U.S. v. Alcon Laboratories

Decision Date24 February 1981
Docket NumberNos. 80-1188,80-1357,s. 80-1188
Citation636 F.2d 876
PartiesUNITED STATES of America, Appellant, v. ALCON LABORATORIES, etc. et al., Defendants, Appellees.
CourtU.S. Court of Appeals — First Circuit

Andrea Limmer, Atty., Dept. of Justice, Washington, D. C., with whom Sanford M. Litvack, Asst. Atty. Gen., Nancy L. Buc, Chief Counsel, Washington, D. C., Forrest T. Patterson, Associate Chief Counsel for Enforcement, Food and Drug Administration, Rockville, Md., and Robert B. Nicholson, Atty., Dept. of Justice, Washington, D. C., were on brief, for appellant.

Thomas O. Henteleff, Washington, D. C., with whom Manuel A. Guzman, McConnell, Valdes, Kelley, Sifre, Griffs & Ruiz-Suria, San Juan, P. R., Glenn E. Davis, and Kleinfeld, Kaplan & Becker, Washington, D. C., were on brief, for defendants, appellees.

Before COFFIN, Chief Judge, PELL * and CAMPBELL, Circuit Judges.

LEVIN H. CAMPBELL, Circuit Judge.

The United States appeals from orders of the District Court for the District of Puerto Rico in two seizure actions and a suit for injunctive relief instituted by the Food and Drug Administration (FDA) against Alcon Laboratories, Inc. (Alcon) and one of its products pursuant to the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. §§ 301-92 (1976).

Alcon manufactures and markets in suppository dosage a prescription antiemetic drug called "WANS." The drug contains pyrilamine maleate (an antihistamine) and pentobarbital sodium (a barbituate) and comes in three dosage strengths, WANS No. 1, WANS No. 2 and WANS Children. WANS has been used under medical supervision for approximately 25 years, and did not become an object of FDA concern until 1978. To understand what then transpired, it is first useful to review parts of the Federal Food, Drug, and Cosmetic Act.

Section 505 of the Act forbids the introduction into interstate commerce of any "new drug" unless the FDA has approved a New Drug Application (NDA) for the product. 21 U.S.C. § 355. Section 201(p) defines a "new drug" as

"(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, ... or

(2) 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, as a result of investigations to determine its safety and effectiveness for use under such conditions, has become so recognized, but which has not, otherwise than in such investigations, been used to a material extent or for a material time under such conditions."

21 U.S.C. § 321(p). Obtaining approval of an NDA requires the submission of extensive scientific data and can be slow and expensive, see Note, New Drug Approval: Lannett, The Drug Lag and the NDA System, 11 Rut.-Cam. L.J. 231, 231-34; 248-53 (1980), but Congress imposed these burdens in furtherance of a compelling purpose: "to protect the public against danger to human life arising from use of unsafe and ineffective drugs by assuring that before any drug is marketed it will have been carefully reviewed by FDA experts." Premo Pharmaceutical Laboratories, Inc. v. United States, 629 F.2d 795, 802 (2d Cir. 1980).

A product may be marketable without prior FDA approval for any of three reasons. First, a drug is not a "new drug" if "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"; if this "expert consensus is founded upon 'substantial evidence' "; and if the drug has "been used to a material extent or for a material time under such conditions." 21 U.S.C. § 321(p); Weinberger v. Hynson, Westcott & Dunning, Inc., 412 U.S. 609, 631-32, 93 S.Ct. 2469, 2484, 37 L.Ed.2d 207 (1973); Premo Pharmaceutical, supra, 629 F.2d at 801-02. Second, under a "grandfather" clause inserted in the 1938 Act, drugs which prior to June 25, 1938 (the effective date of the Act) were "subject to the Food and Drugs Act of June 30, 1906" and have since undergone no change in composition, labeling or recommendations for use are exempt from Section 505's premarketing approval requirements. 21 U.S.C. § 321(p)(1). And third, another grandfather clause in the Act, added in 1962, relieves from premarketing approval any drug which prior to October 10, 1962 (the effective date of the 1962 amendments) "was commercially used or sold in the United States," was generally recognized as safe by qualified experts, was not covered by an effective new drug application and has undergone no change in composition or labeling. Comment to 21 U.S.C. § 321.

