ployment-from design, pattern, and mold making to selecting and shipping will suffer-this at a time when we are seeking ways and means to bolster employment.

In summary, the consumer can and should be protected from deceptive merchandising practices. This can be done by proper labeling laws and better enforcement of existing laws. Section 3 (e) (1) and (2) should be eliminated or, in the alternative, amended to exclude glass containers.

HON. WARREN G. MAGNUSON,

Chairman, Senate Committee on Commerce,
Washington, D.C.

THE PROPRIETARY ASSOCIATION,

Washington, D.C., 28, 1965.

DEAR SENATOR MAGNUSON: As an interested party in S. 985, we respectfully request that the attached statement of the Proprietary Association be filed as a part of the record of the hearings of your committee on this bill.

We sincerely appreciate this opportunity to make our views on this legislation known to you and the members of your committee. Respectfully submitted.

HOWARD A. PRENTICE.

STATEMENT OF THE PROPRIETARY ASSOCIATION

The Proprietary Association has its office at 1717 Pennsylvania Avenue NW., Washington, D.C. It was organized in 1881 and has been in continuous existence ever since. Its active members-97 in number-are engaged in the manufacture and distribution of proprietary medicines. These are medicines which are completely compounded, packaged, and labeled with directions for use by consumers. They are over-the-counter items; items which are not restricted by law or practice to prescription sale. There are 130 associate members. They do not manufacture and distribute proprietary medicines, but are interested, as suppliers of various materials and services, in the manufacture and distribution. The Proprietary Association is quite in sympathy with the stated purpose of the bill-S. 985-to prevent the use of unfair or deceptive methods of packaging or labeling of certain consumer commodities. The association believes that medicines and pharmaceutical preparations are now adequately covered in these respects by existing law. Its position, therefore, is that S. 985 should be amended to exempt these products from its provisions-not on the ground that they should not be regulated in the subject matter of the bill, but that under the Federal Food, Drug, and Cosmetic Act and the Federal Trade Commission Act they are or may be adequately so regulated.

INTRODUCTORY

The question of amending the bill to exclude medicinal and pharmaceutical preparations follows upon an introductory question: Whether the public interest would be served by subjecting these products to the added regulation proposed in S. 985. The added regulation would be superimposed upon that now exercised by the Food and Drug Administration and the Federal Trade Commission. True, these are the same agencies which would be charged with the enforcement of S. 985, but the question is whether there is need to vest in these agencies the additional and different regulatory powers which the bill would provide.

The question cannot properly be disposed of by the fact that the agencies are the same under the bill as under the existing law, or by the fact that the subject matter of the bill is much the same as the existing law. The question persists, and it is lighted up by the principle that laws should be enacted only on the basis of substantial public interest and demonstrable need.

The question becomes even sharper when the pattern of enforcement is varied between the existing law and the bill. The pattern of the Federal Food, Drug, and Cosmetic Act is in the principal respects of present interest--to state the requirements in the statute and to empower the Food and Drug Administration to enforce them in the courts. The bill interposes that the requirements be stated in regulations to be promulgated by the enforcing agencies.

In the 88th Congress, on September 29, 1964. Senator Hart, as chairman of the Subcommittee on Antitrust and Monopoly of the Senate Committee on the Ju

diciary, transmitted a report of the subcommittee entitled “S. 387, the Truthin-Packaging Bill." It was a committee print and the printing of it had been approved by the Committee on the Judiciary at its meeting of August 4, 1964. S. 985 is the current edition of the bill and, in substantive provision, is much the same as S. 387 of the last Congress.

Page 9 of the report listed 11 practices which it said had been established at the hearings on S. 387 as being "abuses" which S. 387 was designed to eradicate. These 11 practices apparently were not related to the marketing of drugs. At least. the report does not indicate that they were related in any significant degree. And the report does not set forth any significant inadequacy of the Food, Drug, and Cosmetic Act to deal with any of these practices if any of them do relate to the marketing of drugs.

