Legal Analysis: FDA 'Pet Peeves' Could Lead to Bans on Drug Companies

Posted 17 March 2015 | By Alexander Gaffney, RAC 

Legal Analysis: FDA 'Pet Peeves' Could Lead to Bans on Drug Companies

In 2012, the US Food and Drug Administration (FDA) was granted new authority to go after pharmaceutical companies that were, in its opinion, preventing regulators from fully inspecting drug and device manufacturing facilities. If a company way "delaying, denying, limiting or refusing" an FDA inspection, the law stated, FDA could deem a drug to be adulterated and prevent it from being sold.

But as a new legal analysis finds, FDA has done little to define the difference between what constitutes an unnecessary "delay" and what is simply an inspector's "pet peeve," making it more difficult—and dangerous—for companies to disagree with FDA inspectors.


The 2012 law referred to earlier was known as the Food and Drug Administration Safety and Innovation Act (FDASIA)—a massive and sweeping piece of legislation which made hundreds of changes to the way in which FDA regulates a wide swath of the American economy.

Among the law's many provisions was Section 707, which authorized FDA to deem a product adulterated if its manufacturer, processor, packager or warehouse "delays, denies or limits an inspection, or refuses to permit entry or inspection."

The provisions apply to drug manufacturers, processors, packagers, warehouses and other related establishments.

Prior to the passage of the rule, some companies sought to refuse or delay entry of FDA inspectors into their facility, hoping the additional time could be used to either clean up a facility or expunge certain records. FDASIA, legislators hoped, would create a more equitable system in which FDA could immediately punish companies not complying with its attempts to inspect a facility.

To date, FDA has published two iterations of a guidance document meant to better explain its authority under FDASIA Section 707. In July 2013, the agency published a draft guidance document which established its initial thinking. Then, in October 2014, FDA finalized the document, Circumstances that Constitute Delaying, Denying, Limiting, or Refusing a Drug Inspection.

Criticism of Guidance

To the dismay of some in the pharmaceutical industry, the guidance doesn't define some of the most important terms in Section 707.

For example, while FDA says that "minor delays" resulting from "good faith efforts by the facility" to accommodate an inspection aren't likely to be understood as an "unreasonable" delay, the agency doesn't exactly define what a "good faith effort" is, and the impression is that it will be up to each FDA investigator to determine his or her own threshold.

As three legal experts from the law firm Hyman, Phelps & McNamara (HPM) explain in a new legal briefing published by the Washington Legal Foundation (WLF), FDA's present guidance document misses the mark.

"Rather than provide the clarity that Congress required, the Guidance reads like a list of FDA inspectors’ pet peeves," HPM's James P. Ellison, Anne K. Walsh, and Andrew J. Hull write in the analysis.

"Further, FDA misappropriated the purpose of the Guidance," they continue. "Congress expected FDA to define the circumstances within FDA’s inspection authority that would be a basis for a finding of adulteration, not to expand its inspection authority and to demand compliance with unsupported requests during inspections."

The experts explain that the guidance contains FDA's assertion that it has the right to take photographs during its inspection. "No court has confirmed it possesses such authority," they note. The issue has long been a source of controversy amongst companies, who worry the photographs could capture commercially confidential information, which might be released through FDA's freedom of information requests. However, the guidance document asserts this right "as if the issue is uncontroversial," they said.

Other Issues Identified

The authors also take issue with the guidance document's treatment of employee interviews. "An employee’s impromptu answers in response to FDA questions may become evidence for the government’s use in a future enforcement action. Companies must clearly explain to their employees that, once provided, an impromptu answer is no less evidence than one provided after thorough preparation and review of documents, and they should consider with advice of counsel whether and how to respond to such requests."

However, federal law does not explicitly require any employee of a company to answer questions during an inspection, they note. "While § 704 grants FDA the authority to inspect facilities, it does not compel employee testimony."

There are other potential problems as well, HPM's lawyers note. While FDA is permitted to observe a facility, nothing in federal statute requires a company to allow FDA to observe a facility "in active operation." However, FDA's guidance claims that if a company were to send its staff home for the day, such an action could be construed as the company "denying" FDA's right to inspect a facility.

Another potential problem has to do with how FDA inspects records. FDA's guidance claims authority to inspect records maintained at a "different site." HPM, however, claims that FDA's statutory authority only allows the agency to inspect records maintained "at the facility under inspection."

"Section 704 does not grant FDA a general power to inspect all company-wide records by issuing a Form 482 [notice of inspection] to a single facility," they argue.

"The ramifications of a ‘delay,’ ‘denial,’ ‘limitation,’ or ‘refusal’ of inspection are substantial," the trio concludes. A company can be effectively shut down for a perceived delay, and many questions are still unanswered.

Companies are advised to established policies and procedures to determine how they should handle FDA inspections, and to anticipate FDA's "expectations during an inspection." Companies without these policies "run the risk of being caught off-guard by an inspector's requests," they conclude.


HPM Backgrounder

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