818 F.2d 879 (D.C. Cir. 1987), 82-2365, Cutler v. Hayes

Docket Nº:82-2365.
Citation:818 F.2d 879
Party Name:Mimi CUTLER, Stephen D. Annand and National Council of Senior Citizens, Appellants, v. Dr. Arthur Hull HAYES, Jr., et al.
Case Date:May 05, 1987
Court:United States Courts of Appeals, Court of Appeals for the District of Columbia Circuit

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818 F.2d 879 (D.C. Cir. 1987)

Mimi CUTLER, Stephen D. Annand and National Council of

Senior Citizens, Appellants,


Dr. Arthur Hull HAYES, Jr., et al.

No. 82-2365.

United States Court of Appeals, District of Columbia Circuit

May 5, 1987

Argued June 7, 1983.

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Appeal from the United States District Court for the District of Columbia (Civil Action No. 81-02092).

William B. Schultz, with whom Katherine A. Meyer and Alan B. Morrison, Washington, D.C., were on the brief, for appellants.

Neil R. Ellis, Atty., Dept. of Justice, with whom William F. Baxter, Asst. Atty. Gen., Dept. of Justice, Robert B. Nicholson, Atty., Dept. of Justice, Washington, D.C., Thomas Scarlett, Chief Counsel, and Kenneth C. Baumgartner, Associate Chief Counsel, Food and Drug Admin., Rockville, Md., and Jeffrey N. Gibbs, Sp. Asst. U.S. Atty., Washington, D.C., were on the brief, for appellees.

Robert A. Altman, with whom J. Griffin Lesher, Bryan Jay Yolles, Daniel F. O'Keefe, Jr., and Gregory M. Fisher, Washington, D.C., were on the brief, for appellee/cross appellant The Proprietary Ass'n, Inc.

Before ROBINSON and SCALIA [*], Circuit Judges, and WRIGHT, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge SPOTTSWOOD W. ROBINSON, III.


This case presents a challenge by consumers of over-the-counter (OTC) drugs to the program undertaken by the Food and Drug Administration (FDA) comprehensively to review these drugs for their safety and effectiveness. The consumers allege (1) that the regulations implementing this program violate the Food, Drug and Cosmetic Act of 1938 (FDC Act), 1 as amended by the Drug Amendments of 1962, 2 pursuant to which they were promulgated; (2) that FDA's policy of nonenforcement of the efficacy requirement for marketing over-the-counter drugs in interstate commerce violates the agency's statutory duty; and (3) that FDA's lack of progress in completing the review program and the unlikelihood that the review will be completed in the near future infringes the provisions of the Administrative Procedure Act 3 disapproving unreasonable agency delay. The District Court granted appellees' motion for summary judgment on all counts. While we affirm the District Court's judgment on appellants' first two claims, we vacate the judgment on the charge of unreasonable delay and remand the case to the District Court for reconsideration in accordance with this opinion.


The FDC Act prohibits the marketing of "new drugs" without premarketing approval by FDA of a new drug application (NDA). 4 The FDC Act as originally

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adopted by Congress classified "new drugs" as those not generally recognized by experts as safe for their intended use (GRAS). 5 In 1962, Congress amended the definition of "new drugs" 6 to include all drugs "not generally recognized among experts ... as safe and effective for use [GRAS/E] under the conditions prescribed, recommended, or suggested in the labeling thereof." 7 Drugs first marketed before 1938 were exempted from both the safety and efficacy requirements of the Act provided that they were not subsequently relabeled. 8 Similarly, drugs marketed between 1938 and 1962 as GRAS, and thus without an NDA, were exempted from the newly-imposed efficacy requirement as long as the conditions for use suggested by the labeling remained unchanged. 9

The 1962 amendments specified that after a two-year transition period, 10 all "new drugs" marketed under an approved NDA would be subject to the effectiveness requirement, and directed the FDA to withdraw approval, after due notice and an opportunity for a hearing, of all NDAs for drugs that failed to satisfy both the safety and efficacy requirements. 11 To support a finding of effectiveness, Congress required substantial evidence to demonstrate that a drug actually produces its claimed effect. 12 The efficacy requirement became operative immediately for drugs not classified as "new drugs." 13 For such drugs to be classified as GRAS/E, there must be an "expert consensus ... founded upon 'substantial evidence' " of the drug's effectiveness 14 and safety. 15

