Event Driven Takeaways
- Based on a review of the merger agreement terms, it appears likely that the results of the investigation will only prevent the merger from closing if the negative impact on Akorn’s operations is substantial enough to constitute a Material Adverse Effect to Akorn, as that term is defined in the parties’ merger agreement.
- Nonetheless, relatively minor data integrity issues could have a large effect on a pharmaceutical company’s product. “On that dimension, it is sometimes said it doesn’t matter if the problem is intentional or unintentional or negligence or criminality,” said a former FDA official.
- The FDA’s data integrity requirements aim to ensure that a company’s record-keeping supports any intended conclusions about the safety and effectiveness of a product.
- A Feb. 26 reference by Akorn and Fresenius Kabi to “product development” means that the data integrity issues are probably not related to manufacturing, said John (Jack) Garvey, a chemical engineer and attorney who is principal and CEO of Compliance Architects. More likely, the current investigation relates to an area such as laboratory work or clinical data, he said.
Although data integrity issues, which are the focus of an investigation into Akorn Pharmaceuticals, can range from minor oversights to intentional and sometimes criminal acts, even a small data integrity problem can have a significant effect on a company’s products, according to both a former FDA official and a compliance company executive. “You can have just as big of a problem for a product if you have an accidental problem versus an intentional problem,” said the former FDA official. “On that dimension, it is sometimes said it d