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The ABH Nature’s Products Recall—Lessons for Own Label Distributors

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On Jan. 21, 2020, ABH Nature’s Products, Inc., ABH Pharma, Inc., and Stocknutra.com, Inc. (collectively “ABH”) announced an unprecedented recall covering in excess of 1,200 products marketed by more than 800 different own label distributors (OLD—companies that hire a contract manufacturer to produce branded products for them). This action came as a result of an Order of the United States District Court for the Eastern District of New York that required the companies to cease operations and remove all “adulterated” dietary supplements manufactured and sold between January 2013 and November 2019; all lots of every product produced are included in this recall. In total, ABH was directed to recall thousands of product units sold in almost every sector of the supplement industry.

The root of the ABH’s issues first came to light in an October 2012 warning letter citing several current good manufacturing practices (cGMP) and labeling violations. Over the next seven years, a period of time that suggests that there was shared responsibility at U.S. Food and Drug Administration (FDA) for this fiasco; ABH was issued several FDA Form 483s (notice of inspectional observations) noting ongoing failure to correct the GMP (good manufacturing practice) shortcomings as well as, additional compliance problems at the companies.

Finally, on Nov. 21, 2019, the U.S. Department of Justice (DOJ), at the request of the FDA, filed a complaint against ABH and its owners in the U.S. District Court for the Eastern District of New York. According to the complaint, ABH and their owners allegedly manufactured, prepared, labeled, packed, held and distributed dietary supplements under conditions that failed to comply with cGMP. It was the settlement to this agreement that led to the order mandating the unprecedented recall.

This massive supplement recall covering hundreds of different brands produced by a single contract manufacturer should be a wakeup call for every own label distributor that has not fully embraced FDA’s policy that they too share responsibility for compliance with cGMPs.

FDA and OLDs

On April 13, 2012, FDA issued a series of warning letters to dietary supplement marketers working with contract manufacturers to produce their branded finished products. Each of the letters clearly stated the agency’s position that any company that places its name on a product label bears the ultimate responsibility for ensuring that it is properly manufactured and suitable for their customers to consume.

As stated in these letters and every similar warning letter sent to an OLD over the past eight years: To the extent that you contract with other firms to manufacture, package, and/or label product on your behalf that your firm releases for distribution under your firm’s name, your firm has an obligation to know what and how manufacturing, packaging, and/or labeling activities are performed so that you can make decisions related to whether your dietary supplement products conform to established specifications and whether to approve and release the products for distribution.

Although a firm may contract out certain dietary supplement manufacturing, packaging, and/or labeling operations, it cannot contract out its ultimate responsibility to ensure that the dietary supplement it places into commerce (or causes to be placed into commerce) is not adulterated for failure to comply with dietary supplement cGMP requirements. United States v. Dotterweich, 320 U.S. 277, 284 (1943); United States v. Park, 421 U.S. 658, 672 (1975).

It is important for every company to take note that the two Supreme Court cases cited by FDA in these warning letters firmly establish the principle of strict liability for companies and corporate officers, ownership and senior management for violations of the Federal Food, Drug and Cosmetic Act (FDCA), including allowing adulterated food to be placed into interstate commerce. In deciding these cases, the court explained its conclusions by noting that by voluntarily engaging in a business that is regulated under the FDCA, companies and individuals accept a special responsibility for protecting the public health.

OLD GMP Responsibilities

An excellent starting place for OLDs that still do not have a clear picture of what is expected of them in order to comply with their GMP obligations is the FDA published Small Entity Compliance Guide: Current Good Manufacturing Practice in Manufacturing, Packaging, Labeling, or Holding Operations for Dietary Supplements, first issued in December 2010. In discussing the responsibilities of covered entities, the guide notes:

A distributor who contracts with a manufacturer to manufacture a dietary supplement, which the distributor then distributes under its own label, has an obligation to know what and how manufacturing activities are performed so that the distributor can make decisions related to whether the packaged and labeled product conforms to its established specifications and whether to approve and release the product for distribution.

