Dec 22, 2010 - frequency of required inspections and the regulatory burden on ... the hazard evaluation and preventative
E-ALERT | Food & Drug December 22, 2010
CONGRESS PASSES THE FDA FOOD SAFETY MODERNIZATION ACT Yesterday, the House of Representatives passed the FDA Food Safety Modernization Act (“FSMA”), which amends key provisions of the Federal Food, Drug, and Cosmetic Act (“FDCA”) and significantly revises federal food safety laws. The House’s vote follows the Senate’s passage of the bill on December 20, 2010. The bill first cleared the Senate Health, Education, Labor and Pensions (“HELP”) committee in November of 2009 1 but stalled throughout the spring and summer of 2010, as Congress addressed other priorities, including health care and financial system reform. In August of 2010, the HELP committee released a Manager’s amendment to the bill, which lessened the frequency of required inspections and the regulatory burden on small businesses. 2 The bill, as passed in the Senate and adopted by the House, closely reflects the Manager’s amendment with the addition of an amendment offered by Senator Jon Tester that exempts from the bill’s hazard analysis and preventative control provisions certain small businesses that earn less than $500,000 in revenue and sell their products within the same state or 275 miles. 3 The final bill does not adopt the controversial proposal by Senator Dianne Feinstein to ban bisphenol-A. The House passed its own food safety bill in July of 2009, and it differed from the Senate version in several key respects, including the imposition of per-facility user fees and more frequent inspections. 4 Holding a conference committee was reportedly not feasible during the remaining lame duck session, however, and the House ultimately accepted the Senate’s bill. President Obama is expected to sign the legislation into law shortly.
I. KEY PROVISIONS The FSMA introduces many revisions to the federal laws regarding food safety, some of which represent significant changes from the existing scheme.
A.
Preventative Process Controls and Hazard Evaluation
Section 103 of the FSMA adds new section 418 to the FDCA, which requires facilities to conduct a hazard evaluation to identify hazards that are reasonably likely to occur, including “biological, chemical, physical, and radiological hazards, natural toxins, pesticides, drug residues, decomposition, parasites, and unapproved food or color additives,” and identify and implement preventative controls to provide assurances that the identified hazards would be significantly minimized and that food would not be adulterated. 5 These controls must include:
For our client alert summarizing the version of the FSMA cleared by the HELP committee, click here. For our client alert summarizing the Manager’s amendment, click here. 3 Senator Tester’s amendment can be found here. 4 Click here for our client alert describing the original House bill. 5 FSMA, § 103. 1 2
BEIJING | BRUSSELS | LONDON | NEW YORK | SAN DIEGO | SAN FRANCISCO | SILICON VALLEY | WASHINGTON www.cov.com
COVINGTON & BURLING LLP
sanitation,
training,
environmental controls,
allergen controls,
a recall contingency plan,
GMPs, and
supplier verification activities.
Facilities are required to:
monitor the controls,
establish corrective actions,
maintain records of monitoring, instances of nonconformance, and corrective actions taken, and
verify that the plan is working, including through the use of testing programs.
The Act also requires that the results of the hazard evaluation and identification of controls be reduced to writing and made available to FDA during inspections. A reevaluation of the controls is required every three years or when a significant change is made in the activities conducted at the facility, in which case the reevaluation must precede the change. FDA can also require a reanalysis to respond to new hazards or developments in scientific understanding. These provisions become effective eighteen months after passage, 6 during which time FDA is required to promulgate regulations establishing minimum standards for the effective implementation of the section. The regulations are required to be flexible. 7 Failure to comply with these standards would be a prohibited act under section 301 of the FDCA. Section 105 of the Act, creating new section 419 of the FDCA, directs FDA to issue regulations establishing safety standards for fresh produce, and it prioritizes regulations for raw fruits and vegetables that have been associated with food borne illness outbreaks. 8 In developing the standards, FDA must consider existing standards foods must meet to be certified as organic. Like the hazard evaluation and preventative controls provision, a failure to comply with these standards would be a prohibited act under section 301 of the FDCA. Compliance with these new provisions could require significant resources. For companies that already have hazard evaluation and preventive control systems in place, compliance may require a reevaluation of the systems to ensure that they address all of the Act’s requirements and, eventually, adhere to FDA’s minimum standards regulations. Companies that do not have such systems in place will need to start from scratch, potentially requiring significant changes to the manner in which they evaluate their supply chain, manufacturing, and distribution processes.
