[Federal Register Volume 89, Number 103 (Tuesday, May 28, 2024)]
[Notices]
[Pages 46125-46127]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-11546]


-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2023-N-0201]


Jessica Palacio; Denial of Hearing; Final Debarment Order

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: The Food and Drug Administration (FDA or Agency) is denying a 
request for a hearing submitted by Andrew S. Feldman, on behalf of 
Jessica Palacio (Palacio), and is issuing an order under the Federal 
Food, Drug, and Cosmetic Act (FD&C Act) permanently debarring Palacio 
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 Palacio was convicted of a felony under Federal law for 
conduct relating to the development or approval, including the process 
for development or approval, of any drug product under the FD&C Act. 
FDA provided notice to Palacio of the proposed debarment and an 
opportunity to request a hearing within the timeframe prescribed by 
regulation. Palacio submitted a request for hearing but failed to file 
with the Agency information and analyses sufficient to create a basis 
for a hearing.

DATES: The order is applicable May 28, 2024.

ADDRESSES: Any application for termination of debarment by Palacio 
under section 306(d) of the FD&C Act (21 U.S.C. 335a(d)) (application) 
may be submitted as follows:

Electronic Submissions

     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments. An application 
submitted electronically, including attachments, to https://www.regulations.gov will be posted to the docket unchanged. Because 
your application will be made public, you are solely responsible for 
ensuring that your application does not include any confidential 
information that you or a third party may not wish to be posted, such 
as medical information, your or anyone else's Social Security number, 
or confidential business information, such as a manufacturing process. 
Please note that if you include your name, contact information, or 
other information that identifies you in the body of your application, 
that information will be posted on https://www.regulations.gov.
     If you want to submit an application with confidential 
information that you do not wish to be made available to the public, 
submit the application as a written/paper submission and in the manner 
detailed (see ``Written/Paper Submissions'' and ``Instructions'').

Written/Paper Submissions

    Submit written/paper submissions as follows:
     Mail/Hand Delivery/Courier (for written/paper 
submissions): Dockets Management Staff (HFA-305), Food and Drug 
Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.
     For a written/paper application submitted to the Dockets 
Management Staff, FDA will post your application, as well as any 
attachments, except for information submitted, marked and identified, 
as confidential, if submitted as detailed in ``Instructions.''
    Instructions: All applications must include the Docket No. FDA-
2023-N-0201. An application will be placed in the docket and, unless 
submitted as ``Confidential Submissions,'' publicly viewable at https://www.regulations.gov or at the Dockets Management Staff between 9 a.m. 
and 4 p.m., Monday through Friday, 240-402-7500.
     Confidential Submissions--To submit an application with 
confidential information that you do not wish to be made publicly 
available, submit your application only as a written/paper submission. 
You should submit two copies total. One copy will include the 
information you claim to be confidential with a heading or cover note 
that states ``THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.'' The 
Agency will review this copy, including the claimed confidential 
information, in its consideration of your application. The second copy, 
which will have the claimed confidential information redacted/blacked 
out, will be available for public viewing and posted on https://www.regulations.gov. Submit both copies to the Dockets Management 
Staff. If you do not wish your name and contact information to be made 
publicly available, you can provide this information on the cover sheet 
and not in the body of your application and you must identify this 
information as ``confidential.'' Any information marked as 
``confidential'' will not be disclosed except in accordance with 21 CFR 
10.20 and other applicable disclosure law. For more information about 
FDA's posting of comments to public dockets, see 80 FR 56469, September 
18, 2015, or access the information at: https://www.govinfo.gov/content/pkg/FR-2015-09-18/pdf/2015-23389.pdf.
    Docket: For access to the docket, go to https://www.regulations.gov 
and insert the docket number, found in brackets in the heading of this 
document, into the ``Search'' box and follow the prompts and/or go to 
the Dockets Management Staff, 5630 Fishers Lane, Rm. 1061, Rockville, 
MD 20852 between 9 a.m. and 4 p.m., Monday through Friday, 240-402-
7500. Publicly available submissions may be seen in the docket.

