[Federal Register Volume 61, Number 48 (Monday, March 11, 1996)]
[Notices]
[Pages 9711-9713]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5687]



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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
[Docket No. 94N-0033]


John D. Copanos; Denial of Hearing; Final Debarment Order

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA) denies John D. Copanos' 
request for a hearing and issues 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 John D. Copanos, 6504 Montrose Ave., Baltimore, 
MD 21212, from providing services in any capacity to a person that has 
an approved or pending drug product application. FDA bases this order 
on its finding that Mr. Copanos was convicted of a felony under Federal 
law for conduct relating to the regulation of a drug product under the 
act.

EFFECTIVE DATE: March 11, 1996

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: Christine F. Rogers, Center for Drug 
Evaluation and Research (HFD-7), Food and Drug Administration, 7500 
Standish Pl., Rockville, MD 20855, 301-594-2041.

SUPPLEMENTARY INFORMATION:

I. Background-

    John D. Copanos was the owner and president of John D. Copanos and 
Sons, Inc., and Kanasco, Ltd., when, on November 13, 1989, he agreed to 
plead guilty to one count of distributing misbranded drugs with intent 
to mislead, a Federal felony offense under sections 301(a) of the act 
(21 U.S.C. 331(a)) and 303(a)(2)(previously 303(b)) of the act (21 
U.S.C. 333(a)(2)) (previously 21 U.S.C. 333(b)), and one count of 
causing the adulteration of drugs with intent to mislead, a Federal 
felony offense under sections 301(k) and 303(a)(2) of the act. On 
February 16, 1990, the United States District Court for the District of 
Maryland accepted Mr. Copanos' plea of guilty and entered judgment 
against him for these felonies. The bases for these convictions were as 
follows.
    Mr. Copanos distributed a drug that was misbranded because its 
labeling failed to bear adequate directions for use and because it 
failed to warn of the presence of phenylalanine, a component of 
aspartame. In fact, adequate testing had not been conducted to 
determine the effect of aspartame on the stability, potency, and 
effectiveness of this drug. This drug was also misbranded because it 
failed to reveal the presence and amount of phenylalanine.
    In addition, Mr. Copanos pled guilty to causing the adulteration of 
a drug with intent to mislead by failing to comply with current good 
manufacturing practice.
    In a notice published in the Federal Register of November 9, 1994 
(59 FR 55846), FDA offered Mr. Copanos an opportunity for a hearing on 
the agency's proposal to issue an order under section 306(a) of the act 
debarring Mr. Copanos 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. Copanos on its finding that he had been 
convicted of felonies under Federal law for conduct relating to the 
regulation of a drug product. -
    In the Federal Register notice of November 9, 1994, FDA informed 
Mr. Copanos 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. 
FDA also informed Mr. Copanos 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 8, 1994, Mr. Copanos requested a 
hearing, and in a letter dated January 6, 1995, Mr. Copanos submitted 
arguments and information in support of his hearing request. In his 
request for a hearing, Mr. Copanos does not dispute that he was 
convicted of a felony under Federal law as alleged by FDA. However, Mr. 
Copanos argues that: (1) He did not receive proper notice; (2) he is 
entitled to a hearing to contest or explain the facts underlying his 
plea; (3) some factual statements in the agency's proposal are 
inaccurate; (4) the agency's reliance on portions of the indictment is 
inappropriate; (5) and the agency's proposal to debar him is 
unconstitutional.
    The Deputy Commissioner for Operations has considered Mr. Copanos' 
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. Copanos offers do not create the bases for 
a hearing (see 21 CFR 12.24(b)(1)). Mr. Copanos' arguments are 
discussed below.

II. Mr. Copanos' Arguments in Support of a Hearing

A. Notice

    Mr. Copanos objects to being notified of his proposed debarment 
through publication in the Federal Register. It is the policy of the 
agency to send a notice of proposed debarment by certified mail. If 
certified mail delivery is unsuccessful, the agency attempts to deliver 
the notice to the individual personally. If this attempt fails also, 

[[Page 9712]]
notice is given through publication in the Federal Register. FDA 
attempted to serve Mr. Copanos by certified mail but was unable to do 
so. In September 1994, FDA's Baltimore District Office learned that Mr. 
Copanos was out of the country. Agents from FDA's Baltimore District 
Office visited Mr. Copanos' home weekly to determine if he had 
returned. FDA's Office of Criminal Investigation arranged with U.S. 
Customs to be notified if Mr. Copanos returned to the country. When Mr. 
Copanos did not return to the country, the debarment notice was 
published in the Federal Register on November 9, 1994.
    Mr. Copanos requested a hearing on his proposed debarment and made 
arguments in support of that request. Thus, it is clear that Mr. 
Copanos received actual notice of the agency's proposed action and has 
not been deprived of any procedural rights by virtue of publication of 
the debarment notice in the Federal Register.

