[Federal Register Volume 59, Number 157 (Tuesday, August 16, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-20022]
[[Page Unknown]]
[Federal Register: August 16, 1994]
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FEDERAL TRADE COMMISSION
[Dkt. 9232]
Schering Corporation; Proposed Consent Agreement With Analysis To
Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed Consent Agreement.
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SUMMARY: In settlement of alleged violations of federal law prohibiting
unfair acts and practices and unfair methods of competition, this
consent agreement, accepted subject to final Commission approval, would
prohibit, among other things, a New Jersey manufacturer of the diet
product, Fibre Trim, from making any representation about the weight
loss benefits, nutrient content, or nutrient related health benefits of
any food, food supplement, or drug without competent and reliable
scientific evidence to substantiate the claim.
DATES: Comments must be received on or before October 17, 1994.
ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,
Room 159, 6th St. and Pa. Ave., NW., Washington, D.C. 20580.
FOR FURTHER INFORMATION CONTACT:
Theodore Hoppock or Susan Cohn, FTC/S-4002, Washington, D.C. 20580.
(202) 326-3087 or 326-3053.
SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 3.25(f) of
the Commission's Rules of Practice (16 CFR 3.25(f)), notice is hereby
given that the following consent agreement containing a consent order
to cease and desist, having been filed with and accepted, subject to
final approval, by the Commission, has been placed on the public record
for a period of sixty (60) days. Public comment is invited. Such
comments or views will be considered by the Commission and will be
available for inspection and copying at its principal office in
accordance with Section 4.9(b)(6)(ii) of the Commission's Rules of
Practice (16 CFR 4.9(b)(6)(ii)).
Agreement Containing Consent Order to Cease and Desist
In the Matter of Schering Corporation, a corporation. Docket No.
9232.
The agreement herein, by and between Schering Corporation, a
corporation, by its duly authorized officer, hereafter sometimes
referred to as respondent, and its attorney, and counsel for the
Federal Trade Commission, is entered into in accordance with the
Commission's Rule governing consent order procedures. In accordance
therewith the parties hereby agree that:
1. Respondent Schering Corporation is a corporation organized,
existing and doing business under and by virtue of the laws of the
State of New Jersey, with its office and principal place of business at
2000 Galloping Hill Road, Kenilworth, New Jersey, 07033.
2. Respondent has been served with a copy of the complaint issued
by the Federal Trade Commission charging it with violations of Sections
5(a) and 12 of the Federal Trade Commission Act, and has filed answers
to said complaint denying said charges.
3. Respondent admits all the jurisdictional facts set forth in the
Commission's complaint in this proceeding.
4. Respondent waives:
(a) Any further procedural steps;
(b) The requirement that the Commission's decision contain a
statement of findings of fact and conclusions of law;
(c) All rights to seek judicial review or otherwise to challenge or
contest the validity of the order entered pursuant to this agreement;
and
(d) Any claims under the Equal Access to Justice Act.
5. This agreement shall not become a part of the public record of
the proceeding unless and until it is accepted by the Commission. If
this agreement is accepted by the Commission, it will be placed on the
public record for a period of sixty (60) days and information in
respect thereto publicly released. The Commission thereafter may either
withdraw its acceptance of this agreement and so notify the respondent,
in which event it will take such action as it may consider appropriate,
or issue and serve its decision, in disposition of the proceeding.
6. This agreement is for settlement purposes only and does not
constitute an admission by respondent that the law has been violated as
alleged in the compliant issued by the Commission, or that the facts as
alleged in said compliant, other than jurisdictional facts, are true.
7. This agreement contemplates that, if it is accepted by the
Commission, and if such acceptance is not subsequently withdrawn by the
Commission pursuant to the provisions of Section 3.25(f) of the
Commission's Rules, the Commission may without further notice to
respondent, (1) issue its decision containing the following order to
cease and desist in disposition of the proceeding, and (2) make
information public in respect thereto. When so entered, the order to
cease and desist shall have the same force and effect and may be
altered, modified or set aside in the same manner and within the same
time provided by statute for other orders. The order shall become final
upon service. Delivery by the U.s. Postal Service of the decision
containing the agreed-to order to respondent's address as stated in
this agreement shall constitute service. Respondent waives any right it
might have to any other manner of service. The complaint may be used in
construing the terms of the order, and no agreement, understanding,
representation, or interpretation not contained in the order or in the
agreement may be used to vary or contradict the terms of the order.
