53536 Federal Register / Vol. 62, No. 199 / Wednesday, October 15, 1997 / Rules and Regulations

By order of the Foreign-Trade Zones Board,

Washington, DC, this 6th day of October

1997.

Robert S. LaRussa,

Assistant Secretary of Commerce for Import

Administration Alternate Chairman, ForeignTrade Zones Board.

[FR Doc. 97–27145 Filed 10–14–97; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Food and Drug Administration

21 CFR Parts 600, 601, and 606

[Docket No. 96N–0395]

RIN 0910–AA93

Revision of the Requirements for a

Responsible Head for Biological

Establishments

AGENCY: Food and Drug Administration,

HHS.

ACTION: Final rule.

SUMMARY: The Food and Drug

Administration (FDA) is amending the

biologics regulations by deleting the

requirements for a biologics

establishment to name a ‘‘responsible

head’’ or ‘‘designated qualified person’’

to exercise control of the establishment

in all matters relating to compliance

with regulatory requirements and to

represent the establishment in its

dealings with FDA. Because many

manufacturers of biological products are

firms that have more than one

manufacturing location and complex

corporate structures, it may no longer be

practical for one individual to represent

a manufacturer or possess expertise in

all matters. This change will provide

manufacturers with more flexibility in

assigning control and oversight

responsibility within a company. This

final rule is part of FDA’s continuing

effort to achieve the objectives of the

President’s ‘‘Reinventing Government’’

initiative, and it is intended to reduce

the burden of unnecessary regulations

on industry without diminishing public

health protection.

EFFECTIVE DATE: October 15, 1997.

FOR FURTHER INFORMATION CONTACT:

Astrid L. Szeto, Center for Biologics

Evaluation and Research (HFM–17),

Food and Drug Administration, 1401

Rockville Pike, Rockville, MD 20852–

1448, 301–594–3074.

SUPPLEMENTARY INFORMATION:

I. Introduction

In the Federal Register of January 29,

1997 (62 FR 4221), FDA published a

proposed rule to amend the biologics

regulations by deleting the requirements

for a biologics establishment to name a

responsible head or designated qualified

person to represent the establishment in

its dealings with FDA.

Under § 600.10(a) (21 CFR 600.10(a)),

a manufacturer of biological products

currently is required to name a

responsible head who is to exercise

control of the establishment in all

matters relating to compliance with

regulations in parts 600 through 680 (21

CFR parts 600 through 680) and who is

to represent the manufacturer in all

pertinent matters with the Center for

Biologics Evaluation and Research

(CBER). This individual must also have

an understanding of the scientific

principles and techniques involved in

the manufacture of biological products.

When FDA announced in the Federal

Register of June 3, 1994 (59 FR 28821

and 28822), the review by CBER of

certain biologics regulations to identify

those regulations that are outdated,

burdensome, inefficient, duplicative, or

otherwise unsuitable or unnecessary,

§ 600.10(a) was included. FDA also held

a public meeting on January 26, 1995, to

discuss the retrospective review effort

and to provide a forum for the public to

voice its comments on the retrospective

review.

Many of the comments submitted

requested revision or elimination of the

requirements for a responsible head in

§ 600.10(a). The comments stated that

the requirement for a responsible head

to be an expert in multiple functions

and to be responsible for a number of

facility locations is incompatible with

current industry practice. The

comments added that the list of

activities in § 600.10(a) is extremely

broad and this regulation could be

interpreted to require the responsible

head to have an intimate understanding

of a wide variety of extremely complex

activities. All of these activities require

specific expertise, and it may not be

practical to expect one person to be an

expert in all of those areas. Some

comments addressed the requirement

that the responsible head be responsible

for training and have the authority to

enforce discipline, stating that direct

line supervision and management

personnel are better qualified and in a

better position to enforce or direct the

enforcement of discipline and the

performance of assigned functions by

employees engaged in the manufacture

of products. Many comments requested

the designation of an alternate

responsible head, especially in the

situation of multiple locations.

As part of the President’s

‘‘Reinventing Government’’ initiative, a

report entitled ‘‘Reinventing the

Regulation of Drugs Made From

Biotechnology’’ was issued in November

1995. The report announced several

initiatives to reduce the burden of FDA

regulations on the biologics industry

without reducing public health

protection, including a proposal to

remove the requirements in § 600.10(a)

for a responsible head. The commitment

to remove requirements for a

responsible head was based on FDA’s

determination that, with the many

changes that have occurred in science,

technology, and corporate structure, it

no longer may be practical for most

biologics manufacturers to rely on one

individual to meet the requirements in

§ 600.10(a). In addition, the responsible

corporate officer doctrine, e.g., United

States v. Park, 421 U.S. 658 (1975);

United States v. Dotterweich, 320 U.S.

