Federal Register / Vol. 66, No. 244 / Wednesday, December 19, 2001 / Rules and Regulations 65429

location where the requirements of this AD

can be done.

Effective Date

(j) This amendment becomes effective on

January 23, 2002.

Issued in Burlington, Massachusetts, on

December 7, 2001.

Jay J. Pardee,

Manager, Engine and Propeller Directorate,

Aircraft Certification Service.

[FR Doc. 01–30952 Filed 12–18–01; 8:45 am]

BILLING CODE 4910–13–P

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Food and Drug Administration

21 CFR Part 1

[Docket No. 98N–0583]

Exports: Notification and

Recordkeeping Requirements

AGENCY: Food and Drug Administration,

HHS.

ACTION: Final rule.

SUMMARY: The Food and Drug

Administration (FDA) is issuing a final

rule that establishes the notification and

recordkeeping requirements for persons

exporting human drugs, biological

products, devices, animal drugs, food,

and cosmetics that may not be marketed

or sold in the United States. These

regulations implement recent changes in

the statutory requirements applicable to

certain exports, and also codify

recordkeeping requirements for exports

of products that cannot be marketed or

sold in the United States generally.

DATES: This rule is effective March 19,

2002.

FOR FURTHER INFORMATION CONTACT:

Philip L. Chao, Office of Policy,

Planning, and Legislation (HF–23), Food

and Drug Administration, 5600 Fishers

Lane, Rockville, MD 20857, 301–827–

3380.

SUPPLEMENTARY INFORMATION:

I. Introduction

In the Federal Register of April 2,

1999 (64 FR 15994), FDA published a

proposed rule to establish notification

and recordkeeping requirements for

products exported under section 801 or

802 of the Federal Food, Drug, or

Cosmetic Act (the act) (21 U.S.C. 381 or

382, respectively) or section 351 of the

Public Health Service Act (PHS Act) (42

U.S.C. 262), as amended by the FDA

Export Reform and Enhancement Act

(Public Law 104–134, as amended by

Public Law 104–180).

The FDA Export Reform and

Enhancement Act significantly changed

and simplified the export requirements

for unapproved human drugs, biological

products, devices, and animal drugs.

For example, before the law was

enacted, most exports of unapproved

new drugs could only be made to the 21

countries then identified in section 802

of the act, and these exports were

subject to numerous restrictions. The

FDA Export Reform and Enhancement

Act amended section 802 of the act to

allow, among other things, the export of

unapproved new human drugs to any

country in the world if the drug

complies with the laws of the importing

country and has valid marketing

authorization from any of the following

countries: Australia, Canada, Israel,

Japan, New Zealand, Switzerland, South

Africa, and the countries in the

European Union (EU) and the European

Economic Area (EEA) and certain other

requirements are met (see section

802(b)(1)(A) of the act). Currently, the

EU countries are Austria, Belgium,

Denmark, Germany, Greece, Finland,

France, Ireland, Italy, Luxembourg, the

Netherlands, Portugal, Spain, Sweden,

and the United Kingdom. The EEA

countries are the EU countries, Iceland,

Liechtenstein, and Norway. (The list of

countries will expand automatically if

any country accedes to the EU or

becomes a member of the EEA.) This

provision of section 802 of the act also

applies to the export of certain devices

that cannot be sold or marketed in the

United States.

The FDA Export Reform and

Enhancement Act also established

recordkeeping and notification

requirements. Section 802(g) of the act

requires an exporter of a drug or device

under section 802(b)(1)(A) of the act to

provide a ‘‘simple notification’’ to the

agency ‘‘identifying the drug or device

when the exporter first begins to export

such drug or device’’ to any of the 25

countries identified in section

802(b)(1)(A) of the act. For exports to

other, nonlisted countries, section

802(g) of the act requires the exporter to

provide a simple notification

‘‘identifying the drug or device and the

country to which such drug or device is

being exported.’’ This section also

requires persons exporting drugs or

devices under any provision of section

802 of the act to ‘‘maintain records of all

drugs or devices exported and the

countries to which they were exported.’’

Certain aspects of the proposed rule

raised numerous issues. As a result, in

the Federal Register of June 17, 1999

(64 FR 32442), FDA extended the

comment period from June 16, 1999, to

July 16, 1999.

FDA received 18 comments on the

proposed rule. In addition, the agency

received several comments on the

export notification and recordkeeping

discussions in its draft export guidance

document which was published in the

Federal Register on June 12, 1998 (63

FR 32219, FDA docket number 98D–

0307). Drug manufacturers, device

manufacturers, device exporters, and

food, drug, and device trade

associations submitted comments. An

animal drug trade association and a

biological product company also

submitted comments. Because FDA

wrote both the proposed rule and the

guidance document contemporaneously,

the agency considered comments

submitted on the proposed rule and

related comments submitted on the draft

export guidance document when it

prepared this final rule.

II. Comments on the Proposed Rule,

Including Related Comments Submitted

to the Draft Guidance Document

Most comments focused on specific

provisions in the proposed rule.

However, others made general

comments about FDA’s export authority

or the need for any regulations or

addressed other export issues that were

not directly related to the proposed rule.

A description of the comments, and

FDA’s responses, follows.

A. General Comments

(Comment 1) Several comments

claimed that the proposal was contrary

to the letter or intent of the FDA Export

Reform and Enhancement Act because it

would create ‘‘unnecessary,’’

‘‘cumbersome,’’ or ‘‘burdensome’’

requirements that would make it more

difficult or time-consuming to export

products from the United States, place

U.S. firms at a competitive disadvantage

in global markets, force firms to relocate

overseas, or result in lost profits. Some

comments said FDA must withdraw the

proposal, although others said the

agency should significantly revise the

proposal to reduce its requirements.

FDA recognizes that the FDA Export

Reform and Enhancement Act was

designed to facilitate exports of

unapproved products from the United

States and, through the draft guidance

document, proposed rules, and other

contacts with individual firms, the

agency worked to reduce or eliminate

export requirements and facilitate

exports. FDA drafted the proposed rule

to implement the notification and

recordkeeping requirements in section

802 of the act and to establish a single,

consistent agency position regarding the

types of records it would examine to

determine compliance with section

65430 Federal Register / Vol. 66, No. 244 / Wednesday, December 19, 2001 / Rules and Regulations

801(e)(1) of the act. In general, FDA

sought to establish recordkeeping

requirements to inform firms about the

types of records that would demonstrate

a firm’s compliance with the act and to

ensure that the records could be linked

to a specific export. For example, an

export record stating only that ‘‘product

X was exported’’ would be almost

useless if multiple versions of the

product exist (because neither FDA nor

the exporter would be able to tell what

specific version of the product was

exported) or if the product was exported

to multiple countries (because neither

FDA nor the exporter would be able to

alert foreign government officials if a

problem developed or such

communications became necessary).

FDA disagrees, therefore, with those

comments asserting that the proposed

rule was ‘‘burdensome’’ or

‘‘unnecessary.’’ The agency’s interest is

to implement sections 801(e)(1) and 802

of the act and section 351(h) of the PHS

Act in a consistent, uniform manner that

will generate notifications and records

that will be useful in determining

compliance with the act and will have

some value both to the exporter and the

agency. Furthermore, as discussed later

in this document, FDA has, in response

to other comments, revised or

eliminated various requirements. These

changes to the final rule should make it

easier for exporters to comply with the

act.

(Comment 2) Several comments

argued that FDA lacks authority to issue

any regulations pertaining to exports.

One comment conceded that the act

imposes substantive requirements and

that FDA can exercise its enforcement

authority if a manufacturer violates the

export requirements, but argued that

FDA does not have ‘‘carte blanche’’ to

require exporters to retain records to

defend against a possible FDA

enforcement action before the agency

alleges that a violation has occurred.

The comment added that FDA cannot

require records as a substantive

requirement so that failure to maintain

records would be the basis for

regulatory action. Another comment

asserted that FDA had failed to show

that Congress expected FDA to impose

new recordkeeping and reporting

requirements on industry or how the

requirements would be important in

fulfilling FDA’s statutory obligations.

Another comment simply stated that

the act does not require regulations or

the recordkeeping described in the

proposed rule.

Other comments cited remarks by one

legislator to emphasize that no export

restrictions would be preferable.

FDA’s authority to issue regulations

stems from section 701(a) and (b) of the

act (21 U.S.C. 371(a) and (b)). Section

701(a) of the act gives the agency

authority to issue regulations for the

efficient enforcement of the act unless

an exception exists, and section 701(b)

of the act specifically authorizes the

Departments of Health and Human

Services (DHHS) and the Treasury to

jointly prescribe and for the DHHS to

promulgate regulations for the efficient

enforcement of section 801 of the act.

Given these provisions of the act, FDA

clearly has the authority to promulgate

regulations concerning exports and to

issue regulations for the efficient

enforcement of sections 801 and 802 of

the act.

Additional discussion of FDA’s

authority to issue regulations for the

efficient enforcement of section 351(h)

of the PHS Act is included in the

responses to the comments to § 1.101(c)

(21 CFR 1.101(c)) (see section II. D

below).

Records enable a person to show, and

for FDA to verify, that the person has

complied with its legal obligations. The

FDA Export Reform and Enhancement

Act, with very few exceptions,

eliminated any need for prior FDA

approval of an export, so determining

whether a person has complied with the

act must depend on an examination of

records. If no records can be required,

a firm cannot demonstrate that it met all

applicable export requirements, and

FDA would be unable to verify such

compliance.

Further, section 802(g) of the act

clearly states, in part, that, ‘‘Any

exporter of a drug or device shall

maintain records of all drugs or devices

exported and the countries to which

they were exported’’ (emphasis added).

The most straightforward interpretation

of this provision is that persons

exporting drugs or devices under

section 802 of the act must keep records

on the exported product and the foreign

countries receiving the product. As a

result, the final rule, at § 1.101(e),

describes the types of information that

would demonstrate compliance with

section 802(g) of the act. Failure to keep

the records required by section 802(g) of

the act would be a violation of section

802 of the act. As a result, the product

would no longer have section 802 of the

act’s exemption from the applicable

misbranding, adulteration, approval,

and prohibited act provisions of the act.

The product and/or the person

responsible could be subject to

enforcement action under the act.

FDA acknowledges that one legislator,

in his remarks accompanying the

passage of the FDA Export Reform and

Enhancement Act, indicated a desire to

have no export requirements at all.

Nevertheless, the FDA Export Reform

and Enhancement Act did contain

requirements for exports, and one

cannot reasonably argue that Congress,

in enacting those requirements,

intended them to be ignored, rendered

meaningless, or made unenforceable.

When interpreting legislation, it is a

well-settled principle that, ‘‘Absent

clear congressional intent to the

contrary, we will assume the legislature

did not intend to pass vain or

meaningless legislation’’ (Coyne &

Delany v. Blue Cross & Blue Shield of

Virginia, 102 F.3d 712, 715 (4th Cir.

1996); see also Halverson v. Slater, 129

F.3d 180, 185 (D.C. Cir. 1997) (Congress

cannot be presumed to do a futile

thing)).

(Comment 3) Two comments argued

that the proposal was deficient or had

to be withdrawn because FDA had not

shown how the proposal protects the

public health of U.S. citizens or foreign

citizens or benefits consumers.

FDA disagrees with the comments.

The rule is intended to implement

sections 801(e) and 802(g) of the act and

section 351(h) of the PHS Act by

describing the types of records that

should be kept in order to demonstrate

that the export complied with the act

and by describing the contents of the

simple notification, which must be sent

to FDA for certain exports under section

802 of the act. None of these provisions

requires a demonstration of the public

health benefits for United States or

foreign citizens as a prerequisite to

rulemaking. Thus, a preamble

discussion concerning public health

benefits to U.S. citizens or foreign

citizens or possible congressional

expectations for a regulation is

unnecessary.

Nevertheless, the act and, by

extension, the final rule indirectly

benefits the public health in the United

States and in foreign countries. For

example, sections 801(e) and 802 of the

act permit exports of products that are

not approved for use in the United

States. (If the products were approved

for use and otherwise in compliance

with the act’s requirements for

marketing and sale in the United States,

they would not be subject to the export

provisions of the act.) Consequently, to

the extent that records can show that a

product not approved for use in the

United States. was, in fact, exported,

there would be no U.S. public health

concern that a product whose safety or

effectiveness has not been established

had entered domestic commerce.

As another example, section 351(h) of

the PHS Act states, in part, that exports

Federal Register / Vol. 66, No. 244 / Wednesday, December 19, 2001 / Rules and Regulations 65431

of a partially processed biological

product must conform with current

good manufacturing practice (CGMP)

requirements. CGMP requirements are,

in part, intended to ensure that the

product complies with certain

adulteration and misbranding

provisions. Obviously, consumers

benefit by not receiving products that do

not comply with these requirements.

The final rule, at § 1.101(c)(2), reflects

the CGMP requirement adopted by

Congress by requiring records

demonstrating that the partially

processed biological product was

manufactured in conformity with

CGMPs. If FDA could not require

exporting firms to keep CGMP records,

there would be no way to demonstrate

or to verify that the partially processed

biological product met CGMPs, was not

contaminated, was correctly labeled and

stored, and was otherwise in

compliance with section 351(h) of the

PHS Act and entitled to the provision’s

exemption from the requirements of the

PHS Act and the act. This

demonstration clearly benefits the

public health.

(Comment 4) One comment said that

the present system is ‘‘working well’’ so

new regulations are unnecessary. Other

comments said the statute was

sufficiently clear so no regulations are

needed. Another comment asked that

foods be excluded from the rule; the

comment said, in part, that FDA did not

understand the global food market or

recognize congressional intent in

adopting the FDA Export Reform and

Enhancement Act. (The comment also

made specific statements against

individual provisions in the proposed

rule and other claims; FDA addresses

those comments elsewhere in this

preamble.)

FDA disagrees with the comments.

The FDA Export Reform and

Enhancement Act affected regulated

industries differently. For example, for

foods, no significant changes in the

export authority occurred, whereas for

drugs and devices, the new export

provisions offered new authorities for

exporting investigational products,

products approved by certain foreign

countries, and products intended to ‘‘fill

the pipeline’’ while awaiting approval

in a foreign country.

As another example, before the

enactment of the FDA Export Reform

and Enhancement Act, unapproved new

animal drugs were subject to the export

requirements in section 802 of the act,

and then-section 801(e) of the act did

not permit the exportation of animal

drugs that were ‘‘unsafe’’ within the

meaning of section 512 of the act (21

U.S.C. 360b). After the enactment of the

FDA Export Reform and Enhancement

Act, animal drugs are excluded from

section 802 of the act and, except for

‘‘banned’’ animal drugs which cannot be

exported, now can be exported if they

comply with the export requirements in

section 801(e)(1) of the act.

Yet, while the new export provisions

affected regulated industries differently,

certain statutory requirements (such as

compliance with section 801(e)(1) of the

act) are common to all exports. Other

statutory requirements, particularly

those in section 802 of the act, are

common to drugs and devices, or to

drugs, biological products, and devices.

