UPI REPORT PART 3:Part 3:Sweet Corporate Victoriesby: Gre...

UPI REPORT PART 3:
Part 3:Sweet Corporate Victoriesby: Gregory Gordon WASHINGTON (UPI)  In October 1982, Sen. Howell Heflin, D-Ala, proposedan obscure amendment altering the laws covering U.S. patent extensions,a move affecting only one company and one product, the artificialsweetener, aspartame. Without mentioning aspartame, which is sold under the name NutraSweet,the senate passed the amendment to the Orphan Drug Act, extending G.D.Searle Co.ís domestic monopoly on aspartame sales for another fiveyears, 10 months, and 17 days. "We think itís an excellent amendment," remarked Sen. Orrin Hatch, R-Utah, wrapping up a five-minute discussion on the Senate floor. When the House approved the same language a month later, it all butcinched another $3.5  billion to $4 billion in revenues for the Chicago-based, Searle. It helped Searleís stockholders sell the companyís assets, includingits lucrative NutraSweet division and the two domestic use patents, for$2.7 billion to the Monsanto Corp. in the summer of 1985. Sponsors of the measure found their campaign committee, enriched. Heflinís 1984 reelection committee received contributions totaling atleast $9,000. from Searleís top officers and its political actioncommittee, more than any others among a long list of Searlebeneficiaries in Congress, federal Election Committee records show. Hatchís committee received at least $3,000. the records show. Heflin defended his sponsorship of the measure, saying Searle had beenvictimized by regulatory delays that ate up most of its 17-year patent. But a spokesman for the U.S. Patent Office said Heflinís legislationmarked one of only a handful of instances in the last three decades inwhich a companyís patent has been extended by a private bill inCongress. It also provided a glimpse of the adeptness with which Searle,Monsanto, and their lobbyists have guided the artificial sweetenerthrough the obstacles of government regulatory bureaucracies to capturebig financial rewards. Headed by Donald Rumsfeld, the former Ford White House Chief of Staff,Searle repeatedly demonstrated its political acumen on other front, too,in the years prior to the sale to Monsanto. In 1981, the company overcame a controversy-snarled, eight year reviewprocess to win Food and Drug Administration approval for NutraSweet.In 1984, Searle parried an assault on the sweetenerís safety fromArizona food scientist, Dr. Woodrow Monte after hiring Arizona Gov.Bruce Babbittís former chief of staff as a lobbyist. Searle officerspassed along campaign contributions of $2,000. to a key lawmaker, andthe company soon had won passage of legislation crushing Monteís effortsto force tough state restrictions on the sweetener. "I don't know of any company that has apparently covered all of itsbases as well as has Searle," said Sen. Metzenbaum (D-Ohio). "Whether ithas to do with the scientists or lawyers, or non-profit institutions, oruniversities, or whatever; in every instance, I have found that theyhave expended their dollars very carefully and very wisely, but withoutapparent restraint as to the amount." Indeed, besides Searleís hiring of up to a dozen lobbyists, UPI tracednearly $200,000. in federal campaign contributions between 1973 and 1986from its officers and political action committee. The political intervention in the patent process drew the ire ofseveral small companies seeking to enter the aspartame market,triggering charges that a corporate giant benefited from unjustified orpreferential treatment. "I think its obvious they (Searle officials) used political muscle,"Alan Kligerman, president of Lactaid, Inc., a New Jersey diet foodmanufacturer, said of the patent extension. He said his firm had beeninterested in manufacturing aspartame until the patent was extended, but"Searle was well wired in." "It is possible that they (the Senate) did not know what they werepassing," he said. "I don't know how they got that through, except withthe right phone calls." "I would not hesitate to say," Metzenbaum said, "that the manner inwhich that five-year extension of the patent rights was put through onthe floor of the U.S. Senate was totally inappropriate." "It should not have been without the entire body being advised that,that issue was going to be on the floor of the Senate." Metzenbaum said that the Senate has an "alert" system under which alllegislation is cleared with individual senators before it is brought tothe floor, but the system was bypassed. Jerry Ray, a spokesman for Heflin, asserted the offices of keysenators, including