Adam Paul Runsdorf: Final Debarment Order, 38159-38161 [2024-09917]

Agencies

• Food and Drug Administration
• DEPARTMENT OF HEALTH AND HUMAN SERVICES

[Federal Register Volume 89, Number 89 (Tuesday, May 7, 2024)]
[Notices]
[Pages 38159-38161]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-09917]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2023-N-3827]


Adam Paul Runsdorf: Final Debarment Order

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA) is issuing an order 
under the Federal Food, Drug, and Cosmetic Act (FD&C Act) permanently 
debarring Adam Paul Runsdorf 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 Mr. Runsdorf was convicted of a 
felony under Federal law for conduct that relates to the regulation of 
a drug product under the FD&C Act. Mr. Runsdorf was given notice of the 
proposed debarment and an opportunity to request a hearing within the 
timeframe prescribed by regulation. As of February 25, 2024 (30 days 
after receipt of the notice), Mr. Runsdorf has not responded. Mr. 
Runsdorf's failure to respond and request a hearing constitutes a 
waiver of Mr. Runsdorf's right to a hearing concerning this matter.

DATES: This order is applicable May 7, 2024.

ADDRESSES: Any application by Mr. Runsdorf for special termination of 
debarment under section 306(d)(4) of the FD&C Act (21 U.S.C. 
335a(d)(4)) may be submitted at any time as follows:

Electronic Submissions

     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments. An application 
submitted electronically, including attachments, to https://www.regulations.gov will be posted to the docket unchanged. Because 
your application will be made public, you are solely responsible for 
ensuring that your application does not include any confidential 
information that you or a third party may not wish to be posted, such 
as medical information, your or anyone else's Social Security number, 
or confidential business information, such

[[Page 38160]]

as a manufacturing process. Please note that if you include your name, 
contact information, or other information that identifies you in the 
body of your application, that information will be posted on https://www.regulations.gov.
     If you want to submit an application with confidential 
information that you do not wish to be made available to the public, 
submit the application as a written/paper submission and in the manner 
detailed (see ``Written/Paper Submissions'' and ``Instructions'').

Written/Paper Submissions

     Mail/Hand Delivery/Courier (for written/paper 
submissions): Dockets Management Staff (HFA-305), Food and Drug 
Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.
     For a written/paper application submitted to the Dockets 
Management Staff, FDA will post your application, as well as any 
attachments, except for information submitted, marked, and identified, 
as confidential, if submitted as detailed in ``Instructions.''
    Instructions: All applications must include the Docket No. FDA-
2023-N-3827. Received applications will be placed in the docket and, 
except for those submitted as ``Confidential Submissions,'' publicly 
viewable at https://www.regulations.gov or at the Dockets Management 
Staff between 9 a.m. and 4 p.m., Monday through Friday, 240-402-7500.
     Confidential Submissions--To submit an application with 
confidential information that you do not wish to be made publicly 
available, submit your application only as a written/paper submission. 
You should submit two copies total. One copy will include the 
information you claim to be confidential with a heading or cover note 
that states ``THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.'' The 
Agency will review this copy, including the claimed confidential 
information, in its consideration of your application. The second copy, 
which will have the claimed confidential information redacted/blacked 
out, will be available for public viewing and posted on https://www.regulations.gov. Submit both copies to the Dockets Management 
Staff. Any information marked as ``confidential'' will not be disclosed 
except in accordance with 21 CFR 10.20 and other applicable disclosure 
law. For more information about FDA's posting of comments to public 
dockets, see 80 FR 56469, September 18, 2015, or access the information 
at: https://www.govinfo.gov/content/pkg/FR-2015-09-18/pdf/2015-23389.pdf.
    Docket: For access to the docket, go to https://www.regulations.gov 
and insert the docket number, found in brackets in the heading of this 
document, into the ``Search'' box and follow the prompts and/or go to 
the Dockets Management Staff, 5630 Fishers Lane, Rm. 1061, Rockville, 
MD 20852 between 9 a.m. and 4 p.m., Monday through Friday, 240-402-
7500. Publicly available submissions may be seen in the docket.

