WEINBERGER v. HYNSON, WESTCOTT & DUNNING
Legal provision: Federal Food, Drug, and Cosmetic, and related statutes
Argument of Freedman
Chief Justice Warren E. Burger: -- this morning in a series of related cases which I'll indicate only by number, 72-395, 72-414, 72-528, 555 and 666.
Mr. Freedman, you may proceed.
Mr. Freedman: Mr. Chief Justice, may it please the Court.
These five consolidated cases present important questions under the 1962 amendments to the Federal Food, Drug & Cosmetic law.
Under the predecessor statute, the Food and Drug Administration in granting pre-marketing clearance to new drugs is limited to considering the safety of those drugs, that's it views, whether the drug was safe, and the major change made in the 1962 amendment, insofar as these cases are concerned, is that this pre-marketing clearance was extended to cover the effectiveness of drugs as well as their safety.
And these cases present before the Court the questions of the standards under the statute and the procedures by which the Food and Drug Administration is to determine the effectiveness of the large number of drugs now on the market, and thereby to protect the public against the distribution in interstate commerce of ineffective drugs.
The statutory provisions are quite detailed and complicated.
And in order to put the issues in a proper perspective and indicate the interrelationship among the issues in the cases, before discussing the particular cases, I would like to make a rather generalized statement that is applicable to all of the cases, in which I'll first describe the background and history of the statute, then deal with its particular provisions, and finally explain the administrative statute that the Food and Drug Administration has taken to implement the statute.
After this opening statement, which according to my best estimate should take around 20 minutes, the cases will then be argued in three separate segments.
The first segment will consist of the Bentex and CIBA cases, which I will argue for the government, and in each segment, the case will be viewed as a separate case.
That is, the opening argument will be made by the government in the first two, and by respondents, petitioners' counsel, the Drug Company in the third, then there will be an answering argument, and this in turn will be followed by rebuttal.
So if the Court will have in the way of an oral presentation, as an opening statement applicable to all of the cases followed in effect by three separate consecutive arguments, in which as I think it will develop the issues are somewhat interrelated.
Now the starting point in the analysis of the statute is the 1906 Food & Drug Act.
Now that Act prohibited to the distribution and interstate commerce of adulterated and misbranded drugs, but the Act had no provision for pre-marketing clearance of the drugs by any administrative agency.
The only sanctions under that Act were proceeding to forfeit the misbranded or adulterated drugs and criminal prosecutions.
In 1938, as the result of a tragic accident in which a number of people died, as a result of taking a drug that had not been tested and proved to be unsafe, Congress passed the Federal Food Drug & Cosmetic Act, which for the first time provided for pre-marketing clearance of drugs, before the drugs could be distributed in interstate commerce.
The statute prohibited the introduction of any new drug, unless there was in effect an application that had been filed with and permitted to become effective by the Secretary of Agriculture.
These applications for the marketing of new drugs are known in the industry as NDA’s, New Drug Applications, and both the government and the counsel for respondents will use that term to describe them.
The statute also provided that after notice and opportunity for hearing, the Secretary could deny any application for new drug approval if he found either that the drug was not safe or that he was unable to find that it was safe, and finally, it permitted the suspension of an approved New Drug Application if subsequent evidence developed to show that the drug was unsafe.
The 1938 statute also substantially expanded the enforcement authority of the Food and Drug Administration.
It gave the administrate, correction, the Secretary of Agriculture; the statute in terms delegates the powers to the Secretary of Agriculture and that was transferred to the Secretary of Health, Education and Welfare, but he has delegated virtually all of his powers under the statute to the Food and Drug Administration, and I would use the term Secretary and Food and Drug Administration interchangeably.
It -- the statute authorized the Secretary to promulgate regulations for the efficient enforcement of the Act, gave the agency authority to conduct investigations, and finally expanded the District Court authority to include suits for injunction in addition to forfeiture in criminal proceedings.
Now the processing of these New Drug Applications is a --
Chief Justice Warren E. Burger: Mr. Freedman, before you go into that, prior to the 1962 amendment, if you will tell me again, what was the mechanism, the enforcement mechanism, was it only a cease-and-desist order --
Mr. Freedman: No, no --
Chief Justice Warren E. Burger: -- or injunction?
Mr. Freedman: No, in addition to that, in addition to that under the 19 -- before the 1962 Act, the Secretary had authority to deny approval to a New Drug Application if he either found that the New Drug Application, that the drug was not safe, or that they had failed to find it was safe, and in addition to that, he had the authority to withdraw approval after notice and opportunity for hearing, if subsequent developments after the NDA had become effective, indicated the drug was not safe.
Then in addition to that if there were the ancillaries, we believe the ancillary remedies of proceedings in the District Court under which -- under the 1938 Act, prior to the 1938 Act, they could only proceed under -- through criminal proceedings or forfeiture, but the 1938 Act expanded this to give Food and Drug, the government the authority to seek injunctive relief in the District Court.
But as a practical matter, as a practical matter because of the nature of drugs and public concern, it's a rare instance in which a drug manufacturer would attempt to market a drug, if the Food and Drug Administration concluded that it could not permit the New Drug Application to become effective.
In other words, our basic position here is that the primary enforcement method that Congress selected in the 1938 Act, and increased and improved, and the 1962 Act was the administrative procedure of pre-drug marketing, pre-marketing clearance for drugs.
That is, that the agency would stand at the gateway before the drugs could get into the channels of interstate commerce, and say, whether or not they would permit these drugs to be distributed.
Justice Potter Stewart: With respect to NDA’s, the New Drug Applications?
Mr. Freedman: That is correct, that is correct.
Justice Potter Stewart: And you are going to deal, I suppose, with the so called “me-too” drugs?
Mr. Freedman: Yes, I will come to that in one or two minutes Mr. Justice.
After just making this one point that the processing of these New Drug Applications is an extremely time consuming and difficult task, they are huge things; they are filled with a mountain of scientific information.
They may have statements from as many as several hundred doctors giving their views on these drugs, they are papers, they are lengthy analysis.
I am told that they are sometimes occupy as much as several hundred volumes.
They may fill half of a room, and obviously, it would have been an enormous task for Food and Drug just to process these applications as they were filed, and I would mention that in the period between the 1938 Act, and 1962 Act, Food and Drug processed and permitted to become effective almost 10,000 of these applications, and at the time the 1962 Act was passed, it was estimated there were approximately 4,000 of these applications covering drugs that were then being distributed.
Now the fact of life in the drug industry is that there are a large number of drugs on the market, which are basically the same generic drug, but with various chemical differences, that they are fundamentally the same, but they have slight variations.
Most of these drugs would come on the market after a New Drug Application had become effective.
What would happen is one or two New Drug Applications would come on the market, the drug would be in use for two or three years, and it turned out to be safe, and of course, under the 1938 Act, safety was the sole criteria for passing on New Drug Applications.
And following this, a large number of other pharmaceutical firms would put on the market, sell their products for normally labeled, label goes of course to the doctor, we are not talking of a label on the package of packed medicine, this is the label that tells the doctor what the drug will do, label, basically making the same or very similar claims to those in the drugs whether the new drug applications were outstanding.
Since under the 1938 statute, the test of a new drug was whether the drug was safe, and since by definition, after these New Drug Applications had been determined to be safe, the so called 'me-too' drugs which is what the industry calls the drugs that a pattern after the NDA drugs, but for which no NDA is in effect, they came to be recognized as not new drugs or old drugs, and they came on the market.
The estimates are that in the prescription drug field, there is anywhere from 5 to 13 'me-toos' for every drug with respect to which an NDA is outstanding.
So that by 1962 when the amendments were passed, the best estimate is that there were probably 30,000 to 50,000 drugs outstanding in the 'me-too' category, and that is just in the prescription drug field.
In addition to the old accounted drug field has vastly greater number.
It's impossible to know, but the best estimate of Food and Drug would probably, there were 200,000 drugs in all over-the-counter market.
Justice Potter Stewart: Now NDA means New Drug Application, application?
Mr. Freedman: Application, but it is also the --
Justice Potter Stewart: In one of the, in the Court of Appeals opinion in one of these case I think, there seems to be some confusion that Court thought it meant New Drug Approval?
Mr. Freedman: Well, it's used interchangeable --
Justice Potter Stewart: Well, how do you -- how are you going to use it?
Mr. Freedman: I am going to use it primarily as New Drug Approval, that is as a New Drug Application that has been approved, and the phrase is sometimes used as NDA, but what I think I will do is, when I am speaking of the application refer to it as the application, and when I am speaking it to the approval, I will use the short phrase, NDA.
Justice Potter Stewart: So NDA is going to be your code for New Drug Approval?
Mr. Freedman: That is the approved application, improved application.
Justice William H. Rehnquist: Mr. Freedman, when you talk about drugs, you mean, something more than just an identical chemical compound that has a different trade name, you mean something that has a similar, but not identical chemical compound --
Mr. Freedman: Well, it may be identical, it may actually be identical, but at least it's similar.
Justice Byron R. White: Almost (Inaudible) and also includes any drug certified by NDA?
Mr. Freedman: Now Mr. Justice, it's used in the trade, it's used in the trade to relate just to drugs, which are similar to the drugs which are NDA.
Justice Byron R. White: I guess there are lot of other drugs that are coming through NDA?
Mr. Freedman: Oh yes, they are.
Justice Byron R. White: What you call them --?
Mr. Freedman: Just --
Justice Byron R. White: Just drugs --
Mr. Freedman: Drugs?
Oh, they are mostly -- they are in the over-counter-market, and they are many, many hundreds of them --
Justice Byron R. White: Are those involved in this case?
Mr. Freedman: They are not directly involved in this case, but some of the principles involved in this case will be significant, when Food and Drug implements its recently established procedures to determine the effectiveness of the over-the-counter drugs.
Chief Justice Warren E. Burger: Could you imply that to common Aspirin, to illustrate how it relates to it?
Mr. Freedman: Well, common Aspirin at the moment I assume is viewed as a drug that is both safe and effective.
Chief Justice Warren E. Burger: And it long predates, 1938.
Mr. Freedman: It long predates, it's not a prescription drug, it's over-the-counter.
There is of course no NDA for common Aspirin.
Now there are various compounds of Aspirin.
There is Bufferin, various types of analgesics.
They are advertised, many of them are advertised, perhaps as effective for various things.
Food and Drug may want to consider, whether in fact, the claims made for Aspirin and related Aspirin drugs, whether these claims are valid in the sense that the drug is effective for the particular condition that it is alleged that it can alleviate.
Now, let me take you one step beyond that.
Suppose one of the Aspirin companies came out and announced that they discovered that if took four tablets of Aspirin four times a day, it would cure Acne.
This would be a new claim, and under the statute even though there is no NDA, it would be necessary for the -- to the – excuse me, Food and Drug could consider whether the drug would be effective for that particular new claim.
Justice Byron R. White: If they put it on the label?
Mr. Freedman: If they put it on the label.
Now with the limited staff that Food and Drug has, it was obviously impossible for it to police this vast number of new drug, of these drugs, and particularly the 'me-toos.'
Occasionally they brought a proceeding against a violator which was a sporadic thing, but by and large, in this period, the Food and Drug Administration could not deal with the vast number of 'me-toos.'
Justice Harry A. Blackmun: Mr. Freedman, just how limited is the staff, is it a small staff?
Mr. Freedman: Relatively small, at the time of the statute I think in 1962 the budget was just few million dollars, it's expanded somewhat, a good bit now, but nevertheless it seems the staff is still inadequate to handle the policing job, if you were trying to police this on a drug-to-drug basis.
A hearing, if you have full hearing on a single drug, it can take 3 or 4 months, and when we point out that they are just thousands of these drugs, and one of our points is, it'd just be impractical for a Food and Drug Administration to deal with them on a single drug-to-drug basis.
Justice Harry A. Blackmun: Well, I fail to find anything very specific in the record, is it a staff of 60 or 5000, or does anybody know?
Mr. Freedman: Sir, I am advised 6000 altogether, but this includes all the scientific people, the technical people, the statistical people, and so on.
That may seem like a lowest staff Mr. Justice, but it's an enormous problem, and they assure me the staff is quite inadequate to deal effectively.
Justice Potter Stewart: Now 6000 in the drug part of FDA?
Mr. Freedman: No, no, that's the whole agency.
Justice Potter Stewart: Oh!
Justice Harry A. Blackmun: I can assure you I am aware of the anomaly of the problem.
Justice Potter Stewart: This involves people involved with Food and cosmetics?
Mr. Freedman: Food and Cosmetics.
Justice Potter Stewart: And the various aspects of the FDA jurisdiction over the all three?
Mr. Freedman: Yes, -- all of the premise and selling.
The actual number of people working on the drug phase of the --
Justice Potter Stewart: And on New Drug Application --
Mr. Freedman: New Drug Application.
Justice Potter Stewart: -- specifically, would be much smaller success?
Mr. Freedman: Much smaller, oh yes.
Justice Byron R. White: And I just think of the lawyers?
Mr. Freedman: Unfortunately, [Attempt to Laughter] they don't have enough lawyers either Mr. Justice.
Now between 1959 and 1961, the Senate conducted lengthy hearings on the Drug Industry, and one of the things that came out in these hearings, was that the Food and Drug Administration was powerless to deal with the fact that many, many drugs were ineffective to accomplish the claims made for them, and the problem was recognized as a serious one.
There was a great deal of testimony, but Food and Drug of course, at this time had no authority to provide pre clearance approval for marketing drugs on the grounds of ineffectiveness.
And Congress in 1962 closed this regulatory gap by giving Food and Drug for the first time the authority to apply the pre clearance technique to the effectiveness of the drugs, as well as their safety.
And under the amended statute in Section 505, the Secretary is required to disapprove an application for a new drug, if he finds there is substantial evidence, I am sorry, if he finds there is a lack of "substantial evidence" that the that drug will be able to have the effects, and do the things claimed for the drug on the label.
The Congress also heard at these hearings of the importance, in ascertaining the effectiveness of drugs, that there be adequate clinical scientific studies, there was repeated testimony of, much of which which have summarized in our brief in the Hynson case, repeated testimony that you cannot determine how effective a drug is, merely because various doctors state that they use it in their practice and they found it worked, there has to be some kind of a control.
Justice Potter Stewart: Is that what was called the anecdotal report?
Mr. Freedman: The anecdotal testimony.
Justice Potter Stewart: The phrase --
Mr. Freedman: Yes.
Justice Potter Stewart: That's what anecdotal is?
Mr. Freedman: Anecdotal.
The doctor said he treated 6 patients for this condition and they recovered, yes.
That – the Congress did a very unusual --
Justice Byron R. White: Or died?
Mr. Freedman: Excuse me.
Justice Byron R. White: Or died?
Mr. Freedman: Not normally --
Justice Potter Stewart: But the anecdotal evidence --
Mr. Freedman: -- the doctors -- the anecdotal evidence doesn't bring that.
Justice Potter Stewart: Right.
That's what is meant by the anecdotal.
Mr. Freedman: Anecdotal as distinguished from the scientific clinical studies.
Congress did a rather unusual thing in this statute, because of the evidence before it, that clinical studies were important.
When it said -- it said in the statue that the Secretary should not approve a New Drug Application, unless he found by 'substantial evidence' it was effective, it went on and defined in the statue what it meant by the substantial evidence.
Now substantial evidence under this statute means something very different than substantial evidence in the traditional administrative statutes.
It defines substantial evidence in the statute as constituting, meaning, adequate and well controlled investigations, including clinical investigations by experts qualified by scientific training and experience, to evaluate the effectiveness of a drug involved.
And Congress also expanded the definition of new drug to cover effectiveness, so that a new drug is now defined as one not generally recognized among the experts qualified by scientific training and experience, to evaluate the safety and effectiveness of drugs.
Two other things that the statute did in the way of strengthening the administrative authority of the Food and Drug Authority; first under the predecessor statute in 1938, a drug new application became effective automatically, unless the secretary affirmatively disapproved it.
This was changed in the 1962 Act, to provide that the application did not become effective unless the Secretary affirmatively approved it.
The statute also provided that after an interim period of two years the Secretary was required, if on the basis of new information before it, there was a lack of substantial evidence that the drug will have the effective, proposes to have, in that situation the Secretary was to withdraw approval of the New Drug Application.
Finally, there is in the statute a "grandfather" clause, which I will not go into, because that will be discussed in some of the succeeding cases, under which certain drugs that were being distributed on the effective date of the statute are exempt from the effectiveness requirements as could be expected as a shortest agreement between the government and the companies as to the meaning of that exemption.
Justice Potter Stewart: Is still your grace period began run with the enactment of the statute?
Mr. Freedman: Statute for October 1962, so that it meant that until October 10th 1964, Food and Drug could not began proceeding to withdraw the new drug approvals, on the ground that the drugs would be ineffective.
Now the food and Drug Administration recognized immediately that with 4000 New Drug Applications outstanding, approved applications, NDAs, it just couldn't itself undertake with it's limited staff to evaluate everyone of these.
So what it did was, it called upon a group of eminent scientists, the National Academy Sciences and it's constituent National Research Council, for aid in determining the validity of the effectiveness claims of this large number of drugs.
And what the National Academy of Sciences did was, it set up panels; 30 panels, each panel containing 6 experts with respect to the particular type of drug involved.
The companies were requested to submit all evidence they had concerning the effectiveness of their drugs as claimed to these panels.
The panels then evaluated each of these drugs, and made recommendations to Food and Drug with respect to their effectiveness.
They evaluated the drugs, and what happened was as follows.
These panels found all of these drugs, these 4000 NDAs that were reviewed, 7% were ineffective.
A considerable number were described as effective, and the balance was somewhere in between, they described, and it was possibly effective, probably effective, effective, but effective with respect to some claims and not all.
Many of the labels of course suggested the drug was suitable for more than one condition, and of the 4000 NDAs, there were approximately 16,000 claims, and the National Academy of Science panels found that only 19% of these alleged claims of effectiveness were valid.