8. Respondent has read the compliant and the order contemplated
hereby. It understands that once the order has been issued, it will be
required to file one or more compliance reports showing that it has
fully complied with the order. Respondent further understands that it
may be liable for civil penalties in the amount provided by law for
each violation of the order after it becomes final.
Order
I
It is ordered that respondent Schering Corporation, a corporation,
its successors and assigns, and its officers, agents, representatives,
and employees, directly or through any corporation, subsidiary,
division or other device, in connection with the advertising, labeling
packaging, offering for sale, sale or distribution of Fiber Trim or any
other food, food supplement or drug in or affecting commerce, as
``commerce'' is defined in the Federal Trade Commission Act, do
forthwith cease and desist from making any misrepresentation, directly
or by implication,
a. about the amount of fiber or any other nutrient or dietary
constituent contained in the product, whether described in quantitative
or qualitative terms; or
b. that the product is a high, rich, excellent or superior source
of fiber or any other nutrient or dietary constituent using those words
or words of similar meaning.
Provided that nothing in this Part shall prohibit any
representation as to the amount of fiber or any other nutrient or
dietary constituent in any product if such representation is
specifically permitted in labeling, for the serving size advertised or
promoted for such product, by regulations promulgated by the United
States Food and Drug Administration (FDA) pursuant to the Nutrition
Labeling and Education Act of 1990.
II
It is further ordered that respondent, its successors and assigns,
and its officers, agents, representatives, and employees, directly or
through any corporation, subsidiary, division or other device, in
connection with the advertising, labeling, packaging, offering for
sale, sale or distribution of any food, food supplement or drug in or
affecting commerce, as ``commerce'' is defined in the Federal Trade
Commission Act, do forthwith cease and desist from making any
representation, directly or by implication,
a. regarding the actual or comparative amount of fiber or the
type(s) of fiber, or the actual or comparative amount of any other
nutrient or dietary constituent in the product;
b. that the product provides any appetite suppressant, weight loss,
weight control, or weight maintenance benefit; or
c. that the product provides any health benefit associated with the
intake of fiber, or any other nutrient or dietary constitutent
unless, at the time that it makes such representation, respondent
possesses and relies upon competent and reliable scientific evidence
that substantiates the representation. For purposes of this Order,
``competent and reliable scientific evidence'' shall mean those tests,
analyses, research, studies, or other evidence conducted and evaluated
in an objective manner by persons qualified to do so, using procedures
generally accepted by others in the profession or science to yield
accurate and reliable results.
Provided that, for purposes of any representation covered by
subpart (b) of this Part that a fiber supplement or any other food
supplement or drug is an effective appetite suppressant or that it
effectuates weight loss, weight control, or weight maintenance through
reduction in appetite or any other physiological mechanism, ``competent
and reliable scientific evidence'' shall mean at least two adequate and
well-controlled, double-blinded clinical studies that conform to
acceptable designs and protocols and are conducted by different
persons, independently of each other. Such persons shall be qualified
by training and experience to conduct such studies.
Provided further that nothing in this order shall prohibit
respondent from making any representation for any drug that is
permitted in labeling for any such drug under any tentative final or
final standard promulgated by the Food and Drug Administration, or
under any new drug application approved by the Food and Drug
Administration.
Provided further that nothing in subparts (a) or (c) of this Part
shall prohibit respondent from making any representation for any
product that is specifically permitted in labeling for such product by
regulations promulgated by the FDA pursuant to the Nutrition Labeling
and Education Act of 1990.
