Farmakeio Outsourcing, LLC v. United States Food and Drug Administration et al

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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
FORT WORTH DIVISION
FARMAKEIO OUTSOURCING, LLC 	§
§
§
Plaintiff, 	§
§
v. 	§ 	Civil Action No. 4:24-CV-01040-O
§
UNITED STATES FOOD AND DRUG
ADMINSTRATION et al,
§
§
§
Defendants. 	§
OPINION & ORDER
Before the Court are Plaintiff’s Motion for Summary Judgement, Brief, and Appendix in
Support (ECF Nos. 42–44); Defendant United States Food and Drug Administration and Robert
M. Califf’s Cross Motion for Summary Judgment and Opposition, Brief, and Appendix in Support,
and The Pharmaceutical Research and Manufacturers of America’s Brief in Support (ECF Nos.
50–52, 64); Defendant Hope Medical Enterprises Medical’s Motion for Summary Judgment and
Opposition, Brief, and Appendix in Support (ECF No. 54–56); Plaintiff’s Reply (ECF No. 68);
Hope Medical Enterprise’s Reply (ECF No. 71); and Rober M. Califf and the United States Food
and Drug Administration’s Reply (ECF No. 72). After considering the briefing and applicable
caselaw, the Court DENIES Plaintiff’s Motion for Summary Judgment (ECF No. 42) and
GRANTS Defendant’s Motion for Summary Judgment (ECF No. 50).
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I. 	BACKGROUND1
Plaintiff FarmaKeio Outsourcing, LLC (“Plaintiff”) is a large-scale drug compounder
known as an outsourcing facility. Congress added 21 U.S.C. § 353b (“Section 503B”) to the Food,
Drug, and Cosmetic Act in 2013. 	Section 503B authorizes outsourcing facilities to compound
from bulk drug substances subject to a series of requirements. 	One requirement is that an
outsourcing facility may compound a substance from active ingredients only if they are on the
FDA’s list “identifying bulk drug substances for which there is a clinical need.” 21 U.S.C.
§ 353b(a)(2)(A)(i) (“the Bulk List”). To date, there are only five substances on the Bulk List.
Sodium thiosulfate was nominated for the Bulk List by a trade association of outsourcing
facilities. The FDA published a final action excluding sodium thiosulfate from the Bulk List in
January 2022. 	Plaintiff brought this action under the Administrative Procedure Act (APA),
challenging (1) the FDA’s final action excluding sodium thiosulfate from the Bulk List (2) arguing
that because the FDA has not included all active ingredients found in FDA-approved drugs, it has
“unreasonably delayed”2 completion of the Bulk List. The Parties filed cross motions for summary
judgment, which are ripe for the Court’s review.
II. 	LEGAL STANDARDS
A. Standing
Federal courts are courts of limited jurisdiction and must have “statutory or constitutional
power to adjudicate the case.” Home Builders Ass’n of Miss. v. City of Madison, 143 F.3d 1006,
1010 (5th Cir. 1998). Under the Constitution’s Article III cases and controversies requirement, a
plaintiff must establish standing to sue. 	Standing requires: (1) an injury in fact, (2) a sufficient
1 Unless otherwise cited, the Court’s recitation of the facts is taken from the Parties’ summary judgment
briefing.
2 Compl. ¶ 69, ECF No. 1.
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“causal connection between the injury and the conduct complained of” and (3) a likelihood that
the injury will be redressed by a favorable decision. Morgan v. Huntington Ingalls, Inc., 879 F.3d
602, 606 (5th Cir. 2018) (quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–61 (1992); U.S.
CONST. art. III, § 2. The injury must be concrete and particularized, not merely “conjectural or
hypothetical.” Summers v. Earth Island Inst., 555 U.S. 488, 493 (2009). 	A “‘threatened injury
must be certainly impending to constitute [an] injury in fact,’ and . . . ‘[a]llegations of possible
future injury’ are not sufficient.” Clapper v. Amnesty Int’l USA, 568 U.S. 398, 409 (2013) (quoting
Whitmore v. Arkansas, 495 U.S. 149, 158 (1990)).
