Anatomy of a Consent Decree

Following yesterday’s posting about catching up, another thing that happened last week is that a Consent Decree was issued by the FDA.  The company involved was Shelhigh, Inc., which produces implantable devices.

First of all, what is a Consent Decree?  It is an agreement between the FDA and a company that outlines steps that a company has to take in order to return to full, independent production.  In other words, it is a very strong regulatory action.  The consent decree mandates that a company start initiating change, and that change is usually associated with the way the company is manufacturing a product.  And almost invariably, it will involve the company employing outside consultants to come in and re-constitute the manufacturing practices to bring it in alignment with the FDA’s vision of Good Manufacturing Practices (GMPs).  The Decree can tell a company that it must stop marketing or even stop manufacturing until agency-perceived defects are corrected.  For those reasons, if no other, Consent Decrees are not usually regarded as good news.

Second of all, what causes a Consent Decree?  There is no set formula by which one can say a Consent Decree will be sought by the FDA.  But, suffice to say that any combination of the following can and does trigger one – (i) a recall of product due to adulteration or other defect from manufacturing; (ii) an inspection that finds that a company is not following GMPs; a serious warning letter, or (iii) a series of less serious warning letters from the FDA about GMPs; (iv) a serious set of adverse events associated with the manufacturing process, or (v) an inspection report citing deficiencies is not addressed in a timely manner or one that the agency deems adequate.  There are others, but those are the principle ones that come to mind. 

So third of all – what should a company do?  A Consent Decree situation usually makes a company feel extremely defensive and I have seen more than once companies express a strong desire to strike back at the FDA through aggressive posturing and press releases.  That, I would counsel, is not the best course of action.  When an agency that has authority over your manufacturing process and marketing is taking the measure of a Consent Decree, attack – while it may feel good, is just not really a good idea at all. 

Therefore, the best thing a company should do is get outside counsel.  I’m not just saying that because I’m one of the people you would call for help in this type of situation, but because it is true.  When companies are feeling defensive, their communications often sound that way.  When they sound that way, it doesn’t often help the situation.  At the first sign a Consent Decree is a possibility, due to a recall or repeated Warning Letters, a company should take steps to get help and develop a scenario playbook that informs its communications with the agency, the public, vendors, shareholders and customers.  It is expensive.  But it can alleviate a great deal of pain as well.