“Small” businesses and “very small” businesses are given additional time to comply. Id. Excluded facilities include: (1) at FDA’s discretion, warehouses, the storage of raw agricultural commodities, and pet food manufacturers, (2) facilities subject to the FSMA provisions on safety of fruits and vegetables, (3) facilities subject to existing FDA HACCP or similar programs, (4) dietary supplements, and (5) alcohol facilities. In addition, the bill exempts certain “qualified” very small businesses with revenues under $500,000 and which sell most of their products locally. 8 FSMA, § 105. 6 7
C&B
2
COVINGTON & BURLING LLP The provisions also create some ambiguities. It is somewhat unclear how specific the Act permits FDA’s regulations to be, given that they must provide “sufficient flexibility.” Similarly unclear is what happens if FDA misses its eighteen month deadline, or issues the regulations right before the amendment becomes effective. This leaves open the possibility that manufacturers will receive little agency guidance in designing their initial preventative control plans.
B. Traceability The FSMA, section 204, requires FDA to improve its capacity to trace and track food during a foodborne illness outbreak. Within 270 days of the bill’s passage, FDA must establish pilot projects to evaluate the efficacy of different systems for tracing packaged foods and fruits and vegetables. 9 FDA will report its findings from the pilot projects to Congress and make recommendations regarding tracing procedures. Within two years, FDA must issue proposed regulations requiring the maintenance of records by persons and facilities that will allow FDA to trace high risk food during an outbreak. Before issuing final standards for recordkeeping, however, FDA must hold public meetings in diverse locations of the country to offer opportunities for public comment. 10 The new recordkeeping requirements cannot require specific technologies, and FDA is prohibited from requiring a full pedigree for foods. Section 204 also reduces the effect of the programs on the agricultural industry, and directs the Government Accountability Office to evaluate the new recordkeeping requirements, with specific attention to the program’s compliance costs.
C. Imports Another important component of the FSMA is its provisions regarding imports. The United States Department of Agriculture (USDA) — tasked with regulating imports of meat and poultry — has a robust, multi-tiered program for supervising imports; FDA regulates a broader array of products but is criticized as relying primarily on inspections at the port of entry and reactive measures. The FSMA introduces greater parity between the agencies’ respective powers and imposes various preventative duties on the industry. 1.
Foreign Supplier Verification Programs
Section 301 of the Act, creating a new section 805 of the FDCA, requires importers of food to have in place a program to verify that imported food is produced in accordance with U.S. requirements (including the new preventative controls required by the Act) and is not otherwise adulterated or misbranded. 11 The section also requires FDA to issue guidance within one year to assist importers in developing supplier verification programs and promulgate regulations to provide for the content of the foreign supplier verification program. The regulations must require importers to have programs that are sufficient to provide assurances that the foreign supplier has processes and procedures equivalent to those required under the FSMA’s preventative control provisions. The type of activities that FDA “may” require to be included under such a program include:
monitoring records for shipments,
lot-by-lot certification of compliance,
annual on-site inspections,
FSMA, § 204. Current law requires persons and facilities to maintain records only concerning a food’s immediate previous source or immediate subsequent recipient. FDCA § 414(b), 21 U.S.C. 350c(b); 21 C.F.R. §§ 1.326 - 1.368. 11 FSMA, § 301. 9
10
C&B
3
COVINGTON & BURLING LLP
checking the hazard analysis and preventative controls of the foreign supplier, and
periodically testing and sampling shipments.
Importing food that does not meet the requirements of the section is a prohibited act. Additionally, section 304 amends section 801(m)(1) of the FDCA to require notice to FDA upon entry to the United States of any other country that refused entry of the imported food. Some food importers may employ a variation of a safety assurance plan, but — as with preventative control plans — it will be important to verify that their plans meet the specific criteria laid out by the Act. For example, importers will need to verify that their foreign suppliers utilize preventative controls sufficient to comply with the FSMA’s new requirements. 2.
Certification and Auditing
Section 303, amending FDCA section 801, permits FDA to require, as a condition of granting admission for imports, that an entity provide certification or assurances that the food complies with the FSMA. 12 Certificates may be issued by an agency or representative of a foreign country, or by a person or entity accredited by FDA. Section 307, adding new section 808 to the FDCA, requires FDA to create a system through which it recognizes accrediting bodies, who in turn accredit auditors (which may include foreign governments), who in turn would certify that foreign supplier facilities meet the requirements of the Act. 13 As a condition of accreditation, an auditor is required to agree to issue a written and electronic certification to accompany each food shipment for import from a certified facility. These certificates would be considered by FDA when targeting inspection resources. Certification would be required to participate in the voluntary qualified importer program (described below). The Act also authorizes FDA to monitor auditors. FDA must issue regulations regarding conflicts of interest, including a requirement that audits be unannounced. Auditors will be required to immediately notify FDA upon discovering “a condition that could cause or contribute to a serious risk to the public health.” FDA must withdraw accreditation from an auditor if food from a facility it certifies is linked to an illness outbreak, if the auditor no longer meets requirements, or following a refusal to allow U.S. officials to conduct necessary audits. The Act also requires FDA to set up a system through which auditors reimburse FDA for the work the agency performs to establish and administer the accreditation system. Taken together, these provisions represent a marked increase in FDA’s import oversight. Under the scheme mandated by the FSMA, FDA could require that all foreign suppliers be evaluated for compliance with food safety standards. The new system could also offer benefits to the industry. For instance, using third-party certification may present a more efficient manner to evaluate foreign suppliers, thereby reducing the risk of importing and utilizing contaminated food. 3.