The party invoking federal jurisdiction bears the burden of establishing the elements of
standing. Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001). Because “standing is not
dispensed in gross,” “plaintiffs must demonstrate standing for each claim that they press and for
each form of relief that they seek (for example, injunctive relief and damages).” Perez v. McCreary,
Veselka, Bragg & Allen, P.C., 45 F.4th 816, 821 (5th Cir. 2022) (citing TransUnion, 994 U.S. at
431). At the summary judgment stage, a plaintiff cannot rest on “mere allegations, but must set
forth by affidavit or other evidence specific facts” to demonstrate standing. Lujan, 504 U.S. at 561
(citations and quotation marks omitted).
B. Motion for Summary Judgment
The Court should grant summary judgment where the pleadings and evidence show that
there is “no genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law.” FED. R. CIV. P. 56(a). Summary judgment is not “a disfavored procedural shortcut,”
but rather an “integral part of the Federal Rules as a whole, which are designed to secure the just,
speedy and inexpensive determination of every action.” Celotex Corp. v. Catrett, 477 U.S. 317,
327 (1986) (internal quotation marks omitted).
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“[T]he substantive law will identify which facts are material.” Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). A genuine dispute as to any material fact exists “if the evidence is
such that a reasonable jury could return a verdict for the nonmoving party.” Id. The movant must
inform the court of the basis of its motion and demonstrate from the record that no genuine dispute
as to any material fact exists. 	See Celotex, 477 U.S. at 323. “The party opposing summary
judgment is required to identify specific evidence in the record and to articulate the precise manner
in which that evidence supports his or her claim.” Ragas v. Tenn. Gas Pipeline Co., 136 F.3d 455,
458 (5th Cir. 1998). For an affidavit to meet the summary judgment burden, it must be more than
conclusory. Lujan, 504 U.S. at 888; First Colony Life Ins. Co. v. Sanford, 555 F.3d 177, 181 (5th
Cir. 2009); FED. R. CIV. P. 56(e)(2).
When reviewing the evidence on a motion for summary judgment, the Court must resolve
all reasonable doubts and draw all reasonable inferences in the light most favorable to the non-
movant. See Walker v. Sears, Roebuck & Co., 853 F.2d 355, 358 (5th Cir. 1988). If there is no
support for disputed allegations such that “reasonable minds could differ as to the import of the
evidence,” the Court will grant the motion. Anderson, 477 U.S. at 250.
III. 	ANALYSIS
Plaintiff does not have standing for either claim because it fails to “set forth . . . specific
facts” showing it experienced an increased regulatory burden necessary to demonstrate an injury
in fact. Lujan, 504 U.S. at 561 (citations and quotation marks omitted); see also Nat’l Credit Union
Admin. v. First Nat’l Bank & Trust Co., 522 U.S. 479, 488 (1998) (standing for APA claims requires
showing that a plaintiff has suffered or will suffer an injury-in-fact).
An injury-in-fact must be “‘concrete’—that is, ‘real, and not abstract.’” TransUnion LLC
v. Ramirez, 594 U.S. 413, 424 (2021) (quoting Spokeo, Inc. v. Robins, 578 U.S. 330, 340 (2016)).
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“An injury in fact can be a physical injury, a monetary injury, an injury to one’s property, or an
injury to one’s constitutional rights, to take just a few common examples.” Food & Drug Admin.
v. All. for Hippocratic Med., 602 U.S. 367, 381, (2024). 	“When a plaintiff is the ‘object’ of a
government regulation, there should ‘ordinarily’ be ‘little question’ that the regulation causes
injury to the plaintiff and that invalidating the regulation would redress the plaintiff's injuries.”
Diamond Alternative Energy, LLC v. Env’t Prot. Agency, 606 U.S. 100, 114 (2025) (quoting Lujan,
504 U.S. at 561). A party is an object of regulation when it suffers an “increased regulatory burden”
because of the regulation. Contender Farms, L.L.P. v. U.S. Dep’t of Agric., 779 F.3d 258, 264 (5th
Cir. 2015); see, e.g. Burnett Specialists v. Cowen, 140 F.4th 686 (2025); c.f. All. for Hippocratic
Med., 602 U.S. at 382.
