Mr. KARL. Right. They would openly talk about using the drug, and they would openly trade it in the streets.

Many nights that we walked and drove up and down the streets, you could see people make deals out of paper bags. And they would openly talk about it. And the surprising thing that I think was an amazement to the crew that was with me on most occasions was that the people that were using the drugs, they knew a lot about the component itself and how much their system would tolerate on the mixture.

And they seem to know a lot about the drug itself.

Mr. NELLIS. Do they indicate to you that their sources of supply were those that you indicated here—namely, unscrupulous physicians that would prescribe and pharmacists that would fill these prescriptions indiscriminately?

Mr. KARL. They said they do get it on the street at will and that they mentioned the doctors who were writing scripts. They mentioned pharmacies who were passing it out.

And as I pointed out, on several occasions, there were people who literally were fighting for control to distribute T's and Blue's on the street.

Subsequently, as Mr. Bensinger pointed out, there have been a lot of raids on various apartment houses, people who were just dealing these things right out of their front door. They picked up, you know, thousands and thousands of dollars in cash and hundreds of thousands of pills.

Mr. NELLIS. There is a lot of violence connected with this traffic that you recorded.

Mr. KARL. A lot of violence. As a matter of fact, we did a story, a follow-up type of story, where one of the raids took place, and a lot of people who were users were a little upset with us for exposing the problem to the point where the crew literally pulled me in the car and said, "Let's get out of here."

Mr. NELLIS. Isn't it incredible that a legitimate, ethical drug is now the subject of gang warfare on the streets of Chicago? Thank you, Mr. Karl.

Mr. MURPHY. Congresswoman Collins?

Mrs. COLLINS. Mr. Karl, let me say that I am very impressed by both the film and the job that you have done. I think you are certainly to be commended. And I associate myself with the remarks of all of those who have tipped their hats to you.

I think you have done a wonderful job. And we need to see a lot more of it.

I have just one more question. Were there any attempts to impede your investigation?

Mr. KARL. Impede by whom?

Mrs. COLLINS. By anybody.

Mr. KARL. No. The only thing that came up in our investigation at one time, some FDA officials said that the makers said there was a conspiracy between Channel 7 and ABC News along with DEA and FDA to have our series of reports coincide with Talwin hearings in February. That is just not true.

And on December 16 is the first time I ever heard of the drug combination. And we went on with our story when we had enough information together.

Mrs. COLLINS. You have heard talk this morning about some proposed steps to get this drug under better control. Do you agree with those or do you think more needs to be done, or can you suggest any other things we can do?

Mr. KARL. I can only speak for what happens in Chicago. What we say in Chicago, there is definitely a problem. And I saw a lot of frustrated policemen who were not able to take any type of action. I talked to a lot of Federal drug agents who were becoming more and more aware of the problem.

As you saw in part of the documentary, as a result of our documentary, we made this National Institute on Drug Abuse aware there was a problem. And when they started tracing it through their DAWN system, they started noticing it and picking up traces of it all over the country.

Mrs. COLLINS. Thank you very much. I'm sure those of us who are parents really owe you a debt of gratitude because this drug will not be on the streets as a result of your efforts.

Thank you.

Mr. MURPHY. Any other comments or questions from the panel? [No response.]

Again, Mr. Karl, our congratulations on a fine bit of investigative reporting to you and your station. And as both parents and as Members of Congress, we appreciate it. And hopefully as a result of these hearings today, when we get back to Washington, we will have some action taken with the classification of Talwin.

Mr. KARL. Thank you, Mr. Murphy.

Mr. MURPHY. The next witness is Richard Buckley, assistant to the director of the Illinois Department of Public Aid and Jeff Miller, the director of medical services.

Will both you gentlemen stand and raise your right hand? [The witnesses were sworn by Mr. Murphy.]

Would you identify yourselves for the record?

TESTIMONY OF JEFF MILLER, DIRECTOR OF MEDICAL SERVICES, ILLINOIS DEPARTMENT OF PUBLIC AID; ACCOMPANIED BY RICHARD BUCKLEY, ASSISTANT TO THE DIRECTOR

Mr. MILLER. I am Jeff Miller. And I am in charge of the medical assistance program of the Illinois Department of Public Aid.

