F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
JUL 21 2000
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT
PHARMANEX, a Delaware
corporation authorized to do business
in the State of Utah,
No. 99-4087
Plaintiff - Appellee,
vs.
DONNA SHALALA, in her official
capacity as Secretary of the United
States Department of Health and
Human Services; MICHAEL
FRIEDMAN, in his official capacity as
First Deputy Commissioner of the
Food and Drug Administration,
Defendants - Appellants.
---------------------------------------
NATIONAL ORGANIZATION OF
RARE DISORDERS; MERCK & CO.,
INC.; NATIONAL NUTRITIONAL
FOODS ASSOCIATION,
Amicus Curiae.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
(D.C. No. 97-CV-262-K)
Richard M. Cooper (and Helen I. Dooley, Williams & Connolly, Washington,
D.C. and Alan L. Sullivan, Snell & Wilmer, Salt Lake City, Utah, and Stuart M.
Pape and Daniel A. Kracov, Patton Boggs, Washington, D.C., with him on the
brief), for Plaintiff - Appellee.
Irene M. Solet (and Scott R. McIntosh, Attorneys, Appellate Staff, Civil Division,
and David W. Ogden, Acting Assistant Attorney General, Department of Justice,
Washington, D.C.; David J. Schwendiman, United States Attorney, Salt Lake
City, Utah; Margaret Jane Porter, Chief Counsel and Neal Parker, Associate Chief
Counsel, Food and Drug Administration, Rockville, Maryland, with her on the
briefs), for Defendant - Appellant.
Kenneth C. Bass, III, David G. Adams, Nathan A. Beaver, Venable, Baetjer,
Howard & Civiletti, Washington, D.C., for Amicus Curiae National Organization
of Rare Disorders and Merck & Co., Inc.
Alan Charles Raul, Sidley & Austin, Washington, D.C., for Amicus Curiae
National Nutritional Foods Association.
Before KELLY, PORFILIO, Circuit Judges, and ALLEY *, Senior District
Judge.
KELLY, Circuit Judge.
This case requires that we address the scope of 21 U.S.C. §
321(ff)(3)(B) as it relates to the FDA’s power to regulate dietary supplements.
Appellants (hereinafter, “FDA”) appeal from the federal district court’s order
setting aside the FDA’s Administrative Decision of May 20, 1998. Our
jurisdiction arises under 28 U.S.C. § 1291, and we reverse and remand for
resolution of record based arguments not reached below.
*
Honorable Wayne E. Alley, Senior District Judge, United States District
Court of the Western District of Oklahoma, sitting by designation.
-2-
Background
Plaintiff-Appellee, Pharmanex, markets a product, Cholestin, that is
intended to promote healthy cholesterol levels. Cholestin is made from red yeast
rice, and contains a natural substance, mevinolin, which is chemically identical to
the active ingredient, lovastatin, in the prescription drug, Mevacor. 1
Mevacor was
approved by the FDA in 1987 for the treatment of high cholesterol and heart
disease. On April 7, 1997, the FDA advised Pharmanex that it considered
Cholestin to be a drug, which may not be marketed without FDA approval. While
discussions between the parties were ongoing, the FDA issued a Notice of
Detention and Hearing that prevented importation of a shipment of red yeast rice
for encapsulation into Cholestin. On May 20, 1998, the FDA issued a final
decision, holding that Cholestin does not meet the definition of “dietary
supplement” provided by 21 U.S.C. § 321(ff)(3)(B)(i), and is thus subject to
regulation as a drug. Subsequently, Pharmanex filed an action in district court,
seeking declaratory and injunctive relief, and asking the court to hold unlawful
and set aside the FDA’s decision. The district court granted a preliminary
injunction, and ultimately entered a final order setting aside the FDA decision,
holding that Cholestin is a “dietary supplement” within the definition set forth by
§ 321(ff). The district court based its decision on the determination that §
1
Hereinafter, “lovastatin” will refer both to mevinolin and lovastatin.
