FDA user fees for re-inspecting dietary supplement production facilities will change in fiscal 2016, but not the program’s status – the agency will not impose the fees established in the Food Safety Modernization Act.

Without a guidance on requesting fee reductions, FDA will not bill food or supplement firms for re-inspections of facilities found non-compliant with manufacturing regulations or for costs linked to a firm failing to comply with a recall order, also established by FSMA.

User fees for re-inspecting food and supplement product manufacturers are set for fiscal 2016 at $221 per hour for domestic locations and $315 for international sites, according to a July 31 Federal Register notice. The fiscal 2015 rates are $217 and $305. (See more on FDA user fees in this issue, [A#05150810003]).

Imposing those fees probably will remain a comparatively low priority for FDA, much like any fee any federal agency is authorized to collect from small businesses, says Daniel Fabricant, CEO of the Natural Products Association and head of FDA’s dietary supplement enforcement office for three years ending in April 2014.

“I think a lot of this is political,” Fabricant said in an interview. The Obama administration, he added, “is not really pushing hard on user fees” from an industry with as many small businesses as the food and supplement products market.

Small businesses are numerous among the firms that FDA reports are non-compliant with its regulations on conventional food product manufacturing and marketing and its supplement good manufacturing practices. A user fee levied against a small business at the same rate FDA charges larger businesses could force the business to close or into bankruptcy.

“The crux of the issues is until FDA gets its mind around small businesses and what that waiver should entail,” no re-inspection or recall user fees will be levied,” Fabricant said.

“It’s going to be a very different scope” for small business user fees compared to larger businesses, he added.

Firms are required to pay annual facility registration fees created by FSMA, but FDA has kept the user fees on hold since its notice on the rates for the program’s first year – fiscal 2012. A spokesperson said the agency does not have a timetable for publishing the guidance.

Again in fiscal 2016, invoices will not be issued to any firm for re-inspections or recall order fees until the agency publishes a guidance document outlining the process for requesting a reduction in fees.

The notice says “because FDA recognizes that for small businesses the full cost recovery of FDA re-inspection or recall oversight could impose severe economic hardship, FDA intends to consider reducing certain fees for those firms.”

Defining Re-inspections

FDA re-inspects facilities that manufacture, process, pack or hold food or supplements after problems are identified during initial inspections and after agency officials are not convinced a firm is correcting its problems.

The fiscal 2016 notice states that FDA intends to issue guidance to provide additional information about the circumstances under which the agency would consider non-compliance to be materially related to a food safety requirement.

The agency does not consider non-compliance to include problems “of a technical nature and not food safety related,” such as failure to comply with a food standard or incorrect font size on a label. Determining whether non-compliance is materially related to a food safety requirement “may depend on the facts of a particular situation,” according to the notice.

FSMA authorized FDA to order recalls not only after firms refuse to remove products from the market, but also if a recall is not conducted satisfactorily or a firm fails to provide information FDA requests on recalled products.

While FDA has not conducted enforcement on a mandatory recall since FSMA regulations became effective, the agency has returned to many manufacturing facilities for re-inspections after determining that firms were not correcting good manufacturing practices violations.

In 2015, more of those re-inspections are prompting litigation against the targeted firms by the Department of Justice. Most recently, firms initially warned in 2012 about GMP violations agreed to a consent decree and to cease operations after failing to respond to multiple chances FDA offered to become compliant while continuing to make and market their nutritionals Also see "Industry Roundup: SEC Fines MJN, Criminal Charge For Herbals Seller, Decree Closes Aspen Supplement Marketer" - Pink Sheet, 29 July, 2015..

The agency said Aug. 4 a judge in U.S. District Court for the Eastern District of Wisconsin signed an order approving the decree for Atrium Inc., Aspen Group Inc. and Nutri-Pak of Wisconsin Inc.

Rates Up, Guidance Absent: FSMA Re-inspection User Fees On Hold

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