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CUTLER v. KENNEDY

July 16, 1979

MIMI CUTLER, PAMELA S. ELLSWORTH, and STEPHEN D. ANNAND, Plaintiffs,
v.
DR. DONALD KENNEDY, Commissioner, Food and Drug Administration, Defendant, and THE PROPRIETARY ASSOCIATION, INC., Defendant-Intervenor.



The opinion of the court was delivered by: SIRICA

This action presents a consumer challenge to regulations adopted by the Food and Drug Administration (FDA) for policing the nation's over-the-counter (OTC) drug market. Although the original plaintiffs Health Research Group and Public Citizen were dismissed as parties for lack of standing, the Court allowed an amendment of the complaint which effectively substituted three individual OTC drug consumers as parties plaintiff. Health Research Group v. Kennedy, 82 F.R.D. 21 (D.D.C.1979).

The defendants, FDA Commissioner Donald Kennedy and the Proprietary Association, Inc. *fn1" now seek dismissal of the action on the grounds that the new plaintiffs lack standing and that their claims are not ripe. *fn2" Because the Court finds that the three consumer plaintiffs have standing to challenge the FDA's OTC regulations and that their claims are ripe for judicial review, it will reach the merits of their motion for summary judgment. *fn3" On the merits, the Court concludes that, whatever the wisdom of the FDA's regulatory scheme from a policy perspective, certain of its aspects are fundamentally inconsistent with the Federal Food, Drug, and Cosmetic Act and are therefore unlawful.

 I.

 A. The Statutory Scheme

 With the enactment of the Federal Food, Drug, and Cosmetic Act of 1938, *fn4" Congress for the first time established a system of premarketing clearance for the nation's drugs. Under the Act, no new drug may be introduced into commerce unless the FDA Commissioner *fn5" first approves a new drug application (NDA) with respect to that drug. Federal Food, Drug, and Cosmetic Act, § 505(a), 21 U.S.C. § 355(a) (1976). As originally enacted, the Act imposed four requirements for NDA approval which were satisfied generally by establishing that a drug was safe for use under the recommended conditions. See id. § 505(d), 21 U.S.C. § 355(d).

 Two additional requirements for NDA approval were added to the original four in a major amendment to the Act in 1962. *fn6" One was that the labeling of the product not be false or misleading. Id. § 505(d)(6), 21 U.S.C. § 355(d)(6). The other, and crucial, addition was a requirement of efficacy. As the Act stands today, new drugs must be efficacious, as well as safe, for the indicated use and there must be "substantial evidence" *fn7" of such efficacy. Id. § 505(d)(5), 21 U.S.C. § 355(d)(5). Significantly, substantial evidence was defined to encompass only adequate and well-controlled investigations by experts. *fn8" In conformance with the new efficacy requirement, subsection (e) of section 505 of the Act was amended to direct the Commissioner to Withdraw approval of a drug's application whenever new information indicates a lack of substantial evidence that the drug is effective. Id. § 505(e), 21 U.S.C. § 555(e). See generally American Public Health Ass'n v. Veneman, 349 F. Supp. 1311, 1315-16 (D.D.C.1972).

 The premarketing clearance requirement does not, however, apply to a drug which is not a "new drug" as that term is defined in the Act. Pursuant to section 201(p), 21 U.S.C. § 321(p) (1976), a drug can be considered a new drug for one of two reasons. The first, and most important, is that a drug is a new drug if it "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." Federal Food, Drug, and Cosmetic Act, § 201(p)(1), 21 U.S.C. § 321(p)(1) (emphasis added). Second, a drug is considered to be "new" if, despite being so recognized, it has not "been used to a material extent or for a material time" under the recommended conditions. Id. § 201(p)(2), 21 U.S.C. § 321(p)(2). In short, then, any drug which is not generally recognized by experts as safe and effective *fn9" or which has not been in use to a material extent and for a material time is a new drug and must be covered by an approved NDA before it can be marketed. *fn10" A drug which is not a new drug, I. e., which Is generally recognized as safe and effective for the indicated uses and Has been in use for a material time under the recommended conditions, need not be covered by an NDA. Such a drug is therefore not subject to either clearance by the FDA before it is marketed, nor active regulation by the agency subsequent to its marketing.

