Of course, that proceeding is not as quick as a proceeding that does not proceed that way. Now, the suggestion or opinion of Dr. Dunbar that within a few months they could have settled that case is a mere opinion of his. Then they would have had the right of appeal, to the circuit court of appeals, and then as to certiorari to the Supreme Court. Certainly when the matters get into court, there is no difference, except that our statute specifically provides that the Federal Trade Commission cases in the circuit courts of appeals shall be given precedence over all other cases and shall be expedited in every manner possible. Mr. REECE. If you will permit, Judge, since you referred to what I said before, I would like to read a few sentences: The bill amending the Federal Trade Commission Act and dealing specifically with advertising is before you for action. It is to be followed by a food and drug bill, which I, as a member of the subcommittee believe will give the Food and Drug Administration of the Department of Agriculture ample authority with which to effectively regulate and control the food, drug, device, and cosmetic industries. Mr. DAVIS. Yes; that is right. I think, by the way, you made a very fine speech on that bill. Mr. ROGERS. Judge, there is just one other matter that I think you could clarify for me: Now, you say you have exclusive jurisdiction in the Federal Trade Commission on advertising? Mr. DAVIS. Yes, sir. Mr. ROGERS. Now, will the passage of the Reece bill take away that power? Mr. DAVIS. Well, it would in part. Mr. RABIN. Mr. Rogers, I think the passage of this bill may let the advertisers ride right through the middle. Mr. DAVIS. I will explain in what respect it will when I get to the question. Mr. SADOWSKY. Mr. Cassedy, you may proceed. Mr. CASSEDY. I have but very little more, and if you will permit me to go along now without so many questions, at least until I get through with a subject, I think I can go right fast. Now, Congressman Reece has mentioned on several occasions the fact that the Food and Drug Administration has a laboratory and is better equipped to deal with therapeutics than the Federal Trade Commission. I want to point out to both Congressman Reece and to the other members of the committee, that they do have a laboratory over there that is a fine one. In that laboratory, they make bacteriological tests, they make pharmacological tests, and they make chemical analyses of any type of products, usually foods, drugs, and cosmetics. I do not know about devices. I want to say further that the Federal Trade Commission not only has access to that laboratory just as much as they do, but they do use it and have used it on many occasions and properly compensate the Food and Drug for such use. Now, with reference to therapeutics. Therapeutics, as I understand it, means the action and effect of drugs on persons. We have the same sources to get material with regard to therapeutics as the Food and Drug Administration. They do not deal with therapeutics in that laboratory, and their doctors, or chemists, or whoever they have over there, do not testify as witnesses. They do similar work to that done by the two doctors and the chemist that we have at the Federal Trade Commission in our Medical Advisory Division. I want to point out, if I may, the sources of material in any case involving these products, which we both have, that is, both the Food and Drug Administration and the Federal Trade Commission. There is no difference. The scientific facts about the nature of foods, drugs, cosmetics, and devices are obtained for legal use from the following sources: 1. What the manufacturer or advertiser represents his article to be. 2. From the label and labeling, in which is required by law to be listed all active ingredients of a drug, and the amount of certain of these ingredients, and all of the ingredients of foods for which official standards of composition have not been officially determined and published. 3. From the extensive, official and unofficial compendia of drugs. And I might name those: The United States Pharmacopoeia, and the National Formulary, are the official compendia. There are many nonofficial compendia. One of them that is very prominent is called, New and Nonofficial Remedies, published by the American Medical Association. 4. From the available results of the many analytical laboratories which have in the past extensively examined and analyzed these commodities. 5. From the extensive scientific literature which deals with these commodities. 6. From personal or other contact with individuals or groups who have made scientific studies or conducted investigations on these commodities. 7. From reports of scientists in our schools and hospitals who volunteer assistance in the study of these commodities. 8. From scientists in our schools and hospitals who agree to make such studies on the basis of compensation by the Commission. 9. From reports of studies made by the Bureau of Standards which are compensated for by the Commission. 10. From such reports made by the United States Public Health Service. The Commission compensates for such service. 11. From such reports made by the Food and Drug Administration. Foods, drugs, cosmetics, and devices cannot be extensively advertised and attain wide distribution at this time unless at least their general composition and nature is revealed by the manufacturer or advertiser or is otherwise readily obtainable. For the newer food and drug preparations scientific literature almost always reveals adequate information with respect to their composition and identity. The therapeutic or other effects of a food, drug, device or cosmetic are obtained from the following sources: 1. The vast scientific reports giving the results of use of the article or of preparations of entirely comparable composition. 