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Professional Fee Boosts Rx Cost Only 2.1%, Virginia Blue Cross reported after a survey of 12 pharmacies in areas ranging in population from under 4,000 to over 500,000. The survey was conducted to determine the feasibility of replacing the acquisition-cost-plus-professional-fee reimbursement system with payment based on usual and customary charges. The Va. Blue Cross Rx prepayment plan now uses a $1.85 fee.

The survey found that the average Rx price on the usual-and-customary basis is $3.82—$2.05 for the ingredients and $1.77 markup. The average was 8¢ higher, $3.90, when the $1.85 fee was used. The study excluded OCs and o-t-c- drugs. On the markup basis, the average charge ranged widely, with a high of $4.61 in one pharmacy in a city of 500,000 to 599,999 persons. The low, $3.40, was recorded in two pharmacies. One was in a town with 3,000 to 3,999 population, the other in a community of 10,000 to 14,999 persons.

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(From the New York Times, Wednesday, June 10, 1970) OFFICIAL Says MillioN GET Pill ILLEGALLY

(By Richard D. Lyons) WASHINGTON, June 9.-The head of the Food and Drug Administration, Dr. Charles C. Edwards, estimated today that one million American women were obtaining birth control pills illegally.

Testifying before a House committee investigating F.D.A. affairs, Dr. Edwards said it was difficult to control such traffic and that precise figures of illegal oral contraceptive sales were unknown.

Privately, however, he said that his agency had received estimates that between 15 and 50 per cent of the 8.5 million American women getting the pills were doing so without prescriptions.

Dr. Edwards said he considered the 50 per cent estimate far too high and that the more correct figure was closer to the lowest estimate, which would mean about one million.

“We are certain that a tremendous number of women in the United States are getting their drugs through other channels (than prescriptions for themselves)," Dr. Edwards told the House Committee on Government Operations.

OVERUTILIZATION OF PRESCRIPTION

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He cited one source of the illegal traffic as “overutilization of one prescription,”! explaining that some women receive prescriptions for an indefinite number of refills, some of which are given to women for whom they were not intended.

He said college campuses were areas in which illegal birth control pill traffic was high, but that it was almost impossible to stop it because "doctors couldn't conceivably ride herd on all the people taking oral contraceptives.”.

Representative L. H. Fountain, Democrat of North Carolina, the committee chairman, asked if prescriptions could be written limiting the number of refills. Dr. Edwards said that it was possible, but that doctors themselves were the “controlling factor.”

The exchange took place during the first of three days of hearings called to inquire into the deficiencies of the F.D.A. Today's hearing focused on oral contraceptives and whether women were being adequately informed of potential hazards of birth control pills.

Dr. Edwards announced that starting tomorrow his agency would require that each package of oral contraceptives contain a 132-word leatlet warning the purchaser: “Do not take this drug without your doctor's continued supervision.'

VARIETY OF SIDE EFFECTS

The leaflet states that the prescribing physician will, upon request, provide a more extensive written statement describing the variety of side effects, some of them fatal, that oral contraceptives can cause.

The two written statements are a compromise between what Dr. Edwards announced March 4 that the F.D.A. might require and what the American Medical Association, the drug industry and higher officials in the Department of Health, Education and Welfare wanted done.

On March 4, Dr. Edwards proposed that a 660-word leaflet giving specific details of side effects be included in each pill package.

Dr. Edwards and William Goodrich, assistant general counsel of H.E.W. for food and drugs, testified today that the original version was opposed by the American Medical Association, the American College of Obstetrics and Gynecology, the Pharmaceutical Manufacturers Association, four drug companies and four state medical societies.

The main argument against the longer version was that it was too complicated for the average woman to understand. Mr. Goodrich said the list of side effects in the shorter version was incomplete and that because of this a woman would be unable to make an accurate judgment as to her own condition.

Then followed a long series of questions from Congressmen and committee staff members as to why Dr. Edwards changed the leaflet that he had originally drafted.

DOCTORS' POSITION Dr. Edwards said that “pressure was being exerted by the American Medical Association and the American College of Obstetricians and Gynecologists.' These groups have taken the position that doctors, not women, are best qualified to determine if birth control pills are harmful to a particular woman and that the leaflet is an intrusion into the “sacred doctor-patient relationship.”