Where the FDA believes that a drug is a "new drug" and is being marketed without approval of an NDA, it is empowered to institute seizure and injunction actions in federal district court to remedy the alleged violation of the Act. 21 U.S.C. §§ 332, 334. The agency may also seek criminal sanctions. 21 U.S.C. § 333.

On March 17, 1978, the FDA sent Alcon a regulatory letter informing it of a report received from the agency's Neurological Drugs Advisory Committee "that children aged 6 months to seven years who were treated for nausea and vomiting with drugs containing pyrilamine maleate and pentobarbital, experienced severe and sometimes fatal reactions." The Committee had concluded, the letter went on, "that there is no evidence of safety and efficacy for drugs containing pyrilamine maleate with or without a barbituate in the treatment of nausea and vomiting." Based on the Committee's report, "and because (the FDA was) unaware of substantial scientific evidence which demonstrates that a combination of these ingredients is generally recognized as safe and effective for the treatment of nausea and vomiting," the FDA advised Alcon that it considered Alcon's marketing of WANS to be in violation of the "new drug" provision of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 355. The letter stated that under FDA regulatory policy as formulated in Compliance Policy Guide 7132c.08, see infra, WANS had become subject to immediate regulatory action outside the agency's ordinary enforcement priorities "because of new information concerning the safety and efficacy of these drugs." Alcon was told to reply within ten days, and was warned that failure to discontinue marketing WANS would expose the company to seizure and injunction actions.

Alcon responded on April 3, 1978. It claimed that WANS was not a "new drug," objected to the FDA's departure from the ordinary sequence of its enforcement priorities on the basis of an "unsubstantiated, conclusionary indictment of the safety" of the active ingredients in WANS, and requested that it be allowed to "identify and review the data and information upon which the Agency relies, and to make a formal submission to the Agency...." The company also offered to revise the labeling of WANS consistent with the findings of its review. Subsequent to this letter, Alcon, on its own initiative, sent the FDA proposed new labeling for WANS and information supporting the safety and efficacy of the drug. Various company officials met with agency officials on July 10 and 18, 1978 to discuss WANS.

The FDA reviewed the materials provided by Alcon and in a letter of August 4, 1978 reaffirmed its position upon the "new drug" status of WANS: "the data submitted ... contains no adequate scientific data to support the safety and efficacy of the Wans products." Though the proposed relabeling was felt to be "an improvement," it could not substitute for "scientific evidence to establish that a fixed combination of pyrilamine maleate and pentobarbital sodium is either safe or effective for the treatment of nausea and vomiting." The letter made no reference to Compliance Policy Guide 7132c.08 or to the enforcement priority scheme delineated therein.

Alcon continued to manufacture WANS and on September 21, 1978 the FDA instituted a seizure action in federal district court alleging that the drug was a "new drug" being marketed in violation of Section 505 of the Act, 21 U.S.C. § 355. By court order, a large quantity of WANS suppositories (approximately 453,900) was seized. In its responsive pleadings in the seizure action, Alcon admitted that no approval of a new drug application was in effect for WANS or was being sought. The company nevertheless denied that WANS was being marketed in violation of section 505. Alcon argued that WANS is not subject to the "new drug" requirements of the Act because "it is generally recognized as safe for use under the conditions prescribed, recommended or suggested in its labeling, and it is exempted from the 'efficacy' requirements of the Federal Food, Drug and Cosmetic Act" by the 1962 grandfather clause discussed supra. In addition, Alcon contended that the FDA was acting in violation of its pertinent Compliance Policy Guide.

Despite seizure of the suppositories, Alcon continued to manufacture and distribute WANS, thus prompting the FDA, on November 28, 1978, to institute a further action, this time seeking a temporary restraining order, a preliminary injunction and a permanent injunction against continued marketing of WANS without FDA approval. On the next day, November 29, the district court denied the FDA's request for a temporary restraining order, and consolidated the injunctive suit with the earlier seizure action. On December 19, 1978, the district court gave the parties 90 days to complete discovery in the consolidated proceeding and set a trial date of May 7, 1979.

On March 21, 1979, however, Alcon moved the district court to remand to the FDA,

"with...

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