Hill Seeks Answers to Confidentiality After Insider Trading Scandal
House Energy and Commerce Committee chairman Fred Upton (R-MI) and Health Subcommittee chairman Joseph Pitts (R-PA) have written FDA seeking answers about its procedures for protecting product trade secret and confidential information in the wake of a recent insider trading scandal involving the Office of Generic Drugs. Earlier this month, former FDA Office of Generic Drugs deputy director and now consultant Gordon Johnston pled guilty and admitted his role in an insider trading scheme that obtained highly confidential and material nonpublic information from a senior FDA official about the status and impending approval of generic enoxaparin (Sanofi-aventis’ blockbuster Lovenox). According to government and court documents, the information that Johnston illegally obtained was passed on to hedge fund managers who used it to make stock trades in violation of insider trading laws and regulations.
The committee had written FDA earlier this year expressing concerns about the agency’s procedures for protecting trade secret and confidential information. The lawmakers said a 5/6/2016 FDA 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. They now request additional information on the effectiveness of security measures, how FDA monitors compliance, and what additional steps the agency is taking in light of the recent insider trading scandal.