9/1 KG CONTAINERS, MORE OR LESS, OF AN ARTICLE OF DRUG FOR
VETERINARY USE, AND SCHUYLER LABORATORIES, INC., PETITIONERS V. UNITED
STATES OF AMERICA

   No. 88-614

   In the Supreme Court of the United States

   October Term, 1988

   On Petition For A Writ Of Certiorari To The United States Court Of
Appeals For The Seventh Circuit

   Brief For The United States In Opposition

           TABLE OF CONTENTS
   Question Presented
   Opinions Below
   Jurisdiction
   Statement
   Argument
   Conclusion

                            OPINIONS BELOW

   The opinion of the court of appeals (Pet. App. 1a-10a) is reported
at 854 F.2d 173.  The opinion of the district court (Pet. App.
11a-24a) is reported at 674 F. Supp. 1344.

                             JURISDICTION

   The judgment of the court of appeals was entered on July 27, 1988.
A petition for a rehearing was denied on September 6, 1988 (Pet. App.
26a).  The petition for a writ of certiorari was filed on October 12,
1988.  The jurisdiction of this Court is invoked under 28 U.S.C.
1254(1).

                          QUESTION PRESENTED

   A regulation promulgated under the Federal Food, Drug, and Cosmetic
Act provides in relevant part that a drug in a bulk package shall not
be exempt from the labeling requirements of the Act if it is intended
for use in the manufacture of a "new drug" unless certain requirements
are met.  The question presented is whether that regulation is valid
as applied to bulk packages of drugs to be distributed in interstate
commerce to veterinarians.

                               STATEMENT

   1. a. To protect the food supply and the public against potentially
dangerous residual effects from the use on animals of drugs that have
not been proved safe and effective, and to protect the animals
themselves, the Federal Food, Drug, and Cosmetic Act (FDCA or Act), 21
U.S.C. (& Supp. IV) 301 et seq., establishes a system of premarketing
approval for new animal drugs.  21 U.S.C. 360b;  Tri-Bio Laboratories,
Inc. v. United States, 836 F.2d 135, 138 (3d Cir. 1987), cert. denied,
No. 87-1804 (Oct. 3, 1988);  United States v. An Article of Drug
Consisting of 4,680 Pails (Neo-Terra), 725 F.2d 976, 978 (5th Cir.
1984).  /1/ With certain exceptions not relevant here, a drug is a
"new animal drug" unless it is generally recognized by qualified
experts as safe and effective for the conditions prescribed,
recommended, or suggested in its labeling.  21 U.S.C. 321(w)(1);
Neo-Terra, 725 F.2d at 980.  The FDCA prohibits the introduction into
interstate commerce of a new animal drug unless the Food and Drug
Administration (FDA) has approved a new animal drug application (NADA)
for it.  21 U.S.C. 360b(a)(1)(A);  Neo-Terra, 725 F.2d at 980.  The
predistribution approval requirement applies equally to prescription
and over-the-counter drugs.  The FDA ordinarily approves only finished
drug products that are formulated and packaged for use essentially "as
is" by the ultimate user, whether a practitioner or layman;  approval
is not granted for active bulk ingredients per se.  See 21 C.F.R.
514.1(b)(4);  cf. United States v. Generix Drug Corp., 460 U.S. 453
(1983).  Unapproved new animal drugs are deemed by the Act to be
adulterated and are subject to seizure.  21 U.S.C. 360b(a)(1)(A),
351(a)(5), 331-334.

