WASHINGTON, DC - House Energy and Commerce Committee Chairman Fred Upton (R-MI) and Health Subcommittee Chairman Joseph Pitts (R-PA) today continued their efforts seeking answers about the FDA’s procedures to product trade secret and confidential information in the food industry.
“The Committee’s concerns about FDA’s procedures to protect trade secret and confidential information are underscored by an insider trading case brought by federal officials recently in New York," wrote Upton and Pitts. “Prosecutors found that a political intelligence consultant and former FDA official unlawfully obtained the status and approval of a generic drug through contact with a current FDA senior official. The former FDA official provided the highly confidential information to a portfolio manager, who used the information to trade in the securities of two pharmaceutical companies likely to be affected by an approval of a generic enoxaparin application."
The leaders continued, “As a result of the trading scheme, approximately $25 million in trading profits were earned when the FDA announced its first such approval. The portfolio manager also tipped off a healthcare-focused hedge fund with material nonpublic information from the FDA, reaping millions of dollars in illegal profits."
Upton and Pitts previously sent a letter to the FDA on Feb. 17, 2016, requesting information on agency procedures to protect confidential information. The agency’s May 6, 2016 reply did not provide detailed information.
“From your initial response, it is clear that FDA has some procedures in place to protect trade secrets and confidential information. However, your response does not address how effectively FDA has implemented those procedures and controls, or how FDA audits employee compliance with these controls," wrote Upton and Pitts.
The leaders have requested additional information on the effectiveness of security measures, how FDA monitors compliance, and what additional steps the agency is taking in light of this recent development.
* Letter to FDA Reiterating Concerns on Security of Food Industry Trade Secrets and Confidential Information
