Inspections, Compliance, Enforcement, and Criminal Investigations
[Federal Register: November 8, 1994]
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
[Docket No. 92N-0417]
Ashok Patel; Denial of Hearing and Final Debarment Order
AGENCY: Food and Drug Administration, HHS.
SUMMARY: The Food and Drug Administration (FDA) is denying Mr. Ashok
Patel's request for a hearing and is issuing a final order under the
Federal Food, Drug, and Cosmetic Act (the act) permanently debarring
Mr. Ashok Patel, 27 Ranch Rd., Upper Saddle River, NJ 07458, from
providing services in any capacity to a person who has an approved or
pending drug product application. FDA bases this order on a finding
that Mr. Patel 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: November 8, 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: Megan L. Foster, Center for Drug
Evaluation and Research (HFD-366), Food and Drug Administration, 7500
Standish Pl., Rockville, MD 20855, 301-594-2041.
Mr. Ashok Patel, a former senior vice-president of Par
Pharmaceuticals, Inc. (Par), pled guilty and was sentenced on October
18, 1989, for giving an unlawful gratuity to a public official, a
felony offense under 18 U.S.C. 201(c)(1)(A). The basis for this
conviction was Mr. Patel's payment of approximately $4,500 to an FDA
chemistry review Branch Chief (public official) who was involved in the
regulation of Par's drug products and who was specifically responsible
for supervising the chemists who reviewed Par's applications to
determine whether those applications met certain statutory standards
In a certified letter received by Mr. Patel on December 12, 1992,
the Interim Deputy Commissioner for Operations offered Mr. Patel an
opportunity for a hearing on the agency's proposal to issue an order
under section 306(a) of the act debarring Mr. Patel 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. Patel 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
The certified letter also informed Mr. Patel that his request for a
hearing could not rest upon mere allegations or denials, but it must
present specific facts showing that there was a genuine and substantial
issue of fact requiring a hearing. The letter also notified Mr. Patel
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
In a letter dated January 7, 1993, Mr. Patel requested a hearing,
and in a letter dated February 11, 1993, Mr. Patel submitted arguments
and information in support of his hearing request. In his request for a
hearing, Mr. Patel acknowledged that he was convicted of a felony under
Federal law as alleged by FDA. However, Mr. Patel argued that FDA's
findings based on that conviction are incorrect and that the agency's
proposal to debar him is unconstitutional.
The Interim Deputy Commissioner for Operations has considered Mr.
Patel's arguments and concludes that they are unpersuasive and fail to
raise a genuine and substantial issue of fact requiring a hearing.
Moreover, the legal arguments that Mr. Patel offers do not create a
basis for a hearing (see 21 CFR 12.24(b)(1)).
Mr. Patel's arguments are discussed below in section II of this
II. Mr. Patel's Arguments in Support of a Hearing
A. Mr. Patel's Conduct
Mr. Patel first alleges that FDA's findings are incorrect because
his conviction does not involve conduct relating to the development,
approval, or regulation of a drug product under the act. Mr. Patel
claims that the conviction was based on his giving an illegal gratuity
in response to repeated requests of the public official for personal
reasons unrelated to the drug approval process.
This argument is unconvincing and fails to raise a genuine and
substantial issue of fact. Mr. Patel pled guilty to and was convicted
of violating 18 U.S.C. 201(c)(1)(A) for his payment of approximately
$4,500 to an FDA chemistry review Branch Chief who was involved in the
regulation of Par's drug products (21 U.S.C. 335a(l)).
In order to be convicted under 18 U.S.C. 201(c)(1)(A), one must
give, otherwise than as provided by law for the proper discharge of
official duty, something of value to a public official because of an
official act performed or to be performed by such official. ``Official
act'' is defined by 18 U.S.C. 201(a)(3) as ``any decision or action on
any question, matter, cause, suit, proceeding or controversy, which may
at any time be pending, or which may by law be brought before any
public official, in such official's official capacity, or in such
official's place of trust or profit.'' Hence, as a matter of law, Mr.
Patel's conviction establishes that his action was intended to
influence official action. The public official to whom the illegal
gratuity was given was a Branch Chief of one of the four chemistry
review branches within FDA's Division of Generic Drugs, whose sole
responsibilities were the review of applications submitted by generic
drug manufacturers seeking FDA's approval to market their products to
the public, and the general regulation of generic drugs. Therefore, Mr.
