Document ID: FDA-2020-N-1347-0002
Agency: fda
Document Type: Notice
Title: Michael L. Babich: Final Debarment Order
Posted Date: 2020-11-27T05:00Z

[Federal Register Volume 85, Number 229 (Friday, November 27, 2020)]
[Notices]
[Pages 76084-76085]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-26226]

[[Page 76084]]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2020-N-1347]

Michael L. Babich: Final Debarment Order

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA or Agency) is issuing an 
order under the Federal Food, Drug, and Cosmetic Act (FD&C Act) 
permanently debarring Michael L. Babich 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 Mr. Babich was 
convicted of a felony under Federal law for conduct that relates to the 
regulation of a drug product under the FD&C Act. Mr. Babich was given 
notice of the proposed permanent debarment and an opportunity to 
request a hearing to show why he should not be debarred. As of 
September 2, 2020 (30 days after receipt of the notice), Mr. Babich had 
not responded. Mr. Babich's failure to respond and request a hearing 
constitutes a waiver of his right to a hearing concerning this action.

DATES: This order is applicable November 27, 2020.

ADDRESSES: Submit applications for special termination of debarment to 
Dockets Management Staff (HFA-305), Food and Drug Administration, 5630 
Fishers Lane, Rm. 1061, Rockville, MD 20852, 240-402-7500, or at 
www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Jaime Espinosa, Division of 
Enforcement, Office of Strategic Planning and Operational Policy, 
Office of Regulatory Affairs, Food and Drug Administration, 12420 
Parklawn Dr., Rockville, MD 20857, debarments@fda.hhs.gov, or at 240-
402-8743.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 306(a)(2)(B) of the FD&C Act (21 U.S.C. 335a(a)(2)(B)) 
requires debarment of an individual from providing services in any 
capacity to a person that has an approved or pending drug product 
application if FDA finds that the individual has been convicted of a 
felony under Federal law for conduct relating to the regulation of any 
drug product under the FD&C Act. On January 22, 2020, Mr. Babich was 
convicted as defined in section 306(l)(1) of the FD&C Act when judgment 
was entered against him in the U.S. District Court for the District of 
Massachusetts, after his plea of guilty, to one count of conspiracy in 
violation of 18 U.S.C. 371 and one count of wire fraud in violation of 
18 U.S.C. 1341.
    The factual basis for this conviction is as follows: Mr. Babich was 
the President and Chief Executive Officer of Insys Therapeutics, Inc. 
(Insys), a Delaware Corporation, with headquarters in Chandler, 
Arizona. Insys developed and owned a drug called SUBSYS, a liquid 
formulation of fentanyl to be applied under the tongue. FDA approved 
SUBSYS for the management of breakthrough pain in adult cancer patients 
who are already receiving and are already tolerant to opioid therapy 
for their underlying persistent cancer pain. From May 2012 and 
continuing until December 2015, Mr. Babich conspired with other 
employees of Insys to bribe and provide kickbacks, often mailed through 
the U.S. Postal service, to medical practitioners in various states to 
get those practitioners to increase prescribing SUBSYS to their 
patients, many of whom did not have cancer. The bribes and kickbacks 
took various forms, including honoraria for the practitioners' 
participation in educational events and payment of the practitioner's 
staff salaries. To further this conspiracy, Mr. Babich along with his 
co-conspirators devised a scheme whereby Insys executives conspired to 
mislead and defraud health insurance providers to ensure those 
providers approved payment for SUBSYS when it was prescribed for non-
cancer patients.
    As a result of this conviction FDA sent Mr. Babich, by certified 
mail on July 16, 2020, a notice proposing to permanently debar him from 
providing services in any capacity to a person that has an approved or 
pending drug product application. The proposal was based on a finding, 
under section 306(a)(2)(B) of the FD&C Act, that Mr. Babich was 
convicted of a felony under Federal law for conduct relating to the 
regulation of a drug product under the FD&C Act. The proposal also 
offered Mr. Babich an opportunity to request a hearing, providing him 
30 days from the date of receipt of the letter in which to file the 
request, and advised him that failure to request a hearing constituted 
an election not to use the opportunity for a hearing and a waiver of 
any contentions concerning this action. Mr. Babich received the 
proposal on August 3, 2020. Mr. Babich did not request a hearing within 
the timeframe prescribed by regulation and has, therefore, waived his 
opportunity for a hearing and any contentions concerning his debarment 
(21 CFR part 12).

II. Findings and Order

    Therefore, the Assistant Commissioner, Office of Human and Animal 
Food Operations, under section 306(a)(2)(B) of the FD&C Act, under 
authority delegated to the Assistant Commissioner, finds that Mr. 
Babich has been convicted of a felony under Federal law for conduct 
otherwise relating to the regulation of a drug product under the FD&C 
Act.
    As a result of the foregoing finding, Mr. Babich is permanently 
debarred from providing services in any capacity to a person with an 
approved or pending drug product application, effective (see DATES) 
(see sections 306(a)(2)(B) and 306(c)(2)(A)(ii) of the FD&C Act). Any 
person with an approved or pending drug product application who 
knowingly employs or retains as a consultant or contractor, or 
otherwise uses the services of Mr. Babich, in any capacity during his 
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 Mr. Babich provides 
services in any capacity to a person with an approved or pending drug 
product application during his period of debarment 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 
application from Mr. Babich during his period of debarment, other than 
in connection with an audit under section 306 of the FD&C Act (section 
306(c)(1)(B) of the FD&C Act). Note that, for purposes of section 306 
of the FD&C Act, a ``drug product'' is defined as a drug subject to 
regulation under section 505, 512, or 802 of the FD&C Act (21 U.S.C. 
355, 360b, 382) or under section 351 of the Public Health Service Act 
(42 U.S.C. 262) (section 201(dd) of the FD&C Act (21 U.S.C. 321(dd))).
    Any application by Mr. Babich for special termination of debarment 
under section 306(d)(4) of the FD&C Act should be identified with 
Docket No. FDA-2020-N-1347 and sent to the Dockets Management Staff 
(see ADDRESSES). The public availability of information in these 
submissions is governed by 21 CFR 10.20.
    Publicly available submissions will be placed in the docket and 
will be viewable at https://www.regulations.gov or at the Dockets 
Management Staff (see ADDRESSES) between 9 a.m. and 4 p.m., Monday 
through Friday, 240-402-7500.

[[Page 76085]]

    Dated: November 23, 2020.
Lauren K. Roth,
Acting Principal Associate Commissioner for Policy.
[FR Doc. 2020-26226 Filed 11-25-20; 8:45 am]
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