[Federal Register Volume 63, Number 104 (Monday, June 1, 1998)]
[Rules and Regulations]
[Pages 29552-29590]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-14311]


-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Part 801

[Docket No. 96N-0119]


Amended Economic Impact Analysis of Final Rule Requiring Use of 
Labeling on Natural Rubber Containing Devices

AGENCY: Food and Drug Administration, HHS.

ACTION: Final rule; amended economic analysis statement.

-----------------------------------------------------------------------

SUMMARY: The Food and Drug Administration (FDA) is issuing an amended 
economic analysis statement relating to a final rule that published in 
the Federal Register of September 30, 1997 (62 FR 51021), requiring 
labeling statements concerning the presence of natural rubber latex in 
medical devices. This rule was issued in response to numerous reports 
of severe allergic reactions and deaths related to a wide range of 
medical devices containing natural rubber. The final rule becomes 
effective on September 30, 1998. In order to allow further comment on 
the economic impact of the September 30, 1997 final rule, FDA is 
publishing an amended economic impact statement, including an amended 
initial regulatory flexibility analysis (IRFA) that it has prepared 
under the Regulatory Flexibility Act (RFA), as amended by the Small 
Business Regulatory Enforcement and Fairness Act (SBREFA). FDA will 
respond to comments to this amended economic analysis statement, and 
publish in the Federal Register an amended final economic impact 
statement prior to the effective date of the September 30, 1997 rule.

DATES: Submit written comments by July 1, 1998 on this amended economic 
analysis statement.

ADDRESSES: Submit written comments to the Dockets Management Branch 
(HFA-305), Food and Drug Administration, 12420 Parklawn Dr., rm. 1-23, 
Rockville, MD 20857. Comments should be identified with the docket 
numbers found in brackets in the heading of this document.

FOR FURTHER INFORMATION CONTACT: Donald E. Marlowe, Center for Devices 
and Radiological Health (HFZ-100), Food and Drug Administration, 5600 
Fishers Lane, Rockville, MD 20850, 301-443-2444, FAX 301-443-2296.

SUPPLEMENTARY INFORMATION: 

I. Background

    In the Federal Register of September 30, 1997 (62 FR 51021), FDA 
published a final rule (to be codified at 21 CFR 801.437), under its 
authority in section 505(a) and (f) of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 352(a) and (f)), requiring certain labeling 
statements on medical devices that contain or have packaging that 
contains natural rubber. This rule becomes effective on September 30, 
1998. The agency issued this rule because medical devices composed of 
natural rubber may pose a significant health risk to some consumers and 
health care providers who are sensitized to natural latex proteins. FDA 
has received numerous reports about adverse effects related to 
reactions to natural latex proteins contained in medical devices, 
including 16 deaths following barium enemas. These deaths were 
associated with anaphylactic reactions to the natural rubber latex cuff 
on the tip of barium enema catheters. Scientific studies and case 
reports have documented sensitivity to natural latex proteins found in 
a wide range of medical devices. It is estimated that 5 to 17 percent 
of health care workers are sensitive to latex proteins (Refs. 1 through 
5).
    The September 30, 1997 rule (hereinafter referred to as the final 
rule) specifically requires that devices that contain natural rubber 
that is intended to contact or is likely to contact the health care 
worker or patient bear one or more of four labeling statements, 
depending on the type of natural rubber in the device and depending on 
whether the natural rubber is in the device itself or in its packaging. 
These statements are as follows: ``This Product Contains Dry Natural 
Rubber.''; ``Caution: This Product Contains Natural Rubber Latex Which 
May Cause Allergic Reactions.''; ``The Packaging of This Product 
Contains Dry Natural Rubber.''; and ``The Packaging of This Product 
Contains Natural Rubber Latex Which

[[Page 29553]]

