THE DRUG BILL DEBACLE

...on a fifteen-man committee Kefauver was never able to muster more than three votes in support of them, his own and those of Senators Philip A. Hart, Michigan Democrat, and John A. Carroll, Colorado Democrat...

...Eastland got up at once and look full responsibility for the meeting...

...Other major provisions of the bill were designed to improve drug quality by permitting more stringent regulation of drug plants and by giving the Food and Drug Administration (FDA) power to pass on the efficacy of drugs as well as on their safety...

...To Kefauver's expressed disappointment, however, the President did not support the patent provisions, which the Senator considered "the key to lower drug prices...

...In the Eastland letter he endorsed the Kefauver measure by saying it incorporated his major recommendations...

...It is no wonder then, that an industry which has a record of many notable accomplishments, discredits itself by adopting, possibly for the sake of its stockholders, the selling and promotional techniques that are used to push automobiles or soap...

...But these improvements are only relative...

...In Arrowsmith, when Dr...

...And the provisions assuring drug safety and efficacy have been watered down through a series of maneuvers that, according to Kefauver, smack of connivance among Congressional opponents of the bill, members of the drug manufacturing industry, and minor officials of the MARVIN CAPLAN, who reports on Congress for a group of national business interests, has covered the hearings and debates on the Kefauver drug bill...

...The guide prompted one prominent ophthalmologist to observe that if its recommendations were widely followed, "many eyes will be unnecessarily lost...

...Finally, the United States is the only major economic power that grants unqualified products patents on drugs...

...Kefauver, an Old Frontiersman on the New Frontier, came out wearily...

...But now the President called for tougher drug laws and the bill's chances seemed improved...

...Do you realize that they have—and many of them are poor widows and orphans—invested their Little All in our stock) and that we must keep faith...

...The industry's "detail men" who visit doctors to acquaint them with new drugs have a disquieting way of behaving like regular door-to-door canvassers, the hearings disclosed, often giving over-rosy accounts of their wares and occasionally misrepresenting...

...It was 10.5 per cent for all other manufacturing industries...

...Symposia at medical conventions have become a new way of promoting drugs...

...Yet eight per cent royalties—after a three-year monopoly—is hardly giving a drug away for the asking...

...There is evidence to suggest that while drug advertisements in medical journals are properly dignified, they are still enough like ordinary advertisements to fail sometimes to mention unpleasant "side effects...

...But in view of HEW's participation in the meeting, he said, the people had a right to know where the Administration stood...

...And we are in a capitalistic system, Doctor...

...He blamed the drug industry (whose attorneys, it turned out, were also at the meeting) and its "acolytes" whom he inferred were Senators Hruska and Dirksen, an inference to which they took indignant exception...

...Like a catalyst, the President's statements changed the whole aspect of drug legislation before Congress...

...On Monday, June 11, shortly after five, Kefauver arose on the floor of the Senate and in a characteristically matter-of-fact, almost inaudible voice began to deliver an angry speech...

...Kefauver proposed limiting this right to three years and requiring a manufacturer, for the next fourteen, to license all qualified applicants subject to royalties of up to eight per cent...

...I do not think the iron heel of the U. S. government should be placed on any company which wishes to manufacture drugs...

...I am but their Humble Servant...

...Now, who will undertake to spend his stockholders' money to create a medicine that will maybe have as many as 800 patients a year, and say, as soon as he makes it, we will let everybody use it because we do not want to make anybody suffer for lack of it...

...Any attempt to assess the reasons for what has happened to the drug bill must not stop with accusations of Administration weakness, or clever industry lobbying, or insufficient Congressional support...

...But the patent provisions brought them, as expected, in strong opposition to the hearings on the bill...

...Kefauver explained that he voted for the bill in Committee because that would permit him to lead a floor fight to restore key provisions to the measure...

...And there is considerable evidence to suggest that American dominance in drug research during the past twenty years results less from the patent system, which has been in existence since 1790, than to other factors, including large government expenditures for research during World War II and access to the files of German drug firms at the end of it...