In cases where a particular statutory

requirement applied to more than one

type of product, the agency decided that

its interpretation and implementation of

that statutory requirement should also

be the same, regardless of the product

involved. In other words, the rule

implementing section 802(g) of the act

should be the same for drug exporters as

it is for device exporters because both

are subject to section 802(g) of the act.

Similarly, the requirements in section

801(e)(1) of the act are incorporated by

referring to section 802(f) of the act and

section 351(h) of the PHS Act, and

continue to operate as a freestanding

export provision for foods, cosmetics,

certain drugs, and devices. The

interpretation of section 801(e)(1) of the

act should be consistent regardless of

the product involved.

So, while the agency’s

implementation of the export provisions

might have been sufficiently clear to

some individuals and ‘‘working well’’

for certain industries in certain cases,

the absence of a single, consistent

interpretation of those statutory

provisions created the possibility that

different FDA centers would implement

the same provisions of the act

differently. The agency, therefore,

formed a multi-center and multi-office

group to develop FDA’s policies and

interpretations for the FDA Export

Reform and Enhancement Act. The draft

guidance document (which appeared in

the Federal Register of June 12, 1998

(63 FR 32219)), the proposed ‘‘import

for export’’ rule (which appeared in the

Federal Register on November 24, 1998

(63 FR 64930)), and this rule represent

the consensus positions and

interpretations of the agency’s centers

and offices.

In short, a rule will help ensure that

the export requirements ‘‘work well’’ for

all, rather than some, regulated

industries and that they work the same

way for all regulated industries.

As for the comment requesting that

FDA exclude food products from the

rule, FDA declines to adopt the

comment’s suggestion. Section 801(e)(1)

of the act clearly and unequivocally

applies to food exports, so, absent a

compelling reason that would warrant

separate or different export regulations

for food, FDA declines to exclude food

products from the final rule.

(Comment 5) One comment said that

the proposed rule contained the ‘‘same

objectionable provisions’’ that were in

the draft guidance document on exports.

While the agency disagrees with the

comment’s characterization of the rule,

the proposed rule and guidance

document contain the same concepts

because FDA prepared the draft

guidance document and its exportrelated proposed rules simultaneously.

However, the administrative clearance

and publication procedures and

statutory requirements that apply to

guidance documents are much simpler

than those that apply to proposed rules.

Consequently, the proposed rules

appeared several months after FDA had

published the draft guidance document

in the Federal Register. In preparing

this final rule, FDA reviewed both the

comments submitted to the proposed

rule and relevant comments submitted

to the draft guidance document.

(Comment 6) One comment accused

the agency of engaging in ‘‘regulatory

imperialism’’ that is ‘‘neither desired

nor needed by other countries’’ and that

the rule reflected what it called ‘‘FDA’s

continued belief that the agency is not

simply the public-health agency for the

United States, but for the entire world.’’

FDA disagrees with the comment. The

rule implements parts of sections

801(e)(1) and 802 of the act and section

351(h) of the PHS Act. These provisions

do not require, or expect, FDA to be a

public health agency ‘‘for the entire

world,’’ but the act and section 351(h)

of the PHS Act do establish

requirements on exports of products

that cannot be legally marketed or sold

under the act in the United States, and

FDA is charged with enforcing the act

and section 351 of the PHS Act. The

final rule, as stated earlier, creates a

single, uniform interpretation for certain

export requirements by describing the

types of records the agency would

examine in order to determine whether

a person complied with the law and by

describing the content of the

notification, if required by the act, to be

sent to FDA.

(Comment 7) Two comments involved

investigational products. One comment

said the proposal would make it more

difficult for U.S. firms to conduct

foreign clinical trials for drug and

biological products. The other comment

said the proposal fails to recognize that

food samples are often exported for

65432 Federal Register / Vol. 66, No. 244 / Wednesday, December 19, 2001 / Rules and Regulations

testing or for product research and

development. This comment said these

food products are tested on site under

controlled conditions or used for

demonstration purposes and are never

intended for human consumption in

foreign countries. The comment added

that these food products are never

‘‘approved’’ by foreign governments

because they are not intended for retail

markets, and said that the proposal

overlooked the need for global market

development.

For clinical investigations involving

human drugs and biological products,

the FDA Export Reform and

Enhancement Act created several

avenues for exporting such products.

First, if the drug or biological product

has been approved for marketing in any

of the countries identified in section

802(b)(1) of the act (the so-called ‘‘listed

countries’’), the product may be shipped

to any country for any purpose; this

would include investigational use, and

the export would be subject to the rule’s

notification and recordkeeping

requirements.

Second, if the drug or biological

product is exported for investigational

use in any listed country and is not

approved in any listed country, section

802(c) of the act authorizes its export.

These exports are not subject to the

notification requirement in section

802(g) of the act, but are subject to

section 801(e)(1) of the act and to

certain other requirements in section

802 of the act. Most drugs and biological

products exported for investigational

use would probably be subject to this

provision of the act and § 1.101(b) and

(g).

Third, the clinical investigation could

be conducted under an investigational

new drug application (IND). In these

cases, only the IND requirements at part

312 (21 CFR part 312) would apply.

Fourth, the person could seek

permission to export the drug or

biological product, without obtaining an

IND, under § 312.110. This program,

known as the ‘‘312 program,’’ pre-dates

the FDA Export Reform and

Enhancement Act and allows exports for

investigational use.

FDA is preparing a proposed rule that

would address exports of drugs and

biological products for investigational

use and also streamline the

requirements for the ‘‘312 program.’’

Additionally, FDA has revised

§ 1.101(b)(2) and other parts of this rule

to simplify the requirements for

demonstrating compliance with section

801(e)(1) of the act. These revisions

significantly change the records

required for demonstrating compliance

with section 801(e)(1) of the act and are

discussed later in this document.

As for foods exported for

investigational or research uses, the act

does not contain any special provisions

for such products. There is no apparent

legal basis to distinguish them from

other food exports.

However, section 801(e)(1)(B) of the

act only requires that the product

intended for export be ‘‘not in conflict’’

with the foreign country’s laws. This is

considerably different—and far less

restrictive than requiring that the

exported product be ‘‘approved’’ in the

foreign country. Market authorization is

relevant only for drugs and devices

exported under section 802(b)(1) of the

act, because that provision of the act

allows exports of unapproved drugs or

devices if they have received valid

marketing authorization from any listed

country, and comply with the other

applicable requirements of section 802

of the act. Thus, in the food testing and

research and development example

cited by the comment, the export would

comply with section 801(e)(1)(B) of the

act if such activities do not conflict with

the laws of the importing country.

Additionally, as stated earlier, revised

§ 1.101(b)(2) greatly simplifies the types

of records needed to show that the

product is not in conflict with the

foreign country’s laws.

(Comment 8) One comment objected

to notifying FDA at all if a device is

International Organization for

Standardization (ISO)–9001 certified or

has received approval from a notified

body so that it may be commercially

marketed in the EU. The comment said

the Conformite European (CE) mark

should exempt the device from

notification and said that small

countries will find it in their best

interests to accept the CE mark as their

acceptance standard.

FDA declines to exempt CE-marked or

ISO–9001 certified devices from the

notification requirement. The act

requires notification for drugs and

devices exported under section 802(b) of

the act. The act does not exempt devices

that bear a CE mark or meet ISO–9001

standards from the act’s export

requirements. The agency notes that

such devices may qualify for export

under section 801(e)(1) of the act. In

such instances, no notification would be

required as long as the export complies

with section 801(e)(1) of the act.

As for the comment’s assertion that

small countries should accept the CE

mark, such matters are outside the scope

of this rule. FDA cannot require other

countries to accept a CE mark.

(Comment 9) The preamble to the

proposed rule described the

requirements in section 802(f) of the act.

It noted that the act prohibits exports of

a drug or device if the product is the

subject of a determination by FDA or by

the U.S. Department of Agriculture

(USDA) that the probability of

reimportation of the exported drug or

device would present an imminent

hazard to the public health and safety of

the United States. The preamble to the

proposed rule noted that veterinary

biological products are subject to USDA

jurisdiction (64 FR 15944, col. 3). One

comment requested that FDA remove

the reference to veterinary biological

products.

The statement in the preamble to the

proposed rule accurately described the

USDA’s jurisdiction. However, the

reference to veterinary biological

products was inappropriate because

sections 801(e)(1) and 802 of the act

apply only to FDA-regulated products.

No changes to the final rule are

necessary, though, because the reference

to veterinary biological products

appeared only in the preamble to the

proposed rule.

(Comment 10) Two comments said

the rule failed to address or to

distinguish between items that are

imported as components or ingredients

that are used in products destined for

export and products that are

manufactured solely for export

purposes.

In the Federal Register of November

24, 1998 (63 FR 64930), FDA published

a proposed rule regarding ‘‘import for

export’’ under section 801(d) of the act.

The proposal described the reporting

and recordkeeping requirements for

articles that are imported into the

United States and are later further

processed or incorporated into items for

export.

The import for export proposal,

however, focused on requirements

pertaining to the imported article,

whereas this final rule pertains to the

notification and recordkeeping

requirements for exported products. In

other words, the import for export

provision in section 801(d) of the act

does not relieve ‘‘import for export’’

products from satisfying the export

requirements in sections 801(e) and 802

of the act or section 351(h) of the PHS

Act. Thus, one should read this final

rule in conjunction with the import for

export proposal. FDA intends to finalize

the import for export proposal in the

near future.

B. Scope (Section 1.101(a))

Section 1.101(a) would describe the

provision’s scope as covering

notifications and records required for

human drug, biological product, device,

Federal Register / Vol. 66, No. 244 / Wednesday, December 19, 2001 / Rules and Regulations 65433

animal drug, food, and cosmetic exports

under sections 801 or 802 of the act or

section 351 of the PHS Act.

(Comment 11) One comment asked if

a product meeting all applicable

marketing requirements in the United

States, but labeled in a foreign language

and intended for the same uses as those

approved by FDA, would be exempt

from the rule.

FDA considers a product which is

labeled solely in a foreign language and

whose foreign-language labeling has not

been approved by FDA (where such

FDA approval of labeling is required) to

be an unapproved product and subject

to the act’s approval requirements. FDA

approval, in general, includes approval

of a product’s labeling (see, e.g., sections

505(b)(1)(F), (d)(5), and (d)(7);

512(a)(1)(B), (a)(2)(C), and (b)(1)(F); and

515(c)(1)(F), and (d)(2) of the act (21

U.S.C. 355(b)(1)(F), (d)(5), and (d)(7);

360b(a)(1)(B), (a)(2)(C), and (b)(1)(F);

and 360e(c)(1)(F), and (d)(2))). Thus, if

FDA has not reviewed or approved the

foreign-language label, the product is

unapproved and would not be exempt

from this rule, even if an identical, FDAapproved product with approved

labeling exists.

For information regarding the

exportation of products legally marketed

in the United States that are

accompanied by FDA-approved

labeling, please see comment 28.

(Comment 12) One comment objected

to the rule’s scope, saying that it would

cover products that foreign countries

might regulate differently from FDA.

The comment gave an example of

patient [disposal] washcloths, which

would be medical devices in the United

States, but would be cosmetics in Brazil.

The comment said FDA should concern

itself with compliance with FDA

requirements for domestic shipments.

FDA disagrees with the comment. The

most logical interpretation of the act is

to have FDA regulate products, and

determine whether products are exempt

from requirements applicable to

products marketed, distributed, or sold

in the United States because they

qualify for export under sections 801(e)

or 802 of the act or section 351(h) of the

PHS Act, according to their

classification or type in the United

States. Thus, a product that would be

considered a device in the United States

remains a device under the export

provisions even though a foreign

country might regulate it differently or

might not regulate it at all. It would be

both inefficient and resource-intensive

for exporters and FDA to apply the

export requirements based on the

product category in which a particular

foreign country regulates the product.

Moreover, such an approach is

inconsistent with the structure of the

act’s export provisions. The export

provisions are a means by which an

exporter can ship products that would

otherwise be subject to the act’s

domestic provisions. The purposes

underlying the export provisions would

be undermined if a product could

qualify for export under the rules

applicable to the product category of the

importing country rather than based on

how the product is regulated in the

United States.

(Comment 13) One comment said the

proposal failed to address specific

categories of food products. The

comment said that food additives and

dietary supplements are ‘‘foods’’ and

subject to section 801(e)(1) of the act,

but said color additives are not foods,

drugs, or any other product mentioned

in proposed § 1.101(a). The comment

asked if color additives are exempt from

the rule.

The act’s definitions of ‘‘food,’’

‘‘drug,’’ and ‘‘cosmetic’’ include

components of such products (see

section 201(f)(3), (g)(1)(D), and (i)(2) of

the act (21 U.S.C. 321(f)(3), (g)(1)(D),

and (i)(2)). Section 201(t)(1)(B) of the

act, in general, defines a ‘‘color

additive’’ as a material that, when added

or applied to a food, drug, or cosmetic,

or to the human body or any part

thereof, is capable of imparting color.

Most color additives would be

components of a food, drug, or cosmetic

and, as a result, be subject to the act’s

export requirements for foods, drugs, or

cosmetics. Only those color additives

that are not classified as a food, drug, or

cosmetic ‘‘component’’ fall outside

sections 801(e) and 802 of the act. In

such circumstances, if the color additive

cannot be legally marketed, distributed,

or sold in the United States because it

does not comply with the act’s

requirements for color additives, it may

not be exported.

(Comment 14) FDA, on its own

initiative, has replaced the word

‘‘biologic’’ or ‘‘biologics’’ with

‘‘biological product’’ or ‘‘biological

products’’ throughout the rule. This

change has no substantive effect and is

intended only to use the term used in

the PHS Act for these products.

C. Recordkeeping Requirements for

Human Drugs, Biological Products,

Devices, Animal Drugs, Foods, and

Cosmetics Exported Under or Subject to

Section 801(e)(1) of the Act (Section

1.101(b))

1. General Remarks

Section 1.101(b) would establish the

recordkeeping requirements for human

drugs, biological products, devices,

animal drugs, foods, and cosmetics

exported under or subject to section

801(e)(1) of the act.

(Comment 15) Several comments

challenged FDA’s authority to issue any

recordkeeping regulations for section

801(e)(1) of the act. Two comments

claimed that the act only requires

records under section 802(g) of the act,

so FDA cannot issue recordkeeping

requirements for section 801(e)(1) of the

act. One comment added that the

proposed recordkeeping requirements

went ‘‘far beyond’’ the ‘‘simple

recordkeeping’’ requirements specified

in the act. Two comments argued that

the act did not require records or

prescribe what records are to be kept,

although one comment acknowledged

that companies should keep records to

demonstrate compliance with the act.

According to these comments,

companies have the discretion to keep

any records they wish to demonstrate

compliance with section 801(e)(1) of the

act.