In order to accomplish this objective, every OLD should have a quality system in place ensuring compliance that includes:

• Participation in developing/access to finished product specifications.

• Contract manufacturer qualification program (including on-site inspections).

• Access to, and ability to review, Master Manufacturing Records and Batch Production Records.

• A clear description of Quality Unit Responsibilities.

• Quality Agreements with each contract manufacturer setting out each party’s responsibilities under the GMP regulations. It is very important that these agreements include assignment responsibility for the generation of data to support any expiration or best-by dates that will be placed on the product (Stability Program) as well as, mandating that each party will inform the other regarding FDA inspections and any resulting 483 List of Inspection Observations, Warning Letters or other type of agency communication as well as, the responses thereto.

• Protocols for handling of product complaints, including adverse event reports

• Documentation of every change to internal GMPs and the reasons for any such change in a Change Control Document. GMPs are not expected to be, nor are they supposed to be, static.

After the ABH Recall

The underlying rational for FDA’s concept of shared responsibility for compliance is most easily understood in the context of the plight of companies caught up in the ABH fiasco.

First, however, the industry and the public deserve an explanation from FDA as to how this situation could be allowed to fester for over seven years before the agency finally commenced legal action against ABH to force it to follow the GMP regulations. Allowing any regulated entity to operate out of compliance for this length of time is inexplicable. It is a disservice to the public that expects the products it consumes to be produced in accordance with the law, to be safe, to do what they promise to do and to contain exactly what they purport to contain. It is also a disservice to the larger part of industry that has put great effort and expense into implementing cGMPs to ensure that it produces high quality, beneficial products for consumers.

While there is little that industry can do about this apparent lack of vigilance by its regulator, there are three important steps that a wholehearted embrace of cGMPs by OLDs can take to minimize the risk of a repeat.

1. OLDs should have the master manufacturing records for their product(s), the batch production records, the records of what tests were performed on ingredients and when. To put it simply, an OLD should have the ability to review and easy access to the full suite of documents required to demonstrate GMP compliance.

2. OLDs must properly qualify every manufacturer they work with. Proper qualification does not just stop with a carefully crafted written questionnaire; it should be followed by an on-site inspection conducted by a qualified employee or consultant.

3. OLDs must insist that their contract manufacturers use a detailed, well thought out quality agreement. This essentially serves as a roadmap of cGMP responsibilities and a reminder that both the contract manufacturer and OLD share responsibility for ensuring that every supplement is made under a fulsome quality program.

4. OLDs should also monitor the FDA warning letters published every Tuesday morning on the agency’s website to ensure that there has not been something going on at their manufacturer partners that they should have been made aware of. Any OLD that does not have detailed knowledge of its manufacturers’ relevant interactions with FDA risks damage to its business.

Most critically, in the ABH situation, many OLDs caught up in the recall had not conducted on-site audits at the company’s facilities, instead relying only on responses to written questionnaires. Given the nature of ABH’s ongoing GMP failures and the length of time they existed, on-site audits could very well have provided a vigilant OLD an alert to the trouble coming down the road. Persistent follow-up by an OLD that was aware of the 2012 warning letter could have revealed the deficiencies in ABH’s responses well before the court-ordered recall and follow-up by OLDs with quality agreements requiring access to all FDA inspection related documents could have provided yet another red-flag warning that trouble was coming and the opportunity to avoid it.

Rather than viewing GMP obligations as a burden, OLDs should see them as an opportunity to tighten up their supply chain and ensure that they are providing their consumers with quality products. As FDA correctly notes: if your name is on the product label, you are the one telling consumers that it is safe and effective for their use. Rather than having to explain to customers why their products were listed on the ABH recall, and OLD fully embracing this approach would have had an excellent chance to avoid this entire mess. NIE

Marc S. Ullman represents clients in matters relating to all aspects of 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 marc.ullman@rivkin.com.

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