Recently, a New York-based dietary supplement manufacturer (and its subsidiaries) issued a nationwide recall of all lots of dietary supplement products manufactured and sold between January 2013-November 2019. Because the manufacturer previously supplied dietary supplements to a large number of U.S. dietary supplement brands, the recall may apply to dietary supplements marketed by about 850 U.S. dietary supplement brands.

The recall is a result of a consent decree entered in the U.S. District Court for the Eastern District of New York. The consent decree bars three corporations, ABH Nature's Products, Inc., ABH Pharma, Inc., and StockNutra.com, Inc. (together, ABH), each of Edgewood, New York, and their owner, Mohammed Jahirul Islam (Islam), from distributing adulterated and misbranded dietary supplements and unapproved and misbranded drugs, and requires the defendants to take remedial action, including the recall.

The consent decree resulted from an earlier filed complaint, in which the defendants were alleged, in addition to adulterating and misbranding dietary supplements, to have violated good manufacturing practices under 21 C.F.R. § part 111 and 21 U.S.C. § 342(g)(1). Dietary supplements not prepared, packed, or held in conformance with current good manufacturing practice (cGMP) regulations are deemed to be adulterated under the Federal Food, Drug, and Cosmetic Act (the FDCA).

Among other things, the complaint asserted that during a 2018 inspection, a U.S. Food and Drug Administration (FDA) inspector observed the following deviations from cGMP regulations:

• Failure to conduct at least one appropriate test to verify the identity of a dietary ingredient;
• Failure to verify that finished batches of dietary supplements meet product specifications for identity, purity, strength, and composition;
• Failure to implement a system of production and process controls that covers all stages of manufacturing, packaging, labeling, and holding of dietary supplements to ensure the quality of the dietary supplement;
• Failure to include required information in batch production records; and
• Failure to properly review and investigate a consumer complaint.

The complaint was preceded by a number of earlier interactions with the FDA. For example, ABH Nature's Products, Inc. (ABH), was inspected multiple times beginning in 2010. ABH received a warning letter in 2012 from the FDA which included citations for cGMP violations. In fact, many of the violations in the warning letter are mirrored in the complaint. And the recall time span (e.g., January 2013-November 2019) comports with the long violation history.

The terms of the consent decree are stark and broad reaching, for both products and those associated with the company. For example, the consent decree, among other things, requires that:

• Defendants recall and destroy, under FDA's supervision … all dietary supplements (including components, raw and in-process materials, and finished products) and drugs (including components, raw and in-process materials, and finished products) that were received, manufactured, prepared, packed, repacked, labeled, held, or distributed between January 1, 2013, and the date of entry of this Decree;
• Defendants and each and all of their directors, officers, agents, representatives, employees, attorneys, successors, and assigns, and any and all persons in active concert or participation with any of them, who have received actual notice of this Decree by personal service, or otherwise, are permanently restrained and enjoined … from directly or indirectly receiving, manufacturing, preparing, packing, repacking, labeling, holding, or distributing any articles of food (including but not limited to dietary supplements and their components) at or from 131 Heartland Boulevard, Edgewood, New York, or at or from any other location(s) at which defendants now or in the future directly or indirectly receive, manufacture, prepare, pack, repack, label, hold, or distribute any articles of food (including but not limited to dietary supplements and their components) (hereafter, "Defendants' Facility" or "Facility"), unless and until the corrective measures outlined in the consent decree are fully met.

These corrective measures include, for example, that defendants retain, at the defendants' expense, an independent person (the cGMP Expert), who is without any personal or financial ties (other than a retention agreement) to defendants and/or their families, and who, by reason of background, training, education, or experience, is qualified to inspect the facility to determine whether the facility, methods, processes, and controls are operated and administered in conformity with dietary supplement cGMPs.

The complaint and consent decree represent a different approach to regulating dietary supplements for the FDA and the Department of Justice (DOJ). Rather than pursuing individual dietary supplement manufacturers on a case-by-case basis, the FDA and the DOJ have—in this instance—gone after a major supplier to about 850 dietary supplement brands.

ABH and its affiliates do not directly sell dietary supplements to consumers. Rather, ABH and its affiliates provide dietary supplements to about 850 brands in the U.S. Thus, the consent decree not only impacts ABH and its affiliates, but potentially impacts all of these about 850 brands. Several consultants, taking into account the scope of affected companies, and the recall period spanning January 2013-November 2019, have characterized the recall as "unprecedented."

Thus, any company that manufactures dietary supplements should be keenly aware of, and in compliance with cGMP regulations. And any company that purchases dietary supplements, or their ingredients, from a contract manufacturer, should fully perform due diligence of the manufacturer, both before and during the term of the supply agreement, and have a "Plan B" should the manufacturer end up in a situation similar to that recited in the consent decree. Important elements of that diligence should include contract provisions, such as indemnification, insurance, and auditing.

Further, even if a dietary supplement manufacturer is in compliance with regulatory laws and regulations, patent issues such as freedom to operate can also prevent a dietary supplement manufacturer from selling their dietary supplement in the U.S., and may even require the manufacturer to pay patent infringement damages.

Our take-home message: regulatory, patent, and transactional counsel are essential partners for dietary supplement manufacturers and distributors who intend to do business in the U.S. and wish to minimize the possibility of running afoul of the FDA, the DOJ, and the Federal Trade Commission (FTC). For questions associated with dietary supplements, please contact Vern Norviel, David Hoffmeister, Georgia Ravitz, Farah Gerdes, or any member of Wilson Sonsini's patents and innovations or FDA regulatory practices.