Document ID: FDA-2021-N-0105-0019
Agency: fda
Document Type: Notice
Title: Shaun Thaxter; Denial of Hearing; Final Debarment Order
Posted Date: 2023-02-27T05:00Z

[Federal Register Volume 88, Number 38 (Monday, February 27, 2023)]
[Notices]
[Pages 12375-12381]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-03941]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2021-N-0105]

Shaun Thaxter; 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 or the Agency) is 
denying a request for a hearing submitted by Shaun Thaxter (Thaxter) 
and is issuing an order under the Federal Food, Drug, and Cosmetic Act 
(FD&C Act) debarring Thaxter 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 Thaxter 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 
Thaxter's debarment, FDA has considered the applicable factors listed 
in the FD&C Act. Thaxter 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 applicable February 27, 2023.

ADDRESSES: Any application for termination of debarment by Thaxter 
under section 306(d) of the FD&C Act (21 U.S.C. 335a(d)) (application) 
may be submitted as follows:

Electronic Submissions

     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments. An application 
submitted electronically, including attachments, to https://www.regulations.gov will be posted to the docket unchanged. Because 
your application will be made public, you are solely responsible for 
ensuring that your application does not include any confidential 
information that you or a third party may not wish to be posted, such 
as medical information, your or anyone else's Social Security number, 
or confidential business information, such as a manufacturing process. 
Please note that if you include your name, contact information, or 
other information that identifies you in the body of your application, 
that information will be posted on https://www.regulations.gov.
     If you want to submit an application with confidential 
information that you do not wish to be made available to the public, 
submit the application as a written/paper submission and in the manner 
detailed (see ``Written/Paper Submissions'' and ``Instructions'').

Written/Paper Submissions

    Submit written/paper submissions as follows:
     Mail/Hand Delivery/Courier (for written/paper 
submissions): Dockets Management Staff (HFA-305), Food and Drug 
Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.
     For a written/paper application submitted to the Dockets 
Management Staff, FDA will post your application, as well as any 
attachments, except for information submitted, marked and identified, 
as confidential, if submitted as detailed in ``Instructions.''
    Instructions: All applications must include the Docket No. FDA-
2021-N-0105. Received applications will be placed in the docket and, 
except for those submitted as ``Confidential Submissions,'' publicly 
viewable at https://www.regulations.gov or at the Dockets Management 
Staff between 9 a.m. and 4 p.m., Monday through Friday, 240-402-7500.
     Confidential Submissions--To submit an application with 
confidential information that you do not wish to be made publicly 
available, submit your application only as a written/paper submission. 
You should submit two copies total. One copy will include the 
information you claim to be confidential with a heading or cover note 
that states ``THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.'' The 
Agency will review this copy, including the claimed confidential 
information, in its consideration of your application. The second copy, 
which will have the claimed confidential information redacted/blacked 
out, will be available for public viewing and posted on https://www.regulations.gov. Submit both copies to the Dockets Management 
Staff. If you do not wish your name and contact information to be made 
publicly available, you can provide this information on the cover sheet 
and not in the body of your application and you must identify this 
information as ``confidential.'' Any information marked as 
``confidential'' will not be disclosed except in accordance with 21 CFR 
10.20 and other applicable disclosure law. For more information about 
FDA's posting of comments to public dockets, see 80 FR 56469, September 
18, 2015, or access the information at: https://www.govinfo.gov/content/pkg/FR-2015-09-18/pdf/2015-23389.pdf.
    Docket: For access to the docket, go to https://www.regulations.gov 
and insert the docket number, found in brackets in the heading of this 
document, into the ``Search'' box and follow the prompts and/or go to 
the Dockets Management Staff, 5630 Fishers Lane, Rm. 1061, Rockville, 
MD 20852 between 9 a.m. and 4 p.m., Monday through Friday, 240-402-
7500. Publicly available submissions may be seen in the docket.

[[Page 12376]]

