January 30, 2018

FDA Is Not the Only Sheriff in Town for Drug Product Safety Issues: First Civil Penalty Imposed for Alleged Violation of Child-Resistant Packaging Requirements for Drug Products and CPSC Notification Requirements

Seller Beware: Consumer Protection Insights for Industry

On January 18, 2018, a federal district court entered a consent decree imposing a $5 million civil penalty on Dr. Reddy's Laboratories Inc. (Dr. Reddy's) for alleged violations of the Poison Prevention Packaging Act (PPPA) and Consumer Product Safety Act (CPSA). The consent decree also imposed a permanent injunction against Dr. Reddy's, requiring Dr. Reddy's to implement a compliance program designed to ensure compliance with the PPPA and the CPSA.

The consent decree represents the first civil penalty against a pharmaceutical company for allegedly knowingly (1) distributing drug products that violated the PPPA child-resistant packaging regulations (a prohibited act under 15 U.S.C. § 2068(a)(1)), (2) failing to timely notify the U.S. Consumer Product Safety Commission (CPSC) about the potential non-compliance of drug products with child-resistant packaging regulations and the potential hazard presented by such drugs (a prohibited act under 15 U.S.C. § 2068(a)(4)), or (3) failing to issue certificates of compliance of drug products with child-resistant packaging regulations (a prohibited act under 15 U.S.C. § 2068(a)(6)). The consent decree comes nearly six years after CPSC began investigating these alleged violations, and nearly two years after CPSC referred the case to the Department of Justice (DOJ).

The government alleged in its complaint that Dr. Reddy's knowingly violated the above-referenced provisions of the CPSA and should be subject to civil penalties, based on alleged actions including the following:

  • From or about August 14, 2008 through June 1, 2012, Dr. Reddy's imported, manufactured, and distributed five household oral prescription drugs in unit dose packaging (blister packs) that were required by law to be in child-resistant packaging, but had not been tested for compliance;
  • In or around November 2010, Dr. Reddy's employees requested that its parent company manufacture placebo samples of its then-marketed prescription drugs packaged in blister packs so Dr. Reddy's could test those packages for child resistance;
  • In or around February 2011, Dr. Reddy's packaging engineers prepared and provided to other Dr. Reddy's employees a Risk Analysis that (a) explained the testing requirements under the PPPA and the reporting and certification requirements of the CPSA, (b) concluded that the existing blister packaging would not pass the required testing to prove compliance, (c) recommended that Dr. Reddy's immediately change the packaging rather than conduct testing, and (d) described the potential harm to children from accidental ingestion of the prescription drugs;
  • Reddy's began developing replacement drug packaging while continuing to sell the drugs in the existing untested packaging, and declined to have testing conducted when it received placebo samples in the existing, untested packaging on or about May 12, 2011;
  • On April 2, 2012, Dr. Reddy's notified CPSC pursuant to 15 U.S.C. § 2064(b) about the potential noncompliance of the packaging of one of the prescription drugs; and
  • Reddy's failed to issue certificates of compliance of the drugs to the packaging requirements, as was required after February 10, 2010.

Dr. Reddy's agreed to settle the case without admitting that it had violated the law.

This settlement is an important reminder to manufacturers, importers, distributors and retailers –ensure that drug products (and other products covered by the PPPA) comply with requirements for child-resistant packaging, issue certificates of compliance, and notify CPSC if a product does not comply with the PPPA.

© Arnold & Porter Kaye Scholer LLP 2018 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

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