The opinion of the court was delivered by: ALFRED M. WOLIN
C. FDA Investigatory Practice
2. Failure Investigations
8. Releasing a Batch for Distribution
1. Manufacturing Process Validation
(b) Specific Process Problems
(2) Retrospective Validation
(a) Omitting Failing Results
(b) Omitting Failing Batches
(c) Insufficient Number of Batches
2. Failure Investigations
3. Release of "Failing" Batches
(a) and (b) Rejecting Failing Results As Laboratory Errors After Retesting
(c) Rejecting Failing Results After Resampling
4. Failure to Control Manufacturing Process Steps
(c) Particle Size/Distribution
5. Failure to Validate Testing Methods
6. Cleaning Validation Deficiencies
7. Record-Keeping Deficiencies
8. Failure to File ANDA Supplements and Field Alerts
B. Standard for Injunctive Relief
C. The Federal Food, Drug and Cosmetic Act
D. Evaluating Barr Laboratories
(1) General CGMP Violations
Currently before the Court is plaintiff's application for a preliminary injunction directing defendants to suspend, recall or revamp numerous products in their current product line. Plaintiff filed this action in the United States District Court in the Southern District of New York on June 12, 1992, alleging that defendants violated the Federal Food, Drug, and Cosmetic Act. In accordance with the first-filed rule, the case was transferred to the District of New Jersey on June 26, 1992, where it was consolidated with an action defendants brought against plaintiff on April 24, 1992, seeking relief from allegedly ad hoc drug regulations. On July 10, 1992, the Court filed case management and protective orders. Beginning on August 17, 1992, and continuing intermittently to October 12, 1992, through the testimony of inspectors, experts and employees, the parties presented exhaustive but conflicting views of defendants' business practices. At the Court's direction, on October 26, 1992, the parties submitted proposed findings of fact and conclusions of law.
Each day with confidence and hope millions of people in the United States and other countries reach for pills, powders, capsules and syrups to relieve or prevent an infinite number of physical and mental ailments. The weighty task of ensuring the integrity of these products, frequently unquestioned by most consumers, falls to the Food and Drug Administration, which monitors the practices of the drug industry through a system of approvals and investigations. Built into this maze of often ambiguous rules, however, is the recognition that drug manufacturers are businesses, which must follow efficient as well as effective procedures.
The current conflict surrounding these rules is best characterized as a confrontation between a humorless warden and his uncooperative prisoner. Exchanging heavy blows, the parties generated a record of more than twenty-three hundred pages of testimony, almost four hundred exhibits and numerous lengthy declarations. The plaintiff presented two witnesses, a government inspector, David Mulligan, and a regulatory expert, Dr. Robert Gerraughty. Defendants countered with a statistician, Dr. Sanford Bolton, their own regulatory expert, Dr. Christopher Rhodes, an analytical chemist, Dr. Norman Atwater, an expert in pharmaceutical biology, Dr. Murray Cooper, and Barr employees. These witnesses revealed an industry mired in uncertainty and conflict, guided by vague regulations which produce tugs-of-war of varying intensity.
The divergent views presented to the Court reflect not only a difference of perspective, but also the changes made at Barr Laboratories since the first threat of this litigation. As a result, the record is a composite of two trials: the case that was and the case that is. (1789:6 (discussion between Court and Ms. Kaswan));
Barr Response P 63. As such, the bases upon which some of the government's criticisms rest have disappeared during the course of this litigation. Wary of this timing element, the Court has reviewed the lengthy record and the parties' proposed findings with the dual desire to protect an unsuspecting public and to avoid unnecessarily burdensome rules and now makes the following findings of fact and conclusions of law.
1. Plaintiff, United States of America, brought this action on behalf of the Food and Drug Administration ("FDA"), an agency within the United States Department of Health and Human Services.
2. Defendant Barr Laboratories, Inc. ("Barr") is a manufacturer and distributor of drug products in the interstate and foreign commerce of the United States. Barr is incorporated under the laws of the State of New York and is doing business in Northvale, New Jersey and Pomona, New York.