FOR FURTHER INFORMATION CONTACT: Jaime Espinosa, Division of Compliance 
and Enforcement, Office of Policy, Compliance, and Enforcement, Office 
of Regulatory Affairs, Food and Drug Administration, 240-402-8743, 
[email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    Section 306(a)(2)(B) of the FD&C Act requires debarment of an 
individual from providing services in any capacity to a person that has 
an approved or pending drug product application if FDA finds that the 
individual has been convicted of a felony under Federal law for conduct 
relating to the regulation of any drug product under the FD&C Act. On 
July 27, 2023, Adam Paul Runsdorf was convicted as defined in section 
306(l)(1) of the FD&C Act, in the U.S. District Court for the Eastern 
District of Texas-Beaumont Division, when the court entered judgment 
against him, after his plea of guilty, to Conspiracy to Traffick in 
Drugs with Counterfeit Mark in violation of 18 U.S.C. 371, 18 U.S.C. 
2320(a)(4) and Trafficking in Drugs with Counterfeit Mark in violation 
of 18 U.S.C. 2320(a)(4), 18 U.S.C. 2320(b)(3)(A). The underlying facts 
supporting the conviction are as follows:
    As contained in the Third Superseding Indictment, and as contained 
in Factual Basis and Stipulation memorandum, between approximately 
April 2014 and February 2021, Mr. Runsdorf conspired to distribute 
counterfeit cough syrup. Specifically, Mr. Runsdorf owned a group of 
pharmaceutical companies including Woodfield Pharmaceutical LLC, a 
contract manufacturing company, and Woodfield Distribution LLC, a 
third-party logistics company (collectively, ``Woodfield''). On April 
25, 2014, Mr. Runsdorf acquired Pernix Manufacturing LLC (Pernix). 
Pernix had, in January 2014, entered into an agreement with Byron A. 
Marshall and his Drug Trafficking Organization (DTO) to copy and 
manufacture cough syrup according to the directions of Marshall and his 
associates.
    Marshall was not licensed or authorized to distribute cough syrup 
and any background check of the personal information provided by 
Marshall to Pernix or later Woodfield would have revealed that he was 
not a licensed physician. Initially, Marshall sought to copy Actavis 
Prometh VC with Codeine (Actavis). Actavis is a purple, peach-mint 
flavor prescription cough syrup that was in demand as a street drug. 
Marshall and his associates wanted to mass produce and traffic a 
counterfeit version of Actavis that contained Promethazine, but not 
Codeine. On April 24, 2014, Actavis Holdco US discontinued production 
of the Actavis product due to its widespread abuse by recreational drug 
users. A Pernix product-development scientist worked with Marshall and 
his associates to re-create the Actavis product without Codeine and 
Promethazine in order to re-create the syrup base, which is a necessary 
component of cough syrup. Marshall and his associates would add 
Promethazine to the counterfeit substance prior to bottling and 
distribution in order to create the drug. Marshall and his DTO also 
obtained counterfeited commercial-grade pharmaceutical labels designed 
to look exactly like the genuine labels for the prescription cough 
syrup from another supplier. Later in the conspiracy, Marshall and his 
DTO asked Woodfield employees to reformulate other cough syrup to use 
in their drug trafficking scheme to include Hi-Tech Promethazine 
Hydrocholoride and Codeine Phosphate Oral Solution and Wockhardt 
Promethazine Syrup Plain.
    As Pernix was scaling-up production of the syrup base for Marshall 
and his DTO in April 2014, Mr. Runsdorf acquired Pernix. Mr. Runsdorf 
retained Pernix employees but made changes to management staff who 
oversaw and were responsible for producing the syrup base for the 
Marshall DTO, to which they knew the Marshall DTO was adding active 
ingredients. During the conspiracy, Marshall communicated directly with 
Mr. Runsdorf regarding production of the counterfeit cough syrup. At 
Mr. Runsdorf's request, Marshall paid Woodfield in cash only, and 
Woodfield employees mailed the cash directly to him.
    Mr. Runsdorf knew his company was producing thousands of gallons of 
the counterfeit cough syrup to be distributed to drug traffickers in 
Texas and other States. Woodfield's production of syrup base for 
Marshall and his DTO bypassed the protocols for safety and quality 
testing. Initially, there were no batch records to document the

