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NAD Weighs in on Facebook Promotions and “Likes”

POSTED November 28, 2011 | by Cynthia Meyer | IN advertising

Last month, the National Advertising Division (NAD) of the Council of Better Business Bureaus addressed two increasingly relevant issues in the emerging area of social media advertising in a case of first impression for NAD. In Coastal Contacts, Inc., NAD Case #5387 (10/25/11), NAD discussed Coastal Contacts, Inc.’s “like-gated” Facebook promotion and the use of the number of Facebook “likes” or “fans” in promotional and investor communications. (A “like-gated” promotion is a fairly new advertising tool in which consumers must first “like” a company’s Facebook fan page in order to access the savings or deal presented in the advertisement. Once a consumer “likes” a company’s Facebook fan page, that consumer is considered a “fan” of the company.)

In its decision, NAD applied FTC’s Dot Com Disclosures Guidance and NAD case precedent that “free” claims must clearly and conspicuously disclose, at the outset of the offer, the material terms and conditions of the offer in close conjunction with the free merchandise claim. Providing these material terms and conditions only after a consumer has entered a promotion is not sufficient. As applied to “like-gated” Facebook promotions, NAD seems to indicate that any material terms and conditions, such as limitations on the availability of the promotion and additional fees for shipping, handling, and product upgrades, should be provided before a consumer “likes” the company page.

More significantly, NAD offered factors for a company to consider when using promotions to entice consumers to engage with it through social media and in promoting its social media presence. In its decision, NAD cautioned that a negative ruling could result in a case where a company obtained “likes” in a misleading manner or where consumers who participated in a “like-gated” promotion could not or did not receive the benefit of that promotion. NAD specifically offered the examples of requiring employees to “like” a company Facebook page without informing consumers that they work for the company and paying a service to inflate the number of a company’s “likes” as misleading and artificial means of obtaining “likes.” Thus, advertisements aimed at enticing consumers to “like” a company’s Facebook page should follow established FTC advertising guidance. This should apply to advertisements on all forms of social media (e.g., advertisements or offers encouraging consumers to follow a company’s Twitter feed or “retweet” a company’s “tweets”).

NAD determined that the display of Facebook “likes” on a company’s Facebook fan page could mean many things to consumers and that the overall message conveyed by “likes” is one of general social endorsement. It also recognized the value of the number of a company’s “likes” and “fans” as a “measure of a company’s social presence which, in turn, speaks to the company’s ability to engage consumers, enhance loyalty to the brand, broaden [its] customer base and of course, increase sales.” Coastal Contacts at p.16. Because claims regarding the number of a company’s “likes” or “fans” made in press releases appearing on an advertiser’s website constitute a form of advertising, such claims should not be misleading. NAD recommended that, “[i]n order to avoid conveying the unsupported claim that Coastal’s U.S. Facebook page alone has obtained ‘500,000’ or ‘one million’ Facebook fans,…the advertiser [should] clarify that such numbers are based on the total number of ‘fans’ or ‘likes’ the Company has received from all of its Facebook pages globally.” Id. at p. 20. Accordingly, companies should be vigilant not only about the manner in which they encourage consumers to “like” their Facebook pages but also about the manner in which they promote their social media presence.

This recent case underscores the general recognition of social media platforms as advertising media and the need for companies to adhere to established regulatory requirements in using these platforms to advertise their products. Competing companies, as well as the FTC and FDA, are increasingly scrutinizing advertising on these platforms. Companies should continually monitor their social media promotions and presence to ensure that they are not making unsupported or misleading claims. The interactive nature of social media and the rapid development of these platforms will likely continue to present new issues in regulation; companies should aim to keep abreast of these developments and monitor the responses of the regulatory agencies to provide guidance for their current and future promotions.

