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U.S. Department of Health and Human Services

Inspections, Compliance, Enforcement, and Criminal Investigations

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FR DATE:07/28/2005

[Federal Register: July 28, 2005 (Volume 70, Number 144)]

[Notices]               
[Page 43699-43701]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28jy05-35]                         

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. 2002N-0510]

 
Thomas M. Rodgers, Jr.; Denial of Hearing; Debarment Order

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA) is denying Mr. Thomas 
M. Rodgers, Jr.'s request for a hearing and is issuing an order under 
the Federal Food, Drug, and Cosmetic Act (the act) debarring Mr. Thomas 
M. Rodgers, Jr., for 5 years from providing services in any capacity to 
a person that has an approved or pending drug product application 
including, but not limited to, a biologics license application. FDA 
bases this order on a finding that Mr. Rodgers was convicted of three 
misdemeanors under Federal law for conduct relating to the regulation 
of a drug product under the act, and that the type of conduct that 
served as the basis for the convictions undermines the process for the 
regulation of drugs. Mr. Rodgers failed to file with FDA information 
and analyses sufficient to create a basis for a hearing concerning this 
action. Therefore, FDA finds that there is no genuine and substantial 
issue of fact to grant a hearing on the debarment.

DATES: This order is effective July 28, 2005.

ADDRESSES: Submit applications for termination of debarment to the 
Division of Dockets Management (HFA-305), Food and Drug Administration, 
5630 Fishers Lane, rm. 1061, Rockville, MD 20852.

FOR FURTHER INFORMATION CONTACT: Kathleen Swisher, Center for Biologics 
Evaluation and Research (HFM-17), Food and Drug Administration, 1401 
Rockville Pike, suite 200N, Rockville, MD 20852-1448, 301-827-6210.

SUPPLEMENTARY INFORMATION:

I. Background

    On May 4, 2000, the U.S. District Court for the District of 
Massachusetts accepted a plea of guilty from Mr. Thomas M. Rodgers, Jr. 
for three counts charged as Federal misdemeanors under section 
303(a)(1) of the act (21 U.S.C. 333(a)(1)): (1) Owning and operating an 
unregistered facility for the manufacture of drugs (301(p) of the act 
(21 U.S.C. 331(p))); (2) shipping an unapproved new drug in interstate 
commerce (301(d) of the act; and (3) shipping an adulterated drug in 
interstate commerce (301(a) of the act).Mr. Rodgers was the Chairman of 
the Board of Directors and majority shareholder of Private Biologicals 
Corporation (PBC). PBC, which was not registered as an establishment 
engaged in the manufacture of drugs, was in the business of producing a 
product identified as ``LK-200,'' an unapproved new drug which PBC and 
its agents intended to be used in the treatment of a variety of 
diseases, including various forms of cancer. Mr. Rodgers caused LK-200, 
an unapproved and adulterated new drug, to be introduced into 
interstate commerce.
    As a result of Mr. Rodgers' conviction, FDA sent to Mr. Rodgers by 
certified letter on December 17, 2002, a proposal to debar Mr. Rodgers 
for 5 years from providing services in any capacity to a person that 
has an approved or pending drug product application, including but not 
limited to, a biologics license application. The letter also provided 
Mr. Rodgers notice of an opportunity for a hearing on the proposal in 
accordance

[[Page 43700]]

