Tuesday, May 1, 2012

DOJ/FDA reply to Franck's and Amici Waiver Argument

In addressing the waiver argument raised by Franck's and amici, DOJ/FDA contends:
The government's brief cites numerous instances in the record where it argued and documented that the factual basis of this action for injunctive relief is that Franck's animal drug compounding activities exceed the bounds of traditional pharmacy compounding and are indicative of large-scale drug manufacturing, as described in CPG 608.400.
DOJ/FDA also explains that this case involves a question of law--not the specific facts--of the case.  It  states,  "To be sure, the fundamental issue in this case is a question of law, the resolution of which depends on analysis of the FDCA, not on any specific facts."  Nonetheless, DOJ/FDA argues it is both necessary and logical to discuss FDA's enforcement policy and application of that policy to the facts on which the complaint for injunctive relief was based.  DOJ/FDA argues it has not waived the argument because it has not belatedly raised a new theory.  More specifically, its brief contains the following argument:
Contrary to Franck's claims, the government has not belatedly raised an "alternative theory" of its case – that compounded animal drugs are unlawful only when prepared in an operation resembling manufacturing. There is but one theory of this case: New animal drugs compounded by pharmacies are not exempt from the FDCA and never were, and they are accordingly subject to FDA's enforcement authority. However, FDA recognizes that compounded animal drugs can serve beneficial public health purposes. Thus, pursuant to its consistent, longstanding policy, FDA undertakes enforcement action against compounding pharmacies only when the scope and nature of their activities "raise the kinds of concerns normally associated with a drug manufacturer and result in significant [FDCA] violations." CPG 608.400, Doc. 17-2, Ex. A at 4. Because Franck's animal drug compounding operations raise such concerns, the government brought this action to enjoin Franck's further violations of the Act. That has been the government's position throughout this litigation. 
Ultimately, DOJ/FDA contends that government counsel's previous comments at the district court level are not sufficient to show waiver:
Citing excerpts from government counsel's responses to questions during district court oral argument, Franck's Lab contends further that FDA has waived certain other arguments, e.g., the relevance of AMDUCA and other FDCA provisions to the statutory interpretation question at issue. As FDA's opening brief notes (at 41 & n.15), government counsel's comments do not support Franck's waiver claim. Moreover, this Court has held that "waivers and concessions made in appellate oral arguments need to be unambiguous before they are allowed to change the outcome of an appeal," and such comments should be considered in the context of the party's briefs and entire presentation. Crowe v. Coleman, 113 F.3d 1536, 1542 (1997). See also Moose Lodge v. Irvis, 407 U.S. 163, 170, 92 S. Ct. 1965, 1970 (1972) ("We are loath to attach conclusive weight to the relatively spontaneous responses of counsel to equally spontaneous questioning from the Court during oral argument."). That same principle should apply to counsel's comments during district court arguments.Thus, considering the government's complaint, arguments in support of its motions for a preliminary injunction and summary judgment, declarations, and other evidence, snippets of government counsel's argument in district court cannot reasonably be construed as concessions or waivers of any legal arguments. Cf. Savoury v. U.S. Attorney General, 449 F.3d 1307, 1318-19 (11th Cir. 2006) (even if estoppel applies to government, willfulness and negligence, inter alia, must be shown). 

Summary in DOJ's Reply Brief in Franck's


Here is the introduction and summary from the government's reply brief in Franck's:


INTRODUCTION AND SUMMARY 

    Like the definition of "new drug" for human use, the definition of "new animal drug" in the Federal Food, Drug, and Cosmetic Act ("FDCA" or "the Act") is sweeping and straightforward – "any drug intended for use for animals other than man" that "is not generally recognized * * * as safe and effective under the conditions prescribed." 21 U.S.C. § 321(v)(1) (emphasis added); compare id. § 321(p)(1) ("new drug" definition). When a pharmacy compounds a drug for animal use, it creates a Case: 11-15350 Date Filed: 05/01/2012 "new animal drug" because the compounded product is not generally recognized by experts as safe and effective, and it has not been subjected to the controlled clinical trials that are necessary to establish its safety and effectiveness. Even a drug that is a copy of an approved animal drug is a "new animal drug" that must be independently established as safe and effective when produced by a party other than the one that holds FDA approval for the drug. Although Congress has carved out a few exceptions to the "new animal drug" definition and the FDCA's approval and other requirements for such drugs, it has enacted no unconditional exemption for new animal drugs compounded by pharmacies.   

