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Testimony on- Over the Counter Pharmacy Sales

INTRODUCTION

The Food Marketing Institute (FMI), on behalf of the nation’s supermarkets and grocery stores, appreciates the opportunity to provide testimony to the House Judiciary Subcommittee on Crime, Terrorism and Homeland Security in response to the issue of methamphetamine abuse in the United States and legislation that is designed to combat the problem.

By way of background, FMI is a national trade association that conducts programs in research, education, industry relations and public affairs on behalf of its 1,500 member companies—food retailers and wholesalers—in the United States and around the world. FMI’s members operate approximately 26,000 retail food stores with combined annual sales of $340 billion –three quarters of all food retail store sales in the United States. FMI’s retail membership is composed of large multi-state chains, regional companies and independent grocery stores. Our international membership includes some 200 companies from 50 foreign countries.

As reflected in our testimony presented by Joseph R. Heerens, Senior Vice President, Government Affairs, Marsh Supermarkets, Inc., before the House Government Reform Subcommittee on Criminal Justice, Drug Policy and Human Resources on November 18, 2004, the supermarket industry fully understands the magnitude of the methamphetamine problem here in America, and we also recognize the sad fact that legitimate cough and cold products containing the ingredient pseudoephedrine (PSE) are used to make methamphetamine.

According to law enforcement sources, legitimate PSE products either purchased or stolen from retail stores account for approximately 20 percent of methamphetamine that is made domestically here in the United States, whereas the lion’s share of meth found in this country, an estimated 80 percent, comes from foreign sources, primarily super labs located in Mexico. Thus, it is FMI’s view that to effectively address the methamphetamine problem we need a comprehensive strategy and partnership between law enforcement, regulatory agencies, OTC manufacturers and the retail community.

SCHEDULE V – SUPERMARKET CONCERNS

The supermarket industry has serious concerns and misgivings over recent initiatives that have been enacted into law at the state level and pending federal legislation (S. 103 – H. R. 314) that impose stringent controls on precursor chemicals at the retail level. We are referring to what is called the Oklahoma model that relegates PSE products to Schedule V status. Under this approach, only retail stores that have a pharmacy department are allowed to sell these OTC medications, and these items must be kept behind the pharmacy counter.

Without question, Schedule V is very troublesome to our industry. That’s because an overwhelming majority of grocery stores doing business in the United States don’t have a pharmacy department and would be precluded from selling PSE products. For those supermarkets that do have a pharmacy department, store hours are quite different from hours of operation in the pharmacy department. For example, while supermarkets may be opened from 7:00 am to 11:00 pm, the pharmacy department operates on an abbreviated schedule and may only be open from 9:00 am to 9:00 pm weeks days, 9:00 am to 7:00 pm on Saturday and 11:00 am to 5:00 pm on Sundays. Thus, even though the grocery store is open for business, if the pharmacy department is not open, or if the pharmacist is not on duty, PSE product sales would not be permitted.

IMPACT ON CONSUMERS

The end result under the rigid Schedule V approach is a dramatic reduction in consumer access to cough and cold medications depending upon whether their local grocery store has a pharmacy department and what hours the pharmacy department is opened on a particular day. For consumers living in rural areas or in inner city communities, Schedule V can create major hardships if the nearest pharmacy is 15 to 20 miles from their home or if the person is elderly or poor and would have to rely on public transportation in order to get to a pharmacy to purchase PSE products.

FMI along with the National Consumers League (NCL) gauged consumer opinion and views on sales restrictions of PSE products in a national survey that was released in April of 2005. What the FMI-NCL survey found is rather revealing. Forty four percent of the 2,900 adult survey respondents felt that Schedule V would create a hardship for them, while 62 percent said they did not believe that restricting sales of PSE products to pharmacies is a reasonable measure for controlling meth production. In stark contrast, the survey respondents were far more receptive to less severe restrictions to Schedule V, such as placing cough cold and allergy products behind a counter, not a pharmacy counter, or placing them in a locked display case. Additionally, more than 80 percent of the survey participants expressed support for limiting the quantity of such products that individuals can purchase, and 74 percent said it would be reasonable to restrict the age of purchasers.

For the above mentioned reasons, FMI and our members cannot support a Schedule V classification for cough and cold products containing pseudoephedrine. Schedule V clearly poses significant problems for consumers who have legitimate needs for these medications to treat their allergies, coughs and colds. Schedule V means reduced consumer access and hardship because their nearby grocery store, which they visit 2.2 times per week, won’t be allowed to sell these items. FMI further suspects that Schedule V may mean higher prices as PSE products move from self-service to behind the pharmacy counter, where the pharmacist, a highly salaried professional, will be required to ask for photo identification and have the customer sign a log book. While our industry applauds the hard work of the law enforcement community in their efforts against the methamphetamine plague, we do not believe Schedule V is the right solution.

