United States v. Regenerative Sciences, LLC , 741 F.3d 1314 ( 2014 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 21, 2013 Decided February 4, 2014
No. 12-5254
UNITED STATES OF AMERICA,
APPELLEE
v.
REGENERATIVE SCIENCES, LLC, A CORPORATION, ET AL.,
APPELLANTS
Appeal from the United States District Court
for the District of Columbia
(No. 1:10-cv-01327)
Andrew S. Ittleman argued the cause for appellants. With
him on the briefs was Mitchell S. Fuerst.
Jonathan W. Emord was on the brief for amicus curiae
American Association of Orthopaedic Medicine in support of
appellants.
Lawrence J. Joseph was on the brief for amicus curiae
Association of American Physicians and Surgeons, Inc., in
support of appellants.
James S. Turner was on the brief for amicus curiae Tim
Moore in support of appellants.
2
Abby C. Wright, Attorney, U.S. Department of Justice,
argued the cause for appellee. With her on the brief were
Stuart F. Delery, Principal Deputy Assistant Attorney
General, Ronald C. Machen, Jr., U.S. Attorney, Mark B.
Stern, Attorney, William B. Shultz, Acting General Counsel,
Food and Drug Administration, and Eric M. Blumberg,
Deputy Chief Counsel. Alisa B. Klein, Attorney, U.S.
Department of Justice, entered an appearance.
Before: GRIFFITH and SRINIVASAN, Circuit Judges, and
EDWARDS, Senior Circuit Judge.
Opinion for the court filed by Circuit Judge GRIFFITH.
GRIFFITH, Circuit Judge: In this civil enforcement action,
we must decide whether the appellants—three individuals and
a related corporate entity—violated federal laws regulating
the manufacture and labeling of drugs and biological products
by producing, as part of their medical practice, a substance
consisting of a mixture of a patient’s stem cells and the
antibiotic doxycycline. Because we conclude that they did, we
affirm the district court’s judgment and the permanent
injunction it entered against appellants.
I
A
This case involves two statutes under which the Food and
Drug Administration (FDA) regulates the healthcare industry:
the Federal Food, Drug & Cosmetic Act (FDCA), 21 U.S.C.
§ 301 et seq., and the Public Health Service Act (PHSA), 42
U.S.C. § 201 et seq. Those statutes promote the safety of
drugs and biological products, respectively, by setting forth
detailed requirements for how such substances are to be
3
manufactured and labeled. See 21 U.S.C. §§ 351 (FDCA
manufacturing requirements), 352 (FDCA labeling
requirements); 42 U.S.C. § 262(j) (incorporating by reference
most of the FDCA’s provisions, including its manufacturing
and labeling requirements, into the PHSA). Drugs and
biological products not satisfying those requirements are
deemed “adulterated” or “misbranded,” see 21 U.S.C. §§ 351,
352, 353(b)(4); 42 U.S.C. § 262(j), and doing any act that
causes a drug or biological product to be adulterated or
misbranded is a violation of federal law, 21 U.S.C. § 331(k);
42 U.S.C. § 262(j). The FDA may seek an injunction to
prohibit such violations. 21 U.S.C. § 332(a); 42 U.S.C.
§ 262(j).
B
The substance at issue in this case is produced by
appellants Dr. Christopher Centeno, Dr. John Schultz,
Michelle Cheever, and Regenerative Sciences, LLC, as part of
a medical therapy that they market as the “Cultured Regenexx
Procedure” (the Procedure). Drs. Centeno and Schultz, who
practice medicine together at the Centeno-Schultz Clinic in
Colorado, jointly developed the Procedure to treat patients’
orthopedic conditions. They are the majority shareholders of
Regenerative Sciences, which they founded and which, in
turn, owns the Procedure and licenses it exclusively to the
Centeno-Schultz Clinic. Michelle Cheever is the laboratory
director for Regenerative Sciences.
The Procedure begins with the extraction of a sample of a
patient’s bone marrow or synovial fluid. From that sample,
Regenerative Sciences isolates mesenchymal stem cells
(MSCs), which are capable of differentiating into bone and
cartilage cells. The MSCs are then placed in a solution to
culture them—that is, to cause them to divide and proliferate.