May Cause Allergic Reactions.'' The final rule also prohibits the use 
of the word ``hypoallergenic'' on devices that contain natural rubber 
latex.
    FDA, in response to a comment on the proposed latex labeling 
regulation (61 FR 32618, June 24, 1996) concerning the application of 
the rule to combination products, stated in the preamble to the final 
rule that it intended to require combination products (i.e., drug/
device and biologic/device combinations) that contain natural rubber 
device components to be labeled in accordance with the final rule (62 
FR 51021 at 51026).
    After publication of the final rule, the agency received numerous 
inquiries about, and objections to the application of the natural 
rubber labeling requirements to combination drug/device products, and 
combination biologic/device products that currently are regulated under 
drug and biologic authorities. In the Federal Register of May 6, 1998 
(63 FR 24934), FDA issued a notice stating that upon consideration of 
these comments, and the need to provide a uniform labeling approach for 
all drug and biological products, including combination products, FDA 
had decided that further opportunity for public comment should be 
provided on how natural rubber labeling requirements should be applied 
to all products regulated as drugs and biologics. Accordingly, FDA 
announced that it does not intend to apply the final rule to 
combination products currently regulated as drugs or biologics, and 
instead intends to initiate a separate proceeding to propose rulemaking 
requirements for labeling statements on natural rubber-containing 
products regulated as drugs and biologics, including combination 
products, currently regulated under drug or biologic authorities.
    In the June 24, 1996 proposed rule, FDA stated that it did not 
believe that the proposed rule would be a significant regulatory action 
as defined by Executive Order 12866, and certified under the Regulatory 
Flexibility Act (5 U.S.C. 601-602) that the rule would not have a 
significant economic impact on a substantial number of small entities. 
FDA stated that it believed the rule's proposed effective date 180 days 
after publication would allow manufacturers to exhaust their existing 
labeling supplies.
    FDA received comments concerning the economic impact of the 
proposed rule stating that the requirement would have a major impact on 
multinational companies, costing at least $15,000 per device for 
labeling. Another comment stated that the agency underestimated the 
impact of the proposed rule, as each manufacturer will need to draft, 
review, and relabel primary and secondary packages of hundreds, if not 
thousands of devices.
    Based on FDA's information, the agency responded that it did not 
agree that the regulation would require the relabeling of hundreds or 
thousands of devices, and that agency estimates of relabeling costs 
were between $1,000 to $2,000 for each type of device. The agency also 
noted that the extended 1 year effective date should allow most 
manufactures to exhaust their current labeling stock prior to the 
effective date of the regulation. On this basis, the agency stated that 
the final rule was not a significant regulatory action under the 
Executive Order, and certified that although a substantial number of 
small entities would be affected by the rule, the estimated $1,000 to 
$2,000 cost of implementing the final rule would not have a significant 
economic impact on those entities.
     On October 7, 1997, the Office of the Chief Counsel for Advocacy 
of the U.S. Small Business Administration submitted a comment stating 
that the agency had not supplied data in the preamble to the final rule 
to support its cost estimates. The agency also received information 
from industry, subsequent to the issuance of the final rule, 
identifying additional products that would be subject to the final 
rule. On the basis of this information, FDA has decided to issue an 
amended economic impact analysis, including an Initial Regulatory 
Flexibility Analysis (IRFA), and offer opportunity for further comment 
before the implementation of the rule. If comments received persuade 
the agency that the conclusions of its amended economic analysis are 
erroneous, FDA will decide whether to issue the rule on its current 
effective date, to stay the effective date of the final rule, and/or 
repropose the rule. In any event, FDA will respond, in the Federal 
Register, to comments received in response to this amended economic 
impact statement.

