[Federal Register Volume 64, Number 199 (Friday, October 15, 1999)]
[Notices]
[Pages 55944-55946]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-26938]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
[Docket No. 99N-2674]
Jay Marcus; Proposal to Debar; Opportunity for a Hearing
AGENCY: Food and Drug Administration, HHS.
ACTION: Notice.
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SUMMARY: The Food and Drug Administration (FDA) is proposing to issue
an order under the Federal Food, Drug, and Cosmetic Act (the act)
permanently debarring Mr. Jay Marcus from providing services in any
capacity to a person that has an approved or pending drug product
application. FDA bases this proposal on a finding that Mr. Marcus was
convicted of a felony under Federal law for conspiracy to defraud the
United States. This notice also offers Mr. Marcus an opportunity for a
hearing on the proposal. The agency is issuing this notice in the
Federal Register because all other appropriate means of service of the
notice upon Mr. Marcus have proven ineffective.
DATES: Submit written requests for a hearing by November 15, 1999.
ADDRESSES: Submit written requests for a hearing and supporting
information to the Dockets Management Branch (HFA-305), Food and Drug
Administration, 5630 Fishers Lane, rm. 1061 Rockville, MD 20852.
FOR FURTHER INFORMATION CONTACT: Christine F. Rogers, Center for Drug
Evaluation and Research (HFD-7), Food and Drug Administration, 5600
Fishers Lane, Rockville, MD 20857, 301-594-2041.
SUPPLEMENTARY INFORMATION:
I. Conduct Related to Conviction
On October 21, 1994, the United States District Court for the
District of Maryland accepted Mr. Marcus' plea of guilty to one count
of conspiracy to defraud the United States under 18 U.S.C. 371 and
sentenced Mr. Marcus for the crime. The underlying facts supporting
this felony conviction, and to which Mr. Marcus stipulated to in his
plea agreement, are as follows:
Mr. Marcus was the president and chief executive officer of Halsey
Drug Co., Inc. (Halsey), a generic drug manufacturer with facilities
located in Brooklyn, NY. Halsey had obtained approval to market certain
generic drug products. Master formulas approved in the abbreviated new
drug applications (ANDA's) for those products specified the ingredients
and manufacturing processes to be used. FDA regulations required Halsey
to maintain accurate and contemporaneous written batch records
documenting the raw materials used and the manufacturing processes
followed for each batch of such generic drug products.
With Mr. Marcus' knowledge and sometimes at his direction or with
his approval, Halsey employees responded to problems in the production
of Halsey's products by reworking batches without approval from FDA,
including on some occasions regrinding tablets and adding lubricants.
To conceal these practices from FDA, Halsey employees did not document
these reworks on the batch record. For some Halsey products, problems
encountered in manufacturing large production batches led Halsey
employees to develop alternate formulas and manufacturing processes
that replaced the FDA-approved master formulas. These alternate
formulas, kept on handwritten ``phony cards,'' sometimes substituted
unapproved inactive ingredients. Although Halsey employees followed the
phony card formulas, they created false batch records that made it
appear as though Halsey had followed the FDA-approved master formulas,
with the intent to conceal the phony card system from FDA.
For the product quinidine gluconate 324-milligram (mg) tablets,
Halsey employees created a phony card formula to solve a problem with
the dissolution rate of large-scale production batches. Quinidine
gluconate is a medication that treats irregular heartbeats. The phony
card formula included additions of the unapproved inactive ingredients
magnesium stearate and stearic acid. Mr. Marcus became aware of the
unapproved deviations in the formula and manufacturing process for
quinidine gluconate. With other members of Halsey's management, Mr.
Marcus discussed filing the required preapproval supplement to get
FDA's approval for those changes. However, Mr. Marcus and other members
of Halsey's management realized that FDA would consider the changes
significant and would probably require an expensive bioequivalence
study to test the performance of Halsey's alternate formula. Because
filing a preapproval supplement might require an additional
bioequivalence study and delay Halsey's marketing of the product for
years, Mr. Marcus and the others decided to continue using the phony
card system without filing a supplement. Mr. Marcus and other Halsey
employees caused batch number 2F24H of quinidine gluconate 324-mg
tablets to be manufactured according to the unapproved, phony card
formula, introduced into interstate commerce, and delivered to
Baltimore, MD on August 27, 1992.
