FDA guidance provides detail on which smaller facilities can sidestep heaviest FSMA burdens

By Hank Schultz contact

- Last updated on GMT

FDA guidance provides detail on which smaller facilities can sidestep heaviest FSMA burdens
A new guidance from FDA on how to determine facility status under FSMA is a step forward in applying these rules to the dietary supplement industry, an expert says.

Recently the American Herbal Products Association alerted its members and the wider industry to the new resource. A number of AHPA members straddle the food/supplement divide and some are smaller businesses, so the issue of who qualifies under FSMA is of vital importance.

The new guidance​ aims to make more clear which facilities are ‘very small businesses’ or ‘qualifying facilities’ under the Food Safety Modernization Act (FSMA), which has been characterized as the most sweeping revamp of food regulation in the US in almost 80 years. FSMA takes a risk based approach to food safety, and so provides exemption for certain smaller facilities that present limited risks to overall public health.

Two ways of being exempted from requirements

The guidance is meant to help industry determine what facilities qualify under Part 117: Current Good Manufacturing Practice, Hazard Analysis, and Risk-Based Preventive Controls for Human Food. Another portion of the guidance applies to facilities making animal feeds.

The basic dividing line is whether a facility can be qualified as a ‘very small business,’ which is defined as one that does less than $1 million in annual business. Another exemption factor, one which doesn’t impact the dietary supplement industry much, is for facilities that sell a majority of their wares by annual dollar volume to end users, such as a fruit grower might via a roadside stand, and do less than $500,000 in annual sales.

The guidance goes into more detail as to how to calculate these annual volumes. It delves into where the value of inventories fits in, how do the returns from subsidiaries figure into the total, and so forth.

Larisa Pavlick, senior vice president for global regulatory & compliance for the United Natural Products Alliance, gave NutraIngredients-USA some input on the new guidance and its importance for industry. Pavlick, who had a prior career as an FDA inspector, is one of the industry’s leading experts on the topic.

One of the primary ways FSMA has impacted the supplement industry is that it has brought ingredient suppliers under a more stringent mode of regulation​. These companies, as part of a burden of regulation reconciliation move, were exempted from the part 111 GMP requirements under the Dietary Supplement Health and Education Act. 

Putting up a warehouse and holding inventories pushes limit

Pavlick said many facilities in the dietary supplement industry will push past the threshold of the very small business definition. This and the qualified facility designations were intended as a way to keep the new safety rules from putting mom and pop shops out of business. Once you put a warehouse together and have some inventory in house, it’s hard to have a viable business and stay under that $1 million line.

I have heard the most significant reason some of the smaller operations do not qualify is because of the inventory inclusion in the definition, or what FDA is calling ‘held without sale.’ The ‘held without sale’ material could be raw materials or finished product. That inventory usually bumps small organizations over the top,”​ Pavlick said. 

“One-third or less of the firms I visited may have met the definition from annual sales; however, if you add in the held-in inventory items, it might cause them to lose their qualified or small classification,”​ she added.

FSMA awareness is ramping up

Through Pavlick, UNPA has made a concerted effort on FSMA eduction. As a result, she said she believes most UNPA and many companies in the wider industry are starting to fully appreciate how Part 117 affects their businesses.  Preventive Controls for Human Food (21 CFR Part 117: PCHF) and Foreign Supplier Verification Programs (FSVP) are the most pressing parts of the regulations for the dietary supplement industry, she said. And the Produce Safety Rule may impact some botanical ingredient suppliers, she said.

“Hazard analysis is complicated for our industry. Based on the type of operations (manufacturer, raw material supplier or brand owner using contract manufacturing services), the expectations of the rules are very different and unique. Additionally, a hazard analysis for Preventive Controls (21 CFR Part 117) and FSVP may have varying degrees of complexity. If a hazard is detected that is reasonably likely to occur, additional work is necessary under the PCHF rule, and a food safety plan is born,”​ Pavlick said.

Cost still to be determined

One thing yet to be determined is the true cost of all of these changes. New federal regulations must go through a cost analysis, but as most of these processes have not been implemented before, that analysis amounted to a best guess estimate.

“The seven FSMA rules are the first major shift in food regulations in 70 years, since the Food Drug and Cosmetic Act in 1938. By the end of the year we hope to survey members regarding the obstacles and costs encountered during implementation. I am curious to see how that comes out,” ​Pavlick said.

I can tell you from my experience at UNPA developing food safety plans for some of the top supplement categories for use in our training, the initial plans took me weeks of research, writing and review. Labor hours required for qualified staff to establish and implement these programs is extensive,”​ she added.

To read the full text of the guidance, CLICK HERE.

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