Tobacco Conference

POSTED November 4, 2011 | by Stacy L. Ehrlich | IN Tobacco

Tobacco Regulation and Litigation Conference
December 5, 2011
The Westin Georgetown
Washington, DC

Stacy L. Ehrlich is speaking at The Food and Drug Law Institute’s one-day conference focusing on significant regulatory actions and major litigation involving tobacco-related products. The program will bring together government, industry and public interest experts in the field to discuss issues involving the scientific basis for regulation with a focus on modified risk products, top state and federal cases, global impact of tobacco control regulation, and stakeholder engagement with FDA. This is a must-attend conference for anyone wanting to stay current on the latest cases and regulatory actions involving tobacco-related products. Learn more.

Link: http://fdli.org/conf/tobacco/index.html

New Insights from FDA on Facebook and Twitter Postings

POSTED September 30, 2011 | by admin | IN Drug

This blog was authored by Anne V. Maher

Earlier this week, the FDA published a Warning Letter that provides some much needed insight into the agency’s views on companies’ use of “social media” to promote regulated products. On August 19, the FDA issued the letter, available here, to a Miami dietary supplement company, For Earth, Inc. The letter cited the company for making numerous unapproved drug claims and unauthorized health claims for its MiGenetics line of products. The claims appeared on the company’s website, included both direct and testimonial claims, and represented that various products could prevent, mitigate, treat or reduce the risk of various diseases such as sickle cell anemia, cancer, heart disease, high blood pressure, diabetes and breast cancer, among others.

The FDA’s letter also objected to two “therapeutic claims,” one on the company’s Twitter account and one on its Facebook account. In particular, the letter cited the postings “Is Graviola the answer to fighting cancer? It could be a big part of it” and “Brown Seaweed has a reputation in assisting with the defeat of cancer.” More importantly, the FDA cited two separate postings on the company’s Facebook page, both of which appear to be spontaneous testimonials from a MiGenetics customer with no disclosed relationship to the company. One of the postings read, “The right ingredients (supplements) have kept me from death due to cancer. MiGenetics has helped repair the damage from chemo and made my body come back to healthy. Blood sugar elevated grossly from chemo is now below 110 thanks to MiGenetics. Get healthy and live longer. Get MiGenetics.” The FDA’s Warning Letter also notes that the Facebook page included a link to the company’s website where its products.

By including these consumer testimonial claims, this Warning Letter signals the FDA’s view that companies are responsible for all content on their Facebook pages and not only for company-generated content. As demonstrated here, the FDA will hold a company responsible even for postings made by third parties who are expressing their personal, unsolicited opinions about their experiences with the company’s products. Thus, if a company invites consumers to post comments on its webpage or Facebook page, it is important to realize that the FDA views those postings as the company’s promotional claims for its product. After all, companies have control over and can easily remove postings from their Facebook pages (and in fact routinely do so when postings conflict with their corporate image, for example, by containing ethnic slurs or obscenities).

The MiGenetics website and Facebook page contained numerous explicit disease claims. It is therefore unclear whether the FDA would have issued the letter based upon the Facebook postings alone. Nonetheless, it would serve a company well to monitor consumer postings on its Facebook page (or any social media site over which it has control) and consider removing any statements that FDA would consider violative if made by the company itself. Some companies may understandably find this task overly burdensome and decide instead to prohibit consumer comments on their Facebook pages. But others who want to fully leverage the buzz that social media has to offer will continue to invite and encourage consumer feedback. Keep in mind that, to the FDA and other Federal regulatory agencies, company and product ”social media” pages are simply another advertising venue, which agencies may treat no differently than conventional company or product websites. When the FDA “inspects” a website, it does so just as marketers want consumers to do – by going through the company website, and then to its Facebook page, Twitter link and the like, all of which are conveniently linked from the website’s homepage for easy access.

When Can Extrapolation Be Used to Support Advertising Claims?

