Thursday 29 June 2017

Chobani Recall; How the FDA Could be Left in the Dark

The U.S. Food and Drug Administration (FDA) said on last week it is investigating Greek yogurt maker Chobani’s handling of a mold problem with its yogurt products. The announcement comes after the company asked some retailers last week to remove yogurt cups from store shelves. Shortly after the FDA issues its statement Chobani announced a voluntary recall. This is another example where the FDA appears to learn of product issues from consumers and the media, and not the the facility itself. It raises an interesting question about how food regulators could be left in the dark. It’s important to note from the beginning avoiding interaction with the FDA about product issues invites serious risks. The FDA Guidance clearly prefers an announced recall to ensure public awareness of a potential product issue.  The Agency typically seeks publicity about a recall only when it believes the public needs to be alerted to a serious hazard. The Agency uses a three tiered classification for recalls based on the risk of the hazard.

Class I: Dangerous or defective products that predictably could cause serious health problems or death. Class II: Products that might cause a temporary health problem, or pose only a slight threat of a serious nature. Class III: Products that are unlikely to cause any adverse health reaction, but that violate FDA labeling or manufacturing laws.

Class I recalls are mandatory, while class II are voluntary. Prior to the Food Safety Modernization Act (FSMA) in truth all recalls were voluntary. In order to compel a recall the FDA would need a court order. With the change in legislation the FDA can now mandate a recall if necessary. Whether or not the hazard in Chobani’s yogurt warranted a Class I or II risk was a decision for the company to make, but one that should have been made in coordination with the FDA. “It’s about being as transparent as possible,” says Catherine McDermott, public affairs manager in the Division of Federal-State Relations in FDA’s Office of Regulatory Affairs. “If we feel there is that much of a health risk, we will offer media updates every day to give new information, and all that we know gets posted to FDA’s Web site.” Transparency with the FDA may result in announcing a recall that a firm would prefer to keep quiet, but it also offers an opportunity to advocate for other options, like a market withdrawal or production correction. Options which avoid publicity while still protecting consumers. It also preserves regulatory capital with the regional office where a firm is based. Perhaps, more importantly it helps stave off potential enforcement actions, such as a warning letter, for failing to properly manage a recall.

The dynamic of announcing recalls is changing under the Food Safety Modernization Act. FSMA not only provides the FDA authority to mandate a recall it encumbers third-party auditors with an obligation to alert the Agency of serious product issues. Mandatory recalls, which carry enforcement consequences under FSMA like a high risk facility designation, can be avoided if a facility acts within a grace period. This is why to date the FDA has not exercised its new authority. Delays now can only last so long, which raises the question of why delay at all.

Involving regulators at an early stage serves to build trust with the FDA and consumers. When a firm fields product complaints it needs to ensure there is a clear chain of command to review the complaints and determine the earliest stage possible to gain FDA feedback. Delaying a decision to announce or worse not cooperating with the FDA needlessly risks the brand’s reputation with consumers and regulators.

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