[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