Oakland-San Francisco Attorney Comments on FDA Litigation

Soon the FDA may seek criminal charges against drug company executives whose firms have illegally promoted drugs for unapproved uses. Prescribing a drug for an unapproved use-an act known as off-label use-is legal, but promoting it-an act known as off-label marketing-is not. Normally the FDA seeks monetary penalties against drug makers that engage in such marketing. Unfortunately these kinds of fines have shown to be ineffective in discouraging drug makers from engaging in off-label marketing. Earlier this month, according to newsinferno.com, Eric Blumberg, FDA litigation chief, told an industry audience that his agency was looking for cases to use what is known as the Park Doctrine as a tool to “change the corporate culture” of firms that have thus far shrugged off other penalties. In other words a corporate officer can now be liable for illegal corporate actions of which he should have now about or was responsible for preventing.

The Park Doctrine was established based on a case involving John Park, president of Acme Markets Inc. in 1970, a time when the company was cited for rodent infestations at a warehouse here. The FDA charged Park personally with violating sanitation laws after other rodent infestations were discovered despite a number of agency warnings. Park argued that as company president he was too far removed from warehouse supervision to be held responsible. The U.S. Supreme Court ultimately agreed with the FDA that Park, as president, was responsible for ensuring rodent-free warehouses. Park got a slap on the wrist–all he had to pay a $250 fine. Prosecutors now hope to enforce stiffer penalties under the doctrine, including up to a year in prison and $100,000 fines.

Legal experts believe, the Park Doctrine can be a very powerful tool, while, at the same time, it presents prosecutors with a number of hurdles. They believe the real challenge is finding a person who was in a position to know about and prevent the conduct that occurred. In addition the other challenge would be assuring that an off-label case would hold up in court, especially if it involved executives many levels higher than the departments that committed the illegal acts, as there are certain cases where the management is so far removed from the activity and will have had no direct knowledge of an issue. So it goes without saying, to hold an executive criminally liable is a significant policy step that needs to be handled with unwavering confidence and diligence. Here at the Brod Law Firm we believe bringing criminal charges against executives is a bold and significant deterrent, despite the complexity and inherent challenges of these kinds of cases.