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U.S. Department of Health and Human Services

Inspections, Compliance, Enforcement, and Criminal Investigations

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5-8 - CIVIL MONEY PENALTIES AND NO-TOBACCO-SALE ORDERS

5-8 - CIVIL MONEY PENALTIES AND NO-TOBACCO-SALE ORDERS
     5-8-1 - Civil Money Penalty Authorities
     5-8-2 - Reduction Of Civil Money Penalties For Small Entities
     5-8-3 - Civil Money Penalty Recommendations

5-8 - CIVIL MONEY PENALTIES AND NO-TOBACCO-SALE ORDERS

5-8-1 - Civil Money Penalty Authorities

The Civil Money Penalties (CMPs) included in this section are monetary penalties that are assessed by FDA for violations of the Federal Food, Drug, and Cosmetic Act (the Act) or the Public Health Service Act. Information on electronic products civil penalties under section 539(b) of the Act can be found in Chapter 6, section 6-6.

CMPs are authorized under the following sections of the Act and the Public Health Service Act. See 21 CFR 17.2 for the current maximum CMP amounts allowed.

 

  1. Food

    1. Section 303(f)(2)(A) of the Act, 21 U.S.C. 333(f)(2)(A) – Authorizes CMPs against any person who introduces, or delivers for introduction, into interstate commerce an article of food that bears or contains a pesticide chemical residue that is unsafe within the meaning of section 408(a).

      Section 303(f)(2)(B) of the Act, 21 U.S.C. 333(f)(2)(B), states that a CMP cannot be assessed against any person who grew the article of food. That section also prohibits use of the seizure, injunction, or criminal authorities if a CMP is assessed. 
       
  2. Drugs

    1. Section 303(b)(2) of the Act, 21 U.S.C. 333(b)(2) – Authorizes CMPs against a manufacturer or distributor:

      1. if one of their representatives, during the course of their employment or association with the manufacturer or distributor, is convicted of selling, purchasing, or trading or offering to sell, purchase, or trade a prescription drug sample in violation of section 503(c)(1) and 301(t); or is convicted of violating any State law that prohibits the sale, purchase, or trade of a prescription drug sample subject to section 503(b), or the offer to sell, purchase, or trade such a prescription drug sample.
         
    2. Section 303(b)(3) of the Act, 21 U.S.C. 333(b)(3) – Authorizes CMPs against a manufacturer or distributor:

      1. if they fail to report to the Secretary any convictions of their representatives for violations of section 503(c)(1) or a State law because of the sale, purchase, or trade of a prescription drug sample, or the offer to sell, purchase, or trade a prescription drug sample.
         
    3. Section 303(f)(3)(A) of the Act, 21 U.S.C. 333(f)(3)(A) – Authorizes CMPs against any person who violates section 301(jj), 21 U.S.C. 331(jj), by:

      1. failing to submit the certification required by section 402(j)(5)(B) of the Public Health Service Act, 42 U.S.C. 282(j)(5)(B), when submitting certain human drug applications and submissions to FDA, or knowingly submitting a false certification;
         
      2. failing to submit clinical trial information required by section 402(j) of the Public Health Service Act, 42 U.S.C. 282(j); or
         
      3. submitting clinical trial information under section 402(j), 42 U.S.C. 282(j), that is false or misleading in any particular under section 402(j)(5)(D), 42 U.S.C. 282(j)(5)(D).
         
    4. Section 303(f)(3)(B) of the Act, 21 U.S.C. 333(f)(3)(B) – Authorizes CMPs (in addition to those under section 303(f)(3)(A) above) if a violation of section 301(jj), 21 U.S.C. 331(jj), is not corrected within the 30-day period following notification under section 402(j)(5)(C)(ii), 42 U.S.C. 282(j)(5)(C)(ii), for each day of the violation after such period until the violation is corrected.
       
    5. Section 303(f)(4)(A) of the Act, 21 U.S.C. 333(f)(4)(A) – Authorizes CMPs against any responsible person (defined in section 505-1, 21 U.S.C. 355-1) that violates a requirement of:
      1. Section 505(o), 21 U.S.C. 355(o) – Postmarket studies and clinical trials; labeling;
         
      2. Section 505(p), 21 U.S.C. 355(p) – Risk evaluation and mitigation strategy; or
         
      3. Section 505-1, 21 U.S.C. 355-1 – Risk evaluation and mitigation strategies. 
    6. Section 303(g)(1) of the Act, 21 U.S.C. 333(g)(1) – Authorizes CMPs against a person who is a holder of an approved new drug application for a prescription drug, or the holder of an approved biologics license application, if such person disseminates or causes another party to disseminate a direct-to-consumer advertisement that is false or misleading.
       
