Bentex Pharmaceuticals, Inc. v. Richardson

Decision Date23 May 1972
Docket NumberNo. 71-1243.,71-1243.
Citation463 F.2d 363
PartiesBENTEX PHARMACEUTICALS, INC., et al., Appellants, v. Elliot P. RICHARDSON, Secretary of the Department of Health, Education and Welfare and Charles C. Edwards, Commissioner of the Food and Drug Administration, Appellees.
CourtU.S. Court of Appeals — Fourth Circuit

COPYRIGHT MATERIAL OMITTED

George F. Townes, Greenville, S. C. (Sol E. Abrams, Greenville, S. C., on brief), for appellants.

Charles R. McConachie, Atty., Dept. of Justice (Will Wilson, Asst. Atty. Gen., John L. Murphy, Chief, Administrative Regulations Section, William W. Goodrich, Asst. Gen. Counsel, Food, Drugs, and Environmental Health Div., Robert N. Anderson, Atty., U. S. Dept. of Health, Education and Welfare, and Howard S. Epstein, Atty., Dept. of Justice, on brief), for appellees.

Before WINTER, RUSSELL and FIELD, Circuit Judges.

RUSSELL, Circuit Judge:

This appeal turns on a construction of the Federal Food, Drug, and Cosmetic Act of 1938, as amended in 1962.1 21 U.S.C. § 301 et seq. This statute requires premarketing approval and clearance of any "new drug" by the Secretary of Health, Education and Welfare.2 The term "new drug" is defined as one "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 prescribed, recommended, or suggested in the labeling thereof * * *."3 From a denial of a pre-marketing approval or a withdrawal of a previously given approval, an appeal, originally to the District Court, now to the Circuit Court of Appeals, is authorized.4 Drugs, which do not fit the definition of a "new drug" do not require FDA clearance for marketing. There is no provision in the Act for administrative determination whether a particular drug is a "new drug" nor for any right of appeal from any such determination. The FDA sometimes offers to render "informal advice" as to whether it considers a product a "new drug" but it uniformly designates such opinion "advice".5 Accordingly, the responsibility for determining whether its product is a "new drug" requiring premarketing clearance by FDA, rests on the manufacturer, who must act at its peril.6 If it makes an incorrect determination and seeks to market without FDA clearance a drug meeting the definition of a "new drug", it lays itself open to drastic judicial procedures that may be invoked by FDA, i.e.: The product may be seized in an in rem action instituted by the Government;7 its sale may be enjoined in an action begun by the Government;8 in addition, the manufacturer may be subjected to criminal action.9 All these remedies must be prosecuted in the District Court and the role of the Secretary is that of plaintiff or prosecutor. The Act thus establishes two forums for the regulation of drugs: One is administrative and deals with the procedures for securing pre-marketing clearances for the statutorily defined "new drug", with right of appeal from a denial of approval, or withdrawal of a previous approval, to the District Court, later changed to the Court of Appeals; the other is judicial and is intended to make effective and give strength to the requirement that "new drugs" be cleared as safe before marketing by providing the Government with certain potent judicial remedies, available exclusively in the District Court.

Under the 1938 Act, a new drug was one "not generally recognized, among experts * * * as safe for use." The Amendments added "effectiveness" as well as "safety" to the definition. Simply stated, the change effected by the Amendments was that, whereas prior to the 1962 Amendments a drug which was generally recognized as safe was not a "new drug", the Amendments defined a drug as "new" if it were not generally recognized as both safe and effective. Furthermore, they replaced the provision for automatic approvals of applications not disapproved within a fixed time with a requirement of a positive act of approval on the part of FDA.10 They proceeded to provide that the Secretary must find as a basis for clearance of a new drug not only safety but "substantial evidence" of effectiveness, "consisting of adequate and well-controlled investigations, including clinical investigations, by experts qualified by scientific training and experience to evaluate the effectiveness of the drug involved." The applicability of these amendments, including the revised definition of "new drug" to drugs already marketed, either under previously issued NDAs, or as "old drugs" requiring no FDA approval, was carefully spelt out in the Amendments and certain "grandfather rights" were granted. For all previously NDA'd drugs, the Amendments conferred a grace period of two years after the effective date of the Amendments within which to prepare evidence to satisfy the new requirement of efficacy added by the revised definition of "new drug"; during that "transitional" period no revocation or withdrawal of approval because of a lack of substantial evidence of efficacy of such drugs was permitted.11 For a drug, however, which on the day prior to the enactment of the Amendments was (1) being "commercially used or sold in the United States," (2) "was not a new drug as defined by" the pre-Amendment statute and (3) "was not covered by an effective (new drug application), * * *" "on the day immediately preceding the enactment date" of the Amendments, there was a permanent exemption from the efficacy provisions of the Amendments so long as the drug's labeling remained the same.12 In summary, these provisions required that, "Those drugs which had obtained effective NDAs must be proven efficacious after two years; those which had not need never be proven efficacious so long as they had become safe prior to the 1962 Amendments."13

