LEGAL TRENDS
A [Texan] COVID Success Story
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The Houston Lawyer
By Heather M. Bustos
il and gas are as engrained in Texas culture as barbecue and Dr. Pepper. Well, at least that is what I have learned in my six years living here. In that time, I have built my law firm specializing in the niche area of Food and Drug law. Although to many attorneys this may seem like a tiny corner of the legal world, the Food and Drug Administration’s (FDA) regulatory authority is quite broad. According to an October 2019 FDA Fact Sheet, FDA-regulated products account for about 20 cents of every dollar spent by U.S. consumers.1 This makes the world of FDA regulation vast, expansive and thereby always keeping me on my toes. Practicing in this area of law in the time of the COVID-19 pandemic has also placed me at a unique vantage point. From the moment the pandemic was declared, to this very moment writing this article, my firm has been bombarded with companies wanting to boost supply of all kinds of COVID-related products: from N95’s and gloves to soaps and sanitizers. One of the most interesting developments I have been lucky enough to witness is, what I believe to be, a true Texas success story. Enter the oil and gas industry in Texas, which expands all over the globe. In my few years living here, I have seen its ups and downs. It is the nature of the industry, but this pandemic has caused a downturn of seismic proportions. Some news outlets are calling it a “double crisis” as oil prices swiftly dropped, almost simultaneously, with coronavirus hitting the State of Texas. Traditionally, the oil and gas industry has been on the hunt for ways to diversify its products and services, which it has now found in antiseptic rubs, more commonly known as hand sanitizers. Hand sanitizers are regulated by the FDA as topical over-
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the-counter drugs. The FDA uses a system called the OTC Monograph process to regulate these products. Although these products are commonplace in the market, there are still many questions about their efficacy and there remains to be a debate on how they may be causing antibiotic resistance. However, that is a conversation for another article. When many companies began jumping on the hand sanitizer band wagon, they likely began using what is known as the “WHO formulation.” This is essentially a recipe that has been authorized by the FDA for firms who may not have had prior experience in the industry. It consists of a high percentage strength of alcohol along with hydrogen peroxide, purified water and glycerol. Many firms, including distilleries, began to manufacture sanitizer utilizing this formula and quickly realized that consumers, used to the standard set by brands like Purell and GermX, were not too happy with a strongsmelling liquid solution. The standard most common in the industry is a cool cucumber or clear gelled end product. Many of these companies are still trying to formulate the smell out and the viscosity up only to realize that formulating OTC drug products may be more difficult than it initially seems. The oil and gas clients that have approached my firm all have something in common: the ability to move quickly, but cautiously, into new arenas with a swiftness more akin to Silicon Valley. Moving into these heavily regulated areas is no easy task. The differences between oilfield chemicals and consumer products are pretty easy to spot, but the industry has decided to meet it head on. Their access to ethyl alcohol (also referred to as ethanol), one of the most commonly used active ingredients in hand sanitizers, and to many commonly used inactives has provided a vehicle for these companies to keep their doors open and employees running at full steam. The processes and safeguards will need to be tighter and more stringent as these products are meant to come into contact with human skin, but
the shift has been taken in great stride. The ability to pivot is in the nature of the industry and from my vantage point, this new industry is here to stay. Heather M. Bustos is an FDA compliance attorney and the owner of Bustos Law Group located in The Woodlands, Texas. She assists both U.S.-based and international companies with FDA compliance for food, dietary supplement, pharmaceutical drug, medical device, and cosmetic products as well as, FDArelated import/customs issues. She serves on the board of the Woodlands Bar Association and the WBA’s Diversity and Inclusion Committee. Endnotes
1. Fact Sheet: FDA at a Glance, U.S. FOOD AND DRUG ADMIN. (Oct. 2019), https://www.fda.gov/about-fda/ fda-basics/fact-sheet-fda-glance
Covid-19’s Impact on Supply Chain
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By C. Mark Murrah and Jose L. Trevino
oronavirus has had a variety of impacts on traditional business (such as working-from-home becoming a possible new norm), but one of the most important long-term impacts will be the permanent disruption of the global supply chain. China plays an enormous role in global manufacturing, with the latest U.S. Census report showing that U.S.-China trade in goods and services amounts to almost US$138 billion for the first quarter of 2020 alone. As early as January 2020, U.S. companies began to feel the effect of Covid-19’s disruption to the global supply chain and government and corporate voices are increasingly raising concerns about the United States’ overwhelming reliance on China. As Coronavirus decimated China’s production, U.S. companies began to see Chi-