| **Analysis of Proposed Consent       Order to Aid Public Comment**
The Federal Trade Commission has accepted       an agreement, subject to final approval, to a proposed consent order from       respondent Pharmaceutical Formulations, Inc. ("PFI").

The proposed consent order has been placed       on the public record for thirty (30) days for reception of comments by       interested persons. Comments received during this period will become part       of the public record. After thirty (30) days, the Commission will again       review the agreement and the comments received and will decide whether it       should withdraw from the agreement and take other appropriate action or       make final the agreement's proposed order.

This matter concerns "Made in U.S.A."       claims on packaging and labeling for PFI's aspirin and acetaminophen       tablets sold at retail bearing private brand names. The Commission's       complaint alleges that respondent misrepresented on packaging and labeling       that certain of these products, manufactured for customers such as Kmart,       Duane Reade, Eckerd, and Harris Teeter, are all or virtually all made in       the United States. According to the complaint, these products are actually       made with significant foreign content. The products' active ingredients,       bulk aspirin and acetaminophen compounds, that respondent processed into       aspirin and acetaminophen tablets, are or were made outside the United       States. The imported bulk aspirin and acetaminophen comprise a substantial       percentage of total manufacturing costs and impart the crucial analgesic       quality to the OTC products at issue. The Commission's complaint does not       allege that all of PFI's private label aspirin and acetaminophen brands or       products are mislabeled, but only that certain products for certain       customers have been improperly labeled.

The proposed consent order contains a       provision that is designed to remedy the charges and to prevent the       respondent from engaging in similar acts and practices in the future. Part       I of the proposed order prohibits PFI from misrepresenting the extent to       which any non-prescription drug product containing an analgesic is made in       the United States. The order defines "analgesic" as an agent used to       alleviate pain. The proposed order would allow PFI to represent that such       products are made in the United States as long as all, or virtually all,       of the ingredients or component parts of such products are made in the       United States and all, or virtually all, of the labor in manufacturing       such products is performed in the United States. The proposed order also       would allow PFI to represent that a product containing imported active       ingredient(s) is "Processed in the United States with Foreign Ingredients"       when describing a product that has been "significantly processed" in the       United States.

The draft order also includes a provision       that would allow PFI to use its current packaging inventory until December       31, 2001.

Part II of the proposed order requires the       respondent to maintain materials relied upon in disseminating any       representation covered by the order. Part III of the proposed order       requires the respondent to distribute copies of the order to certain       company officials and employees. Part IV of the proposed order requires       the respondent to notify the Commission of any change in the corporation       that may affect compliance obligations under the order. Part V of the       proposed order requires the respondent to file one or more compliance       reports. Part VI of the proposed order is a provision whereby the order,       absent certain circumstances, terminates twenty years from the date of       issuance.

The purpose of this analysis is to       facilitate public comment on the proposed consent order. It is not       intended to constitute an official interpretation of the agreement and       proposed order or to modify in any way their terms.UBLIC "-//IETF//DTD HTML//EN"> |
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