The drug industry and its products have been subject to increasing governmental regulation with respect to manufacture, labeling, and distribution. There has been steady development since June 30, 1906, when the first Federal Food and Drugs Act was enacted. Numerous amendments, including complete revision of the act on June 25, 1938, and a very substantial revision of it on October 10, 1962, have enlarged Federal control to an extent not yet fully realized, for the drug amendments of 1962 have not yet been fully implemented and revealed. Industry and Government have yet to develop and realize the full extent of the Federal law as it now pertains to the manufacture, distribution, and labeling of drugs.

Regulation of these products will inevitably expand under the present statute and the present regulations. That is true in the nature of the subject matter. It will happen even if there is no further amendment to the law. But further amendments are already forecast. H.R. 2, identified as the "Drug Abuse Control Amendments of 1965" has already passed the House. It pertains to barbiturates, amphetamines, and other drugs of similar effect which the Secretary of HEW by regulations will specify. And there are proposals for still further controls.

PRESENT CONTROLS

Subject to continuing growth through judicial and administrative intepretation of the existing law, as amended in 1962, the present known controls pertaining to drug packaging and labeling include the following:

1. The definition of terms in section 201 of the Federal Food, Drug, and Cosmetic Act are broad and elastic:

"(a) 'Drug' means, among other things, articles used in the diagnosis, cure, mitigation, treatment, or prevention of disease in man or other animals. "(b) 'Label' means matter displayed on the immediate container. "(c) Labeling' means matter accompanying the article.

"(d) 'Misbranding' includes not only representations expressly made but the failure of labeling to reveal facts material in the light of representations contained in the labeling or material with respect to consequences which may result from use of the labeled article under the conditions of use stated or under such conditions as are customary."

2. The elements of misbranding are comprehensive and the requirements are broad and precise.

"(a) Labeling must not be 'false or misleading in any particular' (sec. 502 (a)).

"(b) The package must bear a label containing the name and place of business of the manufacturer, packer, or distributor and an accurate statement of the quantity of the contents in terms of weight, measure, or numerical count (sec. 502 (b)).

"Elaborate regulations, going into much detail, affect label compliance with the statutory provisions (21 CFR 1.102).

"(c) Information on labels and in labeling must be prominently placed 'with such conspicuousness (as compared with other words, statements, designs, or devices, in the labeling) and in such terms as to render it likely to be read and understood by the ordinary individual under customary conditions of purchase and use' (sec. 502(c)).

"Elaborate regulations, going into much detail, affect label compliance with the statutory provisions (21 CFR 1.103).

"(d) The label must bear the 'established name' of the drug and, if it consists of two or more ingredients, the established name (and in some cases the quantity) of active ingredients (sec. 502 (e)).

"Elaborate regulations, going into much detail, affect label compliance with the statutory provisions (21 CFR 1.105).

"(e) If it is a drug the name of which is recognized in an official compendium, it must be packaged and labeled as prescribed in the compendium (sec. 502 (g)). **(f) If a drug has been found by the Secretary to be liable to deterioration, it must be packaged in such form and manner, and its label bear such precautions as the Secretary shall, by regulation, require as necessary for the protection of the public health (sec. 502 (h)).

"(g) The container must not be 'so made, formed, or filled as to be misleading'; the drug must not be an imitation of another drug; it must not be offered for sale under the name of another drug (sec. 502 (i)).

"Under the pending H.R. 2, Drug Abuse Control Amendments of 1965,' it must not be a 'counterfeit drug' which is defined (sec. 9(b) (2)):

The term "counterfeit drug" means a drug which, or the container or labeling of which, without authorization, bears the trademark, trade name, or other identifying mark, imprint, or device, or any likeness thereof, of a drug manufacturer, processor, packer, or distributor other than the person or persons who in fact manufactured, processed, packed, or distributed such drug and which thereby falsely purports or is represented to be the product of, or to have been packed or distributed by, such other drug manufacturer, processor, packer, or distributor.' "(h) The advertising and labeling of prescription drugs, pursuant to the 1962 amendments, must contain the established name 'printed prominently and in type at least half as large as that used for any trade or brand name thereof,' the ingredients and 'such other information in brief summary relating to side effects, contraindications, and effectiveness as shall be required in regulations' (sec. 502(n)).

(i) A drug which is not safe for use other than on prescription must be labeled Caution: Federal law prohibits dispensing without prescription,' (sec. 503 (b) (4)).

