Notice2023-03941
Shaun Thaxter; Denial of Hearing; Final Debarment Order
Primary source
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Published
February 27, 2023
Issuing agencies
Health and Human Services DepartmentFood and Drug Administration
Abstract
The Food and Drug Administration (FDA or the Agency) is denying a request for a hearing submitted by Shaun Thaxter (Thaxter) and is issuing an order under the Federal Food, Drug, and Cosmetic Act (FD&C Act) debarring Thaxter for 5 years from providing services in any capacity to a person that has an approved or pending drug product application. FDA bases this order on a finding that Thaxter was convicted of a misdemeanor under Federal law for conduct relating to the regulation of a drug product under the FD&C Act and that the type of conduct underlying the conviction undermines the process for the regulation of drugs. In determining the appropriateness and period of Thaxter's debarment, FDA has considered the applicable factors listed in the FD&C Act. Thaxter has failed to file with the Agency information and analyses sufficient to create a basis for a hearing concerning this action.
Full Text
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<title>Federal Register, Volume 88 Issue 38 (Monday, February 27, 2023)</title>
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[Federal Register Volume 88, Number 38 (Monday, February 27, 2023)]
[Notices]
[Pages 12375-12381]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-03941]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
[Docket No. FDA-2021-N-0105]
Shaun Thaxter; Denial of Hearing; Final Debarment Order
AGENCY: Food and Drug Administration, HHS.
ACTION: Notice.
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SUMMARY: The Food and Drug Administration (FDA or the Agency) is
denying a request for a hearing submitted by Shaun Thaxter (Thaxter)
and is issuing an order under the Federal Food, Drug, and Cosmetic Act
(FD&C Act) debarring Thaxter for 5 years from providing services in any
capacity to a person that has an approved or pending drug product
application. FDA bases this order on a finding that Thaxter was
convicted of a misdemeanor under Federal law for conduct relating to
the regulation of a drug product under the FD&C Act and that the type
of conduct underlying the conviction undermines the process for the
regulation of drugs. In determining the appropriateness and period of
Thaxter's debarment, FDA has considered the applicable factors listed
in the FD&C Act. Thaxter has failed to file with the Agency information
and analyses sufficient to create a basis for a hearing concerning this
action.
DATES: The order is applicable February 27, 2023.
ADDRESSES: Any application for termination of debarment by Thaxter
under section 306(d) of the FD&C Act (21 U.S.C. 335a(d)) (application)
may be submitted as follows:
Electronic Submissions
<bullet> Federal eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
Follow the instructions for submitting comments. An application
submitted electronically, including attachments, to <a href="https://www.regulations.gov">https://www.regulations.gov</a> will be posted to the docket unchanged. Because
your application will be made public, you are solely responsible for
ensuring that your application does not include any confidential
information that you or a third party may not wish to be posted, such
as medical information, your or anyone else's Social Security number,
or confidential business information, such as a manufacturing process.
Please note that if you include your name, contact information, or
other information that identifies you in the body of your application,
that information will be posted on <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
<bullet> If you want to submit an application with confidential
information that you do not wish to be made available to the public,
submit the application as a written/paper submission and in the manner
detailed (see ``Written/Paper Submissions'' and ``Instructions'').
Written/Paper Submissions
Submit written/paper submissions as follows:
<bullet> Mail/Hand Delivery/Courier (for written/paper
submissions): Dockets Management Staff (HFA-305), Food and Drug
Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.
<bullet> For a written/paper application submitted to the Dockets
Management Staff, FDA will post your application, as well as any
attachments, except for information submitted, marked and identified,
as confidential, if submitted as detailed in ``Instructions.''
Instructions: All applications must include the Docket No. FDA-
2021-N-0105. Received applications will be placed in the docket and,
except for those submitted as ``Confidential Submissions,'' publicly
viewable at <a href="https://www.regulations.gov">https://www.regulations.gov</a> or at the Dockets Management
Staff between 9 a.m. and 4 p.m., Monday through Friday, 240-402-7500.
<bullet> Confidential Submissions--To submit an application with
confidential information that you do not wish to be made publicly
available, submit your application only as a written/paper submission.
You should submit two copies total. One copy will include the
information you claim to be confidential with a heading or cover note
that states ``THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.'' The
Agency will review this copy, including the claimed confidential
information, in its consideration of your application. The second copy,
which will have the claimed confidential information redacted/blacked
out, will be available for public viewing and posted on <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Submit both copies to the Dockets Management
Staff. If you do not wish your name and contact information to be made
publicly available, you can provide this information on the cover sheet
and not in the body of your application and you must identify this
information as ``confidential.'' Any information marked as
``confidential'' will not be disclosed except in accordance with 21 CFR
10.20 and other applicable disclosure law. For more information about
FDA's posting of comments to public dockets, see 80 FR 56469, September
18, 2015, or access the information at: <a href="https://www.govinfo.gov/content/pkg/FR-2015-09-18/pdf/2015-23389.pdf">https://www.govinfo.gov/content/pkg/FR-2015-09-18/pdf/2015-23389.pdf</a>.
Docket: For access to the docket, go to <a href="https://www.regulations.gov">https://www.regulations.gov</a>
and insert the docket number, found in brackets in the heading of this
document, into the ``Search'' box and follow the prompts and/or go to
the Dockets Management Staff, 5630 Fishers Lane, Rm. 1061, Rockville,
MD 20852 between 9 a.m. and 4 p.m., Monday through Friday, 240-402-
7500. Publicly available submissions may be seen in the docket.
[[Page 12376]]
FOR FURTHER INFORMATION CONTACT: Rachael Vieder Linowes, Office of
Scientific Integrity, Food and Drug Administration, 10903 New Hampshire
Ave., Bldg. 1, Rm. 4206, Silver Spring, MD 20993, 240-402-5931.