-3-
321(ff)(3)(B) refers unambiguously to finished drug products, rather than their
individual constituents. Thus, it was unnecessary for the district court to reach a
number of issues raised by both parties. It did not reach Pharmanex’s claim that
the FDA was arbitrary and capricious in determining (1) that Pharmanex, in
manufacturing and marketing Cholestin, was manufacturing and marketing
lovastatin; and (2) that lovastatin had not been marketed as a dietary supplement
or as a food before its approval as a new drug. While the district court remarked
in passing that red rice yeast is a food that has been consumed for centuries in
China and decades in the U.S., both parties agree that this was not equivalent to
ruling on the FDA’s prior determinations. Moreover, the district court did not
pass on Pharmanex’s claims that (1) under § 321(ff)(3), how a supplement is
manufactured (i.e., to enhance the presence of one of its ingredients) is irrelevant;
and (2) the FDA did not adequately explain its departure from its prior
interpretation that approval of a new drug is an approval only of a product, not an
active ingredient.
Discussion
As noted at the outset, this case involves an interpretation of 21 U.S.C. §
321(ff)(3)(B) of the Food, Drug, and Cosmetic Act (hereinafter, “FDCA”), as
amended by the Dietary Supplement Health and Education Act, Pub. L. No. 103-
-4-
417 (1994) (hereinafter, “DSHEA”). Because we are confronted with conflicting
interpretations of the statute that the Food and Drug Administration is charged
with administering, the analytic framework set forth in Chevron, U.S.A. v.
Natural Resources Defense Council, Inc. , 467 U.S. 837 (1984), governs our
analysis. See FDA v. Brown & Williamson Tobacco Corp. , 120 S.Ct. 1291, 1300
(2000). That is, we must decide, using the traditional tools of statutory
construction, “whether Congress has directly spoken to the precise question at
issue.” Id. (quoting Chevron , 467 U.S. at 842). If so, that is the end of the
matter, and Congress’ clear intent controls. If the statute is silent or ambiguous
as to the specific issue before us, then we must defer to the agency’s
interpretation, if it is based on a permissible construction. Id. We need not
conclude that the agency construction is the only one possible, or even that we
would have so construed the statute had the issue arisen in a judicial proceeding.
Rather, we will give effect to the agency’s interpretation unless it is arbitrary,
capricious, or manifestly contrary to the statute. See Chevron at 844. We accord
the agency such deference, given its special institutional competence regarding
the “facts and circumstances surrounding the subjects regulated,” particularly
those which touch and concern competing views of the public interest. See
Brown & Williamson , 120 S.Ct. at 1300.
In evaluating whether Congress has squarely and unambiguously addressed
-5-
the question before us, we need not limit ourselves to scrutiny of the discrete
statutory section in isolation. Rather, we examine the statutory provision in
context. See Brown & Williamson , 120 S.Ct. at 1300-01. We must “interpret the
statute ‘as a symmetrical and coherent regulatory scheme,’ and ‘fit, if possible, all
parts into an harmonious whole.’” Id. (citations omitted). In this case, we must
determine whether Congress unambiguously manifested its intent to exclude only
finished drug products (rather than ingredients) from the definition of dietary
supplement in § 321(ff)(3)(B), which states in relevant part:
The term ‘dietary supplement’. . . does . . . not include . . .
an article that is approved as a new drug under section 355
of this title[ 2], . . .which was not before such approval,
certification, licensing, or authorization marketed as a
dietary supplement or as a food. . . .
The Parties’ Contentions
The FDA argues that the phrase “an article that is approved as a new drug”
is properly understood to contemplate active ingredients 3
as well as finished drug
products. 4
To support this claim, FDA makes what is effectively a textual
2
“Section 355 of this Title” refers to 21 U.S.C. § 355, “New Drugs,”
which sets forth the requirements for applications for approval of drug products,
and discusses market exclusivity provisions.
3
“Active ingredient” means “any component that is intended to furnish
pharmacological activity or other direct effect. . . .” 21 C.F.R. 210.3(b)(7).
4
“Drug product” is defined as “finished dosage form. . . that contains a
drug substance, generally, but not necessarily, in association with one or more
drug ingredients.” 21 C.F.R. 314.3(b).
