Good News on FDA’s Phantom “Domestic Address” Requirement for OTC Drugs and Dietary Supplements; In a Tough Economy, Industry Could Save $84M – or More – by Doing Nothing

By Cassandra A. Soltis & Wes Siegner –  

Previously we have commented on FDA’s draft guidance originally issued on January 2, 2008 and recently reissued again in draft form on December 11, 2008 (here and here).  Both draft guidance documents assert that, in the Dietary Supplement and Nonprescription Drug Consumer Protection Act of 2006, Congress's use of the term "domestic address" in sections 403(y) and 502(x) of the Federal Food, Drug, and Cosmetic Act ("FDC Act") is “a clear and unambiguous directive” that all labels for dietary supplement and OTC drug products (other than those approved through the NDA process) be revised to permit consumers to report adverse events.  Industry has submitted numerous comments pointing out that FDA’s reading of the “domestic address” requirement is obviously flawed and contradicted FDA’s longstanding regulations, 21 C.F.R. §§ 101.5(d) and 201.1(a), requiring that all dietary supplement and OTC drug labels bear the “name and place of business” of the manufacturer, packer or distributor of the product.

FDA’s two February 24, 2009 Federal Register publications (here and here) estimate the cost in terms of hours of compliance with FDA’s draft guidance, which, according to a March 2, 2009 Tan Sheet article, FDA states is equivalent to just under $44M for dietary supplements and $40M for OTC drugs.  These estimates beg the question – why would there be any cost at all when FDA has issued its views in non-binding draft guidance, the views expressed in the draft guidance are flatly contradicted by existing FDA regulations, and there is little, if any, risk that FDA would ever enforce the “domestic address” requirement?  Those companies that understand the legal requirements and FDA’s enforcement options would likely choose to do nothing, for a cost of $0.

FDA’s labeling initiative is a flawed effort to badger the dietary supplement and OTC drug industries into making labeling changes that are irrational, both from a cost and a public health perspective.  FDA’s argument is that consumers, armed with a phone book or even the Internet, need more information than the name and place of business of the company to be able to report an adverse event, and that Congress recognized the problem and therefore used the term “domestic address” to clarify that the name and place of business was insufficient.  This argument ignores the lack of any evidence of congressional intent as well as the intent of FDA’s “name and place of business” regulations, which are also aimed at company contact and have successfully achieved that goal for decades.  In addition, FDA’s view runs counter to the increased access to contact information in the modern world, and the ability of consumers to report adverse events to medical professionals and to FDA, should they somehow be unable to locate the company or, as is usually the case, prefer not to report to the company.  The labeling changes FDA seeks would have no effect on consumer reporting, but would cost industry millions.

Finally, industry should understand that the closing sentence of both draft guidances, that “FDA intends to begin enforcing the [labeling] requirements . . . on or after January 1, 2010,” is either a bluff or was written by someone who does not understand the non-binding nature of FDA guidance (see 21 C.F.R. § 10.115(d)(1)).  Any effort to enforce the “domestic address” requirement would be at least an implied threat of litigation, which would force the agency to confront several major obstacles, not the least of which is the logic of its own existing “name and place of business” regulations and the non-binding nature of FDA’s guidance, all for a cause that must be of questionable merit even to those within the agency.  Even assuming FDA might push to enforce the requested label changes, convincing attorneys at the Department of Justice that such a case would be worth bringing would be difficult, if not impossible.  The risk of litigation would be at best remote, and therefore the threat of litigation of little use as an enforcement tool.

The most likely outcome of FDA’s labeling initiative is that there will be little if any change in labels and therefore no cost to industry.  These days, no added costs would be very good news.