No. 01-344 

In the Supreme Court of the United States 

TOMMY G. THOMPSON, 
SECRETARY OF HEALTH AND HUMAN SERVICES, 
ET AL., PETITIONERS 

v. 

WESTERN STATES MEDICAL CENTER, ET AL. 

ON WRIT OF CERTIORARI 
TO THE UNITED STATES COURT OF APPEALS 
FOR THE NINTH CIRCUIT 

BRIEF FOR THE PETITIONERS 

ALEX M. AZAR II 

General Counsel 
U.S. Department of Health 
and Human Services 

DANIEL E. TROY 
Chief Counsel 

PATRICIA J. KAEDING 

Associate Chief Counsel 
U.S. Food & Drug 

Administration 
Rockville, MD 20857 
THEODORE B. OLSON 
Solicitor General 

Counsel of Record 

ROBERT D. MCCALLUM, JR. 

Assistant Attorney General 

EDWIN S. KNEEDLER 

Deputy Solicitor General 

MATTHEW D. ROBERTS 

Assistant to the Solicitor 

General 

DOUGLAS N. LETTER 
KATHERINE S. DAWSON 

Attorneys 

Department of Justice 
Washington, D.C. 20530-0001 
(202) 514–2217 

QUESTION PRESENTED 

The Food and Drug Administration Modernization Act of 
1997 (FDAMA), 21 U.S.C. 353a (Supp. V 1999), provides a 
limited exemption from the new drug approval (and certain 
other) requirements of the Federal Food, Drug, and 
Cosmetic Act (FDCA), 21 U.S.C. 301 et seq., for drugs 
compounded by pharmacists. The question presented is 
whether FDAMA’s limitation of that exemption to 
pharmacists who do not solicit prescriptions for or advertise 
particular compounded drugs, 21 U.S.C. 353a(a) and (c) 
(Supp. V 1999), is consistent with the First Amendment. 

(I) 

II 

PARTIES TO THE PROCEEDINGS 

Petitioners are Tommy G. Thompson, Secretary of Health 
and Human Services, and Bernard A. Schwetz, Acting 
Principal Deputy Commissioner, United States Food and 
Drug Administration. Respondents are Western States 
Medical Center, Women’s International Pharmacy, Health 
Pharmacy, Apothecure, College Pharmacy, Lakeside Phar- 
macy, and Wedgewood Village Pharmacy. 

TABLE OF CONTENTS 

Page 

Opinions below ............................................................................... 
1 

Jurisdiction ...................................................................................... 1 

Constitutional and statutory provisions involved ................... 
2 

Statement ........................................................................................ 2 

Summary of argument .................................................................. 
12 

Argument: 

FDAMA’s limited exemption from the new 

drug approval requirements for drugs com- 
pounded by pharmacists who do not solicit 

prescriptions for or advertise particular com- 
pounded drugs is consistent with the First 

Amendment ............................................................................. 17 

A. Substantial governmental interests underlie 

Section 353a ..................................................................... 
19 

1. There is a substantial governmental 

interest in protecting the integrity of 

the FDCA’s new drug approval process ............. 

20 

2. There is a substantial govermental 

interest in ensuring the availability of 

compounding in response to individual 

medical needs ........................................................... 

23 

3. There is a substantial governmental 

interest in balancing the interests in 

permitting compounding in response 

to individual medical needs and protecting 

the integrity of the new drug approval 

process ....................................................................... 27 

(III) 

IV 

TABLE OF CONTENTS—Continued: 
Page 

B. Section 353a directly and materially advances 

the government’s interests ........................................... 

31 

1. Promotion of particular drugs reasonably 

distinguishes drug manufacturing that is 

subject to the premarket approval process 

from compounding in response to individual 

medical needs ........................................................... 

32 

2. The court of appeals erred in concluding 

that the advertising and solicitation 

conditions do not materially advance 

the government’s interests .................................... 

37 

C. Section 353a does not burden an excessive 

amount of speech in relation to its purposes ............. 

42 

1. The advertising and solicitation limitations 

are carefully crafted to meet the govern- 
ment’s goals .............................................................. 

42 

2. The alternatives suggested by the court 

of appeals would undermine the govern- 
ment’s interests ....................................................... 

45 

Conclusion ....................................................................................... 46 

TABLE OF AUTHORITIES 

Cases: 

Bates v. United States, 522 U.S. 23 (1997) ........................ 

18 

Board of Trs. of State Univ. of N.Y. v. Fox, 492 U.S. 

469 (1989) ................................................................................. 

42 

Buckman Co. v. Plaintiffs’ Legal Comm., 121 S. Ct. 

1012 (2001) ........................................................................... 

24, 31 

Cedars N. Towers Pharm., Inc. v. United States, 

(1978-1979 Transfer Binder] Food Drug Cosm. L. Rep. 

(CCH) ¶ 38,200 (S.D. Fla. Aug. 28, 1978) .......................... 6 

V 

Cases—Continued: Page 

Central Hudson Gas & Elec. Corp. v. Public Serv. 

Comm’n, 447 U.S. 557 (1980) ........................................ 

9, 18, 42 

Dolan v. City of Tigard, 512 U.S. 374 (1994) .................... 

42 

Florida Bar v. Went For It, Inc., 515 U.S. 618 (1995) .... 

30, 42 

Florida Breckenridge, Inc. v. Solvay Pharm., Inc., 

No. 98-4606 (11th Cir. May 11, 1999) .................................. 

29 

44 Liquormart, Inc. v. Rhode Island, 517 U.S. 484 

(1996) ........................................................................................ 19 

Greater New Orleans Broad. Ass’n v. United States, 

527 U.S. 173 (1999) ................................................................ 

10, 41 

Lorillard Tobacco Co. v. Reilly, 121 S. Ct. 2404 

(2001) ........................................................................................ 

30, 42 

National Nutritional Foods Ass’n v. Mathews, 557 

F.2d 325 (2d Cir. 1977) .......................................................... 

36 

Pharmanex v. Shalala, 221 F.3d 1151 (10 Cir. 2000) ...... 

4 

Pickering v. Board of Educ., 391 U.S. 563 (1968) ............ 

43 

Premo Pharm., Inc. v. United States, 629 F.2d 795 

(2d Cir. 1980) ........................................................................... 

29 

Professionals & Patients for Customized Care v. 

Shalala: 

847 F. Supp. 1359 (S.D. Tex. 1994), aff ’d, 56 F.3d 592 

(5th Cir. 1995) ................................................................ 

4-5 

56 F.3d 592 (5th Cir. 1995) ............................................... 

26 

Rubin v. Coors Brewing Co., 514 U.S. 476 (1995) ............ 

10 

USV Pharm. Corp. v. Weinberger, 412 U.S. 655 

(1973) ........................................................................................ 4 

United States v. Algon Chem. Inc., 879 F.2d 1154 

(3d Cir. 1989) ........................................................................... 

5 

United States v. Article . . . Consisting of 216 

Individually Cartoned Bottles, 409 F.2d 734 (2d Cir. 

1969) ......................................................................................... 36 

United States v. Articles of Drug, 826 F.2d 564 (7th 

Cir. 1987) ................................................................................. 

29 

United States v. Atropine Sulfate 1.0 Mg. (Article of 

Drug) Dey-Dose, 843 F.2d 860 (5th Cir. 1988) ................ 29 

VI 

Cases—Continued: Page 

United States v. Baxter Healthcare Corp., 901 F.2d 

1401 (7th Cir. 1990) ................................................................ 

5 

United States v. Edge Broad. Co., 509 U.S. 418 

(1993) ........................................................................................ 31 

United States v. 50 Boxes More or Less, 909 F.2d 24 

(1st Cir. 1990) ......................................................................... 

29 

United States v. Generix Drug Corp., 460 U.S. 453 

(1983) ........................................................................................ 4 

United States v. Hiland, 909 F.2d 1114 (8th Cir. 

1990) ......................................................................................... 29 

United States v. 9/1 Kg. Containers, 854 F.2d 173 

(7th Cir. 1998) ......................................................................... 

5 

United States v. Rutherford, 442 U.S. 544 (1979) ........ 

3, 20, 

22, 30-31 

United States v. Sage Pharm., Inc., 210 F.3d 475 
(5th Cir. 2000) ......................................................................... 

29 

United States v. Sandoz Pharm. Corp., 894 F.2d 825 

(6th Cir. 1990) ......................................................................... 

29 

United States v. Storage Spaces Designed Nos. “8” 

and “49” Located at 277 E. Douglas, Visalin, CA, 777 

F.2d 1363 (9th Cir. 1985) ...................................................... 

36 

United States v. Sene X Eleemosynary Corp., 479 

F. Supp. 970 (S.D. Fla. 1979), aff ’d, [1982-1983 

Transfer Binder] Food Drug Cosm. L. Rep. (CCH) 

¶ 38,207 (11th Cir. Jan. 12, 1983) ......................................... 

5, 6 

United States v. 225 Cartons, More or Less, of an 

Article or Drug, 871 F.2d 409 (3d Cir. 1989) .................... 

29 

Virginia State Bd. of Pharm. v. Virginia Citizens 

Consumer Council, Inc., 425 U.S. 748 (1976) ................. 

25 

Warner-Lambert Co. v. Heckler, 787 F.2d 147 (3d Cir. 

1986) ................................................................................. 

22, 23, 38 

Weinberger v. Bentex Pharm., Inc., 412 U.S. 645 

(1973) ........................................................................................ 

4, 29 

Weinberger v. Hynson, Westcott & Dunning, Inc., 412 

U.S. 609 (1973) .................................................................... passim 

VII 

Constitution, statutes and regulations: 
Page 

U.S. Const. Amend. I ................................................ 

2, 8, 9, 11, 17 

Act of June 25, 1938, ch. 675, 52 Stat. 1040 .......................... 

21 

§ 505(a), 52 Stat. 1052 ............................................................ 

21 

Drug Amendments of 1962, Pub. L. No. 87-781, 

76 Stat. 780 .............................................................................. 

22 

Federal Food, Drug, and Cosmetic Act, 21 U.S.C. 

301 et seq. ................................................................................. 

2, 17 

21 U.S.C. 321(g)(1) ........................................................... 

36 

21 U.S.C. 321(p) ................................................................ 

37 

21 U.S.C. 321(p)(1) ....................................................... 

2, 4, 23 

21 U.S.C. 331 (1994 & Supp. V 1999) ............................ 

3 

21 U.S.C. 331(d) ................................................................ 

2, 23 

21 U.S.C. 351 (1994 & Supp. V 1999) ............................ 

3 

21 U.S.C. 351(a)(2)(B) (Supp. V 1999) .......................... 

39 

21 U.S.C. 352 (1994 & Supp. V 1999) ............................ 

3 

21 U.S.C. 353a (Supp. V 1999) ................................... 

passim 

21 U.S.C. 353a(a) (Supp. V 1999) ........................ 

8, 9, 10, 16, 

17, 32, 39, 44 
21 U.S.C. 353a(a)(1) (Supp. V 1999) .............................. 

7 

21 U.S.C. 353a(a)(2) (Supp. V 1999) .............................. 

43 

21 U.S.C. 353a(b)(1) (Supp. V 1999) .............................. 

10 

21 U.S.C. 353a(b)(1)(A) (Supp. V 1999) ........................ 

7, 39 

21 U.S.C. 353a(b)(1)(B) (Supp. V 1999) ........................ 

7, 39 

21 U.S.C. 353a(b)(1)(C) (Supp. V 1999) ........................ 

7 

21 U.S.C. 353a(b)(1)(D) (Supp. V 1999) .................. 

7, 10, 39 

21 U.S.C. 353a(b)(2) (Supp. V 1999) .............................. 

7 

21 U.S.C. 353a(b)(3) (Supp. V 1999) ...................... 

10, 40, 41 

21 U.S.C. 353a(b)(3)(A) (Supp. V 1999) ........................ 

7 

21 U.S.C. 353a(b)(3)(B) (Supp. V 1999) ........................ 

7 

21 U.S.C. 353a(c) (Supp. V 1999) ............................. 

8, 9, 16, 

17, 32, 39, 40, 43 
21 U.S.C. 355 (1994 & Supp. V 1999) ............................ 

3, 4 

21 U.S.C. 355(a) ...................................................... 

2, 3, 17, 21 

21 U.S.C. 355(a)-(d) .......................................................... 

23 

21 U.S.C. 355(b) (1994 & Supp. V 1999) ....................... 2 

VIII 

Statutes and regulations—Continued: 
Page 

21 U.S.C. 355a(a) (Supp. V 1999) ................................... 

38 

21 U.S.C. 360 (1994 & Supp. V 1999) ............................ 

3 

21 U.S.C. 360(h) ................................................................ 

3 

21 U.S.C. 360(j) (1994 & Supp. V 1999) ........................ 

3 

21 U.S.C. 360(g)(l) ............................................................ 

3 

21 U.S.C. 374(a)(2)(A) ...................................................... 

3 

Food and Drug Administration Moderization Act 

of 1997, Pub. L. No. 105-115, 111 Stat. 2296 (21 U.S.C. 

