Cgmp Violations Should Not Be Used as a Basis for Fca Actions Absent Fraud
Jurisdiction | United States,Federal |
Citation | Vol. 38 No. 01 |
Publication year | 2014 |
I. INTRODUCTION
Since Congress amended the False Claims Act (FCA) in 1986, the statute has evolved into a seemingly boundless weapon for enforcing other statutes and regulations applicable to every industry that accepts any form of government funding. Use of the FCA by the Department of Justice (DOJ) and by private citizens bringing actions on behalf of the U.S. government to enforce other statutes and regulations is particularly evident in the field of health care.(fn1) The FCA has been utilized in actions where the allegations include offlabel promotion of drugs, kickbacks, and violations of current good manufac-turing practices (cGMPs) by linking the alleged violation with the government reimbursement under Medicare and Medicaid. cGMP violations, however, are historically enforced by the Food and Drug Administration (FDA) under the Food, Drug, and Cosmetic Act (FDCA), which regulates the safety and ef-fectiveness of drugs and devices. Whether alleged cGMP violations are sub-ject to enforcement by the FDA under the FDCA or by the DOJ and private citizens on behalf of the United States government under the FCA, or both, has been heavily debated recently.(fn2)
The DOJ successfully used the FCA as the statutory hook to enable its enforcement authority in an action against GlaxoSmithKline (GSK)(fn3) and Ranbaxy USA, Inc.(fn4) DOJ alleged that both companies released adulterated drugs into the stream of commerce in violation of FDCA cGMPs.(fn5) The action against GSK resulted in a $750 million settlement with the United States At-torney's Office for the District of Massachusetts;(fn6) Ranbaxy settled with the District of Maryland for $500 million.(fn7) These enforcement actions seem to indicate that the FCA may be used to enforce FDCA cGMP, quality system regulation (QSR) violations, or both.(fn8) However, in February 2014, the Fourth Circuit in
This Article examines the statutory background of cGMPs and QSRs, considers enforcement of cGMP violations by both the FDA un-der the FDCA and the DOJ under the FCA, and proposes that fraudulent and felonious violations of cGMPs should be enforced by the DOJ under the FCA because DOJ has the resources and the expertise to investigate and prosecute such violations. Non-fraudulent cGMP violations, on the other hand, should be enforced by the FDA under the FDCA because the FDA has both the subject matter expertise and the statutory mandate to regulate drugs and medical devices.
II. STATUTORY BACKGROUND OF CGMPS AND QSRS
The government heavily regulates the manufacturing of drugs and medical devices. under the FDCA, the Secretary of Health and Human Services may
Consistent with this statutory mandate, the Secretary has created a "quality system regulation," or "QSR," that sets forth current good manufacturing practice requirements, commonly referred to as cGMPs.(fn11) The FDA has statutory authority to enforce violations of the FDCA.
QSRs "govern the methods used in, and the facilities and controls used for, the . . . manufacture . . . of all finished devices intended for human use," and are "intended to ensure that finished devices will be safe and effective and otherwise in compliance with the [FDCA]."(fn12) These regulations require manufacturers to establish specifications and controls for quality and safety.(fn13) The FDA's Medical Device Quality Systems Manual specifies:
The regulations are flexible, however. The FDA notes that "'[e]ach manufacturer shall establish and maintain a quality system that is appro-priate for the specific device(s) designed or manufactured, and that meets the requirements of this part.' The word 'appropriate' means that the rule is a flexible regulation."(fn15) The FDA explains:
It is not practical for the FDA to delineate quality system elements for each of the numerous devices on the market. Instead, general objec-tives are specified and manufacturers are left to determine the best meth-ods to attain quality objectives.(fn17)
The FDA also requires that drug makers' manufacturing facilities comply with cGMPs, which establish the minimum requirements for the methods, facilities, and controls used in manufacturing and processing human drugs in order to prevent the production of unsafe and ineffective products.(fn18) To ensure compliance, the agency conducts inspections peri-odically and in conjunction with drug applications. Compliance with the cGMP requirements assures that drugs and devices meet the safety re-quirements of the FDCA and have the quality, purity, identity, and strength characteristics that they purport or are represented to possess. Drugs and devices not manufactured, processed, packaged, or held in conformance with cGMP requirements are deemed adulterated within the meaning of 21 U.S.C. § 351(a)(2)(B).(fn19)
Because the FDCA does not provide a definition of what constitutes cGMPs, the determination of what constitutes cGMPs is often a matter of judgment and interpretation20 The FDA uses the concept of "current" GMP to continuously advance industry best practices and to advance practices not yet used in the industry but that the FDA determines could improve manufacturing controls and drug or device product integrity.(fn20) As a result, the FDA establishes cGMP requirements informally via speeches, guidance documents, FDA investigators' inspection observa-tions, and letters to manufacturers.(fn21) A violation may "result from a good faith technical dispute about what cGMP requires in a particular set-ting."(fn22) Theoretically, a conclusion by a field investigator that a particu-lar practice violates cGMP may reflect nothing more than miscommuni-cation between the agency and industry.(fn23)
Significantly, as noted, failure to comply with the QSR "renders a device adulterated under section 501(h)" of the FDCA, and "[s]uch a device, as well as any person responsible for the failure to comply, is subject to regulatory action."(fn24) Under 21 U.S.C. § 351(a)(2)(B), a drug is adulterated if:
Once the FDA deems a drug or device adulterated, the FDA has several enforcement tools in its arsenal to remedy the manufacturing failure and to protect consumers from exposure to the drug.
The FDA is responsible for investigating violations of the FDCA, including those related to adulterated drugs and devices.(fn26) The Agency may exercise its enforcement authority, derived from 21 U.S.C. § 331, when a prohibited act has been identified. Prohibited acts include Interstate shipment of adulterated drugs and devices, and selling devices not made in conformance with QSR or cGMP requirements.(fn27) The...
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