-6-
argument, pointing out that the word “article” is used throughout the FDCA to
connote both component and finished drug product. The FDA notes that §
321(ff)(1) and (2) refer to a dietary supplement as a “product” with certain
qualities, whereas § 321(ff)(3)(B) uses the word “article,” a much broader term.
Moreover, the FDA contends that the district court erred in finding that the phrase
“approved as a new drug” is dispositive evidence of Congress’ unambiguous
intent to restrict the application of § 321(ff)(3)(B) to finished drug products.
Additionally, the FDA argues that the district court misconstrued judicial and
regulatory authorities to support its finding of clear Congressional intent, and its
conclusion that in the past, the FDA has endorsed statutory interpretations
squarely contrary to those of the instant case. The FDA also asserts that the
district court’s reliance on legislative history was misplaced. Finally, the FDA
argues that the interpretation advanced by the district court and Pharmanex would
undercut the broad purposes of the FDCA, with respect to orphan drugs, pioneer
drugs, and leave a gap in protection for the public.
The essence of Pharmanex’s argument is that the plain meaning of 21
U.S.C. § 321(ff)(3)(B)(i) cannot exclude Cholestin or lovastatin from the
definition of “dietary supplement.” Pharmanex contends that Cholestin cannot be
“an article that is approved as a new drug” because it was never approved as a
new drug. Additionally, Pharmanex asserts that “an article that is approved as a
-7-
new drug” cannot apply to lovastatin because an ingredient is never “approved as
a new drug.” Moreover, Pharmanex claims that the definition of “new drug,” §
321(p), itself precludes § 321(ff)(3)(B) from applying to drug components, as
they are not approved, are not the subject of investigation, and do not have
labeling. Additionally, Pharmanex contends that in the past, the FDA has
advanced the very definition of “new drug” that it now resists. Pharmanex also
argues that the FDA’s interpretation defeats the unambiguously articulated
policies enshrined in DSHEA and would produce absurd results. Pharmanex
disputes the FDA’s claim that limiting § 321(ff)(3)(B) would leave a gap in
public protection, arguing that dietary supplements are adequately regulated by
other provisions of FDCA. Finally, Pharmanex asserts that the FDA’s arguments
about statutory ambiguity are in error.
Plain Language
a. Statutory Text
The district court resolved this matter by concluding that Congress had
clearly and unambiguously expressed its intent to limit the application of §
321(ff)(3)(B) to finished drug products. Having carefully reviewed the text of the
provision in question, other relevant statutory materials, legislative history, and
the parties’ above arguments, we reach the opposite conclusion. We begin, as
always, with the language of the provision in question. First, the use of the word
-8-
“article” creates ambiguity. As the FDA points out, the term has a broad meaning
throughout the FDCA, alternatively referring both to products and their individual
constituents. See 21 U.S.C. § 321(g)(1)(A)-(D) (using “article” to refer to both
drugs and their components). The use of the broad term “article” in §
321(ff)(3)(B) is especially striking in contrast with the immediately preceding
sections, §§ 321(ff)(1) and (2), which use the word “product” to expand on the
definition of dietary supplement. The drafters could have clarified their intent by
using the words “active ingredient” rather than “article,” as is used in other
provisions of the FDCA. See generally , 21 U.S.C. §§ 355(c)(3)(D)(i),
355(j)(2)(A)(ii)(I)-(II). Instead of using the more precise terms such as “product”
and “active ingredient” or some combination of the terms, the drafters opted for
the more general expression “article.” This suggests ambiguity.
Further suggesting ambiguity, the previous section, § 321(ff)(3)(A), refers
to “the article, when used as or in a dietary supplement . . .(emphasis added).”
The clause at issue here, § 321(ff)(3)(B), omits these descriptive phrases. It could
be that the omission reflects the drafters’ intent to use “article” to comprehend
both product and components in § 321(ff)(3)(A), but not for purposes of §
321(ff)(3)(B). Alternatively, the drafters could have omitted the prepositions
because they were superfluous, as 321(ff)(3)(A) has already established that
“article” contemplates both product and ingredient. The drafters’ intent in this
-9-
respect is altogether unclear.
