## Facts

- Franck’s Lab, Inc. operated as a Florida-licensed compounding pharmacy serving veterinarians, primarily for non-food animals (especially horses).
- The pharmacy compounded customized animal drugs, including preparations made from bulk active pharmaceutical ingredients, to fill individual veterinary prescriptions.
- In April 2009, 21 polo horses in Florida died after receiving a compounded preparation made by Franck’s Lab; the deaths were linked to an error in the strength of selenium in a product intended to mimic a commercial drug.
- Before filing suit, the FDA conducted inspections and issued observation and warning-type communications, but had not previously brought a formal civil enforcement action to stop a pharmacy from compounding animal drugs from bulk substances.
- The United States, through the FDA, filed an FDCA enforcement action seeking a permanent injunction barring Franck’s Lab from compounding animal drugs from bulk substances, asserting this activity constituted manufacturing unapproved “new animal drugs.”
- The district court denied the government’s request for a preliminary injunction.
- The case proceeded on cross-motions for summary judgment based on statutory interpretation and the scope of FDA authority over pharmacy compounding.

## Issues

1. Whether the FDCA authorizes FDA to treat prescription-based, traditional pharmacy compounding of animal drugs from bulk substances as the manufacture of “new animal drugs” requiring FDA approval, allowing an injunction against a state-licensed pharmacy.
2. Whether FDA may apply general FDCA “new drug” provisions to broadly prohibit bulk compounding of animal drugs without specific implementing regulations.

## Decision

- The court denied the government’s motion for summary judgment.
- The court granted summary judgment to Franck’s Lab on the government’s principal injunctive claims.
- The court held the FDCA did not clearly authorize FDA to enjoin traditional, prescription-based compounding of animal drugs from bulk ingredients for non-food animals on the theory that it categorically constituted unlawful “new animal drug” manufacturing.
- The court denied the requested permanent injunction.

## Legal Principles

- Absent clear congressional direction, a federal statute will not be read to displace state regulation of the practice of pharmacy and traditional compounding for individual patients.
- The FDCA’s “new animal drug” provisions do not, without more specific statutory language, categorically convert traditional prescription-based veterinary compounding from bulk substances into unlawful unapproved drug manufacturing.
- FDA may act against compounding operations that function as large-scale manufacturing under the guise of compounding, but the statute does not support an across-the-board prohibition of all bulk-ingredient veterinary compounding done pursuant to individual prescriptions.
- A major expansion of regulatory control through enforcement positions, rather than through clearer statutory authority and formal rulemaking, weighs against accepting an agency’s sweeping construction where the statute is ambiguous in context.

## Conclusion

The court concluded that the FDCA did not clearly give FDA authority to obtain an injunction barring a state-licensed pharmacy’s traditional, prescription-based compounding of animal drugs from bulk ingredients for non-food animals, and it entered summary judgment for the pharmacy while denying the government’s requested injunctive relief.


United States v. Franck's Lab, Inc., 816 F. Supp. 2d 1209 (M.D. Fla. 2011)