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. Section | Former Maximum Penalty ($) | Adjusted Maximum Penalty ($) | Assessment Method |
|---|---|---|---|
| 333(b)(2)(A) | 60,000 | 65,000 | For each of the first two violations in any 10-year period |
| 333(b)(2)(B) | 1,200,000 | 1,275,000 | For each violation after the second conviction in any 10-year period |
| 333(b)(3) | 120,000 | 130,000 | Per violation |
| 333(f)(1)(A) | 16,500 | 16,500 | Per violation |
| 333(f)(1)(A) | 1,200,000 | 1,275,000 | For the aggregate of violations |
| 333(f)(2)(A) | 55,000 | 60,000 | Per individual |
| 333(f)(2)(A) | 300,000 | 325,000 | Per "any other person" |
| 333(f)(2)(A) | 600,000 | 650,000 | For all violations adjudicated in a single proceeding |
| 333(f)(3)(A) | 10,000 | 11,000 | For all violations adjudicated in a single proceeding |
| 333(f)(3)(B) | 10,000 | 11,000 | For each day the violation is not corrected after a 30-day period following notification until the violation is corrected |
| 333(f)(4)(A)(i) | 250,000 | 275,000 | Per violation |
| 333(f)(4)(A)(i) | 1,000,000 | 1,075,000 | For all violations adjudicated in a single proceeding |
| 333(f)(4)(A)(ii) | 250,000 | 275,000 | For the first 30-day period (or any portion thereof) of continued violation following notification |
| 333(f)(4)(A)(ii) | 1,000,000 | 1,075,000 | For 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) | 10,000,000 | 10,850,000 | For all violations adjudicated in a single proceeding |
| 333(f)(9)(A) | 15,000 | 15,000 | Per violation |
| 333(f)(9)(A) | 1,000,000 | 1,050,000 | For all violations adjudicated in a single proceeding |
| 333(f)(9)(B)(i)(I) | 250,000 | 275,000 | Per violation |
| 333(f)(9)(B)(i)(I) | 1,000,000 | 1,050,000 | For all violations adjudicated in a single proceeding |
| 333(f)(9)(B)(i)(II) | 250,000 | 275,000 | For the first 30-day period (or any portion thereof) of continued violation following notification |
| 333(f)(9)(B)(i)(II) | 1,000 | 1,050,000 | For 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) | 10,000,000 | 10,525,000 | For all violations adjudicated in a single proceeding |
| 333(f)(9)(B)(ii)(I) | 250,000 | 275,000 | Per violation |
| 333(f)(9)(B)(ii)(I) | 1,000,000 | 1,050,000 | For all violations adjudicated in a single proceeding |
| 333(f)(9)(B)(ii)(II) | 250,000 | 275,000 | For the first 30-day period (or any portion thereof) of continued violation following notification |
| 333(f)(9)(B)(ii)(II) | 1,000,000 | 1,050,000 | For 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) | 10,000,000 | 10,525,000 | For all violations adjudicated in a single proceeding |
| 333(g)(1) | 250,000 | 275,000 | For the first violation in any 3-year period |
| 333(g)(1) | 500,000 | 550 000 | For each subsequent violation in any 3-year period |
| 333 note | 250 | 250 | For the second violation (following a first violation with a warning) within a 12-month period by a retailer with an approved training program |
| 333 note | 500 | 500 | For the third violation within a 24-month period by a retailer with an approved training program |
| 333 note | 2,000 | 2,000 | For the fourth violation within a 24-month period by a retailer with an approved training program |
| 333 note | 5,000 | 5,000 | For the fifth violation within a 36-month period by a retailer with an approved training program |
| 333 note | 10,000 | 11,000 | For the sixth or subsequent violation within a 48-month period by a retailer with an approved training program |
| 333 note | 250 | 250 | For the first violation by a retailer without an approved training program |
| 333 note | 500 | 500 | For the second violation within a 12-month period by a retailer without an approved training program |
| 333 note | 1,000 | 1,100 | For the third violation within a 24-month period by a retailer without an approved training program |
| 333 note | 2,000 | 2,000 | For the fourth violation within a 24-month period by a retailer without an approved training program |
| 333 note | 5,000 | 5,000 | For the fifth violation within a 36-month period by a retailer without an approved training program |
| 333 note | 10,000 | 11,000 | For the sixth or subsequent violation within a 48-month period by a retailer without an approved training program |
| 335b(a) | 300,000 | 325,000 | Per violation for an individual |
| 335b(a) | 1,200,000 | 1,275,000 | Per violation for "any other person" |
| 360pp(b)(1) | 1,100 | 1,100 | Per violation per person |
| 360pp(b)(1) | 355,000 | 375,000 | For any related series of violations |
| 42 U.S.C. Section | Former Maximum Penalty | Adjusted Maximum Penalty | Assessment Method |
| 263b(h)(3) | 11,000 | 11,000 | Per violation |
| 300aa-28(b)(1) | 120,000 | 130,000 | Per occurrence |