December 28, 2021 • 23 mins
Warning Letters are more than a slap on the wrist. They are the first step in what can be a costly remediation and legal battle.
How do we prevent them? What is within the power of the FDA and government when they spot quality issues? To help us with these questions and more, we are joined by Amanda Johnston of Gardner Law. Amanda has over a decade of experience in FDA Regulatory Law and experience with all sizes of companies.
To learn more about Gardener Law, check out their website: https://gardner.law/
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Episode Transcript
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Aaron Harmon (00:00):
Hi, I'm Aaron Harman and this is inside out
(00:02):
quality, a podcast about reallife events and experiences
shared by our guests of whenthings have gone wrong, and how
we can learn from them to buildbetter products, companies and
improve lives through aneffective quality system. FDA
warning letters, quality nerdslove to read these. It's like
the obituary section of thenewspaper for quality assurance.
(00:22):
And why do we care so much? Ihave two reasons. First, we can
see the mistakes others make,and hopefully not make those as
well. And second, it's a way tounderstand the FDA
interpretation of theregulations. Here's a quick
overview of the FDA auditprocess. First, they arrive at
your FDA registered business andprovide you with a 482 form,
which is a notice of inspection.
Next, they perform theirinspection if they see anything
(00:44):
objectionable, they issue a 483form at the end, which lists
their findings. Next, theyperform their inspection if they
see anything objectionable. Theyissue a 483 form at the end
which lists our findings. Thefirm then takes corrective and
preventive actions to correctthe findings and life goes on.
If the corrections that areproposed are not adequate, or
(01:05):
the issues are too problematic.
The FDA issues a warning letter.
In 2015, Dr. Reddys laboratoriesreceived a warning letter based
on FDA audits of three sites inIndia. The issue stemmed from
quality control and qualityassurance problems. The FDA
closed that letter was finalizedin 2020. In quality we think a
lot about warning letters, butthis episode focuses on what
(01:26):
happens after the firm receivesthe warning letter productor
ready when the warning letterwas announced their share prices
fell almost 15%. They receivedtwo separate lawsuits against
them one resulting in a $9million settlement. And it took
five years to fix our qualitysystem and close out the warning
letter. To discuss the falloutof warning letters from the FDA.
(01:46):
We are joined by managingattorney Amanda Johnson from
Gartner law. The man has over 10years experience in the space of
FDA compliance and joins ustoday. Welcome to Inside Out
quality, Amanda.
Amanda Johnston (01:59):
Thank you.
Thanks for having me.
Aaron Harmon (02:02):
So first of all, how did you end up practicing
law and working in regulatoryaffairs?
Amanda Johnston (02:07):
Yeah, so I actually went to undergrad and
had a got a bachelor's incriminology and realize that I
could really only be about aprobation officer or a police
officer. So I decided to go tolaw school not really knowing
what I wanted to do. But I havetwo younger sisters that have
chronic lifelong healthcondition. So I kind of grew up
(02:29):
in the healthcare space and inhospitals and with health care,
being kind of a primary topic.
And so in law school, I decidedto take an FDA law course. And I
actually loved it. And I becamevery interested in
administrative law andspecifically FDA regulations.
And then also health law. So Iended up concentrating in health
law and bioethics at theUniversity of Minnesota law
(02:52):
school, and they have a reallygood program with the School of
Public Health. And they have alike a medical device Innovation
Consortium that they you know,we have such a high number of
medical device companies here inMinnesota. So it they really
tried to develop that talent. Iwas also a research assistant
for a renowned FDA attorney anddid some amazing research on
(03:14):
like the recall process and 510K process. And so that's kind of
how I got into the FDA space.
After I graduated law school, Igot a job in compliance, and
then ended up at Medtronic whereI was in regulatory affairs. I
loved Regulatory Affairs, Istill do. But I really wanted to
(03:38):
gain some more legal andcompliance experience. And so I
took a position at a medicaldevice company in the compliance
function, worked there for a fewyears, but still always knew
that I wanted to practice FDAlaw. So I joined Gartner law,
and in June 2019, and you know,bend their sense love what I do,
we, you know, are a small,sophisticated boutique firm that
(04:01):
caters to companies that areregulated by the FDA. So we have
a such a wide variety of clientsfrom, you know, single person
startups to multi billion dollarcompanies, and just so many
different clients, so manydifferent questions that come
up, really in the area of FDA,you know, regulatory
submissions, quality privacy,and anti fraud, compliance.
(04:24):
That's kind of how I ended up inthe space.
Aaron Harmon (04:26):
So you're one of the few people that says, I
really find FDA regulations.
Interesting.
Amanda Johnston (04:31):
Yes, I am a total regulatory nerd. I love
it. That is me. Self proclaimed.
Aaron Harmon (04:39):
There's not that many of us. It's kind of
Amanda Johnston (04:42):
like a rare honor. It is it really is.
Aaron Harmon (04:46):
So and in terms of these FDA warning letters, they
themselves sound a bit scary,but what are all the possible
consequences that can can fallout from a warning letter?