SUPPLEMENTARY INFORMATION:
I. Background
Section 306(b)(2)(B)(i)(I) of the FD&C Act permits FDA to debar an
individual if FDA finds that (1) the individual has been convicted of a
misdemeanor under Federal law ``for conduct relating to the development
or approval, including the process for development or approval, of any
drug product or otherwise relating to the regulation of drug products''
under the FD&C Act and (2) the type of conduct that served as the basis
for the conviction undermines the process for the regulation of drugs.
On June 30, 2020, in the U.S. District Court for the Western
District of Virginia, Thaxter pled guilty to a misdemeanor violation of
the FD&C Act. Specifically, he pled guilty to causing the introduction
or delivery for introduction of a misbranded drug into interstate
commerce in violation of sections 301(a), 303(a)(1), and 502(a) of the
FD&C Act (21 U.S.C. 331(a), 333(a)(1) and 352(a)). In the plea
agreement pursuant to which Thaxter pled guilty, he agreed that ``all
the facts set forth in the Information [filed by the Federal government
on the same day] are true and correct and provide the Court with a
sufficient factual basis to support [his] plea.'' The Information
provided that, at the time of the conduct underlying his conviction,
Thaxter was ``the highest-ranking executive of Reckitt Benckiser
Pharmaceuticals Inc. (`RBP').'' \1\ During that time, according to the
Information, RBP's Medical Affairs Manager provided false or misleading
analysis and charts to the Massachusetts Medicaid program (MassHealth),
as a means of persuading MassHealth to reimburse patients for a drug
named Suboxone Film, which RBP marketed.
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\1\ As noted in the Information, ``on or about December 23,
2014, RBP was renamed Indivior, Inc, and became a subsidiary of
Indivior PLC. After on or about December 23, 2014, Thaxter was Chief
Executive Officer of Indivior PLC.''
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As framed by the Information, the false and misleading data and
analysis provided to MassHealth--related to the unintended pediatric
exposure rates for Suboxone Film relative to similar tablet products--
constituted ``labeling'' for the drug under section 201(m) of the FD&C
Act (21 U.S.C. 321(m)) and thus misbranded the drug under section
502(a). As discussed further below, in pleading guilty pursuant to the
Information, Thaxter conceded that he was a responsible corporate
officer at RBP that ``failed to prevent and promptly correct the
distribution of [] false and misleading unintended pediatric exposure
data and marketing claims to MassHealth'' and ``caused the introduction
and delivery for introduction into interstate commerce of . . . a drug
[(Suboxone Film)] that was misbranded in that the drug's labeling was
false and misleading'' (see United States v. Park, 421 U.S. 658, 673-74
(1975)). On October 22, 2020, the court entered a criminal judgment
against Thaxter and sentenced him to 6 months in Federal prison.
By letter dated March 18, 2021, FDA's Office of Regulatory Affairs
(ORA) notified Thaxter of its proposal to debar him for 5 years from
providing services in any capacity to a person having an approved or
pending drug product application and provided him with an opportunity
to request a hearing on the proposal. ORA found that Thaxter is subject
to debarment under section 306(b)(2)(B)(i)(I) of the FD&C Act on the
basis of his misdemeanor conviction under Federal law for conduct both
relating to drug products under the FD&C Act and undermining the
Agency's process for regulating drugs. The proposal also outlined
findings concerning the factors ORA considered to be applicable in
determining the appropriateness and period of debarment, as provided in
section 306(c)(3) of the FD&C Act. ORA found that a 5-year period of
debarment is appropriate. Specifically, ORA found that the nature and
seriousness of the offense and the nature and extent of voluntary steps
to mitigate the effect on the public are unfavorable factors for
Thaxter. ORA stated that it viewed the absence of prior convictions
involving matters within FDA's jurisdiction as a favorable factor. ORA
concluded that ``the facts supporting the unfavorable factors outweigh
those supporting the favorable factor, and therefore warrant the
imposition of a five-year period of debarment.''
By letter dated April 28, 2021, through counsel, Thaxter requested
a hearing on ORA's proposal to debar him. On May 28, 2021, he submitted
a ``Memorandum of Facts and Arguments in Support of Request for
Hearing'' (Memorandum). In this Memorandum, Thaxter makes legal,
factual, and policy-based arguments regarding the proffered basis for
his debarment in ORA's proposal.
Under the authority delegated to her by the Commissioner of Food
and Drugs, the Chief Scientist has considered Thaxter's request for a
hearing. Hearings are granted only if there is a genuine and
substantial issue of fact. As discussed in more detail below, hearings
will not be granted on issues of policy or law, on mere allegations, on
denials or general descriptions of positions and contentions, on data
and information insufficient to justify the factual determination urged
if accurate and presented at a hearing, or on factual issues that are
not determinative with respect to the action requested (see Sec.
12.24(b) (21 CFR 12.24(b))). The Chief Scientist has considered
Thaxter's arguments and concluded that they are unpersuasive and fail
to raise a genuine and substantial issue of fact requiring a hearing.
