LNK International, Inc

Text (OCR of the scan at left; may contain errors)

VOLUME 133

Complaint

IN THE MATTER OF

LNK INTERNATIONAL, INC.

CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATIONS OF SEC. 5 AND SEC. 12 OF THE FEDERAL TRADE COMMISSION ACT

Docket C-4037; File No. 0123058 Complaint, February 19, 2002--Decision, February 19, 2002

This consent order addresses claims on certain packaging and labeling for aspirin and acetaminophen tablets produced by Respondent LNK International, Inc. that such products are all or virtually all made in the United States. The order, among other things, prohibits the respondent from misrepresenting the extent to which any non-prescription drug product containing an analgesic is made in the United States, while permitting the respondent 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 order also permits the respondent 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.

Participants

For the Commission: Laura D. Koss, Walter C. Gross, Joni Lupovitz, Elaine D. Kolish and Keith Anderson. For the Respondent: Fred Sonnenfeld, Sonnenfeld & Richman.

COMPLAINT

The Federal Trade Commission, having reason to believe that LNK International, Inc. ("respondent") 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:

1. Respondent is a New York corporation with its principal office or place of business at 60 Arkay Drive, Hauppauge, New York 11788.

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Complaint

2. Respondent has manufactured, labeled, offered for sale, sold, and distributed aspirin and acetaminophen tablets to the public, including but not limited to private label aspirin and acetaminophen brands.

3. The acts and practices of respondent alleged in this complaint have been in or affecting commerce, as "commerce" is defined in Section 4 of the Federal Trade Commission Act.

4. Respondent has disseminated or has caused to be disseminated packaging and labeling for certain of its aspirin and acetaminophen products, including but not necessarily limited to the attached Exhibits A through G. The packaging and labeling contain the following statements or depictions:

A. Health Pride Tri-Buffered Aspirin Analgesic, Exhibit A

“Made in U.S.A. . . . Distributed by Compass Foods . . . ”

B. Eckerd Aspirin Plus, Exhibit B

“Made in U.S.A. . . .

DISTRIBUTED BY ECKERD DRUG COMPANY . . .”

C. Quality Choice Enteric Coated Lo-Dose Aspirin, Exhibit C

“DISTRIBUTED BY QUALITY CHOICE . . .

MADE IN U.S.A.”

D. Stop & Shop Enteric Coated Aspirin, Exhibit D

“DIST. BY THE STOP & SHOP

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Complaint

SUPERMARKET COMPANY . . .

MADE IN U.S.A."

E. The Medicine Shoppe Extra Strength Enteric Coated Aspirin for Arthritis, Exhibit E

"Made in USA Distributed by Medicine Shoppe International, Inc. . . ."

F. CVP Extra Strength Pain Reliever Non-Aspirin Analgesic, Exhibit F

"Made in U.S.A.

Distributed by Consumer Value Products, Inc. . . ."

G. Goldline Genapap Acetaminophen (APAP) Tablets, Exhibit G

"Made in USA Dist by:

GOLDLINE LABORATORIES, INC."

5. Through the means described in Paragraph 4, respondent has represented, expressly or by implication, that certain of its aspirin and acetaminophen products are made in the United States, i.e., that all, or virtually all, of the ingredients of such products are made in the United States, and that all, or virtually all, of the labor in manufacturing such products is performed in the United States.

6. In truth and in fact, a significant portion of the ingredients of certain of respondent's aspirin and acetaminophen products is, or has been, of foreign origin. The active ingredients, bulk aspirin and acetaminophen compounds, that respondent processed into aspirin or acetaminophen tablets are or were made outside the United States. Therefore, the representation set forth in Paragraph 5 was, and is, false or misleading.

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Complaint

7. 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, 15 U.S.C. §§ 45(a) and 52.

THEREFORE, the Federal Trade Commission this nineteenth day of February 2002, has issued this complaint against respondent.

By the Commission.

