NCL's President, 
Linda F. Golodner,
Addresses the Korean Pharmaceutical Association

Hello, my name is Linda Golodner, and I am the President of the National Consumers League. I would like to thank the Korean Pharmaceutical Association and the Republic of Korea for inviting me to speak at this important symposium. It is an honor and a privilege to be here to present the consumer perspective on the American health care system, with specific emphasis on the role of pharmacists and pharmaceutical care.

Before I begin, I would like to take a few minutes to tell you about the National Consumers League and the work we do. NCL is the oldest consumer group in the United States, founded in 1899, we will celebrate our centennial, and the centennial of the whole consumer movement in America in 1999. It is a nonprofit, nongovernmental consumer advocacy organization with members and member organizations in all 50 states. We often meet with foreign visitors and exchange information with consumer, labor, and business groups from around the world, including the Republic of Korea. NCL's purpose is to protect and promote the economic and social interests of America's consumers. We are concerned that goods be produced and distributed and services be rendered not only at reasonable prices and in adequate quantity, but under fair, safe and healthy working conditions that foster quality products for consumers and a decent standard of living for workers. Our priority is to promote the welfare of those consumers and the public who are least able to protect themselves and enable them to better help themselves in the future.

Overview of the American Health Care System

Before I discuss the United States system, I would like to point out that what we call our health care "system" in the U.S. is not an integrated system such as the Korean National Health Insurance system, but actually groups of disjointed or fractured providers and payors. The federal and state governments provide about half of the medical care insurance, serving mainly as the primary financing mechanism for a fee-for-service and growing managed care delivery system. While managed care is increasing, fee-for-service medicine is still the main method for care, with over 80 percent of all care provided in this manner. Managed care combines the delivery and financing mechanisms under one entity, providing integrated care for patients, usually under a capitated payment arrangement. Managed care organizations or the doctors who contract with them receive a set fee for each patient, regardless of care, or they receive discounted fees in exchange for guaranteed business.

The federal government has three main health care systems run by three separate Departments of the Executive Branch: Health and Human Services (HHS), Veterans Affairs (VA), and Department of Defense (DOD).

The public system is run by the Department of Health and Human Services (HHS), of which Medicare and Medicaid are the main programs, and two military systems, one designed for veterans and the other for active military personnel.

Medicare is an entitlement for those over age 65, run and financed by the federal government, and Medicaid is a means-tested program for the poor run jointly by the federal government and the individual states. Most care in both programs is on a fee-for-service basis, with the governments reimbursing the doctors and hospitals directly. Both, especially Medicaid, are moving toward managed care to control spending.

The Department of Veterans Affairs runs a hospital system designed to provide direct services to America's wounded and disabled veterans of the armed services. There is a network of VA hospitals throughout the United States where veterans can go to receive care. This is funded by general taxes and included in the budget of the Department of Veterans Affairs.

The Department of Defense (DOD) operates a health care system for all active military personnel at home and abroad. The VA and DOD systems are the closest thing America has to an integrated and unified health care system--one where both the services and finances are provided by the same entity--the federal government--with public taxes. Medicare also has aspects of a national health insurance system; however, its scope is limited to only one portion of the total population, and does not include some important expenses. For example, prescription drugs are not covered by the Medicare program. People receiving Medicare must pay for medicines out of their pocket. As a result of this fractured approach to health care coverage, More than 40 million Americans have no health insurance.

The private insurance system is highly fragmented as well. Only 60 percent of all workers have coverage through their place of business. It is voluntary, and some employers require a large portion of the premiums to be paid by employees. Some cover prescription drugs, others do not. Often, only the worker's health care is covered, leaving many children and spouses without insurance. Also, some employers offer no insurance coverage at all. In fact, of the more than 40 million uninsured, almost 60 percent are workers. Employment is not a guarantee of insurance. The "working poor," those who are mostly in service jobs, often do not have health insurance. For example, companies such as McDonald's do not provide health insurance for its employees. Domestic workers or those who are janitors, for another example, do not usually have coverage. They make too much money to qualify for Medicaid, but not enough to purchase coverage privately when their employers do not offer insurance.

The main reason that employer-based health insurance is declining is cost. Because health care costs continue to rise much faster than inflation, many companies, particularly small-to-medium-sized firms, can no longer afford to offer coverage for their workers. Or, if they do provide coverage, workers must now contribute more for premiums and other co-insurance costs. Out-of-pocket costs are rising, and many low-to-moderate income workers and their families cannot afford to pay for it.

As a result, many workers, while offered insurance, must turn it down and go without coverage. A new U.S. government study, recently published in the Journal Health Affairs finds that between 1987 and 1996, the percentage of all workers offered insurance grew to 75.4 percent from 72.4 percent but that the percentage of all workers holding insurance slipped to 60.4 percent, down from 63.9 percent. The authors of the study attribute this reluctance to buy insurance in part to the workers' difficulty in paying their share of the premiums. Health insurance premiums grew by 90 percent from 1987-1993, while wages for all workers rose only 28 percent, and wages stagnated for the lowest-paid workers.

