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\par No. 95-28
\par 
\par IN THE SUPREME COURT OF THE UNITED STATES
\par 
\par OCTOBER TERM, 1995
\par 
\par SCHERING CORPORATION, PETITIONER
\par 
\par v.
\par 
\par FOOD AND DRUG ADMINISTRATION
\par 
\par ON PETITION FOR A WRIT OF CERTIORARI
\par TO THE UNITED STATES COURT OF APPEALS
\par FOR THE THIRD CIRCUIT
\par 
\par BRIEF FOR THE RESPONDENT IN OPPOSITION
\par 
\par DREW S. DAYS, III
\par Solicitor General
\par 
\par FRANK W. HUNGER
\par Assistant Attorney General
\par 
\par DOUGLAS N. LETTER
\par Attorney
\par 
\par Department of Justice
\par Washington, D.C. 20530
\par (202)514-2217
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par 
\par QUESTION PRESENTED
\par 
\par Under the Federal Food, Drug, and Cosmetic Act,
\par 21 U.S.C. 301 et seq. (FDCA), a drug manufacturer
\par can receive approval from respondent Food and Drug
\par Administration (FDA) for a new generic drug
\par through an abbreviated application procedure (21
\par U.S.C. 355(j)), if the manufacturer establishes that
\par the generic drug is bioequivalent to a drug previously
\par approved by the FDA. The question presented is:
\par Whether the FDA's regulation, 21 C.F.R. 320.1(e),
\par implementing one of the statutory bioequivalence pro-
\par visions constitutes a reasonable interpretation of the
\par FDCA.
\par 
\par (I)
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par 
\par TABLE OF CONTENTS
\par 
\par Page
\par 
\par Opinions below . . . . 1
\par Jurisdiction . . . . 1
\par Statement . . . . 2
\par Argument . . . . 9
\par Conclusion . . . . 12
\par 
\par TABLE OF AUTHORITIES
\par 
\par Chevron U.S.A. Inc. v. Natural Resources Defense
\par Council, Inc., 467 U. S. 837 (1984) . . . . 5, 6, 7, 11
\par Schering Corp. v. Shalala, 995 F.2d 1103 (D.C. Cir.
\par 1993)  . . . . 5
\par Schering Corp. v. Sullivan, 782 F. Supp. 645(D.D.C.
\par 1992), vacated as moot, 995 F.2d 1103 (D. C. Cir. 1993) . . . . 4-5
\par Tri-Bio Laboratories, Inc, V. United States, 836 F.2d
\par 135 (3d Cir. 1987), cert. denied, 488 U. S. 818 (1988)  . . . . 8
\par Weinberger v. Hynson, Wescott & Dunning, Inc., 412
\par U.S. 609 (1973)  . . . . 8
\par 
\par Statutes and regulations:
\par 
\par Federal Food, Drug, and Cosmetic Act, 21 U. S. C. 301
\par et seq. . . . . 2,9
\par 21 U.S.C. 355(b) . . . . 2, 3
\par 21 U.S.C. 355(j)(2)(A)(iv) . . . . 2
\par 21 U.S.C. 355(j)(6)(A)( i)(III) . . . . 10
\par 21 U.S.C. 355(j)(7)(A) . . . . 6, 10
\par 21 U.S.C. 355 (j)(7)(B) . . . . 2-3, 5, 6, 7, 8, 9, 10
\par 21 U.S.C. 355(j)(7)(B)(i) . . . . 2,4
\par 21 U.S.C. 355(j)(7)(B)(ii) . . . . 3,4
\par Drug Amendments of 1962, Pub. L. No. 87-781, 76 Stat.
\par 780 . . . . 8
\par 21 C.F.R.:
\par Section 320.1(e) . . . . 3, 4, 6, 9
\par Sections 320.1-320.62 (1977) . . . . 7
\par Section 320.22 (1977) . . . . 7
\par 
\par (III)
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par 
\par IV
\par 
\par Regulations-Continued:
\par   Section 320.24 (1977) . . . . 7
\par   Section 320.53 (1977) . . . . 7
\par   Section 320.57 (1977 . . . . 7
\par 
\par Miscellaneous
\par H.R. Rep. No. 857, 98th Cong., 2d Sess. Pt. I (1984) . . . . 7
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par In the Supreme Court of the United States
\par     
\par OCTOBER TERM. 1995
\par 
\par No. 95-28
\par 
\par SCHERING CORPORATION, PETITIONER
\par 
\par v.
