Kabco Pharmaceuticals Fights for its Life in FDA Suit

By Josh Long, Legal and Regulatory Editor

AMITYVILLE, N.Y. New York-based Kabco Pharmaceuticals, Inc. and its management face difficult times.

Over the summer, the FDA took the fairly unusual step of seeking an injunction in federal court that would require the company to stop producing and distributing dietary supplements until it complies with federal law and regulations. Kabco manufactures supplements including Brewers Yeast Tablets, Dandelion Root Capsules and Night-Time Herb Capsules among other products.

In a lawsuit brought by the U.S. Department of Justice, the government depicts Kabco as a repeat violator of current good manufacturing practices regulations for dietary supplements. FDA contends the company's bevy of so-called cGMP infractions range from failing to reject dietary supplements that did not meet product specifications to neglecting to review and investigate product complaints.

Kabco, with its principal place of business in Amityville, N.Y., faces the daunting prospect of having to shut down operations at least temporarily if a federal judge grants an injunction against the company.

FDA is asking for an order restraining the company from further manufacturing until it complies with federal law and manufacturing practices. Among other requests, FDA wants authorization to inspect facilities and records to ensure compliance with terms of the injunction.

Abu Kabir, the president and CEO of Kabco who has been named a defendant in the lawsuit, didn't return a phone call seeking comment on the case. Doreen Martin of Venable LLP, outside counsel representing Kabco in the case, also didn't respond to an emailed request for comment.

Such a court action has the practical effect of "potentially damaging this or any other company's business by scaring customers away," observed food lawyer Marc Ullman of the New York-based firm of Ullman, Shapiro & Ullman, LLP. 

"Even those customers that aren't scared now have an obligation of coming in to make sure the company is taking corrective action and that there isn't an ongoing compliance problem," noted Ullman, who declined to comment on specific details concerning the suit.  

Scott Bass, a partner with the global law firm of Sidley Austin LLP, said the lawsuit reflects two trends at FDA's dietary supplements division.

"The first is a steep spike in GMP enforcement, which is intended to signal to the industry that the old days of looking the other way on quality are over," observes Bass, who is not involved in the case. Bass notes the suit further reflects strong enforcement at an agency that will resort to criminal, not just civil, action in egregious cases.

Indeed, executives with Quality Formulation Laboratories Inc. and American Sports Nutrition Inc. were sentenced last year to prison after a jury in New Jersey found the companies and executives guilty of criminal contempt of court for violating a consent decree. Earlier, a civil complaint filed by the Justice Department had described a gruesome environment of live and dead rodent infestation at a manufacturing facility, revealed during an FDA inspection in January 2009.

The lawsuit against Kabco for violations of the five-year-old cGMP regulations doesn't include the same gory details, although the consequences for the company and its management could be just as fatal.

The Justice Department can bring criminal charges against executives for committing "prohibited acts" under the Federal Food, Drug, and Cosmetic Act, pointed out Michael Swit, special counsel with the international law firm of Duane Morris, who is not involved in the Kabco case.

The case against Kabco is in the early stages of litigation. The company filed an answer in August, mostly denying the government's allegations, and Kabco is demanding a jury trial.

A Justice Department spokesman confirmed the U.S. District Court for the Eastern District of New York hasn't issued any rulings in the case. An initial conference is scheduled for Nov. 2 before Magistrate Judge E. Thomas Boyle.

Swit of Duane Morris said the FDA's injunction action, if successful, could "basically shut these guys down".

Such a result would be unusual but not unprecedented. Earlier this year, FDA announced that a judge signed a consent decree of a permanent injunction, prohibiting "ATF Fitness Products and Manufacturing ATF Dedicated Excellence (MADE) from manufacturing, preparing, packing, labeling or distributing any dietary supplement until they have completed FDA-approved measures to correct deficiencies and comply with the law."

Commenting in March on the permanent injunction, FDA said it was the first time it had taken legal action against a dietary supplement maker of this size for failure to comply with dietary supplement cGMP regulations. An FDA spokeswoman said the agency has not granted Pennsylvania-based ATF Fitness Products approval to resume operations since the consent decree was ordered.