4
Other substances are sometimes added to the solution that
affect the MSCs’ differentiation. The culturing process
determines the growth and biological characteristics of the
resulting cell population. When the MSCs are sufficiently
numerous for re-injection, they are combined with
doxycycline, an antibiotic obtained in interstate commerce
and used to prevent bacterial contamination of the MSCs. The
resulting mixture (the Mixture) is injected into the patient
from whom the stem cell sample was initially taken, at the site
of the damaged tissue.
Appellants promote the Procedure as an alternative to
surgery for various orthopedic conditions and diseases. In
court filings, they have described the Procedure as a
“treatment [for] orthopedic injuries and arthritis” and for
“musculoskeletal and spinal injury.” Their promotional
materials recommend the Procedure for treatment of
osteoarthritis, non-healing bone fractures, chronic bulging
lumbar discs, and soft tissue injuries.
In August 2010, the government filed this action for a
permanent injunction against appellants, alleging that the
Mixture is both a drug and a biological product that is
adulterated and misbranded in violation of § 331(k) of the
FDCA and § 262(j) of the PHSA, which incorporates § 331(k)
by reference. Appellants counterclaimed, asserting that the
Mixture is not subject to federal regulation and that, even if it
is, the FDA’s effort to regulate the Mixture is defective under
both the PHSA and the Administrative Procedure Act (APA),
5 U.S.C. § 706(2).
The district court granted the government’s motion for
summary judgment and dismissed appellants’ counterclaims,
holding that they had violated the FDCA and the PHSA.
United States v. Regenerative Scis., LLC, 878 F. Supp. 2d
5
248, 263 (D.D.C. 2012). Then, finding a “cognizable danger
of a recurrent violation,” the district court entered a
permanent injunction prohibiting appellants from committing
further violations of the FDCA’s adulteration and
misbranding restrictions. Id. at 262-63 (internal quotation
marks omitted). Appellants timely appealed both orders.
We have jurisdiction to review the district court’s orders
under 28 U.S.C. § 1291. We review the grant of summary
judgment and dismissal of appellants’ counterclaims de novo,
“drawing all reasonable inferences from the evidence in the
light most favorable to the nonmoving party,” Geleta v. Gray,
645 F.3d 408, 410 (D.C. Cir. 2011), and affirming only if
“there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law,” FED. R.
CIV. P. 56(a). We review the district court’s entry of a
permanent injunction for abuse of discretion and its factual
findings for clear error. United States v. Philip Morris USA
Inc., 566 F.3d 1095, 1110 (D.C. Cir. 2009) (per curiam).
II
Appellants’ principal argument is that the Mixture is not
subject to regulation under the FDCA or PHSA because it is
neither a drug nor a biological product but is, rather, a
medical procedure. The text of those statutes forecloses this
argument.
The FDCA defines a “drug” as any “article[] intended for
use in the diagnosis, cure, mitigation, treatment, or prevention
of disease” or “intended to affect the structure or any function
of the body.” 21 U.S.C. § 321(g)(1); see also 21 C.F.R.
§ 201.128 (providing that a drug’s intended use is shown by
“the objective intent of the persons legally responsible for the
labeling of [the] drug[],” which “may . . . be shown by
6
labeling claims, advertising matter, or oral or written
statements by such persons or their representatives”). The
PHSA defines “biological product” in similarly broad terms
as any “virus, therapeutic serum, toxin, antitoxin, vaccine,
blood, blood component or derivative . . . or analogous
product . . . applicable to the prevention, treatment, or cure of
a disease or condition of human beings.” 42 U.S.C.
§ 262(i)(1). Both of these wide-ranging definitions clearly
apply to the Mixture, an article derived mainly from human
tissue and intended to treat orthopedic diseases and to affect
musculoskeletal function. Indeed, appellants do not actually
dispute that the plain language of the statutes compels this
conclusion.
Rather, appellants urge us to construe the FDCA in light
of purported federalism concerns. 1 But appellants’ concerns
lack merit. They boil down to the following syllogism: the
FDCA was not intended to infringe on states’ traditional role
in regulating the practice of medicine; the Procedure fits
Colorado’s statutory definition of the “practice of medicine”;
therefore, the FDA’s regulation of the Procedure exceeds the
FDA’s authority under the FDCA. This syllogism is flawed
twice over.
First, it misapprehends what this case is about.
Notwithstanding appellants’ attempt to characterize this case
1
Because the PHSA simply incorporates the FDCA’s
substantive provisions by reference, the scope of the FDCA’s
provisions is determinative of the reach of the PHSA’s provisions
as well. Thus, the parties’ arguments and our discussion focus on
the scope and application of the FDCA—keeping in mind that to
adulterate and misbrand a substance that is both a drug and a
biological product violates the PHSA as well as the FDCA.
