by | December 13, 2012 · 11:14 am

Breaking News! FDA Extends Period for Food Facility Registrations Until Jan. 31

Foreign and domestic food facilities now have one more month, until Jan. 31, to make sure they are properly registered with the Food and Drug Administration. The FDA had formerly fixed a Dec. 31 deadline for food facilities that manufacture, process, pack or hold food for human or animal consumption to register or renew their existing registrations, a process which must be completed every other year. However, the FDA announced today that it is now extending that deadline for one month due to registration process delays and substantive changes to the Food Safety Modernization Act, which caused slight setback.

Specifically, until Jan. 31, FDA intends to exercise enforcement discretion with respect to registration renewals submitted after Dec. 31. Consequently, FDA will not suspend the registration number for facilities that submit a registration or renewal during this one-month period. However, the agency is strongly encouraging facilities to renew their registrations as early as possible to avoid any further issues.

Those affected by the new registration requirements are reminded that FSMA also creates new burdens and potential liabilities on entities elected as U.S. agents to foreign food facilities. One of these liabilities stems from FSMA §107 concerning re-inspection fees. It is suspected that in 2013, FDA will begin charging $289 per hour for the time it dedicates foreign re-inspections, resulting in the potential for invoices to reach several thousands of dollars per re-inspection. FDA will hold the U.S. agent responsible for paying these invoices. As a result, brokers, forwarders and importers of record will likely want to find alternatives to becoming U.S. agents themselves and foreign food facilities will need to seek out entities to become U.S. agents.

FDA Solutions Group LLC, a consulting company affiliated with the customs and international trade law firm Sandler, Travis & Rosenberg, assists foreign and domestic clients with the registration and compliance requirements affecting FDA-regulated industry. FDA Solutions Group makes it easy for food facilities to protect against suspension and costly business interruptions through its turn-key registration and U.S. agent services. To learn more about these services or submit your registration renewal today, please visit our Web site at http://www.fdasolutionsgroup.com or send us an e-mail at info@fdasolutionsgroup.com.

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by | December 12, 2012 · 4:37 pm

CDRH Announces Extension of Medical Device Establishment Registration Until January 31, 2013 for FY 2013

The FDA Center for Devices and Radiological Health (“CDRH”) announced that it is extending the annual medical device establishment registration period for FY 2013 by one month. Anxious medical device establishments wary of the looming compliance date can now breathe a little easier, as the FY 2013 annual registration period slated to end December 31, 2012 will now end January 13, 2013. This means that establishments may renew their registrations through January 31, 2013.

Aware that the new requirements of 21 CFR Part 807 and the Medical Device User Fee Amendments (MDUFA III) pursuant to the FDA Safety and Innovation Act (Public Law No. 112-144) are complex, FDA is extending the registration period to allow industry more time to comply.

CDRH has also improved the FDA Unified Registration and Listing System (FURLS) Device Registration and Listing Module (DRLM) and is expected to include additional enhancements during December 2012 to ease registration under the new requirements. Specifically, CDRH’s improved system is expected to support the upload of spreadsheets to identify importers of foreign devices for each listing, and the upload of a single spreadsheet containing proprietary names for all of an establishment’s device listings, by December 17th.

Additionally, by the end of December 2012, the upgraded and more streamlined system will enable foreign establishments to precisely identify various parties and shipments in the supply chain. For example, the system will allow establishments to identify products that a foreign establishment is offering for import, but that has not yet been imported into the United States. The system will also allow foreign manufacturers that do not ship products directly to the United States to identify the registered foreign establishments that purchase their products for export to the United States.

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by | December 11, 2012 · 11:10 am

Jan. 1, 2013 Deadline for Compliance with New Medical Device Excise Tax

Members of the healthcare and medical device industries should take note that as of Jan. 1, 2013, Section 4191 of the Internal Revenue Code will establish an excise tax in the amount of 2.3% of the sale price on sales of any taxable medical device by the manufacturer, producer or importer. The Internal Revenue Service has issued final regulations on this new tax as well as  Notice 2012-77, which provides interim guidance on determination of the sale price and other tax-related issues.

