In a landmark decision, the Supreme Court upheld the authority of the Food and Drug Administration (FDA) to issue circulars enforcing bioavailability/bioequivalence (BA/BE) testing requirements for drug registration. The Court ruled that FDA Circular Nos. 1 and 8, series of 1997 are valid issuances, necessary for the effective implementation of the regulations ensuring drug safety and efficacy, despite the claim that only the Department of Health (DOH) could issue such rules. This decision confirms the FDA’s power to administer and supervise health regulations, safeguarding public health by ensuring the quality and effectiveness of pharmaceutical products available in the market.

FDA’s Mandate: Can the FDA Enforce Bioavailability Testing for Drug Registration?

The case revolves around the Republic of the Philippines, represented by the Bureau of Food and Drugs (BFAD), now the Food and Drug Administration (FDA), and respondents Drugmaker’s Laboratories, Inc. and Terramedic, Inc. At the heart of the issue is the FDA’s authority to issue and implement Circular Nos. 1 and 8, series of 1997, which pertain to the requirement of bioavailability/bioequivalence (BA/BE) testing for the registration of pharmaceutical products. These circulars were challenged by the respondents, who argued that the FDA overstepped its authority, claiming that the power to issue such rules resides solely with the Secretary of Health.

The FDA was created through Republic Act No. 3720, also known as the “Food, Drug, and Cosmetic Act,” with the primary objective of establishing safety and efficacy standards for foods, drugs, devices, and cosmetic products. In 1989, the Department of Health (DOH) issued Administrative Order No. 67, series of 1989, which required drug manufacturers to register certain drug and medicine products with the FDA before they could be sold in the market. A critical component of this registration process was a satisfactory bioavailability/bioequivalence (BA/BE) test. However, the implementation of the BA/BE testing requirement was initially delayed due to the absence of local facilities capable of conducting the tests.

The situation evolved with the establishment of BA/BE testing facilities in the country, leading to the FDA’s issuance of Circular No. 1, series of 1997, which resumed the implementation of the BA/BE testing requirement. Circular No. 8, series of 1997, followed, providing additional implementation details concerning the BA/BE testing requirement on drug products. The respondents, manufacturers of a “multisource pharmaceutical product” called “Refam 200mg/5mL Suspension,” used to treat tuberculosis, found themselves at odds with these circulars.

Initially, the respondents had secured a Certificate of Product Registration (CPR) for Refam without undergoing BA/BE testing, as the requirement was not strictly enforced at the time. However, subsequent renewals of their CPR were conditioned upon the submission of satisfactory BA/BE test results. After the respondents submitted BA/BE test results indicating that Refam was “not bioequivalent with the reference drug,” the FDA continued to revalidate the CPR for a limited time, eventually warning that no further revalidations would be granted without satisfactory BA/BE test results.

Rather than comply with the BA/BE testing requirement, the respondents filed a petition for prohibition and annulment of Circular Nos. 1 and 8, series of 1997, arguing that the FDA lacked the authority to issue such circulars. They contended that RA 3720 granted the rule-making power to the DOH, not the FDA, and that the circulars were issued without proper legal basis or due process. The Regional Trial Court (RTC) sided with the respondents, declaring Circular Nos. 1 and 8, series of 1997, null and void, issuing writs of permanent injunction and prohibition against the FDA, and directing the FDA to issue CPRs in favor of the respondents’ products.

The RTC reasoned that RA 3720 did not explicitly grant the FDA the authority to issue and implement the subject circulars, nor did it authorize the Secretary of Health to delegate such powers to the FDA. Aggrieved, the FDA elevated the case to the Supreme Court, asserting its authority to issue the circulars as the agency mandated to administer and enforce laws and regulations pertaining to the registration of pharmaceutical products. The central question before the Supreme Court was whether the FDA validly issued and implemented Circular Nos. 1 and 8, series of 1997.

The Supreme Court emphasized that administrative agencies may exercise quasi-legislative or rule-making powers only when a law delegates these powers to them. The rules promulgated must align with the granting statute and not involve discretion as to what the law should be. The Court categorized administrative regulations into legislative, interpretative, and contingent rules. Legislative rules implement primary legislation by providing details, interpretative rules clarify existing statutory regulations, and contingent rules are based on the existence of certain facts.

Executive Order No. 292, series of 1987, also known as the “Administrative Code of 1987,” requires administrative regulations to comply with prior notice, hearing, and publication requirements to be valid and binding, unless they are merely interpretative. In this case, RA 3720, as amended, prohibits the manufacture and sale of pharmaceutical products without a proper CPR from the FDA. The FDA is authorized to accept applications for registration and grant or reject them.

The Secretary of Health, under RA 3720, is authorized to issue rules and regulations pertaining to the registration of pharmaceutical products. The Secretary of Health issued AO 67, series of 1989, to provide guidelines for the registration of pharmaceutical products, including the BA/BE testing requirement, which the respondents incorrectly attributed to Circular Nos. 1 and 8, series of 1997. The Supreme Court noted the importance of AO 67, s. 1989, stating:

AO 67, s. 1989, required, among others, that certain pharmaceutical products undergo BA/BE testing prior to the issuance of CPR, contrary to respondents’ assertion that it was Circular Nos. 1 and 8, s. 1997 that required such tests.

