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July 30, 1984


The opinion of the court was delivered by: Getzendanner, District Judge:


In this action the United States proceeds on libel of information against several cartons of toothpaste, and seeks injunctive relief against the manufacturer, Block Drug Company, Inc. ("Block"), and its officers Leonard N. Block and James A. Block. Block has filed a claim in the in rem proceeding. The toothpaste, by combining two active ingredients, is intended to combat both caries and dentinal hypersensitivity. This particular combination of active ingredients apparently has never been marketed before, and the United States alleges that the toothpaste is a new drug within the meaning of 21 U.S.C. § 321(p)(1), introduced into interstate commerce without an approved New Drug Application ("NDA") as required by 21 U.S.C. § 355(a). The court has jurisdiction under 21 U.S.C. § 334 and 332, as well as under 28 U.S.C. § 1345. Presently before the court is defendants' motion to dismiss or, in the alternative, for other relief. Block moves both as claimant and as defendant. For the reasons stated below, the court denies defendants' motion.

Defendants dispute that the toothpaste is a new drug, but their present motion is based on other grounds, both of which are connected with the massive review of over-the-counter ("OTC") drugs currently being conducted by the Food and Drug Administration ("FDA"). First, defendants argue that a certain FDA Compliance Policy Guide ("CPG") bars the present action pending completion of the OTC review. Although the CPG is in the form of internal enforcement guidance, instructing FDA personnel not to initiate certain regulatory actions, defendants argue that the CPG constitutes a formal advisory opinion, which the FDA is bound to follow until it is revoked. The United States responds that the CPG may not be asserted by defendants as a bar to an enforcement action, and that in any event the CPG does not apply to the toothpaste in question. Second, defendants argue that the court should remand this action to the FDA for an administrative determination, based on a complete administrative record, of whether the toothpaste is a new drug. The United States opposes this suggestion as well. Discussion of both these arguments appropriately is preceded by an overview of new drug regulation and of the current OTC review, including the review of OTC dentifrices.


Federal law prohibits the introduction into interstate commerce of any new drug without an NDA approved by the FDA. 21 U.S.C. § 355(a). The term "new drug" is defined by statute, and its definition underwent a major change in 1962. Currently, to avoid new drug status and the requirement of an approved NDA, a drug must be generally recognized as both safe and effective, for the purposes represented in the drug's labeling. The statutory definition of a new drug reads, in relevant part:

    Any drug . . . the composition of which is such that such
  drug 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.

21 U.S.C. § 321(p)(1). The criterion of effectiveness was added in 1962. Drug Amendments of 1962, Pub.L.No. 87-781, § 102(a)(1), 76 Stat. 780, 781. Before the 1962 amendment a drug avoided new drug status if it was generally recognized as safe, without regard to its effectiveness. Food Drug and Cosmetic Act of 1938, ch. 675, § 201(p)(1), 52 Stat. 1040, 1041-42.

If a drug is not generally recognized as safe and effective, and thus does not avoid new drug status, it may be introduced into commerce only upon approval by the FDA of an NDA. Currently, an NDA will be approved if, inter alia, the drug is proven to be safe and effective. 21 U.S.C. § 355(d). The criterion of effectiveness was added in 1962, at the same time that criterion was added to the definition of "new drug." Drug Amendments of 1962, § 102(c). Before the 1962 amendment the FDA reviewed NDAs for safety, but not for effectiveness. Food Drug and Cosmetic Act of 1938, § 505(d).

Drugs already on the market in 1962 were affected differently by the 1962 amendments, depending on whether they were on the market under NDAs, or whether they had avoided new drug status by virtue of general recognition as safe. Drugs marketed under NDAs were subject to having their FDA approval withdrawn; however, they were given a two-year grace period before approval of their NDAs could be withdrawn under the effectiveness criterion. Drug Amendments of 1962, § 107(c)(3). Drugs that were generally recognized as safe were given an apparently permanent exemption from the effectiveness criterion by this grandfather clause:

    In the case of any drug which, on the day immediately
  preceding the enactment date, (A) was commercially used or
  sold in the United States, (B) was not a new drug as defined
  by section 201(p) of the basic Act as then in force, and (C)
  was not covered by an effective application under section 505
  of that Act, the amendments to section 201(p) made by this
  Act [i.e., the effectiveness criterion] shall not apply to
  such drug when intended solely for use under conditions
  prescribed, recommended, or suggested in labeling with
  respect to such drug on that day.

Drug Amendments of 1962, § 107(c)(4). In addition, some drugs continued to be exempt from new drug requirements under a similar 1938 grandfather clause, which still appears in 21 U.S.C. § 321(p)(1). Food Drug and Cosmetic Act of 1938, § 201(p)(1).

Initially, only drugs covered by NDAs seemed to be affected at all by the 1962 amendments, and the FDA set out to review all the drugs then marketed under approved NDAs, to determine whether they met the new effectiveness criterion. This undertaking was known as the Drug Efficacy Study Implementation ("DESI"). Primarily because drugs generally recognized as safe tended not to require prescriptions under 21 U.S.C. § 353(b), almost all the drugs reviewed under DESI were prescription drugs. The DESI review covered approximately 4,000 drugs. Weinberger v. Hynson, Westcott and Dunning, Inc., 412 U.S. 609, 621, 93 S.Ct. 2469, 2479, 37 L.Ed.2d 207 (1973). Of that number, only 420 were OTC drugs. 37 Fed.Reg. 85 (1972).