After these studies were made the Food and Drug Administration had a large conference with the industry in the January of 1968, and it announced that it's policy would be to apply the conclusions of the National Academy of Sciences to all drugs, not only to the drugs that were covered by the NDAs, but also by the 'me-too' drugs.
And what they announced, they said that they would do, is they would issue notices and opportunity for hearing, whether as to all of the NDA manufacturers whose drugs were found ineffective, and that they would permit the 'me-toos' to come in to those hearings to be heard.
Following -- the best estimate was that as a result of these procedures, they would have to conduct something like a thousand hearings, and in 1969, in the hope of making this problem manageable, they issued further regulations in which they defined what would constitute an adequate and well controlled study, and very specifically they told exactly what it had to be, and they also said that if a manufacturer requested a hearing, they would not grant a hearing unless he produced as indicated as the substantial evidence that he would produce, that type of evidence, that is the well controlled studies.
The validity of this regulation is at issue in another one of these cases.
And then finally in 1972, the Food and Drug Administration issued another regulation which more specifically put the 'me-toos' on notice, that the withdrawal of the NDA for the so called the "pioneer" drugs would also apply to the 'me-too' drugs.
Justice William H. Rehnquist: Mr. Freedman, does the statute give the Commissioner expressly authority to define by regulation the statutory language in 505 (d) pertaining to "substantial evidence."
Mr. Freedman: There is a specific general authority to promulgate rules and regulations, Section 701 and it's a very broad statute, it authorizes them to promulgate rules and regulations necessary for the effective implementation of the Act.
There is no specific provision giving the Commissioner authority to define further, what constitutes "substantial evidence," but we believe that as a general exercise in administrative authority this broad rule making power does permit him further to define and particularize the standard of "substantial evidence," which Congress provides.
He is not changing it, he is merely explaining what is meant by well conducted clinical studies and investigations.
Now we think that this legislative history that I have given, privatizes and brings home three things, which I just like to reiterate now, because I think they are critical to the legal issues in the cases.
First, by the 1962 amendments, Congress intended to take off the market, to take off the market drugs that had not been shown to be effective.
And Congress decided to do this primarily by expanding the authority of the Food and Drug Administration, it's pre-marketing clearance authority to cover effectiveness as well as safety.
It required that the definition of whether a drug be effective, be put in terms of high probative scientific studies.
Secondly, as I think I have indicated, Food and Drug was faced with this enormous administrative problem and it couldn't possibly deal with the situation on the basis of a drug-by-drug procedure, of bringing 4000 separate proceedings.
It had to deal with it on a more comprehensive basis and finally, we think the method it has selected, the use of the National Academy, with it's panels of experts, the opportunity given to the manufacturers to come in after the scientific studies have been made and to show why in effect, in fact, their drugs were effective in accordance with their claims under principles of adequate and well controlled clinical investigations, it was a reasonable and fair method of dealing with the problem.
And with this as the background, I now would like to turn to the two cases I am going to argue, the Bentex case, which is here on Certiorari to the Fourth Circuit and the CIBA case which is here on Certiorari to the Third Circuit.
The question in each of these cases, is whether the Food an Drug Administration has jurisdiction to determine, whether a product is a new drug to which the pre-marketing clearance procedures and the withdrawal procedures of Section 505 of the statute are applicable.
Our contention is that the Secretary and the FDA does have that authority.
The Fourth Circuit held and the respondents contend that he does not, and as they view his authority, the only thing he can do is pass upon applications for new drug approvals or withdraw previously affective applications.
He cannot according to their theory decide the threshold question, whether or not, something is a new drug.
Bentex involves a drug to deal with the mental problems of senility.
Now Bentex is a 'me-too' manufacturer.
There is no NDA outstanding for Bentex as product, but prior to 1962, there were three NDAs outstanding for a similar product.
Upon its review of these drugs, the National Science Foundation Panel concluded that these drugs were in affective for their stated purposes.
After evaluating the academy studies, Food and Drug concluded preliminary that there was not 'substantial evidence' of effectiveness, and put out a notice of hearing, so stating and giving the manufacturers of these three drugs the opportunity to request a hearing, to show why the drug was effective, and it also invited any interested persons who might be adversely affected by the removal of these drugs from the market to participate it.
And finally the notices stated that withdrawal of NDAs for these three drugs will cause any such drug on the market to be a new drug for which an approved New Drug Application is not in effect, and will make it subject to regulatory action.
One of the three NDA holders submitted some material which Food and Drug found was not the substantial evidence as defined by the statute.
And after a second notice published in the Federal register, which again gave interested parties the opportunity to come in, and which again pointed out that the withdrawal of the NDA would cause the 'me-toos' to be new drugs.
Food and Drug Administration withdrew its approval of the three NDAs covering this drug.
No Court review was sought of that action by the three NDA manufacturers.
Now under Food and Drug's view of law, the withdrawal of the NDA also had the affect of making the 'me-toos' into new drugs, subject to the pre-marketing clearance, and accordingly Food and Drug sent out letters to a number of manufacturers of the 'me-too' drugs pointing this at to them, and it specifically sent such a letter to Bentex as reprinted in the opinion of the Court of Appeals, and asking Bentex what its intentions were with respect to removing this drug from the market?
Justice Potter Stewart: How could then -- how could the administration know about, know what all the 'me-too' drugs were --
Mr. Freedman: Well, we don't know --
Justice Potter Stewart: -- at least until the 1972 legislation that you haven't mentioned?
Mr. Freedman: We don't know -- we are not sure that these are all 'me-too' drugs.
We do know that 22 of these people brought this lawsuit.
They sent out to those that they knew about it.
I think they are informed people, they have some knowledge.
They may not have gotten all for me.
Justice Potter Stewart: But there was no a real way, except from their general knowledge of the industry?
Mr. Freedman: There is no real way, except for the drug registration statute, and that will no be effective till to June of this year.
Justice Potter Stewart: That was not enacted till 1972?
Mr. Freedman: That's right.
They did had no way, but they did know, they did know at least that Bentex and some of others were manufacturing this drug.
Now the response of Bentex to this request for information as to what it was going to do remove the drug from the market, was to bring to a lawsuit for a declaratory judgment, in which Bentex is joined by 22 other 'me-too' manufactures.
They sought a declaratory judgment that their products were not new drugs, and were not subject to the application procedures of Section 505.
The government -- the District Court moved to dismiss the suit on the ground that the District Court had no jurisdiction to determine this question, that this was a -- we made two arguments.
One, that this was a matter within the exclusive primary jurisdiction to Food and Drug and secondly, that since Bentex had had the opportunity to come into the proceedings for the withdrawal of the NDAs, Bentex was barred from litigating this question in the District Court.
The District Court rejected those arguments, and held that it and Food and Drug had concurrent jurisdiction, but it also rejected the plaintiffs' contention in that lawsuit that the District Court had exclusive jurisdiction to determine the question of new drug status.
And what it said was, that the authority of the Food and Drug Administration to approve, or withhold approval of the NDAs, necessarily implies authority for Food and Drug to determine the threshold question of whether the Article involved is a drug which requires an approved new drug application for lawful interstate shipment?
And the Court then said, that it thought it was appropriate that the Food and Drug Administration should decide this question in the first instance, because it said, the nature of the proof relevant to that issue makes Food and Drug the more able arbitrator of the question.
So the evaluation of conflicting reports in the field is not a matter well left to a court without chemical or medical background.
And accordingly, the District Court deferred any proceedings in the case, until Food and Drug had an opportunity to conduct a hearing on the new drug issue.
The government did not appeal that aspect of the case, and has accepted the remand.
Though I want to make it quite clear to the Court that while we do, if the Court agrees with us in this case, plan to hold a hearing, we do not contemplate that the hearing will be of the typical evidentiary trial type hearing.
We think it will be appropriate to conduct a hearing along the rule making lines which the agency is now using in this case.
Justice Byron R. White: What is the specific company -- again a specific issue as to whether or not a -- rather a new drug?
Mr. Freedman: Yes.
Justice Byron R. White: But what is the underlying question?
Mr. Freedman: Well, there are --
Justice Byron R. White: Is this the -- this is its reputation or what?
Mr. Freedman: Well --
Justice Byron R. White: Or its actual problem.
Mr. Freedman: Well, that's a matter of disagreement.
Again, it's the statutory definition of new drug, one which is generally recognized among this group of experts as being effective for it uses.
And that we think as Mr. Frey will develop,we think that the general recognition standard in the statute is something in addition to the 'substantial evidence.'
That is, we think that if a panel of experts concludes that there's not substantial evidence based on well conducted clinical studies to show that the drug is effective, the same experts could not --
Justice Byron R. White: Possibly be --
Mr. Freedman: -- possibly be recognize its general effectiveness.
We think the recognition is something else, that's the issue.
And for example, there maybe questions in these cases, they claim that they are not a new drug, because the 'me-too,' the NDA drugs contain an additional element that their drug doesn't contain.
They say one of the drugs was administered intravenously, another is orally and that's the distinction.
So there are two questions really; one --
Justice Potter Stewart: Oh isn't -- don't they really claim that no 'me-too' drug, can be a new drug?
Mr. Freedman: That is another claim, that is a claim.
They also claimed that it is covered by the 'grandfather' exemption.
Justice Potter Stewart: Right, right.
Justice Byron R. White: (Inaudible) another problem?
Mr. Freedman: That's another problem.
Justice Byron R. White: But you say, for the new drug thing, clinically to rule making title?
Mr. Freedman: Not a rule making title.
What I am suggesting Mr. Justice is, we do not contemplate that there would be a hearing in the sense of a trial type hearing at which large number of doctors will take the stand and give their opinion.
They will have full opportunity to bring to the attention of the Commissioner all pertinent material bearing on their claim, that their drug is not a new drug, because it is effective or because it's covered by the 'grandfather' exemption.
Justice Byron R. White: And then title hearing required that, so is that an issue here?
Mr. Freedman: I think that is an issue, because of the fact that in one of the other cases a hearing was denied, because of the failure of the parties to produce the kind of evidence requisite.
Justice William H. Rehnquist: When you say a rule making hearing Mr. Freedman, you are not talking about a hearing whose ultimate object is to promulgate a rule, are you?
You are talking about a hearing for the purpose of adjudicating particular facts with respect to these drugs?
Mr. Freedman: To these drugs; I use the word rule making perhaps too loosely.
What I would suggest it would be a hearing appropriate, concerning all the circumstances for determining this question which is not the same thing as the kind of a hearing to decide for an instance whether an employer fired a man for his union activities or for inefficiency.
Justice Byron R. White: But it still be an adjudicate -- but it would be a hearing for the purpose of making it adjudication?
Mr. Freedman: Yes, it would be a hearing to determine --
Justice Byron R. White: Any one that's to be made on the record?
Mr. Freedman: On the record, and we say, and would be traditionally revealable.
Chief Justice Warren E. Burger: But then that would be to fix a definition basically, would it not?
Mr. Freedman: Well, I don't think so Mr. Chief Justice, because the statute has to --
Chief Justice Warren E. Burger: Well, wouldn't it have prongs; one would affect the particular parties involved now, and the other would be to establish a definition?
Mr. Freedman: Whether it would be to establish a definition, a determination as to whether this type of drug, whether this type of drug is effective and there would be I suppose two issues.
One would be the issue as to whether or not these people’s drugs are -- they would have the opportunity under this particular hearing procedure to come in and produce any additional evidence not before, for example, the National Academy proceedings, why their drug is effective?
That is if they had well established studies that had not been presented, they could present those to the Commissioner.
In addition, they could come in and explain why they think their drug is different from the FDA drug, so that their drug, whatever one might say as to the NDA drug, as to why the 'me-too' drugs are not new drugs?
Why their drugs are effective even though the 'me-too' drugs have been -- although the FDA drugs have been determined not to be effective.
If I may just --
Justice Thurgood Marshall: What worries me about this new drug, number one, it's not a new drug?
Mr. Freedman: That's a word of art, Mr. Justice.
Justice Thurgood Marshall: Yeah, I know, but that’s what gets me confused.
Suppose the 'me-too' drug has an additional ingredient in it, which makes it effective?
Mr. Freedman: If it makes it effective under the standards, if it makes it effective under this standards, then it would not be a new drug.
In other words, if it was effective, if it's effective, then it does not have to meet with the --
Justice Thurgood Marshall: Well, where does he get a chance?
As I understand is, as soon as his NDA people lose there, he automatically loses his?
Mr. Freedman: That's under the theory, because he had the opportunity to come in.
Now we are not arguing that in this case.
In this case, we are not arguing, but it's --
Justice Thurgood Marshall: This is one of them.
Mr. Freedman: Pardon?
Justice Thurgood Marshall: Isn't it in one of them?
Mr. Freedman: No, it's not in one of them.
What is is the question is, whether the kind of evidence they have to produce, they have to produce that.
Justice Thurgood Marshall: That's what I mean.
Mr. Freedman: Yes.
But we are not contending in this case, we are not contending in this case, that they are barred.
That's what we argued in the District Court.
The District Court rejected, that was in the field, although for the future we are going to take position, if they had the opportunity to come in and produce all the evidence in the proceeding, and if they don't do it, they are barred.
Now the Court of Appeal just briefly held in this case that the --
Chief Justice Warren E. Burger: You are still speaking of the Fourth?
Mr. Freedman: -- Fourth Circuit in the Bentex case held that the Food and Drug Administration has no jurisdiction to decide New Drug Applications.
It said basically that the statute has two different procedures.
Food and Drug can do nothing, but pass on applications for approval and withdraw approved applications if it finds that they are not, the drug isn't effective, but it cannot do anything in the way of trying to determine the threshold question of whether something is a new drug.
That they said is a question solely for the District Court to be decided either in a declaratory judgment suit brought by the manufacturers or to be decided by the District Court when the government moves against the drug.
Now, and I will just briefly turn to the facts in the CIBA case, which presents the same issue though in a different context.
CIBA did have an NDA, and its drug was reveiwed by the National Academy of Sciences, the claims were found ineffective.
They went through a whole series of procedures, notices were given.
The climax of this was that Food and Drug withdrew the NDA for CIBA’s drug.
CIBA took that question to the Court of Appeals for the Second Circuit, the Second Circuit affirmed.
At this point -- in the interval, CIBA then filed a District Court suit in New Jersey, in which CIBA claimed that it was not a new drug, and that it was exempt, and it wanted to have that issue determined.
The District Court dismissed, the Third Circuit affirmed, basically following the reasoning of the District Court in the Bentex case saying that when Food and Drug undertook to withdraw the New Drug Application, that it necessarily had -- must have decided the threshold question of whether it was a new drug, that CIBA challenged the order of Food and Drug in the Court of Appeals, and when the Court of Appeals upheld that decision, it will also upheld the determination that this was a new drug.
Now, the problem in this case and the reason we think that the Third Circuit is correct and the Fourth Circuit is in error is that --
Justice Byron R. White: Did you say that Third Circuit agreed on concurrent -- said concurrent --
Mr. Freedman: No, the Third Circuit said that the Food and Drug Administration had jurisdiction to decide the new drug question that it had necessarily decided it when it withdrew the application that, that was affirmed by the Second Circuit and there was no occasion for CIBA to be permitted to re-litigate the new drug question in an independent suit brought --
Justice Byron R. White: So you mean to say whether a District Court would have jurisdiction to consider the very question?
Mr. Freedman: No, it did not - - all that it held was that Food and Drug did have jurisdiction and that of course is the only issue directly involved in these cases whether the Food and Drug has jurisdiction.
Now the problem we have with the decisions of the Fourth Circuit in this case, and the contentions of the respondent is that it would basically transfer to the District Courts, to the District Courts the primary enforcement responsibility, that is, it would bar Food and Drug from making these threshold determinations, even though Congress in the 1962 statute made it's intention quite clear that it intended to strengthen the hand of Food and Drug in withdrawing from the market the drugs posed, stated to be ineffective.
Chief Justice Warren E. Burger: Will that be a de novo proceeding in the District Court?
Mr. Freedman: Oh yes, that will, under that theory it would be a de novo proceeding.
Justice William H. Rehnquist: Under the Fourth Circuit rule of Food and Drug can refer for prosecution, it can initiate in that matter, can't it?
Mr. Freedman: It can initiate in that matter Mr. Justice, but it cannot deal with the vast bulk of these applications, because prosecution is not really -- in this field is not an effective method.
It's not an effective method for getting off the market these thousands of drugs which seemingly on the basis of the National Academy of Science and Studies are ineffective.
That is to the whole purpose, the whole purpose of this statute was to give Food and Drug administrative authority, to do the job that it had not been able to do under the 1938 Act.
And the issues for example in defining the new drug as distinguished from determining whether there was 'substantial evidence' of effectiveness.
There is a disagreement between the parties as to exactly what the standards.
But however one defines the standard, it seems to me it's the kind of question, it's a kind of question that calls for expert skills and knowledge.
These are analysis of detailed scientific information from ecological studies.
It's the kind of thing, it's the kind of thing, the kind of expert issue that traditionally is for the administrative agencies.
And we think the District Court in the Bentex case was well warranted in sending this matter to Food and Drug.
It's traditional that administrative agencies have authority to determine their own jurisdiction, that's the threshold question.
When a claim is made that somebody, to an agency, that someone is doing something in violation of a statute the agency administers, the first question the agency has to decide, is whether or not the thing is covered by the statute?
Before you decide whether there is a violation, you decide it whether the statute is covered.
And before you can decide whether or not a New Drug Application is required, you'll have to find out whether it's a new drug, and it seems to us rather incongruous to suggest that Congress which attempted to strengthen FDA's authority in the 1962 amendments, intended to deny to FDA this kind of authority to determine it's own jurisdiction that agencies traditionally have.
Chief Justice Warren E. Burger: Thank you Mr. Freedman.
Argument of Clyde A. Szuch
Mr. Clyde A. Szuch: Mr. Chief justice, may it please the court.
