Governance by the Backdoor: Administrative Law(lessness?) at the Fda

• Publication year: 2021

93 Nebraska L. Rev. 89. Governance by the Backdoor: Administrative Law(lessness?) at the FDA

Governance by the Backdoor: Administrative Law(lessness?) at the FDA

Lars Noah(fn*)

TABLE OF CONTENTS

I. Introduction..........................................89

II. Announcing Agency Intentions and Expectations.......90
A. The FDA's Struggles in Promulgating Regulations .94
B. Guidance-making as the New Rulemaking.........97
1. Evolution of the FDA's Good Guidance Practices ......................................97
2. Congressional Demands for FDA Guidance.....105
3. Extending GGPs to Other Agencies? ...........110
C. Too Much of a Good Thing at the FDA?............113

III. Securing Adherence to Announced (and Unannounced) Policies ............................................... 122
A. Threats/Offers in the Enforcement Context......... 124
B. Offers/Threats in the Licensing Context............ 130

IV. Conclusion............................................ 137

I. INTRODUCTION

In previous work, I have accused the U.S. Food and Drug Administration (FDA) of acting in a lawless fashion.(fn1) In those articles, I focused on the agency's efforts to evade constitutional constraints and

1

statutory limits on its jurisdiction.(fn2) Less often have I addressed the seemingly more prosaic procedural irregularities in the way that the FDA conducts itself, except insofar as these have allowed it to cross substantive boundaries largely unnoticed. Even if the agency never strayed from the confines of its delegated authority, however, efforts to circumvent procedural requirements can have serious consequences for the quality of its work and those subject to its commands. A preference for staying under the radar whenever possible means evading critical checks exercised by all three branches of government.

The FDA has used a variety of procedural short cuts when implementing its statutory powers. Part II of this paper focuses on the agency's shift from the promulgation of binding rules to the issuance of nonbinding guidance documents. Although Congress and the White House seem to have become increasingly comfortable with the agency's practice, the FDA may have gotten a little carried away with this mechanism for announcing its policies. Part III of this paper explains how the agency secures widespread adherence to its technically nonbinding policies, whether expressed through guidance documents or left largely unspoken. The FDA enjoys significant leverage over regulated entities, by virtue of its powers of enforcement and product licensing, and in both settings it can communicate threats and offers that (more often than not) secure "voluntary" compliance with whatever the agency demands. Even if the FDA limits itself to requesting concessions that it could have-after expending greater effort-imposed directly, such a backdoor approach sacrifices the procedural safeguards dictated by the legislative, executive and judicial branches.

II. ANNOUNCING AGENCY INTENTIONS AND EXPECTATIONS

During the last quarter of a century, federal regulators have found it increasingly difficult to promulgate regulations,(fn3) and guidance doc-

2

uments have become a more frequently used format for announcing agency intentions and expectations.(fn4) Under the Administrative Procedure Act (APA),(fn5) "interpretative rules" and "general statements of policy" need not undergo notice-and-comment rulemaking,(fn6) though courts have struggled to draw a line between "legislative" and "nonlegislative" rules.(fn7) Technically, guidance documents lack any binding effect,(fn8) but agencies often seem to expect regulated entities to abide by

3

announcements that have not emerged from rulemaking procedures.(fn9) In addition to avoiding the need to follow procedural requirements under the APA, agencies may shy away from issuing legislative rules in order to dodge judicial review.(fn10) More recently, one commentator suggested that avoidance of scrutiny by the White House's Office of Management and Budget (OMB) also may serve as a motivating factor.(fn11) As another commentator summarized:

4

[B]y issuing a guidance document, an agency can obtain a rule-like effect while minimizing political oversight and avoiding the procedural discipline, public participation, and judicial accountability required by the APA. The prospect of "compliance for less" is almost certainly among the reasons that agencies use guidance documents rather than go through the effort of notice-and-comment rulemaking.(fn12)

