Conference Notebook: Reporting from FDLI’s 2023 Enforcement, Compliance, and Litigation Conference

December 8, 2023By Steven J. Gonzalez

The annual Enforcement, Litigation, and Compliance Conference put on by the Food and Drug Law Institute (“FDLI”) took place in Washington this week. There were too many interesting panels and discussions to mention them all, but presentations about DOJ’s and FDA’s coordination deserve some special mention.

In his conference keynote address, Arun Rao—the Deputy Assistant Attorney General for DOJ’s Consumer Protection Branch—provided an overview of DOJ’s year in FDA enforcement. This speech is an annual victory lap for CPB’s enforcement achievements, and this year included much discussion about the Branch’s Voluntary Self Disclosure (VSD) policy. We’ve blogged on VSDs previously here and here, as the application of the VSD for FDA-regulated industry has been vexing. DOJ has provided few bright lines about when conversations and disclosures to FDA may also satisfy its own VSD requirements. Meeting those requirements might, as Rao said, make the difference between facing an indictment and receiving a declination.

At FDLI, Rao clarified that CPB’s policy dictates that “to receive credit for a disclosure, the disclosure must be made directly to the branch.” He also noted that the VSD “does not supplant existing obligations to report to appropriate regulatory agencies, nor is it intended to alter those existing practices and channels of communication.” This amounts to the clearest confirmation we’ve seen that companies in the FDA-regulated space face parallel reporting obligations when they deal with Federal oversight of FDCA violations and hope to short-circuit a potential criminal prosecution.

A panel on Day 1 discussed FDA’s efforts to ramp up domestic and foreign inspections following the COVID-19 slow down. A regulatory consultant on the panel made a recommendation to FDA that it lean more heavily on Remote Interactive Evaluations (“RIEs”) to help alleviate its backlog—of which HPM recently learned the Agency had only conducted 10 in the last 30 months for purposes of drug manufacturing compliance. Given that FDORA recently expanded FDA’s RIE authority to include device facilities, we may see more activity from FDA on this in the near future.

The last panel of Day 1 provided a bookend to the keynote’s clarifications about parallel disclosure. Panelists from CPB, FDA, and the Federal Trade Commission (FTC) all amplified the enduring government policy that they expect companies in the food and drug space have robust and legitimate compliance programs. And not to be left out of the conversation, FTC’s Associate Director on the panel noted twice that the Commission intends to be a player in this game as well and has robust plans to team with DOJ and use its enforcement authority over advertising for health products. The Associate Director highlighted FTC’s recent notice of penalty offenses sent to nearly 700 companies—many of whom may consider FDA to be their primary regulatory body—as a key example of FTC’s renewed activity in this space. She also hinted that such notices may become more common following the 2021 AMG v. FTC Supreme Court decision stripping FTC of its ability to obtain restitution or disgorgement under Section 13(b) of the Federal Trade Commission Act.

On Day 2 of the conference, HPM’s Anne Walsh moderated a fascinating conversation about due diligence investigations relating to FDA-regulated industries. Ms. Walsh is a nationally recognized expert in such matters, and the discussion combined the nuances of complex regulations, the prevailing ethos of both biotech and medtech, and securities law. Also on Day 2, HPM’s John Claud was part of a discussion of some of 2023’s more prominent enforcement resolutions, offering perspective from his vantage point as a former federal prosecutor.

The conference closed with an energized luncheon lecture that featured some amplified opinions that FDA and DOJ need to step up their criminal enforcement of bad actors in the industry, potentially by delegating the criminal enforcement authority currently centralized with OCI to FDA’s field offices. As that may develop, the 2024 edition of this conference will be worth coming back for.

Categories: Enforcement