Amicus Curiae Brief — Weinberger v. Hynson, Westcott & Dunning, Inc.

Supreme Court brief1973

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INDEX

MOTION FOR LEAVE TO FILE BRIEF ....................

INTEREST OF AMICUS CURIAE ©

INTRODUCTION AND SUMMARY OF ARGU-

Pen acg estes senses ates esiadee eek

ARGUMENT

II.

) Ill.

A Manufacturer Is Entitled to a Hearing on

any Genuine Issue of Material Fact Before

Withdrawal of Approval of a New Drug Appli-

ee a ee ee eee

Under the Food, Drug, and Cosmetic Act, the

Courts Have Exclusive Jurisdiction, in En-

forcement and Declaratory Judgment Actions, to

Determine Whether a Product is a “New Drug’’..

The Fourth Circuit Improperly Denied “Grand-

father” Protection Under Section 107(c) (4)

of the 1962 Drug Amendments to Products

Which Were Neither ‘““New” nor Covered by an

Effective New Drug Application on the Day Be-

fore the Enactment Date of the Amendments....

A. The Grandfather Clause Must Be Construed

in Light of Congress’ Basic Intention to

Apply the Effectiveness Requirement Only

to New Products and New Claims for Old

DUNES cccispectsh ects Ee ee ie ee

B. The Construction Urged by the Government

Would Render Section 107(c) (4) Meaning-

|. | etanela RIA RE on ae eee BOAT T E nan, PREM emirate:

C. The Fourth Circuit Erred in Relying upon

the “Surplusage” Argument _......000....0020....

colgp t SSS! (0) 5 Eetneteamnatee ein nsnaie tenet bane nmair ncaa yarn Sears ane

CITATIONS

CASES: Page

Abbott Laboratories v. Gardner, 387 U.S. 136

(1967) 2, 30

Adickes v. S. H. Kress & Co., 398 U.S. 144 (1970).. 13

American Home Prods. Corp. v. Finch, 303 F.

Supp. 448 (D. Del. 1969) 16

American Public Health Ass’n v. Veneman, 349

F. Sapp. 1SEE 69D. TOT2) nccnccsn eccrine 25

AMP, Inc. Vv. Gardner, 389 F.2d 825 (2d Cir.),

cert. denied, 393 U.S. 825 (1968) -.................. 30, 31, 32

Bell v. Burson, 402 U.S. 535 (1971) -...............-.-. 10

Bell v. Goddard, 366 F.2d 177 (7th Cir. 1966) -.... 13

Boddie v. Connecticut, 401 U.S. 371 (1971) -........ 10

Boston & M.R.R. v. United States, 162 F. Supp.

289 (D. Mass.), appeal dismissed, 358 U.S. 68

CT cries 35

Cameron v. Vancouver Plywood Corp., 266 F.2d

CG COU Oe TOY cesses 13

Ciba-Geigy Corp. Vv. Richardson, 446 F.2d 466 (2d

51 ae Lf & 5 earn en ve 16

Clayton v. James B. Clow & Se 154 F. Supp.

108 (N.D. Ill. 1957) 2-02-22 12

Dyestuffs & Chemicals, Inc. v. Flemming, 271 F.2d

281 (8th Cir. 1959), cert. denied, 362 U.S. 911

CY cn a cacao trey epee ere eeeeeeevey ee 11

Durovic v. Richardson, 327 F. Supp. 386 (N.D.

} || Fae C7 5 nnn ee 30, 31

Flemming v. Florida Citrus Exchange, 358 U.S.

153 (1958) .....-......---.....- 1l

FPC v. Louisiana Power & Light Co., 406 U.S.

yA Me 6 Lf {2 ae ae eee ea ea nee 39

FPC v. Texaco, Inc., 377 U.S. 33 (1964) -............... 11, 20

Frozen Food Express v. United States, 351 U.S. 40

51, ) ae ae ee ne Pen NPs eer 36

Goldberg v. Kelly, 397 U.S. 254 (1970) ..............-.. 10, 24

Greene V. McElroy, 360 U.S. 474 (1959) ..........--.... 10

Ill

CITATIONS—Continued

Hornsby v. Allen, 326 F.2d 605 (5th Cir. 1964)...

Hynson, Westcott & Dunning, Inc. v. Finch (D.

Md., Civ. No. 21112, Sept. 16, 1970) ...................

ICC v. Louisville & Nashville R. Co., 227 U.S. 88

(1918) .

In re Winship, 397 U.S. 358 (1970)

International Harvester Co. v. Ruckelshaus (D.C.

Cir. No. 72-1517, Feb. 10, 1973) —...........20022.....

Kelly v. Wyman, 294 F. Supp. 893 (S.D.N.Y.

1968)

Koepke v. Fontecchio, 177 F.2d 125 (9th Cir.

1949) _.

Lemmon Pharmacal Co. v. Richardson, 319 F.

Supp. 375 (E.D. Pa. 1970) _.......... 7

Marine Engineers Beneficial Ass’n v. Interlake

S.S. Co., 370 U.S. 173 (1962)

Merritt Corp. v. Folsom, 165 F. Supp. 418 (D.D.C.

1958)

Morgan V. United States, 304 U.S. 1 (1938) -..........

Myers Vv. Bethlehem Shipbuilding Corp., 303 U.S.

41 (1988) _..................

NLRB Vv. Bata Shoe Co., 377 F.2d 821 (4th Cir.),

cert. denied, 389 U.S. 917 (1967) -

NLRB v. Smith Industries, Inc., 403 F.2d 889 (5th

Cir. 1968)

Oklahoma Press Publishing Co. v. Walling, 327

U.S. 186 (1946)

Pharmaceutical Mfrs. Ass’n V. Gardner, 381 F.2d

271 (D.C. Cir. 1967)

Pharmaceutical Mfrs. Ass’n V. Richardson, 318 F.

Supp. 301 (D. Del. 1970) 2, 16,

Philadelphia Co. v. SEC, 175 F.2d 808 (D.C. Cir.

1948), vacated as moot, 387 U.S. 901 (1949) ....

Red Lion Broadcasting Co. v. FCC, 395 U.S. 367

6.) eee a ee ee

Ricci v. Chicago Mercantile Exchange, 93 S. Ct. 573

CDOTS ) oo vcnscsntncecnte cepa cecsntinsnenssicasioenensnasadcsiescsanesiecestensenst

30, 31

18, 19

CITATIONS—Continued

Rosado v. Wyman, 397 U.S. 397 (1970) ..........-......

Silver v. New York Stock Exchange, 373 U.S. 341

CL) ee een ee

Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S.

OT CGY, aio cciscee cisternae nes

Tara Industries, Inc. v. Finch, CCH Food, Drug

& Cosm. L. Rptr. 7 40,816 (D.D.C. 1970) ..........

Toebelman vV. Missouri-Kansas Pipe Line Co., 130

F.2d 1016 (3rd Cir. 1942) 00.

Turkel v. FDA, 334 F.2d 844 (6th Cir. 1964), cert.

denied, 379 U.S. 990 (1965) 2.22002.

Ubiotica Corp. Vv. FDA, 427 F.2d 376 (6th Cir.

by) ) ec er ae rer eee

United States v. Allan Drug Corp., 357 F.2d 713

(10th Cir.), cert. denied, 385 U.S. 899 (1966) ..

United States v. Article of Drug .. . Bentex

Uleerine, 469 F.2d 875 (5th Cir. 1972) _...........

United States v. Article of Drug ... Excedrin PM,

CCH Food, Drug & Cosm. L. Rptr. { 40,486

(E.D.N.Y. No. 70-C-77, March 5, 1971)..............

United States v. Article of Drug ... Furestrol, 415

. F.2d 390 (5th Cir. 1969) (per curiam) ......... 31, 32, 33

United States v. Article of Drug ... Line Away,

284 F. Supp. 107 (D. Del. 1968), aff’d on other

grounds, 415 F.2d 369 (3d Cir. 1969) —.............. 31, 33

United States v. Article of Drug . . . Magic Secret,

331 F. Supp. 912 (D. Md. 1971) _.........---------.. 31

United States v. Articles of Drug . . . Quick O-Ver,

274 F. Supp. 443 (D. Md. 1967) ....................... 31, 33, 40

United States v. Article of Drug . . . Quinaglute,

268 F. Supp. 245 (E.D. Mo. 1967) _........................ 31

United States v. Article of Drug . . . Sudden

Change, 409 F.2d 734 (2d Cir. 1969) ................. 31

United States v. Diebold, Inc., 369 U.S. 654

6 en 13

United States v. 41 Cases ... Myconox & Ferro-

Lac, 420 F.2d 1126 (5th Cir. 1970) .......22.000.20...... 31

CITATIONS—Continued

Page

United States v. Lanpar Co., 293 F. Supp. 147

ADD. TOR: 1968 ) icici eee 32

United States v. Seven Cartons .. . Ferro-Lac, 424

F.2d 1864 (7th Cir. 1970) 2.000022 31

United States v. Storer Broadcasting Co., 351 U.S.

192 (1956) eigseeieanseanesvidaneeteee eee 11, 20

United States v. 354 Bulk Cartons ... Trim Re-

ducing-Aid Cigarettes, 178 F. Supp. 847 (D.N.J.

LS) oe ene 31, 32

Upjohn Co. Vv. Finch, 422 F.2d 944 (6th Cir.

1970) _......... peed ecincwa pes eter pee cenweswedeny peevavreeoneesees 16

Upjohn Co. Vv. Finch, 303 F. Supp. 241 (W.D.

Mich. 1969) 2222000022220 eee eee 16

’ USV Pharmaceutical Corp. v. Secretary of Health,

Education & Welfare, 466 F.2d 455 (D.C) Cir.

DOTY, oceanic Na .. 14, 16

STATUTES AND REGULATIONS:

Administrative Procedure Act, 5 U.S.C. § 551

et seq.:

Section 5(d), 5 U.S.C. § 554(d) —..- 14

Section 5(e), 5 U.S.C. §554(e) 0. 34, 35, 36

Section 10(e), 5 U.S.C. § 706(2)(E) —.......... 24

Declaratory Judgment Act, 28 U.S.C. §§ 2201-02.. 36

Drug Amendments of 1962, P.L. 87-781, 76 Stat.

780 et seq.:

oe ie 72 en 29

oat Uae LG Coo 8 04 een ne on re 42

Section 107(c) (3) —................. 8, 41, 42, 47, 51, 52, 53

Section 107(c) (4) ~........... 3, 7, 8, 9, 41, 42, 43, 44, 45,

47, 48, 49, 50, 51, 52, 53

ba TALE

LETRA RTI ORE A Pee T ee NT I

A TS RS HRY BE METIEN ye

ICE eg Se Oe ee

LATIN iG PN PA 6 Ce ACPI Wen bs hy

CITATIONS—Continued "\

Page

Fair Labor Standards Act, 29 U.S.C. §§ 209, 211 39

‘Federal Food, Drug, and Cosmetic Act of 1938,

52 Stat. 1040, et seq.:

Section 201(p), 52 Stat. 1041-42... 3, 28, 41, 42, 49

Section 505, 52 Stat. 1052-53 ....2, 3, 42, 43, 48, 49, 50

Federal Food, Drug, and Cosmetic Act of 1938, as

amended by P.L. 87-781, 76 Stat. 780, 21 U.S.C.

§ 301, et seq.:

Section 201(p), 21 U.S.C. §321(p) ...3, 5, 26, 29, 34,

42, 44, 45, 49

Section 301(d), 21 U.S.C. § 331(d) ........... 2, 5, 28, 29

Sections 302-04, 21 U.S.C. §§ 332-34 .............. 28, 29

Section 401, 21 U.S.C. § 341 —0000000 0... 29

Section 403(j), 21 U.S.C. § 848(j) 000... 29

Section 502(a), 21 U.S.C. § 852(a) ................ 45

Section 502(n), 21 U.S.C. § 852(n) ................ 29

Section 505(a), 21 U.S.C. § 355(a) ....2, 5, 28, 29, 41

Section 505(d), 21 U.S.C. § 355(d) .........2, 19, 38, 42

Section 505(e), 21 U.S.C. § 355(e) ....2, 3, 10, 11, 12,

Section 505(h), 21 U.S.C. § 855(h) —.....000..... 37

Section 507(f), 21 U.S.C. § 357(f) 0... 10, 11, 16

Section 507(h), 21 U.S.C. §357(h) —.............. 33

Section 701(e), 21 U.S.C. §371(e) —............ _ 10,11

Section 702, 21 U.S.C. § 372 ..........0000000000000..-... 29

Food and Drug Act of 1906, 34 Stat. 768 ~............. 28

National Labor Relations Act, Section 10(a), as

amended, 29 U.S.C. § 160(a) ~-.......220000000ee. 38

Federal Rules of Civil Procedure, Rule 56 ........ 15, 18, 24

21 C.F.R. § 180.12 2222.22 cccee cece ee eee eee ence ence 19

AT Oe Oa | ne 9, 15, 16

21 C.F.R. § 180.17 .......0....2ccceccecstcscceesscccesncecenceesncees 14

SOR A, |): en ean eee 30

ans

VII

CITATIONS—Continued

Page

LEGISLATIVE MATERIALS:

108 Conc. REC. 10108 (1962) 0.02 20

108 Conc. REC. 10278 (1962) —......222222ee een 46

108 Conc. REC. 15696 (1962) ......2 ee. 47, 48

108 CONG. REC. 17366 (1962) 00 20, 47

108 CoNnG. REC. 220389 (1962) _..0022 eee 11

108 CoNG. REC. 22045 (1962) 0.0.22... eee 46

Hearings on Present Status of Competition in the

Pharmaceutical Industry Before the Subcom-

mittee on Monopoly of the Senate Select Com-

mittee on Small Business, 92d Cong., 2d Sess.,

Be Be SG ie vce cetersns ts sees cncteeresteteesncten sens 44

H.R.Rep. No. 2526, 87th Cong., 2d Sess. (1962)... 48

S. 1552, 87th Cong., 2d Sess. (1962) 0.0.0.0. 45

S. Rep. No. 1744, 87th Cong., 2d Sess, (1962)....... 19, 20,

46, 47

MISCELLANEOUS:

Administrative Conference of the U.S., Recom-

mendation No. 20 (adopted June 1970) ............. 14

Affidavit of John G. Adams, Ph.D., attached to

Supplemental Memorandum in Support of Mo-

tion of Pharmaceutical Manufacturers Associ-

ation for Leave to Intervene, American Public

Health Ass’n v. Veneman, Civ. No. 1847-70

(D.D.C., filed Oct. 5, 1972) 20002... eeeeeeeeeeeeeeeeeee 25

Attorney General’s Manual on the Administrative

Procedure Act (1947) -20...22...220.22::ccc0:cceeeeeeeeeeeee 35, 36

CHRISTOPHER, CASES & MATERIALS ON Foop &

DRUG LAW 461 (1966) _-..-2...22222222222.2eeee cece ee eee eeeeee 40

K. Davis, ADMINISTRATIVE LAW (Supp. 1970) ..... 10, 11

35 Fed. Reg. 7251 (1970) ...0.-2222.0cceceeeeeeeeeeeeeeeeeeeeee 15

38 Fed. Reg. 6305 (1978) .....0.....22..---22.ceeeeeeeeeeeeeeeeeeee 23

Gellhorn & Robinson, Summary Judgment in Ad-

ministrative Adjudication, 84 Harv. L. REv.

pa 6 |) aoe enna eee Oe 14

Te et oe oc

VIII

“ee.

CITATIONS—Continued

Page

Hagan, Grandfather Protection Under the Drug

Amendments of 1962, 19 FooD DruG COSMETIC

Rs RE EMD wicneinetitiantsteiiermsne 44

Letter from C. Joseph Stetler, President, Pharma-

ceutical Manufacturers Association, to Charles

C. Edwards, M.D., Commissioner of Food and

Drugs, dated June 3, 1970, attached as Exhibit 5

to the Complaint in Pharmaceutical Mfrs. Ass’n

v. Richardson, Civ. No. 3946 (D. Del., filed July

Ry I aescaeconcniintteninneiiebsaicidichcenstnnniinnsinkennesiiisaininin 17

Letter from Charles C. Edwards, M.D., Commis-

sioner of Food and Drugs, to C. Joseph Stetler,

President, Pharmaceutical Manufacturers As-

sociation, dated July 8, 1970, attached as Exhibit

6 to the Complaint in Pharmaceutical Mfrs.

Ass’n V. Richardson, Civ. No. 3946 (D. Del., filed

FUR Tile. SOO) pickcsresteriseecissiesmmaeemnmncinsinss 17, 18

J. MOORE, FEDERAL PRACTICE (2d ed. 1972) ....11, 12, 18,

21, 24

Transcript of Argument, Pharmaceutical Mfrs.

Ass’n V. Richardson, Civ. No. 3946 (D. Del. Oct.

IN THE

Supreme Court of the United States

OCTOBER TERM, 1972

Nos. 72-394, 72-414, 72-528, 72-555, 72-666

CASPER W. WEINBERGER, SECRETARY OF HEALTH, EDUCA-

TION, AND WELFARE, AND CHARLES C. EDWARDS, CoM-

MISSIONER OF FOOD AND DRUGS,

. Petitioners,

HYNSON, WESTCOTT & DUNNING, INC.,

Respondent.

On Writ of Certiorari to the United States Court

of Appeals for the Fourth Circuit

AND CONSOLIDATED CASES

MOTION FOR LEAVE TO FILE BRIEF FOR

PHARMACEUTICAL MANUFACTURERS ASSOCIATION

AS AMICUS CURIAE

Pursuant to Rule 42 of the Rules of this Court, the

Pharmaceutical Manufacturers Association (PMA) here-

by moves this Court for leave to file a single brief as

amicus curiae in the above-captioned consolidated cases.

The Solicitor General and counsel for Ciba Corporation,

Bentex Pharmaceuticals, Inc. and USV Pharmaceutical

Corporation have all consented to the filing of the at-

tached brief at the time respondents’ briefs are due.

4 x

Copies of the letters of these counsel consenting to the

filing of this brief have been filed with the Clerk of the

Court. The consent of counsel for Hynson, Westcott &

Dunning, Inc., respondent in No. 72-394 and petitioner

in No. 72-414, was requested but refused on the ground

that PMA intended to take a position inconsistent with

that of Hynson, Westcott & Dunning in No. 72-414.

Hynson, Westcott & Dunning will in no way be preju-

diced by the filing of PMA’s brief at this time, however,

since it will have an opportunity to file a reply brief in

No. 72-414.

The interest of PMA as amicus curiae is set forth at

pages 1-2 of the attached brief.

Respectfully submitted,

LLOYD N. CUTLER

DANIEL MARCUS ‘

900 - 17th Street, N.W.

Washington, D. C. 20006

Attorneys for Pharmaceutical

Manufacturers Association,

Amicus Curiae

April 2, 1973

IN THE

Supreme Court of the United States

OCTOBER TERM, 1972

Nos. 72-394, 72-414, 72-528, 72-555, 72-666

CASPER W. WEINBERGER, SECRETARY OF HEALTH, EDUCA-

TION, AND WELFARE, AND CHARLES C. EDWARDS, CoM-

MISSIONER OF FOOD AND DRUGS,

Petitioners,

Vv.

HYNSON, WESTCOTT & DUNNING, INC.,

Respondent.

