DECEMBER 1995 · VOLUME 16 · NUMBER 12
N A M E S I N T H E N E W S
DECEMBER 1995 · VOLUME 16 · NUMBER 12
N A M E S I N T H E N E W S
Procter and Gamble's artificial fat substitute should be kept out of food, Harvard doctors and a public interest group asserted separately in November 1995.
Olestra, a synthetic combination of fatty acids and sugar bound together in molecules too large for the body to digest, is P&G's trade name for sucrose polyester.
"We believe the FDA should not ... allow Olestra to be introduced into the American food supply," wrote Harvard University Nutrition Department Chair Dr. Walter Willett and Harvard epidemiology professor Dr. Meir Stampfer in a release based on their research.
But a majority of the U.S. Food and Drug Administration's (FDA) 20-member Food Advisory Committee indicated in November 1995 that Olestra meets the FDA's test of providing "reasonable certainty of no harm." The committee recommended that Olestra be approved provided that it carries labels warning of its laxative effects. An FDA decision is expected by early 1996.
"Olestra is the first food additive with negative nutritional value. It prevents important nutrients from being utilized by the body," says Center for Science in the Public Interest (CSPI) Executive Director Michael Jacobson. "Even modest Olestra ingestion can cause a wide range of gastrointestinal problems ... ranging from nausea, bloating, and diarrhea to so-called anal leakage."
"The safety of Olestra has been demonstrated by a comprehensive research program," a P&G statement says. "CSPI's allegations aren't based in reality," adds Gordon Brunner, P&G senior vice president of research.
Daiwa Dupes Fed
U.S. bank regulators reacted sharply in November 1995 to news that a Daiwa Bank subsidiary lost $1.1 billion trying to hide unauthorized securities trades.
Federal officials responded with a 24-count indictment that charges Daiwa with conspiracy, fraud, bank exam obstruction, records falsification and failure to disclose federal crimes. Regulators will terminate U.S. operations of Japan-based Daiwa, one of the world's largest banks.
The charges arise out of unauthorized securities sales, including the sale of more than $375 million in customer securities by Toshihide Iguchi, a former Daiwa executive vice president in New York who pleaded guilty to fraud.
"The bank remains the sole victim of Mr. Iguchi's wrongdoing,"says Daiwa's new president, Takashi Kaiho, in a release that says Daiwa will defend itself. "Not a single customer of the bank suffered any financial loss."
U.S. officials were disturbed about being misled. The U.S. attorney in Manhattan, Mary Jo White, said Daiwa was indicted "not only because its former officer, Toshihide Iguchi, committed serious crimes, but because, as charged in the indictment, Daiwa and a number of its highest senior officials themselves committed crimes as they attempted to cover up other crimes."
Some analysts say the crackdown diverts attention from U.S. regulatory lapses. "Where has the Fed been?" asks Washington, D.C.-based Center for Study of Responsive Law bank specialist Jake Lewis, referring to the Federal Reserve Board, which regulates foreign banks. "They are now about to be given by the Congress massive new powers controlling securities operations by banks. They did the right thing only after [Iguchi] confessed. That is not great detective work. They ought to detect these problems before they become one-billion dollar problems."
Glaxo Claims Windfall
Glaxo Wellcome Inc. tried to explain to the Washington, D.C. press corps in November 1995 why it deserves the $3.6 billion windfall that Congress inadvertently gave it. The Raleigh-Durham, North Carolina-based drug company catered a lunch for journalists, who took a bite out of Glaxo instead.
The U.S. law implementing the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) changes U.S. patent term durations from 17 years from the date a patent is issued to 20 years from the date a patent application is submitted [see "GATT Rx: Profit Overdose, Multinational Monitor, May 1995]. At issue are so-called "pipeline" drugs that were nearing the end of their patent under the old system but which would be extended under the new system. Some drug companies have been preparing to introduce cheaper generic versions of these pipeline drugs when their old patent expired. A clause in the new law theoretically allows the marketing of generics at the 17-year patent expiration point -- if a company has made a significant prior investment in the product and if it pays a royalty to the patent holder.
A Glaxo lawyer, however, discovered a contradiction in the law that precludes the Food and Drug Administration (FDA) from approving a generic version of a drug until its GATT-extended patent expires. Postponing generics is expected to cost consumers $4.3 billion, $3.6 billion of which will go to Glaxo for its anti-ulcer drug Zantac.
Senators David Pryor (D-Arkansas) and John Chaffee (R-Rhode Island) introduced a bill to close this loophole. But Glaxo's CEO Robert Ingram told the media that drug companies need strong profits to develop new drugs. Reporters wanted to know about Glaxo's links to Illinois Senator Carol Moseley-Braun, the only Democrat to oppose the Pryor-Chaffee bill in the Senate Finance Committee in September 1995.
Moseley-Braun has received from Glaxo:trips in the company's jet, $10,000 in campaign funds and $15,000 for one speech she gave before her election. "If I were judged on campaign donations, I could be hit on every vote I make, given how much money you have to raise," Moseley-Braun told the St Louis Post-Dispatch.
-- Russell Mokhiber