[Federal Register Volume 59, Number 4 (Thursday, January 6, 1994)]
[Notices]
[Pages 751-754]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-210]
[[Page Unknown]]
[Federal Register: January 6, 1994]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
[Docket No. 92N-0416]
David J. Brancato; Denial of Hearing and Final Debarment Order
AGENCY: Food and Drug Administration, HHS.
ACTION: Notice.
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SUMMARY: The Deputy Commissioner for Operations of the Food and Drug
Administration (FDA) is denying a request for a hearing and issuing a
final order under section 306(a) of the Federal Food, Drug, and
Cosmetic Act (the act) (21 U.S.C. 335a(a)) permanently debarring Mr.
David J. Brancato, 13010 Atlantic Ave., Rockville, MD 20851, 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 Mr. Brancato was convicted of a felony under Federal law for
conduct relating to the development or approval, including the process
for development or approval of a drug product; and relating to the
regulation of a drug product under the act.
EFFECTIVE DATE: January 6, 1994.
ADDRESSES: Application for termination of debarment to the Dockets
Management Branch (HFA-305), Food and Drug Administration, 12420
Parklawn Dr., rm. 1-23, Rockville, MD 20857.
FOR FURTHER INFORMATION CONTACT: Diane M. Sullivan, Center for Drug
Evaluation and Research (HFD-366), Food and Drug Administration, 7500
Standish Pl., Rockville, MD 20855, 301-594-2041.
SUPPLEMENTARY INFORMATION:
I. Background
David J. Brancato, a former review chemist with FDA's Division of
Generic Drugs, pled guilty and was sentenced on January 5, 1990, for
receiving unlawful gratuities, a felony offense under 18 U.S.C.
201(c)(1)(B). This conviction was based on Mr. Brancato's acceptance of
payment of approximately $4,300 from senior officials of generic drug
manufacturers, Par Pharmaceutical, Inc. (Par), and its subsidiary, Quad
Pharmaceuticals, Inc. (Quad), while Mr. Brancato was involved in the
regulation of Par's and Quad's drug products and while he was
specifically responsible for reviewing Par's and Quad's applications to
determine whether those applications met certain statutory standards
for approval.
On December 12, 1992, Mr. Brancato received a certified letter from
the Deputy Commissioner for Operations offering Mr. Brancato an
opportunity for a hearing on the agency's proposal to issue an order
under section 306(a) of the act debarring him from providing services
in any capacity to a person that has an approved or pending drug
product application. FDA based the proposal to debar Mr. Brancato on
its finding that he was convicted of a felony under Federal law for
conduct relating to the development, approval, and regulation of Par's
and Quad's drug products.
The certified letter further informed Mr. Brancato that his request
for a hearing could not rest upon mere allegations or denials but must
present specific facts showing that there was a genuine and substantial
issue of fact requiring a hearing. The letter also notified Mr.
Brancato that if it conclusively appeared from the face of the
information and factual analyses in his request for a hearing that
there was no genuine and substantial issue of fact which precluded the
order of debarment, FDA would enter summary judgment against him and
deny his request for a hearing.
In a letter dated December 21, 1992, Mr. Brancato requested a
hearing and submitted arguments and information in support of his
hearing request. In his request for a hearing, Mr. Brancato
acknowledges that he was convicted of a felony under Federal law as
alleged by FDA; however, he argues that FDA's findings are incorrect
and that the agency's proposal to debar him is unconstitutional.
The Deputy Commissioner for Operations has considered Mr.
Brancato's arguments and concludes that they are unpersuasive and fail
to raise a genuine and substantial issue of fact requiring a hearing.
The legal arguments that Mr. Brancato offers do not create a basis for
a hearing because hearings are not granted on matters of policy or law,
but only on genuine and substantial issues of fact (see 21 CFR
12.24(b)(1)). Additionally, the material submitted in support of Mr.
