Evening star., 1959-12-10
DRUGS
DRUGS
Firms Queried on Policy
Of Prices in Bulk Trade
Continued From First Page

Ollc-tIllIO WnaJ you see 10 Lne
pharmacist" Chairman Kefau-
yer told John T. Connor, pres
ident Of Merck. That doesn't
seem right"
The committee noted that
1000 tablets of the drug goes
to the pharmacist for $l70 with
a suggested retail price to the
patient of $283.32.
But testimony showed that
Merck in the last year had ne
gotiated a sale to the Veterans
Administration of $136 per
1000 pills. In another instance
it made a bid to the armed
services of SIS per 1000 tab
lets. and again a bid of -65.
other smaller companies
made bids of $40 ana $3.50
per 1000 tablets.
How do you explain thiS?"
asked Committee Counsel P.
Rand Dixon.
Mr.. Connor replied that COM
petitive conditions differ with
the Government trade. He
noted that Government busi-
ness usually involves large
quantities, making lower prices
possible. 1 nthe retail trade,
he said, his firm must offer the
same price to all druggists. He
added that the $170 price to
the druggist is for 1000 pills
and that when a druggist buys
in larger quantities discounts
are made.
Mr.. Connor declared that
Merck'S prices may be higher
because doctors know and trust
its good name, realizing that
the firm exercises controls to
guarantee the purity of its
products.
Differences Noted
Speaking Of the smaller COM
panies, Mr.. Connor said that
the Government often does buy
the same drug at lower prices,
but that the Government has
its control laboratories to test
for purity. He noted that in
Government trade a product
must meet certain minimum
standards while in the retail
trade products vary widely
above those standards.
Speaking Of Merck'S sales to
the Federal Government at
lower prices, Senator Kefauver
declared that. You must make
q profit on it. I can't under
stand this whole thing. It's the
average citizen that has got to
buy from a druggist"
why can't you give the pub
lie little break instead Of just
the Government hospitals,
Senator Kefauver asked.
Mr.. Connor said the channels
Of trade vary and that I'VE look
at our steroid hormone busi-
ness in an overall way. AS long
as the overall profit is at sat-
isfactory level we can compete
In the Government trade"
Price Constant
Senator Kefauver noted that
the price Of prednisolone to the
druggist has remained constant
since 1856, but now it has
dropped when sold in bulk.
Why can't you bring your
other sales down." he asked.
We'll, the competitive sys-
tenn differs" Mr.. Connor said.
In the bulk business we don't
have the cost of detail men
educating doctors nor do we
have the expenses of clinical
tests or distribution COSTS" he
added.
Mr.. Connor said Merck could
not stay in business If it relied
on the Government and bulk
business alone.
He noted that his firm re-
Gently introduced a new steroid
more powerful than the older
ones at 10 per cent below the
price of the others.
Mr.. Connor introduced a
pamphlet put out by the Ma
tional Pharmaceutical Council,
Inc, entitled Twenty -four
reasons why prescription brand
names are important to you"
The booklet encourages physi-
clans to prescribe by trade
names rather than generic
terms.
Mr.. Dixon noted that the
member companies of the
council consist of most of the
Nations largest drug manu-
facturers and not the small
companies.
Research Cited
Mr.. Connor said these large
companies are the ones that
create new drugs and do eX-
tensive research.
Mr.. Dixon said a company
can't sell a drug unless it meets
Federal standards and charged
Mr.. Connor with representing
to the trade that the small
companies products are not as
pure. He said that puts the
small manufacturer at a DIS
tinct disadvantage.
Mr.. Connor retorted that the
products of different companies
vary widely. The physician
can have confidence in Merck
products, he declared. Il don't
know that he can with some
of these others"
Yesterday the committee was
told that small drug firms I
are unable to obtain a greater
share of the market because
the larger companies have the
well-known brand names.
We use the generic name"
said DR.. Philip Berke, vice
president of Formet Labora-
tories, Inc, Roselle, N. J.
DR.. Berke said that if one Of
the big drug companies obtains
.nAn,nt fn,. Ahn t,n.n Lon dim