with section 306 of the act (21 U.S.C. 335a) and part 12 (21 CFR part 
12). FDA based the proposal on the findings under section 
306(b)(2)(B)(i) of the act (21 U.S.C. 335a(b)(2)(B)(i)) that Mr. 
Rodgers was convicted of three misdemeanors under Federal law for 
conduct relating to the regulation of a drug product under the act and 
that the type of conduct that served as the basis for the convictions 
undermines the process for the regulation of drugs.
    The certified letter also informed Mr. Rodgers that his request for 
a hearing could not rest upon mere allegations, denials, or general 
descriptions of positions and contentions, but must present specific 
facts showing that there was a genuine and substantial issue of fact 
requiring a hearing. The letter also informed Mr. Rodgers that the 
facts underlying his conviction were not at issue and that the only 
material issue is whether he was convicted of misdemeanors under 
Federal law as alleged in the letter, and, if so, whether, as a matter 
of law, the convictions permit his debarment.
    In a letter dated January 16, 2003, Mr. Rodgers, through his legal 
counsel, requested a hearing on the proposed debarment. The request for 
a hearing included the following objections to the debarment: (1) Mr. 
Rodgers' actions did not continue to undermine the process for the 
regulation of drugs by FDA; and (2) the descriptions of Mr. Rodgers' 
conduct in the proposal to debar letter were not found in the 
Information filed in the U.S. District Court of Massachusetts (the 
Information), despite the letter's statement to the contrary.

II. Denial of Hearing

    In his request for a hearing, Mr. Rodgers argued that the previous 
conduct that led to his conviction does not continue to undermine FDA 
regulatory processes, and that such a determination is necessary to 
debar him under the debarment statute. Mr. Rodgers asserts that the 
proposal to debar did not reference present or future regulatory 
processes that are or will be undermined; rather, the proposal to debar 
included a statement that only referenced past processes. According to 
Mr. Rodgers, without a finding that the conduct that resulted in his 
conviction has a continuing impact on the regulation of drugs, the 
elements of the debarment statute have not been met. FDA disagrees with 
Mr. Rodgers' assertion.
    Mr. Rodgers does not deny that type of conduct for which he was 
convicted is the ``type of conduct'' that undermines the process for 
the regulation of drugs, part of the statutory standard for permissive 
debarment under section 306(b)(2)(B) of the act. Instead, he argues 
that the statutory language does not mean what it says but rather that 
it means the agency must establish that his conduct which served as a 
basis for his conviction continues to undermine the regulation of 
drugs. Mr. Rodgers' argument is totally without merit. The agency notes 
that Mr. Rodgers' argument is a legal one, and does not state grounds 
to grant Mr. Rodger's request for a hearing (See Sec.  12.24(b)(1)). We 
address Mr. Rodgers' legal argument below.
    Sections 306(b)(2)(B)(i) and (c)(2)(A)(iii) of the act permit FDA 
to debar an individual for up to 5 years if the FDA Commissioner (in 
exercising his authority delegated from the Secretary) finds first that 
the individual was convicted of, among other things, a misdemeanor 
under Federal law for conduct relating to the regulation of any drug 
product, and second that ``the type of conduct which served as the 
basis for the conviction undermines the process for the regulation of 
drugs.'' Mr. Rodgers challenges the basis for the second finding, 
arguing that the debarment statute requires the agency to find that the 
conduct on which the convictions were based continue to undermine the 
regulatory process for drugs. Mr. Rodgers, in effect reads a continuing 
harm requirement into the statute.
    Mr. Rodgers' argument relies solely on the present tense of the 
word ``undermines.'' In focusing exclusively on verb tense, Mr. Rodgers 
ignores the subject of the statutory language and offers an 
interpretation contradicted by the plain language of the debarment 
statute.
    Under well-established principles of statutory construction, the 
starting point in determining the meaning of a statute is the language 
of the statute itself (See, e.g., Watt v. Alaska, 451 United States 
259, 265-66 (1981) (citations omitted)). The language of section 
306(b)(2)(B)(i) of the act is clear. It states that ``the type of 
conduct which served as the basis for the conviction undermines the 
process for the regulation of drugs.'' The subject of the verb 
``undermines'' in the relevant statutory language is ``the type of 
conduct,'' not the conduct of the individual facing debarment. Because 
the statute refers to a general category of conduct, the statute uses 
the present tense in the term ``undermines'' to permit debarment for 
conduct that is of a type that in general undermines the process for 
the regulation of drugs, regardless of whether the particular conduct 
that gave rise to the misdemeanor conviction continues to undermine the 
regulation of drugs. The statute does not require that the specific 
criminal acts that the individual committed continue to undermine the 
regulatory process.
    Mr. Rodgers' contention that the use of the term ``undermines'' 
requires a continuing harm as a result of his conduct reads the express 
reference to a type of conduct out of the statute and reads into the 
statute the words ``continues to undermine'' that simply are not there. 
Even though the statute states that the type of conduct at issue is the 
type of conduct that ``served as the basis for the conviction,'' this 
reference to the past conduct of the individual does not mean that the 
agency must establish that the past conduct continues to undermine the 
regulation of drugs to subject the individual to permissive debarment 
under section 306(b)(2)(B)(i).
    It is clear that the type of conduct that served as the basis for 
Mr. Rodgers' conviction (failure to register a drug facility and 
shipping unapproved and adulterated drugs in interstate commerce) are 
types of conduct that undermine, in a general way, the process for 
regulating drugs. These statutory requirements are core requirements in 
the act's regulatory scheme for drugs.
    Debarment is intended to protect the integrity of the drug process. 
In enacting the debarment statute, Congress recognized ``a need to 
establish procedures to bar individuals who have been convicted of 
crimes pertaining to the regulation of drug products from working for 
companies that manufacture or distribute such products.'' Generic Drug 
Enforcement Act of 1992, Public Law 102-282, Section 1(c) (emphasis 
added), quoted in Bae v. Shalala, 44 F.3d 489, 493 (7th Cir. 1995). 
Congress concluded that in order to ensure the integrity of the drug 
approval process and to protect public health, it was necessary, among 
other things, to unequivocally exclude from the drug industry those 
individuals who had previously engaged in fraudulent or corrupt acts 
with respect to the regulation of drugs (65 FR 3458, January 21, 2000) 
(citing H.R. Rep. No. 102-272, 102d Cong., 1st Sess., at 14 (1991)). 
The application of permissive debarment to Mr. Rodgers is consistent 
with this purpose and is not contingent on a finding that his conduct 
continues to undermine the regulation of drugs.
    Mr. Rodgers cites Bae v. Shalala, 44 F. 3d at 493 in support of his 
position, noting that the Bae court found that the Congressional 
purpose behind enactment of the debarment provisions was not 
punishment, but the prevention of present and future problems. In that

