1. © Hogan & Hartson LLP. All rights reserved. Clinical Trials Track: Key Compliance Risks FDA Overview Meredith Manning November 8, 2007

2. © Hogan & Hartson LLP. All rights reserved. Agenda This session kicks off the R&D and Clinical Trials Track We would like to give you an overview of the law and the perspective of – the government – a large regulated company Kathleen Meriweather recently joined E&Y from the U.S. Attorney’s Office in Philadelphia Julie Kane is the Chief Compliance Officer at Novartis Pharmaceuticals Corporation

3. © Hogan & Hartson LLP. All rights reserved. FDA Legal Considerations FDA regulations govern clinical investigations of products that are subject to review and approval by FDA – some Phase IV studies are exempt but the requirements for IRB oversight and informed consent remain in place FDA imposes very specific responsibilities on sponsors and investigators Sponsors must: – select only qualified investigators – ship drug only to participating investigators – submit voluminous information about the investigators and the sites to FDA, including the protocol and financial disclosure forms for investigators – monitor sites

4. © Hogan & Hartson LLP. All rights reserved. FDA Legal Considerations Investigators must do even more: – follow the protocol – assure proper IRB review and approval – communicate drug information to patients – keep adequate records and make them available to monitors – file reports, including safety alerts Investigators often make mistakes – big mistakes! – “[Y]our failure to adequately supervise the study resulted in the submission of false information to FDA or the sponsor in required reports.” – “Review of the times recorded on the study subject enrollment form … document that eleven samples collected on January 29, 2004 … were tested in the lab before they were received by the lab.”

5. © Hogan & Hartson LLP. All rights reserved. FDA Legal Considerations Consequences can be substantial – data is disqualified – the investigator can risk debarment – relationships with the investigator and the site can be imperiled FDA enforcement tools include – Warning Letters – Imposition of Restrictions Informal Agreement/Corrective Actions Disqualification (NIDPOE, NOOH process) Debarment – Section 306 of the Federal Food, Drug, and Cosmetic Act – Injunction – Publicity

6. © Hogan & Hartson LLP. All rights reserved. FDA’s Park Doctrine The FDCA is a strict liability statute – government need not prove intent to obtain a misdemeanor conviction In the 1970s, Mr. Park faced prosecution despite his lack of knowledge or intent about the rats in his food warehouse The Supreme Court held that he could be held liable and convicted Today, Park is seeing a resurgence – CEO of Purdue Pharma pled guilty to a misdemeanor and paid $35M in penalities – NuMed pled guilty to allegations involving irregularities of a clinical trial And, the government’s focus is expanding to include clinical investigations

7. © Hogan & Hartson LLP. All rights reserved. Other Gov’t Enforcement Options HHS – Office of Human Research Protections – Assurances of Compliance (Human Subject Protections Requirements) – Corrective Actions Including Suspension of Studies, Withdrawal of Assurance and/or Debarment HHS - Office of Research Integrity – Assurances of Compliance – Corrective Actions Office of Inspector General – HHS – Investigator agreements must fall within an AntiKickback statute safe harbor – False Claims Act/Corporate Integrity Agreements Qui Tam/False Claims Litigation – Private parties may blow the whistle – Government may join – Enforcement tool of the future?

8. © Hogan & Hartson LLP. All rights reserved. FCA Case United States ex rel. Sanford Gross v. AIDS Research Alliance, et. al. 415 F.3d 601 (7th Cir. 2005) – Gross was patient in NIH-funded AIDS trial – Alleged significant violations of protocol, Good Clinical Practices recordkeeping requirements and failure to obtain proper informed consent – Alleged that annual filings to NIH were therefore false certifications – Case dismissed for inadequate factual pleadings

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