FOR FURTHER INFORMATION CONTACT: Rachael Vieder Linowes, Office of 
Scientific Integrity, Food and Drug Administration, 10903 New Hampshire 
Ave., Bldg. 1, Rm. 4206, Silver Spring, MD 20993, 240-402-5931.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 306(b)(2)(B)(i)(I) of the FD&C Act permits FDA to debar an 
individual if FDA finds that (1) the individual has been convicted of a 
misdemeanor under Federal law ``for conduct relating to the development 
or approval, including the process for development or approval, of any 
drug product or otherwise relating to the regulation of drug products'' 
under the FD&C Act and (2) the type of conduct that served as the basis 
for the conviction undermines the process for the regulation of drugs.
    On June 30, 2020, in the U.S. District Court for the Western 
District of Virginia, Thaxter pled guilty to a misdemeanor violation of 
the FD&C Act. Specifically, he pled guilty to causing the introduction 
or delivery for introduction of a misbranded drug into interstate 
commerce in violation of sections 301(a), 303(a)(1), and 502(a) of the 
FD&C Act (21 U.S.C. 331(a), 333(a)(1) and 352(a)). In the plea 
agreement pursuant to which Thaxter pled guilty, he agreed that ``all 
the facts set forth in the Information [filed by the Federal government 
on the same day] are true and correct and provide the Court with a 
sufficient factual basis to support [his] plea.'' The Information 
provided that, at the time of the conduct underlying his conviction, 
Thaxter was ``the highest-ranking executive of Reckitt Benckiser 
Pharmaceuticals Inc. (`RBP').'' \1\ During that time, according to the 
Information, RBP's Medical Affairs Manager provided false or misleading 
analysis and charts to the Massachusetts Medicaid program (MassHealth), 
as a means of persuading MassHealth to reimburse patients for a drug 
named Suboxone Film, which RBP marketed.
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    \1\ As noted in the Information, ``on or about December 23, 
2014, RBP was renamed Indivior, Inc, and became a subsidiary of 
Indivior PLC. After on or about December 23, 2014, Thaxter was Chief 
Executive Officer of Indivior PLC.''
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    As framed by the Information, the false and misleading data and 
analysis provided to MassHealth--related to the unintended pediatric 
exposure rates for Suboxone Film relative to similar tablet products--
constituted ``labeling'' for the drug under section 201(m) of the FD&C 
Act (21 U.S.C. 321(m)) and thus misbranded the drug under section 
502(a). As discussed further below, in pleading guilty pursuant to the 
Information, Thaxter conceded that he was a responsible corporate 
officer at RBP that ``failed to prevent and promptly correct the 
distribution of [] false and misleading unintended pediatric exposure 
data and marketing claims to MassHealth'' and ``caused the introduction 
and delivery for introduction into interstate commerce of . . . a drug 
[(Suboxone Film)] that was misbranded in that the drug's labeling was 
false and misleading'' (see United States v. Park, 421 U.S. 658, 673-74 
(1975)). On October 22, 2020, the court entered a criminal judgment 
against Thaxter and sentenced him to 6 months in Federal prison.
    By letter dated March 18, 2021, FDA's Office of Regulatory Affairs 
(ORA) notified Thaxter of its proposal to debar him for 5 years from 
providing services in any capacity to a person having an approved or 
pending drug product application and provided him with an opportunity 
to request a hearing on the proposal. ORA found that Thaxter is subject 
to debarment under section 306(b)(2)(B)(i)(I) of the FD&C Act on the 
basis of his misdemeanor conviction under Federal law for conduct both 
relating to drug products under the FD&C Act and undermining the 
Agency's process for regulating drugs. The proposal also outlined 
findings concerning the factors ORA considered to be applicable in 
determining the appropriateness and period of debarment, as provided in 
section 306(c)(3) of the FD&C Act. ORA found that a 5-year period of 
debarment is appropriate. Specifically, ORA found that the nature and 
seriousness of the offense and the nature and extent of voluntary steps 
to mitigate the effect on the public are unfavorable factors for 
Thaxter. ORA stated that it viewed the absence of prior convictions 
involving matters within FDA's jurisdiction as a favorable factor. ORA 
concluded that ``the facts supporting the unfavorable factors outweigh 
those supporting the favorable factor, and therefore warrant the 
imposition of a five-year period of debarment.''
    By letter dated April 28, 2021, through counsel, Thaxter requested 
a hearing on ORA's proposal to debar him. On May 28, 2021, he submitted 
a ``Memorandum of Facts and Arguments in Support of Request for 
Hearing'' (Memorandum). In this Memorandum, Thaxter makes legal, 
factual, and policy-based arguments regarding the proffered basis for 
his debarment in ORA's proposal.
    Under the authority delegated to her by the Commissioner of Food 
and Drugs, the Chief Scientist has considered Thaxter's request for a 
hearing. Hearings are granted only if there is a genuine and 
substantial issue of fact. As discussed in more detail below, hearings 
will not be granted on issues of policy or law, on mere allegations, on 
denials or general descriptions of positions and contentions, on data 
and information insufficient to justify the factual determination urged 
if accurate and presented at a hearing, or on factual issues that are 
not determinative with respect to the action requested (see Sec.  
12.24(b) (21 CFR 12.24(b))). The Chief Scientist has considered 
Thaxter's arguments and concluded that they are unpersuasive and fail 
to raise a genuine and substantial issue of fact requiring a hearing.

II. Arguments

    In his Memorandum, Thaxter makes a series of legal and policy 
arguments challenging whether he is subject to debarment and, if so, 
whether debarment for 5 years is appropriate. Many of Thaxter's 
arguments are intertwined with his efforts to raise a genuine and 
substantial issue of fact with respect to the findings in ORA's 
proposal to debar him. Thaxter's legal and factual arguments largely 
turn on the extent to which the specific conduct underlying his 
conviction subjects him to debarment under section 306(b)(2)(B)(i) of 
the FD&C Act and the extent to which there are genuine and substantial 
issues of fact with respect to ORA's findings under section 
306(b)(2)(B)(i) and the applicable considerations under section 
306(c)(3). In challenging the facts underlying ORA's findings and 
ultimate debarment proposal, Thaxter contends that some of the findings 
in ORA's proposal go beyond the facts to which he admitted during the 
criminal proceedings and are demonstrably false. Specifically, he 
disputes ORA's proposed findings: (1) that the conduct underlying his 
conviction put patients and their children at risk, (2) that MassHealth 
relied on the false and misleading information to expand coverage to 
include Suboxone Film, and (3) that his conduct exposed patients to 
misbranded drugs.
    In challenging those proposed findings, Thaxter argues extensively 
that he is entitled to a hearing because not only are there genuine and 
substantial issues of fact with respect to those findings but they are 
conclusory and do not appear to rest on substantial evidence. He 
effectively contends, therefore, that he is entitled to a hearing on 
those findings for further development and an opportunity to challenge 
them. However, nothing in

