Inspections, Compliance, Enforcement, and Criminal Investigations
SUBCHAPTER 4.2 - DEALER RELATIONS
4.2 - DEALER RELATIONS
4.2.1 - DEALER DEFINITION AND GOOD WILL
4.2.2 - DEALER OBJECTION TO SAMPLING PROCEDURE
4.2.3 - REFUSAL TO PERMIT SAMPLING
4.2.4 - NOTICE OF INSPECTION
126.96.36.199 - Dealer Responsible For Condition of Lot
188.8.131.52 - Refusals
184.108.40.206 - Carrier In-Transit Sampling
220.127.116.11 - Dealer Requests Notice of Inspection
4.2.5 - RECEIPT FOR SAMPLES
18.104.22.168 - Carriers/In-Transit Lots
22.214.171.124 - Dealer Requests Receipt
126.96.36.199 - Narcotic and Controlled Rx Drugs
188.8.131.52 - Prescription Drugs (Non-Controlled)
184.108.40.206 - Preparation of FDA 484
220.127.116.11 - Routing of FDA 484
4.2.6 - DEALER IDENTIFICATION OF LOT AND RECORDS
18.104.22.168 - Private Individuals
22.214.171.124 - Seriously Ill Individuals
4.2.7 - SAMPLING FROM GOVERNMENT AGENCIES
4.2.8 - PAYMENT FOR SAMPLES
126.96.36.199 - Post Seizure (P.S.) and Reconditioning Samples Under Court Order
188.8.131.52 - Determining Sample Cost
184.108.40.206 - Method of Payment
220.127.116.11.1 - Costs Billed To District
18.104.22.168.2 - Cash Payment
22.214.171.124 - Sampling - Labor Charges
4.2.9 - VOLUNTARY EMBARGO
126.96.36.199 - Perishable Goods
188.8.131.52 - Obtaining a Voluntary Embargo
4.2.1 - DEALER DEFINITION AND GOOD WILL
For sample collection purposes, the dealer is the person, firm (which could include the manufacturer), institution or other party, who has possession of a particular lot of goods. The dealer does not have to be a firm or company, which is in the business of buying or selling goods. The dealer might be a housewife in her home, a physician, or a public agency; these dealers obtain products to use but not to sell. The dealer may be a party who does not own the goods, but has possession of them, such as a public storage warehouse or transportation agency.
Rapport with the dealer is important to the success of your objective. All dealers, including hostile ones, should be approached in a friendly manner and treated with fairness, honesty, courtesy and consideration. A dealer may be called as a Government witness in a court case, and a favorable attitude on his/her part is to be sought. Never use strong-arm tactics or deception, but rather be professional and demonstrate diplomacy, tact, and persuasion. Do not make unreasonable demands.
Introduce yourself to the dealer by name, title and organization; present your credentials for examination, and, if appropriate, issue an FDA 482, Notice of Inspection. See IOM 184.108.40.206, 4.2.4, 220.127.116.11 and 5.2.2. Explain the purpose of your visit. Be prepared to answer the dealer's questions and attempt to relieve any apprehensions while at the same time being careful not to reveal any confidential information. Do not disparage the product, its manufacturer, or shipper. Do not reveal the particular violation suspected unless the dealer is responsible, or unless you ask him/her to voluntarily hold the goods. The very fact we are collecting a sample is often reason enough to arouse the dealer's suspicions about the legality of the product.
If the dealer objects to your proposed sampling technique, attempt to reach a reasonable compromise on a method that will provide a satisfactory, though perhaps not ideal, sample. Assure the dealer that you will make every effort to restore the lot to its original state, that you are prepared to purchase a whole unit to avoid leaving broken cases, and that the Agency will reimburse him/her for additional labor costs incurred as a result of sampling. See IOM 4.2.8. If a reasonable compromise cannot be reached, proceed as a refusal to permit sampling.
Challenges to FDA authority while collecting samples may be encountered by a dealer who, for various reasons including, personal and professional, opposes the activities of the Agency, or of governmental units in general.
Refusals to permit sample collection commonly emerge unless you can identify a section of the law which specifically authorizes it. The suggested approach for dealing with these individuals is to use patient, tactful persuasion, pointing out that the sample is a part of the investigations authorized in Section 702(b) of the FD&C Act [21 U.S.C. 372(b)]. If you have not already done so, issue an FDA 482 - Notice of Inspection as soon as it becomes apparent the dealer will continue to object. Point out and discuss the authorities provided by FD&C Act sections 702(a), 702(b), 704(a), 704(c), 704(d) [21 U.S.C. 372(a),(b), 374(a), (c), (d)] and the precedent case mentioned in IOM 2.2.1. If refusal persists, point out the criminal prohibitions of Section 301(f) of the FD&C Act [21 U.S.C. 331(f)].
