Remarks as Prepared for Delivery
Good morning. Thank you, Bob, for that introduction. And thank you to FDLI for inviting me to speak today. It’s an honor to join so many respected business leaders, industry experts, attorneys and government colleagues to discuss some of the accomplishments of the Department of Justice’s Consumer Protection Branch over the past year.
As all of you know, the past year has presented numerous challenges associated with the ongoing pandemic. But through the efforts of many in this room, the past year also has seen incredible achievements in medicine — with American industry and government working together to develop and distribute life-saving vaccines and treatments.
The past year also has been one of considerable activity for the Consumer Protection Branch. Maintaining its focus on protecting Americans’ health, safety and economic security, the branch has worked hard to deliver results. The branch also has continued to grow — indeed, with more than 90 prosecutors and more than 100 support personnel, the branch has transformed from the small office that many of you knew just a few years ago into a large and sophisticated enforcement component of the Department of Justice. Consumer Protection Branch attorneys have brought criminal and civil enforcement actions that have resulted in multiple significant judgments and secured billions of dollars in fines, forfeitures and penalties. Branch attorneys also have worked hard to defend the Food and Drug Administration (FDA) in court, handling a broad array of challenges to agency programs, actions and policies.
While the branch has engaged in a wide range of work over the last year, I would like to speak today about four areas of particular focus during past several months: COVID fraud, opioids, clinical trial fraud and FDA defensive litigation. In each area, the branch has acted assertively to deter misconduct — especially corporate misconduct — and to advance the United States’ interests. And each of these areas will continue to be a priority for the branch going forward.
Thwarting unlawful conduct related to the COVID-19 pandemic remains a top priority for the Department of Justice and the Consumer Protection Branch. Consistent with Attorney General Garland’s directive to bring dedicated and coordinated attention to COVID fraud, the branch this year used a wide range of legal authorities — both civil and criminal — to address misconduct related to the pandemic.
The Food, Drug and Cosmetic Act (FDCA) and our partnership with FDA has remained at the forefront of the branch’s efforts, especially those addressing fake and unapproved treatments and cures. The companies and individuals peddling such products are trafficking in misinformation, leading consumers to put faith in falsehoods instead of sound medical treatments that have been scientifically proven to be safe and effective. In response, the branch and its U.S. Attorney’s Office partners have brought multiple enforcement actions during the pandemic.
In addition, consistent with our responsibility within the Department of Justice to handle investigations of national significance involving potential FDCA violations, the branch is investigating various pharmaceutical corporations, executives and individuals who may have manufactured or distributed adulterated or misbranded COVID-related products.
The branch also collaborated frequently throughout the past year with the Federal Trade Commission (FTC) to address COVID fraud. As some of you may know, the Federal Trade Commission Act allows the FTC to pursue equitable relief independently, but requires the agency to refer civil-penalty actions to the Department of Justice. Once referred, the department may accept the actions, or decline them and thereby allow the FTC to litigate the actions. The Consumer Protection Branch receives all FTC civil-penalty referrals and litigates those that the department accepts. In the wake of the Supreme Court’s recent AMG decision limiting the scope of the FTC’s equitable powers, the FTC has referred an increased number of civil-penalty actions to the department, including under a new statute focused on COVID-related fraud.
The COVID-19 Consumer Protection Act, which Congress enacted in December 2020, prohibits deceptive acts or practices associated with the treatment, cure, prevention, mitigation or diagnosis of COVID-19. Violations of the COVID-19 Consumer Protection Act also are considered unfair or deceptive acts or practices under the FTC Act, and are subject to substantial civil penalties.
Recent cases brought pursuant to the COVID-19 Consumer Protection Act have sought relief for American consumers. For example, in Missouri, a medical provider and his company engaged in extensive online marketing of Vitamin D-3 and zinc products as purportedly preventing or treating COVID-19. Branch attorneys sought and obtained preliminary injunctive relief to stop the defendants from continuing to promote their products as preventing or treating COVID-19. Branch attorneys also are seeking permanent injunctive relief, civil penalties and equitable monetary relief.
As the pandemic continues to unfold, the department expects that pandemic-related fraud schemes seeking to exploit consumers will continue to evolve. But as those schemes develop, the Consumer Protection Branch and its partners will be prepared and well-equipped to respond.
Moving from pandemic to epidemic: the CDC reported more than 100,000 overdose deaths during the 12-month period ending in April 2021. Notwithstanding the significant attention and public resources devoted to this crisis in recent years, that figure represents an increase of 28.5% from the 78,056 deaths during the same period the year before. And opioid overdoses are responsible for many of these deaths.
The Consumer Protection Branch remains committed to holding responsible culpable entities and individuals up and down the prescription opioid supply chain. This includes manufacturers, distributors, pharmacies, doctors and pharmacists. In doing so, the branch has been using both civil and criminal tools. The Drug Enforcement Administration (DEA) is a critical partner in this work, and the Consumer Protection Branch’s efforts have benefitted from close collaboration between branch attorneys and numerous DEA personnel embedded within the branch.
