FDA's Update on its Regulation of Cosmetic Products

On July 14, 2011, FDA posted an update on how it regulates cosmetic products.  The full update is below for your perusal. In my practice, I have seen warning letters from the FDA, refusals and the insertion of companies on FDA's Import Alert List (goods are automatically detained when entering the U.S., and it is up to the importer to prove to the FDA that the products are in compliance for EACH importation).  It will be interesting to see if the FDA ramps up enforcement for violative cosmetics.  Interesting to note is FDA's newer Import Alert (IA) for cosmetic products - IA  66-38, "Skin Care Products Labeled As Anti-Aging Creams," dated April 8, 2011.  Getting off the Import Alert list is a rather rigorous process, which will be the subject of another post.  Interested to note if you see ramped up enforcement of cosmetics with the new administration?

How FDA Evaluates Regulated Products

 

The Food and Drug Administration’s Strategic Action Plan for Risk Communication is an initiative to tell consumers how the agency makes decisions on the safety and effectiveness of FDA-regulated products. This is the first in a series of articles about the data and methods—and their limitations—that FDA uses to determine whether products are safe for consumers to use.

 

Here's a look at how FDA's Office of Cosmetics and Colors evaluates the safety of cosmetics.

The Regulation of Cosmetics:

Under the Federal Food, Drug, and Cosmetic Act, cosmetic products and ingredients do not require FDA approval before they go on the market. The exception is color additives (other than those used in most hair dyes). Companies and individuals who market cosmetics have the legal responsibility to ensure the safety of their products.

To learn more, see FDA Authority Over Cosmetics.

Safety Data and Its Limitations

 

FDA can only act after a cosmetic is on the market and then must first establish that the product is harmful to consumers when used as intended. The agency has ways to monitor these products but even so, the information is often limited:

• Voluntary Cosmetic Registration Program: FDA encourages cosmetic firms to report product formulations through the VCRP. The VCRP database provides important information on these cosmetics. However, the companies are not legally required to tell FDA about their products and safety data.
• Inspections: FDA can inspect manufacturing facilities to determine if proper controls and practices are being followed. FDA also works with U.S. Customs and Border Protection to examine imported cosmetics. But because resources are limited, only a few establishments are inspected each year, and just a fraction of imports are physically examined.
• Surveys of products: FDA periodically buys cosmetics and analyzes them, especially if aware of a potential problem. The information obtained can be used to alert consumers, support regulatory actions, or issue guidance for industry. FDA does not have the resources to sample and analyze all cosmetics on the market.
• Cosmetic Ingredient Review (CIR) expert panel: The CIR is an independent, industry-funded panel of medical and scientific experts that meets quarterly to assess the safety of cosmetic ingredients. The limitations are that CIR bases its reviews on summaries provided by manufacturers, not the complete data sets from safety testing, and reviews only a limited selection of ingredients each year. FDA may or may not agree with CIR conclusions.

FDA’s Own Research

 

FDA conducts research on cosmetic products and ingredients to address safety concerns or to provide information to support regulatory actions or guidance. For example, the agency has conducted research on skin absorption of cosmetic ingredients, tattoo inks, and potential contaminants.

 

In considering the safety of a product, a number of factors are considered, such as:

• whether a cosmetic is likely to be inhaled, swallowed, or absorbed through the skin
• how often it is generally used
• how long it stays in contact with the body (for example, leave-on or wash-off)
• whether some people, such as children, the elderly, or people with compromised immune systems, might be more vulnerable than others 

FDA also looks for input from consumers and health care providers. If you experience a bad reaction to a cosmetic, please contact FDA’s problem-reporting program, MedWatch2, on the Web or at 1-800-332-1088; or contact the consumer complaint coordinator3 in your area.

 

Because the law does not require that bad reactions to cosmetics be reported to FDA, the agency may be unaware of problems. That's why FDA is trying to increase consumer awareness about the importance of reporting cosmetic-related problems. (See Bad Reaction to Cosmetics? Tell FDA.4)

  

What Can FDA Do if a Cosmetic Is Not Safe?

 

To prevent further shipment of a cosmetic that does not comply with the law, FDA may 

• ask a federal court to issue an injunction
• request that U.S. marshals seize the products
• initiate criminal action
• refuse entry of an imported cosmetic
• request that a company recall a product

FDA cannot require recalls of cosmetics, but works with companies to make sure their recalls are effective.

Changes in FDA's Management Structure - Message from the Commissioner to FDA Staff

Dear Colleagues,

I am writing today to let you know about some changes that I will be making to the agency’s management structure. As you probably recall, back in January, I told you that I was initiating a review of the Office of the Commissioner. As I explained at that time, this review was driven by the expanding and rapidly changing nature of the Agency’s responsibilities, and the need for a management structure that reflects these changes and best supports your efforts.

