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EXHIBIT 2

nifoun Letter from Council ordrugs of American Medical Association

May 22, 1961

Dear Doctor:

We should greatly appreciate your serving as a consultant

assisting the Council on Drugs in its evaluation of

We realize that you have many demands on your time, but feel

that you may wish to assist us in the evaluation of this agent in

particular since the manufacturer ba alised & general comment of yours as

a reference in what may or may not be a misleading fashion in the product

brochure.

There 18 enclosed a collection of data, reprints, and summaries

of published papers supplied by the manufacturer,

You will render invlu.

able assistance to the Council by reviewing this material and providing

us with your 188088nent and evaluation of the drug... Your comments

are especially invited concerning the adequacy of the laboratory and

clinical data, usefulness, indications and contraindications and toxicity

of the drug; comparisons with other similar drugs would also be helpful...

Each drug description is designed to provide fair comment and

criticism based on available evidence, whether or not this is considered

adequate to establish usefulness. Thus, the monographs may be either

favorable or unfavorable.

EXHIBIT 3

Washington, D.C.
December 23, 1960

Honorable Arthur S. Flemming
Secretary of Health, Education, and Welfare
Washington 25, D.C.

Dear Mr. Secretary:

I am happy to submit herewith the report of the Special Investigative Unit appointed by you last June to look into certain charges involving employees and operations of the Food and Drug Administration.

The opinions expressed are the joint and several opinions of the members of the Unit, without dissent. I trust that you will find them helpful.

The other members of the Unit have authorized me to express our appreciation for the very fine cooperation of the many persons upon whom we had to call for help, from your own office, Mr. Miles' office, the General Counsel's office and the entire Food and Drug Administration. We also wish to thank you for the expression of confidence in us which is implicit in the assignment.

Sincerely yours,

/s/

Charles H. Kendall

Enclosure

73753 061-pt. 2-2

REPORT TO THE SECRETARY OF HEALTH,
EDUCATION, AND WELFARE CONCERNING
THE FOOD AND DRUG ADMINISTRATION

INTRODUCTION

This is a report based upon an investigation into the personnel and operations of the Food and Drug Administration. The investigation was made, at the request of the Secretary of Health, Education, and Welfare, by a special investigative unit, made up of an investigator, a doctor, and a lawyer, none of whom was earlier connected with the Food and Drug Administration or the Department of Health, Education, and Welfare. The report is advisory only, involving opinions and recommendations based upon searching inquiry over a period of six months.

The Food and Drug Administration is that agency of Government charged with the administration and enforcement of the Federal food, drug, and cosmetic laws. It and its predecessor agencies have for 54 years been responsible for providing the people of the United States with such assurance of safety and wholesomeness in food and drugs as the Congress has from time to time seen fit to require. As of this time the pertinent statutes call for the maintenance of a great many safeguards in terms of purity, potency, cleanliness, labeling, specifications, toxicity and control in the fields of food, drugs, and cosmetics. The faithful and effective performance of these functions is, of course, directly related to the health and well-being of every individual and therefore stands high among the responsibilities of Government itself.

In the Spring of this year a witness before a committee of the United States Sedate said: "I believe also that hundreds of people, not merely in this country, suffer daily, and many die because the Food and Drug Administration bas failed utterly in its solemn task of enforcing those sections of the law dealing with the safety and misbranding of drugs, particularly prescription drugs." This statement was made by a physician of substantial training and experience, including experience as an official of the Food and Drug Administration. It was made shortly after evidence had been produced before the same committee to the effect that a former FDA official Dr. Henry Welch, Director of the Antibiotics Division bad, over a period of seven years, received about two hundred thousand dollars in payment for services to a publishing firm which payments bad been measured by the amount of sales to the drug industry of advertising space and reprints of articles in the publishing firm's Journals. The accusation and the disclosure, in juxtaposition, colored and accented each other.

It was under these circumstances that the Secretary of Health, Education, and Welfare made the assignment to this unit, and to a committee of scientists appointed by the President of the National Academy of Sciences, of responsibility for a thorough and impartial examination into the facts. The scientific committee reported, under date of Sept. 27, 1960, that the scientific decisions of the Food and Drug Administration were acceptable and showed no evidence of disregard of the public health. This report deals with issues of employee integrity and relationship to the regulated industries,

INTEGRITY OF EMPLOYEES

It is a truism that a public of?ice 18 a public trust, The principle bas special applicability to those public functions which directly affect the physical and mental well-being of our people. A conflict of interest between the official duties of FDA personnel and their private finances cannot be tolerated. In the course of this lovestigation a careful examination was made of the sources of personal income of FDA employees having inspection, scientific or administrative decision-making responsibilities. This examination included the review of information provided by the employees, an inspection of Government files and, in appropriate cases, a field investigation.

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Special attention was given to any relationship with M.D. Publications or Medical Encyclopedia, Inc. They are the publishing houses with which Dr. Henry Welch was associated during the latter several years of his employment in FDA. There were seven other FDA employees connected in one way or another with these organizations. One was a clerical assistant who received a maximum of $75.00 per month for performing clerical duties, outside of his regular FDA duties, for Dr. Welch in connection with his publishing activities. The remaining six are scientific employees who, for their editorial or writing activities, received no compensation or nominal compensation ranging from a $50 one time payment for the writing of a scientific editorial, to the receipt of $2345 over a five-year period for the preparation of some 660 abstracts from medical literature. Permission for engaging in these outside activities was granted in each case by FDA officials. Five had discontinued these outside activities by December 31, 1959. The remaining two severed their relationships in May 1960. We do not consider that any of these cases has sucb significance as to warrant separate discussion in this report.

Upon all the evidence developed there is no reason to believe that any present employee of the Food and Drug Administration has personal financial interests conflicting with the obligations of his Government employment.

It is manifestly impossible, of course, to be sure that no single employee allows a recommendation or decision to be affected either by the hope of some form of reward or the more subtle motivations of friendship or sympathy. The emphasis which we bave put upon the financial aspect of our investigation stems, of course, from the disclosures concerning the personal income of Dr. Henry Welch,

Dr. Welch 18 no longer an official of FDA, and the gross improprieties involved in his relationships with private industry are here of concern to us only as examples of what can happen. We felt ourselves specially charged with the responsibility of seeking out any other similar cases. We are convinced tbat there are none.

It is appropriate here to remark, however, tbat we found no consistent attitude in FDA concerning the acceptance of minor favors and kindnesses from industry and its representatives. Typical of this is the lack of uniformity among field and headquarters offices with respect to the acceptance of Christmas presents. Granted that Government officials are not in fact influenced by buch gifts, it remains an anomaly that they are sometimes given and received by private concerns and regulatory officials.

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