[Federal Register Volume 59, Number 215 (Tuesday, November 8, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-27668]


[[Page Unknown]]

[Federal Register: November 8, 1994]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
[Docket No. 92N-0417]

 

Ashok Patel; Denial of Hearing and Final Debarment Order

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA) is denying Mr. Ashok 
Patel's request for a hearing and is issuing a final order under the 
Federal Food, Drug, and Cosmetic Act (the act) permanently debarring 
Mr. Ashok Patel, 27 Ranch Rd., Upper Saddle River, NJ 07458, from 
providing services in any capacity to a person who has an approved or 
pending drug product application. FDA bases this order on a finding 
that Mr. Patel 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: November 8, 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: Megan L. Foster, 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

    Mr. Ashok Patel, a former senior vice-president of Par 
Pharmaceuticals, Inc. (Par), pled guilty and was sentenced on October 
18, 1989, for giving an unlawful gratuity to a public official, a 
felony offense under 18 U.S.C. 201(c)(1)(A). The basis for this 
conviction was Mr. Patel's payment of approximately $4,500 to an FDA 
chemistry review Branch Chief (public official) who was involved in the 
regulation of Par's drug products and who was specifically responsible 
for supervising the chemists who reviewed Par's applications to 
determine whether those applications met certain statutory standards 
for approval.
    In a certified letter received by Mr. Patel on December 12, 1992, 
the Interim Deputy Commissioner for Operations offered Mr. Patel an 
opportunity for a hearing on the agency's proposal to issue an order 
under section 306(a) of the act debarring Mr. Patel 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. Patel 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 
drug products.
    The certified letter also informed Mr. Patel that his request for a 
hearing could not rest upon mere allegations or denials, but it must 
present specific facts showing that there was a genuine and substantial 
issue of fact requiring a hearing. The letter also notified Mr. Patel 
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 January 7, 1993, Mr. Patel requested a hearing, 
and in a letter dated February 11, 1993, Mr. Patel submitted arguments 
and information in support of his hearing request. In his request for a 
hearing, Mr. Patel acknowledged that he was convicted of a felony under 
Federal law as alleged by FDA. However, Mr. Patel argued that FDA's 
findings based on that conviction are incorrect and that the agency's 
proposal to debar him is unconstitutional.
    The Interim Deputy Commissioner for Operations has considered Mr. 
Patel's arguments and concludes that they are unpersuasive and fail to 
raise a genuine and substantial issue of fact requiring a hearing. 
Moreover, the legal arguments that Mr. Patel offers do not create a 
basis for a hearing (see 21 CFR 12.24(b)(1)).
    Mr. Patel's arguments are discussed below in section II of this 
document.

II. Mr. Patel's Arguments in Support of a Hearing

A. Mr. Patel's Conduct

    Mr. Patel first alleges that FDA's findings are incorrect because 
his conviction does not involve conduct relating to the development, 
approval, or regulation of a drug product under the act. Mr. Patel 
claims that the conviction was based on his giving an illegal gratuity 
in response to repeated requests of the public official for personal 
reasons unrelated to the drug approval process.
    This argument is unconvincing and fails to raise a genuine and 
substantial issue of fact. Mr. Patel pled guilty to and was convicted 
of violating 18 U.S.C. 201(c)(1)(A) for his payment of approximately 
$4,500 to an FDA chemistry review Branch Chief who was involved in the 
regulation of Par's drug products (21 U.S.C. 335a(l)).
    In order to be convicted under 18 U.S.C. 201(c)(1)(A), one must 
give, otherwise than as provided by law for the proper discharge of 
official duty, something of value to a public official because of an 
official act performed or to be performed by such official. ``Official 
act'' is defined by 18 U.S.C. 201(a)(3) as ``any decision or action on 
any question, matter, cause, suit, proceeding or controversy, which may 
at any time be pending, or which may by law be brought before any 
public official, in such official's official capacity, or in such 
official's place of trust or profit.'' Hence, as a matter of law, Mr. 
Patel's conviction establishes that his action was intended to 
influence official action. The public official to whom the illegal 
gratuity was given was a Branch Chief of one of the four chemistry 
review branches within FDA's Division of Generic Drugs, whose sole 
responsibilities were the review of applications submitted by generic 
drug manufacturers seeking FDA's approval to market their products to 
the public, and the general regulation of generic drugs. Therefore, Mr. 
Patel's conviction under 18 U.S.C. 201(c)(1)(A) is alone sufficient to 
establish that his felony conviction was for conduct relating to the 
development and approval, including the process for development and 
approval, of a drug product, and for conduct relating to the regulation 
of a drug product.
    Mr. Patel argues that the judge who sentenced him did not view the 
payments as affecting the development, approval, or regulation of a 
drug product. He supports this argument with the judge's statements, 
``It's not the question of improper handling * * *,'' and ``There is no 
evidence that they did any favor * * *,'' (see sentencing transcript, 
pp. 7 and 17). However, the judge does not imply that the gratuities 
were unrelated to the development, approval, or regulation of a drug 
product. To the contrary, he compares the gratuities to insurance when 
he states, ``* * * like insurance you got somebody who favors you as 
opposed to somebody who is against you, get somebody friendly towards 
you so when you do get the application[s] they don't hide them * * *'' 
(see sentencing transcript, p. 6). While there is no evidence of a 
direct benefit to Mr. Patel, the fact that he paid the gratuities for 
``insurance'' of his drug applications is sufficient to relate to the 
development, approval, and regulation of a drug product.
    Finally, Mr. Patel had ample opportunity to contest the 
Government's allegations during the criminal case prior to his 
conviction. Thus, Mr. Patel is collaterally estopped from arguing that 
he did not provide the gratuity ``for or because of any official act 
performed or to be performed.''

