
[Federal Register Volume 80, Number 43 (Thursday, March 5, 2015)]
[Notices]
[Pages 12013-12016]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-05044]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2010-N-0301]


Steven M. Lynch; Denial of Hearing; Final Debarment Order

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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[[Page 12014]]

SUMMARY: The Food and Drug Administration (FDA) is denying a request 
for a hearing submitted by Dr. Steven M. Lynch, and is issuing an order 
under the Federal Food, Drug, and Cosmetic Act (FD&C Act) debarring Dr. 
Lynch for 2 years from providing services in any capacity to a person 
that has an approved or pending drug product application. FDA bases 
this order on a finding that Dr. Lynch was convicted of a misdemeanor 
under Federal law for conduct relating to the regulation of a drug 
product under the FD&C Act and that the type of conduct underlying the 
conviction undermines the process for the regulation of drugs. In 
determining the appropriateness and period of Dr. Lynch's debarment, 
FDA has considered the relevant factors listed in the FD&C Act. Dr. 
Lynch has failed to file with the Agency information and analyses 
sufficient to create a basis for a hearing concerning this action.

DATES: The order is effective March 5, 2015.

ADDRESSES: Submit applications for termination of debarment to the 
Division of Dockets Management (HFA-305), Food and Drug Administration, 
5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

FOR FURTHER INFORMATION CONTACT: Nathan Doty, Office of Scientific 
Integrity, Food and Drug Administration, 10903 New Hampshire Ave., 
Silver Spring, MD 20993, 301-796-8556.

SUPPLEMENTARY INFORMATION:

I. Background

    On August 11, 2009, in the U.S. District Court for the Northern 
District of New York, Dr. Lynch, a physician, pled guilty to a 
misdemeanor under the FD&C Act, namely misbranding a drug in violation 
of sections 301(k), 502(i)(3) and 303(a)(1) of the FD&C Act (21 U.S.C. 
331(k), 352(i)(3), 333(a)(1)) and 18 U.S.C. 2. The basis for this 
conviction was conduct surrounding his injection of patients seeking 
treatment with BOTOX/BOTOX Cosmetic (BOTOX) with a product, TRI-toxin, 
distributed by Toxin Research International, Inc. BOTOX is a biological 
product derived from Botulinum Toxin Type A that is manufactured by 
Allergan, Inc., and was approved by FDA for use on humans for the 
treatment of facial wrinkles in 1991. According to the records of the 
criminal proceedings, Dr. Lynch's colleague in the same medical 
practice, The Plastic Surgery Group (TPSG), directed a nurse to obtain 
31 vials of TRI-toxin, an unapproved drug product, which was 
represented by its distributor as ``Botulinum Toxin Type A.'' Dr. Lynch 
then proceeded to inject approximately 18 patients, who believed they 
were being injected with BOTOX, with TRI-toxin as a substitute.
    Dr. Lynch is subject to debarment based on a finding, under section 
306(b)(2)(B)(i)(I) of the FD&C Act (21 U.S.C. 335a(b)(2)(B)(i)(I)): (1) 
That he was convicted of a misdemeanor under Federal law relating to 
the regulation of a drug product under the FD&C Act and (2) that the 
type of conduct underlying the conviction undermines the process for 
the regulation of drugs. By notice to Dr. Lynch dated November 30, 
2010, FDA's Office of Regulatory Affairs (ORA) proposed to debar him 
for 4 years from providing services in any capacity to a person having 
an approved or pending drug product application.
    In a letter dated December 30, 2010, through counsel, Dr. Lynch 
requested a hearing on the proposal. In his request for a hearing, Dr. 
Lynch acknowledges his conviction under Federal law, as alleged by FDA. 
By letter dated February 4, 2011, Dr. Lynch submitted materials and 
arguments in support of his request. Dr. Lynch acknowledges that he was 
convicted of a Federal misdemeanor, as found in the proposal to debar, 
but argues that he should not be debarred for reasons related to the 
factual basis set forth in the proposal to debar. In particular, with 
respect to the considerations for determining the appropriateness and 
period of debarment under section 306(c)(3) of the FD&C Act, he argues 
that there are genuine and substantial issues of fact for resolution at 
a hearing, namely factual issues bearing on whether he participated in 
or even knew of certain conduct that resulted in his violation of the 
FD&C Act.
    Hearings are granted only if there is a genuine and substantial 
issue of fact. Hearings will not be granted on issues of policy or law, 
on mere allegations, denials, or general descriptions of positions and 
contentions, or on data and information insufficient to justify the 
factual determination urged or the action requested (see 21 CFR 
12.24(b)).
    The Chief Scientist has considered Dr. Lynch's arguments, as well 
as the proposal to debar itself, and concludes that, although Dr. Lynch 
has failed to raise a genuine and substantial issue of fact requiring a 
hearing, the appropriate period of debarment is 2 years.

