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 The Solicitor General, on behalf of the United States, petitions for a writ of certiorari to review the judgment of the United States Court of Appeals for the Eleventh Circuit in this case. /1/ Petition for a Writ of Certiorari to the United States Court of Appeals for the Eleventh Circuit TABLE OF CONTENTS Opinions below Jurisdiction Statutes involved Statement Reasons for granting the petition Conclusion Appendix A Appendix B Appendix C Appendix D Appendix E OPINIONS BELOW The opinion of the court of appeals (App. A, infra, 1a-15a) is reported at 654 F.2d 1114. The decision of the district court (App. C, infra, 18a-31a) is reported at 498 F. Supp. 288. JURISDICTION The judgment of the court of appeals (App. B, infra, 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 jurisdiction of this Court is invoked under 28 U.S.C. 1254(1). STATUTES INVOLVED The relevant statutory provisions are set forth in App. E, infra, 33a-44a. QUESTION PRESENTED Whether a prescription drug product -- even though potentially unsafe or ineffective -- is exempt from the requirement of premarketing approval by FDA 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). /2/ The term "new drug" is defined in Section 201(p) of the Act, 21 U.S.C. 321(p), to mean 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," or has not been used to a material extent or for a material time under other than experimental conditions. 21 U.S.C. 321(p). /3/ Generix Drug Corporation (Generix) sells generic prescription drugs in interstate commerce -- 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) known as excipients, differ. Many of the generic drugs distributed by Generix had not been approved by the FDA, and in the government's view were "new drugs" within the meaning of the Act. 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. /4/ Generix did not deny that the particular drug products referred to in the complaint have not been approved by FDA. /5/ The hearing on the government's motion 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 its drugs. Such prior FDA approval, Generix argued, was evidence that the active ingredients were generally recognized as safe and effective. From this premise, Generix contended 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 the FDA. /6/ Generix presented no evidence that its drugs had been used to a material extent or for a material time. The government contended that FDA's prior approval of drugs containing the same active ingredients as the drugs marketed by Generix was irrelevant because the Act requires FDA preclearance of every drug product, unless that product is generally recognized as safe and effective and has been used to a material extent or 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, usually comprising only about 10% of the total compound. They also contain other 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 these inactive ingredients or in methods of compounding, drugs containing the same active ingredients can differ from each other in the amounts of the active ingredients that enter the bloodstream and the rate at which this occurs. /7/ Since the quantity and delivery speed 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 drug will achieve the same therapeutic effect as the pioneer product (Tr. 39-40, 46-47). Often it does not. 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). Because the labeling of these generic products is virtually identical to the labeling of the brand name products they copy and because Generix markets these unapproved drugs in a way that leads physicians to believe that they are interchangeable with approved drugs (Tr. 45-47), they may create serious dangers to patients. /8/ 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. 55-57). Their willingness to prescribe generic drugs at all is based on their assumption that generic drugs have received FDA approval. /9/ 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 (App. C, infra, 18a-31a). Rejecting both the government's and Generix's interpretation of the Act, it held that the government had the burden of showing a potential hazard associated with Generix's drugs. /10/ The court 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 combinations of ingredients /11/ and enjoined distribution of those drugs. Because such specific evidence was not presented as to Generix's other unapproved generic drugs, /12/ however, the court denied the government's motion for preliminary injunction against distribution of those products (id. at 31a). /13/ The preliminary injunction was stayed pending Generix's appeal (App. D, infra, 32a). /14/ 3. The court of appeals reversed that portion of the district court's order granting a preliminary injunction. The court expressly declined to follow the recent decision in Premo Pharmaceutical Laboratories, Inc. v. United