American Home Products Corporation

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IN THE MAITER OF AMERICAN HOME PRODUCTS CORPORATION CONSENT ORDER , ETC., IN REGARD TO ALLEGED VIOLA TIUN OF SECS. 5 AND 12 OF THE FEDERAL TRADE COMMISSION ACT Doket 3023. Complaint, June 1980-Deci, June 1980 This consent order requires, among other things, a New Yark City manufacturer of pharmaceutical products to cease making any misrepresentations of the efficay or novel .performance characteristics of its vaginal contraceptive suppository products. The order speifically prohibits any exaggerate efficay claims for the products such as "highly" or "extremely" effective. Additionally, respondent is prohibite from making claims of efficay without a re&loable basis consisting of a consistent boy of valid and scientific evidence. Respondent is also required to distribute an information pamphlet discussing the advantages and disadvantages of various over-the-counter contracptive method as well as settng forth specifically required affirmative disclosures. Appearances For the Commission: Barr E. Barns, Susan Lernr and Rachel Wolkin Sesse"r.

For the respondent: William W. Vodra, Arnold Portr, Charles F. lia,qen and William P. Woods New York City. COMPLAINT The Federal Trade Commission, having reason to believe that American Home Products Corporation, a corporation, (hereinafter respondent") has violated Sections 5 and 12 of the Federal Trade Commission Act, and that a proceeding in respect thereof would be in the public interest, hereby issues its complaint, stating its charges as follows:

PARAGRAPH 1. American Home Products Corporation is a Delaware corporation with its principal place of business at 685 Third Ave., New York, New York.

Allegations stated in the present tense include the past tense. PAR. 2. For purposes of this complaint the following definitions shall apply:

1) A "vaginal contraceptive suppository" is a spermicidal contraceptive product which is inserted into the vagina prior to coitus. Body temperature or vaginal secretions dissolve the suppository and spread its sperm killing agent through the vaginal cavity. 2) "Use effectiveness" means that level of effectiveness which is ..

U.l vn. HU.l .L "V""UV.LQ VVU.J:. 884 Complaint obtained when the contraceptive method is used by large numbers of subjects not all of whom follow the instructions accurately or use the contraceptive method each time they have sexual relations. 3) HCommerce" means commerce as defined in the Federal Trade Commission Act, as amended.

PAR. 3. Respondent American Home Products Corporation engages in the manufacturing, advertising, offering for sale and sale of pharmaceutical products, including a vaginal contraceptive suppository product named "Semicid", a "drug" within the meaning of Section 15 of the Federal Trade Commission Act.

PAR. 4. Respondent American Home Products Corporation causes its products when sold, to be shipped and distributed from its places of business to purchasers located in various other States of the United States, the District of Columbia and Puerto Rico. Respondent American Home Products Corporation maintains a substantial course of trade in all its products, including its product Semicid, in or affecting commerce.

PAR. 5. In the course and conduct of its business respondent disseminates or causes to be disseminated certain advertisements concerning Semicid (1) by United States mails, or by various means in or having an effect upon commerce, including but not limited to insertion in newspapers or magazines of interstate dissemination and radio and television broadcasts of interstate transmission, for the purpose of inducing, or which are likely to induce, directly or indirectly, the purchase of Semicid, or (2) hy various means, for the purpose of inducing, or which arc likely to induce, directly or indirectly, the purchase of Semicid in or having an effect upon commerce. PAR. 6. Among the advertisements and other sales promotion materials, and typical of the statements and representations made in respondent' s advertisements, but not all inclusive thereof, are the advertisements identified as Attachments 1 through 4. PAR. 7. Through the use of such advertisements, and others not specifically set forth herein, respondent represents, directly or by implication, that:

1. Semicid has an extremely high use effectiveness, approaching the level of oral contraceptives (hereinafter "the pill") or intrauterine devices (hereinafter "I UD"