[[Page 12377]]

the relevant FDA regulations, section 306(i) of the FD&C Act, or the 
Administrative Procedure Act (APA) requires more than an opportunity to 
raise genuine and substantial issues of fact with respect to the 
findings in ORA's proposal. As Thaxter notes, section 306(i) of the 
FD&C Act requires FDA to provide an ``opportunity for an agency hearing 
on issues of material fact'' before debarring any person. As noted by 
ORA in its proposal, FDA implements adjudications required under 
section 5 U.S.C. 554(a), including debarment matters, as formal 
evidentiary hearings under 21 CFR part 12.
    Under Sec.  12.24(b), consistent with the APA and case law, there 
are criteria for granting a hearing. Pursuant to that regulation, the 
Agency will grant a request for hearing only if the material submitted 
in support of the hearing request shows, in relevant part: (1) 
``[t]here is a genuine and substantial factual issue for resolution at 
a hearing,'' (2) ``[t]he factual issue can be resolved by available and 
specifically identified reliable evidence,'' (3) ``[t]he data and 
information submitted, if established at a hearing, would be adequate 
to justify resolution of the factual issue in the way sought by the 
person,'' and (4) ``[r]esolution of the factual issue in the way sought 
by the person is adequate to justify the action requested.'' The 
regulation further clarifies that ``[a] hearing will not be granted on 
issues of policy or law'' and that ``a hearing will not be granted on 
factual issues that are not determinative with respect to the action 
requested.''
    The factual challenges in Thaxter's Memorandum do not justify 
granting his hearing request. Even Thaxter himself does not dispute the 
facts to which he pled guilty. Rather, Thaxter attempts to show that 
those undisputed facts do not support ORA's proposed findings. 
Specifically, Thaxter argues that only disputed facts could plausibly 
support a finding that his conduct harmed children or patients or that 
MassHealth actually relied on the false and misleading information in 
making its ultimate decision to add Suboxone Film to its formulary. 
Thaxter appears to acknowledge, as he must, that the facts to which he 
pled guilty--i.e., the findings of the court that entered a criminal 
judgment against him--are not in dispute. In addition, he does not 
contest several other discrete findings in ORA's proposal. For reasons 
discussed in detail below, it is not necessary to go beyond the facts 
to which Thaxter pled guilty and the other undisputed facts in ORA's 
proposal to conclude that Thaxter is subject to debarment under section 
306(b)(2)(B)(i) of the FD&C Act and that debarment for 5 years is 
appropriate under section 306(c)(3).
    For the sake of simplicity and efficiency, what follows is an 
assessment of the remainder of Thaxter's legal, factual, and policy-
based arguments by reference only to the facts to which he pled guilty 
or the other undisputed findings in ORA's proposal. Consequently, the 
Chief Scientist need not further address Thaxter's arguments regarding 
the accuracy of ORA's findings regarding whether the conduct underlying 
his conviction exposed patients or their children to risk and 
misbranded drugs or caused MassHealth to rely on the false and 
misleading information.

A. Thaxter Is Subject to Debarment

    Thaxter argues that he is not subject to debarment under section 
306(b)(2)(B)(i) of the FD&C Act because the conduct to which he pled 
guilty did not ``undermine[ ] the process for the regulation of drugs'' 
in the sense contemplated by that statutory provision:

    To issue a final order of debarment, 21 U.S.C. 335a requires a 
finding by the Secretary [under section 335a(b)(2)(B)] that ``the 
type of conduct which served as the basis for such conviction 
undermines the process for the regulation of drugs.'' . . . This 
phrase is not defined in the statute. But the statute's structure 
and purpose, legislative history, and FDA's own precedent make clear 
that the statute is intended to reach individuals and entities that 
either: (1) engage in conduct that undermines the development or 
approval process itself; or (2) engage in significant fraud or 
blameworthy behavior such that the extraordinary remedy of debarment 
would be appropriate to prevent that person from even indirectly 
participating in the process of drug approval and regulation.

    In addition to raising constitutional issues regarding any contrary 
construction of section 335a(b)(2)(B), discussed in more detail below, 
he maintains, ``There is no reason to conclude that Congress intended 
FDA to impose the draconian debarment sanction for infractions that do 
not significantly undermine the regulatory process.'' Thaxter further 
argues that his criminal conduct lacks a sufficient nexus to ``the 
regulation of drug products'' under the FD&C Act and did not include 
sufficiently fraudulent or blameworthy behavior to warrant debarment if 
such conduct did not relate to the development or approval process for 
drugs:

    [His] conviction is not related to the development or approval 
process itself, and the conviction as described in the Information 
is not sufficiently severe standing alone to call into question the 
integrity of the process for review and approval of drug products 
such that it would warrant debarment as contemplated by the drafters 
of the statute. [He] had no bad intent and no contemporaneous 
knowledge of the underlying 2012 misstatements by an employee who 
did not report to him directly. When he learned about the 
misstatements in 2015--more than two years after they were made--he 
directed their correction. He engaged in no fraud or dishonesty, and 
he was not required to pay any restitution to MassHealth or any 
other entity. His crime was being in a position of authority at 
[RBP] and failing to prevent a subordinate employee who did not 
report to him directly from sending inaccurate data about Suboxone 
[Film] to a MassHealth official. It had nothing at all to do with 
the development or approval process of Suboxone, and it did not 
involve fraud, bribery, or obstruction of justice, or anything else 
to support a conclusion that he cannot be trusted to participate in 
the pharmaceutical industry.

