Professionals And Patients For Customized Care v. Shalala
By: LN on May 02, 2012 09:42:19 AM

Citation:  56 F.3d 592.

Summary:  Appellee came out with a policy to regulate the drug establishments. Appellant was issued a notice from the appellee claiming that their activities came under the regulations of the policy. Appellants claimed that the policy was a substantial rule and required to give notice and receive comment under the Administrative Procedure Code.

Facts:  In 1992 Food Drug and Administration (FDA) came out with a policy for addressing a problem in the pharmaceutical industry. The FDA was aware that many establishments were purchasing bulk quantities of drugs combining them with specific products without any prescription, and marketing them to practitioners and patients. FDA suspected that the drug establishments were engaged in speculative compounding. To combat it FDA came out with the policy. FDA issued the policy without complying with APA's notice-comment requirements. Appellants comprised individuals and entities who were engaged in the practice of pharmacy. They were issued notice by the appellee stating that their activities came under the policy regulations. Appellants claimed that the policy was a substantive rule and was invalid as the appellee had not given notice or received comments on the rule.

Issue:  Whether the district court was correct in holding that Food & Drug Administration (FDA) Compliance Policy Guide was not a substantive rule and was not subjected to the APA's notice - comment requirement?

Holding:  Yes, the district court was correct in holding that Food & Drug Administration (FDA) Compliance Policy Guide was not a substantive rule and was not subjected to the APA's notice - comment requirement.

Procedure:  Judgment of the district court was affirmed by the Appellate Court.

Rule:  The legal effects test and the substantial impact test allow a determination of the status of an agency rule at the moment the rule is promulgated.

Rationale:  The language of the policy purported to distinguish traditional compounding from the drug manufacturing, was not precise and discretionary. The rule only stated that FDA in its discretion addressed violations but it did not mandate a particular agency response when fixed thresholds were exceeded. The policy left to the discretion of the agency for deciding on enforcement action. Hence the policy was only discretionary and not substantive. Therefore the rule was exempted from the requirements of Administrative Procedure Act.

 

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Michael Mordechai YadegariReviewsout of 83 reviews