## Facts

- The United States (through the Food and Drug Administration (FDA)) sued Loran Medical Systems, Inc., Bent Formby, and Ernest Thomas, M.D., over their importation and use of a “Cell Product” consisting of neonatal rabbit cells and human fetal cells obtained from Russia.
- Defendants intended to inject the Cell Product into diabetic patients and claimed the injections could stimulate the body’s production of insulin.
- On June 20, 1996, the district court entered a temporary restraining order barring defendants from importing the Cell Product for use in treating human diabetes.
- On July 1, 1996, the court entered a preliminary injunction after finding the government showed a reasonable probability of success that the Cell Product fell within FDA regulatory authority under the Public Health Service Act (PHS Act) and the Federal Food, Drug, and Cosmetic Act (FDCA).
- The parties filed cross-motions for summary judgment and agreed there were no disputed issues of fact; the dispute turned on whether federal law and FDA regulations gave the FDA authority to regulate the Cell Product.
- The government sought summary judgment and a permanent injunction against unregulated importation and use; defendants argued the Cell Product was outside the FDA’s authority.

## Issues

1. Does the FDA have regulatory authority over defendants’ Cell Product as a “biological product” under the PHS Act and implementing regulations?
2. Does the FDA have regulatory authority over the Cell Product as a “drug” and “new drug” under the FDCA and implementing regulations?

## Decision

- The court granted the government’s motion for summary judgment.
- The court rejected defendants’ argument that the Cell Product fell outside FDA regulatory authority.
- The court concluded the FDA has authority to regulate the Cell Product under the PHS Act and the FDCA (including as a drug/new drug).
- The court granted the government’s request for a permanent injunction against defendants’ unregulated importation and use of the Cell Product.

## Legal Principles

- Summary judgment is proper when there is no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law; where parties agree the facts are not in dispute, statutory and regulatory scope can be resolved on summary judgment.
- FDA regulatory authority may arise under both the PHS Act (for biological products) and the FDCA (for drugs and new drugs), and the same product can fall within overlapping statutory schemes.
- A product’s intended therapeutic use—here, injection to treat diabetes by affecting insulin production—supports classification within FDA-regulated categories addressing treatment of disease and effects on body functions.
- When the FDA establishes that a product used for treating disease is within the statutory and regulatory definitions governing biological products and drugs/new drugs, courts may enjoin importation and clinical use unless federal requirements are satisfied.
- Permanent injunctive relief is an available remedy to prevent ongoing or threatened violations involving importation and use of unapproved or unregulated medical products.

## Conclusion

United States v. Loran Medical Systems, Inc. held that the FDA had authority under the PHS Act and the FDCA to regulate defendants’ imported neonatal rabbit and human fetal cell injections intended to treat diabetes, and the court granted summary judgment for the government and entered a permanent injunction barring unregulated importation and use of the Cell Product.


United States v. Loran Medical Systems, Inc., 25 F. Supp. 2d 1082 (1997)