Lessons from the Dollar Tree Warning Letter

Last week’s FDA Warning Letter to Dollar Tree stores should act as a warning to all companies that use contract manufacturers particularly that using overseas manufacturers of FDA regulated products. Dollar Tree’s problems relate to its failure to verify the GMP compliance status of its vendors and failure to heed FDA’s repeated notifications of the same. The WL listed several issues with GMP compliance and vendor validation that could have been easily avoided but instead presented a systematic violation of the regulations by Dollar Tree. The vendors in question had been subject to Warning Letters and Import Alerts by FDA and Dollar Tree had been informed about these violations by the FDA. But, apparently, Dollar Tree kept importing the defective products from the same vendors any way. FDA stated that the company had a practice of using vendors with histories of significant GMP violations. The company also used a non-compliant testing lab for certifying its products. This means that either the company did not verify GMP compliance of its suppliers or believed, erroneously, that since it is only an importer with no in-house manufacturing operations, the GMP compliance verification does not apply to it. It is the responsibility of any importer of FDA regulated products to assure that all the vendors are compliant with FDA regulations. It is also the responsibility of the importers to verify data integrity via periodic audits of the vendors. The least a company can do is to verify that the vendor is not going through a severe FDA enforcement action such as Warning Letters or an Import Alert. It is not clear from the FDA’s letter if the importation of drugs from vendors happened after them being put on the Import Alert list or before. If Dollar Tree was able to import products from vendors on Import Alerts, it would indicate a failure of the custom clearance process as well or that the company falsified its documentation. To add to the mix, all the vendors cited by the FDA in the Warning Letter were located outside the US, mostly in China, a country where manufacturers have a checkered history of compliance with GMP regulations. Dollar Tree’s business model is selling products on the cheaper side, so it won’t be too far-fetched to imagine that the company cut several corners to save the expense that led to the violations. Now the company must first remove all non-compliant products from its retail stores, implement a vendor validation program, and execute a plan to audit all its vendors periodically. It is obviously at least an embarrassing time for Dollar Tree, and may be more, but hope others can learn from it and avoid similar situations.