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FDA
FDA TAKES ACTION IN
SELF-REGULATED AREAS:
IMPACT ON COMPLIANCE PROGRAMS
BY RYAN FOURNIER
When a federal regulator changes course and becomes significantly more active,
it’s time to reassess your corporate compliance program.
A
tapestry of events over the past 12 months highlights the current erosion of government’s
reliance and trust of food and drug industry self-regulation.
While regulators rely on “public safety” arguments to justify
new rulemaking, they are equally motivated by the array
of corporate compliance programs that do not adequately
control for misbranding/adulteration risks.
Generally, the food and drug industries have enjoyed
a liberal honor code with the U.S. Food and Drug
Administration (FDA), so to speak. Some of the most
notable examples are:
i. FDA does not require dietary supplement
manufacturers to verify with the agency whether they
adhere to good manufacturing practices as set forth
in 21 CFR Part 111, or whether their ingredients are
safe and effective for their intended use before going
to market;
ii. Companies can self-affirm food substances as
generally recognized as safe without having to
petition the agency for clearance before going
to market;
iii.FDA has long avoided requiring substantiation for
product claims on homeopathic medicines (stating
that self-limiting, self-diagnosable, allopathic
equivalent claims generally do not carry an
enforcement risk);
iv.There has been no requirement to validate or audit
foreign food suppliers in a supply chain.
However, events in 2015 began tossing this honor code
out of the window. Not only did FDA start taking action in
historically self-regulated areas, but now state agencies are
filling in where FDA has been inactive.
A turning point came when, in early 2015, the New York
attorney general sent four of the largest dietary supplement
retailers (Wal-Mart, Target, GNC, and Walgreens) cease and
desist letters. These letters stated that an investigation
into their top-selling supplement brands revealed four out
of five products did not contain any of the herbs on their
labels. Instead, the supplements contained fillers and other
substances that were noted to be dangerous to people
with allergies. The New York attorney general demanded
that these retailers present their corporate compliance
programs and procedures used to verify ingredients in their
supplements and supply chain. Not only were these retailers
forced to defend and rewrite their compliance policies
under the watchful eye of regulators, the U.S. Department
of Justice has stepped in, commencing over 100 criminal
and civil actions accusing supplement manufacturers and
retailers of fraud.
A few months after New York’s actions, FDA held its first
public hearing on re-evaluating homeopathic product
regulation. While federal authorities argued that they are
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revisiting the issue (after a quarter of a century) due to
the industry’s “significant growth size,” the hearing was
actually in response to a condemning report issued by
Australia’s National Health and Medical Research Council
that concluded “there are no health conditions for which
there is reliable evidence that homeopathy is effective.”1
After this report and conversations with stakeholders, it
has become clear to the agency that the industry does not
have adequate information or compliance procedures in
place to determine the safety and efficacy of many of its
products on the market.
CORPORATE COUNSEL MUST ENSURE THEIR FDA
COMPLIANCE PROGRAMS ARE UP-TO-DATE AND
REFLECT THE EVER CHANGING REGULATORY
REGIME THAT IS FDA LAW.
The end of 2015 brought more evidence of increased
oversight and regulation. After almost five years of waiting
and a high-profile lawsuit against FDA for failing to act,2
FDA issued the final rule for its Foreign Supplier Verification
Program (“FSVP”) as mandated by the Food Safety
Modernization Act3. This new regulatory scheme was the
result of much publicized tainted food imports, where it was
reported that one third of the population is at risk for foodborne illnesses4. As a result, lawmakers and regulators
alike arrived at the conclusion that neither “Import Alerts”
nor reliance on industry self-regulation is enough to ensure
the safety of food coming out of the supply chain. Now,
under FDA regulations, every importer of food (either human
or animal) has the responsibility to verify that all of their
foreign suppliers have adequate preventative controls, and
ensure the food is safe (with a few exemptions). FDA requires
these food importers to have an FSVP plan in its compliance
program that uses only FDA-approved certifiers to fulfill
certain parts of these new obligations.
There are a few takeaways. First, this is only the beginning
of FDA’s rejection of industry self-regulation – expect more
action in 2016 from FDA and state food and drug agencies
as they continue to target other areas that, before now,
were left to industry. Second, corporate counsel must
ensure their FDA compliance programs are up-to-date and
reflect the ever changing regulatory regime that is FDA law.
Generally, this involves (i) regular audit of the compliance
program, (ii) assurance that employees have adequate
training to recognize non-compliance in the supply chain,
and (iii) management of existing and future supply chain
contracts to adequately address regulatory risk (i.e.,
supplier indemnifying importer for non-compliance). These
simple steps will help mitigate weaknesses in a compliance
program, risk of legal action, brand-tarnishment, public
relation nightmares, and draining of company resources.
As we learned from the New York attorney general and the
cases pursued by the Justice Department – making your
compliance program defensible should be a top priority.
[email protected]
See NHMRC Statement on Homeopathy and NHMRC Information Paper – Evidence on the effectiveness of homeopathy for
treating health conditions, CAM02 2015, available at https://www.nhmrc.gov.au/guidelines-publications/cam02.
2
See Center for Food Safety and Environmental Health v. Margaret A. Hamburg, M.D., USDC NDCA, 4:12-cv-04529 (2013).
3
21 U.S.C. §384a.
4
See CRS Report R40916, Food Safety: Foodborne Illness and Selected Recalls of FDA-Regulated Foods. For other information
see The FDA Food Safety Modernization Act (P.L.111-353), Congressional Research Service Report to Congress (2011)
(identifying multiple food outbreaks up to the introduction of FSMA).
1
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