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ANDA FAVORITISM SCANDAL FORCES TWO FDA RESIGNATIONS

Executive Summary

ANDA FAVORITISM SCANDAL FORCES TWO FDA RESIGNATIONS: Charles Chang, former chief of ANDA Review Branch III, and David Brancato, a review chemist in his division, left FDA during the last week of April as a result of the investigations into abuses of FDA's generic drug approval process. Brancato is also pleading guilty to grand jury charges related to favoritism allegations. The FDA chemist is charged with three counts of receiving cash gratuities from officers of two generic drug companies, Par Pharmaceutical and its injectable subsidiary Quad Pharmaceuticals. Brancato received a total of $ 4,300, according to the U.S. attorney's office in Baltimore. The Brancato charges were announced April 27 by Breckinridge Willcox, the U.S. Attorney for the District of Maryland. A second set of allegations against an executive of Pharmaceutical Basics, Inc. (PBI) was also announced that same day. Breckinridge declared: "These charges represent the first of what I expect to be a series of prosecutions against government employees, consultants and pharmaceutical manufacturing concerns and their executives." Raj Matkari, VP for Regulatory Affairs and Product Development of Pharmaceutical Basics, is charged with paying a cash gratuity of $ 2,000 to Charles Chang. Matkari is pleading guilty to the cash gratuity charges, the U.S. attorney's office says. Both pleas were reflected in "criminal information" filings in the U.S. District Court of Maryland. Brancato worked for Chang for four years. Following a request for a transfer last December, Brancato moved to the Center for Veterinary Medicine in January. FDA said Brancato resigned April 26; Chang resigned April 28. The "criminal informations" also name the executives that allegedly paid Brancato -- Ashok Patel, a senior VP of Par and Dilip Shah, president and CEO of Quad. Neither exec has been charged. Par announced on April 17 that Patel had resigned and that he had agreed to plead guilty in connection with the investigation. On April 26, Par announced that Shah "has resigned from his position on Quad's Board of Directors and is taking a leave of absence from his duties." Shah's "action stems from an ongoing grand jury investigation into various improprieties in connection with" the generic drug division, the release says. Quad Exec VP Asrar Burney has been named to take Shah's seat on the board and to be Quad's acting president during Shah's absence. Par said it and its subsidiary, Quad, are "continuing to cooperate fully in the investigation." Brancato is specifically charged with receiving $ 1,500 on or about Aug. 11, 1987, $ 1,800 on or about Sept. 15, 1987, and $ 1,000 in October 1987 from Patel and Shah "for and because of official acts that [Brancato] performed and was to perform." Under the charges, Brancato "could receive a maximum penalty of six years incarceration and $ 750,000 in fines." Matkari is accused of giving $ 2,000 to Chang on or about Aug. 19, 1987 "for and because of official acts that [Chang] has performed and was to perform." Matkari could get "a maximum penalty of two years incarceration and a $ 250,000 fine." PBI said in an April 27 statement: "We were saddened to learn yesterday that one of the vice presidents of [the company] Mr. Raj Matkari has been charged with making an illegal gift of $ 2,000 to an FDA official." PBI added that it has "conducted an internal investigation of our files and records and have found no evidence of any wrongdoing by, or involvement of, the company in the matter." Matkari's "acts were done without the knowledge or involvement of the company," PBI stated. The generics firm asserted that "the U.S. Attorney's office has confirmed to us that the company is not a target of their investigation." Jack Van Hulst recently resigned as president of PBI to take the chief operating officer position at A.L. Labs, a multinational manufacturer of generic drugs. Van Hulst's last day at PBI was on April 20. According to PBI, Van Hulst's departure is "totally unrelated" to the generics investigation. Van Hulst will be replaced by Tijn Schonk, formerly of Nuripharma, a division of PBI's parent firm AKZO, PBI said. Schonk will assume the position of president in about a month. A.L. Labs noted in an April 17 release that Van Hulst held his post as president of PBI for the last three years, and that he has had more than 20 years of experience with AKZO. The informations associated with the indictments do not specify the applications for which the FDA reviewers received gratuities. The agency has been going back over ANDA reviews from that period and no irregularities which would necessitate a revocation of review have reportedly been found. During the six months following Quad's alleged initial payment, Quad received the following ANDA approvals: acetylcysteine (Aug. 11), floxuridine (Aug. 24), sulfamethoprim (Aug. 7), leucovorin calcium (Oct. 5, Dec. 22), clindamycin (Dec. 21), cytarabine (Dec. 12), acetazolamide sodium (Jan. 13), and diazoxide (Jan. 26). In that same time period, Par received approvals for: ibuprofen (Oct. 2), isosorbide dinitrate (Oct. 2), leucovorin calcium (Oct. 14), doxepin HCI (Nov. 9), methyldopa & chlorothiazide (Nov. 6), clonidine HCI & chlorthalidone (Dec. 16), and isosorbide dinitrate (Jan. 12). Quad received the first generic approval for cytarabine. PBI, during the same timeframe, gained ANDA approvals for: desipramine (Sept. 9), megestrol acetate (Oct. 2), prazepam (Nov. 6), chlordiazepoxide & amitriptyline HCI (Jan. 12), metaproterenol sulfate (Jan. 25), and tolazamide (Jan. 11). Of those ANDAs, three were first generic approvals: megestrol acetate, prazepam, and metaproterenol sulfate.
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