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U.S. Department of Health and Human Services

Inspections, Compliance, Enforcement, and Criminal Investigations

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03/11/1996

[Federal Register: March 11, 1996 (Volume 61, Number 48)]

[Notices]              

[Page 9711-9713]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr11mr96-91]

 

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. 94N-0033]

 

John D. Copanos; Denial of Hearing; Final Debarment Order

 

AGENCY: Food and Drug Administration, HHS.

 

ACTION: Notice.

 

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SUMMARY: The Food and Drug Administration (FDA) denies John D. Copanos'

request for a hearing and issues 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 John D. Copanos, 6504 Montrose Ave., Baltimore,

MD 21212, from providing services in any capacity to a person that has

an approved or pending drug product application. FDA bases this order

on its finding that Mr. Copanos was convicted of a felony under Federal

law for conduct relating to the regulation of a drug product under the

act.

 

EFFECTIVE DATE: March 11, 1996

 

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: Christine F. Rogers, Center for Drug

Evaluation and Research (HFD-7), Food and Drug Administration, 7500

Standish Pl., Rockville, MD 20855, 301-594-2041.

 

SUPPLEMENTARY INFORMATION:

 

I. Background-

    

John D. Copanos was the owner and president of John D. Copanos and

Sons, Inc., and Kanasco, Ltd., when, on November 13, 1989, he agreed to

plead guilty to one count of distributing misbranded drugs with intent

to mislead, a Federal felony offense under sections 301(a) of the act

(21 U.S.C. 331(a)) and 303(a)(2)(previously 303(b)) of the act (21

U.S.C. 333(a)(2)) (previously 21 U.S.C. 333(b)), and one count of

causing the adulteration of drugs with intent to mislead, a Federal

felony offense under sections 301(k) and 303(a)(2) of the act. On

February 16, 1990, the United States District Court for the District of

Maryland accepted Mr. Copanos' plea of guilty and entered judgment

against him for these felonies. The bases for these convictions were as

follows.

 

Mr. Copanos distributed a drug that was misbranded because its

labeling failed to bear adequate directions for use and because it

failed to warn of the presence of phenylalanine, a component of

aspartame. In fact, adequate testing had not been conducted to

determine the effect of aspartame on the stability, potency, and

effectiveness of this drug. This drug was also misbranded because it

failed to reveal the presence and amount of phenylalanine.

 

In addition, Mr. Copanos pled guilty to causing the adulteration of

a drug with intent to mislead by failing to comply with current good

manufacturing practice.

 

In a notice published in the Federal Register of November 9, 1994

(59 FR 55846), FDA offered Mr. Copanos an opportunity for a hearing on

the agency's proposal to issue an order under section 306(a) of the act

debarring Mr. Copanos 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. Copanos on its finding that he had been

convicted of felonies under Federal law for conduct relating to the

regulation of a drug product. -

 

In the Federal Register notice of November 9, 1994, FDA informed

Mr. Copanos 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.

FDA also informed Mr. Copanos 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 8, 1994, Mr. Copanos requested a

hearing, and in a letter dated January 6, 1995, Mr. Copanos submitted

arguments and information in support of his hearing request. In his

request for a hearing, Mr. Copanos does not dispute that he was

convicted of a felony under Federal law as alleged by FDA. However, Mr.

Copanos argues that: (1) He did not receive proper notice; (2) he is

entitled to a hearing to contest or explain the facts underlying his

plea; (3) some factual statements in the agency's proposal are

inaccurate; (4) the agency's reliance on portions of the indictment is

inappropriate; (5) and the agency's proposal to debar him is

unconstitutional.

 

The Deputy Commissioner for Operations has considered Mr. Copanos'

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. Copanos offers do not create the bases for

a hearing (see 21 CFR 12.24(b)(1)). Mr. Copanos' arguments are

discussed below.

 

II. Mr. Copanos' Arguments in Support of a Hearing

 

A. Notice

    

Mr. Copanos objects to being notified of his proposed debarment

through publication in the Federal Register. It is the policy of the

agency to send a notice of proposed debarment by certified mail. If

certified mail delivery is unsuccessful, the agency attempts to deliver

the notice to the individual personally. If this attempt fails also,

 

[[Page 9712]]

notice is given through publication in the Federal Register. FDA

attempted to serve Mr. Copanos by certified mail but was unable to do

so. In September 1994, FDA's Baltimore District Office learned that Mr.

Copanos was out of the country. Agents from FDA's Baltimore District

Office visited Mr. Copanos' home weekly to determine if he had

returned. FDA's Office of Criminal Investigation arranged with U.S.

Customs to be notified if Mr. Copanos returned to the country. When Mr.

Copanos did not return to the country, the debarment notice was

published in the Federal Register on November 9, 1994.

 

Mr. Copanos requested a hearing on his proposed debarment and made

arguments in support of that request. Thus, it is clear that Mr.

Copanos received actual notice of the agency's proposed action and has

not been deprived of any procedural rights by virtue of publication of

the debarment notice in the Federal Register.

 

B. Facts Underlying the Plea

    

Mr. Copanos makes the following statements relating to the facts

underlying his plea. He states that he held a management position and

did not personally misbrand or manufacture adulterated drugs, that none

of the drugs or products involved were put into commerce, and that the

first count of the plea related to a facility that was not under his

full control at the time. Mr. Copanos also states that the agency's

proposal sets forth areas of indictment information and factual

statements of allegations rather than actual proof.

Mr. Copanos is correct that the agency's proposal contained some

inaccuracies. Although Mr. Copanos pled guilty to counts four and six

of the indictment against him, he did not plead guilty to all the

particulars listed in the indictment. In its debarment proposal, the

agency mistakenly referred to parts of the indictment to which Mr.

