United States Sentencing Commission Issues Proposed Guidelines That Will Likely Greatly Enhance Criminal Penalties for Some FDC Act Violations & Requests Public Comments on Issues Relating to Other FDC Act Violations

January 14, 2008

The United States Sentencing Commission (“Commission”), which sets the guidelines that are usually followed by federal judges sentencing defendants convicted of federal crimes, has issued proposed Sentencing Guidelines (“Guidelines”) that would likely greatly enhance the criminal penalties applied to some criminal violations of the Federal Food, Drug and Cosmetic Act (“FDC Act”), and has requested public comment whether to increase penalties for all other violations of the FDC Act.  We previously reported that the Commission was considering amending the Guidelines.

In our previous post, we noted that a Commission vote on proposed amendments to the FDC Act was likely in January 2008.  At its public meeting held on January 9, 2008, the Commission voted to publish proposed amendments to the Guidelines and to seek comments on certain issues relating to human growth hormone (“HGH”) offenses, Prescription Drug Marketing Act (“PDMA”) offenses, and other FDC Act offenses.  (The PDMA, which was enacted in April 1988, amended the FDC Act to, among other things, require State licensing of wholesale distributors of prescription drugs under certain Federal guidelines; ban the sale, trade, or purchase of drug samples; and require wholesale distributors to audit drug sample distribution and accounting.)

Once published in the Federal Register, the public will have 60 days to submit comments on the proposed amendments and issues raised in the notice.

The action by the Commission with respect to FDC Act violations committed by individuals (but not corporations) is a rare one.  More than 20 years ago, in connection with the initial promulgation of the Guidelines, the Commission issued § 2N2.1, which then, like now, applied to FDC Act regulatory offenses.  Section 2N2.1 has always contained a cross-reference to the fraud guideline (formerly § 2F1.1, presently § 2B1.1).  Approximately 11 years ago, in response to efforts by the federal government, the Commission proposed making all FDC Act violations subject to the tougher fraud guidelines.  After substantial industry opposition to that proposal, it was withdrawn, and the status quo was maintained.

Now, after more than a decade since it last showed any inclination to address the issue, the Commission appears prepared to consider fundamentally altering how the Guidelines are applied in cases involving FDC Act offenses, and not likely with an eye towards making them less harsh.  To date, § 2N2.1 Guidelines application issues have been simple as compared to other sentencing considerations. 

According to the Commission’s proposed amendments and issues for comment, “[t]he Commission has received some public comment stating that the penalties under §2N2.1 are inadequate to deter second or subsequent violations of the [FDC Act, and] [s]ome commentators also state that §2N2.1 does not adequately punish violations of the PDMA, which carry a 10 year statutory maximum term of imprisonment.”  Based on these comments and other considerations, the Commission has now asked “[s]hould the Commission provide alternative base offense levels, specific offense characteristics identifying aggravating factors warranting an enhanced sentence, or some combination of these to more adequately address these offenses?” Moreover, the Commission invites suggestions regarding “what should be the offense levels associated with alternative base offense levels and/or specific offense characteristics.”  These statements strongly suggest that any Commission action will result in harsher Guidelines.

Significantly, the Commission may, based upon public comment, vote to recommend a revised § 2N2.1 to Congress without ever first publishing for public comment the details of proposed amendments to § 2N2.1.  It seems clear that those advocating for stiffer Guidelines sentences for FDC Act offenses have made their voices heard and will continue to do so.  It would also seem clear that the regulated industry should present its views on this matter to try to affect any final Commission action, unless the regulated industry wants to concede the need for stiffer Guidelines and the resulting longer terms of imprisonment and increases in other associated criminal penalties.

In addition to its more open-ended invitation for comment, the Commission’s notice contains certain more concrete proposals, particularly with respect to setting forth a Guideline for HGH.  The proposed amendments to the Guidelines do the following with respect to HGH:

1.  Adds 21 U.S.C. § 333(e) – distribution of HGH – to the list of offenses to which § 2D1.1, the general controlled substance Guideline, applies.

2.  Makes a defendant convicted of an HGH offense subject to a two level enhancement under § 2D1.1(b)(6) for “mass marketing [HGH] by means of an interactive computer service.”  This existing specific offense characteristic currently applies to only controlled substances, which HGH is not..  Application Note 23 provides guidance regarding how this provision is applied as well as the definition of “interactive computer service.”

3.  Adds 21 U.S.C. § 333(e)(2) – distribution of HGH to a person under 18 years of age – to the § 2D1.2 Guideline, which presently applies to controlled substance offenses involving protected locations (e.g., schools) or pregnant or underage persons.

The notice also identifies various issues for comment regarding HGH offenses.

With respect to other FDC Act offenses, the proposed amendments:

4.  Add the first and only specific offense characteristic to § 2N2.1.  The purpose of this amendment appears to be to increase the Guidelines level for second or subsequent FDC Act convictions where the defendant is not convicted of committing the offenses with the “intent to defraud and mislead.”  At present, despite the second offense being a felony – regardless of intent to defraud or mislead – the Guidelines did not take that statutory difference into account.

5.  Add an application note to § 2N2.1 to include substantial risk of bodily harm as a basis for upward departure.  While actual death and physical injury are currently identified grounds for an upward departure under 5K2.1 and 5K2.2 respectively, for FDC Act and other offenses, those sections do not apply to the risk of death or injury.

As we previously reported, the Commission must submit Guideline amendments to Congress no later than May 1, 2008.  As we have noted, because a Guidelines amendment requires a public Commission meeting, such a meeting would have to take place in April at the latest, and could come up for a vote in March.  Prior to such a meeting, there is likely to be a public hearing.   

In sum, these proposed amendments and the issues raised in the notice could result in significantly increased penalties for persons regulated under the FDC Act, and therefore, those persons should carefully consider the potential impact of the proposed amendments and issues raised for comment in the notice and determine how to best to inform the Commission and staff of any improper or unduly harsh consequences that could flow from the Commission action on these Guidelines. 

By John R. Fleder, Douglas B. Farquhar, and J.P. Ellison


  • On January 28, 2008, the United States Sentencing Commission issued a notice in the Federal Register on the Commission’s proposed amendments to the Sentencing Guidelines.  The notice also states that “[t]he Commission will be scheduling a public hearing on its proposed amendments.”

UPDATE (February 7, 2008):

  • Today, the Commission announced that the Public Briefing on the proposed amendments- which was the subject of our earlier update- will be held on February 13, 2008 from 9:30 AM to 11:30 AM.
  • HPM Attorneys John Fleder and John Gilbert have been selected to participate in a panel testifying before the Commission regarding the proposed FDC Act and PDMA amendments.
Categories: Enforcement