In the Matter of the Complaint Against NATIONAL HEALTH PRODUCTS, INC. ORDER PROCESSING CENTER Lock Box 3247 at Granada Hills, CA 91344-0247 and 9514-9 Reseda Boulevard, Suite 609 Northridge, CA 91324-2306 P.S. Docket No. 17/123; 10/12/84 Bernstein, Edwin S. APPEARANCE FOR COMPLAINANT: Kenneth N. Hollies, Esq. Consumer Protection Division Law Department United States Postal Service Washington, DC 20260-1112 APPEARANCES FOR RESPONDENT: Peter O. Safir, Esq. Nancy Singer, Esq. Kleinfeld, Kaplan & Becker 1140 Nineteenth Street, N.W. Washington, DC 20036-6601
On June 20, 1984, Complainant filed a Petition for Orders Based on Breach of Consent Agreement alleging that Respondent breached the terms of a Consent Agreement executed on December 14, 1983, by Michael S. Levey on behalf of Respondent. Complainant contends that Respondent has breached the terms of the Consent Agreement by resuming activities which it agreed to discontinue.
On June 21, 1984, an interim detention order as provided in Paragraph 8 of the Consent Agreement was issued. That order was modified by orders dated June 27, July 2, August 1 and August 16, 1984.
In its Reply to the Petition filed July 12, 1984, Respondent denied that it breached the terms of the Consent Agreement.
By order dated July 25, 1984, the Judicial Officer designated the undersigned Administrative Law Judge to act for the Judicial Officer in this matter. On September 20, 1984, I conducted a formal hearing in this matter in Washington, D.C. Postal
Inspectors Ralph H. Cook and Niall K. Doyle and Samuel D. Uretsky, Pharm.D. testified for Complainant and Michael S. Levey and David J. Miller testified for Respondent. Both parties were afforded a full opportunity to present evidence and file post-hearing memoranda. All of these have been considered. After considering all of the evidence and the parties' memoranda, I make the following findings of fact, conclusions of law and decision.
The Consent Agreement required Respondent to cease making the following representations with regard to its diet product, DCP/20:
(a) The ingredients of DiCellulite 20 tablets ("DCP/20") are not adequately available in the normal diet.
(b) The ingredients of DCP/20 are not adequately available in the diet accompanying the product.
(c) DCP/20 makes a material contribution to Respondent's weight loss program.
(d) DCP/20 will inhibit the appetites of users.
(e) DCP/20 will significantly increase the mobilization of users' fatty acids.
(f) DCP/20 will significantly decrease users' cravings for sweets.
(g) DCP/20 will replace the need for willpower in a weight loss program.
(h) By emulsifying fat and attacking the cellular structure of fat cells, DCP/20 will cause a significant decrease in the size of fat deposit areas in users.
(i) DCP/20 will firm muscles and increase muscle control in users.
(j) DCP/20 will cause rapid and substantial loss of weight in users.
Shortly after it entered into the Consent Agreement, Respondent began advertising and selling a product called DCP/2000.
Paragraph 6 of the Consent Agreement reads:
Advertisements making, expressly or implicitly, any representations substantially similar in content to any of the representations alleged in the complaint will not hereafter be employed by Respondent under any name or through any corporate or other device in an attempt to obtain money or property through the mails by the sale of the specific product identified therein, reformulation of said specific product, or any substantially similar product, unless true and accurate at the time made.
Complainant contends that DCP/2000 is a reformulation of and/or substantially similar to DCP/20 and, therefore, in selling DCP/2000, Respondent violated the Consent Agreement.
DCP/20 consists of a diet plan and tablets which contain L-phenylalanine, L-glutamine, Lecithin, Choline, Vitamin B6, Vitamin C and Carboxymethylcellulose. These ingredients are all nutrients and not drugs (CX-1, Tr. 164).
DCP/2000 consists of two kinds of tablets - DCP/2000 A.M. and DCP/2000 P.M. The DCP/2000 P.M. tablets contain the same ingredients in different proportions as those in DCP/20 (Tr. 79). The DCP/2000 A.M. tablets contain an ingredient not found in the DCP/20 tablets - Phenylpropanolamine (PPA).
