eer.,~n, New Jersey ~.1LL~IN ~23LAS MC'ADANS, 110 Est 39th Street N~ York, N~.w York 10011 N~PP-LE~J cc:~'ORATION 195 ~ain 2troct Lodi, N~w Jarsey 07644 N;TLc:~AL U.C2~SIA CO., INC. 83rd Street & Cooper Avenue Brooklyn, New York 11227 S.B. ~1~N1CK & COMPANY 100 Church Street New York, N.Y. 10008 07047 INC. 32-814 (Pt. 24) 0 - 74 - 22 PAGENO="0338" 10252 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Associate Members Con't. PENN BOTTLE & SUPPLY CO. 7150 Lindbergh Blvd. Philadelphia, Pa. 19153 J. RABINOWITZ & SONS, INC. 1300 Metropolitan Avenue Brooklyn, New York 11237 S.S.T. CORPORATION 20 Vesey Street New York, N.Y. 10007 SUPPOSITORIA LABS., INC. 135 Florida Street Farmingdale, New York 11736 TRUESDALE CHEMICAL SALES CO., INC. 140 East 40th Street New York, N.Y. 10016 GEORGE TiNE COMPANY, INC. 76 Ninth Avenue New York, New York 10011 3TERWIN CHEMICALS, INC. 90 Park Avenue New York, New York 10016 AMERICAN ROLAND CORP. 16 Hudson Street New York, N.Y. 10013 ~IERRA INTERNATIONAL 1144 Clifton Avenue Clifton, New Jersey 07013 PAGENO="0339" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10253 Senator NELSON. How many are manufacturers? Mr. BAEROWS. We have not broken it down. I could get that in- formation for you, Mr. Chairman. Senator NELSON. Do you know the dollar volume of the manu- facturing done by your manufacturers? Mr. BARROWS. I have no idea what the actual dollar volume is. I know it is considerable, and I know that many of our member firms do in fact manufacture many dosage forms for the larger firms. Senator NELSON. Do you happen to know what percentage of the product manufactured by your members are marketed directly by them either into the wholesale or retail market, or by bid to hos- pitals, municipalities, State agencies, Federal agencies? Do you know how much goes to other manufacturers? Mr. BAmlows. I will make this information available to the com- mittee, Senator. Senator NELSON. If you would. Now, you represent 80 some manufacturers and distributors. Mr. BAm~Ows. That is correct. Senator NELSON. Do any of them produce drugs under their own brand name? Mr. BARROWS. Yes. They do. Senator NELSON. And some of them produce drugs for other com- panies, is that correct? Mr. BARROWS. That is right. Mr. ADAMS. Mr. Barrows, on page 5 of your testimony, the third full paragraph, you state that: The USP XVIII does not set a chlolride limit nor does it require a residue of ignition test; both of which have no significance as modern techniques that all impurities are eliminated. Mr. BARROWS. That is correct. Mr. ADAMS. Would you tell me what the net effect of that par- ticular requirement is on small manufacturers? Mr. BARROWS. The net effect of that on small drug manufacturers is that it increases the overhead with regard to excessive testing which proves nothing; because if you are going to test for chlorides, for impurities which you know are not there, you might as well test for sulfates and phosphates, and where do you stop. And it seems just a redundant thing to include into a procedure which just ups cost and reduces competition. Mr. ADAMS. Thank you. On page 7 you compare rotational requirements of certain speci- fications at the top of that page? Mr. BARROWS. This is specific rotation requirement and specific rotation of _1150 or -1~1°-the exactness of it is not that neces- sary, as the British Pharmacopeia gives you a wider range of -113° to -123° as versus -115° and -121° that the DPSC requires. The lISP apparently does not require any because they probably feel it has no significance; that the existing compendial monograph reqmrements are sufficient to warrant not using the specific rotation test. PAGENO="0340" 10254 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Mr. ADAMS. And the net effect of those requirements, you are sug- gesting, is to eliminate competition and cause the price of the drugs to be increased? Mr. BARROWS. Exactly, exactly. I personally believe that the mono- graph was submitted to DPSC by Ciba. Mr. ADAMS. Thank you, sir. That is all I have, Mr. Chairman. Senator NELSON. I want to thank you for your testimony. I think a number of your suggestions respecting bidding opportunities by small business is certainly valid. And I think the testimony we have accumu- lated over the years does indicate that artificial barriers for one reason or another have been erected by Government agencies, that end up barring small businesses from having an opportunity to bid on Gov- ernment contracts. And I would hope that we would be able to tackle that question and eliminate these barriers that are unnecessary and artificial. Mr. BARROWS. Mr. Chairman, I want to thank you again for inviting us to present our views. Senator N~soN. Thank you very much. (Whereupon, the hearing in the above-titled matter was recessed at 12:40 p.m., to be resumed on March 5 in this same room.) [Mr. Barrows submitted the following supplement to his testi- mony :J PAGENO="0341" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10255 NAPM L~ National Association of Pharmaceutical Manufacturers 342 ~5RiC AVENUE, NEw YORK. NEw YORK 10017 * (212) 687.6568 Madison February 26, 1974 Honorable Gaylord Nelson, Chairman Subcommittee on Monopoly Senate Small Business Committee Russell Senate Building Washington, D.C. 20510 Dear Senator Nelson: As a supplement to my testimony of February 21, 1974 the following information is being submitted to substantiate our statements. On page 1 of our submitted written testimony I stated: "The purchasing actions of the U.S. Government reflect prejudices against small businesses. The philosophy of federal purchasing ager~cies is that small businesses, because they are small, cannot produce quality drugs. By so doing the government compounds the propaganda of the large companies ~iho for their own selfish interests espouse the superiority of their comparable drug products." Evidences of Prejudices: (Exhibit A) PAGENO="0342" 10256 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY ABSTRACTS FROM PRESENTATION BY: Mr. Max Feinberg Directorate of Medical Material Defense Personnel Support Center PRESENTED TO: 1973 Symposium * "Assuring Quality in Health Care Focusing on Professional Standards Review Organizations" ENTITLED: QUALITY PHARMACEUTICALS WITH THE E~ATIENT IN MIND. Shoreham Hotel Washington, D.C. November 8, 1973 PAGENO="0343" `COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1.0257 Pg.8 "The Manufacture of Quality Merchandise doesn't j u: happen. For a company to regularly produce high quality me material, the firm must be effectively structured and organiz from the ~anaaement to the lowest element. With fully qual. dedicated employees who have enthusiasm, craftsmanship, a ingenuity to build quality into the product with an objective excellence. This requires the combined skills of experts in. disciplines, plus back-up personnel who are fully responsivE the criticalities of the items and the needs of the users. Q.Q~ that are adequately staffed, and employ scientifically sound n~[~iods and procedures, utilizing modern and sturdy eguipme a high level of reproducibil1~y~ in appropriate facilities with quality control and housekeeping, do produce quality product~ regular basis. ~j~ç1oes not come che~iv." Pg. 2 1-25 "In supporting our medical health care programs, the ~ of services and material is indeed of great significance. We fully acknowledge, however, that price is not more important* quality insofar as the patient is concerned. Let's remember t1~ all of the elaborate programs exist for one reason only, and th for the patient. And if we are ready to sacrifice quality fc* pri we are in turn creating a sacrificial platform for the patient. medical authorities do expect quality material in medical care ment. The PSRO's s1~ould remain mindful, of this necessity, n standing the prominent objective for cost containment. For the ultimate benefit of the patient, we must be ever ful that publicized information and data must be reviewed with analysis. For example, a comparison was recently publicly ma the wide discrepancy in pftce between the generic and brand na ~Meprobamate tablets. We examined the list of Meprobamate ta iüppliers as taken from the blue book. Four other companies ic th~ir products under trade names. American Druggist Blue Book Meprobamate tablets Listing American Pharmaceutical Barry Martin American Qulnin~e Parke-Davis Exhibit A Prejuthces Statements by Max Feinberg Directorate DPSC (1) PAGENO="0344" 10258 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY s~-1 Barr Labs. Purepac Bell Pharmaceutical Richlyn Bowman, Inc. Sheraton Labs. Carr Drug Sherry Labs. Columia Medical Stanlabs Consolidated Medical Corp. Stayner Fellows Medical Towne 1CM Ulmer Kirkman Wolins Zenith DPSC had occasion to inspect the facilities of 11 of those firms. Six were disqualified in 1973, while four others were rejected prior to 1973 and we have not reinspected. The survey findings of several companies from that list are reviewed. Plant Deficiencies -One drug container with two labels "Ascorbic Acid and Starch" -Container and lid had different lot numbers. -Loss of lot number traceability. -Failure to maintain building free of insects in production and other areas. -Incomplete raw material testing -Production equipment not cleaned before and after use. -Live spider in drying oven. -Inadequate quarantine of raw material -No calibration program. Pg. 26 "One cannot equate price without an adequate baseline for quality, and that applies to both plant and product. The need to scrutinize public statements was vividly magnified when a prominent physician, in his testimony to a State legislative committee, advised the listeners that the basis for the Military's rejects of drug plants is for packaging reasons. The records are well established that a DPSC disqualifies a very substantial per- centage of drug producers for serious quality control and house- keeping deficiencies." PAGENO="0345" COMPETITIVE PROBLEMS IN TEE DRUG INDUSTRY 10259 Pg. 34 Plant Deficiencies -President is both production and quality control director. -No double-checking of weighing and measuring. -Inadequate control over raw material. -No master formula or batch production records. -Single lot number for multiple batches. -Theoretical yields and actual yields are not reconciled. -No stability studies -Inadequate laboratory facilities and testing." Pg.41 "We must not become over zealous in our aims for cost containment that we jeopardize the health and welfare of the patient by supplying the medical profession with substandard supplies and equipment or furnishing th~ Datient with sub standard or non-equivalent drug products. Let us not forsake t~e patient ~ôr the sake of the ~~ice." Pg. 43 V.F.W. newly elected Commander-in-chief Joseph L. Vicities - address - Dallas, 1971 (2) "The Defense Department has, been t~stina ~nroducts frem~ma1L~_ drug companies that are not well-known. The Department of Defense ~ 45% of.thed.ru~sand m~dicines It tests before makinQ purchas.e~ Inspectors from the department have uncovered substandard saiiitary conditions and a general absence of even rudimentary quality control in a number of small, back-alley druci manufacturinci plants, some of which have been set u~ by fast buck oDe~atoxs~. The 45% rejection figure applies to drugs actually tested.. The. products of reputable research-oriented companies are not tested regularly because these companIes have proven high standards." (1) Presented to 1973 Symposium "Assuring Quality in Health Care Focusing on Professional Standards Review Organizations." (2) Presented at the Veterans of Foreign Wars Convention - Statler Hilton Hotel, Dallas, 1971 PAGENO="0346" 10260 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY ~ ~ ~ i/~/Y',,,j~i' ~TW Calls For U.S. Drug Testing; Wcu'ns Of `Fast Buck Operators' DALLAS-At its convention Defense is rejecting approx- at the Statler Hilton here, the imately 45% of the drugs and ~rete1.ans of Foreign Wars of medicines it tests before mak- the United States adopted a ing purchases." resolution calling on the govern- Inspectors from the depart- ment to institute a testing pro- ment have uncovered "substand- gram "to assure that all Amer- ard sanitary conditions a~d a icans receive only medicines of general absence of even rudi- the highest proven quality." mentary quality control" in'~ The resolution also praised the number of "small, back-alley~ Department of Defense pro- drug manufacturing plants, gram of testing drugs for quaV- some of which have been set up ity and the wQrk and products by fast buck operators," of i~esearch-oriented reputable Mr. Vicites said. manufacturers of drugs. The 45% rejection figure, he The Defense Department has explained, applies to drugs ac- l~een testing products from tually tested. "The products of small drug comr)anies that are reputable; research-oriented not well-known and, said companies are not tested regu- VFW~S newly elected Corn- lady because those companies mander-in-Chief, Joseph L. have proven high standards~," Vicites, "the Department of he added. ~`AL.. SrA4vpA,~,~ ?`. PAGENO="0347" COMPETITIVE PROBLEMS IN THE DRTJG INDUSTRY 10261 Supportive evidence: The figure of 45% rejects which the DoD's Mr. Feinberg bandies about has been attributed over the years to drugs actually tested; and also to companies rejected upon inspection. for example: 1. Mr. Joseph L. Vicities, the newly elected Commander-in-Chief of the Veterans of Foreign Wars as reported In the Drug Trade News dated, September 6, 1971, said the following: "The Department of Defense is rejecting approximately 45% of the drugs and medicines it tests before making purchases. The 45% rejection figure applies to drugs actually tested. The products of reputable, research- oriented companies are not tested regularly because those companies have proven high standards" (see page 43 of Exhibit A) 2. The FDC Reports dated February 18, 1974 (p. B4) states: `Forty- five percent of mfrs.' facilities Inspected fail to meet DoD standards." PAGENO="0348" 10262 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Exhibit B r EPMA s alternate i-j BIOEQU1VALENCV/BIOAVAILABILITY BA'rr~E Given the large number of mfrs. and products and FDA's limited resources, the agency is simply not in the position to assure the quality and eq uivalency of all products on the market, The number of annual inspections FDA can make is, by its own account, descreasing; indeed, FDA no longer reports publicly the number of plants it inspects. Similarly, the number of drug recalls for safety, potency and other quality problems is persistently high. Another factor of importance is the experience under the Dept. of Defense (DoD) drug procurement ~ It is reported that the Dept. rejects 42% of drug product sarn~jEles submitted to it, F~y, five percent of mfrs.' facilities inspected fail to meet DoD standards. Furthermore, the scientifiQ~~ literature contains many reports showing a lack of therapeutic equivalency among R drugs. The issue is not one of brandname versus generic drugs, as some would like to describe it. The issue is quality of drugs from different mfrs. Unless and until FDA is in a position to assure the therapeutic equivalence of all drugs on the market, the necessary underpinnings for limiting costs in the way the Secty. suggested simply do not exist. Furthermore, the problem of quality of drugs cannot be solved simply by having FDA satisfy itself as to the quality of one particular mfr.'s product selected as being "generally available" at the lowest price because drugs from other sources available at similar prices but of unknown quality may be selected by the physician or the pharmacist. Most physicians and pharmacists, it should be added, do not agree with the premise that price alone should determine whether or not the drug prescribed and dispensed should be fully reimbursed. They reject the notion that there is no need for pro. fessional judgment in choosing a particular drug product and identifying a preferred source. In the last analysis, only the prescribing physician is in a position to know which drug products have performed satisfactorily for his patient. Under the Dec. 19 proposal, in cases where the physician or the pharmacist determine that the patient will be better served by a product which costs more than the lowest priced product on the market, the patient would have to bear the additional cost. This result is neither equitable nor consistent with the principles of the Medicare and Medicaid programs. Escape clauses, that would permit reimbursement of a higher priced product only if the doctor details his bases for selection and some govt. official or advisory cmte. accepts~them, would only serve to discourage physicians from exercising their own professional judgment. Such pro. cedures would also lead to expenditures that would dissipate the expected savings from the program. Finally, the effect of the Dec. 19 proposal may well be to discourage competition in drug quality that has benefited patients by leading to improvements in product quality. It is exceptionally Important to stress the relationship between quality pharmaceuticals and source identification, in our view, and to recognize that the need to preserve meaningful incentives toward excellence in all aspects of pharmaceutical manufacture, control and distribution is absolute. The reputation of American medicines for excellence is unexcelled throughout the worl~I, and is quite independent of the diverse regulatory environments in which these firms manufacture and market their products. Decades of effort to regulate quality into pharmaceutical manufacturing have not mitigated the significance, in the minds of the health professions, of the reputation of the maker of the product. PAGENO="0349" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10263 -~ 1 BIoEoUIvALv.cv/B1.o.AvAILABILñ~BATt~.EI Or would in fact the patient receive drug B, contrary to the expressed declaration of the Secty. that his proposal would leave the physician free to prescribe the drug of his choice and that the govt. would not interfere in this decision. As to Medicaid, outpatient drugs are available under some state programs. Here again the same ques- tions can be raised. Since the R would be filled at the local pharmacy, what is the "lowest price" at which the drug is available? Surveys have shown that in the same community there can be a great variance with respect to cost for the same drug. If there are several drugs available in a class, it can be anticipated that at one pharmacy one drug of that class may be the lowest, while at another pharmacy a different drug will be the lowest. There undoubtedly will arise many additional questions should this proposal materialize. It would be unfortunate if, in the interest of economy, patients under govt. programs would not have available to them the same spectrum of drugs which their physicians prescribe for other patients, In his concluding remarks to your Subcmte., Secty. Weinberger stated: "Every physician must be free to prescribe whatever medication he believes is most appropriate for his patient. It is not the business of govt. to tell doctors what marketed drugs they may or may not prescribe. This is, and muse remain, solely a matter of the professional judgment of the prescribing physician." We agree wholeheartedly with this statement and believe that professional judgment in the prescrib- ing of drugs should extend to the choice of preparation of the same medication. We believe that such professional judgment will be seriously compromised if the physician is forced to administer only the least expensive drug. 1~_I_L~ .J I U_X ---- 1 - L T TEXT OF PMA's "ALTERNATE APPROACH" TO OBJECTIVES OF HEW's "LOWEST COST" DRUG POLICY fi:iMTORS' NOTE: "Alternate approach" -. result of extensive industry effort since DeC. 19 announcement of HEW's "lowest cost" drug policy -- became avail- .,.~le following Pharmaceutical Mfrs. Assis. (PMA) Board meeting Feb. 12. The purpose of this memorandum is to urge reconsideration of this proposal, which we believe to be both unwise and impractical, and to suggest an alternate approach - one that would achieve real economies in these govt. programs, one that would not interfere with the professional judgment of physicians and pharmacists, one that would assist rather than disadvantage program beneficiaries, and one that would encourage rather than discourage continued efforts by pharmaceutical com- panies to improve the quality of their products, We are, of course, mindful of the Dept.'s interest in reducing the cost of drug purchases financed by federal funds, and agree'that this is an important and legitimate goal. The proposal discussed in the Secty.'s Dec. 19 testimony for achieving this goal, however, is based on an erroneous premise -- that FDA is now able to assure the quality of all marketed drugs and that all drug products on the mar- ket, containing the same amount of the same active ingredients, are therapeutically equivalent. If this premise were valid, then the Secty.'s proposal might have some merit, However, the plain facts are (1) that all such drugs are not of equal quality; and (2) that FDA is in no position to assure equivalency. B-3 I -. [Morel PAGENO="0350" 10264 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY It is interesting to note that Vicities' statement discloses a "Double Standard" philosophy adopted by the DoD - that Is "The products of reputable, research-oriented companies are not tested regularly*** Mr. Vicities statement apparently was cdmposed by Mr. Max Felnberg- as Mr. Vicities could not have been privy to this information. Too, in Vicities' address, delivered almost 3 years ago, he employed similar rhetoric as does Mr. Feinberg today. i.e. "Inspectors from the department have uncovered substandard sanitary conditions and a general absence of even rudimentary quality control in a number of small, back-alley drug manu- facturing plants, some of which have been set up by fast buck operators." Examples of - "Government compounds the propaganda of the large companies who for their own selfish interests espouse the superiority of their comparable products." Bristol Laboratories, Ciba Pharmaceutical Company, Eaton Laboratories, Lederle Laboratories, Eli Lilly & Co. and Stuart Pharmaceuticals are so assured of their contract awards from the DoD that they have paid advertise- ments lising the respective Federal Stock Numbers for their products in the Physicians' Desk Reference ~` The listing had to be submitted 1/2 year (6 months) prior to publication. i.e. PDR-1972 page 598 Bristol Labs. "Polycillin" (Ampicilliri trihydrate) FSN 650 5-170-8343 FSN 6505-935-1148 FSN 6505-181-7635 FSN 6505-926-8924 FSN 6505-827-57 10 FSN 6505-935-6535 PDR-1974 page 697 Ciba Pharmaceutical Company Serpasil tablets (Resperine) FSN 6505-957-9531 PAGENO="0351" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10265 PDR-1974 page 742 Eaton Laboaratories a) Furadantin Oral Suspension (Nitrofurantoin) FSN 6505-082-2658 P]DR-1974 page 898 Eli Lilly & Co. a) Darvon Pulvules (Propoxyphene Hydrochloride) FSN 6505-660-1720 FSN 6505-725-6992 FSN 6505-958-2364 b) Darvon Compound Pulvules (Propoxyphene Hydrochloride Aspirin FSN 6505-967-8735 FSN 6505-784-4926 PDR-1974 page 1448 Stuart Pharmaceuticals a) b) Mylanta Liquid FSN 6505-890-22 18 Mylanta tablets FSN 6505-890-1373 b) "Furacin Vaginal Suppositories" (Nitrofurazone) page 742 FSN 6505-823-7924 c) "Macrodantin Capsules" page 744 (Nitrofuradantoin) FSN 6505-119-932 1 PDR-1974 page 850 Lederle Laboratories "Ferro-Sequels" (Sustained Release Iron Capsules) FSN 6505-074-2981 Phenacetin, and Caffeine) PAGENO="0352" 10266 COMPETITIVE PROBLEMS IN TIlE DRUG INDUSTRY These are just a few examples of evidence which connote pre- arranged assurances by DoD to a select group of companies that they will receive the contract awards for products. The Impact of these listings in the PDR has a devastating effect on competitive generic equivalent druLgs as the `detailmen' of the select group of companies state the following to physicians they call on: "Doctor - the U.S. Government only accepts our drug as the quality of the smaller drug firms' so called equivalent is no good; the FSN is the Federal Stock Number for our product. PAGENO="0353" Exhibit C Lists examples of specifications apparently composed by the recipient of the contract awards. EXAMPLES OF SPECIFICATIONS APPARENTLY COMPOSED BY THE RECIPIENT OF THE CONTRACT AWARDS PRODUCT COMPANY TRADE MARK PRODUCT Wallace Miltown Ciba Serpasil 6505-550-8464 Meprobamate tablets, U.S.P. 0.4 Gram 6505-290-0022 Reserpine tablets, U.S.P. 0.25mg. 6505-890-2218 Aluminum Hydroxide Gel, Magnesium Hydroxide & Simethicone Susp. 6505-890-2012 Chlorpheniramine Maleate, Chloroform, Codeine 6505-926-8926 Phosphate, Glyceryl Guaiacolate, Menthol, Phenylephrine HCL Syrup 6505-116-7750 6505- 106-8700 650 5-132-6904 6505-851-6589 6505-527-6885 6505-299-9578 6505-92 6-90 55 6505-890-2010 650 5-926-9026 Tedral Lanoxin Dexedrine Nydrazid Demerol Benemid Kaopectate SK-APAP Phenergan Syrup 0 FSN No. Stuart Mylanta Dow Novahistine Parke, Davis & Co. Dilantin Kapseals I 0 LTi 0 `6505-116-9325 Sodium Diphenylhydantoin Capsules, U.S.P. 100mg. 6505-753-4766 Theophylline, Ephedrine Hydrochloride & Phenobarbital Tablets N.F. Digoxin Tablets, U.S.P. 0.25mg. Dextroamphetamine Sulfate tablets, U.S. P. 5mg. Isoniazid tablets, U.S.P. 0.3 Gram Meperidine Hydrochloride Tablets, U.S . P. 50mg. Probenecid Tablets, U.S.P. 0.5 Gram Kaolin Mixture with Pectin, N.F. Acetaminophen Elixir, N.F. Promethazine Hydrochloride, Chloroform, Ipecac Fluid Extract, and potassium GuaiacolsulfOnate Syrup Warner-Chilcott Burroughs Wellcome Smith, Kline & French Squibb & Sons. Winthrop Merck, Sharp & Dohme Upjohn Smith, Kline & French Wyeth PAGENO="0354" 10268 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Exhibit D Illustrates the effect of generic drugs in the market place on the price of the brand name products~ EFFECT OF GENERIC DRUGS IN THE MARKET PLACE ON THE PRICE OF THE BRAND NAME PRODUCTS: 1) METICORTEN TABLETS 5 mg. (SCHERING) reduced from $17. 50 per 100 tablets to $2 . 25 per 100 Generic name is PREDNISONE 2) METICORTELONE TABLETS 5 mg. (SCHERING) reduced from $17.50 per 100 to $10.80 per 100. Generic name is Prednisolone 3) BRISTOL POLYCILLIN CAPSULES 500 mg. reduced from $48.00 per 100 to 30.00 per 100 Generic name is AMPICILLIN. 4) ERYTHROCIN TABLETS 250 mg. (ABBOTT) reduced from $22 .00 per 100 to 12.00 per 100 Generic name is ERYTHROMICIN 5)ACHROMYCIN CAPSULES (LEDERLE) reduced from $30.00 per 100 to $3.75 per 100. 6) THORAZINE TABLETS 100 mg. I KLINE & FRENCH) reduced from $9 .00 per 100 to 5.40 per 100 Generic name is CHLORPROMAZINE. 7) THERAGRAN-M TABLETS (SQUIBBS) reduced from $7.95 per 100 to 4.90 per 100 Generic name is THERAPEUTIC VITAMINS & MINERALS PAGENO="0355" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10269 Exhibit E Comparative prices between faster selling brand name drugs compared with the generic counterpart. COMPARATIVE PRICES BETWEEN FASTER SELLING BRAND NAME DRUGS COMPARED WITH THE GENERIC COUNTERPART: BRAND NAME - PRICE GENERIC NAME & PRICE CHLORTRIMETON TABLETS 4 mg. 21.00/rn CHLORPHENIRAMINE MALEATE C TABLETS 4 rn~. $1.05/M DARVON COMPOUND CAPSULES 32.50/500's PROPOXYPHENE & APC Ci~4 ~Q1-') CAPSULES 7.75/500's DEXEDRINE TABLETS 5 rng. 22. 85/M DEXTROAMPHETAMINE C skF) SULFATE 5 mci. 5.50/M HYDRODIURIL TABLETS 50 mg. 52. 50/M HYDROCHLORTHIAZIDE TABLETS 50 nig. 8.50/M PAVABID CAPSULES 150 rng. 98.50/M TIMED RELEASE PAPAVER- _C ?`tU~i~) INE 150 mci. CAPS. 13,9~/~ PENTIDS 9.30/100's BUFFERED PENICILLIN TABS C 400,000 Units 1.30 per 100's PLEGINE TABLETS 35 rng. 47. 50/M PHENDIMETRAZINE tabs 35 mg. ( c~e'w~-) 6.95/M PRE SATE TABLETS 65 rng. 112 . 80/M CHLORPHENTERMINE TABS TERRAMYCIN CAPSULES 250 mg. 19.95/100's OXYTETRACYCLINE CAPS. 1.90/100's _________ PAGENO="0356" 10270 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Exhibit F Copies of Defense Medical Purchase Descriptions - indicating by underscoring the absurd specifications and the duplication of inspection requirements by the DPSC; and examples of where only one company's product is acceptable. i.e. 1) Sodium Diphenyihydantoin, U.S . P., 100mg. `Shall be Parke, Davis and Company's `Dilantin Capsules 100mg." (Exhibit F page 90) 2) Tetracycline Hydrochloride, U.S. P. 0.25 Gram, iOOs `Shall be tetracycline Hydrochloride Capsules, U. . P., as produced by Lederle Laboratories as "Achromycin V Capsules" (Exhibjt F - page 87) PAGENO="0357" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10271 DZF~J$3E )~EDlCAt PU*C~4A3i DE3C~1fl$O$ Shall he Meprohamate Tablets, U.S.?., and shall be in accordance with all applicable recuireoents of Federal Standard Fed. Std. No. lhOa, dated 30 October 1966, and ier:drnertt.~l, dated 25 March 1970, and as specified hereto: 32. Classification. Shall be type I, class 1. 55,2 The following additional requirements and tests are added to this paragraph: Shall be tablets containing 0.~ gram of Meprobamate per tablet, within the app1i~ ~b1e assay limits for the tablets, Note: See U.S.?. XVIII, 1st Supplement, dated 1 October 1971, for change in Dissolution." The Neprobaxnate powder used in the tablets shall be to accordance with the tests, standards, and requirements of the U.S.?., including any supplements or revisions thereto. to addttion, the Meprobamate oowdçr sha1~comolv with the infrared absorption .pPctru3n arid the chloride limit as set forth in Volume 2~, Number 3, ~U1 other ingredients shall comply with S5.1. Add the following new paragraph: "S5~t3 ?re-Awar~ pr~~-acceot~ce ~ Upon a separate request of the contracting officer, the offeror or bidder shall su~ait three (3) individually packaged samples (each containing 25 tablets) of the Meprobarnate Tablets, retresentative of the product which the bidder or offeror proposes to furnish, to the contracting officer. Sax~les will be tested to the extent necessary to determine compliance with s6.14.8, as well as any other specified requirements. Cne (1) box (sample) will be used to perform the above testing; another bcec ~ii.l1 he used by the cognizant quality assurance representative as a standard reference sample for determining compliance of deliveries with 66.li.8 require~ Tsertts; and the third box will be held by the Defense Personnel Support Center for whatever use is deemed necessary. The approval of thes~ samples ~iU not constitute apprcwaJ. of the sannie as meeting the other requirements of this purchase description. 56.1,2 Color. Uncoated tablets shall be uniforr3.y white. :~. 3TQ~ NO. NTPROBAMATE TA3LETS, US?, O.~ Gram, 2c jages dd and b9 of `Drug Standards.~ The Meprobamate powder shall connlv ~ith the fçllowthg additional test: The residue on ignition (sulfated ash) s~al?. be riot~ more than nerrent - d~~(neci by the tTS.?. method. opsc pois OCT,. SSC-). Page 1 of 6 1,. H **NI.ACU 0S40C FONI4 Y.4~)OftII, *~**am. ~4*C$ W~.L - PAGENO="0358" 10272 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 6505-IOLr..8672 (P. P. No. i) S6.L~.7 Scoring. Tablets shall be scored, 66.lj,8 Odor. Delete the first saritence ~nd s'ubstjtute: `Tablets shall be odorless or shall have not more than a slight odor, characteristic of meprobamate." S6.L~,9.l Disintegration. The uncoated tablets shall disintegrate in not more than 30 minutes when tested ~ the U.S.P. method for "Uncoated Tablets," PREPARATION FOR DELIV~RY Shall be in accordance with all applicable requirerients of Interim Federal Specification PPP-C-00186a, dated 15 May 1969, and Amendnent~'l, dated 2? October 1969, and as specified herein: Irnriediate containers (strip ~pockets). Shall compl~. with the following: Twenty.five (~Jtablets shall be packaged in a~~ommercially available, continuou~ roll strip package. Each tablet shall bà sealed tn its own pocket. and so designed that th~ end pocket can be removed arid the seal on the adjo.~nin~ pi~cket shall not be disturbed. The individual pockets shall be consecutively numbered from one ~l) to twenty'~five (25). One roll of twenty-~five tab1et~ shall be contained in a carto~i (box) as specified. The numbers on the s trip package roU.sha~ll be in reverse order so that the first pocket removed shall be number twenty-five (25) and the secOnd number shall be twenty-four (2L~), etc. Labeling. Labeling shall be in accordance with the requirements of the Federal Food, Drug, and Cosmetic Act, and shall include the thfo~nation required below: . Immediate containers. Each limnediate container (pocket) shall be permanently and legibly marked with the following information. The labeling shall appear in the center of the pocket and shall not extend into the heat- sealed area: Labeling information in accordance with commercial practice. In addition, the numbering shall be in reverse order a~ specifl,ed under ~`Immediatè containers (strip pockets)" see above. The date of manufacture shall not be required. 2 PAGENO="0359" COMPETITIVE PROBLEMS IN THR DRUG INDUSTRY 10273 6So5-lO~-6672 (P. D. No. i) Unit~~ckages. Each unit o~: ~ (ox) la~el ~`hal1 hear the following information. {wever, the ieI'~ation to not rcci;ired to appear in the sequence indicated: (a) the itejn name deoign3te'~ as `~PROBANATE TL3Lfi~, U.S.P~" (b) the quantity of acti~ic ingredient desi.gnated as `O.I~ Gram or hOG mg Note: The official abbreviation ` g.' ma~' be used in lieu of the word "gram." (c) the Federal Sto~k No. (d) the lot or control nu~oer Ce) the date of manufacture (f) the name and address of the nanufacturer. When the manufacturer is act th~ contractor, the name and addresa of the contractor shall also appear. When both names ar placed on the label, the following designations shall precede the names: "MFR" for the manufacturer and "CONTR" for the contractor. (g) the statement "(a~tion: Federal law ~rohihits dispensing without urescription." (h) the following statenent~ or similar statements: 1. Multiple dispensing package. 2. Tht~ package not for household use. (1) the usual dosage (~) all labeling information an& the controlled substance sched~4e symbol as rec~ired by the Bureau of Narcotics and Dangerous i~rugs regulations. (Ic.) 11the unit of issue designated as "1 BOX (1 roll of 2S tablets)" The parenthetical phrase shall appear in smaller characters than the unit o~ issue designation. 3 PAGENO="0360" 10274 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 6~o5.~1oj~-6672 (?~D. Na. 1) Packagin~. Unit of issue. One box containing 25 tabI~ts, as specified, constitutes one unit of issue. Packaging_quantities. The number of units of issue ifldic.~'ted in the fo1~owing tablet shall b~packagsd in each unit, ~itermedtate, and exterior container, as applicable for the reouired level of protection specified in the procurement document. Packa ging quantities .1Jnit~ckage Intermediate pack_a_g~_ Ext erior container 1 unit * 10 units. * 120 units Packing variation permitted. If the required number of units in the entire shipment is less than the number of units specified to be over~ packed in an exterior container, such units may be packed in an exterior container of suitable s ize and design, acceptable to a common carrier, which shall insure safe deliverj to destination. Level A. Unit packa~e. One roll of twenty-five tablets shall be packaged in a dispensing, tanperproof type box of appropriate size and design. The numbers on the strip package roll shall be in reverse order so that the first pocket removed a hall be number 25 and the second number shall be 21~, etc. The box shall have one transparent plastic window on the side opposite that of the label. Intermediate pac~~. Intermediate package shall he a box of appropriate size and design constructed in accordance with ?PF-8~566 or PPP-B-676, except commercial colors will be acceptable, or PFP-B-636, type C?, C~$S domcstic. Closure shall be adequate to prevent accidental opening u~d~r normal handling. level C. Units shall be nackageri in standard commercial containers of' ~he size ani kind commonly used, which will afforr! the degree of protection :`equired for shipment and use of ths product for its in~.ended purpose. PAGENO="0361" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10275 65oS..lo1~-8672 (~. D. No. 1) Level A. Exterior container. Exterior container shall be desi~ned for' a type 2 load and construcflecj in accorcan~a with ??P-B-~b5, class 3, style 3; PPP~B-c~Ol, overseas type; PP?-B-62l, class 2; or PP?-3-ô36, class weather- resistant. Closure and strapping shall ~e as specified in the appendix of the applicable box specification. Fiberboard boxes shall conform to the special requirements specified in PPP-B-636. Case liner. Each level A ~.ood box shall~ lined w~.th a waterproof case liner conforming to Specification ?~IL~L-lO~7. Closure and sealing shall conform to applicable paragraphs of appendix thereto. Case liner shall not be required for fiberboard boxes. Each fiberboard box shall be waterproofed in accordance with 3O.I~ of PPP-B-63ô. NOTE: Strapping shal]~ not be required for shipments forwarded to a receiving activity within the cottinental units of the United States for storage and redistribution. Level 13. Exterior container, L~xterior container shall be designed fQr a type 2 load and constructed in~accorc~nce ~:ith PP?~B~S&5, class 1, st~ie 3; PPP-B-60l, domestic type; PFP-B-621, clas~: 1; or F?P-3-636, class domestic. Closure of wood boxes shall.be as specified in the appendix of the applicable box specifIcation. Closure of fiberboard boxes shall conform to method II of PPP-B-636. In addition, fiberboard boxes shall conform to the special requirements specified in PFP-B-636. Level C. The subject corrzsodity shall be packed in substantial commercial containers of the type, size, an~ kind cor~uionly usec~ for the purpose, so constructed as to insure acceptance and safe delivery by common or other carriers, at the lowest rate, to point of delivery called Lor in the contract or purchase order. Intermediate packag~s. Each. intermediate packsge shall be marked in accordance with MIL-STD-129. When labels are utilized, waterproofing shall be required only when applicable carton is fabricated of water~resistant material. Lot. (control) number, contract or purchase order number, and name of COntractor shall be shown, The date of manufacture shall be skown in lieu of date packed. ~terior contaxner. Exterior container shall be marked as specified in VJL-STD-129. L&t ~contr~i) number shall be shown. The date of manufacture shall be shown in lieu of date packed. The Item Identification shaLl, not appear on the exterior container. S PAGENO="0362" 10276 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 6SO~.lO1~8672 (P. D. No. 1) SUPPLtF2 RE~PONSIBILIT~ FOR i~5PECTION Unless otherwise specified in the contract or purchase \prder, the supplier is responsible for the performance of all inspection r ec~4~'ene;zt a as specified herein. Except as otherwise specified in the contract or order, the supplier may use his own or any other facilities suitable for the performance of the inspection requirements specified herein, unless dis' approved by the Government. The Government reserves the right to perfo.~~ apy~ of the inspections set forth in the s~ectficption where such inanections are deemed necessary to assure supplies and services conform to prescribed regurementa. Records of examinations and tests perforned b:: or for the contractor shall be maintained by the contractor and made available to the Government, upon the Government' a request, at any time, or from time to time, during the performance of the contract and for a period of 3 years after delivery of the supplies to which such records relate. No company supplying any ingredient(s) to the contractor will be conoidered an acceptable facility for theperformance of any inspection requirements ~pecified herein. 6 PAGENO="0363" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10277 VAT!~ 30 January 1973 ~ N~ D~GAp7~ICATION R~UD~ The supplier of any ite!I(a) listed below reust possess, at. time of award of contract for such item(s), a New DrtLg Application which has be* approved by the Food aod Drug Administration. Item Identification 6~05-.1014..8672 MEPROBANATE TABLETS, US?, OJ.~ Gram, 2~s Page 1 of 1 S~C~1 . : PAGENO="0364" 10278 COMPETITIVE PROBLEM.S IN THE DRUG INDUSTRY MODIFICATION NO. 2 DATE: 3 November 1972 MODIFICATION TO DIF~1SE M~)ICAL PUMOHASE D~CRIPTION This modification forms a part of Defense Medical Purchase Description No. 7, dated 21 August 1970, and covers the following item to the extent specified herein: Federal Stock No. Item Identification 650~.55o~.8h6á~ ME}ROBAMATE TABLETS, USP, o.1~ Gram, SOOe Pa~el: Line' 2, after "1966," insert "and Amendment-P]., dated 25 March 1970,". Under "82. Classification" insert new paragraph: "Shall be suitable for use as a daytime sedative and hypnotic and also as a skeletal muscle relaxant." Under "55.2" insert the following: "See U.S.?. XVIIX, let Supplement, dated October 1, 1971, for change in "Dissolution..' ~age~3: Und~ir "Labeliflg" "Inetediate containers" Add the following new s~ aparagraph: "(j) all labeling information and the controlled substance schedule symbol as required by the Bureau of Narcotics and Dangerous Drugs regulations." PAGENO="0365" COMPETITIVE PROBLEMS IN TEE DRUG INDUSTRY 10279 DATRs 3 November 1972 APPW)VED N~I DRUG APPLICATICI ~ The supplier of ax~ item(s) listed below must possess, at timu of award of contract for such item(s), a New Drug Application iihich has beau approved by the Food and Drug Administration. FIN Item Idöntification 6~OS-O.~8l~61~ MEPROBANATE TABLETS, USP, O.1~ Gram, SOOs 515 Page 1 of 1 PAGENO="0366" 10280 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY MODIFICATIGN NO.]. DATE: 25 May 1971 MODIFICATION TO DEF~NS~ MEDICAL PURCHASE DEsCI~IP'rIcN This modification forms a part of Defen3e Medical Purchase Description No. 7, dated 2Li August 1970, and covers the following item to the extent specified herein: Federal Stock No. Item Identification 650 -55o-8L~6)4 ?PROBAMATE TABI~T~, ~SP, o.b Gram, SOOa Page 1: Line 2, after "1966," irisert "and Amendnemt~.l, dated 25 March 1970,". Under "52. Classification" - insert new paragraph: "Shall be suitable for use as a daytime sedative and hypnotic and also as a skeletal muscle relaxant." Under "S5.2' preceding line reading "All other ingredients. . . . * insert the following new paragraphs: "In addition to the U.S.P., the following shall apply: `Determination of Me~robamate in dissolution medium: `Internal standard solution. Transfer about 2S mg of U.S.?. Phenacctin Reference Standard, accurately weighed to a SO-mi volumetric flask. Add methylene chloride to volume and nix. `Standard rreparatjou. Transfer about O ing of U.S .P. Mep~obarna~ a ReVere~i.ce Stao~ard accurately weighed to a 5O-'ml volumetric flask. Add ~nethyThne c~loride to volume and mix. `~t~Ol5pre~a~atiOn. Withdraw a 10 ml aliquot of the fiiternd on me&jum after 30 minutes of rotation and trar.sf e- to 60 ~~~-`~rv fu~ael containing 15 ml of niethylene chloride. Ad~ ~ dro~ ~ ~uric acid, shake vigorously, allow the layers to sepa~t~ arid Vt Lt th~ organic layer through about i~ grams of a iydro~ ~`-B-ô36, class weather- resistant. Closure and strapping shall oe as apeciried in the appendix of the applicable box specification. Fiberboard boxes shall conforu to the special requirements specified in PPP-B-636. Case liner. Each level A wood box shall be lined with a waterproof case liner~~ifornthg to ~pectfication NIL-L-lC~L~7. Closure and sealing shall conform to applicable paragraphs of appendix thereto. Case liner shall not be recuired ~or fiberboard boxes. Each fiberboard box shall be waterproofed in accordance with 3O.I~ of ?FP-B-636. NOTE: Strapping shall not be required for shipments foz~arded to a receiving activity within the continental limits of the United States for storage and redistribution. Level 3. Exterior container. Exterior container shall be designed for a type 2 load and constructed in~accorrance ~:ith PP?-B-5F~, elass 1, st~le 3; PPP-B-60l, domestic type; P~-3-62l, class 1; or PP?-B-636, class domestic. Closure of wood boxes shall be .s specified in the appendix of the applicable box specification. Closure of fiberboard boxes shall conforn to method II of ~P-B-636. Xci addition, fiberboard boxes shall conform to the special reouirements specified in FPP-B-636. Le~'elC~ The subject commodity shall ac ~ac~aoioar-25) ;;-ruobla, 10 unuts per suse Cs 8>00 22 50 s/I: Orv;ur 05) 11680-02 (Albuosinar 25); uonvablu, 10 u-;it: per case CS 215.00 23 103 aS; Aooo;;o 1/53-7680-03 (Albuoinar-25) >uov-rot cable, 10 ;;oits par taos CS 390.00 PLAS'51 P993;IN AR.ICT500 (bsvsu) 5%; V 200 ui Asvuus- (Flu-Plot, 5/); tu-SOble, 1.0 paobages per sass CS 210.00 20 .00 uS. .;;u;.)/lo;u'uPiuo,S%);uou- ;;t;;oooblu, 10 puskagas pot case CS 300.00 `0 /`NTO;300P3;1 SC FACTOR (Sua;an) SOP; A-oP V- 7055-02 (Fartorutu) 00r';9;.;L:u;t.SthSSv>'.-'I' -.etursabSu. .1 -sub- CR 103.75 So;... 0V-76sT01 Fulur'Os), ;`;-2';;uoiou >situ2T'sluf 1>;oo;,s;>'rtou>Sble,5 pouR- CS 151.25 >>o;o.t /93-ObOS 02 )Pusurate), (49 mIt:, >6th 25 vi of ;o 1./575 i; o53 7666 02 (Puvtorals), 27 TETANUS ISORISE GLOBULIN (Human) USP; 258 smite: Armeur 3853-7916-01 (4r-Tet) 10 vials per cane t.rseur 1153-7916-02 (Ar-Tet) 5 oyriegea per ems INSULIN IUJECTIONS, USP; 55 ml; 28A 40 omits; Squibb 3)3-0055-10 VI .54 Lilly 8-240 (Regular Iietio); (a) Single vial VI .67 (b) Case of 10 viola CS 5.70 28B 80 stiEs> Squibb 113-0556-10 VI 1.05 I-Oily 8-280 (Usgolar Ilotis): (a) Siugle vial VI 1.31 Sb) Cast uS (0 vUals CS 11.10 28C 105 u;;lSs; Squibb 113-0134-10 VI 1.32 Lilly 0-210 (Regular Iletio); (a) Single vial VI 1.63 (b) Case of 10 viola CO 13.90 INSULIN GLOOIN INJECTIOUS, SOP; 10 ml: 29 40sul Sq ibb 113 08 7 10 (Cl bi Si ) VI 76 303> 85:06 Uquibb #3-0058-10 (Clobin Ziec) VI 1.46 300 105 scits; Squibb 113-0138-10 (Olobin Zioe) VI 1.67 USOPOANE INSULIN 005PESUION, USP; 10 ml; 31 40 suits; Squibb 113-0061-10 VI .63 L611y 0-340 (SF11 Iletlo): () ipl 61 VI 79 b)Cas flOvil CI 660 2/ 90 Sq Sbb 11 6 62 10 VI 1 19 ily 13300 ((P0 Il iS Cu) Sioglo vial VI 1.49 (b) C fl) ilu CS 1260 320 155 suits; Sqs:Lhb 113-0033-10 VI 1.53 Lilly 0-310 (SPO Iletis); (a) Siugle vial VI 1.88 Sb) Cove of 10 vials CS 16.10 10462 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY (5 I SUPPLIE R OCR CEO C A SO. SUPPLIS S 0(8 S11;VSCIS UNIT OF PRICE INDEX PURCHASE (DOLLARS) NO. SUPPLIES OR SERVICES UNIT OP PRICE PURCHASE (DOLLARS) CS 23.00 CS 11.75 18 30cc; Aserioss Quisies 110626 (50 via.s CS 20.00 8b-;,;s; 11'..I/I'( VI .4141 1>; 00;.. bv>ruou; .;Ir.uv 10638 1)-U `;ials CS 20.00 VI .5904 003' (`5 .ultu) (30 So `0' 00;;H( ON 27.90 ;SUSSAL 510115 ALSUSII;, .:% (Ibesan) 204 250 sl; li-vs;-> 11)3 7670-SI (Albueisar-5); -u. osturvaul-, 10 :-vits psi' tsse CS 235.00 205 500 tol; 4; suu" /53-7670-02 (Alb.ssoicur-5( `us -sot;;.;'; sblo, 0 ;;u9is -yr `use CS 400.50 2 2;) -5: 206 .25 INSULIN .LVC `1USFESUUOS, DSP; 10 ml; 33 i0uvi>s: Squibb #3-0423--IS (Leote Issulis) VI .63 LOll, 1-440 (Le:;te Iletim); (a) Sivile vial VI .79 (b) Case of DO vials CI 6.60 PAGENO="0549" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10463 -~ ______________ SUPPLIES OR SERVICES - Centissued 6~ i - TUPILILS OR SL8.Vl(f S J.URcIIA~J~LA~1JPPINOOrRVICFS LPLRc9ASF (DOLLARS) Squibb #3-0446-60 (Lante Insulin) VI 1.19 Sqaibb #30560-60 (Ultralente Inselin) VI 1.19 Lilly 31-480 (I.ente Ilatth) (a) Siegla vial VI 1.49 Lilly 0-680 (Slltraiente Iletie) (b) Case of 10 vials CS 12.60 (°) Single vial VI 1.49 (b) Case ef 10 aisle CS 12.60 340 100 smite: `36-IC 100 smite: Sqathb (13-0C30-lO (Lente Insulin) VI 1.53 Oqnibh #3-0E32-lS (Ultralente Lilly 0-410 (Lente 1Oct10): Insulin) VI 1.53 (a) Single vial VI 1.80 (b) Caae of 10 vials CS 16.10 Lilly 9-610 (Ultralente Iletin): (a) Siogle viol VI 1.88 POOTA7IISC ZINC INSULIN SUSPEOSIOS, ISP; (6) Cane of 10 vials CS 16.10 10 vI: PILOCA'IPIP'F oyyr.OCSL0VIUr, OPIIT)L'LIIIC 3) 40 ucits: 001.1: 5:01, isP; 15 ci: Squibb #3-0059-10 VI .63 `3~ 1% VI A/P 30 2/ VI A/P Lilly 0-140 (Protanine, Zinu ~ Vi A/P and lietin): 40 67 VI A/P (a) lin~le vial VI .79 (b) Case of 10 visis CS 6.60 POTASSII'91 COLOUZOT I7JUCTI050, USP: 36-iA 80 units: 41 20 )fl'O, 10 el: Squibb i~3~og6S-lO o~ 1.19 Aerrlcen Quinine 3:0622 (100 uvitsporben) CX 9.50 Lilly 53-185 (S'retaeine, Zinc and lietin) . `IcUan #11130 FA .2837 (a) Siegla vial VI 1.49 (h) Coos of 15 vials CS 12.60 Abbott f3907-Q3: (a) Case of 2) CS 8.07 36-11 100 units: (b( 100 cases, 25 per case . . CS 6.77 Squibb #3-0137-10 VS 1.53 42 40 383Q, 20 el: Lilly 8-110 (Pretutsins, Zinc Acoricav Qcinioe 130991 (25 and Iletin): unite pen ben) oX 3.96 (a) Siogln vial VI 1.80 (b) Case of 10 vials CS 16.10 ifcGeo 11731135 FA .3451 P00111 I,TSULIS ZINC SUSPENSION, SIP; 10 el: AhS'ott #3934-02: (a) Case of 25 CS 9.9) 36-24 40 uaits: (b) 100 cases, 25 poe case . . CS 7.60 Squibb ((3-0561-40 (Sinilente `SCSCVPINL TASLCTS, OSU. Isuslie) VI .63 43 0.1 eg ~ Lilly 33-540 (Steileste Iletiv): (a) Single vial VI 79 ~ 0.25 eg; 1,000 tablets pen bottle: (b) Case af 10 aisle CS 6.60 Aeerican Quinine #0890 UT 1.05 36-20 dO uoits PhIlips Socane 75)54-4742-~3l . . 51 2.00 Squibb //3-0)74-00 (Sinilents 9~UNI9I71C 15YVSVCSV,OUISC I'IJCCTUOIiS, losolin) VI 1.19 USF' LIlly 0-580 (Sinilante Iletin): CARTUSVC7' NCCOLC UNITS; 2 ol, (a) Single vial VI 1.49 (1 el fill) (A) Cane of 10 dale CS 12.60 4) Needle sfee 22 Gape c 1-1/4 3b-2C 100 anita: UN ey per cl CO A/P Squibb ((3-0531-10 (Sioilente 46 :leedle cIte 22 Gape s 1-1 /4" 50 Insalin) VI 1.53 e~ poe ol CO A/F Lilly 11-510 (Sinileote Ilstln) 47 Toe:lle siae 25 Care o 5/0'; 50 (a) Siu~le vial vU 1.88 op yen ci (b) Case of 10 vials CS 16.10 40 Seodlo sloe 22 GaVe o 1-1/4'; 100 e7',ps,rol CO A/P EXTENSCI INSULIX ZINC xux1'CNXIOS:, USP; 10 ci: A1IPL'LS: 59 CO A/p 38-34 40 auttn: Squibb #3-0474-40 (Ultralants 50 UN og CO A/P Insulio) VS .63 )l 100 op CO A/P Lilly 0-840 (Ultralente Iletin): (a) Sin~lo sluR VU .79 (b) Case of 10 vials Ci 6.60 PAGENO="0550" 10464 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY KITASIISE SYSIXCHLORIDE INJECTIONS, VIAL 50 sgml: 52 lm.t. VI A/P 53 lOsS: Bristol #015-8340-96 (Ketaject) VI 2.71 Parke-Davis #35-1382-1 (Ketalar) VI 2.90 SODIUM WARS'ARIN TABS, USP: 2 sg: 54 100 tabs Co A/P 55 1,000 tabs CO A/P 2.5 eg: 56 100 tabs CO A/P 57 1,000 tabs CO A/P 5 sg: 58 100 tabs CO A/P 59 500 tabs CO A/P 60 1,000 tabs CO A/P 7.5 eg: 61 100 tabs CO A/P 62 1,000 tabs CO A/P 63 100 tabs CO A/P 64 500 tabs CO A/P 65 1.000 tabs CO A/P 66 25 sg; 100 tabs CO A/P ASSPICILLIS CAPSULES, ISP; Unit-Does: 67 250 5g. lOU capsules: Bristol #015-7992-66 (Polycillin) CT 3.72 Pfizer (Pen-A) CT 6,33 Upjohn #5765 (Pensyn) ..... CT 9.06 Ssscham-Msaesngill (Totacillin) CT 9.09 68 500 mg 50 capsules CT A/P 69 500 mg 100 capsules: Bristol #015-7993-66 (Polycillin) CT 6,24 Pfizer (Pen-A),,,,,,... CC 9.94 Upjohn (Pensyn) CT 17,39 Bescham-Masssngill (Totacillim) CT 17,72 DEXTROSE: 73 250 ml: MoOse #01102 IA .45 Abbott 1/1522-02; 12 per case: (a) 1 to 24 canoe CS 6.60 (b) 25 to 04 canon, CS 5.65 Ic) 05 or more canon,,... CS 5.19 74 500 ml: Mclae #11101 IA .52 Abbott #1522-03; 12 per raac: (a) 1 to 24 canon CS 7.50 (b) 25 to 84 canon. Cs 6,48 Ic) 85 or ~~rococo, CS 5.95 75 1,000 nl: McGee #11100 IA .65 Abbott #1522-05; 6 per cane: (a) 1 to 24 canon Cs 4.41 (b) 25 to 04 canon. CS 3.83 (c) 05 orccrocanon CS 3.52 10% in eater: 76 250 ml: McGee #S1202 IA .52 Abbott #1530-02; 12 per cane: (a) 1 to 24 canon Cc 7.25 (b) 25 to 84 couen CD 6.67 (c) 05 or more canes CS 6,11 77 500 ml: Mclae #s1201 IA .59 Abbott #1530-03; 12 per cane: (a) 1 to 24 canon CS 0.35 (b) 25 to 84 canon. CS 7,20 (c) 05 or more canou CS 6.60 78 1,000 ml: McGee #01200 IA .72 Abbott #1530-05; 6 per cane: (a) 1 to 24 canon CS 5.23 (b) 25 to 84 canon. CS 4.55 (c) 85 or more canes. . . . . CD 4.18 79 20% it cater; 550 ml: McGee #S1251 IA .75 Abbott #1535-03; 12 per cane: (a) 1 to 24 canou CS 11.13 (b) 25 to 04 canon. CS 9.97 - (c) 05 ormorocanen CS 9.15 80 50% locater; 500 ml: Mdcv #11201 IA 1.03 Abbott #1536-03; 12 per canz: (a) 1 to 24 canes CI 14.17 (b) 25 to 04 cocoa CO 13.21 (c) 05 or more canes CS 12.12 81 2-1/2% in 1/2 ntrength cereal saline, 250 ml: Melee #S2052 IA .46 Abbott #1509-02; 12 per cane: (a) 1 to 24 cenou CS 6.70 (b) 25 to 04 canon. CS 5.95 (c) 05 or more canoe CS 5.46 5% in 1/2 ntrec5th normal sauce: 02 250 ml: McGee #02122 IA .47 Abbott #1526-02; 12 pmr cane: (a) 1 to 24 canoe CU 6.06 (b) 25 to 04 canon, ,..,, CS 6,00 (c) 85 or cosre canes CS 5,50 65~ I - C SUPPLIES OR~SERVICES - Continued INDEX UNIT OP PRICE INDEX UNIT SF I PRICE NO. SUPPLIES OR SERVICES PURCHASE (DOLLAROS NO. SUPPLIIS OS SERVICES PURCSASI [(DOLLARS) 10 eg: 2-1/2% is water: 70 250 ml: MeSsy #5l002.......... IA .4) 71 1,005 ml: McOew #Sl000 IA 63 Abbott #1508-05; 6 per casz: (a) 1 to 24 cases CS 4.51 (b) 25 to 84 cases CI 4,14 (c) 85 or more cases..... CU 3.00 5% in water: 72 150 ml: Mcfaw #Sl103 EA .44 Abbott #1522-01; 12 per case: (a) 1 to 24 cases CS 6.55 (b) 25 to 84 cases...,.. CI 5.53 (c) 85 or more cases CS 5.08 PAGENO="0551" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10465 MoGao #02121 Abbott #1526-03; 12 per case: (a)1to24 oases (b) 25 to 84 cases (c) 85 or more oases 84 1,000 ml: McUao #02120 Abbott #1526-O(; 6 per case: (a) 1 to 24 oases (b) 25 to 84 oases (o) 85 or more oases 5% in nor,aal saline: 85 250 ml: Moist #02102 Abbott #1)27-02; 12 per osse: (a) 1 to 24 cases (b) 25 to 84 cases. (o)8)ormerecases SoGao #S2101 IA .55 Abbott #1527-03: 12 psr case: (a) 1 to 24 casas CS 7.94 (b) 2) to 84 cases CS 6.87 (c) 85 or tore cases Cs 6.31 MoGaw #02100 IA Abbott #1527-05: 6 per case: (a) 1 Ce 24 cases CS (b) 2) to 84 cases. Cs (c)85ormorecases CS 10% in normal saline: Moist #02201 IA .62 Abbott #1534-03; 12 psr sass: (a) 1 to 24 cases CS 7.94 (b) 23 to 84 oases. Cs 6.87 (o) 8) or more cases CS 6.31 MoGaw #02200 EA .78 Abbott #1534-0); 6 per case: (a) 1 to 24 cases CO 5.47 (b) 25 to 84 cases. CS 4.80 (c) 8) or more cases CS 4.41 NORMAL SALINE SOLUTION: MoGao #04403 Abbett #1)83-01; 12 per case: (a) 1 to 24 cases (b) 25 to 84 cases (c) 85 or as rocases ScGao #04002 Abbott #1583-02; 12 per case: (a) 1 to 24 oases (b) 25 to 84 cosos (c)H5ormorecasss OcGao #S400l Abbott #1583-03; 12 per casa: (a) 1 to 24 cases (b) 2) to 84 cases. (o) 85 er sore casos GA .50 CS 7.06 CD 6.07 CS 5.57 93 1,000 ml: 5005w #04000 EA .59 Abbott #1583-0); 6 per mass: (o) 1 to 24 cases CS 3.99 (b) 25 to 84 cases. CS 3.46 (c) 85 or more oases CS 3.18 lACTATED 0500105 INJECTIONS: McGaw #53502 IA .49 Abbott #1)53-02; 12 per case: (a) 1 te 24 oases . CS 6.91 (b) 2) to 84 casas. CS 5.95 (c) 8) or more casas. . . . . CS 5.46 Moist #S3)O1 EA .61 Abbott #1553-03; 12 per case: (a) 1 to 24 cases CS 8.61 (b) 25 to 84 oases CS 7.53 (c) 85 or sore cases CO 6.91 StOat #S3500 Abbott #1)53-0); 6 per case: (a) 1 to 24 cases . (b) 25 te 84 rasas. (o) 85 or sore cases RINGERS INJECTIONS: McGsno #S3801 EA .55 Abbott #1)82-03; 12 per case: (a) 1 to 24 cases CS 7.98 (b) 2) to 84 cases. CS 6.93 (c) 85 or more cases CS 6.36 McGoo #03800 GA .69 Abbott #1)82-05; 6 per case: (a) 1 to 24 moons CM 4.99 (b) 25 to 84 cases CS 4.36 (c) 85 cr morn cases CS 4.00 99 FRUCTOSE 10% INJECTION, 1,000 ml: ScGa,e #S1600 Abbott #1)37-0); 6 per case: (a) 1 to 24 cases (b) 2) to SO oases (c)R5orooreoases 100 SODIUM SECARSOSATE 51 INJECTION, USP; 500 ml: MrGao #S49c1 TRIFLUOPERAZINC NYSROCI:LORIDE: 101 CONCENTRATE; 2 01. Re. 12 omits per coo tamer INJECTIONS, NP; S/S vials, 10 cc: 1 vial 20 via~is 83 500 ml: SUPPLIES 014 SERVICES - Cestinued PRICE INDEX ESIT OF PRICE 441411 UNIT OF ~ SUPPLIES OR SERVICES PURCHASE (SOLLA9)) NO. NUPPLEES OR SERVICES PURCHASE (IRSLS.ARR) UA .55 CS 7.94 CS 6.07 CS 6.31 IA .69 CS 4.96 CS 4.33 CS 3.90 IA .47 CS 6.81 CS 5.78 CS 5.31 94 2)0 ml: 9) 550 ml: 86 500 ml: 07 1,000 ml: 96 1.000 ml: EA .70 CS 5.09 CS 4.42 CS 4.06 .69 4.72 4.13 3.79 88 5)0 ml: 97 500 ml: 89 1,000 ml: 90 1,000 ml: 90 1)0 ml: 91 250 ml: IA .43 CS 6.40 CO 5.41 CO 4.97 IA .44 CS 6.49 CS 5.53 CS 5.00 92 300 ml: IA 1.16 CS 8.79 CS 7.70 CO 7.07 IA 1.34 CO A/P CO VI A/P VI A/P 102 103 PAGENO="0552" 10466 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 05, j. - C 252021 SO SUPPLIES OR UNIT OF PuCE SERVICP.S J~~~HASE DOLLARS ,__4 INDEX NO. SOUPS INS OR SERVICES JX'0ISUtIaQQJ5~5~ I,T, OF P,5 CE PROCOLORPEOAZISE MALEATE CAPSULES: 10 sg: 50 psc,lee: Smith, Kline & French (Conpaeine Spatsole) BT 5.78 SOS capsoles: Smith, Kline & French (Conpaeiee Spanesle) BT 53.98 1,500 (package nf 3 bottlea, 588 capsoles per bcttle): Smith, Kline & Frennh (Conpasine Spane:,le) PC 137.70 15 eg: 50 capeslas: Smith, Kline 6 French (Coepaelee Spansule) ST 7,40 500 napsoles: Smith, Kline & French (Kcepaeine Spansole) BT 70.13 132 1,500 (package of 3 bottles, 500 cepeoles per bottle): Smith, Kline & French (Coepaeine Spansole) PG 181.90 30 so: 133 50 capsules: Smith, Kline & French (Ccnpaeine Spatesle) BT 8.33 134 500 capsules: Smith, Kline & French (Campasine Spanssle) BT 79,26 135 1,500 (package of 3 hottlee, 500 capsules per bottle): Smith, Kline & French (Ccepaeine Spanesle) TABLET8, NP: 1 eg: 104 100 tablets .....,,,,, or ~p 127 105 1,000 tablets iT A/P 106 5,000 (carton of 5 hottles, 1,000 tablets per bottle). . . CT A/F 2 teE: 128 107 105 tablets .,..,,,,., ST A/F 188 1,000 tablets ST A/F 109 5,000 (carton of 50 bottles, 129 100 tablets per bottle). . . . CT A/P 110 5,000 (carton of 5 bottlea, 1,000 tablets per bottle). . . CT A/P 5 ng: 111 100 tablate BC A/P 112 1,000 tablets BT A/F 130 113 5,000 (carton of 50 battles, SOS tablets per bottle). . , . C A/P 114 5,000 (narteu of S bottles, 1,800 tablets per bonnie). . . CT A/F 131 10 eg: 115 100 tablets ST A/P 116 1,000 tablets BT A/F 117 5,008 (carton of 50 bettles, 100 tablets per bottle). . . . CT A/P 118 5,000 (carton of 5 bottles, 1,000 tablets par bottle). . . Cl A/F FUOCOLORPESAZINE ESISYLATK: INJICTIOSS, USP; 2 cc, 10 mg: 119 6parboc. Smith, Kline & French (Conpaeine) OX 4.25 120 100 per boo: Smith, Kline & Freeth (Kompaeiae) OX 61,63 121 500 per boo: Smith, Kline & French (Conpaeine) OX 239.70 LIQUID, O1SAL, 10 ng/ul: 122 1 - 4 fI. oe. bottle: Smith, Kline & Fcencl, 138 75 mg; 50 capesles: (Cospaeioe Concentrate). . . . BT 4,68 Smith, Clime & French 123 36 - 4 Cl. cc. bottles: (Ccepaeite S paeesle) BT Smith, Kline & French (Cospueina Concentrate). . . . CS 141.10 PSOC8ILOSPERAZINE SIPPOSITORIES, SF, 12 suppositeries per bee: SS:JiCTIONS, 5SF; 5 mg/nl; 10 ml: 137 2.5 eg: 124 1 vial: Smith, Kline & French Smith, Kline & French (Coepaeiee) VI 3.19 (Coepaeine Suppositeriss), 125 20 vials: 138 5 mg: Enith, Kline & French (Coepaeiee) OX 55.46 Smith, Kline & French (Cospaeine Soppositeries). , . OX 2,38 126 100 ciale: Smith, Kline & French (Coepeeine) OP. 213.35 139 25 eg: Smith, Kliee & Frenob (Cespeetne Ssppositeriss). . . BE 2.98 PG 206.55 9,95 BE 2.13 PAGENO="0553" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10467 I - C SUPPLIES OR SERVICES - Coctloued INDEX UNIT OF FORCE NO. SUPPLIES OR SERVICER PURCHASE ((DOLLARS) INDEX UNIT OF PRICE NO. SUPFLIES OR SERVICES PURCHASE (DOLLARSJ 140 PROCOLORPERAZINE EDISYLATE SYRUP, USP; 5mg. per5nl. 4 fl em.; Smith, CUbe & French (Compazine Syrop) ST 1.66 PROCHLORPERAZINE MALEATE TASLETS, USP: 5 eg: 141 100 tablets: Smith, Kline & French (Compazine Tablets) ST 6.04 142 1,000 tablets: Smith, Kline & French (Conpazine Tshletn) ST 57.38 143 5,000 (package of 5 bottles, 1,000 tablets pet bottle): Smith, Kline A French (Conpaeine Tablets) PG 245.65 10 mg: 144 lOU tablets: Smith. Kline French (Conpezine Tablets) ST 7.82 145 1,000 tablets: Smith, Kline & French (Compazine Tablets) ST 74.38 146 5,000 (package of 5 bottles, 1,000 tablets per bottle). . . . FE 275.40 25 eg: 147 lOU tablets: Smith, Klioe & French (Compazine Tablets) SI 9.18 148 1,088 tablets: Smith, Clime & French (Compseine Tablets) OX 87.13 149 5,000 (package of 5 bottles, 1.800 tablete per bottle) . . . , PC 335.75 PAGENO="0554" 10468 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY ABBOTT LADS, DEPT 346 14TH & SHERIDAN RD NORTH CHICAGO, EL 60064 Coo: (312) 688-7901 FTS: (312) 353-4400 5056o AMERICAN QUININE HOSPITAL 0EV $5,000 - 10,000: 3% ONE FAIRCHILD CT 10,00]. - 15,000: 5% PLAINVIEW, NY 11003 15,001 - 20,000: 7% CoO: (516) 931-3300 20,001 - 25,000: 10% FTS: (212) 460-0100 5B57c ABNOUR PHARMACEUTICAL CO NONE 111 0 CLA055DON PHOENIX, AZ 85077 Con: (602) 248-5331 P'CS: (602) 261-3900 5H5Hc AHTRA PHAR0IACEE'EECAL PRODUCTS INC NOSE NEPONSET NT WORCESTER, MA 01606 Con: (617) 852-6351 PTS: (617) 791-2251 5O59c BIICHAM-0855INGELL PHABMACEETECALO DIV OP BEECHAM INC 501 - 551 FIFTH NT BRISTOL, TB 37620 COB: (615) 764-5141 YES: (901) 534-3011 506Cc BRISTOL lABORATORIES DIV OP BRISTOL-MYERS CO BOX 657 SYRACUSE, NY 13201 Con: (315) 470-2065 PTN: (315) 473-3350 Send renlttanoes to the contractor at Boo 7251, Chorch Street Station, New York, NY 10049, ELI LILLY & CO PHARMACEUTICAL DIV 307 1 MCCARTY ST INDIANAPOLIS, EN 46206 Coo: (317) 261-2318 PlO: (317) 633-7000 McOAW LABORATORIES 1015 GRANDVIEW AVE GLENDALE, CA 91201 Coo: (213) 246-6521 PTE: (213) 247-2202 10 6$, I - C LEST OP CONTRACTORS CONTRACTS AWARDED AR A RESULT OP N500TIATIOS P0010ANT TO OUCTION 302 (c)(7) & (io) OF T9OE FEDERAL PROPERTY AEOIENISTRAYEVI SERVICER ACT OP 1949, 63 STAT, 393, AS ASSESSED [41 USC, 252 (CS(7) & (10)3 HUSEBEIS SIZE: Listed in tho colooc COSTRACT SOMBER V797P- is tho bosineos oioo indicator of "a" for noah buoiooss and "o' for other thao stall badness. TELEPOSNU NUMBERS Li d i h lssoe CONTRACTOR ADDRESS TELEPHONE nd h dd h ee 0 1 ph ash (C S i 10 d fi f hoes d by h P d 1 T 1 eesni 0 Sy sob (YES) DOLLAR VOLURD DISCOUNT COLUMN Di HO how Of d by h b d b d 11 hun dO p1 MINIMUM ORDER COLUMN Li t A 0 lb mall A h A h hd p MAXIMUM ORDER COLUMN Li t d 0 h naoiooae hE 0 0 0 any CONTRACT CONTRACTOR DOLLAR PROMPT 01010010 MAXIMUM NUMBER ADDRESS 6 VOLUME PAYMUNT ORDER ORDER TINE OP DELIVERY V797P- TELEPHOSU DISCOUNT DISCOUNT (DOLLARS) (DOLLARS) (DAYS) SONS SET ANY 5,000 10 5O94c NONE 1/10 50.00 25,000 10 NET ANY (Case 5,000 3 to 5 lots osly) 1/20 ANY (Cans 5,000 5 to 21 Quantities) OUT ANY 5000 3 5 2/30 ANY 5,000 10 2/30 50.00 5,000 10 2/30 ANY 5000 2 10 5O6lc 5088c NONE NONE NONE PAGENO="0555" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10469 5062c PARKE-DAVIS & CD NONE BOX 110 GPO DErR0IT, MI 48232 Coo: (313) 567-5300 PUS: (313) 226-6500 5063c PPIZER LAOORMORIES DIV PFIZER INC NONE 235 E 42ND ST DEW YORK, NY 10017 C,ou: (212) 573-2679 FTS: (212) 460-0100 5R64c PHILIPS ROXANE LABORATORIES INC NONE 330 0011 ST COLUMBUS, OH 43216 Coo:: (614) 228-5403 PTS: (614) 469-6600 5065c RISCER LABORATORIES INC NONE 19901 NORSNOFF ST NORUNSXDGE, CA 91324 Corn: (213) 341-1300 FTE: (213) 688-2000 5066c SMITH, KLINE & FRENCH LABORATORIES NONE DIV OP SMITH/KLINE CORP 1500 SPRING 000DEN HZ PHILADICLPHIA, PA 19101 Coo: (215) 564-2400 FTS: (215) 597-3311 5O67c E 16 SQUIBB & SONS INC NONE BOX 4000 PRINCETON, NJ 08540 Corn: (609) 921-4000 & 921-4881 PTS: (201) 645-3000 5068c ThE UPJOHN CO NONE 7000 PORTAGE RD KALAMAZOO, MI 49001 Core: (616) 381-1010, EXT 76 FIB: (616) 962-6511 NET 50.00 5,000 10 3 to 5 CONTRACT 5~GRIER V797P- CONTRACTOR AI)SRESS & TELEPSONE LINT DOLLAR VOLUME DISCOUNT OF ~ CONTRACTORS - Continued PR000T MINIMUM PAYMENT ORDER DISCOUNT L (DOLLARS) MAXI9NS4 GONER (DOLLARS) 65, I - TINE OP DELIVERY (DAYS) NET ANY 5,000 1/30 ANY 5,000 10 1/30 ANY (5% 5,000 10 Service Charge for ordere ieee $50.00) 2/30 ANY 5,000 10 NET ANY 5,000 10 NET 02ff 5,000 10 NCNEDULEN RSLATER ITEMS DROSS AND PHARMACEUTICAL PRODUCTS DRUGS AND PHARMACEUTICAL PRODUCTS CROSS REPEl ~ UNCTION 65 U A 65 I B PAGENO="0556" 10470 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY ALPHABETICAL INDEX AMPICILLEN CAPSULES AOTIOEUOPSILIC FACTOR (Onnan) DEXTROSE: 2-1/2% in water 5% in water 10% in water 20% in water 50% inwatnr 2-1/2% in 1/2 strength nnrnal saline 5% in 1/2 strength nnrsal saline 5% in normal saline 10% in normal saline EXTENDER INSULIN ZINC SUSPENSION FRUCTOSE 10% INJECTION INSULIN CLONES INJECTIONS INSULIN INJECTIONS INSULIN RISC SUSPENSION ISOPHANE INSULIN SUSPENSION KETAMIDE OTEPOCULORIDE INJECTIONS LACTATEU RINGERS INJECTIONS LIDOCAINE ISYDROCOLORIDE INJECTIONS 1% 2% LIDOCAINE HYDROCOLORIDE INJECTION with Epinephrine: 1% 12 2% 13 Liqaid, Bral Syrnp PROCOLOOPENAZENE SALEATE: Capsslen Tablets PROCHLORPEEAZENE SUPPOSITORIES PROMPT INSULIN ZINC SUSPENSION PROTAMINE ZINC INSULIN SUSPENSION RESESPINE TABLETS RINGERS INJECTIONS SODIUM BICARBONATE 5% INJECTION SODIUM SIPAUIN INJECTIONS SODIUM RARFARIS TABS TETANUS IMMUNE GLOBULIN TRIFLUOPERAEENE SYUEOC5LO1SIBE: Injections Tablets MEPERISINE SYDROCIILORIED INJECTIONS: Cartridge Needle Unite Ae,paln NORMAL SALINE SOLUTION NORMAL SERUM ALBUMIN (names): 5% Salt Poor 25% PILOCARPINE SIYDNOCSLORIRE OPHTHALMIC SOLUTION PLASIIA PROTEIN FR/dICTION (::,asas) POTASSIUM CHLORIED INJECTION PROCSILOUPIRAZINE ESISYLATE: Injention 67 - 69 26 70, 71 72 - 75 76 - 78 79 OS SR 82 - 84 05 - 07 00, 09 36-30 - 36-3C 99 29 - 3OB 200 - 20C 33 - 34B 31 - 32B 52 - 53 94 - 96 14 - 16 17 - 19 (5 - 48 49 - 51 90 - 93 20A, 208 21 - 23 37 - 40 24, 25 41, 42 119 - 121 and 124 - 126 122, 123 140 127 - 136 141 - 149 137 - 139 36-2A - 36-2C 35 - 36-EN 43, 44 97, 98 100 1 - 11 54 - 66 27 181 182, 103 104 - 118 -0- PAGENO="0557" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10471 Senator NELSON. Please proceed. Dr. LEE. In your item ~ which has to do with actions on the Comptroller General's report, it proposes a number of changes in the management of our drug procurement program. We have indi- cated our general agreement with this report and our intention to implement those recommendations which relate to the VA. The cur- rent status of each recommendation involving us is as follows: A study led by 0MB with representatives of GSA, DOD, VA and 115W, has been completed and is currently being circulated to the heads of the departments and agencies concerned for final decision. The study and report relate to other medical items as well as drugs, and proposes the consolidation of requirements, the use of both VA and DOD central systems to purchase and distribute all Federal agencies' medical requirements, the authorization to field installations of VA and DOD to use the central purchase and dis- tribution facilities of either agency. I note this was a point made by General Hayes this morning. We anticipate that the final positions and a Government policy will be developed on this report shortly. In the meantime, discus- sions have already begun between DOD and VA officials on the methods and procedures necessary to achieve central purchasing facility. We have, for several years, checked with the Defense Personnel Support Center prior to initiation of purchase action from our Marketing Center. If DPSC has the item in stock at a favorable price, we requisition from them rather than purchase from com- mercial suppliers. Our current level of procurement of drugs from DPSC is $800,000 annually. We also acquired over $400,000 in drugs from the medical emergency stockpile in fiscal year 1973. Altogether in fiscal year 1973, our sales of drugs to other Federal Government agencies from our own central supply system amounted to $3,500,000. We awarded contracts valued at $54 million, which they used. The GAO report contained a recommendation that the VA should develop specifications for all new drugs which VA decides to manage centrally. We have implemented this recommendation to the extent we feel it appropriate. That is, 175 items which can be procured competitively. We have developed specifications for those items which can be procured competitively. We feel it is unnecessary to develop specifications for those drug items for which we know there can be no competition because of patents, or if the drug is sufficiently prescribed in official .compendia. Another recommendation proposes that DOD and the VA should consider jointly developing specifications which would satisfy all Federal agencies' drug requirements. We are happy to go forward with this. As a matter of fact, we have used the DOD specifications in developing our own for drug products. We accept this recommendation. We have for several years used DOD specifications, modified as required, in developing VA speci- fications for drug products. At the same tithe, we have made avail~ able our specifications to DOD. A control system would assure `a more effective joint effort and, in most instances, would result in a PAGENO="0558" 10472 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRT single specification which would be Federal rather than an agency specification We will approach DOD to establish such a system Another recommendation was that the VA should make a numbei of changes in its existing system for reporting VA field station drug procurements, and should insist that Federal Supply Schedule con- tractors report detailed sales data when required by contracts. We are currently improving our internal reporting system. This recommendation did not propose any change in data input, but rather that the data be consolidated into different report formats and that greater care be exercised in accurate reporting We plan to supplement our current reports with summary reports as pro posed by GAO We expect to implement this summary reporting system for the period ending June 30, 1974 Our computer system is currently being programed to accomplish this We are working with the General Services Administration on the problem of reporting of vendor sales. That is not an easy thing, the impact of contractors' operating costs, this has a particular ad- verse effect on a small business firm. If the Federal Government imposes detailed and complex re- porting systems upon contractors, this impacts the contractor's oper ating costs. This has a particularly adverse effect upon the small business firm Our past practice has been to rely upon the amount and type of data available from each firm's existing internal re porting process This has resulted in a lack of uniformity of datdi and the inability to assess its validity In some instances, we feel firms tend to understate the volume of sales to the Federal Govern- ment. Others appear to have overstated such sales in order to retain marginally justified contracts. Few firms maintain records of sales both by individual item and individual Federal activity in a readily retrievable form. On the two most widely used commodities by VA-drugs and food -we have relied upon our own internal reporting of field station purchases and orders rather than upon vendors' sales records This is an alternative, but might prove too costly if extended Govern mentwide We will continue to work with the General Services Ad ministration, which has regulatory responsibility in this matter, to improve existing vendor sales reporting systems. Another recommendation proposes that the DOD and VA con- sider using a standardized coding system, such as the National Drug Code. The VA has already decided to use the National Drug Code for identifying drug purchases We cannot fully implement this decision until HEW completes the assignment of National Drug Codes to virtually all items We have already begun input of the NDC where available into our records, so that we can begin its use when the system is complete Our information ]S that it is about 75 percent completed It is a responsibility of the HEW and one over which we have not sought nor do we seek any control The final GAO recommendation affecting the VA was that the DOD HEW and VA should review the frequency and types of in spections required and the related changes needed to facilitate the transfer to FDA of all quality assurance responsibilities pertaining to purchases of drugs by Federal agencies PAGENO="0559" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10473 I would like to discuss this if you wish, in some detail, because I know it is a point of interest to the committee. This is your third issue, consolidation of quality assurance in FDA. The truth is we have substantially relied upon the FDA for quality assurance in our drug procurement program for many years. Our position is-and has consistently been-that we are will- ing to rely upon FDA for a comprehensive quality assurance pro- gram, providing FDA makes the necessary information available to us in a reliable and timely manner. Senator NELSON. Do they? Dr. LEE. They have in many instances. In some they have not, and we have had discussions with FDA officials in recent weeks to indicate our VA requirements. It looks as though we can have them met in each instance, yes, sir. For the past 15 years, we have relied upon the FDA laboratories to perform drug assay and testing of those drugs VA procures. Those items we identify as requiring testing before issue to our hospitals are received at our supply depots and placed in quarantine. Random samples ar~ selected by VA personnel from each lot or batch and sent to FDA laboratories, usually the one in Cincinnati, Ohio, for assay and testing. After the results are reported to us, we either remove the drug from quarantine and place it in stock for issue, or, if the report is unfavorable, return the drug to the vendor as rejected merchandise. V~Te also select random samples from items delivered under Federal Supply Schedules and submit them for test in a similar manner. Currently, we are sending about 1,400 items a year to FDA for laboratory testing. We reimburse the FDA for this service. We rely on both FDA and DOD inspections made by those agen- cies for their own purposes where feasible. We attempt to deter- mine from them or from prospective contractors if either of these two agencies has inspected the contractors' plants within the past 12 months. We receive copies of inspection reports from DOD, but not from FDA. Current discussions will, we believe, develop in- creased information exchange with FDA that has not been routine up to now. To supplement FDA and DOD information, we employ two pharmacists at our Marketing Center, each of whom devotes approximately one-half his time to performing plant inspections and quality control. If neither FDA nor DOD has inspected a facility in which we are interested in the past 12 months, we conduct our own inspec- tions, using the inspection guidelines developed from material obtained from DOD and from Good Manufacturing Practices pub- lished by FDA. In addition, we also review the vendor's capi~city, performance and delivery capability as well as other matters re- lated to contract administration. During the first 4 months of the current fiscal year, VA officials inspected 23 plants. We declined to contract with six firms because of our findings. We did not find evidence in these cases of production of adulterated or dangerous drugs. We would, of course, have reported any such instances to the FDA had we encountered them. PAGENO="0560" 10474 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY I previously stated that if we are assured of adequate and timely information, we can accept GAO's recommendation to rely upon FDA for quality assurance-both for plant inspections and labora- tory testing. We mentioned preliminary discussions with HEW and FDA officials to accomplish this. We expect the discussions to result in early implementation. In 1973, VA did 130 inspections and our rejection rate was 32 percent. Senator NELSON. For failure to meet manufacturing requirements? Mr. CooK. For a variety of reasons, for contractual requirements as well as those reasons going to the heart of the drug; quality. Some of them were what we felt were not adequate good manufac- turing practices. We did not find any that were gross violations of manufacturing practices. Senator NELSON. When you say contract reasons, they could not meet the contract schedule? Mr. COOK. In some instances we felt they were unable to meet the delivery schedule they had said they could meet. Senator NELSON. Do you have a breakdown of the reasons that could be submitted for the record? Mr. CooK. It will be submitted for the record. [The information referred to follows:] REASONS FOR REJECTION OF CONTRACTORS' FACILITIES BY VA INSPECTORS FISCAL YEAR 1973 1. Two firms failed to demonstrate operation capacity to produce in accord- ance with VA delivery requirements. 