On October 22, 2020, the former CEO of Indivior PLC, Shaun Thaxter, was sentenced to six months of imprisonment for his conviction on one misdemeanor count of misbranding in violation of the Federal Food, Drug, and Cosmetic Act (“FDCA”).
Thaxter’s conviction, which arises from Indivior’s marketing of its opioid-based product Suboxone Film, is particularly significant because it is based on the rarely used “responsible corporate officer” doctrine (also known as the “Park doctrine”). Under the Park doctrine, Thaxter’s conviction is based on his role as a responsible executive who failed to prevent or correct Indivior’s illegal acts in violating the FDCA, instead of his direct involvement in those illegal acts.
While most criminal statutes require the government to prove some level of intent, the FDCA does not impose an intent requirement for misdemeanors. Thus, Thaxter could be held criminally liable for negligently failing to prevent an offense at Indivior even if he did not have direct knowledge of the alleged misconduct. Notably, the government did not allege that Thaxter played a personal role in sending false and misleading data to the Massachusetts government (the allegations resulting in Thaxter’s conviction). Instead, Thaxter’s alleged involvement with Medicaid consisted only of business development efforts and encouraging his marketing staff to win preferred drug status for Suboxone.
However, the government alleged that Indivior developed misleading marketing materials and encouraged providers to prescribe Suboxone in situations where it was not clinically warranted, and because Thaxter was responsible for overseeing those efforts, he could indirectly be held liable under the FDCA for these acts.
Related links are available at: DOJ Press Release; Thaxter Criminal Information; Law 360 Coverage; Ropes & Gray LLP Alert.