On November 6, 2019, the Food and Drug Administration (FDA) announced in a Constituent Update that it will continue to exercise enforcement discretion with respect to certain supply-chain program requirements applicable to contract manufacturers (“co-manufacturers). The agency is taking this action to address situations where brand owners perform certain supply-chain program requirements on behalf of their co-manufacturers. This action extends the enforcement discretion FDA announced in November 2017, which was due to expire on November 6, 2019. Notably, FDA has not yet announced the length of time for this extension of the enforcement discretion but plans to do so in a forthcoming Federal Register notice. This memorandum provides a background on this issue and explains the FDA’s recent announcement.
Under the Preventive Controls for Human Food and Preventive Controls for Animal Food (collectively, “Preventive Controls”) regulations, a supply-chain program is required when a receiving facility identifies a hazard requiring a preventive control that is controlled before an ingredient’s receipt by the facility. A co-manufacturer is considered a “receiving facility” under the rule. Although the co-manufacturer is responsible for approving its suppliers when a supply-chain program is required, there is some flexibility in the rule that allows the co-manufacturer to rely on a brand owner’s supply-chain program activities.
Specifically, the supply-chain program provisions in the Preventive Controls regulations provide that another entity (such as a brand owner) can determine, conduct or both determine and conduct
appropriate supplier verification activities on behalf of an entity such as a co-manufacturer, provided that the co-manufacturer documents its review and assessment of the brand owner’s applicable supplier verification documentation. Thus, when a co-manufacturer relies on a brand owner to handle supplier verification activities, the co-manufacturer will need detailed information from the brand owner in order to meet its own obligations under the supply-chain program regulations. Industry has expressed concerns to FDA that these requirements may not be feasible.