II. Arguments
In his Memorandum, Thaxter makes a series of legal and policy
arguments challenging whether he is subject to debarment and, if so,
whether debarment for 5 years is appropriate. Many of Thaxter's
arguments are intertwined with his efforts to raise a genuine and
substantial issue of fact with respect to the findings in ORA's
proposal to debar him. Thaxter's legal and factual arguments largely
turn on the extent to which the specific conduct underlying his
conviction subjects him to debarment under section 306(b)(2)(B)(i) of
the FD&C Act and the extent to which there are genuine and substantial
issues of fact with respect to ORA's findings under section
306(b)(2)(B)(i) and the applicable considerations under section
306(c)(3). In challenging the facts underlying ORA's findings and
ultimate debarment proposal, Thaxter contends that some of the findings
in ORA's proposal go beyond the facts to which he admitted during the
criminal proceedings and are demonstrably false. Specifically, he
disputes ORA's proposed findings: (1) that the conduct underlying his
conviction put patients and their children at risk, (2) that MassHealth
relied on the false and misleading information to expand coverage to
include Suboxone Film, and (3) that his conduct exposed patients to
misbranded drugs.
In challenging those proposed findings, Thaxter argues extensively
that he is entitled to a hearing because not only are there genuine and
substantial issues of fact with respect to those findings but they are
conclusory and do not appear to rest on substantial evidence. He
effectively contends, therefore, that he is entitled to a hearing on
those findings for further development and an opportunity to challenge
them. However, nothing in
[[Page 12377]]
the relevant FDA regulations, section 306(i) of the FD&C Act, or the
Administrative Procedure Act (APA) requires more than an opportunity to
raise genuine and substantial issues of fact with respect to the
findings in ORA's proposal. As Thaxter notes, section 306(i) of the
FD&C Act requires FDA to provide an ``opportunity for an agency hearing
on issues of material fact'' before debarring any person. As noted by
ORA in its proposal, FDA implements adjudications required under
section 5 U.S.C. 554(a), including debarment matters, as formal
evidentiary hearings under 21 CFR part 12.
Under Sec. 12.24(b), consistent with the APA and case law, there
are criteria for granting a hearing. Pursuant to that regulation, the
Agency will grant a request for hearing only if the material submitted
in support of the hearing request shows, in relevant part: (1)
``[t]here is a genuine and substantial factual issue for resolution at
a hearing,'' (2) ``[t]he factual issue can be resolved by available and
specifically identified reliable evidence,'' (3) ``[t]he data and
information submitted, if established at a hearing, would be adequate
to justify resolution of the factual issue in the way sought by the
person,'' and (4) ``[r]esolution of the factual issue in the way sought
by the person is adequate to justify the action requested.'' The
regulation further clarifies that ``[a] hearing will not be granted on
issues of policy or law'' and that ``a hearing will not be granted on
factual issues that are not determinative with respect to the action
requested.''
The factual challenges in Thaxter's Memorandum do not justify
granting his hearing request. Even Thaxter himself does not dispute the
facts to which he pled guilty. Rather, Thaxter attempts to show that
those undisputed facts do not support ORA's proposed findings.
Specifically, Thaxter argues that only disputed facts could plausibly
support a finding that his conduct harmed children or patients or that
MassHealth actually relied on the false and misleading information in
making its ultimate decision to add Suboxone Film to its formulary.
Thaxter appears to acknowledge, as he must, that the facts to which he
pled guilty--i.e., the findings of the court that entered a criminal
judgment against him--are not in dispute. In addition, he does not
contest several other discrete findings in ORA's proposal. For reasons
discussed in detail below, it is not necessary to go beyond the facts
to which Thaxter pled guilty and the other undisputed facts in ORA's
proposal to conclude that Thaxter is subject to debarment under section
306(b)(2)(B)(i) of the FD&C Act and that debarment for 5 years is
appropriate under section 306(c)(3).
For the sake of simplicity and efficiency, what follows is an
assessment of the remainder of Thaxter's legal, factual, and policy-
based arguments by reference only to the facts to which he pled guilty
or the other undisputed findings in ORA's proposal. Consequently, the
Chief Scientist need not further address Thaxter's arguments regarding
the accuracy of ORA's findings regarding whether the conduct underlying
his conviction exposed patients or their children to risk and
misbranded drugs or caused MassHealth to rely on the false and
misleading information.
A. Thaxter Is Subject to Debarment
Thaxter argues that he is not subject to debarment under section
306(b)(2)(B)(i) of the FD&C Act because the conduct to which he pled
guilty did not ``undermine[ ] the process for the regulation of drugs''
in the sense contemplated by that statutory provision:
To issue a final order of debarment, 21 U.S.C. 335a requires a
finding by the Secretary [under section 335a(b)(2)(B)] that ``the
type of conduct which served as the basis for such conviction
undermines the process for the regulation of drugs.'' . . . This
phrase is not defined in the statute. But the statute's structure
and purpose, legislative history, and FDA's own precedent make clear
that the statute is intended to reach individuals and entities that
either: (1) engage in conduct that undermines the development or
approval process itself; or (2) engage in significant fraud or
blameworthy behavior such that the extraordinary remedy of debarment
would be appropriate to prevent that person from even indirectly
participating in the process of drug approval and regulation.
