It's ultra vires time again

The FDA Law Blog has a good review of a recent federal decision finding an agency was acting beyond its authority in "Federal District Court in Florida Delivers a Decisive Blow to FDA’s Authority to Regulate Pharmaceutical Compounding from Bulk Substances" by Karla L. Palmer & Jeffrey N. Gibbs. The opinion also covers Chevron deference and the importance of rulemaking.

[A] Florida federal district court ruled that FDA did not have authority to enjoin the “long-standing, widespread, state-regulated practice of pharmacists filling a veterinarian’s prescription for a non-food producing animal by compounding from bulk substances.” United States v. Franck’s Lab, Inc., No. 5:10-cv-147-Oc-32TBS (M.D. Fla. filed Sept. 9, 2011) ... Significantly, the court chastised the FDA for trying to “eradicate the line” between what would be considered unlawful manufacturing and the traditional compounding of animal medications.  After engaging in a detailed historical, regulatory and legal analysis of pharmaceutical compounding, the court held that FDA’s attempted assertion of authority over “traditional pharmacy compounding in the context of a pharmacist-veterinarian-patient relationship is contrary to [the] congressional intent” of the Federal Food, Drug and Cosmetic Act (“FDCA”). ...   

The court stated at the outset of its opinion on summary judgment that FDA “acknowledges that this is the first time it has sought to enjoin a state-licensed pharmacist from bulk compounding of animal medications.”  Indeed, FDA made it clear to the court that it was staking “the bright line position that any compounding of animal medications from bulk substances violates … the FDCA, even when conducted by a state-licensed pharmacist for an individual animal patient pursuant to a valid veterinary prescription.” ... FDA further contended that a “traditional compounding practice implicates the same concerns under the FDCA as the mass-production, mass-marketing, and mass distribution of unapproved animal drugs by an unlicensed manufacturer.”  

In response to FDA’s claims, Franck’s submitted industry, fact, expert and other declarations supporting its position that it was not engaging in unlawful manufacturing of unapproved animal drugs.  The FDA failed to present evidence refuting Franck’s position, despite having an “ample opportunity” to do so, “resting instead on its position that compounding animal drugs from bulk … constitutes a per se violation of the FDCA.”  The court noted that FDA also claimed that this was a “simple case” because “the literal, plain language of the 1938 FDCA gave the agency enforcement authority to prevent pharmacists from bulk compounding medications for non-food producing animals.”

The court disagreed with FDA’s “maximalist” portrayal of its own statutory authority. Also, as underscored by its 80-page opinion, the court disagreed that the case was a “simple” one. After undertaking a historical review of pharmaceutical compounding and compounding in bulk, the court reviewed FDA’s fifty-plus years of its “regulation” of compounding practices. It found untenable the agency’s position that, for over fifty years since enactment of the FDCA, it did not assert its authority to regulate pharmacy compounding; nevertheless, “once it has shown a violation of the statute (i.e., that a ‘new animal drug’ has been distributed without an approval or exemption in place), it enjoys unfettered enforcement discretion” to take action. ...

The Court pointed out that Chevron deference applies to ambiguous statutes, which the FDCA is not in this context. The article points out that "[a] recurring criticism of FDA’s use of guidance documents instead of rulemaking is that the agency does not attempt to test its views through the more rigorous rulemaking process."

What we have here is both sides claiming that the "plain language" of the statute supports their respective positions. Either (a) the FDA has been wrong for 50 years, or (b) the FDA is stupid or arrogant now, or (c) the FDCA is ambiguous on this point. The FDA says (a), but the plaintiff and the Court say (b). The 11th Circuit might say (c), because the District Court relied on legislative intent to interpret the statute, and legislative intent would only be invoked if the statute was ambiguous. This would throw it back to Chevron, and the FDA would probably win. EMM