I consulted with former Commissioners, as well as with HHS Secretary Sebelius, and considered many options before arriving at the structure that I am announcing today.

The most important thing driving my consideration of this is the changing nature of both the Agency and the job of Commissioner.

Today, the Agency faces several key challenges:

First, we are a very large agency, with an incredibly broad span of responsibility. We regulate products that account for between 20 and 25 percent of every consumer dollar spent in the U.S. and that total more than a trillion dollars annually. For the most part, these are products that people rely on in fundamental ways every day.

Second, as technology and science continue to evolve, we are faced with the challenge of making sure that new ideas translate into the products and opportunities that people need and count on to protect their health. Innovative products that are truly transformative create unique scientific and regulatory challenges, and FDA must be a consistently powerful catalyst for innovation.

Third, we have seen the dramatic transformation of globalization – more products, more countries, more access by consumers and companies to global supplies – and this presents an enormous challenge to FDA in ensuring the safety and quality of the products we regulate.

Finally, we continue to be faced with administrative challenges. In these difficult economic times, our agency’s budget requires constant attention. And, simply providing the support and services for our 12,000 plus employees – everything from phones to IT to office space on our beautiful, growing White Oak campus – is a daunting job.

I take very seriously my responsibility to lead FDA along a path that will meet these challenges. One crucial part of this responsibility is to create a structure in the Commissioner’s Office that best supports your efforts and reflects the changing nature of the Agency.

The structure of the Office of the Commissioner that I inherited was created in 1970, when the FDA consisted of three Centers and a field office. By 2011, we had grown to seven Centers, and a Commissioner’s Office with more than 1,600 staff. Over the years, as Congress created new programs that cut across Center responsibilities, those programs were placed by default in the Office of the Commissioner.

The new organizational alignments more accurately reflect the agency’s responsibilities, subject matter expertise and mandates in an ever more complex world, where products and services do not fit into a single category.

Let me begin by saying that, for most of the FDA, this organizational alignment will likely not have a significant impact on you or your day-to-day work.

The most obvious change you will see is that the Agency’s programs, in terms of a reporting chain to me, will be divided into “directorates” that reflect the core functions and responsibilities of the Agency. This new management structure will enable the Office of the Commissioner to better support the agency’s core scientific and regulatory functions, and help tie together programs that share regulatory and scientific foundations. I will rely on the leadership of these directorates to help provide the necessary direction and coordination needed by an Agency of this scope.

I am establishing a new Deputy Commissioner for Medical Products and Tobacco, who will provide high-level coordination and leadership across the Centers for drug, biologics, medical devices, and tobacco products. The Centers will, of course, remain as discrete management entities under their current expert leadership. In addition to this strategic role with the Centers, this position will oversee our Special Medical programs.

I am pleased to announce that Dr. Steven Spielberg, former Dean of Dartmouth Medical School and currently Director of the Center for Personalized Medicine and Therapeutic Innovation at Children’s Mercy Hospital in Kansas City, has accepted this position. In this role, Dr. Spielberg will serve as both advocate and a support for Center Directors in their important work for FDA.

I will also be creating a directorate focused on grappling with the truly global nature of today’s world -- food and drug production and supply, as well as the science that undergirds the products we regulate -- so that the FDA can move from being a regulator of domestic products to one overseeing a worldwide enterprise.

To oversee this transformation, I have asked Deborah Autor, now Director of CDER’s Office of Compliance, to take on the role of Deputy Commissioner for Global Regulatory Operations and Policy. In this position, Deb will provide broad direction and support to the Office of Regulatory Affairs and to the Office of International Programs, with a mandate from me to make response to the challenges of globalization and import safety a top priority in the years to come. Dr. Murray Lumpkin, who has served with dedication and accomplishment as Deputy Commissioner for International Programs and Director of the Office of International Programs, will take on a new role as Senior Advisor and Representative for Global Issues. In this role, he will be charged primarily with special projects that draw on his expertise working with counterpart regulatory agencies on issues of global regulatory harmonization, governance and capacity-building.

The third directorate is the previously established Office of Foods, which we created to make our oversight of FDA’s food and feed program a more seamless enterprise. That task is even more important today as Mike Taylor leads the implementation of the Food Safety Modernization Act.

The fourth directorate will be a new Office of Operations, headed by a Chief Operating Officer. The COO will oversee the agency’s administrative functions, such as human resources, facilities, information technology, finance, and other activities that provide support to your organizations. Within this Office, I am bringing the budget formulation and budget execution functions together under a CFO position. We have initiated a search to fill the Chief Operating Officer position.