We reject Pharmanex’s contention that the phrase modifying “article,”
namely, “approved as a new drug,” sufficiently clarifies the section for purposes
of our analysis. Pharmanex argues that this phrase resolves any doubt as to the
scope of § 321(ff)(3)(B). That is, the clause could not possibly apply to drug
components because components are never “approved as a new drug.” Pharmanex
argues that approval only attaches to drug products. Additionally, the very
definition of “new drug,” 21 U.S.C. § 321(p), refers by its terms only to drug
products. We do not find these arguments persuasive.
While it is true that the FDCA provisions relating to approval of new drugs,
21 U.S.C. § 355, discuss approval in the overarching context of finished product
approval, it is too simple to suggest that ingredients are in no sense “approved” in
the new drug approval process. See e.g. , 21 U.S.C. § 355(c)(3)(D)(i)-(ii)
(referring to a drug, “no active ingredient . . .of which has been approved” as part
of the new drug approval process). It is evident from § 355 that approval of
active ingredients is integral to the overall new drug approval process. See e.g.
21 CFR § 314.50(d)(1)(i)-(ii) (requiring a listing and description of drug
substance and drug product components as part of the application for new drug
approval). The use of the phrase “approved as a new drug” cannot bear the
interpretive weight Pharmanex applies to it. It does not clarify the scope of §
- 10 -
321(ff)(3)(B) to the extent Pharmanex suggests.
We likewise reject Pharmanex’s contention that because the definition of
“new drug” in § 321(p) refers to composition, investigation, and labeling, it
clarifies the intent of § 321(ff)(3)(B), and precludes its application to active
ingredients. The definition of “new drug” found in § 321(p) provides in relevant
part:
(1) Any drug . . . the composition of which is such that
such drug is not generally recognized, . . . as safe and
effective for use under the conditions prescribed . . .in the
labeling thereof. . . .
(2) Any drug . . .the composition of which is such that such
drug, as a result of investigations . . .has become so
recognized, but which has not . . .been used to a material
extent or for a material time under such conditions.
As the FDA points out, this definition (including references to composition,
labeling and investigation) modifies the initial phrase “any drug.” As stated
previously, the term “drug” is defined in § 321(g) to include both finished drug
products as well as individual constituents. Thus, the definition of “new drug” is
largely colored by the ambiguity that attends the broad term “drug.” Moreover,
the claim that an ingredient cannot have composition finds no support in the
FDCA or common sense. Similarly, it is not accurate to suggest that drug
components are not the subject of investigation in any sense. See generally , 21
CFR § 312.23(a)(7)(i) (“Therefore, the emphasis in an initial Phase I submission
should generally be placed on the identification and control of the raw materials
- 11 -
and the new drug substance [defined in 21 CFR 314.3(b) as active ingredient]”).
In view of the preceding, we find that the definition of “new drug” does not itself
sufficiently clarify the drafters’ intent with respect to § 321(ff)(3)(B).
b. Prior Judicial and Regulatory Authorities
The district court emphasized that a court must assume that Congress drafts
legislation with knowledge of relevant pre-existing authorities that bear on
judicial interpretations of statutory terms. See Molzof v. U.S. , 502 U.S. 301, 307
(1992). Even so, the judicial and regulatory authorities upon which the district
court relied (and upon which Pharmanex now relies) for the proposition that only
finished drug products are approved under § 355, do not sufficiently illuminate
the meaning of § 321(ff)(3)(B) for our purposes.
United States v. Generix Drug Corp ., 460 U.S. 453 (1983), lends no support
to Pharmanex’s position, as this case only held that § 321(g)(1) is “plainly broad
enough to describe a completed drug product.” Id. at 458. The inclusion of drug
product within the ambit of § 321(g)(1) does not resolve the question of the
exclusion of drug ingredient, and is thus irrelevant to the questions before us.
