Life (or is it really?) Under a Consent Decree Steven Niedelman Lead Quality Systems & Compliance Consultant King & Spalding LLP 1700 Pennsylvania Ave., NW Washington, DC 2006 202-626-2942 sniedelman@kslaw.com
Why an Injunction? An injunction is a civil judicial process initiated to stop or prevent violation of the law, such as the halt of violative products in interstate commerce and to correct the conditions that caused the violation to occur. Regulatory Procedures Manual Injunctions are the action of choice when there is a history of violations and promised corrections have not been made Injunction actions must be credible and current as well as timely. Multi-district injunctions are pursued by FDA when similar violative practices are found at two or more facilities under the same corporate management to determine patterns of violations 2
Why an Injunction? In the McNeil situation the criteria had been met! Once proudly heralded as the Gold Standard for handling the Tylenol tampering incident, management and commitment to quality shifted over the years The firm was accused of buying violative product off the shelves Conducting a silent recall in lieu of notifying FDA and voluntarily recalling product The firm has had a number of recall activities - many of which attributable to breaches of their own quality system and ignoring their established requirements Contributing to these issues are the quality of ingredients being outsourced and the consequences of not effectively monitoring their suppliers 3
Fact Set: McNeil Consumer Healthcare PPC : Firm ignored their own specifications and cgmp s Used microcrystalline cellulose containing gram negative bacteria B. cepacia supplied by vendor Vendor identified presence of B. cepacia but findings were ignored by McNeil Healthcare Manufacturing specifications require there be no gram negative bacteria Nationwide Class I recall of pediatric OTC products In 2011, recall of 13 million packages of Rolaids after reports of metal and wood parts from third party manufacturer McNeil Consumer Healthcare enjoined from further manufacture and distribution of drug products until determined to be found in compliance by FDA 4
Case Study: McNeil Consumer Healthcare PPC : Injunction Covers three manufacturing sites Fort Washington, Pennsylvania Lancaster, Pennsylvania Las Piedras, Puerto Rico Requires destruction of all lots of drugs in their possession or control FDA invoked supplier quality requirements for pharmaceutical mfr. To provide copy of decree within 15 business days to all employees, new associates, directors, officers, agents, successors, assigns, attorneys and any and all persons in active concert or participation with any of them, who are also permanently restrained and enjoined from manufacturing, processing, packing, labeling, holding and distributing drugs at or from the 3 locations until found compliant by third party independent expert and confirmed by FDA Decree to be posted in public area within 20 days of entry for no less than 12 months; Requires affidavit to FDA within 30 days of entry to confirm compliance 5
Case Study: McNeil Consumer Healthcare Consent Decree Requirements: Ft. Washington Requires independent third party cgmp expert, acknowledged by FDA, to perform a comprehensive gap analysis inspection to assess current conditions compared to what is required for compliance with the Act and regulations Gap analysis scoped to include a review of all cgmp deviations at the Ft. Washington facility from October 2009 to date of entry of decree At firm s expense Expert will also review all FDA-483 s issued to Lancaster and Las Piedras facilities since October 2009 6
Case Study: McNeil Consumer Healthcare Consent Decree Requirements: Ft. Washington cgmp Expert inspections shall determine whether Defendants have: Adequate facilities and equipment Equipment appropriately designed for is intended use that has been adequately qualified and maintained Validated manufacturing processes and process design procedures to ensure in-process and final drug products meet specification Established and implemented a written comprehensive QA/QC program Established management controls for the manufacture, processing, packing, labeling, holding and distribution of drugs Adequate training and qualification program to ensure employees have the education, training and experience to perform their duties Implemented a scientifically sound system of laboratory controls to assure components, containers, etc., are in compliance with laws and regulations Implemented an effective building and facility control system that provides for sufficient cleaning and maintenance 7
Case Study: McNeil Consumer Healthcare Consent Decree Requirements : Ft. Washington Decree includes Supplier Quality Provisions! Processes in place to ensure the qualification of parties supplying materials, and the quality of the purchased materials Processes in place to ensure that when one or more drug manufacturing, processing, packing, labeling, holding or distribution functions are contracted or outsourced to another party, responsibilities are defined for each party involved, periodic audits are performed, the contracted or outsourced site is appropriately monitored and appropriate product and process information is promptly transferred from the defendants to the other party 8
Case Study: McNeil Consumer Healthcare Consent Decree Requirements : Ft. Washington cgmp Expert certifies in writing to FDA that they have inspected the Ft. Washington facility that they have assessed all deviations brought to the attention of the defendant between October 2009 and date of entry of decree identified during internal audit, FDA or by any other regulatory authority The cgmp expert shall certify all have been corrected and if maintained and implemented, firm will remain in conformity FDA may within 60 business days begin an inspection at Ft. Washington to determine compliance; if not will issue notice of compliance within 60 business days after receipt of experts cert. Defendants may perform development activities, equipment qualification, validation of drug manufacturing processes, method validation, conducting investigations or stability studies
