The Quigley Corporation

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IN THE MATTER OF THE QUIGLEY CORPORATION CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATIONS OF SEC. 5 AND 12 OF THE FEDERAL TRADE COMMISSION ACT Docket C-3926; File No. 982 3152 Complaint, February 10, 2000 BDecision, February 10, 2000 This consent order addresses representations by respondent Quigley Corporation concerning the effectiveness of its Cold-Eeze Zinc Lozenges, Cold-Eezer Plus Zinc Gluconate Lozenges, and Kids-Eeze Bubble Gum (AKids- Eeze@) products. The consent order prohibits the respondent from making representations that its products prevent users from contracting colds and pneumonia; will treat allergies; will reduce the severity of colds in children; and that Kids-Eeze will reduce the severity of cold symptoms in children unless it possesses and relies upon competent and reliable scientific evidence that substantiates such representations. The consent order also prohibits the respondent from making any representation that any food, drug, or dietary supplement can or will cure, treat, or prevent any disease, or have any effect on the structure or function of the human body, unless it possesses and relies upon competent and reliable scientific evidence that substantiates the representation. Participants For the Commission: Daniel Kaufman, Lisa B. Kopchik, C. Lee Peeler and Michelle K. Rusk.

For the Respondent: Lewis Rose, Arent Fox Plotkin & Kahn, PLLC; Alan K. Palmer, Cooper, Carvin & Rosenthal; Glenn A. Mitchell, Stein, Mitchell & Mezines; and Ed Glynn, Venable, Baetjer, Howard & Civiletti, LLP.

COMPLAINT The Federal Trade Commission, having reason to believe that The Quigley Corporation, a corporation (Arespondent@), has violated the provisions of the Federal Trade Commission Act, and it appearing to the Commission that this proceeding is in the public interest, alleges:

THE QUIGLEY CORPORATION 407 Complaint 1. Respondent The Quigley Corporation (AQuigley@) is a Nevada corporation with its principal office or place of business at 10 South Clinton Street, Doylestown, PA 18901. 2. Respondent has manufactured, advertised, labeled, offered for sale, sold, and distributed dietary supplement products to the public, including Cold-Eezer Plus Zinc Gluconate Lozenges and Cold-Eeze Zinc Lozenges (hereinafter, collectively, ACold-Eeze@), and Kids-Eeze Bubble Gum (AKids-Eeze@). These products are Afoods@ and/or Adrugs@ within the meaning of Sections 12 and 15 of the Federal Trade Commission Act.

3. The acts and practices of respondent alleged in this complaint have been in or affecting commerce, as Acommerce@ is defined in Section 4 of the Federal Trade Commission Act. 4 Respondent has disseminated or has caused to be disseminated advertisements for Cold-Eeze, including but not limited to the attached Exhibits A through C, transcripts of television advertisements that appeared on QVC or Q2, home shopping cable channels run by QVC, Inc.; Exhibits D through E, advertisements that appeared on the Internet at www.quigleyco.com; and Exhibits F through H, advertisements that appeared on radio programs. These advertisements contain the following statements:

(a) C. Phillips: To have a strategy to help fight the common cold. The kids are in school.

They are there right now.

. . .

C. Phillips: It=s a breeding ground. Everything they touch -- if the child before had a cold VOLUME 129 Complaint and they touch that spot and they touch their noses, its off to the races.

. . .

C. Phillips: So, there=s a couple of strategies. One is we can take one a day and try to see if you can beat the cold to what they call prophylactic or a preventive medicine. Show Host: Excellent C. Phillips: Try taking one a day. Or if the child comes home and you see that it=s here . . . that they have symptoms, start treating the child. Take one every three hours. But everyone in the family should take a couple to prevent picking up that cold.

(Exhibit A, p. 2).

(b) Caller: I just wanted you to know I have a granddaughter that=s 12 years old, and ever since birth when she gets a cold, it turns into bronchitis.

. . .

Caller: And so I tried these . . . and it eliminated the cold almost immediately. C. Phillips: Well, that=s really important because we have several customers we know through QVC and other places where they really can=t afford to have their children even get a cold because what THE QUIGLEY CORPORATION 409 Complaint happens is this exacerbated condition appears.

Show Host: Sure.

C. Phillips: You get bronchitis, pneumonias. And here=s an opportunity right in front of us to stop it right now.

Show Host: Right. Exactly.

(Exhibit A, p. 3).

(c) C. Phillips: The other thing is allergies. Show Host: Yes.

C. Phillips: We have many, many people who have reported to us that their usual choice is to have antihistamines, which make them dopey -- Show Host: Sure.

C. Phillips: -- which make them incapable of functioning, some of them.

Show Host: Right.

C. Phillips: And we suggested they try it. So, we -they tried it and they take one and they see how long it lasts. It does diminish the symptoms of allergies.

(Exhibit A, p. 4).

VOLUME 129 Complaint (d) Show Host: Children can absolutely take this. In fact, I=ve heard . . . people will wrap one of these in cheesecloth and let their toddler suck on it so they can get the benefits from it without actually risking choking or anything.

C. Phillips: Um-hum. Yes.

(Exhibit A, p. 6).

(e) Caller: And I was glad to hear you say something about taking one a day as a preventative. We=ve never tried that before.

C. Phillips: Yes. Well, now=s the time to try it. Show Host: Yep.

C. Phillips: This is -- this is a strategy that may pay off big-time because it does help block as you saw in the animation. If we can stop the viruses we pick up over the day, they will not have a chance to even start.

Show Host: Perfect.

C. Phillips: Therefore, it will preclude you getting the cold.

Caller: Yes.

