CRIMINAL CHARGES FOR EXECUTIVES: PART OF NEW FDA INITIATIVE
In a March 4th letter to Senator Chuck Grassley, the Ranking Member of the Committee on Finance, Commissioner Margaret Hamburg indicated that FDA plans to “increase the appropriate use of misdemeanor prosecutions … to hold responsible corporate officers accountable” and has developed a yet to be released criteria for determining when these criminal prosecutions will be used. This letter was in response to a report released by the Government Accountability Office (GAO) entitled: Food and Drug Administration: Improved Monitoring and Development of Performance Measures Needed to Strengthen Oversight of Criminal Misconduct Investigations.
The dietary supplement industry is accustomed to Warning Letters, Consent Decrees and other “Civil” resolutions as a result of violations of the Food, Drug and Cosmetic Act (FDCA). However, we are seeing a growing initiative by the FDA Office of Criminal Investigations (OCI), in conjunction with the Department of Justice (DOJ) and United States Attorneys Offices across the country, to pursue criminal charges for violations of the FDCA such as misbranding and adulteration of dietary supplements. In fact, our office has been handling cases against dietary supplement companies where not only is the corporation charged with violations, but the company’s Executives are individually charged with misdemeanor and in some cases felony violations of the FDCA. The misdemeanor charges or “responsible corporate officer doctrine,” mentioned in Commissioner Hamburg’s letter, mean that executives can be found guilty of a misdemeanor, … by virtue of having authority to prevent, detect or correct company violations of the FDCA.
Unfortunately for corporate executives, this is a difficult charge to defend if, for instance, adulteration of a dietary supplement product is found. While a felony misbranding charge requires evidence of “intent to defraud,” the misdemeanor charge may be levied simply by a finding that a product is mislabeled in violation of the Food, Drug and Cosmetic Act. This highlights the significance of FDA discretion in these kinds of investigations, although a United States Attorney’s Office still must agree that a particular set of facts warrants a criminal prosecution in order to proceed.
Over the past two years, we have seen numerous instances of misdemeanor prosecutions primarily involving misbranded or adulterated prescription drugs, but we have also seen a rise in these kinds of prosecutions involving misbranded or adulterated supplements. Some of the most well publicized cases involve “male enhancement” products that are found to contain what the FDA has characterized as “analogues” of prescription drugs used to treat erectile dysfunction. FDA views these instances of adulteration as a threat to the health and safety of consumers, which provides an even greater motivation to seek criminal prosecutions in these kinds of cases. This should be a cause for concern to any company or individual seeking to market products in this category. The rampant “contamination” of the raw materials used in these products is often difficult or nearly impossible to detect under standard quality control procedures, as the newer analogues are unknown even to sophisticated testing facilities. Whether there was any actual knowledge or intent on the part of executives, they are still vulnerable to criminal prosecution under the aforementioned doctrine.
Some critics of the sports nutrition industry and of FDA enforcement have suggested that these kinds of criminal prosecutions should be used to address adulteration of dietary supplement products in the “weight loss” and “muscle building” category. But following FDA’s investigations of companies across the country that marketed supplements allegedly containing adulterated ingredients, the sports nutrition industry was put on notice that FDA intends to enforce DSHEA and investigate violations of the Food, Drug and Cosmetic Act.
Industry trade organizations have long been urging Congress not to introduce new legislation that would affect the DSHEA, but rather to encourage the regulatory agencies to enforce the laws that currently exist. It certainly seems that FDA has begun to do just that.