States, 629 F.2d 795 (2d Cir. 1980), in which the Second Circuit held that the Act's "new drug" definition applies to drug products, not only to active ingredients, 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. Rather, the Fifth Circuit (now the Eleventh Circuit) concluded that in no event is prior FDA approval required for a drug containing the same active ingredient as a previously approved new drug. Thus, it vacated the preliminary injunction -- even as to those drugs for which there was specific evidence that lack of bioequivalence could be dangerous to patients. The court of appeals acknowledged that there may be differences in therapeutic effect between a pioneer drug product that has been approved by the FDA, and unapproved generic drugs with the same active ingredient but different inactive ingredients (App. A, infra, 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). /15/ The court of appeals considered the new drug approval procedures of 21 U.S.C. 355 to be 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 a generic drug by FDA would be contrary to congressional intent "to encourage generic-name prescribing and thereby lower prices" (id. at 10a). The court remanded the case to the district court with instructions to dismiss the complaint. REASONS FOR GRANTING THE PETITION This case presents an important question concerning the authority and responsibility of the Food and Drug Administration to review the safety and effectiveness of generic drugs before those drugs are marketed. The decision below permits the marketing of unapproved drugs which are potentially unsafe or ineffective, and therefore dangerous to the health of the users. This is contrary to the language and legislative history of the Federal Food, Drug, and Cosmetic Act, and is at odds with numerous decisions of this Court giving that statute the broadest coverage possible and construing claimed exemptions narrowly to protect the public health. The judgment in the present case is, moreover, in direct conflict with the recent decision of the Second Circuit in Premo Pharmaceutical Laboratories, Inc. v. United States, supra. Review by this Court is necessary in order to allow the FDA to fulfill its statutory mandate of ensuring the safety and effectiveness of drugs on a uniform, nationwide basis. 1. The statute expressly defines the term "drug" to include drug products. In holding that "drug" refers only to active ingredients, which constitute only 10% of a drug product, the court of appeals ignored the plain language of 21 U.S.C. 321(g)(1)(B). Even the subsection on which the court relied (21 U.S.C. 321(g)(1)(A)) does not support its conclusion. a. The statutory definition of the term "drug" has four overlapping parts. It includes (21 U.S.C. 321(g)): (A) articles recognized in the official United States Pharmacopoeia, official Homoeopathic Pharmacopoeia of the United States, or official National Formularly, 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. As the Second Circuit held in Premo, supra, generic drug products 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). Thus, they are "drugs" under at least one of the four subsections of the Act's broad definition. 21 U.S.C. 321(g)(1). In holding that drug products are not drugs, the court below failed to mention 21 U.S.C. 321(g)(1)(B) or to explain why a generic drug product would not fit within this definition. Instead, the court based its holding on the assumption that active ingredients fall within subsection (A) of 321 (g)(1), but that drug products do not. The court stated that the "record shows that the drugs listed in the courses described in subsection (A) * * * are 'drug substances,' not drug products" (App. A, infra, 5a). But there is nothing in the record to support that conclusion. On the contrary, the pharmacopeiae mentioned in 21 U.S.C. 321(g)(1)(A) in fact contain monographs for drugs products as well as active ingredients. /16/ 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." /17/ Regardless of the coverage of subsection (A), generic drug products are drugs as defined in subsection (B). /18/ b. Since a generic drug product is a drug, the statutory language also compels the conclusion that a determination of whether a generic drug product is a "new drug" must depend on whether that product itself can meet the general recognition standard. The Act defines a "new drug" as "(a)ny drug * * * the composition of which is such that such drug is not generally recognized, among experts * * * as safe and effective for use under the conditions prescribed, recommended, or suggested in the labeling thereof." 