CPSC Enforcement Action Against Michaels Highlights Importance of Proper Reporting

By Elliot Belilos

The U.S. Consumer Product Safety Commission (CPSC) recently filed an action in federal court against Michaels Stores, Inc., seeking civil penalties for allegedly untimely reporting injuries from a vase sold in the stores and, notably, for allegedly falsely reporting the incidents as a retailer rather than as the manufacturer of the product.  According to the Complaint, Michaels misrepresented to the Agency the company’s role in the distribution chain, allowing another company, The Gerson Company (“Gerson”) to report as the manufacturer even though Michaels was the importer of record (and, as a result, the statutory “manufacturer”).

CSPC asserts that Michaels engaged Gerson to contract to have the vase made overseas exclusively for Michaels, but that Michaels was the importer of record, a fact that CPSC alleges Michaels withheld from the Agency in its 15(b) report.  CPSC asserts that Michaels purposefully withheld that information so that Gerson would be the recalling entity, and that the recall would have been more successful had the more well known Michaels been the recalling entity.

This case bears watching as it moves forward.  Certainly companies that are importers of record for products manufactured overseas need to understand that they are deemed to be the manufacturer of those products under the Consumer Product Safety Act (CPSA), and that any report to the CPSC should properly reflect their role in the distribution chain.

Elliot Belilos represents companies on consumer product safety compliance issues, including reporting obligations to the CPSC and corrective actions, up to and including recalls.  Elliot can be reached at ebelilos@ofwlaw.com.

FSIS Poised to Take Action in Response to Increase of Recalls Due to Undeclared Allergens and the Failure to Present Imported Products for Re-inspection

By Brett T. Schwemer

The Food Safety and Inspection Service (FSIS) recently posted on its website a Summary of Recall Cases in Calendar Year 2014.  Comparing this summary with the summaries from 2013 and 2012, a few things immediately stand out.  On a positive side, meat and poultry product recalls for pathogens (Shiga toxin-producing E. coli, Listeria monocytogenes, and Salmonella) and other contaminants collectively decreased in 2014 from years 2012 and 2013.  However, on the negative side, there was a significant increase in recalls in 2014 for undeclared allergens and recalls classified as “other,” which upon closer examination, appear to be largely related to the failure of importers to present imported meat and poultry products to FSIS for re-inspection at the point of entry (otherwise known as a “Failure to Present” (FTP)).  With these trends continuing into 2015, establishments should expect FSIS to respond aggressively.

Undeclared Allergen Recalls

Recalls for undeclared allergens rose from 25 in 2013 to 43 in 2014, a whopping 72 percent increase.  Seven of the recalls in 2014, which occurred at the very end of the year, can be attributed to meat and poultry establishments purchasing cumin that were unknowingly contaminated with peanut protein.  However, the rest appear to be situations where meat or poultry processors failed to properly identify and control incoming ingredients, failed to prevent cross-contamination during processing or failed to ensure that finished products were properly packaged and/or labeled. In short, these recalls were largely preventable.

FSIS has grown frustrated with the continued increase in recalls due to undeclared allergens and has vowed to take action.  Last month, the agency advised the industry that it will be soon be issuing new instructions to inspection program personnel on how to verify that meat and poultry products are correctly labeled.  The new instructions will purportedly contain additional inspection tasks related to label and formula reviews, and provide guidance on what can result in an undeclared allergen in product and what procedures can be adopted in an allergen control plan.  Obviously, if undeclared allergens are found and product has entered commerce, the agency will request a recall.

In anticipation of these new instructions, establishments would be well advised to reassess their current allergen control programs and other procedures to ensure that meat and poultry products are properly labeled with all ingredients listed.  This reassessment should be conducted in light of the FSIS “Compliance Guidelines for Allergens and Ingredients of Public Health Concern: Identification, Prevention and Control and Declaration Through Labeling.”  These guidelines contain certain “best practices” identified by the agency for ensuring that hazards associated with ingredients of public health concern are properly identified, that they are prevented and/or controlled, and that all ingredients are properly declared on product labels.  In addition to these guidelines, establishments should also consider guidance provided by the Food Allergy Research and Resource Program of the University of Nebraska regarding how to develop effective allergen control programs.  Finally, our firm has posted a series of blogs entitled “Steps to Prevent Allergen Recalls – Practice Tips.”

