UNITED STATES OF AMERICA, PETITIONER V. GENERIX DRUG CORPORATION,
ET AL.

   No. 81-1222

   In the Supreme Court of the United States

   October Term, 1981

   On Writ of Certiorari to the United States Court of Appeals for the
Eleventh Circuit /1/

   Brief for the United States

            TABLE OF CONTENTS
   Opinions below
   Jurisdiction
   Statutes involved
   Statement
   Summary of argument
   Argument:
      I. The explicit language of the Act establishes that the
          Act's "new drug" provisions apply to generic drug products
          A. The statutory definitions of the terms "drug" and
             "new drug" encompass generic drug products
          B. The Act's new drug approval provisions require
             that FDA review new drug products
      II. The legislative history of the Act confirms that
          generic drug products are not exempt from the
          requirement of premarketing approval
          A. The 1938 Act was intended by Congress to
             prohibit the marketing of any potentially unsafe
             drug product
          B. The 1962 Amendments did not exempt generic drug
             products from the new drug approval provisions of
             the Act
      III. Premarketing approval of generic drug products is
          necessary to effectuate the fundamental purpose of the
          Act
          A. Premarketing review is the only means by which FDA
             can protect the public from unsafe or ineffective
             generic drug products
          B. Premarketing approval of generic drug products
             promotes rather than impairs competition in the
             marketing of safe and effective generic drugs
   Conclusion

                            OPINIONS BELOW

   The opinion of the court of appeals (Pet. App. 1a-15a) /2/ is
reported at 654 F.2d 1114.  The decision of the district court (Pet.
App. 18a-31a) is reported at 498 F. Supp. 288.

                             JURISDICTION

   The judgment of the court of appeals (Pet. App. 16a-17a) was
entered on September 4, 1981.  On November 24, 1981, Justice White
extended the time within which to file a petition for a writ of
certiorari to and including January 2, 1982.  The petition was filed
on December 30, 1981, and was granted on March 1, 1982 (J.A. 66).  The
jurisdiction of this Court rests on 28 U.S.C. 1254(1).

                           STATUTES INVOLVED

   The relevant statutory provisions are set forth at Pet. App.
33a-44a.

                          QUESTION PRESENTED

   Whether a prescription drug product -- even though potentially
unsafe or ineffective -- is exempt from the requirement of
premarketing approval by the Food and Drug Administration merely
because it contains the same active ingredient as another drug that
has received FDA approval or that is generally recognized as safe and
effective.  /*/

                               STATEMENT

   1. Section 505(a) of the Federal Food, Drug, and Cosmetic Act ("the
Act"), 21 U.S.C. 355(a), prohibits any person from introducing into
interstate commerce any "new drug" that has not been approved by the
Food and Drug Administration ("FDA").  /3/ The term "new drug" is
defined in Section 201(p) of the Act, 21 U.S.C. 321(p), as any drug
that "is not generally recognized, among experts qualified by
scientific training and experience to evaluate the safety and
effectiveness of drugs, as safe and effective for use under the
conditions prescribed, recommended, or suggested in the labeling
thereof," /4/ or that has not been used to a material extent and for a
material time under other than experimental conditions.  /5/

   Generix Drug Corporation ("Generix") is a distributor of generic
drugs, i.e., drugs that purport to be copies of brand name or
"pioneer" drugs manufactured by other companies.  While the "active"
ingredients of these generic drugs purport to be identical to those
contained in the pioneer drugs, the "inactive" ingredients (e.g.,
coatings, binders) may differ.  Many of the generic drugs Generix sold
in interstate commerce had not been approved by the FDA and, in the
government's view, were "new drugs" within the meaning of the Act.
After a series of warnings, respondents continued to distribute a
variety of unapproved prescription drugs (J.A. 11-15, 17).
Accordingly, on November 29, 1979, the United States filed an action
in the United States District Court for the Southern District of
Florida against Generix and several of its officers and employees.
The complaint requested both preliminary and permanent injunctive
relief.  /6/

   Generix did not deny that the particular drug products referred to
in the complaint had not been approved by FDA.  /7/ The hearing on the
government's request for a preliminary injunction focused, therefore,
on the question whether the generic drugs distributed by Generix were
"new drugs" within the meaning of 21 U.S.C. 321(p).  In arguing that
they were not, Generix relied on the fact that FDA had approved other
drug products containing the same active ingredients as Generix's
drugs.  Such prior FDA approval, Generix argued, was evidence that the
active ingredients were generally recognized as safe and effective.
From this premise, Generix asserted that its products were not "new
drugs" even if their inactive ingredients and methods of compounding
were not identical to those used in the products previously approved
by FDA.  /8/ Accordingly, Generix contended that the prescription
drugs it distributed were subject to no FDA clearance whatever.

   The government argued that FDA's prior approval of prescription
drugs containing the same active ingredients as the drugs marketed by
Generix was irrelevant because the Act requires FDA approval of every
drug product unless that product is generally recognized as safe and
effective and has been used to a material extent and for a material
time.  The government's evidence established that Generix's unapproved
drug products were not generally recognized by qualified experts as
safe and effective (Tr. 49-52, 93-94, 96-97).

   In addition, the government presented evidence showing why
distribution of unapproved generic drugs poses a danger to the public
health.  As expert witnesses explained, prescription drugs generally
contain one or more active ingredients, which may comprise 10% or less
of the total compound.  They also contain inactive ingredients, known
as excipients, whose purposes are to coat or bind the active
ingredients into a convenient form and to control their solubility
(Tr. 83-84).  Because of differences in inactive ingredients or in
methods of compounding, drugs containing the same active ingredients
can differ from each other in the amounts of the active ingredient
that enter the bloodstream and the rate at which this occurs.  /9/
Since the quantity and speed of delivery of active ingredients are
critical factors that determine the effect of a drug on the patient,
it cannot be assumed that a copy of an approved new drug will achieve
the same therapeutic effect as the pioneer product (Tr. 39-40, 46-67).
 Often it does not.  /10/

   The unapproved drugs distributed by Generix include drugs
prescribed for the treatment of serious and potentially
life-threatening conditions such as high blood pressure (Tr. 47-48).
The government's experts demonstrated that differences in formulation
could affect the safety or effectiveness of such drugs (Tr. 94-98).
Moreover, because the labeling of these generic products is virtually
identical to that of the brand name products they copy, and because
Generix markets these unapproved drugs in a way that would lead
physicians to believe that they are interchangeable with approved
drugs (Tr. 45-47), they create serious dangers to patients.  /11/

   Finally, the evidence showed that doctors and pharmacologists
generally regard premarketing testing and approval as necessary to
insure the safety and effectiveness of drugs.  Because of the serious
dangers that may be created by differences in bioavailability,
physicians would not knowingly prescribe an unapproved generic drug
(Tr. 55-47).  /12/ Their willingness to prescribe generic drugs at all
is based on their assumption that generic drugs have received FDA
approval.

   2. On June 12, 1980, the district court issued an order granting in
part and denying in part the government's motion for a preliminary
injunction (Pet. App. 18a-31a).  Rejecting both the government's and
Generix's interpretations of the Act, the court held that the
government had the burden of showing a potential hazard associated
with Generix's drugs.  /13/ The court then found that the government
had presented evidence that differences in bioavailability could
affect the safety and effectiveness of drugs containing any one of six
active ingredients or combainations of ingredients /14/ and enjoined
distribution of those drugs.  Because such specific evidence was not
presented as to Generix's other unapproved generic drugs, /15/
however, the court denied the government's motion for a preliminary
injunction against distribution of those other products (id. at 31a).
/16/ The preliminary injunction was stayed pending Generix's appeal
(id. at 32a).

   3. The court of appeals reversed that portion of the district
court's order granting a preliminary injunction and remanded the case
to the district court with instructions to dismiss the complaint.

   The court of appeals held that the term "new drug" applies only to
active ingredients and not drug products.  Therefore, the court
concluded, a generic drug product containing the same active
ingredient as an approved pioneer drug /17/ is not a "new drug" and
need not comply with the Act's requirement that all new drugs be
approved by FDA before they are marketed.  The court expressly
declined to follow the recent decision in Premo Pharmaceutical
Laboratories, Inc. v. United States, 629 F.2d 795 (1980), in which the
Second Circuit held that the Act's new drug definition applies to drug
products, not to active ingredients alone, and that FDA approval of a
brand name drug does not exempt other new drugs that contain the same
active ingredient from the requirement of premarketing approval.

   The court of appeals acknowledged that there may be differences in
therapeutic effect between a pioneer drug product that has been
approved by FDA, and unapproved generic drugs having the same active
ingredient but different inactive ingredients (Pet. App. 3a).  It also
noted the evidence that these differences "may effect (sic) the safety
and efficacy of the generic drug product" (ibid.).  But the court of
appeals construed the Act not to protect the public from these
dangers.  The court concluded:  "the term 'new drug' as used in (21
U.S.C.) Section 321(p) applies only to the active ingredient of a drug
product" (id. at 15a).  The bases for this conclusion were the court's
assumptions that "the drugs listed in the sources described in
subsection (A) of (21 U.S.C.) Section 321(g)(1) are 'drug substances'
not drug products" and that "(i)f 'new drug' refers to the drug
product as opposed to the active ingredient, a drug could never
'muster the requisite scientifically reliable evidence of
effectiveness' in order to 'drop out of active regulation by ceasing
to be a new drug'" as is contemplated by the Act (id. at 5a, 7a).
/18/

   The court of appeals considered the new drug approval procedures of
21 U.S.C. 355 unnecessary in the case of generic drugs because, in the
court's view the Act gave the FDA other means to regulate
bioavailability and bioequivalence.  The court, in addition, concluded
that premarketing review of generic drugs by FDA would be contrary to
Congressional intent "to encourage generic-name prescribing and
thereby lower prices" (Pet. App. 10a).

