1. The Government’s Perspective
Ways companies can effectively respond to an investigation, and the interplay of FDA and the USAO in conducting investigations
AUSA Ioana Petrou, USAO N.D. Cal.
Anne K. Walsh, FDA Associate Chief Counsel

2. Opinions expressed during this presentation are solely those of the speakers, and do not represent the views of the FDA nor the Department of Justice.

3. Overview Relationship between agency counsel and the USAO
Before investigations – don’t break the law
During investigations – what cooperation impresses prosecutors
Resolving investigations – clean-up
The relationship between agency counsel and the USAO (Walsh and Petrou)
Don't break the law (Walsh)
Once notified of a federal investigation, what cooperation impresses prosecutors (Petrou)
Clean-up

4. Relationship between FDA and USAOs
FDA needs USAO to prosecute violations of the FDCA
FDA supports USAO
A. FDA needs USAO to prosecute violations of the FDCA
1. Violations for introducing misbranded or adulterated devices into interstate commerce
2. Legal theories discussed earlier by Bragg/Bentivoglio
B. FDA supports USAO
1. Office of Criminal Investigations
2. Liaison to experts within the agency
3. Documents related to device approval, communications, inspections

5. Before Investigations
Compliance Programs
Communications with customers and regulators
Education
II. Don't break the law (Walsh)
A. Compliance program
1. Periodic internal audits
B. Communication with customers and regulators
1. Doctor and patient complaints
2. Seek guidance from FDA and HHS-OIG
C. Education
1. Training for in-house compliance directors
a. Know what is going on in the industry
2. Training for employees

6. During Investigations
Cooperate and act credibly
Produce documents and witnesses
Privilege waivers
How US learns about what everyone in the company says and does
III. Once notified of a federal investigation, what cooperation impresses prosecutors (Petrou)
A. Cooperate and act credibly
1. Strategic decision within the company, but if you choose to cooperate, do so early and completely
2. Remember that this is a relevant factor in decision whether to prosecute and at sentencing phase of a criminal trial
B. Produce documents and witnesses
C. Waivers of privilege
D. How US learns about what everyone in the company says and does

7. During Investigations
Tell us what happened
Assess what happened
Present US with support for position
White Papers
Presentations
Recognize that the government is not looking to impose criminal liability for mistakes, but that this is a highly regulated industry, so the stakes are higher

8. Resolving Investigations
Convince US that conduct will not happen again
McNulty Memorandum
Resolution
release
criminal vs. civil
individual vs. corporate liability
IV. Clean-up
A. Convince US that conduct will not happen again
B. DOJ's Principles of Federal Prosecution of Business Organizations (McNulty memo)
C. Resolution
1. Don't expect criminal release, or any resolution, that is broader than the conduct investigated (including resolution of state/local government suits)
2. Understand the differences between civil and criminal investigations
3. Culpability of corporation versus individuals
a. also discussed earlier by Bragg/Bentivoglio

9. Collateral Consequences
False Claims Act
Exclusion
Civil money penalties
Loss of accreditation
Short-term lending rates
Impact on mergers and other deals
Product liability suits
Shareholder derivative suits
Collateral consequences of criminal liability
False Claims Act
Exclusion
Civil Money Penalties
21 U.S.C. § 333(f)(1) - "any person who violates a requirement of the Act which relates to devices shall be liable to the US for a civil penalty in an amount not to exceed $15,000 for each such violation, and not to exceed $1,000,000 for all such violations adjudicated in a single proceeding."
Loss of accreditation
Creditors raising short-term lending rates
Impacts on mergers and other business deals
Product liability suits
Shareholder derivative suits

10. Questions?
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