On Writ of Certiorari to the United States Court

of Appeals for the Fourth Circuit

AND CONSOLIDATED CASES

BRIEF FOR PHARMACEUTICAL MANUFACTURERS

ASSOCIATION AS AMICUS CURIAE

INTEREST OF AMICUS CURIAE

The Pharmaceutical Manufacturers Association (PMA)

is a voluntary, nonprofit membership association com-

[eee

PLL, FLL AL OREO I 7 PAM Se NLL tee

posed of more than 100 companies which account for

approximately 95% of the production of prescription and

ethically promoted over-the-counter drugs in the United

States. PMA has often represented the interests of its

member companies in both administrative and judicial

proceedings.’

The cases now before this Court raise important issues

about the correct construction and application of the pro-

visions of the Federal Food, Drug, and Cosmetic Act

dealing with “new drugs.” PMA’s member companies

have a direct and vital interest in the resolution of

those issues. PMA believes that it can assist the Court

by presenting in a single amicus brief the views of the

nation’s manuufacturers of prescription and ethically

promoted over-the-counter drugs on the complex and im-

portant issues at stake in these cases.

INTRODUCTION AND SUMMARY OF ARGUMENT

The issues presented by the cases now before this Court

concern the provisions of the Federal Food, Drug, and

Cosmetic Act dealing with “new drugs.” Under the stat-

ute, it is illegal to market a “new drug” without approval

of a new drug application (NDA) by the Food and

Drug Administration (FDA). Sections 301(d), 505(a),

21 U.S.C. §§331(d), 355(a). From 1938 until 1962,

this required a showing that the drug was safe for its

recommended uses. Section 505, 52 Stat. 1052 (1938).

Since 1962, the Act has required an additional showing

of efficacy, based on a statutorily defired standard of

“substantial evidence of effectiveness.” Sections 505(d)

and (e), 21 U.S.C. §§ 355(d) and (e). ‘

1 See, e.g., Abbott Laboratories v. Gardner, 387 U.S. 186, 156-

57 n.20 (1967); Pharmaceutical Mfrs. Ass'n v. Gardner, 381 F.2d

271 (D.C. Cir. 1967); Pharmaceutical Mfrs. Ass’n v. Richardson,

318 F. Supp. 301 (D. Del. 1970).

However, under the statute not all drugs are “new

drugs.” From 1938 until 1962 a “new drug” was defined

as one that was “not generally recognized as safe” by

qualified experts. Section 201(p), 52 Stat. 1041 (1938).

Since 1962, a “new drug” has been defined as one “not gen-

erally recognized as safe and effective” by qualified ex-

perts. Section 201(p), 21 U.S.C. §321(p). Moreover,

when Congress in 1962 amended both the “new drug”

definition and Section 505 of the Act to include a new

efficacy requirement, it enacted a “grandfather” provi-

sion permanently exempting certain products then on the

market from the amendments to the “new drug” defi- .

nition. 76 Stat. 788-89, note following 21 U.S.C. § 321.

Thus, the basic scheme created by the statute carefully

distinguishes between “new drugs” and drugs that are

not “new”—the latter being often referred to as “old”

drugs. The cases now before this Court reflect the ef-

forts of the FDA to transfer from the courts to the

agency authority to determine whether a product is a

“new drug,” to sweep virtually all products into the “new

drug” category, and to dispense with hearing rights in

connection with proceedings to withdraw approval of new

drug applications. As we will show in this brief, these

efforts by the FDA are flatly inconsistent with the stat-

ute and are unnecessary to assure its effective implemen-

tation.

The question of the FDA’s authority to withdraw ap-

proval of a new drug application for lack of substantial

evidence of effectiveness without providing a hearing on

disputed, material issues of fact is presented in Wein-

berger v. Hynson, Westcott & Dunning, Inc., No. 72-

397. Section 505(e) of the statute, governing proceed-

ings to withdraw approval of NDA’s, provides the affect-

ed manufacturer a right to a hearing. A hearing, there-

fore, must be held whenever there is a genuine dispute

as to material facts—i.e., in this context, whenever a

manufacturer sufficiently alleges facts which, if true,

would support a finding of substantial evidence of effec-

tiveness for the product in question. Where such a fac-

tual dispute exists, the Commissioner of Food and Drugs

may not resolve that dispute before the hearing and in-

voke his resolution of the issue as his reason for denying

a hearing. Moreover, under well-established principles of

summary judgment procedure, the burden of establish-

ing the lack of a material factual dispute is clearly on

the Commissioner, as the party moving for summary

judgment.

The FDA’s hearing regulations purport to embody

judicial summary judgment principles, and have been

upheld by the courts only on that basis. The Fourth

Circuit correctly set forth and applied those principles

in its Hynson, Westcott & Dunning decision. In argu-

ing that that decision was incorrect, the Government has

blurred the distinction between the test for determining

the issue of substantial evidence of effectiveness on the

merits at a hearing and the test for determining whether

the Commissioner is entitled to award himself summary

judgment on that issue without a hearing. In so argu-

ing, the Government has demonstrated that, despite the

language of its regulations, the FDA’s continued in-

tention is to decide disputed questions as to the exist-

ence of substantial evidence of effectiveness in advance

of a hearing and, on the basis of such findings, to deter-

mine that no hearing is necessary. Under such a regime,

the right to a hearing guaranteed by the statute would be

effectively, and illegally, obliterated.

II.

On the second major issue presented by these cases—

whether the FDA has authority to make binding deter-

minations whether a product is a “new drug”’—there

is a conflict between the circuits. In Ciba Corporation v.

Weinberger, No. 72-528, the Third Circuit affirmed the

district court’s refusal to issue a declaratory judgment

on the “new drug” status of a product on the ground

that the issue had been decided by the FDA, sub silentio,

in a proceeding to withdraw approval of the NDA for

the product. In Weinberger v. Bentex Pharmaceuticals,

Inc., No. 72-555, the Fourth Circuit reached the oppo-

site result, holding that it was improper for a district

court to defer to the FDA’s judgment on the “new drug”

question, since the FDA had no authority under the

statute to make such determinations. The Fourth Cir-

cuit followed its Bentex decision on the same issue in

Hynson, Westcott & Dunning, Inc. v. Weinberger, No.

72-414, and in USV Pharmaceutical Corp. v. Weinberger,

No. 72-666.

This conflict between the circuits should be resolved

in favor of the carefully reasoned opinion of the Fourth

Circuit in Bentex. The Food, Drug, and Cosmetic Act

itself defines the term “new drug” (Section 201(p)),

and makes it a prohibited act to market a “new drug”

without a new drug application approved by the FDA.

Sections 301(d), 505(a). But nowhere in the statute is

the FDA given any authority to determine whether a

product is a “new drug”; its only authority under the

new drug provisions (Section 505) of the statute is to

approve or disapprove a new drug application.

This does not make for an irrational or ineffective leg-

islative scheme. A manufacturer who markets a product

without an approved NDA in the face of the FDA’s

opinion that the product is “new” does so at his own

risk—the very serious risk under Title III of the Act of

seizure of the product or an action seeking an injunction

against its marketing or even criminal penalties. This is

consistent with the general scheme of the statute—re-

flected in the basic adulteration and misbranding provi-

sions—under which standards of conduct are set forth

in the statute itself, with violations of those standards

determined in judicial enforcement actions brought by

the Government at the behest of the FDA.

Moreover, there is no basis for any suggestion that reso-

lution of the “new drug” issue by the courts in declara-

tory judgment and enforcement actions is either novel or

unduly difficult and burdensome. The fact is that the

courts have been resolving these issues for many years

without any perceptible difficulty or burden. In arguing

that the question whether a product is a “new drug’’ is

unduly complex and: technical for a court, the Govern-

ment ignores the critical distinction between that ques-

tion and the question resolved by the FDA in determining

whether or not to grant or continue approval of a new

drug application. The test for approval of an NDA is

actual safety and effectiveness, and requires a careful

analysis of all relevant scientific evidence, including clini-

cal tests. The question whether the product is a “new

drug,” by contrast, turns on whether the product is gen-

erally recognized as safe and effective. The latter issue

has lent itself well to judicial determination.

The Government’s bootstrap efforts to imply FDA au-

thority to resolve the “new drug” issue in the course of

passing on NDAs or, in other contexts, by issuing dec-

laratory orders, founder on the simple and inescapable

fact that the statutory scheme created by Congress de-

liberately allocates to the courts the decision whether a

product is a “new drug.”’ In the last analysis, the Gov-

ernment is seeking no less than an amendment of the

basic structure of the statute—a result that it should

not be permitted to achieve by litigation.

III.

When Congress enacted the 1962 Drug Amendments

to require that “new drugs” be shown to be effective as

well as safe, it also enacted a “grandfather” clause per-

manently exempting from the new effectiveness require-

ment certain products already on the market, so long as

they continued to be recommended for the same uses. Sec-

tion 107(c) (4) of the 1962 Amendments permanently 4

exempts any such product that “on the day immediately 4

preceding the enactment date (A) was commercially used ‘

or sold in the United States, (B) was not a new drug as

defined by section 201(p) of the basic Act as then in

force, and (C) was not covered by an effective applica- E

tion under section 505 of that Act.” 76 Stat. 789, note t

following 21 U.S.C. § 321. E

In USV Pharmaceutical Corp. v. Weinberger, No. 72-

666, the Fourth Circuit held that any drug that had ever

been the subject of an NDA did not qualify for grand-

father protection under Section 107(c) (4), even if it had

become generally recognized as safe by 1962—unless the

FDA had formally withdrawn approval of the NDA. At

the same time, the Fourth Circuit held that so-called

“me-too” products of other manufacturers, substantially

identical in composition to the NDA’d “pioneer” product z:

but never the subject of NDAs themselves, could qualify 3

for grandfather protection. In this Court, the Govern-

ment supports the Fourth Circuit’s position on once-

NDA’d products but argues that all me-too products

should also be deemed to be “covered” by the NDA for é

the product to which they are similar.

Both the Fourth Circuit and the Government have con-

strued Section 107(c)(4) arbitrarily and _ illogically.

Properly construed, Section 107(c) (4) grandfathers any

product that on the day before the effective date of the

1962 Amendments was generally recognized as safe and

therefore no longer a “new drug.” There is no meaningful

sense in which a product no longer “new” can be said to

be “covered by an effective NDA.”

This construction of the grandfather clause gives ef-

fect to the fundamental legislative purpose underlying

Se a te eee eee

OT Te Gee eR Me Oe Sd TERE MYER RY PVN Tere:

the enactment of the new effectiveness requirements in

1962—that entirely new products and new claims for old

products were to be subjected to the new effectiveness re-

quirement, but that existing claims for old products were

to be exempted. The construction urged by the Govern-

ment, by contrast, would render Section 107(c) (4) en-

tirely meaningless. Every drug first marketed between

1938 (when the “new drug” provisions were first enact-

ed) and 1962 must at some time have been a “new drug”

which could not lawfully have been marketed without

an effective NDA. And under the Government’s view, an

NDA once effective is always effective and covers all me-

too drugs. Accordingly, if the Government’s position

were adopted, no drug first marketed between 1938 and

1962 could meet the test of Section 107(c) (4), and that

section would have no function whatever.

In its USV decision the Fourth Circuit recognized the

plausibility of the argument advanced here that a drug

that is no longer “new” should not be considered to be

“covered” by an effective NDA. It rejected the argument

solely on the ground that it would make surplusage out

of the requirement of clause (C) of Section 107(c) (4)

that the product not have been covered in 1962 by an ef-

fective NDA. This ground for decision cannot stand. For

on analysis it becomes clear that clause (C) is equally sur-

plusage both under the interpretation of the grandfather

clause adopted by the Fourth Circuit and under the in-

terpretation proposed by the Government. Since Section

107(c) (3) of the 1962 Drug Amendments makes clear

that all drugs covered by an effective NDA are not per-

manently grandfathered (but were subjected to the new

effectiveness requirement after a two-year grace period),

Section 107(c) (4), even without clause (C), could apply

only to old drugs not covered by an effective NDA.

In short, the “surplusage” objection is equally applica-

ble to the positions of the Government and the Fourth

Circuit as it is to the argument contended for here. In-

deed, since Section 107(c) (3) governs all drugs that are

covered by effective NDAs, there is no construction of

Section 107(c) (4) under which clause (C) is not sur-

plusage. Under the circumstances, this Court should

adopt the interpretation of Section 107(c) (4) that gives

it a meaningful function, that accords with the funda-

mental legislative purpose, and that avoids distinctions

between NDA’d and me-too products. It should therefore

hold that any drug that was generally recognized as safe

on the day before the enactment of the 1962 Amendments

cannot be considered to have been covered by an effective

NDA on that date and is therefore grandfathered as to

pre-1962 claims by Section 107(c) (4).

ARGUMENT

I. A Manufacturer is Entitled to a Hearing on any Genu-

ine Issue of Material Fact Before Withdrawal of

Approval of a New Drug Application.

Weinberger v. Hynson, Westcott & Dunning, Inc.,

No. 72-394, raises the question whether the Commis-

sioner may withdraw approval of a new drug applica-

tion (NDA) for lack of substantial evidence of effec-

tiveness, thus halting further marketing of adrug, with-

out giving the manufacturer a hearing on disputed, -

material factual issues. The Fourth Circuit held that

the Commissioner may not apply his “summary judg-

ment” regulations? so as to deny a hearing where a

manufacturer alleges and offers appropriate proof of

facts which, if true, would support a finding of sub-

stantial evidence of effectiveness. Hynson, Westcott &

Dunning, Inc. v. Richardson, 461 F.2d 215 (4th Cir.

1972) (J.A. 173).* That holding is clearly correct.

This Court has recognized as a fundamental aspect

of due process of law that a person has’a right to a

221 C.F.R. § 130.14.

3“J.A.” refers to the Joint Appendix filed in these consolidated

cases.

10 :

hearing in advance of a decision by an administrative

agency resolving disputed factual questions affecting his

substantial rights. Due process entitles him to an op-

portunity to present his case on disputed issues, to con-

front the Government’s case, and to cross-examine its

witnesses. “In almost every setting where important

decisions turn on questions of fact, due process requires

an opportunity to confront and cross-examine adverse

witnesses.” Goldberg v. Kelly, 397 U.S. 254, 269 (1970).

This is true not only where personal rights are at stake *

but also where property rights are involved.°

The Food, Drug, and Cosmetic Act recognizes this con-

stitutional principle by providing a hearing in a number

of contexts to persons whose rights would be substantially

affected by Government actions under the Act. E.g.,/°%

§§ 505(e), 507(f), 701(e), 21 U.S.C. §$ 355(e), 357 (fF,

871(e). Section 505(e) of the Act, which is involved in

this case, guarantees “due notice and opportunity for

hearing to the applicant” before the FDA may with-

draw approval of an NDA. It reflects Congress’ judg-

ment that an opportunity for a hearing is appropriate

before the FDA takes the drastic action of halting the

manufacturer’s further sale and the public’s continued

use of a drug already on the market.°

* See, e.g., Bell v. Burson, 402 U.S. 535, 539-42 (1971); Boddie

v. Connecticut, 401 U.S. 371, 374-79 (1971).

5 See, e.g., Greene Vv. McElroy, 360 U.S. 474, 496-99 (1959) and

cases cited at p. 497; Morgan v. United States, 304 U.S. 1, 14-15, 19

(1938) ; ICC v. Louisville & Nashville R. Co., 227 U.S. 88, 93-94

(1913) ; Hornsby v. Allen, 326 F.2d 605, 608 (5th Cir. 1964) ; Phila-

delphia Co. v. SEC, 175 F.2d 808, 817 (D.C. Cir. 1948), vacated as

moot, 387 U.S. 901 (1949). See generally K. DAVIS, ADMINISTRATIVE

LAW §§ 7.01, 7.04 (Supp. 1970). Indeed, this Court based its hold-

ing in Goldberg v. Kelly, supra, on earlier business cases.

® The legislative history of the 1962 Amendments makes plain

that Congress regarded an “opportunity for hearing” as required

by basic fairness before the drastic action of removal of a drug

from the market. Section 507(f), which authorizes removal of anti-

A summary judgment procedure does not carve out

an exception to this right to a hearing. It merely recog-

nizes that/ an evidentiary hearing is unnecessary where

the material facts are not in dispute. See, e.g., K.

DAVIS, ADMINISTRATIVE Law §§ 7.01, 7.04 (Supp. 1970) ;

6 J. MOORE, FEDERAL PRACTICE {56.06 (2d ed. 1972).

The leading decision on hearing rights under the Food,

Drug, and Cosmetic Act recognizes that the permissi-

bility of denying a hearing hinges on the absence of any

disputed issues of material fact. Dyestuffs & Chemicals,

Inc. V. Flemming, 271 F.2d 281 (8th Cir. 1959), cert.

denied, 362 U.S. 911 (1960). The court held that the

FDA might deny\a hearing (under Section 701(e) of

the Act) where ufacturer’s allegations, even if true,

would be legally insufficient to justify the relief sought.

In other words, the factual issues raised by the objections

had to be material issues—ones that went to the legality

of the FDA’s proposed action.’

biotics from the market for lack of substantial evidence of effective-

ness, does not, like Section 505(e), provide for a hearing in unquali-

fied terms but pruvides for a hearing if the manufacturer states

“reasonable grounds” for one. 21 U.S.C. § 357(f). Yet, in ex-

plaining~Section 507(f), Senator Kefauver, chief sponsor of the

1962 Amendments, stated:

“There of course would be public procedure with an oppor-

tunity for hearings and judicial review afforded the drug

manufacturers before the FDA began this type of action.”

108 CONG. REc. 22039 (1962).

“In the Dyestuffs case, it had already been established by a

Supreme Court decision (Flemming v. Florida Citrus Exchange,

358 U.S. 153 (1958)) that, as a matter of law, color additives

that were toxic at any level of concentration were not “harmless”

and were legally barred from certification. The manufacturer’s

objections to the decertification order in Dyestuffs advanced several

reasons for permitting the use of the additives in question, but did

not allege that the additives met the legal test of harmlessness.

Since it was clear that the manufacturer’s objections were legally

irrelevant, the court ruled that the FDA was justified in not holding

a hearing that could not affect the FDA’s final decision. See also

United States v. Storer Broadcasting Co., 3&1_U.S. 192, 205 (1956) ;

FPC v. Texaco, Inc., 377 U.S. 33, 39 (1964).

The Dyestuffs decision reflects the basic principle em-

bodied in the familiar summary judgment procedure

of Rule 56 of the Federal Rules of Civil Procedure and

the cases applying that rule: A party’s right to a hear-

ing turns on the existence of a disputed issue of fact

bearing on his right to relief under applicable law. “The

question presented by a motion for summary judgment

is whether or not there is a genuine issue of fact, and

not how that issue should be determined.” 6 J. MOorE,

supra, J 56.11[3], at 2174, quoting Koepke v. Fontec-

chio, 177 F.2d 125, 127 (9th Cir. 1949). See also Toebel-

man V. Missouri-Kansas Pipe Line Co., 130 F.2d 1016,

1018 (8rd Cir. 1942).

The FDA may not, in deciding on the need for a hear-

ing under Section 505(e), resolve genuine factual dis-

putes concerning the existence of substantial evidence

of effectiveness:

“Summary judgment procedures . . . do not replace

the trial. Genuine and disputed questions are not to

be decided on the paper record of affidavits and depo-

sitions ....” Clayton v. James B. Clow & Sons, 154

F. Supp. 108, 112 (N.D. Ill. 1957).

Professor Moore has stressed this point in summarizing

the law under Rule 56:

“The court is authorized to examine proffered ma-

terials extraneous to the pleadings, not for the pur-

pose of trying an issue, but to determine whether

there is a genuine issue of material fact to be tried.”