C. Phillips: And it=s a good strategy. We highly recommend people try that.

(Exhibit A, pp. 6-7) THE QUIGLEY CORPORATION 411 Complaint (f) C. Phillips: Well not only that, but zinc is a critical, very important mineral that we all need. A lot of us are deficient in it. . . . So, not only are you preventing a cold, but you=re getting that zinc which has been proven many times to have a positive effect on many conditions of the body. Show Host: So you=re getting even healthier. C. Phillips: Absolutely.

(Exhibit A, p. 9).

(g) Show Host: And actually, if you take these on a preventative basis, you might not ever get a cold at all.

R. Pollack: Right.

(Exhibit B, p. 3) (h) Show Host: You know, my own grandma just got over pneumonia.

R. Pollack: Hmm.

Show Host: And I'm sending her these so that she can continue to take them, and as some of the people do, take them on a preventative basis.

R. Pollack: Right. Yes.

VOLUME 129 Complaint Show Host: I know that you have women in nursing homes -- R. Pollack: Right.

Show Host: -- and gentlemen in retirement communities who are taking these.

R. Pollack: Yes. And they find them very effective. (Exhibit B, p. 4).

(i) C. Phillips: We're suggesting to moms, get Cold- Eezer Plus in the house.

Show Host: Um-hum.

C. Phillips: Have it ready, and at the very first hint of a cold, start applying it. But even before then, try to use it as a preventative measure, so that if you know that the child has had an exposure, which is school, they can take one a day -- Show Host: Um-hum.

C. Phillips: -- to try to prevent getting a cold. Show Host: And you're talking about schools, I mean, everywhere you go, I mean, other children have it, other adults have it, you're just always exposed.

C. Phillips: Always exposed, exactly. You touch things.

Show Host: Um-hum.

THE QUIGLEY CORPORATION 413 Complaint C. Phillips: You touch a doorknob and you go up and you touch your nose, you've got the chance to have it.

Show Host: Right.

C. Phillips: So, what we're saying is, point one, if you don't have it in the house, get some in the house so that you have it to use at the very first sign of a cold.

Show Host: Um-hum.

C. Phillips: That's the important thing. This year we're saying, have it around and take one a day. Give your child one before he goes to school, that way, it can possibly prevent that child from getting a cold.

(Exhibit C, p. 2).

(j) C. Phillips: It=s also excellent for allergies. Show Host: Oh, really? C. Phillips: Absolutely.

(Exhibit C, p. 5) VOLUME 129 Complaint Internet Advertisements (k) Don=t pass the cold in your family! Reach for Cold-Eeze with Zigg.

You know what happens when one of the kids comes home from school with a cold . . . it seems everybody in the family gets it. Well, now you can fight back with Cold-Eeze. It=s the only zinc lozenge with Zigg (zinc gluconate glycine), the only patented formula clinically proven to reduce the severity and duration of common cold symptoms.

(Exhibit D).

(l) When the Common Cold or Allergies Strike . . . . $ Sneezing $ Sore Throat $ Teary Eyes $ Runny Nose $ Stuffy Sinus . . . Strike Back with Homeopathic Sugar Free Cold-Eeze Tablets with ZIGG (Exhibit E).

Radio Advertisements (m) You already know that Cold-Eeze lozenges are effective against colds, but have you ever thought of using them against your airborne allergies? The sneezing, sniffling, runny-nose and watery eyes can make you miserable. Try taking Cold-Eeze, the great tasting breakthrough lozenge you=ve heard so much THE QUIGLEY CORPORATION 415 Complaint about, with the zinc-gluconate glycine formula. . . . In fact, Cold Eeze is so effective, consumer testimony and preliminary findings suggest Cold-Eeze may also relieve the discomfort from airborne allergies. Try Cold-Eeze, for relief from the dreadful symptoms of hay fever, mold-spores and other airborne allergies. Homeopathic Cold-Eeze is all natural and nonsedating.

(Exhibit F).

(n) Remember when I told you about passing the cold in your family? You know, the kids bring a cold home from school and pass it onto everybody else. Now with the phenomenal success of Cold-Eeze lozenges, many imposters are trying to copy it! Beware of these fake imitators. Cold-Eeze is the only lozenge clinically proven in two double-blind studies to reduce the duration and severity of the common cold. In fact, Cold Eeze has been so effective against common colds in families that pediatric studies are underway. Try Cold-Eeze to help protect your little ones from the nasty clutches of full-blown colds. So remember the next time one of your kids bring the sniffles home from school, stay away from those fake imitators. There=s only one zinc lozenge proven to work on colds. Cold Eeze. Ask for it by name. Clinically proven Cold-Eeze, it really works.

(Exhibit G).

(o) Allergy season is here . . . warm weather, sunshine, flowers . . . it's a terrible time to start sneezing! So attack those symptoms with Cold-Eeze.

(Exhibit H).

VOLUME 129 Complaint 5. Through the means described in Paragraph 4, respondent has represented, expressly or by implication, that: (a) Daily use of Cold Eeze will prevent users from contracting colds.

(b) Use of Cold-Eeze will prevent users from contracting colds.

(c) Use of Cold Eeze will reduce the risk of contracting pneumonia.

(d) Use of Cold Eeze will relieve or reduce the symptoms of hay fever or allergies.

(e) Use of Cold Eeze will reduce the severity of cold symptoms in children.

(f) Daily use of Cold Eeze will prevent children from contracting colds.

6. Through the means described in Paragraph 4, respondent has represented, expressly or by implication, that, it possessed and relied upon a reasonable basis that substantiated the representations set forth in Paragraph 5, at the time the representations were made.

7. In truth and in fact, respondent did not possess and rely upon a reasonable basis that substantiated the representations set forth in Paragraph 5, at the time the representations were made. Therefore, the representation set forth in Paragraph 6 was, and is, false or misleading.

