Pharmtech Research, Inc

Text (OCR of the scan at left; may contain errors)

IN THE MATTER OF PHARMTECH RESEARCH, INC.

CONSEN'!' ORDER , ETC. , IN REGARD TO ALLEGED VIOLATION Olo SECS. 5 AND 12 OF THE FEDERAL TRADE COMMISSION ACT Docket 9168. Complaint, July 27, 1983-Decision, May, 1984 This consent order requires a San Francisco, Calif manufacturer of nutritional supplements, among other things, to cease representing that findings of a 1982 National Academy of Sciences report entitled Diet, Nutrition and Cancer support the claim that Daily Greens, a dehydrated vegetable tablet, reduces the incidence oeaoy type of cancer. The order requires the company to substantiate representations concerning benefits to health with reliable and competent scientific evidence, and to maintain accurate records which either support or contradict such claims. Further, respondent is prohibited from misrepresenting the purpose, content or conclusion of any scientific test, research article or scientific opinion. Appearances For the Commission: Andrew B. Sacks and Reid B. Horwitz. For the respondent: Jon Henry Kouba, Adams, Kouba Dickson San Francisco, Calif and Eugene Lambert, Covington Burling, Washington, D.

COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act and by virture of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that PharmTech Research, Inc., a corporation, hereinafter referred to as respondent, has violated the provisions of said Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating its charges in that respect as follows:

PARAGRAPH 1. Respondent is a corporation organized, existing and doing business under and by virtue of the laws of the State of Calif ornia with its offce and principal place of business located in San Francisco, California.

PAR. 2. Respondent is now and for some time in the past has been engaged in the manufacture, offering for sale, and sale of nutritional supplements, including Daily Greens, and other products for personal or household use by members ofthe general public (hereinafter "consumer products 448 Complaint PAR. 3. Respondent has caused to be prepared and placed for publication and has caused the dissemination of advertising and promotional material, including, but not limited to, the advertising referred to herein, to promote the sale of Daily Greens. PAR. 4. Respondent operates in various States of the United States and in the District of Columbia. Respondent' s manufacturing, offering for sale, sale, and distribution of nutritional supplements, including Daily Greens mentioned herein constitutes maintenance of a substantial course of trade in or affecting commerce, as ncommerce is defined in the Federal Trade Commission Act. PAR. 5. In the course and conduct of its business, respondent has disseminated and caused the dissemination of advertisements for nutritional supplements, including Daily Greens, by various means in or affecting commerce, including inter alia national magazines and newspapers distributed by the mail across state lines, and broadcasts transmitted across state lines, for the purpose of inducing andand which were likely to induce, directly or indirectly, the purchase of said products.

PAR. 6. Typical statements in se 1 advertisements, and promotional materials, disseminated as prevlOusly described, but not necessarily inclusive thereof, are found in advertisements and promotional materials attached hereto as Exhibits A through D. Specifically, the aforesaid advertisements and promotional materials contain the following statements:

(A) Cabbage, Brussels Sprouts, Carrots, Cauliflower, Spinach and Broccoli vs. Cancer. (8) According to the National Academy of Sciences " a regular diet of cruciferous (cabbage, brussels sprouts, broccoli, cauliflower) and carotene-rich (carrots and spinach) vegetables is associated with a reduction in the incidence of certain cancers. Of course you may not really like these vegetables. Or you may not cook them quite right. And even if you have all that worked out, you still have to contend with seasonal availability.

'I' hat's why there are Daily Greens.

Diet, Nutrition and Cancer National Academy Press, 1983. (C) The National Academy of Sciences thinks a balanced diet may reduce your risk of cancer. Daily Greens were designed to be a part of that balanced diet. . (D) (S)ubstantial evidence exists that regular consumption of cruciferous vegetables is associated with a reduction in the incidence of certain cancers. Thanks to the process of dehydration, Daily Greens allow you to eat cruciferous vegetables regularly, with the convenience of a food supplement.

(E) Help your body defend itself.

(1-) According to this recent report from the National Research Council, a combination of cruciferous and carotene-rich vegetables have been found to help our bodies build certain important biological defenses. PAR. 7. Through the use inter alia of the statements referred to in Complaint 103 F.

