1. Food and Drug Law Institute Understanding cGMPs Failure to Comply: What Are the Consequences? Jeffrey Steger Assistant Director, Consumer Protection Branch U.S. Department of Justice July 10, 2013 The views expressed are the author’s and do not necessarily represent the views of the Department of Justice or any other agency.

2.   Consumer Protection Branch (formerly Office of Consumer Litigation) is part of DOJ’s Civil Division.   CPB enforces through civil litigation and criminal prosecutions a number of Federal statutes that protect the public health and safety and protect consumers from unfair practices.   Under the authority of 28 U.S.C. § 510, the Attorney General has delegated to the Civil Division’s AAG the responsibility to conduct, handle or supervise “all civil and criminal litigation and grand jury proceedings arising under the Food, Drug, and Cosmetic Act....” Consumer Protection Branch

3. CPB’s Enforcement Priorities   Identify and prosecute the most serious instances of food, drug, and medical device violations.   Deter future violations, especially those involving safety concerns or fraud.   Protect consumers from adulterated or misbranded products.   Protect integrity of regulatory process.

4. DOJ HAS MADE cGMP COMPLIANCE A PRIORITY   Work closely with FDA to ensure that the American people are protected from food, drugs, and medical devices that are adulterated or misbranded within the meaning of the FDCA and its implementing regulations.   CPB has filed a significant number of adulterated food and drug cases over the last few years.   CPB will continue to bring affirmative actions to protect the public from adulterated food and drugs.

5. In the past few years (sample of cGMP cases)...   Civil   Ben Venue   Med Prep   Criminal/Global Resolutions   SB Pharmco, subsidiary of GSK   Ranbaxy

6. Recent Civil Cases and Settlements Related to cGMP

7. Ben Venue (N.D. Ohio 2013) Defendants Defendants Company Company President and CEO V.P. Operations V.P. Quality Operations Company manufactures numerous generic sterile injectable drug products, including cancer medications.

8. Ben Venue 2011 Inspection by FDA (48 deviations noted): 2011 Inspection by FDA (48 deviations noted): Company failed to create and follow appropriate procedures to prevent contamination of drugs which were purported to be sterile. Company failed to properly clean and maintain its equipment to ensure the safety and quality of the drugs it manufactured. Company failed to conduct adequate investigations of drugs that did not meet their specifications.

9. Ben Venue Inspectional and Regulatory History Inspectional and Regulatory History Numerous inspections since 1997 2011 inspection observed deviations similar to deviations observed during its many previous inspections Approximately 40 recalls since 2002, including 10 in 2011 and 10 in 2012 9 Class I recalls

10. Ben Venue Resolution Signed Consent Decree entered by Court Signed Consent Decree entered by Court Injunction establishes a series of steps which must occur before company can fully resume operations: Retention of an expert to inspect the company’s facility; Development and then implementation of a remediation plan; and Inspection by FDA to confirm that the company’s manufacturing processes are fully compliant with the law.

11. Ben Venue Resolution Unique Aspect of Resolution: Company may continue to manufacture and distribute a subset of their drugs, which FDA determined are currently in shortage (domestically or abroad) or are vulnerable to shortage. However, prior to distribution of each batch of these drugs, company’s expert must conduct a batch-by- batch review and certify that no deviations occurred during the manufacture of the drug that would adversely affect the safety or quality of the batch.

12. Med Prep (D. N.J. 2013) Defendants Defendants Company, NJ-licensed pharmacy Company, NJ-licensed pharmacy President and Owner President and Owner Company Company manufactured numerous sterile drug products, including pain medications, anesthesia, operating room drugs and oncology and dialysis drugs. Company did not receive patient-specific prescriptions.

13. Med Prep 2013 Inspection by FDA 2013 Inspection by FDA Company failed to create and follow appropriate procedures to prevent contamination of drugs which were purported to be sterile. Company failed to properly clean and maintain its equipment to ensure the safety and quality of the drugs it manufactured. Company failed to conduct adequate investigations of injectable drugs that failed to meet minimum quality specifications.

14. Med Prep Complaint also alleged that company did not have approved NDAs or ANDAs for any of the products it produced. FDA’s inspection followed reports that the company had distributed intravenous drug products containing visible contaminants that were confirmed to be mold. Company voluntarily recalled all products in the field and has halted production.

15. Med Prep Resolution Signed Consent Decree entered by Court Signed Consent Decree entered by Court Injunction establishes a series of steps which must occur before company can resume operations: Retention of an expert to inspect the company’s manufacturing facility; Development and implementation of a remediation plan; and Inspection by FDA to confirm that the company’s manufacturing processes are fully compliant with the law.