\par 
\par FOOD AND DRUG ADMINISTRATION
\par 
\par ON PETITION FOR A WRIT OF CERTIORARI
\par TO THE UNITED STATES COURT OF APPEALS
\par     FOR THE THIRD CIRCUIT
\par 
\par BRIEF FOR THE RESPONDENT IN OPPOSITION
\par 
\par OPINIONS BELOW
\par 
\par The opinion of the court of appeals (Pet. App. 1a-
\par 21a) is reported at 51 F. 3d 390. The opinion of the
\par district court (Pet. App. 22a-31a) is reported at 866 F.
\par Supp. 821.
\par 
\par JURISDICTION
\par 
\par The judgment of the court of appeals was entered on
\par April 3, 1995. The petition for a writ of certiorari was
\par filed on July 3, 1995. The jurisdiction of this Court is
\par invoked under 28 U.S.C. 1254(1).
\par 
\par (1)
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par 
\par 2
\par 
\par STATEMENT
\par 
\par 1. The Federal Food, Drug, and Cosmetic Act, 21
\par U.S.C. 301 et seq. (FDCA), provides that manu-
\par facturers of new generic drugs can obtain approval for
\par their products from respondent, the Food and Drug
\par Administration (FDA), through an abbreviated appli-
\par cation procedure, without the clinical testing that is
\par necessary as part of a new drug application procedure.
\par To obtain FDA approval for a generic drug under the
\par abbreviated procedures, the manufacturer must estab-
\par lish, inter alia, that its generic drug is bioequivalent
\par to a drug that previously was approved by the FDA.
\par See 21 U.S.C. 355(b); 21 U.S.C. 355(j)(2)( A)(iv). Bio-
\par equivalence occurs "when two drugs possess the
\par same efficacy." Pet. App. 5a.
\par The FDCA describes two circumstances in which a
\par drug "shall be considered to be bioequivalent" to
\par another drug. Section 355(j)(7)(B), which was added in
\par 1984 as part of the expansion of the abbreviated appli-
\par cation procedure, provides:
\par 
\par A drug shall be considered to be bioequivalent to a
\par listed drug if-
\par 
\par (i) the rate and extent of absorption[1] of the
\par drug do not show a significant difference from the
\par rate and extent of absorption of the listed drug
\par when administered at the same molar dose of the
\par therapeutic ingredient under similar experimental
\par 
\par ___________________(footnotes)
\par  
\par 1. Absorption describes the process by which an active drug
\par ingredient enters the body's physical system. Systemic absorp-
\par tion is the process by which a drug is introduced into the
\par bloodstream, as occurs when a pill is taken orally or a drug is in-
\par jected directly into the bloodstream.
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par 
\par 3
\par 
\par conditions in either a single dose or multiple doses:
\par or
\par 
\par    (ii) the extent of the absorption of the drug
\par does not show a significant difference from the
\par extent of absorption of the listed drug when
\par administered at the same molar dose of the
\par therapeutic ingredient under similar experimental
\par conditions in either a single dose or multiple doses
\par and the difference from the listed drug in the rate
\par of absorption of the drug is intentional, is reflected
\par in its proposed labeling, is not essential to the
\par attainment of effective body drug concentrations
\par on chronic use, and is considered medically
\par insignificant for the drug.
\par 21 U.S.C. 355(j)(7)(B).
\par In 1992, the FDA promulgated regulations imple-
\par menting the bioequivalence requirements for generic
\par drugs approved under the 1984 abbreviated application
\par procedure. The regulation implementing subpart (i)
\par of Section 335(j)(7)(B) defines bioequivalence as "the
\par absence of a significant difference in the rate and
\par extent to which the active ingredient or active moiety
\par in pharmaceutical equivalents or pharmaceutical al-
\par ternatives becomes available at the site of drug action
\par when administered at the same molar dose and under
\par similar conditions in an appropriately designed
\par study." 21 C.F.R. 320.1(e).