Amanda Johnston (04:56):
Yeah, that's a good that's a good question. So
you know, a lot of timescompanies view warning letters
as kind of a slap on the wristor they have in the past, at
least. And now I don't thinkcompanies really grasp kind of
all the consequences that comeafter. I mean, obviously,
there's going to be someremediation activities. I've
lived through warning lettersseveral. So I know kind of a all
(05:19):
hands on deck. What do we needto do to get this resolved by
you know, X date, there's allthat remediation activities that
need to take place to appeasethe FDA and get it resolved. But
there's also some additionalconsequences that can severely
disrupt business, FDA suspendsissuing certificate of foreign
(05:39):
governments or CFGs. So if youhave a warning letter that could
interfere with your ability toactually ship it outside and
sell outside the US. So I knowthat can be a big disruption,
FDA also typically will suspendproduct submissions. So if you
have something under review,they will suspend that. So those
are to kind of just not alwaysas a parent, but also just
(06:02):
thinking about, you know, if theconcerns in the in the warning
letter are not addressed, orresolved to FDA satisfaction,
essentially, within the timelinethat they want you to complete
it by, it will escalate. Andthere's kind of a number of
things that FDA has a whole hostof enforcement tools in their
tool belt, so to speak, thatthey can choose to use, if they
(06:23):
if it's warranted, they couldforce a recall, that's not
common, but they could ask youto do a recall if they believe
the concerns are, are such thatit would impact patient safety,
or there's quality issues, theycan force, you know, they can
forfeit products or does requireyou to destroy them, they could
even withdrawal productapprovals or clearances, or
(06:44):
continuous suspension of newproducts, FDA can also issue bad
press releases against you or,you know, bad, bad publicity.
And, you know, obviously, awarning letter in itself brings
some some bad publicity toaccompany. But just thinking,
you know, FDA does have theoption to issue their own safety
alert or press on a topic. Andthen depending on the facts, I
(07:08):
mean, FDA could ask theDepartment of Justice or the DOJ
to get involved. So FDA is not,you know, a law enforcement
agency, they their their missionreally is to protect the public
health. So if it becomes amatter or if you know, they have
some facts that they believethat could rise to the level of
a criminal or civilinvestigation or a DOJ action,
(07:30):
they could get them involved.
Consent Decree is one of themore common I guess, tools that
you would see in this area,which I've also lived through.
So that's basically an agreementwith the Department of Justice
that you are to do certainthings. So it's kind of a step
above a warning letter. And it'sonly if you know, if you think a
warning letter is disruptive toa business, that consent decree
is even more disruptive. Youknow, they could issue
(07:54):
disgorgement of profits,restitution damages, they could
seize products. So just thinkingabout, you know, get a warning
letter, it's not just a slap onthe wrist anymore, there's kind
of a whole host of ofconsequences that can that can
come up that a lot of companiesdon't think about.
Aaron Harmon (08:12):
When you mentioned, the Department of
Justice. One of the earlierepisodes we covered was a case
of moldy HEPA filters. And partof that resulted in a $10
million fine from the Departmentof Justice, but it was preceded
by the warning letter and theFDA audit revealed everything.
Yep.
Amanda Johnston (08:29):
Yeah, we do see that if the facts are such that
they want to make it a messageto the industry that those
actions are taken, we do seethat there were three recent
settlements, I believe in July,they were all with the DOJ. But
one of them was a criminal fraudcase. And they were all related
to quality issues that weresettled. The DOJ based on
(08:53):
quality issues, so like failureto issue a recall when FDA
thought they should have thatthose kinds of things. So we are
seeing more and more of that thegovernment is using actually the
False Claims Act to prosecutethat on the on the DOJ side.
Aaron Harmon (09:07):
Yeah. And it's just out of curiosity. I
typically think about the Food,Drug and Cosmetic Act. But is
that something out of theFederal Trade Act?
Amanda Johnston (09:15):
So this is actually a fact the Federal
False Claims Act is broader thanjust the healthcare industry.
And what it essentiallyprohibits is submitting a false
claim for payment to thegovernment. So I think it
originally was enacted back, Ican't remember which war it was.
Don't quote me on these, but toprevent the government from
(09:38):
being basically defrauded formilitary supplies. So the kind
of legal theory there is that inthis example, I think St. Jude
was one of the companies thatsettled in July, or they
announced it in July. They wereselling a product that had a
faulty battery, allegedly, andthe government would not have
(09:59):
paid for it. So St. Jude soldthese implantable medical
devices to a doctor, a doctorthen billed Medicare for it. And
the government was saying wewould not have paid for those
products through Medicare had weknown it was defective. And so
it's just an interesting legaltheory that we're we've been
seeing. But yeah, so that is afederal law that applies, you
(10:21):
know, broader than just themedical device, healthcare
industry.
Aaron Harmon (10:25):
But also exemplifies that you have to
think outside of Yeah, directlyhealthcare regulations and law.
Amanda Johnston (10:31):
Exactly, exactly.
Aaron Harmon (10:34):
You mentioned radiation kind of right away
from my understanding ofremediation, the FDA will do
their audit, they will findthese things that if they don't
agree with the record them inthe 483, or warning letter, and
then you got a time window ofsome sort, or have to have
action plan in place for howyou're going to correct all of
those things to get the warningletter lifted. Is that correct?
Amanda Johnston (10:55):
That's correct.
Yeah, depending I think it'sactually like 15 days that you
have to provide a plan forwarning letters may have
different I don't know if that'slike codified in a regulation,
but they will give you kind of adeadline or a timeline to at
least respond with plans. Andthen they will, there will be
set expectations in terms of howquickly they want you to get
(11:17):
stuff, remediated.