Metzenbaum, approved the measure before it went tothe floor. But Ray offered no explanation for the failure to fullydisclose the contents and impact of the measure. Ray quoted Heflin, Chairman of the Senate Ethics Committee, is sayingSearle representatives never mentioned campaign contributions in askinghim to sponsor the amendment. Heflin said he has "supported all patent restoration bills" becauseregulatory delays have created "a chronic problem" in which companiesget so little use out of their 17-year patents, they are reluctant toput money into research. Heflin said, in Searleís case, "almost 35 percent of the patent termhad been used on a long series of administrative hearings, trials, andappeals (in) which, in the end, the corporation finally prevailed. Tonot restore some of the patent term lost would unfairly penalize them." G.D. Searle sought an extension of its patent on grounds that the Foodand Drug Administrationís handling of its aspartame approval petitionwas "an unparalleled instance of unnecessary regulatory delay, whichworked a great injustice to Searle". Critics argue that, to the contrary, the FDA suspended its 1974approval allowing Searle to market the sweetener because of evidence thecompanyís animal studies were flawed and the results were misrepresentedto the FDA in the early 1970's. The evidence prompted FDA chief counsel Richard Merrill to ask the U.S.Attorneyís office in Chicago to open a grand jury investigation intopossible fraud by the company. While a grand jury investigated similarallegations related to Searle drug products, no such inquiry was everbegun into the aspartame testing. But the FDA was concerned enough aboutSearleís research to appoint two task forces, a university researchgroup, and a Public Board of Inquiry to review various studies. In 1981, shortly after taking office, FDA commissioner Arthur HullHayes, Jr. overturned the three-man Board of Inquiry and approved saleof NutraSweet in dry foods. Two years later, Hayesí deputy, MarkNovitch, approved the use of aspartame in soft drinks. Kligerman dismissed as "crap" Searleís contention it had beenvictimized by the FDA bureaucracy, which delayed a decision from 1975 to1981. "The FDA had reason for doing this," Kligerman said of the intensereview process. "It was not an unnecessary delay. It was Searleís faultthis happened." For Purification Engineering, Inc. of Columbia, Md., which raised moneyfrom private investors and built a plant solely to manufacture aspartamefor Searle, the congressional action ultimately turned out to bedevastating. Gary Calton, a senior vice president for Purification Engineering, saidthat on Jan. 4, 1985, Searle notified the firm its contract would not berenewed. Seven months later, the firm was sold to Rhone-Poulenc Co., aFrench firm. "My company would have been worth a great deal more if it had not beenfor that (patent) extension," Calton said. (Note: Searle sold TheNutraSweet Co. to Monsanto in 1985) Calling the action unfair, he said,"I don't think Congress should go around passing laws making G.D. Searlerich any more than they should go around making me rich."  Searle officials declined to discussed the patent extension, but acompany lobbyist, former White House official William Timmons, said thecompany "felt there was an injustice" in the delays followingaspartameís 1974 approval. He said the company "took an advocacy role bytalking to a lot of members of Congress". In May of 1984, FEC records show Heflinís reelection committee received$1,000. donations from Daniel Searle, the chief executive officer of thegiant pharmaceutical company; his wife, Dain; William Searle, Searleísbrother who was a company director; William Searleís wife, Sally;Suzanne Searle Dixon, a sister of the Searles; and her husband, WesleyDixon, who also was a company director. Heflin also received $1,000. from William Searle prior to the generalelection, and $2,000. in Searle PAC contributions, FEC records show. On November 1982, a week after his reelection and a month afterpraising the amendment in the Senate chambers, Hatchís committeereceived $2,000. in contributions from top Searle officers, the recordsshow. Sen. Robert Byrd (D-W.Va.), who brought the amendment up for a vote onHeflinís behalf, also received a $1,000. campaign contribution fromDaniel Searle on Sept. 25, 1981. Hatch received contributions of $1,000. each from Daniel Searle, WesleyDixon, and William Searle on Nov. 11, 1982, days after he was reelectedto a second term in which he continued as chairman of the Labor andHuman Resources Committee that oversees the FDA. As