This Part offers an in-depth look at the evolving use of guidance documents by the FDA. is

5

A. The FDA's Struggles in Promulgating Regulations

The FDA was one of the first federal agencies to make extensive use of its initially unclear rulemaking powers. In lieu of bringing enforcement actions under the open-ended provisions of the Food, Drug, and Cosmetic Act (FDCA),(fn14) and generating adjudicatory precedent for future cases, the FDA began to promulgate more detailed rules to implement its statutory authority.(fn15) Although infractions still required individual enforcement proceedings, the agency would simplify its burden of proof in those cases,(fn16) which, coupled with the greater clarity of expectations, would help to promote improved compliance.

In the FDCA, Congress expressly granted the agency the authority to issue regulations governing certain subjects,(fn17) but it also required that interested parties be allowed to request a public hearing as part of the rulemaking process.(fn18) Until 2007, for instance, the fDA's power to promulgate prescription drug advertising regulations was subject to this "formal" rulemaking procedure.(fn19) In practice, these procedural requirements became a source of frustrating delays for the agency.(fn20)

The statute also included residual rulemaking authority.(fn21) After courts decided that this provision empowered the FDA to issue binding regulations on matters not specifically covered by the formal

6

rulemaking provision,(fn22) the agency shifted to notice-and-comment procedures for the promulgation of rules. At the same time, courts allowed interested parties to bring pre-enforcement challenges to such regulations.(fn23) Although "informal" rulemaking avoided the cumbersome hearings required with formal rulemaking, searching judicial review on the merits,(fn24) coupled with increasing procedural demands added by all three branches of government, have made it increasingly difficult.(fn25) For instance, in the FDA's largest rulemaking exercise underway at the moment (regulations to implement significant statutory amendments related to food safety), OMB apparently delayed issuance of the proposed rules for over one year.(fn26)

7

The FDA has experimented with further short cuts for issuing rules. In 1997, expressing an interest in expediting the issuance of its routine or otherwise noncontroversial regulations, the agency published a guidance document to describe "direct final rulemaking," which dispenses with the need to publish a proposal or invite public comment unless someone objects shortly after promulgation.(fn27) Direct final rulemaking has not, however, worked out as well as the agency had hoped. A survey conducted a little more than one year after issuance of the guidance found that "the FDA has issued thirteen direct final rules, five of which it has already withdrawn in whole or in part because of the receipt of some significant adverse comment."(fn28) One decade later, a follow-up survey found a similar pattern,(fn29) and little has changed during the latest five-year period.(fn30)

8

B. Guidance-making as the New Rulemaking

As informal rulemaking became increasingly difficult, the FDA shifted from promulgating regulations to issuing guidance.(fn31) By the mid-1990s, "[w]ell over a thousand such documents exist[ed]."(fn32) This offered the agency a convenient short cut for communicating its expectations to regulated entities, but the FDA's growing dependence on guidance documents presents a couple of problems. First, these informal announcements may operate as de facto rules but escape normal procedural safeguards for their promulgation or review.(fn33) Second, they allow the FDA to take positions that do not even constrain agency officials, which leaves regulated entities guessing about their rights and obligations.(fn34) Nonetheless, Congress largely has endorsed and even encouraged this development, though questions remain about whether the agency may have gone too far.

1. Evolution of the FDA's Good Guidance Practices

The FDA has formalized its procedures for the issuance and use of guidance documents. In 1997, the agency announced its policy on "Good Guidance Practices" (GGPs).(fn35) The new policy called for uni-

9

formity in format, the use of standardized nomenclature, explicit language disavowing any binding legal effect, assurances of access to these documents by interested parties, limited opportunities for public input, and procedures for internal review.(fn36) This policy represented a response to complaints that the FDA inappropriately used guidance documents as if they constituted binding rules that regulated entities had to follow.(fn37)

Less than a year later, in the course of making sweeping amendments to the FDCA, Congress directed the agency to issue the GGPs as regulations no later than July 1, 20...