Chapter 5: Enforcement Actions

Pharmaceutical companies and the regulatory agencies that provide oversight for their activities share a responsibility for ensuring the manufacture and distribution of quality drug products and for ensuring compliance with good manufacturing practices (GMP) regulations. When these agencies identify areas of noncompliance within a company (for example, during a regulatory inspection or as a result of mandatory problem reporting), they have an obligation to the public to take appropriate enforcement action to remedy the situation. The agencies have a number of enforcement tools at their disposal and will take action consistent with the seriousness of the violation (or violations) and the risk of harm to the public.

The most common enforcement tool used to compel compliance with regulatory requirements is a notice of observations/violations (for example, form FDA 483) that is provided to a company after an on-site inspection by the applicable regulatory agency. If a company fails to adequately address all of the issues in the notice, or if the compliance issues identified during the inspection are more serious or widespread, the regulatory agency may issue a warning letter to the company. In more serious cases, where there is an immediate risk to patient health and safety, the regulatory agency may choose to seize impacted product (product seizure) or prevent its continued distribution (through an injunction). In the United States, a company may be compelled to enter into a consent decree that outlines, in specific detail, the steps required to bring the organization back into compliance, and the reporting and oversight obligations necessary to fulfill the requirements of the consent decree. Finally, in those instances where previous enforcement action has been unsuccessful in compelling compliance, or where there are indications that compliance will not be possible, the regulatory agency may choose to withdraw a marketing authorization (specific to a product) or withdraw an establishment license (applicable to the company as a whole). This stepwise approach allows the regulatory agency to use a risk-based methodology to determine where to focus its efforts toward ensuring compliance with applicable regulations while continuing to meet its obligation to protect the public health.

Enforcement Actions

Notice of Observations/Violations

If, during an inspection by FDA, significant compliance issues are observed, the investigator may choose to document those observations on form FDA 483, Inspectional Observations. Form 483 is used to notify the inspected establishment’s top management, in writing, of significant objectionable conditions that were observed during the course of the inspection. If an observation related to a previous inspection has not been corrected (FDA is very good about verifying commitments made to correct previous 483 items) or is a recurring observation, it may also be noted on the form 483 for the current inspection. It is important to note, however, that additional observations of questionable significance may be discussed verbally with a firm’s top management at the inspection closeout meeting. FDA’s intent in making top management aware of these issues is to let them know that, if left uncorrected or unaddressed, these issues could become a violation. The establishment inspection report (EIR) that is provided after the inspection is closed provides documentation of both the written (on form 483) and verbal observations documented during the inspection.

A similar process is used by Health Canada. The Health Products and Food Branch Inspectorate (HPFBI) will document GMP-related observations on the inspection exit notice that is shared with the firm’s management at the formal exit meeting. Differently than in the United States, a specific rating is assigned to the firm at the end of the inspection. Either a “C” rating (firm is recommended for the continuation or issuance of the establishment license) or an “NC” rating (firm is not recommended for the continuation or issuance of the establishment license) is assigned based on the results of the inspection.

In the United Kingdom (UK), after an inspection by the Medicines and Healthcare Products Regulatory Agency (MHRA), a post-inspection letter, outlining the deficiencies noted during the inspection, is sent to the inspected firm to provide written confirmation of the deficiencies reported verbally during the closing meeting with management. In the case of the post-inspection letter, all deficiencies are classified as critical, major, or other.

In all cases where an inspection report is issued, or areas of noncompliance are discussed verbally with the firm, the expectation of the regulatory agency is that the firm will take the appropriate corrective and preventive action to prevent future noncompliance. A written response from the firm, outlining the planned or completed actions, is necessary to preclude further enforcement action and to close the inspection.

These enforcement actions might include warning letter or notice, caution, criminal prosecution, and asset confiscation and civil action (injunction). Application of a sanction is dependent on several factors, including the nature of the noncompliance (critical or major), duration of the noncompliance, and actual or potential impact on public health.