    In support of these arguments, Thaxter points to the legislative 
history of section 306 of the FD&C Act and contends further that FDA's 
own public statements during the legislative process ``demonstrate how 
the debarment authority was primarily concerned with addressing 
significant fraud and misconduct within the development or approval 
process for drugs.'' Section 306(b)(2)(B)(i) of the FD&C Act, however, 
specifically provides for debarring individuals convicted of Federal 
misdemeanors related to the regulation of drug products. If the 
language of the statute is clear, there is no need to look outside the 
statute to its legislative history to ascertain the statute's meaning 
(Chamber of Commerce of United States v. Whiting 63 U.S. 582, 599 
(2011)). Furthermore, as the Supreme Court has repeatedly held, the 
language in the FD&C Act should be construed in a manner that is 
consistent with its overall public health purpose. When we are dealing 
with the public health, the language of the FD&C Act should not be read 
too restrictively, but rather as ``consistent with the Act's overriding 
purpose to protect the public health'' (United States v. Bacto-Unidisk, 
394 U.S. 784, 798 (1969)).
    Thaxter's further argument that he is not subject to debarment 
under section 306(b)(2)(B)(i)(I) of the FD&C Act because he pled guilty 
to a Federal misdemeanor offense without admitting any intent to 
violate the law or knowledge of wrongdoing is also unavailing. Given 
that section 306(b)(2)(B)(i) explicitly permits debarring individuals 
convicted of Federal misdemeanors related to the regulation of drug 
products and that a misdemeanor violation of the FD&C Act itself is a 
strict liability offense under

[[Page 12378]]

section 303(a)(1), it stands to reason that criminal intent is not 
required to subject an individual to debarment under section 
306(b)(2)(B)(i)(I). In this case, however, Thaxter's guilty plea was 
not based on strict liability or ``pure, vicarious liability,'' as he 
argues. As highlighted in ORA's proposal, his conviction was based on 
his failure to prevent RBC ``from sending false and misleading 
information to MassHealth related to the relative rate of unintended 
pediatric exposures of Suboxone Film'' and ``to promptly correct that 
information once it was provided.'' Indeed, the Information to which 
Thaxter pled guilty provided that he, ``as a responsible [RBP] 
executive failed to prevent and promptly correct the distribution of 
the false and misleading unintended pediatric exposure data and 
marketing claims to MassHealth'' and that, accordingly, he caused the 
introduction and delivery for introduction of a misbranded drug into 
interstate commerce. He cannot now hide behind his arguments that he 
lacked specific knowledge that the labeling for the Suboxone Film was 
false and misleading in attempting to overcome the debarment resulting 
from the facts admitted to as part of his plea agreement. As the 
Supreme Court has reasoned, in keeping with the FD&C Act's purpose of 
protecting the public from adulterated and misbranded products, 
Congress chose to place the burden of protecting the public on those 
who play a role in manufacturing and distributing those products rather 
than on consumers, who cannot protect themselves (United States v. 
Dotterweich, 320 U.S. 277, 280-81 (1943)). The duty imposed on 
responsible corporate officers (RCOs) ``requires the highest standard 
of foresight and vigilance'':

    The requirements of foresight and vigilance imposed on 
responsible corporate agents are beyond question demanding, and 
perhaps onerous, but they are no more stringent than the public has 
a right to expect of those who voluntarily assume positions of 
authority in business enterprises whose services and products affect 
the health and well-being of the public that supports them (Park, 
421 U.S. at 672-73).

    Nor are Thaxter's arguments that his conduct underlying his 
conviction ``lack[ed] the required nexus to the `process for the 
regulation of drugs''' to subject him to debarment under section 
306(b)(2)(B)(i)(I) of the FD&C Act availing. Simply put, he pled guilty 
to causing the introduction of a misbranded drug into interstate 
commerce in violation of the FD&C Act (specifically, sections 301(a), 
303(a)(1), and 502(a) of the FD&C Act). In section 306(b)(2)(B)(i)(I), 
``a misdemeanor under Federal law or a felony under State law for 
conduct . . . otherwise relating to the regulation of drug products'' 
subjects an individual to permissive debarment. There are no genuine 
and substantial issues of fact regarding whether Thaxter pled guilty 
to--and therefore committed--a misdemeanor under Federal law. When that 
Federal misdemeanor is for conduct that directly violated the FD&C Act 
with respect to drug labeling, there is no question that such violation 
relates to the regulation of drugs under that statutory authority.
    Thaxter makes many similar arguments with respect to whether the 
conduct to which he pled guilty as part of his misdemeanor plea is 
``the type of conduct [that] . . . undermines the process for the 
regulation of drugs'' under the FD&C Act in the sense contemplated by 
section 306(b)(2)(B)(i)(I) of the FD&C Act. In doing so, he attempts to 
distinguish between conduct relating to the development and approval 
process for drug products and conduct relating to other aspects of drug 
regulation under the FD&C Act. Although he supports that distinction by 
pointing to the legislative history of section 306 and offering policy 
arguments, neither section 306(b)(2)(B)(i)(I) nor the FD&C Act as a 
whole bear out that distinction. The plain language of section 
306(b)(2)(B)(i)(I) does not draw the distinction urged by Thaxter and 
indeed expands the scope of the statutory provision beyond conduct 
relating to the development and approval process by including the 
language ``otherwise relating to the regulation of drug products.'' 
With respect to the purpose of FD&C Act as a whole, the Supreme Court 
has found that its aims go well beyond the development and approval 
process for drug products: ``Its purpose [is] to safeguard the consumer 
by applying the Act to articles from the moment of their introduction 
into interstate commerce all the way to the moment of their delivery to 
the ultimate consumer'' (United States v. Sullivan, 332 U.S. 689, 696 
(1948)).
    Thaxter nonetheless argues that the ``underlying facts of [his] 
plea only demonstrate[] a `technical' misbranding'' and that thus his 
conduct did not undermine the process for the regulation of drugs. As 
ORA correctly determined, however, his conduct went beyond a mere 
technical violation of the FD&C Act. Thaxter's conduct included 
providing inaccurate information about a drug product to a State health 
agency focused on the safety profile of the drug at issue:

