A House subcommittee yesterday voted 9 to 8 to cite Health, Education and Welfare Secretary Joseph A. Califano Jr. for contempt after he refused to turn over to the subcommittee subpoenaed material about drug manufacturers processing methods.
Califano cited a Justice Department opinion that he would be breaking the law if he turned over the material. The law, a section of the Food and Drug Act, forbids disclosure, except to a court of trade secrets on drug manufacturing methods and processes.
But Rep. John E. Moss (D-Calif.), chairman of a Commerce investigative subcommittee, said Califano was not legally bound by the attorney general's opinion and the law was not intended to prevent revealing manufacturing processes to Congress. The subcommittee is looking into charges that drug companies simply put trade names on drugs manufactured by generic drug firms, then sell them at higher prices.
The panel was closely divided on the issue of citing Califano for contempt. The contempt citation resolution passed by a single vote because Rep. Thomas A. Luken (D-Ohio), who appeared to want to vote against contempt, left an invalid proxy and could not be found in time to cast his vote.
The issue now goes to the full Commerce Committee, which is not expected to take it up until after the Labor Day recess ending Sept. 6. If the full committee votes contempt, the issue must then go to the House floor. If the House approves, the Justice Department would then prosecute the case, or, Moss said, under an old provision the House could prosecute it itself.
Moss said he felt "deeply" that "Congress must assert its right when challenged," otherwise congressional right would be so eroded by the executive "we would have no rights at all. We can't permit the executive department to determine what we investigate."
No Cabinet secretary has been held in contempt of Congress in recent times. The last such executive branch-legislative branch confrontation involved Moss' subcommitte in 1975 when it sought material relating to the Arab boycott of Israel from then secretary of commerce Rogers C. B. Morton. Morton was cited for contempt by the subcommittee then produced the material in question the day the full committee was to vote.
Several members of the subcommittee, particularly the Republicans, sought a way around the confrontation. Rep. Norman F. Lent (R-N.Y.) said there were other alternatives, such as Congress changing the law, or the subcommittee subpoenaing the drug companies for the material or Congress waiving its right to immunity from lawsuits to allow HEW to sue it and a court to decide the issue.
Rep. Doug Walgren (D-Pa.) said he was "very reluctant to rush to a congressional confrontation. The contempt power should be approached solely as a last resort. We should not shy away from suing the companies because of time."
Moss, who is leaving Congress at the end of this session, had said the other alternatives would take too much time if the investigation was to be completed by the end of this Congress.
Califano had turned over to Moss a list of "associated manufacturers," generic firms that manufacture drugs for brand name firms.
But Moss said the list was "precisely useless, a most gracious act without the slightest bit of substance." Moss said it was necessary to look at the formulation," Moss said see if there was any change made by the brand-name firms in the drugs they received from generic firm plants. "What's more relevant than to look at the formulation," Moss said during a committee break.
Brand-name firms put a "man in the plant" of generic firms, claiming that man oversees specializing of the process. "We are told by large pharmaceutical companies that justifies charging higher prices because there is a change in the material," Rep. Albert Gore Jr. (D-Tenn.) said, "we believe that is a ruse."
Ironically, in 1976, while Califano was in private law practice, he represented the subcommittee in a suit called Ashland Oil vs. the Federal Trade Commission, a suit which involved the right of the subcommittee to trade secret data gathered by the FTC. Califano won the case and the subcommittee got the information.