A. Final Action Excluding Sodium Thiosulfate
Here, Plaintiff—an outsourcing facility—argues it is an object of the regulation because
“Plaintiff would be permitted to compound [sodium thiosulfate] from the bulk drug substance”3 in
the absence of the FDA’s rule. Lujan, 504 U.S. at 561. This is not enough to demonstrate standing:
“[e]ven if it could be said that the [FDA rules] ‘directly’ regulate the organizations, that does not
ipso facto establish injury.” La Union Del Pueblo Entero v. Abbott, 151 F.4th 273, 287 (5th Cir.
2025). A plaintiff “must still show an actual or imminent injury caused by that regulation.” Id,
citing All. for Hippocratic Med., 602 U.S. at 382. 	Thus, being in the category of those whom the
regulation could impact is not enough to show one has suffered injury in fact: rather, the party
must face an increased regulatory burden. See Purl v. United States Dep’t of Health & Hum. Servs.,
787 F. Supp. 3d 284, 303 (N.D. Tex. 2025) (the “true inquiry” for standing is “whether Plaintiffs
are objects of [a rule] that, if vacated, will no longer present a regulatory burden”); Texas v. EEOC,
3 Pl.’s Reply 4, ECF No. 68.
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933 F.3d 433, 446 (5th Cir. 2019) (“Because it is the object of the Guidance and has suffered
multiple injuries as a result, Texas has constitutional standing”) (emphasis added). 	Increased
regulatory burdens include compliance costs, necessary alterations in operation procedures, lost
profits, or threat of enforcement actions. Id.
To show it is subject to an increased regulatory burden, Plaintiff must prove more than that
it compounds drugs. Alliance for Hippocratic Medicine is instructive. There, the Supreme Court
held that doctors who did “not prescribe, manufacture, [compound], sell, or advertise [a substance]
or sponsor a competing drug” did not suffer injury to challenge an FDA rule regulating of the
mifepristone drug. All. for Hippocratic Med., 602 U.S. at 385–86.
The summary judgment evidence shows Plaintiff does not compound this substance, nor
has a facility capable of doing so.4 Plaintiff does not allege “downstream or upstream economic
injuries” that can suffice for third-party standing. 	Id. at 384 (listing cases exemplifying such
injuries).
Plaintiff argues that Contender Farm supports its position that it is an object of the
regulation. 779 F.3d 258. In that case, the plaintiff had standing to challenge a regulation over
soring horses even though plaintiff did not plan to sore horses. But there, the plaintiff had to take
“additional measures to avoid even the appearance of soring” because they competed in the type
of events that were regulated, and thus horses would undergo the sore horse inspections required
by the regulation. Id. at 266. The Fifth Circuit also observed that plaintiff “could not earn a living
nor compete recreationally without participating in these types of events.” Id.
4 Dan DeNeui Supp. Decl. ¶¶ 4, 6–7, ECF No. 68-1. While the declaration says that Plaintiff is operated
by executives who run commonly owned companies that have the ability to produce sodium thiosulfate,
Plaintiff itself does not.
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Neither concern is present in this case. Plaintiff does not manufacture the drug, nor does
it engage in “aqueous compounding [that] use[s] the same general processes and equipment”5
needed to compound sodium thiosulfate. 	Since it does not currently manufacture the drug or
similarly compounded aqueous compounds, it does not engage in the type of activity that subjects
it to the regulation for enforcement risks, nor does not show a need to change its operating
procedures to prevent prosecution—unlike the plaintiff in Contender Farms. 	Further, Plaintiff
does not need to produce sodium thiosulfate or aqueous solutions to sustain its business, unlike the
plaintiff in Contender Farms who had to engage in regulated activity to compete. 779 F.3d at 266.
For Plaintiff’s comparison to prevail, the Contender case would have had to hold that anyone who
competed in any shows could have standing. That argument goes too far. 	Because Plaintiff’s
regulatory burden remains unchanged, it cannot show it has suffered an injury.