II. Arguments

    In support of his hearing request, Dr. Lynch first asserts that he 
is not subject to debarment under section 306(b)(2)(B)(i)(I) of the 
FD&C Act. He contends that he pled guilty to a misdemeanor violation of 
the FD&C Act (see section 303(a)(1)), which is a strict liability 
offense, and that thus there was no demonstration or admission of 
criminal intent or knowledge underlying the conviction. Dr. Lynch 
concludes, therefore, that the conduct underlying his conviction did 
not undermine the process for the regulation of drugs.
    Section 306(b)(2)(B)(i)(I) of the FD&C Act specifically provides 
for the debarment of individuals convicted of Federal misdemeanors 
related to the regulation of drug products under the FD&C Act. Given 
that misdemeanor violations of the FD&C Act themselves are strict 
liability offenses, it stands to reason that criminal intent is not a 
critical component to debar an individual under section 
306(b)(2)(B)(i)(I). During his criminal proceedings, Dr. Lynch pled 
guilty to misbranding and causing the misbranding of a drug in 
violation of sections 301(k), 502(i)(3) and 303(a)(1) of the FD&C Act 
by offering an unapproved drug, TRI-toxin, for sale as an approved drug 
product, BOTOX. Dr. Lynch's conduct undermined the process for the 
regulation of drugs in that it permitted an unapproved drug to be 
substituted for an approved drug without the knowledge of the patient. 
As a result, Dr. Lynch is, in fact, subject to debarment under section 
306(b)(2)(B)(i)(I) of the FD&C Act.
    Dr. Lynch next challenges the manner in which ORA applied the 
considerations under section 306(c)(3) of the FD&C Act in determining 
the appropriateness and period of his debarment. In the proposal to 
debar Dr. Lynch, ORA stated that there are four applicable 
considerations under section 306(c)(3) of the FD&C Act: (1) The nature 
and seriousness of his offense under section 306(c)(3)(A); (2) the 
nature and extent of management participation in the offense under 
section 306(c)(3)(B); (3) the nature and extent of voluntary steps 
taken to mitigate the impact on the public under section 306(c)(3)(C); 
and (4) prior convictions involving matters within the jurisdiction of 
FDA under section 306(c)(3)(F). ORA found with respect to Dr. Lynch 
that the first two considerations weigh in favor of debarment and noted 
that the third and fourth considerations would be treated as favorable 
factors for him. In making all of its findings under section 306(c)(3) 
of the FD&C Act, ORA characterized Dr. Lynch's conduct based on records 
from his criminal proceedings.
    Under section 306(c)(3)(A) of the FD&C Act, in determining the 
appropriateness and period of

[[Page 12015]]

debarment, FDA considers ``the nature and seriousness of the offense 
involved.'' In the proposal to debar, ORA relied on the criminal 
information to which Dr. Lynch pled guilty to find that the conduct 
underlying his convictions:

created a risk of injury to consumers due to the use of an 
unapproved drug, undermined [FDA's] oversight of an approved drug 
product by representing that [he] used the approved drug while 
actually substituting an unapproved drug in its place, and seriously 
undermined the integrity of [FDA's] regulation of drug products.