III
It is further ordered that respondent, its successors and assigns,
and its officers, agents, representatives, and employees, directly or
through any corporation, subsidiary, division or other device, in
connection with the advertising, labeling, packaging, offering for
sale, sale or distribution of any food, food supplement or drug in or
affecting commerce, as ``commerce'' is defined in the Federal Trade
Commission Act, shall, whenever a product's fiber content is described
in advertising or labeling, directed or by implication, in quantitative
or qualitative terms, disclose clearly and prominently in immediate
proximity to such description the number of grams of dietary fiber
contained per serving of the product.
Provided that is such fiber content descriptor is a term defined by
regulations promulgated by the FDA pursuant to the Nutrition Labeling
and Education Act of 1990, compliance with said regulations will be
deemed compliance with Part III of this Order.
IV
It is further ordered that, for three (3) years from the date that
the representation is last disseminated, respondent shall maintain and
upon request make available to the Federal Trade Commission for
inspection and copying:
1. All materials that were relied upon to substantiate any
representation covered by this Order; and
2. All test reports, studies, surveys, demonstrations or other
evidence in respondent's possession or control, or of which it has
knowledge, that contradict, qualify, or call into question such
representation or the basis upon which respondent relied for such
representation.
V
It is further ordered that respondent shall notify the Commission
at least thirty (30) days prior to any proposed change in the corporate
respondent such as dissolution, assignment, or sale resulting in the
emergence of a successor corporation, the creation or dissolution of
subsidiaries, or any other change in the corporation which may affect
compliance obligations arising out of this Order.
VI
It is further ordered that respondent shall, within thirty (30)
days after service of this Order, distribute a copy of this Order to
each of its operating divisions responsible for the preparation or
placement of advertisements, promotional materials, product labels, or
other such sales materials covered by this Order.
VII
It is further ordered that respondent shall, within sixty (60) days
after service of this Order and at such other times as the Commission
may require, file with the Commission a report, in writing, setting
forth in detail the manner and form in which it has complied or intends
to comply with this Order.
Analysis of Proposed Consent Order To Aid Public Comment
The Federal Trade Commission has accepted an agreement to a
proposed consent order from Schering Corporation.
The proposed consent order has been placed on the public record for
sixty (60) days for reception of comments by interested persons.
Comments received during this period will become part of the public
record. After sixty (60) days, the Commission will again review the
agreement and the comments received and will decide whether it should
withdraw from the agreement and take other appropriate action or make
final the agreement's proposed order.
This matter concerns advertising and promotional practices related
to the sale of Fibre Trim, a fiber containing tablet, that were
disseminated between 1985 and 1991. These advertisements and
promotional materials were disseminated in magazines, newspapers,
television, radio, direct mail correspondence and in-store displays.
The Commission's complaint, issued on September 22, 1989, alleged
that Schering's advertisements and promotional materials represented
that: (1) Fibre Trim is an effective appetite suppressant, weight loss,
weight control or weight maintenance product; (2) Fibre Trim provides
the health benefits associated with a fiber-rich diet or a high intake
of dietary fiber from food; (3) Fibre Trim is a high fiber supplement;
(4) the recommended daily dosage of Fibre Trim provides most of a
person's daily requirements of dietary fiber; and (5) the recommended
dosage of Fibre Trim provides about 2.35 grams of dietary fiber per
serving or about seven grams of dietary fiber per day. The complaint
alleged that Schering did not have a reasonable basis for these
representations, and that the latter three representations were false.
The complaint allegations were tried before an Administrative Law
Judge (ALJ) between January 22 and March 29, 1991. In an opinion dated
September 16, 1991, the ALJ upheld the first, second and fifth
allegations described above. With respect to the third allegation, the
ALJ ruled that Schering's claim that Fibre Trim is a high fiber
supplement was false as to the product's weight maintenance dosage, but
true as to its weight loss dosage. The ALJ rejected the fourth
allegation described above. The ALJ's decision was appealed to the
Commission. Subsequently, the parties agreed to the proposed consent
order and the appeal was withdrawn from adjudication.