Another issue that garners tremendous attention is the use of managed care. Health maintenance organizations (HMOs) and other managed care arrangements have been in existence since the early 1970's, but have only become popular in the last five to ten years. As health costs began to skyrocket in the 1980's, businesses, the government, and insurance companies looked for ways to control costs while still providing quality care. Managed care, which relies on capitated or discount payments to doctors and hospitals, usually in return for guaranteed business, was, and still is seen by many as the cure for America's health care problems. While managed care has been able to slow the growth of health care spending and costs, there are increasing concerns by many consumers and health advocates--including doctors, pharmacists, and other health care providers--over access and quality under the new managed care arrangement. Further, many economists argue that the recent savings from managed care are only one-time savings and that costs will once again rise. There is evidence of exactly this trend in the last year or so.

Managed care reverses the traditional fee-for-service health care paradigm in the United States. Under the fee-for-service system, doctors and hospitals drive the care decisions, and the insurance companies and the government followed and paid the bills. The incentive was to do more--more tests, more surgery, more services--with the doctors and hospitals being reimbursed directly and completely by the private insurance plans and the government.

The new way, however, has a new driver--cost! The incentive now is to do less. Less is more! Now, the insurance companies and the government are making the decisions and forcing the doctors and hospitals to accept whatever payments they say are acceptable. It has gone from a defined-benefit system to one of defined-contributions. Under a capitated payment arrangement, for example, where a health maintenance organization (one type of managed care) receives a set payment for each patient/customer regardless of the amount of care needed, the incentive is to provide less care. The assumption is that preventive and wellness services will be stressed, thus preventing illness or injury. Unfortunately, this has not always been the case, and there have been many stories about people being denied needed care by their HMO. Several studies have shown that restrictive formularies designed to control costs in managed care may actually increase health care costs, while lowering patient health and safety. A formulary, as you may know, is a restricted list of medicines from which a physician may chose and for which the program will pay.

A recent study by the Institute for Clinical Outcomes Research found that when managed care companies increased formulary restrictions for prescription drugs, there were more physician visits, more emergency room visits, and more hospitalizations, all of which increase medical costs. The study concluded that the way to control costs is to manage the quality of care, rather than the drug benefit.

Pharmacists are also placed in a dilema when a consumer brings a prescription to be filled with a brand name and the managed care organization will only cover a generic. This, of course, would suffice for many medicines, but for others, such as thyroid medications or drugs for hypertension, adverse drug events might occur.

History of American Health Reform Efforts

Health care reform is not a new topic in America. Ever since the turn of the century, there have been attempts to combine the health care delivery and financing mechanisms into a national, unified system. Each time the push for national health care has failed, however, significant incremental changes have come about as a result of these efforts. There are six major historical periods of U.S. health care reform:

• Progressive Era (early 1900's)

• New Deal (1929-1945)

• World War Two-Truman Era (1945-1955)

• Great Society Era (1960-1968)

• Reagan Counterrevolution (1980-1992)

• Clinton Health Care Reform (1992-)

The Progressive Era--In the early 1900's the United States was undergoing rapid economic and social change, characterized by massive immigration, industrialization and urbanization. This led to poor living conditions in many cities, with slums, tenement housing, poor sewage and water systems and filth. There were hazardous working conditions, sweatshops and child labor.

In response to these conditions, the American Association for Labor Legislation (AALL) was founded in 1906. The AALL was an advocate for worker's compensation insurance, and by 1912, began advocating for state systems of health insurance. At this same time, most of the major European countries, including Germany, Great Britain, Austria, and Hungary, had already adopted some form of tax-supported health insurance programs.

In America, there was strong opposition to a national health system from all sides: The labor movement, lead by Samuel Gompers, President of the American Federation of Labor (AFL), felt that it threatened individual freedom and organized labor. Labor unions provided basic health care services, and they used this as a way of attracting new members. A national system, they feared, would cause the AFL to lose members and be weakened.

The state medical societies feared losing their autonomy and lowering of physician incomes. Insurance companies, most notably, Metropolitan Life and Prudential, opposed it because it would have eliminated a large portion of their business.

Added to this opposition, the general public attitude of the time was that "sickness was a private affair," not a government responsibility. Finally, as the United States entered World War One, and anti-German sentiment grew, many saw national health insurance as "made in Germany." The German system was the model for the British system and many others in Europe. With W.W.I, the progressive movement began to decline as the economic prosperity of the U.S. grew. The Stock Market Crash of 1929 ended this era of postwar prosperity and ushered in the Great Depression.

Early in the Great Depression, Franklin Delano Roosevelt (FDR) was elected President of the United States, bringing with him a "New Deal." The New Deal period brought new attempts at health care reform.

During 1927-1932, the Committee on the Costs of Medical Care undertook a comprehensive study of medical care in the United States. Its final report documented a severe maldistribution of medical services and rising health care costs. Much like today's situation. It recommended more spending for public health care activities and community-based care, voluntary health insurance and some government spending.

In 1935, President Roosevelt's Committee on Economic Security developed the Social Security Act of 1935 (SSA). While the new SSA provided benefits for the unemployed, the retired, the elderly and others, it did not include medical benefits. Reformers within FDR's administration, some legislators, and health advocates began to shape a national health insurance proposal to address the lack of medical benefits. The proposal was met with great opposition. The American Medical Association (AMA) mounted a major publicity campaign against the proposal, calling it "socialized medicine." Organized labor had changed its stance, however, and now supported the proposal for national health insurance.

