Inspections, Compliance, Enforcement, and Criminal Investigations

01/06/1994

[Federal Register: January 6, 1994]


DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
[Docket No. 92N-0416]

David J. Brancato; Denial of Hearing and Final Debarment Order
AGENCY: Food and Drug Administration, HHS.
ACTION: Notice.


SUMMARY: The Deputy Commissioner for Operations of the Food and Drug Administration (FDA) is denying a request for a hearing and issuing a final order under section 306(a) of the Federal Food, Drug, and Cosmetic Act (the act) (21 U.S.C. 335a(a)) permanently debarring Mr. David J. Brancato, 13010 Atlantic Ave., Rockville, MD 20851, from providing services in any capacity to a person that has an approved or pending drug product application. FDA bases this order on a finding that Mr. Brancato was convicted of a felony under Federal law for conduct relating to the development or approval, including the process for development or approval of a drug product; and relating to the regulation of a drug product under the act.

EFFECTIVE DATE: January 6, 1994.

ADDRESSES: Application for termination of debarment to the Dockets

Management Branch (HFA-305), Food and Drug Administration, 12420 Parklawn Dr., rm. 1-23, Rockville, MD 20857.

FOR FURTHER INFORMATION CONTACT: Diane M. Sullivan, Center for Drug Evaluation and Research (HFD-366), Food and Drug Administration, 7500 Standish Pl., Rockville, MD 20855, 301-594-2041.

SUPPLEMENTARY INFORMATION:

  1. Background

    David J. Brancato, a former review chemist with FDA's Division of Generic Drugs, pled guilty and was sentenced on January 5, 1990, for receiving unlawful gratuities, a felony offense under 18 U.S.C. 201(c)(1)(B). This conviction was based on Mr. Brancato's acceptance of payment of approximately $4,300 from senior officials of generic drug manufacturers, Par Pharmaceutical, Inc. (Par), and its subsidiary, Quad Pharmaceuticals, Inc. (Quad), while Mr. Brancato was involved in the regulation of Par's and Quad's drug products and while he was specifically responsible for reviewing Par's and Quad's applications to determine whether those applications met certain statutory standards for approval.

    On December 12, 1992, Mr. Brancato received a certified letter from the Deputy Commissioner for Operations offering Mr. Brancato an opportunity for a hearing on the agency's proposal to issue an order under section 306(a) of the act debarring him from providing services in any capacity to a person that has an approved or pending drug product application. FDA based the proposal to debar Mr. Brancato on its finding that he was convicted of a felony under Federal law for conduct relating to the development, approval, and regulation of Par's and Quad's drug products.

    The certified letter further informed Mr. Brancato that his request for a hearing could not rest upon mere allegations or denials but must present specific facts showing that there was a genuine and substantial issue of fact requiring a hearing. The letter also notified Mr. Brancato that if it conclusively appeared from the face of the information and factual analyses in his request for a hearing that there was no genuine and substantial issue of fact which precluded the order of debarment, FDA would enter summary judgment against him and deny his request for a hearing.

    In a letter dated December 21, 1992, Mr. Brancato requested a hearing and submitted arguments and information in support of his hearing request. In his request for a hearing, Mr. Brancato acknowledges that he was convicted of a felony under Federal law as alleged by FDA; however, he argues that FDA's findings are incorrect and that the agency's proposal to debar him is unconstitutional.

    The Deputy Commissioner for Operations has considered Mr. Brancato's arguments and concludes that they are unpersuasive and fail to raise a genuine and substantial issue of fact requiring a hearing. The legal arguments that Mr. Brancato offers do not create a basis for a hearing because hearings are not granted on matters of policy or law, but only on genuine and substantial issues of fact (see 21 CFR 12.24(b)(1)). Additionally, the material submitted in support of Mr. Brancato's hearing request does not justify a hearing because hearings will not be granted on the basis of mere allegations, denials, or general descriptions of positions and contentions (see 21 CFR 12.24(b)(2)). Moreover, all of Mr. Brancato's arguments are unconvincing for the reasons discussed below.

  2. Conclusions of the Deputy Commissioner Concerning Mr. Brancato's Arguments in Support of a Hearing
    1. Mandatory Debarment of Individuals Applies Retroactively to Convictions Occurring Within the Past 5 Years

      Mr. Brancato first alleges that the debarment provisions do not apply to conduct which occurred prior to the effective date of the act. Mr. Brancato does not support this claim with further argument.

      The provision of the act applicable to Mr. Brancato is section 306(a)(2) of the act. Initiation of debarment proceedings under that section is not limited by when the conduct underlying the conviction occurred, but rather, by when the conviction occurred. Under section 306(a)(2) of the act, debarment proceedings must be initiated within 5 years of the conviction (see section 306(l)(2) of the act). Debarment of Mr. Brancato is appropriately based upon his January 5, 1990, conviction, occurring less than 4 years ago. Because the 5-year statute of limitations has not expired, Mr. Brancato's argument fails to raise a genuine and substantial issue of fact.