 Although the Act makes it unlawful to market a new drug without an effective NDA, it provides no mechanism for even an administrative determination of new drug status prior to marketing. A manufacturer who believes that his drug is not new may simply market the drug without application to the FDA or official determination of its new or not new status. The Act does, however, provide potentially stiff penalties for a manufacturer who is wrong about the status of his drug. The marketing of a new drug without an approved NDA is a "prohibited act" under section 301(d) of the Act, 21 U.S.C. § 331(d) (1976), and subjects the introducer of the drug to actions by the United States for injunction, seizure and condemnation, and even criminal penalties. See id. §§ 301-304, 21 U.S.C. §§ 331-334.

 The Act is therefore somewhat incongruous in that it provides a stringent scheme for both premarketing clearance and postmarketing regulation of new drugs, but, at least in effect, leaves it up to the introducer of the drug to decide whether his drug is subject to the scheme in the first place. The In terrorem effect of potential judicial enforcement actions, the possibility of penalties, and the extremely broad definition of a new drug as any one not Generally recognized by experts as safe and effective are apparently designed to encourage voluntary compliance and to render the scheme self-policing.

 The addition of the explicit effectiveness requirement in the Drug Amendments of 1962 worked a significant change in the law. Previously, the FDA refused to approve a new drug application on grounds of lack of effectiveness only in limited circumstances, E.g., where the drug was offered for use in treating life-threatening disease. *fn11" Where a drug was safe, ineffective, but essentially innocuous, however, the FDA's only remedy was to seek judicial remedies under the Act's misbranding provision. *fn12" With the 1962 amendments and the explicit requirements of substantial evidence of efficacy for new drugs and general recognition of efficacy for drugs claimed to be not new, the "FDA was faced with the massive task of reevaluating almost all marketed drugs." Smithkline Corp. v. FDA, 190 U.S.App.D.C. 210, 215, 587 F.2d 1107, 1112 (1978). *fn13"

 Congress cushioned the impact of its 1962 revision of the law with comprehensive transitional provisions. First, all new drug applications which were "effective" (the terminology under the original 1938 Act) on the day preceding enactment of the 1962 amendments were deemed "approved" under the amendments. Drug Amendments of 1962, § 107(c), 21 U.S.C. § 321 note (1976). The effectiveness requirements added to section 505 of the 1938 Act were to apply to such drugs only with regard to the FDA's power to Withdraw approval of an NDA for lack of substantial evidence of effectiveness, so long as the recommended conditions of use covered by the NDA did not change. Id. But even this power was suspended for a period of two years following enactment of the amendments. In short, "manufacturers were given two years to develop substantial evidence of effectiveness, during which previously approved NDA's could not be withdrawn by FDA for a drug's lack of effectiveness." Weinberger v. Hynson, Westcott and Dunning, Inc., 412 U.S. 609, 614, 93 S. Ct. 2469, 2475, 37 L. Ed. 2d 207 (1973).

 Second, with respect to marketed drugs which, on the day preceding enactment of the amendments, were Not new drugs (were generally recognized as safe) and were not "covered" by an effective NDA, the effectiveness requirement added to the new drug definition in section 201(p) does not apply to such drug "when intended solely for use under conditions prescribed, recommended, or suggested in labeling with respect to such drug on that day." Drug Amendments of 1962, § 107(c)(4), 21 U.S.C. § 321 note (1976). *fn14" Unlike the grace period provided for most new drugs, this transitional provision confers a permanent exemption from the otherwise comprehensive effectiveness requirements of the amended Act. *fn15" Such drugs are thus "grandfathered" so long as the labeling claims and recommendations do not change from those made in 1962.

 B. The Regulatory Response

 Because the Act excludes only those drugs Generally recognized as safe and effective from new drug status, most drugs not subject to active FDA regulation because they are "not new" are over-the-counter drugs, while most new drugs are sold by prescription only. Consequently, most of the drugs covered by approved NDA's and reviewed in the DESI process were prescription drugs. *fn16"

 Upon completion of the DESI study, the FDA turned its attention to the vast OTC market. In 1972 it adopted procedures for reviewing the safety and efficacy of all OTC drugs in the Drug Review Program. See 21 C.F.R. part 330 (1978) (current version). Seventeen advisory review panels of outside experts were established to review twenty-six groups of OTC drugs (E.g., antacids, cold remedies, contraceptives, dandruff products). Id. § 330.5. The FDA also established general safety, effectiveness, and labeling standards to be used by the panels in evaluating all available data. See id. § 330.10(a)(4). Interested persons are given an opportunity to submit information and to make oral presentations to the panels. Id. § 330.10(a)(2).