Aaron Harmon (11:21):
And then those will trigger a follow up audit,
I'm assuming, after the end tomake sure that they're all Yeah,
it's been closed out.
Amanda Johnston (11:27):
Yep. Typically, there will be a closeout audit,
and then that would hopefullytrigger the resolution of the
warning letter. So it'd belifted. And to your point, I
think Dr. Reddy is it was fiveyears. I mean, it can be at
Medtronic, I think it was wewere there, I think it was seven
years, like some of them arejust very long, depending on
what the issues are, and howmany times FDA is coming into
(11:50):
audit, and if they're findingmore things. So it can be a
multi million dollar multi yearproject, or disruption, I guess
for the company.
Aaron Harmon (12:01):
Is this like a house metaphor? I've remodeled
my home several times. And everytime I feel like it would have
been so much easier if it hadbeen like a build from scratch,
and build it right from thebeginning versus trying to fix
it later.
Amanda Johnston (12:13):
That's yeah, that's so true. And it's easy to
think about that, you know, likeyou and I talking about that.
But when you're starting out,really getting the labeling
correct, and making sure youhave kind of quality assurance
and quality and thinking throughall the different, you know,
risks and foreseeable, you know,misuse that's just exemplifies
the importance of that forthought.
Aaron Harmon (12:35):
So, in the case of Dr. Reddy, they ended up getting
sued by two separate partiesafter the warning letter was
issued. Is that something you'veseen typically? Or is that more
of an abnormality with Dr.
Reddys lab,
Amanda Johnston (12:47):
we actually see this a lot. So we do see
lawsuits coming after a companyreceives a warning letter. So in
the case of Dr. Reddys, I thinkthey settled for $9 million in
one of them. But it was a shellshareholder class action
lawsuit. And this is kind of atrend we see. Oftentimes, when a
company gets a warning letter,there will be a shareholder
(13:10):
class action suit following. Andso in this case, the
shareholders alleged that Dr.
Reddys had made false andmisleading statements about the
company's Compliance Statusobservations that they had
during inspections. And thenalso with regards to the
remediation efforts that werebeing done for the 483s, and
delays in production. So we areseeing this, I think, I'm not
(13:32):
gonna say it happens every timebut we do see it a lot. If you
think about it, warning lettersare publicly available. And FDA
lists out in a nice, neatpackage all their concerns and
all the bad things that theyfound about your company and
your products and your qualitysystem. So plaintiffs attorneys
are often eager to pounce onthose and use them as the basis
(13:56):
for lawsuits. We see shareholderclass actions, we see consumer
class actions, maybe bringingactions under consumer
protection lawsuits. So if FDAhas an issue with the labeling
or claims made, will seeconsumer like FTC and state law
state consumer protectionlawsuits saying that, hey, this
is false and misleading productliability. If there's a design
(14:20):
issue or a design flaw that FDAbelieves exists, we'll see
product liability cases andclass actions from that. And
then again, if any of the factsdraw the attention of the
Department of Justice, we maysee follow on DOJ
investigations. And with those,again, we're talking about
Federal False Claims Act,potentially the federal anti
(14:42):
Kickback Statute, which have awhole host of other penalties
that could be imposed if youknow it rises to that level, and
you can actually be excludedfrom parties Putting in federal
health care programs throughsome of those settlements, which
really is a business Ender formost companies. We've also seen
(15:02):
that, you know, in addition togetting sued a company getting
sued after receiving a warningletter, we've also seen some
kind of piggybacking of suingcompetitors that may be doing
something similar. So it's avery, yeah, it's very
interesting. But I, I'd say thisis becoming common that we'll
see lawsuits following warningletters, and I think it's the
(15:26):
plaintiffs bar is, it's an easyway to kind of piggyback on what
the government has alreadyfound, because once you get to
the point of a warning letter,presumably, there's been some
discussions 483, potentially.
And they're there to the pointwhere these are probably solid
(15:46):
bases for non compliance oralleging non compliance with FDA
regulations. So yeah, I mean,the lawsuits, and the
settlements can end up beingmuch more expensive to accompany
in terms of disrupting businessand time, and resources and
effort than just, you know,responding to a warning letter
and executing any remediationactivities that are required for
(16:09):
that activity.
Aaron Harmon (16:10):
So in terms of like, preventing a warning
letter, one thing I've seen isI'll read through a warning
letter, and they'll be astatement like, in response to
our 43, you stated this inbusiness, we do not agree, etc.
So if you get that 43 Notice,are you able to maybe mitigate
getting a warning letter bythis? How you respond to that?
(16:31):
43?
