Legislation & Regulation

To Keep Drugs Cost-Effective. Industry Told to Look at Compliance

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rugs will continue to be the most cost-effective form of therapy, " observed APhA President John F . Schlegel, pointing out that "in their wisdom, drug manufacturers have begun to do the studies necessary to demonstrate this cost-effectiveness." But he also observed that "industry will have to take more of an interest in the problem of noncompliance, because they know they're vulnerable to criticisms that the cost-effectiveness of drugs tends to disappear if people aren't taking their drugs. So we've got to get health care professionals intervening to a far greater extent. We in pharmacy feel there's a tremendous role to fill at the pharmacy int erface to increase compliance. " Schlegel spoke as a commentator at the "Labeling and Marketing Issues" session of the 9th Annual Educational Conference of the Food and Drug Law Institute, held December 10-11. Joseph Onek, an attorney with the firm of Onek, Klein & Farr, had prompted Schlegel's remarks in his own talk on the impact of new health care deli very systems on the drug industry. The growing movement toward different species of competing group practices, he said, will no doubt benefit the drug industry, "since their efforts to decrease hospitalization forces reliance on other therapies, which are often highly drug oriented." However, he stressed that such advantages will accrue only in the short run, because continued pressures to cut costs will compel the managers of group practices to make bulk drug purchases themselvesthe system will no longer revolve around the individual decisions of physicians and patients. Some drug therapies, Onek suggests, may simply fall by the wayside as cost-inefficient, the way performing massive numbers of tonsillectomies did a II

generation ago. He speculates that a typical candidate for a new type of cost-benefit analysis might be drug therapy for mild hypertension. Taking a long look at the probable outcome for legislation related to drugs and pharmacy, Eugene Pfeiffer, an attorney with the firm of Burditt, Bowles, and Radzius, Ltd., asserted that "Congress doesn't have the stomach to take on the Robinson-Patman Act-no one wants to be seen bashing a charity," even though he admitted that it is weaknesses in Robinson-Patman which foster the price differentials that allow diversion to fluorish. Pfeiffer also believes that physician samples contribute to the diversion dilemma, but claims they are "only a trickle in the diversion wave." Still, he thinks that sampling is a lot more amenable to new legislation aimed at controlling it than are the abuses of the Robinson-Patman Act. The whole domain of nonprescription drug regulation seems to be somewhat becalmed these days, noted Robert Anderson, vice president and counsel, Richardson-Vicks, Inc. But he discerns some subtler, but potentially more powerful trends that are still at work. First of all, now that the OTC monograph process is nearly at an end, Anderson sees an old issue becoming a reality: "How, since all manufacturers are using the same monographs, can one product maker find a way to differentiate his product, and still comply with the Holy Trinity-FDA, FTC, and the TV networks?" Taking the marketing of nonprescription ibuprofen as a test case (FDA placed certain limits on what advertisers of these products could say), things might not look so bad. Good copywriters still found ways of making special claims for products. Yet those producers who want to retain the prerogative of making spe-

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cial claims may increasingly choose to go a particular route-filing of an NDA, "in order to achieve regulatory endorsement of product distinctions." Meanwhile, says Anderson, the OTC monographs will become doomed to obsolescence, as time and science go by around them. In additional responses to the presentations, Schlegel observed that Onek had talked about the rapid increase in health care spending that persisted up until the last two years, when a leveling off in expenditures began, but had failed to note that drug prices have followed an opposite pattern. "We saw relatively stable prices for drugs-at least prescription drugs-for many, many years. Then in the last few years, we saw an upswing that came very, very rapidly. So we've got two lines going in divergent directions, and I think that people in the industry might want to reflect on that a bit." Schlegel also observed that, to many pharmacists, the sampling problem is hardly a minor aspect in diversion. However, he said that "we are the organization that instead of just saying we should ban sampling, says 'What can we do to preserve the good aspects of sampling?,' and still do away with the uncontrolled abuse of samples. So in place of this, we propose an alternativethe Trial Prescription Order, which would work something like a coupon." "I don't think we can reasonably expect Congress to take on the charitable organizations," Schlegel added, ''but I do think there are some flagrant abuses to the Act that Congress can act against by narrowing the confines of the Act so that it only pertains to truly charitable organizations, and not to those that are considered nonprofit just becaus,e that's the way they do business." ®

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HCFA's PhlP Proposal: APhA Survey and Response