   The sponsor of a new animal drug, ordinarily a drug or animal feed
company, has the burden of proving that a drug meets all criteria for
approval.  United States v. Colahan, 811 F.2d 287, 292 (6th Cir.
1987), cert. denied, No. 86-1783 (Oct. 5, 1987);  Rhone-Poulenc, Inc.,
Hess & Clark Division v. FDA, 636 F.2d 750, 752 (D.C. Cir. 1980).  To
obtain the FDA's approval, the sponsor must prove the safety and
effectivenes of the drug on the basis of scientific evidence,
including adequate and well-controlled clinical studies.  See, e.g.,
Warner-Lambert Co. v. Heckler, 787 F.2d 147, 150-151 (3d Cir. 1986).
If a drug is to be used in food-producing animals, the sponsor must
prove that use of the drug will not leave harmful drug residues in
meat, milk, or eggs.  21 U.S.C. 360b(b)(1), (7) and (8),
360b(d)(1)(A), (B), and (H), and (d) (2).  As part of the NADA
approval process, the FDA determines under what conditions a drug may
be used, e.g., whether it may be administered only to animals that do
not become a part of the food supply, and whether it may be marketed
over-the-counter or must be specified in the labeling of the drug.
See, e.g., 21 U.S.C. 360b(b)(6) and (d).  /2/

   b. Congress has required that all animal drugs marketed in
interstate commerce bear "adequate directions for use." 21 U.S.C.
352(f)(1).  This labeling requirement applies to all drugs, including
"bulk drugs," i.e., drugs intended for use as components of finished
drug products.  21 U.S.C. 321(g)(1)(D).  Drugs not properly labeled
are "deemed to be misbranded" as a matter of law, 21 U.S.C. 352, and
are subject to seizure and other regulatory action.  21 U.S.C. (&
Supp. IV) 331-334.

   A proviso to 21 U.S.C. 352(f) authorizes the FDA to exempt a drug
from the labeling requirement when imposition of the requirement is
"not necessary for the protection of the public health." 21 U.S.C.
352(f);  see United States v. Ellis Research Laboratories, Inc., 300
F.2d 550, 552 (7th Cir.), cert. denied, 370 U.S. 918 (1962) ("Unless
the (article) falls within the scope of the exemption in the
regulations * * *, it is not exempt from (the) labeling
requirement().").  /3/ Thus, the question of an exemption turns, in
the first instance, on the FDA's scientific judgment as to whether and
under what conditions adequate directions for use are unnecessary for
the public health.  Pet. App. 4a-5a.  /4/

   Because bulk drugs are not intended for use without further
processing, the FDA has determined that under certain circumstances it
is unnecessary for them to bear adequate directions for use.  In 1952,
the FDA adopted a regulation for such drugs, 21 C.F.R. 201.122 (the
labeling regulation).  Under that regulation, bulk drugs can be
exempted from the requirement of 21 U.S.C. 352(f)(1) if they are
intended for processing, repacking, or use in the manufacture of
another drug, and are labeled accordingly.  By its terms, however (and
with certain exceptions not relevant here), the exemption does not
apply to a bulk drug intended for use in a finished drug product that
must itself be approved by the FDA, but does not yet have that
approval, i.e., the finished drug product must not be an unapproved
"new drug" or "new animal drug." Such a finished drug would be
adulterated under the FDCA, and it could not bear adequate directions
for use or qualify for an exemption from that requirement.  Thus, a
bulk drug supplier who wants to take advantage of the labeling
exemption must identify a specific NADA approval for the use of the
bulk drug and may deliver the drug only to the application holder.  21
C.F.R. 201.122(a).  See also 21 C.F.R. 514.1(b)(5).  The labeling
regulation applies to all bulk drugs.  It does not exempt bulk drugs
that will be manufactured into an unapproved new animal drub by a
veterinarian, and no other regulation provides such an exception.

   2. a. On July 3, 1986, the United States filed this civil seizure
action under the FDCA, 21 U.S.C. 334, to condemn 52 lots of bulk drugs
in the possession of petitioner Schuyler Laboratories, Inc.
(hereinafter petitioner).  Pet. App. 2a.  The drugs were being held by
Schuyler for sale to veterinarians, who would compound them into
finished drug products for use in treating animals.  /5/ The complaint
alleged that all 52 lots of the bulk drugs were misbranded because
they did not bear adequate directions for use, as required by 21
U.S.C. 352(f)(1).  /6/

   There was no dispute that the drugs failed to bear adequate
directions for use;  in fact, the drugs bore no directions at all.
Pet. App. 3a, 16a.  The only question involved the applicability of
the FDA's labeling exemption, 21 C.F.R. 201.122, to the bulk drugs,
and the validity of that regulation as applied.  Schuyler claimed that
the regulation was invalid as applied to the seized drugs, on the
ground that it impermissibly regulated the practice of veterinary
medicine.