B. Retroactive Application of the Act

    Mr. Patel argues in his letter requesting a hearing that the 
debarment provisions are not retroactive, and therefore, because his 
crime predated the act, it does not fall under the act.
    Mr. Patel's argument that section 306(a)(2) of the act should not 
be applied retroactively is unpersuasive. A commonly used rule of 
statutory construction states that where Congress includes particular 
language in one section of a statute but omits it in another section of 
the same act, it is generally presumed that Congress acts intentionally 
and purposely in the disparate inclusion or exclusion. (I. N. S. v. 
Cardoza-Fonseca, 107 S.Ct. 1207, 1213 (1987), citing Russelo v. United 
States, 104 S.Ct. 296, 300 (1983).) Under this rule of statutory 
construction, section 306(a)(2) of the act is clearly retroactive. 
Section 306(a) of the act treats mandatory debarment of business 
entities differently from mandatory debarment of individuals with 
respect to retroactivity. Mandatory debarment of business entities 
under section 306(a)(1) of the act is not retroactive because it only 
applies to convictions ``after the date of enactment of this section.'' 
However, section 306(a)(2) of the act, which pertains to mandatory 
debarment of individuals, does not contain this limiting language. 
Therefore, if Congress had intended for section 306(a)(2) of the act 
not to be retroactive, it would have included the language ``after the 
date of enactment of this section.'' The limitation does not apply 
where it was excluded.
    Another appropriate application of this rule of statutory 
construction is with regard to section 306(l)(2) of the act, which sets 
out the effective dates for each provision of the act. Section 
306(l)(2) of the act also indicates that section 306(a)(2) is 
retroactive. The only limitation section 306(l)(2) sets on section 
306(a) of the act is that section 306(a) shall not apply to a 
conviction that occurred more than 5 years before the initiation of an 
agency action. This language indicates that any applicable conviction 
may be used as the basis for debarment, so long as it occurred no more 
than 5 years prior to the initiation of debarment proceedings. Certain 
other provisions covered in section 306(l) of the act are further 
limited by the statement that the section shall not apply to an action 
that occurred before June 1, 1992. Thus, when Congress intended that a 
certain section not be retroactive, it set a specific effective date or 
used specific limiting language as in section 306(a)(1) of the act. 
Congress' intentional omission of an effective date for section 
306(a)(2) of the act indicates its intent that this section be 
retroactive.
    Finally, because section 306(a)(2) of the act does not explicitly 
address the retroactivity issue, FDA's interpretation must be based on 
a permissible construction of the act. A permissible construction is 
one that is reasonable and consistent with the purpose of the statute. 
(See Chevron v. N. R. D. C., 104 S. Ct. 2778 (1984), and Schering Corp. 
v. Sullivan (782 F. Suppl. 645 (1992).) The purpose of the Generic Drug 
Enforcement Act of 1992 (GDEA) is ``to restore and ensure the integrity 
of the ANDA approval process and to protect the public health.'' (See 
section 1, Pub. L. 102-282, The Generic Drug Enforcement Act of 1992.) 
FDA's interpretation is consistent with this purpose. The GDEA was 
passed in response to the widespread fraud and corruption revealed by 
the generic drug investigations that began in the late 1980's. (See 
House Committee Report, October 24, 1991, at p. 11.) Congress clearly 
enacted the GDEA in order to take action against the wrongdoers of the 
1980's, as well as current wrongdoers. FDA's interpretation that 
section 306(a)(2) of the act is retroactive is reasonable in that it is 
consistent with the purpose of the GDEA, which is to remedy past fraud 
and corruption.

