Federal Register / Vol. 65, No. 86 / Wednesday, May 3, 2000 / Rules and Regulations 25639

Custodian states that the Primary

Custodian will agree to exercise

reasonable care, prudence, and

diligence in performing the

requirements of paragraphs (a)(1)(i)(A)

and (B) of this section, or adhere to a

higher standard of care.

(2) Withdrawal of assets from eligible

securities depository. If a custody

arrangement with an Eligible Securities

Depository no longer meets the

requirements of this section, the Fund’s

Foreign Assets must be withdrawn from

the depository as soon as reasonably

practicable.

(b) Definitions. The terms Foreign

Assets, Fund, Qualified Foreign Bank,

Registered Canadian Fund, and U.S.

Bank have the same meanings as in

§ 270.17f–5. In addition:

(1) Eligible Securities Depository

means a system for the central handling

of securities as defined in § 270.17f–4

that:

(i) Acts as or operates a system for the

central handling of securities or

equivalent book-entries in the country

where it is incorporated, or a

transnational system for the central

handling of securities or equivalent

book-entries;

(ii) Is regulated by a foreign financial

regulatory authority as defined under

section 2(a)(50) of the Act (15 U.S.C.

80a–2(a)(50));

(iii) Holds assets for the custodian

that participates in the system on behalf

of the Fund under safekeeping

conditions no less favorable than the

conditions that apply to other

participants;

(iv) Maintains records that identify

the assets of each participant and

segregate the system’s own assets from

the assets of participants;

(v) Provides periodic reports to its

participants with respect to its

safekeeping of assets, including notices

of transfers to or from any participant’s

account; and

(vi) Is subject to periodic examination

by regulatory authorities or independent

accountants.

(2) Primary Custodian means a U.S.

Bank or Qualified Foreign Bank that

contracts directly with a Fund to

provide custodial services related to

maintaining the Fund’s assets outside

the United States.

Note to § 270.17f–7: When a Fund’s (or its

custodian’s) custody arrangement with an

Eligible Securities Depository involves one or

more Eligible Foreign Custodians (as defined

in § 270.17f–5) through which assets are

maintained with the Eligible Securities

Depository, § 270.17f–5 will govern the

Fund’s (or its custodian’s) use of each

Eligible Foreign Custodian, while § 270.17f–

7 will govern an Eligible Foreign Custodian’s

use of the Eligible Securities Depository.

Dated: April 27, 2000.

By the Commission.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–11000 Filed 5–2–00; 8:45 am]

BILLING CODE 8010–01–P

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Food and Drug Administration

21 CFR Parts 203 and 205

[Docket Nos. 92N–0297 and 88N–0258]

RIN 0905–AC81

Prescription Drug Marketing Act of

1987; Prescription Drug Amendments

of 1992; Policies, Requirements, and

Administrative Procedures; Delay of

Effective Date; Reopening of

Administrative Record

AGENCY: Food and Drug Administration,

HHS.

ACTION: Final rule; delay of effective

date; reopening of administrative

record.

SUMMARY: The Food and Drug

Administration (FDA) is delaying until

October 1, 2001, the effective date and

reopening the administrative record to

receive additional comments regarding

certain requirements of a final rule

published in the Federal Register of

December 3, 1999 (64 FR 67720). The

other provisions of the final rule become

effective on December 4, 2000. The final

rule implements the Prescription Drug

Marketing Act of 1987 (PDMA), as

modified by the Prescription Drug

Amendments of 1992 (PDA) and the

FDA Modernization Act of 1997 (the

Modernization Act). FDA is delaying the

effective date for certain requirements

relating to wholesale distribution of

prescription drugs by distributors that

are not authorized distributors of record.

FDA is also delaying the effective date

of another requirement that would

prohibit blood centers functioning as

‘‘health care entities’’ to act as

wholesale distributors of blood

derivatives. The agency is taking this

action to address numerous concerns

about the provisions raised by affected

parties.

DATES: The effective date for §§ 203.3(u)

and 203.50, and the applicability of

§ 203(q) to wholesale distribution of

blood derivatives by health care entities,

added at 64 FR 67720, December 3,

1999, is delayed until October 1, 2001.

The administrative record is reopened

until July 3, 2000, to receive additional

comments on these provisions.

ADDRESSES: Submit written comments

to the Dockets Management Branch

(HFA–305), Food and Drug

Administration, 5630 Fishers Lane, rm.

1061, Rockville, MD 20857. All

comments should be identified with the

docket number found in brackets in the

heading of this document.

FOR FURTHER INFORMATION CONTACT: Lee

D. Korb, Center for Drug Evaluation and

Research (HFD–7), Food and Drug

Administration, 5600 Fishers Lane,

Rockville, MD 20857, 301–594–2041.