Once again, war broke out and American attention was diverted. World War Two brought some progress to the provision of health care. The federal government began to become more involved in the direct provision of medical care. It trained and equipped doctors, constructed hospitals, financed medical research projects, and provided free maternity care to the wives of servicemen as well as free medical care to all military personnel. This was the beginning of the VA and DOD systems I mentioned earlier.

After the war ended, President Truman moved the health care issue back to the center of the political debate. In 1945, he presented a National Health Plan to Congress. It included expansion of hospital and public health services, support for medical research and education, and a comprehensive health program. Congress was divided. Northern, urban Democrats supported it, while the more conservative, Southern, rural Democrats opposed such a broad plan and favoring means-tested approaches. Thus, the plan stalled.

Meanwhile, during the next ten years, there was tremendous growth in private, voluntary insurance plans. Blue Cross, which covered hospital insurance, and Blue Shield, which covered physician services, gradually expanded, supported by voluntary hospitals and unions. By 1955, over 60 percent of the U.S. population had some form of hospital insurance and 25 percent had medical insurance. Employers were increasingly being forced to pay a larger percentage of the costs of this insurance, so middle class support for national health insurance declined.

The country continued to prosper and expectations, both economic and social, began to rise. The Civil Rights Movement pushed for improved social, political and economic conditions for African Americans and for all the disenfranchised groups in America. As social concerns grew, so did the move to increase health care insurance. The elderly were the main population target. At that time, around 1960, the elderly were sicker, poorer, and less insured than any other adult group.

To combat this, the Kerr-Mills Act (1960) was passed. This was the precursor to Medicaid. It provided grants to states for vendor payments for medical care to welfare recipients under old age assistance and to the medically needy elderly. While a good idea, Kerr-Mills was poorly implemented--by 1962, only 28 states had a program. In 1961, President John F. Kennedy introduced a proposal for health insurance for the aged, the King-Anderson Bill. Like previous proposals, it was strongly opposed by the American Medical Association, the professional association for physicians, and died.

In 1964, the fourth major period began: President Lyndon Johnson's "Great Society" with his "War on Poverty." Medicaid and Medicare were established in 1965 as Titles 18 and 19 of the Social Security Act. This legislation was able to pass, where other attempts had failed because the private insurance industry, hospitals, and the AMA, combined with other businesses and advocacy groups all supported it. Seeing that it was inevitable, the hospitals, the private insurance industry, and the AMA made sure that the legislation favored them. They greatly influenced how this legislation was designed, persuading the government to agree to reimburse them directly based on services rendered, rather than on salaries, capitation, or global budgets. Until only recently, this has been the way the system has worked. Managed care is changing this now.

Shortly after Medicare and Medicaid were passed, health care costs began to rise rapidly. By 1969, the federal government spent 9.6 percent of its budget on health care, compared to only 4.8 percent in 1965. Health care costs continued to rise steadily during the 1970's and 1980's. During the 1970's, there was increased government regulation. States began to experiment with different methods to finance and deliver health care as these costs rose. In 1980, there was a radical shift. A definite reaction to all of the regulations and increased government spending for social insurance programs.

In 1980, Ronald Reagan, a Conservative Republican, was elected President on a platform of free market reforms, deregulation, and decreased federal government spending on social programs. During the "Reagan Revolution," the Republican Administration reversed many of the regulatory efforts of the 1970's. It allowed business, including the insurance companies, to set the standards from environmental waste hazards to the level of health insurance they would provide to their employees. This allowed insurance companies to move into the open market and set their own policies. As a result, many populations including the elderly, chronically ill and disabled, and the poor, lost access to private health insurance. They were either denied coverage because of pre-existing conditions, or they simply could not afford the high premium costs. The labor movement, which did not support Reagan or his programs, became shut out of the decision making process for health policy.

During the 1980's, large corporate dominance of health care increased. There were many mergers and large conglomerates formed. The move to managed care, run by large insurance companies, was beginning to reshape the health care picture.

The present situation, which began with the 1992 Presidential election, brought yet another attempt at health care reform. President Clinton's Health Security Act proposal, which called for mandatory health insurance purchased through regional managed care alliances, was vigorously opposed from nearly all sides. A national health system, a "single-payor" model was also introduced at this time, but was never taken seriously. Included in the many proposals before Congress was a provision for reimbursing pharmacists for pharmaceutical care, and the National Consumers League worked with the major pharmacists associations in a coalition. We held briefings before the Congress and testified before Congressional committees about the importance of pharmaceutical care.

Since 1994 and the failure of President Clinton's proposal, the trend has been toward incremental change, rather than the broad reforms proposed in the past. Two major steps to increasing health coverage for more Americans have recently been passed. The first, the Health Insurance Portability and Accountability Act of 1996 (HIPAA), sponsored by Senators Nancy Kassebaum and Edward Kennedy, allows workers to keep their insurance coverage even if they change jobs or move. The other main provision of the Act prevents insurance companies from denying coverage to an individual because of a pre-existing condition. While this Act will improve access to insurance coverage for many consumers, it does nothing to address the cost issue. Insurance companies are free to charge whatever they wish for their policies, making them unattainable for many.

