UNITED STATES v. ARTICLES OF DRUG

RONEY, Circuit Judge:

In this misbranding case under the Food, Drug, and Cosmetic Act, the Government sought to seize large quantities of drugs on the ground they complied with neither a statute requiring a drug's labeling to contain "adequate directions for use," nor an agency-created exemption from that requirement. The district court held that, because these were prescription drugs, the adequate directions for use requirement was satisfied by the inclusion of (1) a cautionary legend on the drugs' labels stating federal law prohibits dispensing without prescription, and (2) sufficient directions to a physician, so the drugs could be prescribed safely and for their intended purposes. On appeal the Government argues the statute requires directions adequate for self-administration by a layman, so that prescription drugs, which by definition can be dispensed safely only under supervision of a physician, must always meet one of the exemptions established by the Food and Drug Administration. Agreeing with the Government's interpretation of the statute, we reverse the district court's award of summary judgment for the drug manufacturer, and remand the case for consideration of the issue whether the drugs here met the exemption standards.

Prior to a recitation of the facts, it may be helpful to set forth a number of definitions contained in the statutes and the regulations. Once some definitional common ground has been established, it will be easier to discuss the intricate questions presented by this case, since the language employed by the Act encompasses technical terms of art which do not have their ordinary meaning.

The definition of a "misbranded drug" is found in 21 U.S.C.A. § 352, which sets forth a number of requirements as to a drug's labeling, the violation of any of which will cause the drug to be deemed "misbranded." Of particular relevance here is the requirement found in 21 U.S.C.A. § 352(f) that a drug whose labeling does not include "adequate directions for use" or does not meet a regulatory exemption will be deemed "misbranded." The regulation define "adequate directions for use" as directions which could be understood for a layman to use a drug safely and for its intended purposes.^fn5 Section 331(a) makes it unlawful to introduce a misbranded drug into interstate commerce and section 334(a)(1)^fn6 permits the seizure and condemnation of a misbranded drug which either has been introduced into interstate commerce or is held for sale after it or its component parts have been shipped in interstate commerce.

The second term is a "prescription drug," defined in 21 U.S.C.A. § 353(b). A prescription drug by its nature is not safe for use except under the supervision of a licensed practitioner. The same section prohibits dispensing such drugs without a prescription. A prescription drug may be deemed misbranded if it is dispensed without a prescription or if at any time prior to being dispensed it does not bear the statement "Caution: Federal law prohibits dispensing without prescription." Prior to being dispensed a prescription drug must meet the misbranding requirements of section 352, including section 352(f). After a prescription drug has been lawfully prescribed, it is exempt from most of the requirements of section 352 but must meet the labeling requirements of section 353(b)(2).

A "new drug" is one which is not generally recognized among qualified scientific experts as safe and effective for the uses described in its labeling. The focus for determination of "new drug" status is primarily on whether the drug is so recognized, not upon the drug's age. It is unlawful to introduce a new drug into interstate commerce without an approved New Drug Application and any drug in violation of section 355 may be seized and condemned under section 334 after it has been introduced into interstate commerce.

In early 1976, the Food and Drug Administration notified Rucker Pharmacal Co. that there prescription drugs used for the treatment or prevention of pain and various types of infections in humans — SUL-V, AZO-MED and RU-LOR-N — had been determined to be new drugs for which no New Drug Application (NDA) had been approved. Rucker refused to cease marketing the drugs, which it had been marketing for several years, disagreeing with FDA's assessment that the three were new drugs.

On September 20, 1976, the Government instituted the present seizure and condemnation action under section 334(a) against the drugs, alleging the drugs were misbranded because the labeling did not meet the adequate directions for use requirement in section 352(f), and did not meet any of the regulatory exemptions. The Government's counsel explained at oral argument that FDA sought to seize the drugs as misbranded rather than as new drugs because, while the drugs' components had been shipped in interstate commerce and the drugs were held by Rucker for sale, a sufficient prerequisite for a misbranding seizure, the finished articles of drug had not yet been introduced into interstate commerce, arguably a prerequisite to a new drug seizure. We do not decide whether the Government could have seized the drugs as new drugs at that time, because that is not an issue on appeal.

After the drugs were seized, Rucker filed a claim for the drugs and an answer to the Government's complaint. In its answer, Rucker claimed the drugs bore adequate directions for use and claimed that, in any event, the drugs' labeling met the requirements of one regulatory exemption from the adequate directions for use requirement.

The parties filed cross-motions for summary judgment. The Government argued, consistent with its regulations, that the phrase "adequate directions for use" means directions adequate to enable a layman to use a drug safely and effectively for its labeled uses. Since by definition prescription drugs can only be used safely upon the advice of a physician, it is impossible for a prescription drug's labeling to contain adequate directions for use, according to FDA. Therefore, all prescription drugs which do not meet one of the regulatory exemptions are necessarily misbranded. The applicable exemptions, continues the Government's argument, require that any drug subject to a new drug application must bear the labeling submitted for an NDA. Since these were deemed to be new drugs for which an NDA is required, and since there was no approved NDA, the drugs did not meet any regulatory exemption and were thus due to be condemned.

