United States District Court For the District of New Jersey

United States of America, Plaintiff, v. Barr Laboratories, Inc., et al., Defendants - Page 2

Civil Action No. 92-1744  OPINION

Wolin, District Judge

Currently before the Court is plaintiff's application for a preliminary injunction directing defendants to suspend, recall or revamp numerous products in their current product line. Plaintiff filed this action in the United States District Court in the southern District of New York on June 12, 1992, alleging that defendants violated the Federal Food, Drug, and Cosmetic Act.  In accordance with the first-filed rule, the case was transferred to the District of New Jersey on June 26, 1992, where it was consolidated with an action defendants brought against plaintiff on April 24, 1992, seeking relief from allegedly ad hoc drug regulations.  On July 10, 1992, the Court filed case management and protective orders.  Beginning on August 17, 1992, and continuing intermittently to October 12, 1992, through the testimony of inspectors, experts and employees, the parties presented exhaustive but conflicting views of defendants' business practices.  At the Court's direction, on October 26, 1992, the parties submitted proposed findings of fact and conclusions of law.

BACKGROUND

Each day with confidence and hope millions of people in the United States and other countries reach for pills, powders, capsules and syrups to relieve or prevent an infinite number of physical and mental ailments.  The weighty task of ensuring the integrity of these products, frequently unquestioned by most consumers, falls to the Food and Drug Administration, which monitors the practices of the drug industry through a system of approvals and investigations.  Built into this maze of often ambiguous rules, however, is the recognition that drug manufacturers are businesses, which must follow efficient as well as effective procedures.

The current conflict surrounding these rules is best characterized as a confrontation between a humorless warden and his uncooperative prisoner.  Exchanging heavy blows, the parties generated a record of more than twenty-three hundred pages of testimony, almost four hundred exhibits and numerous lengthy declarations.  The plaintiff presented two witnesses, a government inspector, David Mulligan, and a regulatory expert, Dr. Robert Gerraughty.  Defendants countered with a statistician, Dr. Sanford Bolton, their own regulatory expert, Dr. Christopher Rhodes, an analytical chemist, Dr. Norman Atwater, an expert in pharmaceutical biology, Dr. Murray Cooper, and Barr employees.   These witnesses revealed an industry mired in uncertainty and conflict, guided by vague regulations which produce tugs-of-war of varying intensity.

The divergent views presented to the court reflect not only a difference of perspective, but also the changes made at Barr Laboratories since the first threat of this litigation.  As a result, the record is a composite of two trials:  the case that was and the case that is.  (1789:6 (discussion between Court and Ms. Kaswan));¹ Barr Response ¶ 63.  As such, the bases upon which some of the government's criticisms rest have disappeared during the course of this litigation.  Wary of this timing element, the Court has reviewed the lengthy record and the parties' proposed findings with the dual desire to protect an unsuspecting public and to avoid unnecessarily burdensome rules and now makes the following findings of fact and conclusions of law.

I. Findings of Fact

A. The Parties

1. Plaintiff, United States of America, brought this action on behalf of the Food and Drug Administration ("FDA"), an agency within the United States Department of Health and Human Services.

2. Defendant Barr Laboratories, Inc. ("Barr") is a manufacturer and distributor of drug products in the interstate and foreign commerce of the United States.   Barr is incorporated under the laws of the State of New York and is doing business in Northvale, New Jersey and Pomona, New York.

3. Barr currently manufactures sixty drug products.  Before this action was commenced, Barr voluntarily suspended the production and distribution of 115 drug products pending further order of the Court.

4. From 1970 until January 5, 1993, defendant Edwin A. Cohen was Barr's President and Chief Executive Officer and was in charge of day-to-day operations of Barr.  His current title is Chairman of the Board and Chief Executive Officer.

5. Defendant Gerald F. Price is Barr's Executive Vice President of Operations and is responsible for the performance of Barr's quality assurance department.  He has held this position since 1990.

6. Defendant Ezzel-Din A. Hamza is Barr's Vice President of Technical Affairs and is responsible for regulatory affairs, research and development, and Barr's chemistry and microbiology laboratories.  He has held this position since 1989.

