HealthpointCapital Interviews Gerald Masoudi, Co-Chair of the Food and Drug Practice Group at Covington & Burling LLP and Former FDA Chief Counsel
BY LAUREN UZDIENSKI, JUNE 15, 2009
Gerald Masoudi is a partner in Covington & Burling LLP's Washington, DC office and co-chair of the Food and Drug practice group. Mr. Masoudi most recently served as Chief Counsel of the Food and Drug Administration.
HealthpointCapital: Could you tell us about your background, how you became involved with the FDA and your role since leaving the agency?
Gerald Masoudi: I studied economics at Amherst College and then found my way to the University of Chicago Law School. After law school, I clerked for Judge Easterbrook -- a great judge and someone for whom I have enormous respect. Then, after ten years of private practice as a trial and appellate litigator, I was interested in trying something new. In 2004, I heard that FDA was seeking a new Deputy Chief Counsel, so I put in my application and was ultimately picked for the job. Within weeks of my arrival, the Chief Counsel at the time (Dan Troy) left, and I became Acting Chief Counsel. I left FDA in 2005 to take an appointment in the Antitrust Division at the Department of Justice, where I was responsible for international, appellate and policy matters. I was thrilled to be asked to return to FDA as Chief Counsel in the fall of 2007.
As Chief Counsel, I was responsible for supervising the review of regulations, guidances, enforcement letters and all criminal and civil litigation involving FDA. I had a staff of more than seventy extremely talented and dedicated lawyers, and I made many close friends during my time there. It was a wonderful professional and personal experience.
I resigned from FDA on the last day of the Administration (January 20) and spent a few months off with my wife and two young daughters (with some time spent deciding on my next job). In early May, I became a partner and co-chair of the food and drug practice at Covington & Burling LLP. I'll be working on advisory and litigation matters involving FDA regulated products. This might include advice on the regulatory status of products owned by a company that a client is considering buying; advice on product approval strategy; or dealing with FDA on a safety crisis arising from a client's products. On the litigation side, I expect to be involved in government investigations arising from the promotion of medical products as well as products liability actions and intellectual property matters.
I don't think there is another firm in the world that can match Covington's talent and reputation in food and drug law, so I feel fortunate to be a part of this team.
HC: What do you think are the biggest challenges facing the agency?
GM: FDA regulates a significant part of the US economy, including many kinds of products Americans depend on every day. If something goes wrong with a food, drug, or medical device, the consequences can be very serious; the risks vary with the kind of product. There are also many hundreds of thousands of firms selling FDA-regulated products. FDA faces the difficult task of trying to engage in risk-based enforcement across an incredibly vast portfolio of products and firms. When is a warning to a firm enough, and when must FDA pursue more severe enforcement? What kinds of problems and products merit the greatest enforcement effort, especially when resources are limited? These are the difficult questions FDA faces every day.
When it comes to the approval of products, reviewers need to consider the potential safety risks of a product, but also the importance of getting innovative products to market so that patients can benefit from those products. Safety issues can be more visible (and the subject of greater press and congressional attention) than issues with holding back innovative products from the market; sometimes I think it can be tempting to lose sight of the harm to patients who never receive treatments that are held up in the approval process. If an approved product harms a patient, that patient is easily identifiable and becomes the focus of attention. But an equally important concern, which is not as easily identifiable or as prominent in the public eye, is the concern that valuable treatments are kept out of the hands of patients who need them. Fortunately, FDA has many tools it can use to ensure that products make it to market but that patients receive sufficient information about risks of using the products to allow an informed decision.
HC: How do you predict the agency will change under the new administration?
GM: Many have predicted a more aggressive FDA, and I think that is likely. But there are so many different ways in which FDA could allocate its enforcement resources, so it is hard to predict the specific areas in which one can assume greater enforcement. The agency now has experienced leadership in place with a new Commissioner and Principal Deputy Commissioner, who will have the difficult task of deciding how to allocate the agency's resources.
One way in which some have predicted the agency will change is in the role of the Office of Chief Counsel. Specifically, there have been allegations on the Hill that review by the Chief Counsel's office has reduced the number of violation letters sent by the agency. On this view, an agency;s performance in enforcing the law should be measured by the number of times it alleges misconduct by industry. Some believe that this administration might reduce the Chief Counsel's role in such review.
I think that would be a mistake. First, I believe it is our government's obligation to allege violations of the law only when there is a firm legal and factual basis for doing so. Violation letters can harm the reputation of a company and prompt (rightly or wrongly) private lawsuits against targets of the letters. Only the agency's lawyers responsibly can make a determination that a firm or individual has violated the law. Second, if the agency sends letters of questionable legal basis, the agency's credibility will be damaged. The Department of Justice won't agree to take action through a seizure or injunction where there is not a credible legal basis; any process that allows violation letters to be sent without legal review creates a real risk that a target of the letter will ignore it, and FDA will be powerless to take action.
