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Hoffmann-La Roche Inc. v. Kleindienst

March 28, 1973

HOFFMANN-LA ROCHE, INC., PETITIONER
v.
RICHARD G. KLEINDIENST, ATTORNEY GENERAL OF THE UNITED STATES AND JOHN E. INGERSOLL, DIRECTOR, BUREAU OF NARCOTICS AND DANGEROUS DRUGS, UNITED STATES DEPARTMENT OF JUSTICE, RESPONDENTS



Author: Biggs

Before BIGGS and ROSENN, Circuit Judges, and KRAFT, District Judge

Opinion OF THE COURT

BIGGS, Circuit Judge.

The petitioner, Hoffmann-La Roche, Inc. (Hoffmann), has brought this special statutory proceeding against the Honorable Richard G. Kleindienst, Attorney General of the United States, and John E. Ingersoll, Director of the Bureau of Narcotics and Dangerous Drugs of the United States Department of Justice (respondents), to review a Final Order issued by the Director, filed on February 5, 1971 (36 Fed. Reg. 2555 (1971)).*fn1 The proceedings were commenced pursuant to § 201(v) of the 1965 Amendments to the "Federal Food, Drug, and Cosmetic Act"*fn2 and were proceeded with under the "Comprehensive Drug Abuse Prevention and Control Act of 1970." Title II of the 1970 Act deals with the control of drugs and is separately entitled the "Controlled Substances Act," 21 U.S.C. § 801, et seq.*fn3 Review is sought pursuant to 21 U.S.C. § 371(f) and 5 U.S.C. § 706, formerly Section 10(e) of the Administrative Procedure Act.

Chlordiazepoxide*fn4 (Librium) and diazepam (Valium) are described as a new class of drugs which differ chemically from barbiturates and other drugs known at the time of their synthesis. Librium has been in general medical use since 1960 and Valium since 1963. In 1966 at the original hearing before the Bureau it was estimated that over fifteen million patients had taken Librium and over five million patients had received doses of Valium. The 1965 Act set up special controls over the prescription and distribution of "depressant and stimulant drugs." "Depressant or stimulant drugs" were defined to include barbiturates, amphetamines, and any other drug which the Secretary of Health, Education and Welfare designated by regulation as having a potential for abuse because of its depressant or stimulant effect on the central nervous system.

The legislative history of the Act must be referred to. Very relevant to that history is the Final Report of The President's Advisory Commission on Narcotics and Drug Abuse, at 2 (1963), which states: "When this report speaks of 'drug addiction' it is using the term in its full technical sense to include both the psychological and the physical dependence. When it speaks of 'drug abuse' it is referring to the broader problem which includes also those drugs which create only psychological dependency. We will use the term 'drug abuse' in this report as existing when an individual takes psychotoxic drugs under any of the following circumstances: (a) in amounts sufficient to create a hazard to his own health or to the safety of the community; or (b) when he obtains drugs through illicit channels; or (c) when he takes drugs on his own initiative rather than on the basis of professional advice. Drug abuse today involves not only the narcotic drugs and marihuana, but to an increasingly alarming extent other drugs such as the barbiturates, the amphetamines and even certain of the 'tranquilizers.' This latter group will be referred to in this report as the 'dangerous drugs.'"

Regulation 21 C.F.R. § 166.2(e) (1967), follows the Final Report of the President's Advisory Commission on Narcotics and Drug Abuse, supra at 2, and states in part as follows: "(e) The Commissioner may determine that a substance has a potential for abuse because of its depressant or stimulant effect on the central nervous system or its hallucinogenic effect if: (1) There is evidence that individuals are taking the drug or drugs containing such a substance in amounts sufficient to create a hazard to their health or to the safety of other individuals or of the community; or (2) There is significant diversion of the drug or drugs containing such a substance from legitimate drug channels; or (3) Individuals are taking the drug or drugs containing such a substance on their own initiative rather than on the basis of medical advice from a practitioner licensed by law to administer such drugs in the course of his professional practice * * *."

