OK, so sometimes executives can go to jail for the mis-practice of regulatory affairs. Case in point: Howard Richman, former VP of Regulatory Affairs at Biopure.
The Biopure saga took some bizarre turns along the way, but it started simply enough. In 2003 Biopure received several pieces of negative feedback from FDA. Their trauma ward study was placed on clinical hold due to safety concerns. FDA also expressed skepticism about the validity of data in a different study.
You have to feel for them a bit. The product may not have been ready for the trauma ward, but the company sure was.
They were up that creek you don't want to be up, but you wouldn't know that from their public pronouncements, which were all roses and sunshine. Sure, we just talked with FDA... about how great the product was. Yeeeeaah, that's the ticket. Over the course of several months of pronouncements and reassurances, the stock jumped 20%.
Sure enough, it turned out that you can't BS your way into the medical marketplace and the truth found its way to the company's defrauded investors. The company exploded, a consent decree was signed with SEC and several executives have gone to jail. Richman recently made headlines by attempting to claim terminal colon cancer as a means, one assumes, of obtaining a smaller sentence. It didn't work, due at least in part to the fact that he didn't actually turn out to have terminal cancer. That lie earned him another 3 years.
Strictly speaking, it was not FDA who shut these guys down, it was SEC. But SEC serves about the same role in prosecuting corporate misconduct as the IRS played in shutting down the prohibition-era gangs. Stock fraud, like tax fraud, is a lot easier to document than the various other misdeeds at the heart of the matter. Even so, the incident helps highlight just how seriously FDA interactions are taken and how important it is to characterize them properly.
I've previously stated that the risks of jail are pretty small, and this exception goes a long way to prove the rule. This wasn't a missed line on a risk analysis or some other small mistake. This was plain old eyes-open fraud mixed with a knowing disregard for safety concerns. If that kind of behavior doesn't earn you some jail time, it would be evidence that the system is deeply broken. Those of us who manage to pursue our work in a more conscientious manner shouldn't worry too much.
Tags: Enforcement, FDA 101
