A product recall can be one of the most traumatic events in any company’s history. Recalls involve contacting customers and perhaps even the public at large and telling them that something has gone wrong with your product(s), that they need to stop using/eating the effected product, and that it needs to be returned to you or destroyed. The potential negative ramifications of such an event can include loss of consumer confidence, damaged customer relations, legal and regulatory entanglements, and other unpredictable consequences. In some cases, these impacts can go on for years, soaking up valuable company resources and goodwill as if they were going into a black hole.

This is obviously a very frightening scenario. Fortunately, while it may be impossible to prevent your company from ever having to conduct a product recall, it is possible to take steps to minimize the impact of such an event on your business and to handle the situation in a manner that allows you to get back to devoting your resources to normal business operations. The key, unsurprisingly, is preparation. While it is not possible to go into intricate details of handling a recall in a column like this, our objective is to give you an overview of what you should be thinking about and doing to prepare for a recall situation.

What is A Product Recall?

FDA (U.S. Food and Drug Administration) states that “Food recalls are removals of foods from the market that are in violation of the FDA’s regulations. FDA regulates all foods [including dietary supplements] except meat, poultry, and processed egg products, which are regulated by the U.S. Department of Agriculture (USDA).” www.fda.gov/media/159667/download?attachment Products that are recalled are generally considered subject to legal action such as seizure if action to remove them from the market are not promptly undertaken. Most recalls are voluntarily initiated by the brand owner, though there are instances where other entities in the chain of distribution might also initiate their own recall, and FDA has the authority to order recalls under certain circumstances. Recalls are conducted with the knowledge and guidance of FDA.

Companies frequently ask if they can use a “market withdrawal” which is generally “a firm’s removal or correction of a distributed product which involves a minor violation that would not be subject to legal action by the FDA or which involves no violation, e.g., normal stock rotation practices, routine equipment adjustments and repairs, etc.” In other words, situations where there is no regulatory violation. Utilizing a “market withdrawal” as a vehicle to avoid a formal recall is generally viewed with great disfavor by FDA and could create a situation where a company faces a variety of legal and regulatory issues it would not otherwise confront.

Product Recall Classifications

In the first instance it is incumbent upon the company initiating a recall to determine whether it is necessary to alert consumers of potential problems with a product that should result in its removal from the market. In certain cases, recalls to the consumer level may not be necessary and alerting retailers to remove products from their shelves (physical or virtual) or simply telling distributors to return products to you might suffice. It is important to be aware that while the company makes the first call on this question, it is subject to FDA review, and it is not uncommon for the agency to tell a company to extend a recall to the consumer level.

There are three classes of recalls. From the most to least serious these are:

Class I recall: a situation in which there is a reasonable probability that the use of or exposure to a violative product will cause serious adverse health consequences or death.

Class II recall: a situation in which use of or exposure to a violative product may cause temporary or medically reversible adverse health consequences or where the probability of serious adverse health consequences is remote.

Class III recall: a situation in which use of or exposure to a violative product is not likely to cause adverse health consequences.

A Class I recall will always be to the consumer level. This is generally accomplished through the publication of a press release and potentially sending mail and/or email directly to the consumer when their identity is known. These recalls may also include the posting of signage at retail locations. The presence of an undeclared major allergen in a dietary supplement or a food is one of the most common reasons for Class I recalls as the consequences of an anaphylactic reaction can be dire.

A Class II recall will generally be at least to the retailer level due to the possibility of adverse health consequences that would generally pass with some medical intervention, but would not be likely to be serious in nature. These recalls generally involve the issuance of a press release but may not require direct consumer contact. Examples include: the use of FD&C #5 yellow dye not listed on the label or pieces of plastic in bottles of multivitamins.

A Class III recall may be limited only to distributors and frequently does not require the publication of a press release. Direct mailings to distributors will generally suffice. Examples include: a minor container defect such as a cap not closing properly or lack of English labeling in supplement labels that are supposed to be bilingual.