COMBAT METH ACT OF 2005 IS FLAWED

In terms of pending federal legislation, the Combat Meth Act of 2005 (S. 103) approved by the Senate on September 9, 2005, as part of the FY 2006 Commerce/Justice Appropriations, FMI firmly believes that this proposal is both deficient and flawed, and in need of significant revisions. The following are the deficiencies and flaws that we see in this legislation:

• S. 103 fails to provide for a national standard governing the sale of PSE products. Methamphetamine is a nationwide problem that necessitates a national solution. Regrettably, S. 103 allows states and well as localities to establish different restrictions on the sale of PSE products, making compliance by retailers more difficult and complicated.
• The Combat Meth Act of 2005 does not exempt liquids and gel caps even though every state Schedule V law regulating the sale of PSE products exempts liquids and gel caps.
• Unless the Combat Meth Act of 2005 is amended, it will trigger a “by prescription only” requirement in as many as 19 states. This would mean consumers would have to get a prescription from their doctor in order to purchase PSE products. As a result, a product that normally sells for about $6.00 at retail will now cost close to $60 when you factor in the physician office visit charge.
• Moreover, the Schedule V provisions in S. 103 will force grocery warehouses and distribution centers that handle PSE products to apply for a Controlled Substances Registrant license from the Drug Enforcement Administration (DEA). This will entail higher licensing fees and new regulatory burdens for these facilities. Imposing Schedule V requirements and costs on warehouses and distribution centers makes no sense since these facilities are not a source of supply for meth cooks.
• S. 103 is too narrow. It only addresses 20 percent of the problem in terms of domestic meth production resulting from PSE products that have been obtained or stolen from retail stores. S. 103 does nothing to address 80 percent of methamphetamine that finds its way into the United States from foreign countries.
• The Combat Meth Act of 2005 dramatically and unfairly reduces consumer access to cough and cold products by limiting their sale to stores that have a pharmacy. PSE products would have to be placed behind a pharmacy counter. Moreover, due to space limitations in the pharmacy, retailers will not be able to carry and offer for sale the wide variety of PSE medications that consumers want or need, and because these products will be behind the pharmacy counter, consumers will no longer have the opportunity read and compare product labels.
• The Combat Meth Act of 2005 limits purchasers to no more than 7.5 grams within a 30-day period. This arbitrary limit may be unfair to a family with allergy problems or a parent with several sick children who has a legitimate need for more than 7.5 grams within a 30-day period.
• S. 103 is cavalier in its treatment of internet sales and flea markets. The legislation allows but does not require the Attorney General to promulgate regulations governing the sale of PSE products over the Internet. Furthermore,
  S. 103 has no provisions relating to flea markets which routinely sell PSE products that in most cases have been stolen from retail stores by organized theft gangs. Flea markets should be precluded from selling PSE products unless these transient vendors have written authorization or appropriate business records from the manufacturer.
• S. 103 allows stores without a pharmacy department to sell PSE products under very limited circumstances. The exemption process is so complicated and convoluted involving both state and federal agencies. It is our view that very few exemptions will be granted and they will not be granted in a timely fashion.
• The implementation dates for Schedule V are unrealistic. For example, single ingredient PSE products would be placed in Schedule V 90-days after enactment and retailers would be required to maintain a log book. It is highly unlikely that the Department of Justice (DOJ) would be able to promulgate necessary regulations in 90-days to tell retailers how to comply with the law.

FMI SUPPORTS METH EPIDEMIC ELIMINATION ACT

FMI wishes to express our industry’s support for the Meth Epidemic Elimination Act   (H. R. 3889) that has been introduced by Representatives James Sensenbrenner (R-WI), Mark Souder (R-IN), Chairman Howard Coble (R-NC) and Roy Blunt (R-MO). Unlike the narrow focus of the Combat Meth Act of 2005, this initiative seeks to address the methamphetamine problem in a comprehensive manner. The legislation is multi-faceted with provisions that would establish domestic as well as international regulation of precursor chemicals while providing for more severe penalties for methamphetamine production, possession or trafficking.

In expressing our industry’s support for the Meth Epidemic Elimination Act, we would urge the Subcommittee to make the following changes:

• Amend the bill to include strong federal pre-emption language governing the sale the PSE products in order to facilitate retailer compliance, or at the very least prohibit local communities from implementing restrictions that are different from sales restrictions that have been established by a state.
• Revise the legislation from a 3.6 gram per single transaction to 6 grams per transaction.
• Establish a ban on Internet sales of precursor chemicals.
• Prohibit flea markets from selling PSE products as well as infant formula unless these transient vendors have written authorization from the manufacturer.

FMI, on behalf of the nation’s supermarket, appreciates the opportunity to provide testimony on this important issue to the Subcommittee.