Document ID: FDA-2018-N-2732-0001
Agency: fda
Document Type: Proposed Rule
Title: Definition of the Term ‘‘Biological Product’’
Posted Date: 2018-12-12T05:00Z

[Federal Register Volume 83, Number 238 (Wednesday, December 12, 2018)]
[Proposed Rules]
[Pages 63817-63824]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-26840]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Part 600

[Docket No. FDA-2018-N-2732]
RIN 0910-AH57

Definition of the Term ``Biological Product''

AGENCY: Food and Drug Administration, HHS.

ACTION: Proposed rule.

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SUMMARY: The Food and Drug Administration (FDA or the Agency) is 
proposing to amend its regulation that defines ``biological product'' 
to incorporate changes made by the Biologics Price Competition and 
Innovation Act of 2009 (BPCI Act), and to provide its interpretation of 
the statutory terms ``protein'' and ``chemically synthesized 
polypeptide.'' Under that interpretation, the term protein would mean 
any alpha amino acid polymer with a specific, defined sequence that is 
greater than 40 amino acids in size. A chemically synthesized 
polypeptide would mean any alpha amino acid polymer that is made 
entirely by chemical synthesis and is greater than 40 amino acids but 
less than 100 amino acids in size. This proposed rule is intended to 
clarify the statutory framework under which such products are 
regulated.

DATES: Submit either electronic or written comments on the proposed 
rule by February 25, 2019.

ADDRESSES: You may submit comments as follows. Please note that late, 
untimely filed comments will not be considered. Electronic comments 
must be submitted on or before February 25, 2019. The https://www.regulations.gov electronic filing system will accept comments until 
midnight Eastern Time at the end of February 25, 2019. Comments 
received by mail/hand delivery/courier (for written/paper submissions) 
will be considered timely if they are postmarked or the delivery 
service acceptance receipt is on or before that date.

Electronic Submissions

    Submit electronic comments in the following way:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments. Comments submitted 
electronically, including attachments, to https://www.regulations.gov 
will be posted to the docket unchanged. Because your comment will be 
made public, you are solely responsible for ensuring that your comment 
does not include any confidential information that you or a third party 
may not wish to be posted, such as medical information, your or anyone 
else's Social Security number, or confidential business information, 
such as a manufacturing process. Please note that if you include your 
name, contact information, or other information that identifies you in 
the body of your comments, that information will be posted on https://www.regulations.gov.
     If you want to submit a comment with confidential 
information that you do not wish to be made available to the public, 
submit the comment as a written/paper submission and in the manner 
detailed (see ``Written/Paper Submissions'' and ``Instructions.'')

Written/Paper Submissions

    Submit written/paper submissions as follows:
     Mail/Hand Delivery/Courier (for written/paper 
submissions): Dockets Management Staff (HFA-305), Food and Drug 
Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

[[Page 63818]]

     For written/paper comments submitted to the Dockets 
Management Staff, FDA will post your comment, as well as any 
attachments, except for information submitted, marked and identified as 
confidential, if submitted as detailed in ``Instructions.''
    Instructions: All submissions received must include the Docket No. 
FDA-2018-N-2732 for ``Definition of the Term `Biological Product'.'' 
Received comments, those filed in a timely manner (see ADDRESSES), will 
be placed in the docket and, except for those submitted as 
``Confidential Submissions,'' publicly viewable at https://www.regulations.gov or at the Dockets Management Staff between 9 a.m. 
and 4 p.m., Monday through Friday.
     Confidential Submissions--To submit a comment with 
confidential information that you do not wish to be made publicly 
available, submit your comments only as a written/paper submission. You 
should submit two copies total. One copy will include the information 
you claim to be confidential with a heading or cover note that states 
``THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.'' The Agency will 
review this copy, including the claimed confidential information, in 
its consideration of comments. The second copy, which will have the 
claimed confidential information redacted/blacked out, will be 
available for public viewing and posted on https://www.regulations.gov. 
Submit both copies to the Dockets Management Staff. If you do not wish 
your name and contact information to be made publicly available, you 
can provide this information on the cover sheet and not in the body of 
your comments and you must identify this information as 
``confidential.'' Any information marked as ``confidential'' will not 
be disclosed except in accordance with 21 CFR 10.20 and other 
applicable disclosure law. For more information about FDA's posting of 
comments to public dockets, see 80 FR 56469, September 18, 2015, or 
access the information at: https://www.gpo.gov/fdsys/pkg/FR-2015-09-18/pdf/2015-23389.pdf.
    Docket: For access to the docket to read background documents or 
the electronic and written/paper comments received, go to https://www.regulations.gov and insert the docket number, found in brackets in 
the heading of this document, into the ``Search'' box and follow the 
prompts and/or go to the Dockets Management Staff, 5630 Fishers Lane, 
Rm. 1061, Rockville, MD 20852.

