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FDA AUTHORITY TO PURSUE CIVIL MONEY PENALTIES AGAINST FD&C ACT VIOLATORS RECOMMENDED BY CHIEF COUNSEL PORTER; AGENCY WOULD LIKE POWER TO ORDER RECALLS

Executive Summary

FDA should be authorized to pursue civil monetary penalties against violators of the FD&C Act as an alternative to criminal enforcement authority, the agency's Chief Counsel Margaret Jane Porter maintained at the Dec. 17-18 meeting of the Edwards Advisory Committee on FDA. "There ought to be expanded civil money penalty authority as long as the expansion in the statute had language that would allow us the flexibility to use either a civil money penalty or misdemeanor prosecution," Porter told the Edwards Committee. She emphasized that she was voicing her own opinion and not speaking for the agency. The FDA chief counsel stressed that she would like to see the agency have the option to pursue either civil or criminal penalties. She observed, however, that FDA "cannot guarantee" that it "would be able to sustain the position that we ought to have a free choice." Porter pointed out that the new medical device amendments provide for civil money penalties "for many violations" of the device regulations. She noted that "at the present moment the agency is split" as to whether that authority should be extended. "The agency is studying the matter closely, and my prediction is that we will come out in favor of an expanded authority, but I think that's premature." Getting civil penalty authority for FDA is becoming a cause celebre in some circles in Washington. The added authority was recommended, for example, at the Dec. 11-12 promotion and marketing hearings held by Sen. Kennedy (D-Mass.). Committee Chairman Charles Edwards, MD, Scripps Clinic president and former FDA commissioner, noted that field enforcement is the "backbone" of the agency but warned that a "crisis" in FDA's inspection capabilities may be "at hand." "If one looks historically at the FDA, one has to recognize that the field forces are, and over time have been, the backbone of this agency," Edwards said. The field investigators "have been ignored...and I think a crisis is not far, perhaps it is at hand." The shortage of staff in the field force was the primary reason cited by FDA for opposing the separation of the agency's food and drug responsibilities. Associate Commissioner for Regulatory Affairs Ronald Chesemore maintained that "if foods were removed from the FDA, as far as the field is concerned [the agency would lose] roughly 45% of our resources. It would really be devastating." FDA is "able to handle a lot" of its emergencies "because we can move people around," Chesemore continued. Therefore, if a separate food agency were established, the remaining drug agency "would have to replace almost everybody that you lost because you wouldn't have the flexibility that you now have -- including supervisors [and] experienced investigators." Former Commissioner Arthur Hull Hayes, MD, also recently rejected suggestions that the agency should separate drugs and devices from foods and cosmetics. Speaking at a Foresight Seminar on Oct. 29, Hayes used a medical analogy: amputation is not indicated to treat the common cold, appendicitis or pneumonia. The agency would like authority to order recalls, as opposed to requesting firms to recall products, Enforcement Director Alan Hoeting, of FDA's Office of Regulatory Affairs, told the Edwards Committee. Providing a "wish list" of enforcement authority for the agency's field force, Hoeting said the agency "would like to have the authority for the agency to be able, through its injunction procedures, to require a firm to recall products." FDA needs more authority to hold products suspected of being violative, Hoeting maintained. "We'd like to have administrative detention authority on all products regulated by the agency so that we can stop the movement of these products in emergency situations," Hoeting said. In addition, the agency believes it "can save a considerable amount of manpower if we can expand the statutory presumption of interstate commerce," he said. The agency would not have to prove that products are crossing state lines. That authority could also help in the effort to determine FDA's regulatory role vis-a-vis the states in labeling issues. Furthermore, FDA also wants "authority as an agency to bar the re-exportation of articles offered for import entry which are a hazard to health," Hoeting asserted. "At the present time," he explained, "those kinds of products may be shipped back out of the country if they are detained." Hoeting asked that the authority to inspect records be as extensive for all regulated products as it is for drugs and medical devices. "The agency has a rather wide inspection authority to inspect records of the manufacturers of prescription drugs and restricted medical devices," he said. "We'd like to have that broader inspection authority for all areas that are regulated by FDA." House Energy & Commerce/Oversight Subcommittee staff economist David Nelson, in a presentation before the Edwards Committee, echoed the opinion often expressed by his boss, Rep. Dingell (D-Mich.), that criminal investigations of the FD&C Act should be conducted by HHS Inspector General investigators. To support his contention, Nelson displayed a chart indicating that the HHS IG has referred vastly more criminal cases to the Justice Department than FDA. Porter contended that the reason for the disparity in the number of criminal cases referred to Justice is because FDA criminal cases are generally more complex, not because its investigators are less capable. "FDA criminal prosecutions are largely rather complicated," she said. On the other hand, she maintained, "most" cases referred by the IG, "to my understanding, are Medicare/Medicaid fraud -- essentially cashing false checks, making claims against the program, and they're relatively simple." Nelson also maintained that the process for FDA inspectors to obtain search warrants is far more complex, due to the layers of bureaucracy involved, than the procedure required of IG investigators. He displayed an illustration used by the Oversight Subcommittee during a July hearing that featured HHS Secretary Sullivan ("The Pink Sheet" July 23, p. 6). Porter responded that the process required of FDA inspectors is much more complex "on paper." However, she added, although FDA would like to "streamline" the procedure, the currently required clearances are "virtually simultaneous," and warrants are provided within a day or two. The chief counsel reflected the comments of HHS Assistant Secretary for Health James Mason, MD, who earlier in the day said Congress must provide additional resources whenever it assigns new responsibilities to FDA. "We have to say to the Congress: 'we have to have adequate resources to carry out our statutory responsibility,'" Porter said. Nelson responded that such comments presume that FDA is independent from the administration. "While Dr. Mason may well want to charge up to Capitol Hill and tell us that we simply haven't given him the resources to enforce the law, there's a GS-13 at OMB who's going to be holding onto his pantleg and not letting him," he said. "Whenever the Administration has asked for additional resources for FDA they got them, and in many cases they got more than they requested." The congressional aide reiterated his subcommittee's complaint about FDA's delay in publishing regulations for post-1962 ANDAs, which have been pending at FDA since 1984. That delay has contributed to the generic drug crisis. "A decent respect for the rule of the law requires that people regulated by a law understand what is expected of them," Nelson said. He called prompt rulemaking "a real key to voluntary compliance with the law." FDA's regs required under the 1984 Waxman-Hatch Act are "not even to OMB [the Office of Management and Budget] yet" but are floundering "within the interplay between the Office of General Counsel, Ms. Porter's office, and the FDA bureaucrats," Nelson maintained. The regs could have been drafted by one lawyer in a six-month period, Nelson contended. The delay "has nothing to do with resource problems, that has to do with bureaucracy problems."

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