Tri-Bio Laboratories, Inc. v. U.S., TRI-BIO

Decision Date19 August 1987
Docket NumberNo. 87-5123,TRI-BIO,87-5123
Citation836 F.2d 135
PartiesLABORATORIES, INC., Appellant, v. UNITED STATES of America and Food and Drug Administration, Appellees. . Submitted Pursuant To Third Circuit Rule 12(6)
CourtU.S. Court of Appeals — Third Circuit

Richard K. Willard, Asst. Atty. Gen., James J. West, U.S. Atty., Margaret A. Cotter, Asst. Director, Office of Consumer Litigation, Gerald C. Kell, Office of Consumer Litigation, Civ. Div., U.S. Dept. of Justice, Washington, D.C. (Thomas Scarlett, Chief Counsel, Eric M. Blumberg, Associate Chief Counsel for Enforcement Food and Drug Admin., Rockville, of counsel), for appellees U.S. and Food and Drug Admin.

Before GIBBONS, Chief Judge, and WEIS, Circuit Judge, and KELLY, * District Judge.


WEIS, Circuit Judge.

A pharmaceutical manufacturer filed for Food and Drug Administration approval of a generic animal drug, incorporating in its application the research and testing data submitted by another manufacturer that earlier had obtained approval to market the predecessor brand name drug. Because of its policy treating such data as proprietary and confidential, the FDA refused to consider the previously filed material. The district court sustained the agency action and entered summary judgment against the generic manufacturer. We will affirm.

Plaintiff manufactures Gentaject, a veterinary pharmaceutical product recommended for use in one day old chicks to prevent early mortality caused by three species of bacteria. 1 Gentaject, a generic drug, 2 contains the same ingredients as a previously approved product manufactured by the Schering Corporation of Kenilworth, New Jersey and currently marketed under the brand name "Garasol."

Garasol was patented in 1963 and approved for commercial distribution by the FDA in 1978. The patent expired in 1980. A year later, plaintiff sought FDA approval to market its generic copy of Garasol under the brand name Gentaject. As required by statute and FDA regulations, plaintiff filed a new animal drug application (NADA) to demonstrate that its product was safe and effective for its intended use. However, instead of including the extensive test data ordinarily required in new applications, the plaintiff's application merely referred the FDA to Schering's test data in support of the original Garasol application. Because of the plaintiff's failure to submit original safety and effectiveness data, the FDA rejected the application as incomplete.

In October 1982 plaintiff renewed its request for FDA approval, asserting that Gentaject was not a "new drug" requiring the usual panoply of testing. Plaintiff equated its request to a remarketing of a previously FDA-approved drug (Garasol) under a new label (Gentaject). Plaintiff contended that Gentaject, as the bioequivalent 3 of Garasol, in essence already had received FDA approval. But the FDA reaffirmed its denial of the plaintiff's request, citing longstanding agency policy that all new animal drug applications "must stand or fall on the basis of the submitted data."

After some preliminary, inconclusive legal skirmishing, plaintiff agreed to file a citizen's petition 4 with the FDA, requesting the agency to declare that Gentaject was not a new animal drug and, thus, did not require a full application. In the petition plaintiff asserted that Gentaject was not a "new drug" within the meaning of the Food, Drug and Cosmetic Act, 21 U.S.C. Sec. 360b(a)(1), because the drug formulation--marketed under the Garasol label--was generally recognized as safe and effective for its intended use by experts qualified to make such judgments.

The Commissioner denied the citizen's petition. The agency concluded that Gentaject was a new animal drug within the meaning of the Act and that it had not become generally recognized as safe and effective.

Plaintiff then brought this action, asking the district court to declare that Gentaject was not a new drug, to direct the FDA to approve its application by incorporating Schering's data, or to reconsider the citizen's petition using the data previously submitted by Schering. Alternatively, plaintiff urged that the FDA approve Gentaject based on agency in-house research--conducted in defense of the litigation--through which the FDA had found Gentaject in fact safe and effective for its intended use. The parties filed cross-motions for summary judgment.

The district court granted the FDA's motion and entered judgment against plaintiff. The court concluded that the FDA properly interpreted its statutory authority in formulating the policy of rejecting applications which depended on data submitted by previous applicants. The court further determined that the FDA's rejection of the citizen's petition was not arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.

