A Senate subcommittee was told yesterday that so-called anti-substitution laws, which once were necessary to protect the public from inferior drugs, have degenerated into devices for keeping drug prices unnecessarily high.
Dr. William, Pharmaceutical Association, said the anti-substitution laws in many states have prevented pharmacists from selling low-cost but high-quality prescription drugs that were readily available.
Apple, executive director of the 51,000-member organization, said that until 1970 the APHA supported these laws as a protection against unscrupulous firms that wanted to manufacture cheap imitations of what were then expensive, patented, brand-name drugs.
But when patents expired on the "miracle drugs" of the late 1940s and early 1950s, and when smaller firms began manufacturing generic drugs of equivalent quality and lower cost, Apple said, there was no longer any reason for the anti-substitution laws.
"It is not surprising," Apple said, to conclude "that the anti-substitution laws had outgrown their purpose, had come to be applied in a perverted manner and had to be amended if the public's interest and profession's goals were to be served."
Apple made his remarks in testimony before the monopoly subcommittee of the Senate Select Committee on Small Business, which is holding three days of hearings on the drug industry. Until 1970, he said, anti-substitution laws or comparable regulations existed in nearly every state. Since then, however, more than half the states have repealed the laws.
In testimony before the subcommittee on Monday, Food and Commissioner Donald Kennedy said there is virtually no difference between generic prescription drugs, such as tetracycline, and the more expensive brand name varieties, such as terrmycin or sumycin, even though drug companies often sell the latter for as much as 300 to 700 per cent more.
William Marovitz, an Illinois legislator who sponsored a successful bill to repeal his state's anti-substitution law, testified yesterday that, because of "scare tactics" and "misleading information" by major pharmaceutical companies, it took six years to push the bill through.
He said "worst abuse of lobbying" occurred when an executive of one company posed as a lobbyist for Operation PUSH, the Rev. Jesse Jackson's Chicago-based rights organization. Maovitz said five members of a key legislative committee were black, and the executive testified before them that Operation PUSH was opposed to the bill "because it would force inferior-quality drugs on the poor." But, Marovitz said, Operation PUSH had not taken a position on the bill.