Dietary supplement and food product firms will not incur user fees for facility or import re-inspections or mandatory recalls until FDA establishes a waiver process for small businesses.

An Oct. 5 FDA guidance about user fees required under the Food Safety Modernization Act delays the assessment of any fees until at least January 2012.

FSMA directed FDA to propose guidelines for considering the burden the fees put on small businesses.

Under FSMA, user fees for fiscal 2012 are $224 an hour for domestic investigations and $325 when foreign travel is required.

Although the waiver process is for small businesses, the agency put all FSMA user fees on hold until the guideline is ready.

FDA spokeswoman Laura Alvey said “until the economic hardship guidance document has been finalized,” the agency will not issue invoices for re-inspections or recall orders to any firms subject to FSMA regulations.

According to the guidance, FDA recognizes the fees “could impose severe economic hardship” for some small businesses.

The agency in fiscal 2012 “intends to consider waiving, in limited cases, some or all of a fee based on severe economic hardship, the nature and extent of the underlying violation and other relevant factors,” the guidance says. Fees likely will not be charged before January, the agency says.

The waiver process will be important to the U.S. supplement industry, of which small businesses account for a majority.

“Small businesses are really the bread and butter of the dietary supplement industry,” said Cara Welch, the Natural Products Association’s scientific and regulatory affairs VP.

The number of small businesses – those with 20 or fewer employees – is growing, but the same is not true for large firms, Welch added.

“It’s reassuring to see that they are putting [the fees] basically on hold,” she said.

When FDA levies fees, it will charge facility re-inspection and recall-order fees only when the initial inspection began or recall order was issued on or after Oct. 1, the start of fiscal 2012.

Comments Will Play A Role

The comment period on the agency’s notice of the potential impact of the fees ends Oct. 31. Comments on the notice will be considered in writing the guidelines for requesting fee waivers.

“FDA does not intend to issue invoices for re-inspection or recall order fees until” a guideline is finalized to request reductions or waivers. – FSMA user fee guidance

The agency says public comments also will influence its procedure for calculating fees for re-inspections of imports of food or supplement finished products or ingredients.

“Recognizing the particular complexities involved in these issues, FDA is not in a position to assess import re-inspection fees until the agency has resolved these issues and the agency notifies the public,” according to the guidance.

FSMA excluded supplement firms from manufacturing requirements redundant of the 2007 good manufacturing practices final rule, but the law imposes user fees on all food industry sectors for the first time. The law also gave FDA mandatory recall authority for food products.

Fee Thresholds: OAI And Material Safety

The guidance clarifies that facility re-inspections are not likely when firms respond satisfactorily to problems noted in forms 483 following initial inspections and when the problems are not food safety threats.

However, with “enhanced” supplement oversight a goal of FDA’s recent draft food program strategic plan, more facility inspections could lead to follow-up inspections to ensure compliance (Also see "FDA Tightens Supplement Oversight In Food Program Strategic Plan" - Pink Sheet, 10 October, 2011.).

The guidance says fees may be assessed if agency officials conduct one or more additional inspections to evaluate corrective actions following an initial inspection classified as “Official Action Indicated” at the same facility.

This fee also would depend on whether FDA determined the non-compliance found in an initial inspection “was materially related to a food safety requirement,” the agency says.

During initial inspections, FDA officials will provide firms with a document outlining the circumstances under which a facility re-inspection fee could be collected. Firms will be informed following an initial inspection whether it is classified OAI and the violations materially are related to food safety.

The guidance lists four examples of material safety problems that would prompt facility re-inspections:

foodborne pathogens in ready-to-eat products,
pesticide residues on a food or feed product above tolerance level,
failure to declare the presence of a major food allergen (e.g., peanuts) in product labeling, and
lack of adequate hazard controls for seafood or juice.

While the examples largely address conventional food products, they also are touchstones for supplement manufacturers.

“The four violations that they list would be violations that they’re looking at right now. I would look at my facility and make sure it is compliant in those areas,” NPA’s Welch said.

“Wide” Calculations For Costs

FDA maintains a definition for calculating the charges that industry stakeholders questioned when the agency announced the rates in August (Also see "Supplement Industry Questions FDA's Calculations For Food Safety User Fees" - Pink Sheet, 8 August, 2011.).

As stated in the August user fee notice, total fees assessed will depend on the number of hours FDA officials spend directly on re-inspection or mandatory recall activities, according to the guidance.

“It covers a wide variety of activities,” Welch said.

In addition to a return inspection to determine compliance, re-inspection-related activities could include:

making preparations and arrangements for the re-inspection,
traveling to and from the facility,
analyzing records and samples,
preparing reports or examining labels, and
performing other activities as necessary to determine compliance with the requirements found to be violated.

Activities associated with a recall order could include conducting recall audit checks, reviewing and analyzing periodic status reports and the results of audit checks, conducting inspections, traveling to and from locations and monitoring product disposition.

While FDA already had authority to inspect food and supplement manufacturers to determine compliance with GMPs or similar regulations, the agency gained authority through FSMA to order recalls.

By Malcolm Spicer

Food Safety User Fees On Hold Until FDA Creates Waiver Process

More from Archive

More from Pink Sheet