Voluntary Qualified Importer Program
Section 302 of the FSMA, creating new section 806 of the FDCA, requires FDA to establish a program for expedited review and importation of food by importers who have voluntarily agreed to participate in the program. 14 Eligibility for the program requires third-party certification, and — in FSMA, § 303. FSMA, § 307. 14 FSMA, § 302. 12 13
C&B
4
COVINGTON & BURLING LLP deciding eligibility — FDA is required to consider such factors as the nature of the food imported, the compliance history of the foreign supplier, the compliance of the importer, and other indicia of risk. Conceptually, the program is similar to voluntary, expedited screening programs at airports. To take advantage of the potentially decreased transit times, importers of food may consider requiring that their lower risk suppliers be certified under the program. Competition among foreign suppliers to do business with U.S. manufacturers and distributors may also pressure suppliers into entering the program.
D. Recordkeeping and Access Section 101 of the FSMA, amending section 414 of the FDCA, significantly expands FDA access to records. Under current law, FDA officials may access records relating to food articles that FDA reasonably believes are adulterated and present a risk of serious adverse health consequences or death. 15 Under the FSMA, FDA is also granted access to records concerning food articles that the agency believes might be affected in a similar manner. Consistent with current law, however, records access is limited to records needed to determine if the food article is adulterated and may cause “serious adverse health consequences or death.” If it provides oral or written notice, FDA may request records of the facility’s food safety plan and access to information concerning preventative controls and corrective actions. 16 In addition to the traceability regulations discussed above, the bill increases other recordkeeping requirements. Facilities must keep records about preventative controls and corrective actions for at least two years. 17 The bill also mandates that importers maintain for two years records regarding foreign importer supply verification. 18 These provisions may necessitate that industry members review their recordkeeping procedures. For instance, food companies should consider whether they possess adequate records retention and maintenance policies. It will also be important to ensure that records are substantively complete by adequately capturing the facility’s food safety plan. Such records may come under FDA scrutiny during routine inspections.
E.
Inspection
Section 201 of the bill requires more frequent inspections of food facilities. A facility’s frequency of inspection is tied to its risk profile, 19 with facilities classified as high-risk or low-risk based on the food produced at the facility, the compliance history of the facility, the facility’s hazard analysis, the food satisfying the priority criteria of section 801(h)(1), and whether the facility is certified by thirdparty auditors under new sections 801(q) and 806. High-risk facilities must be inspected once during the first five years after the bill’s passage, and every three years thereafter. Low-risk facilities must be inspected once during the first seven years, and then every five years thereafter. In addition, FDA must inspect 600 foreign facilities in the first year following enactment, and it must double that number in each of the first five years thereafter.
FDCA § 414(a), 21 U.S.C. § 350c(a). FSMA, § 103. 17 Id. 18 FSMA, § 301. 19 FSMA, § 201. 15 16
C&B
5
COVINGTON & BURLING LLP The bill leaves room for FDA to exercise its discretion to conduct a greater number of inspections within the specified time period. FDA is required to make an annual report to Congress regarding the number of facilities inspected and the cost of the inspections.
F.
Enforcement Provisions
The bill contains several enforcement mechanisms permitting FDA to respond to violations of the FDCA, such as registration suspension, whistleblower protections, and lowering the standard for administrative detention of food. FDA may suspend a facility’s registration if the (1) the holder was responsible for an adulteration that creates a reasonable probability of causing serious adverse health consequences or death; or (2) if the holder knew or should have known that a food product it held, packed, or received posed a risk of causing serious adverse health consequences or death. 20 The suspension order would prohibit a facility from importing food into the US and from introducing food into the stream of commerce. Within two business days of issuing the suspension order, FDA must provide the registrant with an opportunity for an informal hearing. FDA must vacate the suspension if it determines that there are inadequate grounds to sustain the suspension. If a facility’s registration is suspended, the facility must submit a corrective action plan to FDA detailing plans to correct the conditions leading to the suspension. The bill also protects whistleblowers who report violations of the FDCA. 21 Under current federal law, whistleblowers do not receive protection from retaliation for reporting violations. The bill provides procedures for handling employment discrimination complaints and entrusts the Labor Department with investigatory powers. The Labor Department also is authorized to take affirmative action to halt discrimination, reinstate the employee, restore the employee’s terms of employment, and provide compensatory damages. The bill also expands FDA’s power to order administrative detentions by lowering the standards for an administrative detention and expanding the circumstances in which detention may be ordered. 22 FDA is authorized to order the administrative detention of a food article if there is “reason to believe” that the food article is “adulterated or misbranded.” Under current law, FDA may order administrative detention upon “credible evidence” that the food article presented a “threat of serious adverse health consequences or death to humans or animals”— a higher evidentiary standard in several respects. 23 For instance, the lower standard potentially could allow FDA to detain food whose labeling is not compliant with its rules regarding nutrient content claims or health claims. The amendments take effect 180 days after the bill’s enactment, and FDA must issue an interim final rule within 120 days to implement the changes.