The Government continues to refer to a threshold issue in connection with approvals of the New Drug Applications.
In order for there to be a threshold issue, something must be decided.
It would be our position that in connection with the prosecutions and filings of New Drug Applications, there is in fact no threshold issue, because there is no jurisdictional issue for the Food and Drug Administration to decide.
If we --
Chief Justice Warren E. Burger: Then you agree that the District Court would have the de nova proceeding to resolve these questions?
Mr. Clyde A. Szuch: We would take the position that the issue of new drug, old drug, only comes about in connection with actions of enforcements, such as seizures, prosecutions, criminal natures or injunctions brought by the Food and Drug Administration after it has concluded independent of a New Drug Application, that the product out there in the market is in fact a new product within the meaning of Section 201 (p), as opposed to section 505 of the Act.
If one looks at Section 505 and one examines what actually happens, I believe that the threshold issue will disappear.
When a manufacturer has a drug which it wishes to market it has the initial obligation of determining whether the drug is new or old.
If he decides, or it decides that the drug is in fact a new drug, it then goes to the administration and files a New Drug Application seeking approval of that application.
Once the New Drug Application has been presented to the administration, there is no longer any issue before it, as to whether that drug is a new or an old drug.
The manufacturer says nothing in it's application to the Food and Drug Administration on that issue.
The statute calls for nothing on that issue.
The matter is put before the authority.
It decides and then we are off.
Taking the other situation of the withdrawal; the fact that the drug is new or old is irrelevant to whether the Food and Drug should withdraw it's approval of the NDA which may be filed.
For example, even if one were to assume, and concede, the government and the manufacturer, that the drug were an old drug, if the manufacturer were not filing the requisite reports required by 505, it seems mandatory that approval of the New Drug Application be withdrawn for that reason.
There does not seem to be any option in the statute we would submit, which would authorize the administrator to decide that he is not going to act in this particular instance to not withdraw, because the drug is old.
Similarly there --
Justice Potter Stewart: Now, that has happened, he has done it, hasn't he?
I remember reading that in the briefs.
Mr. Clyde A. Szuch: He may do it but the fact --
Justice Potter Stewart: He has done it.
Mr. Clyde A. Szuch: And he has done it, but the fact that he has done it, does not mean that the statute would permit him to do it, we would suggest Mr. Justice.
Justice Potter Stewart: But it doesn't mean either that the mere fact of an application waives any right on the part of the applicant or concedes, that it is a new drug either, does it?
Mr. Clyde A. Szuch: No, it does not, because a manufacturer with an old drug may choose to file a New Drug Application form, with the authority to get the comfort that the approval --
Justice Potter Stewart: To say that we are filing this for a ruling that this is not a new drug?
Mr. Clyde A. Szuch: No, we will file this for a ruling that the material for an approval of the New Drug Application, which would not involve the issue of whether the drug were new or not new.
Justice Potter Stewart: Or not new, but I had understood from -- there is a mass material I must say.
Mr. Clyde A. Szuch: It is a mass --
Justice Potter Stewart: Sorry, the weather was not worse over the weekend, because I had to stay inside the whole weekend.[Laughter]
I thought I remembered reading in here that sometimes the administration had said, this is not a new drug, you don't need to -- and it's responsive --
Mr. Clyde A. Szuch: If you go to them, they are prepared apparently to give you an advice or opinion on whether you have an old drug or a new drug.
Justice Potter Stewart: That's what I understood, and they have done so.
Mr. Clyde A. Szuch: And they have done so.
On the other hand if a manufacturer simply comes in with a New Drug Application and lays it down and says, I want approval of this, then whether it's new or old, has in affect been determined by the manufacturer, and in that approval procedure he puts nothing forward on the issue.
As I understand it the Food and Drug Administration has never requested any information on that subject in connection with the approval process.
Justice Potter Stewart: On the issue of whether or not it's a new drug?
Mr. Clyde A. Szuch: New or old drug.
It is only when the advisory opinion has been sought, that that issue seems to have been determined by the government.
Justice Potter Stewart: I see, thank you.
Mr. Clyde A. Szuch: Therefore we would submit that to discuss threshold is wrong.
505 does not in any way involve the issue of whether the drug is new or old.
The approval of a new drug application we submit, has to be approved or disapproved, whether the drug involved is new or old.
On the other hand, once a manufacturer puts into commerce his product and there is not an approved new drug application on file for that product, the FDA may decide for itself that the product is in fact a new product.
This decision would be under Section 201 (p) of the statute which defines whether a product is a new or an old drug.
Now here under 201 (p) proof is required that there is not general recognition amongst experts that the product is safe and effective.
If that proof does not exist, the product is new.
The government suggests that it's incongruous that there would be two different schemes and two different approaches to this issue.
We would submit however that there is logic to this dual route on this issue.
Number one, the statute doesn't put this issue before the government under 505.
Number two, the 201 (p) test applies to a limited number of drugs, those that were being marketed between 38 and 62.
Now as to those drugs, Congress could well have concluded that the field of expertise present in the people out in the countryside working with the products that were out there every day that there were experts comparable to the kinds of experts that the administration could find in their own administrative proceedings and we would suggest that it was concluded that the field of expertise was not exclusive to the agency.
We are not dealing with products or items that are peculiar to an agency's expertise.
After all, this is medicine.
All the expertise on that subject is not vested in the FDA.
There is a vast reservoir and storehouse acknowledge in this area, in the hospitals, in the colleges and universities.
And we would submit that Congress in effect said that if those people that are out there working with the products, not the lay bee, but people who are expert in their field, if those people concluded that this product was generally recognized as safe and effective then that product could be marketed and that a manufacturer need not go before FDA and produce reams of evidence on useless issues.
Chief Justice Warren E. Burger: Is there any other regulatory scheme Mr. Schuck that functions on that kind of the structure that you can suggest?
Mr. Clyde A. Szuch: No I cannot, because essentially I think that the structure here is peculiar because of the subject matter with which we are dealing, SEC, Labor Board and agencies of that type or dealing with statutory problems, statutorily created agencies, that are dealing with statutory problems that have gained expertise and knowledge over the years in a limited area.
Medicine was being practiced long before we decided we ought to have an FDA or government regulation and for that reason I think it is different and I don't believe there is a counterpart to it in any other agency.
Chief Justice Warren E. Burger: Well that, do you think that squares with the 1962, the purposes underlying in 1962 amendments?
Mr. Clyde A. Szuch: Yes I do because I don't think that the 1962 amendments Mr. Chief Justice changed the procedure with respect to how the FDA processed new drug applications other than to add the one issue of efficacy, but the procedural mechanisms of how the inquiry by the FDA began is identical pre 62 as post 62.
Pre 62 only involve the issue of safety, but it was the manufacture that triggered the process of the NDA by coming in and asking for approval of it.
Post 62, the situation procedurally is exactly the same.
Chief Justice Warren E. Burger: Well, I have seen various figures some of them in here and some elsewhere about the number of -- the estimated number of drugs on the market today as compared with 13 or 14 years ago and it's an enormous multiplier, isn't it?
Mr. Clyde A. Szuch: It is that.
It has gone up dramatically for all kinds of reasons, but the the fact that the number of drugs has gone up, I would submit does not negate the fact, that there are people who are just as equipped to determine whether a drug is safe and effective under 201 (p) standard as the NAS people were under the substantial evidence of efficacy standard and 505.
Chief Justice Warren E. Burger: That's something of a self regulatory system in a fact than you are suggesting?
Mr. Clyde A. Szuch: No, not exactly, because under the 201 (p) standard where you must establish a general recognition of safety and efficacy, it is still incumbent upon a manufacturer to produce evidence through experts recognized as presumably to testify that the proposition that this particular product is safe and effective.
Chief Justice Warren E. Burger: But when you said testify, you mean testify in a traditional sense or do they testimonial?
Mr. Clyde A. Szuch: No, no, no, no, we are not talking about the so called anecdotal evidence.
Chief Justice Warren E. Burger: I just want to be sure, which sort of those two are?
Mr. Clyde A. Szuch: Right, I think the anecdotal evidence, it would be on a totally different plain, as I would understand it, that's either that the local pharmacists or the local patient or a particular doctor who is not qualified, qualify generally, but not qualified particularly from an expert point of view to testify, is not that type of evidence that 201 (p) is looking for under the test.
201 (p) as set for the page 475 of the joint appendix says that the experts must be qualified by scientific training and experience to evaluate the safety and effectiveness of the Drugs as safe and effective for use under the conditions prescribed.
So that it is incumbent to produce people with this high level of skill which we would submit will result in no lesser consideration of whether the drug is in fact safe or effective than the standard which is found under 505.
It is just an alternate method of arriving at the same result if you would.
I turn over to, unless there are further questions from the Court, the balance of this argument to Mr. Thomas.
Chief Justice Warren E. Burger: Mr. Townes?
Argument of George F. Townes
Mr. George F. Townes: Mr. Chief Justice and may it please the Court.
First regarding our products.
They are not “me-too” products.
We have contended throughout and that issue is not before you.
The issue before you in our case is whether -- the question of whether our products are old drugs and when I use the term “old drug,” I include a drug which may currently be generally recognized both as safe and effective and drugs which enjoy the grandfather provisions as to whether that determination invalidly be made by the Food and Drug Administration in some sort of Administrative procedure.
Although the Congress designated that determination in an appropriate case to be made solely by the federal judiciary starting with an action in the District Court.
Justice Potter Stewart: The term “old” the phrase “old drug” is not an statute, is it?
Mr. George F. Townes: No sir, it is not.
It is used to say --
Justice Potter Stewart: The question is whether or not these are new drugs and that is what's in the statute and that's kind of term of art, is it not?
Mr. George F. Townes: The phrase --
Justice Potter Stewart: We talk quite loosely about old drugs and the new drugs in the generic measured meaning of those words.
What -- the question is here, is whether or not this a “new drug” within the meaning of the statute?
Mr. George F. Townes: Yes Sir.
Justice Potter Stewart: And the word -- the phrase “old drug” is not in the statute anywhere, is it?
Mr. George F. Townes: It is not.
Justice Potter Stewart: Right, thank you.
Mr. George F. Townes: Now, let me illustrate the great difference that is involved in determining whether a drug is new and determining whether a “new drug” application should be approved.
If my clients had sat back and awaited enforcement proceedings in a District Court as they had the right to do, it would have been incumbent on the government as prosecutor against them for selling an unapproved “new drug” to prove that the drug was in fact new.
Now, under the definition and under a number of Court decisions, the most widely respected being the Klikova (ph) case which is also a very an attaining case to read, the government would produce two or three or four qualified experts, typically chairman of particular medical department, well recognized specialist.
They would be placed on the stand and asked after their qualifications were illustrated to what extent were they familiar with the reputation among qualified experts in this field as to the safety of this product for the uses that the product is supposed to be for.
And they would explain how they kept day-to-day track of the literature, they subscribed to many journals, they went to many symposiums, they read many books, they conversed with their colleagues and attended the meetings and they were familiar with reputation and then he would ask them, “what is it that reputation?”
And he would say well, nobody – frequently most drugs are pretty safe so let's this expert say this one is recognized it safe and then he will be asked, “is it recognized as effective?”
And he would say, well, frankly no, it used to be a long time ago.
Few people thought it did pretty good job and tried, there weren't any good studies of it and as time went on, we realized that it really didn't work and nobody pays attention to it now.
Now that is the Government's case really in so many words.
A manufacturer, if he is attempting to defend this case and very, very, very few of these cases either have been defended or will be defended because the burden on the manufacture is extremely great.
Once that testimony has been put up against, he has got to, by he is own experts of equal statute really, if you want, you have to have equal statute, show that for summaries, the government experts were mistaken in their estimate of their colleague's general opinion.
Now very few of these cases in fact arise for that simple reason.
It would be rare and it is rare that you would not immediately appreciate what the consensus of informed opinion was concerning a product.
The Klikova (ph) case is a case in which the manufacturer did prevail.
There was a Virginia case and the man had a headache remedy, he thought Klikova (ph) was cute name for it, consisted of Aspirin and Caffeine and few other things and it was the Government's position that he was in some way representing as to the effective for alcoholism.
And the Court said, no, he is just saying a hangover and hangover symptoms and Aspirin is effective for headache and then you have a headache when you have a hang over and so forth and so on.
So out of a number of variations of this product, the Court did feel that in one instance the Government was really being too extreme and that this was safe and effective for that limited use.
Now that is the type of issue.
This flood of litigation is not going to appear.
A very few cases have been litigated in the past.
The industry has always understood, this to be a District Court issue and the issue is this reputation of the Drug among the Scientific Community.
Now granted in a trial the reputation will be discussed and explored and what do you -- what do your colleagues think it's not worth, but all the court has to pass on is that reputation.
Now that is an entirely, entirely different issue from the issue of whether a drug in fact has been demonstrated to be safe and effective under the criteria of Section 505, the new Drug application proceeding.
That is a scientific question.
But as a matter of fact under this branding procedure for example, Congress itself puts on the court certain burdens of passing on scientific questions.
You are prosecuted for misrepresenting this drug to be effective for particular use.
The government must prove it's ineffective under this branding.
Now, the FDA has died out as a police agency, I say the FDA it's predecessors under the 1906 Act.
In 1938, Congress said, well, for a new drugs, for new drugs let's require pre marketing clearance.
Now Congress was talking about a new drug, something new and it came up with a definition which is as good definition as you can come up with.
At that point, a new drug was defined as a drug which qualified experts generally did not regard as safe and it's a difficult definition to apply at times, but I don't see how you can improve on it.
Now as to everything else in the 1938 Act pertaining to this general situation, there were these police powers created.
If you ship a new drug without approval, if you mis-plan the drug, if you adulterate a drug, the product can be seized in a District Court.
You can enjoined in the District Court, you can demand a jury or you can be prosecuted in a District Court.
Chief Justice Warren E. Burger: Would that proceeding affect just the particular drug involved and a particular party before the court or would it effect all the so called 'me-too' or piggy back --
Mr. George F. Townes: It would effect only the drug in authority.
In a seizure action, the Marshal goes and takes a quantity of the goods.
Chief Justice Warren E. Burger: It's a typical forfeiture --
Mr. George F. Townes: Right.
Chief Justice Warren E. Burger: -- like a lot of others?
Mr. George F. Townes: And you may and may not choose to defend it.
The true owner may by this time be the druggist, the manufacturer may defend it, he may not.
Injunction again, would be addressed towards such persons as may be made parties to the injunction, I can conclude that you can make a number of persons parties and --
Chief Justice Warren E. Burger: If you could identify all the people who had comparable --
Mr. George F. Townes: Yes sir, as many as possible.
Actually the Food and Drug, I think knows more than it would admit as to who makes what because for a generation now since back they regularly go on to plants, picked up the labels and everything.
I just don't think they had the opportunity to collect the information as fully as the new information act would allow that the information is there in the archives.
Chief Justice Warren E. Burger: But this proceeding that you are talking about is one and which you test out the issue on the general reputation as distinguished from clinical testing?
Mr. George F. Townes: The clinical, yes, scientific studies.
Chief Justice Warren E. Burger: Well which – and that's -- I am trying to sort these two out.
You said you are bring in people who have used the two, who heard about it, who read about it.
This is what might be called the general reputation in the scientific medical community --
Mr. George F. Townes: Yes sir.
Chief Justice Warren E. Burger: -- relating to this material.
Now is that something that's different from the controlled clinical laboratory testing process?
Mr. George F. Townes: Yes sir it is entirely.
Chief Justice Warren E. Burger: And you don't think that second, the controlled clinical or laboratory approach is involved in this District Court approach?
Mr. George F. Townes: Not at all.
If I may be so (Inaudible), I don't think it is, but we have a number of cases of this type, not declaratory judgment, this is inverse seizure action or inverse injunction action, instead of wait for them to come for us.
I think is a public service if we take the position that we arrive at, we bound together.
We got 20 people in one suit with saying, you say you are doing wrong, we are not wait for you to come after us, we will find it right now and we should not -- the jurisdiction should not depend on whether we wait for our product to be seized or we wait to be prosecuted.
Jurisdiction should be the same whether the actions for declaratory judgment on these issues or whether it's enforcement action, there can't be any difference.
If there is a difference, there is a penalty in effect to the bringing of a declaratory judgment action which this would never be.
Justice William H. Rehnquist: Does the Food and Drug administration have any authority to issue seize and desist order?
Mr. George F. Townes: No sir, not as such.
They write two letters that in their opinion you are doing wrong.
Now the ordinary response is that you quit doing wrong.
If you have a valid disagreement with them and feel the matter is capable of litigation, then you await their seizure, you await their injunction or you made declaratory judgment action.
Justice William H. Rehnquist: All of those proceedings are in the District Court?
Mr. George F. Townes: Those are all District Court proceedings.
But the issues are so different in a new drug application.
You are supposed -- the -- every criteria relates to the results of scientific test and the question of whether a drug is new or old, you are talking about Professor so and so, yes I am familiar with aspirin.
I know its reputation in scientific world.
I read volumes about it.
I discussed it and everyone in scientific community in my opinion recognizes aspirin to be safe for this purpose.
On the other hand, I am further familiar with acne remedies to use Mr. Freedman's example and I am familiar with aspirin and in my opinion no one in the scientific world recognizes aspirin to be effective for acne.
So the resulting holding by the court is that aspirin is now recognized as safe for the treatment of acne, aspirin is not only recognized as effective for the treatment for acne.
Justice Thurgood Marshall: Then you don't agree that the 1962 Act was to scrap the FDA?
Mr. George F. Townes: The 1962 Act made no change as to jurisdiction, absolutely none.
It said from now on new drug applications must contain evidence of effectiveness.
Justice Thurgood Marshall: It did change the procedure by putting specifically what they meant by the evidence?
Mr. George F. Townes: They changed what they meant by evidence of effectiveness as relates to the criterion in a new drug application, to add effectiveness, to add the criteria of effectiveness.
