MGMT 211 Lecture 12 Outline of Current Lecture- FDACurrent Lectureo Additives: anything added to food; even if it is something that is put back in Dyes, preservativeso Food, Drug and Cosmetic Act: Delaney clause  Food additive can’t have any effect on humans; zero risk standards Began analyzing additives- Saccharine, red m&mso Red dye was cancer-causing; you had to eat a lot in order to be affected by cancero It taught the company how important the colors were Advertising by the colorso Clinton Administration: Food Quality Protection Act Zero-risk standard replaced with reasonable standard o 4th category to FDA: pesticides; when you eat food, you eat residue of pesticides Nutritional labeling: important for diabetics- 1973 law: so complicated and difficult to understando Bush Administration: Labeling and Education Act of 1990o 2 purposes: make labels readable and understandable and prevent misleading product claimso You can now go to the store, and based on a serving size, you can clearly tell what is inside the product; you can clearly read ito Also a listing of all the ingredients (for those with food allergies) In order of their amount in the producto Problem: based on serving size; it is not what we actually eat Many people don’t measure out their cereal and milk each morning for breakfast- They go over the recommended servings by a lot Ice cream: ½ cup is the serving on the label; it’s not enough Either the public needs to be educated on what they should eat or the definition of a serving needs to be changedo Confusing terminology needed to be changed After 1996, fresh means 3 things: it isn’t processed, frozen or preserved; it’s still dirty from the field (almost) Standards for low-fat: peanut butter that advertiseditself as low-fat- It’s comprised of ground-up peanuts and sugar- What’s low-fat? Less peanuts (not possible) “lite” products have to have 1/3 less calories than original product Health claims must be accurate- Oatmeal: if you eat it for 30 days, it will lower your cholesterol - You must be able to prove it and show it’s trueo Drugs:  Prior to 1938, you could go the druggist, tell him you don’t feel good, and he could go in the back and make you something (as long as the ingredients were legal Now, the FDA has to approve the ingredients in over-the-counter products and prescription drugs Kefauver Harris Amendment: it has to be safe and effective; it has to do what it says it will do- Approval will be extremely difficult to get; costs $250 million and 12 year (remember patents)- People complained about this- AIDS came out of nowhere; scientists tried to develop drugs to combat it; they were demanding new drugso Lots of criticism that it took so much worko They had relaxed the standards for drug approval, but are now clamping down again The new drugs have also proven harmful List of recalled drugs grew  Mistakes can be made: silicone breast implants- They began leaking into body cavities and these women would start developing all kinds of problems- FDA jumped to the conclusion it was the implants, and the manufacturers had to pay big money- Bush administration: it was not the silicone causing the problem; it exonerated the company, but the people didn’t have to give the money backo The original company didn’t try to re-sell themo Those who got approved to sell generally gave a lot of money in campaign funds- Consumer Product Safety Commissiono Newer federal agency dealing with consumer productso Independent regulatory commission; appointed by the president to 7 year term; 5 members; no more than 3 can be from one political partyo First thing to do is define consumer product: developed for use in your home (not industrial products) Excludes products covered somewhere else (a lot are already covered elsewhere)o Then decide what the most dangerous products wereo Develop standards for safety The most dangerous were the most common- Stairways: how do you make them safer? - Chair: how? Biggest danger was leaning backwards in them- Bikes- Beds: dangerous to jump on the bedo Enforce the standards Find out who’s violating them- National clearing house, national surveillance system,  Anytime they get a lawsuit, turn it into the CPSC With enough complaints, they begin investigating- If the product is dangerous (imminent harm/death), you can have it taken off the market immediately- If it is possibly going to hurt you, you can have hearings You get a hearing in front of an administrative law judge; if you don’t like the decision, you appeal to the appeal process in front of the 5 commissioners; then you go to the Federal Court of Appeals- Lawn darts: game, comprised of several big darts with fins and a large point; weighted and sharpened; you’re supposed to set up targets and throw them at thoseo kids threw them at each other; a lot got hurt, and some diedo CPSC took them off the market, and the company fought tokeep them on o Even after informing the kids of how to use them, the kids still threw them at each other and hurt each other; they were taken off the market- Start of Ch. 7: Anti-trust lawo Anti-monopolyo Competition is a good thing, and that is what anti-trust law Competitors will fight each other to make a better product for a cheaper priceo With a monopoly, there is no incentive for the manufacturer to make a better product; you can be gouged on the price Late 1800’s: big business: a lot people were creating empires; these people were extremely wealthy; unbelievably wealthy The other people of the world got more and more poor Greed is inevitable in society; it is a good thing until it gets to the point of monopoly- People of immense wealth were creating these situations- Illinois: a town was not serviced by a railroad; farmers had to rely on grain merchants to buy their grain and they had 4-5 merchants to pick from; all the merchants decided to charge the same priceo The contract was illegal because it was in restraint of trade and could not stand- People like Rockefeller would go into a town, establish a business and put the other companies similar out of businesso He garnered a huge fortune; controlled 82% of oil productso there were no government regulations- Federal government got involvedo 1890: Sherman Act came into effect; trust-buster act; wentafter monopolies; made it illegal