353a (Supp. V 1999)) ........................................................ 

2, 5, 17 

Pure Food and Drugs Act of 1906, ch. 3915, 34 Stat. 
768 ............................................................................................. 20 

21 C.F.R.: 

Section 201.5 ......................................................................... 
36 

Section 201.128 ..................................................................... 
36 

Miscellaneous: 

Addressing the FDA’s Performance, Efficiency, and 

Use of Resources: Hearings Before the Senate Comm. 
on Labor and Human Resources, 105th Cong., 1st 
Sess. (1997) .............................................................................. 

28 
Administered Prices, Drugs, S. Rep. No. 448, 87th 

Cong.,1st Sess. (1961) ......................................................... 

22, 35 

L.V. Allen, Jr., The Art, Science, and Technology of 

Pharmaceutical Compounding (1998) ......... 
25, 33, 34, 35, 44 

J. Avorn et al., Scientific Versus Commercial Sources 
of Influence on the Prescribing Behavior of 
Physicians, 73 Am. J. of Med. 4 (July 1982) .................... 
35 

Balaji K., Generics: The Opportunity Beacons 
(July 2001) <http://www.inpharm.com/intelligence/ 
frost010701.html> .................................................................. 27 

J.M. Beck & E.D. Azari, FDA, Off-Label Use, and 

Informed Consent: Debunking Myths and Mis- 
conceptions, 53 Food, Drug, & Cosm. L.J. 71 
(1998) ........................................................................................ 24 

D.B. Brushwood, Responsive Regulation of Internet 

Pharmacy Practice, 10 Annals Health L. 75 (2001) ....... 29 

IX 

Miscellaneous—Continued: Page 

108 Cong. Rec. (1962): 

p. 17,366 ............................................................................... 

23, 37 

pp. 19,925–19,926 ................................................................... 
22 

143 Cong. Rec.: 

p. S9839 (daily ed. Sept. 24, 1997) ................................. 

6, 33, 35 

p. S12,242 (daily ed. Nov. 9, 1997) ...................................... 
41 

Drug Industry Antitrust Act: Hearings on S. 1552 

Before the Subcomm. on Antitrust and Monopoly 
of the Senate Comm. on the Judiciary, 87th Cong., 
1st Sess. Pt. 5 (1961) .............................................................. 

21 
H. Dukes, Compounding of Medications Enjoys a 

Comeback, South Bend Tribune, Jan. 31, 2001 ............. 

28, 34 

Elixir Sulfanilamide, S. Doc. No. 124, 75th Cong., 2d 

Sess. (1937) .............................................................................. 

21 

12 FDA Drug Bull. 4 (1982) .................................................. 
24, 25 

FDA Reform Legislation: Hearings Before the 

Subcomm. on Health and the Env’t of the House 
Comm. on Commerce, 104th Cong., 2d Sess. (1996) .... 

28, 29 
37 Fed. Reg. 16,503 (1972) ....................................................... 
24 

H.R. Conf. Rep. No. 399, 105th Cong., 1st Sess. .................. 

(1997) .................................................................................. 

7, 30, 31 

H.R. Rep. No. 2755, 74th Cong., 2d Sess. (1936) ................. 
24 

H.R. Rep. No. 2139, 75th Cong., 3d Sess. (1938) ................. 
24 

J.A. Henderson, Jr. & A.D. Twerski, Drug Designs are 

Different, 111 Yale L.J. 151 (2001) .................................... 
26 

V. Henry, Problems with Pharmaceutical Regulations 
in the United States, 14 J. Leg. Med. 617 (1993) ........... 
21, 26 

W.F. Janssen, Outline of the History of U.S. Drug 

Regulation and Labeling, 36 Food, Drug & Cosm. L.J. 
420 (1981) ................................................................................. 

20 
A. Joyner, Local Pharmacies Invest in Compounding, 

Billings Gazette, Feb. 27, 2000 ............................................ 

34 

S.H. Kalman & J.F. Schlegel, Standards of Practice 
for the Profession of Pharmacy, NS19 No. 3 American 
Pharmacy (1979) .................................................................... 
25 

E. Kremers & G. Urdang, History of Pharmacy 
(2d ed. 1951) ............................................................................ 35 

X 

Miscellaneous—Continued: Page 

K.B. Leffler, Persuasion or Information? The 

Economics of Prescription Drug Advertising, 
24 L.J. & Econ. 45 (1981) .................................................... 
34, 35 

C.E. Myer, Needed: Serious Attention to Sterile Pro- 
ducts, 53 Amer. J. Health Sys. Pharm. 2582 (1996) ........ 
28 

National Institute for Health Care Management, 

Prescription Drugs and Mass Media Advertising, 
2000 (Nov. 2001) <http://www.nihcm.org/DTCbrief 
2001.pdf> ................................................................................. 34 

T. Nordenberg, Pharmacy Compounding: Customizing 

Prescription Drugs, 34 FDA Consumer No. 4 (2000) .... 
28 

K. Ranelli, Extending the Family, The Hartford 

Courant, Mar. 16, 2000 .......................................................... 

26 

S. Rep. No. 361, 74th Cong., 1st Sess. (1935) ....................... 
24 

S. Rep. No. 1744, 87th Cong., 2nd Sess. (1962): 

Pt. 1 ....................................................................... 

21, 22, 24, 37 

Pt. 2 .................................................................................... 
23, 37 

S. Rep. No. 43, 105th Cong., 1st Sess. (1997) ................. 
7, 30, 31 

B.H. Thiers, Compounding Is Still Appropriate in 

Clinical Practice, 16 Dermatologic Clinic No. 2 
(1998) ........................................................................................ 34 

C.M. Wyandt & J.S. Williamson, Compounding: Regu- 
latory and Management Issues, Drug Topics, July 
1999 ............................................................................... 25, 33, 35 

In the Supreme Court of the United States 

No. 01-344 

TOMMY G. THOMPSON, 
SECRETARY OF HEALTH AND HUMAN SERVICES, 
ET AL., PETITIONERS 

v. 

WESTERN STATES MEDICAL CENTER, ET AL. 

ON WRIT OF CERTIORARI 
TO THE UNITED STATES COURT OF APPEALS 
FOR THE NINTH CIRCUIT 

BRIEF FOR THE PETITIONERS 

OPINIONS BELOW 

The opinion of the court of appeals (Pet. App. 1a-15a) is 
reported at 238 F.3d 1090. The opinion of the district court 
(Pet. App. 16a-59a) is reported at 69 F. Supp. 2d 1288. The 
opinion of the district court granting respondents’ motion for 
a temporary restraining order (Pet. App. 60a-70a) is unre- 
ported. 

JURISDICTION 

The judgment of the court of appeals was entered on 
February 6, 2001. A petition for rehearing was denied on 
April 27, 2001 (Pet. App. 78a-79a). On July 15, 2001, Justice 
O’Connor extended the time within which to file a petition 

(1) 

2 

for a writ of certiorari to and including August 25, 2001. The 
petition was filed on August 24, 2001, and was granted on 
October 29, 2001. The jurisdiction of this Court rests on 28 
U.S.C. 1254(1). 

CONSTITUTIONAL AND STATUTORY 

PROVISIONS INVOLVED 

The First Amendment to the United States Constitution 
provides that “Congress shall make no law * * * abridging 
the freedom of speech.” The pertinent provisions of the 
Food and Drug Administration Modernization Act of 1997, 
21 U.S.C. 353a (Supp. V 1999), and the Federal Food, Drug, 
and Cosmetic Act, 21 U.S.C. 301 et seq., are reprinted in the 
appendix to the petition for a writ of certiorari. Pet. App. 
80a-107a. 

STATEMENT 

1. a. The Federal Food, Drug, and Cosmetic Act 
(FDCA), 21 U.S.C. 301 et seq., establishes a comprehensive 
scheme for the regulation of drug manufacturing, labeling, 
marketing, and distribution in order to protect the public 
health and safety. The FDCA defines a “new drug” as “[a]ny 
drug * * * not generally recognized * * * as safe and 
effective for use under the conditions prescribed.” 21 U.S.C. 
321(p)(1). The FDCA generally requires that, before a new 
drug may be introduced into interstate commerce, the manu- 
facturer or distributor must obtain the approval of the 
Secretary of Health and Human Services, acting through the 
Food and Drug Administration (FDA). See 21 U.S.C. 355(a), 
331(d). To obtain that approval, the manufacturer or distri- 
butor must demonstrate to the FDA’s satisfaction that the 
drug is both safe and effective for each intended use. See 21 
U.S.C. 355(b) (1994 & Supp. V 1999); Weinberger v. Hynson, 
Westcott & Dunning, Inc., 412 U.S. 609, 613 (1973). The pro- 
hibition on introducing new drugs that have not been 

3 

approved by the FDA applies to all new drugs except those 
for which Congress has created an exemption. See United 
States v. Rutherford, 442 U.S. 544, 551 (1979). 

The FDCA also imposes standards for the manufacturing 
and labeling of drugs to ensure that manufacturing processes 
and drug ingredients are safe and effective and that physi- 
cians and consumers have adequate information about drug 
contents, uses, and effects. See 21 U.S.C. 351, 352 (1994 & 
Supp. V 1999). The FDCA prohibits the sale and distri- 
bution of “adulterated” or “misbranded” drugs. See 21 
U.S.C. 331 (1994 & Supp. V 1999). 

In addition, to facilitate regulatory oversight, the FDCA 
imposes registration, inspection, and reporting requirements 
on drug manufacturers. See 21 U.S.C. 360 (1994 & Supp. V 
1999) (requiring drug manufacturers to register with the 
Secretary); 21 U.S.C. 360(h) (subjecting drug manufacturers 
to at least one government inspection every two years); 21 
U.S.C. 360(j) (1994 & Supp. V 1999) (requiring each regis- 
tered drug manufacturer to “file with the Secretary a list of 
all drugs” that it manufactures for commercial distribution). 

The FDCA contains a limited exemption from its registra- 
tion and some of its inspection requirements for pharmacies 
that comply with state regulations and dispense drugs “upon 
prescriptions of practitioners licensed to administer such 
drugs” and that do not “manufacture” or “compound” drugs 
other than in “the regular course of their business of dis- 
pensing or selling drugs * * * at retail.” 21 U.S.C. 
360(g)(1), 374(a)(2)(A). There is no general exemption for 
pharmacies, however, from the FDCA’s new drug approval, 
misbranding, and adulteration provisions. 21 U.S.C. 351, 352, 
355 (1994 & Supp. V 1999); Pet. App. 72a (1992 FDA Com- 
pliance Policy Guide). 

b. Compounding is a process by which a pharmacist 
“combines, mixes, or alters ingredients to create a certain 
medication for a patient.” Professionals & Patients for 

4 

Customized Care v. Shalala, 847 F. Supp. 1359, 1361 (S.D. 
Tex. 1994), aff’d, 56 F.3d 592 (5th Cir. 1995). The process 
encompasses a range of pharmacy activities, including the 
modification of approved drugs “to provide medications that 
are not commercially available, such as diluted dosages for 
children, or to alter the form of a medication for easier 
consumption.” Ibid. 

When a pharmacy compounds a drug, the pharmacy 
creates a “new drug” because the compounded product is not 
“generally recognized, among experts * * *, as safe and 
effective.” See 21 U.S.C. 321(p)(1). A drug that differs in 
any material way (including in composition, effect, or in- 
tended use) from an approved drug is a new drug that must 
independently be established to be safe and effective. See 
United States v. Generix Drug Corp., 460 U.S. 453, 460-461 
(1983) (determination whether a product is a new drug takes 
into account both active and inactive ingredients); 21 C.F.R. 
310.3(h) (discussing factors that make a drug a “new drug”). 
Even a drug that is identical to an approved product is a new 
drug that must be independently established as safe and 
effective if it is produced by a different manufacturer. See 
USV Pharm. Corp. v. Weinberger, 412 U.S. 655, 664 (1973) 
(“[Section 355] when applied to [a new drug application] is 
personal to the manufacturer who files it. Section [355], in 
other words, addresses itself to drugs as individual pro- 
ducts.”); Pharmanex v. Shalala, 221 F.3d 1151, 1157 (10th 
Cir. 2000) (the new drug approval process is manufacturer- 
specific). A newly created, customized compounded drug 
will not have been subjected to the controlled clinical trials 
that are necessary to establish its safety and effectiveness. 
See Hynson, Westcott & Dunning, 412 U.S. at 630; Wein- 
berger v. Bentex Pharm., Inc., 412 U.S. 645, 652 (1973). Al- 
though the prescribing physician presumably believes the 
compounded product is appropriate for the patient receiving 
the prescription, neither the impressions of practicing physi- 

5 

cians nor the fact that a number of physicians throughout the 
country prescribe a compounded product is sufficient to 
establish that it is generally recognized as safe and effective. 
See Hynson, Westcott & Dunning, 412 U.S. at 630; United 
States v. Sene X Eleemosynary Corp., 479 F. Supp. 970, 977 
(S.D. Fla. 1979), aff ’d, [1982-1983 Transfer Binder] Food 
Drug Cosm. L. Rep. (CCH) ¶ 38,207 (11th Cir. Jan. 12, 1983). 

