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Executive Summary

PMA's voluntary code to regulate drug sampling practices will eventually form the basis for legislation in Congress, PMA President Gerald Mossinghoff predicted in remarks to the National Wholesale Druggists' Association (NWDA) annual meeting, Nov. 1-5 in San Diego. Mossinghoff commented on House Energy & Commerce Cmte. Chairman Dingell's (D-Mich.) effort in the just-ended Congress to enact anti-drug diversion legislation, which included provisions on drug sampling. "PMA has adopted a sampling code which, when fully implemented, would go a long way to curb the abuses that were brought out during the Dingell hearing. Without question, the PMA code is a reaction to the Dingell hearing, and we think it is a good code, and the members will adopt it." "I personally believe that that code will end up being legislated in some form or another, with some teeth in it, by Dingell. The debate right now is the size and sharpness of those teeth." Dingell's legislative effort to get a comprehensive drug diversion bill through the 99th Congress came close to success, but finally collapsed when PMA objected to corporate penalty provisions for sampling abuses contained in the bill ("The Pink Sheet" Oct. 13, p. 3). PMA's voluntary code is based on stricter record keeping and monitoring of drug samples within individual companies, including an annual audit of inventory handled by sales representatives as drug samples ("The Pink Sheet" Oct. 6, T&G-7). Mossinghoff noted that "PMA wholeheartedly supports those portions of the Dingell bill having to do with diversion and the sale illegally of drugs sold to nonprofit [institutions] and improperly diverted into retail [channels]." He added that although the association finally rejected the Dingell package because of the penalties provision, "it was PMA and Chairman Dingell and Congressman Wyden (D-Oregon) who worked so hard right at the end of Congress. We didn't achieve a full compromise but we are still working with them." NWDA President Charles Trefrey, noting the change in the next Congress as a result of the electoral realignment in the Senate, commented that "we have a tough thing ahead of use on this bill. I think the teeth have been sharpened." Trefrey said that all groups involved in the drug diversion debate should be "in very close communication as we go forward in the new Congress, particularly on the Senate side." Trefrey, Mossinghoff and four other Washington-based health professional and trade association leaders formed a panel to discuss key "inside the beltway" issues. Other association leaders on the panel were: NARD's Charles West, ASHP's Joseph Oddis, NACDS' Bob Bolger, and APhA's Jack Schlegel. The panel was moderated by Bergen Brunswig VP Jack Fay. In response to a question concerning the issue of differential pricing, Mossinghoff noted that PMA as an association does not take a position on members' price policies. West, however, said that differential pricing is the biggest factor in the drug diversion problem, while Bolger said that NACDS "understands the reason manufacturers offer their products to nonprofits at generous discounts." However, Bolger added, "we also recognize that preferential pricing is being highly abused to the extent that more and more products are going into the nonprofit market, which causes prices in retail stores to increase. We believe congressional adoption of the prescription drug marketing act is absolutely essential." Oddis, noting that he represents pharmacists who practice in nonprofit institutions which receive price discounts, said that ASHP supported all provisions of the Dingell bill, "including the bulk resale provision." He noted that ASHP "took official action on bulk resale even before the Dingell hearings started, so we want to clean up what has to be cleaned up." However, Oddis commented that focusing on pricing alone may not remedy the problem. I think what we need is to have equity in however the system evolves and get off of these trigger words. And to that extent we would even support a review of the nonprofit/ institutions act. But I don't believe that we will solve the problem of diversion by just attacking one element because it happens to pinch us personally."

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