Paragraphs Six (A) through Six (F), and other representations contained in advertisements or promotional materials not specifically set forth herein, respondent has represented, and now represents, directly or by implication, that:

(a) The findings of the National Academy of Sciences Diet, Nutrition and Cancer Report support the claim that use of Daily Greens, or food supplements of dehydrated vegetables such as Daily Greens, is associated with a reduction in the incidence of certain cancers in humans.

(b) The National Research Council findings support a claim that the use of Daily Greens, or food supplements of dehydrated vegetables such as Daily Greens, may help consumers build important biological defenses.

(c) The use of Daily Greens is associated with a reduction in the inciden of certain cancer in humans. PAR. 8. The representation referred to in Paragraph Seven (a) is false for the reasons inter alia that the findings of the National Academy of Sciences Diet, Nutrition and Cancer Report do not support the claim that the use of Daily Greens or food supplements of dehydrated vegetables such as Daily Greens is associated with a reduction in the incidence of certain cancers. PAR. 9. The representation referred to in Paragraph Seven (b) is false, for the reasons inter alia, that no findings of the National Research Council support such a claim.

PAR. 10. At the time respondent made the representation alleged in Paragraph Seven (c), respondent did not possess and rely upon a reasonable basis for making such representation. Therefore, respondent' s making and dissemination of said representations, as alleged, constituted and now constitute unfair and deceptive acts or practices. PAR. 11. Through the use of the advertisements referred to in Paragraph Seven, and other advertisements not specifically set forth here- , respondent has represented, directly or by implication, that it possessed and relied upon a reasonable basis for the representation set forth in Paragraph Seven (c) at the time of the initial disseminadissemination. In tion of the representations and each subsequent truth and in fact, respondent did not possess and rely upon a reasonable basis for making such representations. Therefore, respondent's making and dissemination of said representations, as alleged, constituted and now constitute unfair and deceptive acts or practices. PAR. 12. The use by respondent ofthe aforesaid statements, representations, acts, and practices, directly or by implication, and the placement in the hands of others of the means and instrumentalities by and through which others may have used the aforesaid statements 448 Decision and Order representations, acts, and practices, have had and now have the capacity and tendency to mislead consumers into the erroneous and mistaken belief that said statements and representations were and are true and complete and to induce such persons to purchase Daily Greens by reason of said erroneous and mistaken belief PAR. 13. The aforesaid acts or practices of respondent, herein alleged as deceptive, were and are to the prejudice and injury of the public and constituted and now constitute unfair or deceptive acts or practices in or affecting commerce and false advertisements in violation of Sections 5 and 12 of the Federal Trade Commission Act, as amended.

,, ,,,,,. ,,,,,,, q :::: :;;(; . , , . Complaint 103 F.

ATTACHMENT A Cabbage, Brussel Sprouts, Carrots, Caulower, Spinach and Broccoli vs. Cancer.

Yuur ,rJ"drrlOlher "'os n Cree", we.. de",n.d '0 he .., P' of ,w ooio,ced d,cl "no veo"ahl s I' ,,,Yi :OJ you Actordino.o, "" lhone" ," your """'" uf "II :cl" by ur. f()ur1h. dnn. a"(Jn"1 A("d "'y "fS(,",,,",. " r. ul"r dL"' "I ' C1H "lwlHJI ",:IV In "'c)(jora""n . I "a "VO"I 1'''";" rerou, I,"bb" c. brussels 'pin"" . smoked Or sat' ,.d 'oods. or PL€"'Y uf lcu," n"werl dnd """'.fie. 'ich ((""u" "nd10")((01;,';;JlnclC 'oul, 'I',,I g'"'''' "ClG w e,"hlc" And 01 cow, bln ""oouclaleOW1lho r"dL1c"o In 'he don r "''''.0 Inelder.co "'(."""' U",ly Cre m "'" mol" cur. ro ,ane,' r ,me' ()lcnur"' I""'''' 'y"n1r Lllyll".'h.", he,"'Hen" o",,,n,,,onct, R,,, ""I, '11", ' ""H ,en vc" e5 0, y() m"y no' ,,)()" 'r, hdve(e'" " c'"ble'" o"""'o,tJ h' An,j ew II If y" w",k,'d "LJIe . , CclO'"" ,ump"""'trlWC"on' c ",,,den,. 'Oreer1":!' 1(, ""n'"," whil '; y"" ",11 h"v 'hd'a,;",,,,1 o"od",,,,,,y ,,,,11,, iij:i!;:

;J! i;;i';:n F,,"":y.'lw ,h"p"ci,n'"',,bl,"' ,,,d 'WI1, ("""n . "cC""' 11.1':y , r""n ,I,. ,,",'d in, , ,"V P'""' ''''A' Thn"""n,dac.ICkmy"I'"wr, 'c'''k" ,h, ",,,wldie''',,,y,,'d' Ilcvo, k,,f(, ,rJ, ,,ly Help your body defend itself.