For those reasons, prior to the enactment of the Food and 
Drug Administration Modernization Act of 1997 (FDAMA), 
Pub. L. No. 105-115, 111 Stat. 2296, several courts of appeals 
had confirmed that compounded drugs are “new drugs” 
subject to the FDCA’s premarket approval requirements. 
See Professionals & Patients, 56 F.3d at 593 n.3; United 
States v. Algon Chem. Inc., 879 F.2d 1154, 1158 (3d Cir. 
1989); United States v. 9/1 Kg. Containers, 854 F.2d 173, 179 
(7th Cir. 1988); see also United States v. Baxter Healthcare 
Corp., 901 F.2d 1401, 1410-1411 (7th Cir. 1990) (reconstitu- 
tion and freezing of already approved drug creates new 
drug). Introduction of compounded drugs into interstate 
commerce without the approval of the FDA was thus illegal 
before enactment of FDAMA, see Professionals & Patients, 
56 F.3d at 593 n.3; Pet. App. 72a, and it remains illegal today 
unless the requirements in Section 353a are satisfied. 

The FDA nevertheless recognized that compounding can 
serve an important public purpose for which the health 
benefits outweigh the risks if the compounding is performed 
in response to a valid prescription in order to meet the 
medical needs of an individual patient for whom com- 
mercially available drugs are inadequate. See Pet. App. 71a. 
Therefore, “the FDA as a matter of policy [did] not histori- 
cally [bring] enforcement actions against pharmacies en- 
gaged in traditional compounding.” Professionals & Pa- 
tients, 56 F.3d at 593 n.3. 

6 

The FDA did take action, however, when compounding 
was outside the scope of normal pharmacy practice and com- 
pounded drugs were mass-produced and distributed in a 
manner tantamount to the manufacture of unapproved new 
drugs. See Pet. App. 73a-74a. The FDA issued warning 
letters, see id. at 73a, and sometimes brought judicial en- 
forcement actions against pharmacies that engaged in drug 
manufacturing under the guise of compounding. E.g., Sene 
X, 479 F. Supp. at 978; Cedars N. Towers Pharm., Inc. v. 
United States, [1978-1979 Transfer Binder] Food Drug 
Cosm. L. Rep. (CCH) ¶ 38,200, at 38,828 (S.D. Fla. Aug. 28, 
1978). 

Among the factors that the FDA considered in deter- 
mining whether a pharmacy was engaged in conduct tanta- 
mount to manufacturing drugs rather than in traditional 
compounding were whether the pharmacy was “[s]oliciting 
business (e.g., promoting, advertising, or using sales per- 
sons) to compound specific drug products, product classes, or 
therapeutic classes of drug products.” Pet. App. 76a. Other 
considerations included the extent to which the pharmacy 
was compounding drug products that were essentially copies 
of a commercially available drug product, was compounding 
drugs in advance of receiving valid prescriptions, or was 
distributing compounded products out of State. Id. at 76a- 
77a. 

2. Congress addressed the compounding issue when it 
enacted FDAMA in 1997. The section of FDAMA at issue in 
this case, now codified at 21 U.S.C. 353a (Supp. V 1999), was 
intended to “bring the legal status of compounding in line 
with FDA’s longstanding enforcement policy of regulating 
only drug manufacturing, not ordinary pharmacy compound- 
ing.” 143 Cong. Rec. S9839 (daily ed. Sept. 24, 1997) (state- 
ment of Sen. Kennedy). Section 353a seeks to “ensure con- 
tinued availability of compounded drug products as a com- 
ponent of individualized therapy, while limiting the scope of 

7 

compounding so as to prevent manufacturing under the 
guise of compounding.” H.R. Conf. Rep. No. 399, 105th 
Cong., 1st Sess. 94 (1997); accord S. Rep. No. 43, 105th Cong., 
1st Sess. 67 (1997). Rather than leaving to the enforcement 
discretion of the FDA the determination of when com- 
pounding should be permitted, Congress chose to delineate 
in the FDCA itself the limited circumstances under which 
pharmacy compounding would be exempt as a matter of law 
from certain requirements that apply to drug manufacturers. 
Thus, if specified conditions are met, Section 353a exempts 
compounded drug products from the FDCA’s provisions 
governing new drug approval, good manufacturing practice, 
and adequate directions for use. Under those conditions, 
which echo the FDA’s pre-1997 approach to compounding, 
(1) the compounding must be performed by a licensed phar- 
macist or physician based on a valid prescription made by a 
licensed practitioner, see 21 U.S.C. 353a(a)(1) (Supp. V 1999); 
(2) the compounding must use only ingredients that comply 
with various quality-control standards, see 21 U.S.C. 
353a(b)(1)(A) and (B) (Supp. V 1999); (3) the compounded 
product may not be a drug product identified by regulation 
as presenting difficulties for compounding that would 
adversely affect safety or efficacy, see 21 U.S.C. 353a(b)(3)(A) 
(Supp. V 1999); (4) the compounding may not produce a drug 
that has been withdrawn from the market for safety reasons, 
see 21 U.S.C. 353a(b)(1)(C) (Supp. V 1999); and (5) the phar- 
macist may not compound regularly or in inordinate amounts 
(as defined by the Secretary) any drug products that are 
essentially copies of a commercially available drug product, 
see 21 U.S.C. 353a(b)(1)(D), 353a(b)(2) (Supp. V 1999). 
FDAMA also limits the total volume of compounded drug 
products that a pharmacy may distribute out of State. See 
21 U.S.C. 353a(b)(3)(B) (Supp. V 1999). 

In addition, FDAMA makes the exemption of compounded 
drugs from the specified FDCA requirements contingent 

8 

upon the pharmacy’s compliance with limitations on adver- 
tising and promotion of compounded drug products. Section 
353a(a) exempts pharmacy compounding from the new drug 
approval and other requirements only if the compounded 
drug is produced “based on the unsolicited receipt of a valid 
prescription order or a notation, approved by the prescribing 
practitioner, on the prescription order that a compounded 
product is necessary for the identified patient.” 21 U.S.C. 
353a(a) (Supp. V 1999). Section 353a(c) further provides that 
a pharmacy is entitled to the exemption only if it “does not 
advertise or promote the compounding of any particular 
drug, class of drug, or type of drug.” 21 U.S.C. 353a(c) 
(Supp. V 1999). The advertising limitation does not, how- 
ever, prevent the pharmacy from advertising that it per- 
forms compounding services generally. 21 U.S.C. 353a(c) 
(Supp. V 1999). 

3. In November 1998, shortly before the relevant pro- 
visions of FDAMA took effect, respondent pharmacies, 
which regularly compound drugs in significant quantities, 
commenced this suit in the United States District Court for 
the District of Nevada against the Secretary of Health and 
Human Services and the Commissioner of the FDA. Re- 
spondents sought a declaratory judgment that Sections 
353a(a) and (c) violate the First Amendment and an order 
enjoining enforcement of those provisions against them. 

The district court initially granted respondents a tempo- 
rary restraining order that enjoined the government from 
enforcing Section 353a(c). Pet. App. 60a-70a. The parties 
subsequently filed cross-motions for summary judgment. 
The district court, concluding that Sections 353a(a) and (c) 
violate the First Amendment, granted respondents’ motion, 
denied the government’s motion, and permanently enjoined 
the FDA from enforcing the solicitation and advertising 
restrictions in Sections 353a(a) and (c). Pet. App. 16a-57a. 

9 

The court further held that the restrictions were severable 
from the remainder of Section 353a. Id. at 57a-59a. 

4. The United States Court of Appeals for the Ninth 
Circuit affirmed in part and reversed in part. Pet. App. 1a- 
15a. 

a. Applying the four-part test enunciated in Central 
Hudson Gas & Electric Corp. v. Public Service Commission, 
447 U.S. 557 (1980), for determining the constitutionality of 
regulation of commercial speech, the court of appeals af- 
firmed the district court’s holding that Sections 353a(a) and 
(c) violate the First Amendment. Pet. App. 4a-12a. 

Because the government did not contest that the advertis- 
ing and solicitation limitations in Section 353a apply to 
lawful, non-misleading speech, the court of appeals began its 
analysis with the second element in the Central Hudson 
analysis—whether the governmental interests that underlie 
Section 353a’s solicitation and advertising conditions are sub- 
stantial. Pet. App. 5a. The court recognized that the 
government has substantial interests in “protecting the 
public health and safety” and “preserving the integrity of the 
drug approval process.” Pet. App. 5a. The court also recog- 
nized that “[t]he government’s effort to balance competing 
goals can be a substantial interest.” Id. at 6a. The court con- 
cluded, however, that the government had not demonstrated 
that “its interest in striking a balance between ensuring 
compounding availability and limiting widespread com- 
pounding is substantial.” Id. at 7a. The court reached that 
conclusion because, in its view, “[t]here is insufficient evi- 
dence in the record to conclude that the government has a 
substantial interest in preventing widespread compound- 
ing.” Ibid. 

Turning to the third step in the Central Hudson analysis, 
the court held that the solicitation and advertising limita- 
tions in Section 353a do not directly advance either of the 
asserted interests that the court did find to be substantial 

10 

—protecting the public health and safety and preserving the 
integrity of the new drug approval process. Pet. App. 7a- 
10a. The court reasoned that the government “has not 
offered evidence or arguments to explain sufficiently why 
such restrictions will reduce the type of consumption of com- 
pounded drugs that is harmful, and even admits that it has a 
substantial interest in ensuring the availability of com- 
pounded drugs.” Id. at 7a-8a. The court also concluded that, 
“[w]ithout the advertising restrictions, other safeguards exist 
to protect the public.” Id. at 8a (citing 21 U.S.C. 353a(a) 
(requiring valid prescription for compounded drug products), 
353a(b)(1) (limiting substances that pharmacists may use in 
compounded products), and 353a(b)(1)(D) (Supp. V 1999) 
(preventing pharmacists from regularly compounding drugs 
that are essentially copies of commercially available pro- 
ducts)). 

In addition, relying on Rubin v. Coors Brewing Co., 514 
U.S. 476 (1995), and Greater New Orleans Broadcasting 
Ass’n v. United States, 527 U.S. 173 (1999), the court con- 
cluded that Section 353a “is so riddled with exceptions that it 
is unlikely that the speech restrictions would actually 
succeed in depressing the volume of compounded drugs.” 
Pet. App. 9a. The court observed that “pharmacists can 
advertise their compounding services and promote their 
skills at medical trade events so long as they do not promote 
the compounding of any particular drug,” and that a phar- 
macist may call a physician and recommend a compounded 
drug if a patient comes in with a prescription for a com- 
mercial drug and provides information to the pharmacist 
that indicates that the patient might require a compounded 
product. Ibid. In addition, the court stated that FDAMA 
permits compounded drugs to constitute 5% of the total 
interstate distributions and 100% of the total intrastate dis- 
tributions by a particular pharmacy. Ibid. (citing 21 U.S.C. 
353a(b)(3) (Supp. V 1999)). 

11 

The court next addressed the fourth Central Hudson 
factor and concluded that the advertising and solicitation 
restrictions “are more extensive than necessary to achieve 
the asserted government interest.” Pet. App. 10a. The 
court suggested that, instead of limiting advertising, the 
FDA could require disclaimers stating that the compounded 
drugs being advertised had not been subjected to the FDA’s 
approval process. Ibid. The court also offered the alterna- 
tive of requiring all compounded drugs, including those 
created on an individual basis as part of the traditional prac- 
tice of pharmacy, to undergo the safety and effectiveness 
testing required for new drugs under the FDCA. Ibid. The 
court rejected the government’s argument that those al- 
ternatives would not address the government’s interest in 
drawing a workable distinction between traditional, patient- 
based compounding and the manufacturing of new drugs, 
because the court had already determined that the govern- 
ment’s interest in balancing those competing goals is not 
substantial. Id. at 11a. 

b. Although the court of appeals affirmed the district 
court’s judgment insofar as it held that the solicitation and 
advertising conditions in Section 353a violate the First 
Amendment, the court, accepting the government’s sub- 
mission, reversed the district court’s decision to sever those 
provisions from the rest of Section 353a. Pet. App. 12a-15a. 
The court reasoned that “Congress intended to provide ac- 
cess to compounded drugs while preventing pharmacies from 
making an end run around the FDA’s drug manufacturing 
requirements.” Id. at 12a. Because “Congress meant to 
exempt compounding pharmacists from FDCA requirements 
only in return for a prohibition on the promotion of specific 
compounded drugs,” the court concluded that the solicitation 
and advertising restrictions could not be severed from the 
rest of Section 353a. Id. at 13a-14a. Accordingly, the court 
invalidated Section 353a in its entirety. Id. at 15a. 

