The Dr. Rinse Case:
Memo of a Regulatory Conference
Stephen Barrett, M.D.
This memo was written by Paul J. Sage, a consumer safety officer who investigated and prepared cases for FDA regulatory action. In 1979, at Sage's request, I purchased a box of "Dr. Rinse Formula," a product falsely claimed to be effective against many serious diseases. The evidence we gathered was sufficient to initiate a criminal prosecution, but higher-ups in the agency blocked that from happening. Sage recorded his reactions and, contrary to FDA regulations, eventually gave me a copy. Joseph Paul Hile, who headed the FDA's enforcement arm, showed very little interest in regulating what he called "economic frauds"—products that were marketed with illegal health claims but were not directly physically harmful. From 1976 to 1986, during Hile's tenure as Associate Commissioner of Regulatory Affairs (ACRA), no sellers of such products were criminally prosecuted and relatively few warnings were sent to violators. As a result, the marketplace was flooded with worthless products.
Note for the File
April 6, 1982
Subject: Approach to regulating a serious health fraud—The Dr. Rinse Formula
Household Products Company Inc.,
Food Properties Corporation
The Dr. Rinse Formula is a product made from soy lecithin, sunflower seed, wheat germ, debittered brewer's yeast, vitamins, and minerals. Its labeling is aimed at elderly Americans and contains claims supported by impressive testimonials that the product is effective for the prevention and treatment of serious diseases including high blood pressure, kidney disease, glaucoma, phlebitis, atherosclerosis, and stroke. Some of these diseases -- high blood pressure and glaucoma, for example -- are chronic ailments which can be controlled by lifelong use of effective medication, Effective drugs often have unpleasant side effects which makes patient compliance a serious health problem. Who would not rather sprinkle the Rinse Formula on their morning breakfast cereal, than take the medicine that is necessary to preserve good health? The quest for a pleasant substitute for effective medications can lead to blindness in the case of glaucoma and to catastrophic cardiovascular consequences in the case of hypertension, These are insidious diseases, encouraging patients to try to treat them with a worthless concoction of wheat germ and whatnot is potentially disastrous, In these diseases, irreparable harm will often be the first sign of trouble.
Natcon Chemical is a fully regulated member of the pharmaceutical industry and is undoubtedly aware of the drug labeling and new drug approval requirements of the law. The firm is represented by Bass, Ullman, and Lustigman, one of the nation’s oldest and most experienced guardians of industrial health fraud. Food Properties Corporation is known to have a contract granting it exclusive nationwide rights to promote and distribute the Dr. Rinse Formula. FDA has been refused a copy of this contract and cannot determine the identity of the persons who entered into the agreement, or the conditions of the contract, without it. Linblads Inc is a wholesale distributor of the Dr. Rinse Formula with a prior conviction for violations of the Food, Drug, and Cosmetic Act.· If charged and convicted of violations for its illegal marketing of the Rinse Formula, the offense would be a felony. Because of their prior conviction, Linblads and its president are probably the only persons in the country who are in jeopardy of being convicted of a second offense felony for violations of this kind. It has been more than fifteen years since any other person has been charged with a criminal offense for similar violations.
FDA has hard evidence in hand which would support prosecution of all of the above parties. The cases are very clear cut and extraordinarily simple in nature, The violations involved are serious and impressive; the cases would have far more jury appeal than the typical criminal prosecution. 'The violations are politically neutral in the sense that there is no “Laetrile Lobby" supporting free choice in the management of hypertension or glaucoma.
In August of last year after carefully reviewing evidence developed by the field and the affidavit of an expert establishing the serious health hazard presented by the marketing scheme, the Office of General Counsel cleared papers to support a warrant that would permit seizure of the contraband drug, its labeling, and evidence of responsibility for the violations which have been established. At that time, information to provide fresh probable cause that was needed to perfect an application for a warrant was not in hand. In February and March of this year, New York District completed establishment inspections which provided fresh information to support the warrant. At the time of the inspection about $20,000 worth of the Dr. Rinse Formula was found on the premises. It was briefly embargoed by New York State authorities. The firm subsequently agreed to hold it voluntarily while attempting to negotiate a relabeling agreement with FDA. The firm has been advised that in view of its extensive and intensive promotion of the product as a remedy for serious diseases it will be required to label the product for these uses, prepare adequate directions for the uses, and obtain approval of an new drug application for the product; with the revised labeling. There is no realistic chance that the firm will develop evidence to provide a basis for approving an NDA.