Now let me point out what those criteria -- those criteria are quite interesting.
Justice Thurgood Marshall: Well there is a off set you have in the District Court?
Mr. George F. Townes: That it off sets in more senses than one Mr. Justice.
The Congress was concerned that a drug like Genoas (ph) vaccine or penasoms (ph) early days, might be generally effective, but repudiated by medical community which does have its academic biases.
So what it said was if you can produce proper case which will lead a competent observer to come to a -- get exact price, but a proper conclusion that this is effective and then everybody may disagree with you.
The scientific community may not reach the results he reached, but I think in good faith he could reach these results eventually it allowed to be marketed.
So actually substantial evidence test in many senses is the word, is an expansion of the right of innovation and experiment.
Justice Thurgood Marshall: But in the District Court could you use the same criteria?
Mr. George F. Townes: No sir, in the District Court the question is do experts generally in the field --
Justice Thurgood Marshall: This is where I am confused.
You say that you want to go to the District Court?
Mr. George F. Townes: Yes sir.
Justice Thurgood Marshall: But couldn't you do better with the FDA under those rules?
Mr. George F. Townes: Well, you got two problems, Mr. Justice.
One is that these are not the people, my clients are not the people that developed these products originally.
While they have and that is certain, little test of their own, they are not tested adequately to meet these standards.
Now if we can show that the community generally recognizes this product to be both safe and effective then our whole test is much sample than that.
Now this general reputation of proof is both a terrible burden in the sense that you got to get qualified academic people who say yes, everybody knows this drug, it's good it works.
This is a way it should regarded.
If you can get that which is a terrific word than the method of proof is very simple.
You pull in your three witnesses, they testify for a morning or so and you do not have to go through all these all these elaborate testing procedures and so forth, because the community accepts the drug.
Chief Justice Warren E. Burger: Mr. Townes, let me go back to that illustration which you both accepted about aspirin being a cure for acne and this is a new claim that's made.
Mr. George F. Townes: Yes sir.
Chief Justice Warren E. Burger: Now is it your position that this can be tested out only in the District Court in the first instance?
Mr. George F. Townes: Well sir if I were to start advertising aspirin for sale for acne today and I would be prosecuted for having new drug without application.
If I resisted it will be tried in the District Court but if I wanted to get it approved I'd have to go through the New Drug Approval.
Chief Justice Warren E. Burger: But the FDA cannot, to use the term used here, how the threshold authority to say, no you can't.
That claim is patently invalid and you can't market it.
Mr. George F. Townes: They have the prosecutorial authority to do so.
Chief Justice Warren E. Burger: But that takes them into the District Court rather?
Mr. George F. Townes: Correct.
Rebuttal of Freedman
Mr. Freedman: Mr. Chief Justice, may it please the Court.
I just like to say two things briefly in rebuttal.
First in response to a colloquially that Justice Stewart had with Mr. Szuch.
The FDA on many occasions has sent back applications that had been filed for new drugs on the ground that nobody -- that it was not needed, i.e. that it wasn't a new drug.
Secondly I just want to stress -- it seems to us that the anomaly of the respondent's position here is well illustrated by the facts of the CIBA case itself.
The reason Food and Drug initiated a withdrawal proceeding in the CIBA case was because it had reason to believe that CIBA's drug was ineffective and it wanted to stop CIBA from marketing that.
It held a full proceeding.
It concluded that CIBA's drug was ineffective.
It withdrew the NDA and that action was upheld by the Court of Appeals.
Now under this theory that Food and Drug is no authority to determine the new drug status, this whole proceeding was amounted to basically annuity because CIBA now claims it can turn around and re-litigate under the new drug standard in the District Court, the question whether or not it's able to market it at all.
Justice Potter Stewart: In the meantime, it could be prosecuted even by confession?
Mr. Freedman: It could be prosecuted Mr. Justice but again I come back to the fact that --
Justice Potter Stewart: Well there could be a seizure I suppose?
Mr. Freedman: There could be, there could be a seizure.
But I come back to the fact once again that is just not a practical method of dealing with this large number of drugs that we have.
You just cannot accomplish the congressional purpose of getting these ineffective drugs off the market, but the only thing that Food and Drug can do is that when it finds one that it thinks is ineffective is to bring the suit in the District Court to enjoin them to seize the drug or to prosecute them criminally.
Justice William H. Rehnquist: Mr. Friedman, is appellate review of the action of the FDA based on some section in the Food and Drug Act or on the administrative procedure?
Mr. Freedman: It depends on the type of action.
If it's the action in either denying a new drug application or withdrawing the effective NDA that would be under section 505 (a) that permits court review in the Court of Appeals which is the route of course, CIBA followed.
If it's in a determination by the Food and Drug Administration made declaratory judgment that would be reviewable we think in the District Court under the administrative procedure.
Mr. Frey will now continue the argument.
Chief Justice Warren E. Burger: Mr. Frey.
Argument of Andrew L. Frey
Mr. Andrew L. Frey: Mr. Chief Justice and may it please the Court.
The Hynson cases numbers 394 and 414 are here on writ of certiorari to review a judgment of the Fourth Circuit holding that the commissioner acted improperly in withdrawing approval, for instance product Lutrexin without a hearing.
Lutrexin is a drug product whose active ingredient Lututrin is an extract from sow ovaries.
It's offered for the treatment for dysmenorrhea, threatened and habitual abortion and to prevent premature labor.
Hynson filed a new drug for Lutrexin in 1953 at which time safety was the sole criterion for evaluation of such applications.
The agency allowed the application to go into effect, although wrote Hynson, advising it at that time that the studies submitted did not indicate that the drug was effective for these purposes and urging Hynson not to market it particularly for threatened and habitual abortion.
Now after the 1962 amendments, Lutrexin was reviewed by the National Academy of Sciences which concluded, the panel concluded that Hynson's claims for Lutrexin were inappropriate and unwarranted in the absence of adequate scientific studies to support them. Lutrexin was rated possibly effective, which was the rating that specifically means that the panel found there was a lack of substantial evidence supporting Lutrexin's effectiveness.
After receiving the National Academy of Sciences' rating and making his own review of the information before him and giving Hynson the opportunity to submit further information, the commissioner tentatively concluded that there was no substantial evidence of the effectiveness of Lutrexin and in March 1969 published a notice of its intent to withdraw approval for Lutrexin's new drug application.
He offered an opportunity for hearing which Lutrexin at that time -- Hynson at that time accepted.
Then in August 1969 Hynson filed suit in the District Court seeking to block further proceedings before the agency.
A year later this suit was dismissed on primary jurisdiction on exhaustion grounds and Hynson was remitted to the agency.
In the meanwhile FDA had adopted the regulations which Mr. Friedman described to you, carefully defining what kinds of studies would be considered adequate and well controlled so that they could qualify a substantial evidence of effectiveness under the 1962 amendments.
The regulations further dealt with the question of when a hearing would be made available and it required the manufacturer in requesting a hearing to submit and I am quoting to the regulation as it appears at page 491 of the appendix, “A well organized and full factual analysis of the clinical and other investigational data he is prepared to prove in support of his opposition to the notice for opportunity of a hearing.
A request for hearing may not rest upon mere allegations or denials, but must set forth specific facts showing that there is a genuine and substantial issue of facts that requires a hearing.
When it clearly appears from the data in an application and from the reasons and factual analysis and the request for the hearing that there is no genuine and substantial issue of fact which precludes the refusal to approve the application or the withdrawal of approval of the application.
That is no adequate in well controlled clinical investigations to support the claims of effectiveness which have been identified.
The commissioner will enter an order on this data making findings and conclusions on this data.”
Now the commissioner wrote to Hynson and advised them of the new regulations and ask them to make a new submission in conformity with the requirements of the regulations.
Hynson made a further submission after it had lost the District Court action.
In this submission, it made three contentions to the commissioner which are here before you in this petition and cross petition here.
First it contended that Lutrexin is today generally recognized as both safe and effective and therefore not a new drug and not within the regulatory jurisdiction of the commission.
Secondly, it contended that because Lutrexin was generally recognized as safe, in October 1962 it was exempted under section 107 (c) (4) of the 1962 amendments.
Thirdly, it contended that in fact there was substantial evidence to support Lutrexin's claims of effectiveness.
The commissioner reviewed the material submitted by Hynson and he rejected.
He refused the hearing on all three of these issues.
On review, the Court of Appeals reversed.
It purported not to question the validity of the commissioner's regulations defining what would constitute or qualify as substantial evidence and not to question the regulations providing for a hearing only when there is a genuine and substantial issue of fact regarding whether such evidence exists.
Nevertheless, it held that the material submitted by Hynson was sufficient to raise the genuine issue for the drug's effectiveness.
It dismissed the commissioner's evaluation of the studies which he had carefully made in his order, noting that while this was perhaps valid, it was the kind of thing that should only be done after a hearing.
Justice William H. Rehnquist: Mr. Frey, the commissioner's regulation dealing with the existence of grounds for summary judgment, do they as interpreted, exclude only the possibility of an evidentiary hearing in such a situation or do they also exclude the possibility of oral argument?
Mr. Andrew L. Frey: Well, I am not certain.
Normally the procedure is designed to give the manufacturer a full opportunity to submit any data he has to be considered.
Now I think that -- well let me just say.
I am advised that if they were request for an oral presentation with regard to these matters it would be heard before the Bureau of Drugs but not by the commissioner personally, the Bureau of Drugs being an administrative arm which reviews the medical issues involved.
Justice William H. Rehnquist: So the manufacturer then could have had an oral argument at least before the Bureau of Drugs, although he might have been precluded from offering any evidence?
Mr. Andrew L. Frey: That's correct and in addition if the manufacturer felt that the commissioner's order withdrawing approval of the NDA for Lutrexin was erroneous because he had in fact identified some studies that might qualify as adequate and well controlled, he could have petition for reconsideration and point it out that the order was defective in that here indeed is something that wants a hearing which you overlooked.
Justice William H. Rehnquist: Well that would have been subsequently discovered evidence, I take it?
Mr. Andrew L. Frey: Well --
Justice William H. Rehnquist: That he would located the evidence.
In the meanwhile he couldn't go back in on the same stuff he had before and get any more than he did the first time?
Mr. Andrew L. Frey: Well, the one of the issues here is the complaint by the industry that somehow maybe the manufacturer doesn't know what it is that the commissioner's driving at when he is going to withdraw approval of the NDA.
Maybe he doesn't know what the commissioner finds to be wrong and the commissioner ought to have the burden of coming forward with some explanation of why he is withdrawing approval and with respect to that contention, we don't think that has any merit, but certainly by the time he issues his order withdrawing approval, he has explained his grounds for finding Hynson's material unacceptable.
And if there is something wrong with those grounds which I have yet to hear anybody indicate in any concrete terms, there would be an opportunity to go back to the commissioner and say you have made a mistake.
Justice Byron R. White: You say, if you get oral argument and argue with the commissioner as to whether or not the material submitted (Inaudible) before the Bureau of Drugs.
Mr. Andrew L. Frey: Yes, I think if they were a request.
Justice Byron R. White: You could go there and disagree with the commission that these materials submitted in that make a threshold requirement?
Mr. Andrew L. Frey: That's right, you could attempt to persuade them.
Justice Byron R. White: Your lawyer could go there, whoever could appear but could not put in the record an expert's opinion that this material did meet the threshold requirement?
Mr. Andrew L. Frey: No, on the contrary you could certainly bring in anyone who you wanted to.
I mean the FDA's position --
Justice Byron R. White: I said put in the record as a matter of evidence, putting him on the stand and introduced as evidence?
Mr. Andrew L. Frey: Well, I am not sure that there is a significant difference.
I mean, this record contains the affidavits --
Justice Byron R. White: You mean, you could submit even though the commission determines that there is no issue of fact, you could submit -- have a hearing?
Mr. Andrew L. Frey: Well, the question is whether or not there is an issue of fact that is has Hynson identified investigations that might possibly, conceivably be considered adequate and well-controlled investigations within the meeting of the statute.
Now you can bring in an expert, a pharmacologist who designs these investigations and who would say, look this is a good investigation because it meets the criteria of the regulation and has sound experiment at the time.
Justice Byron R. White: You could have submitted that ahead of time and in writing?
Mr. Andrew L. Frey: Could have submitted that ahead of time in writing or oraly.
Justice Potter Stewart: Why didn't -- I didn't know understand that under your supervision you could do to use my brother White's phrase put anybody on the stand, you just submit it, don't you?
Mr. Andrew L. Frey: Well, that's right.
We are not dealing --
Justice Potter Stewart: There is no evidentiary hearing under your submission.
Mr. Andrew L. Frey: This is not an adversary proceeding in that sense.
There isn't somebody who is going to grill the manufacturer.
Justice Potter Stewart: Just not a hearing either adversary or otherwise it's a submission, isn't it?
Mr. Andrew L. Frey: It's a submission.
Justice Potter Stewart: In writing.
Mr. Andrew L. Frey: In writing or oraly.
Justice Potter Stewart: But oral argument perhaps you are now telling us but --
Mr. Andrew L. Frey: Well, but --
Justice Potter Stewart: You don't put people on the stand under your submission, do you, that's the point?
Mr. Andrew L. Frey: No, but you come into the office or you are come into meet with the Bureau of Drugs and you can bring in your experts and have them --
Justice Potter Stewart: Try to convince whoever is in there, whatever bureaucrats are there, that this does, this does comply with your standards for -- with the statute standard?
Justice Byron R. White: What are all these people applying to that.
I thought they were actually hearing of some kind of some dimension and what is it they want that you won't give them?
Mr. Andrew L. Frey: Well I think there is a question as to the nature of the hearing that would be conducted if you --There must be.
-- affirm the Fourth Circuit, [Laughter] the Fourth Circuit's opinion.
Justice Byron R. White: So what is the difference?
You say, you can -- they can submit anything they want to, all the experts they want to, only in writing though, but if the commission then says you haven't submitted anything to create an issue of fact and in our judgment, you haven't met the threshold requirements, that's the end of the matter?
Mr. Andrew L. Frey: That is the end of the matter.
In this case, Hynson has simply not submitted anything about which there --
Justice Byron R. White: And now what this Hynson want to be able to do in addition to what you want to permit to them, what did they want to do?
Mr. Andrew L. Frey: Well, I think what they have in mind is they want to bring in witnesses and they want the agency to establish an adversary to oppose them, to respond witnesses and cross examination.
Justice Byron R. White: They would like, for example, to be able to do a chat like lawyers do with the other sides witnesses.
Mr. Andrew L. Frey: Yes, they would like to have formal.
Justice Byron R. White: Yeah, they would like to know what do you mean and what's your opinion based on, things like that, like lawyers do and like what do you do to have their interest determined in an adversary, adjudicatory proceeding?
Mr. Andrew L. Frey: The difficulty is to get into the nature of the issue.
I think that the Food and Drug would try to shape a proceeding assuming that they were some issues to be resolved, if my understanding of the procedure that they would consider would be to establish a panel of independent non-agency people to resolve the factual question and his prominent scientists who are knowledgeable in a particular area.
And I suppose that there is a problem in a sense that what they are saying you are not fighting us, you are not putting somebody, you are not cross examining our witnesses, and you are not putting somebody on the stand to say what's wrong with our studies and of course, at this stage of the proceeding what the commissioner has done is he is looked at the studies and he said, here is a whole bunch of things that are wrong in their face --
Justice Byron R. White: All you are saying is that you are doing no more than to these people then where the courts normally do to lawyers and parties everyday in granting summary judgment?
Mr. Andrew L. Frey: Everyday, that's correct.
Justice Byron R. White: Except for in some of the judgments, you can submit counter affidavits which you say you can do it, but you (Inaudible) arguments --
Mr. Andrew L. Frey: Well, there is one --
Justice Byron R. White: And they normally go out to the judge?
Mr. Andrew L. Frey: Well, you can argue here with the agency, however, that is you can present --
Justice Byron R. White: To a bureau, in argument with your body that kind of --
Mr. Andrew L. Frey: On the question of whether there should be a hearing?
Justice Byron R. White: Well there is the question --
Mr. Andrew L. Frey: Well, the regulation say show us something that we can hold the hearing about.
Chief Justice Warren E. Burger: In other words, it's something like a prima facie showing in conventional sense?
Justice Byron R. White: When you argue with, when you want to say well, you say I haven't submitted something and that I want to argue, I want to try convince you that I had or you say it'd be given?
Mr. Andrew L. Frey: This didn't happen in this case.
That is nobody said that we want some more -- you are wrong, we have shown an adequate and well-controlled investigations and we want some opportunity to talk to somebody about it and I am just not sure had they said so of whether the commissioner himself would grant them an opportunity to be heard on that issue but I don't think we get anywhere near that in this case because they haven't come close to raising any kind of issue.
Justice William H. Rehnquist: But your whole summary judgment procedure in a court although it's premised exactly on the type of reasoning you use, the judge doesn't simply say, I have decided to grant summary judgment in this case, someone makes a motion for summary judgment and the parties come in and argue as to whether there is or there is not a substantial issue of fact?
Mr. Andrew L. Frey: Well, but this is an administrative proceeding and the commissioner is not the adversary of this party.
I mean he is not setting out to take these drugs off the market.
What he is doing is setting out to enforce the congressional mandate that has been imposed upon him.
He has a duty to force that the distribution of useful drugs as well as a duty to take ineffective ones off the market.
He is not an adversary in the sense that in a judicial summary judgment proceeding you have parties A and B, who have conflicting interest with one another and who are fighting one another.
Chief Justice Warren E. Burger: But as soon as the FDA disagrees with an applicant then the applicant views him as an adversary?
Mr. Andrew L. Frey: Yes, it's understandable that Hynson would view the commissioner in some real sense as an adversary because he has the power to take action which is adverse to their interest, but it seems to me perfectly reasonable for him to say the statute -- Congress imposed a standard and imposed a standard of substantial evidence.