      It is unclear from Mr. Brancato's first argument whether he intended to further allege that the debarment provisions do not apply retroactively to convictions occurring prior to the effective date of the act. Nevertheless, this issue is addressed below.

      Congress intended section 306(a)(2) of the act to be retroactive as evidenced by comparing section 306(a)(2) of the act, applicable to mandatory debarment of individuals, to section 306(a)(1) of the act, applicable to mandatory debarment of corporations. The act treats corporations differently from individuals with respect to retroactivity. Mandatory debarment of corporations under section 306(a)(1) of the act is not retroactive because debarment of corporations is explicitly limited to convictions occurring ``after the date of enactment.'' Conversely, section 306(a)(2) of the act, pertaining to mandatory debarment of individuals, does not contain any such limiting language. The exclusion of language barring retroactivity for section 306(a)(2) implies that section 306(a)(2) of the act was intended by Congress to be implemented retroactively.

      In addition, section 306(l)(2) of the act shows that section 306(a)(2), pertaining to mandatory debarment of individuals, was intended to be retroactive. Section 306(l)(2) of the act sets out the effective dates for each provision of the act. As noted above, the effective dates pertaining to section 306(a)(2) of the act state that any relevant conviction may be used as the basis for mandatory debarment of individuals, so long as the conviction occurred no more than 5 years prior to the initiation of debarment proceedings. Section 306(l) of the act states that certain other debarment provisions shall not be retroactive by limiting application of those provisions to actions occurring on or after June 1, 1992. Thus, where Congress intended a section not to be retroactive, it provided an effective date in section 306(l) of the act. The omission of an effective date for section 306(a) of the act and the inclusion of an effective date for other sections reveals Congress' intent that this section be retroactive.

      Thus, as intended by Congress, and as supported by the explicit language of the act, mandatory debarment applies retrospectively and, thus, mandatory debarment applies to Mr. Brancato's conviction, which occurred within 5 years prior to the effective date of the act. Accordingly, Mr. Brancato's claim fails to raise a genuine and substantial issue of fact.

    2. The Decision To Debar Mr. Brancato Was Based Upon the Relevant Considerations and Was Made by an Authorized Designee of the Secretary

      Mr. Brancato next argues that notice to him of his proposed debarment does not reflect consideration by the Secretary of Health and Human Services or his designee. Mr. Brancato does not support this claim with facts or further argument.

      Sections 201 through 903 of the act (21 U.S.C. 321 through 394) contain numerous grants of authority to the Secretary of the Department of Health and Human Services (the Secretary). The Secretary has, in general, delegated this authority to the Commissioner of Food and Drugs with authority to redelegate to the Deputy Commissioner for Operations and other officers of FDA (see 21 CFR 5.10 and 5.20). The authority conferred in section 306 of the act is delegated to the Commissioner, even though the legislation formally names the Secretary. The Commissioner has redelegated that authority to the Deputy Commissioner for Operations (21 CFR 5.20(b) and 5.20(g)(1)).

      The notice of proposed debarment and opportunity for a hearing letter received by Mr. Brancato on December 12, 1992, was issued legally under authority delegated to FDA's Deputy Commissioner for Operations.

      The decision to propose debarment of Mr. Brancato was appropriately based upon the following relevant considerations: (1) The nature of the conviction (a felony under Federal law) and (2) the conduct underlying the conviction (conduct relating to the development, approval, and regulation of Par's and Quad's drug products) (see section I. of this document). Because the Deputy Commissioner for Operations, an authorized designee of the Secretary, considered the relevant factors in making the determination to propose debarment, Mr. Brancato's claim that the notice of his proposed debarment does not reflect consideration by the Secretary or his designee fails to raise any issue as to the validity of this proceeding and fails to raise a genuine and substantial issue of fact.

    3. Mr. Brancato's Conviction Subjects Him to the Mandatory Debarment Provisions Not to the Permissive Debarment Provisions

      Mr. Brancato further contends that the conduct for which he was convicted is more appropriately conduct subject to permissive debarment under 21 U.S.C. 306(b)(2)(B) of the act rather than to mandatory debarment. Mr. Brancato fails to support this statement with an explanation or further argument.

      Section 306(a)(2)(A) and (a)(2)(B) of the act mandates that FDA debar an individual if the Secretary finds that the individual has been convicted of a felony under Federal law for conduct: (1) Relating to the development or approval, including the process for development or approval, of any drug product; and (2) otherwise relating to the regulation of any drug product under the act.