2. Forty firms were rejected for the following reasons. Most of the firms were rejected for more than one reason: QUALITY CONTROLS (a) Commingling of processed materials with raw materials and/or tested and quarantined items-23 (b) Incomplete listing of chemical components of raw and finished ma- terials-14 (c) Lack of labelling controls-9 (d) Equipment not calibrated-8 (e) Stability program lacking-~8 HOUSEKEEPING No specific requirements for cleaning processing equipment-1O Inadequate air exhaust-i Floors encrusted with materials and peeling paint in processing area-2 Lack of screening of windows and doors-2 Mr. GoiwoN. Do you have any problems which are considered serious? Mr. CooK. We had a few that we considered serious, one a couple of weeks ago on the west coast in which we found that there were capsule problems in this case. They were contaminated. Mr. GoIwoN. What company was that? Mr. CooK. Syntex, I believe. Mr. GORDON. What about your other serious problems? Mr. COOK. And recent problem with Abbott Laboratories which we felt were serious. PAGENO="0561" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10475 Mr. GonioN. Both members of the Pharmaceutical Manufacturers Association, by the way. Mr. COOK. I do not know. Mr. GORDON. How about small firms? Mr. CooK. Yes, one small firm inspected within the last couple of weeks. I do not remember-it is in Chicago, in which they had a number of deficiencies we felt which indicated we should not contract with them. Mr. G0IW0N. You have reported that incident to the FDA, I take it? Mr. CooK. Yes. Dr. LEE. Every reasonable effort must be made to treat all VA patients with the most effective therapeutic agents indicated, which will be procured at the most favorable price that can be obtained. Since there are differences of opinion on the effectiveness of many drug products and valid differences in approach to the selection of therapeutic regimens, we cannot rigidly restrict professional prac- tices by administrative direction. We will rely upon our therapeutics agents and pharmacy re- views committees at each of our field stations to carefully screen all drugs approved for use at their stations to assure the most effective products are selected for inclusion in the local formulary each hospital maintains. Mr. CooK. We do not feel that the violations were violations of the law, of the Pure Food and Drug Act. We felt they were prac- tices we did not feel were those we wanted the firms supplying us the product at that time under those conditions. Mr. GORDON. You are not talking about the three serious ones you mentioned before? Mr. COOK. Yes, sir. They had not used these capsules. They were there but they were not used on our product. Senator NELSON. Are you saying that these discrepancies or what- ever you wish to call them, did not violate the standards of good manufacturing established by the FDA? Mr. CooK. Senator, I am not sure that I am prepared to even judge that. I am saying I did not, in the case, for example, of one of the firms where there were capsules contaminated, we had no evidence they were using them. We decided we would wait until those capsules were out of the plant before we contracted with the firm, in any event. Dr. LEE. Your fourth issue in the questions which were given to us is the use of formularies. The VA adopted the American Hospital Formulary Service as our agency-wide formulary. We have required for many years that each hospital maintain a formulary for those drugs which are ap- proved for use at that hospital. The formulary consists of mono-b graphs on those drugs selected by the station therapeutics agents and pharmacy review committee. Through peer review of the prescrib- ing practices of our staff physicions, we are assured that the knowl- edge and information of those responsible for patient treatment are combined in determining which drugs will be in the station formu- 32-814 (Pt. 24) 0 - 74 - 36 PAGENO="0562" 10476 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY lary. Committee members raise questions as to the safety and efficacy of specific drugs and combine their knowledge to evaluate and select the best agent. Both staff physicians and fee basis physicians are expected to prescribe only those drugs in the station formulary. For our in-patient program, exceptions are made when the indi- vidual physician determines he will accept only the specific item prescribed. Physici.ans desiring to continue to use items not in sta- tion formularies are required to submit to the station committee their reasons, and to justify their inclusion in the station formulary or substitute the necessity for a continuing exception. This formu- lary system we currently use is the one which we feel most effec- tively meets the widespread and diverse VA needs. Senator NELsoN. Because of the time situation I want to be sure to raise one issue with you, which shocks me. It has nothing to do with VA, but with one of your suppliers, the Merck Co., and the drug is Aldomet, an anti-hypertensive. I raise this because it seems to me to be a very important policy question for the Government. As you know, Merck synthesized this drug in 1953 and secured a patent. They could find no use or value for the drug. The National Heart Institute (NHI) took the drug and did some experimenting and created the use for the drug at the expense to the taxpayer. I shall read from the Senate Appropriations Committee hearings on HEW appropriations for 1965. It says here on page 1310 that: However, for several years after its synthesis in 1953, alpha-methyl DOPA (which is Aldomet), was of interest only as a research tool for studies on amine metabolisms, since neither it nor any of its chemical relatives demon- strated any effect whatsoever on blood pressure in animal studies. Despite evidence of any demonstrable blood-pressure effects in animals, the National Heart Institute scientIsts became interested in alpha-methyl DOPA in 1958. They felt that it might possibly be useful for the treatment of pheochromocy- tome, or malignant carcinoici. . . . So the NHI scientists cautiously tested the drug in some patients with pheochromocytoina or malignant carcinoid. Parallel biochemical studies were also undertaken in several patients with hyperten- sion. . . . Had this drug not been tested in humans, it might even today be considered simply another research tool for studies in amine metabolism. In- stead, under the trade name Aldonet, the drug has proved to be a: valuable new addition to the physicians arsenal of drugs against hypertension. Also, in hearings before the House Appropriations Committee for 1966 HEW appropriations, NHI testified that: It is probable that Aldomet would never have made the grade if NHI sci- entists had not tried it in human subjects despite its lack of hypertensive action when tested in laboratory animals. The near accidental discovery of its effectiveness in hypertensive patients resulted in a valuable new drug. In long-term clinical trials at NHI, Aldomet has effectively controlled blood pres- sure in about two-thirds of hypertensive patients in which it has been tried. So the use of the drug was discovered and developed by scien- tists at the National Heart Institute. It is interesting to note that in 1970 the sales of this drug were $33,200,000. One year later in 1971 it had jumped to $42 million, which would make it one of the top-selling drugs in the country. I also note, and correct me if I am wrong, that VA spends more money on this drug than on any other drug, is that correct? Dr. LEE. We need to go back a little in history before we can answer that questior~. PAGENO="0563" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10477 Senator NELSON. Let me finish the question. I am only reciting the facts thus far. I understand that, though this was developed by the Government as it clearly was, and is a big seller, when VA seeks to purchase the drug, Merck refuses to give any discount, well, only 3 percent which is not enough to warrant buying it through your central purchasing system. Dr. LEE. It is correct. We are purchasing approximately a mil- lion dollars worth of that drug a year at the present time. Th~~ historic study of hypertension and control of mild hypertension thereby controlling severe hypertension and stroke and so forth, was initiated in VA by Dr. Freis. He demonstrated that early treatment of hypertension did prevent the frequency of cardio- vascular attacks, both coronary and stroke. As a matter of fact, he won the Lasker Award 4 years ago for that particular finding. Having done so, we felt that his findings demonstrated to the Vet~ erans Administration that we had best see if we could not apply this in patients. Senator NELSON. Which drug was this? Dr. LEE. This research finding was the fact that treatment for hypertension will sustain these people longer. There are several drugs which can be used in this area. My point is at the present time, we have screened well over 100,000 patients who have other than hypertensive problems and find that approximately one-third of these people have what by definition is a hypertensive level that needs to be followed. Of that one-third, half of them need treatment. What I am saying is thaL this is a big problem, that it is increasing and that there will be a lot more pur- chases of these anti-hypertensive drugs. A policy needs to be devel- oped not only on the Heart Institute's finding on the Aldomet itself but we are all getting into this problem of early hypertension and stroke. This is a problem. Senator NELSON. Well, now that I realize NHI developed the use, it shocks me that they would not get a use patent for this drug. It bothers me more that they have given the Merck Co. a very valuable drug, and the company would not even give VA a break on the pur- chase price; what is your observation about that? Mr. COOK. Senator, this is the largest single drug item whi"h we procure from our Federal Supply Schedule. It is not the largest use item in the Agency. Senator NELSON. It is the largest item on the Federal Supply Schedule, and it is $1 million a year? Mr. COOK. Yes, sir. Senator NELSON. And as Dr. Lee just testified, it will be larger? Mr. COOK. Yes. Senator NELsoN. And it amounts, to about-what do you say are the total purchases? Mr. CooK. Last year it was $86 million. It will be $112 million this year. Senator NELSON. It is a large item. I just wonder what your reac- tion is or what does Merck tell you when you negotiate ~vith them PAGENO="0564" 10478 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY and they do not give you a discount sufficient to make it worthwhile to put it into your depot system? Mr. CooK. Merck has given us a discount for the product over the commercial price in placing it on the Federal Supply Schedule. They have not given us sufficiently greater discount to make it worth our while to offset the cost, as a matter of fact, of placing it in our cen- tral depot system. The current price which they have offered us, I think the schedule price is a little higher, for the 250 milligram 100 tablet bottle is $5.01. I believe that is below-certainly it is below the retail market price. I can personally attest to that because I use the product. I know what I pay for it. Senator NELSON. What do you pay for it retail? Mr. COOK. $8. Senator NELSON. So they are giving the Government the mag- nificent break of selling it for $5. I would guess, then, that the re- tailer is buying it about as cheaply as the Government. Mr. COOK. That is possible, sir. Dr. LEE. You asked our reaction, sir, and our reactions are two. The first is we would like to negotiate a better price. The other is something we have been following through repeatedly and are doing so in this particular instance, and that is to seek through re- search in the VA drugs which are equally effective, perhaps less in price. Senator NELSON. You say you get it from the Federal Supply Scehdule for $5- Mr. CooK. The Federal Supply Schedule. Senator NELSON. You are able to purchase it at retail for $8? Mr. COOK. Yes, sir. Senator NELSON. It would surprise me if the Government is get- ting it any cheaper than the retailer because it has to go to the wholesaler and from there to the retailer, each one getting a markup. The average retail markup around the country has been about 66-2/3 percent. If that is so, the Government is paying as much to Merck as the retailer. But it shocks me that a company would take the benefit of the research of the Federal Government, the drug then becoming one of its largest sellers-a drug for which the use was discovered, developed, proven by a Federal institution-and then turn around and not give them a break on the price. If NHT had taken a use patent on it as we should have, we would have been able to get a fair break on it. Mr. COOK. We intend continuing to negotiate with them. Senator NELSON. Let us know how you come out. I will check the price that is supplied to the retailer. Please proceed. Dr. LEE. We are coming to the conclusion of our statement, Mr. Chairman. Every effort is made to assure that VA does not expend more than necessary for drug products. The problem is both simple and complex. It appears simple, since the mechanisms are available for PAGENO="0565" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10479 determining the reasonable price of a drug product. It is complex in that the selection of which drugs to use must be made from among thousands of possible choices, relying upon the memory, ready reference and experience of many persons making these choices. We feel the need for education of physicians on those prescribing practices which will result in minimizing the cost of drugs is an area where we can assist; but it is one which can best be met through the combined efforts of the Federal Government, the med- ical academic community, those responsible for providing support. to health care delivery programs, and the Congress in its delibera- tions upon national health programs. We believe the soundest ap- proach to rational selection of suitable drugs at reasonable costs is through education of physicians, patients, and support personnel, and that we should promote the widest dissemination of informa- tion on the relative quality and efficacy of drug products marketed in this country. Where reasonable doubt exists on the relative qual- ity and efficacy of competing products, it should be resolved by appropriate research and clinical testing, and our staff is exceedingly active in a great deal of this, including the hypertensive drugs. We are engaged in a VA effort internally and are ready to utilize the resource in assisting, if you like, in a wider Federal program to achieve these goals, the education, obviously the dissemination of the various drug usages, the purchases and controls, and we are happy to go forward with this committee and think there has been a good deal of progress made in the past few years. Senator NELSON. Thank you very much, Doctor. I have one final question. I note from your statement that $34 million out of the $41 million central purchasing are sole source items. The question I would be interested in is how many different compounds does this represent? This is what I am getting at. Panels of the National Academy of Sciences-National Research Council concluded that tetracycline-I do not want to present this as a quote-would be the drug of choice of that particular family of antibiotics. There might be some exceptions. But you have a whole list of analogs of tetracycline, such as oxytetracycline (trade name: Terramycin) which is much more expensive, chlortetracycline, (trade name: Aureomycin), and as you look at the price schedules of those drugs they are much more expensive. A number of other dis- tinguished witnesses, clinicians who say tetracycline is the drug that ought to be used, although there may be some circumstances when another~ tetracycline may be helpful. How much of this sole source purchasing is due to the purchase of one of the tetracycline family other than tetracycline itself? Do you have any notion about that? If you do not, could you supply us an example? Mr. CooK. It is not among these 369. It is purchased by us on a competitive or generic basis. I cannot tell you specifically- Senator NELSON. You say you purchase tetracycline on a com- petitive basis? Mr. CooK. Yes, sir, and we do not have the others in our system. Senator NELSON. You do not have them in your system? PAGENO="0566" 10480 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Mr. COOK. No. Senator NELSON. Are there other examples of the kind I am think- ing of? We have seen many times on some DOD purchasing that the specs were drafted in such a way that one of the analogs of one of the classes of drugs ends up being purchased on a negotiated sole source basis simply because that was the specification that was drafted to fit that particular brand of that particular class of drug. Do you have any notion whether that occurs in any percentage amount of this $34 million that you buy? Mr. COOK. I can try to provide that for the record later. I will state from general information I am sure there are some of this $34 million that are similar analogs of each other. None of them, I hope, are there because of the specification that made them sd~le source. [The information referred to follows:] ITEMS OF SIMILAR ANALOGS CARRIED IN VA DEPOT STOCKS Of the 369 Items in VA Depot stocks as sole source, 6 items representing a total of 17 different analogs are stocked. The remaining 352 are unique prod- ucts not duplicated in the system. Three analogs of cephalosporin account for 8% or $3.3 million of the total Depot sales volume. The remaining 14 analogs account for 2% or $99~ ,000 of the total Depot sales. Mr. GORDON. Actually you are buying in dollar terms only 17 percent of your drugs on a competitive basis; is that correct? Mr. CooK. On the basis of dollars, yes. Mr. GORDON. That i.s a pretty small percentage, wouldn't you say? Mr. CooK. On the basis of dollars it is. If generic drugs are cheaper your dollar value has to be less. Senator NELSON. On that point, if you are taking bids on a drug, the `brand name that is selling at a very high price at the retail market may out-compete a generic drug in a bid. Mr. COOK. Many times they do. Senator NELSON. We have seen `drugs which are as much as 20, 30, or even 40 times as much in the retail marketplace as the same manufacturer's bids to DOD or the city of New York. If you take a bid it isn't just for a generic drug, it is a bid by the generic name, asking for the drug from any reliable source? Mr. COOK. That is correct. Senator NELSON. And .a brand name may out compete? Mr. CooK. In many instances they do. Mr. GORDON. I brought to your attention the fact that in Canada you can get the same drugs, not necessarily by the same company, the same drugs that are sold here. In Canada they are much less. Why can't the VA buy in Canada? Mr. CooK. Mr. Gordon, we approached 11 Canadian firms con- cerning specific products, and inquired of them if they were inter- ested in selling to the Veterans Administration in the United~ States. The responses that we got initially were no, for two reasons. One reason was in some cases they were operating utider a license that did not permit sale or export from `Canada to any place, not just the United States. PAGENO="0567" COMPETITIVE PROBLEMS IN THE IiRUG INDUSTRY 10481 Their second reason was they did not have NDA's to market and sell the product in the United States. We suggested they might perhaps apply. So far none have, so we cannot purchase the drug unless they hold some type of NDA for its marketing in the United States. Mr. GORDON. Well, they can get an NDA if it is worth their while. Mr. COOK. If they wish. Mr. GORDON. But it is the patent problem that is troubling you. Mr. CooK. Probably. Mr. GORDON. How about pentaerithratol tetranitrate? You can buy that domestically at a much lesser price. How come you are paying such high prices for it? You paid $9.44 under direct purchase; $27.41 from FSS; and a high of $27 and a low of $24.65 through local purchase. You could get it in Canada for a much, much lower price, and even in the United States for as low as $1.65 under its generic name. Mr. HARDING. May I respond? This happens to be one of those drugs which is on the "possibly effective" list on which we are awaiting the final decision of the NAS-NRC studies. Senator NELSON. I thought you had removed everything on the "possibly effective" list. Mr. HARDING. No, sir. If there is nothing in the higher categories that the doctor is sure will work then we will still maintain that "possibly effective." We don't have too many of those left, but a few. This is true of all the Government agencies, not only the VA. But the reason that we have had to do this, this is a drug where many patients became upset when they heard this drug was going to be removed from the market. This is still under study and until studies are completed we are holding-~ Senator NELSON. Do I understand correctly that you do continue to stock drugs classified by the National Academy of Sciences-Na- tional Research Council as "possibly effective," arid "probably effec- tive"? Mr. HARDING. We do not stock those classified "ineffective." The others we stock only if there is nothing appropriate in a higher category. Mr. CooK. To put that in perspective, Senator, there are less than three dozen "possibly effectives" our people have identified where no drug of greater effectiveness than this classification on the market. Mr. GORDON. But you are paying $9.44 for a thousand tablets of 10 milligram pentaerithratol tablets, is that correct? Mr. HARDING. That happens to be one of those very well marked items and a heart patient is not very happy to have his drugs switched around. As long as there is a study-I have stood at the window many, many times and tried to tell someone the other drug was the same thing, but with that type of patient I am very reluc- tant to do that. So we have kept that drug for that reason. Mr. GORDON. You mean the patient demands the higher priced drug? PAGENO="0568" 10482 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Mr HARDING The patient demands the drug he has been getting It is identified as such By the way, I might add one other statement All drugs have a generic name The brand name is only the name the company has attached to it When only one company manufactures a drug that is still generic purchasing If someone else comes along- Senator NELSON I understand that I wanted to be sure we weren't talking only about a generic~i'nanufacturer v. a brand name. Mr. GORDON. Just one question. Is it possible within a specified time, let's say 6 months, to bring that 17 percent bought on a competitive basis up to 25 percent ~ Mr HARDING I would say on that, sir, yes, if there is enough competition in the sole source drugs or also if there are enough of the geneiic products at high enough cost go into the generic compe tition Mr CooK It is possible I ca~ t't tell you whether it will be 25 or something less than that or greater than that One of the things we do know, in quite recent times there have been a number of drugs previously patent protected, on which the patents have ex pired and the number of firms obtaining NDAs' to make these thugs have been substantial within the last 2 or 3 months Senator NELSON Thank you very much, gentlemen The hearings will open again tomorrow with Dr Edwards [Whereupon, at 12 00 p m, the committee recessed, to reconvene at 10 10 a m, Wednesday, March 6, 1974 J PAGENO="0569" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY (Present Status of Competition in the Pharmaceutical Industry) WEDNESDAY, MARCH 6, 1974 U.S. SENATE, SUBCOMMITTEE ON MONOPOLY OF THE SELECT COMMrrn~E ON SMALL BUSINESS, Washington, D.C. The subcommittee met, pursuant to recess, at 10 a.m., in room 6202, Dirksen Senate Office Building, Senator Gaylord Nelson [chair- man of the subcommittee] presiding. Present: Senators Nelson and Beau. Also present: Chester H. Smith, Staff Director and General Coun- sel; Benjamin Gordon, Staff Economist; and John 0. Adams, Minor- ity Counsel. Senator NELSON. Our witness this morning is Dr. Charles Ed- wards, Assistant Secretary for Health, Department of Health, Education, and Welfare. I don't know in what order your associates are seated. If you would have them identify themselves for the record for the reporter, Dr. Edwards. STATEMENT OF CHARLES C. EDWARDS, M.D., ASSISTANT SECRE- TARY FOR HEALTH, DEPARTMENT OP HEALTH, EDUCATION, AND WELFARE, ACCOMPANIED BY IOHN JENNINGS, M.D., ASSOCIATE COMMISSIONER FOR MEDICAL AFFAIRS, FOOD AND DRUG AD- MINISTRATION, DHEW; KEITH WIEKEL, IYLD., ASSOCIATE AD- MINISTRATOR FOR PLANNING AND EVALUATION, LEGISLATION, HEALTH SERVICES ADMINISTRATION, DHEW; MARK NOVITCH, M.D., DEPUTY ASSOCIATE COMMISSIONER FOR MEDICAL AF- FAIRS, FOOD' AND DRUG ADMINISTRATION, DREW; VINCE GARDNER, CHIEF, DRUG STUDIES BRANCH, SOCIAL SECURITY ADMINISTRATION, DHEW; AND FRANK SAMUEL, DEPUTY AS- SISTANT SECRETARY FOR LEGISLATION (HEALTH) DREW Dr. EDWARDS. Thank you, Mr. Chairman, Senator Beall. Let me identify my colleagues. On my right, whom you know well, Dr. John Jennings, Associate Commissioner of the Food and Di~ug Administration. Dr. Mark Novitch, who is the Deputy Associate (10483) PAGENO="0570" 10484 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Commissioner for Medical Affairs of FDA On my left, at the far end, is Mr Vince Gardner, the Chief of the Drug Studies Branch of the Secial Security Administration Next to him is Mr Frank Samuel, Deputy Assistant Secretary for Legislation And on my immediate left is Dr. Keith Wiekel, the Associate Administrator for Planning, Evaluation and Legislation of the Health Services Administration. Senator NELSON. Go ahead, Doctor. Present your statement how- ever you desire. Dr EDWARDS Thank you, Mr Chairman We are delighted to have the opportunity to discuss with you this morning the issue of our drug quality assurance programs and the effect these may have on Federal procurement policy We are also pleased to have this opportunity to update the Congress on the implementation of the revised drug reimbursement policy that was announced by Secre tary Weinberger in December Your most recent investigation of the first of these issues began February 20 when Dr. Alexander Schmidt of the Food and Drug Administration outlined the quality control and other regulatory activities of the Department of Health, Education, and Welfare which serve to guarantee the safety and efficacy of pharmaceutical products sold throughout the United States These include many different programs-inspection of drug manufacturers, monitoi rng of marketed drugs, batch certification, adverse reaction reporting, to mention oftly a few I will not add further to that testimony ex cept to restate our belief that these activities have served and con tinue to serve the quality control needs of all drug purchasers in this country As you know, Mr. Chairman, the GAO report of December 1973 recommended that separate quality assurance activities of the De fense Department, Veterans Administration and the Food and Drug Administration be consolidated into one organization We believe this is an excellent recommendation and that the FDA is the ap propriate and the obvious organization to carry this out The FDA has already begun discussions with representatives of the Defense Department and the Veterans Administration These discussions will continue, and we expect that positive actions can be taken in the very near future. Senator NELSON. This will involve all the agencies of Federal Government that procure drugs? Dr EDWARDS Yes, sir Senator NELSON Mainly DOD and VA ~ Dr EDWARDS Primarily VA and DOD Sen'ttor NFLSON If I recall the testimony correctly, the other day Dr Lee of the VA said that they do rely or intend to rely or will be re1vrn~ I believe, exclusively upon FDA Is that correct g Dr. EDWARDS. That is correct. We have more and more taken over this function for the VA and I think for all practical purposes i.t is fairly complete at this point in time. Senator NFT SON Do you have any target date on reaching this arrangement with the DOD ~ PAGENO="0571" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10485 Dr. EDWARDS. I am not just sure. Dr. Jennings, do you have any- Dr. JENNINGS. I don't think any specific target date has been established as yet, Senator. We are in the exploratory phase at the present time. I think if this comes to pass, it will probably be a gradual acquisition of these responsibilities. Senator NELSON. Well, as I recall it, the FDA has something over 800 inspectors now in the field, is that correct? Dr. EDWARDS. Yes, sir. Senator NELSON. And DOD has about 20? Dr. EDWARDS. I think it is between 20 and 30. Senator NELSON. Would that mean that ultimately those 20 would be assigned to FDA or- Dr. EDWARDS. I think that is one of the issues that we are cur- rently debating with the Department of Defense. In assuming these responsibilities we would obviously like to have the resources that they have been utilizing move over to the FDA and `become part of the Food and Drug Administration's operation. I think this can be worked out but some of the details have not yet been. I would cer- tainly hope, Mr. Chairman, that this isn't something that is pro- longed over an extended period of time but rather that we can get this accomplished literally within the next couple of months. Senator NELSON. Is my memory correct? Are additional inspectors for FDA recommended in the current budget? Dr. EDWARDS. In the 1975 budget? Senator NELSON. Yes. Dr. EDWARDS. There are some. I can't give you right offhand the exact number. But the FDA budget has gone up in the order of magnitude of $200 million with some additional provisions. Senator NELSON. You are familiar, of course, with the continual argument that there are inadequate inspections in order to assure the physicians that in fact the drugs being put into the market do meet tSP and NF standards. I don't know the merit of that. As I recall, your testimony of a short time ago was that you have a pro- gram which guarantees now that you will at least get around to every plant at least once every two and a half years. How many more inspectors would you need to have an optimum assurance that good manufacturing practices are being met by those who put drugs in the marketplace? Dr. EDWARDS. Mr. Chairman, I think it is not just a matter of inspectors. I think the drug listing law, because we didn't always have the kind of information we needed, is going to help a great deal. I am not sure we can give you the exact number of new posi- tions we need. Dr. Jennings, you might want to speak to that. Dr. JENNINGS. No, sir. I don't think we can state at this time how many new positions it would require to give assurance that we would cover every drug firm every 2 years in the way that we would like to. Now, inspection means different things to different people. We have all levels of inspections. We inspect a plant when, for instance, PAGENO="0572" 10486 COMPETITIVE PROBLEMS IN THE Z~RUG INDUSTRY a New Drug Application is filed and is close to approval. We in- spect the plant specifically for its capability to produce that drug. Senator NELSON. You inspect the plants before they in fact pro- duce that drug or before it is put into the marketplace, right? Dr. JENNINGS. Yes, sir. Senator NELSON. As to their capacity to produce that drug and meet USP standards? Dr. JENNINGS. TJSP or NDA standards, whichever is in existence for that particular drug. Of course, in the course of such an in- spection there will be a general appraisal of the plant's capabihhes to produce other drugs. So, I think to say that we are aiming for only a visit, a housekeeping type of inspection of every plant every two years, is an oversimplification of the problem. There are differ- ent levels of inspection that are required for different purposes. I think we certainly could use more inspectors because as you are fully aware, the problems of drug quality control seem to become more complicated as time goes on. The more we know about drugs and possibilities for things going awry, the more complicated and the more intensive our inspection efforts must be. But I think the thing to remember is Dr. Schmid't testimony of a few weeks ago that as of now the prescription drug production inspection is essen- tially up to date. That is, something like 97 percent of the plants producing 95 percent of the prescription drugs in this country are currently in inspection. Senator NELSON. I realize some plants you inspect very frequently, others not. Is it your view that once every 2 years or so is a fair assurance that a plant is in compliance or continues to be in com- pliance with good manufacturing practices? Dr. JENNINGS. I would think that as a minimum a general inspec- tion for the general capabilities of manufacturing every 2 years would provide adequate assurance, but I think, estimating manpower requirements, we would have to remember that there would be need for interim inspections. Senator NELSON. There would be what? Dr. JENNINGS. There would be a requirement for inspections between those biennial visits for special requirements, either because a new drug was to be produced and the capabilities for that particu- lar production would have to be assessed, or because there was some indication that there might be a problem because of a complaint, because our surveillance activities had uncovered a defect. So that it isn't simply a matter of a rotation or inspections every 2 years. There is a need for capability for special, and sometimes very ex- haustive, inspections in addition to the routine every-2-year visit. Senator NELSON. Please go ahead. Dr. EDWARDS. Just in conclusion on this particular issue, Mr. Chairman, we feel very strongly and Dr. Schmidt and the FDA certainly have the Secretary's and my support in their effort to move ahead rapidly on this pulling the inspectional capabilities of the Federal Government together. As you know, the Department has also recently submitted to Con- gress a legislative proposal-the Food, Drug and Cosmetic Amend- PAGENO="0573" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10487 ments of 1974-to significantly assist the FDA in carrying out its vital mission These amendments for the first time would provide FDA with subpoena authority, full factory inspection authority for all drugs and other pioducts subject to their jurisdiction, and broad authority to require pertinent records to be maintained and records to be submitted to the agency These authorities and others contained in the bill will assist FDA in obtaining the information they need to fully and we believe effectively administer the Federal Food, Drug and Cosmetic Act. We would certainly urge Congress to act on these amendments as quickly as possible and believe they will serve not only to assure a higher level of equality for all drugs but also the other products-foods, cosmetics and medical devices-which FDA. has the responsibility for Senator NELSON Doctor, when you say the Department has re- cently submitted to Congress the legislative proposal, is it in bill form and has it been introduced ~ Mr SAMUEL Yes, it has I would be happy to give you the bill numbers Senator NELSON I introduced a bill a year ago last February, S. 960, that does the same thing. Are you familiar with that? Mr. SAMUEL. No, sir, I am not. Dr. EDWARDS. I am, yes.. Senator NELSON You may be able to save yourself a lot of time by just endorsing my bill Mr SAMUEL Or perhaps you can endorse ours Dr EDWARDS It certainly is a possibility Senator NELSON Well, look at it a little more carefully and see- Dr. EDWARDS. We will. Senator NELSON (continuing) If it might turn into a new classi- fication of a probability. Dr EDWARDS I think that certainly you and I are in agreement as to what we would like to have Senator NELSON I haven't read the bill recently, but as I recall we cover in 5 960 every aiea you mention in your remarks and some more, too Dr EDWARDS As a matter of fact, you go a little further than we do in several areas I haven't compared the two bills recently but I have in the past I think you have gone a little further than we propose to go. Senator NELSON. Then you could just endorse those parts you agree with Dr EDWARDS I think that again is a possibility Senator NELSON Please proceed Dr EDWARDS Mr Chairman, I would like to now turn to-to discuss the issues of our Federal drug procurement policy As you know, and I mentioned earlier, in December 1973, Secretary Wein- bei ger announced a policy to limit drug reimbursement under pro grams administered by the Department to the lowest cost at which the drug is generally available unless there is a demonstrated differ ence in therapeutic effect We believe this policy could possibly result PAGENO="0574" 10488 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY in savings of 5 to 8 percent in the overall HEW reimbursements for prescription drugs and in addition have a beneficial impact on drug pricing throughout the country I would like to take this oppor tunity to cex tainly reaffirm the Department's commitment to this policy and assure this committee that regulations to implement this policy are being developed. Senator NELSON. I guess~t1ds question would fit )ust about any place. As to that policy, I have: a list of drugs here. One drug is Polycillin, which has the generic or official name of ampicillin. Now, Polycillin wholesales, 100 capsules, 250 milligrams, at $14.85 under the brand name price. Under the generic price, wholesale, ampicillin is $4.70. I have a whole list here. Ampicillin again, under the trade name of Penbriten, 100 capsules, 250 milligrams, $14 54, ampicillin, generic price, $4.70. Here is Pentids 400, 100 tablets, $10.04. Under the generic name of penicillin G, $1.45, wholesale. Will it be your policy, then, that you will reimburse at the ampicillin generic price, at the penicillin G, generic price, and that price only? Dr. EDWARDS. Well, I think that is exactly what we are trying to come to grips with right now. We obviously are not going to pay the excessive pricc or the high price There are a number of issues that have to be taken into consideration when one is con sidering the lowest price and whether or not, first of all, the drug is generally available We are trying to establish in what range we should establish this lowest price generally Senator NELSON. But you would agree that ampicillin is gener- ally available, right? Dr. EDWARDS. That is right. Senator NELSON. And penicillin G? Dr EDWARDS Penicillin G, both would be generally available, that is right. Senator NELSON Let us take the antihistamine chlorphemramine Under the trade name of Chior Trimeton, a thousand tables, 4 milli grams, the price is $21 65 Under its generic name it is available at $1.05. Dr EDWARDS There is no question that it is generally available but not necessarily generally available at the lowest price In other words, manufactured at the lowest cost doesn't necessarily mean it would always be generally available. In other words, we have got to be certain that when we develop a price on a drug that is truly available at that price in interstate commerce and you can buy that drug for the same price in Washington as you could in Los An ~eles It is conceivable that a small manufacturer in the State of California could sell the drug at a price that was lower than it could be found any place else in the country and that would not be at the lowest price generally available Senator NELSON Well- Dr. EDWARDS. What I am saying, we have got to be certain that we come down at a level that truly is representative-that is one which would be available throughout the country And I don't think PAGENO="0575" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10489 this is going to be a problem, but we have been playing with a number of different formulations that would allow us to do this. Senator NELSON. Well, Chiorpheniramine, maleate is 21 times higher under the brand name than it is under the generic name. When you say available in interstate commerce, do you mean avail- able in every State and every community when you use the phrase generally available? What do you mean precisely? Dr. EDWARDS. Well, I think it would have to be generally avail- able at that price throughout the United States. Dr. WIEKEL. Our position is that it should be available at that price or lower, whatever we set. In determining what the maximum reimbursement level should be, we don't believe we can establish that maximum reimbursable level at a price which some pharmacies in the country will not be able to purchase it at. We think that presents an inequity and that it is possible unless we factor in the criteria of availability on a national basis, and unless we factor in the ability of the firms to supply the products on a national basis, that some pharmacies would not be able to purchase it at the lowest published price. Senator NELSON. Well, I don't think the law is strictly honored by all the companies but isn't it correct that the law requires that a company must sell a drug at the same price to all the pharmacies, all the druggists, excepting for legitimate quantity discounts? Dr. EDWARDS. Yes, certainly. According to the Robinson-Patman Act which you are referring to that is the case. We are saying that in a given situation some manufacturers may not in fact have national distribution, even though their price is published in the Red Book or Blue Book or some other reference. We don't think, therefore, we can simply take the lowest possible price which is published. We have to add some additional criteria of availability on a national basis to insure that all pharmacies can purchase it at that level. Senator NELSON. Well, suppose it is regionally available? Dr. EDWARDS. Well, Senator, we have looked at this in terms of some of the medicaid programs where they have a criteria of re- regional availability. In those States they still end up in the major- ity of cases using the price levels of national manufacturers that have positive national distribution. I think that the use of nation- ally available prices will still allow us to take advantage of the cost savings that can be acrued through this policy. ~ guess one additional point on that. We have analyzed the additional cost savings, for example, in the multiple source prod- ucts. If we were to use a median price of the generic the differen- tial between that and the lowest possible published price would only acrue an additional savings to the Federal Government in the neighborhood of 10 percent. That is because of the base which is provided by the dispensing fee, that you have an average of a $1.8ö dispensing fee plus the cost of the product. -~ Senator NELSON. Does the Department of HEW have a policy on dispensing fees? PAGENO="0576" 10490 COMPETITIVE PROBLEMS IN THE DRUG INDUSTR'~ Dr. EDWARDS. Well, in fact, under the medicaid program the policy is that we will allow the States to use either usual and cus- tomary or a professional and dispensing fee. Senator NELSON. Usual and customary markup? Dr. EDWARDS. Right, at the retail level, or the dispensing fee. Thirty-five of the States which have drug programs in the medicaid program use dispensing fees. Senator NELSON. You mean 35 percent required dispensing? Dr. EDWARDS. 35 of the States, of the medicaid States, have the cost of the product plus a dispensing fee. Senator NELSON. And those States will not permit the use of the ordinary markup? Dr. EDWARDS. That is correct. One other point that I would want to make, Mr. Chairman, our policy doesn't mean that a supplier has to have national distribu- tion to provide his product, but the price that we go with has to be a price that is available nationally. A local supplier certainly can supply a drug but he has to supply it at a price that is a na- tional price, not a regional price. If we don't go that way, the prob- lem, of course, becomes very evident that we are going to have to get into the establishment of prices regionally and all of the ad- ministrative and bureaucratic things that have to go with the estab- lishment. We just feel it is a much more efficient way to try to do it on a national basis. Senator BEALL. Doctor, on that point when you say the regional supplier must supply it at a nationally available price, you don't mean to say he must raise his price. Dr. EDWARDS. No, no; not at all. He can certainly have it lower than that price. Senator NELSON. I discussed this with a generic manufacturer the other day who supplies drugs to a well-known brand name company. His own company also sells the same drug generically for one-fifth or one-sixth. He has a hard time getting the doctors to prescribe it. So then he photographs the two, assures them that they are made by the same process, same plant, same day. He says doctors still won't prescribe it. So, now he is inclined to put a trade name on it and raise the price up to where the brand names are because even though he is manufacturing both of them, one at one-fifth the price of the oth'~r. they won't buy the less expensive version. Dr. EDWARDS. I have heard situations similar to that. One of the proposals of the Pharmaceutical Manufacturers Asso- ciation is that they provide doctors with more up to date drug price information. Of course, we are very hopeful that they will pursue this rather vigorously. Continuing, we mentioned some of the rather numerous and rather complex issues that are involved in the establishing of such a policy. In fairness to all those affected by these new policies, these issues we believe must be addressed prior to the publication of our pro- posed regulations. At this juncture, however, I think we can say that we believe none of these issues warrant any further delay. PAGENO="0577" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10491 I do, however, believe that the committee could benefit from a discussion of these issues and what we have done with respect to the legitimate concerns which have been raised by interested parties. We must insure that this policy will in no way adversely affect the quality of drugs. As you know, the Department's firm position in this regard is that in terms of quality and therapeutic equivalence, with few exceptions, no `significant differences between chemically equivalent drugs have been shown. We, therefore, do not believe that allegations of inequivalency can or should stand in the way of this drug reimbursement policy. We do, however, have some con- cern that particular manufacturers, be they large or small-and they can be either-may not be constantly producing high quality drugs. We, therefore, believe that the regulations should provide a mechanism to assure that all drugs covered by the policy meet compendial and other quality standards. The regulations will con- tain such provisions. Second, we must insure that this policy in no way restricts the availability of needed drugs to a recipient. As we have just men- tioned and as the Secretary pointed out, we want to peg the reim- bursement level to the lowest cost for which the drug is "generally available." It has never been this Department's position that the reimbursement level should be established at the absolutely lowest cost drug. The regulations must insure that at the established reim- bursement level a continuing supply of the drug will be available to all pharmacies. Third, we must determine whether or not we are going to estab- lish a maximum reimbursement level for all available drugs. Clearly, such an exercise would be futile if there is only one source of that drug. Additionaly, we do not believe it to be administratively ad- visable or practical to establish a reimbursement level for all multi- source drugs, especially those that are not frequently prescribed. Therefore, at this time, the regulations will be targeted to the top 200 drugs; that is, those 200 prescription drugs most often pre- scribed. We believe this makes good sense, will ease the administra- tive burden, and will produce the savings that the Secretary indi- cated would result. At a later time we would hope to perhaps ex- tend this policy to other drugs. The fourth issue that I would like to address briefly today con- cerns the source which should be used to determine the prices at which drugs are available. As you know, many of the publications which list prices are not exact and do not include promotional dis counts and other marketing devices such as bulk sales. One alterna- tive we are considering is requesting accurate price information from the manufacturers. If such information is not forthcoming, we will simply use the best and most reliable sources we can obtain. Fifth, the procedures and criteria to be used in developing the reimbursement levels will also be set out in the regulations. The exact mechanisms to be used remain to be designed. We have, how- ever, tentatively decided to spell out the criteria, including, among other factors, availability of the drug, disparity of prices among 32-814 (Ft. 24) 0 - 74 - 37 PAGENO="0578" 10492 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY equivalent products, demand for the product, and ability of the manufacturer to produce quality drugs. Sixth, it should be recognized that the price of a prescription at the retail level is composed of two parts: cost of the drug and the cost of the overhead and profit of the drug dispenser. Both parts account for approximately equal portions of the final price of the prescription to the consumer Maximum cost savings can only be `tchieved by controlling both elements I herefore, the regulation will have to address ways to deal with both of these problems Seventh, in discussing the implementation of the Maximum Al lowable Cost (MAC) policy, apprehension has been expressed with regard to the possibility that, in the event that the physician, foi valid medical reasons, insists that a drug be used which is priced above the MAC level, his patient receiving services under the medi- care or medicaid programs would have to pay the difference be- tween the MAC price and the cost of the drug he prescribed In this regard it should be noted that Title XIX, Section 1902 (a) (14) of the Social Security Act stipulates that individuals receiving bene fits under the medicaid programs cannot now be required to pay additional costs resulting from, in this instance, the use of drugs costing more than the MAC price. In view of the legal prohibitions against passing the cost to the patient, we believe that, in those instances where an exception is requested for medically valid rea- sons, the program should pay the added cost. We believe it would also be appropriate for the medicare program to pay these added costs for its beneficiaries. Senator NELSON How do you determine whether it is for a valid i eason ~ How do you handle a matter like this Somebody prescribes Darvon as an analgesic, although aspirin is more effective and much cheaper Will the doctors have to tell you that the reason is the patient is allergic to aspirin or some special medical reason ~ How do you handle that? Dr. EDWARDS. As I will note later in my statement, the physician would be required to state on an appropriate form why the patient needs a specific brand of product and this form would `iccompanv the pi escription and it would be retrospectively reviewed Senator NELSON Please proceed Dr FDWARDS As I said, the physician would be required to shte on an appropriate form why the patient needs a specific branded pi oduct This form would accompany the prescription The pharm'i cist would file one copy with the prescription and the other would be submitted with his request for payment to the Federal prgram These would be reviewed retrospectively and enforcement would be by utilization review committees or PSROs. In those instances where no medical justification has been presented, these programs will not pay the additional cost. Senator NELSON Wouldn't that present a complicated paperwork problem? Dr EDWARDS I don't know Mr Chairman I think this is one of those things we are going to have to try I think iust the fact that they have to fill out a form will probably eliminate most doctors PAGENO="0579" COMPETITIVE PROBLEMS iN THE DRUG INDUSTRY 10493 requesting special brands of a particular drug If it doesn't, then we might have to go to a prospective rather than a retrospective review of the claim or the request. But I would hope we could avoid that because if we had to set up a prospective kind of review, I think that is the kind of review that would require a fairly sizeable staff and organization We also plan that those exemptions to Maximum Allowable Cost will be defined very narrowly We do not expect many physicians will find it necessary to specify that their patient can only tolerate a specific brand. If the exemptions are abused we will, of course, appropriately, as I mentioned, alter the policy. Other issues involving package size, dosages and a host of other problems have to be taken on. The Department has been working diligently to determine the most equitable way to devise these regu lations and to anticipate all relevant issues I hope from this dis cussion of these very complex issues that it will be fully realized that this policy is a tremendous undertaking on the part of the Department which has required the expenditure of considerable effort It is a challenge that we have welcomed and one that we are hopeful we are meeting rather rapidly. We are now at the stage in the preparation of the regulations when we can begin to consult with various interested groups re garding the issues we have discussed today We feel this is only fitting when one considers the impact that these regulations will have Again, I would like to emphasize that by undertaking such consultation we are not in any way attempting to further delity the regulations We believe it will be useful and productive to pro vide the many interested groups with an opportunity to informally comment on our proposal as now developed We believe this cort sultation can be conducted within a period of 2 to 3 weeks and, furthermore, we believe that the regulations can then be issued shortly thereafter. Mr. Chairman, this concludes the formal parts of our presentation and we would be delighted to attempt to answer any questions that you have Senator NELSON I have a couple of miscellaneous issues that have been raised in recent hearings Dr Schmidt testified on the bio availability question when he was here a short time ago The industry itself keeps raising the question about the terrible problem of bioavailability, potential and real, and so forth Just what do you think about the issue of bioavailabthty that continues to be raised respecting assurance of comparability of drugs ~ Dr. EDWARDS. Mr. Chairman, I have said from the very beginning that I thought that bioavailabihty or equivalency as it relates to our pricing policy has no relevance I think that it is being used more or less as a smoke screen by those who prefer not to have a pricing policy I am not for a moment suggesting that bioavail- ability doesn't represent a potential problem, but, nevertheless, in reviewing the records of the Food and Drug Administration, I think th~i nuil-iber of major bioequivalency or bioavailabihty problems has been small. It certainly is an issue to which the FDA is going to PAGENO="0580" 10494 COMPETITIVE PROBLEMS IN ~1'HE DRUG INDUSTRY have to be constantly alert but it has nothing to do per Se, in my judgment, with the development of a pricing policy. Senator NELSON. How many drugs have involved a bioavailability problem of consequence? Dr. EDWARDS. If you don't mind, I would like to have Dr. Jennings address himself to that. Dr. JENNINGS. I am not sure I can give you an exact figure, Mr. Chairman. I would say the number is within the range of a dozen -that is, where a problem has been identified under the rather strict criteria that we use to define generic inequivalence-that is, the same drug, the same dosage form, the same potency, and pur- ported to have the same effect. I think the problem of bioavailability is like any other problem of quality control. It requires on the part of the industry and the regulatory agency constant vigilance. We are apt to find different product effects from time to time and this is the whole reason for our system of surveillance and inspections and sample analysis. Over the past several years I think we have become more sophis- ticated with respect to questions that relate to bioavailabihty and generic equivalence, the problems of dissolution and absorption, crystalization, and all that sort of thing. There have been problems. There was a problem with chioram- phenicol a couple of years ago that you are very familiar with, a problem which was resolved successfully. The smaller manufac- turers, as you recall, after having the deficiency brought to their attention, by making a few changes in formula, were able to produce a product that was comparable to the originally approved product. We more recently had a problem with digoxin and I think this one illustrates the growing sophistication on the part of the industry and the agency. Here the problem seemed to be related to the dis- solution rate and there is good correlation between the dissolution time of the tablet and the amount of the drug that became bio- logically available. As a re,sult of this finding1 the TJSP has added a dissolution rate to their specifications and I feel this is the proper approach to the question of bioava.ilability-that is. one of quality control, including new and more sophisticated specifications as we become more and more familiar with the various aspects that con- tribute to problems of bioavailability. Senator NELsoN. Well, the record will speak for itself, but if I recall the testimony of the FDA on this issue, its position is that with respect to drugs which are composed of the same compound, in the same dosage form, meeting tTSP standards, the question of bioavailability is-these are my words-relatively insignificant in the whole drug picture. Would you agree or disagree with that? Dr. JENNINGS. Yes, sir, that is our opinion. Senator NELSON. Let me turn to another issue. Yesterday I raised it with the. Veterans Administration, though it is more properly within HEW. That was the question of the drug Aldomet. That is the drug alpha-methyl DOPA, an antihypertensive. PAGENO="0581" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10495 Now, that drug was synthesized in 1953 by Merck and they found no useful medical purpose for it. Then NHI, specifically the Na- tional Heart Institute, started experimentation with it and dis- covered through careful scientific trials of their own that it was a very useful antihypertensive. It is pretty clear from the testimony in 1965 and 1966 before Senate and House Appropriations Committees that it was Nfl, National Heart Institute, and their experiments that discovered a use for the drug that was very valuable. Sales for this drug amounted to $33 million in 1970, up to $42 million in 1971. I don't know where it is now, but it certainly is one of the largest selling drugs in the country. The company has until now refused to give a price break to VA sufficient enough to make it economically justifiable for them to purchase and centrally store it, which is an interesting commentary on the industry's attitude towards the Government that gave them a profitable market for the drug in the first place, by discovering a use for it. If you have a philosophical comment you would like to make on that issue, I would like to hear it. My second question would be, why in heaven's name does the Federal Government, in this case the Nfl, expend taxpayers' money and create a use for a drug with sales 3 years ago of $42 million, and be so neglectful as not to take out a use patent? What is the policy of our Government in protect- ing the taxpayer? Here they are being outrageously gouged by a company who got a profitable product through the taxpayers' ef- forts and through the efforts of the greatest research institute of its kind in the world which then turned around and gave the results of these efforts to Merck so they could gouge the taxpayer. This seems to me just an outrageous business and what are you gentlemen doing about that? Dr. EDWARDS. First, let me say I don't know that that really is the fault of the Nfl. I suspect it is the fault of the Department generally and I must say I don't know anything that-I am not aware of this particular situation. I know we have had some very recent discussions on the whole subject of patents but as yet no definitive policy, at least that I am aware of, has been promulgated. Senator NELSON. Well, it seems to me that the taxpayers' interest in this should be protected. Dr. EDWARDS. I think your point is a very good one and I think that we should adopt a specific policy on this particular kind of issue. Senator NELSON. This has occurred time after time, as you are aware, in all kinds of research and development of products by the Department of Agriculture, HEW, and any number of depart- ments, and then suddenly the work of that department becomes the private preserve of one firm in the private sector with the public's interest not being protected at all. Well, let me say this. We intend to have hearings on this specific issue, not only on this drug but the broad issue, because it is un- PAGENO="0582" 10496 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY fathomable to me how the Government can go ahead and do all this work and not at the very least get a use patent that protects the Government in purchases in behall of its own people So I don't expect you to comment on the current status of what the Govern ment's position is, if any, but we will have hearings on it We would hope that you would be prepared to explain what the policy is, if you have one, and whether there is an intention to change it. Dr. EDWARDS. We certainly will. Dr NOVITOR The general policy, the patent policy of the Depart- ment as I last understood it, was that only limited patent rights are granted to a manufacturer for a product that was developed with substantial Government support Whether this drug was patented prior to any Government work on it would have a definite bearing on why they have an exclusive patent But if it had been patented after Government contributions as I last understood the policy-I I am not familiar with it today-they would only have a limited patent. Dr. EDWARDS. The specific product you are talking about as I understand it was actually produced by Merck Company and that the Nh did a lot of the clinical work involved. So that there is a little different light on it I don't think our policy would apply at all in this particular case Senator NELSON As I previously stated, Merck had synthesized the compound and secured a patent on it According to testimony by Nh before the House and Senate Appropriations Committees the National Heart Institute experimented with it and discovered the use for it as an antihypertensive-not the company. The De- partment of HEW could have secured a use patent to protect the interests of the public and to prevent a private company from goug- ing the public with monopoly prices that would have been prevented if the Government had retained the patent. Dr EDWARDS You well could be right Senator NELSON It seems to me that at the very least there ought to have been some protection for the Government itself But we shall raise this question at a later date Dr EDWARDS I think it would be certainly a worthwhile subject to talk about. Senator NELSON. Well, thank you very much, gentlemen, for your presentation We appreciate your taking the time to come before us (Whereupon, at 11 a.m., the committee recessed, subject to call of the Chair.) PAGENO="0583" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10497 APPENDIX EXHIBITS PROVIDED BY THE UNITED STATES GENERAL ACCOUNTING OFFICE 1J~UTh~ STAT~~ GFNERAL ACCOUNTING OFFICE W'~shiì~ n D C 20548 For release on delivery expected at 10 a.m. EDT Wednesday~ February 20, 1974 STATEMENT OF ELMER B STAATS, COMPTROLLER GENERAL OF THE UNITED STATES BEFORE THE MONOPOLY SUBCOMMITTEE SELECT COMMITTEE ON SMALL BUSINESS UNITED STATES SENATE on DIRECT AND INDIRECT EXPENDITURES BY FEDERAL AGENCIES FOR PRESCRIPTION DRUGS We are pleased to be here today to discuss our work re- lated to procurement of and reimbursement for prescription drugs by the Federal Government and related matters Among the matters we will comment on are: - -The conclusions and recommendations contained in our recently issued report to the Congress entitled ttHow to Improve the Procurement and Supply of Drugs in the Federal Government" (B-l64031(2), dated December 6, 1973) - - Status of Federal efforts to promote the use of formularies and encourage the use, where appropriate, of lower priced drugs, including generics PAGENO="0584" 10498 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY - - Status of actions taken by Federal agencies to assure that only effective drugs are procured with Federal funds. It is estimated that direct Federal expenditures and reimbursements for prescription drugs amounted to about $1.6 billion in fiscal year 1973--an increase of more than $44 million over the expenditures in fiscal year 1972. This amount includes about $252 million in direct drug purchases by Federal agencies and reimbursements of over ~l.3 billion under federally-sponsored health programs, such as Medicare and Medicaid. Direct Procurements The estimated $252 million in direct drug procurements represents a slight decrease from those in fiscal year 1972. Most of the direct procurements were made by the Defense Supply Agency (DSA) and the Veterans Administration (VA). DSA's expenditures for its depot stocks amounted to about $91.4 million while VA spent about $38.1 million for its depot stocks. VA also administers Federal Supply Sche- dule contracts for drugs under which Federal agencies spent over $84 million. Purchases made by such agencies as the Public Health Service and the Agency for International De- velopment and local purchases made by individual Federal 2 PAGENO="0585" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10499 installations account for the remaining fiscal year 1973 expenditures for direct drug procurements. FederalEXpeflditJP~~4eL Federally- Su~~ted He h Pr Available statistical data and agency estimates in- dicate that about 84 percent of the total Federal expendi- tures for prescription drugs during fiscal year 1973 were indirect ii~ that they consisted principally of the Federal share of drug costs provided to beneficiaries of health programs supported by the Government. The Medicare and Medicaid programs administered by the Department of Health, Education, and Welfare (HEW) represent the major federally supported health programs. The Federal Employees Health Benefits Program (FEP) and the Civilian Health and Medical Program f~r the Uniformed Services (CHJ\}4PUS) are other large programs under which Federal expenditures for drugs are significant. Federal expenditures for drugs under the Medicare pro- gram during fiscal year 1973 were estimated to be about $674 million- -an increase of about $57 million over the program expenditures during fiscal year 1972. The Federal share of the cost of drugs provided during fiscal year 3 PAGENO="0586" 10500 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1973 to beneficiaries of the Medicaid program amounted to about $605 million -an increase of about $39 million over fiscal year 1972 Federal Medicaid drug costs Federal expenditures for drugs under the CHAMPUS prograth were esti- mated to have exceeded $31 million in fiscal year 1973-- an increase of over $5 million above fiscal year 1972 costs. Estimates of Federal expenditures for drugs under the PEP program for fiscal year 1973 were not available; however, expenditures for drugs under the program exceeded $40 million in fiscal year 1972. Pending legislation pertaining to Federal participation in health care activities suggest that Federal expenditures for drugs may increase in the future- - in some cases very substantially. For example, during the first session of the 93d Congress, numerous bills were introduced which dealt, in part, with drug purchases under the Medicare pro- gram. Most of these bills included provisions to extend Medicare to cover the costs of certain drugs to be dis pensed to eligible recipients on an outpatient basis, and N used to treat specified chronic illnesses. The Social Security Administration (SSA) estimates that such an ex- tension of Medicare coverage would cost about $1.1, billion a year. 4 PAGENO="0587" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10501 As you know, several legislative proposals concerning a national health insurance plan are currently under con- sideration by the Congress. The passage of a national health insurance plan would have a significant impact on Federal outlays for drugs. WAYS TO IMPROVE THE PROCUREMENT AND SUPPLY OF DRUGS IN THE FEDERAL GOVERNMENT In our December 1973 report to the Congress, we discussed the effectiveness of Federal agencies' administra- tion of programs and activities relating to the direct pro- curement and supply of drugs. This matter has been a subject of interest since at least 1963 when Federal agencies began studying the possibility of a single agency having Government-wide responsibility for managing pharmaceuticals, thereby eliminating unnecessary duplication between military and civil agencies. For example, in February 1971, the General Services Administration (GSA) and Department of Defense (DOD) agreed to assign medical material to DSA for integrated management, but the assignment was deferred pend- ing the outcome of a comprehensive study proposed by the Office of Management and Budget (0MB) in June 1971. This study which was made by representatives of 0MB, VA, DSA, GSA, and HEW was started in January 1972. 