6 J. MOORE, supra, 7 56.04, at 2060. See also id,

7 56.11 [1.-2], at 2145; id., 1 56.15, at 2281.

Nor may the FDA place the burden of establishing

that there are genuine factual disputes on the manu-

facturer. Under well-settled principles, the Commissioner

has the burden of establishing that there is no factual

issue requiring a hearing, and all doubts about the

existence of a factual issue must be resolved against

him. This is true regardless of who has the final burden

of proof on the issue of substantial evidence of effective-

ness of the drug.’ “(T]he burden to show that there

is no genuine issue of material fact rests on the party

moving for summary judgment, whether he or his Op-

ponent would at trial have the burden of proof on the

issué concerned; and rests on him whether he is by

it required to show the existence or non-existence of facts.”

6 J. MOORE, supra, 56.15(3], at 2342-43 (footnotes

omitted). See also id. at 2335. This Court has stressed

that, since the burden rests on the moving party, the

materials: on which he relies “must be viewed in the light

most favorable to the opposing party.” Adickes v. S. H.

Kress & Co., 398 U.S. 144, 157, 158-59 (1970) ; United

States v. Diebold, Inc., 369 U.S. 654, 655 (1962). “All

doubts as to the existence of a genuine issue as to a mate-

rial fact must be resolved against the party moving for a

summary judgment.”. Cameron v. Vancouver Plywood

Corp., 266 F.2d 535, 540 (9th Cir. 1959) ; see 6 J. Moore,

supra, {| 56.06[2], at 2080; 9 56.11[3], at 2170 & n.27 :

7 56.15[3].

This rule is particularly important where, as here,

the critical decision whether there is a genuine issue of

material fact requiring a trial is not made by .a neutral

trier of fact (such as an independent hearing examiner

or administrative judge) but by one of the antagonists—

the Commissioner, who is the very party seeking sum-

“The lower federal courts have concluded that the applicant has

the burden of establishing the efficacy and safety of his drug when

he seeks initial approval of an NDA. See Ubiotica Corp. v. FDA,

427 F.2d 376, 378 (6th Cir. 1970). However, contrary to the Gov-

ernment’s assertion (Brief for Petitioners in No. 72-394, at 27),

the burden shifts once a drug has begun to be marketed under an

approved NDA. Where the FDA seeks to withdraw a previously

granted approval, it has the burden of showing that the drug does

not meet the statutory tests. Bell v. Goddard, 366 F.2d 177, 181

(7th Cir. 1966).

mary judgment. The Commissioner, under his proce-

dural rules, is allowed to award summary judgment to

himself. Under these circumstances, courts have a special

duty to review most carefully how the Commissioner,

acting as both movant and judge, decides his own mo-

tion in his own favor.°

The courts have confirmed that this elementary burden-

of-proof rule applies when summary judgment is sought

in an administrative proceeding as well as in a court

action. See, e.g., NLRB v. Smith Industries, Inc., 403

F.2d 889, 892-95 (5th Cir. 1968). Indeed, the Court of

Appeals for the District of Columbia Circuit has ap-

plied the rule to proceedings for withdrawal of NDA

approvals. In USV Pharmaceutical Corp. v. Secretary

of Health, Education & Welfare, 466 F.2d 455, 461

(D.C.. Cir. 1972), it held that the rule is “basic to ad-

* Indeed, a strong argument could be made that, in adapting the

summary judgment procedure to the context of an administrative

proceeding, the FDA ought to have a neutral hearing examiner

initially decide whether there is a genuine issue of material fact.

Under the FDA’s regulations, hearings on withdrawals of approval

of NDAs are conducted not by the Commissioner but by an inde-

pendent hearing examiner appointed pursuant to Section 5(d) of

the Administrative Procedure Act, 5 U.S.C. §554(d). 21 C.F.R.

§ 180.17. Fairness would dictate that the function of deciding

whether a triable issue of fact exists should also be assigned

initially to the hearing examiner.

The Administrative Conference of the United States has recom-

mended that agencies adopt a summary judgment procedure under

which the decision to grant summary judgment would be made by

the “presiding officer,” not by the moving party. Administrative

Conference of the United States, Recommendation No. 20 (adopted

June 1970). A commentary prepared by the draftsmen of the

recommendation does not even consider entrusting the authority

to grant summary judgment to anyone but the hearing officer.

Gellhorn & Robinson, Summary Judgment in Administrative Ad-

judication, 84 Harv. L. REv. 612 (1970). If the FDA’s procedure

followed the Administrative Conference recommendation, it would

avoid the evident unfairness of permitting the Commissioner,

as an interested party, to pass in the first instance on his own

motion for summary judgment.

ministrative fairness” and is fully applicable to with-

drawal proceedings under Section 505(e). In that case,

“the: court invalidated the FDA’s withdrawal of approval

of three NDAs because, inter alia, the Commissioner

had failed to meet his “obligation to present at least a

prima facie case for denial of a hearing.” Jd. The Gov-

ernment, which did not seek review of that decision by

this Court,’ now takes issue with this aspect of the de-

cision, or at least suggests that the Commissioner should

have been permitted to rely on the NAS-NRC reports

to make out his prima facie case. Brief for Petitioners

in No, 72-394, at 32 n.22." However, even assuming that

a negative NAS-NRC report is sufficient in some cir-

cumstances to shift the burden to the manufacturer to

come forward with the evidence on which he relies, that

does not affect the burden of persuasion on summary

judgment. The Commissioner retains the burden of show-

ing that the facts alleged by the manufacturer—if true

—could not support a finding of substantial evidence of

effectiveness.

The regulations involved in the Sonsie. Westcott &

Dunning case are expressly modeled after Rule 56 of the

Federal Rules of Civil Procedure. See 35 Fed. Reg. 7251

(1970) (preface to adoption of rules). They permit a

hearing to be denied only if the manufacturer’s factual

claims are facially incapable of meeting the legal test

for continued approval—that is, only

“lwihen it clearly appears from the data in the

application and from the reasons and factual anal-

ysis in the request for the hearing that there is no

genuine and substantial issue of fact which pre-

Memorandum for Respondents on Petition for etna in

No. 72-666, at 4.

“The D. C. Circuit noted that the NAS-NRC reports relied upon

by the Commissioner in that case were “cryptic and conclusory,

without any statement of supporting facts.” 466 F.2d at 461. That

defect is typical of the reports of the NAS-NRC panels. See, e.g.,

J.A. 196-97.

cludes . . . the withdrawal of approval of the ap-

plication. . . .” 21 C.F.R. § 180.14(b) (emphasis

added).

The lower federal courts have upheld these regulations

only after construing them to incorporate the basic sum-

mary judgment principles discussed above. Ciba-Geigy

Corp. Vv. Richardson, 446 F.2d 466, 468 (2d Cir. 1971) ;

USV Pharmaceutical Corp. v. Secretary of Health, Edu-

cation & Welfare, 466 F.2d 455, 460-61 & n.5 (D.C. Cir.

1972); Pharmaceutical Mfrs. Ass’n v. Richardson, 318

F. Supp. 301, 311-13 (D. Del. 1970); cf. Upjohn Co. v.

Finch, 422 F.2d 944, 955, 960 (6th Cir. 1970). Indeed,

the regulations had their genesis in two federal court

decisions which condemned previous attempts by the Com-

missioner to require a manufacturer to prove the merits

of its factual contentions in order to obtain a hearing.

American Home Prods. Corp. v. Finch, 303 F. Supp.

448, 454 (D. Del. 1969); Upjohn Co. v. Finch, 303 F.

Supp. 241, 257-58 (W.D. Mich. 1969).

When the regulations were issued, PMA wrote to the

Commissioner, attempting to obtain assurance that he

intended to apply the regulations in accord with: their

apparent recognition that a manufacturer is entitled

12In American Home, the Commissioner had revoked his ap- —

proval of an antibiotie under Section 507 of the Act without a

hearing, even though the manufacturer had made factua) asser-

tions which the court found were “not ‘frivolous,’ ‘inconsequential’

or ‘legally insufficient,” 303 F. Supp. at 454, 456. The court

enjoined the Commissioner’s action, stating:

“It appears to this Court that the Commissioner may have

made the test of substantial evidence of effectiveness—the

showing required to’ justify continued certification of the drug

—the test of whether the [manufacturer] is entitled to a

hearing. ...

“My reading of the Dyestuffs case and interpretation of the

statutory scheme provided by § 507(f) of the Act indicates that

‘reasonable grounds’ [for a hearing] should be understood

as meritorious, non-frivolous objections, which could most ap-

propriately be resolved finally after a full hearing.” Jd. at 454.

. to a hearing on any genuine issue of material fact. PMA’s

letter posed the question whether, under the regulations,

a manufacturer would be granted a hearing if he pre-

sented one or more affidavits by qualified experts, sum-

marizing the clinical tests and concluding that some of

them met the criteria in the regulations for “adequate

and well-controlled” tests and that, either alone or to-

gether with other clinical evidence, they sufficiently es-

tablished the effectiveness of the drug. The Commis-

sioner’s answer was noncommittal and unclear.“ For

18 The full text of PMA’s question was as follows:

“Assume that a party affected by a proposed withdrawal of a

new drug application or repeal of an antibiotic regulation pre-

sents, in his request for a hearing, one or more affidavits by

experts qualified by scientific training and experience to eval-

uate the\ effectiveness of the drug involved. These affidavits

summarize. the clinical tests conducted and conclude that some

of them meet the criteria set forth in Section 180.12 (a) (5) (ii)

(a) and that, either alone or together with other clinical evi-

dence, they adequately establish the effectiveness of the drug.

If you were to disagree as to either point, would you still rule

that there is a genuine and substantial issue as to the existence

of substantial evidence and, therefore, that a hearing was re-

quired?” Letter from C. Joseph Stetler, President, Pharma-

ceutical Manufacturers Association, to Charles C. Edwards,

M.D., Commissioner of Food and Drugs, dated June 38, 1970,

attached as Exhibit 5 to the Complaint in Pharmaceutical

Mfrs. Ass'n V. Richardson, Civ. No. 3946 (D. Del., filed July 22,

1970).

*The Commissioner responded as follows:

“First, opinion evidence in an affidavit could not provide a basis

for determining whether there is substantial evidence derived

from adequate and well-controlled clinical investigations. This

determination would have to be made upon the basis of an

examination of the medica] documentation offered. What the

regulations require is that the request for a hearing contain

a well-organized factual discussion of the available data, in

sufficient detail to allow a medical judgment as to the con-

clusions that may properly be drawn from the data. If the

medical documentation contains no substantial evidence, even

when accepted at face value, there is no issue of fact for a hear-

ing. But if this factual analysis identifies studies meeting the

criteria for adequate and well-controlled studies which appear

that reason, PMA brought suit, arguing that the regula-

tions were invalid if construed to permit the Commis-

sioner to resolve disputed issues of fact as a basis for

denying a hearing. Pharmaceutical Mfrs. Ass’n v. Rich-

ardson, supra.

During the oral argument in that suit, counsel for

the Commissioner gave the district court the assurances

that the Commissioner failed to give in response to

PMA’s letter. He stated that, under the regulations,

“where there are legitimate differences of opinion

about adherence to those criteria then you have dis-

puted issues of fact which call for a hearing.....

“, . The problem is and all the problem is that

we are dealing here with applications which fail to

show on their face that they gave attention to these

issues.” **

After receiving these assurances, the district court up-

held the regulations on the ground that they followed

the principles of Rule 56. The court held that the regula-

tions “simply provide that a request for an evidentiary

hearing will be denied when it clearly appears that the

medical documentation, which the hearing applicant is

required to submit, shows on its face that there is no

to support the promotional claims, a hearing may be unneces-

sary because the claims are proven, or a hearing may be re-

quired to test the validity of what has been reported by the

investigator and the significance of his observations in provid-

ing a basis of fact upon which it could reasonably be concluded

by experts that the drug will have the effectiveness claimed

for it.” Letter from Charles C. Edwards, M.D., Commissioner

of Food and Drugs, to C. Joseph Stetler, Picsident, Pharma-

ceutical Manufacturers Association, dated July 8, 1970, at-

tached as Exhibit 6 to the Complaint in Pharmaceutical Mfrs.

Ass’n V. Richardson, Civ. No. 3946 (D. Del., filed July 22,

1970).

15 Transcript of Argument at 33, 26, Pharmaceutical Mfrs. Ass'n

v. Richardson, Civ. No. 3946 (D. Del., Oct. 2, 1970) (emphasis

added). A copy of the full transcript is being lodged with the

Clerk of this Court.

genuine and substantial issue of fact which precludes

withdrawal of the new drug approval... .” 318 F. Supp.

at 312. The court further observed:

“Of course, if a given request for an evidentiary

hearing were to raise an issue of genuine fact with-

in the regulations, and the Commissioner were to

misapply the rules, that would be subject to correc-

tion by the Courts.” Jd. at 313.

What facts must a manufacturer offer to prove to es-

tablish his right to a hearing? Under Section 505(e),

the test for continued approval of an NDA is whether

there is “substantial evidence” supporting the drug’s

efficacy. 21 U.S.C. § 855(e). “Substantial evidence” is

defined in Section 505(d) to mean

“evidence consisting of adequate and well-controlled

investigations, including clinical investigations, by

experts qualified to evaluate the effectiveness of the

drug involved, on the basis of which it could fairly

and responsibly be concluded by such experts that

the drug will have the effect it purports or is rep-

resented to have under the conditions of use pre-

scribed, recommended, or suggested in the labeling

or proposed labeling thereof.” 21 U.S.C. § 355(d).

Whether the evidence supporting a particular NDA satis-

fies each element of this definition is a question of fact.

See S. REP. No. 1744, 87th Cong., 2d Sess. pt. 2, at 6

(1962).

The Commissioner’s regulations elaborate on the statu-

tory definition, setting forth criteria for determining

whether an investigation is “adequate and well-con-

trolled.” 21 C.F.R: § 130.12(a) (5) (ii). However, vir-

tually all of those criteria are imprecise and judgmental.

They call, inter alia, for “adequate assurance” that “suit-

able” subjects were chosen for the study; grouping of

subjects “in such a way as to minimize” bias; comparison

with a control “in such a fashion as to permit” quanti-

tative evaluation; and determination of whether placebo

NESE IS 8 RIE RUG RE ENR rt RRS PRESS IRON Ratner rane

RECAP RIN ce eee Ys AITO. OPI Cea EE SAT et

PA SRR RIM Rat He

effect is “negligible”. These are not “bright line” tests

whose satisfaction will always be as readily apparent as

whether the license applicant in United States v. Storer

Broadcasting Co., 351 U.S. 192 (1956), already owned

five radio stations. Expert opinions may differ about

whether any one of the criteria is met in a particular

case.**

Experts may differ also about whether particular

studies form a basis for a conclusion of effectiveness. In-

deed, the judgmental nature of these questions is the

very reason for the “substantial evidence” test: Congress

intended to allow for subjective differences of opinion

among qualified experts and to permit a drug to be mar-

keted even though a minority of the experts judge that

its effectiveness has been appropriately demonstrated.”

Where the manufacturer offers the opinion of a qualified

expert that a certain study or group of studies meets the

criteria for an “adequate and well-controlled investiga-

tion” and establishes the effectiveness of a product, a

genuine factual dispute is presented. That dispute can

be resolved only through confrontation and cross-exami-

nation at an evidentiary hearing. The Commissioner

may not weigh the manufacturer’s documentation against

the views of his own experts and decide the merits of the

16Tt is possible to conceive of a situation in which even the

“bright line” test involved in Storer might give rise to a factual

dispute—for example, where the parties disagree whether the

license applicant’s relationship to an existing station amounts to

ownership. However, the five-station rule obviously leaves little

room for differences of opinion, and no factual dispute was even

alleged to exist-in Storer. Similarly, in FPC v. Texaco, Inc., 377

US. 33 (1964), the agency’s rules specifically forbade certain price

clauses in natural gas contracts, and the companies did not deny

that their contracts contained the forbidden clauses. Therefore,

the Government’s heavy reliance on Storer and Texaco (Brief for

Petitioners in No. 72-394, at 22-24, 26) simply misses the point

of those cases.

17§. REP. No. 1744, 87th Cong., 2d Sess. 16 (1962); id., pt. 2, at

5-6, 56-58; 108 Conc. REc. 10108 (1962) (remarks of Sen. Hruska) ;

id. at 17366 (remarks of Sen. Eastland).

manufacturer’s claims as the basis for granting himself

summary judgment.**

The decision below in the Hynson, Westcott & Dunning

case correctly set forth and applied these principles. The

court of appeals held that the Commissioner’s summary

judgment in favor of himself could be supported

“only if it can be fairly said that the clinical tests

and medical studies and investigations submitted by

the applicant, if credited and accepted, will not sup-

port a finding that they provide ‘substantial evi-

dence’ of effectiveness [under the statute and regu-

lations} ....

... Manifestly, the applicant does not have to sati

or convince the Commissioner by his evidence that

product is effective as a predicate for securing hi

right to a hearing. If that were his burden, a hear-

ing would never be necessary or appropriate.” 461

F.2d at 220 (J.A. 178).

1*Of course, the necessary content and specificity of the ex-

pert’s affidavit will depend on the facts of a particular case. The

courts in cases under Rule 56 have developed a body of standards

governing the adequacy of affidavits for use on summary judgment.

See 6 J. MOORE, supra, § 56.22.

’* While the court of appeals’ opinion is imprecise at points, we

believe that this passage and the opinion as a whole make clear

that the court applied the correct test. The Government criticizes

the court of appeals for at one point characterizing the issue to

be resolved at the hearing as “the effectiveness of Lutrexin.” 461

F.2d at 221 (J.A. 180). The Government seizes upon this one

phrase to argue that the court disregarded the test of “substan-

tial evidence” as defined in the Act and regulations. Brief for

Petitioners in No. 72-394, at 26-27. However, the remainder of

the opinion makes clear that the court used the phrase “the effec-

tiveness of Lutrexin” as a shorthand description of the statutory

test. The test for approval of an NDA is the actual effectiveness

(and safety) of a drug, as contrasted to the test for the applica-

bility of the “new drug” provisions, which is general recognition

of effectiveness (and safety). (See pp. 32-34, infra.) The sub-

stantial evidence requirement merely defines the type and quantity

of evidence on which the determination of effectiveness depends. .

The Fourth Circuit’s opinions in Hynson, Westcott & Dunning and

The court examined the materials submitted by Hynson,

Westcott & Dunning with its request for a hearing and

concluded that they did not clearly show on their face

a lack of substantial evidence. Jd. at 221 (J.A. 179-80).

In its attack on the Fourth Circuit’s opinion, the Gov-

ernment blurs the vital distinction between deciding

whether there is a factual dispute that necessitates a

hearing and deciding the merits of the factual dispute.

The Government argues that the court of appeals should

have upheld the denial of a hearing because the Commis-

sioner, ex parte, had made “a reasonable determination

that the studies fail to conform to the regulations.”

(Brief for Petitioners in No. 72-394, at 35 (emphasis

added).) But that determination is one that the Com-

missioner could lawfully make only after a hearing; in

making it here he decided the very factual questions that

the hearing would address.

This is revealed by the Government’s discussion of the

reasons given by the Commissioner for rejecting the

studies relied upon by Hynson, Westcott & Dunning. (Jd.

at 37-39.) For example, the Commissioner rejected one

of the studies for the stated reason that “(t]he historical

controls employed are inappropriate” (J.A. 76), even

though the regulations permit the use of historical con-

trols (J.A. 488-89) and the manufacturer offered the

opinions of several experts that historical controls are

the only possible type of control where the life or death -

of a fetus is involved. (J.A. 33-34, 37, 41, 44, 51, 55,

59.)*° If the Commissioner disagreed with those experts

Bentex show that it fully understood these aspects of the statutory

scheme.