Brancato's hearing request does not justify a hearing because hearings
will not be granted on the basis of mere allegations, denials, or
general descriptions of positions and contentions (see 21 CFR
12.24(b)(2)). Moreover, all of Mr. Brancato's arguments are
unconvincing for the reasons discussed below.
II. Conclusions of the Deputy Commissioner Concerning Mr. Brancato's
Arguments in Support of a Hearing
A. Mandatory Debarment of Individuals Applies Retroactively to
Convictions Occurring Within the Past 5 Years
Mr. Brancato first alleges that the debarment provisions do not
apply to conduct which occurred prior to the effective date of the act.
Mr. Brancato does not support this claim with further argument.
The provision of the act applicable to Mr. Brancato is section
306(a)(2) of the act. Initiation of debarment proceedings under that
section is not limited by when the conduct underlying the conviction
occurred, but rather, by when the conviction occurred. Under section
306(a)(2) of the act, debarment proceedings must be initiated within 5
years of the conviction (see section 306(l)(2) of the act). Debarment
of Mr. Brancato is appropriately based upon his January 5, 1990,
conviction, occurring less than 4 years ago. Because the 5-year statute
of limitations has not expired, Mr. Brancato's argument fails to raise
a genuine and substantial issue of fact.
It is unclear from Mr. Brancato's first argument whether he
intended to further allege that the debarment provisions do not apply
retroactively to convictions occurring prior to the effective date of
the act. Nevertheless, this issue is addressed below.
Congress intended section 306(a)(2) of the act to be retroactive as
evidenced by comparing section 306(a)(2) of the act, applicable to
mandatory debarment of individuals, to section 306(a)(1) of the act,
applicable to mandatory debarment of corporations. The act treats
corporations differently from individuals with respect to
retroactivity. Mandatory debarment of corporations under section
306(a)(1) of the act is not retroactive because debarment of
corporations is explicitly limited to convictions occurring ``after the
date of enactment.'' Conversely, section 306(a)(2) of the act,
pertaining to mandatory debarment of individuals, does not contain any
such limiting language. The exclusion of language barring retroactivity
for section 306(a)(2) implies that section 306(a)(2) of the act was
intended by Congress to be implemented retroactively.
In addition, section 306(l)(2) of the act shows that section
306(a)(2), pertaining to mandatory debarment of individuals, was
intended to be retroactive. Section 306(l)(2) of the act sets out the
effective dates for each provision of the act. As noted above, the
effective dates pertaining to section 306(a)(2) of the act state that
any relevant conviction may be used as the basis for mandatory
debarment of individuals, so long as the conviction occurred no more
than 5 years prior to the initiation of debarment proceedings. Section
306(l) of the act states that certain other debarment provisions shall
not be retroactive by limiting application of those provisions to
actions occurring on or after June 1, 1992. Thus, where Congress
intended a section not to be retroactive, it provided an effective date
in section 306(l) of the act. The omission of an effective date for
section 306(a) of the act and the inclusion of an effective date for
other sections reveals Congress' intent that this section be
retroactive.
Thus, as intended by Congress, and as supported by the explicit
language of the act, mandatory debarment applies retrospectively and,
thus, mandatory debarment applies to Mr. Brancato's conviction, which
occurred within 5 years prior to the effective date of the act.
Accordingly, Mr. Brancato's claim fails to raise a genuine and
substantial issue of fact.
B. The Decision To Debar Mr. Brancato Was Based Upon the Relevant
Considerations and Was Made by an Authorized Designee of the Secretary
Mr. Brancato next argues that notice to him of his proposed
debarment does not reflect consideration by the Secretary of Health and
Human Services or his designee. Mr. Brancato does not support this
claim with facts or further argument.
Sections 201 through 903 of the act (21 U.S.C. 321 through 394)
contain numerous grants of authority to the Secretary of the Department
of Health and Human Services (the Secretary). The Secretary has, in
general, delegated this authority to the Commissioner of Food and Drugs
with authority to redelegate to the Deputy Commissioner for Operations
and other officers of FDA (see 21 CFR 5.10 and 5.20). The authority
conferred in section 306 of the act is delegated to the Commissioner,
even though the legislation formally names the Secretary. The
Commissioner has redelegated that authority to the Deputy Commissioner
for Operations (21 CFR 5.20(b) and 5.20(g)(1)).