Case Study: McNeil Consumer Healthcare Consent Decree Requirements : Lancaster/Las Piedras Within 10 business days of entry of the decree shall retain an independent cgmp expert to inspect each facility; requires FDA notification/acknowledgement Within 20 days after entry of the decree, the experts shall conduct comprehensive inspections at both facilities looking back to all cgmp deviations identified by internal audit, FDA or other regulatory authority since October, 2009. Inspections completed within 150 days of decree Within 20 days of completion of each inspection, the expert shall complete and submit concurrently to FDA and appropriate management at Johnson & Johnson a report detailing their findings Within 45 days of receipt of report, Defendants must submit a comprehensive work plan to FDA for review including specific timeframes for completion of each numbered step 10
Case Study: McNeil Consumer Healthcare Consent Decree Requirements : Lancaster/Las Piedras Beginning 30 days after FDA approval of work plan and quarterly thereafter, the expert shall conduct audits and submit a table to FDA summarizing his/her findings whether the numbered steps are satisfactorily completed and are on time! FDA always has the right to inspect or refute the experts findings and establish a timetable for appropriate action Once all the finding have been addressed to the experts satisfaction, a written certification shall be provided concurrently to FDA and defendants that provides assurance of compliance and sustainability FDA has the right to inspect to confirm cert. within 45 days 11
Case Study: McNeil Consumer Healthcare Consent Decree Requirements : Lancaster/Las Piedras If FDA determines the firm is not compliant, the defendant will be notified and FDA may take any other action as FDA deems appropriate. Defendants have 30 days to develop an action plan to address FDA deficiencies, subject to FDA approval. FDA may or may not re-inspect. If found compliant, notice of conformity will issue in 60 days. If no inspection is conducted, FDA has 45 days to notify defendants. Export certificates are withheld until found in conformance Within 15 days of signing of decree, Defendants shall implement batch review protocol and sampling plans subject to FDA approval - all subject to cgmp expert review of in-process, bulk and finished product batch production records and has certified in writing that any deviations found did not adversely affect the safety, identity, strength, quality and purity 12
Case Study: McNeil Consumer Healthcare Consent Decree Requirements If the defendants fail to satisfactorily complete one or more of the numbered work plan steps in accordance with the FDA approved timetable, FDA has the sole and unreviewable discretion to order McNeil to pay liquidated damages to the U.S. Treasury in the sum of $15,000 for each numbered step and for each day the timetable is missed, NTE $10 million per year Upon receiving clearance of conformity by FDA of each of the 3 facilities McNeil shall retain an independent person to conduct audit inspections at each facility no less frequently than once every 6 months for the first year and annually thereafter. At the conclusion of each audit a report shall be prepared and submitted to FDA within15 days of completion of audit. FDA in its discretion may extend the five year cycle if deviations are found. 13
Case Study: McNeil Consumer Healthcare Consent Decree Requirements The Buck Stops Here! If FDA prevails in a contempt action to enforce the Decree, Defendants shall reimburse for all attorney fees and costs, travel expenses of attorneys and witnesses, expert witness fees, investigational expenses and court costs relating to the contempt proceedings Entry into this decree does not preclude criminal charges, claims arising out of false claims act, common law claims and if applicable breach of contract, debarment, and/or exclusion in connection with any activity including conduct alleged in the Complaint filed with the decree relating to the activities of the Defendants involving FDA regulated products Signed by VP of Quality and VP of Operations, OTC Products (both McNeil Consumer Healthcare Division of McNeil-PPC) 14
Summary Operating under the terms of a Consent decree is terribly onerous and disruptive, extremely costly as well as resource intensive. Following the requirements, deadlines, assuring compliance and providing the mandatory updates is a challenge for the best project managers and quality staff. The level of FDA oversight throughout the Consent decree process is intense, and it is prompted by information being prepared and provided at your firm s expense. Operating under a Consent decree has a profoundly negative effect on your firm s reputation, brand loyalty and ability to stay competitive. Some may affect individual reputations as well. 15
Why Comply: Brand Impact MAJOR RECALL F.D.A. MEETING JUNE 29-30, 2009 JAN. 15 Panel reviews the risk of liver injury Millions of bottles of Tylenol, Motrin, WILLINGNESS TO RECOMMEND INDEX, associated with acetaminophen in Benadryl, St. Joseph Recalls aspirin and drugs like Tylenol. -100 to +100 Simply Sleep. +60 +50 Johnson & Johnson F.D.A. meetings or Congressional hearings MAJOR RECALL APRIL 30 About 136 million bottles of infants and children s liquid Tylenol, Motrin, Zyrtec and Benadryl. +40 +20 Tylenol Rolaids MAJOR RECALL DEC. 9 About 13 million packages of Rolaids soft chews. 2009 2010 2011 Source: YouGov BrandIndex and The New York Times 16 16
In the long run, Be wise and Be compliant! It s not just about complying with FDA - but makes good business sense! It is less difficult and costly in the long run!
Questions? Thank You! 18