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Understanding Department of Justice Enforcement Policies relating to FDA-Regulated Products

At the recent 2019 Enforcement, Litigation and Compliance Conference hosted by the Food and Drug Law Institute (see here), Deputy Assistant Attorney General David Morrell delivered the keynote address. You can find a copy of his prepared remarks here.

As part of his remarks, Mr. Morrell commented on enforcement policies and trends that will guide the actions of the Consumer Protection Branch (CPB) of the Department of Justice (DOJ) when working with the Food and Drug Administration (FDA). Regulated industry should become familiar with these policies and trends and apply that information to create more robust compliance programs and decrease the likelihood of adverse enforcement actions.

Here is a summary of the significant policy points raised by Mr. Morrell (emphasis added).

  • Public safety depends on voluntary compliance up and down the product supply chain.
  • DOJ will work with FDA to address and prevent consumer harm. This can happen when consumers suffer actual harm by an incident, or it can happen when there are repeated regulatory violations that are likely to cause harm.
  • DOJ will exercise its independent litigating authority and judgment to seek relief when the FDA’s own enforcement tools have failed to bring a bad actor into compliance.
  • DOJ will vigorously pursue those who interfere with FDA’s mission of evaluating, approving and regulating drugs and medical devices. These kinds of actions have traditionally included failure-to-report violations, interference with FDA and the misuse of manipulated or selectively chosen data. These actions all create a substantial risk of consumer harm.
  • Actions that interfere with FDA’s essential functions put patients at risk and cost the responsible executives and companies far more in the long run than they save in the short term. These actions are also typically caused by failures of corporate compliance programs.
  • DOJ will focus on compounding pharmacies that put patients at risk through repeated violations of the insanitary conditions provisions of 21 U.S.C. § 351(a)(2)(A). Such conditions may include circumstances where contamination or injury may occur – especially for sterile injectable products - but neither FDA or DOJ will wait until harm does occur to act.
  • The DOJ will proceed more intelligently for identifying and selecting cases for enforcement by using data analytics. These new tools will improve DOJ’s ability to select and advance those investigations that involve the greatest elements of consumer harm and deception.
  • DOJ will seek to exercise its enforcement discretion more robustly to avoid matters that lack the greatest elements of consumer harm and deception.
  • The DOJ is also using greater range of options in seeking appropriate resolutions. In some cases, this means accepting unique resolution terms; in others, it can mean using a civil remedy over a criminal remedy or talking first and threatening suit second.
  • Expect great predictability for enforcement actions by adhering to the principles in the new Executive Orders on agency guidance and enforcement. (For reference, you can find the two Executive Orders here and here).
  • DOJ is aiming to be consistent and adherent to basic rule-of-law principles. The recent Executive Orders on guidance and designed to prevent unfair surprise and to ensure that agency guidance does not become a back-door means of regulation.
  • Violations of law should be based on statutes and regulations enacted with proper notice and comment. Instead of serving their intended purposes, guidance often morphs into requirements used to assign liability.
  • The DOJ may still take enforcement action consistent with agency policy statements – including the FDA Compliance Policy Guides (CPG) – as long as those statements are not the sole basis for enforcement and are firmly based in a statute or regulation.
  • The CPB will consider notice and process in making decisions throughout the investigative and litigation phases of matters.
  • The CPB follows the same principles as the department’s Criminal Division in assessing compliance programs for charging and resolution purposes.  Companies can expect DOJ to decline to prosecute if they timely report wrongdoing, cooperate fully and remediate adequately.  This will require a fact-specific analysis of each case and it offers benefit only if a company has enough of a compliance system to identify and report a problem in the first place.  For reference, you can find the DOJ Evaluation of Corporate Compliance Programs here and Section 9-28.000 Principles of Federal Prosecution of Business Organizations in the DOJ Justice Manual here.