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hen APhA was asked by the U.S. Department of Health and Human Services' Health Care Financing Administration to comment on its proposed new methodology for reimbursement for Medicaid prescription drugs, the Association responded quickly. One element in this response was a twophase survey of operating pharmacies: the first part asked for opinions of the Pharmacists' Incentive Program (PhIP) , and the second evaluated the impact of PhIP, in dollars and cents. The overall conclusion of the APhA study was that the PhIP provides reimbursement rates slightly higher than present Medicaid reimbursement levels, but that these rates do not provide satisfactory total-prescription reimbursement. This is because PhIP focuses solely on drug cost, but ignores the question of the dispensing fee. How PhlP Would Work

Under PhIP, pharmacies would be encouraged to dispense their least costly generic equivalent, for any multi-source drugs that has at least three FDA-determined therapeutically equivalent generic alternative. There are 59 such drug entities. For these, 120 so-called "generic floors" have been calculated for each dosage form and strength, based on 150% of the average wholesale price (AWP) of the least costly generic equivalent drug, in quantities oflOO, found in the latest Red Book. Incentives can range from $1.50-$4.00, while any difference is actual drug cost and the generic floor would have to be absorbed by the pharmacy. What did pharmacists think about the equity and feasibility of PhIP? To find out, APhA queried 20 pharmacies. Here's the gist of what they told the Association about the proposed program. Preliminary Opinion Survey

Pharmacists said that PhIP, in terms of fundamental equity, would

be more fair than MACIEAC. However, many respondents added that this would only be so if state Medicaid agencies administered the program as proposed. The strength of PhIP most frequently mentioned related to the fact that it would provide more return on product cost than MACIEAC. Pharmacists also noted that PhIP puts cost containment pressures on drug manufacturers, rather than on pharmacists. But the single most significant weakness of PhIP, respondents felt, was that it addresses only product cost, and not the dispensing fee. Others observed that the program fails to include a mechanism for timely updates of the generic floors, to take account of manufacturers' price increases. All of the respondents felt that PhlP contained sufficient economic incentive to prompt pharmacists to use more generic drugs, and felt that getting the generic drugs at the proposed rate wouldn't present a problem. Before the plan could be really acceptable, though, to the responding pharmacists, it would first have to be tied to an adequate dispensing fee. Furthermore, HCFA must define what it means by the term "reasonable" dispensing fee. In spite of its deficiencies, however, the pharmacists surveyed all believe that the Association ought to support the program, but that such support must be contingent on HCFA acceptance of proposed modifications. Impact Evaluation

Two hundred randomly selected pharmacies were queried as to the probable economic consequences of implementing the PhIP. This is what they said. 1. More than two-thirds of all prescriptions dispensed were paid for by private-pay patients; 21.8% were reimbursed through Medicaid; 10.6% were paid for by other pri-

vate-party insurers. State Medicaid dispensing fees ranged from $2.67$4.67 (average, $3.47). 2. To compare HCFA lowest-cost generic AWP figures with responding pharmacists' mean lowest actual net costs (ANC), 10 prescription drugs were chosen from the list of 59 developed by HCFA. For a majority (six) of the prescription drugs, the pharmacies' mean lowest ANC were markedly higher than the HCFA lowest-cost generic AWP; there were no differences in cost for three of the 10; and only one drug showed the pharmacies' ANC significantly lower than HCFA'sAWP. 3. HCFA's generic floors were compared with responding pharmacists' mean lowest ANCs. Generic floors were calculated by adding 50% to HCFA's lowest-cost (minimum addition, $1.50; maximum, $4.00). For all 10 prescription drugs analyzed, the HCFA generic floors were higher than the pharmacies' mean lowest ANCs. So pharmacies are able to purchase generic drugs at rates below HCFA's generic floors. But there was a hitch. The apparent intent of PhIP is to give pharmacies the chance to receive a 50% markup on drug costs in Medicaid. And indeed, for the 10 study drugs, pharmacies surveyed would receive an average of$1.65 per prescription above their ANC. However, when differences between drug costs (PhIP vs. actual ANC) were weighted according to each drug's share of the total prescription market, the average difference fell to $1.19-only 32.1%. 4. HCFA generic floors were higher than present Medicaid reimbursement rates for five of the study drugs; conversely, two drugs had higher present Medicaid reimbursement rates that proposed generic floors. When differences between Medicaid rates and generic floors for all 10 drugs are once again weighted according to drug market share, PhIP . would provide only a 7¢-per-prescrip- . tion increase over current Medicaid i reimbursement. ® The complete report will be published in the March issue of American Pharmacy.

