By: Heather VanBlarcom
General Counsel & Senior Regulatory Specialist for Dietary Supplements
Although many companies are aware of the need to have dietary supplement liability insurance, it is also important to be aware of how escalating FDA enforcement actions can affect said insurance. Failure to be in compliance with 21 CFR part 111 can result in grave consequences for the insuree, as your insurance company can increase your premiums or cancel your insurance based on FDA observations.
Regulatory compliance is important for all aspects of your business and is vital to the long term success of your company. One less obvious aspect of your business that could be adversely impacted by poor regulatory compliance is insurability. It is important to be aware that FDA’s increasing enforcement actions can have ramifications on your dietary supplement liability insurance.
Are you aware that there has been a mandatory reporting system requiring the self-reporting of any serious adverse events (SAEs) for dietary supplements sold and consumed in the United States since December 22, 2007? Moreover, the FDA has recently been out in force and increasing its inspection of companies for compliance with 21 CFR part 111. They are targeting not only manufacturers, but also own-label distributors (i.e. companies that market and distribute dietary supplements and use contract manufacturers for their manufacturing). The FDA has been demonstrating, through its increased activity, that it takes compliance very seriously. It goes without saying that you should as well.
You might be wondering what this has to do with your company’s insurability. It is important to remember the information you entered when completing your insurance applications for dietary supplement liability insurance. Such applications would have asked questions like, “Is the applicant aware of any fact, circumstance or situation which one might reasonably expect could give rise to a claim that would fall within the scope of the insurance being requested?” You need to consider this question very carefully as it pertains to adverse event reports (AERs). Failure to answer the question properly may result in denial of a claim or possibly even rescission of the policy. Another question common on most product liability insurance applications is, “Have any of the applicant’s products or ingredients or compounds thereof, ever been the subject of any investigation, enforcement, or notice of violation of any kind of any governmental, quasi-governmental, administrative, regulatory, or oversight body.” If you or your contract manufacturer has received a Form 483 or a Warning Letter or something worse as the result of a failed FDA inspection, this question would need to be answered in the affirmative.
Failure to be aware of and address these issues could really hurt your bottom line in numerous ways, such as a huge increase in your insurance premium or, an outright denial of your application which would certainly keep your dietary supplements out of any retail stores or, in the worst case scenario, the insurer rescinding your existing dietary supplement liability insurance policy at a time when you need it most – after a lawsuit is filed. As with most things in life, being proactive instead of reactive, particularly when it comes to regulatory compliance, will save you money in the long run and may be the difference between the success of your company or a slow, painful death.
dicentra provides regulatory and scientific solutions for accelerated business growth. We specialize in the areas of natural health products, dietary supplements, foods, cosmetics and OTCs We can assist your company in ensuring that you are in compliance with the regulations and advise you on corrective actions required. We can be reached at 1-866-647-3279 or firstname.lastname@example.org.