The Office of the Chief Scientist, charged with our important efforts to improve FDA’s science and address issues of cross-cutting scientific concern, will continue to do so. The National Center for Toxicological Research will report to the Chief Scientist, Dr. Jesse Goodman, and, like the other Centers, will remain a discrete management entity within this new directorate model.

Within the new, smaller, immediate office of the Commissioner, John Taylor will remain as Counselor and will have the additional responsibility to oversee the policy and planning functions, the Office of Legislation, and the Office of External Affairs. I want to thank John for serving as acting Principal Deputy these past months, in addition to his duties as Counselor. He has tirelessly supported me and the Agency with enthusiasm, energy, expertise, and good humor.

You can find revised organizational charts, reflecting this realignment at http://inside.fda.gov:9003/AboutFDA/FDAStaffInformation/OrgCharts/default.htm. In addition, I will share a video message of this announcement shortly. Your managers will be available to answer any questions you might have in the coming days.

In closing, I want to take a moment to thank you so much for all that you do. FDA is an extraordinary place, with so many highly-dedicated professionals and support staff who are committed to promoting and protecting public health. You accomplish a tremendous amount every day and I am grateful for all of your work. These organizational changes are intended to help further your important work and the mission of this remarkable Agency.

Sincerely,


Margaret A. Hamburg, M.D.

Commissioner of Food and Drugs

Restaurant Menus Will Soon Change, FDA Issues Guidance

The U.S. Food and Drug Administration (FDA) issued a press release, dated August 24, 2010, providing guidance and outlining steps to help chain restaurants comply with new federal nutrition labeling requirements. The new law applies to restaurants and similar retail food establishments with 20 or more locations. The law requires the establishment to list calorie content information for standard menu items on restaurant menus and menu boards, including drive-through menu boards. Other nutrient information – total calories, fat, saturated fat, cholesterol, sodium, total carbohydrates, sugars, fiber and total protein – would have to be made available in writing upon request.

In the press release, FDA Commissioner Margaret Hamburg, M.D. said

One of the most important things we can do when it comes to the nation’s health is to provide simple basic information to the American people so they can make choices that are best for them and their family. The menu labeling program will help Americans get the facts about food choices that are available to them in restaurants and vending machines so they know what is in the food and can make healthier selections.

The FDA has until March 23, 2011 to carry out these provisions. FDA has issued guidance documents to help restaruants get started. The FDA is soliciting feedback now, if you want your voice heard, respond to FDA's Federal Register Notice by October 21, 2010.

OWIT-South Florida - Get to Know this Group

On January 27, 2010 you will have the opportunity to meet the new Board of Directors for the Organization of Women in International Trade's South Florida Chapter-- don't miss this networking opportunity.   OWIT-South Florida is a networking and educational organization that promotes women and men in international trade and commerce.

As the incoming President to this group, I'll admit I'm biased, but, I do have say, this is a great group to get to know.  We have representation on our Board from Adobe, C.H. Robinson, Kroll, Robertson Forwarding, UPS, and Mastercard to name a few.  Meet us personally at my firm, Becker & Poliakoff's Coral Gables office on January 27th, from 6-8 p.m., you'll be glad you did.

Upcoming must attend events:

• February 17, 2010 - Are You "Women Certified?" Delia Passi, founder of Broward-based Women Certified, talks about her firm's mission to teach companies, especially sales people, how to sell to and retain female consumers.
• March 24, 2010 - Crisis? What Crisis? If your firm faces a reputational tsunami, call the "trouble valet."  Judy Miller, CEO, JM Advisory and former Pulitzer-prize winning investigative journalist, explains how she helps companies in stressful situations avoid reputational meltdown.
• November 2, 2010 - Hear Donna Shalala speak at our annual International Business Women of the Year (IBWOY) awards.

Get Involved!  Join one of our several committees.  Reach out to our Committee Chairs to learn more.

Join OWIT-South Florida on Linked In as well and start a discussion - let us know what you'd like to see with OWIT-South Florida in 2010!

I look forward to making membership in OWIT-South Florida a worthwhile and fun experience. If you ever have questions, comments or program ideas, I am always interested in your feedback and want to make sure this organization is a valuable asset to everyone involved. Please feel free to contact me directly with questions and comments.  See you January 27th!

