FDA corrects earlier statements on company size determination for cGMP compliance: Only “directly” employed to be counted

(March 3, 2008, Silver Spring, MD) — In a letter dated February 27, 2008, and addressed to Michael McGuffin, president of the American Herbal Products Association, the Food and Drug Administration has clarified that the compliance date for the final rule on dietary supplement cGMP (current good manufacturing practice) “will be determined by the number of employees [a company] directly employs.”

The cGMP rule was published on June 25, 2007, and comes into effect over the next three years. The specific compliance date for each dietary supplement company depends only on its number of full-time equivalent employees (FTEEs). But FDA has made statements in various public forums that have suggested that each affected business would need to determine its number of employees — and thus its compliance date — by counting not only its own employees, but also those of all other companies that manufacture its products on a contractual basis. For example, in response to questions on this subject at an FDA “webinar” on October 24, 2007, FDA replied that a company’s own employees and those of its contract manufacturers “would all be additive.”

“In AHPA’s view this interpretation was simply wrong,” noted McGuffin. “There is no precedent for such an approach, and it would have resulted in many more small manufacturers being forced into accelerated compliance with the rule.”

FDA’s February 27 letter was in response to a letter from AHPA that posed several questions and scenarios to seek clarification on the issue. FDA’s response acknowledged that it’s statements at the earlier webinar “seem[s] to be contrary to the intent of the regulation,” and noted its revised conclusion that “the general rule is that a firm that hires an independent contractor to perform any of its manufacturing functions does not add the number of the contractor’s employees to its total for compliance purposes.”

“AHPA appreciates FDA’s willingness to set the record straight on this important detail,” commented McGuffin.

Based on FDA’s clarification of this point, compliance dates for the final cGMP rule on dietary supplements will be:

§ Companies directly employing 500 or more FTEEs: June 25, 2008;

§ Companies directly employing fewer than 500, but 20 or more FTEEs: June 25, 2009;

§ Companies directly employing fewer than 20 FTEEs: June 25, 2010.

FDA’s February 27 letter can be found at www.ahpa.org/portals/0/pdfs/08_0227_Williams(FDA)_Reply_EmployeeCount.pdf

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