Loblaw, Inc. v. New York State Board of Pharmacy
Loblaw, Inc. v. New York State Board of Pharmacy
Opinion of the Court
This action, for declaratory judgment and an injunction, concerns whether Bayer Aspirin Tablets can be sold in New York State in plaintiff’s supermarkets, o;r whether they are required by the ‘ ‘ Pharmacy ’ ’ article of the Education Law (art. 137) to be dispensed only at pharmacies, drugstores or registered stores (Education Law, § 6805, subd. 1) by or under the immediate supervision of licensed pharmacists or druggists (id., § 6804, subd. 3, par. c). Excepted from these provisions are sales of “ proprietary medicines except those proprietary medicines which are poisonous, deleterious and/or habit forming ’ ’ (id., § 6816, subd. 2, par. c).
The decision of this appeal depends upon whether Bayer Aspirin Tablets are a proprietary medicine within the meaning of this exception to the application of the ‘ Pharmacy ’ ’ article of the Education Law. Coneededly aspirin is a drug, but at Special Term defendants disclaimed any contention that it is poisonous, deleterious or habit forming. Consequently no such issue as that can be resurrected upon this appeal (Grade Sq. Realty Corp. v. Choice Realty Corp., 305 N. Y. 271, 278; Lloyd v. R. S. M. Corp., 251 N. Y. 318, 320).
Aspirin as such is not a proprietary remedy. It is true that during the life of the Bayer patent which expired in 1917, Bayer Co., Inc. (predecessor of Sterling Drug, Inc.) manufactured all of the aspirin which was consumed in this country. It was sold in powdered form to other manufacturing druggists, during most of this period, who merchandised it in tablets under their own various trade names. After the patent expired Bayer Co., Inc., sought to establish a monopoly on sales under the trade name “ Aspirin ”, but was defeated in Bayer Co. v. United Drug Co. (272 F. 505) on the ground that Bayer Co., Inc., had allowed the name “ Aspirin ” to go into the public domain
The main inquiry on this appeal was thus posed by Justice Goldman in his dissenting opinion at the Appellate Division: “ Does this fact [that the patent has expired] standing alone make the sale of such a product by businesses other than registered pharmacists evil whereas for 17 years before, when protected by patent, the law sanctioned its distribution by sources other than druggists? If so, why? Surely, no reasonable answer would be that the limited definition of the word ‘ proprietary ’ requires it.” In Matter of Viemeister (179 N. Y. 235, 238) it was held that “ A statute entitled a health law must be a health law in fact as well as in name, and must not attempt in the name of the police power to effect a purpose having no adequate connection with the common good.” The public health will not be used as a pretext to aid one group in the community in the competitive race against another or to confer a monopoly in the sale of products (Defiance Milk Prods. Co. v. Du Mond, 309 N. Y. 537; Good Humor Corp. v. City of New York, 290 N. Y. 312; Trio Distr. Corp. v. City of Albany, 2 N Y 2d 690; Hauser v. North British & Mercantile Ins. Co., 206 N. Y. 455, 461—462).
No statutory definition is given of what constitutes a proprietary medicine. Two definitions have been formulated, the so-called “common usage” definition and the “technical” definition. The leading case in the country in which the common usage definition was applied is Wrigley’s Stores v. Board of Pharmacy (336 Mich. 583). Five requirements are there set forth to bring the sale of a drug within that definition, viz.: (1) a medicine in which a property right exists in the producer and which the public buys in reliance primarily on the producer or the proprietor and not the retailer, (2) the property right may be attributed to a patent, trade-mark, special formula or unique process for preparation, (3) distribution is in prepack
The “technical” definition is somewhat narrower, and requires, in addition, that there be secret processes of manufacture in order to come within the definition. Neither of these definitions requires that the medicine shall be patented. Appellant contends that Bayer Aspirin Tablets are within both of these definitions of what constitutes a proprietary medicine. The Appellate Division majority did not apply either of these definitions. Instead, it established its own criterion, which rejects the common usage definition and goes beyond the technical definition by denying the existence of a proprietary right without regard to the ownership of trade-marks or secret processes of manufacture if the “ basic and essential elements are known to, and freely used by the public” — i.e., the composition of the drug as described in the United States Pharmacopeia. Inasmuch as the active elements of all drugs of this nature are required by law to be made public, the holding of the Appellate Division is equivalent to a determination that no proprietary medicine can be recognized except patent medicines while the patents are outstanding. Appellant contends that the expiration of a patent changes neither the ingredients, methods of manufacture nor the sales procedures of prepackaged, nonprescription drugs under their brand names, without opportunity for inspection or analysis by the pharmacist, and that such goods are bought on the reputation of the manufacturer but not of the retailer regardless of whether the patent has expired (Old Dearborn Co. v. Seagram Corp., 299 U. S. 183; Bourjois Sales Corp. v. Dorfman, 273 N. Y. 167). The object of the statute as construed by appellant would be similar to that of subdivision 4 of section 96 of the Personal Property Law in regard to implied warranties of fitness which states that ‘1 In the case of a contract to sell or a sale of a specified article under its patent or other trade name, there is no implied warranty as to its fitness for any particular purpose ” (italics supplied). A legislative policy was thus enunciated that the rigor of the law of implied warranty is to be mitigated where the retailer has, in truth and in fact, assumed no real responsibility for the
There can be no doubt that Bayer Aspirin Tablets comply with the common usage definition of a proprietary medicine in the five respects which have been enumerated above. We consider that they likewise possess the characteristics of a proprietary medicine under the technical definition in that, although the active ingredients are all published in the United States Pharmacopeia, the inert elements and complicated processes of manufacture are trade secrets. These, the detailed facts concerning which appear in the record, unquestionably give to Bayer Aspirin Tablets certain individual qualities differing in some degrees from those possessed by other aspirin tablets. These trade secrets do affect, for better or worse, such items as the freedom from impurities and rate of taking effect of the tablets as well as their degree of effectiveness.