   b. The district court granted Schuyler's motion for summary
judgment.  Pet. App. 14a-24a.  The court held that the drugs were not
misbranded since, in the court's view, the regulation was invalid
insofar as the denial of an exemption applied to the distribution of a
bulk drug to a veterinarian.  Id. at 19a-23a.  The court held that
portion of the regulation invalid as applied on the ground that the
FDA cannot require that drugs compounded by veterinarians be subject
to approval by the agency.  Id. at 19a-20a, 22a-23a.

   c. The court of appeals reversed.  Pet. App. 1a-10a.  It ruled that
the labeling regulation did not improperly interfere with the practice
of veterinary medicine.  Id. at 5a-8a.  Although the FDCA contemplated
that States would continue to determine whether a medical practitioner
"had selected wisely from among methods of treatment," "(n)othing in
the history or structure of the Act permits drugs deemed ineffective
or dangerous by the FDA to be available for use." Ibid. (citing United
States v. Rutherford, 442 U.S. 544 (1979)).  That distinction was
sensible, the court explained, because "no individual veterinarian
will possess complete knowledge of the efficacy of a novel drug
compound -- let alone of its persistence in the food chain." Id. at
6a.  The court also rejected petitioner's claim that, because
veterinarians are exempt from the registration and inspection
provisions of the FDCA when they compound medicines, the FDA's
labeling regulation unlawfully intrudes into their medical practice.
That argument, the court explained, rests on the erroneous assumption
that a veterinarian is entitled to obtain any drug, even one not
approved by the FDA.  The limited exemption of practitioners from
certain provisions of the FDCA does not entitle a veterinarian to
obtain and use adulterated or mislabeled drugs.  Id. at 7a.  /7/

                               ARGUMENT

   Petitioner claims that FDA's labeling regulation improperly
interferes with the practice of veterinary medicine by depriving
veterinarians of drugs they believe necessary to treat diseases in
animals.  The court of appeals correctly rejected that claim.  The
FDA's labeling regulation is consistent with the text and structure of
the FDCA, and it serves the Act's public health goals by channeling
bulk animal drugs to uses in finished drugs that have been
demonstrated to be safe and effective.  Petitioner's interpretation of
the FDCA, by contrast, would permit a drug manufacturer to market all
drugs, including prescription drugs, outside the Act's elaborate
approval mechanism.  That result would turn on its head the system
adopted by Congress to protect the public against the effect of
unapproved new animal drugs on the food supply, and to protect the
animals themselves.  Accordingly, because the decision below is
correct and does not conflict with any decision of this Court or of
any other court of appeals, review by this Court is not warranted.

   1. Congress has authorized the FDA to promulgate regulations
exempting drugs from the requirement that labeling bear "adequate
directions for use" if the agency finds that the requirement is "not
necessary for the protection of the public health." 21 U.S.C. 352(f).
Since that provision is "an express delegation of authority to the
agency to elucidate a specific provision of the statute by
regulation," the FDA's regulation cannot be set aside unless it is
"arbitrary, capricious, or manifestly contrary to the statute."
Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837, 843-844 (1984) (footnote
omitted).  The agency's labeling regulation easily passes that test.

   a. The FDCA establishes a comprehensive mechanism regulating the
distribution of animal drugs to ensure that finished new animal drug
products not demonstrated to be safe and effective will not be
administered.  Thus, a new animal drug cannot be marketed unless it is
approved by the FDA, and to obtain the FDA's approval a drug
manufacturer must prove, on the basis of adequate and well-contolled
studies by qualified experts, that the drug is safe and effective for
all uses recommended or suggested in the labeling, and that it will
not cause harmful residues in meat, milk, or eggs.  Pages 1-3, supra.