Establishments should also anticipate that, with an increase in inspection tasks related to label review, there will be a heightened risk that inspection personnel will take regulatory control actions for perceived labeling deficiencies that do not arise to a public health concern.  Given that a substantial amount of labels are generically approved these days, many establishments may not be able to point to an FSIS approved label to convince inspection personnel not to take action.  To that extent, it would behoove establishments to get to know officials from the FSIS Labeling and Program Delivery Staff and maintain emergency contact information for these officials in the event that a labeling dispute arises with inspection personnel or there is a need for an emergency temporary label approval.

FTP Recalls

As noted above, 2014 also experienced a dramatic increase in FTP recalls – 6 in 2014 compared to 1 each in 2012 and 2013.  Just two months into 2015, there have already been 7 FTP recalls.

Similar to the recalls for undeclared allergens, it is our understanding that most of the FTP recalls were avoidable.  Pursuant to FSIS regulations, after Customs and Border Protection (CBP) verifies that imported meat and poultry product meets CBP and Animal and Plant Health Inspection Service requirements and releases the shipment, the importer of record is required to have the product presented to FSIS for re-inspection at an official FSIS import inspection establishment.  Unfortunately, in many of the recalls, the importer of record (or broker) failed to ensure that the product was delivered to an official FSIS import inspection establishment for re-inspection or the import inspection establishment inadvertently released the shipment in commerce without the requirement being met.

The increase in FTP recalls, however, is not solely attributable to an increase in mistakes by importers, brokers and import inspection establishments.  Beginning about 7 months ago, FSIS began increasing verification of its import requirements by reviewing data in its Public Health Inspection System (PHIS) twice a week to identify potential FTPs. This increased verification directly correlates to the increase in recalls.

In response, FSIS has indicated that it will continue to, and potentially increase, its review of PHIS data in 2015 to detect FTPs.  If a FTP is detected and product has already entered commerce (i.e., off-loaded at a location other than the official import inspection establishment or other approved located designated on the import inspection application), the agency will likely require the importer of record to conduct a Class I recall of any associated product.   The agency can also withdraw inspection services at the official import inspection establishment until the establishment can provide additional measures to ensure imported product is re-inspected.  Finally, the agency may request CBP to issue a Notice of Redelivery to the importer of record, broker and/or official import establishment demanding that the uninspected product be returned to the custody of CBP. If product is not redelivered to CBP, CBP can initiate action to assess penalties and liquidated damages (additional information regarding FTPs and the actions that FSIS will take in response can be found in the agency’s Prior Notification and Failure to Present: Compliance Guideline for Importing Meat, Poultry and Egg Products to the United States).

Given the increase in verification activities relating to FSIS import requirements and the consequences for failing to meet these requirements, importers of record, brokers and official import inspection establishments would be well advised to work together to implement a system of controls designed to ensure that all imported meat and poultry products are re-inspected at the point of entry.  This should include measures to ensure that the importer of record or designated agent applies for inspection of imported product as far as possible in advance of the anticipated arrival of each consignment, but no later than when entry is filed with CBP, in accordance with FSIS’ prior notification requirement.  It should also include improved means of communication between the respective parties regarding when amenable meat and poultry products may be in a shipment of product and thus require inspection.  Finally, official import inspection establishments should consider implementing more stringent procedures for identifying and controlling imported meat and poultry product that are to be held pending FSIS re-inspection, such as the implementation of new inventory control systems designed to prevent meat and poultry product from being “released” from inventory until re-inspection is complete.  Additional recommendations for adopting an effective hold or retention program can also be found here.

Following the basic recommendations above should go along way towards reducing the number of recalls for undeclared allergens and FTPs each year.  However, if the industry ignores these recommendations and such recalls continue to rise, the industry should fully expect the agency to take additional measures to control what they view as a purely preventable situation.