FOR FURTHER INFORMATION CONTACT: Karen Fikes, Office of Scientific 
Integrity, Food and Drug Administration, 10903 New Hampshire Ave., 
Bldg. 1, Rm. 4232, Silver Spring, MD 20993, 301-796-9603.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 306(a)(2)(A) of the FD&C Act mandates permanent debarment 
if FDA finds that the individual has been convicted of a felony under 
Federal law for conduct relating to the development or approval, 
including the process for development or approval, of any drug product. 
On January 12, 2023, following a jury trial, the U.S. District Court 
for the Southern District of Florida entered

[[Page 46126]]

a judgment against Palacio for one count of false statements in 
violation of 18 U.S.C. 1001(a)(2).
    A grand jury returned a two-count indictment on May 12, 2021, 
against Palacio, the study coordinator, for clinical trials from about 
2013 to 2015 at Unlimited Medical Research, LLC (Unlimited). The 
indictment charged Palacio with conspiring to commit wire fraud, in 
violation of 18 U.S.C. 1349 and making a false statement to FDA, in 
violation of 18 U.S.C. 1001(a)(2). On September 13, 2022, the jury 
found Palacio guilty of both charges. However, on September 15, 2022, 
the court granted Palacio's motion for acquittal with respect to the 
conspiracy. On January 12, 2023, the court entered a criminal judgment 
against Palacio for false statements in violation of 18 U.S.C. 
1001(a)(2) and sentenced Palacio to 36 months imprisonment.
    By letter dated August 18, 2023, FDA's Office of Regulatory Affairs 
(ORA) notified Palacio of a proposal to issue an order of permanent 
debarment (Notice). As explained in the Notice, Palacio's conviction 
stemmed, in part, from a statement made in a signed affidavit to FDA 
investigators during the Agency's investigation into allegations of 
irregularities in data submitted by Unlimited. Unlimited previously 
contracted with Parexel International, a contract research organization 
that the sponsor company, GlaxoSmithKline (GSK), a global biopharma 
company, hired to conduct a clinical trial, known as the Vestri Study, 
to study certain asthma drugs in pediatric subjects aged 4 to 11 years. 
GSK reported allegations of irregular data to FDA related to certain 
records created by Unlimited that documented the participation of 
certain pediatric subjects. As study coordinator at Unlimited, Palacio 
would have, among other responsibilities, helped to ensure the study 
protocol was followed. Therefore, as part of the investigation, FDA 
questioned Palacio regarding the irregularities. Specifically, 
inspectors inquired about the screening visit of a specific subject 
called D.H., including records indicating Palacio performed a screening 
visit and records indicating the subject had been in school at the time 
of the purported screening. Palacio then signed an affidavit, on April 
25, 2017, stating, ``I can confirm that the Screening/Visit 1 was 
performed by myself and Dr. Villaman-Bencosme.'' As explained in the 
Notice, this statement was false in that Palacio knew at that time that 
D.H. had not participated in the clinical trial; therefore, she had not 
screened D.H. for the Vestri study. The signed affidavit was part of 
the evidence offered at trial leading to Palacio's conviction for 
making false statements to FDA in violation of 18 U.S.C. 1001(a)(2).
    The Notice explained that the proposed permanent debarment of 
Palacio is based on her Federal felony conviction for making false 
statements to FDA and that the conduct serving as the basis for that 
conviction relates to the development or approval, including the 
process for development or approval, of any drug product. The Notice 
also informed Palacio of an opportunity for her to request a hearing 
under section 306(i) of the FD&C Act and part 12 (21 CFR part 12).
    In response to the Notice, Palacio submitted a timely request for a 
hearing, which included a notice of appearance and request for an 
extension to submit materials in support of the hearing request. 
Following two extensions to submit supporting materials, which were 
both granted, on December 4, 2023, Palacio submitted a response 
entitled ``Memorandum in Support of a Request for a Hearing 
(Memorandum).'' Palacio's Memorandum included several claims and 
multiple documents challenging whether she is subject to permanent 
debarment. Specifically, Palacio challenges whether her conviction 
relates to the development or approval, including the process for 
development or approval, of any drug product.
    Under the authority delegated to him by the Commissioner of Food 
and Drugs, the Director, Office of Scientific Integrity (OSI Director) 
has considered Palacio's request for a hearing. Hearings are granted 
only if there is a genuine and substantial issue of fact. A request for 
a hearing may not rest upon mere allegations or denials but must 
present specific facts showing that there is a genuine and substantial 
issue of fact that justifies a hearing. Hearings will not be granted on 
issues of policy or law, on mere allegations, denials or general 
descriptions of positions and contentions, or on data and information 
insufficient to justify the factual determination urged (see Sec.  
12.24(b) (21 CFR 12.24(b))).\1\
---------------------------------------------------------------------------

