United States v. Generix Drug Corp., 79-6655-Civ-NCR.

Citation498 F. Supp. 288
Decision Date12 June 1980
Docket NumberNo. 79-6655-Civ-NCR.,79-6655-Civ-NCR.
PartiesUNITED STATES of America, Plaintiff, v. GENERIX DRUG CORPORATION, a corporation, and Lewis Michael Orlove, and Gary R. Dubin, and Ofelia Perez, Individuals, Defendants.
CourtU.S. District Court — Southern District of Florida

Ana H. Barnett, Asst. U. S. Atty., Miami, Fla., Jacqueline H. Eagle, Asst. Chief Counsel, Rockville, Md., for Drugs, Food & Drug Administration, Gerald C. Kell, Consumer Affairs Section, Antitrust Div., Dept. of Justice, Washington, D. C., for plaintiff.

Thomas Scarlett, Morgan, Lewis & Bockius, Washington, D. C., George M. Burditt, Burditt & Caulkins, Chicago, Ill., for defendants.

ORDER

ROETTGER, District Judge.

This matter came before the court on plaintiff's motion for a preliminary injunction pursuant to 21 U.S.C. § 332. The Government has alleged that defendant, Generix Drug Corporation, distributes "new drugs" without an approved new drug application, and that such activity is proscribed by 21 U.S.C. § 355(a). Additionally, the Government has alleged that defendants have failed to comply with 21 U.S.C. § 351(a)(2)(B) which requires that repacking and labelling of drugs be performed only in circumstances that comply with current good manufacturing practices. The parties in open court announced that they had reached an amicable agreement with respect to the latter allegation. The parties declined to stipulate that the evidence presented could be consolidated and considered on the issue of a permanent injunction as permitted under Rule 65(a)(2).

The court having heard the testimony of witnesses, having read and considered exhibits received into evidence, having heard the arguments of counsel and considered the memoranda filed in this matter, hereby enters its findings of fact and conclusions of law.

FINDINGS OF FACT

Defendant, Generix Drug Corporation, is a distributor of human drugs with a trade name of "Goldline" and has a plant in Hollywood, Florida.

Defendant ships its generic formulations containing the active ingredients, listed below, in interstate commerce without approved new drug applications (NDAs):

Allopurinol
Spironolactone with hydrochlorothiazide
Furosemide
Diethylpropion hydrochloride
Chlorothiazide with reserpine
Amitriptyline with perphenazine
Prochloreperazine maleate
Chlorthalidone

The above listed active ingredients, with the exception of chlorothiazide with reserpine, are generally recognized among qualified experts as safe and effective; each has been used to a material extent and for a material time for the uses recommended in the labelling employed by defendant.

Allopurinol is a drug widely used for the treatment of gout. Spironolactone is a drug used in the treatment of hyper-aldosteronism and in the treatment of a variety of edematous conditions.

Furosemide is one of the most widely-used drugs in the United States, and is used to treat hypertension and edema. Diethylpropion hydrochloride is a drug which is used as an adjunct in treating obesity, and is listed in relevant pharmacological text books as an "anorectic".

Chlorothiazide with reserpine is a combination of drugs used in the treatment of hypertension. Each drug has been widely used and each is well known, although studies on the specific combination of chlorothiazide with reserpine are not readily available. Amitriptyline with perphenazine is a drug used in the treatment of anxiety and depression.

Defendant's "Goldline" specific formulations containing the six active ingredients discussed immediately above, together with their inactive ingredients — the excipients — have not been tested. Nor are they generally recognized among experts, who are qualified by scientific training and experience to evaluate the safety and effectiveness of drugs, as safe and effective under the conditions of use prescribed, recommended or suggested in defendant's labelling.

No evidence relative to the safety and effectiveness of defendant's "Goldline" formulations containing the active ingredients of prochloreperazine maleate or chlorthalidone was presented at the hearing.

CONCLUSIONS OF LAW

The question presented in this cause is a narrow one. It involves interpretation and application of 21 U.S.C. § 321(p), which defines the term "new drug" as it is used in the Federal Food, Drug and Cosmetic Act, 21 U.S.C. § 301 et seq. The statute provides that:

The term "new drug" means —
Any 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 condition prescribed, recommended, or suggested in the labeling thereof,
. . . . .
Any 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.

The introduction or delivery for introduction of "new drugs" into interstate commerce without approval of a new drug application (NDA) violates 21 U.S.C. § 355(a), and such conduct can be enjoined pursuant to 21 U.S.C. § 332.

