Courts Scrutinize FDA

The Food and Drug Administration (“FDA”) has, in recent years, embarked on a campaign to add restitution and disgorgement – remedies aimed at correcting past conduct – to its enforcement armamentarium. Several high-profile court settlements with large drug and medical device manufacturers seemed to indicate that such payments were becoming common-place. The Federal Food, Drug, and Cosmetic Act (“FDC Act”), however, neither explicitly nor implicitly grants FDA the authority to ask a court to order restitution or disgorgement. Despite this lack of statutory authority, FDA has continued its campaign, most recently against Lane Labs-USA, Inc. and RX Depot, Inc. A decision by the U.S. Court of Appeals for the District of Columbia Circuit in February 2005 gave promise of stopping FDA in its tracks. Unfortunately, a decision last month by the U.S. Court of Appeals for the Third Circuit held that a court could order restitution for violation of the FDC Act. The U.S. Court of Appeals for the Tenth Circuit is now poised to weigh in on the issue of whether FDA can pursue remedies other than those expressly or implicitly provided for in the FDC Act.

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