Are the Stars Lining Up for FDA Civil Penalties?

November 17, 2008

By James P. Ellison

FDA’s November 12, 2008 Federal Register Notice of its Direct Final Rule to comply with the Federal Civil Penalties Inflation Adjustment Act, 28 U.S.C. § 2461 note, is not in itself a blogworthy event, but it could be part of something bigger. 

While FDA has used its civil penalty authority sporadically (for example settling in July of this year with Advanced Bionics LLC for $1.1M based on an administrative complaint seeking $2.2M), generally speaking, based on historical enforcement, one would not list FDA civil penalty actions among the top ten things likely to keep CEOs in FDA regulated industries up at night.  But see The Pursuit of Civil Money Penalties— An Important Weapon in FDA’sEnforcement Arsenal (discussing the TMJ Implants case).

A new administration, the FDA Amendments Act ("FDAAA"), and an inflation increase for older civil penalties may just be the triple threat that civil penalties need to move up that top ten list of things keeping CEOs awake, however. 

The law requires FDA to adjust its civil monetary penalties at least one time every 4 years to account for inflation, and FDA last adjusted these penalties in 2004.  While the increases do not affect the new civil penalty authority granted FDA under FDAAA in 2007, the Notice does list the nine (9) new civil penalties created by FDAAA, which we previously described.

The resulting new 21 C.F.R. § 17.2  may now have sufficient heft to warrant more FDA enforcement resources, especially because of coincidental timing that nevertheless almost compels one to speculate about the enforcement priorities of an Obama administration FDA.

The FDA’s Rule was published as a direct final rule, which means that FDA did not believe notice and comment rulemaking was necessary under the Administrative Procedure Act.  To prevent the Rule from becoming final, significant adverse comments on it are due by January 26, 2009 (i.e., 6 days after Inauguration Day).  If no such comments are received, the increased civil penalties become effective on March 27, 2009, by which time a new President may have selected a new FDA Commissioner who is just getting down to work on enforcement priorities.

Categories: Enforcement