INSIGHT REPORT
Vol 3  #7 
Summer 2000

INSIGHT REPORT

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Injunctions

or ...THREE EASY STEPS TO AVOID GETTING INJOINED

The most feared word coming out of the mouths of FDA is injunction. That is a word you never, let me repeat - NEVER want to hear.

Just recently the FDA has notified the public that they injoined a company in California. Probably the FDA's most famous injunction in recent history was the Abbott Laboratories Injunction late last year. It was hailed as one of the FDA's highlights of the 1999 regulatory year.

So what is an injunction and how does it affect a company?

An injunction is a legal action that the FDA can ask the courts to impose on a company. The injunction reiterates what the warning letter pointed out in legal jargon. Most of the time the FDA also asks the Courts to place a TR (Temporary Restraining) on the company as well. This would prevent the company from manufacturing and shipping products and sometimes even replacement parts or components.

What does a company do should the unthinkable happen to them?

Well, from my experience, it has not been the FDA's policy to shut companies down indefinitely. As a matter of fact the FDA needs companies to be actively running in order to survive as an agency. no companies - no need for the FDA, it's as simple as that. The FDA takes these drastic actions, and these are drastic actions (as indicated by the few number of injunctions and TRs that the FDA places on companies on an annual basis) if the FDA cannot get the companies to comply with their regulations on a voluntary basis.

If this was to happen to you, you would now have to negotiate with the agency as to how you intend to bring your operations into compliance with the regulations. This might include the recalling of all your products from the field or destroying your inventory of products -- and it would usually include a full review of your operations to bring those operations into QSR compliance. This would depend on the cause of actions that the FDA has found at the company.

You would now have to go into court, and this would require the services of an attorney, and you would have to show the FDA how you intend to comply with the injunction. Usually, this would include bringing a third party, i.e. expert consultant who would be recognized by the agency as having the ability to act as an expert in the QSR. This expert would be required to assist you in bringing your operations into compliance. Once the expert felt that you were now in compliance, the FDA would be notified that you are ready for another FDA inspection. This inspection would be used determine your compliance and to tell the courts to lift the TR.

Once the courts issue a TR and an injunction, you are now under the jurisdiction of the courts and not the FDA. Since the courts do not have the expertise to audit a company to assure compliance to the QSR the courts ask the FDA to provide them assistance in this area. Because of this, the FDA would bill you for any time that it spends in monitoring your compliance.

In two recent FDA injunctions, Abbott Laboratories, one of the largest in-vitro diagnostic companies in the world and Cal-Test Diagnostics, Inc., one of the smaller companies in the same field -- the FDA used the strategies of stopping the companies from shipping and requiring the use of third party experts to certify compliance to the QSR before they would be allowed to ship again. In the case of Cal-Test, they had to destroy their inventory. In the case of Abbott Labs, they were allowed to continue to sell some products that were medically necessary and were proprietary. Both companies signed consent decrees to these conditions.

The reason for the Abbott injunction was continued lack of GMP and QSR compliance involving process validations going back to 1993, according to an FDA Talk Paper of Nov. 1999.

The reason for Cal-Test's injunction was because they were previously warned not to ship product without 510(k) clearance or PMA approval. They continued to be in violation of the GMPs over a 4 year period.

As part of the consent decree, each company will have to have internal audits conducted by a third party twice a year and this report will be submitted to the FDA for their review.

As I explained, the FDA Talk Paper states that Cal-Test will reimburse the FDA for all costs related to supervision, inspections, record reviews, examinations and analyses conducted under the consent decree.

This is not the type of situation you would want to fall into, because:
 

You are no longer running your business, FDA is;

• Product shipments, if FDA will permit them at all, are delayed, awaiting a lot by lot third party (outside consultant) certification and FDA release to distribution;
• At the very same time your ability to generate income is compromised, third party certification and FDA supervision costs sometimes force even very profitable companies to operate at a deficit. Marginally profitable companies soon fold under this cash flow burden;
• If your company does successfully survive this regulatory nightmare, its corporate culture will be significantly altered, and not always for the better or to your liking.

The way to avoid this situation is to have a good understanding: -

• of the FDA regulations that pertain to your company. 
• that the issuance of a warning letter is serious business and corrective actions have to be addressed and maintained. The FDA must react to lack of compliance after such a warning. The next step is an injunction. 
• that it is a mistake to become arrogant and think that the FDA will not catch up with you.
   

The FDA has a job to do. Sometimes, even many times, we may not like how they do their job but they are the regulators and we are the players. You must know the rules to play the game. If you try to break them you may get away with it for a short period of time but it will eventually catch up to you, especially when you are involved with competitors who would like to nothing better than to see you fall.

Next Month’s Insight Report –

         The next Insight Report Vol. 3 #8

• A QSIT update

If you have any comments on these INSIGHTS we hope that you let us hear them. If you have any of your own INSIGHTS that you feel would be of value to other companies, we would be pleased to hear from you and to discuss them with you and if you allow, we would even put them up on this site for others to learn from.
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