Who’da Thunk?

At the outset of the generic drug scandal uncovered in the late 1980’s FDA developed an administrative Application Integrity Policy.  At or about the same time, legislation (the Generic Drug Enforcement Act  [GDEA] of 1992), provided for debarment of individuals convicted of certain misdemeanor or felony offenses.  This meant that an individual that was convicted could be debarred permanently from providing directly or indirectly any services in any capacity to a firm in the pharmaceutical industry.  This is interpreted to include any service (including cutting the grass) if employed by a pharmaceutical company.

During the generic drug scandal, there were 22 criminal convictions of drug companies and 70 convictions of industry and FDA personnel as well as $50 million in fines levied against these organizations and individuals.    Eventually there were some 70 individual debarment actions relating to the shenanigans that occurred but to date no firm has been debarred under the provisions of the GDEA.

I thought it might be interesting to see what the number of debarments looked like over the last few years.


Number of Debarments








Either folks were very good in 2013 or the criminal activity conducted during the year has not yet resulted in debarment actions by the FDA.  Most of the debarments seen now are either for clinical investigators that have falsified study records, individuals that have engaged in the distribution of unapproved drugs or those that have perpetrated mail fraud or some other type of fraud.   One of those debarred was a chemist in FDA CDER’s New Drugs Division that was involved in insider trading using confidential inside agency information (we all remember that one – and I can say I was happy it was not an Office of Generic Drug chemist).  You must remember that debarment can be permanent or permissive (with a defined period of time usually from 5-10 years).

So even after the lessons of the past, there are some that continue try to beat the system, perform illegal activities or fraudulently create data for their own gain or the gain of others.  The saying that history has a tendency to repeat itself appears to be true when speaking of issues that could result in debarment.  We need to learn from the past before it is forgotten.  If you or you firm are interested in learning more about the generic drugs scandal, how and why it occurred and want to hear some hair-raising stories of that dark period in the generic drug program, please contact Joan Janulis at j.janulis@lachmanconsultants.com and she can arrange for a presentation that will present the facts of this scandal in a way that we hope will make individuals and companies have a new appreciation for doing things right.