Plaintiff contends it nevertheless has standing because it submitted an affidavit saying that
the regulation imposes a chilling effect: that is, the FDA’s exclusion causes them to refrain from
making sodium thiosulfate.6 Plaintiff further asserts that expressing “an intent to engage in the
relevant action is sufficient” for standing.7 This misstates the law. Rather, showing an intent to
engage in conduct supports standing only when there “is a constitutional harm adequate to satisfy
the injury-in-fact requirement.” Houston Chron. Pub. Co. v. City of League City, Tex., 488 F.3d
613, 618 (5th Cir. 2007) (constitutional harm in the First Amendment context is refraining from
exercising your rights); see also Susan B. Anthony List v. Driehaus, 573 U.S. 149, 159 (2014) (“a
plaintiff satisfies the injury-in-fact requirement where he alleges an intention to engage in a course
5 Id.
6 Pl.’s Reply 4, ECF No. 68; DeNeui Supp. Decl. DeNeui ¶ 8, ECF No. 68-1 (“[i]f compounding sodium
thiosulfate became lawful, ‘then [Plaintiff] would make the investment to do it,’ but has not already done
so because it does not invest money in illegal activity”).
7 Pl.’s Reply 4, ECF No. 68.
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of conduct arguably affected with a constitutional interest” (internal quotation omitted) (emphasis
added); 	see 	also 	Tennessee 	v. 	Lane, 	541 	U.S. 	509, 	522–23 	(2004) 	(“infringements 	of”
“constitutional guarantees” are “subject to more searching judicial review”).
The cases Plaintiff cites, Gratz v. Bollinger and Larsen v. U.S. Navy, do not support his
broader assertion. 539 U.S. 244, 261 (2003); 486 F. Supp. 2d 11, 21 (D.D.C. 2007). These cases
concern the constitutional right of equal treatment. See Larsen, 486 F. Supp. 2d at 17 (plaintiffs
argue the Navy’s polices “violate the First and Fifth Amendments”); see also Gratz, 539 U.S. at
261 (“intent may be relevant to standing in an equal protection challenge”) (emphasis added).
Equal protection claims vindicate the constitutional “injury [that] is the denial of equal treatment
resulting from the imposition of the barrier.” Nuziard v. Minority Bus. Dev. Agency, 676 F. Supp.
3d 473, 479 (N.D. Tex. 2023) (quoting Ne. Fla. Ch. of the Assoc. Gen. Contractors of Am. v. City
of Jacksonville, Fla., 508 U.S. 656, 666 (1993)). No such constitutional injury exists here, where
Plaintiff would be treated the same as compounding facilities producing the substance if it chose
to do so.
Furthermore, the Fifth Circuit expressly limits chilling effect for standing to the First
Amendment context. See La Union Del Pueblo Entero, 151 F.4th at 286 (“‘Chilling’ is sometimes
sufficient for standing in the First Amendment context, but plaintiffs assert no First Amendment
claim”); see also Pool v. City of Houston, 978 F.3d 307, 311 (5th Cir. 2020) (chilling effect is a
“special standing rule for First Amendment cases recogniz[ing] that people should not have to
expose themselves to actual arrest or prosecution in order to challenge a law that infringes on
speech”) (emphasis added) (cleaned up). Plaintiff fails the first and third prong of this test.
Plaintiff fails to meet the first prong because, as explained above, manufacturing sodium
thiosulfate does not implicate a constitutional interest. Plaintiff also fails the third prong because
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it does not allege any facts showing “there exists a credible threat of prosecution.” 	Susan B.
Anthony List, 573 U.S. at 160; La Union Del Pueblo Entero, 151 F.4th at 286. Plaintiff does not
currently make sodium thiosulfate and alleged no facts demonstrating that it would face an
enforcement action were it to do so.