II. Federal Rules that May Duplicate, Overlap, or Conflict with the 
Final Rule

    FDA does not believe that the final rule duplicates, overlaps, or 
conflicts with any existing Federal rules. Although 21 CFR 801.5 
defines adequate directions for use, and lists certain situations where 
directions for use may be considered inadequate, there is no regulation 
requiring a specific labeling statement that reduces the risks 
associated with natural rubber products by informing consumers about 
the presence natural rubber. Without the final regulation, 
manufacturers may provide a wide variety of information about natural 
rubber that may not be adequate to provide consumer protection, or may 
provide no information at all. FDA believes that this regulation will 
assure that necessary safety information is provided to the public, and 
that standardized information is the best method to inform the public 
about risks presented by natural rubber containing products.

III. Public Outreach

    Each of the Federal Register documents concerning these products is 
available to small businesses on FDA's website. In addition to the 
publication in the Federal Register of the proposed rule, the final 
rule, and this amended economic analysis, FDA has conducted extensive 
outreach to a wide audience, including small businesses, on labeling 
requirements for products containing natural rubber.
    Prior to the issuance of any proposal, FDA has discussed agency 
concerns about latex allergies and the need for labeling on products 
containing natural rubber at numerous public meetings, including 
several meetings of the American Society for Testing Materials (ASTM), 
a major consensus standards development organization in the United 
States. After the proposal was published, FDA continues a public 
dialogue on the labeling regulations at a variety of meetings, 
including meetings with the U.S. Pharmacopeia, the ASTM, and 
representatives of the Health Industry Manufacturers Association 
(HIMA), a trade association representing medical device manufacturers, 
including many that qualify as small businesses. FDA's Division of 
Small Manufacturers Assistance (DSMA) handled numerous telephone 
inquiries from businesses that were interested in obtaining information 
about the proposal.
    At the same time the final labeling regulation was published, DSMA 
faxed correspondence to 100 industry organizations for further 
broadcast to their membership. That correspondence provided information 
about the labeling requirements as well as agency contacts who would 
handle inquiries and comments about the regulation. FDA then held 
further meetings concerning the rule with standards setting 
organizations whose membership includes small businesses as well as 
additional meetings with HIMA members. FDA also sponsored a national 
conference devoted to latex issues that reached the largest audience of 
any teleconference previously produced by FDA. Interested

[[Page 29554]]

individuals and businesses at 5,000 downlinks had an opportunity at 
that teleconference to exchange views with agency staff and industry 
experts on the subject of latex allergies and the implementation and 
impact of FDA's labeling requirements.

IV. Analysis of Impacts

    FDA has examined the impacts of the rule under Executive Order 
12866, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the 
Unfunded Mandates Reform Act (2 U.S.C 1501 et. seq.). 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). 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 the rule on small 
entities. Title II of the Unfunded Mandates Reform Act (21 U.S.C. 1532) 
requires that agencies prepare a written assessment of anticipated 
costs and benefits before proposing any rule that may result in an 
expenditure in any 1 year by State, local, and tribal governments, in 
the aggregate, or by the private sector of $100 million (adjusted 
annually for inflation).
    The agency believes that this rule is consistent with the 
regulatory philosophy and principles identified in Executive Order 
12866 and in these two statutes. The purpose of this rule is to add 
labeling statements that will help ensure the safe and effective use by 
health care workers and patients of natural rubber devices. Potential 
benefits include early recognition of symptoms that could develop into 
severe natural latex allergies, and the prevention of severe allergic 
reactions and death that may occur if persons who are allergic to 
natural rubber inadvertently use natural rubber devices. The agency 
contracted with Eastern Research Group, Inc., (ERG), Lexington, MA, to 
conduct an economic analysis of this rule. The substantive portions of 
the ERG analysis are reproduced in their entirety in Appendix 1.
    Based on other information referenced in this document, and on the 
analysis performed by the ERG, FDA has prepared an amended economic 
analysis statement, including an amended IRFA. Since the rule does not 
impose any mandates on State, local or tribal governments, or the 
private sector that will result in an expenditure in any 1 year of $100 
million or more, FDA is not required to perform a cost-benefit analysis 
according to the Unfunded Mandates Reform Act. The rule is not a 
significant regulatory action as defined by the Executive Order.
    The ERG analysis estimated that this rule will affect approximately 
1,110 small businesses. Total annualized compliance costs for small 
businesses are estimated at $1.3 million, which represent 0.04 percent 
of revenues for small medical device manufacturers. Although this 
economic analysis indicates that this rule will not have a significant 
economic impact on a substantial number of small entities, the agency 
is soliciting comments on this IRFA. In the event that FDA, after 
receiving further comments to this amended analysis, determines that 
the rule does have a significant effect on a substantial number of 
small entities, FDA is providing the following discussion and analysis 
of alternatives that minimize effects on small businesses.

