UNIVERSITY OF CINCINNATI

COLLEGE OF LAW

P.O. BOX 210040

CINCINNATI OH 45221-0040

**JAMES T. O'REILLY**

**Visiting Professor of Law**

**(513) 556-0062 (office)**

**(513) 556-1236 (fax)**

**(513) 761-9398(home)**

**May 24,1999**

**Dockets Management Branch**

**Food & Drug Administration HFA-305**

**5630 Fishers Lane, Room 1061**

**Rockville MD 20852**

**Re: Dkt. 99N-1174**

**Dietary Supplements**

**Dear CFSAN:**

**These individual comments will focus on item 7 of your invitation for
written comments. I regret that I cannot attend the June 8 meeting
because of other commitments.**

**\
*"7. Given FDA's limited resources, what mechanisms are available, or
should be developed, to leverage FDA's resources to meet effectively the
objective of the strategy?"***

**Enforcement by well-publicized selective deterrence is the best
strategy in light of the ill-considered DSHEA law's handcuffs on FDA
civil enforcement. In summary, I propose the Commissioner adopt a five
step program:**

**1. Set a goal of three targeted FDA-DoJ criminal prosecutions each
fiscal year, against high-profile dietary supplement companies and their
chief executives using traditional FDA case law for prosecuting
fraudulent and misleading statements, and enhanced prison sentences
under the Sentencing Guidelines for the executives. Deterrence by
criminal prosecution has remarkably sobering effects. FDA has long
received judicial deference to its broad interpretation of "misleading"
in section 403 and it won several criminal cases in similar
circumstances of excessive efficacy claims in the past. Publicity about
the criminal actions will deter other violators.**

**2. Set a goal of at least three FDA-assisted, FTC-initiated injunctive
actions each fiscal year demanding disgorgement of profits and consumer
restitution against high-profile dietary supplement companies; their
advertising agencies; and the chief executives of both entities, for
materially misleading advertising of dietary supplements. Attack the
advertising agency as FTC has done in the past. The deterrent effect
will be quite clear to infomercial producers and "creative" claims
writers nationwide. A little enforcement will go a long way.**

**3. Set a goal of at least three FDA-assisted, USPS Post Inspection
Service enforcement cases each fiscal year against high-profile dietary
supplement companies and their chief executives using traditional USPS
mail fraud case law, to block mail delivery of further promotional
mailings and provide consumer refunds for the use of the mails in making
fraudulent and misleading statements about efficacy of dietary
supplements. USPS tools are extremely effective because the mail-hold
relief and administrative hearings are faster and more impactful than
court cases.**

**4. Set a goal of at least three FDA-assisted Customs Service punitive
enforcement cases each fiscal year against the importers of record and
consignees of imported active ingredients that are offered for
importation with labels and shipping papers falsely classifying them as
foods and/or containing package labels making false claims of dietary
supplement efficacy. The power of OASIS to block the fraud by choking
the supply chain is underutilized.**

**5. The Commissioner should convene quarterly or more frequent meetings
of an Elder Fraud Enforcement Forum in which policy level managers of
the FDA, FTC, USPS, Customs, and the Justice Department's Consumer
Affairs and Fraud Sections meet with the National Association of
Attorneys General to coordinate the deterrence of misleading claims by
dietary supplement marketers.**

**BASIS FOR THE RECOMMENDATIONS**

**1. Some dietary supplement marketers deserve to be punished for their
fraudulent taking of money from consumers, especially elders, who will
not obtain the claimed health benefit from the product (and who may be
harming their health by eschewing NDA drugs in favor of consuming the
diet supplements in reliance on product claims).**

**DSHEA is a discontinuity in the history of American consumer
protection legislation. At the very end of a long congressional session,
after much misinformation and elaborate lobbying efforts, Congress chose
to restrain FDA's civil enforcement power over dietary supplements. This
flawed aberration contravened FDA's history of consumer protection.
DSHEA shields the less scrupulous marketers of these products from the
kinds of control measures that courts had frequently endorsed when
charges were brought by FDA food enforcers over many decades.**

**The Commissioner should choose to act before the vacuum of regulatory
authority is filled with stories of fraud and overreaching by marketers.
Acknowledging that dietary supplement marketers won the DSHEA
legislative fight, but observing the misleading and fraudulent sales
pitch to elders that pervades this field of marketing claims today, the
FDA should act. The Chief Counsel should dust off the [Park]{.underline}
and [Dotterweich]{.underline} doctrines and ask the Justice Department
to bring criminal informations or indictments against the most willful
and egregious marketers. (A goal of at least 3 cases a year is modest
but manageable with current resources.)**