21 U.S.C. 321(p)(1). The construction of the term "new drug" to include drug products is necessary to avoid creating an exemption from the new drug approval requirement for drugs that could not be approved by FDA if they were subject to 21 U.S.C. 355. As this Court held in Weinberger v. Hynson, Westcott & Dunning, Inc., 412 U.S. 609, 631 (1973): (W)e cannot construe Section 201(p) (21 U.S.C. 321(p) -- the definition of "new drug") to deprive FDA of jurisdiction over a drug which, if subject to FDA regulation, could not be marketed because it had not passed the "substantial evidence" test. To do so "would be to impute to Congress a purpose to paralyze with one hand what it sought to promote with the other." Clark v. Uebersee Finanz-Korp, 332 U.S. 480, 489 ((1947)). If a drug is a new drug, it cannot legally be marketed "unless an approval of an application filed pursuant to (21 U.S.C. 355(b)) is effective with respect to such drug." 21 U.S.C. 355(a). /19/ This Court has recognized that an NDA (see note 19, supra) is applicable to a specific drug product. USV Pharmaceutical Corp. v. Weinberger, 412 U.S. 655, 664 (1973). Thus, approval of the pioneer drug, even if that drug has the same active ingredient as the generic drug, is not tantamount to approval of a generic copy which may, because of its different inactive ingredients or different methods of manufacture, have a significantly dissimilar effect on the human body. The statutory specifications of the contents of new drug applications also show that an NDA applies to a particular drug product -- not only to its active ingredients. Thus, 21 U.S.C. 355(b) requires the submission of detailed information about components, methods of manufacturing, and labeling of the new drug. /20/ This information will be different for each drug product, even if it has the same active ingredient as a previously approved product. On the basis of the information included in the application, the FDA must determine whether the applicant has shown that the drug is safe and that there is substantial evidence /21/ that it is effective for its intended uses. If the FDA approves the NDA, the subject drug may then be marketed. /22/ On the other hand, if the drug is not shown to be safe, or if substantial evidence of its effectiveness is lacking, the FDA will not approve it. /23/ Because expert general recognition requires at least the evidence that would be required to secure new drug approval, general expert recognition of a drug's safety and effectiveness, therefore, must be based on tests to show safety and effectiveness of the drug in question. Weinberger v. Hynson, Westcott & Dunning, Inc., supra, 412 U.S. at 628-632; Weinberger v. Bentex Pharmaceuticals, Inc., 412 U.S.C. 645, 653 (1973). In addition, the general recognition standard requires that the relevant tests be available in the scientific literature to experts generally (i.d. at 652), and that experts generally agree that the testing shows the drug to be safe and effective (Hynson, Westcott & Dunning, Inc., supra, 412 U.S. at 632). Even if a drug satisfies the general recognition criterion, it remains a "new drug" -- requiring 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). Thus, contrary to the court of appeals' conclusion, no drug product can escape new drug status unless that drug itself is recognized by experts as safe and effective and has been used for a material time. Premo Pharmaceutical Laboratories, Inc. v. United States, supra, 629 F.2d at 804-805. There is nothing in the statutory language to suggest that general recognition of a drug's active ingredient or component would take the product out of the "new drug" category. /24/ 2. The legislative history of the new drug provisions of the 1938 Act, and of the Act's 1962 amendments, confirms that each drug product that has not itself achieved general recognition among experts must be approved by the FDA before it is marketed. a. The direct stimulus for Congress' enactment of the premarketing approval requirement was the numerous deaths caused by the drug Elixir Sulfanilamide. That drug was itself an untested combination of a widely used active ingredient and a new inactive ingredient; the inactive ingredient was responsible for the deaths caused by the drug. /25/ To avoid such tragedies in the future, Congress enacted a system of premarketing approval "to prevent the premature marketing of new drugs not properly tested for safety." H.R. Rep. No. 2139, 75th Cong., 3d Sess. 9 (1938). It would be contrary to the clear congressional intent for courts to eliminate the requirement of premarketing safety review simply because another drug containing the same active ingredient has been proved safe and effective. A statute with such an exemption would not have prevented the Elixir Sulfanilamide tragedy that prompted Congress to mandate premarketing review. b. The 1962 amendments to the Act were intended to strengthen the protection afforded the public by prohibiting the marketing of drugs whose effectiveness has not been established. /26/ Thus Congress added to the requirement of testing for safety the further requirement that substantial evidence of effectiveness be demonstrated