United States: FDA Form 483 Inspectional Observations Are Not Findings of Wrongdoing

In light of FDA's stated position on Form 483, as well as the extensive case law on point, Form 483 inspectional observations should not be treated as FDA findings of wrongdoing or of final agency action.

Since shortly after the U.S. Food and Drug Administration ("FDA") began publishing FDA Form 483 inspectional observations of Section 503B outsourcing facilities, many State Boards of Pharmacy have inappropriately relied upon the FDA's findings as a basis to pursue outsourcing facilities for violations of state law. In light of this recent trend, this Alert provides background on FDA Form 483 and an overview of the legal authority demonstrating that Form 483 inspectional observations are not final agency action and do not represent a finding of wrongdoing.

Background on Form 483

FDA is permitted to conduct inspections of "outsourcing facilities" under Section 503B of the Federal Food, Drug, and Cosmetic Act ("FDCA"). The FDCA provides that FDA may "at reasonable times and within reasonable limits ... [inspect] all pertinent equipment, finished and unfinished materials, containers, and labeling therein ... . The inspection shall extend to all things therein (including records, files, papers, processes, controls, and facilities ... ." 21 U.S.C. § 374(a). Upon completion of these inspections, FDA provides the representative of the outsourcing facility with a so-called "Form 483" that contains FDA's inspectional observations.

FDA also publishes Form 483 inspectional observations on its website for public review. In certain circumstances, FDA will even communicate its findings directly to the State Boards of Pharmacy. State Boards, in turn, have been known to use FDA's Form 483 inspectional observations as a basis to conduct their own investigations of outsourcing facilities. State Boards will frequently cite to FDA's Form 483 inspectional observations as the source for their own allegations of wrongdoing under provisions of state law. Outsourcing facilities, therefore, face an outsized risk of incurring penalties under state law each time FDA conducts an inspection and issues a Form 483.

Form 483 Is Intended to Teach, Not to Punish

Form 483 does not represent a finding of wrongdoing by FDA and is not intended to be a final agency action. This is apparent from the form itself, which states that:

This document lists observations made by the FDA representative(s) during the inspection of your facility. They are inspectional observations, and do not represent a final Agency determination regarding your compliance. If you have an objection regarding an observation, or have implemented, or plan to implement, corrective action in response to an observation, you may discuss the objection or action with the FDA representative(s) during the inspection or submit this information to FDA at the address above. ... 

FDA Form 483 (emphasis added). FDA further clarifies the weight of Form 483 on its website, providing that: "The FDA Form 483 does not constitute a final Agency determination of whether any condition is in violation of the FD&C Act or any of its relevant regulations."[1] 

Rather, Form 483 is merely a mechanism for FDA to communicate compliance concerns to an outsourcing facility. Form 483 does not contain any express findings of violations of federal law, and it does not provide punishment for such violations. Notably, FDA states in its Inspectional Operations Manual that "[t]he FDA 483, Inspectional Observations (see Exhibit 5-5) is intended for use in notifying the inspected establishment's top management in writing of significant objectionable conditions, relating to products and/or processes, or other violations of the FD&C Act and related Acts (see IOM 5.2.3.2) which were observed during the inspection."[2] In other words, Form 483 inspectional observations are meant to prompt an outsourcing facility to take corrective action to avoid additional agency action that would necessarily include determinations of wrongdoing and punishment. A Form 483 is not meant to signify a finding of fault.

Federal courts support the treatment of Form 483 inspectional observations as an instrument of notification, rather than as final agency action. See e.g., In re Genzyme Corp. Sec. Litig., 754 F.3d 31, 35 (1st Cir. 2014) ("A Form 483 contains advisory language that make clear it lists only 'inspectional observations and do[es] not represent a final agency determination regarding your compliance'"); City of Pontiac Gen. Employees' Ret. Sys. v. Stryker Corp., 865 F. Supp. 2d 811, 825 (W.D. Mich. 2012) (citing the FDA Form 483 Frequently Asked Questions website as authority for the proposition that "[t]he FDA Form 483 does not constitute a final Agency determination of whether any condition is in violation of the FD&C Act or any of its relevant regulations"); and In re Omnicare, Inc. Sec. Litig., No. 11-CV-173-DLB-CJS, 2013 WL 1248243, at *12 (E.D. Ky. Mar. 27, 2013), aff'd, 769 F.3d 455 (6th Cir. 2014) (holding that a Form 483 is not final agency action and stating "Form 483 merely notifies the company's management of objectionable conditions. It does not constitute a final agency determination of whether any condition violates the law."). State Boards of Pharmacy, therefore, should not consider Form 483 inspectional observations to constitute any final determinations of wrongdoing. 

Conclusion

In light of FDA's stated position on Form 483, as well as the extensive case law on point, Form 483 inspectional observations should not be treated as FDA findings of wrongdoing or of final agency action. Those outsourcing facilities faced with actions by a State Board of Pharmacy should be made aware of the legal weight of a Form 483 inspectional observation and consider objecting to the use of such observations as a basis to find legal wrongdoing under state law.


[1] FDA Form 483 Frequently Asked Questions (available at: http://www.fda.gov/ICECI/Inspections/ucm256377.htm). FDA recently reiterated this position in its notice changing FDA's procedure for inspection of Section 503A pharmacies. Notice to Advise of a Change in the U.S. Food and Drug Administration (FDA)'s Procedure for Inspections of Entities That Are Seeking to Compound Human Drugs in Accordance with Section 503A of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (available at: http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/PharmacyCompounding/UCM510684.pdf).

[2] FDA Inspectional Observation Manual, Section 5.2.3 - REPORTS OF OBSERVATIONS (available at: http://www.fda.gov/downloads/ICECI/Inspections/IOM/UCM150576.pdf).


For Further Information

If you have any questions about this Alert or would like more information, please contact Rachael G. Pontikes, Emily L. Hussey, John D. Kendzior, any of the attorneys in our Pharmaceutical, Medical Device, Pharmacy and Food industry group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.

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