Rucker disputed the Government's interpretation of the statute as requiring adequate directions for a layman, and contended the drugs did meet the statutory requirements because, first, they bore the required warning that under federal law they cannot be dispensed without prescription and second, the labeling contained adequate directions for a physician to prescribe the drugs safely. Rucker contended that is all the statute requires and therefore it was unnecessary to meet one of the regulatory exemptions. In any event, Rucker contended the three met the requirements of the exemptions found in 21 C.F.R. § 201.100 (1980), which applies to prescription drugs, and specifically contended the drugs were not subject to a new drug application.

The district court granted Rucker's motion for summary judgment on the ground that the cautionary notice, plus adequate directions to enable a physician to prescribe the drugs properly, were all the statute requires. The court determined that the agency regulation which defines adequate directions for use as directions sufficient for self-medication by a layman was, when applied to prescription drugs, unreasonable and inconsistent with the statute. The Government's action was dismissed.

The principal question on appeal is whether the district court was correct in rejecting the agency's interpretation of this statute. The test is whether the agency's interpretation is unreasonable or inconsistent with the statutory purpose, for if it is not, the district court was not free to substitute its judgment for that of the administrative agency. Long-standing administrative interpretations of the statute under which the agency operates come into court cloaked with a presumption of correctness which may be thrown aside only when the agency has exceeded the authority granted in the statute. This is especially true in the case of remedial legislation like the Food, Drug, and Cosmetic Act.

All agree that the pivotal issue is whether the drugs bore "adequate directions for use." See 21 U.S.C.A. § 352(f)(1). The term adequate directions for use is not defined further in the statute. Does it mean only adequate directions for lay use or does it include adequate directions for a physician's use? The agency has apparently interpreted the statute to mean only adequate directions for lay use. In 1952 FDA promulgated regulations defining the phrase as follows:

"Adequate directions for use" means directions under which the layman can use a drug safely and for the purposes for which it is intended.

21 C.F.R. § 201.5 (1980). The Government states that not only has this been its interpretation for the twenty-eight years since the regulation was published, but that the regulation merely codified agency practice since 1938. Nothing which has come to the attention of the Court negates that position.

Although not clearly definitive, the legislative history of the misbranding provision does reveal Congress' purpose that the legislation

require the labeling of drugs and devices with information essential to the consumer. The bill is not intended to restrict in any way the availability of drugs for self-medication. On the contrary, it is intended to make self-medication safer and more effective. For this purpose provisions are included in this section . . . requiring that labels bear adequate directions for use. . . .

With this suggestion that the congressional goal was to create drug labeling requirements that would ensure that consumers be provided with all the information they need to self-administer drugs safely, FDA's interpretation of the statute and its regulations clearly furthers that purpose by requiring sufficient directions for a lay person.

The available materials indicate that FDA has since the inception of the Act defined this term in a fairly consistent manner. "This administrative interpretation over many years is entitled to great weight."

Thus, giving proper weight to a long-standing agency interpretation and finding that interpretation consistent with both the apparent congressional purpose and a reasonable interpretation of the statute, we hold that a drug's labeling must contain adequate directions for a consumer to engage in self-medication. Since a prescription drug by definition can be used only under a physician's supervision, and is unsuitable for self-medication, such a drug must qualify for a regulatory exemption created by FDA, pursuant to the authority of section 352(f).

Although not required by precedent in this Circuit, several other courts have so held. We have been unable to uncover contrary authority.

Rucker relies heavily on United States v. El-O-Pathic Pharmacy, 192 F.2d 62 (9th Cir. 1951), which by dictum seems to indicate a contrary result. There the court considered the labeling of a drug found to be "inherently dangerous and not safe and efficacious for use except under the supervision of a physician, . . ." 192 F.2d at 74. An adequate direction for use of such a drug, the court held, must include the cautionary legend required by regulations exempting the drug from the statutory adequate directions for use standard. 192 F.2d at 74-75. The court stated that the cautionary legend would be required even without the exempting regulations because for prescription drugs, "adequate directions for unsupervised lay use cannot be written, . . ." 192 F.2d at 74. The court was not presented with the agency's argument here, however, and its comment is of little persuasive value.

Rucker contends that application of the lay use interpretation, while perhaps reasonable in other contexts, leads in the case of prescription drugs to a quixotic standard that can never be met. The simple response is that prescription drugs are not expected to comply with that standard. Congress itself, in the very subsection containing the requirement, provided for exemptions on terms to be established by FDA. By providing for such exemptions, Congress apparently anticipated that certain classes of drugs might be unable to meet an adequate directions for lay use requirement. Although FDA's interpretation does create an impossible standard, that interpretation is made reasonable by the exemptions authorized in the statute.

Rucker further contends Congress could not have intended that all prescription drugs would be subject to regulations only vaguely authorized by the statute. We disagree. When Congress has authorized the exemptions and delegated to FDA the duty of defining their reach, it is entirely reasonable to ascribe to Congress the intention to let the agency develop their scope.