before the FDA can approve a new drug application. A corresponding change was made in the definition of "new drug" so that henceforth drugs could not escape "new drug" status unless their effectiveness as well as their safety was recognized by qualified experts. There is nothing in the language or the legislative history of these amendments that suggests Congress meant to weaken the new drug provisions by exempting generic drugs from the premarketing approval requirements of 21 U.S.C. 355. To be sure, as the court of appeals noted, there was a congressional concern with promoting competition in the drug industry. But promoting price competition is not inconsistent with insuring the safety and effectiveness of all products on the market. While Congress sought to encourage competition and the use of less expensive generic drugs, /27/ it assumed that no drug would reach the market unless its safety and effectiveness were established through general recognition or an approved NDA. It did not intend to sacrifice safety or effectiveness for lower prices. /28/ Indeed, the increased competition and reduction in drug prices that Congress sought to foster through generic labeling would be less likely to occur if generic drugs could be marketed without FDA approval. If generic drugs are not subject to premarketing approval, a physician or pharmacist will have no assurance that generic products would be equally 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, careful doctors and pharmacists would be deterred from administering generic drugs regardless of the cost savings that might be obtained (Tr. 55-57). /29/ c. The FDA has sought to minimize the burden of filing and obtaining approval of generic drug NDAs to the extent consistent with insuring that unsafe or ineffective prescription drugs do not reach the public. For many generic drugs, FDA has determined that complete safety and effectiveness studies need not be submitted by each manufacturer. Instead, manufacturers of certain generic drugs may obtain FDA approval by submitting an abbreviated new drug application ("ANDA"). See 21 C.F.R. 314.1(a) and (f). /30/ Under this procedure, the manufacturer may establish that the generic drug is safe and effective by showing that it contains the same active ingredient as an approved new drug, and also that the two products have equivalent effects on patients. In effect, therefore, the FDA relies on the body of knowledge developed for the pioneer drug product in evaluating the ANDA. The generic drug is deemed safe and effective and the ANDA is approved 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 their safety or effectiveness. 3. The court of appeals' decision is contrary to numerous decisions of this Court and is in direct conflict with a recent decision of the United States Court of Appeals for the Second Circuit. a. This Court has long held that the Act must be interpreted to effectuate its purpose -- protection of the public health. United States v. Dotterweich, 320 U.S. 277, 280 (1943). For this reason, the Court consistently has given a broad meaning to the term "drug" (United States v. An Article of Drug . . . Bacto-Unidisk, 394 U.S. 784, 798 (1969)): The historical expansion of the definition of drug, and the creation of a parallel concept of devices, clearly show, we think, that Congress fully intended that the Act's coverage be as broad as its literal language indicates -- and equally clearly, broader than any strict medical definition might otherwise allow. Similarly, the Court has narrowly construed the exceptions to the new drug approval requirements. Hynson, Westcott & Dunning, Inc., supra, 412 U.S. at 629-631. The court of appeals, however, did just the opposite -- it narrowed the definition of the term "drug" and broadened the general recognition exemption from the "new drug" provisions. In so doing, it disregarded the statutory language and legislative history, both of which support the fundamental principle -- protecting the public health -- that has guided the courts in interpreting the Act. /31/ b. The court of appeals' decision conflicts with the Second Circuit's decision in Premo Pharmaceutical Laboratories, Inc. v. United States, supra. The court held in Premo that the term "drug" as used in 21 U.S.C. 321(p) and 355 refers to drug products and not only to their active ingredients. Therefore, a drug product, even if it contains the same active ingredient as an approved new drug, cannot be marketed within FDA approval unless it meets the "general recognition" standard prescribed by 21 U.S.C. 321(p). The Second Circuit also held that "general recognition" of the safety and effectiveness of a generic drug does not arise from approval of a pioneer drug having the same active ingredient; it requires an expert consensus founded on substantial published evidence as to the generic product's own safety and effectiveness. /32/ Other