Last year, the department filed suit against Walmart Inc., alleging nationwide violations of the Controlled Substances Act in the distribution and dispensing of prescription opioids. And the branch and its U.S. Attorney’s Office partners also secured a guilty plea from Purdue Pharma LP to three felony charges and to a combined criminal and civil liability in excess of $8 billion for misconduct associated with its drug OxyContin. These types of cases can be challenging. But as Deputy Attorney General Monaco recently remarked, we will not refrain from pursuing difficult cases if they are supported by the law and the evidence, and are in the public’s interest.
The branch also has brought numerous injunctive and civil penalty actions against local pharmacies, pharmacists, pharmacy owners and prescribers under the Controlled Substances Act, obtaining court orders against doctors and pharmacies in Tennessee, Utah, Ohio, North Carolina and Florida to help stop the diversion of opioid products in communities around country. These actions frequently involve specific individuals responsible for misconduct — and not just companies or corporate owners.
The Consumer Protection Branch and its partners also are focused on the threat of illicit fentanyl-laced pills, which are contributing to overdose deaths across the country. Consistent with the Deputy Attorney General’s “One Pill Can Kill” campaign, the branch is seeking to identify and disrupt the pathways by which those pills are manufactured and distributed. That effort includes seeking to thwart criminals’ access to necessary chemicals and equipment, which sometimes are manufactured and distributed by established companies.
And this is a point that I would like to emphasize to the many compliance personnel in today’s audience: if you have a product that can be used to manufacture a controlled substance, it is important to know your customers and to flag unusual patterns of distribution. The department intends to hold responsible those who know or have reason to believe that their products are being used to manufacture deadly drugs.
Another area of continuing emphasis for the Consumer Protection Branch is clinical trial fraud. The branch’s Director, Gus Eyler, will be presenting tomorrow on this subject, but allow me to note here that our enforcement effort in this space has been aggressive.
Fraud in clinical trials poses significant risks to the American public. The FDA relies on the veracity of clinical trial data when making drug approval determinations, with the ultimate goal of ensuring that all FDA-approved drugs are safe and effective for their approved indications. Fabricated clinical trial data can have dangerous consequences if relied upon by the FDA, drug researchers and medical doctors when making material decisions about the safety, efficacy and clinical use of drug products.
In addition to specific harms attendant to a particular drug study in which data is fabricated, the existence of clinical trial fraud may serve to undermine confidence in the healthcare industry as a whole. The FDA — and the industry — must to be able to rely upon the accuracy of data as a general matter.
Two recent cases in southern Florida highlight the risks at issue, as well as our efforts in this area. In the first matter, five individuals have been charged in connection with a clinical trial fraud scheme perpetrated at Unlimited Medical Research of Miami, Florida. The charging documents allege that the conspirators fabricated data in a clinical trial designed to investigate the safety and efficacy of an asthma medication in children between the ages of four and eleven. Among other things, the conspirators falsified medical records to make it appear as though pediatric subjects made scheduled visits to Unlimited Medical Research, took study drugs as required, and received checks as payment – when, in fact, none of these things happened. Multiple guilty pleas have been obtained to date — as well as significant and appropriate prison terms — and one charged individual is scheduled for trial next year.
In another case, eight individuals have been charged in connection with a clinical trial fraud scheme perpetrated at Tellus Clinical Research. The charging documents allege that conspirators falsified data and medical records in connection with clinical trials intended to evaluate various medical conditions, including opioid dependency, irritable bowel syndrome and diabetic nephropathy – and that the conspirators simply “invented” clinical trial participants, although none actually existed.
These two cases represent only a sample of the branch’s clinical trial fraud enforcement efforts, and we expect to bring further actions in the coming months.
Finally, as mentioned at the outset of my remarks, the branch also defends the Food and Drug Administration, the Consumer Product Safety Commission and other consumer-protection agencies in civil litigation throughout the country. This substantial component of our practice includes the defense of cases alleging agency violations of the Administrative Procedure Act and the United States Constitution, actions related to food, drugs, medical devices, tobacco and other consumer products, and significant consumer agency policies and programs. Over the past year, these matters have involved complex legal questions regarding the FDCA, the Public Health Service Act, the Tobacco Control Act and the Consumer Product Safety Act.
In response to increased activity in this area over the past year (including a number of challenges to FDA actions taken in response to the pandemic), the branch has expanded its Defensive Litigation Team, which now includes seven attorneys who primarily handle defensive matters, as well as 14 other attorneys in the branch who handle both affirmative and defensive matters.
I want to close with a few words of thanks. First, I would like to once again emphasize the importance of our partnerships. Nearly everything the Consumer Protection Branch does depends upon close collaboration with other agencies — foremost among which, of course, is the FDA. The branch is grateful to have talented colleagues in the FDA’s Office of Chief Counsel and Office of Criminal Investigations. And our relationship with those offices has never been better.
Second, I want to thank our private-sector friends for the diligence and ingenuity that you demonstrate each day as you work to develop life-improving and life-saving products. By seeking to detect and deter the bad actors operating in the life sciences industry, we hope to make that space fairer for law-abiding companies and safer for consumers. And we value your compliance efforts and cooperation on those occasions where our paths happen to cross.
Finally, I would like to renew my appreciation for the opportunity to speak with all of you today. Each year, this conference provides an important opportunity for the Consumer Protection Branch to engage with a broad array of stakeholders, and I am grateful to be able to share some of the important recent achievements of the branch with you.