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Presentation on Critical Legal Issues Facing GMP Compliance

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August 27, 2018 Presentation to the 23rd Annual GMP by the Sea Conference in Cambridge, Maryland, focusing on the potential legal consequences faced by companies that violate FDA's requirements on Good Manufacturing Practices (GMPs) for drugs and biologics

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Presentation on Critical Legal Issues Facing GMP Compliance

  1. 1. Solving FDA Legal Challenges for the Life of a Life Sciences Company -1- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Critical Legal Issues Facing GMP Compliance 23rd Annual GMP By The Sea August 27, 2018 Cambridge, Maryland Michael A. Swit, Esq. Managing Principal
  2. 2. Solving FDA Legal Challenges for the Life of a Life Sciences Company -2- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Standard Disclaimers • Views expressed here are solely mine and do not reflect those of my firm or any of its clients. • This presentation supports an oral briefing and should not be relied upon solely on its own to support any conclusion of law or fact. • These slides are intended to provide general educational information and are not intended to convey legal advice.
  3. 3. Solving FDA Legal Challenges for the Life of a Life Sciences Company -3- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT What We Will Cover • Violations – How GMP/Quality Issues Violate the Food, Drug, and Cosmetic Act • FDA Administrative Powers • Judicial Enforcement – When FDA Takes You to Court • Collateral Consequences of GMP Violations – Individuals – Companies
  4. 4. Solving FDA Legal Challenges for the Life of a Life Sciences Company -4- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Violations
  5. 5. Solving FDA Legal Challenges for the Life of a Life Sciences Company -5- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Statutory Drug Manufacturing Violations • Adulteration violations -- § 501 of the Act – (a)(1) -- “consists in whole or in part of any filthy, putrid, or decomposed substance” – (a)(2)(A) -- “been prepared, packed, or held under insanitary conditions whereby it may have been contaminated with filth, or whereby it may have been rendered injurious to health” – (a)(2)(B) -- GMP violation … – (b) – does not conform to an official compendium as far as strength, quality, or purity – (j) If it is a drug and it has been manufactured, processed, packed, or held in any factory, warehouse, or establishment and the owner, operator, or agent of such factory, warehouse, or establishment delays, denies, or limits an inspection, or refuses to permit entry or inspection.’’
  6. 6. Solving FDA Legal Challenges for the Life of a Life Sciences Company -6- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Statutory Drug Manufacturing Violations • Misbranding violations -- § 502 of the Act – (o) DRUGS OR DEVICES FROM NONREGISTERED ESTABLISHMENTS If it was manufactured, prepared, propagated, compounded, or processed in an establishment not duly registered under section 360 of this title, if it is a drug and was imported or offered for import by a commercial importer of drugs not duly registered under section 381(s) of this title, if it was not included in a list required by section 360(j) of this title, … – (aa) UNPAID FEES; FAILURE TO SUBMIT IDENTIFYING INFORMATION If it is a drug, or an active pharmaceutical ingredient, and it was manufactured, prepared, propagated, compounded, or processed in a facility for which fees have not been paid as required by section 379j– 42(a)(4) [i.e., a generic drug facility fee] of this title or for which identifying information required by section 379j–42(f) of this title has not been submitted, or it contains an active pharmaceutical ingredient that was manufactured, prepared, propagated, compounded, or processed in such a facility.
