provided in the retail drug stores of this country. We like to think the Medicaid drug program is the outstanding government drug program which demonstrates daily what can be accomplished by a government-free enterprise partnership. NARD has many times complimented the Medicaid drug program because it has not sought to encourage physician dispensing, drug stations in institutions, mail order prescriptions, and government drug dispensaries. The wording of section 12 (a) of Interim Policy No. 19 is objectionable to NARD for many reasons. The wording is ambiguous in that it would be impossible for a state to set standards for compliance with the proposed new policy. We certainly hope that No. 19 is not intended for the purpose of paying physicians a double fee: one for physicians' services and another for dispensing drugs. It is well known that there is a critical shortage of physicians in the United States, and it would seem to be against public policy for the Department of Health, Éducation and Welfare to enunciate a policy statement that would either drain physician services into the area of drug dispensing or encourage receptionists, secretaries, and other unqualified personnel in physicians' offices to dispense highly dangerous drugs for Mediciaid recipients in violation of numerous state and Federal laws. It is also known that some pharmaceutical manufacturers charge physicians notoriously low prices in contrast with what they charge retail drug stores, but 12(a) is not related to any other SRS criteria for reimbursement of physicians. Continuing efforts to eliminate such price discrimination practices and unfair competition will obviously be more difficult if Interim Policy No. 19 is finalized. Is it the intention of SRS to make Federal financial participation "available" to all physicians in the "Medical Practice Act" states? Would it not be a reasonable requirement for such a physician to make a showing to his Medical Society, make application to the state board of pharmacy, and to the single state agency explaining why his drug dispensing activities are in the public interest and in the interest of the Medicaid program? Failing this and other requirements in Interim Policy No. 19, we are assured of protracted hearings on Federal legislation directed to the subject issue. If Congress intended that physicians be reimbursed for drug dispensing under government medical programs, as will be possible under Interim Policy No. 19, it is respectfully submitted that the Medicare law would never have been so restrictive as to limit physicians to claims for only those drugs that cannot be self-administered. In brief, here are some of the reasons set forth by Mr. Willard B. Simmons, NARD Executive Secretary, to the National Health Conference on Medical Costs, June 28, 1967, explaining why NARD strongly opposes physician dispensing: There is no supporting evidence that dispensing physicians provide drugs to patients as cheaply as do drugstores. (An increase in physician dispensing might well raise costs of drugs the government provides under Title XIX.) There is considerable evidence that the quality of pharmaceutical service in the retail pharmacies is superior to that found in the offices of dispensing physicians. Some of the improper practices associated with physician dispensing are: patients denied freedom to purchase drugs in retail pharmacies of their choice; poor record keeping of drugs dispensed and on number of refills; use of inadequate containers such as paper envelopes which may bring about rapid drug deterioration; inadequate and improper labeling; dispensing of samples representing several different lot numbers mixed, making checks during a drug recall meaningless; patient denied copy of prescriptions; and state and federal drug laws not complied with regarding record keeping. Dispensing physicians are less likely to discontinue prescribing an obsolete drug until their personal supply is exhausted. Dispensing of drugs may be done illegally by clerks and receptionists. It is our sincere belief that it is in the public interest to continue in effect, as it has successfully operated for over two years, the requirements of D5150, which limits physician dispensing to areas where no adequate pharmacy services are available. We strongly urge that the conflicting language of section 12(a) of Interim Policy No. 19 be rescinded. It is inconceivable that 12(a) would be published with such openended wording that provides no prohibitions, no standards, tests or criteria for states to use as yardsticks for measuring practices and unbridled dispensing by physicians in terms of public good. From our discussions with many state welfare officials, we are confident a large majority of them share NARD's views that Interim Policy No. 19, section 12(a), respecting reimbursement of physicians for drug dispensing will complicate effec tive administration of the program and will unnecessarily precipitate discord among program administrators, physicians and pharmacists in states where joint efforts are now harmoniously dedicated to bringing high quality and economical pharmaceutical services to Medicaid recipients. Several state administrators have stated forthrightly that they are simply not going to pay physicians to dispenseunder state Medicaid programs. We assure you of NARD's continuing interest in Title XIX drug programs. We will be glad to discuss further this matter with SRS representatives at their convenience. Sincerely yours, /s/ WILLIAM E. WOODS, Washington Representative. Excerpted from Interim Policy No. 19, which appeared in the Federal Register, Volume 33, Number 216, Tuesday, November 5, 1968. DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE Social and Rehabilitation Service AMOUNT, DURATION, AND SCOPE OF MEDICAL ASSISTANCE Notice of Interim Policies and Requirements Notice is hereby given that the regulations set forth below (made pursuant to section 1102 of the Social Security Act, 42 U.S.C. 1302) prescribe certain interim policies and requirements for Social and Rehabilitation service programs which were approved, with binding effect on States, on August 15, 1968, by the Administrator, Social and Rehabilitation Service. Interested persons who wish to