[Federal Register Volume 59, Number 244 (Wednesday, December 21, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-31250]


[[Page Unknown]]

[Federal Register: December 21, 1994]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration
[Docket No. 92N-0457]

 

Arnold S. Mendell; Debarment Order

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA) is issuing an order 
under the Federal Food, Drug, and Cosmetic Act (the act) permanently 
debarring Mr. Arnold S. Mendell, 500 Peconic St., Ronkonkoma, NY 11779, 
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. Mendell was convicted of a felony under Federal law 
for conduct relating to the regulation of a drug product under the act. 
Mr. Mendell has failed to file with FDA information and analyses 
sufficient to create a basis for a hearing concerning this action.

EFFECTIVE DATE: December 21, 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: Tamar S. Nordenberg, 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. Arnold Mendell, the former director of quality assurance of 
Bolar Pharmaceutical Co. (Bolar), pled guilty and was sentenced on 
December 13, 1991, for 2 counts of a 15-count indictment for Federal 
felony offenses under 21 U.S.C. 331(a) and 333(a)(2) and 18 U.S.C. 
1505, for the introduction of adulterated drugs into interstate 
commerce with the intent to defraud, and for the obstruction of an FDA 
inspection of Bolar by producing false batch production and dissolution 
records for a Bolar product.
    In a certified letter received by Mr. Mendell on January 29, 1993, 
the Deputy Commissioner for Operations offered Mr. Mendell 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. Mendell on its 
finding that he was convicted of a felony under Federal law for conduct 
relating to the regulation of a drug product.
    The certified letter also informed Mr. Mendell 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. Mendell 
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 February 25, 1993, Mr. Mendell requested a 
hearing, and in a letter dated March 15, 1993, Mr. Mendell submitted 
arguments and information in support of his hearing request. In his 
request for a hearing, Mr. Mendell did not dispute that he was 
convicted of felonies under Federal law as alleged by FDA. He argued, 
however, that the agency's proposal to debar him is unconstitutional 
because a retroactive application of the statute would violate the U.S. 
Constitution's prohibition against bills of attainder and ex post facto 
laws. He argued, also, that the debarment statute is overbroad and so 
denies him his due process.
    The Deputy Commissioner has considered Mr. Mendell's arguments and 
concludes that they are unpersuasive and fail to raise a genuine and 
substantial issue of fact requiring a hearing. The constitutional 
arguments that Mr. Mendell 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)). The 
arguments are, in any event, unconvincing, for the reasons discussed 
below.

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

    Mr. Mendell first 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. Mendell's 
criminal conduct. With the enactment of the Generic Drug Enforcement 
Act (GDEA) on May 13, 1992, Congress amended the Federal Food, Drug, 
and Cosmetic Act to include section 306(a)(2), and Mr. Mendell was 
convicted on December 13, 1991.
    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. Mendell'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 a 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 law 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's 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.
    Mr. Mendell's bill of attainder argument is also unconvincing. A 
bill of attainder is a legislative act that inflicts punishment on 
named individuals or easily ascertainable members of a group without a 
judicial trial (United States v. Lovett, 328 U.S. 303 (1946)). As 
discussed previously, the legislative intent of the debarment statute 
is remedial, not punitive. Furthermore, the act is not specifically 
directed at Mr. Mendell individually, nor is it directed at easily 
ascertainable members of a group within the meaning of Lovett (supra).
    Mr. Mendell next argues that the law on which FDA bases its 
proposed debarment is unconstitutional because it is overly broad, 
stating that there is no rational connection between the GDEA and the 
accomplishment of a legitimate governmental goal. In fact, the 
debarment provisions at issue are narrowly drawn to accomplish the 
legitimate governmental purposes of ensuring the integrity of the drug 
regulatory process and protecting the public health (see Turner v. 
Safley, 482 U.S. 78, 89 (1987) (regulations valid if reasonably related 
to legitimate governmental interests)).
    In the interest of protecting the public welfare, section 
306(c)(1)(B) of the act prohibits a debarred individual from 
``providing services in any capacity to a person that has an approved 
or pending drug product application * * *.'' This language, which Mr. 
Mendell asserts is overly broad, is necessarily not more restrictive. 
An attempt to determine the particular positions which are closed to 
debarred persons would cause serious administrative difficulties, 
including the problems of (1) ascertaining the exact nature of the 
employee's relationship with the employer and of (2) determining what 
constitutes a sufficient nexus with the regulatory scheme under all 
circumstances. (See the House Committee on Agriculture's H. Rept. No. 
1546, 87th Cong., 2d sess. 8 (1962), U.S. Code Cong. & Admin. News 
1962, p. 2749, for Congress' explanation of similar expansive language 
in debarment provision of the Perishable Agricultural Commodities Act 
(PACA), discussed further below.)
    The United States Court of Appeals for the District of Columbia 
Circuit has recently upheld a comparable provision of PACA (7 U.S.C. 
sections 499a-499s), which bars certain persons implicated in 
wrongdoing under PACA from being employed by any person licensed under 
PACA, even in positions unrelated to that act's regulatory scheme. The 
court stated that the ``investigatory difficulty * * * confirms the 
reasonableness of Congress' amendment barring any employment for the 
proscribed period.'' (Siegel v. Lyng, 851 F.2d 412, 416 (D.C. Cir. 
1988) (emphasis in original).)
    Mr. Mendell does not dispute the fact that he was convicted as 
alleged by FDA in its proposal to debar him, and he has raised no 
genuine and substantial issue of fact regarding this conviction. His 
legal arguments do not create a basis for a hearing and, in any event, 
are unpersuasive. Accordingly, the Interim Deputy Commissioner for 
Operations denies Mr. Mendell'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. Mendell has been convicted of a felony under 
Federal law for conduct relating to the regulation of a drug product 
(21 U.S.C. 335a(a)(2)(B)).
    As a result of the foregoing findings, Mr. Arnold S. Mendell 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 December 21, 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. Mendell in any capacity, during his 
period of debarment, will be subject to civil money penalties. If Mr. 
Mendell, 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. In addition, 
FDA will not accept or review any abbreviated new drug application 
submitted by or with the assistance of Mr. Mendell during his period of 
debarment.
    Any application by Mr. Mendell for termination of debarment under 
section 306(d)(4) of the act should be identified with Docket No. 92N-
0457 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, 1994.
Linda A. Suydam,
Interim Deputy Commissioner for Operations.
[FR Doc. 94-31250 Filed 12-20-94; 8:45 am]
BILLING CODE 4160-01-F