of safe drugs which are capable of being shown effective, but which do not as yet meet the rigorous testing standards being established by the agency's experts as part of the OTC review process. It is also pointed out that a drug is in Category III even if it is safe and effective for most of its ingredients and recommended uses, but only safe and unclear on effectiveness as to others.
The question before the Court, however, is not whether the FDA has adopted a wise or reasonable policy, but rather whether that policy, as implemented through the OTC regulations and Drug Review Program, is one which is in harmony with the Federal Food, Drug, and Cosmetic Act. It is of course fundamental that "regulations, in order to be valid, must be consistent with the statute under which they are promulgated." United States v. Larionoff, 431 U.S. 864, 873, 97 S. Ct. 2150, 2156, 53 L. Ed. 2d 48 (1977).
In one respect, a great deal of the dispute among the parties could be characterized as semantic. The line between "not generally recognized as safe and effective" and "insufficient data to classify as generally recognized as safe and effective" is not necessarily a bright one. In practical terms, the difference appears to be between the agency being left with a firm conviction that a particular ingredient or labeling claim is ineffective (Category II), on the one hand, and, on the other, a conclusion that existing data suggests that the ingredient or claim might be effective (Category III). See generally Final Order for Antacid and Antiflatulent Products, 39 Fed.Reg. 19862 (1974); Affidavit of William E. Gilbertson, Defendant's Cross-Motion for Summary Judgment, exhibit F (filed Oct. 27, 1977); See also Advertising of Proprietary Medicines, Hearings Before the Subcomm. on Monopoly and Anticompetitive Activities of the Senate Select Comm. on Small Business, 95th Cong., 1st sess., pt. 5, at 1771 (1977) (statement of Donald Kennedy, FDA Commissioner).
Whatever the precise significance of a Category III determination, however, one point is abundantly clear. The Commissioner's OTC regulations formally authorize the continued marketing of Category III drug products in the absence of an administrative determination that those products are, today, generally recognized by experts as safe and effective. This flies in the face of the statutory scheme.
Under the Act, with very limited exceptions not here relevant, drugs can be lawfully marketed in only two ways. They are either new drugs which must be licensed, or they are generally recognized by experts as safe and effective, and are therefore not subject to active regulation. The goal of the Act is to insure that Every marketed drug is both safe and effective.
There are no other possibilities, no interim provisions under which safe, but only potentially effective drugs can be marketed pending testing. Even assuming that defendants are correct that Category III drugs are not Necessarily unlawful new drugs, there is no question that they are Potentially unlawful new drugs. To say that the Commissioner has the authority under the Act to affirmatively sanction the marketing of such drugs, effectively exempting them from the enforcement provisions of the Act for periods ranging from two to at least five years, is nothing less than a frontal assault on the premarket licensing scheme of the Food, Drug, and Cosmetic Act.
It is also plainly inconsistent with the rigorous nature of the Act's general recognition requirement. The Hynson case establishes that the general recognition exception to the new drug requirements is a narrow one indeed. As the Supreme Court recently observed: "Based on the structure and purpose of the statutory scheme, this Court in (Hynson ) interpreted § 201(p)(1) to require an "expert consensus' on safety and effectiveness founded upon "substantial evidence' as defined in § 505(d) of the Act, 21 U.S.C. § 355(d)." United States v. Rutherford, supra, -- - U.S. at -- n. 7, 99 S. Ct. at 2474 n. 7. Indeed, the general design of the Act is that drugs will be supported by substantial evidence of efficacy prior to ever being marketed in the first place. See Weinberger v. Hynson, Westcott & Dunning, supra 412 U.S. at 631, 93 S. Ct. 2469.
Yet the Commissioner has and will continue to permit OTC drugs to be marketed for potentially indefinite periods merely on a finding, following years of study by expert panels and the agency itself, that the "available data are insufficient to classify" an ingredient or labeling claim as generally recognized or not.
Finally, the challenged regulations, however well intentioned, are fundamentally at odds with Congressional intent as manifested by the specific transitional provisions for the new effectiveness requirements imposed in the 1962 Drug Amendments. See part I-A, Supra. For new drugs covered by an NDA on October 12, 1962, the effect of those provisions was to postpone the new efficacy requirement for a period of two years. After that, such drugs were subject to NDA withdrawal proceedings if they lacked substantial evidence of effectiveness. Drugs which were being marketed as Not new at the time (generally, the OTC drugs which were then generally recognized as safe), were simply grandfathered. When "intended solely for use under conditions prescribed, recommended, or suggested in their labeling" at the time of enactment of the amendments, such drugs are permanently exempt from the requirement that they be generally recognized as effective. (Neither defendant has contended that a significant number of drugs subject to the Drug Review Program are grandfathered.) All other drugs primarily drugs which were reformulated,
were introduced onto the market after the enactment of the 1962 amendments, or which were then being marketed as generally recognized as safe but whose labeling indications changed were Immediately subject to the new requirement of efficacy. In light of these comprehensive and detailed transitional provisions, the Commissioner's decision, over a decade later, to further cushion the impact of the efficacy requirements through a sort of Category III grace period cannot be reconciled with the clear intent of Congress to make those requirements immediately applicable to all but a limited class of OTC drugs.