In addition to raising constitutional issues regarding any contrary
construction of section 335a(b)(2)(B), discussed in more detail below,
he maintains, ``There is no reason to conclude that Congress intended
FDA to impose the draconian debarment sanction for infractions that do
not significantly undermine the regulatory process.'' Thaxter further
argues that his criminal conduct lacks a sufficient nexus to ``the
regulation of drug products'' under the FD&C Act and did not include
sufficiently fraudulent or blameworthy behavior to warrant debarment if
such conduct did not relate to the development or approval process for
drugs:
[His] conviction is not related to the development or approval
process itself, and the conviction as described in the Information
is not sufficiently severe standing alone to call into question the
integrity of the process for review and approval of drug products
such that it would warrant debarment as contemplated by the drafters
of the statute. [He] had no bad intent and no contemporaneous
knowledge of the underlying 2012 misstatements by an employee who
did not report to him directly. When he learned about the
misstatements in 2015--more than two years after they were made--he
directed their correction. He engaged in no fraud or dishonesty, and
he was not required to pay any restitution to MassHealth or any
other entity. His crime was being in a position of authority at
[RBP] and failing to prevent a subordinate employee who did not
report to him directly from sending inaccurate data about Suboxone
[Film] to a MassHealth official. It had nothing at all to do with
the development or approval process of Suboxone, and it did not
involve fraud, bribery, or obstruction of justice, or anything else
to support a conclusion that he cannot be trusted to participate in
the pharmaceutical industry.
In support of these arguments, Thaxter points to the legislative
history of section 306 of the FD&C Act and contends further that FDA's
own public statements during the legislative process ``demonstrate how
the debarment authority was primarily concerned with addressing
significant fraud and misconduct within the development or approval
process for drugs.'' Section 306(b)(2)(B)(i) of the FD&C Act, however,
specifically provides for debarring individuals convicted of Federal
misdemeanors related to the regulation of drug products. If the
language of the statute is clear, there is no need to look outside the
statute to its legislative history to ascertain the statute's meaning
(Chamber of Commerce of United States v. Whiting 63 U.S. 582, 599
(2011)). Furthermore, as the Supreme Court has repeatedly held, the
language in the FD&C Act should be construed in a manner that is
consistent with its overall public health purpose. When we are dealing
with the public health, the language of the FD&C Act should not be read
too restrictively, but rather as ``consistent with the Act's overriding
purpose to protect the public health'' (United States v. Bacto-Unidisk,
394 U.S. 784, 798 (1969)).
Thaxter's further argument that he is not subject to debarment
under section 306(b)(2)(B)(i)(I) of the FD&C Act because he pled guilty
to a Federal misdemeanor offense without admitting any intent to
violate the law or knowledge of wrongdoing is also unavailing. Given
that section 306(b)(2)(B)(i) explicitly permits debarring individuals
convicted of Federal misdemeanors related to the regulation of drug
products and that a misdemeanor violation of the FD&C Act itself is a
strict liability offense under
[[Page 12378]]
section 303(a)(1), it stands to reason that criminal intent is not
required to subject an individual to debarment under section
306(b)(2)(B)(i)(I). In this case, however, Thaxter's guilty plea was
not based on strict liability or ``pure, vicarious liability,'' as he
argues. As highlighted in ORA's proposal, his conviction was based on
his failure to prevent RBC ``from sending false and misleading
information to MassHealth related to the relative rate of unintended
pediatric exposures of Suboxone Film'' and ``to promptly correct that
information once it was provided.'' Indeed, the Information to which
Thaxter pled guilty provided that he, ``as a responsible [RBP]
executive failed to prevent and promptly correct the distribution of
the false and misleading unintended pediatric exposure data and
marketing claims to MassHealth'' and that, accordingly, he caused the
introduction and delivery for introduction of a misbranded drug into
interstate commerce. He cannot now hide behind his arguments that he
lacked specific knowledge that the labeling for the Suboxone Film was
false and misleading in attempting to overcome the debarment resulting
from the facts admitted to as part of his plea agreement. As the
Supreme Court has reasoned, in keeping with the FD&C Act's purpose of
protecting the public from adulterated and misbranded products,
Congress chose to place the burden of protecting the public on those
who play a role in manufacturing and distributing those products rather
than on consumers, who cannot protect themselves (United States v.
Dotterweich, 320 U.S. 277, 280-81 (1943)). The duty imposed on
responsible corporate officers (RCOs) ``requires the highest standard
of foresight and vigilance'':
The requirements of foresight and vigilance imposed on
responsible corporate agents are beyond question demanding, and
perhaps onerous, but they are no more stringent than the public has
a right to expect of those who voluntarily assume positions of
authority in business enterprises whose services and products affect
the health and well-being of the public that supports them (Park,
421 U.S. at 672-73).
Nor are Thaxter's arguments that his conduct underlying his
conviction ``lack[ed] the required nexus to the `process for the
regulation of drugs''' to subject him to debarment under section
306(b)(2)(B)(i)(I) of the FD&C Act availing. Simply put, he pled guilty
to causing the introduction of a misbranded drug into interstate
commerce in violation of the FD&C Act (specifically, sections 301(a),
303(a)(1), and 502(a) of the FD&C Act). In section 306(b)(2)(B)(i)(I),
``a misdemeanor under Federal law or a felony under State law for
conduct . . . otherwise relating to the regulation of drug products''
subjects an individual to permissive debarment. There are no genuine
and substantial issues of fact regarding whether Thaxter pled guilty
to--and therefore committed--a misdemeanor under Federal law. When that
Federal misdemeanor is for conduct that directly violated the FD&C Act
with respect to drug labeling, there is no question that such violation
relates to the regulation of drugs under that statutory authority.