POSTED September 30, 2011 | by Daniel R. Dwyer | IN Cosmetics, Drug

Advertising claims that are subject primarily to the jurisdiction of the FTC (for foods, dietary supplements, OTC drugs, cosmetics and non-restricted medical devices) need to be substantiated by a “reasonable basis,” that is, objective evidence that supports the claim. Certain types of claims need to meet an even higher standard. These include:

“Establishment claims,” which are claims that suggest that they are established or supported by a particular level of evidence. These need to be supported by the level of evidence suggested (for example, a claim that says “clinical studies show …” needs to be supported by adequate clinical studies).

Health or safety claims, which typically must be supported by “competent and reliable scientific evidence.” This consists of tests, studies or other scientific evidence that has been evaluated by qualified experts, using methods that such experts accept as being scientifically sound.

Testing to support advertising claims can be expensive and time-consuming to conduct. As a result, advertisers may question whether they really need to conduct a new test to support a claim if they have some old testing that might potentially do the job. From a legal perspective, it is permissible to extrapolate the results of old testing to cover a new advertising claim if it is scientifically valid to do so.

There are no simple rules for determining when extrapolation is scientifically valid. Rather, each situation needs to be evaluated on its own merits. However, decisions by the FTC and the National Advertising Division of the Council of Better Business Bureaus (NAD, the advertising industry’s self regulatory program) provide some helpful guidelines. The following are a few guidelines (though this is not a complete list):

1. In general, claims about a product need to be substantiated by studies conducted on that product.

In one case, an advertiser claimed that its cosmetic product reduced under-eye puffiness. It offered as support data from studies of certain ingredients in the product – it did not have any studies of the product itself. The NAD disagreed that this was adequate substantiation for the claim. It explained that “… an advertiser … may not extrapolate testing results on a particular ingredient contained in its product to substantiate performance claims for its product when … it contains other ingredients that could impact upon product performance.” Skin Doctors, NAD Case 4627 (2/07).

A key problem with ingredient studies is that they do not take into consideration that a combination of ingredients may have effects different than those of the ingredients alone. For example, when evaluating claims for a product that were supported by testing on a “complex” of ingredients, the NAD rejected such testing because it did not evaluate the finished product as a whole. The NAD said that the complex “referenced in the challenged advertisements consists of a combination of ingredients … and these studies did not test the actual product or the complex found in the [finished] products … [t]hus, while useful in showing one amino peptide’s effect on anti-aging parameters, these studies, standing alone, are insufficient to support the strong performance claim relating to the [finished] … product that contains the … complex.” P&G, NAD Case 4266 (1/05).

Thus, as the NAD has said, “… results of testing on a single ingredient (whether the same or similar to the one used in the advertised product) are not sufficient to support performance claims for a product containing that ingredient, absent reliable scientific evidence demonstrating how that ingredient will perform in combination with other ingredients in the advertised product.” IQ Cosmetics, NAD Case 4666 (5/07).

However, the corollary to this guideline is …

2. Studies of ingredients may support limited claims about ingredients.

In the Skin Doctors case discussed above, the NAD said, “… However, the evidence might support more limited claims that ‘an ingredient in the product and not the product … itself [may] … potentially reduce under eye puffiness.’” The key word here is “limited.” Such claims must be carefully qualified so that they don’t imply something about the finished product that the data cannot support.

At the same time, studies of ingredients don’t necessarily need to be on the exact ingredients in the product, so long as it is scientifically valid to extrapolate from the ingredients studied. For example, the NAD has said that “studies using a naturally derived ingredient can support claims about a synthetic ingredient where there is evidence to show that the two are chemically identical.” Bayer Healthcare, NAD Case 5330 (5/11).

3. Quantified claims require reliable substantiation that is specific to the advertised product.

The NAD has said that “quantified claims of product performance require a level of substantiation that is very specific to the advertised product’s precise formulation, application and measurable performance.” P&G, NAD Case 4266 (1/05). For example, in a case involving a claim that a cosmetic product reduced dark under-eye circles “up to 45%,” the NAD said that this claim could not be supported by a combination of clinical studies on the key ingredients in the product and consumer studies on the product as a whole. The NAD reviewed the various effectiveness levels referred to in the clinical studies but ultimately concluded that “… none of these numbers correlates to testing on the advertised product; thus the evidence falls short of the type required to support quantified claims.” IQ Cosmetics, NAD Case 4666 (5/07).