THE QUIGLEY CORPORATION 417 Complaint KIDS-EEZE 8. Respondent has disseminated or has caused to be disseminated advertisements for Kids-Eeze, including but not limited to the attached Exhibit I that appeared on the Internet at www.quigleyco.com, and Exhibit J, statements on product packaging. These advertisements contain the following statements:

(a) Kids-Eeze Bubble Gum [clicking on the hyper-link for Kids-Eeze displays the following text:] Cold-Eeze Bubble Gum Formula The same clinically proven ZIGG formula and dosage as regular COLD-EEZE Lozenges! (Exhibit I).

Product Packaging (b) [Front] KIDS-EEZE COLD-EEZE BUBBLE GUM REDUCES THE DURATION AND SEVERITY OF THE COMMON COLD [Back] COLD-EEZE HOMEOPATHIC SUGAR-FREE VOLUME 129 Complaint TABLETS (FOR COLDS AND ALLERGIES) . . .

CLINICALLY PROVEN COLD-EEZE WITH ZIGG (Exhibit J) 9. Through the means described in Paragraph 8, respondent has represented, expressly or by implication, that use of Kids- Eeze will reduce the severity of cold symptoms in children. 10. Through the means described in Paragraph 8, respondent has represented, expressly or by implication, that, it possessed and relied upon a reasonable basis that substantiated the representation set forth in Paragraph 9, at the time the representation was made. 11. In truth and in fact, respondent did not possess and rely upon a reasonable basis that substantiated the representation set forth in Paragraph 9, at the time the representation was made. Therefore, the representation set forth in Paragraph 10 was, and is, false or misleading.

12. The acts and practices of respondent as alleged in this complaint constitute unfair or deceptive acts or practices, and the making of false advertisements, in or affecting commerce in violation of Sections 5(a) and 12 of the Federal Trade Commission Act.

IN WITNESS WHEREOF, the Federal Trade Commission has caused its complaint to be signed by its Secretary and its official seal to be hereto affixed at Washington, D.C. this tenth day of February, 2000.

By the Commission, Commissioner Anthony dissenting and Commissioner Leary not participating.

THE QUIGLEY CORPORATION 419 Complaint Exhibits Exhibit A TRANSCRIPT OF OVC SEPTEMBER 11. 1997 OS SCREEN:

A-36293 60 Original or Cherry Flavor Cold-Eezers Lozenges QVC Price $18.25 S&H $3.97 QVC 1-800-345-1515 The Health Connection Show Host. See you later, Jill. It's good to see you. honey. Jill Bauer is coming up following Health Connections. She'sgot the today’ s special value atnoon. And then all of the jewelry that I have on. if you're interested, coming up at 1:00. Al] right. Here you go. |-300-345- 1515. We want to talk to you. We want to hear how you're doing with Cold- Eezers. How did it save you last year. How did it save your kids" How do vou feel when you take them? I'd like you to meet someone who's pretty new to QVC, Chuck Phillips. one of the founders of the Cold-Eezers company. C. Phillips: Good mormung, Patricia.

Show Host. So nice to have you here, sir C. Phillips: Thank you. Good to be here. Show Host: Good to see you. Now, we are ready to put Chuck through the paces this morning on the morning show So. thank you for sticking around. I appreciate It.

C. Phillips My pleasure, my pleasure.

Show Host. Chuck 1s back tell us why C old- Eezers are so fabulous. Perfect time of year to bring them back because we've got hay fever and allergies combined with an upcomung cold season. Already I'm starting to see lots of sniffles around QVC C. Phillips: Yes.

Show Host. And. you know, we're so glad that you came back because I tell you what. whenever the Cold- Eezers come to town. they're gone instantly backstage. People just kind of grab little handfuls -- C. Phillips. They disappear.

Show Host -- and then sort of scurry off with them You're going to get lots of them. though. You get 60 for $18.25 A-36293 is the item number in either the cherry. which you see there in the red wrapper. or the natural flavor. which vou Exhibit A. p i VOLUME 129 Complaint Exhibits Caller:

C. Phillips:

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THE QUIGLEY CORPORATION 421 Complaint Exhibits past. So, let's say good morning to Renee Hi. Renee. I'd like you to meet Chuck Phillips.

Hi. Hi. Chuck.

Hi, Renee.

[ just wanted you to know I have a granddaughter that's 12 years old, and ever since birth when she gets a cold, it turns mto bronchitis Oh, that's tough.

Uh-huh.

And so, I tried these because she was out here visiting from Illinois with me for three months, and it eluminated the cold almost immediately. Well, that's really important because we have several customers we know through QVC and other places where they really can't afford to have their children even get a cold because what happens 1s this exacerbated condition appears.

Sure.

You get bronchitis, pneumonia. And here's an opportunity nght in front of us to stop it right now.

Right. Exactly.

Just nail it.

It ~ it worked fantastic.

Well, I'm glad that you had that.

And you saw it work. Hands on expenence, right, Renee? Yes, Ihave. Because she was born with a weak lung and weak bronchial tubes. Uh-hub.

And ever since then, like I say, it goes into bronchitis or pneumonia. She's a little susceptible. Sure.

And I tied these and the cold just went away Oh. that is excellent. Good.

Well, just get a little more aggressive now Just have her take one dumng cold season, one a day ™ Urm-hum.

Exhibit A, p.3 VOLUME 129 Complaint Exhibits

VOLUME 129 Complaint Exhibits

VOLUME 129 Complaint Exhibits THE QUIGLEY CORPORATION 427 Complaint Exhibits Caller: And that's just terrific news. So. I'mgoing to start doing that right today Show Host: Oh. good. Good for you.

C. Phillips: Good. Well, not only that. but zinc is a critical, very important mineral that we all need. A lot of us are deficient in it. Show Host: Um-hum.

C. Phillips: So, not only are you preventing a cold. but you're getting that zinc which has been proven many times to have a positive effect on many conditions of the body.

Show Host: So you're getting even healthier C. Phillips: Absolutely.