Ol1pI.",,,t 41'4C/f M.EJv . .

454 FEDERA TRADE COMMISSION DECISIONS Complaint 103 F.

ATTACHMENT C PKA:ech RESEARCH ruc.

Opn on whita type on black screen, HA ANNCR. V/O (Deep Voiced) as delivu8d in audio The following message concerns II revolutionary new concept in diet and nutr tion.

Dims to ECU Feme-Ie annr. in OI"-CARA FEMALE ANNCR. LIMBO slitting.

Cid you know that there are cer':i!.l:J foods that can actually help yeur body defend itself? CU1:S to MS Of he. as she. holds It' s trl.e- And, accord ng to a 1,p research. recent 70Q- page report from the ati( Research Council, II combinat:on of cruciferous vegetables Diss. and p4n diplay of fresh like cibb.a-ge, c;;uliflower, - brush vegetables. sprouts, broccoli.. carotene- ic: vegetables lixe carrot spinach Diss - back to MS of anner. as she have been found to help our bodi moves to display of fresh vegetahIes. She gestures te array of build certain important biological vegetables. dllfenses. Because coaxing an str away nutrients, to get the most ber.etit. from any vegetables, you shou:

.at tn.m . But, that can be diffic to do .very day.

Cut to EO) of bottle ..s sh8 held. So, I' d lixe to intro uce you to it up Daily Greens - a new concept nutri tion.

448 Complaint - 2 - Hold &by. shot. SUPER; 7. Daily Greens are NOT just anoth NOT Jest A VI'1AM... A FOOD vit pill -- they are a food. Ois5. and pan along vegetable They re actually nat' al, tres and petri dishes of powdered =uc1ferous and carotene-ric vege vegetables. tables, dehydrated and compressed. without cooking, so you get the nutrients, the fiber did the row;".

that s so good for you.

Oi55. back to anner. holding Just one Daily Green tablet a bottle day gives you the irportant la. nutritional elements you d get 10. Cis". and pan vegetales. to bottle. SUPER: FORTIF:I w: VIS fro eating fresh, raw A. C E PLOS BETA-cTEE vegetable.!- And, Daily Greens a=e forti ied with v tam ns A, C, E ?lu beta-carotene.

11. So, if you aren t gett g e 11. cis,". back to an.cr. with bottle sitting in display of raw vegetables every -- rely en vl!g1tablIl8. Daily Green.s -- 12. the food that not on:y ve9 J" 12. Oi... to bottl., package and talets on .weep the real thing... it gives :.t t.e you rao, .so it can do you tr.e most.

13. Sh:k above SN:'t into morti. 13. Daily Greens -- to help onHZblack.!9 BODYSOPR:DUE ITSZLF end itself. Complaint 103 F.

ATTACHMENT D Ope on white type on black screen. MAE ANCR. VIP (Deep-Voiced) as delivered in Audio.

The following message concerns a revolutionary new concept in diet and nutri ticn.

Di.s. to HC of tamle ancr. ON-CARA FEMALE ANNCR. as she bolds up research.

cording to this recent report the National Research Council. a comination of cruciferous Cis:.. lld poi display at and carotene- rich vegetab':es fresh vegetales. been found to help our bodies tu: 1 Cllrtain ilportant biological dee!1.

Ciss. back to bar At display of Of course. to get the most fro! tZesh vegetables- &n veg le, you should at them But that' s dit!icult to do every d, Cut to ECU of bottles as she bllds So I' d li.ke to introduce you ':c up bottle of Daily Greens Daily Greens.