  7. 7. Solving FDA Legal Challenges for the Life of a Life Sciences Company -7- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Statutory Drug Manufacturing Violations • Prohibited Acts under § 301 of the Act (a) introduction or delivery into interstate commerce (“IC”)of adulterated or misbranded drug (b)adulterating a drug in IC (c) receipt in IC of an adulterated or misbranded drug and “the delivery or proffered delivery thereof for pay or otherwise” (e) refusal to permit access to or copying of any record as required by section … 704(a) (f) refusal to permit entry or inspection [under] Section 704 (g) manufacturing … any … drug … that is adulterated or misbranded (p) failure to register … or provide any information (i.e. list) under § 510
  8. 8. Solving FDA Legal Challenges for the Life of a Life Sciences Company -8- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT FDA Administrative Enforcement Powers
  9. 9. Solving FDA Legal Challenges for the Life of a Life Sciences Company -9- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT The Inspection • Inspections --- leading to the “483” – Planned and conducted pursuant to FDA annual plan or center compliance program – Pre-approval – “For cause” (e.g., public health crisis due to defective or contaminated FDA-regulated product; follow up to 483 response) – Government-wide Quality Assurance Program • FDA may inspect at the request of the DoD or VA to determine, for example, whether a company bidding on a government contract is in compliance with GMPs and otherwise in compliance with the FDCA
  10. 10. Solving FDA Legal Challenges for the Life of a Life Sciences Company -10- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Inspections … • Combination or joint inspections (EPA, OSHA, or a state food and drug regulatory body) • Consumer, trade, and other complaints • Adverse product effect reports • Congressionally inspired
  11. 11. Solving FDA Legal Challenges for the Life of a Life Sciences Company -11- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Timely 483 Responses Policy • Aug. 11, 2009 -- 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
  12. 12. Solving FDA Legal Challenges for the Life of a Life Sciences Company -12- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Timely 483 Responses Policy … • 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
  13. 13. Solving FDA Legal Challenges for the Life of a Life Sciences Company -13- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Warning Letters • Warning Letters – addressed to CEOs/other executives; FDA’s effort to get executive buy-in on necessary fixes which, in past, is sabotaged if corporate bureaucracy, which sends the letter back down to the person with knowledge of the specifics – but – • Purpose of Warning Letter: – “ensure … 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” • August 11, 2009 Federal Register [HOT LINK]
  14. 14. Solving FDA Legal Challenges for the Life of a Life Sciences Company -14- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Warning Letters … • Faster warning letter process – FDA Office of Chief Counsel only to review warning letters that present significant legal issues • 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
  15. 15. Solving FDA Legal Challenges for the Life of a Life Sciences Company -15- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT FDA Expectation on Your 483/WL 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 – Monitoring and Management – • show that you will stay on top of the issues • show that senior 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.
  16. 16. Solving FDA Legal Challenges for the Life of a Life Sciences Company -16- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Other Administrative Enforcement Tools • Clinical hold • Withdrawal or suspension of marketing permit • Recall (FDA-requested or “voluntary”) • Import detention or refusal • Application Integrity Program (AIP) – FDA declines to review your applications – can be the FDA “death sentence” – has not been applied since 2011
  17. 17. Solving FDA Legal Challenges for the Life of a Life Sciences Company -17- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT ➢ Ranbaxy – – GMP issues at two facilities in India that produce drugs under approved ANDAs – At least 30 different drugs impacted – Consent decree – January 2012 – unprecedented audit process – May 2013 -- $500 million criminal and civil fines ➢ Apotex – – GMP issues at two facilities in Canada that produce drugs under approved ANDAs – At least 60 different drugs impacted – Lifted by July 2011 Import Alerts – Apotex & Ranbaxy
  18. 18. Solving FDA Legal Challenges for the Life of a Life Sciences Company -18- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT ➢ The AIP – Application Integrity Program – barred from getting submissions reviewed at FDA – Suspected fraud or rampant sloppiness as to ➢ To get off the list – Audits – focusing on roots of fraud allegations – Full cooperation with FDA and other investigatory bodies (e.g., DOJ) – Re-inspections ➢ Ranbaxy – still on it; but now covered by consent decree Application Integrity -- Ranbaxy
  19. 19. Solving FDA Legal Challenges for the Life of a Life Sciences Company -19- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT FDA Policies on GMPs • CPG Sec. 400.200 Consistent Application of CGMP Determinations – POLICY: • CGMP deficiencies supporting a regulatory action also support decisions regarding non-approval of drug marketing applications, government purchasing contracts, candidates for MAC, etc. Therefore, the issuance of a *warning* letter or initiation of other regulatory action based upon CGMP deficiencies must be accompanied by disapproval of any pending drug marketing application, or government contract for a product produced under the same deficiencies. • Similarly, disapproval of any drug marketing application, government contract, etc., based upon CGMP deficiencies must be accompanied by regulatory and/or administrative action against any other product produced under the same conditions. [Emphasis added]
  20. 20. Solving FDA Legal Challenges for the Life of a Life Sciences Company -20- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT The Pen Is Mightier Than The Sword: Adverse Publicity • FDA Website • Press release • Talk paper • Press conference/television and radio interview • Speeches • Congressional and other testimony • Articles in scientific, professional and lay publications
  21. 21. Solving FDA Legal Challenges for the Life of a Life Sciences Company -21- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Publicity as an Enforcement Tool?
