On Petition for Review of a Final Decision of the Commissioner of Food and Drugs
Before: ADAMS, SLOVITER sand MANSMANN, Circuit Judges
Several novel issues regarding the required showing of efficacy of new drugs are presented in this appeal by four drug manufacturers from the Order of the Commissioner of the Food and Drug Administration (FDA) withdrawing approval for the oral protective enzymes (OPE's) that they manufacture. The Commissioners withdrew approval of the new drug applications for these drugs after concluding that there was a lack of substantial evidence that the OPECs will have the effects they are purported or represented to have for their intended conditions of use. Petitioners challenge the scope of the Commissioner's authority, the evidentiary rulings made in the proceedings, the Commissioner's evaluation of the evidence, and the conclusion reached. We have jurisdiction pursuant to 21 U.S.C. § 355(h).
The petitioners, who manufacture and market oral proteolytic enzymes, are Warner-Lambert (Warner), who produces the OPE Papase, and Armour Pharmaceutical Company, William H. Rorer, Inc., and Wallace Laboratories (collectively ARW), who presented their case jointly before the FDA and before this court, and who produce, respectively, the OPEs Chymoral, Ananase, and Avazyme. A fifth OPE that was also before the Commission is not before us on this appeal.*fn1
OPEs are prescription medications that the manufacturers claim are effective for use as adjunctive relief in alleviating swelling and inflammation associated with accidental trauma, surgical, obstetrical, and dental procedures, and infections and allergic reactions. Some of the drug companies claim that their OPEs will ease pain and accelerate tissue repair. See Joint Appendix (JA) at 17.
The manufacturers obtained FDA approval for the OPEs prior to 1962. At the time approval was granted, the Food, Drug, and Cosmetic Act required the FDA to determine only that a drug was safe for human use. In 1962, Congress amended the Act to require drug manufacturers to prove to the FDA that drugs they wished to market were effective as well as safe. Drug Amendments of 1962, Pub. L. No. 87-781, 76 Stat. 780 (codified in scattered sections of 21 U.S.C.). The 1962 amendments also required the FDA to reevaluate drugs that it had previously approved.*fn2
The Supreme Court opinion in Weinberger v. Hynson, Westcott & Dunning, Inc., 412 U.S. 609, 37 L. Ed. 2d 207, 93 S. Ct. 2469 (1973), reviews the legislative history leading to the 1962 amendments, the major provisions enacted, and the subsequent administrative actions to enforce the new statutory requirements. As the Court pointed out, substantial numbers of drugs were being marketed for which efficacy could not be shown. The panels evaluating 16,500 claims made on behalf of 4,000 drugs found that seventy percent of the claims were not supported by substantial evidence of effectiveness. Id. at 621. Only 434 drugs were found effective for all of their clinical uses. Id.
Pursuant to the statutory mandate, the FDA requested the OPE manufacturers to submit documentation showing the effectiveness of their drugs. Manufacturers of nine OPEs submitted data for evaluation. Based on these initial submissions, the Commissioner of the FDA found in 1970 that the OPEs were "possibly effective" for "diagnostic gastric lavage" and for relieving symptoms associated with the obstetrical procedure episiotomy, and that the OPEs lacked substantial evidence of effectiveness for all other claims. See 35 Fed. Reg. 10,393-94 (1970).*fn3
In the same notice, the OPE manufacturers were required to delete from their labeling the indications for which the drug has been classified as lacking substantial evidence. Id. at 10,394. They were also required to provide additional data which would constitute substantial evidence of the effectiveness of OPEs for those indications for which the drugs had been classified as "possibly effective." See id. Five years later, the FDA published an extensive review of the additional data submitted in which the agency concluded that the manufacturers had not supported any of their claims of effectiveness for any indication. Therefore, the FDA announced that it proposed to withdraw approval for the OPECs. See Notice of Opportunity for Hearing, 40 Fed. Reg. 30,995-31,014 (1975). Seven OPE manufacturers were granted a formal hearing on the question whether the OPEs were effective, the other manufacturers having withdrawn or having failed to submit data. See 44 Fed. Reg. 75,718-19 (1979). Before the hearing, two more OPE manufacturers withdrew. See JA at 10 n. 4.
After prehearing conferences in February and March, 1980, a hearing before an administrative law judge was held in July and August of that year. Warner and ARW submitted a total of 31 studies, 13 on behalf of Warner and 18 on behalf of ARW, to demonstrate the effectiveness of their OPEs.*fn4 In addition, the manufacturers presented the testimony of many of the investigators who conducted the studies. The manufacturers sought to bolster this evidence by the testimony of experts who testified that, based on their review of the submitted studies, the drugs had been shown to be effective. In opposition, the FDA produced the testimony of several employees of the agency's Bureau of Drugs and several outside experts.