12 

SUMMARY OF ARGUMENT 

A. Section 353a attempts to achieve two important but 
competing goals. It seeks to preserve the integrity of the 
FDCA’s new drug approval process, which protects the 
public health by ensuring that new drugs are not widely 
distributed in interstate commerce unless they are first 
proven safe and effective. It also seeks to preserve the 
availability of compounded drugs for those individual pa- 
tients who, for particularized medical reasons, cannot use 
commercial products that have been approved by the FDA. 

Based on its long experience with the regulation of drugs, 
Congress concluded that proof of the safety and effective- 
ness of a new drug must be established by rigorous, scientifi- 
cally valid studies rather than the impressions of individual 
doctors, who cannot by themselves compile and master the 
necessary information. Historical experience also convinced 
Congress that a premarket approval requirement is neces- 
sary to ensure that those who promote and distribute new 
drugs, and realize profits from their distribution, undertake 
the investigations necessary to establish safety and effec- 
tiveness. 

At the same time, Congress recognized that it is also 
important to ensure that safe and effective drug treatments 
are in fact available, and that goal is also reflected in the 
FDCA. Consistent with that goal, the FDA historically 
refrained from enforcing the new drug approval require- 
ments against pharmacies that compounded drugs in re- 
sponse to valid prescriptions to meet the medical needs of 
individual patients. That policy recognized that com- 
pounding in response to individual medical needs is a tradi- 
tional element of the practice of pharmacy that may have 
important health benefits, but pharmacies often will be un- 
able to bear the burden and expense necessary to demon- 
strate to the FDA the safety and effectiveness of the com- 

13 

pounded drugs before they are sold because of the limited 
market for them. 

Experience showed, however, that some compounding 
was being conducted in a manner that threatened the safe- 
guarding function of the new drug approval process. Some 
pharmacies were compounding outside the scope of normal 
pharmacy practice and mass-producing and distributing 
compounded drugs in a manner tantamount to the manu- 
facture of new drugs. Compounding on that scale exposed 
significant numbers of people to the health and safety risks 
that had prompted enactment of the new drug approval 
requirements in the first place. Moreover, such com- 
pounding threatened the integrity and efficacy of the new 
drug approval process by making it less likely that manu- 
facturers would have the requisite incentive to demonstrate 
that their new drugs are safe and effective for their intended 
uses. Pharmacies could mass-produce a particular drug pro- 
duct, stimulate demand for the product through soliciting 
and advertising, and thereby effectively manufacture and 
introduce the drug into interstate commerce without com- 
plying with the approval requirements. That practice would 
significantly reduce the incentives of manufacturers to bear 
the cost of establishing that the drugs they seek to market 
are safe and effective, because a manufacturer could obtain a 
pharmacy license and establish a pharmacy entity to mass- 
produce drugs through compounding and thus circumvent 
the premarket approval requirements. Before enactment of 
Section 353a, the FDA therefore took enforcement actions 
against pharmacies that were manufacturing under the guise 
of compounding. 

When Congress enacted Section 353a, it sought to achieve 
essentially the same balance of interests that the FDA had 
pursued through its enforcement policy—ensuring the con- 
tinued availability of compounding to address the particular- 
ized needs of individual patients in cases in which it would be 

14 

impractical to require a demonstration to the FDA of safety 
and effectiveness, while limiting the scope of compounding to 
prevent unregulated manufacturing that would threaten the 
integrity of the premarket approval process and undermine 
the FDCA regulatory scheme. Congress’s effort to balance 
those two independently compelling but competing interests 
is itself a substantial governmental interest. 

B. Section 353a directly and materially advances that 
substantial interest. Under certain conditions, Section 353a 
exempts compounded products from the FDCA’s provisions 
governing new drug approval, good manufacturing practice, 
and adequate directions for use. The conditions at issue here 
are the limitations on the solicitation of prescriptions for and 
advertising of particular compounded drugs. Although those 
conditions restrict promotion of particular drugs, they do not 
restrict promotion of the compounding service in any other 
way. The specific solicitation and advertising conditions ad- 
vance the government’s interest because promotion of 
particular drugs reasonably distinguishes drug manufactur- 
ing that should be subject to the premarket approval process 
from compounding in response to individual medical needs. 

Traditional compounding involves the provision of a ser- 
vice in response to a physician’s prescription and an indi- 
vidual patient’s particular medical needs. Advertising the 
specific products created in the provision of that service (as 
opposed to advertising the compounding service itself) is not 
necessary to or characteristic of traditional compounding by 
a pharmacy. Drug manufacturing, in contrast, is the mass 
production of a homogenized product, typically for a sub- 
stantial market, and advertising of particular drugs is typi- 
cally a critical component of a successful manufacturing busi- 
ness. Restricting the compounding exemption to com- 
pounded products that are not subject to promotional activi- 
ties characteristic of manufacturing ensures that the exemp- 

15 

tion does not create a loophole that would undermine the 
new drug approval process. 

Limiting the exemption from the regulatory approval 
process to compounded drugs that are not advertised also 
reflects Congress’s judgment in enacting the FDCA that the 
public health is best served when those who develop, distri- 
bute, and promote new drugs prove that those drugs are safe 
and effective. By preventing circumvention of the new drug 
approval requirements, the promotion limitations preserve 
the incentives for drug manufacturers to undertake the 
studies necessary to demonstrate that new drugs are safe 
and effective. 

Conditioning the exemption from the drug approval 
requirements on whether a compounder promotes particular 
drugs is also consistent with the role that advertising and 
other promotional material have long played in determining 
the scope of regulation under the FDCA. For example, 
promotional activity has been an important consideration by 
the FDA in determining both whether a particular product is 
a drug subject to regulation under the FDCA and whether a 
new drug or a supplemental new drug application is required 
for a particular drug product. 

The court of appeals therefore erred in concluding that the 
advertising and solicitation conditions on the availability of 
the exemption under Section 353a do not advance the gov- 
ernment’s interests. The other conditions on the availability 
of the exemption do not, as the court believed, provide 
adequate safeguards to protect the public. Nor do other pro- 
visions in Section 353a undermine the effectiveness of the 
advertising and solicitation limitations. Indeed, those pro- 
visions serve different purposes and ensure that the limita- 
tions are appropriately tailored to the government’s in- 
terests. 

C. The advertising and solicitation conditions on the 
availability of the exemption under Section 353a are care- 

16 

fully crafted so as to be no more extensive than necessary to 
advance the government’s goals. They do not impose a 
prohibition on speech: a pharmacy that wishes to mass-pro- 
duce a particular drug product and promote that product by 
advertising or by soliciting prescriptions can do so by com- 
plying with the premarket approval requirements that apply 
to other drug manufacturers. 

The conditions on the availability of the exemption are 
also tailored to accommodate commercial speech attendant 
to compounding within the traditional practice of pharmacy. 
Section 353a(c) permits a pharmacy to advertise and pro- 
mote its general compounding services. That kind of ad- 
vertising promotes the availability of compounding in re- 
sponse to individual medical needs and does not threaten the 
integrity of the new drug approval process. Section 353a(a) 
permits compounding in limited quantities in anticipation of 
a valid prescription when that compounding is based on an 
established relationship among the pharmacist, the practi- 
tioner and the patient. It also permits a pharmacist to call a 
physician and recommend a compounded drug if a patient 
seeks to fill a prescription for a commercial drug and pro- 
vides information that leads the pharmacist to conclude that 
a compounded product is required. Both of those practices 
are consistent with traditional compounding by a pharmacy 
in response to particularized medical needs and do not 
compromise the new drug approval requirements. 

Finally, the alternatives to the advertising and solicitation 
limitations suggested by the court of appeals would not ad- 
vance, but would undermine, the government’s interests. 
Permitting promotion of compounded drugs provided they 
include disclaimers indicating that they have not been sub- 
ject to premarket approval by the FDA would undermine 
the premarket approval process and would be fundamentally 
inconsistent with the protective framework of the FDCA. 
The other alternative offered by the court of appeals— 

17 

requiring premarket approval for all compounded drugs, 
even those customized to meet the medical needs of specific 
patients—would eliminate the availability of those products 
because demand for them is not sufficient to support the 
costs of the premarket approval process. 

ARGUMENT 

FDAMA’S LIMITED EXEMPTION FROM THE NEW 
DRUG APPROVAL REQUIREMENTS FOR DRUGS 
COMPOUNDED BY PHARMACISTS WHO DO NOT 
SOLICIT PRESCRIPTIONS FOR OR ADVERTISE 
PARTICULAR COMPOUNDED DRUGS IS CON- 
SISTENT WITH THE FIRST AMENDMENT 

Since 1938, the Federal Food, Drug, and Cosmetic Act 
(FDCA), 21 U.S.C. 301 et seq., has prohibited the introduc- 
tion into interstate commerce of a new drug without prior 
approval of the Food and Drug Administration (FDA). 21 
U.S.C. 355(a). In the Food and Drug Administration 
Modernization Act of 1997 (FDAMA), Congress provided a 
limited exemption from the new drug approval and certain 
related requirements of the FDCA for drugs compounded by 
pharmacists. See 21 U.S.C. 353a (Supp. V 1999). In this 
case, the United States Court of Appeals for the Ninth 
Circuit held that the solicitation and advertising limitations 
that Congress adopted as conditions on the availability of 
that exemption violate the First Amendment. Contrary to 
the Ninth Circuit’s conclusion, the limitations on the exemp- 
tion provided by Section 353a are fully consistent with the 
First Amendment.1 

1 The government agrees with the court of appeals’ conclusion (Pet. 
App. 12a-15a) that, if the solicitation and advertising provisions in 
Sections 353a(a) and (c) are unconstitutional, they are not severable from 
the remainder of Section 353a. For that reason, the government did not 
seek this Court’s review of the severability issue. Respondents did not 
raise the issue in their brief in opposition, and they did not file a cross- 

18 

In Central Hudson Gas & Electric Corp. v. Public Service 
Commission, 447 U.S. 557 (1980), this Court enunciated a 
four-part inquiry to determine the constitutionality under 
the First Amendment of government regulation of com- 
mercial speech: first, whether the speech “accurately in- 
form[s] the public about lawful [commercial] activity,” id. at 
563; second, “whether the asserted governmental interest 
[underlying the speech regulation] is substantial,” id. at 566; 
third, “whether the regulation directly advances the govern- 
mental interest asserted,” ibid.; and, finally, “whether it is 
not more extensive than is necessary to serve that interest” 
(ibid.). 

With respect to the first part of the Central Hudson 
inquiry, the government assumes that respondents’ ad- 
vertisements would be accurate and concern an activity that 
is otherwise lawful under the carefully circumscribed exemp- 
tion that Congress has established for compounding. It is 
important, however, to stress that this case, unlike most 
commercial speech cases, does not involve a restriction on 
advertising that has been imposed in connection with an 
activity that the government otherwise has declined to 
prohibit. Before 1997, the introduction of compounded new 
drugs into interstate commerce—like the introduction of all 
other unapproved new drugs—was unlawful in all circum- 
stances. In enacting Section 353a, Congress created an 
exemption to that generally applicable prohibition on the 
distribution of new drugs, but conditioned that exemption on 
compliance with a number of requirements, including restric- 
tions on solicitation and advertising. As the court of appeals 
explained, Congress “intended to provide access to com- 
pounded drugs while preventing pharmacies from making an 

petition for a writ of certiorari on the issue. The severability question is 
therefore not before the Court. See, e.g., Bates v. United States, 522 U.S. 
23, 32 n.7 (1997). 

19 

end run around the FDA’s drug manufacturing require- 
ments.” Pet. App. 12a. Congress therefore “meant to 
exempt compounding pharmacists from FDCA requirements 
only in return for a prohibition on the promotion of specific 
compounded drugs.” Id. at 13a-14a. That is to say, but for 
the advertising restrictions in Section 353a, the relevant 
commercial conduct—the sale of new drugs that have not 
been shown to be safe and effective—would be (and is) pro- 
hibited. 