7
as an effort by the FDA to “restrict[] the use of an autologous
stem cell procedure,” 2 Appellants’ Br. 8 (emphasis added),
the focus of the FDA’s regulation is the Mixture. That is, the
FDA does not claim that the procedures used to administer the
Mixture are unsafe; it claims that the Mixture itself is unsafe.
Appellants’ arguments about the practice-of-medicine
exemption are therefore wide of the mark.
Second, appellants are wrong to suggest that the scope of
the FDCA depends on state-by-state definitions of the
“practice of medicine.” The FDCA enacts a comprehensive,
uniform regulatory scheme for the distribution of drugs. The
scheme’s breadth—and, more specifically, its applicability to
doctors—is evident in the fact that the FDCA carves out
certain exceptions from its requirements for doctors who
manufacture and administer drugs in the course of their
professional practice. See, e.g., 21 U.S.C. § 360(g)(2)
(exempting licensed healthcare practitioners engaged in
certain activities from the FDCA’s registration requirements);
id. § 374(a)(2)(B) (narrowing the FDA’s ability to review the
records of licensed healthcare practitioners “who
manufacture, prepare, propagate, compound, or process drugs
. . . solely for use in the course of their professional practice”).
Those exceptions would be unnecessary if the FDCA did not
otherwise regulate the distribution of drugs by licensed
physicians. See United States v. Evers, 643 F.2d 1043, 1048
(5th Cir. 1981) (“[W]hile the [FDCA] was not intended to
regulate the practice of medicine, it was obviously intended to
control the availability of drugs for prescribing by
physicians.”). Appellants’ construction of the FDCA, by
contrast, would allow states to gut the FDCA’s regulation of
2
An “autologous” stem cell procedure is one in which cells
are implanted back into the individual from whom they were
initially taken. See 21 C.F.R. § 1271.3(a).
8
doctors, and thereby create an enormous gap in the FDCA’s
coverage, by classifying the distribution of drugs by doctors
as the practice of medicine. Given Congress’s intent that the
FDCA’s “coverage be as broad as its literal language
indicates,” United States v. An Article of Drug . . . Bacto-
Unidisk, 394 U.S. 784, 798 (1969), such a construction is not
tenable.
Equally untenable is appellants’ contention that because
the Procedure occurs entirely within the state of Colorado, the
Mixture lacks a sufficient connection to interstate commerce
to permit federal regulation under the Commerce Clause. It is
simply impossible to square this argument with the last
seventy years of Commerce Clause jurisprudence, which, in
recognition of Congress’s authority to regulate even “purely
local activities that are part of an economic ‘class of
activities’ that have a substantial effect on interstate
commerce,” Gonzales v. Raich, 545 U.S. 1, 17 (2005), has
upheld federal laws prohibiting the possession of home-grown
marijuana intended solely for personal use, id. at 32-33, and
restricting the amount of wheat a farmer can grow purely for
his farm’s consumption, Wickard v. Filburn, 317 U.S. 111,
128-29 (1942). Here, not only does the Mixture undoubtedly
have effects on interstate markets for orthopedic care, but it
actually includes an article shipped in interstate commerce,
namely, doxycycline. Cf. Raich, 545 U.S. at 17 (noting that
when Congress concludes that a class of activities
substantially affects interstate commerce, “the de minimis
character of individual instances [of those activities] is of no
consequence” (internal quotation marks omitted)). The
Commerce Clause poses no obstacle to regulating the Mixture
under the FDCA.
Nor can appellants prevail on their argument that even if
the Mixture may be federally regulated in principle, it falls
9
outside the scope of the statute appellants are charged with
violating, 21 U.S.C. § 331(k). That provision prohibits “the
doing of any . . . act with respect to[] a . . . drug . . . if such act
is done while such [drug] is held for sale . . . after shipment in
interstate commerce and results in such [drug] being
adulterated or misbranded.” Id. (emphasis added). Appellants
read § 331(k) to require that the entire Mixture have been
shipped in interstate commerce. They contend that merely
using an ingredient that travelled in interstate commerce—
here, doxycycline—is insufficient to trigger the bar. We
disagree. Not only does the FDCA define the term “drug” to
include a drug’s components, but to interpret § 331(k) as
appellants suggest would severely narrow a statutory scheme
designed to regulate the safety of drugs at every stage of their
distribution. See Evers, 643 F.2d at 1049 (explaining that
§ 331 is “designed to prevent misbranding at each stage of the
distribution process”); id. at 1050 (“Doctors holding drugs for
use in their practice are clearly one part of the distribution
process . . . .”). The two circuits to have considered this issue
have reached the same conclusion. In United States v.