   Because the court of appeals concluded that in no circumstances is
prior FDA approval required for a drug containing the same active
ingredient as a previously approved new drug, it vacated the
preliminary injunction -- even as to those drugs for which there was
evidence that lack of bioequivalence could be dangerous to the
patient-- and ordered the complaint dismissed (Pet. App. 15a).

                          SUMMARY OF ARGUMENT

   The court of appeals' opinion ignored the plain meaning of the
Federal Food, Drug, and Cosmetic Act and, consequently, reached a
result at odds with clear Congressional intent and sound public
policy.  As a result, the court of appeals has sanctioned the
distribution of unapproved -- and, as far as the record reveals,
untested -- prescription drugs.  Unless the decision below is
reversed, its inevitable result will be the ingestion of such
unapproved drugs by patients suffering from life-threatening ailments,
patients who are in need of the assurances of safety and effectiveness
the Act mandates.

   The Federal Food, Drug, and Cosmetic Act prohibits the marketing of
any "new drug" without prior FDA approval.  21 U.S.C. 355(a).  A new
drug is any drug that is not generally recognized by experts as safe
and effective or that has not been used to a material extent and for a
material time.  21 U.S.C. 321(p).  The statutory language expressly
provides that a generic drug product is a drug and that the Act's
prohibition on marketing of unapproved new drugs applies to generic
drug products.  That construction of the Act is supported by the Act's
legislative history and is necessary to effectuate the Act's
underlying purpose -- protection of the public health.

   1. The Act defines "drug" to include "articles intended for use in
the diagnosis, cure, mitigation, treatment, or prevention of disease
in man or other animals." 21 U.S.C. 321(g)(1)(B).  Generic drug
products clearly fit within this definition.  Since generic drug
products are drugs, 21 U.S.C. 355 prohibits the marketing of any
generic drug product without FDA approval unless "such drug," i.e.,
the generic product itself, is "generally recognized, among experts *
* * as safe and effective" and has "been used to a material extent"
and "for a material time." 21 U.S.C. 321(p)(1), (2).  The
product-specific statutory requirements for new drug applications (21
U.S.C. 355(b)) further support the conclusion that general recognition
of a pioneer drug does not exempt other products containing the same
active ingredient from the requirement of premarketing approval.
Since evidence about the safety and effectiveness of a pioneer drug
product would not be sufficient for approval of a new drug application
for a generic copy of the pioneer product, such evidence is not a
sufficient basis for an expert consensus that a generic copy is safe
and effective.  Weinberger v. Hynson, Westcott & Dunning, Inc., 412
U.S. 609, 632 (1973).

   2. The legislative history of the new drug provisions of the Act
confirms that each drug product that has not itself achieved general
recognition among experts must be approved by FDA before it is
marketed.  The direct stimulus for the enactment of premarketing
approval requirements in 1938 was the fact that numerous deaths had
been caused by a new product that, although it contained an active
ingredient previously used in other products, was rendered toxic by
the use of an untested inactive ingredient.  The 1962 amendments were
intended to strengthen the protection afforded the public from
potentially unsafe or ineffective drugs, and nothing in those
amendments exempts generic drug products from premarketing approval.

   3. Premarketing approval of generic drug products is necessary to
effectuate the Act's fundamental purpose -- protection of the public
health.  Unapproved generic drugs may be unsafe or ineffective, and
measures available to remove them from the market after they have
caused harm simply do not provide the protection Congress intended.
Moreover, a requirement of premarketing approval will not hamper
competition in the drug industry.  To the contrary, competition will
be promoted by assuring that all prescription drugs on the market have
satisfied the statutory standards of safety and efficacy.  In the
absence of the assurance provided by premarketing approval, careful
doctors and pharmacists would be deterred from prescribing or
dispensing generic drug products, despite lower prices.

                               ARGUMENT

         I. THE EXPLICIT LANGUAGE OF THE ACT ESTABLISHES THAT THE
      ACT'S 'NEW DRUG" PROVISIONS APPLY TO GENERIC DRUG PRODUCTS

   This case presents a narrow question of statutory construction with
broad consequences for the public health and the future of competition
in the distribution of safe and effective prescription drugs.  Since
it is undisputed that respondents distributed generic prescription
drugs without FDA premarketing approval, the issue before this Court
is whether such drugs are exempt from the statutory preclearance
scheme.  Respondents' primary contention is that their products are
not "new drugs" within the meaning of the Act.  In support of this
position, respondents have at various stages of this litigation relied
on two principal arguments.  First, they assert that their drugs are
not "new drugs" because they contain the same active ingredients as
other drugs that have received FDA approval, even though the inactive
ingredients may differ.  Thus, it is respondents' position that their
drugs should be presumed to be safe and effective and, consequently,
exempt from FDA review, even if a difference in ingredients results in
dissimilar effects on the human body.  Second, respondents contend
that the active ingredients in the pioneer drugs their products
purport to copy have received general expert recognition as safe and
effective and have been used to a material extent and for a material
time, and that therefore the purported copies are not "new drugs,"
even though, again, the copies may contain different inactive
ingredients, may have dissimilar effects on the human body, have
themselves received no expert recognition, and have not been used to a
material extent and for a material time.  /19/

   Respondents' positions fly in the face of the clear statutory
language.  /20/ Accordingly, we turn first to the express language of
the Act to demonstrate that the prescription drugs at issue were, in
the absence of premarketing approval, distributed unlawfully, as the
Second Circuit held in Premo Pharmaceutical Laboratories, Inc. v.
United States, supra.  /21/

         A. The Statutory Definitions of the Terms "Drug" and "New
      Drug" Encompass Generic Drug Products

   Section 505(a) of the Act, 21 U.S.C. 355(a), prohibits the
marketing of "any new drug, unless an approval of an application filed
pursuant to (21 U.S.C. 355(b)) is effective with respect to such
drug." The Act defines a "new drug," i.e., a drug that cannot be
marketed without prior FDA approval, as:  "Any drug * * * the
composition of which is such that such drug is not generally
recognized, among experts * * * as safe and effective" or "(a)ny drug
* * * which has not * * * been used to a material extent or for a
material time." 21 U.S.C. 321(p)(1), (2) (emphasis added).

   1. The term "drug," as used in the definition of "new drug," is
broadly defined in the Act (21 U.S.C. 321(g)(1)) to include:

      (A) articles recognized in the official United States
      Pharmacopoeia, official Homoeopathic Pharmacopoeia of the United
      States, or official National Formulary, or any supplement to any
      of them;  and (B) articles intended for use in the diagnosis,
      cure, mitigation, treatment, or prevention of disease in man or
      other animals;  and (C) articles (other than food) intended to
      affect the structure or any function of the body of man or other
      animals;  and (D) articles intended for use as a component of
      any article specified in clauses (A), (B), or (C) of this
      paragraph;  but does not include devices or their components,
      parts, or accessories.

   Generic drug products are within the literal language of at least
one of four subsections of this statutory definition, which this Court
has held must be interpreted to provide coverage "as broad as its
literal language indicates." United States v. An Article of Drug . . .
Bacto-Unidisk, 394 U.S. 784, 798 (1969).  As the Second Circuit held
in Premo Pharmaceutical Laboratories, Inc. v. United States, supra,
generic drug products are "drugs" because they are "articles intended
for use in the diagnosis, cure, mitigation, treatment, or prevention
of disease in man or other animals." 21 U.S.C. 321(g)(1)(B).

   In holding that only active ingredients and not drug products are
drugs, the court of appeals in this case ignored the literal language
of the statutory definition, disregarding 21 U.S.C. 321(g)(1)(B).
Indeed, the court entirely omitted subsection (B) of 21 U.S.C.
321(g)(1) from its discussion, and failed to explain why it thought
that a generic drug product would not fit within this definition.
Rather, the court considered only another subsection of the definition
of "drug" (Pet. App. 5a), 21 U.S.C. 321(g)(1)(A), and even that
subsection does not support its conclusion.  Thus, the court stated
that the "record shows that the drugs listed in the sources described
in subsection (A) * * * are 'drug substances,' not drug products"
(Pet. App. 5a);  but there is nothing to that effect in the record.
On the contrary, the pharmacopoeia mentioned in 21 U.S.C. 321(g)(1)(A)
contain monographs for drug products as well as active ingredients.
/22/

   More importantly, however, an article need fall within only one of
the subsections of 21 U.S.C. 321(g)(1) in order to be a "drug." /23/
Therefore, regardless of the scope of 21 U.S.C. 321(g)(1)(A), generic
drug products are drugs as defined in 21 U.S.C. 321(g)(1)(B).  /24/

   2. Since a generic drug product is a drug, the language of 21
U.S.C. 321(p) compels the conclusion that a generic drug product is a
"new drug" if "such drug," i.e., the generic drug product, is not
generally recognized by experts as safe and effective or has not been
used to a material extent and for a material time.  There is nothing
in the statutory language to support the court of appeals' conclusion
that a generic drug product can escape "new drug" status by virtue of
general recognition of the safety and effectiveness of a pioneer drug
product containing the same active ingredient or of the active
ingredient itself.

