Prescription and Prices

The Real Voice.
by Richard Harris.
Macmillan. 245 pp. $4.95.

The late Senator Estes Kefauver did not become chairman of the Senate Subcommittee on Antitrust and Monopoly until January 1957. When he achieved this eminence, however, he made a real thing of it. He held a series of “administered price” hearings: steel, autos, finally drugs. The first two are monuments to economic fact-gathering—reputed to be the most impressive since the reports of the Temporary National Economic Committee at the tail-end of the New Deal. But the third, his extensive hearings on the drug industry (held shortly before he died a twice-defeated candidate for the Democratic Presidential nomination), was the one that got the most publicity. Unlike the others, the drug hearings resulted in an enacted bill—a gold star on Capitol Hill.

The Real Voice is a fascinating anecdotal narrative about the whole process by a very effective New Yorker writer with a good command of novelistic techniques. The villain of the drama described by Richard Harris here is the drug (that is, the prescription drug) industry—personalized somewhat by individual apologists and lobbyists, but mostly appearing straight as the huge profit-seeking mechanism it is. The drug industry has been zooming to financial glory by reason of a major technological bonanza. Like many such, the new drug technology seems to have had its origin in one of our war efforts: antibiotics as a big postwar item grew out of the demand for penicillin during World War II. Besides antibiotics, the big early sellers were cortisone and tranquilizers. But the drug industry is not merely fortunate, as some others are, in having been handed an opportunity to exploit technological advances; the drug industry is peculiar. This is not only because it has a very personal application to immediate matters of pain and death, or because it sells a new order of merchandise which might be called “necessitous luxuries.” It is peculiar for two additional reasons.

First, the industry “sells” only to thousands of doctors, who in turn “sell” to millions of consumers. In this special distribution system, the doctor's profit has nothing to do with the industry's profit. Second, the industry seems to have been the special victim of the breakdown of our patent system as traditionally conceived. Briefly, it is too expensive to litigate-out a patent all the way; also, you can lose the patent altogether, since the courts are tougher than the Patent Office. According to Mr. Harris (who relies on the Kefauver staff work), what the drug firms have done has been to settle litigations among themselves whereby the patent is preserved and the take of the interested parties is apportioned out of court. This amounts to private administration of the patent privilege, also called “collusion.”


The patent factor is not the main angle, however. The main thing is selling trade names and pharmaceutical variations to doctors. This is done by advertising and by salesmen. There is one salesman for every five workers in the drug industry—they are called “detail men.” There is one detail man for every ten doctors in the country; they run their routes regularly, and give away tons of samples. Additional tons, along with elaborate brochures, arrive by mail. The industry indulged in 3.8 billion pages of journal advertising in 1959, sent out three-quarters of a billion “direct-mail impressions,” and the detail men made nearly twenty million calls on doctors and pharmacists. In 1958, the 22 largest companies spent 24 per cent of gross on advertising and promotion. This ante keeps out more small fry than the patents ever could.

When the doctor, for instance, writes “Miltown” (a brand name) instead of “meprobamate” (its chemical name) on a prescription, the hundreds of millions of dollars of promotional expense are justified. To assist him in doing so, the drug companies—besides the great expenditure of money—concoct chemical names only a philologist could remember and spell (“clordizapoxide”) to match the catchy trades names (“Librium”). And when a doctor prescribes Miltown or Librium, the druggist by law may not substitute the cheapest reliable meprobamate or clordizapoxide on the market. (The same applies to slight pharmaceutical variations and combination drugs.) Kleenex never had it so good.

Anybody who followed the boom market of the 50's even casually knows how hot drug profits were. That was what Kefauver started after—in line with his antitrust and monopoly jurisdiction, his interest in non-market pricing, and his staff's initial probing of the industry. His first headline on the front page of the New York Times read: “Senate Panel Cites Markups on Drugs Ranging to 7,079%.” The final headlines of the machine-of-concern which he had set in motion were, of course, those concerning thalidomide and the American woman who went to Sweden for an abortion rather than give birth to a child deformed by the drug. These headlines measure the shift of concentration in the hearings from pricing to side effects. The American people ended up more interested in occasional poison than in day-to-day prices. (This seems to me to offer some kind of poisonous food for thought.) In any event, the fact that the drug companies had cut some testing corners—had rushed with unseemly speed to make their wonder drugs available for the creation of their wonder profits—provided the decisive thrust for both the content and the passage of the final bill. This bill accomplishes something, it is said, regarding FDA supervision of testing and labeling as to side effects; but nothing much has been done about pricing and patent procedures. So be it: that is, I believe, the truth of American popular interest. There is not much real objection to the basic structure of corporate advertising power in this country.


The last word must be reserved for Senator Estes Kefauver. He was a bull of an intellectual from Tennessee—a graduate of the Yale Law School who campaigned in a coonskin hat. One of his chief assistants in the drug hearings viewed him as the last of the Populists, because of his antitrust tilting against vested urban windmills. Mr. Harris quotes a “veteran observer of affairs on Capitol Hill” to the effect that Kefauver was “The Shakespeare of Committee chairmen. . . . He takes the work of some Saxo Grammaticus on his staff and brings it to life for the man on the street.” That language (the Library of Congress and the Shakespeare Folger Library are both situated on Capitol Hill) suggests that the Senator was exceptionally good at parlaying staff work, even of a decidedly intellectual or academic or expert nature, into headlines. With that talent for bridging the distance between his academic staff and the popular mind as he conceived it, no wonder he thought he could be President. He was an early, local Kennedy; a late, sophisticated Johnson.

But he was slow and careful, ponderous and profoundly calculated: his most frequently reported quality was “unruffled persistence.” Kefauver was an even more withdrawn Wilson—after the ball was over. I had the occasion to stare at him for a half-hour or so, within a year or two of his death: I have hardly ever seen such a depressed individual outside of an asylum. In my opinion, he represents very meaningfully the Walpurgisnacht of American liberal will, relying on and appealing to native righteousness. I emphasize “will”: the cultural sources had dried up before he did. As The Real Voice (the title is taken from Woodrow Wilson, incidentally) ends, Kefauver puts down a book—on the urging of his staff—to solicit an invitation to the signing ceremony of Public Law 87-781. He invited himself, but President Kennedy—who was uninterested in the drug investigation but had taken over the action for headline reasons—gave him the first cheap signing-pen. The book he had laid aside was equal to the event-“a dog-eared copy of How to Win Friends and Influence People.”

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