Pharmaceutical Manufacturers Association v. Finch, Civ. A. No. 3797.

Decision Date16 January 1970
Docket NumberCiv. A. No. 3797.
Citation307 F. Supp. 858
PartiesPHARMACEUTICAL MANUFACTURERS ASSOCIATION, Plaintiff, v. Robert H. FINCH, Secretary of Health, Education and Welfare, and Herbert L. Ley, Jr., Commissioner of Food and Drugs, Defendants.
CourtU.S. District Court — District of Delaware

Alexander L. Nichols and David A. Drexler of Morris, Nichols, Arsht & Tunnell, Wilmington, Del., Lloyd N. Cutler, Daniel Marcus and Frank W. Lloyd of Wilmer, Cutler & Pickering, and Bruce J. Brennan, Washington, D. C., of counsel, for plaintiff.

F. L. Peter Stone, U. S. Atty., Wilmington, Del., William W. Goodrich, Asst. Gen. Counsel, Eugene M. Pfeifer, Atty., U. S. Dept. of Health, Education and Welfare, Washington, D. C., of counsel, for defendants.

OPINION

LATCHUM, District Judge.

In this action for declaratory and injunctive relief, the Pharmaceutical Manufacturers Association ("PMA"), on behalf of its members,1 seeks a preliminary injunction restraining the Secretary of Health, Education and Welfare ("the Secretary") and the Commissioner of Food and Drugs ("the Commissioner") from taking any action in reliance upon the regulations contained in the Commissioner's Order of September 19, 1969 ("the September regulations"), 34 Fed.Reg. 14596. The September regulations promulgated new standards of evidence necessary to demonstrate the effectiveness of drug products and applied those standards retroactively so as to place in jeopardy the continued marketing of thousands of drug products introduced before 1962 with Food and Drug Administration ("FDA") approval and the effectiveness of which FDA has not yet challenged. Specifically, the regulations detail criteria for "adequate and well-controlled clinical investigations" that will be deemed by the Commissioner to constitute "substantial evidence" of effectiveness and excludes as irrelevant other clinical tests and documented clinical experience. The regulations further provide that when the Commissioner seeks to remove a product from the market for lack of substantial evidence of effectiveness, the affected drug company will be entitled to a hearing only if it demonstrates to the Commissioner an ability to produce substantial evidence before a hearing is held, and convinces the Commissioner that the efficacy of the drug in question is, in fact, supported by adequate and well controlled clinical investigation of the kind described in the regulations.

To properly understand the present case some background concerning the marketing scheme of drugs under the Act must be noted. Under Section 505 of the Act, 21 U.S.C. § 355, a "new drug" can be marketed only if a new drug application, approved by the FDA, is in effect with respect to such drug. A "new drug", as defined in Section 201(p) of the Act, 21 U.S.C. § 321(p), is basically one that is not generally recognized as safe and effective for use under the conditions recommended in its labeling. The vast majority of prescription drugs manufactured by plaintiff's member companies (aside from antibiotics) were "new drugs" when first developed and marketed, and therefore, are or have been subject to approved new drug applications under Section 505. Antibiotic drugs are marketed under a separate statutory scheme providing for batch certification by FDA according to standards set forth in regulations prescribing characteristics of strength, quality, and purity deemed necessary to insure safety and efficacy of use. Section 507, 21 U.S.C. § 357(a).

From 1938, when the Act was first enacted, until 1962, there was no requirement that the effectiveness of a "new drug" be demonstrated before a new drug application was approved; only the safety of the drug had to be established. Likewise, before 1962, Section 505(e) of the Act provided for the suspension of an approved new drug application, after notice and opportunity for hearing, on the ground the drug had been shown unsafe, but not because of lack of effectiveness. 52 Stat. 1052, 1053 (1938).

In 1962, Congress amended Section 505 to require that new drugs be shown to be effective as well as safe before applications for marketing of such drugs are approved. Claims of "effectiveness" for a drug were required to be supported by "substantial evidence." Thus, as a result of the 1962 amendment, approval of a new drug application may be refused, if after notice and opportunity for a hearing, the FDA finds there is a "lack of substantial evidence" that the drug is effective for its recommended use. § 505(d), 21 U.S.C. § 355(d). Similarly, Section 505(e), as amended, 21 U.S.C. § 355(e), authorizes the Secretary to withdraw approval of a new drug application (including those approved before adoption of the 1962 amendments) if, after notice and opportunity for hearing, he finds "on the basis of new information before him with respect to such drug, evaluated together with information available to him when the application was approved, that there is lack of substantial evidence that the drug will have the effect it purports or is represented to have under the conditions of use prescribed, recommended, or suggested in the labeling thereof."