    \1\ Palacio's Memorandum references her request for a hearing 
pursuant to the standard identified in 21 CFR part 16 as opposed to 
the standard outlined in Sec.  12.24. In the Notice, ORA explained 
that her proposed debarment and the request for a hearing are 
addressed under the regulations outlined in part 12. Consequently, 
FDA applies the standard described in Sec.  12.24 to Palacio's 
hearing request.
---------------------------------------------------------------------------

II. Argument in Support of a Hearing

    Under section 306(a)(2)(A) of the FD&C Act, an individual convicted 
of a Federal felony for conduct relating to the development or 
approval, including the process for development or approval, of any 
drug product is subject to permanent debarment. The relevant factual 
issues are whether Palacio was, in fact, convicted of a Federal felony 
and whether the basis of that conviction relates to the development or 
approval, including the process for development or approval, of any 
drug product.
    Palacio does not dispute that a court convicted her of a Federal 
felony under 18 U.S.C. 1001(a)(2). In fact, in her Memorandum, Palacio 
concedes that her conviction is a fact not in dispute. However, Palacio 
challenges whether the conduct underlying her conviction relates to the 
development and approval, including the process for development and 
approval, of a drug. In her Memorandum, Palacio offers two central 
claims to support her argument: (1) material facts exist, which would 
determine whether she qualifies for permanent debarment under section 
306(a)(2)(A) of the FD&C Act; and (2) nine prior permanent debarments 
are factually distinguishable from her proposed debarment, as they 
relate to false statements made ``while a clinical trial or similar 
study was ongoing.''
    Section 306(a)(2)(A) of the FD&C Act specifically provides for 
permanent and mandatory debarment of individuals convicted of a felony 
under Federal law for conduct related to the development or approval, 
including the process for development or approval, of any drug product. 
If the language of the statute is clear, there is no need to look 
outside the statute to its legislative history in order to ascertain 
the statute's meaning (Chamber of Commerce of the United States v. 
Whiting, 563 U.S. 582, 599 (2011)). Likewise, the Supreme Court has 
repeatedly held that the language in the FD&C Act should be construed 
in a manner consistent with its overall public health purpose. The FD&C 
Act is given ``liberal construction consistent with the Act's 
overriding purpose to protect public health . . .'' (United States v. 
Article of Drug Bacto-Unidisk, 394 U.S. 784, 798 (1969)). The Supreme 
Court has addressed the definition of ``relating to'' in the context of 
other statutory authorities. Specifically, the Supreme Court stated 
that ``relating to'' expressed a broad legislative purpose and defined 
it as ``. . . to stand in some relation; to have bearing or concern; to 
pertain; refer; to bring into association with or connection with.'' 
(Morales v. Trans World Airlines, Inc., 504 U.S. 374, 383 (1992) 
(citing Black's Law Dictionary 1158 (5th ed. 1979))). When applying 
this definition to ``reasonably related'' in the context of FDA-
regulated drug patents, the Supreme Court declined to read the 
requirement

[[Page 46127]]

narrowly. Rather, an activity that is ``appropriate to include in a 
submission to the FDA . . . is `reasonably related' to the `development 
and submission of information under . . . Federal law'' (Merck KGaA v. 
Integra Lifesciences I, Ltd., 545 U.S. 193, 207 (2005)).
    In a previous action requiring mandatory debarment under section 
306(a)(2)(A) of the FD&C Act for conduct relating to the development or 
approval, including the process for development or approval, of any 
drug product, FDA stated that ``the statutory language `relating to the 
development or approval' . . . by definition, encompasses all things 
that are logically connected with the development or approval of a drug 
product.'' (Atul Shah; Denial of Hearing; Final Debarment Order, (59 FR 
62399, December 5, 1994), (citing Webster's Collegiate Dictionary, 
Merriam-Webster Inc., Springfield, MA, 1990, ``relate''); see also Ray 
Nathan; Denial of Hearing; Final Debarment Order, (76 FR 48869 at 
48870, August 9, 2011), (affirming the Shah definition of ``relates 
to,'' and going further to define ``develop'' . . . ``to explore the 
possibilities of'' and ``to make suitable for commercial * * * 
purposes.'' (see ``Merriam-Webster's Collegiate Dictionary,'' 10th 
Edition (2002))).\2\
---------------------------------------------------------------------------