Caller: Oh, I think they're wonderful. As a matter of fact, I'm going to order more for my sons. Now that we can take one every day. I'myust going to go back and order some more.

Show Host: Oh, good. Good thinking.

C. Phillips: That's a good idea.

Show Host: Well, Alice, you sit tight on the lines. [ll send you back over to the operators and they can help you out, okay? Caller: Okay.

Show Host: Take care.

Caller: Thank you very much.

Show Host: Thanks for your call, Alice. Caller: Bye-bye.

Show Host: Bye-bye now.

Sixty of them, original flavor or cherry flavor for $18.25. That's a great deal, and that's not a lot of money to spend preventing a cold. Because if you think of it, you go tthe drugstore, you're going to spend a $20 bill getting all the cold medicine and you're going to be out of work for a couple of days. If your kids are sick, you've got to take time off from work. It winds up costing a lot more than $18.25.

Right back to the phones. Let's see if we can't get in one more quick call. This time we'll say good morning to Rachel. Rachel, how are you this morning? Caller: Hi. How are you? Show Host: Great. How are you doing? Exhibit A, p.9 VOLUME 129 Complaint Exhibits Caller:

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THE QUIGLEY CORPORATION 429 Complaint Exhibits I take it myself.

Good.

Good.

Because last year I had the worst -- the worst bronchitis. Uh-oh.

And I didn't have them with me.

Oh.

Abh.

See that? Now you know.

Well, now you've got them all stocked up for the season. ['m so glad. Yes. Yeah, thank you — Good for you.

«= and have a good day.

You, too.

Thank you.

Take care of yourself.

Thank you again.

Bye-bye.

Bye-bye.

Bye-bye.

If you are sending them to someone you love, family onthe other side of the cantry, kids away in college. use our bill to-ship to. We'll ship them to them, we'll send you the bill. You don't have to worry about it. But be sure to pick some up for yourself.

Sixty of them, two packages. 30 in each package. cherry flavor or original flavor, the Cold-Eezers lozenges, $18.25. Chuck Phillips, what a delight to see you. Thanks so much for being a part of our show today.

Thank you, Patricia.

Exhibit A. p. ik VOLUME 129 Complaint Exhibits Show Host R. Pollack Show Host.

R. Pollack:

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THE QUIGLEY CORPORATION 431 Complaint Exhibits Exhibit B TRANSCRIPT OF QVC JANUARY 28, 1997 Please pick up the phone and call us at |-800-348-[5 15. if vou have used Coid- Eezers and you've knocked out that awtul cold and you've taken care of it naturally and healthily because we have Dr Robert Pollack joining us and “¢? Want to get going. We want to get going, we want to hear a story Right. nght.

Hello. hello.

Hello Good morning.

Nice seeimg you again.

Tt's nice to have you back.

Thank you.

ON SCREEN:

Dr. Robert Pollack We're so happy every time you come to town And I have to tell you every time Dr. Robert is with us, he comes on and he's kind enough to leave a bag or two of the Cold-Eezers up front by the producer's desk and we all kind of pick and choose. Well, the last time you were here. they were gone. ON SCREEN:

B-36293 60 Original or Cherry Flavor Cold-Eezers Lozenges QVC Prima $18.25 S&H $3.97 QVC = 1-800-345-1515 They were gone.

By 9:00 in the morning. Everyone came down and stole them and ran Okay And that’s what happens on air as well. We tend to get these into stock, and the next thing you know. they fly out the door Right. because of the fact that they work Exhibit B. p.i VOLUME 129 Complaint Exhibits

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THE QUIGLEY CORPORATION 437 Complaint Exhibits get down into those crevices that you saw in the picture and they won't work. Only Cold-Eezer Plus will do what you see -- well, here. of course. is where they're attaching again.

ON SCREEN: Animation Um-hum.

And that's where the cold starts.

Well, thank you very much for the product. I really appreciate it. You're welcome, Sandra. Thank you for your phone call Thank you very much.

Sure. Bye-bye now.

Just like Dr. Robert says, these are effective and they work Itke no others out there, because these don't have other agents im them that prevent the zinc from doing thejob they need to do.

Something else that's very important about these, they are non-medicating. they are not — they will not make you drowsy. they are safe for pregnant ladies. they are safe for babies.

Right.

Tn fact, your grandson takes these, isn't that right? Yes. right. Just like that child there you see. Um-hum.

It's safe for children, it's safe for adults. Yep.

You are quite right, there is nothing in Cold-Eezer Plus that will stop any medication from working.

Right.

It doesn't really matter. It's all-natural. Um-hum.

We need the items anyway, the nutrients that are there. Yes.

Exhibit B. p.7 VOLUME 129 Complaint Exhibits

VOLUME 129 Complaint Exhibits R. Pollack Show Host R. Pollack Show Host R. Pollack, Show Host.

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THE QUIGLEY CORPORATION 441 Complaint Exhibits And clinically tested. They were actually clinically tested Yes And that's the marvelous part about it It jure is. Everyone at QVC has used these. Al] of the hosts have used them The last time I had a cold, I used them. My cold was gone. I couldnt even believe it. m about a day and a half. I saw instant results and that was it And didn't take lots of them. I took one about. oh, gosh. everv ma‘ be four hours or 350.

Every three ~ right. But see, vou started early That was the kes Yeah. um-hwm.

Right I'm going to unwrap this just so you can see what it looks like. There are nwo flavors. There's cherry. which 1s the newer tlavor. this is what the cherry one looks like. And then there's your original. And thev don't look too different. but I'm just goimg to hold them up so you can see. It'sjust a little hard candy. a little lozenge.

Right And if you've seen Dr. Bob on before and vou haven't given these a try. I really encourage you, please don't miss OUt on them because every time he's on air. we sell out. And we don't know when we can get him back in and get more Cold- Eezers back in.

Right. right.

You won't find these in the store probablv Right.

