First of all, get your minds out of the gutter. Second, remember two weeks ago when we noted how rarely we discuss lawsuits against FDA? We are doing it again. Third, although we have talked about the strange regulatory shadowland in which homeopathic drugs have resided, they have not seen much action in litigation. When they have, the level of historic FDA oversight has generally not resulted in preemption of state law claims.
Things with homeopathic drugs, an arguably oxymoronic term, are changing. We discussed a while back how the Federal Trade Commission was increasing its oversight and enforcement of ads relating to these products. That was under the Obama administration and efforts to up FDA’s oversight of these products that began at the same time are now playing out in litigation. The case is MediNatura, Inc. v. FDA, — F.3d –, 2021 WL 2172540 (D.C. Cir. May 28, 2021), the facts are a bit wacky (to our DDL eyes), and the proposed shift in the regulatory scheme for these products is at stake.
With the aid of the internet, we start with some facts about the defendant and its products. Headquartered in Philadelphia, with operations in Albuquerque, it is the U.S. subsidiary of a large German company with an oblique name. Not Madrigal of Breaking Bad and Better Call Saul fame. Another one. It has many products, some imported from abroad and some manufactured in the U.S. Although none of its “drugs” has ever been approved under an NDA or ANDA (or any other regulatory route), some of them are intended to used only under prescription or get injected. The company’s website touts its “FDA Compliance,” in reference to inspections of its facilities, and that “Our leading Rx products are backed by rigorous published research” under the heading of “Clinical Research.” This seems a bit weird, even from our side of the “v.” If there is clinical research establishing safety and efficacy and the manufacturing facilities meet FDA standards for manufacturing pharmaceuticals, then why would the manufacturer not want FDA approvals for its “leading” prescription drugs? The answer may have something to do with the regulatory scheme and its history.
According to the FDCA, a homeopathic drug listed on the “official Homeopathic Pharmacopoeia of the United States” must be approved as a new drug, regardless of whether it is made in the U.S. or imported. Id. at *1. The only exception to that is for drugs that are generally recognized as safe and effective (“GRAS/E”), something mostly applicable to older drugs—recall, the FDCA was enacted in 1938 and the Kefauver Amendment that revamped the approval process was in 1962—and a detour we will not take here. FDA has a range of powers related to unapproved drugs, including specific to their importation. For decades, homeopathic drugs have existed in a sort of regulatory limbo.
The FDA has never approved an NDA for a homeopathic drug nor found a homeopathic drug to be GRAS/E and thus not a “new drug” requiring an NDA. Instead, the FDA has exercised its enforcement discretion regarding the sale of homeopathic drugs through its 1988 Compliance Policy Guide 7132.15 § 400.400 “Conditions Under Which Homeopathic Drugs May be Marketed” (CPG 400.400).
Id. at *2 (record citation excluded). We discussed 400.00 in the prior posts. It allowed the sales of these unapproved homeopathic drugs under certain conditions, but “did not exempt homeopathic drugs from approval requirements and, while CPG 400.400 was in place, the FDA took enforcement steps against certain unapproved homeopathic drugs,” including warning letters related to risks. Id.
Because of reports of “[n]egative health effects from drug products labeled as homeopathic”—a fairly ominous statement—FDA invited public comment on revamping its enforcement policies in regard to homeopathic drugs to better “protect and promote public health.” Id. That was in March 2015. In December 2017, FDA unveiled a draft guidance called “Drug Products Labeled as Homeopathic” to essentially replace CPG 400.00. In addition to setting out a new risk-based scheme, it warned that FDA would take enforcement action against unapproved homeopathic drugs. Id. In July 2018, a group called Americans for Homeopathy Choice filed a citizen petition that called for ditching the new draft guidance in favor of the old CPG 400.400. In October 2019, FDA rejected the petition and formally withdrew CPG 400.00, noting the increase in homeopathic products and concerns about their risks. It also issued an updated draft guidance and reiterated its intent to enforce.
The story picks up with the manufacturer getting a warning letter in June 2020 about six imported injectable prescript products that complied with CPG 400.00 but had not been approved. Id. at *3. (Because warning letters are not a first step, we assume there was some back and forth before then.) FDA also added the products to an Import Alert so that they could not be imported legally. A month later, the manufacturer sued FDA in federal court to enjoin the withdrawal of CPG 400.00 and preclude enforcement of the Import Alert as to its products. We are neither admin lawyer nor import-export lawyers, so we pay less attention as we proceed. The drama continued, though, because FDA moved to dismiss the case and the manufacturer plowed ahead and ordered a total of ten shipments of the subject products, nine of which got detained in a port. (That the other got through is a different concern.) The district court denied the injunction, finding the withdrawal of CPG 400.400 was within FDA’s discretion and the Import Alert was not a final agency action on which it could rule under the APA. Meanwhile, the manufacturer followed the steps to get FDA to end the detention of its imported unapproved products, but FDA refused in February 2021, declaring that the drugs did not comply with the GRAS/E exception.