chairman of the panel until last January, Hatch repeatedly blockedSen. Metzenbaumís calls for new hearings into the safety of NutraSweet. Prior to his reelection, Hatch also received $2,500. in contributionsfrom the soft drink PAC. Rep. Henry Waxman (D-Calif.), who sponsored the Orphan Drug Actcovering research for treating rare diseases and who carried Hefliníspatent amendment to the bill in the House, received $1,500. in campaigncontributions from the soft drink PAC, including $500. two days beforethe measureís introduction in the House. Like Heflin, Waxman made no mention of aspartame in describing theSenate amendments to the drug act on the House floor. Searle also flashed its political prowess after Arizona scientistWoodrow Monte stirred up a furor in 1984 by publicly assailingNutraSweetís safety. The ensuing events, Monte charged, "reflected exactly what Searle hasbeen doing all along. Theyíve been buying their way into the hearts andminds of America. They've been using their financial acumen to get theirway." Within months, legislative rules were swept aside one day in early 1985and, in a swift, subtle maneuver without notice to the public, Monteíscampaign for state regulations on the sweetener was sidetracked. Monte was a leading national advocate in the drive to block marketingof NutraSweet until his own credibility was damaged in 1984 withdisclosures he had invested in "put options" that would have earnedprofits if Searleís stock dropped.He now concedes his options trading was a mistake, but denies itinfluenced his research. Monte said he was convinced in 1983, when the FDA okayed use ofNutraSweet in carbonated beverages, that the sweetener would break downinto poisonous quantities of methyl alcohol in diet sodas left in theSouthwest sun. Monte, director of the Food Science and Nutrition Laboratories atArizona State, and two consumer groups petitioned the Arizona Dept. ofHealth Services to ban the sweetener. Monte said his rat studies had shown that chronic ingestion of methylalcohol causes brain damage similar to that in humans suffering fromMultiple Sclerosis, including seizures, amnesia, optic neuritis,numbness, and dizziness. In the desert heat, Monte said, methanoldegrades faster into toxic methyl alcohol. Searle and FDA officials have argued that aspartame contains too littlemethanol to pose a health hazard. When Monte and the consumer groups pressed their legal challenge formore than a year, Searle flexed its muscle: The company dispatched acoterie of lobbyists to the state capitol, among them Andrew Hurwitz,Gov. Babbittís former Chief of Staff; prominent Arizona lobbyist CharlesPine; company lawyer Roger Thies, and another company official, DavidWest. Between August 23, and Sept. 21, 1984 company officers Daniel Searleand his brother-in-law, Wesley Dixon, each contributed $1,000. to thecampaign of State House Majority Leader Burton Barr, later a GOPcandidate for governor, reports to the Arizona Secretary of Stateísoffice records show. Campaign disclosure forms show revealed that, during the same period,several House Republicans received contributions from the Committee toreelect Barr, including State Reps. Don Aldridge, Karen Mills, and JanBrewer, all among the Health Committee members who voted 13-0 to passthe measure affecting NutraSweet. The trio received $1,500., $1,000. and$750. respectively from Barr, who for years has enhanced his influenceby donating to colleaguesí campaigns. Barr and Arizona State University Regent William Reilly contacted theschoolís president, J. Russell Nelson, and Academic Vice President JackKinsinger to inquire into Monteís public attacks on NutraSweet,published reports said. Kinsinger insisted that the issue caused nodelay in his decision to grant Monte tenure. Barr did not return phonecalls. When Monteís first petition was rejected and he filed forreconsideration, Hurwitz wrote a letter offering legal advice to theDept. of Health Services (DHS) about its response, and sent copies toBarr and aides to Gov. Babbitt. In April of 1985, about the same time Monte and his associates finallywere to be granted a hearing before the state agency on their petition,they learned that the Arizona Legislature had used a rare maneuver tochange the law, without public notice to bar state regulation of FDA-approved food additives. The measure passed under the misleading titleof a toxic waste bill.Monteís campaign to ban NutraSweet in Arizona prompted the State Dept.of Health Services to conduct a study to determine how much NutraSweetsoft drinks degraded in high-temperature conditions. The study,completed