FOR FURTHER INFORMATION CONTACT: Janice Weiner, Center for Drug 
Evaluation and Research, Food and Drug Administration, 10903 New 
Hampshire Ave., Bldg. 51, Rm. 6270, Silver Spring, MD 20993, 301-796-
3475, janice.weiner@fda.hhs.gov.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Executive Summary
    A. Purpose of the Proposed Rule
    B. Summary of the Major Provisions of the Proposed Rule
    C. Legal Authority
    D. Costs and Benefits
II. Table of Abbreviations/Commonly Used Acronyms in This Document
III. Background
    A. Introduction
    B. History of the Rulemaking
IV. Legal Authority
V. Description of the Proposed Rule
VI. Proposed Effective Date
VII. Economic Analysis of Impacts
    A. Introduction
    B. Summary of Costs and Benefits
    C. Summary of Regulatory Flexibility Analysis
VIII. Analysis of Environmental Impact
IX. Paperwork Reduction Act of 1995
X. Consultation and Coordination With Indian Tribal Governments
XI. Federalism
XII. References

I. Executive Summary

A. Purpose of the Proposed Rule

    FDA proposes to amend its regulation that defines ``biological 
product'' to make a technical revision and to conform to the statutory 
definition enacted in the BPCI Act. The BPCI Act amended the definition 
of biological product in section 351(i) of the Public Health Service 
Act (PHS Act) to include a ``protein (except any chemically synthesized 
polypeptide).'' The proposed rule would make conforming changes to 
Sec.  600.3 (21 CFR 600.3) to add ``protein'' and ``chemically 
synthesized polypeptide.''

B. Summary of the Major Provisions of the Proposed Rule

    Under the proposed rule, the term protein would mean any alpha 
amino acid polymer with a specific defined sequence that is greater 
than 40 amino acids in size, and the term chemically synthesized 
polypeptide would mean any alpha amino acid polymer that: (1) Is made 
entirely by chemical synthesis and (2) is greater than 40 amino acids 
but less than 100 amino acids in size. This is consistent with 
interpretations of these terms that FDA previously described in a final 
guidance document issued on April 30, 2015 (see 80 FR 24259 (announcing 
the availability of a guidance for industry entitled ``Biosimilars: 
Questions and Answers Regarding Implementation of the Biologics Price 
Competition and Innovation Act of 2009,'' available at https://www.regulations.gov (Docket No. FDA-2011-D-0611) (Biosimilars Q&A 
Guidance)).

C. Legal Authority

    FDA is proposing to amend its regulations to implement certain 
aspects of the BPCI Act. FDA's authority for this rule derives from the 
biological product provisions in section 351 of the PHS Act (42 U.S.C. 
262), and the provisions of the Federal Food, Drug, and Cosmetic Act 
(FD&C Act) (21 U.S.C. 321, et seq.) applicable to drugs. The rule is 
necessary to clarify the statutory authority under which biological 
products are regulated and to prevent inconsistent regulation.