This case was begun by a proposed regulation filed by Acting Commissioner Rankin on January 17, 1966.*fn5 31 Fed. Reg. 565 (1966). The issues presented by this, the present proceeding, were stated to be as follows in the notice of May 16, 1966:*fn6 "1. Whether there is evidence that individuals are taking the drug or drugs [Librium or Valium] containing such substances in amounts sufficient to create a hazard to their health or to the safety of other individuals or of the community; 2. Whether there is evidence of significant diversion of the drug or drugs [Librium or Valium] containing such substances from legitimate drug channels; 3. Whether there is evidence that individuals are taking the drug or drugs [Librium or Valium] containing such substances on their own initiative rather than on the basis of medical advice from a practitioner licensed by law to administer such drugs in the course of his professional practice; and 4. Whether, if chlordiazepoxide [Librium] has been the subject of abuse, diazepam [Valium], a newer drug, is so related to it as to make it likely that the drug will have the same potentiality for abuse." 31 Fed. Reg. 7174 (1966) The proceeding culminated in the Final Order of Director Ingersoll filed February 5, 1971,*fn7 ruling that chlordiazepoxide and its salts, and diazepam, respectively Librium and Valium, were depressant drugs having a potential for abuse because of their depressant effect on the central nervous system. This is the order which we review here. If the order is sustained, Librium and Valium, already available only upon prescriptions of licensed physicians, will be subject to additional record-keeping, inspection, regulation, and labeling requirements by legitimate channels of distribution. Moreoever, illicit, i.e., non-allowable, possession and distribution would be illegal and subject to criminal sanctions as is presently the case in respect to barbiturates and amphetamines, commonly considered as "depressant" and "stimulant" drugs. Hoffmann concedes that Librium is a depressant drug. "The conclusion that Librium has a depressant effect is not controverted." Hoffmann's brief at 9. Hoffmann objected to Librium and Valium being made subject to regulation, filed its petition for review and injunctive relief, and this court stayed Director Ingersoll's Final Order until our disposition of the case.*fn8

The issues presented are rather hard to frame for they are differently stated by the parties. Hoffmann asserts in its brief at 1-2: "The issues are whether the order of the Director should be held unlawful and set aside because - (1) the order is in excess of statutory authority or limitation in that it employs a decisional standard different from that established by Congress; (2) the conclusions as to chlordiazepoxide (Librium) are not supported by adequate findings or substantial evidence on the whole record; (3) the listing of diazepam (Valium) cannot be based on the experience with Librium, and the conclusions as to Valium are not supported by adequate findings or substantial evidence on the whole record; and (4) the order was issued without observance of procedure required by law and due process." The respondents' "Counterstatement of the Issues Presented for Review" is as follows: "1. Whether the findings of the Director, Bureau of Narcotics and Dangerous Drugs, that Librium and Valium are 'depressant drugs' subject to control under the Drug Abuse Control Amendments of 1965, are supported by substantial evidence of record. 2. Whether the Administrative order listing Librium and Valium as drugs subject to control under the Drug Abuse [Control] Amendments of 1965 should be set aside on the ground that it was entered without due process of law." Another issue which we designate as "(3)" and which must be discussed is whether the proceedings before the Director were "rule making" or "adjudication," as defined in 5 U.S.C. § 551(5) and 5 U.S.C. § 551(7).*fn9

I.

We deal first with this case on the basis of the evidence which was before the Director, without regard to the matters discussed under the later headings of this opinion. Hoffmann contends that the Director's order is based on a decisional standard different from that established by the statute and that the agency has not met the requirements of the applicable statutes in that "'[1] the agency must make findings that support its decision and [2] those findings must be supported by substantial evidence.' [Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168, 9 L. Ed. 2d 207, 83 S. Ct. 239 (1962)] Moreover, mere 'conclusionary statements... are not the sort of findings which enable [the Court] intelligently to pass upon the correctness of the judgment reached. 'The agency's findings must... be sufficiently definite to enable the courts to perform the task of judicial review.' [Braniff Airways, Inc. v. Civil Aeronautics Board, 113 U.S. App. D.C. 132, 306 F.2d 739, 742 (D.C. Cir. 1962)]."

The applicable law is cogently set out by Judge Butzner in Carter-Wallace, Inc. v. Gardner, 417 F.2d 1086 (4 Cir. 1969), in which Carter-Wallace, Inc. attacked a Food and Drug Administration order subjecting meprobamate to control as a depressant drug. The court stated: "In selecting 'potential for abuse' as one of the criteria for subjecting a drug to special control, the House Committee did not intend this to be determined on the basis of the drug's having a potential for isolated or occasional nontherapeutic purposes. Instead, the committee recommended that a drug's potential for abuse should be determined 'on the basis of its having been demonstrated to have such depressant or stimulant effect on the central nervous system as to make it reasonable to assume that there is a substantial potential for the occurrence of significant diversions from legitimate drug channels, significant use by individuals contrary to professional advice, or substantial capability of creating hazards to the health of the user or the safety of the community."*fn10

The principles of law and criteria enunciated in Carter-Wallace, supra at 1090, we believe to be sound and we adopt them.