**The individual criminal power given FDA by courts interpreting the
FD&C Act carries none of the DSHEA constraints and has all of the ripple
effect of deterrence that the [Park]{.underline} doctrine of individual
liability had on food warehouse owners in the 1970s and 1980s. A
Sentencing Guideline for CEO prison time and for consumer restitution
should make clear that criminal fraud does not pay. CFSAN's Question 7
asked about "leverage". Deterrence with a bite is the best way to
leverage the statutory power to punish miscreants, despite the flaws of
DSHEA.**

**2. The FTC's civil injunctive power to order consumer redress and
disgorgement of profits by the violative marketer is a potent weapon
untouched by DSHEA's constraints on FDA. But historic patterns of
FTC-FDA cooperation need to be attuned to the DSHEA constraint on FDA's
civil statutory options.**

**Where an excessively aggressive efficacy advertisement for a
nutritional product is aimed at a particularly vulnerable subpopulation
such as the elderly, the FTC has the policies in place to support
enforcement; it needs the laboratory and witness support that CFSAN and
the FDA National Forensic Chemistry Lab can provide. When the FDA
"lends" the technical support to FTC it is acting within statutory
authority and interagency MoU's and does not need to deal with the flaws
in DSHEA limits on FDA civil remedies.**

**3. Many of the misleading advertising claims disseminated to elders
and other credulous subpopulations of diet supplement users invite
response by mail, or phone with product delivery via mail. Postal
inspectors have statutory authority to administratively prosecute such
frauds. They need FDA technical support to use special remedies such as
freezing further deliveries of mail to the marketer and barring the
marketer from using bulk mail in furtherance of its scheme. USPS also
has the expertise to deliver a fully supported mail fraud case to local
Asst. U.S. Attorneys where warranted. FDA's leverage of its technical
abilities should properly be used with the Postal Inspection Service
tools to halt the diet supplement marketer's misleading campaign. A
little FDA help will go a long way.**

**4. The Customs Service, working with FDA on the OASIS system, should
"flag" suspect incoming ingredients and packaged items according to TSUS
subclassifications, and utilize both Customs penal bonds and FDA "Notice
of Detention & Hearing" processes. The targets would be diet supplements
that have shown safety concerns (or analogues thereto such as the recent
GBL products, see Talk Paper T99-21, 5/11/99) for which a block on
importation chokes the supply line of the fraudulent marketer. Customs
also should prosecute the fraudulent representations on incoming
packages that compare the alleged diet supplement to a drug product or
that purport to offer drug benefits, where the product lacks an NDA
number or drug listing number. Because import sourcing is less protected
constitutionally than domestic commerce, FDA and Customs can act more
rapidly at ports of entry to forestall the misleading marketing
practices.**

**5. Un-coordinated enforcement is worse than none at all. The use of an
Elder Fraud Enforcement Forum is optimal. The group would benefit from
the sharing by policy level managers of the FDA (especially ORA, CFSAN,
OCI and OGC), FTC, USPS, Customs, and the Justice Department's Consumer
Affairs and Fraud Sections. These federal enforcement entities should
meet with the National Association of Attorneys General to coordinate
the target selection goal, which is the deterrence of misleading claims
by dietary supplement marketers. NAAG members can simultaneously file
state enforcement cases against the violators while the federal actions
are pending, since they represent a separate sovereign entity (and often
have restitution authority).**

**CONCLUSION**

**CFSAN should recommend to the Commissioner that, as part of the DSHEA
strategy, inter-agency coordinated enforcement tools should be deployed
against the minority of diet supplement companies that engage in
403(a)(1) fraudulent and misleading claims. Potent weapons like
individual CEO prison sentences, consumer restitution, mail blocks and
ingredient/package import holds are among the tools available. They can
and should be used.**

**The present lack of coordination among the multiple regulators is a
disservice to the public. The strategy needs to overcome the results of
past lobbying efforts of the diet supplement industry and to direct a
forceful cleanup of a billion-dollar marketplace currently struggling
with significant deceptive practices.**

**For more detail, please see volume 1 of my treatise, [Food & Drug
Administration]{.underline} (2d Ed., West, 1998 Supp.), and my text
[Lawyers' Guide to Elder Injury & Accident Compensation]{.underline}
(Amer. Bar Assn. Press). Thank you for considering these individual
views.**

**Cordially,**

**James T. O'Reilly**

**Visiting Professor of Law**

**Cc Joseph Levitt, Esq.**

**Margaret Jane Porter, Esq.**