Executive Insights from FDLI’s 2015 Enforcement, Litigation & Compliance Conference: Trends and Risks for 2016 and Beyond

Jack Garvey |

FDLI Enforcement Conference, Dec 2015Early December is one of my favorite times of year. Coming off of Thanksgiving and looking forward to the end-of-year holidays, it’s when I get to reflect on the past 12 months, and think about what the next year will bring. Also though, it’s when the annual FDLI Enforcement, Litigation and Compliance Conference is held every year in Washington, DC.  For me, this is a “must-attend” event, as the conference brings together some the most-respected speakers and attendees in FDA-regulated industry to discuss the most pressing of matters:   enforcement, litigation and compliance. The conference is widely attended by senior executives in quality and regulatory;  in-house FDA regulatory attorneys;  food and drug law attorneys from the private bar;  senior-level  FDA staff, and leading consulting firms.

Some of the notable high-profile speakers at last week’s conference included:

  • Jonathan Olin, Deputy Assistant Attorney General, Civil Division, US Department of Justice
  • Michael Roosevelt, Deputy Director, Office of Compliance, CFSAN
  • Mary Malarkey, Director, Office of Compliance and Biologics Quality, CBER
  • Cynthia Schnedar, Director, Office of Compliance, CDER
  • CAPT Sean Boyd, Acting Director, Office of Compliance, CDRH
  • Julie Taitsman, Chief Medical Officer, Office of Inspector General, US Department of Health and Human Services
  • Beth Weinman, Associate Chief Counsel for Enforcement, Office of Chief Counsel, FDA
  • George Karavetsos, Director, Office of Criminal Investigation, Food and Drug Administration
  • Douglas Stearn, Director, Office of Enforcement and Import Operations, ORA
  • Howard Sklamberg, Deputy Commissioner, Global Regulatory Operations and Policy, FDA

This year’s conference provided great insight into the government’s current thinking and resulting enforcement approaches against FDA-regulated companies. Overall, the multiple responsible agencies within the US Government – FDA, DOJ, OIG, FTC, DEA to name a few – are working closely together and are fully aligned to root out both bad actor corporations and those companies not committed to full compliance with the laws.  Historically, the government’s focus has been primarily domestic in nature. However, inspection activity continues to increase for all regulated product classes at sites outside the United States.   Since manufacturing continues to shift to offshore locations, ex-US inspection activity will continue to be an area of expanded focus. The government is fully committed to extend its reach to bad actor and non-compliant companies outside the US borders that would place the American public at risk.

It is remarkable to see the level of program alignment not only within FDA Centers, but also among the FDA Office of Criminal Investigation (OCI), US Department of Justice (DOJ), US Federal Trade Commission (FTC), and the Office of Inspector General (OIG). Senior litigating and prosecuting attorneys from these organizations spoke consistently and firmly on their combined efforts to protect US public health, and to find and punish those companies and individuals that would take advantage of the public for pure profit motives.

There were a few prominent themes and topics discussed at the conference that are important to note.  This information may be useful to executives, in-house counsel, and staff compliance personnel that did not have the opportunity to attend this important meeting:


  1. Seeking individual executive accountability under the “Yates Memorandum” will continue to be a focus area for future government enforcement activity.

The Yates Memorandum has received significant attention from the Food and Drug bar and other attorneys involved with corporate compliance activities.  The Yates Memorandum reiterates the traditional position of the US Department of Justice that looks to establish individual accountability for the actions of corporate executives where corporate misconduct occurs.  It is clear from all of the government speakers that the government is firmly committed to embracing and implementing the principles of the Yates Memorandum, and they will seek to implicate and charge individual senior executives within companies that are directly, or even indirectly, responsible for corporate misconduct.

There was much discussion (and among lawyers that means differing views) at the Conference about Yates and the government focus.   Whether or not this is a true substantive change, or, something that is really more of a reiteration of existing policy, was not broadly agreed upon.   However, one thing is clear:  senior executives need to fully understand their responsibility under applicable law and corresponding expectations of the government regarding their conduct in their individual roles within corporations.

There is no function where this is more significant than for heads of quality (VPs of Quality, Senior Directors of Quality, Chief Quality Officers, etc.) within pharmaceutical, medical device, food, dietary supplement and other FDA-regulated firms.  It can’t be more plainly stated than the following:   your personal liberty could be at risk for your actions, decisions, and conduct in your day-to-day job within your company.   The government may / will seek to hold you personally responsible for your actions or decisions where violative conduct under the Food Drug and Cosmetic Act occurs.  If you don’t understand what this means, you should speak with your in-house counsel for guidance.