Probably. They either sell out very quickly -- Right, correct.

-- if you can get a store rhar carries them at all. Correct, yes.

What you will find are other zinc products that are not at all like this, that don't work. that actually have ingredients added to them to prevent them from working. I know that sounds crazy, but it's true. This is it, right? Right.

This is what you need to knock out that cold. Thank you so much. Exhibit B. p 11 VOLUME 129 Complaint Exhibits Show Host.

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THE QUIGLEY CORPORATION 443 Complaint Exhibits Exhibit C TRANSCRIPT OF QVC OCTOBER 2, 1997 We're going to start off our Health Connection with something that. I guess. a lot of us -- a lot of us hopefully -- I'm actually fighting one right now Oh So. I'mgoing to start taking mine since you're here. Excellent. Start nght now at the first sign Chuck Phillips isjoining us to talk about Cold-Eezers Thanks so much for joining us.

Sure.

We'rejust kind of meeting night here. So. we're going tojyump in. You are. in fact -- you are the founder of the Quigley Corporation who brings us Cold- Eezers.

One of the founders.

One of the founders.

Right.

And this is something — and if you have it. please give us a call, because many of you have used Cold-Eezers in the past Maybe if you had the summer cold, you used them this summer. But I know the moms out there really want to hear about this.

ON SCREEN:

A-36293 60 Original or Cherry Flavor Cold-Eezers Lozenges QVC Price $18.25 $&H 33,97 QVC - 1-800-345-1515 Absolutely.

It helps reduce the symptoms of the common cold Right.

This formula.

Moms are waking up right now.

Exhibit C. p 1 VOLUME 129 Complaint Exhibits THE QUIGLEY CORPORATION 445 Complaint Exhibits C. Phillips: No, you're not.

Show Host: Which a lot of cold medicines make you fall asleep C. Phillips: They tend to make you drowsy Show Host: Um-hum.

C. Phillips: And they sort of take the wind out of your sails -- Show Host: Right.

C. Phillips: =- and make you feel tired. Cold-Eezer Plus will not do that Show Host: Um-hum.

C. Phillips: You take one every three hours when you're treating a cold, but as I say, let's get aggressive, let's take one a day to see if we can stop the cold from even coming onto you. Another strategy 1s of a child comes home, they have a cold, it's very evident, they've started to sneeze —- Show Host: Um-hum.

C. Phillips: Everyone in the family should take one or two -- Show Host: To prevent them = C. Phillips: -- to prevent them to be infected by this infection that's now come into the house. Show Host: Now, if-- like I said, last Saturday. 1 woke up with a sore throat. C. Phillips: Right.

Show Host: So, I mean, I— this, I should take -- you know, I didn't have them m the house. 50 -- C. Phillips: Oh, boy.

Show Host: Now, [have them. I'm going to take one now. But this will help reduce -- if it's too late, if somebody already has gotten the signs of a cold, how does it help to reduce ~~ what symptoms will it help reduce? C. Phillips: It's not too late! Show Host: Okay.

C. Phillips: If you've had a cold for one or two days. it will basically reduce the duration of what's left of the cold nearly in half. Show Host: Okay. Oh, really? C. Phillips: Sure. So, it's not = it's never too late. Show Host: Um-hum.

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VOLUME 129 Complaint Exhibits C Phillips.

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THE QUIGLEY CORPORATION 449 Complaint Exhibits ~~ gluconate lozenges_just tablets and let them dissolve. but thev actually can make you nauseous.

CUm-hum.

So. Dr. John Godfrey, the inventor of our formula, found a way to sweeten zinc gluconate - Um-hum.

-- yet release the zinc ions ta the mucosal surfaces which does thejob. Um-hum.

That's what is stopping the rhinovirus from reproducing, but it's also what we think is perhaps clamping on the nerve endings in here and telling your system that you don't need to have mucus being produced. Right. I think we have some tape that will show that. Yes, good.

And maybe you can explain it again as we see it. ON SCREEN: Animation Absolutely. It's — you see that the purple items are your rhinovirus in and around your mouth. and as they come im and touch the walls of the inside of your mouth and nose, they attach themselves. Um-hum.

Boom, you have an infection going. They intrude. they replicate. and they kill the cell and send billions more out there. Hmm.

Now what you see is the blue double positive zinc ions of Cold-Eezer Plus in and around the rhinovirus and they actually plug up the areas that the rhinovirus normally would use to, let's say, magnetically. by forces, positive and negative like a magnet, lodge onto your cells. So, the zinc gluconate glycine is stopping that. The zine double positive ions are preventing the rhinovirus from even having a chance to geta foothold, and itjust gets washed away by the body's normal system of cleaning this area. which is mucus. Um-hum.

So. it works rather well.

And it will help reduce the symptoms and the duration. Not only the symptoms like the coughing — Exactly Exhibit C. p.7 VOLUME 129 Complaint Exhibits Show Host:

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THE QUIGLEY CORPORATION 451 Complaint Exhibits Um-hum.

And they're available to most evervone here and we've heard that it works rather well.

My mother picked them up last year for her work. Okay.

And she works -- she has a store, and so, you have, you know, all sorts of peopis coming in -- Sure.

-- and employees as well that you're going to get the cold Well, of all the people to protect. your employees are very important Right.

It costs a business approximately $125 a day for that person to be absent. Um-hum.

Now, if they're there, they're also spreading the cold, mght? And so, I mean, it doubles the problem. Why not stop it immediately? Right.

Have it available to the people that work for you. It's -- $5 percent of all colds end up at the doctor. It's amazing. Fifty five percent of everyone who gets a cold gets a condition that the cold began and -- Um-hum.

— now it's gotten worse.

So, take this as a preventative, like once a day. but also, you know, take it -- if you were not able to do the preventative, make sure you take it once it starts and reduce the symptoms and reduce the duration. Right. Real important, too, is the value of zinc. Nearly everyone in the United States 1s Zine deficient. There's very few places to get natural zinc. Um-hum.

