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one in 1 39 7 senators. And this matters. Ladies and gentlemen, one of the problems that has concerned your senator coming from Florida because Florida has such a high percentage of elderly people and people who need to have medical attention has been this high cost of drugs.

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And I was privileged to go before Senator Keep Offers committee about a month ago and become the first witness protesting the high cost of drugs. I thought it would be interesting to all of you to have a visit with me with the General Council of the Keep Offer Committee.

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Mr. Rand Dixon, a former law school graduate of the University of Florida and a very good friend of mine, who will ask him some questions. And he can tell us more in detail what this problem is all about Around, Uh, But I ask you, have you people satisfied yourselves that the cost of drugs are higher than they should be Santa?

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Before I answer that, I want to tell you how appreciative that I know the members of the subcommittee were for your appearance before the subcommittee and for your interest in this subject. Yes, sir. I'll tell you what, we have some of the things we have found out.

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For instance, referring to this chart right behind us here you have noticed that this depicts a comparison of rates of return after taxes in selected industries for the year 1957. Now, these weren't figures that we dreamed up. These were figures that this chart was devised and developed with the Federal Trade Commission.

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It is in the series of the regular quarterly reports that they make to the public your memories in this left hand column or a list of industries. The highest Uh huh. One on this chart is the drug industry. The greatest rate of return after taxes is enjoyed by the drug industry.

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They enjoy 21 4% return on their on their invested capital and now the old manufacturing level, or averages only 11%. So you can see that in this this industry that we're talking about injures practically twice the profits that other industries. And let me ask you this, Why is that How how has it happened that they do get such high prices and can maintain such high prices?

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But you know how Subcommittee has been wrestling with the problem of prices several years. And when we entered into this investigation, we had evidence presented to us that indicated there was a high degree of control here. There was a there was very little competition. And it is that that we're examining into to see if there are any forces of competition here.

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All right, Now you have a chart here, which will show us, uh, pull that off right there. Uh, here are some specific. Now, what does this tell us about this chart? Now? This chart came in our first series of hearings at which you were the first witness we within examining the drugs used in the treatment of arthritis.

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One of those products is prednisone. Now, Peterson is a very desirable product for the treatment of arthritis. The three large manufacturers of prednisone here on this charge, it has shown that they charged the druggist of $17.90 405 mg tablets of this product, whereas small manufacturers charge lower prices.

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For instance, the Physicians drug and supply company, a reputable small manufacturer, sells the same product for $4 to the drug is. And how did it happen. If these people can do this, how does it happen? Making get such a high price for that? Well, upon the public standpoint, this seems to be the way that is explained.

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The large manufacturers have economic resources by which they can use for the promotion to the doctor, to persuade the doctor that they have a superior product and that the doctor should prescribe that product by trade lead. So when the public gets a prescription and goes to the drug is by state law, the druggist can't substitute a lower product, a lower price product.

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You don't, however, think the doctors themselves have any part in this high price, especially because they have been sold The idea that that is the best product to you. I think if you and I were the doctor, we'd be doing the same thing because we'd be interested in trying to prescribe the best medicine for our patients.

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And one last question. Do you think you'll be able as a result of these hearings to lower the prices of drug Senator, this is this is a jungle, but certainly there are some important questions on how patterns are you can you just say yes or no on that?

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I think that's certainly something can be done. Thank you very much. Ran Dixon. Thank you much, ladies and gentlemen, for looking. And I hope you're looking again at the same time next week.