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ANDA REVOCATIONS FOR CHEATING DRUG FIRMS STILL SUPPORTED BY DINGELL SUBCMTE.; PAR SUGGESTS KEEPING FDA REGULATION SEPARATE FROM CRIMINAL ENFORCEMENT

Executive Summary

The House Commerce/Oversight Subcommittee appears to support FDA's proposal to revoke the ANDAs held by firms which were proven to have cheated on applications. At the subcommittee's Sept. 11 hearing, Rep. Wyden (D-Ore.) suggested that ANDA revocation would "provide a much clearer and stronger impetus to generic drug companies to clean up these problems." Wyden was referring to Aug. 22 letters in which FDA initiated withdrawal proceedings against 25 Vitarine and 3 Par ANDAs ("The Pink Sheet" Aug. 28, p. 8). The agency based its action on findings of "untrue statements of material fact" within those applications. Vitarine President Roger Jordan, who voluntarily appeared with Executive VP-Technical Affairs Seymour Hyden, observed that ANDA revocation "certainly would get one's attention, to say the least." However, Jordan argued, such action would punish Vitarine for fraud that FDA discovered "only because we voluntarily reported it to them." He pointed out that "there are perhaps many other administrative methods that the agency will have -- especially coming out of these hearings -- to correct mistakes that essentially are not part of company-wide practice." Wyden questioned whether Vitarine felt it should be rewarded for cheating just because it has since cooperated with the investigation. Jordan replied that there is no "advantage in starting over from scratch." Vitarine has "redone the bioavailability studies, which is the crux of the approval process; we have gone to that expense. As far as the company being put out of business by the act of a few people, a lot of other innocent people will suffer if we are not able to get back eventually to the marketplace." In prepared remarks, Par Exec VP Jeffrey Levine noted that Rep. Dingell (D-Mich.) had previously said that the firms found guilty of submitting fraudulent data should incur a "heavy economic price." He maintained that his firm is "paying a heavy price now and will continue to do so in the future." He pointed out that the firm is embroiled in a suit with Mylan and a number shareholder actions. "While we recognize that the acts of wrongdoing of the individuals are reprehensible," Levine said, "Congress wisely enacted laws to address and punish such acts. The criminal justice system has worked in this case." Par further asked Congress to maintain FDA as a regulator of safety and efficacy issues. "We think it is proper that FDA remain a health and safety agency and that other laws and agencies address criminal conduct or economic harm." The potential expansion of FDA's retaliatory authority and discretion to punish firms violating FD&C is one of the underlying issues of the generic scandal that could have longterm impact on all of FDA's regulated industries. Vitarine considers itself, as well as FDA and the public, a victim of deception by two former employees, VP-R&D Steven Colton, PhD, and R&D Senior Scientist Timothy Nwako, PhD. Vitarine's prepared testimony described its discovery of fraudulent data and its efforts to report its findings to FDA. Vitarine exec Hyden acknowledged in testimony that the firm has "misstatements of fact in many of" its approved ANDAs. However, he said, "in some cases there are not even misstatements of fact but simply an inability to find supportive records." Jordan testified that Colton "may have destroyed documents and samples before he was suspended from the company." Hyden said Vitarine is trying "to moot the deficiencies in the ANDAs by correcting and submitting proper data." Hyden also contended that, unlike other firms, Vitarine does "not have cases where we did a bioequivalence study on formula A and had been manufacturing formula B. The products which we had manufactured ]and those[ which we had tested in bioequivalence studies, albeit in small batches, are indeed the same formulae." Vitarine's former VP-R&D Colton, was subpoenaed to testify at the Dingell hearing but objected to being called to the witness table before television cameras and having the testimony of his accusers aired publicly. He was dismissed before being given the opportunity to invoke his Fifth Amendment rights because he refused to be sworn in voluntarily. Colton offered to take the oath only if directed to do so by the subcommittee, presumably in an effort to obtain legal immunity. Rep. Wyden said the subcommittee will consider contempt of Congress charges against Colton. Par's Levine testified that he was unaware of the descrepancies between the firm's ANDA records and manufacturing procedures and equipment until mid-July, during the investigations by FDA and the Justice Department. Levine noted that an internal inquiry is being conducted by the firm's outside directors and the consultants they hired. Levine said he is "not in that loop at this time" with respect to information on the investigation. Par "wanted a completely independent review of the total operation, ANDAs, and manufacturing practices in all our facilities," Levine continued. The independent investigation was triggered by a sample switch for a generic version of Maxzide. The switch was made by Senior VP R. K. Patel during an FDA inspection, he noted. Aside from the sample switch, Levine said that the only violations that he has heard of through the investigation involve the falsification of documents regarding orphengesic, orphengesic forte, and leucovorin. VP-Regulatory Affairs Barry Geller testified that he was unaware of Par's use of an "off-the-record book" until August. The log was kept for noting deviations from manufacturing specifications so that corrections could be made without notice of problems on official records. The panel of Par witnesses included five other former associates who asked that cameras and recording equipment be turned off and asserted their Constitutional right not to incriminate themselves. They were R. K. Patel, former Quality Assurance Director Jay B. Patel, former Senior VP Ashok Patel and former Quad President Dilip Shah and former Quad VP-Quality Assurance Jan Sturm. In addition, it was noted that former Par President Perry Levine was under subpoena to testify but declined to appear, citing poor health. Dingell noted that the Par president visited the subcommittee in July and has been running the company. The congressman pointed out that Levine, like the others, remains under subpoena and may be summoned again to appear before the subcommittee. Shah was sentenced on Sept. 13 for giving illegal gratuities to FDA staff (see related item, p. 13). Three former FDAers -- chemists Charles Chang, David Brancato, and Walter Kletch -- have pled guilty to accepting payments, and the department is expected to name two more defendants from the agency. One indication of the type of charges against individuals that may develop in the future came out during questioning of the Par panel by Dingell. The congressman asked three questions of each of the four witnesses who refused to answer by citing the Fifth Amendment. All but Sturm were asked whether they made illegal payments to FDA or submitted false data. Sturm was asked whether he sold confidential FDA information. Sturm left the agency to join the Par subsidiary last year.
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