[[Page 43701]]

case, the Seventh Circuit held that the debarment statute is remedial 
rather than punitive in nature, but noted further that a law's general 
deterrent effect is consistent with a primarily remedial purpose (See 
id. at 494). The Bae court contrasted the general deterrent effect of 
the debarment statute with legislation intended to effect specific 
deterrence, noting that the latter ``aims to change a particular 
individual's behavior through negative reinforcement.'' This 
description of laws aimed at specific deterrence also characterizes Mr. 
Rodgers' interpretation of the debarment statute: His interpretation 
ties debarment to the continuing harm from the behavior of the 
particular individual facing debarment, rather than to a type of 
behavior that in general undermines drug regulation. In contrast, an 
interpretation of the term ``undermines'' to allow debarment for 
conduct with a general tendency to undermine the regulation of drugs is 
consistent with the statute's remedial goal of protecting the processes 
for the regulation of drugs by deterring all individuals from engaging 
in damaging conduct presently or in the future. See id.; see also 
DiCola v. FDA, 77 F. 3d 504, 506-508 (D.C. Cir. 1996) (discussing 
remedial purpose behind debarment statute).
    Mr. Rodgers also argues that contrary to assertions included in the 
proposal to debar, the following statements are not included in the 
Information: (1) A detailed description of the LK-200 product (e.g., 
that it was a supernatant of white blood cell materials or that it 
meets the definition of a drug product); or (2) any claim that FDA was 
prevented from obtaining accurate and complete information necessary to 
regulate the drug process by Mr. Rodgers.
    Mr. Rodgers' objection (that Mr. Rodgers' conduct described in the 
December 17, 2002, proposal to debar is not explicitly stated in the 
Information) does not raise a genuine and substantial issue of fact as 
to whether Mr. Rodgers was convicted of misdemeanors under Federal law 
or whether, as a matter of law, the convictions permit Mr. Rodgers' 
debarment. Mr. Rodgers does not deny the accuracy of the statements 
made in the proposal to debar, only that the descriptions of his 
conduct are not found in the Information.
    Mr. Rodgers was convicted of three counts of violating the act, 
specifically section 301(p), (d), and (a), for owning and operating an 
unregistered facility for the manufacture of drugs; shipping an 
unapproved new drug in interstate commerce; and shipping an adulterated 
drug in interstate commerce (see, e.g., April 4, 2000, plea agreement 
letter from the U.S. Department of Justice U.S. Attorney, District of 
Massachusetts re: United States v. Thomas M. Rodgers, Jr., whereby Mr. 
Rodgers expressly and unequivocally admits that Mr. Rodgers in fact 
committed the crimes charged in the Information, and is in fact guilty 
of those offenses; see also 68 FR 46197, at 46198, August 5, 2003, 
Thomas Ronald Theodore, Debarment Order, description of the LK-200 drug 
product). It is clear that there is no genuine and substantial issue of 
fact regarding whether Mr. Rodgers was convicted.
    In accordance with Sec.  12.24(b)(1), a hearing will only be 
granted if materials are submitted showing that there is a genuine and 
substantial issue of fact for resolution at a hearing. For the reasons 
set forth previously, FDA finds that Mr. Rodgers failed to identify any 
genuine and substantial issue of fact justifying a hearing. In 
addition, Mr. Rodgers' legal arguments do not create a basis for a 
hearing, and, in any event, are without merit. Accordingly, the 
Commissioner denies Mr. Rodgers' request for a hearing.