The second major step recently taken is the Children's Health Insurance Initiative, which provides $24 billion to states to expand coverage for eligible children, either by expanding their current Medicaid programs or creating new programs altogether. Many states have already been experimenting with initiatives to expand insurance coverage to uninsured populations, mostly through the use of waivers to their Medicaid programs to use managed care.

Significant Developments in Food & Drug Legislation

Now that I have given you a history of health care reform, I would like to address some of the significant moments in drug and pharmaceutical legislation of the past century. Similar to the health reform efforts, drug laws have been shaped in incremental stages, and not coincidentally, these reforms have taken place along the same time line. The six major periods of health care reform efforts also saw the most food and drug reform efforts as well. The Food and Drug Administration (FDA) is the major oversight body for all food and drug policy in the United States. It inspects, approves or denies, and tests for efficacy and harmful effects, all foods except meat and poultry (which is regulated by the United States Department of Agriculture), and all drugs, medical devices and diagnostic tests. Thus, many of its significant stages of development include combined food and drug laws.

In 1820, the U.S. Pharmacopeia was established. It was the first compendium of standard drugs in the United States. In 1848, the Drug Importation Act was passed requiring U.S. Customs to inspect all imported drugs and prohibit the entry of adulterated drugs. This is the beginning of the focus on a safe drug supply and a recognition of the federal government's role in this cause.

1902--the Biologics Control Act is passed to ensure purity and safety of serums, vaccines, and similar products used to prevent or treat diseases in humans. In 1906, the other two major laws were enacted:

• The Food and Drugs Act of 1906, prohibited interstate commerce in misbranded and adulterated foods, drinks, or drugs. The National Consumers League was instrumental in getting this legislation passed.

• the Meat Inspection Act, passed the same day, was a reaction to he shocking disclosures by Upton Sinclair's book, the Jungle, which detailed the dangerous and highly unsanitary conditions of Chicago's meat packing industry. It also reacted to the many reports of poisonous preservatives and dyes in foods. And "cure-all" claims for worthless and dangerous patent medicines. The major components of this law are still in place today for our meat and poultry inspection.

The next major step taken was in 1911, with the passage of the Sherley Amendment. Previously, the U.S. Supreme Court ruled that the 1906 Food and Drugs Act did not prohibit false therapeutic claims, but only false and misleading statements about the ingredients or identity of a drug. This was a setback for consumers and drug safety advocates. The Sherley Amendment overcame this by prohibiting labeling medicines with false therapeutic claims intended to defraud consumers.

In 1927, another major enforcement step is taken with the establishment of the Food, Drug, and Insecticide Administration, a separate law enforcement agency. In 1930, its name is changed to the Food and Drug administration. During the next ten years, FDA is very proactive in the battle to reform food and drug laws. In 1933 it recommends a complete revision of the 1906 Food and Drug Act. This is met with opposition, launching a five-year legislative battle.

In 1938, the battle is won by reformers. The Federal Food, Drug, and Cosmetic Act of 1938 is passed by Congress. It contains many new provisions designed to protect the safety of consumers.

• Extends control to cosmetics and therapeutic devices

• Requires new drugs to be shown safe before marketing-starting a new system of drug regulation

• provides that safe tolerances be set for unavoidable poisonous substances

• Authorizes standards of identity, quality, an fill-of container for foods

• Authorizes factory inspection

During the 1940's, the FDA began to focus on specific drugs and products. It requires testing and certification of purity, potency, and safety and effectiveness of Insulin (1941) and Penicillin (1945), and later extends this requirement to all antibiotics.

In 1951 a major piece of legislation is passed, one that drastically alters the dispensing of drugs and control over those drugs. The Durham-Humphrey Amendment defines the kinds of drugs that cannot be used without medical supervision and restricts their sale to prescription by a licensed practitioner. This effectively separates drugs into two categories: nonprescription (over-the-counter), and prescription, and separates the role of pharmacists and doctors. Pharmacists no longer have power to prescribe prescription drugs, and doctors no longer can dispense these drugs from their offices. Consumers must now go to two separate places to obtain prescription drugs--to the doctor for the prescription, and to the pharmacist, or pharmacy, to purchase and pick-up the drugs. It is a system of checks and balances.

The 1950's saw a great deal of legislation directed toward food and pesticide issues, with the FDA taking a more active role in ensuring food safety and requiring manufacturers to establish safety guidelines. These actions lead to legislation that requires drug manufacturers to prove their products are safe. The Kefauver-Harris Drug Amendments require for the first time that drug manufacturers prove to the FDA the effectiveness and safety of their products before marketing them. This is a major step for consumer protection. Another big consumer protection step comes in 1966, with the passage of the Fair Packaging and Labeling Act. This Act requires all consumer products in interstate commerce to be honestly and informatively labeled, with FDA enforcing provisions on drugs, cosmetics, and medical devices. Until this year, there has been very little major legislation or regulations regarding FDA and drugs.