  22. 22. Solving FDA Legal Challenges for the Life of a Life Sciences Company -22- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Judicial Enforcement – FDA Goes to Court
  23. 23. Solving FDA Legal Challenges for the Life of a Life Sciences Company -23- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Seizure • Civil action – Technically, is against the goods themselves – Owner or others with interest must intervene to defend the goods • If do, then trial on merits of alleged violations – Lose – goods usually destroyed, but may be reconditioned if possible – Win – goods go free – Logistically – fastest judicial remedy
  24. 24. Solving FDA Legal Challenges for the Life of a Life Sciences Company -24- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT GMP Seizure • Caraco – 2009 – Complaint – All drugs made at 3 facilities – Eventually led to a consent decree (to be discussed) – Initiated a month after an inspection
  25. 25. Solving FDA Legal Challenges for the Life of a Life Sciences Company -25- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Injunction • Action to either: – Compel compliance – Prevent future violations • Personal against individuals or corporations • Can result in an order that will involve tremendous allocation of resources over a long period of time to address
  26. 26. Solving FDA Legal Challenges for the Life of a Life Sciences Company -26- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT The Barr Case • 1993 -- seminal case construing drug GMP provisions https://law.justia.com/cases/federal/district- courts/FSupp/812/458/1762275/ • The Decision – key points – 3 types of out-of-specifications results seen (Finding 19 or “F-19)): • laboratory error • non-process related – operator error • process-related – manufacturing error – Goal of GMP failure investigation – to determine what type of error occurred; “degree of inquiry may vary with object under investigation” (F-24)
  27. 27. Solving FDA Legal Challenges for the Life of a Life Sciences Company -27- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT The Barr Case • Contents of a failure investigation (F-30) … – reason for investigation – summarize the process steps that may have caused the problem – outline corrective actions needed to save the batch (if possible) and prevent recurrence – list other batches and products possibly affected and results of their investigations – preserve comments and signatures of all production and quality personnel involved – Timing: court -- should be done within 30 business days of occurrence (F-32) • Outlier testing – most appropriate for biologics and antibiotics; rarely for chemical drugs (F-35) – should not be used to invalidate content uniformity testing (O-4)
  28. 28. Solving FDA Legal Challenges for the Life of a Life Sciences Company -28- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT The Barr Case • Retesting – only appropriate after an investigation begins (F-38) – necessary if investigation indicates lab analyst error caused initial OOS results or review of analyst’s work is inconclusive (F-38) – inappropriate if the error is viewed as “non-process” (i.e., production operator) or “process” (i.e., the manufacturing instructions themselves) related – how much retesting can be done is a matter of scientific judgment (F-40), but cannot continue ad infinitum (F-41). • Rather, testing SOP should contain a (justified) point where retesting is cut off and batch is rejected (F-41) • Resampling – appropriate if allowed by USP or if investigation suggests original sample was not representative (F-44)
  29. 29. Solving FDA Legal Challenges for the Life of a Life Sciences Company -29- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT The Barr Case • Remixing – ok at blending stage (F-46) if done on occasion (F-47), but not to replace a bad process • Averaging – allowed in certain situations (F48-51) • Release testing – can involve some exercise of appropriate scientific judgment, but court “cannot articulate” specific procedures (F52-57) • Blend testing – important because finished product testing is more limited in nature (F-58) – sample size – • content uniformity – 3x dosage size (F-65) • blend potency – can be larger (F-67) – sample site – either mixer or drum – but choice must be representative of the whole blend (F-70)
  30. 30. Solving FDA Legal Challenges for the Life of a Life Sciences Company -30- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT The Barr Case • Retrospective validation – must include all batches, failed and passing, in the review unless can show the batch is not representative of the process – e.g., an older process (F-93) • Barr – tried to argue that it could do a retrospective validation with fewer batches. Court declined to adopt that specifically, but also declined to set a minimum number (F-103)
  31. 31. Solving FDA Legal Challenges for the Life of a Life Sciences Company -31- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Barr … • Key Lessons: – Can’t test your way into compliance – a theme that continues to today (e.g., Akorn allegations) – Record keeping – must be in lab notebooks or other official records; not on “scrap” paper or Post-its – Not a defense that defective procedures were approved in a new drug application – Recall order – can be a part of equitable relief in a quality- related injunction proceeding