2. Personal and other contacts with those scientists who are outstanding experts whether they are attached to our universities or hospitals or privately employed or are in the employ of local, State, or Federal Government-city, county, and State health departments, boards of pharmacy, United States Bureau of Standards, United States Fublic Health Service, Food and Drug Administration, Bureau of Animal Industry, Bureau of Agricultural and Industrial Chemistry, Bureau of Human Nutrition and Home Economics, and other similar agencies of Government. 3. And the vast store of recorded scientific testimony dealing with therapeutics in its broadest sense where experts have related under oath facts and opinions with respect to these commodities and have been subjected to adequate cross-examination. In the Federal Trade Commission the Director of the Medical Advisory Division during the past 17 years has participated in the preparation of the scientific phases of literally thousands of cases brought before the United States district courts-that is, while he was in the Food and Drug Commission-and the Federal Trade Commissionsince he left that Commission-involving foods, drugs, cosmetics, devices, labeling, and advertising-and has had an unequaled opportunity to study the vast amount of expert scientific evidence presented in these cases-pharmaceutical, chemical, bacteriological, pharmacological, and clinical. This source of information about therapeutics and therapeutic evidence is invaluable in making accurate cases before the Commission, and when such accurate evidence is finally introduced into the records it is quite conclusive and difficult to surmount. The Medical Advisory Division's principal chemist has during the past 14 years had similar opportunities in his special fields of the chemistry of foods, drugs, and cosmetics and in the broad field of human and animal nutrition. I might say the chemist at the Commission has been with the Commission about 7 years, and I understand about 7 with the Food and Drug Administration. The entire vast storehouse of scientific information and opinion available in this country with respect to the therapeutic and other effects of foods, drugs, cosmetics, and medical devices is readily available to the Federal Trade Commission through its Medical Advisory Division on exactly the same basis and to the same extent as it is available to the Food and Drug Administration for use in its procedure or to the United States district courts when trying cases brought under the Food, Drug, and Cosmetic Act. Now, I want to point out one thing about my practical experience in dealing with that subject in these cases that I have mentioned, the Bromo-Seltzer case, the Miles Laboratories case, the Larned Corp. case, the Capudine Chemical Co. case, and some others involving medicinal preparations. Through those sources that I have named we have compiled large volumes, for instance, of the scientific literature dealing specifically with bromides and acetanilid. On the basis of that scientific literature you not only have an opportunity to study the therapeutics, or rather the therapeutic effects, but you have the opportunity also to study the toxic effects that are harmful or poisonous to the human system, and to study the literature not only favorable to the Commission's interest but also contrary to the Commission's interest. On the basis of the consensus of such scientific evidence, the Commission proceeds. Now, when any comparison is drawn between the Commission's procedure that goes into therapeutics and the Food and Drug procedure that goes into therapeutics, I would say that the Commission would have the same sources that the Food and Drug Commission has. They go out into the field and get the best scientists in whatever subject they are interested. So do we, no matter where they are. I might say that as to the Larned Corp., I have the testimony taken at San Francisco on May 11, 1945, with regard to acetanilid. One of the outstanding experts of the United States, Dr. Paul Hanzlik, testified in that regard. I also have, in the Larned case, the testimony taken at Los Angeles, of Dr. Sheldon Payne, one of the outstanding experts, testifying there. Dr. Payne was for years connected with the Duke University Hospital in North Carolina and is now practicing medicine out there. Mr. REECE. What is his specialty at this time? Mr. CASSEDY. His specialty? He now deals with women's diseases. Mr. REECE. What phase of women's diseases? Mr. CASSEDY. Mr. Congressman, you may have the copy of the testimony if you like, and the committee may have an opportunity to determine what his evidence is all about. He is fully qualified. Mr. REECE. I do not know. What was the particular subject on which he was testifying? Mr. CASSEDY. About the therapeutic effects and toxic effects of acetanilid, and in some regard as to bromides, based upon work that he had done over a period of several years at the Duke University Hospital. Mr. REECE. Does the record reveal the particular type of women's diseases in which he is now applying himself as specialist? Mr. CASSEDY. Yes, sir; but that has nothing to do with the subject of bromides or acetanilid. Mr. REECE. I did not know his name, but I had read something indicating his specialty now is far from dealing with that subject. Mr. CASSEDY. But his testimony was based upon his outstanding experience, which is highly regarded in the medical world, dealing with acetanilid. He was connected, in fact, with the leaders of the whole scientific field in that regard. Now, I have also the testimony