Genus Med. Techs. LLC v. U.S. Food & Drug Admin.

Citation994 F.3d 631
Decision Date16 April 2021
Docket NumberNo. 20-5026,20-5026
Parties GENUS MEDICAL TECHNOLOGIES LLC, Appellee v. UNITED STATES FOOD AND DRUG ADMINISTRATION, Appellant
CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)

Daniel Winik, Attorney, U.S. Department of Justice, argued the cause for appellant. With him on the briefs were Jeffrey Bossert Clark, Acting Assistant Attorney General, Scott R. McIntosh, Attorney, Robert P. Charrow, General Counsel, U.S. Department of Health and Human Services, AnnaMarie Kempic, Deputy Chief Counsel for Litigation.

Noam B. Fischman, Washington, DC, was on the brief for amicus curiae Bracco Diagnostics Inc. in support of appellant.

James A. Boiani, Washington, DC, was on the brief for amicus curiae Giskit B.V. in support of appellant.

Douglas B. Farquhar, Washington, DC, argued the cause and filed the brief for appellee.

Before: Henderson, Pillard and Katsas, Circuit Judges.

Opinion concurring in the judgment filed by Circuit Judge Pillard.

Karen LeCraft Henderson, Circuit Judge:

The Federal Food, Drug, and Cosmetic Act (FDCA or Act), 21 U.S.C. §§ 301 et seq. , sets forth separate and detailed regimes for the regulation of medical products classified, inter alia , as drugs or devices. The question before us is whether the U.S. Food and Drug Administration (FDA) enjoys discretion to classify as a "drug" a product that meets the statutory definition of a "device." The FDA claims that, if a medical product satisfies the statutory definitions of both a "drug" and a "device," the Act's overlapping definitions grant by implication the FDA broad discretion to regulate the product under either regime. Since 2017 the FDA has exercised its claimed discretion to classify Genus Medical Technologies’ (Genus) "Vanilla SilQ" line of diagnostic contrast agents as drugs, notwithstanding the FDA's recognition that the products "appear" to satisfy the statutory definition for devices. Genus subsequently filed suit, challenging the FDA's classification decision as inconsistent with the Administrative Procedure Act (APA), 5 U.S.C. § 706(2), and the FDCA. Finding that the FDCA unambiguously forecloses the FDA's interpretation, the district court granted summary judgment in Genus's favor and vacated the FDA decision to classify Genus's products as drugs. We agree with the district court that the text, statutory structure and legislative history of the Act make plain that the Congress did not grant the FDA such sweeping discretion. Accordingly, we affirm the district court's grant of summary judgment.

I. BACKGROUND
A. Statutory & Regulatory Framework

The FDCA grants the FDA the authority to regulate certain categories of medical products, including drugs, devices, biologics and dietary supplements. Relevant here are the statutory definitions for "drug" and "device." The Act, in relevant part, defines "drugs" to include:

articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man or other animals....

21 U.S.C. § 321(g)(1)(B). "Devices" are defined to include:

an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including any component, part, or accessory, which is ... intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, in man or other animals, ... and which does not achieve its primary intended purposes through chemical action within or on the body of man or other animals and which is not dependent upon being metabolized for the achievement of its primary intended purposes.

Id . § 321(h)(1).1 Because the two definitions share a common "intended-use clause"—that is, both definitions include articles intended for use in the diagnosis, cure, mitigation, treatment or prevention of disease—and because the drug definition features no other relevant limitations, it is apparent that any product that satisfies the "device" definition also satisfies the definition of a "drug." The converse, however, is not true. Because a device must be "an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article," and further, because it may neither "achieve its primary intended purposes through chemical action within or on the body of man" nor be "dependent upon being metabolized for the achievement of its primary intended purposes,"2 the set of products that satisfy the device definition is necessarily encompassed by, but narrower than, the set of products that satisfy the drug definition.

Drugs and devices are subject to distinct regulatory regimes. To begin, separate divisions of the FDA are primarily responsible for each product category. Whereas drugs are generally regulated by the FDA's Center for Drug Evaluation and Research, devices are within the purview of the FDA's Center for Devices and Radiological Health.

The FDA holds new drugs to a high standard of pre-market review and approval. To market a new prescription drug, the sponsor (typically the manufacturer) must submit a new-drug application and demonstrate through clinical trials that the drug is safe and effective for its proposed use. 21 U.S.C. § 355(a)(b). Sponsors may, however, be able to take advantage of an abbreviated new-drug application if their drug is sufficiently similar to drugs that the FDA has previously approved. Id. § 355(j).