FDA has ample legal authority to

require records. Section 701(b) of the act

provides the principal legal basis for the

recordkeeping requirements in

§ 1.101(b). Section 1.101(b) reflects the

basic export requirements in section

801(e)(1) of the act that apply to all

exports under sections 801(e) and 802 of

the act, regardless of whether the

product is a food, human or animal

drug, biological product, device, or

cosmetic. The agency drafted this

provision to provide a single, consistent

interpretation of requirements in section

801(e)(1) of the act to both industry and

to the agency’s own components. This

should result in less confusion and

fewer disagreements as to whether a

particular document adequately

demonstrates compliance with section

801(e)(1) of the act (which would occur

if no regulation existed and firms had

total discretion over what records to

keep). FDA has, however, significantly

revised § 1.101(b) in response to the

comments (by shortening the

recordkeeping period and by clarifying

the types of records needed to show that

the export meets the foreign purchaser’s

specifications or does not conflict with

foreign laws), and discusses those

changes later in this document.

For the records required in § 1.101(e),

section 701(a) of the act provides

rulemaking authority for the efficient

enforcement of the act, and this

authority is independent of the

recordkeeping requirement in section

802(g) of the act. FDA further notes that,

contrary to one comment’s claim,

section 802(g) of the act does not refer

to ‘‘simple recordkeeping.’’ Instead,

65434 Federal Register / Vol. 66, No. 244 / Wednesday, December 19, 2001 / Rules and Regulations

section 802(g) of the act refers to a

‘‘simple notification’’ that is to be sent

to FDA, and requires drug and device

exporters to ‘‘maintain records of all

drugs or devices exported and the

countries to which they were exported.’’

(Comment 16) One comment argued

that the proposal contains requirements

and recommendations that are irrelevant

or inappropriate to specific products,

such as bulk agricultural commodities.

The comment asked FDA to exclude

foods from the rule.

FDA declines to exclude foods from

the rule. Section 801(e)(1) of the act

specifically includes foods, so it is more

practical and appropriate to include

foods as part of this rule so that the rule

applies equally to all products subject to

section 801(e)(1) of the act.

Section 801(e)(1) of the act also does

not distinguish between types of food,

so it would be inappropriate to create

exemptions or exceptions for specific

food products. FDA has, however,

revised some requirements in § 1.101(b)

to make it easier to demonstrate

compliance with section 801(e)(1) of the

act. FDA is unable to respond further to

the comment because it did not identify

which requirements were supposedly

irrelevant or inappropriate or explain

why they were irrelevant or

inappropriate.

(Comment 17) Proposed § 1.101(b)(1)

would require records to be kept at least

5 years after the date of exportation and

made available to FDA for review and

copying.

Several comments protested that the

5-year period was excessive. One

comment claimed that food

manufacturers do not even keep records

regarding foreign regulatory

requirements and that it would be

unrealistic and unacceptable to expect

them to do so. Two comments suggested

that the retention period be 2 years,

while another comment suggested that,

for drugs, the period be 1 year after the

product’s expiration date.

The agency has revised the rule to

make the record retention period

coincide with the CGMP or quality

systems (QS) regulations applicable to

the product. So, for example, the CGMP

record retention period would apply to

drug exports, and the QS regulation

record retention period would apply to

device exports. FDA decided to use

CGMP and QS regulation record

retention periods because most records

described in § 1.101 would be contained

in a company’s CGMP or QS regulation

records. As a result, firms should find

it easier to maintain their export records

in the same manner and for the same

period of time as their CGMP or QS

regulation records.

For food and cosmetic exports, the

food CGMP regulations do not contain

a recordkeeping requirement, and there

is no CGMP regulation for cosmetics.

Therefore, because the food CGMP and

cosmetic regulations do not require

records, FDA has revised § 1.101(b)(1) to

require records for food and cosmetic

exports to be kept for 3 years after the

date of exportation. The 3-year period is

consistent with the CGMP record

retention period for drugs (see 21 CFR

211.180(a)).

As for the comment claiming that

food manufacturers do not keep records

of foreign regulatory requirements,

neither the proposed nor final rules

required them to do so. Section

1.101(b)(2) requires records

demonstrating that the product does not

conflict with the laws of the importing

country. The final rule states that such

records can consist of either: (1) A letter

from an appropriate foreign government

agency, department, or body stating that

the product has marketing approval

from the foreign government or does not

conflict with the foreign government’s

laws; or (2) a notarized certification by

a responsible company official in the

United States that the product does not

conflict with the importing country’s

laws and includes a statement

acknowledging that he or she is subject

to 18 U.S.C. 1001. Thus, showing that

the export does not conflict with the

foreign country’s laws does not require

a person to keep records regarding

foreign regulatory requirements.

(Comment 18) One comment argued

that the recordkeeping obligations do

not operate until a firm begins to export

a product.

FDA disagrees with the comment.

Although the rule does not specify

when a firm should begin keeping

export records, FDA expects firms to

begin creating and keeping records

before they export a product under

sections 801(e) or 802 of the act or

section 351(h) of the PHS Act. For

example, to show whether the export

meets the foreign purchaser’s

specifications (as required by section

801(e)(1)(A) of the act), an exporter

would keep a copy of the incoming

purchase order showing which items

the foreign purchaser wanted. It would

be illogical for the exporter to ask the

foreign purchaser to provide a purchase

order when the exporter ships or after

the exporter has shipped the products to

the foreign purchaser or to start keeping

such records after he or she has

exported the product.

In other words, a prudent firm should

know whether exports are permitted or

whether the export meets various

obligations under the act or the PHS Act

before the firm actually exports the

product. Yet, even in the absence of this

requirement, most firms would have the

foreign purchaser’s specifications before

they export the product because they

would want to ensure that they are

manufacturing and exporting the correct

item and to reassure the foreign

purchaser that the exported item meets

the purchaser’s needs or expectations.

Moreover, for purposes of the act, if a

product does not comply with the

applicable requirements for domestic

marketing, distribution, and sale, and

the manufacturer lacks evidence that the

product is intended for export and

meets the requirements of an applicable

export exemption (i.e., sections 801 or

802 of the act or section 351(h) of the

PHS Act), the product would be subject

to enforcement action for violating the

act.

2. Foreign Purchaser’s Specifications

(Section 1.101(b)(1))

To demonstrate that the exported

product meets the foreign purchaser’s

specifications, § 1.101(b)(1) would

require records describing or listing the

product specifications requested by the

foreign purchaser. The proposal

indicated such records could include

details about the product (e.g., dosage

strength, dosage form, purity, quality,

operating parameters, composition) and

any manufacturing specifications

requested by the foreign purchaser (e.g.,

type of sterilization process to be used,

compliance with a particular

manufacturing standard).

(Comment 19) Most comments

submitted in response to proposed

§ 1.101(b)(1) interpreted the provision as

requiring extremely detailed product

specifications and protested the level of

detail that they believed the rule

required. For example, some comments

said that in vitro diagnostic devices are

not manufactured to unique

specifications and are instead sold to

the general laboratory or scientific

community. These comments said

package inserts describing product

specifications, product labeling, or some

indication that the in vitro diagnostic

device met design criteria should be

acceptable.

Other comments said that, for food

products or medical devices, contracts

or purchase orders between exporters

and foreign purchasers should suffice.

One comment added that for devices

FDA should not require specifications to

be in English; the comment said

requiring foreign purchasers to draft

original specifications in English would

be cumbersome and that product

labeling is used worldwide as the basis

for product performance characteristics.

Federal Register / Vol. 66, No. 244 / Wednesday, December 19, 2001 / Rules and Regulations 65435

One comment from a trade association

for human drug manufacturers said

CGMP records should suffice, but also

claimed that the act does not authorize

FDA to require any records. In contrast,

another comment said that some foreign

purchasers have limited requirements

and may not require detailed product

specifications.

One comment said that recipes,

manufacturing specifications, and

processes are proprietary information

protected under ‘‘international

agreements’’ and should not be available

to FDA for review and copying. The

comment accused FDA of trying to

obtain proprietary information with the

intent to share such information with

foreign entities.

Only one comment stated that the

records described in proposed

§ 1.101(b)(1) would not present any

problem. The comment explained that a

manufacturer would require a detailed

specification for the custom

manufacture of any product that is not

regularly manufactured or sold in the

United States.

FDA believes that many comments

misinterpreted the rule. FDA’s principal

interest is to link a record to a particular

export to verify that the exported

product met the foreign purchaser’s

specifications. For example, if the

foreign purchaser sought 5,000 bottles of

drug X tablets, with each tablet at a 50

milligram (mg) dose, FDA would look

for records to show that a particular

shipment of drug X to the foreign

purchaser consisted of 5,000 bottles of

50 mg of drug X tablets. Records stating

only that drug X was shipped to the

foreign purchaser would not be

satisfactory because they would provide

no information regarding the foreign

purchaser’s specifications or how the

export shipment met those

specifications.

The final rule does not prescribe any

particular degree of detail in the foreign

purchaser’s specifications. The agency

has revised § 1.101(b)(1) to clarify that

the records need only contain sufficient

detail to match the foreign purchaser’s

specifications to a particular export. If

CGMP records contain information on

the foreign purchaser’s specifications,

they may be sufficient under

§ 1.101(b)(1).

As for translations, the specifications

should be translated, if necessary, to

facilitate a determination as to whether

the exported product meets the foreign

purchaser’s specifications. The agency

has no preference whether the foreign

purchaser or the U.S. manufacturer or

exporter does the translation. However,

the U.S. manufacturer or exporter

should know whether the exported

product meets the foreign purchaser’s

specifications, so it is reasonable to

expect that the U.S. manufacturer or

exporter would understand the foreign

purchaser’s specifications and be able to

communicate those specifications in

English.

FDA disagrees with the comment that

claimed that FDA wants to obtain

proprietary information in order to

transmit that information to foreign

entities. Such claims are totally

unfounded. FDA is very conscious of its

legal obligations to protect trade secrets

and confidential commercial

information (see section 301(j) of the act

(21 U.S.C. 331(j)), 21 CFR part 20) and

has regulations governing

communications with foreign

governments (see 21 CFR 20.89). Those

regulations contain several safeguards,

such as sponsor consent, to protect any

exchanges of confidential commercial

information with foreign governments.

(Comment 20) One comment asked

how often foreign purchasers must

provide product specifications. The

comment explained that specifications

are only as detailed as necessary to meet

the purchaser’s needs, so that if the

foreign purchaser changes or amends its

specifications, the foreign purchaser

should be expected to provide an

amendment to the U.S. manufacturer.

The comment suggested that FDA

interpret the rule to require foreign

purchasers to provide complete

specifications only with the initial

order. If the foreign purchaser

subsequently changed the

specifications, the foreign purchaser

would only provide the changes to the

manufacturer (rather than a complete set

of specifications). The comment added

that batch records would be kept in

accordance with existing recordkeeping

requirements and would be made

available during an inspection.

FDA does not expect complete

specifications to accompany every order

of the same product. For example, if an

exporter signs a contract to ship the

same item to a foreign purchaser on a

monthly basis, the agency would not

expect the exporter to obtain complete

specifications for each monthly

shipment, but would expect the

exporter to have specifications that

applied to the initial shipment and

records showing that subsequent

shipments correspond to the same

initial specifications. The agency’s

principal interest is to link records to

specific export shipments to verify that

a particular exported product met the

foreign purchaser’s specifications. The

level of detail in the specifications may

vary between orders, but the agency

expects manufacturers to be able to

demonstrate that the exported product

met the foreign purchaser’s

specifications.

3. Not in Conflict With the Foreign

Country’s Laws (Section 1.101(b)(2))

Proposed § 1.101(b)(2) would require

the exporter to maintain documentation

that demonstrates that the exported

product does not conflict with the

importing country’s laws. The proposal

stated that this would normally consist

of a letter from the appropriate foreign

government agency, department, or

other authorized body stating that the

product has marketing approval from

the foreign government or does not

conflict with that country’s laws. The

proposal would not consider letters or

other documents from nongovernmental

bodies or persons, such as company

officials or attorneys in the foreign

country, to be satisfactory for this

purpose.

(Comment 21) Many comments

objected strongly to proposed

§ 1.101(b)(2). In general, most comments

said it would be difficult, timeconsuming, burdensome, or impossible

to obtain a letter from a foreign

government. Other comments argued

that foreign governments might not

regulate the exported product so one

could not demonstrate that the product

was not in conflict with foreign laws or

that foreign governments might not be

willing to provide a letter due to

disinterest, lack of staff, or a desire to

protect domestic industry. A few

comments suggested that manufacturers

should not be responsible for

determining whether a product does not

conflict with foreign laws, arguing that

importers, purchasers, or distributors in

the foreign country should bear that

responsibility.

Many comments advocated

alternative approaches that would

eliminate any need for a letter from the

foreign government. Most comments

favored a certification, declaration,

letter, or memo by a company official in

the foreign country, a distributor in the

foreign country, by a foreign subsidiary,

an attorney (either in the United States

or in the foreign country), a notified

body (if the export were to Europe or

Japan), or a foreign government official,

or some combination of these firms or

persons. These comments often

explained that firms are responsible for

meeting local requirements and

supported the use of certifications or

letters from company officials.

One comment suggested using only

contractual documents between the

exporter and importer. The comment

said previous FDA guidance to the grain

handling industry used this approach.

65436 Federal Register / Vol. 66, No. 244 / Wednesday, December 19, 2001 / Rules and Regulations

Another comment said a copy of a

valid import license should be sufficient

because these licenses usually require

inspection by the foreign government.

The comment explained that a

manufacturer will not ship a product if

its export costs are significant, and it

will not ship a product that does not

comply with local requirements because

the cost of returning the product would

be too great.

One comment said a label stating ‘‘For

export only’’ should suffice to show that

the product does not conflict with the

foreign country’s laws.

Section 1.101(b)(2) was intended to

provide the most reliable indicator that

the exported product did not conflict

with the foreign country’s laws.

However, in light of the comments, FDA

has revised § 1.101(b)(2) to accept, as an

alternative to a letter from the foreign

government, a notarized certification

from a responsible company official in

the United States that the product is not

in conflict with the foreign country’s

laws. The certification must include a

statement acknowledging that the

responsible company official making the

certification is subject to the provisions

of 18 U.S.C. 1001. This statutory

provision makes it a criminal offense to

knowingly and willfully make a false or

fraudulent statement, or make or use a

false document, in any matter within

the jurisdiction of a department or

agency of the United States. This

statutory provision also makes it a

criminal offense to knowingly and

willfully falsify, conceal, or cover up by

any trick, scheme, or device a material

fact in any matter within the

jurisdiction of a department or agency of

the United States. This revision should

address the concerns expressed in most

comments and eliminate any potential

delays or obstacles in demonstrating

compliance with section 801(e)(1)(B) of

the act. FDA reserves the authority to

request additional documentation

demonstrating that the export is not in

conflict with the foreign country’s laws

if questions arise regarding a

certification.

