September 9, 2009 webinar sponsored by The Weinberg Group, with a focus on FDA's renewed commitment to enforcement announced by FDA Commissioner Hamburg on August 6, 2009, with a focus on:
Enforcement Trends Prior to Obama Administration
Commissioner Hamburg Revives FDA’s Compliance
Culture – The August 6, 2009 Speech and its Impact
How to Prepare for Increased Enforcement
How to Respond if Targeted
Consequences of Non-Compliance
FDA’s New Strategy on Enforcement: The Growing Perils of Inadequate Compliance
1. FDA’s New Strategy on Enforcement: The
Growing Perils of Inadequate Compliance
Presented by:
Michael A. Swit, Esq., Vice President
Matthew R. Weinberg, CEO
Moderated by:
Jeff Antos, Vice President
September 9, 2009
2. Today's Presenters
Michael A. Swit, Esq.
Vice President
Encinitas, CA
+1 760.633.3343
michael.swit@weinberggroup.com
Mr. Swit has been addressing critical FDA legal and regulatory issues since
1984. His expertise includes product development strategies, compliance
and enforcement initiatives, recalls and crisis management, FDA regulatory
activities, labeling and advertising, and clinical research efforts. Mr. Swit
develops and ensures the execution of a broad array of regulatory and
other services to clients, both directly and through outside counsel.
Matthew R. Weinberg
CEO
Washington, DC
+1 202.833.8077
matthew.weinberg@weinberggroup.com
Matthew Weinberg is Chief Executive Officer at The Weinberg Group,
an international scientific and regulatory consulting firm. Mr. Weinberg’s
area of expertise is in compliance and quality management, with an
emphasis on providing strategic and operational assistance. He helps
clients improve their manufacturing processes and serves as a testifying
expert on compliance-related matters.
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3. What We Will Cover
Enforcement Trends Prior to Obama Administration
Commissioner Hamburg Revives FDA’s Compliance
Culture – The August 6, 2009 Speech and its Impact
How to Prepare for Increased Enforcement
How to Respond if Targeted
Consequences of Non-Compliance
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9. Hamburg: Why We Need
Effective FDA Enforcement
Conceded FDA enforcement efforts have been deficient
Five key benefits of effective enforcement:
Protect public health by promptly intercepting unsafe or
fraudulent products – prevents additional harm
Deter others who might violate law
Informs public of potential harm
Creates level playing field for industry
Instill public confidence in FDA
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10. Vigilance – both FDA and Industry
FDA – Regular inspections and follow-ups
Companies
Must work quickly and thoroughly to correct problems
Must understand
if you cross the line, “you will be caught”
If you fail to act, FDA will
Strategic enforcement –
Greater focus on significant risks and violations
More meaningful penalties to “send a strong message to
discourage future offenses”
Hamburg: Four Essential Elements for
Effective FDA Enforcement
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11. Four Essential Elements for
Effective Enforcement …
Quick action – FDA must respond rapidly, especially to:
Egregious violations
Violations that threaten the public health
Visible efforts – FDA must show all stakeholders it is on
the job
Will publicize enforcement actions widely – including rationales
for action
Goal:
Increase confidence in FDA
Deter non-compliance
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12. Hamburg: Six New FDA
Enforcement Mandates
Impose clear post-inspection deadlines
Generally – no more than 15 business days to respond 483
After that, agency can issue warning letter or take other
enforcement action
Speed the warning letter process – by limiting review
by FDA Office of Chief Counsel to warning letters that
present significant legal issues
Work more closely with FDA’s regulatory partners
Example: in some cases, such as food safety, state, local, and
international officials can act more quickly than the FDA
When public health is at risk, the agency will coordinate with
its regulatory partners to take rapid action
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13. Six New Enforcement Mandates …
Prioritize follow-up on all warning letters and other
enforcement actions
FDA will work quickly to assess the corrective action taken by industry
after a warning letter, a major product recall, or other enforcement action
Via new inspection or other form of investigation
FDA will be prepared to take immediate action to respond to
public health risks
Actions may occur before a formal warning letter is issued – at any time
Days of multiple responses to inspections – over
Develop and implement a formal warning letter “close-out”
process
If FDA determines a firm fully corrected violations in a warning letter,
agency will issue an official “close-out” notice and post on FDA Web site
Seen as an “important motivator” for corrective action
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14. Enhanced Enforcement In Action –
Timely 483 Responses Policy
Aug. 11 Federal Register notice – Post-inspection 483 responses