     Thus, the consistent position of the Food and Drug Administration ("FDA" or "the agency") – based on the Act's plain language and documented in litigation, FDA's Compliance Policy Guides ("CPG"), and regulations – has been that pharmacy-compounded drugs for human and animal use are "new drugs" and "new animal drugs" that require FDA approval before they can be lawfully distributed in interstate commerce.  At the same time, however, FDA recognizes that drug compounding is part of traditional pharmacy practice, and, when compounded pursuant to valid prescriptions for individual patients, compounded drugs can serve important public health purposes by meeting the needs of patients for whom approved, commercially available drugs are inadequate. For that reason, FDA has 2 Case: 11-15350 Date Filed: 05/01/2012 historically declined, and continues to decline, to take enforcement action against pharmacies engaged in traditional compounding activities. However, when evidence shows (as in this case) that a pharmacy's activities substantially exceed the bounds of traditional compounding, and the pharmacy is effectively engaged in drug manufacturing masquerading as compounding, without compliance with FDCA approval and other requirements, the agency takes enforcement action. 

     Three other circuits have squarely held that pharmacy-compounded animal drugs are "new animal drugs" under the Act and are therefore subject to FDA's enforcement authority. Med. Ctr. Pharmacy v. Mukasey, 536 F.3d 383, 408 (5th Cir. 2008) ("Medical Center"); United States v. Algon Chem. Inc., 879 F.2d 1154, 1158, 1160 (3d Cir. 1989); United States v. 9/1 Kg. Containers, 854 F.2d 173, 179 (7th Cir. 1988), cert. denied, 489 U.S. 1010, 109 S. Ct. 1118 (1989). No circuit has held otherwise.  Moreover, the Supreme Court has discussed approvingly FDA's enforcement policy and affirmed that "the Government needs to be able to draw a line between small-scale compounding and large-scale drug manufacturing." Thompson v. W. States Med. Ctr., 535 U.S. 357, 361-63, 370, 122 S. Ct. 1497, 1501-02, 1505 (2002) ("Western States"). 

     This appeal presents the same fundamental question of law answered by the courts in Medical Center, Algon, and 9/1 Kg. That question arises in the context of 3 Case: 11-15350 Date Filed: 05/01/2012 a rare civil enforcement action initiated by FDA against a pharmacy whose compounding activities have demonstrably exceeded the bounds of traditional pharmacy practice and resemble large-scale drug manufacturing. The undisputed record supporting FDA's request for injunctive relief (largely overlooked by the district court) shows that the animal drug compounding activities of Franck's Lab – as its name, extensive product catalog, operations, and documented history of FDCA violations over several years suggest – is more indicative of a manufacturer than the corner drugstore that compounds a lifesaving medication for the family dog pursuant to a veterinarian's individualized prescription. 

    Thus, this case is not about whether traditional pharmacy compounding can serve important public health purposes; it can and does. This appeal concerns whether Congress has authorized FDA to take enforcement action against pharmacies when their compounding activities pose a threat to public health because they are manufacturing drugs, but evading the FDCA's approval and other requirements that Congress enacted to protect public health. 

     Franck's Lab acknowledges, as it did in district court, that FDA has authority to take enforcement action against entities engaged in unlawful drug manufacturing, but it fails to identify the source of that authority and to explain where the "line between small-scale compounding and large-scale drug manufacturing" lies. Western 4 Case: 11-15350 Date Filed: 05/01/2012 States, 535 U.S. at 370, 122 S. Ct. at 1505. Those failures are fatal to Franck's Franck's Lab and its amici grossly misrepresent FDA's position (see, e.g., Franck's Br. 10), characterizing it as extreme, when, in fact, this action represents a judicious exercise of the agency's enforcement authority against a pharmacy that has repeatedly flouted the law and FDA warnings. 
     