FDA declines to amend the rule to

accept contracts as evidence that an

export is not in conflict with a foreign

country’s laws. While parties entering

contracts usually intend to execute

legally binding obligations, they do not

necessarily take into account whether

the export complies with foreign laws.

(Comment 22) A few comments

disputed FDA’s authority to require a

letter from a foreign government. They

noted that a particular legislator

considered such a requirement to be

objectionable or simply declared that

FDA exceeded its legal authority.

As stated earlier, FDA has revised

§ 1.101(b)(2) to accept certifications

from company officials as an alternative

to a letter from a foreign government

agency.

Additionally, as discussed earlier,

FDA has ample legal authority under

section 701 of the act to issue

regulations for the efficient enforcement

of the act.

(Comment 23) One comment

interpreted § 1.101(b)(2) as being

satisfied if the foreign country had

issued an approval letter or published

some document indicating that the

product was approved.

Copies of approval letters or other

government-issued documents

indicating government approval are

acceptable to show that the product is

not in conflict with the foreign country’s

laws, but, as stated earlier, the final rule

also allows firms to provide a

certification from a responsible

company official that the product is not

in conflict with the foreign country’s

laws. FDA reiterates that section

801(e)(1)(B) of the act does not require

the foreign government to ‘‘approve’’ the

exported product for commercial

marketing; it only requires that the

export ‘‘not be in conflict’’ with the

foreign country’s laws.

Market authorization from a foreign

government is relevant under section

802(b)(1) of the act, which authorizes

the export of drugs and devices that

have received marketing authorization

from a listed country. However, the final

rule does not contain any detailed

provisions pertaining to the market

authorization aspect of section 802(b)(1)

of the act.

(Comment 24) Proposed § 1.101(b)(2)

also would require the letter from the

foreign government to be in English or

for the person exporting the article to

have an English-language translation.

One comment objected to the Englishlanguage translation requirement. The

comment said World Trade

Organization (WTO) notification

processes do not require translations

and that, for exported food products,

English-language translations are not

always available or necessary.

Section 1.101(b)(2) accepts

certifications from company officials in

the United States to show that the

export does not conflict with the

importing country’s laws, and the final

rule requires the certification to be in

English or for an English-language

translation to be available. This should

not be objectionable because a U.S.

exporter is likely to have a responsible

official capable of writing a certification

in English.

FDA is not persuaded that WTO

notification processes are relevant to the

rule because this rule concerns

compliance with U.S. law by U.S.

companies. Section 801(e)(1)(B) of the

act requires the exported food, drug,

device, or cosmetic to not be in conflict

with the laws of the country to which

it is intended for export, and

§ 1.101(b)(2) describes how a U.S. firm

demonstrates compliance with section

801(e)(1)(B) of the act.

(Comment 25) One comment said

proposed § 1.101(b)(2) would adversely

affect clinical trials conducted outside

the United States by affecting the

supplies of exported drugs for

investigational use.

Because FDA has revised § 1.101(b)(2)

to accept certifications as an alternative

to a letter from a foreign government,

the agency does not anticipate any

significant problems or delays in

executing the certifications, so there

should be no adverse impact on

exporting drugs for investigational use.

Additionally, FDA intends to issue a

proposed rule concerning exports of

investigational new drugs. The proposal

would describe some new regulatory

approaches for exporting investigational

new drugs and would streamline

existing requirements for such exports.

4. ‘‘For Export Only’’ Label (Section

1.101(b)(3))

Proposed § 1.101(b)(3) would require

the records to include copies of any

labels or labeling statements, placed on

the shipping packages, that show that

the packages are intended for export.

The proposal indicated that statements

such as ‘‘For export only’’ may be

sufficient for this purpose.

(Comment 26) Two comments said

that raw or processed agricultural

commodities cannot be labeled. The

comments said that FDA should accept

a statement on the bill of lading, export

declaration, or other shipping

document. One comment suggested that

the label, alone, should be sufficient and

that FDA should not require firms to

show that the export does not conflict

with the foreign country’s laws.

FDA agrees and has revised the rule

to permit the statement to be attached to

a bill of lading, export declaration, or

other document accompanying the

exported product if the product, as it is

ordinarily shipped, cannot be labeled.

As for the comment’s statement that

FDA should not require firms to show

that an export does not conflict with a

foreign country’s laws, FDA points out

that section 801(e)(1)(B) of the act

expressly requires that a food, drug,

device, or cosmetic intended for export

to be ‘‘not in conflict with the laws of

Federal Register / Vol. 66, No. 244 / Wednesday, December 19, 2001 / Rules and Regulations 65437

the country to which it is intended for

export.’’ If a product intended for export

fails to comply with section 801(e)(1)(B)

of the act, the product may be

considered to be adulterated or

misbranded, and section 301(a) of the

act prohibits the introduction or

delivery for introduction into interstate

commerce of any adulterated or

misbranded food, drug, device, or

cosmetic.

5. ‘‘Not Sold or Offered for Sale in the

United States’’ (Section 1.101(b)(4))

Proposed § 1.101(b)(4) would require

records showing that the product is not

sold or offered for sale in the United

States. The preamble to the proposal

said that these records could pertain to

the product, its labeling, and similar

products sold in the United States. The

idea was to show that the exported

product, when compared to those sold

in the United States, was different from

products sold domestically.

(Comment 27) Several comments

objected to the proposed requirement,

arguing that the act does not require any

records or labeling to show that the

exported product is not sold or offered

for sale in the United States.

In contrast, other comments stated

that it is difficult to assemble records to

‘‘prove a negative,’’ namely that a

particular product is not sold or offered

for sale in the United States, particularly

when a company does not sell a similar

product in the United States or only

exports products. Some comments

suggested that FDA accept copies of

shipping records, product labeling,

price lists or catalogs, product listings

submitted to FDA, or certifications from

the exporter. Most comments

recommended that the labeling

statement in § 1.101(b)(3)—that the

product is ‘‘For export only’’—be

acceptable, although some would add a

product label stating, ‘‘Not for sale in

the United States.’’ Two comments said

records relating to the production,

destruction, and export of products or

showing how exported products are

segregated from those sold in the United

States should be acceptable.

After further consideration, FDA

agrees that it would be difficult and

impractical to require records of

products sold domestically, product

labels, or similar information in order to

demonstrate that a particular export is

‘‘not sold’’ in the United States. The

agency has revised the rule to state that

production and shipping records

relating to the exported product will be

sufficient and that promotional material

will be helpful in determining whether

a product is ‘‘offered for sale’’ in the

United States. The agency notes that

information concerning products sold or

offered for sale in the United States that

are similar to an exported product may

be used by the agency in determining

compliance with section 801(e)(1) of the

act. The final rule does not require an

exporter to retain records concerning

similar products sold or offered for sale

in the United States, but other

provisions in the act may require such

records to be retained.

(Comment 28) FDA interpreted

section 801(e)(1)(D) of the act as

requiring exported products to be

different from products sold in the

United States. One comment questioned

FDA’s interpretation. The comment said

that section 801(e)(1)(D) of the act is

only intended to prevent diversion of

products into domestic commerce. The

comment argued that preventing the

sale of foreign-market versions of

products sold in the United States

‘‘perversely’’ establishes a more

restrictive regime for products sold in

the United States than products not sold

or offered for sale in the United States.

Two comments disagreed with FDA’s

position as it pertains to multiple

batches of the same product. (In the

draft guidance document, FDA

indicated that section 801(e)(1)(D) of the

act would not be met if a manufacturer

made five batches of the same drug and

sought to sell some batches in the

United States and to export the others;

the draft guidance document indicated

that the U.S. sales would show that the

product is, in fact, sold in the United

States contrary to section 801(e)(1)(D) of

the act.) The comments argued that

section 801(e)(1)(D) of the act should be

interpreted as applying only to specific

products that are or were sold or offered

for sale in the United States, so products

that are intended for export may, in fact,

be exported even though the same

product or different batches of the

product are sold in the United States.

After considering the comment, FDA

is clarifying its interpretation of section

801(e)(1)(D) of the act. If the product is

legally sold in the United States, and the

same product is intended for export for

the same approved use and is

accompanied by the FDA-approved

labeling, FDA may consider the product

to be sold or offered for sale in the

United States. In most circumstances,

the product would not have to meet the

requirements of section 801(e)(1) of the

act because the product to be exported

is the same product that can be legally

sold in the United States and does not

need to qualify for an exemption from

the act’s requirements. By stating that

the product is ‘‘accompanied’’ by the

FDA-approved label, FDA does not

require the FDA-approved label to be

affixed to each exported product, but

the agency does expect the FDAapproved label to be included in the

export shipment. The agency recognizes

that no interest would be served by

requiring firms to attach FDA-approved

labels to exported products if those

labels would have to be removed or

altered for the product to be sold in a

foreign country.

In contrast, if the product to be

exported involves a use that is not

approved in the United States, or is

labeled solely in a foreign language and

whose foreign language labeling has not

been approved by FDA, then the

product is ‘‘unapproved’’ and falls

within the act’s export provisions. In

these cases (as we stated in our response

to comment 11 earlier), the product

must comply with section 801(e)(1)(D)

of the act, and FDA would not consider

the product to be sold or offered for sale

in the United States within the meaning

of section 801(e)(1)(D) of the act.

As for batches of the same product,

FDA is clarifying its position to state

that batches of a product that are

segregated from products intended for

domestic commerce or produced on

manufacturing lines that are dedicated

to export markets, may meet the

requirement in section 801(e)(1)(D) of

the act as long as the batch intended for

export differs from the domestic

product. (For example, the product

intended for export is not made under

the same CGMPs that apply to the

product marketed in the United States.)

FDA will revise its guidance

document on the FDA Export Reform

and Enhancement Act to reflect these

positions.

D. Additional Recordkeeping

Requirements for Partially Processed

Biological Products Exported Under

Section 351(h) of the Public Health

Service Act (Section 1.101(c))

Proposed § 1.101(c) would establish

recordkeeping requirements, in addition

to those required under § 1.101(b), for

partially processed biological products

exported under section 351(h) of the

PHS Act.

(Comment 29) One comment would

delete all recordkeeping requirements

for partially processed biological

products. The comment said that

proposed § 1.101(b)’s recordkeeping

requirements are based on section

802(g) of the act, but that provision is

inapplicable to partially processed

biological products.

FDA disagrees with the comment.

FDA licenses biological products under

the authority of section 351 of the PHS

Act. The PHS Act requires that

biological products be licensed and be

65438 Federal Register / Vol. 66, No. 244 / Wednesday, December 19, 2001 / Rules and Regulations

safe, pure, potent, and manufactured in

facilities designed to ensure that the

product continues to be safe, pure, and

potent. Biological products are

approved for marketing under the

provisions of the PHS Act. However,

because most biological products also

meet the definitions of ‘‘drugs’’ or

‘‘devices’’ under the act, they are also

subject to regulation under the act. As

part of the FDA Export Reform and

Enhancement Act, Congress

substantially revised section 351(h) of

the PHS Act, the provision that allows

exports of partially processed biological

products not otherwise in compliance

with section 351 of the PHS Act and the

act. Prior to the amendments, exports of

partially processed biological products

required FDA approval and were

limited to those countries listed in the

previous version of section 802 of the

act. As amended, section 351(h) of the

PHS Act exempts exported partially

processed biological products from the

requirements of the chapter of the PHS

Act and the requirements of the act if

certain requirements are met. Section

351(h) of the PHS Act states that a

partially processed biological product

which:

(1) is not in a form applicable to the

prevention, treatment, or cure of diseases or

injuries of man;

(2) is not intended for sale in the United

States; and

(3) is intended for further manufacture into

final dosage form outside the United States,

shall be subject to no restriction on the

export of the product under this chapter or

the Federal Food, Drug, and Cosmetic

Act * * * if the product is manufactured,

processed, packaged, and held in conformity

with current good manufacturing practice

requirements or meets international

manufacturing standards as certified by an

international standards organization

recognized by the Secretary and meets the

requirements of section 801(e)(1) of the

Federal Food, Drug, and Cosmetic

Act * * *.

The records in § 1.101(b) will show

whether a product complies with

section 801(e)(1) of the act, and section

351(h) of the PHS Act clearly requires

exports of partially processed biological

products to comply with section

801(e)(1) of the act. If FDA could not

require such records, an exporter could

not show, and FDA could not verify,

that an exported, partially processed

biological product complies with

section 801(e)(1) of the act.

Furthermore, it would be both unfair

and illogical to interpret section

801(e)(1) of the act in a manner that

would impose more requirements on

persons who export foods, drugs,

devices, and cosmetics, and

comparatively fewer (if any)

requirements on persons who export

partially processed biological products.

The act and the PHS Act authorize

additional recordkeeping requirements

to demonstrate compliance with the

other requirements for the export of

partially processed biological products

under section 351(h) of the PHS Act.

Partially processed biological products

are drugs under the act, and section

351(h) of the PHS Act allows such

products to be exempt from both the

PHS Act and from the act if certain

requirements are met. The rule’s

recordkeeping requirements for exports

under section 351(h) of the PHS Act will

allow FDA to determine efficiently

whether the terms of the exemption

have been met and whether any

violations of the act exist, which would

be the case if the export does not

comply with the exemption in section

351(h) of the PHS Act. The issuance of

these regulations, therefore, is

authorized under section 701(a) of the

act, which gives FDA the authority to

issue regulations for the efficient

enforcement of the act.

Recordkeeping requirements to

implement section 351(h) of the PHS

Act are also authorized by section 361

of the PHS Act (42 U.S.C. 264). Under

that section, FDA may make and enforce

regulations necessary to prevent the

introduction, transmission, or spread of

communicable diseases between the

States. Because of their nature, partially

processed biological products pose a

potential risk of transmitting diseases

because they may not have been treated

to inactivate infectious agents or other

harmful agents. FDA has determined

that it may appropriately and effectively

regulate partially processed biological

products intended for export, and the

risks associated with their movement in

interstate commerce, by imposing

recordkeeping requirements specific to

exports under section 351(h) of the PHS

Act.

FDA has, however, rewritten

§ 1.101(c)(2) through (c)(4) to adopt

parallel sentence structure. These

changes are intended to make the rule

easier to read and have no substantive

impact on the rule.

(Comment 30) Proposed § 1.101(c)(1)

would require persons exporting a

partially processed biological product

under section 351(h) of the PHS Act to

maintain records demonstrating that the

product for export is a partially

processed biological product, that is,

‘‘not in a form applicable to the

prevention, treatment, or cure of disease

or injuries of man.’’

One comment said it would be

impractical to create records to show

that a product is a partially processed

biological product. The comment said

that a partially processed biological

product ‘‘is just that, a partially

processed biologic.’’

FDA disagrees with the comment.