2. Semicid has novel contraceptive performance characteristics. PAR. 8. In truth and in fact:

Semicid' s use effectiveness is approximately that of other 886 FJoDERAL TRADE COMMISSION DECISIONS Complaint 95 F.

vaginal contraceptive products. It is not considered to have a use effectiveness on the level of the pil or IUD. 2. Semicid does not have novel contraceptive performance characteristics except as to the characteristics associated with its method of delivery. Its sperm kiling ingredient, nonoxynol 9, has been in use for many years in various contraceptive products. Therefore, the advertisements and representations referred to in Paragraphs Six and Seven are false, deceptive or misleading. PAR. 9. Furthermore, through the use of the advertisements referred to in Paragraphs Five and Six, respondent represents, directly or by implication, that:

1. Semicid has an extremely high use effectiveness. 2. Semicid has novel eontraceptive performance characteristics. 3. Semicid has been scientifically or medically proven to have an extremely high use effectiveness.

PAR. IO. At the time respondent made the representations alleged in Paragraph Nine, respondent had no reasonable basis for making those representations. Therefore, the making and dissemination of such representations constitute deceptive or unfair acts or practices in or affecting commerce.

PAR. 11. F'urthermore, respondent markets or advertises Semicid without disclosing to the purchasing public through its advertising that:

1. For best protection against pregnancy, it is essential that one follow instructions.

2. Women for whom pregnancy presents a special health risk should make a contraceptive choice in consultation with their physi- CIan.

3. Some Semicid users experience irritation. 4. Semicid requires a waiting period of fifteen minutes before intercourse to ensure effectiveness.

5. Semicid is approximately as effective as vaginal foam contraceptives in actual use.

PAR. 12. The facts described in Paragraph F;leven are material with respect to the consequences which may result from use of Semicid as a contraceptive under such conditions as are customary or usual. Respondent' s failure to disclose these material facts renders the advertisements referred to in Paragraphs Five and Six false, deceptive or misleading.

PAR. 13. Furthermore, through the use of the advertisements .lVlJ:lil\.All nU1VU!.i rltUuu\J.l,: \Junt'. .0S'/ Complaint referred to in Paragraphs Five and Six, respondent, directly or by implication, favorably compares some characteristics of Semicid to the pill or the IUD and represents in the same advertisement that Semicid has an extremely high use effectiveness. Favorable comparison of Semicid to certain characteristies of the pil or IUD has the tendency and capacity to lead members of the public into the erroneous and mistaken belief that Semicid's use effectiveness is equal to that of the pill or IUD. Respondent fails to disclose the fact that Semicid has a use effectiveness below that of the pill or IUD and approximawly the same as other vaginal foam contraceptive products. PAR. 14. The fact described in Paragraph Thirten is mawrial in light of the comparative representations made in respondent's advertisements. Respondent's failure to disclose this mawrial fact in advertisements containing such comparative representations renders the advertisements referred to in Paragraphs Five and Six false, misleading or unfair.

PAR. 15. In the course and conduct of its business, and at a1l times mentioned herein, respondent American Home Products Corporation is in substantial competition in or affecting commerce with corporations firms and individuals engaged in the sale of drugs or contraceptive products of the same general kind and nature as advertised or sold by respondent.

PAR. I6. The use by respondent of the aforesaid false, misleading, deceptive or unfair statements, representations, acts or practices, and the dissemination of the aforesaid false advertisements has the capacity and wndency to mislead members of the public into the erroneous and mistaken belief that said stawments and representations are true and into the purchase of substantial quantities of respondent's products or services by reason of said erroneous and mistaken belief.

PAR. 17. The aforesaid acts and practices of respondent are a1l to the prejudice and injury of the public and of respondent's competitors and constitute unfair methods of competition or unfair or deceptive acts or practices in or affecting commerce in violation of Sections 5 and 12 of the Federal Trade Commission Act. The acts and practices of respondent, as herein alleged, are continuing and wil continue in the absence of the relief herein requeswd.