5 PAGENO="0588" 10502 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY As of December 1973, no final agreement had been reached as to whether a single manager for drugs would be estab- lished. Our report supports the need for coordinated action in procuring and supplying drugs. I will briefly summarize our conclusions and recommendations and suggest that the report be included in the hearing record. In summary, we concluded that: - - Significant savings and other advantages could result from greater cooperation and coordination between agencies in procuring drugs, such as consolidating requirements, making joint procurements, and reducing small-quantity local purchases by authori~zing use by any Federal agency of any centralized Government supply source. --Increased use of specifications for many drug products to encourage greater competition and central manage- ment of drugs should reduce costs. - -Better reporting of drugs bought locally and better use of related reports would improve selection of items for central management. --Responsibility for all quality assurance activities relative to Federal purchases of drugs should be assigned to a single agency- -the FDA. 6 PAGENO="0589" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10503 To improve the direct procurement and supply of drugs by Federal agencies, we recommended that: - -The 0MB lead in developing- -with representatives of GSA, DOD, VA, and HEW--policies and procedures, in- cluding consolidating requirements, to increase agency cooperation in buying drugs and achieve substantial savings through large-volume buys. Field installa- tions should be authorized to obtain their drug requirements from any centralized Government supply source. - - The VA should develop specifications for (1) all new drugs which VA decides to manage centrally, and (2) centrally-managed drugs for which it currently has no specifications. - -The Department of Defense should revise DOD policy to insure that drugs will be obtained centrally whenever savings would result. --The Department of Defense and the VA should consider jointly developing specifications which would satisfy all Federal agencies' requirements. --The Department of Defense should (1) develop, for reporting local drug purchases, a uniform reporting 7 PAGENO="0590" 10504 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY system aimed at requiring all military activities with individual drug purchases exceeding specified criteria to report their purchases, and (2) require centrally-managed drugs purchased from other than a central manager to be reported. --The VA should require that VA's Central Office Supply Service (1) prepare lists of summary and exception data from the information reported, (2) require local field stations to report their purchase data correctly and consistently, and (3) see that all vendors report detailed sales data when required by contracts. --The Department of Defense and the VA should consider using a standardized coding system, such as the National Drug Code, for identifying local purchases of drugs not having Federal stock numbers. - - The Departments of Defense and HEW and the VA should review the frequency and type of inspections required and the related changes needed to facilitate the transfer to FDA of all quality assurance responsibil- ities pertaining to purchases of drugs by Federal agencies. 8 PAGENO="0591" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10505 O?IB, in commenting on our final report by letter dated January 14, 1974, stated that the study group has completed its report and has made recommendations which are currently under review by the principal agencies involved. 0MB stated also that the findings and recommendations of the study closely parallel those set out in GAO's report. In its letter commenting on our final report, DOD stated that it subscribes in general to the goals and prin- ciples set forth in the report. DOD stated also that, although agencies' actions to improve Federal coordination regarding specific aspects of drug procurement and manage- ment have been limited to informal coordination between agencies pending evaluation of the 0MB report, advice as to positive actions concerning our recommendations would be furnished to us as they are implemented. Also, a clarifying DOD policy concerning adapting medical items for central procurement is expected to be released within 60 days. In its letter dated January 16, 1974, VA indicated general agreement with the thrust of our report and discussed the status of actions to implement the recommendations. For example, VA: - -has authorized its marketing centers and supply depots to accept orders from DOD field installations; 9 PAGENO="0592" 10506 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY - -will initiate a control system with DOD to assure that drug specifications are either developed jointly or coordinated; and - - is willing to rely on FDA to provide quality assurance for VA drug purchases, provided that FDA makes the necessary data available in a timely manner. HEW agreed with the rationale for consolidating all quality assurance responsibilities pertaining to purchases of drugs by the Federal agencies and stated that a single organization should inherently be more efficient and uni- formly equitable in administering a quality assurance program. HEW 9tated that, in view of the comments from other Departments on the draft report, it believes the immediate objective should be the development of a consolidated quality assurance program which satisfies the needs of all interested parties. The Food and Drug Administration is currently developing an initial concept for that consolidated program based on its assessment of quality assurance requirements. 10 PAGENO="0593" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10507 STATUS OF FEDERAL EFFORTS TO PROMOTE_THE USE OF FORMULARIES AND ENCOURAGE THE USE OF LOWER PRICED DRUGS We will now discuss briefly Federal efforts to reduce drug costs by promoting the use of formularies and encourag- ing, the use of lower priced drugs, including generics. Department of Defense Military medical regulations require that Pharmacy and Therapeutic (P~T) Committees be appointed by the commanders of U.S. military hospitals. Among the primary functions of P~T Committees are the development and periodic review and revision of the hospitals' drug formularies. In making deci- sions concerning the addition or continuation of formulary items, the P~T Committees consider the relative costs of therapeutic alternatives. In addition to the general use of formularies by the services, the Surgeons General and subordinate administrative levels issue monthly newsletters or special letters to health facilities highlighting comparative prices of drugs main- tained in central inventories and encouraging the use of less expensive drugs when they are considered to be therapeutically equivalent to more expensive items. Prescriptions written 11 32-814 (Pt. 24) 0 - 74 - 38 PAGENO="0594" 10508 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY by military physicians and filled in military hospitals for brand-name products may be filled with generic equivalent products except when the physicians specifically require that such substitutions not be made. Tinder CHAMPUS, a DOD-supported program for providing medi- cal care benefits from civilian sources to retired military personnel and military dependents, DOD has not established regulations requiring the use of formularies. Also, it has not encouraged the use of generic drug products for either the inpatient or outpatient portions of the CHAMPUS program. Veterans Administration VA requires that each of its medical facilities have a P~T Committee which develops and maintains a drug formulary. This formulary generally consists of monographs on those products selected by the P~T Committee for use in the f a- cility. Generally, prescriptions will not be filled for drug items not included in the formulary. However, exceptions may be made with special permission. These monographs include the nonproprietary names of the drug, therapeutic classification, dosage, and instructions regarding product usage. VA has also instructed its physicians that generic identification of pre- scribed medications is preferred to the use of brand names. 12 PAGENO="0595" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10509 Department of Health, Education, and Welfare The HEW agencies that provide direct patient care, such as the Indian Health and Federal Health Program Services of the Public Health Service, require that all field installa- tions be serviced by P~T Committees responsible for the development and maintenance of current formularies of ac cepted drugs The formularies are required to list drug items by their official, generic or nonproprietary names and only formulary drugs are authorized for routine use by HEW installations providing direct patient care. Among the items the P~T Committees are required to consider in developing their formularies are comparative efficacy of formulary drugs with other drugs intended for the same use, evaluation of benefit/risk of formulary drugs and cost effectiveness. Under Part A of the Medicare program, drugs are paid for b~ SSA- -through fiscal intermediaries- -as part of eligible recipients' total hospital bills Under Part B of the pro gram, Federal coverage for physicians and related services are provided through organizations known as "carriers Coverage of drugs under Part B is limited to those drugs which are commonly furnished in physicians' offices and which cannot normally be self administered 13 PAGENO="0596" 10510 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY The regulations for Medicare state that in order for a drug to be covered under Part A it must (1) represent a cost to the institution in rendering services to the beneficiary, and (2) either be included or approved for inclusion in speci- fied drug reference volumes or approved by a P~T Committee (or equivalent) for use in the participating hospital. Iii order to be covered under Part B, costs of eligible drugs- - like those of other medical services- -must be accepted by the carrier as reasonable and necessary. Under this system, SSA generally is not provided de- tailed information concerning the specific drugs that are being prescribed under Medicare. We were informed by an SSA official that there are currently no SSA regulations which encourage the use of generic drug products. Under the Medicaid program, which is administered by State agencies with Federal guidance and reimbursed, in part, by the Social and Rehabilitation Service (SRS), the use of formularies and generic products is optional. The applicable Federal policy states that "where either is employed, there must be standards for quality, safety, and effectiveness under the supervision of professional personnel." Although SRS discusses the use of a formulary system as a means of re- ducing overall drug costs, the use of formularies is not 14 PAGENO="0597" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10511 required. Presently 20 States use some type of formulary. SRS, in its Medical Assistance Manual, points out the argu- ments for and against the use of generic drugs but does not emphasize their use. Although States, generally accumulate data concerning the specific drugs being dispensed under the Medicaid program, the data is not normally provided to SRS. As you know, Secretary Weinberger recently announced that HEW will be publishing regulations for public comment which, if adopted, would limit drug reimbursements under pro- grams administered by the Department to the lowest cost at which the drug is generally available unless there is a demon- strated difference in therapeutic effect. The Secretary stated that this reimbursement policy will result in sig- nificant savings in the cost of providing prescription drugs under Medicare and Medicaid. The Secretary's announcement prompted the Chairman of the Senate Subcommittee on Health, Committee on Labor and Public.Welfare, to hold another hear- ing on February 1, 1974, to provide representatives of the Administration and the drug industry the opportunity to clarify their positions concerning this significant new HEW policy. To date, the proposed regulations referred to by the Secretary have not been published. 15 PAGENO="0598" 10512 ~OMP~TITIVI PROBLEMS IN THE DRUG INDUSTRY STATUS OF ACTIONS TAKEN BY FEDERAL AGENCIES TO ASSURE THAT ONLY EFFECTIVE DRUGS ARE PROCURED WITH FEDERAL FUNDS During our last appearance before this Subcommittee in May 1972, we commented on actions taken by DOD, HEW, and VA with respect to FDA's pronouncements regarding drug effi cacy As you are aware, FDA has categorized drugs as "effec tive," "probably effective," "possibly effective," and "in- effective" for one or more therapeutic indications claimed on the drug's labeling Legal action was brought against FDA in an effort to expedite FDA's completion of its determinations of drug effi cacy under its Drug Efficacy Study Implementation (DESI) In October 1972, the Federal District Court for the District of Columbia: ordered FDA to meet specific target dates for van ous phases of DESI and to submit 6 month status re- ports to the Court concerning its progress - - required FDA to make final determinations on drug efficacy or to rule on drug sponsors' request for hearings by October 1976 As of January 1974, FDA's initial ratings on all but one of the more than 4,000 drug products included in the study have 16 PAGENO="0599" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10513 been published in the Federal Register However, in accord ance with the procedures of DESI, FDA may and has revised its ratings for specific drugs as new information is sub- mitted by the drugs' sponsors We inquired into the status of Federal agency actions to insure that only effective drugs are purchased with Federal funds and noted that, in general, definitive actions taken have been limited to direct Federal health care pro- grams. Actions Taken by the Department of Defense We testified in May 1972, that as of November 18, 1971, the Defense Medical Materiel Board had initiated ac- tion to stop further procurement and to eliminate from the supply system all items that FDA had then pronounced "ineffec- tive" or "possibly effective " Also the Surgeons General of the military departments had emphasized through instuc tions to medical organizations the DOD policy on such drugs, which became effective January 21, 1971. This policy pro- vided that remaining stocks of "ineffective" drugs withdrawn from the market were to be destroyed or other appropriate action was to be taken to remove them from the inventory For items categorized "ineffective," but awaiting final determination FDA, further use of remaining stocks was 17 PAGENO="0600" 10514 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY suspended until the final status was announced by FDA. P~T Committees were required to question all prescriptions for "possibly effective" items, but local procurement of such items could be made if no alternative means of therapy was available. On June 11, 1973, the Office of the Assistant Secretary of Defense (Health and Environment) announced a revised policy which is a bit less stringent with respect to the use of "ineffective" and "possibly effective" drugs. Ac- cording to DOD, the original policy was revised because the completion schedule for the DESI had been substantially extended from that originally anticipated and because some of FDA's more recent drug classifications would be revised following only minor changes in labeling or formulation of certain widely-used items. The revised policy provides that procurement of items classified by FDA as "ineffective" and ordered withdrawn from the market continues to be prohibited. However, for items which FDA has classified as "ineffective" but has permitted to remain on the market pending final resolution of the items' classification, the policy permits the Defense Medical Materiel Board, in conjunction with the Surgeons General, to determine whether centrally-procured stocks are 18 PAGENO="0601" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10515 to be discontinued. Additionally, the policy authorizes the services to make similar decisions concerning locally- procured drugs in this category or to delegate their au- thority to local P~T Committees. The policy also authorizes the procurement of "possibly effective" drugs when no alternative means of therapy is available and final FDA determinations on their efficacy are expected to require a long period of time. However, both central `and local procurements of these items are to be minimized to take into account the possibility that they may be finally determined by FDA to be ineffective and ordered removed from the market. Shortly after June 1973, the military departments in- cluded the revised policy in their instructions for field installations together with up-to-date consolidated listings of FDA drug safety and effectiveness data for use by mili- tary medical personnel. Under CHAMPUS, DOD has placed no restrictions on the drugs that may be prescribed and is not supplied detailed data concerning the specific drugs that are being paid for. Therefore, DOD could be paying for drugs under CHAMPUS which could not be procured for its direct care activities. 19 PAGENO="0602" 10516 COMPETITIVE PROBLEMS IN THE DRuG INDUSTRY Actions Taken by the Veterans Administration Since December 1970, VA's policy has continued to be that all "ineffective" drugs must be removed from VA hospitals except where special approval of the Central Office Ex.ecutive Committee on Therapeutic Agents has been obtained Also, VA's policy concerning "possibly effective" drugs continues to require that consideration be given to using an alterna- tive product having a higher FDA effectiveness classification To strengthen the policy's implementation, the VA is furnishing a list of drugs ordered to be withdrawn from the market to the P~T Committees at each VA facility which buys or dispenses drugs Further, a current statement of VA pol icy on the use of drugs is now being developed by the Central Office Executive Committee on Therapeutic Agents for distribu- tion to all VA facilities. Actions Taken by the Department of Health Education and Welfare As we testified in May 1972, HEW's policy was that Fed eral funds shall not be spent for "ineffective" drugs except under approved clinical research projects, or for "possibly effective" drugs, except under similar projects or when al- ternative means of drug therapy are not available In Oc tober 1971, HEW agencies involved in direct patient care were instructed to stop procurement and use of such drugs and to 20 PAGENO="0603" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10517 advise their contract physicians of the Department's policy These instruc1~ions remain in effect Although the policy was intended for use in all of the Department's programs, it has not yet been implemented for the Medicare and Medicaid programs The Department, SSA, and SRS have each drafted proposed regulations to address this matter We understand that the drafts of the proposed regu- lations are under review in the Department and that notices of proposed rule making will be published for comments by in- terested parties in the near future. You may recall that we issued a letter to the Adminis trator, SRS, in May 1972 bringing the matter to his atten tion and asking him to advise us concerning SRS plans for implementing the Department's policy. In June 1972, the Ad- ministrator told us that a draft of a regulation implementing the Surgeon General's 1970 policy had been cleared in SRS and was being prepared for transmittal to the Office of the Secretary for publication as a proposed rule The regulation was not published. As part of our continuing review efforts concerning Medicaid activities, we have recently initiated a survey of the administration of the Medicaid drug program We have 21 PAGENO="0604" 10518 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY already noted that States were continuing to pay for "ineffective" and "possibly effective" drugs. For example, in one month- -September 1973- -three States paid an estimated $692,000 for such drugs. Also, we con- tacted officials of two additional States- -which were in- cluded in our 1972 review-- and were informed that these States had not changed their policy concerning payment for "ineffective" and "possibly effective" drugs and would not do so until SRS issues its final regulations concerning this matter. We have again brought this matter to the attention of HEW in a letter to the Secretary, dated February 15,1974. Mr. Chairman, this concludes my statement. We shall be happy to ahswer any questions that you or other members of the Subcommittee may have. 22 PAGENO="0605" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10521 COMPTROLLER GENERAL OF THE UNITED STATES WASHINGTON DC 2054S B-164031(2) To the Pre sident of the Senate and the Speaker of the House of Representatives This is our report on problems in obtaining and enforcing cornpliz.nce with good manufacturing practices for drugs, Food and Drug Administration, Department of Health, Education, and Welfare. Our review was made pursuant to the Budget and Accounting Act, 1921 (31 U.S.C. 53), and the Accounting and Auditing Act of 1950 (31 U.S.C. 67). Copies of this report are being sent to the Director Office of Management and Budget, and to the Secretary of Health, Education, and Welfare. Comptroller General of the United States PAGENO="0606" 10522 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY C o n t e n t s DIGEST 1 CHAPTER INTRODUCTION 7 2 LIMITED ENFORCEMENT OF COMPLIANCE WITH GOOD MANUFACTURING PRACTICES 11 Limited use of legal sanctions to enforce GMP compliance 12 Reasons for infrequent use of legal sanctions 17 Lack of adequate guidelines 17 Therapeutic insignificance of nonprescription drugs 19 Need for embargo authority 20 Slow judicial process 20 Recent steps toward more aggres- sive enforcement 20 Conclusion 21 Recommendation to the Secretary of Health, Education, and Welfare 21 3 NEED FOR MORE CORRECTIVE FOLLOWUP ACTIONS 23 Post inspection communication of findings 24 Followup inspections 25 Post inspection letters to drug producers eliminated by policy statement 27 Conclusion 29 Recommendation ~to the Secretary of Health, Education, and Welfare 29 4 SOME DRUG PRODUCERS NOT INSPECTED AS OFTEN AS REQUIRED 30 Firms subject to inspection 30 Types of firms not inspected and * prior deviations 32 Reasons given for not inspecting all drug producers 33 Conclusions 35 PAGENO="0607" COMPETITIVE PROBLEMS iN THE DRUG INDUSTRY 10523 CHAPTER Recommendations to the Secretary of Health, Education, and Welfare 35 5 NEED FOR IMPROVEMENT IN FDA'S REGISTRA- TION LISTING AND OFFICIAL ESTABLISHMENT INVENTORY 37 Registration listing 37 Official establishment inventory 39 Conclusions 40 Recommendations to the Secretary of Health, Education, and Welfare 41 APPENDIX I Letter dated January 8, 1973, from the Assistant Secretary, Comptroller, Depart- ment of Health, Education, and Welfare to the General Accounting Office 43 II Goodmanufacturing practice regulations-- drugs 47 III Enforcement alternatives available to the Food and Drug Administration 52 IV Principal officials of the Department of Health, Education, and Welfare respon- sible for the activities discussed in this.report 54 ABBREVIATIONS FDA Food and Drug Administration FD~C Act Food, Drug, and Cosmetic Act GAO General Accounting Office GMPs good manufacturing practices HEW Department of Health, Education, and. Welfare OEI official establishment inventory 32-814 (Pt. 24) 0 - 74 - 39 PAGENO="0608" 10524 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY COMPTROLLER GENERAL'S PROBLEMS IN OBTAINING AND REPORT TO THE CONGRESS ENFORCING COMPLIANCE WITH GOOD MANUFACTURING PRACTICES FOR DRUGS Food and Drug Administration Department of Health, Education, and Welfare B-l64031(2) DIGEST WHY THE REVIEW WAS MADE standards of identity, strength, quality, and purity, and (3) keeping Drugs sold in the United States distribution records of each batch during recent years have been of a drug to facilitate its recall produced by about 6,400 firms, from distribution, if necessary. Although each is accountable for the quality of its products, the In this review the General Congress placed upon the Food and Accounting Office (GAO) has evalu- Drug Administration (FDA) the re- ated FDA's progra's for inspecting sponsibility that drugs, shipped drug producers and enforcing corn- across State borders, be of satis- pliance with geod manufacturing factory quality when sold to practices. GAO reviewed the inspec- consumers. tion records of 73 drug producers inspected during the 2-year period The Federal Food, Drug, and ended March 31, 1971, and the in- Cosmetic Act (FD~C Act) makes FDA spection records of 98 drug responsible for insuring that adul- producers which were not inspected terated drugs are prevented from during this period. reaching the market. This law Except for five large drug - -defines an adulterated drug as producers, firms were randomly so- one, among other things, which lected for review. The drug pro- has not been produced in con- ducers were in three FDA districts formity with good manufacturing in which nearly 25 percent of the practices and Nation's 6,400 drug producers were located. --requires FDA to inspect drug manufacturers and repackers (re FINDiNGS_A~p,~,qJ..USION~ ferred to hereinafter as drug producers) at least once every *Ovaralijjr~,4~jz~a 2 years. Several factors have hindered FDA's Good manufacturing practices obtaining and insuring compliance include (1) maintaining formula and with good manufacturing practices batch-production control records by drug producers. and procedures, (2) establishing test procedures to insure that - - FDA has not always enforced drug components or the finished aggressively compliance with good product conform to appropriate manufacturing practices by many Te~rShit 1 MARCH 29~ 1973 PAGENO="0609" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10525 of the drug producers it has inspected, even though deviations from these practices can lead to adulterated products. - - Proper and timely written notification of needed correc- tions was not provided to drug producers' toll management;' and followup inspections were usually untimely, hampering, in many in- stances, FDA's efforts to obtain voluntary compl~ance with good manufacturing practices. - - Some drug producers have no.t been inspected:as often as required, although FDA considers its in- spections to be an integral part of its defense against adulterated products reaching the consumer - - FDA did not have a complete and accurate list of drug' producers required to.be registered and inspected. FDA has taken some steps to over- come these problems. More are needed. According to FDA, two factors have contributed to existing conditions: (1) its limited resources and (2) its need to be concerned with good manufacturing practices for drugs posing the most significant potential health Lazard Ljmitedenforoem!n~ FDA inspections have shown a large number of producers to be deviating from good manufacturing practices. Although such deviations can lead to adulterated thugs, FDA has not enforced compliance with good manu- Lacturing pratices by many of the drug producers it has inspected. During fiscal year 1971, FDA made 7,124 inspections of drug producers. Of these, nearly 4,000 were followup inspections where deviations from good manufacturing practices had been reported previously. Over half of the followup inspections, 2,174, showed that producers still were not complying with good manu- facturing practices. In reviewing inspection records of 73 drug producers, GAO found that 48 percent of the producers criti- cally deviated from good manufac- turing practices on successive inspections. FDA identifies criti- cal deviations as those having the greatest probability of creating adulterated products. (See p. 12.) FDA has taken relatively few legal actions to enforce compliance. During fiscal years 1970 and 1971, FDA approved only 51 seizures, 2 injunctions, and 5 prosecutions for deviations from good manufacturing practices. GAO believes that producers chronically deviating from good manufacturing practices do not have sufficient incentive to correct their practices because FDA has not used available legal options. For example, FDA inspected one firm's manufacturing practices three times during the 32-month period ended December 15, 1971, concluding each time that the firm was not complying with good manufacturing practices such as formula and production control records not being maintained. The number of deviations increased from 6 in the first inspection, to 23 in the second, to 49 in the third inspection. Although 78 deviations were found, of which PAGENO="0610" 39 were critical, legal action was reviewed 83 inspection cases not taken. Instead, FDA relied involving deviations from good primarily on oral and written corn- manufacturing practices for which munications with the firm and followup inspections were scheduled followup inspections to promote to be made during a specific month voluntary corrective actions, prior to December 31, 1971. GAO found that only 25 were made when The shortcomings in FDA's scheduled, 32 were made late, and enforcement are believed to stem 26 were not made by December 31, primarily from a lack of instruc- 1971. The timing of followup in- tions on when legal actions should spections is left to the discretion be taken and the resultant con- of each FDA district office. fusion between district office per- (See p. 26.) sonnel responsible for recommending legal actidn and FDA headquarters The February 1972 policy change personnel responsible for approving discontinued the use of post inspec- it. (See p. 19.) tion letters as a means of notifying drug producers of inspect ion find- A February 1972 policy change ings. Instead, warning letters will indicates FDA's intention to enforce be used for minor deviations. good manufacturing practices more Action to seize products or cite aggressively. GAO believes that the firms for prosecution will be used continuing lack of guidelines to the for critical deviations. Subsequent district offices will hamper the to the completion of GAO's field- effectiveness of this change. work FDA rbscinded its policy state- ment of February 1972 and issued a ~iZowup actions inadequate ` new policy statement. Some drug producers have not However, the policy change does not corrected deviations from good provide guidelines to insure that manufacturing practices because FDA drug producers' replies to warning frequently did not take proper letters or citations will be prop- followup actions to insure that erly monitored and that timely drug producers' top management was followup inspections will be made aware of inspection findings, when needed. GAO's examination of reports and Warning letters- -unlike post other records relating to 150 in- inspection letters and citations- spections of 58 producers included do not specify a time limit in in the sample showed that FDA issued which a drug producer must notify a post inspection letter to top FDA of corrective actions planned management in only 75 of 150 inspec- or taken. tions made and thet such letters were often untimely. (See p. 24.) ~n~Pcotionoov1gj FDA lacked guidelines for timely FDA lacks an effective means of scheduling of followup inspections Insuring that all drug producers to determine whether producers take are inspected at least once every needed corrective action. GAO 2 years as required by law. 10526 COMPETITIVE PROBLEMS IN THE DRTJG INDTJSTRY Tcar Sheet 3 PAGENO="0611" COMPETITIVE PROBLEMS In the three FDA districts reviewed, at least 213 drug producers, or about 16 percent, had not been in- spected during the 2-year period April 1969 through March 1971. Another 123 firms were listed as not inspected but records were not available to substantiate that the firms were in fact subject to in- spection. (See p. 30.) Records of 98 of the 213 firms not inspected showed that an average of 36 months had -elapsed (as of March 31, 1971) since 74 of these firms were last inspected. The re- maining 24 firms had registered for the first time during the 2-year period and were not required to have been inspected by March 31, 1971. The 24 firms had been registered an average of 9 months- - 7 for over 12 months. (See pp. 31 and 32.) FDA had not established guidelines on how soon firms should be in- spected after registration. Since newly registered firms are per- mitted to produce and distribute drug products for consumer use, FDA should consider making an earlier initial inspection of such firms. The failure to inspect some pro- ducers when required can be attrib- uted to weaknesses in the inspection scheduling process, the prior- ity given to reinspecting other producers with a history of deviat- ing from good management practices, diversion of manpower to crisis situations, and the lack of manpower. Although GAO found that noninspected firms generally were small producers of nonprescription drugs, the FD~C Act clearly requires that FDA IN THE DRUG INDUSTRY 10527 inspect all drug producers regard- less of size or product type. (See p. 32.) Ir&acour~te~dr~Jirm jiB ti?lflla FDA maintains two master firm list- ings for management and control pur- poses: the drug firm registrat~ion listing and the official establish- ment inventory. The purpose of the registration listing is to identify all drug producers subject to the 2-year in- spection requirement. The official establishment inventory is FDA's official record of all firms produc- ing products which fall into FDA's regulatory purview. The official establishment inventory is one tool headquarters uses to decide the annual allocation of each district's inspection manpower resources among various types of inspections. GAO found that these two listings for calendar year 1971 were inaccurate and FDA had neither moni- tored nor enforced annual registra- tion of drug producers as required by law. In GAO's opinion, the use- fulness of the listings has been significantly reduced as a basis for management decisionmaking and con- trol. (See p. 37.) RECOMMENDATIONS The Secretary of Health, Education, and Welfare (HEW) should direct the Commissioner, FDA, to: - -Establish more definitive guide- lines to be followed by FDA head- quarters and district offices, specifying (1) when products should be seized- -especially those posing a questionable health PAGENO="0612" 10528 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY rc~r Sheet 5 hazard, (2) the amount and type -Properly enforce the annual drug of documentation needed to ade- producers' registration require- quately support the seizure ac ment and effectively monitor the tion, and (3) when firms should be accuracy and completeness of the cited for prosecution registration listing to permit its use as a cross check on the offi Consider establishing a time limit cial establishment inventory for receipt of the written re listing sponse requested in warning letters AGENCY ACTIONS AND UNRESOLVED Correct the inventory of drug ISSUES producers sub)ect to the 2 year inspection requirement so that HEW concurred in GAO's recommenda- FDA will have complete and ac- tions and advised that a number of curate knowledge of the scope of corrective actions had been or would its inspection responsibilities be taken (See pp 22 29 35 36, and 41.) Establish an inspection sched uling system monitored by FDA headquarters to insure that all ~J4TJ'flRS FOR CONSIDERATIONS! drug producers are inspected at CONGRESS leastevery 2 years. This report provides the Congress --Establish guidelines to insure with information on FDA's drug firm timely initial inspection of newly inspection coverage and enforcement registered drug producers, of good manufacturing practices. PAGENO="0613" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10529 CHAPTER 1 INTRODUCT ION Protecting the consumer from unsafe and ineffective drugs is one of the primary responsibilities of the Food and Drug Administration (FDA). Drugs, one of mankind's most effective mea~is of preventing and treating diseases and other ailments, are produced by about 6,400 drug producers in the United States. Sales of drugs in 1970 amounted to about $12.5 billion. While each producer is responsible for the quality of its products, the Congress gave FDA the re- sponsibility for insu1ring that only drugs of satisfactory quality are sold to the consumer. FDA derives its authority to regulate drugs from the Federal Food, Drug, and Cosmetic Act (FD~C Act), as amended (21 U.S.C. 301). The FD~C Act defines drugs as articles intended for use in the diagnosis, cure, mitigation, treat- ment, or prevention of disease in man and articles (other than food) intended to affect the structure or any function of the body of man (for example, articles intended for weight reduction). The FD~C Act prohibits the shipment of adulterated drugs in interstate commerce and defines an adulterated drug as, among other things, one which has not been produced in conformity with good manufacturing practices (GMPs). FDA inspects drug producers to insure that drugs are produced in accordance with GMPs. Because FDA's ability to protect the consumer depends to a large extent on effec- tiveness of its efforts to inspect drug producers and en- force compliance with GMPs, we examined FDA's inspection and enforcement program in three FDA districts in which nearly 25 percent of the 6,400 drug producers were located. To keep adulterated drugs from reaching the consumer, the FD~C Act authorizes FDA to inspect drug producers. Each domestic drug producer must register annually with FDA and be inspected at least biennially. FDA's inspections are to determine whether sound methods, facilities, and controls are used in all phases of drug manufacture and distribution; FDA inspections include equipment, finished and unfinished materials, containers, manufacturing records, and laboratory controls. 7 PAGENO="0614" 10530 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY The 1962 drug amendments to the FD~C Act introduced the concept that drugs should be produced in accordance with GMPs. The drug industry and FDA jointly developed the GMPs after~a careful review of the methods followed in producing drugs. By following the jointly developed guidelines, it is presumed that the marketing of adulterated drugs will be minimized and that if marketed, they could be readily recalled. The Secretary of Health, Education, and Welfare (HEW) issued regulations (21 CFR 133) for determining whether drugs have been'manufactured, processed, packed, or held in ac- cordanse with GMPs. Some examples of GMPs are: - Prepare and maintain for at least 2 years a separate batch-production control record for each batch of drugs produced. The record should include an accurate reproduction of the appropriate formula and a descrip- * tion of each step inthe manufacturing, processing, packaging, labeling and controlling of the batch, including dates and specific identification of each * batch of components used. - ~Establish laboratory controls that include adequate specifications and test procedures to insure that components, drug preparations in the course *of proc- essing, and finished products conform to appropriate standards of identity, strength, quality, and purity. --Maintain, for at least 2 years, complete records of the distribution of each batch of drug in a manner that will facilitate its recall if necessary. The regulations also include GMPs covering such areas as buildings, equipment, personnel, components, production and control procedures, product containers, packaging and labeling, and complaint files. Appendix II contains more details on GMPs. To prevent adulterated drugs from reaching the consumer, FDA can initiate one or more of the following legal actions * through the Department of Justice. - -Prosecute an individual who violates provisions of of the FD~C Act. PAGENO="0615" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10531 - -Enjoin a producer or individual from violating the FDE,C Act and FDA regulations. - -Seize any drug product that is adulterated or mis- branded when introduced into, or while in, interstate commerce. Although recall is not provided for under the FD~C Act, FDA permits producers to voluntarily recall drugs that are alle~ged to violate the FD~C Act. During fiscal years 1970 and 1971, respectively, 889 and 1,421 voluntary recalls of drugs were instituted. FDA officials stated in an August 1968 inspection instruction that most recalls stem from deviations from GMPs. Appendix III contains comments on FDA's enforcement alternatives. A Commissioner, under the direction of the Assistant Secretary for Health, HEW, administers FDA. The drug firm inspection program, under the overall administration of FDA headquarters in Rockville, Maryland, is carried out by 19 district offices located throughout the United States and in Puerto Rico. FDA's appropriation for fiscal year 1972 was about $110 million. For fiscal year 1972 FDA devoted about $5 million, in- cluding 275 man-years, to the inspection of drug producers. We directed our review primarily at FDA's inspection program for drug producers to insure that quality drugs are produced and that actions are taken to have producers cor- rect deviations from current GMPs. We also tested the ac- curacy and reliability of data generated by FDA's nanagenent information system. We reviewed inspection records for 171 drug producers, of which all except 5 were randomly selected. We interviewed FDA officials and reviewed applicable legislative history and FDA's regulations, policies, and practices for inspecting drug producers and initiating cor- rective actions. We also reviewed FDA records and files for fiscal years 1969-71 pertaining to the inspection of firms and the sampling of drug products. 9 PAGENO="0616" 10532 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY We made our review at FDA headquarters in Rockville, Maryland, and at FDA district offices in Atlanta, Georgia; Detroit, Michigan; and Philadelphia, Pennsylvania. 10 PAGENO="0617" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10533 CHAPTER 2 LIMITED ENFORCEMENT OF COMPLIANCE WITH GOOD MANUFACTURING PRACTICES Although deviations from GMPs can lead to adulterated drugs, FDA has not enforced compliance with GMPs by many of the drug producers it has inspected. Of the 7,124 inspec- tions during fiscal year 1971, nearly 4,000 were followup inspections where deviations from GMPs had been previously encountered. Over half--2,l74--of the followup inspections showed that producers were still not complying with the FD~C Act. The FD~C Act provides FDA with legal sanctions to enforce drug producer compliance with GMPs: - -Authority under section 301 to prohibit the introduction or delivery for introduction into inter- state commerce of any drug that is adulterated. - -Authority under section 302 to initiate injunction proceedings- -civil court actions- - to restrain viola- tions of section 301. - -Authority under section 303 to impose penalties for conviction of any person who violates a provision of section 301. --Authority under section 304 to seize any drug that is adulterated or misbranded when introduced into or while in interstate commerce. FDA's guidelines for using this authority provide that prosecution, injunction, or seizure may be considered on the basis of inspectional evidence only; i.e., a product need not be sampled and analyzed to show that it is adulterated. The guidelines also provide that: --Support for seizure actions should include documen- tation of the deviations from GMPs that demonstrate inadequate assurance of identity, strength, quality, or purity of the drug. 11 PAGENO="0618" 10534 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY - - Injunction action may be considered when a producer has generally ignored the principles of GMPs in the past and sufficient evidence is available to estab- lish that continued violations are lik~ly to occur. - -Prosecution may also be considered when a producer has generally ignored the principles of GMPs. A record of faulty past performance may be necessary to warrant prosecution when inspectional evidence is not accompanied by sample analysis showing adulterated drugs. To evaluate FDA's effort to enforce compliance with GMPs, we reviewed the inspection records of 73 drug pro- ducers. Sixty-eight of these were randomly selected from 857 drug producers that had been inspected during the 2-year period ended March 1971 in the 3 FDA districts included in our review. We also reviewed the inspection records of 5 major prescription drug producers that received a more intensified FDA inspection of GMPs as part of a special pro- gram. According to FDA, this indepth inspection program of the major prescription drug manufacturers resulted in massive improvements in manufacturing practices but was discontinued because it consumed tremendous resources, LIMITED USE OF LEGAL SANCTIONS TO ENFORCE GMP COMPLIANCE FDA has not always aggressively used its legal sanctions to enforce compliance with GMPs. Our examination of the inspection records for the 73 drug producers showed that --58 of the 73 producers had a total of 1,015 GMP deviations of which 382 according to FDA administra' tive guidelines were critical and --35, including the 5 major prescription drug producers, or 60 percent, of the 58 firms had critical devia- tions from GMPs on successive inspections. FDA identifies critical deviations from GMPs as those deviations having the greatest probability of creating adulterated products. The 382 critical deviations included: 1z1 PAGENO="0619" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10535 - -Raw materials not assayed. - - Incomplete or no master formula or batch production record. --Incomplete or no production and control procedures. - -No laboratory controls - -No distribution records. In most instances FDA relied on communication with the producers and reinspection to encourage voluntary corrective action. Although these steps may have resulted in some improvements, FDA inspection reports revealed that in most instances the action taken had not achieved compliance with GMPs. The following three examples illustrate FDA's enforcement of GMPs, as noted during our review. Firm A is a drug producer with estimated annual drug sales of T~oo,Oo0. FDA made four inspections of this firm during the 50-month period ended December 1971. In each instance FDA concluded that the firm was not in compliance with GMPs. The inspection reports revealed, as summarized below, a total of 34 deviations of which 15 were critical according to FDA guidelines. 13 PAGENO="0620" 10536 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Date Conditions found FDA action Nov. 1967 Seven deviations from GMPs including Deviatio'ie discussed with the following four critical deviations: representative of firm. Reinspection was scheduled --No assay of raw materials, for March 1968. --No conts'ols over labbling. -No manufacturing records other than master formula. "Lot numbers not assigned to batches. Also, firmdid not clean bottles or caps used in packaging and did not have equipment to clean them. Mar. 1968 Inspection revealed no changes in firm's No listing of inspectional ob- operations; owner made no effort to servations was issued. Post comply with previous inspector's oral inspection letter issued recommendations. Eight deviations from 40 days after inspection. GMPs were identified, including the fol- lowing four critical deviations: Latter did not cite any vio- lation of the FD4C Act. No --No assay of raw materials, response was requested or --No working formulas, received. Reinspection was --No manufacturing records, scheduled for 0-tober 1968, - -~o abel controls, but was not maa' until Septea- bar 1969. Sept. 1969 No improvements in manufacturing prac- A list of inspectional obaerva- tices. Six deviations noted, two tions was issued. Post inapec- critical: tion letter was issued 22 days after the inspection, Response - -No assay of raw materials or was requested but not received. finished products. Reinspection was stheduled for March 1970 but not made until -`No manufacturing records. June 1971. Also, failure to adequately clean packaging and labeling equipment. June 1971 Firm was not registered as required A list of inspectional observa- by the act. Thirteen violations of tiona was previded. No past GMP5 were identified, five critical: inspection letter was Issued. Reinspection was to be scheduled, - -No master production and but no further action was taken control records, as of December 31, 1871. --No batch production and control records. -`No laboratory control. - -No stability testing of finished product. -`Lot distribution could not be readily determined. 14 PAGENO="0621" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10537 In 1969 the inspector noted that for the previous several years management had a less than acceptable attitude toward compliance He stated, "Specifically, the producer refuses or is incapable of complying with good manufacturing practices " Although the management had continually promised to comply with GMPs, according to the June 1971 inspection report, there was no evidence that its intent was sincere Because of the lack of FDA action, this producer has been permitted to manufacture and market drugs which are co1nsidered adulterated under the FD~C Act. Firm B is a producer with estimated annual sales of $30 million consisting primarily of medicated or extra relief cough drops FDA inspected the producer's manufacturing practices twice during the 2-year period ended March 1971, each time concluding that the firm was not complying with GMPs In its previous inspection, October 1968, FDA found that the producer failed to manufacture cough drops in compli- ance with GMPs FDA had observed that no tests were performed on components or finished drugs and batch production records were not maintained In an April 1970 inspection, FDA observed that the producer continued to manufacture without batch production records, testing of components and finished products, as well as other critical deviations from GMP requirements FDA, relying on the producer to voluntarily correct the deviations, scheduled the firm for reinspection in S months In September 1970 FDA reinspected the producer and again concluded that it was not in compliance with GMPs. The inspection showed that the producer initiated a components testing system that did not insure conformity to appropriate standards of identity and strength. Furthermore the producer continued to manufacture without sub3ecting finished drugs to testing (i e , identity and strength of active ingredients) In addition, distribution records were not mai~itained to de- termine the disposition of drugs manufactured FDA, relying on the producer to voluntarily correct deviations, scheduled the firm for reinspection in 10 months, July 1971 In April 1971 FDA visited the producer to follow up on a consumer complaint of a bristle-like object in cough drops. In reviewing the producer's complaint file, FDA noted at least eight *other complaints on cough drops. The firm refused further review of its complaint file and FDA terminated its review without taking any action 15 PAGENO="0622" 10538 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY As of December 1971, FDA had not reinspected the firm to determine Whether corrective action had been taken. Firm C is a drug producer with an estimated annual sales of $80,000, consisting primarily of dental drugs. FDA in- spected the producer's manufacturing practices three times during the 32-month period ended December 15, 1971--each time concluding that the producer was not complying with GMP requirements such as formula and production control records not being maintained. The number of deviations increased from. 6 in the first inspection, to 23 in the second, to 49 in the third--including critical deviations of 5, 9, and 25, respectively. Although a total of 78 deviations were found, of which 39 were critical, FDA did not recommend that legal action be taken to correct them; it relied on communica- tion with the producer and followup inspections to promote voluntary corrective action. Although the producer corrected some of the deviations, the last inspection showed the producer had continued to manufacture drugs under conditions that did not conform to GMPs. An FDA supervisory inspector in this district advised us that they usually wait at least two inspections before recommending legal action to allow the firm to correct its deviations. PAGENO="0623" CO~IPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10539 Reasons for infrequent use of legal sanctions The Director of the Office of Compliance, Bureau of Drugs, told us that in his opinion when FDA inspectors find major deviations from GMPs, in almost all cases they will find an adulterated product. The Deputy Director, Office of Compliance, said that in 1971 FDA had increased its effort to enforce compliance with GMPs. The Deputy Director said that a producer manufacturing or marketing a prescription or nonprescription drug which constitutes a health hazard and which continually deviates from GMPs should be prosecuted and/or enjoined. He added that injunctions place a considerable burden on FDA's man- power since the producer's products must be continually monitored. He said that, because of this, few producers have been enjoined and FDA has been oriented toward approv- ing only those cases which are health hazards. FDA officials also described the following problems in effectively using legal sanctions to enforce compliance with GMPs: - -The lack of adequate guidelines for the use of seizure actions by the districts. ~-The therapeutic insignificance of GMP violations by producers of nonprescription drugs. - -The need for embargo authority. --The extremely slow judicial process. `Lack of adequate guidelines According to the Director of the Office of Compliance, Bureau of Drugs, FDA has had difficulty providing guidelines to the field offices for implementing GMPs according to the law. He said GMPs require the user's interpretation. He acknowledged, however, that current guidelines for implement- ing GMPs should be revised and stated' that staff resources limited this action. 17 32-814 (Pt. 24) 0 - 74 - 40 PAGENO="0624" 10540 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY FDA has not provided the districts with guidelines to assist in developing a sound case. In addition, the Direc- tor of the Division of Case Guidance, Bureau of Drugs, said that some district personnel did not know what was needed for compiling a sound case for legal action against viola- tions of GMPs. He said that as a result district recommenda- tions were frequently disapproved because the cases lacked documentation and completeness rather than significance. Also, the Director of the Division of Case Guidance, who is responsible for approving the district recommenda- tions, said that his staff did not have guidelines for mak- ing case decisions. Rather, they rely on their expertise and judgment developed over a period of many years of ex- perience. The benefit of this experience, however, has not been passed on to the district offices in the form of written guidance for their consideration when developing recommenda- tions. The following case illustrates the resultant confu- sion. FDA officials in one district, which initiated 18 of the 51 seizure actions approved in the 2-year period ended June 1971, stated that it had become increasingly difficult to obtain headquarters approval of seizure recommendations. The officials said five seizure recommendations were dis- approved during the 2-year period and showed us seven similar examples from fiscal year 1972. One of these examples follows. Firm D produces drugs with estimated annual sales of $2 million. In December 1971 the district office completed an inspection during which it observed 26 deviations from GMPs. Production of two separate quantities of a drug were considered adulterated based on inspectional evidence show- ing they were not manufactured in conformity with current CMPs. Accordingly the district recommended seizure of both quantities of production. Consistent with provisions of the law and implementing regulations, no laboratory analysis was considered necessary to support the recommendation. In disapproving the seizure action, FDA headquarters stated that the identified deviations were not significant without FDA analysis of the product or other evidence of widespread defects. Officials in the Bureau of Drugs stated: 18 PAGENO="0625" COMPETITIVE PROBLEMS IN THE DRTJG INDUSTRY 10541 The Administrative Guideline concerning critical and significant GMP deviations nust not be taken as hard and fast rules, but must be interpreted concerning relative significance in light of the firm's actual practices and operations They explained that supporting a seizure action based solely on not following GMPs must be more stringent i e devia tions must be of greater significance since the burden of proof of deficiency is on FDA FDA district officials took strong exceptipn to the reasons for disapproval stating that deviations from GMPs when considered in a group support the recommended seizure. Specifically, the district was concerned with the Bureau's position interpreting it to mean that in similar future instances there would be a need for FDA laboratory analysis showing a violation to support a seizure action. District officials pointed out that the FD~C Act and GMPs permit seizure actions on the basis of inspectional evidence only, notwithstanding the need for or outcome of an FDA assay of the finished product Because of the confusion created by headquarters' dis approval, of this and other seizure recommendations, the district officials requested clarification in February 1972 of current FDA policy and guidelines for initiating legal action when inspections show firms are not complying with GMPs The district officials told us that a headquarters' reply received in May 1972 did not provide the district with guidelines for future action FDA advised us in October 1972 that the guidelines for implementing GMPs were being studied for improvement Therapeutic insignificance olnonprescription drugs Neither the FD~C Act nor FDA guidelines preclude legal action against firms that deviate from GMPs when producing nonprescription drugs FDA headquarter officials stated, however, that actions recommended and taken depended pri manly on the demonstration of therapeutic significance or potential health hazard Since nonprescription drugs usually do not pose a significant threat to the public health, FDA officials said they are reluctant to pursue legal actions for violations of GMPs on such drugs. 19 PAGENO="0626" 10542 COMPETITIVE PROBLEMS IN `THE DRUG INDUSTRY Need for emhargo authority Bureau of Drug officials have expressed q need to have embargo authority- - authority to temporarily detain drugs suspected or known to be violative while seizure action is processed and accomplished. Lacking such authority at present, drugs identified for seizure are often shipped to distributors before seizure action is approved. The Asso- ciate Commissioner for Compliance stated that FDA is unable to effectively remove a drug from the market after it has been widely distributed since a seizure action would have to be taken through each United States District Court having jurisdiction over the product location. The need for FDA to seek embargo authority is discussed in a previous GAO report to the Congress.1 Slow judicial process Some FDA officials consider the e~ffectiveness of injunctions and prosecutions limited because the judicial process is extremely slow, and in the meantime firms continue to produce and market adulterated drugs. During fiscal years 1970 and 1971, FDA approved a total of 51 seizures, 2 injunctions, and 5 prosecutions because of deviations from GMPs. It is evident from the national statistics that, only in a few instances FDA used either an injunction or prosecution to enforce GMPs of the FD~C Act. One of the few injunction orders processed by FDA took 16 months. Thirteen of the 16 months elapsed while the pro- posed injunction was being processed through FDA headquarters. By contrast, it took 2 months for the district to prepare the recommendation and 1 month for the United States District Court to approve the injunction after it was filed. Recent steps toward more aggressive enforcement In February 1972, FDA's Associate Commissioner for Com- pliance issued a policy statement which resulted in the following instruction being provided to district offices: 1"Lack Of Authority Limits Consumer Protection: Problems In Identifying and Removing From The Market Products Which Violate The Law." (B-16403l(2), Sept. 14, 1972) 20 PAGENO="0627" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10543 --In those instances where critical deviations are noted, seizure or citation will be recommended to headquarters. This policy change indicates FDA's intention to enforce compliance with GMPs more aggressively since, before this instruction, recommendations to headquarters for seizure or citation were not mandatory. CONCLUSION FDA has not always aggressively enforced drug producers' compliance with GMPs, as indicated by the large number of producers in our samples with continuing deviations on suc- cessive inspections. As a result, many firms have continued to produce and market adulterated drug products. The non- aggressive enforcement appears to have stemmed primarily from a lack of guidance on when legal actions should be taken and what should be documented and the resultant con- fusion between FDA personnel responsible for recommending legal action and those responsible for approving such action. In our opinion, FDA has not provided sufficient incentive to producers chronically deviating from GMPs to correct their practices. FDA's recent policy changes indicate a step toward more aggressive enforcement of GMPs. FDA district offices have been directed to submit to headquarters, recommendations of citation for prosecution or of seizure in all cases of criti- cal deviations. However, we believe the effectiveness of this change will be hampered by the lack of guidance avail- able to district offices, the confusion surrounding the criteria for legal action, and the needed documentation to support a case in court. RECOMNENDATION TO THE S SECRETARY OF HEALTH, EDUCATION, AND WELFARE We recommend that the Secretary, HEW, direct the Com- missioner, FDA, to establish more definitive guidelines to be followed by headquarters and district office personnel, specifying (1) when products should be seized- - especially those posing a questionable health hazard, (2) the amount and type of documentation needed to adequately support the seizure action, and (3) when firms should be cited for prosecution. 21 PAGENO="0628" 10544 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY HEW concurred in our recommendation and advised us that the Bureau of Drugs is studying administrative guidelines for GMPs as well as the current good manufacturing practice regulations with assistance from a drug quality control ex- pert consultant with extensive industry experience. HEW stated that the guidelines will be rewritten to more clearly delineate and define actions to be taken. In addition, training programs for field and headquarters officials will be intensified and will continue to insure that everyone making regulatory decisions has written guidelines to the fullest extent possible or has the experience to make judg- ments where guidelines are not possible HEW stated that the use of the term "critical devia tions" throughout the report in referring to inspections of drug firms was unfortunate and possibly misleading. HEW explained that in the administrative guidelines for GMPs, there is a list of critical areas with instructions on when to recommend regulatory actions where critical deviations are found and that these guidelines stress the importance of judgment in determining whether a situation exists that requires regulatory, action. HEW stated that wherever truly critical deviations from GMPs are found it always acts to correct the situation We agree that certain types of deviations from GMPs are more significant than others and that judgment must be ex- ercised in determining when regulatory actions should be taken. It should be noted, however, that the report shows the total number of deviations noted during the inspections of 73 drug producers To show the extent to which serious deviations occurred, the report also identifies the number of deviations which were critical- -according to FDA guide- lines This was done because FDA identifies critical devia- tions from GMPs as those deviations having the greatest probability of creating adulterated products 22 PAGENO="0629" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10545 CHAPTER 3 NEED FOR MORE CORRECTIVE FOLLOWUP ACTIONS When FDA inspections disclose deviations from GMPs, FDA district officials take certain followup procedures designed to obtain voluntary corrective action. These procedures in- volve giving notice of deviations to the drug firms and making foilowup inspections. Our review showed that the procedures were often not followed or, if followed, were not pursued in a timely manner. We believe that improvements in following up on deviations are needed if FDA expects drug firms to adopt a serious attitude toward its inspection efforts. In most instances, FDA inspections identify deviations from GMPs. Before February 1972, FDA had established the following procedures in accordance with the F1)~C Act to be followed by the districts in attempting to obtain voluntary corrective action: --Upon completion of an inspection, discuss the findings with a representative of the firm and provide a list of inspectional observations noting the objectional conditions or practices which deviate from GMPs. --Subsequently, notify the firm's management of devia- tions- -either by a warning letter for minor violations or a post inspection letter for major violations. - -Make followup inspections to determine if adequate corrective action has been taken. In February 1972, 1~1)A issued a policy statement rescind- ing the use of post inspection letters, except for inspec- tional findings relating to insanitary conditions associated with Food firms. To review I~DA's lollowup actions, we examined the inspec- tion reports on the 58 dri.ig producers with deviations from GMPs. These inspections were made primarily during the 2-year period ended March 31, 1971. The 58 producers were inspected a total of 268 times; however, deviations were concentrated in 156 of the inspections. 