         B. The Act's New Drug Approval Provisions Require That FDA
      Review New Drug Products

   The conclusion that a generic drug product cannot escape "new drug"
status unless the generic product is itself recognized by experts as
safe and effective and has been used to a material extent and for a
material time is further supported by the need to harmonize the
definition of "new drug" with the Act's requirements for obtaining
approval of a new drug application ("NDA").  21 U.S.C. 355(b)-(e).
See Weinberger v. Hynson, Westcott & Dunning, Inc., supra, 412 U.S. at
631-632.

   1. The statutory provisions governing NDAs (21 U.S.C. 355(b)) show
that the FDA's premarketing review of a "new drug" is a review of the
safety and effectiveness of a drug product, i.e., of the combined
effect of specific active and inactive ingredients.  The Act requires
the applicant to submit information about the components, the methods
of manufacturing, and the labeling of the drug product for which
approval is sought.  /25/ As the record in this case demonstrates,
this information will be different for each new drug product, even if
it has the same active ingredient as a previously approved drug
product.  Thus, one of the government's expert witnesses testified in
this case that (Tr. 102-103):

      When you say it's "safe and effective," that depends entirely
      upon the drug delivery system you put it in.  It's not safe if
      you give it in the wrong dose.  Until you define the drug
      delivery system * * * you're dealing with, one can't say that
      allopurinol is safe and effective in the absence of the drug
      delivery system.  You can say that allopurinal is a
      pharmacologically active drug which, in the proper use and
      circumstances, it can be safe and effective, but until you
      define those characteristics in a situation in which it is going
      to be used, then the terms are meaningless in may opinion.

                      * * * * *

      You can't say that something's safe and effective, again, a drug
      substance, until you define how you are going to deliver it to
      the body.  Is it safe and effective, given intravenously?  * * *
      Is it safe and effective by a drug delivery system that isn't
      absorbed?  Until you define the total performance of a product,
      you can't make judgments on safety and efficacy of the way it
      will be used in humans.

   In enacting the statutory approval process, Congress provided for
consideration of these factors.  Thus, on the basis of the information
included in the application, the FDA must determine whether "adequate
tests by all methods reasonably applicable" show that "such drug,"
i.e., the drug product described in the application, "is safe for use
under the conditions prescribed, recommended, or suggested in the
proposed labeling thereof" and whether "there is * * * substantial
evidence /26/ 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." 21 U.S.C.
355(d).  /27/ Since inactive ingredients and methods of compounding
can affect the safety and effectiveness of a drug product, FDA's
determination that the requisite evidence of safety and effectiveness
has been presented for a particular drug product cannot be viewed as a
determination as to other products containing the same active
ingredient.  This obvious conclusion is supported by the testimony in
this case, which reveals that 90-95% of those generic drugs that are
not bioequivalent to the pioneers lack bioequivalence precisely
because of their inactive ingredients or methods of manufacture (Tr.
83-84).

   As this Court has recognized, therefore, each NDA is applicable
only to a specific drug product.  USV Pharmaceutical Corp. v.
Weinberger, 412 U.S. 655, 664 (1973).  Accordingly, approval of a
pioneer drug product does not permit the marketing of an unapproved
generic drug containing the same active ingredient.

   2. The exclusion from the "new drug" definition of drugs that are
generally recognized by experts as safe and effective and have been
used to a material extent and for a material time cannot be construed
"to deprive FDA of jurisdiction over a drug which, if subject to FDA
regulation, could not be marketed" because of the absence of
sufficient evidence of its safety or effectiveness.  Weinberger v.
Hynson, Westcott & Dunning, Inc., supra, 412 U.S. at 631.  Such a
construction of the statute would erroneously "impute to Congress a
purpose to paralyze with one hand what it sought to promote with the
other." Ibid.  Therefore, a drug cannot be generally recognized as
safe and effective unless there is an "expert consensus" that it is
safe and effective and that consensus is based on tests showing safety
and effectiveness that would be sufficient to warrant approval of an
NDA for that product and that are available to experts in the
scientific literature.  412 U.S. at 629-634;  Weinberger v. Bentex
Pharmaceuticals, Inc., 412 U.S. 645, 652 (1973).  /28/

   Under the Act, however, evidence of the safety and effectiveness of
a pioneer drug product would not be sufficient to warrant approval of
a generic drug containing the same active ingredient (see pages 19-22,
supra).  Therefore, even if the required expert consensus and
supporting evidence in the scientific literature exist for a pioneer
drug product, those facts do not provide a sufficient basis for a
finding that a generic drug with the same active ingredient is not a
"new drug." /29/ Expert consensus supported by published evidence
about the generic product itself is required.

   In this case it was not disputed that there are no published
studies from which experts could have reached a consensus that
respondents' generic prescription drugs were safe and effective.  /30/
Therefore, these products are "new drugs" under the plain language of
the Act, and it is a violation of the Act to market them without prior
FDA approval.

   3. The court of appeals incorrectly assumed that FDA approval of a
pioneer drug is equivalent to an agency finding that the active
ingredient of that pioneer drug is "generally recognized" as safe and
effective.  In deciding whether to approve a drug product, FDA does
not -- and indeed could not -- focus solely on the safety and
effectiveness of the active ingredient.  Rather, as required by the
Act, it evaluates the drug product as a whole, including its inactive
ingredients and methods of manufacture.  21 U.S.C. 355(b).  See pages
19-21, supra.

   Moreover, FDA's approval of a new drug application is not a finding
that the drug is generally recognized as safe and effective, and FDA
approval does not mean that the approved drug is no longer a new drug.
 This Court has held that:

      the Act is designed so that drugs on the market, unless exempt,
      will have mustered the prerequisite scientifically reliable
      evidence of effectiveness long before they are in a position to
      drop out of active regulation by ceasing to be a 'new drug.'

   Weinberger v. Hynson, Westcott & Dunning, Inc., supra, 412 U.S. at
631 (emphasis added).  /31/

   4. The court of appeals apparently believed that if general
recognition attached to products rather than active ingredients, no
drug product could ever achieve "not new" status and the statutory
distinction between a "new drug" and other drugs therefore would be
"superfluous" (Pet. App. 7a).  To the contrary, as this Court clearly
contemplated in Hynson, it is possible for a drug product to achieve
expert general recognition and pass out of "new drug" status at some
point after being marketed for a period of time under an NDA.  412
U.S. at 631.  The court of appeals' conclusion that a drug product
could never become recognized as safe and effective was based on its
incorrect assumption that recognition of a drug product's safety and
effectiveness would require general expert knowledge of the
ingredients and manufacturing processes of the product, which usually
are trade secrets and would not become known to experts generally
(Pet. App. 7a).  In fact, published test results showing safety and
effectiveness, on which expert general recognition is based, are tests
of products -- not active ingredients.  Thus, experts can and do form
opinions about a drug product on the basis of these tests without
knowing how a drug was produced or what ingredients it contains.  /32/

         II. THE LEGISLATIVE HISTORY OF THE ACT CONFIRMS THAT THE
      GENERIC DRUG PRODUCTS ARE NOT EXEMPT FROM THE REQUIREMENT OF
      PREMARKETING APPROVAL

   The legislative history of the new drug provisions of the 1938 Act,
and of the 1962 amendments to those provisions, confirms that each
drug product that has not itself achieved expert general recognition
must be approved by the FDA before it is marketed.

         A. The 1938 Act Was Intended by Congress to Prohibit the
      Marketing of Any Potentially Unsafe Drug Product

   Prior to the passage of the Act in 1938, drugs could be marketed
without any testing or governmental review.  Following an incident in
which numerous deaths were caused by the drug Elixir Sulfanilamide,
however, Congress determined that removal of drugs from the market
after they had caused harm simply was not an adequate means of
protecting the public.  It therefore enacted a system of premarketing
review by FDA "to prevent the premature marketing of new drugs not
properly tested for safety." H.R. Rep. No. 2139, 75th Cong., 3d Sess.
9 (1938).

   Elixir Sulfanilamide was itself an untested drug composed of a
widely used active ingredient and a new inactive ingredient;  the
inactive ingredient was responsible for the deaths caused by the drug.
 /33/ Set against this historical background, it would be contrary to
clear congressional intent for the requirement of premarketing review
to be eliminated for generic drug products merely because they purport
to contain the same active ingredient as other drugs that have been
proved safe and effective.  A statute with such an exemption would not
have prevented the Elixir Sulfanilamide tragedy that first caused
Congress to recognize the need for premarketing review.  /34/
Similarly, it would not protect the public from generic drug products
that may be unsafe or ineffective because of their inactive
ingredients.  Therefore, generic drugs must be subject to the new drug
provisions on a product-by-product basis to implement the
Congressional determination that removal of unsafe drugs from the
market after they have caused harm simply is not adequate to protect
the public.  See, e.g., United States v. Premo Pharmaceutical
Laboratories, Inc., supra, 511 F. Supp. at 988-989.

