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NAPM ANNUAL MEETING GUESTS FROM FDA MUST REIMBURSE SUBSIDIES

Executive Summary

NAPM ANNUAL MEETING GUESTS FROM FDA MUST REIMBURSE SUBSIDIES provided by the association for costs incurred above the maximum government per diem, FDA drug division supervisors have announced in internal memos to staff. In a sweeping administrative action, the agency is requiring refunds to the National Association of Pharmaceutical Manufacturers from those FDA staff whose lodging and meals were subsidized by NAPM at the organization's past annual meetings in Puerto Rico. During the week ending Dec. 22, FDA supervisors sent individual memos to employees who had attended NAPM meetings over the last five years, citing sums of up to $2,500 as being owed to the association. FDAers will be required to send the association a check for the amount and obtain a receipt as proof of payment by March 30. Most of the memos indicate that the FDA staff had inadvertantly compromised their standard of conduct by accepting subsidies from NAPM. However, several employees were admonished or reprimanded for charging additional items to hotel bills and expecting NAPM to cover the cost. Twenty employees have received the memos requesting reimbursement to NAPM and other individuals. FDA also sent memos to several staff members, who did not attend NAPM meetings, but who had accepted nominal gifts from industry sources. For example, five FDA generic division personnel were invited to a restaurant dinner in 1987 with two Warner-Lambert execs, who paid the bill of $228. The lowest amount owed by an FDA staff member is $2. * The FDA action was taken during the first week of Acting Commissioner Benson's tenure. It can be read as a signal of the new commissioner's intent to deal quickly and firmly with the lingering perceptions of FDA improprieties and to try to erase irritants for agency critics. Rep. Dingell (D-Mich.), chairman of the House Commerce/Oversight Subcommittee, recently contacted FDA with regard to agency employees who had received subsidies. At a May hearing before Dingell's subcommittee, the HHS Inspector General estimated that over $20,000 in NAPM subsidies have been accepted by FDA employees from 1985 to 1988 ("The Pink Sheet" May 15, p. 11). The IG found in an investigation conducted in early 1989 that at the four annual meetings an NAPM-contracted travel agency billed FDAers for only the maximum government per diem amount, about $80-$100, allowed for room and meals. NAPM picked up the remaining expenses without informing FDA. IG Investigator Linda Little testified that 15 FDA officials had taken advantage of the subsidized travel arrangements with NAPM. They included Charles Chang, Shrikant Dighe, Nathaniel Geary, William Gilbertson, Charles Ise, Kent Johnson, Thomas Layloff, Jr., Mary Frances Lowe, Jack Meyer, Daniel Michels, James Morrision, John Norris, Frank Pelsor, Peter Rheinstein, and Marvin Seife. NAPM Executive Director Robert Milanese recently responded to Dingell's accusations of improper activity on the part of the association and FDA participants at the annual meeting. In a Dec. 19 letter to FDA Acting Commissioner James Benson, Milanese wrote that "NAPM vehemently and unequivocably rejects Mr. Dingell's blanket indictment of the membership of NAPM as guilty of illegal or unethical activity." He emphasized that "for over 35 years the NAPM meetings have been a successful forum for discussions of the important issues that affect FDA and NAPM." In defense of FDA participants at the NAPM meetings, Milanese said that agency employees "should be commended for their work and not accused of any impropriety." He added: "We trust that the agency will not be intimidated by these media-obsessed antics [of Dingell's]."

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