3. Barr currently manufactures sixty drug products. Before this action was commenced, Barr voluntarily suspended the production and distribution of 115 drug products pending further order of the Court.
4. From 1970 until January 5, 1993, defendant Edwin A. Cohen was Barr's President and Chief Executive Officer and was in charge of the day-to-day operations of Barr. His current title is Chairman of the Board and Chief Executive Officer.
6. Defendant Ezzel-Din A. Hamza is Barr's Vice President of Technical Affairs and is responsible for regulatory affairs, research and development, and Barr's chemistry and microbiology laboratories. He has held this position since 1989.
7. Under the Federal Food, Drug and Cosmetic Act (the "Act"), a drug is adulterated if "the methods used in, or the facilities or controls used for, its manufacture, processing, packing or holding do not conform to or are not operated or administered in conformity with current good manufacturing practice to assure that such drug meets the requirements of this chapter as to safety and has the identity and strength, and meets the quality and purity characteristics, which it purports or is represented to possess." 21 U.S.C. § 351(a)(2)(B).
8. Current Good Manufacturing Practice ("CGMP"), explained in greater, but by no means sufficient, detail in regulations promulgated by the FDA, see 21 C.F.R. Parts 210 and 211, sets the minimum standards for drug manufacturers. Designed as a quality control measure to prevent super- and sub-potency, product mix-ups, contamination, and mislabeling, (870:20; 872:3 (Gerraughty)), the CGMP regulations outline general rules for all aspects of drug manufacture including buildings and facilities, personnel, equipment, drug components and containers, production, packaging and labeling, and record-keeping. Failure to comply with CGMP regulations renders any resulting drug product "adulterated" and the drug product and its producer subject to regulatory action. 21 C.F.R. § 210.1(b).
9. Congress recognizes the United States Pharmacopeia ("USP"), a nonprofit corporation which develops drug product standards with the help of professionals from academia, the medical community, the pharmaceutical industry and the FDA, as an official compendium. (1503:11 (Rhodes)). The USP supplements the CGMP provisions, specifying both the types of tests firms must perform and the range of acceptable results these tests must generate for releasing drug products. As with the CGMP regulations, the USP contains minimum testing requirements, (910:9 (Gerraughty)). These criteria, however, rest on the assumption that the products to which they apply satisfy CGMP. (911:11 (Gerraughty)).
10. Firms outline their chosen standards and procedures in new drug applications (NDAs) or abbreviated new drug applications (ANDAs), which are submitted to the FDA for approval. The ANDA guides a product's manufacture and release, but does not supersede the overarching CGMP requirements. (448:24 (Mulligan)).
11. Thus, the CGMP regulations provide the yardstick with which FDA investigators, and the Court in the instant action, measure firm behavior. Ironically, the regulations themselves, whose broad and sometimes vague instructions allow conflicting, but plausible, views of the precise requirements, transform what might be a routine evaluation into an arduous task.
12. To the extent that the regulations create ambiguities, the industry can turn for guidance to literature from seminars and pharmaceutical firms, textbooks, reference books and FDA letters to manufacturers, (865:11 (Gerraughty)), or employ scientific judgment where appropriate. The Court, however, cannot rely on industry practice alone to determine whether an individual firm meets the statutory requirements, since industry standards themselves must be reasonable and consistent with the spirit and intent of the CGMP regulations. (1258:24 (Gerraughty)).
C. FDA Investigatory Practice
14. FDA investigators conducted a general inspection of Barr's Northvale facility during August and September 1989 as well as separate general inspections of Barr's Northvale and Pomona facilities from May to September 1991. After each inspection, the investigators issued Forms 483.
IS. The 1989 Form 483, which contained six general observations, cited Barr for unvalidated manufacturing and cleaning processes, the lack of failure investigations, incomplete annual reviews and failure to explain retesting. See Exhibit 51. In the 1991 Pomona inspection, the FDA criticized nineteen products extensively and made general comments about Barr's equipment and complaint logs, stability programs, raw material controls and documentation procedures. See Exhibit 3. The Northvale inspection that same year also censured individual products as well as failure investigations, validation and product mix-ups. See Exhibit 1.