23 PAGENO="0630" 10546 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY POST INSPECTION COMHIJNICATION OF FINDINGS -_______ In nearly all instances FDA inspectors discussed their findings with producers' representatives but did not provide adequate written notification. We examined reports and other records relating to the 150 inspections (6 of the inspections were made before the post inspection letter guideline) on the 58 producers with deviations and noted that FDA issued a list of inspectional observations and a post inspt~ction letter, as the guideline suggests, in only 65 instances or in about 43 percent of the inspections. FDA did not follow this proce- dure in the remaining 85 instances- - issuing no written com- munications in 46 instances and only 1 of the 2 types of written communication in 39 instances. Over the years, drug firms have complained that post inspection lette;s are the only means of notifying their top management of what needs to be corrected. They have main- tained that inspectors' oral and written communications to immediate plant personnel do not always reach top management. Accordingly, in January 1968 FDA established procedures for issuing post inspection letters to top management. However, FDA issued post inspection letters in only 75 of the 150 inspections. In addition, our review of 15 post inspection letters issued by one district office showed they usually were not issued in a timely manner. On the average, the district took 41 days to issue the letter after completing the inspection. The range was 13 to 89 days. For example: - -Six inspections were made over a 37-month period of a drug manufacturer with annual sales of $4 million. A total of 34 deviations from GMPs were found, of which seven were critical. FDA issued a post inspection letter to the producer after each of the first four inspections but as shown below took more than 1 month to do so in three instances. 24 PAGENO="0631" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10547 Date Number of Date of Calendar ins~p~cted deviations letter 11-27-68 5 2-24-69 89 6-12-69 6 7-24-69 42 11-06-69 4 12-05-69 29 1-08-70 9 3-13-70 64 3-13-70 9 none issued - 11-17-70 1 none issued - Action taken on the fourth inspection indicates what can happen when post inspection letters are not issued timely. Upon completing the inspection on January 8, 1970, the inspector discussed his findings with plant personnel and issued a list of inspectional observations, indicating that the deviations identified could lead to product con- tamination. Nevertheless, the producer continued to man- ufacture the product and release it for distribution. Later FDA analysis of the product showed it had been contaminated with particulate matter. On March 13, 64 days after completing the inspection, FDA issued a post inspection letter reemphasizing that any one of the deviations could lead to product contamination. The producer was also reinspected on the same day. The in- spection report stated that the management was apathetic to the indicated deviations and would not agree to any correc- tive action. Two weeks later, after receiving the post in- spection letter, the producer stated in a written reply to FDA that it discontinued manufacturing this product and was in the process of correcting the deviations; and that the product produced in 1969 and 1970 had been recalled. Delays in informing top management of drug producers of deviations are not conducive to prompt correction and nay result in prolonging the exposure of consumers to adul- terated drug products. According to FDA, optimum consumer protection requires that FDA report to the producer, in a timely manner, all significant inspection findings, and schedule an inspection to insure compliance. FOLLOWIJP INSPBCTIONS FDA's followup inspections to insure that producers have corrected deviations from GMPs have generally been 25 PAGENO="0632" 10548 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY untimely, especially for small drug producers, which com- prise the vast majority of the 6,400 producers. We reviewed 83 inspection cases involving deviations from GMPs for which followup inspections were scheduled and were to be made during a specific month before December 31, 1971. Twenty-five reinspections were made on time; i.e., when scheduled, 32 were made late and 26 were not made as of December 31, .1971. For example: - -An inspection of a drug manufacturer with annual sales of $115,000 was completed in December 1967. FDA found five deviations from GMPs and scheduled a followup inspection for April 1968, 4 months later. However, the firm was not reinspected until May 1969-- 17 months later- -and four deviations were noted. Three were among the deviations identified during the December inspection. A routine followup inspection was scheduled for May 1971 but had not been made as of December 1971. Other than the requirement of the FD~C Act for biennial inspection, FDA has no definitive guidelines for scheduling followup inspections of producers that deviate from GMPs. Instead, followup inspection depends on each district of- fice's interpretation of the significance of its findings, the availability of resources, and the likelihood of the producer's voluntary corrective action. FDA routinely schedules followup inspections at varying time intervals in those instances where inspectors note devi- ations. As the table shows, the scheduled time interval in one district varied from 1 to 24 months for 48 followup inspections scheduled to be made before December 31, 1971. 26 PAGENO="0633" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10549 `Number of Scheduled time reinspections interval scheduled Within 1 month 1 2 3 months 1 4 6 months 13 7 9 months 6 10 12 months 7 13-15 months. 3 16-18 months 2 19-21 months 8 22-24 months 7 48 Of the 48 followup inspections scheduled, only 28 had been made as of December 31, i97l, and the average time be fore reinspection was 14 months Fourteen reinspections were made within 12 months, 9 more within 24 months, and S more within 36 months. The remaining 20 had not, been made at the end of 1971, although an average of 22 months had elapsed since the initial inspection. FDA district officials stated that, although they attempt to make followup inspections of producers with significant deviations from GMPs, higher priority work many times pre cludes or delays the inspections They said that there were no ctefinitive guidelines for determining what work should be done first priority was usually given to headquarters directed programs and problem firms that produce drugs with significant health implications. Consequently, some pro- ducers are not given the attention that may be warranted be- cause the annual volume or health implications of their drugs is insignificant compared with other producers. Post inspection letters to ~ producc'is elimin'ited by policy statement In February 1972 FDA's Associate Commissioner for Corn pliance issued a policy statement which provided the following instructions to district offices - -Use of warning letters will be continued in cases of minor violations (no impact on health or safety). The 27 PAGENO="0634" 10550 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY letters will be issued after approval by headquarters and will request a response by the producer. - -Use of post inspection letters will be continued only as the findings relate to insanitary conditions which could lead to violations of the FD~C Act. (Insanitary conditions are associated primarily with the food in- dustry.) The firm will be requested to reply within 10 days.. We discussed these changes with the Depuiy Associate Commissioner for Compliance. He said the primary means of communication with drug producers regarding inspection find- ings would be the inspector's oral discussion with plant per- sonnel and the list of inspectional observations. FDA dis- trict officials explained that, as a result of these changes, districts' top management are no longer authorized to notify producers' top management of significant adverse findings. Instead, they will recomnend seizure or citation for prosecution to FDA headquarters. In August1972, subsequent to the completion of our fieldwork, FDA rescinded its policy statement of February 1972 and issued a new policy statement which (1) requires that post inspection letters be issued within 10 days of the completion of an inspection to all drug producers where critical deviations from GMP regulations are encountered and (2) allows the judicious use of regulatory letters in those cases where seizure actions are not practicable and injunc- tions or prosecutions are not warranted. The new policy statement also requires a response from the drug producers within 10 days, and prompt followup action by the District offices to insure that producers take corrective action. To maintain control, the Associate Commissioner for Compliance will receive copies of all regulatory letters issued and industry responses received. However,.the policy change does not provide instructions to insure that warning letters- -unlike post inspection letters and regulatory letters--specify a time limit in which a drug producer must notify FDA of corrective actions planned or taken. . 28 PAGENO="0635" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10551 CONCLUSION FDA's efforts to obtain drug producers' voluntary compliance with GMPs in many instances were not effective be- cause proper and timely written notification of needed cor- rections was not provided to producers' top management. Followup inspections werèüsually~untimely, if made at all,.. and were often ineffective when firms were found to have taken no action. Proper implementation of the August 1972 policy state- ment regarding post inspection and regulatory letters should assist FDA in insuring that (1) district offices properly monitor drug producers' replies and (2) producers take needed corrective actions. However, we believe that FDA should also consider establishing a tine limit for receipt of written responses requested in warning letters. RECOMMENDATION TO TIlE SECRETARY OF HEALTH, EDUCATION, AND WELFARE We recommend that the Secretary, HEW, direct the Com- missioner, FDA, to consider establishing a time limit for receipt of the written response requested in warnthg letters. HEW concurred in our recommendation and advised us that instructions were issued in August 1972 to require a response to all warning letters to firms within 10 days. Our review of the August 1972 instructions showed, how- ever, that the 10-day response was required only for post inspection and regulatory letters, and was not required for warrUng letters. We believe FDA should clarify its instruc- tions to also establish a specific time limit for receipt of the written responses requested in warning letters. 29 PAGENO="0636" 10552 OOMPETITIVE PROBLEMS IN THE DRIJG INDUSTRY CIIAPTflR 4 SOH1~ DRUG PRODUCERS NOT INSPECTED ____!~ A~LJ!1 Q~LU~L~ The FD~C Act requires all drug producers to (1) rcgister annually with FDA and (2) be Inspected by FDA at least once in the 2-year period beginning with the date of registration and at least once every 2 years thereafter. FDA inspections are made to determine if GMPs are being followed in actual practice. FDA considers its inspections to be an integral part of its defense against adulterated drugs reaching the consumer. however, FDA has not inspected some producers `is often as required At least 213 perhaps as many as 3361 of the 1,300 drug ploduLcrs in the three districts included in our review had not been inspected during the 2 year period April 1969 throu~,h March 1971 FDA officials acknowlcdged during May 1971 hearings before the Subcommittee on Intergovernmental Relations, house Committee on Government Operations, that about 26 percent of the registered pharma- ceutical manufacturers were not inspected during the 32-month peri.od July 31, 1968, through March 31, 1971. Failure to inspeLt some producers as often as required can be attributed to weaknesses in the inspection scheduling process, the priority givcn to reinspecting othLr produLers that had a history of deviating from CMPs, divcrsion of nun- power to crisis situations and headquarters-directed work, and the lack of available manpOwer. FIRMS SUBJECT TOINSPECTI FDA maintains a narrative inspection history, in the form of a computcr printout, on all producers subjcct to in'poction For the three districts included in our rcview, th~ printout showed that 609 of the 1,S39 firms classified as drug producers were not inspected during the 2-year period cndcd March 31, 1971 `See discussion on p. 31. 30 PAGENO="0637" COMPFTITIVE PROBLEMS IN THE DRUG INDUSTRY 10553 Because of numerous errors in printout information, we found, with FDA's assistance, that only 213 of the 609 firms were properly classified and had not been inspected. Although another 123 of the 609 firms were shown as not in~ spected, district officials did not have records to verify that these firms were subject to the 2-year inspection re- quireinent FDA district office boundaries ~w~ere realined ~n 1971 and records on the 123 firms could not be located We also found that 34 of the firms shown as not inspected pn the printout had been inspected during the 2-year period The remaining 239 firms not inspected were either (1) out of business, (2) not currently producing drugs (inactive.), or (3) misclassified as to establishin~nt type; i.e., classified as a drug producer when the firm was either a distributor, a warehouse (storage facility), a dealer (i e , drug store), or a shipper (jobber), and not rQquired to be inspected biennially We randomly selected and reviewed inspection records on 98 of the 213 producers not inspected during the 2-year period ended March 31, 1971, to determine the firms' size, kind of products produced, and past inspection history. As of March 31, 1971, an average of 36 months had elapsed since 74 of the producers were last inspected. As the following table shows, some had not been inspected for as long as 5 years. Elapsed time between Number date of last inspec- of tion and M'irch 31, 1971 firms 25-30 months 30 31-36 months 11 37-42 months 15 43-48 months 8 49-60 months . 7 Over 5 years 3 Total The remaining 24 of the 98 producers in our random selection had registered for the first tine during the 2-year period and were not required to be inspected by March 31, 1 971. The 24 producers had~ been registered an average of 9 months--seven for over 12 months. FDA has no established 31 PAGENO="0638" 10554 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY guidelines on how soon newly registered producers should be inspected after registration. Since those producers are permitted to produce and distribute drugs for.consumor use, we believe FDA should consider making an earlier initial inspection of such producers. TYPES OF FIRMS NOT INSPECTED AND PRIOR DEVIATIONS Generally, the drugs produced by most of the 74 producers could be purchased by consumers without a prescription. Many of the producers manufactured or re- packed drugs such as vitamins, liniments, salves, bulk drugs, medicinal gases, and reducing tablets. Thirty-nine were small drug producers with annual sales of less than $10,000. Five had annual sales of over $1 million. Many of the findings during prior inspections related to labeling and misbranding. However, deviations from GMPs included - `-failure to prepare control records for each quantity of drugs produced, - -failure to establish production and control procedures to insure the quality of the drug produced, ---failure to code finished products to determine, if necessary, the history of the manufacture and control of the drug, and --inadequate laboratory controls to insure that components and finished products conform to appro- priate standards of identity, strength, quality and purity. A brief inspection history follows on one of the 74 producers. Firm E primarily manufactures high-purity laboratory chemicals and solvents. On special order it produces a drug for peptic ulcers which FDA estimated annual sales of $45,000. FDA inspected the producer in March 1969 and found that the producer was using, adequate control procedureS. However, the drug for peptic ulcers was not being manufac- tured at the time of inspection. FDA scheduled the producer 32 PAGENO="0639" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10555 for another inspection in June 1970. FDA did not perform tills inspection or the rescheduled inspection for March 1971. Because the drug produced by the firm was to be used by the military services, the Defense Supply Agency inspected the producer in June 1971, and identified nine findings which were deviations from GMPs including:' ..lnadequate control of raw materials, as written specifications are not established for all raw materials, raw materials are not tested, and approved raw materials are not isolated and distinctly labeled for ready identification as fit for use. -Possibility of contamination from other products exists in the manufacturing operations. -All equipment is not routinely inspected and cleaned before each use and promptly cleaned thereafter. ~-Positive identification of material is not maintained during processing operation. --Plant was not clean and orderly. Windows and doors in plant were not screened to prevent entrance of insects and other pests. The Defense Supply Agency communicated its inspection results to FDA by letter in July 1971. As of April 1972 FDA had not reinspected the producer. The deterioration in the pro- ducer's control procedures during the period FDA did not inspect it illustrates the importance of inspecting all producers biennially. REASONS GIVEN FOR NOT INSPECTING ALL DRUG PRODUCERS We noted a lack of controls to insure that producers are rescheduled and inspected biennially. FDA Bureau of Drugs officials told us that no one at headquarters had been assigned responsibility for insuring that all drug producers were inspected every 2 years, although the Bureau has re- sponsibilityfor this activity. Several officials said that headquarters did not maintain records on statistics identify- 1mg drug producers inspected for (`iMPs. Also, the districts 33 32-814 (Pt 24) 0 - 74 - 41 PAGENO="0640" 10556 COMPETITIVE PROBI~EMS IN THE DRUG INDUSTRY did not maintain records showing the firms inspected for ;GMPs. FDA headquarters officials told us that district direc- tors had been assigned the responsibility for insuring that all drug producers were inspected biennially, as required. `~The Deputy Executive Director for Regional Operations told us that guidelines on the frequency of inspections had not been given to district personnel. He did not believe such guide- lines were necessary since the FD~C Act required biennial inspections. We were told that some producers were not inspected because they were either overlooked during the scheduling * process or judgmentally deleted when available manpower was needed on higher priority work. For example, we found that 17 of 30 producers not inspected were scheduled for inspec- tion one or more times during fiscal years 1970 and 1971. These 17 producers were scheduled for inspection a total of 25 times, with one producer being scheduled for inspection a total of 6 times. The renicining 13 firms, were not scheduled for inspection. ~;,. At the completion of each inspectior~.' the producer is normally scheduled for another inspection within 2 years. Reinspection dates are fed to the distvic~ data processing unit, which prints out a bimonthly schedule of producers to be inspected during the period. Howeve:, FDA district office personnel must often dele~3 and reschedule producers at a future date because of such hig¼~~ priority assignments as special inspection or sampling programs imposed by head- quarters and emergency product ~ecails. A recent emergency recall involved a toxic bacteria in a food product. In this instance, all scheduled drug inspections were delayed at least a month. During our review, a new procedure was initiated in one FDA district to insure biennial i~spect3'n of all drug pro- ducers. Under this procedure a producer is scheduled for reinspection within 18 months of the 1a~t inspection. This procedure provides a 6-month leadtime to rcinspec.t within the required 2-year period. " 34 PAGENO="0641" (0 ~C1 USIONS FDA lacks an effective means to insure biennial InspectiOn of all drug producers. Although we found that noninspocted firms generally were small producers of non- prc~~,c~iption drugs, the FD~C Act clearly requires that FDA Thspcct all drug producers regardless of size or product type. We believe that FDA~should develop an ~ffective means for insuring biennial inspection of all drug producers and headquarters should monitor the district offices more closely to insure that the 2 year requirement is met FDA may want to consider the procedure discussed on page 34 for wider implementation. An up-to-date listing of producers not inspected would aid in providing needed control. Also, FDA should make a more timely initial inspection of newly registered producers since these producers are permitted to market drugs. RECOMMENDATIONS TO THE SECRETARY, HEALTH, EDUCATION, AND WELFARE We recommend that the Secretary, HEW, direct the Commissioner, FDA, to: --Establish an inspection scheduling system monitored by FDA headquarters to insure that all drug producers are inspected biennially. --Establish guidelines to insure timely initial inspection of newly registered drug producers HEW concurred in our recommendations and advised us that FDA will develop a system (to be monitored at the headquarters level) for scheduling biennial inspections of all drug producers. hEW stated that full implementation of the system, however, will depend ~n an increase in inspec- tion resources presently available to FDA and on other com- peting priorities for the manpower to perform such inspections. 1113W pointed out that most of the firms not inspected bienni'tlly were manuf'icturi~ig nonprescription drugs which ~35 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10557 PAGENO="0642" 10558 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY usually do not pose a significant threat to the public health. HEW conceded that these firms should have been inspected in a more timely manner, but advised~us that FDA's limited manpower precluded reaching this goal. HEW stated that the decision was made to use this manpower in inspecting those plants and those operations that do or could pose a significant health hazard to the consumer. HEW advised us that instructions will be issued to the field to inspect newly registered drug producers as promptly as possible. The instructions will cover not only newly registered firms but new firms which have failed to register and which come to FDA's attention through other means. These firms will be required to register. HEW also stated that it was unfortuiiate that the scope of our audit was not such that a number of approaches taken by FDA to protect the consumer were not commented on in the report. HEW cited FDA's new Quality Assurance Program which calls for large numbers of samples to be analyzed b~fore inspection to detect specific flaws. HEW stated that under this approach, inspectors can focus on the conditions in a firm that led to these flaws. The Quality Assurance Program was implemented subsequent to our review and is an attempt by FDA to make its drug in~ spections more efficient by obtaining preinspection.informa- tion through product analysis. This program, if properly implemented and carried out, should assist FDA in improving the effectiveness of its inspection activities. 36 PAGENO="0643" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 1 0559 ChAPTER 5 NEE]) FOR IMPROVEMENT IN FDA'S REGISTRATION LISTING AND OFFICIAL ESTABLISHMENT INVENTORY Our review showed that two master listings~ - the registration listing and the official establishment inventory (OEI)--maintained by FDA for management and ~ontrol purposes, were inaccurate and incomplete, and that FDA had neither monitored nor enforced annual registration of drug producers. The purpose of the registration listing is to identify all drug producers subject to biennial inspection. The OEI is F1)A's official record of all firms that fall into FDA's regulatory purview. The 0131 is one tool headquarters uses in deciding on the annual allocation of inspection manpower resources within each district. We were told that data in the 0131 is assumed to be correct. In our opinion, the usefulness of the listings has been significantly reduced as a basis for management decisionmaking and control. Both listings for calendar year 1971 contained inaccurate and incomplete information. The registration listing included firms that were not sub- ject to registration and inspection. The 0131 listed some firms, which were not included on the registration listing, as drug producers subject to registration and inspection. Conversely, drug producers shown on the registration listing were not included on the 0131. Also, some firms on the 0131 list had gone out of business. In addition, we found little use made of the registration listing as a means of control. REGISTRATION LISTING Annual registration is to identify firms that produce drugs and are subject to FDA biennjal inspections. Each November, FDA mails registration forms to all producers that registered (luring the prior year. Other drug establishments, including new drug producers, may request registration forms. Completed forms are returned to FDA headquarters for review and distribution, with copies going to the responsible district offices. 37 PAGENO="0644" 10560 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY If a firm has not registered previously, the district office prepares a master card on the firm, recording the information submitted in the registration form and sometimes classifying the firm as to the typo of establishment, e.g., drug producer, distributor, or warehouser. If the firm has previously registered, the master card is updated. The updated master card forms the basis for OEI changes. Firms are recorded on the registration listing when the district office returns the registration form to FDA headquarters. We identified 161 firms shown as drug producers on the registration listing for the three districts included in our review that were not on the OEI. Our review of district records for 65 of the fii~ms showed that 15 were not drug producers and therefore not required to register or be inspected. FDA headquarters officials told us that regis- tration forms were issued on request without determining that the firms were subject to registration and inspection. Our review showed that the districts prepare master cards without screening the firms. We were told by a dis- trict supervisor that only limited information is requested of the drug firm on the registration form. The supervisor said that this lack of information sometimes makes it necessary to guess at what the firm's classification should be, e.g., a d~rug producer and subject to the biennial in- spection or a distributor or warehouser not subject to the in- spection. Rather than guessing, we believe the information should be verified and, if needed, enlarged upon via a telephone call or visit before the firm is classified in FDA's information systems. We were told visits or telephone calls for such purpose were made infrequently. We were told that, if an inspection later shows that the firm was improperly classified, the inspector would have to prepare a change slip to correct the master card and the OflI. Since the registration listing is a separately main- tamed system, the change would also have to be furnished to FDA headquarters. Such changes were not always made. We reviewed the inspection records at one FDA district office for 31 of the 124 firms that distribute drugs in the district. Twelve of 13 firms that were registered were mis- ciassi Iftd and did not 1~ave to register. FDA did not correct the misc J ass i 11 cat ion unt ii we brought its to thei r at teii lion. 38 PAGENO="0645" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10561 It appears that little emphasis has been placed on the inportaflCc of insuring the accuracy of the registration `isting and little use has been made of it. The Director, ~jvisiQn of Case Guidance, stated that the annual regis- trltion requirement is not strictly enforced by I~I)A because ~mre the firm registers, it is maintained on the 0131 listing. J:urther, we were told by FDA headquarters officials that they rely on district office personnel to monitor the list~- ing. However, guidelines have not been provided to.t~he district offices instructing them how to perform the moni toring. OFFICIAL ESTABLISHMENT INVENTORY FDA officials told us that the 0131 is a' useful, essential management tool, and that it is used in resource allocation and inspection plannin~j. A district official said, however, that the 0131 contains firms erroneously classified as drug producers, and thus portfàys I false image of firms requiring biennial inspections. A total of 1,396 fj,yniswere.~c4~as~ified as drug producers on the 1971 OEI listing `for the 3 `districts included in our review.1 However, 368 of these firms did not appear on FDA's registration listing. District records of 204 of the 368 firms showed 67 had not registered,25 had registered but were not on the list, and ~.05 were misclassified on the 0131 and not required to be rc,~istercd or inspected biennially. Information was inadeq,uatc to determine, the classification of 6 of the remaining 1. firms' and ].~firm was listed twice. A data processing supervisor in: one FDA district attributed the inaccurate and incomplete information to `The difference between the total number of firms identified by the 0131 and the narrative inspection hiitory as dis- cussed previously on p.30 had not been reconciled by FDS at the time of our review. FDA has contracted with a private credit organization to ohtaiq,,data on establish- ments whose products may be subject to FDA regulatory authocity. The contract required the data to be reconciled with current FI~A inventory records. 39 PAGENO="0646" 10562 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY * --misclassification of firms by inspection personnel, * failure of inspectors to submit data needed to change the 0131 when reclassification or other changes are made to the firm's central records, and --clerical errors in processing and maintaining data. We also noted that FDA instructions for classifying firms on the 0131 requires that firms be classified in a manner which will best indicate the overall type of estab- lishment. Thus, firms have been classified, for example, as a food establishment even though they may also manufacture or repack cjrugs. Of the 65 firms whose district file records were reviewed, 30 were properly listed as drug producers on the registration listing but were classified on the 0131 as other types of producers, such as foods, cosmetics, etc. The 0131 is one source of information used by headquarters in preparing district offices' annual work plans. The work plans include an allocation of each district's manpower resources to the basic problem areas, i.e., foods, drugs, cosmetics, etc., based on the number of firms in the district and priorities which the FDA Commissioner estab- lishes. Actual selection of drug producers to be inspected is left to the district offices. We believe the usefulness of the OEI in making such resource allocations is reduced by listing drug producers as other types of producers and by the various other misclassification errors we found. CONCLUSIONS The usefulness of the registration listing and the 0131.. as tools for management decisionmaking and control has been~ ~, reduced because the lists have not been complete or accurate. Firms incorrectly listed on the 0131 as drug producers in-. flate the number of firms subject to biennial inspection, Conversely, firms which produce or~repackage drugs but whose primary business is other than drugs, may not be subject to biennial inspection. * FDA has not adequatel.y monitored or enforced the ai~nual registration of drug producers required by the FD~C Act. As a result some fi vms have ~`egistered unnecessarily and some Ii ave not ye g i s t e red a I though r equ I red t o do o 40 PAGENO="0647" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10563 itecause of the lack of emphasis place4 on registration, it tppears that little effort has been made to insure the list- ing is corrected when inspections disclose that firms were originally, misclassified and need not register. We believe that enforcement and adequate monitoring of the registration would enable FDA to cross-check OEI accuracy and completeness. We believe FDA needs complete and accurate drug firm inventory and registration listings -to iden1~ify drug producers subject to biennial in- spection and / - -to insure proper resource allocation to each dis- trict's inspection workload. RECOMMENDATIONS TO THE SECRETARY OFHEALTH~ EDUCATION,~ND WELFARE We recommend that the Secretary, HEW,.direct the Com- missioner, FDA, to - -properly enforce tl~Snnual ~rug producers registration requirement and effectively monitor the accuracy and completeness of the registration listing to per- mit its use as a cross-check on the OEI listing and --correct the inventory of drug producers subject to biennial inspection~so that FDA will have complete and accurate knowledge of ..thescope.'of its inspection responsibilities. -. HEW concurred in our recommendations and advised us that FDA headquarters' staff will quarterly match the OEI file with the drug registration file and provide the district offices with a list of "non-matches." The two sources of information, according to hEW, will be, used to increase the * accuracy of both files. HEW advised üs~that additional inventory data will automatically update the list of drug `manufacturers. According to HEW, FDA has contracte~t'with a major private concern to compare the establishment inventory with the imventory of firms dealing in, commodities subject to the FD~C Act~ FDA will resolve discrepancies between these two lists 41 PAGENO="0648" 10564 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY by June 1973 Other sources of commercial information will also be used by the district offices to correct the inventory Updates will be received from the contractor at regular intervals and will become part of prescribed OEI updatings 42 PAGENO="0649" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10565 APPENDIX I DEPARTMENT OF HEALTH EDUCATION AND WELFARE OFFICE OF THE SI~CRETARY WA.~HINOTON DC 20201 JAN 8 1973 Mr Morton A Myers Assistant Director Manpower and Welfare Division General Accounting Office Washington, D C 20548 Dear Mr. Myers: The Secretary asked that I reply to your letter of September 28, in which you asked for our comments on a draft of a GAO report to the Congress entitled, Problems in Obtaining and Enforcing Compliance with Good Manufacturing Practices for Drugs Enclosed are our comments which set forth the actions taken or * planned on the matters discussed in the report. * Sincerely yours, Assistant Secretary, Comptroller Enclosure 43 PAGENO="0650" 10566 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY APPENDIX I Comments of th~ Department of Health, Education, and Welfare on the GAO Draft Report entitled, "Problems in Obtaining and Enforcing Compliance With Good Manufacturing Practices for Drugs" General We concur in the recommendations offered by GAO, FDA with its limited resources has, and will continue to seek ways to best protect the con- sumer. Manufacturers and processors, however, must strictly comply with. the provisions of the Food, Drug and Cosmetics Act if the consumer is to be assured of quality, safety and wholesomeness in their products. With respect to this report, GAO faults FDA for the limited number of inspections made of firms manufacturing non-prescription drugs. Else~ where in the report, however, it is brought out that such drugs usually do not pose a significant threat to the public health. We concede that these firms should have been inspected in a more timely manner -~ but want to point out that FDA'S limited manpower precluded our reaching this goal. Instead, decisionwas made to use this manpower in inspecting those plants and those operations that do or could pose a significant health hazard to the consumer. We believe it is unfortunate the scope of the audi was not such that a number o~ approaches taken by FDA to protect the consumer were not commented on in this report. For example, the agency' s new Quality !~curnnc~ Progra..~ vj1,~L.~l& OdlJ.b Zur large numoers or sampLes to be analyzed prior to inspection to detect specific flaws. Under this approach, inspectors can focus on the conditions in a firm that led to these flaws, Finally, we believe that the use of the term "critical deviations" throughout the report in referring to inspections of drug firms is un- fortunate and possibly misleading. In the Administrative Guidelines for Good Manufacturing Practices (GMPs), there is a list of "Critical Areas" with instructions on when to recommend regulatory.actions where critical deviations are found. These guidelines stress th~ importance of ju~gct~ont in determining whether a situation exists that requires regulatoryaction. Wherever truly critical deviations from GMP5 are found we always act to correct the situation. GAO Recommendation . . -~,~lish_more definitive guidelines to be followed by FDA headq~iartcrs ~ d~rtht office personn secifving (i) WI oducts ot be ~J~~pec~llly those posing a auestionableh~n1thhazard,ii),~h~ * . ~ount ~sd ty~óof documentationnoeded to adeç~tc~ly stp tthc_seizt~ act ion ~.nd(~ ii) ~hen firms should be cited for p~o ~cution * ~ rt * *%~`e cuncur. The Mminintrativo Guidelines for GMPo m well as the current good inmuficturi ng prztcticu r~~gulat1onu them~;elvL~;, tire under study ly (ho 44 PAGENO="0651" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10567 APPENDIX I ~ure~tu of Drugs with assistance from a drug quality control expert con~ ,~at~int with extensive industry experience. The Guidelines will be re~ ~,gjttcn to more clearly delineate and define actions to be taken. Training for field and headquarters officials will be intensified and con- ~jnuing to assure that everyone making regulatory decisions has written g~tidc1iflOS to the fullest extent possible and the experience to make judg~ monte where guidelines are not possible. GAO ~eCoinsnendation ~~onsider establishing a time limit for receipt of the written res~~ rej~ted in warning letters. `~j~rtment Comment We concur. Instructions were issued in August 1972 to require a response to all "warning" letters to firms within ten days. These letters include Ii) Regulatory Letters, (ii) Reports of Inspectional Findings, and (iii) section 306 warning Letters. In addition, FDA'S inspectors who issue a report of their GMP findings (FD-2275) to an official other than the firm's principal executive, will also send a copy to the principal executive of the firm. GAO Recommendation --!ctablith an Ins~sct~cn cc lin c~,'ct~n ncnit~rcd b's' FDA ~e~artcrc~ Lo essure tnat aLt. cirug proaucer~ are anspecl.eQd~ ~ every ~wu~yearS Department Comment We concur in that FDA will develop a system (for monitoring at the head- quarter's level) for scheduling inspections of all drug producers at least every two years. Its full implementation, however, will depend upon whether the inspection resources presently available to FDA are incrOased and on other competing priorities for the manpower to perform such inspections. GAO Recommendation ~Establish guidelines to assure timely initial inspection of new~ re9istered drug p~roducers. tment Comment We concur. Instructions vii). be issued to the field to inspect newly registered drug producers as promptly as possible. The instructions will cover not only newly registered firms but new firms which have failed to register and which come to our attention through other means. These firms will be required to register. 45 PAGENO="0652" 10568 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY APPENDIX I G~O Recommendation ~operly enforce the annual drua pr~ucers registration requirement 4fecUy~ymonitor the accuracy and completeness of the registration 1istix~j~pperrnit its use as a cross-check on the DEl listing~ - Department Comment We concur. Each quarter (headquarters') staff will match the Official Establishment Inventory (DEl) file with the drug registration file and provide the district offices a list of "non-matches." The two sources of information will be used to increase the accuracy of both OEI and registra- tion files. When the Drug Listing Act and voluntary inventory data become available these data will automatically update the list of drug manufacturers. GAO Recommendation --Correct the inventory of drug producers subject to the 2-year insJ)ection r~3uirement so that FDA will ave complete and accurate knowledge of. the scope of its inspoction responsibilities. Department Comment We concur. As part of the first major Official Establishment Inventory validation since 1963, we have contracted with a major private concern to compare ~DA'~ establish~en~ inventory with their inventory of f~rTnq dealing in commodities subject to the PD&C Act. Discrepancies between these two lists will be resolved by FDA'S District Offices by June 1973. Other sources of commercial information will also be used by the Districts to correct the inventory. Updates will be received from the contractors at regular intervals, and will become part of prescribed OEI updatings. 46 PAGENO="0653" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10569 APPENDIX II COPY GOOD MANUFACTURING PRACTICE REGuLATIONS - DRUGS Good manufacturing practice regulations set forth in ~ ci~ 133.3 - 133.15 are used as the criteria for determin- tng whether the method used in, or the facilities or controls u,cd for, the manufacture, processing, packaging, or holding of a drug conform to or are operated or administered in con- formity with GMPs. Compliance with GMPs is intended to insure th.it a drug meets the requirements of the FD~C Act as to safety, and has the identity and strength and meets the quality and purity characteristics which it purports or is represented to pOSSOSS, as required by section 50l(a)(2)(B) of the FD~C Act. A brief description of each' GMP regulation follows. CFR Section Buildings Buildings in which drugs are nanufactui'ed, processed, packaged, labeled, or held shall be maintained in a clean and orderly manner and shall be of suitable size, construction, and location in relation to surroundings to facilitate maintenance and operation for their intended purpose. 133.4 Equipment Equipment used for the manufacture, processing, packaging, labeling, holding, or control of drugs shall be maintained in a clean and orderly manner and shall be of suitable design, size, construction, and location in relation to surroundings to facilitate maintenance and operation for its intended purpose. 47 PAGENO="0654" 10570 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY APPENDIX II 133.5 Personnel The key personnel involved in the manufacture and control of the drug shall have a background of appropriate education and/or appropriate experience for assuming respon- sibility to insure that the drug has the safety, identity, strength, quality, and purity that it purports to possess. 133.6 Components Components used in the manufacture and processing of drugs, regardless of whether they are intended to appear in the finished product, shall be identified, handled, and otherwise controlled in a manner to insure that they conform to appropriate standards of identity, strength, quality, and purity, and are free of contaminants at time of use. Adequate measures shall be taken to prevent mixups and cross- contamination affecting drugs and drug products. Components shall be withheld from use until they have been identified, sampled, and tested for conformance with established specifi- cations and are released by a materials approval unit. 133.7 Master and batch production and control records For each drug product, master production and control records shall be prepared, endorsed, and dated by a competent,~. and responsible individual and shall be independently checked,~ reconciled, endorsed, and dated by a second competent and responsible individual. Those records shall include specified information concerning, among other things, identity of the product; dosage; labeling; identity and weight and measure of ingredients; containers, closure, packaging, and finishing materials; and manufacturing and control instructions, proce- dures, specifications, special notations and precautions to be followed. 48 PAGENO="0655" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10571 APPENDIX II A separate batch-production and control record shall be prepared for each batch of drugs produced and shall be retained for at least 2 years after distribution has been completed or at least 1 year after the batch expiration date, whichever ~s longer. The batch production and control record shall be numbered to permit the identification of all laboratory- control procedures and results on the batch and all lot or control number.s appearing on the labels of drugs from the butch. The records must also show an accurate reproduction of the appropriate master-formula record, checked and endorsed by a competent, responsible individual. 133.8 Production ~nd control procedures Production and control procedures shall include all reasonable precautions, to insure that the drugs produced have the identity, strength, quality, and purity they purport to possess. Each significant step in the process, such as the selec- tion, weighing, and measuring of components; the addition of active ingredients during the process; weighing and measuring during various stages of the processing; and the determination of the finished yield shall be performed by a competent, responsible individual and checked by a second competent, responsible individual. If such steps in the processing are controlled by precision automatic mechanical or electronic equipment, their proper performance shall be adequately checked by one or more competent, responsible individuals. .133.9 Product containers and their components Suitable specifications, test methods, cleaning procedures, and, when indicated, sterilization procedures shall be used to insure that containers, closures, and other component parts of drug packages are suitable `for t~ieir intended use. They shall not be reactive, additive, or absorptive so as tâ alter the safety, identity, strength, quality, or purity of the drug or its components beyond the official or Ostablished require- ments and shall furnish adequate ,protectiofl against deteriora- tion or contamination of the drug. , 49 32-814 (Pt. 24) 0 - 74 - 42 PAGENO="0656" ~O572 COMPETITIVE PROBLEMS IN THE DRuG INDUSTRY APPENDIX II 133 10 Packaging and labeling Packaging and labeling operations shall be adequately controlled to insure that only those drugs that have met the standards and specifications established in their master pro- duction and control records shall be distributed, to prevent mixups between dru~,s during the filling, packaging, and labeling operations, to insure that correct labeling is employed for the drug, and to identify finished pioducts with lot or control numbers that permit determination of the history of the manufacture and control of the batch of drug 133.11 Laboratory controls Laboratory controls shall include the establishment of adequate specifications and test procedures to insure that compoi~ents, drug preparations in the courseof'processing, and finished products conform to appropriate standards of identity, strength, quality, and purity Laboratory controls shall include the establishment of master records containing appropriate specifications for the acceptance of each lot of each component used in drug production and a description of the sampling and testing procedures used to check them Samples shall be representative and adequately identified. Such records shall also provide for appropriate retesting of ~naterials subject to deterioration. In addition, a reserve sample of at least twice the, quantity of the drug necessary to perform most of the required tests and stored under condi- tions consistent with product labeling shall be retained at least 2 years after the drug distribution has been completed or at least 1 year after the drug's expiration date, which ever is longer Also, the controls shall include the estab- lishment of a master record of appiopriate finished-product specifications and a description of sampling procedures to check them In addition, the controls should include adequate provision to check the reliability, accuracy, precision, and performance of laboratory test procedures and laboratory instruments used. 133.12 Distribution records Completc iccords shall be iniint Lined of the disti ibut ion of eich b-itch of dru~, in a ininiicr thit will f'icilitite its rec~1l tf net ssar~ Such rccords shill be rct un~d for it icist 2 ycirs aftcr distribution of the drut, his bccn ~onipkted 50 PAGENO="0657" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 110573 APPENDIX II ~ i year after the expiration date of the drug, whichever ~ longer, and shall include the name and address of the ~ons'gnec, the date and quantity shipped, and the lot or ontrol numbers identifying the batch of drug. 133.13 Stability Adequate provision shall be made to insure the stability of finished drugs. 133.14 Expiration dating Labels of all drug products liable to deterioration shall have suitable expiration dates which relate to stability tests performed on the product to insure that such drug pro- ducts meet appropriate standards of identity, strength, quality, and purity at the time of use. 133.15 Complaint files Records shall be maintained of all written or verbal complaints for each product. Complaints shall be evaluated by competent and responsible personnel and, where indicated, appropriate action shall be taken. The record shall indicate the evaluation and action. SI PAGENO="0658" 10574 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY APPJ~NDEX III ENPORC 1~MflNT All 1~RNAT I yES AVA I LABLE TO 11113 POOl) AND 1)RUG Al)4INISTRA'fION CRItIINAL PENAJILES Section 301 of the FD~C Act sets forth tho~e actions which are prohibited under the law. Section 303 provides that any person who violates a provision of section 301 be imprisioned for not more than 1 year or fined, not more than $1,000, or both. For second and subsequent convictions, the imprisonment and fine are increased to no more than 3 years or $10,000, or both. Citation Section 305 of the'FD~C Act provides that, before any violation of the FD~C Act is reported for institution ~f a criminal proceeding, the person against whom such proceeding is contemplated be. given appropriate notice and an Opportunity to present. his views, either orally or in writing, with re- gard to such contemplated proceeding. To comply with this provision a Notice of hearing, often referred to as a cita- tion, is nailed to the alleged violator(s) and a date for response designated. INJUNCTION Section 302 of the FD~C Act provides for injunction to restrain violations of section 301. An injunction enjoins the firm or individual from performing or not performing some act. SEIZURE Section 304 of the FD~C Act provides that seizure prpceedings may be initiated against any food, drug, device, or cosmetic that is adulterated or misbranded when introduced into or while in interstate commerce. Recall A reca 1] is described as voluntary action by a firm to re,R)ve from the market those products that p)'esc'nt a threat to the safety or well-being of the consumer. Al though such 52 PAGENO="0659" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10575 APPENDIX III ~t ion is not provided for in the FD~C Act, FDA policy .t;ttcmcflts indicate that, over the years, recalls have been tw most effective method of removing from the marketplace ~su units of products found to be in violation of Section 301 of the FD~C Act. ~~ARNING LETTER Section 306 of the FD~C Act, under the caption "Report of Minor Violations" states that: "Nothing in this Act shall be construed as requiring the Secretary to report for prosecution, or for the institution of libel or injunction proceedings, minor violations of this Act whenever he believes that the public interest will be adequately served by a suitable written notice of warning." 53 PAGENO="0660" 10576 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY APPENDIX IV PRINCIPAL OFFICIAlS OF TIlE DLPARTMLNT OF hEALTh, EDUCATION, AND hFLFARE RESPONSIBLE FOR THE ACTIVITIES DISCUSSED IN THIS REPORT Tenure of office From To SECRETAPY OF hEALTH, EDUCATION, AND WELFARL. Caspar W. Weinberger Frank C. Carlucci (acting) Elliot L. Richardson Robert H. Finch Wilbur J. Cohen John W. Gardner ASSISTANT SECRETARY (HEALTH) (note a): Richard L. Seggel (acting) Merlin K. Duval, Jr. Roger 0. Egeberg Philip R. Lee COMMISSIONER, FOOD AND DRUG ADMINISTRATION: Charles C. Edwards Herbert L. Ley, Jr. James L. Goddard Feb. 1973 Jan. 1973 June 1970 Jan. 1969 Mar. 1968 Aug. 1965 Dec. 1972 July 1971 July 1969 Nov. 1965 Present Feb. 1973 Jan. 1973 June 1970 Jan. 1969 Mar. 1968 Present Dec. 1972 July 1971 Feb. 1969 Feb. 1970 Present July 1968 Dec. 1969 Jan. 1966 June 1968 aBefore November 1972 this position was designated as As- sistant Secretary for Health and Scientific Affairs 54 PAGENO="0661" How To Improve The Procurement And Supply Of Drugs In The Federal Government Department of Defense Veterans Administration Department of Health, Education, and Welfare Office of Management and BudgEt.. . COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10577 REPORT TO THE CONGRESS General Services Administration BY THE COMPTROLLER GENERAL OF THE UNITED STA TES DEC. 6,1973 PAGENO="0662" 10578 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY COMPTROLLER GENERAL OF THE UNITED STATES WASHINGTON. D.C. zo~q B-164031(2) To the Speaker of the House of Representatives and the President pro tempore of the Senate This is our report on how to improve the procurement and supply of drugs in the Federal Government. We made our review pursuant to the Budget and Account- ing Act, 1921 (31 U.S.C. 53), and the Accounting and Audit- ing Act of 1950 (31 U.S.C. 67). Copies of this report are being sent to the Director, Office of Management and Budget; the Secretaries of Health, Education, and Welfare and of the Department of Defense; the Administrator, General Services Administration; and the Administrator, Veterans Administration. Comptroller General of the United States PAGENO="0663" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10579 Contents DIGEST 1 CHAPTER INTRODUCTION 5 Past efforts to improve Federal manage- ment of medical material 7 2 GREATER COOPERATION AND COORDINATION WOULD RESULT IN SIGNIFICANT SAVINGS IN PROCURING DRUGS ., 8 DSA-VA supply agreement 8 Development of requirements data for procurement 9 Possible savings through joint procure- ment 9 Need to promote interagency transactions at the user level 10 Conclusions 12 Recommendations 13 Agency comments and GAO evaluation 14 3 BENEFITS OF SPECIFICATIONS AND CENTRAL MANAGEMENT IN PROCURING PRESCRIPTION DRUGS 17 Developing specifications 17 Availability and use of specifications 18 Coordination potential in developing specifications 20 Need to revise DOD policy for adopting items for central management 20 Conclusions .21 Recommendations 22 Agency comments and GAO evaluation 22 4 UNIFOR1~ REPORTING AND MORE EFFECTIVE USE OF RELATED REPORTS WOULD IMPROVE SELECTION OF ITEMS FOR CENTRAL MANAGEMENT 24 Military department reports 24 VA reports 25 Need for standardized coding system 27 Conclusions 28 Recommendations 28 Agency comments 29 PAGENO="0664" 10580 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 5 OVERLAPPING QUALITY ASSURANCE ACTIVITIES AND OBSTACLES TO ELIMINATING THEM 30 Differences in approving firms to supply drugs and in inspecting products 30 Obstacles to eliminating overlapping quality assurance activities 32 Conclusions 33 Recommendation 33 Agency comments 34 6 SCOPE OF REVIEW 35 APPENDIX I Comparison of highest price paid under definite-quantity contract by VA or DPSC with the FSS price for drugs, March 1968 to December 1969 37 II Letter dated August 14, 1973, from the Assistant Secretary of Defense (Health and Environment), DOD 40 III Letter dated September 18, 1973, from the Assistant Secretary, Comptroller, HEW 45 IV Letter dated July 25, 1973, from the Deputy Administrator, VA 46 V Letter dated July 6, 1973, from the Adminis- trator, GSA 49 VI Letter dated July 20, 1973, from Assistant Director, Management and Organization, 0MB 51 VII Principal VA and DOD officials responsible for the major portion of the direct pur- chases of pharmaceuticals for the Govern- ment 54 PAGENO="0665" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10581 ABBREVIATIONS DMMB Defense Medical Materiel Board DOD Department of Defense DPSC Defense Personnel Support Center DSA Defense Supply Agency FDA Food and Drug Administration FSS Federal Supply Schedule GSA N General Services Administration HEW Department of Health, Education, and Welfare 0MB Office of Management and Budget PHS Public Health Service VA Veterans Administration VAMC Veterans Administration Marketing Center PAGENO="0666" 10582 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY COMPTROLLER GENER4L `S REPORT TO THE CONGRESS DIGEST WHY THE REVIEW WAS MADE Because of congressional interest in,, and the magnitude of Federal expenditures for, drugs, GAO re- viewed procurement and supply prac- tices of agencies responsible for most of the Government's direct procurement of pharmaceuticals. Direct drug purchases exceeded $275 million in fiscal year 1972, and estimated indirect purchases for such programs as Medicare and Medicaid were more than double that amount. Principal agencies con- cerned were the Department of De- fense (DOD) and the Veterans Admin- istration (VA). FINDINGS AND CONCLUSIONS Greater cooperation and coordination in procuring drugs would result in Baviflgs. DOD and VA operate procurement and supply systems largely Independently of each other. Although they stock about 200 of the same drugs--frequently bought from the same suppliers--and sup- port numerous field installations throughout the United States, these two large agencies have had little HOW TO IMPROVE THE PROCUREMENT AND SUPPLY OF DRUGS IN THE FEDERAL GOVERNMENT Department of Defense Veterans Administration Department of Health, Education, and Welfare Office of Management and Budget General Services Administration B-l6403l(2) exchange of requirements data or coordination in their procurement. (See pp. 8 and 9.) GAO tests of drug purchases during a 3-year period showed that, in many cases, DOD and VA had paid the same manufacturer different prices for large quantities of the same drugs within the same general time frames. Since drug prices usually are lower for purchases In large quantities, substantial savings could be real- ized If VA and DOD were to procure drugs jointly. (See pp. 9 and 10.) DOD and VA procedures for developing their drug requirements are similar. To consolidate procurement the re- quirements of the two systems could be coordinated without undue diffi- culty. Medical facilities supported by the Defense Personnel Support Center may not order from VA central stocks drugs not stocked by that Center. Similarly, VA medical facilities may not order directly from that Center. Consequently, these facilities pur- chase drugs they cannot obtain from their own central supply organiza- tion from Federal Supply Schedule Teai Sheet. Upon removal, the report cover date should be noted hereon. PAGENO="0667" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10583 contracts or directly from vendors in small quantities at much higher prices. (See pp. 10 to 12 and app. I.) About $420,000 could have been saved in the 3-year period if DOD and VA medical facilities had acquired drugs from one another's central stocks. For example, from July 1970 to Decem- ber 1971, military hospitals pur- chased macrodantin directly from the manufacturer for $555,000 because it was not carried in DOD's central stocks. At that time VA was pur- chasing this drug for its central stock and paying about 48 percent of the amount paid by the hospitals. (See p. 11.) Uneconomical local procurements of drugs should be avoided whenever practicable. The availability of DOD and VA central stocks to all Federal field facilities should reduce the frequency of these pro- curements. Benefits of specifications and central management in procuring pharinaceutica ls Specifications defining drug product characteristics encourage competi- tive procurement and should reduce the cost of drugs. Use of these specifications has expanded. A revised DOD policy for approving drugs for central management would improve drug procurement, --From October 1970 to June 1972, the VA Marketing Center prepared and used 85 new specifications for procuring drugs. As a result it saved nearly $1 million annu- ally. (See pp. 19 and 20.) --Under its current policy DOD will not procure a drug by central procurement unless (1) data suf- ficient to develop specifications is available or (2) all three military services concur in desig- nating a single procurement source. GAO brought the macrodantin case to the attention of the Defense Medical Materiel Board. The Board's policy resulted in substantial excess costs being incurred because the drug was not bought centrally. Although the Board then authorized central manage- ment of the drug on a sole-source basis, it did not change its policy, (See pp. 11, 20, and 21.) Savings should continue if specifica- tions are developed for new drugs and those managed centrally for which no specifications have been prepared. DOD could also realize substantial savings if it would amend its policy for approving drugs. Since many drugs for which the De- fense Personnel Supply and VA Market- ing Centers prepare specifications are basically the same and since the number of these items should in- crease, duplicate effort could be avoided and technical talent could be better used if the Centers coop- erate in preparing specifications. (See p. 20.) Uniform reporting of drugs bought locally and more effective use of related reports would improve selection of items for central management Bulk purchases of drugs for central stocks are substantially lower priced than smaller purchases. The primary method of identifying drug items for central DOD and VA management is through review of reports from field 2 PAGENO="0668" 10584 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY cooperation in buying drugs and achieve substantial savings through large-volume buys. Field installa- tions should be authorized to ob- tain their drug requirements from any centralized Government supply source. (See pp. 13 and 14.) --The Secretary of Defense should revise DOD policy to insure that drugs will be obtained centrally wher~ever savings would result. (See p. 22.) --The Secretary of Defense and the ____________________________ Administrator, VA, should consider __________ jointly developing specifications which would satisfy all Federal agencies' requirements. (See p.22..) --The Secretary of Defense should (1) develop, for reporting local drug purchases, a uniform report- ing system aimed at requiring all military activities with individ- ual drug purchases exceeding speci- fied criteria to report their pur- chases and (2) require centrally managed drugs purchased from other ________________ than a central manager to be re- ported. (See p. 28.) --The Administrator, VA, should re- quire that VA's Central Office --The Director, Office of Management Supply Service (1) prepare lists and Budget (0MB), should lead in of summary and exception data from devel opi ng--wi th representati yes the i nformati on reported, (2) re- of the General Services Administra- quire local field stations to re- tion (GSA); DOD; VA; and the De- port their purchase data correctly partment of Health, Education, and and consistently, and (3) see that Welfare (HEW)--policies and proce- all vendors report detailed sales dures, including consolidating re- data when required by contracts. quirements, to increase agency (See p. 28 and 29.) activities of purchases made di- rectly from vendors. However: --The reporting systems of the mili- tary services for local purchases differ in many importantrespects, exclude certain purchases, and hamper the identification of drugs for potential central manage- ment (See pp 24 and 25 ..~The voluminous VA report contains no summary by drug items to facil- itate a review of purchase in- formation. (See p. 26.) --The Administrator, VA, should de- velop specifications for (1) all new drugs which VA decides to manage centrally and (2) centrally managed drugs for which it cur- rently has no specifications. (See p. 22.) Because of weaknesses in the report- ing systems, ~j~.Q~)D may be pro- curing many drugs locally, instead of centrally, atj~ç~~jjli9h prices. (See pp~24, 25, and 27.) Overlapping quality assurance activities DOD and VA have different systems for inspecting manufacturers' plants to insure that they qualify as sup- ply sources and that the drugs are of required quality. These inspec- tions are additional to those made by the Food and Drug Administration (FDA), which is responsible for checki ng manufacturi ng practices and conditions under which drugs are made in the United States. RECOMMENDATIONS To promote Federal agency coopera- tion in procuring drugs: Tear Sheet 3 PAGENO="0669" COMPETITIVE PROBLEMS IN THE DRUG INDUSPRY 10585 --The Secretary of Defense and the Administrator, VA, should consider using a standardized coding system, such as the National Drug Code, for identifying local purchases of drugs not having Federal stock numbers. (See.p. 29.) --The Secretaries of Defense and HEW and the VA Administrator should review the frequency and type of * inspections required and the re- lated changes needed to facilitate the transfer to FDA of all quality assurance responsibilities pertain- ing to purchases of drugs by Fed- eral agencies. (See pp. 33 and 34.) AGENCY COMMENTS AND UNRESOLVED ISSUES DOD, VA, GSA, and 0MB expressed in- terest in and general agreement with these aims. 0MB and VA pointed out the need to consider total economic costs in determining whether con- solidated procurement would be ec- onomical. This data has not been developed, and it may be a long time before it is available. Meanwhile, opportunities exist for effecting economies and Improvements within the present state of manage- ment data and operating methods, and GAO believes that action to take ad- vantage of the opportunities should not be delayed until such data be- comes available. DOD and VA expressed reservations as to whether FDA could provide the types of inspections they require on a timely basis. HEW stated that it would discuss with DOD and VA of- ficials the quality assurance require- ments, needed resources, and other pertinent matters. HEW also said that it would take necessary action to transfer to FDA all quality assur- ance activities if it found that this would be in the best interest of the Government. MATTERS FOR CONSIDERATION BY THE This report shows how Federal drug procurement, supply, and inspection functions could be improved and could save the Government money. 4 PAGENO="0670" PAGENO="0671" COMPETITIVE PROBI~EMS IN THE DRUG INDUSTRY 10587 CHAPTER 1 INTRODUCTION Government procurements of pharmaceuticalydirectly from drug companies are estimated to have exceeded $275 mu lion in fiscal year 1972. The two largest buyers were the Defense Supply Agency (DSA) and the Veterans Administra- tion (VA), but the Public Health Service (PHS) of the De~ partment of Health, Education, and Welfare (HEW) also made fairly large purchases The Defense Personnel Support Center (DPSC), Philadelphia- - a DSA activity- -buys and stocks drugs for the Department of Defense (DOD) and provides supply support to military medical field facilities, to other DOD compo- nents, and to Federal agencies under interagency support agreements. DPSC bought about $95 million worth of drugs during fiscal year 1972. The Defense Medical Materiel Board (DMMB), composed of the Surgeons General of the Army, Navy, and Air Force, in coordination with the military medical services and DPSC, adopts drugs for and deletes them from the DOD central sup- ply system The General Services Administration (GSA) is respon sible, under the Federal Property and Administrative Serv- ices Act of 1949 (40 U.S.C. 471), for procuring medical sup- plies for civil agencies. In 1960 GSA delegated to VA the buying and supplying of drugs, biologicals, and official reagents' for all civil agencies. The VA Marketing Center (VAMC), Hines, Illinois--an activity of the VA Central Office Supply Service in Washing- ton, D C is the central VA purchasing organization Dur ing fiscal year 1972 it bought about $37 million worth of drugs for central stock VAMC determines which drugs should be adopted for or deleted from the VA supply system subject to approval of VA's Central Office VA field stations requisition centrally stocked medical items from VA depots `Chemical substances used in testing drugs S 32 814 (Pt 24) 0 74 43 PAGENO="0672" 10588 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY VAMC also awards and administers Federal Supply Schedule (FSS) contracts- - those for supplying articles or services at stated prices for a given period- - in accordance with regulations prescribed by the GSA Administrator. PHS operates a central supply organization at Perry Point, Maryland, which purchases, stocks and issues drugs to all PHS hospitals, clinics, and outpatient offices. The following table summarizes operations of DPSC, VAMC, and PHS within their own agencies. Cost of Drug fiscal year inventory 1972 drug June 30, _______ ___________ _________ procurement 1971 (millions) DPSC 1,100 6 1,672 $95 VAMC 450 3 aj~~ 37 PHS 600 1 60 c9 aVA also sells centrally stocked drugs to other Government agencies and administers FSS contracts used by all agencies. In fiscal year 1972 VA sold about $3.5 million worth of depot drugs to other Govern- ment agencies. VA services about 270 additional medical facilities in this way. blncludes about $9 million worth stored in VA field stations. clncludes undetermined purchases from VA and DPSC. $59 b18 .5 Number Number of drugs of depots centrally where drugs man~g~4 are stocked Number of medical facilities ~pport ed The medical facilities supported by these agencies also buy drugs directly from manufactures, under FSS con- tracts, and from local vendors. During fiscal year 1971 total drug purchases under FSS contracts totaled about $64 million. The. cost of local purchases could not be ascertained because of limitations in the reporting by medi- cal facilities (See ch 4 ) PHS obtains a large part of its drug requirements from, or under contractual arrange- ments made by, VANC and DPSC .6 PAGENO="0673" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10589 PAST EFFORTS TO IMPROVE FEDERAL MANAGEMENT OF MEDICAL MATERIAL Between 1963 and 1971 DOD and GSA separately and with other interested Government agencies studied the possibility of a single agency's having Government-wide responsibility for managing various categories of supplies, including medi cal material which includes pharmaceuticals Late in 1964 GSA and DOD entered into an agreement governing the supply management functions and relationships between the two agencies. Essentially the agreement con- templated studies to develop a unified national supply sys- tem eliminating unnecessary duplication between military and civil agencies in five commodity areas, including medical material. The study on medical material concluded that further review and evaluation was necessary. Further review was completed during 1969 and 1970, and in February 1971 GSA and DOD approved a new agreement governing their supply management relationships Under the new agreement, several Federal stock classes were assigned to GSA and DSA for integrated management. The agreement provides for joint development of plans for assigning, identifying, and subsequently transferring necessary resources, funds, and personnel. Although medical material is included among the commodities assigned to DSA for integrated management that assignment has been deferred pending the outcome of still another study This new study, proposed in June 1971 by the Office of Management and Budget (0MB), recognized that, although sev- eral agencies purchase and use medical items and although studies were previously made, no decision regarding unified management or a national system was reached. 