Document ID: FDA-2010-N-0475-0001
Agency: fda
Document Type: Notice
Title: Final Debarment Order: Daphne I. Panagotacos; Denial of Hearing
Posted Date: 2012-05-09T04:00Z

[Federal Register Volume 77, Number 90 (Wednesday, May 9, 2012)]
[Notices]
[Pages 27236-27238]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-11112]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2010-N-0475]

Daphne I. Panagotacos; Denial of Hearing; Final Debarment Order

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA) is denying a request 
for a hearing submitted by Daphne I. Panagotacos and is issuing an 
order under the Federal Food, Drug, and Cosmetic Act (the FD&C Act) 
debarring Panagotacos for 5 years 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 Panagotacos was 
convicted of a misdemeanor under Federal law for conduct relating to 
the regulation of a drug product under the FD&C Act and that the type 
of conduct underlying the conviction undermines the process for the 
regulation of drugs. In determining the appropriateness and period of 
Panagotacos's debarment, FDA has considered the relevant factors listed 
in the FD&C Act. Panagotacos has failed to file with the Agency 
information and analyses sufficient to create a basis for a hearing 
concerning this action.

DATES: The order is effective May 9, 2012.

ADDRESSES: 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.

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.

SUPPLEMENTARY INFORMATION:

[[Page 27237]]

I. Background

    On December 18, 2007, the United States District Court for the 
Central District of California entered judgment against Panagotacos, a 
physician, who pled guilty to a misdemeanor under the FD&C Act. 
Specifically, Panagotacos pled guilty to receiving in interstate 
commerce and delivering a misbranded drug in violation of sections 
301(c), 502(f) and 303(a)(1) of the FD&C Act (21 U.S.C. 331(c), 352(f), 
333(a)(1)). The basis for this conviction was conduct surrounding her 
injection of patients with TRI-toxin, an unapproved drug product 
purported to be botulinum toxin type A and distributed by Toxic 
Research International, Inc. (TRI), in Arizona. According to the 
records of the criminal proceedings, from January 2004 until November 
2004, Panagotacos ordered 19 vials of TRI-toxin for her practice in 
California and used the TRI-toxin on herself, her employees, and her 
patients. As alleged in the criminal information to which she pled 
guilty, the TRI-toxin was misbranded in that it failed to bear adequate 
directions for use under section 502(f) of the FD&C Act.
    Panagotacos is subject to debarment based on a finding, under 
section 306(b)(2)(B)(i) of the FD&C Act (21 U.S.C. 335a(b)(2)(B)(i)), 
(1) that she was convicted of a misdemeanor under Federal law relating 
to the regulation of a drug product under the FD&C Act and (2) that the 
type of conduct underlying the conviction undermines the process for 
the regulation of drugs. By letters dated February 22, 2011, and March 
14, 2011, FDA notified Panagotacos of a proposal to debar her for 5 
years from providing services in any capacity to a person having an 
approved or pending drug product application. In a letter dated April 
11, 2011, through counsel, Panagotacos requested a hearing on the 
proposal. In her request for a hearing, Panagotacos acknowledges the 
fact of her conviction under Federal law, as alleged by FDA. However, 
she argues that the conduct underlying her conviction does not warrant 
debarment.
    Hearings are 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 Panagotacos's arguments and concludes that they 
are unpersuasive and fail to raise a genuine and substantial issue of 
fact requiring a hearing.

