GENUS MEDICAL TECHNOLOGIES, LLC, Plaintiff, v. UNITED STATES FOOD AND DRUG ADMINISTRATION, Defendant.
Civil Action No. 19-544 (JEB)
December 6, 2019
MEMORANDUM OPINION
Those drinking the contrast agent Vanilla SilQ before undergoing an X-ray or other imaging procedure likely spend no time pondering the central issue in this case: is this barium-sulfate product a drug or is it a medical device?
Plaintiff Genus Medical Technologies, LLC manufactures Vanilla SilQ products
The FDA here concluded that although the Vanilla SilQ products appeared to qualify as devices under the FDCA, they were also drugs and could be regulated accordingly. Plaintiff responded with this suit, and the parties have now cross-moved for summary judgment. Finding the agency’s action to be inconsistent with the Administrative Procedure Act and the FDCA, the Court will grant Plaintiff’s Motion for Summary Judgment and deny the FDA’s Crоss-Motion.
I. Background
To provide context for the factual background, the Court first sets out the statutory scheme.
A. Statutory Framework
The FDCA,
articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man or other animals.
an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including any component, part, or accessory, which is-- . . .
intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, in man or other animals, . . . and
which does not achieve its primary intended purposes through chemical action within or on the body of man or other animals and which is not dependent upon being metabolized for the achievement of its primary intended purposes.
Comparing these definitions yields two conclusions that are relevant here: first, all FDA-regulated diagnostic “devices” meet the “drug” definition. That is because of the overlap in the intended-use portions of their definitions.
1. Regulatory Schemes
The statutory distinctions between a drug and a device have meaningful and practical consequences. For starters, the
To market new prescription drugs, for example, a sponsor — generally the manufacturer — must submit a new-drug application demonstrating that the drug is safe and effective for its proposed use. See
By contrast, devices are reviewed and classified into three categories based on the risk they pose to the public. Class I devices are low risk — i.e., they “present no unreasonable risk of illness or injury” — and “are subject only to minimal regulations by ‘general controls.’” Medtronic, Inc. v. Lohr, 518 U.S. 470, 476–77 (1996) (quoting
Additionally, significant cost differences exist in both the development and the continued sale of drugs and devices. Plaintiff avers that the cost of seeking clearance to market its products as devices is estimated to be $60,000, whereas seeking approval to markеt them as drugs could be over half a million dollars in addition to a continuing annual cost north of $186,000. See ECF No. 9 (Plaintiff’s MSJ), Exh. 8 (Declaration of John E. Powers), ¶¶ 31–33.
2. Requests for Designation
When the classification of a product — viz., as a drug or a device — is unclear or in dispute, a sponsor can file a request for designation (RFD) to obtain a formal, binding determination from the FDA as to the “classification of the product . . . or . . . the component of the [FDA] that will regulate the product.”
B. Factual History
Since 2015, Genus has manufactured “Vanilla SilQ” — a line of barium-sulfate oral-solution contrast agents. See ECF No. 1 (Complaint), ¶ 25; JA at FDA8. These products are “ingested for diagnostic purposes.” JA at FDA14. The physical and chemical properties of barium sulfate — particularly its opacity — enable health-care providers to better visualize thе gastrointestinal tract when performing X-rays or computer tomography (commonly referred to as a CT scan).
Genus maintains that before and after it started producing Vanilla SilQ, it sought FDA clearance to distribute its products as devices.
In June 2016, the FDA conducted a three-day inspection of Plaintiff’s distribution facility.
The Warning Letter prompted further correspondence between the parties. See, e.g.,
With the parties at an impasse, Genus submitted an RFD, requesting that OCP classify its Vanilla SilQ products as devices.
On February 28, 2019, Genus filed suit in this Court. It challenges the FDA’s decision to regulate Vanilla SilQ рroducts as drugs rather than as medical devices on a number of different grounds, including that it was arbitrary and capricious, as well as in excess of statutory authority, thus violating the FDCA via the APA. See Compl., ¶¶ 46–55. Plaintiff has now moved for summary judgment, seeking, inter alia, a declaration requiring the FDA to regulate its products as devices. See Pl. Mot. at 2. Defendant, for its part, has countered with its own Motion for Summary Judgment, seeking affirmation of its classification decision.