The "Conclusions of Law" reached by the Director are as follows:*fn11

"1. The Drug Abuse Control Amendments of 1965 were intended to protect the public health and safety by establishing special controls for depressant and stimulant drugs. This protection was to be accomplished through increased record keeping and inspection requirements, through providing for control over intrastate traffic in these drugs because of its effect on interstate traffic, and through making possession of these drugs, other than by the user, illegal outside of the legitimate channels of commerce.

"2. Chlordiazepoxide (Librium) and diazepam (Valium) are drugs with a depressant effect on the central nervous system. They may be legitimately dispensed only upon the prescription of a practitioner licensed by law to administer such drugs, and in full conformity with section 503(b) of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. 353(b).

"3. The substantial, probative, and reliable evidence of record establishes that chlordiazepoxide (Librium) due to its depressant effect on the central nervous system has been abused in the past in the following ways:

"(a) There has been significant use of chlordiazepoxide (Librium) in amounts sufficient to create a hazard to the health of the individual and to the safety of other individuals and the community.

"(b) There has been significant diversion of chlordiazepoxide (Librium) from legitimate channels.

"(c) There has been significant use of Librium by individuals on their own initiative rather than on the basis of medical advice from a practitioner licensed by law to administer such drugs in the course of his professional practice.

"4. Due to the past history of abuse of chlordiazepoxide (Librium), because of its established capacity to substitute for other sedative drugs which are known to be abused and which are now subject to increased controls of the amendments, it is reasonable to conclude that the abuse of chlordiazepoxide (Librium) will continue to increase unless this drug is similarly brought under the control of the amendments.

"5. The substantial, probative, and reliable evidence of record establishes that diazepam (Valium) due to its depressant effect upon the central nervous system has been abused in the past in the following manner:

"(a) There has been significant use of diazepam in amounts sufficient to create a hazard to the health of the individual and to the safety of other individuals and the community.

"(b) There has been significant use of diazepam (Valium) by individuals on their own initiative rather than on the basis of medical advice from a practitioner licensed by law to administer such drugs in the course of his professional practice.

"6. Diazepam (Valium), the newer drug, is so related to chlordiazepoxide (Librium), a drug for which there is considerable evidence of continuing abuse as to make it likely that it will have the same potentiality for abuse.

"7. Due to past history of abuse of diazepam (Valium), because of its close relation to chlordiazepoxide (Librium), and because of its established capacity to substitute for other sedative drugs which are known to be abused and which are now subject to controls under the provisions of the Drug Abuse Control Amendments of 1965, it is reasonable to conclude that the abuse of diazepam (Valium) will continue to increase.

"8. Chlordiazepoxide (Librium) and diazepam (Valium) are drugs which because of their depressant effect on the central nervous system, have a substantial potential for significant abuse within the meaning of the Amendments, 21 U.S.C. 321(v)(3).

"9. Chlordiazepoxide (Librium) and diazepam (Valium) are 'depressant or stimulant drugs' within the meaning of 21 U.S.C. 321(v), and are therefore subject to the provisions of 21 U.S.C. 360a. Any drug which contains any quantity of chlordiazepoxide or diazepam is a 'depressant or stimulant drug' within the meaning of 21 U.S.C. 321(v)(3) and is also subject to the provisions of 21 U.S.C. 360a.

"Therefore, it is ordered, That the stay of effectiveness announced May 17, 1966 (31 F.R. 7174), on the listing of chlordiazepoxide and its salts and diazepam in § 166.3(c)(1) [redesignated § 320.3(c)(1)] as a drug subject to control under the Amendments by the order of March 19, 1966 (31 F.R. 4679), be ended."

The last paragraph of this order brought its terms into effect until stayed by the order of this court.

The amount of evidence presented in this case has been enormous. The Findings of Fact contained in the Final Order of the Director, as set out hereinafter, and the references to their supporting evidence, we deem to be sufficient for the purposes of this opinion.

"1. The benzodiazepines, of which chlordiazepoxide (Librium) was the first synthesized, are a new class of drugs, different chemically from the barbiturates or any other drugs known at the time of their syntheses (Zbinden, Tr. 2080-84; R-142C; R-119; Lofft, Tr. 531).

