MINUTES COr~1ERCE COMMITTEE - NEVADA STATE LEGISLATURE - 58TH SESSION °"11 ,...,...,7 April 16, 1975 0 t,i.:, The meeting was called to order by Chairman Robinson at 3:30 P.M. MEMBERS PRESENT: Mr. Benkovich Mr. Demers Mr. Getto Mr. Harmon Mr. Hickey Mr. Moody Mr. Schofield Mr. Wittenberg Mr. Chairman MEH~ERS ABSEN'l': None SPEAKING GUESTS: Assemblyman Coulter Barbara Silberling, Nevada Consumers League Joe Lawler, Consumers Affairs Division James F1mun<.lson, representing Food Commissioner George Bennett, State Board of Pharmacy Minor Kelso, Title XIX Janice Goodhue, citizen Wally Roanhaus, Division for Aging John Kimball, Commission on Aging Elliot King, pharmacist Robert C. RoJgers, The Upjohn Company Joe Foley, Southern Nevada Chapter of the America1 Institute of Architects • Clinton ~~oster, Nevada Association of Architects Jack McCulloch, Nevada State Board of Architecturi Jim Joyce, Nevada Association of Building Designe: I. R. Ashleman, Nevada Association of Building Designers The purpose of this meeting was to hear testimony on the following bills: AB 436 AB 583 SB 283 Also discussed were: AB 455 SB 84 SB 89 SB 213 The first bill to be heard was AB 436 which: Allows prescriptions for drugs designated by trade or brand name to be filled with less expensive drugs selected by generic name, unless otherwise specified. COMMERCE COM.l\lll'I"l'EE APRIL 16, 1975 PAGE 'H-JO Assemblyman Coulter spoke on behalf of this bill saying what the bill says is that when a doctor prescribes a drug by brand name, the pharmacist may make a substitution of an equivalent, lower • priced drug. He said there is a provision in the bill that if the doctor objects to any substitutions, all he has to do is indicate on the prescription that he does not want any substitutions made and none will be made. He said the California Assembly passed a similar measure in that State on April 4 of this year by a 61-13 vote and at the same time a court suit has been filed which would seek to overturn the anti-substitution law in the State of California. Mr. Coulter submitted to the Committee a copy of an article in favor ..Qt <i:r.l!g. ~1Jl;>$,_tj. tut),on taken from the Sacramento Bee a copy of which is enclosed {Exhibit 1). Mr. Coulter also submitted a list of manufacturers and distributors of drug products listing various drugs produced by several manufacturer at different prices a copy of which is enclosed {Exhibit 2). The Nevada Consumers League in 1972 made a survey of drugs in Nevada and they found that identica: doses of identical drugs varied as much in price as 567%. Mr. Coulter went on to say that many of the questions on substitution focus on what the Federal Government is going to do. He said former HEW secretary, Casper Weinberger, went before a Senate Committee and said that within a few years drug substitution would be mandated by the Federal Government and Mr. Coulter said he has been told by two pharmacists associated with manufacturers that it is probably - coming within a year ..... - Mr. Coulter then quoted from an article in a 1973 issue of New Republic Magazine saying "The cost of nam·e brand labels often exceed the cost of the pills themselves. This is the unmistakeable conclusion one draws from recent studies on prescription drug industry by Senator Gaylord Nelson and Congressman Rosenthal. Congressman Rosenthal made an extensive survey in the Queens County District of Washington D.C. comparing prices of brand name drugs with those of chemical or generic equivalence. He concluded that American consumers are forced to pay over one billion dollars annually in unnecessary prescription drug costs because of prohibitions on retail · advertising, over-protective patent laws, promotional expenditures by industry and unreasonable markups". In California, they estimate that the passage of their drug substitutio law will save the consumer $45,000,000 every year. Mr.Coulter added that he did not think the amount would be so great in Nevada but he did think it would be in the hundreds of thousands of dollars. He felt this bill would result in much savings for the Nevada consumer particularly senior citizens. He went on to quote an article from the California Pharmacist Magazine by Edward Fieldman, an official of the American Pharmaceutical • Association which said: s;:F• - COMMERCE COMMITTEE APRIL 16, 1975 PAGE THREE "About 20 years ago, the pharmaceutical industry acting through its primary trade association successfully bamboozled the American people. Among those duped were numerous state • legislatures, the medical profession and the pharmacy pro­ fession. 