Republic vs. Drugmakers Laboratories

Republic vs. Drugmakers Laboratories
G.R. No. 190837

​Facts:
The FDA was created pursuant to RA 3720, otherwise known as the “Food, Drug and Cosmetics Act” primarily in order to establish safety or efficacy standards and quality measure of foods, drugs and devices and cosmetics products. On March 15, 1989, the Department of Health, thru then Secretary Alfredo RA Bengzon issued AO 67 s. 1989, entitled Revised Rules and Regulations on Registration of Pharmaceutical products. Among others, it required drug manufacturers to register certain drug and medicine products with FDA before they may release the same to the market for sale. In this relation, a satisfactory bioavailability/bioequivalence (BA/BE) test is needed for a manufacturer to secure a CPR for these products. However, the implementation of the BA/BE testing requirement was put on hold because there was no local facility capable of conducting the same. The issuance of circulars no. 1 s. of 1997 resumed the FDA’s implementation of the BA/BE testing requirement with the establishment of BA/BE testing facilities in the country. Thereafter, the FDA issued circular no. 8 s. of 1997 which provided additional implementation details concerning the BA/BE testing requirement on drug products.

Issue:
Whether or not the circular issued by FDA are valid.

Held:
Yes. Administrative agencies may exercise quasi-legislative or rule-making power only if there exist a law which delegates these powers to them. Accordingly, the rules so promulgated must be within the confines of the granting statutes and must not involve discretion as to what the law shall be, but merely the authority to fix the details in the execution or enforcement of the policy set out in the law itself, so as to conform with the doctrine of separation of powers and as an adjunct, the doctrine of non-delegability of legislative powers. An administrative regulation may be classified as a legislative rule, an interpretative rule or a contingent rule. Legislative rules are in the nature of subordinate legislation a d designed to implement a primary legislation by providing the details thereof. They usually implement existing law, imposing general, extra-statutory obligations pursuant to authority properly delegated by the congress may effect a change in existing law or policy which affect individual rights and obligations. Meanwhile, interpretative rules are intended to interpret, clarify or explain existing statutory regulations under which the administrative body operates. Their purpose or objective is merely to construe the statue being administered and purport to do no more than interpret the statute. Simply, they try to say what the statute means and refer to no single person or party in particular but concern all those belonging to the same class which may be covered by the said rules. Finally, contingent rules are those issued by an administrative authority based on the existence of certain facts or things upon which the enforcement of the law depends. 

In general, an administrative regulation needs to comply with the requirements laid down by EO 292 s. of 1988 otherwise known as the administrative code of 1987 on prior notice, hearing and publication in order to be valid and binding except when the same is merely an interpretative rule. This is because when an administrative rule is merely intepretative in nature its applicability needs nothing further than its bare issuance, for it gives no real consequence more than what the law itself has already prescribed. When, on the other hand, the administrative rule goes beyond merely providing for the means that can facilitate or render least cumbersome the implementation of the law but substantially increases the burden of those governed, it behooves the agency to accord at least to those directly affected a chance to be heard, and thereafter to be duly informed before that new issuance is given the force and effect of law. A careful scrutiny of the foregoing issuances would reveal that A0 67 is actually the rule that originally introduced the BA/BE testing requirement as a component of applications for the issuance of CPR covering certain pharmaceutical products as such, it is considered an administrative regulation – a legislative rule to be exact – issued by the Secretary of Health in consonance with the express authority granted to him by RA 3720 to implement the statutory mandate that all drugs and devices should first be registered with the FDA prior to their manufacture and sale. Considering that neither party contested the validity of its issuance, the court deems that AO 67 complied with the requirements of prior hearing, notice and publication pursuant to the presumption of regularity accorded to the govt in the exercise of its official duties. On the other hand, circulars no. 1 and 8 s. of 1997 cannot be considered as administrative regulations because they do not: a.) implement a primary legislation by providing the details thereof; b.) Interpret, clarify or explain existing statutory regulation under which FDA operates and/or; c.) Ascertain the existence of certain facts or things upon which the enforcement of RA 3720 depends. In fact, the only purpose of these is for FDA to administer and supervise the implementation of the provisions of AO 67 s. of 1989 including those covering the BA/BE testing requirement consistent with and pursuant to RA 3720. Therefore, the FDA has sufficient authority to issue the said circulars and since they would not affect the substantive rights of the parties that they seek to govern – as they are not, strictly speaking, administrative regulations in the first place – no prior hearing, consultation and publication are needed for their validity.