This approach is consistent with FTC cases. For example, in a consent order with Kellogg over claims that a breakfast of Frosted Mini-Wheats cereal was clinically shown to improve children’s attentiveness by nearly 20 percent, the FTC disagreed that this specific claim was adequately substantiated. The FTC said that it “alleged that in the study referred to in Kellogg’s advertising, only about half the kids who ate Frosted Mini-Wheats for breakfast showed any improvement in attentiveness, and only about one in nine improved by 20 percent or more.” FTC, “‘Cereal’ Violations” (http://business.ftc.gov/documents/cereal-violations) (accessed Sept. 24, 2011).

4. Claims need to be supported by studies that reflect the demographics of the intended consumers.

Even the best clinical study can fail to support an advertising claim if the subjects in the study are not relevant to the population of prospective users of the product. For example, in a case involving a dietary supplement claimed to support bone health, the claim was supported by studies conducted with post-menopausal women. The NAD said that data on this sample cannot be extrapolated to support claims directed to pre-menopausal women. Bayer Healthcare, NAD Case 5330 (5/11).

Similarly, the NAD has found that claims about probiotic effects supported by clinical studies involving patients with diseases are not supported when those claims are directed to healthy consumers. Even though the extrapolation of probiotic data from diseased patients to healthy subjects was accepted in a speech by an official of the European Food Safety Authority, the NAD rejected such extrapolation because there was no evidence of a scientific consensus on whether it was acceptable. Heartland Sweeteners, NAD Case 5203 (8/10).

Conclusion

As the above guidelines suggest, there are risks when trying to extrapolate data from studies that do not use the advertised product and/or its intended consumers. However, if there is scientific evidence that such extrapolation is appropriate, it can be supportable. For example, a test of a single ingredient, together with other tests showing that the combination of this ingredient with the other substances in the finished product will not alter the performance of the ingredient, might provide adequate substantiation for a claim about the finished product. Such evidence should be evaluated by qualified experts to ensure that it represents sound science and is consistent with available scientific data.

Exculpatory Language in Informed Consent Forms

POSTED September 20, 2011 | by Stacy L. Ehrlich | IN Biologics, Devices, Drug

On September 7, 2011, FDA and the HHS Office for Human Research Protections (OHRP) released a Draft Guidance entitled, Guidance on Exculpatory Language in Informed Consent (Draft Guidance). Consistent with this Draft Guidance, sponsors of clinical trials may now include language in informed consent forms explaining that subjects are “donating” their blood, tissue or urine samples (biospecimens), a term that had previously been discouraged because of concern that it implied a release of sponsors from liability. The Draft Guidance also confirms the agencies’ position that informed consent forms should not contain other kinds of exculpatory language regarding research-related injury.

Both agencies’ regulations provide, “No informed consent, whether oral or written, may include any exculpatory language through which the subject or the representative is made to waive or appear to waive any of the subject’s legal rights, or releases or appears to release the investigator, the sponsor, the institution, or its agents from liability for negligence.” 45 CFR 46.116; 21 CFR 50.20. The Draft Guidance clarifies that impermissible language would involve a waiver, release or the appearance of a waiver or release, while also having “the general effect of freeing or appearing to free an individual or an entity from malpractice, negligence, blame, fault or guilt.” Draft Guidance at 2.