Link International

Exhibits

012 3058

health PRIDE TRI-BUFFERED Aspirin Analgesic PAIN RELIEVER FEVER REDUCER 130 COATED BUFFERED ASPIRIN TABLETS 325 mg EACH

health PRIDE TRI-BUFFERED Aspirin Analgesic PAIN RELIEVER FEVER REDUCER 130 COATED BUFFERED ASPIRIN TABLETS 325 mg EACH

health PRIDE TRI-BUFFERED Aspirin Analgesic PAIN RELIEVER FEVER REDUCER 130 COATED BUFFERED ASPIRIN TABLETS 325 mg EACH

health PRIDE TRI-BUFFERED Aspirin Analgesic PAIN RELIEVER FEVER REDUCER 130 COATED BUFFERED ASPIRIN TABLETS 325 mg EACH

B4074113C

0 41151 01428 3

[illegible]

Exhibit A

ECKERD Aspirin Plus ASPIRIN, ALUMINA AND MAGNESIA TABLETS ANALGESIC PAIN RELIEF -- WITHOUT STOMACH DISCOMFORT 100 TABLETS

ECKERD Aspirin Plus ASPIRIN, ALUMINA AND MAGNESIA TABLETS ANALGESIC PAIN RELIEF -- WITHOUT STOMACH DISCOMFORT 100 TABLETS

3 34575-50994 7 ECKERD ITEM 509570 NDC 13466-5099-1

TAMPER EVIDENT: DO NOT USE IF IMPRINTED SAFETY SEAL UNDER CAP IS BROKEN OR MISSING

ECKERD Aspirin Plus

[illegible]

QC QUALITY CHOICE

ENTERIC COATED LO-DOSE ASPIRIN ANALGESIC • PAIN RELIEVER • EASY TO SWALLOW 120 TABLETS 81 mg EACH

QC QUALITY CHOICE

ENTERIC COATED LO-DOSE ASPIRIN ANALGESIC • PAIN RELIEVER • EASY TO SWALLOW 120 TABLETS 81 mg EACH

QC QUALITY CHOICE ENTERIC COAT LO-DO ASPIRIN ANALGESIC PAIN RELIEVER • EASY TO 120 TABLETS 81 mg EACH

[illegible] [illegible] [illegible] [illegible] [illegible] [illegible]

STOP & SHOP

NDC 62770-227-12

FOR ARTHRITIS PAIN

ENTERIC COATED ASPIRIN

SAFETY COATED SAFER FOR YOUR STOMACH THAN PLAIN OR BUFFERED ASPIRIN ANALGESIC 100 TABLETS-325 mg each

STOP & SHOP

NDC 62770-227-12

FOR ARTHRITIS PAIN

ENTERIC COATED ASPIRIN

SAFETY COATED SAFER FOR YOUR STOMACH THAN PLAIN OR BUFFERED ASPIRIN ANALGESIC 100 TABLETS-325 mg each

0 21120-94404 3

STOP & SHOP

FOR ARTHRITIS PAIN

ENTERIC COATED ASPIRIN

[illegible]