Intellectual Property Rights are High Priority for CBP

U.S. Customs and Border Protection (CBP) takes Intellectual Property Rights (IPR) enforcement very seriously, in fact, its a priority.  Shipments not destined for the U.S., that are merely in transit (for example from China for a brief stop in Miami to the ultimate destination in Latin America), are no exception.  The fact that CBP enforces IPR rights for in transit merchandise surprises many -- but lets face it, if CBP is to protect IPR rights, why should it stop at products solely destined for the U.S.?  If you took the time to register your trademark or copyright with the U.S. Patent and Trademark Office and then took the extra step to record that trademark or copyright with CBP, wouldn't you want CBP to stop infringers, even if they are just passing through for a brief moment?  Check to see if a company has taken that extra step to record their IPR here.

CBP publishes IPR statistics yearly.  The statistics for 2009 were recently published in December of 2009.  There were 14,841 seizures from IPR violations.  Of no surprise, China was the top trading partner for IPR seizures in FY 2009 with a domestic value of $204.7 million in counterfeit merchandise, accounting for 79% of the total value seized.  Footwear was the top commodity seized in FY 2009 with a domestic value of
$99.7 million, which accounted for 38% of the entire value of infringing goods.  Consumer electronics was a distant second at $31.7 million, accounting for 12% of the seizure pie.   Footwear and consumer electronics combined make up half of the total seizures. 

What's important to note is this:

1. Even if your merchandise is in transit, if it doesn't comply with U.S. regulations, it may still be seized and forfeited to the U.S. government.
2. Seek an experienced attorney to respond to your Seizure Notice (we can come up with creative solutions to get your merchandise back).
3. On top of the seizure, you may also receive a penalty (for the MSRP of the goods as if they were genuine).  
4. If you are doing business with a Chinese company (especially if dealing in footwear and/or consumer electronics) do your due diligence first.
5. Create your pre-compliance plan.  Have your trademark license agreements handy and work with counsel to present the agreements to CBP in advance of importation.

January 26, 2010 – Do You Have An ISF Plan?

During the annual Customs Symposium, which took place December 8-10, 2009, Richard DeNucci, the Director of Customs Office of Field Operations, Trade Initiatives, discussed how CBP will enforce ISF(Importer Security Filing, aka 10+2) penalties, beginning January 26, 2010, and provided interesting statistics thus far. ISF will require both importers and carriers to submit additional information pertaining to cargo to CBP before the cargo is brought into the United States by vessel. FAQ’s on ISF filing may be found here.  Non compliant ISF filings can be costly, at $5,000 per violation.

Mr. DeNucci stated that Customs would be “reasonable and equitable” with ISF timeliness issues and will use the “least amount of force to ensure compliance.” When addressing DNL’s (do not loads), Mr. DeNucci stated this “is not something CBP will take lightly.” I personally am interested to see how this plays out, as CBP’s mitigation guidelines are not that forgiving.

From January 26, 2009 to December 6, 2009, there were 3.65 million ISF filings, and 103,000 ISF filers. The most impressive part of this statistic is that 95% of these filers received an acceptance rate, meaning only 5% of the filers would have potentially faced ISF penalties for issues with filing. During this same time period, CBP reviewed more than 6,475 stow plans and 106 million container status messages. Interestingly, CBP noticed the highest volumes of filings on a Friday – apparently everyone is either a procrastinator or a go-getter, filing early.

Important notes regarding ISF:

1. There will be report cards, they will address the volume, error message and timeliness (and will be available through the FOIA (Freedom of Information Act) process.
2. CBP discussed a current bill in Congress which states ISF data will only be used for “security purposes” not for “trade compliance.”
3. The main CBP contacts in Headquarters are: Richard DeNucci, John Jurgutis, and Stephen Silvestri.
4. The main CBP contacts in the field are: Edward Moriarty and Joseph Martella .
5. Unified filings (entry + 10+2) may lead to an earlier release.
6. CBP recently updated the “Security Filing Transaction Sets” link which discusses applicable formats to send information to CBP.

With the January 26, 2010 enforcement date around the corner, it is time to make sure you have an ISF plan.

Bid Now for Right to Ship Chicken Legs to Nicaragua

Nicaragua
Central America Poultry Export Quota, Inc. (CA-PEQ)
Notice of Open Tender
Bids open: November 20, 2009
Bids due: December 4, 2009

Central American Poultry Export Quota, Inc. (CA-PEQ) invites bids for the right to ship U.S.-origin chicken leg quarters to Nicaragua duty-free under a CAFTA tariff-rate quota granted by the Republic of Nicaragua to the United States. The export item is chicken leg quarters, (SAC Nos. 0207.13.93; 0207.14.93; 1602.32.00.10 which correspond respectively to HTS Nos. 0207.13.99.20; 0207.14.99.20 and 1602.32.00A referred to in the text of CAFTA-DR). The product must be imported into Nicaragua between January 1st and December 31, 2010. Certificates of Quota Allocation are being offered duringthis open tender for 487 metric tons in total.

