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Executive Summary

DRUG DEBARMENT BILL PASSES SENATE APRIL 10 with protections for senior company officials who might be subject to debarment due to felony violations of subordinates who are debarred. The Pharmaceutical Manufacturers Association agreed to the provisions late in the evening of April 9, and the bill was prepared for Senate floor action the following day. Sens. Kennedy (D-Mass.), Hatch (R-Utah) and Metzenbaum (D- Ohio) worked out an agreement on HR 2454 and brought it to the Senate floor before a two-week Easter recess (April 13-25). The House cannot consider the Senate's changes until after the recess. HR 2454 passed the House unamimously last fall ("The Pink Sheet" Nov. 4, 1991, In Brief). The House is expected to accept the Senate changes rather than seek a House-Senate conference. The Senate bill adds provisions to bar individuals employed in the brandname drug industry as well as the generic sector. Last autumn, PMA objected to Senate plans for the added provisions on the grounds that they did not provide adequate due process protections for "high managerial agents" ("The Pink Sheet" Dec. 2, 1991, T&G-5). The current Senate bill reportedly includes protections sufficient to satisfy PMA's concerns in part by providing that persons debarred by FDA may request full judicial review. The Senate measure provides that "high managerial agents," who "had actual knowledge" or "took action to avoid such actual knowledge" of a felony violation by a fellow company representative, may themselves be debarred unless they "within a reasonable time" reported the violations to FDA or took "appropriate action that would have ensured that the process for the regulation of drugs was not undermined." As anticipated, the bill also differs from the House version in that it makes mandatory corporate debarment prospective; the penalty applies only to firms convicted after enactment of the legislation. Rep. Dingell (D-Mich.), principal House author of HR 2454, recommended the limitation on mandatory corporate debarment in March. The change benefits Par and firms that have recently settled charges against them -- Biopharmaceutics, West-ward, Able, Superpharm and Chelsea (see related items, T&G-10 and T&G-11).

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