0MB believed that a further investigation should be undertaken before a final decision could be made on the best means of providing medical support to all Federal agencies. To reach a de- cision 0MB has set up a steering group composed of a repre sentative from 0MB and each of four agencies- VA, DSA, GSA, and HEW- to study the functions, organization, and management practices in all Federal agencies involved in medical sup ply. The study was started in January 1972; the 0MB repre- sentative chaired the study group. A report on this study was expected in June 1973 but has not yet been issued. 7 PAGENO="0674" 10590 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY CHAPTER 2 GREATER COOPERATION AND COORDINATION WOULD RESULT IN SIGNIFICANT SAVINGS IN PROCURING DRUGS Lack of coordination between the central buying agen- cies and certain restrictions on interagency transactions increase the costs of drugs to the ~overnment. In reviews of a limited number of the procurements during a 3-year pe- riod, we identified (1) costs of about $420,000 which could have been avoided through greater coordination between the procuring agencies and (2) price variances of $447,000 on Government purchases of the same items. A substantial por- tion of the differences could have been avoided and lower prices realized through greater coordination. Although DOl) and VA have established policies of using the most economical supply sources and have prescribed priori- ties of supply sources to be followed by their medical facili- ties, they operate their drug procurement and supply systems largely independently of each other. Further, there is little exchange of requirements data or coordination in procurement, even though the agencies centrally buy and stock about 200 of the same drugs and one or the other often obtains a lower price for the sane item. DSA-VA SUPPLY AGREEMENT DSA and VA have an agreement whereby VANC can purchase from PPSC medical material which DPSC manages centrally. The agreement establishes the procedures for requirements planning, material requisi~tioning and release, billing and collection, and other matters. VAMC does not use the agreement extensively; in fiscal year 1970 it purchased only about ~207,000 worth of drugs from DPSC. A drawback to more extensive use of the agreement is DPSC and VAMC surcharges which can total nearly 20 percent of the cost for drugs supplied to VA field stations. Also, the flow of drugs from DPSC depots or manufacturers to VAMC depots and then to VA field stations is cumbersome and results in extra handling and added transportation costs. 8 PAGENO="0675" COMPETITIVE PROBLE:MS IN THE DRUG INDUSPRY 10591 The agreement does not provide for DPSC to buy drugs from VAMC. We noted no procurements by DPSC from VANC. Military medical facilities may not obtain from VAMC stocks those drugs which DPSC does not carry, and VA facili- ties may not buy from DPSC those drugs that VAMC does not carry. In these cases these medical facilities have to buy such drugs under the FSS contracts or directly from vendors at much higher prices than those available from the central buyers. DEVELOPMENT OF REOUIREMENTS DATA FOR PROCUREMENT When either 1)PSC or VAMC approves a drug for central management, it procures an estimated quantity to cover antic- ipated needs for a limited period. Thereafter, quantities to be procured are based primarily on the quantity issued by depots since the last inventory replenishment. Computer reports are prepared periodically- -monthly by VAMC and quarterly by DPSC (more frequently if predetermined reorder points or critically low inventory positions are reached)-- and reviewed to determine items for which procurement or other supply action should be taken. Both agencies try to maintain inventory levels representing a number of months' use--in VAMC 5 to 7 months' supply and in DPSC about 9 months' supply--plus any special requirements. Quantities of each drug are purchased to replenish stocks and fill requisitions. DPSC includes unfilled orders in calculating its reorder points, but VAMC does not. Procedure~ for developing requirements under each sys- tem are quite similar, and it appears that, to consolidate procurement, requirements data under the systems could be coordinated without difficulty. POSSIBLE SAVINGS THROUGH JOINT PROCUREMENT DPSC and VAMC independently purchased, at different prices, many of the same drugs for central stock--in many cases from the same manufacturer and at about the same time. Several manufacturers have told us that large-volume purchases will generally reduce prices. 9 PAGENO="0676" 10592 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10 If VAMC and DPSC cooperated, they could forecast their annual drug requirements; consolidate their procurements, providing for any special needs for *such things as packaging, labeling, and inspection; and, under joint procurement ar- rangements, take advantage of the most economical methods of contracting and supply sources Apparently, if their re quirements had been consolidated and bought under joint pro curement arrangements, VA and DPSC could have realized signifi cant savings For example, procurement records for 43 drugs showed that, during fiscal year~ 1970 and 1971, DPSC and VAMC paid different prices for the same drugs purchased within 30 days of each other. These variances totaled about $246,000, and each agency obtained the lower price in about half the cases. We furnished information on these cases to DPSC and VAMC officials so that they could determine the reasons for the differences Some vendors made voluntary refunds totaling $15,000 to DPSC because of pricing mistakes they had made during negotiations Other vendors claimed that the differ ences were due to the type of contract negotiated, the vary ing quantities ordered, the frequency of orders, special labeling and packaging requirements, or additional quality control and testing requirements. One vendor suggested to DPSC that it and VAMC combine their buys to obtain lower prices Because of the possibility of long tern storage and shipments to countries with extreme climates, DPSC generally requires more protective wrapping for the drugs it buys than other buyers do Despite this, DPSC has often paid identical or lower prices than VAMC for the sane drugs purchased in similar or smaller quantities in the same period. We also examined the sales records of four manufacturers. DPSC and VAMC paid two of them $91,000 additional because of different prices.charged for the same items. NEED TO PROMOTE INTERAGENCY TRANSACTIONS KfTHE USER LEVEL If drugs stocked by DPSC and VAMC could be made avail able to medical facilities of the system which does not stock such drugs, substantial savings could b~ realized. As shown PAGENO="0677" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10593 below, savings would result from eliminating buys through FSS contracts and buys directly from vendors at prices which, almost invariably, are substantially higher than those paid by central managers. (See app. I.) The military departments have not arranged for their activities to purchase from VAMC depots drugs not centrally managed by DPSC Also, VAMC has negotiated several special contracts which military and, in some cases, civil agencies cannot use The prices under these contracts are lower than those for the same drugs sold under FSS contracts VA field stations may not requisition directly from DPSC. Effects on medical facilities When individual medical facilities cannot obtain their required drugs from central stocks because of interagency re- strictions or impediments, they purchase them through FSS contracts or directly from vendors in relatively small quan tities and usually at much higher prices Following are ex amples of the additional costs incurred in such circum stances 1. From July 1970 to December 1971, military hospitals purchased macrodantin through FSS contracts for $555,000 because DPSC did not stock it. At this time, VAMC was purchasing the item for central stock and paying about 48 percent of the FSS price. After allowing for VANC's 8-percent surcharge, the hospi tals would have saved about $270,000 by purchasing the item from VANC, which had procured it centrally in bulk quantities After we brought this situation to DMMB's attention, it arranged for DPSC to cen trally procure, stock, and manage this drug, and the prices negotiated were comparable to those ne gotiated by VAMC 2. Sales records of purchases totaling about $6.1 mil- lion made from four vendors during a recent 2-year period showed that the Government incurred over $214,000 in excess costs because military and VA medical facilities bought many drugs directly from them or under FSS contracts at prices higher than those paid by DPSC and VAMC for the same drugs for central stock Fven after allowing for DPSC and VA PAGENO="0678" The need to promote interagency transactions extends to Government medical organizations other than those of VA and DOD. Our review at the four vendors' plants identified price variances of $110,000 because PHS and the National In- stitutes of Health, HEW, purchased drugs directly from these vendors at prices higher than those paid by DPSC and VAMC for the same items. Under the existing GSA and DOD agreement, DOD issued a catalog, effective October 1, 1972, of selected items man- aged by its Defense Supply Centers for the use of civil agen- cies. About 600 drugs are listed which any Government agency can order from the cognizant Defense Supply Centers. The catalog states that other DSA-managed items included in sup- ply catalogs may also be requisitioned so long as a Federal stock number is provided and appropriate requisitioning pro- cedures are followed. This is a step toward fostering interagency transactions. However, use of the catalog is not mandatory; consequently, the agencies will not necessarily use it as an alternative to more expensive local purchases. CONCLUS IONS Substantial savings and other advantages could result from an effective joInt effort--including planning, consoli- dating procurement, and centrally procuring and supplying drugs--among DPSC, VAMC, and other agencies that buy drugs. Coordination should also enable these agencies to improve inventory management and better serve medical facilities Further, availability--under an interagency agreement--of the 12 10594 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY surcharges- - amounting to 10-1/2 percent and 8 percent, respectively- -about $150,000 would have been saved had the military and VA medical facili- ties purchased directly through DPSC or VA central supply points. For example, during calendar year 1970, VA field stations paid $46.07 for an 8-ounce jar of Aristocort Cream under the FSS contract. DPSC stocked this item and could have supplied it for $39.85 a jar, including all surcharges (18-1/2 per- cent), a savings of $6.22 a jar. Total savings on this item alone during calendar year 1970 would have amounted to over $4,600. PAGENO="0679" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10595 VAMC and DPSC central supply stocks to all field facilities should reduce costly buys through FSS contracts and buys di rectly from vendors Because central supply organizations supply drugs to other Federal agencies, as well as to the medical facilities they support, the overall benefits to the Government could be considerable To facilitate coordination, DPSC, VAMC, and other af- fected agencies may have to adjust their methods of deter- mining requirements to insure that all work together with compatible supply levels and frequencies of review of inven tory status Contracts for procuring common drugs should in dude each agency's special requirements and delivery needs 0MB should resolve the question of the type of joint arrangements that should be made for buying the common items and should make the solution a matter of record, in a DPSC VANC agreement or in appropriate regulations, by clearly set- ting forth the arrangements and how they should be imple- mented. The objectives of the arrangements should include (1) the elimination of avoidable duplication between the DPSC and VANC procurement and supply systems and those of other Federal agencies that buy, store, and supply drugs and (2) a management plan permitting DOD and VA medical facili ties to order from each other's central stocks when this would be beneficial Such an agreement could be patterned after the existing DSA-VA agreement, which prescribes necessary funding and material-requisitioning arrangements. To obtain maximum benefit from interagency transactions, the agreement should provide that interagency purchases be mandatory, except in emergencies Procurement consolidation would be a good first step toward eliminating duplication in procurement This, and making the supply services available to all agencies, should also improve supply support for medical activities RECOMMENDATIONS We recommend that the Director, 0MB, lead in develop- ing -with GSA, DOD, HEW, and VA representatives policies and procedures to provide greater coordination and coopera tion among Federal agencies in buying drugs These policies and procedures should include agreements between the parties 13 PAGENO="0680" 10596 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY or appropriate regulations providing for (1) periodic determinations of the joint requirements of the agencies--and others they support--for individual drugs and (2) joint pro- curement arrangements so that the most advantageous prices can be negotiated with suppliers for bulk quantities, with specified quantities delivered during a specified period (or other bases) direct to agency facilities where the drugs will be used or to Government storage and redistribution depots Within this framework, provision could be made for spe cial requirements of the agencies, such as the special pack aging and specifications for longer shelf life sometimes re- quired for items for military use. Field installations should be authorized, except in emergencies or other justi- fiable circumstances, to obtain their drug requirements from any centralized Government supply source. AGENCY COMMENTS AND GAO EVALUATION DOD cited its current agreements with VA, GSA, and other civilian agencies as evidence of its interest in foster ing interagency cooperation and coordination in the best in terest of the Government. DOD stated that: "Pending final resolution of this matter DOD is willing to discuss further arrangements to pre- vent purchases of an item by one agency when the item is available from stock of the other agency, and to obtain the most advantageous prices in the purchase of pharmaceutical drugs." In its comments VA stated that: "We agree with the major recommendation that there should be greater cooperation and coordi- nation among Federal agencies buying drugs. Since the actual items involved will be determined by the nature of the programs served and will reflect the differences in mission, the degree of stand- ardization will be limited by those factors. How- ever, this should not limit other advantages to the Government which would stem from a viable pro gram of interchange of procurement and supply techniques, ideas, and innovations 14 PAGENO="0681" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10597 In commenting on this report, 0MB stated that it generally agreed that significant improvements could be made and economies could be achieved in procuring, inspecting, storing, and supplying drugs. However, 0MB questioned whether mere consolidation of DOD and VA drug requirements and joint procurement would insure economies. Further, both 0MB and VA pointed out that the total economic costs of pro curing, storing, and issuing drugs under central procurement and local procurement systems and their relative cost effec tiveness should be determined and considered before arriving at a decision to centrally buy and stock drug items 0MB also pointed out that quantity was only one of the factors which influenced drug prices We agree with the concept of relative cost effectiveness based on total economic costs, but "~ * * the Government has failed to develop the data and techniques needed to measure the `total economic cost' of fulfilling a Government need." Further, it appears that substantial time may ~lapse before such management data for selecting the most cost effective supply system for drugs will become available We also agree with the Commission on Government Procurement's view that local procurement should be used whenever it is found to be economically feasible. Since total economic cost data is not expected to be available in the near future, we believe the Government should use those opportunities which, with current management data and methods of operating, seem to indicate economies and improvements. We are advocating the joint procurement of consolidated requirements, which does not necessarily include central storage and reissue The decision whether or not to cen trally stock drug items should be made on an item by item basis after considering all cost factors. Deliveries could be made direct to users, as is often done under centrally procured requirements-type contracts, thus obviating storage and related costs. "Report of the Commission on Government Procurement," vol. 3 (Dec. 1972), p. 65. 15 PAGENO="0682" 10598 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY We agree w±th 0MB that quantity is not the only factor that affects the prices the Government pays for drugs. However, we believe that ordinarily it is a major factor, as evidenced by the differences in prices paid for the same drugs bought in relatively small quantities under FSS con- tracts or local procurements and those paid by a central pro- curing organization for large definite quantity contracts. (See app. I.) Our analysis of the prices paid for 68 drug items showed that the FSS prices for 29 items were from 5 to 366 percent higher than the definite-quantity-contract price. Also, in a study (B-16403l(2), Nov. 22, 1972) comparing prices paid for the same drug items by DPSC and VA with those paid by nonprofit organizations that buy drugs on a group basis for private hospitals, we found that the Government paid lower prices for 28 of the 31 leading drug items which these organizations and the Government bought. The Govern- ment bought substantially larger quantities of 25 of these drug items. We believe this undoubtedly had some effect on the prices paid. 0MB stated that the preferable approach would be to combine the best aspects of each existing procurement system into one system. We do not disagree; however, as stated on page 7, the possibility of a single system has been under consideration since 1963 without result. We believe that, until a viable single system is designed, actions in line with our recommendations would improve the existing drug pro- curement and supply operations. 16 PAGENO="0683" COMPETITIVE PROBLEMS IN THE DRTJG INDUSTRY 10599 CHAPTER 3 BENEFITS OF SPECIFICATIONS AND CENTRAL MANAGEMENT IN PROCURING DRUGS Efficient procurement and management of drugs depend largely on obtaining effective competition and sound poli- cies for approving items that warrant central management. VA has improved its drug procurement by increasing the num- ber of specifications available for procurement personnel to use in obtaining competition for VA's requirements. DOD could save more in procuring drugs by revising its policy for adopting items for central management. DEVELOPING SPECIFICATIONS VAMC and DPSC prepare drug specifications for procure- ment personnel to use in advising potential suppliers of the characteristics that drugs must meet and to generate compe- tition for the Government's requirements. In many cases, however, due to patents or regulatory restrictions on the products the Government requires, procurement is limited to a single source. However, our comparison of central procurements of 13 drugs by competition based on specifications and on a sole-source basis demonstrates the advantages of seeking broad competition. During a 2-year period lower average prices were obtained on 11 of these items when they were obtained competitively, and we estimated the Government would have saved about $338,700 on these 11 items had they been bought competitively in all instances. The quantities purchased by each method were different. This probably ac- counts for some of the price variation, but the primary reason seemed to be competition. Preparing specifications can be difficult. For in- stance, the data for writing them is ordinarily obtainable only from manufacturers. Sometimes the manufacturers fur- nish incomplete information or none at all, especially for proprietary items, because they recognize that disseminating complete and accurate data in specifications will probably result in greater competition for Government, and possibly commercial, requirements for their drugs. 17 PAGENO="0684" 10600 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY A further difficulty concerns data for formulating a drug. Even when the proper ingredients and quantities to be used are known, a product having a therapeutic effect different from that desired may be manufactured. Thus, because of inadequate or incomplete data or the existence of patents, specifications are issued for many drugs that the Government buys which do not increase compe- tition. Frequently, only one source can provide what the Government wants. The degree of competition obtained in procuring drugs is less than that obtained for many other Government supply items. In fiscal year 1970 only about 7 percent of VANC and DPSC dollar procurements for central stocks were made under formal advertised procedures. Much of the balance was pro- cured under contracts negotiated with the sole source of supply or under contracts negotiated and awarded after proposals were solicited. The primary reasons for the lack of competition are the large number of patented drugs and th.e Food and Drug Adminis- tration's (FDA's) requirements for approving drugs for manu- facture. Some manufacturers have difficulty meeting these requirements because of the technical requirements and costs involved. AVAILABILITY AND USE OF SPECIFICATIONS DPSC generally will not approve a drug for central management unless (1) data sufficient to develop a competi- tive procurement specification is available or (2) all three military services concur in designating a single procurement source. Consequently DPSC has prepared specifications for nearly all the 1,100 drugs it manages. Only 1 percent of these items are intentionally bought noncompetitively from preselected sources. Although DPSC attempts to buy competitively virtually all the drugs it manages, it has been successful only for about 51 percent of 1,100 items and the degree of competi- tion on many of them is quite limited. The remainder, about 535 items, is supplied by single sources. FDA regulations, which disallow marketing without approved new drug applica- tions or antibiotic certificates, or patents preclude or 18 PAGENO="0685" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10601 restrict competition for 386 of these. But no apparent laws or regulations preclude interested firms from bidding for the remaining 149 drugs. Thus, although DPSC has developed specifications for virtually all the 1,100 items, it has obtained competition for only about half of them. The specifications on the remainder, although not necessarily generating competition, do define what is wanted and minimize misunderstanding and contractor failure to satisfy Government requirements. DOD considers this benefit of specifications to be significant. It further believes that specifications should be developed in restricted competitive procurement so that DOD will be ready to go into the competitive market when a patent expires, when it legally buys around a patent, or when additional manufacturers conform to the regulations for manufacturing a drug. Before October 1970 VA generally bought its required drugs on a brand-name basis and did not develop specifica- tions for drugs it bought on a sole-source basis. At that time about 70 percent of the drugs VA centrally stocked were designated for sole-source procurement to obtain specified brand-name drugs. Also, a large percentage of FSS contracts were for making manufacturers' product lines avail- able to the Government at less than market prices. However, these contracts were negotiated without specifications or competition. S At that time also, VA ordinarily developed specifica- tions only when the demand for a generic drug was sufficient to warrant central management or for drugs for which no patents existed or the patents had expired. Generally this meant that procurement was made from preselected sources which obviated the need for specifications. In October 1970, however, VA began to develop specifica- tions for 110 of the 450 drugs it managed centrally, for which it considered competition feasible. This effort has primarily consisted of obtaining industry comments on DPSC specifications which VA has rewritten as proposed VA speci- fications. After suggested revisions were considered, the specifications were written in final form. L9 PAGENO="0686" 10602 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY On June 21, 1972, VA officials testified before the Subcommittee on Monopoly, Senate Select Committee on Small Business, concerning VA efforts to expand competitive pro- curement of its centrally managed drugs. VA indicated that it had developed specifications for 85 of 133 items it had determined suitable for competitive procurement and that specificauons for 34 of the items were being developed. VA officials stated that 14 of the 133 items were being deleted and that, although it was too early to establish the total potential savings, annual savings of almost $940,000 had resulted from using the 85 specifications that had been issued as of June 1972. COORDINATION POTENTIAL IN DEVELOPING SPECIFICATIONS Several Government agencies buy many of the same drugs, and, as new drugs are developed and adopted for use, this number should increase. As.previously indicated, specifica- tions are extremely beneficial *in obtaining competition and drugs that conform to required quality standards. VA and DPSC are not required to coordinate in preparing specifications for identical or nearly identical drugs they both manage centrally. This situation leaves potential for duplicate effort in preparing specifications (1) for new items for which neither organization has yet prepared speci- fications and (2) for those items currently managed centrally by VAMC without specifications if VAMC decides it can, and should, issue specifications for such items and if DOD also decides to use and centrally manage the same items. When identical and near-identical items are adopted for central management, DPSC and VAMC, and possibly other agen- cies, should jointly develop specifications for such items to avoid possible duplicate effort and to make the best possible use of the available talent to do this important work. NEED TO REVISE DOD POLICY FOR ADOPTING ITEMS~FOR CENTRAL MANAGEMENT In considering an item for central management, DMMB requests the manufacturer to furnish information on the item's essential characteristics. DPSC evaluates this 20 PAGENO="0687" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10603 information to determine whether it can prepare a specification. DMMB's policy provides that an item not be adopted for central management unless (1) data suffi- cient to develop acceptable specificatiorl!s is available or (2) all three military services concur in designating a single procurement source. Substantial costs were incurred because of this policy. The macrodantin case (see p. 11) illustrates the effect of this policy. In June 1969 the Air Force proposed this drug for central management. The Navy concurred, but the Army did not because it considered satisfactory a similar drug which was centrally managed. The brand-name manufacturer of the proposed items refused to provide techni- cal data, and, because specifications could not be developed, the Air Force and Navy withdrew their recommendations. Without concurrence by all three services, DMMB did not adopt the item for central management on a sole-source basis. Consequently, military activities continued to purchase it under the FSS contract, and during the 18 months from July 1, 1970, through December 31, 1971, they purchased $555,000 worth of the drug. During this time VAMC was purchasing the drug for its central stocks at less than half the FSS price. Had the military adopted the item for central management, military medical activities could have saved about $291,000, assuming the purchases could have been made at the same price VA paid. We brought this matter to DMMB's attention in March 1971, and after DMMB concurred it authorized DPSC in July 1971 to centrally manage and procure the item on a sole- source basis. The first contract was awarded in December 1971. CONCLUSIONS Substantial savings resulted from VA's expanded use of specifications in procuring its centrally managed items. Savings should continue if specifications are developed to the extent practicable and beneficial on new items and on those centrally managed items for which specifications have not been prepared. DOD could also realize substantial sav- ings by revising its policy for adopting items for central management. Further, since many drugs Federal agencies use 21 32-814 (Pt. 24) 0 - 74 - 44 PAGENO="0688" 10604 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY for which DOD and VA prepare specifications are basically the same and since' the number of such items should increase, VA and DOD could cooperate in preparing specifications for such drugs. Such cooperation would avoid duplicate effort and best use technical talent in preparing specifications RECOMMENDATI ONS We recommend that the VA Administrator arrange, as soon as practicable and beneficial, for specifications to be developed for (1) all new items which VA decides to manage centrally and (2) centrally managed items for which it currently has no specifications. Also, since cooperation and coordination can bevalu- able in developing specifications, we further recommend that the Secretary of Defense and the Administrator consider jointly developing specifications which will satisfy all agencies' requirements. The effort should consider the requirements of all Federal agencies which procure drugs so that specifications will be issued, when possible, for those items for which the aggregate quantity required justifies central management. We recommend that the Secretary of Defense revise DOD policy to insure that drugs will be adopted for central management whenever savings will result. Controls on sole- source drugs will be necessary to (1) insure that the sole- source designation is not misused, (2) insure that specifica tions are developed as soon as possible, and (3) encourage, when appropriate, the use of lower cost alternative drugs AGENCY COMMENTS AND GAO EVALUATION VA stated that it considered joint development or mutual use of specifications an important element of the increased agency cooperation advocated in our report. It did not, however, comment on the need to develop specifications for some of the items it currently manages centtally and for new items it selects to manage centrally in the future DOD stated that DMMB would be specifically asked to coordinate the development of specifications with DSA and VA and to recommend appropriate action providing for the "~ * * joint coordination/preparation of medical material having common usage within DOD and VA." 22 PAGENO="0689" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10605 Regarding the recommendation that DOD revise its policy for adopting items for central management, DOD stated that, in addition to monetary savings, decisions were based on such factors as drug efficacy and storage requirements. However, it said that it would review the criteria and the standardization procedure used for adopting items for central management. Although DOD policy provides for central procurement when savings apparently will result, the policy can be nullified by the requirement that the three military serv ices concur in a sole-source designation We believe that DOD should evaluate this requirement in its review of the standardization and procedures. 23 PAGENO="0690" 10606 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY CHAPTER 4 UNIFORM REPORTING AND MORE EFFECTIVE USE OF RELATED REPORTS WOULD IMPROVE SELECTION OF ITEMS FOR CENTRAL MANAGEMENT The primary method of identifying drugs for possible DPSC and VAMC central management is reviewing field activi- ties' reports of purchases from FSS contracts and local suppliers. Each military service has a different system for reporting medical items purchased locally, and neither DMMB nor DPSC reviews these reports. VAMC reports local procurements, but its voluminous reports contain many errors and no summary. VAMC could use these reports more effec- tively. MILITARY DEPARTMENT REPORTS The following table summarizes pertinent aspects of the systems the military services use to obtain data from their medical facilities on procuring medical items, includ- ing drugs. Number of medical Frequency facilities of ~p~orting ~pprting Medical items required Army Semi- Those on which expendi- annually tures totaled $1,000 or more. Navy 93 Quarterly Those accounting for the highest expenditures during the reporting period. The number ranges from 10 to 50, depending on the re- porting facility, but at least 50 percent must be drugs. Air Force 26 Semi- Those representing the annually top 15 items purchased with locally assigned stock numbers Air Force 70 Semi~ Those listed in a spe- annually cial catalog of non- centrally stocked med- ical material 24 PAGENO="0691" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10607 These reports are sent to field offices which organize the data and consolidate the reports for each service, but the field offices do not review and evaluate the items re- ported. The offices of the respective Surgeons General that select and recommend items to DMMB for centralized management make such reviews and evaluations. No single authority reviewed all of these reports at the time of our review, but a DOD official advised us that, after we ex- amined this situation, arrangements were made for all the military departments to send their consolidated reports to DMMB for its review and use in evaluating new items for stand- ardi zat ion. The Army and Na'vy Surgeons General have no written definitive criteria for evaluating and selecting drugs to be recommended for central management. The Army, however, does have a written procedure stating that reports of local purchases will be reviewed to identify items used in suffi- cient quantity to warrant central management, but what con- stitutes such a quantity is not defined. The Air Force has definitive written criteria for identifying drugs as candidates for central management. Generally the A~r Force considers recommending items pur- chased by three or more facilities which have aggregate semiannual expenditures exceeding $1,000. The Army's and the Navy's lack of these definitive criteria can result in failure to identify drugs purchased by their medical facilities in sufficient quantities to warrant DMMB evaluation. For example, Army and Navy medical organizations may purchase a drug exceeding $1,000 in value and the item may not be considered for central management; whereas, in similar circumstances, the Air Force normally considers the item for central management. Also, reports do not include purchases of centrally managed items from sources other than the central manager. The services could use this information to monitor field activities to insure that they were purchasing such drug items from DPSC as pre~ scribed by service regulations. VA REPORTS Under authority GSA delegated in 1960, VA awards and administers FSS contracts and obtains semiannual reports PAGENO="0692" 10608 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY from vendors on the volume of drugs they have sold Federal agencies under (1) advertised contracts and (2) negotiated FSS contracts VA requires its field stations to report all local purchases of drugs to the VA Data Processing Center, Austin, Texas, which lists the data in the quarterly Drug Acquisi- tion Report. This report is sent to VAMC for review and evaluation to determine whether the field stations are (1) purchasing locally drugs which could be supplied more eco- nomically if they were available in depot stocks or (2) pur- chasing in ways VAMC previously designated, such as from depot stocks, through'special contracts providing for de- centralized procurement and through FSS contracts. VA's basic criterion for considering whether a drug should be centrally stocked is that local purchases should amount to $10,000 or more a year. All items that qualify under the criterion are not assured of being considered. In part, this is due to (1) the sheer volume of the Drug Acquisition Report--approximately 120,000 transactions listed on 4,500 pages, (2) the lack of item summaries and exception data, and (3) errors and inconsistencies due to VA field stations' failure to adhere to prescribed report- ing requirements. One individual reviews the report. To test the report's effectiveness, we had to devise a special computer program to isolate and summarize purchase data on potential candidates for central management. This test covered the reports for September 1970 through May 1971 and revealed 273 items which were not being centrally stocked although they satisfied the local purchase crite- rion. VA officials explained that 219 of the items were inappropriate for central stocking because some needed re- frigeration, some were blood derivatives, and different in- travenous systems required various types and sizes of in- travenous solutions. VA officials said that, of the re- maining 54 items, 24 were already being studied for central stocking and 30 would be considered. In September 1972 VA officials informed us that, of the 30 items, 8 had not been selected for central stocking for such reasons as declining purchases, insufficient price break for bulk procurement, and the delay in waiting for FDA efficacy determinations. Of the remaining items, 9 were still being studied and 13 had been or were being centrally 26 PAGENO="0693" COMPETITIVE PROBLEMS IN THE DRTJG INDUSTRY 10609 stocked. Of the 13 items, 5 had been centrally purchased; VA forcasted savings of almost $36,000 for fiscal year 1973 on these items. FSS contracts for pharmaceuticals are let in two sec tions and are labeled section A and section B contracts Section A contracts are generally used for generic items and section B contracts for brand-name items Section A contracts ordinarily are let for individual drugs, but sec- tion B contracts generally are let for the complete product lines that drug manufacturers produce. The reports to be submitted by FSS contractors on sec- tion A contracts are useful to VA in considering items for central management because VA needs information on indi- vidual items in determining whether the volume of procure ment of single items warrants consideration for central management The reports on section B contracts are gen- érally not usable because they relate to a complete product line. Some contractors were not furnishing the reports of orders received, contrary to contract requirements. To the extent the reports are not received, the volume of purchases Federal agencies make is understated; therefore, drugs that qualify may not be identified or considered for central procurement. Also, the lack of usable data submitted in reports on a product-line basis under section B contracts could result in failure to identify items with potential for substantial savings through central management. NEED FOR STANDARDIZED CODING SYSTEM Under current reporting practices of both VA and mili- tary medical facilities, reports may include data for drugs under identification methods when an item does not have a Federal stock number. For such items the manufacturer's number, the hospital's number, or other types of identifica tion are used. In such a situation, purchase data on the same item may possibly be reported in two or more ways and the fact that the same drug is involved may be overlooked. If such purchase data is not consolidated, potential items for cen- tral management may be bypassed. A national drug code PAGENO="0694" 10610 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY number has been assigned to every drug, and these numbers could be used when a Federal supply number has not been assigned. CONCLUSIONS Boththe military services' and VA's reporting systems for local purchases have weaknesses. Specifically, the lack of uniform reporting, the lack of evaluation criteria, the failure to evaluate many items that qualify for considera- tion for central nanagement, and omissions from the local purchase reports suggest that many items that should be centrally managed are not and are therefore being procured locally at unnecessarily high prices. To implement its stated policy of buying from the most economical source, DOD should establish a uniform reporting system for local drug purchases, including centralized re- view and evaluation of the reports of all the services, probably by DPSC. Candidates for central procurement should be recommended to DNMB. RECOMMENDATIONS We therefore recommend that the Secretary of Defense have DMMB: ``Develop, for reporting local drug purchases, a uni- form system aimed at requiring all activities which made specified total dollar purchases of individual drugs during the reporting period to report their purchases. - -Require that centrally managed drugs purchased from other than the central manager be reported. Although the basic concept of VA's Drug Acquisition Report is sound, it could be more effectively used. We therefore recommend that the Administrator, VA,~require (1) the `Central Office Supply Service to prepare lists of sum- mary and ~xception data from the information reported and (2) local field stations to report their purchase data correctly and consistently. Further, we recommend that the Administrator see that vendors report their sales under FSS contracts on an individual-item basis when this is required by such contracts and, when not required, negotiate such 28 PAGENO="0695" OOMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10611 requirements into future FSS contracts when reasonable and practicable. We also recommend that DOD and VA, to improve report- ing, consider using a standardized coding system, such as the National Drug Code, for identifying, in their reports of local purchases, those drugs which do not have Federal stock numbers. This would avoid the possibility under cur- rent procedures of either the manufacturer's or possibly some other identification number's being used for a partic- ular drug. In this case data relating to identical items may not be recognized, and as a result, potential items for central management may be overlooked. AGENCY COMMENTS DOD stated that all military departments now submit consolidated reports to DMMB for its review and use in eval- uating new items for standardization action. DOD stated also that one of its objectives was a uni- form reporting system incorporating the points in our recom- mendation. However, it considers near-term achievement im- practicable and too costly because of the differing systems. DOD further stated that action would be taken to insure that each military department followed standard reporting criteria and that, as soon as practicable and cost effective, a uniform reporting system for all local purchases of phar- maceuticals would be implemented. VA acknowledged the need for the recommended improve- ments in its reporting system on field station drug pur- chases but did not comment on our recommendation to use a standardized drug coding system. DOD stated that it had been considering using the National Drug Code. There has been coordination among the military departments, DSA, and FDA. The intent is to implement either the National Drug Code or a comparable system which will facilitate consolida- tion of purchase data on pharmaceuticals. 29 PAGENO="0696" 10612 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY CHAPTER 5 OVERLAPPING QUALITY ASSURANCE ACTIVITIES AND OBSTACLES TO ELIMINATING THEM FDA monitors the manufacturing practices and conditions under which drugs are made by inspecting the plants of drug firms, reviewing their quality assurance controls, and test ing product samples. Under the Food, Drug, and Cosmetic Act (21 U S C 301), antibiotics, insulin, and certain veterinary drugs may not be marketed until FDA has tested each batch for strength, quality, and purity and has issued individual certificates of approval to the manufacturer For all other drugs, FDA periodically tests products through surveillance sampling programs to insure that the items meet the purity, strength, and identity standards provided in the act DPSC and VAMC also operate quality assurance programs to insure that the drugs they buy are acceptable in purity, safety, strength, and other considerations. These programs differ both in qualifying manufacturers as supply sources for drugs and in procedures for insuring that the respective supply systems accept only quality products. In these circumstances, two or all three agencies could be conducting quality assurance inspections simultaneously at the same plant DIFFERENCES IN APPROVING FIRMS TO SUPPLY DRUGS AND IN INSPECTING PRODUCTS Qualification of suppliers The DPSC quality assurance program includes evaluating tne contractor's ability to supply each required drug This is done by surveying manufacturing plants and by testing product samples before awarding contracts Preaward plant surveys and preaward samples are gen erally required when a firm's ability to manufacture a spe cific drug is unknown or a doubt exists about the firm's quality control housekeeping procedures, or financial posi tion. A manufacturer may be disqualified for failing to satisfy certain requirements of quality control, housekeep- ing, acceptability of subcontractors, plant capacity, or 30. PAGENO="0697" COMPETITIVE PROBLEMS IN T~IE DRUG INDUSTRY 10613 financial condition, but the disqualification pertains only for the specific procurement for which the manufacturer failed to meet DPSC requirements. A satisfactory plant in- spection or demonstrated ability to manufacture a specific item is not a prerequisite for being placed on the the DPSC bidders list. Unlike DPSC, VAMC requires that a plant survey or in- spection be made of each prospective supplier before it can be placed on the list of approved suppliers for VA contracts, including FSS contracts. Reinspections are made approximately every 5 years, unless required sooner because of customer complaints or other problems. DPSC and VANC inspection procedures use standards for manufacturing and processing drugs patterned on the Good Manufacturing Practices published by FDA. However, although VA and FDA standards are essentially the same, DPSC standards are more specific. For example, FDA and VA personnel standards require that persons who direct themanufacture and control of a drug be adequate in number, education, training, and experience to insure that the drug has the safety, identity, strength, quality, and purity that it pur- ports to possess. DPSC standards go further and set specific personn~el requirements, qualifications, and responsibili- ties. The following table summarizes the results, during fiscal years 1969 through 1971, of preaward surveys by DPSC and plant inspections by VANC to qualify suppliers for their bidders list. DPSC VAMC Number Percent 1~ümber Percent Qualified 238 53 265 76 Disqualified 213 47 84 24 451 100 349 100 DPSC disqualifies more manufacturers partially because of its policy of surveying individual products, which may result in disqualifying a firm only for one item being pur- chased. 31 PAGENO="0698" 10614 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Product inspections After a contract has been awarded, DSA, through the Defense Contract Administration Services, monitors the qual- ity of products being bought by inspecting the contractor's plant during the contract period. This quality assurance concept is~ designed to determine, before supplies are ac- cepted, that the contractor has fully complied with con- tractual requirements for product quality. Detailed instructions give procedures for the Quality Assurance Representatives to follow in inspecting products. Basically, they must review the contractor's manufacturing and testing procedures and verify that control of manufactur- ing processes is adequate and that deficiencies are cor- rected. The inspections are performed on a lot-by-lot basis using statistically selected samples. Deficiencies are reported to the contractor. During fiscal year 1971, 67 de- ficiency reports were issued; copies were sent to FDA. In contrast to the DSA product inspection system, VAMC requires that items purchased for depot stockage be in- spected after receipt in the depot but before Government ac- ceptance. FDA performs these inspections on a cost- reimbursable basis, and they are required for each lot of generic drugs purchased but for only one lot of each brand- name product purchased during the year. Items purchased through FSS contracts are not subjected to any Government inspections other than those normally performed by FDA under the Food, Drug, and Cosin~tic Act. During fiscal years 1969 through 1971, FDA tested for VAMC 544 brand-name drugs and 1,882 generic lots of drugs furnished by commercial suppliers. FDA rejected 78 lots (all generic drugs), or 3.2 percent of all lots inspected. OBSTACLES TO ELIMINATING OVERLAPPING ~~LITY ASSURANCE ACTIVITIES We discussed the overlapping DOD, VA, and FDA quality assurance efforts with responsible officials. The officials indicated that they were prepared to consider a centralized quality assurance program under FDA direction. 32 PAGENO="0699" OO'MPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10615 Officials of DOD and VA have reservations, however, and stated that it would be imperative that such a program (1) be at least as effective as their present programs and (2) fully recognize the agencies' special requirements; for example, shelf life and packaging of items for military use. The FDA Commissioner testified on January 19, 1971, be- fore the Subcommittee on Monopoly, Senate Select Committee on Small Business, that drug inspection by three Federal agencies was duplicative and that the resources used by other agencies for drug inspection should be allocated to FDA. CONCLUS IONS The present DSA, VA, and FDA drug inspection systems are not as efficient as they could be, because several Federal agencies survey the plants and inspect the products of the same vendors and sometimes the same items. Also the agencies differ in their degrees of inspection for both plants and products. DSA makes preaward surveys and in-plant product inspec- tions for the majority of the drugs bought for military use- - those items that are centrally managed. However, military hospitals make substantial procurements commercially, either under FSS contracts or from local vendors, of which no in- spections are made, other than those by FDA. VA augments FDA inspection to a lesser degree than DSA does and still seems to obtain satisfactory results. RECOMMENDATI ON Advantages should stem from having a single agency re- sponsible for quality assurance activities pertaining to purchases of drugs by Federal agencies. Since FDA has statutory responsibilities pertaining to the manufacture of drugs, it seems to be the logical choice for this cen- tralized responsibility. The additional responsibility should facilitate the performance of its other responsibilities relating to drug manufacturers. Accordingly, we recommended that the Secretary of HEW; the Secretary of Defense; and the Administrator, VA, review the frequency and type of inspections required and the re- lated staffing, organization, and administration changes PAGENO="0700" 10616 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY that would be needed to facilitate the transfer to FDA of all quality assurance responsibilities pertaining to pur- chases of drugs by Federal agencies AGENCY COMMENTS DOD doubted FDA's capability to perform the types of inspections it requires. VA stated that it would use the service when FDA was capable of performing inspections on a timely basis. HEW stated that it would discuss the requirements, resources needed, and pertinent issues for carrying out our recominenda tion with the interested agencies, and, if it found that it would be in the best interests of the Government, it would take the necessary actions to arrange for the transfer to FDA of all quality assurance responsibilities pertaining to purchases of drugs by Federal agencies. We believe there is a demonstrated need for serious con- sideration of transferring drug procurement quality assur- ance inspection activities to FDA Although discussions of requirements, resources needed, and pertinent issues are a first and important step, we believe that such discussions should be held with the objective of exploring alternatives that, if proven feasible, would facilitate the transfer to FDA. 34 PAGENO="0701" COMPETITIVE PROBLEMS IN THE DRuG INDUSTRY 10617 CHAPTER 6 SCOPE OF REVIEW We limited our review primarily to pharmaceuticals and did not include medical equipment and other supplies We Reviewed the direct procurement of drugs by Federal agencies. - -Compared selected aspects of the procurement and sup- ply systems of DSA and VA-- the two major buyers and suppliers of drugs to Federal medical facilities. - Evaluated DSA and VA procurement philosophies and practices and determined the extent of interagency coordination and its effect on drug prices paid - -Reviewed laws and other authorities which control or influence the manufacture, inspection, and sale of drugs. --Reviewed pertinent policies, procedures, and practices and talked with representatives of organizations involved directly or indirectly in Federal drug pro- curement. ~-Examined records and transactions concerning the mat- ters reviewed we visited or with whose officials we DNMB, Washington, D.C. Department of the Army: Office of the Surgeon General, Washington, D.C. U.S. Army Medical Materiel Agency, Phoenixville, Pa. Walson Army Hospital, Fort Dix, N J Department of the Navy Bureau of Medicine and Surgery, Washington, D C Bureau of Medicine and Surgery, Field Branch, Philadelphia, Pa. U.S. Naval Hospital, Philadelphia, Pa. 35 The organizations talked were: DOD: PAGENO="0702" 10618 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Department of the Air Force: Office of the Surgeon General, Washington, D.C. Medical Materiel Field Office, Phoenixville, Pa. Malcolm Grow United States Air Force Medical Center, Andrews Air Force Base, Washington, D.C. DSA: Headquarters, Cameron Station, Alexandria, Va. Defense Personnel Support Center, Philadelphia, Pa. VA: Department of Medicine and Surgery, Washington, D.C. VAMC, Hines, Ill. Veterans Administration Hospital, Washington, D.C. Veterans Administration Hospital, Hines, Ill. OTHER ORGANIZATIONS: Committee on National Formulary, WashIngton, D.C. (prepares the National Formulary drug compendia) Committee of Revision, The United States Pharmaco- peial Convention, Inc., Washington, D.C. (prepares the U.S. Pharmacopeial drug compendia) HEW: Social Security Administration, Washington, D.C. FDA, Rockville, Md. GSA: Federal Supply Service Arlington, Va. 0MB, Washington, D.C. We also visited (1) four pharmaceutical firms and exam- ined their records of sales to Federal agencies, to evaluate the agencies' procurement practices, and (2) three private hospitals, to discuss their drug selection, drug procurement, and quality control procedures. 36 PAGENO="0703" COMPETITIVE PROBI~EMS IN THE DRUG INDUSTRY 10619 APPENDIX I COMPARISON OP IICHEST PRICE lAll) UNDER DEFINITE-QUANTITY CONTRACT BY VA OR NPSC WITh THE FSS PRICE P08 ORIICS, MARCH 1968 TO DECEMBER 1969 Psyllium hydrophilic mucilloid with dextrose 6505-050-4567 Carisoprodol tablets 6505-062-4833 Isoprotererol hydrochloride (HCL) and phenylephrine 6505-071-7861 Chiorthalidone tablets 6505-074-9914 Quinidine sulfate tablets 650S-138-7400 Tripelennamine HCL tablets 6S05-148-9000 Chloramphenicol capsules 6505-160-0495 Prednisolone tablets 6505-559-6734 Phenazopyridine HCL tablets 6SOS-582-5344 Sodium diphenylhydantoin capsules 6505-584-2338 Pentaerythritol tetranitrate tablets 6SOS- S84-4 297 Pentaerythritol tetranitrate tablets 6505-597-7341 Potassium phenoxymethyl penicillin tablets 6500-656-1612 Sodium aminobenzoate, sodium salicylate and ascorbic acid 6505-660-1746 Pefltaerythritol tetranitrate tablets 6505-680-2326 Nitrofurantoin tablets 6505-681-1972 Etholeptazine citrate and aspirin tablets 6505-681-7901 Propoxyphene HCL capsules 6505-725-6992 Phenelzine sulfate tablets 650 5-753-9702 Theophylline ephedrine HCL and pheno- barbital tablets 6S05-7S3-4 766 Povidone - iodine solution 6 505-754-0374 Aonpicillin capsules 6005-770-8343 Methocarbamol and aspirin tablets 650 S-17S-5708 Propoxyphene HCL, aspirin, caffeine and phenacetin 650S- 7 84-49 76 Chlorpropamide tablets 6505-817-2279 Itnipramine HCL tablets 6505-853-4799 Erythromyein estalate Capsules 6505-890-1388 Sodium phosphate and sodium citrate solution Definite-quantity contract Buying Highest PSi - Difference ~ ~e ~ Amount Percent VA S 0.87 $ 2.22 $ 1.35 155 DPSC 3.79 6.60 2.81 61 DPSC 2.10 2.64 *541 26 DPSC 4.19 4.38 .19 S DPSC 1.96 2.50 .54 28 VA 6,32 22.41 16.09 254 VA 5.41 8.03 2.62 48 DPSC 5.69 10.00 4.31 77 VA 32.16 39.84 7.68 24 VA 2.89 4.65 1.16 61 VA 9.05 12.45 3.40 38 VA 4.72 8.30 3.58 76 DPSC 1.60 7.46 5.86 366 VA 7.49 8.81 1.32 17 DPSC 15.36 VA 75.S4 DPSC 14.71 DPSC 6.45 VA 3.11 VA 8.61 DPSC 9.86 DPSC S.40 DPSC 18.47 DPSC 12.75 DPSC 12.39 DPSC 4.47 ~ DPSC 3.13 DPSC .20 24.90 9.54 62 180.00 104.46 138 20.50 5.79 39 13.62 7.17 111 3.98 .87 28 23.74 14.13 141 9.90 .04 - 10.45 1.05 93 21.00 2.03 14 20.37 16.22 128 17.20 400 39 1.81 .3.1 9 14.98 1I.c5 390 311 .114 7 ~3Z-814 (Pt 24) 0 - 74 - 45 PAGENO="0704" 10620 OOMPETITIVE PROBLEMS IN THE DRUG INDUSTRY APPENDIX I Sodium coliatimethate for injection 6505-890-1582 Carisoprodol tablets 6505-904-3256 Dexbrompheniramine maleate and pseudo- ephedrine su1fat~ tablets 6505-926-9019 Propoxyphene HCL capsules 650 5-458-2364 Nystatin, gramicidine, neomycin sulfate end triaaeinolone 6505-961-5504 Butalbital, aspirin, caffeine and phenacetin tablets 6505-962-4375 Propoxyphene HCL, aspirin, caffeine and phenacetin 650 5-967-8735 Isoproterenol sulfate inhalation, * nonaqueous 6505-023-6481 Guanethidine sulfate tablets 6505-062-4829 Triaccinolone acetonide cream 6505-064-3940 Glyceryl guaiacolate syrup 6505-064-8765 Isosorbide dinitrate tablets 6505- 072-9346 Glyceryl guaiacolate syrup 6505-079-6269 Nitrofurazone ointment 6505-130-1960 Neomycin sulfate powder 6505-299-9527 Dibucaine ointment 6505-299-9535 Test paper and color chart 6505-559-6859 Diphenbydrainine HCL capsules 6505-582-4868 Propantheline bromide tablets Promethazine HCL injection 650 5-584-3280 Perphenazine tablets 6505-584-3669 Acetone test tablets 6505-616-7861 Chlorpheniramine ealeate tablets 650 5-655-8460 Senna pad extract tablets 6505-656-1468 Triancinolone acetonide cream 6505-682-8194 Odeglumine diatrizoate injection 6505-734-0658 Sinethicone aluminum hydroxide gel 6505-735-1742 Isosorbide dinitrate tablets 6505-761-1506 Dipyridamole tablets 6505-764-9014 Acetylcysteine solution 6505-767-9111 Isosorbide dinitrpte tablets 6505-781-3111 Oxyphenbutazone tablets 6505-786-8747 Bisacodyl tablets 6505-880-9034 Definite-quantity contract Buying Highest FSS Difference g~ Amount ~ VA 3,51 $ 5.23 $ 1.72 50 VA 4,65 6.40 1,75 37 DPSC 3.82 6,00 2.18 57 DPSC 12,38 27.79 15.41 124 VA 1.70 2,05 .35 21 DPSC 8.58 16,40 7.82 91 DPSC 6.82 15.92 9.10 133 DPSC 1.23 1.68 .45 37 DPSC 6.23 7.84 1.61 26 DPSC 39.20 48.00 8.80 23 VA .35 .53 .18 51 DPSC 2.03 2,80 .77 38 VA 11.99 15.04 3.05 25 VA 2,28 5.10 2.82 124 VA .48 .90 .42 88 VA .22 .52 .3~ 136 DPSC .81 1,10 .29 36 VA 2.94 7.22 4.28 146 DPSC 14.19 36.IYO 21.90 155 DPSC .63 1.00 * .37 59 DPSC 17.15 27.87 10.72 63 DPSC 1.48 1.67 .19 13 VA 7.02 27.90 26.88 297 DPSC 1,27 170 .43 34 DPSC .86 1.52 .66 183 VA 1.31 1.81 .50 38 DPSC .80 110 .30 37 DPSC 11.21 DPSC 42.93 DPSC 4.38 DPSC 6.04 DpSc 42.29 DPSC 21.98 15.46 4.29 38 49,68 6.75 16 5.60 1.22 28 8.33 2.29 38 49.68 7.39 17 25.92 3.94 19 PAGENO="0705" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10621 APPENDIX I Definite-quantity contract Buying Highest PSS Difference agency price price Amount Percent Isoxsuprine HCL tablets DPSC $ 29.99 $ 42.91 $ 12.92 43 6505-890-1321 Flurandrenalone cream VA .98 1.25 .27 28 6505-890-1554 Dioctyl calcium sulfosuccinate capsules VA 32.65 44.80 12.15 37 6505-890-1627 Fluocinolone acetonide cream VA 24.00 30.60 6.60 28 6505-905-9041 Sodium ampicillin for injection DPSC .37 1.10 .73 197 650 5-946-4700 Methenamine mandelate tablets DPSC 3.48 4.65 1.17 34 6505-982-5429 Fluocinolone acetonide cream DPSC 1.10 1.52 .42 38 6505-985-7110 - $~ãL.~ $hQfiL3l $i~L~ ~` Total 39 PAGENO="0706" 10622 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY APPENDIX II ASSISTAN1~ SECRETARY OF DEFENSE WASHINGTON. 0. C. 20301 HEALTH AND 14 AUG 1973 ENVIRONMENT Mr. Gregory J. Ahart Director, Manpower and Welfare Division United States General Accounting Office Washington, D. C, 20548 Dear Mr. Ahart: On behalf of the Secretary of Defense we have carefully reviewed the findings, conclusions, and recommendations contained in the GAO Draft Report, dated 1 June 1973, "Opportunities to Improve the Procurement and Supply of Pharmaceutical Drugs" (OSD Case #3636). The Department of Defense subscribes to the principles set forth in your report that greater cooperation and coordination between the Veterans Administration and the Department of Defense in the develop- ment of drug requirements data for procurement purposes, development of common specifications and the possibility of joint procurements for centrally managed common drug items could result in savings to the government. The following discussion provides specific comments on each of the report's recommendation. DEVELOP POLICIES AND PROCEDURES DESIGNED TO PROVIDE GREATER COORDINATION AND COOPERATION AMONG FEDERAL AGENCIES BUYING DRUGS As stated in your report, interagency agreements between DoD and civil agencies are now in being which provide for supply support to civil agencies to include centrally managed drug items. Specifically, the following documents are currently in existence relative to inter- agency support of medical materiel: (a) DoD/GSA Agreement, February 1971, subject: Agreement Between the Department of Defense and the General Services Administration Governing Supply Management Relationships Under the National Supply System; (b) Federal Supply Catalog (C2510 to 9999CA), effective 1 October 1972, a catalog provided by DSA for use by Federal civil agencies which PAGENO="0707" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10623 APPENDIX II includes items in Federal Supply Group 65 (Medical Materiel) that are available to civil agencies: (c) DSA/VA Interagency Supply Support Agreement, 4 November 1968, subject: Medical and Non perishable Subsistence, which provides for DSA support of VA with drug items centrally managed by DPSC. These are evidence of DoD interest in fostering interagency cooperation and coordination in the best interests of the government. Your report notes that the 1971 DoD/GSA Agreement specifically assigns Government-wide support for medical materiel, which includes pharmaceuticals, to DoD and that the Agreement pertaining to this commodity has not been implemented pending the outcome of a study being led by the Office of Management and Budget. Pending final resolution of this matter DoD is willing to discuss further arrangements to prevent purchases of an item by one agency when the item is available from stock of the other agency, and to obtain the most advantageous prices in the purchase of pharmaceutical drugs. DEVELOP SPECIFICATIONS ON ITEMS CENTRALLY PROC URED BY VA DoD will assist the VA in any manner deemed appropriate. The DSA currently provides VA a copy of all specifications developed on pharmaceuticals. REVISE DOD POLICY ON ADOPTING ITEMS FOR CENTRAL PROCUREMENT DoD policy provides for central procurement whenever the expected volume/demand indicates a savings will result. There are other factors such as generic equivalency, drug efficacy, expiration periods, and special storage requirements which influence the adoption of pharmaceuticals and must be considered in arriving at the final decision to catalog a pharmaceutical item. The Defense Mçdical Materiel Board (DMMB) is currently receiving and reviewing consolidated reports on local purchases from the military depart- ments. The Board evaluates this data along with the above mentioned factors in finalizing a decision on standardization. DoD will again review the criteria used and the standardization procedure for cataloging pharmaceuticals to insure compliance with the intent of the basic policy. PAGENO="0708" 10624 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY APPENDIX II DEVELOP JOINT DOD/VA SPECIFICATIONS A joint effort between the VA, GSA, DOD and other federal agencies to use common specifications for drug procurement has been imple- mented on a limited degree through the Intra-Governmental Professional Advisory Council on Drugs and Devices (IPADD) and the exchange of DoD developed specifications with VA, While this effort results in a separate specification for each agency, the technical data contained in the specification is normally the same for all agencies. Also, a mechanism is currently available to assist in the development of common Federal Specifications. DSM 4120. 