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American Pharmacy Vol. NS26, No.2, February 1986/Sf

No Anticholinergics Found Effective in OTC Final Monograph lthough the Food and Drug Administration has found that A atropine sulfate and belladonna alkaloids, used as nonprescription anticholinergics, are "probably safe," FDA says there aren't enough data to categorize these ingredients as effective. The agency recently issued the final monograph for nonprescription anticholinergic drug products, and determined that none of the anticholinergic ingredients warranted Category I status. For this reason, atropine sulfate (marketed in 0.2-0.3 mg dosages) and belladonna alkaloids, which contain both atropine and scopalamine (marketed in 0.2-mg dosage), when promoted as anticholinergics, will have to be considered new drugs. To continue marketing these agents, a manufacturer must first gain an approved New Drug Application. According to FDA, one firm has already expressed an interest in testing anticholinergics, and has submitted a draft study protocol for FDA review. On the same day, FDA also issued a tentative final monograph

which stated that both quinine sulfate and vitamin E are Category III as treatments or preventives for nocturnal leg cramps. In the monograph, FDA had chosen to concur with the opinions of the Internal Analgesics Panel, agreeing that "until controlled studies show that a quinine dose of not more than 325 mg daily is safe and useful for relief [or prevention] of nocturnal leg cramps, the drug should not be generally recognized as safe and effective for this use." Schering recently introduced a nonprescription muscle relaxant, Legatrin, which includes quinine sulfate. The company says that it will "shortly" submit to FDA new data substantiating the efficacy of quinine. FDA had some critical questions about quinine use, however. The agency asked: "(1) Is quinine effective in treating and/or preventing nocturnal leg muscle cramps in low daily doses (e.g., 200-325 mg) over short periods of time (e.g., seven days or less) (2) If short-term quinine treatment with low doses is not significantly effective in reducing re-

current episodes of nocturnal leg muscle cramps, must such medication be taken over extended periods of time to obtain pain relief? (3) What are the adverse effects experienced by subjects exposed to effective doses of quinine over an effective course of therapy?" FDA suggested a warning for products with quinine, which reads, "Discontinue if ringing in the ears, deafness, skin rash, or visual disturbances occur. Do not take if pregnant, sensitive to quinine, or under 12 years of age." Quinine's more serious side effects include induction of abortion and rare cases of autoimmune thrombocytic purpura and hemolytic anemia. Also relegated by FDA to Category II status was vitamin E (this had not previously been reviewed by the Miscellaneous Internal panel). The agency found that none of the papers submitted "contained controlled studies to show the efficacy of vitamin E in the treatment of nocturnal leg cramps." There was also one paper that raised some questions about the safe dose of vitaminE. All other nonprescription ingredients indicated for nocturnal leg cramps were classified by FDA as Category II. ®

FDA Proposes Mandatory Labeling for Sulfite-Containing Drugs n the November 19 issue of the IDrug Federal Register, the Food and Administration proposed that prescription drugs containing sulfites bear warning labels. The labeling would include the specific sulfite included in the formulation and advise that mild to life-threatening reactions may ensue in some sensitive people. At present, says FDA, sulfites are ingredients in more than 1,100 prescription drugs. However, most of these are IV solutions of antibiotics and local anesthetics; relatively few are oral products. The agency says that it has received more than 500

reports of possible sulfite sensitivity reactions, including 13 deaths, but these were mainly due to using sulfites as preservatives in fresh foods. In contrast, there have only been 14 reports of reactions from prescription drugs, and none from nonprescription drugs. (For this reason, no action has been suggested for nonprescription items.) In one case report, an adverse reaction occurred despite the fact that sulfites were specifically included in the label ingredients; the attending health care professional had failed to notice. Commented FDA, "For these reasons, the agency believes

American Pharmacy Vol. NS26, No.2, February 1986181

that a statement in the labeling is needed to help ensure that health care professionals are alerted to the problem." The wording of proposed statements would look like this: "Contains [insert the name of the sulfite, e.g., sodium metabisulfite], a sulfite that may cause serious allergic-type reactions [e.g., hives, itching, wheezing, anaphylaxis] in certain susceptible persons. Although the overall incidence of sulfi te sensi ti vi ty in the general population is probably low, it is seen more frequently in asthmatics or in atopic nonasthmatic persons." ®