Even though its investigations yielded evidence to provide fresh probable cause for a warrant the district recommended that the drug be seized pursuant to the civil seizure authority in Section 304 of the Act. The following points from the district's seizure recommendation are pertinent to this memo:
Although ~ would prefer to seize the offending product under the provisions of a criminal search warrant in accordance with the strategy hammered out by the Bureau of Drugs, G.C., and NYK, PHI, and DET, and thereby avoid the need to engage in possibly lengthy civil litigation while criminal, charges are being considered by the agency, we are reluctantly recommending civil seizure under the provisions of 304 (a) (1) because we believe that FDA has a responsibility to expeditiously remove this violative product from the market and in view of the fact that ACRA concurrence in the issuance of the search warrant has not been forthcoming despite many months of fruitless effort by all parties concerned.
The district's recommendation for a civil seizure led to a conference.THE CONFERENCE
We convened at two o'clock in the afternoon on the first day of April. The conference was chaired by Dan Michels. Merve Shumate represented the Office of Regulatory Affairs; Bill Jackson represented. EDOO; Arthur Levine was present for the Office of General Counsel: Clarence Waltrous represented New York District by telephone. Ray Hamilton and I rounded out the assembly. The focus of the conference was on what to do about the violations which have been documented with respect to Natcon's subsidiary, Household Products Company and New York District's seizure recommendation. Dan Michels opened the meeting by announcing its conclusion in the firmest possible terms: There will be no criminal prosecution for these violations; the agency will not seek a search warrant to seize the contraband drug or the evidence of responsibility which has been refused. Except for the writer and Arthur Levine, all assembled promptly concurred, (Arthur viewed the issue as a question of agency policy and not a matter to be decided by counsel.) In some cases the concurrences were terse. One concurrence was accompanied by extended remarks which flowed from well prepared notes. The reason stated for the decision was an alleged problem in communications with ACRA which resulted in a year's delay in action on the search warrant; recommendation referred to in New York District's seizure memo. The recommendation actually went to ACRA one year ago today.
After all concerned had concurred the writer was invited to speak. The writer spoke. At the writer's insistence, Arthur Levine spoke. He outlined enough options that Dan Michels had to concede he was not sure he completely followed all the ins and outs of the available choices, To my mind, t.'1e important thing about what Arthur had to say was that as long as the agency was seriously interested in prosecuting the criminal violations which have been documented, seizing the contraband property and the evidence of culpability which has been refused with a regular warrant offers tangible benefits. He also said the situation is not entirely free of risk; there is always the possibility of losing a criminal case, Otherwise, because it avoids the resource consuming pitfalls of civil discovery, use of a regular search warrant would conserve resources and avoid unnecessarily opening the criminal case up to civil discovery. (Because the violations documented by FDA’s investigations are exceedingly easy to prove, blatant, and very flagrant, the risk of losing these cases is exceptionally slight.)
My own presentation focused on the facts that have been developed, the availability evidence which would permit the agency to proceed with citation and further consideration of prosecution, and the lack of any need under these circumstances to open the matter up to civil litigation. I particularly emphasized that no matter what anyone's perception may be of alleged communications problems, the past problems detract not one wit from the availability, here and now, of an extremely attractive vehicle for prosecution. When I completed my presentation Dan reaffirmed the decision announced when the meeting opened; Clarence Waltrous agreed to update the district's seizure recommendation, and the conference with him terminated.
There ensued a discussion of agency enforcement policy, the history of this case, and several related matters. Arthur Levine expressed the opinion that whatever the stated reason for the decision of the Rinse case may be, the unseated but controlling reason is that the agency is not persuaded that prosecution is the appropriate remedy to deal with violations of this kind. I agree that it is an ironclad determination on the part of some FDA officials in ORA and EDRO to do everything possible to avoid prosecuting violations like these, not alleged difficulties in communications that have been the sticking point in the case of the Dr. Rinse Formula. I pointed out that the stated policy of the agency in CPG 7150.12 clearly favors the use of prosecution as the method of choice to control quackery violations. Merve Shumate disagreed. He said FDA must first get control over distribution of the contraband drug, pointing to the serious health hazard that would attend its continued distribution. Arthur Levine pointed out that the use of a regular warrant to seize the product would be as effective as a civil seizure for this purpose. He pointed out that other federal agencies often use regular warrants. FDA rarely uses the warrants and they are, therefore, viewed with an unusually high degree of concern – sometimes probably more than is justified.
Someone said I alone view violations of the type documented here as serious. I responded that countless experts will attest to the fact that promotion and marketing of worthless remedies for self treatment of such serious diseases as hypertension and glaucoma is flagrant, serious, and fraught with potential for extraordinary harm. Someone said the experts and I then stand alone. I called attention to the fact that the policy of the agency as stated in our Federal Register publication on compliance correspondence clearly indicates that prosecution is the remedy of choice when dealing with flagrant violations. Someone said statements of policy in F.R. publications that are not finalized do not represent agency policy, In fact, policy stated in FDA's Federal Register publications ordinarily binds the agency unless and until is specifically rescinded.