  1. Both dietary supplement companies and pharmacy compounding companies are squarely in the crosshairs of the FDA and the US Department of Justice.

Both of these industry segments, for different reasons, are under significant scrutiny, and further enforcement action is almost certain.

Pharmacy compounding companies continue to challenge their responsibilities under federal law, and challenge the clear expectations and authority of the FDA.  There continues to be a high number of problem companies among the compounders who are not in compliance with current Good Manufacturing Practices, and who place the American public at risk from adulterated products.

Bad actors within the otherwise reputable dietary supplement industry are giving the entire industry a bad name, and providing a focus for enforcement actions.  The challenge for dietary supplement companies is that all companies are likely being painted with the broad-brush of the potential bad actors.    Notable issues include the preponderance of drug-related claims for non-drug products; inclusion of APIs in “natural” or “herbal” products; and compliance with manufacturing regulations.  It would serve all companies within the dietary supplement industry well to ensure that they have an aggressive and robust approach to their compliance and quality management programs, so that when an FDA Investigator walks through their door, they can tell a complete and comprehensive story as to how they are ensuring product quality, protecting the consumer, and complying with all applicable FDA requirements and expectations.

  1. Food safety through compliance enforcement remains a top priority of both the FDA and the related government organizations.

The topic of food safety was specifically cited by both Jonathan Olin, Assistant US Attorney General, and Michael Roosevelt, Center for Food Safety and Applied Nutrition (CFSAN), as an area that will get significant attention over the next year or so. Of particular concern is that all food companies will need to have Food Safety Plans in place by September 2016.   These plans are designed to ensure that food manufacturers have identified the full complement of risks from food production and processing activities; have controlled and mitigated those risks; and can explain those risks and control frameworks properly to an FDA Investigator.

Although developing Food Safety Plans is not excessively complicated (though they do require specialized knowledge and skills), they represent an important step in contemporary food safety assurance and will be a focus area for the Food and Drug Administration for the future.  There are an extraordinarily large number of products and product families that need attention, and likely, a large number of companies that have not yet engaged in the development of these plans.  Food companies would do well to ensure that they have obtained expert assistance to develop and get plans in place to address this requirement by the September 2016 implementation date specified under FSMA.

  1. International enforcement activities and ex-US supply chains will be an area of increasing focus for FDA enforcement activity.

Threats to the US public from ex-US manufacturing operations are mainly caused by two types of companies:  a) those that engage in direct intentional criminal conduct to defraud the US consumer with counterfeit and dangerous products; and b) those that fail to fully embrace their obligations under US Food and Drug laws and requirements, and that engage in sub-standard, non-compliant conduct to improve the profitability of their ongoing operations.  Both of these types of organizations are clear targets of the FDA and related enforcement agencies, and both will continue to be at risk of significant enforcement investigations and actions over the coming years.    As an example of this focus, Sean Boyd, Acting Director, CDRH, Office of Compliance, stated that CDRH is increasingly focused on ex-US inspections, and is driving to a 50-50 split between US domestic and ex-US inspections in the near future.  This shift is reflective of the overall shift of the medical device supply chain to ex-US supply companies.  Enforcement attention will continue to be focused on pharmaceutical supply chains in India and China as well.   A main focus here is, of course, on data integrity and the establishment and assurance of the foundational programs that will ensure the agency can rely on data and documentation prepared by these companies supplying products into the US.   Presentations by the regulators focused on how many of the deficiencies observed are fundamental in nature, and reflect basic lack of understanding in areas like good documentation practice, data management principles, roles and responsibilities, and training.

  1. Tobacco enforcement, the new kid on the block for FDA regulation, will continue to see increasing enforcement activity and focus.

It is clear that the Center for Tobacco Products has continued to mature, and its enforcement program has become robust and sophisticated.  The level of activity in the Center directed towards enforcement has increased year-over-year since the center was put into service.  This important focus area will remain important, and will continue to increase in its scope and rigor over the coming years.

There were many, many more interesting topics of discussion at this important conference, such as DQSA / Track and Trace; pharmaceutical quality metrics (again!); role of social media and government perspective and enforcement;  mHealth and the digital revolution; CDRH CTQ initiative; etc.    For those of us who spend their days dealing with enforcement and compliance, a conference like this validates the important work that we perform for our client companies by reducing business risk, and as an additional benefit, in helping to ensure safe and effective products for the American people.

If anyone would like additional insights into topics discussed at this program, please feel free to contact me at your convenience.

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