G. Recalls The bill provides FDA with mandatory recall authority over food. 24 When FDA determines “that there is a reasonable probability” that food is adulterated or misbranded under section 403(w) and will cause “serious adverse health consequences or death to humans or animals,” FDA may ask the responsible party to voluntarily recall the article. If the party refuses, FDA may issue a cease distribution order requiring that the party “immediately” cease distributing the item and notify recipients of the recall. Within two days of issuing the cease distribution order, FDA must provide the FSMA, § 102. FSMA, § 402. 22 FSMA, § 207. 23 FDCA, § 304(h)(1)(A), 21 U.S.C. § 334(h)(1)(A). 24 FSMA, § 206. 20 21
C&B
6
COVINGTON & BURLING LLP party with an opportunity for an informal hearing. After a hearing, FDA must vacate the cease distribution order if it determines that there is insufficient evidence to support the order. Recall authority is limited to the Commissioner of FDA, and refusal to follow a recall order is a prohibited act under section 301. The bill also expands civil penalties for failure to follow a recall order. Under current law FDA can issue civil fines to food manufacturers and distributors only for the introduction of foods containing unsafe pesticides into interstate commerce. 25 The FSMA provides that the failure to comply with a mandatory recall order could result in a $50,000 maximum fine for an individual and a $250,000 maximum fine for other entities; the maximum fine “for all such violations adjudicated in a single proceeding” is $500,000. 26 FDA must offer the opportunity for a hearing before imposing a fine. Section 211 of the bill amends section 417 of the FDCA and provides specific tasks for grocery stores to follow during recalls. Subsection (f) of amended section 417 would allow FDA to require responsible parties to submit “consumer-oriented information” such as descriptions of the food and affected product classification codes. It also adds a provision that requires grocery stores to notify consumers by posting recall information in a conspicuous area. A grocery store’s failure to comply with the notification requirements would be considered a prohibited act under section 301 of the FDCA, permitting the government to seek criminal prosecution against the store.
II. CONCLUSION While the FSMA represents a sweeping reform to the federal food safety laws, its day-to-day effect on the regulated industry will depend on several future developments. First, as noted above, the FSMA directs FDA to implement many of its mandates through rulemaking and guidance documents. Stakeholders will have the opportunity to present their views on a number of important issues, such as the rules governing HACCP plans. In addition, many of the mandates imposed on FDA are unfunded and will require appropriations from future Congresses. Given the emphasis on fiscal restraint during this year’s election, and the fact that Congress passed only a stopgap bill that will fund the government through March, it is possible that the incoming Congress will significantly roll back funding for federal agencies next year. This may affect FDA’s ability to implement various provisions of the Act, for instance, the increased inspection schedule. Covington & Burling LLP has closely monitored the development and passage of this legislation and would be pleased to answer any questions about its requirements. In addition, we will closely monitor the agency’s implementation of the new mandates, and we can offer assistance to parties interested in participating in the rulemaking process.
If you have any questions concerning the material discussed in this client alert, please contact the following members of our food & drug practice group: Peter Barton Hutt Eugene Lambert Miriam Guggenheim Clausen Ely Jeannie Perron Christopher Pruitt 25 26
202.662.5522 202.662.5422 202.662.5235 202.662.5152 202.662.5687 202.662.5401
[email protected] [email protected] [email protected] [email protected] [email protected] [email protected]
FDCA, § 303(f)(2)(A), 21 U.S.C. § 333(f)(2)(A). FSMA, § 206. C&B
7
COVINGTON & BURLING LLP This information is not intended as legal advice. Readers should seek specific legal advice before acting with regard to the subjects mentioned herein. Covington & Burling LLP, an international law firm, provides corporate, litigation and regulatory expertise to enable clients to achieve their goals. This communication is intended to bring relevant developments to our clients and other interested colleagues. Please send an email to
[email protected] if you do not wish to receive future emails or electronic alerts. © 2010 Covington & Burling LLP, 1201 Pennsylvania Avenue, NW, Washington, DC 20004-2401. All rights reserved.
C&B
8