submit comments, suggestions, or objections pertaining thereto may present their views in writing to the Administrator, Social and Rehabilitation Service, Department of Health, Education, and Welfare, 330 Independence Avenue SW, Washington, D.C. 20201, within a period of 30 days from the date of publication of these interim policies and requirements in the FEDERAL FEGISTER. The final regulations will be codified in Title 45 of the Code of Federal Regulations. Dated: August 15, 1968. [SEAL] Approved: October 25, 1968. MARY E. SWITZER, Administrator, Social and Rehabilitation Service. WILBUR J. COHEN, Secretary. (12) Prescribed drugs, dentures, and prosthetic devices; and eyeglassesprescribed by a physician skilled in diseases of the eye or by an optometrist, whichever the individual may select. (a) "Prescribed drugs" are any simple or compounded substance or mixture of substances prescribed as such or in other acceptable dosage forms for the cure, mitigation, or prevention of disease, or for health maintenance, by a physician or other licensed practitioner of the healing arts within the scope of his professional practice as defined and limited by Federal and State law. With respect to "prescribed drugs," Federal financial participation is available in expenditures for drugs dispensed by licensed pharmacists and licensed authorized practitioners in accordance with the State Medical Practice Act. When dispensing the practitioner must do so on his written prescription and maintain records thereof. (Italics added by NARD) Mr. Woods. It should be noted that our investigations show that medicaid payments are being made to physicians in States not located in the Midwest which it was originally claimed were the only States having State medical licensure acts authorize physician dispensing. There have been some expressions from HEW that they would only allow dispensing physicians cost or cost plus 3 percent when they submit reimbursement claims for medicaid prescriptions. Our best information is that dispensing physicians are not willing to accept. only their cost. This was made clear in a legislative fight on this issue in the Indiana Legislature last year, according to reports we have received. NARD has filed further complaints with former HEW Secretary Finch and the correspondence between NARD Secretary Willard B. Simmons and Secretary Finch is offered for the record. The reply bases the HEW policy on State medical practice acts. Secretary Finch stated "where the medical practice act permits a physician to dispense, I consider this to be overriding. This applies to private patients as well as those in public assistance.' (The letters follow:) THE NATIONAL ASSOCIATION OF RETAIL Druggists, Hon. ROBERT H. FINCH, DEAR MR. SECRETARY: During the last two years representatives of The National Association of Retail Druggists have had numerous conferences and correspondence exchanges with representatives of HEW, SRS and MSA concerning the matter of HEW authorizing the use of federal funds for the states to pay physicians who dispense drugs in their offices for Title XIX Medicaid patients. It is our understanding that HEW is currently considering the issuance of guidelines that will authorize and further encourate physician dispensing by use of federal funds. The National Association of Retail Druggists strongly opposes physician dispensing and the use of federal funds to encourage such unnecessary and ill advised physician activity. The many evils that flow from the practices of dispensing physicians are well known throughout the land. The State of California led the way prior to Medicaid in prohibiting physician dispensing and drug store ownership. It is the purpose of this letter to reiterate our strong opposition to the revision of Medicaid regulations and to proposed guidelines that encourage physician dispensing. We are prepared to document our objections and to emphasize that physician dispensing is not in the best interest of the public health or consistent with a high quality program for the delivery of medical care. We are confident the two professions of medicine and pharmacy are making significant contributions daily to insure better health care for all Americans, but we do not believe that Medicaid funds should be used to encourage and finance the highly questionable practice of physician dispensing. We would appreciate your consideration of this matter and we assure you of NARD's continuing interest in Title XIX Medicaid drug program. Sincerely, WILLARD B. SIMMONS, P.S. It was a pleasure to have had the occasion to meet you at the dinner in honor of Dr. Fishbein and I hope to see you again in the near future. THE SECRETARY OF HEALTH, EDUCATION, AND WELFARE, Mr. WILLARD B. SIMMONS, Washington, D.C., October 15, 1969. Executive Secretary, National Association of Retail Druggists, DEAR MR. SIMMONS: Thank you for your letter of August 21, 1969, concerning the Department's authorization of Federal funds to States to pay physicians who dispense drugs in their offices for title XIX Medicaid patients. I can well appreciate your concern about the reimbursement of physicians who dispense drugs to title XIX Medicaid patients. However, the policy statement is predicated on non-interference with a State's medical practice act. Where the medical practice act permits a physician to dispense, I consider this to be overriding. This applies to private patients as well as those in public assistance. The greatest number of prescriptions are dispensed by retail druggists, and we are confident that most physicians will continue to prescribe for medications to be dispensed by pharmacists. You may be sure that HEW guidelines are not intended to encourage additional physician dispensing. Our basic policy was issued so that Federal regulations would not be more limiting than existing State medical practice acts. Your continued interest in the title XIX Medicaid drug program is appreciated. I was pleased to have met you at Dr. Fishbein's dinner. Sincerely, ROBERT H. FINCH, Secretary. Mr. Woods. For the many reasons set forth in our statement today in opposition to physician dispensing we are opposed to this medicaid regulation. Also we doubt seriously that payments are now being denied