Oysters, things like this, which aren'treadily available every day No. And some people don't like oysters. Right. And being zine deficient puts you into Vamous categories that are not good, let's say.

Um-hum.

Exhibit C.p.9 VOLUME 129 Complaint Exhibits THE QUIGLEY CORPORATION 453 Complaint Exhibits Exhibit D Don't play pass the cold in your family! Reach for Cold-Eeze: with Zigg™.

seems Verh You knots what huppens when one of the kids comes home from school with u cold in the family gets it! Well, now you can fight back with Cold-Eeze®. It's the only zine lozenge with Zizz°* (zinc gluconate glycine!. the only patented formula clinically proven to reduce the seventy and du common cold symptoms.

Cold-Eezes... there is no substitute! The Quigley Corporation Makers of Cold-Eeze® with Zigg™, is proud to sponsor this year's tour of the Slat 1). Follow the Yellow Brick Road for tour engagments. Click Here to Enter Phe Cold-Eeze Emerald Isle Sweepstakes a Trip for 4 to Ireland! Copynght © 1998 by [Laer tse |. All rights reserved. Exhibit D VOLUME 129 Complaint Exhibits Exhibit E THE QUIGLEY CORPORATION 455 Complaint Exhibits Exhibit F COLD-EEZE .:60 ALLERGIES YOU ALREADY KNOW THAT COLD-EEZE LOZENGES ARE EFFECTIVE aGADNST COLDS. BLT HAVE YOU EVER THOUGHT OF USING THEM AGAINST YOUR AIRBORNE ALLERGIES”

THE SNEEZING, SNIFFLING. RUNNY-SOSE AND WATERY EYES CAN MAKE YOU MISERABLE. TRY TAKING COLD-EEZE. THE GREAT TASTING SREARTHROUGH LOZENGE YOU'VE HEARD SO MUCH about. “ITH THE ZINE-GLUCONATE GLYCINE FORMULA. Cold-EEZE Is CLINICALLY PROVEN To REDUCE THE DURATION AND SEVERITY OF THE COMMION COLD INFACT, COLD-EEZE IS SOEFFECTIVE. CONSUMER TESTIMONY AND PRELIMINARY FINDINGS SUGGEST COLD-EEZE. ALSO M4 ¥ RELIEVE THE DISCOMFORT FROM AIRBORNE ALLERGIES. TRY COLD-EEZE, FOR RELIEF FROM THE DREADFUL SYMPTOMS OF HAYFEVER. MOLD-SPORES AND OTHER AIRBORNE ALLERGIES. HOMEOPATHIC COLD-EEZE I$ ALL NATURAL AND NON-SEDATING.

SO REMEMBER THERE ISONLY ONE COLD-FEZE, ASK FOR IT BY NAME SND GIVE ITATRY TODAY ... AND TOMORROW .OR WHENEVER YOU NEED IT.! TAGS: AVAILABLE AT RITE AID, CVS, THRIFT DRUGS. DRUG EMPORILM. ALL FINE OUTLETS EVERYWHERE.

Exhibit F VOLUME 129 Complaint Exhibits Exhibit G THE QUIGLEY CORPORATION Complaint Exhibits Exhibit H COLD-EEZE 4+ 13-LEFN SPRING ALLERGIES * ALLERGY SEASON IS HERE....WARM WEATHER, SUNSHINE. FLOWERS...IT'S A TERRIBLE TIME TO START SNEEZING! SO ATTACK THOSE SYMPTOMS WITH COLD-EEZE.

= COLD-EEZE IS NOW THE MOST EFFECTIVE AND POPL'LAR COLD FIGHTER IN THE COUNTRY.

* THERE'S NO SUBSTITUTE FOR COLD-EEZE WHEN ITCOMES TO EASING SYMPTOMS.

* REMEMBER, WHEN YOU THINK ZINC, THINK COLD-EEZE THE ONLY LOZEYGE WITH "ZIGG" THAT'S ZINC GLUCONATE GLYCINE AND IT'SONLY IN COLD-EEZE.

* COLD-EEZE PATENTED. HOMEOPATHIC, ALL NATURAL, NON SEDATING. FAST ACTING AND CLINICALLY PROVEN. = NOW AVAILABLE IN FOUR SOOTHING FLAVORS TOO! * SOENJOY THE SEASON, TAKE COLD-EEZE WITH YOU TO WORK. THE GYM OR EVEX OX VACATION.

= THERE IS NOW SUBSTITUTEANY WHERE...

* COLD-EEZE,THE OFFICIAL SPONSOR OF THE NATIONAL TOURING STAGE PRODUCTION OF THE W/Z4RD OF OZ.

COLD-EEZE 1S AVXILABLE AT.....

WALGREENS, OSCO/SAV-ON, JEWEL, DOMINICKS, K-MART, VONS, LUCKY'S, DUANE REAQE AND FINE STORES EVERYWHERE, Exhibit H a+ VOLUME 129 Complaint Exhibits Exhibit I THE QUIGLEY CORPORATION 459 Complaint Exhibits Cold-Eeze Bubble Gum Formula Revi ces se Does ew we Sevens ae cit CMs Coan The same clinically provenZIGG™ formula and dosage as regular COLD-EEZE® Lozenges! VOLUME 129 Complaint Exhibits Exhibit J THE QUIGLEY CORPORATION Complaint Exhibits BYOYMATE™ NUTRITION 4 WEIGHT MANAGEMENT PRO Water (dications: to.ce Ue curation anc Dy DTS of the CECA cold (cough. core throat, tty rose. aneenng postnasaicr hoarseness). Non-sedating.