Thaxter makes many similar arguments with respect to whether the
conduct to which he pled guilty as part of his misdemeanor plea is
``the type of conduct [that] . . . undermines the process for the
regulation of drugs'' under the FD&C Act in the sense contemplated by
section 306(b)(2)(B)(i)(I) of the FD&C Act. In doing so, he attempts to
distinguish between conduct relating to the development and approval
process for drug products and conduct relating to other aspects of drug
regulation under the FD&C Act. Although he supports that distinction by
pointing to the legislative history of section 306 and offering policy
arguments, neither section 306(b)(2)(B)(i)(I) nor the FD&C Act as a
whole bear out that distinction. The plain language of section
306(b)(2)(B)(i)(I) does not draw the distinction urged by Thaxter and
indeed expands the scope of the statutory provision beyond conduct
relating to the development and approval process by including the
language ``otherwise relating to the regulation of drug products.''
With respect to the purpose of FD&C Act as a whole, the Supreme Court
has found that its aims go well beyond the development and approval
process for drug products: ``Its purpose [is] to safeguard the consumer
by applying the Act to articles from the moment of their introduction
into interstate commerce all the way to the moment of their delivery to
the ultimate consumer'' (United States v. Sullivan, 332 U.S. 689, 696
(1948)).
Thaxter nonetheless argues that the ``underlying facts of [his]
plea only demonstrate[] a `technical' misbranding'' and that thus his
conduct did not undermine the process for the regulation of drugs. As
ORA correctly determined, however, his conduct went beyond a mere
technical violation of the FD&C Act. Thaxter's conduct included
providing inaccurate information about a drug product to a State health
agency focused on the safety profile of the drug at issue:
[Thaxter's] actions undermined the process for the regulation of
drugs because [he] failed to prevent [RBP] from sending false and
misleading data and information to MassHealth related to the rate of
unintended pediatric exposure to Suboxone Film[] and did not
promptly correct such information and data.
Notwithstanding Thaxter's assertions to the contrary, an important
and fundamental objective of the FD&C Act is preventing the labeling of
a drug product from containing false and misleading information about
the product's safety profile.\2\ The type of conduct to which Thaxter
pled guilty did undermine the process for the regulation of drugs in
the sense contemplated by both section 306(b)(2)(B)(i)(I) and the FD&C
Act as a whole.
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\2\ In fact, as has already been discussed at length, Thaxter
admitted that the conduct in question--for which he admitted
responsibility as an RCO--misbranded a drug product while in the
very chain of commerce that the Supreme Court has said the FD&C Act
is intended to safeguard in order to protect the consumer (see
Sullivan, 332 U.S. at 696).
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In light of the foregoing, the Chief Scientist finds that Thaxter
has failed to raise a genuine and substantial issue of fact with
respect to (1) whether the conduct serving as the basis of his Federal
misdemeanor conviction related to the regulation of drugs and is the
type of conduct that undermines the process for the regulation of drugs
and thus (2) whether he is subject to debarment under the terms of
section 306(b)(2)(B)(i)(I) of the FD&C Act.
B. Appropriateness of a 5-Year Debarment Period
In support of his hearing request, Thaxter further argues in his
Memorandum that he is entitled to a hearing on ORA's findings with
respect to the considerations in section 306(c)(3) of the FD&C Act. He
contends both that ORA erred in considering only three of the six
factors in section 306(c)(3) and that there are genuine and substantial
issues of fact with respect to five of the six factors. With respect to
the sixth factor, which concerns whether a person subject to debarment
has prior convictions under the FD&C Act or for offenses for matters
within the jurisdiction of FDA, Thaxter argues that ORA ``failed to
afford any weight the fact that [he] has no prior convictions.''
Thaxter's argument that the Agency must consider all six factors in
section 306(c)(3) of the FD&C Act in determining the appropriateness
and period of his debarment under section 306(b)(2)(B)(i)(I) is belied
by the language of the statute. FDA need only address the
considerations in section
[[Page 12379]]
306(c)(3) ``where applicable.'' The considerations in section 306(c)(3)
apply not only to individuals but also to corporations, partnerships,
and associations subject to permissive debarment under section
306(b)(2) and (3). Thus not all aspects of the considerations are
necessarily applicable in every case.
In his Memorandum, Thaxter specifically points to the
considerations in section 306(c)(3) of the FD&C Act on which ORA made
no findings in its proposal, specifically paragraphs (B), (D), and (E).
Paragraphs (D) and (E) are not applicable to Thaxter based on the
undisputed record before FDA. Under section 306(c)(3)(D), FDA must,
``where applicable,'' consider ``whether the extent to which changes in
ownership, management or operations have corrected the causes of any
offense involved and provide reasonable assurances that the offense
will not occur in the future.'' Under 306(c)(3)(E), the Agency must,
again ``where applicable,'' consider ``whether the person to be
debarred is able to present adequate evidence that current production
of drugs subject to abbreviated new drug applications [ANDAs] and all
pending [ANDAs] are free of fraud and material false statements.''
Those two considerations are rarely, if ever, applicable to an
individual, particularly one that is no longer employed by the business
entity where that individual committed the offenses at issue, as is the
case here. Whether it is appropriate to debar an individual as a
remedial measure to protect the integrity of the process for regulating
drugs and, if so, for how long, turns on an assessment of the
individual in light of the conduct underlying the offense and other
factors related to the individual. The applicable considerations for
individuals under section 306(c)(3) of the FD&C Act thus do not
typically hinge on corrective actions at a corporation or any other
efforts made by that corporation to prevent the promulgation of fraud
or materially false statements.