Copanos did not plead. The agency very much regrets this error.

However, this misplaced reliance does not raise a genuine and

substantial issue of fact requiring a hearing.

 

The act requires FDA to mandatorily debar an individual who has

been convicted of certain Federal felonies. The only relevant factual

issue is whether Mr. Copanos was, in fact, convicted. Mr. Copanos does

not dispute that he pled guilty to two Federal felony counts for

actions that relate to the regulation of a drug product. Section 306(l)

of the act includes in its definition of a conviction, a guilty plea.

Accordingly, Mr. Copanos' statements regarding the factual

circumstances underlying his plea fail to raise a genuine and

substantial issue of fact justifying a hearing.

 

C. Ex Post Facto Argument

    

Mr. Copanos 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. Copanos'

criminal conduct. The Generic Drug Enforcement Act (GDEA) of 1992,

including section 306(a)(2), was enacted on May 13, 1992, and Mr.

Copanos was convicted on February 16, 1990.

 

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, 497 U.S.

37 (1990).)

 

Mr. Copanos' claim that application of the mandatory debarment

provisions of the act is prohibited by the ex post facto clause is

unpersuasive, because the intent of debarment is remedial, not

punitive. Congress created the GDEA in response to findings of fraud

and corruption in the generic drug industry. Both the language of the

GDEA 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 abbreviated new drug application (ANDA) approval

process and to protect the public health.'' (See section 1, Pub. L.

102-282, GDEA of 1992.)

 

In a suit challenging a debarment order issued by FDA (58 FR 69368,

December 30, 1993), the constitutionality of the debarment provision

was upheld against a similar challenge under the ex post facto clause.

The reviewing court affirmed the remedial character of debarment:

 

Without question, the GDEA serves compelling governmental

interests unrelated to punishment. The punitive effects of the GDEA

are merely incidental to its overriding purpose to safeguard the

integrity of the generic drug industry while protecting public

health.

 

Bae v. Shalala, 44 F.3d 489, 493 (7th Cir. 1995). Because the intent of

the GDEA is remedial rather than punitive, Mr. Copanos' argument that

the GDEA violates the ex post facto clause must fail. See id. at 496-

97.

 

D. Miscellaneous Arguments

    

Mr. Copanos argues that his debarment would be ``an

unconstitutional taking of the right to earn a living in the United

States.'' It appears that Mr. Copanos is referring to a ``taking'' of

property under the Fifth Amendment. Mr. Copanos further states that he

has sold his company, including all of its approved applications, and

that to debar him now ``1would be a malicious act'' on the part of the

agency. Mr. Copanos also argues that he should not be debarred because

his guilty plea was made at an emotional and stressful time.

 

None of these arguments raise a genuine and substantial issue of

fact requiring resolution at a hearing. Mr. Copanos has not established

that his debarment affects any property interest protected by the Fifth

Amendment. The expectation of employment is not recognized as a

protected property interest under the Fifth Amendment. Hoopa Valley

Tribe v. Christie, 812 F.2d 1097, 1102 (9th Cir. 1986); Chang v. United

States, 859 F.2d 893, 896-97 (Fed. Cir. 1988). Loss of potential profit

is not a sufficient basis for a ``takings'' claim. Andrus v. Allard,

444 U.S. 51, 66 (1979). To have a protected property interest, one must

have a ``legitimate claim of entitlement'' to that interest. Erikson v.

United States, 67 F.3d 858 (9th Cir. 1995). One who voluntarily enters

a pervasively regulated industry, such as the pharmaceutical industry,

and then violates its regulations, cannot successfully claim that he

has a protected property interest when he is no longer entitled to the

benefits of that industry. Id.

 

Mr. Copanos does not dispute that he was convicted as alleged by

FDA. Under section 306(l)(1)(B) of the act a conviction includes a

guilty plea. The facts underlying Mr. Copanos' conviction are not at

issue. Moreover, the act does not permit consideration of factors such

as emotional stress; rather, the act is clear that an individual shall

be debarred if convicted of a felony under Federal law for conduct

relating to the regulation of any drug product (see section

306(a)(2)(B) of the act). Mr. Copanos has been convicted of such a

felony. Accordingly, the Deputy Commissioner for Operations denies Mr.

Copanos' request for a hearing.

 

III. Findings and Order

    

Therefore, the Deputy Commissioner for Operations, under section

306(a) of the act and under authority delegated to him (21 CFR 5.20),

finds that John D. Copanos has been convicted of felonies under Federal

law for conduct relating to the regulation of a drug product (21 U.S.C.

335a(a)(2)(B)).

 

As a result of the foregoing findings, John D. Copanos is

permanently debarred from providing services in any capacity to a

person with an approved or pending drug product application

 

[[Page 9713]]

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 (insert date of publication in the Federal

Register), (21 U.S.C. 335a(c)(1)(B) and (c)(2)(A)(ii)). Any person with

an approved or pending drug product application who knowingly uses the

services of Mr. Copanos, in any capacity, during his period of

debarment, will be subject to a civil money penalty (section 307(a)(6)

of the act (21 U.S.C. 335b(a)(6))). If Mr. Copanos, 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 a

civil penalty (section 307(a)(7) of the act). In addition, FDA will not

accept or review any ANDA or abbreviated antibiotic drug application

submitted by or with Mr. Copanos' assistance during his period of

debarment.

 

Mr. Copanos 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. 94N-0033 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: February 22, 1996.

Michael A. Friedman,

Deputy Commissioner for Operations.

[FR Doc. 96-5687 Filed 3-8-96; 8:45 am]

BILLING CODE 4160-01-F