Mr. BUCKLEY. My name is Dick Buckley. I am special assistant to the director of the department of public aid.

Mr. MURPHY. Without objection, gentlemen, your statements will be submitted to the record in whole. If you could summarize your statements, it would be appreciated.

Mr. MILLER. Thank you, Mr. Chairman. I will just make a few very brief remarks, and then answer any questions we can.

The Illinois medical program, for purposes of context is a $1.2 billion program. It funds for approximately 1 million eligible individuals virtually the entire range of medical services that people might need for inpatient hospital care through the services of individual physicians and dentists down to and including such items as pharmaceutical goods, prescription drugs.

The major purpose of the program is to do just that-provide medical access and medical care to people who need it and can't afford it. However, the program also has a responsibility for detecting fraud or abuse or abusive patterns of prescription and taking appropriate steps when they are discovered.

We first became concerned about the Talwin problem sometime during 1977. The concern stems from a large growth in the number of prescriptions that the program is paying for.

The drug component of this program is approximately $90 million a year. In 1976, we funded in the neighborhood of $400,000 worth of Talwin prescriptions that jumped to over $600,000 in 1977.

The concern was also evidenced by referrals from outside sources and by investigative reports such as the one you just saw. One source I should mention is the Illinois General Assembly's Legislative Advisory Committee on Public Assistance which brought the Mohawk Pharmacy to our attention. Our efforts were somewhat hampered in 1977 because the Illinois Supreme Court determined that public aid, acting under its statutes, had no authority to terminate providers from the medical assistance program or attempt to recover funds from providers once payments had been made and it was determined such payments were inappropriate.

And that decision now has been rectified. Once that decision was made finally in the courts, the Illinois General Assembly acted promptly in a special session and passed a bill signed into law on December 1, giving us precisely those powers.

In early 1978, as the Talwin problem became more and more evident, we took a series of steps, the results of which are not yet fully available, but let me share them with you.

We contacted the entire array, at least to the best of our knowledge, of Federal and State entities that have responsibility in the drug area, mentioning the problem and asking for their advice concerning whether steps should be taken to restrict its availability.

In that regard, let me say we supported fully the efforts, successful efforts, of the Illinois Dangerous Drugs Commission to have Talwin rescheduled so that it was more difficult to abuse it. Other steps we took, I guess the primary one worth mentioning is the initiation of a special project under which we have identified the 50 pharmacists and the 50 physicians with what appear to be the most abusive patterns of either prescribing or dispensing Talwin and PBZ.

We have reviews of those pharmacists and physicians still under way. The results are not yet available, although three of the pharmacists, we have included and have terminated. The balance are either under review or still in our hearing process within the department.

One other hopeful note that we have detected since March, the volume of prescriptions for Talwin and PBZ funded by this program has been reduced by more than 50 percent over the rate from last year and from the first 3 months of this year.

Mr. MURPHY. What was that rate last year, Mr. Miller? About how many pills would you say?

Mr. MILLER. They are included in the statement. They are in 1977, we had 112,000 prescriptions for Talwin at a cost of approximately $612,000. The rate is lower now.

I can provide those figures to the committee.

[The information referred to appears in the witnesses' response on p. 448.]

Mr. MURPHY. How many of those prescriptions would be related to an individual patient? What is the relationship there?

Mr. MILLER. Well, I don't have that figure with me. We have a capability of profiling the individual clients. It is not as sophisticated as we would like it to be, but it is a program with 1 million clients in it. So on that level, it is not alarming, but if you throw out all those who did not receive Talwin, it becomes alarming.

Mr. MURPHY. Thank you.

Mr. MILLER. I think beyond that, I will open myself up to questions except I would like to elaborate on one statement I just started to make.

While we made some progress in this area, we are well aware that our present system for capturing and analyzing data on the medical services that we fund under this program is inadequate. We have under way an effort that will cost approximately $4 million and will take 12 months to significantly enhance the capability of the department to analyze, profile individual practitioners, profile individual recipients, concerning the services dispensed or received.

