Food and Drug Administration (FDA)

FDA’s Regulatory Scope

Today the Food and Drug Administration is located in Silver Spring, MD and employs over 11,000 people with an annual budget exceeding 2.6 billion dollars. It is “responsible for protecting the public health by assuring the safety, efficacy and security of human and veterinary drugs, biological products, medical devices, [the US’s] food supply, cosmetics, and products that emit radiation… [and] the manufacturing marketing, and distribution of tobacco products.” FDA also takes on a role in scientific advancement to improve public health.

While FDA’s enforcement and oversight powers continue to grow, their regulatory scope has changed little. FDA oversees the following:

• Foods & Beverages: Food labeling, food safety, foreign import of foods
• Drugs: New drug approvals, over the counter and prescription drugs, labeling, claims
• Dietary Supplements: Ingredient safety, claims, labeling
• Cosmetics: Ingredient safety, labeling, claims, colorants
• Medical Devices: Pre-market approval, device standards, safety
• Veterinary Products: Pet food, animal feed, drugs and devices for animals
• Radiation-Emitting Products: Electronic products that emit radiation, safety/oversight
• Alcohol and Tobacco: Oversight in partnership with other Federal age

With the growing volume of imports, FDA has found itself overworked, without the throughput needed to regulate inside and outside the US. New legislation expanding FDA’s scope (such as the Bioterrorism Act) has brought increased effort needed to carry out FDA’s duties. FDA’s regulatory oversight extends globally to facilities that manufacture, produce, or store FDA-regulated products intended for the US market. Foreign industry oversight has increased demand on FDA personnel, leading to major changes in imports and the costs associated with FDA inspection. This includes FDA’s planned re-inspection fee program, which applies to imported food shipments that appear to have a safety violation. The Food Safety Modernization Act (FSMA, 2011) represents the greatest expansion of the agency’s powers and oversight in a long time. FDA is growing substantially, both in budget and resources. FDA will have unprecedented control over the safety and quantity of imported food. These changes have increased the financial burden, especially on small businesses, even if the importer is compliant.

FDA has a complex relationship with the American public. Citizens believe FDA has poor regulatory implementation, misuses resources, and places emphasis on the wrong issues. Examples include the responses to food safety outbreaks such as Listeria and E. coli and FDA’s hesitation to enact rules related to antibiotics in livestock. With growing online communication (especially social media), FDA has received increased backlash as it attempts to inform and communicated with the public. FDA maintains a website, which includes regulatory guidance, rules, import alerts, safety alerts, other regulatory listings, directories, and articles. FDA also has a Facebook page, YouTube channel, multiple Twitter accounts, Flickr and Instagram accounts and a blog.

Enforcement

When FDA has enough evidence that a product is in violation of the Food Drug & Cosmetic Act (FDCA), the agency can seek a court ordered seizure of the affected products. FDA seizures are implemented through a civil trial in a federal court; only very rarely can FDA seize something without instituting a court action or a seizure warrant.

FDA can administratively detain certain products (human and animal foods and medical devices) in commerce. This prevents the distribution of the detained goods while an administrative hearing is held. These actions are rare and usually occur only where there are concerns that the affected products will be distributed before FDA initiates a seizure. Administrative detentions do not occur in court.

Occasionally, FDA asks a federal judge to restrain certain conduct by a person that is believed to be in violation of the FDCA. When FDA seeks and obtains a Temporary Restraining Order (TRO), the private party does not appear at all, and FDA/Department of Justice makes a one-sided argument for the TRO. Because of this, TROs are short-term and often followed by a Preliminary Injunction hearing before a federal judge. Here, the restrained person has the opportunity to argue their side. FDA must then demonstrate that the restrained person is violating the FDCA, could win in a trial, and that the government or public will be harmed without the restraint. Permanent Injunctions require full trials in federal court.

The FDCA describes many “prohibited acts,” which can result in criminal sanctions. Because the FDCA is a “strict-liability” statute, anyone who commits prohibited acts can be criminally convicted notwithstanding their intentions. If convicted for a strict liability misdemeanor crime, the defendant, if an individual, could be incarcerated for up to one year. Any defendant may need to pay hefty criminal fines and penalties and in certain circumstances disgorgement is available. FDA/Department of Justice must demonstrate, beyond a reasonable doubt, the FDCA violation occurred and the defendant was the person responsible for it being committed. FDA does not have to demonstrate that the defendant intended to perpetrate any fraud in order to obtain a misdemeanor conviction. If a person commits a prohibited act with the intent to defraud or mislead, that person can be convicted and sentenced under the felony provision of the FDCA. This conviction can lead to up to 10 years in prison. A person who attempts to defraud or mislead FDA, preventing the agency from conducting its statutorily mandated mission to regulate foods, drugs, cosmetics, devices, etc., can be convicted under the felony provisions of the statute.

Sometimes the US Government and persons it alleges have violated the FDCA will enter into an agreement to settle a case without trial. When this happens, the private parties often enter into a consent decree with FDA, agreeing not to participate in certain activities. If a consent decree is too broadly worded, it can unnecessarily restrict otherwise legal and unrelated activity that was never an issue in the dispute with FDA.