         B. The 1962 Amendments Did Not Exempt Generic Drug Products
      From The New Drug Approval Provisions Of The Act

   1. The 1962 amendments to the Act were adopted in the wake of great
public concern over thalidomide, a drug that had caused numerous cases
of severe birth defects in European children whose mothers had taken
that drug during pregnancy.  Congress recognized that it was only
because of the Act's premarketing clearance procedures that
thalidomide was kept off the market in the United States.  /35/ There
is nothing in the language or the legislative history of the 1962
amendments that suggests that Congress meant to weaken the new drug
provisions by exempting generic drugs from the premarketing approval
requirements of 21 U.S.C. 355.

   2. To protect the public from ineffective drug products, Congress
amended the Act to prohibit the marketing of drugs whose effectiveness
has not been established.  /36/ Thus, Congress added to the statutory
requirement of adequate testing to show safety the further requirement
that substantial evidence of effectiveness must be demonstrated.  A
corresponding change was made in the definition of "new drug";  drugs
cannot excape "new drug" status unless their effectiveness as well as
their safety is generally recognized by qualified experts.

   The amendment of the Act and Congress' desire to promote the use of
generic drug products did not, as the court of appeals thought, mean
that Congress intended to exempt generic products from the approval
process.  Senator Kefauver himself, in first proposing the amendment
of the new drug provisions to require that FDA review products for
effectiveness as well as safety, premised his proposal on his
understanding that the review would be on a product-by-product basis.
Only if FDA reviewed the effectiveness of each product, he argued,
could generic brands compete effectively with pioneer products:

      Despite the fact that different brands are identical
      generically, the contention was made at the hearings that
      identical products which met the safety requirements of the law,
      nevertheless, were for various reasons not equal in therapeutic
      quality or efficacy.  I am satisfied that much of the high cost
      of drug products has come about as a result of this claim,
      whether it is fact or fiction.  Hence, the requirement of this
      bill that the Food and Drug Administration pass on the efficacy
      as well as the safety of new drugs should make it more difficult
      to contend successfully that there is a difference between two
      brands which are identical generically and both cleared as to
      safety and efficacy.  Thus, promotion costs of new drugs
      attributable to this contention could be saved and the price of
      new drugs lowered accordingly.

106 Cong. Rec. 12665 (1960).

   Congress also increased the protection afforded the public by
eliminating the procedure whereby an NDA became effective
automatically in the absence of FDA action to disapprove it.  Under
the Act as amended, "a new drug application is not effective unless it
has affirmative approval both for safety and effectiveness." H.R. Rep.
No. 2464, 87th Cong., 2d Sess. 10 (1962).  See also S. Rep. No. 1744
(Pt. 2), 87th Cong., 2d Sess. 4-5 (1962).

   3. Contrary to the court of appeals' interpretation (Pet. App.
10a-12a), the addition of the "established name" labeling requirements
(21 U.S.C. 352(e)) /37/ does not indicate any Congressional intent to
permit the marketing of potentially unsafe or ineffective generic drug
products.  Rather, Congress sought to facilitate substitution only of
safe and effective generic drugs, /38/ thereby encouraging cost
savings and competition in the drug industry.  /39/ Congress assumed
that no drug -- pioneer or generic -- would reach the market unless
its safety and effectiveness were established through general
recognition or an approved NDA.  /40/ There is nothing in the
legisative history to support the view that Congress intended to
subject the public to the risk that generic drug products, while they
might be lower priced, would not be safe and effective.

         III. PREMARKETING APPROVAL OF GENERIC DRUG PRODUCTS IS
      NECESSARY TO EFFECTUATE THE FUNDAMENTAL PURPOSE OF THE ACT

         A. Premarketing Review Is The Only Means By Which FDA Can
      Protect The Public From Unsafe Or Ineffective Generic Drug
      Products

   Narrowing the definition of "drug" to exempt generic drug products
from the new drug approval requirements, as the court of appeals has
done, is contrary not only to the specific statutory language and
legislative history discussed above but also to the fundamental
principle -- protection of the public health -- that has guided the
courts in interpreting the Act.  As this Court noted in United States
v. Dotterweich, 320 U.S. 277, 280 (1943):

      The purposes of (the Act) * * * touch phases of the lives and
      health of people which, in the circumstances of modern
      industrialism, are largely beyond self-protection.  Regard for
      these purposes should infuse construction of the legislation if
      it is to be treated as a working instrument of government and
      not merely a collection of English words.

   See also Kordel v. United States, 335 U.S. 345, 349 (1948);  United
States v. Sullivan, 332 U.S. 689, 696 (1948).  /41/ Moreover, as this
Court has held:  "Congress fully intended that the Act's coverage be
as broad as its literal language indicates -- and * * * broader than
any strict medical definition might otherwise allow." United States v.
An Article of Drug . . . Bacto-Unidisk, supra, 394 U.S. at 798.  See
also United States v. Rutherford, 442 U.S. 544 (1979).  To exempt
generic drug products from premarketing review would be contrary to
the Act's basic intent because it would remove the only effective
means of protecting the public from potentially unsafe or ineffective
generic drugs.

   1. As wer have shown (pages 19-22, supra), because of differences
in their ingredients, methods of compounding, and therapeutic effect,
FDA review of pioneer drugs does not insure that generic drugs are
safe and effective.  Nor could FDA's power to institute
post-distribution enforcement actions prevent the marketing of unsafe
or ineffective generic drugs if premarketing approval were not
required.  Indeed, if FDA had to institute an enforcement action and
demonstrate that an unapproved generic drug product was in fact unsafe
or ineffective, the burden of proving safety and effectiveness that
Congress placed squarely on manufacturers would be reversed, and
unsafe or ineffective products could be marketed to the detriment of
the public until FDA gathered the requisite evidence and instituted
enforcement actions.

   Generix's argument (Br. in Opp. 27) that the government should be
required to establish that specific unapproved drugs are harmful harks
back to the days prior to the 1938 passage of the new drug provisions,
when potentially harmful drugs could be placed on the market with
impunity until the government was able to prove them unsafe.  Under
current law, however, it is clear that when the "new drug" status of a
drug is at issue, the government has no burden to show that the drug
is in fact unsafe or ineffective.  /42/ For this reason, the actual
safety and effectiveness of the drug is irrelevant to the question
whether the drug is "generally recognized" as safe and effective.
See, e.g., Premo Pharmaceutical Laboratories, Inc. v. United States,
supra, 629 F.2d at 803-804;  United States v. 1,048,000 Capsules . . .
Afrodex, 494 F.2d 1158, 1160 (5th Cir. 1974);  Tyler Pharmacal
Distributors, Inc. v. United States Department of Health, Education &
Welfare, 408 F.2d 95, 99 (7th Cir. 1969).

   2. Contrary to the court of appeals' assumption (Pet. App.
13a-14a), the adulteration provisions of the Act, 21 U.S.C. 351, as
amended in 1962, also are inadequate to prevent the marketing of
unsafe or ineffective generic drugs "without subjecting the drug
product to the new drug approval process" (Pet. App. 13a).  The new
drug approval requirement and the requirements of 21 U.S.C. 351
address two different problems, and both are necessary to protect the
public health.  /43/

   By requiring the applicant to describe the components of a new drug
and the process by which it is manufactured, and to present evidence
that that drug is safe and effective, 21 U.S.C. 355(b) assures that
FDA will receive the information it needs to determine whether the
product described in an NDA is safe and effective.  The complementary
purpose of the adulteration provision, 21 U.S.C. 351, is to assure
that every batch of the drug product as manufactured is the product
whose safety and effectiveness have been demonstrated in the NDA or by
expert recognition.  Thus, 21 U.S.C. 351 provides that a drug is
"adulterated" and may not be marketed if it does not have the safety,
identity, strength, quality and purity characteristics the product
purports or is represented to possess.  /44/

   Under the 1938 Act, FDA had only limited power to protect the
public from drugs that were adulterated because of deficiencies in
strength, quality or purity.  The enforcement tools available to the
government -- seizure, injunction, and criminal prosecution -- could
not be used until offending products had been marketed;  even then the
government had to prove that the product was deficient.  In 1962,
therefore, Congress expanded the adulteration provisions to prohibit
the marketing of drugs by manufacturers who did not adhere to good
manufacturing practices, i.e., the procedures necessary to assure that
the manufacturer follows its "recipe" in producing a drug product.  21
U.S.C. 351(a)(2)(B).  /45/ So that FDA could enforce the good
manufacturing practices requirement, Congress increased FDA's
authority to inspect prescription drug manufacturers, 21 U.S.C.
374(a), and required manufacturers periodically to register uith FDA,
21 U.S.C. 360.  /46/

   The adulteration prohibitions, even with the addition of the good
manufacturing practices provision, however, provide no mechanism for
assuring that a generic drug product's effect will be the same as that
of a pioneer drug product containing the same active ingredient.
Nothing in 21 U.S.C. 351 or in the related FDA regulations (21 C.F.R.
Parts 210-211) prohibits differences in inactive ingredients or
methods of compounding that may cause generic products to have effects
on the patient different from those of the pioneer drug.  United
States v. Premo Pharmaceutical Laboratories, supra, 511 F. Supp. at
980.  /47/ If differences between the "recipe" for a generic drug and
that for the pioneer result in a lack of bioequivalence between the
two drugs, that problem obviously is not cured by the generic drug
manufacturer's careful adherence to the generic drug recipe.  Thus,
the good manufacturing practices requirements simply are not a
substitute for premarketing review of safety and effectiveness of each
individual generic drug product.