In the past, the two agencies prohibited language on “donation” of biospecimens in informed consent forms. For example, in FDA’s January 1998 guidance, Information Sheet – Guidance for Institutional Review Boards and Clinical Investigators (Q.52), the agency stated, “. . . [T]he word ‘donation’ implies abandonment of rights to the ‘property.’ 21 CFR 50.20 prohibits requiring subjects to waive or appear to waive any rights as a condition for participation in the study.” Nevertheless, the Draft Guidance notes that it has long been common practice for investigators and sponsors not to compensate research subjects who agree to provide biospecimens for research purposes, even if those biospecimens are later used for commercial purposes. Draft Guidance at 2. The agency also acknowledges that it is not aware of any federal or state laws or policies that suggest that research subjects would have any legal right to such compensation if they voluntarily signed an informed consent form clearly stating that they would not be paid or otherwise compensated for providing their biospecimens. Id. Thus, upon being finalized, the Draft Guidance will supersede the 1998 FDA document and permit the term “donation” if it is used in the informed consent form to clearly inform subjects that they will not receive any financial compensation, at the time of the procedure or in the future, for the use of their biospecimens. See id. at 1, 2-3.

The Draft Guidance continues to make clear, however, that it is unacceptable to ask a subject to waive his or her right to be compensated for injuries arising from participation in the research. The Draft Guidance provides the following examples of such unacceptably exculpatory language:

“I waive any possibility of compensation, including any right to sue, for injuries that I may receive as a result of participation in this research.”
“If you suffer a research-related injury, neither the institution nor the investigator can assume financial responsibility or liability for the expenses of treatment for such injury.”
“In the event that you suffer a research-related injury, your medical expenses will be your responsibility or that of your third-party payer.”

Id. at 4.

Nevertheless, the agencies note that an informed consent form could say something along the lines of, “Because of hospital policy, the hospital is not able to offer financial compensation should you be injured as a result of participating in this research,” so long as it also states, “However, you are not precluded from seeking to collect compensation for injury related to malpractice, fault, or blame on the part of those involved in the research, including the hospital.” Id. at 3. The informed consent form could alternatively state, “In the event that you suffer a research-related injury, your medical expenses will be your responsibility or that of your third-party payer, although you are not precluded from seeking to collect compensation for injury related to malpractice, fault, or blame on the part of those involved in the research.” Id. at 4. The Draft Guidance makes clear that these are only two examples of potential ways of explaining that a subject’s legal right to seek compensation for certain research-related injuries is not being waived; other language that similarly conveys this concept could also be acceptable to the agencies. See id. at 3.

FDA Issues Revised Unapproved Drugs Guide; NO New Unapproved Products Allowed(?)

POSTED September 19, 2011 | by admin | IN Drug

By: Peter R. Mathers

On September 19, 2011, FDA released a revised version of its Compliance Policy Guide 440.100 – Marketed Unapproved Drugs (“CPG”). The new revision states there will be no exercise of enforcement discretion for new unapproved drug products. Hereafter, any unapproved drug product first marketed after September 19, 2011, will be subject to immediate regulatory action (such as Warning Letters, seizures, injunction actions, etc.), even if the new product is a copy of an unapproved drug product that was first marketed prior to the cut-off date. Unapproved drug products first marketed prior to September 19, 2011 may continue to be marketed subject to the deferred enforcement action policies and grace periods described in the original 2006 version of the CPG.

Under the earlier version of the CPG, new unapproved drug products that were identical or closely similar to existing unapproved products were treated the same as the original products. This approach prevented previously marketed unapproved products from, in effect, achieving “grandfathered” status and, as a consequence, protection from competition from new market entrants. The revised CPG appears to create just such protection – potentially creating significant new value for existing unapproved products.

In an accompanying Federal Register notice scheduled for publication on September 20, 2011, FDA explains that newly-introduced unapproved drug products are considered a unique burden on the agency as it attempts to sort through the status of existing categories of unapproved drugs. FDA also explains that it provided no advance notice of this dramatic change in policy because such notice would have tipped off industry to the impending change and potentially induced a rush to market of new versions of unapproved drug products before the new deadline. However, the notice does not suggest that FDA considered how the new revision would profoundly change the competitive structure of the market for unapproved products.

