Wednesday 24 January 2018

Conflict of Interest Undermines Compliance with New FSMA Rules

The new rules issued by the Food and Drug Administration under the Food Safety Modernization Act risk becoming ineffective before ever going into effect. This is because of flaws drafted into both the Foreign Supplier Verification Program proposed rule and the Accreditation of Third Party Auditors proposed rule. The flaws undermine the rules goal of greater compliance by building in conflicts of interest.


FSVP Conflict of Interest in Identifying SAHCODHA

As previously discussed the proposed FSVP presents two options for supplier verification activities for hazards that the foreign supplier will control or that the foreign supplier verifies are being controlled by its raw material or ingredient supplier. Under Option One importers are required to separate hazards for which there is a reasonable probability that exposure to the hazard will result in serious adverse health consequences or death to humans or animals (SAHCODHA) and non-SAHCODHA hazards. SAHCODA hazards require more onerous verification activities, namely the importer must conduct or obtain documentation of onsite auditing of the foreign supplier by a qualified individual.

Option One raises the question of who must identify whether a hazard is SAHCODHA or non-SAHCODHA. The proposed rule largely allows the importer to determine if the foreign supplier has a SACOHDHA hazard that would be subject to on-site auditing. The rule does provide examples of SACOHDHA, such as hazards that would lead to a Class 1 recall. The list, however, is only illustrative introducing flexibility and subjectivity for the importer to identify SACOHDHA hazards. Most importers will want to avoid the damage that arises from serious adverse events – the damage to the brand, the cost of a recall, and the risk of litigation. Still the rule introduces a conflict of interest, which may undermine compliance with the proposed rule. An importer can make the determination to classify a hazard as non-SAHCODHA and avoid the cost and time of an on-site audit.


Third Party Auditors Conflict of Interest in Self-Reporting

The Third Party Accreditation rule lays out the requirements for accreditation bodies seeking recognition by the FDA as well as requirements for third-party auditors seeking accreditation. A third-party auditor can be a foreign government, foreign cooperative, or other third-party. Among the required responsibilities is a notification duty when an auditor discovers a “serious risk to the public health.” From the proposed rule:

“Proposed § 1.656(c) requires an accredited auditor/certification body to immediately notify us when any audit agent or the auditor/certification body itself, discovers during an audit  any condition that could cause or contribute to a serious risk to the public health. Proposed § 1.656(c) requires such notification to include the following: (1) The name and address of the facility where the condition was discovered; (2) the FDA registration number assigned to the facility, where applicable; (3) the name and address of the eligible entity, if different from that of the facility; and (4) the condition that could cause or contribute to a serious risk to the public  health and for which notification is required.”

The notification requirement arises from a statutory provision in§ 808(c)(4) of the Food Drug & Cosmetic Act.

The notification requirement places third-party auditors in difficult situation for a couple of reasons. The proposed rule does not define “serious risk to the public health” leaving it to the auditor to define. In the preamble to the proposed rule the FDA states the “could cause” language borrowed from the Food and Drug Act  points to a broad scope for the notification provision. The Agency does request comment on whether the notification requirement should encompass risks that would result in both Class I (risk that present a reasonable probability of serious adverse health events or death) and Class II (risk which may cause temporary or medically reversible adverse events or the probability of serious adverse health events is remote) recalls. Using only recall classification benchmark offers some objectivity but still places the judgment call in the auditors hands.

The proposed rule also creates a distrust between the facility and the auditor. Currently its the facility’s call whether to notify the FDA of a potential food safety concern through the Reportable Food Registry. The facility is only required to do so in a Class I scenario otherwise, such as in a Class II recall scenario, notification is voluntary. Notification of Class I risks presents a smaller conflict of interest. Auditors notifications could impact the timing or readiness of a facility to report and react to a Class I recall or in a worse case scenario place pressure on a facility dragging its feet. If auditors, however, are required to notify the FDA of Class II risks there is conflict of interest that may lead to distrust. This level of transparency may dissuade food firms from using third-party auditors/certification bodies accredited under the proposed rule. The proposed rule makes not of this conflict of interest, but states it is “duty bound” to implement FSMA. It goes on to argue, “to gain credibility with consumers and address industry views on sensitive information,  this proposed rule seeks to balance disclosure and confidentiality concerns.” In the FDA’s view the rule strikes the right balance.


The proposed rules struggle with providing enough flexibility to be adaptable across a broad industry. As the examples above suggest there are times where the flexibility of the rules may undermine its goal of broad industry compliance with the proposed rule. 

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