FDA's CME POLICY IS RIPE FOR REVIEW IN D.C. FEDERAL COURT: JUDGE LAMBERTH REJECTS FDA ATTEMPT TO DISMISS WLF SUIT; ATTEMPT TO REGULATE BY DRAFT RULE IRKS JUDGE

FDA's "draft policy statement" on continuing medical education is having the regulatory impact of a final agency rule and can be challenged in court for its effect on free speech, D.C. federal court judge Royce Lamberth declared in a March 9 preliminary decision in the Washington Legal Foundation v. Kessler.

Rejecting the agency's request for dismissal of the suit on the procedural grounds that the CME policy is not a completed regulation, ripe for court review, Lamberth decided that the WLF challenge to FDA's CME policy should proceed to trial. "The court is confident that the dispute presented by WLF is fit for judicial review under the standard set forth in the case law of this circuit," Lamberth declared.

The CME and off-label use policies described in FDA's November 1992 draft policy on "Industry- sponsored Scientific and Educational Activities" represent the type of actions that have a direct and immediate effect on the day-to-day business of the parties challenging the agency action, Lamberth found. As alleged in WLF's complaint, Lamberth said, "the collective effect of FDA's conduct has been to discourage manufacturers from disseminating information that they would otherwise have chosen to distribute."

Proposed FDA rules with protracted gestation periods such as the CME policy should be open to court challenge, Lamberth indicated, or by default the agency would have the option of implementing rules without facing outside review.

"If an agency's own characterization of the finality of its policy were determinative," Lamberth said, "that agency could effectively regulate industry without ever exposing itself to judicial review."

WLF maintained that Lamberth's ruling could open the door for challenges of other unofficial and pending regulatory actions by FDA and other agencies. In a March 9 statement, WLF said "if followed by other courts, the ruling will significantly expand the scope of government actions that are subject to judicial review."

A number of FDA's techniques for getting out information about quality control procedures and data submissions rely on the informal guidelines approach. Those types of informal rules are likely to be less susceptible to court challenge than the CME and off-label use policy, which delve into the realm of constitutional protection of freedom of speech.

Calling FDA "a powerful agency," Lamberth implied that the courts should step in when the agency makes use of a prolonged administrative process to regulate without allowing for public review. If court challenges were absolutely prohibited until the agency determines that its regulation is final, Lamberth said, the agency could make its own rules "through the simple expedient of 1) never formally declaring the policy to be `final,' and 2) threatening (but never actually initiating) enforcement procedures against companies which failed to comply with the agency's de facto policy."

As an indicator of FDA's recognized power over regulated industry, Judge Lamberth noted that WLF (as a third party) was bringing the suit against the CME policy, instead of manufacturers of drugs and medical devices.

"The fact that this suit is being brought by doctors who have been prevented from receiving information rather than the manufacturers with whose conduct the FDA policy primarily interferes," Lamberth reasoned, "lends further credence to plaintiff's contention that the FDA's power over industry is such that it is able to implement de facto regulatory policies without formally adopting final agency positions." WLF brought the suit in the name of physicians in its membership.

To FDA's argument that any company has the option of ignoring a proposed rule until final, the judge responded that the practical impact is very different. "It may be true," Lamberth said, recounting an FDA argument, "that a company which disagrees with the `advice' contained in FDA's regulatory correspondence may disregard this advice, go ahead with its planned activities, and then challenge the constitutionality of any adverse FDA action in an enforcement proceeding."

However, disregard for a proposed FDA policy is dangerous, Lamberth said. "The reality of the situation," as described by WLF, he said, "is that few if any companies are willing to directly challenge the FDA in this manner." He noted the powerful deterrent of the threat of a misbranding seizure action.

"In addition," Lamberth noted, "the FDA wields enormous power over drug and medical device manufacturers through its power to grant or deny new product applications. It is evident that manufacturers are most reluctant to arouse the ire of such a powerful agency."

The judge derided FDA's contention that neither the draft policy nor statements by senior FDA officials (including the commissioner) represented final agency policy. "Unfortunately, by focusing exclusively on the individual trees, FDA appears to have lost sight of the forest," Lamberth said. "The question here is not whether any single act on the part of the FDA signifies the existence of a final agency policy; rather, the aggregate effect of these acts must be analyzed to determine whether the agency by its conduct has objectively demonstrated the existence of such a policy."

Lamberth's discussion of FDA's power to create policy outside of its rulemaking procedures does not bode well for the agency in the next step of the WLF suit. The judge notes that the case itself will turn on a factual inquiry into two issues: (1) "whether the FDA adopted a de facto policy concerning off-label usage"; and (2) "whether such policy was unconstitutional."

Lamberth gives evidence of sympathy for the WLF argument that physicians' First Amendment rights include access to knowledge about medical products. FDA's delay in answering WLF's citizen petition on the off-label issue suggested to Lamberth a lack of interest by FDA in the rights of the physicians.

"The FDA's handling of WLF's citizen petition [filed in October 1993]," Lamberth said, "as well as the statements in its filings and at oral arguments, evidence a somewhat less vigilant concern for the doctors' First Amendment rights than this court would hope to see."

The court looked unfavorably on FDA's failure to meet its procedures for answering the WLF petition. Missing the 180-day deadline for answering WLF, "FDA did not respond...for 270 days, and then only several weeks after the filing of the present lawsuit."

While accepting FDA's explanation that the failure to respond "was wholly inadvertent," Lamberth said that the agency has not shown high regard for the complaints reflected in the suit. The agency's statement at the hearing in February that it would take another year to promulgate the CME regs led Lamberth to side with WLF that court review was necessary to expedite the issue. "WLF's decision to seek judicial review cannot be described as an attempt to `flout' any `established administrative process,'" Lamberth said.