Will FDA's Permanent Injunction on ATF Have a Ripple Effect? (UPDATED)

The holidays are typically a barren period for news, because most publications are in shutdown mode or understaffed. So, it was odd that the FDA dropped a headline as most of us had one foot out the door for the long Thanksgiving weekend.

On Wednesday, FDA filed a permanent injunction against ATF Fitness Products Inc. (ATF), Manufacturing ATF Dedicated Excellence, Inc. (MADE), and James G. Vercellotti of Oakmont, Pa., who owns both companies.

According to the agency, the defendants "substitut[ed] ingredients and products without noting the changes on the final product labels." This is the first time FDA has taken legal action against a company this size. The injunction, filed on FDA's behalf by the Department of Justice, would stop the defendants from "making and distributing more than 400 products for being in violation of the Federal Food, Drug, and Cosmetic Act."

There's more, and it's not good:

Two things occurred to me when I saw this news release. First, that's good for FDA, who gets to show that they mean business. Second, what effect would this have on the supplements industry? Specifically, would morally wayward companies feel compelled to polish up their acts?

FDA's action "should be a serious wake-up call to any other companies similarly practicing such illegal manufacturing procedures," said Elliott Balbert, president and CEO of Revo Biolabs. He referred to the company's manufacturing procedures as "also unethical and, in my view, immoral. Hopefully, they will be the recipients of the full force of our legal system."

Joy A. Joseph, president and founder of Joys Quality Management Systems, also referred to the injunction as a wake-up call. "Dietary supplement companies will now know that FDA is serious about compliance," she said. "They will know that they may not be out of the woods just because they have not had a response from FDA regarding their corrective action plans. The percentage of companies that have not fully implemented Dietary Supplement Good Manufacturing Practices is still too high. We have already passed the compliance dates set for all companies to be fully compliant. Companies need to be open and honest with regulators. If the regulations are not clear and there is uncertainty about compliance issues, get help."

Industry attorney Ashish Talati, a frequent SupplySide Community blogger, said size does not matter when it comes to FDA enforcement. "We have seen increased GMP inspections within all FDA districts and oftentimes the companies involved are small businesses with, in some instances, one or two employees and under $1 million in revenue," Talati said. "FDA takes GMP compliance very seriously as they should. We expect the stepped up enforcement activity to continue indiscriminately for all companies including both big and small businesses."

Others I reached out to weren't so optimistic. Anthony Almada, another SupplySide Community regular and the president/CEO of GENr8, Inc., said what happened to ATF and MADE will "make people more tentative and short-term scared." But as long as "infringement greatly, greatly eclipses enforcement" and desperate customers "buy into the evangelist trade," Almada said bad actors will still prosper. 

"About time," said Eric Anderson, vice president, sales and marketing at Aker BioMarine Antarctic U.S, adding that, "our industry is still rampant with outliers." Too many companies, he said, are still following a "garbage-in, garbage-out" principle of manufacturing. 

Did FDA help make the supplement industry safer and more law abiding? Or is this much ado about nothing? Please comment.     

UPDATE: On Friday, U.S. marshals, at the request of FDA, seized dietary supplements and drugs manufactured by Syntec, Inc. This release explains more. Note how the company received a warning letter two years ago. The lesson for all companies: If FDA documents you for a federal violation, fix it (legally) or fold up shop.  Don't assume there's a statute of limitations or investigators lost the paperwork.