Remembering Pharmacy’s Past: Looking Back at Pharmacy and the Kefauver Hearings

Editor’s Note: AIHP is introducing a new feature called Remembering Pharmacy’s Past, in which we will highlight previously published articles that recount aspects of pharmacy’s long and colorful history. We begin this feature with an article by AIHP’s former Executive Director, Greg Higby, PhD, originally published in the Fall 2017 issue of the AACP History of Pharmacy SIG Newsletter. (Past issues of the newsletter are posted on AIHP’s website at this link.)

It is well known that Congress passed the Kefauver-Harris amendment to the Food, Drug, and Cosmetic Act in response to the Thalidomide tragedy of the early 1960s. Some background on Kefauver and his hearings into pharmaceutical price fixing provides context and inspires students to consider parallels with today’s concerns about the cost of medicines.

In the 1950s, C. Estes Kefauver, was one of America’s best-known politicians. As a senator from Tennessee, Kefauver favored civil rights legislation and championed the causes of the “little man.” He made his name investigating organized crime during some of the earliest televised hearings. In 1956 he was a leading candidate in the pursuit of the democratic nomination for president. And while he failed in that effort, he succeeded in gaining the V.P. spot on the ticket with Adlai Stevenson. And after suffering defeat in 1956 to the Eisenhower-Nixon Republican ticket, he turned to investigating American big business, first going after the steel and auto industries. In 1959, Kefauver announced that his attention would be turning to the pharmaceutical industry. As is often the case in the history of drug regulation, a tragedy – this time the tragic side effects of Thalidomide – resulted in new legislation in 1962.

It is important to remember the state of pharmacy practice in 1959. The prescription business had grown tremendously during the 1950s. Before then drug companies were not giants of commerce. Rather than selling blockbuster medicines, most of them had made their reputations selling pure chemicals or standardized herbal preparations. Companies like Squibb, Lilly, and Parke Davis had built close relations with pharmacy over the decades and had earned the trust of community pharmacists, who made up nearly 90% of practitioners. A post-War boom in new drug development, spurred on by antibiotic research, had made the prescription department a significant part of the average drugstore’s cash flow for the first time. By 1960, the prescription department provided about 50% of an average store’s business, with the other half coming from out-front sales of traditional goods: candy, magazines, cosmetics, greeting cards, and tobacco. The actual practice, however, was simple. Pharmacists filled prescriptions. Period. Clinical pharmacy in general practice was years away. A few months before Senator Kefauver opened up his hearings, pharmacists were upset to learn that the American Medical Association wanted doctors to ask for the name of drugs to appear on prescription labels. (At that time, prescription labels did not commonly contain the name of the medicine inside. Patients were expected to trust their doctors completely.) Pharmacy leaders opposed he idea, largely because pharmacists would be forced to talk with customers about their medicines. That was the doctor’s job and expressly forbidden by APhA’s Code of Ethics.

Starting in late 1959 and throughout 1960, Senator Kefauver and his committee went after the drug industry on the issue of pricing.¹ Kefauver was convinced that the pharmaceutical industry was fixing prices on certain drugs, especially antibiotics. The executives of the major companies argued that just because the major broad-spectrum antibiotics like the tetracyclines and chloramphenicol all cost exactly the same amount as each other and had for a decade, it did not mean there was any price fixing. Kefauver did not buy their arguments.

In sharp contrast with what might happen today, all elements of pharmacy lined up against Kefauver: The companies, of course, opposed his inquiries. National pharmacy organizations saw Kefauver as threatening to them as well, even though he pledged not to investigate practitioners. Community pharmacists, placed on the front lines defending what they identified as their industry to customers, opposed Kefauver. And the journals … well, they set aside objectivity and went after “Keef.” In the words of one head-line writer, “Kefauver Smear Campaign Begins.”

As Dan Rennick of American Druggist remarked on the Kefauver hearings, “no single event has created so much distress among pharmacists.” He collated the opinions of his fellow editors who were all in complete agreement.²

Wally Werble (Weekly Pharmacy Reports “The Green Sheet”):  “The most damage that Kefauver can cause is to create a hostile atmosphere and public opinion for the pharmaceutical industry, drug wholesalers, and pharmacists.”

Madeline Oxford Holland (American Professional Pharmacist):  “The Kefauver hearings are a serious threat to all of Pharmacy.”

Robert Swain (Drug Trade News):  “The public may be expected to manifest a thumbs-down attitude for some time, as it munches upon the few juicy morsels tossed its way.”

