Why Should You Close Out a Form 483 Observation Notice or Warning Letter?

Warning Letter closeout

Why Should You Close Out a Form 483 Observation Notice or Warning Letter?

We’ve heard over the years frequent enough advice given by some other GMP/FDA consultants (and even some lawyers) to companies in the food and supplement sectors, to not petition to close out a Form 483 or Warning Letter, should one get issued. Think about that for a minute! What? Why not, pray tell? Allegedly it’s an “invitation for the Agency to come back sooner,” but that is severely flawed logic for several reasons. Since we aren’t mind readers and can only speculate as to their real motivations behind giving such poor business advice, rather what we can do is give some legit reasons and insights to carefully consider for why you should take such regulatory actions seriously and work to close them out properly, albeit aggressively. 

If you’ve never been through an FDA inspection, they ain’t fun folks. They are very stressful for everyone involved, especially if you don’t have a robust and efficient quality/compliance program. The FDA DOES NOT CARE if you have a GMP Certificate on the wall, or if your vendor does either! Rest assured, this will be a future topic to expand on. If the Agency has only sent you a deficiency notice e.g. for website claims, no FSVP, etc., just know, you are on their radar. Unfortunately, they don’t care how small a company you may be, if the company is under new management, if the company has just moved, if you run your business out of your home, or whatever personal hardships exist(ed) for not operating in compliance at the time of inspection/notice – they just want your operations and labeling to be compliant, so there are safe and compliant products in the marketplace, period. 

Here are several of the key reasons to be aware of when it comes to your business and brand, in dealing with a regulatory action: 

1. Brand damage - Google and other search engines are magical at ensuring the Warning Letter or related regulatory actions remain on the first page. Nothing challenges customer loyalty and erodes consumer confidence in a brand like an open warning letter directly citing things that go contrary to what is being claimed on the website 
2. Loss of business – It is not just the damage to the brand as it is with the loss in revenue from customers, but also distributors and major retailers. Likelihood of getting your brand dropped or put on hold, way high! 
3. Insurance premiums go up (or denial of any claims surrounding compliance requirements) – Nothing like incurring additional unnecessary costs owing to a warning letter being issued that you’ll have to report come your next renewal. Don’t report it or check all the boxes and likely you’ll get your claim denied when you really need it. 
4. Recall possibility - Whether voluntary or not, these are stressful and expensive, and wasteful generally speaking. It’s not just about the safety of the ingredient or finished product, and going through the process when it was otherwise easily preventable, makes no business sense. If you don’t have the right insurance, it’s another big loss on the books. 
5. Unexpected employee turnover – Going back to stressing everyone out, if there isn’t a Quality Mindset from the top down, there’s no better way to compromise the trust your employees have in the company and processes, so don’t be surprised if good talent checks out on you during the process. 
6. Unprecedented costs (Regulatory Consultants, Laboratory, Reworks, etc.) – It is not cheap, so do it right the first time! 
7. DWPEs – For those that import ingredients or finished products into the US, once you get tagged with a Warning Letter, if not handled right it is just a matter of time before a Detention Without Physical Examination notice gets issued. If you don’t know about automatic import detentions or being on the “Red List,” you really don’t want to. 
8. Funding/Acquisition Delays or Failures - So when everyone is supposed to be doing their due diligence to raise money or get bought, a 483 or Warning Letter will go a long way to compromising the deal, delaying it at minimum, or diminishing your negotiating power. 
9. Lawsuits or Class actions - The single most common action that gets brands compliant more than any regulatory action is getting sued for non-compliance issues, whether it be claims, product complaints, etc. Most of which, settle before ever going to court, but even if it doesn’t get into the public domain…why expose yourself to such risk? 

All issued 483s and Warning Letters eventually get published in the public domain, so it’s just a matter of time, and once published, they don’t get unpublished. Thus, the importance of attaining a “Close Out” letter, is that it gets published and linked to the original inspection report or regulatory notice. While some Agents are incredibly helpful, others are not so much, and bottom-line their job is not to help you out of the situation or resolve the matter for you…that’s not how it works. Furthermore, the Agency knows how long it takes to get things in place and compliant, implemented properly, and fully trained up, so making up erroneous or egregious time commitments of say six months to complete procedures or protocols that only take a week or so to be made effective, will all just count against you in the overall course of things, not to mention only further escalate the matter triggering a Regulatory Meeting, subsequent Warning Letter being issued, Voluntary/Mandatory Recall, DOJ Action, etc.  

All that said, you should know what the real consequences are to your business upon receiving a regulatory action letter and what your true liabilities are while it is still open.