    7. Section 307(a) of the Act, 21 U.S.C. 335b (a) – Authorizes CMPs against any person that: 
       
      1. Knowingly made or caused to be made, to any officer, employee, or agent of the Department of Health and Human Services (“DHHS personnel”), a false statement or misrepresentation of a material fact in connection with an abbreviated new drug application (ANDA);
         
      2. bribed or attempted to bribe or paid or attempted to pay an illegal gratuity to “DHHS personnel” in connection with an ANDA;
         
      3. destroyed, altered, removed, or secreted, or procured the destruction, alteration, removal, or secretion of any material document or other material evidence which was the property of or in the possession of DHHS for the purpose of interfering with DHHS’s discharge of its responsibilities in connection with an ANDA;
         
      4. knowingly failed to disclose to an officer or employee of DHHS, a material fact relating to any drug subject to an ANDA, which such person had an obligation to disclose;
         
      5. knowingly obstructed a DHHS investigation into any drug subject to an ANDA;
         
      6. has an approved or pending drug product application and has knowingly used in any capacity the services of a person who was debarred under section 306; or
         
      7. is debarred and, during the period of debarment, provided services in any capacity to a person that had an approved or pending drug product application.
         
  3. Biologics 

    1. Section 303(f)(3)(A) of the Act, 21 U.S.C. 333(f)(3)(A) – Authorizes CMPs against any person who violates section 301 (jj), 21 U.S.C. 331 (jj), by:
       
      1. failing to submit the certification required by section 402(j)(5)(B) of the Public Health Service Act, 42 U.S.C. 282(j)(5)(B), when submitting certain biological product applications and submissions to FDA, or knowingly submitting a false certification;
         
      2. failing to submit clinical trial information required by section 402(j) of the Public Health Service Act, 42 U.S.C. 282(j); or 
         
      3. submitting clinical trial information under section 402(j), 42 U.S.C. 282(j), that is false or misleading in any particular under section 402(j)(5)(D), 42 U.S.C. 282(j)(5)(D).
         
    2. Section 303(f)(3)(B) of the Act, 21 U.S.C. 333(f)(3)(B) – Authorizes CMPs (in addition to those under section 303(f)(3)(A) above) if a violation of section 301(jj), 21 U.S.C. 331(jj), is not corrected within the 30-day period following notification under section 402(j)(5)(C)(ii), 42 U.S.C. 282(j)(5)(C)(ii), for each day of the violation after such period until the violation is corrected. 
       
    3. Section 303(f)(4)(A) of the Act, 21 U.S.C. 333(f)(4)(A) – Authorizes CMPs against any responsible person (defined in section 505-1, 21 U.S.C. 355-1) that violates a requirement of:

      1. section 505(o), 21 U.S.C. 355(o) – Postmarket studies and clinical trials; labeling;
         
      2. section 505(p), 21 U.S.C. 355(p) – Risk evaluation and mitigation strategy; or
         
      3. section 505-1, 21 U.S.C. 355-1 – Risk evaluation and mitigation strategies.
         
    4. Section 303(g)(1) of the Act, 21 U.S.C. 333(g)(1) – Authorizes CMPs against a person who is a holder of an approved new drug application for a prescription drug, or the holder of an approved biologics license application, if such person disseminates or causes another party to disseminate a direct-to-consumer advertisement that is false or misleading.
       
    5. Section 351(d)(2) of the Public Health Service Act, 42 U.S.C. 262(d)(2) – Authorizes CMPs for any violation of an order issued by the Secretary to immediately recall a batch, lot, or other quantity of a licensed biological product that presents an imminent or substantial hazard to the public health.
       
    6. Section 2128(b)(1) of the Public Health Service Act, 42 U.S.C. 300aa-28(b)(1) – Authorizes CMPs against any vaccine manufacturer who intentionally destroys, alters, falsifies, or conceals any record or report required by 42 U.S.C. 300aa-28(a)(1) or (2).

      The penalty applies to the person who intentionally destroyed, altered, falsified, or concealed such record or report; to the person who directed that such record or report be destroyed, altered, falsified, or concealed; and to the vaccine manufacturer for which such person is an agent, employee, or representative. Each act of destruction, alteration, falsification, or concealment is treated as a separate occurrence.
       
  4. Devices

    1. Section 303(f)(3)(A) of the Act, 21 U.S.C. 333(f)(3)(A) – Authorizes CMPs against any person who violates section 301(jj), 21 U.S.C. 331 (jj), by:

      1. failing to submit the certification required by section 402(j)(5)(B) of the Public Health Service Act, 42 U.S.C. 282(j)(5)(B), when submitting certain device applications and submissions to FDA, or knowingly submitting a false certification;
         
      2. failing to submit clinical trial information required by section 402(j) of the Public Health Service Act, 42 U.S.C. 282(j); or
         
      3. submitting clinical trial information under section 402(j), 42 U.S.C. 282(j), that is false or misleading in any particular under section 402(j)(5)(D), 42 U.S.C. 282(j)(5)(D).
         