  32. 32. Solving FDA Legal Challenges for the Life of a Life Sciences Company -32- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Consent Decree • Order of a court • Entered by consent of the parties • Not technically a judicial verdict, but a negotiated contract between the parties under the sanction of the court • Parties represent that it is a just determination of their rights as if the alleged facts of the case had been proven
  33. 33. Solving FDA Legal Challenges for the Life of a Life Sciences Company -33- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Consent Decrees … • How do they come about?? • Settlement of a court case after FDA has filed for an injunction – “Voluntary” negotiations with FDA after an adverse inspection – Most terms/conditions negotiable -- but depends on your leverage point – companies more often concerned about naming executives as individually responsible: FDA finds this point important as a deterrent and necessary to pursue contempt charges if decree becomes ineffective
  34. 34. Solving FDA Legal Challenges for the Life of a Life Sciences Company -34- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Genzyme Consent Decree • GMP issues at its Allston facility • $175 million disgorgement • 5-years of audits after corrections made • Batch reviews – by outside expert and then reviewed by Genzyme Sr. VP for Global Quality • Periodic inspections by an auditor • Penalties for not meeting deadlines in correction plan – $15,000 per day per drug – 18.5% of revenue for each drug sold after failing to meet deadline • Penalties for decree violations -- $15,000 per day • KV and Caraco Consent Decrees – 2009 – similar to Genzyme
  35. 35. Solving FDA Legal Challenges for the Life of a Life Sciences Company -35- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Disgorgement • Government (FDA doesn’t get) recovery of company profits • Can’t profit from sales of an illegal product that is nonetheless medically necessary • FDA refrains from enjoining production of non- compliant products because it would compromise patient care by causing significant shortages of medically necessary products • In return, firms will pay a fixed % of future sales to ensure that they did not profit from the violative products • Example: Abbott Diagnostics
  36. 36. Solving FDA Legal Challenges for the Life of a Life Sciences Company -36- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Criminal Prosecution: Misdemeanors • Misdemeanor – Fines up to $100,000 and $200,000 per misdemeanor offense for an individual and a corporation respectively ($250,000 and $500,000 if the misdemeanor offense resulted in death) – Imprisonment – up to a year in jail per violation
  37. 37. Solving FDA Legal Challenges for the Life of a Life Sciences Company -37- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Criminal Prosecution -- Felony • Must prove intent • Fines are greater • More common than misdemeanor prosecutions • Often will combine FDA violations with other federal crimes (e.g., conspiracy, false statements)
  38. 38. Solving FDA Legal Challenges for the Life of a Life Sciences Company -38- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Strict Liability and the “Park Doctrine” – Criminal Liability for Responsible Corporate Officials
  39. 39. Solving FDA Legal Challenges for the Life of a Life Sciences Company -39- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT U.S. v. Park – Strict Criminal Liability in the FDA World • 1975 – 421 U.S. 658 http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=us&vol=421&invol=658 • Facts: – John Park – CEO of Acme Markets – based in Phila. – Warehouse – in Baltimore –multiple FDA inspections found rodent and insect infestation • 1970 – letter to Park re Baltimore warehouse • 1971 – FDA inspection in October and November • 1972 – January letter from FDA • March 1972 – FDA inspection – still found rodent inspection
  40. 40. Solving FDA Legal Challenges for the Life of a Life Sciences Company -40- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT U.S. v. Park – Strict Liability … • Supreme Court, quoting Dotterweich (1943): – observed that the Act is of "a now familiar type" which "dispenses with the conventional requirement for criminal conduct - awareness of some wrongdoing. In the interest of the larger good it puts the burden of acting at hazard upon a person otherwise innocent but standing in responsible relation to a public danger." • “Moreover, the principle had been recognized that a corporate agent, through whose act, default, or omission the corporation committed a crime, was himself guilty individually of that crime. “
  41. 41. Solving FDA Legal Challenges for the Life of a Life Sciences Company -41- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT U.S v. Park … • The principle had been applied whether or not the crime required "consciousness of wrongdoing," and it had been applied not only to those corporate agents who themselves committed the criminal act, but also to those who by virtue of their managerial positions or other similar relation to the actor could be deemed responsible for its commission. • The liability of managerial officers did not depend on their knowledge of, or personal participation in, the act made criminal by the statute. Rather, where the statute under which they were prosecuted dispensed with "consciousness of wrongdoing," an omission or failure to act was deemed a sufficient basis for a responsible corporate agent's liability. It was enough in such cases that, by virtue of the relationship he bore to the corporation, the agent had the power to prevent the act complained of.
