Medical Center Pharmacy v. Gonzales, MO-04-CV-130.

• Decision Date: 30 August 2006
• Docket Number: No. MO-04-CV-130.,MO-04-CV-130.
• Citation: 451 F.Supp.2d 854
• Parties: MEDICAL CENTER PHARMACY, et al. Plaintiffs v. GONZALES, et al. Defendants
• Court: U.S. District Court — Western District of Texas

451 F.Supp.2d 854

MEDICAL CENTER PHARMACY, et al. Plaintiffs v. GONZALES, et al. Defendants

No. MO-04-CV-130.

United States District Court, W.D. Texas, Midland-Odessa Division.

August 30, 2006.

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ORDER GRANTING IN PART PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT AND GRANTING IN PART DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

JUNELL, District Judge.

Before the Court are Plaintiffs' Motion for Summary Judgment, filed March 31, 2006; Defendants' Motion for Summary Judgment, filed March 31, 2006; and numerous responses, replies, and supplemental briefs. On May 25, 2006, the Court held a hearing over the parties' Motions for Summary Judgment. After due consideration, and in accordance with the oral pronouncement made at the hearing, the Court finds the following order shall now enter.

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiffs are a group of ten state-licensed pharmacies that specialize in compounding prescription drugs for humans and non-food animals. Although the Food, Drug and Cosmetic Act ("the Act"), 21 U.S.C. § 301, et seq., does not define the terms compounding or compounded drug, the practice has been generally defined as the process by which "a pharmacist or doctor combines, mixes, or alters ingredients to create a medication tailored to the needs of an individual patient." Thompson v. W. States Med. Ctr., 535 U.S. 357, 360-61, 122 S.Ct. 1497, 152 L.Ed.2d 563 (2002). These hybrid drugs are typically created in the absence of a commercially available drug which would serve a similar purpose, or where a commercially available drug contains ingredients to which the patient is allergic. The practice of compounding drugs from approved ingredients saves time and money for patients and physicians. Every state legislature has authorized the compounding of drugs, and state governments continue to regulate the practice.

On September 27, 2004, Plaintiffs filed the instant lawsuit challenging the authority of the FDA to regulate compounded drugs and to inspect state-licensed retail pharmacies under the Act. On January 27, 2005, Defendants filed a Motion to Dismiss, seeking dismissal of the case for failure to state a claim upon which relief can be granted. At a hearing on May 23, 2005, this Court denied, without prejudice, Defendants' Motion to Dismiss and both parties engaged in discovery. On February 24, 2006, Plaintiffs' Motion for Leave to File an Amended Complaint was granted. The Amended Complaint sought declaratory and injunctive relief on seven counts. Specifically, Plaintiffs requested (1) declaratory judgment under the new drug definitions found in 21 U.S.C. §§ 321(p)(1) and (v)(1), (2) injunctive relief under the new drug definitions, (3) declaratory judgment under the exemption contained in 21 U.S.C. § 374(a)(1), (4) injunctive relief under the exemption contained in 21 U.S.C. § 374(a)(1), (5) declaratory judgment regarding the FDA's policy that compounding from bulk ingredients for non-food animals is illegal, (6) injunctive relief regarding Compliance Policy Guideline 608.400, and (7) injunctive relief under 21 U.S.C. § 331(f).

Thereafter, on March 31, 2006, Plaintiffs and Defendants filed competing Motions for Summary Judgment. In their Motion for Summary Judgment, Plaintiffs seek:

1. a declaration that drugs compounded by licensed pharmacists are not "new drugs" or "new animal drugs" per se under 21 U.S.C. §§ 321(p)(1) and (v)(1);

2. an injunction that prevents the FDA from declaring that compounded drugs are "new drugs" or "new animal drugs" under 21 U.S.C. §§ 321(p)(1) or (v)(1) and therefore subject to the requirements and prohibitions imposed upon such drugs under the Act;

3. an injunction that prevents the FDA from enforcing its position that compounded drugs are "new drugs" or "new animal drugs" under 21 U.S.C. §§ 321(p)(1) or (v)(1) and therefore subject to the requirements and prohibitions imposed upon such drugs under the Act;

4. a declaration that the FDA is prohibited from compelling inspections that exceed the grounds enunciated in the first sentence of 21 U.S.C. § 374(a)(1) of pharmacies like Plaintiffs that comply with the requirements of 21 U.S.C. § 374(a)(2)(A);

