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consult the physician before making changes an presence of, the patient.

There should be no substitution of ing he should follow the prescriber's directions

If no refilling instructions are contained pharmacist will not, and according to law,

without the authority of the prescriber. The pharmacist should never discuss the cor therapeutic effects with the patient. When such matically suggest the prescriber is the proper should be discussed.

The pharmacist shall be responsible for provi which the physician may draw by prescription and serve as a source of information on new order that the physician's patient may have adv cal developments.

FDC REPORTS-"THE PIN

(A Specialized Weekly for Executives in the I

dustries, Published by F-D-C- Reports, Inc.

Washington, D. C. 20004. Phone (202) 638–44 Vol. 32, No. 13

THE NEWS THIS WI Trade and Government Memos: *Lanvin-Ritz fragrances rise $1 mil. to $34

volume *British OC data under review by FDA, WE

studies are valid. *Robins' sales up only 5.8% ($6.7 mil.), w

acquisition *Nutritionist Jean Maver opposes vitamin

mony for Miles *Avon destroys Topaze cologne mist becau

listed in 1967.--
*Recall list includes contaminated Oxzyn ey

Kaopectate --
FDA topside still marking time on cosmeti

man yet. --
* All-supplemental NDA list includes Oyral,

win.. *Shulton's Old Spice line held its own in

campaign *Justice officials in London Fisons

patent-antitrust case.. *SK&F's Thorazine price cuts range from

is 30%*Reveo's third-quarter sales up 16% to $2

earnings *Sav-A-Stop into Army-Navy discount st

Products acquisition.. *Opposition to Medicaid pharmacy ID num

pharmacy assns*BNDD's Ingersoll opposes Sen. Hughes' bil

drug abuse agency *FDA deferring decertification of antibioti

fective" by NAS/NRC.. *Pfizer's Antivert rules ineffective as fixed

actions. *Drug plant inspections every six months

Nelson bill.. *Medicare “Part C” proposal could take

pharmacies.

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* * A MHO'S Worldwide Drug Sales Gain $68 Mil. to $632 mil. Pharmaceuticals account for bulk of gain, rising 13% from $380 mil. to $429 mil. Proprietaries record 10% sales rise for second straight year, from $185 mil. to $203 mil. Anacin and Preparation H "hold leadership positions.” Dristan makes gains. Domestic Rx sales advance 12% v. 15% rise overseas. U.S. proprietary sales increase is 8% v. 16% abroad. Profits match sales growth, rising 10.5% to $127.1 mil. Foreign earnings jump 17.2% to $27 mil.

Page 9 * * Ros Written Generically Rise, but Brand-Name products continue to be used by many pharmacists in filling large shares of “generic" Rxs, Gosselin data indicate. Tetracycline prescribed generically in 8.3 mil. Rxs in 1969, but 2.4 mil. are filled with products of brand-name mfr. Gosselin figures indicate $3 bil. mfrs.level Rx drug market for 1969. Generics represent 8.8% of 551 mil. new Rxs, up from 1968's 8.2%. Average charge for all new Rxs rises 4.3% to $3.86, while average for generics jumps 7.5% to $3.02. Special study in Iowa shows Medicaid Rxs may provide unique prescribing pattern.

Page 6 R&D expenditures, which Searle detailed for the first time, totaled $18.1 mil. (1% of sales) in 1969, up 12.5% over $16 mil. (just under 11%) in 1968. The (increase was due to higher spending on potential Rx and animal health products and multiphasic health testing, the company said. Cleared for marketing early this year was Ornitrol-a treated reproduction-inhibiting whole kernel corn for "control of vagrant pigeons.”

Profits increased 6.1% to $28.5 mil. ($2.08), from $27.4 mil. ($1.96) in 1968, but profit margin dropped from 18.5% to 17.4%. The decline resulted from diversification efforts outside of the pharmaceutical field, start-up costs in Puerto Rico and in the United Kingdom, and the addition of exec and management personnel needed to manage a diversified operation, Searle said.

