Jessica Palacio worked as a clinical trial coordinator for Unlimited Medical Research, LLC, between 2013 and 2015. During this time, she participated in a clinical trial for a pediatric asthma drug. In 2015, the pharmaceutical company terminated the trial and reported irregularities to the FDA, noting that Palacio had recorded a screening of a child who was actually in school and not participating in the study. The FDA launched an investigation in early 2017. During this investigation, Palacio signed a sworn affidavit falsely confirming she had conducted the screening. A federal jury convicted her of making a false statement to the government under 18 U.S.C. § 1001(a)(2), and she was sentenced to 36 months in prison. Following her conviction, the FDA issued a final debarment order permanently prohibiting her from providing services related to drug applications, invoking 21 U.S.C. § 335a(a)(2). Palacio petitioned the Eleventh Circuit for review, arguing that her conviction did not relate to drug development and that the debarment was arbitrary and capricious.
The court analyzed the petition under the Administrative Procedure Act, which requires courts to set aside agency actions that are arbitrary, capricious, or not in accordance with law. The central issue was the interpretation of 21 U.S.C. § 335a(a)(2), which requires the FDA to permanently debar individuals convicted of felonies for conduct 'relating to the development or approval, including the process for development or approval, of any drug product.' Chief Judge Pryor wrote that the statutory text is clear and broad. The court defined 'relate to' as having a connection or bearing on the subject matter, citing dictionary definitions and precedent. The court reasoned that Palacio's false statement impeded an investigation into the integrity of the drug development process, thereby satisfying the statutory requirement. Palacio argued that her statement was made in 2017, nearly two years after the clinical trial ended, and thus did not relate to development. The court rejected this, noting that the statute covers the 'process' for development, which includes investigations, and that the term 'relating to' has no temporal limitation. Furthermore, the court addressed the claim that the debarment was arbitrary because other debarments usually occur while trials are ongoing. The court held that even if typical debarments happen during active trials, Palacio's conduct fell within the plain language of the statute, making the debarment mandatory and not arbitrary.
The FDA's permanent debarment order against Jessica Palacio remains in full effect. The decision clarifies that the mandatory debarment statute applies to false statements made during investigations into drug data, even if those statements occur after a clinical trial has concluded. This ruling limits the FDA's ability to exercise discretion in debarment cases where a qualifying felony conviction exists, reinforcing a strict textualist approach to the 'relating to' language in the Food, Drug, and Cosmetic Act.