Inspections, Compliance, Enforcement, and Criminal Investigations
Inside FDA: Barring People from the Drug Industry
by Tamar Nordenberg
This is one in a series of articles on FDA activities and concerns.
"Some may object that the bill is unduly harsh, but let us not forget, this bill is only aimed at those who have engaged in criminal misconduct, those who put corporate profits ahead of public safety."
--Generic drug company representative Kip Schwartz, testifying before Congress about debarment.
For putting unlawful profit ahead of consumer safety, 38 drug industry employees are facing a lifetime bar on practicing their livelihood. They were convicted, under the Federal Food, Drug, and Cosmetic Act, of felonies that included submitting false data to the Food and Drug Administration, lying to FDA investigators, paying or accepting bribes, and selling prescription drug samples. As a result, the 38 were "debarred" by FDA from working for a drug company.
Most worked for generic drug firms (firms that make drugs that are equivalent to the first, brand-name versions) in positions like "vice president for quality control" or "director for research and development."
The word "debar" means to shut out or exclude. FDA's authority to debar people from the drug industry comes from the Generic Drug Enforcement Act of 1992, often called the "debarment act" because it authorizes, and sometimes even requires, FDA to forbid people (or firms) convicted of certain crimes--basically, crimes related to FDA's regulation of drugs--from participating in the drug industry.
Other parts of this act give the agency additional authorities.
When a person is debarred, FDA notifies the public by publishing a notice in the Federal Register. Also, FDA keeps an up-to-date debarment list. A copy of the list can be obtained by contacting FDA's Office of Enforcement (HFC-230), 12720 Twinbrook Parkway, Rockville, MD 20852; phone: (301) 827-0410; fax: (301) 827-0482; E-mail: firstname.lastname@example.org.
Each time a company--any drug company, not just a generic drug maker--applies for approval of a drug, it must submit to FDA a signed statement that no debarred people worked on the application. If a drug firm employs a debarred person, even as a consultant or contractor, it can be fined up to $1 million. The person illegally working in the industry can be fined up to $250,000.
Cleaning Up Generics
The law is broader than its title implies, affecting in large part brand-name as well as generic drug companies. It is called the "Generic Drug Enforcement Act" because Congress passed the public protection measure in response to the confidence-shaking discovery in 1989 of widespread corruption in the generic drug industry.
That year, FDA learned that some generic drug companies had committed illegal acts--things like falsifying data on drug formulations and illegally giving money to FDA chemists reviewing their drug applications--to gain preferential treatment.
"The data falsifications weren't just honest mistakes by generic companies," says David Read, chair of FDA's Debarment Task Force, which meets as necessary to make debarment policy decisions. "They were calculated attempts to circumvent FDA's regulations. They constituted serious violations of the public trust."
To restore confidence in generic drugs, FDA fired agency employees who had taken bribes and reinspected drug manufacturing facilities. FDA also tightened its regulatory processes, for better verification of data used to support approval decisions.
Protection, Not Punishment
Even with improved procedures, FDA lacks the resources to audit every piece of data in every drug application. "The drug approval process is based on a system of trust," Read says. "The agency receives hundreds of drug applications a year, each consisting of many volumes. When Congress created the new drug approval process, it was relying on drug companies and the agency to be fundamentally honest in their dealings with each other."
Debarment supplements FDA's existing compliance instruments--injunctions, seizures, recalls, civil penalties, and criminal sanctions. By rooting out dishonest people, the debarment act bolstered FDA's efforts to clean up the generic industry.
Under the law, a debarred person can't work for a drug firm "in any capacity." According to the U.S. Court of Appeals for the District of Columbia, even a job as a cook in a drug firm's cafeteria would be forbidden because of the opportunity for close contact between the debarred person and the drug firm's management. "All direct employment by a drug company, whether in the board room or the cafeteria or somewhere in between" is forbidden, the court said.
Besides direct employment, some jobs for a contractor that provides services to a drug firm are also off-limits.
"Debarment is a serious measure, but it's not intended as punishment," says Read. "It protects the public by ensuring that people with a history of dishonest conduct in the drug approval process will no longer be participants in that process."
Some debarees have claimed that the law is unconstitutional--that it is an ex post facto law--because it applies to crimes committed before the Generic Drug Enforcement Act was even passed in 1992. Because the law is a public protection measure and not punishment, courts have found that it is not illegal to debar people for conduct occurring before the law existed.
For the same reason, the act doesn't violate the constitution's double jeopardy clause because it doesn't punish someone twice for the same offense.
Even the permanence of so-called "mandatory debarment" doesn't make debarment punishment. All debarments except one so far have been mandatory debarments, meaning that the types of convictions--federal felony convictions relating to the development, approval or regulation of a drug product--compelled FDA to exclude the people from the industry.
Unlike "permissive debarment," which lasts up to five years, mandatory debarments of individuals are considered permanent. Although the mandatory debarments are imposed for a lifetime, the label of permanent may be misleading because the law provides a way for debarees to apply for "termination" of the debarment. They may be allowed to return to the drug industry if they substantially assist in the investigations or prosecutions of others in drug-related cases and submit persuasive evidence that they are rehabilitated and are no longer a threat to the drug approval process.
So far, no debarments have been terminated. But, Read says, "A small number of the people debarred so far may be eligible to have their debarments terminated."
Tamar Nordenberg is a staff writer for FDA Consumer.
Act's Other Authorities
Mandatory debarment isn't the only authority given to FDA by the Generic Drug Enforcement Act. Other authorities include:
Civil Penalties: Besides fines for violating a debarment, fines of up to $1 million may also be imposed on a company for bribery, false statements, or other wrongful conduct involving a generic drug application.
Permissive Debarment of Individuals: FDA has the option to debar, for up to five years, individuals convicted of certain crimes, described in the act, that are related to the regulation of drugs but do not require mandatory debarment. In January 1997, FDA used this authority for the first time, debarring the head of a blood plasma facility convicted of falsifying blood records.
Debarment of Firms: Firms are also subject to mandatory or permissive debarment. They can be prohibited from submitting applications for generic drug approval (in this case, the law lives up to its name and only applies to generics) for certain crimes relating to the development or approval of generic drug applications. They can be debarred for up to 10 years, depending on the seriousness of the crime and other factors, and they can be debarred permanently if they are convicted a second time while debarred.
Suspension of Distribution: FDA can suspend marketing of some or all of a company's drug products if the company is under investigation for certain conduct that may influence the safety or effectiveness of a drug.
Temporary Denial of Approval: FDA can withhold approvals of generic drug applications if the firm is under active criminal investigation for dishonest conduct involving its drug applications (for example, bribery or material misrepresentations).
Withdrawal of Approval: For a generic drug that's already been approved, FDA may withdraw that approval if the company used bribery or fraud to get approval or if the company can't produce the drug properly.
FDA Consumer magazine (March 1997)