Additionally, the affidavit demonstrates only conclusory intent to participate in conduct
proscribed by the statute. Even if demonstrating an intent to engage in the activity were sufficient,
(which it is not), any affidavit must point to specific facts: “[c]onclusory allegations of an affidavit”
cannot create a fact issue to raise a genuine dispute of material fact for summary judgment. Lujan,
504 U.S. at 888; First Colony Life Ins. Co., 555 F.3d at 181; see also FED. R. CIV. P. 56(e)(2)
(requiring affidavits to set forth facts that would be admissible in evidence). 	Plaintiff asserts
nothing more than “[i]f compounding sodium thiosulfate became lawful, “then [Plaintiff] would
make the investment to do it.” Plaintiff has not provided any factual bases to show concrete intent
such as a facility site for building the equipment it would take to manufacture sodium thiosulfate,
or monetary estimates for an investment to make such an investment. Thus, even if intent to engage
in activity without constitutional implications were enough, the declaration is too conclusory to
support standing at summary judgment. First Colony Life Ins. Co., 555 F.3d at 181.
B. Unreasonable Delay in Completing the Bulk Substances List
Plaintiff does not have standing for its unreasonable delay claim for the same reason it
cannot challenge the final action excluding sodium thiosulfate: it does not provide any evidence
of an injury-in-fact. Plaintiff contends that it “would benefit in a concrete manner if FDA
completed the Bulk List and named all bulk drug substances for which there is a clinical need.”8
This statement is insufficient to show an injury as it is (1) conclusory and (2) demonstrates Plaintiff
8 DeNeui Decl. ¶ 10, ECF No. 44.
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only has a “policy concern[] [that] do[es] not suffice on [its] own to confer Article III standing.”
All. for Hippocratic Med., 602 U.S. at 386; see also ViroPharma, Inc. v. Hamburg, 777 F. Supp.
2d 140, 147 (D.D.C. 2011); Lujan, 504 U.S. at 888; see also FED. R. CIV. P. 56(e)(2).
Plaintiff nevertheless tries to claim it has standing because the FDA could bring an
enforcement suit against it for creating “compounds with bulk drug substances listed by FDA as
qualifying for its policy of enforcement discretion (including estradiol, testosterone, and
triamcinolone acetonide).”9 This fails for two reasons.
First, as explained supra, the Fifth Circuit only recognizes pre-enforcement challenges to
rules in the First Amendment context. Plaintiff admits that there is no enforcement action against
it, nor does it allege facts showing such an action is imminent. Accordingly, there is no controversy
ripe for adjudication. Texas State LULA, 52 F.4th at 257.
Second, the declaration from Plaintiff’s CEO Dan DeNeui (“DeNeui”) alleging that
Plaintiff makes these substances is “internally inconsistent [and] self-contradictory,” meaning
Plaintiff cannot use it to meet its summary judgment burden. 	Matter of Highland Cap. Mgmt.,
L.P., 116 F.4th 422, 433 (5th Cir. 2024). 	A few paragraphs prior to his assertion that Plaintiff
illegally manufactures the other substances, DeNeui says that Plaintiff “complies with Section
503B and all other applicable laws”10 and “does not invest money in illegal activity.”11 Because
compounding these substances is illegal and not in compliance with Section 503B, his affidavit is
“internally inconsistent” and cannot satisfy summary judgment evidence. Matter of Highland Cap.
Mgmt., L.P., 116 F.4th at 433. Plaintiff provides no further evidence.
9 DeNeui Decl. ¶ 9, ECF No. 44.
10 DeNeui Decl. ¶ 6, ECF No. 44.
11 DeNeui Supp. Decl. ¶ 8, ECF No. 68-1.
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Because Plaintiff does not have standing to bring either of its claims, the Court does not
reach the arguments on the merits. Cook v. Reno, 74 F.3d 97, 99 (5th Cir. 1996) (if jurisdiction is
lacking, then the court has no authority to consider the merits); accord Mackenzie v. Air Line Pilots
Ass’n, Int’l, 598 F. App’x 223, 226 (5th Cir. 2014).
IV. 	CONCLUSION
Plaintiff’s regulatory burden is the same regardless of the regulations on sodium
thiosulfate, meaning they do not suffer an injury in fact. La Union Del Pueblo Entero, 151 F.4th
at 287; All. for Hippocratic Med., 602 U.S. at 382. Because Plaintiff did not demonstrate an injury
in fact, it does not have standing to pursue either of its claims. Accordingly, the Court GRANTS
summary judgment for the Defendant and DENIES Plaintiff’s Motion for Summary Judgment.
SO ORDERED this 5th day of March 2026.
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