How to Legally Import and Market Pharmaceuticals in the U.S. and Canada

A Webinar Presented by OFW Law and Davis, LLP

October 15, 2014, 1:00 p.m. EST

During this webinar, the second of four which OFW Law and Davis LLP are teaming up to present, attendees will learn about the regulatory requirements necessary to successfully and legally import and market pharmaceuticals in the U.S. and Canada. Topics will include, among others:

  • Requirements for drug importation into the U.S. and Canada
  • Pharmaceutical market approval pathways in both countries
  • Pharmaceutical manufacturing controls in both countries
  • Pricing of brand and generic pharmaceuticals in Canada
  • Labeling and promotional requirements and restrictions for drugs in the U.S. and Canada
  • Post-market requirements in both countries including recordkeeping and adverse event reporting in the U.S.
  • Inspections and enforcement

The webinar will be approximately 40 minutes long with a Q and A session at the end. There is no cost to attend this webinar, but space is limited.

To register for the webinar, please visit www.cvent.com/d/14qf66.

To view or share this information as a PDF, please click here.

About the presenters:

Tish Pahl is a principal at the Washington, D.C.-based firm OFW Law where she has been practicing as a member of the firm’s Pharmaceutical Practice Group for nearly 20 years. In this capacity, she has counseled clients on the lawful marketing of their drugs, cosmetics, and dietary supplements under the Federal Food, Drug, and Cosmetic Act.  She has particular expertise in health care communications, advertising, labeling, and commercial distribution of products regulated by the U.S. Food and Drug Administration (FDA).  Tish frequently provides strategic advice to healthcare entrepreneurs and inventors on pathways into the U.S. market.  She has been a frequent speaker on numerous topics, including drug regulation, advertising and labeling compliance.

Sara Zborovski is a partner in Davis LLP’s Toronto office and is a member of firm’s Life Sciences and Intellectual Property Groups. Sara assists companies in navigating the regulatory landscape imposed by the Food and Drugs Act and its related regulations. She advocates before all branches of Health Canada on behalf of the pharmaceutical and biotech industries. Sara works with clients to get products from idea to market, providing advice on approval and marketing strategies and intellectual property issues. Sara has particular experience navigating Canada’s Patented Medicines (Notice of Compliance) Regulations (the equivalent of Hatch-Waxman litigation in the U.S.) and with the Federal Court review of regulatory decisions.  She also works with clients in matters relating to product safety, including Health Canada inspections and enforcement, crisis management and product recalls.

How to Legally Import and Market Medical Devices in the U.S. and Canada

A Webinar Presented by OFW Law and Davis, LLP

October 1, 2014, 1:00 p.m. EST

During this webinar, the first of four which OFW Law and Davis LLP are teaming up to present, attendees will learn about the regulatory requirements necessary to successfully and legally import and market a medical device in the U.S. and Canada. Topics will include, among others:

  • Device classification schemes in the U.S. and Canada
  • Marketing authorization mechanisms in Canada and the U.S.
  • Manufacturing controls in both countries
  • Canadian and U.S. labeling and promotional requirements and restrictions
  • Reporting of adverse events in both countries
  • Recordkeeping and reporting requirements imposed by both countries

The webinar will be approximately 40 minutes long with a Q and A session at the end. There is no cost to attend this webinar, but space is limited.

To register for the webinar, please visit www.cvent.com/d/14qf66.

To view or share this information as a PDF, please click here.

About the presenters:

Neil O’Flaherty is a principal at OFW Law, a Washington, D.C.-based law firm, where he has been practicing as a member of the firm’s Medical Device Practice Group for more than 23 years. Neil advises clients from around the world on a wide range of matters relating to the U.S. Food and Drug Administration’s (FDA) regulation of medical devices. Of particular relevance, Neil assists clients with labeling and promotional issues, the development of strategies to bring medical devices to market, pre-submission advocacy, adverse event reporting compliance and other postmarket requirements, and preparation of necessary regulatory filings.

Sara Zborovski is a partner in Davis LLP’s Toronto office and is a member of firm’s Life Sciences and Intellectual Property Groups. Sara assists companies in navigating the regulatory landscape imposed by Canada’s Food and Drugs Act, its related regulations, and their intersection with intellectual property issues. She advocates before all branches of Health Canada on behalf of the medical device, pharmaceutical, biotech, food and beverage, natural health product, and cosmetic industries. Sara works with clients to get products from idea to market while providing advice on approval and marketing strategies.