Nearly all medical devices intended for human use (including dental instruments, dental equipment and research use-only devices) sold after Dec. 31, 2012, as well as devices that are in inventory on Dec. 31, 2012 but are not sold until after Jan. 1, 2013, are taxable medical devices. The IRS stated that if a device is not currently listed with the FDA but the FDA determines at a later date that it should have been listed, the device will be considered listed as a device with the FDA as of the date the agency provides written notification to the manufacturer or importer that corrective action with respect to listing is required. The excise tax will then apply to such devices.

FDA has exempted certain categories of medical devices as exempt from the excise tax, namely eyeglasses, contact lenses and hearing aids, along with medical devices that are (a) to be further manufactured, (b) exported or destined for export, (c) sold for non-human use, or (b) intended to be purchased by the general public at retail for individual use (referred to as the retail exemption). The final regulations specify various facts and circumstances to which the retail exemption would likely apply, and also provide a safe harbor provision that identifies certain categories of taxable medical devices that fall within the retail exemption.

The regulations clarify that a manufacturer or importer is generally liable for the new excise tax when the title to a taxable device passes from the manufacturer to a purchaser. The regulations also underscore that the price for which a taxable device is sold includes the total consideration paid for the device irrespective of the form (i.e., money, services or trade-in). Packaging costs are included but shipping, transportation and other expenses incurred by the manufacturer or importer in placing the device in the hands of the purchaser are excluded. The sale price also excludes any warranties that may be purchased and any rebates that may be offered to the purchaser.

Sandler, Travis & Rosenberg, P.A. recommends that affected companies consider and update their evaluation of their tax commitment, assess the availability and application of any exemptions or anticipated business changes impacting the tax, and structure financial and budget estimation systems to ensure timely compliance beginning Jan. 1, 2013. For additional information and guidance on which medical devices are taxable, determination of the intended uses of the products, calculation of the sale price of the products, and assessment of possible exemptions, please contact Sandler, Travis & Rosenberg, P.A. to speak with a regulatory professional.

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by | November 29, 2012 · 5:18 pm

FDA Exercises Use of Registration Suspension Authority Granted by FSMA: Suspension of Sunland, Inc.’s Food Facility Registration

In its first use of registration suspension authority pursuant to the Food Safety Modernization Act (FSMA), the U.S. Food and Drug Administration (FDA) suspended the food facility registration of Sunland Inc., a manufacturer of nuts, and nut and seed spreads. According to the company website, this drastic move took Sunland, Inc. by surprise.

FDA registration is mandatory for any facility that manufactures, processes, packs, or holds food for consumption in the United States. Following an FDA suspension of a food facility, the food facility is prohibited from introducing food into interstate or intrastate commerce.

Suspension of Sunland, Inc.’s registration was allegedly due to the company’s linkage to an outbreak strain of Salmonella Bredeny, which has infected 41 people across 20 states, the company’s repeated violations, testing records demonstrating presence of the strain, and a substandard manufacturing and quality system that may have contributed to conditions permitting contamination and subsequent distribution of product.

This was the FDA’s first use of its registration suspension authority. Under the expanded powers provided by the FSMA, Section 102, the Agency has the power to suspend a company’s food facility registration when food manufactured, processed, packed, received, or held by a facility has a reasonable probability of causing serious adverse health consequences or death to humans or animals, and when other factors are met.

Following the FDA suspension order, Sunland, Inc. has the opportunity to request an informal hearing on issues addressed in the order. If FDA determines that the suspension is still necessary, the Agency will necessitate submission of a corrective action plan to address immediate issues and thereafter, a systematic and scientific implementation response. In accordance with the authority provided by FSMA, FDA will reinstate Sunland, Inc.’s registration only when it concludes that the company has implemented procedural safeguards for food facility production.

Food manufacturers and processors should heed the warning: the FDA is exercising its enforcement muscle and ushering a new era of compliance. The FSMA is the most significant amendment to the regulation of food products since 1938, imposing new responsibilities on the food industry while expanding the FDA’s powers. To avoid encountering a similar situation, food companies should renew their food facility registration, maintain and implement a compliant quality system program, be prepared for FDA facility inspections, timely respond to FDA information requests, and obtain in-house compliance professionals or hire compliance attorneys to ensure requisite satisfaction with regulatory standards.

For additional information and a list of products recalled by Sunland, Inc. please click here.

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