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Medicare Drug Coverage Would Be Cost-Effective, Study Shows

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doctoral research study from the University of Texas claims to show that continuing drug coverage for Medicare patients after they have been discharged from the hospital would be cost-effective. The study, done by Earle W. Lingle, Jr. (now assistant professor of pharmacy administration at the University of South Carolina at Columbia), found that adding outpatient drug coverage would not increase overall expenditures. Says Lingle, "Outpatient prescription drug costs could be absorbed by Medicare, providing more benefits and probably better health for the patients without spending more money." The reason? Lingle says that ''The costs of outpatient ·drug reimbursements appear to be offset by reduced inpatient hospital service expenditures or that patients who maintain outpatient drug therapy often have less expensive inpatient hospital needs." Lingle notes that the issue of ineluding outpatient drug costs in Medicare benefits has a long his-

tory, and has been debated almost since the program's inception. Those arguing against coverage have cited increased costs as a prime reason for not including outpatient drug benefits. They also list administrative costs incurred in servicing the additional claims astoo costly for the program to support. Lingle looked at two test groups with a total of 9,966 patients. The first included senior citizens in New Jersey, and the second was composed of elderly in 22 counties in eastern Pennsylvania. He examined health ·care costs of the two groups in 1975, two years before the implementation of New Jersey's Phannaceutical Assistance to the Aged (PAA) program, and.in 1979, two years after PAA's introduction. During this period, Pennsylvania had no such drug benefits program for the elderly. Lingle discovered that: • ''There were no significant 'differences between the states in the utilization of and reimbursement for the majority of the Medicare health

APhARe-elected to NCPIE Board of Directors

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t the fourth annual meeting of the National ,Council on Patient Information and Education (NCPIE), APhA was elected to serve for a second term on the Council's Board of Directors. In addition, William Heller, executive director of USP, was elected to the position of treasurer of the organization. In previous years, NCPIE has launched two campaigns. The first was directed to consumers (the "Get the Answers" endeavor); the second to health care professionals (the "Give the Answers" effort). Now, NCPIE, which currently has more than 240 national organizational members, is targeting its latest ini-

tiative to businesses and unions, and thereby hopes to reach employees and their dependents, retirees, and customers. With more than 95 million Americans currently employed and/or members of unions, NCPIE officials believe that their new campaign will be able to spread the "Get the Answers" message throughout most of America. Major businesses , including Exxon Corporation, Honeywell, Inc., The Campbell Soup Company, and REVCO Drug Stores, Inc., have already played a major role in funding the campaign. NCPIE is also promoting the concept of a "National Prescription

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care services studied. However, the Medicare recipients in New Jersey had significantly lower Medicare reimbursements than those .of the eastern Pennsylvania sample for inpatient hospital services after the drug program was instituted." • "Approximately 70% of all Medicare costs go for hospital services." • ."The study shows that covering outpatient prescription drug costs could reduce the length of hospital stays. It appears also that savings in reduced hospital stays are greater than or equal to the expenditures for prescription reimbursements plus the program's administrative costs." Because of the limited research the topic has received, Lingle feels that it would be premature to recommend that the Federal government include outpatient prescription drugs in its Medicare benefits. However, the results of the study do support those who believe that outpatient drug coverage would be a fiscally and medically sound addition to the Medicare program. ®

Medicine Awareness Month," for October 1986. A brochure on the promotion states that "National Prescription Medicine Awareness Month will bring together professionals from a variety of organizations to help focus attention on the need for improved communications between patients and health care practitioners. By joining forces in a national public awareness and education effort, participating organizations will be better able to get their message across." As the meeting's keynote speaker, Food and Drug Administrator Frank E. Young praised NCPIE as "an important statement of cooperation between the government and the private sector for the public good." He added that he intends to "follow with great interest the work site prescription drug education campaign that has been announced here." Concerning the plans for Na-

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tional Prescription Medication Awareness Observance for 1986, Young said that "it is hoped that widespread media coverage will attract additional organizations to the work of improving patient information about drugs and health care." Pharmacists who wish to contribute suggestions for improving the dialogue between patients and health care professionals, and specifically for materials to be used during National Prescription Medicine Awareness month, can write to NCPIE at Suite 1010, 1625 I St., NW, Washington, DC 20006. Pharmacists may also be interested in writing to NCPIE for a copy of the council's newest publication titled, "Directory: Prescription Drug Information and Education Programs and Resources."

