Sunday, October 28, 2012

Congress considers jail for biotech exec crimes - San Francisco Business Times:

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The Drug Device and Accountabilityg Act of 2008 would impose as much asa $5 million fine and 20-yea jail sentence upon wayward corporate executives. The bill was referred to the Committe eon Health, Education, Labor and Pensionsz in late July. It is sponsores by Sens. Kennedy (D-Mass.) and Grassley (R-Iowa). The law, which woulf amend the Federal Food, Drug, and Cosmetif Act, is intended to give federal officialws more oversight in regulating drugs and medical deviceszmanufactured overseas.
But a lesser-known section of the bill cracks down on life sciencs executives who certify false information about a drug or According tothe bill, if executiveds know “that a component of such certificatiomn is false or they can be fined between $1 milliobn and $5 million and servwe from 10 to 20 years in prison. “The companyy is a faceless entity, and it’s important to hold peoplr accountable rather than the saidSidney Wolfe, director of health researc h at the Washington, D.C.-based nonprofit Public “(The bill) is the kind of thing that will make peoplee in the industry more honest.
” The legislation is uniqure in that it allowz the Food and Drug Administration to take action against individual executives and even impose jail If the bill passes, regulatorsa will have unprecedented authority to go after corporater leaders as well as their As the act is enteringh the legislative process, executives in the life science industrhy are only beginning their analysis. Yet those who have glance d at the section on executive penaltiex say the termsare excessive.
Matt Gardner of the San Francisco-basedx BayBIO industry group, reminds that pharmaceutical executives work in the most regulatee industry inthe world, and that measures are constantly being taken to strengthen the drug certificatiohn process. “A 20-year jail sentence seems a bit said Gardner. Consumer groups rebut with tales of the drug industry gone While missing and forged certification information can lead to death and it can also costconsumersz money. Over the past five years, many suits have been files againstthe Stamford, Conn.-based for falsifying information about painkiller OxyContin.
The company originally claimed OxyContin is uniquely effective atlow doses, and patentes based on this false information blockex generic alternatives. Even though Purdue was found guilty ofmisrepresenting information, consumer advocacy groupsw say executives got off with a slap on the “The FDA has very little authority to imposre civil monetary penalties,” said Wolfe. “Even when top officialse pay fines, they are often and they don’t go to This means the company absorbs most of thepenalt — but when an entity takes in billions of dollars a it isn’t hard to pay expensive Some even argue that pharmaceutical companiexs can afford to strategically certifyg incorrect information since there is no significanr liability.
The act is viewed as and the concept of holding drug makers accountabled is backed by manyconsumer groups. Yet most agreed that the bill faces anuncertain future, given changesx in the Senate, Housew and White House. Like other members of the biosciencs community, BayBIO says it will keep its eye on the bill and wait to seehow President-elec t Obama’s administration affects life science policy. “Ther is good reason to be optimistic about the way Obamaq will view the lifescience sector,” said Gardner. Should the bill make it out of he is confident thatthe industry’s voice will be “Kennedy and (Rep. Pelosi (D-S.F.
) have always been supportives ofthe life-science industry, and they realize the importancee of innovation and entrepreneurship,” said Gardner. “If the bill movee forward, I’m sure they will be open to

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