Pharmanex v. Shalala

221 F.3d 1151, 2000 Colo. J. C.A.R. 4444, 2000 U.S. App. LEXIS 17541
CourtCourt of Appeals for the First Circuit
DecidedJuly 21, 2000
Docket99-4087
StatusPublished

This text of 221 F.3d 1151 (Pharmanex v. Shalala) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pharmanex v. Shalala, 221 F.3d 1151, 2000 Colo. J. C.A.R. 4444, 2000 U.S. App. LEXIS 17541 (1st Cir. 2000).

Opinion

221 F.3d 1151 (10th Cir. 2000)

PHARMANEX, a Delaware corporation authorized to do business in the State of Utah, Plaintiff-Appellee,
v.
DONNA SHALALA, in her official capacity as Secretary of the United States Department of Health and Human Services; MICHAEL FRIEDMAN, in his official capacity as First Deputy Commissioner of the Food and Drug Administration, Defendants - Appellants.
NATIONAL ORGANIZATION OF RARE DISORDERS; MERCK & CO., INC.; NATIONAL NUTRITIONAL FOODS ASSOCIATION, Amicus Curiae.

No. 99-4087

UNITED STATES COURT OF APPEALS TENTH CIRCUIT

July 21, 2000

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH. D.C. No. 97-CV-262-KRichard M. Cooper (and Helen I. Dooley, Williams & Connolly, Washington, D.C. and Alan L. Sullivan, Snell & Wilmer, Salt Lake City, Utah, and Stuart M. Pape and Daniel A. Kracov, Patton Boggs, Washington, D.C., with him on the brief), for Plaintiff - Appellee.

Irene M. Solet (and Scott R. McIntosh, Attorneys, Appellate Staff, Civil Division, and David W. Ogden, Acting Assistant Attorney General, Department of Justice, Washington, D.C.; David J. Schwendiman, United States Attorney, Salt Lake City, Utah; Margaret Jane Porter, Chief Counsel and Neal Parker, Associate Chief Counsel, Food and Drug Administration, Rockville, Maryland, with her on the briefs), for Defendant - Appellant.

Kenneth C. Bass, III, David G. Adams, Nathan A. Beaver, Venable, Baetjer, Howard & Civiletti, Washington, D.C., for Amicus Curiae National Organization of Rare Disorders and Merck & Co., Inc.

Alan Charles Raul, Sidley & Austin, Washington, D.C., for Amicus Curiae National Nutritional Foods Association.

Before KELLY, PORFILIO, Circuit Judges, and ALLEY*, Senior District Judge.

KELLY, Circuit Judge.

This case requires that we address the scope of 21 U.S.C. 321(ff)(3)(B) as it relates to the FDA's power to regulate dietary supplements. Appellants (hereinafter, "FDA") appeal from the federal district court's order setting aside the FDA's Administrative Decision of May 20, 1998. Our jurisdiction arises under 28 U.S.C. 1291, and we reverse and remand for resolution of record based arguments not reached below.

Background

Plaintiff-Appellee, Pharmanex, markets a product, Cholestin, that is intended to promote healthy cholesterol levels. Cholestin is made from red yeast rice, and contains a natural substance, mevinolin, which is chemically identical to the active ingredient, lovastatin, in the prescription drug, Mevacor.1 Mevacor was approved by the FDA in 1987 for the treatment of high cholesterol and heart disease. On April 7, 1997, the FDA advised Pharmanex that it considered Cholestin to be a drug, which may not be marketed without FDA approval. While discussions between the parties were ongoing, the FDA issued a Notice of Detention and Hearing that prevented importation of a shipment of red yeast rice for encapsulation into Cholestin. On May 20, 1998, the FDA issued a final decision, holding that Cholestin does not meet the definition of "dietary supplement" provided by 21 U.S.C. 321(ff)(3)(B)(i), and is thus subject to regulation as a drug. Subsequently, Pharmanex filed an action in district court, seeking declaratory and injunctive relief, and asking the court to hold unlawful and set aside the FDA's decision. The district court granted a preliminary injunction, and ultimately entered a final order setting aside the FDA decision, holding that Cholestin is a "dietary supplement" within the definition set forth by 321(ff). The district court based its decision on the determination that 321(ff)(3)(B) refers unambiguously to finished drug products, rather than their individual constituents. Thus, it was unnecessary for the district court to reach a number of issues raised by both parties. It did not reach Pharmanex's claim that the FDA was arbitrary and capricious in determining (1) that Pharmanex, in manufacturing and marketing Cholestin, was manufacturing and marketing lovastatin; and (2) that lovastatin had not been marketed as a dietary supplement or as a food before its approval as a new drug. While the district court remarked in passing that red rice yeast is a food that has been consumed for centuries in China and decades in the U.S., both parties agree that this was not equivalent to ruling on the FDA's prior determinations. Moreover, the district court did not pass on Pharmanex's claims that (1) under 321(ff)(3), how a supplement is manufactured (i.e., to enhance the presence of one of its ingredients) is irrelevant; and (2) the FDA did not adequately explain its departure from its prior interpretation that approval of a new drug is an approval only of a product, not an active ingredient.

Discussion

As noted at the outset, this case involves an interpretation of 21 U.S.C. 321(ff)(3)(B) of the Food, Drug, and Cosmetic Act (hereinafter, "FDCA"), as amended by the Dietary Supplement Health and Education Act, Pub. L. No. 103-417 (1994) (hereinafter, "DSHEA"). Because we are confronted with conflicting interpretations of the statute that the Food and Drug Administration is charged with administering, the analytic framework set forth in Chevron, U.S.A. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), governs our analysis. See FDA v. Brown & Williamson Tobacco Corp., 120 S.Ct. 1291, 1300 (2000). That is, we must decide, using the traditional tools of statutory construction, "whether Congress has directly spoken to the precise question at issue." Id. (quoting Chevron, 467 U.S. at 842). If so, that is the end of the matter, and Congress' clear intent controls. If the statute is silent or ambiguous as to the specific issue before us, then we must defer to the agency's interpretation, if it is based on a permissible construction. Id. We need not conclude that the agency construction is the only one possible, or even that we would have so construed the statute had the issue arisen in a judicial proceeding. Rather, we will give effect to the agency's interpretation unless it is arbitrary, capricious, or manifestly contrary to the statute. See Chevron at 844. We accord the agency such deference, given its special institutional competence regarding the "facts and circumstances surrounding the subjects regulated," particularly those which touch and concern competing views of the public interest. See Brown & Williamson, 120 S.Ct. at 1300.

In evaluating whether Congress has squarely and unambiguously addressed the question before us, we need not limit ourselves to scrutiny of the discrete statutory section in isolation. Rather, we examine the statutory provision in context. See Brown & Williamson, 120 S.Ct. at 1300-01.

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Bluebook (online)
221 F.3d 1151, 2000 Colo. J. C.A.R. 4444, 2000 U.S. App. LEXIS 17541, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pharmanex-v-shalala-ca1-2000.