II. Arguments

    In support of her hearing request, Panagotacos first disputes the 
finding in the proposal to debar her that her misdemeanor conviction 
was based on conduct related to the regulation of drug products under 
the FD&C Act and that the conduct underlying her conviction undermined 
the process for the regulation of drugs. In support of this argument, 
Panagotacos asserts that her conviction under the FD&C Act was strict 
liability and that, based on assurances from TRI, she acted on the good 
faith belief that that TRI-toxin was a permissible generic form of 
BOTOX/BOTOX Cosmetic (BOTOX). As noted in this document, however, 
Panagotacos admitted, during her criminal proceedings, to receiving a 
misbranded drug in interstate commerce and delivering it to patients in 
violation of sections 301(c), 502(f) and 303(a)(1) of the FD&C Act.
    Her conduct clearly related to the regulation of drug products 
under the FD&C Act because it was in direct violation of the FD&C Act's 
requirements for drug products. The conduct also undermined the process 
for the regulation of drugs in that it permitted an unapproved drug, 
TRI-toxin, to be administered to patients. With respect to 
Panagotacos's assertion that her offense was strict liability, section 
306(b)(2)(B)(i) of the FD&C Act specifically provides for the debarment 
of individuals convicted of Federal misdemeanors related to the 
regulation of drug products under the FD&C Act. Given that a 
misdemeanor violation of the FD&C Act itself is a strict liability 
offense for which lack of criminal intent is no defense, criminal 
intent is not required to subject an individual to debarment under 
section 306(b)(2)(B)(i). Accordingly, Panagotacos is subject to 
debarment under section 306(b)(2)(B)(i).
    Panagotacos next challenges the manner in which the proposal to 
debar applied the considerations under section 306(c)(3) of the FD&C 
Act in determining the appropriateness and period of her debarment. 
Section 306(c)(3) of the FD&C Act explicitly requires FDA to consider, 
``where applicable,'' certain factors ``[i]n determining the 
appropriateness and the period of debarment'' for any permissive 
debarment. The proposal to debar Panagotacos set forth four applicable 
considerations under section 306(c)(3): (1) The nature and seriousness 
of her offense under section 306(c)(3)(A); (2) the nature and extent of 
management participation in the offense under section 306(c)(3)(B); (3) 
the nature and extent of voluntary steps taken to mitigate the impact 
on the public under section 306(c)(3)(C); and (4) prior convictions 
involving matters within the jurisdiction of FDA under section 
306(c)(3)(F). In the proposal, FDA found that the first two 
considerations weigh in favor of debarring Panagotacos and noted that 
the third and fourth considerations would be treated as favorable 
factors for Panagotacos. In making all of its findings under section 
306(c)(3), FDA relied on records from Panagotacos's criminal 
proceedings.
    Panagotacos first challenges the finding in the proposal to debar 
her that the nature and seriousness of her offense, under section 
306(c)(3)(A) of the FD&C Act, weigh in favor of debarment. She argues 
that ``[t]he nature and seriousness of the offense are in fact a 
favorable factor based on [her] diligent efforts to ascertain the truth 
and the plain evidence that she herself was a victim of fraud.'' 
Panagotacos's characterization of the conduct underlying her conviction 
is refuted by the criminal record. Her admissions during her criminal 
proceedings do not demonstrate that the nature and seriousness of her 
offense is a favorable factor because she made ``diligent efforts to 
ascertain the truth'' or because TRI made her a ``victim of fraud.''
    The charge in the information to which Panagotacos pled guilty 
alleged that she ordered a misbranded drug from a source outside of her 
own state and used it on her patients. In a sentencing memorandum 
submitted to the criminal court on her behalf, Panagotacos also stated 
that she ``and her staff talked to representatives from TRI and were 
told that [TRI-toxin] was a safe generic form of [BOTOX] and that FDA 
approval was pending''. In the same sentencing memorandum, she also 
admitted to trying TRI-toxin on herself and on her staff and family to 
determine it was safe and effective before using it on patients. In a 
letter submitted in support of that memorandum, she further stated that 
``the label on the bottle [of TRI-toxin] said that it was for research 
purposes only.'' In light of Panagotacos's admissions during her 
criminal proceedings that she knew TRI-toxin was an unapproved drug 
warranting further testing before she used it on her regular patients, 
the Chief Scientist and Deputy Commissioner for Science and Public 
Health finds, consistent with the proposal to debar, that the nature 
and seriousness of her offense weigh in favor of debarment. 
Panagotacos's mere assertion that TRI provided different information 
and convinced her that TRI-toxin was a