The notice of proposed debarment and opportunity for a hearing
letter received by Mr. Brancato on December 12, 1992, was issued
legally under authority delegated to FDA's Deputy Commissioner for
Operations.
The decision to propose debarment of Mr. Brancato was appropriately
based upon the following relevant considerations: (1) The nature of the
conviction (a felony under Federal law) and (2) the conduct underlying
the conviction (conduct relating to the development, approval, and
regulation of Par's and Quad's drug products) (see section I. of this
document). Because the Deputy Commissioner for Operations, an
authorized designee of the Secretary, considered the relevant factors
in making the determination to propose debarment, Mr. Brancato's claim
that the notice of his proposed debarment does not reflect
consideration by the Secretary or his designee fails to raise any issue
as to the validity of this proceeding and fails to raise a genuine and
substantial issue of fact.
C. Mr. Brancato's Conviction Subjects Him to the Mandatory Debarment
Provisions Not to the Permissive Debarment Provisions
Mr. Brancato further contends that the conduct for which he was
convicted is more appropriately conduct subject to permissive debarment
under 21 U.S.C. 306(b)(2)(B) of the act rather than to mandatory
debarment. Mr. Brancato fails to support this statement with an
explanation or further argument.
Section 306(a)(2)(A) and (a)(2)(B) of the act mandates that FDA
debar an individual if the Secretary finds that the individual has been
convicted of a felony under Federal law for conduct: (1) Relating to
the development or approval, including the process for development or
approval, of any drug product; and (2) otherwise relating to the
regulation of any drug product under the act.
As discussed above, Mr. Brancato's conviction for receiving
unlawful gratuities triggers the section 306 (a)(2) (A) and (a)(2)(B)
of the act mandatory debarment provisions. An individual convicted of
this crime will not be considered a candidate for permissive debarment
unless FDA finds that the conduct underlying the conviction did not
relate to the development or approval, or the regulation of any drug
product (see section 306(b)(2)(B)(ii) of the act). Absent such a
finding, mandatory debarment based upon such a conviction must follow.
Because FDA finds that the conduct which served the basis for Mr.
Brancato's conviction did relate to the development and approval and
the regulation of Par's and Quad's drug products, the mandatory
provisions, rather than the permissive provisions, are applicable in
this case. Mr. Brancato acknowledges that he was convicted of a felony
under Federal law. Furthermore, he does not dispute FDA's finding that
the conduct underlying his conviction relates to the development and
approval and the regulation of Par's and Quad's drug products.
Therefore, Mr. Brancato's claim fails to raise a genuine and
substantial issue of fact.
D. The Statutory Criteria Pertaining to Permissive Debarment Are Not
Relevant to Mr. Brancato's Mandatory Debarment Action
Mr. Brancato states the following: (1) There is no evidence that
the Secretary considered the statutory criteria for determining
appropriateness and period of debarment for nonmandatory (permissive)
debarment, (2) Mr. Brancato took voluntary steps to mitigate the impact
of his offense on the public, and (3) Mr. Brancato has no prior
convictions. Mr. Brancato fails to support these three statements with
further argument.
As discussed, the mandatory debarment provisions, not the
permissive debarment provisions, apply in this case. The criteria
pertaining to permissive debarment, which include evidence of
mitigation and prior convictions, may not be considered in making the
decision to initiate mandatory debarment proceedings. Because Mr.
Brancato argues for the consideration of irrelevant permissive
debarment criteria, not applicable to Mr. Brancato's mandatory
debarment action, his claim fails to raise a genuine and substantial
issue of fact.