Similarly, USV Pharm. Corp. v. Weinberger , 412 U.S. 655 (1973), does not
support Pharmanex’s contentions. In USV , the Court held that in the specialized
context of the “grandfather clause”of the 1962 amendments to the FDCA, the
phrase “any drug. . .covered by an effective [New Drug Application]” includes
- 12 -
both the specific product in the new drug application and all similar drugs
containing the same active ingredient. Id. at 664. It is true that the Court noted
in passing that generally speaking, the new drug approval process is manufacturer
specific. This dicta, however, does not elucidate the meaning of “approved as a
new drug” in § 321(ff)(3)(B) in such a way that precludes the FDA’s
interpretation.
In Pfizer, Inc. v. FDA , 753 F. Supp. 171 (D. Md. 1990), the FDA
successfully argued that “drug” in § 355(b)(1) and (c)(2) means “drug product,”
thus requiring Pfizer to get a new NDA for its tablet version of its previously
approved soft gelatin capsule version of nifedipine, on the grounds that although
it contained the same active ingredient, it was nevertheless a different drug. In
Apotex, Inc. v. Shalala , 53 F. Supp. 2d 454 (D.D.C.) aff’d without comment , No.
99-5231, 1999 WL 956686 (D.C. Cir. Oct. 8, 1999), the FDA successfully argued
that the market exclusivity accorded to one drug product did not extend so as to
preclude a generic product with the same active ingredient, (although of a
differing strength), from receiving a 180-day period of market exclusivity
pursuant to § 355(j)(5)(B)(iv). In an FDA decision that was part of the Apotex
litigation, the agency noted that “FDA could not approve an application that
requested approval of only the active ingredient . . . The Agency, therefore, can
only award such exclusivity to an [Abbreviated New Drug Application] applicant
- 13 -
for a drug product, and a particular strength.” FDA Decision, Docket No. 98P-
0547/CP1 & SUP at 3 n.3 (Dec. 4, 1998).
From these authorities, Pharmanex invites us to infer that because it is the
drug product, not the active ingredient to which approval attaches, it would not
make sense for the phrase “article that is approved as a new drug” to connote an
ingredient - but rather it can only refer to a finished drug product. We disagree.
Because these arguments arose in the specialized context of the Drug Price
Competition and Patent Term Restoration Act, Pub. L. No. 98-417 (1984), these
cases are of limited relevance to the instant matter. The Hatch-Waxman
amendments alter § 355 in certain provisions to establish periods of market
exclusivity for pioneer drugs, while streamlining the approval process for less
expensive generic drugs. Thus, in these cases, the FDA interpreted the word
“drug” to refer only to drug products to advance these very specific policy
objectives, and as such, these precedents do not illuminate Congressional intent
for § 321(ff)(3)(B) in the instant case. Moreover, it bears noting that “it is not
impermissible under Chevron for an agency to interpret an imprecise term
differently in two separate sections of a statute which have different purposes.”
Abbott Laboratories v. Young , 920 F.2d 984, 987 (D.C. Cir. 1990).
In sum, we reject Pharmanex’s argument that the plain language of §
321(ff)(3)(B) evinces a clear intent to exclude only finished drug products from
- 14 -
the definition of dietary supplement. In Brown v. Gardner , 513 U.S. 115, 118
(1994), the Supreme Court observed that “[a]mbiguity is a creature not of
definitional possibilities but of statutory context.” A corollary of this principle is
that for purposes of Chevron analysis, statutory clarity is a creature not of
definitional isolation, but of statutory context. Pharmanex isolates the discrete
phrase “article that is approved as a new drug,” and tries to import clarity,
ignoring the linguistic ambiguity that attends these words in the larger context of
the surrounding DSHEA provisions, and the FDCA more generally. As the
following section shows, Pharmanex’s argument is further undercut by the
policies that undergird DSHEA and FDCA.