3M, Defense Standardi- zation Manual, January 1972, prescribes policies and procedures for the preparation of specifications within DoD. In part, this reference states that "Federal sppcifications shall be developed for materials, products or services, used or for potential use by two or more Federal Agencies, at least one of which is an agency other than DoD. The common policy of the GSA and DoD provides a basis for determining whether a standardization document is eligible for inclusion in the Federal series. DoD policy governs military participation in the preparation and coordination of Federal specifications and standards, and prohibits the issuance of a military document which duplicates a suitable Federal document. The Defense Medical Materiel Board has the function to maintain liaison and coordinate with the Defense Supply Agency and other government agencies in all profe s sional -technical matters involving medical materiel. This activity will be specifically tasked to coordinate this matter with DSA and VA and recommend appropriate policy/agreements which will provide for the joint coordination/ preparation of specifications for medical materiel having common usage within DoD and VA. ESTABLISH A UNIFORM REPORTING SYSTEM FOR LOCAL PURCHASES A uniform reporting system incorporating the points contained in your report is a DoD objective. To completely achieve this objective in the near term is considered impractical and too costly since the automated supply systems of the military departments differ and many of the smaller medical supply activities are operating a manual system. Currently the USAF reports all purchases while the U. S. Army and U. S. Navy report high dollar value purchases. As a result 42 PAGENO="0709" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10625 APPENDIX II of the DMMB action in April 1972 all `military departments submit consolidated reports to the Board for review and their use in evaluating new items for standardization action. Continued action will be taken to insure standard reporting criteria are followed by each military department and that as soon as it is considered practical and cost effective a uniform reporting system for all local purchases of pharmaceuticals will be implemented. IMPROVE THE VA's DRUG ACQUISITION REPORT No comment. CONSIDER UTILIZING A STANDARDIZED CODING SYSTEM The utilization of the National Drug Code (NDC) for identifying all purchases of non-cataloged pharmaceuticals has been and is under consideration. Coordination with the military departments, Defense Supply Agency and the Food and Drug Administration has been effected and as a result a future meeting is being planned. Several system and other procedural matters remain to be resolved, however, the intent is to implement either the NDC system or a comparable system which will facilitate the consolidation of purchase data for pharmaceuticals. ASSUMPTION OF THE PHARMACEUTICAL PROCUREMENT INSPECTION FUNCTION BY HEW Reservation is expressed regarding your recommendation that the FDA assume quality assurance responsibilities pertaining to purchases of pharmaceuticals by Federal agencies. The basic questions as to whether this consolidation would result in savings or whether the FDA would be able to meet the unique A:SPR and operational require- ment of DoD have not been resolved. The report does notprovide a sufficiently detailed analysis for decision concerning these matters, therefore, suggest that the recommendation be modified to require a further examination of the feasibility of consolidating this function. The fundamental concerns of DoD are responsiveness to the needs of the military departments and the maintenance of an effective quality assurance program. DoD cannot concur in any course of action which would fragment the current integrated procurement 43 PAGENO="0710" 10626 COMPETITIVE PROBL~EMS IN THE DRUG INDUSTRY APPENDIX II and quality assurance system or detract from the high quality inspection standards currently maintained. We appreciate the objectivity and the many helpful comments regarding means to improve the procurement and supply of pharmaceuticals contained in the draft report. George 3. Ha~s Major General, MC USA Principal Deputy .4 PAGENO="0711" COMPETITIVE PROBLEMS IN THE DRIJG INDUSTRY 10627 APPENDIX III DEPARTMENT OF HEALTH, EDUCATION, AND WELFAJ~F~ OFFICE OF THE SECRETARY WASHINGTON, D.C. 20201 SEP 18 1973 Mr. Gregory J. Ahart Director, Manpower and Welfare Division General Accounting Office Washington, D.C. 20548 Dear Mr. Ahart: The Secretary asked that I respond to your letter of June 1 which requested our views and comments on your draft report to the Congress entitled, `Opportunities to Improve the Procure- ment and Supply of Pharmaceutical Drugs". As you may know, Department officials met with General Accounting Office repre~ sentatives to discuss the report; in particular, the conclusions reached that the Food and Drug Administration of this Department should assume quality assurance responsibilities pertaining to purchases of pharmaceutical drugs by Federal agemcies~ This will confirm for your records that we agreed to discuss this matter with other interested agencies (Defense and Veterar~s Ad- ministration). At such time we will determine their particular requirements; discuss the resources needed; and other like pertinent issues. If, based on these discussions we find it will be in the best interest of the Government to do so, we will take such actions as are necessary to arrange for transfer to FDA all quality assur- ance responsibilities pertaining to purchases of pharmaceutical drugs by Federal agencies. The opportunity to review this report in draft form LIas been much appreciated. Sincerely yours, ja~s~&a~ll Assistant Secretary, Comptroller 45 PAGENO="0712" 10628 OOMPETITIVE PROBL~EMS IN THE DRUG INDUSTRY APPENDIX IV * VETERANS ADMINISTRATION OFFICE OF THE ADMINISTRATOR OF VETERANS AFFAIRS WASHINGTON, D.C. 20420 JULY 25 1973 Mr. Frank N. Mikus Assistant Director, Manpower and Welfare Division (801) U. S. General Accounting Office Room 137, Lafayette Building 811 Vermont Avenue, N * W. Washington, I). C. 20J420 Dear Mr. Mikus: We have reviewed your draft report entitled "Opportunities to Improve the Procurement and Supply of Pharmaceutical Drugs - Department of Defense and Veterans Administration" (Code 88016). We agree with the major recommendation that there should be greater cooperation and coordi- nation among Federal agencies buying drugs. Since the actual items involved will be determined by the nature of the programs served and Will reflect the differences in mission, the degree of standardization will be limited by those factors. However, this should not limit other advantages to the Government which would stem from a viable program of interchange of procurement and supply techniques, ideas, and innovations. The report rests heavily on the premise that consolidation of the agencies' requirements will result in larger quantities purchased at lower prices, and that a mandatory requirement for use of control stocks would be economical. However, the need should be stressed to consider all costs involved in procure- ment decisions. Savings would not result until the centralized agency sources prove to (1) be economic in terms of their location and number, (2) price their items to recover all costs to the Government, and (3) be competitive with alternate sources of supply. It is possible that more consideration would need to be given to shelf-life, special packaging, and labeling for respective agencies before blanket standards could be set and before specific savings could be ascertained. 46 PAGENO="0713" cOMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10629 APPENDIX IV Mr. Frank M. Mikus Assistant Director, Manpower and Welfare Division U.. S. General Accounting Office Also, the coordination of ~tock requirements.. and monitoring of stock levels could offset some of the advantages of inventory consolidation. [2211 With regard to the recommendation on page 3'~b, we consider the joint development of specifications or the. mutual use of existing specifications as an important element of the increased interagency. coopera~ tion advocated by this report. We acknowledge the need for improvement of our reporting system on field station acquisitions, as recommended on page kO.t281With reference to. the recoin- mendation on page 501,'31the VA will utilize such service exclusively when the Food and Drug Administration is capable of performing inspections on a timely basis and furnishing us with copies of its reports.. With. refez~ence to. the leadershi.p role of the Office. of Management and Budget, we have been informed that all 0MB personnel involved: with supply programs and management were recently transferred to the General Services Administration. This reorgani- zation could have a marked effect on future .inter- agency coordination efforts. [611 On page 13 of the re~rt,. 182 is listed as the. number of medical facilities supported by VA; apparently, no credit has been given to our serving other civil agencies, under the GSA assignment, which would raise the VA total to approximately `~ 50. Also, on the same page, under the "Drug Inventory" entry, it should be noted that VA's central stocks are turned four times a year, instead of twice as is the case with the Defense Personnel Support Center. [7] 1 On page l&& .of the~report, reference is made to a review which preceded a February 1971. agree- ment between the General Services Administration and the Department of Defense. Having understood, from involvement in studies previous to that date, that we, as a party. of interest, would be involved in any future determinations, we were surprised by the February 1 971 PAGENO="0714" 10630 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY APPENDIX IV Mr. Frank 1'1. Mikus Assistant Director, Manpower and Welfare Division U. S. General Accounting Office action. We have not been able to determine what studies were made and would appreciate a copy of the rev.iew. Thank you for the opportunity to. review this draft. If you have any questions concerning our comments my staff will be available. Sincerely, FRED B. RHODES Deputy. Administrator GAO note 1: Numbers in brackets refer to page numbers in 48 PAGENO="0715" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10631 APPENDIX `V UNITED STATES OF AMERICA GENERAL. SERVICES ADMINISTRATION WASHINGTON, D.C. 25406 JUL 6 1973 Honorable Elmer B. Staats Comptroller General of the United States General Accounting Office Washington, D.C. 20548 Dear Mr. Staats: Thank you for the opportunity to comment on the draft report to the Congress on "Opportunities to Improve the Procurement and Supply of Pharmaceutical Drugs." The draft report cites efforts to improve the management of medical material made by the General Services Administration (GSA) and other Federal agencies in the past and in conjunction with the recent Office of Management and Budget study of medical and nonperishable sub- sistence commodities. In addition, the General Accounting Office report should note that GSA currently is working closely with the Veterans Administration (VA)~on a project to improve the present method of procuring drugs. A coordinated study has been made to identify high dollar volume items and to utilize this information to improve the method of con- tracting. We are also addressing ourselves to the feasibility of developing a continuing system for accumulating demand data to support continued efforts to improve our contracts. The collection of data on high dollar volume drug items required developing coding techniques for item identification. The preliminary experience and information gained oIl this study should be useful Keep Freedom in Tour Future With U.S. Savings Bonds 49 PAGENO="0716" 10632 COMPETITIVE PROBLE:MS IN THE DRUG INDUSTRY APPENDIX V Although we have assigned the procurement responsibility for drugs and pharmaceuticals to the VA, we do retain broad responsibility for management of this class and are very much concerned about the resolution of the problems outlined in your report. Sincerely, Art~'.U~' r. Ai~t~ ~rjtor 50 PAGENO="0717" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10633 APPENDIX VI EXECUTIVE OFFICE OF THE PRESPDENT OFFICE OF MANAGEMENT AND BUDGET WASHINGTON, D.C. 20503 JUL 20 1973 Mr. Gregory J. Ahart, Director United States General Accounting Office Washington, D.C.1 20548 Dear Mr. Ahart: This is in response to your letter to the Director requesting our comments on the GAO draft report entitled `Opportunity to Improve the Procurement and Supply of Pharmaceutical Drugs." We are in general agreement with the thrust of the draft report that significant improvements can be made and econ- omies achieved in the procurement, inspection, storage and supply of pharmaceutical drugs. While we have no objection to the recommendation in the draft report that the Office of Management and Budget take the leadership in an inter- agency effort to effect these improvements, it should be pointed out that such an effort has been underway for some time under 0MB leadership, and we expect the results to provide the basis for decisive action with respect to the procurement and supply of medical material and non- perishable subsistance as well as drugs and pharmaceuticals. The conclusions and recommendations contained in the draft report with respect to the consolidation of requirements, single procurement, central storage and inventory manage- ment seem more far-reaching than a careful examination of the facts may warrant. Specifically, we question whether there is adequate support for the conclusion that mere consolidation of requirements would assure more economical procurement. The analysis in the draft report of the reasons for different prices received by DOD and VA for similar purchases does not indicate that the lower price in each instance was related to a larger quantity procurement. 51 PAGENO="0718" 10634 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY APPENDIX VI If, as the facts seem to indicate, the lower prices were due to other causes, then the act of consolidating procure- ment would be not only an inappropriate response to the problem but would also remove the advantage of the current practice which permits the measuring of relative cost effect- iveness of the DOD and VA supply support operations through comparative examination of the competing systems. We do not question that some savings can normally be achieved by con- solidating requirements, but we believe the procurement system or technique used in many instances can have even greater impact on the total economic cost of the procure- ment. It would seem preferable to seek the best from each of the procurement systems and only after these are identi- fied for incorporation in a single system should we recommend consolidated procurement with reasonable assurance that it would be an appropriate and timely step. In addition to the above, we would also suggest that further consideration be given to portions of the draft report which encourage central storage and issue as the means of providing supply support. By omitting any recognition of the expenses of the Government that should be weighed in comparing costs of local purchase versus central storage and issue the draft report would give undue emphasis to the latter method of support to the detriment of total cost effectiveness. The omission in the draft report is one that commonly occurs in Government according to the report of the Commission on Government Procurement. In Part D, Chapter 6 of the Commis- sion's report which deals with total economic costs, the Commission states its finding that the practice throughout the Government in the procurement of commercial products was to focus on the price paid the supplier rather than on the total cost of satisfying a requirement. The result, according to the Commission, is that"the Government has failed to develop the data and techniques needed to measure the total economic cost of fulfilling a Government need." Generally, these costs should include the price of the product, procurement personnel costs, warehousing, distribution, obsolescence, taxes foregone, and costs arising through use or consumption. 52 PAGENO="0719" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10635 APPENDIX VI Failure of the draft report to give consideration to these factors results in a stronger preference for central storage and issue than may be justified. As a minimum, it would seem desira~ble for the draft report to refer to the results of the Commission's extensive study in this problem area. We appreciate this opportunity to comment on the draft GAO report. If you would like to discuss this matter with 0MB staff or if there are any questions regarding the above comments, please contact Mr. James D. Currie, 395-5193. Sincerely, ~J2i~y ctliei_- Dudley C. Mecum Assistant Director Management and Organization 53 32-814 (Pt. 24) 0 - 74 - 46 PAGENO="0720" 10636 OOMPETITIVE PROBLEMS IN THE DRUG INDUSTRY APPENDIX VII PRINCIPAL VA AND DOD OFFICIALS RESPONSIBLE FOR THE MAJOR PORTION OF THE DIRECT PURCHASES OF PHARMACEUTICALS FOR THE GOVERNMENT VETERANS ADMINISTRATION Tenure of office From To ADMINISTRATOR OF VETERANS AFFAIRS: Donald E. Johnson June 1969 DIRECTOR, SUPPLY SERVICE: Donald P. Whitworth Jan. 1965 DEPARTMENT OF DEFENSE SECRETARY OF DEFENSE: James R. Schlesinger Elliot L. Richardson Melvin R. Laird ASSISTANT SECRETARY OF DEFENSE (HEALTH AND ENVIRONMENT) (note a): Dr. Richard S. Wilbur Dr. Lewis H. Rousselot DIRECTOR, DEFENSE SUPPLY AGENCY: Lt. Gen. Wallace H. Robinson, Jr., USMC Lt. Gen. Earl C. Hedlund, USAF COMMANDING OFFICER, DEFENSE PER~ SONNEL SUPPORT CENTER: Maj. Gen. Abraham J. / Dreiseszun, USAF Maj. Gen. Robert E. Hails, USAF Col. Donald J. Bussey, USAF Brig. Gen. William M. Mantz, USAF Aug. 1971 Present Jan. 1968 July 1971 Aug. 1971 Present July 1967 Aug. 1971 July 1972 Present Aug. June 1971 1971 July 1972 Aug. 1971 Nov. 1967 May 1971 Present Present July Jan. Jan. 1973 Present 1973 July 1973 1969 Jan. 1973 54 PAGENO="0721" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10637 APPENDIX VII Tenure of office From To DEPARTMENT OF THE ARMY SECRETARY OF THE ARMY: Robert F. Froehlke July 1971 Present Stanley R. Resor July 1965 June 1971 SURGEON GENERAL: Lt. Gen. H. B. Jennings, Jr. Oct. 1969 Present DEPARTMENT OF THE NAVY SECRETARY OF THE NAVY: John H. Chafee Jan. 1969 May 1972 John W. Warner May 1972 Present SURGEON GENERAL OF THE NAVY: Vice Adin. George M. Davis Feb. 1969 Feb. 1973 Vice Adm. D. L. Cüstis Feb. 1973 Present DEPARTMENT OF THE AIR FORCE SECRETARY OF THE AIR FORCE: Robert C. Seamens, *Jr. Jan. 1969 Present SURGEON GENRAL: Lt~ Gen. Robert A, Patterson Aug. 1972 Present Lt. Gen. Alonzo A. Towner May 1970 July 1972 Lt. Gen. K. E. Pletcher Dec. 1967 Apr. 1970 a This position was formerly entitled "Deputy Assistant Sec- retary of Defense (Health and Medical)" under the Assist- an.t Secretary of Defense (Manpower and Reserve Affairs). The change was effective in June 1970. Dr. Rousselot occupied the position under both titles. 55 PAGENO="0722" 10638 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY EXHIBITS PROVIDED BY THE FOOD AND DRUG ADMINISTRATION STATEMENT BY ALEXANDER M. SCHMIDT, M.D. COMMISSIONER FOOD AND `DRUG ADMINISTRATION PUBLIC HEALTH SERVICE DEPARTMENT OF HEALTH, `EDUCATION, AND WELFARE BEFORE THE SUBCOMMITTEE ON MONOPOLY * SELECT COMMITTEE ON SMALL BUSINESS UNITED STATES SENATE FEBRUARY 20, 1974 PAGENO="0723" COMPETITIVE PROBLEMS IN THE DEtrG INDUSTRY 10639 Mr. Chairman: We are pleased to have this opportunity to appear this morning to discuss Food and Drug Administration drug quality assurance programs and the effect these programs may have on other Government agencies involved in drug procurement and reimbursement. FDA QUALITY ASSURANCE PROGRAMS Let me begin by stating that the pharmaceutical industry must bear the primary responsibility for assuring the production of high quality drug products. The Food and Drug Administration's (FDA) role is to assure that manufacturers meet this responsibilj~y. We do so by setting appropriate standards for the manufacture of drugs, and by carrying out surveillance activities such as factory inspections and analysis of selected products. When firms do not meet their responsibilities, the Federal Food, Drug, and Cosatetic Act (FDC Act) provides us with authority to take certain measures to bring about correction and/or to remove offending products from the market. Our quality assurance programs for drugs are aime4 at providing optimal assurance of drug quality to all physicians and consumers. These programs employ a major portion of our field manpower available for drug work and range in approach from continuing surveys of the manufacturing practices of selected drug firms, to intensified targeted programs such as certification of specific products or plant inspection and analyses involving a certain product with identified problems. PAGENO="0724" 10640 OOMPETITIVE PROBLEMS IN THE DRUG INDUSTRY -2 Inspection of Dru~Nanufactur1ng Establishments The Federal Food, Drug, and Cosmetic Act requiyes inspection of every drug firm at least once every two years. A major portion of our field inspection time is expended in our efforts to comply with this mandate. In FY 1973, we inspected 2,700 registered human drug establishments and made some 7,000 inspections of registered and related drug establishments., This level of inspectional activity will be maintained during the current fiscal year. It will allow us to inspect not only those firms with identifiable problems, but also 97 percent of ma~r manufacturers of prescription legend drugs, responsible for about 95 percent of marketed prescription legend drugs. A primary objective of the inspectional program is to determine whether drug manufacturers are following what the law refers to as current good manufacturing practices (GMP's). GMP's are spelled out in regulations, and serve to guide our inspectors when reviewing plant operations. In addition to providing routine surveillance on a scheduled basis, GMP inspections may be made on a selective basis. We often schedule inspections as a result of information obtained from our own product analysis, or other reports of defective products. A pending new drug application or request for certification of an antibiotic by a firm may also trigger an inspection, as a determination of compliance with GMP is a required condition for approval. PAGENO="0725" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10641 -3- Monitoring Marketed Dru8g A second basic approach to assuring the quality of drugs is a monitoring program involving the sampling and analysis of marketed drugs to determine their adherence to compendial standards, as well as standards established in New Drug Applications (NDA). Criteria used in selecting drugs for examit~ation are: ....Therapeutic Significance - drugs prescribed for serious conditions or diseases. .-~.Complexity of Compounding - for instance, drug products in which the active ingredient of a potent drug makes up a small portion of the total weight of a solid dosage form. --Product History - drugs for which quality failures have occurred, or which have a potential for degradation or decomposition. The objectives of this program are to: --Identify defective batches of drug products and remove them from the marketplace. --Help determine the reasons for batch failures and assure that manufacturing procedures are corrected as necessary to eliminate the problems. PAGENO="0726" 10642 OOMPETIPIVE PROBLEMS IN THE DRUG INDUSTRY -4- --Provide a means for measuring changes in the quality of drugs and the relationship of such changes to FDA actions. --Provide a statistically valid evaluation of the quality of selected drugs under study. The analytical work under this program is carried out by FDA's National Center for Drug Analysis in St. Louis or one of our 18 field laboratories. Where feasible, drugs of similar composition are assigned to a single laboratory for analysis, increasing laboratory efficiency by permitting use of mass production techniques. During FY 73, we analyzed over 9,000 human drug, samples. During the current fiscal year, we plan to analyze 15,000 samples of human drugs. In general, we have found that only a small percentage of drugs analyzed are defective. All those that are defective are followed-up by our field offices to remove them from the market and to ascertain the cause of the defect. Also, we publish the results of our drug quality surveys in the FDA Drug Compliance Information Letter, a copy of which I would like to submit for the record. When our monitoring activities reveal problems with an entire class or type of drug, specific intensive programs are established. Our recent efforts to assure digoxin content uniformity and dissolution and sterility of large volume parenteral solutions (LVP) are examples of such programs. In 1970, to assure digoxin content uniformity, we established an industry-wide voluntary certification program. Until a first PAGENO="0727" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10643 -5- demonstrated that it could consistently manufacture digoxin in compliance with standards, it had to obtain a batch-by-batch analysis and FDA release prior to marketing. When we later received information concerning variation in bioavailability of digoxin manufactured by different firms, and a new United States Pharmacopeia (USP) dissolutton rate standard was adopted, we instituted a certification program similar to that employed in the content uniformity problem. New regulations pertaining to the marketing of digoxin became effective on January 22, 1974; a copy is submitted for the record. The regulations require batch-by-batch certification of digoxin until the firm demonstrates that its product consistently meets the new USP dissolution standards. These regulations also require that all firms intending to continue the marketing of digoxin must present evidence of bioavailability within 180 days after filing such notice of intent. In the case of the large volume parenterals (LVP), we instituted a special program in response to continuing reports of nonsterile products. The program evaluates the quality control and manufacturing procedures in all plants of all firms producing large volume parenterals in the United States. Ten manufacturing plants, representing the four manufacturers (Abbott, Baxter, McGaw, and Cutter) were inspected during May and June of 1973. PAGENO="0728" 10644 OOMPETITIVE PROBLEMS IN THE DRUG INDUSTRY -6- After careful evaluation of the inspection reports and review of the scientific literature pertaining to principles of sterilization, etc., we met with the individual firms during September and October of 1973. In these technical sessions, we identified problem areas and separated them into those which could and should be corrected immediately and those which would require longer-term improvements in production practices. The FDA then prepared summary papers identifying the significant problem areas and proposed solutions. These have subsequently been commented upon by each firm, and we have now prepared a summary document designed to establish common standards for the industry as a whole. The latter has been submitted to all the firms (in January 1974) for final comment. The FDA expects that from this program will evolve specific guidelines for FDA inspections of LVP manufacturers and revisions of our good manufacturing practice regulations. Drug Product Defect Reporting Program Another program for monitoring drug quality is a joint effort involving various pharmaceutical associations, the United States Pharmacopeia and FDA. Under this program, pharmacists across the Nation report apparent product defects or problems to the USP. PAGENO="0729" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10645 -7- Copies of these reports are furnished to the manufacturer or other distributor of the product in question, and to FDA. Based on evaluation of these reports, we issue investigatory assignments to the field when indicated, or in some cases institute special programs or surveys. During FY 1973, we received 2,750 program reports. The program is expanding at a rapid rate as demonstrated by the fact that we have already received 2,350 reports for the first half of FY 1974. The kind of correction this program may bring about is illustrated by the interesting story of nitroglycerin. A pharmacist questioned the suitability of a plastic, pen-shaped container for nitroglycerin tablets. Our Investigation revealed that the drug was rapidly absorbed into the container walls and after 30 days only seven percent of the tablet potency remained, i.e., the drug was practically worthless. FDA contacted the manufacturer and the plastic, pen-shaped containers were recalled. We have since issued a regulation requiring that nitroglycerin be packaged in glass containers and dispensed only in the original unopened container. ADDITIONAL ACTIVITIES CARRtED ON BY FDA TO ASSURE UNIFORMLY HIGH DRUG QUALITY In conjunction with our total quality assurance program, the Agency conducts a number of programs which help assure a uniformly high quality for the Natlen'q druR suDDlv, including: PAGENO="0730" 10646 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY -8- Establishment and Product I~vento~y Essential to any national drug quality assurance plan is full information concerning the pharmaceutical industry and its drug products. This is necessary in order to plan and schedule work assignments efficiently and accurately, both at the headquarters and regional levels, and to evaluate our performance. As you know, all drug manufacturers must register annually with FDA. During the past two years we have improved our data systems and we continuously review our Official Establishment Inventory list of registered firms to verify its accuracy and to insure that all registered firms are active. The Drug Listing Act of 1972 authorizes us for the first time to reouire information that will result in a comprehensive inventory of all marketed pharmaceutical products. We are currently processing submissions under this Act and expect this file to be active within a few months. This will provide an important resource for other agencies, as well as for the FDA, and will enable us to use in other areas field manpower formerly needed for gathering information on drug products. PAGENO="0731" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10647 -9- New Drug Approval As you of course know, all new drugs introduced into the market since 1938 must be shown to be safe and effective. What is less well known, perhaps, is that the approval process also applies to quality control procedures and other manufacturing practices. Before a new drug application may be approved, our Bureau of Drugs must have assurance, through inspections, that the applicant can and will manufacture the drug under conditions of current good manufacturing practice. In addition, the new drug approval imposes requirements for the maintenance of certain records, including periodic reports regarding clinical experiences with the drug. Important changes in manufacturing processes or controls must be approved by the FDA before they can be implemented. The new drug approval process is therefore an important and essential part of our overall quality assurance program. Drug Efficacy Study Implementation (DESI) Under the Federal Food, Drug, and Cosmetic Act enacted in 1938, safety was the sole consideration for obtaining approval to market a new drug. The Drug Amendments of 1962 extended the requirements PAGENO="0732" 10648 O~MPETITIVE PROBLEMS IN THE DRUG INDUSTRY - 10 - to include substantial evidence of effectiveness and also required a review of the effectiveness of all drugs approved between 1938 and 1962. The Food and Drug Administration contracted with the National Academy of Sciences/National Research Council (NAS/NRC) to carry out a review of the pre-1962 drugs and we have used the results of the NAS/NRC advisory study in making our own final determinations of efficacy. As a result of this program, some 5600 ineffective drug products have been removed from the market, ineffective indications for use have been deleted from drug labeling, and where drugs have been shown to be possibly or probably effective, manufacturers have been provided an opportunity to supply data that will establish their effectiveness. In addition, manufacturers of many products not previously covered by new drug applications (NDA) have been required to submit abbreviated NDA's. Before such applications are approved, we require compliance with current good manufacturing practice regulations. As in the case of NDA submissions, this is determined by a plant inspection. This program has greatly increased our inspection activities in small and medium'~size firms in the past and has resulted in substantial improvement in compliance PAGENO="0733" COMPETITIVE PROBL?EMS IN THE. DRUG INDUSTRY 10649 - 11 with the requirements of the good manufacturing practice regulations, This program also has improved and promoted the exchange of information between FDA and Defense Personnel Support Center (DPSC) regarding drug efficacy status and has a marked influence on the purchasing policies of of various Government agencies such as the DPSC. The impact of the program is remarkably broad. For example, the Secretary of DEEW has directed that Federal funds will not be expended for the purchase of drugs classified under the DESI program as no greater than "possibly effective" for use in certain of the Department's programs, such as Direct Care Programs, Contract Care Programs, and Federal Grant Programs. With the Drug Enforcement Administration (which includes the former Bureau of Narcotics and Dangerous Drugs) we have established procedures for implementing the large-scale DESI review follow-up action against amphetamine-containing drugs not in compliance with current requirements (regulation 130.46). These drugs are under the jurisdiction of both DEA and FDA. Although this cooperative action has not been completed, some 1,755 amphetamine- containing drugs manufactured by 351 firms have been effectively removed from the market. This regulatory action involved 549 drug recalls and also five seizure actions under the FDC Act. With cooperating State PAGENO="0734" 10650 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY - 12 health officials, a high degree of success has been achieved in the removal of these violative drugs from pharmacy shelves throughout the country. Liaison for exchange of DESI Program information has been established with the Chief Pharmacy Officer, Public Health Service. In addition, we have received numeroUs communications from State, foreign government, and United Nations health officials about drug status under the DESI Review Program. Copies of the DESI announcements are routinely forwarded to several Government agencies. Batch Certification The Federal Food, Drug, and Cosmetic Act requires that samples of each batch of antibiotics and insulin be tested and certified by FDA before these products are released for sale. Batch certification is also imposed for other products when it is needed to assure uniform quality. As previously discussed, digoxin has been subjected to batch certification since our drug surveillance program revealed significant variances from official standards. Current Good Nanufacturing~ractt~ Regulations ~ FDA regulations set standards for the facilities and conditions under which drugs are manufactured. Because good manufacturing practices should be "current" and change as drug technology changes, these regulations are periodically updated. The regulations were last revised PAGENO="0735" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10651 - 13 in 1970 and are currently under further revision. Among changes being actively considered is a requirement that all drug products bear an e~cpiration date based on adequate stability data, and also addition of CMI' regulations for specific classes of products such as large volume parenterals. Bioavailabilit~~td Bioeguivalen~ç~ It has been shown in recent years that in a few instances chemically equivalent drugs, even though they meet all official standards, produce significantly different blood levels in man. In scientific terms they differ in bioavailability or, to use another term, they are lacking in bioe~uivalençy. To assure the bioequivalency of chemically equivalent drugs we are taking three steps: First, we will shortly publish in final form regulations describing standards and procedures to be followed in conducting bioavailability studies. Second, we will shortly publish proposed regulations requiring bioavailability studies for all drugs of the following kinds: --Those for which the precise dosage is particularly critical an4 where a bloavailability problem would create a health hazard. 32-814 (Pt. 24) 0 - 74 - 47 PAGENO="0736" 10652 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY - 14 - --Those formulations with previously documented biovailability problems. And last, we will a1s~ publish in the near future a notice concerning the procedures we will follow in calling for and reviewing data about the potential for bioavailability problems with other drugs (i.e., those without previously well-documented bioavailability problems). In my opinion, the issue of bioequivalency is being overdrawn. As we have learned more about non-equivalency problems, it has become clearer that they are limited in number and are manageable. RELATIONSHIP WITH OTHER GOVEENNENT AGENCIES Many Government agencies are involved in the procurement of drugs. An organization called the Intra-Governmental Professional Advisory Council on Drugs and Devices (T.PADD) was established to provide these agencies with a forum for the timely interchange of medical-technical information, and, through cooperative efforts, to improve the quality of drugs furnished to the agencies. Types of information exchanged include specifications, standards, and those involving quality control and inspection. FDA is a charter member of IPADD. PAGENO="0737" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10653 - 15 Working groups have been established within IPADD for indepth exploration of appropriate subjects and areas. These groups meet every 4 to 6 months, which provides an opportunity for informal contact and exchange of information of mutual interest. FDA supplies the Defense Personnel Support Center (DPSC) with copies of FDA Daily Action Reports identifying all seizures, prosecutions, injunctions, and recalls involving drugs. Since September of 1973, we have also been supplying DPSC with unevaluated copies of all Notices of Observations, the form supplied to all drug firms by our inspectors at the end of inspections. These documents represent the individual inspector's raw unreviewed observations. Representatives of the Bureau of Drugs maintain frequent contact with the various Federal purchasing agencies and continually respond to inquiries, both written and telephone, from DPSC, Defense Medical Material Board, Veterans Administration (VA), General Services Administration, and Public Health Service Stock Pile Management, concerning firms and products. These inquiries generally involve such matters as the adequacy of labeling, "new drug" status, FDA inspectional and laboratory results, and tests, procedures, or other data in new drug applications that have been submitted to us. PAGENO="0738" 10654 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY - 16 - In addition, when a drug is to be recalled from the market and we determine from distribution reports that the firm has supplied the drug to DPSC, VA, or other Government agency, FDA notifies that agency of the recall. It is then the responsibility of that agency to insure appropriate recall of the drug under its control. When we receive a report through our Drug Defect Reporting System, the DPSC is notified whenever the report originated from a Federal hospi~al- or other Federal installation, and also where a "Federal Stock Number" is part of the labeling of the product. GENERAL COUNTING OFFICE ~GAO) REPORTS The Food and Drug Administration has completed actions to implement the recommendations of the March1973 GAO report on Enforcement of Good Manufacturing Practices for Drugs. We have developed a monitoring system to identify (1) new drug firms that require inspection, (2) existing firms that failed to reregister fo~ the current year, and (3) firms that require an inspection to fulfil the statutory requirement for biennial inspection. In addition, FDA has revised the Administrative Guideline for GNP's to provide more specific guidance to FDA personnel in determining the need for regulatory action. That guideline is under current consideration for further revision. PAGENO="0739" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10655 - 17 - The more recent GAO report (December 1973) on Improving the Federal Procurement of Drugs recommended that the separate quality assurance activities of the Department of Defense, the Veterans Administration and FDA should be consolidated into a single organization. We believe this is a sound recommendation that will enhance the efficiency of Federal quality assurance effirts. We also feel that the Food and Drug Administration is the most logical focal point for this responsibility. To explore the feasibility of consolidation, we have already held discussions with representatives of the Assistant Secretary of Defense (Health and Environi~ent) and the Veterans Administration. These discussions are continuing. We have requested from Department of Defense (DOD) and VA information as to precisely what resources they now expend for drug quality assurance. We expect that within 30 days of receipt of such data, we can prepare and circulate a proposed program to both those agencies. CONCLUS ION At the present time, FDA directs essentially all of its human drug budget, approximately $43 million, to assuring that the drugs in the marketplace are safe and effective. During the last two years, PAGENO="0740" 10656 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 18 - we have analyzed thousands of drug samples in both certification and surveillance programs, and have inspected 91 percent of those manufacturers of human prescription legend drugs who are responsible for about 95 percent of the marketed drugs. We believe that the impact of our quality assurance programs on the drug. industry has made that industry one of the most quality-control conscious industries in the country. This has resulted in a drug supply for this Nation that is of the highest quality in the world. We plan to take any necessary measures to further strengthen our quality assurance program in the months ahead. We know we will find problems in the future and this is to ~be expected. When they are found, we will correct them, and thereby take one more step toward the goal of a consistently and uniformly high quality drug supply. We will be pleased to respo~nd to any questions you or your Subcommittee may have. PAGENO="0741" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10657 FDA DRUG U.S. DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE Public Health Service C OMPL I ANCE FOOD AND DRUG ADMINIST8ATION I N FORMAT I ON Bureau of Drugs LETTER Office of Compliance February 28, 1973 TO: Manufacturers, Repackers, and Relabelers of Drug Products RE: Drug Surveillance Reports The Food and Drug Administration, as part of its regulation of the American drug supply, routinely conducts drug quality surveys. FDA now intends to publish the results of its drug quality surveys, and to send copies to all manufacturers, repackers and relabelers of drug products. In this way, the industry will be advised concerning FDA's laboratory findings on batches of different classes of marketed drugs. This is in line with FDA's attempts to provide to the public and the regulated industries as much valuable information as it can within the scope of the Freedom of Information Law. It is hoped that information of this nature will lead to better compliance by regulated industries. Each report will include pertinent information such as scope of survey, sampling information, laboratory tests and summary of results. The analytical methods used are either those specified by the United States Pharmacopeia (U. S. P.) and National Formulary (N . F.), or automated procedures developed by FDA or adapted from published methods and validated. Many of the methods may be found in the FDA's "Drug Autoanalysis Manual," available from the Division of Industry Liaison. Samples analyzed and found defective by non- official methods are check-analyzed by U.S.P., N.F., or other official methods such as those of the Association of Official Analytical Chemists (AOAC). Defective samples are followed up by FDA Field Offices so as to remove offending batch(es) from the market either by legal action, voluntary recall, or destruction, or cooperative action by State or local authorities. Test results m~y or may not be indicative of the quality of other lots of the same product or other products produced by the listed manufacturer. The first survey report is on central nervous system stimulants. * , /, 1. E. B~'ers, Director Office/of Comp~ance Bureau of Drugs PAGENO="0742" 10658 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY REPORT ON CENTRAL NERVOUS SYSTEM STIMULANTS Scope of the Survey This survey covered Dextroamphetamine Sulfate Tablets U. S. P. XVIII, marketed as a single active ingredient product in tablet form in the following dosages: 2.5 mg., 3.0 mg., 4.0 mg., 5.0 mg., 10.0 mg., 12.0 mg., and 15.0 mg. Of the 24 domestic formulators known to produce Dextroamphetamine Sulfate Tablets, samples of batches from 22 firms were collected in this survey. FDA's District Offices reported a total annual production between September 1, 1970, and September 1, 1971, by all 24 firms of about 104 mIllion Tablets representing 175 batches. Batches varied in size from slightly less than 100, 000 Tablets to slightly more than 2,000,000 Tablets. Fifty-two batches from 22 firms or 30 percent of all batches were tested. This represented a range of from 6 to 100 percent of the batches pro- duced by individual firms * The output of two firms, Cord Laboratories and Riverton Laboratories, was unavailable for sampling. Sarnpling Infoi~mation Samples were collected under FDA's FORDS (Formulator-Oriented Rx Drug Studies) Program from the formulators (manufacturing plant or primary distribution warehouse) or from their branch warehouses or major accounts. No collections were made at locations more than once removed from the manufacturer. Samples were collected from batches released for distribution by the firms' quality control. Laboratory Tests Sufficient tests were conducted to determine whether samples met compendial requirements. Individual Tablets were analyzed by a semiautomated procedure as described under Method No. 3 of the FDA Drug Autoanalysis Manual. Testing was performed on each of six sub-samples from each batch. Where outside of compendial limits, results were verified by the U.S.P. Method. Summary of Results Of the 52 samples analyzed (see Table 1) two samples, one 5 mg. and the other 10 mg. Tablets, were found defective with a sample defect rate for the survey of 3.8 percent. No samples of other dosage strengths were defective. PAGENO="0743" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10659 Table 1. ---Testing Results "FORDS' Study Dextroamphetamine Sulfate Tablets U. S. P. XVIII [Survey Period - September 1971-January 1972] Manufacturer Declared potency (mg.) ~Number batches~ Number sampled and defective analyzed j samples American Pharmaceutical Co 5 2 0 George N. Bell, Mfg. Chemists 5 2 0 Bolar Pharmaceutical Co 5 4 0 - 10 2 1(a) 15 3 0 The C. M. Bundy Co 5 1 1 (b) Columbia Pharmaceutical Corp 5 1 0 15 1 0 Don Nell Labs., Inc 2.5 1 0 5 1 0 10 1 0 E.W.HeunCo 3 1 0 5 3 0 10 1 0 Invenex Pharmaceuticals 5 1 0 10 1 0 Kasar Labs 5 1 0 Kirkman Labs., Inc 5 1 0 The Lannett Co., Inc 5 1 0 Linden Labs., Inc 15 1 0 Mills Pharmaceuticals, Inc 5 1 0 Philips Roxane Labs., Inc 5 1 0 Premo Pharmaceutical Labs., Inc 5 2 0 Rondex Labs., Inc 5 1 0 Smith, Kline, & French Labs 5 8 0 Stayner Corp : 1 0 Towne, Paulsen & Co., Inc 5 1 0 10 2 0 West-Ward, Inc 5 1 0 West Coast Labs 4 1 0 12 1 0 The Zemmer Co 10 2 0 ± Totals 52 2 (a) Defective due to subpotency (88.8% of declared), and lack of content uniformity (three tablets; 84.5%, 83.3%, and 84.8% of declared). Lot destroyed under State supervision. (b) Defective due to lack of content uniformity (two tablets; 128 * 6% and 116 * 8% of declared). Lot voluntarily removed by manufacturer from distribution channels. PAGENO="0744" 10660 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY FDA drug compliance information letter U.S. DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE * Public Health Service * FOOD AND DRUG ADMINISTRATION Bureau of Drugs . Office of Compliance May 7, 1973 TO: Manufacturers, Repackers, and Relabelers of Drug Products RE: Drug Surveillance Reports The Food and Drug Administration, as part of its regulation of the American drug supply, routinely conducts drug quality surveys * FDA now intends to publish the results of its drug quality surveys, and to send copies to all manufacturers, repackers and relabelers of drug products. In this way, the industry will be advised concerning FDA's laboratory findings on batches of different classes of marketed drugs. This is in line with FDA's attempts to provide to the public and the regulated Industries as much valuable information as it can within the scope of the Freedom of Information Law. It is hoped that information of this nature will lead to better compliance by regulated industries * Each report will Include pertinent Information such as scope of survey, sampling information, laboratory tests and summary of results. The analytical methods used are either those specified by the United States Pharmacopela (U . S . P.) and National Formulary (N . F.) or automated procedures developed by FDA or adapted from published methods and validated. Many of the methods may be found In the FDA's "Drug Autoanalysis Manual," available from the Division of Industry Liaison. Samples analyzed and found defective by non- official methods are check-analyzed by U. S. P., N * F.,. or other official methods such as those of the Association of Official Analytical Chemists (AOAC). Defective samples are followed up by FDA Field Offices so as to remove offending batch(es) from the market either by legal action, voluntary recall, or destruction, or cooperative action by State or local authorities. Test results may or may not be Indicative of the quality of other lots of the same product or other products produced by the listed manufacturer. The second survey report Is on Ethinyl Estradlol. T. E. Byers, ~1rector Office of Co/ipliance Bureau of D1tugs PAGENO="0745" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10661 REPORT ON ETHINYI~ ESTRADIOJ~ Scope of the Survey This study covered Ethinyl Estradiol Tablets U .S. P. XVIII, marketed as a single active ingredient product in tablet form, in the following dosages: 0.02 mg., 0 * 05 mg., and 0.5 mg. Of the seven domestic formulators known to produce Ethinyl EstradiolTablets, samples of batches from four firms were collected in this survey. Batches varied in size from slightly under 200,000 tablets to slightly more than 2,000,000 tablets. Eight batches from four different firms were tested. The output of three firms (Ferndale Laboratories, Inc.; Organon Inc.; and Marshall Pharmacal) was unavailable for sampling. Sampling Information Samples were collected under FDA's FORDS (Formulator-Oriented Rx Drug Studies) Program from the formulators (manufacturing plant or primary distribution warehouse) or from their branch warehouses or major accounts. No collections were made at locations more than once removed from the manufacturer. Samples were collected from batches released for distribution by the firms' quality control. Laboratory Tests Samples were analyzed by semi-automated procedure as described under Method No. 24 of the FDA Drug Autoanalysis Manual. Testing was performed on each of six sub-samples from each batch. Where outside of compendial limits; results were verified by the U.S.P. Method. Summary of Results Of the eight samples analyzed (see Table 1) one sample of 0.05 mg. tablets was found defective due to lack of content uniformity, with a sample defect rate for the survey of 12 * 5 percent. No samples of other dosage strengths were defective. PAGENO="0746" 10662 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Table l.--Testing Results `FORDS" Study Ethinyl Estradiol Tablets U.S. P. XVIII [Survey Period - May 1, 1970-May 1, 19711 Manufacturer Declared potency (mg.) Number batches sampled and analyzed Number defective samples Heun, E. W. Company Linden Laboratories, Inc Schering Corporation Upjohn Company 0.05 0.05 0 * 02 0.05 0.5 0.05 1 1 1 1 1 3 0 1 (a) 0 0 0 0 Totals 8 1 (a) Defective due to lack of content uniformity (25 tablets defective ranging from 26.5 percent to 183.6 percent of declared). The average for all 30 tablets check analyzed was 75.4 percent of declared. The lot was voluntarily removed by manufacturer from distribution channels. PAGENO="0747" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10663 FDA drug compliance information letter U.S. DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE * Public Health Service * FOOD AND DRUG ADMINISTRATION Bureau of Drugt * Office of Compliance July 18, 1973 TO: Manufacturers, Repackers, and Relabelers of Drug Products RE: Drug Surveillance Report The Food and Drug Administration, as part of Its regulation of the American drug supply, routinely conducts drug quality surveys. FDA now Intends to publish the results of its drug quality surveys, and to send copies to all manufacturers, repackers and relabelers of drug products. In this way, the industry will be advised concerning FDA's laboratory findings on batches of different classes of marketed drugs. This is in line with FDA' s attempts to provide to the public and the regulated Industries as much valuable information as it can within the scope of the Freedom of Information Law. It is hoped that information of this nature will lead to better compliance by regulated industries. Each report will include pertinent Information such as scope of survey, sampling information, laboratory tests and summary of results. The analytical methods used are either those specified by the United States Pharmacopeia (U . S. P.) and National Formulary (N. F.) or automated procedures developed by FDA or adapted from published methods and validated. Many of the methods may be found In the FDA's `Drug Autoanalysis Manual," available from the Division of Industry Liaison. Samples analyzed and found defective by non- official methods are check-analyzed by U.S. P., N. F., or other official methods such as those of the Association of Official Analytical Chemists (AOAC). Defective samples are followed up by FDA Field Offices so as to remove offending batch(es) from the market either by legal action, voluntary recall, or destruction, or cooperative action by State or local authorities. Test results may or may not be indicative of the quality of other lots of the same produot or other products produced by the listed manufacturer. The third survey report is on Psychostimulants. J7L~~I, /1-4~2.~-' T. E. Byers, 9irector Office of Coimfliance Bureau of Drugs PAGENO="0748" 10664 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY REPORT ON PSYCHOSTIMULANTS Scope of the Survey This survey covered five psychostimulant drugs marketed as single active ingredient drugs each in one or two dosage forms as follows: Amitriptyline HCI Tablets and Injection, U.S.P. XVIII; Desipramine HC1 Tablets and Capsules, N.F. XIII; Imipramine HCI Tablets, U.S.P. XVIII; Nortriptyline HCI Capsules, N.F. XIII; and Protriptyline HC1 Tablets. Of the seven domestic formulators known to produce these drugs, samples of batches from five firms were collected in this survey. The output of two firms, Standard Pharmacal Company and Taylor Pharmacal, was unavailable for sampling. Sampling Information Samples were collected under FDA's FORDS (Formulator-Oriented Rx Drug Studies) Program from the formulators (manufacturing plant or primary distribu- tion warehouse) or from their branch warehouses or major accounts. No collections were made at locations more than once removed from the manufacturer. Samples were collected from batches released for distribution by the firms' quality control. Laboratory Tests Samples were analyzed for compliance with the specifications in the compendlal monograph or NDA by the appropriate semi-automated procedure or other method of analysis deemed appropriate by the National Center for Drug Analysis. Testing was performed on each of six sub-samples from each batch. Summary of Results Of the 42 samples analyzed (see Table 1), no samples were round defective. PAGENO="0749" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10665 Table 1. --Testing Results `FORDS" Study Psychostimulants [Survey Period - May 1972-September l972~ Declared umber batches Number Manufacturer potency (mg.) sampled and analyzed defective samples Amitriptyline HCI Tablets: Merck Sharp & Dohme 10.0 3 0 25.0 3 0 50.0 Totals __________ 9 0 Amitri~tyline HC1 Injection: Merck Sharp & Dohme 10.0 mg/m 2 Totals _____________ 2 Desipramine HC1 Tablets: K-VPharmacal 25.0 2 0 50.0 Totals _______________ 5 0 Desipramine RC1 Capsules: U.S. Vitamin 25.0 4 0 50.0 Totals _______________ ____________ 0 Imipramine HC1 Tablets: Ciba-Geigy Corp 10.0 2 0 25.0 1 0 50.0 Totals _______________ - 6 - 0 Noctriptyline HC1 Capsules: Eli Lilly & Company 10.0 3 0 25.0 6 Totals _______________ 9 0 Protriptyline HC1 Tablets: Merck Sharp & Dohme 5.0 3 0 10.0 C) PAGENO="0750" 10666 COMPETITIVE PROBLEMS IN THE DRUG INDuSTRY FDA drug compliance information letter U.S. DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE * Public Health Service * FOOD AND DRUG ADMINISTRATION Bureau of Drugs * Office of Compliance October 5, 1973 TO: Manufacturers, Repackers, and Relabelers of Drug Products RE: Drug Surveillance Reports The Food and Drug Administration, as part of its regulation of the American drug supply, routinely conducts drug quality surveys. FDA now intends to publish the results of its drug quality surveys, and to send copies to all manufacturers, repackers and relabelers of drug products. In this way, the industry will be advised conc~rning FDA's laboratory findings on batches of different classes of marketed drugs. This is in line with FDA s attempts to provide to the public and the regulated industries as much valuable information as it can within the scope of the Freedom of Information Law'. It is hoped that information of this nature will lead to better compliance by regulated industries * Each report will include pertinent information such as scope of survey, sampling information, laboratory tests and summary of results. The analytical methods used are either those specified by the United States Pharmacopeia (U. S . P.) and National Formulary (N . F.) or automated procedures developed by FDA or adapted from published methods and validated. Many of the methods may be found in the FDA s Dru.q Autoanalysis Manual, available from the Division of Industry Liaison. Samples analyzed and found defective by nonofficial methods are check-analyzed by U.S. P., N.F., or other official methods such as those of the Association of Official Analytical Chemists (AOAC). Defective samples are followed up by FDA Field Offices so as to remove offending batch(es) from the market either by legal action, voluntary recall, or destruction, or cooperative action by State or local authorities. Test results may or may not be indicative of the quality of other lots of the same product or other products produced by the listed manufacturer. The fourth survey report is on Antiemetics. /~A~ T. E. Byerj, Director Office of compliance Bureau of Drugs PAGENO="0751" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10667 REPORT ON ANTIEMETICS Scope of the Survg~ This survey covered four different drugs marketed as single active ingredient preparations; three in tablet form and one in both capsule and injectable form. Drugs in this study were: Cyclizine HCl Tablets U.S.?. XVIII, Meclizine HC1 Tablets U . S. P. XVIII, Dimenhydrinate Tablets U. S. P. XVIII, and Trime~hobenz- amide HCI Capsules and Injection N.F. XIII. Of the twelve domestic formulators known to produce these drugs, samples of batches from eleven firms were collected and analyzed in the survey. The output of one firm, Bowman Pharmaceutical, was unavailable fox sampling. Samples were collccted under FDA's FORDS (Formulator-Oriented Rx Drug Studies) Program from the formu~ators (manufacturing piant or primary distribution warehouse) or from thorn branch warehouses or major accounts. No collections were made at locations more than once removed from the manufacturer. Samples were collected from hatches released for distribution by the firms' quality control. Laboratory Tests Samples were analyzed for compliance with the chemical specifications in the compendial monographs. Initial chemical analyses were performed by methods deemed appropriate by the National Center for Drug Analysis. Testing was performed on each of six sub-samples from each batch. Summary of Results Of the 33 samples analyzed (see Table 1) no defective samples were found. 32-814 (Pt. 24) 0 - 74 - 48 PAGENO="0752" 10668 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Table 1 --Antlemetlcs [Survey Period - February 1972-June 1972] Declared Number batches potency sampled and (mg.) analyzed Manufacturer 50.0 6 6 50.0 50.0 50.0 50.0 50.0 50.0 50,0 50 0 Cyçlizine HCI Tablets: Burroughs Welleome Co Total Dime~ydrinate Tablets: Cord Laboratories, Inc Paul B. Elder Co The Lannett Co., Inc Linden Labs., Inc Phoenix Labs., Inc Richlyn Laboratories G. D. Searle & Co West-Ward, Inc Total Meclizine HC1 Tablets: Pfizer, Inc Total ~riiiiethobenzamide HCI Cap~~: Hoffman-La Roche Inc Total Trimethobenzamide HC1 Injection: Hoffman-La Roche Inc Total 2 2 1 1 1 1 6 1 15 Number defective samples 0 0 0 0 0 0 0 0 0 0 0 0 0 0 25.0 4 Q 0 100.0 250.0 1 ~ 5 100.0 mg/cc 3 3 0 0 PAGENO="0753" cX~MPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10669 FDA drug compliance information letter U.S. DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE * Public Health Service * FOOD AND DRUG ADMINISTRATION Bureau of Drugs Office of Compliance January 23, 1974 TO: Manufacturers, Repackers, and Relabelers of Drug Products RE: Drug Surveillance Reports The Food and Drug Administration, as part of its regulation of the American drug supply, routinely conducts drug quality surveys. FDA now intends to publish the results of its drug quality surveys, and to send copies to all manufacturers, repackers and relabelers of drug products. In this way, the Industry will be advised concerning FDA's laboratory findings on batches of different classes of marketed drugs. This is in line with FDA's attempts to provide to the public and the regulated industries as much valuable Information as it can within the scope of the Freedom of Information Law. It is hoped that Information of this nature will lead to better compliance by regulated Industries. Each report will Include pertinent information such as scope of survey, sampling Information, laboratory tests and summary of results. The analytical methods used are either those specified by the United States Pharmacopeia (U. S . P.) and National Formulary (N . F.) or automated procedures developed by FDA or adapted from published methods and validated. Many of the methods may be found in the FDA's Drug Autoanalysis Manual, available from the Division of Industry Liaison. Samples analyzed and found defective by nonofficlal methods are check-analyzed by U. S. P., N. F., or other official methods such as those of the Association of Official Analytical Chemists (AOAC). Defective samples are followed up by FDA Field Offices so as to remove offending batch(es) from the market either by legal action, voluntary recall, or destruction, or cooperative action by State or local authorities. Test results may or may not be Indicative of the quality of other lots of the same product or other products produced by the listed manufacturer. The fifth survey report is on Progestins. T. E. Byers, ~Arector Office of C~pl1ance Bureau of D~ugs PAGENO="0754" 10670 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY REPORT ON PROGESTINS Sco_pe of the Survey This survey covered seven drugs, each marketed as a single active ingredient product in one to three dosage forms. Dosage forms covered were tablets and injections or injection suspensions. The following drugs were programmed in the study: 1. (a) Progesterone Tablets N.F. (b) Progesterone Injection (Aqueous or oil vehicle) N.F. (c) Progesterone Injection (Sterile Suspension) N.F. 2. (a) Medroxyprogesterone Acetate Tablets U.S.P. (b) Medroxyprogesterone Acetate Injection (Sterile Suspension) U.S. P. 3, .Hydroxyprogesterone Caproate Injection (oil vehicle) U.S.P. 4. Dydrogesterone Tablets N. F. 5. Ethisterone Tablets N.F. 6~. Norethindrone Tablets N . F. 7. Norethindrone Acetate Tablets N.F. Of the 20 domestic formulators known to produce these drugs, samples of batches from 16 firms were collected in this survey. Unavailable for sampling was production from E. W. Heun Company, Maizel Laboratories, and Organics Inc. The result froni sampling of Parke Davis Progesterone Injection Suspension, 25.0 mg/mI, is not listed in Table 1 as a defective sample since an apparent syringeability problem interfered with the analysis. 2 Sampling Information Samples were collected under FDA's FORDS (Formulator-Oriented Rx Drug Studies) Program from the formulators (manufacturing plant or primary distribution ware- house) or from their branch warehouses or major accounts. No collections were made at locations more than once removed from the manufacturer. Samples were collected from batches released for distribution by the firms' quality control. 1. Not available for sampling. 2. See Table 1, Footnote c. PAGENO="0755" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10671 Laboratory Tests Samples were analyzed by the National Center for Drug Analysis for compliance with the specifications in the official compendial monographs (except sterility requirements). Initial analyses were performed by methods deemed appropriate by NCDA. Check analyses, as required, were made by the official method. Testing was performed on each of six sub-samples from each batch. Su~mrnary of Pesults Of the 51 samqles of these drugs that were analyzed (see Table 1) two samples of Progesterone Injection, one labeled 25.0 mg/mi and the other labeled 50.0 mg/mi were found defective due to substrength. PAGENO="0756" Table 1-Progestlns (Survey Period* May 1972September 1972) 25.0 mg/mi 50.0 tng/mi 100.0 mg/mi 50.0 mg/mi 25.0 mg/mi 50.0 mg/sri 50.0 mg/mi 2~0 mg/nil 50.0 mg/nil 50.0mg/mi 50.0 mg/sri 50.0 mg/mi 100.0 mg/mi 25.0 mg/mi 50.0mg/mi 50.0mg/mi 100.0mg/mi 50.0mg/mi 50.0mg/mi 0 0 0 0 1/a) I ibi 0 0 - ici 0 0 0 0 0 0 0 0 0 0 0 0 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY MANUFACTURER DECL RE POTENCY NUMBER BATCHES SAMPLED AND ANALYZED NUMBER DEFECTIVE SAMPLES 10672 Prggsasergee InjectIon (Aqe000sor oil): BeiMer Labs, sc. D'M Pharmactuticais Eiksns.S,nn, sc. Gotham Phermaceuhcai Co., inc. Eu Ltiiy & Co Meurry B:oiogicai Co., Inc. Medicai Chemicais Corp MyersCarter Labs., Inc. Parke, Dave & Co Pasadena Research Labs., Inc. . . . . . . . ScheringCorporatlon Titan Phgrmacai Co., inc TOTAL Preglateroee Injectice Saspeeslee: Eik/ns.S:nn, inc. Ha//mark Laboratories Macrrye,oiog:caiCo.,inc. Medicei Chemicais Corp Pasadena Research Lobs., inc. Titan Pharmenei Cc, inc TOTAL eA Msdrosyprogestaroes Aoetata Tabiets: The Upjohn Cc TOTAL Medrocypeoesst.toee Acetate tn/action Sterile Suspension: The Up/ohs Co TOTAL Hydrooyproesetlrona Ceproate election: E.Fi.Squbb&Sorsinc. TOTAL 0 25.0 mg/mi 50.0 mg/mi 25.0 mo/mi 50.0 mg/mi 25.0 mg/mi 50.0 mg/mi 100.0mg/mi 25.0 mg/mi 25.0 mg/mi 50.0mg/mi 1 I 1 1 2 1 1 1 1 1 12 2.5mg 10.0mg 1 ~ 4 0 0 0 50.0mg/mi 100.0mg/mi 3 1. 250.0mg/mi 1 T 0 ~ 5.0mg 10.0mg 1 2 ~- 0 0 T 10.0mg J. 1 0 5.0mg -~- 5.0mg 3 T 0 T Dydrogaetonoeo Tablets: Phi//pt Rovano Labs., inc. Ethiseareno Tablets: Schtring Corporal/en Pdorothindrone Tablets: Perko,Decis&Cv. Nerothiednone Acetate Tablets: Perke,Decis&Co TOTAL TOTAL TOTAL TOTAL GRAND TOTAL . 51 2 iei Detect/ce due mc subpolency in 1/cent s~n ecb.s.mpios. Theaceragepotenon met cnn parcent 01 daciared icr the sampis eemcced trcm ckstr,but,On chenneis by seiacms ici Th*,esoit on thissampiels not iisted as aetect,ce bacacee an apparent syringaabiiitn probiem Intartered with the anaiysis Oacsuse at this probiam, the tirm cciuntor,iV reco~itsd the PAGENO="0757" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10673 TITLE 21--FOOD AND DRUGS CHAPTER I--FOOD AND DRUG ADMINiSTRATION, DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE SUBCHAPTEH C--DRUGS PART 130--NEW DRUGS CONDITIONS FOR MARKETING OF DIGOXIN PRODUCTS In April, 1970, the Food and Drug Administration inaugurated a program to systematically test marketed batches of dig~xin tablets after the agency became aware of an apparent potency problem with this cardiac glycoside. As a result of this testing program, from April to November, 1970, there were 79 recalls of digoxin products. In October, 1970, a voluntary certification program was initiated whereby partici- pating manufacturers agreed not to release new batches of digoxin tablets until samples of the batches. were tested by the Food and Drug Administration and found to meet The United States Pharmacopeia (USP) requirements for potency and content uniformity. In December, 1971, John Lindenbaum, M.D. and his colleagues published a paper in The New England Journal o Medicine (Lindenbautr, J., Mellow, M. C., Blackstone, M. D., Butler, V. P., "Variation in Biologic Availability of Digoxin from Four Preparations' The New Eng1apd~nal~ MedicIne, 285:1344, 1971) describing a study of the biologic availability in 1 PAGENO="0758" 10674 CoMPETITIvE PROBLEMS IN THE DRUG INDUSTRY normal human volunteers of 4 batches of commercially marketed digoxin tablets. The study noted marked differences in serum digoxin levels achieved with tablets produced by different manufacturers. Significant variation between different batches prepared by a single manufacturer was also observed. Lindenbaum conducted the study after observing low serum digoxin concentrations in several patients receiving unusually large maintenance doses of digoxin. The tablets used in the study had not been analyzed for compliance with compendial specifications including potency and content uniformity. Subsequently, the Food and Drug Administration analyzed tablets from batches used in the Lindenbaum study and found that the two batches which gave acceptable serum digoxin levels met these compendial specifications. One batch which had given very low serum digoxin levels did not meet these compendial specifications varying from 76 to 152 percent of labeled potency. At that time sufficient tablets of the other batch which gave low serum digoxin levels could not he found for analysis. On this basis, it was the Food and Drug Administration's view that the problem identified by Lindenhaum may have been one of potency and not bloavailability (Vitti, T. G., Banes, D., Byers, T. E., "Bloavailability of Digoxin', The New j~~land Journal of Medicine, 285:1433, 1971). Somewhat prior to this, the Food and Drug Administration had begun a systematic investigation of several formulations of the cardiac glycosides. John C. Wagner, Ph.J)., Professor of Pharmacy, Upjohn Center for Clinical Pharmacology, University of Michigan, Ann Arbor, Michigan, 2 PAGENO="0759" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10675 under an exitamural contract with tlw Food and Drug Administration, had just completed a pharmacokinetic evaluation of digitoxin when the agency learned of the results of the Lindenbaum study. Dr. Wagner then proceeded to study the bloequivalence of digoxin tablets, in addition to conduct- ing a bioavailabillty study on digoxin tablets made by two different manufacturers, Dr. Wagner developed a reproducible in vitro dissolution test which showed ~ignificant correlation with in vivo bioavailability test results. The results of the Wagner study were published in The Journal of the American Medical Association in April, 1973 (Wagner, J. C., et al., "Equivalence Lack in Digoxin Plasma Levels," Journal of the American Medical Association, 224:199-204, 1973). In the meantime, sufficient tablets of the second batch of digoxin tablets which gave low serum digoxin levels in the Lindenbauin study were located for chemical analysis. The Food and Drug Administration's analysis showed that the tablets met the compendial specifications for content uniformity. It was therefore apparent that the problem identified originally by Lindenbaum and his colleagues was attributable to bloavaila- bility and not to potency (Skelly, J. and Knapp, C.,"Biologic Availability of Digoxin Tablets," Journal of the American Medical Association, 224:243, 1973). The Food and Drug Administration recognized that very few well controlled digoxin bioavailability studies had been performed and was aware of data which indicated that even the possibility of batch-to-batch bioavailability inconsistency could not be discounted. The agency continued to implement studies to determine the dimension of the problem and to prov:Ide the basis for a systematic regulatory approach to assure the 3 PAGENO="0760" 10676 COMPETITIVE PROBLEMS IN THE DRUG INDUSPRY uniformity of all digoxin products. In addition to inaugurating additional in vivo studies under the extramural contract program, the agency, in Its own laboratories, adapted, modified, and validated several dIssoiuL~on procedures in both acid and water media based on the method originally developed by Dr. Wagner. Samples of digoxin tablets produced by all known manufacturers were obtained for laboratory analysis. A dissolution profile was obtained on all the tablets which met compendial requirements for potency and content uniformity. A satisfactory correlation existed with the available in vivo data. The USP in conjunction with the FDA have initiated studies to determine the correlation between bloavailability in vivo and the dissolution rate of digoxin tablets in vitro. As a result of the available data from all such studies showing a satisfactory correlation between bioavailabi]ity and dissolution, the USP monograph for digoxin tablets has been revised to include a requirement for dissolution. This revision is included in the USP XVIII Sixth Interim Revision Announcement which became effective on November 15, 1973. The dissolution method described in the revision involves the use of a rotating basket in an acid dissolution medium. The Commissioner has determined that the solution to the problem of the bioavailability of digoxin products will involve three separate but related actions. As a first step, immediate action will be taken to remove from the market those digoxin products which, on the basis of dissolution test results, are not adequately bioavai]able. The second action will include procedures to assure that manufacturers conduct the in vivo tests needed to demonstrate the bioavailahility of those digoxin 4 PAGENO="0761" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10677 products which meet all compendial requirements including dissolution. The third aqtion will involve procedures to monitor digoxin product reformulations in order to assure that orderly progress is made towards the marketing of digoxia products which are 100 percent bioavailabl~. The third action will include means of adequately advising practitioners of changes in digoxin bioavailability resulting from product reformulations. The Food and Drug Administration is prepared to take the actions necessary to assure the removal from the market of all batches of digoxin tablets in the channels of commerce after November 15, 1973, which do not meet all compendial requirements. The agency has initiated a program for sampling and analyzing batches of digoxin tablets in the channels of commerce. Manufacturers of batches of digoxin tablets which are found not to be *in compliance with the compendial requirements will be requested by the Food and Drug Administration to initiate recall of the subject batches from the market. Violative batches which are not promptly and effectively recalled will be subject to regulatory procedures. Data indicate that a significant number of manufacturers will need to reformulate their digoxin tablets to assure that their digoxin tablets meet the new compendial requirement for dissolution. Because of the narrow margin between therapeutic and toxic levels of digoxin and the potential for serious risk to cardiac patients using digoxin products which may vary in bioavailability, the Commissioner has determined that immediate actions must be taken to assure better uniformity of all digoxin products for oral use. These actions include: 1. Procedures to remove from the market all batches of digoxin 5 PAGENO="0762" 10678 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY products which do not meet current good manufacturing practice and compendial requirements. 