The ongoing public health crises of opioid addiction and youth vaping1 undoubtedly captured significant attention and enforcement resources in 2019, a phenomenon that is unlikely to change as we head into 2020. However, despite the time and energy devoted to these issues, FDA and its partners at the Department of Justice ("DOJ") nonetheless took significant regulatory and judicial action in 2019 that brought attention to alleged compliance gaps across the medical and health product industries, focusing on entities potentially making higher risk products, such as sterile injectables and stem cell therapies, and on foreign and domestic facilities that may have received less oversight in the past (e.g., API and OTC drug manufacturers). The agencies also took action in 2019 against entities allegedly distributing unapproved or non-conforming products, marketing products without sufficiently highlighting important risks or disclosing material information about product indications and limitations of use, failing to comply with regulatory reporting requirements, and refusing to cooperate with FDA inspections.
DOJ continued to use the False Claims Act ("FCA") to take enforcement action in connection with conduct by FDAregulated companies that some might argue fell squarely within FDA's regulatory orbit. However, the number of FCAonly settlements focused on core FDA regulatory issues continues to diminish as DOJ's civil and criminal fraud units focus more of their attention on anti-kickback theories and more traditional health care fraud.
This year-end review recaps notable enforcement actions involving FDA-regulated entities in 2019 and comments on trends likely to continue in 2020.
Across the federal government, addressing the nation's opioid addiction crisis was the number one public health concern in 2019, and is likely to remain so in 2020. FDA worked closely with partner agencies, including DOJ, Drug Enforcement Agency ("DEA"), and Customs and Border Protection ("CBP"), to prosecute opioid-related fraud and abuse; crack down on the marketing of unapproved and misbranded opioids, and unapproved products intended for the treatment of opioid addiction or for withdrawal; and stem the flow of unapproved products and illicit substances (not approved for use in any legally marketed drug) across the border. 2
The SUPPORT Act
Over the past year, FDA has worked to implement the SUPPORT Act, which expanded the agency's regulatory authority with respect to opioids, including by making it easier for FDA to detain illegal imports of FDA-regulated products, to debar those convicted of a felony for illegal importation and to issue mandatory recall orders for controlled substances. 3 As part of those efforts, FDA and CBP devoted additional resources to enhance screening of packages entering the United States through international mail facilities. Since the law's enactment in October 2018, FDA has identified more than 9,000 products at such facilities as illicit drugs that pose significant public health risks and has issued multiple notices of debarment for a felony conviction involving the illegal importation of drugs. 4 Outside of the enforcement context, the agency also has taken steps under the SUPPORT Act to clarify FDA post-market authorities, provide guidance on the agency's risk-benefit framework for review of opioid analgesic drugs, and identify barriers to abusedeterrent formulations under Medicare. 5
FDA sent multiple opioid-related warning letters in 2019, at times in tandem with other federal agencies. 6 In September, FDA and the DEA jointly issued first-of-their-kind letters to four online networks warning about the sale of unapproved opioids and other Controlled Substances Act ("CSA") violations. 7 Since 2017, FDA has sent warning letters to more than 20 networks operating over 450 websites and has brought more than 450 domain names to the attention of search engine operators. 8 FDA sent warning letters regarding the sale of unapproved drugs marketed for the treatment of opioid withdrawal symptoms. 9 In addition, three repackers that distributed active pharmaceutical ingredients, including opioids, received warning letters for significant current good manufacturing practice ("cGMP") violations. 10 In February, FDA made headlines for sending a warning letter to a major drug distributor for violations of the Drug Supply Chain Security Act ("DSCSA") related to verification requirements, including with respect to opioids. 11 The action marked the first warning letter issued by the agency under the DSCSA. 12 In connection with the marketing of approved opioids, FDA's Office of Prescription Drug Promotion ("OPDP") warned a manufacturer in December about a print advertisement promoting a drug intended to prevent relapse to opioid dependence following detoxification, concluding the advertisement was false or misleading because it omitted warnings about the drug's most serious risks, including the potential for fatal opioid overdose. 13
Most opioid-related criminal enforcement actions in 2019 involved violations of the CSA or the federal Anti-Kickback Statute rather than violations of the Federal Food, Drug, and Cosmetic Act ("FDCA"). Nevertheless, approximately 40% of the 2019 press releases issued by FDA's Office of Criminal Investigations ("OCI") described opioid-related cases. 14 Thus, despite the limited use of FDA's criminal authorities in the opioid context, the agency's criminal agents nevertheless appear to be spending significant time investigating and assisting with opioid-related actions, which is unlikely to change in the coming year.