[[Page 38161]]

production of the syrup as required. Woodfield provided the syrup to 
Marshall and his DTO without any corresponding documentation that 
identified the ingredients of the syrup; practices that continued until 
February 2019 when Woodfield started creating paper records for some of 
the cough syrup batches Woodfield made for the DTO. From 2014 through 
February 2021, the conspiracy between the Marshall DTO produced and 
distributed, or attempted to produce and distribute, approximately 
65,920 gallons of counterfeit cough syrup. The total amount of cash 
paid by Marshall and his DTO to Mr. Runsdorf was approximately at least 
$3 million.
    As a result of this conviction, FDA sent Mr. Runsdorf, by certified 
mail, on January 23, 2024, a notice proposing to permanently debar him 
from providing services in any capacity to a person that has an 
approved or pending drug product application. The proposal was based on 
a finding, under section 306(a)(2)(B), that Mr. Runsdorf was convicted 
of two felonies under Federal law for conduct relating to the 
regulation of a drug product under the FD&C Act. The proposal informed 
Mr. Runsdorf of the proposed debarment and offered him an opportunity 
to request a hearing, providing him 30 days from the date of receipt of 
the letter in which to file the request, and advised him that failure 
to request a hearing constituted a waiver of the opportunity for a 
hearing and of any contentions concerning this action. Mr. Runsdorf 
received the proposal and notice of opportunity for a hearing on 
January 26, 2024. Mr. Runsdorf failed to request a hearing within the 
timeframe prescribed by regulation and has, therefore, waived his 
opportunity for a hearing and waived any contentions concerning his 
debarment (21 CFR part 12).

II. Findings and Order

    Therefore, the Assistant Commissioner, Office of Human and Animal 
Food Operations, under section 306(a)(2)(B) of the FD&C Act, under 
authority delegated to the Assistant Commissioner, finds that Mr. 
Runsdorf has been convicted of a felony under Federal law for conduct 
relating to the regulation of a drug product under the FD&C Act.
    As a result of the foregoing finding, Mr. Runsdorf is permanently 
debarred from providing services in any capacity to a person with an 
approved or pending drug product application, effective (see DATES) 
(see sections 306(a)(2)(B) and 306(c)(2)(A)(ii) of the FD&C Act). Any 
person with an approved or pending drug product application who 
knowingly employs or retains as a consultant or contractor, or 
otherwise uses in any capacity the services of Mr. Runsdorf during his 
debarment, will be subject to civil money penalties (section 307(a)(6) 
of the FD&C Act (21 U.S.C. 335b(a)(6))). If Mr. Runsdorf provides 
services in any capacity to a person with an approved or pending drug 
product application during his period of debarment, he will be subject 
to civil money penalties (section 307(a)(7) of the FD&C Act). In 
addition, FDA will not accept or review any abbreviated new drug 
application from Mr. Runsdorf during his period of debarment, other 
than in connection with an audit under section 306 of the FD&C Act 
(section 306(c)(1)(B) of the FD&C Act). Note that, for purposes of 
sections 306 and 307 of the FD&C Act, a ``drug product'' is defined as 
a ``drug subject to regulation under section 505, 512, or 802 of this 
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)]'' (section 201(dd) of the 
FD&C Act (21 U.S.C. 321(dd))).

    Dated: May 2, 2024.
Lauren K. Roth,
Associate Commissioner for Policy.
[FR Doc. 2024-09917 Filed 5-6-24; 8:45 am]
BILLING CODE 4164-01-P