Although AO 67, series of 1989, established the BA/BE testing requirement, its implementation was initially stalled due to a lack of facilities. However, with the advent of BA/BE testing facilities in 1997, the FDA issued Circular No. 1, series of 1997, to enforce the requirement. The circular stated:

In Annex 1 of A.O. 67 s. 1989 which is entitled Requirement for Registration provides that “Bioavailability/Bioequivalence study for certain drugs as determined by BFAD” is required for [(i)] Tried and Tested Drug, (ii) Established Drug, and (iii) Pharmaceutical Innovation of Tried and Tested or Established Drug.

Drugs requiring strict precaution in prescribing and dispensing contained in the List-B (Prime) were the drugs identified by BFAD in the process of registration that will be required “Bioavailability/Bioequivalence” studies. However, due to the supervening factor that there had yet been no bioavailability testing unit in the country when the A.O. 67 s. 1989 became effective, the Bureau did not strictly enforce the said requirement.

The supervening factor no longer exist [sic] as of date. As a matter of fact, one of the registered products tested by the Bioavailability Testing Unit at the University of Sto. Tomas under the NDP Cooperation Project of the Philippines and Australia failed to meet the standard of bioavailability. This finding brings forth the fact that there may be registered products which do not or may no longer meet bioavailability standard.

Wherefore, all drugs manufacturers, traders, distributor-importers of products contained or identified in the list b’ (prime) provided for by BFAD, a copy of which is made part of this circular, are advised that all pending initial and renewal registration of the products aforementioned, as well as all applications for initial and renewal registration of the same, shall henceforth be required to submit bioavailability test with satisfactory results on the products sought to be registered or renewed conducted by any bioavailability testing units here or abroad, duly recognized by the BFAD under the Dept. of Health.

Circular No. 8, series of 1997, supplemented Circular No. 1, series of 1997, reiterating the significance of the BA/BE testing requirement outlined in AO 67, series of 1989. The Supreme Court determined that AO 67, series of 1989, introduced the BA/BE testing requirement as part of the CPR application process. It was considered an administrative regulation issued by the Secretary of Health, consistent with the authority granted by RA 3720. The Court presumed that AO 67, series of 1989, complied with the requirements of prior hearing, notice, and publication.

Conversely, Circular Nos. 1 and 8, series of 1997, were not considered administrative regulations. They did not implement a primary legislation, interpret existing statutory regulations, or ascertain the existence of facts upon which the enforcement of RA 3720 depended. Instead, their purpose was to administer and supervise the implementation of AO 67, series of 1989, including the BA/BE testing requirement, consistent with RA 3720. Thus, the FDA had the authority to issue these circulars, and no prior hearing, consultation, or publication was required for their validity, as they did not affect substantive rights.

FAQs

What was the key issue in this case?	The key issue was whether the FDA had the authority to issue and implement Circular Nos. 1 and 8, series of 1997, which required bioavailability/bioequivalence (BA/BE) testing for drug registration. The respondents argued that only the Secretary of Health had such authority.
What is bioavailability/bioequivalence (BA/BE) testing?	Bioavailability refers to the rate and extent to which a drug’s active ingredient is absorbed and becomes available at the site of drug action. Bioequivalence means that different drugs with the same active ingredient do not show a significant difference in their rate and extent of absorption.
Why is BA/BE testing important?	BA/BE testing ensures that generic drugs are as safe and effective as their reference counterparts. It verifies that the generic drug delivers the same amount of active ingredient to the body at the same rate, guaranteeing therapeutic equivalence.
What is a Certificate of Product Registration (CPR)?	A CPR is a document issued by the FDA that allows a pharmaceutical product to be manufactured, sold, and distributed in the Philippines. It confirms that the drug meets the required safety, efficacy, and quality standards.
What was the FDA’s argument in this case?	The FDA argued that it had the authority to issue Circular Nos. 1 and 8, series of 1997, as the agency mandated to administer and enforce laws, including rules and regulations issued by the DOH, that pertain to the registration of pharmaceutical products. The agency claimed it was only implementing existing regulations.
What was the respondents’ argument in this case?	The respondents argued that under RA 3720, the power to make rules to implement the law is lodged with the Secretary of Health, not with the FDA. They also argued that the circulars were void for lack of prior hearing, consultation, and publication.
What did the Regional Trial Court (RTC) rule?	The RTC ruled in favor of the respondents, declaring Circular Nos. 1 and 8, series of 1997, null and void. The RTC held that RA 3720 did not grant the FDA the authority to issue and implement the circulars.
How did the Supreme Court rule?	The Supreme Court reversed the RTC’s decision, holding that Circular Nos. 1 and 8, series of 1997, were valid issuances. The Court found that the FDA had sufficient authority to issue the circulars to administer and supervise the implementation of AO 67, series of 1989.
What are the implications of this ruling?	This ruling confirms the FDA’s authority to enforce regulations ensuring the safety and efficacy of pharmaceutical products in the Philippines. It underscores the importance of BA/BE testing for drug registration and safeguards public health by ensuring the quality of drugs available in the market.

In conclusion, the Supreme Court’s decision reinforces the FDA’s regulatory role in ensuring the safety and efficacy of pharmaceutical products through the enforcement of BA/BE testing requirements. This ruling is a step forward in safeguarding public health and promoting access to quality medicines.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Republic vs. Drugmaker’s Laboratories, G.R. No. 190837, March 05, 2014