\par 2. Petitioner, a manufacturer of certain pioneer 2
\par drug products previously approved by the FDA, filed
\par 
\par ___________________(footnotes)
\par 
\par 2. A pioneer drug is the first drug product, defined by its
\par particular active ingredient, to receive FDA approval for a
\par specified use. Pet. App. 2a
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par 
\par 4
\par 
\par suit in the United States District Court for the
\par District of New Jersey claiming that the FDA's reg-
\par uation defining bioequivalence, 21 C.F.R. 320.1(e), is
\par invalid. Petitioner argued that the statutory pro-
\par visions regarding bioequivalence, 21 U.S.C. 355(j)-
\par (7)(B)(i) and (ii), constitute the only permissible def-
\par initions of bioequivalence and that these definitions
\par call for an assessment of the actual absorption of drug
\par products by the body. Petitioner contended that the
\par FDA's regulation impermissible broadens that statu-
\par tory definition by replacing the statutorily prescribed
\par measurement of drug absorption with a measurement
\par that assesses when the drug becomes available at the
\par site of actions. 3.
\par The district court denied petitioner's motion for
\par summary judgment and entered summary judgment
\par for the FDA. Pet. App. 22a-32a.4 The court adopted
\par the reasoning of an earlier issued opinion of the
\par United States District Court for the District of
\par Columbia. Schering Corp. v. Sullivan, 782 F. Supp.
\par 645 (1992), vacated as moot, 995 F.2d 1103 (D.C. Cir.
\par                            
\par ___________________(footnotes)
\par 
\par 3. Petitioner argued that the bioequivalent standard based on
\par absorption set forth in the FDCA could not be met for certain of
\par its pioneer products that are non-systemically effective drugs,
\par i.e. medications effective through topical application, such as
\par ointments and mist inhalers.  Therefore, under petitioner's
\par interpretation and absent the FDA regulation defining bio-
\par equivalence to focus on availability, generic drugs claiming to be
\par copies of petitioner's non-systemically effective drugs could not
\par be approved through the abbreviated procedure because the
\par abbreviated procedure requires the absorption bioequivalent
\par determination. See Pet. App. 4a-5a.
\par 
\par 4. The district court rejected the FDA's challenge to peti-
\par tioner's standing to maintain the action, as did the court of ap-
\par peals. Pet. App. 26a-30a; id. at 13a.
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par 
\par 5
\par 
\par 1993) (set forth at Pet. App. 33a-49a). That' opinion
\par arose out of an action petitioner had commenced in
\par 1989, seeking a declaration from the FDA that, inter
\par alia, the bioequivalence requirement in the 1984
\par abbreviated application procedure could be met only
\par by satisfying one of the two circumstances set forth
\par in 21 U.S.C. 355(j)(7)(B). The district court in the
\par earlier case had rejected petitioner's claim and en-
\par tered summary judgment for the FDA. 5. Consistent
\par with that ruling, the district court below granted
\par summary judgment to the FDA, concluding that
\par "Congress had not set forth an exclusive definition of
\par `bioequivalent.'" Pet. App. 31a.
\par 
\par ___________________(footnotes)
\par 
\par 5. Petitioner had petitioned the FDA in 1989 to deny all
\par abbreviated applications for approval of non-systemically effec-
\par tive drugs. The FDA denied the petition and petitioner sought
\par judicial review. The district court granted the FDA summary
\par judgment. Pet. App. 33a-49a. The district court rejected peti-
\par tioner's claim that 21 U.S.C. 355(j)(7)(B) provided the exclusive
\par means for determining the bioequivalence required in the abbre-
\par viated application procedure. Pet. App. 43a. The court applied
\par the two-step analysis in Chevron U.S.A. Inc. v. Natural
\par Resources Defense Council, Inc., 467 U.S. 837 (1984). and con-
\par cluded that the congressional intent behind Section 355(j)(7)(B)
\par is clear and that "Congress permitted the FDA to retain its
\par historically wide discretion in defining showings of `bioequiv-
\par alence.' " Pet. App. 38a. The court also held, alternatively, that
\par even if the FDCA is ambiguous or silent on the issue, the FDA's
\par interpretation is valid because it is a reasonable interpretation in
\par light of the absence of any evidence that Congress intended to
\par override the FDA's practice of accepting alternative showings
\par of bioequivalence. Id. at 38a, 43a-44a. The case ultimately was
\par dismissed as moot on appeal, and the district court opinion
\par vacated, in light of the intervening promulgation of the
\par regulation, defining bioequivalence, which is at issue in this case.