2. Procedures to require manufacturers to submit samples of all new batches of digoxin tablets to the Food and Drug Administration for analysis and certification prior to release of these batches for distribution. 3. Procedures to monitor digoxin product formulations to assure that any reformulation will result in compliance with all in vitro test requirements and In uniform batch-to-batch bloavailability. 4. Procedures to require manufacturers to conduct In vivo bloavail- ability tests. 5. Procedures to assure uniformity in the labeling of all digoxin products for oral use. The Commissioner is of the opinion that, in view of the questions that have been raised regarding the bioavailability of digoxin products and the need for some manufacturers to reformulate their products to meet the new requirements for dissolution, these drug products cannot properly be considered generally recognized as safe and effective within the meaning of sect±on 201(p) of the Federal Food, Drug, and Cosmetic Act. Therefore, all digoxin products for oral use are new drugs for which approved new drug applications are required. All persons marketing such drug products must submit an abbreviated new drug application for these products on or before (insert date 30 days after the date of~u~~ in the FEDERAL REGISTER) If marketing is to continue. After this date, any such drug product then on the market which is not the subject of an abbreviated new drug application submitted for such drug product will be 6 PAGENO="0763" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10679 subject to regulatory procedures under section 505 of the act. The Commissioner has determined that, in view of the questions raised regarding the bioavailability of digoxin products for oral use, there is sufficient evidence to invoke the authority under section 505(j) of the act to fully investigate this question in order to obtain more definitive data to demonstrate the bloavailability of these products and to correlate bioavailability in vivo with the dissolution rate of digoxin tablets in vitro. Therefore, any person who submits an abbreviated new drug application for digoxin products for oral use shall, within the times specified in the new § 130.51, submit to the Food and Drug Administration additional data in the form of records and reports, pursuant to section 505(j) of the act, which show adequate evidence of the product's bioavailability. A review of these data will facilitate a determination of whether there is a ground for withdrawing approval of the drug in question under section 505(e) of the act. Failure to submit these required records and reports is In itself a violation of the act, justifying withdrawal of approval of the application. Digoxin products for parenteral use are new drugs subject to the requirements of the Drug Efficacy Study Implementation notice (DESI 8627) published in the FEDERAL REGISTER of July 27, 1972 (37 FR 15024). The conditions for marketing digoxin products for parenteral use are described in the DESI notice and include a requirement for the submission of data to show the biologic availability of the drug in the formulation which is marketed. Digoxin tablets formulated so that the quantity of digoxin dissolved 7 PAGENO="0764" 10680 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY at one hour, when tested by the method in the USP, is greater than 95 percept of the assayed amount of digoxin or so that the quantity of digoxin dissolved at 15 minutes is greater than 90 percent of the assayed amount of cligoxin are new drugs which may not he marketed without an approved new drug application. Persons intending to market such drugs are required to submit full new drug applications as provided for in § 130.4 (21 CFR 130.4). The application shall include, but not be limited to, clinical studies establishing significantly greater bioavailability than digoxin ~;ablets meeting compendial requirementc and dosage recommendations based on clinical studies establishing the safe and effective use of the more bioavailable digoxin product. Marketing cf these digoxin products will be allowed only under a proprietary or trade name, established name, and labeling which differs from that used *for digoxin tablets that meet all of the requirements in USP XVIII and that are formulated so that the quantity of digoxin dissolved at one hour is not more than 95 percent of the assayed amount of digoxin or that the quantity of digóxin dissolved at 15 minutes is not more than 90 percent of the assayed amount of digoxin. The Food and Drug Administration is familiar with two in vitro methods ("paddle-water," "paddle-acid"), in addition to that described in the USP, developed to measure digoxin tablet dissolution. These three methods result in data which show significant differences in dissolution in comparative tests onsome formulations. Definitive bioavailability data to compare the relative value of each of these methods to predict bioavailability of the few formulations where the 8 PAGENO="0765" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10681 methods show significant differences in dissolution rate are not now available. Until such data are available it is not possible to rule out th~ usefulness of each method in particular situations or to define the limitations of ai~y method. Once such data is available it is anticipated more stringent dissolution rate requirements will be set. The Commissioner requests that manufacturers who conduct research utilizing the `paddle-water' and "paddle-acid" methods, particularly in comparison with the method in the USP, submit any data obtained using these methods to the Food and Drug Administration pursuant to section 505(j) of the act. Available evidence shows that digoxin tablets which have a dissolution rate below the compendial requl~rement (i.e., 55,percent at one hour) when tested by the in vitro method in DSP XVIII are not adequately b±oavailable when tested by in vivo methods. Correlative in vivo and in vitro data are not now available to predict with certainty the minimum dissolution rate at which biologic availability will be demonstrated. Manufacturers whose digoxin tablets do not now meet the compendial requirements for dissolution may reformulate their product to achieve a dissolution at any rate above the dissolution requirements of the DSP, but not more than 95 percent dissolution at one hour or more than 90 percent dissolution at 15 minutes. The Food and Drug Administration recommends that these manufacturers reformulate their products to achieve dissolution of 70 to 90 percent at one hotir by all three methods. This recommendation is based on data compiled by the Food and Drug Administration which indicates that when in vitro tests uniformly show dissolution at 70 to 90 percent at one hour by all three methods there is good probability to predict that in vivo tests 9 PAGENO="0766" 10682 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY will demonstrate that the product is bioavailable. To assist manufacturers who do not have the capability to determine dissolution by all three methods, the Food and Drug Administration is prepared, on request, to test samples of reformulated tablets by all three methods and to supply the results of these analyses to the manufacturer. The references set forth in the preamble together with the following additional supportive data and background information have been assembled and are on display in the office of the Nearing. Clerk, Food ~nd Drug Administration, Room 6-86, 5600 Fishers Lane, Rockville, MD 20852: 10 PAGENO="0767" COMPETITIVE PROBLE~MS IN THE DRTJG `INDUSTRY 10683 1. Doherty, J. E., W. 11. Perkins and C. K. Mitchell, "Tritiated Digoxln Studies in Human Subjects," A ~yies of Interns) Medicine, 1b8:531, 1961. 2. Levy, C., "Effect of Dosage Form on Drug Absorption a Frequent Variable in Clinical Pharmacology," Archives of International Pharmaçoç~ynamics, 152, No. 1-2:59-68, 1964. 3. Jelliffe, R. W., "A Mathematical Analysis of Digitalis Kinetics in Patients with Normal and Reduced Renal Function," Mathematical Biosciences, 1:305-325, 1967. 4. Doherty, J. E., W. H. Perkins and W. 3. Flanigan, "The Distribution and Concentration of Tritiated Digoxin in Human Tissues," Annals of Internal Medicine, 66, No. 1:116, 1967. 5. Butler, V. P. and J. P. Chen, "Digoxin Specific Antibodies," Proceedi~ of the National Academy of Sciences, 57:71, 1967. 6. Smith, P. W. and E. Háber, "Measurement of Clinical Blood Levels of Digoxin by Radioimmunoassay," ~_J al of Clinical InvestiAation, 48:78A, 1969. 7. Smith, P. W., V. P. Butler and E. Haber, "Determination of Therapeutic and Toxic Serum Digoxin Concentrations by Radioiinmunoaasay," The New En~Land Journal of Medicine, 27:1212, 1969. 8. White, K. 3., D. A. Chamberlain, H. Howard and T. W. Smith, "Measurement of Plasma Digoxin by Radloimmunoassay," Proceedj~g~softheR~yal Society of Medicine, 63:703, 1970. 11~ 32-814 (Pt. 24) 0 - 74 - 49 PAGENO="0768" 10684 COMPETITIVE PROBLEMS IN THE JThUG INDUSTRY 9. Smith, T. W. and H. Eaber, "~1go~in Intoxication: The Re1at~onship of Clinical, Presentations to Serum Digoxin Concentration,' The Journal of Clinical II! t , 49:2377, 1970. 10. "Measuring Digoxin," IshMedlo, p. 416, Aug. .~2, 1970. 11. Chamberlain, D. A., H. J. White, M. Howard and T. W. Smith, "Determination of Plasma Digoxin Levels by Radioinimunoaasay," British H~art p~n~it~j~, 32:558, 1970. 12. Evered, D. C., C. Chapman and C. J. Hoyter, "Measuremert of Plasma Digoxin Concentration by Radioinmrnnoassay," British Medical Joirnal, p. 427, Aug. 22, 1970. 13. Doherty, J. H., W. 3. Flanigan, M. L. Murphy, R. T. Bulloch, C. L. Dalrymple, 0. W. Beard and W. H. Perkins, "Tritiated Digoxin XIV Enterohepatic Circulation, Absorption, and Excretion Studies in Human Volunteers," Ciraulatioj~, XLII:867, 1970. 14. Soloman, H. M. and S. D. Reich, "A Source of Error in Digoxin Hadloinimunoassay," T Lan~t, p. 1038, Nov. 14, 1970. 15. Doherty, J. H., "fligitalis Serum Levels: Clinical Use," Annals of Internal Medici~p~, 74:787, 1971. 16. Vitti, T.~C., D. Ba~es and T. H. Byers, "Bloavallability of Digoxin," ~~j~ew En land Journal of Me4.ic.jfLe,. 285, No. 25: 1433-1434, 1971. 12 PAGENO="0769" COMPETITIVE PROBLEMS IN THE' DRIYG `INDUSTRY 10685 17. Evered, P C. and C. Chapnmn, "Plasma Digoxin Concentrations and Digoxin Toxicity in Hospital Patients," British Heart Journal', 33:540, 1971. 18. Greenblatt., D. J., "Toward the Rational Use of Digoxin," Illinois Medical Journal, 140:114, 1971. 19. Butler, V. P., "Digoxin Radloinimunoassay," The_Lancet, p. 186, Jan. 23, 1971. 20. Beller, C. A., T. W. Smith, W. H. Abelmann, H. Haber and W. B. Hood, Jr., "Digitalis Intoxication," New j~~1and Journal of Medicine, 284:989, 1971. 21. Edmonds, T. T., P. L. Howard and T. D. Trainor, "Measurement of Digitoxin and Digoxin," New En~land Journal of Medicine, 286: 1266, 1971. 22. Smith, T. W. and J. T. Willerson, "Suicidal and Accidental Digoxin Ingestion," Circulation, XLIV:29, 1971. 23. Hoescher, R. J. and V. Praveda, "Serum Digoxin by Radiolminuno- assay," Canadianj~L Association ~ 105:170, 1971. 24. Oliver, C. C., B. M. Parker and C. W. Parker, "Radioiinmuxuoassay for Digoxin," The A~.!4can Journal of Medicine, 51:193, 1971. 25. Manninen, V., J. Helm and C. Hartel, "Serum-Digoxin Concentrations During Treatment with Different Preparations," The Lancet, p. 934, Oct. 23, 1971. 13 PAGENO="0770" 10686 CO~EPETITIVE PROBLEMS IN THE DRUG INDUSTRY 26. Hayes, C. J., W. H., Ge.rsong, W. B. $ini~th and V. P. Butler, Serum Digoxin Studies in Infants and Children," ~1etinofN~York Acade~ ience, 47:1226, 1971. 27. White, B. J., D. A. Chaniber]nin, M. Howard and I. W. Smith, `Plasma Concentrations of Digoxin after Oral Administration in the Fasting and Postprandial S-tate," British Medical Journal, p. 380, Feb. 13, 197] 28. Bertler, A. and A. Itedfors, "Plasma Digoxin Concentration," The_Lancet, p. 50, July 3, 1971. 29. Fogelman, A. N., S. Fipkelstein, J. T. LaMont, E. Eado and M. Pearce, ~"Fallibility 0 Piasma-Digoxin in Differentiating Toxic from Non-toxic Patients," The Lancet, p. 727, Oct. 2, 1971. 30. Chamberlain, D., A. Redfors, A. Bertler, J. Colbart and R. White, "The Value of Plasma-Digoxin Assay," The Lancet, p. 934, Oct. 23, 1971. 31. Evered, D. C., "The Value of Piasma-Digoxin Assay," The Lancet, p. 981, Oct. 30, 1971. 32. Smith, T. W., "The Clinical Use of Serum Cardiac Glycoside Cortcentration Measurements," The Amei~ican Heart Journal, 83, No. 6:833-837, 1971. 33. Lindenbaun, J., H. H. Mellow, M 0. Blacketone and V. P. Butler, Jr., "Variation in Biologic Availability of Digoxin from Four Preparations,' The New ~pg~nd Journal of Medicine, 285:1344-1347, 1971. 14 PAGENO="0771" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10687 34. Goldfinger, S. E., "Dissimilarities of Digoxin," The New E~~~.and Journal of Medicin (editorial), pp. 1376-77, Dec. 9, 197L 35. Whiting, B., .1. C. Rodger and D. J. Sumner, "New Formulation of Digox:En,' The Lancet, p. 922, Oct. 28, 1971. 36. Grace, N. and W. N. Weinstein, "Absorption of Digoxin," The !~~andJourna1ofMedlcJne, 286: 161, 1972. 37. Larbig, D. and L. Kochslck, "Clinical Aspects of the Radio~-immuno- chemical Determination of Serum-Digoxin Concentratiom," Deutche Medizinische Wochenschrift, 97:139, 1972. 38. Watson, F., P. Tramel and S. N. Kalman, `Identification of Submicrogram .~mounts of Digoxin, Digitoxin and Their Metabolic Products," The Jo~p~_9~ rOç~r4p~y, 69:157-163, 1972. 39. Barr, I., T. W. Smith, N. D. Klein, F. Hagemeijer and B. Lown, "Correlation of the Electrophysiologic Action of Digoxin with Serum Digoxin Concentration," The Journ~LofJ'~ ~ erime~taiThe~.~.ç~, 180, No. 3:710-722, 1972. 40. Cerceo, F. and C. A. Elloso, "Factors Affecting the Radioimmunoassay of Digoxin," Clinical Chemistry, 18, No. 6:539-543, 1972. 41. Ohnhaus, F. F., P. Spring and L. Dettli, "Protein Binding of Digoxin in Human Serum," ~~~pean Journal of Clinical_P~~r1~~~~o~~gy, 5:34-36, 1972. 42. Lader, S., A. Bye and P. Marsden, "The Measurement of Plasma Digoxin Concentration: A Comparison of Two Methods," ~ Journal of Clinical P macolq~~, 5:22-27, 1972. 15 PAGENO="0772" 10688 OOMPETIPIVE PROBLEMS IN THE DRUG INDUSTRY 43. Beermann, B., K. Helistrom, A. Rosen and B. Werner, "Elimination of Orally Administered Digoxin and Digitoxin by Thoracic Duct Drainage in Man,' Eur~pean Journal of Clinical Pharmacolo~, 5:19-21, 1972. 44. Anggard, F. E., L. F. Chew and S. M. Kalman, "A Source of Error. in Digoxin R.adioimmunoassay," ~ 287, No. 18:935, 1972. 45. Jelliffe, R. W., J. Buell and R. Kalaba, "Reduction of Digitalis Toxicity by Computer-assisted Clycoside Dosage Regimens," Annals of Internal Medicine, 77:891-906, 1972. 46. Redfors, A., "Plasma Digoxin Concentration - Its Relation to Digoxin Dosage and Clinical Effects in Patients with Atrial' Fibrillation," British Heart Journal, 34:383-391, 1972. 47. Thompson, A. J., J. Hargis, M. L. Murphy and J. E. Doherty, "Experimental Nyocardial Infarction (MI) Serum Levels and Tissue Concentration of 3H Digoxin," Clinical Research, 20:401, 1972. `48. Ojala, K., J. Karjalainen and P. Reissel, "Radioimxnunoassay of Digoxin," The Lancet, p. 150, Jan. 15, 1972, 49. Doherty, J. E., "Digoxin Availability "Like It Is"," The New and Journal of Nedi , p. 266, Feb. 3, 1972. 50. Betts, A., "The Application of Serum Digoxin Levels in Clinical Practice," the ~ 63:25, 1972. 16 PAGENO="0773" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10689 51. Manninen, V., "Tablet Disintegration: Possible Link with Biological Availability of Digoxin," Th~~n~cet, p. 490, Feb. 26, 1972. 52. Cohen, N, A., "The PlaBma-Digoxin Controversy," The La~pet, pp. 535-537, March 4, 1972. 53. Levy, R, Ft., P. M. Lutterbeck and J. Lindenbauin, "Di.goxin," The Ne~ EnRland Journal of Mçd~cine (letters to the editor), pp. 666.-667, March 23, 1972. 54. Butler, V. P., Jr., "Assays of Digitalis in the Blood," Prozr~ss in Cardiovascu~lar Diseases, XIV, No. 6:571-600, 1972. 55. Butler, V. P., "Practical Aspects of Immunological Assays," Medica]. Tirne~, pp. 59-76, May 1972. 56. Livanou, T., E. Voridis, K. Kaplanidis and C. J. Miras, "Digitalis, Toxicity," The Lancet, p. 1027, May 6, 1972. 57. Phillips, A. P., "Sources of Error in Radioimmunoassays," fl~ Lancet, pp. 1183-1184, May 27, 1972. 58. Nibble, A. C., P. Isaac and D. G. Crahanie-Smith, "Bioavailability of Digoxin," The Lancet, pp. 90-91, July 8, 1972. 59. Smith, T. W., "Contribution of Quantitative Assay Technics to the Understanding of the Clinical Pharmacology of Digitalis," Circu].ation, XLVI:188-l99, 1972. 60. ShapIro, W., K. Taubert and J~. Narahara, "Nonradioactive Serum Digoxin and Digitoxin Levels," Archives of Internal Medicine, 130:31-36, 1972. 61. Hamer, J. and D. C. Grahame-Smith, "Bioavailability of Digoxin," The ~, p. 325, Aug. 12, 1972. 17 PAGENO="0774" 10690 COMPETITIVE PROBLEMS IN THE DRUG INDUS~PRY 62. Ellis, J. L., D. Pickering and W. Triliwood, "Digitalisation of Infants," The Lancet, p. 325, Aug. 12, 1972. 63. Kolendorf, K., N. J. B. Christiansen, L. Sieraback-Nielsen and J. H. Hansen, "Serum-digoxin After Dosage Regimen Based on Body- weight and Renal Function," The Lancet, p. 326, Aug. 12, 1972. 64. Kuno-Sakai, H., H. Sakai and S. E. Ritzznànn, "Interhrence of Digitoxin with the Radloimmunoassay of Digoxiu," The Lancet, p~ 326-327, Aug. 12, 1972. 65. Shaw, T. Ft. D., H. R. Howard and J. Earner, "Variation in the Biological Availability of Digoxin," The Lancet, pp. 303-307, Aug. 12, 1972. 66. `The Bioavailability of Digoxin," The Lancet (editorial), pp. 311- 312, Aug. 12, 1972. 67. Binnlon, P. F. and H. McDermott, "Bioavailability of Digoxin," The Lancet (letters to the editor), p. 592, Sept. 16, 1972. 68. "Bioavailability and Digoxin," NewZe~landMedjp~r~n~. (editorJal), 76:203, Sept. 1972. 69. Graser, E. J., R. U. Leach and J. W. Poston, "Bloavailability of Digoxin," The Lancet, p. 541, Sept. 9, 1972. 70. Stewart, H. J. and E. Simpson, `New Formulation of Lanoxin; Expected Plasma Levels of Digoxin," The Lancet, p. 541, Sept. 9, 1972. 71. Butler, V. P., Jr., "Practical Aspects of Immunological Assays," es~1et_~~!.~if P~~ician, pp. 46-55, Sept. 1972. 18 PAGENO="0775" COMPETITIVE PROBLEMS IN THE DRrG INDUSTRY 10691 72. Krasula, R. W., P. A. Pellegrimo, A. R. Hastrieter and L. F. Soyka, `Serum Levels of Digoxin in Infante and Children," Journal of Pedlatrlcs, 81, No. 3:566-569, 1972. 73. Belier, C. A., T. W. Smith and W. B. Hood, Jr., "Altered Distribution of Tritiated Digoxin in the Infarcted Canine Left Ventricle," Circulation, XLVI:572-579, 1972. 74. Kalman, S. N., "Bioavailabiliiy of Digoxin," The Ln (letters to the editor), p. 593, Sept. 16, 1972. 75. Doherty, J. S., J. K. Bissett and T. S. Ratts, "Bloavailability of Digoxin," The La~çe~ (letters to the editor), p. 593, Sept. 16, 1972. 76. Bertier, A., A. I~edfors, S. Medin and I~. Nyberg, "Bioavailability of Digoxin," ~ p. 708, Sept. 30, 1972. 77. Shaw, T. R. D. and M. R. Howard, "Value of Plasma-Digoxin Estimation," The Lanc~t, pp. 770-771, Oct. 7, 1972. 78. Ewy, C. A., "Digitalis Therapy in the Geriatric Patient," ~ Th~j~, pp. 36-49, Oct. 1972. 79. Manninen, V., K. Ojala and P. Reissell, "New Formulation of Digoxin," The Lanc~, pp. 922-923, Oct. 28, 1972. 80. Stoll, R. G., M. S. Christensen, S. Sakinar and 3. G. Wagner, "The Specificity of the Digoxin Radioimtnunoassay Procedure," Research Communi~ci Jn~hemi~al Pathoio$y and PharmacOlQg~, 4, No. 3:503-510, 1972. 19 PAGENO="0776" 10692 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 81. Iluffrnan, D. H. and B. L. Azarnoff, "Absorption of Orally Given B igoxin Preparuti ~ , U J~rna1of the American Medical Asspciatlon, 222, No. 8:957-960, 1972. 82. Heath', R. C. and T. 3. Kleist, "Improved Radloimmunoassay of Digoxin and Other Sterol-like Compounds Using Somogyi Precipitation," Journal of Laboratory and Clinical Medicine, 80:748-754, 1972. 83. Hobsøn, 3. D. and A. Zettner, "Digoxin Serum Half-life Following Suicidal Digoxin Poisoning," Journal of~the American Medical Association, 223, No. 2:147-149, 1973. 84. Smith, T. W., "Digitalis Clycosides (First of Two Parts)," New England Journal of Medicine, 228, No. 14:719-722, 1973. 85. Sorby, D. L. and T. N. Tozer, "On the Evaluation of Biologic Availability of Digoxin from Tablets," Dru~inte11izence and Clinical Pha~acol~gy, 7:78-83, 1973. 86. Burnett, G. H., R. L. Conklin, C. W. Wasson and A. A. MacKinney, "Variability of Standard Curves in Radioimmunoassay of Plasma Digoxin," Clinical Chem~~y, 19, No. 7:725-726, 1973. 87. Vieweg, W. V. R, and J. Sode, "Evaluation of Biologic Availability of Digoxin Preparations Available to a Naval Hospital," Medical Annals of the District of Columbia, 42, No. 3:136-140, 1973. 88. Skelly, J. P. and C. Knapp, "Biologic Availability of Digoxin Tablets," Journal of the American Medical Association (editorial), 224, No. 2:243, 1973. 20 PAGENO="0777" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10693 89. "Discordances of Digoxin," ~fl the ~erican~ed~ca~ Associatiq~ (editorial), 224, No. 2:243-244, 1973. 90. Wagner, J. G., M. Christensen, E. Sakmar, D. Blair, J. Yates, P. W.~ Willis III, A. 3. Sedman and R. C. Stoll, "Equivalence LacI~ in Digoxin Plasma Levels," ~ of the Americap M~4~c~I~ Asa~ci~a~ti,~, 224, No. 2:199-204, 1973. 91. Binniozt, P. F., N. McDermott and D. LeSher, "Eioavailability of Digoxin," ~eLancet, p. 1118, May 19, 1973. 92. Smith, T. W., "Digitalis Glycosides (Second of Two Parts)," The New En~landJoul of MedIcine, 288, No, 18:942-946, 1973. 93. Manninen, V., A. Apajalahti, H. Simonen and R. Reissel, "Effect of. Propantheline and Metocloprainide on Absorption of Digoxin," ~ c~,, p. 1119, May 19, 1973. 94. Lindenbaum, J., "Bioavailability of Digoxin Tablets," Phar~acoio~c~a~ Rev~ew~s, 25, No. 2:229-237, 1973. 95. Lindenbaum, J., V. P. Butler, Jr., 3. E. Murphy and R. N. Cresswell, "Correlation of Digoxin-Tablet Dissolution-Rate with Biological Availability," ~ T.iancet, pp. 1215-1217, June 2, 1973. 96. Doluisio, J., D. Fedder, G. Manley, T. Mattei, C. Nightengale and W. Barr, "Report of the Ad Hoc Committee on Drug Product Selection of the Academy of General Practice of Pharmacy and the Academy of Pharmaceutical Sciences," JournaLp~f the ~ Associ~at4,~p, N513, No. 6:278-280, 1973. 21 PAGENO="0778" 10694 c~OMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 97. Medin, S. and I, Nyberg, "Effect of Propantheline and Metociopramidc on Absorption of Digoxin," The Lancet, p. 1393, June 16, 1973. 98. Fraser, E. J., R. H. Leach, J. W. Poston, A. M. Bold, L. S. Culank and A. B. Lipede, "Dissolution-Rates and Bloavailability of Digoxin Tablets,' The Lancet, p. 1393, June 16, 1973. 99. Colaizzi, 3. L., "Commentary on Digoxin Bloavailability," American Pha~rma~eutical Association Newsletter, 12, No. 14:3-4, 1973. 100. Johnson, B. F., J. McCrerie, H. Greer and C. Bye, "Rate of Dissolution of Digoxin Tablets as a Predictor of Absorption," 2 The Lancet, p. 1473-1475, June 30, 1973. 101. Steiness, E., V. Christensen and H. Johansen, "Bloavailability of of Digo~cin Tablets," Clinical Pharmacology and Therapeutics, 14, No. 6:949-954, 1973. 102. Colaizzi, 3. L., "Digoxin; the Bioavailability of Drug Products," American Pharmaceutical Association Bioavailabllity Pilot Project, Washington DC, American Pharmaceutical Association, July 1973. 103. Beveridge, T., R. Schmidt, F. Kalberer and E. Nuesch, "Bioavailability of Digoxin," The Lancet, p. 499, Sept. 1, 1973. 104. Shaw, T. K. D., 3. E. Carless, N. R. Howard and K. Raymond, ~!partial Size and Absorption of Digoxin," The Lan~çe~, p. 209, July 28, 1973, 105. Creenblatt, D. J., D. W. Duhme, J. Koch-Weser and T. W. Smith, "Evaluation of Digoxin Bioavailability in Single-Dose Studies," The New ~ Journal of Medicine, 289, No. l3:651-6~4, 1973. 22 PAGENO="0779" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10695 106. Sixth Interim Revision Announcement Pharniacopeia of the United States, Eighteenth Revision, Nov. 15, 1973. 107. Sanchez, N., L. B. Sheiner, H. Halkin and K. L. Melmon, "Pharmacokthe tics of Digoxin: Interpreting Bioavailability ," British Medical Journal, pp. 132-134, Oct. 20, 1973. 108. Johnson, F., A. S. E. Fowle, S. Lader, J. Fox and A. D. Munro-Faure, "Biological Availability of Digoxin from Lanoxin Produced in the United Kingdom," British Medical Journal, 4:323-326, 1973. 109. Stoll, R. G., M. S. Christensen, E. Sakmar, D. Blair and J. G. Wagner, "Determination of Bioavailability of Digitoxin Using the Radioimrnunoassay Procedure," Journal of Pharmaceutica~ Sciences, 62, No. 10:1615-1620, 1973. 110. van Oudtsitoorn, N. C. B., "Bioavailability of Digoxin," The Lan9~, 2:1153, 1972. 111. Smith, T. W. and E. Saber, "Digitalis (First of Pour Parts)," The New Eng~.and~3ourna1of Medicine, 289, No. 8:945-952, 1973. 112. Smith, T. W. amd~\ Saber, "Digitalis (Second of Pour Parts)," New England J~oW4~jte4icine 289, No. 19:1010-1015, 1973. 113. Smith, T. W. and E~ Saber, "Digitalia (Thi~d of Pour Parts)," The New En*land Journal. ~e4p~, 289, No. 20:1063-1072, 1973. 114. Smith, T. W, and E. Saber, "Digitalis (Fourth of Pour Parts)," The New En~.and Journal of Medicine, 289, No. 21:1125-1129, 1973. 115. "Opinions of R. N. Smith, A. D. Muro-Faure, D. A. Chamberlain, T. R. D. Shaw, R. H. Leach, B. P. Johnson, A. C. Cave and D. A. Cowan," The Pharmaceutic~lJQ~p~~, pp. 472-474, Nov. 24, 1973. 23 32-814 (Pt. 24) 0 - 74 - 50 PAGENO="0780" 10696 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 116 Lindenbaum J , J J Preibisz V P Butler, Jr and J R Saha Variation in Digoxin Bioavailability A Continuing Problem The Journal of Chronic Diseases, in press. 117 Thomas, R and S Aldous, "The Double Peak in the Plasma-Drug Curve After. Oral Digoxin and Lanatoside C," The Lancet, p. 1267, Dec. 1, 1973. 118. Manninen, V. and A. Karhanen, "Inequal Digoxin Tablets," The Lancet p 1268 Dec 1 1973 119 Jelliffe R W , Factors to Consider in Planning Digoxin Therapy Journal of Chronic Disease 24 407 1971 120. Memorandum of telephone conversation dated December 6, 1973, regarding Digoxin Tablet Testing for Compliance with USP Monograph, Jerome P. Skelly, Ph.D.. (Acting Supervisor, Division of Clinical Research, Office of Scientific Coordination, Bureau of Drugs, F1?A) and Arthur W. Steers, Ph.D~ (Director, National Center for Drug Analysis, FDA, St Louis) 121. "Case Study No. 113: A Composite Case Study of Digoxin Tablets," FDA Case Sti of Drug Reca1~ May-June, 1971 122. "Special. Survey Dig~xin Tablets," Food and Drug Administration Compliance Program Guidance Manual Program 7323 03, June 1, 1971 123. "Drug Quality Control: Problem with Digoxin," Food and Dru~ Administration Drug Bulletin, p. 2, Oct. 1971. 124. "Results of Content Uniformity Data on Samples Received From John Lindenbauni," April 6, 1972. 24 PAGENO="0781" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10697 125 Wagncr J Dlgoxin - Protocol No 1 University of Michigan Medial School FDA Contract CPF 69-22 Semi-Annual R~pç~, December 15 -~ June 15, 1972. 126 Summary of Digoxin Dissolution National Center ~or~g Anal~y~j~, Food and Drug Administration, St. Louis, June 12, 1972. 127. Telephone memo Skelly-Steers re Davis Edwards Digoxin Lot 24928 Content Uniformity Result' Sept 28 1972 128 Carsk~ q R "Digoxin Bioavailability Study,' Huntington Research Center, FDA Contract No 72-335 Final Report - November 1972. 129. Telephone memo Skelly-Huermann re potency and content uniformity requltq for five products dated October 27 1972 130 Bioavailability of Digoxin and Digitoxin Preparations Compliance Program Guidance Manual Program Circular 7323/l4A Tran'mittal 72-126 December 1 1972 131 Rate of Dissolution of Digoxin Tablets from Five Manufacturers by Basket and Paddle Methods," National Center fo~ru~~~ysis, December 28, 1972. 132 Digoxin Dissolution - Hand Method NationaJ~Cen~r for Drug Analysis Feb 8, 1973 133 Results of Digoxin Tablet Dissolution Tests, National Cente~ for Drug Analysis March 13 1973 134. Wood, John, "Digoxin Food and Drug Administration Contract 72-334," Medical College of Virginia, Final Report dated March 15, 1973. 25 PAGENO="0782" 10698 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 135. "Digoxin Tablet Content Uniformity and Dissolution Data using Paddle/Water and Round Bottom Flask," National Center for ~ Ana~y~4~, Weekly Compillatlons dated April 24, 1973 through June 6, 1973 and Final dated June 13, 1973. 136. "Content Uniformity Results and Dissolution Results Digoxin Tablets," National Center for Dru~Analy~is, June 11, 1973. 137. "Comprehensive Survey of U~A Digoxin Tablet Dissolution Characteristics," National Center for Drug Analysis, June 1973. 138. "Digoxin Tablet Dissolution - Premo Lots Al0337 and A13l37," NatIonal Center for Drug An4y~is, memo dated August 29, 1973. 139. "Digoxin Tablet Dissolution Data on Samples~ from Lots Studies by Dr. John Lindenbaum," National Center for Dr~ Ana~yais, September 21, 1973. 140. "Digoxin Tablet Dissolution Results of Collaborative Study," National Center for Drug Anal~ysis, September 24, 1973. 141. "Digoxin Tablet Dissolution Data using Paddle/Acid and Round Bottom Flask," National Center for Drug An4ysis, compilation dated October 12, 1973. 142. "Digoxin Tablet Dissolution Data using USP Method," National Cep~~ for DruR Analy a, October 31, 1973. 143. "PrIority Request for Samples of Digoxin Tablets US?," Division of Regulatory Operations, Office of Compliance, October 25, 1973. 26 PAGENO="0783" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10699 144. "Digoxin Tablet Dissolution - Comparison of Results by Round Bottom Flask and Paddle - water vs 0.6% v/v Nd," National Center for Dru~Analy!~, November 1, 1973. 145. "Digoxin Tablet Dissolution - Premo Lots A10337 and Al3l37," National Center for Drug Analy~~, November 19, 1973. 146. "Special Survey Digoxin Dissolution," National Center for Dr~g Analysis, Report No. 036 (final), December 13, 1973. 147. "Health Protection Branch Information Letter," Morrison, A. B., Assistant Deputy Minister Health and Welfare, Canada, December 14, 1973. 148. "Requirements for Digoxin Tablets," Director-General of Pdblic Health, Pharmaceutisch Weekblad (Netherlands), 108:1122-1124, Nov. 30, 1973 (translation by Joseph Levine, Dec. 28, 1973). 149. Representative Data Correlating Dissolution and Peak Blood Levels, undated. 150. Wood, John, Virginia Commonwealth University, "Digoxin (FDA Contract 73-244)," reports dated Jan. 10, 1974. The two methods for in vitro dissolution tests referred to in the preamble, namely the "paddle-water" and the "paddle-acid" methods, are set forth in § 130.51(h). 27~-29 PAGENO="0784" 10700 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Therefore pursuant to provisions of the 1~edera1 Food Drug and Cosmetic Act (sees. 201(p), 501(b), 502, 505, 701(a); 52.Stat. 1041-1042, 1049-1053, 1055; 21 U.S.C. 321(p), 351(b), 352, 355, 371(a)) andunder authority delegated to the Commissioner (2] CFR 2.120), Part 130 of Title 21 of the Code of Federal Regulations is amended by adding a new § 130.51 as follows: § 130 51 Digoxin products for oral use conditions for marketin.g (a) Studies have shown evidence of clinically significant differences in bioavailabflity in different batches of certain marketed digoxin products for oral use from single manufacturers as well as in batches of these products produced by different manufacturers. These differences were observed despite the fact that the products met compendial specifications Other studies have shown that there is a sufficient correlation between bioavai1~tbil1ty in vivo and the dis'~olution rate of digoxin tablets in vitro to make the dissolution test an important addition to the compendial standards Because of the potential for serious risk to cardiac patients using digoxin products which may vary in bioavailability, the Commissioner of Food and Drugs has determined that immediate action must be taken to assure the uniformity of all digoxin products for oral use The Commissioner is of the opinion that digoxin products for oral use are new drugs within the meaning of section 201(p) of the Federal Food Drug and Cosmetic Act for which approved new drug applic-itioms are required The Commissioner has determined that,. because of questions raised regarding the bioavailability of digoxin products for bral use, there is sufficient evidence to invoke 30 PAGENO="0785" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10701 the authority under section 505(j) of the act to fully investigate this question and, to facilitate a determination of whether there is a ground for withdrawal of approval of the drug product under section 505(e) of the act. Marketing of these products may be continued only under the following conditions: (1) Digoxin products for oral use, other than tablets: Any person marketing digoxin products for oral use, other than tablets, shall submit to the Food and Drug Administration on or before (insert date 30 days after the date of publication in the FEDERAL REGISTER), an abbreviated new drug application for these products. Any such drug product then on the'market which is not the subject of an application submitted for the d'rug product shall be subject to regulatory procedures under section 505 of the act. In addition to the information specified in § 130.4(f), the application shall contain: (i) A full list of the articles used as components of the digoxin product, specifications for components, detailed identification and analytical procedures used to assure that the components meet established specifications of identity, strength, quality, and purity and a complete description of the manufacturing process. (ii) The source of the digoxin used in the formulatipn including the maine and address of the supplier. (iii) A statement that stability studies will be conducted to establish a suitable expiration date for the digoxin product in the form in which it is distributed. 31 PAGENO="0786" 10702 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY (iv) A statement that the product label will contain a suitable expiration date. In the absence of any stability test data, this expiration date shall be no longer than one year after the batch is manufactured. If the expiration date is greater than one year, supporting stability data shall be included in the application. (v) Labeling that is in compliance with all requirements of the act and regulations promulgated thereunder, the pertinent parts of which are as indicated in paragraph (e) of this section. (vi) A statement that the applicant will initiate recall of all stocks of the drug product outstanding when so requested by the Food and Drug Administration. (vii) A statement that the applicant intends to conduct in vivo bioavailabillty tests and that the applicant, under the records and reports provisions of section 505(j) of the act, will: (a) Within 30 days after the submission of the application, submit to the Food and Drug Administration the protocol which the applicant proposes to follow in conducting these in vivo bioavailability tests. The protocol shall contain all of the essential elements set forth in paragraph (d) of this section. The tests shall not be initiated prior to receiving notifica- tion from the Food and Drug Administration that the bioavailability protocol has been reviewed and either approved or its deficiencies delineated. (b) Within 180 days after receiving notification from the Food and Drug Administration that the bioavailabflity protocol has been reviewed, submit to the Food and Drug Administration the results of the in vivo bioavailability tests. 32 PAGENO="0787" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10703 (2) Digoxin tablets: Any person marketing digoxin tablets, ~n addition to complying with all of the requirements of paragraph (a)(l) of this section, shall include in their abbr~viated new drug application: (i) A statement that the applicant will establish procedures to test each lot of .digoxin tablets prior to releasing the batch for distribution to assure that the batch meets all of The United States Pharmacopeia (USP XVIII) requirements for digoxin tablets including, but not limited to, potepcy, content uniformity, and dissolution and that the quantity of digoxin dissolved at one hour is not more than 95 percent of the assayed amount of digoxin or that the quantity of diEoxin dissolved at 15 minutes is not more than 90 percent of the assayed amount of digoxin. (ii) A statement that Hnished product specifications shall be established to include provisions to assure that the range of average one- hour dissolution values among batches of digoxin tablets does not exceed 20 percentS (3) Before releasing for distribution any batch of digoxin tablets manufactured after (insert date of publication in the FEDERAL REGISTER), the manufacturer shall: (i) Test a sample of the batch to assure that the batch meets all of the requirements of The United States Pharmacopeia (US? XVIII) including, but not limited to, potency, content uniformity, and dissolution and that the quantity of digoxin dissolved at one hour is not more than 95 percent of the assayed amount of digoxln or that the quantity of digoxin dissolved at 15 minutes is not more than 90 percent of, the assayed amount of digoxin. 33 PAGENO="0788" 10704 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY (ii) Submit a sample of the batch to the Food and Drug Administration according to the procedures set forth in paragraph (g) of this section. Results of tests conducted on the batch by or for the manufacturer and the batch production record shall accompany the sample. (iii) Withhold the batch from distribution until he is notl,fied by the Food and Drug Administration that the sample was tested and found to meet all of the requirements in The United States Pharmacopeia (USP XVIII) for potency, content uniformity, and dissolution and that the quantity of digoxin dissolved at one hour is not more than 95 percent of the assayed amount of digoxin or that the quantity of digoxin dissolved at 15 minutes is not more than 90 percent of the assayed amount of digoxin. 34 PAGENO="0789" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10705 (iv) Submit a sample of each batch of digoxin tablets as provided for in paragraphs (a)(3)(ii) of this section until he is notified by the Food and Drug Administration that he is released from the certification program. This notification will be made on the basis of sample test results, inspectional findings regarding compliance with current good manufacturing practice, and compliance with all oth~tr requirements of this section and any other directives issued by the Food and Drug Adminis- tration as a condition for release from the certification program. (4) Any manufacturer who has distributed any batch of digoxin tablets which does not meet the compendial requirement for dissolution, when tested by the method in The United States Pharmacopeia (USP XVIII), shall initiate recall of the subject batch when so requested by the Food and Drug Administration. (b) Failure of an applicant to submit the protocol and/or the results of the in vivo bioavailability tests showing adequate evidence of the product's hioavailahility within the times specified in paragraph (a) (l)(vii) of this section and/or to comply with all of the certificiation requirements of paragraph (a)(3) of this section shall be justification for withdrawal of approval of the application under section 505(e) of the act. (c) Any product reformulation or change in manufacturing process will require the submission of a supplement to the approved abbreviated new drug application containing adequate data to demonstrate the bioavail- ability of the reformulated product. Food and Drug Administration approval of the supplement is required before the reformulated product is marketed. The Food and Drug Administration recommends that, where digoxin tablets are reformulated, manufacturers reformulate their -V--- 35 PAGENO="0790" 10706 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY product to achieve dissolution of 70 to 90 percent at one hour when testc' by all three methods (i e the IJSP method and the paddle-water and `paddle-acid methods) described in paragraph (h) of this section (d) The protocol for the in vivo bioavailability tests required in paragraphs (a) and (c) of this section shall employ a three-way crossover design using the digoxin test product a reference digoxin tablet supplied on request, by the Food and Drug Administration and bulk digoxin USP in an oral solution Appropriate venous blood and urinary samples are to be collected and analyzed The method shall be capable of detecting the difference between the reference tablet and the reference oral solution Bioavailability of the test product shall be demonstrated if a mean a1~sorption of at least 75 percent of the combined mean of the two reference standards is observed Assistance in developing a protocol for a particular dosage formulation may be obtained by contacting the Food and Drug Administration Bureau of Drugs (HFD-220) 5600 Fishers Lane Rockville MD 20852 (e) Parts of the digoxin product labeling indicated below shall be substantially as follows: CARDIAC (DIGJ'IALIS) CLYCOS1DES LABELING GUIDELINE (ADULT) DESCRIPTION The cardiac (or digitalis) glycoside~ are a closely related group of drugs having in cousnon specific and powerful effects on the inyocardium. These drugs are found in a number of plants The term digitalis ía used to designate the whole 36 PAGENO="0791" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10707 group. Typically, the glycosides are (omposed of three portions, a steroid nucleus, a lactone ring, and a sugar (hence "glycosides"). (This section should include a chemical and physical description of digoxin and the same quanti- tative ingredient information as that required on the label.) ACTION The digitali~ glycosides have qualitatively the same therapeutic effect on the heart. They (1) increase the force of myocardial contraction, (2) increase the refractory period of the atrioventricular (A-V) node, and (3) to a lesser degree, affect the sinoatrial (S-A) node and conduction system via the parasympathetic and sympathetic nervous systems. GastrointestLnal absorption of digoxin is a passive process. Absorptiott of digoxin from tablets is 50-75 percent. Digoxin is only 20-25 percent bound to plasma proteins and is predominantly excreted by the kidneys unmetabolized unless there is significant renal failure. Renal excretion of digoxin is proportional to glomerular filtration rate and is largely independent of urine flow. Digoxin is not effectively removed from the body by dialysis, exchange transfusions or during cardiopulmonary bypass presumably because of 31 PAGENO="0792" 10708 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY tissue binding. In subjects with normal renal function digoxin is excreted exponentially with an average' half-life of 36 hours resulting in the loss of 35-40 percent of the body stores daily. Serum levels and pharmacokinetics are essentially unchanged by massive weight loss suggesting that lean body mass should be used in dosage calculations The peak blood level from oral dosing with tablets occurs 1-3 hours after administration The onset of therapeutic action of digoxin after oral tablets is 1-2 hours with the peak therapeutic effect occurring 6-8 hours after dosing. sNsstcsTsolOs C. I tfil Ilic°' Is the primary indication. The increased car- diac output results in dissresio and general amelioration of the disturbances character- istic of right (venous congestion, edema) and left (dyapnea, orthopnea, cardiac ssth- ma) heart fs.iisre. Digitalis, generally, is most effective in `low output' failure and less effective in "high. * output" (hronchopslmonary insufficiency, infection. hyperthyrsidism) heart failure. DigitalIs should he continued after failure * is abolished sinless souse known preciptt.at.inx factor Is corrected. 2. "Atrial llbr)llotiois" -especially wticis the ventricular rate is elevated, Digitalis rapidly reduces ventricular rates and eliminates the pulse deficit. Palpitation, precordiai distress or weakness are relieved and any concsm- I mitant sg Ci f l(t m 110 t d Digitalis is contnesed in doses necessary to maintain the desired ventrIcular rat.e and us ~a. 3 ~ 115 cli Ii I t e,nti reg';as' v_u u.s rhythm rs,~y appear - `.~r It ,y~, 5etS,5c ~`, atrat tsyppt d I tt'ispoi ref ct towed by reavuratiun `it sinus rhythm, espe- cially it the flutter was of the parovysrssst type. ii i~s prefersshte, however, to contlsso digitalis if failure ensues or If atrial flutter is a frequent occurrence. 4. "Paroxysmal atrtal tauhycardia" dtgitalio may be used, eapecivily if It is resistant to lesser measures. Depending sn tue urgency, a more rapid acting parenterai preparation may be preferable to initiate digitalization, althougb I! faUure 5ia~ ensued or parosysrns recur frequently, digitalis is maintained by oral adn'ilnistrat,ion. 38 PAGENO="0793" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10709 Digitalis I~ not Inclictird in sinus tach~- media or premature cys1olec in the absence of heart failure. `Cardiogenic shock-the value of digitalis is not established, but the drug is often em- ployed, especially When the condition is ac- oontpanied b~ pulmonary edema, Digitalis seems to adversely affect shook due to infec- tions. CONTRAINDICATIONS The presence of toxic effects (See "Overdosage") ind.uced by any digitalis preparation is an absolute contraindication to all of the glycosides. Allergy, though rare, does occur. It may not extend to all preparations and another may be tried. Ventricular Fibrillation. Ventricular tachycardia, unless congestive failure supervenes after a protracted episode not Itself due to digitalis. WARNINGS Many of the arrhythmias for which digitalis is advised are identical with those reflecting digitalis intoxication, If the possibility of digitalis intox- ication cannot be excluded, cardiac glycosides should be temporarily withheld if permitted by the clinical situation. The patient with congestive heart failure may complain of nausea and vomiting. These symptoms may also be indications of digitalis intoxication. A clinical determination of the cause of these symptoms must be attempted before further drug administration. 39 PAGENO="0794" 10710 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Patients with renal insufficiency are apt to be unusually sensitive to digoxin. See Action Section for mechanism. l'5~At1 `IONS "Potassium depletion Rensitices the myo- eardium to digitalis and toxicity is apt to de- velop even with usual dosage. Hypokuiensis also tends tp reduce the positive inotropic effect of digitalis. Potassium wastage may result from diu- retic, corticosteroid, hemodialysis and other therapy. It is apt to accompany malnutri- tion, old age and long-standing congestive heart failure. "Acute myocardial infarCtion," severe pul- monary disease, or far advanced heart failure are apt to be more sensitive to digitalis and more prone to disturbances of rhythm. "Calcium" affects contractility and cxeita./ hiiity of the heart in a manner similar to that of digitalis. Calcium may produce son- oslo arrhythmias in digitalized patients. "Myxedema"-Digitails requirements are less because excretion rate is decreased and blood levels are significantly higher. "Incomplete AV block' especially pa- tients subject to Stokes Adams attacks, nosy develop advanced or complete heart block. Heart failure in these patients can usually be controlled by other measures and by in- creasing the heart rate. `Chronic constrictive pericarditis," is apt to respond unfavorably. "Idiopathic hypertrophic aubsortix steno- art" must he managed extremely carefully. tlniesa cardiac failure is severe it is doubtful whether digitalis should be employed, "lten~l insufficiency" delays the excretion of digitaiis and dosage must be adjusted ac- cordingly in patients with renal disease. NoTe: This applies also to potassium ad- ministration should it become necessary. Electrical conversion of arrhythmias may require adjustment of digitalis dosage. ADVERSE REACTIONS Gynecomastia, uncommon. Overdosage or toxic effects. Gastrointestinal-- dtiorexia, nausea, vomiting, diarrhea are the most counnon early symptioms of overdosages in the adult (but rarely conspicuous in infants). Uncontrolled heart failure nay also produce such symptoms. Central Nervous System - headache, weakness, apathy, visual disturbances. 40 PAGENO="0795" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10711 CRrdiac Disturbances (Arrhythmias)-- ventricular premature beats is the most connuon, except in infants and young children. Paroxysmni and nonparoxysmal nodal 1 rhythms, atrioventrichiar (inference) die. sociation and paroxysmal etrial tachycardia (PAT) with 1nk nc niso common arrhyth- miss due to digitalis overdoeage. Conduction Disturbances-exCeisiVe slow. Ing of the pimise is a clinical sign of digitalis overdosage. Atrioventricuiar block of increas- ing degree, may proceed to complete heart block Novz: The electrocardiogram is fundamen- tal in determining the presence end nature of these toxic disturbances. Dtgitalie may also induce other changes (as of the ST seg- ment), but these provide no measure of the degree of digitalization. 41 32-814 (Pt. 24) 0 - 74 - 51 PAGENO="0796" 10712 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY TREATMENT OF ARRHYT1Th~IAS PRODUCED BY OVERDOSAGES Digitalis is divcontinued until aft r all signs of to i ity a h ii hed This may be all that is necessary If toxic manifestation are not severe and appear after the time for peak effect of the drug. Potassium salt re mmonly used Potas slum chloride in divided doses totaling 4 to 6 gm for adults (See Pediatric Information for children) provided renal function is adequate. When Correction of the arrhythmia is ur- gent potassium Is administered Intrave n usly in a solution of 5 percent dextrose in water a total of 40-100 mEq (40 mEq per 500 ml.) at the rate of 40 mEq. per hour unless limited by pain due to local irritation. Additional amounts may be given If the arrhythmia is uncontrolled and the potas- slum well tolerated Electrocardlographl m nit ing is mdi cated to avoid potassium toxicity, e.g. peak- tog of T wave C UT ON Potassium should not be used and may be dangerous for severe o c mplete heart hi k du to digitalis sod not elated to any tachycardla. Chelating agents to bind calcium may also be used to counteract the arrhythmia effect of digitalis toxicity, hypokalensia and of elevated serum calcium which may also pre- cipitate digitalis toxicity. Pour grams (0.8 percent solution) of the disodium salt of EDTA is dissolved in 500 nil, of 5 percent dextrose in water (50 mg per * ml.) and administered over a period of 2' hours unless the arrhythmia is controlled before the infusion Is completed, A continuous electrocardiogram should be observed so that the infusion may be * promptly stopped When the desired effect is achieved Other counteracting agents are assIssd1~n~.~ Quinidine procainamide, and beta adrenergic blocking agents DOSAGE AND ADMINISTRATION Oral dig4talis is administered slowly or rapidly as required until the desired therapeutic effect is obtained without symptoms of overdosage The amount can be predicted approximately from the weight of the patient with allowances made for excretion during the time taken to induce digitaltzation Subsequent maintenance dosage is also determined tentatively by the amount necessary to sustain the desired therapeutic effect * 42 PAGENO="0797" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10713 Recommended dosages are practical average figures which may require considerable modification as dictated by individual sensitivity or associated conditions. (See Warning Precautions.) The average digitalizing dose with digoxin tablets is 1.25-1.5 milligrams. Digitalization may be accomplished by several approaches. A dose of 1.0 milligram orally usually produces a digitalis effect in 1-2 hours and becomes maximal in 6-8 hours. Additional doses of 0.25 or 0.5 milligram may be given at 6-8 hour intervals to full digitalization. The usual daily oral maintenance dose is 0.25-0.5 milligram. For previously undigitalized patients, in- stitution of daily maintenance therapy without a loading dose results in development of steady-state plateau concentrations in about seven days in patients with normal renal function. By giving 0.75 milligram digoxin daily in divided doses the desired therapeutic affect may be achieved in a previously undigitalized patient with normal renal function in 4-5 days. It cannot be overemphasized that the values given are averages and substantial individual variation can be `expected. (If pediatric dosage is available the labeling sections above should be expanded to include the following information.) 43 PAGENO="0798" z 0 ~Ph o~ g 0 1~ 0 0 0 ~ 0 z 0 cli PAGENO="0799" 0 ~ 0 g ID ~ ~ ~ ~ ~1~I ~ C,' CO PAGENO="0800" 10716 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY (f) Abbreviated new drug applications shall be subi~itted to the Food and Drug Administration, Bureau of Drugs, Office of Scientific. Evaluation, Generic Drug Staff (HFD-107), 5600 Fishers Lane, Rockville, MD 20852. (g) All samples of digoxin tablets required by paragraph (a)(3) of this section to be submitted to the Food and Drug Administration shall be hand]ed as follows (1) The sample shall consist of 6 cubbamples of 1000 tablets each collected at random from throughout the manufacturing run. Each of the 6 subsaniples shall be identified with the name of the product, the labeled potency, the.date of manufacture, the batch number, and the name and address of the manufacturer. (2) The sample together with the batch production record and results of all testb onducted by or for the manufacturer to determine the product's identity, strength, quality, and purity, content uniformity and dissolution shall be submitted to the Department of Health, Education, and Welfare, Public Health Service,FDA National Center for Drug Analysis, 1114 Market St., St Louis, MO 63101. The outer wrapper shall bc identified SAMPLE -- DICOXIN GERIIFICATION (h) ThE Food and Drug Administration is aware of data with two in vitro methods, in addition to that described in The United States Pharniacopsia (liSP XVIII), developed to measure digoxin tablets dissolution. 46 PAGENO="0801" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10717 fhese two lfletI)ods the so-called paddle-water and paddle-add mcthod~ .ne describd below and are identical with the exception of the nature of the dissolution meulum used in the procedures (i e distilled or deionized water vs. dilute hydrochloric acid (0.6 percent volume/volume)). The dissolution apparatus used in these two methods differs significantly from the apparatus described in the method in the compendium. The Food. and Drug Administration Is aware that the three methods (i.e., USP, `paddle-water and paddle-acid ) show significant differences in dissolution in comparative tests on some formulations Definitive bloavaiiabi]Ity data to compare the relative value of each of these methods to predict bioavailability of the few formulations where the methods show significant differences in dissolution rate are not now available Manufacturers who conduct research utilizing the "paddle~- water' and `paddle-acid" methods, particularly in comparison with the method in The United States Pharmacopeia shall submit any data obtained usinh. t1es~ n,Ethodq to the Food and Dr~ig Administration pursuant to section 505(1) of the act (1) ~ (NOTE Throughout this procedure use scru~ulously ciean glassware, which previously has been rinsed with dilute hydrochloric acid, distilled or delonired water, then with alcohol, and carefully dried Take precat&tions to prevent c~tamination from airborne f)uoresert particles and from metal ~nd ru~ber surfaces The apparatus consists of a su.it~ble water bath, a 1000 milliliter 47 PAGENO="0802" 10718 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY glass vessel (Kimble Glass No. 26220 or equivalent), a motor, and a polytetrafluoroethylene stirring blade (Sargent S-76637, Size B, 3 inch length; or equivalent) on a glass stirring shaft (Sargent 5-76636, 14.5 inch length; or equivalent). The water bath may be of any convenient size that permits keeping the water temperature uniformly at 37° C. + 0.5° C. throughout the test. The vessel is spherical, and is provided with three ports at the top, one of which is centered. The lower half of the vessel is 65 millimeters in inside radius and the vessel's nominal capacity is 1000 milliliters. The glass stirring shaft from the motor is placed in the center port, and one of the outer ports may be used for insertion of a thermometer. Samples may be removed for analysis through the other port. The motor is fitted with a speed-regulating device that allows the motor speed to be held at 50 rpm + 2 rpm. The motor is suspended above the vessel in 8uch a way that it may be raised or lowered to position the stirring blade. The glass stirring shaft is 10 mull- meters in diameter and about 37 centimeters in length. It must run true on the motor axis without perceptible wobble. The polytetrafluoroethylene stirring blade is 4 millimeters thick and forms a section of a circle, whose diameter is 83 millimeters and which is subtended by parallel chords of 42 and 77 millimeters. The blade is positioned horizontally, with the 42-millii~eter edge down, 2.5 centimeters + 0.2 centimeter above the lowest inner surface of the vessel. 48 PAGENO="0803" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10719 (2) Reagents--(i) Dissolution medium. For "paddle-water," use distilled or deionized water. For "paddle-acid," use dilute hydrochforic acid (0.6 percent volume/volume). Use the same batch of dissolution medium throughout the test. (ii) Standard solution~. Accurately weigh approximately 25 milligrans of The United States Pharmacopeia Digoxin Refetence Standard, dissolve in a minimum amount of 95 percent ethanol in a 500 milliliter volumetric flask and add 95 percent ethanol to volume and mix. Dilute 10.0 milliliters of this first solution to 100.0 milliliters with 95 percent ethanol and mix for the second solution. Just prior to use, individually dilute 1.0, 2.0, 3.0, 4.0, and 5.0 milliliter aliquots of the second solution with dissolution medium to 50.0 milliliters. These solutions are equivalent to 20, 40, 60, 80, and 100 percent of dissolution, respectively, for a 0.25 milligram digoxin tablet. (iii) Extraction solyient. Prepare a solvent containing 6 volumes of chloroform, analytical reagent grade, with 1 volume of n-propyl alcohol, analytical reagent grade. (iv) Ascorbic acid-methanol solution. Prepare a solution containing 2 milligrams of ascorbic acid, analytical reagent grade, per 1 milli- liter of methanol, absolute, analytical reagent grade. 49 PAGENO="0804" 10720 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY (v) ~y~4rochloL~c acid~ ~ (vi) ~ydrosen peroxide-methanol soluti~. On the day of use, dilute 2.0 milliliters of recently assayed 30 percent hydrogen peroxide, reagent grade, with methanol, absolute, analytical reagent grade to 100.0 milliliters. Store in a refrigerator. Just prior to use, dilute 2.0 millIliters of *this solution with methanol to 100.0 milliliters. (3) Procedure--(i) Dissoluti~p. Place 500 milliliters of dissolution medium in the vessel, immerse it in the constant-tempera- ture bath set at 37° C. ± 0.5° C., and allow the dissolution medium to assume the temperature of the bath. Position the shaft so that there is a distance of 2.5 centimeters ± 0.2 centimeter between the midpoint of the bottom of the blade and the bottom of the vessel. With the stirrer operating at a speed of 50 rpm ± 2 rpm, place 1 tablet into the flask. After 60 minutes, accurately timed, withdraw 25 milliliters, using a glass syringe cpnnected to a glass sampling tube, of solution from a point midway between the stirring shaft and the wall of the vessel, and approximately midway in depth. Filter the solution promptly after withdrawal,, using a suitable membrane filter of not greater than 0.8 micron porosity (Millipore AAWP 025 00, or equivalent), mounted in a suitable holder' (Millipore Swinnex SXOO 025 00, or equivalent), discarding the first 10 milliliters of filtrate. This is the' test solution. Repeat the dissolution procedure on 5 additional tablets. 50 PAGENO="0805" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10721 (ii) Extraction Transfer 10 0 milliliters of each of the six filtrates 10 0 milliliters of each of the five standard solutions and 10 0 milliliters of dissolution medium to provide a blank in separate 60-milliliter separators Extract each solution with two lO-miili]iter portions of extraction solvent. Combine the extracts of each solut:ion in separate glass-stoppered, 50-milliliter conical flasks, and evaporate on a steam bath with the aid of a stream of nitrogen to dryness, rinsing the sides of the flasks with extraction solvent Take care to ensure that all traces of solvent are removed, but avoid prolonged heating For convenience the residues may be stored in a vacuum desiccator overnight (iii) Measurement of fluorescence Begin with the standard solutions and keep all flasks in the same sequence throughout so that the elapsed time from addition of reagents to reading of fluorescence is the same for each Carry the test solutions standard solutions and the blank through the determination in one group Add the following three reagents in as rapid a sequence as possible swirling after each addition treating 1 flask at a time in the order named 1 0 milliliter of ascorbic aci4-methanol solution, 3.0 milliliters of concentrated hydrochloric acid and 1 0 milliliter of hydrogen peroxide-methanol solution Insert the stoppers in the flasks and after 2 hours, measure the fluorescence at about 485 miilimicrons using excitation at about 372 millimicrons In order to provide a check on the stability of the fluoroineter reread one or more standard solutions Correct each reading for the blank and plot a standard curve of fluorescence versus percentage dissolution. Determine the perceñtage dissolution of digoxin in the test solutions by reading from the standard graph 51 PAGENO="0806" 10722 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY (1) Digoxin tablets formulated so that the quantity of digoxin dissolved at one hour, when tested by the method in The United States Pharmacopeia (USP XVIII), is greater than 95 percent of the assayed amount of digoxin or so that the quantity of digoxin dissolved at 15 minutes is greater than 90 percent of the assayed amount of. digoxin are new drugs which may be marketed only with an approved full new drug application as provided for in § 130.4. The application shall include, but not be limited to, clinical studies establishing significantly greater bioavailability' than digoxin tablets meeting compendial requirements and dosage recommendations based on clinical studies establishing the safe and effective use of the more bioavailable digoxin product. Marketing of these digoxin products will be~ allowed only under a proprietary or trade name, established name, and labeling which differs from that used for digoxin tablets that meet all of the requirements in The United States Pharmacopeia (USP XVIII) and that are formulated so that the quantity of digoxin dissolved at one hour is not mOre than 95 percent of the assayed amount of digoxin or so that the quantity of digoxin dissolved, at 15 minutes is not more than 90 percent of the assayed amount of digoxin. New drug applications for these digoxin products shall be submitted to the Food and Drug Administration, Bureau of Drugs, Office of Scientific Evaluation (}IFD-lOO), 5600 Fishers Lane, Rockville, MD 20852. 52 PAGENO="0807" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10723 Effective date. This order shall be effective (insert date of pp~,~t1pnjn thQ FEDERAL REGISTER). The Commissioner finds that immediate compliance with the requirements of this regulation is necessary to protect the public health and, therefore, notice, time for public comment, and delayed effective date are impracticable, unnecessary, and contrary to the public interest. Comments on this regulation may be submitted to the Hearing Clerk, Fc3od and Drug Administration, Room 6..86, 5600 Fishers Lane, Rockville, MD 20852, on or before (insert date 3Q d~ys after date of publication in the FEDERAL REGISTER). Comments received and supportive materials may be seen in the above office during working hours, Monday through Friday. Comments received may result in modification of this section. (Secs. 201(p), 501(b), 502, 505, 701(a), 52 Stat. 1041-1042, 1049-1053, 1055; 21 U.S.C. 321(p), 351(b), 352, 355, 371(a).) Dated: ~A I Q,~iT7~/~. 7 ~AN1OW4 ________ A. M. Schmidt Commissioner of Food and Drugs 53 PAGENO="0808" 10724 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY EXHIBITS PROVIDED BY THE AMERICAN PHARMACEUTICAL ASSOCIATION STATEMENT OF THE AMERICAN PHAI~MACE1JTICAL ASSOCIATION TO THE SUBCOMMITTEE ON MONOPOLY OF THE SELECT COMMITTEE ON SMALL. BUSINESS ~F THE UNITED STATES SENATE 93RD CONGRESS1 2ND SESSION WASHINGTON1 D C. F~J~UARV 21~ 1974 MR CHAIRMANI MEMBERS OF THE SUBCOMMITTEE I AM DR EDWARD G FELDMANN~ ASSOCIATE EXECUTIVE DIRECTOR FOR SCIENTIFIC AFFAIRS OF THE AMERICAN PHARMACEUTICAL ASSOCIATION (APHA), THE NATIONAL PROFESSIONAL SOCIETY OF PHARMACISTS IN THE UNITED $TAT~S. You HAVE.REQUESTED THAT WE DISCUSS THE VIEWS OF THE AMERICAN PHARMACEUTICAL ASSOCIATION ON THE POTENTIAL VALUE AND USEFULNESS TO PHARMACY PRAcTITIONERS QF DATA AND INFORMATION -1- PAGENO="0809" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10725 SECURED BY THE DEFENSE PERSONNEL SUPPORT CENTER (DPSC) OF THE DEPARTMENT OF DEFENSE. IN ORDER TO PROVIDE A FRAME OF REFERENCE FOR OUR RESPONSE, AS WELL AS OUR INTEREST IN OBTAINING SUCH DATA AND INFORMATION FROM DPSC RELATIVE TO DRUG PRODUCTS AND PHARMACEUTICAL MANUFACTURERS, PERMIT ME TO DESCRIBE BRIEFLY OUR ONGOING INVOLVEMENT AND ACTIVITIES IN THE AREA OF DRUG PI~ODUCT QUALITY. THE VERY FIRST OBJECT LISTED IN BOTH THE APHA CERTIFICATE OF INCORPORATION AND THE APHA CONSTITUTION IS DIRECTLY ADDRESSED TO THIS MATTER, SPECIFICALLY, OBJECT A OF THE ASSOCIATION'S CONSTITUTION READS AS FOLLOWS: Article II. Objects. This ASSOCIATION shall exist for the following purposes: A. To aid in improving, promoting, and safeguard- ing the public health and welfare in every practical manner and by all practical means- I. By maintaining a compendium of standards and specifications calculated to promote the safety, efficacy, and purity of drugs, to be known as the National Formulary. Criteria for establishing such stan- dards and specifications, and procedures to be followed In qualifying an article for admission to the National Formulary, shall be established by a Board, elected by the Board of Trustees, to be known as the National Formulary Board; and 2. By promoting the safe use of drugs and aiding In the detection and prevention of adulteration and misbranding of drugs and medicines, and by taking such steps, as an ASSOCIATION and In cooperation with other organizations, as will assure the production and distribution of drugs and medicines of the highest quality, in a manner consistent with practices deemed reasonably necessary to ensure their purity and safety. SINCE ITS FOUNDING 122 YEARS AGO, APHA HAS PURSUED A CONSISTENT AND RELENTLESS EFFORT NOT ONLY TO FERRET OUT AND IDENTIFY ADULTERATED AND MISBRANDED DRUGS BUT ALSO TO -2- PAGENO="0810" 10726 COMPETITIVE PROBLEMS IN THE DRUG INDUSTR'~ DISSEMINATE AND PUBLICIZE SUCH INFORMATION TO THE PHARMACY PROFESSION... IT HAS BEEN OUR FIRM BELIEF THAT S:UCH INFORMATION IS NECESSARY IF PHARMACISTS ARE TO PRACTICE THEIR PROFESSION MOST CAPABLY AND IF THE PUBLIC IS TO BE BEST SERVED WITH PHARMACEUTICAL PRODUCTS WHICH ARE BOTH EFFECTIVE AND SAFE (SEE EXHIBIT A~APPENDED AS ILLUSTRATION OF ARTICLE FROM AUGUST 1960 APHA JOURNAL EXPOSING UNQUALIFIED DRUG MANUFACTURERS). MOREOVER,' THE ASSOCIATION EACH MONTH PUBLISHES LISTS OF FDA DRUG RECALLSS COMPLETE WITH PERTINENT:ANCILLARY INFORMATION PERTAINING TO EACH RECALLS IN ORDER TO ENSURE PROMPT AND WIDESPREAD DISSEMINATION OF SUCH INFORMATION TO PRACTICING PHARMACISTS (SEE EXHIBIT B APPENDED AS EXAMPLE FROM FEBRUARY 1974 APHA JOURNAL). Ai TIMES~ RECALL INFORMATION EITHER MAY NOT BE SUFFICIENT OR APPROPRIATE TO COMMUNICATE THE PECULIAR PROBLEMS WHICH MAY RELATE TO A CERTAIN DRUGS IN WHICH CASE APHA HAS PREPARED AND PUBLISHED SPECIALLY WRITTEN ARTICLES~ SUCH AS THE RECENT SERIES, IN CONNECTION WITH DIGOXIN' (SEE EXHIBITS C1 D5 AND E; ARTICLES FROM APHA NEWSLETTERS DATED JUNE 23~ 1973k JANUARY 19. 