We’re going to discuss preemption “inside baseball” again. If that’s not your thing, then click on the “back” button. If that’s what you’re really hot to hear about, then keep on reading. And after you’re done here, please, make arrangements to take a long vacation with your family to someplace where you can’t access this blog – because you’re working too hard and you need to get away.
Ever since the FDA began filing pro-preemption amicus briefs in mid-2000 (for more about that, see here), we’ve been trying to get the courts to listen to what the FDA has to say on the subject. After the FDA published its preemption opus in the Federal Register early last year, see 71 Fed. Reg. 3922 (but anyone reading this far has already memorized that cite), the value of FDA deference arguments grew exponentially.
In a nutshell, the basic FDA deference argument is that the FDA is the expert federal agency with the power to determine the preemptive effect of its decisions. No less an authority than the Supreme Court has said so, on more than one occasion. Medtronic, Inc. v. Lohr, 518 U.S. 470, 496-97, 505-07 (1996); Hillsborough County v. Automated Medical Laboratories, Inc., 471 U.S. 707, 721 (1985). We won’t bore you with all the gradations and nuances of agency deference, since we have enough trouble ourselves choreographing all those angels dancing on the head of that pin. Suffice it to say that agency deference can range from “due respect” all the way up to very close to controlling.
In Hillsborough County the Court dealt with the FDA’s view about one of its regulation’s preemptive scope – something the Court found the Agency “possesse[d] the authority to” do. Id. at 721. The Court held the FDA’s determinations “dispositive. . .unless either the agency’s position is inconsistent with clearly expressed congressional intent. . .or subsequent developments reveal a change in that position.” Id. at 714-15. Since the FDA’s current preemption findings are mostly in a preamble to a Final Rule, Hillsborough’s specific recognition of “preambles” as an acceptable means for agency assertion of preemptive intent is particularly important. Id. at 718.
In Medtronic v. Lohr, 518 U.S. at 496-97, 505-07, the Court split on FDA deference just like it split on everything else. The majority followed Hillsborough and deferred to FDA’s interpretation of the FDCA’s Medical Device Amendments’ preemptive scope:

Congress has given the FDA a unique role in determining the scope of [the Act’s] pre-emptive effect. . . . Because the FDA is the federal agency to which Congress has delegated its authority to implement the provisions of the Act, the agency is uniquely qualified to determine whether a particular form of state law. . .should be pre-empted.

518 U.S. at 495-96 (Stevens, J. plurality). Accord id. at 505 (“absen[t]. . .a clear congressional command as to pre-emption. . ., the relevant administrative agency possesses a degree of leeway to determine. . .pre-emptive effect”) (Breyer, J. concurring). Four plus one equals five. Hillsborough and Lohr invoked deference under Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). Chevron held that administrative deference inheres in even implicit congressional delegation of power to an agency:

Sometimes the legislative delegation to an agency on a particular question is implicit rather than explicit. In such a case, a court may not substitute its own construction of a statutory provision for a reasonable interpretation made by the administrator of an agency.

Id. (footnote omitted).In one respect, the Hillsborough and Lohr results must be treated with caution. In a subsequent case, United States v. Mead Corp., 533 U.S. 218, 232 (2001), the Court held that an “interpretive rule” (which is what the Final Rule preamble technically is) is not entitled to what courts call “full Chevron deference.” But that’s getting back to the angels on the pins. For present purposes, it’s enough to remember that Hillsborough and Lohr establish: (1) FDA is the expert federal agency charged by Congress to ensure that prescription medical products are safe and effective, and (2) FDA labeling authority is sufficiently extensive to warrant substantial deference – whether it goes by the name “Chevron” or something else. Thus courts should “give effect to an agency’s regulation containing a reasonable interpretation of an ambiguous statute.” Christensen v. Harris County, 529 U.S. 576, 586-87 (2000). Deference is owed to “longstanding administrative policy that comports with the plain language, history, and prophylactic purpose of the Act,” and is “particularly appropriate” where the issue is of “considerable public controversy,” and Congress has declined to act. United States v. Rutherford, 442 U.S. 544, 553-54 (1979) (another FDA case).We’re not going to repeat what we’ve already posted about the extent to which the consistency of an agency position does – and does not – impact the amount of deference owed to the administrative interpretation by the courts. If you want to read about that, go here. The basic point is that any fair-minded reading of controlling precedent affords deference to “even” changed administrative interpretations as long as they are rationally explained. Well, the FDA’s preemption briefs, and beyond them the 2006 Final Rule, are supported by more rational explanation than any non-result-oriented court would need to affirm them. Don’t just take our word for it. Read the opinions that refuse to give the Final Rule deference due to supposed inconsistency: Levine v. Wyeth, 2006 WL 3041078 ¶¶31-33 (Vt. Oct. 27, 2006); Weiss v. Fujisawa Pharmaceutical Co., 464 F. Supp.2d 666, 674 (E.D. Ky. 2006); McNellis v. Pfizer, Inc., 2006 WL 2819046, at *7-8 (D.N.J. Sept. 29, 2006); Coutu v. Tracy, 2006 WL 1314261, at *4 (R.I. Super. May 11, 2006). None of these cases goes much beyond using “inconsistency” as a scarlet letter and leaving it at that. They don’t come to grips with the FDA’s reasoning. They can’t, because simply to acknowledge that reasoning would demand deference under controlling precedent. All of the above is prologue for the real reason for this post. There’s a very new, very analogous FDA deference case out of the Seventh Circuit, United States v. Genendo Pharmaceutical, N.V., 2007 WL 1364389 (7th Cir. May 10, 2007). The parallels are quite striking when we think about them. The anti-Final Rule cases all rely upon a federal regulation, 21 C.F.R. §314.70(c)(6)(iii)(a-b), the literal terms of which they interpret as giving drug manufacturers an essentially unfettered right to effect changes that “strengthen” warnings without the need for prior FDA approval. See, e.g.:

