[Federal Register Volume 77, Number 246 (Friday, December 21, 2012)]
[Notices]
[Pages 75636-75638]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-30709]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
[Docket No. FDA-2002-N-0106 (formerly 2002N-0291)]
Baldev Raj Bhutani; Denial of Hearing on Application for Special
Termination of Debarment
AGENCY: Food and Drug Administration, HHS.
ACTION: Notice.
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SUMMARY: The Food and Drug Administration (FDA) is denying Baldev Raj
Bhutani's application for special termination of debarment under the
Federal Food, Drug, and Cosmetic Act (FD&C Act). Mr. Bhutani has failed
to file with the Agency information and analyses sufficient to create a
basis for a hearing concerning this action.
DATES: This order is effective December 21, 2012.
ADDRESSES: Comments should reference Docket No. FDA-2002-N-0106 and be
sent to the Division of Dockets Management (HFA-305), Food and Drug
Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.
FOR FURTHER INFORMATION CONTACT: G. Matthew Warren, Office of
Scientific Integrity, Food and Drug Administration, 10903 New Hampshire
[[Page 75637]]
Ave., Silver Spring, MD 20993, 301-796-4613.
SUPPLEMENTARY INFORMATION:
I. Background
Mr. Bhutani is the former President and Treasurer of Alra
Laboratories, Inc. (Alra), a drug company. On February 12, 1996, in the
U.S. District Court for the Northern District of Illinois-Eastern
Division, Mr. Bhutani was found guilty of one count of conspiracy, a
Federal felony offense under 18 U.S.C. 371, and six other Federal
felonies related to violations under sections 301(a), (e), and (k) and
303(a)(2) of the FD&C Act (21 U.S.C. 331(a), (e), and (k) and
333(a)(2)). The basis for these convictions was Mr. Bhutani's conduct
surrounding his company's manufacture and distribution of the drug
products LACTULOSE Syrup and K + 10. According to the records of Mr.
Bhutani's criminal proceedings, he and Alra violated the FD&C Act by,
inter alia, including decomposed raw material in finished drug products
and deviating from approved manufacturing procedures by adding an
undocumented substance, sodium hydroxide, to drug products in an
unapproved manner. On October 12, 1999, Mr. Bhutani also pled guilty to
one count of wire fraud, a Federal felony under 18 U.S.C. 1343. On
February 15, 2000, the district court sentenced Mr. Bhutani for his
felony convictions. On December 2, 2004, pursuant to section 306(a)(2)
of the FD&C Act (21 U.S.C. 335a(a)(2)), FDA permanently debarred Mr.
Bhutani based on the foregoing Federal felony convictions (see 69 FR
70148 (Dec. 2, 2004)). As a result of his debarment, Mr. Bhutani may
not provide services in any capacity to a person with an approved or
pending drug product application under section 505, 512, or 802 of the
FD&C Act (21 U.S.C. 355, 360b, or 382), or under section 351 of the
Public Health Service Act (42 U.S.C. 262).
On August 18, 2010, Mr. Bhutani applied for special termination of
debarment under section 306(d)(4) of the FD&C Act. Under sections
306(d)(4)(C) and (D) of the FD&C Act, FDA may limit the period of
debarment of a permanently debarred individual if the Agency finds
that: (1) The debarred individual has provided substantial assistance
in the investigation or prosecution of offenses described in section
306(a) or (b) of the FD&C Act or relating to a matter under FDA's
jurisdiction; (2) termination of the debarment serves the interest of
justice; and (3) termination of the debarment does not threaten the
integrity of the drug approval process.
By a letter dated March 2, 2011, the Director of the Office of
Enforcement, Office of Regulatory Affairs (the Director) offered Mr.
Bhutani an opportunity for a regulatory hearing under 21 CFR part 16 on
a proposal to deny his application for special termination of
debarment. In the letter, the Director set forth his determination that
Mr. Bhutani's application did not demonstrate that he provided
substantial assistance in investigations or prosecutions of any
offenses related to any matter within the jurisdiction of FDA in
accordance with section 306(d)(4)(C) of the FD&C Act. In a submission
received April 7, 2011, Mr. Bhutani requested a hearing on the
Director's proposed denial of his application.
Under Sec. 16.26(a), FDA may deny a request for a hearing upon a
determination that ``no genuine and substantial issue of fact has been
raised by the material submitted.'' The Chief Scientist has reviewed
Mr. Bhutani's request for a hearing, as well as the materials submitted
in support of that request, and concludes that Mr. Bhutani's request
for a hearing fails to raise any genuine and substantial issues of fact
requiring a hearing and that his application for termination of
debarment does not satisfy any of the statutory grounds for
termination.