1974. AND FEBRUARY'2S 1974), .. . FURTHERMORE. WE HAVE VIEWED OUR RESPONSIBILITY AS BEING MORE THAN SERVING SIMPLY AS AN INFORMATION PIPELINE TO THE PROFESSION. As THAT COMPONENT OF THE HEALTH CARE -3.- PAGENO="0811" COMPETITIVE PROBLEMS IN. THE DRUG INDUSTRY 10727 COMMUNITY HAVING THE GREATEST IMMEDIATE TRAINING, EXPERIENCES KNOWLEDGE1 AND INTEREST IN DRUG QUALITY, AND IN THE FACTORS WHICH CUMULATIVELY GO INTO A QUALITY PHARMACEUTICAL PRODUCT1 PHARMACY -~ THROUGH THE ASSOCIATION -- HAS CONDUCTED A COMPREHENSIVE SPECTRUM OF ONGOING ACTIVITIES DESIGNED TO FOSTER AND REQUIRE QUALITY ATTRIBUTES RELATING TO DRUG EFFICACY AND SAFETY. THESE ACTIVITIES INCLUDE: (A) SPONSORING MEETINGS AND SYMPOSIA, PRIMARILY THROUGH THE APHA ACADEMY OF PHARMACEUTICAL SCIENCES, AT WHICH SCIENTIFIC PAPERS AND REPORTS ARE PRESENTED DESCRIBING NEW TEST PROCEDURES AND METHODOLOGY: (B) THE PUBLICATION OF THE APHA's JOURNAL OF PHARMACEUTICAL SCIENCES, WHICH SERVES AS THE PRIMARY VEHICLE FOR COMMUNICATING THE LATEST SUCH RESEARCH ON A WORLDWIDE BASIS AMONG SCIENTISTS: (c) THE COSPONSORSHIP WITH THE AMA AND THE USPC OF THE DRUG STANDARDS LABORATORY, WHICH IS HOUSED IN THE APHA BUILDING AND WHICH CONDUCTS LABORATORY STUDIES DESIGNED TO DEVELOP AND EVALUATE. NEW DRUG TESTING PROCEDURES: (D) THE REVISION AND PUBLICATION PROGRAM OF THE NATIONAL FORMULARYI AN OFFICIAL COMPENDIUM RECOGNIZED UNDER FEDERAL AND STATE LAWS AS PROVIDING STANDARDS AND SPECIFICATIONS FOR DRUGS AND FOR THEIR DOSAGE FORMS: AND (E) THE ESTABLISHMENT OF A B!OAVAILABILITY PROJECT WHEREBVI IN AN EFFICIENT AND COORDINATED MANNERS 32-814 (Pt. 24) 0 - 74 - 52 PAGENO="0812" 10728 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY SUCH INFORMATION MIGHT BE COMPILED~ EVALUATEDS AND MADE AVAILABLE RELATIVE TO COMPETING DRUG PRODUCT FORMULATIONS. MOREOVER, THE ASSOCIATION HAS LENT ITS ENDORSEMENTS COOPERATION~ AND STRENUOUS SUPPORT TO EFFORTS AND ACTIVITIES OF OTHER GROUPS ENGAGED IN COMPARABLE EFFORTS TO FOSTER THE RELIABILITY OF MARKETED DRUG PRODUCTS. To MENTION BUT TWO EXAMPLES (A) THE ASSOCIATION COLLABORATED WITH EFFORTS OF THE CALIFORNIA PHARMACEUTICAL ASSOCIATION IN SUPPORTING THE SO-CALLED "CROWN BILL" (A.B, 1404) AND REGULATIONS FOR ITS IMPLEMENTATION -- THIS LEGISLATION REQUIRES THE NAME OF THE ACTUAL MANUFACTURER OR FABRICATOR OF THE DRUG PRODUCT TO BE IDENTIFIED ON THE PRODUCT LABEL AS AN IMPORTANT PIECE OF INFORMATION TO ASSIST PRACTITIONERS IN MAKING QUALITY JUDGMENTS RELATIVE TO THAT ARTICLES AND (B) THE ASSOCIATION ENDORSED AND COOPERATED WITH THE FOOD AND DRUG ADMINISTRATION AND THE U. S. PHARMACOPEIA IN A TYPE OF "GRASSROOTS" NATIONAL DRUG SURVEILLANCE PROGRAM DESIGNED TO PROVIDE A BROAD NETWORK FOR THE PURPOSE OF IDENTIFYING AND REPORTING TO RESPONSIBLE AGENCIES DRUG PRODUCT DEFECTS DETECTED AT THE PHARMACY PRACTITIONER LEVEL. MR. CHAIRMANI THE BROAD SPECTRUM OF ACTIVITIES BRIEFLY DESCRIBED ABOVE HAS AFFORDED US A UNIQUE PERSPECTIVE FROM WHICH TO ASSESS THE GENERAL QUALITY OF THE NATION'S DRUG -5-, PAGENO="0813" COMPETITIVE PROBLEMS IN THE DRTJG INDUSTRY 10729 SUPPLY. EARLIER THIS MONTHS WE TESTIFIED BEFORE THE SENATE SUBCOMMITTEE ON HEALTHI AND IN OUR TESTIMONY WE CONCURRED IN THE ASSESSMENT THAT THE NATION'S DRUG SUPPLY IS OF THE HIGHEST QUALITY. As WE NOTED THENI NO MATTER HOW PERFECT ANY HUMAN SYSTEM MAY BE~ NO MATTER HOW ADVANCED ANY TESTING AND STANDARDS MAY BECOMES THE DRUG INDUSTRY CAN NEVER ACHIEVES NOR FDA ENFORCE' A "ZERO~DEFECT LEVEL." THE VARIOUS PROGRAMS AND ACTIVITIES CONDUCTED BY THE FDA INDICATE TO US THAT ALL REASONABLE STEPS ARE BEING TAKEN IN AN EFFORT TO ASSURE THE HIGHEST LEVEL OF QUALITY IN OUR DRUG SUPPLY AS THE PRESENT STATE OF KNOWLEDGE, SCIENCE, AND TECHNOLOGY PERMITS. IN RECENT YEARS~ WE HAVE HEARD A NUMBER OF DISQUIETING SPEECHES, AND WE HAVE READ A NUMBER OF DISTURBING ARTICLES ALL EMANATING FROM DPSC SPOKESMEN WHICH IN TOTO HAVE SERVED TO CAST DOUBTS AND SUSPICION ON VARIOUS UNIDENTIFIED DRUG PRODUCTS, AS WELL AS VARIOUS UNNAMED DRUG MANUFACTURERS. THESE SPEECHES AND ARTICLES HAVE SUGGESTED THAT PROBLEMS PERTAINING TO UNRELIABLE DRUGSF PRODUCED UNDER SHODDY CONDITION OF MANUFACTURE~' ARE WIDELY PREVALENT ON THE AMERICAN DRUG MARKET, SUCH IMPLICATiONS AND ALLEGATIONS APPEAR TO RUN CONTRARY TO INFORMATION AVAILABLE TO US FROM OTHER SOURCES MOREOVER~ BECAUSE OF THEIR VERY SERIOUS NATUR SERONS HAVE DEMANDED OUR ATTENTION AND INVESTIGATION. PAGENO="0814" 10730 COMPETITIVE PROBLEMS IN THE DRUG IND'USPRY Ii IS OUR POSITION THAT SUCH CHARGES SHOULD NOT BE MADES SUCH INFERENCES SHOULD NOT BE DRAWNS UNLESS FACTUAL EXPERIENCE WILLS IN FACTS SUPPORT THEM; AND~ IF INDEED THERE IS FACTUAL. EVIDENCE TO SUPPORT SUCH STATEMENTS~ THEN IT IS ALSO OUR BELIEF THAT PROTECTION OF THE PUBLIC HEALTH DEMANDS THAT SUCH INFORMATION BE MADE PUBLICLY~ AVAI LABLE TO THE HEALTH PROFESSIONSs IN ORDER THAT APPROPRIATE STEPS CAN BE TAKEN TO AVOID THE DISTRIBUTIONS THE PRESCRIBING~ AND THE DISPENSING OF HAZARDOUS OR INEFFECTIVE DRUG PRODUCTS. IN OUR EFFORT TO ANALYZE THIS SUBJECTS WE HAVE CONSIDERED TWO POSSIBILITIES: EITHER (A) EXISTING STANDARDS AND SPECIFICATIONS MAY NOT BE GENERALLY ADEQUATE; OR (B) EXISTING STANDARDS AND SPECIFICATIONS ARE NOT BEING ADEQUATELY ENFORCED. WITH RESPECT TOTHE FORMER POSSIBILITY~ WE NOTE THAT BRIG. GEN, GEÔRGE.J. HAYES, MEDICAL CORPS, U. S. ARMY, PRINCIPAL DEPUTY ASSISTANT SECRETARY OF DEFENSES TESTIFIED BEFORE YOUR SUBCOMMITTEES MR. CHAIRMAN, ON FEBRUARY 3~ 1971~ AND IN HIS PREPARED STATEMENT HE SAID: "I SHALL NOW TURN FROM A DISCUSSION OF WHAT WE HAVE TO W1~Y WE HAVE IT~ AND; HOW WE GET IT. IT IS DOIJ POLICY THAT OUR STOCK LIST SHALL CONSIST OF QUALITY DRUG PRODUCTS PROCURED COMPETITIVELY ON GENERIC SPECIFICA TIONS~ AND AT THE MOST ECONOMICAL PRICES WE CAN OBTAIN. PAGENO="0815" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10731 "WE CANNOT PROCURE COMPETITIVELY WITHOUT A GENERIC SPECIFICATION, OUR STANDABDS ARE BASICALLY THOSE OF THE U.S.i~. AND N.I-,1 SUPPLEMENTED WITH SUCH ADDITIONAL STANDARDS AS ARE NECESSARY TO ENSURE SUITABILITY NOT ONLY AT ThE TIME OF PROCUREMENT1 BUT ALSO FOLLOWING POSSIBLE LONG-TERM STORAGE THROUGH- OUT THE WORLD IN ARCTIC, TEMPERATE1 OR TORRID ZONES. hANY OF OUR SPECIFICATIONS INCLUDE STANDARDS WHICH HAVE BEEN OBTAINED FROM INDUSTRY DURING THE STANDARDIZATION PROCEDURE. IF WE ARE TO OBTAIN SUITABLE MATERIAL COMPETITIVELY1 WE MUST INCLUDE THESE DETAILS IN ORDER TO. PROVIDE OTHER THAN PRODUCT ORIGINA7ORS WITH THE NECESSARY PRODUCT INFORMATION,' AS BRIG. GEN. HAYES STATES, THE DPSC STANDARDS ARE BASICALLY THOSE OF THE OFFICIAL COMPENDIA SIMPLY SUPPLEMENTED WITH ADDITIONAL STANDARDS PECULIAR TO THE SPECIAL NEEDS OF THE MILITARY. CONSEQUENTLY, ALTHOUGH ADDITIONAL SPECIFICATIONS MAY BE ADOPTED BY THE DPSCI THIS DOES NOT MEAN THAT THE OFFICIAL COMPENDIA STANDARDS ARE INADEQUATE AS APPLIED TO DRUG PRODUCTS AS INTENDED FOR USE BY THE GENERAL PUBLIC. FOR EXAMPLE, THE CRITICAL CONSIDERATION OF MINIMIZING UNNECESSARY WEIGHT MIGHT NECESSITATE SPECIFYING THE USE OF A LIGHT-WEIGHT PLASTIC CONTAINER FOR DRUG PRODUCTS TO BE CARRIED ON BOARD SPACECRAFT. ON THE OTHER HAND, *THE USE OF SOMEWHAT HEAVIER CONTAINERS, SUCH AS THOSE MADE OF GLASSI WOULD BE PERFECTLY APPROPRIATE FOR USE IN PACKAGING DRUG PRODUCTS INTENDED FOR NORMAL CHANNELS OF DISTRIBUTION. HOWEVER, THE SPEECHES AND ARTICLES BY DPSC OFFICIALS PREVIOUSLY MENTIONED, HAVE SUGGESTED THAT DEFICIENCIES IN * PRODUCTS AND MANUFACTURERS ARE NOT SIMPLY RELATED TO THE SPECIAL NEEDS OF THE MILITARY, BUT THAT THEY ARE FAR MORE SERIOUS AND REPRESENT A PUBLIC HEALTH HAZARD. -8- PAGENO="0816" 10732 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY IF SUCH IS THE CASES PHARMACISTS AND PHYSICIANS SHOULD BE MADE AWARE OF THE FACTS1 IN ORDER THAT THEY MIGHT TAKE APPROPRIATE PROFESSIONAL ACTION EVEN BEFORE FDA TAKES LEGAL ACTION TO REMOVE SUCH PRODUCTS FROM THE MARKETPLACE, IN APHA's ROLE~OF MONITORING AND DISSEMINATING SUCH INFORMATION~ WE HAVE ATTEMPTED TO OBTAIN SPECIFIC DETAILS FROM DPSC AS TO WHICH DRUG PRODUCTS HAVE BEEN REJECTED AND THE BASIS FOR REJECTION1 AS WELL AS WHICH DRUG MANUFACTURERS HAVE BEEN JUDGED TO BE UNSUITED TO MANUFACTURE PRODUCTS OF ACCEPTABLE QUALITY. REGRETTABLY, OUR EFFORTS IN THIS REGARD HAVE TO DATE MET WITH ABSOLUTELY NO SUCCESS. IN LIGHT OF THE FACT THAT OUR INFORMAL REQUESTS FOR SUCH INFORMATION HAVE BEEN REPEATEDLY REJECTED1 THIS PAST SEPTEMBER A FORMAL REQUEST FOR SUCH INFORMATION WAS FILED WITH THE DEFENSE SUPPLY AGENCY OF DOD UNDER PROVISIONS OF THE REGULATION ENTITLED~ "AVAILABILITY TO THE PUBLIC OF OFFICIAL INFORMATION," AS PROMULGATED IN THE FEDERAL REGISTER DATED SEPTEMBER 6~ 1973; AGAIN1 THIS EFFORT FAILED TO ELICIT THE KIND OF INFORMATION WE SEEK (SEE CORRESPONDENCE APPENDED AS EXHIBITS F AND 6). MR. CHAIRMAN1 IT IS OUR POSITION THAT PHARMACISTS REQUIRE FACTUAL INFORMATION IN ORDER TO BE ABLE TO SELECT AND DISPENSE QUALITY DRUG PRODUCTS WHICH WILL BE SAFE AND EFFECTIVE FOR THE NEEDS OF THE PATIENT. MOREOVERI IT IS ALSO OUR POSITION THAT THE PHARMACIST REQUIRES SUCH INFORMATION IN ORDER THAT HE MIGHT BE ABLE TO SELECT FROM DUPLICATIVE DRUG PRODUCTS OF COMPARABLE QUALITY THAT -9- PAGENO="0817" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10733 PRODUCT WHICH WILL REPRESENT THE MOST REASONABLE COST TO THE PATIENT, IF THE DEPARTMENT OF DEFENSE HAS INFORMATION WHICH WOULD BE USEFUL AND PERTINENT IN DISTINGUISHING BETWEEN GOOD AND BAD DRUG PRODUCTS OR IN DISTINGUISHING BETWEEN GOOD AND BAD DRUG MANUFACTURERSI IT IS OUR PLEA THAT YOUR COMMITTEE SEE THAT SUCH INFORMATION WHICH WAS DEVELOPED AT TAXPAYERS' EXPENSE -~ IS MADE PUBLICLY AVAILABLEi SO THAT IT MIGHT BE USED TO THE, PUBLIC'S BENEFIT. WE INTEND ALSO TO CONTINUE OUR EFFORTS TO OBTAIN SUCH INFORMATION FROM DOD DIRECTLY, BY THE SAME TOKENS IF THE SUGGESTIONS OF WIDESPREAD AVAILABILITY OF DEFECTIVE DRUGS ~- AND OF WIDESPREAD EXISTENCE OF INCOMPETENT MANUFACTURERS -- REPRESENT EXAGGERATIONS, HYPERBOLE~ OR UNSUPPORTED PROPAGANDA~ THEN YOUR COMMITTEE WOULD RENDER AN EQUALLY BENEFICIAL SERVICE BY EXPOSING THE TRUTH OF THE MATTER. -10- PAGENO="0818" 10734 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY EXHIBIT B Drug Recalls I~I `J'ha/allaoieg data hat'. baaa sarapiladfraa ha Fadaral Ftad sad i)~~tg ,ldmiaisl,stieo WsaIly Real! Rap seasar/og he par/ad Oslahar 18, 197.3, Ia D nba, 12, 1973. Pha,nssisls sad sthrra paasassing drug tar aura raaaiadad as cheek ~.i, stash qgsia I. ba ca,laia that they daoat hars says/the prsdosts an the list. Atysna "ha hue add,t/s,,al/astssa city at the tisiad ace/Is tahish he/eels x'ill aes/st a a,nplalieg the race!! is ,ogad a saed sash d la a ha shIer a/his Juvunuc. Product Manufacturer or DIstrIbutor Lot Number Quuntlty Recall Cleat Recall Reason Product DIstrIbutIon Afrodex Capsules (methyltestosterone 5 mg yohimbine 5 mg nux vomica extract S mg) 100's, 500's and 1,000's APC Tablets (aspirin 3.5 gr, phenacetin 2.5 gr, caffeine 0.5 gr), 100's and 1,000's Atropine sutfata injectabte 0.01 gr, 1 ml ampules AUStect for CEP Test (hepatitis associated antibody'-antl'Austraiia antigen) 1 ml and 5 ml viAls Celebenin (sla~llum methiciff in for injection), lg,4g,and6gvials Olgl000i n tablets 0.2 ma, 1,000's and 5,000's H P Actfiar Gel (repaultory cortlcotrapin lnjectlos 40 USP units per ml) I ml and 5 ml vial a Insulin syrInge with neadla (disposable), icc, 1110 unIt' Kldneez (phenazopyridina 100 mg) 30's Mercfjhydrfn InfectIon (marallurlde audI urn ~&mg, theophylllne 40 mg peTml), 1 ml end 2 ml ampulee, 10cc multIple dose elsIe Oton Moses otlc solutIon (06 mg ealfethlexole, 60 mg sodium praplonate, 125 mg urea per ml), 10 ml dropper bottlea Secobarbital sodium capsules 1,5 ge 100's and 1,000's Sodium Oaf icyfata end Iodide with Cofchlcfne, Na, 1 (sodium saflcylate 1 g' eodium.lodlde 1 g, colchlcine 0.65 mg) 20 ml ampulas ICN Pharmaceuticals (Covina, Co/if.) i/oats Formulae (St. Louis, `ito,) Linden Labs (Lou Angeles, Calif.) Vitamin Specialties (Brisbane, Calif.) Harvey Laboratories (Philadelphia, Pa.) Abbott Labs (Los Angeles, Calif.) Beecham-Massengiii Pharmaceuticals (Piscataway, N.J.) Zemmer Co. (Oakmont, Pa.) Armour Pharmaceutical Co. (Kankakee, ff1.) National Drug Co. (Cincinnati, Oh/o) Sherwood M,~dicai Industries (St Louis, Mo.) Edward 3. Moore Suns *(Long Island City, N.Y.) Lakeside Laboratories (Milwaskeo, Wlsc.) Ayerst Labs (New York, N.Y.) Interstate Drug Exchange (Plainview, N.Y.) Columbia Pharmaceuticals (Garden Cloy, N.Y.) Upjohn Co. (Kalamazoo, Mid.) All lots 231200 0521 1 ml viats 20013.BW ant/body lot 2730330 5 ml vials 20.051.0W antibody lot Z730420 1 g vials AO1190H AO2090N A0259RP A03095A AO3100A A03490A A)359SA 4 gvlels A0099RH A0199RN AO219RN 6 gvials A0299SA ABO3O 30b190 3407 502195 All lots All lots All lots 2070 All lots 1,300,000 capsules Unknown 1.500 ampules 000 vials 600 vials predominantly lot ABO3O 35,000 tablets Unknown Uoknown 100,000 lablets 0,000 un,ts 6,000 bottles Unknown 1,000 umpul. ii No approved NDA Notional iii Content uniformity California \ iii Subpotency National ii Loss of potency National ii Pyrugans National Ii Content uniformity National ii Subpotency Nat/oval II Cartons of 100/100 unit labeled as 100/40/00 units Nat/anal Ii Label does not Nationaf prescription legend Ii Precipitate National II Drug efficacy study implementatIon National lii Subpoteecy National Lack of eoidence that the drug combinatIon is safe and effective NatIonal FDA definitions for recall clasuea: Claeu I Recalls-This is an emergency siOua!ion involving the removal frvm the market of producos in whch the consequences are tmmedtate or long-range, life- ihrbaoesing and involve a direc! cauoe.ejeci relasionsh/p. Claee II Recalls-This is apriorily ojluaOion in ,ajhjch the consequenc~r nitty Re immediale or long'range arid posstbly or poienoially lafe.bhreolening or hazardous Os healoh. Class III Recalls-This iou routine situation in which Oh. consequences to it/a (tf arty) are ren~ole or norfrextotenl. JOURNAL OF THE AMERICAN PHARMACEUTICAL ~ ON~Qi.~514, f,~bruary 1974 17 PAGENO="0819" Latiolais criticizes Proprietary Association's views on antacid monograph APhA President Clifton J. Latiolais has branded as "entirely self-serving" a recent statement by the Proprietary Association challenging a Food and Drug Administration labeling pro- posal. The FDA recommendation would require labels of charcoal-con- taining antacid products to indicate that the products are not to be used "concurrently with a prescription drug except on the advice of your physician or pharmacist," The PA statement, filed with FDA on June 4 in response to a Federal Register proposal to establish a mono- graph on o-t-c antacid products, at- tempted to ntinimize the importance of potential drug interactions "that are more theoretical in nature than of demonstrable significance." "APhA does indeed recognize that not all reported drug interactions are clinically significant," President Latio- lais stated. "Thin is the reason the Association undertook the project which resulted in the publication, Eval- stations of Drug Jnteractions-1973. However, the fact that some interac- tions are theoretical and suspect at present due to inadequate documenta- tion in no way decreases the need to guard the patient against those inter- actions that have been proven to be clinically significant. To categorize these potentially significant drug ther- apy problems with less important ones, and then to suggest that the medicating public not be apprised of a knowledge- able source of information is clearly not in the best interest of the self-medi- cating public." The PA statement also questioned "whether the pharmacist has the time, expertise or inclination to provide this information to the consumer." "To question the expertise of a health professional with five or six years of extensive training in drugs and Contact IRS for information on the price freeze The Cost of Living Council reports that "economic stabilization informa- tion" is available by phone from 58 district Internal Revenue Service offices across the country. Those pharmacists who wish to contact the Council should write Coat of Living Council, 2000 M St., NW., Washington, D.C. 20508. The IRS, which has been a part of the economic stabilization plan, will answer quentions and receive complaints. Dur- ing the price freeze, ordered by Presi- dent Nixon June 13 for a maximum of 60 days, services or products may not be available or sold at fees or prices above the highest chargea or prices at which they were available during the previous June 1-8. drug therapy is completely ludicrous," President Latiolais declared, "Further, it is ironical that many of those phar- macists who do not have time to coon- (Continued on page 2) Commentary on digoxin bioavailability by Colaizzi ~- An April 9 editorial and an April 9 article in the Journal of the American Medical Association have caused pharmacists to be concerned about the bloavailability of digoxin tablets they dispense. The following commentary on the subject was prepared for the APhA Newsletter by John L. Colaizzi, Ph.D., Director of the APhA Bioavail- ability Pilot Project. Digoxin is a widely utilized drug which possesses life- saving characteristics, Precise dosage regulation is particu- larly essential with digoxin and other digitalis derivatives due to the narrow margin between ineffective doses and therapeutic doses, and again between therapeutic and toxic doses. For these reasons, the U.S.P. has specified a content uniformity test for digoxin tablets; this requirement in designed to ensure uniform tablet-to-tablet potency with- in individual lots of the drug product. Moreover, the Food and Drug Administration devel- oped a voluntary certification program for digoxin tablets through which manufacturers voluntarily submit samples from each batch to FDA for content uniformity and other U.S.P. tests prior to releasing the batch on the market. In October, 1971, FDA's National Center for Drug Analysis reported that 47 percent of the batches investigated did not comply with the U.S.P. monograph requirements, chiefly because `of failure in the content uniformity test.' FDA's monitoring efforts since 1971 have virtually en- sured that digoxin tablets reaching pharmacists' shelves meet all U.S.P. specifications. Moreover, the study by Lindenbaum Ct al2 which re- ported significant differences in the biological availability of three different brands of digoxin tablets based on serum level determinations in human subjects, understandably caused concern among the medical and pharmaceutical professions when it appeared in December of 1971. Not only did this study reveal wide variations in serum levels obtained with the different brands of tablets, but also with different lots of tablets of the same brand, Following pub- lication of this work, a number of deficiencies in the study were pointed out." For example, at least one of the lots of tablets studied by Lindenbaum et al was found to (Continued on page 4) COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10735 PAGENO="0820" 10736 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY June 23, 1973, page 4 Commentary on digoxin bioavailability by Colaizzi (Continued from page 1) of U.S.P. digoxin tablets. be subject to recall due to failure to meet the U.S.P. con- (2) Different dosage forms (e.g., elixirs vs tablets), tent uniformity test. It was pointed out, therefore, that the even from the same manufacturer, are likely to low serum digoxin levels produced by these tablets could differ in their respective bioavailability for the same have been due to low tablet potency rather than poor labeled strength, and dosage adjustments may be bioavailability. Although another lot of tablets that showed advisable when transferring a patient from one differences in serum levels when compared with the in- form to another. novator brand was found to meet all U.S.P. specifications, (3) Different lots of the same brands regardless of the still other possible criticisms of the Lindenbaum study manufacturer or source, may not be equally bio- were noted, such as the use of too few subjects and available and, therefore, they may not be thera- failure to obtain serum levels over a more prolonged period peutically equivalent. Consequently, pharmacists of time than five hours, might wish to consider recording the lot number of In a more recent publication by Wagner ci al ~, two digoxin tablets dispensed as well as the brand. brands of digoxin tablets were studied according to an cx- (4) The evidence, as presented in the study by Wagner perimental design which suffered from none of the short- et al, as well at other studies, documents strongly comings of the Lindenbaum et a! study. The results of this the need for knowledgeable pharmacist input re- study by Wagner et al confirm the implications of the garding the choice of manufacturer and in dispens- Lindenbaum article that there may indeed be significant ing digoxin products. A pharmacist should not differences in bioavailahility among different brands of blindly rely on using any brand of digoxin (no digoxin tablets, even though such tablets may meet all matter what the size or reputation of the manu- current U.S.P. requirements. facturer); rather, he should continually seek to While it now seems likely that significant bioavailability request and evaluate data on digoxin tablets from differences among chemically equivalent brands of digoxin his sources. tablets pose it distinct concern for the pharmacist, it should It would definitely he in the public interest for the phar- also he noted that the two studies cited ~*`, as well as macist to demand-as a condition of purchase-bioavail- other reâent findings, indicate that there are three other ability data from the suppliers of digoxin tablets, and to be types of bioavailability problems with digoxin: (a) Signi- certain that such information is properly and carefully ficant differences in bioavailability may be expecded de- evaluated. pending upon whether digoxin is administered by the oral References or parenteral routes.5 (b) Significant differences in blo- (1) Anon,, F.D.A. Drug BulletIn, (October, 1971). availability may be expected between oral tablets and (2) J. Lindenbaum, M. H. Mellow, M. 0. Blackstone oral solutions.5 ° (c) Significant variations in bioavail- and U. P. Butler, New Eng. 1, Med., 285, 1344 ability may be found even among different lots of the (1971). same brand of digoxin tablets. The latter variations arise (3) T. 0. Vitti, D. Banes and T. E. Byers, New Eng. out of formulation changes made by the manufacturer, 1. Med., 285. 1433 (1971). such as those which caused a doubling of the bloavailabill- (4) D. 1.. Sorby and T. N. Tozer, Drug Intelligence and ty of the innovator's brand of digoxin tablets in England Clinical Pharm., 7, 78 (1973). litst year.7' (5) J. 0. Wagner, M. Christensen, E. Sakmar, D. Blair, While the topic of digoxin hioavailability will be treated J. D. Yates, P. W. Willis, A. J. Sedman and R. 0. in somewhat greater detail in the forthcoming Bloavailabil- Stoll, .1. Amer. Med. A,s,soc., 224, 199 (1973). ity Pilot Project report to be published by APhA, the find- (6) D. H. Huffman itnd D. L, Azarnoff, J. Amer. Med. ings stimmarized above make it apparent that the follow- A,s'soc., 222, 957 (1972). ing points should be given serious consideration by phar- (7) J. Hamer and D. 0. Grahame-Smith, Lancet, 2, 325 macisis at this time: (1972). (1) Therapeutic inequivalence may result from differ- (8) B. Whiting, J. C. Rodger and D, J. Summer, LanceS, ences in bioavailability between different brands 2, 922 (1972). Q 2215 Constitution Ave., NW. SECOND. CLASS ~ Washington, DC 20037 Postags paid (202) 628-4410 at Washington, D.C., and at additional Published bl-weekiy by the Anserican mailing offleea Pharmaceutical Association, 2215 Constitu- tion Ave., N.W., Washington, DC 20037. Donald E. Prescott, Editor. Annual subscription: Members receive the APhA Newsletter every other week as purl of their annual membership dues. Copyright, APhA, 1973. Second class postage paid at Washington, D.C., and at additional maiiirig offices. PAGENO="0821" Standards and specifications relating What is continuing competence9 grams to ensure continuing profession to digoxin tablets have been revised How do you measure it? How do you alism of pharmacy practitioners. and augmented several times during the maintain professional competence once The Task Force already has solicited past few years with the intent of pro away from academe9 The APhA national pharmacy organizations for viding greater assurance of uniform AACP Task Force on Continuing comments and now needs input from and predictable ` liveness and safety Competence in Pharmacy would like the "grass roots" level of pharmacy. of this criticall portant drug. In our ideas The Task Force is meeting in the each instance, . Food and Drug . . Spring therefore all response from Administration has subsequently cx- The Task Force ii in the process individual pharmacists should be sub- panded its program of drug monitoring of drawing up a statement of basic mitted by mid-March. Send your to incorporate the additional require- principles and policies regarding the thoughts to the Hon. Elmer Andersen, ments. continuing competence of pharmacists Chairman, Task Force on Continuing In November 1973 by way of an which should help the profession in Competence 2215 Constitution Ave interim revision the U S Pharma developing and implementing pro N W Washington DC 20037 copela adopted a dissolution test and specification for digoxin tablets and it is expected that batches of tablets What do you think not meeting this new standard soon will be recalled by the FDA. woui constitute a Meanwhile, it is recommended that pharmacy specialty? pharmacists keep a record of the lot number and manufacturer's name of digoxin tablets dispensed to eacR pa- liens, as a source of such information in the event it becomes needed for re- call purposes, dosage adjustment, or other reasons. Nominees sought for Smith Award consideration Do you know a community pharma- cist who has distinguished himself and the profession by outstanding profes- titioner who served as the first Presi- Obtain nomination guidelines and sional performance? The APhA Acad- dent of APhA, Daniel B. Smith, the official forms by contacting the Acad- emy of General Practice invites you to Award is the highest honor the Acad- emy, 2215 Constitution Ave., N.W., nominate candidates for the 1974 emy can bestow. It will be presented at Washington, DC 20037. Deadline for Daniel B. Smith Award, the Academy Annual Luncheon during receipt of nominations (on official Named after the community prac- the APhA Annual Meeting in Chicago. forms only, please) is March 1. COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10737 `~ EXHIBIT D Jan. 19, 1974, page 4 Keep lot number, manufacturer's name of digoxin tablets What is continuing competence? How do you maintain it? You asked for it. Now it's your turn. APhA formed a Task Force on Specialties in Pharmacy in response to a House of Delegates mandate last summer. The Task Force has met and has already developed some prelim- inary guidelines for identifying phar- macy specialties. What are your ideas as to what constitutes a specialty in the profes- sion? Are there any, and if so, how do you recognize them and administer them? Watch for an article in the February issue of the APhA Journal highlighting the Task Force's progress thus far. And after perusing the lAP/iA article, send your comments no later than April 1 to Task Force Chairman Lloyd M. Parks, 2215 Constitution Ave., NW., Washington, DC 20037. Published hi -weekly by the Anserican Pharmaceutical Association, 22.15 Constitu- tion Ave.. NW., Washington, t)C 21)037. An vital sohscnplion: Members receive the APItA Newsletter every other week as part of their asnuat nsrttthership dues. Copyright, APhA. 1974. Second class postage paid at Washington, l).C., and at additional nailing offices. 2215 Constitution Ave., NW. SECOND. CLASS 1i~~s~gtts~ W h gt DC 20037 p t ~ (202) 620-4410 at Washisgtog, D.C., and at additional mailing offices. PAGENO="0822" 10738 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Digoxin recalls requested by FDA based on new dissolution requirements The Food and Drug Administra- tion has announced new, more strin- gent requirements for the manufac- ture of oral digoxin products. As a result, pharmacists should expect a recall of many digoxin tablets in the near future. Under the program, FDA will tent individual batches for con- formance with compendial standards, including dissolution. The FDA bases the new requirements on clinical data which show a significant correlation between in vivo bloavailability and in vitro dissolution rates. According to the FDA, the digoxin tablets that dissolved more rapidly demonstrated a higher bioavailability. Because of the narrow margin be- tween the therapeutic and toxic levels of digoxin and the potential for se- rious risk to cardiac patients using digoxin products which vary in bio- availability, the FDA has determined that immediate steps must be taken to assure improved uniformity of all digoxin products. This includes a re- call of all digoxin products now on the market which do not meet the new requirements for in vitro dissolu- tion rates. The new dissolution requirements are based largely on a test procedure and specifications adopted in the Sixth USP Interim Revision An- nouncement of Nov. 15, 1973. Under the FDA requirements, the dissolu- tion rate must always fall within a certain range; it is as unacceptable for a digoxin tablet~ to dissolve too rapidly as it is for the tablet to dis- solve too slowly. The FDA has stated that, as more © Pubtished hy.weekly by the At,ierican Pharmaceutical Associatton, 2215 Constitu lion Ave., NW., Washington, DC 20037. Annttat subscription: Menebers receive the APhA Newsletter every other week as part of their annttat mettthership dues. Copyright, APhA, 974. Second ctass postage paid at Washington, D.C., and at additional nsaiting offices. Feb. 2, 1974, page 4 definitive bioavailabitity data be- comes available, still more stringent dissolution rate requirements may be set for digoxin. Although complete information is not yet available on those manufac- turers which will be requested by FDA to recall their digoxin, FDA initially has requested the following firms to recall certain lots of their digoxin products: Barr Laboratories, Inc. (lot 2221032); Blueline Chem- ical Company (lot 81335); Cord Laboratories, Inc. (lot 27781); Heath- er Drug Co. Inc. (lot 210073); E. W. Heun Company (tot MD578A); Kas- co Efco Laboratories-E, Fougera and Company (lots 2087, 2635, 2768, 2819); Marsh all Pharmaceutical Corporation (lots 7595, 7623); Parke Davis and Company (lot LG3I2A); Premo Pharmaceutical Laboratories, Inc. (lot B32817); Rexall Drug Com- pany (lot D32014); and Stanley Drug Products, Inc. (lot 077306). As noted in the Jan. 19 News- letter, pharmacists should keep a rec- ord of the lot number and manufac- turer's name of digoxin tablets dis- pensed to each patient in the event that the information is necessary for dosage adjustments of digoxin pa- tients. FDA plans to advise practi- tioners of the changes in digoxin bio- availability resulting from product re- formulations. FDA is very apprehensive that pa- tients now taking .x digoxin product not conforming to the new require- ments might now receive digoxin tab- lets of greater bioavailability and, hence, experience overdigitalization. EXHIBIT E Needs of practitioners to highlight AGP sessions at 1974 APhA annual meeting Effective communication with pa- tients and prescribers and efficient management practices are both es- sential for a successful pharmacy practice, and the Academy of Gen- eral Practice of Pharmacy has re- tained specialists in these fields for Academy sessions at the 1974 APhA Annual Meeting in Chicago. Schmidt, Pryor and Company, a Kansas City management consultant firm, through a grant from the Up- john Company, will present two ses- sions for practitioners, AGP President Donald 0. Fedder announced after the Jan. 14-15 meeting of Academy Officers in Washington, D.C. The firm has had broad experience with phar- macists and other health care profes- sionals. Radioactive pharmaceuticals require special knowledge by pharmacists who handle them, and the Academy will attempt to serve the needs of these practitioners at the 1974 Annual Meeting by sponsoring a day-long symposium on the subject. The pro- gram will feature presentations on education, legal aspectn, organization and operation of a nuclear pharmacy. AGP Officers also approved pre- liminary plans for an alt-day seminar on techniques of dosage form admin- istration, to be co-sponsored by the Illinois Academy of Preceptors. The program, which will utilize pharma- cists and nurses as instructors, will deal with such topics as rectal and vaginal dosage forms, oral liquids and solids, ophthalmics, otics, nasal preparations, pediatric dosage forms and injections. 2215 Constitution Ave., NW. SF.COND. CLASS 1~~UQ Washington, DC 20037 Postage pod (202~ 628-4410 at Washington, D.C., and a5 additional mailing offices. PAGENO="0823" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10739 EXHIBIT F AMERICAN PHAR EUTICAL A S Soc AT ON The Netio,,aI P~of.ssion,i Society of Phermyci~tp September 27, 1973 Director Defei~se Supply Agency Attention: DSAH-XA Cameron Station Alexandria, VA 22314 Dear Sir: It is my understanding that the Defense Personnel Support Center headquartered in Philadelphia, Pennsylvania has specific responsibility within the Defense Supply Agency for the procurement of medical supplies -- and specifically drugs and drug products to fill the needs of the U. S. Department of Defense. From time to time officials affiliated with the DPSC have described the procedures employed within that agency which are intended and desired to ensure that satisfactory quality drugs and drug products are purchased by them. In describir~g these procedures, the DPSC has indicated that a key feature in this process is the determination of the capabilities and qualifications of individual manufacturers such determination by DPSC is being made on the basis of certain driteria including inspection of the manufacturing plant facilities, testing of the pertinent firm's drug products within the DPSC's laboratory, and other appropriate considerations to enable such judgments to be made, At various times, DPSC staff have referred to the fact that as a result of~opexat~oft-~f~the above described procedure0, lists of drug company names (either alone or in association with specific drugs) havo been developed which may be described as "lists of acceptable or qualified bidders" and/or "lists of unacceptable or unqualified bidders." Under provisions of the regulation entitled, "Availability to the Public of Official Information," which was recently published in the Federal Register (38 FR 24206-24210) I am hereby requesting copies of any and all the above described lists of acceptable and unacceptable bidders for drug contracts over the past approximately five-year period. Your assistance and cooperation in this regard will be greatly appreciated. Simcerely, Edward G. Feldmann, Ph.D. Associate Executive Director for Scientific Affairs ehb 2215 C0N8rtrlJiiow AVENUE, NW., WASHINGTON, D.C. 20037 * (202) 628-4410 CABLE ADDRESs~ .IPHARMA PAGENO="0824" 10740 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Mr. Edward G. Feldmann, Ph. D. Associate Executive Director for Scientific Affairs American Pharmaceutical Ass ociation ~2l5 Constitution Avenue, N. W. Washington, D.C. 20037 Dear Mr Feldmann We are in receipt of your 27 September 1973 letter requesting lists of acceptable or unacceptable bidders for drug contracts Please be advised that such lists are not developed nor maintained by the Defense Personnel Support Center or the Defense Supply Agency Thus, we cannot respond to your request for such information. The Armed Services Procurement Regulation requires that we seek the widest possible competition on each procurement by providing all interested firms with a copy of the solicitation However before making each award the contracting officer must affirmatively determine -- that the low bidder is responsible The regulation specifies the standards of responsibility sources of information and investigative procedures in order to insure that the contracting officer's determination is based on current and sufficient evidence Since the contracting officer must affirmatively determine on each procurement that the low bidder is responsible a bidder's failure to qualify as responsible on previous procurements does not preclude his qualifying as responsible on a subsequent procurement for which he submits the low bid0 To maintain a list of unacceptable bidders would be inconsistent with this policy Sincerely, PERF'L E K1Vi~LR C 1 `-el U Al C1i~ f QutlitY & ProduOti0r~ I)ivtSiOfl 1)iroctorate, Procurewent & piothiøttOU TO DSAH-PRS DEFENSE SUPPLY AGENCY HEADQUARTERS CAMERON STATION ALEXANDRIA, VIRGINIA 22314 G EXHIBIT 1~UC11~~ ~3~73 Buy U. S. Savings Bonds -~ Payroll Savings Plan.' PAGENO="0825" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10741 RE~ESVEDApR ~ AMERICAN PHARMACEUTICAL ASSOCIATION Th~ N~t~& P~of~ss:o~al S~~ty March 29, 1974 Honor~Dle Gaylord Nelson Chairman, Subcommittee on Monopoly Select Committee on Small Business Room 424 Old Senate Office Building Washington, DC 20510 Dear Senator Nelson: I welcome the opportunity to respond to Mr. Stetler's March 5 letter which you transmitted to me with your cover letter dated March 25. The primary thrust or thesis of my testimony was to show that: (a) the specification establishment program of the DPSC Branch of the Department of Defense resulted in specifications which were, or are, simply duplicative of official compendia standards; or (b) that in virtually all other cases, where such specifications are not duplicative, that they have no medical or therapeutic significance. This was my point in reviewing item-by-item the specifications material which DOD submitted to your Subcommittee and of which Propylhexedrine Inhalant, NF (mentioned at the bottom of page one of Mr. Stetler's letter) was referred to in my testimony. This fact is quite clear from the same transcript page mentioned in Mr. Stetler's letter (namely, `transcript page 10257; lines 21-23) which reads: "Going on with the four examples from the National Formulary that were cited in their response to you, Mr. Chairman, under propyihexedrine inhalant NF, they specify.. As an extension of the above mentioned. thesis, I cited several DPSC purchase descriptions-which contained requirements that in my opinion had no medical or therapeutic justification and which I stated (transcript page 10254; lines 18-19): "It would appear that such specifications may be largely geared or skewed around one particular formulation." -1- 2215 CONSTITUTION AVENUE, NW., WASHINGTON, D.C. 2D037 * (202) 628-441D CABLE ADDRESS: AMPHARMA PAGENO="0826" 10742 COMPETITIVE PROBLEMS IN THE DRuG INDUSTRY Honorable Gaylord Nelson -2- March 29, 1974 The purpose of my testimony, therefore, was to bring to the Committee's attention that the purchase specifications were developed in such a way -- by including trivial and even nonsensical requirements having no medical purpose or quality function -- as to be designed around the specific product of a single source (i.e., manufacturer). I believe that the text I presented completely supports that contention. Moreover, nothing in Mr. Stetler's letter appears to refute, nor attempts to refute, that contention. In his letter, Mr. Stetler states that it was my "thesis that DPSC specifications are designed to exclude lower cost suppliers." Since I do not profess any expertise as an economist, I specifically avoided making any statements which would bear on the matter of cost factors or price competition. Specifically, (transcript page 10255; line 8) when you mentioned elimination of competition, I responded that while such an effect "would appear" to be the case, "1 am not in a position to be able to draw a conclusion from these things..." Moreover, when the Minority Counsel spoke of relative costs, I responded (transcript page 10269; lines 13-17) by clarifying that the economic conclusions were drawn by the Committee Chairman, and that I was simply taking note of his conclusion to the effect that this might have economic consequences. In other words, the thrust of my testimony was to demonstrate the fact that DPSC bid specifications by and large (a) did not result in a hJ~gher quality drug product, and (b) did result in excluding every manufacturer except for the one product around which the specification was~ clearly drawn. I used several specific examples to suggest that this was being done ~- namely, the pentagonal shape of ~ne tablet specification, the yellow color specified in another tablet specification, the light tan color specified for a sugar coated tablet, and the pink body and blue cap required in a capsule specification -- and then went on to emphasize even more emphatically the point I was making that such DPSC purchase descriptions are simply a transparent effort to select the product of a single manufacturer, without explicitly so stating. It was at this point in my testimony that I made the statement quoted in Mr. Stetler's letter to the effect "Now the message begins to come through here a little bit..." The examples I cited with respect to clindamycin hydrochloride hydrate capsules PAGENO="0827" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10743 Honorable Gaylord Nelson -.3- March 29, 1974 and clomiphene citrate tablets were so carelessly prepared by DPSC that in the case of clindamycin hydrochloride hydrate capsules DPSC had obviously used draft language apparently obtained fron the Upjohn Company, since DPSC inadvertently neglected to change the reference to another Upjohn drug -- namely linconycin -- within that original clinda.mycin purchase description. Furthermore, as quoted in my testimony, the William ~, Merrell trade name (Clomid) was indeed included in the clomiphene citrate purchase description. Mr. Stetler, in his letter, mentions that the particular four drugs (out of the many mentioned~ during the testimony) are sole source products currently available only from single suppliers. Mr. Stetler is probably correct, but he neglects to point out that as soon as drugs ,go off patent there are generally a number of other firms which will immediately market competing products, and indeed some firms will even grant cross-licenses for products while they are still under patent. Consequently, if the DPSC specification today "locks-in" to one company's peculiar product characteristics, it would virtually guarantee a perpetual monopoly after the drug goes off patent --. that is, by this process, they have effectively and ingeniously circumvented those requirements, such as bidding by generic name, which are intended to instill genuine competitive bidding. [Ironically, if a future competitor were to produce a dosage form which so resembles the original producer's product as to be "pentagonal" in shape or to have "a pink body and a blue cap" the Pharmaceutical Manufacturers Association would loudly cry out -- as they have in the past -- that the second firm's product was a "counterfeit" purposely designed to resemble the original producer's article!] In the final paragraph of Mr. Stetler's letter, he mentions that "contrary to the impression given in Dr. Feldmamn's reported testimony, lincomycin is not a `trade name' for clirtdamycin." Mr. Stetler is quite correct in this regard. Whether it was an error in the stenographer's transcript, or whether it was an inadvertent slip of the tongue on my part -- prior to the date of Mr. Stetler's letter -- I had already reported that (transcript page 10257; line 7) the words ~"trade name" (rather than "drug name" as I had intended to say) appear in the uncorrected transcript. An appropriate correction to this statement was entered on the draft transcript which was returned to the Subcommittee in early March. The point I was making, however, would have been equally valid in either case; namely, that a specific company's specification sheet was being used to draw unnecessarily restrictive specifications for another product produced by that sane company. [Furthermore, another example which included a drug trade name (Clomid) was given immediately thereafter in my testimony.] 32-814 (Pt. 24) 0 - 74 - 53 PAGENO="0828" 10744 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Honorable Gaylord Nelson -4- March 29, 1974 With this single clarification for the word "lincomycin," I believe that all aspects of the testinony I presented were accurate in every respect. Moreover, as you are aware, as enclosure~ to my letter dated February 25, addressed to you as Subcommittee Chairman, for examination and verification purposes, I supplied the Subcommittee with copies of all the documents referred to in my testimony, including the DPSC purchase specifications pertaining to the articles referred to in Mr. Stetler's letter. Consequently, while I agree with~Mr. Stetler's conclusion "that damaging inferences" could be drawn from my testimony, it is my opinion that these damaging inferences are justified and substantiated. Moreover, it is also my opinion that he has attempted to perpetuate a typical drug industry "snow job" on your Subcommittee in asserting that what I presented constituted "misinformation." Sincerely, Edward G. Feldmamn, Ph.D. Associate Executive Director for Scientific Affairs EGF:ehb cc: Mr. John 0. Adams, Minority Counsel Mr. C. Joseph Stetler, PMA PAGENO="0829" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10745 AL.AHRIRI.E. P1EV.. CHAIRMAN ~rflfl MThO~RT M l2itnvteb States Senate DICK CI.ARK, IOWA SELECT COMMITTEE ON SMALL BUSINESS CHESTER H. SMITE. (CREATED PURSUANT TOE. RER. R, RIST CONGRESS) STAFF DIRECVOR AND GENERAI.000HRRI. WASHINGTON, D.C. 20510 Mrch. 25, 1974 Dr. Edward Peidmaun Aaerican Pharmaceutial Association 2215 Constitution Avenue, M, W. Washizzqtat, 1), C. 20037 Dear Dr. Peldmanns I Enclosed is a copy of a letter which the Subcszittee received from Joseph Stetler. president of the pharmaceutical Manufacturers Association. Xt would be greatly appreciated if you would send me your cosmente on us. Statler's claims, Sincerely, GAYL~*W EnSca chairman - Subcommitüe on sonopoly tact, PAGENO="0830" 10746 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY RECE~VEUMA~ I FNARMACELJflCAL MANUFACT~6RER3 I$5 fl~TE~ENTH .STR~T, N. W. C. JosH$~i-~~r~ WA$H~OTON, D.C. aoOon AP4~A COCC .`O2~Q~3244O March 5, 1974 The Honorable Gaylord Nelson Chairman, Subcommittee on Monopoly Senate Small Business Committee United States Senate 221 Russell Senate Office Building Washington, D. C. 20510 Dear Senator Nelson: As you are aware, the PMA did not request an opportunity to testify at your current hearings on the procurement polities of the Defense Supply Agency, We felt, and still feel, that it was the province of the government agencies involved to respond to any criticisms which might be expressed at the hearings. On reading the transcript of the hearing for February 21, however, it struck me that it was important that there should be some correction, in the record, of certain statements by Dr. Edward Feldmann of the American Pharmaceutical As~ociation. As an example to illustrate his thesis that DPSC specifications are designed to exclude lower cost suppliers, Dr. Feld.mann stated, according to page 10257 of the transcript: "Now the message begins to come through here a little bit. When one reads their purchase description for clindamycin hydrochloride hydrate capsules, on which they issued a correction that under the assay the word lincomycin is deleted, and substitute clindarnycin. This suggests to me that the specifications may, or must have been written from a draft that had that trade name originally, and they forgot to delete it in one case." On the same page, Dr. Feldmann gives two other examples of allegedly discriminatory specifications, for clomiphene citrate in which the brand name of Merrell's Clomid is specifically mentioned, and that of propylhexedrine inhalant NF (SKF's Benzedrex). Representing manufacturers of prescription pharmaceuticals PAGENO="0831" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10747 Dr. Feldmann's story of the deletion of the word `lincomycin" and the mention of-the trade name "Clomid" apparently made quite an impression on the Subcommittee and its staff r for on page 10267 it states that Mr. Adams questioned Dr. Feldmann on these cases and was assured that they were being correctly reported. I feel that the Subcommittee should be aware of the fact that all four of these drugs are sole source products. Since they are available only from single suppliers, I fail to see how the form of DPSC'S specifications could be considered to have excluded potential competitors. Furthermore, and contrary to the impression given in Dr. Feldmannts reportad testimony, lixicomycin is not a trade name" for cliadarx~ycin. It is the official or generic name for the active ingredient in Upjobnrs patented Lincocin. Clindamycin, although a related compound, is distinct and separate, with different indications. It is the generic or official name for the active ingredient in Upjohn's patented Cleocyn antibiotic. In view of the damaging inierences drawn from the misinformation presented by Dr. Feldmann, it is important that the record be corrected. - - Sincerely, C. Jo eph ~tetler cc: Mr. John 0. Adams Minority Counsel 4.. PAGENO="0832" 10748 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY EXHIBITS PROVIDED BY THE UNITED STATES PHARMACOPEIA Statement by Dr Daniel Banes Director, Drug Standards Division United States Pharmacopeia 12601 Twinbrook Parkway Rockville Maryland 20852 Before: Subcommittee on Monopoly Senate Small Business Committee Date~ February 21, 1974 I am Daniel Banes Director of the Drug Standards Division of the United States Pharmacopeia, a quasi-public, non-profit scientific insti- tution whose published standards, tests and methods are recognized by law as officially authoritative. I have been active in that position since April, 1973. Previously, I had been an officer of the Food and Drug Administration for thirty-four years, having served as a research chemist specializing in the analysis and standardization of drugs as Director of the Division of Antibiotics as Director of the Office of Pharmaceutical Research and Testing and as Associate Commissioner for Science During the past decade I also have been, and I continue to be a consultant to the World Health Organization on drug standards, on measures for improving the quality of drug products throughout the world, and on the enforcement of drug control laws For the past two decades I have held a faculty appointment as Adjunct Professor of Chemistry at the American University in Washington, D. C., where I teach courses on the chemistry of drugs and the control of drugs Thus my entire professional career has been devoted to service in the public sector, and has been directed primarily toward improving the quality of drugs by the application of scientific principles and scientific findings. PAGENO="0833" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10749 I am grateful for your invitation to discuss with you the question proposed by your Subcommittee namely, how well is the quality of the nation's drug supply being monitored and protected by our system of compendial specifications and standards coupled with FDA's enforcement of them? My answer, in brief, is that the system is working quite well, comparatively speaking, but that it could and should be working much better. I should liketo enlarge upon that response in several dimensions. In the first instance, if we consider progression on a time-scale, there can be no doubt that the standards and specifications of the United States Pharmacopeia are far more perceptive and more demanding than they were thirty-five years ago Similarly, the potentialities of the Food and Drug Administration in monitoring the quality of our drug supply have been considerably extended during that time. The regulatory powers of the Food and Drug Administration have been significantly strengthened by several amendments to the Federal Food, Drug and Cosmetic Act of 1938 -~ most notably the Kefauver-Harris Amendments of 1962, and the Good Manu~ac~' turing Practice provisions of that Amendment. Furthermore, the remarkable advances in all of the pharmaceutical sciences during the past three decades and particularly in drug analysis and biopharmaceutics, have stimulated the adoption of more exacting requirements in governmental and pharmacopeial standards and in manufacturers' drug quality control programs. second, if we compare the quality of the drug supply and the effectiveness of drug regulation in the Unite4 States with those encountered elsewhere, we can again affirm that we have much to which we can point with pride. The drug industry of the United States, the U. S. Food and Drug PAGENO="0834" 10750 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY Administration and the United States Pharmecopeia are generally cited as the hallmarks of preeminence in pharmaceutical circles throughout the world. Only Canada, Scandinavia, and Western Europe approach or equal the levels of excellence that we have established; none surpass them to a significant degree. A third dimension to be considered in evaluating the effectiveness of the present system is the climate of attitudes toward the regulation of drug production and distribution. It seems to me that there is a growing recognition among drug manufacturers that strict compendial standards and active governmental enforcement of these standards -~ measures intended primarily to protect the consumer -- also benefit the drug industry itself. I base this statement on the observation that many quality control scientists employed by industry now collaborate actively on a voluntary basis in helping to improve the standards and specifications of the USP for use as regulatory measures by the enforcement agency. Such an attitude not only reflects an awareness among enlightened members of the industry that these endeavors are necessary to assure the quality of drug products in the market and to protect the good health of both the consumers and the producers. It also results in adherence to good manufacturing practices within the factory, and the establishment of strict internal quality controls. Please note that I have referred to enlijhtened members of the industry, for it must be admitted that the laudable attitude I have described does not command a unanimous consensus. In my ministrations as Director of the USP Drug Standards Division, I have sensed a reluctance on the part of some few companies to release scientific information necessary to the progressive PAGENO="0835" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10751 development of sound public standards for drugs. Previously, as an official of the Food and Drug Administration, I had reason to believe that more than a few companies were oblivious to the principles of good manufacturing prac- tices and quality control. At DSP, we rely exclusively upon voluntary cooperation and the assess- ment of empirical scientific evidence by peer group review. Withholding of significant new data would result in the persistence of mediocre, archaic standards and analytical tests, unless the missing information can be devel- oped by more cooperative ~scientists elsewhere in industry, or by research laboratories in the academic or governmental sectors. Fortunately, we have been able to enlist the aid of several interested research laboratories in this enterprise, particularly those of the Food and Drug Administration. Another avenue for eliciting information leading to the revision of tests and standards is a new USP publication entitled "Comment Proof." This periodical, circulated on subscription, shows the tentative monographs for drug articles and the chapters on general tests proposed for adoption in forthcoming DSP issuances, after deliberations by panels of DSP advisors. The DSP Committee of Revision receives comments and recommendations for changes In these proposals from, representatives of trade associations and of individual manufacturers; from government officials, including those from the Defense Personnel Supply Center, the National Institutes of Health, the Veterans Administration and the Food and Drug Administration; from scientists in schOols of pharmacy and medicine; from scientists associated with foreign pharinacopeIas, foreign companies and foreign governments; and from unaffiliated scientists writing as private individuals. It is my responsibility to review these comments, in concert with the responsible PAGENO="0836" 10752 / COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY subcommittees of the USP Committee of Revision. We then incorporate those changes that are deemed scientifically valid and explain to proponents why certain changes they suggested have not been adopted. In this manner, the USP evolves publicly scrutinized, objective, scientifically verified standards, and practicable tests and assays, through the collaborative efforts of dis- interested scientists. Except for their voluntary contributions of time expended in the laboratory and elsewhere, USP receives no financial grants from government, industry or any academic institution. It is entirely self- supporting through the sale of the compendium and related publications, and through the sale of reference materials used in analytical methods. USP does receive funds for services rendered under not-for-profit contracts with government agencies where these projects bear upon the im- provement of standards or test procedures, regardless of whether the drug products involved are USP articles. Although USP is increasing its standards- setting activities and USP XIX now in preparation will contain 38% more mono- graphs for drugs than USP XVIII, the fact is that there will be no public compendial standards for more than half the drug products on the market. We believe that USP could quickly move to fill this void with appropriate support through not-for-profit contracts. We must recognize, however, that regardless of the virtues written into compendial standards, they will remain meaningless dead letters unless they are effectively enforced. Under delegation of authority from the Secretary of HEW, the Food and Drug Administration is charged with respon- sibility for enforcing the provisions of the Federal Food, Drug and Cosmetic Act. The agency cannot discharge its responsibilities adequately unless it PAGENO="0837" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10753 has the requisite information and resources. We are aware of charges that FDA does not inspect drug factories frequently enough to determine whether good manufacturing practices are in fact observed, or has failed to take notice of defective manufacturing practices known to officials from other agencies. In regard to the latter charge, it would be well to ascertain whether the alleged violations were indeed called to the attention of the responsible agency in a timely manner, and if not, why not? Unless the Food and Drug Administration has authenti- *cated information, it cannot be expected to initiate punitive or corrective action. It is our impression that FDA does react rapidly to rectify problem situations. Under a recently instituted project, USP has been in a position to bring certain drug product problems to the attention of both FDA and the drug industry. To our knowledge, FDA has moved promptly to investigate these problems and to deal with them. The other charge, relating to a low frequency of factory inspections, is far more serious in its implications. If it is true that FDA cannot inves- tigate and correct poor manufacturing conditions among. unenlightened producers because it does not have an adequate force of trained drug inspectors, then there is indeed a deficiency in the present enforcement of drug control standards. If this deficiency exists, it must be eliminated as rapidly as possible. It seems to me that if there is a group of trained drug inspectors elsewhere in government agencies, they should be transferred to the Food and Drug Administration forthwith, in accordance with the principle that the agency responsible for enforcing the law should be given the needed resources that will enable it to do so effectively. Furthermore, a cadre of PAGENO="0838" 10754 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY inspectors within FDA should be trained intensively for drug work and central- ized under the direction of the agency unit responsible for monitoring drug quality. Specialization and centralization has markedly improved the effi- ciency of the FDA analytical drug laboratories during recent years. A similar regrouping of its drug inspection capabilities should likewise result in more efficient operations. I believe that the measures proposed for strengthening the drug control apparatus of EDA, together with our own progress in strengthening DSP will eventually permit art unreservedly affirmative answer to your original question -- that the system for monitoring and protecting the quality of the nation's drug supply is working very well, indeed. If you have any questions, I should be pleased to respond. Thank you. PAGENO="0839" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10755 THE UNITED STATES PHARMACOPEIA ________ 12601 Twinbrook Parkway Rockvile, Md. 20852 (301) 8810666 DANIEL RANES~ PoD. Ofrecla,, D~'og Stacdzrda Do/s/so February 28, 1974 Mr. Benjamin Gordon Staff Economist, Senate Select Committee on Small Business 424 Russell Senate Office Building Washington, D. C. 20510 Dear Mr. Gordon: In response to your telephone call of 27 February 1974, I have perused the 67-page compilation on "Additional Requirements" submitted by the Department of Defense to the Subcommittee on Monopoly of the Senate Select Committee on Small Business. These documents, supplementing a similar list previously transmitted to you, comprise a catalog of about 500 drug products for which the Department of Defense is said to "develop definitive product specifications which often exceed official or commercial standards." When I testified before the Subcommittee on Monopoly, I stated that in those few instances where the Department of Defense specifications have been considered scientifically significant and have served to strengthen the standards for a drug product, the United States Pharmacopeia has moved to adopt the modifications. In my testimony, I cited actual examples to illustrate that statement. The same observation holds for the supplementary listing now before us. It contains about 200 USP articles. Except for five or six articles, none of the so-called "definitive product specifications which exceed official standards" can be considered suitable candidates for adoption 10 the United States Pharmacopeia. From the standpoint of DSP, the others are either irrelevant, trivial or superfluous. The most frequently occurring entries under "Additional Requirements" are the phrases: "Classification of Defects" and "naxinum unrcfrigerated shipping time for items requiring refrigeration. ` Neither is germane to DSP standard- setting. Another cotrmonly encountered "requirement" is `Free from sedIment" for certain fluid drugs (e.g. Cinnamon Oil on page 1, Diphenhydramine Hydro- chloride Elixir on page 2, etc.) which is said "to assure best production procedures and controls are utilized consistent with good manufacturing practices." This "additional requirement" is redundant; drugs in solutions by definition should be free from solids of all kinds, including sediments. Founded 1820. Published by The United States Phannacopeial Convention, Inc. The United States Pharrnacczpeia (U.S.P.) is a legally recognized Compendium of standards for the best, establiahed drugs, and includes ao~ys and tests for the determination of strength, quality and purity. PAGENO="0840" 10756 COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY THE UNITED STATES PHARMACOPEIA Mr Benjamin Gordon - 2 - February 28 1974 In many instances, the so-called "additional requirements" are trivial with respect to drug standardization, whatever their merit may be otherwise. Examples are the color of Ethinyl Estradiol Tablets and palatability of Meclizine Hydrochloride Tablets (page 17). These attributes maybe of utility and importance to the consumer, but they are not properly subjects for strict USP standard-setting. An example of a sup~rfluous "additional requirement" is the test for loss on drying for Meclizine Hydrochloride Tablets (page 17). The Department of Defense states that this test is intended `to assure the stability of the product in that excessive moisture may cause deterioration To our know- ledge US? has recei~ved no scientific data to support this statement from either the Department of Defense or regulatory agencies or from users or manufacturers of the product. In the absence of such supporting information, we would see no reason for adopting the proposed standard. An "additional requirement' for Mannitol USP (page 38) is that it shall be free of boron because "the item is used in water chemistry control." USP is concerned with setting standards for articles to be utilized as drugs, not for any other purposes In my opinion the documents submitted to you contain but few authentic examples of definitive product specifications that exceed present DSP standards Sincerely yours, Daniel Banes, Ph.D. DB/ps PAGENO="0841" COMPETITIVE PROBLEMS IN THE DRUG INDUSTRY 10757 SYN1L( ~ in; STAN~ORO INOUSTRIAL PARK PALO ALTO CAUFORNIA 94304 RECEIV~~~flq 14 191~ i~i1, Al irnr IU)WtlIli sir is,,, (41h) ibbb1b1 March 8, 1974 Senator Gaylord Nelson Room 221 Old Senate Office Building Washington, D.C. 20510 Dear Senator Nelson: Although we have not yet seen a transQript of the March 5 hearings of the Senate Small Business subcommittee, we would like to take strong exception to a statement made concerning Syntex. Our source is a Washington Post article on March 6 which said that `... Veteran Administration officials told Nelson yesterday about `serious problems' recently with three companies. They said V.A. inspectors found `bacterially contaminated' capsules at a Syntex plant". The facts are that Syntex received empty capsules from a regular supplier. Routine Syntex inspection procedures indicated that these capsules were questionable. These questioned capsules were placed in quarantine and were not used in any products distributed or sold. This was told to a V.A. inspector d~iring a normal plant visit early in February. rar from evidencing a "serious problem", this situation demonstrated the effectiveness of Syntex quality control procedures in discavering and isolating questionable material received from an outside supplier. We want the subcommittee to have this additional infor- mation, and we also request that the letter be included in the hearing record. Yours sincerely, \ALL~ ~ AB:jb PAGENO="0842" 10758 COMPETITIVE PROBLEMS IN THE t~RUG INDUSTRY AMERICAN PHARMACEUTICAL ASSOCIATION The Natioval Poofe,eiovxl Socjety of Pharvoecists WILLIAM S. APPLE Ph.D. Executive Director August 1 3, 1 974 Mr. Benjamin Gordon Staff Economist Select Committee on Small Business Monopoly Subcommittee United States Senate Room 424 - Old Senate Office Building Washington, D. C. 20510 Dear Mr. Gordon: During the February 21, 1974 hearings of the Subcommittee, you requested that we attempt to Identify drug manufacturing firms which are frequently characterized as "schlock manufacturers." This Is to advise you that we asked our Academy of Pharmaceutical Sciences, which has been most verbal In challenging the Association's opinion that the quality of the nation's drug supply is very high, to have their members identify firms which they individually regard as warranting the characteri- zation "schlock manufacturers." This is to advise you that the Academy of Pharmaceutical Science leadership has declined to query its membership on the grounds that its members, which might have such information, did not wish to incur the risk of a libel suit by gratuitously disclosing that Information in public. It has always been my understanding that any such Information provided a Congressional Committee would not be actionable. It was their further opinion that such information should come directly from FDA. I personally have metwith the leadership of the APS on numerous occasions, during which generalized disparaging comments were made about the ability of some manufacturers to produce quality products. When I have asked them to name names, they have refused. While we regret we are unable to furnish the Subcommittee with the information requested, we feel that your Inquiry has served a useful purpose, namely to put everyone on notice that yourSubcommittee expects those who question the quality of the nation's drug supply and FDA enforcement of the laws assuring that quality to come up with hard facts if they wish to have their charges seriously considered. Sincerely, WSA:lf