Webinar Series: Regulatory Requirements for the Import of Medical Products and Foods Into the U.S. and Canada

Announcing OFW Law and Davis LLP’s New Four-Part Webinar Series:

REGULATORY REQUIREMENTS FOR THE IMPORT OF MEDICAL PRODUCTS AND FOODS INTO THE U.S. AND CANADA

OFW Law and Davis LLP have joined together to present a new webinar series to provide attendees with an overview of laws with which a firm must comply when importing medical products and foods into the U.S and Canada.  The webinars will include the following topics:

  1. How to Legally Import and Market Medical Devices in the U.S. and Canada

October 1, 2013, 1:00 p.m. EST

  1. How to Legally Import and Market Pharmaceuticals in the U.S. and Canada

October 15, 2014, 1:00 p.m. EST

  1. How to Legally Import and Market Foods and Beverages in the U.S. and Canada

October 29, 2014, 1:00 p.m. EST

  1. Medical Devices, Pharmaceuticals and Food Products as Consumer Products — Additional U.S. and Canadian Regulatory Considerations

November 12, 2014, 1:00 p.m. EST

Each webinar will be approximately 40 minutes long with a Q and A session at the end.  There is no cost to attend the webinars, but space is limited.

To register for one or more of the webinars, please visit http://www.cvent.com/d/14qf66.

To view or share this information as a PDF, please click here

Webinar presenters are attorneys of OFW Law and Davis, LLP.

ofw logoWith over 400 years of combined legal experience and more than 30 attorneys and Senior Policy Advisors, OFW Law uses its background in government, medicine, and industry to create innovative solutions for clients in the food, pharmaceutical, medical device, and agricultural industries. OFW Law represents clients from around the world in FDA, USDA, and health care matters before federal agencies, courts, and the U.S. Congress.

Davis LLP logoDavis, LLP is a full service law firm that provides advice and efficient service in over 50 practice areas, including Life Sciences, Food & Beverage, Regulatory & Administrative Law, and Health Law.  Davis LLP works with clients to get products from idea to market, providing strategic advice on approval and marketing, and managing global product portfolios.

How to Legally Import and Market Pharmaceuticals in the U.S. and Canada

A Webinar Presented by OFW Law and Davis, LLP

October 15, 2014, 1:00 p.m. EST

During this webinar, the first of four which OFW Law and Davis LLP are teaming up to present, attendees will learn about the regulatory requirements necessary to successfully and legally import and market pharmaceuticals in the U.S. and Canada. Topics will include, among others:

  • Requirements for drug importation into the U.S. and Canada
  • Pharmaceutical market approval pathways in both countries
  • Pharmaceutical manufacturing controls in both countries
  • Pricing of brand and generic pharmaceuticals in Canada
  • Labeling and promotional requirements and restrictions for drugs in the U.S. and Canada
  • Post-market requirements in both countries including recordkeeping and adverse event reporting in the U.S.
  • Inspections and enforcement

The webinar will be approximately 40 minutes long with a Q and A session at the end. There is no cost to attend this webinar, but space is limited.

To register for the webinar, please visit www.cvent.com/d/14qf66.

To view or share this information as a PDF, please click here.

About the presenters:

Tish Pahl is a principal at the Washington, D.C.-based firm OFW Law where she has been practicing as a member of the firm’s Pharmaceutical Practice Group for nearly 20 years. In this capacity, she has counseled clients on the lawful marketing of their drugs, cosmetics, and dietary supplements under the Federal Food, Drug, and Cosmetic Act.  She has particular expertise in health care communications, advertising, labeling, and commercial distribution of products regulated by the U.S. Food and Drug Administration (FDA).  Tish frequently provides strategic advice to healthcare entrepreneurs and inventors on pathways into the U.S. market.  She has been a frequent speaker on numerous topics, including drug regulation, advertising and labeling compliance.

Sara Zborovski is a partner in Davis LLP’s Toronto office and is a member of firm’s Life Sciences and Intellectual Property Groups. Sara assists companies in navigating the regulatory landscape imposed by the Food and Drugs Act and its related regulations. She advocates before all branches of Health Canada on behalf of the pharmaceutical and biotech industries. Sara works with clients to get products from idea to market, providing advice on approval and marketing strategies and intellectual property issues. Sara has particular experience navigating Canada’s Patented Medicines (Notice of Compliance) Regulations (the equivalent of Hatch-Waxman litigation in the U.S.) and with the Federal Court review of regulatory decisions.  She also works with clients in matters relating to product safety, including Health Canada inspections and enforcement, crisis management and product recalls.