2° The Government criticizes the affidavit of Dr. Sadusk, former

Medical Director of the FDA, for failing to state whether he con-

sidered the studies relied upon by Hynson, Westcott & Dunning to

be “well-controlled.” The court of appeals apparently misread his

affidavit as addressed to that specific question. 461 F.2d at 221

that tests of Lutrexin using historical controls could be

“well-controlled,” obviously that disagreement framed a

factual issue requiring a hearing.

Perhaps recognizing this, the Government now rechar- ©

acterizes the Commissioner’s objection as going to the ade-

quacy rather than the appropriateness of the historical

controls. (Brief for Petitioners in No. 72-394, at 38 n.

27.) But the Commissioner’s action is no more defensible

on that ground. Neither the regulations nor the Commis-

sioner’s decision shows in what way the use of historical

controls was inadequate. Since the experts performing the

studies obviously thought their controls were adequate,

that question can be decided only after full exploration

through cross-examination at a hearing. If the Commis-

sioner is permitted to decide such disputes ex parte, with-

out a hearing, the Government’s statement that “formal

hearings are not likely to be needed in many instances”

(Id. at 20 n.15) will certainly prove true.**

The Government’s argument concerning the standard

of review of the Commissioner’s denial of a hearing con-

firms that it believes the Commissioner can decide genu-

(J.A. 180). In fact, the Sadusk affidavit was addressed to the

important question of the appropriateness of historical controls in

tests of drugs intended to prevent premature labor and threatened

abortions. (J.A. 59.) In attacking it, the Government disregards

the other affidavits dealing with the specific studies, several of

them by the authors of the studies themselves.

“1 Indeed, so far as we are aware, the FDA has not granted a

hearing in any case since its “summary judgment” rules were

promulgated in 1970.

For a recent example of the lengths to which the FDA will go to

avoid holding a hearing, see 38 Fed. Reg. 6305, 6308 (March 8,

1973), denying a request for a hearing and withdrawing approval

of Winthrop Laboratories’ NDA for Alevaire notwithstanding the

submission of seven affidavits of experts concluding that studies

relied upon by the manufacturer constituted adequate and well-

controlled studies as defined by the FDA’s own regulations and

proved the effectiveness of the product.

ae Oe re

Mn a A ae MINT

SERRA EY pra aace mers.”

ine disputes on material issues of fact without a hearing,

and then invoke this decision to support his determina-

tion that there is no need for a hearing. The Govern-

ment argues that the Commissioner's summary judg-

ment in favor of himself should be upheld if “supported

by the evidence.” (Jd. at 34.) However, that is the test to

be applied to a finding of fact made on the record of a

hearing, not to a summary determination that no genuine

issue of fact exists. See Administrative Procedure Act

§10(e), 5 U.S.C. § 706(2) (E). After the Commissioner

has heard conflicting scientific testimony, with the bene-

fit of cross-examination,” his conclusions are entitled to

the judicial deference embodied in a restricted scope of

review. However, the question for the Commissioner in

determining whether a hearing is needed is simply wheth-

er a material factual dispute exists. That question is

one of law. E.g., NLRB v. Bata Shoe Co., 377 F.2d 821,

826 (4th Cir.), cert. denied, 389 U.S. 917 (1967). Once

the Commissioner has decided it, “the appellate court

in reviewing must determine whether there is any genu-

‘ine issue of material fact underlying the adjudication.”

6 J. MOORE, supra, § 56.27[1], at 2973.

Finally, the Government raises the spectre that it may

have to hold thousands of hearings, thus bogging down

the implementation of its review ‘of the effectiveness of

22The Court of Appeals for the District of Columbia Circuit

has recently reaffirmed the “unique potential” of cross-examination

“as an ‘engine of truth’—the capacity given 9 diligent and re-

sourceful counsel to expose subdued premises, to pursue evasive

witnesses, to ‘explore’ the whole witness, often traveling unex-

pected avenues.” International Harvester Co. v. Ruckelshaus (D.C.

Cir. No. 72-1517, Feb. 10, 1973), slip op. at 22.

23 Summarizing the law under Rule 56, Professor Moore further

stated: “The trial court cannot draw upon any discretionary power

to grant summary judgment where [the] adjudication involves any

genuinely disputed issue of material fact.” Id. at 2976.

pre-1962 drugs. (Brief for Petitioners in No. 72-394, at

19, 30, 35.)* There are several answers to this argu-

ment. First, faithful application of summary judgment

principles will mean no more than that a manufacturer

will receive a hearing when it makes a concrete offer of

proof on a material factual issue. The Government’s

fear that summary judgment will never be possible (id.

at 35) disregards the years of successful use of summary

judgment in the federal courts to weed out cases in which

no factual dispute really exists. Second, though it would

be faster and cheaper for FDA to proceed ex parte, Con-

gress in providing for hearings obviously was willing to

pay the price of guaranteeing the fairness that only hear-

ings can provide.” Finally, the Government greatly ex-

aggerates the size of the problem. In the recent American

Public Health Ass’n litigation to which the Government

refers,* the evidence indicated that a substantial majori-

ty of the drugs rated less than “effective” by the NAS-

NRC panels have been voluntarily removed from the mar-

ket and that many of the remainder are duplicates of

each other, containing the same active ingredient.” The

*It is particularly ironic that this “burden” argument is ad-

vanced in a group of cases in which the Government is also asking

this Court to vest the FDA with new authority to determine whether

°° This Court has gecently noted the constitutional underpinning

for that judgment: “While the problem of additional expense must

be kept in mind, it does not justify denying a hearing meeting the

ordinary standards of due process.” Goldberg vy. Kelly, supra, 397

US. at 261, quoting Kelly v. Wyman, 294 F. Supp. 898, 901 (S.D.

N.Y. 1968).

** American Public Health Ass’n Vv. Veneman, 349 F. Supp. 1311

(D.D.C. 1972), discussed in Brief for Petitioners in No. 72-894,

at 30 n.20.

*? Affidavit of John G. Adams, Ph.D., attached to Supplemental

Memorandum in Support of Motion of Pharmaceutical Manu-

facturers Association for Leave to Intervene, American Public

number of cases requiring hearings can be expected to be

a small fraction of the number of drug claims reviewed

by the NAS-NRC panels,

In its Hynson, Westcott & Dunning decision, the Court

of Appeals for the Fourth Circuit correctly set forth and

applied the standard for determining whether a hearing

must be held before approval of an NDA is withdrawn

for lack of substantial evidence of effectiveness. That

ruling should be affirmed by this Court.

II. Under the Food, Drug, and Cosmetic Act, the Courts

Have Exclusive Jurisdiction, in Enforcement and De-

claratory Judgment Actions, to Determine Whether a

Product is a “New Drug.”

Three of the cases before the Court are declaratory

judgment actions brought by drug manufacturers seeking

a judicial determination that certain of their products are

not “new drugs” as that term is defined in the Act—

either because the products are not “new” within the

meaning of amended Seetion 201(p), 21 U.S.C. § 321(p),

or because they were exempted from amended Section

201(p) by the “grandfather” provisions of the 1962

Drug Amendments. The Government has challenged the

manufacturers’ right to have a court make that determi-

nation, arguing that the decision is more properly made

by the Commissioner, subject to normal judicial review

of agency actions.

Health Ass’n v. Veneman, Civ. No. 1847-70 (D.D.C., filed Oct. 5,

1972). Specifically. Dr. Adams stated that in a survey of 681

drugs, manufactured by 47 PMA member companies, which had

received no “effective” ratings. 428 had already been removed from

the market. Thirty-six others had been accepted as “effective” by

the FDA for one or more claims based on additional studies. The

remaining 217 include only 152 distinct products, with the others

being “obvious duplicates representing either different dosage

forms or different strengths of the same active ingredient.” /d.

A copy of Dr. Adams’ affidavit is being lodged with the Clerk of

this Court.

In the Bentex case (No. 72-555), the Court of Appeals

for the Fourth Circuit upheld the manufacturers’ right to

obtain a declaratory judgment on the “new drug” status

of their products and rejected the Government’s argu-

ment that FDA has concurrent jurisdiction to decide

that question. Bentex Pharmaceuticals, Inc. v. Richard-

son, 463 F.2d 363 (4th Cir. 1972) (J.A. 258). The same

court followed that ruling in the USV case (No. 72-666),

decided the next day. USV Pharmaceutical Corp. v. Rich-

ardson, 461 F.2d 223, 226 (4th Cir. 1972) (J.A. 466).

However, the Third Circuit reached the opposite re-

sult in No. 72-528. Ciba Corp. v. Richardson, 463 F.2d

225 (3d Cir. 1972) (J.A. 215). In a per curiam opinion

which cited no authorities, the Third Circuit held that

the question of “new drug” status had been decided sub

silentio by the FDA when it withdrew approval of Ciba’s

previously approved NDA and by a court of appeals in

upholding the FDA’s action. Therefore, the Third Circuit

concluded that Ciba was barred from obtaining a declara-

tory judgment on the question.”

*8In USV, since there has been a trial in the district court and

there are now no disputed issues of fact, the Government does not

oppose this Court’s reaching the legal issues governing the “new

drug” status of the products involved. However, it does indicate

its disagreement with the Fourth Circuit’s ruling, based on Bentex,

that those issues are for the courts, not FDA, to decide. See Mem-

orandum for Respondents on Petition for Certiorari in No. 72-666

at 6 n.9.

**The remaining case before the Court (Nos. 72-394, 72-414)

arises from the FDA’s withdrawal of approval of an NDA, of which

review was obtained directly in the court of appeals. Hynson, West-

cott & Dunning, Inc. v. Richardson, 461 F.2d 215 (4th Cir. 1972)

(J.A. 173). In that case, the manufacturer, having previously

been refused a declaratory judgment on the status of its product

(Hynson, Westcott®& Dunning, Inc. v. Finch (D. Md., Civ.

No. 21112, Sept. 16, 1970)), was also refused a hearing before

the FDA on its claim of exemption from the “new drug” require-

ments. PMA believes that the district court’s decision refusing to

adjudicate the status of Hynson, Westcott & Dunning’s product

was erroneous.

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For the reasons discussed below, we submit that this

conflict between the circuits should be resolved in favor

of the Fourth Circuit’s carefully reasoned construction

of the Act in Bentew.

As the Bentex opinion demonstrates, Congress has

struck a balance in the Act between judicial and admin-/

istrative authority for its implementation. This balance

is reflected in the two major amendments of the federal

drug laws since the original enactment of the Food and

Drug Act of 1906. Act of June 30, 1906, 34 Stat. 768.

The 1906 Act did not provide for any premarketing

review of drugs by an administrative agency. It pro-

hibited the interstate sale of adulterated or misbranded

drugs, and statutorily defined what acts constituted adul-

teration and misbranding. Jd. §§ 7, 8, 34 Stat. 769-71. The

agency was assigned the prosecutorial role of proceeding

against violators in court.** When the Food, Drug, and

Cosmetic Act replaced the tarlier law in 1938, it carried

forward these self-executing prohibitions—triable in the

first instance by district courts—and added a require

ment of premarketing administrative clearance for “new

drugs.” It defined “new drugs” as drugs “not generally

recognized as safe” by qualified experts. Act of June 25,

1938, §$ 201(p), 52 Stat. 1041-42. The Act left manv-

facturers free to market drugs other than “new drugs”

without the prior approval or acquiescence of an admin-

istrative agency, subject to the judicial sanctions of in-

junction, seizure, or criminal penalty if they violated

ev of the Act’s commands—including the specific pro-

ition against marketing a “new drug” without an ef-

fective NDA. ‘See Sections 301(d), 302-04, 505(a), 21

3° Enforcement actions are actually brought in the name of the

United States, by the Department of Justice. The administrative

agency investigates possible violations and refers cases to the De-

partment for prosecution. The term “prosecutorial role of the

agency” is used in this brief to denote the agency’s role in insti-

gating enforcement suits.

—

U.S.C. §§ 331(d), 332-34, 355 (a).° Except for the FDA’s

authority to screen “new drugs” before marketing, the

function of the agency under the Act remained prosecu-

torial.

The 1962 Amendments to the Act, whith expanded the

definition of “new drugs” to include drugs “not generally

recognized as safe and effective” and elaborated on FDA’s

controls over “new drugs” under Section 505 of the Act,

did not change the balance between the self-executing and

the premarketing clearance aspects of the Act. Pub. L.

87-781, §§ 102-04, amending Sections 201(p), 505, 21

U.S.C. §§ 821(p), 355. The FDA was given no authority

to require premarketing review of products falling outside

the expanded “new drug” catégory or exempted by the

“grandfather” provisions.

Where Congress has wanted to give the FDA decision-

making authority, it has known how to do it. See, e.g., Sec.

tions 401, 403(j), 502(n), 21.U.S.C. §§ 341, 348(j), 352

(n). But the Act makes no provision for FDA adjudica-

tion of whether a drug being marketed without an ap-

proved NDA is a “new drug” for which the manufacturer

should have sought premarketing clearance. It contains

no authority for administrative proceedings by which the

marketing of a product that lacks an approved NDA. The

FDA is authorized to investigate such a suspected viola-

tion of the Act, just as it may investigate a possible

violation of the adulteration or misbranding provisions

applicable to “new” and “old” drugs alike. Section 702,

21 U.S.C. § 372. It may, in its prosecutorial role, reach

a conclusion that a particular product is a “new drug”

requiring premarketing approval. But, as the Fourth

Circuit observed in Bentex,

“that opinion is not adjudicatory, it is only the

basis on which the FDA, as the prosecutor or initia-

tor of either a seizure or injunctive action in the

District Court, may invoke the jurisdiction of that

FDA can order the filing of an NDA or order a halt in thea

PAR RSH RRR tg! SEN an! armen enM Rect

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al hi

Court to determine, among other issues, whether the

drug challenged is a ‘new drug’.” 463 F.2d at 370

(J.A. 266).

In fact, enforcement suits under the “new drug” provi-

sion commonly present the courts with a disagreement be-

tween the FDA and the manufacturer over a product’s

status as a “new drug.” “New drug” status is “an is-

sue that must be and is resolved . . . in practically every

injunctive, seizure, or criminal proceeding under the Act.”

‘Bentex, supra, 463 F.2d at 372 (J.A. 269) (citing cases).

This does not, as the Government asserts, make for an

irrational or ineffective legislative scheme. To the con-

trary, a manufacturer who entertains some doubt about

the “new drug” status of his product need not await

FDA enforcement action to remove the uncertainty. The

FDA’s regulations have long provided that a manufac-

turer may request the FDA to give an informal opinion on

the “new drug” status of a product. See 21 C.F.R.

§ 130.39. The courts have held—and the FDA has con-

ceded—that the FDA’s expression of opinion is a suf-

ficiently final “agency action” to permit the manufacturer

to sue for a declaratory judgment under Abbott Labora-

tories v. Gardner, 387 U.S. 136 (1967). E.g., AMP, Ine.

v. Gardner, 389 F.2d 825, 826 & n.2 (2d Cir.), cert.

denied, 393 U.S. 825 (1968). Thus, where the manu-

facturer and the FDA differ on the “new drug” status

of a product, each has an orderly way under the Act

to obtain an impartial judicial resolution of the issue.

Until very recently, the FDA did not resist a manufac-

turer’s declaratory judgment suit on the ground that the

~ agency itself was empowered to adjudicate the issue sub-

ject only to limited judicial review. See, e.g., AMP, Ine.

v. Gardner, supra; Durovic v. Richardson, 327 F. Supp.

386 (N.D. Ill. 1971); Tara Industries, Inc. v. Finch,

CCH Food, Drug & Cosm. L. Rptr. {40,816 (D.D.C.

1970); Lemmon Pharmacal Co. v. Richardson, 319 F.

Supp. 375 (E.D. Pa. 1970) ; cf. Merritt Corp. v. Folsom,

165 F. Supp. 418 (D.D.C. 1958) (“new drug” status de-

termined in suit to enjoin further Government seizure

actions).

Nor does this scheme make it difficult to enforce ef-

fectively the “new drug” provisions of the Act. The man-

ufacturer who markets a drug without an approved NDA

does so at his own risk—the considerable risk of seiz-

ure, injunction, or even criminal punishment if a court

rules in an enforcement suit that he was wrong in be-

lieving his product not to be a “new drug.”

The Government suggests that the Fourth Circuit’s rul-

ing in Bentex will “transfer to the courts” an “enormous

volume” of litigation (Brief for Petitioners in No. 72-555,

at 34, 58), and that such litigation will involve complex

technical questions difficult for the courts to decide. (Jd.

at 34, 39, 43, 44, 55-57.) Both suggestions are wrong.

The Bentex decision does not create any new caseload

for the courts, because the courts have always been re-

sponsible for deciding “new drug” status, either in an

enforcement action ™ or in 4 declaratory judgment suit.*

31 See, e.g., United States v. Article of Drug . . . Sudden Change,

409 F.2d 734 (2d Cir. 1969) ; United States v. Article of Drug ...

Furestrol, 415 F.2d 390, 392 (5th Cir. 1969) (per curiam) ; United

States V. 41 Cases .. . Myconox & Ferro-Lac, 420 F.2d 1126, 1128

(5th Cir. 1970); United States v. Seven Cartons . . . Ferro-Lac,

424 F.2d 1364, 1365 (7th Cir. 1970); United States v. 354 Bulk

Cartons . . . Trim Reducing-Aid Cigarettes, 178 F. Supp. 847, 852-

53 (D.N.J. 1959) ; United States v. Article of Drug . . . Quinaglute,

268 F. Supp. 245, 248-49 (E.D. Mo. 1967) ; United States v. Articles

of Drug . . . Quick-O-Ver, 274 F. Supp. 448, 445-46 (D. Md. 1967) ;

United States v. Article of Drug .. . Line Away, 284 F. Supp. 107,

112-13 (D. Del. 1968), aff'd on other grounds, 415 F.2d 369 (3d

Cir. 1969) ; United States v. Article of Drug . . . Magic Secret, 331

F. Supp. 912, 914-17 (D. Md. 1971); United States v. Article of

Drug . .. Excedrin PM, CCH Food Drug & Cosm. L. Rptr. § 40,486

(E.D.N.Y., No. ‘70-C-77, Mar. 5, 1971). See also United States v.

Allan Drug Corp., 357 F.2d 718 (10th Cir.), cert. denied, 385 U.S.

899 (1966).

% See, e.g., AMP, Inc. v. Gardner, supra; Durovic v. Richardson,

supra; Lemmon Pharmacal Co. v. Richardson, supra; cf. Merritt

Corp. v. Folsom, supra.

The Government has made no showing that the courts

have been burdened with too many cases of either type.

As the Fourth Circuit noted, there is nothing novel about

judicial resolution of “new drug” status—what is novel

is the Commissioner’s assertion that he has the power,

nowhere conferred by the Act, to adjudicate the need for

a manufacturer to file an NDA for a particular product.

463 F.2d at 370-71 (J.A. 266-67).

Also incorrect is the suggestion that determining “new

drug” status requires “resolution of technical issues of

fact, requiring highly specialized knowledge, training and

experience of a kind not ordinarily possessed by judges.”

