fda enforcement conference philadelphia may 2010 michael a. swit, esq. vice president american...

FDA Enforcement Conference

PhiladelphiaMay 2010

Michael A. Swit, Esq.Vice President

American Conference Institute

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.

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Warning Letters FDA Case Referral Process/Role of DOJ and

U.S. Attorney Coordination with States Collateral Consequences of FDA Enforcement

Actions

What I Will Cover

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Warning Letters – 2004 to 2008

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RPM 4-1 “When it is consistent with the public protection

responsibilities of the agency and depending on the nature of the violation, it is the Food and Drug Administration’s (FDA's) practice to give individuals and firms an opportunity to take voluntary and prompt corrective action before it initiates an enforcement action. Warning Letters are issued to achieve voluntary compliance and to establish prior notice.” Only for violations of regulatory significance -- those

violations that may lead to enforcement action if not promptly and adequately corrected.

Agency's principal means of achieving prompt voluntary compliance with the Act.

Why a Warning Letter?

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A key aim: ensure seriousness and scope of observed violations are understood by top management and that the appropriate resources are allocated to fully correct the violations and to prevent recurrence. Reiterated in Hamburg’s August 2009 speech

Not final agency action – is informal and advisory

Not a prerequisite to further FDA Enforcement Prior promises to correct (e.g., in 483 reply)

may not bar a WL

Things to Know About a Warning Letter

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Instances where a warning letter may not occur, but go straight to other enforcement action: Repeat violations Intentional or flagrant violations Continuing violations Violation presents a reasonable possibility of

injury or death

Things to Know About a Warning Letter …

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Factors FDA Follows on Whether to Issue a Warning Letter (when correction promised): Firm’s compliance history –

history of serious violations, or failure to prevent the recurrence of violations

Nature of violation, e.g., a violation that the firm was aware of (was evident or

discovered) but failed to correct Risk associated with the product and the impact of the

violations on such risk Overall adequacy of the firm’s corrective action and

whether the corrective action addresses the specific violations, related violations, related products or facilities


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Factors Determining Whether to Issue a Warning Letter (when correction promised): Promised correction contains provisions for

monitoring and review to ensure effectiveness and prevent recurrence

Whether documentation of the corrective action was provided to enable the agency to undertake an informed evaluation

Whether the timeframe for the corrective action is appropriate and whether actual progress has been made in accordance with the timeframe

Whether the corrective action taken ensures sustained compliance with the law or regulations.


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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 involvedSource: “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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Three Approaches: Field – HQ – Office of Civil Litigation (OCL)

OCL – USAO assistance Condemnation – FDA to USAO (and OCL at same time)

But, if complicated issues, should involve OCL FDA Office of Criminal Investigation (“OCI”) – to USAOs

usually via OCL; sometimes directly Civil Penalties and Injunctive Relief –

also need blessing of the Assistant Attorney General for the Civil Division

Criminal Prosecutions – go to OCL Reference source – Regulatory Procedures Manual,

Ch. 6

FDA Judicial Case Referral Process -- Overview

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Investigations Operations Manual (IOM) – Chapter 3 – 3.1.1 - POLICY

“The scope of consumer protection is extended by cooperative efforts of federal, state, and local agencies and international cooperation. Procedures to appropriately share responsibilities and cooperate with our consumer protection partners are essential.”

Cooperation with Other Federal Agencies – extensive Marshal’s Service – seizures Government Wide Quality Assurance Program

(“GWQAP”) – government contracting – GMP compliance FBI – Federal Anti-Tampering Act (“FATA”) CDC – Food borne outbreaks Secret Service – prevent food poisoning of protected U.S.

officials

Federal and State Cooperation

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Situations Where States Have Exclusive Jurisdiction Food – produced and consumed solely within a stat

Where FDA and States Cooperate -- examples Embargo authority – FDA lacks; many states have.

IOM – “do not routinely request” Joint inspections – e.g., Compounding Pharmacy –

California inspected with FDA present Delegated inspections – FDA can request

Federal and State Cooperation …

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The Collateral Consequences of Violating the Federal Food, Drug,

and Cosmetic Act …

Or

“Why Crime Does Not Pay”

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“Does Crime Pay?” – Problems Beyond Jail and

Fines

PROBLEMS FOR INDIVIDUALS IFCONVICTED: Lose right to vote Lose right to run for

public office Damage to

reputation

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“Does Crime Pay?” -- Problems Beyond Jail and Fines

PROBLEMS FORINDIVIDUALS IFCONVICTED): Can be deported if

not a U.S. citizen Financial ruin - -

lose your job

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“Does Crime Pay?” -- Problems Beyond Jail and

Fines

PROBLEMS FOR COMPANIES CAUSED BY 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., Lifescan & Neurontin cases -- “whistle blower” cases -- leading to civil damages and may also spawn a criminal prosecution

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Fines

PROBLEMS FOR COMPANIES CAUSED BY CONVICTIONS : FDA may refuse to approve NDAs, PMAs or

other filings under Application Integrity Program (AIP)

May lose state licenses

Customers abandon you

Decreased sales may force lay-offs of employees

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Fines

PROBLEMS FOR COMPANIES CAUSED BY 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

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“Does Crime Pay?” -- Problems Beyond Jail and Fines

PROBLEMS FOR COMPANIES CAUSED BY CONVICTIONS : High cost in money of an investigation:

– lost sales

– stock price falls

– attorney’s fees and costs

– consultants fees

– costs of complying with requests by government for documents

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So, What Are The Costs? Direct Costs

Criminal Fines -- $2,800,000 Legal Fees -- $4,000,000 Consultant Fees -- $5,000,000 Shareholder Litigation -- $2,200,000 Competitors Litigation -- $13,000,000 Lost Sales – one year alone – down $49,000,000

TOTAL Direct costs/lost sales – $75,900,000 (just one year of lost sales)

Indirect Costs Stock price – dropped from $27 per share to $3 per share; market

cap from about $297,000,000 to $33,000,000 Employees – 900 to 450 Approvals -- ANDAs – none approved for about 5 years Quad Subsidiary – shut down fully

Other Common Direct Costs (often not present in older cases; common since 1999) False Claims Act Consent Order Disgorgement 21

Call, e-mail, fax or write:

Michael A. Swit, Esq.Vice President

The Weinberg Group Inc.336 North Coast Hwy. 101

Suite CEncinitas, CA 92024

Phone 760.633.3343Fax 760.454.2979Cell 760.815.4762

[email protected]

Questions?

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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.

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fda enforcement conference philadelphia may 2010 michael a. swit, esq. vice president american...

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