People v. Drugmaker's Laboratories
REITERATIONFacts
The Antecedents: The Food and Drug Administration (FDA), formerly the Bureau of Food and Drugs (BFAD), was created pursuant to Republic Act No. (RA) 3720 to ensure the safety and purity of foods, drugs, and cosmetics. Administrative Order No. (AO) 67, s. 1989, issued by the Department of Health (DOH), required drug manufacturers to register certain products with the FDA, necessitating a satisfactory bioavailability/bioequivalence (BA/BE) test for a Certificate of Product Registration (CPR). Initially, the BA/BE testing requirement was suspended due to the lack of local facilities. BFAD Circular No. 1, s. 1997, and Circular No. 8, s. 1997, resumed the implementation of the BA/BE testing requirement. Respondents Drugmaker's Laboratories, Inc. and Terrarriedic, Inc. applied for and were issued a CPR for their product "Refam 200mg/5mL Suspension" in 1996, which did not undergo BA/BE testing at the time. Despite subsequent yearly renewals with the condition of submitting satisfactory BA/BE test results, the FDA informed respondents in 2006 that Refam was "not bioequivalent with the reference drug." Instead of submitting satisfactory BA/BE test results, respondents filed a petition before the Regional Trial Court (RTC) questioning the validity of BFAD Circular Nos. 1 and 8, s. 1997, alleging that the DOH, not the FDA, had the authority to issue such rules. Procedural History: The RTC ruled in favor of respondents, declaring BFAD Circular Nos. 1 and 8, s. 1997 null and void, and ordering the issuance of permanent injunctions against the FDA and directing the issuance of CPRs for respondents' products without the BA/BE test requirement. The RTC held that the FDA lacked the authority to issue the circulars and that their promulgation contravened the law and the Constitution. The Petition: The Republic of the Philippines, represented by the FDA, filed a petition for review on certiorari before the Supreme Court, assailing the RTC's Order and Writ of Permanent Injunction. The Supreme Court granted the FDA's application for a Temporary Restraining Order.
Issue(s)
Whether the FDA may validly issue and implement BFAD Circular Nos. 1 and 8, s. 1997. Whether the aforesaid circulars partake of administrative rules and regulations that must comply with the requirements of prior notice, hearing, and publication.
Ruling
The petition is meritorious. The Supreme Court GRANTED the petition, SET ASIDE the Order dated December 18, 2009 and the Writ of Permanent Injunction dated January 19, 2010 of the Regional Trial Court of Muntinlupa City, Branch 256, declared BFAD Circular Nos. 1 and 8, series of 1997 as VALID, and made the Court's Temporary Restraining Order dated February 24, 2010 PERMANENT.
Ratio Decidendi
On whether the FDA may validly issue and implement BFAD Circular Nos. 1 and 8, s. 1997: The Court held that administrative agencies may exercise rule-making powers only if a law delegates such powers to them. The rules promulgated must be within the confines of the granting statute and must not involve discretion as to what the law shall be, but merely the authority to fix details in the execution or enforcement of the policy set out in the law. In this case, RA 3720 expressly authorized the Secretary of Health, upon the recommendation of the FDA Director, to issue rules and regulations pertaining to the registration of pharmaceutical products. AO 67, s. 1989, issued by the Secretary of Health, originally introduced the BA/BE testing requirement. Circular Nos. 1 and 8, s. 1997, issued by the FDA, were not new administrative regulations but rather administrative issuances aimed at administering and supervising the implementation of AO 67, s. 1989, consistent with RA 3720. Therefore, the FDA had sufficient authority to issue these circulars. On whether the aforesaid circulars partake of administrative rules and regulations that must comply with the requirements of prior notice, hearing, and publication: The Court distinguished between legislative and interpretative rules. Legislative rules are subordinate legislation that implement primary legislation by providing details and may affect individual rights and obligations, thus requiring notice, hearing, and publication. Interpretative rules, on the other hand, merely clarify existing statutory regulations and do not impose new obligations, hence not requiring these formalities. The Court found that AO 67, s. 1989, was a legislative rule that originally introduced the BA/BE testing requirement and complied with the necessary formalities. However, Circular Nos. 1 and 8, s. 1997, were not considered administrative regulations in the strict sense because their purpose was to administer and supervise the implementation of AO 67, s. 1989, particularly the BA/BE testing requirement. Since these circulars did not substantially increase the burden of those governed or affect substantive rights beyond what the law already prescribed, they did not require prior hearing, consultation, and publication to be valid.
Main Doctrine
BFAD Circular Nos. 1 and 8, s. 1997 are valid issuances and binding to all concerned parties, including respondents, as they are administrative issuances that implement existing regulations and do not require prior hearing, consultation, and publication because they do not affect substantive rights.