[[Page 27238]]

permissible generic form of BOTOX does not create a genuine and 
substantial issue of fact.
    In her request for a hearing, Panagotacos further emphasizes that 
she not only stopped using TRI-toxin upon learning that TRI was being 
prosecuted for conduct related to its marketing of the drug product, 
she also took ``the extraordinary step'' of coming ``forward 
proactively to assist the investigation by providing information'' 
before she was contacted by investigators. Indeed, the criminal record 
discloses that she sent a letter to the prosecutor in which she stated 
that TRI had convinced her to purchase and use TRI-toxin on her 
patients but that she had stopped using the drug and was returning the 
product to TRI. She also offered in the letter to provide information 
to the prosecutor. In the Agency's proposal to debar, however, FDA took 
into account the circumstances Panagotacos now cites and considered her 
cooperation with government investigators as a favorable factor under 
section 306(c)(3)(C) of the FD&C Act. Therefore, her arguments 
affirming the circumstances and extent of her cooperation do not create 
a genuine and substantial issue of fact suitable for a hearing.
    Panagotacos next challenges the manner in which FDA weighed the 
four factors that the Agency considered in the proposal to debar. She 
notes that, although FDA counted two of the four factors in her favor, 
it appears that the Agency did not take them into account because the 
proposal to debar found that she should be debarred for the maximum 
period of 5 years. Consistent with the proposal to debar, however, 
Panagotacos pled guilty to a misdemeanor under the FD&C Act for conduct 
related to her knowing purchase and use of an unapproved drug on her 
patients. She did so as a licensed physician with her own medical 
practice and thus held a position of authority relative to the offense 
of which she was convicted. The considerations in sections 306(c)(3)(A) 
and (B) of the FD&C Act weigh in favor of debarring Panagotacos for a 
maximum period of 5 years. Although the record establishes that 
Panagotacos took voluntary steps to mitigate the effect on the public 
health once she learned that there was a criminal investigation 
involving the company from which she purchased the unapproved drug (see 
section 306(c)(3)(C)), and although she appears to have no previous 
criminal convictions related to matters within the jurisdiction of FDA 
(see section 306(c)(3)(F)), these considerations do not counter to a 
sufficient degree the conduct underlying her misdemeanor conviction to 
warrant decreasing the period of debarment from 5 years.

III. Findings and Order

    Therefore, the Chief Scientist and Deputy Commissioner for Science 
and Public Health, under section 306(b)(2)(B)(i) of the FD&C Act and 
under authority delegated to him, finds that Panagotacos has been 
convicted of a misdemeanor under Federal law for conduct relating to 
the development or approval of a drug product or otherwise relating to 
the regulation of a drug product under the FD&C Act and that the 
conduct underlying the conviction undermines the regulation of drugs. 
The Chief Scientist has considered the relevant factors listed in 
section 306(c)(3) of the FD&C Act and determined that a debarment of 5 
years is appropriate.
    As a result of the foregoing findings, Panagotacos is debarred for 
5 years 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 May 9, 2012 
(see 21 U.S.C. 335a(c)(1)(B) and (c)(2)(A)(iii) and 21 U.S.C. 321(dd)). 
Any person with an approved, or pending, drug product application who 
knowingly uses the services of Panagotacos, in any capacity during her 
period of debarment, will be subject to civil money penalties. If 
Panagotacos, during her period of debarment, provides services in any 
capacity to a person with an approved or pending drug product 
application, she 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 Panagotacos during her period of 
debarment.
    Any application by Panagotacos for termination of debarment under 
section 306(d) of the FD&C Act should be identified with Docket No. 
FDA-2010-N-0475 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. 
Persons with access to the Internet may obtain documents in the Docket 
at http://www.regulations.gov/.

    Dated: April 16, 2012.
Jesse L. Goodman,
Chief Scientist and Deputy Commissioner for Science and Public Health.
[FR Doc. 2012-11112 Filed 5-8-12; 8:45 am]
BILLING CODE 4160-01-P