Ultimately, looking just at the raw number of violation letters says little about how effectively FDA is enforcing the law. The credibility that those letters carry in industry is an important measure, as well.
HC: How is the agency addressing new technologies with no regulatory precedent, such as stem cell therapies? How do you think regulation of stem cell therapies will evolve?
GM: When FDA is faced with novel situations, it must examine its legal authorities to determine whether those authorities allow regulation of the new technology. FDA may act only when it has been granted statutory authority, but it is given some deference when it interprets the scope of this authorization.
During my tenure, FDA was faced with the question of the regulatory status of transgenic animals, which are created by inserting genetic material into the DNA sequence of an animal, to create an entirely new animal.
FDA concluded that it could apply the animal drug authorities to regulate the genetic construct that was inserted at a particular location in another animal's genetic code. Regulating that construct as an animal drug gave FDA greater authority to ensure that transgenic animals that have not been demonstrated as safe to enter the food supply don't get into the food supply. Although none of FDA's authorities was a perfect fit for transgenic animals, we believed that the authorities were sufficient to regulate the new technology as an animal drug.
As to stem cell therapies, FDA will have to analyze the specific technologies at issue, including the claims made about the products, to determine the appropriate regulatory pathway for such therapies. As part of that process, FDA has held some advisory committee meetings on the subject of stem cell therapies.
HC: What is the FDA's role in product liability lawsuits?
GM: Occasionally, litigants will seek to get information about the regulatory history of products or FDA's views about those products directly from FDA in the form of depositions of FDA reviewers or document requests. In my experience, those requests were not granted (beyond what might be provided under the Freedom of Information Act). FDA prefers not to engage in those kinds of factual disputes, which can distract reviewers from the work that drew them to FDA.
FDA has gotten involved in private actions through legal briefs when FDA has felt that those lawsuits might interfere with FDA's mission and regulatory plan. This kind of involvement dates back decades. In several products liability lawsuits, FDA has argued that some claims premised on a sponsor's failure to warn of a medical product's risk are preempted by federal law. The Supreme Court recently found (in Riegel v. Medtronic) that there was broad preemption of failure-to-warn claims in the area of medical devices approved under FDA's most rigorous procedures; but in a separate case (Wyeth v. Levine) found that preemption of claims against drug manufacturers is significantly narrower. With a new administration in place and the Wyeth decision, FDA likely will not file amicus briefs arguing for preemption in these kinds of lawsuits in the near future.
HC: Should more resources be allocated to inspections? What are the challenges of inspecting sites and enforcing regulations internationally, particularly in countries like China?
GM: Because there are hundreds and hundreds of thousands of locations around the world that make or pack or hold FDA regulated products, it would be impossible for FDA to inspect them all on anything close to an annual basis. FDA must decide which facilities require the most frequent efforts and deploy its resources accordingly.
FDA has the authority under certain circumstances to inspect facilities within the United States where FDA-regulated products are manufactured or held. For example, the United States can execute search warrants or send unannounced FDA inspectors to determine whether a manufacturing facility meets good manufacturing practice requirements. FDA has tools with which it can take action if a firm refuses entry.
Abroad, however, FDA cannot enlist U.S. law enforcement to compel inspections. U.S. Marshals can't show up in China to execute a search warrant. This introduces uncertainty in enforcement against foreign products. When it comes to food products, for example, there has been debate about FDA's authority to take action when a foreign facility refuses an inspection. Although FDA can detain imported products that appear to violate the law in some respect (even when there is insufficient evidence to show conclusively an actual violation), it is far from clear that FDA could refuse entry of a food product based solely on the fact that a manufacturer of the product has refused an inspection.
While I was at FDA, the agency began moving toward a new approach to ensuring compliance with FDA requirements for imported food and animal feed products. The agency issued a draft guidance regarding the third-party certification of imported food (and implemented a pilot program of voluntary third-party certification for aquacultured shrimp). Under a third-party certification program, firms would enlist a certifying body (which could be a private firm) to conduct inspections and certify compliance with FDA requirements. If the third-party certifying firms agreed to follow FDA's recommendations (such as reporting certain violations to FDA), then FDA would take account of the third party's certification of compliance at the border. Although a certification would not bind FDA or give a guarantee of entry, it likely would lead to less FDA scrutiny at the border and a greater likelihood of entry.
Please return to HealthpointCapital.com on Tuesday for the conclusion of our interview with Mr. Masoudi.
