From the Porcine to the Ridiculous to the Court of Appeals: Phibro’s Suit Against FDA Gets Muddy

As we reported back in January, Phibro Animal Health Corporation challenged FDA’s decision to remove a drug called carbadox—used as an antimicrobial drug to treat gastrointestinal disease in food-producing pigs—from the market.  More specifically, FDA rescinded approval of a “regulatory method” that Phibro used to establish that carbadox is safe and effective. Under that method, the company’s testing demonstrated that no residue of the drug can be found in an edible portion of the animal after slaughter or in any food derived from the living animal.  But because FDA must withdraw approval of a drug after it withdraws approval of the related regulatory method that warranted approval in the first place, FDA subsequently proposed to take away approval of carbadox entirely after it torpedoed the “regulatory method.”  As a sponsor of three NADAs for carbadox, Phibro repeatedly tried to fight this decision, but to no avail.  Ultimately, Phibro filed this lawsuit alleging that FDA’s withdrawal of the carbadox NADA approvals violated the Administrative Procedure Act (APA).

As background, the Center for Veterinary Medicine (CVM) had approved a regulatory method for carbadox in 1998 but changed its position in 2011. At that time, CVM informed Phibro that the company needed to submit data demonstrating that the product posed no health risk and, in 2016, issued a Notice of Opportunity for a Hearing proposing to withdraw approval for all carbadox NADAs.  Phibro requested a hearing, and though the then-CVM Director recommended granting the hearing, FDA never did.  Instead, CVM issued a notice withdrawing the 2016 Notice of Opportunity for Hearing in July 2020 and published a new proposed declaratory order, which, if finalized, would revoke the approved carbadox regulatory method.

Once the revocation of the carbadox regulatory method was finalized, CVM said it would publish a new Notice of Opportunity for Hearing proposing to withdraw all carbadox NADAs based on the lack of approved regulatory method. Phibro filed a comment to the proposed order presenting data supporting use of the 1998 regulatory method or alternative existing regulatory methods, as well as a Citizen Petition requesting that “FDA refrain from finalizing, and withdraw, the 2020 Proposed Order.”  In November 2023, FDA denied Phibro’s Citizen Petition and issued a final order revoking the 1998 carbadox regulatory method, explaining that while the FDCA “requires an opportunity for a hearing prior to withdrawing an animal drug approval,” a hearing on the regulatory method revocation itself was not required because it was only an “interlocutory revocation of an approved method.”

Simultaneously with the Revocation Order, CVM issued a Notice of Opportunity for a Hearing on its proposal to withdraw approval of the carbadox NADAs.  Phibro objected to the proposed withdrawal of the carbadox NADAs and requested a hearing before the FDA Commissioner.  CVM issued a response recommending that Phibro’s request for a hearing be denied and that the carbadox NADAs approvals be withdrawn but took no final action.  Phibro filed the instant lawsuit.

In this lawsuit, filed on  January 5, 2024, Phibro alleged that the carbadox orders violate the Administrative Procedure Act by depriving it of a hearing, by arbitrarily and capriciously departing from FDA practice, and by acting inconsistently with record evidence.  FDA moved to dismiss under the ripeness doctrine, arguing that the carbadox orders were not final.  The Court therefore looked to both constitutional ripeness and prudential ripeness, explaining that even if the case is constitutionally ripe, as all parties agreed, it may not be prudentially ripe, meaning that it may be premature for the Court to get involved at this time, as stated in the attached Memorandum Opinion and Order.  In assessing prudential ripeness, the court evaluated the “fitness of the issues for judicial decision” and the “hardship to the parties of withholding court consideration.”

First, the Court looked to the “fitness of the issue for judicial decision.”  Though the parties disagreed that the agency actions at issue were final, the Court held that that point was irrelevant, as “even a final agency action can be ‘unripe for judicial review’ if further proceedings affecting the agency action will take place or judicial consideration of the issue would benefit greatly from more certainty.”  Here, because CVM had not actually denied Phibro’s request for a hearing, the Court held that the issue was not yet fit for judicial decision.  Thus, “[u]nless and until FDA denies Phibro’s request for a hearing on some level, the Court agrees with FDA that Phibro’s claims are not yet fit for judicial review….”  With respect to the “hardship prong,” the Court found that Phibro has not shown that enforcement—and actual liability—is imminent, as CVM advised Phibro that it can continue to market carbadox until the NADA is withdrawn.  In other words, the actual hardship does not arise until FDA actually withdraws the NADAs.  Nor has Phibro provided concrete evidence of reputational harm.

In sum, the Court dismissed Phibro’s case because its claims do not meet the standard for ripeness under the prudential ripeness doctrine. Additionally, the District Court said the suit was in the wrong place, writing in a footnote that  “counseling against this Court exercising jurisdiction over Phibro’s claims is the fact that Congress gave exclusive jurisdiction over appeals ‘from an order . . . refusing or withdrawing approval of an application’ to the federal courts of appeals,”  citing 21 U.S.C. §§ 360b(h) and  355(h).   Thus, in the event FDA ultimately withdraws the carbadox NADAs, the Court noted that Phibro “would be required to challenge the withdrawal in a court of appeals—not a district court.”  Any ruling on Phibro’s claim now could result in a ruling over issues which the Court of  Appeals—not the District Court—has jurisdiction.