Legislative History and Policies of DSHEA and FDCA
a. Legislative History
Turning to the legislative history, we find that the intended application of §
321(ff)(3)(B) is not elucidated, but rather becomes less clear. First of all, the
Senate Report upon which the district court relied, and which Pharmanex now
invokes, was explicitly disclaimed as a source of legislative intent. See Statement
of Agreement, 140 Cong. Rec. S14801 (Oct. 7, 1994), reprinted in 1994
U.S.C.C.A.N. 3523 (“It is the intent of the chief sponsors of the bill. . .that no
other reports or statements be considered as legislative history for the bill.”).
Without passing on the legitimacy or effectiveness of such a disclaimer, we find
- 15 -
that it certainly contributes to an overall sense of ambiguity as to the weight we
should accord to the statements contained within the disclaimed legislative
materials. The Statement of Agreement sheds no light on the question at hand, as
it is silent as to the application of § 321(ff)(3)(B) to finished drug products versus
active ingredients. The disclaimed Senate Report, S. Rep. No. 103-410 (1994),
does not support the conclusion that Congress intended § 321(ff)(3)(B) to apply
solely to finished drug products. The Senate Report does reflect a certain
antipathy for what is perceived as a history of onerous regulation of dietary
supplements by the FDA, but this alone does not address the question at hand.
The following statements, however, bear more directly on the present issue:
During consideration of S. 784, concerns were
expressed that manufacturers or importers of drugs could
avoid the drug approval process by marketing drug
products as dietary supplements. Although current
authorities should be adequate to deal with such potential
problems, the committee is sensitive to those concerns.
Accordingly, Senators Harkin and Hatch agreed to
formulate additional language prior to consideration of S.
784 in the Senate.
Under the substitute to S. 784 as approved by
committee, a substance which has been marketed as a
dietary ingredient in a dietary supplement , or otherwise as
a food, does not lose its status as a food. . .just because
FDA approves the substance for use as an active ingredient
in a new drug . . . .
S. Rep. No. 103-410, at V. § 3 (1994) (emphasis added). This passage suggests
that the scope of § 321(ff)(3)(B) is not limited to finished drug products, as
- 16 -
Pharmanex suggests, in that the subject matter of the Hatch/Harkin compromise
language includes “a substance which has been marketed as a dietary ingredient”
and “the substance [used] as an active ingredient in a new drug.” Thus, to the
extent that this report is evidence of legislative intent, it favors the FDA’s
interpretation. The above example demonstrates how the prior market clause
would protect a dietary supplement with an ingredient that is subsequently
approved as the active ingredient in a new drug. Provided that the dietary
ingredient had been previously marketed as such, it would not lose its food status.
By extension to the scenario that apparently troubled some legislators, the above
language suggests that if a drug manufacturer sought to market a dietary
supplement containing a natural substance that is the active ingredient in a
previously approved drug product, it would be subject to the strictures of §
321(ff)(3)(B)’s exclusionary clause, unless it could show that prior to approval of
the new drug, the natural substance was marketed as a dietary ingredient or food.
b. Policies of DSHEA and FDCA
The policies undergirding DSHEA and FDCA do not support a finding that
Congress clearly intended § 321(ff)(3)(B) to apply only to finished drug products.
It is true that DSHEA was enacted to alleviate the regulatory burdens on the
dietary supplement industry, allowing consumers greater access to safe dietary
supplements in order to promote greater wellness among the American
- 17 -
population. See generally Dietary Supplement Health and Education Act, Pub. L.
No. 103-417, § 2 (1994). However, the clause at issue in the instant case
constitutes a limiting principle to this goal. That is, § 321(ff)(3)(B) specifically
excludes certain articles from the definition of dietary supplement. To find that
this clause only refers to finished drug products would be to restrict this provision
so as to render it without practical application. Under the interpretation proposed
by Pharmanex, a manufacturer could identify a naturally occurring substance that
was identical to or had the same pharmacological effect as the active ingredient in
a prescription drug, and market it in a dietary supplement. The manufacturer
could evade the strictures of § 321(ff)(3)(A) by arguing, as Pharmanex does, that
the naturally occuring ingredient is not a “finished drug product,” and that §
321(ff)(3)(B) would apply only if the prescription drug itself were being held out
as a dietary supplement. See Aplee. Br. at 38-39.
