We are pleased to have a guest blogger on our site, Sara Zborovski with DLA Piper, a prominent law firm with offices around the globe. In this article, Sara shares valuable insight on what to do during an inspection by Health Canada. DLA Piper is a trusted industry partner of ours, whom we highly endorse for legal counsel in the marketed health products industry. Here is her article:
As a lawyer working with companies in the health products and food industries, I am often asked about industry’s rights and obligations during a regulatory inspection: When the Inspectorate comes knocking do I have to open the door? And if I do, what do I have to tell/show/give the Inspector after I let them in?
As explained more fully below, in very general terms: the Inspectorate has broad powers in the context of a regulatory inspection, and industry is obliged to cooperate. However, different rights and safeguards are triggered at the point when a regulatory inspection becomes an investigation for the purpose of determining possible penal liability – I refer to this as the “tipping point”. It’s important for industry to be aware of this tipping point so rights and obligations can be properly balanced. One wrong move could land you in hot water with the regulator and/or the Canadian courts: somewhere no one wants to be!
The Administrative / Regulatory Inspection
Inspectors are granted broad powers in the Food and Drugs Act (the “FD Act”), the overarching Federal statute that regulates health products and food. In very general terms, inspectors can, at any reasonable time, enter any place where the Inspector believes, on reasonable grounds, there is something falling under the jurisdiction of the FD Act or its Regulations, i.e. any health product or food, or anything used in the manufacture, preparation, preservation, packaging, storing, labelling (including the labels themselves) or advertising of the product.
An Inspector can undertake a number of activities in considering an issue related to safety or compliance: observe processing and production practices, sample from the company and/or the market, inspection of equipment, review and copy records, interview staff, etc. Keep in mind that the Inspector has the right to access all of this information on reasonable belief that it applies to something that is subject to the FD Act or Regulations and/or that the FD Act or Regulations may have been contravened.
In this situation, cooperation is key.
First and foremost, the FD Act says you have to cooperate. It tell us that when an Inspector enters a space, everyone there has to give him/her all reasonable assistance and provide any information reasonably required. Second, and perhaps more important: even if it the FD Act didn’t dictate that industry must cooperate, cooperation is key because it just makes good sense to place nice with your regulator!
The FD Act speaks to “reasonableness” both in the context of an Inspector’s powers (reasonable grounds) and the requirement of industry to provide (reasonable) assistance. What is reasonable depends on the facts. Therefore, it is important for you to be educated on the issue(s) being considered by the Inspector during an administrative or regulatory inspection.
What is “reasonable” changes in the context of an investigation for the purpose of gathering evidence to support a prosecution, and so too do your rights and obligations vis-à-vis the Inspector. Specifically, certain rules established by our Charter of Rights and Freedoms, the Canada Evidence Act and the Criminal Code of Canada are triggered by such an investigation. Investigators have similar responsibilities as Inspectors and it can be hard to distinguish one from the other.
Enforcement and Investigation Specialists engage in investigations for the purposes of gathering evidence that may lead to prosecution or Administrative Monetary Penalties. These specialists are trained in investigation procedures and techniques, including: obtaining and executing search warrants; gathering evidence and protecting continuity of evidence; taking statements from witnesses; conducting surveillance and the rules for admissibility of evidence.
Government officials that conduct investigations are specifically trained to respect the rights of the person/entity being investigated. For example, the right to silence, which protects employees, directors and officers from self-incrimination in the context of the investigation; and the protection against unreasonable search and seizure.
Among other things an official conducting an investigation should notify you that you and/or your business is the subject of an investigation for the purpose of determining possible penal liability. If you’re ever in a situation where you think you might be the subject of an investigation, but haven’t been so-informed, ASK! The answer you receive should govern your interactions with the Inspector going forward, i.e. whereas you might not need legal counsel during a regulatory inspection, you’ll probably want representation if you find yourself in the midst of an investigation.
So What Does It All Mean?
It is important for industry to be aware of the distinction between an administrative/regulatory inspection and an investigation because of the vast difference in your rights and obligations in the context of each. These considerations are increasingly important for companies in the therapeutic products space (drugs and medical devices) given the increased penalties recently introduced by Bill C-17 (“Vanessa’s Law”).
Also keep in mind: some of the offences in the FD Act are strict liability offences, which means that the Crown attorney needs to establish that the offence was committed – whether the event was intended or accidental is of no consequence. There is a defence, however: due diligence. Accordingly, I strongly recommend all of my clients take active steps to establish due diligence. How? Through a strong corporate structure of safety (extending from upper management to every employee in the company), the development and implementation of compliance manuals and employee training.
Most often, the best offence is a good defence. But sometimes, even the best defence can’t protect against trouble, i.e. the Inspectorate. In that case, it’s important to take an active role in dealing with the regulator to ensure you’re appropriately cooperating and protecting your rights.
Sara Zborovski is a partner in the Toronto office of DLA Piper (Canada) LLP. She works with companies regulated by Health Canada obtain market access and in all areas of compliance. Sara’s full bio can be found here.