If samples are still refused, leave the premises and contact your supervisor immediately. Refer to IOM section 5.2.4 and Compliance Policy Guide manual section 130.100 for further discussions on resolving the impasse.
Each time you issue an FDA 482, Notice of Inspection, and subsequently collect a sample, issue the appropriate sample receipt (FDA 472 - Carriers Receipt for Samples or FDA 484 -Receipt for Samples).
An FDA 482 should be issued before collecting samples from firms, carriers, or individuals whom FDA can take regulatory action against for the violative condition of the lot. See IOM 18.104.22.168. When in doubt, issue a Notice of Inspection. If there is no EIR, attach a copy of the FDA 482 to the printed FACTS Collection Record. See IOM 22.214.171.124.
See IOM 4.2.2. An FDA 482 must be issued in all sample refusal situations to invoke the applicable provisions of the FD&C Act. The copy of the FDA 482 is to accompany the EIR or a memorandum outlining the facts of the refusal if no EIR is prepared.
Caution: See IOM 4.3.4 for conditions, which must be met before collecting in-transit samples from common carriers.
When collecting samples from in-transit lots in possession of a commercial carrier, and the only regulatory sanctions possible are against the product itself or parties other than the carrier (e.g., manufacturer, shipper, etc.), furnish the carrier or his agent an FDA 482 modified by hand writing "Samples Only" at the top. Attach a copy to the printed copy of the FACTS Collection Record. See IOM 126.96.36.199.
When inspecting a dealer, and an FDA 482 does not need to be issued, but the dealer requests a Notice of Inspection, issue an FDA 482 modified by hand writing "Samples Only" at the top. Attach a copy to the printed FACTS Collection Record. See IOM 188.8.131.52.
Any time you collect a sample after issuing an FDA 482, Notice of Inspection, always issue the appropriate sample receipt FDA 472 - Carriers Receipt for Samples or FDA 484 Receipt for Samples.
Caution: See IOM Exhibit 4-4. Give the original to the carrier or his agent and route a copy to the appropriate fiscal unit for your district. The fiscal clerk will notify the consignee and consignor that a sample has been collected so the owner can, if desired, bill FDA for the sample.
When collecting physical samples of regulated products, not in connection with an EI or where no FDA 482 has been issued, do not routinely issue an FDA 484, Receipt for Samples, except for prescription drugs, narcotics, or controlled substances. See IOM 184.108.40.206 and 220.127.116.11. If any dealer specifically asks for a receipt, prepare and issue an FDA 484 and route a copy with any other records associated with the collection record. See IOM 18.104.22.168.
Regulations of the Drug Enforcement Administration (DEA) impose strict controls and comprehensive record-keeping requirements on persons handling narcotics and controlled substances. As a result, an FDA 484 must be issued for all samples of such drugs collected by FDA.
Each dealer in narcotic and controlled drugs is assigned its own unique DEA registration number. Any time you collect a sample of a narcotic or controlled drug, be sure the Dealer's DEA Registration Number is entered in the appropriate block of the FDA 484. Double-check the number for accuracy. An error may result in possible investigation for drug shortages.
When samples of narcotic or controlled drugs are collected, the complete DEA Registration Number must be entered on the - RECEIPT FOR SAMPLES, given to the person from whom the samples were collected.
Concise completion of the FDA 484 for samples of narcotic or controlled drugs includes the trade and chemical name, strength, sample size, container size, lot, batch, or control number, manufacturer's name and address, district address and the sample number. See IOM 22.214.171.124. See IOM 126.96.36.199. Use of the FDA 484 as a Receipt for Samples of these drugs has the approval of DEA. (See reverse of FDA 484).
Issue an FDA 484, Receipt for Samples, when samples of prescription legend drugs are collected from dealers, individuals, or during inspections. Attach a copy of the FDA 484 to the printed FACTS Collection Record. See IOM 188.8.131.52.
Complete the blocks on the FDA 484 (Exhibit 4-5), Receipt for Samples, as follows:
Block 1 - Enter your District address and telephone number including area code.
Block 2 - Enter the complete name and official title of the individual to whom you issue the FDA 484.
Block 3 - Enter date on which you finished collecting the sample. If you spent more than one day on the sample collection, enter the date you completed sampling.
Block 4 - Enter complete Sample Number here. Be sure to include any prefixes such as "DI", "INV", etc.
Block 5 - Enter firm's legal name.
Block 6 - If the firm is a dealer in narcotics or control drugs, enter their DEA Number here.
Block 7 and 8 - Enter number, street, city, state, and zip code of firm.