To permit this result would contravene one of the primary objectives of the
FDCA, namely “to ensure that any product regulated by the FDA is ‘safe’ and
‘effective’ for its intended use.” Brown & Williamson , 120 S. Ct. at 1301
(quoting 21 U.S.C. § 393(b)(2) (1994 ed., Supp. III) (defining the FDA’s
mission)). We understand Pharmanex’s argument that dietary supplements are
already adequately regulated by provisions such as 21 U.S.C. § 342(f)(1) (setting
forth provisions governing adulterated dietary supplements), but Pharmanex has
- 18 -
not adequately responded to the FDA’s strenuous objection that these provisions
only empower the FDA to remove unsafe products rather than preclude their entry
into the marketplace ab initio . Pharmanex represents only that premarket
notification would almost surely be required by § 21 U.S.C. § 350b (provision
governing new dietary ingredients). See Aplee. Br. at 61. This is not a sufficient
response to the concerns raised by the FDA. More importantly, it is not sufficient
to demonstrate the clarity necessary under Chevron to preclude deference to the
FDA’s interpretation of § 321(ff)(3)(B).
To permit manufacturers to market dietary supplements with components
identical to the active ingredients in prescription drugs would, as the FDA points
out, contravene the incentive structures in place in the FDA for the development
of orphan drugs and pediatric drugs. Pharmanex responds that DSHEA does not
contemplate such incentives, and is not intended to advance these policies. This
argument is unpersuasive for our purposes, as we are instructed to evaluate the
statute as a harmonious whole, rather than in discrete sections. See supra , at 5-6.
Finally, we reject Pharmanex’s argument that the FDA’s interpretation
would produce absurd results, by subjecting to regulation all the traditional food
substances that are active ingredients in new drugs. The FDA’s reading of the
prior market clause would protect such substances if they did, in fact, have a
history of marketing as a dietary supplement or food substance. As the FDA
- 19 -
interprets § 321(ff)(3)(B), the exclusionary clause would reach naturally
occurring substances identical or indistinguishable from the active ingredients in
new drugs, provided that the substance in question was not previously marketed
as a food or dietary substance. This comports with common sense and the overall
purposes of the FDCA. It bears noting that many prescription drugs are derived
from natural substances that are not benign. For example, “digitalis is extracted
from purple foxglove, morphine from poppy, and quinine from cinchona bark.”
Laura A. W. Khatcheressian, Regulation of Dietary Supplements: Five Years of
DSHEA , 54 Food & Drug L.J. 623, 634 (1999).
Thus, the policies of DSHEA and FDCA do not move this court to the
conclusion that § 321(ff)(3)(B) is clearly meant only to apply to finished drug
products. In fact, in light of the foregoing, it seems that to so interpret the
provision would be to restrict its scope so as to render it a meaningless limitation,
and also contravene the fundamental purposes of the FDCA.
Conclusion
As stated previously, § 321(ff)(3)(B) represents the limiting principle of
DSHEA’s general purpose, namely, to assuage the regulatory burdens on the
dietary supplement industry. The provision balances this goal with the other
policies of the FDCA, in effect carving out breathing room for dietary
- 20 -
supplements while ensuring that drug manufacturers will not exploit this
flexibility to make an end-run around the strictures of the new drug approval
process. Congress has not specified the exact contours of this balance, choosing
to use broad terminology in crafting the provision. Considering the lack of
linguistic clarity and the overall statutory context, we hold that § 321(ff)(3)(B) is
sufficiently ambiguous to merit Chevron deference. While Pharmanex’s argument
is linguistically possible, we are not compelled to adopt the conclusion that
Congress clearly intended to limit § 321(ff)(3)(b)’s application to finished drug
products, in light of the statutory context and the surrounding provisions.
Deference is particularly appropriate in the instant case, which involves important
questions of public health and safety. Additionally, we hold that the FDA’s
interpretation of § 321(ff)(3)(B) is not arbitrary, capricious, or manifestly
contrary to the statute. Accordingly, we REVERSE and REMAND for
consideration of the record based issues not reached below.
- 21 -