D. Costs and Benefits

    This proposed rule would codify FDA's interpretation of the 
statutory terms ``protein'' and ``chemically synthesized polypeptide'' 
in a manner that is consistent with interpretations of these terms that 
FDA previously described in guidance (see Biosimilars Q&A Guidance). 
Formalizing these interpretations would reduce regulatory uncertainty 
over whether certain products are regulated as drugs or biological 
products. This reduced uncertainty, under the ``bright-line'' approach 
described in the proposed rule, would allow both FDA and private 
industry to avoid spending hours and resources on case-by-case 
determinations for each product. Our primary estimate of the benefits 
from these cost savings in 2017 dollars annualized over 10 years is 
$340,766 using a 7 percent discount rate and $321,506 using a 3 percent 
discount rate. We also calculate ranges of benefits of $318,137 to 
$355,690 and $300,617 to $335,282, respectively. Additionally, drug 
manufacturers would need to spend time to read and understand the 
proposed rule. We monetize the time spent by industry and estimate an 
annualized cost range from $14,471 to $18,089, with a primary estimate 
of $16,079 using a 7 percent discount rate over a 10-year horizon. For 
a 3 percent discount rate, we estimate a range of $12,378 to $15,472, 
with a primary estimate of $13,753.

II. Table of Abbreviations/Commonly Used Acronyms in This Document

[[Page 63819]]

------------------------------------------------------------------------
          Abbreviation/acronym                    What it means
------------------------------------------------------------------------
BPCI Act...............................  Biologics Price Competition and
                                          Innovation Act of 2009.
CFR....................................  Code of Federal Regulations.
FD&C Act...............................  Federal Food, Drug, and
                                          Cosmetic Act.
FDA....................................  U.S. Food and Drug
                                          Administration.
PHS Act................................  Public Health Service Act.
U.S....................................  United States.
U.S.C..................................  United States Code.
------------------------------------------------------------------------

III. Background

A. Introduction

    The BPCI Act amended the definition of biological product in 
section 351(i) of the PHS Act to include a ``protein (except any 
chemically synthesized polypeptide).'' As amended by the BPCI Act, a 
biological product is defined as ``a virus, therapeutic serum, toxin, 
antitoxin, vaccine, blood, blood component or derivative, allergenic 
product, protein (except any chemically synthesized polypeptide), or 
analogous product, or arsphenamine or derivative of arsphenamine (or 
any other trivalent organic arsenic compound), applicable to the 
prevention, treatment, or cure of a disease or condition of human 
beings'' (see section 351(i)(1) of the PHS Act).
    The BPCI Act clarified the statutory authority under which certain 
protein products are to be regulated. Although the majority of 
therapeutic biological products have been licensed under section 351 of 
the PHS Act, some protein products historically have been approved 
under section 505 of the FD&C Act (21 U.S.C. 355). The BPCI Act 
requires that a marketing application for a ``biological product'' 
(that previously would have been submitted under section 505 of the 
FD&C Act) must be submitted under section 351 of the PHS Act, subject 
to certain exceptions during a 10-year transition period ending on 
March 23, 2020 (see sections 7002(e)(1) through (3) and (e)(5) of the 
BPCI Act).
    The BPCI Act also amended the PHS Act and other statutes to create 
an abbreviated licensure pathway in section 351(k) of the PHS Act for 
biological products shown to be biosimilar to, or interchangeable with, 
an FDA-licensed biological reference product (see sections 7001 through 
7003 of the BPCI Act). The objectives of the BPCI Act are conceptually 
similar to those of the Drug Price Competition and Patent Term 
Restoration Act of 1984 (Pub. L. 98-417) (commonly referred to as the 
``Hatch-Waxman Amendments''), which established abbreviated pathways 
for the approval of drug products under section 505(b)(2) and (j) of 
the FD&C Act. FDA is proposing to provide its interpretation of the 
terms ``protein'' and ``chemically synthesized polypeptide'' to clarify 
the statutory framework under which such products are regulated.