In 1972, as DESI neared completion, the FDA turned its sights to drugs not covered by NDAs, almost all of which were OTC drugs. The 420 OTC drugs reviewed in DESI suggested an unsatisfactory state of affairs. Only about 25% of those OTC drugs were found to be effective for the purposes represented in their labeling. 37 Fed.Reg. at 85. Although OTC drugs that had been on the market since before 1962 ostensibly were shielded from the new effectiveness criterion by the 1962 grandfather clause, the FDA decided nonetheless to subject them to an effectiveness criterion. Instead of applying the effectiveness criterion of the new drug provisions, which the 1962 grandfather clause prohibited, the FDA read such a criterion into the separate prohibition of misbranding. 21 U.S.C. § 352. Drugs covered by the 1938 grandfather clause would be subject to both safety and effectiveness criteria under the misbranding prohibition. In announcing its OTC review, the FDA stated:

  It would be unreasonable and unjust to permit grandfathered
  drugs to remain on the market unchanged while competitive items
  must be reformulated and/or relabeled or removed from the
  market. The same scientific and medical determinations involved
  in reviewing the safety and effectiveness of nongrandfathered
  OTC drugs are also involved in determining whether
  grandfathered drugs are misbranded and thus are properly made
  in a single proceeding that will apply across the board to all
  products in a single therapeutic class.

37 Fed.Reg. at 86. The uniform standard to be applied in the OTC review thus would be that of "safe and effective and not misbranded." Id. Any drug not meeting this standard would be subject to seizure:

  on the ground that the drug is an unapproved new-drug or is a
  misbranded drug (if it is exempt from the new-drug definition
  under the 1938 or 1962 grandfather clause).

Id. Grandfathered drugs that were not effective for the purposes represented in their labeling would not be considered new drugs, but they would be considered misbranded and thus required to change their labeling; they therefore would lose their grandfathered status, which was dependent upon their not changing their labeling. Id.

Having determined that it would subject grandfathered drugs to an effectiveness criterion, the FDA faced one of the problems which inspired the 1962 grandfather clause: suddenly, all grandfathered drugs were on the market illegally, unless they were effective and thus not misbranded. Estimates of the number of OTC drugs on the market, apparently including those introduced since 1962, ranged from 100,000 to 500,000. Reviewing these drugs on a case-by-case basis would not be possible. The FDA therefore decided to proceed by way of administrative rulemaking, rather than case-by-case basis would not be possible. The FDA therefore decided to proceed by way of administrative rulemaking, rather than case-by-case adjudication, to set standards by which drugs in various categories could be considered safe and effective and not misbranded. Panels of experts would be convened, and they would propose monographs setting standards for various categories of products. The FDA then would study these monographs, amend them if necessary, and ultimately promulgate them as regulations. Drugs conforming to the standards set out in the applicable monograph would be deemed safe and effective and not misbranded, and could be marketed without an approved NDA. Drugs not conforming to standards would be considered new drugs or misbranded drugs, and would be required to submit an NDA for approval. Id. at 85-86.

As part of its regulatory strategy of setting standards for categories of drugs rather than reviewing OTC drugs on a case-by-case basis, the FDA adopted a general enforcement stance of deferring regulatory action against individual drugs until the OTC review was completed and the final monographs promulgated. The CPG relied on by defendants, directing FDA personnel not to submit drugs for regulatory action under certain circumstances, evidently derives from this decision to defer action against individual drugs pending completion of the OTC review.


In announcing its OTC review, the FDA proposed 26 broad categories of drugs to be reviewed, one of which was "Dentifrices and dental products such as analgesics, antiseptics, etc." 37 Fed.Reg. at 89; 21 C.F.R. § 330.5 (1983). Shortly thereafter, the public was invited to submit data relevant to this portion of the OTC review. 38 Fed.Reg. 2781 (1973). The Panel appointed to review this category later subdivided the category into five therapeutic classifications: 1) agents for oral mucosal injury, 2) agents for the relief of oral discomfort, 3) anticaries agents, 4) dental plaque disclosing agents, and 5) denture aids. See 45 Fed.Reg. 20666, 20667 (1980). Because it is intended to combat both dentinal hypersensitivity and caries, defendants' toothpaste combines categories 2) and 3).

In March 1980 the Panel issued its proposed monograph for anticaries products. 45 Fed.Reg. 20666. The Panel approved several active ingredients for anticaries products, including sodium monofluorophosphate, which is one of the two active ingredients used in defendants' toothpaste. Id. at 20682, 20690. The Panel recommended that products combining an anti-caries agent with some other agent be considered new drugs and be required to submit NDAs for approval. Id. at 20674. In May 1982 the Panel issued its proposed monograph for oral discomfort products. 47 Fed.Reg. 22712 (1982). With respect to potassium nitrate, which is the other active ingredient used in defendants' toothpaste, the Panel concluded that the data in the record were insufficient to allow a determination whether it was effective as a tooth desensitizer. Id. at 22725 (table), 22751, 22754. The Panel recommended that certain combinations be permitted, but none of those combinations included an anticaries agent. Id. at 22719-23.

In October 1982, during the period for comment on the proposed monograph for oral discomfort products, defendants submitted information relevant to the toothpaste in question, apparently for the first time. (Defendants' memo, ex. I.) In April and September 1983, after the comment period had closed, and after the defendants had begun marketing their toothpaste, defendants submitted additional information. (Defendants' memo, exs. J, K.) During this time the FDA informed defendants that it considered the toothpaste to be a new drug which ...

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