...and to encourage doctors to prescribe by common names, by assuring them of drug purity, and by trying to simplify generic nomenclature...

...But we have our duty toward the stockholders...

...After amassing thirteen volumes of hearings, a majority of the Subcommittee concluded that drug prices were exorbitantly high and profits excessive...

...The bill was unanimously reported out...

...If this sounds severe, it must be remembered that even manufacturers concede that the practical life of a patent is four or five years, since by then a competitor has patented his modified version of a successful drug...

...And royalties of eight per cent are higher than those usually charged under drug licenses...

...The testimony on advertising and promotion techniques shows this with particular clarity...

...I. S. Ravdin, who treated former President Eisenhower during his ileitis attack, and including Dr...

...His articles have appeared in a number of publications, including The Atlantic, The New Republic, The Sewanee Review, I. F. Stone's Weekly, and The Crisis...

...In speeches defending the drug industry, Senator Hruska has attempted to portray the manufacturers as unworldly, dedicated scientists, so little versed in the arts of public relations that they were "sitting ducks" for Kefauver and his "inquisitors...

...Max Gottlieb refused to put his new anti-toxin on the market before he tested it another two or three years, Dawson Hunziker, head of the pharmaceutical laboratories that employed him declared, "My dear fellow, I quite sympathize...

...That was socialism, Eastland said, "and that should be opposed...

...As veteran fighters of monopoly, they adopted a more classic approach: They proposed to introduce competition into the drug industry...

...It may be that the HEW attorneys participated in the Eastland meeting simply out of eagerness to see some sort of drug bill come out of this session...

...I am helpless...

...In the unlikely event that a compromise is reached and a weakened drug bill is passed, consumers can expect some benefits...

...The patent provisions were struck from the measure...

...If we want some other system, that is something else, but we are under a capitalistic system...

...But McKesson is the first firm to be able to use a vast forty-nine-state distribution system to sell its product...

...If the doctor says aspirin I don't need to buy Bayer's aspirin," a Subcommittee staff member observed...

...But the parade of illustrious witnesses that appeared last winter under the banner of the Pharmaceutical Manufacturers Association was certainly not organized by novices...

...Still pending in the House Judiciary Committee is the Celler bill which remains close in form to the original Kefauver version...

...Surely a major factor is the ambivalent attitude in this country toward the drug industry, where we recognize its significant research contributions to public health and at the same time hesitate to discipline it in the public interest...

...The head of Eli Lilly 8c Company said his firm was not prepared to continue its large research expenditures if other manufacturers could share its discoveries "simply by asking...

...Within the next few weeks other changes were adopted, some good but most of them disabling, reducing the bill, said Kefauver, to "a mere shadow...

...It would appear, then, that perhaps a somewhat greater competition can be put back into the drug industry...

...As it now stands in the Senate, the provisions Senator Kefauver considers essential to insure lower prices have been stripped from the bill...

...Here is the Schering Corporation, for instance, sending doctors a "Concise Guide to Eye Disorders" as another firm might issue a souvenir calendar or road map...

...Eastland claimed a high HEW official, whom he refused to name, had told him the agency favored at least one important change...

...All the opponents of the drug bill are not so blunt, and often Senator Hruska himself is not...

...And Kefauver succeeded, finally, in getting the committee to extend Federal batch certification control to all antibiotics intended for human use instead of limiting control, as now, to five...

...The next morning the Committee met in executive session and adopted six of the amendments...

...The more companies there are making a drug, it was reasoned, the cheaper it was bound to be...

...The brightest ray of hope at the Kefauver hearings came from a witness who frankly recognizes that the drug business in America is a business like any other and that there is usually a market for a competitive product...

...Herman Nolen, president of McKesson & Robbins, Inc., the country's largest distributor of drug products, testified that in response to popular demand, the company is manufacturing a line of generic name drugs that, according to figures placed in evidence, are in almost every instance substantially cheaper than their trade name equivalents...

