SEARLE ADOPTS ONE-PRICE POLICY FOR RETAIL PACKAGES TO HOSPITALS, WHSLRS.

Executive Summary

Searle initiated a single pricing policy for hospitals and whslrs. in early October for retail trade packages as an anti-diversion move. The company said in an Oct. 21 press release that bidding will continue for products packaged or labeled exclusively for hospital use, such as unit dose and injectables. "We are making the move in response to concerns expressed by our pharmacy customers over the effects of multi-level pricing," Searle explained. "This is an attempt to remove incentives for diversion of Searle products." One of the avenues for drug diversion is through nonprofit hospitals, which have been able to resell discounted Rx drugs back into distribution channels. At its first hearing on drug diversion and counterfeiting held in July, the House Commerce/Oversight Subcmte. stated that "an entire industry has sprung up whose sole purpose appears to be to solicit nonprofit hospitals to purchase excess pharmaceuticals using their special discount, which products are then immediately resold to the broker or whslr. for ultimate resale to a retailer" ("The Pink Sheet" July 15, p. 6). Searle's one-price program for retail packages comes close to the pricing changes sought by the Natl. Assn. of Retail Druggists (NARD). That group has been active in support of the House hearings on diversion and has been pushing for a legislated change which would prevent price differentials between the retail trade and institutions (except for charitable institutions). At the recent NARD annual meeting in New York City, NARD Exec VP Charles West told an Oct. 21 press conference that the assn. was "very confident" of success in reforming the pricing system. Asked when the changes would come, West replied: "This year." He noted that it might not be a "total solution . . . but we will make so much headway this year that we could certainly declare victory."