Under section 306(c)(3)(B), ORA also considered the ``nature and extent 
of [Dr. Lynch's] management participation in the offense'' and 
specifically found that he was a corporate principal who ``pleaded 
guilty to misbranding TRI-toxin'' and ``participated in the [TPSG's] 
unlawful conduct of administering [an] unapproved drug on multiple 
occasions to patients.'' ORA concluded, therefore, that the nature and 
seriousness of Lynch's offenses and the nature and extent of management 
participation were unfavorable factors with respect to him.
    Dr. Lynch counters ORA's findings with respect to those two 
considerations in section 306(c)(3) of the FD&C Act with the following 
arguments: (1) That he did not admit any criminal intent or intentional 
wrongdoing when he pled guilty to a misdemeanor offense under the FD&C 
Act; (2) that, in fact, another physician at TPSG took unilateral 
action in ordering the TRI-toxin and directing a nurse to substitute it 
for BOTOX; (3) that the TRI-toxin vials that they used for injecting 
patients with TRI-toxin were identical to the vials he used for BOTOX 
before the substitution; and (4) that since the conviction for the 
underlying misdemeanor was of an individual, that there was no 
management participation and that, thus, the nature and extent of 
management participation is inapplicable as a factor in determining 
appropriateness and period of debarment. Dr. Lynch concedes that he 
pled guilty to the misdemeanor offense because he was, in fact, guilty 
of offering TRI-toxin for sale to their patients as BOTOX. He argues, 
however, that the criminal records do not establish any intent or 
knowledge on his part and that thus the conduct underlying his 
conviction does not warrant debarment in light of the considerations in 
section 306(c)(3) of the FD&C Act.
    As noted previously, ORA relied on the records of Dr. Lynch's 
criminal proceedings for its findings in the proposal to debar. There 
is nothing definitive in the criminal records before FDA to contradict 
Dr. Lynch's assertions with respect to the nature of his involvement in 
the misdemeanor offense to which he pled guilty. The criminal 
information to which Dr. Lynch pled guilty alleges that TPSG, as 
opposed to Dr. Lynch, began ordering TRI-toxin for use in the medical 
practice, and there are no allegations that Dr. Lynch took part in the 
ordering process. Indeed, the proposal to debar states that, as claimed 
by Dr. Lynch, another physician in the practice, William F. DeLuca, 
Jr., was responsible for authorizing a nurse to substitute TRI-toxin 
for BOTOX, not Dr. Lynch. At Dr. Lynch's sentencing hearing, at which 
six other codefendants, including DeLuca, were also sentenced, the 
presiding judge also made clear that he believed DeLuca was the 
physician responsible for making the ``mistake'' that led to the other 
physician's offenses. In addressing DeLuca, the court stated:

And we're here because of your actions and inactions. As I said, 
your mistakes were different in kind and degree from those of your 
colleagues. It was you who brought this drug into the practice, and 
it was your conduct and your failure to check out either the company 
or the drug that you were ordering, as you should have done, your 
negligence in doing that that has brought us here today in the end.

In addressing one of the other three physicians who pled guilty under 
circumstances similar to Dr. Lynch's, the court further stated: ``There 
have been disputes on how in the past over who knew what and at what 
point in time. It is clear from the facts in this case that you had no 
knowledge that the substance was anything other than [BOTOX] until your 
discovery of it in November of 2004.''
    In short, consistent with the proposal to debar Dr. Lynch for 4 
years, the records of his criminal proceedings establish that the 
misdemeanor convictions for the physicians in TPSG other than DeLuca 
were not based on any affirmative involvement in ordering the TRI-toxin 
or substituting the TRI-toxin for BOTOX. Furthermore, in proposing to 
debar Dr. Lynch for 4 years, ORA did not rely on any findings with 
respect to Dr. Lynch's intent or knowledge. Rather, citing the records 
of Dr. Lynch's criminal proceedings, the proposal to debar simply rests 
on Dr. Lynch's position of authority within TPSG and his conduct in 
misbranding TRI-toxin by administering it to patients who believed they 
were receiving BOTOX. As a result, under Sec.  12.24(b), there is no 
genuine and substantial issue of fact raised by Dr. Lynch's arguments 
for resolution at a hearing.
    As set forth in the proposal to debar and summarized above, Dr. 
Lynch pled guilty to a misdemeanor under the FD&C Act for his role in 
offering a drug under the name of another. Based on the undisputed 
record before the Agency, the consideration in section 306(c)(3)(A) of 
the FD&C Act with respect to the nature and seriousness of the offense 
involved is a favorable factor. As reflected in the records of the 
criminal proceedings, Dr. Lynch's offense did not rest on any intent or 
knowledge of wrongdoing on his part, nor may such intent or knowledge 
be inferred from the circumstances of his offense or the findings in 
the proposal to debar. Although, as a practicing physician, Dr. Lynch 
should be expected to take the appropriate steps to avoid administering 
an unapproved new drug to patients or misrepresenting the drug being 
administered, his failure to do so over a 10-month period does not 
warrant considering the nature and seriousness of his offense as an 
unfavorable factor, relative to the range of conduct that might 
underlie a Federal misdemeanor conviction.
    On the other hand, because of Dr. Lynch's position of authority 
within TPSG and, thus, presumed ability to prevent the series of events 
that resulted in the offense underlying his misdemeanor conviction, the 
nature and extent of management participation in the offense is an 
unfavorable factor, for the purposes of the consideration under 
306(c)(3)(B) of the FD&C Act. Dr. Lynch asserts that there was no 
management participation, and that, thus, this factor is inapplicable 
because the underlying conviction was of an individual. However, the 
criminal information to which Dr. Lynch pled guilty alleges that TPSG 
began ordering TRI-toxin for use in the medical practice. It is 
undisputed that Dr. Lynch is a principal in TPSG, and this is the basis 
for considering the nature and extent of management participation as a 
factor in determining the appropriateness and period of debarment. FDA 
has relied on this factor in other debarment cases where the underlying 
conviction was of an individual (see 78 FR 68455 (November 14, 2013); 
77 FR 27236 (May 9, 2012)).
    The limited scope of his direct actions in committing the 
underlying misdemeanor offense does not mitigate the extent of his 
management participation, as established during his criminal 
proceedings and as set out in the proposal to debar. It is true that 
nothing in the criminal proceedings or the proposal to debar reflects 
any involvement by him in the decision to