physicians in any State regardless of the wording of the State medical practice acts. While some States are prohibiting payments to dispensing physicians, other States seem to be making Federal funds available to physicians for drugs dispensed even though the State medical practice act is silent on the point which has so impressed the AMA and HEW. Again, passage of S. 1575 would prohibit further use of the taxpayers money to provide another bonanza for dispensing physicians. It would also protect the medicaid patients from the many abuses which can arise from physician dispensing. In conclusion Mr. Chairman, we support S. 1575 because we know it is legislation that will provide much public health protection for the consumer who deserves freedom of choice in purchasing all of his health needs. It will contribute significantly to reducing medical care costs, prevent abuse of Federal expenditures, and enable our members as professionals operating small businesses to compete fairly and effectively in the American system of free enterprise. All previous attempts at the conference table and in the State legislatures have been totally unproductive in curtailing the evils which are the subject of S. 1575. We appreciate this opportunity to appear before you on behalf of the members of the National Association of Retail Druggists. Mr. WOODS. Mr. Chairman, Mr. Winton from California has a brief statement that he would like to make available for the record and would be glad to take questions in any manner that you would like to handle them, sir. Senator HART. Thank you, Mr. Woods. The statement from Mr. Winton will be printed in the record. (The statement referred to follows:) STATEMENT OF J. MARTIN WINTON Gentlemen: My name is J. Martin Winton. I am the founder of the Vista Pharmacy, 4233 East Tulare Street, Fresno, California 93702, and I have been practicing retail pharmacy continuously at the above address since September 9, 1932. During this period I have also had the privilege of serving as the President of the California State Pharmaceutical Association, President of the California State Pharmaceutical Institute (the Legislative Organization in California for Organized Pharmacy), and as President of the California State Board of Pharmacy. Winton's Vista Pharmacy now has on file in excess of one million two hundred and sixty thousand physicians' prescriptions. Physician-ownership of retail pharmacies has never been a problem within the Fresno, California trading area, except with those dispensing physicians involved with weight-reducing mills and the sale of amphetamine and other dangerous drugs. The California State Board of Medical Examiners has been reluctant to move against such licensees even though California State Board of Pharmacy employees have, on many occasions, brought the problem of the sale of such commodities by licensed California Physicians to both the President of the Board of Medical Examiners and to their Secretary. As a Member of the California State Board of Pharmacy at the time the Code of Professional Conduct on Commissions, Gratuities and Rebates was established, it was my responsibility to sit as a Board Member throughout the hearings. When the burden of proof was against ONLY the pharmacist, and the person licensed under Division 2 of the Business and Professions Code could not be held accountable under the regulation, the need for Section 4050.5 became apparent. The California Physician-Ownership Bill, limiting the medical practitioner from having a license to own a pharmacy, has failed to restrict the corporate practice of pharmacy in California. Requiring licensed physicians' names to appear on the permit, to be posted in a conspicuous place, has been some help in regulating Pharmacy Ownership. Having taken part in the California Hearings, read the Committee Reports, and being aware of the testimony you are to receive today, may I submit the above information to your Committee Members, and be available at any time to answer questions on the subject of the evils of the ownership of community and hospital pharmacies by the prescriber of medical drug products. Sincerely J. MARTIN WINTON, J. MARTIN WINTON. CALIFORNIA PHARMACEUTICAL ASSOCIATION, Sacramento, Calif., June 10, 1970. DEAR MARTIN: In response to your inquiry concerning the Hart Bill, SB 1575 I wish to advise that the California Pharmaceutical Association is on record in support of this important legislation. Attached is a copy of a Resolution adopted at our recent Annual Meeting re-affirming the position of the Association. We sincerely believe that the passage of SB 1575 is necessary if the interest of the citizens of this country is to be protected. The intent of the Holmes Act in California is being circumvented by greedy physicians wishing to profit from the medications required as a result of their diagnosis as well as for their usual physician services. In recent testimony presented before the Assembly Health & Welfare Committee, much concern was expressed regarding the incidence of dispensing amphetamines and other dangerous drugs. These problems occur when the physician can profit from the sale of medications which he prescribes. The California Pharmaceutical Association urges the passage of SB 1575. EDWARD ALSTROM, President, California Pharmaceutical Association. COPY OF RESOLUTION REFERRED TO IN ABOVE LETTER June 6, 1970. Be It Resolved, That the California Pharmaceutical Association continue support of SB 1575 (Hart Bill) and urge local associations to also lend their support. NORTHERN CALIFORNIA PHARMACEUTICAL ASSOCIATION, Mr. MARTIN WINTON, San Francisco, Calif., June 8, 1970. DEAR MARTIN: This letter to you is to confirm the strong position taken by the members and the Executive Board in support of Senator Hart's S-1575, Trade and Drug Act, and Congressman Corman's bill on the same subject; the dispensing of medication for payment by a Physician or other prescriber, to his patients. The evils attendant on this practice were even recognized as long ago as 1240 AD when by the Imperial decree of Frederick II of Sicily, Pharmacy and Medicine were separated as two distinct health disciplines, each rendering their unique service toward a healthier life for the public. |