   The FDA's labeling regulation plays an integral role in that
process.  It ensures that distributors like petitioner cannot
circumvent the approval requirement by distributing bulk drugs to
third parties who will thereafter create unapproved new drug products.
 See DeFreese v. United States, 270 F.2d 730, 736 (5th Cir. 1959),
cert. denied, 362 U.S. 944 (1960) (bulk prescription drugs are not
exempt from the labeling requirements of 21 U.S.C. 353(b) if the FDA
has not exempted them).  Cf. United States v. Rutherford, 442 U.S. at
551-559.  Moreover, nothing in the legislative history of the Act
suggests that a drug manufacturer or distributor may distribute
misbranded or adulterated bulk drugs, or drugs that are deemed
dangerous or ineffective by the FDA, simply because the recipient is a
veterinarian.

   b. Petitioner argues (Pet. 12-15) that Congress has implicitly
exempted veterinarians (and therefore those who manufacture and
distribute drugs destined for them) from the premarketing approval
requirement, because Congress has exempted veterinarians and other
medical practitioners from the registration and inspection provisions
of the FDCA.  21 U.S.C. 360(g)(2), 374(a)(1)(B).  As the court of
appeals explained (Pet. App. 7a-8a), however, those limited exemptions
have no application here.  Veterinarians may use and compound, without
registration, only those drug ingredients they may lawfully acquire,
and they may not lawfully acquire misbranded bulk animal drugs.  The
registration and inspection exemptions do not justify the distribution
and compounding of drugs when doing so violates other provisions of
the FDCA.  In fact, one of the reasons why Congress allowed
practitioners to compound finished drug products is that the FDCA
forbids drug manufacturers and distributors from marketing adulterated
or misbranded components of finished drug products.  The
interpretation of the Act adopted by the court of appeals therefore
gives effect to both those limited exemptions and the premarketing
approval provisions of the FDCA.  /8/

   There is no justification for creating an implicit exception to the
requirements of the FDCA for the distribution of bulk animal drugs to
veterinarians.  Contrary to the assertions of petitioner and amici,
the fact that veterinarians exercise professional judgment in treating
animals is not a sufficient basis for inferring that Congress has
exempted them from the limitations otherwise applicable to the
distribution of new animal drugs.  In fact, in 1962, when it added the
efficacy requirement to the premarketing approval process, Congress
concluded that the determination whether a drug is effective cannot
rest on the knowledge and experience of individual physicians.  As
this Court noted in Hynson, "(t)he hearings underlying that 1962 Act
show a marked concern that impressions or beliefs of physicians, no
matter how fervently held, are treacherous." 412 U.S. at 619 (footnote
omitted).  See also Warner-Lambert Co., 787 F.2d at 156 (in the 1962
amendments Congress rejected the notion "that individual physicians
should be left to decide whether particular drugs were effective").
Instead of leaving to the judgment of individual practitioners what
new drugs may be distributed, Congress has established an elaborate
approval process for new human and animal drugs and prohibited the
distribution of such drugs unless they have been proved safe and
effective.  Drug manufacturers and distributors are not exempt from
that process when they distribute new animal drugs to veterinarians.

   There is also no merit to petitioner's argument (Pet. 10-11) that
restricting the drugs veterinarians can receive improperly interferes
with the practice of veterinary medicine.  As the court of appeals
explained (Pet. App. 5a), the FDA may legitimately restrict the sale
of drugs to or by practitioners pursuant to its statutory authority to
prohibit the distribution of new human or animal drugs that have not
been proved to be safe and effective.  For example, in United States
v. Rutherford, supra, this Court held that the FDCA does not permit
physicians to obtain laetrile for use in terminally ill cancer
patients without the FDA's prior approval of that drug.  /9/ See also
United States v. Evers 643 F.2d 1043, 1048 (5th Cir. 1981) (stating
that the FDCA was plainly intended to control the availability of
drugs for prescription or use by practitioners);  United States v.
Articles of Drug, 625 F.2d 665, 675 (5th Cir. 1980);  Rutherford v.
American Medical Ass'n, 379 F.2d 641, 643 (7th Cir. 1967), cert.
denied, 389 U.S. 1043 (1968) (rejecting a request by a physician and
his patients for an injunction against the FDA and others from
interfering with the distribution of an unapproved cancer-treatment
drug);  cf. Pharmaceutical Mfrs. Ass'n v. FDA, 484 F. Supp. 1179, 1188
(D. Del.), aff'd, 634 F.2d 106 (3d Cir. 1980) ("The fact that the
practice of medicine is an area traditionally regulated by the states
does not invalidate those provisions of the Act which may at times
impinge on some aspect of a doctor's practice.").  For years the FDA,
under statutory authority, has required prescription drugs to be
subject to the new drug approval process, /10/ and virtually all major
prescription drugs used or prescribed by practitioners have been
approved by FDA.  See, e.g., 47 Fed. Reg. 46625 (1982).  If petitioner
were correct, the FDA's approval system for both human and animal
drugs would be an unlawful infringement on the practice of medicine.
No case supports such a proposition, and the authority is to the
contrary.  See United States v. Ellis Research Laboratories, Inc., 300
F.2d 550, 552-553 (7th Cir.), cert. denied, 370 U.S. 918 (1962)
(holding that licensed practitioners are not per se exempt from the
adequate directions for use provisions of the FDCA).

