Import-reform bills could rewrite business, labels

6/23/2008

NEW YORK —On May 14, several industry leaders testified before the House Committee on Energy and Commerce’s Subcommittee on Health, regarding the potential impact the yet-to-be-filed but widely anticipated Food and Drug Administration Globalization Act could have on the business of everything from lipstick to pharmaceuticals—to say nothing of every ingredient, active, inactive and fillers.

It was the third hearing regarding the proposed piece of legislation, which, in the wake of the deaths of more than 80 Americans poisoned by contaminated heparin, is backed by strong bipartisan support, and many expect it could be enacted before the end of they year.

The bill also is being debated in the halls of Congress in an attempt to address many of the safety concerns of goods imported into the United States that have arisen in the past two years, safety concerns that have prompted recalls of everything from lens care solutions and pet foods to anticoagulant pharmaceuticals.

It’s a broad-sweeping piece of legislation that would address the regulation of just about every product imported into the United States that falls under FDA purview.

On its face, the two biggest impacts on manufacturers of food products, dietary supplements, over-the-counter medicines, beauty supplies and both branded and generic pharmaceuticals will be the additional mandated fees associated with the increased inspection requirements of foreign-based production facilities and the labeling mandates that would require manufacturers to list countries of origin for their active ingredients. The resulting increased costs to import goods come at a bad time, many fear, as rising fuel costs already figure to significantly raise the prices manufacturers have to charge and consumers have to pay.

The new labeling requirements likewise may increase manufacturing costs, some say, especially as raw ingredient sources are not always static, and each change in raw ingredient manufacturer could necessitate a change in labeling. More important, listing the country of origin on product labels could influence consumer purchase decisions—especially those consumers who might be afraid to buy and use products manufactured in a developing nation, or even a big emerging market country, such as China or India.

“This will be significant, I think,” Larrie Short, a partner at Arent Fox, told generic drug manufacturers and retailers gathered at an April 25 supply chain symposium sponsored by Anda, the country’s fourth-largest generic drug distributor. “This ingredient listing raises a whole different way of competing that has not been a part of the generic market, where generic drugs compete only on price and service. That really has the potential to differentiate certain products in the minds of consumers,” she said.

And while some consumers may want to know from whence their products originated, it may not add up to a hill of beans as it relates to safety issues, some argued. Listing countries of origin neither guarantees safety nor does it necessarily indicate questionable safety.

And while some form of FDA import reform act appears imminent, nothing is set in stone, just yet. “It’s important for us to communicate immediately the concerns we have about the current draft,” noted Andy Fish, senior vice president of legal and government affairs and general counsel for the Consumer Healthcare Products Association. “And I think that our [collective industry] concerns will be reflected in future drafts.”

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