Last month, Congress passed the FDA Reform Bill, which will significantly change much of how FDA operates. While this bill still has many details to be worked out, there are some major provisions that effect drug safety and consumers. Under this new reform, drugs will be approved faster--drug companies only have to show significant effectiveness of a drug for approval; for example, that it shrinks a tumor or reduces traces of viral infection in the case of HIV/AIDS. Previously, they had to prove it enabled patients to live longer or the drug reduced symptoms.

Another new provision is the allowance of "off-label" uses of drugs. "Off-label" means that a drug has not been approved forthe specific use for which it is being prescribed. Now, manufacturers can promote, and doctors may prescribe, drugs for uses other than those they were originally intended and approved. This may have a significant impact on consumers, particularly from a safety standpoint. For example, two of the worst drug disasters in United States history, diethylstilbestrol (DES) use for threatened abortion and the Class I antiarrhythmic drugs for non-life-threatening cardiac arrythmias, can be traced, in part, to these drugs beingprescribed for off-label use. The National Consumers League feels that consumers have a right to be fully informed about their drugs, including giving their informed consent when a drug is prescribed for an off-label use.

Pharmaceutical Care

Now that you have an overview of the history of American Health care, I want to talk about an issue that is closer to your hearts--pharmaceutical care. What do I mean when I say "pharmaceutical care?" I mean a system where the pharmacist is actively involved in patient care, consulting with doctors about the right medications, interacting with the patients, asking them about their medical history, knowing what medications they are taking, and serving as a resource for medical and health information to consumers.

It used to be common for the local pharmacist, at the neighborhood drug store, to be the first line of information and consultation when someone got sick or had questions regarding a health or medical problem. Unfortunately, this practice has changed to a system where personalized attention is sacrificed for convenience and lower costs. Of the total number of active pharmacists in the United States, (179,445) 73.6 percent are employees, compared to 2.7 percent who are the employer, and only 9.6 percent who are self-employed.

Pharmacists play a key role not only in dispensing medications, but also in dispensing advice that helps consumers make informed choices about health care decisions. In other words, pharmaceutical care is not just filling prescriptions and stuffing a piece of paper with instructions into a bag if it is filled by mail order, it is interaction with patients, including follow-up. It is outcome-oriented and intended to promote better health, disease prevention, and prevention of medication errors and therapeutic mistakes.

Practice settings have changed. The pharmacists who are employees may work for a large company such as a chain drug store or a grocery store that has a pharmacy. They could also work for a discount store, one that would sell everything from tools to fix your home to clothing as well as medicines. Often pharmacists will work in hospitals or nursing homes as part of a team of health professionals caring for the patient. Unfortunately, when pharmacists work in some of the fast-paced settings such as a large chain drug store with many, many prescriptions to fill in a day, there is little time to practice good pharmacist care. The emphasis is on filling as many prescriptions as possible in an hour and not interacting with the patient.

In 1990 a law was enacted in Congress that pharmacists must counsel Medicare patients when they receive prescriptions. This has been expanded in several states to include all patients. The law is not enforced, however, and many patients go without any meaningful instruction on how to take their medicine, what possible interactions there may be with foods or other medications, what side effects to expect, and any warnings about when the consumer should call a physician because of adverse drug events.

Because consumers have not be getting good information from their physician or pharmacist, the Department of Health and Human Services last year was instructed to bring together a steering committee made up of health professionals, business, and consumers to develop a plan for consumers to receive useful written information when they receive their presription medication. Pharmacist organizations opposed the idea that consumers should receive written information. And when the steering committee met (the National Consumers League was a member of this committee) made it quite clear that both written and oral information must be provided to the consumer. We certainly agreed and have been working with pharmacists organizations to develop guidelines and to implement this concept thoughout the health care system.

Pharmaceutical care is also about education--disease -specific and general health information, including training sessions and self-care consulting. It involves case management, drug monitoring, diagnostic testing, and giving injections and vaccines. Thus, it is a vital component in any total health care system. Unfortunately, it has not been viewed that way, both inside the profession and outside, by doctors, legislators, and the insurance industry. Recently, however, that is changing.

Several states are now experimenting with various pharmaceutical care models, including financing and reimbursement for these services. Additionally, 22 states allow pharmacists to actively administer immunizations and vaccines (AL, AK, AS, CA, GA, IL, IN, IA, KS, KT, MI, MS, MO, NE, NM, OK, SC, SD, TN, TX, VA, WA). And in some states pharmacists can prescribe.

Physicians have always dispensed some drugs as part of the practice of medicine. However, this practice has attracted more attention lately because an increasing number of physicians are dispensing, often at profit, the drugs they prescribe for their patients. The practice has grown as the nation's health system becomes increasingly competitive and cost-conscious, and has been encouraged by the drug repackaging industry which emerged during the early to mid-1980s.

Drug repackagers buy and then repackage commonly prescribed drugs into convenient, "patient ready" doses for physicians to sell directly to their patients. They have sought to capitalize on the increasingly competitive health care environment by encouraging physicians to dispense the drugs they prescribe. Repackagers have cited advantages of convenience to patients and improved quality of patient care from office-based dispensing, but some of them have promoted dispensing to physicians as a highly lucrative source of additional income.

