Food and Drug Administration, HHS.
The Food and Drug Administration (FDA) is denying Ray Nathan's request for a hearing and is issuing an order under the Federal Food, Drug, and Cosmetic Act (the FD&C Act) permanently debarring Nathan from providing services in any capacity to a person that has an approved or pending drug product application. FDA bases this order on a finding that Nathan was convicted of a felony under Federal law for conduct relating to the development or approval, including the process for development or approval, of any drug product. Nathan has failed to file with the Agency information and analysis sufficient to create a basis for a hearing concerning this action.
This order is effective August 9, 2011.
Submit applications for termination of debarment to the Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852.Start Further Info
FOR FURTHER INFORMATION CONTACT:
G. Matthew Warren, Office of Scientific Integrity, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 32, rm. 4210, Silver Spring, MD 20993, 301-796-4613.End Further Info End Preamble Start Supplemental Information
On May 3, 2007, the U.S. District Court for the District of Massachusetts entered a criminal judgment against Nathan pursuant to his guilty plea for wire fraud under 18 U.S.C. 1343 and 1342. The basis for this conviction was Nathan's scheme to obtain from Lyne Laboratories (Lyne) a copy of a certificate of analysis for the drug PhosLo to determine how to manufacture a generic version of the drug. Nathan, a founder of a startup drug company named Argus Therapeutics (Argus), admitted that he created a fake email account for a senior employee at Nabi Biopharmaceuticals (Nabi), a Florida company. In an effort to obtain the certificate of analysis, he then sent an email from that account to an employee at Lyne, which manufactured PhosLo as a subcontractor for Nabi. When the Lyne employee requested a physical address to which the certificate should be sent, Nathan provided the address of another principal at Argus via email. Nathan subsequently sent a third email from the fraudulent email account to inquire about the status of his request.
Nathan is subject to debarment based on a finding, under section 306(a)(2)(A) of the FD&C Act (21 U.S.C. 335a(a)(2)(A)), that he was convicted of a felony under Federal law for conduct relating to the development or approval, including the process for development or approval, of any drug product. By a letter dated March 2, 2010, FDA served Nathan a notice proposing to permanently debar him from providing services in any capacity to a person having an approved or pending drug product application. In a letter dated April 6, 2010, Nathan requested a hearing on the proposal, and he submitted materials in support of that request on May 10, 2010. In his request for a hearing, Nathan acknowledges his conviction for wire fraud under Federal law, as alleged by FDA. However, he argues that the conduct underlying the conviction does not relate to the development or approval, including the Start Printed Page 48870process for development or approval, of any drug product or otherwise relate to the regulation of drugs under the FD&C Act.
We reviewed Nathan's request for a hearing, as well as the materials submitted in support of that request, and find that Nathan has not created a basis for a hearing because hearings will be granted only if there is a genuine and substantial issue of fact. Hearings will not be granted on issues of policy or law, on mere allegations, denials, or general descriptions of positions and contentions, or on data and information insufficient to justify the factual determination urged (see 21 CFR 12.24(b)).
The Chief Scientist and Deputy Commissioner for Science and Public Health has considered Nathan's arguments and concludes that they are unpersuasive and fail to raise a genuine and substantial issue of fact requiring a hearing.
In support of his hearing request, Nathan argues that the conduct underlying his conviction for wire fraud does not relate to the development or approval of a drug product or otherwise relate to the regulation of drugs under the FD&C Act. We need not address whether the conduct relates to the regulation of drugs under the FD&C Act because it clearly relates to the development of a drug product. Nathan argues that the “development or approval” of a drug product subject to FDA's premarket review begins with preclinical testing in animals and ends with postmarket studies. He contends that his actions in attempting to obtain a certificate of analysis for PhosLo do not relate to that process but instead relate to “pre-development” market research. Nathan maintains that he and Argus were attempting to evaluate production costs for a generic version of PhosLo and that Argus did not possess the funding necessary to pursue the steps that he asserts are associated with the actual development or approval of a drug product.
Nathan's narrow reading of section 306(a)(2)(A) is not convincing. In analyzing the scope of a statute, the first step is to “determine whether the language at issue has a plain and unambiguous meaning.” (Robinson v. Shell Oil Co., 519 U.S. 337, 340 (1997)) Statutory interpretation turns on “the language itself, the specific context in which that language is used, and the broader context of the statute as a whole” (id. at 341). Here, as FDA has held in denying a hearing in a debarment proceeding in the past, “[t]he statutory language, `relating to the development or approval * * *,' by definition encompasses all things that are logically connected to the development or approval of a drug product.” (59 FR 62399, December 5, 1994) As defined by “Merriam-Webster's Collegiate Dictionary,” “develop” means, inter alia, “to explore the possibilities of” and “to make suitable for commercial * * * purposes.” (see “Merriam-Webster's Collegiate Dictionary,” 10th Edition (2002)). Although Nathan argues that researching manufacturing techniques and the commercial viability of those techniques is not part of the drug development process, it is clearly a necessary step in that process. At the very least, such research relates to that development process for a drug product. Indeed, the information that Nathan attempted to obtain through his illegal conduct would have enabled Argus to begin compiling the chemistry, manufacturing, and controls section for an abbreviated new drug application (see 21 CFR 314.94(a)(9), 314.50(d)(1)). Debarring individuals who have been convicted of a felony for attempting to obtain such key information through fraudulent means is consistent with the clear remedial goals of section 306 of the FD&C Act.
III. Findings And Order
Therefore, the Chief Scientist and Deputy Commissioner for Science and Public Health, under section 306(a)(2)(A) of the FD&C Act and under authority delegated to him, finds that Nathan has been convicted a of a felony under Federal law for conduct relating to the development or approval, including the process for development or approval, of a drug product.
As a result of the foregoing findings, Nathan is permanently debarred from providing 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), effective August 9, 2011 (21 U.S.C. 335a(c)(1)(B) and (c)(2)(A)(ii) and 21 U.S.C. 321(dd)). Any person with an approved or pending drug product application who knowingly uses the services of Nathan, in any capacity during his period of debarment, will be subject to civil money penalties. If Nathan, during his period of debarment, provides services in any capacity to a person with an approved or pending drug product application, he will be subject to civil money penalties. In addition, FDA will not accept or review any abbreviated new drug applications submitted by or with the assistance of Nathan during his period of debarment.
Any application by Nathan for termination of debarment under section 306(d) of the FD&C Act (21 U.S.C. 335a(d)) should be identified with Docket No. FDA-2010-N-0064 and sent to the Division of Dockets Management (see ADDRESSES). All such submissions are to be filed in four copies. The public availability of information in these submissions is governed by 21 CFR 10.20(j). Publicly available submissions may be seen in the Division of Dockets Management between 9 a.m. and 4 p.m., Monday through Friday.Start Signature
Dated: July 7, 2011.
Jesse L. Goodman,
Chief Scientist and Deputy Commissioner for Science and Public Health.
[FR Doc. 2011-20181 Filed 8-8-11; 8:45 am]
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