...In presenting a bill they hoped would bring drug prices down, both Kefauver and Representative Emanuel Celler, New York Democrat, who introduced the measure on the House side, explicitly rejected price controls...

...Exaggerated and obvious as that sounds, it is hard not to hear an echo of Hunziker almost forty years later during a hearing on the Kefauver drug bill when Senator Roman Hrus-ka, Nebraska Republican, exclaimed to a witness who questioned if profit was the only incentive in medical research: "Not everybody is possessed of that goodness and that light and [that] generosity with the stockholders' money...

...In the Consumers' Message he sent to Congress March 15, and in a letter to Eastland in April, the President urged new legislation to provide consumers with "better, safer, and less expensive drugs...

...their ability to spend enormous sums for promotion and advertising...

...To Kefauver's pleased surprise, the drug manufacturers endorsed in principle most of the provisions for strengthening the FDA's powers...

...He had not invited Kefauver, who had worked so long and hard on the bill and whose baby it was, because, he said, he knew that "would be a futile act...

...According to a report by the Federal Trade Commission and the Securities and Exchange Commission quoted by the Subcommittee, the profit rate for the drug industry in 1959, after taxes and all expenses including research, was 18.1 per cent...

...The Drug Bill Debacle by MARVIN CAPLAN F>erhaps only Sinclair Lewis could convey the atmosphere of the Kefauver drug hearings and the campaign in which the legislation they inspired has been hacked to pieces...

...They end up, instead, proposing measures that make the customary Congressional obeisance to competition and free enterprise...

...A secret meeting had been held over the weekend, he charged, between representatives of HEW and staff members of the Committee representing Senators Eastland, Hruska, and Everett McKinley Dirksen, and an agreement had been reached not only to eliminate the remaining patent provisions but also to "water down virtually every remaining feature of the bill...

...Fourteen winners of the Nobel Prize in medicine joined in a statement that expressed no views on the legal and commercial aspects of the U. S. drug industry but hailed the contributions of its laboratories as "necessary and irreplaceable...

...But even when the more reasoned arguments against the theory of the bill are sifted, the irreducible element at bottom always seems to be dollars—not people...

...He made it clear he thought he had had Administration support...

...And it is to them consumers with big medicine bills may have to turn—as the drug companies like to say—for faster relief...

...And when selling and distribution and other costs are added in, profits are still fat...

...Proprietary medicines were not included...

...A group of forty prominent physicians headed by Dr...

...Even Kefauver and Celler, when it comes to deciding what to do about drug prices, stop short of drastic remedies...

...Some of the testimony even sounds as if Lewis wrote it...

...The study was limited to drug manufacturers...

...Personally I should like nothing so much as to spend my whole life in just producing one priceless scientific discovery, without consideration of mere profit...

...And to complicate things further, following the President's Consumers' Message, Representative Oren Harris, Arkansas Democrat, introduced two bills embodying Administration proposals to tighten food, drug, and cosmetic laws...

...The emphasis was no longer on prices but on safety and effectiveness...

...As introduced full strength last year by Senator Estes Kefauver, the complex measure was designed to give consumers cheaper and safer drugs...

...But as soon as it came before the full Judiciary Committee and its chairman, Senator James O. Eastland, Mississippi Democrat, it ran into trouble...

...Paul Dudley White, the celebrated heart specialist, submitted a statement saying "the restrictions envisaged by this bill are detrimental to the development of new agents and thus to the health of our people...

...The Committee now prepared to consider the FDA provisions...

...During the June 11 debate Kefauver said he had called HEW and had been told that no one there knew two HEW attorneys were working on the emasculating amendments...

...The Kefauver Subcommittee reported the drug bill out with few changes and the patent provisions virtually intact...

...The company's high reputation may also persuade doctors to prescribe its generic line...

...In no other industry does there seem to be such a blurring of advertising, public relations, and overawed consideration by the paying public...

...As Mr...