How to Legally Import and Market Medical Devices in the U.S. and Canada

A Webinar Presented by OFW Law and Davis, LLP

October 1, 2014, 1:00 p.m. EST

During this webinar, the first of four which OFW Law and Davis LLP are teaming up to present, attendees will learn about the regulatory requirements necessary to successfully and legally import and market a medical device in the U.S. and Canada. Topics will include, among others:

  • Device classification schemes in the U.S. and Canada
  • Marketing authorization mechanisms in Canada and the U.S.
  • Manufacturing controls in both countries
  • Canadian and U.S. labeling and promotional requirements and restrictions
  • Reporting of adverse events in both countries
  • Recordkeeping and reporting requirements imposed by both countries

The webinar will be approximately 40 minutes long with a Q and A session at the end. There is no cost to attend this webinar, but space is limited.

To register for the webinar, please visit www.cvent.com/d/14qf66.

To view or share this information as a PDF, please click here.

About the presenters:

Neil O’Flaherty is a principal at OFW Law, a Washington, D.C.-based law firm, where he has been practicing as a member of the firm’s Medical Device Practice Group for more than 23 years. Neil advises clients from around the world on a wide range of matters relating to the U.S. Food and Drug Administration’s (FDA) regulation of medical devices. Of particular relevance, Neil assists clients with labeling and promotional issues, the development of strategies to bring medical devices to market, pre-submission advocacy, adverse event reporting compliance and other postmarket requirements, and preparation of necessary regulatory filings.

Sara Zborovski is a partner in Davis LLP’s Toronto office and is a member of firm’s Life Sciences and Intellectual Property Groups. Sara assists companies in navigating the regulatory landscape imposed by Canada’s Food and Drugs Act, its related regulations, and their intersection with intellectual property issues. She advocates before all branches of Health Canada on behalf of the medical device, pharmaceutical, biotech, food and beverage, natural health product, and cosmetic industries. Sara works with clients to get products from idea to market while providing advice on approval and marketing strategies.

Webinar Series: Regulatory Requirements for the Import of Medical Products and Foods Into the U.S. and Canada 1

Announcing OFW Law and Davis LLP’s New Four-Part Webinar Series:

REGULATORY REQUIREMENTS FOR THE IMPORT OF MEDICAL PRODUCTS AND FOODS INTO THE U.S. AND CANADA

OFW Law and Davis LLP have joined together to present a new webinar series to provide attendees with an overview of laws with which a firm must comply when importing medical products and foods into the U.S and Canada.  The webinars will include the following topics:

  1. How to Legally Import and Market Medical Devices in the U.S. and Canada

October 1, 2013, 1:00 p.m. EST

  1. How to Legally Import and Market Pharmaceuticals in the U.S. and Canada

October 15, 2014, 1:00 p.m. EST

  1. How to Legally Import and Market Foods and Beverages in the U.S. and Canada

October 29, 2014, 1:00 p.m. EST

  1. Medical Devices, Pharmaceuticals and Food Products as Consumer Products — Additional U.S. and Canadian Regulatory Considerations

November 12, 2014, 1:00 p.m. EST

Each webinar will be approximately 40 minutes long with a Q and A session at the end.  There is no cost to attend the webinars, but space is limited.

To register for one or more of the webinars, please visit http://www.cvent.com/d/14qf66.

To view or share this information as a PDF, please click here

Webinar presenters are attorneys of OFW Law and Davis, LLP.

ofw logoWith over 400 years of combined legal experience and more than 30 attorneys and Senior Policy Advisors, OFW Law uses its background in government, medicine, and industry to create innovative solutions for clients in the food, pharmaceutical, medical device, and agricultural industries. OFW Law represents clients from around the world in FDA, USDA, and health care matters before federal agencies, courts, and the U.S. Congress.

Davis LLP logoDavis, LLP is a full service law firm that provides advice and efficient service in over 50 practice areas, including Life Sciences, Food & Beverage, Regulatory & Administrative Law, and Health Law.  Davis LLP works with clients to get products from idea to market, providing strategic advice on approval and marketing, and managing global product portfolios.