Monday, July 29, 2013

United States Attorney's Manual Statement on Prosecution for Animal Drugs and Black Markets Including HGH and Animal Drugs

Under the FDCA, Congress has comprehensively regulated animal drugs. The black market for these animal drugs includes both foreign-made drugs that do not comply with FDCA requirements, and drugs banned in the United States. Targets in these investigations include smugglers, distributors to veterinarians and livestock owners, and veterinarians who compound such drugs from smuggled raw or bulk ingredients.

The FDCA's regulation of animal drugs has two central aims. One is to ensure that veterinary drugs are both safe and effective for the animals that receive them, because unsafe or ineffective drugs may result in unnecessary economic loss to livestock owners. The other aim is to insure the safety of the nation's food supply. Unapproved animal drugs, or drugs that are used in an unapproved manner, may leave dangerous chemical residues in food derived from treated animals. Such residues pose serious health risks to humans that ingest them.

The FDCA is structured to achieve its aims through two complementary approaches. One approach is to require that all "new animal drugs," 21 U.S.C. § 321(v), be approved as safe and effective by FDA before being marketed for use. 21 U.S.C. § 360b. Virtually all drugs intended for animal use are new animal drugs within the FDCA's definition and thus are required to receive FDA's approval prior to marketing. A drug lacking such approval is deemed to be adulterated under the FDCA and may not be distributed in interstate commerce. 21 U.S.C. §§ 331, 351(a)(5), 360b. The other approach is to require that all drugs be properly labeled so that all users, including laymen, can use them safely and effectively. 21 U.S.C. § 352. A drug that is not properly labeled is deemed to be misbranded and may not be distributed in interstate commerce. 21 U.S.C. §§ 331, 352.

FDA grants pre-market approval to a "new animal drug" only if its sponsor succeeds in demonstrating that the drug is safe and effective for its intended uses. To gain approval, the sponsor must submit a "new animal drug application" ("NADA") bearing extensive, scientifically rigorous data covering a number of subjects. Such subjects include the ingredients and composition of the drug; the methods and controls used in producing the drug; and the extent to which foods derived from animals treated with the drug may contain chemical residues that pose health risks to humans. 21 U.S.C. § 360b(b)(1). More specifically, a NADA must describe how the manufacturer proposes to measure chemical residues in food products derived from treated animals and must describe any restrictions on use of the drug necessary to keep such residues at safe levels.

Approval of an NADA, if granted, pertains only to those particular uses of the drug specified in the application (uses that would typically be confined to particular animals). 21 U.S.C. § 360b(a)(1). For instance, an NADA showing safety and effectiveness of a particular formulation for a disease condition in swine does not allow the manufacturer to claim similar effectiveness for the disease condition in cattle. Due to the metabolic differences in species of animals, each new condition must be the subject of an approval. Moreover, FDA can revoke approval if, at a later time, evidence demonstrates that a drug is not safe or effective for the particular uses for which it has been approved. 21 U.S.C. § 360b(e).

The extensive research, as well as laboratory and field testing, that is necessary to establish safety and efficacy is expensive. Drugs that are claimed to be the same as an approved drug, except for the fact they have been made by a different manufacturer, must still meet the rigorous NADA procedures. This requirement exists because it has been established that drugs, even though they may be of a similar chemical composition, do not necessarily work the same way. Drugs which have not been approved by FDA may be cheaper to obtain because they do not bear the overhead associated with the approval process. However, the use of a drug that lacks approval is accompanied by the very real threat that the drug may be harmful to the animal to which it is given, may not be effective, and/or may leave harmful residues in the animal's meat, milk or eggs.

In addition to the premarket approval requirements for new animal drugs, the FDCA requires that all drugs, including veterinary drugs, be properly labeled so as to assure their safe and effective use. This means that all veterinary drugs must have adequate directions which instruct users, including laymen, on numerous matters such as how to dispense the drug for the appropriate conditions and in the proper manner, dose, frequency, and duration. Without such directions, the use of a drug could result in the drug not being effective or, even worse, harmful. A drug that is not properly labeled is misbranded. 21 U.S.C. § 352.