II. Legal Standard
Although styled Motions for Summary Judgment, the pleadings in this case more accurately seek the Court’s review of an administrative decision. The summary-judgment standard set forth in
III. Analysis
In bringing its suit here, Plaintiff preliminarily maintains that the FDA’s response to its RFD was deficient because it failed to actually classify the products — that is, as drugs or deviсes. As a result, Genus believes that the agency must now accept its recommendation and classify Vanilla SilQ products as devices. Alternatively, and more substantively, it argues that even if the agency’s response was not deficient, the decision to regulate the products as drugs rather than devices violates the APA as arbitrary and capricious agency action taken in contravention of the
A. Designation Letter
Genus first contends that Defendant skirted its statutory responsibility by providing a deficient RFD response. See Pl. Mot. at 21–22. OCP observed that Vanilla SilQ barium-sulfate products “meet the definition of drug,” while “also appear[ing] to meet the definition of ‘device.’” JA at FDA2–3. It nonetheless concluded that it was appropriate for the CDER to review and regulate these products as drugs.
Genus’s semantics argument stretches too far. Contrary to its suggestion, the Act does not have a “magic words” requirement — that is, the agency need not use any specific terms in designating a product. Instead, the FDCA simply requires that the FDA, within 60 days of receiving an RFD, “determine the classification of the product . . . or . . . the component of the [FDA] that will regulate the product,” and then “provide to the person a written statement that identifies such classification or such component, and the reasons for such determination.”
B. APA/FDCA Violations
The harder question relates to Plaintiff’s claim that the FDA’s designation of its products as drugs rather than devices contravened the FDCA. On this score, Genus focuses on the exclusionary clauses in the device definition. See Pl. Mot. at 24; ECF No. 12 (Plaintiff’s Opposition and Reply) at 2. Specifically, it notes that a device, unlike a drug, “does not achieve its primary intended purposes through chemical action within or on the body of man or other animals” or through “being metabolized for the achievement of its primary intended purposes.” Pl. Mot. at 24 (quoting
In response, the agency argues that the fact that Plaintiff’s products “appear to meet the definition of ‘device’” does not end the matter. See ECF No. 10 (Def. Cross-MSJ) at 2 (quoting JA at FDA3). Because “the definitions of drug and device are overlapping, rather than mutually exclusive,” JA at FDA3 — i.e., because both are defined as “articles intended for use in the diagnosis of disease,”
With that backdrop, the Court tees up the issue: did Congress grant the agency the discretion to regulate any medical diagnostic device as a drug?
1. Legal Framework
To tackle this question, the Court turns to Chevron’s familiar framework. See Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984); see also, e.g., Shays v. FEC, 414 F.3d 76, 96 (D.C. Cir. 2005) (outlining Chevron framework); Republican Nat’l Comm. v. FEC, 76 F.3d 400, 404 (D.C. Cir. 1996). Under Chevron, the first step is to “examine the statute de novo, ‘employing traditional tools of statutory construction.’” National Ass’n of Clean Air Agencies v. EPA, 489 F.3d 1221, 1228 (D.C. Cir. 2007) (quoting Chevron, 467 U.S. at 843 n.9); see also Mount Royal Joint Venture v. Kempthorne, 477 F.3d 745, 754 (D.C. Cir. 2007) (court begins by “applying customary rules of statutory interpretation”). Courts consider “whether Congress has ‘unambiguously foreclosed the agency’s statutory interpretation.’” Vill. of Barrington v. Surface Transp. Bd., 636 F.3d 650, 659 (D.C. Cir. 2011) (quoting Catawba Cty. v. EPA, 571 F.3d 20, 35 (D.C. Cir. 2009)). “Congress may have done so . . . either by prescribing a precise course of conduct other than the one chosen by the agency, or by granting the agency a range of interpretive discretion that the agency has clearly exceeded.” Id. At this stage, courts afford an agency’s interpretation no special deference: “[I]f the agency has either violated Congress’s precise instructions or exceeded the statute’s clear boundaries then, as Chevron puts it, ‘that is the end of the matter’ — the agency’s interpretation is unlawful.” Id. at 660 (quoting Chevron, 467 U.S. at 842); see also Eagle Broad. Grp., Ltd. v. FCC, 563 F.3d 543, 552 (D.C. Cir. 2009) (if the “search for the plain meaning of the statute . . . yields a clear result, then Congress has expressed its intention as to the questiоn, and deference is not appropriate”) (quoting Bell Atlantic Tel. Cos. v. FCC, 131 F.3d 1044, 1047 (D.C. Cir. 1997)).
If, however, “the statute is silent or ambiguous with respect to the specific issue,” Chevron, 467 U.S. at 843, the analysis proceeds to “determine the deference, if any, [the court] owe[s] the agency’s interpretation of the statute.” Kempthorne, 477 F.3d at 754. Under this step, “[i]f Congress has explicitly left a gap for the agency to fill, there is an express delegation of authority to the agency to elucidate a specific provision of the statute by regulation. Such legislative regulations are given controlling weight unless they are arbitrary, capricious, or manifestly contrary to the statute.” Chevron, 467 U.S. at 843–44. When a “legislative delegation to an аgency on a particular question is implicit rather than explicit,” id. at 844, the Court must uphold any “‘reasonable interpretation made by the administrator’ of that agency.” Am. Paper Inst., Inc. v. EPA, 996 F.2d 346, 356 (D.C. Cir. 1993) (quoting Chevron, 467 U.S. at 844).