"(j) Regulations require, when appropriate, such statements as 'For prescription compounding'; 'Caution: For manufacturing, processing, or repacking'; ‘For investigational use'; 'Diagnostic reagent-For professional use only,' (21 CFR 1.103 (j), (k), (1)).”

3. Packaging and labeling are subject to review and approval under the provisions of section 505 as to new drugs. The act provides for the submission of labeling material and the regulations make detailed requirements (21 CFR 130). 4. Section 507 requires certification of antibiotics, and extensive regulations prescribe numerous labeling and packaging requirements (21 CFR 141 et seq.). 5. Section 510 requires registration for the manufacture, processing, or repackaging of drugs and requires factory inspection at least once every 2 years.

6. Section 704 provides for inspection of factories including the materials therein and the labeling pertaining to them.

7. Section 801 forbids importation of any drug article which is misbranded. It permits exportation when labeled on the outside of the shipping package to show that it is intended for export.

CONCLUSION

The foregoing is only an outline-and an incomplete outline of the present governmental control over the packaging and labeling of drugs. But the outline is sufficient to show that drug products are already thoroughly covered as to packaging and labeling and that the additional controls proposed in S. 985 are not necessary for the adequate regulation of these products.

Accordingly, drugs should be included among the articles which S. 985 excludes from the definition of the term "consumer commodity." This could be accomplished by the following simple amendment:

Page 13, line 1, insert after the word "Act" the following:

"(C) any drug subject to the packaging or labeling requirements of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.) ;".

Change present (C) to (D) and present (D) to (E).

Respectfully submitted.

THE PROPRIETARY ASSOCIATION,

By HOWARD A. PRENTICE,

Executive Vice President and Treasurer.

Hon. WARREN G. MAGNUSON,

CARNATION Co.,

Los Angeles, Calif., May 21, 1965.

Chairman, Senate Commerce Committee,

Washington, D.C.

DEAR SENATOR MAGNUSON: Enclosed is the formal statement of Carnation Co. opposing S. 985, pending in your committee.

We respectfully request that you communicate our views to the members of your committee.

Yours very truly,

E. S. HARTWICK, Vice President.

CARNATION Co. STATEMENT IN OPPOSITION TO S. 985

A great deal has been said and written supporting and opposing the Hart bill. Carnation Co. requests that the committee consider this, its statement of opposi tion, even though some of its points have been made by others.

The bill has a laudable purpose—protection of American consumers. purpose is justified, however, only if one accepts a syllogism:

This

1. There are no moral standards in mass marketing and distribution, and particularly, in packaging.

2. The consumer, having needs to fulfill but having no legal defense system, must accept the results of amoral niass marketing and distribution.

3. Therefore, the consumer is the victim of this lack of morality, and has a right to the protection of the law.

The arguments against this are both general and specific. The specific arguments have been made by others and are reiterated here in summary terms. The general arguments boil down, really, to three:

1. While there are exceptions (a statistical inevitability), packaged products made by national manufacturers and distributed through mass marketing are not deceptively packaged.

2. If one concludes that the few exceptions to the first statement require legislative action, the Hart bill is not the answer. There are adequate existing laws, both Federal and State, covering package and label regulation. In the case of the Federal Government, the very agencies vested with police power by the Hart bill. FDA, and FTC, have authority now under the Federal Food, Drug, and Cosmetic Act and the Federal Trade Commission Act, and they have exercised their respective powers. The States, their officials working under broad statutes and cooperating through the National Conference on Weights and Measures and the National Bureau of Standards, are actively policing the packaged products of national manufacturers.

3. Even if there were not such existing laws against deceptive packaging and labeling, the extreme mandatory measures provided in the bill go far beyond what is reasonable necessary to control the relatively few manufacturers and the relatively few packages involved in real deception. The remedies prescribed by the bill would be harder on the patient than the disease, real or imagined. Despite the provisions of section 7 respecting cooperation with State authorities, a reading of the entire bill leads only to the conclusion of Federal preemption.