E. Mr. Brancato's Plea Agreement With the Government Does Not Preclude
His Debarment
In his next argument, Mr. Brancato states that his guilty plea and
cooperation with the government were predicated on the assumption that
no civil penalties would flow from his cooperation and that debarment
would render his guilty plea subject to collateral attack and
jeopardizes the integrity of the judicial process. He does not support
this claim with evidence or citations.
Mr. Brancato's claim is completely unsubstantiated. The April 13,
1989, plea agreement represents the complete and final embodiment of
Mr. Brancato's and the government's intention; the agreement explicitly
states that ``[t]here are no other agreements, promises, undertakings
or understandings between Mr. Brancato and this Office.'' Contrary to
Mr. Brancato's ``assumption,'' the terms of the plea agreement do not
preclude subsequent civil or administrative actions, including
debarment. The terms bar only subsequent criminal action. Because the
plea agreement is the complete and final expression of the compromise
between Mr. Brancato and the government, and because the agreement does
not preclude debarment, Mr. Brancato's claim fails to raise a genuine
and substantial issue of fact.
F. Debarment of Mr. Brancato Is Not Prohibited by the Ex Post Facto
Clause
In his final argument, Mr. Brancato states, ``individuals who
cooperate with the government should not be subject to sanctions of
this kind ex post facto.'' Mr. Brancato fails to support this statement
with an explanation or case citation.
Although it is unclear from this statement what point Mr. Brancato
is attempting to make, two separate arguments may be implied: That his
cooperation exempts him from the debarment provisions, and that his
debarment violates the ex post facto clause of the United States
Constitution. Both arguments are discussed individually below.
As discussed above, the mandatory debarment provisions, not the
permissive debarment provisions, apply in this case. Cooperation with
the government may not be considered in the decision to initiate
mandatory debarment proceedings. (Cooperation may, however, be
considered in determining whether to grant special early termination of
debarment, under section 306(d)(4)(C) of the act, to individuals and as
evidence of mitigation, in determining appropriateness and period of
permissive debarment.) Because Mr. Brancato's cooperation is immaterial
here, his claim fails to raise a genuine and substantial issue of fact.
Mr. Brancato further suggests that the ex post facto clause of the
U.S. Constitution prohibits application of section 306(a)(2) of the act
to him because this section was not in effect at the time of Mr.
Brancato's criminal conduct. Section 306(a)(2) of the act was enacted
on May 13, 1992. The conduct underlying Mr. Brancato's conviction
occurred in 1987, and his conviction occurred in 1990.
An ex post facto law is one which punishes acts occurring prior to
enactment of the law, or which adds a new punishment to one that was in
effect when the crime was committed. (Ex Parte Garland, 4 Wall. 333,
377, 18 L. Ed. 366 (1866). Collins v. Youngblood, 110 S.Ct. 2715
(1990).) Retroactive application of a law to serve a remedial purpose
does not violate the ex post facto clause.
Because debarment is intended as a remedy, rather than a
punishment, retroactive application of the mandatory debarment
provisions of the act is not prohibited by the ex post facto clause.
Debarment was clearly intended to be remedial. Congress created the
Generic Drug Enforcement Act of 1992 (GDEA) in response to findings of
fraud and corruption in the generic drug industry. Both the language of
the GDEA itself and its legislative history reveal that the purpose of
the debarment provisions is remedial: ``to restore and ensure the
integrity of the ANDA approval process and to protect the public
health'' (see section 1, Pub. L. 102-282, (GDEA)). A statement by
Senator Hatch supports the remedial character of debarment as follows:
``* * * [t]he legislation * * * provides a much-needed remedy for the
blatant fraud and corruption uncovered in the generic drug industry * *
* during the last 3 years.'' (Emphasis added.) (See Congressional
Record, April 10, 1992, at S 5616.)
It is well established by the Supreme Court that statutes which
deny future privileges to convicted offenders because of their previous
criminal activities in order to ensure against corruption in specified
areas do not impose penalties for past conduct and, therefore, do not
violate the ex post facto prohibitions (see, e.g., Hawker v. New York,
170 U.S. 189, 190 (1898) (physician barred from practicing medicine for
a prior felony conviction); DeVeau v. Braisted, 373 U.S. 154 (1960)).