timing policy published – 15 business days
Timely Responses
FDA will conduct “detailed review” in deciding any enforcement action
If FDA issues a warning letter, letter will address sufficiency of response
Late responses
Response will not be considered by FDA in deciding to take enforcement
action such as a warning letter
If warning letter issues after a late 483 response, FDA will consider the 483
response in assessing firm’s later reply to warning letter
Purpose of warning letter: “to ensure that the seriousness and
scope of the violations are understood by top management … and
that the appropriate resources are allocated to fully correct the
violations and prevent their recurrence”
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15. Enhanced Enforcement – In Action
KV – March 2009 – GMP consent decree four weeks
after inspection
H1N1 Websites – May 2009 -- 68 Warning Letters –
response time shortened to 48 hours due to the public
health aspects
Caraco – June 2009 -- seizure six weeks after inspection
Major import alert – coming – Washington Drug Letter,
8/31/09
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16. Enhanced Enforcement –
The International Stance
FDA to double foreign GMP inspections
Focus: GMP inspections, not inspections linked to
applications
Result: Look for more import alerts
FDA can impose alert based on just an “appearance” of a violation
Contrast: formal U.S. enforcement such as seizure, injunction or
prosecution, FDA must prove a violation
“FDA Without Borders” Initiative
Offshoot of Heparin and other scandals
FDA foreign offices opened: Brussels; Mumbai; New Delhi;
San Jose, Costa Rica; Beijing, Shanghai and Guangzhou, China
Additional planned FDA offices: Mexico City, Middle East
(site TBD)
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17. How to Prepare for
The New Enforcement Climate
The Big Picture
Compliance Culture – must exist at the top of your
organization and be driven down by senior management
throughout your firm not only in word, but in resources
FDA law requires – “Park Doctrine” – Strict Liability
Corporate law requires
Public company duties/Sarbanes-Oxley compliance
Best strategy to “avoid” enforcement – strict compliance
via robust “quality systems” in all impacted areas – quality,
regulatory, manufacturing, packaging, testing, etc.
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18. How to Prepare …
Change Your Corporate Compliance World View
Oust the Reactionary Compliance Model
Historical focus – always after-the-fact
Expense focus creates little incentive for forward thinking
Compliance generally seen as production cost
Rarely seen as a revenue-generating opportunity
Viewed as lower priority within an organization
Perceived as a burden – a leash with little up side potential
Embrace Compliance As a Corporate Asset
Corporate culture must change
Quality Systems must be integrated into the process, not an
additional component
Process must evolve from one of police action to one of
forethought
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19. How to Prepare …
Culture Change – Dramatic And Difficult
Quality function must be valued by management
Increase visibility of quality unit
Visibly exhibit an intolerance for lack of compliance
Quality must be seen as a priority
Embrace a Proactive Approach
“It is often said at FDA that firms that are in compliance tend
to stay in compliance, but once a firm gets out of compliance
getting back into compliance is a very steep road to climb. Try
to avoid that road.” – Daniel Troy, former FDA Chief Counsel
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20. How to Prepare …
Build The Right Quality Systems
Create a self-determining culture
Make regulatory mandates obvious and routine, not the focus
Use Quality Assurance as a cost-improvement methodology
Proactive Approach To Increasing Profitability
Approach facilities and operations inspections proactively
Use third parties
Assess all business operations
Act on things immediately
Change focus from compliance to improvement – that
compliance is subset of quality
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21. How to Prepare …
Detailed view – quality systems throughout your
organization that reflect strong:
Procedures
Training
Audits
Validation
Recordkeeping
Key SOPS
Handling FDA Inspections
CAPA
Investigations
Recalls
Audit Plans
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22. When FDA Enforcement Hits
How it may hit
Administrative Enforcement
Inspections
Investigations
Warning letter
Clinical Holds – can be compliance-based
AIP
Termination of an IND or IDE
Disqualification procedures with clinical investigators
Recalls and market withdrawals
Civil Money Penalties
Judicial Enforcement
Seizure of test articles
Disgorgement
Injunction
Criminal Prosecution
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23. When FDA Enforcement Hits …
Who FDA Can Target: any individual within the
company that has a position of responsibility for the
violative aspect of the company’s operation,
including:
President/CEO/COO
General Counsel
VP or Director of QA, QC, RA, Mfg., etc.