Accordingly, this case is not one in which the government 
generally permits certain conduct and asserts a hypothetical 
(but uninvoked) “greater power” to prohibit the advertised 
conduct as a justification for exercising the “lesser power” of 
restricting the advertising of that conduct. See 44 Liquor- 
mart, Inc. v. Rhode Island, 517 U.S. 484, 510-513 (1996) 
(plurality opinion). Instead, Congress has exercised the 
“greater power” to prohibit the distribution of unapproved 
new drugs, and has permitted an exception to that pro- 
hibition only on compliance with various conditions, includ- 
ing restrictions on the solicitation and advertising of that 
otherwise unlawful commercial activity. The question, then, 
is whether Congress’s inclusion of limitations on solicitation 
and advertising among the conditions on the availability of 
the exemption from certain of the FDCA’s requirements 
satisfies the remaining three Central Hudson factors. 

A. Substantial Governmental Interests Underlie Section 

353a 

In enacting Section 353a, Congress attempted to balance 
two goals, each of which is substantial. First, Congress 
sought to preserve the effectiveness and integrity of the 
FDCA’s new drug approval process and the protection of the 
public health that it provides. Second, Congress sought to 
preserve the availability of compounded drugs for those in- 
dividual patients who, for particularized medical reasons, 

20 

cannot use commercially available products that have been 
approved by the FDA. Achieving the proper balance be- 
tween those two independently compelling but competing 
interests is itself a substantial governmental interest. 

1. There is a substantial governmental interest in pro- 
tecting the integrity of the FDCA’s new drug approval 

process 

As both Congress and this Court have recognized, the 
widespread distribution of drugs that have not been shown 
to be safe and effective poses significant health risks. See 
United States v. Rutherford, 442 U.S. 544, 556-557 (1979); 
Weinberger v. Hynson, Westcott & Dunning, Inc., 412 U.S. 
609, 622 (1973). The FDCA’s new drug approval process is 
the culmination of a century of congressional efforts to ad- 
vance the substantial interest in preventing those risks. 

In the 19th century, the United States, which lacked laws 
and regulations of the sort that were in place in European 
countries, was plagued by substandard and contaminated 
drugs. Injuries from such drugs, such as a contaminated 
diphtheria vaccine that caused the death of a dozen children 
in 1902, eventually led to enactment of the Pure Food and 
Drugs Act of 1906, ch. 3915, 34 Stat. 768, which prohibited 
interstate shipment of adulterated or misbranded drugs. 
See W.F. Janssen, Outline of the History of U.S. Drug Regu- 
lation and Labeling, 36 Food, Drug & Cosm. L.J. 420, 422- 
425 (1981). 

The 1906 Act, however, proved insufficient to ensure that 
marketed drugs were safe for use. Perhaps the most 
notorious example of that insufficiency was the Elixir 
Sulfanilamide tragedy of 1937. A company that had mar- 
keted sulfanilamide in capsule and tablet form began mar- 
keting the drug in a liquid form without adequately testing 
the safety of the liquid in which the sulfanilamide was 
dissolved. Before the drug could be recalled, 107 people, 

21 

mostly children, died from using the product. See Elixir 
Sulfanilamide, S. Doc. 124, 75th Cong., 2d Sess. (1937); V. 
Henry, Problems with Pharmaceutical Regulation in the 
United States, 14 J. Leg. Med. 617, 619 (1993). 

Congress enacted the FDCA in 1938 based on the histori- 
cal experience demonstrating that manufacturer self-inter- 
est and physician screening were insufficient to protect the 
public from the dangers of widespread distribution of unsafe 
drugs. See Act of June 25, 1938, ch. 675, 52 Stat. 1040. At 
the heart of the new law was the new drug approval 
requirement—that the manufacturer or distributor of a new 
drug must obtain approval from the FDA before introducing 
the new drug into interstate commerce. § 505(a), 52 Stat. 
1052 (now codified as amended at 21 U.S.C. 355(a)). 

Further experience revealed, however, that the pre- 
approval requirements in the 1938 Act were still not suffi- 
cient to protect the public health and safety. One problem 
was that the Act required proof only that a new drug was 
safe for its intended uses and not that it was effective for 
those uses. As a result, the FDA was forced to approve 
many drugs for general distribution even when there was no 
evidence that they would produce the therapeutic benefits 
claimed by their manufacturers. See S. Rep. No. 1744, 87th 
Cong., 2d Sess. Pt. 1, at 15-16 (1962); Drug Industry Anti- 
trust Act: Hearings on S. 1552 Before the Subcomm. on 
Antitrust and Monopoly of the Senate Comm. on the Judi- 
ciary, 87th Cong., 1st Sess. Pt. 5, at 2583-2585 (1961) (testi- 
mony of Abraham Ribicoff, Secretary of Health, Education, 
and Welfare). 

Because hundreds of new drugs were introduced each 
year, and information about their effectiveness took con- 
siderable time to develop and (when published at all) was 
scattered among hundreds of medical journals, physicians 
were unable to ascertain whether the drugs they were 
prescribing were effective. See S. Rep. No. 1744, supra, Pt. 

22 

1, at 37 (views of Sens. Kefauver, Carroll, Dodd, Hart, and 
Long); Administered Prices, Drugs, S. Rep. No. 448, 87th 
Cong., 1st Sess. 171 (1961); 108 Cong. Rec. 19,925-19,926 
(1962); Warner-Lambert Co. v. Heckler, 787 F.2d 147, 156 (3d 
Cir. 1986). Prescription of ineffective drugs could have seri- 
ous harmful consequences because, when an ineffective drug 
was prescribed, it usually replaced an older but effective 
drug. See S. Rep. No. 1744, supra, Pt. 1, at 37; see also 
Rutherford, 442 U.S. at 556-557 & n.13 (discussing danger 
that patients who use ineffective drugs will, as a conse- 
quence, delay or forgo use of effective drugs or other 
treatment). 

Another problem with the 1938 Act was that a new drug 
application became effective automatically after 180 days if 
the FDA took no action. See S. Rep. No. 1744, supra, Pt. 1, 
at 40. Because of the automatic approval provision and the 
lack of independent and objective clinical studies to guide 
FDA physicians in evaluating new drugs, many drugs were 
released for distribution that were subsequently revealed to 
have serious (and sometimes deadly) side effects. See id. at 

43. The possible dangers of automatic approval were graphi- 
cally illustrated by the thalidomide experience, in which 
reports of serious birth defects caused by the use of thalido- 
mide in Europe surfaced shortly before the automatic 
approval requirement might have forced the FDA to permit 
widespread distribution of the drug in the United States. 
See id. at 40-43. 

The Drug Amendments of 1962, Pub. L. No. 87-781, 76 
Stat. 780, addressed those problems by strengthening the 
new drug approval process. The amendments eliminated the 
automatic approval provision and required manufacturers 
and distributors to demonstrate not only the safety but also 
the effectiveness of new drugs. Under the amended pro- 
visions, a new drug may not be introduced (or delivered for 
introduction) into interstate commerce until the manu- 

23 

facturer or distributor obtains the FDA’s affirmative ap- 
proval by establishing that the drug is safe and effective for 
each of its intended uses. See 21 U.S.C. 321(p), 331(d), 
355(a)-(d); S. Rep. No. 1744, 87th Cong., 2d Sess. Pt. 2, at 4-5 
(1962); 108 Cong. Rec. 17,366 (1962) (statement of Sen. East- 
land). 

The new drug approval requirements in effect today thus 
reflect two related and reasonable conclusions that Congress 
and the FDA drew from long experience with drug regu- 
lation. First, proof of the safety and effectiveness of a new 
drug must be established by rigorous, scientifically valid 
clinical studies rather than the impressions of individual 
doctors, who cannot by themselves compile and master the 
necessary information; and, second, a premarket approval 
requirement is necessary to ensure that those who promote 
and distribute new drugs, and seek to realize profits from 
their distribution, undertake the investigations necessary to 
establish effectiveness and safety. See Hynson, Westcott & 
Dunning, 412 U.S. at 619, 629-630; Warner-Lambert Co., 787 
F.2d at 156. For these reasons, the new drug approval 
process is a critical component of the FDCA’s regulatory 
framework for the protection of the public health and safety. 
As the district court and court of appeals both concluded 
(Pet. App. 5a-6a, 40a-41a), there is a substantial govern- 
mental interest in preserving the integrity of that process. 

2. There is a substantial governmental interest in en- 
suring the availability of compounding in response to 

individual medical needs 

At the same time that Congress sought, through the new 
drug approval process, to protect the public from unsafe and 
ineffective drugs, Congress recognized that it is also impor- 
tant to ensure that drug treatments that are safe and 
effective are in fact available. Congress therefore carefully 
crafted the new drug approval process “to insure that 

24 

governmental control does not become so rigid that the flow 
of new drugs to the market, and the incentive to undergo the 
expense involved in preparing them for the market, become 
stifled.” S. Rep. No. 1744, supra, Pt. 1, at 14-15; see id. at 16; 
H.R. Rep. No. 2139, 75th Cong., 3d Sess. 823 (1938); Hynson, 
Westcott & Dunning, 412 U.S. at 639 n.2 (Powell, J., con- 
curring) (noting the public interest “in protecting the drugs 
that are useful in the prevention, control, or treatment of 
illness”). 

Congress also has generally refrained from providing in 
the FDCA for the FDA to limit a physician, as part of the 
practice of medicine, from prescribing any legally available 
product for a particular patient. See 37 Fed. Reg. 16,503 
(1972) (noting repeated references in the legislative history 
of the 1938 Act and the 1962 amendments that Congress did 
not intend the FDA to interfere with a physician’s ability to 
prescribe legally approved products for unapproved uses); 

e.g., S. Rep. No. 361, 74th Cong., 1st Sess. 3 (1935); H.R. Rep. 
No. 2755, 74th Cong., 2d Sess. 5 (1936); S. Rep. No. 1744, 
supra, Pt. 1, at 56 (views of Sens. Dirksen and Hruska). Con- 
sistent with that background, the FDA has permitted physi- 
cians to prescribe approved drugs for uses that are not 
identified in approved labeling. See 12 FDA Drug Bull. 4, 
4-5 (1982); J.M. Beck & E.D. Azari, FDA, Off-Label Use, and 
Informed Consent: Debunking Myths and Misconceptions, 
53 Food, Drug, & Cosm. L.J. 71, 76-79 (1998). That policy 
reflects the FDA’s recognition that certain off-label uses 
perform an important therapeutic role in certain areas of 
medical practice, and that undue restrictions on such uses 
could have adverse health consequences. See id., at 79-80; cf. 
Buckman Co. v. Plaintiffs’ Legal Comm., 121 S. Ct. 1012, 
1018-1019 & n.5 (2001) (discussing off-label uses prescribed 
or administered by physicians in the context of the FDCA’s 
device provisions). The FDA has followed that policy even 
though manufacturers and distributors may not distribute 

25 

approved products for off-label uses—and therefore may not 
promote off-label uses—without first demonstrating to the 
FDA that the products are safe and effective for those uses 
and obtaining FDA approval. 12 FDA Drug Bulletin at 4-5. 

Similar considerations led the FDA to refrain from taking 
enforcement action against pharmacists who compounded 
drugs in response to valid prescriptions to meet the medical 
needs of individual patients, as determined by their physi- 
cians, even though introduction of compounded drugs into 
interstate commerce without FDA approval was illegal 
before enactment of Section 353a in 1977. See pp. 4-5, supra. 
The FDA recognized that compounding in response to a 
valid prescription to meet individual medical needs is a 
traditional element of the practice of pharmacy. Pet. App. 
71a; see L.V. Allen, Jr., The Art, Science, and Technology of 
Pharmaceutical Compounding xvi, 1 (1998); C.M. Wyandt & 
J.S. Williamson, Compounding: Regulatory and Manage- 
ment Issues, Drug Topics, July 1999, at 43.2 

Like certain off-label uses, compounding in response to 
individual medical needs may have important health bene- 
fits. It allows physicians and pharmacists to work together 
to develop customized therapies for patients for whom com- 
mercially manufactured drugs are not suitable for various 
medical reasons. For example, when a patient has an allergy 

2 See also Virginia State Bd. of Pharm. v. Virginia Citizens Con- 
sumer Council, Inc., 425 U.S. 748, 752, 766 (1976) (noting that, in the mid- 
1970s, approximately 5% of prescriptions were compounded by phar- 
macists); S.H. Kalman & J.F. Schlegel, Standards of Practice for the 
Profession of Pharmacy, NS19 No. 3 American Pharmacy 29 (1979) 
(discussing pharmacists’ compounding responsibilities); Complaint ¶ 20 
reprinted in C.A. Excerpts of Record (hereinafter C.A. E.R.) 5 (“Phar- 
macy compounding is a time-honored, customary and traditional part of 
pharmacy practice. It is a mandatory subject in most pharmacy schools. 
Most, if not all, state laws require that pharmacists be proficient in com- 
pounding and that they maintain special compounding equipment.”). 