Any person or entity incorporated or domiciled, and with a legal address, in the United States is eligible to bid. Bids must be received by CA-PEQ not later than 5 p.m. (EST) on December 4th, 2009. The minimum bid quantity is 1 metric ton; the minimum bid price is $22.04/metric ton. Bids must be submitted in dollars and cents per metric ton. Bids should not be submitted in amounts that include fractions of a cent. If a bid is received in an amount that includes fractions of a cent, the administrator will ignore the fractions of a cent and consider only the amount that was bid in dollars and full cents. Performance security (the lesser of $50,000 or the total value of the bid) must be provided for each bid. The Certifi cates of Quota Allocation will be awarded to the highest bidder(s).

Interested parties may obtain the required bid forms and bid instructions at: http://www.mmsend3.com/ls.cfm?r=180395312&sid=7993497&m=871385&u=cbmedia&s=http://www.capeq.org/ or by contacting the CA-PEQ Administrator, DTB Associates, LLP, 901 New York Ave, N.W. 3rd fl oor – Box 12, Washington, D.C. 20001, U.S. Office phone (202) 684-2512, Fax. (202) 684-2233.

Central America Poultry Export Quota, Inc.
c/o DTB Associates, LLP
901 New York Avenue, N.W. 3rd Floor
Washington, D.C. 20001
Office phone: 202-684-2512 Fax: 1-202-684-2233
E-mail: Administrator@ca-peq.org    http://www.mmsend3.com/ls.cfm?r=180395312&sid=7993498&m=871385&u=cbmedia&s=http://www.ca-peq.org

FDA's PREDICT is Coming!

Beware, FDA will soon have a system to track your performance!

FDA will implement PREDICT (Predictive Risk-based Evaluation for Dynamic Import Compliance Targeting and Import Trade Auxiliary Communications System).  Although this is likely the longest acronym known to man, I am looking forward to this new system replace OASIS. 

PREDICT will be FDA's system to target higher risk shipments, and will keep track of importers compliance.  PREDICT will make it essential for importers to cooperate with brokers in advance, and utilize the "Affirmation of Compliance" section on customs entry forms -- which helps provide to FDA a quick mechanism to prove that you are compliant with FDA regulations.

FDA has many outreach events scheduled to get the word out about the new changes coming with PREDICT.  The Florida Customs Brokers and Freight Forwarders (FCBF) is assisting to get the word out and has outreach events in Tampa and Miami.

U.S. Customs - Your Personal Policeman at the Border

Many companies mistakenly believe that registering a trademark or copyright with the U.S. Government provides sufficient protection and remedies, and, therefore, do not take the extra step to record those trademarks or copyrights with U.S. Customs and Border Protection (U.S. Customs).

The processes achieve two completely different goals.

Registering a trademark with the U.S. Patent and Trademark Office (USPTO) or copyright with the U.S. Copyright Office gives public notice of one’s ownership of the trademark or copyright. On the other hand, the purpose of recording a trademark or copyright with U.S. Customs is to partner with the agency in preventing the unauthorized importation of merchandise that bears a recorded trademark or copyright. U.S. Customs prevents counterfeit and otherwise infringing products from entering or exiting the United States for registered trademark or copyright holders who have recorded their trademarks or copyrights with Customs.

Can You Afford to Lie to BIS?

Lesson of the day - Don’t Lie to the government!

This case is about making an intentionally false or misleading statement to the U.S. Commerce Department's Bureau of Industry and Security (BIS). Carol Wilkins, an export manager apparently did, and will now pay $15,000 to the BIS. Important to note is that this export manager was fined individually. RF Micro Devices, Inc., the company Carol worked for, was fined $190,000 separate and apart from Carol. I don't know about you, but shelling out 15k would definitely put a huge dent in my shopping fund.
The BIS Charging Letter discussed Ms. Wilkins' false or misleading statement to the BIS. During the course of a BIS investigation, she allegedly told a BIS Special Agent that all product classifications were confirmed by an outside consultant to be EAR99 (no export license required). Apparently the consultant disagreed, and even kept the documentation in which the consultant had specifically advised Carol that the items were not EAR99, but in fact required a license. Carol might not have realized that the BIS Agents would be resourceful enough to confirm her statements to them by double checking with the consultant. Even I was always taught "trust but verify". Not surprisingly, BIS is no different.
Second lesson of the day, before making a statement you'll regret to government officials, call an attorney first.