16. In February 1992, FDA investigators returned to the Barr facilities in Northvale and Pomona. The resultant 1992 Forms 483 listed seventy-five and forty-seven criticisms for Northvale and Pomona, respectively, many of which also had been recorded during prior visits to Barr, in the areas of process validation, failure investigations and laboratory practices. See Exhibits 2, 4.
17. Testing lies at the heart of a drug manufacturer's successful operation. Through testing companies validate their processes and ensure the quality of batches for release. As the Forms 483 suggest, much of this current litigation stems from allegedly defective testing practices. With the mechanics of test-taking left undefined by the regulations, before discussing the specific allegations against Barr, the Court will outline the CGMP-required parameters which will guide its evaluation.
18. In the government's view, a batch failure occurs each time an individual test result does not meet the specifications outlined in the USP or the firm's ANDA. (132:22 to 133:3 (Mulligan)). In contrast, Barr does not classify initial out-of-specification results as batch failures. Instead, only after confirming out-of-specification results with additional testing, (1394:1 (Bolton); 1978:18 (Cooper)), pursuant to the firm's predetermined testing procedure, (1979:7 (Cooper)), would Barr conclude that a batch failed.
19. Out-of-specification results obtained in the laboratory fall into three general categories: (1) laboratory error; (2) nonprocess-related or operator error; and (3) process-related or manufacturing error. (227:23 (Mulligan)).
20. Laboratory error can result from an analyst's mistake or malfunctioning laboratory equipment. (923:18 (Gerraughty)). Examples of analyst error include mistakes in calculations, the use of incorrect standards for comparison, and simple mismeasurement. (923:17 (Gerraughty)). Those human and mechanical errors which occur during one manufacturing process cause nonprocess-related errors. For example, manufacturing equipment may malfunction or an operator may fail to add the proper amount of an active ingredient. In contrast, process-related problems, such as an incorrect mixing time, occur even though the workers and machines function properly.
2. Failure Investigations
22. Only with an investigation will a firm be able to identify the cause of an out-of-specification result. CGMP requires a thorough investigation following:
any unexplained discrepancy (including a percentage of theoretical yield exceeding the maximum or minimum percentages established in master production and control records) or the failure of a batch or any of its components to meet any of its specifications . . . . [which] shall extend to other batches of the same drug product and other drug products that may have been associated with the specific failure or discrepancy. A written record of the investigation shall be made and shall include the conclusions and followup.
21 C.F.R. § 211.192; see (924:19 (Gerraughty) (violation of CGMP to discard out-of-specification results and pass batch on retesting alone)).
23. The government argues that an adequate failure investigation requires a timely, thorough, and well-documented review of the problem, which yields a written record containing: (1) the reason for the investigation; (2) a summation of process sequences that may have caused the problem; (3) the corrective actions necessary to save the batch and prevent recurrence; (4) a list of other batches and other products possibly affected along with their investigation results; and finally, (5) comments and signatures of production and quality control personnel regarding approval of any material reprocessed after additional testing. Government Findings P 59. Barr advocates a sliding-scale approach, claiming that the nature of the failure should govern the intensity of the investigation.
24. In accordance with the CGMP-required for-cause failure investigation, (1027:13 (Mulligan)), the goal of every such inspection is to determine into which of the three failure categories the problem falls. The degree of inquiry required successfully to complete this task may vary with the object under investigation. As a result, a full investigation of the type the Government outlined always will not be necessary.
25. The issue of failure investigations first arises when testing produces a single out-of-specification result. Before proceeding to retest, (924:11 (Gerraughty)), this unhappy occurrence must be met with a step-by-step review of the suspect laboratory tests. (Id.; 1975:12 (Cooper); 1517:1 (Rhodes)). Specifically, the analyst who performed the test must report the problem to a supervisor, and the two technicians must conduct an informal laboratory inspection, reviewing the notebook which contained the out-of-specification result, discussing the testing procedure along with any required calculations and examining the instrument used. (295:20 (Mulligan); 1831:8 (Atwater)). Thus, the Court requires that a single out-of-specification result be met with more than "a laboratory investigation consisting principally of retesting." Barr Response to Government Findings, P 58-59.