  42. 42. Solving FDA Legal Challenges for the Life of a Life Sciences Company -42- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT U.S. v Park … • Duty to seek out and fix violations -- the Act imposes not only a positive duty to seek out and remedy violations when they occur but also, and primarily, a duty to implement measures that will insure that violations will not occur. – The requirements of foresight and vigilance imposed on responsible corporate agents are beyond question demanding, and perhaps onerous, but they are no more stringent than the public has a right to expect of those who voluntarily assume positions of authority in business enterprises whose services and products affect the health and well-being of the public • But the Act, in its criminal aspect, does not require that which is objectively impossible -- the Act permits a claim that a defendant was "powerless" to prevent or correct the violation to "be raised defensively at a trial on the merits."
  43. 43. Solving FDA Legal Challenges for the Life of a Life Sciences Company -43- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT U.S. v. Park … • Objective impossibility – not construed by Supreme Court since Park. – One federal court of appeals – would have to show that you took extraordinary measures, but still the violation occurred – Delegation is not a defense • March 2010 – Commissioner Hamburg writes Congress -- renewed commitment to use Park – issued a revision to its Regulatory Procedures Manual (RPM) on factors FDA will use in invoking Park
  44. 44. Solving FDA Legal Challenges for the Life of a Life Sciences Company -44- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT The Park Doctrine – The OxyContin Case • May 10, 2007 -- Purdue Frederick Company, Inc. – as a company -- agreed to pay more than $600 million to resolve felony criminal charges and civil liabilities in connection with a long-term illegal scheme to promote, market and sell OxyContin • Purdue trained its sales representatives to falsely represent: – to health care providers about the difficulty of extracting oxycodone, the active ingredient, from OxyContin – to health care providers that OxyContin did not cause euphoria and was less addictive than IR opiates; – to health care providers the erroneous belief that OxyContin was less addictive than morphine.
  45. 45. Solving FDA Legal Challenges for the Life of a Life Sciences Company -45- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT The Park Doctrine – The Oxycontin Case • As part of the plea, Purdue paid a $600 million settlement, which included: – a criminal fine – restitution to government agencies – over $276 million in forfeiture, – civil settlement of $100.6 million to the United States. • Purdue's then current and former executive employees, Michael Friedman, Howard Udell and Dr. Paul Goldenheim, pled guilty to a misdemeanor violation of misbranding OxyContin as being the responsible corporate officers during the long-term illegal promotion of the drug
  46. 46. Solving FDA Legal Challenges for the Life of a Life Sciences Company -46- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Is Park Being Resurrected? • Congress and Executive Branch – concerned that even huge fines and Corporate Integrity Agreements are “cost of business” • Corporate Executives – being targeted under premise that: – Organizational misconduct cannot occur without individuals – What officials could prevent a violation if they tried? – Answer: the “Responsible Corporate Official” (RCO)
  47. 47. Solving FDA Legal Challenges for the Life of a Life Sciences Company -47- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Recent GMP Criminal Prosecutions • Baxter – 2017 – Sterile Drugs – DOJ Press Release – North Carolina facility – $16 million in criminal fines – $2.18 in False Claims Act penalties • Whistleblower – got $431,000 – Cause – failure to replace moldy HEPA filters – Note – no evidence of negative impact on the product – Large Volume IV solutions
  48. 48. Solving FDA Legal Challenges for the Life of a Life Sciences Company -48- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Collateral Consequences of Serious Enforcement Actions
  49. 49. Solving FDA Legal Challenges for the Life of a Life Sciences Company -49- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Consequences for Individuals
  50. 50. Solving FDA Legal Challenges for the Life of a Life Sciences Company -50- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Collateral Damage – Worst Case Scenario from FDA Enforcement • This is a picture you do not want to see …. – in your newspaper …. – on your local news …. – on the Internet …. or – in an FDA lawyer’s presentation for years to come ….