This is an objective scientific standard and his regulations implement this standard and set out the criteria and it's certainly is reasonable to ask the manufacturer to come in and make some showing of something, anything that could possibly qualify under these regulations and under the statutory standard.
Chief Justice Warren E. Burger: Is there some parallel levels here Mr. Frey possibly between this situation and Section 2255 where a district judge may dispense where the hearing if he finds that it conclusively appears on the face of the record if there is nothing to have hearing about.
Is it something like that?
Mr. Andrew L. Frey: No, I don't think that would go that far because normally in the 2255 the judge has some prior experience, the issues may have been previously litigated before the judge.
Chief Justice Warren E. Burger: Well, the way you have described that the drug companies have sometimes at least filed some papers and some opinions and some records about the merits of this drug?
Mr. Andrew L. Frey: They have file what they have to say in support of the merits of the drug and the commissioner has looked at it.
Chief Justice Warren E. Burger: And you are saying that the secretary, the FDA can say there is nothing here on the face of what you have submitted that requires us to have any hearing at all?
Mr. Andrew L. Frey: Absolutely and this is analogous to summary judgment except that it doesn't have this adversary procedure and therefore that it doesn't have an active lawyer advocate adversary, and therefore in that respect, it's somewhat different from the judicial summary judgment, but it's still, I think even in the case of a default, in a judicial proceeding if the plaintiff has not on his face -- on the face of the testimony that he might submit, simply doesn't make out a case, the judge will throw him out even though there is no --
Justice Byron R. White: The Commissioner construes the act to say that he is administering in this way.
I am going to withdraw NDAs unless you people who hold them submit sufficient evidence to me?
Mr. Andrew L. Frey: That's what Congress has required him to do and he has been told in this case by the National Academy of Sciences that there is no substantial evidence to support the trace.
Justice Thurgood Marshall: Somebody really says you haven't shown any thing to change my mind?
Mr. Andrew L. Frey: Well he is reviewed -- the National Academy of Sciences has reviewed the drug and they have come up with the conclusion.
Justice Potter Stewart: They came up with the conclusion not effective or --
Mr. Andrew L. Frey: Possibly effective in that case.
Justice Potter Stewart: I got it, possible effective.
Justice Thurgood Marshall: But why is that the --
Mr. Andrew L. Frey: But that means as we show in our brief under the instructions that they were given by FDA, that means that there is no substantial evidence, not adequate and well-controlled.
Justice Potter Stewart: There is to (Voice Overlap) possibly effective?
Mr. Andrew L. Frey: Possibly effective means that if they were to conduct scientific test, since the clinical judgment of the people on the panel, that possibly this test would show the drug to be effective, and probably effective is their judgment that if the scientific tests were conducted, they probably would show it to be effective but it is based on their general experience and not on the kind of evidence that Congress required.
Justice Potter Stewart: Thank you.
Justice Thurgood Marshall: My only quarrel is that you keep saying that this question to make a decision is so unbiased, etcetera, etcetera, he has already made up his mind, hadn't he?
Mr. Andrew L. Frey: Well, he has made up his mind in the sense that the FDC when it issues a complaint for instance, he has made up his mind, his mind that there may have violations.
Justice Thurgood Marshall: (Inaudible) I am talking about this one, he has made up his mind and your burden is to give him something.
Mr. Andrew L. Frey: He has made up his mind that the evidence --
Justice Thurgood Marshall: Well, let me finish.
Mr. Andrew L. Frey: Yes sir.
Justice Thurgood Marshall: And the burden on you is to show something that will make his mind be neutral?
Mr. Andrew L. Frey: No, not at all.
Justice Thurgood Marshall: Isn't that really what it is?
Mr. Andrew L. Frey: No because the inquiry is does there exist a certain kind of evidence.
This is an objective question.
He looks in his files, he gets his recommendation from the National Academy of Sciences, and he says so far I haven't seen anything.
Justice Thurgood Marshall: And then you produce something and he might say, ah, I might have made a mistake?
Mr. Andrew L. Frey: Well there are -- there are --
Justice Thurgood Marshall: Is that right?
Mr. Andrew L. Frey: Yes, absolutely.
In fact, there are 56 cases so far of New Drug Applications where he had proposed to withdraw that had been rated less than effective by the FDA panels.
Justice Thurgood Marshall: I would assume that this one is not in that category, this one is -- this is the one where 50-60 or 50-40 or something like that, this is a close one?
Mr. Andrew L. Frey: This one is not --
Justice Thurgood Marshall: No, no, I am talking about if there is a close one andyou are up against a man who has made up his mind, you got a problem?
Mr. Andrew L. Frey: No.
Justice Thurgood Marshall: You don't agree with that?
Mr. Andrew L. Frey: If you submit a study, there are objective criteria for evaluating --
Justice Thurgood Marshall: Well, if I got a real close case, I wouldn't want to burden or convince the man that he was wrong?
Mr. Andrew L. Frey: Well he has not made up his mind that the drug is ineffective.
All that he has concluded is that so far he hasn't been shown adequate and well-controlled clinical investigations.
Now that may mean that there is nothing in the file.
Now if the manufacturer comes forward with a study, he will look at that study and he will match it against the requirements of the regulations, he will act in accordance with the study.
I think this is a completely -- this notion that he is somehow biased and out to drive these people off the market is a completely fictitious element.
It has been rejected in the --
Justice Potter Stewart: You match it against the regulations or against the statute?
Mr. Andrew L. Frey: Well the regulation simply -- the statute simply says adequate and well-controlled investigations, including clinical investigations.
The regulations augment that by incorporating a scientifically recognized body of principles and in our brief in 414 in the appendices, we have indicated what some of those principles are.
Justice Potter Stewart: Some of these drugs indeed with this one, how responsible is it to carry out in a controlled investigations and the use of sibbles for people who were --
Mr. Andrew L. Frey: Well, there is a suggestion that has been made on the other side, and in fact the only issue that they have raised of a concrete nature by way of this agreement was the commissioner's findings or suggesting that he may have been wrong and there may be an issue is this ethical suggestion.
Justice Potter Stewart: Exactly.
Mr. Andrew L. Frey: Our position is that exactly the opposite is true and that sound ethics absolutely require scientific testing, and this point has been recently and tragically brought home by a drug called Diethylstilbestrol, which is offered for threatened and habitual abortion and premature labor and was widely used in the past.
It was tested in a number of controlled clinical studies and found to be ineffective.
It turned out that 16 years after pregnant women received this drug, their female offspring contracted vaginal cancer.
There are safety problems with these drugs that FDA simply cannot anticipate because they only show up in one case in a million or because they only show up 20 years later.
The least from an ethical stand point, that can be required as that these drugs to be effective for what they are being --
Justice Potter Stewart: I am reminded of -- it was revealed last summer and it has been perhaps in a sense of these experimentation of, say using placebos or using nothing with people who have syphilis.
Now how does ethical and moral, difficult for the syphical problems if you are going to insist on these kind of experimentation?
Mr. Andrew L. Frey: We don't insist on it.
For instance, you may have a disease or condition which has a predictable course, and of which a great deal is known and threatened and habitual abortion and premature labor is not in this category but you may have -- for instance if somebody has been bitten by a rabid animal and you want to test a vaccine for rabies, you don't need a controlled experiment, all you need to do is give him your vaccine that he doesn't die, you know its effect, but that's because you know the course of rabies.
Chief Justice Warren E. Burger: We'll resume at that point after lunch.
Before you go on Mr. Frey, it may seem to you that we have been asking you a lot of questions here and taking up some of the time of the counsel.
We'll compensate for that, we will enlarge the time each side for 10 minutes, and you gentlemen will look up the allocation of that bonus.
Mr. Andrew L. Frey: Thank you, Mr Chief Justice.
Chief Justice Warren E. Burger: Use the same.
Mr. Andrew L. Frey: Let me go back and try to place some of the problems that seem to be concerning the Court in the context of what FDA's regulatory problem was.
It reviewed these 4,000 or so New Drug Applications that had been filled between 1938-1962 and that were for products that was still being marketed, and the National Academy of Sciences submitted recommendations and reports showing that they were somewhere between 12,000 and 13,000 claims that appeared not to be supported by substantial evidence of effectiveness.
Now if any significant proportion of the manufacturers of drugs making these claims asked for full-dress evidentiary hearings, each of which can last two, three, four months, just in order and keep their product on the market until FDA could act, the mission of withdrawing ineffective drugs from the market would be totally sabotaged.
It will simply be impossible for the agency to deal with this.
I think the question that was asked earlier in the argument, there are 24 lawyers available to enforce the Food and Drug laws that court actions and administrative proceedings, that is besides of the General Counsel's office of Food and Drug.
Now what -- the way that the agency responded to this problem and the reason it was able to respond this way was that there was in the statute an objective standard which said, if you don't have adequate and well-controlled investigations, then you can't stay on the market.
So the commissioner adopted what in effect is a screening procedure.
He said to the manufacturer.
you come to me, you can show me anything that you want, bring me your data, bring me your studies, whatever you have, lay it out in the administrative record, and if you have something that looks like it could possibly be an adequate a well-controlled investigation supporting the effectiveness claims, then we will give you a hearing.
Chief Justice Warren E. Burger: You regard this clinical testing as a precondition to going on in the market?
Mr. Andrew L. Frey: It certainly for a new compound that was newly developed after 1962 would certainly be a precondition for going on the market.
Now of course if you are already on the market, the question becomes your right to say on the market.
And as to this, Congress also clearly intended that there would be this kind of clinical testing.
That's why they gave the two-year-grace-period to the manufacturer, so we could do this testing.
Justice William H. Rehnquist: Would you read 505 (b) then in its definition of substantial evidence to say that nothing that does not include clinical investigations can be substantial evidence?
Mr. Andrew L. Frey: Well, the answer to that is yes.
Now there -- on the issue of historical controls which has come up in the case, it is possible that you could have an investigation that would be considered adequate and well-controlled within the meaning of the statue even though it didn't use concurrent controls and placebo and so on.
That is as the regulation indicate, there are circumstances in which what constitutes an adequate well-controlled investigation made depend in part on what it is that your are investigating.
Justice William H. Rehnquist: So it does not necessarily have to be clinical investigation if it meets the other definitions that are adequate and well-controlled?
Mr. Andrew L. Frey: But it has to be a well-controlled, scientifically sound investigation and if there is no such investigation, then no parade of doctors swearing by the product can save it.
Justice Byron R. White: What is the provision under -- for withdrawing (Inaudible) it's the (e) --
Mr. Andrew L. Frey: Yes, 505 (e) (3) in the case of effectiveness.
Justice Byron R. White: (Inaudible) pleading under 505 --
Mr. Andrew L. Frey: That is what we are proceeding under against Lutrexin, that is right.
Justice Byron R. White: But there is a that there is a lack of substantial evidence such as drug was badly affected?
Mr. Andrew L. Frey: That is correct.
Justice Byron R. White: On the basis of new information (Inaudible) with drug, exaggerated together with the other (Inaudible) lack of substantial evidence?
Mr. Andrew L. Frey: That means that there must be some substantial evidence and if there is not some substantial evidence, that the approval must be withdrawn.
Justice Byron R. White: Alright.
Mr. Andrew L. Frey: If there is no substantial evidence -- if there is no adequate and well-controlled clinical investigation.
Justice Potter Stewart: As defined, substantial evidence is defined in 505 (d) --
Mr. Andrew L. Frey: And as mandated or amplified in the regulations.
Justice Potter Stewart: You say the regulations make clear today that controlled experiment does not necessarily imply a controlled group in the experiment?
Mr. Andrew L. Frey: It did not necessarily imply a concurrent control group but you could use historical controls if you have a disease, the course of which is so well known, if you have appropriate pairing of the people in the treatment group that you are studying against your historical control group so that you can exclude the possibility that the difference in results is due to something other than the drug that you are testing, but you need some scientifically sound way of attributing the results of your test, of your treatment to the drug that you are testing and if don't have that, you simply don't have the kind of evidence the Congress requires.
And I would like to point out if you would look for a minute at the appendix, at page 103, none of the materials that Hynson submitted has anybody ever suggested could possibly constitute adequate and well-controlled investigation except for the Majewski and Jennings' studies and the Gratton (ph) study, that's three studies.
Now, if you look at the Majewski and Jennings study which starts at page 99, he sets out to study the ability of Lutrexin to halt contractions and he comes up with the statistics as to the number of people in whom the contractions were halted.
He never compares that with anybody or anything, there is simply no comparison whatsoever.
It's obviously no way to tell whether Lutrexin halted the contractions.
For all we know from this study, contraction spontaneously halt at the same rate.
That's what I mean by the lack of the control and that's what the commissioner meant.
Now if look at page 103, he had 88 patients in his study group.
All 88 of these patients gave birth prematurely according to the study.
Now does this study demonstrate that Lutrexin is effective to stop prematurity?
He has no statistical analysis of this table four at the top of 103.
No showing that there is any significant difference, statistically significant between group 2 and group 1.
He then goes down in table 5, he compares the 88 patients who were treated with Lutrexin.
Justice William H. Rehnquist: Mr. Frey, this sounds to me like the kind of analysis you are engaging, it sounds to me as it would be a very legitimate type of thing for the commissioner to do after a hearing, weighing this test against the other, but I have some doubt as to just excluding it at the threshold?
Mr. Andrew L. Frey: Well, the regulations I think make it quite clear, it's clear on the face.
If you look at this there is nothing that could be done at a hearing to cure the fact for instance in the Gratton study, I have not got time to go into these at detail but in Gratton study, the patients received concomitant medication in addition to Lutrexin.
Now there is simply nothing that you could do at a hearing to make that study into an adequate and well-controlled investigation.
Justice Byron R. White: (Inaudible) right after that, in most cases?
Mr. Andrew L. Frey: Well if – I believe that if you look at the commissioner's order and if you look at the studies, if you look at this study of Majewski and Jennings and you compare that against the regulation, I think it is clear that the study does not come close to complying and that there is simply no way that it could be salvaged or reconstituted.
If this kind of material is sufficient to require the commissioner to hold an evidentiary hearing than anything is because this is just grossly an adequate.
There simply is no way to compare the people who were studied with the prior experience.
You do not know what kind of medical treatment the other people who are being compared had.
You don't know whether they bed rest, you do not know what are the drugs they had received, you do not -- on it's face.
Justice Byron R. White: Tell me how -- what does the other, what do you opponents want a hearing about them to convince somebody of what?
Mr. Andrew L. Frey: Well, I think it is not exactly clear and I think they have not really come forward and said, look the commissioner is wrong because here is a factual issue.
What factual issue?
The only factual issue that they have suggested is whether historical controls are appropriate and since it is quite clear on the face that even if historical controls with the radically appropriate, these are not historically control studies and I do not believe that they have suggested that they are historically controlled studies, I am not clear what the hearing would be about.
Presumably they would put Doctor Majewski and Doctor Gratton on the stand and have them try to explain what they were doing in their studies and what the results were, but if they don't say anything more than they have here --
Justice Byron R. White: What did the Court think the hearing would be about?
Mr. Andrew L. Frey: I do not believe that it has made clear in its opinion what the hearing would be of.
The issue is whether there is substantial evidence with effectiveness.
The commissioner looked at these studies and he said on their face, these studies do not confirm with the regulations in numerous ways.
They do not exclude concomitant medication.
They do not have comparability between the patients.
These are things that appear on the face of the study.
There is simply -- there is no --
Justice Byron R. White: Are not they judgments?
Are not they judgments of – aren't they sort of ultimate or intermediate judgments of the underlying facts?
Mr. Andrew L. Frey: Not at all.
They are completely objective things that appear on the face of the study.
If the doctor says that these people got multi vitamins, they got dilutant, they got the DES (ph), in addition to getting Lutrexin.
That appears on the face of the study, there isn't anything to hold a hearing about.
These patients received concomitant medication, you cannot attribute whatever results were attained to Lutrexin.
That is what the regulation say.
Justice William H. Rehnquist: But it might not be at least possible that Doctor Majewski having setup these studies would have some defense for them?
Mr. Andrew L. Frey: I think it is inconceivable.
In fact, it is clear that the Majewski, for instance the 68 Majewski study is not even a study.
It is a collection of his experience over the preceding ten years.
He went back through his files and pulled together the results that he got in treating patients with Lutrexin.
They never even set out to be a study.
A study has to have an experimental design, a plan or protocol.
It has to have things that are spelled out in the regulations and in the appendix in our brief in 414, these are objective requirements.
These studies simply are miles, light years away from meeting these requirements.
I think I, in view of the time, would like to move on to another point if I am clear enough for the questions on this point.
I would like to turn to the question which was touched upon earlier and which involves the correctness of the commissioner's denial of a hearing on the question of whether Lutrexin is today generally recognized as safe and effective and therefore not a new drug and therefore not subject to this regulatory jurisdiction.
But the commissioner said was if there is no substantial evidence of effectiveness, if there isn't the kind of scientific evidence that Congress said was required, then these qualified experts who, that Section 201 (p) talk about, couldn't possibly arrive at the conclusion that the drug is effective.
They could not have that general recognition of effectiveness because it would be based on the precise kind of unscientific clinical impressions on controlled studies, the very kind of thing that Congress had been told was an unreliable bases for evaluating drug effectiveness.
Congress had the foremost experts in the country before it and they were uniform in their testimony that you need controlled test, you need scientifically sound evaluation and Congress heeded their advice and Congress enacted in the statute a specific requirement of adequate and well-controlled investigations a concrete objective requirement.
Now it simply is it seems to us totally irrational to suppose that after Congress went to all the trouble of adopting this standard and rejecting these kinds of unscientific impressions that people have because they use the drug a few times and it seem good to them and so did their colleagues, but the drug should turn around and be able to stay on the market, that is the Commissioner has evaluated.
He has found that won’t.
The drug doesn't have sub-scientifically sound evidence of effectiveness.