\par Schering Corp. v. Shalala, 995 F.2d 1103 (D.C. Cir. 1993).
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par 
\par 6
\par 
\par 3. The court of appeals affirmed. Pet. App. 1a-21a.
\par Applying the two-step analysis in Chevron U.S.A.
\par Inc. v. Natural Resources Defense Council, Inc., 467
\par U.S. 837 (1984), the court held that the language of
\par Section 355(j)(7)(B) is ambiguous, and that the FDA's
\par regulation, 21 C.F.R. 320.1(e), is a permissible con-
\par struction of the statute. Pet. App. 3a, 16a-19a.
\par With regard to the first step of the Chevron analy-
\par sis-whether the statute is ambiguous-the court of
\par appeals disagreed with the district court's conclusion
\par that Section 355(j)(7)(B) unambiguously does not con-
\par stitute an exclusive definition of "bioequivalent." The
\par court of appeals also disagreed, however, with peti-
\par tioner's argument that Section 355(j)(7)(B) is un-
\par ambiguously exclusive. Instead, the court of appeals
\par concluded that Section 355(j)(7)(B) is ambiguous.
\par The court acknowledged that Section 355(j)(7)(B) is
\par couched in terms different from the immediately pre-
\par ceding Section, which unambiguously constitutes an
\par exclusive definition of another term. See 21 U.S.C.
\par 335(j)(7)(A).6 Nonetheless, the court of appeals de-
\par clined to find that the difference in language meant.
\par that Section 335(j)(7)(B) was unambiguously intended
\par not to be an exclusive definition. The court found
\par instead that the difference in language renders
\par Section 255(j)(7)(B) ambiguous and that that deter-
\par mination is reinforced by other provisions of the
\par FDCA that indicate that Congress envisioned the use
\par 
\par ___________________(footnotes)
\par 
\par 6 That Section provides:
\par   (A) The term "bioavailability" means the rate and
\par   extent to which the active ingredient or therapeutic! in-
\par   gredient is absorbed from a drug and becomes available at
\par   the site of drug action.
\par 21 U.S.C. 335(j)(7)(A).
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par 
\par 7
\par 
\par of more than the one method of determining bio-
\par equivalence. Pet. App. 15a-17a. The court found that
\par the legislative history of the 1984 Amendments that
\par added Section 355(j)(7)(B) to the FDCA does not alter
\par that conclusion.
\par Turning to the second step of the Chevron analy-
\par sis-whether the agency's interpretation of the am-
\par biguous statute is reasonable-the court of appeals
\par agreed with the district court that the FDA's inter-
\par pretation is a permissible construction of the FDCA.
\par The court of appeals reasoned that the 1984 Amend-
\par ments to the FDCA were intended to be a means for
\par extending the abbreviated approval process, and there
\par was no evidence that Congress intended to restrict
\par the FDA's discretion in determining the bio-
\par equivalence of drugs for purposes of that process.
\par Pet. App. 18a, citing H.R. Rep. No. 857, 98th Cong., 2d
\par Sess. Pt. I (1984). The court emphasized the fact that,
\par in enacting Section 355(j)(7)(B) in 1984, Congress
\par relied on the FDA's 1977 regulations which indicated
\par that different means could be used to determine
\par bioequivalence. 7. The court recognized that Congress
\par intended through the 1984 Amendments to extend
\par that approach to generic drugs copying drugs first ap-
\par proved after 1962. Pet App. 19a.8 The court found that
\par 
\par ___________________(footnotes)
\par 
\par 7. The FDA's 1977 bioequivalence regulations, 21 C.F.R.