"2. Chlordiazepoxide (Librium) is a benzodiazepine compound with the following chemical formula: 7-chloro-2-methylamino-5-phenyl-3H-1, 4-benzodiazepine 4-oxide hydrochloride. It is a colorless crystalline substance; is soluble in water and its molecular weight is 336.22 (R-119).

"3. Diazepam (Valium) is a benzodiazepine derivative with the following chemical formula: 7-chloro-1, 3-dihydro-1-methyl-5-phenyl-2H-1, 4-benzodiazepine-2-one. It is a colorless crystalline compound insoluble in water and its molecular weight is 284.74 (R-120).

"4. Experimental studies of their effects in animals were conducted by the Respondent. These tests indicated that Librium and Valium are depressant drugs having a marked calming action on the central nervous system at lower doses. An increase in dose resulted in more pronounced effects on the central nervous system, i.e., drowsiness, motor incoordination or ataxia, and sleep. On the basis of specially designed experiments whereby excitation was induced by surgical or chemical means, or by putting the animals under stressful conditioned behavior situations, the benzodiazepines produced an antiexcitatory effect at dose levels below those that caused neurotoxicity or over-sedation, thus suggesting a usefulness in the treatment of anxiety and tension. The benzodiazepines are not generally recognized as effective sedative-hypnotic agents within the normal dosage range. (Zbinden, Tr. 2199-2204; R-142; Lang (1963), R-145; Heise (1961), R-146).

"5. The Respondent also presented evidence concerning the results of experimental tests on animals, designed to determine the primary site of action of the benzodiazepines. Primary site of action is defined to mean the location in the brain where a drug at the lowest dose will produce an effect. It is believed that the primary site of action of these drugs is in the subcortical structures of the brain. The precise site of action cannot be determined with certitude. Dr. Gerhard Zbinden of Roche Laboratories stated that their tests showed it to be in the hippocampus (Tr. 2187-88). However, Dr. Harold Himwich, another Respondent witness, testified that his tests showed that the area most sensitive to low doses of Librium and Valium, was in the transmission from the amygdala to the hippocampus (Tr. 2677). Moreover a doubling of the dose in these tests done at Roche Laboratories resulted in the drug effect spreading to the cortex, the area of the brain associated with judgmental functions. (Zbinden, Tr. 2187; R-142S). When the dose was further increased the whole brain was involved. (Tr. 2188).

"6. Librium and Valium are widely used in the treatment of anxiety and tension, as muscle relaxants, as anticonvulsants, and as anti-depressants.

"7. Librium has been in general medical use since 1960. More than 6 billion capsules of the drug have been commercially distributed, and millions of patients have taken Librium since its approval by the Food and Drug Administration (Bennett, Tr. 4135-36; R-222).

"8. Librium is indicated whenever fear, anxiety and tension are significant components of the clinical profile.

"In low oral doses, the drug is effective in mild to moderate anxiety and tension, tension headache, pre- and post-operative apprehension, premenstrual tension and menstrual stress, chronic alcoholism, behavior disorders in children, and whenever anxiety and tension are concomitants of gastrointestinal, cardiovascular, gynecologic or dermatologic disorders.

"Skeletal muscle spasticity (resulting from spinal cord injury, congenital or acquired brain damage) and other debilitating neuromuscular disorders such as dystonia and athetosis frequently respond to Librium. Painful muscle spasm associated with myositis, fibrositis, bursitis, tenosynovitis, arthritis, fractures, intervertebral disc syndrome, whiplash injury, low back pain or postural strains is often benefited when emotional factors are present.

"In higher oral doses, Librium is of value in the more severe anxiety and tension states, agitated depression and ambulatory psychoneuroses (e.g., acute and chronic anxiety states, phobias, obsessive-compulsive reactions and schizoid behavior disorders). In addition, it may be useful in certain types of acute agitation due to chronic alcoholism or alcoholic withdrawal (including delirium tremens), hysterical or panic states, paranoid states and acute stages of schizophrenia (R-119).