Commissioner Pitofsky did not participaw.

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PAR. 7. Through the use of such advertisements, and others not specifically set forth herein, respondents represent, directly or by implication, that:

I. Encare has an extremely high use effectiveness, approaching thc level of oral contraceptives (hereinafter "the pil" or intrauterine devices (hereinafter "IUD"

2. Encarc has novel contraceptive performance characteristics. PAR. 8. In truth and in fact:

1. Encare s use effectiveness is approximately that of other vaginal contraceptive products. It is not considered to have a use effectiveness on the level of the pill or IUD.

2. Encare does not have novel contraceptive performance characteristics except as to the characteristics associated with its method of delivery. Its sperm ki1ing ingredient, nonoxynol 9, has been in use for many years in various contraceptive products. Therefore, the advertisements and representations referred to in Paragraph Six and Seven are false, deceptive, or misleading. PAR. 9. At the time respondents made the representations alleged Paragraph Seven, respondents bad no reasonable basis for making those representations. Therefore, the making and dissemination of such representations constitute deceptive or unfair acts or practices in or affecting commerce.

PAR. 10. Through dissemination of the advertisement identified as Attachment 2, respondents market or advertise Encare without disclosing to the purchasing public through the advertising that: 1. Women for whom pregnancy presents a special health risk should make a contraceptive choice in consultation with their physi- CIan.

2. Some Encare users experience irritation in using the product. 3. Encare requires a waiting period of ten minutes before intercourse.

PAR. 11. Furthermore, respondents market or advertise Encare without disclosing to the purchasing public through the advertising that:

Encarc is approximately as effective as vaginal foam contraceptives in actual use.

Complaint 95 F.

PAR. 12. The facts described in Paragraphs Ten and Eleven are material with respect to the consequences which may result from use of Encare as a contraceptive under such conditions as are customary or usual. Respondents' failure to disclose these material facts renders the advertisements referred to in Paragraphs Five and Six false, deceptive or misleading.

PAR. 13. Furthermore, through the use of the advertisements referred to in Paragraphs Five and Six, respondents, directly or by implication, favorably compare some characteristics of Encare to the pill or the IUD and represent in the same advertisement that Encare has an extremely high use effectiveness. Favorable comparison of Eneare to certain characteristics of the pil or IUD has the tendency and capacity to lead members of the public into the erroneous and mistaken belief that Encare s use effectiveness is equal to that of the pill or IUD. Respondents fail to disclose the fact that Encare has a use effectiveness below that of the pill or IUD and approximately the same as other vaginal foam contraceptive products. PAR. 14. The fact described in Paragraph Thirteen is material in light of the comparative representations made in respondents' advertisements. Respondents' failure to disclose this material fact in advertisements containing such comparative representations renders the advertisements referred to in Paragraphs Five and Six false, misleading or unfair.

PAR. I5. In the course and conduct of their business, and at all times mentioned herein, respondents Morton-Norwich Products, Inc. and Eaton-Merz Laboratories, Inc. are in substantial competition in or affecting commerce with corporations, firms and individuals engaged in the sale of drugs or contraceptive products of the same general kind and nature as advertised or sold by respondents. PAR. 16. The use by respondents of the aforesaid false, misleading, deceptive or unfair statements, representations, acts or practices, and the dissemination of the aforesaid false advertisements has the capacity and tendency to mislead members of the public into the erroneous and mistaken belief that said statements and representations are true and into the purchase of substantial quantities of respondents' products or services by reason of said erroneous and mistaken belief.

PAR. I7. The aforesaid acts and practices of respondents are all to the prejudice and injury of the public and of respondents' competitors and constitute unfair methods of competition or unfair or deceptive acts or practices in or affecting commerce in violation of Sections 5 and 12 of the Federal Trade Commission Act. The acts and practices of lynn.1Ulti-l'lUltWlCH PKUUUCTS , INC., ET AL. 899 Complaint respondents, as herein alleged, are continuing and will continue in the absence of tbe relief herein requested.

