The Government’s Perspective Ways companies can effectively respond to an investigation, and the interplay of FDA and the USAO in conducting investigations AUSA Ioana Petrou, USAO N.D. Cal. Anne K. Walsh, FDA Associate Chief Counsel
Opinions expressed during this presentation are solely those of the speakers, and do not represent the views of the FDA nor the Department of Justice.
Overview Relationship between agency counsel and the USAO Before investigations – don’t break the law During investigations – what cooperation impresses prosecutors Resolving investigations – clean-up The relationship between agency counsel and the USAO (Walsh and Petrou) Don't break the law (Walsh) Once notified of a federal investigation, what cooperation impresses prosecutors (Petrou) Clean-up
Relationship between FDA and USAOs FDA needs USAO to prosecute violations of the FDCA FDA supports USAO A. FDA needs USAO to prosecute violations of the FDCA 1. Violations for introducing misbranded or adulterated devices into interstate commerce 2. Legal theories discussed earlier by Bragg/Bentivoglio B. FDA supports USAO 1. Office of Criminal Investigations 2. Liaison to experts within the agency 3. Documents related to device approval, communications, inspections
Before Investigations Compliance Programs Communications with customers and regulators Education II. Don't break the law (Walsh) A. Compliance program 1. Periodic internal audits B. Communication with customers and regulators 1. Doctor and patient complaints 2. Seek guidance from FDA and HHS-OIG C. Education 1. Training for in-house compliance directors a. Know what is going on in the industry 2. Training for employees
During Investigations Cooperate and act credibly Produce documents and witnesses Privilege waivers How US learns about what everyone in the company says and does III. Once notified of a federal investigation, what cooperation impresses prosecutors (Petrou) A. Cooperate and act credibly 1. Strategic decision within the company, but if you choose to cooperate, do so early and completely 2. Remember that this is a relevant factor in decision whether to prosecute and at sentencing phase of a criminal trial B. Produce documents and witnesses C. Waivers of privilege D. How US learns about what everyone in the company says and does
During Investigations Tell us what happened Assess what happened Present US with support for position White Papers Presentations Recognize that the government is not looking to impose criminal liability for mistakes, but that this is a highly regulated industry, so the stakes are higher
Resolving Investigations Convince US that conduct will not happen again McNulty Memorandum Resolution release criminal vs. civil individual vs. corporate liability IV. Clean-up A. Convince US that conduct will not happen again B. DOJ's Principles of Federal Prosecution of Business Organizations (McNulty memo) http://www.usdoj.gov/dag/speeches/2006/mcnulty_memo.pdf C. Resolution 1. Don't expect criminal release, or any resolution, that is broader than the conduct investigated (including resolution of state/local government suits) 2. Understand the differences between civil and criminal investigations 3. Culpability of corporation versus individuals a. also discussed earlier by Bragg/Bentivoglio
Collateral Consequences False Claims Act Exclusion Civil money penalties Loss of accreditation Short-term lending rates Impact on mergers and other deals Product liability suits Shareholder derivative suits Collateral consequences of criminal liability False Claims Act Exclusion Civil Money Penalties 21 U.S.C. § 333(f)(1) - "any person who violates a requirement of the Act which relates to devices shall be liable to the US for a civil penalty in an amount not to exceed $15,000 for each such violation, and not to exceed $1,000,000 for all such violations adjudicated in a single proceeding." Loss of accreditation Creditors raising short-term lending rates Impacts on mergers and other business deals Product liability suits Shareholder derivative suits
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