    2. Section 303(f)(3)(B) of the Act, 21 U.S.C. 333(f)(3)(B) – Authorizes CMPs (in addition to those under section 303(f)(3)(A) above) if a violation of section 301(jj), 21 U.S.C. 331(jj), is not corrected within the 30-day period following notification under section 402(j)(5)(C)(ii), 42 U.S.C. 282(j)(5)(C)(ii), for each day of the violation after such period until the violation is corrected.
       
    3. Section 303(f)(1)(A) of the Act, 21 U.S.C. 333(f)(1)(A)1 – Authorizes CMPs against any person who violates a requirement which relates to devices. Except that, in accordance with Section 303(f)(1)(B), CMPs do not apply to:

      1. any person who violates the requirements of section 519(a) (e.g., Medical Device Reporting), or section 520(f) (Quality System Regulation), unless the violations constitute a significant or knowing departure from the requirements, or a risk to public health;
         
      2. any person who commits minor violations of section 519(e) (Device Tracking), or section 519(g) (only with respect to correction reports), if the person demonstrates substantial compliance with such section; or 
         
      3. violations of section 501(a)(2)(A) which involve one or more devices which are not defective.
         
      Note that a person accredited under section 704(g)(2) who is substantially not in compliance with the standards of accreditation under that section, or who poses a threat to public health or fails to act in a manner that is consistent with the purposes of that section, is considered to have violated a requirement of the Act that relates to devices.
       
  5. Mammography Facilities

    1. Section 354(h)(3) of the Public Health Service Act, 42 U.S.C. 263b(h)(3) – Authorizes CMPs for:

      1. Failure to obtain a certificate as required by 42 U.S.C. 263b(b);
         
      2. Each failure by a facility to substantially comply with, or each day on which a facility fails to substantially comply with, the quality standards established under 42 U.S.C. 263b(f), codified at 21 CFR Part 900, or the requirements of 42 U.S.C. 263b(d)(1)(B)(ii);
         
      3. Each failure to notify a patient of risk as required pursuant to 42 U.S.C. 263b(h)(2); and
         
      4. Each violation, or for each aiding and abetting in a violation of, any provision of, or regulation promulgated under, this section by an owner, operator, or any employee of a facility required to have a certificate.
         
  6. Tobacco Products

    1. Section 303(f)(9) of the Act, 21 U.S.C. 333(f)(9)– Authorizes CMPs for violations of tobacco product requirements.
       
    2. Section 303(f)(9)(A) of the Act, 21 U.S.C. 333(f)(9)(A)– Authorizes CMPs against any person who violates a requirement of the Act which relates to tobacco products. Such person shall be liable to United States for a civil penalty in an amount not to exceed $15,000 for each such violation, and not to exceed $1,000,000 for all such violations adjudicated in a single proceeding.
       
    3. Section 303(f)(9)(B) of the Act, 21 U.S.C. 333(f)(9)(B) – Authorizes enhanced CMPs in an amount not to exceed $250,000 per violation, and not to exceed $1,000,000 for all such violations adjudicated in a single proceeding.

      1. if a person intentionally violates a requirement of:

        • Section 902(5) of the Act, 21 U.S.C. 387b(5), which deems a tobacco product to be adulterated if it is, or purports to be or is represented as, a tobacco product which is subject to a tobacco products standard established under section 907 unless such tobacco product is in all respects in conformity with such standard.
           
        • Section 902(6) of the Act, 21 U.S.C. 387b(6), which deems a tobacco product to be adulterated if (A) it is required by section 910(a) to have premarket review and does not have an order in effect under section 910(c)(1)(A)(i). or (B) it is in violation of an order under section 910(c)(1)(A).
           
        • Section 904 of the Act, 21 U.S.C. 387d, which requires each tobacco product manufacturer or importer, or agents thereof, to submit health information to the Secretary, as set forth in that section.
           
        • Section 908(c) of the Act, 21 U.S.C.387h(c), which requires the appropriate person (including the manufacturers, importers, distributors, or retailers of the tobacco product) to immediately cease distribution of such tobacco product if the Secretary finds that there is a reasonable probability that the product contains a manufacturing or other defect not ordinarily contained in tobacco products on the market that would cause serious, adverse health consequences or death.
           
        • Section 911(a) of the Act, 21 U.S.C.387k(a), which prohibits any person from introducing or delivering for introduction into interstate commerce any modified risk tobacco product unless an order issued pursuant to subsection 911(g) is effective with respect to such product.
           