    [Thaxter's] actions undermined the process for the regulation of 
drugs because [he] failed to prevent [RBP] from sending false and 
misleading data and information to MassHealth related to the rate of 
unintended pediatric exposure to Suboxone Film[] and did not 
promptly correct such information and data.

    Notwithstanding Thaxter's assertions to the contrary, an important 
and fundamental objective of the FD&C Act is preventing the labeling of 
a drug product from containing false and misleading information about 
the product's safety profile.\2\ The type of conduct to which Thaxter 
pled guilty did undermine the process for the regulation of drugs in 
the sense contemplated by both section 306(b)(2)(B)(i)(I) and the FD&C 
Act as a whole.
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    \2\ In fact, as has already been discussed at length, Thaxter 
admitted that the conduct in question--for which he admitted 
responsibility as an RCO--misbranded a drug product while in the 
very chain of commerce that the Supreme Court has said the FD&C Act 
is intended to safeguard in order to protect the consumer (see 
Sullivan, 332 U.S. at 696).
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    In light of the foregoing, the Chief Scientist finds that Thaxter 
has failed to raise a genuine and substantial issue of fact with 
respect to (1) whether the conduct serving as the basis of his Federal 
misdemeanor conviction related to the regulation of drugs and is the 
type of conduct that undermines the process for the regulation of drugs 
and thus (2) whether he is subject to debarment under the terms of 
section 306(b)(2)(B)(i)(I) of the FD&C Act.

B. Appropriateness of a 5-Year Debarment Period

    In support of his hearing request, Thaxter further argues in his 
Memorandum that he is entitled to a hearing on ORA's findings with 
respect to the considerations in section 306(c)(3) of the FD&C Act. He 
contends both that ORA erred in considering only three of the six 
factors in section 306(c)(3) and that there are genuine and substantial 
issues of fact with respect to five of the six factors. With respect to 
the sixth factor, which concerns whether a person subject to debarment 
has prior convictions under the FD&C Act or for offenses for matters 
within the jurisdiction of FDA, Thaxter argues that ORA ``failed to 
afford any weight the fact that [he] has no prior convictions.''
    Thaxter's argument that the Agency must consider all six factors in 
section 306(c)(3) of the FD&C Act in determining the appropriateness 
and period of his debarment under section 306(b)(2)(B)(i)(I) is belied 
by the language of the statute. FDA need only address the 
considerations in section

[[Page 12379]]