Amanda Johnston (16:32):
Yeah, I mean, it definitely is kind of an art
in responding to 40 threes, oreven if you get questions back
from a reviewer with asubmission or questions about an
MDR, that was reported, you wantto have somebody writing that
knows the audience they'rewriting for, you know, not being
(16:54):
defensive, owning up to kind ofissues that FDA may have found,
and really being kind ofproactive, start fixing things
right away. So yeah, I wouldsay, in most cases, there's,
there's definite steps that youcan take to mitigate the chance
that you'll get a warningletter. But sometimes, in my
experience, if FDA, you know,has an issue, they're going to
(17:17):
keep escalating it. And even ifyou, you know, all hands on
deck, and make progress quickly,there are some like design
changes, for example, you can't,you can't push those through,
maybe as fast as FDA would likeyou to. But yeah, so getting
everybody on board, as soon aspossible kind of all hands on
(17:37):
deck who needs to be involved,parsing out the warning letter,
getting somebody who knows who'sbeen there before, to help you
would be really helpful, whetherit's an outside firm or somebody
within, you know, regulatoryaffairs or quality. And just
being being careful about howit's written, being objective,
being reasonable, not overcommitting, writing, really just
(18:03):
the facts, and trying not to bedefensive. And the tone is
important. So I think a lot ofpeople, or a lot of companies, I
should say, maybe they getdefensive when they get a 483 or
if they have a question. Andthat's, I would say that's
probably not the best approachjust because you want to show
that you're collaborating. FDA,again, is a Public Protection
(18:27):
Agency, you want to show thatyou're worried about, you know,
patient safety is number one,you want to be collaborative,
you want to show that you'rewilling to work with FDA, but at
the same time, you don't need totell them everything. So it
truly isn't, it's an art, whichis is difficult to learn, if you
haven't been through it before.
And of course, you know, you'regoing to be different working
(18:50):
with different people at FDA,regardless of whether you've
been through it before. So it iskind of one of those things
where it's a study and kind ofhuman behavior. How can I convey
this fact without introducingadditional questions into the
into the mix? So yeah, I, Iguess in summary, I think it's a
(19:11):
good idea to think carefullyabout your response, whether
it's to a 43 in writing, or it'susually in writing for any of
the FDA engagements, but justbeing very cautious and
cognizant of the tone thatyou're using and kind of what
you're signing yourself up for.
Aaron Harmon (19:33):
And you mentioned the FDA and in there protecting
the public health. I thinksometimes people lose track that
it kind of goes both directionswhere they want good products on
the market for patients becausethey help patients and they do
help public health. And soAbsolutely, it's not to the FTEs
advantage to shut down abusiness or remove products from
(19:53):
the market if they're effectiveand good.
Amanda Johnston (19:55):
Absolutely.
100%. I mean, they they don'tand that's why we are And we
rarely see a forced recallbecause FDA doesn't want to take
away products that arebenefiting patients like that is
not, that's not their goal.
Their goal is to protect patientsafety, protect the public
health, make sure that companiesare putting products on the
(20:17):
shelves that are safe andeffective.
Aaron Harmon (20:19):
So you work for a law firm. If people need
support, how do they reach outto you?
Amanda Johnston (20:24):
Yeah, absolutely. So and I think I
mentioned earlier, but I workfor Gardner law. And we are a
kind of a small boutiquesophisticated firm that caters
only to FDA regulatedindustries. So if you have
questions, whether it'sregulatory, whether it's
strategy, engaging with the FDA,we're all former in house legal
(20:46):
slash compliance slashregulatory experts. So we've all
been there. And we've all kindof been in the trenches. If
anyone needs help, you know,questions. We have a website,
it's www dot Gartner dot law.
And you can kind of take a lookthrough there, see our practice
areas, we actually haveregulatory alerts that we put
(21:08):
out every month that has, theyhave a ton of good information
on various topics that are ofinterest and are of help to the
industry. So I'd encourage youguys to look on the website and
see if there's, you know,anything that may be helpful for
you. If you have any questions,feel free to reach out. My name
is Amanda Johnston again, and myemail and phone number on the
(21:31):
website. And Mark Gardner is thedirecting attorney. And we are
growing and it's just been veryexciting. I've been at Gartner
law for about two and a halfyears. And just great group of
people super smart, super sharp.
We understand kind of the thedynamics of being in a business,
(21:54):
which I believe sets us apartfrom some of the bigger law
firms that that do what we
Aaron Harmon (21:58):
do. And that's why I want you on the episode.
Amanda Johnston (22:01):
Yes.
Aaron Harmon (22:02):
So is it fair to say that in law and regulatory
preventative medicine is thebest medicine? So as a lawyer
don't come to you when it's toolate?
Amanda Johnston (22:13):
Earlier, the better? Yeah, absolutely. I
mean, this is one of thosethings where yeah, you kind of
it's an insurance policy. Andyou're you know, you want to set
up your policies and yourprocedures and your quality
system and your complianceprogram, so that you mitigate
the chances or you mitigaterisks associated with having to
deal with a warning letter oreven a 483. And, again, 483s are
(22:38):
pretty common. I mean, a lot ofcompanies get them. But it's
really how you handle them andhow you react to them and kind
of how you're engaging with theagency that can determine
whether it could escalate or itcould go away. And I think
that's really important to thinkproactively about about
compliance, and FDA, FDAcompliance in particular in this
(23:00):
space.
Aaron Harmon (23:01):
Well, thank you for being on the show. Yeah,
Amanda Johnston (23:03):
thank you. It was great. Chatting with fellow
regulatory nerd. I love it.