Consumer and feminist organizations have contended that women have a right to know as much as possible about the drugs they are taking and thus the shorter version does not contain enough information.

Dr. Edwards would only state for the record that Dr. Roger 0. Egeberg, the assistant secretary of H.E.W. for health and scientific affairs, and Robert H. Finch, who is vacating his post as H.E.W. Secretary, were "involved in” the revision.

Both Dr. Egeberg and Mr. Finch have stated that they ordered and approved the shorter version because they felt that most women either would not read or could not understand the longer version.

Dr. Edwards also announced that the F.D.A. would undertake a market survey by the end of the year to determine exactly what type of information about birth control pills was being received by American women.

Goddard's Comments on MD-Dispensing, made during Sen. Hart's diet-pill hearings, put him in the politically awkward position of indirectly opposing the Mich. Demo's bill to limit MD-dispensing. The FDA chief's Feb. 2 remarks were prompted by a question from Jerry Cohen, chief counsel to Hart's Antitrust Subcmte. “Doesn't it make sense to say that MDs ought not to be allowed to dispense drugs from their own offices?' Cohen asked.

"I'm torn badly on such a question," Goddard said. “It becomes very difficult (to answer) when you look at the practice of medicine There is appropriate dispensing by physicians. I would suggest that remedial action (against bad dispensing practices) could more appropriately be made by (state and local) medical societies, in concert with

AMA, rather than by FDA.” Cohen then spoke of possible “conflicts of interest when you give an MD license to act as a businessman ... selling pills," and asked, "shouldn't we let the pharmacist be the businessman?” Goddard replied that he wished "it were that simple” and questioned if Cohen would “stop the physician from giving an injection?" Goddard recalled his own rural practice in which "I dispensed all the drugs and included (their) cost” in his fee of $2 per office visit. "I feel that stronger actions are needed by the medical profession itself, but I would find it very difficult to draw the line,” Goddard added. “I think this is a subject that the AMA can more properly discuss.”

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Professional Fee Boosts Rx Cost Only 2.1%, Virginia Blue Cross reported after a survey of 12 pharmacies in areas ranging in population from under 4,000 to over 500,000. The survey was conducted to determine the feasibility of replacing the acquisition-cost-plus-professional-fee reimbursement system with payment based on usual and customary charges. The Va. Blue Cross Rx prepayment plan now uses a $1.85 fee.

The survey found that the average Rx price on the usual-and-customary basis is $3.82-$2.05 for the ingredients and $1.77 markup. The average was 8¢ higher, $3.90, when the $1.85 fee was used. The study excluded OCs and o-t-c- drugs. On the markup basis, the average charge ranged widely, with a high of $4.61 in one pharmacy in a city of 500,000 to 599,999 persons. The low, $3.40, was recorded in two pharmacies. One was in a town with 3,000 to 3,999 population, the other in a community of 10,000 to 14,999 persons.

(From the New York Times, Wednesday, June 10, 1970) OFFICIAL SAYS MILLION Ger Pill ILLEGALLY

(By Richard D. Lyons) WASHINGTON, June 9.-The head of the Food and Drug Administration, Dr. Charles C. Edwards, estimated today that one million American women were obtaining birth control pills illegally.

Testifying before a House committee investigating F.D.A. affairs, Dr. Edwards said it was difficult to control such traffic and that precise figures of illegal oral contraceptive sales were unknown.

Privately, however, he said that his agency had received estimates that between 15 and 50 per cent of the 8.5 million American women getting the pills were doing so without prescriptions.

Dr. Edwards said he considered the 50 per cent estimate far too high and that the more correct figure was closer to the lowest estimate, which would mean about one million.

“We are certain that a tremendous number of women in the United States are getting their drugs through other channels (than prescriptions for themselves),” Dr. Edwards told the House Committee on Government Operations.

OVERUTILIZATION OF PRESCRIPTION

He cited one source of the illegal traffic as "overutilization of one prescription," explaining that some women receive prescriptions for an indefinite number of refills, some of which are given to women for whom they were not intended.