In April 1981, the ALJ issued his initial decision in the matter. In a lengthy opinion that reviewed each of the studies submitted by the sponsoring manufacturer, the ALJ concluded that each study failed to meet the requirements for adequate and well-controlled clinical investigations. The ALJ thus found that the drug manufacturers had not met their statutory burden of producing evidence demonstrating that the OPEs were effective. The ALJ therefore ordered that approval for the drugs be withdrawn. See JA at 683.
The parties filed existence exceptions to the ALJ's decision with the Commissioner. Four years later, the Commissioner issued his decision withdrawing approval for the OPEs. The Commissioner rejected all the manufacturers' challenges to the conduct of the hearing. In a detailed opinion, the Commissioner reviewed each of the studies submitted by the manufacturers in support of the efficacy of the OPEs and found each one methodologically inadequate, although in some cases for reasons different than those upon which the ALJ had relied. The Commissioner also found that there was a lack of substantial evidence that the five OPEs have the effects represented, and, accordingly, he withdrew approval. The Commissioner stayed this decision pending judicial review. See 50 Fed. Reg. 31,245-46 (1985).
The Statutory and Regulatory Framework
Under the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. §§ 301-392, a drug manufacturer or sponsor cannot market a new drug*fn5 unless the FDA first approves the drug. See id. § 355. To obtain approval, a drug's sponsor must submit to the FDA.
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.
The Act requires drug manufacturers to show not only that the drug is safe but also to show by "substantial evidence" that the submitted drug "will have the effect it purports or is represented to have under the conditions of use prescribed, recommended, or suggested." Id. § 355(d)(5). Substantial evidence is defined in the Act as follows:
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.
Id. § 355(d). The statute mandates the same standard when the Commissioner is deciding whether to withdraw approval for a drug that previously received FDA approval. See id. § 355(e)(3).
Because the Act uses the plural "investigations," the FDA requires drug manufacturers to submit at least two "adequate and well-controlled" studies showing the effectiveness of the drug. See JA at 27.*fn6 The FDA has issued regulations defining "adequate and well-controlled" by several substantive criteria: (1) the study must select subjects in a way that assures that they are suitable for the study, that assigns subjects to test groups in a way designed to minimize bias, and that reduces the effect of other individual factors, such as the subjects' age, sex, or use of other drugs; (2) the study must explain its methodology, including the steps taken to minimize investigator and subject bias; (3) the study must use a method of control that permits "quantitative evaluation"; (4) the drug tested must be standardized for identity, strength, purity, quality, and dosage form. See 21 C.F.R. § 314.111(a)(5)(ii)(a)(2), (3), (4) & (b) (1984). The regulations also require that a study provide a clear statement of its objectives and a summary of the methods of analysis, and an evaluation of the data derived from the study. Id. § 314.111(a)(5)(ii)(a)(l) & (5). Uncontrolled studies alone are not sufficient to show efffectiveness, but the FDA will consider them as corroborative support. See id. § 314.111(a)(ii)(c). A failure to meet any one of these criteria renders the study unacceptable for meeting the statutory requirement of substantial evidence.*fn7
Judicial review of the Commissioner's decision is pursuant to 21 U.S.C. § 355(h), which provides that the Secretary's findings of fact "if supported by substantial evidence, shall be conclusive." In addition, under the Administrative Procedure Act, a reviewing court shall "set aside agency action, findings, and conclusions found to be. . . arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A). Although our review of the Commissioner's legal decision is plenary, it is clear that to the extent the Commissioner's decisions involves interpretation of the Food, Drug, and Cosmetic Act, we must give "considerable weight" to his construction. See Chevron, U.S.A., Inc. v. Natural Resources Defense Counsel, Inc., 467 U.S. 837, 104 S. Ct. 2778, 2782, 81 L. Ed. 2d 694 (1984).
The drug companies have filed extensive challenges to the Commissioner's decision. They attack the Commissioner's determination that each of the 31 investigations that they submitted failed to meet the regulatory criteria for an adequate and well-controlled investigation. The Commissioner filed an exhaustive opinion of 585 pages, in which he gave painstakingly reviewed each investigation and gave at least two reasons why each was rejected. We will not discuss each investigation, but will refer to particular studies when appropriate or as illustrative.
In addition of challenging the Commissioner's rejection of the individual studies, the drug companies present certain general challenges to the Commissioner's decision. All argue that the Commissioner gave inadequate weight to the testimony and opinions of their expert witnesses, ARW argues that the Commissioner improperly required that the clinical investigations show therapeutically significant evidence of improvement, and all claim that the Commissioner erred by failing to find that they had established effectiveness under the statutory standard. Warner also raises two procedural issues relating to the ALJ's conduct of the proceedings specific to it. It contends that the ALJ impermissibly allowed the hearing to extend beyond the issues outlined in the prehearing stipulation and erred by excluding the direct testimony of three of Warner's experts.
We will consider first petitioners' argument that the Commissioner improperly substituted his view for that of the experts. If petitioners are correct, then, ...