Smart Cards The programs and workshops at the NCPIE meeting, centered around the theme, "High-TechlHigh Touch," revealed an emerging sophistication and consolidation wi thin the Council-a surer sense of purpose. The first speaker was Clement Bezold of the Institute for Alternative Futures. Bezold took a look at some of the possible technological developments coming up in the next 10 years, which will likely have a profound effect on both practitioners and consumers, as well as the way they interact. Bezold envisions technological developments like widespread use of the "smart card," which encapsulates all of a patient's medical history, including current treatments and a drug history, and the ''hospital on a wrist," which may contain sufficient software for the patient himself to make a diagnosis, using a simple decision-tree program. Or it may enclose sophisticated monitoring and miniaturized drug delivery systems. Such innovations, claims Bezold, "will make medical care far more sophisticated," in part because there will exist a more comprehensive record of exactly what's been done, and will also serve to decentralize information that was previously the exclusive purview of medical specialists.

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This, in turn, will lead to the development of better outcome measures, after pharmaceutical and other modes of treatment, for each individual. Says Bezold, "These outcome measures will be part of health care provider accountability and affect the purchasing behavior of individuals and third party buyers." He adds, "Measures will include various dimensions including physical condition, pain, side effects, direct and-indirect costs." And these outcome measures will be examined on the basis of personal biochemical profiles (stored as data on smart cards, etc.). By this means, we will all be freed from the tyranny of the standard definitions of "normal." Instead, because "each of us has a chemical factory in our body whose operation is as different as our fingerprints are different, we will come to understand what these individual variations are and when they are significant. "A growing percentage of consumers will be in some form of capitated care system (e.g., HMO, IPA)," predicts Bezold. In 1985, the number of HMOs alone was growing at 26% annually. Bezold thinks that capitated systems offer greater incentives to providing more cost-effective care, encompassing better monitoring of outcomes, and "for providing more consumer serviceoriented care." Cost concerns will also motivate the managers of capitated systems to make better use of less expensive non-physician providers, whenever possible. In addition, the need for monitoring outcomes of care will prompt providers to focus more on the role of patient education than they do now. The same cost pressures will favor "lower-cost technologies, including drugs," says Bezold, and "formulary committees will have increasing power over these purchasing decisions." Still, something of the old way of doing things will persist. Bezold believes that "consumers will seek-and competitive providers will providehigh-touch treatments and effective reassurance." Bezold predicts that pharmaceutical researchers, too, will begin to pay more attention to the physiological variability among

individuals, especially those clearly governed by identifiable genetic patterns. One result of this shift in focus will be "designer gene machines," within 10-20 years, that "will allow drugs to be produced for specific individuals (possibly by the local pharmacist using his or her 'designer gene machine' and small fermenter to create a drug matched against the customer's personal genetic profile)." Other current trends likely to continue, according to Bezold's forecast, are more drugs being switched from prescription to nonprescription status and persistent growth in the self-care market. In a "reactor panel" session that followed Bezold's talk, Kenneth Barker, professor of pharmacy administration, school of pharmacy, Auburn University, made the basic comment, "I liked it," and then added: ''The health professions need a broader view, since we're all trained as reductionists, looking at 'micro' systems. Instead, we may all someday be part of teams treating the whole patient. New questions will arise, too. For example, will patients pay for compliance materials since, for example, we know that every dollar spent on prenatal care is worth three dollars in postnatal intensive care?" However, he was dubious about Bezold's predictions that use of computers will mushroom, since surveys show that most home computers are only used for work-related word processing tasks. More trenchant skepticism of Bezold's rosy vision of the future was expressed by Sandy Rovner, who writes on health-related issues for the Washington Post. "All of these technological developments are still only dreams of the future," she said, "and I have to say that that's probably a good thing. They seem to have too much 'tech,' and too little 'touch'-after all, what kind of bedside manner can a smart card have?" She also questioned Bezold's optimistic predictions about the increased dissemination of reliable information to consumers: "I don't believe the market is really smart, or people wouldn't be buying books like Eat to Win." She commented, ''The public is

