Opinion ID: 388200
Heading Depth: 1
Heading Rank: 3

Heading: the government's application of the act, or, why the

Text: STATUTE DOES NOT FIT THE FACTS 22
23 after Shipment in Interstate Commerce 24 The Act was intended, inter alia, to keep misbranded drugs out of the channels of interstate commerce. The flow of commerce begins with the manufacturer of the drug and ends with the consumer, that is, the patient. Accordingly, section 301 of the Act is designed to prevent misbranding at each stage of the distribution process. Paragraph (k) of section 301 deals with one stage of that process: the period during which a drug is held for sale after shipment in interstate commerce. As the Supreme court explained in United States v. Sullivan, 332 U.S. 689, 68 S.Ct. 231, 92 L.Ed. 297 (1948): 25 (The statute's) purpose was to safeguard the consumer by applying the Act to articles from the moment of their introduction into interstate commerce all the way to the moment of their delivery to the ultimate consumer. Section 301(a) forbids the introduction or delivery for introduction into interstate commerce of misbranded or adulterated drugs; § 301(b) forbids the misbranding or alteration of drugs while in interstate commerce; and § 301(c) prohibits the receipt in interstate commerce of any misbranded or adulterated drug, and the delivery or proffered delivery thereof for pay or otherwise. But these three paragraphs alone would not supply protection all the way to the consumer. The words of paragraph (k) while such article is held for sale after shipment in interstate commerce apparently were designed to fill this gap and to extend the Act's coverage to every article that had gone through interstate commerce until it finally reached the ultimate consumer. 26 332 U.S. at 696-97, 68 S.Ct. at 335-36. See also Kordel v. United States, 335 U.S. 345, 351, 69 S.Ct. 106, 110, 93 L.Ed. 52 (1948). 27 The gap which section 301(k) was designed to fill arises when a drug which has already been transported in interstate commerce is misbranded by a person who neither shipped nor received the drug in interstate commerce. As the House Committee on Interstate and Foreign Commerce explained in its report on this section of the Act: 28 In order to extend the protection of consumers contemplated by the law to the full extent constitutionally possible, paragraph (k) has been inserted prohibiting the changing of labels so as to misbrand articles held for sale after interstate shipment. 29 H.R.Rep.No. 2139, 75th Cong., 3rd Sess. 3 (1938). Accordingly, the Supreme Court held in United States v. Sullivan, supra, that a retail druggist who had purchased correctly labeled drugs from a wholesaler in the same state and then removed the labels himself had misbranded the drugs under section 301(k), even though the wholesaler who had received the drugs in interstate commerce had not itself misbranded them. Section 301(k) extends the Act's protection to the entire distribution process for drugs moving in interstate commerce by covering what is often the final stage in that process: the distribution by a person not himself a party to the interstate transportation of the drug. 30 This final stage of the distribution process, where drugs are held for sale after shipment in interstate commerce, takes on many different forms. The statute has been construed to cover situations in which the drugs are held by a retailer, United States v. Sullivan, supra; a wholesaler, DeFreese v. United States, 270 F.2d 730 (5th Cir. 1959), cert. denied, 362 U.S. 944, 80 S.Ct. 810, 4 L.Ed.2d 772 (1960); and a bailee, United States v. Wiesenfeld Warehouse Co., 376 U.S. 86, 92, 84 S.Ct. 559, 563, 11 L.Ed.2d 536 (1964). A practicing physician may also fall within the bounds of this section. A serious gap would be left in the statute if doctors who had received drugs in an intrastate transaction from a party who had in turn received them from interstate commerce were allowed to misbrand the drugs and then distribute them to their patients. Doctors holding drugs for use in their practice are clearly one part of the distribution process, and doctors may therefore hold drugs for sale within the meaning of section 301(k) of the Act. See United States v. Diapulse Corp. of America, 514 F.2d 1097 (2nd Cir.), cert. denied, 423 U.S. 838, 96 S.Ct. 66, 46 L.Ed.2d 57 (1975); United States v. Ten Cartons, etc., 152 F.Supp. 360, 364-65 (W.D.Pa.1957).