Patel's conviction under 18 U.S.C. 201(c)(1)(A) is alone sufficient to
establish that his felony conviction was for conduct relating to the
development and approval, including the process for development and
approval, of a drug product, and for conduct relating to the regulation
of a drug product.
Mr. Patel argues that the judge who sentenced him did not view the
payments as affecting the development, approval, or regulation of a
drug product. He supports this argument with the judge's statements,
``It's not the question of improper handling * * *,'' and ``There is no
evidence that they did any favor * * *,'' (see sentencing transcript,
pp. 7 and 17). However, the judge does not imply that the gratuities
were unrelated to the development, approval, or regulation of a drug
product. To the contrary, he compares the gratuities to insurance when
he states, ``* * * like insurance you got somebody who favors you as
opposed to somebody who is against you, get somebody friendly towards
you so when you do get the application[s] they don't hide them * * *''
(see sentencing transcript, p. 6). While there is no evidence of a
direct benefit to Mr. Patel, the fact that he paid the gratuities for
``insurance'' of his drug applications is sufficient to relate to the
development, approval, and regulation of a drug product.
Finally, Mr. Patel had ample opportunity to contest the
Government's allegations during the criminal case prior to his
conviction. Thus, Mr. Patel is collaterally estopped from arguing that
he did not provide the gratuity ``for or because of any official act
performed or to be performed.''
B. Retroactive Application of the Act
Mr. Patel argues in his letter requesting a hearing that the
debarment provisions are not retroactive, and therefore, because his
crime predated the act, it does not fall under the act.
Mr. Patel's argument that section 306(a)(2) of the act should not
be applied retroactively is unpersuasive. A commonly used rule of
statutory construction states that where Congress includes particular
language in one section of a statute but omits it in another section of
the same act, it is generally presumed that Congress acts intentionally
and purposely in the disparate inclusion or exclusion. (I. N. S. v.
Cardoza-Fonseca, 107 S.Ct. 1207, 1213 (1987), citing Russelo v. United
States, 104 S.Ct. 296, 300 (1983).) Under this rule of statutory
construction, section 306(a)(2) of the act is clearly retroactive.
Section 306(a) of the act treats mandatory debarment of business
entities differently from mandatory debarment of individuals with
respect to retroactivity. Mandatory debarment of business entities
under section 306(a)(1) of the act is not retroactive because it only
applies to convictions ``after the date of enactment of this section.''
However, section 306(a)(2) of the act, which pertains to mandatory
debarment of individuals, does not contain this limiting language.
Therefore, if Congress had intended for section 306(a)(2) of the act
not to be retroactive, it would have included the language ``after the
date of enactment of this section.'' The limitation does not apply
where it was excluded.
Another appropriate application of this rule of statutory
construction is with regard to section 306(l)(2) of the act, which sets
out the effective dates for each provision of the act. Section
306(l)(2) of the act also indicates that section 306(a)(2) is
retroactive. The only limitation section 306(l)(2) sets on section
306(a) of the act is that section 306(a) shall not apply to a
conviction that occurred more than 5 years before the initiation of an
agency action. This language indicates that any applicable conviction
may be used as the basis for debarment, so long as it occurred no more
than 5 years prior to the initiation of debarment proceedings. Certain
other provisions covered in section 306(l) of the act are further
limited by the statement that the section shall not apply to an action
that occurred before June 1, 1992. Thus, when Congress intended that a
certain section not be retroactive, it set a specific effective date or
used specific limiting language as in section 306(a)(1) of the act.
Congress' intentional omission of an effective date for section
306(a)(2) of the act indicates its intent that this section be
Finally, because section 306(a)(2) of the act does not explicitly
address the retroactivity issue, FDA's interpretation must be based on
a permissible construction of the act. A permissible construction is
one that is reasonable and consistent with the purpose of the statute.
(See Chevron v. N. R. D. C., 104 S. Ct. 2778 (1984), and Schering Corp.
v. Sullivan (782 F. Suppl. 645 (1992).) The purpose of the Generic Drug
Enforcement Act of 1992 (GDEA) is ``to restore and ensure the integrity
of the ANDA approval process and to protect the public health.'' (See
section 1, Pub. L. 102-282, The Generic Drug Enforcement Act of 1992.)
