Just How Broke Could Food Manufacturers Be Next Year? FSMA Reinspection Fees for FY 2013 Give Us A Hint
The U.S. Food and Drug Administration recently released its Domestic and Foreign Facility Reinspection, Recall, and Importer Reinspection Fee Rates for FY 2013. Under FSMA FDA has the authority to assess and collect fees to cover reinspection-related costs and costs associated with non-compliance with a food recall order. So just how much are we talking about?
- $221 per hour where domestic travel is required
- $289 per hour where foreign travel required.
That doesn’t sound too bad, right? Think again. Though FDA explains each factor and details the calculations that resulted in the above hourly rates, the industry’s focus should be on the fact that the scope of a company’s liability to FDA for a reinspection is wildly unpredictable. In other words, no one knows how many hours/people/travel FDA is going to bill you for. “Reinspection” involves FDA’s re-examination of a food or facility to determine whether corrective actions have been implemented and compliance has been achieved “to FDA’s satisfaction.” So what exactly might be wrapped up in a “reinspection?”
- Example 1: FDA conducts an inspection of a domestic food facility and finds the food manufacturer in violation of current Good Manufacturing Practices (cGMPs). FDA issues a form 483 listing all of the observations made during the facility inspection. The manufacturer stops production to take the steps necessary to comply with each observation. FDA will bill the manufacturer hourly for the time it takes the FDA official(s) to review the manufacturer’s written response to the 483, to prepare for travel, to travel to and from the facility for reinspection, to conduct the actual reinspection to determine compliance, and to prepare any subsequent reports after reinspection.
- Example 2: FDA inspects a foreign seafood manufacturing facility and issues a warning letter after finding the manufacturer in violation of HACCP. FDA later determines that the foreign manufacturer’s response to its warning letter is inadequate, and places the company on Import Alert 16-120. The foreign manufacturer revises its HACCP plan and files an import alert petition with FDA requesting removal from IA 16-120. In its petition, the foreign manufacturer includes a complete copy of its revised HACCP plan, as well as five days of records showing that the revised HACCP plan has been implemented. Arguably, FDA’s review of the Import Alert petition and attached documents could qualify as a foreign facility “reinspection” (albeit a constructive one). If so, FDA will bill the domestic importer/U.S. agent hourly for its review of the import alert petition, revised HACCP plan, and processing records. If the agency decides to conduct a physical reinspection of the foreign facility, then FDA will also bill the domestic importer/U.S. agent for travel time to the facility, time for reinspection, and time for preparation of any subsequent reports relating to reinspection of the facility.
What might the above scenarios cost? 10 hours of FDA’s time? 100? 1000? Nobody knows. The costs might be $2210, $22,100, or $221,000 accordingly (and that’s for the cheaper domestic rate!).
Not only do importers/U.S. agents have no control over how many FDA officials are used per reinspection, they have no idea of the degree of travel for those Full Time Equivalents (FTE’s), the scope of activities that will qualify as “reinspection,” how long the reinspection procedure will take or whether or not their action-steps will reach “FDA’s satisfaction” level. At $221/$289 per hour, it is imperative that the food industry focus on the one area that they can control—i.e., minimizing the occurrence of FDA reinspections by taking the necessary preliminary steps to ensure that their products are FDA-compliant prior to marketing. With each new FSMA implementation importers and manufacturers must read between the lines and expect the burden of compliance to be stacked upon their backs with increasing frequency (and weight).