John D. Copanos and Sons, Inc. v. Food and Drug Admin.

• Decision Date: 19 August 1988
• Docket Number: No. 87-1464,87-1464
• Citation: 854 F.2d 510
• Parties: JOHN D. COPANOS AND SONS, INC. and Kanasco, Ltd., Petitioners, v. FOOD AND DRUG ADMINISTRATION and Frank E. Young, M.D., Ph.D., Commissioner of Food and Drugs, Respondents.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 510

854 F.2d 510

272 U.S.App.D.C. 101

JOHN D. COPANOS AND SONS, INC. and Kanasco, Ltd., Petitioners, v. FOOD AND DRUG ADMINISTRATION and Frank E. Young, M.D., Ph.D., Commissioner of Food and Drugs, Respondents.

No. 87-1464.

United States Court of Appeals,

District of Columbia Circuit.

Argued May 19, 1988.

Decided Aug. 19, 1988.

James R. Phelps, with whom Robert A. Dormer, Washington, D.C., was on the brief, for petitioners. Judith R. Brunton, Washington, D.C., also entered an appearance for petitioners.

Gerald C. Kell, Atty., Dept. of Justice, with whom John R. Bolton, Asst. Atty. Gen., John R. Fleder, Director, Office of Consumer Litigation, Washington, D.C., Thomas Scarlett, Chief Counsel, Food and Drug Admin. and Eric M. Blumberg, Associate Chief Counsel, Food and Drug Admin., Rockville, Md., were on the brief, for respondents. Richard K. Willard, Asst. Atty. Gen ^*, Washington, D.C., also entered an appearance for respondents.

Before MIKVA, BUCKLEY and D.H. GINSBURG, Circuit Judges.

Opinion for the Court filed by Circuit Judge D.H. GINSBURG.

D.H. GINSBURG, Circuit Judge:

John D. Copanos & Sons, Inc., and Kanasco, Ltd., affiliated enterprises owned by John D. Copanos (hereinafter referred to collectively as Kanasco), manufacture and distribute human and veterinary drugs, including, until recently, a number of sterile injectable products. These injectable drugs were produced pursuant to a number of New Drug Applications (NDAs) and New Animal Drug Applications (NADAs) approved by the respondent Food and Drug Administration (FDA). On March 10, 1987, the FDA published a Notice of Opportunity for a Hearing (NOOH) in the Federal Register, proposing to withdraw Kanasco's NDAs and NADAs for sterile injectable products on the ground that the methods, facilities, and controls used to produce these drugs were inadequate to assure their identity, strength, quality, and purity. Kanasco responded to this Notice, and requested a hearing, but on August 6, 1987, the agency denied the hearing and summarily withdrew its approval of the company's applications, effectively barring Kanasco from producing the subject drugs.

Upon the company's petition for review, we conclude that Kanasco received adequate notice of the basis for the FDA's action, and that the agency did not err in proceeding by summary judgment to withdraw its approvals of Kanasco's applications. Accordingly, we deny the petition for review.

I. STATUTORY BACKGROUND

The Federal Food Drug and Cosmetic Act, 21 U.S.C. Sec. 301 et seq. (1982 & Supp. IV 1986) (FDCA), prohibits the introduction into interstate commerce of any new drug, or any new animal drug, unless an NDA or an NADA for that drug has been approved by the FDA. 21 U.S.C. Sec. 355(a) (NDAs); id. at Sec. 360b(a)(1)(A) (NADAs). Each application must include, among other things, reports of all investigations of the safety and efficacy of the drug, and "a full description of the methods used in, and the facilities and controls used for, the manufacture, processing, and packing of such drug." 21 U.S.C. Sec. 355(b)(1) (NDAs); id. at Sec. 360b(b) (NADAs).

The Act also establishes procedures whereby the FDA, "after due notice and opportunity for hearing to the applicant," can withdraw its prior approval. 21 U.S.C. Sec. 355(e) (NDAs); id. at Sec. 360b(e) (NADAs). One of the statutory grounds for such withdrawal is that:

the Secretary finds ... that on the basis of new information before him, evaluated together with the evidence before him when the application was approved, the methods used in, or the facilities and controls used for, the manufacture, processing and packing of such drug are inadequate to assure and preserve its identity, strength, quality, and purity and were not made adequate within a reasonable time after receipt of written notice from the Secretary specifying the matter complained of.