in July 1984, found that methanol levels were highest (9.4ppm), in Diet 7-Up samples stored the longest time in the warmesttemperature, 99? F  heat. Present and former Arizona state officials have told UPI that the studyconcerned DHS officials enough that they discussed a NutraSweet ban. But Norman Peterson, manager of the DHSís Office of Chronic Disease andEnvironmental Health Services, said that the agency concluded that "theFDA address the methyl alcohol question and had all sorts of supportingdata. We had no basis for saying that the data they had presented insupport was not correct or adequate." Another source said Peterson was distressed enough that, during ameeting attended by DHS director Donald Mathis, he proposed beingallowed to recommend that pregnant woman, and children, limit theirconsumption of NutraSweet.Peterson would not confirm the episode, but recalled that he "was upsetabout the fact that there were so many unanswered questions". Mathis, who since left the agency, said he was satisfied that it"wouldn't be humanly possible" to ingest levels of NutraSweet that wouldproduce a toxic reaction. In September 1984, Monte and his associates file suit to force the DHSto impose storage and labeling requirements or ban NutraSweetaltogether. But a proposed settlement under which the agency would holda public hearing was scuttled because it lacked the approval of Mathisísuccessor, Lloyd Novick. After more negotiations, the DHS agreed to hold a hearing. But beforeit could take place, the issue was killed by the legislative change. House Speaker James Sossaman later admitted that the GOP-controlledHouse violated its own rules in passing a so-called "strike all"amendment. Chairman Bart Baker of the Health Committee engineered theaction, in which an existing bill was stripped, replaced with theNutraSweet language and brought to a vote without the required 24 hourspublic notice. For Monte, the development was all the more staggering after he hadgotten into a jam over his stock purchase. Monte said that, afterreviewing files at the FDA and consulting with his lawyer in 1983, heinvested less than $2,000. on Searle options, hoping to raise money tosupport his costly legal battles against the sweetener. He said he endedup losing $1,224. Lawyer Rick Faerber also invested in part, he said, because of Monteísknowledge of an upcoming CBS story critical of the FDAís approval ofaspartame. He said stock analysts had phoned Monte inquiring about hisArizona petitions and apparently got the idea the developments woulddepress the stock value. Faerber said he regrets telling Monte that he "didnít think there wasanything wrong" with investing, particularly because pro-NutraSweetforces apparently learned of their dealings. CBS employees also bought"put options" but a Securities and Exchange Commission investigation didnot lead to any charges. Shortly after news stories about the investment appeared, Rep. BobMcEwen, (R-Ohio), assailed CBS and Monte for "irresponsible reportingand conflicts of interest" in a brief speech on the floor of the U.S.Senate. McEwen charged that the "false report" about NutraSweet wasaired solely for profit. But in his speech, Rep. McEwen did not mention that his top assistantCharles Greener, is the son of William Greener, Jr., Searleís vicepresident for corporate communications.Charles Greener who said he was "unaware" of Rep. McEwenís floor speechuntil after it occurred, said his father never has handled NutraSweetmatters and that McEwen did not know any Searle officials. The success of the Searle family business, founded 80 years ago, is allthe more astounding when compared to the companyís predicament in 1977when it plucked Rumsfeld as its president. Facing a company mired indebt, Rumsfeld, a native Chicagoan and former Illinois congressman,quickly hired three other outgoing Ford Administration officials to joinhim. As executive vice president, he named John Robson, a former partner inthe law firm of Sidley & Austin who had served as President Fordíschairman of the Civil Aeronautics Board. Robert Shapiro, Robsonísspecial assistant at the Transportation Department, was tapped asgeneral counsel. Rumsfeld also hired William Greener, Sr., who had beena spokesman in the Ford White House and Rumsfeldís chief spokesman atthe Pentagon. The pharmaceutical company suddenly was being run by lawyers andpoliticians.Stomaching a $28 million net loss in his first year, Rumsfeld slashedSearleís operations, selling off more than 30 subsidiaries worth morethan $400 million. Before Rumsfeld could mount a full scale effort to