SUPPLEMENTARY INFORMATION:

I. Background

PDMA (Public Law 100–293) was

enacted on April 22, 1988, and was

modified by the PDA (Public Law 102–

353, 106 Stat. 941) on August 26, 1992.

The PDMA as modified by the PDA

amended sections 301, 303, 503, and

801 of the Federal Food, Drug, and

Cosmetic Act (the act) (21 U.S.C. 331,

333, 353, 381) to, among other things,

establish requirements for the wholesale

distribution of prescription drugs.

Section 503(e)(1)(A) of the act states

that each person who is engaged in the

wholesale distribution of a prescription

drug who is not the manufacturer or an

authorized distributor of record for the

drug must, before each wholesale

distribution of a drug, provide to the

person receiving the drug a statement

(in such form and containing such

information as the Secretary may

require) identifying each prior sale,

purchase, or trade of the drug, including

the date of the transaction and the

names and addresses of all parties to the

transaction. Section 503(e)(4)(A) of the

act states that, for the purposes of

section 503(e), the term ‘‘authorized

distributors of record’’ means those

distributors with whom a manufacturer

has established an ‘‘ongoing

relationship’’ to distribute the

manufacturer’s products.

On December 3, 1999, the agency

published final regulations in part 203

(21 CFR part 203) implementing these

and other provisions of PDMA (64 FR

67720). Section 203.50 requires that,

before the completion of any wholesale

distribution by a wholesale distributor

of a prescription drug for which the

seller is not an authorized distributor of

record to another wholesale distributor

or retail pharmacy, the seller must

provide to the purchaser a statement

identifying each prior sale, purchase, or

trade of the drug. The identifying

statement must include the proprietary

and established name of the drug, its

dosage, the container size, the number

of containers, lot or control numbers of

the drug being distributed, the business

25640 Federal Register / Vol. 65, No. 86 / Wednesday, May 3, 2000 / Rules and Regulations

1An unauthorized wholesale distributor that

purchases a product from a manufacturer or

authorized distributor of record without an

identifying statement showing the prior sales of the

drug could not provide an identifying statement to

its purchasers and, therefore, could not conduct

further wholesale transactions of the drug in

compliance with § 203.50.

2The proposed rule defined ‘‘ongoing

relationship’’ to require a written agreement and, in

addition, the following two requirements that were

eliminated in the final rule: (1) That a sale be

completed under the written agreement and (2) that

the distributor be listed on the manufacturer’s list

of authorized distributors.

name and address of all parties to each

prior transaction involving the drug,

starting with the manufacturer, and the

date of each previous transaction.

Section 203.3(b) defines ‘‘authorized

distributor of record’’ as a distributor

with whom a manufacturer has

established an ongoing relationship to

distribute the manufacturer’s products.

‘‘Ongoing relationship’’ is defined in

203.3(u) to mean an association that

exists when a manufacturer and a

distributor enter into a written

agreement under which the distributor

is authorized to distribute the

manufacturer’s products for a period of

time or for a number of shipments. If the

distributor is not authorized to

distribute a manufacturer’s entire

product line, the agreement must

identify the specific drug products that

the distributor is authorized to

distribute.

Thus, the final rule requires

unauthorized distributors (i.e., those

distributors who do not have a written

authorization agreement) to provide a

drug origin statement to purchasers

showing the entire prior sales history of

the drug back to the first sale by the

manufacturer. As discussed in the

preamble to the final rule (64 FR 67720

at 67747), manufacturers and authorized

distributors of record are not required to

provide an identifying statement when

selling a drug, although the agency

encouraged them to do so voluntarily to

permit unauthorized distributors to

continue to be able to purchase products

from them.1

The provisions in the final rule

related to wholesale distribution of

prescription drugs by unauthorized

distributors (i.e., §§ 203.3(u) and 203.50)

were adopted from the provisions in the

proposed rule published in the Federal

Register of March 14, 1994 (59 FR

11842), and are essentially the same as

the proposed provisions, except the

definition for ‘‘ongoing relationship’’ in

the proposed rule was revised to

eliminate certain requirements.2 The

agency received two comments on the

proposed definition of ongoing

relationship and one comment on

proposed § 203.50, and responded in

detail to those comments in the

preamble to the final rule (see 64 FR

67720 at 67727, 67728, and 67747).

Section 503(c)(3)(A) of the act states

that no person may sell, purchase, or

trade, or offer to sell, purchase, or trade

any drug that was purchased by a public

or private hospital or other health care

entity. Section 503(c)(3)(B) states several

exceptions to section 503(c)(3)(A), none

of which are relevant to this discussion.

Section 503(c)(3) also states that ‘‘[f]or

purposes of this paragraph, the term

‘entity’ does not include a wholesale

distributor of drugs or a retail pharmacy

licensed under State law.’’