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incredibly naive about health care. For instance, mothers continue to be convinced that eating sugar will make their children go 'off the wall,' even though NIH has reported on numerous studies that show there's no difference in the behavioral effects of sugar and artificial sweeteners." Finally, she cautioned. ''The current public image of health care practitioners and the PDR is lower than that of quack publications. This is where the work needs to be done." And then, in the comments of a representative from Public Citizen's Health Research Group, came the question that won't seem to die: "Does all the information available today eliminate the need for patient package inserts? Patients still need to know the risks, especially the possible adverse drug reactions, even with the implementation of future technologies." It may be a sign ofthe times that no-one in the audience felt the need to respond to the PPI rallying cry. Economic Incentives

A later meeting session took up the question of discovering economic motivators sufficient to prompt providers and third parties to pay for offering patients drug-related information and education. The first speaker, Clifford Stromberg of the law firm Hogan and Hartson, observed, "We have developed a delicious consensus about the importance of patient education. But is this alone enough? In this country, goods and services don't get produced without economic incentives. Are we creating these? !fnot, what can we do about it?" But while our current system doesn't do much to create incentives for patient information and education, this system is now in the midst of a series of radical changes. Two developments in particular will affect the role played by patient education-new ways for reimbursing physicians, and changes in liability laws. Right now, reimbursement for physicians is provided on the basis of the number of itemized procedures performed. For this reason, physicians don't know how to charge for a relatively intangible thing like patient education.

But as time goes by, more and more physicians will probably be paid on a capitation system, Stromberg believes, because the "diagnosis-related group system will have become so hopelessly Byzantine." A capitation system, says Stromberg, will provide an incentive to avoid events such as adverse drug reactions and poor compliance. This, in turn, will encourage the concept and practice of patient education. Capitation will also promote the rise of self-care, since under this sort of system, physicians will only lose money if they have to see too many patients with trivial complaints. The increase in the ratio of physicians per patients, Stromberg speculates, represents another trend that is likely to prompt physicians to .give more time-and information about drug treatments-to patients. It may be a terrible way to teach anything, but Stromberg thinks that awareness of the prevalence of medical malpractice suits cannot help but encourage more patient education. For pharmacy, Stromberg predicts that the "failure to warn" doctrine ofliability will spread to more states, as pharmacists come to counsel more and more patients and assume more diverse responsibilities. Pharmacists are also likely to be giving more advice on matters like pediatric dosing and pharmaceutical equivalents, says Stromberg, because consumers will demand it. All of these trends will mean that the health care arena will soon have a key element for promoting the widespread dissemination of information about prescription drugsmarket incentives.

Quacks' Advantages

Unfortunately, some of the canniest purveyors of health care, notes John Renner of the National Family Practice Research and Development Center, are quacks. "Often," he .says, "these people know more about human nature, psychology, and · advertising than the regular medical establishment. For instance, the National Enquirer has a tremendous influence on consumers." The elderly, Renner notes, often have many myths about medicine, so it isn't wise to give them only a little bit of information. An older person may believe that cod liver oil works in arthritis, by lubricating the joints. If a pharmacist were then to explain to the patient that a newly prescribed drug works on a different theory, he might be attacking the patient's entire belief system. Renner worries that, in addition to flagrant quackery, there are boderline practices such as the peddling of herbal diets that seem to be attracting more and more health care practitioners, who are often willing to suspend their natural skepticism in the search for a quick buck. Renner thinks that these practitioners may be eroding the professionalism and credibility of the health care system. In particular, Renner singled out dispensing physicians as a critical obstacle to maintaining trust in health care. He comments, "This kind of thing worries me. It's going to be a very significant problem if this develops into something big. This group of physicians are in very great danger of losing their credibility." ®

Pharmacist Liability 'Not Linked to Drug Product Selection ack in September of last year, a B California organization, Pharmacists Planning Service, Inc. (PPSI) sent its members what it called a "generic alert" letter. The letter maintained that pharma-

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cists' "liability insurance will not cover you if a prescription is written for brand-name propranolol and you substitute generic propranolol for a post-mycardial infarction patient."