         B. Premarketing Approval of Generic Drug Products Promotes
      Rather Than Imapirs Competition in the Marketing of Safe and
      Effective Generic Drugs

   The court of appeals (Pet. App. 9a-11a) also was incorrect in its
assumption that exempting generic drug products from the Act's "new
drug" premarketing approval requirements is necessary to effectuate
the Congressional purpose of improving competition in the drug
industry.  To the contrary, generic prescription drugs would be less
likely to compete effectively with pioneer drugs if the public were
deprived of the safeguards afforded by FDA premarketing review.

   1. It is not necessary to exempt generic drugs from the new drug
provisions of the Act in order to allow competitive marketing of safe
and effective generic drugs.  Indeed FDA has sought to minimize the
burden of filing and obtaining approval of generic drug NDAs to the
extent consistent with insuring that the public is not subjected to
unsafe or ineffective drugs.  /48/ For many generic prescription
drugs, FDA has determined that complete safety and effectiveness
studies need not be submitted by each manufacturer in order to satisfy
the requirements of 21 U.S.C. 355(d).  Instead, manufacturers of
certain generic drugs may obtain FDA approval b) submitting an
abbreviated new drug application ("ANDA").  See 21 C.F.R. 314.1(a) and
(f).  /49/ Under this procedure, the manufacturer may establish that
the generic prescription drug is safe and effective by showing that it
contains the same active ingredient as an approved new drug, and also
that the effect of the generic drug on the patient is equivalent to
that of the approved drug.  In effect, therefore, FDA relies in part
on the body of knowledge developed for the pioneer drug product in
evaluating the ANDA.  If the manufacturer of the generic drug shows
that there are no differences between the approved drug and the
"me-too" drug that will result in differences in safety or
effectiveness, the generic drug is deemed to have the requisite
evidence of safety and effectiveness.  If the other requirements are
also satisfied, the ANDA is approved.  /50/

   2. If generic drugs were not subject to premarketing approval,
however, a physician or pharmacist would have no assurance that
generic products were as safe and effective as the brand name drugs
for which they purport to be substitutes.  Therefore, as the
government's experts testified in this case (Tr. 55-57), careful
doctors and pharmacists, if they became aware that generic drugs were
not subject to premarketing review, would be deterred from prescribing
generic drugs regardless of the cost savings that might be obtained.
/51/

   Since current law prohibits the labeling of any drug with a notice
that it has (or has not) been approved by FDA, 21 U.S.C. 331(l), the
exemption advocated by respondents and adopted by the court below
would have a negative impact on sales of generic drugs -- including
those that have been shown to be safe and effective and have been
approved by FDA.  Unless the decision below is reversed, the only way
to be assured of using a safe and effective product would be for
doctors to specify and pharmacists to dispense only the pioneer.  Such
a result would be contrary to the very congressional policy of
increased competition that the court of appeals thought supported its
decision.  Moreover, it would hamper efforts by the FDA, other federal
government agencies, and state governments to foster the use of safe
and effective substitutes for more costly prescription drugs.  /52/

                              CONCLUSION

   The decision of the court of appeals should be reversed.

   Respectfully submitted.

   REX E. LEE

      Solicitor General

   WILLIAM F. BAXTER

      Assistant Attorney General

   LOUIS F. CLAIBORNE

      Deputy Solicitor General

   JERROLD J. GANZFRIED

      Assistant to the Solicitor General

   JOHN J. POWERS, III

   NANCY C. GARRISON

      Attorneys

   JEFFREY B. SPRINGER

      Deputy Chief Counsel

   DONALD O. BEERS

      Associate Chief Counsel for Enforcement

   JACQUELINE H. EAGLE

      Assistant Chief Counsel for Enforcement Food and Drug
      Administration Rockville, Md. 20857

   APRIL 1982

   /*/ In addition to respondent Generix Drug Corporation, the
defendants in the district court were Lewis Michael Orlove, Gary R.
Dubin, and Ofelia Perez, all of whom were officers or employees of
Generix.

   /1/ This case was decided by Unit B of the Fifth Circuit which, on
October 1, 1981, became the Eleventh Circuit.

   /2/ "Pet. App." refers to the Appendix to the Petition for
Certiorari filed in this case.  "J.A." refers to the joint appendix
filed in this Court.  "Tr." refers to the transcript of the hearing in
the district court on the government's motion for preliminary
injunction.  "R." refers to the district court record as transmitted
to the court of appeals.

   /3/ The authority to approve new drugs, granted by statute to the
Secretary of Health and Human Services, has been delegated to the
Commissioner of Food and Drugs.  21 C.F.R. 5.1(a)(1);  see 46 Fed.
Reg. 26052 (1981).  The introduction or delivery for introduction into
interstate commerce of a new drug for which no approved new drug
application is in effect is prohibited under 21 U.S.C. 331(d).
Violations of 21 U.S.C. 331 may be enjoined under 21 U.S.C. 332.
Persons who violate Section 331 are also subject to criminal penalties
(21 U.S.C 333), and drugs that fail to comply with 21 U.S.C. 355 may
be seized and condemned (21 U.S.C. 334).  In any of these proceedings,
the actual safety or effectiveness of the unapproved drug is not an
issue for the court and will not provide a defense.  See Weinberger v.
Hynson, Westcott & Dunning, Inc., 412 U.S. 609, 612-613 (1973);  Premo
Pharmaceutical Laboratories, Inc. v. United States, 629 F.2d 795, 803
(2d Cir. 1980).

   /4/ A drug can be "generally recognized" within the meaning of the
Act only when there is an expert consensus founded upon the type of
evidence necessary for approval of a new drug application (see page
22, infra).  Weinberger v. Hynson, Westcott & Dunning, Inc., supra,
412 U.S. at 632.

   /5/ A drug also may be excluded from the new drug approval
requirements if it comes within one of the grandfather provisions of
21 U.S.C. 321(p), not relevant here.

   /6/ The unapproved new drugs distributed by respondents included
"Goldline" products containing the following active ingredients:
allopurinol, spironolactone, spironolactone with hydrochlorothiazide,
furosemide, chlorothiazide with reserpine, amitriptyline with
perphenazine, diethylpropion hydrochloride, prochlorperazine maleate,
and chlorthalidone (R. 28 n.3).  The request for injunctive relief to
prevent distribution of unapproved new drugs, however, was not limited
to these particular drugs (ibid.).

   The complaint also alleged (J.A. 8-11, 15-17) that respondents were
violating the Act by holding for sale and distributing in interstate
commerce drugs that were adulterated within the meaning of 21 U.S.C.
351(a)(2)(B) because of failure to conform to current good
manufacturing practices as set forth in 21 C.F.R. Part 211.  Those
allegations were not directly related to the "new drug" allegations
and were resolved without trial.  Thus there is no issue before this
Court concerning the good manufacturing practices allegations.

   In separate proceedings, commenced on August 15 and 19, 1980, the
United States brought seizure actions pursuant to 21 U.S.C. 334, to
condemn more than five million dosage units of unapproved generic
prescription drugs in Generix's possession.  Although Generix moved
(without opposition) to consolidate the seizure actions with the
instant injunction action, the district court did not consolidate the
cases.  Following the decision by the court of appeals in the
injunction action, the district court granted Generix's motion for
summary judgment in the seizure actions and ordered the United States
to return the seized drugs.  On January 18, 1982, this Court stayed
the district court's order pending appeal.  United States v.
Undetermined Quantities of Articles of Drugs, No. A-617.

   /7/ R. 79-81;  see also R. 28 n.3.

   /8/ R. 106-149, 197-207, 212-224;  Tr. 26-27, 250-253.

   /9/ The quantity and delivery speed of active ingredients to the
bloodstream and thus to the site of action in the body is referred to
as "bioavailability" (Tr. 39-42;  see also 21 C.F.R. 320.1(a)).  Drugs
with similar bioavailability are considered "bioequivalent." Because
differences in bioavailability can be caused by differences in either
active or inactive ingredients, or by differences in methods of
manufacture, drugs containing the same active ingredient may not be
bioequivalent.  One of the government's expert witnesses testified as
follows about common causes of lack of bioequivalence (Tr. 83-84):

         The primary reason for this is that the solubility of the
      drug is altered, either (sic) because of the chemical nature of
      the drug, itself, which may be modified.  For example, different
      kinds of crystalline forms dissolve in different ways.  You can
      also alter the way that the drug dissolves by the excipients.
      For example, some excipients were added to the tablet to help
      the tableting process, a lubricant to help the tablet come out
      easier, are insoluble and can coat the product, itself, act as a
      raincoat, so the water can't get to the particles and doesn't
      dissolve.

         All drugs must dissolve in the gastrointestinal tract before
      they are absorbed through the membrane.  So anything that alters
      the rate of solubility, that is the dissolution rate, may
      influence whether the drug is absorbed.

         Probably 90, 95 percent of the cases of inequivalence is
      because of the excipients or the way the drug is manufactured,
      altering the solubility.