That effort is being funded 90 percent by the Federal Government. We think that will help in our ability to more rapidly detect the kind of abuse that has been discussed this morning.

Mr. MURPHY. So in the years that this abuse was going on, I think you used 1976 and the early part of 1977, due to an Illinois Supreme Court case, you were unable to withhold the prescriptions through public aided recipients?

Mr. MILLER. We were unable to effectively take steps against providers once we had determined that they had inappropriately prescribed drugs. The ruling was based on the department statute, and the suggestion from reading the transcript of the court case was that where we felt a doctor was inappropriately prescribing drugs, our recourse was to refer that situation to the department of registration and education which is the licensing agency in Illinois.

Mr. MURPHY. Did you in fact refer any doctors to that licensing bureau?

Mr. MILLER. We did, and we still do. Our concern was that we wish to take action to get them out of the medicaid program without making that contingent upon the licensing action by the department of registration and education.

Mr. MURPHY. Counsel, do you have any questions?

Excuse me. First, the gentlelady, Mrs. Collins.

Mrs. COLLINS. What happened to the cases to which you referred? Mr. MILLER. I think the department of registration and education has removed a few licenses. And I also believe an individual from that agency will testify before this committee.

I should point out that the removal of the license is a more serious sanction than the removal of the authorization to participate in the medical assistance program. And it is for that reason we feel we should take action and then make referrals.

Not everyone who is removed from the medical assistance program should necessarily have their license revoked.

Mrs. COLLINS. Does the Department of Public Aid have any kind of regulatory steps to determine the legitimacy of a prescription?

Mr. MILLER. What we do is analyze the patterns of drugs that are dispensed. Where we uncover what appears to be either statistically or based on medical advice an abusive pattern, we document that and take it to a committee called the State medical advisory committee. It is comprised of physicians. They are not employees of the Department. They review that case and make a recommendation to us concerning the appropriate action.

If that recommendation is for termination, we then furnish the physician with a notice of our intent to terminate and afford him the opportunity for a hearing, due process hearing, prior to finalizing that action.

Mrs. COLLINS. How many doctors did you haul in when you found out this was a pattern? Did you charge any of those with inferior medical practices?

Mr. MILLER. We have, using the statute I alluded to earlier and prior to having that statute, terminated 127 providers. I don't have with me the number of those who were physicians, but I can furnish the number for the committee. I can furnish a breakdown.

Mrs. COLLINS. That would be interesting. Hospitals, physicians, so forth. May we request that for the record, please, Mr. Chairman? Mr. MURPHY. Mr. Miller, could you provide the committee with that at your convenience?

Mr. MILLER. We will be happy to furnish that.

[The information referred to appears in the witnesses' response on p. 448.]

Mrs. COLLINS. Thank you, Mr. Chairman.

Mr. MURPHY. Mr. Railsback?

Mr. RAILSBACK. May I ask, Mr. Miller, what triggered your interest in May of 1977? In other words, what triggered the action that you took?

Mr. MILLER. Well, we routinely analyze the patterns of expenditure under the program. As I indicated, the increase in the number of Talwin-PBZ prescriptions we were furnishing was alarming. But I think the actual special project I prescribed was May of 1978. It is currently going on where we singled out the 50 worst physicians and pharmacists.

And I should indicate one of the prime reasons for that was the kind of investigative reporting this committee just witnessed.

Mr. RAILSBACK. That is why I wondered if you had heard from the news media, channel 7, or some of the papers that covered the Talwin problem?

Mr. MILLER. I think the two key referral sources on this would be our own legislative committee, a committee of the general assembly, in effect, an oversight legislative advisory committee on public assistance, and investigative reporting.

Mr. RAILSBACK. May I ask a question so I can get a handle on this? Do I understand from your statement that the typical public aid recipient would come in, and in order to get the prescriptions would complain about a runny nose for the Pyribenzamine, and then complain about a back ailment? Did you find it was almost an automatic similarity?