Comsumers' Right to Know: Reagan Agencies Cancel Watch on Oil and Drug Companies

Major U.S. oil companies received more good news from the Reagan Administration when it decided to free them from the Department of Energy's Financial Reporting System (FRS)

Established in 1977, the system requires the nation's 27 largest oil and energy companies to disclose detailed information on their revenues, profits and investments. The reports have pointed up the noteworthy fact that in both 1977 and 1978 the companies paid taxes at an average rate of only 19 percent on U.S. income of S30 billion, because of various loopholes and tax breaks-primarily the foreign tax credit which allows them to deduct royalties they pay foreign producers.

The companies do not like to have to provide such information to the government, so they sued the DOE, contesting both the legality of the forms themselves, and the sharing of, FRS data with government antitrust officials. Unfortunately for the companies, the court battle reached a dead end in late March when the Supreme Court refused to hear an appeal of a lower court decision which ruled in the government's favor.

Not to worry, though. The Reagan Administration has wiped out all funding for FRS in fiscal 1982-a savings of 52.5 million, about what the Defense Department spends in seven minutes. The House of Representatives may attempt to restore the FRS money; however, approval by the Senate is another matter.

If the Financial Reporting System is scrapped. Congress may have no way remaining to monitor the oil industry. "The FRS is Congress' last window on the major oil companies," says an FRS staffer. Now the shutters are closing.

- Ronald Brownstein

U.S. drug manufacturers received a shot in the arm in late April when the Reagan Administration suspended regulations designed to help inform consumers of possible side effects of certain prescription drugs and to advise consumers of the most effective use of the drugs.

Announced last April by then-Health and Human Services Secretary Patricia Roberts Harris, the frozen regulations would have required drug manufacturers to provide leaflets to consumers who purchase any of 10 nominated drugs or classes of drugs. Planned to take effect in mid-1981 on an experimental basis, the regulations were aimed at increasing "the safety of the millions of Americans who rely on prescription drugs each year," Secretary Harris said last September. The drugs, or classes of drugs, for which the regulation would have applied, represent 120 million new prescriptions each year and 16 percent of all new prescriptions annually filled in the U.S.

The Reagan Administration decided to halt the regulations "to see if they were cost-effective and the best of the various alternatives to providing information," says William Grigg, press officer for the Food and Drug Administration. The agency has accepted industry estimates that leaflets would cost 18 cents per drug sale.