Pharma Execs’ Subpoena Argument Falls Flat

(CN) - The D.C. Circuit blasted a group of pharmaceutical executives for trying to dodge Federal Trade Commission subpoenas by claiming the FTC's plan to videotape their testimony invalidated the subpoenas. Chief Judge David Sentelle said this argument "borders on sophistry."

The agency subpoenaed the executives as part of an ongoing investigation into whether agreements among Unimed Pharmaceuticals, Laboratories Besins Iscovesco, and Solvay Pharmaceuticals delayed entry of a lower cost generic version of a testosterone drug called AndroGel.

Several executives refused to comply with the subpoenas, calling them invalid because the FTC proposed to record the testimony by videotape.

The commission successfully petitioned the district court to order the subpoenas enforced.

On appeal, the executives focused on the word "shall" in an FTC rule that states: "hearings shall be stenographically reported and a transcript thereof shall be made part of the record of the investigation."

"Lest we be misunderstood, the Commission does not propose to use video methods of transcription instead of stenographic transcription, but only in addition thereto," Chief Judge Sentelle wrote for the three-judge panel. He said the executives' arguments hinges on the "novel proposition" that the term "shall" restricts the FTC from recording testimony any way other than stenographic transcription.

This interpretation is "utterly without merit," Sentelle wrote.

"We know of no usage, nor do appellants bring forward any, that suggests that the use of 'shall' mandating one act implies a corresponding 'shall not' forbidding other acts not inconsistent with the mandated performance," he wrote. "Like the district court, we are unconvinced 'that the word 'shall' expresses not only a mandatory direction, but also a limiting principle.'"

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