...The hearings on the drug bill are full of instances that demonstrate this confusion between public service and private gain...

...One of the twelve amendments was an improvement on the original bill: it would require drug firms to keep records on their experiences with new drugs...

...He mainly objected to the proposal in the bill to have FDA license drug manufacturers...

...Eugene Rostow, dean of Yale Law School, and Dr...

...Plant inspection for prescription drugs has been strengthened, although Kefauver still considers it insufficient...

...Backgrounders" on new drugs, prepared by the industry's top advertising agencies, find their way unchanged, and free of charge, into newspaper editorials and health columns and into presumably factual articles for major magazines...

...They overlap the Celler bill, and the jurisdictional tangle strongly suggests there will be no drug bill this term...

...for one thing, they presented a less serious pricing problem...

...His speech provoked a hectic floor debate in which men spoke intem-perately...

...But his staff insists it was simply a matter of not being able to undertake a broader investigation...

...Small drug firms have produced generic lines for years...

...The drug bill, or the Drug Industry Anti-trust Act, as it was officially titled, was the result of a two-year investigation by Kefauver's Anti-trust and Monopoly Subcommittee into the prices of prescription drugs...

...Countries that forbid patents on drugs do so, the Subcommittee report noted, because they feel no one should make monopoly profits on products that often mean the difference between life and death...

...But companies like McKesson & Rob-bins can, because it makes sense financially...

...Then the dismemberment of the drug bill began in earnest...

...Philosophically they are opposed to them...

...It is difficult to say...

...to make money for them...

...Manufacturers now get an exclusive seventeen-year right to make every drug they patent...

...And when the industry was confronted with an emergency, like the Kefauver drug bill, it appears they were mobilized into a potent 15,000 man force to lobby against it...

...Department of Health, Education and Welfare...

...One of the bill's disabilities, besides its controversial nature, was that it was not an Administration measure, although it drew fairly strong support from HEW and the Justice Department...

...An arthritic patient, Kefauver has pointed out, will often pay $30 a month for 100 tablets of a brand name drug that cost his druggist $10 to buy and the company $1.50 to make...

...Vannevar Bush, then chairman of the board of Merck &; Company, led the opponents of the proposed patent law changes...

...Kefauver's critics say he did not look into drug retailing because he did not want to antagonize powerful retail druggists in Tennessee...

...A Congress obsessed with the bogies of socialism and government interference—even if the latter is designed to foster competition and strengthen free enterprise—hardly seems to be the agency to do the job...

...The Subcommittee's report traced high prices and profits to tight control of the market by a few major companies whose power, it said, was based on three things: their patent and license monopolies...

...and their success in persuading doctors to prescribe by their trade names rather than by generic or common names...

...The substance of the manufacturers' testimony was that the bill would wreck private research by removing the powerful incentive of patent rights...

...Kennedy and Secretary Ribicoff have both pointed out, giving FDA power to pass on the effectiveness of prescription drugs will only extend to men, women, and children the kind of protection against worthless serums that hogs, sheep, and cattle have had since 1913...

...At the moment the attack on the bill appears successful...

...The key provisions of the bill were those aimed at the patent monopolies...

...Merck, Sharp and Dohme, to the joy of its ad men, gets a "shoehorn"—a brief reference to a drug it is working on into the heel of a Readers' Digest article by Paul De Kruif, who, incidentally, was Lewis's technical collaborator for Arrowsmith...

...To what extent was the destruction of the Kefauver drug bill an Administration "sellout...

...Two examples out of hundreds may give some idea of just how high prices and profits are...

...The mas-sacree (sic) of a good bill is continuing," he told reporters...

...However, when HEW Secretary Abraham Ribicoff came before the House Interstate Commerce Committee a week later to testify in support of the Harris bills, he said his agency was unhappy with the twelve amendments to the Kefauver bill and (in direct contradiction to Eastland) that they did not meet the President's recommendations...

...Kefauver's comment on the Administration is, "I must say they haven't done much to help me— or as much as I think they should...