26 

to a component of a commercially available product, or an 
approved drug does not come in a dosage appropriate for an 
individual or in a delivery system that the patient can 
tolerate, the physician and pharmacist can work together to 
create a compounded product that addresses the patient’s 
particularized needs. See Professionals & Patients for 
Customized Care v. Shalala, 56 F.3d 592, 593 (5th Cir. 1995); 
Pet. App. 41a-42a.3 

Of course, it might theoretically be ideal if a pharmacy 
first demonstrated to the FDA that a compounded drug is 
safe and effective for its intended use before it is sold to an 
individual patient. However, because obtaining FDA ap- 
proval of a new drug is a costly process, requiring FDA ap- 
proval of all drug products compounded by pharmacies for 
the particular needs of an individual patient would, as a 
practical matter, eliminate the practice of compounding, and 
thereby eliminate availability of compounded drugs for those 
patients who have no alternative treatment. The cost of 
developing and obtaining approval of a new drug that is not 
closely similar to an already approved drug is generally 
estimated to exceed $200 million dollars. See Henry, supra, 
at 617; J.A. Henderson, Jr. & A.D. Twerski, Drug Designs 
Are Different, 111 Yale L.J. 151, 164-165 (2001). The cost of 
developing drugs that closely resemble approved products is 
still substantial—ranging from $300,000 to $500,000. See 

3 See also C.A. E.R. 6 (giving examples of the benefits of com- 
pounding); K. Ranelli, Extending the Family, The Hartford Courant, Mar. 
16, 2000, at E1 (“Compounding can include making a natural, bio-identical 
drug for hormone therapy, changing an oral medication into a topical 
cream for patients who can’t swallow easily, and tailoring drugs to 
children’s taste by adding a fruit extract.”); H. Dukes, Compounding of 
Medications Enjoys a Comeback, South Bend Tribune, Jan. 31, 2001, at 
C1 (benefits of compounding include pediatric dosages of drugs manu- 
factured only for adults and providing medications that drug companies no 
longer make). 

27 

Balaji K., Generics: The Opportunity Beckons (July 2001) 
<http://www.inpharm.com/ intelligence/frost010701.html>. 

Just as those costs have discouraged manufacturers from 
developing drugs to treat rare illnesses, see Henry, supra, at 
628-630, the high costs of the approval process would make it 
uneconomical for a typical pharmacist to obtain approval for 
a drug that is compounded for a limited number of people— 
sometimes only a single individual—for whom the product is 
medically necessary. Requiring approval in those circum- 
stances would not be feasible, and advance approval of such 
individual compounded drugs is less central to protecting the 
broader public health than is the advance approval of pro- 
ducts that are distributed more widely to the public. The 
FDA’s policy of not enforcing the new drug approval 
requirements against traditional pharmaceutical compound- 
ing was thus a reasonable exercise of informed regulatory 
enforcement discretion based on the conclusion that there is 
a substantial governmental interest in permitting compound- 
ing in response to the particularized medical needs of 
identified individuals—a conclusion with which the district 
court and court of appeals in this case did not disagree (Pet. 
App. 7a-8a, 42a). 

3. There is a substantial governmental interest in bal- 
ancing the interests in permitting compounding in 

response to individual medical needs and protecting 

the integrity of the new drug approval process 

a. Although there are benefits from drug compounding in 
appropriate individualized circumstances, experience under 
the FDA’s enforcement policy prior to 1997 showed that 
compounding can also present significant health and safety 
risks. Some pharmacies were compounding outside the scope 
of normal pharmacy practice and were mass-producing and 
distributing compounded drugs in a manner tantamount to 
the manufacture of new drugs. Pet. App. 72a. Compounding 

28 

on that scale exposed substantial numbers of the public to 
the kinds of risks that had led to the enactment of the new 
drug approval process in the first place. For example, some 
drug products compounded by pharmacies contained impuri- 
ties that caused serious injuries, such as eye infections that 
required removal of patients’ eyes, and fatalities, including 
deaths of infants. Id. at 73a; T. Nordenberg, Pharmacy 
Compounding: Customizing Prescription Drugs, 34 FDA 
Consumer No. 4, at 11 (2000); C.E. Myers, Needed: Serious 
Attention to Sterile Products, 53 Am. J. Health Sys. Pharm. 
2582 (1996). 

Even more significantly, compounding on a scale tanta- 
mount to manufacturing was allowing wholesale circumven- 
tion of the new drug approval process. Pet. App. 73a-74a. 
Pharmacies could mass-produce a particular drug product, 
stimulate demand for the product through advertising, and 
thereby effectively manufacture and distribute the drug in 
interstate commerce without complying with the new drug 
approval requirements. See FDA Reform Legislation: 
Hearings Before the Subcomm. on Health and the Env’t of 
the House Comm. on Commerce, 104th Cong., 2d Sess. 31, 
125 (1996) (FDAMA Hearings) (testimony of Hon. David A. 
Kessler, Commissioner, FDA); id. at 59 (FDA Analysis); 
Addressing the FDA’s Performance, Efficiency, and Use of 
Resources: Hearings Before the Senate Comm. on Labor and 
Human Resources, 105th Cong., 1st Sess. 28 (1997) (testi- 
mony of Michael D. Friedman, M.D., and William Schultz, 
Deputy Commissioners, FDA). 

That practice presented far more serious potential conse- 
quences than the possibility that small quantities of drugs 
that might be unsafe or ineffective might be sold by a local 
pharmacy in individual situations. The practice threatened 
to undermine the new drug approval process and weaken the 
very core mission of the FDCA itself. If drug producers 
could mass-produce drugs through pharmacy entities en- 

29 

gaged in widespread compounding, and thus bypass the 
approval process, manufacturers would have far less incen- 
tive to bear the cost of establishing that the drugs they seek 
to market are in fact safe and effective. See FDAMA 
Hearings 31, 59; see also D.B. Brushwood, Responsive Regu- 
lation of Internet Pharmacy Practice, 10 Annals Health L. 
75, 85-86 (2001) (describing high-volume compounding that 
occurred in the 1990s as an “unregulated industry of clandes- 
tine drug manufacturers”). Cf. Weinberger v. Bentex 
Pharm., Inc., 412 U.S. 645, 653 (1973) (noting that it would 
be “inherently unfair” to require compliance by one manu- 
facturer with the new drug approval requirements “while his 
competitors marketing similar drugs remain free to violate 
the Act”).4 

Because the FDA recognized the importance of balancing 
the interest in permitting compounding to meet individual 
medical needs with the interest in protecting the integrity of 
the new drug approval process, the FDA, before the enact- 
ment of Section 353a in 1997, brought enforcement actions 
against pharmacies that were engaged in compounding that 
was tantamount to manufacturing. Pet. App. 73a-74a; see 
pp. 5-6, supra. When Congress addressed the compounding 
issue by enacting Section 353a, it sought to achieve essen- 
tially the same balance of interests that the FDA had 

4 Attempts by drug manufacturers to bypass the new drug approval 
process are not infrequent. See, e.g., United States v. Sage Pharm., Inc., 
210 F.3d 475 (5th Cir. 2000); Florida Breckenridge, Inc. v. Solvay Pharm., 
Inc., No. 98-4606 (11th Cir. May 11, 1999); United States v. Hiland, 909 
F.2d 1114 (8th Cir. 1990); United States v. 50 Boxes More or Less, 909 F.2d 
24 (1st Cir. 1990); United States v. Sandoz Pharm. Corp., 894 F.2d 825 
(6th Cir. 1990); United States v. 225 Cartons, More or Less, of an Article 
or Drug, 871 F.2d 409 (3d Cir. 1989); United States v. Atropine Sulfate 1.0 
Mg. (Article of Drug) Dey-Dose, 843 F.2d 860 (5th Cir. 1988); United 
States v. Articles of Drug, 826 F.2d 564 (7th Cir. 1987); Premo Pharm., 
Inc. v. United States, 629 F.2d 795 (2d Cir. 1980). 

30 

pursued through its enforcement policy. See H.R. Conf. No. 
399, 105th Cong., 1st Sess. Rep. 94 (1997) (explaining that 
Section 353a “ensure[s] continued availability of compounded 
drug products as a component of individualized therapy, 
while limiting the scope of compounding so as to prevent 
manufacturing under the guise of compounding”); accord S. 
Rep. No. 43, 105th Cong., 1st Sess. 67 (1997). 

b. The court of appeals refused to credit the govern- 
ment’s interest in achieving that balance because, in the 
court’s view, the government did not present “convincing 
evidence” of “the health risks associated with large numbers 
of patients taking [compounded] drugs.” Pet. App. 6a-7a. 
That evidentiary demand was wholly misplaced. In the first 
place, this Court has made clear that the government may 
“justi [advertising an solicitation] restrictions based solely 
on history, consensus, and ‘simple common sense.’ ” 
Lorillard Tobacco Co. v. Reilly, 121 S. Ct. 2404, 2422 (2001) 
(quoting Florida Bar v. Went For It, Inc., 515 U.S. 618, 628 
(1995) (citations and internal quotation marks omitted)). As 
described above, the substantiality of the government’s 
interests here is amply supported by the history of con- 
gressional regulation of drug manufacturing, the FDA’s 
regulatory experience with compounding, and “simple com- 
mon sense.” Ibid. 

Furthermore, the court of appeals’ insistence that the 
government produce “convincing evidence” in court was 
particularly inappropriate in this case, because it was based 
on a rejection of the fundamental premises of the FDCA 
itself, which in turn reflect decades of agency and con- 
gressional experience—that the widespread distribution of 
drugs that have not been shown to be safe and effective 
poses substantial health risks, and that the FDCA’s new 
drug approval requirements are a legitimate and effective 
means to address those risks. This Court has acknowledged 
the validity of those premises, see Rutherford, 442 U.S. at 

31 

556-557; Hynson, Westcott & Dunning, 412 U.S. at 619, 622, 
and the court of appeals had no basis to question them. 

The court of appeals’ ruling on this point appears to have 
stemmed from its failure to appreciate the full extent of the 
government’s interest. That interest is not simply, as the 
court of appeals characterized it, in “preventing widespread 
compounding.” Pet. App. 7a. Rather, as described above, 
the government’s interest is in preventing compounding that 
is tantamount to manufacturing and therefore undermines 
the federal scheme for ensuring that drugs are safe and 
effective before they are introduced into commerce. Con- 
gress sought to balance that substantial interest with the 
substantial but competing interest in making compounded 
drug products available in circumstances in which they are 
necessary to meet the particularized medical needs of in- 
dividual patients and a prior approval requirement generally 
would not be feasible. See H.R. Conf. Rep. No. 399, supra, 
at 94; S. Rep. No. 43, supra, at 67; cf. Buckman Co., 121 S. 
Ct. at 1018 (under the FDCA, “the FDA pursues difficult 
(and often competing) objectives”). Balancing those two 
goals is a substantial governmental interest in its own right. 
See United States v. Edge Broad. Co., 509 U.S. 418, 428 
(1993) (balancing competing governmental concerns can be a 
substantial governmental interest for purposes of the 
Central Hudson test). 

B. Section 353a Directly And Materially Advances The 

Government’s Interests 

Although Section 353a seeks to advance the same in- 
terests that the FDA previously pursued through the exer- 
cise of its enforcement discretion, Congress chose to endorse 
and lend the strength of its backing to those goals by setting 
forth in the FDCA itself the “parameters under which 
compounding is appropriate and lawful.” S. Rep. No. 43, 
supra, at 67. Section 353a thus exempts compounded drug 

32 

products from the FDCA’s provisions governing new drug 
approval, as well as the provisions concerning good manu- 
facturing practice and adequate directions for use, under 
certain specified conditions. 

The conditions at issue here involve limitations on the 
solicitation of prescriptions and advertising. Section 353a(a) 
exempts compounding from the new drug approval and re- 
lated requirements only if the compounded drug is produced 
“based on the unsolicited receipt of a valid prescription order 
or a notation, approved by the prescribing practitioner, on 
the prescription order that a compounded product is neces- 
sary for the identified patient.” 21 U.S.C. 353a(a) (Supp. V 
1999). Section 353a(c) further provides that a pharmacy is 
entitled to the exemption only if it “does not advertise or 
promote the compounding of any particular drug, class of 
drug, or type of drug.” 21 U.S.C. 353a(c) (Supp. V 1999). The 
advertising limitation does not, however, prevent the phar- 
macy from advertising that it performs compounding ser- 
vices generally. 21 U.S.C. 353a(c) (Supp. V 1999). The 
solicitation and advertising conditions on the application of 
the exemption directly and materially advance the govern- 
ment’s interest in balancing the competing goals of ensuring 
the availability of compounding in response to particularized 
medical needs of individual patients and protecting the in- 
tegrity of the new drug approval requirements. 

