FDA Acknowledgement Form Concerning Violations of 21 U.S.C. Section 331
Recently, the U.S. Food and Drug Administration (FDA) has been having doctors sign forms acknowledging that their prescription drug practices could violate 21 U.S.C. Section 331 and other federal laws.
As a physician, you do your best to comply with the law, and the last thing you want to do is to raise any kind of red flags with federal authorities. So, if a Special Agent from the U.S. Food and Drug Administration (FDA) shows up at your office, “interviews” you, and says you need to sign a form, you are most likely going to comply.
But, could doing so actually have negative ramifications for your ability to protect your practice in the event of a follow-up “interview” or investigation?
Have You Been Asked to Sign an “Acknowledgement” By the FDA?
When FDA Special Agents conduct an audit or inspection and find possible evidence of potential wrongdoing, but not evidence that is sufficient to support civil or criminal charges, in many cases they will ask the physician to sign a letter that is simply titled, “ACKNOWLEDGEMENT”. This form document does not contain any allegations, and it is not itself an admission of wrongdoing.
However, what this form does do is effectively put the physician on notice that certain practices in which the physician may or may not already may be engaging are illegal under federal law. In pertinent part, the letter states:
“The undersigned interviewing Special Agent advised the interviewee . . . that administering non-FDA approved prescription drugs and/or non-FDA approved/cleared injectable devices, which are virtually always also misbranded and/or adulterated under the Federal Food, Drug, and Cosmetic Act (FDCA), puts patients’ health at risk. . . . The undersigned Special Agent further advised the interviewee that receiving misbranded and/or adulterated drugs and/or devices in interstate commerce, and delivering or offering to deliver those drugs and/or devices to (or use on) others violates the FDCA. See 21 U.S.C. § 331(c). . . .
“The Special Agent also informed the interviewee that under the Drug Supply Chain Security Act, all healthcare providers who dispense or administer prescription drugs are required to purchase drug products from authorized trading partners licensed by, or registered with, the state or Federal government. See 21 U.S.C. §§ 331(t) and 360eee-1(d)(3). . . . [and] that both past and future violations of the law are subject to enforcement actions, including criminal prosecution.
“The interviewee was advised that the minimum penalties for a criminal violation of the FDCA authorizes a sentence of up to one year in prison, a fine that could exceed $100,000, or both, for each separate offense committed. See 21 U.S.C. § 333(a)(1) and 18 U.S.C. § 3571(b)(5), (c)(5), and (d). The Special Agent also advised that under the FDCA, a responsible corporate official can be held liable for a misdemeanor violation without proof that the corporate official acted with intent or even negligence, and even if such corporate official did not have any actual knowledge of, or participation in, the specific offense.”
In other words, by signing the letter, you are affirmatively acknowledging that you have been educated by federal agents about the risks and illegality of accepting and administering non-FDA-approved medications and medical devices. Again, this does not have any immediate consequences. But, if your practice is targeted for violating Section 331 of the FDCA in the future, you can be absolutely certain that the government will produce your “ACKNOWLEDGEMENT” in order to demonstrate that you have “knowingly” and “intentionally” violated federal law.
Sections 331 and 360eee-1 of the FDCA: A Closer Look
The FDA’s “ACKNOWLEDGEMENT” form references Sections 331 and 360eee-1 of the FDCA. Section 331 (21 U.S.C. Section 331) is one of the main prohibitory sections of the FDCA (it is titled “Prohibited Acts”), and it lists a total of fifty-seven acts and omissions that constitute violations of federal law. The FDA’s form specifically references subsections (c) and (t). These subsections prohibit:
- “(c) The receipt in interstate commerce of any food, drug, device, tobacco product, or cosmetic that is adulterated or misbranded, and the delivery or proffered delivery thereof for pay or otherwise;” and,
- “(t) The importation of a drug in violation of section 381(d)(1) . . . the sale, purchase, or trade of a drug or drug sample or the offer to sell, purchase, or trade a drug or drug sample in violation of section 353(c) . . . , the sale, purchase, or trade of a coupon, the offer to sell, purchase, or trade such a coupon, or the counterfeiting of such a coupon in violation of section 353(c)(2) . . . , the distribution of a drug sample in violation of section 353(d) . . . or the failure to otherwise comply with the requirements of section 353(d) . . . , the distribution of drugs in violation of section 353(e) . . . , failure to comply with the requirements under section 360eee–1 . . . , the failure to comply with the requirements under section 360eee–3 . . . , as applicable, or the failure to otherwise comply with the requirements of section 353(e) of this title.”