Physician Dispensing of Presecription Drugs: Pros and Cons

The prospect of increasing numbers of physicians routinely dispensing drugs for profit has captured the attention of pharmacy, consumer, and medical groups as well as the state and federal governments. Heated debate about the practice is being waged at both the state and national government levels over the complex variety of ethical, economic, public health, and regulatory issues related to the practice. Is it a conflict of interest for doctors to sell the prescription drugs they prescribe? Is the quality of patient care enhanced or harmed by physician dispensing? Does the practice promote or restrain competition? What kind of regulation, if any, should be put into place, and at what level--state-by-state or a federal code? Finally, is the practice good or bad for the consumer? These are the main questions that must be asked and addressed.

Of course, there are already many differing opinions from both sides of this issue. The argument is usually framed as an adversarial one with physicians on one side and pharmacists on the other, and both sides claiming that they have the patients' best interests in mind. Those in favor of physician dispensing make several claims as to why they should dispense prescription drugs:

• Better patient relations--Increased convenience since patients don't have to make extra trips to the pharmacy to get their prescriptions filled. This is a particular issue for the elderly and parents with small children.

• Cost Savings--Physicians claim they can offer lower prices, eliminating middlemen and keeping the mark-up to a minimum.

• Improved Therapeutic Alliance--Helps with compliance and ensures that the prescription is filled. Less chance of miscommunication between doctor and pharmacists as well as increased discussion about side effects, indications, directions, and other important information about the drugs.

• Refill Control--Better monitoring of the patient by the physician to protect against abuse.

On the other side of the issue, pharmacists have several claims as to why there should be a separation between the prescribing and dispensing:

• Conflict of Interest--Doctors who have a monetary interest in the products they prescribe may over prescribe them or prescribe the drugs most convenient to them (the ones they have in stock), rather than the best drug for the patient's medical condition.

• Checks and Balances--there needs to be a separation in order to prevent and detect mistakes and errors that a physician may make. Pharmacists are alerted to possible drug interactions or improper prescriptions.

• Cost--The existence of many pharmacies in most areas fosters price competition and keeps prices down. It also allows consumers to shop around and compare prices--something they are not able to do if their doctor dispenses.

• Convenience--Pharmacy locations and store hours are designed for consumer convenience. Most physician office hours are limited and don't provide access to consumer needs.

• More selection of medications--Most pharmacies stock over 2,000 prescription drugs and can readily obtain thousands more. Physicians who dispense medications generally carry less than 100 types of prepackaged drugs.

Nearly all states have some type of regulation governing the dispensing of drugs by physicians. 43 states allow physicians to dispense pharmaceuticals to their own patients without regard to quantity. Only six states place some sort of restriction on physician dispensing (Texas, Virginia, Utah, Arizona, New Hampshire, Massachusetts). There are five major types of regulatory requirements:

• Permit it only in limited situations (i.e., rural areas where no pharmaceutical access or in an emergency).

• Enable state agencies to identify dispensing physicians.

• Limits on profits on dispensed drugs.

• Protect freedom of choice for consumers.

• Impose procedural controls such as labeling and record keeping requirements.

These state regulation requirements are much less extensive than those regulating pharmacists and have minimal impact on physician practices. At the federal level, the Federal Trade Commission (FTC) endorses physician dispensing, claiming that it "increases service and price competition among practitioners, and between practitioners and pharmacists, to the benefit of consumers."The Federal Trade Commission is mostly concerned with increasing competition and consumer choice and costs. On this issue, they have not dealt with the issues of safety, ethics, and conflicts of interest, much to the dismay of pharmacists and others who oppose the practice.

Now that I have addressed what the doctors, pharmacists, and government regulators think, let's look at how the consumer feels about the issue. According to the results of a consumer survey done by the Roper organization, the American consumer prefers to buy prescription drugs in a pharmacy rather than at a doctor's office by nearly a 4 to 1 margin. 61 percent would prefer to buy their prescription drugs at a pharmacy, compared to only 16 percent who would prefer to buy them at a physician's office. By a 3 to 1 margin, consumers believe that there is a conflict of interest when a physician prescribes and sells these drugs to patients (62 % to 21%). Furthermore, 52 percent believe that a pharmacist is more knowledgeable than a physician regarding prescription drugs. In older patients, the percentage is even greater--68 percent.

While there seems to be a growing movement to physician dispensing of prescription drugs, with most state and the federal government's approval, consumers are hesitant to embrace this new trend.

Pharmacist Prescribing of Prescription Drugs: Pros and Cons

Now that we have explored physician dispensing of prescription drugs, let us explore the other side of the issue--pharmacists prescribing prescription drugs. Pharmacists have increasing opportunities to initiate or modify drug therapy--functions that will help support their growing roles as managers of patients' drug therapy. Eleven states have given pharmacists the authority to administer and initiate or modify drug therapy, usually working with physicians under established guidelines.

In addition, in March 1995 the Veterans Health Administration of the U.S. Department of Veterans Affairs (VA) issued a directive that allows appropriately trained pharmacists to prescribe medications within the scope of their practices. The policy was developed to provide consistency and maximum practice flexibility within the 171 Veterans Affairs Medical Centers. The policy signals a potentially larger role for pharmacists in managed care and health management. Many pharmacists feel that their role must expand if they are to function effectively in a managed care environment.