GOSSELIN DATA ON TETRACYCLINE, AMPICILLIN, AND OTHER DRUGS SHOWS M.D.S

ARE WRITING MORE GENERIC RXS BUT PHARMACISTS FILL THEM WITH BRANDS

Market research data on tetracycline, ampicillin, and four other major drugs indicate that the number of Rxs which M.D.s write generically is on the increase, but pharmacists continue to dispense brand-name products in filling a large share of the generic Rxs.

Tetracycline was prescribed generically in 8.3 mil. Rxs written in 1969, but only 5.9 mil. were filled with a generic. Brands were dispensed by pharmacists in filling 2.4 mil. of the generic Rxs (see table below).

Penicillin Gwas prescribed generically in 2.8 mil. Rxs, but only 1.2 mil. of them were filled with a generic.

These and other interesting figures were included in a March 19 presentation by R. A. Gosselin to the NYC Pharmaceutical Ad Club (PAC). Gosselin's Nat). Prescription Audit (NPA) provides a nationwide projection of figures on M.D. prescribing patterns, based on an actual count of Rxs in the files of a scientifically selected panel of retail pharmacies. Gosselin also provides mfrs. with the Natl. Hospital Survey, which measures the use of Rx drugs in medical institutions.

Gosselin's data indicated the U.S. Rx drug market for 1969 totaled $3 bil. at the mfrs.' price level. Other market research figures may show a “somewhat” higher total, Gosselin noted, by including distribution channels in addition to the two main ones—retail pharmacies and

hospitals. No figures were presented by Gosselin to PAC on the use of generics in hospitals, where the volume of non-branded drugs has made greatest gains. Use of Rx drugs in both hospitals and retail pharmacies had “phenomenal growth” during the the sixties, Gosselin told PAC. But Gosselin added that the proportional share of the total Rx drug dollar volume represented by each segment has “remained relatively constant" at for retail pharmacies and

for hospitals.

The names of at least 80 suppliers of tetracycline registered regularly in the NPA for 1969, but Gosselin explained that six brands were “arbitrarily.” selected as the original" ones. Since only five companies were the original marketers of tetracycline in the U.S., Gosselin has either included a late-comer's brand in his six, or one of the five companies had two brands.

75%

25%

HOW M.D.'s WROTE AND PHARMACISTS DISPENSED RXS FOR 6 MAJOR "GENERICS" IN 1969

(Based on R. A. Gosselin National Rx audit figures)

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One brand of digoxin accounted for 78.4% of the digoxin Rxs filled in 1969– 2.5 mil. out of 3.2 mil. The 2.5 mil. total for this brand apparently included 1 mil. digoxin Rxs, written generically. In all, the names of 39 digoxin suppliers registered regularly in the 1969 NPA.

Ampicillin represents an unusual situation. Six brands accounted for virtually all-99.8%-of the 13.9 mil. Rxs written in 1969 for the leading semi-synthetic penicillin. But the names of 15 suppliers were registered, and nine of them apparently divided a market of about 60,000 Rxs.

Zenith, the first to market a generic ampicillin, started in March 1969 with bulk material from patent-free Italy. The NPA figures indicate that Zenith, if it sold any substantial amount of generic ampicillin in 1969, must have moved it through hospitals.

Beecham, owner of the basic ampicillin product patent, sued Zenith for infringement in May 1969, and the case is now going through various pretrial phases. The Justice Dept., in an apparent effort to open the $85-mil.-plus U.S. ampicillin market to generics, has filed a civil antitrust suit on March 19 against Beecham and its primary U.S. licensee, Bristol Labs (“The Pink Sheet" March 23, page 20).

The number of new Rxs, written generically, has been increasing at a faster rate than the percentage gains recorded for all new Rxs. In 1969, generics had an 11.9% increase compared to 5.3% for new Rxs as a

whole. Even with a faster rate of increase, generic Rxs in 1969 still accounted for only 8.8% of the 551 mil. plus new Rxs written during the year. In 1968, the generic share of total new Rxs was 8.2%. In numbers, generics gained 5.1 mil. in 1959 to 48.4 mil. from 1968's 43.3 mil. The Price Argument: Average Charge For Generic Rxs Increasing Faster

Generic Rxs for four major drugs in 1969 increased at a faster percentage rate than the 11.9% gain for all generic Rxs. For tetracycline, generic Rxs rose 23.9%-from 6.5 mil. Rxs in 1968 to 8.3 mil. in 1969; ampicillin had a 73.30 increase—from 1.8 mil. to 3.1 mil. generic Rxs. Prednisone generic Rxs were up 14.3% and digoxin gained 26.1%, according to Gosselin's data.

