Inspections, Compliance, Enforcement, and Criminal Investigations
[Federal Register: April 3, 1997 (Volume 62, Number 64)]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
[Docket No. 93N-0457]
Robert Elbert; Denial of Hearing; Final Debarment Order
AGENCY: Food and Drug Administration, HHS.
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.
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.
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
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
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
Dated: March 17, 1997.
Michael A. Friedman,
Deputy Commissioner for Operations.
[FR Doc. 97-8555 Filed 4-2-97; 8:45 am]
BILLING CODE 4160-01-F