G O V E R N M E N T

No New Controls Needed on Drug Ads New legislation would duplicate present controls over drug advertising, agency directors say

The drug industry can breathe a sigh of relief: The Kefauver hearings are over. Unless the chairman changes liis mind and discovers some point that has been overlooked—which seems very unlikely—the curtain has come down on the two-year probe into all facets of the drug industry. Now7 the committee faces the unenviable task of wading through, thousands of pages of testimony in executive session try­ing to hammer out a drug bill which stands some chance of winning Con­gressional approval.

Topic for the final round of hear­ings on S. 1352, Sen. Kelauver's drug industry control bill, was ethical drug advertising. Witnesses were the heads of William Douglas McAdams, Inc., and L. W. Frohlich, Inc., two New York firms \Vhieh specialize in ethical drug promotion and advertising. Both agency heads agree that they favor the principle of improving the quality of ethical drug advertising. But they point out that Food and Drug Ad­ministration regulations now in effect or scheduled to go into effect shortly accomplish the same job as the pro­posals in S. 1552; hence, there is no need for new legislation.

Ad Controls. Under S. 1552, adver­tisers would be prohibited from mak­ing excessive claims for a drug's ef­ficacy. All advertising and descriptive matter would have to include a full and correct statement of a drug's ef­ficacy. In addition, advertisements would have to include a warning as to dangerous or harmful side effects in language approved by FDA.

According to Sen. Kefauver, phy­sicians complain that the claims of a drug's efficacy are frequently excessive in terms of its actual performance and that cautions concerning a drug's side effects are often wholly absent or far from adequate.

Under present law, he says, there is no adequate way to deal with this problem. The Federal Trade Com­mission has no authority to police ads which are directed exclusively to phy­sicians. And FDA officials sav thev

can act effectively only against mis­statements concerning safety, not ef­ficacy. The advertising provisions of S. 1552, he says, are designed to solve this problem.

Performance Required. Good ethical advertising depends on sound and useful drugs, Dr. Arthur M. Sackler, chairman of McAdams, says. Advertising is no substitute for prod­uct performance, and the prescription drug which does not fulfill the claims of its promotion cannot be a success either medically or commercially. But advertising does not replace the tra­ditional means by which a physician develops his therapeutic practices; the function of advertising, he .says, is to alert the doctor to the availability of new drugs.

Under present laws, doctors get full and complete information on new drugs, Dr. Sackler says. Information in all direct mailings to the doctor and all material prepared for use by detail men is subject to FDA control. And under new FDA regulations ef­fective next month—the so-called full disclosure rule—all packages, includ­ing sample packages, must contain the official labeling authorized by the

new drug application approved by FDA. Thus, he says, it appears that many of the objectives of the adver­tising provisions of S. 1552 have been attained and new legislation would be essentially a duplication.

No matter how high its quality, prescription drug advertising can still be improved, has been improving, and will continue to improve, Dr. Sackler says. In his opinion, the drug hear­ings have helped to improve the qual­ity of advertising by realerting adver­tisers to their responsibilities to the medical profession and to the public.

The function of drug advertising is to alert doctors to new7 drugs and to remind them of individual prod­ucts, Julian Farren, executive v.p. of Frohlich, told the committee. An ad­vertising agency works under many restrictions, some self-imposed, others imposed from the outside. But these restrictions are necessary to maintain high standards, he says.

Mr. Farren opposes the provisions of S. 1552 which require FDA to approve statements about a drug's efficacy. In his opinion the only judge of efficacy should be individual phy­sicians. Since medicine is not an exact science, he says, there are many differences of opinion on efficacy. To have just one group pass on the ef­ficacy of a drug would place an un­warranted burden of responsibility on FDA.

Mr. Farren favors further restric­tions if they will promote progress in therapy, but he opposes legislative re­strictions which will hinder advances in the treatment of disease.

SWEARING IN. In an unusual move, Sen. Kefauver swore in Edward Dent (left) and Julian Farren, vice presidents of the L. W. Frohlich advertising agency, before hearing their testimony on ethical drug advertising

FEB. 12, 1962 C & E N 35

Antitrusters May Get New Power House subcommittee okays bill giving Justice power to see business records in noncriminal probes

Congress this session may arm Justice Department antitrusters with an im­portant new power of investigation. The House Antitrust Subcommittee has just approved a measure which would give Justice authority to de­mand business records in noncriminal antitrust probes. The bill (S. 167), which passed the Senate last year, stands a good chance of winning House approval this session.