If the NDA process and the submission of changes for FDA approval were the exclusive means of creating and altering prescription drug labels, this might be a very different case. A key FDA regulation, however, allows a drug’s manufacturer to alter the drug’s label without prior FDA approval when necessary. [quotation from §314.70(c) omitted] Section 314.70(c) creates a specific procedure allowing drug manufacturers to change labels that are insufficient to protect consumers, despite their approval by the FDA. “The FDA’s approved label. . .can therefore be said to set the minimum labeling requirement, and not necessarily the ultimate label where a manufacturer improves the label to promote greater safety.

Levine v. Wyeth, 2006 WL 3041078 ¶¶12-13 (quoting McNellis, 2006 WL 2819046, at *5) (emphasis added). Since Levine and McNellis are probably the best reasoned of this rather spotty lot, you can get the drift. Their syllogism is, forget everything the Supreme Court’s ever said about the FDA’s authority over prescription drugs and their labeling – because of the wording of this one regulation, drug companies can rework their labels at will and the Agency can’t do anything about it, so long as the changes can be characterized as “strengthening” warnings (all plaintiffs ever argue for, of course) under 21 C.F.R. §314.70(c)(6)(iii)(a-b).Slow down, Fast Eddie. This is just where Genendo comes in. The arguments in this new case are almost the same as with the Final Rule – only the regulation and context have been changed in an attempt to protect the guilty. In Genendo, a criminal case, the guilty party was an illegal importer of foreign-made drugs (Lipitor in this particular incident). The importer came up with a scheme involving another section of the FDCA that – if taken literally, like the anti-preemption cases do with 21 C.F.R. §314.70(c)(6)(iii)(a-b) – seemed to give the importer a way to evade the entire edifice of FDA regulation. The defendant in Genendo bought three-year-old (the limit in the US being two years) Lipitor, labeled in Portuguese in Sao Paulo Brazil. 2007 WL 1364389, at *2. It shipped the Brazilian Lipitor to a (pleaded out) co-defendant that was an “FDA-registered repacker and labeler.” Id. That status was key to the scheme. The FDCA contains a section that directs the FDA to “exempt[] from any labeling or packaging requirement of this chapter drugs and devices which are. . .to be processed, labeled, or repacked” for resale. 21 U.S.C. §353(a) (emphasis added). The FDA’s corresponding regulation was narrower, however, providing that, once a party had a written agreement with a registered repacker that contained a number of required provisions, the drugs sent to that repacker,

shall be exempt, during the time of introduction into and movement in interstate commerce and the time of holding in such establishment, from compliance with the labeling and packaging requirements of [FDCA sections relating to specific new drug approval provisions].

21 C.F.R. §201.150(a). Although nothing in either the statute or the regulation limited the origin of the drugs that were subject to its terms, likewise nothing in their history indicated that these provisions were intended to apply to importation from foreign countries. The defendant in Genendo, like the plaintiffs in the Final Rule preemption cases, argued that the specific terms of the statute prevented the FDA from advancing a narrower interpretation more in accordance with the Agency’s view of their context in the regulatory scheme as a whole. The lower court rejected the defendant’s narrowly focused reading and deferred to the FDA’s reading because:

[R]eading the exemption in §353(a) as [defendant] proposed would eviscerate the protections afforded by the new drug approval process. [The district court] thus attempted to harmonize the requirements of the new drug approval process and the §353(a) exemption by reading the “labeling and packaging requirements” referred to in §353(a) to apply to general “labeling and packaging,” but not the detailed requirements for packaging.

2007 WL 1364389, at *2 (discussing lower court ruling) (emphasis added).The Seventh Circuit affirmed. It described the arguments of the two sides thusly:

The FDA argues that the labeling and packaging requirements contained in the NDA are a critical piece of the new drug approval process and must be adhered to at all stages of the drug’s production and distribution, and that §353(a) does not change that. [Defendant], however, contends that because the Lipitor was en route to an authorized repackager at the time it was seized, it is exempt from all labeling and packaging requirements.