Dianovin Pharmaceuticals, Inc., which involved a
pharmaceutical company that used raw vitamin K purchased
in interstate commerce to manufacture injectable vitamin K,
the First Circuit held that the company’s “use of components
shipped in interstate commerce . . . brought their activities
within § 331(k).” 475 F.2d 100, 102-03 (1st Cir. 1973); see
also United States v. Cassaro, Inc., 443 F.2d 153, 156 (1st
Cir. 1971) (explaining that, under the Supreme Court’s
decision in United States v. Sullivan, 332 U.S. 689 (1948),
“interstate commerce in drugs continue[s] even after the first
purely intrastate sale”). Similarly, in Baker v. United States,
the Ninth Circuit held that § 331(k)’s “‘shipment in interstate
commerce’ requirement is satisfied even when only an
ingredient is transported interstate.” 932 F.2d 813, 814 (9th
Cir. 1991). We therefore hold that, by virtue of its use of
10
doxycycline, the Mixture is within the scope of drugs—and,
by extension, biological products, see 42 U.S.C. § 262(j)—
regulated by § 331(k).
III
Appellants next advance two arguments why the Mixture
is exempt from the FDCA’s manufacturing and labeling
requirements even if it is otherwise subject to federal
regulation. Each argument fails.
A
In addition to regulating biological products directly, the
PHSA gives the FDA authority to issue regulations to prevent
the interstate spread of communicable disease. See 42 U.S.C.
§ 264(a). Pursuant to that authority, in 2001 the FDA
promulgated regulations to ensure the safety of human cells,
tissues, and cellular or tissue-based products (HCT/Ps) used
for therapeutic purposes. Those regulations, which appear at
21 C.F.R. part 1271, define HCT/Ps, in relevant part, as
“articles containing or consisting of human cells or tissues
that are intended for implantation, transplantation, infusion, or
transfer into a human recipient.” 21 C.F.R. § 1271.3(d).
HCT/Ps may qualify as drugs or biological products, and
when they do, the FDA generally regulates them accordingly
under the FDCA, PHSA, and corresponding regulations. See
id. § 1271.20; see also Application of Current Statutory
Authorities to Human Somatic Cell Therapy Products and
Gene Therapy Products, 58 Fed. Reg. 53,248, 53,249 (Oct.
14, 1993) (“Cellular products intended for use as somatic cell
therapy are biological products subject to regulation pursuant
to the [PHSA] and also fall within the definition of drugs in
the [FDCA].”). The Part 1271 Regulations, however, create a
regulatory exemption from the manufacturing and labeling
11
requirements that normally apply to drugs and biological
products for any HCT/P that is no more than “minimally
manipulated.” 3 See 21 C.F.R. § 1271.10(a). “Minimal
manipulation” of cells means “processing that does not alter
the relevant biological characteristics.” Id. § 1271.3(f)(2).
Appellants claim this exemption applies to the Mixture, but
the government offers several reasons why appellants’
culturing process alters the MSCs’ relevant biological
characteristics and is therefore more than minimal
manipulation. As to some of those reasons, such as the
government’s claim that culturing MSCs alters the genes and
proteins they express, appellants have created genuine issues
of fact by submitting expert affidavits arguing that the
government’s views are based on scientific studies that are
inapplicable to appellants’ culturing process. But appellants
give no response to other reasons offered by the government.
For example, appellants admit that the culturing process is
designed to “determine the growth and biological
characteristics of the resulting cell population.” It is also
undisputed that, in at least some cases, appellants add
substances to the cell culture that affect the differentiation of
bone marrow cells.
These concessions are fatal to appellants’ attempt to
claim refuge under § 1271.10(a). Given that § 1271.10(a) is
an exemption from the otherwise applicable provisions of the
FDCA, appellants ultimately bear the burden of establishing
that it applies to the Mixture. See United States v. First City
Nat’l Bank of Houston, 386 U.S. 361, 366 (1967) (stating the
3
To qualify for this regulatory exemption, an HCT/P must
meet several other criteria as well, pertaining to its method of
manufacture and intended use. See 21 C.F.R. § 1271.10(a). The
government does not claim, however, that the Mixture fails to meet
any of those additional criteria.
