Lifesoy Inc., a contract manufacturer of ready-to-eat soy products received a consent decree of permanent injunction from the U.S. District Court for the Southern District of California on June 2, 2010. The company was cited by the U.S. Food and Drug Administration for preparing, packing, and storing food under unsanitary conditions.
The consent decree prohibits Lifesoy and its owner, Mr. Long H. Lai from directly or indirectly being involved in the manufacturing and distributing food products until it registers with the FDA and complies with federal food laws (i.e. Title 21 of the Code of Federal Regulations (CFR) Part 110).
However, Life soy's inability to meet the requisite standards resulted in consent decree being handed down. The result of the consent decree can potentially put Lifesoy out of BUSINESS!
Two years ago, the company received a warning letter from the FDA after unsanitary conditions and food Good Manufacturing Practice violations were uncovered during an inspection of the company’s food processing facility.
Inspectors found that Lifesoy stored food in a manner that would cause it to be adulterated and that the food was not safeguarded foods from myriad contaminations. Furthermore, food was not held or stored under properly refrigerated conditions either in-house or in-transit resulting in the growth of microorganisms. Inspectors observed an employee splashing dirty cleaning water into a vat of processing food, and cats, rodents and insects roamed around the manufacturing site.
Manufacturing facilities such as Lifesoy are required by law to register with the FDA and follow current good manufacturing practices and other laws, including maintaining a sanitary facility. In order to comply with Good Manufacturing Practices, companies must have written standard operating and training procedures.
Despite the FDA’s tough response to Lifesoy’s operations, there was clearly a window of opportunity for the company to address the concerns of the FDA. That the company failed to do so suggests that it lacked the resources and infrastructure to adequately address the numerous issues that the FDA had brought up.
For many contract manufacturers, the ability to meet FDA concerns, in the form of a warning letter for example, will be crucial for their long term survival. Often this is not a result of a failure to take a critical, honest look at how their quality systems meet FDA regulations but the new zero tolerance policy of FDA enforcement.
In some cases, poor workplace culture, inadequate operating systems and improperly trained employees play a part. If a company is facing these circumstances, often the best solution is to get expert advice and counsel to first develop and help submit responses to enforcement actions. Expert help can be cost effective for the development and implementations of a comprehensive remediation plan that would bring the company’s operations into compliance with regulations.
Such a plan is often the only way to address long standing compliance issues and enable a company to affect a fundamental change in the way it operates before it is shut down or forced to stop production.
This will not only help it reduce the risk of further enforcement action, it will greatly enhance the company’s continued ability to operate within the framework of the law.
After a warning letter or product recall, the FDA will make it a priority to follow up with appropriate action and this policy could impact a firm in a couple of different ways.
The FDA will be coming in to verify that the firm has completed commitments and they will ask for a demonstration that the actions were effective. There is less time to implement a corrective action and see the benefit of that action. Corrective actions need to be thorough and the firm needs to have an understanding during Corrective and Preventative Action development as to how they will measure the effectiveness of that CAPA.
This can be challenging for firms that do not have the adequate resources in house to comply with the FDA requests for Corrective and Preventative Actions.
A second way this can be challenging is for firms that are dependent on investor money and market confidence to survive. These firms are heavily reliant on a stamp of approval from the FDA in order for them to secure additional funding to continue or in order to get their one and only product on the market to start generating revenue.
Delays from the FDA in these examples are constantly analyzed and interpreted by market investors.