FDA's interpretation is consistent with this purpose. The GDEA was
passed in response to the widespread fraud and corruption revealed by
the generic drug investigations that began in the late 1980's. (See
House Committee Report, October 24, 1991, at p. 11.) Congress clearly
enacted the GDEA in order to take action against the wrongdoers of the
1980's, as well as current wrongdoers. FDA's interpretation that
section 306(a)(2) of the act is retroactive is reasonable in that it is
consistent with the purpose of the GDEA, which is to remedy past fraud
C. The Ex Post Facto Clause
Mr. Patel also argues 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. Patel's
criminal conduct, and it changes the legal consequences of his
violation of the law. On May 13, 1992, Congress amended the Federal
Food, Drug, and Cosmetic Act to include section 306(a)(2), Mr. Patel
was convicted on October 18, 1989.
An ex post facto law is one that reaches back to punish acts that
occurred before enactment of the law or that 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).)
Mr. Patel's claim that application of the mandatory debarment
provisions of the act is prohibited by the ex post facto clause is
unpersuasive. Because the intent behind debarment under section
306(a)(2) of the act is remedial rather than punitive, this section
does not violate the ex post facto clause.
The congressional intent with respect to actions under section
306(a)(2) of the act is clearly remedial. Congress created the 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 set forth
in the GDEA is ``to restore and ensure the integrity of the ANDA
approval process and to protect the public health.'' (See section 1,
Pub. L. 102-282, The Generic Drug Enforcement Act of 1992.) This is a
remedial rather than punitive goal. (See Manocchio v. Kusserow, 961
F.2d 1539, 1542 (11th Cir. 1992) (exclusion of physician from
participation in medicare programs because of criminal conviction is
remedial, not punitive).) Supporting the remedial character of
debarment is a statement by Senator Hatch in the Congressional Record
of April 10, 1992, at S 5616, ``* * * [t]he legislation * * * provides
a much-needed remedy for the blatant fraud and corruption uncovered in
the generic drug industry * * * during the last 3 years.''
The Supreme Court has long held that statutes that deny future
privileges to convicted offenders because of their previous criminal
activities in order to ensure against corruption in specified areas do
not impose penalties for past conduct and, therefore, do not violate
the ex post facto prohibitions. (See e.g., Hawker v. New York, 170 U.S.
189, 190 (1898) (physician barred from practicing medicine for a prior
felony conviction); DeVeau v. Braisted, 373 U.S. 154 (1960) (convicted
felon's exclusion from employment as officer of waterfront union is not
a violation of the ex post facto clause).)
In DeVeau, the court upheld a law that prohibited a convicted felon
from employment as an officer in a waterfront union. The purpose of the
law was to remedy the past corruption and to ensure against future
corruption in the waterfront unions. The court in DeVeau, 363 U.S. at
The question in each case where unpleasant consequences are
brought to bear upon an individual for prior conduct, is whether the
legislative aim was to punish that individual for past activity, or
whether the restriction of the individual comes about as a relevant
incident to a regulation of a present situation, such as the proper
qualifications for a profession * * *.
As in DeVeau, the legislative purpose of the relevant statute is to
ensure that fraud and corruption are eliminated from the drug industry.
The restrictions placed on individuals convicted of a felony under
Federal law are not intended as punishment but are ``incident to a
regulation of a present situation'' (DeVeau, 363 U.S. at 160) and
necessary in order to remedy the past fraud and corruption in the
C. The Double Jeopardy Clause
In his final argument, Mr. Patel claims that the proposal to debar
him under section 306(a)(2) of the act violates the double jeopardy
clause of the Fifth Amendment to the U.S. Constitution. The double
jeopardy clause states that no person shall ``be subject for the same
offense to be twice put in jeopardy of life or limb.'' Mr. Patel relies
on U.S. v. Halper, 490 U.S. 435 (1989), to argue that the Fifth
Amendment double jeopardy clause should prevent his debarment because
``jeopardy'' can attach even in a purely civil proceeding, so long as
the civil sanction is punitive, not remedial. He further argues that
his proposed permanent debarment is punitive because it would eliminate
any opportunity to demonstrate that he would no longer be a threat to
the integrity of the drug approval process.