In the final rule of December 3, 1999,

§ 203.20 provides, with certain

exceptions, that no person may sell,

purchase, or trade, or offer to sell,

purchase, or trade any prescription drug

that was purchased by a public or

private hospital or other health care

entity or donated or supplied at a

reduced price to a charitable

organization. In § 203.3(q) of the final

rule, ‘‘Health care entity’’ is defined as

meaning any person that provides

diagnostic, medical, surgical, or dental

treatment, or chronic or rehabilitative

care, but does not include any retail

pharmacy or wholesale distributor.

Under both the act and the final rule, a

person could not simultaneously be a

health care entity and a retail pharmacy

or wholesale distributor. Thus, under

the final rule, blood centers functioning

as health care entities could not engage

in wholesale distribution of prescription

drugs, except for blood and blood

components intended for transfusion,

which are exempt from the PDMA

under § 203.1 of the final rule. Blood

and blood components include whole

blood, red blood cells, platelets and

cryoprecipitated antihemophilic factor

which are prepared by blood banks who

collect blood from donors and separate

out the components using physical or

mechanical means. Blood derivatives

are derived from human blood, plasma,

or serum through a chemical

fractionation manufacturing process.

Examples of blood derivative products

include albumin, antihemophilic factor,

immune globulin, and alpha-1 antitripsin. As discussed in the preamble to

the final rule in response to comments

(64 FR 67720 at 67725, 67726, and

67727), blood derivative products are

not blood or blood components

intended for transfusion and therefore

could not be distributed by health care

entities, including full service blood

centers that function as health care

entities, after the final rule goes into

effect.

II. Description and Rationale for a

Partial Delay of the Effective Date of the

Final Rule

A. Wholesale Distribution by

Unauthorized Distributors

Since publication of the final rule, the

agency has received letters and petitions

and has had other communications with

industry, industry trade associations,

and members of Congress objecting to

the provisions in §§ 203.3(u) and

203.50. In early February 2000, the

agency met with representatives from

the wholesale industry and industry

associations. The meeting participants

discussed their concerns with both: (1)

The requirement in § 203.3(u) that there

be a written authorization agreement

between a manufacturer and distributor

for the distributor to be considered an

authorized distributor of record under

§ 203.3(b), and (2) the requirement in

§ 203.50 that unauthorized distributors

provide an identifying statement

showing all prior sales going back to the

manufacturer.

The meeting participants asserted that

manufacturers are unwilling to enter

into written authorization agreements

with the majority of smaller wholesalers

so that these wholesalers cannot become

authorized distributors of record for the

drugs they sell and, hence, must provide

an identifying statement for these drugs.

The meeting participants also said that

smaller wholesalers cannot obtain an

identifying statement showing all prior

sales of the drugs they purchase for sale

because a large portion of these drugs

are purchased from authorized

distributors who are not required to

provide identifying statements and are

unwilling to voluntarily provide them.

The meeting participants asserted that

authorized distributors will not

voluntarily provide identifying

statements when they sell drugs to

unauthorized distributors because it

would require them to change their

warehouse and business procedures,

which would entail additional effort

and expense.

The meeting participants asserted that

implementation of the final rule will

prevent over 4,000 smaller,

unauthorized distributors from

distributing drugs to their customers

and may put them out of business, at

least with respect to their prescription

drug wholesale business. They also

asserted that because many of their

customers are smaller retail outlets that

are not served by larger distributors,

implementation of the final rule may

leave certain markets for prescription

drugs, and ultimately consumers for

prescription drugs, underserved.

Federal Register / Vol. 65, No. 86 / Wednesday, May 3, 2000 / Rules and Regulations 25641

In addition to the meeting discussed

above and other informal

communications that FDA has had with

industry, industry associations, and

Congress, FDA received a petition for

stay of action requesting that the

relevant provisions of the final rule be

stayed until October 1, 2001. The

agency also received a petition for

reconsideration from the Small Business

Administration (SBA) requesting that

FDA reconsider the final rule and

suspend its effective date based on the

projected severe economic impact it

would have on over 4,000 small

businesses. The petitions argued that

the requirement for a written agreement

in § 203.3(u) is unreasonable because

manufacturers are not willing to enter

such agreements with the majority of

smaller distributors. The petitions also

asserted that authorized wholesalers are

not now able and could not provide, at

a reasonable cost, an identifying

statement to their unauthorized

distributor customers that meets the

requirements of § 203.50 of the final

rule. The SBA petition asserted that, if

the effective date of the final rule is not

stayed, drug products now in the

inventory of wholesalers will have to be

cleared and new orders will have to

cease or be severely limited in order to

comply with the final rule’s December

4, 2000 effective date, with

corresponding disruptions in the

distribution of drugs possible by

summer, 2000.

