Regulatory Focus™ > News Articles > FDA Ups Monetary Penalties for Regulatory Noncompliance

FDA Ups Monetary Penalties for Regulatory Noncompliance

Posted 05 June 2014 | By Alexander Gaffney, RAC 

FDA Ups Monetary Penalties for Regulatory Noncompliance

The US Food and Drug Administration (FDA) has announced it will implement without change a regulation proposed earlier this year that is set to increase the monetary penalties for persons and companies found guilty of noncompliance with federal drug and device law.

Background

In 1990, Congress passed and the president signed into law the Federal Civil Penalties Inflation Adjustment Act (FCPIAA). The law requires federal agencies to, at least once every four years, adjust for inflation the maximum civil money penalties it assesses for regulatory and statutory violations.

As FDA explained in a January 2014 Federal Register notice:

"FCPIAA defines a CMP as any penalty, fine, or other sanction that is for a specific monetary amount as provided by Federal law; or has a maximum amount provided for by Federal law; and is assessed or enforced by an agency pursuant to Federal law; and is assessed or enforced pursuant to an administrative proceeding or a civil action in the Federal Courts."

The intent of the law is that rates of inflation do not discount the intended impact of a fine, and thereby maintain its effectiveness as a deterrent or punishment.

Final Rule

On 5 June 2014, FDA declared that it had finalized the rule, which had been released in February 2014. FDA said it did not receive any significant adverse comments, and therefore did not make any changes to the rule.

The 2014 update will be FDA's first since 2008, it said, and will be based on inflation rates as determined by the Consumer Price Index (CPI). Adjustments may not exceed 10% of the total penalty.

The rule will go into effect immediately, FDA said.

Civil Monetary Penalties for 2013

The newly updated penalties are as follows:

21 U.S.C. SectionFormer Maximum  Penalty ($)Adjusted Maximum Penalty ($)Assessment Method
333(b)(2)(A)60,00065,000For each of the first two violations in any 10-year period
333(b)(2)(B)1,200,0001,275,000For each violation after the second conviction in any 10-year period
333(b)(3)120,000130,000Per violation
333(f)(1)(A)16,50016,500Per violation
333(f)(1)(A)1,200,0001,275,000For the aggregate of violations
333(f)(2)(A)55,00060,000Per individual
333(f)(2)(A)300,000325,000Per "any other person"
333(f)(2)(A)600,000650,000For all violations adjudicated in a single proceeding
333(f)(3)(A)10,00011,000For all violations adjudicated in a single proceeding
333(f)(3)(B)10,00011,000For each day the violation is not corrected after a 30-day period following notification until the violation is corrected
333(f)(4)(A)(i)250,000275,000Per violation
333(f)(4)(A)(i)1,000,0001,075,000For all violations adjudicated in a single proceeding
333(f)(4)(A)(ii)250,000275,000For the first 30-day period (or any portion thereof) of continued violation following notification
333(f)(4)(A)(ii)1,000,0001,075,000For any 30-day period, where the amount doubles for every 30-day period of continued violation after the first 30-day violation
333(f)(4)(A)(ii)10,000,00010,850,000For all violations adjudicated in a single proceeding
333(f)(9)(A)15,00015,000Per violation
333(f)(9)(A)1,000,0001,050,000For all violations adjudicated in a single proceeding
333(f)(9)(B)(i)(I)250,000275,000Per violation
333(f)(9)(B)(i)(I)1,000,0001,050,000For all violations adjudicated in a single proceeding
333(f)(9)(B)(i)(II)250,000275,000For the first 30-day period (or any portion thereof) of continued violation following notification
333(f)(9)(B)(i)(II)1,0001,050,000For any 30-day period, where the amount doubles for every 30-day period of continued violation after the first 30-day violation
333(f)(9)(B)(i)(II)10,000,00010,525,000For all violations adjudicated in a single proceeding
333(f)(9)(B)(ii)(I)250,000275,000Per violation
333(f)(9)(B)(ii)(I)1,000,0001,050,000For all violations adjudicated in a single proceeding
333(f)(9)(B)(ii)(II)250,000275,000For the first 30-day period (or any portion thereof) of continued violation following notification
333(f)(9)(B)(ii)(II)1,000,0001,050,000For any 30-day period, where the amount doubles for every 30-day period of continued violation after the first 30-day violation
333(f)(9)(B)(ii)(II)10,000,00010,525,000For all violations adjudicated in a single proceeding
333(g)(1)250,000275,000For the first violation in any 3-year period
333(g)(1)500,000550 000For each subsequent violation in any 3-year period
333 note250250For the second violation (following a first violation with a warning) within a 12-month period by a retailer with an approved training program
333 note500500For the third violation within a 24-month period by a retailer with an approved training program
333 note2,0002,000For the fourth violation within a 24-month period by a retailer with an approved training program
333 note5,0005,000For the fifth violation within a 36-month period by a retailer with an approved training program
333 note10,00011,000For the sixth or subsequent violation within a 48-month period by a retailer with an approved training program
333 note250250For the first violation by a retailer without an approved training program
333 note500500For the second violation within a 12-month period by a retailer without an approved training program
333 note1,0001,100For the third violation within a 24-month period by a retailer without an approved training program
333 note2,0002,000For the fourth violation within a 24-month period by a retailer without an approved training program
333 note5,0005,000For the fifth violation within a 36-month period by a retailer without an approved training program
333 note10,00011,000For the sixth or subsequent violation within a 48-month period by a retailer without an approved training program
335b(a)300,000325,000Per violation for an individual
335b(a)1,200,0001,275,000Per violation for "any other person"
360pp(b)(1)1,1001,100Per violation per person
360pp(b)(1)355,000375,000For any related series of violations
42 U.S.C. SectionFormer Maximum PenaltyAdjusted Maximum PenaltyAssessment Method
263b(h)(3)11,00011,000Per violation
300aa-28(b)(1)120,000130,000Per occurrence

Final Rule

Finalization Order


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