II. Arguments
In his application for termination of debarment, Mr. Bhutani argues
that FDA should terminate his debarment under section 306(d)(4) of the
FD&C Act for a number of reasons, including many focusing on the
fairness of the criminal convictions underlying his permanent debarment
under section 306(a)(2). Section 306(d) of the FD&C Act describes the
circumstances under which FDA may terminate an individual's debarment.
Under section 306(d)(3)(B)(i) of the FD&C Act, FDA must withdraw an
order debarring an individual upon reversal of the criminal conviction
or convictions forming the basis for his or her debarment. Section
306(d)(3)(B)(ii) of the FD&C Act provides that FDA must grant an
application for termination of debarment submitted by an individual
under 306(d)(1) ``if such termination serves the interests of justice
and adequately protects the integrity of the drug approval process,''
but only if the individual was subjected to permissive debarment under
section 306(b)(2)(B) or (b)(3). In fact, section 306(d)(1) of the FD&C
Act specifies that an individual permanently debarred may not submit
such an application. Finally, under section 306(d)(4) of the FD&C Act,
FDA may grant an individual's application for special termination of
debarment upon a finding that he or she ``has provided substantial
assistance in the investigations or prosecutions of offenses which are
described in [section 306(a) or (b)] or which relate to any matter
under the jurisdiction of [FDA]'' (see section 306(d)(4)(C)).
Inasmuch as FDA permanently debarred Mr. Bhutani under section
306(a)(2) of the FD&C Act, based on his Federal felony convictions for
conduct related to drug products, he is only eligible for termination
of debarment if: (1) The convictions underlying his debarment were
overturned (see section 306(d)(3)(B)(i)) or (2) he has provided
substantial assistance in the investigations or prosecutions of
offenses which are described in section 306(a) or (b) or which relate
to a matter within FDA's jurisdiction (see section 306(d)(4)(C)). Mr.
Bhutani has presented no reason to believe that a court has overturned
the felony convictions on which his permanent debarment was based. If a
court were to overturn his convictions based on the arguments Mr.
Bhutani now makes with respect to the fairness and validity of those
convictions, however, FDA would withdraw the order debarring him. The
sole remaining issue is whether Mr. Bhutani is eligible for special
termination of debarment under section 306(d)(4)(C) of the FD&C Act,
and to be so eligible he must have provided substantial assistance in
the sense contemplated by that provision.
In his application for termination of debarment and request for a
hearing, Mr. Bhutani argues that his debarment should be terminated on
the grounds that he provided substantial assistance and cooperated with
FDA in related investigations regarding Alra's compliance with FDA's
current good manufacturing practices (cGMP) regulations and offered his
full support to bring his own company, Alra, into cGMP compliance. Mr.
Bhutani asserts that he and Alra twice entered consent decrees with
FDA, both in 1991 and 1999, that required the correction of many of the
violations of the FD&C Act underlying his felony convictions. Mr.
Bhutani contends that, in accordance with those consent decrees, he
worked cooperatively with FDA to ensure that Alra was manufacturing and
distributing drugs in compliance with the FD&C Act. He also claims
that, in 1991, he provided some of the information to investigators
that led to his own criminal convictions and the criminal investigation
and prosecution of Alra and him.
[[Page 75638]]
Section 306(d)(4)(C) of the FD&C Act does not define ``substantial
assistance.'' When FDA has granted requests for special termination of
debarment, however, it has stated that the Agency ``considers a
determination by the [United States] Department of Justice concerning
the substantial assistance of a debarred individual conclusive in most
cases'' (see, e.g., 68 FR 58352 (October 9, 2003)). The U.S. Department
of Justice typically determines whether an individual has provided
substantial assistance in accordance with section 5K1.1 of the U.S.
Sentencing Guidelines (USSG) during the sentencing phase of a Federal
criminal trial. Section 5K1.1 states, ``Upon motion of the government
stating that the defendant has provided substantial assistance in the
investigation or prosecution of another person who has committed an
offense, the court may depart from the [sentencing] guidelines.'' Rule
35(b) of the Federal Rules of Criminal Procedure and 18 U.S.C. 3553(e)
also permit a court to depart from the guideline range or a statutory
minimum sentence upon motion by the government if the defendant
``provided substantial assistance in investigating or prosecuting
another person.'' The Generic Drug Enforcement Act (GDEA) amended the
FD&C Act to provide FDA with debarment authority. The language in
section 306(d)(4)(C) of the FD&C Act, which was included in the GDEA in
response to a request from the U.S. Department of Justice (see 138
Cong. Rec. S5614 (April 10, 1992) (statement of Sen. Kennedy)), clearly
mirrors the forgoing language applicable to Federal criminal
defendants.