Now, briefly, to the specifics. They are concerned with the positive, mandatory controls established by section 3(c). Here we deal not with the traditional "thou shalt not" approach to conduct found not to be in the public interest. Instead, the two Federal agencies are to define in their regulations what is in the public interest, and then to exact compliance-a "thou shalt" approach.

Completely developed regulations under section 3(c) would result in standardized packaging of the typical products found on the supermarket shelf. They could not, because of the definition of "consumer commodity" in section 8(2), cover products having what might be called a long service life in the home. Why the distinction? The logic of consumer protection would seem to include all durable goods, from scissors up to and including automobiles. Regimented standardization of products, be they food or other products, is not acceptable to the consumer. Is the singling out of the immediately consumable products only the first step in the planned regimentation of the American consumer?

There are two awesome consequences of the standardization of packages intended by the bill. First, there is the economic aspect. Conversion of container sizes to meet regulatory standards would mean "retooling" of package manufac turing equipment, filling equipment, and labeling equipment. Carnation Co. estimates that a change in the size of the container of only one of its products,

evaporated milk, would result in a capital expenditure of about $8 million. This cost would eventually be borne by the consumer.

The second aspect is technological, and is involved in the conversion cost estimate. The many and various products of the industries which would be affected by the bill have many different bulk densities, which cannot be standardized. These differences have not only been accepted, but are demanded, by the consumer. Housewives have demonstrated that they want a variety of product densities and package sizes, depending on end use. The manufacturers, then, provide these differences to satisfy the consumer. The standardization proposed by the bill would deprive the consumer of choise, apparently to make the arithmetic of shopping easier. This solves no problem. It might make shopping easier, but it would also make it unsatisfactory to the consumer. Furthermore, this enforced uniformity would make it impossible for the small businessmen to introduce a new product on the market. He could use no dramatic packaging or labeling, but would simply line his product up on the shelf with the substantially identical ones of his established competitors. And consider two competing products, with similar functions but different bulk densities, sold at prescribed standard weights. Would the lighter product, necessarily packed in a larger container, be deceptively packaged?

Another drawback in standardized package content, size, shape, and labels is the predictable effect on new product development. The affected industries spend large sums of money developing new products and containers in their continuing competitive race to produce something more convenient for consumer use. This race involves not only "building the better mousetrap," but also getting it on the market first. Under a rigid set of standardizing regulations, the innovator would have to take his new products to the appropriate agency, either to amend existing standards or to add to them to provide coverage of the new product. By the time the innovator had cleared this hurdle, he would probably have lost his market leadtime, on which he must count to recoup his research and development cost. To the extent that this potential frustration would discourage new product and package development, the country would be the poorer for the passage of the Hart bill.

We need not dwell on the insult to the American consumer's intelligence implicit in the whole concept of this sort of legislation, it is obvious.

The proposed bill makes ample provision for the implementation of its sponsors' view of what is good for the consumer; but, we submit, it fails to express the consensus of American consumer opinion of what is good for the consumer. And it certainly cannot be said to express what is best for the preservation of a free economy-or a free society. Choice of alternatives is implicit in freedom of action.

This bill, in limiting alternatives for both the consumer and the manufacturer, abridges the rights of both in the name of consumer protection from a vastly overdrawn, overdramatized industry bogeyman.

SELLERS, CONNER & CUNEO, Washington, D.C., May 26, 1965.

Re Senate bill 985.

Hon. WARREN G. MAGNUSON,

Chairman, Senate Committee on Commerce,
Washington, D.C.

DEAR SENATOR MAGNUSON: I am enclosing a statement in opposition to Senate bill 985 on behalf of the Chemical Specialties Manufacturers Association, Inc. I request that the committee give consideration to this statement and make it a part of the record of the hearings which were recently concluded.

Very truly yours,

ROBERT L. ACKERLY,

Counsel to Chemical Specialties Manufacturers Association, Inc. STATEMENT SUBMITTED BY THE CHEMICAL SPECIALTIES MANUFACTURERS ASSOCIATION, INC., NEW YORK, N.Y.

The Chemical Specialties Manufacturers Association is a trade association with more than 500 members engaged in the production and distribution of chemical specialty products for retail sale. The six divisions of the association are descriptive of the types of products which are produced and sold by its members.