III. Findings and Order

    Therefore, the Commissioner, under section 306(b)(2)(B)(i) of the 
act, and under the authority delegated to the Commissioner of Food and 
Drugs, finds that Mr. Thomas M. Rodgers, Jr., has been convicted of 
three misdemeanors under Federal law for conduct relating to the 
regulation of a drug product under the act and that Mr. Rodgers' 
conduct which served as the basis for his conviction is the type of 
conduct that undermines the process for the regulation of drugs (21 
U.S.C. 335a(b)(2)(B)(i)).
    As a result of the foregoing findings, Mr. Thomas M. Rodgers, Jr. 
is debarred for 5 years from providing services in any capacity to a 
person with an approved or pending drug product application under 
sections 505, 512, or 802 of the act (21 U.S.C. 355, 360b, or 382), or 
under sections 351 of the Public Health Service Act (42 U.S.C. 262). 
Any person with an approved or pending drug product application 
including, but not limited to, a biologics license application, who 
knowingly employs or retains as a consultant or contractor, or 
otherwise uses the services of Mr. Rodgers, in any capacity, during Mr. 
Rodgers' debarment, will be subject to civil money penalties (section 
307(a)(6) of the act (21 U.S.C. 335b(a)(6))). If Mr. Rodgers, during 
his debarment, provides services in any capacity to a person with an 
approved or pending drug product application, including but not limited 
to, a biologics license application, Mr. Rodgers will be subject to 
civil money penalties (section 307(a)(7) of the act). In addition, FDA 
will not accept or review any abbreviated new drug applications 
submitted by or with the assistance of Mr. Rodgers during Mr. Rodgers' 
debarment (section 306(c)(1)(B) of the act).
    Any application by Mr. Rodgers for termination of debarment under 
section 306(d)(4) of the act should be identified with the Docket No. 
2002N-0510 and sent to the Division of Dockets Management (see 
ADDRESSES). All such submissions are to be filed in four copies (21 CFR 
10.20(a)). The public availability of information in these submissions 
is governed by 21 CFR 10.20(j). Publicly available submissions may be 
seen in the Division of Dockets Management between 9 a.m. and 4 p.m., 
Monday through Friday.

    Dated: July 20, 2005.
Jeffrey Shuren,
Assistant Commissioner for Policy.
[FR Doc. 05-14967 Filed 7-27-05; 8:45 am]

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