Before Congress enacted the FDA Export

Reform and Enhancement Act, FDA

interpreted the term ‘‘partially

processed biologic’’ in section 351(h) of

the PHS Act as including products that

require purification, inactivation,

fractionation, or significant chemical

modification before the partially

processed biological product can be

used in making a final product. To

demonstrate that a product was a

partially processed biological product, a

firm provided either an explanation or

documentation explaining the need to

purify, inactivate, fractionate, or

chemically modify the partially

processed biological product before it

could be used in a final product.

While the FDA Export Reform and

Enhancement Act eliminated the need

to submit an export application to FDA,

it did not alter the term ‘‘partially

processed biologic’’ or suggest any

changes to FDA’s interpretation of the

term. Consequently, FDA expects firms

to have records demonstrating that the

product intended for export is, indeed,

a partially processed biological product

that is eligible for export under section

351(h) of the PHS Act. Those records

may consist of an explanation or

documentation explaining the need to

purify, inactivate, fractionate, or

chemically modify the partially

processed biological product before it

could be used in a final product.

(Comment 31) Proposed § 1.101(c)(4)

would require a firm to maintain copies

of all labeling that accompanies the

partially processed biological product

for export, such as a container label

with the statement, ‘‘Caution: For

Further Manufacturing Use Only,’’ and

any package insert and to make such

copies and package inserts available to

FDA during an inspection.

One comment said the proposed

requirement was unauthorized under

the act and the PHS Act. The comment

said that manufacturers should not have

to keep copies of all labeling that

accompanies an exported product.

FDA disagrees with the comment. The

requirement to maintain copies of all

product labeling is consistent with

CGMP requirements. For example, as

part of the batch product and control

record requirements for drugs, 21 CFR

211.188(b)(8) requires retention of

complete labeling control records,

including specimens or copies of all

labeling used in batch products. Section

351(h) of the PHS Act expressly requires

that exported partially processed

Federal Register / Vol. 66, No. 244 / Wednesday, December 19, 2001 / Rules and Regulations 65439

biological products be in conformity

with CGMP requirements. The

recordkeeping requirement adopted for

exports in this rule is, therefore,

consistent with existing CGMP

requirements that apply to partially

processed biological products exported

under section 351(h) of the PHS Act. As

discussed in greater detail in the

response to comment 42 (below), the

final rule does not require exporters to

maintain duplicate sets of records for

export and CGMP purposes. Records

required under this rule may be part of

the exporter’s CGMP or QS regulation

records.

The requirement to maintain copies of

all product labeling is also consistent

with the requirement in section

351(h)(2) of the PHS Act that a partially

processed biological product intended

for export not be ‘‘intended for sale in

the United States’’ and the requirement

in section 351(h)(3) of the PHS Act that

the exported product be ‘‘intended for

further manufacture into final dosage

form outside the United States.’’

Without copies of all labeling, FDA

would be unable to determine that the

product is labeled in a manner

consistent with these requirements.

Section 1.101(c)(4) provides a practical

approach for implementing sections

351(h)(2) and (h)(3) of the PHS Act

because the labeling will help show that

the product is not intended for sale in

the United States, while the suggested

cautionary statement will help

demonstrate that the product is

intended for further manufacture

outside the United States. This

cautionary statement is consistent with

the statement required on other

products intended for further

manufacture, such as source plasma (see

21 CFR 640.70(a)(2)), and is also

consistent with FDA’s authority under

section 361(h) of the PHS Act to make

and enforce regulations to prevent the

introduction, transmission, or spread of

communicable disease.

Although FDA suggests the inclusion

of the statement, ‘‘Caution: For Further

Manufacturing Use Only,’’ on the label

of exported partially processed

biological products, the proposed rule

did not mandate the use of that

particular statement. The agency

included a cautionary statement to give

exporters specific information on label

statements that may be sufficient to

show that the product is intended for

further manufacturing into a final

dosage form outside the United States,

as required by section 351(h)(3) of the

PHS Act. The final rule, at § 1.101(c)(4),

clarifies that exporters may use other

records demonstrating that the exported

partially processed biological product is

intended for further manufacturing into

a final dosage form outside the United

States.

(Comment 32) One comment

interpreted this provision as requiring

valid marketing authorization for the

partially processed biological product

and stated that the act does not require

valid marketing authorization for such

products. The comment said that firms

might export partially processed

biological products for research

purposes, for use in clinical evaluations,

or for product evaluation before

marketing. The comment suggested that

an attestation by a company official in

the foreign country suffice in place of

valid marketing authorization.

The comment misinterprets the rule.

Section 1.101(b)(2) and section

801(e)(1)(B) of the act only require that

the product not be in conflict with the

foreign country’s laws. FDA does not

interpret this to mean that the exported

product must have valid marketing

authorization in the foreign country to

which it is being exported. FDA

recognizes that some countries lack

affirmative approval mechanisms for

certain products and that some

countries do not ‘‘approve’’ certain

products, particularly products used for

research or investigational purposes.

For biological products that may be

regulated as devices (and devices

generally), the Center for Devices and

Radiological Health (CDRH) has

information on countries that are

nonresponsive to inquiries seeking

permission either to market or to

conduct clinical tests on devices.

Because regulatory conditions

pertaining to devices are rapidly

changing in many countries, FDA

recommends that firms first attempt to

obtain authorization from an

appropriate government official. If a

firm is unsuccessful in establishing

communications with a government

official and/or obtaining any type of

written authorization, or denial of

authorization, from a foreign

government, it may contact the Division

of Program Operations, CDRH, for

guidance.

FDA also reiterates that the final rule,

as revised, accepts a certification from a

responsible company official in the

United States that the product does not

conflict with the importing foreign

country’s laws.

E. Notification Requirements for Drugs,

Biological Products, and Devices

Exported Under Section 802 of the

Federal Food, Drug, and Cosmetic Act

(Section 1.101(d))

Proposed § 1.101(d) would establish

the notification requirements for drugs,

biological products, and devices

exported under section 802 of the act. In

brief, proposed § 1.101(d)(1) would

require exporters to provide written

notification to the agency that identifies

the article’s name, identifies its generic

name if the article is a drug or the

article’s type if the product is a device,

describes the product’s strength and

dosage form (if the product is a drug or

biological product) or the product’s

model number (if the product is a

device), and identifies the country that

is to receive the exported article.

The proposed rule acknowledged that,

for exports to listed countries under

section 802(b)(1) of the act, section

802(g) of the act requires the notification

to identify only the drug, biological

product, or device being exported, and

does not expressly require the

notification to identify the country to

which the drug, biological product, or

device is being exported. (In contrast,

for drugs, biological products, or

devices exported to nonlisted countries

under section 802 of the act, section

802(g) of the act requires both

identification of the exported product

and the country to which the product is

being exported.) Nevertheless, proposed

§ 1.101(d) would require that all export

notifications under section 802(g) of the

act identify the product and the

importing country. FDA explained that

it took this action because section

802(a)(2) of the act requires FDA to

notify the ‘‘appropriate public health

official’’ in the foreign country receiving

an exported drug, biological product, or

device if FDA disapproves a marketing

application for the drug, biological

product, or device, and section 802(f) of

the act requires FDA to consult with the

‘‘appropriate public health official in

the affected country’’ in the event that

an exported drug, biological product, or

device presents an imminent hazard to

the public health. FDA further noted

that similar consultation obligations

exist if the product’s labeling is not in

accordance with the requirements and

conditions for use in the country in

which the drug, biological product, or

device has valid marketing

authorization and the country to which

the drug, biological product, or device is

being exported or if the drug, biological

product, or device is not promoted in

accordance with the labeling

requirements of section 802(f) of the act.

Thus, to facilitate these notifications

and consultations with foreign officials

(particularly in the event that FDA

disapproves a drug, biological product,

or device that has been exported, or the

exported product presents an imminent

hazard to the public health of the

65440 Federal Register / Vol. 66, No. 244 / Wednesday, December 19, 2001 / Rules and Regulations

receiving country), proposed

§ 1.101(d)(1)(iv) would require all

notifications to identify the country or

countries that are to receive the

exported product.

(Comment 33) Many comments

strongly objected to identifying a listed

country. Most stated that the act did not

require the notification to identify listed

countries. Some comments dismissed

FDA’s rationale regarding its statutory

obligation to consult foreign government

officials as unlikely to occur or

dismissed it without explanation. One

comment described the proposed

requirement to require notifications to

identify the listed country as ‘‘casting a

wide net to catch a few guppies at

tremendous cost to the other fish,’’ and

said FDA could conduct an inspection

of the firm to obtain the information on

the listed countries receiving an

exported product. Another comment

said that identifying a listed country

would mean that FDA is questioning the

foreign country’s judgment. Others

implied that identifying a listed country

would be burdensome or would

complicate export notifications.

A few comments said firms could

voluntarily disclose the identity of the

listed country in the notification, but

could not be required to do so. One

comment suggested that the notification

state that the foreign country has

provided valid marketing authorization,

without identifying the listed country.

Only one comment agreed with FDA’s

rationale to have the notifications

identify all countries, including listed

countries.

FDA agrees that, if it had to consult

a foreign government as required by the

act, it could inspect a firm’s export

records to determine whether listed

countries received a particular export.

This approach, however, would be

much more time-consuming and costly

both for the industry and the agency

because FDA would have to schedule

the inspection, the firm would have to

locate and assemble export records, and

FDA would have to examine those

records before it learned the listed

country’s identity. Consultation with

the listed country, as required by the

act, would be delayed, and this could

present public health concerns if the

agency’s obligation to consult the

foreign government was due to an

imminent hazard finding or if FDA

disapproved the product because it was

not safe or effective.

The agency also notes that export

declarations required by the Bureau of

the Census for certain exports and

submitted to the U.S. Customs Service

identify the ultimate consignee, by

name and address, and, depending on

the form used, the foreign port of

unloading or intermediate consignees

(see 15 CFR 30.7 (‘‘Information Required

on Shipper’s Export Declarations’’)).

Assuming that firms use these export

declarations, it would seem that

identifying a listed country would be

less burdensome or less problematic

than identifying consignees by name

and address. It is also difficult to see

how requesting identification of a listed

country in a notification sent to FDA,

when the export declaration given to the

U.S. Customs Service identifies the

consignee and foreign port, can be

characterized as ‘‘questioning’’ the

judgment of a foreign country.

Nevertheless, given the distinction

drawn in the statute and objections to

this provision, FDA has revised

§ 1.101(d) to require identification of

unlisted countries only. Firms may

voluntarily identify a listed country in

a notification, but are not required to do

so. If a firm chooses to withhold the

identification of a listed country, FDA

suggests, but does not require, the firm

to state in its notification that the export

went to a listed country. (This will

enable FDA to determine quickly that

the firm did not neglect to identify an

unlisted country.) If the statutory

obligation to consult with a country

receiving an exported product is

triggered, FDA will conduct an

inspection of the exporting firm to

identify which listed countries it must

contact.

(Comment 34) One comment said that

approved products that are exported

should not be the subject of an export

notification, even if the product is

exported for an unapproved use. The

comment said that requiring

notifications for these products would

be inconsistent with Congressional

intent to relieve manufacturers of export

obligations and would be beyond FDA’s

jurisdiction. The comment said that

foreign health authorities are ‘‘fully

empowered to approve labeling and/or

indications that they deem

appropriate.’’

The comment is only partially correct.

Approved products that are exported for

their approved indications and are

otherwise in compliance with the act’s

requirements for marketing,

distribution, and sale in the United

States are not subject to the export

requirements in section 802 of the act.

For these exports, no notification is

necessary.

However, exports of an ‘‘approved’’

product for an unapproved use are

subject to section 802 of the act. For

example, section 802 of the act applies

to drugs that require approval under

section 505 of the act (21 U.S.C. 355)

‘‘before such drug * * * may be

introduced or delivered for introduction

into interstate commerce.’’ The act

defines ‘‘interstate commerce,’’ in part,

as ‘‘commerce between any State or

Territory and any place outside

thereof.’’ Exports fall within the

definition of ‘‘interstate commerce’’

because the shipment originates in a

State and is destined to a ‘‘place

outside.’’ Additionally, contrary to the

comment’s suggestion, the exported

drug is not ‘‘approved’’ by FDA because

the intended use in the foreign country

was not the subject of a FDA-approved

application. To phrase this another way,

FDA’s approval processes includes

approval of the drug’s indications for

use, so the fact that the agency may have

approved the drug for other uses does

not relieve the manufacturer from

compliance with section 505 of the act

when unapproved uses are concerned.

The agency notes that, as an

alternative to section 802 of the act,

such exports may be permitted under

section 801(f) of the act. Exports under

section 801(f) of the act must comply

with the requirements in section

801(e)(1) and (f) of the act, but do not

require notification to FDA. If a product

can be exported under either section

802 or 801(f) of the act, the exporter has

the option of determining which export

authority to use.

(Comment 35) The proposed rule

would require persons exporting a

product in anticipation of market

authorization in a listed country under

section 802(d) of the act to comply with

the notification requirements in

proposed § 1.101(d)(1). The preamble to

the proposed rule explained that this

requirement would be consistent with

an interpretation of section 802(g) of the

act that considers the nexus between

section 802(b)(1) and (d) of the act.

Section 802(g) of the act requires

exporters of drugs, biological products,

and devices to provide a simple

notification to the agency when they

export a product to a listed country or

to an unlisted country under section

802(b)(1) of the act. Section 802(b)(1) of

the act permits exports when the drug,

biological product, or device has valid

marketing authorization in a listed

country, whereas section 802(d) of the

act permits exports to a listed country

in anticipation of market authorization.

FDA stated that a literal interpretation

of section 802(g) of the act would not

require an exporter to notify FDA when

it shipped a product to a listed country

in anticipation of market authorization,

but would instead require the exporter

to notify FDA when the exporter

shipped the same product to the same

country once it has marketing

Federal Register / Vol. 66, No. 244 / Wednesday, December 19, 2001 / Rules and Regulations 65441

authorization. The preamble to the

proposed rule stated that it would be

more simple and efficient, both for

exporters and FDA, if exporters notify

FDA when they export a product in

anticipation of market authorization

under section 802(d) of the act rather

than wait for marketing authorization in

the listed country and then notify FDA

when the product is exported under

section 802(b)(1) of the act. FDA’s intent

was to allow firms to submit the

notification when they first exported a

product in anticipation of market

authorization and to eliminate any need

for them to submit a notification later

when they received marketing

authorization.

Many comments objected to requiring

a notification for exports under section

802(d) of the act, stating that the act did

not authorize such notifications. Some

said that FDA could not justify requiring

such notification on the grounds that it

would be more efficient or simpler. One

comment viewed the proposed

notification requirement as a

prohibition on exports that would delay

the availability of products. Another

comment interpreted the rule as

requiring two notifications—one for

exports in anticipation of market

authorization, and a second when the

product received marketing

authorization.

Only one comment agreed with the

proposal, but reiterated that a

subsequent notification once the

product received marketing

authorization should not be required.

