Upjohn Company v. Finch

• Decision Date: 10 July 1969
• Docket Number: Civ. A. No. 163.
• Parties: The UPJOHN COMPANY, Plaintiff, v. Robert H. FINCH, Secretary of Health, Education and Welfare, and Herbert L. Ley, Jr., Commissioner of Food and Drugs, Defendants.
• Court: U.S. District Court — Western District of Michigan

303 F. Supp. 241

The UPJOHN COMPANY, Plaintiff, v. Robert H. FINCH, Secretary of Health, Education and Welfare, and Herbert L. Ley, Jr., Commissioner of Food and Drugs, Defendants.

Civ. A. No. 163.

United States District Court W. D. Michigan, S. D.

July 10, 1969.

COPYRIGHT MATERIAL OMITTED

Henry Ford, Jr., Kalamazoo, Mich., Stanley L. Temko, Washington, D. C., for plaintiff.

Harold D. Beaton, U. S. Atty., Grand Rapids, Mich., William W. Goodrich, Asst. Gen. Counsel, U. S. Dept. of Health, Education & Welfare, for defendants.

Gould Fox, Kalamazoo, Mich., and Lloyd N. Cutler, Washington, D. C., amicus curiae Pharmaceutical Manufacturers Assn.

OPINION

KENT, Chief Judge.

This action arises under the Federal Food, Drug and Cosmetic Act, 52 Stat. 1040 (1938), as amended; 21 U.S.C.A. § 301 et seq. (hereinafter the Act) and the Administrative Procedure Act, § 9, 5 U.S.C.A. § 558. The plaintiff asserts that this Court has jurisdiction of this cause pursuant to the provisions of Title 28 U.S.C.A. § 1331; 28 U.S.C.A. § 1337; 28 U.S.C.A. §§ 2201, 2202 and Section 10 of the Administrative Procedure Act, 5 U.S.C.A. §§ 701-706. Plaintiff asserts that venue is in this Court pursuant to the provisions of 28 U.S.C.A. § 1391(e) (4).

FACTS

Plaintiff is a Delaware corporation with its principal place of business in Kalamazoo in the Western District of Michigan. The defendants are officers of the Government of the United States. Plaintiff is the manufacturer of certain antibiotic drugs, the subject of this litigation, which drugs are marketed under proprietary names. The drugs in question are referred to as "combination" drugs. Specifically, the seven products involved are:

(1) Albamycin-T Capsules, containing tetracycline hydrochloride and sodium novobiocin.

(2) Panalba Capsules, containing tetracycline phosphate complex and sodium novobiocin.

(3) Panalba Half-Strength Capsules, containing tetracycline phosphate complex and sodium novobiocin.

(4) Albamycin-T Flavored Granules for Suspension, containing tetracycline hydrochloride and calcium novobiocin.

(5) Panalba KM Flavored Granules for Suspension, containing tetracycline and calcium novobiocin.

(6) Panalba KM Drops, Flavored Granules for Suspension, containing tetracycline and calcium novobiocin.

(7) Albamycin G.U. Tablets, containing calcium novobiocin and sulfamethizole.

In 1956 the Commissioner of Foods and Drugs (hereinafter Commissioner) acting pursuant to § 507(a) of the Act, 21 U.S.C.A. § 357(a), promulgated regulations (now §§ 141(c).234 and 146(c).234 of the regulations of the Food and Drug Administration) providing that certain antibiotic drugs containing a combination of tetracycline and novobiocin could be certified as safe and effective. 21 Fed.Reg. 10373. The plaintiff's Panalba products were first approved and certified by the Food and Drug Administration as being both safe and effective in 1956, and they were put on the market in 1957.

In 1958, pursuant to § 505 of the Act, 21 U.S.C.A. § 355, the Commissioner permitted a New Drug Application to become effective for the marketing of a drug containing calcium-novobiocin and sulfamethizole (which is not an antibiotic). Subsequently, and in 1964, pursuant to amendments of § 507(a) of the Act, making all antibiotic drugs subject to certification as to safety and efficacy, the Commissioner promulgated § 148(j).4 of the Regulations of the Food and Drug Administration, 21 C.F.R. 148(j).4, providing for the certification of antibiotic drugs containing calcium/novobiocin and sulfamethizole. 29 Fed.Reg. 7655.