The appeal to the D.C. Circuit followed. We will dispense with the affirmance on the Import Alert issue summarily. What was challenged was a non-final decision under the APA, even though there was later a consistent final decision. The manufacturer can challenge the February 2021 decision in the district court on remand, but the district court was correct to dismiss the original challenge to the Import Alert. Id. at *5. The remaining issue, withdrawing CPG 400.400 in favor of the expected finalization of a new regulatory scheme, is more interesting to us and, we suspect, impactful on the industry.
The requirements for a preliminary injunction, which are reviewed de novo, are familiar to many lawyers:
To obtain a preliminary injunction a plaintiff must establish  that he is likely to succeed on the merits,  that he is likely to suffer irreparable harm in the absence of preliminary relief,  that the balance of equities tips in his favor, and  that an injunction is in the public interest.
Id. at *6 (internal quotation and citation omitted). The plaintiff manufacturer’s main argument was that it and other manufacturers of homeopathic drugs had relied on CPG 400.400 for a long time and it would be unfair to change the rules. Given that agency rules, especially something as soft as an enforcement policy, change all the time, the “reliance interest” standard spelled out in multiple Supreme Court cases is pretty soft. Basically, agencies should assess reliance interests and have a reasoned explanation for why it would change a policy in the face of reliance interests. While the Federal Register notice from October 2019 did not address reliance interests, the denial of the citizen’s petition a day earlier did. Under these circumstances and in the particular procedural posture here, the court concluded that it could consider the rationales in the denial of the citizen petition. As we have noted often in the context of preemption of drug warnings claims, what FDA says in response to a citizen petition can provide a clear enunciation of its reasoning.
Here, viewing the petition denial together with the notice of withdrawal, FDA provided an “adequate and reasonable” explanation for withdrawing CPG 400.400 despite how long it had been in place. Id. at *7. There were four rationales, starting with how reliance never could have been strong when FDA had always declared, even in CPG 400.400, that these products were not exempt from FDA approval requirements. Id. at *8. Next, both the petition denial and the notice of withdrawal emphasized an increase in safety concerns with this class of products. Id. Relatedly, they both noted the expansion of the industry, meaning increased exposure to the products (that had these increasing safety concerns). Id. Last, both stressed how FDA wanted to apply its general “risk-based approach to enforcement” to these products as well.
The next argument plaintiff raised—in the context of trying to show it would win on the merits—was that FDA allegedly did not consider alternatives like promulgating new regulations for homeopathic drugs or delaying the withdrawal of CPG 400.400. Under Supreme Court authority, the only alternatives that should be considered have to be “within the ambit of the existing standard.” Id. at *8 (citations omitted). This standard clearly did not apply, as changing an enforcement policy is quite different than creating a whole regulatory scheme for homeopathic drugs. Plaintiff’s position was based on the incorrect supposition that “FDA must leave open an opportunity for legal marketing of homeopathic drugs” but FDA had no such obligation. Id. at *9. Nor was there a reason to delay withdrawing the old enforcement policy to allow manufacturers to adapt. The coming change had been broadcast since 2015 with repeated reminders than enforcement of FDCA requirements for drugs was possible. There was no reason for further delay:
The FDA sought to replace “outdated policy” that no longer reflected its thinking in light of recent public health concerns. In doing so, the FDA reasonably concluded that it was more important to subject homeopathic drug manufacturers to a risk-based regime than to perpetuate a non-risk-based regime.
Id. at *9 (internal citation omitted). That dispensed with first requirement, a probability of success on the merits.
In terms of the rest of the requirements for getting a preliminary injunction, the plaintiff clearly failed. There was no irreparable harm, because FDA could have taken enforcement actions against the products at issue based on safety concerns even if CPG 400.400 remained in place. Id. There was also a strong public interest in enforcing the FDCA “to protect public health.” Id.
What does this mean for drug and device manufacturers? For manufacturers of homeopathic drugs, it does seems like the limbo has ended and they will need new legislation, NDA approvals, or determinations under GRAS/E to keep their drugs on the market. The Dante scholars can argue over what to call this post-limbo place. For the sort of cases we normally do, it may be a bit of a stretch, but this is another federal circuit waxing on about FDA’s commitment to public health and its enforcement options. For us as occasional consumers of health products and full-time believers in science, it would be good to have firm requirements in place that drugs, whether labeled as homeopathic or not, need to meet.