1. Promotion of particular drugs reasonably distin- 
guishes drug manufacturing that is subject to the 

premarket approval process from compounding in 

response to individual medical needs 

a. Before enactment of Section 353a, the FDA considered 
a variety of factors to determine whether a pharmacy was 
manufacturing under the guise of compounding and thus cir- 
cumventing the new drug approval requirements in a man- 
ner that materially undermined the purposes of the FDCA. 

33 

See p. 6, supra; Pet. App. 76a-77a. Among those factors was 
whether the pharmacy was “[s]oliciting business (e.g., 
promoting, advertising, or using sales persons) to compound 
specific dr 
products, product classes, or therapeutic classes 

of drug products.” Id. at 76a. The FDA explained that, in its 
experience, such practices “are far more consistent with 
those of drug manufacturers and wholesalers than with re- 
tail pharmacies.” Id. at 72a. Building on the FDA’s ex- 
perience, Congress found similar considerations useful and 
appropriate in drawing the line between traditional, indi- 
vidualized compounding and compounding that is tanta- 
mount to manufacturing. See 143 Cong. Rec. S9839 (daily 
ed. Sept. 24, 1997) (statement of Sen. Kennedy); ibid. (state- 
ment of Sen. Hutchinson). 

As the FDA had previously determined, Congress rea- 
sonably concluded that advertising of particular drug pro- 
ducts is a business practice that is characteristic of manu- 
facturing but not of traditional compounding by a pharmacy 
for an individualized need. Traditional compounding in- 
volves the provision of a service in response to a physician’s 
prescription and an individual patient’s particular medical 
situation. See Pet. App. 71a-72a; Allen, supra, at xv, 1 
(National Association of Boards of Pharmacy defines com- 
pounding as the preparation of a drug “as the result of a 
practitioner’s Prescription Drug Order or initiative based on 
the pharmacist/patient/prescriber relationship”); Wyandt & 
Williamson, supra, at 43, 49 (same). Compounding is thus 
responsive: it arises out of “specific practitioner/patient/ 
pharmacist relationships” and “result[s]” from the “practi- 
tioner’s [p]rescription * * * or initiative.” Id. at 49 
(emphasis added). Compounding in anticipation of pre- 
scription drug orders occurs only based on “routine, regu- 
larly observed patterns.” Ibid.; Allen, supra, at xv, 1. Com- 
pounding produces a medication that is “customiz[ed]” for 
“the patient’s unique needs.” A. Joyner, Local Pharmacies 

34 

Invest in Compounding, Billings Gazette, Feb. 27, 2000, at 
1D.5 Advertising the particular products created in the 
provision of the compounding service (as opposed to ad- 
vertising the compounding service itself) is not necessary to 
or characteristic of this type of responsive and customized 
service. Although advertising is useful in a broad market, it 
serves little purpose when a medication is compounded in 
response to an individual and often unique need. 

Drug manufacturing is the large scale production of a drug 
product, typically for a substantial market. Promotion of the 
manufactured product to physicians or the public is a 
common feature of drug manufacturing. Pet. App. 72a; K.B. 
Leffler, Persuasion or Information? The Economics of Pre- 
scription Drug Advertising, 24 J.L. & Econ. 45, 46 (1981) 
(market for prescription drugs is “characterized by very 
large promotional expenditures”); National Institute 
for Health Care Management, Prescription Drugs and 
Mass Media Advertising, 2000, at 4 (Nov. 2001) 
<http://www.nihcm.org/DTCbrief2001.pdf> ($15.7 billion was 
spent on promotion of prescription drugs in 2000, including 
$4 billion for doctor’s office detailing, $2.5 billion for direct 
advertisements to consumers, and almost $500 million for 
advertisements in medical journals). Successful competition 
in providing homogenous drug products “requires the 
identification and knowledge of individual manufacturers,” 
and, thus, advertising typically is critical to successful drug 

5 See Dukes, supra, at C1, C2 (describing compounding as providing 
“tailor-made” medicines); B.H. Thiers, Compounding Is Still Appropriate 
in Clinical Practice, 16 Dermatologic Clinic No. 2, at 330 (1998) (com- 
pounding “allows the physician to individualize treatment to the patient’s 
specific needs”); Allen, supra, at xix (compounding involves providing 
“patient-specific products”); C.A. E.R. 5 (“It is common in the practice of 
compounding for a physician, pharmacist, and patient to collaborate to 
select the proper combination of ingredients, dosage, and method of 
application or ingestion.”). 

35 

manufacture. Leffler, supra, at 48 (explaining how cen- 
tralized production of drugs increased the use of manu- 
facturer trademarks and brand-name promotion); see E. 
Kremers & G. Urdang, History of Pharmacy 164 (2d ed. 
1951) (stating that the rise of the proprietary drug industry 
was “the product of the extension and perfection of the art of 
advertising, furthered by the trade-mark acts”).6 Expendi- 
tures on such advertising therefore are a fair proxy for 
actual or intended large-scale manufacturing. Thus, by 
restricting the compounding exemption to pharmacies that 
do not engage in the promotional conduct characteristic of 
manufacturing, Congress rationally calculated that “the ex- 
emption would not create a loophole that would allow un- 
regulated drug manufacturing to occur under the guise of 
pharmacy compounding.” 143 Cong. Rec. at S9839 (state- 
ment of Sen. Kennedy). 

b. Conditioning the exemption from the regulatory 
approval process for compounded drugs on the absence of 
promotion of those products also reflects the FDCA’s 
underlying premise that the public health is best served 
when those who develop and promote new drugs prove that 
those drugs are safe and effective. See Hynson, Westcott & 
Dunning, 412 U.S. at 619, 629-630; p. 23, supra. If 
compounders could actively promote specific products 
through advertising without having to bear the costs of the 

6 See also Allen, supra, at 1 (defining drug manufacturing to include 
“the promotion and marketing of [the manufactured] drugs”); Wyandt & 
Williamson, supra, at 6 (same); Administered Prices, Drugs, S. Rep. No. 
448, supra, at 157 (noting that “virtually all who attempt to market some 
trademarked specialties engage in journal advertising, direct mail, and the 
supplying of free samples to physicians”); J. Avorn et al., Scientific Versus 
Commercial Sources of Influence on the Prescribing Behavior of Physi- 
cians, 73 Am. J. of Med. 4, 7 (July 1982) (explaining that “[t]ypically, the 
initial promotion of a new drug is accompanied by extensive advertise- 
ment of its virtues”). 

36 

new drug approval process, they would enjoy an unfair 
advantage over traditional drug manufacturers, who must 
comply with the approval requirements. That unfair 
advantage would undermine the statutory incentive for drug 
manufacturers to comply with the approval requirements, 
which are the FDCA’s central mechanism to ensure that 
drugs introduced into interstate commerce are safe and 
effective for their intended uses. See pp. 28-29, supra 
(explaining that manufacturers could by-pass the approval 
process by establishing pharmacy subcomponents). 

c. Advertising and other promotional material have long 
been critical factors in determining the scope of regulation 
under the FDCA. For example, the FDA considers labeling, 
promotional material, and advertising (among other things) 
to determine whether a substance constitutes a “drug” that 
is subject to regulation under the Act because it is intended 
to treat disease or otherwise to affect the structure or func- 
tion of the body. See 21 U.S.C. 321(g)(1); e.g., United States 

v. Storage Spaces Designated Nos. “8” and “49” Located at 
277 E. Douglas, Visalia, CA, 777 F.2d 1363, 1366-1367 & n.6 
(9th Cir. 1985); National Nutritional Foods Ass’n v. 
Mathews, 557 F.2d 325, 334 (2d Cir. 1977); United States v. 
Article . . . Consisting of 216 Individually Cartoned Bot- 
tles, 409 F.2d 734, 739 (2d Cir. 1969) (collecting cases). 
Similarly, promotional representations can be an impor- 
tant indicator of whether a new drug application or supple- 
mental new drug application is required for a product, e.g., as 
a result of advertising recommending a new use for the 
product. The labeling for a drug must indicate “all con- 
ditions, purposes, or uses for which such drug is intended, 
including conditions, purposes, or uses for which it is pre- 
scribed, recommended, or suggested in its oral, written, 
printed, or graphic advertising.” 21 C.F.R. 201.5; see also 21 
C.F.R. 201.128 (in determining a drug’s intended uses, the 
FDA considers, among other things, “labeling claims, adver- 

37 

tising matter, or oral or written statements” by the persons 
legally responsible for the product’s labeling or their repre- 
sentatives). If a product is labeled for a new intended use, as 
required by those regulations, it is a “new drug” (for which 
FDA premarket approval is required), because it is not 
generally recognized to be safe and effective for use “under 
the conditions prescribed, recommended, or suggested in the 
labeling thereof,” or, while so recognized, has not been used 
for a material time or to a material extent under such 
conditions. 21 U.S.C. 321(p); 108 Cong. Rec. at 17,366 
(statement of Sen. Eastland). The use claimed for a drug in 
promotional material (and otherwise) thus may be an impor- 
tant factor in determining whether or not it is a new drug 
and whether FDA premarket approval is required. See S. 
Rep. No. 1744, supra, Pt. 1, at 17; id. at 59-60 (views of Sens. 
Dirksen and Sen. Hruska); S. Rep. No. 1744, supra, Pt. 2, at 
5; see also Hynson, Westcott & Dunning, 412 U.S. at 613, 
629, 632 (new drug is one not generally recognized by ex- 
perts as safe and effective for its “intended use”). Therefore, 
denying the exemption from the FDA approval require- 
ments when compounded drug products are advertised or 
otherwise promoted is entirely consistent with the overall 
structure and administrative implementation of the FDCA. 

2. The court of appeals erred in concluding that the 

advertising and solicitation conditions do not materi- 
ally advance the government’s interests 

a. The court of appeals erroneously concluded that limit- 
ing the exemption from the premarket approval and other 
requirements to pharmacies that do not promote particular 
compounded products does not directly and materially ad- 
vance the government’s interests. Pet. App. 7a-10a. As an 
initial matter, the court faulted the government for failing to 
demonstrate that Section “353a’s speech restrictions will 
keep the demand for particular compounded drugs artifi- 

38 

cially low, and thereby protect unwary consumers.” Id. at 
8a. Once again, the court of appeals appears to have mis- 
understood the government’s argument and burden. As 
discussed above, the government’s argument is that Con- 
gress sensibly concluded that advertising for a particular 
compounded drug product reasonably identifies the point at 
which the interest in preserving the integrity of the new 
drug approval requirements outweighs the interest in pro- 
tecting the availability of traditional pharmaceutical com- 
pounding in response to individual medical needs. That 
contention in no way requires a showing that Section 353a’s 
speech restrictions will suppress the demand for particular 
compounded drugs. 

The court of appeals also relied on its own assessment that 
other “safeguards exist to protect the public.” Pet. App. 8a. 
The provisions of Section 353a to which the court referred, 
however, do not advance the governmental interests under- 
lying that Section. For example, the court noted that, under 
FDAMA, “[n]o compounded drug may be dispensed without 
a valid prescription from a licensed physician.” Id. at 8a-9a 
(citing 21 U.S.C. 355a(a) (Supp. V 1999)). That requirement, 
however, is insufficient to advance the government’s interest 
in preserving the integrity and safeguarding function of the 
FDCA’s new drug approval process. That process rests on 
the learning accumulated over decades by the FDA and Con- 
gress that the ultimate determination whether a new drug is 
safe and effective cannot be left to individual doctors, who 
cannot by themselves compile and master the necessary 
information, but must be made by the FDA on the basis of 
scientific evidence submitted by the manufacturer. See 
Hynson, Westcott & Dunning, 412 U.S. at 619, 630; Warner- 
Lambert Co., 787 F.2d at 156. 

The court of appeals also observed that a “pharmacist can- 
not regularly compound drugs that are essentially copies of a 
commercially available drug product.” Pet. App. 9a (citing 

39 

21 U.S.C. 353a(b)(1)(D) (Supp. V 1999)). Although that limi- 
tation does indeed further the government’s interest in 
preventing pharmacies from manufacturing products that 
are already available without complying with the FDCA’s 
requirements, it does not address the problem of the manu- 
facture through widespread compounding of products that 
are different from those that are commercially available. 
That latter form of compounding is addressed by Sections 
353a(a) and (c), by ensuring that entities that promote the 
distribution in interstate commerce of new drug products 
comply, as must conventional manufacturers, with the new 
drug approval requirements. By requiring such parity in 
treatment, Section 353a preserves the integrity and protec- 
tive function of the new drug approval process and prevents 
the widespread distribution of new drugs that have not been 
proven safe and effective. 