FDA Regulations

While the FDA website can at times be painful to navigate, it contains a wealth of valuable information on a company’s obligations under the law and guidance on the agency’s interpretation of the law and its implementing regulations. This includes a variety of regulations pertinent to the handling of recalls including:

21 CFR Part 7 Subpart C: Recalls (Including Product Corrections)—Guidance on Policy, Procedures, and Industry Responsibilities www.ecfr.gov/current/title-21/chapter-I/subchapter-A/part-7/subpart-C.

21 CFR Part 117.139 Recall Plans for Human Foods, which requires companies to have a written recall plan as part of their good manufacturing practices www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfcfr/CFRSearch.cfm?fr=117.139.

21 CFR Part 507.37 Recall Plans for Animal Foods, which requires companies selling animal food (not animal feed) to also have a written recall plan. www.govinfo.gov/app/details/CFR-2022-title21-vol6/CFR-2022-title21-vol6-sec507-38.

21 CFR Part 107 Subpart E Recall Plans for Infant Formula. It is important to note that there are many regulations directed specifically at infant formula, which is a very distinct product from toddler food. www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfcfr/CFRSearch.cfm?CFRPart=107.

Each of these regulations requires companies to have detailed, written recall plans that assign specific tasks to specific employees. In most cases, the obligation to ensure that these plans are created and that they are carried out as intended falls within the ambit of the company’s quality department. As a practical matter, given the significance of initiating a recall, important decisions on these matters are usually made in conjunction with senior management.

A general overview of these regulations and FDA’s expectations for regulated industry can be found at www.fda.gov/medical-devices/postmarket-requirements-devices/recalls-corrections-and-removals-devices#3. Among other things, this document provides the basic elements of what FDA considers an effective recall letter:

• Be brief and to the point;

• Identify clearly the product, size, lot number(s), code(s) or serial number(s) and any other pertinent descriptive information to enable accurate and immediate identification of the product;

• Explain concisely the reason for the recall and the hazard involved, if any;

• Provide specific instructions on what should be done with respect to the recalled products; and

• Provide a ready means for the recipient to report to the recalling firm whether it has any of the product, e.g., by sending a postage-paid, self-addressed postcard or by allowing the recipient to place a collect call to the recalling firm.

Minimizing the Pain of a Recall

Dealing with a recall can be most effectively accomplished by adopting the simple acronym “PRO”—Be Proactive, Responsive and Organized. The basic elements of these three keys are briefly described as:

Proactive, Preventive and Protective (of your customers and your business): Utilize the data generated by your GMP (good manufacturing practice) trend analysis as it might provide you an early warning of a situation that could require a recall. Make sure that you have a written recall plan and identify your recall team. Make sure your employees understand and practice the plan by conducting at least one mock recall annually. Everyone involved in the recall should clearly understand their responsibilities.

Responsive, Rapid and Removal (of effected product from the market): Be prepared to conduct an investigation at the first sign that a recall might become necessary. Ensure that reporting is made both to all relevant company employees and managers as well as to FDA when necessary. Be ready to communicate with your customers and suppliers if necessary and act as soon as practicable to remove effected product(s) from the market.

Organized, Orderly Outcome that will reassure your customers and the market in general. This can be accomplished through the development of clear, concise standard operating procedures that provide the roadmap for your recall team, the testing of your recall strategy and your recall plan to ensure that what you are doing is effective. As you go through this process, remember that the most effective plans are ones that are regularly tested and updated as areas are discovered where there is room for improvement.

Conclusion

Don’t be scared, be prepared. Handle a product recall like a PRO. NIE

Editor’s note: This article is based on a presentation by Marc Ullman and Heather Fairman on Oct. 25, 2023, at SupplySide West.

Attorney Marc S. Ullman represents clients in matters relating to all aspects of U.S. Food and Drug Administration and Drug Enforcement Administration matters, regulatory issues, Federal Trade Commission proceedings and litigation. He practiced with one of New York’s leading white collar criminal defense firms for 10 years, where he represented clients in both federal and state prosecutions, as well as numerous related civil matters and other litigations. He can be reached at [email protected]. Heather Fairman is CEO of Guardian Consulting, Inc., providing a wide range of consulting services to the dietary supplement, food and cosmetic industries.