277 (1943), places the burden of

ensuring compliance with the statutes

and regulations applicable to biological

products on corporate officials

‘‘standing in responsible relation to a

public danger.’’ (Dotterweich, 320 U.S.

at 281.) Thus, it is not necessary to

require manufacturers to designate a

responsible head in order to enforce the

duty responsible corporate officials have

to implement measures to ensure that

violations do not occur. (Park, 421 U.S.

at 672.)

In accordance with a revision to the

definition of ‘‘manufacturer’’ in § 600.3

(see 61 FR 24227, May 14, 1996), an

applicant may apply for and obtain a

license for a biological product to be

manufactured at more than one

manufacturing site that may or may not

be owned by the applicant. Therefore,

applicants may want to designate more

than one person with primary

responsibility to maintain adequate

oversight of multiple manufacturing

sites and ensure that each is conforming

to FDA’s requirements for current good

manufacturing practices and the

applicable biologics standards. Many

biologics manufacturers also

manufacture drugs that are regulated by

the Center for Drug Evaluation and

Research (CDER) under the Federal

Food, Drug, and Cosmetic Act. CDER’s

regulations do not contain an analogous

requirement for a responsible head.

FDA’s proposal to revise the

requirements with respect to a

responsible head is an effort to

harmonize CBER’s and CDER’s policies

and requirements and to keep pace with

changes in science, technology, and

corporate structure.

II. Highlights of the Final Rule

Under the final rule, an authorized

official may be chosen by the applicant
Federal Register / Vol. 62, No. 199 / Wednesday, October 15, 1997 / Rules and Regulations 53537

to receive and send correspondence to

CBER. The applicant may choose to

have more than one authorized official.

Accordingly, the agency is amending

§ 600.10 by removing and reserving

paragraph (a) and revising the heading

of paragraph (b) to read ‘‘Personnel.’’

The agency is also amending § 601.2

Applications for establishment and

product licenses; procedures for filing

by adding the statement ‘‘The applicant,

or the applicant’s attorney, agent, or

other authorized official shall sign the

application’’ in paragraph (a) and new

paragraph (c)(6). Finally, the agency is

amending § 601.25(b)(3)(VIII) by

replacing ‘‘signed by the responsible

head (as defined in § 600.10 of this

chapter) of the licensee’’ with ‘‘signed

by an authorized official of the

licensee.’’

FDA is also removing § 606.20(a),

which contains language similar to that

in § 600.10(a) and applies to all blood

establishments, including registered,

unlicensed blood establishments. Like

other components of the biologics

industry, the blood industry has

experienced changes in science,

technology, and corporate structure.

Complex donor and transfusion

recipient issues, the evolution of

sophisticated computerized laboratory

and donor equipment, complicated

serology problems, and state-of-the-art

laboratory techniques have all

contributed to changes within the

structure of blood establishments,

regardless of size. To ensure the quality

and safety of the blood supply, many

blood establishments employ personnel

who are experts in donor issues,

infectious disease, computers,

molecular biology, serology, transfusion

issues, quality control, administration,

and management. It is no longer

practical to expect one individual to

have expertise in all the subspecialties

of transfusion medicine. Accordingly, to

provide sufficient flexibility for a blood

establishment to select a person with

appropriate training and experience to

be responsible for each facet of its

operation, the agency is removing and

reserving § 606.20(a).

III. Comments on the Proposed Rule

and FDA Responses

FDA received 11 comments on the

proposed rule, which included

comments from biological product

manufacturers, including blood

establishments. Eight of the comments

fully supported the proposed rule.

Three comments received from the

blood industry expressed concern that

they would no longer have a single

responsible head through whom they

would interact with FDA, and that the

responsible persons in the organization

will have diminished authority and

responsibility in communication and

decisionmaking because their

responsibilities and authority will no

longer be mandated by the regulations.

FDA does not agree. In the final rule,

only the requirement to retain a single

responsible head is being eliminated.

Any applicant wishing to have a single

authorized representative who would

serve the function of the responsible

head as previously set forth in

§ 600.10(a), may do so. In the past, FDA

has often encountered circumstances

where the responsible head of an

establishment was unable to adequately

carry out her or his responsibilities in

assuring that the establishment

complies with FDA requirements. This

failure was often due, in part, to the

responsible head having inadequate

knowledge in an area to determine

whether FDA’s requirements were being

met or the responsible head was too

remote in location or corporate structure

to adequately monitor activities to

assure requirements were being met.