12
“general rule” of statutory construction that the party who
“claims the benefits of an exception to the prohibition of a
statute” carries the burden of establishing that the exception
applies); FTC v. Morton Salt Co., 334 U.S. 37, 44-45 (1948).
Because appellants concede that culturing MSCs affects their
characteristics and offer no evidence that those effects
constitute only minimal manipulation, they fail to carry that
burden as a matter of law.
We emphasize that we reach this conclusion based on the
evidence in the record, and not merely by deferring to the
FDA’s statement in the preamble to the Part 1271 Regulations
that expansion of MSCs in culture automatically constitutes
more than minimal manipulation. See Human Cells, Tissues,
and Cellular and Tissue-Based Products; Establishment
Registration and Listing, 66 Fed. Reg. 5447, 5457 (Jan. 19,
2001) (“We do not agree that the expansion of mesenchymal
cells in culture . . . [is] minimal manipulation.”). Appellants
devote considerable energy to challenging that statement as an
invalid legislative rule that the FDA now seeks to enforce
against them. That is, they claim that the FDA seeks to give
legal effect to a statement that was not promulgated through
formal rule-making procedures, which the APA forbids. Our
decision, however, is based on, and gives effect to, the Part
1271 Regulations, not the preamble. Appellants’ procedural
challenge to the preamble is therefore irrelevant.
Surprisingly, appellants also challenge the Part 1271
Regulations as ultra vires if applied to autologous stem cell
procedures because, they argue, such procedures do not carry
the risk of spreading communicable disease and thus are not
subject to regulation under 42 U.S.C. § 264. It is unclear what
appellants hope to achieve with this claim; to prevail would
only mean invalidating the very exemption from the FDCA in
which they hope to take refuge. In any case, the FDA’s
13
findings, which appellants do not challenge, undercut
appellants’ argument. In promulgating the Part 1271
Regulations, the FDA noted that any procedure involving
HCT/Ps risks spreading disease through, for example,
“[e]rrors in labeling, mixups of testing records, failure to
adequately clean work areas, and faulty packaging.” Current
Good Tissue Practice for Human Cell, Tissue, and Cellular
and Tissue-Based Product Establishments; Inspection and
Enforcement, 69 Fed. Reg. 68,612, 68,613 (Nov. 24, 2004).
Indeed, Regenerative Sciences’ own standard operating
procedure takes a similar view, recognizing the risk of
“[c]ontamination” as a “major problem in tissue culture” and
stressing the need for “good tissue practices” to “prevent the
introduction, transmission, or spread of communicable
diseases.” Appellants thus offer no basis to conclude that the
Part 1271 Regulations exceed the FDA’s authority to issue
regulations “to prevent the introduction, transmission, or
spread of communicable diseases” between states. 42 U.S.C.
§ 264(a).
B
Alternatively, appellants contend that the Mixture is
exempt from the FDCA’s manufacturing and labeling
requirements because it is a compounded drug. See 21 U.S.C.
§ 353a(a). A compounded drug must be produced using
certain types of “bulk drug substances,” one of which is “bulk
drug substances . . . that . . . are components of drugs
approved by the [government].” Id. § 353a(b)(1)(A).
Appellants assert that the Mixture meets this definition
because cultured MSCs are a component of the FDA-
approved drug Carticel. But even if that were the case—and
the affidavits appellants cite only suggest that it might be—it
would not be enough to bring the Mixture within § 353a. To
qualify as a “bulk drug substance,” an item must be
14
“represented for use in a drug,” 21 C.F.R. § 207.3(a)(4), and
appellants point to no evidence in the record even suggesting
that MSCs are held out for use in Carticel, or any other drug
for that matter. Appellants therefore fail to establish that the
Mixture is exempt from the FDCA’s manufacturing and
labeling requirements, and we proceed to consider whether
the Mixture violated them.