In Europe, serious deficiencies that potentially could result in risk to public health are typically discussed in the inspection closeout (final) meeting, and immediate action is taken, as necessary, before issuing an inspection report. After the inspection, a draft inspection report or post-inspection letter is sent to the company for its comments to allow the report to be finalized. Any response received from the manufacturing firm is considered in the final report. Issuance of the final report is needed for the issuance of a GMP certificate, where applicable.

Warning Letters

FDA may choose to issue a warning letter if a company fails to adequately address all of the issues in the form FDA 483, or if the compliance issues identified during the inspection are more serious or widespread. Warning letters typically are issued for violations of regulatory significance, that is, those that may lead to further enforcement action if not corrected promptly and adequately.

FDA will label the correspondence as a “warning letter.” They generally are addressed both to the highest known official at the corporation and to the highest known official at the site that was inspected, and include the dates of the inspection, a brief description of the violations, and the specific sections of the law that are in violation. The correspondence also will acknowledge any corrections promised during the inspection or in the firm’s written response, and the Agency’s position related to those corrections. Finally, it will request a prompt response to the warning letter, typically within 15 working days.

Unlike form FDA 483, warning letters are posted publicly on the FDA website and can result in significant harm to the firm’s reputation. It is in a firm’s best interest to correct identified areas of noncompliance quickly and completely to preclude the issuance of a warning letter. A warning letter may include a recommendation to withhold approval for any pending applications, which could result in significant financial harm to the company. It is important to note, however, that FDA is under no legal obligation to issue such a letter before taking additional and more serious enforcement action.

FDA may issue a warning letter closeout letter once it has completed an assessment of the corrective actions taken in response to the warning letter. Closeout letters apply only to those warning letters issued after September 1, 2009. The closeout letter can only be issued after FDA has verified (typically through a follow-up inspection) that the corrective actions have been taken. If the letter contains GMP violations that can not be corrected, no closeout letter will be issued.

Product Seizures

A product seizure is a judicial (court-approved) action for removing violative products from the marketplace. Seizures generally fall into one of three categories:

• Mass seizure. The seizure of all FDA-regulated products at an establishment or facility. This type of seizure is indicated when all of the suspect products have been held in the same environment (for example, dirty warehouse) or were produced under the same conditions (for example, nonconformance with GMP requirements).

• Open-ended seizure. The seizure of all units of a specific product or products, regardless of lot or batch number, where the violation is anticipated to be continuous.

• Batch-specific seizure. The seizure of a batch or batches of a regulated product where the violation is limited to a period of time or unique to a specific set of batches.

Product seizures typically are initiated when a company has not voluntarily recalled product that the regulatory agency believes is in violation of the law and where there is a perceived or known health risk to the public.

Injunctions

An injunction is another type of judicial action and is initiated to stop or prevent a violation of the law. It is typically invoked to halt the flow of violative products and to correct the conditions that caused the violations to occur. An injunction is considered for any significant out-of-compliance circumstance, but particularly when a health hazard has been identified. When an injunction is granted, FDA has a duty to monitor the injunction and to advise the courts if the company fails to follow through on their obligations. The three most common types of injunctions are the temporary restraining order, the preliminary injunction, and the permanent injunction.

Temporary Restraining Order. A temporary restraining order (TRO) is a court-ordered cease-and-desist order that is used in emergency situations. FDA, for example, may recommend a TRO when the Agency believes that a serious violation has occurred and the situation must be controlled or the flow of product stopped immediately.

Preliminary Injunction. A motion for preliminary injunction is subject to a full hearing before a court. Once the motion is granted, the preliminary injunction is in effect. A preliminary injunction may stand indefinitely until the case is settled or a permanent injunction has been entered, after trial.

Permanent Injunction. A decree of permanent injunction may be entered at any time after the complaint is filed, either after a hearing or as a result of a negotiated settlement between the government and the defendant. A decree of permanent injunction remains in effect until it is dissolved by an order of the court.