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The letter went on to reinforce the point by stating that although California pharmacists "will soon be advised" by the state's Health Services Department that "generic propranolols can be dispensed to your Medi-Cal patients," only Inderal "has been approved by FDA for post-myocardial infarction." The letter continued with the warning: "You the pharmacist may be at risk by dispensing a generic product if the branded product has been prescribed. Thus, you may have no defense if the patient has a postmyocardial infarction while taking the generic." By October, the California Pharmacists Association had countered with its own message, noting that "Drugs which are lawfully on the market, approved for one indication, may be lawfully prescribed for other approved indications." CPhA President John Berger, an attorney, spoke directly, asserting that the threat of uninsured liabiliity from propranolol "is false," and called PPSI's directive "the worst kind of professional scare tactic." He cautioned, "Pharmacists should not be misled by this blatant misconstruction of the law." Berger also pointed out that a pharmacist is not required to check on the diagnosis behind a prescription. Instead, Berger said that the burden of responsibility lay with the treating physician: "If the cardiologist is concerned that other propranolols may be less safe or effective, he or she may foreclose brand interchange by an indication on the prescription." Rep. Henry Waxman (D-CA), one of the chief architects of the ANDAI

patent bill, has responded to the situation in California, as well. In a November 25 letter to Frederick S. Mayer, President ofPPSI, Waxman stated that staff attorneys on his Subcommittee on Health and the Environment had examined the PPSI claims about substituting for Inderal in post-myocardial infarction patients. The attorneys' opinion, as summarized by Waxman, was that: "Under no circumstances would the · dispensing of a generic drug found by FDA to be therapeutically equivalent to a brand-name drugeven if the generic were not approved for all the indications approved for the brand name-be considered a willful violation of a criminal statute. Nothing in the Federal Food, Drug, and Cosmetic Act, including the amendments in the DPCPTRA [Drug Price Competition and Patent Term Restoration Act] makes this a criminal act. Nor is there any state law of which we are aware that would do so." Concerning the actions of insurers, Waxman gave similar reassurances: ''There is no reason to believe that insurance companies will act any differently with respect to situations rising under the DPCPrRA. This Act changed nothing about a pharmacist's liability for substituting a generic for a brand-name drug." Waxman concluded, "In short, neither prescribing nor substituting generic propranolol under these circumstances [in post-myocardial infarction] violates Federal law." He also pointed out a previous opinion from FDA Chief Counsel Thomas Scarlett, to the effect that dispen-

sing of a generic version for indications approved only for a brandname product "is certainly of no regulatory interest to the FDA. ..." Also on November 25, Waxman wrote to APhA President John F. Schlegel to inform him about the letter he'd sent to Mayer. Said Waxman, "Mr. Mayer suggested that pharmacists might face the loss of insurance for dispensing an FDAapproved generic drug for an indication approved only for the brandname drug. As you can see, I believe that there is no merit to Mr. Mayer's concern." Waxman asked that Schlegel communicate this message to APhA members, to reassure them that they "may continue dispensing generic drugs without the fear of losing liability insurance." In response to this letter, Schlegel noted APhA's concurrence with Waxman's opinion: ''The American Pharmaceutical Association agrees with you that pharmacists need not be alarmed about problems arising for such dispensing, and we have so stated in recent communications with our members." But at one point during the controversy, confusion became so great that there was even a rumor flying around which alleged that APhA' had had its own pharmacist liability insurance program cancelled because of concern over a possible flood of suits arising from dispensing of generic propranolol. In truth, the Association was just caught up in the same liability coverage crisis that has been plaguing virtually all of the health professions and other insured in the United States. ®

Stephen Sims, Congressional Special Assistant, Recommends Ban on Drug Sampling

,,Ibepersonally think that it would a terrific idea to make it illegal to buy and sell samples. I would recommend that we do this, no matter what else we do." So spoke Stephen Sims, special assistant to the U.S. House of Representatives Subcommittee on Oversight and Investigations. At the December 17 APhA

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Seminar, Sims-discussed the different items in legislation that he plans to recommend to the full Energy and Commerce Committee, based in part on expert testimony delivered at a series of House hearings on the issue of drug diversion. Sims is also the principal author of the Congressional report that emerged from the

hearings, "Prescription Drug Diversion and the American Consumer: What You See May Not Be What You Get." Sims had particular praise for APhA. He said that when the hearings first began, he was unfamiliar with the nature and mechanisms of drug diversion, and therefore noted

