US Food and Drug Administration (FDA) lawyers have denied a request from a former top executive at a pharmaceutical company to overturn his decade-long debarment, arguing that his request was without merit in light of his numerous convictions.
The executive, Baldev Raj Bhutani, was formerly president and treasurer of Alra Laboratories, a generic pharmaceutical company infamous for manufacturing violations in the 1990s. According to records, the company was also notable for its manufacture of opioid painkillers, which had gotten it in trouble with federal regulators after they found it non-compliant with record-keeping and reporting requirements.
Those violations, however, would pale in comparison to ones first brought to light in March 1991, when FDA regulators went before Congress to allege that the company had manufactured adulterated products in violation of US regulations covering good manufacturing practices.
A Chicago Tribune article from the time notes that FDA investigators claimed that a steel wool pad and unspecified tools had been ground into the medicine, which was later distributed to the public and the US military for use. Other quality violations, including insects inside Alra's Chicago-based facility's mixing rooms, were also found.
Guilty Pleas Lead to Debarment
Bhutani pled guilty in February 1996 to one count of conspiracy and six counts of violating the Federal Food, Drug and Cosmetic Act (FD&C Act), and in 1999 pled guilty to an additional count of wire fraud.
"According to the records of Mr. Bhutani's criminal proceedings, he and Alra violated the FD&C Act by, inter alia, including decomposed raw material in finished drug products and deviating from approved manufacturing procedures by adding an undocumented substance, sodium hydroxide, to drug products in an unapproved manner," FDA observed in its Federal Register notice denying Bhutani's request.
In 2004, FDA permanently debarred Bhutani from providing services to any company-pharmaceutical, biopharmaceutical or medical device-with an approval pending before FDA.
Six years later, according to FDA, Bhutani sought to overturn that debarment, arguing that his case met the terms of section 306(d)(4) of the FD&C Act. The section puts forth three exemptions through which a person can apply for a reversal of a debarment: If the person was a key witness or provided key information in an investigation into a quality issue; if the reversal would not endanger the public health; or if the debarment is unjust.
FDA said it was of the opinion that Bhutani's appeal failed all three of these precepts, and proposed to deny his application in March 2011. Bhutani then appealed that decision, but FDA noted that since his debarment was based on his convictions-at least two of which were felonies-he could only be re-instated if either his conviction was overturned or if he had provided substantial assistance to the investigation that led to his conviction.
What is 'Substantial Assistance?'
FDA notes in its Federal Register posting that Bhutani vigorously advanced the latter argument-that he had indeed provided substantial assistance to investigators.
"In his application for termination of debarment and request for a hearing, Mr. Bhutani argues that … [he] offered his full support to bring his own company, Alra, into cGMP compliance," FDA wrote. He argued that the two consent decrees Alra entered into with FDA were further proof of his cooperation, and that in 1991 he had provided to investigators information that led to his prosecution and subsequent convictions.
This raises an interesting point of contention, FDA noted: the FD&C Act does not define "substantial assistance," leaving the agency to rely upon the determination of the US Department of Justice (DOJ) that a witness was cooperative in most of its cases. In that Bhutani was unable to show explicitly either that the DOJ had considered him a cooperative witness or that DOJ had moved to reduce the severity of his punishment-a term FDA refers to as "downward departure," but sometimes known as prosecutorial discretion-Bhutani's claims of voluntary compliance remain insufficient to meet the latter of FDA's two-part test for overturning debarment.
No Luck for Self Interest Argument
FDA's notice also notes that when considering "substantial assistance," it has historically evaluated such terms as being in assistance of the prosecution of the offenses of others, as self-interest can color the cooperation of an individual toward his or her own defense.
But even if FDA took the opposite consideration in this case-that cooperation in one's own self interest could still be substantial and, thus, grounds for reversal of debarment-the facts of the case did not support such a reversal, agency lawyers explained.
"In fact, all Mr. Bhutani claims to have done was decide to take steps to comply with the law after he had violated it," FDA quipped. "Such steps clearly do not constitute substantial assistance in the investigation or prosecution of offenses."
FDA has thus upheld Bhutani's debarment, saying that holding a hearing to discuss his appeal is "not necessary because there are no genuine and substantial issues of fact."
Bhutani lost a similar 2006 court challenge in which he sought to overturn his debarment. The justices in that case, submitted to the Seventh Circuit Court of Appeals, denied Bhutani's request for a hearing, saying that FDA appeared to have complied with the law in all cases, and that his constitutional arguments were without merit.