FDA has revised the final rule to limit

notifications to products exported under

section 802(b) of the act. In other words,

no notification is required if the export

is made in anticipation of market

authorization under section 802(d) of

the act. A person who exports a product

in anticipation of market authorization,

and later receives marketing

authorization, would only submit the

notification to FDA when the first

export occurs to a particular foreign

country following marketing

authorization in that country.

(Comment 36) One comment said that

section 802(d) of the act permits anyone

to export a product in anticipation of

market authorization, regardless of who

applied for market authorization.

Section 802(d) of the act is commonly

referred to as allowing firms to ‘‘fill the

pipeline’’ so that a product will be

available immediately upon market

authorization by a foreign country. If the

comment’s interpretation of section

802(d) of the act were correct, any firm

could export the product so long as one

firm was seeking market authorization.

In other words, under the comment’s

interpretation, if firm A were seeking

market authorization to sell a drug

called X, firms B, C, and D could export

drug X to the same foreign country

under the guise of ‘‘anticipating’’ market

authorization. The comment’s

interpretation of section 802(d) of the

act also would place little weight on the

term ‘‘anticipation’’ of market

authorization. Arguably, if a firm has

not applied for market authorization, it

cannot be characterized as

‘‘anticipating’’ market authorization.

The inclusion of the word

‘‘anticipation’’ in section 802(d) of the

act suggests that the firm exporting the

drug or device is, in fact, the entity that

is seeking market authorization or

would be capable of distributing that

drug or device upon marketing

authorization.

Consequently, FDA interprets section

802(d) of the act as follows. If the

foreign country’s product approval

process is specific to an application (i.e.,

to have marketing authorization, a firm

must submit an application, and the

application must be approved), then a

firm seeking to invoke section 802(d) of

the act to export a drug or device to a

foreign country must be seeking market

authorization in that foreign country.

If, however, the foreign country’s

product approval process would allow

multiple products on the market upon

market authorization (i.e., once

marketing authorization occurs, any

person can market a drug or device that

meets the conditions of that marketing

authorization), then a firm seeking to

invoke section 802(d) of the act to

export a drug or device to such a foreign

country does not have to be the firm that

sought marketing authorization in that

foreign country.

This interpretation of section 802(d)

of the act acknowledges both the

marketing authorization process in a

foreign country and gives appropriate

weight to the words ‘‘in anticipation of

market authorization.’’

(Comment 37) Proposed § 1.101(d)(1)

would require a notification to identify

the exported product by name. If the

exported product were a drug or

biological product, the proposal would

require the notification to provide a

generic name and a description of the

product’s strength and dosage form. If

the exported drug were a device, the

proposal would require the notification

to identify the type of device and to

provide its model number.

One comment stated that, because

FDA is generally not able to examine

sales and marketing information, it

would be appropriate for the

notification to contain information on

the product, classification, lot code or

unique identifying number, country of

exportation, and whether or not the

product was accepted.

FDA declines to revise the rule as

suggested by the comment. The productspecific information described in

§ 1.101(d)(1) should be sufficient to

identify a particular export. Firms are

free to provide information on a lot code

or a unique identifying number, but the

final rule does not require this.

Furthermore, because the act presumes

that the United States is the country

from which the product is exported and

because section 801(e)(1)(B) of the act

requires the exported product to be ‘‘not

in conflict’’ with the foreign country’s

laws, FDA declines to require firms to

identify the country of exportation or to

state whether the product was

‘‘accepted.’’

(Comment 38) FDA, on its own

initiative, has revised § 1.101(d)(1)(ii) to

replace ‘‘generic name’’ with

‘‘abbreviated or proper name.’’ In

proposing to require the export

notification to contain the product’s

‘‘name’’ and its ‘‘generic name,’’ FDA

intended to require persons exporting a

human drug to identify the product by

its trade name and its abbreviated

chemical name and to require persons

exporting a biological product to

identify the product by its trade name

and its proper name. However, the term

‘‘generic name’’ created some confusion

within FDA as to whether FDA was

specifically interested in generic drug

products. Consequently, FDA has

revised § 1.101(d)(1)(i) to require the

notification to identify the product’s

trade name while § 1.101(d)(1)(ii) now

requires the notification to contain the

exported product’s ‘‘abbreviated or

proper name.’’ The agency has made a

similar change to § 1.101(e)(1)(i) and

(e)(1)(ii).

The agency has also inserted language

referring to biological products in

§ 1.101(d)(1) to clarify that

investigational biological products may

be exported under section 802(c) of the

act and that biological products may be

exported in anticipation of marketing

authorization under section 802(d) of

the act.

(Comment 39) A few comments

addressed the frequency of export

notifications. Two comments said

notifications should be required only for

the first export of a product. The

comments stated that subsequent

exports should not result in

notifications, although the comments

were unclear whether the subsequent

export could be to a different country

than the initial export.

Section 802(g) of the act requires an

exporter of a drug or device to provide

65442 Federal Register / Vol. 66, No. 244 / Wednesday, December 19, 2001 / Rules and Regulations

a simple notification to FDA under two

different scenarios. In one scenario, the

exporter must provide the simple

notification when it first begins to

export the drug or device to any listed

country. This means that subsequent

exports of the same drug or device to the

same listed country or to any other

listed country do not result in a simple

notification to FDA. To illustrate how

this works, assume that company X,

under section 802(b) of the act, wants to

export a drug to listed country A.

Company X must provide a simple

notification to FDA identifying the drug

to be exported. If company X later wants

to export the same drug to listed country

B under section 802(b) of the act, the

company does not have to send a simple

notification to FDA because company X

already provided a simple notification

when it exported the drug to listed

country A and because country B is a

listed country.

In the other scenario, when the export

is to an unlisted country, section 802(g)

of the act requires the exporter to

provide the simple notification when it

first begins to export the drug or device

to that unlisted country, and the

notification must identify the unlisted

country. The act, therefore, requires a

simple notification whenever the

exporter first ships a drug or device to

an unlisted country. Thus, to use the

same illustration, if company X, under

section 802(b) of the act, wants to export

a drug to unlisted country D, company

X must provide a simple notification

that identifies the drug being exported

and must also identify unlisted country

D. Subsequent exports of the same drug

to unlisted country D would not require

company X to send a simple notification

to FDA. However, if company X later

wants to export the same drug to

unlisted country E under section 802(b)

of the act, company X must provide

another simple notification to FDA, and

the simple notification must identify the

drug being exported and unlisted

country E.

(Comment 40) In the preamble to the

proposed rule, FDA invited comment on

possible alternatives to this notification

requirement that would satisfy the

consultation, notification, and

recordkeeping obligations and

requirements in section 802 of the act.

The agency was especially interested in

alternatives that would reduce the

paperwork burden, such as electronic

submissions and recordkeeping or

periodic notifications (e.g., monthly,

quarterly), and the details of such

alternatives.

One comment suggested that FDA

accept export notifications that covered

more than one country. Another

comment suggested that FDA accept

notifications on an annual basis, or no

more often than a biannual basis, that

the notifications be submitted in tabular

form and submitted directly, if not

electronically, to FDA. One comment

suggested that FDA develop an

interactive website so exporters could

‘‘fill in the blanks.’’ Another comment

suggested using Operational and

Administrative System for Import

Support (OASIS) system entries as

notifications under section 802(g) of the

act and would have annual reports

submitted by exporters serve as

confirmation of the export; the comment

said that the notifications described in

the proposed rule would add significant

costs to manufacturers.

FDA appreciates the comments’

suggestions. The agency does not object

if a simple notification covers more than

one country; nothing in the act or these

regulations prevents firms from

identifying more than one country in a

simple notification. Furthermore, if the

foreign purchaser’s specifications

change after the first shipment, and the

new specifications result in a drug or

device that is not significantly different

from the first exported drug or device,

an exporter may, but is not required to,

provide a new notification. For

example, assume that company X is

exporting an electronic device to listed

country A. Later, the foreign purchaser

revises its product specifications to

change the voltage requirements for the

device. The revised product

specifications call for an electronic

device that is substantially similar to the

original electronic device, so FDA

would not require another notification.

In contrast, if company X is exporting

a combination drug to listed country A,

and the foreign purchaser revises its

product specifications to substitute a

different active ingredient, the drug to

be exported has changed significantly,

and FDA would expect the exporter to

provide a new simple notification to

cover the changed drug product when

the exporter ‘‘first begins’’ to export the

changed drug product.

As for electronic submissions and

other technology, FDA intends to

explore options for facilitating

notification to FDA, but is unable to

create an interactive, web-based system

at this time. The agency is also unable

to adapt the OASIS system to cover

notifications because the OASIS system

focuses on imports, not exports, and is

operationally separate from FDA’s

administrative oversight of exports.

As for annual or semiannual

submissions, the agency considered

these options, but section 802(g) of the

act appears to contemplate more timely

notifications. The act requires

notifications when the exporter ‘‘first

begins’’ to export the drug or device

under section 802(b)(1) of the act, so the

most logical interpretation of the phrase

‘‘first begins’’ would mean that

exporters must provide the notification

to FDA when they actually export the

drug or device.

(Comment 41) FDA, on its own

initiative, has revised the address for

export notifications involving biological

products and devices regulated by the

Center for Biologics Evaluation and

Research. The final rule replaces ‘‘Office

of Compliance’’ with ‘‘Office of

Compliance and Biologics Quality.’’

This change reflects the current office

name.

F. Recordkeeping Requirements for

Products Subject to Section 802(g) of the

Act (Section 1.101(e))

Proposed 1.101(e) would establish

additional recordkeeping requirements

for exported drugs, biological products,

and devices subject to section 802(g) of

the act. These records would include,

but not be limited to: (1) Records

concerning the product’s name, (2) the

product’s generic name if the product is

a drug or a biological product or the

type of device if the product is a device,

(3) a description of its strength and

dosage form and the product’s lot or

control number (if the product is a drug

or biological product) or the product’s

model number (if the product is a

device), (4) the consignee’s name and

address, and (5) the date on which the

product was exported and the quantity

of product exported.

(Comment 42) Several comments

objected to most or all of the proposed

recordkeeping requirements. Some

comments argued that manufacturers

already keep CGMP records and that

none of the information sought in

proposed § 1.101(e) is required or even

authorized by law. Another comment

said the proposed recordkeeping

requirement was ‘‘excessive’’ because it

required too many documents be kept.

Another comment said FDA should only

require companies to keep records of

exports to countries where they directly

export drugs; if the drugs were

subsequently exported elsewhere by the

importing company, the importing

company would be responsible for

records of shipments to third countries.

One comment sought clarification,

asking if the records required by

§ 1.101(e) are distinct from the quality

system regulation records required for

devices under 21 CFR part 820.

Section 802(g) of the act clearly states

that, ‘‘Any exporter of a drug or device

shall maintain records of all drugs or

Federal Register / Vol. 66, No. 244 / Wednesday, December 19, 2001 / Rules and Regulations 65443

devices exported and the countries to

which they were exported.’’ The most

straightforward interpretation of this

provision is that export records must be

kept for drugs and devices exported

under section 802 of the act and that

those records must also contain

information regarding the countries

receiving the exported product. Thus,

FDA disagrees with those comments

claiming that the records sought in

§ 1.101(e) are not required or authorized

by the act.

Moreover, persons exporting drugs or

devices, particularly persons who

manufacture the exported drug or

device, should already possess the

information sought in § 1.101(e). For

example, § 1.101(e)(1)(i) requires

records containing the product’s name.

Most prudent exporters know the names

of the products being exported. Section

1.101(e)(1)(ii) and (e)(1)(iii) requires

records to contain more specific

information about the drug or device,

such as the drug’s strength and dosage

form or the type of device and its model

number. A manufacturer who is

exporting products should know the

product’s abbreviated name or proper

name, strength, dosage form, and lot or

control number (if the product is a drug

or biological product) or the type of

device and model number (if the

product is a device), because this

information is related to CGMPs for the

product (see, e.g., 21 CFR 211.100

(written procedures for production and

process control), 211.110 (sampling and

testing of in-process materials and drug

products), 820.70 (production and

process controls for devices), and

820.160 (requiring device manufacturers

to maintain distribution records which

include or refer to the location of the

consignee’s name and address, the

identification and quantity of devices

shipped, the date shipped, and control

numbers used). Additionally, section

802(f)(1) of the act prohibits exportation

of a drug or device, under section 802

of the act, if the drug or device is not

manufactured, processed, packaged, and

held in substantial conformity with

CGMP requirements. Thus, an exporter

who is in substantial conformity with

CGMPs should already possess the

information described in § 1.101(e)(1)(ii)

and (e)(1)(iii). Finally, § 1.101(e)(1)(iv)

and (e)(1)(v) require the records to

include the consignee’s name and

address, the date on which the product

was exported, and the quantity of

product exported. Presumably, an

exporter knows where it is sending a

product, when it ships the product, and

how much was shipped.

FDA emphasizes that § 1.101(e) does

not require exporters to keep duplicate

sets of records—one for export purposes

and another for CGMP purposes—nor

does it require exporters to create new

records if the exporter keeps the

information described in § 1.101(e)

elsewhere. The records sought by

§ 1.101(e) may be part of the exporter’s

CGMP or QS regulation records.

Furthermore, to give exporters

additional flexibility in meeting this

requirement, FDA has amended

§ 1.101(e)(2) to state that the records

may be kept at the site from which the

products were exported ‘‘or

manufactured.’’ This change will

accommodate firms who manufacture

products for export and are responsible

for the product’s exportation, but who

send the product to another location for

packaging or other operations before

exportation occurs.

(Comment 43) Two comments asked

FDA to clarify what it wanted regarding

a consignee’s name and address. The

comments explained that devices are

often exported to distribution centers,

and so the comment suggested that

distribution centers should be

acceptable as consignees. Other

comments said FDA cannot require any

records identifying a consignee. The

comments asserted that the act does not

require or even authorize FDA to require

such information.

FDA does not object if a distribution

center in a foreign country is listed as

a ‘‘consignee’’ under this rule.

Identification of the consignee’s name

and address is intended to help FDA in

the event that it has to consult foreign

government officials regarding an

exported product. The consignee’s name

and address will inform government

agencies where the exported drug or

device was first sent and will help

speed efforts to recover or to prevent the

distribution of potentially hazardous

products.

As for those comments objecting to

identifying a consignee, FDA’s general

rulemaking authority in section 701(a)

of the act provides sufficient statutory

authority to require these records. FDA

also believes that exporters would retain

records identifying the consignee, by

name and address, as part of their

normal business practices because,

presumably, the consignee ordered the

drugs or devices and must pay for and

receive the exported product. FDA

further notes that export declarations

submitted to the U.S. Customs Service

must identify ultimate consignees by

name and address, and, depending on

the form used, may even identify

intermediate consignees. Thus,

exporters should have information

regarding a consignee’s name and

address.

(Comment 44) Proposed § 1.101(e)(2)

would require exporters to keep records

at the site from which the products were

exported and to maintain those records

for at least 5 years after the date of

exportation.

Several comments objected to the 5-

year period. Two comments advocated a

2-year period in order to be consistent

with the QS regulation requirements.