      2. if a person violates a requirement of:
         
        • Section 911(g)(2)(C)(ii) of the Act, 21 U.S.C. 387k(g)(2)(C)(ii), which requires that an order under section 911(g) be conditioned on the applicant’s agreement to conduct postmarket surveillance and studies and to submit to the Secretary the results of such surveillance and studies to determine the impact of the order on consumer perception, behavior, and health and to enable the Secretary to review the accuracy of the determinations upon which the order was based in accordance with a protocol approved by the Secretary.
           
        • Section 911(i)(1) of the Act, 21 U.S.C. 387k(i)(1), which requires with respect to a tobacco product for which an applicant obtained an order under section 911(g)(1) that the applicant conduct postmarket surveillance and studies for such a tobacco product to determine the impact of the order issuance on consumer perception, behavior, and health, to enable the Secretary to review the accuracy of the determinations upon which the order was based, and to provide information that the Secretary determines is otherwise necessary regarding the use or health risks involving the tobacco product. The results of postmarket surveillance and studies must be submitted to the Secretary on an annual basis.
           
    Tobacco Retailers

    1. Section 103(q)(2)(A) of the Family Smoking Prevention and Tobacco Control Act, Public Law 111-31 (“Tobacco Control Act”) 21 U.S.C. 333 – Authorizes CMPs against tobacco retailers for violating restrictions promulgated under section 906(d) of the Act, including the regulations at 21 CFR Part 1140. This section provides reduced penalties for retailers with an approved training program. At this time, and until FDA issues regulations setting the standards for an approved training program, all applicable CMPs will proceed under the reduced penalty schedule. 
       
    2. Section 303(f)(8) of the Act, 21 U.S.C. 333(f)(8) – Authorizes imposition of a no-tobacco-sale order prohibiting the sale of tobacco products against a particular tobacco retail outlet that has committed “repeated violations” of restrictions promulgated under section 906(d) of the Act, including the regulations at 21 CFR Part 1140. (Section 103(q)(1)(A) of the Tobacco Control Act defines “repeated violation” as including at least 5 violations of particular requirements over a 36-month period at a particular retail outlet that constitute a repeated violation). A no-tobacco-sale order may be imposed with a CMP.
       

5-8-2 - Reduction Of Civil Money Penalties For Small Entities

The Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) (Public Law 10-121) was enacted on March 29, 1996, and seeks to improve the regulatory climate for small entities by, among other things, requiring agencies to establish small entity penalty reduction policies.

The Food and Drug Administration (FDA) has issued final guidance for the reduction of CMPs for small entities (penalty reduction guidance) as mandated by the SBREFA and the Presidential Memorandum of April 21, 1995 (60 FR 20621, April 26, 1995). This guidance can be obtained on FDA’s internet site at http://www.fda.gov/OHRMS/DOCKETS/98fr/010049gd.pdf

5-8-3 - Civil Money Penalty Recommendations

When it is determined that Civil Money Penalty (CMP) is the appropriate course of action, the District’s Compliance Officer should submit the recommendation package to the appropriate Center, except for tobacco retailers.
 

  1. DISTRICT RESPONSIBILITIES
    The District recommends a Civil Money Penalty by transmitting to the Center, at a minimum, a cover memorandum recommending the action, a draft cover letter to respondents and a Complaint accompanied by the supporting evidence.
     
  2. CENTER RESPONSIBILITIES
    The Center is responsible for the technical, regulatory, policy and scientific review of the District’s Civil Money Penalty recommendation. Changes to proposed recommendations should be made only after discussion with the District’s compliance staff.

    Note: The Center for Tobacco Products (CTP) will initiate CMP actions against tobacco retailers.

    Approved referrals transmitted to DE should include intact original case files organized as submitted from the District, the Center’s proposed changes to respondent letters/Complaint and the Center’s approval memorandum providing Center contact information, justification for imposition of civil money penalties and other information necessary to review and process the action.
     
  3. DE RESPONSIBILITIES
    OEIO, Division of Enforcement will review the appropriateness of the action and the adequacy of the draft cover letter to respondents and Complaint to ensure compliance with existing procedures, policies, regulations or statutes. Changes to proposed recommendations should be made only after discussion with the Center and the District’s compliance staff.

    Approved recommendations to OCC should include DE’s transmittal memorandum, DE’s proposed changes to the respondent letters/Complaint and original materials submitted by the District and Center.
     
  4. OFFICE OF CHIEF COUNSEL RESPONSIBILITIES
    OCC Approved recommendations will be processed in accordance with procedures outlined in 21 CFR Part 17; or, in the case of civil penalties authorized under section 307(a) of the Act, in accordance with the procedures in section 307(b) of the Act.

 

1 This section has been variously referred to as section 303(f) and 303(g) because of confusion at the time of legislative enactment in 1990. The explanatory notes to FDAAA of 2007 clarified that this section is now subsection (f).