31 We now turn to the second requirement of section 301(k) in the context of this case: the drug at issue must have been misbranded. In order to establish that Dr. Evers misbranded Calcium EDTA, the government relies on section 502(f)(1) of the Act, 21 U.S.C. § 352(f)(1). As discussed above, that section deems a drug to be misbranded unless its labeling bears ... adequate directions for use. In United States v. Articles of Drug, 625 F.2d 665 (5th Cir. 1980), we considered and upheld the FDA's interpretation of this provision. That interpretation begins with 21 C.F.R. § 201.5 (1980), which defines adequate directions for use as directions under which the layman can use a drug safely and for the purposes for which it is intended. The intended use of the drug is the objective intent of the persons legally responsible for the labeling of the drug, and may be determined, for example, by labeling claims, advertising matter, or oral or written statements by such persons or their representatives. 21 C.F.R. § 201.128. Since Dr. Evers clearly intended to use Calcium EDTA for the treatment of arteriosclerosis, these provisions would seem to require him to provide adequate directions in lay terms to his patients for the use of Calcium EDTA in the treatment of arteriosclerosis. However, Calcium EDTA is a prescription drug. 15 The FDA insists that since a prescription drug by definition can be used only under a physician's supervision, see 21 U.S.C. § 353(b)(1), it is impossible to provide adequate directions for use to a layman; we accepted this interpretation in Articles of Drug, supra, 625 F.2d at 673. Thus, since Calcium EDTA is a prescription drug, there is no conceivable explanation which Dr. Evers could have given to his patients which would have complied with section 502(f)(1)'s requirement of adequate directions for lay use. 32 However, this does not mean that drug distributors misbrand each prescription drug which they hold for sale, for the statute provides for two important exceptions to section 502(f)(1) of the Act. In the first place, the section itself authorizes the FDA to create a regulatory exemption. See supra at note 13. The FDA has exercised this authority by creating an exception for prescription drugs. See 21 C.F.R. §§ 201.100, 201.115. In order to qualify for the prescription drug exception under these regulations, the drug's labeling must meet a number of specific full disclosure requirements. The labeling must include, for example: certain information regarding dosage, administration, and the drug's active ingredients; a warning that the drug cannot lawfully be dispensed without a prescription; an identifying number from which one may determine the manufacturing history of the particular package of the drug; a statement directed to the pharmacist specifying the type of container to be used in dispensing the drug; and, if the drug is a new drug within the meaning of the Act, a label which has been approved by the FDA pursuant to a new drug application under the Act. If these extensive requirements are met, the drug is completely exempt from the reach of section 502(f)(1) of the Act, and the distributor of the drug therefore need not provide adequate directions for use to the layman. 33 In the second place, the statute itself provides for an exception in section 503(b)(2) of the Act, 21 U.S.C. § 353(b)(2). This section states that if certain basic information is provided on the label a prescription drug shall be exempt from most of the requirements of section 502 of the Act, including that of section 502(f)(1). While the requirements of this section are somewhat more lenient than those of the regulatory exception, it provides a much narrower protection for the distributor of the drug, for it exempts the provisions of section 502 of the Act only at the point at which the drug is actually prescribed and dispensed by a licensed physician. See United States v. Articles of Drug, supra, 625 F.2d at 674; United States v. An Article of Drug ... Amodril Spancap, 1975 Food Drug Cos.L.Rep. P 38,009 at 38,035 (S.D.Fla.1974). The regulatory exemption, on the other hand, protects any person who holds the drug for sale at any point in the distribution process. 34 A two-fold scheme emerges from section 502(f)(1) when it is read in the context of the FDA's interpretation of the adequate directions for use requirement and of the regulatory and statutory exceptions to that requirement. If the drug is a non-prescription drug, the distributor must provide adequate directions in lay terms to the patient himself. But if the drug is a prescription drug, as is Calcium EDTA, the distributor must provide the information which is required by the regulatory or statutory exception to the statute, for it is impossible for the distributor to adequately explain a prescription drug to a layman. Thus, neither prescription nor non-prescription drugs can meet the terms of the statute by providing such adequate directions for use as are required for the other type of drug. 35 The purpose of this scheme is, in brief, to require that adequate information be provided to the person who must decide whether and how to administer the drug. Where non-prescription drugs are involved, the adequate directions for use requirement insures full disclosure to the layman purchasing the drugs for self-treatment. But prescription drugs depend for their safety and effectiveness on the professional judgment of a licensed physician. Accordingly, the prescription drug exceptions to the adequate directions for use requirement contain conditions requiring adequate information for prescribing doctors. As the FDA has itself explained in a notice of proposed rule making: 36 The primary objective of prescription drug labeling is to provide the essential information the practitioner needs to use the drug safely and effectively in the care of patients. 