      As discussed above, Mr. Brancato's conviction for receiving unlawful gratuities triggers the section 306 (a)(2) (A) and (a)(2)(B) of the act mandatory debarment provisions. An individual convicted of this crime will not be considered a candidate for permissive debarment unless FDA finds that the conduct underlying the conviction did not relate to the development or approval, or the regulation of any drug product (see section 306(b)(2)(B)(ii) of the act). Absent such a finding, mandatory debarment based upon such a conviction must follow. Because FDA finds that the conduct which served the basis for Mr. Brancato's conviction did relate to the development and approval and the regulation of Par's and Quad's drug products, the mandatory provisions, rather than the permissive provisions, are applicable in this case. Mr. Brancato acknowledges that he was convicted of a felony under Federal law. Furthermore, he does not dispute FDA's finding that the conduct underlying his conviction relates to the development and approval and the regulation of Par's and Quad's drug products. Therefore, Mr. Brancato's claim fails to raise a genuine and substantial issue of fact.

    4. The Statutory Criteria Pertaining to Permissive Debarment Are Not Relevant to Mr. Brancato's Mandatory Debarment Action

      Mr. Brancato states the following: (1) There is no evidence that the Secretary considered the statutory criteria for determining appropriateness and period of debarment for nonmandatory (permissive) debarment, (2) Mr. Brancato took voluntary steps to mitigate the impact of his offense on the public, and (3) Mr. Brancato has no prior convictions. Mr. Brancato fails to support these three statements with further argument.

      As discussed, the mandatory debarment provisions, not the permissive debarment provisions, apply in this case. The criteria pertaining to permissive debarment, which include evidence of mitigation and prior convictions, may not be considered in making the decision to initiate mandatory debarment proceedings. Because Mr. Brancato argues for the consideration of irrelevant permissive debarment criteria, not applicable to Mr. Brancato's mandatory debarment action, his claim fails to raise a genuine and substantial issue of fact.

    5. Mr. Brancato's Plea Agreement With the Government Does Not Preclude His Debarment

      In his next argument, Mr. Brancato states that his guilty plea and cooperation with the government were predicated on the assumption that no civil penalties would flow from his cooperation and that debarment would render his guilty plea subject to collateral attack and jeopardizes the integrity of the judicial process. He does not support this claim with evidence or citations.

      Mr. Brancato's claim is completely unsubstantiated. The April 13, 1989, plea agreement represents the complete and final embodiment of Mr. Brancato's and the government's intention; the agreement explicitly states that ``[t]here are no other agreements, promises, undertakings or understandings between Mr. Brancato and this Office.'' Contrary to Mr. Brancato's ``assumption,'' the terms of the plea agreement do not preclude subsequent civil or administrative actions, including debarment. The terms bar only subsequent criminal action. Because the plea agreement is the complete and final expression of the compromise between Mr. Brancato and the government, and because the agreement does not preclude debarment, Mr. Brancato's claim fails to raise a genuine and substantial issue of fact.

    6. Debarment of Mr. Brancato Is Not Prohibited by the Ex Post Facto Clause

      In his final argument, Mr. Brancato states, ``individuals who cooperate with the government should not be subject to sanctions of this kind ex post facto.'' Mr. Brancato fails to support this statement with an explanation or case citation.

      Although it is unclear from this statement what point Mr. Brancato is attempting to make, two separate arguments may be implied: That his cooperation exempts him from the debarment provisions, and that his debarment violates the ex post facto clause of the United States Constitution. Both arguments are discussed individually below.

      As discussed above, the mandatory debarment provisions, not the permissive debarment provisions, apply in this case. Cooperation with the government may not be considered in the decision to initiate mandatory debarment proceedings. (Cooperation may, however, be considered in determining whether to grant special early termination of debarment, under section 306(d)(4)(C) of the act, to individuals and as evidence of mitigation, in determining appropriateness and period of permissive debarment.) Because Mr. Brancato's cooperation is immaterial here, his claim fails to raise a genuine and substantial issue of fact.

      Mr. Brancato further suggests that the ex post facto clause of the U.S. Constitution prohibits application of section 306(a)(2) of the act to him because this section was not in effect at the time of Mr. Brancato's criminal conduct. Section 306(a)(2) of the act was enacted on May 13, 1992. The conduct underlying Mr. Brancato's conviction occurred in 1987, and his conviction occurred in 1990.

      An ex post facto law is one which punishes acts occurring prior to enactment of the law, or which adds a new punishment to one that was in effect when the crime was committed. (Ex Parte Garland, 4 Wall. 333, 377, 18 L. Ed. 366 (1866). Collins v. Youngblood, 110 S.Ct. 2715 (1990).) Retroactive application of a law to serve a remedial purpose does not violate the ex post facto clause.

      Because debarment is intended as a remedy, rather than a punishment, retroactive application of the mandatory debarment provisions of the act is not prohibited by the ex post facto clause.

      Debarment was clearly intended to be remedial. Congress created the Generic Drug Enforcement Act of 1992 (GDEA) in response to findings of fraud and corruption in the generic drug industry. Both the language of the GDEA itself and its legislative history reveal that the purpose of the debarment provisions i

 

Page Last Updated: 08/27/2014
Note: If you need help accessing information in different file formats, see Instructions for Downloading Viewers and Players.