This year, DOJ announced a record-breaking $1.4 billion settlement in connection with the alleged misleading marketing of an opioid addiction treatment drug. 15 The settlement, which resolved civil and criminal allegations, marks the largest recovery by the United States in an opioid case to date. As part of the settlement, the defendant agreed to forfeit $647 million and not manufacture, market, or sell Schedule I, II, or III controlled substances for three years as part of a nonprosecution agreement; pay a total of $700 million to the federal government and states to resolve civil FCA claims; and pay $50 million to the Federal Trade Commission ("FTC") to resolve claims that it engaged in unfair methods of competition. 16 Three months prior to the settlement, DOJ indicted the company's subsidiary in connection with related allegations. That case is slated for trial this year. 17
In April, federal prosecutors also made history by bringing the first-ever felony criminal charges for illegal distribution of controlled substances against a pharmaceutical distributor and its executives. 18 DOJ charged one of the nation's largest pharmaceutical distributors with unlawfully distributing opioids, conspiring to defraud the DEA, and knowingly failing to file suspicious order reports required by the CSA. Under the terms of the deferred prosecution agreement, the distributor agreed to pay a $20 million penalty, improve its CSA compliance program, and submit to supervision by an independent monitor. 19
DOJ also has continued to make use of its CSA civil injunction authority to stop health care providers from prescribing and dispensing opioids unlawfully. In 2018, the agency obtained a "first-of-its-kind" restraining order to enjoin two physicians from writing prescriptions. 20 In 2019, DOJ went further and obtained restraining orders to block two Tennessee pharmacies, their majority owner, and three pharmacists from continuing to fill controlled substances prescriptions. 21 A deputy assistant attorney general has stated that more of these actions can be expected this year. 22
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1 While vaping is an important FDA priority, a discussion of enforcement under FDA's tobacco-related authorities is beyond the scope of this article, which focuses on FDA-regulated medical products.
2 See Timeline of Selected FDA Activities and Significant Events Addressing Opioid Misuse and Abuse, FDA.gov (last updated Dec. 20, 2019), https://www.fda.gov/drugs/information-drug-class/timeline-selected-fda-activities-and-significant-events-addressingopioid-misuse-and-abuse.
3 See SUPPORT Act, H.R. 6, 115th Cong. (2018) (enacted Oct. 24, 2018).
4 FDA Statement from Norman E. Sharpless, Statement on Agency's First Year Accomplishments Implementing SUPPORT Act Authorities to Address the Opioids Crisis, FDA.gov (Oct. 24, 2019), https://www.fda.gov/news-events/pressannouncements/statement-agencys-first-year-accomplishments-implementing-support-act-authorities-address-opioids.
6 See, e.g., FDA News Release, FDA Takes New Enforcement Actions as Part of the Agency's Ongoing Effort to Combat the Illegal Online Sales of Opioids, FDA.gov (Apr. 2, 2019), https://www.fda.gov/news-events/press-announcements/fda-takes-newenforcement-actions-part-agencys-ongoing-effort-combat-illegal-online-sales-opioids.
7 FDA News Release, FDA and DEA Warn Website Operators Illegally Selling Opioids, FDA.gov (Sept. 30, 2019), https://www.fda.gov/news-events/press-announcements/fda-and-dea-warn-website-operators-illegally-selling-opioids.
8 Speech by Stacy Cline Amin, FDA Chief Counsel's Remarks to the 2019 FDLI Policy Conference, FDA.gov (May 2, 2019), https://www.fda.gov/news-events/speeches-fda-officials/fda-chief-counsels-remarks-2019-fdli-policy-conference-05022019.
