Presentation at annual MAGI conference, focusing on FDA inspections, covering:  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

1. MAGI’s Clinical Research Conference -
2009 West
Michael A. Swit, Esq., Vice President
October 6, 2009
San Diego, California
FDA Inspections: Handling the
Consequences
Dealing with the aftermath of an FDA
inspection.

2. 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.

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

4. Enforcement Trends Prior to
Obama Administration

5. All Inspections – 2004 to 2008

6. Warning Letters – 2004 to 2008

7. Seizures – 2004 to 2008

8. Injunctions – 2004 to 2008

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

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

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

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

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

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”

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
 Apotex – Sept. 2009 – import alert blocks all products
from two facilities

16. 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.

17. 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

18. 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

19. 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

20. How to Prepare …
 Detailed view – quality systems throughout your organization
that reflect strong:
 Procedures
 Training
 Audits
 Validation
 Recordkeeping
 Key SOPS – Clinical Research Setting
 Handling FDA Inspections
 Informed Consent
 IRB Interaction
 AER Handling
 Protocol Changes
 IND/IDE Maintenance
 Site Monitoring
 Clinical Trial Registry compliance
 Clinical Supply Handling

21. When FDA Enforcement Hits
 How It May Hit In Clinical Research Setting
 Administrative Enforcement
 Inspections
 Investigations
 Warning letter
 Clinical Holds – can be compliance based
 AIP
 Termination of an IND or IDE
 Disqualification procedures with clinical investigators
 Civil Money Penalties
 Judicial Enforcement
 Injunction
 Criminal Prosecution

22. When FDA Enforcement Hits …
 Who FDA Can Target: any individual within the
organization that has a position of responsibility for the
violative aspect of the company’s operation,
including:
Clinical Investigators
Research coordinators/nurses
IRBs/IRB members

23. When FDA Enforcement Hits -- Assessing
 Assess each allegation/observation
 Focus on specifics
 Focus on system-wide implications
 Focus on global implications
 Consider affected products – should investigation continue?
 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

24. When Enforcement Hits –
Keys to Responding
 Include a commitment/statement from senior leadership
 Address each allegation/observation separately
 Be discreet in deciding to agree or disagree with the
allegation/observation –
 focus on facts
 do not admit to violations
 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

25. 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

26. 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.

27. Direct Possible Consequences
of Non-Compliance
 Clinical holds – study stopped
 AIP – application reviews suspended
 Civil Money Penalties -- $$$
 Injunctions – selling/manufacturing could be halted for years
 Prosecutions
 Fines -- $$$
 Imprisonment
 Disqualification proceedings
 Approval withdrawal proceedings
 Expense of dealing with FDA action – lawyers, consultants,
experts

28. 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
 Financing covenants may be violated

29. 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

30. Call, e-mail, fax or write:
Michael A. Swit, Esq.
Vice President
The Weinberg Group Inc.
336 North Coast Hwy. 101
Suite C
Encinitas, CA 92024
Phone 760.633.3343
Fax 760.454.2979
Cell 760.815.4762
michael.swit@weinberggroup.com
www.weinberggroup.com
Questions?

31. About your speaker…
Michael A. Swit, Esq., is a Vice President at THE WEINBERG GROUP, where he develops and ensures the
execution of a broad array of regulatory and other services to drug and biologics clients seeking to market products in
the United States. His expertise includes FDA development strategies, compliance and enforcement initiatives, recalls
and crisis management, submissions and related traditional FDA regulatory activities, labeling and advertising, and
clinical research efforts.
Mr. Swit has been addressing critical FDA legal and regulatory issues since 1984. His multi-faceted experience
includes serving for three and a half years as corporate vice president, general counsel and secretary of Par
Pharmaceutical, a prominent, publicly-traded, generic drug company and, thus, he brings an industry and commercial
perspective to his work with FDA-regulated companies. Mr. Swit then served for over four years as CEO of
FDANews.com, a premier publisher of FDA regulatory newsletters and other specialty information products for the
FDA-regulated community. His private FDA regulatory law practice has included service as Special Counsel in the
FDA Law Practice Group in the San Diego office of Heller Ehrman White & McAuliffe and with the Food & Drug
Law practice at McKenna & Cuneo, both in the firm’s Washington office and later in San Diego. He first practiced
FDA regulatory law with the D.C. office of Burditt & Radzius.
Mr. Swit has taught and written on a wide variety of subjects relating to FDA law, regulation and related commercial
activities, including, since 1989, co-directing a three-day intensive course on the generic drug approval process and
editing a guide to the generic drug approval process, Getting Your Generic Drug Approved. A former member of the
Food & Drug Law Journal Editorial Board, he also has been a prominent speaker at numerous conferences sponsored
by such organizations as RAPS, FDLI, and DIA. A magna cum laude graduate of Bowdoin College, he received his
law degree from Emory University Law School and is a member of the California, D.C. and Virginia bars.