         The way that the drug is manufactured also includes things
      such as how hard you press down on the tablet to form the
      tablet.  Its been shown in scientific studies that simply the
      force of the tableting may alter the dissolution characteristics
      of that particle or that tablet.  The tablet must first break
      apart in small particles.  That's altered by both the
      ingredients and the processes of the manufacturer.  Then, these
      small particles must break down into further tiny particles
      which then go into solution.  And all of these manufacturing
      variables influence this sequence of steps.

   /10/ See also United States v. Premo Pharmaceutical Laboratories,
Inc., 511 F. Supp. 958, 962-965, 980-989 (D.N.J. 1981), in which the
district court made detailed factual findings on the dangers created
by differences between an approved prescription drug and generic
copies of that drug.

   /11/ For example, if the products used to treat high blood pressure
do not perform properly, the patient is in serious danger either from
recurrence of the high blood pressure, if absorption of the drug is
inadequate, or from toxicity if the drug is overabsorbed (Tr. 47-49).

   /12/ See United States v. Premo Pharmaceutical Laboratories, Inc.,
supra, 511 F. Supp. at 963;  Pharmadyne Laboratories, Inc. v. Kennedy,
466 F. Supp. 100, 106 (D.N.J.), aff'd on other grounds, 596 F.2d 568
(3d Cir. 1979).

   /13/ In so doing, it relied primarily on the district court
decision in Premo Pharmaceutical Laboratories, Inc. v. United States,
475 F. Supp. 52 (S.D.N.Y. 1979);  that decision was subsequently
reversed by the Second Circuit (629 F.2d 795 (1980)).

   /14/ Allopurinol, spironolactone, furosemide, chlorothiazide with
reserpine, amitriptyline, and diethylpropion hydrochloride (Pet. App.
20a).

   /15/ Those drugs contained prochlorperazine maleate and
chlorthalidone (Pet. App. 20a).

   /16/ The government's request for an injunction with respect to the
good manufacturing practice violations was held in abeyance pursuant
to agreement of the parties (Tr. 186-187).  The district court also
denied the government's request for a recall of Generix's unapproved
products (Pet. App. 30a-31a).

   /17/ The court of appeals apparently assumed that FDA approval of a
drug product means that the product's active ingredient is generally
recognized as safe and effective.  This is incorrect.  See pages 24-25
infra.

   /18/ The court also thought (Pet. App. 10a-12a) that the
requirement of Section 502(e) of the Act, 21 U.S.C. 352(e), that drugs
be identified by generic name in addition to brand name would be
inconsistent with the inclusion of the entire drug product, rather
than just the active ingredient, in the definition of "drug."

   /19/ See Br. in Opp. 5 n.7.  The absurdity of respondents' position
is graphically illustrated by the affidavit of an expert witness
submitted by Generix in opposition to the government's motion for
preliminary injunction.  J.A. 56-65.  After noting that "all of these
characteristics (inactive ingredients, manufacturing techniques,
bioavailability and bioequivalence) can affect how a drug product
performs and can therefore be said to play a role in the safety and
effectiveness of the drug" (id. at 64), the affidavit concluded
(ibid.):

         In other words, it would be possible to formulate allopurinol
      in a product in such a way that the allopurinol would never be
      released.  Under those circumstances, the product would be
      completely ineffective, but the drug -- allopurinol -- would
      still be regarded as effective.

   /20/ The most important evidence of a statute's meaning is the
statutory language itself.  International Brotherhood of Teamsters v.
Daniel, 439 U.S. 551, 558 (1979).  "Absent a clearly expressed
legislative intention to the contrary, that language must ordinarily
be regarded as conclusive." Consumer Product Safety Commission v. GTE
Sylvania, 447 U.S. 102, 108 (1980).

   /21/ Other courts have reached the same conclusion as did the
Second Circuit in Premo.  For example, in Pharmadyne Laboratories,
Inc. v. Kennedy, 466 F. Supp. 100 (D.N.J.), aff'd on other grounds,
596 F.2d 568 (3d Cir. 1979), the court agreed with the FDA that the
"new drug" term applies to specific drug products, rejecting dicta in
an earlier Third Circuit decision, United States v. Articles of Drug .
. . Lannett, 585 F.2d 575 (1978), which had suggested that some or all
generic copies of FDA-approved drugs do not themselves have to undergo
FDA premarketing clearance.  (The Third Circuit in Pharmadyne did not
address the generic drug issue, affirming the district court instead
on the ground that a court is without power to enjoin the FDA from
bringing enforcement actions;  but it suggested that differences in
inactive ingredients, at least where those differences raise safety
issues, would prohibit a generic copy from relying on the not new drug
status of the pioneer it copied.  See 596 F.2d at 571 n.6.) In two
other actions, the FDA has obtained injunctive relief against major
manufacturers of unapproved prescription drugs.  United States v.
Pharmadyne Laboratories, Inc., No. 80-1312 (D.N.J., filed May 8, 1980)
(consent decree of permanent injunction);  United States v. Premo
Pharmaceutical Laboratories, Inc., supra.

   /22/ For example, the most recent edition of the combined United
States Pharmacopoeia-National Formulary has monographs not only for
furosemide as an active ingredient but also for "furosemide injection"
and "furosemide tablets." The Pharmacopoeia of the United States of
America, Twentieth Revision/The National Formulary, Fifteenth Edition
344-345 (1980).  A monograph may exist both for an "official
substance," defined as "an active drug entity or a pharmaceutical
ingredient * * * ," and for a "dosage form," defined as the "finished
* * * preparation or product of one or more official substances
formulated for use on or for the patient." Id. at 2.

   /23/ No inconsistency is created by the fact that active
ingredients are also "drugs." Indeed, 21 U.S.C. 321(g)(1)(D) expressly
includes within the "drug" definition "articles intended for use as a
component of any article (referred to in the preceding) clauses." The
term "component" refers to active as well as inactive ingredients of a
drug (cf. 21 U.S.C. 355(b)(2)).  Therefore, a reading of Section
321(g)(1) as a whole shows that the term "drug" as defined in
subsections (A), (B), and (C) must refer to drug products and not just
active ingredients.

   /24/ The definition of "drug" in the 1906 Federal Food and Drug Act
-- the predecessor to the Federal Food, Drug, and Cosmetic Act of 1938
-- also included both drug substances and drug products.  Thus, the
1906 definition of "drug" included, "all medicines and preparations
recognized in the United States Pharmacopoeia or National Formulary
for internal or external use, and any substance or mixture of
substances intended to be used for the cure, mitigation, or prevention
of disease of either man or other animals." Ch. 3915, Section 6, 34
Stat. 769 (emphasis added).

   This definition was changed to the language contained in Section
321(g) when Congress enacted the 1938 Act.  The purpose of that change
was to expand and not to restrict the definition of the term "drug."
See S. Rep. No. 646, 74th Cong., 1st Sess. 1 (1935) ("This expansion
of the definition of the term 'drug' and the inclusion of devices are
essential if the consumer is to be protected against a multiplicity of
abuses not subject to the present law").

   /25/ 21 U.S.C. 355(b) requires that an NDA contain (emphasis

   added):

      (1) full reports of investigations which have been made to show
      whether or not such drug is safe for use and whether such drug
      is effective in use;  (2) a full list of the articles used as
      components of such drug;  (3) a full statement of the
      composition of such drug;  (4) a full description of the methods
      used in, and the facilities and controls used for, the
      manufacture, processing, and packing of such drug;  (5) such
      samples of such drug and of the articles used as components
      thereof as the Secretary may require;  and (6) specimens of the
      labeling proposed to be used for such drug.

   /26/ 21 U.S.C 355(d) defines "substantial evidence" as

      evidence consisting of adequate and well-controlled
      investigations, including clinical investigations, 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 responsibly 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.

   /27/ If the manufacturer wishes to make any change in the
composition or labeling of the approved drug, it must first submit a
supplement or amendment to the NDA.  See 21 C.F.R. 314.8.  If another
manufacturer is licensed to produce the same drug, it too must obtain
an NDA.  If evidence subsequently shows that an approved drug is
unsafe or ineffective or that the applicant has failed to maintain
required records or to correct misleading labeling, the FDA, after
opportunity for hearing, may revoke approval of the NDA.  21 U.S.C.
355(e).

   /28/ Even if a drug satisfies the general recognition criteria, it
remains a "new drug" -- and requires FDA approval -- unless it has
been used to a material extent and for a material time under other
than experimental conditions.  21 U.S.C. 321(p)(2).

   /29/ This conclusion is fully consistent with this Court's holding
in Weinberger v. Hynson, Westcott & Dunning, Inc., supra, that where
there was no substantial evidence showing the effectiveness of a
pioneer drug or of a generic copy of that drug, the FDA could conclude
that both were new drugs.  For if there are no adequate effectiveness
tests of the pioneer drug, and the manufacturer of the generic product
does not produce adequate effectiveness studies in response to a
notice of opportunity for hearing, there can be no claim that the
generic product has been shown by adequate testing to be effective.
On the other hand, because a generic product may differ from the
pioneer in bioavailability, the fact that there has been adequate
testing to show the pioneer is safe and effective does not, in itself,
demonstrate the generic product is either safe or effective.  See
Pharmadyne Laboratories, Inc. v. Kennedy, supra, 466 F. Supp. at 104
n.7;  see also United States v. Premo Pharmaceutical Laboratories,
Inc., supra, 511 F. Supp. at 968 n.6a.