(Brief for Petitioners in No. 72-555, at 43.) In making

that argument, the Government blurs the distinction be-

tween the legal test of “new drug” status (whether a

product is “generally recognized” by experts as safe

and effective) and the test for approval of an NDA for

a “new drug” (whether the drug is safe and effective

in fact). Determining whether a drug is actually safe

or effective may require the resolution of difficult scien-

tific questions, and that determination is made by the

FDA in the first instance when it passes on an NDA

or when it later decides whether to withdraw its ap-

proval.** But where “new drug” status is the question,

“the safety of the products is not what is at issue ....

The question is whether there is general recognition

among qualified experts of the products’ safety and ef-

fectiveness.” AMP, Inc. v. Gardner, supra, 389 F.2d at

33 Even the issue of actual safety or effectiveness is decided by

the courts where the FDA challenges statements of safety or effec-

tiveness in a drug’s labeling as a violation of the misbranding

provisions of the Act. The courts have not shown any inability to

decide that issue when required. See, e.g., United States v. Lanpar

Co., 2938 F. Supp. 147, 151-54 (N.D. Tex. 1968); United States v.

354 Bulk Cartons ... Trim Reducing-Aid Cigarettes, supra, 178 F.

Supp. at 851-52.

831. The courts unanimously recognize this distinction.”

To decide “new drug” status, a court need only determine

*the nature of a drug’s reputation among persons with

relevant expertise, not whether that reputation is scien-

tifically accurate. The courts can readily decide that

question on the basis of expert testimony about the drug’s

reputation. See United States v. Articles of Drug...

Quick-O-Ver, supra. “General recognition” is, as the

court in Bentex observed, “manifestly a justiciable issue.”

463 F.2d at 372 (J.A. 269).

The Government goes so far as to argue that there is

no difference whatever between the test of substantial

evidence of effectiveness and the test of general recogni-

tion of effectiveness. (Brief for Petitioners in No. 72-555,

at 55-57.) We believe that this issue need not be de-

cided by the Court in these cases.** Moreover, there is

no basis whatever for the Government’s remarkable con-

tention. The statutory definition of substantial evidence

of effectiveness appears in Section 505(d) of the Act and

is explicitly made applicable only to that subsection and

4 See, e.g., United States v. Article of Drug .. . Bentex Ulcerine,

469 F.2d 875, 878-79 (5th Cir. 1972); United States v. Article of

Drug .. . Furestrol, supra, 415 F.2d at 392, aff’g 294 F. Supp. 1307,

1310-11 (N. D. Ga. 1968); United States v. Article of Drug .

Ezcedrin PM, supra, CCH Food, Drug & Cosm. L. Rptr. {| 40,486,

at 41,226; United States v. Article of Drug . . . Line Away, supra,

284 F. Supp. at 112; United States v. Articles of Drug . . . Quick-

0-Ver, supra, 274 F. Supp. at 445-46.

%sThe Government apparently believes that the question is pre-

sented in No. 72-414, Hynson, Westcott & Dunning, Inc. v. Wein-

berger. (Memorandum for Respondents on Petition for Certiorari

in No. 72-414, at 5-7; Brief for Petitioners in No. 72-555, at 57

n.83.) But the question is not addressed in the petitioner’s brief,

or in the lower courts’ opinions, in that case. In any event, if the

Court affirms the Fourth Circuit’s decision in Bentez, holding that

the FDA has no authority to determine the “new drug” issue, there

would be no occasion to reach this question in the Hynson, Westcott

& Dunning case.

to Section 505(e).** There is nothing in the legislative

history of the 1962 Amendments to indicate that Con-

gress intended the substantial evidence test to have a

broader application, or that it intended in enacting the

new test to obliterate entirely the distinction between

“old” and “new” drugs. The Government’s position would

effectively deprive the careful definition of “new drugs”

in Section 201(p) of the Act of any function, and would

sweep all drugs under a requirement of proof of effective-

ness by “adequate and well-controlled investigations.”

The Commissioner, unhappy with the structure of the

Act granting him jurisdiction only to approve, disapprove,

or withdraw approval of NDAs filed with him, has now

attempted to substitute a regulatory system under which

manufacturers would have to submit all drugs to the FDA

for administrative determination of their “new drug”

status. His substitute system rests on two assertions:

first, that as a matter of law every filing of an NDA

raises for the FDA’s determination the issue whether the

NDA should have been filed at all; and second, that,

where an NDA is not filed, Section 5(e) of the Adminis-

trative Procedure Act (which authorizes all agencies to

issue declaratory orders where necessary “to determine a

controversy or remove uncertainty”)*’ requires resort to

an administrative “declaratory judgment” proceeding be-

fore the FDA to determine whether a product is a “new

drug.” Thus, the “new drug” status of every drug would

come before the FDA for adjudication in one way or

another.

This jerrybuilt construct falls of its own weight. The

filing of an NDA simply does not under the Act place

at issue the “new drug” status of the product covered.

To the contrary, it indicates that the manufacturer has

8¢ Section 507(h) also applies the substantial evidence definition

to certain antibiotics. 21 U.S.C. § 557(h).

575 U.S.C. § 554(e).

chosen not to seek resolution of the issue.** The FDA’s

regulations nowhere suggest that “new drug” status is an

issue to be decided in NDA approval or withdrawal pro-

ceedings. And we are aware of no case in which the

filing of an NDA has been regarded by either the FDA

or a reviewing court as raising the “new drug” issue for

decision.**

To read Section 5(e) of the APA as transferring the

determination of “new drug” status from a judicial to an

administrative forum is equally unsound. That section

authorizes an agency to decide by declaratory order only

questions which it is otherwise authorized to adjudicate

on the record of a hearing. Boston & M.R.R. v. United

States, 162 F. Supp. 289, 293-94 (D. Mass.), appeal

dismissed, 358 U.S. 68 (1958). In this respect, it mir-

38 The Fourth Circuit in Bentez said that the filing of an NDA

is a “concession” of the “new drug” status of a product. 463 F.2d

at 371 (J.A. 268). Whatever the court meant by that, we would

not agree that such a filing “concedes” anything about what the

status of a drug may be years after the filing. Since a drug that

is initially “new” may cease to be so by becoming generally recog-

nized as safe and effective, the original filing of an NDA has no

bearing on the status of the drug at a later date.

3° The Government raises the spectre of abuse of the adminis-

trative process by a manufacturer who unsuccessfully challenges a

withdrawal of NDA approval before the FDA and on review in

the court of appeals, and then seeks “to litigate afresh in a dis-

trict court the question whether the drug involved required an

NDA _in the first place.” Brief for Petitioners in No. 72-555, at

35, 55. This is an illusory problem. If a manufacturer failed to

bring a declaratory judgment suit until after the withdrawal of

approval was upheld by the court of appeals, that failure might well

justify a district court’s refusal in its equitable discretion to en-

tertain a request for declaratory judgment.

*°The Attorney General’s Manual on the APA makes this point

perfectly clear:

“This grant of authority to the agencies to issue declaratory

orders is limited by the introductory clause of Section 5 so

that such declaratory orders are authorized only with respect

to matters which are required by statute to be determined ‘on

* rors the Declaratory Judgment Act, 28 U.S.C. §§ 2201-02,

which authorizes the federal courts to issue declaratory

judgments but confers no new jurisdiction on them."

In both of the cases cited by the Government in which

Section 5(e) was invoked, it was conceded that the

agency had authority to adjudicate the question it was

attempting to decide by declaratory order. Frozen Food

Express v. United States, 351 U.S. 40, 41, 44 (1956);

Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 372-73 _

n.3 (1969). As we have shown, the Food, Drug, and

Cosmetic Act does not authorize the FDA to adjudicate

“new drug” status. Therefore, Section 5(e) is of no

help to the Government at all.

The Government’s theory that Section 5(e) confers

such jurisdiction, moreover, proves too much. It would

logically apply not only to the determination of “new

drug” status but also to any question under the Act now

the record after opportunity for an agency hearing.’ .. . For

example, where an agency is authorized after hearing to issue

orders to cease and desist from specified illegal conduct, it may,

under Section [5(e)], if it otherwise has jurisdiction, issue a

declaratory order declaring whether or not specified facts

constitute illegal conduct. On the other hand, while the Securi-

ties and Exchange Commission has long issued informal ad-

visory interpretations through its principal officers as to

whether a proposed issue of securities would be exempt from

the registration requirements of the Securities Act, there is

no statutory agency hearing procedure in which this question

can be determined; if sectirities are sold without registration

and the Commission believes that registration was requiréd, it

can only institute civil or criminal proceedings. Accordingly,

Section [5(e)] does not authorize the Commission to issue

declaratory orders as to whether particular securities must be

registered under the: Securities Attorney General’s

Manual on the Administrative Proc Act 59 (1947).

The situation of the FDA with respect to questions of “new drug”

status is identical to that of the Securities and Exchange Commis-

sion in the Attorney General’s example.

41 E.g., Skelly Oil-Co. v. Phillips Petroleum Co., 339 U.S. 667, 671-

72 (1950) ; see Attorney General’s Manual, supra, at 59-60.

decided by the courts. The theory would transform the

Act from one enforced largely in the courts, with the

Government as prosecutor, to one in which every “contro-

versy” or “uncertainty” is decided in an administrative

proceeding where the Commissioner is both prosecutor and

judge, and where his decisions are conclusive except for

limited judicial review. Whatever the merits of such a

change as a matter of policy, it can be effected only by

an act of Congress.

The patchwork nature of the Government’s argument is

further demonstrated by its attempt to find authority for

judicial review of the declaratory orders on “new drug”

status it claims the FDA has authority to make. The

Act authorizes review of the Commissioner’s disapproval

or withdrawal of approval of an NDA in the courts of

appeals, § 505(h), 21 U.S.C. § 355(h), but provides for

no other appellate review of decisions under Section 505.

See Turkel v. FDA, 334 F.2d 844, 845-46 (6th Cir. 1964),

cert. denied, 879 U.S. 990 (1965). Thus, declaratory

orders on “new drug” status would not be reviewable

in the courts of appeals. The Commissioner suggests

that this gap can be closed by permitting the district

courts to review his declaratory orders under the gen-

eral review provision in the APA. The result would be

that the Commissioner’s rulings on “new drug” status

would be reviewable sometimes in the courts of appeals

(when approval of an NDA has been refused or with-

drawn) and sometimes in the district courts. There is

nothing to indicate that Congress contemplated such an

incongruous result.

The Government relies on a number of decisions of

this Court to establish the broad proposition that an

agency always has implicit authority to adjudicate the

question of its own jurisdiction. (See Brief for Petitioners

REITER TLL ESS AIT THES NITE RN A aE SMS te ar pan

peta inse

in No. 72-555, at 57-60.) However, those cases are

clearly not in point. In Ricci v. Chicago Mercantile Ex-

change, 98 S,Ct. 578 (1978),/this Court dealt with a

statute containing an express grant of authority to the

Commodity Exchange Commission to “adjudicate and

remedy” any violation of the statute or regulations under

it. Acting on the “premise” that the question before the

Court fell within the agency’s adjudicatory power, the

Court ruled that the agency should be permitted to de-

cide it first. Zd. at 581-82. The Court was careful to

distinguish its earlier decision in Silver v. New York

Stock Exchange, 378 U.S. 341 (1963), where the Court

had refused to require judicial deference to an agency

which “had no authority to deal with” the question pre-

sented. Id. at 579-80. Thus, Ricci and Silver together

stand only for the proposition that where an agency has

authority to decide a question, the courts will often defer

to it to decide the question in the first instance.

Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41

(1988), and Marine Engineers Beneficial Ass’n v. Inter-

lake S. S. Co., 870 U.S. 178 (1962), both involved ap-

plications of the National Labor :Relations Act, which

conferred “exclusive” jurisdiction on the National Labor

Relations Board to adjudicate “any unfair labor practice

affecting commerce.” Act of July 5, 1935, §10(a), 49

Stat. 453, as amended, 29 U.S.C. §160(a). In Myers

the Court held that, since the Board was authorized to

decide whether commerce is affected in a particular case,

subject to judicial review, an employer could not take that

question to court before the Board proceedings were com-

pleted. In Interlake, the Court held that the Board’s

exclusive jurisdiction to determine what is a “labor

organization” within the Act precluded the state courts

from entertaining a suit to determine that question at

the same time the Board proceedings were going on.

Similarly, in FPC v. Louisiana Power & Light Co., 406

U.S. 621 (1972), the FPC had unquestioned authority to

determine whether a natural gas system was interstate

and therefore subject to federal control, and the agency

was conducting proceedings to decide that question. This

Court simply held that the federal courts should not de-

termine the question for themselves “when the precise

issue . . . is in the process of litigation through pro-

cedures originating in the [agency].” Jd. at 647. In

each of these cases, the statute itself gave the agency

the authority to decide the question involved. They have

no application in this context, where the Act does not.”

The Government purports not to argue that the exist-

ing jurisdiction of the courts to determine “new drug”

status should be cut off, but only that the FDA should

be given concurrent jurisdiction to decide the issue. In

Bentex the Government argued in the district court that

the Commissioner should be given “primary jurisdiction”

and that the declaratory judgment suit should, therefore,

be dismissed. The district court rejected that argument,

ruling that it has jurisdiction “concurrent” with the

FDA; however, it then proceeded to defer to the FDA

for an initial determination of “new drug” status. The

Government, having failed to appeal the rejection of its

primary jurisdiction theory, now acquiesces in the dis-

trict court’s ruling. (Brief for Petitioners in No. 72-555,

42 Oklahoma Press Publishing Co. v. Walling, 327 U.S. 186 (1946),

is even farther afield. In that case, the Federal Wage and Hour

Administrator was seeking to exercise his authority to investigate

possible violations of the Fair Labor Standards Act, 29 U.S.C.

§§ 209, 211. Certain corporations being investigated tried to de-

feat judicial enforcement of subpoenas on the ground that the Act

did not apply to them. The Court held that the Administrator

was free to investigate the question of coverage, in the performance

of his job of “searching out violations with a view to securing

enforcement of the Act.” 327 U.S. at 216. The power of the FDA

in its prosecutorial role to investigate the coverage of the “new

drug” provisions is not disputed in the cases now before the Court.

at 46 n.76.) But it is clear that there is no functional

difference between the primary jurisdiction theory and

the district court’s notion of concurrent jurisdiction. As

the district court’s action in Bentex demonstrates, defer-

ence to the agency under a concurrent jurisdiction rule

would be virtually automatic. The result would be to

transfer the determination of “new drug” status in all

instances from the courts to the FDA. Both the primary

and concurrent jurisdiction theories share a common de-

fect: Both ignore the basic fact that “[t]he only adjudi-

catory right vested by the Act in the Secretary relates to

approval, or withdrawal of approval, of a ‘new drug’ ap-

plication.” Bentex, 463 F.2d at 371 (J.A. 267).

The Commissioner may have reason to wish he had the

jurisdiction he asserts. As both prosecutor and judge, he

could sweep drugs into the “new drug” category subject

only to limited appellate review in the courts. Under

the Act as Congress wrote it, on the other hand, the

Commissioner has the burden of proving in court in an

enforcement action that a product falls within the “new

drug” provision.“ The Commissioner is attempting to

shift this burden by assigning himself the right of de-

cision and then requiring the manufacturer to convince |

a reviewing court that the decision is not supported by

substantial evidence in the record. Moreover, the Govern-

ment appears to argue that the Commissioner’s decision

would be conclusive in a later enforcement proceeding.

(Brief for Petitioners in No. 72-555, at 45 n.74.)~ Not

only would that stand the~Act on its head, but by shifting

43 F.g., Bentex, 468 F.2d at 371-72 (J.A. 268-69) ; United States

v. Article of Drug . . . Bentex Ulcerine, supra, 469 F.2d at 878-79;

United States v. Articles of Drug .. . Quick-O-Ver, supra, 274 F.

Supp. at 445-46. FDA officials have recognized that the burden of

proof in an enforcement action is on the Government. See United

States v. Allan Drug Corp., supra, 357 F.2d at 718 (quoting state-

ment by HEW Secretary) ; CHRISTOPHER, CASES & MATERIALS ON

Foop & Druc Law 461 (1966) (quoting statement by FDA Deputy

Commissioner) .

the burden of proof in a criminal enforcement action,

it would raise obvious constitutional issues. See In re

Winship, 397 U.S. 358 ( 1970).

In sum, as the Fourth Circuit in Bentex concluded, the

Act gives the Commissioner no authority to adjudicate

the “new drug” status of a manufacturer’s product.

Where the Commissioner believes a manufacturer has

wrongly failed to file an NDA, the Act gives him “cer-

tain potent judicial remedies, available exclusively in the

District Court.” “ The decision of the Fourth Circuit to

that effect should be affirmed.

III. The Fourth Circuit Improperly Denied “Grandfather”

Protection Under Section 107(c)(4) of the 1962 Drug

Amendments to Products Which Were Neither “New”

nor Covered by an Effective New Drug Application

on the Day Before the Enactment Date of the Amend-

ments.

USV Pharmaceutical Corp. v. Weinberger, No. 72-666,

and Hynson, Westcott & Dunning, Inc. v. Weinberger,

No. 72-414, raise questions concerning the scope of pro-

tection, under the “grandfather” clauses of the 1962

Drug Amendments, P.L. 87-781, 76 Stat. 780, 788-89,

afforded to drugs which were no longer “new” drugs on

the day before the enactment date of the Amendments

but which had previously been covered by effective new

drug applications.

Under Section 505(a) of the Food, Drug, and Cos-

metic Act, 21 U.S.C. § 355(a), it is unlawful to market

a “new drug” unless there is an effective NDA for such

drug on file with the FDA. Before the enactment date of

the 1962 Drug Amendments, a “new drug” was defined

_in Section 201(p) of the Act as one

“not generally recognized, among experts qualified

by scientific training and experience to evaluate the

“463. F.2d at 366 (J.A. 260) (emphasis in original).

safety of drugs, as safe for use under the conditions

prescribed, recommended, or suggested in the labeling

thereof ....” 52 Stat. 1041 (1938).

The FDA was required under Section 505 to deny or

suspend the effectiveness of an application if it appeared

that the drug was unsafe or the application incomplete

or inaccurate. 52 Stat. 1052-53 (1938). .

The Amendments added einen of effectiveness

to the existing requirement & safety. This change was

reflected in two basic ways. First, the category of “new

drugs” subject to the application requirements was ex-

panded to fete any drug the safety and effectiveness

of which is not generally recognized by qualified experts.

Section 201(p), 21 U.S.C. § 321(p). Second, Section 505

was amended to require the FDA to deny or withdraw

approval of an NDA if it appears that there is not “sub-

stantial evidence” that the drug will have the effect

claimed for it. Sections 505(d) and (e), 21 U.S.C. $§ 355

(d) and (e).

The Amendments included two grandfather provisions

providing exemptions for drugs already on the market.

Section 107(c)(3) provides that any drug for which

~ there was an effective NDA on the day before the en-

actment date ** may continue to be marketed, even with-

out substantial evidence of effectiveness, so long as ap-

proval of the NDA is not withdrawn. And approval of

the NDA could not be withdrawn, pursuant to Section

505(e), on the ground of lack of substantial evidence of

effectiveness, until two years after the enactment date.

In addition, Section 107(c) (4), which ‘is at issue here,

provides a permanent exemption for certain other drugs,

so long as there is no change in their recommended uses:

*5 Section 107(c)(2) provides that an application which was

“effective” on the day before the enactment date shall be deemed

“approved” by the FDA. And Section 107(c)(3) applies to all

drugs whose applications are thereby deemed approved.

—

“In the case of any drug which, on the day immedi-

ately preceding the enactment date, (A) was com-

mercially used or in the United States, (B) was

not a new drug as defined by section 201(p) of the

basic Act as then in force, and (C) was not covered

* by an effective application under section 505 of that

Act, the amendments to section 201(p) made by this

Act shall not apply to such drug when intended

solely for use under conditions prescribed, recom-

mended, or suggested in labeling with respect to

such drug on that day.”