Safer for your stomach than plain or buffered aspirin. INDICATIONS: For the temporary relief of minor aches and pains of arthritis and rheumatism. Enteric coated aspirin tablets are designed to swallow and are specially coated to help prevent the gastric upset often caused by plain uncoated aspirin. DIRECTIONS: Adults and children over 12 years of age: 1 to 2 tablets every 4 hours, while symptoms persist, not to exceed 12 tablets in 24 hours, unless directed by a physician. Drink a full glass of water with each dose. Children under 12 years of age: Consult a physician. WARNINGS: Children and teenagers should not use this medicine for chicken pox or flu symptoms before a doctor is consulted about Reye Syndrome, a rare but serious illness reported to be associated with aspirin. Do not take this product for pain for more than 10 days or for fever for more than 3 days unless directed by a doctor. If pain or fever persists or gets worse, if new symptoms occur, or if redness or swelling is present, consult a doctor because these could be signs of a serious condition. Do not take this product if you are allergic to aspirin, have asthma, or if you have stomach problems that persist or recur, or if you have ulcers or bleeding problems unless directed by a doctor. If ringing in the ears or a loss of hearing occurs, consult a doctor before taking any more of this product. Keep this and all drugs out of the reach of children. In case of accidental overdose, seek professional assistance or contact a poison control center immediately. As with any medicine, if you are pregnant or nursing a baby, seek the advice of a health professional before using this product. IT IS ESPECIALLY IMPORTANT NOT TO USE ASPIRIN DURING THE LAST 3 MONTHS OF PREGNANCY UNLESS SPECIFICALLY DIRECTED TO DO SO BY A DOCTOR BECAUSE IT MAY CAUSE PROBLEMS IN THE UNBORN CHILD OR COMPLICATIONS DURING DELIVERY. ALCOHOL WARNING: If you consume 3 or more alcoholic drinks every day, ask your doctor whether you should take aspirin or other pain relievers/fever reducers. Aspirin may cause stomach bleeding. DRUG INTERACTION PRECAUTION: Do not take this product if you are taking a prescription drug for anticoagulation (thinning of the blood), diabetes, gout, or arthritis unless directed by a physician. Each enteric coated tablet contains: Aspirin 325 mg, USP [illegible] May also contain: [illegible] from [illegible] Black Iron Oxide, Cellulose, Colloidal Silicon Dioxide, D&C Yellow #10 Aluminum Lake, FD&C Yellow #6 Aluminum Lake, Hydroxypropyl Methylcellulose, Polydextrose, Polyethylene Glycol, Polyvinyl Acetate Phthalate, Propylene Glycol, Shellac Wax, Sodium Alginate, Sodium Bicarbonate, Starch, Stearic Acid, Talc, Titanium Dioxide, Triacetin, Triethyl Citrate. Store in a cool, dry place at controlled room temperature 15°-30°C (59°-86°F). See by expiration date on package. See end flap for expiration date and lot no. TAMPER EVIDENT: DO NOT USE IF IMPRINTED SAFETY SEAL UNDER CAP IS BROKEN OR MISSING. * This product is not manufactured or distributed by SmithKline Beecham Consumer Brands, owner of the registered trademark Ecotrin® Tablets. 69344 Rev. 9/95 DIST. BY THE STOP & SHOP SUPERMARKET COMPANY P.O. BOX 1942 BOSTON, MA 02105 MADE IN U.S.A.

The Medicine Shoppe NDC 49314-113-72 Extra Strength Pain Reliever Enteric Coated Aspirin 60 Tablets, 500 mg Each Safety Sealed

The Medicine Shoppe NDC 49314-113-72 Extra Strength Pain Reliever Enteric Coated Aspirin 60 Tablets, 500 mg Each Safety Sealed

The Medicine Shoppe Extra Strength Enteric Coated Aspirin 60 Tablets, 500 mg Each

B112212 0 91899-11 [illegible] 8

[illegible]

CVP EXTRA STRENGTH PAIN RELIEVER NON-ASPIRIN ANALGESIC acetaminophen

CVP EXTRA STRENGTH PAIN RELIEVER NON-ASPIRIN ANALGESIC acetaminophen

CVP EXTRA STRENGTH PAIN RELIEVER NON-ASPIRIN ANALGESIC acetaminophen

7 61706-16004 6

DO NOT USE IF IMPRINTED SAFETY SEAL UNDER CAP IS BROKEN OR MISSING

Drug Facts [illegible]

Drug Facts (continued) [illegible]

Goldline NDC 0182-1410-01 TAMPER-EVIDENT GENAPAP TM acetaminophen (APAP) tablets.....ASPIRIN-free PAIN RELIEVER/FEVER REDUCER 100 TABLETS -325 mg EACH Compare to the active ingredient in Regular Strength TYLENOL* Tablets*

Goldline NDC 0182-1410-01 TAMPER-EVIDENT GENAPAP TM acetaminophen (APAP) tablets.....ASPIRIN-free PAIN RELIEVER/FEVER REDUCER 100 TABLETS -325 mg EACH Compare to the active ingredient in Regular Strength TYLENOL* Tablets*

TAMPER-EVIDENT Goldline GENAPAP acetaminophen (APAP) tablets.....