As you can see, simply looking at Section 331 does not tell you the whole story. In order to understand what is prohibited, you also have to review various provisions of Sections 353, 381, and 360eee-1. But, then, if you take a look at 21 U.S.C. Section 381(d)(1), for example, it too references you to various other sections of the FDCA.
Now, let’s take a look at 21 U.S.C. Section 360eee-1(d)(3), as referenced in the FDA’s letter. This provision of the statute cryptically states only that, “Beginning not later than January 1, 2015, the trading partners of a dispenser may be only authorized trading partners.” The FDA’s letter provides a little bit of context, stating that physicians may only purchase prescription drugs and other drug products from, “authorized trading partners licensed by, or registered with,” the state or Federal government.” But, how can you make sure your practice’s vendors are licensed or registered? What if one of your vendors’ licenses expires and you have no idea?
In today’s world, these are questions that physicians need to be prepared to answer—and they need to be prepared to answer them the right way in order to avoid prosecution by the federal government. Prescription drug compliance is key; and, not only must physicians and other healthcare providers develop comprehensive and custom-tailored compliance programs, but they must actively manage, monitor, and reassess their compliance efforts on an ongoing basis.
Penalties Under Section 333(a)(1) of the FDCA and 18 U.S.C. Section 3571
The FDA’s acknowledgement form also references the penal provisions of Section 333(a)(1) of the FDCA as well as 18 U.S.C. Section 3571, which is part of the U.S. Criminal Code. Section 333(a)(1) states: “Any person who violates a provision of section 331 of this title shall be imprisoned for not more than one year or fined not more than $1,000, or both.” The cited subsections of 18 U.S.C. Section 3571 provide as follows:
- Section 3571(b)(5): Class A misdemeanor violations of statutes other than 21 U.S.C. Section 331 carry up to a $100,000 fine for individuals (unless the violation results in death).
- Section 3571(c)(5): Class A misdemeanor violations of statutes other than 21 U.S.C. Section 331 carry up to a $200,000 fine for organizations (unless the violation results in death).
- Section 3571(d): In lieu of the statutory fines in subsections (b) and (c), “[i]f any person derives pecuniary gain from the offense . . . the defendant may be fined not more than the greater of twice the gross gain . . . .”
Can you afford to take the risk? We’re guessing the answer to this question is, “No.” With this in mind, it is imperative that your practice implement a proactive compliance program that specifically addresses the issues that can lead to fines and prison time under the FDCA. However, in addition to FDA compliance, there are numerous other aspects to healthcare compliance for physicians and other providers as well. These include:
- Drug Enforcement Administration (DEA) compliance
- Medicare, Medicaid, Tricare, Veterans Affairs (VA), and Department of Labor (DOL) compliance
- Private insurance billing compliance
- HIPPA, cybersecurity, and patient privacy compliance
- Anti-Kickback Statute and Stark Law compliance
- Healthcare marketing (including telemedicine) compliance
- Corporate compliance
What Should You Do if You Have Been Contacted by FDA Special Agents?
If you have been contacted by Special Agents from the FDA, without question, your next step should be to speak with a federal healthcare compliance and defense lawyer. You need to make sure your practice is fully compliant with the FDCA (and all other applicable federal laws and regulations); and, if it isn’t you need to come into compliance promptly.
At Oberheiden P.C., our lawyers and compliance consultants (including former healthcare fraud prosecutors and FDA and DEA agents) bring centuries of combined experience to protecting physicians and other providers nationwide. Learn more about the members of our compliance and defense team, then contact us for a free initial assessment of your practice’s legal needs.
Schedule a Free Initial Assessment at Oberheiden P.C.
Do not let oversights and other mistakes jeopardize your medical practice. Contact Oberheiden P.C. today and make sure you are not at risk for being civilly or criminally prosecuted for violations of the FDCA. To speak with a member of our federal healthcare compliance and defense team in confidence, call 888-680-1745 or tell us how we can help online now.
Dr. Nick Oberheiden, founder of Oberheiden P.C., focuses his litigation practice on white-collar criminal defense, government investigations, SEC & FCPA enforcement, and commercial litigation.