B. Distribution of Blood Derivatives by

Health Care Entities

Since the time of the proposed rule,

FDA has received 2 letters, one from a

large blood center and the other from an

association representing the blood

center industry, and has held several

meetings to discuss the implications of

the regulations on blood centers that

distribute blood derivative products and

provide health care as a service to the

hospitals and patients they serve. The

blood center industry asserts that the

regulations and, particularly the

definition of ‘‘health care entity,’’ will

severely inhibit their ability to provide

full service care to the detriment of

client hospitals and the patients they

serve, and may disrupt the distribution

of these products to the public. The

agency has also received a letter from a

member of Congress on this issue.

Although the agency was aware of this

issue at the time the final rule was

published, we believed that application

of § 203.3(q) to blood centers would not

result in a disruption in the distribution

of blood derivative products. However,

comments and information provided by

representatives of the blood center

industry have persuaded us that the

final rule could disrupt the availability

of blood derivative products to the

public.

C. Partial Delay of the Effective Date

Based on the concerns expressed by

industry, industry associations, and

Congress about implementing

§§ 203.3(u) and 203.50 by the December

4, 2000, effective date, the agency has

decided to delay the effective date for

those sections of the final rule until

October 1, 2001. Additionally, the

agency has decided to delay the

applicability of § 203.3(q) to wholesale

distribution of blood derivatives by

health care entities, until October 1,

2001. All other provisions of the rule

will become effective on December 4,

2000. This action should not be

construed to indicate that FDA

necessarily agrees with or has made

decisions about the substantive

arguments made in the petitions and

other submissions related to

implementation of §§ 203.3(u) and

203.50 or § 203.3(q), as it applies to

wholesale distribution of blood

derivatives by health care entities.

III. Reopening of the Administrative

Record

The agency believes that providing

additional time before these are to

become effective is appropriate to

permit the agency to obtain more

information about the possible

consequences of implementing these

provisions, to further evaluate the issues

involved, and to seek a legislative

resolution to these issues, if necessary.

Therefore, the agency is reopening the

administrative record to receive

additional comments on these

provisions from interested individuals.

Regarding §§ 203.3(u) and 203.50, the

agency is especially interested in

gaining further insight into the potential

impact of the provisions on the

wholesale distribution system generally,

and on the ability of smaller pharmacies

and other prescription drug retailers to

obtain prescription drugs. In addition,

the agency is seeking comments on the

potential economic impact of the

provisions on smaller wholesale

distributors that are not authorized

distributors of record. Regarding

§ 203.3(q), the agency also invites

comment on the economic and public

health impact of including full service

blood centers under the definition of

‘‘health care entity,’’ thereby prohibiting

the wholesale distribution of blood

derived products by such entities.

Interested persons may submit to the

Dockets Management Branch (HFA–

305), Food and Drug Administration,

5630 Fishers Lane, rm. 1061, Rockville,

MD 20852, written comments regarding

this proposal by July 3, 2000. Two

copies of any comments are to be

submitted, except that individuals may

submit one copy. Comments are to be

identified with the docket number

found in brackets in the heading of this

document. Received comments may be

seen in the Dockets Management Branch

between 9 a.m. and 4 p.m., Monday

through Friday.

This action is being taken under

FDA’s authority under 21 CFR 10.35(a).

The Commissioner of Food and Drugs

finds that this delay of the effective date

is in the public interest.

Dated: April 26, 2000.

Margaret M. Dotzel,

Acting Associate Commissioner for Policy.

[FR Doc. 00–10920 Filed 4–28–00; 12:34 pm]

BILLING CODE 4160–01–F

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Food and Drug Administration

21 CFR Part 510

New Animal Drugs; Change of

Sponsor’s Name and Address

AGENCY: Food and Drug Administration,

HHS.

ACTION: Final rule.

SUMMARY: The Food and Drug

Administration (FDA) is amending the

animal drug regulations to reflect a

change of sponsor’s name and address

for Global Pharmaceutical Corp.

DATES: This rule is effective May 3,

2000.

FOR FURTHER INFORMATION CONTACT:

Thomas J. McKay, Center for Veterinary

Medicine (HFV–102), Food and Drug

Administration, 7500 Standish Pl.,

Rockville, MD 20855, 301–827–0213.

SUPPLEMENTARY INFORMATION: Global

Pharmaceutical Corp., Castor and

Kensington Aves., Philadelphia, PA

19124, has informed FDA of a change of

sponsor’s name and address to IMPAX

Laboratories, Inc., 30831 Huntwood

Ave., Hayward, CA 94544. Accordingly,

the agency is amending the regulations

in 21 CFR 510.600(c)(1) and (c)(2) to

reflect the change of sponsor’s name and

address.

This rule does not meet the definition

of ‘‘rule’’ in 5 U.S.C. 804(3)(A) because

it is a rule of ‘‘particular applicability.’’

Therefore, it is not subject to the

congressional review requirements in 5

U.S.C. 801–808.