When Bexis sends around the weekly list of cases, we jump on the ones where the United States is the first listed party. It returns us to our salad days at the U.S. Attorney's Office way back at the end of the 20th century. (We had more fun, more authority, more hair, and less insomnia, less fat, and less concern about billable hours.) And when the case involves some of the Third Circuit's best judges affirming one of E.D. Pa's best judges, we know we're in for a pleasant ride.
The ride in United States v. Vepuri, 2023 U.S. App. LEXIS 18429 (3d Cir. July 20, 2023), was decidedly unpleasant for the government – specifically, the Food and Drug Administration.
The government prosecuted a drug company and its executives for sourcing an active ingredient from a facility not included in the drug approvals, and for lying about it. The operative indictment charged the three defendants with conspiracy to defraud and to commit offenses against the United States. The company was also tagged with a count of mail fraud. The central issue in the Vepuri case was the portion of the conspiracy charge alleging that the three defendants conspired to violate provisions of the Food, Drug and Cosmetic Act that prohibit introducing a "new drug" into interstate commerce unless an FDA approval is "effective with respect to such drug." 21 U.S.C. section 355(a). The district court threw that count out, and the Third Circuit agreed.
If any of you decide to spend a few years prosecuting crooks, be prepared for a stimulating, enjoyable stint. But also be prepared for the occasional tongue-lashing from a judge about prosecutorial overreach and overcharging. It comes with the territory. AUSA's have great power. And you remember what Spider Man said about that, right? There's an entry somewhere in Title 21 to fit almost any malfeasance. Choosing which charges to file is usually a rote exercise, but there are occasional moments permitting creativity. But when creativity becomes a little too expansive, smart defense lawyers might file a motion and smart judges might grant it. In Vepuri, the government offered an expansive reading of the FDCA to fashion a criminal charge. The FDA claimed that essentially any violation of the terms of an ANDA/NDA allowed it to charge a regulated person with violation of 21 U.S.C. §355(a), illegally shipping an "unapproved" new drug in interstate commerce. Did the defendants' use of an unapproved ingredient source mean that the approval of the drug was no longer "effective"? Nope. Undisputedly, the defendants had an in-force ANDA. But the government came up with a double-barreled argument that by violating one or more terms of the ANDA (here, by allegedly importing certain ingredients without telling FDA), (1) The drug was no longer the "such drug" or "new drug" that had been approved, and/or (2) use of a new ingredient meant that the approval was no longer "effective." Both barrels misfired.
First, the drug, even with a new ingredient supplier, was the same "such drug" or "new drug" that had secured FDA approval. The FDCA defines a new drug in terms of its composition and labeling. The indictment did not allege that the active ingredient, whatever its provenance, had a different composition or labeling than the drug with the effective approval. Further, the government was trying to have it both ways as to whether the new ingredient source turned the drug into a different drug. For example, the government claimed that the defendants violated reporting obligations for the "new drug." That "new drug" is the same one, not some different one, from the one that had the initial FDA approval. The government wanted to employ different definitions of "new drug" depending on which provisions were in play, but the Third Circuit refused to countenance such statutory incoherence. . "New drug" means the same thing throughout the FDCA. It does not mean whatever the FDA wants it to mean in any particular context.
Second, the government's alternative argument, that the new ingredient source meant that the approval of the drug was no longer "effective," face-planted against a SCOTUS case, Weinberger v. Hynson, Westcott & Dunning, Inc., holding that "an NDA or ANDA only stops being effective when the procedures for suspension or withdrawal in section 355(e) are followed." The plain language of §355(a) precludes the FDA from treating violations of in-force drug approvals as nullifying the approval itself (something plaintiffs occasionally claim in product liability litigation). Simply having an illegal ingredient does not make the drug itself unapproved or render the approval ineffective.
The Third Circuit remanded "the case for proceedings on the remaining charges." The FDA can still prosecute the false statements, but cannot torture the ANDA/NDA process to pile on charges.
Originally published by Drug & Device Law
This article is presented for informational purposes only and is not intended to constitute legal advice.