\par 320.1-320.62, applied both to drugs intended for systemic absorp-
\par tion and to non-systemically effective drugs, and provided for
\par bioequivalence to be established by means other than actual
\par measurement of rate and extent of absorption for non-system-
\par ically effective drugs.  See 21 C.F.R. 320.22, 320,24, 320.53,
\par 320.57 (1977).
\par 
\par 8. Before the addition of Section 355(j)(7)(B) as part of the
\par broadening of the abbreviated application procedure in 1984, the
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par 
\par 8
\par 
\par the FDA's preferred method "was to determine bio-
\par equivalence on a case-by-case basis depending on the
\par drug under consideration for approval pursuant to an
\par * * * abbreviated application." Ibid. It concluded
\par that "[t]he FDA is the agency charged with
\par implementing the Food, Drug and Cosmetic Act as
\par amended. Its judgments as to what is required to
\par ascertain the safety and efficacy of drugs fall
\par 
\par ___________________(footnotes)
\par 
\par procedures for FDA approval of a generic drug depended on'
\par whether the drug being copied had been previously approved by
\par the FDA before 1962. Before 1962, the FDA had approved a
\par new drug if it was safe for its intended use. The Drug Amend-
\par ments of 1962, Pub. L. No. 87-781, 76 Stat. 780, however,
\par required manufacturers of new drug products to demonstrate
\par that their products were not only safe but also effective for their
\par intended uses in order to obtain FDA approval. After the 1962
\par Amendments, the FDA conducted its own examination, through
\par the Drug Efficacy Study Implementation program (DESI), to
\par determine whether the drugs it had approved as safe before
\par 1962 were effective. See Weinberger v. Hynson, Westcott &
\par Dunning, Inc., 412 U.S. 609, 613-615 (1973). In light of these
\par determinations of efficacy, the FDA decided to accept abbrevi-
\par ated new drug applications for generic copies of drugs it had
\par found to be effective under the DESI program. The FDA
\par required the abbreviated applications to contain information
\par demonstrating that the product was bioequivalent to the pre-
\par viously approved drug, Full new drug applications were still
\par required for generic versions of drugs first approved after 1962,
\par however, because they had not been subject to DESI review.
\par See Tri-Bio Laboratories, Inc. v. United States, 836 F.2d 135,
\par 138 (3d Cir. 1987), cert. denied, 488 U.S. 818 (1988). Thus, the
\par 1984 Amendments were intended to extend the abbreviated
\par approval process for generic drugs to generic drugs that copied
\par drugs approved after 1962.
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par 
\par 9
\par 
\par squarely within the ambit of the FDA's expertise and
\par merit deference from us." Id. at 19a.9
\par 
\par ARGUMENT
\par 
\par Petitioner contends (Pet. 16-23) that the court of
\par appeals' opinion is contrary to the language, struc-
\par ture and history of the Federal Food, Drug, and
\par Cosmetic Act, 21 U.S.C. 301 et seq., and that 21 U.S.C.
\par 355(j)(7)(B) unambiguously establishes an exclusive
\par definition of bioequivalence. Pet. 17-18. Petitioner
\par contends (Pet. 23-27) that the court of appeals erred in
\par upholding the FDA's regulation, 21 C.F.R. 320.1(e), as
\par a permissible interpretation of the FDCA because the
\par court "fundamentally misunderstood" the congres-
\par sional purpose behind the addition of Section
\par 355(j)(7)(B) to the FDCA in 1984, Pet. 25.
\par The court of appeals correctly rejected petitioner's
\par arguments, as did the two district courts that have
\par addressed them. The court of appeals' opinion reflects
\par a straightforward-and correct-application of t his
\par Court's precedents on statutory construction. Peti-
\par tioner acknowledges that there is no relevant circuit
\par conflict. Pet. 15-16.
\par Section 355(j)(7)(B) cannot reasonably be read as an
\par unambiguous statement of an exclusive definition. 
