Recently, H&M USA, an importer of periodic bulk shipments of active pharmaceutical ingredients (API) turned to the courts in an effort to gain relief when the company’s efforts to resolve an unexpected import detention through FDA’s administrative process proved unsuccessful. The FDA issued a Notice of Refusal, alerting the company that it had failed to submit end-use documentation, and thus must export or destroy the goods under Customs supervision within 90 days. H&M responded to the Notice of Refusal by filing a lawsuit against FDA in the Eastern District of New York challenging the agency’s actions both in detaining and later refusing entry to the importers bulk shipment of 20,000 kilograms of API acetaminophen destined for use in a nonprescription pain reliever product that would be sold by H&M’s customer, a manufacturer of pharmaceuticals that markets finished drug products under the label Rugby Laboratories, Inc. The complaint filed by H&M in the case alleges that in refusing to allow H&M’s lawfully labeled API acetaminophen shipment to be imported into the United States, FDA has engaged in unlawful conduct which violates the requirements of the Administrative Procedure Act and misapplies FDA’s own drug labeling regulations.
According to H&M’s complaint, the conflict started in early August 2013 when the U.S. Customs and Border Protection (CBP), at the direction of the FDA, detained 20,000 kilograms of API acetaminophen imported by H&M into the United States on the grounds that the shipment lacked adequate directions for use. Over the next several weeks, representatives of H&M and its customer communicated with the FDA Compliance Officer, providing information aimed at establishing that the detained shipment of API acetaminophen is lawfully labeled in accordance with the exemption FDA established under 21 C.F.R. § 201.122 for bulk drug products that are “intended for processing, or use in the manufacturer of another drug.” According to the H&M complaint and related information filed in the case, an official with FDA’s Compliance Branch stated that FDA refused entry to the API acetaminophen shipment based on the conclusion that the shipment does not qualify for the bulk labeling exemption H&M relied upon because the API acetaminophen shipment “was for future/inventory use by the contract manufacturer, which is not permitted” and because documentation confirming the end use for which the API acetaminophen was destined was submitted “from only one of the contract manufacturer’s customers.” The bases for these apparent findings are unclear.
Earlier this month, the court granted H&M’s request for a temporary restraining order, and also ordered that the Government appear before the court to show cause as to why a preliminary injunction should not be issued against the FDA. Subsequently, prior to the scheduled date of appearance, the Government and H&M came to an agreement in principle to toll the export and destruction of the API acetaminophen shipment in question while the FDA reassesses the shipment. The court will likely endorse this plan of action, but whether the results of the FDA’s review will be in H&M’s favor remain to be seen.