The focus under section 306(c)(3)(D) of the FD&C Act is on whether
there have been changes in ownership, management, or operations that
might provide assurances that the offense at issue will not occur
again. This consideration could only be meaningful to assessing the
appropriateness and period of debarment for an individual if those
changes occurred at a business enterprise in which the individual is
currently engaged and the individual could not acquire a position
elsewhere in the drug industry absent debarment. Furthermore, not only
does Thaxter attempt to expand the scope of section 306(c)(3)(E) to
include measures taken to prevent the promulgation of fraud or
materially false information beyond those relating to ANDAs, he relies
on the steps taken by another person: Invidior PLC (Invidior), a
successor corporation to RBP for which he also served as Chief
Executive Officer. Nonetheless, insofar as Thaxter describes evidence
or raises facts about corrective actions at RBP's successor company,
Invidior, the Chief Scientist evaluates those proffered facts and
arguments in the context of the consideration regarding ``voluntary
steps'' in section 306(c)(3)(C), which is applicable to individuals.
In his Memorandum, as noted above, Thaxter argues that ORA's
proposal to debar him for 5 years ignored the consideration in section
306(c)(3)(B) of the FD&C Act, namely ``the nature and extent of
management participation in any offense involved, whether corporate
policies encouraged the offense, including whether inadequate
institutional controls contributed the offense.'' He contends that the
Agency should grant ``a hearing to ensure this factor is afforded
proper weight in FDA's consideration of the [section 306(c)(3)]
factors.'' In support of this position, Thaxter points to his
motivations, as the highest-ranking executive officer at RBP, to
encourage the truthful promotion of Suboxone Film and other
buprenorphine-containing products and to prevent abuse and diversion,
and he lists a series of company policies, initiatives, and
communications in which he claims to have had a hand in issuing or
developing.
In contrast to the considerations in paragraphs (D) and (E) of
section 306(c)(3) of the FD&C Act, the Agency has often considered the
factor in subparagraph (B) in assessing the appropriateness and period
of debarment for individuals under section 306(b)(2)(B)(i)(I) of the
FD&C Act (see, e.g., ``Dilip Patel; Denial of Hearing; Final Debarment
Order'' (83 FR 48829 at 48830, September 27, 2018)). The record before
FDA does not disclose why ORA did not find that consideration to be
applicable here, and the proposal does not cite the consideration as
either a favorable or unfavorable factor. Even if the Agency were to
consider the factor in section 306(c)(3)(B) in assessing the
appropriateness and period of Thaxter' debarment in light of the
additional policies, initiatives, and communications described by him
in his Memorandum, that factor would not be favorable.
As discussed above in relation to whether conduct underlying
Thaxter's conviction was sufficiently serious to warrant debarment, and
as highlighted in ORA's proposal, Thaxter admitted during his criminal
proceedings that he was an RCO with authority to either prevent in the
first instance or to promptly correct the provision of false and
misleading information to MassHealth and that he took neither action.
By admitting such authority and responsibility, Thaxter conceded both
that he served in a managerial role for the offense involved and that
the ``corporate policies and practices'' to which he points--many of
which do not directly relate to the offense to which he pled guilty--
were inadequate to prevent that offense. Indeed, the essence of his
guilty plea as an RCO is that he failed to fulfill the duties imposed
on him by the FD&C Act by having the policies and practices in place
(including his own, as an individual RCO) to prevent the offense at
issue. Given that the consideration in section 306(c)(3)(B) of the FD&C
Act would not be favorable to Thaxter, even assuming the accuracy of
the additional information provided by him, the Chief Scientist, like
ORA, will not treat this consideration as either favorable or
unfavorable.
With respect to the three considerations under section 306(c)(3) of
the FD&C Act on which ORA made factual findings in its proposal to
debar him, Thaxter disputes the factual basis for two of them and
argues that ORA's proposal gives insufficient weight to the third.
After separately evaluating the arguments with respect to the factual
basis for two of the considerations--specifically, those under
paragraphs (A) and (C)--the Chief Scientist assesses whether, taken
together, the three considerations warrant debarment for 5 years,
including the weight to be given the third under subparagraph (F).
Thaxter first argues that ORA's assessment of the nature and
seriousness of his offense under section 306(c)(3)(A) is flawed: (1)
because ORA erroneously relied on the premise that his criminal conduct
``put children at risk,'' and (2) because ``failing to prevent a
subordinate employee from providing misleading information to a state
Medicaid official more than eight years ago'' is not sufficiently
serious or recent enough to warrant a 5-year debarment period,
especially without a showing that such conduct resulted in ``drugs
being tainted or counterfeited'' or ``patient care [being]
compromised.'' It is not necessary to go beyond the facts to which
Thaxter pled guilty to resolve the additional factual issues to which
Thaxter now points. Whether Thaxter's
[[Page 12380]]
conduct ``put children at risk'' or compromised patient care is not
determinative with respect to the appropriateness of debarring him for
5 years. It is also not necessary to reach whether his conduct caused
drug products to be tainted or counterfeited.