The notice also does not address whether the agency changed this policy to allow FDA to expedite resolution of the status of existing unapproved drug products which are believed by their manufacturers and distributors to be exempt from pre-market approval requirements, medically necessary, and responsibly manufactured and sold. In addition, the new CPG and notice leave unresolved whether the threat of immediate enforcement action for new unapproved drug products extends to new OTC products, DESI-pending products or prescription prenatal vitamin products, all of which appear to have heretofore been considered outside of the scope of the CPG. Finally, as with other “grandfather”-type provisions, this new policy raises questions about what changes in product formulation, manufacturing or labeling improvements, if any, will cause a product to lose its status and face immediate enforcement.

The FDA notice invites comments on the revised CPG, but there is no deadline for submission and no deadline for FDA to consider such comments, while the revision is effective immediately.

The revised CPG can be downloaded here: http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM070290.pdf

The pre-publication Federal Register notice is available, for now, here: http://www.ofr.gov/OFRUpload/OFRData/2011-24316_PI.pdf

Navigating the Facebook Minefield: Recent Policy Changes Affect FDA-Regulated Firms

POSTED September 14, 2011 | by Stacy L. Ehrlich | IN Drug

This blog post was co-authored by Stacy L. Ehrlich and James William Woodlee

Facebook recently announced two policy changes that will impact marketers of dietary supplements and prescription drugs.

Following an August 23, 2011, revision to its advertising guidelines, Facebook now permits dietary supplement advertisements so long as they do not promote “products containing anabolic steroids, chitosan, comfrey, dehydroepiandrosterne, ephedra, human growth hormones, melatonin, and any additional products deemed unsafe or questionable by Facebook in its sole discretion.” Facebook previously permitted companies to establish Facebook pages for dietary supplement products, but did not permit them to buy ads directed to Facebook users’ pages. Now dietary supplement marketers can target advertising based on Facebook users’ data in order to reach the most relevant audience.

Safety appears to be a reasonable concern for supplements containing some of the ingredients listed in Facebook’s policy, for example, steroids, ephedra, and human growth hormone. However, the social networking giant may have included some of the other ingredients listed in the ban based on previous enforcement action by government agencies targeting these ingredients rather than the safety (or “questionable” nature) of dietary supplement products that contain them. For instance, FDA recently issued a warning letter regarding a melatonin-containing product called “Lazy Larry” (formerly “Lazy Cakes”) asserting that melatonin is an unapproved food additive that may not be used in conventional foods such as cake or brownies. Melatonin-containing dietary supplements, however, are widely marketed and have not been the subject of recent FDA safety concerns. Similarly, both FDA and FTC have taken enforcement action against chitosan-containing supplements, not based on safety concerns, but rather based on extravagant “fat-blocking” claims made for the ingredient. See, e.g., Warning Letter to Vitaminlab (2004); FTC Settlement with Pinnacle Marketing, LLC and VisionTel Communications, LLC (2004).

For dietary supplement products that do not contain the ingredients listed by Facebook, this is an exciting new marketing avenue. Companies that choose this dynamic advertising platform for their dietary supplement products should, however, actively monitor their Facebook pages as the ads drive new traffic to them. In the wake of this policy change, it is likely that FDA, FTC, and competitors will closely review posted comments for drug/disease claims and/or claims for which marketers may lack adequate substantiation.

In another recent turn of events, on August 15, 2011, Facebook changed its previous policy of permitting pharmaceutical companies to request special permission to block posts on their walls (“whitelisting”) for pages directed toward specific patient populations or conditions for which the companies offer treatment. Now companies can whitelist only their specific prescription product pages but cannot whitelist more general population/condition pages or OTC product pages. As a result, it appears that a number of drug companies removed such pages from Facebook based on a fear of inappropriate posts that they could not screen but for which they could potentially be held accountable.