Aaron Harmon (23:09):
Thank you for tuning in. And stay tuned for
the next episode of Inside Outquality. We hope you enjoyed
this episode. This was broughtto you thanks for South Dakota
biotech Association. If you havea story you'd like us to explore
and share, let us know byvisiting www. SD bio.org. Also,
if you live in the Sioux Fallsarea, check out QUIBIT a local
(23:29):
Quality Assurance ProfessionalsNetwork. You can find out more
about QUIBIT by clicking on thelink on our website too. Thanks
for listening
Hi, I'm Aaron Harman and this is inside out
(00:02):
quality, a podcast about reallife events and experiences
shared by our guests of whenthings have gone wrong, and how
we can learn from them to buildbetter products, companies and
improve lives through aneffective quality system. FDA
warning letters, quality nerdslove to read these. It's like
the obituary section of thenewspaper for quality assurance.
(00:22):
And why do we care so much? Ihave two reasons. First, we can
see the mistakes others make,and hopefully not make those as
well. And second, it's a way tounderstand the FDA
interpretation of theregulations. Here's a quick
overview of the FDA auditprocess. First, they arrive at
your FDA registered business andprovide you with a 482 form,
which is a notice of inspection.
Next, they perform theirinspection if they see anything
(00:44):
objectionable, they issue a 483form at the end, which lists
their findings. Next, theyperform their inspection if they
see anything objectionable. Theyissue a 483 form at the end
which lists our findings. Thefirm then takes corrective and
preventive actions to correctthe findings and life goes on.
If the corrections that areproposed are not adequate, or
(01:05):
the issues are too problematic.
The FDA issues a warning letter.
In 2015, Dr. Reddys laboratoriesreceived a warning letter based
on FDA audits of three sites inIndia. The issue stemmed from
quality control and qualityassurance problems. The FDA
closed that letter was finalizedin 2020. In quality we think a
lot about warning letters, butthis episode focuses on what
(01:26):
happens after the firm receivesthe warning letter productor
ready when the warning letterwas announced their share prices
fell almost 15%. They receivedtwo separate lawsuits against
them one resulting in a $9million settlement. And it took
five years to fix our qualitysystem and close out the warning
letter. To discuss the falloutof warning letters from the FDA.
(01:46):
We are joined by managingattorney Amanda Johnson from
Gartner law. The man has over 10years experience in the space of
FDA compliance and joins ustoday. Welcome to Inside Out
quality, Amanda.
Amanda Johnston (01:59):
Thank you.
Thanks for having me.
Aaron Harmon (02:02):
So first of all, how did you end up practicing
law and working in regulatoryaffairs?
Amanda Johnston (02:07):
Yeah, so I actually went to undergrad and
had a got a bachelor's incriminology and realize that I
could really only be about aprobation officer or a police
officer. So I decided to go tolaw school not really knowing
what I wanted to do. But I havetwo younger sisters that have
chronic lifelong healthcondition. So I kind of grew up
(02:29):
in the healthcare space and inhospitals and with health care,
being kind of a primary topic.
And so in law school, I decidedto take an FDA law course. And I
actually loved it. And I becamevery interested in
administrative law andspecifically FDA regulations.
And then also health law. So Iended up concentrating in health
law and bioethics at theUniversity of Minnesota law
(02:52):
school, and they have a reallygood program with the School of
Public Health. And they have alike a medical device Innovation
Consortium that they you know,we have such a high number of
medical device companies here inMinnesota. So it they really
tried to develop that talent. Iwas also a research assistant
for a renowned FDA attorney anddid some amazing research on
(03:14):
like the recall process and 510K process. And so that's kind of
how I got into the FDA space.
After I graduated law school, Igot a job in compliance, and
then ended up at Medtronic whereI was in regulatory affairs. I
loved Regulatory Affairs, Istill do. But I really wanted to
(03:38):
gain some more legal andcompliance experience. And so I
took a position at a medicaldevice company in the compliance
function, worked there for a fewyears, but still always knew
that I wanted to practice FDAlaw. So I joined Gartner law,
and in June 2019, and you know,bend their sense love what I do,
we, you know, are a small,sophisticated boutique firm that
(04:01):
caters to companies that areregulated by the FDA. So we have
a such a wide variety of clientsfrom, you know, single person
startups to multi billion dollarcompanies, and just so many
different clients, so manydifferent questions that come
up, really in the area of FDA,you know, regulatory
submissions, quality privacy,and anti fraud, compliance.
(04:24):
That's kind of how I ended up inthe space.
Aaron Harmon (04:26):
So you're one of the few people that says, I
really find FDA regulations.
Interesting.
Amanda Johnston (04:31):
Yes, I am a total regulatory nerd. I love
it. That is me. Self proclaimed.
Aaron Harmon (04:39):
There's not that many of us. It's kind of
Amanda Johnston (04:42):
like a rare honor. It is it really is.
Aaron Harmon (04:46):
So and in terms of these FDA warning letters, they
themselves sound a bit scary,but what are all the possible
consequences that can can fallout from a warning letter?
