## Facts

- Baxter operated regional compounding centers that bought FDA-approved injectable drugs (often lyophilized antibiotic powders) and then reconstituted, repackaged, froze, and distributed them to hospitals as ready-to-use dosage units.
- Using FDA-approved Glaxo bulk antibiotic powders and other approved components, Baxter produced eight frozen, ready-to-use injectable antibiotic products in new plastic containers, labeled and distributed for use by multiple hospitals.
- The Food and Drug Administration concluded that the finished frozen products differed materially from the approved drugs covered by existing applications because freezing, storage, container changes, and standardized distribution could affect stability, sterility, and performance.
- The United States alleged the eight finished products were “new drugs” under the Federal Food, Drug, and Cosmetic Act (FDCA) and were marketed without required FDA approval (new or supplemental applications).
- Baxter and Glaxo contended the finished products were not “new drugs” because the ingredients and components were already approved and their process resembled routine hospital pharmacy reconstitution and preparation.

## Issues

1. Whether the FDA may reasonably interpret the FDCA to treat Baxter’s commercially produced, ready-to-use frozen antibiotic dosage units as “new drugs” requiring separate FDA approval.
2. Whether the district court properly granted a preliminary injunction barring manufacture and distribution of the eight products pending trial.

## Decision

- The Seventh Circuit affirmed the preliminary injunction as to the eight ready-to-use frozen antibiotic products.
- The court held it could not conclude the FDA’s determination was an impermissible exercise of delegated authority under the FDCA.
- The court found no abuse of discretion or legal error in the district court’s conclusion that the government showed a likelihood of success and that injunctive relief served the statute’s public-health purpose.

## Legal Principles

- FDA approval relates to a specific finished drug product, including aspects of formulation, dosage form, and manufacturing and preparation methods, not merely the active ingredient in isolation.
- Under the FDCA’s broad “new drug” framework, an agency may reasonably require separate approval when a manufacturer’s processing and presentation of an approved drug can affect safety or effectiveness (e.g., reconstitution, repackaging, freezing, storage, and distribution as standardized units).
- Courts defer to a reasonable FDA interpretation of ambiguous statutory terms within the agency’s public-health mission, particularly at the preliminary-injunction stage.
- Large-scale, standardized production and distribution resembling commercial manufacturing may be regulated differently from traditional, patient-specific or small-scale pharmacy compounding.

## Conclusion

The court upheld a preliminary injunction because the FDA reasonably treated Baxter’s mass-produced frozen, ready-to-use antibiotics as distinct finished products requiring separate approval, and the district court acted within its discretion in enjoining their continued manufacture and distribution pending a merits determination.


United States v. Baxter Healthcare Corp., 901 F.2d 1401 (7th Cir. 1990)