New York dietary supplement maker accused of failing to comply with cGMP regulations

At the request of the FDA, the U.S. Department of Justice filed a civil complaint against Riddhi USA Inc. of Ronkonkoma, New York, and its owner and President Mohd M. Alam, to enjoin the distribution of adulterated and misbranded dietary supplements. The complaint alleges that Riddhi and Alam prepared, packed, and held dietary supplements under conditions that failed to comply with the FDA’s current good manufacturing practice (cGMP) regulations for these products.

According to the complaint, the FDA inspected the Riddhi facility in January 2017 and found numerous significant deviations from cGMP regulations, including a failure to: (1) establish product specifications for identity, purity, strength, and composition of their finished dietary supplements; (2) conduct at least one appropriate test to verify the identity of a dietary ingredient; and (3) establish and follow written procedures for quality control operations.

The complaint further alleges that many of the cGMP deviations were the same as those observed by the FDA during a previous inspection that occurred in January 2016. The complaint notes that on April 27, 2016, the FDA issued a warning letter detailing violations of cGMP regulations observed during the 2016 inspection and that these violations are the same as those observed during the FDA’s subsequent 2017 inspection.

The complaint also alleges that the dietary supplements were misbranded under the labeling provisions of the federal Food, Drug & Cosmetic Act (FDC Act) (21 U.S.C. §301 et seq.) because the products are fabricated from two or more ingredients but fail to declare any ingredients on their product labels or labeling. Specifically, the complaint alleges that the dietary supplement Neuroxygen is misbranded because it is manufactured using soy lecithin, which contains “soy,” but soy is not listed on the product label. The complaint also alleges that the products Prenatal Formula, Osteo Gest, Neuroxygen, Inflam-Ease, and All-Ease, are misbranded because their label or labeling fails to declare the place of business of the manufacturer, packer, or distributor.

Cosmetic drug companies scarred by misbranding

A district court enjoined two individuals and two New Jersey drug companies from distributing unapproved injectable skin whitening drugs. In addition to preventing Flawless Beauty LLC and RDG Imports LLC from distributing the unapproved and misbranded drugs, the injunction requires the companies to recall and destroy all of the unapproved and misbranded injectable skin whitening drugs. The companies and individuals agreed to settle the case and be bound by a permanent injunction.


According to the complaint, in addition to making skin whitening claims, the companies’ skin whitening drug products make other unsubstantiated therapeutic claims. For example, some of the products asserted that the drugs “contribute to good liver function” and “clinically treat degenerative brain & liver diseases including Parkinsons.” The complaint also identified public health risks associated with the companies purportedly sterile injectable skin whitening drugs—nerve or blood vessel damage, blood-borne infection, superficial skin infection, cellulitis, abscess formation, and toxic systemic reactions.

The complaint asserted that the products were misbranded because they contained false or misleading information, including the false implication of FDA approval. Other labeling issues identified in the complaint include improper directions for use and the absence of “Rx” on the label.

Injunction. Until the companies meet specific remedial measures, the injunction requires them to stop importing, receiving, manufacturing, preparing, processing, packing, labeling, holding, and/or distributing unapproved drugs. The companies have 20 days to meet the mandate to recall and destroy the unapproved drugs.

Fraudsters sentenced for various schemes, medical device company settles allegations for $36M

The Department of Justice (DOJ) has continued to crack down on health care fraud in a variety of areas. From a multi-million dollar home health scheme to a mother-son pharmacy fraud team, several perpetrators have been sentenced to prison and ordered to pay restitution for their crimes.

Home health

A Detroit home health care company co-owner was sentenced to 96 months in prison for his part in a fraud scheme. Evidence presented at trial revealed that from 2006 to 2011, he and co-conspirators paid kickbacks to recruiters who passed on cash to patients in order to induce them to sign up for home health care services. Physicians also received kickbacks in exchange for referrals for home health services that were not medically necessary and not provided. This scheme ultimately caused about $33 million in losses to the federal government.

Another co-conspirator was recently sentenced to 360 months in prison for his part in the fraud scheme.

Pharmacy fraud

A mother and son team received prison sentences following their guilty pleas to conspiracy to commit health fraud through their pharmacies. The mother co-owned and operated some Miami-area pharmacies, through which she submitted false and fraudulent claims through Medicare Part D. She led a fraud scheme in which Medicare beneficiaries and patient recruiters were paid for medically unnecessary prescriptions, and various co-conspirators were directed to make kickback payments and conceal fraudulent funds. The son wrote checks to money launderers from the pharmacy in order to facilitate the kickbacks.

In their guilty pleas, the mother admitted that she caused $9.5 million in losses to the government, while the son caused losses of at least $1.5 million. She was sentenced to 120 months in prison, while he was sentenced to 30 months.