Managers
Technicians (rare)
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24. When FDA Enforcement Hits – Assessing
Assess each allegation/observation
Focus on specifics
Focus on system-wide implications
Focus on global implications
Consider affected products
Consider root-cause analysis
Focus on the regulatory requirement(s) associated
with each allegation/observation
Develop action plan to achieve immediate, short-term,
and long-term correction and to prevent recurrence
Know when to seek outside assistance
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25. When Enforcement Hits –
Keys to Responding
Include a commitment/statement from senior leadership
Address each allegation/observation separately
State whether you agree or disagree with the
allegation/observation
Provide corrective action accomplished and/or planned;
tell FDA the plan
Be specific (e.g. observation-by-observation)
Be complete
Be realistic
Be able to deliver what you promise
Address affected products
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26. When Enforcement Hits –
Keys to Responding …
Provide time frames for correction
Describe method of verification and/or monitoring for
corrections
Submitting documentation of corrections where
reasonable & feasible
Be timely and thorough – deliver what you promised
when you promised it
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27. FDA Expectations for Your Response
Wants to Hear Your D.R.U.M. – expects your
response to have these qualities:
Direct – i.e., address the items directly raised in the 483 or
warning letter
Related – go beyond those to potentially related problems
Universal – expand to review those issues company-wide
Management & Monitoring – show that you will stay on
top of the issues and that management is involved
Source: “Compliance and Enforcement.” Presentation by David K.
Elder, Director, FDA Office of Enforcement, at the Orange County
Regulatory Affairs (OCRA)/FDA Joint Educational Conference. June
15, 2005. Irvine, California.
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28. Direct Possible Consequences
of Non-Compliance
Clinical holds – study stopped
AIP – application reviews suspended
Import Alerts – product can’t be imported into U.S.
Civil Money Penalties – $$$
Seizures – product can’t be sold
Injunctions – selling/manufacturing could be halted for years
Disgorgement – $$$ returned for “ill-gotten gains”
Prosecutions
Fines – $$$
Imprisonment
Disqualification proceedings
Approval withdrawal proceedings
Expense of dealing with FDA action – lawyers, consultants,
experts 28
29. Collateral Consequences
of Non-Compliance
Financial consequences
Lost sales
Stock price drops – market capitalization – ability to use capital
markets
Shareholders sue the company, its officers and directors
Other companies may sue the company if reason for non-
compliance gave you a competitive edge
Federal government may suspend or “debar” company from
selling to government
“Qui Tam” actions under the False Claims Act – e.g., Lupron &
Neurontin cases – “whistle blower” cases – leading to civil
damages and may also spawn a criminal prosecution
Financing covenants may be violated
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30. Collateral Consequences of
Non-Compliance …
Other Consequences
State license actions – could pull your manufacturing license
Lay-offs
Damage to corporate reputation
Lost time – interruption with normal operations
Consequences for Individuals
Job loss
Reputation
Expense of defending – and your company may not have to pay
Impact of convictions
Deportation if not U.S. citizen
Imprisonment
Fine
Right to vote/run for public office
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