Net contents. 16 peces. bunbie gu= Esc 48g pece contuns Actve ngtedent: 13 Jeng of tonic zee trem Tecum Givi cum ix i'Cdirg zinc ghoconste thydrate) equivalent to Imoam 2" act ngresents 4499 Nodding Suctse Gué came, Com Srp Glyewe. Gucone dod Glycerne, Ariifics =avors Acesufane Priam Fe 40 Late, Rec 40 arc BHT Mantain Freche Oirections: foc_mammamn sfiectrencss begr: beammert at tiot aga at cad + Chew each peeCerfor aSeest DOrninutes “epee! evry] to shours as nercec Recommended 03) case ts S proces per day. To evasd menor ucnet, do Not chew on an entipty stomach. De not est or rk Fas trate oc juices ‘fh. Nour before & po —aeaaealee Otherwise. cnn plenty Wamings: <210-£E21" Budde Sum |:

formuleted to reheve cold symptoms & may be wrevificiera weewnent for flu. if rpmptoms worker oc persist beyord! 7 days, crsut 3 phyncen.

CUMICALLY PROVEN COULD-EEZE* WITH ZIGG™ The fotiowang shudbes appty ony to the COLD- CEZR° formulation with DGG™ (Zin Gmconate Giycine), the only greet tasneg forrulason prowen effecte wn resting +» Correnon Cold 4 tandorrazed doubletund pecebo imay.

wth lng of jon ging 9 4 otrus favored Oterge. comchuded that trestmeet of a cod ven Our Patented formule witPen 48 hoyrs of the onset rested in symptom retet and s 47% (eduction 1 the durapan of the common cold Results were pubbshed in he joumae of imternamonat Medical Research Godtrey ot. «i Vat 20, No 3, Jume 1992 4 second, randomured, doutte-bind piacebo study worth entry 13.3me of lonie zine im + Ctws Savored tamenge, concluded peterts Starting Cestnerr wth cus Patertad forrmuis anther 24 hours of the onset, taking an sverage of 6 ‘ozenges per dy semdted = « 42% feduction in the @waten of cwawnon cold symptoms. fends were gublahed 7m te Annals Of internat Meicne, Mossad et. a, vol, 175. Mod. nay 15, 1996. peges 47-68. MASLSACTUBED FOR & OMSTIEBUTED CY THE QUIGLEY COGPORATION PO, SOX 1349 ~ GOVLESTOMSE PA 1EB0T USA TMAL. conmemer-depe@quigheyuncom TERS? Weuniwernanigioyes.com MASDAQ TRANG Sreamae: QaLy 1soo0 Il TM a (98 ° ll VOLUME 129 Decision and Order DECISION & ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondent named in the caption hereof, and the respondent having been furnished thereafter with a copy of a draft complaint which the Bureau of Consumer Protection proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge the respondent with violation of the Federal Trade Commission Act; and The respondent, its attorneys, and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by respondent of all the jurisdictional facts set forth in the draft complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondent that the law has been violated or that the facts, as alleged in the complaint, other than jurisdictional facts, are true; and The Commission having considered the matter and having determined that it had reason to believe that the respondent has violated the Act, and that a complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, now in further conformity with the procedure prescribed in ' 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional finding and enters the following order: 1. Respondent The Quigley Corporation (AQuigley@) is a Nevada corporation with its principal office or place of business at 10 South Clinton Street, P.O. Box 1349, Doylestown, PA 18901.

THE QUIGLEY CORPORATION 463 Decision and Order ORDER DEFINITIONS For purposes of this order, the following definitions shall apply:

1. ACompetent and reliable scientific evidence@ shall mean tests, analyses, research, studies, or other evidence based on the expertise of professionals in the relevant area, that has been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results. 2. Unless otherwise specified, Arespondent@ shall mean The Quigley Corporation, its successors and assigns and its officers, agents, representatives, and employees.

3. ACommerce@ shall mean as defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. ' 44. I.

IT IS ORDERED that respondent, directly or through any corporation, subsidiary, division, or other device, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of Cold-Eeze Zinc Lozenges, Kids- Eeze Bubble Gum, or any other food, drug or dietary supplement, as Afood@ and Adrug@ are defined in Section 15 of the Federal Trade Commission Act, in or affecting commerce, shall not make any representation, in any manner, expressly or by implication, that such product:

A. will prevent users from contracting colds; VOLUME 129 Decision and Order B. will reduce the risk of contracting pneumonia; C. will relieve or reduce the symptoms of hay fever and allergies;

D. will reduce the severity of cold symptoms in children; or E. will prevent children from contracting colds; unless, at the time the representation is made, respondent possesses and relies upon competent and reliable scientific evidence that substantiates the representation. II.

IT IS ORDERED that respondent, directly or through any corporation, subsidiary, division, or other device, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any food, drug or dietary supplement, as “food” and “drug” are defined in Section 15 of the Federal Trade Commission Act, in or affecting commerce, shall not make any representation, in any manner, expressly or by implication, that such food, drug or dietary supplement can or will cure, treat, or prevent any disease, or have any effect on the structure or function of the human body unless, at the time the representation is made, respondent possesses and relies upon competent and reliable scientific evidence that substantiates the representation.

III.

Nothing in this Order shall prohibit Respondent from making any representation for any drug that is permitted in labeling for such drug under any tentative final or final standard promulgated by the Food and Drug Administration, or under any new drug application approved by the Food and Drug Administration. THE QUIGLEY CORPORATION 465 Decision and Order IV.

Nothing in this order shall prohibit respondent from making any representation for any product that is specifically permitted in labeling for such product by regulations promulgated by the Food and Drug Administration pursuant to the Nutrition Labeling and Education Act of 1990.

V.

