A Louisiana drug firm official told Senate investigators Wednesday the firm's stockholders include 1,200 doctors, and that some of them had urged fellow physicians to favor the company's products in writing prescriptions for patients.
He identified one such doctor as dean of the medical school of Louisiana State University, Dr. William W. Frye.
but, said Dr. Angelo A. Massony of Westwego, he felt the doctor-stockholders would never write any prescription that was not in accord with sound medical practice.
Massony told a Senate antitrust subcommittee that he serves as secretary-treasurer without pay for Carrtone Laboratories of Metairie. I The subcommittee, headed by Sen. Philip A. Hart, D-Mich., is investigating whether doctor-owned pharmacies and drug distributing firms result in any restraint of trade through higher prices and freezing out products of competitors.
Massony said Carrtone has never made a profit since it was founded in 1958 and that he became a part-time official about a year ago in an effort to help salvage it.
Massony said he is not a member of the American Medical Association, but that most of Carrtone doctor-stockholders are members.
The AMA in a statement in Chicago said Tuesday it frowns on physicians having financial interests in drug repackaging firms, but approves doctor-owned pharmacies.
Subcommittee aides read letters from Dr. Frye, identified as former president of Carrtone, telling physicians that if they would "do a little bit more" for the firm, "the company would start making a sizable profit |immediately."
Massony said Frye is a member of the AMA.
(Dr. Frye was in Taiwan Wednesday, on a six-month sabbatical leave from LSU to direct a worldwide study of American foreign aid programs in the fields of medical education, research and development.)
Another drug firm official, James E. Johnson of Knoxville, Tenn., said his company has 87 physicians among its 150 stockholders and that sales in the Southeastern states last year totaled about $250,000.
He said only about 7 per cent of the sales of the firm, Southern/ Drug Co., are from prescrw tions written by doctor-stocp-holders.