Removal of this requirement will allow

organizations to designate responsible

individuals with appropriate training

and experience to provide better

communication to the agency as

functional experts in their respective

areas of responsibility. FDA believes

that the industry should have the

flexibility to assign responsibility in a

way that best fits each applicant’s

organizational structure as long as the

public health protection is not

diminished.

Furthermore, the elimination of the

requirement for a responsible head or

designated qualified person does not

decrease the duty that responsible

corporate officers have to ensure

compliance with the law. (Park, and

Dotterweich, supra.)

IV. Effective Date

The final rule is effective October 15,

1997. As provided under 5 U.S.C. 553(d)

and § 10.40(c)(4) (21 CFR 10.40(c)(4)),

the effective date of a final rule may not

be less than 30 days after the date of

publication, except for, among other

things, ‘‘a regulation that grants an

exemption or relieves a restriction’’

(§ 10.40(c)(4)(i)). Because this rule will

provide greater flexibility in assigning

control and oversight responsibility

within a biological product

establishment by eliminating the

responsible head requirement, FDA

believes that an immediate effective

date is appropriate.

V. Analysis of Impacts

FDA has examined the impacts of the

final rule under Executive Order 12866

and the Regulatory Flexibility Act (5

U.S.C. 601–612). Executive Order 12866

directs agencies to assess all costs and

benefits of available regulatory

alternatives and, when regulation is

necessary, to select regulatory

approaches that maximize net benefits

(including potential economic,

environmental, public health and safety,

and other advantages; distributive

impacts; and equity). The agency

believes that this final rule is consistent

with the regulatory philosophy and

principles identified in the Executive

Order. In addition, the final rule is not

a significant regulatory action as defined

by the Executive Order and so is not

subject to review under the Executive

Order.

Under the Regulatory Flexibility Act,

if a rule has a significant impact on a

substantial number of small entities, an

agency must analyze regulatory options

that would minimize any significant

impact of a rule on small entities. The

final rule would have no compliance

costs and would not result in any new

requirements. Therefore, under the

Regulatory Flexibility Act (5 U.S.C.

605(b)), the Commissioner of Food and

Drugs certifies that the final rule will

not have a significant economic impact

on a substantial number of small

entities. No further analysis is required.

VI. Environmental Impact

The agency has determined under 21

CFR 25.24(a)(8) that this action is of a

type that does not individually or

cumulatively have a significant effect on

the human environment. Therefore,

neither an environmental assessment

nor an environmental impact statement

is required.

Lists of Subjects

21 CFR Part 600

Biologics, Reporting and

recordkeeping requirements.

21 CFR Part 601

Administrative practice and

procedure, Biologics, Confidential

business information.

21 CFR Part 606

Blood, Labeling, Laboratories,

Reporting and recordkeeping

requirements.

Therefore, under the Federal Food,

Drug, and Cosmetic Act and the Public

Health Service Act, and under authority

delegated to the Commissioner of Food

and Drugs, 21 CFR parts 600, 601, and

606 are amended as follows:
53538 Federal Register / Vol. 62, No. 199 / Wednesday, October 15, 1997 / Rules and Regulations

PART 600—BIOLOGICAL PRODUCTS:

GENERAL

1. The authority citation for 21 CFR

part 600 continues to read as follows:

Authority: 21 U.S.C. 321, 351, 352, 353,

355, 360, 360i, 371, 374; 42 U.S.C. 216, 262,

263, 263a, 264, 300aa–25.

§ 600.10 [Amended]

2. Section 600.10 Personnel is

amended by removing and reserving

paragraph (a) and by revising the

heading of paragraph (b) to read

‘‘Personnel.’’

PART 601—LICENSING

3. The authority citation for 21 CFR

part 601 continues to read as follows:

Authority: 21 U.S.C. 321, 351, 352, 353,

355, 360, 360c–360f, 360h–360j, 371, 374,

379e, 381; 42 U.S.C. 216, 241, 262, 263; 15

U.S.C. 1451–1461.

4. Section 601.2 is amended by

adding a sentence before the last

sentence in the introductory text of

paragraph (a) and by adding new

paragraph (c)(6) to read as follows:

§ 601.2 Applications for establishment and

product licenses; procedures for filing.

(a) * * * The applicant, or the

applicant’s attorney, agent, or other

authorized official shall sign the

application. * * *

* * * * *

(c) * * *

(6) The applicant, or the applicant’s

attorney, agent, or other authorized

official shall sign the application.

5. Section 601.25 is amended by

revising the first sentence of paragraph

(b)(3)(VIII) to read as follows:

§ 601.25 Review procedures to determine

that licensed biological products are safe,

effective, and not misbranded under

prescribed, recommended, or suggested

conditions of use.