IV
A
The FDCA provides that a drug “shall be deemed to be
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.” 21
U.S.C. § 351(a) (emphasis added). The FDA has established
the specific elements of current good manufacturing practice
at 21 C.F.R. parts 210-211. Here, it is undisputed that
appellants’ facilities, methods, and controls for processing the
Mixture violated federal manufacturing standards in
numerous respects. Therefore, the Mixture is per se
adulterated, regardless of any other safety protocols appellants
happen to use. See John D. Copanos & Sons, Inc. v. FDA, 854
F.2d 510, 514 (D.C. Cir. 1988) (“Drugs produced in violation
of [federal manufacturing] regulations are deemed to be
adulterated without the agency having to show that they are
actually contaminated.”).
B
The FDCA also provides that a drug “shall be deemed to
be misbranded” if its label omits certain information. As
relevant here, the FDCA requires that a drug’s label provide
15
“adequate directions for use,” 21 U.S.C. § 352(f)(1), and, in
the case of prescription drugs, bear the symbol “Rx only,” id.§ 353(b)(4)(A). Appellants admit that the Mixture’s labeling
satisfies neither of these requirements. 4
Appellants nevertheless argue that it is inappropriate to
hold them liable for not providing adequate directions because
they produced the Mixture only for their own use. This
argument, however, misunderstands how the FDCA’s labeling
scheme applies to prescription drugs. To satisfy § 352(f)’s
requirement of providing “adequate directions for use,” a
drug’s label must provide “directions under which the layman
can use a drug safely and for the purposes for which it is
intended.” 21 C.F.R. § 201.5 (emphasis added). A
prescription drug, however, is by definition “not safe for use
except under the supervision of a practitioner licensed by law
to administer such drug.” 21 U.S.C. § 353(b)(1)(A) (emphasis
added). It is thus impossible to provide “adequate directions
for use” for prescription drugs. As the Seventh Circuit has
observed, this means that prescription drugs are
“presumptively misbranded.” United States v. An Article of
Device, 731 F.2d 1253, 1261 (7th Cir. 1984); see United
States v. Articles of Drug, 625 F.2d 665, 673 (5th Cir. 1980)
(holding that § 352(f)(1) requires a drug’s labeling to “contain
adequate directions for a consumer to engage in self-
medication” and noting that a “prescription drug by definition
. . . is unsuitable for self-medication”). A prescription drug
can avoid being actually misbranded only by qualifying for
4
The Mixture’s label would have to bear the symbol “Rx
only” even if the Mixture were a compounded drug. See 21 U.S.C.
§ 353a(a) (exempting compounded drugs from the labeling
requirements of § 352(f)(1) but not § 353(b)(4)). Thus, even if we
were to accept appellants’ compounding argument, the Mixture still
would be misbranded. See id. § 353(b)(4).
16
either of two exemptions from § 352(f): the statutory
exemption, which applies when licensed practitioners
distribute drugs to patients via prescriptions, see 21 U.S.C.
§ 353(b)(2), or the regulatory exemption, which applies to
prescription drugs at any stage of distribution, see 21 C.F.R.
§ 201.100; Articles of Drug, 625 F.2d at 673. A prescription
drug’s label must contain specific information in order for
either exemption to apply. If the label does not contain every
piece of required information, the prescription drug will
remain subject to the impossible mandate of § 352(f) and will
be misbranded.
Here, there is no doubt that the Mixture qualifies as a
prescription drug. Before the Mixture can be injected into a
patient, a physician must review the cultured MSCs to ensure
that there are no visible signs of bacterial contamination or
genetic mutation. Then, if the MSCs are safe, appellants inject
the Mixture using sophisticated imaging devices to ensure that
it reaches the right spot on a patient’s bone or tissue so that it
has the intended therapeutic effect. Because the Mixture can
be safely administered only under a physician’s supervision,
the question for us is whether the Mixture qualifies for either
§ 352(f) exemption. The answer is clear. Both exemptions
require that the label bear the symbol “Rx only,” see 21
U.S.C. § 353(b)(4)(A); 21 C.F.R. § 201.l00(b)(1), and it is
undisputed that the Mixture’s label does not. Because its label
fails to provide the minimum information necessary to qualify
for either exemption from § 352(f), the Mixture is
misbranded.
In reaching this conclusion, we reject appellants’ broad
reading of United States v. Evers, in which the Fifth Circuit
held that a doctor was not liable for violating § 352(f)(1) by
advertising his off-label use of a prescription drug without
providing adequate directions for that use. See Evers, 643
17
F.2d at 1053-54. Appellants read Evers for the proposition
that doctors need not comply with the FDCA’s labeling
requirements when they prescribe drugs only within their own
practices. But Evers cannot bear the weight of this
interpretation, which is inconsistent with the fact that the
FDCA does not exempt doctors in such a categorical manner.