The "grandfather clause" set forth in Section 107(c)(4) simply continues for the products satisfying its criteria the pre-1962 definition of a "new drug". Its effect is to assure that a drug which was generally recognized by qualified experts as safe for the purposes recommended for its use on October 9, 1962, need not be NDA'd as effective under the new requirements for the issuance of an NDA as a "new drug". But any drug, whether requiring an NDA or not, whether a "new drug" or an "old drug", is subject to the misbranding provisions of the Act and may be proceeded against on that basis. A false claim of either safety or effectiveness constitutes misbranding, rendering a drug subject to both civil and criminal penalties. United States v. Article of Drug Labeled Decholin (D.C.Mich. 1967) 264 F. Supp. 473, 482-483; United States v. Lanpar Company (D.C.Tex. 1968) 293 F. Supp. 147, 153-154.14 Accordingly, in United States v. Guardian Chemical Corporation (2d Cir. 1969), 410 F.2d 157, a drug manufacturer was acquitted of a charge of marketing a "new drug" without securing an NDA, but was convicted under a separate count of the indictment charging misbranding. "Thus", as one commentator has aptly stated, "the amplications of the FDA's authority (as granted by the 1962 Amendments) is (was) not due to the absence of power to proceed against ineffective drugs, but rather to authorize the exercise of that power at the initial stage, that is, before marketing, and also to shift the burden of proof to the applicant." Jurow, The Effect on the Pharmaceutical Industry of the "Effectiveness" Provisions of the 1962 Drug Amendments, 19 Food, Drug, Cosmetic Law Journal, 110, at p. 116 (1964).15

The plaintiffs, manufacturers of a prescription drug containing pentylenetetrazol and nicotinic acid, claim the protection of the "grandfather clause" included in Section 107(c)(4) for their products and that contention represents the substantive issue in this case. It is undisputed that plaintiffs had marketed their product commercially for many years prior to and on October 9, 1962,16 without an NDA under the claim that it was not a "new drug" within the definition of the Act, and therefore required no NDA. Such claim was supported, it is asserted, both by previous informal advice of the Secretary and by the general recognition of the safety of such product by "experts qualified by scientific training and experience" to make such evaluation. The defendants, the Secretary of HEW and the Commissioner of Food and Drugs, in their brief, concede that "Over the years since 1938" and until 1968, the Food and Drug Administration had given the opinion that certain pentylenetetrazol combinations similar to those of the appellants were not "new drugs."17 Moreover, the District Court observed in its opinion that there was "no contention (by the FDA) that the use of the plaintiffs' drugs in treatment of the symptoms of senility in geriatric patients is in any way harmful to them, either directly or indirectly by causing the disuse of better drugs." On this basis, the plaintiffs contended that they met exactly the criteria established for exemption from the requirements of general recognition by qualified experts of the effectiveness of their products as provided in the permanent grandfather section of the 1962 Amendments.

Prior to the filing of this action, however, the defendants withdrew their advice that products such as those distributed by the plaintiffs were "old drugs" and contended that such products did not qualify for exemption under the "grandfather clause", Section 107(c)(4). The basis for this contention was the claim (1) that these drugs were not generally recognized by qualified experts as safe as of the effective date of the Amendments of 1962 and (2) that they were "me-too" drugs, whose marketability without FDA clearance depended in turn on the NDA's granted the basic drug, and for that reason must be regarded as drugs covered by an effective NDA on the effective date of the Amendments.18 Faced with this threat, the plaintiffs began this action for a declaratory judgment...

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