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Durovic v. Richardson

April 25, 1973


Author: Fairchild

Before FAIRCHILD, CUMMINGS, and STEVENS, Circuit Judges.

FAIRCHILD, Circuit Judge.

Plaintiffs appeal from an unfavorable declaratory judgment entered on defendants' motion for summary judgment in plaintiffs' action for declaratory relief.

Plaintiffs are interested in the manufacture and distribution of the "drug product called Krebiozen as an agent for use in the management of malignant tumors". Defendants are charged with administration of the Federal Food, Drug and Cosmetic Act, as amended. 21 U.S.C. § 355(a) prohibits the introduction of a "new drug" into interstate commerce unless an approval of a new drug application under § 355(b) (an NDA) is effective.

21 U.S.C. § 335 calls for notice to a proposed defendant before a violation is reported to a United States attorney. Such notice was given to plaintiffs. Although § 335 also calls for an opportunity*fn1 administratively for presentation of views, it does not contemplate a proceeding leading to a final administrative order, subject to statutory judicial review. As a result of the notice, and, apparently, defendants' rejection of views that sale of Krebiozen in interstate commerce required no effective NDA, plaintiffs brought this action. They sought a declaration (1) that Krebiozen is not a new drug by reason of the operation of a "grandfather" provision, enacted in 1962, in other words, that Krebiozen was commercially sold or used and not a "new drug" under the law just before the 1962 amendments, or, alternatively (2) that if Krebiozen was a new drug, one or more NDA's became effective, one in 1954 and one in 1961.

Each side moved for summary judgment. The district court entered judgment that "Krebiozen is now and has always been a new drug within the meaning of the statutory definition for which no approved New Drug Application is now or has ever been effective." Findings and conclusions are reported at 327 F. Supp. 386. Plaintiffs appealed. We affirm.

Since summary judgment was granted, the questions on appeal are whether there was no genuine issue as to any material fact and whether the propositions declared were correct as a matter of law.

Plaintiffs' alternative claims, that of grandfather clause exemption because Krebiozen was not a new drug under the 1938 law, and that of an effective NDA under the 1938 law are inconsistent. Although plaintiffs chose to press the grandfather clause claim first, chronology makes it more logical to take up their claims in the opposite order.

I. The 1954 and 1961 NDA's.

Plaintiffs' activity in the United States with Krebiozen, previously unknown, began in 1949-1951. Undeniably it was then a new drug as defined in sec. 201(p) of the 1938 act, 52 Stat. 1040, then in force. Under sec. 505(a), unless an NDA was on file and effective, a new drug could not be introduced into interstate commerce except under regulations covering solely investigational use.

On April 15, 1954, consistently with the new drug status of Krebiozen, plaintiff Marko Durovic tendered an NDA. On May 25, 1954, the Secretary replied by letter stating that the application was incomplete in two particulars and accordingly that it may not be filed.

Plaintiffs contend that this NDA became effective by operation of law, 60, or at most 180, days after receipt. They rely on sec. 505(b) and (c). If this NDA were deemed an application filed when received, within the meaning of (b), (c) would indeed cause it to become effective on the sixtieth day after the filing unless postoponed by the Secretary to a time not more than 180 days after filing. Clearly there were no notice and hearing under (d) which would support an order refusing to permit the NDA to become effective, nor under (e) which would support an order suspending effectiveness.

Defendants' position is that a document purporting to be an NDA, received, but deemed incomplete, is not a filed application under (b), so as to become effective by lapse of time under (c).

Sec. 701(a) vested authority in the Secretary to promulgate regulations for the efficient enforcement of the act. In 1954, 21 C.F.R. § 1.110 provided that an application shall not be accepted for filing if incomplete on its face by omission of required material, and called for notice to the applicant. We consider the regulation a reasonable means of determining the fact and time of filing an application and preventing the triggering of the automatic operation of the statute where an intended application is incomplete under the statute. Notice of incompleteness, conforming to the regulation, was given. It does not appear either that Durovic amended the application so as to supply the omitted information, which would, under the regulation, have resulted in a filing date at the time of receipt of the amendment, if then complete, or that he challenged the refusal to accept for filing in any legal proceeding.

On March 27, 1961, Dr. Stevan Durovic, another plaintiff, submitted another NDA. This act was consistent with continued new drug status of Krebiozen. The application was supplemented March 31 and April 13. On May 23, 1961, the Director of the Division of New Drugs replied by letter stating that the application as amended was regarded as received April 13, that a preliminary review showed the NDA was incomplete in specified areas, but that there would be a further letter. On June 9, the Director wrote an eight page letter listing areas in which the NDA was incomplete and inadequate, and stating that, accordingly, it may not be filed.

The applicable regulation at this time was 21 C.F.R. 130.5. It was similar to the earlier one in all material respects, but also provided a procedure whereby the applicant, if he disputed the finding of incompleteness, could request filing over protest, and thus set the statutory machinery in motion. There is no claim that Dr. Durovic made such request.

We consider the regulations valid and that the agency complied with them. Accordingly we conclude that neither the 1954 nor 1961 NDA was a filed application so as to cause it to become ...

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