"9. Diazepam (Valium) is of use in dealing with anxiety reactions stemming from stressful circumstances or whenever somatic complaints are concomitants of emotional factors. It is useful in psychoneurotic states manifested by anxiety, tension, fear and fatigue. Valium may also be useful in acute agitation due to alcohol withdrawal. Valium may be of use to alleviate muscle spasm associated with cerebral palsy and athetosis (R-119)."*fn12

Finding 15, 36 Fed. Reg., at 2556, states: "Substantial evidence of record establishes that individuals have developed psychic dependence to Librium and Valium. The uncontested testimony of physicians was that patients find the two drugs pleasant to take. (Murray, Tr. 364; Barten, Tr. 454; Evans, Tr. 813-15, 829-30). They provide an inner sensorial feeling that is gratifying to the patient (Uzee, Tr. 907). Patients were reported to have been apprehensive about being without their supply of the medication and expressed to their physicians a reluctance to come off the drugs. Individuals have attempted unsuccessfully to discontinue taking Librium and Valium when a dependency has developed. Still other patients have gone to excessive lengths to maintain their supply of the two drugs. (Lofft, Tr. 1560; Evans, Tr. 817, 825; Uzee, Tr. 905-06; Galen, Tr. 1443-48; Chelton, Tr. 1672; Williams, Tr. 1757-59; Guile (1963), G-14; Lingjerde (1965), G-55; Wenkstetten (1965), G-91, Table 3; Kranz (1965), G-94, pp. 8-9). This experience confirms the opinion expressed by experts that Librium and Valium are drugs to which individuals can and do develop psychic dependence. (Eddy, Tr. 1077; Isabell [sic], Tr. 1552-54; Eddy, et al. (1965), G-81, 727." An examination of the citations of Finding 15 shows that there is substantial evidence that individuals have developed psychic dependence to Librium and Valium. Therefore, one of the elements necessary for a demonstration of "substantial potential for significant abuse" is present as found by the Director. True, there is evidence to the contrary, as the Director acknowledges in his Finding of Fact 16, but we are not judges of the evidence for the reasons set out hereinafter.

We think it is well established that drugs which are capable of producing euphoria are peculiarly susceptible to being abused. Finding of Fact 17 of the Final Order defines "Euphoria" as "an exaggerated sense of well being." (21 C.F.R. 166.2(c)(2) (1967). "The evidence establishes that euphoria has been reported following use of Librium and Valium. (Barten, Tr. 454; Chambers, Tr. 1628; Domino, Tr. 4617; Zbinden et al. (1961), R-118, pp. 627, 634; Guile (1963), G-14, p. 57; Towler et al. (1962), R-73, 833; Darling (1963), G-48, p. 502." 36 Fed. Reg., at 2556. Checking out these citations we find there is sufficient evidence to support the finding that Librium and Valium produce euphoria albeit the evidence in this respect cannot be characterized as very ample or very persuasive.

"Tolerance" is described in Finding of Fact 19 as "... an adaptive process which contributes to abuse because, where it exists, a person tends continually to increase the amount of drug being taken. Tolerance has developed when, after repeated administration, a given dose of a drug produces a decreasing effect or conversely when increasingly larger doses must be administered to obtain the effects observed with the original dose (Jaffe (1965), R-113, p. 285; Deneau, Tr. 1009)." 36 Fed. Reg., at 2557. We accept this definition. Finding of Fact 22 states: "The evidence establishes that it is possible to develop tolerance to Librium and Valium but that it has not been frequently observed or reported." But the same finding states: "There was... evidence that patients have increased their dosage in order to maintain relief of anxiety (Uzee, Tr. 913, 919; Mr. E, Tr. 494-95; Lingjerde (1965), G-55, p. 3). To date, however, there have been few such reports in the medical literature and Respondent's witnesses have testified that tolerance to Librium and Valium has not been encountered in extensive use over many years (Gibbs, Tr. 2263-64; D. Feldman, Tr. 2532-33; Bercel, Tr. 2653-54, 2657; Scherbel, Tr. 2821; Goldman, Tr. 2914; Friend, Tr. 2937; Cohen, Tr. 3218, 3220; Schwab, Tr. 3383-84; D. Feldman, Tr. 3682; Knott, Tr. 3716; D'Agostino, Tr. 3817; Stanfield, Tr. 3844; Snell, Tr. 3884; Smith, Tr. 3924; Schiele, Tr. 4033; Greenberg, Tr. 4060)." 36 Fed. Reg., at 2557. The evidence of tolerance developing from repeated doses of Librium and Valium is not too strong, and if we had this case de novo we would not make the finding as did the Director on the citations of evidence stated in the finding. However, the statement made by the Director in Finding 22 that the evidence does establish that it is possible to develop tolerance to Librium and Valium is supported by the record.