C. The Ex Post Facto Clause

    Mr. Patel also argues 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. Patel's 
criminal conduct, and it changes the legal consequences of his 
violation of the law. On May 13, 1992, Congress amended the Federal 
Food, Drug, and Cosmetic Act to include section 306(a)(2), Mr. Patel 
was convicted on October 18, 1989.
    An ex post facto law is one that reaches back to punish acts that 
occurred before enactment of the law or that 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).)
    Mr. Patel's claim that application of the mandatory debarment 
provisions of the act is prohibited by the ex post facto clause is 
unpersuasive. Because the intent behind debarment under section 
306(a)(2) of the act is remedial rather than punitive, this section 
does not violate the ex post facto clause.
    The congressional intent with respect to actions under section 
306(a)(2) of the act is clearly remedial. Congress created the 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 set forth 
in the GDEA is ``to restore and ensure the integrity of the ANDA 
approval process and to protect the public health.'' (See section 1, 
Pub. L. 102-282, The Generic Drug Enforcement Act of 1992.) This is a 
remedial rather than punitive goal. (See Manocchio v. Kusserow, 961 
F.2d 1539, 1542 (11th Cir. 1992) (exclusion of physician from 
participation in medicare programs because of criminal conviction is 
remedial, not punitive).) Supporting the remedial character of 
debarment is a statement by Senator Hatch in the Congressional Record 
of April 10, 1992, at S 5616, ``* * * [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.''
    The Supreme Court has long held that statutes that 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) (convicted 
felon's exclusion from employment as officer of waterfront union is not 
a violation of the ex post facto clause).)
    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 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 
necessary in order to remedy the past fraud and corruption in the 
industry.

C. The Double Jeopardy Clause

    In his final argument, Mr. Patel claims that the proposal to debar 
him under section 306(a)(2) of the act violates the double jeopardy 
clause of the Fifth Amendment to the U.S. Constitution. The double 
jeopardy clause states that no person shall ``be subject for the same 
offense to be twice put in jeopardy of life or limb.'' Mr. Patel relies 
on U.S. v. Halper, 490 U.S. 435 (1989), to argue that the Fifth 
Amendment double jeopardy clause should prevent his debarment because 
``jeopardy'' can attach even in a purely civil proceeding, so long as 
the civil sanction is punitive, not remedial. He further argues that 
his proposed permanent debarment is punitive because it would eliminate 
any opportunity to demonstrate that he would no longer be a threat to 
the integrity of the drug approval process.
    Mr. Patel's argument is unpersuasive. First, ``jeopardy'' cannot 
attach because the effect of section 306(a)(2) of the act is remedial, 
not punitive. As discussed above, the legislative goal of this section 
is to restore and ensure the integrity of the drug approval process and 
to protect the public health by eradicating fraud and corruption from 
the drug industry. This is plainly a remedial rather than a punitive 
goal. (Manocchio v. Kusserow, 961 F.2d at 1542.)
    The fact that Mr. Patel's debarment is permanent rather than 
temporary does not signify that the legislation is nonremedial or 
punitive. The Supreme Court has upheld laws which, for remedial 
purposes, permanently bar a class or group of individuals from certain 
occupations due to a prior criminal conviction. (See Hawker v. New 
York, 170 U.S. 189, 190 (1898); DeVeau v. Braisted, 373 U.S. 154 
(1960).)
    Second, the double jeopardy clause is inapplicable to FDA's 
proposal to debar Mr. Patel because the sanctions imposed by section 
306(a)(2) of the act are rationally related to the remedial 
governmental goal of eradicating fraud from the drug industry.
    Due to the potentially serious consequences to the public health of 
fraud and corruption in the drug industry, the permanent debarment of 
convicted felons like Mr. Patel is not an excessive means to eliminate 
fraud from the industry. The legislative history of the GDEA is replete 
with statements, some cited above, that the act provides a reasonable 
means of ridding the generic drug industry of widespread corruption and 
restoring consumer confidence in generic drugs.
    Mr. Patel acknowledges that he was convicted as alleged by FDA in 
its proposal to debar him and has raised no genuine and substantial 
issue of fact regarding this conviction. While Mr. Patel's legal 
arguments do not create a basis for a hearing, FDA has considered these 
arguments before taking final action and has found them unpersuasive. 
Accordingly, the Interim Deputy Commissioner for Operations denies Mr. 
Patel's request for a hearing.

III. Findings and Order

    Therefore, the Interim Deputy Commissioner for Operations, under 
section 306(a) of the act, and under authority delegated to her (21 CFR 
5.20), finds that Mr. Ashok Patel 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. Ashok Patel is 
permanently debarred from providing services in any capacity to a 
person with an approved or pending drug product application under 
section 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 November 8, 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. Patel in any capacity, during his 
period of debarment, will be subject to civil money penalties (21 
U.S.C. 335b(a)(6)). If Mr. Patel, 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. Patel's assistance during his 
period of debarment.
    Mr. Patel 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-0417 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: October 28, 1994.
Linda A. Suydam,
Interim Deputy Commissioner for Operations.
[FR Doc. 94-27668 Filed 11-7-94; 8:45 am]
BILLING CODE 4160-01-F