V. Alternatives

A. Voluntary Compliance

    FDA could have issued guidance stating that FDA considered 
statements about the presence of natural rubber necessary to comply 
with existing general statutory and regulatory prohibitions against 
false and misleading labeling (21 U.S.C. 352(a)), and failure to 
provide adequate directions for use (21 U.S.C. 352(f)). Given the 
significant health risks associated with natural rubber products, FDA 
does not believe that existing general statutory labeling authority and 
regulations provide adequate protection to ensure that health care 
workers and patients are warned about the risks associated with natural 
rubber.
    Without the final regulation, manufacturers may not provide any 
information at all. The ERG report and FDA's own experience indicate 
that some manufacturers never voluntarily revise their labeling. Even 
if it could be assumed that all manufacturers would voluntarily provide 
some labeling information about the presence of natural rubber, such 
information is likely to be presented in a variety of ways that may 
confuse consumers and limit the effectiveness of the natural rubber 
statement. FDA believes that the provision of consistent, accurate 
information to consumers is critical. FDA believes that this 
regulation, which provides accurate, consistent information in a 
standardized manner, will assure that the safety information is 
communicated effectively to the public.

B. Implementation Periods

    FDA considered various implementation periods for the effective 
date after the issuance of the final rule. The June 24, 1996, proposed 
rule proposed an effective date 6 months after the publication of the 
final rule. The final rule has reduced the impact on small businesses 
by extending the effective date to 1 year after issuance of the final 
rule. Based on the ERG report figures, the total industry cost of 
compliance for this rule with a 1 year implementation period is $48.7 
million. The total annualized costs are calculated at $3.2 million per 
year. The costs for a 1 year effective date are 28 percent lower than a 
6 month effective date. Allowing a 24 month implementation date would 
reduce costs by 40 percent. FDA rejected the 6 month implementation 
period and extended the implementation period to 1 year to allow 
manufacturers of products containing natural rubber latex, including 
small businesses, to reduce costs by depleting existing inventories and 
coordinating this labeling change with other planned labeling changes. 
Although costs could further be reduced by allowing a 24 month 
implementation period, FDA believes that the public need for this 
information about devices that pose serious risks justifies rejecting 
this alternative.

C. Exempting Small Businesses

    FDA has considered the option of exempting small businesses from 
the final regulation. The ERG report estimates that approximately 83 
percent of the manufacturers of natural rubber latex products are small 
businesses. FDA believes that given that the large majority of 
manufacturers of products containing natural rubber latex are small 
businesses, and given the risks associated with these devices, 
exempting small businesses from this regulation would result in a 
significant decrease of consumer protection. Accordingly, FDA does not 
believe that small businesses should be exempt from this regulation.

D. Allowance of Supplementary Labeling

    FDA could have chosen a regulatory alternative that would require 
that all labeling be directly printed on the existing packaging and 
labeling. Such a regulatory provision would decrease the possibility 
that the required statement would become dislodged during distribution. 
Instead, the final rule

[[Page 29555]]

allows the use of supplementary labeling (stickers) to provide the 
required labeling information. As noted in the ERG report, this will 
allow a number of firms, including small businesses, to reduce costs by 
avoiding extensive repackaging of existing product inventory that will 
not be sold prior to the end of the regulatory implementation period. 
FDA decided to include this option in the final rule.

