FDA Warning Letter: Inadequate Warehouse Controls and Lot Traceability

On 7 August 2026, the U.S. Food and Drug Administration (FDA) issued a Warning Letter following an inspection conducted from 13 to 30 January 2026 at a drug manufacturing facility in Dayton, New Jersey. The firm holds, labels, releases and distributes over the counter (OTC) drug products under its own label. 

The inspection identified significant deficiencies in the quality system for finished OTC drugs, including deficiencies relevant to the control of products received from and handled by external partners.

Quality Unit Oversight and Outsourced Activities

The FDA criticised the absence of effective QU oversight for suppliers and contract manufacturers, as well as the lack of written responsibilities and procedures. The firm did not request, receive or maintain Certificates of Analysis (CoAs) for incoming bulk and finished OTC drug products. In addition, it had not established adequate procedures to ensure that products received from external partners met the required quality specifications. 

The FDA also emphasised that contract manufacturers and other contractors remain under the oversight of the company responsible for the drug products. Outsourcing does not transfer the ultimate responsibility for ensuring the safety, identity, strength, quality and purity of the products.

Warehouse Controls and Traceability

Further deficiencies concerned the storage and distribution of drug products. Unlabelled, filled product containers were observed in the same general area as labelled drug products. The firm also lacked written procedures for the receipt, quarantine, storage and release of finished drug products. 

The FDA additionally identified deficiencies in the traceability of distributed products. The firm did not have procedures that would allow the distribution of each lot to be readily determined, which would be essential to facilitate an effective recall if necessary. 

FDA Assessment of the Company’s Response

The FDA considered the company’s response inadequate. The response did not include a comprehensive assessment of the quality unit’s actual capabilities or an evaluation of the potential impact on drug products already distributed. It also did not adequately address the systemic nature of the deficiencies.

With regard to warehousing, the proposed designation of areas for quarantined, released and rejected materials was not supported by a clear implementation timeline. The firm had also not conducted a risk assessment for products currently held at, or previously distributed from, the facility under the identified conditions. In relation to traceability, the proposed updates to shipping records and the planned distribution procedure did not provide sufficient detail to demonstrate that the system would achieve adequate, for example lot-level, traceability.

GDP-Relevant Takeaways

The case underlines the importance of clearly defined responsibilities throughout the supply chain, particularly where manufacturing, packaging or other activities are outsourced. Suppliers, contract manufacturers, packagers and other service providers need to be appropriately qualified and subject to effective quality oversight.

It also highlights the need for robust warehouse status management. Released, quarantined, rejected, expired, unlabelled and trial materials should be clearly identified and appropriately segregated to prevent mix-ups and unauthorised distribution. Inventory and shipping records should support complete lot-level traceability from receipt through delivery and enable the rapid identification of affected customers in the event of a recall.

For further information, please see the complete Warning Letter to Safrel Pharmaceuticals LLC on the FDA’s website.