of Dr. Max Levin, a Johns Hopkins man who was with the Phipps Institute for a number of years over at Baltimore, who testified in the Capudine case with regard to bromides producing mental derangement. Mr. REECE. Mr. Chairman, could I take just a minute? Mr. SADOWSKI. Just a moment, Mr. Reece. Have you concluded your statement, Mr. Cassedy? Mr. CASSEDY. I have reached the point of discussing Dr. Dunbar's letter. May I file this with the committee for its use? Mr. SADOWSKI. Yes. (The letter is as follows:) Hon. B. CARROLL REECE, FEDERAL SECURITY AGENCY, House of Representatives, Washington 25, D. C. DEAR MR. REECE: Let me apologize for the delay in replying to your letter of June 14, which is due in part to its failure to reach us until June 21. You refer to Administrator McNutt's letter of May 3 to Chairman Lea on H. R. 2390 and ask for a further statement of the difficulties referred to in the Administrator's letter that have arisen from the differing procedures and divided responsibility for determining the truth or falsity of identical representations in labeling and advertising. At the outset let me assure you of my heartiest sympathy with your purpose of introducing the bill. I know you had in mind the elimination of duplication and conflict that impair consumer protection and create confusion in the regulated industries. My own views on the character of legislation needed to accomplish this purpose have not changed since our recommendations were made to the Congress in connection with the bill which became the Federal Food, Drug, and Cosmetic Act. In a statement to the Senate Committee on Commerce in March 1935, Mr. W. G. Campbell, who was then Chief of the Food and Drug Administration, said: "If I may, with propriety, refer to the recommendations of the proprietarymedicine manufacturers, the spokesman for certain advertising media, and the Chairman of the Federal Trade Commission, to assign to that organization the enforcement of the advertising provisions of the act, I will say that I am more concerned in the enactment of a law whose terms are adequate for the protection of the consuming public than I am the designation of the governmental body by which it will be enforced. I urge that there be no division of responsibility in the control of adulteration, misbranding, and false advertising of food, drugs, and cosmetics. These three offenses are too intimately interwoven to permit effective treatment separately. The briefest of administrative experience is sufficient to condemn divided administrative authority. Such an arrangement presumes continued harmonious cooperative relationship which cannot possibly exist indefinitely. Any impairment of such relationship will be reflected in the inefficient enforcement which will inevitably result. If the Federal Trade Commission is qualified to administer this law more satisfactorily than the Food and Drug Administration, transfer all phases of its enforcement to that body. As a preliminary to such action I urge also that modification be made of the procedure imposed on it in the act for regulation of trade practices. The issuance of orders to cease and desist is not sufficient to suppress false advertising or to prevent the marketing of adulterated and misbranded articles. So long as an offender realizes that he is free from a visitation of penalties until after he shall have received an invitation to desist, there will be a total absence of incentive voluntarily, through fear or otherwise, to comply with the law. There is need for the exercise of a deterring influence." Events have abundantly confirmed Mr. Campbell's predictions, except that inharmonious relations have not developed. There has been a free interchange of information between the Federal Trade Commission and the Food and Drug Administration. In some cases scientific investigational work has been done for the Commission in the Administration's laboratories, since the Commission is not equipped with laboratory facilities. But inevitably, there have been differences of opinion between the two agencies in evaluating scientific evidence essential to the control of the regulated commodities, and in determining the meaning to the public of advertising and labeling claims. Some of the more serious difficulties arise from such differences of opinion. These have occurred with respect to many products, but only a few illustrations will be given. The Willard Tablet case is one. On April 8, 1937, the Commission filed a complaint against the Willard Tablet Co., alleging that the advertising representations concerning Willard Tablets were false. On January 5, 1939, the Commission issued a cease-and-desist order. No appeal from the order was taken and the company submitted a report of compliance, receipt of which was acknowledged by the Commission on April 7, 1939. In November 1942 we instituted a seizure action under the Food, Drug, and Cosmetic Act against a shipment of Willard Tablets alleging on the basis of what we considered to be conclusive scientific proof that the representations in the labeling were false and misleading. These representations were identical with those submitted in the report of compliance to the Commission. Both the district court and the circuit court of appeals held that the doctrine of res adjudicata applied and that action under the Food, Drug, and Cosmetic Act was barred. In its decision the circuit court said: "We, therefore, have the incongruous situation of one branch of the Government approving the method now pursued by the claimant and another branch seeking to condemn. This is, to say the least, placing claimant in an embarrassing situation and should be avoided if possible" (141 F. (2d) 141, 143). |