2. Chevron Step One
At the first step, the Court must use the “customary statutory interpretation tools of ‘text, structure, purpose, and legislative history’” to determine whether Congress’s intent regarding the FDCA is clear. California Metro Mobile Commc’n, Inc. v. FCC, 365 F.3d 38, 44–45 (D.C. Cir. 2004) (quoting Consumer Elecs. Ass’n v. FCC, 347 F.3d 291, 297 (D.C. Cir. 2003)).
In determining which of these definitions controls, the Court is guided by the “old and familiar rule” that “the specific governs the general.” RadLAX Gateway Hotel, LLC v. Amalgamated Bank, 566 U.S. 639, 645 (2012) (quoting Morales v. Trans World Airlines, Inc., 504 U.S. 374, 384 (1992)). Here, there is no dispute about which definition is more specific: Congress, as both parties agree, more narrowly defined devices. See JA at FDA212 (FDA Guidance) (characterizing device definition as “more restrictive”). There is good reason for that more specific definition to govern in this dispute. That is, a product that falls within both definitions is more appropriately classed as a device, else the device definition would be “swallowed” by thе more general drug definition. See RadLAX Gateway Hotel, 566 U.S. at 645; accord Bloate v. United States, 559 U.S. 196, 207 (2010) (“[G]eneral language of a statutory provision, although broad enough to include it will not be held to apply to a matter specifically dealt with in another part of the same enactment.”) (quoting D. Ginsberg & Sons, Inc. v. Popkin, 285 U.S. 204, 208 (1932)).
Put differently, adopting an interpretation in which a diagnostic product is a drug — even if it plainly falls under the device definition — would read out the exclusionary clauses altogether. That result would be at odds with the way courts ordinarily interpret statutes — namely, they attempt to give effect to all their provisions, “so that no part will be inoperative or superfluous, void or insignificant.” Corley v. United States, 556 U.S. 303, 314 (2009) (quoting Hibbs v. Winn, 542 U.S. 88, 101 (2004); then quoting 2A N. Singer, Statutes and Statutory Construction § 46.06, 181–86 (rev. 6th еd. 2000)).
What is more, the exclusionary clauses would not be the only casualties under the agency’s reading. If a product that meets both definitions is nonetheless treated as a drug, then the device-drug distinction would be rendered meaningless. Put otherwise, the FDA could classify any diagnostic device as a drug because no limiting principle would trammel its authority. That would turn the statutory scheme on its head. See K Mart Corp. v. Cartier, Inc., 486 U.S. 281, 291 (1998) (“In ascertaining the plain meaning of the statute, the court must look to the particular statutory language at issue, as well as the language and design of the statute as a whole.”). As set out above, supra Section I.A.1, Congress erected entirely different statutory and regulatory compliance regimes for drugs and devices, including separate systems for registration, market authorization, regulation, and reporting requirements. Compare, e.g.,
In the end, the plain text dictates the result here. Congress readily could have afforded the agency discretion to determine which of these pathways a product must take. It in fact has done so with respеct to agency decisions under other parts of the FDCA. See, e.g.,
3. Other Arguments
Not ready to throw in the towel, Defendant offers a number of other reasons why the Act grants it discretion to classify Vanilla SilQ products as drugs or, at the very least, is more ambiguous on this front than appears at first blush. None is persuasive.
a. Drafting History
The agency first points to evidence that Congress removed language from an earlier version of the FDCA that specifically excluded devices from the definition of drugs. See Pl. Mot. at 2, 10, 23. Because the statute now apparently contains definitional overlap, Defendant argues that Congress implicitly vested the FDA with discretion “to determine the appropriate regulatory regime . . . when a product satisfies both definitions.”
Some background is in order. For several years, the Act specified that a drug “does not include devices or their components, parts, or accessories.”
Significantly, in the same amendment, Congress added another category of medical products — “combination products” — to the FDA’s regulatory plate. See 104 Stat. at 4526 (codified as amended at
Congress, moreover, did not alter the essential nature of the device regulatory regime — a framework that has been in place since 1976. See Medical Device Amendment of 1976, Pub. L. No. 94–295, 90 Stat. 539 (1976) (establishing device regulatory regime). Notably, legislative history surrounding the implementation of this scheme makes clear that Congress intended the FDA “to classify all medical devices intended for human use into three regulatory categories (classes) based upon the extent of control necessary to insure the safety and efficacy of each such device.” H.R. Rep. No. 94–853, at 3 (1976) (emphasis added). Indeed, the House Committee Report notes that “[t]here is an apprehension that medical devices have not been clearly delineated from drugs and that legislation directing regulation of devices by the same system currently used for drugs would be inappropriate.”
