What happens if cGMP is not followed?

Failure to follow current Good Manufacturing Practice regulations (21 CFR Parts 210 and 211 for drug products, 21 CFR Part 820 for medical devices) produces a graduated enforcement response from FDA. The typical sequence: Form 483 observations at inspection, followed by a Warning Letter if the response is inadequate, followed in serious cases by a consent decree of permanent injunction, product seizure, import alert (for non-US manufacturers), or referral for criminal prosecution under the Federal Food, Drug, and Cosmetic Act.

For the manufacturer, the operational consequences are typically more material than the regulatory ones: lost sponsor contracts, customer refusal to accept product, accelerated competitor entry, and meaningful revenue loss during remediation. A Warning Letter alone can cost a mid-market CDMO several years of revenue trajectory even without a single FDA enforcement dollar.

Insurance addresses some but not all of this. Products liability defends third-party claims arising from cGMP-related product defects. Regulatory defense coverage (often endorsed onto E&O or D&O) pays defense costs in FDA enforcement actions. Business interruption coverage may respond to forced operational suspension under a manuscript form. Insurance does not pay regulatory fines, does not fund the cGMP remediation investment, and does not restore lost sponsor relationships.