courts also have espoused the interpretation of the Act adopted by the Second Circuit. For example, in Pharmadyne Laboratories, Inc. v. Kennedy, supra, the court rejected 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 need not themselves undergo FDA premarketing clearance -- and agreed with the FDA that the term "new drug" applies to specific drug products. In two other actions, the FDA has obtained injunctive relief against major manufacturers of unapproved new drugs. United States v. Pharmadyne Laboratories, Inc., No. 80-1312 (D.N.J., filed May 8, 1980); /33/ United States v. Premo Pharmaceutical Laboratories, Inc., supra. /34/ The fact that there have been several cases dealing with the "new drug" status of generic drugs establishes that the issue is a recurring one that should be resolved by this Court. /35/ 4. The court of appeals' decision will have serious adverse consequences for the public health. a. The FDA is now confronted with conflicting court of appeals interpretations of the critical new drug provisions of the Act. The confusion and uncertainty that will result from a generic drug marketing rule that differs from one part of the country to another are obvious: under the decision below, the FDA presumably has no authority for preclearance of generic prescription drugs marketed in the Fifth and Eleventh Circuits, while such procedures are required in the Second Circuit. Unless the decision below is reversed, the FDA will be unable to prevent the marketing of potentially unsafe and ineffective generic drugs. Once these drugs reach the public, the measures available to remove the drugs from the market after they have caused harm simply do not provide the protection Congress intended. See, e.g., United States v. Premo Pharmaceutical Laboratories, Inc., supra, 511 F. Supp. at 988-989. For example, postmarketing measures would not prevent a dangerous drug such as Elixir Sulfanilamide, which killed numerous persons prior to the enactment of the Act, /36/ from reaching the public. Indeed, if the FDA were forced to prove that a new drug were unsafe or ineffective -- rather than merely to show that it had not been approved -- the burden of proving safety and effectiveness placed on the manufacturer by Congress would be reversed, and the removal of unsafe or ineffective products from the market would be delayed. b. The marketing of unapproved generic drugs will lead to one of two unacceptable outcomes. First, if doctors, pharmacists, and the public are not informed of the absence of premarketing review to determine safety and effectiveness, patients who use generic drugs will unknowingly be subjected to the risk that the generic drugs will be unsafe or ineffective. The adverse consequences that may result include the possible death of patients who use such drugs. On the other hand, if the medical profession and the public do become aware of the risk posed by generic drugs that have not been shown to be bioequivalent to approved pioneer drugs, use of generics will predictably decline. The government could not encourage use of drugs whose safety and effectiveness had not been demonstrated, and indeed might have a duty to warn the public not to permit generic substitutions. Since current law prohibits any drug to be labeled with a notice that it has or has not been approved by the FDA, 21 U.S.C. 331(l), the decision below will have a negative impact on sales of generics which have been shown to be safe and effective and have been approved. The only way to be assured that a drug product is safe and effective 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 upon which the court of appeals sought to premise 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 generic substitutes for more costly products. /37/ CONCLUSION The petition for a writ of certiorari should be granted. Respectfully submitted. REX E. LEE Solicitor General WILLIAM F. BAXTER Assistant Attorney 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 DECEMBER 1981 /*/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/ 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. 5.10(a)(1); see 46 Fed. Reg. 26052 (1981). The introduction or delivery for introduction into interstate commerce of an unapproved new drug in contravention of 21 U.S.C. 355 is made a "prohibited act" by 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 21 U.S.C. 331 also are 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). See Weinberger v. Hynson, Westcott & Dunning, Inc., 412 U.S. 609, 612-613 (1973); Ciba Corp. v. Weinberger, 412 U.S. 640, 644 (1973). /3/ A drug may be excluded from 21 U.S.C. 321(p) if it comes within one of the grandfather provisions of that section, not relevant here. /4/ 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 were not, however, limited to those particular drugs (ibid.). The complaint alleged also that defendants 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. This