Medical devices

Biocompatibles Inc., a medical device manufacturer, pleaded guilty to misbranding an embolic device that was originally designed as a chemotherapy drug delivery device. This device had been cleared for placement in blood vessels to block or reduce blood flow as needed, but was not approved or cleared as a drug-device combination product or a drug-eluting bead. However, Biocompatibles marketed the product for drug delivery for and trained representatives to aggressively penetrate the relevant market. Biocompatibles will pay $36 million to resolve criminal and civil liability, which first stemmed from a qui tam lawsuit brought by a company professional responsible for marketing and management of Biocompatibles’ medical products.

Amarin settlement may open the door to more expansive off-label use

Dublin, Ireland based Amarin Pharma, Inc., (Amarin) and the FDA have entered into a proposed settlement in the First Amendment litigation involving Amarin’s off-label promotion of its approved cardiovascular drug Vascepa® (icosapent ethyl). Under the terms of the proposed settlement, which must be approved by the U.S. District Court for the Southern District of New York, the FDA and the U.S. government have agreed to be bound by an August 7, 2015, judicial declaration that Amarin may engage in truthful and non-misleading speech promoting the off-label use of Vascepa and that certain statements and disclosures that Amarin proposed to make to health care professionals are truthful and non-misleading.

The specific statements Amarin sought to make about Vascepa were derived largely from an FDA-approved study of Vascepa’s off-label use and FDA writings on that subject. Amarin contended, and the FDA largely conceded, that the statements were truthful and non-misleading. The FDA, however, recognizing that Amarin’s purpose in making these statements would be to promote an unapproved use of Vascepa, threatened to bring misbranding charges against Amarin if it did so. Amarin claimed that the FDA’s threat of a misbranding action chilled it from engaging in constitutionally protected truthful speech.

Amarin’s complaint

On May 7, 2015, Amarin sought preliminary relief to ensure its ability to engage in truthful and non-misleading promotion of Vascepa, free from the threat of a misbranding action. Amarin asserted in its complaint that the FDA’s current regulatory policy restricted the transmission of truthful information from manufacturer to physician about the off-label use of pharmaceuticals in a manner that violates the First Amendment of the U.S. Constitution (see Off-label speech restrictions should go overboard to fish-oil manufacturers lawsuit, Health Law Daily, May 11, 2015).

The issue of whether the FDA has authority to regulate statements about the unapproved uses of medicines has been around for some time. For example, in 2012, the Second Circuit overturned the criminal conviction of a sales representative who had promoted the off-label use of Xyrem®, a central nervous system depressant. The court held that the criminalization of the sales representative’s truthful and non-misleading statements was a violation of the sales representative’s speech rights (see Conviction for promotion of off-label use violated First Amendment, Health Law Daily, December 4, 2012).

District court ruling

On August 7, 2015, the Southern District of New York issued its ruling in favor of Amarin (see Hold your horses, FDA: no misbranding action for truthful off-label promotion, Health Law Daily, August 10, 2015). The court concluded that to avoid infringing on the First Amendment, the federal Food, Drug and Cosmetic Act must be construed by the FDA as not prohibiting or criminalizing the truthful off-label promotion of FDA-approved prescription drugs, where the off-label use itself is lawful, which the FDA had conceded.

The roadmap to Amarin’s off-label victory at the district court can be found via decisions in the last half decade that would eventually reach the U.S. Supreme Court in a matter concerning commercial speech. In Sorrell v. IMS Health, the high court concluded that commercial speech, including speech related to the marketing of drugs, is protected under the First Amendment as long it is not false or misleading (see Supreme Court favors pharmaceuticals in twin decisions, Health Law Daily, July 7, 2011).

Additional settlement terms

Additional elements of the proposed Amarin settlement include:

  • The FDA has agreed to provide Amarin with an optional preclearance provision through 2020 for new off-label claims.
  • The parties have agreed to a dispute resolution provision designed to avoid future litigation on matters arising under the settlement order.
  • The court would retain jurisdiction over the matter to ensure compliance with and resolve any future dispute arising from the settlement order.

Clinical studies will continue

Amarin announced that it remains strongly committed to completing the ongoing REDUCE-IT cardiovascular outcomes study. This study is designed to test whether Vascepa, when added to statin therapy, will significantly reduce cardiovascular risk compared to statins alone in high-risk patients with elevated triglyceride levels.

Leveraging the Amarin victory

The pharmaceutical industry has taken notice of Amarin’s First Amendment victory and may be in the process of leveraging the decision to allow for more expansive drug indications via truthful off-label promotion. For example, on September 8, 2015, Pacira Pharmaceuticals, Inc. filed a lawsuit in the same federal court, seeking to prevent the FDA from bringing an enforcement action against Pacira for what it claims is truthful and non-misleading speech concerning its sole product, Exparel® (see Commercial speech waters turn murky, Health Law Daily, October 20, 2015).