Notwithstanding Thaxter's assertions to the contrary, as ORA found
and has been discussed at length above, Thaxter took responsibility for
RBP's introducing, and delivering for introduction, a misbranded drug
into interstate commerce. He admitted as part of his guilty plea that
he was in a position both to prevent the violations resulting from his
subordinate's conduct--i.e., the inclusion of false and misleading
information in the labeling for Subluxone Film--or to correct them
promptly. But he did not. Building on the reasoning above with respect
to whether the type of conduct serving as the basis of Thaxter's
misdemeanor conviction undermined the process for the regulation of
drugs, the Chief Scientist finds that Thaxter's role and responsibility
in the introduction of a drug whose labeling and false and misleading
under section 502(a) of the FD&C Act--especially when the labeling at
issue went directly to a State Medicaid agency and when viewed within
the range of potential misdemeanor convictions that might subject an
individual to permissive debarment under section 306(b)(2)(B)(i)(I)--is
sufficiently serious to warrant treatment as an unfavorable factor. In
short, Thaxter has failed to raise a genuine and substantial issue of
fact with respect to ORA's findings regarding the nature and
seriousness of his offense under section 306(c)(3)(A).
Thaxter next argues that, in evaluating ``the nature and extent of
voluntary steps to mitigate the impact of any offense involved'' under
section 306(c)(3)(C) of the FD&C Act, ORA did not fully consider his
role in authorizing ``a disclosure to MassHealth alerting it to the
misinformation sent previously.'' He takes issue with ORA's suggestion
that ``the delay in sending the correction letter--which was not [his]
fault . . . since he had no knowledge of the underlying conduct at the
time--justifies discounting the weight of the corrective letter that
[he] directed the Company to send promptly after he learned of the
events at issue.'' Again, however, the facts to which Thaxter pled
guilty belie this assertion. As part of his guilty plea, he admitted
that he was an RCO ``with authority to either prevent in the first
instance or to promptly correct the provision of false and misleading
information to MassHealth and that he took neither action.'' He cannot
now claim that his corrective action was prompt, and he does not
dispute that he directed the correction ``only after an investigation
was opened into this matter.''
Thaxter further maintains that, in light of the eventual corrective
action directed by him, ORA's conclusion that he failed to ``take any
steps to mitigate the potential impact on the public (emphasis
Thaxter's)'' is unfounded. But neither ORA's evaluation of this
consideration as a whole in the proposal nor the Chief Scientist's
evaluation hinges to any meaningful degree on the omission of the word
``prompt'' in ORA's conclusion to that effect. Furthermore, although
Thaxter argues that ``a hearing is needed to clarify the steps [he]
took after he learned of the misstatement and the corrective action he
directed the Company to take,'' he does not provide sufficient detail
regarding ``voluntary steps'' under section 306(c)(3)(C) to deduce what
those steps were and thus fails to present a material factual issue
with respect to those steps to be resolved at a hearing.
Insofar as Thaxter points to additional, specific corrective
actions, he does so in his arguments regarding paragraphs (D) and (E)
of section 306(c)(3) of the FD&C Act in regard to the actions of
Invidior, as noted above. With respect to whether changes in operations
at Invidior have corrected the cause of his own misdemeanor offense, he
points to a Corporate Integrity Agreement with the Office of Inspector
General in the Department of Health and Human Services (CIA) into which
the company entered as part of a comprehensive settlement agreement.
However, Thaxter fails to point to any role he might have had in that
CIA as an individual. Thaxter's arguments regarding the CIA's
requirement that Invidior adopt ``detailed and state-of-the-art
compliance measures'' to ensure that the manufacture and sale of its
drug products remain free of fraud and materially false statement must
fail on analogous reasoning. Accordingly, the Chief Scientist finds
that Thaxter has failed to raise a genuine and substantial issue of
fact with respect to ORA's findings regarding the voluntary steps taken
by him to mitigate the effect of his offense on the public under
section 306(c)(3)(C).
Based on the undisputed record before FDA, primarily encompassing
the facts to which Thaxter pled guilty, the Chief Scientist finds that
a 5-year debarment is appropriate. Although Thaxter has no previous
criminal convictions related to matters within the jurisdiction of FDA,
this sole favorable factor does not counterbalance the nature and
seriousness of his offense and lack of voluntary steps promptly taken
to mitigate the effect of that offense on the public. As has been
discussed at length, Thaxter admitted as part of his guilty plea that,
as an RCO, he possessed the authority, opportunity, and responsibility
to prevent or promptly correct conduct that caused false and misleading
information to go to a State Medicaid agency and thereby caused the
introduction of a misbranded drug into interstate commerce. His failure
to prevent or promptly correct conduct breached the fundamental
responsibility as an RCO when he voluntarily assumed a ``position[ ] of
authority in [a] business enterprise[ ] whose services and products
affect the health and well-being of the public'' (Park, 421 U.S. at
573). In short, the Chief Scientist agrees with ORA's conclusion in its
proposal that ``the facts supporting the unfavorable factors outweigh
those supporting the favorable factor, and therefore warrant the
imposition of a five-year period of debarment.''
C. Remaining Legal Arguments
In addition to the foregoing arguments regarding the statutory and
factual basis for his debarment, Thaxter argues that debarring him
``for a non-intent, strict liability misdemeanor, without any
assessment of underlying knowledge or lack of participation in the
conduct of the offense'' would violate ``both his procedural and
substantive due process rights'' under the Fifth Amendment, given the
liberty and property interests at stake. He claims a lack of notice
that he could be subject to debarment for conduct as an RCO. Relying on
Morissette v. United States, 342 U.S. 246, 256 (1952), he also argues
that the effect debarment will have on his employment opportunities in
his chosen profession and his reputation go beyond the effects of a
misdemeanor conviction contemplated by the Supreme Court in that case.