37 40 Fed.Reg. 15392 (1975) (emphasis added). The distributor of a non-prescription drug must provide adequate information for use by a layman, for patients are allowed to administer those drugs without the advice of a physician. The distributor of a prescription drug, however, must provide adequate information to the prescribing physician in accordance with the specific conditions of the statutory or regulatory exceptions to section 502(f) (1), for it is the physician who bears the responsibility for dispensing the drug. See D. A. Kessler, supra, at 742, 747; H. A. Toulmin, Jr., A Treatise on the Law of Foods, Drugs & Cosmetics § 24.12 at 576 (2d ed. 1963). 38
39 The government argues that Dr. Evers' prescription and promotion of Calcium EDTA for the treatment of circulatory disorders meets both of the above requirements of section 301(k) of the Act. In the first place, the government contends that Dr. Evers held (Calcium EDTA) for sale when he maintained a supply of the drug for use on his own patients at the Ra-Mar Clinic. To support this position, the government relies on cases, cited in part III(A) of this opinion, which did indeed hold that a doctor who had held drugs for use in his practice had held those drugs for sale within the meaning of the Act. In the second place, the government contends that Dr. Evers misbranded Calcium EDTA within the meaning of section 502(f)(1) of the Act by failing to provide adequate directions for use either in appropriate lay terms or according to the disclosure requirements of either exemption for prescription drugs. It is undisputed that Dr. Evers did in fact fail to provide adequate directions for either lay or professional use; Dr. Evers does not contend that his booklets contained adequate directions for lay use within the meaning of the regulations, and he does not appear to have made any attempt to meet the terms of either the regulatory or the statutory exception for prescription drugs. 40 When each of the two elements of the offense with which Dr. Evers is charged is examined individually, Dr. Evers does indeed seem to have violated the statute. A different picture emerges, however, when the two elements are considered together. Since Calcium EDTA is a prescription drug, the FDA can establish an act of misbranding under section 502(f)(1) of the Act only by proving that Dr. Evers did not provide adequate information for use by physicians, as is required by the exceptions to that section. The information provided by Dr. Evers to his patients is irrelevant to the question at hand, for according to FDA regulations there is no information which could have been provided about this prescription drug which would have constituted adequate directions for (lay) use. However, the government argues that Dr. Evers held (Calcium EDTA) for sale within the meaning of section 301(k) because he maintained a supply of the drug for use on his own patients ; the government does not contend that Dr. Evers was distributing Calcium EDTA to other licensed physicians. The government therefore must find itself in an awkward position: while the misbranding violation it urges is based on Dr. Evers' failure to provide adequate information to licensed physicians, it seeks to include his actions within the reach of section 301(k) of the Act by virtue of his distribution to patients. 41 The requirement which the FDA seeks to impose is nonsensical. Since Calcium EDTA is a prescription drug, the misbranding provision under which Dr. Evers was charged requires him to provide adequate information for use by prescribing physicians. However, Dr. Evers was the only physician who used the Calcium EDTA in question. The government's application of the statute may therefore be reduced to the following proposition: Dr. Evers did not provide adequate information to himself. It is doubtful at best that this interpretation was intended by the drafters of the statute. 42 In more specific terms, the government's interpretation of the Act breaks down over its use of the phrase held for sale after shipment in interstate commerce. Although Dr. Evers was holding Calcium EDTA for sale in the sense that he was distributing it to his own patients, he was not holding it for sale to physicians. Section 301(k) of the Act cannot reasonably be read to require a physician who is holding a drug for sale only to patients to provide adequate information to physicians to whom he is not distributing the drug. We think it clear that a single doctor may be holding drugs for sale to one group of purchasers but not to another. If the doctor is not holding the drug for sale to the party to whom he owes a statutory obligation of full disclosure (in this case other prescribing physicians), then it makes no sense to impose the requirements of the statute. No legitimate purpose is served when a statutory provision requiring disclosure to one particular group of purchasers is invoked on the basis of sales made to a different group. Since Dr. Evers was holding Calcium EDTA, a prescription drug, for sale only to his patients, and since section 502(f)(1) of the Act does not require any disclosure to patients regarding prescription drugs, we conclude that Dr. Evers did not violate section 301(k) of the Act. 16