Id. at Sec. 355(e) (NDAs); id. at Sec. 360b(e)(2)(B) (NADAs). The standards for determining whether a manufacturer's "methods[,] ... facilities and controls" are adequate "to assure and preserve [the] identity, strength, quality and purity" of its drugs are set forth in the FDA's "Current Good Manufacturing Practice" (CGMP) regulations. See 21 C.F.R. Part 211. Those regulations govern numerous aspects of the manufacturing process, including (1) the qualifications and responsibilities of personnel; (2) standards for the design and construction of buildings, facilities, and equipment; (3) laboratory controls; and (4) requirements for record keeping, packaging and labeling. Drugs produced in violation of these CGMP regulations are deemed to be adulterated without the agency having to show that they are actually contaminated. 21 U.S.C. Sec. 351(a)(2)(B); see, e.g., United States v. Bel-Mar Laboratories, Inc., 284 F.Supp. 875, 880-81 (F.D.N.Y.1968).

FDA has rarely withdrawn its approval of an application for failure to comply with CGMP. Indeed, Kanasco maintains, without contradiction by the agency, that the only previous withdrawal actions based on this ground were uncontested and involved animal feed applications. See Pembroke Elevator and Seed Co., 45 Fed.Reg. 79165 (1980); Kahle Turkey Farms & Hatchery, 43 Fed.Reg. 32866 (1978); Standard Milling Co., Inc., 34 Fed.Reg. 6004 (1969); see also 21 U.S.C. Sec. 360b(m)(3)(C). The order before us here, therefore, is the first contested withdrawal of approval of a NDA or a NADA on CGMP grounds. The circumstances leading up to the FDA's unprecedented action are briefly set forth below.

II. FACTS

Both the NOOH and the final agency order withdrawing approval of Kanasco's NDAs and NADAs discuss in detail the unhappy regulatory history leading up to the present proceeding. We will therefore limit our narrative to those events that are essential to our decision. In particular, we will confine our attention to events occurring in and after 1984. We pause here only to note that, in view of several earlier encounters with the FDA, Kanasco was no regulatory naif at the outset of this episode.

From late August through early October 1984, the FDA conducted a CGMP inspection of Kanasco's oral dosage form manufacturing facility. This inspection revealed numerous deficiencies in the company's manufacturing and quality control procedures, including inaccurate and even falsified manufacturing records, failure to calibrate laboratory equipment, unsanitary conditions in the manufacturing area, and production of a subpotent and impure animal drug. At the conclusion of the inspection, the FDA left with the company a Form FDA-483 listing the deficiencies noted in the inspection. See 21 U.S.C. Sec. 374(b).

Based on the results of this inspection, the United States sought to enjoin Kanasco from the further manufacture and shipment of pharmaceuticals. See Complaint for injunction, United States v. John D. Copanos & Sons, Inc., No. JH-84-3957 (D.Md.). The complaint and the accompanying exhibits described in detail the CGMP deficiencies revealed in the August-October inspection, noting, in particular, that "[t]here is not an adequate number of qualified personnel to perform and supervise the manufacture, processing, packing, labeling, and holding of each product." Id. at 12. Rather than contesting the allegations in this complaint, on November 2, 1984, Kanasco agreed that it would not manufacture or ship any drugs without the prior written authorization of the FDA, and the government dismissed the complaint without prejudice. In late November, Kanasco responded by letter to the observations in the Form FDA-483. This letter, for the most part, acknowledged the alleged deficiencies and promised corrective measures in the future. In January 1985, a consultant employed by Kanasco informed the FDA that the firm's injectable drug manufacturing operation was in compliance with CGMP.

In February and March 1985, the FDA returned to Kanasco to verify the consultant's assessment. Inspection of the facility once again revealed a variety of alleged deficiencies. The Form FDA-483 left with the firm noted the following problems, inter alia: failure to validate processing procedures, sterilization equipment, gowning procedures and the water injection system; ¹ failure to have "primary barriers" in critical manufacturing areas; failure to assure proper air pressure, temperature and humidity in manufacturing areas; inadequate monitoring of the environment for microorganisms; incomplete cleaning procedures; and inadequate microbiological testing procedures. Kanasco again replied to the Form FDA-483 by letter, acknowledging the alleged deficiencies, disputing some of the agency's conclusions but promising improvements in the areas identified by the inspector. Kanasco also asked for approval to resume manufacturing (but not shipping) veterinary drugs, on the ground that it was then in compliance with CGMP.

Unsatisfied with this response, the FDA declined Kanasco's request to resume manufacturing, and criticized the "media fill" performed by Kanasco in February 1985. (A media fill is a test procedure in which product containers are filled with sterile growth media, run through the normal production procedures, incubated, and then examined for contamination; lack of contamination provides evidence that the filling process has been "validated.") The FDA also emphasized its concern with "the underlying cause of the deficiencies that were observed in [Kanasco's] laboratory," viz., that the "firm does not have an adequate number of individuals with sufficient training and experience to perform the necessary quality control, quality assurance, and laboratory activities."

In May 1985, the FDA once again returned to Kanasco to evaluate the results of the company's recent media fills. The FDA judged these tests unsatisfactory and left a Form FDA-483 listing the following problems: lack of proper controls; no standard test procedure in place; failure of a control test used in conjunction with...