\par 
\par ___________________(footnotes)
\par 
\par 9. Petitioner also had sought injunctive relief to prohibit the
\par FDA from releasing certain safety and efficacy data regarding
\par its products. See Pet. App. 7a n.4. That request for relief was
\par dependent on a favorable finding on the merits and was
\par therefore denied by the district court and the court of appeals.
\par Id. at 7a n.4, 20a. The court of appeals also rejected petitioner's
\par challenge to the district court's treatment of the FDA's motion
\par for judgment on the pleadings as a motion for summary judg-
\par ment. Id. at 20a-21a. Petitioner does not raise these issues in
\par this Court.
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par 
\par 10
\par 
\par See Pet. App. 13a-17a. Section 355(j)(7)(B) sets forth
\par two circumstances in which a drug "shall be
\par considered" to be bioequivalent to another drug. The
\par Section's plain language does not state that the
\par . meaning of "bioequivalent" is limited to those two
\par circumstances.  In contrast, the immediately pre-
\par ceding Section of the statute contains limiting
\par language and is couched in terms of what that term
\par "means." See 21 U.S.C. 355(j)(7)(A). Moreover, as the
\par court of appeals recognized, other Sections of the
\par FDCA implicitly acknowledge that other means of
\par determining bioequivalence are permitted. Those
\par Sections reinforce the conclusion that Section
\par 355(j)(7)(B) is not an unambiguous, exclusive defin-
\par ition of bioequivalence. See Pet. App. 16a-17a, citing
\par 21 U.S.C. 355(j)(6)(A)(i)(III).
\par Thus, the language and structure of the FDCA are
\par consistent with the FDA's interpretation that Sec-
\par tion 355(j)(7)(B) functions as a safe harbor. The
\par Section establishes two circumstances in which the
\par FDA is required to find that a drug is a bioequivalent,
\par but the statute permits the FDA to determine
\par bioequivalence using additional methods.
\par The history of the 1984 Amendments to the FDCA
\par also supports the FDA's interpretation. By adding
\par the broader abbreviated application procedure in 1984,
\par Congress intended to make available a greater num-
\par ber of safe and effective low-cost generic drugs.
\par Congress sought to achieve this goal by extending
\par the abbreviated application procedure and requiring a
\par finding of bioequivalence as a part of the procedure,
\par but it did not dictate the exclusive means by which
\par the bioequivalence finding must be made. Pet. App.
\par 18a. Most significantly, "[although the [1984 Amend-
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par 
\par 11
\par 
\par ments] mandated a showing of bioequivalence for
\par approval, there is no evidence that Congress intended
\par to limit the discretion of the FDA in determining
\par when drugs were bioequivalent for purposes of [the
\par abbreviated] approval. To the contrary, the expressed
\par desire of Congress was to extend the then-current
\par FDA abbreviated application practices to drugs first
\par approved post-1962." Pet. App. 18a-19a.
\par The FDA's method for determining bioequivalence
\par relies on a case-by-case approach that depends on the
\par characteristics of the drug under consideration. Ab-
\par sent an expressed contrary congressional intent, that
\par judgment of the agency charged with implementing
\par the FDCA merits deference. Pet. App. 19a. The
\par court of appeals properly recognized the "con-
\par siderable weight [that] should be accorded to an exec-
\par utive department's construction of a statutory
\par scheme it is entrusted to administer, and [that] the
\par principle of deference to administrative interpre-
\par tations `has been consistently followed by this Court
\par whenever decision as to the meaning or reach of a
\par statute has involved reconciling conflicting policies'."
\par Chevron, 467 U.S. at 844 (footnote omitted). The
\par FDA's "judgments as to what is required to ascertain
\par the safety and efficacy of drugs fall squarely within
\par the ambit of the FDA's expertise and merit
\par de ference." Pet. App. 19a.
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par 
\par 12
\par 
\par CONCLUSION
\par 
\par The petition for a writ of certiorari should be
\par denied.
\par Respectfully submitted.
\par 
\par DREW S. DAYS, III
\par Solicitor General
\par 
\par FRANK W. HUNGER
\par Assistant Attorney General
\par 
\par DOUGLAS N. LETTER
\par Attorney
\par 
\par SEPTEMBER 1995
\par 
\par 
\par }}