   The agency's construction of the FDCA is fully consistent with its
underlying purpose of protecting the public health.  See United States
v. An Article of Drug * * * Bacto-Unidisk, 394 U.S. 784, 798 (1969).
The unrestricted distribution of bulk drugs would expose the public to
the risk of harmful residues in food, since none of the finished
animal drug products compounded by veterinarians will have been
subjected to the stringent testing requirements set forth in the Act
to determine what (if any) residues occur in edible food products.
For example, during the approval process for a new animal drug that is
to be used in food animals, the FDA establishes the withdrawal time
/11/ based on studies done with the finished drug product that will be
marketed if the FDA approves the NADA.  An approved drug product is
formulated and manufactured in a particular way;  it contains
specified inactive ingredients, as well as an active ingredient
obtained from a particular source;  and it is manufactured under
specified conditions.  See, e.g., 21 C.F.R. 514.1(b)(4)-(7).
Differences in any of those factors, especially in the choice of
inactive ingredients, can significantly affect the amount and kind of
drug residue that occurs in the food the public consumes.  /12/ It is
for such reasons that the FDCA requires that each individual drug
product be tested to determine whether it is safe as well as effective
in its finished form.

   Petitioner's interpretation of the statutory scheme, by contrast,
would expose the public to serious health risks.  Under the procedure
advocated by petitioner, each veterinarian would be free to use any
inactive ingredient he chooses, to compound any drug in any manner he
wishes, and to establish his own withdrawal times, if any.  As the
court of appeals recognized, "no individual veterinarian will possess
complete knowledge of the efficacy of a novel drug compound -- let
alone of its persistence in the food chain." Pet. App. 6a.  This case
illustrates the nature of those risks.  Several of the drugs that are
the subject of this action fall into categories found to cause cancer
in test animals.  Ibid.  Those drugs, accordingly, present a risk of
cancer to humans if residues are found in food.  /13/

   Petitioner asserts (Pet. 6-7) that veterinarians need bulk drugs to
treat otherwise untreated diseases.  That is a policy question for
Congress and the FDA to decide.  Moreover, petitioner's claim is
undercut by its admission (Pet. 2) that many of the drugs seized in
this case are "common, well-known products," thus suggesting that the
motivation for the use of many bulk drugs may be economic, not
therapeutic.

   Finally, petitioner argues (Pet. 16-18) that the decision below is
inconsistent with the Virus-Serum-Toxin Act (VSTA), 21 U.S.C. (& Supp.
IV) 151-159.  Petitioner did not raise that claim below, but it lacks
merit in any event.  The VSTA is an entirely separate law and supplies
no assistance in interpreting the provisions of the FDCA.  If
anything, that Act supports the court of appeals' decision.  The VSTA
exempts biologics prepared by veterinarians from the Act's
premarketing approval requirements by exempting such products from the
licensing provisions that apply to other biologics.  21 U.S.C. (Supp.
IV) 154a.  That provision shows that Congress knows how to exempt
veterinarians from premarketing approval requirements when it wishes
to do so, and it has not done so in the case of bulk animal drugs.