    \2\ See also, The Drug Development Process [verbar] FDA. 
(https://www.fda.gov/patients/learn-about-drug-and-device-approvals/drug-development-process).
---------------------------------------------------------------------------

    Palacio's felony conviction is related to the development and 
approval, including the process for development and approval, of a 
drug. The trial established that Palacio held the role of clinical 
trial coordinator at the clinical trial site, Unlimited, which 
contracted to conduct a clinical trial to study certain asthma drugs in 
pediatric subjects between the ages of 4 and 11 years. As ORA explained 
in the Notice, drug sponsors, like GSK, submit clinical trial data in 
support of drug product applications for review and approval by FDA, 
and the Agency relies upon the integrity of the data and information in 
the applications to determine whether a drug meets required safety and 
effectiveness standards. The basis for Palacio's Federal felony 
conviction for false statements in a signed affidavit is regarding 
conduct in her role as clinical trial coordinator. Specifically, in her 
signed affidavit Palacio ``represented . . . that she had performed a 
screening visit for D.H. in the Study, when in truth and in fact, and 
as [Palacio] then and there well knew, she had not performed a 
screening for D.H. . .'' Palacio's false statements about her role in 
the conduct of a clinical trial related to the development or approval, 
including the process for development or approval, of any drug product. 
Palacio's role and statements regarding her role pertaining to the 
Vestri Study, a clinical study meant to inform GSK's submission to FDA, 
are logically connected to the development or approval of a drug 
product. Palacio's Memorandum does not provide any material facts 
capable of overcoming the clear language in section 306(a)(2)(A) of the 
FD&C Act and the logical connection of her conduct to the development 
or approval, including the process for development or approval, of any 
drug product. Therefore, Palacio has failed to raise a genuine and 
substantial issue of fact warranting a hearing to determine whether she 
is subject to permanent debarment. Accordingly, the OSI Director need 
not address Palacio's other arguments, including her efforts to 
distinguish her own conduct from that of other debarred individuals.

III. Findings and Order

    Therefore, the OSI Director, under section 306(a)(2)(A) of the FD&C 
Act and authority delegated to him by the Commissioner of Food and 
Drugs, finds that Palacio has been convicted of a felony under Federal 
law for conduct relating to the development or approval, including the 
process for development or approval, of any drug product.
    As a result of the foregoing findings, Palacio is permanently 
debarred from providing services in any capacity to a person with an 
approved or pending drug product application under sections 505, 512, 
or 802 of the FD&C Act (21 U.S.C. 355, 360b, or 382), or under section 
351 of the Public Health Service Act (42 U.S.C. 262), effective May 28, 
2024 (see 21 U.S.C. 335a(c)(1)(B) and (c)(2)(A)(ii) and 21 U.S.C. 
321(dd)). Any person with an approved or pending drug product 
application, who knowingly uses the services of Palacio, in any 
capacity during her period of debarment, will be subject to civil money 
penalties (section 307(a)(6) of the FD&C Act (21 U.S.C. 335b(a)(6))). 
If Palacio, during her period of debarment, provides services in any 
capacity to a person with an approved or pending drug product 
application, she will be subject to civil money penalties (section 
307(a)(7) of the FD&C Act). In addition, FDA will not accept or review 
any abbreviated new drug applications submitted by or with the 
assistance of Palacio during her period of debarment (section 
306(c)(1)(B) of the FD&C Act).

    Dated: May 21, 2024.
George M. Warren,
Director, Office of Scientific Integrity.
[FR Doc. 2024-11546 Filed 5-24-24; 8:45 am]
BILLING CODE 4164-01-P