Commissioner Pitofsky did not participate.

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Dccision and Order 95 F.

DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices named in the caption hereof, and the respondents having been furnished thereafter with a copy of a draft of complaint which the New York Regional Office proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondents with violation of the Federal Trade Commission Act; and The respondents, their attorneys, and counsel for the Commission having thereafter executed an agreement containing a consent order and admission by the respondents of a11 the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondents that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission s Rules; and The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondents have violated the said Act, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, and having duly considered the comments fied thereafter by interested persons pursuant to Section 2.34 of its Rules, now in further conformity with the procedure prescribed Section 2.34 of its Rules, the Commission hereby issues its complaint makes the following jurisdictional findings and enters the following order:

1. Respondent Morton-Norwich Products, Inc. is a Delaware corporation with its principal place of business at 110 N. Wacker Drive Chicago, Ilinois.

Respondent Eaton-Merz Laboratories, Inc. is a Delaware corporation with its principal place of business at 17 Eaton Ave., Norwich, New York. It is a joint venture owned in equal shares by Mortn-Norwich Products, Inc. and Merz and Co. , Chemische-Fabrik of Frankfurt Federal Republic of Germany.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER This order applies to respondent Mortn-Norwich Products, Inc. and respondent Eaton-Merz Laboratories, Inc., their successors assigns , ''-n.. L'-LL .. L~V.lUVL\ J.J.'V. , J:J. fill. 899 Decision and Order officers, agents and employees, whether acting directly or through any corporation, subsidiary, division or other device. Except as otherwise provided, order provisions apply to any act taken in connection with either respondent' s advertising, offering for sale, sale or distribution of Encare or any OTC (over the counter) contraceptive product in or affecting commerce within the United States, including the Commonwealth of Puerto Rico and any territory or possession of the United States. The reasonahle basis standards used in this order are not intended to set a standard for drug products other than OTC contraceptives.

For purposes of this order, the following definitions shall apply: 1) "Use effectiveness" means that lever of effectiveness which is obtained when the contraceptive method is used by large numbers of subjects not all of whom follow the instructions accurately or use the contraceptive method each time they have sexual relations. 2) "Encare" means the vaginal contraceptive suppository product marketed under the tradename Encare or Encare Oval, or any vaginal contraceptive suppository product of substantially the same chemical formulation.

3) " Advertisement" means any written, verbal or audiovisual statement, ilustration, depiction or presentation, which is designed to effect the sale of any OTC contraceptive product, or to create interest in the purchasing of such products (except a package or package insert) whether same appears in a brochure, newspaper, magazine leaflet, circular, mailer, book insert, catalog, bilboard, public transit card, point-of-sale display, film strip, video presentation, or in a radio or television broadcast or in any other media, regardless of whether such statement, ilustration, depiction or presentation is characterized ho1AJeVer that theas promotional, educational or informative; prvidd,term advertisement does not include material which solely refers to the product without making any claims for the product. 4) "Product or use characteristic" includes but is not limited to efficacy, safety or convenience.

It is ordered That each respondent cease and desist from: A. Making in consumer (lay) advertisements any contraceptive effectiveness claims regarding Encare which use the words "effective or "reliable" in conjunction with any performance or quality heightening modifiers such as "highly extremely" and the like. B. Misrepresenting, directly or by implication, the effectiveness of any OTC contraceptive product.

, Decision and Order 95 F.

C. Representing, directly or by implication, that Encare has novel contraceptive performance characteristics except as to the characteristics associated with its method of delivery. D. Making any representation, directly or by implication, concerning the effectiveness of any OTC contraceptive product unless respondent has a reasonable basis for such representation consisting of a consistent body of valid and reliable scientific evidence; providd however that respondents may represent that Eneare is effective or rcliablc or make other effectiveness claims as permitted by this order (for example Encare provides reliahle protection against pregnan- II.