   c. The FDA's construction of the FDCA is entitled to deference.
The labeling regulation was adopted in 1952, and the agency has for
many years construed the Act to prohibit the distribution of a bulk
drug that is used to create an unapproved new animal drug.  See FDA
Compliance Policy Guide Section 7125.10 (July 13, 1976), quoted at
Pet. App. 7a ("(V)eterinarians may use in the compounding of
prescriptions for their private practice whatever bulk drugs or other
pharmaceuticals they may lawfully purchase.") (emphasis added).  /14/
Neither the labeling regulation nor any other in the intervening years
has made an exception for drugs sold to practitioners.  Moreover,
deference is particularly appropriate here, since the Act delegates
authority to the FDA to protect the public health, and the FDA's
judgment whether labeling is necessary for that purpose is "within its
area of special expertise, at the frontiers of science." Baltimore Gas
& Elec. Co. v. NRDC, 462 U.S. 87, 103 (1983).  See also Young v.
Community Nutrition Inst., 476 U.S. 974, 981 (1986).

   In sum, petitioner's construction of the Act not only would risk
contamination of the food supply but also would undermine the FDA's
entire system for regulating bulk drugs, regardless of whether the
drugs are intended for use in the manufacture of human or veterinary
drugs, or whether the finished products are intended for prescription
or over-the-counter use.  Section 201.122 applies in each
circumstance.  The FDA has properly exercised its authority to
regulate bulk drugs early in the distribution chain in order to
minimize the risk that consumers will be exposed to adulterated and
misbranded finished drug products.

   2. There is no conflict among the circuits on the question
presented by this case.  No other court of appeals has considered
whether the labeling exemption in 21 C.F.R. 201.122 is within the
FDA's statutory authority, and only one other district court has
considered that issue.  United States v. Algon Chemical Inc., 689 F.
Supp. 394 (D.N.J. 1988), appeal pending, No. 88-5478 (3d Cir. argued
Jan. 9, 1989), reprinted at Pet. App. 34a-44a.  The district court in
that case relied on the district court's decision in this case (Pet.
App. 41a-43a), which was reversed by the court of appeals.  A conflict
between a court of appeals and a district court, however, does not
warrant review by this Court.

   There is no conflict between the other decisions cited by
petitioner (Pet. 19-22) and the court of appeals' decision in this
case.  For example, petitioner errs in relying on excerpts from Chaney
v. Heckler, 718 F.2d 1174, 1179-1182 (D.C. Cir. 1983), rev'd on other
grounds, 470 U.S. 821 (1985).  That case involved the use by
physicians of drugs that had been approved by the FDA for certain uses
but not for the specific use -- the administration of lethal
injections to condemned prisoners.  By contrast, this case involves
the use of unapproved drugs.  Moreover, the court of appeals held in
that case that the FDA had the authority to limit the uses that a
physician could make of an approved drug.  718 F.2d at 1179-1182.
United States v. Evers, 643 F.2d 1043 (5th Cir. 1981), also relied on
by petitioner, held that a physician did not violate 21 U.S.C. 352(f)
and 21 C.F.R. 201.5 by distributing a drug to his patients.  But the
case is not on point because the court there expressly held that,
since the drug was a prescription drug prescribed and dispensed by a
licensed physician, it was exempted from 21 U.S.C. 352(f)(1) under
provisions not relevant here.  643 F.2d at 1051, 1053.  Finally,
Pharmaceutical Mfrs. Ass'n v. FDA, supra, actually supports the
judgment below:  it upheld an FDA regulation, promulgated in part to
enforce the labeling provisions of 21 U.S.C. 352(a) and (f), that
required physicians and pharmacists to supply patients with certain
information when drugs containing estrogen were prescribed for them.
The court expressly rejected the claim that the regulation interfered
with the practice of medicine.  484 F. Supp. at 1184-1185.  /15/

                              CONCLUSION

   The petition for a writ of certiorari should be denied.

   Respectfully submitted.