One comment suggested retaining

records for 3 years after the product’s

expiration date. Another comment

criticized the agency for not providing

a rationale for the 5-year period; this

comment said that 5-year period might

be too long in some situations, but not

long enough in others, and said the time

period was inappropriate without some

rationale and a link to the act.

The records required in § 1.101(e) are

similar, if not identical to, some records

that are kept for CGMP or QS regulation

purposes. To make recordkeeping easier

for firms, FDA has revised the rule to

state that these records must be retained

in accordance with the record retention

period for CGMP or QS regulation

records. FDA reiterates that firms may

use their CGMP or QS regulation

records for dual purposes (i.e., to

demonstrate compliance with CGMP or

QS regulation requirements and to

demonstrate compliance with the export

regulations in § 1.101) and do not have

to keep dual sets of records.

(Comment 45) One comment said that

proposed § 1.101(e) did not apply to

investigational new drugs exported

under section 802(c) of the act, but said

that companies maintain records on

such exports due to other obligations,

such as CGMP requirements.

FDA disagrees with the comment’s

interpretation. The relevant portion of

section 802(g) of the act states that ‘‘any

exporter of a drug or device’’ shall

maintain records; this differs from the

other sentences in section 802(g) of the

act which refer to exporters of drugs or

devices exported under section

802(b)(1)(A) of the act. As a result,

§ 1.101(e) does apply to exports of

investigational drugs under section

802(c) of the act.

G. Miscellaneous Comments

Several comments addressed issues

concerning implementation of the rule

or other export matters.

(Comment 46) One comment asked

how the rule relates to other export

documents issued by FDA. Another

comment said interpreting sections 801

and 802 of the act is complicated by the

lack of clear implementing regulations;

the comment said it is difficult to

determine which requirements apply to

a given product and asked FDA to

65444 Federal Register / Vol. 66, No. 244 / Wednesday, December 19, 2001 / Rules and Regulations

develop a rule to implement the export

act.

FDA prepared four agency wide

documents to implement the FDA

Export Reform and Enhancement Act.

The agency developed a draft guidance

document describing its interpretation

of the export provisions; the guidance

document is not binding on regulated

industries or on FDA. For binding

requirements, FDA prepared three

regulations: (1) A rule to implement the

‘‘import for export’’ requirements in

section 801(d) of the act, (2) a rule

pertaining to export notifications and

recordkeeping (which is presented

here), and (3) a rule pertaining to

exports of investigational new drugs

(which FDA intends to publish in the

Federal Register in the future). In

general, the regulations would describe

the types of records that should be kept

or the contents of submissions that are

sent to FDA. The agency published a

draft guidance document in the Federal

Register of June 12, 1998 (63 FR 32219).

FDA published a proposed import for

export regulation in the Federal

Register on November 24, 1998 (63 FR

64930), and intends to publish a

proposed rule on investigational new

drug exports in the immediate future.

Other export-related documents

issued by FDA include a rule on

investigational device exports (now

codified at § 812.18(b) (21 CFR

812.18(b))) and a Compliance Policy

Guide, CPG 7150.01, ‘‘Certification for

Exports,’’ on export certificates.

FDA agrees that implementing

sections 801 and 802 of the act is

difficult because the statutory

requirements apply to different products

in different ways. For example, most

human drugs are subject to the export

requirements in sections 802 and

801(e)(1) of the act, but insulin and

antibiotics for human use and animal

drugs are only exported under section

801(e) of the act. Most devices can be

exported under section 801(e) or section

802 of the act, and either choice carries

its own set of requirements. FDA

prepared the guidance document in an

effort to sort out the various

requirements for each product and

drafted the regulations to create binding

requirements where such requirements

were necessary. The agency decided

against drafting a single rule because

there was little overlap or commonality

between subjects. For example, the

import for export requirements are not

relevant for exports of investigational

new drugs, so a single rule would have

been inappropriate and confusing.

(Comment 47) One comment asked

FDA to phase-in the rule to minimize its

impact on commerce.

The final rule is effective March 19,

2002. This should give firms sufficient

time to comply with the rule.

(Comment 48) One comment said

FDA should conduct educational

seminars or programs, in conjunction

with the U.S. Customs Service and with

the support of various trade

associations, or do a televised program

whose agenda is developed by industry

and Federal agencies.

FDA has, in the past, participated in

conferences and educational programs

that have discussed export matters, and

individual centers have prepared

guidance documents and other materials

on selected topics. For example, CDRH

has prepared a videotape on export

issues. The agency intends to continue

its participation in educational

conferences and programs to the extent

that its resources permit.

(Comment 49) One comment would

revise § 1.101 to require only a simple

notification for drugs and devices

exported for investigational use. The

comment said that drugs and biological

products that are exported for

investigational use and are the subject of

an IND are regulated more strictly than

drugs and biological products that are

exported for investigational use without

an IND. The comment said that FDA

authorization is needed under

§ 312.110, but drugs that are exported

without an IND only require a simple

notification to FDA. Consequently, the

comment would revise the export

provisions in both parts 312 and 812 (21

CFR part 812) to require only simple

notifications for drugs and devices

exported for investigational use.

The agency declines to revise § 1.101

as suggested by the comment. Section

802(g) of the act only requires simple

notifications for exports under section

802(b)(1) of the act. FDA expects most

exports of drugs or devices for

investigational use in a listed country

will fall under section 802(c) of the act;

this means that exports of

investigational drugs or devices to a

listed country do not require a person to

provide a simple notification to FDA. If,

however, a firm exports a drug or device

for investigational use under section

802(b)(1) of the act, the firm will have

to provide a simple notification to FDA.

Additionally, as stated earlier, FDA

intends to publish a proposed rule in

the Federal Register to revise § 312.110

to describe various approaches for

exporting investigational new drugs.

FDA has already revised § 812.18(b) to

state that exports of investigational

devices are subject to either sections 801

or 802 of the act, so no further changes

to § 1.101 are necessary.

(Comment 50) The draft guidance

document discussed FDA’s position on

transshipment of investigational drugs

and devices (the shipment of an export

from one country to a second country,

followed by the shipment of the same

product from the second country to a

third country) (see 63 FR 62219 at

32228). The draft guidance document

interpreted section 802(c) of the act as

not allowing transshipment from a

listed country to an unlisted country

because the act does not suggest that the

listed countries are mere transfer points

or conduits for investigational drugs and

devices destined for unlisted countries

and because allowing transshipment

from listed to unlisted countries would

undermine the statutory limitation on

investigational drug and device exports

to listed countries. The proposed rule

on export notifications and

recordkeeping was silent on this issue.

Nevertheless, two comments

submitted to the proposed rule (instead

of the draft guidance document)

objected to FDA’s position on

transshipment. The comments argued

that shipments between listed and

unlisted countries are matters covered

by foreign law and that FDA’s

interpretation would restrict a firm’s

ability to conduct clinical trials outside

the United States or otherwise defeat

congressional intent and deprive foreign

governments of the ‘‘right’’ to determine

whether subsequent exports should be

made.

The issue of transshipment of

investigational drugs and devices is not

relevant to the final rule. Nevertheless,

the unrestricted transshipment of

investigational drugs and devices from

listed to unlisted countries would

undermine the express limitation in

section 802(c) of the act. Section 802(c)

of the act allows exports of drugs and

devices ‘‘intended for investigational

use in any [listed] country * * * in

accordance with the laws of that

country.’’ The key statutory phrase is

that the drug or device must be intended

for investigational use in a listed

country. In a transshipment scenario,

the drug or device is intended for

investigational use in an unlisted

country, and this would be contrary to

section 802(c) of the act.

However, if the investigation in the

unlisted country is subject to the laws

and regulations of the listed country—

in other words, if persons in the listed

country remain responsible for the

conduct of the clinical trial and the

investigation complies with the listed

country’s laws—shipment to an unlisted

country is not contrary to the act. To

illustrate how this works, assume that

an investigational new drug is exported

Federal Register / Vol. 66, No. 244 / Wednesday, December 19, 2001 / Rules and Regulations 65445

to a listed country, i.e., ‘‘country LC.’’ If

the investigational new drug is then

shipped to an unlisted country

(‘‘country X’’), but the investigation is

conducted in accordance with country

LC’s laws and regulations, shipment to

country X is permitted under section

802(c) of the act. FDA reaches this

interpretation because the investigation

is intended for use in the listed country,

albeit in a broad sense, and remains

subject to the listed country’s laws.

If, however, the investigational drug is

simply shipped to a warehouse in

country LC and then shipped to country

X, without anyone in country LC being

responsible for the investigation or

having the investigation remain subject

to country LC’s laws, then the export

would not comply with section 802(c) of

the act. The statutory requirements in

section 802(c) of the act would not be

met because the investigational use was

never intended to be in the listed

country and is not subject to country

LC’s laws.

III. Environmental Impact

The agency has determined under 21

CFR 25.30(h) 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.

IV. Paperwork Reduction Act of 1995

The proposed rule estimated the costs

associated with submitting notifications

to FDA and maintaining records. FDA

based its estimates on the number of

notifications received by FDA in 1996 or

1997 (depending on the last year for

which complete figures were available

at the time of the proposed rule) and

consultations with industry sources (64

FR 15944 at 15946). The Office of

Management and Budget (OMB), in

reviewing FDA’s Paperwork Reduction

Act documents, neither approved nor

rejected FDA’s request for approval of a

new information collection. Instead,

OMB stated that it had concerns

regarding the burden and utility of the

collection which shall be assessed in

light of public comments received. FDA

received several comments on the

agency’s estimates.

(Comment 51) For the recordkeeping

requirements for human drugs,

biological products, animal drugs,

devices, foods, and cosmetics exported

under or subject to section 801(e)(1) of

the act, FDA estimated that there would

be an average of 318 recordkeepers per

year, at a annual frequency of 2.8

records per respondent, at 1 hour per

record. One comment said that FDA

‘‘grossly underestimated’’ the

recordkeeping burden because the rule

presents significant burdens on food

manufacturers and creates ‘‘an entirely

new recordkeeping bureaucracy for

exporters of food products.’’ The

comment stated that translating letters

alone will take more than 1 hour per

product.

FDA disagrees with the comment.

Section 801(e)(1) of the act is not a new

statutory requirement, particularly

when applied to food exports, so it does

not present a new or significant burden

on food manufacturers or create ‘‘an

entirely new recordkeeping

bureaucracy.’’ Additionally, the final

rule reduces any burden on exporters by

revising certain requirements; for

example, the final rule clarifies that the

foreign purchaser’s specifications

should provide sufficient detail to be

linked to a particular export and that a

responsible company official may

certify that the export does not conflict

with the importing country’s laws.

While FDA concedes that § 1.101(b)

does, in one instance, seek Englishlanguage translations of foreign

documents, presumably a prudent U.S.

company would translate foreignlanguage documents as part of its

ordinary business practice, if only to

ensure that the foreign-language

document is what it purports to be or

that the U.S. company truly understands

the contents of the foreign-language

document or that the U.S. company

would be able to translate the foreignlanguage document into English.

As for the burden hour estimate for

§ 1.101(b), FDA, as explained below, has

increased the burden hour estimate to

24 hours per record.

(Comment 52) The preamble to the

proposed rule estimated the total

information collection burden to be

2,659 hours and that no capital costs or

operating and maintenance costs would

result.

Several comments said FDA

underestimated the total and that firms

would incur new costs. Two trade

associations, representing device

manufacturers and drug manufacturers,

indicated that the estimated information

collection burden and costs for a single

firm would be significant. For example,

one device firm was said to market its

products in 90 countries and in

approximately 600 different packaging

and labeling configurations. According

to the comment, to meet the proposed

recordkeeping requirements, the firm

would need new records for at least 500

configurations, at $30 per hour and 4

hours per record (for a total update cost

of $60,000) and recordkeeping costs

would be $100 per hour for 500 records,

or an additional $50,000. For new

products, estimated record preparation

costs would be $30 per hour x 4 hours

x 84 products (or $10,080) and

recordkeeping costs of $8,400. As

another example, a trade association

representing the drug industry

interpreted the rule as requiring detailed

records on product specifications and

translations. The comment said that one

drug company estimated that it spends

160 employee hours of ‘‘regulatory

time’’ and 80 person hours of ‘‘legal

time’’ alone to obtain documentation

necessary to export to a single

multicenter trial in Latin America and

Eastern Europe. (The comment did not

explain what ‘‘regulatory time’’ or ‘‘legal

time’’ are.) The comment did not

provide an estimate of the information

collection burden because it said that

FDA’s requirements were open-ended;

instead, it declared FDA’s estimates to

be ‘‘unrealistic.’’ Two comments also

said that drug companies would need to

spend $50,000 to $100,000 in capital

costs alone to upgrade their computers

to comply with the proposed

requirements.

FDA reiterates that its estimates were

based on the number of export

notifications FDA has received and on

information provided by industry

sources. Those industry sources varied

in terms of the amount of time required

to maintain a record or to submit a

notification, and none indicated that

computer upgrades would be necessary.

The averages must be compared against

the estimates provided in the comments,

which are based on information from a

single company.

The agency also disagrees, in part,

with the estimates provided by a single

device firm. In general, devices may be

exported under section 801(e) or 802 of

the act. The agency reiterates that, for

devices, the requirements in section

801(e)(1) of the act are not new;

consequently, if the devices are

exported under section 801(e) of the act,

the comment’s claim that hundreds of

‘‘new’’ records would be required

cannot be accurate unless the firm has

not been retaining any documents to

show its compliance with section

801(e)(1) of the act. In contrast, if the

firm is exporting devices under section

802(b) of the act, section 802(g) of the

act would require the firm to submit a

notification to FDA. Yet FDA’s export

notification records do not reveal a

significant number of device exports or

a significant number attributable to one

firm. The average number of export

notifications received was 244 per year.

This average covers both drug and

device firms and is far lower than the

65446 Federal Register / Vol. 66, No. 244 / Wednesday, December 19, 2001 / Rules and Regulations

500 export configurations claimed by

the single device firm in the comment. Nevertheless, FDA has increased the

recordkeeping burden hour estimate for

§ 1.101(b) from 2 hours to 24 hours. This

estimate exceeds the 4-hour estimate

submitted by the device firm and is

consistent with a comment (described

below in comment 53) from a drug

company. FDA declines to adopt the 240-hour

figure provided by a drug company for

exports of a drug for investigational use

because FDA cannot determine what

activities are covered by the comment’s

estimate or whether the comment’s

estimate even involves activities that are

covered by the rule. For example, the

comment stated that it devoted

considerable time assembling

documents to export drugs to a single

multicenter trial in Latin America and

Eastern Europe. The comment’s

reference to Latin America and Eastern

Europe suggests that the firm is not

exporting the drugs under section 802(c)

of the act because section 802(c) of the

act pertains solely to exports of

investigational new drugs and devices

to listed countries, and Latin American

and Eastern European countries are not

listed countries. So, to export a drug for

investigational use, the firm must be

exporting the investigational new drugs

under an IND or under § 312.110, or the

exported drugs have marketing

authorization from a listed country. (It

is possible that the firm could export an

investigational new drug under section

802(b)(1) of the act if the drug received

market authorization from a listed

country, but the comment did not

indicate that the investigational new

drug has such market authorization.)

