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Meeting Product Demand in the COVID-19 Era: What to Consider When Considering a New Product Meeting Product Demand in the COVID-19 Era: What to Consider When Considering a New Product

Meeting Product Demand in the COVID-19 Era: What to Consider When Considering a New Product

Companies that manufacture new products to meet temporary high demand face unique challenges and legal risk and should not proceed to market without reviewing the regulatory landscape of the new product.

While some businesses have been shuttered or brought to a standstill during the spread of COVID-19 in the United States, others are struggling to keep up with demand. Consumers stocking up on essential goods and health care products have caused shortages of hand sanitizer, soap, cleaning supplies, and even toilet paper as panicked shoppers flock to stores.

Handled ethically and efficiently, increased demand can also spell new opportunities for businesses looking for ways to weather the storm. Like factories that converted their production lines to manufacture military items during war times, manufacturers across the United States are doing the same to keep communities supplied with a number of products that have become scarce. Likewise, distributors and retailers are looking for alternative sources to expand their product lines. For these enterprising companies, where conscientious capitalism aligns with public interest, temptation is strong to rush the products to market.

In most cases, though, a pause to assess the regulatory context of the new product is not only prudent to reduce risks and liability—it may be necessary. Even a slight deviation from a product ordinarily manufactured by the company may mean a different set of regulations apply. A company that ordinarily manufactures products for adults might not know that a product intended primarily for use by children may be subject to an entirely different set of regulations—it is not enough to simply update the packaging and labeling. A cosmetics manufacturer knowledgeable about Food and Drug Administration (FDA) cosmetics regulations might not be familiar enough with FDA’s drug regulations to know when a new or “improved” product crosses the line.

Manufacturers may look for comfort in new policies being announced daily in this unprecedented atmosphere of shortage. FDA, for example, has rolled out a number of enforcement policies designed to facilitate access to critical medical supplies and encourage development of life-saving treatments. Temporary enforcement policies lessen the burden on manufacturers of products such as ventilators, non-invasive remote monitoring devices, and hand sanitizer.

But in order to effectively rely on these stop-gap policies, you must understand both their specific parameters and the underlying laws and regulations that would ordinarily apply. The temporary policy applicable to hand sanitizer, for example, only applies to product meeting specific criteria, including higher alcohol concentration than is currently recommended by the Centers for Disease Control and Prevention (CDC).

Moreover, such temporary policies do not relieve companies of their obligation to comply with a litany of other regulatory requirements, including but not limited to labeling (including instructions and warnings) and advertising. FDA and the Federal Trade Commission (FTC) both regulate the claims that may be made on labels and marketing materials about products such as hand sanitizer. Both agencies require scientific support for safety and efficacy claims; precise standards may vary, however, depending on the regulatory scheme governing the product.

It is also clear that agencies, even if working remotely, are not letting up on enforcement actions for regulatory violations that put the public at risk. Last week, FDA and the FTC issued seven warning letters to companies selling unapproved and allegedly fraudulent products in violation of the agencies’ regulations. Promotional materials, published primarily on websites or social media, claimed the products were intended to mitigate, prevent, treat, cure, or diagnose COVID-19 in humans. The FTC Act makes it unlawful to advertise that a product can prevent, treat, or cure human disease without competent and reliable scientific evidence to support those claims.

FTC’s guidance also expressly states that “Coronavirus-related advertising claims will be subject to exacting scrutiny” with a “magnifying glass on the marketplace.” The message? “Don’t even think about marketing a product unless you can support your claims with sound science.” FTC has specifically noted it will be closely examining “product names, URLs, metatags, and other ways companies can suggest or imply claims to consumers.”

So while the regulatory agencies are hard at work publishing policies to assist companies looking to resolve this crisis, the corresponding message from those same agencies is clear: there will be increased scrutiny on products touting express or implied claims related to COVID-19.

If you are a business uncertain whether new, improved, or changed products are subject to unfamiliar regulatory requirements or newly revised policies being released by federal or state agencies, contact the Ice Miller COVID-19 Task Force for more information and guidance.

If you have any questions concerning the regulatory context of a new product, please contact Kim Metzger or Meghann Supino.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.
 
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