Amanda Johnston (04:56):
Yeah, that's a good that's a good question. So
you know, a lot of timescompanies view warning letters
as kind of a slap on the wristor they have in the past, at
least. And now I don't thinkcompanies really grasp kind of
all the consequences that comeafter. I mean, obviously,
there's going to be someremediation activities. I've
lived through warning lettersseveral. So I know kind of a all
(05:19):
hands on deck. What do we needto do to get this resolved by
you know, X date, there's allthat remediation activities that
need to take place to appeasethe FDA and get it resolved. But
there's also some additionalconsequences that can severely
disrupt business, FDA suspendsissuing certificate of foreign
(05:39):
governments or CFGs. So if youhave a warning letter that could
interfere with your ability toactually ship it outside and
sell outside the US. So I knowthat can be a big disruption,
FDA also typically will suspendproduct submissions. So if you
have something under review,they will suspend that. So those
are to kind of just not alwaysas a parent, but also just
(06:02):
thinking about, you know, if theconcerns in the in the warning
letter are not addressed, orresolved to FDA satisfaction,
essentially, within the timelinethat they want you to complete
it by, it will escalate. Andthere's kind of a number of
things that FDA has a whole hostof enforcement tools in their
tool belt, so to speak, thatthey can choose to use, if they
(06:23):
if it's warranted, they couldforce a recall, that's not
common, but they could ask youto do a recall if they believe
the concerns are, are such thatit would impact patient safety,
or there's quality issues, theycan force, you know, they can
forfeit products or does requireyou to destroy them, they could
even withdrawal productapprovals or clearances, or
(06:44):
continuous suspension of newproducts, FDA can also issue bad
press releases against you or,you know, bad, bad publicity.
And, you know, obviously, awarning letter in itself brings
some some bad publicity toaccompany. But just thinking,
you know, FDA does have theoption to issue their own safety
alert or press on a topic. Andthen depending on the facts, I
(07:08):
mean, FDA could ask theDepartment of Justice or the DOJ
to get involved. So FDA is not,you know, a law enforcement
agency, they their their missionreally is to protect the public
health. So if it becomes amatter or if you know, they have
some facts that they believethat could rise to the level of
a criminal or civilinvestigation or a DOJ action,
(07:30):
they could get them involved.
Consent Decree is one of themore common I guess, tools that
you would see in this area,which I've also lived through.
So that's basically an agreementwith the Department of Justice
that you are to do certainthings. So it's kind of a step
above a warning letter. And it'sonly if you know, if you think a
warning letter is disruptive toa business, that consent decree
is even more disruptive. Youknow, they could issue
(07:54):
disgorgement of profits,restitution damages, they could
seize products. So just thinkingabout, you know, get a warning
letter, it's not just a slap onthe wrist anymore, there's kind
of a whole host of ofconsequences that can that can
come up that a lot of companiesdon't think about.
Aaron Harmon (08:12):
When you mentioned, the Department of
Justice. One of the earlierepisodes we covered was a case
of moldy HEPA filters. And partof that resulted in a $10
million fine from the Departmentof Justice, but it was preceded
by the warning letter and theFDA audit revealed everything.
Yep.
Amanda Johnston (08:29):
Yeah, we do see that if the facts are such that
they want to make it a messageto the industry that those
actions are taken, we do seethat there were three recent
settlements, I believe in July,they were all with the DOJ. But
one of them was a criminal fraudcase. And they were all related
to quality issues that weresettled. The DOJ based on
(08:53):
quality issues, so like failureto issue a recall when FDA
thought they should have thatthose kinds of things. So we are
seeing more and more of that thegovernment is using actually the
False Claims Act to prosecutethat on the on the DOJ side.
Aaron Harmon (09:07):
Yeah. And it's just out of curiosity. I
typically think about the Food,Drug and Cosmetic Act. But is
that something out of theFederal Trade Act?
Amanda Johnston (09:15):
So this is actually a fact the Federal
False Claims Act is broader thanjust the healthcare industry.
And what it essentiallyprohibits is submitting a false
claim for payment to thegovernment. So I think it
originally was enacted back, Ican't remember which war it was.
Don't quote me on these, but toprevent the government from
(09:38):
being basically defrauded formilitary supplies. So the kind
of legal theory there is that inthis example, I think St. Jude
was one of the companies thatsettled in July, or they
announced it in July. They wereselling a product that had a
faulty battery, allegedly, andthe government would not have
(09:59):
paid for it. So St. Jude soldthese implantable medical
devices to a doctor, a doctorthen billed Medicare for it. And
the government was saying wewould not have paid for those
products through Medicare had weknown it was defective. And so
it's just an interesting legaltheory that we're we've been
seeing. But yeah, so that is afederal law that applies, you
(10:21):
know, broader than just themedical device, healthcare
industry.
Aaron Harmon (10:25):
But also exemplifies that you have to
think outside of Yeah, directlyhealthcare regulations and law.
Amanda Johnston (10:31):
Exactly, exactly.
Aaron Harmon (10:34):
You mentioned radiation kind of right away
from my understanding ofremediation, the FDA will do
their audit, they will findthese things that if they don't
agree with the record them inthe 483, or warning letter, and
then you got a time window ofsome sort, or have to have
action plan in place for howyou're going to correct all of
those things to get the warningletter lifted. Is that correct?
Amanda Johnston (10:55):
That's correct.
Yeah, depending I think it'sactually like 15 days that you
have to provide a plan forwarning letters may have
different I don't know if that'slike codified in a regulation,
but they will give you kind of adeadline or a timeline to at
least respond with plans. Andthen they will, there will be
set expectations in terms of howquickly they want you to get
(11:17):
stuff, remediated.
Aaron Harmon (11:21):
And then those will trigger a follow up audit,
I'm assuming, after the end tomake sure that they're all Yeah,
it's been closed out.
