## Facts

- U.S. Health Club, Inc. manufactured and distributed a product formerly sold as “Atherex Institute Formula,” later renamed “Exachol,” and marketed it as a food supplement.
- Exachol’s promotional materials linked the product to lowering serum cholesterol and reducing the risk of heart disease and atherosclerosis.
- Lots of Exachol and related promotional literature were shipped in interstate commerce from New Jersey to New York.
- The United States, through the FDA, brought an in rem condemnation action alleging Exachol was a misbranded and unapproved “new drug” under the Federal Food, Drug, and Cosmetic Act (FDCA).
- U.S. Marshals seized the product and associated materials pursuant to an arrest warrant; Health Club filed a claim to the seized goods.
- The FDA moved for summary judgment seeking condemnation based on Exachol’s alleged “new drug” status and lack of an approved new drug application.
- The dispute arose while the FDA was developing a “Health Claims for Food Policy” addressing how foods making certain disease-risk or health-related claims would be handled.

## Issues

1. Whether Exachol could be treated, as a matter of law on summary judgment, as a “new drug” under the FDCA based on its promotional disease-related claims.
2. Whether Exachol was entitled to consideration under the FDA’s Health Claims for Food Policy before condemnation as an unapproved, misbranded new drug.
3. Whether questions about FDA consistency in treating comparable health-claim products created genuine disputes precluding summary judgment.

## Decision

- The court denied the FDA’s motion for summary judgment.
- The court held that Exachol was entitled to be considered under the FDA’s Health Claims for Food Policy.
- The court concluded that, on the existing record, condemnation as an unapproved, misbranded new drug could not be ordered as a matter of law.

## Legal Principles

- Under the FDCA, “intended use” may be inferred from labeling and other promotional materials, and disease-related claims can support drug classification.
- Summary judgment requires no genuine dispute of material fact and entitlement to judgment as a matter of law.
- Where an agency has articulated an applicable policy framework (here, a policy addressing health claims for foods), a court may decline to grant enforcement relief on summary judgment if the record raises material questions about how the product fits within that framework and whether similarly situated products are being treated consistently.

## Conclusion

The court refused to summarily condemn Exachol as an unapproved, misbranded new drug, holding that the product had to be considered under the FDA’s food health-claims policy and that unresolved factual and policy questions made summary judgment inappropriate.


United States v. Undetermined Quantities of an Article of Drug Labeled as Exachol, 716 F. Supp. 787 (S.D.N.Y. 1989)