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Inspections, Compliance, Enforcement, and Criminal Investigations

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[Federal Register: April 3, 1997 (Volume 62, Number 64)]


[Page 15902-15903]

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



[[Page 15902]]





Food and Drug Administration

[Docket No. 93N-0457]


Robert Elbert; Denial of Hearing; Final Debarment Order


AGENCY: Food and Drug Administration, HHS.


ACTION: Notice.




SUMMARY: The Food and Drug Administration (FDA) denies Robert Elbert's

request for a hearing and issues a final order permanently debarring

Robert Elbert, 15000 SW. David Lane, apt. G-61, Lake Oswego, OR 97035,

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. Elbert was convicted of a felony under Federal law

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

Federal Food, Drug, and Cosmetic Act (the act).


EFFECTIVE DATE: April 3, 1997.


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: Mary E. Catchings, Center for Drug

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

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




I. Background


On December 12, 1991, the United States District Court for the

District of Oregon entered judgment against Mr. Robert Elbert, doing

business as Thrifty Drug Store, under a plea of guilty, for one count

of knowingly selling, purchasing, and trading drug samples, a Federal

felony offense under sections 301(t) of the act (21 U.S.C. 331(t)),

303(b)(1) of the act (21 U.S.C. 333(b)(1)), and 503(c)(1) of the act

(21 U.S.C. 353(c)(1)).


In a certified letter received by Mr. Elbert on September 14, 1994,

the then-Acting Deputy Commissioner for Operations offered Mr. Elbert

an opportunity for a hearing on the agency's proposal to issue an order

under section 306(a) of the act (21 U.S.C. 335a(a)) 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.

Elbert on its finding that he had been convicted of a felony under

Federal law for conduct relating to the regulation of a drug product.


The certified letter informed Mr. Elbert 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. Elbert

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 October 11, 1994, Mr. Elbert requested a hearing,

and in a letter dated November 9, 1994, Mr. Elbert submitted arguments

and information in support of his hearing request. In his request for a

hearing, Mr. Elbert does not dispute that he was convicted of a felony

under Federal law as alleged by FDA. He argues, however, that the

agency's proposal to debar him is unconstitutional because a

retroactive application of the debarment provisions would violate the

U.S. Constitution's ex post facto, due process, and equal protection



The Deputy Commissioner for Operations has considered Mr. Elbert'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. Elbert offers do not create a basis for a hearing

(see 21 CFR 12.24(b)(1)). Mr. Elbert's arguments are discussed below.


II. Mr. Elbert's Arguments in Support of a Hearing


A. Ex Post Facto Argument


Mr. Elbert first 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. Elbert's

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

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

Elbert was convicted on December 13, 1991.


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. Elbert'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 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



Bae v. Shalala, 44 F.3d 489, 493 (7th Cir. 1995); see also, DiCola v.

Food and Drug Administration, 77 F.3d 504 (D.C. Cir. 1996)

Because the intent of the GDEA is remedial rather than punitive, Mr.

Elbert's argument that the GDEA violates the ex post facto clause must

fail. (See Bae v. Shalala, 44 F.3d at 496-497.)


B. Due Process and Equal Protection Arguments


Mr. Elbert further argues that an ``ex post facto application of

later enacted statutory provisions to prior conduct and convictions of

an individual is violative of the express provisions of Amendment V,

forbidding that any person be deprived of `life, liberty, or property

without due process of law.''' In his discussion, Mr. Elbert refers to

``the loss of his right and ability to be able to provide services to a

person who has an approved or pending drug product application,'' which

suggests that he may also be making a ``takings'' argument under the

Fifth Amendment.


Mr. Elbert's argument that his due process rights under the Fifth

Amendment would be violated by debarment based upon a conviction

entered prior to enactment of the GDEA is not persuasive. In Usery v.

Turner Elkhorn Mining Co., 96 S. Ct. 2882, 2893 (1976), the Court held

that the retroactive application of a remedial statute designed to

compensate disabled coal miners did not violate the due process clause

of the Fifth Amendment. Legislation adjusting rights and burdens is not

unlawful even if the effect of the


[[Page 15903]]


legislation is to impose a new duty or burden based upon past acts (id.

(citations omitted)). The Court noted, however, that it would

``hesitate to approve the retrospective imposition of liability on any

theory of deterrence * * * or blameworthiness'' (id. (citations

omitted)). Neither exception applies to debarment.


As discussed above, debarment is remedial, in that it prohibits

certain individuals from providing services to a person that has an

approved or pending drug product application, in order to meet the

legitimate regulatory purpose of restoring the integrity of the drug

approval and regulatory process and protecting the public health. In

addition, the remedial nature of the GDEA is not diminished simply

because the GDEA deters debarred individuals and others from future

misconduct (U. S. v. Halper, 109 S. Ct. 1892, 1901, n.7 (1989); Bae v.

Shalala, 44 F.3d 489, 493 (7th Cir. 1995)). Thus, debarment for a 1991

conviction does not violate Mr. Elbert's due process rights.


With regard to his ``takings'' assertion, Mr. Elbert 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, 896-897 (Fed. Cir. 1988)). 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 (Erikson v. United

States, 67 F.3d 858 (9th Cir. 1995)).


Mr. Elbert further alleges that his debarment denies him ``equal

protection of law,'' insofar as persons other than individuals are

subject to debarment for acts occurring after enactment of the GDEA,

and individuals are subject to debarment for acts and convictions that

occurred prior to enactment of the statute as well. This argument also

must fail. A statutory classification, such as that made in the GDEA

between individuals and persons other than individuals, that neither

burdens a fundamental right nor targets a suspect class, will be

sustained if the classification bears a rational relationship to a

legitimate legislative end (Romer v. Evans, 116 S. Ct. 1620, 1627

(1996)). The classification will be upheld even if it works to the

disadvantage of a particular group (id). Moreover, under the rational

basis standard of review, Congress need not articulate the rationale

supporting its classification (FCC v. Beach, 113 S. Ct. 2096, 2102

(1993)). The distinction drawn between individuals and persons other

than individuals may well have been supported by the fact that Congress

had before it evidence from hearings that at least one company that had

been found guilty or had admitted to fraud had obtained new management

prior to passage of the GDEA (Generic Drug Enforcement: Hearing on H.R.

2454 Before the Subcomm. on Health and the Environment of the House

Comm. on Energy and Commerce, 102d Cong., 60-61 (1991) (statement of

Dee Fensterer, President, Generic Pharmaceutical Industry



Mr. Elbert does not dispute the fact 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. Elbert's conviction

are not at issue. Mr. Elbert's legal arguments do not create a basis

for a hearing. Accordingly, the Deputy Commissioner for Operations

denies Mr. Elbert's 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 Robert Elbert has been convicted of a felony under Federal

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


As a result of the foregoing finding, Robert Elbert 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

April 3, 1997 (sections 306(c)(1)(B) and (c)(2)(A)(ii) and 201(dd) of

the act (21 U.S.C. 321(dd))). Any person with an approved or pending

drug product application who knowingly uses the services of Mr. Elbert,

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. Elbert, 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

(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 the assistance of Mr. Elbert during his period of debarment.


Mr. Elbert may file an application to attempt to terminate his

debarment under section 306(d)(4) 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. 93N-0457 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: March 17, 1997.

Michael A. Friedman,

Deputy Commissioner for Operations.

[FR Doc. 97-8555 Filed 4-2-97; 8:45 am]