When certain criteria are met, FDA may seek to debar an individual from participating in a particular industry, from filing certain applications with the agency, or from appearing before the agency on behalf of another. The result of debarment is the person is functionally prohibited from engaging in any business involving the relevant product (or even industry). These actions are administrative in nature and occur following an administrative hearing. FDA has explicit authority to debar individuals from submitting or participating in the submission of a new drug application. It can also debar a person from importing food into the US.

Inspections

Congress has granted FDA the authority to inspect any establishment that manufacturers, processes, packs, or holds food, drugs, medical devices, tobacco products, or cosmetics for interstate distribution. A company must allow an inspection if FDA arrives to conduct it at a reasonable time, within reasonable limits and in a reasonable manner, or risk violating the FDCA. However, a company has the right to receive a written notice regarding the inspection, verify that the person conducting the inspection is an FDA employee, and have FDA explain any issues of concern that arise during the inspection. In addition, companies can (and should) make corrections as soon as they are identified by FDA, even during the inspection, and have those corrections noted in the FDA file.

Free Facility Inspection Checklist

FDA can require a company to provide certain documents during an inspection. While the law explicitly permits record inspection in specific instances, FDA sometimes oversteps its bounds. Even if your facility has not been inspected by FDA, it is wise to have someone with knowledge of what FDA will look for help prepare your facility for such an inspection.

Warning and Untitled Letters 483s

When FDA conducts a facility inspection, it will conclude the inspection by having a meeting with the facility’s management to discuss the inspector’s observations. The FDA Inspector may identify any objectionable conditions and the inspected firm has the ability to ask questions about the inspector’s observations. Depending upon the severity of the problems, the Inspector may issue an FDA Form 483, outlining the most objectionable observations. FDA expects a response to an FDA Form 483 in writing identifying the steps that will be taken to adequately address their concerns.

If FDA is not satisfied with a facility’s 483-response, or if the violations are of a significant nature relating to consumer safety, FDA may issue a “Warning Letter.” Although anyone can request a copy of a 483 from FDA and receive it, FDA Warning Letters are public documents from the point they are issued and are published on FDA’s site. Warning Letters always include the fact that the violations noted in the letter are not intended to be an all-inclusive list of problems discovered at the facility, as well as setting a timeframe for the facility to respond to the warning letter. If FDA observes violations but has unclear authority, FDA may issue an Untitled Letter.

FDA will expect a written response to FDA 483s, Warning Letters, and Untitled Letters. These responses must address the agency’s concerns and should include any changes the facility has implemented in its manufacturing, storage, or operating processes based on the inspection.

Refusals

FDA can stop an imported shipment from entering the US if they believe it does not follow US law. This typically begins with detention, where importers have an opportunity to respond to FDA concerns. If FDA still believes a product does not comply with US law, they will issue a Notice of Refusal of Admission. At this point, the shipment is considered refused, and the importer must export or destroy the shipment within 90 days. If FDA detains a shipment, it will ultimately be refused unless the merchandise is brought into compliance (with FDA’s permission), or the charges are demonstrated to be incorrect.

Rescinding a refusal is much more challenging than resolving a detention. Although FDA considers refusals to be final, if FDA has made a procedural, legal, scientific, or factual error, it is possible to have a refusal reversed. Reversing a refusal requires acting quickly, and FDA officers can be reluctant to admit to mistakes.

It is better to resolve problems at the detention stage, before refusal. In most detention cases, products can be released by contesting the detention or bringing the product into compliance. Sometimes, the importer can apply to recondition or re-label the detained product. Of course, the best time to prepare for regulatory issues is before they happen.

If a refusal is not overturned, the shipment must be exported or destroyed, under government supervision, within 90 days. Customs or FDA may supervise the destruction or exportation, but local port rules also govern redelivery and supervision. Local environment laws impact the appropriate locations and government supervision necessary for product destruction. 90 days can pass quickly, so companies should start quickly. If all of the refused goods are not exported or destroyed within 90 days, Customs can assess liquidated damages. Liquidated damages claims are three times the value of the goods, up to the value of the import bond. Companies can petition to mitigate the liquidated damages.

Criminal Investigations

FDA does not prosecute its own criminal cases, the Department of Justice does. FDA does investigate many criminal cases under limited federal criminal enforcement jurisdiction related to counterfeit drugs. Under this authority, FDA has established the Office of Criminal Investigations (OCI), which conducts these investigations. OCI obtains and executes search warrants, arrest warrants, conducts physical surveillance, obtains and serves grand jury subpoenas, obtains and reviews telephone toll records, bank records, etc., to build a case against an individual, company, or conspiracy.

FDAImports CEO & founder, Benjamin England, was one of the first FDA OCI Special Agents to ever enforce the criminal provisions of the FDCA during his tenure at FDA (OCI-Miami Field Office, 1992- 1998). Our affiliated attorneys have participated in investigating or prosecuting (as former Governmental Agents or Attorneys) and defending (in private practice) federal criminal cases involving counterfeit drugs, substitute drugs and biological products, prescription drug diversion, prescription device diversion, smuggling of foods, cosmetics, and other FDA-regulated products, and importation contrary to law of dietary supplements and electronic emitting products. Additionally, they have worked with other attorneys on matters involving money laundering, mail fraud, wire fraud, obtaining products by fraud, conspiracy to commit violations against the government or against private persons or companies, and other factual scenarios