In deciding this appeal it is not necessary to state an all-inclusive definition of proprietary medicines. It is sufficient to note that here we are dealing with a drug which is not poisonous, deleterious or habit forming, sold without prescription under the brand name of the manufacturer on which the public chiefly relies in making purchases, in prepackaged form ready for use by the consumer with adequate directions for use and which has been prepared through the use of inert elements and secret processes of manufacture which affect its quality. The magnitude of the investment by Bayer Co., Inc., and its successor
The Minnesota court added: “But, because it was deemed either impracticable or unnecessary to regulate the sale of patent or proprietary medicines, of the acts of nearly 30 states or territories regulating the practice of pharmacy (all so nearly alike as to suggest a common source) which we have examined, every one, unless ours be an exception, expressly excepts the sale of patent or proprietary medicines from its operation. ’ ’
The Legislature has undoubted power to regulate the manufacture or sale of drugs, including proprietary medicines, in respects which are related to the public health (State Bd. of Pharmacy v. Matthews, 197 N. Y. 353). Bayer Aspirin Tablets are manufactured under the Federal Food, Drug and Cosmetic Act, under which they are characterized as over the counter, nonprescription drugs. Manufacturers are obliged to comply with all of the requirements of that law for such drugs (U. S. Code, tit. 21, § 353, subd. [b]). State Bd. of Pharmacy v. Matthews (supra), in holding that the Legislature was empowered to regulate the manufacture and sale of drugs generally, decided a different question from whether constitutional law required proprietary medicines to be excepted from sales regulations of this nature, a question on which we do not pass, but which was held to be the case in State v. Childs (32 Ariz. 222);
An affidavit interposed by the Education Commissioner of New York State avers that without the economic advantage of having a monopoly on sales of drugs of this nature in pharmacies and drugstores, recruitment of students of pharmacy would suffer for lack of financial rewards in view of the long training required of them. This is not a factor related to the public health, and does not bear upon the construction of the statute concerning what is a proprietary remedy. The other reason assigned by the Education Commissioner for confining such sales to drugstores and pharmacies is that purchasing aspirin there has a psychological effect on customers who might 6 ‘ lose the respect for the potential of drugs ” if aspirin were bought in supermarkets. Concerning this Special Term commented correctly that it is common knowledge that most drugstores are engaged in a wide field of merchandising having no connection with drugs, and that no professional judgment or discrimination is required or used in making sales of Bayer Aspirin Tablets. The opinion at Special Term added that such aspirin tablets are sold to a great extent even in drugstores on a self-service basis, and that the Legislature was not to be deemed to have intended to confer a monopoly upon them on economic grounds in the retail sales of prepackaged medicines sold without prescription.
We believe the purpose of the Legislature in enacting this exception of proprietary medicines to have been to exempt pharmacists from the responsibilities otherwise imposed upon them by the language of the article in case of prepackaged, nonprescription drugs (not poisonous, deleterious or habit forming) prepared under Federal or State law by responsible manufacturers and sold under their brand names without opportunity for inspection or analysis by the pharmacist.
The judgment appealed from should be reversed, and the judgment at Special Term reinstated, with costs in this court and in the Appellate Division.
Chief Judge Desmond and Judges Dye, Fuld,. Feoessel, Burke and Foster concur.
Judgment reversed, etc.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.