Rucker points to the language authorizing regulatory exemptions and suggests that mandatory exemptions are inappropriate in the case of prescription drugs. The statutory language reads as follows:

Provided, That where any requirement of clause (1) of this subsection [the adequate directions for use requirement] . . . is not necessary for the protection of the public health, the Secretary shall promulgate regulations exempting such drug or device from such requirement.

This language, the argument goes, suggests that exemptions were anticipated only in the case of drugs or devices posing no threat to the public health. Surely exemptions were not intended for prescription drugs, which are among the most dangerous and pose the greatest potential threat to the public health, if misused.

Although this confuses the potential dangers of the drugs with the requirement of proper branding for protection of the public health, such an interpretation might be reasonable and plausible given the language in the statute. That alone, however, does not show that the agency's interpretation is unreasonable and implausible. Since prescription drugs are only subject to the adequate directions requirement prior to being lawfully dispensed, when they are protected by strict criminal and civil penalties, the agency's view is that they pose no threat to the public health prior to dispensing so long as they comply with the terms of the exemption in the regulation. This view is certainly a reasonable interpretation of the statute.

The Government also points out that the regulations have provided for an exemption of prescription drugs since shortly after the Act was passed in 1938. Although the Act and, in particular, the prescription drug provisions, have been amended since then, Congress did not see fit to eliminate or modify a regulatory scheme which provided for a prescription drug exemption from the requirements of section 352(f)(1). "[A]n agency's long-standing construction of its statutory mandate is entitled to great respect, `especially when Congress has refused to alter the administrative construction.'" The agency's interpretation that prescription drug exemptions are warranted under the section 352(f) proviso, being reasonable and enjoying implicit congressional approval, is entitled to judicial deference and is due to be upheld in this case.

Rucker notes that under section 353(b)(2) the adequate directions requirement applies to prescription drugs only prior to the time they are prescribed and dispensed by a licensed physician. Since a layman may not legitimately obtain prescription drugs during the period in which the adequate directions requirements are applicable, and since the only "user" during that time will be a physician, Rucker argues the "adequate for use by a layman" standard is unreasonable and unjustified by the statute. The requirement that a prescription drug's labeling bear adequate directions for use should be met, Rucker argues, if the labeling includes (1) the cautionary statement required by section 353(b)(4), "Caution: Federal law prohibits dispensing without prescription," and (2) adequate directions for the physician to prescribe the drug safely and effectively.

Rucker's argument might have merit if the adequate directions for use issue posed by this case were a simple matter of statutory construction. Such a scheme would appear to be reasonable and not inconsistent with the statute's thrust. But, as noted above, implementation of this complex statutory scheme is a job entrusted in the first instance to an expert agency. Of course, when there is more than one reasonable interpretation, the court is bound to follow that of the agency.

By defining more explicitly the statute's terms and creating applicable regulations, FDA ensures that a physician is able to prescribe drugs safely and efficaciously. The agency's overall scheme reasonably enhances the statutory purpose without contravening any of its provisions. The agency's approach is reasonable, and is not due to be invalidated.

The district court held in this case that the three drugs bore labeling containing adequate directions for use. Since these drugs are prescription drugs, and therefore could not by definition bear "adequate directions for use," we reverse this holding of the district court.

Because it held that the three drugs complied with the requirement of section 352(f)(1), the district court did not properly address the issue of whether these drugs meet the requirement of any regulatory exemption. On remand the district court must decide that issue. If the drugs do not qualify under one of the exemptions, they will be deemed misbranded and will be subject to condemnation.

At least two exemptions seem to be available: 21 C.F.R. §§ 201.100 and 201.115 (1980). Regulation 201.100 provides that, among other things, if the drug is subject to section 355 of the Act — the "new drug" provisions — the labeling must contain the information "authorized by the approved new drug application . . . ." 21 C.F.R. § 201.100(c)(2) (1980). Since it is undisputed that no new drug application was approved for the three drugs in this case, a central issue for decision in the district court on remand will be whether the three drugs are subject to the Act's new drug section. In other words, the core question is whether these three drugs are generally recognized among qualified experts as safe and effective for use under the conditions prescribed, recommended, or suggested in the drugs' labeling. See 21 U.S.C.A. § 321(p). Regulation 201.115 likewise ties the exemption to approval in a new drug application. 21 C.F.R. § 201.115(a) (1980).

Rucker contended in the district court that section 201.100(c)(2) did not apply because no NDA had been filed. The applicability of section 201.100(c)(2) turns in this case, however, not on whether an NDA has been filed, but on whether these are "new drugs" and are "subject" to section 355. Therefore, the issue is not whether an application had been filed, but whether one should have been filed.

The Government argues the drugs have previously been determined by FDA to be new drugs, based upon the conclusion of various drug efficacy studies, and therefore the exemptions are unavailable, there being no approved new drug application covering the three Rucker drugs. In this enforcement proceeding, however, Rucker never confronted directly the new drug question, which underlies this entire dispute, nor did the district court decide whether the Government's determination is in fact correct. Accordingly, on remand, the district court, in considering the availability of either of the two exempting provisions, will necessarily decide whether RULOR-N, SUL-V and AZO-MED are new drugs.

REVERSED AND REMANDED.