Investigations into the black market distribution of unapproved drugs intended for use in food producing animals have revealed that individuals and companies buy, at discount prices, foreign-made drugs that do not comply with the requirements of the FDCA, and then have the drugs smuggled or otherwise illegally imported into the United States. They are then sold either as contraband, i.e., as available supplies of animal drugs widely understood to be subject to a flat prohibition on use, or as "generic equivalents" of, or substitutes for, approved animal drugs.

In other words, the animal drug black market reflects two types of economic incentives. One type of incentive is the substantial profit to be made in simply bypassing FDA's pre-market approval process. In response to this first kind of incentive, black marketeers sell substitutes (supposedly chemical equivalents) for established, approved drugs. Typically, the substitutes contain active ingredients smuggled or otherwise unlawfully imported into this country from abroad. Not having been subjected to FDA scrutiny, and not having been compounded or formulated for use under conditions meeting the high standards of pharmaceutical science, the illegal substitutes are not assured of having the same composition, purity, effectiveness, and safety as the approved formulations they purport to replace. This is true even though the approved formulations and illegal analogues may share active ingredients or possess the same or similar chemical composition. The illegal products are, however, marketed at much lower prices than the approved drugs.

The second type of economic incentive is the large profit to be made in bringing to market drugs that are effective in treating food-producing animals but that have been banned by FDA because of health risks to humans or for some other reason. In response to this second type of incentive, black marketeers again typically smuggle into the United States or otherwise unlawfully import drug substances, active ingredients in bulk, from abroad.
The FDCA's prohibitions on the distribution in interstate commerce of misbranded or adulterated animal drugs reach quite far across the chain of distribution. For example, since the FDCA defines "drug" to include any article intended for use as a component of a "drug", 21 U.S.C. § 321(g)(1)(D), bulk ingredients destined for inclusion in any new animal drug are deemed to be adulterated and misbranded unless specifically within the coverage of an approved NADA governing all aspects of the new animal drug, including identity of ingredients. 21 U.S.C. §§ 351(a)(5), 360b. Likewise, the term "new animal drug" includes pharmaceutical ingredients intended for use in an animal feed. 21 U.S.C. § 321(w)

quoted from here

Black Market

"Black-markets" exist for several types of drugs that lead to prosecutions under the Food, Drug, and Cosmetic Act (FDCA). These include new drugs that are not yet controlled substances, performance enhancing drugs, and animal drugs that are distributed outside FDA regulated channels. The issues that arise in these cases differ from issues in Controlled Substances Act cases. "Buy-bust" scenarios in these areas also raise concerns in addition to those under the Controlled Substances Act.
A.    Manufacturers and Distributors of Gamma Hydroxy Butyrate (GHB)
Manufacturers and distributors of the body-building and psychoactive drug gamma hydroxy butyrate, or "GHB", operate clandestinely. See this manual at 16 for a description of circumstances in which FDCA violations take place, 17 for sample charges, and 18 for portions of a probation letter.
B.    Human Growth Hormone
Distributing anabolic steroids or human growth hormone for muscle enhancement is unlawful. Incuded is a description of the evolution of relevant statutes, stating which are currently effective. This section should be consulted before attempting any prosecution involving human growth hormone or anabolic steroids, the latter of which are now controlled substances. Particular care must be used in prosecuting drug-dealing physicians who dispense human growth hormone. See this manual at 19.
C.    The "Buy-Bust" Prosecution
FDCA cases involving sales of illicit drugs are vastly different from Controlled Substances Act cases. Mere possession of FDA regulated drugs is not generally unlawful. Additional elements of fraudulent intent, interstate commerce, the nature and identity of the product, and "adulteration" or "misbranding" must be established. Rarely, if ever, is a "buy-bust" advisable unless considerable investigation has been conducted. A more detailed discussion of these issues is included in this manual at 20.
D.    Animal Drug Prosecutions
OCL coordinates investigations into the black market distribution of unapproved drugs intended for use in food producing animals. See this manual at 21 for a general description of the pertinent regulatory framework, 22 and 23 for sample indictments, and 24 and 25 for jury instructions. See this manual at 26 et seq. for a trial memorandum describing issues that may arise. See this manual at 28 for a memorandum regarding expert testimony, frequently required in such cases, and 29re applying the "intent to defraud FDA" felony theory to an animal drug prosecution.
[cited in USAM 4-8.220]