306(c)(3) ``where applicable.'' The considerations in section 306(c)(3) 
apply not only to individuals but also to corporations, partnerships, 
and associations subject to permissive debarment under section 
306(b)(2) and (3). Thus not all aspects of the considerations are 
necessarily applicable in every case.
    In his Memorandum, Thaxter specifically points to the 
considerations in section 306(c)(3) of the FD&C Act on which ORA made 
no findings in its proposal, specifically paragraphs (B), (D), and (E). 
Paragraphs (D) and (E) are not applicable to Thaxter based on the 
undisputed record before FDA. Under section 306(c)(3)(D), FDA must, 
``where applicable,'' consider ``whether the extent to which changes in 
ownership, management or operations have corrected the causes of any 
offense involved and provide reasonable assurances that the offense 
will not occur in the future.'' Under 306(c)(3)(E), the Agency must, 
again ``where applicable,'' consider ``whether the person to be 
debarred is able to present adequate evidence that current production 
of drugs subject to abbreviated new drug applications [ANDAs] and all 
pending [ANDAs] are free of fraud and material false statements.''
    Those two considerations are rarely, if ever, applicable to an 
individual, particularly one that is no longer employed by the business 
entity where that individual committed the offenses at issue, as is the 
case here. Whether it is appropriate to debar an individual as a 
remedial measure to protect the integrity of the process for regulating 
drugs and, if so, for how long, turns on an assessment of the 
individual in light of the conduct underlying the offense and other 
factors related to the individual. The applicable considerations for 
individuals under section 306(c)(3) of the FD&C Act thus do not 
typically hinge on corrective actions at a corporation or any other 
efforts made by that corporation to prevent the promulgation of fraud 
or materially false statements.
    The focus under section 306(c)(3)(D) of the FD&C Act is on whether 
there have been changes in ownership, management, or operations that 
might provide assurances that the offense at issue will not occur 
again. This consideration could only be meaningful to assessing the 
appropriateness and period of debarment for an individual if those 
changes occurred at a business enterprise in which the individual is 
currently engaged and the individual could not acquire a position 
elsewhere in the drug industry absent debarment. Furthermore, not only 
does Thaxter attempt to expand the scope of section 306(c)(3)(E) to 
include measures taken to prevent the promulgation of fraud or 
materially false information beyond those relating to ANDAs, he relies 
on the steps taken by another person: Invidior PLC (Invidior), a 
successor corporation to RBP for which he also served as Chief 
Executive Officer. Nonetheless, insofar as Thaxter describes evidence 
or raises facts about corrective actions at RBP's successor company, 
Invidior, the Chief Scientist evaluates those proffered facts and 
arguments in the context of the consideration regarding ``voluntary 
steps'' in section 306(c)(3)(C), which is applicable to individuals.
    In his Memorandum, as noted above, Thaxter argues that ORA's 
proposal to debar him for 5 years ignored the consideration in section 
306(c)(3)(B) of the FD&C Act, namely ``the nature and extent of 
management participation in any offense involved, whether corporate 
policies encouraged the offense, including whether inadequate 
institutional controls contributed the offense.'' He contends that the 
Agency should grant ``a hearing to ensure this factor is afforded 
proper weight in FDA's consideration of the [section 306(c)(3)] 
factors.'' In support of this position, Thaxter points to his 
motivations, as the highest-ranking executive officer at RBP, to 
encourage the truthful promotion of Suboxone Film and other 
buprenorphine-containing products and to prevent abuse and diversion, 
and he lists a series of company policies, initiatives, and 
communications in which he claims to have had a hand in issuing or 
developing.
    In contrast to the considerations in paragraphs (D) and (E) of 
section 306(c)(3) of the FD&C Act, the Agency has often considered the 
factor in subparagraph (B) in assessing the appropriateness and period 
of debarment for individuals under section 306(b)(2)(B)(i)(I) of the 
FD&C Act (see, e.g., ``Dilip Patel; Denial of Hearing; Final Debarment 
Order'' (83 FR 48829 at 48830, September 27, 2018)). The record before 
FDA does not disclose why ORA did not find that consideration to be 
applicable here, and the proposal does not cite the consideration as 
either a favorable or unfavorable factor. Even if the Agency were to 
consider the factor in section 306(c)(3)(B) in assessing the 
appropriateness and period of Thaxter' debarment in light of the 
additional policies, initiatives, and communications described by him 
in his Memorandum, that factor would not be favorable.
    As discussed above in relation to whether conduct underlying 
Thaxter's conviction was sufficiently serious to warrant debarment, and 
as highlighted in ORA's proposal, Thaxter admitted during his criminal 
proceedings that he was an RCO with authority to either prevent in the 
first instance or to promptly correct the provision of false and 
misleading information to MassHealth and that he took neither action. 
By admitting such authority and responsibility, Thaxter conceded both 
that he served in a managerial role for the offense involved and that 
the ``corporate policies and practices'' to which he points--many of 
which do not directly relate to the offense to which he pled guilty--
were inadequate to prevent that offense. Indeed, the essence of his 
guilty plea as an RCO is that he failed to fulfill the duties imposed 
on him by the FD&C Act by having the policies and practices in place 
(including his own, as an individual RCO) to prevent the offense at 
issue. Given that the consideration in section 306(c)(3)(B) of the FD&C 
Act would not be favorable to Thaxter, even assuming the accuracy of 
the additional information provided by him, the Chief Scientist, like 
ORA, will not treat this consideration as either favorable or 
unfavorable.
    With respect to the three considerations under section 306(c)(3) of 
the FD&C Act on which ORA made factual findings in its proposal to 
debar him, Thaxter disputes the factual basis for two of them and 
argues that ORA's proposal gives insufficient weight to the third. 
After separately evaluating the arguments with respect to the factual 
basis for two of the considerations--specifically, those under 
paragraphs (A) and (C)--the Chief Scientist assesses whether, taken 
together, the three considerations warrant debarment for 5 years, 
including the weight to be given the third under subparagraph (F).
    Thaxter first argues that ORA's assessment of the nature and 
seriousness of his offense under section 306(c)(3)(A) is flawed: (1) 
because ORA erroneously relied on the premise that his criminal conduct 
``put children at risk,'' and (2) because ``failing to prevent a 
subordinate employee from providing misleading information to a state 
Medicaid official more than eight years ago'' is not sufficiently 
serious or recent enough to warrant a 5-year debarment period, 
especially without a showing that such conduct resulted in ``drugs 
being tainted or counterfeited'' or ``patient care [being] 
compromised.'' It is not necessary to go beyond the facts to which 
Thaxter pled guilty to resolve the additional factual issues to which 
Thaxter now points. Whether Thaxter's

