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GMP Consent Decrees Do Not Delimit Litigation and Financial Risks, Skadden, Arps Partner Stresses at FDLI Conference

Feb 6th, 2012

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Consent decrees provide a resolution between FDA and a pharmaceutical manufacturer of the cGMP compliance commitments and non-conformance penalties but do not forestall other types of litigation and generally have a long tail of related liabilities and financial repercussions, Skadden, Arps, Slate, Meagher & Flom Partner Jennifer Bragg stressed at the annual Food & Drug Law Institute (FDLI) Enforcement, Litigation and Compliance Conference in Washington, D.C. in December.

Prior to joining Skadden, Arps, where she provides compliance counseling and regulatory and litigation expertise, Bragg served in the Office of Chief Counsel (OCC) at FDA as Associate Counsel for Criminal Enforcement. At the agency, she was involved with investigation and prosecution, served as a liaison between OCC and the Office of Criminal Investigations, and helped make policy determinations about issues facing the agency in the criminal arena.

“When we think about consent decrees, we think of them as a resolution,” Bragg said. “And they certainly are a resolution in one capacity – they resolve an element of liability with respect to manufacturing problems that a company may be having.” However, she emphasized, “they are often really the beginning not the end of the story from the company’s perspective with respect to follow-on issues, problems and, really most importantly, liabilities that the company has.”

The Skadden, Arps attorney cautioned the FDLI conference attendees that “it is important to know what you are doing when you are signing a consent decree.”

She advised them to “make sure, as the legal folks in the company, that you are properly educating the rest of the business folks about what you are and aren’t getting from the consent decree. What you are getting is a resolution of the manufacturing issues vis-a-vis FDA.  What you are not getting is peace in other areas – either with the government, the plaintiffs’ bar or shareholders.”

Bragg added that “what you are also not getting is an end of the line with respect to your financial obligations.  A consent decree is really the beginning of the expense for a company. There is tremendous expense of course for getting your systems back in place, but there are other expenses as well.  And it is important to go into these things with your eyes wide open.”

In her presentation, Bragg reviewed how consent decrees are developed and some of their salient features, including disgorgement and financial penalties and compliance and monitoring provisions. She then went on to address the difficult rehabilitation pathway that firms tread once a consent decree is signed, and the liability and financial pitfalls that lie on it.

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See related IPQ stories:

Ranbaxy Consent Decree Fires FDA Warning Shot for Ex-US Pharma on Data Integrity

McNeil Consent Decree Reflects Previous Big Pharma Injunctions Minus Disgorgement

Deltex Injunction Follows History of Lab GMP and Unapproved Drug Compliance Problems

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