checks. Today, I have about 108 orders which are accompanied by 150 patient's checks. Now, numerically, if you add this up and take them over the period of time that these hearings have been going on, I think you will find that the statistical balance is greatly in favor of the man who has been helping the patients.

if

Hearings and investigations have been going on by this committee and earlier committees for several years. Admittedly, you have turned up cases of abusement. How many hundreds would you have you did? At the same time, if I were to have collected these orders at the rate of 100 or more-well, there are six firms just like mine. I think it would take us two or three trucks just to take care of the documentation of the physicians who are trying to help their patients. Furthermore, it is our belief that the prohibition on dispensing would not affect the man who is deliberately abusing his dispensing privilege. If you pass a bill that prohibits him from dispensing he can just as easily turn to injecting, since injecting is specifically exempted under the second paragraph of section 5. For every tablet that can be given there is usually a comparable injection, and the true abuser will simply start giving his patient injections. If you then pass a bill which would prohibit him from injecting he could begin to require unnecessary diagnostic tests on patients that he sees. Thus, to take an example, if a patient went to see a doctor with a complaint of feeling listless, one man in good conscience could examine him and determine that he might need a vitamin supplement or possibly a week's vacation. Another man, under the guise of a more thorough examination, might require a urine analysis, blood test, basal metabolism, and any other tests that he deemed necessary for complete diagnosis of the problem.

In essence he would not be practicing bad medicine, although in all likelihood he would be practicing unnecessary medicine. The point that is to be made from these two examples is that there is more than one way to skin a cat, and the prohibition on dispensing would not stop a man who truly falls into the category of an abuser. The question of this man's activities are really moral and ethical, and the proper means of dealing with him would be through moral and ethical gislation rather than through economic legislation such as S. 1575. On the other hand I ask you to consider the case of a physician who, in the interest of his patient, is dispensing medication in order to help the patient financially. This man could possibly be subject to a capricious charge brought against him, and rather then go to any sort of trouble for a matter that is simply being done as a favor, he probably would rather forget about dispensing altogether. Accordingly, the net effect of section 5 would be to drive out the physicians who try to help their patients, while in no way affecting the physicians who profit unduly.

Perhaps the AMA has the answer, in their advocacy of dispensing where, in the opinion of the physician, it is in the best interest of the patient. This I believe is also the same position that was taken by the Surgeon General this morning. The AMA's position is a moral position, and we feel it is more appropriate in keeping with a problem that is basically moral. As I have pointed out earlier in the testimony, it is difficult, if not impossible, to control moral behaviour through economic legislation.

Similarly it should be mentioned that the very exceptions that are made in the enclosed bill point out some of the safeguards that are already inherent in the system, and which would partially be negated if the bill were to be passed in its present form.

At the present time the patient who lives in a big city is partially protected from unfair practices because of the fact that there are many physicians as well as many pharmacies within his local area. That is, if there was a dispensing physician or group of dispensing physicians to whom he objected, he would have the freedom to go to another physician.

At the other end of the extreme we have the case of the lone country physician who does quite possibly have a monopoly potential, but who at the same time has been specifically exempted from the provisions of the proposed bill because of valid medical reasons. In the middle we have the semirural area which supports one or possibly two drug stores, and at the same time may have one, two, or possibly more physicians. The lone pharmacy in a rural area has a de facto monopoly, and we feel that the potential of a dispensing physician in the area serves as a deterrent to abuse of this monopoly. If the potential for dispensing is removed, there would be nothing left to protect the patient from possible abuse by the pharmacy.

We are aware of the tremendous job of study and research which this committee and which the Committee an Antitrust and Monopoly and their staffs have devoted to the problem, and we wish to congratulate both committees on the job that has been done. We wish to reiterate our support for sections 4 and 6 of the proposed legislation, and we sincerely hope that the committee, and later Congress, will act favorably on these provisions of the bill.

We do hope, however, that our remarks regarding section 5 will be kept in mind when a final draft of the bill is prepared. Although we recognize that there are those who might disagree with our concern respecting section 5, we suggest that the bill without this section, or modified along the lines suggested by the AMA covers substantially most of the abuse that has been demonstrated in the field. We believe that section 5 should be eliminated, or modified, as suggested, and the bill should be passed in its present form. A period of time can then elapse, and we are certain that no great harm will result in the interim, while the impact of the bill on the general public, the dispensing physician and the pharmacist will be tested. If amendment be required, it can then be done on the basis of the achievements of this legislation and the possible shortcomings. Frankly we believe that the bill without section 5 will substantially cure the abuses that have been brought to the attention of the subcommittee, with great benefits to the public, and without any undue hardship to either the medical profession or to the profession of pharmacy.

Once again I urge the committee, as a Committee on Commerce, to remember that the relationship between a physician and patient is quite distinct from the relationship between a physician and a drug company or a physician and a pharmacy, and I ask you to consider section 5 in a different spirit from sections 4 and 6.

Thank you for permitting me to appear here today and for allowing me to present the views of the National Association of Mail Order Pharmaceutical Suppliers, Inc.

49-480-70- -6

Senator HART. Mr. Sandler, I am glad we had an opportunity to hear rather than read your testimony. Additionally, it will enable us to have some of those references that were not included in the testimony. In view of the meeting of the policy committee, which as scheduled for 12:30, I suggest that if it is agreeable with you, we direct such questions as we have to you in writing and you can then respond and the questions and answers will be a part of the record at this point.