IT IS FURTHER ORDERED that respondent The Quigley Corporation, and its successors and assigns, shall, for five (5) years after the last date of dissemination of any representation covered by this order, maintain and upon request make available to the Federal Trade Commission for inspection and copying: A. All advertisements and promotional materials containing the representation;

B. All materials that were relied upon in disseminating the representation; and C. All tests, reports, studies, surveys, demonstrations, or other evidence in their possession or control that contradict, qualify, or call into question the representation, or the basis relied upon for the representation, including complaints and other communications with consumers or with governmental or consumer protection organizations.

VI.

IT IS FURTHER ORDERED that respondent The Quigley Corporation, and its successors and assigns, shall deliver a copy of this order to all current and future principals, officers, directors, and managers, and to all current and future employees, agents, VOLUME 129 Decision and Order and representatives having responsibilities with respect to the subject matter of this order, and shall secure from each such person a signed and dated statement acknowledging receipt of the order. Respondent shall deliver this order to current personnel within thirty (30) days after the date of service of this order, and to future personnel within thirty (30) days after the person assumes such position or responsibilities. Respondent shall maintain and upon request, make available to the Federal Trade Commission for inspection and copying, a copy of each signed statement acknowledging receipt of the order. VII.

IT IS FURTHER ORDERED that respondent The Quigley Corporation, and its successors and assigns, shall notify the Commission at least thirty (30) days prior to any change in the corporation(s) that may affect compliance obligations arising under this order, including but not limited to a dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor corporation; the creation or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this order; the proposed filing of a bankruptcy petition; or a change in the corporate name or address. Provided, however, that, with respect to any proposed change in the corporation about which respondents learn less than thirty (30) days prior to the date such action is to take place, respondents shall notify the Commission as soon as is practicable after obtaining such knowledge. All notices required by this Part shall be sent by certified mail to the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580.

VIII.

IT IS FURTHER ORDERED that respondent The Quigley Corporation, and its successors and assigns, shall, within sixty (60) days after the date of service of this order, and at such other THE QUIGLEY CORPORATION 467 Decision and Order times as the Federal Trade Commission may require, file with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied with this order. IX.

This order will terminate on February 10, 2020, or twenty (20) years from the most recent date that the United States or the Federal Trade Commission files a complaint (with or without an accompanying consent decree) in federal court alleging any violation of the order, whichever comes later; provided, however, that the filing of such a complaint will not affect the duration of: A. Any Part in this order that terminates in less than twenty (20) years;

B. This order's application to any respondent that is not named as a defendant in such complaint; and C. This order if such complaint is filed after the order has terminated pursuant to this Part.

Provided, further, that if such complaint is dismissed or a federal court rules that the respondent did not violate any provision of the order, and the dismissal or ruling is either not appealed or upheld on appeal, then the order will terminate according to this Part as though the complaint had never been filed, except that the order will not terminate between the date such complaint is filed and the later of the deadline for appealing such dismissal or ruling and the date such dismissal or ruling is upheld on appeal. By the Commission, Commissioner Anthony dissenting and Commissioner Leary not participating.

VOLUME 129 Analysis to Aid Public Comment ANALYSIS OF PROPOSED CONSENT ORDER TO AID PUBLIC COMMENT The Federal Trade Commission has accepted, subject to final approval, an agreement containing consent order from respondent the Quigley Corporation (AQuigley@).

The proposed consent order has been placed on the public record for sixty (60) days for reception of comments by interested persons. Comments received during this period will become part of the public record. After sixty (60) days, the Commission will again review the agreement and the comments received and will decide whether it should withdraw from the agreement or make final the agreement's proposed order.

This matter involves alleged deceptive representations for Cold-Eeze Zinc Lozenges and Cold-Eezer Plus Zinc Gluconate Lozenges (hereinafter, collectively ACold-Eeze@) and Kids-Eeze Bubble Gum (AKids-Eeze@).

The Commission's proposed complaint alleges that Quigley made unsubstantiated representations that Cold-Eeze will prevent users from contracting colds and pneumonia; will treat allergies; will reduce the severity of colds in children; and that Kids-Eeze will reduce the severity of cold symptoms in children. The proposed consent order contains provisions designed to prevent respondent from engaging in similar acts and practices in the future.

Part I of the proposed order prohibits the respondent from making the representations about Cold-Eeze and Kids-Eeze challenged in the complaint, unless it possesses and relies upon competent and reliable scientific evidence that substantiates the representation.

THE QUIGLEY CORPORATION 469 Analysis to Aid Public Comment Part II of the proposed order prohibits respondent from making any representation that any food, drug, or dietary supplement can or will cure, treat or prevent any disease, or have any effect on the structure or function of the human body, unless it possesses and relies upon competent and reliable scientific evidence that substantiates the representation. Part III of the proposed order allows the respondent to make any representations for any drug that are permitted in labeling for the drug under any tentative final or final Food and Drug Administration (AFDA@) standard or under any new drug application approved by the FDA.

Part IV of the proposed order allows the respondent to make representations for any product that are specifically permitted in labeling for that product by regulations issued by the FDA under the Nutrition Labeling and Education Act of 1990. Parts V through VIII require the respondent to keep copies of advertisements making representations covered by the order; to keep records concerning those representations, including material that they relied upon when making the representations; to provide copies of the order to certain of the respondents' personnel; to notify the Commission of changes in corporate structure; and to file compliance reports with the Commission. Part IX of the proposed order is a Asunset@ provision, dictating that the order will terminate twenty years from the date it is issued or twenty years after a complaint is filed in federal court, by either the United States or the FTC, alleging any violation of the order. The purpose of this analysis is to facilitate public comment on the proposed order. It is not intended to constitute an official interpretation of the agreement and proposed order or to modify in any way their terms.

VOLUME 129 Dissenting Statement DISSENTING STATEMENT OF COMMISSIONER SHEILA F. ANTHONY I write separately to express my view that the consent in this matter does not adequately address Quigley Corporation=s conduct with respect to its marketing of the Kids-Eeze product. TRANS UNION CORPORATION 471 Complaint