* * * * *

(b) * * *

(3) * * *

(VIII) If the submission is by a

licensee, a statement signed by an

authorized official of the licensee shall

be included, stating that to the best of

his or her knowledge and belief, it

includes all information, favorable and

unfavorable, pertinent to an evaluation

of the safety, effectiveness, and labeling

of the product, including information

derived from investigation, commercial

marketing, or published literature.

* * *

* * * * *

PART 606—CURRENT GOOD

MANUFACTURING PRACTICE FOR

BLOOD AND BLOOD COMPONENTS

6. The authority citation for 21 CFR

part 606 continues to read as follows:

Authority: 21 U.S.C. 321, 331, 351, 352,

355, 360, 360j, 371, 374; 42 U.S.C. 216, 262,

263a, 264.

§ 606.20 [Amended]

7. Section 606.20 Personnel is

amended by removing and reserving

paragraph (a).

Dated: September 4, 1997.

William B. Schultz,

Deputy Commissioner for Policy.

[FR Doc. 97–27298 Filed 10–14–97; 8:45 am]

BILLING CODE 4160–01–F

PENSION BENEFIT GUARANTY

CORPORATION

29 CFR Part 4044

Allocation of Assets in SingleEmployer Plans; Interest Assumptions

for Valuing Benefits

AGENCY: Pension Benefit Guaranty

Corporation.

ACTION: Final rule.

SUMMARY: The Pension Benefit Guaranty

Corporation’s regulation on Allocation

of Assets in Single-Employer Plans

prescribes interest assumptions for

valuing benefits under terminating

single-employer plans. This final rule

amends the regulation to adopt interest

assumptions for plans with valuation

dates in November 1997.

EFFECTIVE DATE: November 1, 1997.

FOR FURTHER INFORMATION CONTACT:

Harold J. Ashner, Assistant General

Counsel, Office of the General Counsel,

Pension Benefit Guaranty Corporation,

1200 K Street, NW., Washington, DC

20005, 202–326–4024. (For TTY and

TDD, call 800–877–8339 and request

connection to 202–326–4024).

SUPPLEMENTARY INFORMATION: The

PBGC’s regulation on Allocation of

Assets in Single-Employer Plans (29

CFR part 4044) prescribes actuarial

assumptions for valuing plan benefits of

terminating single-employer plans

covered by title IV of the Employee

Retirement Income Security Act of 1974.

Among the actuarial assumptions

prescribed in part 4044 are interest

assumptions. These interest

assumptions are intended to reflect

current conditions in the financial and

annuity markets.

Two sets of interest assumptions are

prescribed, one set for the valuation of

benefits to be paid as annuities and one

set for the valuation of benefits to be

paid as lump sums. This amendment

adds to appendix B to part 4044 the

annuity and lump sum interest

assumptions for valuing benefits in

plans with valuation dates during

November 1997.

For annuity benefits, the interest

assumptions will be 5.70 percent for the

first 25 years following the valuation

date and 5.00 percent thereafter. The

annuity interest assumptions represent a

decrease (from those in effect for

October 1997) of 0.20 percent for the

first 25 years following the valuation

date and are otherwise unchanged. For

benefits to be paid as lump sums, the

interest assumptions to be used by the

PBGC will be 4.50 percent for the period

during which a benefit is in pay status

and 4.00 percent during any years

preceding the benefit’s placement in pay

status. The lump sum interest

assumptions represent a decrease (from

those in effect for October 1997) of 0.25

percent for the period during which a

benefit is in pay status; they are

otherwise unchanged.

The PBGC has determined that notice

and public comment on this amendment

are impracticable and contrary to the

public interest. This finding is based on

the need to determine and issue new

interest assumptions promptly so that

the assumptions can reflect, as

accurately as possible, current market

conditions.

Because of the need to provide

immediate guidance for the valuation of

benefits in plans with valuation dates

during November 1997, the PBGC finds

that good cause exists for making the

assumptions set forth in this

amendment effective less than 30 days

after publication.

The PBGC has determined that this

action is not a ‘‘significant regulatory

action’’ under the criteria set forth in

Executive Order 12866.

Because no general notice of proposed

rulemaking is required for this

amendment, the Regulatory Flexibility

Act of 1980 does not apply. See 5 U.S.C.

601(2).

List of Subjects in 29 CFR Part 4044

Pension insurance, Pensions.

In consideration of the foregoing, 29

CFR part 4044 is amended as follows:

PART 4044—ALLOCATION OF

ASSETS IN SINGLE-EMPLOYER

PLANS

1. The authority citation for part 4044

continues to read as follows:

Authority: 29 U.S.C. 1301(a), 1302(b)(3),

1341, 1344, 1362.