Operating under a consent decree is a “dance with the devil,” but it is the last chance for dietary supplement manufacturers to stay in business if they fail to satisfy FDA about compliance with good manufacturing practices, according to food and drug attorney Tony Young.

At SupplySide West in Las Vegas on Nov. 7, Young advised supplement firms about responding after FDA notes GMP violations at manufacturing facilities and about adjusting to a consent decree if the agency determines a firm is not working toward compliance.

Young, of Washington-based Kleinfeld, Kaplan and Becker LLP, said FDA, working with the Department of Justice, seeks consent decrees only after a firm fails to make improvements when the agency submits form 483s about violations found in GMP inspections and issues one or more warning letters.

“It can be a long and arduous process because you’ve agreed to the fact that you are out of compliance and now you have to come back in.”

– attorney Tony Young, of Kleinfeld, Kaplan and Becker

While a consent decree allows time for a firm to make changes with the goal of re-opening, it requires costly updates to systems and equipment and retaining a consultant and attorneys, said Young. A consent decree “is like inviting you to dance with the devil, but it may be the way to keep your company in business,” he said.

“Sometimes it becomes difficult and they go into bankruptcy. It can be a long and arduous process because you’ve agreed to the fact that you are out of compliance and now you have to come back in,” Young said, adding that a food product firm he worked with needed “five months to come back into compliance and be allowed back into business.”

The most recent consent decree with a supplement firm stemming from GMP violations was Nov. 6 with Pharmacist’s Ultimate Health Corp. The St. Paul, Minn., firm and its president, Stephen Poindexter, agreed to a consent decree after receiving an August 2011 warning letter about marketing supplements with disease claims in addition to being out of GMP compliance. PUH must stop distributing products until all disease claims are removed from its websites and product labels and it must come into GMP compliance before re-opening, FDA said Nov. 20 Also see "Regulatory News In Brief" - Pink Sheet, 19 September, 2011..

Notification that FDA is seeking a decree should not come as a surprise. “When you get a warning letter, it’s exacerbated. Now you have more of an obligation to respond,” Young said, adding that FDA “is prepared to bring a case if you don’t respond.”

FDA sends a letter to a firm’s head executive stating it intends to proceed in court, but offering the company the opportunity to first reach a consent decree. If the firm agrees, FDA files the decree along with a complaint for injunction with the court.

A manufacturer can refuse to enter into a consent decree offered by FDA and DOJ, but the usual result is a permanent injunction forcing the business to close, either with or without a consent decree that maps out a plan for potentially reopening. Consent decrees often impose fines and require reimbursements to FDA for inspection costs, and set deadlines for completing certain actions and penalties for noncompliance.

“Litigating with FDA and defending against FDA is hugely expensive. They have a model they want of an injunction and they won’t give much leeway,” said Young.

Decrees Make Lasting Impact

A consent decree also can have a lasting effect on a firm’s customer base and reputation. “You try to explain to the customers why they should continue to do business with you even though FDA has filed to enjoin you from being in that business,” he said.

And some firms might opt to shutter their operations rather than endure life under a consent decree. “If you’re making good money and if you have good customers and if your customers will stay with you, then entering a consent decree and proceeding with business is a worthwhile thing,” Young said.

A manufacturer must retain a consultant to review all procedures and facilities to ensure GMP compliance, which can take from a few weeks to months depending on whether the firm has manufacturing and other records in place.

Decrees also require a firm to contact FDA through the consultant. And even when a firm emerges from a consent decree, it still must have the consultant review procedures and submit inspection reports periodically to FDA.

To prevent FDA from even considering a court filing, Young recommends firms read warnings to find out exactly where FDA says changes are needed.

Firms also should provide records and interact with FDA “when they’re breathing down your neck. Assure FDA that you’re carrying out promises – so if you promise to do things you should send periodic reports, and for goodness sakes, don’t not do anything,” he said.

Young noted consent decrees are not imposed on firms the first time FDA notes a violation. Even industry veterans “are in a constant learning process. You can assume that [FDA is] going against firms that have reached a level of indifference.”

In 2012, FDA reached two other consent decrees requiring two supplement manufacturers to cease production after failing to respond satisfactorily to GMP warnings. In October Venus Pharmaceuticals International agreed to stop production and distribution after it received a warning letter in May; and in March, ATF Fitness Products Inc. entered a decree that prohibits the firm from engaging in any business with supplements until an independent expert verifies GMP compliance. ([A#05121029014]).

In August, Division of Dietary Supplement Programs Director Dan Fabricant warned that FDA would pay closer attention to basic GMP failures since all firms have had at least two years to comply with the 2007 GMP final rule published with compliance deadlines on a three-year phase-in determined by company size.

FDA Always Watching

An FDA warning letter usually addresses claims on a specific product, but applies to all products a firm markets. When replying, a firm should list how it will fix all the areas of concern with the specific product and any other areas the violations might touch.

Young said even after responding, firms should be sure to maintain the changes because FDA investigators “just don’t go back to their cave. They have a memory and they’ll come back again.”

The violations stated in GMP warning letters also extend to contract manufacturers. Firms marketing products made by contract manufacturers not only should assure their manufacturing partners are compliant with FDA regulations, but also be prepared for the agency to inspect their facilities.

“It’s like whack-a-mole – you have to be on top of each one of those components, which is more than most [supplement marketers] ever thought they’d have to,” Young said.

One way to help ensure GMP compliance is to hire a consultant, but Young cautions to do due diligence in the search. “When FDA comes in they’re going to look for specific things and you’ve got to have a consultant who knows what they’re going to be looking at.”

He added that warnings to one firm should be a signal across the industry, particularly to firms making similar products. For instance, other firms should note that FDA in September warned PruTect Rx about promoting supplements as drugs because the Highlands Ranch, Colo., firm was marketing products for treatment of concussions Also see "In Brief" - Pink Sheet, 10 September, 2012..

“There is nothing new under the sun, everything you try to get around the Food and Drug Act has been tried and captured in the past,” Young said.

Manufacturers also will try to introduce ingredients or products into the U.S. market by importing them under different names, which is a fraudulent act under not only FDA regulations but also under U.S. Customs rules.

Consent Decrees Are Last “Dance” For Supplement GMP Violators

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