The agency also cаlls attention to the definition of contrast agents as drugs in recently enacted legislation. See
b. Caselaw
Defendant’s position gains no traction from the principal cases on which it relies. Start with Bacto-Unidisk — a 1963 decision that involved a challenge to the agency’s decision to regulate a product as a drug, rather than as a device. See 394 U.S. at 789–91. The Supreme Court ruled in favor of the agency, finding that the product fell within the definition of drug. Id. at 792–93. In doing so, it explаined that “Congress fully intended that the Act’s coverage be as
Not so fast. To begin, the decision was issued in an era when devices were not subject to pre-market testing. See Bacto-Unidisk, 394 U.S. at 785. The only way to ensure the safety and efficacy of the product and subject it to pre-market authorization requirements was to classify it as a drug. Id. at 784–85, see id. at 798 (given “the Act’s overriding purpose to protect the public health . . . [and] to ensure that antibiotic products marketed serve the public with ‘efficacy’ and safety,’” Court liberally construed term “drug”). That, of course, changed when, in 1976, Congress amended the Act to introduce a comprehensive device regulatory regime. See 90 Stat. at 539 (1976) (amending Act “to provide for the safety and effectiveness of medical devices intended for human use”).
In tandem with these changes, Congress beefed up the device definition itself. At the time Bacto-Unidisk was deсided, the definition contained an earlier version of the intended-use language. See 394 U.S. at 789–90 (“intended for use in the diagnosis . . . of disease in man”). Congress later defined devices as products that did not achieve their “principal intended purpose” through chemical interaction with the body or through metabolization. See 90 Stat. at 575; see also 104 Stat. at 4526 (1990) (then amending “principal” to “primary”). It is no surprise that the Supreme Court recognized that the language of the statute as it then existed was “of little assistance in determining precisely what differentiates a ‘drug’ from a ‘device.’” Bacto-Unidisk, 394 U.S. at 799. For the reasons set out above, however, this is plainly no longer true. The Court concludes, accordingly, that the logic in Bacto-Unidisk does not decide the issue here.
Similarly, Bracco Diagnostics, Inc. v. Shalala, 963 F. Supp. 20 (D.D.C. 1997), does not carry the day for the agency. The district court there considered whether the FDA’s disparate treatment of two “functionally indistinguishable” products — i.e., one was regulated as a device while another as a drug — was arbitrary and capricious. Id. at 24, 28. It answered this question in the affirmative, finding it problematic for the agency to apply two different regulatory frameworks to essentially identical products. Id. at 24, 27–28. In its analysis, the court also stated: “[The products at issue] all likely meet both the definition of a drug and the definition of a device under the [Act], and the FDA therefore has discretion in determining how to treat them.” Id. at 28 (citing
So, Defendant argues, when a product meets the definition of both drugs and devices, the agency has discretion to decide into which category to place them. See Def. Cross-Mot. at 15, 23. The agency also believes that Bracco supports its decision to regulate all contrast agents — regardless of whether any one of them meets the device definition — as drugs for the sake of uniformity.
Bracco, however, is less helpful to the FDA than it initially appears. To be sure, it holds that an agency acts unlawfully when it treats differently products that are the same in all material respects. Such holding, however, arose on a motion for preliminary injunction and was not a final merits ruling. See 963 F. Supp. at 22. The injunction simply prohibited the FDA from proceeding with approval of the plaintiff’s product as a device until after it had resolved a citizen’s petition addressing whether the agency could treat as a device a product the other manufacturers of which had received approvаl to market as a drug. Id. at 23. The court left it to the FDA to decide whether the FDCA entitled the plaintiff to proceed under
Plaintiff, finally, is not maintaining that similarly situated products should receive disparate treatment. Rather, it posits that not all contrast agents are the same. Because the Vanilla SilQ products, unlike other contrast agents, do not chemically interact with the body, they should be treated as devices. See Pl. Reply at 27–28. In sum, Bracco does not suggest that the FDA can ignore the plain language of the FDCA; it does not have discretion to regulate all contrast agents uniformly, irrespective of their defining features under the statute.
IV. Conclusion
For these reasons, the Court will vacate Defendant’s decision to regulate Genus’s Vanilla SilQ products as drugs and will remand to the agency for further administrative proceedings consistent with this Opinion. A separate Order so stating will be issued this day.
/s/ James E. Boasberg
JAMES E. BOASBERG
United States District Judge
Date: December 6, 2019