Justice News

Department of Justice
Office of Public Affairs

FOR IMMEDIATE RELEASE
Friday, February 6, 2015

District Court Enters Permanent Injunction Against Oregon Company and Executive to Stop Distribution of Unapproved New Drugs and Adulterated Products

The U.S. District Court for the District of Oregon entered a permanent injunction against James G. Cole Inc., of Hood River, Oregon, its president James G. Cole and its former general manager Julie D. Graves to prevent the distribution of unapproved and misbranded drugs and adulterated dietary supplements, the Department of Justice announced today. 

The company manufactures various products that have been distributed under the name “Maxam Nutraceutics.”  The department filed a complaint in the U.S. District Court for the District of Oregon, at the request of the U.S. Food and Drug Administration (FDA), alleging that the company’s dietary supplements are manufactured under conditions that are inadequate to ensure the quality of its products and that its products are unapproved and misbranded drugs.  Pursuant to the permanent injunction entered by the court on Feb. 5, the defendants are prevented from distributing the company’s products until the defendants comply with the requirements set forth in the court’s order. 

U.S. District Court Judge Michael H. Simon held that the company’s Maxam products are unapproved new drugs under the federal Food, Drug, and Cosmetic Act (FDCA).  The court based its decision in part on the company’s claims that the products could treat autism, Alzheimer’s, HIV and Fibromyalgia, among other diseases.

“The American public needs to have confidence that products promoted for the treatment of disease are safe and effective,” said Acting Assistant Attorney General Joyce R. Branda of the Justice Department’s Civil Division.  “The failure of manufacturers of dietary supplements to have procedures in place to ensure the quality and identity of all ingredients that go into their products poses a serious risk to public health.”

The court also held that the company’s products were misbranded drugs because the products failed to bear adequate directions for use for the purposes for which the drugs were intended – in the case of the company’s products, to treat diseases such as autism.  The court noted that such directions for use, including dosages, warnings and side effects, must be premised on clinical data derived from scientifically controlled investigation, and that the defendants had “conducted no controlled studies and collected no clinical data” regarding their products.

The court also found that the company’s products were adulterated dietary supplements because they were not produced in compliance with federal good manufacturing practice regulations.  Under the FDCA, dietary supplement manufacturers are required to have systems in place to ensure that their products meet specifications for identity, purity, strength and composition.  A series of inspections of the company’s manufacturing facility, conducted by the FDA beginning in 2012, revealed, among other things, that the defendants did not have specifications for the ingredients in their products and did not conduct appropriate tests on incoming shipments of components used in the manufacture of their products to determine the identity, strength, purity and composition of each component.  The court found that the state of the defendants’ manufacturing practices was such that the defendants have “no idea what goes into their products.”

The permanent injunction prohibits the defendants from manufacturing or distributing their products unless and until they take a number of steps to come into compliance with federal law, including obtaining FDA approval of their drug products or working with an expert to remove all claims from their product labels, promotional materials and websites that evidence an intended use for their products as drugs, and coming into full compliance with good manufacturing practice regulations.

“Along with our partners at the FDA, we are committed to protecting our citizens from threats to their health and safety,” said U.S. Attorney Amanda Marshall of the District of Oregon.  “Everyone who deals in products that affect people’s health must comply with federal law.”

The government was represented by Trial Attorney Ann Entwistle of the Civil Division’s Consumer Protection Branch, with the assistance of Associate Chief Counsel for Enforcement Sonia Nath and Associate Chief Counsel for Enforcement Son Nguyen of the Department of Health and Human Services’ Office of General Counsel’s Food and Drug Division.  Assistance was also provided by the U.S. Attorney’s Office for the District of Oregon.

15-149
Topic: 
Consumer Protection
Updated February 6, 2015