Robert Abrams (Voice of the Pharmacist):  “[T]hese hearings may serve as a springboard toward the hastening of some form of socialization of the health professions.”

Louis Kazin (Drug Topics):  “Retail pharmacists should be prepared to answer the questions on prescription pricing that must be expected to crop up in ever greater numbers as the committee hearings progress.”

With these opinions expressed at the beginning of Kefauver’s hearings, it is not surprising to learn that objectivity did not reign during the next several months. Following the lead of Dr. Austin Smith, head of the Pharmaceutical Manufacturers Association (PMA), the pharmaceutical press shifted towards a broad-based public relations campaign that emphasized prescriptions as “America’s biggest healthcare bargain.” The journals were full of articles and excerpted editorials critical of Kefauver and his “tactics” used against representatives of the drug companies. The editors of pharmacy journals even broke rank with their newspaper colleagues, accusing them of supporting Kefauver in order to “sell papers.”  

As the hearings progressed in 1960 with Kefauver probing the pricing of corticosteroids and tranquilizers, pharmacy journals turned to harsher stories: The Kefauver hearings were going to dissuade young people from entering pharmacy, for example. The frightening specter of “Socialized Medicine” putting pharmacy practice under direct government control was brought out periodically whenever opposition to Kefauver seemed to cool.  

What was Kefauver’s agenda? Was he hoping to ride this investigation into the White House, as some pharmacy editors maintained? Perhaps. He was an ambitious politician.  But he also knew that his time had probably come and gone. More likely he saw reform of drug pricing as his legacy as a politician. He had found so-called “administered pricing” in other industries and was convinced that the pharmaceutical industry was guilty of the practice. Moreover, the arrogance that Austin Smith and some company executives exhibited in the early rounds of the hearings spurred him forward.

To the PMA Kefauver’s hearings threatened to inspire laws that would impose some sort of price controls on drugs, especially lucrative antibiotics. Even more importantly, Kefauver’s hearings brought public attention to the subject of generic prescribing and its possible cost savings. Outside of hospitals, almost all medicines were prescribed by trade name. Companies spent millions of dollars to make Miltown and Diuril household names.  Anti-substitution laws kept brand name medicines large sellers long after patent rights expired. And finally, Kefauver’s staff revealed another strange anomaly – brand name medicines manufactured by US companies were being sold wholesale in Europe and Canada at much lower prices than in the USA. The testifying pharmaceutical executives did not explain this oddity other than claiming that it was a result of the strong US dollar.

Based on the hearings, Kefauver proposed corrective legislation in 1961 that clarified the length and nature of pharmaceutical patents, called for uniform generic names for drugs, and some regulation of drug advertising. Most significantly, it gave the Food and Drug Administration the authority to pass on drug efficacy as well as safety. The bill failed to receive sufficient support for a vote on the Senate floor. The public relations barrage by the PMA and supported by the pharmacy establishment may have contributed to its demise. It would, however, rise again.

Soon after the bill’s legislative defeat, the popular press filled their pages with stories and photographs of the victims of the Thalidomide disaster. This sedative, marketed in Europe to treat morning sickness, led to about 10,000 cases of phocomelia. Richardson-Merrill attempted to get the drug into the US market in late 1960 and was stopped repeatedly by Frances Kelsey at the US Food and Drug Administration. Few stories have captivated the popular press as the famed “Thalidomide babies.” As was the case in the 1930s when the Elixir of Sulfanilimide disaster spurred passage of the Food Drug and Cosmetic Act, this new disaster resurrected Kefauver’s old bill, which was re-written to add an efficacy requirement for new drugs. President Kennedy signed the bill on 10 October 1962.⁵

References:

1.         Kefauver Hearings Spawn Massive Headline Assault on Drug Field Prices,” American Druggist, December 28, 1959, p. 11.

2.         Dan Rennick, “Straight Talk,” American Druggist, February 22, 1960, p. 8.

3.         How to do a Public Relations Job on Rx Prices . . . Right at Home,” American Druggist, November 2, 1959, p. 9

4.         Henry Steele, “The Fortunes of Economic Reform Legislation,” American Journal of Economics and Sociology, 1966, 25, pp. 39– 51. doi:10.1111/j.1536-7150.1966.tb02762.x

5.https://www.fda.gov/aboutfda/whatwedo/history/productregulation/promotingsafeandeffectivedrugsfor100years (Accessed 3 August 2017).

Posted: December 7, 2022