petition raises no issue concerning the good manufacturing practices allegations. "R." refers to the district court record as transmitted to the court of appeals. "Tr." refers to the transcript of the hearing in the district court on the government's motion for a preliminary injunction. /5/ R. 79-81; see also R. 28 n.3. /6/ R. 106-149, 197-207, 212-224; Tr. 26-27, 250-253. /7/ The quantity and delivery speed of active ingredients to the bloodstream is referred to as "bioavailability" (Tr. 39-42). Drugs with similar "bioavailability" are considered to be "bioequivalent." Because differences in bioavailability are caused by variations in both active and inactive ingredients, and in methods of manufacture, drugs containing the same active ingredients may not be bioequivalent. /8/ For example, if the products used to treat high blood pressure do not perform properly, the patient is in grave danger either from recurrence of high blood pressure if absorption of the drug is inadequate, or from toxicity if the drug is overabsorbed (Tr. 47-49). /9/ See United States v. Premo Pharmaceutical Laboratories, Inc., 511 F. Supp. 958, 963 (D.N.J. 1981); 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). /10/ 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), rev'd, 629 F.2d 795 (2d Cir. 1980). /11/ Allopurinol, spironolactone, furosemide, chlorothiazide with reserpine, amitriptyline, and diethylpropion hydrochloride (App. C, infra, 20a). /12/ Prochlorperazine maleate and chlorthalidone (App. C, infra, 20a). /13/ The government's request for an injunction with respect to the manufacturing practice violations was held in abeyance pursuant to agreement of the parties (Tr. 186-187). /14/ On August 27, 1980, the United States moved for reconsideration of the stay order and of the denial of preliminary injunctive relief with respect to certain of the drugs distributed by respondents. These motions were denied by the district court on October 7, 1980. /15/ The court also thought 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." /16/ For example, the most recent edition of the combined United States Pharmacopeia-National Formulary has monographs not only for furosemide as an active ingredient but also for "furosemide injection" and "furosemide tablets," see The Pharmacopeia 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. /17/ No inconsistency is created by the fact that active ingredients themselves 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 21 U.S.C. 321(g)(1) as a whole shows that the term "drug" must refer to drug products as well as to their active ingredients. /18/ The definition of "drug" in the Food and Drug Act of 1906 -- the predecessor of the Federal Food, Drug, and Cosmetic Act of 1938 -- also encompassed 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. This definition was changed to the language contained in 21 U.S.C. 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, 76th 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"). /19/ The FDA approves new drug applications (NDAs), which are filed pursuant to 21 U.S.C. 355(b). /20/ 21 U.S.C. 355(b) requires that an NDA contain: (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. /21/ 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. /22/ If the manufacturer wishes to make any change in the composition or labeling of the approved new drug, it must first submit a supplement 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 new 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). /23/ If the FDA denies approval, judicial review on the administrative record is available to the applicant. 21 U.S.C. 355(h). See Weinberger v. Hynson, Westcott & Dunning, Inc., supra; Premo Pharmaceutical Laboratories, Inc. v. United States, supra, 629 F.2d at 802. /24/ The court of appeals reasoned 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 would be "superfluous." App. A, infra, 7a. To the contrary, as this Court clearly contemplated in Hynson, a drug product could achieve expert general recognition and pass out of "new drug" status at some point after being marketed for a period of time in accordance with an NDA. 412 U.S. at 631. General recognition of that product does not, as the Generix court assumed, require general expert knowledge about the ingredients and manufacturing processes of the product. Rather, it is based on expert knowledge of the testing of the particular product. Compare Generix, App. A, infra, 7a, with pages 13-14, notes 20 & 21, supra. /25/ See United States v. An Article of Drug . . . Bacto-Unidisk, 394 U.S. 784, 797-798 (1969); 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 History 1316-1327 (G.E. Stechert & Co. 1938). /26/ See H.R. Rep. No. 2464, 87th Cong., 2d Sess. 1 (1962); S. Rep. No. 1744, 87th Cong., 2d Sess. 8 (1962). /27/Much of the discussion in the legislative history of the need to improve