Another factor in determining a drug's potential for abuse is the existence of withdrawal symptoms. As to withdrawal symptoms associated with Librium and Valium, Finding 34 seems to us to be conclusive. That Finding states: "Dr. John G. Lofft, a psychiatrist and specialist in the treatment of alcoholism and allied addictions, testified that the abstinence syndrome associated with Librium and Valium withdrawal compares to that experienced after abrupt withdrawal from barbiturates (Tr. 550). It is characterized in its mildest form by insomnia and increased anxiety (Tr. 548-49). When the patient has been taking elevated doses for long periods of time the withdrawal syndrome is marked by restlessness, tremulousness, muscle pains, perspiration, hallucinations, and sometimes, although not frequently, convulsive seizures (Tr. 540, 543, 547). The severity of the withdrawal is dependent upon the degree of dependence, and the amount of drug the person has been taking (Tr. 551-52; Jaffe (1965), R-133, p. 289). Librium-Valium withdrawal differs from the barbiturate withdrawal syndrome in that it persists over a longer period of time (Lofft, Tr. 550-51)." 36 Fed. Reg., at 2558. There is ample evidence to support this finding.

Finding 38 seems to supply a strong basis for the regulation proposed under the Drug Abuse Control Amendments of 1965. It is as follows: "There was some evidence indicating that Librium may produce a paradoxical rage reaction, i.e., an excitable and exhilarated state whereby the individual may become a danger to himself and to others. This reaction has been manifested in isolated instances by a hostile and irritable mood to a point where the person taking Librium has become violent and has physically threatened the lives of others (Murray, Tr. 355-56, 357-59, 360-63; Barten, Tr. 447; Lofft, Tr. 558; Gibbs, Tr. 2254-55; Stanfield, Tr. 3860-61; Murray (1962), G-24; Bowes (1965), G-44, p. 338; Krakowski (1963), G-51 p. 49; Dean (1962), R-70, p. 4)." 36 Fed. Reg., at 2558. An examination of the citations supports the finding.

Is there a substantial potential for occurrence of significant divergence from legitimate drug channels, significant use by individuals of Librium and Valium contrary to professional advice, or substantial capability of creating hazards to the health of the user and the safety of the community? See again H.R. Rep. No. 130, 89th Cong., 1st Sess. 7 (1965), set out above.

There is evidence which supports Finding 40 that pharmacists are distributing amounts of Librium without authorization from physicians, i.e., substantial diversion from legitimate drug channels. Finding 40 is as follows: "The evidence indicates that some pharmacists are distributing amounts of Libroum without authorization from physicians. During a 5-year period extending from 1961 through 1965, U.S. Food and Drug Administration records show that there were 35 completed prosecutions involving the drug chlordiazepoxide, all of which were terminated in convictions. These 35 cases involved 132 illegal buys of the drug, made either without a prescription or as requests for a refill when no refill was authorized. Investigations in three of these cases were initiated following complaints that a druggist had illegally dispensed Librium. (Clevenger, Tr. 1846). At the close of the investigations in 14 of these cases, Food and Drug Inspectors checked the records, invoices, and prescription files of the drugstores involved. On the basis of investigation it was estimated that in each case between 47 percent and 100 percent of the pharmacies' supply of chlordiazepoxide had been dispensed without authorization of a physician. An average of 75 percent of the total amount of the drug dispensed by the pharmacists involved in these instances could not be accounted for. This amounted to over 54,000 capsules (Clevenger, Tr. 1799-1807, 1815, 1834-36; G-268). See also Ashcraft, Tr. 1158, 1519; Witness X, Tr. 1895-97 for other evidence to the same effect." 36 Fed. Reg., at 2558. See also Findings 41 to 46, inclusive. 36 Fed. Reg., at 2559. All of these findings are amply supported by evidence.