The Court concludes that the challenged regulations are unlawful to the extent they affirmatively sanction continued marketing of Category III drugs.
The question of appropriate relief raises an additional, and difficult, issue. As noted above, part of plaintiffs' requested relief is an order directing the Commissioner "to take all appropriate steps" to remove any Category III drug from the market which is not covered by an NDA. The assumption underlying this request is apparently that the Commissioner, in addition to exceeding his statutory authority by authorizing the marketing of Category III drugs, has violated a statutory duty or abused his discretion by not moving to do just the opposite removing them from the market.
The Court is sympathetic to plaintiffs' frustrations with the history of enforcement of the Drug Amendments of 1962. It is now almost seventeen years after the effective date of those amendments and, putting legal niceties of characterization aside, the FDA is nevertheless granting manufacturers of many OTC drugs a lengthy grace period in which to develop the substantial evidence of effectiveness for various claims and ingredients which, under the Act, should have been developed years ago. And this is certainly not the first instance in which serious questions have been raised concerning either the industry's, See Weinberger v. Hynson, Westcott & Dunning, supra, 412 U.S. at 626-27, 93 S. Ct. 2469 (industry "tactics of delay and procrastination"), or the agency's, See American Public Health Ass'n v. Veneman, 349 F. Supp. 1311 (D.D.C.1972), compliance with their statutory responsibilities.
On balance, however, even assuming that placement of a drug in Category III, absent grandfather status or coverage by an NDA, is tantamount to a finding of illegality under the Act, the Court cannot agree with plaintiffs that the Commissioner must move to take such drugs off the market.
First, plaintiffs have not attempted to demonstrate that the Commissioner has a duty to seek enforcement action against every unlawfully marketed drug. Certainly, the statutory scheme and traditional notions of prosecutorial discretion
would suggest just the opposite.
Only new drugs must be reviewed by the Commissioner prior to marketing. With regard to drugs not subject to active regulation as new drugs, the Act is not self-executing. The agency's ultimate remedy is to request the Justice Department to bring enforcement actions in a federal district court in the name of the United States. See 21 U.S.C. § 337 (1976); Weinberger v. Bentex Pharmaceuticals, 412 U.S. 645, 650-53, 93 S. Ct. 2488, 37 L. Ed. 2d 235 (1973). Congress did cast certain of the Commissioner's drug review duties in mandatory, non-discretionary terms. See 21 U.S.C. § 355 (1976). But with regard to his duty to institute enforcement proceedings, what little indication there is in the Act is to the contrary. See 21 U.S.C. §§ 335-337 (1976). Section 306 of the Act, in fact, states that the Commissioner shall not be required "to report for prosecution, or for the institution of libel or injunction proceedings, minor violations of this chapter whenever he believes that the public interest will be adequately served by a suitable written notice or warning."
Second, and wholly apart from the question of the agency's discretion, the Court believes that the more extensive relief sought by plaintiffs is unwarranted under traditional principles of equity. The parties have identified only one drug product Gaviscon currently being marketed pursuant to a Category III determination. With regard to future Category III orders, the Court's decision to void the marketing authorization feature of the challenged regulations will afford the FDA an opportunity to amend its regulations in any way it sees fit. In these circumstances, it would be unwise and injudicious to require the agency to take steps immediately to remove Category III drugs from the market as they are finally classified. The agency may prefer to revise the system.
It should be emphasized, however, that the FDA may not lawfully maintain Category III in any form in which drugs with Category III conditions (as Category III conditions are presently defined) are exempted from enforcement action. Informally, of course, the FDA will be free to exercise its discretion to seek enforcement actions or not to seek enforcement actions. It may thus be argued that the Court's ruling simply permits the agency to accomplish informally and indirectly what it cannot accomplish in a formal order. But that is the system Congress created. As a general matter, the 1962 amendments exempted many OTC drugs from the effectiveness requirements, but only so long as their composition and labeling did not change. In the years following enactment of the amendments, as OTC drugs were reformulated and relabeled, they immediately became subject to the requirement that they be generally recognized as effective, as well as safe. Congress, however, mandated no systematic regulatory review of such drugs, continuing to allow the introducer of the drug to determine, in the first instance, whether the drug had in fact achieved general recognition, among experts, of effectiveness. And it added no new enforcement tools or review mechanisms to insure compliance.
As with the original 1938 Act, OTC drugs which did not meet the new effectiveness requirement would be subject to seizure, injunction, and criminal penalties. The Court's decision today requires that this system again be permitted to operate with respect to Category III drugs.
An appropriate Order declaring the regulations unlawful insofar as they authorize the marketing of Category III drugs and enjoining the Commissioner from implementing the offensive aspects of those regulations, accompanies this Opinion.