Keeping Tabs on the Ninth Circuit
September 16, 2022 - This Week at the Ninth

This Week at the Ninth: Implied FDCA Preemption

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This week, the Ninth Circuit addresses the statutory prohibition on private enforcement actions under the Food, Drug, and Cosmetic Act.

The Court holds that a drug manufacturer’s suit against a compounding pharmacy for violating state law by selling drugs not approved by the FDA was barred by the Food, Drug, and Cosmetic Act’s provision prohibiting private rights of action under the statute.

The Panel: Judges Kleinfeld, Nelson, and VanDyke, with Judge Kleinfeld writing the opinion.

Key Highlight: “Proceedings to enforce or restrain violations of the FDCA, including the compounding statute, must be by and in the name of the United States, not a private party. Nexus’s claim is such a proceeding, so it is barred by the exclusive enforcement statute.”

Background: As a general matter, compounding pharmacies need not obtain FDA approval to compound drugs. But under the Food and Drug Administration Modernization Act of 1997, unregulated large-scale drug manufacturing masquerading as compounding is prohibited. Yet under the Drug Quality and Security Act of 2013, so-called “outsourcing facilities” are permitted to compound on a large scale and without a patient-specific prescription without FDA approval, but there is an exclusion from this exemption if the compounded drugs are “essentially a copy of one or more approved drugs.” 

Plaintiff Nexus is the creator of an FDA-approved drug called Emerphed, which is a ready-to-use ephedrine sulfate. Nexus sued defendant Central, which operates a network of compounding pharmacies where it sells ephedrine sulfate pre-loaded into ready-to-use syringes, claiming that Central’s conduct violates state laws that prohibit the sale of drugs not approved by the FDA because Central’s compounded drugs are essentially copies of Nexus’s approved drug and thus should have been required to obtain (but did not obtain) FDA approval.

The district court dismissed Nexus’s claims as preempted because those claims—although arising under state law—exist only because of the FDCA’s requirements, and private enforcement of the FDCA is prohibited.

Result: The Ninth Circuit affirmed. It held that Nexus’s suit was barred, and impliedly preempted, by the FDCA’s provision barring private enforcement of FDCA requirements. In PhotoMedex v. Irwin, 601 F.3d 919 (9th Cir. 2010), the Ninth Circuit had held that “[b]ecause the FDCA forbids private rights of action under that statute, a private action brought under [other laws] may not be pursued when, as here, the claim would require litigation of the alleged underlying FDCA violation in a circumstance where the FDA has not itself concluded that there was such a violation.” That holding applied here, the Court explained. For Nexus to prevail on its claims, it would have to prove that Central’s drug is “essentially a copy,” which would amount to litigation of the alleged underlying FDCA violation even though the FDA has not itself concluded that there was a violation. The Court explained that allowing Nexus’s suit to proceed would in effect permit Nexus to assume enforcement power which the statute does not allow.