Now the manufacturer turns around and says, well, that's very interesting, that's fine.
I am going to go ahead and market it anyway and I can produce 10 or 15 doctors who will tell you that they think it's effective on the basis of their uncontrolled, unscientific experience.
If there are no questions, thank you.
Chief Justice Warren E. Burger: Is Mr. Williams on next?
Argument of Edward Brown Williams
Mr. Edward Brown Williams: Mr. Chief Justice --
Chief Justice Warren E. Burger: Mr. Williams.
Mr. Edward Brown Williams: -- may it please the Court.
I have heard so much, I don't know where to begin.
There has been a good deal of talk about the NAS-NRC reports, National Research Council reports which evaluated a number of drugs for the Food and Drug Administration.
The conclusions of those panels were in many cases and certainly in the case of Lutrexin as the Court have appealed for the District of Columbia recently said in the USV case conclusory and cryptic.
They certainly were that in the case of Lutrexin.
In fact, out of the 14 studies, which we eventually submitted to the Food and Drug Administration, the NAS-NRC insofar as the report show considered only four.
Now, there has been considerable talk about whether the issue here, is the existence of adequate and well-control studies.
Justice Byron R. White: Could I ask you a question?
Is it your understanding of E3 that the Commissioner is authorized to set a side in NDA if there is a lack of substantial evidence of effectiveness and safety and that he may put the burden on you to submit evidence -- to submit that substantial evidence?
Mr. Edward Brown Williams: No, sir.
Justice Byron R. White: (Inaudible) you say no, then what's your understanding.
Mr. Edward Brown Williams: No, no, may I approach it this way.
The issue is not that has been suggested and the withdrawal proceeding under that section which you have cited whether there are adequate and well-controlled studies by their substantial evidence to support the effectiveness of the drug.
The issue is, under these regulations which are alleged by FDA to follow the summary judgment procedure of the rules of civil procedures whether under those regulations there is a material, an issue of material fact raised by the evidence before the Commission.
Justice Byron R. White: Could it be -- let's assume that the Commissioner does give you an hearing.
He asks you to submit evidence.
He says, I think that it is a question about this drug and he asks you to submit evidence and you submit none, for example, may he then withdraw the NDA without making any finding other than that there is a failure to produce any evidence?
Mr. Edward Brown Williams: It is our view sir that under the summary judgment practice, in other agencies as well as in the Court that he must at least put forth prima facie evidence to show that he has got a basis for saying --
Justice Byron R. White: So, he must -- do you think he has got a verdict going forward with something like this --?
Mr. Edward Brown Williams: We do.
Justice Byron R. White: -- and the burden of truth?
Mr. Edward Brown Williams: We do and we have already argued it extensively in our briefs.
Chief Justice Warren E. Burger: Well, that's little bit in conflict, isn't it, with the idea that Congress has very broad power to setup hurdles to any drug getting on the market, is it not?
Mr. Edward Brown Williams: I don't see why the necessity of showing that there is no issue of material fact before the Commissioner. [Voice Overlap]
Chief Justice Warren E. Burger: If I understood your response correctly, Mr. Williams, it was that you have a drug on the market and this question arises and you say that you need to bear no burden at all in response to this question, this issue being raised and if you default in traditional terms, the FDA must assume the role that a plaintiff assumes in a default case include nothing?
Mr. Edward Brown Williams: It must assume the same rule under its own regulations which --
Chief Justice Warren E. Burger: What specific regulation do you rely on?
Mr. Edward Brown Williams: I am talking about the May 1970 regulation --
Chief Justice Warren E. Burger: Where do we – where do we find them [Voice Overlap]
Mr. Edward Brown Williams: -- which have been discussed specifically, which defines substantial evidence and the right to a hearing.
Chief Justice Warren E. Burger: Where do we find that, at what page?
Mr. Edward Brown Williams: Well, that is Section 130.12 and .14 of the 21 CFR and it's at the very back of the Appendix on page 487 and following.
Justice Byron R. White: Let me ask you this.
Let's suppose they give you this notice that says, please submit evidence and you submit evidence.
He says, there is a question, now, let's have a hearing and you do submit.
We think there is some sense.
So, we have a hearing.
Now, at that hearing, while you have the hearing and he then revokes the NDA, what must he find?
Does he find only that there is a lack of substantial evidence of effectiveness?
Mr. Edward Brown Williams: Well, that is correct.
But he must have introduced some kind of evidence to justify that.
Justice Byron R. White: But he means conclusively drug is ineffective?
Mr. Edward Brown Williams: No, (Inaudible) lack of substantial evidence of effectiveness and if there is a equivalent of ineffective in this context, in this particular context.
Justice Byron R. White: And at the hearing, you would think that he carries the burden of knowing, if you have a hearing that he puts on evidence first, if you are going to have an evidentiary hearing?
Mr. Edward Brown Williams: He has always has the burden and I don't see that has changed here.
He wouldn't have to put on much if we submitted a very fragile materials, obviously.
Justice Byron R. White: But wouldn't the report of the Board or the Scientific Commission about Lutrexin, for example, he just says, here is what I have, here is the report I have.
Would that be a prima facie case for him, as far as you are concerned?
Mr. Edward Brown Williams: It might in some cases, but in the case of Lutrexin, may they even consider the all the materials.
Now, we, of course, must deny and do so at length in our briefs that were not historical controls used by Dr. Majewski and Dr. Gratton in their poor studies.
We consider them an historical controls, our briefs have analyzed and attempted to show that they are and as far, they are not having concomitant medication had necessarily excluded, naturally they were but Dr. Gratton, who did use concomitant medication, found that with concomitant of medication without Lutrexin, he glossed far more babies than with Lutrexin.
Therefore, he concluded Lutrexin had some effect because he was using as controls on patients whom he knew, were at attendance to premature labor, are way in-premature labor or that will had previous labor, until had previously had gone through premature labor.
So that we must look at these things directly and in that connection, I should like to refer to the Government's reply brief on page 29 in footnotes 33 and 34.
It says, reports by Hemsworth and Dieckmann (ph) has examples of adequate and well-controlled studies of a drug use to treat cases of threatened and habitual abortion.
Justice William J. Brennan: (Inaudible) Governments reply--
Mr. Edward Brown Williams: 29.
These studies are alleged to stand in stark contrast to the supposedly uncontrollable studies of Hynson, Westcott & Dunning.
It is significant to note however, that the studies cited by the Government suffer from many of the alleged defects that Commissioner referred to in his order withdrawing approval of a new drug application for Lutrexin.
Namely, in the first place, in neither study, the Hemsworth and Dieckmann study is the use of concomitant medication rule out, that was a complaint of the commissioner against the Majewski and Gratton studied.
Secondly certain patients were excluded from these studies which are held by the government without specific explanation again a repeat the commission’s complaint in the Hynson matter.
Third, patients with medical complications were included in this studies saying in the Dieckmann paper there was no method for determining how many tablets of the drug and investigation that patient took per day or per week, another complaint for commissioner against the Hynson study.
Five, in a Hemsworth study which was conducted by the unidentified staff of nine different hospitals, Majewski’s studies submitted by Hynson just as in that Majewski’s studies the historical incident of abortion and Dieckmann study and premature deliveries in the hospital involved was compare with the incidence of such complications among patients under study.
Justice Thurgood Marshall: Mr. Williams --
Mr. Edward Brown Williams: In other words they are doing to same thing which would I say is bad, yes sir.
Justice Thurgood Marshall: Is it true Dr. Majewski whatever these many, didn’t make the studies as went back in his file?
Mr. Edward Brown Williams: No sir.
Justice Thurgood Marshall: Tell me where it was.
Mr. Edward Brown Williams: No he selected physicians who had premature labor or abortion cases.
Justice Thurgood Marshall: Other physicians?
Mr. Edward Brown Williams: Other physicians, yes, just as Dieckmann did.
Justice Thurgood Marshall: And were they making the study?
Mr. Edward Brown Williams: They made a study according to his instructions.
Justice Thurgood Marshall: It's all a new ProTox study?
Mr. Edward Brown Williams: No according to his instructions.
Justice Thurgood Marshall: Well the study of their files of past cases?
Mr. Edward Brown Williams: No, his study was, a study of that files on the cases which he have ask them to make records on so he could make the study.
Justice Thurgood Marshall: How long did he work on this study?
Mr. Edward Brown Williams: There were three of them and I am sorry I can’t remember.
Justice William H. Rehnquist: A part of your complaint here is that you were denied certain procedural rights before the commission that you thought you ought to have?
Mr. Edward Brown Williams: We would deny the hearing.
Justice William H. Rehnquist: And what would you have sought to show at the hearing had you been accorded?
Mr. Edward Brown Williams: We would have sought to show that the historical controls used by these people were valid and if they constituted adequate and well-controlled studies in the sense of Food and Drug Regulation.
Justice William H. Rehnquist: When you say it do mean an opportunity to put these witnesses on the stand and do you also mean our alternatively mean an opportunity that will orally argue your contentions about your written submissions before the administrator?
Mr. Edward Brown Williams: Well, the food and drag hearings don’t ordinarily include oral arguments per see but written submissions after the evidence has been submitted but we would of course expect also to be able to cross-examine the government witnesses and that’s essential.
Justice William H. Rehnquist: Well but not -- there have been cases from this Court and I think one of the most recent was United State versus Florida East Cost Railroad that certainly intimate that you don’t necessarily have the right to cross-examine government staff, agency personnel.
Now this was the ruling.
Mr. Edward Brown Williams: Only the witnesses they put on.
I wouldn’t expect to cross-examine anybody who wasn’t put on that as witnesses.
Justice Byron R. White: But you would --
Mr. Edward Brown Williams: We would not have the subpoena power under present statute.
Justice Byron R. White: But if the government were relying for example on conclusions of some outside specialists, you would want to --
Mr. Edward Brown Williams: We would like to turn into it.
Justice William H. Rehnquist: And would regard the academy findings here as being basically analogous to outside specialists as opposed to staff personnel of the agency?
Mr. Edward Brown Williams: Yes then of course we had no opportunity to examine them whatsoever.
Justice Byron R. White: But your point has substance only if the statute puts the burden going forward and on the -- and approve some kind of the burden the administrator rather than upon you to convince him of something?
Mr. Edward Brown Williams: My point about a hearing you mean?
Justice Byron R. White: Yes.
Mr. Edward Brown Williams: Well, I think we would be entitled to hearing in any event and I think I can show that by comparison of the 505 (e) (3) provision, a Withdrawal Provision, with the provision of 505 (c) which deals with an application for a new drug approval where it is specifically said, that a hearing must proceed within a certain period, after the request -- the offer is accepted unless there is contrary agreement by the parties.
Now, I would like to just conclude this one point since so much has made of it.
It is also significant to note, in any event the government studies did not involve as do Hynson's treatments of patients with histories of prior pregnancy.
Prior pregnancy problems or patients in imminent danger of premature delivery or abortion all of the Majewski and Gratton cases did, they can not therefore, that is these two submitted by the government in its reply brief at the last minute which we had never seen by the way, they can not therefore be compared with HEW in these investigations where a high risk of fetal mortality existed.
In such a case the use of a Double-blind, Placebo type would be unethical according to Doctors Ressick (ph) Gratton, Majewky, and Allen.
Allen the later, Allen being a member of the panel of the NAS-NRC which evaluated Lutrexin.
It was his opinion stated on the no rise letter to us that Lutrexin should not be taken off the market, that they never had such an intention.
Now I should I think it might help if I listed the issues which I think were in these two cases.
In 72-394 which involves primarily the hearings, the questions are whether Hynson is entitled to a hearing on the question of whether there is substantial evidence of safety and efficacy as distinguished from a hearing on the jurisdictional questions which I should report to.
Secondly whether the new May 1970 regulations which are in the back part of the appendix under which a hearing was denied or valid as applied to FDA by FDA to Lutrexin and finally whether HEW and Hynson’s right to hearing vested under the former regulations which preceded these when Hynson accepted the offer of a hearing by a letter to Food and Drug Administration.
In number 72_414 which is in support in which we file the brief in support of the cross petition, the basic question is whether the Court of Appeals was right in its conclusion that the commissioner was unauthorized initially to determine his own jurisdiction under Section 201 (p) the definition of new drug, that is whether the drug Lutrexin is generally recognize the safe and effective under the act as amended in 1062, whether it was deemed to prove under Section 107 © (2) of the act, if it was, it is not subject to administrative withdrawal proceedings under Section 505 (b).
Three, whether the drug was exempt from the effectiveness requirements of Section 107 (c) (4), so called “grandfather clause.”
If so then it is our view that none of the effectiveness in provisions of the statute are applicable to that drug.
There has been considerable discussion of the matter of general recognition of safety and effectiveness and as I understand the government's position and I think I do understand it, they maintain that general recognition of safety and effectiveness which is the test of new drug status is dependent upon the existence of substantial evidence of effectiveness as defined in the 1962 Amendments, in an entirely different section of the statute, not the covered section in 505 (d).
And that in effect, the substantial evidence definition is a part of Section 201 (n) and there is no real difference between the determination of new drug status and a determination of whether the drug is safe and effective.
Chief Justice Warren E. Burger: Would you keep your voice up a little bit Mr. Williams?
Mr. Edward Brown Williams: Sorry.
Now it so happens that 201 (n) wasn't even amended when this definition of substantial evidence was placed, written into Section 505 (d), a substantial evidence definition.
Section 201 (n) (p), the definition of new drug was amended in 1962 only to include the requirement of effectiveness in the definition of new drug, not a requirement of substantial evidence and effectiveness.
Section 201 (p) is a jurisdictional test which governs the application of Section 505.
Chief Justice Warren E. Burger: What do you say the standard is standard of proof on the effectiveness?
Mr. Edward Brown Williams: General recognition of safety and effectiveness among experts that's specified in the statute.
Chief Justice Warren E. Burger: By that you mean the -- what is called the anecdotal, but the testimony -- testimonials of people who used it?
Mr. Edward Brown Williams: No I will concede to the government and to anybody that evidence of clinical studies published in the letter 2 is relevant on the question of whether that could be general recognition of effectiveness or of safety, but I don't think that's the final test.
Some of these drugs which have been on the market for years are obviously generally recognized as safe and effective and they may or may not have published studies upon which that conclusion was -- by which that conclusion was arrived at.
It is only after drug is found to be new in some, it is only after a drug is found to be new under Section 201 (p) that one looks at Section 505 to determine what the obligations of its manufacture may be.
I think it's important that distinction be made.
It is always been accepted by FDA and the industry and FDA changed this view only after -- some years after the effective date of the 1962 Amendment which did not even touch that section.
Now, the right to a hearing on the question of substantial evidence; the briefs of the government in these cases place great, if not primary emphasis upon the alleged incapacity of FDA to administer Section 505 as amended in 1962.
If the anticipated demands for hearings, that is the hearings anticipated by the government and withdrawal proceedings have to be met by the agency.
We explain, however, in our brief in number 72-394 beginning at page 33, that only if there is an issue of material fact, need a hearing be granted by the government -- by the Food and Drug Administration.
In the case of an application for approval of the drug as distinguished from the question of whether it's generally recognized as safe and effective.
In the case of such an application it is expressly provided in the statute that if the applicant accepts an opportunity for hearing within 30 days of notice of such opportunity, such hearing shall commence not more than 90 days after the expiration of such 30 days unless the secretary and the applicant otherwise agree.
That is explicit.
I don't see how an ex parte decision such as was made in this case denying a hearing could be made under such a provision.
The right to hearing in the withdrawal proceeding must be no less firm both as I read the statue and as I read the legislative history.
In fact Senator Eastland expressly stated in explaining this withdrawal provision to the Senate, “Withdrawal of approval of a new drug application would be preceded by hearing with findings on the basis of the record.
That's rather explicit. Certainly in this situation where as I think we show in our briefs, there likelihood of an overpowering number of required hearings seem in reality remote.
The cases are applicable which hold that inconvenience or lack of staff or lack of money or the prospect of delay is not good reason for dispensing with the minimal requirement of a hearing in a adjudicatory manner which isn't.
The cases are recited in our brief in number 394 and they include – the Ohio Bell Telephone case and the Wong Sang Yung (ph) case.
That's at page 37 and 38.
So despite the express fears of the government of a multiplicity in hearings, we think it is safe to say that the necessary showing of the existence of a material fact and that's all that has been shown, would drastically curb even the tendency to request such hearings.
The government fear is based on speculation, not on evidence.
In any event we believe we have shown in our brief in number 394 that an issue of material fact exists with respect to the efficacy of Lutrexin.
We do not deny that Section 701 (a) of the act authorizes the Food and Drug Administration to make general rules for its enforcement, obviously it does.
Such regulations have the status of law if they are reasonable and in accordance with the statute.
The new drug regulations of May 8, 1972 to which we referred earlier, relating to substantial evidence of effectiveness and the right to a hearing were issued under the Section 701 (a) to implement the definition of new drug in Section 201 (p) and the definition and section 505 the operative new drug section.
It is those regulations with which these cases are concerned, not the regulations published in the federal register May 21, 1972.
For classification of over-the-counter drugs as to the new drug studies, we do not consider those OTC drugs are valid because they represent an attempt to circumvent the provisions of Section 505 of the Act by a classification system and set up by the adjudication procedure contemplated by that Section, but they are not before the Court today in any event.
In Storer Broadcasting case which was cited by the government in support of its proposition that a rule can always be substituted for adjudication, did not circumvent the basic statutory provision, such as Section 505.
The relative is simple ownership rule, Station Ownership rule there involved, could be readily applied and did not concern a variety of different articles or drugs or stations with different labeling and different characteristics.
As this Court recognized in Securities and Exchange Commission versus Chenery, the problem may be so specialized and varying in nature as to the impossible of capture within the boundaries of the general rule.
Our basic position with respect to the May 1970 regulations is this.
