## Facts

- Professionals and Patients for Customized Care (P2C2), a pharmacy organization representing pharmacists and patients involved in customized compounding, challenged FDA Compliance Policy Guide 7132.16 (CPG 7132.16) under the Administrative Procedure Act (APA).
- Traditional pharmacy “compounding” involves combining ingredients pursuant to a physician’s prescription to prepare medication for an individual patient, including formulations not commercially available.
- The FDA believed some pharmacy-licensed entities were acting like manufacturers by producing drug products in bulk without patient-specific prescriptions and marketing them to practitioners and patients, allegedly to avoid federal requirements applicable to drug manufacturing under the Food, Drug, and Cosmetic Act (FDCA).
- In 1992, FDA issued CPG 7132.16 to describe how it would evaluate when pharmacy activities resemble manufacturing and could warrant FDCA enforcement.
- The CPG recognized lawful compounding in response to individual prescriptions but identified nine non-exclusive factors FDA would consider in determining whether to pursue enforcement.
- The CPG stated the factors were illustrative only; FDA could consider other factors and could decline enforcement even if all nine factors were present.
- The FDA characterized the CPG as internal guidance and as an interpretive rule or general statement of policy.
- The district court held the CPG was not a substantive rule and therefore not subject to notice-and-comment rulemaking, entering judgment for the government; P2C2 appealed.

## Issues

1. Whether CPG 7132.16 was a “substantive” (legislative) rule requiring APA notice-and-comment procedures.
2. Whether the CPG instead qualified as an interpretive rule or general statement of policy exempt from notice-and-comment because it did not impose binding norms or limit FDA enforcement discretion.

## Decision

- The Fifth Circuit affirmed the district court’s judgment for the government.
- The court held CPG 7132.16 was not a substantive rule; it functioned as a general statement of policy and interpretive guidance.
- The court concluded the CPG did not create binding legal obligations, did not withdraw FDA discretion, and therefore was exempt from APA notice-and-comment requirements.

## Legal Principles

- APA notice-and-comment procedures apply to substantive rules, but not to interpretive rules or general statements of policy.
- A general statement of policy typically announces factors the agency expects to consider, or goals it intends to pursue, in resolving regulatory questions, while leaving decisionmakers free to exercise discretion in individual cases.
- A guidance document is more likely non-legislative when it is prospective, uses non-mandatory language, sets out non-exclusive considerations, and expressly reserves agency discretion to consider other factors and to refrain from enforcement.
- An agency’s label for a document is relevant but not controlling; courts evaluate the document’s text and practical effect to determine whether it operates as a binding norm.

## Conclusion

The Fifth Circuit held that FDA’s compounding compliance guide was advisory enforcement guidance that preserved agency discretion and did not change governing law, so it was not a substantive rule and did not require APA notice-and-comment rulemaking.


Professionals & Patients for Customized Care v. Shalala, 56 F.3d 592 (5th Cir. 1995)