In the last two years, the Department of Justice (DOJ) Consumer Protection Branch (CPB)—responsible for investigating and litigating civil and criminal violations of the Food, Drug, and Cosmetic Act (FDCA) and the Controlled Substances Act (CSA)—has nearly doubled its number of attorneys and more than tripled its support staff of law clerks, paralegals, and investigators to battle fraud and deception in the drug and dietary supplement industries.

While FDA that administers FDCA and the U.S. Drug Enforcement Administration (DEA) that oversees the CSA have their own enforcement tools, CPB gets involved if those tools fail to bring a bad actor into compliance.

The public’s safety depends on voluntary compliance up and down the product supply chain

At the Food and Drug Law Institute (FDLI) Enforcement, Litigation, and Compliance Conference held in Washington, DC in December 2019, Deputy Assistant Attorney General for the DOJ’s CPB David Morrell reviewed highlights of the CPB’s enforcement work from 2019 and discussed how that work portends future action.

He commented that the FDCA and CSA “are, at heart, public health statutes and not just laws to punish wrongdoing. The public’s safety depends on voluntary compliance up and down the product supply chain. And we know that the vast majority of individuals and entities operating in the food and medical product sectors share a commitment to voluntary compliance in developing and marketing life-saving and life-improving products,” but there are also those “who cut corners and at times engage in outright fraud.”

Morrell explained that the CPB advances its work using both criminal and civil tools, including criminal enforcement actions. It also defends consumer protection agencies—including the FDA—in federal litigation. “In all of our work, we collaborate closely with our agency partners, law-enforcement investigators, and colleagues in the U.S. Attorneys’ Offices.”

In his presentation, Morrell reviewed the five main areas CPB focused its efforts on in 2019:

  • Dietary supplement fraud
  • The prescription opioid crisis
  • Regulatory deception
  • Sterile compounding violations
  • Vaping

At the conclusion of his talk he discussed new tools and collaboration efforts the branch has been engaging in and plans for 2020.

“Our work in each area is directed at addressing and preventing consumer harm,” Morrell emphasized. “Sometimes this follows from an incident of consumer harm. Other times, our workflows from repeated regulatory violations that are likely to cause harm.”

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Dietary Supplement Market Growing Rapidly

High-profile cases in 2019 in the dietary supplement area included successful prosecution of individuals in a fraud and smuggling scheme to sell mislabeled dietary supplements containing hidden synthetic stimulants, and another case where company personnel admitted to misleading customers about the source and nature of their ingredients—claiming they derived from natural plant extracts when they actually contained a synthetic stimulant manufactured in a Chinese chemical factory.  Some of these materials were imported into the U.S. using false certificates of analysis and labeling.

Morrell pointed out that three out of every four American consumers take a dietary supplement on a regular basis. In older Americans, the rate rises to four out of five. What was once a $4 billion industry comprising about 4,000 unique products, is now an industry worth more than $130 billion, with more than 50,000 different products available to consumers. “In just a few years, the supplement industry will be worth hundreds of billions of dollars,” he predicted.

Former FDA Commissioner Scott Gottlieb announced earlier last year a new plan for modernizing FDA’s dietary supplement regulation and oversight.  This followed the creation just three years ago of FDA’s Office of Dietary Supplement Programs. The DOJ also has recognized the need for greater action against abuses in the dietary supplement space. “It is just common sense that there will be fraud where you have a combination of high profits, developing science, imported ingredients, and limited oversight,” Morrell said.

In 2019, he noted, the Consumer Protection Branch secured criminal convictions against 15 individuals and corporations for defrauding consumers about the ingredients in and uses of their dietary supplements.  Concluding a prosecution that “drew much attention when initiated,” the CPB secured felony guilty pleas from the five leading defendants and two corporate defendants in the USPlabs case.

[Editor’s Note: USPlabs is in no way affiliated with USP, the United States Pharmacopeia.]

Dallas-based dietary supplement company USPlabs management pleaded guilty in March 2019 to conspiracy to introduce misbranded food into interstate commerce and introducing misbranded food into interstate commerce with the intent to defraud or mislead.

The misbranding charges relate in part to a product called OxyElite Pro, which was recalled in 2013 in the wake of an investigation by the FDA into whether the supplement caused liver injuries in consumers. All the defendants were charged in a 2015 indictment returned by a Dallas federal grand jury in the Northern District of Texas.