Hoffmann places great emphasis on 5 U.S.C. § 706, formerly § 10(e) of the Administrative Procedure Act, which provides that a reviewing court must "hold unlawful and set aside agency action, findings, and conclusions" found to be "contrary to constitutional right," "in excess of statutory... authority," "without observance of procedure required by law," or "unsupported by substantial evidence." The section further requires that, "In making the foregoing determinations, the court shall review the whole record...." We do not disagree, nor do the respondents, with this statement of the law. We have reached the conclusion that the Director's Final Order and his Findings of Fact and Conclusions of Law are in accordance with 5 U.S.C. § 706, and we are compelled to the conclusion, as was he, that Librium is a drug having a depressant effect on the central nervous system (as conceded) and that it has a substantial potential for significant abuse. We believe that it must be conceded that Valium, a diazepam, has a stronger and more positive effect on persons ingesting it than does Librium. While Valium has a different chemical formula the differences are not qualitatively significant enough to cause us to conclude that the effects attributed to Valium would be other than of stronger potentialities than those attributed to Librium. We cannot conclude that Valium requires a separate hearing on a new and perhaps more detailed record than that which is presently before us.*fn13

II.

This opinion could have been terminated at the conclusion of the previous heading "I." were it not that other points remain for discussion and disposition. Hoffmann asserts that the Director's order was issued without observance of procedure required by law and without due process of law. This brings us to a critical issue in this case, whether the proceedings were "rule making" or "adjudication" as defined, respectively, in 5 U.S.C. § 551(5) or 5 U.S.C. § 551(7). Whether they were rule making or adjudication, the ultimate standard against which we must evaluate the fairness of the proceedings is due process of law. Permian Basin Area Rate Cases, 390 U.S. 747, 767, 20 L. Ed. 2d 312, 88 S. Ct. 1344 (1968); Morgan v. United States, 304 U.S. 1, 18, 82 L. Ed. 1129, 58 S. Ct. 773 (1937).

(a) Hoffmann contends that the proceedings were essentially adjudicatory and that the participation of the Government's trial counsel in the preparation of the Director's tentative and final orders therefore contravened the separation of functions principle as enunciated by 5 U.S.C. § 554 and violated Hoffmann's right to due process.*fn14 Section 554(d) contains the following language: "An employee or agent engaged in the performance of investigative or prosecuting functions for an agency in a case may not, in that or a factually related case, participate or advise in the decision, recommended decision or agency review...." Congress has limited the above restriction to adjudicatory proceedings, see 5 U.S.C. § 554(a), and "[the] conclusion seems to be rather solid that no law requires the [Director] to separate functions in rule making for which on-the-record hearings are required."*fn15 The line dividing adjudication and rule making is, unfortunately, not always entirely clear, and this is true in the case at bar. However, consideration of the relevant factors leads us to conclude that the challenged procedures were rule making.

Here the final order will apply across the board to all producers, wholesalers, and distributors of Librium and Valium, as well as to pharmacies and physicians. Hoffmann was not singled out for special consideration based on its own peculiar circumstances. The fact that Hoffmann may be one of those adversely affected explains the highly adversary character of the proceeding but does not change the generalized nature of the order. Although the proceeding involved a concrete factual situation from which factual inferences provided the basis for the Director's order, the facts and inferences therefrom were used to formulate a basically legislative-type judgment of entirely prospective application. Compare United States v. Florida East Coast Railway Company, 410 U.S. 224, 35 L. Ed. 2d 223, 93 S. Ct. 810, 41 Law Week 4247, 4254 (1973). Since the proceedings were thus in substance rule making, the separation of prosecuting and decision-making functions was not required. Willapoint Oysters, Inc. v. Ewing, 174 F.2d 676 (9 Cir. 1949).

(b) Hoffmann contends that the Director relied on evidence not of record. On November 4, 1969, the day before oral argument was to commence before the Hearing Examiner, the United States Court of Appeals for the Fourth Circuit handed down its decision in Carter-Wallace, Inc. v. Gardner, supra, affirming the Commissioner's use of "substantial potential for significant abuse" in determining whether or not Meprobamate should be listed. At the conclusion of the oral argument, at the Director's order, Government counsel indicated a desire to submit additional evidence covering the three year period from the close of the original hearings, viz., November 18, 1966, to November 4, 1969. The Director requested counsel to attempt to arrive at a stipulation which would simplify any further proceedings. Such a stipulation was agreed to and presented to the Director in the form of a "Joint Recommendation" of counsel.*fn16

The stipulation recites that four categories of documents which the Government would offer are "substantially similar to evidence previously submitted." The four categories were: "(1) Cases, evidenced by hospital records, medical records and reports, and police records and reports, involving intentional overdoses of Librium or Valium, alone or in conjunction with other drugs, in an apparent attempt at suicide or in a suicidal gesture. (2) A more limited number of cases of the kind described in Category (1), in which death is alleged to have resulted from an intentional overdose of Librium or Valium, most of which also involved simultaneous ingestion of other drugs. (3) Reports of audits of retail drugstores undertaken by Federal or State officials which have shown shortages of Librium or Valium, some of which have resulted in administrative action against the pharmacists involved. (4) Police reports showing instances in which a person arrested for drug violations or for other reasons was found to have Librium or Valium in his possession."