[[Page 12016]]

order the TRI-toxin and substitute it for BOTOX, and the proposal to 
debar specifically finds that another physician authorized a nurse to 
place that order. However, Dr. Lynch, as a principal of TPSG, was 
responsible for failing to ensure that there were controls and 
procedures in place to prevent other physicians or a nurse from 
ordering unapproved drugs for administration to patients. His own 
admitted inaction on that front warrants treating his management 
participation as an unfavorable factor.\1\
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    \1\ See United States v. Park, 421 U.S. 658, 673-74 (1975) 
(holding that a high-level manager within a business entity bears a 
responsibility to prevent and correct violations of the FD&C Act).
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    Consistent with the proposal to debar, the record establishes that 
the medical practice of which Dr. Lynch was a part ultimately took 
voluntary steps to mitigate the effect on the public health from its 
unlawful conduct (see section 306(c)(3)(C) of the FD&C Act). 
Furthermore, it is undisputed that Dr. Lynch had no previous criminal 
convictions related to matters within the jurisdiction of FDA (see 
section 306(c)(3)(F) of the FD&C Act). Therefore, these will be treated 
as favorable factors. In light of the foregoing four considerations, 
one of which weighs against Dr. Lynch, debarment for 2 years is 
appropriate.

III. Findings and Order

    Therefore, the Chief Scientist, under section 306(b)(2)(B)(i)(I) of 
the FD&C Act and under authority delegated to him, finds that Dr. Lynch 
has been convicted of a misdemeanor under Federal law for conduct 
relating to the development or approval of a drug product or otherwise 
relating to the regulation of a drug product under the FD&C Act and 
that the conduct underlying the conviction undermines the regulation of 
drugs. FDA has considered the relevant factors listed in section 
306(c)(3) of the FD&C Act and determined that a debarment of 2 years is 
appropriate.
    As a result of the foregoing findings, Dr. Lynch is debarred for 2 
years from providing services in any capacity to a person with an 
approved or pending drug product application under section 505, 512, or 
802 of the FD&C Act (21 U.S.C. 355, 360b, or 382), or under section 351 
of the Public Health Service Act (42 U.S.C. 262), effective (see DATES) 
(see 21 U.S.C. 335a(c)(1)(B) and (c)(2)(A)(iii) and 21 U.S.C. 321(dd)). 
Any person with an approved, or pending, drug product application, who 
knowingly uses the services of Dr. Lynch, in any capacity during his 
period of debarment, will be subject to civil money penalties. If Dr. 
Lynch, during his period of debarment, provides services in any 
capacity to a person with an approved or pending drug product 
application he will be subject to civil money penalties. In addition, 
FDA will not accept or review any abbreviated new drug applications 
submitted by or with the assistance of Dr. Lynch during his period of 
debarment.
    Any application by Dr. Lynch for termination of debarment under 
section 306(d) of the FD&C Act should be identified with Docket No. 
FDA-2010-N-0301 and sent to the Division of Dockets Management (see 
ADDRESSES). All such submissions are to be filed in four copies. The 
public availability of information in these submissions is governed by 
21 CFR 10.20(j). Publicly available submissions may be seen in the 
Division of Dockets Management between 9 a.m. and 4 p.m., Monday 
through Friday. Persons with access to the Internet may obtain 
documents in the Docket at http://www.regulations.gov/.

    Dated: February 24, 2015.
Stephen Ostroff,
Director, Office of the Chief Scientist.
[FR Doc. 2015-05044 Filed 3-4-15; 8:45 am]
 BILLING CODE 4164-01P