Under existing law, only the Fed­eral Trade Commission can compel companies to submit their files for in­spection prior to noncriminal litiga­tion. In antitrust probes other than grand jury investigations, the Justice Department must get permission from the company before it can go over business records. With more antitrust charges flying about, companies are more reluctant to cooperate in antitrust investigations.

In the absence of voluntary dis­closure on the part of companies, the only recourse for Justice has been to go to the harsher criminal antitrust proceedings and use a grand jury's subpeona power to get documentary evidence. But Justice cannot convene a grand jury unless it intends at the outset to proceed criminally with the matter. The new investigatory power may allow Justice to take the milder civil action in certain cases where it is now forced to proceed criminally. A civil suit can result in a court order forcing a breakup of il­legal mergers or an injunction against business practices found to be in re­straint of trade. But conviction on criminal antitrust charges can mean heavy fines and even jail sentences for company officials, as well.

Under S. 167, Justice, if it suspects a company of practicing trade re­straints of less than criminal propor­tions, can serve the company (or companies) with a "civil investigative demand." Although not classed as a subpoena, the demand would serve much the same purpose. It would compel the firm to turn over to Justice either copies of its records, or if that is not possible, the original documents themselves.

Industry is largely opposed to the Administration-backed bill. But Rep. Emanuel Celler (D.-N.Y.), chairman of the House Judiciary Committee, who has been only lukewarm toward the measure in the past, now has thrown his full weight behind it. The measure is expected to clear the full committee shortly.

Congress Urged to Set Single Patent Policy Justice suggests agencies take title to patents under R&D contracts

Congress should establish a uniform policy for handling the rights to pat­ents on inventions resulting from gov­ernment research and development contracts. And that policy should re­quire government agencies to take title to all inventions arising from government R&D contracts or proj­ects supported in significant part by government funds. However, the ad­ministrator of an agency should have wide latitude to waive the Govern­ment's right to title to inventions ready to reduce to practice, if this seems to be in the public interest.

This is the position taken by Lee Loevinger, head of the Justice Depart­ment's antitrust division, at hearings before the Patent Subcommittee of the House Committee on Science and Astronautics. The committee is con­sidering H.R. 1934, a bill which would amend the patent provisions of the Space Act. Under present law the National Aeronautics and Space Ad­ministration must take title to all patents on inventions made under its R&D contracts, but the administrator of NASA may waive these rights if he thinks it advisable.

H.R. 1934 would change the law to permit NASA to follow the De­fense Department's patent policy, whereby the contractor keeps all pat­ent rights but grants the Government a royalty-free license to use the in­vention.

The policy of giving the contractor the patent rights to inventions con­ceived under government R&D con­tracts encourages concentrations of monopoly power, Mr. Loevinger says. In the current atmosphere of urgency, he says, R&D contracts go largely to those firms already far advanced in private commercial research in the fields affected. Many of these con­

tractors are already the commercial leaders in their respective fields. Giv­ing such firms additional patent rights tends to consolidate their already dom­inant positions and makes their pre­ferred status in new and important industries even more immune to competition than it now is.

Under the proposed title policy, the agency administrator would de­termine at the time a patent appli­cation is filed whether the public in­terest would best be served by waiving title to the invention. Since the in­vention is already in being, Mr. Loev­inger says, this permits the administra­tor to make a reasonable judgment as to whether the public interest re­quires waiver.

On the other hand, he points out, under the license policy, authority for the contractor to take title to inven­tions is written into the original con­tract before any inventions have been made. Says he, "It is thus impossible to make any intelligent judgment as to whether private ownership of the inventions is necessary for their maximum exploitation. Title is being relinquished without any reliable in­formation as to what is being given away."

Destroy Patent System. Some com­mittee members charge that the proposed title policy would destroy the patent 'system. But Mr. Loevinger denies this. The title policy, he says, does not take away industry's statutory right to its patents but pro­tects the Government's investment in research and permits the Government to retain title to inventions when this seems to be in the best interests of the people. "It would be paradoxical to tax the public to raise funds for scientific research, on the premise that this research advances the general good, and then give the results to a private company for exclusive com­mercial exploitation," he argues. But committee members seemed uncon­vinced by this explanation.

The Administration is trying to work out a recommendation on a federal patent policy that will meet the approval of all government agencies, Deputy Attorney General Byron R. White told the committee. Over the past few months a series of meetings has been held with all gov­ernment agencies involved, but no agreement has been reached. As it stands now, he says, each agency would like to see its own patent policy adopted as the national standard.

36 C & E N FEB. 12, 1962