Legal Strategies for FDA Consent Decrees
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1 RU1 Legal Strateges for FDA Consent Decrees Wllam W. Vodra PDA Taormna Conference 14 October October 2003 Legal Strateges for FDA Consent Decrees Slde 1
2 Slde 1 RU1 # PDA Taormna speech Regstered User, 3/6/2006
3 Four Themes 1. Antcpatng a Decree 2. Negotatng a Decree 3. Implementng a Decree 4. Preventng a Decree 14 October 2003 Legal Strateges for FDA Consent Decrees Slde 2
4 1. Antcpatng a Decree FDA Acton Is Often a Surprse Companes tend to vew hstory n postve lght They assume meetngs wth FDA wll convnce Agency of ther bona fdes They beleve progress toward substantal complance should satsfy FDA Trackng and reportng on commtments to FDA are nfrequent, however Senor management may not be aware of ssues 14 October 2003 Legal Strateges for FDA Consent Decrees Slde 3
5 1. Antcpatng a Decree Sgnals of Potental Problems 483 Metrcs Numbers of nspectons, observatons, and observatons per nspecton day Patterns n 483 observatons Repeated occurrences (falure to correct effectvely) Smlar occurrences at other stes Indcatons of systemc weaknesses Serousness of ndvdual observatons 14 October 2003 Legal Strateges for FDA Consent Decrees Slde 4
6 1. Antcpatng a Decree Look at the words Corporate senor management has reported to the agency that defcences noted durng prevous nspectons have been corrected. Not all of these correctons have actually been mplemented. Those correctons that were mplemented were not always effectve. 14 October 2003 Legal Strateges for FDA Consent Decrees Slde 5
7 1. Antcpatng a Decree 1 More Sgnals of Problems Early termnaton of nspecton Pror hstory of ste/company Pror Warnng Letters or voluntary agreement Refusals of FDA to meet FDA collecton of nventory nformaton, evdentary samples, affdavts FDA holds on pendng applcatons, export documents, government contracts 14 October 2003 Legal Strateges for FDA Consent Decrees Slde 6
8 2. Negotatng a Decree How the Process Begns The call or letter from FDA or Offce of Consumer Ltgaton (OCL) n DoJ Draft decree offered by OCL/DoJ Demand for early commtments FDA wants early sgnal on key ssues Threat to stop talks and go to court A challenge to a surprsed Company FDA & DoJ may refuse to meet wthout draft decree language back from Company 14 October 2003 Legal Strateges for FDA Consent Decrees Slde 7
9 2. Negotatng a Decree Serous Psychologcal Effects Internal reactons at Company follow pattern Intally: Anger, denal, gref, search for relef Ultmately: Busness calculaton Morale and cooperaton are affected Indvduals wll be named Heads wll generally roll Fnger-pontng vs. problem-solvng dynamc 14 October 2003 Legal Strateges for FDA Consent Decrees Slde 8
10 2. Negotatng a Decree Key Substantve Issues Shut down or Gong forward decree? Scope of facltes and products covered Medcally necessary products R&D, IND, export-only materals Tmetables and mlestones for remedaton actons Namng of ndvduals as defendants Conflct resoluton procedures 14 October 2003 Legal Strateges for FDA Consent Decrees Slde 9
11 2. Negotatng a Decree Other Substantve Issues Lqudated damages for mssng mlestones Dsgorgement (prospectve, retrospectve profts) FDA powers over Company under Decree Post-remedaton 3rd party audts Duraton and termnaton of Decree 14 October 2003 Legal Strateges for FDA Consent Decrees Slde 10
12 2. Negotatng a Decree The Negotaton Process Tmetable Usually 6-8 weeks Early face-to-face meetngs Separate counsel for ndvduals? There s no standard text for a consent decree FDA may refuse to let Company meet wth senor FDA management to resolve key ssues 14 October 2003 Legal Strateges for FDA Consent Decrees Slde 11
13 Numerous teams requred 2. Negotatng a Decree Managng the Negotatons Face-to-face negotatons Senor management polcymakng Techncal GMP expertse Fnancal analyses Implementaton of decree Thrd-party consultants and audtors Communcatons to nvestors, employees, meda, customers Collateral ltgaton Overall coordnaton and management s specal challenge 14 October 2003 Legal Strateges for FDA Consent Decrees Slde 12
14 3. Implementng a Decree Company Goals Acheve complete, effectve, and tmely fulfllment of decree commtments Remedaton s not the only opton Ratonalzaton of product lne, manufacturng chan Optons, prortes may change after decree s entered Apply learnng to actvtes, facltes beyond scope of decree Convnce FDA that the Company gets t Problem that led to decree wll not recur Company culture reformed 14 October 2003 Legal Strateges for FDA Consent Decrees Slde 13
15 Management leadershp Regular, effectve management brefngs 3. Implementng a Decree Strategc Challenges Tough choces about competng prortes, personnel, and culture choces Morale and cooperaton of employees Anxety, anger wthn organzaton Ownershp and accountablty for executon Endurance and persstence of effort Three tasks makng products, dong remedaton, managng decree Adequate resources throughout lfe of decree Coordnaton and communcaton Wthn Company To consttuences outsde Company 14 October 2003 Legal Strateges for FDA Consent Decrees Slde 14
16 3. Implementng a Decree Operatonal Challenges Managng the 3rd party audt process Audtors also consultants for remedaton? Plannng remedaton n lmted tme frame Trackng process and response aganst commtments and deadlnes Complex program management effort Antcpatng bottlenecks; respondng to surprses Managng communcatons wth FDA Numerous wrtten submssons Unexpected developments and delays 14 October 2003 Legal Strateges for FDA Consent Decrees Slde 15
17 3. Implementng a Decree More Operatonal Challenges Verfcaton of completon of actons Assessment of effectveness of actons Documentaton of actons Qualty and transparency of documents Completeness (ncludng ancllary proof of mplementaton) of records 14 October 2003 Legal Strateges for FDA Consent Decrees Slde 16
18 3. Implementng a Decree Managng FDA s Expectatons Don t let FDA be adversely surprsed If there s bad news, be the source Keep n mnd FDA s other consttuences Don t waste FDA s tme wth unnecessary meetngs FDA s not nterested n good fath FDA wants actons and complance 14 October 2003 Legal Strateges for FDA Consent Decrees Slde 17
19 4. Preventng a Decree Assure QA Infrastructure Best protecton from a Consent Decree Provde adequate resources FDA benchmarkng staff ratos of QA to producton Assure QA has meanngful respect and nfluence Commtment of QA staff Commtment of others to QA (prortes) Commtment of management to qualty 14 October 2003 Legal Strateges for FDA Consent Decrees Slde 18
20 4. Preventng a Decree Respond Effectvely to Every 483 See materals on How to Respond to FDA 483s and Warnng Letters based on my September 2002 PDA speech 14 October 2003 Legal Strateges for FDA Consent Decrees Slde 19
21 Summary You do not want an FDA Consent Decree You should always consder your Company at rsk Suspend dsbelef and assume t possble Act accordngly Aggressve self-assessment and self-correcton are the best means of preventon If you face a Decree, prepare for acute and long term management challenges 14 October 2003 Legal Strateges for FDA Consent Decrees Slde 20
22 Questons and Dscusson The floor s open If you have addtonal questons, feel free to contact me at: Wllam_Vodra@aporter.com ( Fax) th St., NW Washngton, DC v2 14 October 2003 Legal Strateges for FDA Consent Decrees Slde 21
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