The proposed consent order contains provisions which are designed
to remedy the advertising violations charged and to prevent Schering
from engaging in similar acts and practices in the future. Part I of
the proposed order prohibits Schering from misrepresenting the amount
of fiber or any other nutrient or dietary constituent in Fibre Trim or
any other food, food supplement or drug product. Part I also prohibits
the misrepresentation of such products as being high, rich, excellent
or superior sources of fiber or any other nutrient or dietary
constituent. Part I also contains a safe harbor stating that it does
not prohibit any representation as to the amount of fiber or any other
nutrient or dietary constituent in any product if that representation
is specifically permitted in labeling, for the serving size being
advertised, by regulations promulgated by the United States Food and
Drug Administration (FDA) pursuant to the Nutrition Labeling and
Education Act of 1990 (NLEA). The Commission's recently adopted
Enforcement Policy Statement on Food Advertising (May 1994) (Food
Policy Statement) provides additional guidance on what may constitute a
misrepresentation of nutrient content.
Part II of the proposed consent order requires Schering to rely
upon competent and reliable scientific evidence if it makes claims for
any food, food supplement or drug product regarding the product's (1)
Fiber content or type or the amount or content of any other nutrient or
dietary constituent; (2) provision of any health benefit associated
with the intake of fiber or any other nutrient or dietary constituent;
or (3) provision of any appetite suppressant, weight loss, weight
control or weight maintenance benefit. Part II requires that Schering
possess and rely on tests, analyses, research, studies, or other
evidence conducted and evaluated in an objective manner by persons
qualified to do so, using procedures generally accepted by others in
the profession or science to yield accurate and reliable results in
making the first two categories of claims. For the third (weight loss-
related) category of claims, Schering is required to rely upon at least
two adequate and well-controlled, double-blinded clinical studies that
conform to acceptable designs and protocols and are conducted
independently by different persons qualified by training and experience
to conduct such studies.
Part II also contains two safe harbor provisions. First, the
proposed order does not prohibit any claims for drugs that are
permitted in labeling under an FDA tentative final or final standard,
or under an approved new drug application. Second, the proposed order
does not prohibit any nutrient content or health benefit claims covered
by Part II that are specifically permitted in labeling by FDA
regulations under the NLEA.
Part III requires Schering, when making a fiber content claim for
any food, food supplement or drug product, to disclose, clearly,
prominently and in close proximity to that claim, the number of grams
of dietary fiber contained per serving of the product. If the
description of the fiber content of such a product is a term defined by
FDA regulations issued pursuant to the NLEA (e.g., ``high fiber''),
then compliance with those regulations constitutes compliance with Part
III and no additional disclosure of the amount of dietary fiber is
required under Part III.
The litigation and the negotiation of the settlement of this case
occurred prior to the Commission's issuance of its Food Policy
Statement. Depending on the nature of the fiber content claim, the
disclosure requirement in Part III may not be identical to the
provisions of the Commission's Food Policy Statement. For example, Part
III covers comparative fiber claims (e.g., ``25% more fiber'') for
which the Food Policy Statement likely would require additional
disclosures, such as the basis for comparison. Part III of the proposed
consent order does not explicitly require those additional disclosures.
However, the prohibition on misrepresentations of fiber content in Part
I of the proposed order and Part II's requirement that such claims be
substantiated would require such disclosures as are necessary to
prevent a claim from being misleading. Thus, unless such claims
adequately adhere to the guidance of the Food Policy Statement, they
likely would violate Parts I and II of the proposed order.
Parts IV, V, VI and VII of the proposed order relate to Schering's
obligation to maintain records, distribute the order to its operating
divisions responsible for advertising activities, notify the Commission
of changes in business or corporate structure and file compliance
reports with the Commission.
The purpose of this analysis is to facilitate public comment on the
proposed order. It is not intended to constitute an official
interpretation of the agreement and proposed order or to modify in any
way its terms.
C. Landis Plummer,
Acting Secretary.
[FR Doc. 94-20022 Filed 8-15-94; 8:45 am]
BILLING CODE 6750-01-M