He said college campuses were areas in which illegal birth control pill traffic was high, but that it was almost impossible to stop it because “doctors couldn't conceivably ride herd on all the people taking oral contraceptives.”

Representative L. H. Fountain, Democrat of North Carolina, the committee chairman, asked if prescriptions could be written limiting the number of refills. Dr. Edwards said that it was possible, but that doctors themselves were the “controlling factor.”

The exchange took place during the first of three days of hearings called to inquire into the deficiencies of the F.D.A. Today's hearing focused on oral contraceptives and whether women were being adequately informed of potential hazards of birth control pills.

Dr. Edwards announced that starting tomorrow his agency would require that each package of oral contraceptives contain a 132-word leaflet warning the purchaser: "Do not take this drug without your doctor's continued supervision."

VARIETY OF SIDE EFFECTS

The leaflet states that the prescribing physician will, upon request, provide a more extensive written statement describing the variety of side effects, some of them fatal, that oral contraceptives can cause.

The two written statements are a compromise between what Dr. Edwards announced March 4 that the F.D.A. might require and what the American Medical Association, the drug industry and higher officials in the Department of Health, Education and Welfare wanted done.

On March 4, Dr. Edwards proposed that a 660-word leaflet giving specific details of side effects be included in each pill package.

Dr. Edwards and William Goodrich, assistant general counsel of H.E.W. for food and drugs, testified today that the original version was opposed by the American Medical Association, the American College of Obstetrics and Gynecology, the Pharmaceutical Manufacturers Association, four drug companies and four state medical societies.

The main argument against the longer version was that it was too complicated for the average woman to understand. Mr. Goodrich said the list of side effects in the shorter version was incomplete and that because of this a woman would be unable to make an accurate judgment as to her own condition.

Then followed a long series of questions from Congressmen and committee staff members as to why Dr. Edwards changed the leaflet that he had originally drafted.

DOCTORS' POSITION Dr. Edwards said that “pressure was being exerted by the American Medical Association and the American College of Obstetricians and Gynecologists." These groups have taken the position that doctors, not women, are best qualified to determine if birth control pills are harmful to a particular woman and that the leaflet is an intrusion into the sacred doctor-patient relationship.”

Consumer and feminist organizations have contended that women have a right to know as much as possible about the drugs they are taking and thus the shorter version does not contain enough information.

Dr. Edwards would only state for the record that Dr. Roger 0. Egeberg, the assistant secretary of H.E.W. for health and scientific affairs, and Robert H. Finch, who is vacating his post as H.E.W. Secretary, were “involved in” the revision.

Both Dr. Egeberg and Mr. Finch have stated that they ordered and approved the shorter version because they felt that most women either would not read or could not understand the longer version.

Dr. Edwards also announced that the F.D.A. would undertake a market survey by the end of the year to determine exactly what type of information about birth control pills was being received by American women.

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Goddard's Comments on MD-Dispensing, made during Sen. Hart's diet-pill hearings, put him in the politically awkward position of indirectly opposing the Mich. Demo's bill to limit MD-dispensing. The FDA chief's Feb. 2 remarks were prompted by a question from Jerry Cohen, chief counsel to Hart's Antitrust Subcmte. “Doesn't it make sense to say that MDs ought not to be allowed to dispense drugs from their own offices?” Cohen asked.

"I'm torn badly on such a question,” Goddard said. “It becomes very
difficult (to answer) when you look at the practice of medicine
There is appropriate dispensing by physicians. I would suggest that
remedial action (against bad dispensing practices) could more appropri-
ately be made by (state and local) medical societies, in concert with

AMA, rather than by FDA.” Cohen then spoke of possible "conflicts of interest when you give an MD license to act as a businessman ... selling pills,” and asked, "shouldn't we let the pharmacist be the businessman?” Goddard replied that he wished "it were that simple and questioned if Cohen would "stop the physician from giving an injection?” Goddard recalled his own rural practice in which “I dispensed all the drugs and included (their) cost” in his fee of $2 per office visit. "I feel that stronger actions are needed by the medical profession itself, but I would find it very difficult to draw the line," Goddard added. “I think this is a subject that the AMA can more properly discuss.”

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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 73.3% 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

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