A Day Late and a Dollar Short: After Repeated Notices from FDA about its Contract Manufacturers, FDA Sends Warning Letter to Distributor for Receiving and Distributing Adulterated OTC Drugs

On November 6, 2019, the Food and Drug Administration sent a Warning Letter to an over-the-counter drug distributor for receiving and distributing OTC drugs produced by foreign manufacturers found to have serious violations of federal law. In the Warning Letter, FDA lists a number of violations of current good manufacturing practices by the contract manufacturers that the company used to produce private-label OTC drugs sold at its retail stores. These cGMP violations caused the drug products to be adulterated. The company’s receipt in interstate commerce of adulterated drugs, and the delivery of such drugs, was a violation of the Federal Food, Drug, and Cosmetic Act (FD&C Act).


The Warning Letter outlines a number of cGMP violations by the company’s contract manufacturers and suppliers; however, we will focus on those facts that we believe are of particular interest.

  • FDA inspected the company’s corporate headquarters in January 2019, following several inspections of its foreign contract manufacturers beginning in 2017. These inspections revealed serious cGMP violations and resulted in Warning Letters to the contract manufacturers. Several of the contract manufacturers were also placed on an Import Alert.
  • During the inspection the company noted that, if it were made aware of a Warning Letter issued to one of its suppliers or contract manufacturers, or if a product was placed on an Import Alert, it would not have continued to purchase from that supplier any longer. However, the import data showed that the company continued to use contract manufacturers and suppliers with “histories of significant drug [cGMP] violations,” despite being notified by FDA that Warning Letters had been issued to several of those companies.
  • The company directed its contract manufacturers and suppliers to use a specific contract laboratory to conduct release testing of the drug products prior to distribution. However, FDA inspected the contract laboratory and found multiple inadequacies related to the test methods employed. In addition, representatives of the contract laboratory informed FDA that its test methods were not suitable to make release decisions of drug products for distribution into the U.S. supply chain.
  • Although not included in the Warning Letter as a violation, FDA also noted that some of the products imported by the company are regulated as cosmetics. The agency stated that some of the sanitation conditions that cause OTC drugs to be adulterated may also cause cosmetic products to be adulterated under the FD&C Act.

AGG Observations

  • It is not unusual for FDA to issue a Warning Letter to a foreign contract manufacturer. However, it is unusual for FDA to issue a Warning Letter to a U.S. distributor based on violations by its suppliers and contract manufacturers. Here, the company appears to have failed to take any kind of action after receiving copies of the Warning Letters sent by FDA to its contract manufacturers and suppliers, which may have contributed to the agency’s decision to issue the Warning Letter.
  • This Warning Letter is a good reminder that distributors are ultimately responsible for ensuring that all of its products comply with cGMPs and are not adulterated (or misbranded or unapproved for that matter). Delegating manufacturing or testing operations to other companies does not exonerate a company from its regulatory requirements. This is true even if the company has a quality agreement in place. A good quality agreement, while recommended by FDA, will not relieve a company from complying with regulatory requirements (see our previous posts here and here).
  • As we always remind our clients, companies should monitor and routinely audit contract manufacturers and suppliers for compliance. While it may seem obvious, if FDA notifies a company that one of its suppliers or contract manufacturers has received a Warning Letter outlining serious cGMP violations, that firm should take steps to reevaluate that particular supplier or contract manufacturer, or stop using them immediately.
  • Companies must also have procedures in place to make sure that they are not using suppliers or contract manufacturers that have received Warning Letters or been placed on a FDA Import Alert (or if they do, recognize the regulatory risk). If a manufacturer is placed on Import Alert for failure to conform to cGMPs or has received a Warning Letter, this means that FDA has evidence that the products are violative.