FDA takes aim at corporate executives to rein in pharma abuses

FDA has a new target in its continuing efforts to clean up pharmaceutical industry abuses: individual corporate officials. The most recent targets are the vice president of quality and the vice president of operations for OTC Products at McNeil Consumer Healthcare, a subsidiary of Johnson & Johnson. The two are named as defendants in a consent decree of permanent injunction for failing to comply with current good manufacturing practice requirements at plants in Pennsylvania and Puerto Rico that resulted in massive product recalls.

The tactic of going after individuals is no surprise to industry insiders. FDA warned last November that it was resurrecting a 1970s legal doctrine to bring criminal charges against top executives. The goal, said Eric Blumberg, FDA deputy chief counsel for litigation, was to “change the corporate culture” at firms that have shrugged at billion dollar penalties.

“It is clear that fines are not working here,” Blumberg told a Food and Drug Law Institute meeting in Philadelphia. “We need to put something else on the scale to make people think twice, three times.”

Blumberg was talking about illegal drug marketing. Eli Lilly paid $1.4 billion in 2009 for crossing the line in marketing Zyprexa (olanzapine) and Pfizer paid $2.3 billion for illegal marketing of Bextra (valdecoxib).

FDA’s weapon of choice is the Park Doctrine, based on a 1975 case against Acme Markets President John Park. FDA charged Park personally with sanitation violations following multiple warning notices. The U.S. Supreme Court agreed that Park, as company president, was ultimately responsible for ensuring compliance.

In 2007, 3 executives of Purdue Frederick Company pled guilty to charges of misbranding OxyContin (oxycodone). The trio paid $634.5 million to the Virginia Medicaid Fraud Unit and were barred from federal healthcare programs for 12 years.

In 2010, 4 executives of Synthes pled guilty for off-label promotion of a bone cement. The 4 face fines of up to $10,000 each and a year in federal prison.

Other recent targets include former GlaxoSmithKline Vice President Lauren Stevens, indicted for making false statements and obstructing an FDA investigation into illegal marketing of Wellbutrin SR (bupropion sustained release) and former KV Pharmaceutical CEO and Chairman of the Board Marc Hamerlin, barred from participating in federal healthcare programs for 20 years.

“This is the topic of a lot of discussions and concerns among executives across the pharmaceutical industry,” said Victor Kleinman, executive vice president, Global Life Sciences, for the executive search firm DHR International. “There are companies where these kinds of issues keep the CEO up at night.”