United States v. Allan Drug Corporation
| Decision Date | 29 April 1966 |
| Docket Number | No. 7914,7915.,7914 |
| Citation | 357 F.2d 713 |
| Parties | UNITED STATES of America, Appellant, v. ALLAN DRUG CORPORATION, Appellee (two cases). |
| Court | U.S. Court of Appeals — Tenth Circuit |
Arthur A. Dickerman, Atty., U. S. Dept. of Health, Education and Welfare (Lawrence M. Henry, U. S. Atty., and David I. Shedroff, Asst. U. S. Atty., with him on brief), for appellant.
Robert D. Inman, of Kelley, Inman, Flynn & Coffee, Denver, Colo. (Frank E. Gettleman, of Gettleman & Gettleman, Chicago, Ill., with him on brief), for appellee.
Before MURRAH, Chief Judge, and PICKETT and SETH, Circuit Judges.
In this consolidated libel action1 the Colorado District Court condemned as misbranded2 a drug labeled "Halsion, A Plan of Medication and Care for Acne and Pimples" and returned the seized articles to the intervening claimant to be brought into compliance with the drug law under the supervision of a representative of the Secretary of Health, Education and Welfare.3 This appeal is from an order of the court approving the relabeling and authorizing the marketing of the product as relabeled over the protest of the Federal Food, Drug and Cosmetic Administration.4
The factual issues as framed in the pre-trial order were (1) Was the Halsion Plan an adequate and effective treatment for acne and pimples; (2) Was there unanimity of opinion as to the proven value of the plan; (3) Did other remedies provide a temporary mask for skin disorders while the Halsion Plan provided lasting relief; (4) Did the Halsion tablets represent a new type of internal medication and, in conjunction with the plan, a scientific breakthrough in the treatment of acne and pimples; and finally, as a matter of law was the labeling misleading in any particular and, if so, misbranded within the meaning of § 352(a) thus subject to condemnation under § 334(d)? The claimant denies that the Halsion Plan labeling created any false or misleading impressions.
On trial of the case the Court found "That the labeling material in its net effect represented to prospective purchasers * * * that the `Halsion Plan' in and of itself is an adequate and effective treatment for acne and pimples and would give lasting relief from these conditions; that the medical profession unanimously recognizes that the `Halsion Plan', with the exception of the Halsion pills, has proven value as an adequate and effective treatment for acne and pimples, and that the Halsion pills are `a revolutionary new vitamin formula for internal medication' in the treatment of acne and pimples." The Court further found that The Court found, however, that the Halsion Plan "* * * may be of some benefit in mild cases of acne and pimples, and the measures prescribed in the Plan are used by some members of the medical profession, in whole or in part, in conjunction with other measures and treatments which the physician may deem to be indicated."5 It was accordingly concluded as a matter of law that the labeling was misbranded within the meaning of § 352(a).
Amenable to the requirements of § 334(d), the order returning the seized articles for relabeling expressly provided that "The Claimant shall not sell or dispose of said articles or any part thereof in a manner contrary to the provisions of the Federal Food, Drug, and Cosmetic Act * * *". The Court expressly retained jurisdiction for further orders deemed necessary to properly dispose of the proceedings and further provided that if by a certain date the claimant and the Secretary "* * * have not resolved the manner in which relabeling shall be accomplished * * *", the Claimant may move for an order regarding the labeling to be applied.
The Secretary's representatives and the claimant were unable to agree on the manner of relabeling. The claimant proposed to bring the condemned labeling within compliance in the following manner: 6
In a letter responding to the proposed relabeling the Secretary took the position that the labeling did not comply with the Court's guidelines in that (1) There was no qualification of the statement "Halsion, A Plan of Medication and Care for Acne and Pimples" and that a revision should be made to include the concept that the tablets constitute only one part of a plan and that at most "The plan may be helpful only in mild cases of acne and pimples." (2) The use of the fanciful name Halsion and the featuring of inactive ingredients on the labeling creates a misleading impression that the product is of "unique effectiveness". See 21 C.F.R. 1.104(c) (3). (3) The labeling should plainly state that Halsion is a vitamin supplement and nothing else. (4) The reference to Halsion tablets as scientifically formulated is not supported by any evidence and the ordinary purchaser would not understand what is meant by acne of the comedone variety. The Secretary also objected as not in conformity with the Court's guidelines to the proposed leading statement: He took the position that in view of the order of the court reading on § 334(d) to the effect that the claimant shall not sell or dispose of the article in a manner contrary to the provisions of the Act, it was necessary to evaluate the labeling in the light of all of the provisions of the Act, including § 352(f) (1) re adequate directions of use. See also 21 C.F.R. 1.106 (a), (o). Finally, the Secretary took the position that the requirements of § 334(d) made it necessary to consider the marketing status of the Halsion tablets under the Drug Amendments of 1962, 52 Stat. 1041. In that regard the Secretary contended that having shown to the satisfaction of the Court that the drug was not generally recognized by experts as effective for its intended uses, it cannot now be legally marketed unless its effectiveness has been established pursuant to a "New Drug application" in accordance with the statutory procedure set forth in 21 U.S.C. § 355(a), (b).7
Being thus unable to agree on the relabeling, the claimant moved in accordance with the intermediate order for final approval of its proposed relabeling as "* * * truthful and * * * accurate in every detail * * *" and as in conformity with the guidelines and the Drug Act as amended. The Secretary thereupon responded to join the issues by asserting in affidavit form the same position he had taken in conference and in the supervisory letter.
Upon consideration of the motion for approval of the proposed labeling, the Court was first of the opinion that the product may be relabeled and dispensed without compliance with the "New Drug" requirements of the 1962 Amendments, i. e. § 321(p) (1) and § 355(a), (b). On the matter of compliance with its order, the Court approved the bottle and carton labeling, but revised the proposed inserts in some significant respects.8
On appeal the Secretary takes sharp issue with the bottle and carton labels as approved by the Court contending that the unqualified words
A Plan of Medication and Care for
conveys the impression to prospective purchasers, especially pathetically eager and impressionable teenagers that the Halsion Plan is adequate and effective as a remedy for acne and pimples; that such intimation is inconsistent with the conclusive findings of the Court that "* * * at most the Halsion Plan may be of some benefit in mild cases of acne and pimples". He has also reasserted his position with respect to the market status of the drug in view of the 1962 Amendments to § 321(p) (1) and § 355.
For reasons we shall attempt to demonstrate we are of the considered opinion that when, based on the facts, the trial court held the Halsion labeling false and misleading, hence misbranded, it became a "new drug" within the meaning of § 321(p) (1), as amended, and was subject to the administrative procedures prescribed in § 355 as amended. In this posture of the case we have no occasion to decide whether the approved relabeling complied with the orders of the Court or the Federal Drug Act. The procedures under § 355 became an administrative matter in the first instance.
Prior to the 1962 Amendments, § 321 (p) (1) defined a "new drug" subject to the new drug procedures prescribed in § 355 as "Any drug the composition of which is such that such drug is not generally recognized, among experts * * * as safe for use under the conditions prescribed, recommended, or suggested in the...
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