competition related to proposals -- never enacted -- that would have limited 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, 87th Cong., 2d Sess. 33 (1962). /28/ The generic name labeling provisions of 21 U.S.C. 352(e) cited by the court do not mean that safety and effectiveness determinations are to be made on a generic basis. Rather, the purpose of these provisions is to encourage use of generic drugs by assisting doctors and pharmacists in identifying generic equivalents and "ascertain(ing) the qualities and specifications of the product, and the competing products." S. Rep. No. 1744, 87th Cong., 2d Sess. 18 (1962). Thus, labeling a drug with the generic name as well as the trade name would aid 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.). /29/ See Pharmadyne Laboratories, Inc. v. Kennedy, supra, 466 F. Supp. at 106. /30/ The ANDA process applies to copies of pre-1962 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 manufacturer therefore could have sought approval under this simplified procedure. In addition, the FDA has announced a so-called "paper NDA" policy for post-1962 generic drugs. 45 Fed. Reg. 82052 (1980). Under that policy, applicants may rely on the scientific literature, if it provides adequate data, to establish the safety and effectiveness of the 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. /31/ The lower courts also have applied this basic principle in construing the Act. See, e.g., 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); United States v. Vitasafe Corp., 345 F.2d 864, 870 (3d Cir. 1965). /32/ The district court decision in that case had rejected the manufacturer's argument that the "new drug" definition applied solely to active ingredients. The district court, however, erred in holding that the government had some burden -- not met there -- to show that a generic copy presented a hazard before premarketing clearance could be required, Premo Pharmaceutical Laboratories, Inc. v. United States, supra. /33/ In Pharmadyne, the defendant consented to a decree of permanent injunction without contesting the government's claim that such relief was appropriate. /34/ The New Jersey district court's comprehensive opinion in Premo was based on a lengthy record. The Director of FDA's Bureau of Drugs, as well as the FDA's top biopharmaceutics expert and a number of distinguished experts in the field, testified to the factual basis for the requested relief. The court made detailed findings and rejected the Lannett dicta. It specifically found that drugs having the same active ingredient can differ in safety and effectiveness because of variations in inactive ingredients, 511 F. Supp. at 963-964, 981, because of subtle differences in chemical structure of the active ingredients, id. at 963-964, 981-982, and because of differences in manufacturing processes, id. at 963-965, 982-984. It found that differences between two drugs having the same active ingredient can lead to severe adverse health consequences, including death, id. at 992-993, 996. It concluded, on the basis of the evidence before it, that the adulteration provisions of the Act could not be utilized effectively to protect the public from the dangers posed by the marketing of unapproved generic products, id. at 976-977, 988-989. Following this decision, Premo consented to a permanent injunction. /35/ The issue of the status of generic drug products has also been raised in another injunction suit against a manufacturer marketing an unapproved generic drug. United States v. Superpharm Corp., No. CV-81-0087 (E.D.N.Y., filed Jan. 9, 1981). The defendants consented to an indefinite extension of a temporary restraining order while the question of the court's authority to order recall of the drugs was litigated. The issue has, in addition, arisen in cases considering the parallel "new animal drug" provisions. See 21 U.S.C. 321(w). In one case, now on appeal to the Eighth Circuit, the district court concluded that differences in inactive ingredients and in manufacturing processes can affect the safety and effectiveness of a drug. See United States v. Undetermined Quantities . . . Equidantin Nitrofurantoin Suspension, (1981) Food Drug Cos. L. Rep. (CCH) Section 38,120 (E.D. Mo. May 19, 1981), appeal docketed, No. 81-1793 (8th Cir. July 30, 1981). In another animal drug case, the court concluded that the "new animal drug" provision applies to products rather than to active ingredients, but decided that where the pioneer product has been approved by the FDA any generic copy that contains exactly the same ingredients (including both active and inactive ingredients) does not require FDA premarketing approval, United States v. Articles of Drug . . . OXY 500 Scour Tablets, (1981) Food Drug Cos. L. Rep. (CCH) Section 38,132 (D. Minn. Aug. 6, 1981). /36/ See page 16, supra. /37/ 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. Appendix Omitted