Much of the conduct to which Mr. Bhutani points as the basis for
claiming that he has provided ``substantial assistance in
investigations or prosecutions'' of offenses within the jurisdiction of
FDA occurred before his sentencing in 2000. Mr. Bhutani, however, does
not provide any evidence that the U.S. Department of Justice moved for
a downward departure on the basis of a substantial assistance
determination under USSG section 5K1.1 when he was sentenced for the
convictions that triggered his permanent debarment. Furthermore, even
assuming that FDA could grant special termination of an individual's
debarment under section 306(d)(4)(C) of the FD&C Act if the government
has never moved a court for downward departure on the basis of
substantial assistance, the conduct described by Mr. Bhutani does not
suffice to show substantial assistance in the sense contemplated by
that statutory provision. Mr. Bhutani merely claims that he voluntarily
provided some information about the offenses he and his own company,
Alra, committed and that he cooperated with FDA in resolving
outstanding civil matters involving Alra and him on two separate
occasions.
Although section 306(d)(4)(C) of the FD&C Act does not explicitly
specify that the substantial assistance must be for the investigation
or prosecution of another person's offenses, the appropriate statutory
interpretation should be consistent with ``substantial assistance''
when used as a ``term of art'' \1\ in the context of criminal
proceedings. (See Sullivan v. Stroop, 496 U.S. 478, 483 (1990) (holding
that, ``where a phrase in a statute appears to have become a term of
art, * * * any attempt to break down the term into its constituent
words is not apt to illuminate its meaning'')). As noted above, USSG
section 5K1.1, Rule 35(b) of the Federal Rules of Criminal Procedure
and 18 U.S.C. 3553(e) permit a court to depart from the guideline range
or a statutory minimum sentence upon motion by the government if the
defendant ``provided substantial assistance in investigating or
prosecuting another person.'' FDA therefore construes ``substantial
assistance in the investigations or prosecutions of offenses'' to
require that the assistance be provided with respect to another
person's offenses.
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\1\ See United States v. Ellis, 527 F.3d. 203, 206 (1st Cir.
2008) (holding that ``substantial assistance,'' in the context of
original sentencing, is a term of art and that the meaning of the
term in USSG section 5K1.1 and Rule 35(b) is the same).
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As a result, under section 306(d)(4)(C) of the FD&C Act, the
information provided by Mr. Bhutani about his own offenses, and those
of his own company, very early in a criminal investigation does not
qualify as substantial assistance. Likewise, Mr. Bhutani's assertions
that he decided to resolve pending regulatory issues with FDA by
entering into consent agreements that required him and his company to
comply with the law do not show that he provided substantial assistance
in the investigation or prosecution of offenses of another person. In
fact, all Mr. Bhutani claims to have done was decide to take steps to
comply with the law after he had violated it. Such steps clearly do not
constitute substantial assistance in the investigation or prosecution
of offenses.
III. Conclusion
Therefore, the Chief Scientist, under authority delegated to him,
denies Mr. Bhutani's application for special termination of debarment
under section 306(d)(4)(C) of the FD&C Act. A hearing on this request
is not necessary because there are no genuine and substantial issues of
fact (see 21 CFR 16.26(a)).
Any person with an approved or pending drug product application who
knowingly uses the services of Mr. Bhutani, in any capacity during his
period of debarment, will be subject to civil money penalties (section
307(a)(6) of the FD&C Act (21 U.S.C. 335b(a)(6))). If Mr. Bhutani
provides services in any capacity to a person with an approved or
pending drug product application, he will be subject to civil money
penalties (section 307(a)(7) of the FD&C Act). In addition, FDA will
not accept or review any abbreviated new drug applications submitted by
or with the assistance of Mr. Bhutani during his period of debarment
(section 306(c)(1)(B) of the FD&C Act (21 U.S.C. 335a(c)(1)(B))).
Dated: December 10, 2012.
Jesse L. Goodman,
Chief Scientist.
[FR Doc. 2012-30709 Filed 12-20-12; 8:45 am]
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