History of Regulation

The history of regulating food and drugs dates back just a year or two shy two centuries. The effort began in 1820 when a group of physicians formed the U.S. Pharmacopeia and developed the first compendium of standard drugs. Numerous milestones (too many to mention here) have occurred along this 200 year journey. Some particularly notable milestones include The Biologics Control Act which was passed in 1902 to ensure the safety and purity of vaccines and serums. In 1905, the voluntary program of drug approval began and ran in earnest for fifty years, eventually being replaced by a mandate to submit experimental evidence proving the safety and efficacy of a new treatment. Midway through the voluntary drug program, a sulfanilamide elixir killed 107 people, mostly children, which pushed the FDA towards mandating that drug safety be proven before marketing was permitted. As a direct outcome, the Federal Food, Drug and Cosmetic Act was passed in 1938, essentially dictating the requirements and provisions for drug safety which are still in effect today.

1962 was the year that Thalidomide became linked with disastrous clinical outcomes for the babies born to pregnant women taking the sleeping pill. Thousands of birth defects spurred a new mandate requiring that the effectiveness of a drug be proven with scientific evidence. Over the years that followed, new amendments and legislation controlling labeling, marketing, generics, orphan drug status, accelerated testing for compassionate release and more were written into law. In 1999, ClinicalTrials.gov was founded to expand patient access to promising new therapies in parallel with the release of guidelines for electronic submissions to speed drug review and approval. For a complete history, see LINK.

Today, the FDA’s journey protecting the health and welfare of the people it serves is taking another step forward towards a new milestone – imposing civil money penalties for non-compliance with the requirements that clinical trials be formally registered and that all results be posted.

History of Non-Compliance

With approximately 287,000 clinical trials recorded in ClinicalTrials.gov, one would expect the number of non-compliance incidents recorded and reported to be staggering. Not so. Based on our collective market research, the public record and decades of observation, individuals and companies on the whole wish to be compliant and hence, the number of non-compliance incidents is quite small, but growing, despite increased investment and attention to regulatory compliance.

A multitude of challenges from organizational complexity to global differences in regulations has made it increasingly onerous to be compliant. With warning letters made public, injunctions formally announced and prosecution of individuals for criminal acts reported in the news, the damage to the business is enormous. This is in sharp contrast to the true intention behind the drug, which is to improve health, and to the intention behind the regulatory guidelines which is to ensure that society is protected from another scourge like Thalidomide. In addition to challenges related to managing the complexity of global adherence, the costs of non-compliance have escalated from astronomical to incalculable and virtually unpayable.

According to a 2017 survey by PharmaExec, biopharma companies are investing greater resources, including management time, into compliance. Yet the number of non-compliance warnings have spiked over the past 5 years and the number of drug and device recalls continues to increase year over year. Their survey concluded that increased complexity resulting from global portfolios and operations, multi-national and multi-corporation licensing agreements and the exponential growth of new regulations – which vary country to country – are correlated to a growing trend of non-compliance. 2017 marked a sharp upturn in the number of Warning Letters issued, Import Alerts enforcement actions and data integrity issues reported.

The costs of non-compliance are also growing exponentially: a Corrective and Preventive Action (CAPA) may approach $10,000; a warning letter may cost $2-20 million depending on where the violation occurs in the pharma life cycle and resolving a consent decree will quickly exceed $100M. Not to mention the disastrous effect on reputation, brand integrity and future revenues.

Overview of the FDA Draft Guidance for Civil Penalties for Non-Compliance

The process for submitting clinical trials registration and results regarding drug products, biological products, and device products to ClinicalTrials.gov and hence achieving compliance is clearly dictated by Section 801 of the Food and Drug Administration Amendments Act of 2007 (FDAAA) amended section 402(j) of the PHS Act. If a “responsible party” receives a letter of non-compliance, they have 30 days to make corrections, to prepare written testimony and exchange exhibits or legal briefs in advance of the pending oral hearing and choose to either rest or exercise their right to cross-examination. The presiding officer will make an initial decision which includes the findings of fact plus the penalty assessed. Either side can then elect to appeal the decision.

The current draft guidance for committing prohibited acts will be assessed at $10,000 per day until the violation(s) is corrected. This proposed new guidance describes how a failure to submit required clinical trial registration or results will be identified, failed to submit the required certification or falsified it, the circumstances which will lead to the assessment of a civil money penalty and the procedure by which CDER will follow when seeking the penalty.

The September 2018 FDA Draft Guidance for Civil Penalties is posted here. The deadline for submitting a formal response to this draft guidance is November 20, 2018. The world of biopharma will be watching closely to see how the field has responded and how, in turn, the FDA will proceed.


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