  51. 51. Solving FDA Legal Challenges for the Life of a Life Sciences Company -51- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Purdue Pharma Executives Outside Court in Virginia Udell Goldenheim Friedman
  52. 52. Solving FDA Legal Challenges for the Life of a Life Sciences Company -52- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT HHS Disqualification – The “Death” Sentence • 2008 – HHS Office of Inspector General – proposed to disqualify all three from participating in federal health care programs (e.g., Medicare, Medicaid) – Did not allege direct involvement, but based on RCO theory • 2010 – Twelve year exclusion upheld by federal district court – Friedman v. Sebelius (on appeal to D.C. Court of Appeals) • July 2012 – Federal Court Appeals – agreed, although remanded to see if length of exclusion was consistent with prior exclusions
  53. 53. Solving FDA Legal Challenges for the Life of a Life Sciences Company -53- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT OIG Disqualification – Factors • Circumstances of the misconduct and the seriousness of the offense • Individual’s role in sanctioned entity • Individual’s actions in response to the misconduct • Information about the entity • Forest/Solomon – OIG threatened to disqualify him even though he had not been convicted; later backed off
  54. 54. Solving FDA Legal Challenges for the Life of a Life Sciences Company -54- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Problems For Individuals If Convicted • Lose right to vote • Lose right to run for public office • Damage to reputation
  55. 55. Solving FDA Legal Challenges for the Life of a Life Sciences Company -55- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Problems For Individuals If Convicted … • Can be deported if not a U.S. citizen • Financial ruin -- lose your job • May not be able to ever work in industry again: – Debarment (FDA) – Disqualification (HHS, Clinical Investigator)
  56. 56. Solving FDA Legal Challenges for the Life of a Life Sciences Company -56- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Consequences for Companies
  57. 57. Solving FDA Legal Challenges for the Life of a Life Sciences Company -57- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Problems For Companies Caused By Criminal Convictions … • Shareholders sue the company, its officers and directors • Other companies may sue the company (e.g., Mylan Labs sued Par and others) • Federal government may suspend or “debar” company from selling to government • “Qui Tam” actions under the False Claims Act -- e.g., GSK (GMP) & Pfizer cases -- “whistle blower” cases -- leading to civil damages and may also spawn a criminal prosecution
  58. 58. Solving FDA Legal Challenges for the Life of a Life Sciences Company -58- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Problems For Companies Caused By Criminal Convictions … • FDA may refuse to approve applications – the AIP Program • May lose state licenses • Customers abandon you • Decreased sales may force lay-offs of employees
  59. 59. Solving FDA Legal Challenges for the Life of a Life Sciences Company -59- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Problems For Companies Caused By Criminal Convictions … • Financing disappears -- banks may refuse to lend money • May violate lending agreements, real estate mortgages or leases • A criminal investigation can cause great disruption to normal business activities
  60. 60. Solving FDA Legal Challenges for the Life of a Life Sciences Company -60- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT Questions? ➢ Call, e-mail or write: Michael A. Swit, Esq. LAW OFFICES OF MICHAEL A. SWIT San Diego, California 92130 m: 760-815-4762 e: mswit@fdacounsel.com web: www.fdacounsel.com ➢ Follow me on: – LinkedIn: http://www.linkedin.com/in/michaelswit – Twitter: https://twitter.com/FDACounsel
  61. 61. Solving FDA Legal Challenges for the Life of a Life Sciences Company -61- www.fdacounsel.com LAW OFFICES OF MICHAEL A. SWIT About Your Speaker Michael A. Swit, Esq., has been addressing critical FDA legal and regulatory issues for over 30 years. Before returning to his private law practice in late 2017, he served for 3 years as the chief regulatory counsel at Illumina, Inc., the world’s leading developer of gene sequencing technologies. Prior to that, Swit was a special counsel in the FDA Law Practice at the global law firm of Duane Morris LLP, in its San Diego office. Before joining Duane Morris in March 2012, Swit served for seven years as a vice president at The Weinberg Group Inc., a preeminent scientific and regulatory consulting firm in the Life Sciences. His expertise includes product development, compliance and enforcement, recalls and crisis management, submissions and related traditional FDA regulatory activities, labeling and advertising, and clinical research efforts for all types of life sciences companies, with a particular emphasis on drugs, biologics, therapeutic biotech products, medical devices, and IVDs. His FDA legal and regulatory work also has included tenures in private practice with McKenna & Cuneo and Heller Ehrman, and as vice president, general counsel and secretary of Par Pharmaceutical, a top public generic and specialty drug firm, where he helped spearhead the company’s emergence from the Generic Drug Scandal. He also was, from 1994 to 1998, CEO of FDANews.com, a premier publisher of regulatory newsletters and other specialty information products for FDA-regulated firms. He has taught and written on many topics relating to FDA regulation and associated commercial activities and is a past member of the Food & Drug Law Journal Editorial Board. He earned his A.B., magna cum laude, with high honors in history, at Bowdoin College, and his law degree at Emory University.

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