AIDS TREATMENT NEWS No. 108 - August 3, 1990
John S. James

The proposed law, SB 2872, would allow seizure and forfeiture proceedings against property -- including entire companies -- in some cases even before conviction of a crime. After expenses were paid, proceeds would be split 50-50 between State and local prosecutors -- financing more health-fraud investigations, and creating an organizational incentive for prosecution against unapproved medical treatment, apart from any public-policy objective.

Arguments For and Against

SB 2872 was introduced by Senator Marian Bergeson at the request of the California Department of Health Services. The initiative did not come from industry, the professions, or the public; in fact, as late as April 17, when the bill was considered by a Senate committee, not one person or organization had contacted the legislature to support it.

By July 27, there were three supporters: the American Cancer Society, the American Council on Science and Health, and the Cancer Advisory Council of the State Department of Health Services. The American Cancer Society could only give us its 91-word letter to the legislature. This letter does not address the merits of this particular bill, and shows no evidence that anyone in the organization examined the bill's specifics.

The American Council on Science and Health could give us even less. Its president was on vacation, and no one in the office knew that the organization had taken any such position.

The short letter from the Cancer Advisory Council said that the bill had been discussed briefly at its last meeting, and it did give an argument in support. It praised California's existing laws against unorthodox cancer treatment, but said that "funding is not readily available for enforcement activities, and thus some of our very effective laws tend to have a hollow ring to them. The Bergeson Bill will help to rectify this."

As of July 27, two organizations were listed as opposing the bill: the pharmaceutical company Genentech, Inc., and the California Attorneys for Criminal Justice. The two and a half page letter from Genentech's lawyers did provide a detailed critique:

"Under the provisions of SB 2872, a pharmaceutical company such as Genentech could have its entire manufacturing and research facility seized and made subject to forfeiture proceedings, even if a conviction has not yet been won. In addition, the bill allows for the entire forfeiture of a company's facility if intent is proven in even minor violations of the instances enumerated in Division 21."

Division 21 (of the Health and Safety Code) covers "no fewer than thirty activities which may be violated," Genentech's letter explained. "The following list is just a sampling of those activities which, if violated, would cause a pharmaceutical company operating in California to become subject to forfeiture proceedings, " if there was a second violation, or any violation "with intent to defraud or mislead." The list of 14 items summarized in the letter mostly concerned drug labeling deficiencies, prescribing or administering an experimental drug in violation of State requirements, claiming that a new drug is effective, or failing to maintain adequate records. A company could also be seized if a product label failed to carry a warning message required by California's Proposition 65. Inadequate filing of paperwork with the State could also lead to a company's seizure.

Another problem mentioned by the letter is that it is common practice for a pharmaceutical company to make claims for a drug which may later be contested by the FDA, based on a different interpretation of the data. In such a case, SB 2872 would allow the State to "arrest an appropriate company employee and thus cease the operations of the company until the FDA matter is settled."

The other letter opposed to SB 2872, from the California Attorneys for Criminal Justice, said that the current forfeiture law, in effect now for about one year, was "the result of careful and lengthy negotiations by all parties and interests concerned. It was generally agreed that the new law would be in effect for a period of five years, at which time it could be closely evaluated before it was expanded to other areas or eliminated."

An April 17 legislative analysis by the Senate Committee on Judiciary pointed to other possible problems:

* Bounties could cause district attorneys to unduly emphasize crimes which provide financing to their offices, to the neglect of other serious crimes, such as rape, which do not.

* Increased prosecutions due to bounties could strain courts, jails, or other parts of the criminal-justice system.

* Expenses could be recovered from persons not convicted of or even charged with any crime. And the debt for such expenses, unlike other debts, could not be discharged in bankruptcy.

Comment

Our concern is that funding law-enforcement agencies through seizure of property could lead to enforcement actions conducted primarily for generation of revenue, reducing patients' treatment options and slowing the pace of research. People may believe it is impossible that a major company like Genentech, capitalized at four billion dollars, could be seized and sold as a result of minor or technical law violations. But SB 2872 creates strong incentives for prosecutors to build their budgets by seizing assets. This kind of bounty hunting happens routinely in the "war against drugs"; under SB 2872, it could happen in pharmaceuticals, too, threatening California's industry and its leadership in research.

Options for medical care not explicitly approved by the FDA would be at even greater risk. California's existing laws against unorthodox treatment acknowledge no right of patients to make their own choices. Advertising that any kind of non-approved treatment has any effect on AIDS or ARC is illegal; the fact that the claim is true, and the person making it can prove it, is legally irrelevant.

Other laws allow astronomical fines for even minor violations. SB 2872 would provide incentives for prosecutions which could reduce accepted treatment for AIDS to little more than giving patients AZT until they die.

Until recently, U.S. law has minimized seizure of property as a way to fund prosecution. Historical examples show the danger of creating such monetary incentives for prosecution which otherwise would not need to occur. In the Middle Ages, witchcraft trials became prevalent only in countries which allowed seizure of property, which could be shared by religious authorities, civil authorities, and accusers. Generation of revenue -- not popular hysteria, as commonly assumed -- was the real engine of the witch-hunts. So much property was transferred in this way that after a century of the trials, one inquisitor lamented that there were "no more rich heretics," and therefore the future of his office was in doubt.

No one can guarantee a monopoly on truth. Law enforcement should compete for funding with other public priorities, not fund itself through seizures to expand prosecution without regard to real needs.

How to Be Heard

SB 2872 has already passed the California Senate. Legislators do not have time for the details, but want to look "tough on crime," and not be portrayed as supporting quack cures and other health fraud. Few people knew about SB 2872 until it was almost too late to affect it.

The last chance to address the substance of the bill may be next week, at hearings scheduled August 7 in the Assembly Committee on Public Safety. Comments must arrive by mail or fax before then, and should be addressed to:

Assembly Member John Burton Chair, Assembly Committee on Public Safety State Capitol -- Room 2179 Sacramento, CA 95814

Organizations can also send someone to testify in person at the hearing. Anyone planning to testify should call the Committee on Public Safety in advance.

It is a courtesy to also notify the legislator who introduced the bill of any opposition, so she can be prepared before the hearing. Send a copy of the letter to: Senator Marian Bergeson, Member, California State Legislature, State Capitol, Sacramento, CA 95814.

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