The U.S. government may be resurrecting the "Park Doctrine" as a tool to prosecute the owners of pharmacies for federal Food, Drug, and Cosmetic Act (FDCA) violations. In United States v. Park, 421 U.S. 658 (1975), the U.S. Supreme Court determined the federal government could criminally prosecute individuals in a position of authority for an organization's violations of the FDCA, as long as these individuals had enough power in the organization to prevent the violations. Under this doctrine, the government can criminally prosecute responsible individuals for a misdemeanor even if they were not aware of the circumstances surrounding the violations, or did not intend for the circumstances that led the violations to occur. The Park Doctrine is also called the Responsible Corporate Officer Doctrine.
The government seems to have used the Park Doctrine in the recent prosecution of compounding pharmacist Gary Osborn. In 2012, Gary Osborn, the owner, registered agent, sole director, pharmacist in charge and president of the compounding pharmacy ApothéCure, Inc., pleaded guilty to two misdemeanor criminal violations of the FDCA. The pleas were in connection with ApothéCure's interstate shipment of two lots of a colchicine solution. The lots were allegedly misbranded and led to the death of three people. In the factual statement that the government filed in support of the plea agreement, the government and Osborn agreed that Osborn was a responsible corporate officer of the pharmacy, the pharmacist in charge and actively directing the business activities, whose duties included oversight of employee training and quality control of drugs; that Osborn held this corporate position when the pharmacy introduced and delivered the drug in question into interstate commerce; and that the drug was misbranded and its labeling was false. Osborn was fined $100,000 and placed on probation; he was not sentenced to any jail time.
The government did not allege in the charging documents, and Osborn did not agree in the factual statement supporting his plea, that Osborn was directly or personally involved in the misbranded or labeling of the colchicine solution, which led to three deaths. Statements that Osborn knew that the misbranding and mislabeling were occurring are also conspicuously absent from the charging documents and the factual statement supporting Osborn's plea. There is also no indication that the FDA warned Osborn or the pharmacy of any FDCA violations. Acting Assistant Attorney General of the Civil Division of the Department of Justice Stuart Delery reinforced the government’s focus on holding corporate officers responsible for FDCA violations when explaining the plea. Delery stated: "This plea shows that the Department of Justice will enforce the Food, Drug, and Cosmetic Act against responsible corporate officers of companies that fail to control the quality of their products."1
The public record on this prosecution appears to suggest that the government used the Park Doctrine to prosecute Osborn. Based on the current public scrutiny that compounding pharmacies are under due to the outbreak of fungal meningitis in Massachusetts, pharmacy executives may want to review their internal procedures for compliance with the FDCA to ensure they are robust. While the existence of a compliance program is not a defense to a prosecution under the Park Doctrine, it may obviate potential criminal liability.
For Further Information
If you have any questions about this Alert, please contact Rachael G. Pontikes, Frederick R. Ball, any member of the Pharmaceutical, Medical Device, Pharmacy & Food industry group, any member of the White-Collar Criminal Defense, Corporate Investigations and Regulatory Compliance Practice Group or the attorney in the firm with whom you are in regular contact.
U.S. Department of Justice Press Release, April 24, 2012, http://www.fda.gov/ICECI/CriminalInvestigations/ucm302326.htm.