9 See, e.g., FDA In Brief: FDA Issues Warning Letter for Products Illegally Marketed for the Treatment of Health Conditions, Including Opioid Withdrawal Symptoms, FDA.gov (Nov. 26, 2019), https://www.fda.gov/news-events/fda-newsroom/fda-brief-fdaissues-warning-letter-products-illegally-marketed-treatment-health-conditions.
10 FDA News Release, FDA Warns Repackers Distributing Pharmaceutical Ingredients, Including Opioids, for Putting Consumers at Risk with Significant Violations of Manufacturing Quality Standards, FDA.gov (July 2, 2019), https://www.fda.gov/newsevents/press-announcements/fda-warns-repackers-distributing-pharmaceutical-ingredients-including-opioids-putting-consumers-risk.
11 FDA Statement from Scott Gottlieb, Statement from FDA Commissioner Scott Gottlieb, M.D., on Ongoing Efforts to Stop the Spread of Illicit Opioids, Further Secure the U.S. Drug Supply Chain and Forcefully Confront Opioid Epidemic, FDA.gov (Feb. 12, 2019), https://www.fda.gov/news-events/press-announcements/statement-fda-commissioner-scott-gottlieb-md-ongoing-efforts-stopspread-illicit-opioids-further; Warning Letter, McKesson Corporation Headquarters, FDA.gov (Feb. 7, 2019), https://www.fda.gov/inspections-compliance-enforcement-and-criminal-investigations/warning-letters/mckesson-corporationheadquarters-2719-565854-02072019.
13 FDA News Release, FDA Issues Warning Letter for Not Including the Most Serious Risks in Advertisement for MedicationAssisted Treatment Drug, FDA.gov (Dec. 11, 2019), https://www.fda.gov/news-events/press-announcements/fda-issues-warningletter-not-including-most-serious-risks-advertisement-medication-assisted.
14 See Press Releases, FDA.gov (last updated Jan. 21, 2020), https://www.fda.gov/inspections-compliance-enforcement-andcriminal-investigations/criminal-investigations/press-releases.
15 DOJ Press Release, Justice Department Obtains $1.4 Billion from Reckitt Benckiser Group in Largest Recovery in a Case Concerning an Opioid Drug in United States History, justice.gov (July 11, 2019), https://www.justice.gov/opa/pr/justice-departmentobtains-14-billion-reckitt-benckiser-group-largest-recovery-case.
17 Id.; DOJ Press Release, Indivior Inc. Indicted for Fraudulently Marketing Prescription Opioid, justice.gov (Apr. 9, 2019), https://www.justice.gov/opa/pr/indivior-inc-indicted-fraudulently-marketing-prescription-opioid.
18 DOJ Press Release, Manhattan U.S. Attorney and DEA Announce Charges Against Rochester Drug Co-Operative and Two Executives for Unlawfully Distributing Controlled Substances, justice.gov (Apr. 23, 2019), https://www.justice.gov/usaosdny/pr/manhattan-us-attorney-and-dea-announce-charges-against-rochester-drug-co-operative-and.
20 DOJ Press Release, Justice Department Takes First-of-its-Kind-Legal Action to Reduce Opioid Over-Prescription, justice.gov (Aug. 22, 2018), https://www.justice.gov/opa/pr/justice-department-takes-first-its-kind-legal-action-reduce-opioid-over-prescription.
21 DOJ Press Release, Justice Department Files First of its Kind Action to Stop Tennessee Pharmacies' Unlawful Dispensing of Opioids, justice.gov (Feb. 8, 2019), https://www.justice.gov/opa/pr/justice-department-files-first-its-kind-action-stop-tennesseepharmacies-unlawful-dispensing.
22 DOJ, Deputy Assistant Attorney General David Morrell Delivers Remarks at the Food and Drug Law Institute Annual Enforcement, Litigation, and Compliance Conference, justice.gov (Dec. 11, 2019), https://www.justice.gov/opa/speech/deputyassistant-attorney-general-david-morrell-delivers-remarks-food-and-drug-law.
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