   CHARLES FRIED

      Solicitor General

   JOHN R. BOLTON

      Assistant Attorney General

   ROBERT S. GREENSPAN

   LAWRENCE G. MCDADE

      Attorneys

   THOMAS SCARLETT

      Chief Counsel

   RICHARD E. GEYER

      Attorney Food and Drug Administration

   JANUARY 1989

   /1/ Section 201(g) of the FDCA defines "drugs" to include
veterinary drugs.  21 U.S.C. 321(g).  The Act also establishes a
similar system for human drugs.  21 U.S.C. (& Supp. IV) 355;
Weinberger v. Hynson, Westcott & Dunning, Inc., 412 U.S. 609, 613
(1973).

   /2/ The FDA publishes in the Code of Federal Regulations the
conditions under which an approved new animal drug may be used.  See
21 C.F.R. Pt. 500 et seq.

   /3/ Although Ellis Research Laboratories and several other cases
cited in this brief concerned medical devices, not drugs, those cases
are fully applicable here, since 21 U.S.C. 352(f) imposes the same
labeling requirement on drugs as on devices.

   /4/ The FDA has the authority to establish conditions on the grant
of an exemption from the labeling requirement.  See United States v.
El-O-Pathic Pharmacy, 192 F.2d 62, 75 (9th Cir. 1951) (prescription
drugs);  Arner Co. v. United States, 142 F.2d 730, 736 (1st Cir.),
cert. denied, 323 U.S. 730 (1944) (bulk drugs).

   /5/ "Compounding" refers to the steps taken to prepare a finished
drug product from an active ingredient.  An example is the preparation
of an injectable drug from an active ingredient in powder form.  See
50 Fed. Reg. 27018 (1985).

   /6/ The complaint also alleged that five lots were adulterated
since they consisted of certifiable antibiotic animal drugs that could
not be marketed without the FDA's approval (21 U.S.C. 321(w)(3),
351(a)(5), 360b(n)) and because neither Schuyler nor any of its
customers had obtained the requisite approval.  The only issue in this
respect was whether the antibiotic drugs were intended for animal use
in their bulk form, because there was no dispute that the drugs had
not received FDA approval.  Congress has since deleted 21 U.S.C.
321(w)(3) from the FDCA, however, see the Generic Animal Drug and
Patent Term Restoration Act, Section 107(a)(1), Pub. L. No. 100-670
(Nov. 16, 1988), and this allegation is not in issue.

   /7/ The district court also found that the regulation was
unreasonable because it placed on the distributor of bulk drugs what
the court believed was an "impossible" burden of proving that bulk
drugs will be used in a lawful manner by its customers.  Pet. App.
21a-22a.  The court of appeals rejected that conclusion, since a drug
supplier can simply ask the recipient whether it possesses an approved
NADA and can also examine the list of approvals published in the
Federal Register.  See page 3 note 2, supra.  Petitioner has not
renewed in this Court its claim that it is impossible to comply with
the regulation.

   /8/ As the court below stated (Pet. App. 9a):  "The effect of
Section 352(f) and Section 201.122 is that ingredients that can be
used to produce 'new' drugs may be sold only to firms that hold
approved (or have filed) new animal drug applications.  The FDA
carefully scrutinizes the activities of these manufacturers.  This is
a sensible result in light of the structure of the statute."

   /9/ Although the Court did not discuss whether the laetrile was in
finished or bulk form, the difference is inconsequential.  As the
Rutherford Court stated with respect to other unapproved remedies for
terminal patients, if the ruling had been limited to finished drugs,
the market for bulk laetrile would not long have been overlooked by
inventive minds.  See 442 U.S. at 557-558.

   /10/ When Congress required the approval of new drugs and new
animal drugs under 21 U.S.C. 355 and 360b, it contemplated that the
FDA would have authority to approve prescription as well as
over-the-counter drugs.  For example, 21 U.S.C. 353(b), which
establishes the criteria for the dispensing of human drugs, explicitly
refers to prescription drugs that must otherwise be labeled as
required by 21 U.S.C. 352(f).  See 21 C.F.R. 201.105(c)(2);  United
States v. Colahan, 635 F.2d 564 (6th Cir. 1980), cert. denied, 454
U.S. 831 (1981).  Congress has recently codified the requirements for
veterinary prescription drugs.  See the Generic Animal Drug and Patent
Term Restoration Act, Section 105, Pub. L. 100-670.  The FDA has
approved a large number of animal drugs that are so restricted, as
shown in the approval regulations that are published in 21 C.F.R. Pt.
520 et seq.  The drugs are approved in finished form and are subject
to detailed labeling and other requirements, including labeled
directions and conditions for use.  21 C.F.R. 201.105.  Section
201.100 has similar labeling requirements for human prescription
drugs.