The Fourth Circuit ** construed Section 107(c) (4) not

to exempt drugs which had at any time prior to the day

before the enactment date been covered by an effective

NDA the approval of which had not been withdrawn

pursuant to Section 505(e), 52 Stat. 1058 (1938). It

also held that the so-called “me-too” drugs *’ were not cov-

ered by the NDAs of other manufacturers’ “pioneers”

and, thus, that they were entitled to exemption under

the statute if they had become old, even though the pio-

neers were not exempt.**

The Government also takes the position that the exemp-

tion provided by Section 107(c) (4) does not apply to any

drug for which there was at-any time an effective NDA .

on file with the FDA, even if the drug had become gen- j

“ The court articulated its views in the USV case, 461 F.2d 223,

226-27 (J.A. 468-70), and it relied without elaboration upon that j

opinion for its holding on the grandfather issue in the Hynson, j

Westcott & Dunning case. 461 F.2d 215, 219 (J.A. 176).

“A “me-too” drug is one which is substantially identical in

composition and claims to an NDA’d, “pioneer” drug. 461 F.2d

at 228 n.15 (J.A. 470). Such drugs typically were marketed with-

out NDAs because the NDA’d products had become generally

recognized as safe.

** However, the court held that me-too drugs produced by the

manufacturer of the NDA’d drug were covered by the NDA and,

thus, were not grandfathered under Section 107(c) (4). 461 F.2d

at 229-30 (J.A. 473).

erally recognized as safe before the 1962 Amendments

and therefore did not need an NDA, unless the FDA

had formally suspended the effectiveness of the NDA.“

As will be demonstrated below, this position flies in the

face of the legislative history of the 1962 Drug Amend-

ments, would make Section 107(c) (4) meaningless, and

depends upon a wooden reading of the literal language

of that section in isolation, without regard even to the

rest of Section 107(c) itself.

Properly construed, Section 107(c) (4) exempts from

the amendments to Section 201(p) those drugs which had

been commercially marketed prior to the day before the

enactment date and had by then become generally rec-

ognized as safe for their indicated uses. Swth drugs were

not “new drugs” on the day before the enactment date,

and thus were not then subject to the statutory require

ment of an NDA as a condition of lawful marketing.

Their NDAs had clearly become obsolete and superfiu-

ous.” Accordingly, such drugs could not be said to have

49 See Memorandum for Respondents in No. 72-666, at 8. The

Government parts company with the Fourth Circuit in maintaining

that the me-too drugs were covered by the pioneers’ NDA’s. Id.

at 9-11.

5° This was recognized as recently as last year in testimony by

the General Counsel of the FDA, who stated that NDA’s are

“obsolete or inactive” when “the drug has become an old drug.”

Hearings on Present Status of Competition in the Pharmaceutical

Industry Before the Subcommittee on Monopoly of the Senate Select

Committee on Small Business, 92d Cong., 2d Sess., Part 22, at

8530. Similarly, a commentator has noted:

“It just doesn’t seem to make any sense to argue that such

{old} drugs remained ‘covered by’ their earlier NDA clear-

ance when the manufacturing procedure, formulation, claims,

and so forth, could have been (and often were) changed with-

out the necessity of submitting a supplemental NDA unless

the change was such that it caused the drug to become again

a new drug, and when any newcomer could market the same

drug without any NDA clearance.” Hagan, Grandfather Pro-

tection Under the Drug Admendments of 1962, 19 Foop DrucG

CosMETIc L.J. 119, 123 (1964).

45 <

been covered by an effective application and, thus, are

grandfathered, as to pre-1962 claims, by Section 107(c)

(4).** These products, of course, are still fully subject

to the adulteration and misbranding sections of the stat-

ute, so the FDA is assured of ample power to protect the

public health.*

A. The Grandfather Clause Must Be. Construed in

Light of Congress’ Basic Intention to Apply the

Effectiveness Requirement Only to New Products

and New Claims for Old Drugs.

The legislative history of the 1962 Amendments bear-

ing directly upon Section 107(c) (4) is admittedly sparse.

But an examination of the legislative history of the basic

effectiveness amendments to which this grandfather pro-

vision relates sheds considerable light on its meaning.

That history makes it clear that Congress did not intend

to subject existing claims for “old” drugs to the new

effectiveness requirements.

The amendment to Section 201(p) of the basic Act

expanding the definition of “new drug” to include any

drug not generally recognized as effective, as well as

safe, was included in the original version of the 1962

Drug Amendments, S. 1552. However, when the bill was

*t This construction of Section 107(c) (4) obviates resolution of

the question of whether the so-called me-too drugs should be

deemed to be “covered” by NDAs issued to pioneer products.

Because of a divergence of interest among its member companies,

PMA expresses no view on the question of whether—if the con-

struction of Section 107(c)(4) urged here is rejected—me-too

products can nonetheless qualify for grandfather protection, as

USV maintains in No. 72-666.

‘2 For example, manufacturers who make extravagant claims

for the effectiveness of their products have rendered the products

misbranded under Section 502(a) of the Act, 21 U.S.C. § 352(a),

and have, therefore, committed a prohibited act subjecting them-

selves to the full range of enforcement actions under Title III of

the Act. :

first reported out of the Senate Judiciary Committee on

July 19, 1962, this provision was eliminated, and the

existing definition of “new drug” was left unchanged.

The Committee feared that changing the definition would

have the effect of causing old, “established drugs,” which

were generally recognized as safe and, thus, not “new

drugs,” to be deemed “new drugs” required to go through

the new drug clearance procedure. S. REP. No. 1744,

87th Cong., 2d Sess. 17 (1962).

Several members of the Committee, including the bill's

sponsor, Senator Kefauver, dissented from this decision

and argued that the definition of a “new drug” should be

amended to include a requirement of effectiveness. Such

a change was necessary, they reasoned, in order that

each new claim for drugs lawfully marketed would he

subject to the effectiveness requirement. See id. at 34

(separate statement of Sens. Kefauver, Carroll, Dodd,

Hart and Long). In other words, the dissenters did not

take issue with the Committee’s objective of exempting

old drugs from the effectiveness requirement, except in

the case of new claims. See also remarks of Senator

Kefauver, 108 CoNnG. REc. 10278 (1962).

Ultimately, Senator Kefauver prevailed, and the defini-

tion of “new drug” was changed in amendments to the bill

which were reported out of the Judiciary Committee on

August 21, 1962. The Committee Report which acconm-

panied the amendments described the change as intended

to eliminate ambiguity concerning “the circumstances and

extent to which a new claim or change of claim” could be

made without supporting evidence of effectiveness sub-

mitted to the FDA. S. Rep. No. 1744, 87th Cong., 2d Sess.

53 The focus upon new claims for existing drugs was reflected

later in the legislative history as well. See, e.g., remarks of Senator

Kefauver, 108 CONG. REC. 22045 (1962) (arguing that the defi-

nition of “new drugs” should me amended to close the “loophole”

which would permit the manufacturer of an existing drug to avoid

the new drug application procedure for new claims).

pt. 2, at 5 (1962). And Senator Eastland, chairman of

the Judiciary-Committee, introduced the new amendments

with a lengthy discussion of the bill’s provisions on the

floor of the Senate:

“The term ‘new drug’ is presently defined as one not

generally recognized to be safe for the claimed uses

or one, which while so recognized, has not been used

for a material time or to a material extent for such

uses. The bill would expand this definition so that

the term ‘new drug’ would also include [a drug] not

generally recognized to be effective for the claimed

uses or one, which while so recognized, has not been

used for a material time or to a material extent for

such uses. Thus, every brandnew product, and every

new claim for an existing product, would be subject

to the tests and procedures established in section

505 of the act.” 108 Conc. REC. 17366 (1962) (em-

phasis added).

The amendments reported out of the Judiciary Com-

mittee also included, for the first time, the grandfather

_ provisions of Section 107(c). Section 107(c) (3) provided

a limited, two-year grace period for drugs covered by

effective NDAs, and Section 107(c) (4) provided a perm-

anent exemption to certain other drugs. Evidently, this

latter provision was included in the bill in order that the

change in the “new drug” definition might serve its pro-

ponents’ purposes without at the same time ignoring the

repeated concern of Congress that established old drugs

should not be required to go through the new drug proce-

dure and demonstrate “substantial evidence” of effective-

ness for existing claims. Senator Kefauver had antici-

pated the inclusion of this grandfather provision two

weeks earlier. In arguing for the new definition of “new

drugs,” he was careful to note: “{T]he amendment to the

definition of ‘new drugs’ would not require resubmission

of all the thousands of ‘new drugs’ hitherto cleared for

the market in order to obtain reclearance for efficacy.”

108 Conc. REc. 15696 (1962) .™

In sum, the new definition of “new drugs” was intended —

only to assure that new products and new claims for exist-

ing old drugs would require substantial evidence of ef-

fectiveness. Neither the proponents nor the opponents

of this change sought to require old drugs to demonstrate

efficacy for existing claims as a prerequisite to continued

marketing. Section 107(c) (4), which provides an ex-

emption from the change in the definition of “new drugs,”

must be construed in furtherance of this purpose. The

construction of Section 107(c) (4) urged by the Goverr-

ment, which would have the result of causing the thov-

sands of drugs already lawfully on the market and gen-

erally recognized as safe to be subject to the amended

new drug clearance procedure, flies in the face of’ this

clear and overriding legislative purpose.

54 In light of this repeated concern in the legislative history that

not all drugs previously on the market should be required to demon-

strate effectiveness for existing claims, the language in the Confer-

ence Report, H.R. Rep. No. 2526, 87th Cong., 2d Sess. 23 (1962),

that Section 107(c) (4). applies to drugs that have “never pre

viously been subject to the new-drug procedure” should properly

be construed as a partial description of the class of drugs grand-

fathered by the provision, and not as a limitation upon the scope

of the provision. Nothing in the quoted language or the history of

the section suggests that Congress intended it to be such a limita-

tion. Moreover, if construed as a limitation, the language proves

too much, for it would be inconsistent with the concession by both

the Fourth Circuit (461 F.2d at 219, 227 (J.A. 176, 469)) and the

Government (Memorandum for Respondents on Petition for Cer-

tiorari in No. 72-666, at 8) that, under some circumstances, an

effective NDA could have ceased to be effective before 1962. See 52

Stat. 1053 (19388). What is more, as will be seen below, such a

construction, when combined with the Government's position that

me-too drugs are covered by NDAs for pioneer products, would

render Section 107(c) (4) entirely meaningless.

B. The Construction Urged by the Government Would

Render Section 107(c)(4) Meaningless.

The reading of Section 107(c) (4) urged by the Gov-

ernment not only is fundamentally inconsistent with the

legislative history, but also would result in a strained

and senseless construction of the statute. Indeed, in the

last analysis, the Government’s construction wo-'d as a

practical matter render Section 107(c) (4) entirely mean-

ingless.

All drugs which were sold prior to 1988 are exempted

from the new drug application procedure by Section 201

(p) of the Act, 21 U.S.C. § 321(p). Since a drug could

not become an old drug without having been marketed

for a time (Section 201(p) (2)), every drug first mar-

keted between 1938 and 1962 must have at some time :

been a “new drug.” See 52 Stat. 1041 (1938). And no E

such drug could lawfully have been marketed without an :

effective NDA. 52 Stat. 1052 (1938). If, as the Gov-

ernment maintains, an NDA which is once effective is ;

always effective and if the so-called me-too drugs are :

deemed to be “covered” by the NDA for the pioneer :

drug, then every drug which was at any time “new”

would have been covered by an effective application on

the day before the enactment date.** Thus, other than

those drugs already exempted by Section 201(p), no drug

would qualify for exemption under Section 107(c) (4),

53In spite of the fact that both the Fourth Circuit in USV (461

F.2d at 226 (J.A. 468) ) and the Government (see Memorandum for

Respondents in No. 72-666, at 7-8) purport to recognize that a

“new drug” may have become old when, as a result of widespread

experience and use, it became generally recognized as safe, their

claim now—that a drug remained covered by an effective NDA no

matter how obsolete or superfluous the NDA may have become—

amounts to saying that every drug which was once “new” before

the enactment date of the Amendments, and thus subject to the

NDA requirements, was always “new.”

a i

a Ae as

TE I ST SS SOE NP

and that provision would serve no purpose at all.” This

Court should not construe Section 107(c) (4) in such a

way as to render it entirely meaningless, when a sensible

alternative construction is available. See, e.g., Rosado vy.

Wyman, 397 U.S. 397, 415 (1970).

In order to avoid having to defend a construction

_of the statute which would render Section 107(c) (4) en-

tirely meaningless, the Government argues that a drug

may have ceased to be covered by an effective NDA if the

effectiveness of the NDA had been formally suspended by

the FDAwpursuant to Section 505(e). See Memorandum

for Respondents on Petition for Certiorari in No. 72-666,

at 8. The Fourth Circuit took the same position in the

USV decision. 461 F.2d at 227 (J.A. 469). But Section

505(e) simply required the FDA to suspend the effective-

ness of an NDA when it found that the drug was unsafe.

On its face, it is clear that section was intended, not to

restrict the circumstances under which an NDA may be

come ineffective, but only to limit the circumstances un-

der which a manufacturer could have required continued

FDA approval. In construing the statute as precluding

termination of the effectiveness of an NDA under any

other circumstances, the Government would have this

Court believe that Congress intended suspension of effec-

tiveness of an NDA for lack of safety to be a prereg-

*% Surely, Congress did not intend to exempt only those drugs

which were never covered by effective NDAs and yet were marketed

unlawfully, and we assume the Government does not suggest that

Section 107(c) (4) grandfathers such drugs.

The Fourth Circuit’s view of Section 107(c) (4) would pre-

serve a limited purpose for it—to grandfather me-too products

tht were generally recognized as safe on the day before the en-

accment date of the Amendments. However, nothing in the legis-

lative history of the statute suggests that this grandfather pro-

vision was intended to apply only to those drugs. This Court can

avoid this distinction between pioneers and me-toos, without reach-

ing the me-too question or prejudicing the status of me-too drugs

under the grandfather clause, by holding that the Section 107 (c) (4)

exemption applies to all old drugs, pioneers and me-toos as well.

iti s_—

uisite to exemption under the grandfather clause. Surely

Congress could not have intended such an absurd result.

Thus, the position of the Government would compel

an irrational construction of Section 107 (c) (4): it would

render that grandfather provision substantially useless.

C. The Fourth Circuit Erred in Relying upon the

“Surplusage” Argument.

In its USV decision, the Fourth Circuit rejected, for

one reason only, the argument advanced here that an old

drug could not be “covered by an effective” application

and that Section 107(c) (4) therefore served to exempt

existing claims for old drugs from the amended “new

drug” definition. “The difficulty with this argument,

plausible though it may be,” reasoned the court, “is that

it would make surplusage of requirement (C) in the ex-

emption statute.” 461 F.2d at 227 (J.A. 469). In other

words, the Fourth Circuit maintained that if every drug

which satisfied clause (B) of Section 107(c) (4) (ze.,

every old drug) thereby met the requirements of clause

then clause (C) would be redundant, mere surplusage.

The view that the construction of Section 107(c) (4)

adopted by the Fourth Circuit was necessary in order to

prevent clause (C)’s being unnecessary was the only

basis for the court’s holding.

Although this reasoning has some superficial appeal

when Section 107(c) (4) is read in isolation, its plausi-

bility as a basis for decision vanishes when that provision

is read in conjunction with the remainder of Section

107 and, in particular, Section 107(c) (3). For when

those two provisions are read together, it is apparent that

, clause (C) is unnecessary surplusage under the Fourth

Circuit’s and the Government’s construction of Section 107

PRE ee, Se eT Te

drug may still be covered by an effective NDA—as well as

the construction urged here. Under the circumstances, this

Court should disregard the surplusage issue and adopt

that construction which gives the most sensible meaning

to Seetion 107(c) (4) as a whole.

Section 107(c) (3) provides, in effect, that a drug

whose application is deemed approved, 7.e., one whose ap-

plication was effective on the day before the enactment

date of the Amendments, may have its application with-

drawn after two years on account of inefficacy. With-

out clause (C), Section 107(c) (4) provides that. drugs

which were “old” on the day before the enactment date

are forever exempted from the requirement of showing

efficacy as to existing claims. Obviously, Section 107 (c)

(4), even without clause (C), could apply only to old drugs

‘not covered by an effective NDA, because Section 107 (c)

(3) makes it clear that all drugs covered by an effective

NDA are not permanently grandfathered. If Section

107 (c) (4), even without clause (C), were read to perma-

nently grandfather old drugs covered by effective NDAs,

then Sections 107(c) (3) and (4), read together, would

stand for the inconsistent propositions that a drug

which is old but which is covered by an effective NDA

(1) may have its new drug application withdrawn on

grounds of inefficacy after two years (§ 107(c) (8)), and

(2) is exempt from the efficacy requirements of the Act

(§ 107(c) (4)). In order to avoid this patent contra-

diction, Section 107(c) (4), even without clause (C),

would have to be read to apply only to drugs not covered

by effective applications. Thus, the purpose assigned

to clause (C) by the Government and the Fourth Cir-

cuit—distinguishing old drugs covered by effective ap-

plications from those not so covered—is actually served

by Section 107(c) (3). In short, even under the Fourth

Circuit’s and the Government’s view, clause (C) is super-

fluous.”

The error in the court’s analysis stems from its ask-

ing what purpose clause (C) serves, given clauses (A)

and (B). The more logical way to interpret Section 107

tion 107(c) (3) defines the grandfather protection for

drugs covered by effective applications. What is left are

drugs not covered. Thus, analytically, clause (C) serves

as a restatement in Section 107(c) (4) of the relevant

aspect of Section 107(c The question the Fourth

Circuit should have asked is, yiven 107(c) (3) and 107

reason, obviously, is to prevent exempting from the efficacy

requirements drugs which weré not covered by an ef-

fective application but had not become generally recog-

nized as safe through commercial use.

In sum, the surplusage argument upon which the Fourth

Circuit reliedeprovides no basis for distinguishing the con-

struction urged here from that argued by the Government.

Since Section 107(c) (3) governs all drugs that are cov-

ered by effective NDAs, there is no construction of Sec-

tion 107(c) (4) under which clause (C) is not surplusage.

This Court should therefore construe Section 107(c) (4)

in light of its legislative purpose and the statutory

5*?The Government might ‘attempt to avoid this dilemma by

arguing that Section 107(c) (3) applies, not to all drugs with

effective applications, but only to “new drugs” with effective appli-

cations. Given this reading of Section 107(c) (8), the class of drugs

which meet the requirements of Section 107(c) (4)(B) might in-

clude old drugs covered and those not covered, apparently making

since Section 107(c) (3) does not refer to “new” or old drugs, the

narrowing gloss on 107(c) (3)—that it applies only to “new drugs”

—would depend upon the premise that a drug with an effective appli-

cation must be “new”, i.e., that an old drug cannot be covered by an

effective NDA. Thus, such an argument. would depend upon the

very premise the Government rejects. ~

scheme as a whole. Congress did not intend its 1962

Amendments to apply to existing claims for old drugs,

nor did it write Section 107(c) (4) with no purpose in

mind. That provision should be construed to exempt from

the new “new drug” definition all drugs which had be

come generally recognized as safe by the day before the

_ enactment date of the Amendments, because such drugs

cannot in any meaningful sense be said to have been

“covered by an effective’ NDA at that point.®® Accord-

ingly, the decision of the Fourth Circuit denying grand-

father status to such drugs should be reversed.