Section 505(d) of the Act, 21 U.S.C. § 355(d) defines substantial evidence to mean—

"evidence 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, on the basis of which it could fairly and responsibly be concluded by such experts that the drug will have the effect it purports or is represented to have under the conditions of use prescribed, recommended, or suggested in the labeling or proposed labeling thereof."

A separate but similar procedure has been provided for antibiotic drugs. Section 507 of the Act, 21 U.S.C. § 357, providing for the certification of antibiotic drugs, has contained a requirement of efficacy as well as safety since its original enactment in 1945. Before 1962, however, Section 507 applied only to certain named antibiotic drugs.2 Drug products containing these antibiotics have, therefore, been subject to regulations designed to insure efficacy as well as safety since becoming subject to batch certification under Section 507. Before 1962, drug products containing other antibiotics were subject to the "new drug" provisions of Section 505 which did not at that time include any requirement of effectiveness. In 1962 Congress amended Section 507 to cover all antibiotic drugs. Antibiotics that had previously been marketed under new drug applications were "transferred" to Section 507, with a provision that the initial regulations providing for the certification of batches of such drugs would not be conditioned upon an affirmative finding of efficacy. Congress provided, nevertheless, that regulations for the certification of those drugs might subsequently be amended or repealed on a finding by the Secretary—

"On the basis of new information with respect to such drug evaluated together with the information before him when the application under section 505 became effective or was approved, that there is a lack of substantial evidence (as defined in section 505(d)) that the drug has the effect it purports or is represented to have under such conditions of use." Section 507(h), 21 U.S.C. § 357(h).

The procedures for amendment or repeal of antibiotic regulations are set forth in Section 507(f). They provide for notice of proposed action, an opportunity to present views, and a hearing on objections stating "reasonable grounds" in opposition to any final order amending or repealing a regulation.

Pursuant to the 1962 amendments, the FDA determined to undertake a review of the effectiveness of drugs that had been approved for marketing between 1938 and 1962. Thus, in 1966 the Agency entered into a contract with the National Academy of Sciences-National Research Council ("NAS-NRC") for the conduct of this effectiveness review, and invited manufacturers of products marketed between 1938 and 1962 to submit to the NAS-NRC data to support claims of effectiveness for these drugs. Panels of physicians selected by the NAS-NRC have, over the past two years, reviewed the claims for effectiveness of some 2800 drug products, and prepared reports for the FDA containing conclusions as to the effectiveness of these drugs. The FDA is currently in the process of reviewing this mass of reports, and has begun publishing in the Federal Register, from time to time, summaries of the conclusions of the NAS-NRC with respect to particular drugs. In several instances, on the basis of conclusions of NAS-NRC panels, the FDA has initiated action to remove products from the market on the ground of lack of substantial evidence of effectiveness.

In two instances involving antibiotic combination drugs, the FDA (before issuing the September regulations) sought, on the basis of NAS-NRC reports, to repeal regulations providing for the certification of these products—and thus to require their removal from the market— before providing a hearing or before acting on objections filed by affected parties requesting a hearing. In both cases, the district court involved issued a preliminary injunction prohibiting the FDA from making effective any order removing the product from the market until thirty days after acting on objections filed by the parties—i. e., ruling as to whether "reasonable grounds" for a hearing had been stated by the affected party in its objection. Upjohn Co. v. Finch, 303 F.Supp. 241 (S.D.Mich., 1969); American Home Products Corp. v. Finch, 303 F.Supp. 448 (D.Del., 1969). While not deciding the issues, both Courts questioned (1) the correctness of the FDA's refusal to consider as relevant on the issue of effectiveness documented clinical experience and clinical tests other than those that meet the criteria of "adequate and well-controlled" and (2) FDA's theory that "reasonable grounds" for a hearing exist only...

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