DRUGS: Storm over Sunshine D

The antitrust division of the Justice Department has eyed the $200,000,000-a-year vitamin business coldly for months. Trustbuster Wendell Berge has focused his eyes on the scholarly, highly respectable Wisconsin Alumni Research Foundation. Through a handful of patents, the foundation exercises a schoolmaster’s knuckle-whacking control over the industrial giants who turn out some $60,000,000 in synthetic vitamin D (the “sunshine vitamin”) and related products every year.

High Prices. In Chicago’s district court, antitrust intervened in a patent-infringement suit brought by the foundation. Last week antitrust charged that the foundation has conspired with 16 companies, including Standard Brands Inc., E. I. du Pont de Nemours & Co., Pet Milk Co., Parke, Davis & Co., to suppress competition in the manufacture & sale of vitamin D. They also, said antitrust, limited the potency of vitamin D used in the widely advertised “enriched” bread, milk and other foods, thus preventing such foods from competing with the regular vitamin-D products.

Further, charged antitrust, the foundation has maintained “unreasonable” prices so that those most in need of vitamin D have been unable to afford it. Berge’s example: the cost of making vitamin D that sells for from $3.35 to $10.80 is 15¢. Berge asked the court to invalidate the foundation’s vitamin patents, and open the richly profitable field to all comers, thus bring prices tumbling down.

High Ethics. Actually the foundation was started to avoid these very evils. After University of Wisconsin’s famed biochemist, Dr. Harry Steenbock, made his vitamin discovery,* he wanted to avoid “unscrupulous commercialization” of his find. He decided to let the university make the money, use it for research.

Nine alumni started the foundation in 1925, which has no direct connection with the university. Each put in $100. They picked as president a crack patent lawyer, Chicago’s grey-maned, hard-bitten George Haight. Since then, Haight has decided which companies will be licensed to use the Steenbock patents (each pays royalties, averaging 10% and less); how they shall advertise their vitamin products; what fields each could take. Example: Standard Brands could irradiate yeast, but nothing else. In all, the foundation has piled up a fund of $9,000,000. which eventually will go to the university. So far, the university has received $2,500,000. Estimated income this year: $1,600,000. Of this, Dr. Steenbock will collect his usual salary of $12,000, Haight nothing. (None of the foundation’s founders, or subsequent members, has ever been paid anything.)

Only once has the foundation’s rule over vitamin D come close to being broken. Year ago, California’s southern district court held that the Steenbock patents were invalid because ultraviolet radiation was a nonpatentable “process of nature.” The foundation demanded a rehearing; two months ago, the court withdrew its earlier opinion. (Recently the foundation slashed its royalty charges.)

Hot Talk. President Haight candidly admits that the foundation does exercise this tight control. His reason: it is the only way the public can be protected against fraud. Said he hotly: “We’re not crooks. We could have been crooks without much trouble. . . . Guys came to us who wanted to put vitamin D in pop with our process. One fellow wanted to use it to grow hair. But you can’t use it in everything and you can’t cure flat feet with vitamin D. If we had been dishonest, we could have made three or four million dollars in a couple of years and told everybody to go to hell. But we licensed only companies we thought were all right. I don’t know of a cussed thing we have done that could be criticized under antitrust or any other laws.”

* Dr. Steenbock knew that alfalfa cured in the sun had more of what was later called vitamin D than hay cured out of sunlight. He also knew that certain food products contained “pro-vitamins” whichcould be “activated” by the sun’s ultraviolet rays, thus increasing the amount of ricket-curing vitamin D. His basic patent was based on his idea of activating pro-vitamins by irradiating them with artificial ultraviolet lightsuch as a quartz mercury vapor lamp produces.