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Total. All other.

73.1 26.9

74.0 26.0

The importance of price as the major argument used by govt. and other promoters of generics may be diminishing in the face of Gosselin data showing that the average charge for dispensing a generic is increasing faster than the average for all new Rxs.

The average charge for all new Rxs rose from $3.70 to $3.86 in 1969—up 4.3%but the average for all new generics went from $2.81 to $3.02, a 7.5% gain and the average for the "Top 10" generics—including tetracycline and the five other important drugs—increased 9.1% in 1969 from $2.76 to $3.01.

Even greater percentage and dollar increases in the average price of generic Rxs are evident when 1969 is compared with 1959. The average charge for all new Rxs rose only 22.5% from $3.15 in 1959 to $3.86 in 1969. This compares with a 26% increase in the general cost-of-living index during the 10-year period.

But the average price for all generic Rxs jumped 63.2% from $1.85 in 1959 to $3.02 in 1969, and the average for the “Top 10” generics went up 99.3% from $1.51 in 1959 to $3.01 in 1969.

Contributing to the big increases is a major change in the kind of drugs now in the generic group. Expiration of patents and other developments have placed important drugs in the generic category. Only five of the “Top 10” generics in 1959 were on the same list in 1969—phenobarbital, thyroid, penicillin G, paregoric, and nitroglycerin. The remaining five of the “Top 10” for 1969 are: tetracycline, ampicillin, prednisone, digoxin, and meprobamate. The “Top 10” account for over half of all the Rxs written generically.

Medicaid Rxs may provide a unique prescribing pattern, it was indicated in Gosselin data from a special study of Rxs dispensed in Iowa in 1968. Ataraxics (tranquilizers), with 15.1% of all Iowa Medicaid Rxs, topped the list of therapeutic categories in the govt. program. Antibiotics, which led non-Medicaid Rxs with 23.6% were ranked fifth

in Medicaid dispensing at 7.2%. In Iowa, 13.6% of all Rxs dispensed were through Medicaid, Gosselin noted, but early NPA data indicates a natl. figure of 10% as the Medicaid share of total Rxs dispensed. In some states, Gosselin said, the Medicaid percentage may be higher. Gosselin's NPA is now collecting, on a routine basis, nationwide data on Medicaid Rxs and on other Rxs dispensed under third-party programs, including Blue Cross and private insurance carriers, particularly those involved in handling the United Auto Workers contract. Cardiovascular products ranked as the Number Two therapeutic category in the Iowa Medicaid study; analgesics are Number Two in Iowa non-Medicaid Rxs.

AMHO'S WORLDWIDE DRUG SALES GAIN $68 MILLION TO $632 MILLION; U.S. RX VOLUME

ACCOUNTS FOR $31 MILLION OF INCREASE; DOMESTIC PROPRIETARIES FOR $12 MILLION

AMHO's worldwide drug business jumped $68 mil. (12%) in 1969 from about $564 mil. to $632 mil., increasing from 52% to 53% of the firm's $1-bil.-plus total sales. Pharmaceuticals accounted for the bulk of the gain, rising from $380 mil. to $429 mil. Proprietaries recorded a 10% increase for the second straight year, from $185 mil. to $203 mil.

Growth was somewhat better outside the U.S., both in pharmaceuticals and proprietaries. Domestic Rx sales advanced 12% from about $262 mil. to $293 mil. compared to a 15% increase overseas from $118 mil. to $136 mil. U.S. proprietary volume was up about 8% from $148 mil. to $160 mil. v. a 16% increase abroad from $37 mil. to $43 mil.

