Consent Decree
It is hard to believe how fast 2010 has flown by. As we all continue to age gracefully, the pace of each year really begins to accelerate. That said, I would like to begin this edition of Devine Guidance by wishing all of my readers a joyous and safe holiday season and a very prosperous start to the New Year.
In 2011, Dr. D. will commence with the exploration of the Medical Device Directive and continue to provide wisdom and guidance in the hope that this knowledge will be employed for driving ongoing quality and regulatory compliance within each of your organizations. I thank you for your ongoing patronage of the Medical Device Summit and Devine Guidance (DG).
Consent decree
Once the agency has decided to progress to consent decree, all bets are off, because now, the courts are involved. By now, your organization has probably endeared themselves with the agency by an overall lack of understanding of the Food, Drug, and Cosmetic Act, the Quality System Regulation (QSR), and the overall authority granted to the agency under the Act. As Dr. D has repeatedly stated, failure to comply is not an option. Compliance to the Act and the QSR is mandated by law and guess what? It is FDA that decides if an organization is compliant with the law, through the process of establishment inspections. By moving the issue of continued lack of compliance into the Federal Courts, the agency has exhausted all avenues previously afforded. Remember there is no single event or series of events that propels the agency to pursue a consent decree. For example, the offending establishment probably received a Form 483, or a warning letter. For example, the offending establishment had product that was hurting patients (a.k.a., not safe and effective). Or, for example, the offending establishment has not been responsive to FDA, e.g., failed to respond to a request within the stipulated 15 days.
At this juncture, FDA probably believes the offending establishment just does not comprehend the ongoing messages being sent by the agency. The end result of any of the previously mentioned examples or combination of these examples can result in a consent decree. People, this is not good, what part of compliance is not being understood? In fact, if Dr. D ran the agency, the first thing I would recommend, once an organization moved to operating under a consent decree, is the measuring of the Chief Jailable Officer (CJO) for that infamous orange jumpsuit. In fact, I would institute orange-jumpsuit Fridays for all of the offending establishment’s officers just to drive home the point of mandated compliance. Remember, consent decree and the resulting actions are now being driven by the courts and all bets are off in regards to when normal business operations will return, if ever.
What is Consent Decree?
A consent decree is a legal agreement between FDA and the offending establishment that will be the blueprint to drive the required changes to systems, procedures, and behaviors needed to bring the offending organization back into compliance. One of the objectives of the consent decree is to prevent protracted litigation within the courts. Once the terms of the consent decree are agreed upon between the agency and the offending establishment, the agreement is signed by the establishment’s chief officer (preferably the CEO), a U.S. Attorney and the judge presiding over the matter in the applicable US District Court. Once signed, the consent decree is forwarded to FDA, issued to the offending establishment, and the real work of correcting the objectionable conditions commences.
Since the establishment has failed miserably in their attempts to attain compliance, a third-party consultant is brought into the mix to assist in correcting the objectionable conditions. Dr. D can hear the controller screaming as the dollars begin flying out the door faster than F-22 Raptor in full afterburner. Additionally, if the offending establishment, about to enter the consent decree process, has not retained outside counsel, now would be the time. Furthermore, if the offending establishment thinks that third-party consultants are expensive, just wait until the payment of the fines being levied is required, for not fulfilling the terms of the agreement quickly or for punitive reasons. Finally, if the added expense of consultants and the payment of fines do not get the organization’s attention, how about a forced market withdrawal, product seizure, or delay in new product approvals.
Remember that theagency, if necessary, will employ the courts to prevent establishments from placing or introducing product into commerce, especially if products are causing injury or death; or if an establishment’s continues to not comply with the Act. As with all regulatory actions pursued by the agency, FDA will ask “in writing” for establishing a voluntary product withdrawal. Then it is back to the courts, if the requests are ignored or declined. Dr. D is not sure why any organization, being managed by sane and rational management, would ever refuse an agency request. Failure to comply with an agency request, while operating under a consent decree, can be equated to severe pain being unleashed by the agency. Trust Dr. D when I say, “the CJO will sleep better at night when compliance is the norm and not the exception.”
Final thoughts
For starters, establishments entering into a consent decree will not be extricating themselves from this environment quickly. In fact, consent decrees could take several years of hard work to bring offending establishments back into compliance with the Act. To give you an idea of how expensive a consent decree can be, Schering-Plough (consent decree – 2002) was initially fined $500 million dollars. If that figure does not get your attention, how about the estimated $1 billion that Abbot Laboratories (consent decree – 1999) spent on correcting objectionable conditions while living in the land of consent decree.
Best advice, never enter the realm of consent decree. Yes, device manufacturers will receive an occasional Form 483, because systems are managed by people, and people make mistakes. However, Form 483 observations need to be taken seriously and corrections to objectionable conditions quickly made. Yes, some device manufacturers will receive waning letters. Once these letters are received, it is incumbent upon the recipients to draw up a detailed plan for correction and work closely with the agency in correcting the objectionable conditions. Once an offending establishment moves ongoing operations under a consent decree, all bets are off and the expensive fun stuff commences. In this pay-me-now vs. pay-me-later scenario, it is wise to invest in the development and implementation of a robust manufacturing environment that is one, compliant with all aspects of the Act, and two, capable of sustaining a compliant environment with adequate staffing resources, rather than dance with the agency in U.S. District Court. Why? Because $1 billion can buy a whole lot of R&D instead of paying for remediation programs.
Takeaways
This week there is just one message that needs to taken away from DG. That message is, “consent decrees are expensive.” If the process of paying the third-party consultants does not grab the attention of the controller, rest assured the fines levied by the courts should. One final thought, with no new product approvals from FDA on the horizon, your competitors will be thanking you as your customer base and market share quickly begin to erode. Couple the eroding market share with the agency’s unwillingness to sign Certificates for Exportation and the potential for financial Armageddon begins to unfold.
In closing, thank you again for joining Dr. D and I hope you find value in the guidance provided. Until the next installment of DG, when Dr. D will begin exploring the Medical Device Directive, cheers from Dr. D. and best wishes for continued professional success.
References:
- Anatomy of a consent decree. (2007, April). Eye on the FDA. Retrieved December 13, 2010, from http://www.eyeonfda.com
- Burd, M. & Chrai, S. (2004, June). After the consent decree – a uphill battle for affected companies. Retrieved December 16, 2010, from http://biopharminternational.findpharma.com
- Code of Federal Regulation. (2010, April). Title 21 Part 820: Quality system regulation. Washington, D.C.: U. S. Government Printing Office.
- Devine. C. (2009, July). Exploring the effectiveness of defensive-receiving inspection for medical device manufacturers: a mixed method study. Published doctoral dissertation. Northcentral University. Prescott Valley, AZ.
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