The U.S. Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (“SEC”) recently have faced criticism for their use of Deferred Prosecution Agreements (“DPAs”) and Non-Prosecution Agreements (“NPAs”). Given that DPAs and NPAs are subject to little or no judicial scrutiny or involvement, critics are increasingly viewing them as compliance and enforcement loopholes, where life science compliance industry can circumvent DOJ prosecution.
Historically, both the DOJ and the SEC within the FDCA realm have many tools in their compliance arsenal. These tools include both civil and criminal investigation authority, prosecutorial discretion, and the imposition of penalties, and fines. Other lesser known forms of enforcement include the use of Deferred Prosecution Agreements (“DPAs”) and Non-Prosecution Agreements (“NPAs”). These agreements are essentially Settlement Agreements between the DOJ/SEC and third parties and typically “occupy a middle ground between a guilty plea that results in a company’s criminal conviction and a declination that leaves the matter to a civil or regulatory resolution.” Although similar, there is a distinction between DPAs and NPAs. In the case of DPAs, the DOJ/SEC typically commences the process by filing criminal charges in federal court For NPAs, the DOJ or SEC agrees not to file any criminal charges as long as there is good faith compliance with the terms of the settlement agreement.
Read Full Article in the October 2016 Issue of Life Science Compliance Update