American Pharmacy Vol. NS26, No.2, February 1986/86

that, "I appreciate very much the assistance that this organization has given us." In considering some way to preserve the good points about sampling while eliminating the bad, Sims was also enthusiastic about APhA's suggestion that patients get samples through their pharmacies, just like any other prescription drugs. He stated, "I very much appreciate the proposal of this organization-the Trial Prescription Order Program. I personally think that's a good idea; I think that the alternative to that would be an absolute ban on samples." Sims pointed out that drug manufacturers may maintain that they want to continue with their present methods of distributing samples, but that in actuality, "the security people at the companies would probably breathe easier if they didn't have to try to police their people and try to keep track of all these things, particularly once they get into the hands of the physicians. Because that sort of tracking is a virtual impossibility." "It would seem to be a better use oftheir resources," he continued, "if they would transfer that effort to keeping track of the things on the pharmacists' shelves, and if you distributed them through the same channels as non-sample materials. Then, you would have the same assurance that they were being handled correctly; it would be a lot easier to account for drugs." He summed up, "I don't see any huge benefit coming from samples that would be lost by having a pharmacist dispense them." He added, however, that one crucial question concerning pharmacist distribution of samples concerns whether pharmacists would want to charge a dispensing fee for the samples. He noted, ''This might be something that would make the members think twice." Sims' basic approach to countering the diversion problem consists largely of new safeguards for the main channels of drug distribution, samples included. For instance, he is also planning to recommend that reimportation of prescription drugs coming back into the U.S. as "American Goods Returned" be

eliminated, unless the reimporter is the original manufacturer, or in rare instances where medical emergencies are involved. Only importers and diverters would have much interest in opposing this policy decision, he said-"I know of no other group that thinks of reimportation as a great public benefit." Another element in the distribution pathway that Sims feels should be more accountable is the drug wholesaler. He says, "The pharmacist is regulated tightly and effectively by state boards; the manufacturer is similarly regulated by FDA; but in the middle it's pretty much up for grabs. Neither the Federal nor state jurisdiction watches wholesalers to the extent they should. It seems like a large loophole in the system, to let this happen." But Sims suspects that it may be hard to find simple solutions to the problem of how to keep closer tabs on wholesalers. One idea he is considering: requiring each seller to certify to each buyer "who manufactured the drugs and where they have been." Still, he worries that some solutions "might be worse than the disease," in that they would drive up drug prices mercilessly for consumers. So the actual items that the seller would have to supply to the buyer might consist of some basic means of documentation-for example, shipping records. Sims believes that the Nonprofit Institutions Act per se is not the real problem in another aspect of diversion, the profitable reselling of cheaply purchased bulk goods by health care facilities to wholesalers and other dubious customers. This is because he believes that there is "as much diversion in for-profit institutions as in the nonprofit ones." Therefore, any legislative remedies for this type of resale must somehow be able to cover both kinds of organizations. Instead, Sims says that he would "endorse efforts to modernize our legal definition of wh&t a nonprofit institution is," and "make it illegal for institutions of any kind to resell-at least in volume." The language of the law would have to be carefully crafted such that the ban would only apply to the "routine,

American Pharmacy Vol. NS26, No.2, February 1986/87

with intent, kind of reselling." What Sims has chosen not to address in proposed legislation was the issue of differential pricing of drugs. He said, "I don't know how the Congress could figure out how to mandate prices in this regard, because there are so many different aspects of the distribution system, and different companies have different prices: some have a single price, others have two or three, and some of them have a price on Tuesday." He continued, "Fooling around with the free market is not something that 1 personally think is wise. We are focusing on the health and safety problem. I think we can fix that-get a lot better control over it, and so reduce the risks. But the economics of the question is a different matter. I don't think that the Congress could-and I don't think we should-directly try to make a major impact on the prescription drug market." Nor can Congress take direct action about the problem of counterfeit drugs, in Sims' opinion. He said, "if people want to smuggle things into this country, there's not a whole lot we can do about that." He stated that the only possible tactic, increasing the size of the U.S. Customs staff, is being tried. But then he pointed out that the counterfeit Ovulen tablets that initiated the whole inquiry into drug diversion were, after all, legally declared. He nonetheless believes that if the other items of proposed legislation he advocates become law-especially the prohibitions against drug reimportation-"counterfeiting will probably pretty much take care of itself." Sims thinks that legislation to counter diversion could pass through the Congress with relative speed, "given the publicity and interest that's been generated about this. He foresees completion of proposed legislation sometime around February 14 of next year. Then, Committee Chairman Henry Waxman (D-CA) will probably hold hearings to elicit comments on the draft legislation, and Sims especially asked that APhA provide the Committee with its expert opinion at that time. Sims expects that the bill will make it through the House by the end of1986. @

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