A tiny Washington-area firm that gained a virtual monopoly over a segment of the nation's soft contact lens industry frequently entertained two key officials of the Food and Drug Administration while the agency was making decisions that led to the company's success.
Company records show the two officials' being wined and dined from New York to San Francisco between 1974 and 1979, and one of the officials being repeatedly entertained at several race tracks.
The firm, Burton, Parsons & Co., of Seat of Pleasant, gained control of the manufacture and marketing of various cleansing and purifying solutions specified by the FDA for soft contact lenses. In 1974, Burton, Parsons had annual sales of only $5 million. By 1979 -- thanks largely to a series of FDA decisions -- its owners, members of the locally prominent Manfuso family, were able to sell Burton, Parsons to Alcon Laboratories of Fort Worth, a subsidiary of Nestle S.A. of Switzerland, for $110 million, according to industry estimates.
The two FDA employes, microbiologist Mary Bruch and ophthalmologist Dr. Arnauld Scafidi, are subjects of an FBI investigation under the direction of the U.S. attorney's office in Baltimore. The Department of Health and Human Services inspector general's office also has been investigating.
Today the House subcommitee on oversight and investigations will hold the first of two days of hearings into the relationships between the company and the two government employes. This marks its third hearing in 10 months on the soft lens controversy.
Burton, Parsons' products include such familiar soft lens as Boil N' Soak, a hot disinfectant, and cold disinfectants Normal and Flexsol. From 1974 until late 1978 -- the years when soft contact lens sales began booming -- almost all of the 13 new lenses approved by the FDA were labled for use only with a Burton Parsons solution.
Bruch and Scafidi are still employed by the FDA, but responsibility for soft lenses was transferred out of Bruch's section in 1978. Almost immediately, the FDA approved 15 new-product applications submitted by firms competing with Burton, Parsons. The applications for lenses and solutions had been gathering dust at the agency for as long as four years.
For Burton, Parsons, the most advantageous FDA decision came in 1978 when Bruch caused the agency to order off the market inexpensive salt tablets used by soft lens wearers to mix a homemade purifying solution. Lens wearers were forced to turn to a costlier prepared solution that Burton, Parsons alone had FDA approval to make and market.
Estimates of the cost to consumers of that decision range from tens of millions of dollars to as much as $200 million. The ban on salt tablet sales was flooded with angry letters from consumers.
A microbiologist in the FDA's Bureau of Drugs division of anti-infective drug products normally does not set agency policy. But according the FDA sources, when soft lens regulation was placed in her bureau in 1974, Bruch wrested decision-making from her superiors.
The industry treated Bruch as a celebrity, introducing her as "the first lady of contact lenses" at a 1977 convention of the American Academy of Ophthalmology. Various companies entertained and honored her. But an industry survey shows that while Bruch was in charge, only two competitors of Burton, Parsons got a product approved -- and only after Burton, Parsons had at least a three-year lead in the market.
According to former company executives and others in the industry, it was John A. (Tommy) Manfuso Jr. -- who ran the company along with his Brother and their father -- who most frequently dealt with Mary Bruch.
The Burton, Parsons expense records show that Tommy Manfuso and some top executives bought Bruch more than 50 meals at places ranging from Casesars Palace in Las Vegas and Brennans in New Orleans to Maison Blanche and L'Auberge Chez Francois in the Washington area. On Dec. 22, 1977, Robert Manfuso charged the company for a chartered plane to fly Bruch, to Philadelphia.
According to the records, which are in the subcommittee's possession, when Bruch traveled to Europe in the summer of 1977, she was joined by Joanne Marriott, a Burton, Parsons employe, who charged gifts and meals for Bruch to her expense account.
Tommy Manfuso is an owner of a stable of thoroughbreds called Four-brothers and records show that Bruch went with him and another Burton, Parsons employe to horse races at Bowie, Laurel and Pimlico. Various of her expenses, including meals and admission tickets, were charged to the company. The committee is expected to ask whether executives, possibly without her knowing it, made sure Bruch regularly was a winner.
Industry and investigative sources say that Bruch, a 50-year-old divorcee, apparently was flattered by the attention lavished on her by Burton, Parsons executives. One former Burton, Parsons executive reportedly has said he was ordered to "lean on her" and "to influence her," and described her as "Queen of the May."
Dr. Scafidi, the 44-year-old FDA ophthalmologist, was entertained more than 60 times from early 1975, when he joined the FDA, through 1979 by Burton, Parsons executive in Washington and elsewhere, according to records. Time and again, Scafidi, alone or with his wife and his whole family, was bought lunches, dinners and breakfasts by the company executives. They also apparently kept track of Scafidi's personal life, taking him and his wife out for dinner on their anniversary, buying a book for him at Easter, even paying $1 at Giant for a box of bran cereal.
In the early 1970s, Burton, Parsons "wasn't even a factor in the industry," according to an industry executive. But in 1974, when regulation of soft lenses switched to Bruch's department, the situation changed dramatically.
Under FDA rules at the time, lenses and accompanying solutions were approved as a package. Bausch & Lomb, the Rochester company that in 1971 became the first approved by the FDA to manufacture soft lenses, sold its lenses in a kit that included salt tablets. But in 1974, the FDA approved a new lens manufactured by San Diego-based Continuous Curve Inc. for use with Burton, Parson's preserved saline solution called Boil N' Soak.
From the beginning of her tensure, Bruch made no secret of her opposition to salt tablets. She reportedly was concerned that soft contact lens wearers might not use distilled water or might not heat the lenses properly, two key steps in purifying the lenses by the salt tablet process.
Bruch began in 1976 putting pressure on Bausch & Lomb to start offering a prepared solution, instead of salt tablets, with its lenses. At congressional hearings last July, evidence showed that Bausch & Lomb at first resisted, because the company was not impressed by the only solution approved by the FDA -- Burton, Parsons' Boil N' Soak.
In 1978, when Bausch & Lomb continued to resist Bruch's demands, the company was sent a letter over the signature of David Link, then the director of the Bureau of Medical Devices. The letter, which was actually written by Bruch, demanded "a schedule . . . for the immediate withdrawal of the salt tablets from the marketplace."
Link, now in private industry, said in a recent interview that he would not have signed the letter had he known then how weak the case was against salt tablets.
In 1979 scafidi, who only two years earlier had found minuscule eye problems among the 2 million users of salt tablets, reported to the National Registry of Drug-Induced Ocular Side Effects 196 such cases. Scafidi in 1980 gave congressional investigators a notebook containing cryptic references to the 196 case studies which he said he had accumulated over a three-year period. But it later turned out that the code number on the notebook showed that it had been manufactured only a few months earlier.
Scafidi then changed his story, claiming he had kept the studies, which covered only a few pages, in three separate notebooks, and had later consolidated them in the one notebook. But at the hearing last July, Scafidi refused to name any doctor who had supplied him with the 196 cases, saying the Privacy Act barred him from divulging the information.
Bruch and Scafidi have refused to comment. An attorney for Tommy Manfuso said his client would issue statement at today's House hearing.