In 1966, FDA began its effort to ensure compliance with the new requirements of the FDC Act by initiating its Drug Efficacy Study Implementation (DESI) review to determine whether all "new drugs"--those marketed pursuant to an approved NDA--satisfied the Act's efficacy requirement. 16 The vast majority of the products examined in this study were prescription drugs, sold only under the direction of a physician. 17

In 1972, upon completion of this review, 18 FDA turned its attention to pharmaceuticals

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marketed under the Act's GRAS/E exemption, which include primarily over-the-counter drugs, 19 readily accessible to all consumers for use without medical supervision. A drug efficacy study undertaken by the National Academy of Science-National Research Council (NAS-NRC) had concluded, after reviewing 420 drugs broadly representative of the OTC market, that only one-fourth of the drugs reviewed were actually effective. 20 In response, FDA began a comprehensive review of all OTC drugs to determine whether they were properly marketable under the GRAS/E exemption. 21 Instead of evaluating each of the hundreds of thousands of those drugs 22 individually, however, FDA classified the medications according to their comparatively few active ingredients, 23 and directed the OTC drug review to be conducted in four phases. First, advisory review panels of qualified experts are appointed to analyze existing test data and make recommendations in the form of monographs establishing the conditions under which each OTC drug could be marketed without an NDA. 24 In Phase II, FDA reviews these monographs and publishes them in the Federal Register for public comment on the safety and effectiveness of the products under examination. 25 The third stage of the program obligates FDA to review comments, to publish a tentative final monograph, and to offer the public the opportunity to object formally, either in writing or at a hearing, to the findings made with respect to individual drugs. 26 In the fourth and final part of the OTC review, FDA promulgates a final monograph containing the agency's conclusive and legally binding determinations on the conditions under which a drug is considered GRAS/E. 27

The regulations call upon the agency to categorize products into three groups: Category I, covering drugs recognized as safe and effective and establishing the conditions under which they may be marketed; 28 Category II, including all ingredients, labeling claims and other conditions that would result in a drug's being not generally recognized as safe and effective; 29 and Category III, including ingredients for which available data are insufficient to justify classification in either of the other groups. 30 As originally promulgated by FDA, the regulations authorized the marketing of any Category III drug after publication of the final monograph provided the manufacturer engaged in additional testing. 31 The District Court for the District of Columbia, however, struck down

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this provision, holding that it directly contravened the FDC Act by sanctioning for an indefinite period the marketing of drugs that were unable to satisfy the GRAS/E requirements. 32 In response to this decision, FDA amended its regulations to their present form, eliminating the post-final monograph marketing authorization for Category III drugs, 33 but adding a twelve-month period following publication of the tentative final monograph in which the administrative record is kept open for receipt of new information regarding the safety and effectiveness of drugs tentatively placed in Category III. 34

The OTC drug review has progressed sluggishly at best since its inception in 1972. The District Court found that FDA had completed Phase I of its OTC review. 35 Phase II was scheduled for completion by the end of 1983, 36 but because of FDA's policy requiring completion of each phase before proceeding to the next stage of review, 37 the vast majority of the tentative final monographs and final monographs to be produced are yet to be completed 38 and are not expected to be forthcoming for some time. 39


Appellants Mimi Cutler and Stephen Annand, 40 consumers of over-the-counter drugs, challenge both the legality of the regulations governing the OTC drug review and the progress of that program as implemented. 41 They argued unsuccessfully before the District Court and again argue on appeal (1) that FDA's failure to complete the OTC review more than 10 years after it was initiated, and over 20 years after the efficacy requirement was added to the FDC Act, constitutes agency action unreasonably delayed contrarily to

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Sections 6 42 and 10(c) 43 of the Administrative Procedure Act; 44 (2) that FDA's failure to complete the OTC review, when coupled with its unwillingness to bring enforcement actions against marketers of inefficacious drugs, violates the FDC Act, 45 which imposes upon FDA a duty judicially enforceable; 46 and (3) that the regulations implementing the OTC review program are inconsistent with the Act because they create an interim testing period after publication of the tentative final monograph, which, by postponing promulgation of the final monograph, protects drugs not generally recognized as safe and effective. 47

The District Court denied the motion of intervenor-defendant The Proprietary Association, Inc. (PA) to dismiss for lack of standing to sue 48 and for failure to exhaust...

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