On October 11, 1983, and on October 27, 1983, Inspectors Cook and Doyle, Mr. Michael S. Levey, Jerome S. Sarrow, and Paul Abbott, met to discuss a possible Consent Agreement (Tr. 47, 49, RX-1, p. 16). Mr. Sarrow and Mr. Abbott are attorneys who then represented Respondent. Respondent, through Mr. Levey and Mr. Abbott, asked Inspectors Cook and Doyle whether the Postal Service would consider the addition of PPA to the product a violation of the Consent Agreement. Mr. Abbott discussed a Food and Drug Administration (FDA) Advisory Report about PPA which appeared in the Federal Register (Tr. 30, 47-50). Inspectors Cook and Doyle stated that such a product would be examined at a later time in the context of the advertising representations made about the product (Tr. 31, 52, RX-1, p. 9). Mr. Levey interpreted Complainant's answers to mean that the addition of PPA was not covered by Paragraph 6 of the Consent Agreement (Tr. 136-37).
Inspector Doyle, who is also an attorney (Tr. 61), drafted the Consent Agreement (Tr. 55). He testified that he had drafted the entire agreement, including the language of Paragraph 6, before the initial October 11 meeting of the parties and before he was aware that Respondent was considering adding PPA to its product (Tr. 67). The language in Paragraph 6 had been taken virtually verbatim from other Consent Agreements (Tr. 56) and was not specifically discussed at the negotiation meetings (RX-1, p. 9).
Therefore, I find that the parties to the Consent Agreement did not specifically intend that a subsequent product that included PPA would be defined as a reformulation of or a product substantially similar to DCP/20.
The next question is whether DCP/2000 is covered by the Consent Agreement because it is a reformulation of DCP/20 or a substantially similar product to DCP/20 as these terms are generally used with regard to food and drug products.
Dr. Samuel D. Uretsky and Mr. David Miller testified as expert witnesses. Both have fine credentials. Dr. Uretsky stated that his understanding of the word "reformulation" is that it means a physical or chemical change in any element of a product (Tr. 93) and that an essential criteria was whether or not the subsequent product uses the same name or a similar name as the old product. If so, the product is a reformulation. If a different name is used, it is not a reformulation (Tr. 114-117).
Mr. Miller defined "reformulation" differently. He defined it as (1) when the active ingredients of a product are the same but there is a change in inactive ingredients or aspects of the product such as color or form or (2) when there is a change in quantities of the same active ingredients of the product or (3) a substitution of active ingredients which have the same pharmaceutical effect (Tr. 166-167). He stated that a change in active ingredients that results in an entirely different pharmaceutical effect would not be a reformulation (Tr. 167). He defined a substantially similar product as one which has identical active ingredients, not necessarily in the same proportions or one which gives the same kinds of results as the one compared - one which is pharmacologically equivalent (Tr. 165). On the facts in this record, I find Mr. Miller's definitions to be reasonable and consistent with Respondent's interpretation of the Consent Agreement as not covering the addition of PPA.
While the ingredients in DCP/20 are nutrients and not drugs, (Tr. 103) the PPA in DCP/2000 A.M. is an entirely different ingredient (Tr. 167).. The other ingredients are inactive. PPA is a strong drug which has dramatic effects and has been the subject of much controversy. Therefore, with the addition of PPA, DCP/2000 A.M. became an entirely different product from DCP/20 and not a reformulation or a substantially similar product.
Although DCP/2000 P.M. is a reformulation of DCP/20 and a substantially similar product to DCP/20, since DCP/2000 P.M. is not sold separately from DCP/2000 A.M. (Tr. 44), DCP/2000 A.M. can not be considered a separate product but must be considered a component of one individual DCP/2000 product. Since DCP/2000 contains PPA, it is not a reformulation of or substantially similar to DCP/20.
Therefore, Respondent has not breached the Consent Agreement and the Order dated June 21, 1983, as modified by Order dated June 27, July 2, August 1 and August 16, 1984, directing the detention of Respondent's mail is revoked. Accordingly, normal delivery of mail, addressed to National Health Products, Inc., is to be resumed.