Consent Decree of Permanent Injunction. In the United States, a consent decree is a court-ordered agreement between FDA and a company that outlines the steps that a company needs to take to resume normal operations. Although each situation is unique, the consent decree will likely include the need for changes within the company (for example, to bring the organization into compliance with applicable regulations) and a requirement to involve outside consultants to oversee the changes and ensure ongoing compliance. FDA will typically seek a consent decree only when serious issues have been identified with a drug product manufacturer and other enforcement mechanisms have been unsuccessful in encouraging the company to address the issues in a timely fashion.

Loss of Marketing License

Regulatory agencies including FDA, MHRA, and the European National Competent Authorities are charged with ensuring that the drugs that are marketed are safe for their intended use and that their benefits outweigh the risks involved with any drug product. As a result, regulatory agencies constantly monitor and evaluate the safety data that are transmitted to them, either through periodic safety reports (by the manufacturer) or spontaneous reports (by healthcare practitioners or consumers). They weigh the benefits of existing drugs against any new emerging drug products or treatment therapies to determine whether older drugs still provide a medical benefit to patients.

When the regulatory agencies identify serious safety issues with a drug product, or deem the safety risks to outweigh the benefits provided by the drug product, they may choose to suspend or revoke the existing marketing license.

According to the World Health Organization (WHO), a marketing authorization may be suspended or revoked in any of the following circumstances:

• The product has proved to be ineffective for the approved indication(s).

• It is strongly suspected that the product is unsafe in the normal conditions of use.

• The quantitative or qualitative composition is not as agreed on in the marketing authorization.

• The product is not in compliance with the conditions of the marketing authorization.

• The product is being promoted in an inappropriate or unethical manner.

The marketing authorization holder is typically notified of the suspension or revocation along with the reasons for the decision and any appeal mechanisms available to them.

Loss of Establishment License

In the most serious cases of noncompliance, a regulatory agency may choose to suspend or revoke a pharmaceutical company’s establishment license. A firm’s repeated failure and unwillingness to comply with cGMP requirements, or the submission of false data in support of an application, are instances where a regulatory agency may be compelled to take this type of enforcement action.

Debarment

FDA has the authority to prohibit specific individuals and companies from participating in certain aspects of the drug industry. If an individual is convicted of certain felonies or misdemeanors, such as those related to the drug approval process or FDA’s regulation of drugs in general, FDA may debar that individual. Debarment means that the individual may no longer work for a firm holding a pending or approved drug product application at FDA. Moreover, FDA will not accept or review abbreviated drug applications submitted by debarred individuals. Companies are subject to debarment for felonies and some misdemeanors if the offenses are related to the development or approval of an abbreviated drug product application, which are related to generic drugs. A debarred company can not submit, or assist others in submitting, future abbreviated drug product applications.

Voluntary Actions

Recalls. Under the Food, Drug, and Cosmetic Act, FDA does not have the statutory authority to mandate that a firm recall or remove drug products from distribution. In those cases where the Agency believes that the product may pose a threat to consumer health and safety, FDA may recommend or request a field action, but companies are under no regulatory obligation, in the United States, to comply. In reality, however, most companies recall or remove product voluntarily from the field, and it is only in rare situations that FDA is required to take more immediate and serious actions (for example, court-ordered recall or seizure).

Like warning letters, information related to the recall of drug products is made public. FDA publishes a weekly Enforcement Report that identifies product recalls across the industries that they oversee. For more serious recalls, a formal press release, either by the company or FDA, may be initiated to alert the public of the potential health hazard.

Pharmaceutical companies need to have a procedure in place to handle recalls, and should have systems in place that maintain traceability of product distributed to their customers. Procedures should identify the person or persons responsible for the recall decision and the individual or group that is responsible for carrying out the recall action. In the absence of an actual recall, it is recommended that a pharmaceutical company conduct mock recalls to exercise their procedures and ensure that their systems are adequate to reconcile 100% of their distributed product.

Field Corrections and Market Withdrawals. Field corrections and market withdrawals are another voluntary mechanism to repair or remove questionable product that has left the control of the pharmaceutical company. In the case of a field correction, the repair, modification, adjustment, relabeling, destruction, or inspection of a product is conducted without physically removing it to some other location. In the case of a market withdrawal, the company removes or corrects a distributed product that involves a minor violation that would not be subject to legal action by FDA.