B. Facts Underlying the Plea

    Mr. Copanos makes the following statements relating to the facts 
underlying his plea. He states that he held a management position and 
did not personally misbrand or manufacture adulterated drugs, that none 
of the drugs or products involved were put into commerce, and that the 
first count of the plea related to a facility that was not under his 
full control at the time. Mr. Copanos also states that the agency's 
proposal sets forth areas of indictment information and factual 
statements of allegations rather than actual proof.
    Mr. Copanos is correct that the agency's proposal contained some 
inaccuracies. Although Mr. Copanos pled guilty to counts four and six 
of the indictment against him, he did not plead guilty to all the 
particulars listed in the indictment. In its debarment proposal, the 
agency mistakenly referred to parts of the indictment to which Mr. 
Copanos did not plead. The agency very much regrets this error. 
However, this misplaced reliance does not raise a genuine and 
substantial issue of fact requiring a hearing.
    The act requires FDA to mandatorily debar an individual who has 
been convicted of certain Federal felonies. The only relevant factual 
issue is whether Mr. Copanos was, in fact, convicted. Mr. Copanos does 
not dispute that he pled guilty to two Federal felony counts for 
actions that relate to the regulation of a drug product. Section 306(l) 
of the act includes in its definition of a conviction, a guilty plea. 
Accordingly, Mr. Copanos' statements regarding the factual 
circumstances underlying his plea fail to raise a genuine and 
substantial issue of fact justifying a hearing.

C. Ex Post Facto Argument

    Mr. Copanos 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. Copanos' 
criminal conduct. The Generic Drug Enforcement Act (GDEA) of 1992, 
including section 306(a)(2), was enacted on May 13, 1992, and Mr. 
Copanos was convicted on February 16, 1990.
    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, 497 U.S. 
37 (1990).)
    Mr. Copanos' claim that application of the mandatory debarment 
provisions of the act is prohibited by the ex post facto clause is 
unpersuasive, because the intent of debarment is remedial, not 
punitive. Congress created the GDEA in response to findings of fraud 
and corruption in the generic drug industry. Both the language of the 
GDEA 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 abbreviated new drug application (ANDA) approval 
process and to protect the public health.'' (See section 1, Pub. L. 
102-282, GDEA of 1992.)
    In a suit challenging a debarment order issued by FDA (58 FR 69368, 
December 30, 1993), the constitutionality of the debarment provision 
was upheld against a similar challenge under the ex post facto clause. 
The reviewing court affirmed the remedial character of debarment:
    Without question, the GDEA serves compelling governmental 
interests unrelated to punishment. The punitive effects of the GDEA 
are merely incidental to its overriding purpose to safeguard the 
integrity of the generic drug industry while protecting public 
health.
Bae v. Shalala, 44 F.3d 489, 493 (7th Cir. 1995). Because the intent of 
the GDEA is remedial rather than punitive, Mr. Copanos' argument that 
the GDEA violates the ex post facto clause must fail. See id. at 496-
97.

D. Miscellaneous Arguments

    Mr. Copanos argues that his debarment would be ``an 
unconstitutional taking of the right to earn a living in the United 
States.'' It appears that Mr. Copanos is referring to a ``taking'' of 
property under the Fifth Amendment. Mr. Copanos further states that he 
has sold his company, including all of its approved applications, and 
that to debar him now ``1would be a malicious act'' on the part of the 
agency. Mr. Copanos also argues that he should not be debarred because 
his guilty plea was made at an emotional and stressful time.
    None of these arguments raise a genuine and substantial issue of 
fact requiring resolution at a hearing. Mr. Copanos has not established 
that his debarment affects any property interest protected by the Fifth 
Amendment. The expectation of employment is not recognized as a 
protected property interest under the Fifth Amendment. Hoopa Valley 
Tribe v. Christie, 812 F.2d 1097, 1102 (9th Cir. 1986); Chang v. United 
States, 859 F.2d 893, 896-97 (Fed. Cir. 1988). Loss of potential profit 
is not a sufficient basis for a ``takings'' claim. Andrus v. Allard, 
444 U.S. 51, 66 (1979). To have a protected property interest, one must 
have a ``legitimate claim of entitlement'' to that interest. Erikson v. 
United States, 67 F.3d 858 (9th Cir. 1995). One who voluntarily enters 
a pervasively regulated industry, such as the pharmaceutical industry, 
and then violates its regulations, cannot successfully claim that he 
has a protected property interest when he is no longer entitled to the 
benefits of that industry. Id.
    Mr. Copanos does not dispute that he was convicted as alleged by 
FDA. Under section 306(l)(1)(B) of the act a conviction includes a 
guilty plea. The facts underlying Mr. Copanos' conviction are not at 
issue. Moreover, the act does not permit consideration of factors such 
as emotional stress; rather, the act is clear that an individual shall 
be debarred if convicted of a felony under Federal law for conduct 
relating to the regulation of any drug product (see section 
306(a)(2)(B) of the act). Mr. Copanos has been convicted of such a 
felony. Accordingly, the Deputy Commissioner for Operations denies Mr. 
Copanos' 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 him (21 CFR 5.20), 
finds that John D. Copanos has been convicted of felonies 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, John D. Copanos is 
permanently debarred from providing services in any capacity to a 
person with an approved or pending drug product application 

[[Page 9713]]
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 (insert date of publication in the Federal 
Register), (21 U.S.C. 335a(c)(1)(B) and (c)(2)(A)(ii)). Any person with 
an approved or pending drug product application who knowingly uses the 
services of Mr. Copanos, in any capacity, during his period of 
debarment, will be subject to a civil money penalty (section 307(a)(6) 
of the act (21 U.S.C. 335b(a)(6))). If Mr. Copanos, 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 a 
civil penalty (section 307(a)(7) of the act). In addition, FDA will not 
accept or review any ANDA or abbreviated antibiotic drug application 
submitted by or with Mr. Copanos' assistance during his period of 
debarment.
    Mr. Copanos 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. 94N-0033 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: February 22, 1996.
Michael A. Friedman,
Deputy Commissioner for Operations.
[FR Doc. 96-5687 Filed 3-8-96; 8:45 am]
BILLING CODE 4160-01-F