There is probably no group of companies whose price gouging has been investigated more thoroughly by Congress than the drug industry. Starting with Senator Kefauver’s probe in the early sixties and continuing with Senator Nelson’s hearings over the past four years, the details of this most profitable industry have been laid bare publicly. Yet very little has changed.
Last month, Senator Edward Kennedy declared that his Health Subcommittee was going to open legislative hearings into drug pricing and marketing practices and the miseducation of physicians in the drug area. The influence of company advertising in the medical journals and the impact of company detail men on the prescribing habits of physicians will be exposed once again by prominent and learned witnesses.
Once again the facts will outrage the public. Why, for example, Senator Kennedy wants to know, do 1,000 tablets cost $4.95 if they are called meprobomate (a widely prescribed tranquilizer) and $6.21 if they are called Equanil? Why does it cost $16.70 for 100 tablets of Pentids, Squibbs brand of penicillin G, and only $2.41 for the same amount of unbranded penicillin G? Or, as Senator Nelson put it, “Now, why in the world would anyone be foolish enough to pay up to 30 times as much for a drug when sold under a trademarked name than under its scientific name?
The answers to these questions are known. They involve patent monopolies, massive brand name advertising to get physicians to prescribe the brand name, state laws inspired by the drug industry to prevent pharmacists from substituting the exact generic compounds which are much cheaper and inadequate use by the government of these facts.
The consequences are tragic and poignant. For years letters have been pouring into Senator Nelson’s office from exploited consumer-patients.An elderly person from Salt Lake City wrote: “My wife and I are over 65 and our costs for drugs over the past year was $400, which we really cannot afford.”
From Massillen, Ohio, a citizen writes: “We are retired and of course the cost of drugs is increasing materially every year. We wish also that something could be done about the doctors who invariably prescribe by a brand name when the generic name would make the cost considerably less.”
Well, something can be done by the government now, without waiting for Senator Kennedy’s legislation. First, the government has officially repudiated the drug industry’s myth that because a drug has a brand name, it is better than its exact generic equivalent. In March, Dr. Henry Simmons, then Director of the Food and Drug Administration’s (FDA) Bureau of Drugs, stated:
“Based on many years of experience with this program, we are confident there is no significant difference between so-called generic and brand name antibiotic products on the American market.”
And with reference to 19 other classes of drugs, he declared:
“On the basis of the data we have accrued to date, we cannot conclude there is a significant difference in quality between the generic and brand name products tested.”
These findings have not been widely publicized among the consuming public nor even among many physicians. As the nation’s largest buyer of drug products, the federal government has not put its knowledge to work.
Dr. Irene Till, an economist who worked with the Kefauver Committee and the Department of Health, Education and Welfare, estimates that about half of the government’s annual $1 1/2 billion drug bill could be saved by better purchasing practices and generic drug procurement.
If Senator Kennedy’s inquiry is going to be productive and if effective legislation is to be passed, the Health Subcommittee would do well to investigate why the federal government is doing so little with so much information and buying power leverage to save massive amounts for the taxpayer and consumer.