The defendants, who collectively agreed to pay $60 million in forfeiture and face years of imprisonment, each admitted to participating in a conspiracy to import dietary supplement ingredients using false certificates of analysis and labeling. They also admitted to misleading customers about the source and nature of their ingredients—claiming they derived from natural plant extracts when they actually contained a synthetic stimulant manufactured in a Chinese chemical factory.

By rooting out baseless efficacy claims and undeclared ingredients, we hope that our work will benefit the many legitimate supplement manufacturers who are complying with the law and, most importantly, will keep consumers safe

Similarly, CPB successfully prosecuted three Chinese nationals and two companies in connection with another fraud and smuggling scheme to sell mislabeled dietary supplements containing hidden synthetic stimulants.  And it recently indicted six individuals and two companies for allegedly selling dietary supplements that contained ingredients—including anabolic steroids—they knew were dangerous or illegal. “That indictment is notable,” Morrell said, “because it contains the first-ever charges under the Designer Anabolic Steroid Control Act of 2014.”

On top of these criminal actions, CPB also used its civil tools to enjoin various supplement manufacturers and distributors who were making unapproved new drug claims about their products and failing to adhere to current good manufacturing practices (CGMPs), which are essential to ensuring that supplements contain what is promised and are not adulterated. “CPB shares FDA’s concern that the making of unapproved new drug claims risks causing consumers to forego approved and more appropriate medical treatments, leading to predictable patient harm,” Morrell emphasized.

He predicted that DoJ will increase its resources devoted to investigating and litigating in this area. CPB will add six new attorneys to focus on such efforts and will coordinate its work with FDA and other partners—including, notably, the Department of Defense (DoD), which is concerned about servicemembers’ use of adulterated supplements.

“By rooting out baseless efficacy claims and undeclared ingredients, we hope that our work will benefit the many legitimate supplement manufacturers who are complying with the law and, most importantly, will keep consumers safe,” he concluded.

The Prescription Opioid Crisis Continues

“No review of enforcement in the food and drug world would be complete without a discussion of the department’s broad efforts to stem the prescription opioid crisis, which unfortunately still has a stranglehold on this country,” Morrell stressed. “As a leading component of the department’s Prescription Interdiction and Litigation—or PIL—Task Force, the Consumer Protection Branch is at the center of those efforts, advancing cases against opioid manufacturers, distributors, and chain pharmacies.”

Over the summer, global consumer goods conglomerate Reckitt Benckiser Group agreed to pay $1.4 billion to resolve its criminal and civil liability related to a federal investigation into the marketing of the opioid addiction treatment drug, Suboxone. The resolution was the largest recovery by the United States in a case concerning an opioid drug.

CPB also indicted Reckitt Benckiser Group’s former subsidiary, Indivior Inc., for allegedly engaging in an illicit nationwide scheme to increase prescriptions of Suboxone. The trial for that case is set for May 2020.

In addition to criminal actions, CPB also routinely deployed a new tool in 2019—CSA civil injunctions—to take quick action to stop the illegal flow of prescription opioids. Dusting off a statutory provision that went virtually unused for 40 years, CPB sought and obtained injunctions to stop the unlawful prescribing and dispensing of controlled substances. Consistent with department policy it did much of this work in parallel with active criminal investigations and prosecutions.

When DEA data showed that two pharmacies in a small Tennessee town were dispensing enough opioids to supply a city, CPB successfully enjoined the two pharmacies, their majority owner, and three pharmacists from continuing to dispense controlled substances.

The complaint also sought monetary penalties under the CSA and damages under the False Claims Act, and it was followed by criminal action against one of the pharmacists. Morrell said that CPB and its partners plan to bring “many similar actions against a range of individuals and entities” in 2020.

In the second part of this series, we continue with David Morrell’s comments on:

  • Attempts to deceive FDA: prosecuted
  • Compounding pharmacies
  • Investigations into injuries and deaths from vaping
  • New tools for law enforcement
  • The importance of company compliance programs

David Morrell is Deputy Assistant Attorney General for the Consumer Protection Branch at the United States Department of Justice. Before joining DOJ, he worked in the White House Counsel’s office where he served as Associate Counsel and Special Assistant to the President. There, Mr. Morrell advised senior White House officials on a range of topics, collaborated on legal issues with agencies throughout the Executive Branch, and worked extensively with the Department of Justice including on significant litigation matters. Prior to joining the White House, Mr. Morrell was in private practice at Jones Day and he clerked on the U.S. Court of Appeals for the 5th Circuit for then-Chief Judge Edith Jones, and on the U.S. Supreme Court for Justice Clarence Thomas. He graduated from Yale Law School and from Hillsdale College.

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