16. Criminal Cases Related to cGMP

17. SB Pharmco (D. Mass. 2010) Defendant SB Pharmco Puerto Rico Inc., a subsidiary of GSK. Defendant SB Pharmco Puerto Rico Inc., a subsidiary of GSK. Global resolution including criminal and FCA claims. Global resolution including criminal and FCA claims.

18. Criminal Charges Company failed to ensure that Kytril and Bactroban finished products were free of contamination from microorganisms. Company’s manufacturing process caused Paxil CR two-layer tablets to split. The splitting caused the potential distribution of tablets that did not have any therapeutic effect and tablets that did not contain any CR mechanism.

19. Criminal Charges Avandamet tablets did not always have the FDA approved mix of active ingredients, and, as a result, potentially contained too much or too little of the ingredient with the therapeutic effect. Company’s facility had longstanding problems of product mix-ups, which caused tablets of one drug type and strength to be commingled with tablets of another drug type and/or strength in the same bottle.

20. FCA Allegations GSK caused false claims to be submitted to government health care programs for certain quantities of adulterated drugs. GSK sold certain batches, lots or portions of lots of drugs, the strength of which differed materially from, or the purity or quality of which fell materially below, the strength, purity or quality specified in the drugs’ FDA applications or related documents. GSK thereby knowingly caused false and/or fraudulent claims to be submitted to, or caused purchases by, federal health care programs.

21. Global Resolution Pled guilty to felony charge relating to the manufacture and distribution of certain adulterated drugs. Criminal fine and forfeiture: $150 million Settled FCA allegations Resolved qui tam compliant brought in District of Massachusetts $600 million

22. Ranbaxy (D. MD. 2013) Defendant Ranbaxy USA Inc., a subsidiary of Ranbaxy Laboratories Limited. Defendant Ranbaxy USA Inc., a subsidiary of Ranbaxy Laboratories Limited. Global resolution including criminal guilty pleas and FCA claims. Global resolution including criminal guilty pleas and FCA claims.

23. Criminal Charge Related to cGMP Introduction into interstate commerce of certain batches of adulterated drugs produced in India. Introduction into interstate commerce of certain batches of adulterated drugs produced in India. Sotret, gabapentin, and ciprofloxacin Sotret, gabapentin, and ciprofloxacin 2006 FDA inspection at one facility found 2006 FDA inspection at one facility found incomplete testing records and an inadequate program to assess the stability characteristics of drugs.

24. Criminal Charge Related to cGMP FDA inspections of the second facility in 2006 and 2008 found the same issues with incomplete testing records and an inadequate stability program, as well as significant cGMP deviations in the manufacture of certain active pharmaceutical ingredients and finished products.

25. Ranbaxy Criminal Plea Pled guilty Pled guilty to felony charge relating to the manufacture and distribution of certain adulterated drugs made at two of Ranbaxy’s manufacturing facilities in India. Count One related to cGMP deficiencies Pled guilty to two felony charges relating to the failure to file Field Alert Reports.

26. Ranbaxy Criminal Plea Also pled guilty to four felony counts of knowingly making material false statements to FDA. Detailed Agreed Statement of Facts Criminal fine and forfeiture: $150 million

27. FCA Allegations Ranbaxy caused false claims to be submitted to government health care programs for certain drugs manufactured at two plants in India. Ranbaxy manufactured, distributed, and sold drugs whose strength, purity, or quality differed from the drug’s specifications or that were not manufactured according to the FDA-approved formulation. Ranbaxy knowingly caused false claims for those drugs to be submitted to federal health care programs.

28. Civil Resolution Settled FCA allegations Resolved qui tam complaint brought in District of Maryland; $350 million Separately, in 2012, Separately, in 2012, Ranbaxy agreed to an injunction that prevents drugs produced at the two facilities in India from entering the U.S. until the facilities have been brought into full compliance with the FDCA and its implementing regulations.

29. Lessons What can industry do to seek to prevent cGMP deficiencies on a going forward basis? What can industry do to seek to prevent cGMP deficiencies on a going forward basis? Compliance is a company wide effort. Compliance is a company wide effort. Shared ownership between compliance, quality, and operations. Shared ownership between compliance, quality, and operations.

30. 2013 Compliance Congress 1) Do we have the right people? 2) Do our people have the right incentives to see problems, to report problems, and to fix problems? 3) Are people satisfied and engaged? 4) Do our policies acknowledge how people work and what they are capable of? 5) Do compliance personnel have visibility into what employees are actually doing? http://www.justice.gov/iso/opa/civil/speeches/2013/civ-speech-130129.html http://www.justice.gov/iso/opa/civil/speeches/2013/civ-speech-130129.html

31. Jeffrey Steger Assistant Director, Consumer Protection Branch U.S. Department of Justice Jeffrey.Steger@USDOJ.gov