     Franck's Lab and its amici contend that FDA has changed its policy and has acted inconsistently. Not so; the agency's position here is fully consistent with the position that it has repeatedly taken in other litigation over many decades and that is set forth in FDA's publicly available enforcement guidance. Franck's Lab claims that the federal government's action here clashes with sovereign State interests, but, notably, Franck's Lab has not, and cannot, identify any such tension. Finally, Franck's claim that the government has conceded or waived certain arguments is baseless.

DOJ's Reply Brief in Franck's

The government's reply brief in Franck's has been filed.  Click here to view brief.

Benefits and Risks of Pharmacy Compounding


This article appears on the United States Food and Drug Administration Website.  Although published in 2007 and geared toward drugs for humans, it contains key points as to why compounding of medication is needed, the special risks of pharmacy compounding if the rules and regulations are not followed, red flags to watch for and a checklist for consumers:

The Special Risks of Pharmacy Compounding

Pharmacy compounding is an age-old practice in which pharmacists combine, mix, or alter ingredients to create unique medications that meet specific needs of individual patients.
It's also a practice that is under FDA scrutiny—mainly because of instances where compounded drugs have endangered public health.
"In its traditional form, pharmacy compounding is a vital service that helps many people, including those who are allergic to inactive ingredients in FDA-approved medicines, and others who need medications that are not available commercially," says Kathleen Anderson, Pharm.D, Deputy Director of the Division of New Drugs and Labeling Compliance in FDA's Center for Drug Evaluation and Research (CDER).
Compounded medications are also prescribed for children who may be unable to swallow pills, need diluted dosages of a drug made for adults, or are simply unwilling to take bad-tasting medicine.
"But consumers need to be aware that compounded drugs are not FDA-approved," Anderson says. "This means that FDA has not verified their safety and effectiveness."
Steve Silverman, Assistant Director of CDER's Office of Compliance, says that poor practices on the part of drug compounders can result in contamination or in products that don't possess the strength, quality, and purity required. "And because patients who use these drugs may have serious underlying health conditions," he says, "these flawed methods pose special risks."
Unlike commercial drug manufacturers, pharmacies aren't required to report adverse events associated with compounded drugs. "FDA learns of these through voluntary reporting, the media, and other sources," says Silverman.
The Agency knows of more than 200 adverse events involving 71 compounded products since 1990. Some of these instances had devastating repercussions.
  • Three patients died of infections stemming from contaminated compounded solutions that are used to paralyze the heart during open-heart surgery. FDA issued a warning letter in March 2006 to the firm that compounded the solutions.
  • Two patients at a Washington, D.C., Veterans Affairs hospital were blinded, and several others had their eyesight damaged, by a compounded product used in cataract surgery. The product was contaminated with bacteria. In August 2005, FDA announced a nationwide recall of this Trypan Blue Ophthalmic Solution. Contaminated solution had been distributed to hospitals and clinics in eight states.
  • In March 2005, FDA issued a nationwide alert concerning a contaminated, compounded magnesium sulfate solution that caused five cases of bacterial infections in a New Jersey hospital. A South Dakota patient treated with the product developed sepsis and died.