As the Fifth Circuit made clear, the “object of the
government’s case” in Evers was not the off-label
“prescription” of the drug at issue, but rather the “promotion
and advertising” of such off-label use. Id. at 1049 (emphases
added). Evers thus differs from this case in two important
ways: the drug at issue in Evers was FDA approved, and the
FDA did not question Evers’s right to prescribe that drug to
his patients. Neither of those circumstances is present here.
The FDA has not approved the Mixture as safe for any use
and hence challenges appellants’ right to prescribe the
Mixture at all. We will not broaden Evers to vitiate the
FDCA’s labeling requirements in these circumstances. The
strict exemption criteria presumably reflect the judgment of
both Congress and the FDA about the minimum information
necessary to safely distribute prescription drugs. Because
appellants did not meet those criteria, they misbranded their
drug.
V
Having found that the government is entitled to summary
judgment that appellants adulterated and misbranded the
Mixture, we review the district court’s entry of a permanent
injunction. Appellants attack the injunction on two fronts.
They contend that in entering the injunction, the district court
failed to make the necessary findings and that, in any event,
the facts do not warrant injunctive relief.
18
The FDCA gives courts jurisdiction to enjoin violations
of 21 U.S.C. § 331(k). See 21 U.S.C. § 332(a). To obtain
injunctive relief, the government “must demonstrate a
‘reasonable likelihood of further violation[s] in the future.’”
United States v. Philip Morris USA Inc., 566 F.3d 1095, 1132
(D.C. Cir. 2009) (per curiam) (quoting SEC v. Savoy Indus.,
Inc., 587 F.2d 1149, 1168 (D.C. Cir. 1978)) (alteration in
original). A district court should consider three factors in
determining whether a reasonable likelihood exists:
“‘[1] whether a defendant’s violation was isolated or part of a
pattern, [2] whether the violation was flagrant and deliberate
or merely technical in nature, and [3] whether the defendant’s
business will present opportunities to violate the law in the
future.’” Id. (quoting SEC v. First City Fin. Corp., 890 F.2d
1215, 1228 (D.C. Cir. 1989)).
Appellants argue that the district court failed to make
findings regarding these three factors. Though it is true that
the district court did not explicitly list the factors, there can be
no serious dispute that its factual findings implicate them. In
justifying the injunction, the district court stated:
[The] FDA notified [appellants] that their RegenexxTM
Procedure may be in violation of the [FDCA]. It then
twice inspected [appellants’] laboratories and found a
number of [current good manufacturing practice]
violations. [Appellants] maintained that the FDA
could not regulate their cell product and did not bring
their processes into compliance with [current good
manufacturing practice]. Although [appellants] agreed
to stop using their RegenexxTM Procedure during the
pendency of this lawsuit, there remains a “cognizable
danger of recurrent violation.”
19
Regenerative Scis., 878 F. Supp. 2d at 262-63. These findings
speak to the existence of each relevant factor. The fact that the
FDA found violations on two separate occasions and that
appellants refused to take corrective action even after multiple
FDA notices suggests a pattern of deliberate, even flagrant
violations. And, of course, these violations were inextricably
linked to the operation of appellants’ business.
Even so, appellants maintain that the district court abused
its discretion. They insist that they have shown “the utmost
respect for the judicial system” by discontinuing use of the
Procedure during the pendency of this litigation and that the
Procedure employed robust safety protocols, albeit not those
federal regulations required. These facts, however, do not
establish an abuse of discretion. That appellants suspended
use of the Procedure does not in itself preclude injunctive
relief. See United States v. Article of Drug Designated B-
Complex Cholinos Capsules, 362 F.2d 923, 928 (3d Cir.
1966) (“It is well settled that the cessation of activities, either
before or after suit is begun, does not in itself bar issuance of
the injunction.”). Furthermore, appellants have admitted to
over a dozen violations of federal manufacturing regulations,
and evidence in the record supports the serious nature of those
violations. Appellants also admit that they did not improve
their manufacturing process even after receiving FDA
warnings. Such conduct is sufficient to warrant the permanent
injunction.
VI
For the foregoing reasons, we affirm the district court’s
orders granting summary judgment to the government,
dismissing appellants’ counterclaims, and permanently
enjoining appellants from committing future violations of the
FDCA’s manufacturing and labeling provisions.