Mr. Patel's argument is unpersuasive. First, ``jeopardy'' cannot
attach because the effect of section 306(a)(2) of the act is remedial,
not punitive. As discussed above, the legislative goal of this section
is to restore and ensure the integrity of the drug approval process and
to protect the public health by eradicating fraud and corruption from
the drug industry. This is plainly a remedial rather than a punitive
goal. (Manocchio v. Kusserow, 961 F.2d at 1542.)
The fact that Mr. Patel's debarment is permanent rather than
temporary does not signify that the legislation is nonremedial or
punitive. The Supreme Court has upheld laws which, for remedial
purposes, permanently bar a class or group of individuals from certain
occupations due to a prior criminal conviction. (See Hawker v. New
York, 170 U.S. 189, 190 (1898); DeVeau v. Braisted, 373 U.S. 154
Second, the double jeopardy clause is inapplicable to FDA's
proposal to debar Mr. Patel because the sanctions imposed by section
306(a)(2) of the act are rationally related to the remedial
governmental goal of eradicating fraud from the drug industry.
Due to the potentially serious consequences to the public health of
fraud and corruption in the drug industry, the permanent debarment of
convicted felons like Mr. Patel is not an excessive means to eliminate
fraud from the industry. The legislative history of the GDEA is replete
with statements, some cited above, that the act provides a reasonable
means of ridding the generic drug industry of widespread corruption and
restoring consumer confidence in generic drugs.
Mr. Patel acknowledges that he was convicted as alleged by FDA in
its proposal to debar him and has raised no genuine and substantial
issue of fact regarding this conviction. While Mr. Patel's legal
arguments do not create a basis for a hearing, FDA has considered these
arguments before taking final action and has found them unpersuasive.
Accordingly, the Interim Deputy Commissioner for Operations denies Mr.
Patel's request for a hearing.
III. Findings and Order
Therefore, the Interim Deputy Commissioner for Operations, under
section 306(a) of the act, and under authority delegated to her (21 CFR
5.20), finds that Mr. Ashok Patel 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 a drug product
(21 U.S.C. 335a(a)(2)(A)); and (2) relating to the regulation of a drug
product (21 U.S.C. 335a(a)(2)(B)).
As a result of the foregoing findings, Mr. Ashok Patel is
permanently debarred from providing services in any capacity to a
person with an approved or pending drug product application under
section 505, 507, 512, or 802 of the act (21 U.S.C. 355, 357, 360b, or
382), or under section 351 of the Public Health Service Act (42 U.S.C.
262), effective November 8, 1994 (21 U.S.C. 335a(c)(1)(B) and
(c)(2)(A)(ii) and 21 U.S.C. 321(ee)).
Any person with an approved or pending drug product application who
knowingly uses the services of Mr. Patel in any capacity, during his
period of debarment, will be subject to civil money penalties (21
U.S.C. 335b(a)(6)). If Mr. Patel, during his period of debarment,
provides services in any capacity to a person with an approved or
pending drug product application, he will be subject to civil money
penalties (21 U.S.C. 335b(a)(7)). In addition, FDA will not accept or
review any abbreviated new drug application or abbreviated antibiotic
drug application submitted by or with Mr. Patel's assistance during his
period of debarment.
Mr. Patel may file an application to attempt to terminate his
debarment, pursuant to section 306(d)(4)(A) of the act. Any such
application would be reviewed under the criteria and processes set
forth in section 306(d)(4)(C) and (d)(4)(D) of the act. Such an
application should be identified with Docket No. 92N-0417 and sent to
the Dockets Management Branch (address above). All such submissions are
to be filed in four copies. The public availability of information in
these submissions is governed by 21 CFR 10.20(j). Publicly available
submissions may be seen in the Dockets Management Branch between 9 a.m.
and 4 p.m., Monday through Friday.
Dated: October 28, 1994.
Linda A. Suydam,
Interim Deputy Commissioner for Operations.
[FR Doc. 94-27668 Filed 11-7-94; 8:45 am]
BILLING CODE 4160-01-F