26. Such an investigation, along with any conclusions reached, must be preserved with written documentation that enumerates each step of the review, (1519:10 (Rhodes)), in the form of a "computer generated flow sheet" (1517:19 (Rhodes)), or a check-list. (1974:25 (Cooper)). This writing should be preserved in an investigation or failure report, (1517:1 (Rhodes)), and placed in a central file. (1519:19 (Rhodes)). In order to enhance this review process, each analyst conducting a test should follow a written procedure, checking off each step as it is completed. (1974:25 (Cooper)).
28. In recognizing the existence of less readily identifiable mistakes and the influence of variables unrelated to the purity or potency of the drug under scrutiny, the Court does not intend to create a means for firms to avoid the performance and documentation of an informal laboratory investigation. The inability to identify an error's cause with confidence affects retesting procedures, see PP 38-39 infra, but does not affect the failure inquiry required for initial out-of-specification results.
29. Other problems more serious than single out-of-specification results, from multiple out-of-specification results to product mixups and contamination, require full-scale inquiries involving quality control and assurance personnel in addition to laboratory workers in order to identify the exact process or nonprocess-related errors.
30. Extending beyond the laboratory and often labeled formal investigations, (1563:25 (Rhodes)), these inquiries should follow the outline the Government provided, with firms paying particular attention to any necessary corrective action, whether reprimanding, retraining or firing employees, remixing batches or adjusting processes. Thus, in the failure report firms must: (1) state the reason for the investigation; (2) provide a summation of the process sequences that may have caused the problem; (3) outline the corrective actions necessary to save the batch and prevent a similar recurrence; (4) list other batches and products possibly affected, the results of their investigations, and any required corrective action; and finally, (5) preserve the comments and signatures of all production and quality control personnel who conducted the investigation and approved any reprocessed material after additional testing.
31. The outcome of the failure investigation will determine whether additional batches of the same product and related products also require remedial measures. (1709:10 (Rhodes)). Process-related errors suggest the need to examine other batches of the problem product as well as other products made according to similar procedures. Addressing nonprocess-related errors requires an examination of other batches or products the trouble-making employee or machine may have handled.
32. Thus, the elements of a "thorough" investigation necessarily will vary with the nature of the problem identified. However, all failure investigations must be performed promptly, within thirty business days of the problem's occurrence, and recorded in written investigation or failure reports.
33. The outlier test provides an alternative means of invalidating an initial out-of-specification result. If the failure investigation of an initial out-of-specification result proves inconclusive, firms searching for a better explanation can utilize this method.
34. Significant limits accompany the outlier test, however. The USP specifically warns against using outlier tests too often, and thus, as a general rule,
firms must be careful not to reject results frequently on this basis. (2036:9 (Baldassarre)).
35. In addition, the utility of the outlier test varies with the type of assay performed.
The USP expressly allows firms to apply this test to biological and antibiotic assays, see Ex. 7 at 1503; (202:21, 798:20 (Mulligan)), but is silent on its use with chemical tests. (1239:8 (Mulligan)). Although some experts advocated use of the outlier method for chemical assays, (1395:1 (Bolton)), other testimony suggested that firms generally do not rely on outlier tests to invalidate chemical test results. (1238:21 (Mulligan)). In the Court's view the silence of the USP with respect to chemical testing and outliers is prohibitory.
36. The substantial innate variability of microbiological assays, (1916:1 (Cooper)), supports this distinction. (1238:11 (Mulligan)). Chemical assays are considerably more precise than biological and microbiological assays, (1915:12 (Cooper)), since only the latter testing is "subject to whims of microorganisms." (1915:18 (Cooper)).
