| **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 Leiner Health Products, Inc. ("Leiner").

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 Leiner's 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 Wal-Mart, Costco,       Target, and Safeway, 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 ingredient, bulk       acetaminophen compound, that respondent processed into acetaminophen       tablets, is or was made outside the United States. The imported bulk       acetaminophen comprises a substantial percentage of total manufacturing       costs and imparts the crucial analgesic quality to the OTC products at       issue. The Commission's complaint does not allege that all of Leiner's       private label 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 Leiner 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 Leiner 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 Leiner 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 Leiner 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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