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A.L. PHARMA v. DONNA E. SHALALA </h1> <p class="docCourt"> </p> <p> August 25, 1995 </p> <p class="case-parties"> <b>A.L. PHARMA, INC., APPELLANT<br><br>v.<br><br>DONNA E. SHALALA, ET AL., APPELLEES</b><br><br> </p> <div class="caseCopy"> <div class="facLeaderBoard"> <script type="text/javascript"><!-- google_ad_client = "ca-pub-1233285632737842"; /* FACLeaderBoard */ google_ad_slot = "8524463142"; google_ad_width = 728; google_ad_height = 90; //--> </script> <script type="text/javascript" src=""> </script> </div class="facLeaderBoard"> <div class="numbered-paragraph"><p><br> Appeal from the United States District Court for the District of Columbia (83cv01603)</p></div> <div class="numbered-paragraph"><p> Before Edwards, Chief Judge, and Buckley and Ginsburg, Circuit Judges.</p></div> <div class="numbered-paragraph"><p> Buckley, Circuit Judge</p></div> <div class="numbered-paragraph"><p> FOR PUBLICATION</p></div> <div class="numbered-paragraph"><p> FOR THE DISTRICT OF COLUMBIA CIRCUIT</p></div> <div class="numbered-paragraph"><p> Argued March 17, 1995</p></div> <div class="numbered-paragraph"><p> Opinion for the court filed by Circuit Judge Buckley.</p></div> <div class="numbered-paragraph"><p> To gain Food and Drug Administration approval for the sale of a new animal drug, an applicant must demonstrate that it is both safe and effective for its intended uses. Finding that this standard had been met, the FDA approved for sale a drug produced by Philips Roxane, Inc., which is marketed to improve growth and feed efficiency in broiler chickens. Appellant A.L. Pharma, Inc. ("A.L."), a competitor of Philips Roxane, petitioned the FDA to reverse its approval and, receiving no satisfaction from the agency, sought relief in the district court. The district court granted summary judgment for the agency, and A.L. appeals. We affirm in part and reverse and remand in part with instructions to the district court to return the matter to the FDA for a more reasoned justification of its actions.</p></div> <div class="numbered-paragraph"><p> I. Background</p></div> <div class="facAdFloatLeft"> <script type="text/javascript"><!-- google_ad_client = "ca-pub-1233285632737842"; /* FACContentLeftSkyscraperWide */ google_ad_slot = "1266897617"; google_ad_width = 160; google_ad_height = 600; //--> </script> <script type="text/javascript" src=""></script> </div class="facLeaderBoard"> <div class="numbered-paragraph"><p> A. New Animal Drug Application No. 128-550</p></div> <div class="numbered-paragraph"><p> The tortured story of this litigation begins in 1981, when Philips Roxane first sought FDA permission to sell two chicken feed mixes containing bacitracin zinc, a drug used to increase the rate of growth and feed efficiency in poultry. The Food, Drug and Cosmetic Act ("FDCA") provides that any new animal drug is considered unsafe prior to receiving FDA approval for its intended use. 21 U.S.C. Section(s) 360b(a)(1)(A) (1988). To secure such approval, the FDCA requires the applicant to file a New Animal Drug Application ("NADA") that includes information demonstrating both the safety and the efficacy of the drug. Id. 360b(d)(1)(A), (B) & (E) (1988). Philips Roxane's bacitracin zinc feed mixes are regulated by these provisions, and the company accordingly filed New Animal Drug Application No. 128-550 ("NADA 128-550") in order to obtain FDA approval to market the products.</p></div> <div class="numbered-paragraph"><p> In the early 1970's, the Animal Health Institute ("AHI"), an industry trade association, coordinated a safety study on bacitracin zinc, the results of which were to be shared by the pharmaceutical companies that contributed to the research costs. See A.L. Labs., Inc. v. Philips Roxane, Inc., <a>803 F.2d 378</a>, 380 (8th Cir. 1986). In 1973, copies of the study were sent to the FDA and placed in what the agency calls its "master files" for subsequent use by the study's sponsors. When Philips Roxane submitted its application, it referred to one of these master files, MF 3578, as evidence that its product met the FDA's safety requirement. See A.L. Labs., 803 F.2d at 380. There is no dispute that the AHI study provided an adequate basis for the FDA to determine that Philips Roxane's product was "safe for use under the conditions prescribed, recommended, or suggested in the proposed labeling," as required by the FDCA. 21 U.S.C. Section(s) 360b(d)(1)(A).</p></div> <div class="numbered-paragraph"><p> That study, however, did not establish that Philips Roxane's product met the agency's efficacy requirement. The FDCA conditions the FDA's approval of a NADA on substantial evidence that the drug will have the effect it purports or is represented to have under the conditions of use prescribed, recommended, or suggested in the proposed labeling thereof....</p></div> <div class="numbered-paragraph"><p> 21 U.S.C. Section(s) 360b(d)(1)(E). It defines "substantial evidence" to mean evidence consisting of adequate and well-controlled investigations, including field investigation, by experts qualified by scientific training and experience to evaluate the effectiveness of the drug involved, on the basis of which it could fairly and reasonably be concluded by such experts that the drug will have the effect it purports or is represented to have under the conditions of use prescribed, recommended, or suggested in the labeling or proposed labeling thereof.</p></div> <div class="numbered-paragraph"><p> 21 U.S.C. Section(s) 360b(d)(3) (1988). To paraphrase, then, a NADA generally must include evidence that the applicant's drug is not only safe, but that it will do what the applicant claims it will do. The FDA's regulations mirror the statute, requiring manufacturers to provide "substantial evidence" of the "effectiveness of the drug involved...." 21 C.F.R. Section(s) 514.111(a)(5)(i) (1994).</p></div> <div class="numbered-paragraph"><p> In 1970, the National Academy of Sciences/National Research Council conducted a study of the efficacy of bacitracin zinc drugs. 35 Fed. Reg. 11,531 (1970). Based on the Academy's findings concerning the effectiveness of bacitracin zinc products used to increase the rate of growth and feed efficiency in poultry, the FDA concluded that the drug "c[ould] be moved into the effective category"; it also provided, by regulation, that it would approve applications for bacitracin zinc drugs "identical" to the one tested by the Academy if, in lieu of direct proof of effectiveness, the applicant submits "bioequivalency or similar data ... as suggested in the guideline for submitting NADA's for generic drugs reviewed by the [Academy]." 46 Fed. Reg. 37,043, 37,044 (1981) (codified at 21 C.F.R. Section(s) 558.78 (1994)). This regulation provided Philips Roxane with an important shortcut to FDA approval. Instead of conducting studies to prove that its particular product actually would promote growth and feed efficiency in chickens, Philips Roxane had the option of demonstrating that its product was "bioequivalent" to the "benchmark" product that the Academy had found to be effective for those purposes.</p></div> <div class="numbered-paragraph"> <p> This regulatory shortcut, of course, begs the question of what precisely a manufacturer must prove for the FDA to deem its product "bioequivalent" and therefore effective. Unfortunately, neither the regulation nor the guideline referred to in the Federal Register sheds any light on the matter. The guideline merely instructs the applicant to submit "bioequivalency data which compares and ...</p> </div> </div> </div> <div id="caseToolTip" class="caseToolTip" style="display: none;"> <div class="toolTipHead"> </div> <div class="toolTipContent"> <p> Our website includes the first part of the main text of the court's opinion. 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