The majority of states that allow this practice require pharmacists to undergo additional clinical training or have extensive clinical experience. Pharmacists must follow specific guidelines or protocols that have been established. Currently, the majority of pharmacists who do prescribe are in clinical or institutional settings--hospitals, health clinics, and managed care organizations. Independent pharmacists have not embraced the practice quite yet. However, several states have recently expanded authority for pharmacist prescribing, most notably, California, New Mexico, and Nevada. Florida is the only state that allows pharmacists prescriptive authority independent from physician supervision, but the authority is restricted to a formulary of fewer than 50 drugs. They are seeking to expand this formulary, which would require additional training for pharmacists, but the expansion is still in discussion in the legislature.

With pharmacist prescriptive authority, many of the same issues and questions arise that are raised in the discussion over physician dispensing of drugs. First of all, pharmacists are divided over the issue, with many agreeing that most do not have adequate diagnostic and physical assessment training and are uncertain about what they can and cannot do. Some are unwilling to take on the added risk and responsibility. Community pharmacists are especially unlikely to become prescribers because they practice in isolated settings, often without access to patient records and medical data. Fewer than 1,000 pharmacy school graduates are trained well enough to prescribe medications.

Ethical problems and conflict-of-interest issues also arise. Just as physician dispensing disrupts the system of checks and balances between prescribing and dispensing, so too does pharmacist prescribing. The problem of over prescribing or prescribing certain drugs to make a profit is also something that has to be considered. Despite these problems, there have been several studies that show pharmacists add value to patient care when they practice pharmaceutical care.

Studies conducted in California, Texas, and Washington showed that pharmacist's care resulted in improved outcomes. Researchers found other benefits as well. Pharmacists could monitor patient drug therapy more intensively, increase patient satisfaction and convenience, and decrease the cost of patient care. Pharmacists can be more focused than physicians on compliance and patient education, areas that have a significant impact on patient outcomes and health care costs.

With the country moving toward managed care, more pharmacists will be in arenas where they may be granted the opportunities to prescribe, providing new career opportunities for them, and possibly better health and cost outcomes for the consumer.

Pharmaceutical Care Models

Let's take a look at some of these new models. In Iowa there are 40 pharmacists trained and positioned to deliver care in a project administered by the Blue Cross and Blue Shield of Iowa. These pharmacists will be compensated for providing asthma, diabetes, hypertension, and other services to "at risk" patients, as identified by the pharmacists. Minnesota has a similar project as well.

In Washington State, the Health Care Financing Administration (HCFA), the federal agency which runs Medicare and Medicaid, will pay the state for a demonstration project called "The Cognitive Activities and Reimbursement Effectiveness Project." It is designed to test a payments system for cognitive services for Medicaid patients in addition to the standard dispensing fee.

In New Jersey, the state legislature adopted a provision for coverage of diabetes and asthma education as a mandated health benefit in all private health insurance programs. State certified pharmacists who have completed adequate training in diabetes are eligible to bill for and collect compensation for diabetes education activities.

In Michigan, pharmacists have created a compliance program to help seniors take their weekly medicines. It involves organizing the prescriptions, indicating when and how to take them, and weekly counseling with the patients as well as their doctors or other primary caregivers if a problem is detected. Patients are billed on a monthly basis, with charges ranging from $4 to $6 a week.

In Wisconsin, pharmacists are being reimbursed for counseling Medicaid patients on drug compliance and other services. West Virginia has an innovative diabetes care payment system, and Mississippi, North Carolina, and Virginia are considering pharmacist care payment bills. With all of these new programs being enacted, the question we must ask is, are they effective? The answer is yes. They not only save money, they prevent increased morbidity and mortality among patients.

In a study published last year in the Archives of Internal Medicine, $76 billion can be saved in the United States if pharmacist care is fully implemented. Of that, $34 billion could be saved by providing consistent drug therapy management. $8.5 billion could be saved with better medication instruction. From a patient safety standpoint, these programs can contribute to fewer illnesses and hospitalizations. We can have up to 4 percent less adverse drug reactions. Today, 10 percent of hospitalization and surgeries are drug related, 57 percent of them are preventable.

In a Florida Hospital, data was collected on more than 3,000 patients in a year and found that health care teams that included a pharmacist has a shorter length of stay and lower drug costs per admission than a team without a pharmacist. This is a cost-effective method, with an average cost savings for these teams, including a pharmacist, of $377 per inpatient admission.

Another study conducted to determine if community pharmacists could affect total blood cholesterol of ambulatory patients through a program of education, consultation and cholesterol screening, patients had a significant serum cholesterol reduction where a pharmacist had intervened to teach patients the role of cholesterol in illness and health.

In a case study of 310 low-income urban children with asthma, there was a significant reduction in emergency room visits and hospitalizations during a year of follow-up conducted by pharmacists.

Therefore, it is clear that pharmaceutical care and pharmacists can, and do, play a significant role in health care. While we all know this to be true, there is still a long way to go before pharmaceutical care is commonly accepted and practiced, before it is included as a standard benefit in all health insurance policies, and before it is reimbursed. We must change attitudes--those of the public, of doctors, legislators, and of many pharmacists themselves.