E. Requiring a Labeling Statement on Only One Level of Labeling

    Under the provisions of the final rule, FDA estimates that most 
devices covered under the rule will bear the required natural rubber 
statement on two or three levels of labeling. FDA considered requiring 
labeling statements on only one level of labeling. This alternative was 
rejected because of the importance of the information contained in the 
required labeling statements. Users may not have the necessary 
opportunity to read the statement if it is included only on some levels 
of labeling. For some products, especially those with multiple users, 
some labeling may be discarded prior to use by subsequent consumers. 
The inclusion of the statement on each level of labeling increases the 
likelihood that consumers will be aware of the risks posed by the 
natural rubber in the product.

VI. References

    The following references have been placed on display in the Dockets 
Management Branch (address above) and may be seen by interested persons 
between 9 a.m. and 4 p.m., Monday through Friday.
    1. Kibby, T., and M. Akl, ``Prevalence of Latex Sensitization in 
a Hospital Employee Population,'' Annals of Allergy, 78:41-44, 1997.
    2. Kaczmarek, R., B. Silverman, T. Gross, et al., ``Prevalence 
of Latex-specific IgE Antibodies in Hospital Personnel,'' Annals of 
Allergy, Asthma & Immunology, 76:51-56, 1996.
    3. Arellano, R., J. Bradley, and G. Sussman, ``Prevalence of 
Latex Sensitization Among Hospital Employees Occupationally Exposed 
to Latex Gloves,'' Anesthesiology, 77:905-908, 1992.
    4. Lagier, F., D. Vervloet, I. Lhermet, et al.,``Prevalence of 
Latex Allergy in Operating Room Nurses,'' Journal of Allergy and 
Clinical Immunology, 90:319-322, 1992.
    5. Yassin, M., M. Lierl, T. Fischer, et. al., ``Latex Allergy in 
Hospital Employees,'' Annals of Allergy, 72:245-249, 1994.

VII. Requests for Comments

    Interested persons may, on or before July 1, 1998 submit to the 
Dockets management Branch (address above) written comments regarding 
this amended economic analysis statement on issues relating to natural 
rubber devices. Two copies of any comments are to be submitted, except 
that individuals may submit one copy. Comments are to be identified 
with the docket numbers found in brackets in the heading of this 
document. Received comments may be seen in the office above between 9 
a.m. and 4 p.m., Monday through Friday.

    Dated: May 26, 1998.
William K. Hubbard,
Associate Commissioner for Policy Coordination.
BILLING CODE 4160-01-F

[[Page 29556]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.011



[[Page 29557]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.012



[[Page 29558]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.013



[[Page 29559]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.014



[[Page 29560]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.015



[[Page 29561]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.016



[[Page 29562]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.017



[[Page 29563]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.018



[[Page 29564]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.019



[[Page 29565]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.020



[[Page 29566]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.021



[[Page 29567]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.022



[[Page 29568]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.023



[[Page 29569]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.024



[[Page 29570]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.025



[[Page 29571]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.026



[[Page 29572]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.027



[[Page 29573]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.028



[[Page 29574]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.029



[[Page 29575]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.030



[[Page 29576]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.031



[[Page 29577]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.032



[[Page 29578]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.033



[[Page 29579]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.034



[[Page 29580]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.035



[[Page 29581]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.036



[[Page 29582]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.037



[[Page 29583]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.038



[[Page 29584]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.039



[[Page 29585]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.040



[[Page 29586]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.041



[[Page 29587]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.042



[[Page 29588]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.043



[[Page 29589]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.044



[[Page 29590]]

[GRAPHIC] [TIFF OMITTED] TR01JN98.045



[FR Doc. 98-14311 Filed 5-29-98; 8:45 am]
BILLING CODE 4160-01-C