37. In addition to triggering a failure investigation, out-of-specification results also generate the need for retesting. A retest is defined as additional testing on the same sample, and thus it necessarily follows an initial test. An analyst performing a retest takes the second aliquot from either: (1) the sample that was the source of the first aliquot (1022:5 (Bolton), 1533:21 (Rhodes)); or (2) the larger sample previously collected for laboratory purposes.
(1534:8 (Rhodes)). These procedures are equivalent. (1839:17, 1840:16 (Atwater)). Thus, whether retesting is performed at the finished product or blend stage, such testing should be performed from the same bottle of tablets or capsules and the same drum ore mixer, respectively. (661:2 (Mulligan); 1423:3 (Bolton)).
38. Retesting is proper only after a failure investigation is underway, (235:1, 661:2 (Mulligan)), since the outcome of the failure investigation itself, in part, determines when retesting is appropriate.
Retesting is necessary if a failure investigation indicates that analyst error caused an initial out-of-specification result. (144:1, 1023:18 (Mulligan)). A retest is similarly acceptable when review of the analyst's work is inconclusive. (664:12 (Mulligan)). In these instances, retesting substitutes for or supplements the original tests which have been rejected or questioned, respectively. In the case of nonprocess and process-related errors, however, retesting is suspect.
(1024:10 (Gerraughty)). Because the initial tests are genuine, in these circumstances, additional testing alone cannot infuse the product with quality. (1024:15 (Gerraughty)).
39. As a general matter, the amount of retesting required also varies with the problem identified. Out-of-specification results attributed to analyst error require limited retesting. (1529:19 (Rhodes)). Here, retesting merely supplants the first round of initial tests. More extensive retesting should follow an inconclusive failure investigation, since firms need to determine whether the out-of-specification result is a mere anomaly or a reason to reject the batch. (1390:1 (Bolton)).
40. The USP contemplates retesting for quality control purposes (1937:14 (Cooper)), although it does not prescribe or recommend the number of individual tests that must be performed in order to reach a definitive conclusion about the quality of a product. (1929:1 (Cooper)). Thus, the number of retests performed before a firm concludes that an unexplained out-of-specification result is invalid or that a product is unacceptable is a matter of scientific judgment. (488:7, 816:9 (Mulligan); 1959:3 (Cooper)). Yet the goal of retesting is clear; firms must do enough testing to isolate the out-of-specification result, in order to reach the point at which the additional testing overcomes the out-of-specification result. (805:4 (Mulligan)).
41. Nevertheless, retesting cannot continue ad infinitum. Because such a practice is not scientifically valid, a firm's predetermined testing procedure should contain a point at which testing ends and the product is evaluated. At this time, if the results are not satisfactory, the batch must be rejected. (1958:7 (Cooper)).
42. When evaluating retest results, it is important to consider them in the context of the overall record of the product. Relevant to this review are the history of the product,
the type of tests performed,
and any results
obtained for the batch at other stages of testing.
As such, retesting determinations will vary on a case-by-case basis, a necessary corollary of which is that an inflexible retesting rule, designed to be applied in every circumstance, is inappropriate. (1476:9 (Bolton)).
43. Resampling, in contrast, is a more controversial practice. Typically resampling occurs after the initial test and the retests have produced out-of-specification results, thereby indicating a more serious problem. When performing a resample, an analyst leaves the laboratory and takes a new sample from the universe of the batch. (1534:13 (Rhodes)).
44. Resampling is appropriate where provided by the USP (1044:21 (Gerraughty)), as in cases of content uniformity and dissolution testing. (1045:3 (Gerraughty)). Similarly, in the limited circumstances in which a failure investigation suggests that the original sample is unrepresentative, resampling is acceptable. (1024:19 (Gerraughty)). Evidence, not mere suspicion, must support a resample designed to rule out preparation error in the first sample.
(1955:8, 1956:1 (Cooper)).
46. The need for remixing arises during the blend stage when testing reveals problems with content uniformity. The regulations themselves allow reworking, which essentially is remixing. (906:11 (Gerraughty)). As evidenced by the Generic Drug Office directive and the consent agreement between the FDA ...