Halsey employees used alternate formulas and created false batch
records for other products, including acetaminophen and codeine
phosphate tablets, propylthiouracil tablets, and metronidazole tablets.
When an FDA inspection in 1989 revealed irregularities at the company,
Mr. Marcus and others directed the creation of false batch records for
acetaminophen and codeine phosphate tablets in an attempt to cover up
the phony card system.
During the course of manufacturing research and development
batches, Halsey employees created false paperwork for submission to FDA
to make it appear that they had made more or larger batches than they
actually made. Mr. Marcus later became aware of that conduct and
participated in conduct to cover up those falsifications.
Between August 23, 1989, and October 11, 1989, FDA inspected
Halsey's facilities to determine Halsey's compliance with the act. On
or about August 29, 1989, Mr. Marcus directed a Halsey employee to
create a falsified raw material inventory card for fenoprofen calcium.
Mr. Marcus knew that the raw material card falsely stated that Halsey
had received 50 kilograms of fenoprofen calcium on September 11, 1987.
Mr. Marcus knew that in fact Halsey had received half that amount. The
purpose of the falsification was to conceal from FDA that Halsey did
not have enough raw material from that shipment to manufacture its
pilot batches in the sizes represented in ANDA's for the generic drug
products fenoprofen calcium 200-mg capsules, fenoprofen calcium 300-mg
capsules,
[[Page 55945]]
and fenoprofen calcium 600-mg tablets. Mr. Marcus understood that the
falsified raw material card would be provided to FDA inspectors that
day, and in fact, the falsified card was produced to FDA inspectors
that day.
II. FDA's Finding
Section 306(b)(2)(B)(i) of the act (21 U.S.C. 335a(b)(2)(B)(i))
permits FDA to debar an individual if it finds that the individual has
been convicted of a felony under Federal law for conspiracy to commit a
criminal offense related to the development or approval, including the
process for the development or approval, of any drug product, or
otherwise related to the regulation of drug products, and that the
offense undermined the process for the regulation of drugs. Mr. Marcus'
felony conviction under 18 U.S.C. 371 for conspiracy to defraud the
United States, specifically for conspiracy to submit false ANDA
information to FDA, is a conviction related to the development or
approval of drug products. Submission of false information to an ANDA
undermines the process for the regulation of drugs. Accordingly, the
agency finds that Mr. Marcus is eligible for permissive debarment under
section 306(b)(2)(B)(i) of the act.
Under section 306(l)(2) of the act, permissive debarment may be
applied when an individual acted or was convicted within the 5 years
preceding initiation of an agency action proposed to be taken under
section 306(b)(2)(B) of the act. Under section 306(c)(2)(A)(iii) of the
act, the agency may debar Mr. Marcus for up to 5 years for each
offense. FDA finds that Mr. Marcus is eligible to be debarred for 5
years under section 306(b)(2)(B)(i) of the act because he was convicted
of one count of conspiracy to commit a crime relating to the
development or approval of drug products.
Section 306(c)(3) of the act provides several considerations for
determining the appropriateness and the period of permissive debarment.
The considerations applicable to a decision to debar an individual
include: (1) Nature and seriousness of the offense involved, (2) nature
and extent of management participation in any offense, (3) nature and
extent of voluntary steps to mitigate the impact on the public, and (4)
prior convictions involving matters within the jurisdiction of the FDA.
These considerations are discussed below.
A. Nature and Seriousness of the Offense Involved
Mr. Marcus was convicted of one count of conspiracy to defraud the
United States for knowingly permitting, and sometimes directing,
employees of Halsey to manufacture prescription drugs according to
formulas that deviated from FDA-approved formulas. Mr. Marcus committed
violations with regard to three drugs: Quinidine gluconate tablets,
acetaminophen and codeine tablets, and fenoprofen calcium tablets.
Quinidine gluconate is used to treat irregular heartbeats;
acetaminophen and codeine are used to treat mild to moderately severe
pain; fenoprofen calcium is used for the treatment of arthritis.
The agency finds that Mr. Marcus' conduct: (1) Created a risk of
injury to consumers; (2) potentially undermined the safety,
effectiveness, and quality of several drugs; and (3) otherwise
undermined the integrity of the drug approval and regulatory processes.
