On February 3, 2014, FDA issued a Direct Final Rule to adjust for inflation the maximum civil money penalty (“CMP”) amounts it can seek for certain violations of the Food, Drug, and Cosmetics Act (“FDCA”). The direct final rule revises the current list of statutory monetary penalties set forth 21 C.F.R. Part 17, including for violations relating to prescription drug marketing practices, medical devices, and direct-to-consumer advertising for approved drugs or biological products, among others.
The FDA is required to adjust the CMP at least once every four years, pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990. The last adjustment was made in March 2009. The direct final rule increases the maximum CMP amount anywhere from $1,000 to $25,000 per individual, $10,000 to $25,000 per violation, and $50,000 to $850,000 for multiple violations being adjudicated in a single proceeding.
Since 2009, FDA has used its CMPs authority sparingly; but when it does issue CMPs, FDA really “goes for the gold.” For example, in December 2013, FDA reached a $1.25 million settlement involving allegations that the company manufactured and distributed misbranded and adulterated sterilization monitoring products. Prior to that, the FDA entered into a $1 million settlement in February 2012 resolving allegations that the company distributed unapproved medical devices. With this direct final rule, the FDA will likely continue to seek higher CMP amounts for egregious violations of the FDCA.
FDA’s rule was published as a direct final rule, which means that the agency does not expect there to be any significant adverse comments. The FDA, however, is allowing comments to be submitted until April 21, 2014. If no substantial comments are received, the rule will become effective June 18, 2014.