It is further ordered That each respondent make the following affirmative disclosures in any consumer (Jay) print advertisement for Encare:

A. For best protection against pregnancy, it is esntial to follow package instructions.

B. If your doctor has told you that you should not beme pregnant, you should ask your doctor which contraceptive method, including Em'are, is bet for you. C. Some Encare users experience irritation in using the product. D. It is essential that you insert Encare at least ten minute before intercurs. Encare is approximately as effective as vaginal foam contracptives in actual use. The above affirmative disclosures shall be made clearly and conspicuously. Disclosures C, D and E shall be made in the exact language indicated above; providd, however that if respondent has a reasonable basis, consisting of valid scientific test(s) or study(ies), respondent may modify the words Uten minutes" in Disclosure D consistent with such reasonable basis. Disclosures D and E shall be made in typ at least large as the type face of the major portion of the text of the ad copy. Disclosures D and shall be separate and distinquishable from the main body of the advertisement for a period of 24 months following the date of service of this order or 27 months from the date of signing of this order, whichever expires earlier.

III.

It is further ordered That each respondent make the following affirmative disclosure in any consumer (lay) print advertisement for Encare in which any product or use characteristic of Encare is jnun. Vl';- l'1Vn.nH n rn.VUU\.l, 11'1 v. J!T AL. 899 Decision and Order compared, directly or by implication, to any product or use characteristic of oral contraceptives or intrauterine devices: Encare is approximately as effective as vaginal foam contraceptives in actual use, but is not as effective as the piJ or IUD.

Encare is not as effective as the pil or IUD in actual use, but is approximately as effective as vaginal foam contraceptives.

Either ahove affirmative disclosure shall be made, where required in lieu of Disclosure II.E above. The disclosure shall satisfy the requirements regarding exact language, size of type and relation to the main body of the ad specified for Disclosure II.E. IV.

It is fu.rther ordered That each respondent make the following disclosures in any consumer (Jay) TV advertisements for Eilcare: A. Follow directions cxactly, including thc ten minute waiting period. R. Encarc is approximately as effective as vaginal foam contraceptives in actual use. The above disclosures shall be made clearly and conspicuously as video supers and in the exact language indicated above; providd hmAJever that if respondents have a reasonable basis, consisting of valid scientific testes) or study(ies), respondents may modify the words "ten minutes" in Disclosure IV.A consistent with such reasonable basis. It is further ordered That each respondent make the following disclosure in any consumer (lay) radio advcrtisemcnt. for Encare: Encare is approximately as effective as vaginal foam contraceptives in actual use. The above disclosure shall be made clearly and conspicuously and in the exact language indicated above.

VI.

It is further ordered That each respondent shall make the following disclosures in ethical (professional) advertisements for Encare. A. Irritation accompanies use of the product in some instances. B. Encare must be inserted according to product instructions and at least ten minutes before intercourse.

Decision and Order 95 F.

C. Encare is approximately as effective as vabrinal foam contracptives in actual use but is not as effective as the pil or IUD.

Encare is not 'i, effective as the pil or IUD in actual use, but is approximately as effective as vaginal foam contraceptives.

Affirmative Disclosures' A and B shall be made in language the same as or substantially similar to the language set forth above; prfYidd hoever that if respondents have a reasonable basis, consisting of valid scientific test(s) or study(ies), respondents may modify the words "ten minutes" in Disclosure B consistent with such reasonable basis. Disclosure C shall be made in the exact language indicated above, in typeface at least as large as the typeface of the major portion of the text of t.he ad copy.

If respondent has a reasonable basis, consisting of a eons is tent body of valid and reliable scientific evidence, for any change in disclosures contained in Paragraphs II.A, B, C or E, III, IV. , V, and VI.A or C above, respondent may petition the Commission for appropriate modification of this order.

VII.