Mr. SANDLER. I will be happy to do so sir.

Senator HART. Thank you.

We will adjourn to resume at 9:30 a.m. tomorrow. I thank everyone.

(Whereupon, at 12:40 p.m. the subcommittee was adjourned, to reconvene at 9:30 a.m., Wednesday, June 17, 1970.)

REGULATING TRADE IN DRUGS AND DEVICES

WEDNESDAY, JUNE 17, 1970

U.S. SENATE,

COMMITTEE ON COMMERCE,
CONSUMER SUBCOMMITTEE,

Washington, D.C.

The subcommittee met at 10 a.m. in room 5110, New Senate Office Building, Hon. Frank E. Moss (chairman of the subcommittee) presiding.

Present: Senators Moss and Pearson.

Senator Moss. The subcommittee will come to order.

We will continue with our hearings this morning on S. 1575, a bill to regulate trade in drugs and devices by prohibiting the dispensing of drugs or devices by medical practitioners and their participation in profits from the dispensing of such products, except under certain circumstances, and for other purposes.

We have several very interesting witnesses to appear before us this morning. Our first will be Dr. William Apple, who is the executive director of the American Pharmaceutical Association, and I understand you will have with you Mr. Sacks, Mr. Roberts, and Mr. Olson. Is that right?

Dr. APPLE. That is right, Mr. Chairman.

Senator Moss. I know Mr. Olson, of course. He is from Bountiful, Utah, and I am very glad to have been able to see him before the beginning of the meeting and I am happy that he is here.

I think, Dr. Apple, if you would identify these gentlemen as they are seated at the table, so our reporter will know them in the event we ask questions of any of these men.

STATEMENT OF DR. WILLIAM APPLE, EXECUTIVE DIRECTOR, AMERICAN PHARMACEUTICAL ASSOCIATION, WASHINGTON, D.C., ACCOMPANIED BY CARL ROBERTS, DIRECTOR, LEGAL DIVISION; PHILIP SACKS, VICE SPEAKER OF HOUSE OF DELEGATES; AND C. ALBERT OLSON, PRESIDENT, AMERICAN PHARMACEUTICAL ASSOCIATION ACADEMY OF THE GENERAL PRACTICE OF PHARMACY

Dr. APPLE. Thank you, Mr. Chairman. As you indicated, Mr. Olson, to my right, is the president of the APhA Academy of the General Practice of Pharmacy. Seated to his right is Mr. Philip Sacks, the vice speaker of our house of delegates, from Illinois, and to his right, Mr. Carl Roberts, director of our legal division.

Senator Moss. We welcome you all, gentlemen. Glad to have you with us.

Dr. APPLE. With your permission, Mr. Chairman, I would like to have Mr. Sacks present our testimony.

Senator Moss. Very good. You may proceed in that manner. We will hear from Mr. Sacks first.

Mr. SACKS. Thank you, Mr. Chairman.

As you know, the American Pharmaceutical Association is the national professional society of pharmacists in the United States. Its approximately 50.000 members are composed of practicing pharmacists, pharmaceutical educators, pharmaceutical scientists, and pharmacy students.

APhA's objective as a professional organization is the continual improvement of the pharmacy profession as a part of the Nation's health care services.

I am Philip Sacks of Chicago, Ill., vice speaker of the APhA House of Delegates. I am a practicing pharmacist, president of the Illinois Pharmaceutical Association, and member of the Illinois Board of Pharmacy. I am accompanied by Dr. William S. Apple, executive director of APhA, Mr. C. Albert Olson of Bountiful, Utah, president of the APhA Academy of the General Practice of Pharmacy, and Mr. Carl Roberts, director of the APhA Legal Division.

We are appearing again in support of legislation introduced by Senator Hart, Senator Magnuson, and you which is designed to rectify serious conditions in the delivery of health care which are harmful to consumers and a threat to both the professions of pharmacy and medicine. In fact, these conditions benefit only a small percentage of physicians throughout the country.

We refer, of course, to instances involving physician-owned pharmacies, physician-owned drug companies, and physicians who, for their own financial benefit, regularly dispense drugs to patients.

Since the first hearings on this subject in 1964 by the Senate Antitrust Subcommittee, there has been amassed a substantial and dramatic record of existing and potential abuses which are likely to occur when physicians are engaged in activities which would be prohibited by S. 1575.

In our previous testimony on S. 260, we have detailed pharmacy's total lack of success in attempting to resolve this problem on an interprofessional basis with the medical profession and its chief spokesman: the American Medical Association. We feel that members of the Commerce Committee should have the benefit of this background and we have appended excerpts from our 1967 testimony to this statement.

We have not come here today to rehash what is now documented history. Nothing has changed. Rather, our objective today is to place the problem in present-day context and to illustrate that, as time goes on without resolution of the problem, its effects become more widespread, more insidious, and a more potent threat to decrease the quality of health care received by the Nation's citizens and to increase the price paid for it.

It is hardly overstating the case when we tell you that this Nation is in the throes of a health-care crisis. Note that we are not saying the Nation faces a health-care crisis; we are saying that the crisis is upon us and is worsening.

Only a few years ago the Nation was concerned about the inability of many to pay for needed health care. Congress responded with the medicare and medicaid programs. Today, our citizens are concerned