Amanda Johnston (11:27):
Yep. Typically, there will be a closeout audit,
and then that would hopefullytrigger the resolution of the
warning letter. So it'd belifted. And to your point, I
think Dr. Reddy is it was fiveyears. I mean, it can be at
Medtronic, I think it was wewere there, I think it was seven
years, like some of them arejust very long, depending on
what the issues are, and howmany times FDA is coming into
(11:50):
audit, and if they're findingmore things. So it can be a
multi million dollar multi yearproject, or disruption, I guess
for the company.
Aaron Harmon (12:01):
Is this like a house metaphor? I've remodeled
my home several times. And everytime I feel like it would have
been so much easier if it hadbeen like a build from scratch,
and build it right from thebeginning versus trying to fix
it later.
Amanda Johnston (12:13):
That's yeah, that's so true. And it's easy to
think about that, you know, likeyou and I talking about that.
But when you're starting out,really getting the labeling
correct, and making sure youhave kind of quality assurance
and quality and thinking throughall the different, you know,
risks and foreseeable, you know,misuse that's just exemplifies
the importance of that forthought.
Aaron Harmon (12:35):
So, in the case of Dr. Reddy, they ended up getting
sued by two separate partiesafter the warning letter was
issued. Is that something you'veseen typically? Or is that more
of an abnormality with Dr.
Reddys lab,
Amanda Johnston (12:47):
we actually see this a lot. So we do see
lawsuits coming after a companyreceives a warning letter. So in
the case of Dr. Reddys, I thinkthey settled for $9 million in
one of them. But it was a shellshareholder class action
lawsuit. And this is kind of atrend we see. Oftentimes, when a
company gets a warning letter,there will be a shareholder
(13:10):
class action suit following. Andso in this case, the
shareholders alleged that Dr.
Reddys had made false andmisleading statements about the
company's Compliance Statusobservations that they had
during inspections. And thenalso with regards to the
remediation efforts that werebeing done for the 483s, and
delays in production. So we areseeing this, I think, I'm not
(13:32):
gonna say it happens every timebut we do see it a lot. If you
think about it, warning lettersare publicly available. And FDA
lists out in a nice, neatpackage all their concerns and
all the bad things that theyfound about your company and
your products and your qualitysystem. So plaintiffs attorneys
are often eager to pounce onthose and use them as the basis
(13:56):
for lawsuits. We see shareholderclass actions, we see consumer
class actions, maybe bringingactions under consumer
protection lawsuits. So if FDAhas an issue with the labeling
or claims made, will seeconsumer like FTC and state law
state consumer protectionlawsuits saying that, hey, this
is false and misleading productliability. If there's a design
(14:20):
issue or a design flaw that FDAbelieves exists, we'll see
product liability cases andclass actions from that. And
then again, if any of the factsdraw the attention of the
Department of Justice, we maysee follow on DOJ
investigations. And with those,again, we're talking about
Federal False Claims Act,potentially the federal anti
(14:42):
Kickback Statute, which have awhole host of other penalties
that could be imposed if youknow it rises to that level, and
you can actually be excludedfrom parties Putting in federal
health care programs throughsome of those settlements, which
really is a business Ender formost companies. We've also seen
(15:02):
that, you know, in addition togetting sued a company getting
sued after receiving a warningletter, we've also seen some
kind of piggybacking of suingcompetitors that may be doing
something similar. So it's avery, yeah, it's very
interesting. But I, I'd say thisis becoming common that we'll
see lawsuits following warningletters, and I think it's the
(15:26):
plaintiffs bar is, it's an easyway to kind of piggyback on what
the government has alreadyfound, because once you get to
the point of a warning letter,presumably, there's been some
discussions 483, potentially.
And they're there to the pointwhere these are probably solid
(15:46):
bases for non compliance oralleging non compliance with FDA
regulations. So yeah, I mean,the lawsuits, and the
settlements can end up beingmuch more expensive to accompany
in terms of disrupting businessand time, and resources and
effort than just, you know,responding to a warning letter
and executing any remediationactivities that are required for
(16:09):
that activity.
Aaron Harmon (16:10):
So in terms of like, preventing a warning
letter, one thing I've seen isI'll read through a warning
letter, and they'll be astatement like, in response to
our 43, you stated this inbusiness, we do not agree, etc.
So if you get that 43 Notice,are you able to maybe mitigate
getting a warning letter bythis? How you respond to that?
(16:31):
43?