Yet this final rule does not address

exports under an IND or § 312.110, and

therefore, if the firm’s comment is

relevant to this rule, the firm would

have to be exporting drugs that have

marketing authorization from a listed

country and using those drugs for

investigational use in Latin America and

Eastern Europe. Assuming this to be the

case, the changes in the final rule, such

as accepting a certification from a

responsible company official in place of

a letter from a foreign government and

clarifying FDA’s expectations regarding

a foreign purchaser’s specifications,

should reduce the firm’s information

collection burden.

(Comment 53) One comment said that

FDA underestimated the rule’s financial

impact. The comment explained that,

for a single firm, ‘‘notifications’’ for

section 801(e) of the act (which FDA

presumes to be ‘‘records’’ because

section 801(e)(1) of the act does not

require notification) will result in five

files and five records per year and

require 24 to 32 hours for each export

file. For notifications under section

802(g) of the act, there will be 10 files

and 7 records per year, at 0.75 hours per

export notification and 16 hours per

export file. For partially processed

biological products, the comment

claimed its averages as 18 files and 5

records per year, at 16 hours per export

file.

FDA has increased the burden hour

estimate for records under § 1.101(b) to

24 hours per record. The agency

declines to use the higher estimate of 32

hours because the final rule simplifies

the types of records that are required to

show compliance with section 801(e)(1)

of the act. For example, the final rule

accepts a company official’s notarized

certification that the exported product is

not in conflict with the foreign country’s

laws, whereas the proposed rule would

have required a letter from a foreign

government official.

FDA did not revise the estimates for

§ 1.101(d). Although the comment

suggests that the average number of

notifications is greater than 2.4 per

respondent, the comment’s claimed

average of five notifications per year

may be accurate for that particular firm

and may not be applicable to all firms

exporting products. FDA based its

estimate on the total number of

notifications received and the total

number of firms submitting

notifications. FDA further notes that its

estimate of 1 burden hour per

notification is actually greater than the

comment’s estimate of 0.75 burden

hours per notification. The comment’s

average time may reflect that firm’s

efficiency in processing notices, and

FDA will not assume that all firms are

as efficient.

As for partially processed biological

products, although the comment

suggests that the average number of

notifications is greater than 2.4 per

respondent, the comment’s claimed

average of five notifications per year

may be accurate for that particular firm

and may not be applicable to all firms

exporting products. FDA based its

estimate on the total number of

notifications received and the total

number of firms submitting

notifications. The agency is, however,

increasing the burden hour estimate for

§ 1.101(e) from 2 to 16 hours as

suggested by the comment.

This final rule contains information

collection requirements which are

subject to review by OMB under the

Paperwork Reduction Act of 1995. The

title, description, and respondent

description of the information collection

requirements are shown below, with an

estimate of the annual reporting and

recordkeeping burden. Included in the

estimate is the time for reviewing

instructions, searching existing data

sources, gathering and maintaining the

data needed, and completing and

reviewing the collection of information.

Title: Exports: Notification and

Recordkeeping Requirements.

Description: The final rule establishes

the notification and recordkeeping

requirements for persons exporting a

human drug, biological product, device,

animal drug, food, or cosmetic under

section 801(e) or 802 of the act or

section 351(h) of the PHS Act.

Description of Respondents:

Businesses.

TABLE 1.—ESTIMATED ANNUAL REPORTING BURDEN1

21 CFR Section No. of

Respondents

Annual Frequency

per Response

Total Annual

Responses

Hours per

Response Total Hours

1.101(b) 316 2.8 885 24 21,240

1.101(c) 8 2 16 2 32

Subtotal—Regulatory 21,272

1.101(d) 244 2.4 586 1 586

1.101(e) 175 3.3 578 16 9,248

Subtotal—Statutory 9,834

Total 31,106

1There are no capital costs or operating and maintenance costs associated with this collection of information.

Federal Register / Vol. 66, No. 244 / Wednesday, December 19, 2001 / Rules and Regulations 65447

The estimates are based on the

number of notifications received by the

relevant FDA centers in 1996 or 1997

(depending on the last year for which

figures were available) as well as

consultations with and comments from

industry sources.

As required by section 3507(d) of the

Paperwork Reduction Act of 1995, FDA

has submitted a copy of this rule to

OMB for its review of these previously

approved information collection

requirements.

V. Analysis of Impacts

FDA has examined the impacts of this

rule under Executive Order 12866 and

the Regulatory Flexibility Act (Public

Law 96–354). 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 new benefits

(including potential economic,

environmental, public health and safety,

and other advantages; distributive

impacts; and equity). The agency

believes this rule is consistent with the

regulatory philosophy and the

principles identified in the Executive

order. In addition, OMB has decided

that the rule is a significant regulatory

action as defined in the Executive order.

The Regulatory Flexibility Act

requires agencies to analyze regulatory

options that would minimize any

significant impact of a rule on small

entities. The rule establishes the

notification and recordkeeping

requirements for persons exporting

various FDA-regulated products under

sections 801(e) and 802 of the act and

section 351(h) of the PHS Act. The

notification and recordkeeping

requirements are minimal and involve

information that should already be in an

exporter’s possession (such as the name

of the product being exported, a

description of the product being

exported, and the date of exportation).

Thus, FDA certifies that this rule will

not have a significant economic impact

on a substantial number of small

entities. Therefore, under the Regulatory

Flexibility Act, no further analysis is

required.

Section 202(a) of the Unfunded

Mandates Reform Act of 1995 (2 U.S.C.

1501 et seq.) requires that agencies

prepare a written statement of

anticipated costs and benefits before

proposing any rule that may result in an

expenditure by State, local, and tribal

governments, in the aggregate, or by the

private sector, of $100 million in any

one year (adjusted annually for

inflation).

The agency has determined that the

final rule is not a significant action as

defined in the Unfunded Mandates

Reform Act, and will not have an effect

on the economy that exceeds $100

million in any one year.

VI. Federalism

FDA has analyzed this final rule in

accordance with the principles set forth

in Executive Order 13132. FDA has

determined that the rule does not

contain policies that have substantial

direct effects on the States, on the

relationship between the National

Government and the States, or on the

distribution of power and

responsibilities among the various

levels of government. Accordingly, the

agency has concluded that the rule does

not contain policies that have

federalism implications as defined in

the order and, consequently, a

federalism summary impact statement is

not required.

List of Subjects in 21 CFR Part 1

Cosmetics, Drugs, Exports, Food

labeling, Imports, Labeling, Reporting

and recordkeeping requirements.

Therefore, under the Federal Food,

Drug, and Cosmetic Act and under

authority delegated to the Commissioner

of Food and Drugs, 21 CFR part 1 is

amended as follows:

PART 1—GENERAL ENFORCEMENT

REGULATIONS

1. The authority citation for 21 CFR

part 1 is revised to read as follows:

Authority: 15 U.S.C. 1453, 1454, 1455; 21

U.S.C. 321, 343, 352, 355, 360b, 362, 371,

374, 381, 382, 393; 42 U.S.C. 216, 241, 243,

262, 264.

2. Section 1.101 is added to subpart

E to read as follows:

§ 1.101 Notification and recordkeeping.

(a) Scope. This section pertains to

notifications and records required for

human drug, biological product, device,

animal drug, food, and cosmetic exports

under sections 801 or 802 of the Federal

Food, Drug, and Cosmetic Act (the act)

or (21 U.S.C. 381 and 382) or section

351 of the Public Health Service Act (42

U.S.C. 262).

(b) Recordkeeping requirements for

human drugs, biological products,

devices, animal drugs, foods, and

cosmetics exported under or subject to

section 801(e)(1) of the act. Persons

exporting an article under section

801(e)(1) of the act or an article

otherwise subject to section 801(e)(1) of

the act shall maintain records as

enumerated in paragraphs (b)(1) through

(b)(4) of this section demonstrating that

the product meets the requirements of

section 801(e)(1) of the act. Such records

shall be maintained for the same period

of time as required for records subject to

good manufacturing practice or quality

systems regulations applicable to the

product, except that records pertaining

to the export of foods and cosmetics

under section 801(e)(1) of the act shall

be kept for 3 years after the date of

exportation. The records shall be made

available to the Food and Drug

Administration (FDA), upon request,

during an inspection for review and

copying by FDA.

(1) Records demonstrating that the

product meets the foreign purchaser’s

specifications: The records must contain

sufficient information to match the

foreign purchaser’s specifications to a

particular export;

(2) Records demonstrating that the

product does not conflict with the laws

of the importing country: This may

consist of either a letter from an

appropriate foreign government agency,

department, or other authorized body

stating that the product has marketing

approval from the foreign government or

does not conflict with that country’s

laws, or a notarized certification by a

responsible company official in the

United States that the product does not

conflict with the laws of the importing

country and that includes a statement

acknowledging that he or she is subject

to the provisions of 18 U.S.C. 1001;

(3) Records demonstrating that the

product is labeled on the outside of the

shipping package that it is intended for

export: This may consist of copies of

any labels or labeling statements, such

as ‘‘For export only,’’ that are placed on

65448 Federal Register / Vol. 66, No. 244 / Wednesday, December 19, 2001 / Rules and Regulations

1Editorial Note: This document was received at

the Office of the Federal Register on December 12,

2001.

the shipping packages or, if the exported

product does not have a shipping

package or container, on shipping

invoices or other documents

accompanying the exported product;

and

(4) Records demonstrating that the

product is not sold or offered for sale in

the United States: This may consist of

production and shipping records for the

exported product and promotional

materials.

(c) Additional recordkeeping

requirements for partially processed

biological products exported under

section 351(h) of the Public Health

Service Act. In addition to the

requirements in paragraph (b) of this

section, persons exporting a partially

processed biological product under

section 351(h) of the Public Health

Service Act shall maintain, for the same

period of time as required for records

subject to good manufacturing practice

or quality systems regulations

applicable to the product, and make

available to FDA, upon request, during

an inspection for review and copying by

FDA, the following records:

(1) Records demonstrating that the

product for export is a partially

processed biological product and not in

a form applicable to the prevention,

treatment, or cure of diseases or injuries

of man;

(2) Records demonstrating that the

partially processed biological product

was manufactured in conformity with

current good manufacturing practice

requirements;

(3) Records demonstrating the

distribution of the exported partially

processed biological products; and

(4) Copies of all labeling that

accompanies the exported partially

processed biological product and other

records demonstrating that the exported

partially processed biological product is

intended for further manufacture into a

final dosage form outside the United

States; this may include a container

label with the statement, ‘‘Caution: For

Further Manufacturing Use Only’’ and

any package insert.

(d) Notification requirements for

drugs, biological products, and devices

exported under section 802 of the act.

(1) Persons exporting a human drug,

biological product, or device under

section 802 of the act, other than a drug,

biological product, or device for

investigational use exported under

section 802(c) of the act, or a drug,

biological product, or device exported

in anticipation of marketing

authorization under section 802(d) of

the act, shall provide written

notification to FDA. The notification

shall identify:

(i) The product’s trade name;

(ii) If the product is a drug or

biological product, the product’s

abbreviated or proper name or, if the

product is a device, the type of device;

(iii) If the product is a drug or

biological product, a description of the

product’s strength and dosage form or,

if the product is a device, the product’s

model number; and

(iv) If the export is to a country not

listed in section 802(b)(1) of the act, the

country that is to receive the exported

article. The notification may, but is not

required to, identify countries listed in

section 802(b)(1) of the act or state that

the export is intended for a listed

country without identifying the listed

country.

(2) The notification shall be sent to

the following addresses:

(i) For biological products and devices

regulated by the Center for Biologics

Evaluation and Research—Division of

Case Management (HFM–610), Office of

Compliance and Biologics Quality,

Center for Biologics Evaluation and

Research, Food and Drug

Administration, 1401 Rockville Pike,

rm. 200N, Rockville, MD 20852–1448;

(ii) For human drug products—

Division of Labeling and

Nonprescription Drug Compliance

(HFD–310), Center for Drug Evaluation

and Research, Food and Drug

Administration, 7520 Standish Pl.,

Rockville, MD 20855–2737;

(iii) For devices—Division of Program

Operations (HFZ–305), Center for

Devices and Radiological Health, Food

and Drug Administration, 2094 Gaither

Rd., Rockville, MD 20850.

(e) Recordkeeping requirements for

products subject to section 802(g) of the

act. (1) Any person exporting a product

under any provision of section 802 of

the act shall maintain records of all

drugs, biological products, and devices

exported and the countries to which the

products were exported. In addition to

the requirements in paragraph (b) of this

section, such records include, but are

not limited to, the following:

(i) The product’s trade name;

(ii) If the product is a drug or

biological product, the product’s

abbreviated or proper name or, if the

product is a device, the type of device;

(iii) If the product is a drug or

biological product, a description of its

strength and dosage form and the

product’s lot or control number or, if the

product is a device, the product’s model

number;

(iv) The consignee’s name and

address; and

(v) The date on which the product

was exported and the quantity of

product exported.

(2) These records shall be kept at the

site from which the products were

exported or manufactured, and be

maintained for the same period of time

as required for records subject to good

manufacturing practice or quality

systems regulations applicable to the

product. The records shall be made

available to FDA, upon request, during

an inspection for review and copying by

FDA.

Dated: March 1, 2001.

Ann M. Witt,

Acting Associate Commissioner for Policy.

Dated: April 10, 2001.1

Timothy E. Skud,

Acting Deputy Assistant Secretary of the

Treasury.

[FR Doc. 01–31026 Filed 12–18–01; 8:45 am]

BILLING CODE 4160–01–S

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 62

[KS 0145–1145a; FRL–7120–2]

Approval and Promulgation of State

Plans for Designated Facilities and

Pollutants; Control of Emissions From

Hospital/Medical/Infectious Waste

Incinerators; State of Kansas

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Direct final rule.

SUMMARY: EPA is approving a revision to

the state of Kansas’ section 111(d) plan

for controlling emissions from existing

hospital/medical/infectious waste

incinerators. The state revised its

existing plan to establish increments of

progress and a new compliance date for

two HMIWI sources. Approval of the

revised state plan will ensure that these

requirements are Federally enforceable.

DATES: This direct final rule will be

effective February 19, 2002. unless EPA

receives adverse comments by January

18, 2002. If adverse comments are

received, EPA will publish a timely

withdrawal of the direct final rule in the

Federal Register informing the public

that the rule will not take effect.

ADDRESSES: Comments may be mailed to

Wayne Kaiser, Environmental

Protection Agency, Air Planning and

Development Branch, 901 North 5th

Street, Kansas City, Kansas 66101.

Copies of documents relative to this

action are available for public

inspection during normal business