AMHO reports its divisional, foreign and domestic breakdown on the basis of gross sales. The figures reported above and in the accompanying table are computed by "The Pink Sheet” by applying to net sales the percentage each group contributed to gross.

Leading AMHO's pharmaceutical sales increase were Wyeth's Omnipen ampicillin, Ovral 1/2-mg. OC, the Tubex line of sterile, disposable, prefilled needle-cartridge syringe units, and its Serax mid-range tranquilizer, Wyeth's Equagesic tranquilizer also had appreciable sales gains," and its SMA infant formula “made good progress” aided by the new 32-ounce can of SMA Ready-to-Feed, introduced in April.

CALIFORNIA ATTORNEY GENERAL SAYS PHARMACISTS DON'T DISPENSE LOWEST

COST DRUGS FOR MEDI-CAL; ACQUISITION COST DEFINITION BRINGS CRITICISM OF RETAILERS AND FORMULARY

The Calif. attorney general has charged that many pharmacists are violating the Medi-Cal formulary's rule that “the pharmacist shall, in consultation with the prescriber, dispense the lowest-cost item he has in stock, including generic equivalent, which meets the medical needs of the recipient."

The 74-page report, covering all aspects of the Medi-Cal program, was accompanied by a four-page press release which helped it garner extensive lay-press coverage, including the Wall Street Journal and the New York Times.

The report listed some nine ways "in which pharmacies are engaging in activities which violate the laws and regs governing Medi-Cal.” The charges ranged from outright fraud and kickbacks to situations, such as dispensing “excessive” Rxs, where the fault may lie with the MD, not the pharmacist. (See box on next page for text of the violations

imputed to pharmacists.) The criticism about failure to dispense the lowest-cost drug contended that “a brand name is always more expensive than the generic-name drug” and often “is as much as two or three times more expensive.” It added that “in situations where an inexpensive generic drug could have been dispensed, the patient has been given an expensive brand-name drug.

COMPULSORY GENERIC PRESCRIBING ON GOVERNMENT PROGRAMS NOT FEASIBLE UNTIL CLINICAL EQUIVALENCY IS PROVEN, H-E-W REPORT MAY TELL WHITE HOUSE

Compulsory generic prescribing on all federal programs is not feasible until it can be demonstrated that generic equivalents actually provide the same therapeutic benefits, the H-E-W Dept. may tell the White House in its report on the costs of medical care.

If reflected in the final report, scheduled to go to President Johnson in a few weeks, this view will be in line with the thinking of FDA Com. Goddard, who arranged a trip for dept. officials to the military drug procurement center in Philadelphia last December (“The Pink Sheet" Jan. 2).

Purpose of the meeting was to learn how the military insures quality drugs for its personnel via a procurement program based largely on generics. Both Goddard and Public Health Service Surgeon General Dr. William Stewart are understood to be interested in getting appropriations to support studies of "clinical equivalency” by their agencies.

Drug prices have not made a major contribution to the increasing costs of medical care, the report might say, quoting Consumer Price Index

statistics to show that MDs fees and hospital charges have shot upward. A statement like this in a prestigious govt. report would support the case which the Pharmaceutical Mfrs. Assn. (PMA) has been preparing and documenting for months in anticipation of attacks on Capitol Hill during this session as part of the drive to enact generic drug legislation. The PMA case was unveiled to closed meetings of members held in NYC and Chicago last week, and was well received as a good start on a “professional job.” White House Report May Call For Competition At Pharmacy As Well As Manu

facturing Level H-E-W, however, may dull the thrust of its “good word” for the industry by pointing out that drug costs are higher than they would be if greater price competition existed, either at the manufacturing or retail pharmacy levels. The Kefauver investigation might be used as a reference to show the role of promotion costs in the prices of branded drugs.

Absence of an official or authoritative source of information for MDs on the effectiveness and safety of drugs, and the need for FDA to do something about this—another Goddard favorite project—also could be discussed in the White House report.

Even when generics are prescribed, the report may say, the pharmacist might not dispense a lower cost drug. Some drafts of the report are critical of

the mark-up system in this regard. While the White House report is being finished, memos also are circulating around the dept. among officials who have to deal directly and immediately with

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