Block 9 - Enter a brief description of the article collected, including the number and size of units collected, product name and any identifying brand and code marks.
Block 10 - Check the appropriate box on the FDA 484.
Block 11 - Enter the amount paid for the sample (even if borrowed, the owner may ask rent for it) and check the appropriate box. If there is no charge (always offer payment except for Post Seizure Samples), enter N/C and leave boxes blank. If, as a last resort, it is necessary for you to use your personal check or credit card and this is acceptable to the person, enter amount and check "Credit Card." box.
NOTE: Older editions of the FDA 484 do not have a "Credit Card." box. If using older editions, write "Credit Card" following the sample amount.
Block 12 - In instances where payment is made for the Sample, whether actually purchased, borrowed or provided at no charge, and there is no Dealer's Affidavit or any other document executed to show the owner's signature for receipt of payment, obtain the signature of the person receiving payment for the sample.
If Dealer's Affidavit, regular Affidavit or other document is used, the recipient's signature will be on that document so it is not necessary for him to also sign the FDA 484. In this case insert an applicable statement such as "Dealers Affidavit signed" in this block.
Blocks 13, 14, and 15 - Enter your name, title and signature.
Original - Give the signed original to the firm, preferably to the individual to whom you gave the FDA 482 and FDA 483. See IOM 184.108.40.206 regarding receipts for narcotics and controlled drug samples.
First Carbon - Accompanies the EIR. If no EIR is involved such as when collecting a sample and the dealer specifically requests a receipt, attach it to the original Collection Record. See IOM 220.127.116.11, 18.104.22.168, and 22.214.171.124.
Second Carbon - This is an extra copy for use as needed. If not filed in the factory file, or attached to the C/R or not otherwise needed, it may be destroyed.
If exact copies are used instead of carbon copies, then route one exact copy with the EIR and a second as above.
When numerous subsamples are collected, the second carbon or exact copy may be attached to the original C/R to avoid repetition of the sub descriptions. When used for this purpose, be sure the numbers you assign to the physical subsamples matches those on the FDA 484, and that the subs are adequately described. See IOM Exhibit 4-5. If errors are noted after issuance, handle the same way as instructed under IOM 126.96.36.199.6.1 and IOM 188.8.131.52.6.2.
Positive identification of sampled lots and the records covering their sales and shipment are essential to legal proceedings. The dealer's identification of a sampled lot and his identification of the records covering I.S. shipment should be factual and specific. If there is a question about accurate identification of the lot or records, determine all facts and establish identification as clearly as possible. Be alert to any identifying marks, which may later be used on the witness stand for positive identification.
When collecting Official Samples from private individuals, ask the individual to initial and date the label, wrappings, promotional literature, etc. This will aid in positively identifying the product and related documents in any court proceedings that may develop months, or even years later.
If you collect samples from a person for contemplated regulatory action, and it is obvious the person is seriously ill, you should attempt to locate and obtain a corroborating statement and identification from someone else. This corroborating witness should have personal knowledge of the facts and be available if the principle witness cannot testify in a legal proceeding.
See IOM Subchapter 3.2 for sampling information specific to Other Government Agencies (OGA).
Payment for all samples, except those collected under authority of a Court Order or Decree, shall be offered to the person from whom the sample(s) were obtained regardless of the amount. See IOM 184.108.40.206.
An exception is import samples. FDA does not pay for Import samples at the time of collection. The importer should bill the District Office. FDA will not pay for violative import samples. See 21 CFR 1.91.
Do not pay for, or offer payment for, any Post Seizure (P.S) or other samples including those from reconditioned lots, if collected under authority of a Court Order or Decree. If the dealer insists on payment before permitting sampling, show him/her the Court Order. If he/she still refuses sampling, contact your supervisor immediately for further instructions. You may be instructed to notify the U.S. Attorney.
If you are collecting samples from firms or representatives of firms who have Federal Supply, Veterans Administration or other contracts with the Federal Government, the cost of the sample should be determined by the scheduled price. Inquire of the firm if they are on contract for the item. If so, pay only the scheduled price.
Some dealers may wish to charge their regular selling price. However, if the cost of the sample seems exces-sive, try to persuade the dealer into charging a lower price that is more equitable. If asked, inform the dealer that the government considers a fair price to be the dealer's invoice cost plus a nominal charge (usually 10-15%) for freight, handling and storage.
If unable, through tactful discussion, to convince the dealer to lower the sample cost, do not haggle over the price to be paid. If the cost seems exorbitant, check with your supervisor to determine if the sample size can be reduced, or for further instructions. Whenever there is a disagreement over sample cost, ask the dealer to bill the district and report the circumstances in the Collection Remarks field on your FACTS collection record.
