Opinion ID: 7267
Heading Depth: 4
Heading Rank: 1

Heading: Plain Language of CPG 7132.16

Text: 35 CPG 7132.16 provides, in pertinent part, that: 36 FDA may, in the exercise of its enforcement discretion, initiate federal enforcement actions against entities and responsible persons when the scope and nature of a pharmacy's activity raises the kind of concerns normally associated with a manufacturer and that results in significant violations of the new drug, adulteration, or misbranding provisions of the Act. In determining whether to initiate such an action, the agency will consider whether the pharmacy engages in any of the following acts: 37 1. Soliciting business ... to compound specific drug products.... 38 2. Compounding, regularly, or in inordinate amounts, drug products that are commercially available in the marketplace and that are essentially generic copies of commercially available, FDA-approved drug products. 39 3. Receiving, storing, or using drug substances without first obtaining written assurance from the supplier that each lot of the drug substance has been made in an FDA-approved facility. 40 4. Receiving, storing, or using drug components not guaranteed or otherwise determined to meet official compendia requirements. 41 5. Using commercial scale manufacturing or testing equipment for compounding drug products. 42 6. Compounding inordinate amounts of drugs in anticipation of receiving prescriptions in relation to the amounts of drugs compounded after receiving valid prescriptions. 43 7. Offering compounded drug products at wholesale to other state licensed persons or commercial entities for resale. 44 8. Distributing inordinate amounts of compounded products out of state. 45 9. Failing to operate in conformance with applicable state law regulating the practice of pharmacy. 46 The foregoing list of factors is not intended to be exhaustive and other factors may be appropriate for consideration in a particular case. 47 We observe initially the statement in CPG 7132.16 that the FDA will consider the nine factors in determining whether to initiate an enforcement action against a pharmacy. We also note that, even though the mandatory tone of the factors is undoubtedly calculated to encourage compliance, CPG 7132.16 affords an opportunity for individualized determinations. It expressly provides that [t]he foregoing list of factors is not intended to be exhaustive, recognizes that other factors may be appropriate for consideration in a particular case, and states that, even if the factors are present, the FDA retains discretion whether to bring an enforcement action. 29 In this regard, CPG 7132.16 is analogous to the rule reviewed in Guardian Federal Savings & Loan Ass'n v. Federal Savings & Loan Insurance Corp., 30 which the D.C. Circuit held to be a statement of policy, exempt from APA notice-and-comment requirements. 31 48 The substantive content of the limits themselves also favors a finding that CPG 7132.16 does not create binding norms. The rule does not contain specifications of precise quantities or limits that, once exceeded, trigger a mandatory FDA response. The factors provide, for example, that only the compounding or distributing of inordinate amounts of drugs is impermissible, but nowhere does the rule further define inordinate amounts. As such, CPG 7132.16 leaves to the sound discretion of the FDA the determination when a particular quantity has exceeded the amount considered to be within the bounds of traditional compounding. The fact that none of the nine factors listed in CPG 7132.16 establish fixed criteria to control the agency's decisions distinguishes CPG 7132.16 from other FDA rules that have been held to be substantive. 32 49 P2C2 relies primarily on two cases, Bellarno International Ltd. v. FDA, 33 and Community Nutrition Institute v. Young, 34 but both are easily distinguished. 35 In those two cases, and unlike here, FDA rules were found to create binding norms, for they removed all discretion from the agency by creating a statutory scheme that reduced the agency's role to that of mechanically determin[ing] whether a given case is within the rule's criteria. 36 50 At issue in Community Nutrition was an FDA action level, which provided that [a]ny food that contains aflatoxin in excess of 20 [parts per billion (ppb) ] is ... considered by FDA to be adulterated under section 402(a)(1) ... and therefore may not be shipped in interstate commerce. 37 The action level established a statutory scheme whereby once a precise level of aflatoxin was detected, the FDA had no choice but to detain the food. The FDA conceded at oral argument that it would be daunting to try to convince a court that the agency could prosecute a producer for shipping corn with less than 20 ppb, and the court noted that this type of cabining of an agency's prosecutorial discretion can in fact rise to the level of a substantive ... rule. 38 51 The FDA's discretion was similarly restricted in Bellarno International, which concerned a FDA import alert that ordered the automatic[ ] detention of all pharmaceuticals classified by tariff regulations as American Goods Returned (AGR), i.e., pharmaceuticals initially produced in the United States, exported for distribution abroad, and subsequently returned for sale in the United States. As in Community Nutrition, once a precisely defined criterion was satisfied--in Community Nutrition, 20 ppb of aflatoxin; in Bellarno International, that the pharmaceutical was an AGR--then a prescribed FDA action automatically followed. Consequently, the rule reduced the function of the FDA to that of rote determin[ation] whether a given case is within the rule's criteria. 39 When viewed in light of the rules in Community Nutrition and Bellarno International, it is clear that the nine factors identified in CPG 7132.16 are not the type of criteria that courts have traditionally characterized as binding norms. 40 52