   /11/ The withdrawal time is the length of time prior to slaughter
(or marketing of milk or eggs) for which use of the drug is to be
discontinued in order to ensure that no harmful residue will occur in
edible products.

   /12/ See 21 C.F.R. 514.1(b)(4)-(8);  50 Fed. Reg 27016 (1985);
Generix, 460 U.S. at 455-456;  United States v. Undetermined
Quantities of Various Articles of Drugs * * * Equidantin
Nitrofurantoin Suspension, 675 F.2d 994, 1001 (8th Cir. 1982), cert.
denied, 460 U.S. 1051 (1983);  United States v. Premo Pharmaceutical
Laboratories, Inc., 511 F. Supp. 958, 963-965 (D.N.J. 1981).  These
cases explain how differences in a drug's actions can be caused by
differences in ingredients and formulations.  The tragedies that can
result from the use of drugs that are similar to approved drugs, but
are not themsleves approved, and from the use of seemingly innocuous
but unapproved inactive ingredients, are explained in Pharmadyne
Laboratories, Inc. v. Kennedy, 466 F. Supp. 100, 105-106 (D.N.J.),
aff'd, 596 F.2d 568 (3d Cir. 1979), and Equidantin, 675 F.2d at 998.

   /13/ The FDA has withdrawn existing approvals for finished drugs
that contain dimetridazole, 52 Fed. Reg. 25312 (1987), and has
proposed to withdraw approvals for finished nitrofuran products
(including nitrofurazone) because of the risk of residue in food.  49
Fed. Reg. 34965 (1984).  Further, one of the sulfonamides (sulfas) has
recently been found to cause cancer in test animals, 53 Fed. Reg.
15886 (1988), and illegal residues of sulfas have been found on a
continuing basis in swine.  See 50 Fed. Reg. 20796 (1985).  See also
21 C.F.R. 510.450(a)(1) (concerning residues of sulfas).

   The FDA has also found that drugs in another category among those
that were the subject of this action -- antibiotics -- are new animal
drugs, since those drugs are particularly capable of causing injurious
drug residues in meat, milk, and eggs.  See 21 C.F.R. 510.110;
Rhone-Poulenc, 636 F.2d at 750 (an example of the harmful residue that
can occur in human food as a result of animal drug use).

   /14/ Since 1952, the FDA's bulk drug exempting regulation has
contained a condition that the finished drug product not be an
unapproved "new drug." 21 C.F.R. 1.106(1) (promulgated July 25, 1952,
17 Fed. Reg. 6818).  The FDA has regulated bulk drugs for many years
(see, e.g., Arner Co. v. United States, 142 F.2d 730, 734-736 (1st
Cir.), cert. denied, 323 U.S. 730 (1944), including bulk drugs
intended for use by veterinarians.  See, e.g., United States v.
Articles of Drug * * * 17 1200-Gram Drugs * * * Sulfachlorpyridazine,
Civ. No. F74155 (E.D. Cal. Feb. 9, 1977);  FDA Compliance Policy Guide
Section 7125.10, which has been in effect at least since 1976.

   /15/ Grinspoon v. DEA, 828 F.2d 881 (1st Cir. 1987), cited by

petitioner (Pet. 21-22), is not remotely relevant.  The question there
involved the meaning of a statutory requirement for classifying a
substance as a Schedule I narcotic under the Controlled Substances
Act, 21 U.S.C. 811-812.  The court held that the fact that the FDA has
not approved a substance does not automatically render it a controlled
substance, since the FDA may not approve a substance for reasons
having nothing to do with its medical use.  828 F.2d at 887.