If districts encounter requests for payment for method validation samples (either direct submission by firms to labs or during collection from responsible firms), they should contact the appropriate Office of New Drugs CDER, or CVM, so that communication may take place with the application sponsor. If product is being collected from commercial distribution not in the control of the sponsor/manufacturer, then the district should expect to pay wholesale cost. Expenses for NDA method validation samples should be charged to a PDUFA reimbursable CAN.
There are two ways to pay for samples. The sample costs may be billed to the district or cash may be used to pay for the sample.
Billing sample costs to the district is, in many instances, the most practical method of payment. This is particularly true where substantial costs are involved due to large sample size, expensive samples, when samples are collected from third parties such as carriers and public storage warehouses, or when delivery followed by subsequent billing is the dealers normal business practice. If available, obtain the dealer's invoice and submit it to the appropriate fiscal unit for your district.
Sampling from public storage warehouses and common carriers incurs costs, which are normally billed because the owner of the product is unavailable. Determine the identity of the owner or his agent, and estimate the value of the goods sampled. Arrange with the owner or agent to bill the district.
If you have a government credit card and you need cash to pay for a sample, you are authorized to use your government credit card to withdraw an ATM advance to pay for your sample whether or not you are in travel status. The amount of the withdrawal should be limited to the cost of the sample. You should submit your itemized claim for samples along with the ATM fee by submitting a local voucher using GovTrip. Include the sample number and submit to your fiscal unit for payment. Any documentation should be provided. Sample costs cannot be charged directly to your government credit card.
Additional labor, use of forklift, or other assistance may be required to move merchandise, skids, pallets, etc., to properly sample and restore the lot. Usually assistance will be available on the premises, or arrangements can be made with management to employ outside professional help.
There is usually little need to discuss payment when requesting nominal use of labor or equipment. However, if there is an indication management expects payment, attempt to reach a clear understanding of the charges before proceeding. If the charges to be incurred appear reasonable, and the cost is minor (about $25.00 or less), proceed with the work and add the charges to your sample cost. However, if substantial costs are involved, consult with your supervisor before making a commitment to pay.
Where the charges are substantial and have been authorized by your supervisor, arrange for the cost of labor and/or machinery to be billed to the district. Handle these charges separately from the actual cost of the sample. Determine the hourly rate and keep track of time, labor, or machinery actually used. Prepare a short memo outlining the charges and submit it to your district.
This section deals solely with a "voluntary" hold on regulated products. See IOM 2.7.1 for specific statutory authorities for detaining meat, poultry, egg products, and medical devices.
While there is no specific authority for requesting a voluntary embargo on a lot, voluntary embargoes by a dealer shall be encouraged where the lot sampled is clearly adulterated. By voluntarily holding, the dealer prevents further distribution of suspected violative goods until seizure or other appropriate action can be accomplished.
Except in rare instances, it is generally not practical to hold highly perishable items unless the analysis can be completed within 24 hours. You should confer with your supervisor before requesting a voluntary embargo on perishable items.
When the lot is clearly adulterated, or when instructed to do so by your supervisor, arrange for a voluntary embargo by the dealer. If possible, direct your conversation so that the dealer suggests the embargo. Call the dealer's attention to his/her responsibility under the law, and appeal to his/her sense of public service, integrity, or the health consequences that may be involved.
Always place a time limit on voluntary embargoes using your best estimate of how long it will take to complete the analysis and reach a district decision. Consider such factors as location of the examining lab, difficulty of the analysis required, turnover rate, storage conditions and the perishable nature of the merchandise. Note: Your district's compliance branch can request an extension of the voluntary embargo.
Since the action is voluntary, we cannot compel the dealer to do all the things we might ask him/her to do. While requests for voluntary holds are generally granted, a dealer may act or suggest an alternative approach.
If the dealer indicates a reluctance to voluntarily hold the lot, call his/her attention to Section 301(a) of the FD&C Act [21 U.S.C. 331 (a)]. If the dealer still refuses, a state embargo may be the next action of choice. See IOM 3.3.1 and consult your supervisor.
If the dealer declines to hold the lot, but proposes returning it to the shipper, the dealer should be warned NOT to return the goods to the shipper and advised FDA does not condone shipping violative goods. Direct his/her attention to Section 301(a) of the FD&C Act [21 U.S.C. 331 (a)].
If the dealer offers to voluntarily denature or destroy the lot in lieu of voluntary embargo, provide or arrange for supervising the denaturing per IOM 2.8.1. If the dealer proposes to recondition the lot, refer him/her to your district compliance branch for approval of his/her method. See IOM Subchapter 2.6 and IOM 2.6.3.