Bold above shot. SaPER: NOT Daily Greens are NOT Just anot:- JUS'r A Vlcd... A rood vit.n pill -- Dis.. an v. along vegetabl.. They re natural, fresh, cruci!e and petri d ish.. of pcwdar8d v.q8 les and carotene- rich vegetables, dehydrated and compressed Disa. back to ancr. with botle. to give you the imortant nutri tional elements that could be 90 v to your future health.

, 448 Complaint Diss. to CD of bottle end veget&bles And, Daily Greens are fortiflE SIJER: FORTIFI.D WITH VITAMS A, C . E PLUS B -CAQTEE with vit n A, C and E ?lus beta-carotene.

la. Diss. b ck to anex. 10. So. if you I xe not ge tting eno raw vegetables every 11. Diss. to prod ct shot 11. rely on Daily Gree s -- 12. Add SUPER: BI DD' ITSELF 'fOOR BODY 12. to help your body defend itself Decision and Order 103 F. DECISION AND ORDER The Commission having heretofore issued its complaint charging the respondent named in the caption hereof with violation of Sections 5 and 12 of the Federal Trade Commission Act, as amended, and the respondent having been served with a copy of that complaint, together with a notice of contemplated relief; and The respondent, its attorney, and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondent of all the jurisdictional facts set forth in the complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondent 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 Secretary ofthe Commission having thereafter withdrawn this matter from adjudication in accordance with Section 3.25(c) of its Rules; and The Commission having considered the matter and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, now in further conformity with the procedure prescribed in Section 3.25(D of its Rules, the Commission hereby makes the following jurisdictional findings and enters the following order:

1. Respondent PharmTech Research, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of California, with its offce and principal place of business located at 1750 Montgomery Street, in the City of San Francisco, State of California.

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

ORDER It is ordered That respondent Ph arm Tech Research, Inc., a corporation its successors and assigns, and its offcers, agents, representatives, and employees, directly or through any corporation, subsidiary, division or other device, in connection with the manufacture, advertising, offering for sale, sale, or distribution of Daily Greens, or any 448 Decision and Order other product containing dehydrated vegetables, in or affecting commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from representing, directly or by implication, contrary to fact, that findings of the National Academy of Sciences, or findings contained in the 1982 Report entitled Diet Nutrition, and Cancer support the claim that use of the product is associated with a reduction in incidence of any type of cancer. It is further ordered, That respondent, its successors and assigns and its offcers, agents, representatives and employees, directly or through any corporation, subsidiary, division or other device, in connection with the manufacture, advertising, offering for sale, sale, or distribution of any product for personal or household use, in or affecting commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from misrepresenting in any manner, directly or by implication, the purpose, content, sample reliability, results or conclusions of any scientific test, research article, or any other scientific opinion or data. It is further ordered That respondent, its successors and assigns and its offcers, agents, representatives and employees, directly or through any corporation, subsidiary, division, or other device, in connection with the advertising, packaging, offering for sale, saJe, or distribution of any product for personal or household use, in or affecting commerce, as Ecommerce" is defined in the Federal Trade Com.: mission Act, do forthwith cease and desist from making any representation, directly or by implication, concerning any benefit to health to be derived from using any such product unless, at the time of such representation, respondent possesses and relies upon reliable and competent scientific evidence that substantiates such representation. "Reliable and competent" shall mean for purposes ofthis Order 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 in the profession or science to yield accurate and reliable results.

It is further ordered That respondent or its successors or assigns maintain accurate records:

Decision and Order 103 F. 1. Of all materials that were relied upon by respondent in disseminating any representation covered by this order. 2. Of all test reports, studies, surveys, or demonstrations in its possession or control or of which it has knowledge that contradict any representation made by respondent that is covered by this order. Such records shall be retained by respondent or its successors or assigns for three years from the date that the representations to which they pertain are last disseminated. It is further ordered That any such records shall be retained by respondent or its successors or assigns and that respondent or its successors or assigns shall make such documents available to the Commission for inspection and copying upon request.

It is further ordered That respondent notify the Commission at least thirty (30) days prior to any proposed change in 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 allect compliance obligations arising out of the order.

It is further ordered That respondent shall forthwith distribute a copy of this order to each of its operating divisions, and to all present and prospective distributors of products manufactured or marketed by respondent.

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

CARTER HAWLEY HALE STORES, INC.

461 Complaint