2007 WL 1364389, at *3. “Any” did not necessarily mean “all.” Id. at *4. Even though the FDA’s interpretation of both the FDCA and its enabling regulation were narrower than their express terms could be read, a narrow interpretation was appropriate – and within the scope of valid deference to the FDA.

As a threshold matter, we must determine the level of deference to be accorded the FDA’s interpretation. . . . [Defendant], however, claims that the unambiguous language of §353(a) – directing the Secretary to promulgate regulations exempting certain drugs from “any labeling or packaging requirement of this chapter” – compels the conclusion that the Lipitor is exempt from all labeling and packaging requirements. . . .

2007 WL 1364389, at *3 The court agreed with the FDA that to read the statute and regulation in this way, although possible, would undermine the FDA’s authority over the approval and labeling of new drugs generally.

Reading the statute in isolation, [defendant’s] interpretation may be a plausible one, but so too is the FDA’s, particularly in light of the “well-accepted principle that remedial legislation such as the [FDCA]. . . . In short, there is enough ambiguity in the statute that we ask only whether the FDA’s interpretation is based on a permissible construction of the statute. [The FDA’s limiting regulation] exempting drugs in transit from only certain labeling and packaging requirements is a permissible exercise of the authority delegated by the statute, and is consistent with the public health concerns animating the new drug approval process and the FDCA as a whole. Thus, unless the regulation (and the FDA’s interpretation of it) is “arbitrary, capricious, or manifestly contrary to the statute,” we will defer to it.

2007 WL 1364389, at *4 (citations omitted) (emphasis added).While the contrary, purely textual reading was plausible, “the FDA’s interpretation ma[de] good sense” because reading the literal language the way the defendant did would result in resellers being “given carte blanche to disregard the specifications in the NDA.” Id. at *5. Moreover, the FDA’s interpretation of “also comport[ed] with the underlying purposes of the FDCA, which exists to protect aspects of the lives and health of people which, in the circumstances of modern industrialism, are largely beyond self-protection.” Id. at *6. It was the FDA’s job to enforce the FDCA, thus the Agency’s “construction is entitled to deference.” Id. In the 2006 Final Rule, the FDA interpreted 21 C.F.R. §314.70(c) in the same way that the Seventh Circuit found proper in Genendo. That regulation does not – indeed, could not consistently with the Agency’s overall authority over prescription drug labeling – give Genendo-style “carte blanche” permission to ignore in-force FDA labeling decisions, and the Agency has not so interpreted it. So-called “changes being effected” supplements are not effective “if the added information makes the labeling false or misleading.” 71 Fed. Reg. at 3934. For good reasons, the Act gave the FDA control over labeling. “Under the act, FDA is the expert Federal public health agency charged by Congress with ensuring that drugs are safe and effective, and that their labeling adequately informs users of the risks and benefits of the product and is truthful and not misleading.” Id. The FDA thus interpreted the CBE exception to harmonize it with the Agency’s overall statutory responsibilities, and listed six specific situations where §314.70 could not prevent preemption due to conflicts that would arise with in-force FDA labeling decisions. 71 Fed. Reg. at 3936.The plaintiffs we deal with seek to read §314.70(c) to immunize any form of label “strengthening” – even label changes that would override FDA decisions about the precise risk in question – from preemption. They try to use a limited exception as a battering ram to knock down FDA labeling authority generally. Genendo demonstrates that even the express terms of the FDCA itself (let alone a few lines buried deep within a subsection of the CBE regulation) cannot be so employed. The FDA always has the ability, and more than that the obligation, to ensure that the regulatory scheme it administers operates as a whole. One aspect of its administrative expertise is to ensure that no bit part of that scheme is used out of context to tear holes in the larger regulatory fabric. All this being said, we end with a cautionary note. Defense counsel should be wary of aligning their positions too closely with deference to the FDA. Ultimately the force of implied preemption rests upon the conflict that a particular product liability claim has with a particular FDA decision, whether the Agency has recognized it as such or not. Agency deference is more in the nature of gilding the lily – by telling courts that, “see, the FDA has recognized the same problem that we have.” But whether or not the FDA has recognized the conflict, it’s the conflict itself, and not Agency recognition of it, that creates preemption. The plaintiffs like to jump up and down and holler “inconsistency.” They would like nothing better than for the FDA to surrender its current position and agree with them. Why? Well obviously, they could then turn the deference sword upon us. But it goes deeper than that. In case after case, the plaintiffs use common-law claims to displace FDA decisions. They know that to achieve that end, they need to destroy the Agency’s credibility as a regulator. Now, they describe the Agency as having made a U-turn. But to be able to describe FDA as going in circles would be far worse, because courts tolerate an occasional regulatory U-turn. To give themselves a clear field to run roughshod over any FDA decision that stands in their way, plaintiffs must wreck FDA credibility. If they succeed, we won’t be able to rely on deference towards the FDA on anything to defend our clients. Defense counsel need to keep these broader concerns in mind as the preemption battle continues to unfold.