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Focus on User Fees: The Cost of Non-Compliance

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October 18, 2011
David Acheson

Food Safety Modernization Act Implementation Update

Nine Month Food Safety Modernization Act Implementation Update

by Dr. David Acheson

Since the signing of the Food Safety Modernization Act (FSMA) in January 2011 the FDA has been busy working toward the various statutory deadlines in the Act. Things are moving fast, the Agency is on track and has made significant progress towards implementing the various components of FSMA.

In July, several of the provisions came into effect and the Agency met several more milestones. FDA is now able to suspend registration of facilities that are not in compliance with the Food, Drug, and Cosmetic Act. Facilities with a suspended registration will not be able to put product into commerce. The new prior notice requirement is in effect and those submitting product for entry to the U.S. will have to indicate if any other countries have refused the shipment.

FDA is now able to use the new administrative detention authority, which lowers the bar for the Agency to detain food. Under the new rule, FDA can order detention of food if there is reason to believe that an article of food is adulterated or misbranded. Prior to the new law, the Agency had to have "credible evidence or information indicating that the article of food presents a threat of serious adverse health consequences or death or humans or animals." Detaining food in a variety of situations has always been a challenge for FDA and the usual approach has been to rely on the states to embargo products of concern. The new law creates a lower bar for using administrative detention and gives FDA an additional tool for preventing contaminated food from entering commerce.

At the beginning of September, FDA announced that the Institute for Food Technologists (IFT) will conduct two pilots on tracking and tracing sources of foodborne illness, as required by the Food Safety Modernization Act. One pilot will focus on produce and the other on processed food. The pilots will look at methods and technologies available for tracking and tracing food and the findings will be considered as the Agency undertakes rulemaking on new recordkeeping requirements for high risk foods.

FDA has accomplished several other implementation milestones, including:

  • Developing a joint anti-smuggling strategy with the Department of Homeland Security;
  • Issuing guidance for industry on assuring the safety of new dietary ingredients;
  • Signing a memorandum of understanding with the U.S. Department of Agriculture to establishes a cooperative grants program for food safety training;
  • Opening a docket for industry input on preventive controls for registered facilities;
  • Creating a consumer friendly recall portal on their website; and
  • Issuing updated hazards and controls guidance to the seafood industry.

What's next?
In the next few months it will be critical for industry and stakeholders to monitor FDA's actions around the implementation of FSMA and to provide insight and best-practices. Especially in light of a tightened budget, FDA will be looking to build on existing best practices and leverage programs where possible. As a general message to the regulated industry there is already a lot of information indicating where FDA is heading with preventive controls and the components of a Food Safety Plan. Based on this it is prudent for all firms impacted by these new requirements to be working right now on first understanding what they will have to do, second begin the process of determining what needs to be addressed and third starting to work on any gaps, especially as new user fees come into play.

Since the signing of the Food Safety Modernization Act (FSMA), the FDA has been busy working toward its statutory deadlines. Things are moving fast, the Agency is on track, and it has made significant progress toward implementation. (Read more on the updates at www.qualityassurancemag.com)

Taking effect this month are the new user fees, as outlined in the FDA Federal Register Notice that defines which fees may be assessed. FDA has asked for comment and may adjust the rates for FY 2013 based on input. FDA has also identified an hourly rate for authorized user-fee situations, meaning that the charge will be based on the severity of a problem and the clarity of documentation and corrective action demonstration. FDA is now authorized to collect fees for reinspections, recall activities, and import reinspections/examinations. Following are assessments and prevention strategies for each.
 

Reinspections
The fee will be assessed if FDA conducts a facility reinspection, but only for facilities with a final designation of "Official Action Needed (OAI)" related to food safety requirements. FDA may issue additional guidance when non-compliance is found to be materially related to food safety.

The responsible party for the registered facility or the U.S. agent for a foreign facility will be accountable for fees.

The cost will be based on the hourly rate, so will depend on the time spent on the reinspection, including any physical surveillance or compliance reinspection at the facility, preparations and arrangements, travel, report preparation, sample or label analysis, and other activities needed to determine compliance.

The best strategy to avoid this fee is to ensure that your facility is in compliance with all U.S. laws and regulations at the time of inspection. If you are not in compliance, it will be important to ensure the problem has been fully addressed, and you have clear documentation of all corrective actions to ensure the reinspection takes the minimal amount of time.


Recalls
The fee may be assessed for failure to comply with a recall order. This could include not initiating an FDA-ordered recall, not conducting the recall in the manner ordered, or not providing information as ordered. This fee will not apply to voluntary recalls.

The responsible party is the party that receives the recall order (responsible party for a domestic facility or an importer).

The cost will depend on time spent on the recall, which could include recall audit checks, report review and analysis, inspections, travel, and product disposal monitoring.

The best strategy to avoid this fee is to quickly and voluntarily address any potential recall situations. Prior to issuing a recall order or assessing user fees, FDA must allow a voluntary recall. Thus a proactive approach is best. Implementing a robust product tracking system will ensure the ability to quickly identify and recall product if needed.
 

Import Reinspection/Examination
The fee may be assessed for import reinspection/examination when non-compliance materially related to food is found, including:

  1. Reconditioning of food to bring it into compliance with the FD&C Act. Fees may be assessed for time spent to review and approve the request.
  2. Importers seeking admission of a detained article, including that of an Import Alert. The fee could include review of admissibility evidence submitted. FDA will not charge for documentation review if food not under an import alert is detained and later found to be in compliance, or if a region/country is on import alert and an entity provides evidence that conditions do not apply to them.
  3. Requesting removal from an Import Alert for Detention Without Physical Examination. FDA can charge for review of supporting documentation and related examinations to determine if compliance has been achieved.
  4. Destruction of food refused admission if supervised by FDA or Customs and Border Control. The fee may also be charged for time spent reviewing and approving destruction protocol.

The responsible party is the owner or consignee of the food responsible for the reconditioning or providing supporting evidence of admissibility; or the importer subject to examination that requests removal of the food from import alert or destroys the product.

The cost will depend on the time spent on the import reinspection or examination, including review of importer documentation.

The best strategy to avoid fees and delays is to ensure that products comply with U.S regulation and are tested for such. Supporting evidence should be clear and records well-documented so it is easy for FDA to determine cause and corrective action. Poor recordkeeping will lead to additional user fee costs and lower likelihood of product release.

 

 

Click the picture above to see the full chart.