B. The Regulatory Scheme

7. Under the Federal Food, Drug and Cosmetic Act (the "Act"), a drug is adulterated if  "the methods used in, or the facilities or controls used for, its manufacture, processing, packing or holding do not conform to or are not operated or administered in conformity with current good manufacturing practice to assure that such drug meets the requirements of this chapter as to safety and has the identity and strength, and meets the quality and purity characteristics, which it purports or is represented to possess."  21 U.S.C. § 351(a)(2)(B).

8. Current Good Manufacturing Practice ("CGMP"), explained in greater, but by no means sufficient, detail in regulations promulgated by the FDA, see 21 CFR Parts 210 and 211, sets the minimum standards for drug manufacturers.   Designed as a quality control measure to prevent super- and sub-potency, product mix-ups, contamination, and mislabeling, (870:20; 872:3 (Gerraughty)), the CGMP regulations outline general rules for all aspects of drug manufacture including buildings and facilities, personnel, equipment, drug components and containers, production, packaging and labeling, and record-keeping.  Failure to comply with CGMP regulations renders any resulting drug product "adulterated" and the drug product and its producer subject to regulatory action.  21 C.F.R. §210.1(b).

9. Congress recognizes the United States Pharmacopeia ("USP"), a nonprofit corporation which develops drug product standards with the help of professionals from academia, the medical community, the pharmaceutical industry and the FDA, as an official compendium.  (1503:11 (Rhodes)).  The USP supplements the CGMP provisions, specifying both the types of tests firms must perform and the range of acceptable results these tests must generate for releasing drug products.  As with the CGMP regulations, the USP contains minimum testing requirements, (910:9 (Gerraughty)).  These criteria, however, rest on the assumption that the products to which they apply satisfy CGMP. (911:11 (Gerraughty)).

10. Firms outline their chosen standards and procedures in new drug applications (NDAs) or abbreviated new drug applications (ANDAs), which are submitted to the FDA for approval.   The ANDA guides a product's manufacture and release, but does not supersede the overarching CGMP requirements. (448:24 (Mulligan)).

11. Thus, the CGMP regulations provide the yardstick with which FDA investigators, and the Court in the instant action, measure firm behavior.  Ironically, the regulations themselves, whose broad and sometimes vague instructions allow conflicting, but plausible, views of the precise requirements, transform what might be a routine evaluation into an arduous task.

12. To the extent that the regulations create ambiguities, the industry can turn for guidance to literature from seminars and pharmaceutical firms, textbooks, reference books and FDA letters to manufacturers, (865:11 (Gerraughty)), or employ scientific judgment where appropriate.  The Court, however, cannot rely on industry practice alone to determine whether an individual firm meets the statutory requirements, since industry standards themselves must be reasonable and consistent with the spirit and intent of the CGMP regulations. (1258:24 (Gerraughty)).

C. FDA Investigatory Practice

13. FDA investigators conduct both pre-approval and general compliance inspections.   During a pre-approval inspection, investigators review pending ANDA applications, (414:7 (Mulligan)), while inspectors conduct compliance investigations to determine whether the firm is following CGMP.  After a compliance investigation, FDA inspectors must issue a Form 483 Notice of Inspectional Observations ("Form 483"), in which they record their observations about the firm's more serious CGMP violations.

14. FDA investigators conducted a general inspection of Barr's Northvale facility during August and September 1989 as well as separate general inspections of Barr's Northvale and Pomona facilities from May to September 1991.  After each inspection, the investigators issued Forms 483.

15. The 1989 Form 483, which contained six general observations, cited Barr for unvalidated manufacturing and cleaning processes, the lack of failure investigations, incomplete annual reviews and failure to explain retesting.  See exhibit 51.  In the 1991 Pomona inspection, the FDA criticized nineteen products extensively and made general comments about Barr's equipment and complaint logs, stability programs, raw material controls and documentation procedures.  See Exhibit 3.  The Northvale inspection that same year also censured individual products as well as failure investigations, validation and product mix-ups.  See Exhibit 1.

16. In February 1992, FDA investigators returned to the Barr facilities in Northvale and Pomona.  The resultant 1992 Forms 483 listed seventy-five and forty-seven criticisms for Northvale and Pomona, respectively, many of which also had been recorded during prior visits to Barr, in the areas of process validation, failure investigations and laboratory practices.  See Exhibits 2, 4.

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Footnotes

1Because of frequency with which the Court references the hearing transcript, citations to the record will denote the page, line and speaker as follows: (page:line (speaker)).

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