 As each panel finishes its study, it prepares a formal recommendation for a "monograph" for its drug group (or groups) "establishing conditions under which the drugs involved are generally recognized as safe and effective and not misbranded (Category I.)" 21 C.F.R. § 330.10(a)(5)(i) (1978). In addition to the recommended monograph, the panels must include in their reports to the Commissioner statements of conditions under which drugs in their group would Not be generally recognized as safe and effective (Category II) and under which the available data are insufficient to classify a drug in Categories I or II (Category III). Id. § 330.10(a)(5)(ii)-.10(a)(5)(iii). *fn17" Because there are hundreds of thousands of OTC drugs composed of a relatively small number of active ingredients, the proposed monograph and the statements specify the active ingredients and related therapeutic claims (the "conditions") which would cause OTC drugs in a particular group to be generally recognized as safe and effective, not generally recognized as safe and effective, or not classifiable due to insufficient data. See id. § 330.10(a)(5).

 In the second stage of the OTC program, the FDA Commissioner reviews each panel's conclusions and recommendations and issues his own proposal for a monograph and for statements of Category II and III conditions. Id. § 330.10(a)(6). The Category II statement sets out "the conditions excluded from the monograph on the basis of the Commissioner's determination that they would result in the drug's not being generally recognized as safe and effective or would result in misbranding." Id. § 330.10(a)(9)(ii). The Category III statement lists conditions excluded because "the available data are insufficient to classify such conditions (in Categories I or II)." Id. § 330.10(a)(9)(iii). In addition, the Commissioner's order containing the proposed monograph must "specify a reasonable period of time within which conditions falling within (Category III) may be continued in marketed products while the data necessary to support them are being obtained for evaluation by the Food and Drug Administration." Id. § 330.10(a)(6) (final paragraph).

 In the third stage, following a public comment period, the Commissioner publishes a tentative final monograph. Id. § 330.10(a)(7). Finally, after receiving objections in response to that monograph, *fn18" he publishes a final order and monograph. Id. § 330.10(a)(9). In this order the Commissioner also issues the final statements or "determinations" of Category II and III conditions excluded from the monograph. See, e.g., 39 Fed.Reg. 19873, 19873-74 (1974) (antacid product determinations). After the effective date of the final order and monograph, any nonconforming (Category II) drug product "is liable to regulatory action," 21 C.F.R. § 330.10(b) (1978), and may not be marketed. *fn19"

 C. The Category III Scheme

 The regulations governing the OTC drug review project were originally adopted in 1974. 39 Fed.Reg. 11741 & 39556 (1974) (1974 version codified at 21 C.F.R. part 330 (1977)). As originally promulgated, those regulations simply noted that the advisory panels could recommend further testing requirements for Category III drugs and a reasonable time period for such testing, 21 C.F.R. § 330.10(a)(5)(iii) (1978), and required that the Commissioner's orders were to "specify a reasonable period of time" for continued marketing of products with Category III conditions while the FDA obtained additional data, Id. § 330.10(a)(6). In the only comprehensive final order to be issued to date, for example the final determinations and monograph for antacid and antiflatulent products the Commissioner stated that marketing of products with certain Category III ingredients and labeling claims could continue for two years from date of publication. *fn20" 39 Fed.Reg. 19862, 19873-74 (1974) (monograph portion codified at 21 C.F.R. parts 331 & 332 (1978)). The original regulations also provided, without much elaboration, that the Commissioner could propose amendment or repeal of a monograph and that any interested person could petition for such a proposal. 21 C.F.R. § 330.10(a)(12) (1977) (amended 1977).

 In response to "numerous requests for clarification of the conditions under which Category III conditions could continue to be promoted and marketed pending further testing," the Commissioner proposed amendments to the OTC procedural regulations in October 1975. 40 Fed.Reg. 49097 (1975). Eventually, the FDA modified those regulations to provide more detailed procedures for amendment of monographs. This was coupled with a new provision authorizing continued marketing of Category III drugs and specifying the ...


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