   Generix is incorrect in its assertion (Br. in Opp. 22 n.17) that if
the "new drug" definition applied to products, the Court's ruling in
Hynson would have been unnecessary.  At issue in Hynson was FDA's
procedure of, in effect, declaring classes of drug products, i.e., all
generic copies related to a specific pioneer, to be "new drugs," thus
avoiding case-by-case litigation of the status of each product.  Cf.
Weinberger v. Bentex Pharmaceuticals, Inc., supra, 412 U.S. at 653.

   /30/ Generix's witness did not rebut government testimony to that
effect (see Tr. 49, 51-52, 92-93, 96-97).  Indeed, while Generix's
expert witness agreed that generic drugs should not be marketed
without testing (Tr. 224-225), he admitted that he had seen a test of
only one of the products at issue (Tr. 219), and no evidence of any
testing of Generix's drugs was introduced below.  The unapproved drugs
Generix was distributing included products manufactured by Premo
Pharmaceutical Laboratories, Inc., and Pharmadyne Laboratories, Inc.
(see United States v. Undetermined Quantities of Articles of Drugs,
stay granted by this Court, No. A-617 (Jan. 18, 1982)), companies that
subsequently have been enjoined from the manufacture of such products,
see page 15 note 21, supra.  The court that granted injunctive relief
against Premo found specifically that that company placed each of its
products on the market without completing testing that might determine
whether or not the products were bioequivalent to those drugs for
which they would be substituted.  United States v. Premo
Pharmaceutical Laboratories, Inc., supra, 511 F. Supp. at 990-991.

   /31/ This Court's understanding that a drug would not cease to be a
new drug until long after it had satisfied the requirements for FDA
approval is substantiated by the statutory structure itself:  21
U.S.C. 321(p)(2) states that general recognition based on
investigations to determine safety and effectiveness (the basis for
approval of a new drug application) is not sufficient, absent use to a
material extent and for a material time, to exempt a drug from "new
drug" status.

   It is further supported by the legislative history of the 1962
amendments.  Thus, a witness before the Senate subcommittee quoted an
FDA official as stating that, under the pre-1962 new drug provision:
"Although there may be an effective new drug application for a product
under which a drug firm is legally marketing it in interstate
commerce, until there has been a considerable volume of distribution
over a considerable period of time, it is still a new drug(;) * * *
there can be no general recognition of safety by experts without
appreciable use of the drug." Drug Industry Antitrust Act:  Hearings
on S. 1552 Before the Subcomm. on Antitrust and Monopoly of the Senate
Comm. on the Judiciary, 87th Cong., 1st Sess. 63 (1961).  This
standard was confirmed when the 1962 amendments were passed.  The
Committee report suggests that "substantial evidence" of
effectiveness, a prerequisite for approval of a new drug application,
could exist even when experts generally did not know about the
effectiveness studies or would disagree as to whether the drug was
effective.  See S. Rep. No. 1744 (Pt. 1), 87th Cong., 2d Sess. 16
(1962).

   The court of appeals' assumption that approval equals non-"new
drug" status, and thus exemption from the approval requirement, leads
to irrational results inconsistent with the statutory scheme.  For
example, if a pioneer drug were approved on one day, the generic copy
then could escape the approval requirement the next day.  The pioneer
itself would, on the date of approval, cease to be a "new drug" and
the withdrawal of approval provision of 21 U.S.C. 355(e) would be
without effect.

   /32/ A lack of knowledge about inactive ingredients and
manufacturing processes does, however, prevent expert general
recognition of a generic copy based on testing of the pioneer product,
because experts would not have adequate information to conclude the
copy would not differ in bioavailability -- and therefore in safety or
effectiveness -- from the tested pioneer drug.

   /33/ See United States v. An Article of Drug . . . Bacto-Unidisk,
supra, 394 U.S. at 798;  AMP, Inc. v. Gardner, 389 F.2d 825, 829-830
(2d Cir.), cert. denied, 393 U.S. 825 (1968);  S. Doc. No. 124, 75th
Cong., 2d Sess. (1937);  C. Dunn, Federal Food, Drug, and Cosmetic
Act, a Statement of Its Legislative Record 1316-1327 (1938).

   /34/ Generix argues (Br. in Opp. 11) that "(a) lethal chemical is
not an inactive ingredient," apparently suggesting that the "new drug"
provision as interpreted by the court of appeals would prevent a
repetition of the Elixir Sulfanilamide tragedy.  This is incorrect.

   The court of appeals held in this case that there can be no
premarketing inquiry whatsoever into properties of a drug product if
the identified active ingredient of the product is not a "new drug."
In the case of Elixir Sulfanilamide, the manufacturer did not identify
diethylene glycol, the lethal component, as an active ingredient in
its product.  In fact, of the ingredients in the product, only the
active ingredient sulfanilamide was listed on its labeling.  S. Doc.
No. 124, supra, at 2.  It follows that the manufacturer of Elixir
Sulfanilamide, under the court of appeals' interpretation of the Act,
could have marketed its product without preclearance merely because
some other sulfanilamide product had been generally recognized as safe
and effective.

   Contrary to Generix's assertion (Br. in Opp. 11) that the
legislative history of the 1938 Act never refers to diethylene glycol,
the toxic component of Elixir Sulfanilamide, as an inactive
ingredient, that history makes clear the congressional understanding
that diethylene glycol was in fact an inactive ingredient.  See S.
Doc. No. 124, supra, at 1 (Elixir Sulfanilamide:  Letter from the
Secretary of Agriculture) (emphasis added):

         The lethal effect of the "elixir" was due to its content of
      diethylene glycol, which was used as a solvent in making a
      liquid preparation of sulfanilamide, usually administered in
      tablet or powder form.  Sulfanilamide itself is a valuable drug,
      and was not responsible for the disaster.

   See generally ibid., passim;  C. Dunn, Federal Food, Drug, and
Cosmetic Act, A Statement of Its Legislative Record, supra, at
1316-1327.

   /35/ See, e.g., S. Rep. No. 1744 (Pt. 2) 87th Cong., 2d Sess. 1
(1962);  108 Cong. Rec. 14677-14680, 16316-16317, 16322-16325,
19897-19898, 19909, 22037-22038, 22047-22048 (1962).

   /36/ See H.R. Rep. No. 2464, 87th Cong., 2d Sess. 1 (1962);  S.
Rep. No. 1744 (Pt. 1), 87th Cong., 2d Sess. 8 (1962).

   /37/ 21 U.S.C. 352(e) requires that the common names of the active
ingredients and of certain inactive ingredients of a drug be stated on
the label of the drug.  This information, of course, would not be
sufficient to allow a doctor or pharmacist to determine whether a
generic drug would have the same effect on the patient as the pioneer.
 See pages 19-22, supra.

   Contrary to the court of appeals' assumption that drugs "obtain an
'official' or 'generic' name through general recognition" (Pet. App.
12a), the concept of "genreal recognition" relates only to the
definition of "new drug." It does not appear in the labeling
provisions of 21 U.S.C. 352(e), and has nothing to do with the
assignment of generic names.

   /38/ Inclusion of the established name for a drug's active
ingredient in its labeling assists doctors and pharmacists in
identifying generic equivalents and "ascertain(ing) the qualities and
specifications of the products and the competing products." S. Rep.
No. 1744 (Pt. 1), supra, at 18.  Labeling a drug with the generic name
as well as the trade name aids physicians in deciding "whether to
prescribe by the trade name upon which they have come to rely or to
prescribe the so-called generic equivalent by using the official name
or by authorizing the pharmacist to select a product bearing the
official name" (ibid.).

   /39/ Moreover, much of the discussion in the legislative history of
the need to improve competition related to proposals -- never enacted
-- that would have limited the terms of drug patents.  Proponents of
those proposals recognized that, as reported, the 1962 amendment "will
have only a very limited effect on prices * * * .  Its major result
will be to improve the quality of drugs." S. Rep. No. 1744 (Pt. 1),
supra, at 33.

   /40/ See, e.g., 108 Cong. Rec. 17366 (1962) (emphasis added):

         (E)very brand new product, and every new claim for an
      existing product, would be subject to the tests and procedures
      established in (21 U.S.C. 355).

   Contrary to the court of appeals' assertion (Pet. App. 9a), this
reference is fully consistent with -- rather than contrary to -- the
plain language and logic of the Act.

   /41/ The lower courts have also applied this basic principle in
construing the Act.  See, e.g., United States v. Naremco, Inc., 553
F.2d 1138, 1141 (8th Cir. 1977);  Upjohn Co. v. Finch, 422 F.2d 944,
947 (6th Cir. 1970);  Carter-Wallace, Inc. v. Gardner, 417 F.2d 1086,
1094-1095 (4th Cir. 1969), cert. denied, 398 U.S. 938 (1970);  United
States v. Vitasafe Corp., 345 F.2d 864, 870 (3rd Cir.), cert. denied,
382 U.S. 918 (1965).

   /42/ There is no doubt, however, that some unapproved generic drugs
are dangerous.  The Premo court found that some of the drugs Premo
made (which Generix distributed), if not bioequivalent to the pioneers
they copied, could cause death or irreversible disfigurement in
patients treated with those drugs.  511 F. Supp. at 992-993, 994-995.
See also Tr. 47-48.