'l'he American Pharmaceutical Association was so effectively hoodwinked that it even lent its support to the_ industry in advocating the enactment of various statutes and regulations which are co1mi1only referred to as anti­ substitution laws." This official of the American Pharmaceutical Association went on to enumerate some of the problems involved with this anti-substitution. He said, "It eliminated meaningful price com~etition in the drug industry. For all practical purposes, it extended. the patent monopoly into perpetuity. It effectively suspended the pharmacist from functioning on behalf of the patients' economic interest and it eliminated the pharmacists' most basic professional function." Mr. Coulter went on to say that Casper Weinberger stated in testimony before the Senate and it was reported in the Congress~onal Quarterly that in terms of quality and therapeutical equivalence, with few exceptions, no significant differences among chemically equivalent drugs has been shown. Mr. Coulter then submitted to the committee a press release from the ~ational Research Council which is a private organization founded by Congress with the responsibility of advising the Federal Government in science ana technology. A copy of this press release is attached hereto (Exhibit 3). This release supported drug • substitution. He went on to say that studies indicate that the national pharmaceuticaJ manufacturers spend a great deal of money in promoting particular brand name drugs. According to an article in Scientific America, in 1973, they spent 1.2 billion dollars that year which amounted to $4,000 in efforts aimed at every single doctor in the United States. Mr. Coulter thought this was an incredible amount of money to tell people that they should buy a particular name brand drug. He said 1.5 billion drug prescriptions were filled in 1973 which is a average of 20 prescriptions for every single family in this Country. · Mr. Coulter then quoted Mr. P.H. Lake, President of Eli Lilly & Co. who was speaking to the National Retail Druggists at their convention in Las Vegas in November 1974. Mr. Lake said: "For reasons that I shall neither defend or deny, you and I (the druggists) have not co~nunicated with the consumer. We have not sought out his concerns, his expectations, his complaint3. When questions get tough, we retreat to the back room, we wrap ourselves warmly in the cloak of medical mystic and hope the cold winds of consumer concerns and curiosity will blow away, but they won't, ladied and gentlemen, they simply won't" . Mr. Coulter said ·testimony may be heard that there are bad generic • drugs on the market. He said this is probably true, but the pharmacist in his professional capacity should be able to handle this. COMMERCE COMMITTEE APRIL 16, 1975 fJl_l-4 OC30 PAGE FOUR Mr. Coulter said he was told the State Pharmacy Association would • not oppose this bill if a few changes were made: In Section 1, Subsection 2, the Association wants this changed to proviue that the doctor would have to specify that a substitution can be made rather than as the bill now reacts that the doctor specify they can't be made so there would not be the occasion when the doctor simply forgets to indicate no substitutions. In Section 1, Subsection 3, the Association would like this Subsection d·eleted entirely. (Subsection 3a) • They did not believe this could be enforceable. Mr. Coulter said this bill is a meaningful attempt to solve the problem of drug substitution. There are so few drugs that are not interchangeable that a list could be made up as the Federal Government has declared only 20-30 drugs as not interchangeable. Once this is done, he said, this will be mandated on the Federal level. He felt meaningful savings could be made in areas of high escalating costs for all concerned. Mr. Demers wondered if the Supreme Court decision involving Coca-Cola and Pepsi would enter into this matter as the decision held that if someone goes into a restaurant and asks for a "Coke", they cannot be given a Pepsi. They first have to be told that there is no coke, would they like a pepsi. Mr. Coulter did not know if this case would - be applicable in this situation Chairman Robinson wondered about .the control there would be on, for example, drugs coming in from outside the Country. Mr. Coulter said the decision would be up to the oharmacist and that this bill does not mandate him to do anything .. He may choose not to make any substitutions. He felt this bill might force the pharmacist to act more in his official capacity. He said the pharmacist knows more about the different drugs than a doctor. This would get the doctor and the pharmacist working together to get the best drug for a patient. Barbara Silberling then spoke on behalf of the Consumer League of Nevada in favor of this bill saying it would reduce the price paid by the consumer and commented that the pharmacist should be able to choose the kind of drug he dispenses.