Chevron deference and drug preclusion: Another way forward for dietary supplements

A recent article has raised provocative questions about how the end of Chevron deference will impact the dietary supplement market, particularly the matter of drug preclusion. I take a decidedly different view than the folks interviewed in that article of the impact that Loper Bright Enterprises v. Raimondo and the end of Chevron deference will have on drug preclusion. And I suggest we don’t wait for the courts to figure it out.

The handwringing about whether the Loper case makes the U.S. Food and Drug Administration more or less likely to invoke the rulemaking exception under drug preclusion, its overall effect on FDA’s use of drug preclusion, and whether it will be good or bad for the industry is misplaced. Whether the end of Chevron deference is a “good” thing is a highly idiosyncratic response dependent on a whole host of factors concerning the individual agency position being examined, and frankly, whether you like a particular decision or not.

If someone agrees with the outcome of a federal agency’s interpretation in a particular case, then they don’t want a court to overturn it, and Chevron deference (named after a 1984 U.S. Supreme Court decision, Chevron U.S.A. Inc. v. Natural Resources Defense Council Inc.) previously helped assure that the agency’s position would survive legal challenge. But in situations where someone disagreed with the agency’s thinking, Chevron deference gave the agency undue influence over the court. The end of Chevron deference means people have a fresh opportunity to persuade a court that the agency’s interpretation is incorrect, the result is not what Congress intended when it wrote the law, and the interpretation of the litigant challenging the government decision should prevail unburdened by any special subservience to the agency. So the question whether the demise of Chevron is worth celebrating really is outcome driven and fact dependent. People can like it when it produces the result they want.

Related:FDA is exploring rulemaking for NAC supplements

"THE REALITY IS THAT FDA'S STATED POSITION ON DRUG PRECLUSION IS A TORTURED INTERPRETATION OF THE STATUTE. IT SHOULD NOT SURVIVE JUDICIAL REVIEW WHETHER CHEVRON DEFERENCE EXISTED OR NOT."

Now, let’s look at the drug preclusion issue.

The Council for Responsible Nutrition (CRN) has argued for years that FDA’s current position is an incorrect reading of the Dietary Supplement Health and Education Act of 1994 (DSHEA). The drug preclusion provision enshrined in 1994 was intended to provide some degree of protection to pharmaceutical manufacturers, preventing the supplement industry from snatching away millions of dollars and years invested in research if the article being marketed as a supplement is identical to the drug. However, it was not intended to confer eternal monopolies to drugmakers for performing basic, preclinical research on a molecule and then removing it from commercialization as a dietary supplement forever. Unfortunately, that’s what it’s become.

Related:With Chevron deference gone, will NAC rulemaking cause problems for FDA?

Under FDA’s viewpoint, pharmaceutical companies can insist FDA invoke drug preclusion even for vastly different delivery forms, dosages, and related but different compounds of the “article” they have researched. FDA can invoke drug preclusion for therapeutic uses vastly different from the one pharma investigated. FDA can invoke drug preclusion when pharma secretly files IND (investigational new drug) applications without the supplement industry even knowing the ingredient is now “off the table." FDA can even invoke drug preclusion after pharma abandons its own research to prevent future marketing of the article as a supplement.

These are the unreasonable and illogical outcomes of FDA’s position that CRN articulated in its citizen petition to FDA on NAC in 2021, and then in another petition on the broader drug preclusion issue in 2023. If presented in court, these unreasonable outcomes would likely convince a judge that FDA’s interpretation is tortured and inconsistent with Congress’s intent.

Following CRN’s first petition, FDA eventually announced enforcement discretion for marketing NAC as a supplement, but that is not the same as acknowledging drug preclusion does not apply to NAC based on a reasoned interpretation of the statute; it was simply the agency’s easy way out — a temporary measure for FDA to avoid litigating the matter in court. CRN called that out then; a grant of enforcement discretion specific to one ingredient is no solution but just a temporary Band-Aid. The fact that it took months to get N-acetyl cysteine (NAC) back on Amazon’s platform and that some retailers are still reluctant to sell NAC under the enforcement discretion policy is evidence that NAC is still marketed under a shadow.

That enforcement discretion policy should have signaled that FDA was not secure in its position on the application of drug preclusion to NAC in the first place. FDA’s subsequent call for data on the safety of NAC, and most recently, the announcement that a rulemaking is forthcoming to address the legal status of a particular ingredient (presumably referring to NAC) are further indications that FDA is not sure it can defend its current position on drug preclusion. That was the case before Loper, and it’s even more likely that a court would reject FDA’s interpretation of the drug preclusion provision in a post-Chevron climate where the agency’s interpretation is accorded less weight.

The reality is that FDA’s stated position on drug preclusion is a tortured interpretation of the statute. It should not survive judicial review whether Chevron deference existed or not. The Loper decision makes it even more likely to fail if FDA’s expansive view of drug preclusion were tested in court.

That’s why CRN is optimistic about the rulemaking for NAC anticipated to be coming later this year. It may signal a change in FDA’s thinking, a more balanced approach to arbitrating between supplement and pharma interests, and a more equitable recognition that drug and supplement applications of similar ingredients can coexist. It may lay out criteria for how the drug preclusion balancing act should work, guide supplement producers how to plan their innovation, and not have it pulled out from under them (as has occurred with several ingredients already). Maybe it’s worth the wait.

But what if an FDA rulemaking doesn’t work out the way industry wants? Suing the agency is costly, acrimonious and still a gamble. Instead, CRN is working on possible legislative changes to the law that would clarify the ambiguous aspects of the drug preclusion section. The concept of Chevron deference only exists when the statute is unclear on its face and the agency has to interpret it. If we amend the drug preclusion provision and make its application clear, there is no need to rely on FDA to interpret it. Creating statutory clarity also benefits FDA by giving it a clear roadmap for enforcement as opposed to waiting for a court to review FDA’s current interpretation in a post-Chevron world.

Some of the changes we are looking at would: (1) limit drug preclusion to the same dosage form and similar dosage levels as the drug itself; (2) clarify that any dietary ingredient marketed before the passage of DSHEA is not subject to drug preclusion; (3) limit drug preclusion to orally administered drugs — supplements have to be ingested, so why should a topical or inhaled drug applications prevent its use as a supplement?; (4) require drug manufacturers to conduct phase 2 or phase 3 trials to qualify for preclusion; and (5) clarify that merely submitting a secretive IND application does not trigger the start of drug preclusion. There must be public evidence of the research so companies know when an ingredient has been shielded from further development.

So, will the end of Chevron deference cause FDA to rethink drug preclusion? Our citizen petitions exposing FDA’s misdirected thinking triggered discussions at FDA long before the Loper decision was announced in June. Under either Loper or Chevron, an agency has to defend its interpretation, and FDA’s position on drug preclusion was indefensible from the start. And in case FDA digs in on its flawed interpretation in the upcoming rulemaking, that’s why we are seeking legislative proposals to provide a clear path forward to protect innovation and foster new product development. We’ll see you in the halls of Congress next year.