Amanda Johnston (16:32):
Yeah, I mean, it definitely is kind of an art
in responding to 40 threes, oreven if you get questions back
from a reviewer with asubmission or questions about an
MDR, that was reported, you wantto have somebody writing that
knows the audience they'rewriting for, you know, not being
(16:54):
defensive, owning up to kind ofissues that FDA may have found,
and really being kind ofproactive, start fixing things
right away. So yeah, I wouldsay, in most cases, there's,
there's definite steps that youcan take to mitigate the chance
that you'll get a warningletter. But sometimes, in my
experience, if FDA, you know,has an issue, they're going to
(17:17):
keep escalating it. And even ifyou, you know, all hands on
deck, and make progress quickly,there are some like design
changes, for example, you can't,you can't push those through,
maybe as fast as FDA would likeyou to. But yeah, so getting
everybody on board, as soon aspossible kind of all hands on
(17:37):
deck who needs to be involved,parsing out the warning letter,
getting somebody who knows who'sbeen there before, to help you
would be really helpful, whetherit's an outside firm or somebody
within, you know, regulatoryaffairs or quality. And just
being being careful about howit's written, being objective,
being reasonable, not overcommitting, writing, really just
(18:03):
the facts, and trying not to bedefensive. And the tone is
important. So I think a lot ofpeople, or a lot of companies, I
should say, maybe they getdefensive when they get a 483 or
if they have a question. Andthat's, I would say that's
probably not the best approachjust because you want to show
that you're collaborating. FDA,again, is a Public Protection
(18:27):
Agency, you want to show thatyou're worried about, you know,
patient safety is number one,you want to be collaborative,
you want to show that you'rewilling to work with FDA, but at
the same time, you don't need totell them everything. So it
truly isn't, it's an art, whichis is difficult to learn, if you
haven't been through it before.
And of course, you know, you'regoing to be different working
(18:50):
with different people at FDA,regardless of whether you've
been through it before. So it iskind of one of those things
where it's a study and kind ofhuman behavior. How can I convey
this fact without introducingadditional questions into the
into the mix? So yeah, I, Iguess in summary, I think it's a
(19:11):
good idea to think carefullyabout your response, whether
it's to a 43 in writing, or it'susually in writing for any of
the FDA engagements, but justbeing very cautious and
cognizant of the tone thatyou're using and kind of what
you're signing yourself up for.
Aaron Harmon (19:33):
And you mentioned the FDA and in there protecting
the public health. I thinksometimes people lose track that
it kind of goes both directionswhere they want good products on
the market for patients becausethey help patients and they do
help public health. And soAbsolutely, it's not to the FTEs
advantage to shut down abusiness or remove products from
(19:53):
the market if they're effectiveand good.
Amanda Johnston (19:55):
Absolutely.
100%. I mean, they they don'tand that's why we are And we
rarely see a forced recallbecause FDA doesn't want to take
away products that arebenefiting patients like that is
not, that's not their goal.
Their goal is to protect patientsafety, protect the public
health, make sure that companiesare putting products on the
(20:17):
shelves that are safe andeffective.
Aaron Harmon (20:19):
So you work for a law firm. If people need
support, how do they reach outto you?
Amanda Johnston (20:24):
Yeah, absolutely. So and I think I
mentioned earlier, but I workfor Gardner law. And we are a
kind of a small boutiquesophisticated firm that caters
only to FDA regulatedindustries. So if you have
questions, whether it'sregulatory, whether it's
strategy, engaging with the FDA,we're all former in house legal
(20:46):
slash compliance slashregulatory experts. So we've all
been there. And we've all kindof been in the trenches. If
anyone needs help, you know,questions. We have a website,
it's www dot Gartner dot law.
And you can kind of take a lookthrough there, see our practice
areas, we actually haveregulatory alerts that we put
(21:08):
out every month that has, theyhave a ton of good information
on various topics that are ofinterest and are of help to the
industry. So I'd encourage youguys to look on the website and
see if there's, you know,anything that may be helpful for
you. If you have any questions,feel free to reach out. My name
is Amanda Johnston again, and myemail and phone number on the
(21:31):
website. And Mark Gardner is thedirecting attorney. And we are
growing and it's just been veryexciting. I've been at Gartner
law for about two and a halfyears. And just great group of
people super smart, super sharp.
We understand kind of the thedynamics of being in a business,
(21:54):
which I believe sets us apartfrom some of the bigger law
firms that that do what we
Aaron Harmon (21:58):
do. And that's why I want you on the episode.
Amanda Johnston (22:01):
Yes.
Aaron Harmon (22:02):
So is it fair to say that in law and regulatory
preventative medicine is thebest medicine? So as a lawyer
don't come to you when it's toolate?
Amanda Johnston (22:13):
Earlier, the better? Yeah, absolutely. I
mean, this is one of thosethings where yeah, you kind of
it's an insurance policy. Andyou're you know, you want to set
up your policies and yourprocedures and your quality
system and your complianceprogram, so that you mitigate
the chances or you mitigaterisks associated with having to
deal with a warning letter oreven a 483. And, again, 483s are
(22:38):
pretty common. I mean, a lot ofcompanies get them. But it's
really how you handle them andhow you react to them and kind
of how you're engaging with theagency that can determine
whether it could escalate or itcould go away. And I think
that's really important to thinkproactively about about
compliance, and FDA, FDAcompliance in particular in this
(23:00):
space.
Aaron Harmon (23:01):
Well, thank you for being on the show. Yeah,
Amanda Johnston (23:03):
thank you. It was great. Chatting with fellow
regulatory nerd. I love it.
Aaron Harmon (23:09):
Thank you for tuning in. And stay tuned for
the next episode of Inside Outquality. We hope you enjoyed
this episode. This was broughtto you thanks for South Dakota
biotech Association. If you havea story you'd like us to explore
and share, let us know byvisiting www. SD bio.org. Also,
if you live in the Sioux Fallsarea, check out QUIBIT a local
(23:29):
Quality Assurance ProfessionalsNetwork. You can find out more
about QUIBIT by clicking on thelink on our website too. Thanks
for listening
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