Fears about screening user posts likely stem from the uncertainty surrounding the extent to which FDA will hold companies accountable for such content. In general, the agency has offered little to assist firms in creating and implementing policies and procedures for maintaining an FDA-compliant Facebook presence. Despite holding its first public meeting on Internet advertising and promotion of medical products back in October 1996 and another in 2009, FDA has yet to issue any guidance addressing specific forms of online promotion or social media. Indeed, the CDER Guidance Agenda for 2010 included “Promotion of Prescription Drug Products Using Social Media Tools,” but this entry was noticeably absent from the 2011 Guidance Agenda. Thus, for the foreseeable future, FDA-regulated firms will have to continue navigating the Facebook minefield without the benefit of specific agency guidance.

Four KKB Partners Included in The Best Lawyers in America® for 2012

POSTED September 7, 2011 | by Scott M. Lassman | IN Uncategorized

Kleinfeld, Kaplan, and Becker, LLP is pleased to announce that four of its attorneys recently were selected by their peers for inclusion in The Best Lawyers in America® 2012 (Copyright 2011 by Woodward/White, Inc., of Aiken, S.C.).

The selected attorneys are Thomas Henteleff (FDA Law), Anthony Young (FDA Law), Anne Maher (Advertising Law), and Scott Lassman (Administrative/Regulatory Law). Although KKB believes that all of its attorneys are worthy of such recognition, we nevertheless are pleased that four of the firm’s 10 partners have been selected for inclusion in 2012.

Since its inception in 1983, Best Lawyers has become universally regarded as the definitive guide to legal excellence. Because Best Lawyers is based on an exhaustive peer-review survey in which more than 41,000 leading attorneys cast almost 3.9 million votes on the legal abilities of other lawyers in their practice areas, and because lawyers are not required or allowed to pay a fee to be listed, inclusion in Best Lawyers is considered a singular honor. Corporate Counsel magazine has called Best Lawyers “the most respected referral list of attorneys in practice.”

Tobacco Establishment Inspections on the Horizon; Questions Abound

POSTED August 30, 2011 | by James William Woodlee | IN Tobacco

In a recent letter to registered tobacco establishments, FDA announced that the agency will begin facility inspections on October 1, 2011. While providing regulated industry with a nearly six-week head start to prepare, the brief missive offers few details on what inspections might entail. The agency wrote the following on their scope:

“FDA has not yet established good manufacturing practice regulations for tobacco products. However, the inspections that will begin on October 1, 2011[,] will determine your company’s compliance with the provisions of the law and implementing regulations that are currently in effect. These include, but are not limited to, establishment registration and product listing, ingredient listing; packaging, labeling, and advertising requirements; and marketing authorization for new and modified risk tobacco products.”

Based on the foregoing, the extent to which this first wave of inspections will include evaluation of manufacturing processes or product quality remains unclear. FDA’s tobacco establishment inspection authority generally extends to “all things therein (including records, files, papers, processes, controls, and facilities) bearing on” compliance with the Federal Food, Drug, and Cosmetic Act (“FFDCA”). See Section 704(a)(1) of the FFDCA. Thus, even in the absence of GMP regulations, FDA may still determine a tobacco product to be adulterated due to contamination by “any added poisonous or added deleterious substance that may render the product injurious to health” or because the product “has been prepared, packed, or held under insanitary conditions whereby it may have been contaminated with filth, or whereby it may have been rendered injurious to health.” See Section 902 of the FFDCA; see also Section 704(b) of the FFDCA. To date, FDA has not explained how it might apply these standards in evaluating a product recognized as inherently injurious to health.

The announcement also raises questions about the future of the agency’s “Site Tours Program.” As described in an April Federal Register notice, FDA designed the program “to provide its scientific and regulatory staff the opportunity to gain a better understanding of the tobacco industry and its operations.” When FDA asked for volunteers to host site tours, the agency received 16 invitations to visit industry facilities.