A Troubling Trend

The emergence over the past decade of firms with pharmacy licenses making and distributing unapproved new drugs in a way that's clearly outside the bounds of traditional pharmacy is of great concern to FDA.
"The methods of these companies seem far more consistent with those of drug manufacturers than with those of retail pharmacies," says Silverman. "Some firms make large amounts of compounded drugs that are copies or near copies of FDA-approved, commercially available drugs. Other firms sell to physicians and patients with whom they have only a remote professional relationship."
FDA highlighted these concerns in August 2006, when it warned three firms to stop manufacturing and distributing thousands of doses of compounded, unapproved inhalation drugs nationwide.
Inhalation drugs are used to treat diseases including asthma, emphysema, bronchitis, and cystic fibrosis. "These are potentially life-threatening conditions for which numerous FDA-approved drugs are available," says Silverman. "Compounded inhalation drugs may be distributed to patients in multiple states, and patients and their doctors may not understand that they are receiving compounded products."

Enforcement

"FDA historically hasn't directed enforcement against pharmacies engaged in traditional compounding," says Anderson. "Rather, we've focused on establishments whose activities raise the kinds of concerns normally associated with a drug manufacturer and whose compounding practices result in significant violations of the new-drug, adulteration, or misbranding provisions of the Federal Food, Drug, and Cosmetic Act."
FDA counts compounded drugs among the new drugs that are covered under the Act. "We consider them new because they're not generally recognized among experts as safe and effective," says Anderson.
She adds that FDA recognizes that states have a central role in regulating pharmacy compounding. "We refer complaints to the states, support them when they request it, and cooperate in investigations and follow-up actions. But there are cases when states are unable to act, and we proceed without them," Anderson says.

Red Flags

In a May 29, 2002, Compliance Policy Guide devoted to human pharmacy compounding, FDA identifies factors that it considers in deciding upon enforcement action. These factors include instances where pharmacists are:
  • compounding drug products that have been pulled from the market because they were found to be unsafe or ineffective.
  • compounding drugs that are essentially copies of a commercially available drug product.
  • compounding drugs in advance of receiving prescriptions, except in very limited quantities relating to the amounts of drugs previously compounded based on valid prescriptions.
  • compounding finished drugs from bulk active ingredients that aren't components of FDA-approved drugs, without an FDA-sanctioned, investigational new-drug application.
  • receiving, storing, or using drug substances without first obtaining written assurance from the supplier that each lot of the drug substance has been made in an FDA-registered facility.
  • failing to conform to applicable state law regulating the practice of pharmacy.

What You Can Do

What can consumers do to protect themselves against inappropriate drug-compounding practices? Ilisa Bernstein, Pharm.D, J.D., Director of Pharmacy Affairs in FDA's Office of the Commissioner, offers these tips:
  • Ask your doctor if an FDA-approved drug is available and appropriate for your treatment.
  • Check with the pharmacist to see if he or she is familiar with compounding the product in your prescription.
  • Get information from your doctor or pharmacist about proper use and storage of the compounded product.
  • If you receive a compounded product, ask the pharmacist if the doctor asked for it to be compounded.
  • If you experience any problems or adverse events, contact your doctor or pharmacist immediately and stop using the product.
  • Report any adverse events experienced while using the product to FDA's MedWatch program5.
Date Posted: May 31, 2007
Page Last Updated: 03/14/2012 

Government's Reply Brief in Franck's Case Due Today

The Department of Justice (DOJ), who represents the United States Food and Drug Administration, reply brief is due today, May 1, 2012, in the Franck's case.  A reply brief is normally limited both in page number (15 pages or no more than 7,000 words) See Fed. R. App. P. 28.1(e)(1) and 28.1(e)(3); 37(a)(7)(b)(ii) and arguments in that the party replying normally can address only the arguments the other party made and is generally prohibited from raising any new arguments.  See Fed. R. App. P. 27(a)(4) ("A reply must not present matters that do not relate to the response).  Franck's most likely will not be able to file a brief in response to DOJ's reply brief.  See Fed. R. App.  P. 28(c)("Unless the court permits, no further briefs may be filed.").   The parties filing as amicus also cannot file a reply brief without permission from the court.  See Fed. R. App. P. 29(f).   DOJ has until midnight in the court's time zone (Eastern Time Zone)  to file the reply.  See Fed. R. App. P. 26(a)(4)(a).  As soon as DOJ's reply brief is filed and available, it will be posted here.