Mr. Marcus' conduct created a risk of injury to consumers by marketing
adulterated drugs. Mr. Marcus' conduct potentially undermined the
safety, effectiveness, and quality of several drugs by changing master
formulas and adding unapproved ingredients. Mr. Marcus' conduct
undermined the integrity of the drug approval and regulatory process by
leading FDA investigators to evaluate drugs different from those
marketed by Halsey and by providing to consumers drugs that had not
been approved by the FDA for distribution. Accordingly, the agency
considers the conduct underlying Mr. Marcus' conviction an extremely
unfavorable factor because Mr. Marcus' actions potentially undermined
the safety and effectiveness of drugs used for life-threatening or
serious conditions.
B. Nature and Extent of Management Participation in Any Offense
Mr. Marcus was the president and chief executive officer of Halsey.
Mr. Marcus directed Halsey employees to prepare false batch records.
Among other acts, Mr. Marcus caused a batch of quinidine gluconate 324-
mg tablets to be manufactured according to an unapproved formula and to
be introduced into interstate commerce. Therefore, the agency considers
the nature and extent of Mr. Marcus' participation an unfavorable
factor.
C. Nature and Extent of Voluntary Steps to Mitigate the Impact on the
Public
Mr. Marcus was willing to testify as a witness for the Government,
although the government did not call him. Accordingly, the agency
considers Mr. Marcus' cooperation a favorable factor.
D. Prior Convictions
The agency is unaware of any additional convictions.
III. Proposed Action and Notice of Opportunity for a Hearing
Mr. Marcus' willingness to cooperate is outweighed by his
leadership position within Halsey and, moreover, by the seriousness of
Mr. Marcus' conduct with respect to public safety and the integrity of
the drug approval process. Thus, based on the findings discussed above,
and in particular the seriousness of Mr. Marcus' conduct with respect
to the public safety and the integrity of the drug approval process,
FDA proposes to issue an order under section 306(b)(2)(B) of the act
debarring Mr. Marcus for a period of 5 years from providing services in
any capacity to a person that has an approved or pending drug product
application.
Under section 306(i) of the act and 21 CFR 10.50(c)(20), Mr. Marcus
may request a hearing on disputed issues of material fact. Thus, in
accordance with section 306 of the act and 21 CFR part 12, Mr. Marcus
is hereby given notice of an opportunity for a hearing to show why he
should not be debarred. If Mr. Marcus decides to seek a hearing, he
must file a written notice of appearance and request for hearing on or
before November 15, 1999. The procedures and requirements governing
formal evidentiary hearings as applied to debarments are contained in
21 CFR part 12 and section 306(i) of the act.
Mr. Marcus' failure to file a timely written notice of appearance
and request for hearing constitutes a waiver of his right to a hearing.
If Mr. Marcus does not request a hearing in the manner prescribed by
the regulations, the agency will not hold a hearing and will issue a
final debarment order as proposed in this notice.
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 requires a hearing. A hearing will
be denied if the data and information Mr. Marcus submits, even if
accurate, are insufficient to justify the factual determination urged.
If it conclusively appears from the face of the information and factual
analyses in Mr. Marcus' request for a hearing that there is no genuine
and substantial issue of fact that would preclude the order of
debarment, the Commissioner of Food and Drugs will deny Mr. Marcus'
request for a hearing and enter a final order of debarment. The facts
underlying Mr. Marcus' conviction are not at issue in this proceeding.
[[Page 55946]]
Mr. Marcus' request for a hearing, including any information or
factual analyses relied on to justify a hearing, must be identified
with Docket No. 99N-2674 and sent to the Dockets Management Branch
(address above). Mr. Marcus must file four copies of all submissions
pursuant to this notice of opportunity for hearing. The public
availability of information in these submissions is governed by 21 CFR
10.20(j). Publicly available submissions may be seen in the Dockets
Management Branch between 9 a.m. and 4 p.m., Monday through Friday.
This notice is issued under section 306 of the act and under
authority delegated to the Director of the Center for Drug Evaluation
and Research (21 CFR 5.99).
Dated: September 30, 1999.
Janet Woodcock,
Director, Center for Drug Evaluation and Research.
[FR Doc. 99-26938 Filed 10-14-99; 8:45 am]
BILLING CODE 4160-01-F