It appears clear that defendants ship "Goldline" products in interstate commerce without having filed new drug applications (NDAs). Therefore, the only remaining task is to determine whether these specific generic drug products are "new drugs". Clearly this task is not a simple one; only a few courts have considered the question, and the interpretations of the statute have been rather varied.

After hearing testimony, this court is of the opinion that this difficulty flows from the complex nature of pharmaceutical manufacturing. The government's first expert, Dr. Roger Palmer, explained the factors and variables involved. Each drug product is composed of an active ingredient, or incipient, which represents up to 10% of the product, and excipients, such as binders, coating, and capsules, which account for the remainder.

A generic drug product represents an attempt by one pharmaceutical manufacturer to copy the drug product of another manufacturer where the active ingredient and excipients in the latter's formulation have been shown to be safe and effective. Because manufacturing techniques and variables differ, each copy of the recognized formulation combines the active ingredient which is generally recognized as safe and effective with excipients unique to the individual manufacturer.

The government's experts testified that the variances in excipients due to different manufacturing processes can directly affect the bioavailability of the active ingredient. Bioavailability is a measure of the time it takes for a given drug product to deliver the active ingredient to the particular organ or area. Additionally, the differences in excipients can affect bioequivalence, a measure based on the comparison of one drug to another. Drug products which are bioequivalent can be used interchangeably for the treatment of the same illness.

Both government experts stressed the differences in bioavailability and bioequivalence between the proved safe and effective "pioneer drug" and the copy may affect the safety and efficacy of the generic drug product. This is especially true where the drug product involved is a sustained release drug. Differing rates of solubility due to differences in excipients may cause "dumping" of the active ingredient into the bloodstream all at once. In drugs where there is high toxicity, this may lead to an overdose.

In essence, the government argues that any difference between excipients renders a drug product a "new drug" within the meaning intended by the statute; the fact that an active ingredient is generally recognized as safe and effective is irrelevant to the discussion, according to the government. In short, the government's position is that generic or "copycat" drugs must receive approval as a new drug unless it is an exact copy of the incipient pioneer drug and also has no difference in excipients. Therefore, it is suggested "Goldline" products of defendant are "new drugs" due to differing excipients. With equal vigor defendants argue that if the active ingredient is generally recognized as safe and effective, the new drug product is not a "new drug" despite differences in excipients.

APPLICABLE CASE LAW

The judicial trail is not clearly defined. Worse than having a fork in the trail, there are three sets of tracks which go off in three widely divergent directions.

In United States v. Articles of Drug (Lannett), 585 F.2d 575 (3d Cir. 1978) rehearing denied en banc, the Third Circuit, by way of dictum, flatly rejected the same argument advanced by the government here and accepted Lannett's argument that "all that is required by the `new drug' section — general safety and effectiveness recognition — has been provided and that bioavailability, bioequivalence and other quality control tests are irrelevant as to safety and efficacy." Id. at 582.

After a reading of Lannett, it becomes apparent that the Third Circuit did not have before it the type of evidence that has been offered in this cause. The evidence presented to this court is clear: differences in excipients can affect bioavailability and bioequivalence, and bioavailability and bioequivalence are intimately intertwined with safety and effectiveness.

In Pharmadyne Laboratories, Inc. v. Kennedy, 466 F.Supp. 100, 102 (D.C.N.J.1979) a district court within the Third Circuit, commenting on Lannett, extensively criticized the Third Circuit's dictum which it perceived as a serious misconstruction of the statutory definition of the term "new drug". In reasoning to the conclusion that the FDA's argument was indeed supported by the statute, the court stated:

In § 355(b), an NDA is to have a "full list of articles used as
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  • US v. Premo Pharmaceutical Laboratories
    • United States
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    • January 20, 1981
    ...52 (S.D.N.Y.1979), see United States v. Articles of Drug (Lannett), 585 F.2d 575 (3d Cir. 1978) ("Lannett"); United States v. Generix Drug Corp., 498 F.Supp. 288 (S.D.Fla.1980); United States v. Pharmacal, Inc., No. 78-3685 (S.D.Fla. Mar. 2, 1979); Pharmadyne Laboratories, Inc. v. Kennedy, ......
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    ...§ 321(p) require an NDA as a condition of marketing. The NDA process is often expensive and time consuming. In the district court, 498 F.Supp. 288, the plaintiff-appellee, the United States, alleged that Generix was distributing "new drugs" without approved new drug applications. The United......
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