[[Page 12380]]

conduct ``put children at risk'' or compromised patient care is not 
determinative with respect to the appropriateness of debarring him for 
5 years. It is also not necessary to reach whether his conduct caused 
drug products to be tainted or counterfeited.
    Notwithstanding Thaxter's assertions to the contrary, as ORA found 
and has been discussed at length above, Thaxter took responsibility for 
RBP's introducing, and delivering for introduction, a misbranded drug 
into interstate commerce. He admitted as part of his guilty plea that 
he was in a position both to prevent the violations resulting from his 
subordinate's conduct--i.e., the inclusion of false and misleading 
information in the labeling for Subluxone Film--or to correct them 
promptly. But he did not. Building on the reasoning above with respect 
to whether the type of conduct serving as the basis of Thaxter's 
misdemeanor conviction undermined the process for the regulation of 
drugs, the Chief Scientist finds that Thaxter's role and responsibility 
in the introduction of a drug whose labeling and false and misleading 
under section 502(a) of the FD&C Act--especially when the labeling at 
issue went directly to a State Medicaid agency and when viewed within 
the range of potential misdemeanor convictions that might subject an 
individual to permissive debarment under section 306(b)(2)(B)(i)(I)--is 
sufficiently serious to warrant treatment as an unfavorable factor. In 
short, Thaxter has failed to raise a genuine and substantial issue of 
fact with respect to ORA's findings regarding the nature and 
seriousness of his offense under section 306(c)(3)(A).
    Thaxter next argues that, in evaluating ``the nature and extent of 
voluntary steps to mitigate the impact of any offense involved'' under 
section 306(c)(3)(C) of the FD&C Act, ORA did not fully consider his 
role in authorizing ``a disclosure to MassHealth alerting it to the 
misinformation sent previously.'' He takes issue with ORA's suggestion 
that ``the delay in sending the correction letter--which was not [his] 
fault . . . since he had no knowledge of the underlying conduct at the 
time--justifies discounting the weight of the corrective letter that 
[he] directed the Company to send promptly after he learned of the 
events at issue.'' Again, however, the facts to which Thaxter pled 
guilty belie this assertion. As part of his guilty plea, he admitted 
that he was an RCO ``with authority to either prevent in the first 
instance or to promptly correct the provision of false and misleading 
information to MassHealth and that he took neither action.'' He cannot 
now claim that his corrective action was prompt, and he does not 
dispute that he directed the correction ``only after an investigation 
was opened into this matter.''
    Thaxter further maintains that, in light of the eventual corrective 
action directed by him, ORA's conclusion that he failed to ``take any 
steps to mitigate the potential impact on the public (emphasis 
Thaxter's)'' is unfounded. But neither ORA's evaluation of this 
consideration as a whole in the proposal nor the Chief Scientist's 
evaluation hinges to any meaningful degree on the omission of the word 
``prompt'' in ORA's conclusion to that effect. Furthermore, although 
Thaxter argues that ``a hearing is needed to clarify the steps [he] 
took after he learned of the misstatement and the corrective action he 
directed the Company to take,'' he does not provide sufficient detail 
regarding ``voluntary steps'' under section 306(c)(3)(C) to deduce what 
those steps were and thus fails to present a material factual issue 
with respect to those steps to be resolved at a hearing.
    Insofar as Thaxter points to additional, specific corrective 
actions, he does so in his arguments regarding paragraphs (D) and (E) 
of section 306(c)(3) of the FD&C Act in regard to the actions of 
Invidior, as noted above. With respect to whether changes in operations 
at Invidior have corrected the cause of his own misdemeanor offense, he 
points to a Corporate Integrity Agreement with the Office of Inspector 
General in the Department of Health and Human Services (CIA) into which 
the company entered as part of a comprehensive settlement agreement. 
However, Thaxter fails to point to any role he might have had in that 
CIA as an individual. Thaxter's arguments regarding the CIA's 
requirement that Invidior adopt ``detailed and state-of-the-art 
compliance measures'' to ensure that the manufacture and sale of its 
drug products remain free of fraud and materially false statement must 
fail on analogous reasoning. Accordingly, the Chief Scientist finds 
that Thaxter has failed to raise a genuine and substantial issue of 
fact with respect to ORA's findings regarding the voluntary steps taken 
by him to mitigate the effect of his offense on the public under 
section 306(c)(3)(C).
    Based on the undisputed record before FDA, primarily encompassing 
the facts to which Thaxter pled guilty, the Chief Scientist finds that 
a 5-year debarment is appropriate. Although Thaxter has no previous 
criminal convictions related to matters within the jurisdiction of FDA, 
this sole favorable factor does not counterbalance the nature and 
seriousness of his offense and lack of voluntary steps promptly taken 
to mitigate the effect of that offense on the public. As has been 
discussed at length, Thaxter admitted as part of his guilty plea that, 
as an RCO, he possessed the authority, opportunity, and responsibility 
to prevent or promptly correct conduct that caused false and misleading 
information to go to a State Medicaid agency and thereby caused the 
introduction of a misbranded drug into interstate commerce. His failure 
to prevent or promptly correct conduct breached the fundamental 
responsibility as an RCO when he voluntarily assumed a ``position[ ] of 
authority in [a] business enterprise[ ] whose services and products 
affect the health and well-being of the public'' (Park, 421 U.S. at 
573). In short, the Chief Scientist agrees with ORA's conclusion in its 
proposal that ``the facts supporting the unfavorable factors outweigh 
those supporting the favorable factor, and therefore warrant the 
imposition of a five-year period of debarment.''