ASPIRIN-free PAIN RELIEVER/FEVER REDUCER 100 TABLETS - 325 mg EACH Tamper-Evident package See warning

Drug Facts (continued) Directions [illegible]

Drug Facts Active ingredient (per tablet) Acetaminophen 325 mg................Purpose Pain Reliever Fever Reducer [illegible]

RETAIN CARTON FOR COMPLETE PRODUCT INFORMATION

VOLUME 133

Decision and Order

DECISION AND 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 respondent with violations of the Federal Trade Commission Act; and

The respondent, its attorney, and counsel for the Commission having thereafter executed an agreement containing a consent order, and admission by the 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 as alleged in such complaint, or that the facts as alleged in such complaint, other than jurisdictional facts, are true, and waivers and other provisions as required by the Commission's Rules; and

The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondent violated the said 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 thirty (30) days, and having duly considered the comment filed thereafter by an interested person pursuant to Section 2.34 of its Rules, now in further conformity with the procedure prescribed in Section 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings, and enters the following order:

1. Respondent LNK International, Inc. is a New York corporation with its principal office or place of business at 60 Arkay Drive, Hauppauge, New York 11788.

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Decision and Order

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent, and the proceeding is in the public interest.

ORDER

I.

IT IS ORDERED that respondent, LNK International, Inc., its successors and assigns, and its officers, agents, representatives, and employees, 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 non prescription drug product containing an analgesic in or affecting commerce, as "commerce" is defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. § 44, shall not misrepresent, in any manner, directly or by implication, the extent to which any such product is made in the United States. For purposes of this Order, "drug" shall mean as defined in Section 15 of the Federal Trade Commission Act, 15 U.S.C. § 55, and "analgesic" shall mean an agent used to alleviate pain.

PROVIDED, however, that a representation that any such product is made in the United States will not be in violation of this order so long as all, or virtually all, of the ingredients or component parts of such product are made in the United States and all, or virtually all, of the labor in manufacturing such product is performed in the United States.

PROVIDED FURTHER, that a representation that any such product containing imported active ingredient is "Processed in the United States with Foreign Ingredients" will not be in violation of this Order when such representation is true and is used to describe a product that has been significantly processed in the United States.

PROVIDED FURTHER, that nothing in the order shall prohibit respondent from depleting the inventory of packaging and labeling for such products bearing a marking or labeling otherwise

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Decision and Order

prohibited by this order and existing on the date this order is signed, in the normal course of business, provided that no such existing inventory is shipped from respondent later than December 31, 2001.

II.

IT IS FURTHER ORDERED that respondent, 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 labeling, packaging, 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.

III.

IT IS FURTHER ORDERED that respondent, and its successors and assigns, shall deliver a copy of this order to all current and future officers and directors, and to all current and future employees, agents, 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.

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Decision and Order

IV.

IT IS FURTHER ORDERED that respondent, and its successors and assigns, shall notify the Commission at least thirty (30) days prior to any change in the corporation 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 respondent learns less than thirty (30) days prior to the date such action is to take place, respondent 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, Washington, D.C. 20580.

V.

IT IS FURTHER ORDERED that respondent, and its successors and assigns, shall, within sixty (60) days after the date of service of this order, and at such other 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 it has complied with this order.

VI.

This order will terminate on February 19, 2022, 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 this order if such complaint is filed after the order has terminated pursuant to this Part. Provided, further, that if such complaint is

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Decision and Order

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.

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Analysis

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 LNK International, Inc. (“LNK”).

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 LNK’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 Compass Foods (A&P), Eckerd Company, and Stop & Shop Supermarket Company, 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 LNK’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 LNK from misrepresenting the extent

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Analysis

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 LNK 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 LNK 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 LNK 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.

VOLUME 133

Complaint

IN THE MATTER OF

PHARMACEUTICAL FORMULATIONS, INC.

CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATIONS OF SEC. 5 AND SEC. 12 OF THE FEDERAL TRADE COMMISSION ACT

Docket C-4038; File No. 0123059 Complaint, February 19, 2002--Decision, February 19, 2002

This consent order addresses claims on certain packaging and labeling for aspirin and acetaminophen tablets produced by Respondent Pharmaceutical Formulations, Inc. that such products are all or virtually all made in the United States. The order, among other things, prohibits the respondent from misrepresenting the extent to which any non-prescription drug product containing an analgesic is made in the United States, while permitting the respondent 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 order also permits the respondent 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.

Participants

For the Commission: Laura D. Koss, Walter C. Gross, Joni Lupovitz, Elaine D. Kolish and Keith Anderson. For the Respondent: James Ingram, pro se.

COMPLAINT

The Federal Trade Commission, having reason to believe that Pharmaceutical Formulations, Inc. ("respondent") 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: