More on FSMA and Food Safety Risk Avoidance
Thank you to Parker Smith & Feek for inviting me to speak to about FSMA and how it’s changing the status quo. My slide-deck can be viewed here.
Following my talk, Marty Bask from Parker Smith & Feek led a very interesting discussion about the pros and cons of product recall and contamination coverage. A link to our recent discussion on this blog on what to ask when purchasing this kind of coverage is here.
Coffee Brewers and Servers Sued Under Prop 65
As we foreshadowed with our blog regarding 60 day notices, the Committee for Education and Research on Toxics (CERT) filed a Proposition 65 enforcement action alleging that ready-to-brew coffee exposes coffee drinkers to acrylamide (a chemical known to the state of California to cause cancer). CERT v. Brad Berry Co., Ltd., No. BC461182 (Cal. Sup. Ct., Los Angeles County, filed on May 9, 2011). Included as defendants are a number of high profile coffee roasters and retailers.
According to the suit, a single 12 oz. cup of coffee "contains anywhere from four to 100 times the No Significant Risk Level for acrylamide established by California's Office of Environmental Health Hazard Assessment." We look forward to seeing how this case plays out.
UK Foot-and-mouth Disease Study: Impacts for the Future, Not the Past
A May 6 study in Science with the banal title of “Relationship Between Clinical Signs and Transmission of an Infectious Disease and the Implications for Control,” written by a number of scientists at the Institute for Animal Health in Surrey and the Centre for Immunity, Infection and Evolution at the University of Edinburgh, has garnered a lot of publicity. The study involved foot-and-mouth disease, a worldwide scourge for cattle which had had its most virulent outbreak in a developed country in the United Kingdom in 2001.
What is revolutionary about the study may be surprising to non-scientists. What the scientists did with cattle was to study the interaction between infected animals and healthy ones in order to learn exactly when the infected animals were actually transmitting the disease. You may well think, "don't we know this already? Was I coughing into my elbow for no reason at all?" The answer is, we didn't know it at this level of detail, and when fashioning quarantines of people or animals, or mandatory culls of animals, knowing it at this level of detail can save lives and money. As Mark Woolhouse, one of the scientists who co-authored the study, said as quoted in Science Daily,
If you do things like measure virus in the blood, you're taking no account of the clinical state of the animal. People might imagine that the clinical signs of a virus -- the symptoms, such as sneezing -- have something to do with its transmission. But, while there has been a lot of thoughtful speculation on the topic, there haven't been many actual studies.
As a result of the study, for these animals and with this one disease, they estimated that the actual period of transmission was much shorter than had been previously thought, and not necessarily related to the animal showing the outward signs of the disease.
In reading this, I was reminded of a statement in Simon Winchester’s Atlantic, where he points out how much more we know about the surface of the moon than the undersea part of the surface of the earth. The same can be said for the way microorganisms operate in the environment as close as your nose or a cut on your skin. Although it is obviously a different thing to study foot-and-mouth disease for cows, who are unwitting subjects, than, say, influenza on humans, these techniques may be applicable in some ways to study a whole range of diseases, which can refine the public health reaction to a host of outbreaks. The study suggests that if diagnostic tools can be found to pinpoint the moment of contagion, quarantine can be more effective and possibly both shorter and involving fewer subjects, and more destructive means of prevention like culling may be avoided. To quote further from Woolhouse's interview with Science Daily:
We now know that there is a window where, if affected cattle are detected and removed from the herd promptly, there may be no need for pre-emptive culling in the immediate area of an infected farm. We have an opportunity now to develop new test systems which can detect infected animals earlier and reduce the spread of the disease.
This is a two-edged sword, and potentially both edges can be used for good. If we can develop tools to find contagious subjects more exactly, we can take effective steps to quarantine them for just the right period of time. And we would be able to rule out non-contagious subjects that are currently impacted out of an abundance of caution.
Which brings us back to the past. Now that we know what we know, what of the thousands of British cows slaughtered in 2001, including those at farms where the cows showed no symptoms but were located next to the outbreaks? The study certainly suggests that this was unnecessary. But before any British cattle farmers consider calling in a solicitor, however, they need to understand a couple of things. First, public health officials have historically always been given a lot of leeway in terms of making decisions to promote the general welfare. When the cows are showing signs of disease, no one has the time to do a ten-month study; you do what you can right then. Second, and most germane, liability, if any, would be based on the state of knowledge at the time of the incident. It could hardly be treated any other way. This both acknowledges the state of (or lack of) knowledge and encourages the advance of scientific learning. If you try one solution and it seems like it could be improved, you’re less likely to improve it if you might end up being liable for how your first attempt worked out.
The FDA's Reportable Food Registry: Four Burning Questions
I authored the following article that appeared in the April 29, 2011 issue of Food Chemical News:
As the clock ticks on the FDA’s 24-hour deadline to report to the FDA’s Reportable Food Registry, a food retailer, manufacturer or supplier is forced to make snap decisions that can profoundly impact business and litigation.
Once a report is submitted, the FDA promptly alerts customers and suppliers of the "reasonable probability" that the product will result in "adverse health consequences or death." Even if a recall has not yet been issued, an RFR report often has the consequences of a Class I recall. While RFR reports can be amended or withdrawn based on new information, in the world of food products, the bell almost never can be unrung, food companies are now painfully aware.
But some burning questions regarding FDA’s RFR remain for the food industry, including if and how the agency will:
(1) use the RFR as an enforcement tool;
(2) move toward the concept of "control" and away from "possession" in interpreting one of the key exceptions to the RFR;
(3) address what it perceives as "out of control" undeclared allergen problems; and
(4) use the information obtained through the RFR to shape coming regulations on required preventive controls.
Let’s take a stab at answering some of these questions and a few others.
Will FDA Use RFR as an Enforcement Tool?
The RFR was created by Congress as part of the Food and Drug Administration Amendments Act of 2007 and is codified at 21 U.S.C. §350f. The RFR requires that "as soon as practicable, but in no case later than 24 hours after a responsible party determines that an article of food is a reportable food, the responsible party shall [] (A) submit a report to [FDA] ... and (B) investigate the cause of the adulteration if the adulteration of the article of food may have originated with the responsible party." 21 U.S.C. §350f(d)(1).
The reporting includes a "one step up and one step back" requirement. Food companies must identify their suppliers and customers to FDA through the web portal.
The FDA Food Safety Modernization Act (FSMA) tweaks the RFR and requires the FDA to promulgate new regulations requiring submission of "consumer-orientated information," including a description, product ID codes, contact information and anything else FDA deems necessary to enable consumers to accurately identify whether they are in possession of the reportable food.
The congressional intent behind the RFR is to provide the FDA with a mechanism to track patterns of adulterated product, essentially as an information gathering tool. Many in the industry fear that the FDA also will use the RFR as an enforcement tool. Even an unintentional failure to report in compliance with 21 U.S.C. §350f constitutes a criminal violation of the Food, Drug, and Cosmetic Act (FD&C Act).
It’s not clear if the FDA has initiated any enforcement action based on the RFR yet, but this should be monitored closely by the food industry.
Can You Take Advantage of Intra-Company Transfer Exception to Reporting Obligation?
21 U.S.C. § 350f(d)(2) provides an exception to the reporting obligation if:
The challenge with interpreting this exception centers on the term "transfer." The FDA's current draft guidance says: "A transfer to another person occurs when the responsible person releases the food to another person. 'Person' is defined in section 201(e) of the FD&C Act as including individuals, partnerships, corporations and associations. FDA does not consider an intra-company transfer in a vertically integrated company to be a 'transfer to another person,' where the company maintains continuous possession of the article of food."
The rub is that if the product is shipped to a third-party warehouse, but the responsible party maintains ownership and direct control over distribution, the product is reportable. The FDA’s draft guidance rationalizes that "'[p]erson is defined in section 201(e) of the FD&C Act (21 U.S.C. 321(e)) as including individuals, partnerships, corporations, and associations," and a "warehouse operator is a distinct legal person."
Another scenario under the 21 U.S.C. § 350f(d)(2) exception that is not addressed by the FDA's draft guidance arises if the product is subject to an intra-company transfer but the company uses a common carrier to transport the product. Under the FDA's rationale that use of a third-party warehouse takes a company out of the exception, a common carrier also could be considered a "distinct legal person" to which the product is transferred, eliminating the exception and requiring the company to report.
Many believe that the FDA (and the statute) could not intend that an otherwise unreportable food under 21 U.S.C. §350f(d)(2) become reportable for no reason other than that a company uses a third-party trucking company in an intra-company transfer. Many also question whether the FDA's current position on third-party warehouses is correct if the food company retains complete control over the product.
Neither of these policies reflects the reality of how many food companies operate. From a food safety policy perspective, many believe that food companies should not be forced into the business of trucking and warehousing.
Some believe that the FDA might be moving away from interpreting "transfer" through the lens of possession and broadening its view toward an interpretation based on issues of control. Control might reflect more accurately the reality of food production and promote more effectively food safety and the intent of the RFR. Whether the FDA will move toward a notion of control should be revealed in the FDA's expected amendments to its draft guidance and should be monitored closely by the industry.
In January 2011, the FDA issued its first annual report on the RFR, which provides statistics on the first full year of the RFR (2,240 entries, 229 "primary reports," a breakdown by hazards, etc.) (see FCN Jan. 28, Page 8). Beyond the statistics, companies should take particular note of the FDA’s focus on both allergen controls and creation of food safety plans.
The FDA reported that undeclared allergens/intolerances accounted for 34.9% of its primary reports. Industry experts assert that the FDA believes that the industry does not have good control over the issue of undeclared allergens. These experts believe that the FDA will give special attention to this issue in promulgating regulations under the FSMA's requirements for hazard analysis and preventive controls. In anticipation, manufacturers should consider now how they can change manufacturing processes to address the undeclared allergen issue.
Do You Have A Food Safety Plan? If So, Will It Be Sufficient Under FSMA?
In FDA’s report on its RFR results , FDA Deputy Commissioner for Foods Michael Taylor says “[s]everal key U.S. industries are already re-evaluating their hazard and preventive controls, core principles of the Food Safety Modernization Act recently passed by Congress. We also anticipate improved reporting as we continue our vigorous outreach to food facilities through federal, state, local and foreign agencies, to help us expand the positive effect of the RFR on the safety of the U.S. food supply.”
The RFR will be a guide for the FDA in risk assessment and writing regulations for preventive controls and what companies must include in their food safety plans. The new hazard analysis and preventive controls requirements in FSMA are not required to go into effect until July 4, 2012, 18 months from the date of enactment.
Deputy Commissioner Taylor's comments suggest that industry standards already might be moving in the same direction. To mitigate the risk of FDA enforcement actions, product liability claims, supply chain contract claims and recalls, food manufacturers should anticipate the FDA's eventual rule making, and update or create food safety plans that address the hazard analysis and preventive controls prescribed by the FSMA. One way to anticipate FDA's direction is to mine the information FDA has collected (and continues to collect) as part of the RFR.
(A) the adulteration originated with the responsible party;
(B) the responsible party detected the adulteration prior to any transfer to another person of such article of food; and
(C) the responsible party –
(i) corrected such adulteration; or
(ii) destroyed or caused the destruction of such article of food.
What to Ask About Recall or Product Contamination Insurance Coverage
If they don’t already have it, I advise my clients to talk with their insurance broker about purchasing recall insurance (otherwise known as product contamination insurance) . For clients who have recall insurance, I advise them to make sure the policy provides the coverage they expect. Recall insurance is a different animal than other policies like Commercial General Liability or Products Liability coverage. Food companies purchasing recall polices should consider the cost-benefit carefully and consider asking the underwriter to amend the policy where necessary.
The facts of a recall are often fluid and every company’s business is different. The facts known on the day a recall, a market withdrawal or another event involving product contamination occurs may be different than the facts known in the days, weeks or months that follow. In the event of a claim, the insurer is more likely to contest coverage under a recall policy than with other types of coverage.
So what should a food company should look at when purchasing, negotiating or renewing a recall or product contamination policy? The answer depends at least in part on the nature of the business and the exposure and expenditures that the business expects in the event of a recall or product contamination event.
Based on the various forms of coverage I've seen, here is a non-exhaustive list of issues to consider discussing with your broker:
o Class II or III Recall: Will the policy cover recalls where the likelihood of bodily injury is remote or non-existent, such as class II or class III recalls? What if the recall is requested (as opposed to ordered) by the FDA or other appropriate governmental agency?
o New Administrative Detention Rules: Will the policy cover loss from an FDA administrative detention? The new food safety laws lower the standard by which the FDA can administratively detain foods. Just last week the FDA released its proposed rule on administrative detention: it no longer needs evidence of serious adverse health consequences or death to detain foods.
o Mistaken Recall: What happens if loss is incurred due to a recall or other event and it turns out that the facts underlying the recall or other event turn out later to be incorrect? For example, a company issues a recall due to information that its product is contaminated and it later turns out that the information was incorrect and the product was not contaminated.
o Exclusion for Competitor's Product: Some policy forms exclude coverage if the recall or other loss was due to a problem with a competitor's product. This exclusion could be particularly problematic for those involved with selling commodities.
o Warranty of Fitness Exclusion: Some policy forms will exclude loss if the product breaches a warranty of fitness. The insurer may be trying to exclude manufacturing defects or other reasons for a product recall or market withdrawal other than accidental contamination. The problem is that the insurer could later argue that loss from a contaminated product or a product with an undeclared allergen is excluded because such a product would also breach a warranty of fitness.
o Third-Party Coverage: Does the policy provide coverage for claims by third parties (e.g., your customers)? If not, do you need that coverage and is it available?
o Lost Profits/Revenue: Does the policy cover your lost profits or lost revenue? If so, how is your loss calculated? Will you have sufficient documentation and evidence to prove loss in the event of a claim?
Take the "Cold" out of Cold Cuts and Put Back the "Hot" in Hot Dogs
We've blogged a lot about listeria and avoiding it is a good idea, in the neighborhood of "breathing is a good idea." The CDC, in an article reported by Elizabeth Weise in USA Today Wednesday, is recommending a couple of things in connection with cold cuts, including hot dogs, for those over 50, and in particular those over 65, to avoid listeria:
- Reheat them to 165 degrees Fahrenheit just before eating
- Don't keep them in the refrigerator longer than five days after opening
Which kind of takes the "cold" out of cold cuts, doesn' t it?
Ms. Weise's article then goes on to explain what a change this would be in the behavior of people who are often dependent on lunch meats as a relatively inexpensive source of protein, and to question where the source of this advice is coming from. The CDC, for its part, notes that listeria doesn't go away when refrigerated and doesn't give either visual or olfactory clues to its presence. The industry response is that consumers should look for products containing antimicrobials like sodium lactate or potassium lactate.
As the article implies, this advice is counterintuitive for many people. Moreover, as one person quoted in the article points out, the placing of the label of "risky" on such an ordinary item takes away some of life's enjoyment as well. That is not to deny that the risk is real, but it is akin to a "Black Swan" event whose probability may be low but where the consequences of the event occurring are high and can change the way we think. Pregnant women and people with weakened immune systems are at high risk, but constitute a more discrete part of the population that is generally more likely to consider itself in need of health information. I'm 54 and don't think of myself as at extra risk of this kind of food-borne illness.
On the other hand, I haven't eaten any cold cuts or hot dogs since I started getting a reaction to them while still in my 30s.
Listen on Demand to April 29, 2011 AON Webinar on the FSMA
A 60-minute webinar broadcast on April 29 on the Food Safety Modernization Act (and a short discussion of implications of the Japanese earthquake, tsunami and resulting nuclear disaster on food safety) is available for replay at this link. The webinar was sponsored by AON. My gratitude to AON for inviting me to participate. As always, I'm interested in your feedback and questions.
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