On appeal plaintiff argues that the FDA's approach is unreasonable because it compels expensive and indefensible duplicative testing of drugs already approved for commercial marketing. Plaintiff also asserts that the FDA did not adequately analyze all the submitted evidence, a review which plaintiff contends would have revealed that Gentaject was not a "new drug". In the absence of a proper factual hearing by the agency, plaintiff maintains that the district court should have examined the issue de novo.

The FDA responds that plaintiff failed to present the requisite safety and effectiveness data for its product and that, without such evidence, the Food, Drug and Cosmetic Act mandates rejection of the plaintiff's application.


The federal government began premarketing regulation of pharmaceuticals with the Food, Drug, and Cosmetic Act of 1938, Pub.L. No. 75-717, 52 Stat. 1040 (1938) (codified as amended at 21 U.S.C. Secs. 301-92). After passage of the 1938 Act, FDA approval was necessary before marketing any drug not generally recognized as safe by the scientific community. The Act assumes that a new drug is adulterated and thus unsafe for public distribution until it has been approved. See 21 U.S.C. Secs. 355(a), 360b(a)(1).

By 1962, however, the FDA had begun approving generic copies of established "pioneer" drugs 5 without the usual full-scale application ordinarily required for premarketing approval. As to these generics, the FDA concluded that, because the pioneers were generally recognized as safe and were used "to a material extent or for a material time," the regular new drug application was unnecessary. See Flannery & Hutt, Balancing Competition and Patent Protection in the Drug Industry, 40 Food Drug Cosm. L.J. 269, 272 (1985).

In 1962 Congress amended the Act to require that a new drug applicant establish to the FDA's satisfaction not only the product's safety, but also its effectiveness for the intended use. Drug Amendments of 1962, Pub.L. No. 87-781, 76 Stat. 780 (1962). The retroactive amendments necessitated FDA-retesting of all drugs approved before 1962 for compliance with the new effectiveness standard. To carry out this enormous mandate, the FDA adopted abbreviated procedures. The active ingredients of 4,000 pioneer drug formulations were analyzed. The drugs that survived this scrutiny no longer were considered to be "new drugs" and, thus, were relieved of the arduous, formal reapplication process.

The FDA also decided that a generic drug applicant need not duplicate a pre-1962 pioneer drug's testing; instead, the copycat manufacturer could submit an abbreviated new drug application (ANDA). This abbreviated application need recount only bioequivalence and bioavailability, 6 demonstrating that the generic was identical to the pioneer drug.

The FDA's policy differed, however, with respect to generics using formulations of pioneer products approved after 1962. The agency adopted the policy of treating as confidential and proprietary the safety and effectiveness data prepared and submitted by these pioneer drug manufacturers. In the FDA's view, use of this post-1962 research by the agency to review generic drug applications would constitute expropriation.

The FDA's restrictive policy on abbreviated applications thus required generic manufacturers to duplicate many of the pioneers' original testing procedures. The additional expense inherent in this policy necessarily increased the price to consumers of generic drugs. Nevertheless, the FDA feared that appropriation by "me-too" drug manufacturers of data gathered by the pioneer applicants at considerable expense would discourage the development of new products and new uses for existing ones.

Pharmaceuticals for humans and animals were regulated under the same statute until 1968 when Congress recodified the animal drug provisions. Animal Drug Amendments of 1968, Pub.L. No. 90-399, 82 Stat. 343 (1968). After this separation, the FDA continued to impose the same restrictions on abbreviated applications for new animal drugs as it had followed for human drugs.

In 1984 Congress adopted the Drug Price Competition and Patent Term Restoration Act, Pub.L. No. 98-417, 98 Stat. 1585 (1984) (codified at 21 U.S.C. Sec. 355). This statute attempts to balance the interests of the generic drug manufacturers, who sought to avoid unnecessary testing, against the research investments of the pioneer manufacturers, at the same time mindful of the public need for safe commercial drugs. The 1984 Amendments, which applied only to human drugs, reflect a statutory compromise of the competing concerns.

The 1984 Act provides an abbreviated application procedure for generic human drugs demonstrating bioequivalency with pioneer drugs approved either before or after 1962. In return, the Act grants pioneer drug manufacturers a statutorily defined period of...

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