58 Such a holding would make unnecessary the Court’s deciding

separately the status under the grandfather provisions of drugs

whose NDAs had been withdrawn by action of the manufacturer.

See Brief for Petitioner in No. 72-666, at 68-76.

CONCLUSION

For the reasons stated above, the judgment of the

court of appeals in the Hynson, Westcott & Dunning case

(Nos. 72-8397 and 72-414) should be affirmed insofar

as the court held that the FDA could not withdraw ap-

proval of the manufacturer’s NDA without providing a

hearing on the question of substantial evidence of effec-

tiveness; the judgment of the court of appeals in No.

72-528 should be reversed; the judgment of the court

of appeals in No. 72-555 should be affirmed; and the

judgment of the court of appeals in No. 72-666 should be

reversed.

Respectfully submitted, 4

;

LLoyD N. CUTLER ‘

DANIEL MARCUS é

A. DoUGLAS MELAMED i

WILLIAM T. LAKE f

WILMER, CUTLER & PICKERING t

900 - 17th Street, N.W. ;

Washington, D. C. 20006 :

Attorneys for Pharmaceutical f

Manufacturers Association, f

Amicus Curiae f

;

}

uf Counsel:

BRUCE J. BRENNAN

RODNEY R. MUNSEY

Pharmaceutical Manufacturers

Association

1155 - 15th Street, N.W. ‘

Washington, D. C. 20005 é

April 2, 1978. 3

CLIFFORD, pt eae Namen ye 8

WRTLWAIN ty DANIEL ¥. O'KEEFE, 72.

pe 8, 1973 tee

THOMAS

‘JOHN ¥. KOVIN

nEre THOMAS.

INDEX

Page

Motion For Leave To Fitz Brrer Amicus Cure ..... ix

Barer Amicus CuRME ............................. 1

Ormtons BeLow ...............000000 0.000000 2

QuesTIONS PRESENTED .............................. 3

STATEMENT 2.2.2... ccc cee cee ceccecce, 4

I. The Relevant Statutory Provisions ........... 4

A. The ‘‘New Drug”’ Provisions .............. 4

B. The ‘‘Misbranding”’ Provisions ........... 7

C. Enforcement of the Statutory Provisions .. 8

II. The Five Cases Before The Court ............ 10

A. The Bentex Case ........................ 10

B. The CIBA Case .......................... 11

C. The Hynson Cases ....................... 12

D. The USV Case ...............00......... 14

CSG URS EONS Renee cedeesbscscéseeesococecs 15

I. Introduction and Summary .................. 15

II. The Food and Drug Administration Has No Au-

thority To Make a Legally Binding Administra-

tive Determination as to Whether a Drug Which

Has Never Been the Subject of a New Drug Ap-

plication Is a ‘‘New Drag’? ... 0. ccc ccc cccce. 21

A. The FDA Has No Authority To Adjudicate

This Issue .............000............... 21

B. The FDA Has No Authority To Decide This

Issue by Rule-Making

ii Index Continued

| Page

III. Section 107(c) of the Drug Amendments of

1962 Neither Extends FDA’s Authority Over

Drugs Which Have Never Been the Subject of a

New Drug Application Nor Terminates Its Au-

thority To Withdraw Approval of a New Drug

APPIIORTIOW oss is cece cede scsccceceesecsces 50

A. The Provisions and Legislative History of

Section 107(c) of the Drug Amendments of

po Se ee ea ee, a 50

B. Section 107(c)(4) Does Not Give the FDA

Indirect Authority To Make a Binding Ad-

ministrative Determination of the Right of a

Manufacturer To Continue To Market a

Drug Which Has Never Been the Subject of

a New Drug Application, by Withdrawing Its

Approval of a New Drug Application Cover-

ing a Different but Similar Drug .......... 54

C. Section 107(c) of the Drug Amendments

of 1962 Does Not Exempt a Drug Which Has

Been the Subject of a New Drug Application

From an Administrative Proceeding To

Withdraw Approval of That Application ... 61

IV. The FDA’s Statutory Authority To Withdraw a

New Drug Application Does Not Depend on a

Prior Determination That the Subject Drug Is

Not Generally Recognized as Safe and Effective 65

Re ED UPOONCIONT wigs a ona en ets 65

Bi he Tasne it UVnsen. 6. koe os een eens 67

Come 1a80e in ChB 6.ca5. oe se eters 73

DEO MBG ICUS | sees on te eta ss 75

CON CE UBION es er hn oe, Urner 17

Index Continued lii

APPENDIX: Page

The Proposed Procedures for Regulation of Over-the-

Counter Drugs ......................00000005.. la

A. The Purpose and Method of the Regulations 1a

B. The Procedure To Be Followed ............ 2a

C. The Standards To Be Employed ........... 3a

D. The Intended Legal Effect of Final Mono-

ROS ids occ es in sexdcaeddacuusances, 4a

CITATIONS

CasEs: Page

Abbott Laboratories, et al. vy. Gardner, 387 U.Si. 136

(1967) 2. cece ccc ccccccccccccsccacce 9, 23, 36, 38, 49

American Airlines v. Civil Aeronautics Board, 359 F.2d

624 (D.C. Cir. 1966) .................0.. 44, 45, 46, 47

AMP Incorporated v. Gardner, 389 F.2d 825 (2d Cir.

1968), certiorari denied, 393 U.S. 825 (1969) ... .24, 25

Associated Press v. Labor Board, 301 U.S. 103 (1937) 47

Bell v. Burson, 402 U.S. 535 (1971) ................. 49

Bentex Pharmaceuticals, Inc., et al. v. Richardson, 463

F.2d 363 (4th Cir. 1972) ................. 2, 22, 27, 74

Bi-Metallic Inv. Co. v. State Bd. of Equalization, 239

U.S. 441 (1915) 2... cece eee eee 46

Boston & M.R.R. v. United States, 162 F.Supp. 289 (D.

Mass. 1948) appeal dismissed, 358 U.S. 68 (1958) 29

Cafeteria & Restaurant Workers Union v. McElroy, 367

Mi gths OOO TEMG E oxo 5 oo 54Xs denen oeensds ck cawns 48

Caulder v. Durham Housing Authority, 433 F.2d 998

(4th Cir: 1970), certiorari denied, 401 U.S. 1003

05/1) ) a a ee eR 49

Chicago Board of Trade v. United States, 246 U.S. 231

CUBIS ons eine yces eee eee nues sv enssexe See ne ees 47

CIBA Corporation v. Richardson, 463 F.2d 225 (3d Cir.

cL! (4) a ae a ee 2572

CIBA-Geigy Corporation v. Richardson, 446 F.2d 466

COE Ss TOUT) og oa kc enn oa ean ne enn sacceeeees 36, 38 .

Denver Union Stock Yard Co. v. Producers Livestock

Marketing Association, 356 U.S. 282 (1958) ...... 47

Escalera v. New York Housing Authority, 425 F.2d 853

(2d Cir. 1970), certiorari denied, 400 U.S. 853

CTPIO) anew n cwun ane coweres ceeusesdeteusessies 49

Ewing v. Mytinger & Casselberry, Inc., 339 U.S. 594

CLOOO). 646455 seb anes eneea¥awasessneesssesseens 23, 27

Frozen Food Express v. United States, 351 U.S. 40

(O96) enc cheesy ensas ss GieasaNehasauns canes 30, 36

Goldberg v. Kelly, 397 U.S. 254 (1970) .............. 49

Gonzales v. United States, 348 U.S. 407 (1955) ...... 46, 47

Gonzalez v. Freeman, 118 U.S. App. D.C. 180, 334 F.2d

OO LI ICE) cg pees ys vs ners cours eewaees i eecdes 45

Citations Continued Vv

Hornsby v. Allen, 326 F.2d 605 (5th Cir. 1964) ...6... 46

Hynson, Westcott and Dunning, Inc. v. Richardson, 461

F.2d 215 (4th Cir. 1972) ......00000............. 2

Londoner v. City & County of Denver, 210 U.S. 373

0) Pr a 46

Ohio, 301 U.S. 292 (1937) ...................... 42

Pollack v. Simonson, 121 U.S. App. D.C. 362, 350 F.2d

740 (1965) 2... eee, 45

Powelton Civic Home Owners Assn. v. Dept. of Hous-

ing and Urban Development, 284 F.Supp. 809 (E.

D.Pa. 1968) 2.0... cece cece. 47

Red Lion Broadcasting Co. v. Federal Communications

Commission, 395 U.S. 367 (1969) ..... 022, 30

S.E.C. v. Frank, 388 F.2d 486 (2d Cir. 1968) 5 ....666%. 48

Superior Oil Co. v. F-P.C., 322 F.2d 601 (9th Cir. 1963),

certiorari denied, 377 U.S. 922 (1964) .......... 47, 6a

Thrope v. Housing Authority, 393 U.S. 268 (1969) .. 38

ine,’ 469 F.2d 875 (5th Cir. 1972) .............. 25

United States v. Article of Drug, etc., 415 F.2d 390 (Sth

Cir, 1969) .2. 0... lec cece cc eee. 5. 70.

United States v. Articles of Drug*** ““Quick-O-Ver,’’

274 F.Supp. 443 (D.Md. 1967) .................. 24

United States v. Kordel, 164 F.2d 913 (7th Cir. 1948),

aff'd, 335 U.S. 345 (1948) 2.00... 0. 24:

United States v. One Device, ***, 160 F.2d 194 (10th

Cir, 1947) 2... cece cece cece ce cecec ecu, 24

United States v. Schlicksup Drug Co., 206 F.Supp. 801

(S.D.Il. 1962) 2.0.2.0... er 24

United States v. 7 Cartons *** “*Ferro-Lac***,’’ 293

F.Supp. 660 (S.D.Tll. 1968) ..................... 24

U.S. Rubber Co. v. NLRB, 373 F.2d 602 (5th Cir. 1967)

46, 47, 48

USV Pharmaceutical Corporation v. Richardson, 461

F.2d 223 (4th Cir. 1972) .................... 2, 57, 63

vi Citations Continued

Page

Utica Mutual Ins. Co. v. Vincent, 375 F.2d 129 (2d Cir.

CPMOEY. vie renncedeesvacebiatsyebiawseecesesiews

995 (9th Cir. 1952) .......0000 00. 4

STATureEs:

Administrative Procedure Act :................. 45, 57, 58

5 U.S.C. $553 occ ccc ccc cece cece ceecs 44 57

5 U.S.C. §554 ............ Mereeucesoewee 29, 30, 31

5 U.S.C. § 554 (a) 2... eee eee 31

Dd U.S.C. §554(e) ......000 0. eee eee. 29, 30, 31

5 U.S.C. § 706 ........ 0. cece cece eee 6a

Declaratory Judgment Act, 28 U.S.C. §§ 2201, 2202

7 | ) SAE a gv NO 37

Drug Amendments of 1962, 76 Stat. 780 et seg. (1962)

iv, 5, 6, 7, 17, 50, 55,

60, 61, 68, 69, 72

Section 107(c) (21 U.S.C. § 321 note (1970)) . . 14, 50,

51, 52, 61, 62, 63, 64, 68

Section 107(c)(2) ....... 0 cece eee eee eee 5, 51, 64

Section\107(¢c)(3) 2.2.2.0... 7, 51, 52, 54, 63, 64, 68

Section 107(c)(4) ......... 3, 6, 10, 13, 15, 16, 18, 22,

51, 52, 54, 55, 56, 58, 63, 64, 75, 76, 78

Federal Food, Drug, and Cosmetic Act of 1938, 52

Stat. 1040 (1938), as amended, 21 U.S.C. §§ 301

et seq. (1970) ................. 3, 4, 5, 6, 10, 16, 20, 21,

22, 24, 34, 39, 50, 54

Section 201(p)

Section 301, 21 U.S.C. § 331 (1970) ............

—

we)

<>)

~—

—

ie}

oOo

~—

—"*

Section 301(a), 21 U.S.C. § 331(a) (1970) ...... 7

Section 301(d), 21 U.S.C. § 331(d) (1970) ...... 5

Section 302, 21 U.S.C. § 332 (1970) ..£......... 17

Section 302(a), 21 U.S.C. § 332(a) (1970) ...... 5,8

Section 303(a), 21 U.S.C. § 333(a) (1970) ...... 5,7

Section 304, 21 U.S.C. § 334 (1970 )........... 17, 23

Section 304(a), 2

Section 401, 21 U.S.C. § 341 (1970) ........... 39, 40

Citations Continued vii

Page

Section 403(g), 21 U.S.C. § 343(g) (1970) ...... 39

Section 403(h), 21 U.S.C. § 343(h) (1970) ...... 39

Section 403(j), 21 U.S.C. § 343(j) (1970) ...... 40

Section 404(a), 21 U.S.C. § 344(a) (1970) ...... 40

Section 406, 21 U.S.C. § 346(a) (1970) ....... 40, 41

Section 408, 21 U.S.C. § 346a (1970) .......... 1

j Section 409, 21 U.S.C. § 348 (1970) .....06......

Section 501(b), 21 U.S.C. on (1970) . 41

Section 502, 21 ie C. § 352 (1970) ........... 8, 59

Section 502(a), 2 he C. . $9(a) (1970) ..... 8

Section 502(d), 21 U.S.C. § 352(d) (1970) . 41

Section 502(f), 21 ‘USC. § 352(f) (1970) ..... . 8, 41

Section 502(h), 21 U.S.C. § 352(h) (1970) ..... 41

Section 502(j), 21 U.S.C. § 352(j) (1970) ..... 8

Section 503(b) (3), 21 U.S.C. § 353(b) (3) (1970). 39

Section 505, 21 U.S.C. § 355 (1970) ....5, 9, 50, 51, 59

Section 505(a), 21 U.S.C. § 355(a) (1970) paeees 74

Section 505(b), 21 U.S.C. § 355(b) (1970) ...... 8, 74

Section 505(c), 21 U.S.C. § 355(c) (1970) ...... 9

Section 505(d), 21 U.S.C. § 355(d) (1970) ..... 9, 68,

69, 70, 71

Section 505(e), 21 U.S.C. § 355(e) (1970) . 1

53, 61, 67, 68, 69, 72, 7

Section 505(h), 21 U.S.C. § 355(h) (1970) . 9

Section 701, 21 U.S.C. § 371 (1970) ............ 39

Section 701(a), 21 U.S.C. § 371(a) (1970) . 31, 33, 36

Section 701(e), 21 U.S.C. § rica (1970) .. 39, 40, 41

Section 701(f), 21 U.S.C. § 371(f) (1970) .. 40, 42, 43

Section 701(g), 21 U.S.C. § 371(g) (1970) ...... 40

Section 702, 21 U.S.C. § 372 (1970) (viene eeaess 17

Rules of Evidence for United States Courts and Magis-

WOME vos oe 4) 4a aenetin bes dv crcenecisscsess 47

Rules of the United States Supreme Court—Rule 42 . x

| REGULATIONS :

21 C.F.R. §2.120 0.0.0... oc ccc cece ee ece 4

21 C.F.R. § 130.40 0.0.0... 57, 58, 59

21 C.F.R. § 130.301 ..........0.......0005. 2a, 3a, 4a

34 Fed. Reg. 13674 2.0.0.0... 0c ce cece ee eee eee. 28

37 Fed. Reg. 8 ......... 0. ccc cece eee ceu eens la

37 Fed. Reg. 86 ......... 0... c cece eee e ee ecee 2a ‘

37 Fed. Reg. 88-89 ........... 0c cece eee eee eee 5a

om PLE OUORE REY PINE IIIIE ART CT TS aS Fe lly

viii Citations Continued

Page

37 Fed. Reg. 8475 .......... 0.0 cc cece eee e eee 3a

37 Fed. Reg. 9464.2... 0... 0. c cece cece eee es oli, 34

37 Fed. Reg. 9471 .........0...........05. 36, 38, 6a

37 Fed. Reg. 9472 .......... 0. cc cece cece ee 44, 5a, 7a

37 Fed. Reg. 9473 ......... 0... e cece eee 2a

37 Fed. Reg. 9474 ................ ieseaeus 2a, 3a, 4a

37 Fed. Reg. 9475 .... 0... cee ccc cece eeceee 3a

37 Fed. Reg. 23187 ....0.. ccc cc ccccccccccccccs 57

MISCELLANEOUS:

Attorney General’s Manual on the Administrative

Procedure Act, 1947 ............. cc cc cee ee eeee 29

Davis, Administrative Law Treatise § 7.02 (1958) .. .45, 46,

47, 49

Administrative Process, 55 Harv. L. Rev. 364

¢ MAD Bice us vie een ceeesee sea sccvdccnssenscs 45

Elman, A Note on Administrative Adjudication, 74

Yale L. J. 652 (1965) ........ 0... cece ee ee eee 38

H. R. Rep. No. 2139, 75th Cong., 3d Sess. (1938) 21, 39, 40,

41, 42

Shapiro, The Choice of Rule Making or Adjudication

in the Development of Administrative Policy, 78

Harv. L. Rev. 921 (1965) .................005.

S. Rep. No. 1744, Part 2, 87th Cong., 2d Sess. (1962)

52, 53, 55, 61, 68

2 Am. Jur. 2d, Administrative Law § 399 ............ 44

108 Cong. Rec. 17366-67 (1962) ................. 55, 56, 72

Supreme Court of the United States

OCTOBER TERM, 1972

No. 72-394

CASPAR W. WEINBERGER, ET AL., Petitioners

HYNSON, WESTCOTT AND DUNNING, INCORPORATED, Kespondent

On Writ of Certiorari to the United States Court of Appeals for the

Fourth Circuit

No. 72-414

HYNSON, WESTCOTT AND DUNNING, INCORPORATED, Petitioner

CASPAR W. WEINBERGER, ET AL., Respondents

On Writ of Certiorari to the United States Court of Appeals for the

Fourth Circuit

No. 72-528

CIBA CORPORATION, Petitioner

; ¥.

CASPAR W. WEINBERGER, ET AL., Respondents

On Writ of Certiorari to the United States Court of Appeals for the

Third Circuit

No. 72-555

CASPAR W. “ae ET AL., Petitioners

BENTEX PHARMACEUTICALS, INC., ET AL., Respondents

On Writ of Certiorari to the United States Court of Appeals for the

Fourth Circuit

No. 72-666

USV PHARMACEUTICAL CORPORATION, Petitioner

CASPAR W. WEINBERGER, ET AL., Respondents

On Writ of Certiorari to the United States Court of Appeals for the

Fourth Circuit

MOTION FOR LEAVE TO FILE BRIEF AMICUS CURIAE

ON BEHALF OF THE PROPRIETARY ASSOCIATION

PRR BER TN RP a Ne ae eT

The Proprietary Association, pursuant to Rule 42 of

the Rules of this Court, hereby respectfully moves

this Court for leave to file a brief amicus curiae in these

cases, treating the issues raised therein and opposing

the position of the Government petitioners in Wein-

berger v. Bentex Pharmaceuticals, Inc., et al., No. 79-

599 (hereafter “‘Bentex’’). Written consent for the

filing of such brief has been obtained from the Solicitor

General and from the attorneys for all parties involved

except Hynson, Westcott and Dunning, Incorporated,

whose attorneys have withheld consent.

Movant, The Proprietary Association, is a 92-vear-

old national trade association located at 1700 Pennsy]-

vania Avenue, N.W., Washington, D. C. 20006, whose

82 active member companies manufacture and distrib-

ute most of the Nation’s supply of proprietary ‘over-

the-counter”’ medicinal preparations (‘OTC drugs”).