The assembled officials congratulated themselves and each other on their enlightened use of regular search warrants in other settings, for other purposes and the meeting adjourned.ANALYSIS
The decision to dispose instead of prosecuting the criminal violations that can reasonably be expected to have a number of effects. It should net the government exactly four thousand, one hundred-sixty eight and one half pounds of cereal. In turn, it will commit the government, quite unnecessarily, to another potentially enervating civil lawsuit against Milton Bass, the attorney who brought us the Diapulse case, the most wasteful, lengthy, and consumptive litigation in the history of the agency. (This case will probably not be quite as bad as was the Diapulse case.) The decision will spare the individuals who are personally responsible for the violations which have been established a well deserved encounter with the bar of justice. They may rejoice in the fact that their flagrant misconduct, is, as always; free from risk of any personal criminal liability. FDA’s failure to prosecute will also reconfirm the belief of other corporate executives in the business of serious, dangerous, commercial, and industrial health fraud that they are, for practical purposes, immune to prosecution for even the most flagrant violations; they stand to lose nothing except some cereal after they have exposed the public to significant risks and made substantial profits. Thus, the decision will encourage rather than deter similar misconduct throughout the industry.
I expect the decision will disappoint Dr. Steve Barrett of the Lehigh Valley Committee Against Health Fraud, Inc. Dr Barrett originally identified the Rinse problem to FDA and he voluntarily documented violations for us. He will see FDA's decision to make a civil seizure as another case where the agency bas chosen to do too little too late. He has already complained to me and to Dr. Novitch about FDA’s failure to prosecute violations connected with marketing the Dr. Rinse Formula. He has also expressed concern about the agency's customary use of ineffective, inefficient civil sanctions instead of potentially effective criminal cases to deal with serious and flagrant health frauds. He told me he intends to encourage Consumer Reports to publish an expose of what he believes to be FDA’s inept approach to the regulation of frauds that endanger the public health. He already has a title in mind, "The Sleeping Giant"; it would not look good for FDA. Even though he has been concerned, Dr. Barrett has been patient, presumably because I have assured him that the agency has continued to move slowly forward in the investigation of his complaint, and that there has been no basis for his supposition that 'higher ups" had killed any prosecution cases. Dr. Barrett will probably go bananas when he sees that FDA has once again chosen a civil, remedy that is essentially devoid of potential for deterrence, and that fails to deal with the criminal violations he has documented for us. He is acutely aware that the evidence he obtained sets the stage for a second offense felony case against Linblads, Inc. a mid-western wholesaler of dangerously deceptive unproven remedies for serious diseases and a firm with an established history of proven violations.CONCLUSIONS
I will spare the reader my own assessment of the merits of this decision. I have gone into somewhat more detail L'1. this memo than I would if I wholeheartedly supported it. There are two reasons for this. First, I earnestly believe that somewhere in this agency there must be a sensible person who will read this memo and recognize that the course of action chosen here is not the most efficient, not the most effective, and not as well aligned with the agency's desire to deter violations and get the most bang for the buck as it should be. I recognize that I might be alone in my belief, just as I am alleged to be alone in the belief that the violations documented here are serious and flagrant. It is true that I may be wrong. But Dr. Pangloss cannot be wrong, Pangloss says this agency is, by its own admission, the best managed federal agency in government. So, I continue to hope for decisions that favor reasonable innovation, genuine deterrence, and constructive change. In this situation, far fewer resources would be needed to seize the contraband drug with a regular warrant and proceed with the small, well documented, nicely focused criminal, cases that are ripe and ready for action, than will be needed to maintain a contested civil case against Milton Bass. Who wants another case that sends the wrong message to those whose business it is to prey upon the sick with useless, dangerous unproven remedies?
By other reason for developing this memo, assuming the decision stands, is to assure that those who made it and those who concurred in it get one hundred percent of the credit for it. I hope this memo will help assure that the laurels will not be misplaced.PROCEDURAL NOTE
Please rote that; this is not a Memo Of A Conference but a Note For The File. I believe someone else is preparing a brief memo of the conference. Because it is a note, I have limited the distribution of this memo, I would have no objection to sharing it with everyone who participated in the conference (or, indeed, to its publication) but I leave the decision as to whether others should be included in its distribution at this time to those who receive it. My objective here, as always, is to give quiet deliberation and constructive change every chance of success and to avoid unnecessarily rubbing salt in open wounds, even if they be in bleeding hearts, which may be fogbound by misperception, and accompanied sometimes by crocodile tears.
Paul J. Sage
HF 2 (Dr. Novitch)
HFC 1 (Mr. Hile)
HFD 1 (Dr. Crout)
HFD 1 (Dr. Meyer)
HFD 300 (Mr. Michels)
HFD 302 (Mr. Hamilton)
HE'D 302 r/f.
HFD 300 r/f
This page was posted on June 19, 2011.