lift a FDA freeze onthe sale of NutraSweet, Searle was hit with serious new problems. Suitsfiled on behalf of 780 women, alleged the companyís Copper 7intrauterine device had caused them to develop pelvic inflammatorydisease, an infection of the reproductive tract that can lead tosterility, even death. Before the suits could be settled, Searle sold out to Monsanto. The huge, St. Louis-based chemical company and its officers werepromptly met with stockholder suits alleging they had failed to explorepotential safety problems with Searleís biggest moneymakers- Copper 7IUD and NutraSweet. Rejecting criticism of the acquisition, Earl Harbison, Jr., executivevice president of Monsanto and Chairman of the Board of its Searlepharmaceutical subsidiary, said in October 1985, that Monsanto "studiedthis situation (Copper 7 litigation) very closely prior to acquiringSearle, including consultations with independent physicians"."We satisfied ourselves with the safety and efficacy of the product," hesaid.Since then, Copper 7 has been pulled off the market. Some lawyerslikened the resulting legal morass to the failure of the Dalkon Shieldthat drove the Richmond-based A.H. Robins Co. into Chapter 11 bankruptcyprotection. But a former Monsanto official, who requested anonymity, said that aspart of the sale agreement, Searle set aside reserves to cover the IUDlawsuits. Thanks to NutraSweet, Searle family members Daniel and WilliamSearle and their sister, Suzanne Searle Dixon, to date appear to havewalked away unscathed from all the crises and legal battles. And even if NutraSweet were proved hazardous, the purchase agreementprovided "no escrow, reserve or holdback for liability stemming from thepotential health hazards attributed to the NutraSweet product line,"says one lawsuit filed by Chicago lawyer Robert Holstein on behalf of aMonsanto stockholder. And Rumsfeld emerged from his nine years with the company in solidfinancial condition. Securities and Exchange Commission records showthat for his guiding the sweeping turnaround, he earned more than $ 2million in salaries and more than $1.5 million in bonuses between 1979and 1984. "Banana plants don't make NutraSweet," the television announcer notedwryly, and the image of an exotic bird perched in a jungle tree filledthe screen. "Neither do cows," said the voice, as the camera cut to a robust-looking heifer wagging its tail. "But they might as well. If you've hadbananas and milk, you've eaten whatís in NutraSweet." True, bananas, milk and NutraSweet all contain phenylalanine, one of 21amino acids that form the "building blocks" of protein. But that doesníttell the whole story. Dr. Richard Wurtman, a neuroscientist at theMassachusetts Institute of Technology, says that because NutraSweetlacks other important amino acids normally found in foods, the brainabsorbs unusually high levels of phenylalanine that could increase thelikelihood of epileptic seizures. Referring to an ad proclaiming that the body treats the ingredient ofthe artificial sweetener "no differently than if they came from a peachor a string bean or a glass of milk," Wurtman said, "Thatís not true." Dr. Louis Elsas, director of medical genetics at Emory University,groans at the industry arguments that eating or drinking NutraSweet(aspartame) is just like eating a hamburger. "Phenylalanine is a known toxin to the brain,í Elsas said. "Aspartameis phenylalanine, and drinking aspartame is like drinking phenylalanineas an individual amino acid." A spokeswoman at the New York offices of Ogilvy and Mather, the lead adagency on the sweetener account for the Chicago-based NutraSweet Co.,declined comment on the allegation. The drumbeat of NutraSweetadvertisements has been steady. Beverage Industry, a trade publication,labeled the NutraSweet blitz "probably the largest advertising campaignever designed around a product ingredient." Industry sources say that since 1984, The NutraSweet Co. alone hasspent $30 million to $40 million a year on advertising, and ads by dietsoft drink manufacturers and other companies, whoís products carry theswirl trademark of the sugar-free sweetener, would easily send that thefigure past $100 million a year. The campaign has worked to make NutraSweet a household word.Football stars Joe Montana and Dan Marino and boxer Marvin Hagler havepitched products containing the artificial sweetener on television.Former Democratic vice presidential candidate Geraldine Ferraro hasappeared in advertisements endorsing a product containing NutraSweet, ashave numerous celebrities, including Bill Cosby, Raquel Welch and BillyCrystal.