OTC drugs are those which can be legally dispensed

without a prescription; ‘‘proprietary’’? OTC drugs are

those which are promoted and sold directly to the

public ; and ‘‘pharmaceutical”’ or ‘‘ethical’? OTC drugs

are those which are sold without prescription but pro-

moted only to members of the health professions.

These cases present the question, as stated in the

Government’s brief in Bentex: ‘‘Whether the Food

and Drug Administration has jurisdiction to determine

initially whether a product is a ‘new drug’ which must

be administratively approved as safe and effective be

fore it can be sold in commerce.”’ Brief for Petitioners,

Weinberger v. Bentexr Pharmaceuticals, Inc., et al., No.

72-555, p. 2. Others of the cases here consolidated in-

volve related questions.

The Court’s decision on these issues will so substan-

tially and directly affect Movant’s members in the con-

aa Se ORR RA PPS AKA er ROR IEE 0 AGAR RN Meee ks Pt RT BIS

duct of their business of manufacturing and distrib-

uting OTC drugs as to justify the Court’s granting

leave to file a brief amicus curiae.

Moreover, in its brief in Bentez, the Government

refers to the Food and Drug Administration’s current

regulatory program for the review of OTC drugs. It

describes this program adopted in May 1972 (37 Fed.

Reg. 9464) as follows:

‘*...a procedure for determining in substantive

rule making, by therapeutic class, whether par-

ticular OTC products not covered by NDAs are

generally recognized as safe and effective and not

misbranded, under the standards of the Act. The

procedure involves the establishment of independ-

ent expert panels for different categories of OTC

drugs (e.g., antacids, laxatives, analgesics), which

would review all available data (including any that

manufacturers, consumer groups, or others wish

to submit) and prepare monographs prescribing

drug composition, labeling, and manufacturing

controls. Products conforming to the monograph-

rule will not be considered to be ‘new drugs’ re-

ae an NDA or to be misbranded.”’ Jd. at pp.

24-25.

By formal comments filed with the Commissioner of

Food and Drugs on March 4, 1972, The Proprietary

Association objected to the above-described program

as later adopted in May 1972. It was and continues

to be the position of The Proprietary Association that

the FDA does not have statutory authority to issue

substantive regulations, having the force of law, as con-

templated in the OTC review program. During the

time since the adoption of the program The Propri-

etary Association has co-operated fully in the scientific

review, but has carefully preserved its right to con-

~ 1 EN St Dae kegs pans

xii

test in an appropriate judicia} proceeding the legality

of the FDA’s issuance of a final monograph as a bind-

ing regulation.

The Government now apparently seeks, through its

brief in No. 72-555, to obtain a premature review by

this Court of the validity of its OTC regulations. Its

brief includes the following comments:

‘Moreover, the implications of the decision below

extend beyond the area of prescription drugs in-

volved in the present case. The agency’s current

program to review the over-the-counter drugs (see

pp. 24-25, supra) would also be undermined by the

court of appeals’ rationale, since the agency would

have no power to determine definitively, subject to

judicial review, standards by which hundreds of

thousands of drugs for which no NDA is in effect

may be classified as ‘new drugs’ or not. The agency

would be required to pursue these products

throughout the courts of the Nation in innumer-

able trials considering de novo issues that are

best suited to administrative resolution and that

may, indeed, already have been given careful con-

sideration in administrative proceedings. The de-

cision of the court of appeals would thus leave

the agency virtually impotent to deal effectively

with the vast task of implementing the 1962 amend-

ments.’’ Jd. at pp. 36-37.

The Government’s effort to bring before the Court

its current regulatory effort regarding OTC drugs pro-

vides a controlling reason for the Court to grant

The Proprietary Association leave to file an amicus

brief. The Government raises matters which go far

beyond the individual interests of the parties now be-

fore the Court in these cases. Those parties will nec-

essarily concentrate on the particular facts and issues

in their individual cases. We believe that a brief amicus

curtae on behalf of The Proprietary Association can

assist the Court in resolving the issues now before it

and contribute to a more thorough understanding of

the profound impact which these decisions will have on

both the prescription and the proprietary industries.

THomas D. Finney, Jr.

JOHN F. Kovin

THoMas RicHaRD SPRADLIN

815 Connecticut Avenue

Washington, D.C. 20006

DaniEL F. O’KEere, JR.

1700 Pennsylvania Avenue

Washington, D.C. 20006

Of Counsel:

CLIFFORD, WARNKE, GLass,

McIiwalin & FINNEY

Washington, D.C.

April 3, 1973

eta MPN St RC RBM AI ROE RL Dye ES eT Be seve ois

rn MR ne, Re Ra RIES

Supreme Court of the United States

OCTOBER TERM, 1972

No. 72-394

CASPAR W. WEINBERGER, ET AL., Petitioners

HYNSON, WESTCOTT AND DUNNING, INCORPORATED, Respondent

On Writ of Certiorari to the United States Court of Appeals for the

Fourth Circuit

No. 72-414

HYNSON, WESTCOTT AND DUNNING, INCORPORATED, Petitioner

CASPAR W. WEINBERGER, ET AlL., Respondents

On Writ of Certiorari to the United States Court of Appeals for the

- Fourth Circuit

No. 72-528

CIBA CORPORATION, Petitioner

CASPAR W. WEINBERGER, ET AL., Respondents

On Writ of Certiorari to the United States Court of Appeals for the

Third Circuit

No. 72-555

CASPAR W. WEINBERGER, ET AL., Petitioners

BENTEX PHARMACEUTICALS, INC., ET AL., Respondents

On Writ of Certiorari to the United States Court of Appeals for the

Fourth Circuit

No. 72-666

USV PHARMACEUTICAL CORPORATION, Petitioner

CASPAR W. WEINBERGER, ET AL., Respondents

On Writ of Certiorari to the United States Court of Appeals for the

Fourth Circuit

BRIEF AMICUS CURIAE ON BEHALF OF

THE PROPRIETARY ASSOCIATION

OPINIONS BELOW

In No. 72-394, Weinberger v. Hynson, Westcott and

Dunning, Incorporated, and No. 72-414, Hynson, West-

cott and Dunning, Incorporated v. Weinberger (here-

after ‘‘Hynson’’), the opinion of the Court of Appeals,

captioned Hynson, Westcott and Dunning, Inc. y,

Richardson, is reported at 461 F.2d 215 (4th Cir. 1972),

Joint App. 258-270. The opinion of the District Court

is not officially reported. Joint App. 251-258.

In No. 72-528, CIBA Corporation v. Weinberger

(hereafter “‘CIBA’’), the opinion of the Court of Ap-

peals, captioned CIBA Corporation v. Richardson, is

reported at 463 F.2d 225 (3d Cir. 1972)., Joint App.

215-216. The opinion of the District Court was de.

livered orally and not reported. Joint App. 208-214.

In No. 72-555, Weinberger v. Bentexz Pharmaceuti-

cals, Inc., et al. (hereafter ‘‘ Bentex’’), the opinion of

the Court of Appeals, captioned Bentex Pharmaceuti-

cals, Inc., et al. v. Richardson, is reported at 463 F.2d

363 (4th Cir. 1972). Joint App. 258-270. The opin-

ion of the District Court is not officially reported.

Joint App. 251-258.

In No. 72-666, USV Pharmaceutical Corporation v.

Weinberger (hereafter ‘‘USV’’), the opinion of the

Court of Appeals, captioned USV Pharmaceutical Cor-

poration v. Richardson, is reported at 461 F.2d 223

(4th Cir. 1972). Joint App. 466-473. The opinion

of the District Court is not officially reported, but is

reprinted at CCH Food Drug Cos. L. Rep. 1 40-489.

Joint App. 463-466.

: BF FIO EPP Pen patents SSO I OLE IBS IPE LC A he EE ER ELLE AB PEG TO LE

_ QUESTIONS PRESENTED

Four basic questions are presented by these con-

solidated cases, one of which involves subsidiary ques-

tions which it may be helpful to state explicitly:

(1) Does the Food and Drug Administration

(‘the FDA’’) have statutory authority to make

a legally binding determination as to whether a

drug which has never been the subject of a New

Drug Application (‘‘NDA’’) is a ‘‘new drug,’’ as

that term is defined in the Federal Food, Drug,

and Cosmetic Act? (Bentezx)

(2) Does Section 107(¢) (4) of the Drug Amend-

ments of 1962 give the FDA indirect authority

to make a binding administrative determination

of the right of a manufacturer to continue to mar-

ket a drug which has never been the subject of a

New Drug Application, by withdrawing its ap-

proval of a New Drug Application covering a

different but similar drug? (Bentex and USV)

(3) Does Section 107(c) of the Drug Amend-

ments of 1962 exempt a drug from administrative

proceedings to withdraw approval of the NDA

covering such drug? (Hynson)

(4) If a drug which was once a ‘‘new drug’”’

and was originally marketed pursuant to an NDA

becomes ‘‘generally recognized as safe and effec-

tive,’? does it cease to be a ‘‘new drug’’ as de-

fined in the Act? (Hynson and CIBA) If so, two

subsidiary questions are presented :

(A) Does general recognition of a drug’s

safety and effectiveness terminate the FDA’s au-

PES. SOOPER Or ay ah Re RR ge, MRS in REE Ft

thority to withdraw its prior approval of the NDA

covering that drug? (Hynson)

(B) After the FDA has issued a final order

withdrawing its prior approval of an NDA, can

the manufacturer continue to market the drug,

if it is ‘‘generally recognized as safe and effee.

tive’? (CIBA)

STATEMENT

I. The Relevant Statutory Provisions

A. The “New Drug” Provisions

The Federal Food, Drug, and Cosmetic Act of 1938

(‘‘the Act’’) replaced the Food and Drugs Act of 1906.

A major change made by the 1938 Act was to require

pre-marketing clearance by the FDA.’ However, such

pre-clearance was made applicable only to a ‘‘new

drug,’’ and the FDA’s authority was originally limited

to a determination of safety. Prior to its amendment in

1962 the Act prohibited the introduction into interstate

commerce of any new drug unless an application was

‘effective with respect to such drug.’’ It provided

that such application would ‘‘become effective” on

the 60th day after it was filed unless the FDA issued

a notice postponing the effective date for up to 180

days or issued ‘‘an order refusing to permit the appli-

1 The authority and responsibility under the 1906 and 1938 Acts

were originally vested in the Secretary of Agriculture. The fune-

tions of the Secretary of Agriculture under the Act were assigned

to the Food and Drug Administration, which was transferred in

1940 to the Federal Security Agency, and in 1953 to the Depart-

ment of Health, Education, and Welfare. While the Act speaks in

terms of ‘‘the Secretary,’’ the Secretary of the latter department

has delegated his authority under the Act to the Commissioner of

Food and Drugs. 21 C.F.R. § 2.120; 21 U.S.C. § 321 note (1970).

We use ‘‘the Commissioner’’ and ‘‘the FDA’’ as synonymous

terms.

—

eation to become effective.’’ § 505 of the Federal Food,

Drug, and Cosmetic Act of 1938, 52 Stat. 1052; Joint

App. 483-484.

The Act was amended in 1962 to require the FDA to

determine that a ‘‘new drug”’ is effective as well as

safe, and to require an NDA to be affirmatively ap-

proved rather than ‘‘becoming effective’’ unless re-

fused.?, The Act prohibits the introduction into inter-

state commerce of any ‘‘new drug’’ unless the FDA has

approved an NDA filed pursuant to the Act. §§ 301(d)

and 505, 21 U.S.C. §§ 331(d) and 355. A violation of i

this provision carries criminal penalties of imprison- i

ment for not more than one year or a fine of not more

than $1,000, or both. §303(a), 21 U.S.C. § 333(a).

Such violations may be restrained in an action brought

in any U.S. District Court, and a drug introduced into

interstate commerce in violation of Section 505 may be

seized and condemned in an action filed in the U.S. Dis-

trict Court for the district where such drug is found.

§§ 302(a) and 304(a), 21 U.S.C. §§ 332(a) and 334(a).

Section 201(p) defines the term ‘‘new drug’”’ to

mean: ‘‘Any drug... the composition of which is

such that such drug is not generally recognized, among

experts qualified by scientific training and experience

to evaluate the safety and effectiveness of drugs, as

safe and effective for use under the conditions pre-

scribed, recommended, or suggested in the labeling

thereof ...,’’ and ‘‘which has not .. . been used to a

material extent or for a material time....’’ 21 U.S.C.

;

CEN

2 Section 107(c) (2) of the 1962 Amendments provides that a New

Drug Application which was ‘‘effective’’ under the 1938 Act on £

the enactment date of the amendments shall be deemed to be an 5

application ‘‘approved’’ under the Act as amended. Public Law

87-781, 76 Stat. 788-789, 21 U.S.C. § 321 note (1970) ; Joint App.

481-482.

PNR NG ESCs

§ 321(p). The words in italics were added by the 1962

Amendments. In essence, as relevant to the issues pre-

sented in these cases, if a drug is ‘‘generally recog.

nized ... as safe and effective,”’ it is not a ‘‘new drug”

and the provisions of the statute requiring FDA clear.

ance of ‘‘new drugs’’ do not apply.

However, certain drugs even if not generally recog.

nized as both safe and effective are still not ‘“‘new

drugs,’’ because of the ‘‘grandfather’”’ provisions con-

tained in the original Act and in the 1962 Amendments, }

Section 201(p)(1) provides further that ‘‘a drug

not so recognized [as safe and effective] shall not be

deemed to be a ‘new drug’ if at any time prior to the

enactment of this Act [on June 25, 1938] it was subject

to the Food and Drugs Act of June 30, 1906, as

amended, and if at such time [i.e., before June 25,

1938] its labeling contained the same representations

concerning the conditions of its use... .’’ Further-

more, a drug which is not generally recognized as effec-

tive is not a ‘‘new drug”’ if on the day immediately pre-

ceding the date of enactment of the 1962 Amendments,

October 9, 1962, it (A) was commercially used or sold -

in the United States, (B) was not a new drug as de-

fined by the Act as then in force, 1.e., was generally ree-

ognized as safe, and (C) was not covered by an effec-

' tive New Drug Application—‘‘when intended solely for

use under conditions prescribed, recommended, or sug-

gested in labeling with respect to such drug’’ on Oc-

tober 9, 1962. The 1962 Amendments provided that the

amended definition of a ‘‘new drug,’’ requiring ‘that

a drug be generally recognized as effective to avoid

‘‘new drug”’ status, should not apply to a drug meeting

the foregoing requirements, §107(c)(4) of P.L. 87-

781, 76 Stat. 788, 21 U.S.C. § 321 note; Joint App. 482.

Thus, three categories of drugs are not ‘“‘new drugs’’

and therefore may be marketed without prior clearance

and approval by the FDA:

(1) a pre-1938 drug, the labeling of which still

contains the same representations concerning

its use; and

(2) a pre-1962 drug which was generally recog-

nized as safe and not covered by an effective

NDA in 1962, the labeling of which still con-

tains the same representations concerning its

USE ;

(3) a drug which is generally recognized as safe

and effective after it has been used to a ma-

terial extent or for a material length of time.

It should be noted that in each case whether a drug

fits one of these three excluded categories involves ques-

tions of fact with respect to the particular drug.’

B. The “Misbranding” Provisions

The Act likewise prohibits the introduction or de-

livery for introduction into interstate commerce of any

drug that is ‘‘misbranded.”’ § 301(a), 21 U.S.C. § 331

(a). A violation of this provision also carries crimi-

nal penalties of imprisonment for not more than

one year or a fine of $1,000, or both. § 303(a), 21 U.S.C.

§333(a). Such violation may be restrained in an ac-

tion brought in any U.S. District Court, and a mis-

branded drug which is introduced into interstate com-

*Under a separate paragraph of the ‘‘grandfather’’ clause in

the 1962 Amendments, ‘‘new drugs’’ for which an NDA was

‘effective’? on the enactment date of the amendments were

granted a two-year moratorium from withdrawal of approval of

the NDA under § 505(e) for lack of effectiveness. § 107(c) (3) of

P.L, 87-781, 76 Stat. 788, 21 U.S.C. § 321 note; Joint App. 481.

Vii

PLOT TU RAMEE i Tareray nits a

merce or held for sale after interstate shipment may

be seized and condemned in an action filed in the U.S,

District Court for any district where such drug ig

found. §§302(a) and 304(a), 21 U.S.C. §§ 332(a)

and 334(a).

Section 502 provides that a drug shall be deemed to

be ‘‘misbranded’’ (1) if its labeling is false or mis.

leading (§502(a)), (2) if its labeling does not bear

adequate directions for use and adequate warnings as

are necessary for the protection of the user (§ 502(f)),

or (3) if it is dangerous to health when used in the

dosage, with the frequency, or for the duration recom.

mended in the labeling (§ 502(j))—as well as under

a number of other circumstances not relevant here,

21 U.S.C. § 352. ‘It should again be noted that whether

a drug is misbranded depends upon factual questions

with respect to the truth and adequacy of the labeling

of the particular drug.

The statutory sanctions against misbranded drugs

are applicable by their terms to any ‘‘drug,’’ and make

no distinction as to whether the drug involved is a

pre-1938 drug, a pre-1962 drug which is generally ree-

ognized as safe, a drug which is generally recognized

as safe and effective, or a ‘‘new drug.” However, as

discussed infra, pp. 60-61, there are alternative admin-

istrative sanctions available to deal with false and mis-

leading labeling of an NDA’ed drug.

C. Enforcement of the Statutory Provisions ~

The Act clearly contemplates and authorizes admin-

istrative enforcement of its provisions with respect toa

“new drug’’ upon the filing of a New Drug” Applica-

tion. Section 505(b), 21 U.S.C. § 355(b), provides that

an application to market a ‘‘new drug’’ shall be filed

_ ll

AO SPR =

with the Secretary (by delegation, the Commissioner

of Food and Drugs), and specifies the nature of the

data which must be submitted. Section 505(d), 21

U.S.C. § 355(d), enumerates the grounds upon which

the Secretary shall disapprove such application, while

Section 505(¢), 21 U.S.C. § 355(c), commands that if

none of such grounds exist he shall approve the appli-

cation. Section 505(d), 21 U.S.C. §355(d), requires

that the applicant be given an opportunity for

‘a hearing and authorizes the Secretary to determine

whether the data submitted includes adequate tests

to establish the drug’s safety, whether the results of

such tests show that the drug is safe, whether the pro-

posed methods of manufacture are adequate, whether

the drug will have the effect it purports or is rep-

resented to have, and whether the labeling proposed

is false or misleading in any particular. Simi-

larly, Section 505(e), 21 U.S.C. §355(e), author-

izes the Secretary to make such determinations after

notice and opportunity for hearing if he proposes

to withdraw approval of an application previously

granted. Section 505(h), 21 U.S.C. § 355(h), authorizes

the applicant to appeal to a United States Court of

Appeals from orders of the Secretary refusing or with-

_ drawing approval of an application, and provides that

the finding of the Secretary as to the facts, if sup-

ported by substantial evidence, shall be conclusive.

Thus, ‘‘the agency does have direct authority to en-

force [a] regulation in the context of passing upon ap-

plications for clearance of new drugs, § 505, 21 U.S.C.

§355....’? Abbott Laboratories, et al. v. Gardner, 387

U.S. 136, 152 (1967). However, no provision of the

Act gives the FDA comparable direct regulatory au-

thority to make a binding determination as to

whether a drug is ‘‘generally recognized as safe and

effective.”’

a VOLE VN GONG PERL LA EIN AEE SULTS BERS

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