As is extensively discussed above, however, Thaxter did not plead
guilty based purely on strict liability. He admitted as part of his
guilty plea that he was an RCO ``with authority to either prevent in
the first instance or to promptly correct the provision of false and
misleading information to MassHealth and that he took neither action.''
(see Park, 421 U.S. at 673-74). As discussed above, under the terms of
section 306(b)(2)(B)(i)(I) of the FD&C Act, he is subject to permissive
debarment for up to 5 years based on the Federal misdemeanor to which
he pled guilty.
[[Page 12381]]
The FD&C Act itself provides for misdemeanor liability under
section 303(a)(1). Taken together, section 306(b)(2)(B)(i)(I) and
(c)(3) prescribes the circumstances under which the Agency will
exercise its discretion to debar individuals convicted of misdemeanors
under the FD&C Act. Furthermore, in this case, the Agency has made the
appropriate findings and considered the proper statutory criteria in
evaluating the appropriateness and period of Thaxter's debarment.
Accordingly, the Chief Scientist does not agree that Thaxter's
debarment for 5 years violates his right to due process.
Thaxter next argues that debarring him for 5 years would be
``unreasonable and would not comport with the basic requirements of
reasoned decision-making'' unless FDA were to justify ``the radical
departure from precedent that debarring [him] would represent.'' He
argues further that ``it would be arbitrary, capricious, and contrary
to law for FDA to [debar] a party that has not taken action that poses
a significant threat to the integrity of the regulatory system'' or
``not to hold a hearing to support its position.''
Based on Thaxter's arguments and the case law he cites, he appears
to be relying on the judicial standard for review of Agency decision-
making in the APA at 5 U.S.C. 706(2), which directs courts to ``hold
unlawful and set aside agency action[s]'' that are ``arbitrary,
capricious, an abuse of discretion, or otherwise not in accordance with
law.'' As the Supreme Court has held, the question under that standard
is whether the Agency has provided a reasonable explanation for the
substance its decision:
The APA's arbitrary-and-capricious standard requires that agency
action be reasonable and reasonably explained. Judicial review under
that standard is deferential, and a court may not substitute its own
policy judgment for that of the agency. A court simply ensures that
the agency has acted within a zone of reasonableness and, in
particular, has reasonably considered the relevant issues and
reasonably explained the decision (FCC v. Prometheus Radio Project,
141 S. Ct. 1150, 1158, 209 L. Ed. 2d 287 (2021)).
In this matter, as reflected in the lengthy discussion above, the
Agency has reasonably considered the relevant issues and fully
explained its decision to debar Thaxter. Although Thaxter points to
other individuals who pled guilty to misdemeanors based on liability as
RCOs and who have not been debarred, he provides no details with
respect to those individuals' convictions. Even assuming, however, that
those individuals were similarly situated to him, his bare assertion
that an Agency cannot choose to begin pursuing debarment of individuals
for certain discrete categories of Federal misdemeanor convictions
because it has not done so in the past is unfounded. As discussed, the
terms of section 306(b)(2)(B)(i)(I) and (c)(3) of the FD&C Act are
clear, and the Agency has exercised its discretion here in a manner
consistent with the permissive debarment of many other individuals
convicted of Federal misdemeanors. Accordingly, Thaxter's argument that
debarring him is arbitrary, capricious, and contrary to law lacks
merit.
III. Findings and Order
Therefore, the Chief Scientist, under section 306(b)(2)(B)(i)(I) of
the FD&C Act and under authority delegated to her by the Commissioner
of Food and Drugs, finds that (1) Thaxter has been convicted of a
misdemeanor under Federal law for conduct relating to the development
or approval, including the process for development or approval, of a
drug product or otherwise relating to the regulation of a drug product
under the FD&C Act and (2) the type of conduct which served as the
basis for the conviction undermines the process for the regulation of
drugs. FDA has considered the applicable factors listed in section
306(c)(3) of the FD&C Act and determined that a debarment of 5 years is
appropriate.
As a result of the foregoing findings, Thaxter is debarred for 5
years from providing services in any capacity to a person with an
approved or pending drug product application under sections 505, 512,
or 802 of the FD&C Act (21 U.S.C. 355, 360b, or 382), or under section
351 of the Public Health Service Act (42 U.S.C. 262), effective (see
DATES) (see 21 U.S.C. 335a(c)(1)(B) and (c)(2)(A)(iii) and 21 U.S.C.
321(dd)). Any person with an approved or pending drug product
application, who knowingly uses the services of Thaxter, in any
capacity during his period of debarment, will be subject to civil money
penalties (section 307(a)(6) of the FD&C Act (21 U.S.C. 335b(a)(6))).
If Thaxter, during his period of debarment, provides services in any
capacity to a person with an approved or pending drug product
application, he will be subject to civil money penalties (section
307(a)(7) of the FD&C Act). In addition, FDA will not accept or review
any abbreviated new drug applications submitted by or with the
assistance of Thaxter during his period of debarment (section
306(c)(1)(B) of the FD&C Act).
Dated: February 21, 2023.
Namandj[eacute] N. Bumpus,
Chief Scientist.
[FR Doc. 2023-03941 Filed 2-24-23; 8:45 am]
BILLING CODE 4164-01-P
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</html>Indexed from Federal Register on February 27, 2023.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.