It is further orde-rd That each respondent cease and desist from: A. Disseminating or causing the dissemination of any advertisement, by means of the United States mails or by any means in or affecting commerce within the United States, including the Commonwealth of Puerto Rico and any territory or possession of the United States, which contains any of the representations prohibited in Paragraph I. A-C of this order or fails to include any of the disclosures required by this Order.

by any means for B. Disseminating, or causing to be disseminated, the purpose of inducing, or which is likely to induce, directly or indirectly, the purchase of Encare or any OTC contraceptive product in or affecting commerce within the United States, including the Commonwealth of Puerto Rico and any territory or possession of the United States, any advertisement which contains any of the representations prohibited in Paragraph I. A-C of this order or fails to include any of the disclosures required by this order. VII.

It is further ordered That respondents shall, within six (6) months after the date of service of this order, run print advertisements for _.

-."A .L .L.L ""'''''-.L'', .L"'UJ. LO.. .n1.. 899 Decision and Order Encare in at least two (2) separate issues of at least nine (9) professional (ethieal) publications approved by authorized representatives of the Federal Trade Commission. The advertisements required by this paragraph shan comply with Paragraphs LB-D and VI, of this order. Advertisements run after the date of the signing of this order but prior to the date of service of this order, shan be considered satisfactory compliance with this order.

IX.

It is fwrther ordered That respondents prepare an informational pamphlet, in a form to be approved by authorized representatives of the Federal Trade Commission, which clearly and conspicuously sets forth the affirmative disclosures specified in Paragraphs II and III above, as wen as other information regarding the advantages and disadvantages of various OTC contraceptive methods. The pamphlet shan be at least (4) pages in length, oriented toward a lay audience, and based upon current labeling of, and published scientific literature regarding OTC contraceptive products. The form of the pamphlet shan be submitted by the respondents to the I"ederal Trade Commission within sixty (60) days after the date of service of the order. Copies of the pamphlet shan be distributed within sixty (60) days after the date on which the representatives of the Federal Trade Commission serve notice on the respondents that they have approved the form of the pamphlet. Copies of the pamphlet shan be initiany distributed to an physieians and other health eare professionals engaged in obstetrie and gyneeological practice or family planning activities who previously received any promotional material concerning Encare. A cover letter and postpaid reply eard shan be provided with the initial mailing of the pamphlet indicating its availability, at no charge, in reasonable quantities upon request. Copies shan also be distributed to retail pharmaeies who purchase Encare directly from respondents with a request that the pamphlet be made available to consumers. Respondents shan thereafter provide, at no charge, additional copies of the pamphlet upon reasonable request for a period of one (1) year. It is farther (yrdered That each respondent maintain complete business records relative to the manner and form of its compliance with this order. Such reeords shan include, but not be limited to, copies of and dissemination schedules for all advertisements; documents which substantiate or contradict any claim made in advertising, promoting or sening the product; and an affidavit of compliance with Decision and Order 95 F.

Paragraph IX of this order. Such records shan be retained for at least three (3) years beyond the last dissemination of any relevant advertisement. Upon thirty (30) days notice each respondent shall make any and an such records available to Commission staff for inspection or photocopying.

XI.

It is further ordered That each respondent forthwith deliver a copy of this order to each operating division and to all employees or agents now or hereafter engaged in the sale or offering for sale of Encare or in any aspect of the preparation, creation or placing of advertising for Encare on behalf of respondent. A statement acknowledging receipt of this order shall be obtained in each case.

XII.

It is further ordered That each respondent notify the Commission at least thirty (30) days prior to any proposed change in a corporate respondent in which the respondent is not a surviving entity, such as dissolution, assignment or sale resulting in the emergence of any successor corporation or corporations, or any other change in said corporations which may affect compliance obligations arising out of this order.

XII.

within sixty (60) It is further (fdered That each respondent shan, days after service upon it of this order, file with the Commission a report setting forth in detail the manner and form in which it has complied with this order.

Commissioner Pitofsky did not participate.

SCHLUMBERGER LTD. 913 913 Complaint