In order to do this, pharmaceutical care must be well-defined, and an ideal model developed that pharmacists can strive to attain. I have already mentioned some of the parts of this model, but I feel that there are four main points that need to be included in any model of pharmaceutical care:

• Review of medical history and medications and development of a treatment plan in consultation with the physician.

• Regular interaction and dialogue with patient about treatment plan, including answering any questions about medications.

• Recommendation of any necessary changes to treatment plan.

• Follow-up with the patient and physician.

In a 1996 survey of random consumers, commissioned by the American Pharmaceutical Association, 15 percent of respondents said that their pharmacist already offered these services, and 69 percent said they would like their pharmacist to offer them. Survey respondents liked the follow-up and double checking of their prescriptions to help avoid mistakes and errors. While the majority of the people surveyed liked the idea, one out of four did not. They were concerned about privacy, and costs.

The ideal model needs to address the issues of privacy and cost. The physical environment of the pharmacists needs to change in order to accommodate better confidentiality. This includes who answers the phone when consumers call for medications, and who has access to a patient's records and medical history. Just as these are issues between doctors and patients, they are also issues between pharmacists and patients.

Drug Switching: Prescription to Over-The-Counter (OTC)--Consumer Responsibility

The role of the pharmacist has changed over the last 50 years, and it continues to change. Pharmacy's struggle to redefine its mission and ensure an expanded role in patient care is bringing resistance from doctors and from the drug industry. There are conflicts between doctors and pharmacists over who provides consumers with medical and health advice, and more importantly, who gets reimbursed for the service. Pharmacists are also losing ground as more prescription drugs are "switched" to nonprescription status. The issue of switching is becoming more of a focus now as more drugs are allowed to be purchased "over-the-counter," without a doctor's prescription or any other authorization or consultation.

Currently, there is an unprecedented number of drugs being switched from prescription to nonprescription status. Since 1972, 52 prescription ingredients or dosage strengths have been transferred by the Food and Drug Administration to nonprescription availability, according to the Nonprescription Drug Manufacturers Association. By expanding the range of conditions that can be treated with over-the-counter medicines, consumers can now take more control over their own health. At the same time, the role of pharmacists and doctors diminishes in the area of drug counseling. This is a serious concern. Just because these drugs have been declared safe enough to be nonprescripton, does not mean that there are no dangers or side effects that must be considered. Consumers must have adequate information about these drugs before taking them. This is where pharmacists can play a larger role. Since most of the over-the-counter drugs are still purchased at a pharmacy, the pharmacist has the chance to counsel the consumer and provide important and necessary information about drug interactions, proper dosages, and other concerns.

Some of the more common drugs that have switched recently include the heartburn medicines, cimetidine, marketed as Tagemet in the United States, and famotidine, or Pepcid AC; the pain reliever naproxon, called Aleve, Actron and Orudis KT; and Monoxidil, known as Rogaine, to treat baldness. In the United States consumers can also purchase ibuprofen and cold/flu relief medications that contain dosylamine succinate and dextromethorphan hydrobromide. The labeling for these medications include warnings and specific dosage requirements. But you should know that they are available for purchase without any intervention of a health professional. There are many other drugs also being considered by the Food and Drug Administration, and will most likely be switched in the next several years. These include lipid lowering medications and others that might include directions that the consumer must see a physician before taking the drug.

Consumers in the United States are taking more control of their health care decisions and are being forced into being more responsible because of the system of managed care. But this is not the only reason. Another is that information about medications and health is readily available through the Internet, through medical journals studies that are reported in the popular press, such as magazines and newspapers. Television shows -- both news reports and health focused programs -- are available to almost everyone. In addition, the Food and Drug Administration is reviewing its regulations regarding direct-to-consumer advertising of prescription drugs and other promotion by pharmaceutical companies. A guidance was issued this year by the FDA on advertising using television and radio. They are expected to issue further regulations on print advertising.

We have seen a 100% increase in such advertising in the past year. Pharmaceutical companies recognize that consumers are becoming an important factor in which drugs are prescribed by a physician. Some of the ads are very informative for consumers. Others border on misleading and confusing.

Pharmacists sometimes are cautious in their reaction to the availability of so much information for consumers. They say consumers are asking more questions but are often confused. The National Consumers League thinks this is a great opportunity as well as a challenge for pharmacists. It is an opportunity to open a meaningful dialogue with their patient so they can been understand their medications and take them safely and effectively.

Conclusion

In conclusion, I want to point out that health care is undergoing radical changes, both in the United States, here in Korea, and throughout the world. The National Consumers League is working to ensure that consumers remain the primary focus of any health care system that is developed or implemented. Doctors, pharmacists, politicians, and policy makers must not forget that the main objectives of health care are to prevent illness, and treat and where possible, cure illness when it does arise. As you have heard, there have been many struggles in the United States to achieve better protections for food and drugs, and more available and affordable access to quality health care. We believe a partnership between pharmacists and patients can improve health. These struggles continue, and the National Consumers League will continue to fight to improve health care around the world.