5. an injunction that prevents the FDA from engaging in inspections that exceed the subjects enunciated in the first sentence of 21 U.S.C. § 374(a)(1) of pharmacies that are in good standing with their respective State boards of pharmacy and have met the Exemption Criteria;

6. a declaration that Compliance Policy Guideline 608.400 and the Notice are unenforceable;

7. a declaration that the FDA does not have the authority to declare compounding from bulk ingredients for non-food animals illegal;

8. an injunction that prevents the FDA from enforcing its current Compliance Policy Guideline which unilaterally declares that compounding from bulk ingredients for non-food animals is illegal;

9. an order requiring the FDA to rescind the Notice at issue in this case;

10. an order requiring the FDA to publish a copy of the Court's order on its website;

11. an injunction that prevents the FDA from prohibiting Plaintiffs or similarly situated pharmacies from receiving bulk ingredients;

12. an injunction that prevents the FDA from bringing prosecutorial, enforcement or punitive actions against any Plaintiffs for refusing to allow the FDA to conduct inspections exceeding the first sentence of 21 U.S.C. § 374(a)(1) of their pharmacies, pursuant to 21 U.S.C.. § 374(a)(2)(A), absent independent evidence from the relevant State boards of pharmacy that Plaintiffs are non-compliant; and

13. any and all other relief, in law or in equity, as may be just.

Plaintiffs filed a Response to Defendants' Motion on April 20, 2006, and Defendants' Reply was filed on April 21, 2006. Thereafter on May 25, 2006, this Court held a hearing over the Motions for Summary Judgment. At the conclusion of the hearing, the Court orally granted Plaintiffs' Motion for Summary Judgment in part, and took several remaining issues under advisement. After the hearing, both parties filed supplemental briefs, which this Court has duly considered.

STANDARD OF REVIEW

Summary judgment should be granted only where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R. CIV. P. 56(c). In this case, Plaintiffs and Defendants represent to the Court that no genuine issues of material fact exist. They both filed Motions for Summary Judgment and agree that adjudication based on the summary judgment motions is proper.

DISCUSSION

In their Motion for Summary Judgment, Plaintiffs argue they are entitled to declaratory and injunctive relief on several grounds, as enumerated above. The Court finds that the requested relief can be grouped into the following topics: (1) Compounded Drugs, (2) Inspections, (3) Compounding from Bulk Ingredients for Non-Food Animals, (4) Compliance Policy Guideline 608.400 and the Notice, and (5) Injunctions. Each topic shall be examined individually below.

(1) Compounded Drugs

Plaintiffs first contend that compounded drugs, prepared by pharmacists in the regular course of their business pursuant to a prescription from a licensed practitioner are not new drugs under the Act. However, Defendants maintain that compounded drugs fall within the definitions of new drugs found at 21 U.S.C. §§ 321(p)(1) and (v)(1).¹ The new drug definitions state:

"(p) The term "new drug" means —

(1) Any drug (except a new animal drug or an animal feed bearing or containing a new animal 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 prescribed, recommended, or suggested in the labeling thereof . . ."

21 U.S.C. § 321(p)(1).

"(v) The term "new animal drug" means any drug intended for use for animals other than man, including any drug intended for use in animal feed but not including such animal feed, —

(1) 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 animal drugs, as safe and effective for use under the conditions prescribed, recommended, or suggested in the labeling thereof . . . "

21 U.S.C. § 321(v)(1). Taken alone, the new drug definitions might seem to indicate that compound drugs fall within their provisions. However, after examining relevant case and statutory law, as well as legislative intent, this Court finds that compound drugs are implicitly exempt from the new drug definitions contained in § 321.

a. 21 U.S.C. § 353a

In 1997, Congress enacted the Food and Drug Administration Modernization Act of 1997 ("FDAMA"). In doing so, § 127(a) of FDAMA was codified and added to the Act under 21 U.S.C. § 353a. At the time it was enacted, Section 353a declared:

"a) In general

Sections 351(a)(2)(B), 352(f)(1), and 355 of this title shall not apply to a drug product if the drug product is compounded for an identified individual patient based on the unsolicited receipt of a valid prescription order or a notation, approved by the prescribing practitioner, on the prescription order that a compounded product is necessary for the identified patient, if the drug product meets the requirements of this section, and if the compounding —

(1) is by —

(A) a licensed pharmacist in a State licensed pharmacy or a Federal facility, or

(B) a licensed physician,

on the prescription order for such individual patient made by a licensed physician or other licensed practitioner authorized by State law to prescribe drugs; or

(2) (A) is by a licensed pharmacist or licensed physician in limited quantities before the receipt...