For those of you who think that regulators only pick on the small companies, have I got a story for you. And this story is also eye-opening if you have wondered who the government is most likely to go after when a problem arises, in a world of complicated chains of commerce involving multiple actors making and moving and bringing packaged products to market.
The short version of the story is that the Food and Drug Administration took action against Amazon for products sold on its website. Yes, that Amazon, the one with the big website where you can buy essentially everything for handy delivery. And this wasn’t the first time FDA has warned Amazon about products available on its popular website.
In November of 2023, FDA wrote to Amazon, warning the huge seller of things that seven companies’ products that Amazon helped sell were unlawful “new drugs.” FDA alleged that Amazon had violated the law by “introducing or delivering these products for introduction into interstate commerce” via Amazon’s fulfillment service. FDA also sent similar letters to at least five of the seven companies whose products were involved.
That “introducing or delivering … for introduction” business is derived from the Federal Food, Drug and Cosmetic Act, the key law FDA enforces.
I suspect that the common understanding about how FDA works goes like this. When it believes a product is unlawful in some way, it typically targets the company whose brand is named on the label. But that isn’t necessarily so. Probably that’s the most common scenario, but FDA considers a number of factors in deciding who to take action against, including the seriousness of the alleged violation, and how it appears to have been caused.
This FDA letter to Amazon is an excellent reminder of the all-encompassing nature of the Federal Food, Drug and Cosmetic Act. I often remind clients of the fact that essentially any role with respect to an allegedly violative FDA-regulated product is covered by the Act, and that as a result you can find a “prohibited act” listed in the law that describes pretty much any and every function. It’s an important fact to keep in mind for those we might not think of as first in line for FDA scrutiny, including service providers like Amazon, and also contract packagers and manufacturers, and those who transport and store FDA-regulated products such as foods, drugs, devices, and cosmetics.
Just because FDA might usually try to figure out who is most responsible for a product and take action against that company only, or first, that doesn’t mean they can’t also go after all the other companies that had anything to do with that violative product being on the market.
That’s because of the expansiveness of the law’s list of “prohibited acts” in section 331 of the Federal Food, Drug and Cosmetic Act, helpfully titled “Prohibited Acts.” The darn thing is kind of a monster: Section 331 has 59 subsections, each one listing a thing that you can get into trouble for doing. Many of the subsections are rather specific, describing violations like failing to make legally required reports, or violations relating to medical devices, or tobacco, or other narrow product categories. But the first few subsections of the Prohibited Acts section read like Congress was trying to describe broad concepts that encompass everyone in the chain of commerce, and I think they do.
Those early subsections say that doing these things is prohibited:
The introduction or delivery for introduction into interstate commerce of any food, drug, device, tobacco product, or cosmetic that is adulterated or misbranded; or the adulteration or misbranding of any such product; or the receipt in interstate commerce of any such product, or the delivery or proffered delivery of any such product for pay or otherwise. Or, on top of all that, the causing of any of the above actions. That’s a lot of verbs.
One implication of this “causing” violation is that even if you contract with another company to make or package or label your product, you still have responsibility to ensure that what that other company does is compliant with FDA requirements, lest you end up being accused of causing whatever violation that company commits.
Another important point about all this is that no company can absolve another of liability for FDA violations. For example, in a contract between a contract packager or manufacturer and its client, it’s common that there are provisions that talk about indemnification and guarantees where one company covers the other’s costs should something go wrong. Those are important and useful as far as they go, but they cannot and do not provide that one company will be the only one liable for FDA violations if they arise.
As I regularly explain to clients (and advise that they include in written contracts), each company making or packing or repacking or holding or shipping or receiving an FDA-regulated product has its own independent obligation to be in compliance with the FDA’s requirements. The FDA warnings to Amazon are a useful reminder of that fact.
The author serves as general counsel to the Contract Packaging Association, the leading membership group for companies that co-pack and co-manufacture various types of products, and their suppliers.
Eric Greenberg can be reached at [email protected]. Or visit his firm’s website at www.ericfgreenbergpc.com.
INFORMATIONAL ONLY, NOT LEGAL ADVICE.