First as they have been applied to Hynson's drug Lutrexin there invalid because the commissioner refused to recognize that the evidence submitted by Hynson raises a substantial issue of material fact as to whether there is substantial issue, that is a substantial evidence of a effectiveness of Lutrexin and failed to produce prima facie evidence to the contrary.
Under such circumstances, a hearing is required by the statute, we submit, before the commissioner may legally withdraw approval of the drug under section 503 (e) three on the ground of lack of substantial evidence.
Under the summary judgment Rule of the R.C.P as I have said, upon which these FDA rules are allegedly patterned, it is clearly the burden of the proponent to show by prima facie evidence, if there is no issue material fact presented by such evidence.
Moreover, under that rile the opposing party is entitled to depose or examine the witnesses of the other party.
It is clear that aside from the burden of proof rules in the summary judgment procedures, the Administrative Procedure Act requires that FDA as a proponent of the order shoulder the burden of proof to show a lack of substantial evidence and this it did not do, also this is clear from the language of Section 505.
The second basic objection to the May 1970 regulation because if they combine and a commissioner both the prosecutorial function and the judging function.
We recognize that the commissioner must make the eventual and final decision as to whether the drug should be withdrawn, but it is unfair, we think to provide for an ex parte decision by the commissioner without the submission by him of any evidence whatsoever to rebut the studies and affidavits of the distinguished obstetricians and gynecologists which instant (Inaudible) presented.
Justice William H. Rehnquist: Well, even if you had all sorts of witnesses in evidentiary hearing, the commissioner still would have been prosecutor or Judge, wouldn't he, I mean, that wouldn't have changed that?
Mr. Edward Brown Williams: Well, I go on to point out and I can do it more briefly that -- well, I did say, if you recalling, that we recognize that the commissioner must make the final decision, but as the Attorney General's committee said in 1941, “one way to eliminate the possibility of unfairness in summary judgment proceedings or any other proceedings for that matter is to have an impartial judge to original judgment.”
And if that is the burden, the cases, I don't think there is any doubt about that as far as I know.
Justice William H. Rehnquist: Would you say, the statute then or that the statute or constitution would have required not only a hearing but before a Federal Administrative Judge?
Mr. Edward Brown Williams: Customarily, Food and Drug, new drug hearings have been held before an examiner who is now called an Administrative Judge and that's way it should be in this case according our view.
Justice William H. Rehnquist: What supports your view?
Is there any specific provision of the statute that you rely on?
Mr. Edward Brown Williams: Yes, we have a specific provision.
Well, I just went into the hearing question, it seem perfectly clear for – oh!
You mean about an Administrative Judge?
Justice William H. Rehnquist: Yes.
Mr. Edward Brown Williams: Oh!
Well, I think that we cited Goldberg versus Kelly one of this Court's cases and ICC versus Louisville & Nashville Railroad Company in our brief at page 32 in support of that position.
Chief Justice Warren E. Burger: Well, Goldberg versus Kelly didn't provide for a hearing examiner.
It was a person right --
Mr. Edward Brown Williams: But how can you have a fair hearing if you don't have at all.
Chief Justice Warren E. Burger: We are talking now about what your authority is Goldberg against Kelly that you rely on did not call for an independent hearing examiner in the sense that you are arguing, but merely a different person within the social security hierarchy from the man who had made the original decision, that's all.
Mr. Edward Brown Williams: Oh!
That's all, I really don't contend any more than --
Chief Justice Warren E. Burger: In spite of more than the hearing examiner.
Mr. Edward Brown Williams: Mr. Chief Justice, I don't contend anymore than that.
But I might point out that this Court said through Justice Brennan in almost every setting where important decisions turn on to question of fact, Due process requires an opportunity to confront and cross examine witnesses and that we didn't get yet.
Chief Justice Warren E. Burger: Thank you Mr. Williams, Mr. Frey.
Rebuttal of Andrew L. Frey
Mr. Andrew L. Frey: Just a word or two with respect to Mr. Williams and then I'll turn it over to Mr. Hoffman.
The Hemsworth and Dieckmann (ph) studies were significantly different in the sense that they were controlled and I think if you understand and look at the studies you will see this.
They took the group of patients in the studies and they split them into two groups and they paired them in order to eliminate the differences between the two groups.
It's true that they got other medication apart from DES but both groups got the same medication.
They were comparable as much as could reasonably be made possible except that one group had DES and one didn't and I think that is a significant difference.
With respect to Justice White's point regarding the burden of the commissioner to come forward that issue was tried and challenged by PMA, it’s the (Inaudible) regulations in the Pharmaceutical Manufactures Association of which Hynson is a member and it was adjudicated in favor of the commissioner.
Also the Ciba-Geigy case in the Second Circuit upheld the commissioner's view on that position, thank you.
Chief Justice Warren E. Burger: Mr. Hoffman.
Argument of Joel E. Hoffman
Mr. Joel E. Hoffman: Mr. Chief Justice, may it please the Court.
The fifth and final case in these consolidated proceedings is USV Pharmaceutical Corporation against Wienberger.
This case is here certiorari to the Court of Appeals for the Fourth Circuit and like Ciba and Bentex, it arose as a civil action in the district court for a declaratory judgment, that the products involved are not new drugs as define by the Act.
The issues in the USV case involve solely the interpretation of the Grandfather Clause in the 1962 amendments, Section 107 (c) (4).
The district court held that the products involved do enjoy grandfather status and the Court of Appeals held they do not.
Now before proceeding to the specifics of this case perhaps it would be helpful to step back for a moment and look at the overall statutory scheme which we have been discussing, since 10 o' Clock this morning.
There has been some imprecise use of terms during the course of the arguments and with the Court permission I should like to briefly restate some of the fundamental principles with which we are confronted.
There are only two relevant terms used in the statute of all those shorthand expressions that have been brought up today.
As Mr. Justice Stewart pointed out the term “old drug” does not appear in the statute.
There are only two terms, the terms are “drug” and “new drug” both of these are specifically defined in the Act.
And for present purposes we need not get into the details of the definition of the drug generally.
We can just assume that this refers to what we normally think of as drugs, but the term “new drug” in explicitly defined.
A special class of drugs is carved out is define by Section 201 (p) of the Act and this is been so since 1938, so that the Act regulates all drugs.
It regulated drugs generally in a certain manner and it regulates new drugs in a very specific manner.
This scheme is described in the brief for the proprietary association which is the thick light green brief at pages 4-9 and also in the PMA brief which is this thick dark green brief at pages 28-29 and rather than repeat what it said there let me simply summarize.
In 1938, the basic Food and Drug Act, Pure Food and Drug Act in 1906 was totally revamped to strengthen the authority of Food and Drug Administration to protect the public in the field of drugs, this obviously is true.
But the powers of the Food and Drug Administration was strengthened very largely by way of increasing their authority as an enforcement agency, a prosecutor if you will, in the district courts.
The basic statutory scheme which applies to the regulation of drugs contemplates that the substantive probations of the Act will enforced in civil or criminal actions brought in the name of the United States on the reference of the Food and Drug Administration in the District Courts, so that if the drug is misbranded the remedy available to the government is a civil action to seize the product or for an injunction or a criminal prosecution.
If a drug is adulterated, the same remedies are available, a civil action procedure or for an injunction or a criminal prosecution.
The Food and Drug Administration has no direct authority with an exception that I will refer to in a few moments, to directly enforce these prohibitions.
As was pointed out in response to a question of Mr. Justice Rehnquist, the agency has no seize and desist order -- authority.
This is not the Federal Trade Commission.
This is an executive branch agency, which refers cases to the Department of Justice for prosecution or for the initiation of civil actions.
Nor for that matter does the agency has subpoena power, in the proceeding it does conduct.
This is been recently pointed out in the study by the administrative conference which categorizes FDA as perhaps the most important agency in the government which doesn't have any subpoena power.
So the agency, the Congress strengthened in 1938.
Just to repeat it once more, is essentially a policing agency in regard to drugs, except with regard to new drugs has specifically defined by the statute and that is the class of drugs with which -- are now which in this case are concerned.
Now the definition of new drug is set forth in 201(p) and the basic function of 201 (p) is to act as a bow or a selecting gate to determine down which regulatory road a particular product will travel.
If the drug is a new drug, as defined in the statute then it is channeled into an administrative applied regulatory scheme conducted by the Food and Drug Administration, the Commissioner of Food and Drugs.
If however the product is not a new drug as defined by the statute, then it is simply outside that administrative regulatory scheme.
The drug is regulated in the civil actions, in criminal prosecutions which I described a moment ago.
The standard of whether a product is a new drug is Section 201 (p) and this is printed at page 3 of our brief which is the thick blue brief and also at page 482 of the joint appendix and it provides that a drug is a new drug.
If it is a drug a composition of which is such that it is not generally recognized by qualified experts as safe and effective for its intended uses.
Now in 1938, when this statute was first enacted, the word effective didn't appear.
A drug was regarded as a new drug if it was not generally recognized as safe intended uses, effectiveness didn't enter into the matter.
The determination, however, whether a product was generally recognized to say is a factual determination and once that a factual determination as to the state of informed expert opinion on the product.
The question in short was not whether the drug was in fact safe, because it might in fact be safe, but not be generally recognized as safe, the question was whether the consensus of informed expert opinion was that the product was safe, and in the absence of such a consensus, the product would be classified as a new drug.
Chief Justice Warren E. Burger: When you speak of this informed and expert opinion, this is that category that is generally the general reputation of the drug as distinguished from evidence coming from controlled tests, is that correct?
Mr. Joel E. Hoffman: That is correct with a qualification that I would like to state at this time.
There has been a great deal of discussion as to whether you have to have substantial evidence as defined in the statute in 1962 that is controlled clinical studies to have general recognition.
The government says that you do, the companies in these cases are uniformly I believe that you do not need to have it but if the government is right, that an expert couldn't possibly come to a conclusion as to the safety of product without controlled clinical studies or for that matter it's effectiveness, then you won't be able to --
Chief Justice Warren E. Burger: -- it isn't a question whether he can come to a conclusion, it’s whether he can come to a correct conclusion, isn't that the -- what this 1962 Act is all about?
Mr. Joel E. Hoffman: Well, the 1962 Act defines substantial evidence in terms of controlled clinical studies with regard to the application of the standards for approval or disapproval by FDA.
As Mr. Williams pointed out, this definition does not in terms apply to the question of general recognition for purposes of classifying the drug in the first instance, but the statute doesn't say that the experts consensus has to be a correct one, viewed from the management point of FDA or anybody else.
The test is whether there is a consensus?
Now, if the government is right, that substantial evidence in the statutory sense of effectiveness under the new statute, or under the old statute which I would like to return in a moment, whether there is a consensus as to substantial evidence of safety.
If that depends on whether there are controlled clinical studies then they won't be a consensus because if the government is right, the experts simply won't come to a conclusion, if they are really qualified experts.
It may be that they will come to that conclusion notwithstanding the absence of studies.
Now the presence of studies maybe relevant to an expert in deciding that he does or he doesn't recognize the product as safe or it is effective and it maybe that it won't recognize that it is safe or is effective if they are any studies, but the statute doesn't tell the expert on what basis he has to decide for the purpose of the consensus.
Justice Thurgood Marshall: But he does have to make the controlled study?
Mr. Joel E. Hoffman: The statute requires a controlled study, Mr. Justice Marshall, and so only if a product is a new drug as defined by the statute and is therefore required to get pre-marketing clearance, because if the drug is not --
Justice Thurgood Marshall: But I thought you said that you didn't agree with that, and you do agree with that for a new drug?
Mr. Joel E. Hoffman: For a new drug only Mr. Justice Marshall.
Justice Thurgood Marshall: You agree with that?
Mr. Joel E. Hoffman: Yes, I do.
Justice Thurgood Marshall: And what is your definition with new drug, the statute's definition?
Mr. Joel E. Hoffman: The definition is the statute's definition which is that a product in 1962 -- up until 1962, the definition of a new drug was a product which is not generally recognized by a qualified experts as safe for its intended uses.
Products which were generally recognized as safe didn't require pre-clearance and didn't have to go through the new drug procedure.
Justice Thurgood Marshall: After 62 act?
Mr. Joel E. Hoffman: After the 62 Act, if the product was generally recognized to safe but not generally recognized as effective, then it was a new drug.
Justice Thurgood Marshall: And subject to the controlled tests?
Mr. Joel E. Hoffman: That's correct.
Now, the change in definition of new drug, so as to expand that category, to expand this goal of the administrative regulatory scheme, that amendment would in the absence of some grandfather clause have applied across the board to all products that were on the market in 1962. Congress and that is what the original Keith Howard (ph) Bill would have done.
Congress didn't however enact the original Keith Howard (ph) Bill in that respect, it added transitional provisions and it added a grandfather provision and the precise issue in this case is the scope of the grandfather provision.
So that it can be determined whether or not a pre 62 product is to be classified as a new drug or not as a new drug according to the new definition or the old definition.
Now it perhaps would be helpful just for a moment to state the factual origins of the controversy presented in this particular case.
For many years, beginning in 1955, USV, the petitioner in this case has marketed a line of products principally containing a substance called citrus flavonoid compound.
This is a naturally occurring combination of substances called bioflavonoids which are derived from citrus fruits.
And the recommended use with the products is the control of abnormal capillary permeability and fragility, which is a condition of the capillary walls, sometimes found in conjunction with serious ailments involved in bleeding.
This side condition results when it is present in excessively easy rapture of the tiny capillary blood vessels which lie near the surface of the skin or near internal surfaces and USV’s citrus flavonoid products are recommended to physicians only as an aid of strengthening the capillary walls and in that sense they are a prescription product that promoted for this use to physicians only although they are available without a prescription.
If you went and asked for CVP for example you could get it, but there will be nothing on the box to tell you that this is what it is good for.
The promotion is only to physicians.
The products in the line of products in question formed two separate groups.
The original products in the line were new drugs as defined by the statute in 1955, when they were first introduced for this use for abnormal capillary permeability and fragility.
And USV therefore filed a new drug applications for them under Section 505 of the Act.
Now by new drug application, I also mean what has been referred to today as NDA.
Now this Act, it is a another term that doesn't appear in the statute, and in response to Mr. Justice Stewart's question of this morning, I would say that the term NDA does mean New Drug Application, it doesn't mean New Drug Approval.
It doesn't appear anywhere in the statute, this acronym.
The statute talks about applications, applications under Section 505, it does not talk about NDAs.
I have not personally heard of any use of the acronym to refer to a new drug approval until the Court of Appeals opinion in the Bentex case.
I think that most members of the Food and Drug Bar would be surprised to learn that it refers to something else.
The common understanding of NDA is New Drug Application, but the important point is that the statute doesn’t talk about NDAs, whatever NDA means, it talks about applications.
So at least for my purposes when I use the abbreviation, I am referring to the application, the new drug application.
After the new drug applications filed by USV have become effective with the original products in this line and the products covered by them had become generally recognized as safe for their recommended use, so that they were no longer new drugs for that use as defined by the statute.
USV introduced two additional products of the same type.
New editions of old drugs such as these two are usually called 'Me-too' products, that's another term that doesn't appear in the statute, it's a shorthand, and it has some pejorative connotations that were perhaps intended by those who developed the term, but I think today it has no such connotations.
'Me-too' products are competing products, competitive products.
They are brought up on the market after a so called pioneer product that has been on the market sufficiently long, so that drugs of this type becomes generally recognized as safe.
These two products were never the subject of New Drug Applications.
The manufacturer never filed an application for them.
They were simply brought out as drugs not new drugs or as old drugs, if you will.
There was no new drug application filed for them, no new drug application became effective for them, they were never regulated as new drug by the Food and Drug Administration.
They were on the market as old drugs just like Aspirin.
These products were generally recognized as safe for their recommended use and that's the basis on which they were brought on the market.
Chief Justice Warren E. Burger: But if they had no effectiveness at all?
Mr. Joel E. Hoffman: If they no effect --
Chief Justice Warren E. Burger: How would they -- if the FDA concluded that they were totally ineffective, how in your view, do they address themselves to that problem in the public interest?
Mr. Joel E. Hoffman: The FDA could recommend to the Department of Justice that the products be seized, that the manufacturer be enjoined from further distribution whether the manufacturer be punished.
It is a criminal offense under the act of marketing misbranded drug.
The act defined misbranding to include the use of labeling which is false or misleading in any particular, and there was certainly no question that a false or misleading claim for effectiveness for a drug is a misbranding.
The Government has never brought such an action against the products that are involved in this case, that would be the remedy.
Now this was the only remedy available to the Food and Drug Administration for any product on the market as of 1962, if it believed that the product was not effective for its recommenced uses.
However, when Congress amended the act to provide a degree of pre-marketing control over products, it did not apply that pre-marketing control retrospectively to products then on the market without qualification.
Instead it added a grandfather clause and it's the scope of that grandfather clause which is the crux of the controversy between USV Pharmaceutical Corporation and the Government.
The question as I said is which definition of new drug applies.
The Grandfather Clause says, that if a product is a new drug under the new definition, it still may not be required to go through the pre-clearance requirement, if three conditions are met.
Now this Section 107 (c) (4) is a technical and very precise statute and it's not the sort of provision which can be read impermissible.
Congress spelt out its three criteria extremely carefully and we think a broad-brush treatment of the complex language it employed would not do justice to the statute.
Chief Justice Warren E. Burger: Where do we find that in the appendix?
Mr. Joel E. Hoffman: 482 Mr. Chief Justice and also at page 3 of petitioner's brief in 666.
Page 482 sets out Section 107 (c) (4) of the act and this is the first non-indented paragraph, a little bit below in the middle of the page and the three criteria are first that the product had been marketed in the United States prior to the enactment of the 1962 Amendments.
There is no doubt that the products involved in this case were so marketed and that the products in this case therefore meet the first criterion for grandfather protection.
The second requirement is that the product was not a new drug under the statute as it stood when the amendments were adopted.
That is that the product was then generally recognized by qualified experts as safe for its recommended uses.