The stipulation also provided, "The cases which would be evidenced by these documents appear to be substantially similar to those already in evidence in the prior hearing and do not appear to differ significantly in their nature or frequency of occurrence from those already in evidence. Therefore, this evidence seems cumulative, except to the extent that it indicates that instances of the kind already in evidence have continued to occur since the hearing." The stipulation provided*fn17 that the documents referred to were not to be put in evidence and that the supplemental hearing was to be limited to the question of the use of Librium and Valium in conjunction with the abuse of other drugs. The documents were not offered and are not of record.

Hoffmann asserts that all that is of record is the description of their nature and contents quoted immediately above but that nonetheless the Director's Final Order refers to the Joint Recommendation and states: "'As a consequence, evidence relating to intentional overdoses and attempted suicides; evidence concerning suicides and other deaths in which the drugs played a significant role; reports of audits of retail drugstores detailing significant shortages which could not be legitimately accounted for; and police reports showing instances in which the drugs were discovered by police during their investigation of drug and other criminal offenses suggesting use and distribution outside of the legitimate channels, were neither to be presented nor rebutted by either side....' (Emphasis added.)"*fn18 The point made by Hoffmann is that the order, to quote its brief which states the petitioner's position succinctly, "does not disclose how the Director, who is supposed never to have seen them, concluded that these documents showed that the deaths were ones 'in which the drugs played a significant role'; or how he concluded that the audits of retail drugstores showed 'significant shortages which could not be legitimately accounted for'; or how he concluded that possession of the drugs by persons arrested suggested 'use and distribution outside of the legitimate channels' - since such characterizations do not appear in the stipulation.

"The comments indicate one of two situations: either the Director read and made an evaluation of the documents, without Roche [Hoffmann] having an opportunity to rebut them or offer evidence as to their significance, or the order was written by the attorneys who had collected the documents for use in their case in behalf of the Government.*fn19 Neither circumstance is consistent with due process." (Emphasis supplied), citing West Ohio Gas Co. v. Public Utilities Commission of Ohio, 294 U.S. 63, 79 L. Ed. 761, 55 S. Ct. 316 (1935); Ohio Bell Telephone Co. v. Public Utilities Commission of Ohio, 301 U.S. 292, 81 L. Ed. 1093, 57 S. Ct. 724 (1937).

The point asserted by Hoffmann is without merit. The emphasis put upon the word "significant" in the Director's final order as quoted above is in fact nothing more than an echo, a reverberation of that adjective as used in the Hearing Examiner's Supplemental Report of Findings and Conclusions Re Potential for Abuse of Librium and Valium used Conjunctively with Other Drugs, dated November 6, 1970, Preliminary Statement, "A. Scope of Supplemental Hearing," where the limitations on the scope of the supplemental hearing are given as follows: "The limitations on the scope of the supplemental hearing were in direct response to a joint recommendation made to the Director by counsel for the Government and counsel for Hoffmann-LaRoche, Inc. (Respondent). As indicated in the joint recommendation, the presentation by the Government of other evidence of abuse, together with Respondent's rebuttal evidence, would have inordinately protracted the hearings. Additionally, for the most part, such evidence would have been cumulative; that is, showing a continuation of circumstances existing at the time of the prior hearing in 1966. As a consequence, evidence relating to intentional overdoses and attempted suicides; evidence concerning suicides and other deaths in which the drugs played a significant role; reports of audits of retail drugstores detailing significant shortages which could not be legitimately accounted for; and police reports showing instances in which the drugs were discovered by police during their investigation of drug and other criminal offenses suggesting use and distribution outside of the legitimate channels, were neither presented nor rebutted by either side inasmuch as essentially the same type of evidence had already been adduced at the prior hearing." (Emphasis added.)

The comments upon which Hoffmann rests its point included in the Proposed Supplemental Findings of Fact were not objected to in the exhaustive list of exceptions which Hoffmann later filed.*fn20 Aside from the foregoing, the Director's conclusions to which Hoffmann now objects are amply supported by the stipulation from the evidence of record in the original hearings. See letter of ...


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