   /43/ This issue was explicitly explored in United States v. Pre o
Pharmaceutical Laboratories, Inc., supra.  The court there found that
compliance with FDA's good manufacturing practice regulation would not
protect the public from drugs that were not bioequivalent.  511 F.
Supp. at 989;  id. at 976-977.

   /44/ Nor, contrary to the court of appeals' apparent assumption
(Pet. App. 13a), is the requirement of 21 U.S.C. 351(b) an adequate
substitute for premarketing approval.  That provision requires that a
drug that purports to conform to standards set out in an official
compendium in fact meet that compendium's standards.  Those standards
are not designed to assure bioequivalence.  Accordingly, compliance
with the compendial standards would not assure that a generic copy
could be safely substituted for a pioneer.  See Tr. 98-100;  see also
United States v. Premo Pharmaceutical Laboratories, Inc., supra, 511
F. Supp. at 987, 988-989, 977.

   /45/ A drug is adulterated under 21 U.S.C. 351(a)(2)(B) if the
"methods used in, or the facilities or controls used for, its
manufacture, processing, packing, or holding do not conform to or are
not operated or administered in conformity with current good
manufacturing practice to assure that such drug meets the requirements
of this chapter as to safety and has the identity and strength, and
meets the quality and purity characteristics, which it purports or is
represented to possess." See 211 C.F.R. Parts 210-211.

   /46/ As reported by the subcommittee, the bill that became the 1962
amendments "would have set up a registration system (for drug
manufacturers) which * * * would have in effect constituted a
licensing system." S. Rep. No. 1744 (Pt. 1), supra, at 12;  see S.
1552, 87th Cong., 1st Sess., as introduced by Senator Kefauver on
April 12, 1961.  The full committee deleted the licensing provision.
The congressional rejection of a "licensing" system on which
respondents (Br. in Opp. 15) rely, was a rejection of this
manufacturer licensing provision;  it does not indicate any
congressional intent to exempt generic drugs from a product-by-product
application of the "new drug" approval requirements.

   The court of appeals referred to a statement in the legislative
history of the 1938 Act that the new drug provision "is not a license
provision" (Pet. App. 9a, quoting H.R. Rep. No. 2139 (Pt. 1), 75th
Cong., 3d Sess. 9 (1938)).  This statement, which is not otherwise
explained, may refer also to the rejection of a manufacturer licensing
provision that some members of Congress had sought in 1938.  See 83
Cong. Rec. app. 2279 (1938) (remarks of Rep. Coffee).

   /47/ Indeed, as the court of appeals noted (Pet. App. 7a), the
formulation of the pioneer drug usually is a trade secret and may not
be revealed by FDA.  See 21 U.S.C. 331(j).

   /48/ Generix argues (Br. in Opp. 18-22), and the court of appeals
apparently agreed (Pet. App. 8a n.4), that FDA's interpretation of the
Act's new drug provisions is not entitled to the deference usually
afforded its interpretation of the Act (e.g., United States v.
Rutherford, supra) because it has not been consistent.  This argument
is essentially irrelevant since the plain language of the Act and its
legislative history compel the conclusion that the Act's "new drug"
requirements apply to generic drug products.

   At all events, Generix and the court of appeals have seriously
distorted the FDA's actions.  Contemporaneously with the passage of
the 1938 Act, the Secretary of Agriculture (who then had
responsibility for enforcement of the Act) promulgated a regulation
that made it clear that a drug could be considered a "new drug" if
there were any change in, inter alia, the inactive ingredients from
which it was formulated (see 3 Fed. Reg. 3161-3162 (1938)).  That
regulation stating the agency's official interpretation of the "new
drug" definition (now 21 C.F.R. 310.3(h)) has remained substantially
unchanged to the present day.

   The FDA's practice, initiated during World War II and terminated in
1968 (33 Fed. Reg. 7758 (1968)), of informing drug manufacturers that
they did not need to submit new drug applications for certain drugs
because those drugs were not "new drugs" (Pet. App. 8a n.4) was not a
statement that generic copies of approved drugs automatically would
escape "new drug" status.  Indeed, some generic copies of approved
drugs were seized and condemned as unapproved new drugs during the
time this practice was in effect.  See 40 Fed. Reg. 26142, 26143
(1975).  Arguably, the so-called "not new drug" letters reflected
FDA's understanding that experts at that time would recognize the
safety of generic products on the basis of less evidence than experts
today would require in light of developing knowledge about the
importance of inactive ingredients' effect on bioavailability.  Cf.
United States v. Western Serum Co., Inc., 666 F.2d 335, 339-341 (9th
Cir. 1982) (expert general recognition must be current).

   Moreover, to the extent "not new drug" letters indicated that
generic drug products could be marketed without FDA approval, those
letters may be viewed as inconsistent with the Act and with this
Court's decision in Weinberger v. Hynson, Westcott & Dunning, Inc.,
supra, 412 U.S. at 624.  See United States v. Articles of Drug . . .
Hormonin, 498 F. Supp. 424, 436 (D.N.J. 1980), aff'd without opinion,
No. 81-1035 (3d Cir. Sept. 15, 1981).  Even if the FDA's past practice
is considered to conflict with its present position, therefore, that
past practice binds neither it nor this Court.

   FDA's current abbreviated new drug application procedures (see
pages 40-41, infra) simplify the requisite proof of safety and
effectiveness for generic drugs, but they do not permit deviation from
the statutory requirement of premarketing approval for each drug
product, based on evidence that that drug product itself is safe and
effective.

   /49/ The ANDA process currently applies only to copies of drug
products for which the FDA has published a notice known as a Drug
Efficacy Study Implementation ("DESI") Notice.  Most, but not all, of
the unapproved drugs Generix was distributing purported to be generic
copies of drugs subject to such notices and the manufacturers
therefore could have sought approval under this simplified procedure.

   In addition, the FDA is implementing a so-called "paper NDA" policy
for post-1962 generic drugs, 45 Fed. Reg. 82052 (1980);  46 Fed. Reg.
27396 (1981).  Under that policy, applicants may rely on the
scientific literature, if it provides adequate data, to establish
safety and effectiveness of a pioneer drug.  Safety and effectiveness
of a generic drug is then established by such literature plus the
applicant's showing that its generic drug is bioequivalent to the
pioneer.  21 C.F.R. 320.22.  In an attempt to facilitate further the
approval of safe and effective generic drug products, FDA also is
exploring the posibility of authorizing use of ANDAs for copies of
drugs approved after 1962 and thus not covered by DESI notices.  See
47 Fed. Reg. 1765 (1982).

   /50/ Contrary to Generix's assertion (Br. in Opp. 3 n.5), FDA's
procedures for regulating over-the-counter (OTC) drugs are not at
issue in this case.  The government sought an injunction because of
its concern about Generix's distribution of unapproved prescription
drugs;  the evidence presented to the district court was limited to
prescription drugs;  and neither the district court nor the court of
appeals addressed the separate issue of OTC regulation.

   Nor would a holding that the Act's new drug approval procedures
apply to generic drug products invalidate FDA's current OTC drug
regulations (21 C.F.R. Part 330).  The OTC regulations themselves deal
with drug products, rather than only active ingredients, although the
analysis of OTC products is done on the basis of classes of active
ingredients.  Thus, for example, "(a)n over-the counter antacid
product" (emphasis added) that complies with the antacid monograph is
regarded by the agency as generally recognized as safe and effective
and not misbranded.  21 C.F.R. 331.1.  There is no agency finding that
any active ingredient itself is generally recognized as safe and
effective or is not a new drug.  Moreover, to the extent that there
are differences between FDA's treatment of prescription and OTC drugs,
they are warranted by practical considerations.  Lack of
bioequivalence between different OTC products containing the same
active ingredients presents less danger than a similar lack in
prescription drugs because OTC drugs, in contrast to prescription
drugs (see 21 U.S.C. 353(b)(1)), are intended for the treatment of
minor, and in many cases self-limiting, conditions.  Thus the
monographs, which limit the amount of OTC drugs' active ingredients to
levels that pose no risk of toxicity and impose standards with respect
to inactive ingredients, are a reasonable means of coping with the
necessity of regulating between 100,000 and 500,000 OTC products.  See
37 Fed. Reg. 85 (1972).  See also Weinberger v. Bentex
Pharmaceuticals, Inc., supra, 412 U.S. at 650-651.  In addition, FDA's
treatment of OTC drugs is consistent with the statute's definition of
"new drug":  experts generally require more information about
prescription drug products before determining that they are safe and
effective than those experts would require of an OTC preparation.

   /51/ See also Pharmadyne Laboratories, Inc. v. Kennedy, supra, 466
F. Supp. at 106.

   /52/ Generally, drug substitution programs, both in the states and
in the federal system, allow a physician to veto substitution.  For
example, under the federal "maximum allowable cost" regulations
implementing the Medicare and Medicaid reimbursement statutes, a
physician may, by so stating on his prescription, veto substitution,
45 C.F.R. 19.3(a)(3).  Physicians may be expected to veto substitution
where they cannot be assured that all generic copies of the products
they are prescribing have been approved by FDA.  For a discussion of
state substitution programs and the effect of the generic "new drug"
issue on those programs, see Pharmadyne Laboratories, Inc. v. Kennedy,
supra, 466 F. Supp. at 106.  Cf. Note, Consumer Protection and
Prescription Drugs:  The Generic Drug Substitution Laws, 67 Ky. L.J.
384 (1978-1979).