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). 

Positions taken by Society of Veterinary Hospital Pharmacists and Former FDA Officials in Franck's Appeal

In the amicus brief filed by the Society of Veterinary Hospital Pharmacists (SVHP's), its position is clearly stated:

    Regarding the legality of traditional compounding with bulk chemicals, SVHP has adopted a "Position Statement on Compounding," a complete copy of which is available on SVHP's website. See http:svhp.org/position-statement/.   That statement recognizes that in many circumstances traditional compounding with bulk chemicals is essential to providing high quality pharmaceutical care for sick animal patients.  SVHP supports the ability of veterinary pharmacists, in consultation with veterinarians caring for animal patients in need, to compound medicines from bulk ingredients as follows:   If an FDA approved product is unavailable or not appropriate for treatment, compounding with bulk chemicals (APIs) may become necessary and required for proper treatment. The APIs/bulk ingredients used to compound an appropriate product should be of highest possible chemical grade, and the finished product should be compounded from those bulk ingredients using a formula – preferably a USP formula – with evidence-based documentation of potency and stability.  


     The legal position taken by the United States in this matter, through the Federal Drug Administration (“FDA”), is that any compounding from bulk materials by pharmacists for animals is illegal under the Federal Food Drug and Cosmetic Act (“FDCA”), 21 U.S.C. § 301, et seq., and has been since the statute was first enacted in 1938. SVHP respectfully disagrees, and believes that legal position to be incorrect.


In the amicus brief filed by Former FDA officials, they make a very persuasive argument distinguishing between traditional compounding and manufacturing of drugs.  Their summary of argument provides:

     The Federal Food, Drug, and Cosmetic Act (“FD&C Act”) did not criminalize traditional pharmacy compounding, including compounding animal drugs from bulk ingredients. Instead, the FD&C Act was enacted to regulate drug Case: 11-15350 manufacturing, which is categorically distinct from traditional pharmacy compounding. Additionally, none of the amendments to the FD&C Act reflect Congress’ intent to criminalize traditional pharmacy compounding, including compounding animal drugs from bulk substances. 

    In asserting that any compounding of animal drugs from bulk substances is unlawful per se, FDA’s policy guidance fails to adequately distinguish between traditional pharmacy compounding of animal drugs and manufacturing of animal drugs. The key difference between traditional pharmacy compounding of animal drugs on the one hand, and manufacturing of animal drugs on the other, is that the former is conducted in response to a prescription order based on a valid Veterinarian-Client-Patient relationship in the course of professional practice, whereas the latter is not so circumscribed. 

    As FDA acknowledges, its policy guidance on animal drug compounding lacks the force of law. Moreover, in issuing that policy guidance, FDA failed to comply with its own regulations, which require that, prior to issuing such guidance, the Agency must provide notice and an opportunity for interested parties to submit comments. 

    As we understand the factual record in this case, the animal drug compounding that Defendants-Appellees conduct is within the scope of traditional pharmacy practice. The district court’s decision therefore should be affirmed. 

The Former FDA Officials are careful to point out that the "factual record" on appeal did not support manufacturing of drugs.  The FDA failed to present this argument in the district court.  Frank's in his brief argues that this argument is waived on appeal.  Normally, if an issue is not raised in the district court it can be considered waived by the appellate court.  If the 11th Circuit wants to avoid the hard issue of what is traditional compounding and what crosses over into manufacturing then it can do so by applying the waiver doctrine.