In 1964 the Commissioner submitted to the Drug Efficacy Study Group of the National Academy of Sciences-National Research Council a large number of previously approved drugs for evaluation as to safety and efficacy. After receipt of the report of the NAS-NRC, and on December 24, 1968, the Commissioner acting pursuant to § 502 and § 507 of the Act, 21 U.S.C.A. §§ 352/357, published in the Federal Register a notice of his intent to initiate proceedings to amend the antibiotic regulations to delete plaintiff's tetracycline/novobiocin combination antibiotic drugs from the list of drugs acceptable for certification as to safety and efficacy. 33 Fed.Reg. 12904. The Commissioner stated that the basis for his action was a finding by the NAS-NRC that plaintiff's named products are "ineffective as a fixed combination for the indications specified in the labeling" and the Commissioner's concurrence "that there is a lack of substantial evidence that each ingredient in the above combination contributes to the claimed clinical effect." (Emphasis added). The notice of December 24, 1968, invited "all interested persons who may be adversely affected by removal of these drugs from the market to submit any pertinent data bearing on the proposal" within 30 days. At the request of the plaintiff this period was subsequently extended by the Commissioner for a period of 120 days, in a letter dated January 24, 1969. On the same day, December 24, 1968, the Commissioner, pursuant to § 502 and § 507, also published in the Federal Register a notice of his intent to initiate proceedings to delete plaintiff's combination novobiocin/sulfamethizole drug from the list of drugs acceptable for certification. 33 Fed.Reg. 19203. The stated basis for the Commissioner's action as to this drug was the same as to plaintiff's other drugs and the same extension of time to submit pertinent data was given.

On February 25, 1969, Paul A. Pumpian, Director, Office of Legislative and Governmental Services, Food and Drug Administration, Department of Health, Education and Welfare, addressed a letter to the Honorable Sam J. Ervin, Jr., United States Senate (Exhibit A to plaintiff's brief in support of the motion for temporary injunction) which read in part as follows:

"These combination antibiotic drugs are still on the market. The distributors were given the opportunity to supply evidence that the drugs are effective for the purposes for which they are labeled. If adequate data to substantiate the effectiveness of these combinations are not forthcoming within the period of time, the distributors of the drugs will be given an opportunity for a hearing prior to any action to remove these drugs from the market. If a hearing is held and decided in favor of the Government, the final order may be appealed to the courts. Until such time as the antibiotic regulations are amended to delete these drugs from those eligible for certification, the drugs may continue to be marketed. Withdrawal of the drugs from the market would not preclude clinical investigation of them through the investigational new drugs procedures. Based upon a demonstration of effectiveness by adequate and well-controlled studies, a drug may be returned to the market." (Emphasis added.)

On the hearing of this cause plaintiff's counsel pointed out that in March, 1969, there was submitted to the Commissioner for an approval a protocol (meaning plan) for controlling clinical studies of the drugs in question. According to counsel these have not yet been approved or disapproved subsequent to inquiry in May, 1969. In the first week of May, 1969, the Commissioner informed the plaintiff of an intent to repeal the regulations providing for certification of plaintiff's combination drugs listed above for failure to submit controlled clinical studies of the safety and efficacy of such drugs, and allowed the plaintiff two days in which to acquiesce in such order. Not having received such acquiescence on May 15, 1969, the Commissioner, pursuant to § 502 and § 507 of the Act, published in the Federal Register an order amending the regulations of the Food and Drug Administration providing for the repeal of the regulations permitting the certification of plaintiff's combination drugs listed above, revoking all certificates previously issued, and stating that no further batches would be certified. The order repealing the regulations stated that it was based upon "a lack of substantial evidence that the drugs will have the effectiveness they purport and are represented to have, and more particularly, that each ingredient in the above combinations contributes to the claimed clinical effect of the drugs." (Emphasis added.)

The existing outstanding certificates were revoked "on the basis of the unwarranted hazard" in the light of the drugs asserted lack of efficacy although there was no finding of an imminent hazard to health. The order stated it was to become effective 30 days after its publication "to allow time for a recall (of plaintiff's product) to be completed." 34 Fed. Reg. 7687. The order provided that objections to the order could be submitted within the 30 day period and a hearing could be requested. It went on to say that "a statement of reasonable grounds for a hearing must identify the claimed errors in the NAS-NRC evaluation and identify any adequate and well-controlled investigations on the basis of which it could reasonably be concluded that the combination drugs would have the effectiveness claimed and would be safe for their intended uses." There was no provision for a stay of the order pending a hearing on objections. 34 Fed.Reg. 7687.

On May 27, 1969, plaintiff filed in this Court a complaint for declaratory judgment and injunctive relief reciting the facts hereinbefore related and alleging that defendants "acted in excess of their authority and without observance of the procedure required by law and arbitrarily and capriciously in that the Order contravenes plaintiff's right to an evidentiary hearing prior to the removal of its products from the market." Plaintiff claims a right to an evidentiary hearing before removal of the drugs from the market based upon

(1) Sections 507(b), (f) & (h) of the Act, 21 U.S.C.A. § 357(b), (f) & (h);

(2) 5th Amendment to the United States Constitution;

(3) The regulations issued by the Commissioner on April 8, 1969. 34 Fed.Reg. 6237-9;

(4) Section 9 of

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