In DeVeau, the Court upheld a law that prohibited a convicted felon
from employment as an officer in a waterfront union. The purpose of the
law was to remedy the past corruption and to ensure against future
corruption in the waterfront unions. The Court in DeVeau, 363 U.S. at
160, stated:
The question in each case where unpleasant consequences are
brought to bear upon an individual for prior conduct, is whether the
legislative aim was to punish that individual for past activity, or
whether the restriction of the individual comes about as a relevant
incident to a regulation of a present situation, such as the proper
qualifications for a profession * * *.
As in DeVeau, the legislative purpose of the relevant statute is to
ensure that fraud and corruption are eliminated from the generic drug
industry. The restrictions placed on individuals convicted of a felony
under Federal law are not intended as punishment but are ``incident to
a regulation of a present situation'' (DeVeau, 363 U.S. at 160) and are
necessary in order to remedy the past fraud and corruption in the
industry.
The legislative history is replete with statements that the GDEA
provides the reasonable means needed to eliminate the widespread
corruption in the generic drug industry and to restore consumer
confidence in generic drugs. Because debarment is a remedial action,
rather than one intended to punish, debarment does not violate the ex
post facto clause and Mr. Brancato's claim fails to raise a genuine and
substantial issue of fact.
In conclusion, Mr. Brancato has raised no genuine and substantial
issue of fact regarding his conviction. He acknowledges his conviction
as alleged by FDA in the agency proposal to debar him. In addition, Mr.
Brancato's legal arguments do not create a basis for a hearing and, in
any event, are unpersuasive. Accordingly, the Deputy Commissioner for
Operations denies Mr. Brancato's request for a hearing.
III. Findings and Order
Therefore, the Deputy Commissioner for Operations, under section
306(a) of the act, and under authority delegated to her (21 CFR 5.20),
finds that Mr. Brancato has been convicted of a felony under Federal
law for conduct: (1) Relating to the development or approval, including
the process for development or approval, of a drug product (21 U.S.C.
335a(a)(2)(A)); and (2) relating to the regulation of a drug product
(21 U.S.C. 335a(a)(2)(B)).
As a result of the foregoing findings, Mr. Brancato is permanently
debarred from providing services in any capacity to a person with an
approved or pending drug product application under sections 505, 507,
512, or 802 of the act (21 U.S.C. 355, 357, 360b, or 382), or under
section 351 of the Public Health Service Act (42 U.S.C. 262), effective
on January 6, 1994 (21 U.S.C. 335a(c)(1)(B) and (c)(2)(A)(ii) and 21
U.S.C. 321(ee)).
Any person with an approved or pending drug product application who
knowingly uses the services of Mr. Brancato in any capacity, during his
period of debarment, will be subject to civil money penalties (21
U.S.C. 335b(a)(6)). If Mr. Brancato, 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 (21 U.S.C. 335b(a)(7)). In addition, FDA will not accept or
review any abbreviated new drug application or abbreviated antibiotic
drug application submitted by or with Mr. Brancato's assistance during
his period of debarment.
Mr. Brancato may file an application to attempt to terminate his
debarment, pursuant to section 306(d)(4)(A) of the act. Any such
application would be reviewed under the criteria and processes set
forth in section 306(d)(4)(C) and (d)(4)(D) of the act. Such an
application should be identified with Docket No. 92N-0416 and sent to
the Dockets Management Branch (address above). All such submissions are
to be filed in four copies. The public availability of information in
these submissions is governed by 21 CFR 10.20(j). Publicly available
submissions may be seen in the Dockets Management Branch between 9 a.m.
and 4 p.m., Monday through Friday.
Dated: December 5, 1993.
Jane E. Henney,
Deputy Commissioner for Operations.
[FR Doc. 94-210 Filed 1-5-94; 8:45 am]
BILLING CODE 4160-01-P