The FDA's pre-market review of devices is more varied. Devices are assessed by the FDA and, with the assistance of expert "classification panels," classified into one of three categories based on the risks they pose. Id. § 360c. First are Class I devices, which are "subject only to minimal regulation by ‘general controls’ " because they "present no unreasonable risk of illness or injury...." Medtronic, Inc. v. Lohr , 518 U.S. 470, 476–77, 116 S.Ct. 2240, 135 L.Ed.2d 700 (1996) (quoting 21 U.S.C. § 360c(a)(1)(A) ). Class II devices include "[d]evices that are potentially more harmful" and, "although they may be marketed without advance approval, manufacturers of such devices must comply with federal performance regulations known as ‘special controls.’ " Id. at 477, 116 S.Ct. 2240 (quoting 21 U.S.C. § 360c(a)(1)(B) ). Finally, devices that, inter alia , " ‘presen[t] a potential unreasonable risk of illness or injury,’ or which are ‘purported or represented to be for a use in supporting or sustaining human life or for a use which is of substantial importance in preventing impairment of human health’ " are generally classified as Class III and, like drugs, subject to pre-market approval. Id. (alteration in original) (quoting 21 U.S.C. § 360c(a)(1)(C) ); 21 U.S.C. § 360e. To introduce a new Class III device into the market, the sponsor must provide the FDA with "detailed information regarding the safety and efficacy" of the device and the FDA must have " ‘reasonable assurance’ that the device is both safe and effective." Medtronic , 518 U.S. at 477, 116 S.Ct. 2240 (quoting 21 U.S.C. § 360e(d)(2) ).

The regulatory differences do not end at the product approval stage. Throughout the lifecycle of a medical product, its treatment by the FDA depends upon its classification as either a drug or a device. The FDCA sets forth separate rules for, inter alia , annual manufacturer registration, compare 21 U.S.C. § 360(b)(1) (registration requirements for drug manufacturers), with id. § 360(b)(2) (registration requirements for device manufacturers); routine manufacturer inspections, compare 21 U.S.C. § 360(h)(3) (risk-based inspection schedules for drug manufacturers), with id. § 360(h)(2) (risk-based inspection schedules for device manufacturers); routine product reporting, see id. § 356i (reporting of marketing status for drugs only); and adverse-event reporting, compare id. § 355b (reporting of adverse drug events), with id. § 360i (records and reports on devices, including reporting of adverse device events).

The result is that, on average, it is more costly for a sponsor to develop and market a product as a drug than it would be to develop and market an otherwise identical product as a device. Genus maintains that its cost would be approximately $60,000 to seek device clearance for Vanilla SilQ—the product line in question here. Genus Med. Techs., LLC v. FDA , 427 F. Supp. 3d 74, 78 (D.D.C. 2019). If, however, the same product line were classified as drugs, Genus estimates that it would cost them more than $500,000 to obtain pre-market approval in addition to a recurring cost of more than $186,000 per year to continue marketing their products as drugs. Id.

Fortunately for sponsors, the FDCA contemplates at least a limited role for sponsor input in the course of the product classification process. Specifically, if the classification of a product is unclear, a product sponsor may file a request for designation (RFD) to obtain a formal, binding determination from the FDA as to the "classification of the product ... or ... the component of the [FDA] that will regulate the product." 21 U.S.C. § 360bbb-2(a). A sponsor submits its RFD—including a recommended classification—to the FDA's Office of Combination Products (OCP) and the OCP must respond thereto no later than 60 days after the RFD's filing. Id. § 360bbb-2(b). If the OCP fails to respond, the sponsor's recommended classification becomes final. Id. § 360bbb-2(c). A classification made through the RFD process cannot be changed "except with the written consent of the [sponsor], or for public health reasons based on scientific evidence." Id. § 360bbb-2(b)(c).

B. Factual and Procedural History

Genus has manufactured its Vanilla SilQ product line since 2015. Compl. ¶ 25. Vanilla SilQ belongs to a category of products known as contrast agents. Contrast agents are used in medical imaging to improve the visualization of tissues, organs and physiological processes. According to Genus, Vanilla SilQ is an oral solution used in combination...

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