10th Circuit Dismisses Claims against FDA for Failure to Exhaust Administrative Remedies
On November 3, 2011, the U.S. Court of Appeals for the Tenth Circuit affirmed the findings of the District of Wyoming, granting the dismissal of the lawsuit filed by Cody Laboratories, Inc. (Cody) and Lannett Co., Inc. (Lannett) and finding in favor of the U.S. Food and Drug Administration (FDA). Finding that the companies had failed to exhaust administrative remedies, the Tenth Circuit found that it was without jurisdiction to decide the merits of the companies claims. The Tenth Circuit decision may be accessed here.
The lawsuit ultimately arose from two FDA Warning Letters that were issued to Cody and Lannett in 2009. Found here and here, the Warning Letters contain directives from the FDA to cease all manufacturing of unapproved morphine sulfate products, finding that they did not constitute grandfathered drugs under the Federal Food, Drug and Cosmetic Act (FDCA). Grandfathered drugs are those that entered the market prior to the enactment of the FDCA in 1938 and its 1962 amendments and are exempted from the requirement to show effectiveness. Finding that the products were not grandfathered drugs, the FDA concluded that the products were new drugs under the FDCA, thus requiring NDAs. In response to the companies challenge to the lawfulness of the warning letters, the District Court for the District of Wyoming found that because warning letters did not constitute final agency action, it lacked the jurisdiction to entertain the suit.
On appeal, the Tenth Circuit held that the companies claims were not reviewable because the companies had failed to exhaust their available administrative remedies. In particular, the Tenth Circuit found that the failure to utilize the citizen petition procedure provided by the FDA rendered the companies claims unreviewable. 21 C.F.R. § 10.30 provides a citizen petition procedure which affords interested parties the opportunity to receive FDA review of an otherwise unfavorable Agency decision or action. Because Cody and Lannett failed to complete this internal agency review in connection with the decision that the products constituted new drugs under the FDCA, the Tenth Circuit affirmed the district courts decision that it was without jurisdiction to consider the merits of the companies claims.
Warning letters are generally the Agencys first course of action upon discovery of a violation of the FDCA and/or FDA regulations. These letters provide formal notification to offending parties of the specific violations that FDA has observed and gives them the opportunity to respond. If after receiving a FDA Warning Letter the offending party takes all necessary measures to correct such violations, the FDA will typically take no further action. However, because these letters and the suggested corrective measures therein do not technically bind named parties to a specific course of action, courts have found that FDA Warning Letters do not constitute final agency action for the purpose of judicial review. This is so even though it is the practice of FDA to post all warning letters onto its website and thereby subject the offending party to public criticism.
A citizen petition is initiated by an interested party and seeks some form of relief from FDA action. In holding that the companies did not exhaust their administrative remedies because they failed to file citizen petitions, the court appears to have overestimated the efficacy of this process. For instance, citizen petitions are often thought to be an ineffective means for challenging FDA action because FDAs regulations allow for the FDA to indefinitely delay decision-making with little recourse for the interested party. In particular, 21 C.F.R. § 10.30(e)(2) provides that the FDA may respond within 180 days by either approving, denying, or withholding a final decision of a citizen petition. Where a final decision is withheld upon conclusion of the 180 day time period, the FDAs reasoning may be that it has not had the opportunity to render a decision because of other Agency priorities, thus prolonging the timeframe for obtaining final agency action. Thus, because the FDA is not forced to provide a final decision within a definitive timeframe, citizen petitions are often viewed as a woefully ineffective means of obtaining relief.
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