And the District Court found, and the Court of Appeals agreed that in 1962 the products involved in this case were generally recognized as safe for their recommended uses.
That the products, therefore, were not new drugs when the statute was amended, so that the second criterion for grandfather status is also met.
The third requirement for grandfather status is the one that brings us here today.
That requirement is that the product was not covered by an effective application under Section 505 of the Act, the time the statute was amended and the controversy today is over the proper construction of this third criterion.
In other words, I say, USV never filed an application under Section 505 for either of its two ''me-too'' products.
This was because each was considered from the outset by USV to be generally recognized by qualified experts as safe for its intended uses, and therefore, was not a new drug.
New drug applications were not required for such products and the marketing of each of these ''me-too'' products was initiated and continued on the strength general recognition of safety.
That was the basis on which the products were marketed and it was the only basis.
The Court of Appeals held in this case that products such as these meet literally the criteria for exemption stated in the grandfather clause, and this is at page 470 of the appendix, meet literally the criteria for exemption.
We agree, but the court went on to hold that USV's products in this category do not reach grandfather status, notwithstanding that they -- literally the requirements for invention because USV as the manufacturer was itself the applicant under the NDAs for early additions of the products which were first marketed under effective NDAs.
We petitioned for certiorari to review the decision insofar as a true distinction on the basis of identity of the manufacturer and his role in the marketing other products, the Government agrees with us that no such distinction is supportable.
The Government agrees, in other words, that if a product was a 'me-too' version of an earlier product, it matters not who the original manufacturer was, and the Government therefore agrees that our 'me-too' products will be treated just like everybody else's, but we differ as to what that treatment should be.
The Government argues for affirmance of the judgment as to USV's products by attacking the Court of Appeals ruling as to never NDA 'me-too' products in general.
The government argues that notwithstanding the Court of Appeals' conclusion that the products meet literally the criteria for exemption that they don't really qualify after all.
So the question before this Court as to the 'me-too' products is the correction of the ruling below as modify in accordance with the Government's concession that Congress did confer grandfather status on never NDA products, even thought they were later versions of earlier products.
Justice Harry A. Blackmun: Does it make a difference that you didn't take a – no strike it, I am out of focus, that’s right?
Chief Justice Warren E. Burger: This exemption is a derivative exemption on the 'me-too' product, isn't it?
It derives from the past drug, does it not?
Mr. Joel E. Hoffman: We think not Mr. Chief Justice.
If the parents --
Chief Justice Warren E. Burger: Why not?
Mr. Joel E. Hoffman: If the parents drug, the pioneer drug were protected by the grandfather clause which is the other issue in this case, but one which is for the shortage of the time, I would prefer to put aside and leave on briefs, if the pioneer products are protected by the grandfather clause, then, yes, the 'me-toos' would follow along, because the only basis for the Government argument that the 'me-toos' aren't grandfather is that the pioneers are the grandfather, but regardless of this Court's decision on the original products that were covered by an effective application under Section 505, the 'me-too' products in our view independently meet the criteria for exemption, because these products never were covered by an effective application.
They weren't covered in 62, they weren't covered in 58, they weren't covered in 55, they were never covered by an effective application.
Chief Justice Warren E. Burger: Isn't that because they got a free ride of piggyback?
Mr. Joel E. Hoffman: No, Mr. Chief Justice.
They didn't get a piggyback, because they are marketing in way dependent on the fact that there was a new drug and application effective for some other product.
The marketing depended solely on the fact that this product had become -- this type of product had become generally recognized as safe for its intended uses.
If there could have been no prior product, but there were general recognition of safety under whatever standard applied then these products would have come on the market.
Justice William H. Rehnquist: So that the 'me-too' on its own merits met the test of the 38 Act for a new drug?
Mr. Joel E. Hoffman: Exactly, the 'me-too' met the test of the 38 Act, was not a new drug, was marketed as a drug other than a new drug.
It did not depend for its law --
Chief Justice Warren E. Burger: Before 1962?
Mr. Joel E. Hoffman: Before 1962 or for that matter, today.
The 'me-too' product came on the market because it was generally recognized as safe and therefore not a new drug under the 1938 Act.
It continues on the market today in USV’s view because while it would not meet the amended definition, so that it would require pre-clearance by FDA if the amended definition applied, our view is that the grandfather clause withholds the amended definition from this product that was on the market prior to 1962.
The correctness of the decision below as to these 'me-too' products is shown, we think by three principle considerations which have gone into in our brief and if I may briefly summarize; first, is the literal language of Clause (c) of Section 107 (c) (4) construed in accordance with Congress’s demonstrative understanding of that language and of the concepts it incorporates.
That concept is the concept of an effective application under 505.
Now the government says 505 is irrelevant in construing the grandfather clause, but it's not irrelevant.
How can it be irrelevant if Clause (c) says that one of the criteria for grandfather protection is whether the product was covered by an effective application under Section 505.
So the critical question in terms of statutory language we think is what did Congress think, what it meant when it used the words effective application under Section 505.
Now we think Congress was pretty clear as to what that meant.
Our brief explains that it was explicitly called for the attention of Congress by Secretary Rebikoff that ineffective application under Section 505 was a one-trip ticket only.
It was good for the manufacturer who filed the product and it was good only for the product for which that application was filed, not for anybody else's product and not for any other product of the same manufacturer.
Congress reflected its understanding of this concept in other provisions of the statute, which are discussed in our brief and while it did not address the subject of 'me-too' products directly at any time as the government points out; that is only to show simply that Congress may not have been aware that the statute it did enact would protect “me-toos,” but whether Congress was aware of it or not, this is the statute they enacted and our position is that when Congress set up as a criterion for grandfather protection, that the product not be covered by an effective application under Section 505 that the case has to be decided on the basis of what Congress thought was covered by an effective application under Section 505.
The second consideration that we think militates in favor of the Court of Appeals ruling on these two products in general, is that the only available evidence of Congress’s purpose, in amending the definition of New Drug in the first place, shows a very limited purpose.
Remember, the grandfather provision controls the applicability of the amendment to that Section 201 (p) definition of a New Drug.
So we believe that's relevant to inquire what was Congress’s purpose in amending the definition.
The government has stated in its brief that they agree that there is only a limited evidence of purpose in the legislative history and that purpose was to clear up some confusion that was prevalent in the Senate at the time that the New Drug definition was amended.
The purpose of the amendment was to ensure that new claims for our old products would be covered by the new definition.
So that if Aspirin would have been newly recommended for acne, for example; to give examples when you used here this morning, then a New Drug Application would have to be filed for Aspirin insofar as it was being recommended for the new use, that was the purpose.
That was the only purpose that is evidenced in the legislative history and we think that because 'me-too' products obviously have nothing to do with that purpose that the statute should not be distorted so as to deny these products, the grandfather status, which Congress literally and explicitly conferred on them.
If the Court has no further questions, I would prefer to save the balance of my time for rebuttal.
Chief Justice Warren E. Burger: Very well.
Rebuttal of Andrew L. Frey
Mr. Andrew L. Frey: The Court of Appeals characterized this holding in this case that 'me-too' drugs are exempted as compelled by the literal language of the statute and as I listen to Mr. Hoffman, he is urging you to feel compelled by the same literal language of the statute regardless of how absurd the results, but the whole house of cards that Congress erected fall down on our heads, the literal language of the statute requires it.
Now we submit that the language of Section 107 (c) (4) in no way compels an exemption of 'me-too' and indeed, that the only sensible way you can read the provision does not exempt to products.
It treats them in the same way as the products that were named in the New Drug Application.
Justice William H. Rehnquist: What language of the statute precisely of Section (4) do you rely at to bring 'me-too' drugs?
Mr. Andrew L. Frey: Well, I think it's very significant if you will turn to the statute, I rely not on the statute that Mr. Hoffman read to you in which he inserted the word product in place of drugs, I rely on Section 107 © (4).
Now Section 107 © (4) --
Chief Justice Warren E. Burger: That’s on page 482?
Mr. Andrew L. Frey: -- page 482, it Does not say in the case of any product which was not covered by an effective application.
It says in the case of any drug.
Now, the drug here is bioflavonoids, the product is Bivam.
Now there isn't anything here on this page, in this statute that compels you to read that to say Bivam instead of bioflavonoids and if you read it in the generic sense that we are urge in our brief, everything falls in place and you have a coherent in sense of s statutory claim.
Justice William H. Rehnquist: In our colloquy with Mr. Freedman this morning, I understood that the government’s definition of 'me-too' drug was not just different trade names for precisely the same generic product, but similar products as well as identical products?
Mr. Andrew L. Frey: Well because it depends on the degree of similarity of the product.
You can have and in many cases you have a product that is identical in everything, but the brand name and under the Court of Appeals, reading that product would be the 'me-too'.
Justice William H. Rehnquist: That’s the easy case for you under the grandfather clause?
Mr. Andrew L. Frey: Now there is an issue in some cases as there is in the Bentex case for instance, as to whether you may really be dealing with a different drug that is not the same drug that was covered by the New Drug Application, but the position of the agency and it has been explained in its drug efficacy study implementation regulations of October 1972 which we have cited in our brief, is basically that identical, similar or related products and this is defined by chemical composition and therapeutic use.
It's a scientific concept which has parameters which I can’t really get into today and there can be factual issues as to whether a particular product is in the same generic family with the drug discovered by the NDA.
Now, if Section 107(c)(4) is construed in the way USV urges in an individual product sense, the results are irrational; they are discriminatory among manufacturers.
They are completely disruptive of the congressional purpose and requiring that drugs be shown to be effective for their claim uses.
Now let me give you scenario of what would happen.
Sometime between 1938 and 1962, a manufacturer decides there are certain compound is useful for the treatment of a certain disease or condition.
He does studies on regarding the safety of that compound and he files an application with FDA, which reviews his application and allows it to go into effect.
He then starts manufacturing that product.
Now two or three or five other manufacturers may decide that they also want to market the same product and if it's not patent, they are free to do so except they have to file their own applications until such time as the drug comes to be generally recognized as safe, which it comes to be because there have been NDA products out on the market that are generically the same and at that point any manufacturer can market his product without going through the regulatory procedure and that includes the NDA holder who can put it out under different brand names or anything else.
Now, the ratio of these 'me-too' products to the products that are named in the application is quite high.
FDA has found that it's high as 13:1; in the Bentex case, we have 23 manufacturers of 'me-too' products and only two manufacturers who held NDA’s.
Now under the 1962 amendments, Congress said review these NDA’s, determine the efficacy if these drugs and the agency does it and the agency finds under the standards that Congress has established that the drugs are ineffective or that they lack substantial evidence of effectiveness, which is somewhat different and it withdraws approval of the NDA’s and it takes the Pioneer drugs off the market and here are 20 other manufacturers, still on the market with the identical product sitting in the drug store shelves.
Nothing has been accomplished for the consumer, nothing has been accomplished, but a completely irrational discrimination between identically situated people that does not correspond to any regulatory purpose that Congress had.
Now, nothing in the legislative history indicates this was Congress's intent.
Mr. Hoffman relies on something in part two of the senate report when he says that they were concerned with new claims.
He omits in his brief and he omitted to mention in his argument, the closing sentence of that paragraph which says the effect of this amendment on drugs already on the market is discussed below under transitional provisions.
So that the paragraph on which he relies has nothing to do with the effect of the amendment of Section 201 on drugs already on the market in 1962.
Now he says, well let's rely and the industry says, let's rely on the power of FDA as a prosecutor with the aid of the Department of Justice to go chasing these people in the courts with these very serious remedies.
And in our reply brief, we have tried to point out to the Court some of the practical problems that exist.
But what I would like to point out to the court now, is that Congress when they passed the 1962 amendments expressed a concern with the inadequacy of the judicial remedies.
They said, even where the effectiveness, this is and I am quoting from the house report HR 24/64, page 3, which we have cited in our brief, “Even where the effectiveness of the new drug enters into determining its safety, the Food and Drug Administration cannot, if it finds the drug safe, refuse clearance because the claim of effectiveness is exaggerated,” that's under the old statute.
“Rather the administration would have to stultify itself by allowing clearance and then causing court action to be brought for mis-branding.”
Committee goes on to note “as a result of good medical practice is hampered and the consumer is mislead until perhaps years later the government has gathered the necessary evidence to sustain its burden of proving the violation in courts.”
That is what Congress was concerned about, when it sought to bring these drugs under the regulatory scheme for evaluation of drug ethics.
Chief Justice Warren E. Burger: The burden of proof there of course would be the conventional criminal burden of proof, wouldn’t it?
Mr. Andrew L. Frey: Yes and in a similar --
Chief Justice Warren E. Burger: And what's the burden of proof in?
Mr. Andrew L. Frey: In the administrative proceeding the burden is clearly on the manufacturer.
He must demonstrate that there exists substantial evidence of effectiveness and I think that's the only way it could be; there is no practical way for the commissioner to demonstrate the non existence of such evidence.
I don't know how he would go about it.
Justice William H. Rehnquist: And the burden on the civil injunctive action, I take it would be the normal preponderance of the evidence test that you are referring to?
Mr. Andrew L. Frey: I think that's correct and that's of significant difference in the terms of the discrimination between the pioneer and the ''me-too'.'
The pioneer is being made to show to the agency's satisfaction that there exists substantial evidence of the effectiveness in the 'me-too' if the FDA could ever chase after and collar all of them all over the country in these thousands of individual suits, the burden would be on FDA to establish their ineffectiveness in mis-branding action.
Now the structure of the 62 amendments of 107 (c) (4) clearly supports our position, 107 (c) (4) talks about the applicability of the revised definition of new drug in 201 (p).
Nobody has told you and nobody will tell you that the definition in 201 (p) is an individual product sense.
It's generic and plain common sense tells us to interpret Section 107 (c) (4) for generically also.
I see my time is up.
Chief Justice Warren E. Burger: Thank you, Mr. Frey.
You have few minutes left, I think, Mr. Hoffman.
Rebuttal of Joel E. Hoffman
Mr. Joel E. Hoffman: I will try not to use them all, Mr. Chief Justice, being grateful for the expansion of the time.
Chief Justice Warren E. Burger: I think, it's about 7 minutes.
Mr. Joel E. Hoffman: Mr. Frey has said quite correctly that Section 107 (c) (4), page 482, refers to a drug rather than to a product, but that doesn't advance ball any in our opinion.
He says that, 201 (p) is generic and therefore 107 (c) (4) must be generic.
But again he stressed, that as the government did in its brief, it just ignores the fact that in carving out an exemption from the applicability of the amended definition which is generic, Congress made that exemption turn on a highly personal and particularized factor, namely was the drug, now Mr. Frey said in the statute where it was the drug covered by ineffective application.
Now if Mr. Frey is right and a drug is covered by an effective application and if any member of its generic class is covered then once the first NDA is approved, nobody else need to file a new drug application because Section 505 (a), the basic statutory requirement and this is on page 477, 505 (a) says, “No person shall introduce or deliver any new drug unless an approval of an application filed pursuant to sub-section (b) is effective with respect to such drug.”
Now if the word drug is generic than its generic.
If it's personal, it's personal.
We pointed out in our reply brief, that what makes the 201 (p) definition generic is the rather awkward phrasing, that a new drug is any drug, the composition of which is such that it is not generally recognized by experts.
Now that's not found anywhere in the statute.
107, except 201 (p), the grandfather clause doesn't say that a product is disqualified from grandfather status.
If it's a product, the composition of which is such that is covered by a new application, and so we therefore rest on the proposition that Congress enacted a statute.
Mr. Frey is not testifying before a legislative committee.
He is here before this Court asking it to interpret what Congress wrote.
Chief Justice Warren E. Burger: Mr. Hoffman, the essence of your position, if I understand it is that this regulatory scheme depends largely if not entirely on criminal sanctions in the district court, where the burden of proof is on the government beyond a reasonable doubt.
Now, is there any other regulatory scheme of this general character, in which that burden is placed on the regulatory agency?
Mr. Joel E. Hoffman: We think, there are not regulatory schemes that are precisely like this, in the respect to which Your Honor refers. I am not a securities lawyer.
My understanding, however is that, for example, if a person violates the securities act, by failing to comply with registration requirements, and like the principal remedy, and I am just not certain if it's the only one, but the principal remedies inaction in the district courts, and the action I might add, need not be criminal.
The government has civil remedies available.
It can cease the products, it can enjoin with the civil burden of preponderance of evidence burden.
And as far as the necessity of bringing thousands of suits is concerned, we think the history of the regulatory statute in question shows that where a point is established, if it has relevance to other cases, it need not be litigated thousands of times.
Chief Justice Warren E. Burger: Thank you, Mr. Hoffman.
Justice Harry A. Blackmun: Mr. Hoffman I take it you have no response to the anomaly Mr. Frey points out, in a withdrawal situation, where the pioneer bears the entire burden, and the 'me-too' goes scot free?
Mr. Joel E. Hoffman: I do have an answer, Mr. Justice Blackmun, if I may state just briefly.
The Congress continued in courts usually as to the products that were on market in 1962.
Whatever regulatory scheme was then in courts as to that product, if a product was being regulated, as a new drug, and actively regulated, then it would continue to be so regulative under the amended schemes.
If it wasn't being regulated under the administrative new drug scheme, which is traditional to 'me-too', that it continued not to be.
Now this may be seen as unfair and the Pharmaceutical Manufacturers Association have suggested that in fact anti-aid products, which would become no longer in use, are not subject to the amended definition of new drug either.
That issue is present in our case, with a refinement.
We are in position of -- as the District Court found having withdrawn the applications from FDA, but that is an entirely a separate issue, which they simply haven't been timed to discuss.
We think in other words this is not anomalous anymore than any grandfather clause is anomalous, that distinguishes between products in various regulatory statuses when statute is amended, but if there is an anomaly; it's for Congress, and not for this Court to adjudicate.
Chief Justice Warren E. Burger: Thank you, gentlemen.
The case is submitted.