C. Remaining Legal Arguments

    In addition to the foregoing arguments regarding the statutory and 
factual basis for his debarment, Thaxter argues that debarring him 
``for a non-intent, strict liability misdemeanor, without any 
assessment of underlying knowledge or lack of participation in the 
conduct of the offense'' would violate ``both his procedural and 
substantive due process rights'' under the Fifth Amendment, given the 
liberty and property interests at stake. He claims a lack of notice 
that he could be subject to debarment for conduct as an RCO. Relying on 
Morissette v. United States, 342 U.S. 246, 256 (1952), he also argues 
that the effect debarment will have on his employment opportunities in 
his chosen profession and his reputation go beyond the effects of a 
misdemeanor conviction contemplated by the Supreme Court in that case.
    As is extensively discussed above, however, Thaxter did not plead 
guilty based purely on strict liability. He admitted as part of his 
guilty plea that he was an RCO ``with authority to either prevent in 
the first instance or to promptly correct the provision of false and 
misleading information to MassHealth and that he took neither action.'' 
(see Park, 421 U.S. at 673-74). As discussed above, under the terms of 
section 306(b)(2)(B)(i)(I) of the FD&C Act, he is subject to permissive 
debarment for up to 5 years based on the Federal misdemeanor to which 
he pled guilty.

[[Page 12381]]

    The FD&C Act itself provides for misdemeanor liability under 
section 303(a)(1). Taken together, section 306(b)(2)(B)(i)(I) and 
(c)(3) prescribes the circumstances under which the Agency will 
exercise its discretion to debar individuals convicted of misdemeanors 
under the FD&C Act. Furthermore, in this case, the Agency has made the 
appropriate findings and considered the proper statutory criteria in 
evaluating the appropriateness and period of Thaxter's debarment. 
Accordingly, the Chief Scientist does not agree that Thaxter's 
debarment for 5 years violates his right to due process.
    Thaxter next argues that debarring him for 5 years would be 
``unreasonable and would not comport with the basic requirements of 
reasoned decision-making'' unless FDA were to justify ``the radical 
departure from precedent that debarring [him] would represent.'' He 
argues further that ``it would be arbitrary, capricious, and contrary 
to law for FDA to [debar] a party that has not taken action that poses 
a significant threat to the integrity of the regulatory system'' or 
``not to hold a hearing to support its position.''
    Based on Thaxter's arguments and the case law he cites, he appears 
to be relying on the judicial standard for review of Agency decision-
making in the APA at 5 U.S.C. 706(2), which directs courts to ``hold 
unlawful and set aside agency action[s]'' that are ``arbitrary, 
capricious, an abuse of discretion, or otherwise not in accordance with 
law.'' As the Supreme Court has held, the question under that standard 
is whether the Agency has provided a reasonable explanation for the 
substance its decision:

    The APA's arbitrary-and-capricious standard requires that agency 
action be reasonable and reasonably explained. Judicial review under 
that standard is deferential, and a court may not substitute its own 
policy judgment for that of the agency. A court simply ensures that 
the agency has acted within a zone of reasonableness and, in 
particular, has reasonably considered the relevant issues and 
reasonably explained the decision (FCC v. Prometheus Radio Project, 
141 S. Ct. 1150, 1158, 209 L. Ed. 2d 287 (2021)).

    In this matter, as reflected in the lengthy discussion above, the 
Agency has reasonably considered the relevant issues and fully 
explained its decision to debar Thaxter. Although Thaxter points to 
other individuals who pled guilty to misdemeanors based on liability as 
RCOs and who have not been debarred, he provides no details with 
respect to those individuals' convictions. Even assuming, however, that 
those individuals were similarly situated to him, his bare assertion 
that an Agency cannot choose to begin pursuing debarment of individuals 
for certain discrete categories of Federal misdemeanor convictions 
because it has not done so in the past is unfounded. As discussed, the 
terms of section 306(b)(2)(B)(i)(I) and (c)(3) of the FD&C Act are 
clear, and the Agency has exercised its discretion here in a manner 
consistent with the permissive debarment of many other individuals 
convicted of Federal misdemeanors. Accordingly, Thaxter's argument that 
debarring him is arbitrary, capricious, and contrary to law lacks 
merit.

III. Findings and Order

    Therefore, the Chief Scientist, under section 306(b)(2)(B)(i)(I) of 
the FD&C Act and under authority delegated to her by the Commissioner 
of Food and Drugs, finds that (1) Thaxter has been convicted of a 
misdemeanor under Federal law for conduct relating to the development 
or approval, including the process for development or approval, of a 
drug product or otherwise relating to the regulation of a drug product 
under the FD&C Act and (2) the type of conduct which served as the 
basis for the conviction undermines the process for the regulation of 
drugs. FDA has considered the applicable 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, Thaxter is debarred for 5 
years from providing services in any capacity to a person with an 
approved or pending drug product application under sections 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 (see 
DATES) (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 Thaxter, 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 Thaxter, 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 (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 Thaxter during his period of debarment (section 
306(c)(1)(B) of the FD&C Act).

    Dated: February 21, 2023.
Namandj[eacute] N. Bumpus,
Chief Scientist.
[FR Doc. 2023-03941 Filed 2-24-23; 8:45 am]
BILLING CODE 4164-01-P