Nor do 21 U.S.C. 353a(b)(1)(A) and (B), which limit the 
substances that pharmacists may use in compounding, ade- 
quately address the governmental interest in preventing the 
manufacturing of new drugs under the guise of compound- 
ing. Those provisions require that the ingredients used in 
compounded products meet certain quality standards, which 
are less extensive than those that apply to approved pro- 
ducts under 21 U.S.C. 351(a)(2)(B) (Supp. V 1999). They do 
not ensure the safety and effectiveness of the compounded 
drugs themselves, which are still unapproved new drugs; 
and they do not operate to prevent compounding activity 
that is on the scale and in the manner of manufacturing. 

b. The Ninth Circuit also concluded that Section 353a 
fails the third Central Hudson inquiry because, in the court’s 
view, it “is so riddled with exceptions that it is unlikely that 
the speech restrictions would actually succeed in depressing 
the volume of compounded drugs.” Pet. App. 9a. The court 
noted, for example, that Section 353a permits pharmacies to 
advertise their general compounding services (see 21 U.S.C. 

40 

353a(c) (Supp. V 1999)) and does not prevent them from 
dispensing significant quantities of drugs intrastate (see 21 
U.S.C. 353a(b)(3) (Supp. V 1999)). Those provisions, how- 
ever, do not undermine the government’s interest in pre- 
venting manufacturing under the guise of compounding. 

As discussed above, if compounders could actively pro- 
mote particular compounded drug products without com- 
plying with the new drug approval requirements, they would 
enjoy an unfair advantage over traditional drug manu- 
facturers that would significantly reduce the incentives for 
manufacturers to expend the resources necessary to prove 
that their new drugs are safe and effective. Indeed, under 
such a regime, traditional drug manufacturers could estab- 
lish compounding entities and circumvent the approval 
process. 

Moreover, advertising of particular drug products is a 
historical and critical characteristic of drug manufacturing 
but not of traditional compounding. See pp. 33-35, supra. 
General advertising that a pharmacy provides compounding 
services does not suggest the existence, or foster the 
growth, of a market for any particular compounded drug, 
and thus does not distort the incentives of drug manu- 
facturers to comply with the new drug approval require- 
ments. Permitting pharmacies to advertise that they 
provide compounding services therefore is consistent with, 
not at odds with, Congress’s interest in ensuring that drugs 
are widely distributed in commerce only after they have 
been proven to be safe and effective for their intended uses. 
Allowing general advertising of compounding services— 
including information about the pharmacist’s experience, the 
timeliness of services, and physician satisfaction—also pro- 
motes Congress’s interest in preserving the availability of 
medically necessary treatments when demand is insufficient 
to justify the costs of preapproval. Section 353a thus does 
not permit “speech that poses the same risks the Govern- 

41 

ment purports to fear.” Greater New Orleans Broad., 527 
U.S. at 195. 

Nor does 21 U.S.C. 353a(b)(3) (Supp. V 1999) undermine 
the government’s interest. Section 353a(b)(3) provides that 
a pharmacy may avail itself of the compounding exemption 
only if it is located in a State that has entered into an 
agreement with the Secretary that addresses the interstate 
distribution of inordinate amounts of compounded drugs, or 
if the pharmacy’s total interstate distribution of compounded 
drug products does not exceed 5% of its total prescription 
orders. See 21 U.S.C. 353a(b)(3) (Supp. V 1999). That pro- 
vision imposes a restraint in addition to and somewhat dif- 
ferent in purpose from the restrictions on advertising and 
solicitation of prescriptions for individual drugs. The ad- 
vertising and solicitation limitations prevent the manu- 
facture of particular drug products under the guise of com- 
pounding. Section 353a(b)(3) limits the volume of the phar- 
macy’s overall interstate sales of compounded drugs to en- 
sure that the pharmacy retains its general character as a 
retail pharmacy rather than a drug manufacturer. 

The volume limitation in Section 353a(b)(3) applies only to 
interstate distributions so that the States may continue to 
play their traditional role in regulating the practice of 
pharmacy. See 143 Cong. Rec. S12,242 (daily ed. Nov. 9, 
1997) (statement of Sen. Jeffords) (Congress intended “to 
establish a rational framework for pharmacy compounding 
[that] respects the State regulation of pharmacy while allow- 
ing an appropriate role for the FDA”). The absence of 
volume limitations on overall intrastate distributions does 
not, however, undermine the advertising and solicitation re- 
strictions, which continue to prevent compounding of a 
particular drug that would be tantamount to the manu- 
facturing of new drugs. 

42 

C. Section 353a Does Not Burden An Excessive Amount 

Of Speech In Relation To Its Purposes 

The final consideration under Central Hudson is whether 
the advertising and solicitation limitations in Section 353a 
are “more extensive than * * * necessary” to serve the 
governmental interests that they advance. 447 U.S. at 566. 
As this Court recently reiterated, that inquiry is not a “least 
restrictive means” test. Lorillard Tobacco Co., 121 S. Ct. 
2422 (2001) (quoting Went For It, 515 U.S. at 632). Instead, 
the First Amendment requires only a “reasonable ‘fit be- 
tween the legislature’s ends and the means chosen to 
accomplish those ends.’ ” Ibid. (quoting in turn Board of Trs. 
of State Univ. of N.Y. v. Fox, 492 U.S. 469, 480 (1989)). The 
limitations in Section 353a satisfy that requirement. 

1. The advertising and solicitation limitations are care- 
fully crafted to meet the government’s goals 

The limitations on advertising and solicitation in Section 
353a are not more extensive than necessary to advance the 
government’s goals. Most significantly, Section 353a does 
not absolutely prohibit any speech. A pharmacy that wishes 
to mass-produce a particular drug product and promote that 
product by advertising or soliciting prescriptions can do 
so—just as any other drug manufacturer can—if it complies 
with the FDCA’s new drug approval and related require- 
ments. It is only if the pharmacy desires to avail itself of the 
exemption from those otherwise generally applicable re- 
quirements on conduct that it must limit its promotional 
activities. As explained above, if a pharmacy could produce 
and promote compounded drugs without complying with the 
new drug approval requirements, the requirements would be 
substantially undermined. The limitation on promotion is 
thus well calibrated to the government’s interest in protect- 
ing the integrity of the new drug approval requirements. Cf. 
Dolan v. City of Tigard, 512 U.S. 374, 385, 391 (1994) 

43 

(government may condition a benefit on the relinquishment 
of a constitutional right if waiver of the right is reasonably 
related to the benefit) (citing Pickering v. Board of Educ., 
391 U.S. 563, 568 (1968) (government may impose limitations 
on the speech of its employees when justified by its interests 
as an employer)). 

The advertising limitation is also tailored to accommodate 
the commercial speech necessary to the practice of tradi- 
tional compounding. Section 353a(c) expressly permits ad- 
vertising for and promotion of “the compounding service 
provided by the licensed pharmacist.” 21 U.S.C. 353a(c) 
(Supp. V 1999). Therefore, compounders may, consistent 
with FDAMA, advertise that they perform compounding 
services, that they are experts in compounding, and that 
they stand ready to fill prescriptions for compounded drug 
products. They may also advertise other information that 
relates to their general compounding practice, such as the 
mark-up that they charge in exchange for their compounding 
services. This kind of advertising is consistent with the 
government’s interest under FDAMA in ensuring the 
availability of compounding in response to individual medical 
needs without undermining the integrity of the new drug 
approval process. See p. 40, supra. Advertising of parti- 
cular compounded drugs, in contrast, is not necessary to the 
practice of traditional compounding and would permit 
compounding pharmacists to engage in manufacturing and 
thus threaten the integrity and safeguarding function of the 
new drug approval requirements. See pp. 33-35, supra. 

The solicitation provisions are also narrowly drawn. 
Section 353a(a)(2) permits compounding “in limited quanti- 
ties” before the receipt of a valid prescription for a particular 
patient if the decision to compound is based on an estab- 
lished relationship among the pharmacist, the practitioner, 
and the patient. 21 U.S.C. 353a(a)(2) (Supp. V 1999). That 
provision accords with the traditional practice of com- 

44 

pounding, as defined by the National Association of Boards 
of Pharmacy. See Allen, supra, at xv (compounding is the 
preparation of a drug “as the result of a practitioner’s Pre- 
scription Drug Order or initiative based on the pharmacist/ 
patient/prescriber relationship,” but “also includes the 
preparation of drugs * * * in anticipation of Prescription 
Drug Orders based on routine, regularly observed pat- 
terns”). 

As the court of appeals noted, the FDA interprets Section 
353a(a) to permit a pharmacist to “call a physician and rec- 
ommend a drug compound when a patient comes in with a 
prescription for a commercial drug and provides information 
to the pharmacist that indicates that the patient might 
require a compounded product.” Pet. App. 9a; see also C.A. 
E.R. 153. That interpretation derives from the language in 
Section 353a(a) that permits preparation of a compounded 
drug based on “a notation, approved by the prescribing prac- 
titioner, on the prescription order that a compounded pro- 
duct is necessary for the identified patient.” 21 U.S.C. 
353a(a) (Supp. V 1999). The FDA’s reasonable interpreta- 
tion of that language is not, as the court of appeals viewed it 
(Pet. App. 9a), an exception that undermines the ability of 
Section 353a to achieve the government’s goals. It is instead 
an example of how Section 353a is narrowly tailored. The 
pharmacist undertakes the permitted activity in response to 
the particularized medical needs of an identified patient in 
the context of an existing practitioner/patient/pharmacist re- 
lationship. The activity therefore does not pose a significant 
danger that the pharmacist is engaging in drug manu- 
facturing, but rather fits squarely within the traditional 
practice of pharmacy compounding. See pp. 33-34, supra 
(explaining that traditional compounding customizes medica- 
tions in response to a patient’s special needs and based on a 
relationship among the pharmacist, the patient, and the 
prescribing physician). 

45 

2. The alternatives suggested by the court of appeals 

would undermine the government’s interests 

The court of appeals mistakenly believed that “clear 
alternatives exist that can advance the government’s as- 
serted interest in a manner far less intrusive to the phar- 
macists’ free speech rights.” Pet. App. 10a. In fact, the 
alternatives suggested by the court of appeals—“disclaimers 
on compounded drugs explaining that they had not been 
subject to FDA approval,” or subjecting all compounded 
drug products to the FDCA’s new drug approval require- 
ments, ibid.—not only would fail to advance, but would 
actually undermine, the government’s interests. 

Reliance on disclaimers is inconsistent with the FDCA’s 
premarket approval process. That regime prohibits the 
interstate distribution of drugs that the FDA has not found 
to be safe and effective. Congress has determined that 
public health and safety are best ensured by requiring 
manufacturers to establish to the FDA that their drugs are 
safe and effective for their intended uses before they are 
distributed widely in commerce. See Hynson, Westcott & 
Dunning, 412 U.S. at 619, 630; p. 23, supra. That deter- 
mination is amply supported by Congress’s experience over 
the course of the last century in regulating the manufacture 
of drugs. See pp. 20-23, supra. Disclaimers would not 
prevent widespread distribution of drugs that have not been 
demonstrated to be safe and effective. They thus would not 
provide a satisfactory alternative for the new drug approval 
regime that Congress, based on many years of experience, 
reasonably determined to be necessary to protect the public. 

The other alternative suggested by the court of appeals— 
subjecting all compounded drugs to the new drug approval 
process—would undermine Congress’s competing goal of 
making compounded drugs available in the limited circum- 
stances in which a compounded product is necessary to meet 

46 

an individual patient’s medical needs. As described above, 
because those circumstances are so limited, and the costs of 
the premarket approval process are usually so substantial, 
requiring compliance with the new drug approval require- 
ments in all cases would effectively eliminate the availability 
of compounded products to meet individual medical needs. 
See p. 26, supra. 

The court of appeals therefore erred in concluding that 
Section 353a is not narrowly tailored to achieve the govern- 
ment’s substantial interest in balancing the availability of 
compounding in response to the particular medical needs of 
individual patients with preventing compounding that is 
tantamount to manufacturing, which would threaten the 
integrity of the new drug approval requirements. 

CONCLUSION 

The judgment of the court of appeals should be reversed, 
and the case should be remanded with instructions to enter 
judgment for the petitioners. 

Respectfully submitted. 

ALEX M. AZAR II 

General Counsel 
U.S. Department of Health 
and Human Services 

DANIEL E. TROY 
Chief Counsel 

PATRICIA J. KAEDING 

Associate Chief Counsel 
U.S. Food & Drug 

Administration 
THEODORE B. OLSON 
Solicitor General 

ROBERT D. MCCALLUM, JR. 

Assistant Attorney General 

EDWIN S. KNEEDLER 

Deputy Solicitor General 

MATTHEW D. ROBERTS 

Assistant to the Solicitor 

General 

DOUGLAS N. LETTER 
KATHERINE S. DAWSON 

Attorneys 

DECEMBER 2001