FDA has not issued any additional information about the Site Tours Program, and it is not clear whether FDA has conducted or will conduct any educational site tours before official inspections begin. During the first wave of official inspections, the agency’s inspector corps could use the knowledge FDA intended to gain from the program. Regardless, both the regulator and regulated industry will likely learn much from each other beginning October 1.

The Problem of Paying for Food Safey

POSTED July 22, 2011 | by Daniel R. Dwyer | IN Food

The FDA Food Safety Modernization Act (FSMA), enacted in January 2011, includes many new required tasks for the federal government (mainly FDA) and for the food industry. In 2010, the Congressional Budget Office (CBO) estimated that federal outlays to support this law would need to be about $1.4 billion between 2011 and 2015. The CBO didn’t estimate total costs to the food industry but it seems safe to say that these will be enormous.

At this point, it is unclear whether any of these new federal costs will be funded. The House of Representatives has proposed to cut FDA’s budget by 10 percent rather than increasing it. FDA has said, “Without additional funding, FDA will be challenged in implementing the legislation fully without compromising other key functions.” The word “challenged” may be an understatement.

Representative Jack Kingston (R-GA), a key figure in the budget debate, has been quoted as saying that increases are unnecessary because the food supply is “99.9 percent safe.” Mark Bittman, writing in the New York Times, retorts “I guess he wasn’t one of the 16 percent [of Americans] last year who fell ill [from foodborne illness].” It remains to be seen who will win the budget battle.

The food industry, however, doesn’t have the ability to “just say no” to the increased costs associated with the FSMA. Nervous about these costs, a broad group of industry members has written to FDA to urge the agency to implement the FSMA in a way that carefully evaluates alternative regulatory approaches so that the benefits to be gained justify the costs. The group urges, for example, that guidance and rules should be developed using a scientifically sound, risk-based approach, and that FDA should adopt the least burdensome and most flexible regulatory approach. According to the group, this approach is mandated by Executive Order 13563 (January 18, 2011) and the Regulatory Flexibility Act (5 USC 601 et seq).

This letter suggests that, if FDA does not take a “hard look” at regulatory costs and alternatives, and then make a convincing case that it has chosen the least burdensome approach, it could face challenges to its implementation of the FSMA. Such challenges might take the form of a legal complaint, a public relations campaign, or concerns expressed by legislators. (We don’t know if the food industry would really raise such challenges but perhaps they might be inspired to do so by their medical device colleagues. The medical device industry has been effective at pressing for “least burdensome” regulation.)

Some industry sectors have gone even further, expressing an intent to request exemptions from FSMA requirements in order to prevent increased costs. For example, the American Bakers Association has said that it would file a petition with FDA asking it to exempt certain storage facilities for packaged foods from FSMA preventive controls requirements.

Other commentators have provided suggestions on how industry’s cost burden might be reduced. For example, one blogger has urged Congress to adopt an incentive system to encourage industry to adopt food traceability systems and defray some of the costs – similar to the government’s incentives for the adoption of electronic medical records. This is a thoughtful idea and such an investment might actually reduce long-term costs associated with unsafe foods (though we have not seen any hard analysis of this). However, given that budget cutting seems to be the passion of the moment, it is difficult to imagine Congress being willing to do this.

If FDA’s budget is cut, it is difficult to know how much FDA will be able to accomplish within its existing food programs. It is possible that FDA might divert some resources from other food safety activities (e.g., reviewing GRAS notifications) to the implementation of the FSMA.

However, even if FDA’s implementation of FSMA slows to a crawl, industry’s costs will continue to increase. The key FSMA provisions relating to preventive controls and the foreign supplier verification program take effect by July 2012 and January 2013, respectively. Although FDA may decline to enforce these provisions beginning on these dates if it decides that regulations will be delayed and the programs cannot be implemented without regulations, industry will still need to implement the law in anticipation of the eventual effective dates.