On Friday, April 16, 2021, the D.C. Circuit affirmed a district court order holding that the Food and Drug Administration ("FDA") does not possess unfettered discretion to classify a medical product as a drug, where that product falls within the statutory definitions of both a drug and medical device under the Federal Food, Drug, and Cosmetic Act ("FDCA"), 21 U.S.C. §§ 301 et seq. 

The case has important implications for clients in both the product development and commercialization stages.  Given the widely diverging regulatory frameworks that apply to drugs and devices under the FDCA and the economic investment implications driven by those frameworks, the federal court's decision, reining in the FDA's discretionary power to apply these labels, is very noteworthy.

I. The District Court Decision

In December 2019, the D.C. district court considered the question of whether the FDA may classify Vanilla SilQ, a line of barium sulfate, oral-solution, contrast agents manufactured by Genus Medical Technologies, LLC ("Genus") and used in medical imaging, as a drug under the FDCA.1 Pursuant to the FDCA, the FDA can regulate medical products like Vanilla SilQ as either drugs or devices.  Drugs are subject to significantly more scrutiny and regulatory requirements than devices and consequently cost their manufacturers substantially more money to attain regulatory compliance in the commercialization process.

Under the FDCA, the statutory definition of a drug overlaps with the definition of a device.  The two definitions overlap in the "intended use" portions of their definitions.2 The "device" definition, however, also includes two exclusionary clauses, namely that a device-unlike a drug-"does not achieve its primary intended purposes through chemical action within or on the body of man" and "is not dependent upon being metabolized for the achievement of its primary intended purposes." 

The FDA determined that Vanilla SilQ appeared to qualify as both a device and drug under the FDCA, because Vanilla SilQ qualified as both under the "intended use" portions of the two definitions.  The FDA asserted that, in a case where a product falls within that overlap between the two definitions, the FDA possesses discretion to decide whether to regulate that product as a drug or as a device.  The FDA consequently decided to classify Vanilla SilQ as a drug.  Genus responded by moving for summary judgment in the district court. 

The district court concluded that, under the FDCA's plain meaning, Congress did not intend to grant the FDA unfettered discretion to regulate all medical devices as drugs.  Under the FDA's interpretation of the statute, classifying a medical product as a drug, where it also falls within the definition of a device, would read out altogether the two exclusionary clauses found in the definition of a device.  Moreover, if the FDA were permitted to classify any product that qualified as both a drug and a device as a drug, then the device-drug distinction would be rendered meaningless. 

Accordingly, the district court held that the FDA's decision violated the Administrative Procedure Act and the FDCA.  The district court granted Genus's summary judgment motion, vacated the FDA's decision to regulate Genus's Vanilla SilQ products as drugs, and remanded to the FDA for further administrative proceedings.

II. The Appellate Court Decision

The FDA unsuccessfully appealed the district court order.  Last week, the D.C. Circuit agreed with the district court's reasoning based on the plain meaning of the FDCA, affirmed the lower court's order, and held that Congress did not grant the FDA such broad discretion to classify a product as a drug if that product also met the statutory definition of a device.3

The D.C. Circuit expressly stated, however, that its decision does "nothing to restrict the [FDA's] discretion to determine, in close cases, whether a particular product satisfies the device definition."  Genus Med. Techs. LLC, No. 20-5026, at 23.  In this case, the FDA did not argue that Vanilla SilQ did not qualify as a device, but rather assumed that it did, before nevertheless deciding to regulate it as a drug.  Id.  As a result, the D.C. Circuit specifically reserved the question of whether the FDA has discretion to determine, in close cases, whether a medical product qualifies as a device. 

III. Take-Away Points

Medical device manufacturers should be attuned to the following implications of the D.C. Circuit's decision:

  • The FDA is not entitled to unfettered discretion in deciding that a product that qualifies as both a medical device and drug should be regulated as a drug.
  • Companies should consider early development engagement and aggressive advocacy with the FDA in favor of their interpretations of their products' regulatory identities.
  • In cases with open issues, such as whether the FDA possesses discretion to determine, in close cases, whether a medical product qualifies as a drug or device, companies should seek the advice of legal counsel before engaging the FDA on regulatory pathways.

Footnotes

1. Genus Med. Techs., LLC v. United States Food and Drug Admin., No. 19-544 (D.D.C. Dec. 6, 2019) (Mem. Op.). 

2. Specifically, a "drug" is defined to include:

[A]rticles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man or other animals.

21 U.S.C. § 321(g)(1).  By comparison, a "device" is defined as:

[A]n 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.

Id. § 321(h). 

3. "[W]e necessarily address only the FDA's conclusion that the FDCA grants it discretion to classify as a 'drug' any product that meets the statutory definition of a 'device.'  We hold that it does not."  Genus Med. Techs. LLC v. United States Food and Drug Admin., No. 20-5026, at 24 (D.C. Cir. Apr. 16, 2021) (Op.). 

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