The Carter administration yesterday proposed model state legislation to increase the use of 2,000 low-priced, non-brand-name prescription drugs, an effort it said could save consumers $400 million a year.
The model law, proposed by the Health, Education and Welfare Department and the Federal Trade Commission, would offer pharmacists a financial incentive to fill prescriptions with these so-called generic drugs, instead of costlier brand-name products, unless a patient's doctor objected.
Under the proposed law, druggists could keep part of any savings realized by the customer. Existing state laws allow pharmacists to substitute the generic drugs, but require them to pass on the entire savings to the consumer.
At the same time, the Food and Drug Administration released its first complete list of the 2,000 such drugs it has found medically or therapeutcially equivalent to brand-name products that pharmaceutical firms spend millions of dollars a year to advertise in medical journals.
The list was released with a proposal in the Federal Register that it be given official status, something HEW Secretary Joseph A. Califano Jr. said would "absolutely" take place later this year.
The Pharmaceutical Manufacturers Association, the trade association for the major drug firms, sued HEW last month to prevent official publication of the list. The same firms make 90 percent of the cheaper, generic drugs.
PMA President C. Joseph Stetler said yesterday that the latest action by the federal government "will do little or nothing for consumer savings," while eroding both doctors' authority and drug firms' ability to accumulate research funds.
The FDA lacks the resources to assure that all drugs are of uniform quality, Stetler said, and its list makes "dangerous" and "undocumented and false" quality comparisons.
Califano said "the FDA has concluded" that for drugs it calls "equivalent," "there is no general difference in quality, safety or medical efficacy... Substantial savings to consumers are possible, with no loss in quality."
Ninety percent of all prescriptions written specify brand drugs -- in part, said FTC Chairman Michael Pertschuk, because drug firms spend $2,400 yearly per practicing doctor to get names like Darvon, Valium and Librium "indelibly stamped in the physician's mind."
Califano said the wholesale price for a common tranquilizer, chlordiazepoxide, is $1.50 per 100 capsules when sold under that chemical or generic name, but $6.87 a hundred when sold as Librium. The tranquilizer meprobamate is 94 cents a hundred sold generically, he said, but $7.50 a hundred as Equanil or Miltown.
By next December, Califano added, the government itself will be paying only the lowest possible costs for all drugs bought for Medicare and Medicaid patients.This will save only $20 million a year, health officials said, because Medicare patients must pay for most drugs themselves.
Since 1970, 38 states have passed laws permitting -- or in a few cases (so far largely unsuccessful) requiring -- pharmacists to substitute a cheaper, generic drug unless a doctor's prescription prohibits it.
The PMA said such laws have failed to achieve significant savings. But Califano said the new FDA list will for the first time give consumers and druggists confidence to use generic drugs widely.
Pertschuk said the model law builds on experience so far and can give states an effective instrument.
Under it, for example, a doctor could make sure of ordering a brand drug only by writing "medically necessary" on the prescription blank. This is a slightly more complicated requirement than present laws.
The FTC's Peter Holmes said that in Michigan -- though a substitution was made by the druggist in only 1.5 percent of all possible cases in 1977-78 -- consumers saved 20 percent or $1.15 a prescription for an overall saving of "$200,000 to $300,000 a year." In Wisconsin, he said, substitutions have been running 18 to 20 percent of possible cases.
Washington-area drugstores have begun aggressive advertising for their cheaper generic drugs, Holmes added.
"We rely on competition," "the forces of the marketplace" and "the demands of consumers" to spread the trend, Pertschuk said.