B. History of the Rulemaking

    On October 5, 2010, the Agency published a notice of public hearing 
and request for comments concerning implementation of the BPCI Act (75 
FR 61497). Information on this public hearing, including the Federal 
Register notice, meeting transcripts, and public comments can be found 
at https://www.regulations.gov (Docket No. FDA-2010-N-0477). In the 
notice, FDA addressed ``the absence of scientific consensus on the 
distinction between the categories of `protein' and `polypeptide' or 
`peptide,' '' and requested comment concerning how these statutory 
terms should be interpreted. FDA also described its thinking on this 
topic and sought additional comments by opening a docket for the 
Agency's draft guidance document on ``Biosimilars: Questions and 
Answers Regarding Implementation of the Biologics Price Competition and 
Innovation Act of 2009'' (see 77 FR 8885, February 15, 2012; available 
at https://www.regulations.gov (Docket No. FDA-2011-D-0611)) 
(Biosimilars Q&A Draft Guidance Docket). This draft guidance document 
issued in 2012 has been superseded by subsequent guidance documents.
    FDA reviewed the relevant comments in these public dockets and 
conducted an extensive analysis of the scientific literature in 
considering how to interpret ``protein (except any chemically 
synthesized polypeptide)'' in the amended definition of ``biological 
product'' in section 351(i) of the PHS Act.
    Some comments submitted to the public docket established for the 
Biosimilars Q&A Draft Guidance supported using the size of the alpha 
amino acid polymer as the basis for FDA's interpretation of the 
statutory term ``protein.'' Other comments suggested that FDA should 
consider structural and/or functional attributes and, for example, 
interpret the statutory term ``protein'' to mean an alpha amino acid 
polymer with a specific defined sequence that requires a stable 
multidimensional conformation for its function and is manufactured by a 
process that utilizes a biological system. Several comments suggested 
that FDA interpret the statutory term ``chemically synthesized 
polypeptide'' to mean any linear chain of alpha amino acids that is 
made entirely by chemical synthesis, irrespective of the size of the 
chain. Some, but not all, of these comments also suggested that a 
chemically synthesized polypeptide should not rely on higher order 
structure for functionality.
    A review of the scientific literature and dictionaries demonstrates 
consensus on certain aspects of the definitions of the terms 
``protein,'' ``polypeptide,'' and ``peptide,'' as well as how the 
definitions vary.
1. Dictionary Definitions
a. Protein
     ``A complex, high polymer containing carbon, hydrogen, 
oxygen, nitrogen, and usually sulfur, and composed of chains of amino 
acids connected by peptide linkages. . . .'' (Ref. 1)
     ``Protein molecules consist of one or several long chains 
(polypeptides) of amino acids linked in a characteristic sequence.'' 
(Ref. 2)
     ``A high molecular weight polypeptide of L-amino acids 
that is synthesized by living cells. Proteins are biopolymers with a 
wide range of molecular weights, structural complexity, and functional 
properties.'' (Ref. 3)
     ``Any of a large class of complex organic chemical 
compounds that. . .consist of long chains of amino acids connected by 
peptide bonds and have distinct and varied three-dimensional 
structures.'' (Ref. 4)
b. Polypeptide
     ``The class of compounds composed of acid units chemically 
bound together with amide linkages (-CO[middot]NH-) with elimination of 
water. A polypeptide is thus a polymer of amino acids. The chain of 
amino acids (less than 100) are linked by peptide bonds.'' (Ref. 1)
     ``A peptide comprising 20 or more amino acids. 
Polypeptides that

[[Page 63820]]

constitute proteins usually contain 100-300 amino acids.'' (Ref. 2)
     ``The term [polypeptide] is most often used for proteins, 
which can consist of one or more polypeptide chains, but can also be 
used more generally for all amino acid polymers including peptides, 
polyamino acids, and chemically synthesized polymers of amino acids.'' 
(Ref. 5)
     ``A linear polymer of more than 10 amino acids that are 
linked by means of peptide bonds.'' (Ref. 3)
     ``A peptide which on hydrolysis yields more than two amino 
acids. . . . See peptide.'' (Ref. 6)
c. Peptide
     ``See polypeptide.'' (Ref. 1)
     ``Any of a group of organic compounds comprising two or 
more amino acids linked by peptide bonds. . . . Polypeptides contain 
more than 20 and usually 100-300.'' (Ref. 2)
     ``A chemical compound that is composed of a chain of two 
or more amino acids and is usually smaller than a protein.'' (Ref. 4)
     ``Any member of a class of compounds of low molecular 
weight which yield two or more amino acids on hydrolysis. . . . 
Peptides form the constituent parts of proteins.'' (Ref. 6)
     ``Peptides . . . are oligomers in which the repeating 
units are amino acids. Peptides have a defined sequence of amino acids 
that are linked together by formation of peptide bonds. In contrast to 
polypeptides and proteins, peptides consist of a small number of amino 
acids. The distinction between a peptide and a polypeptide is somewhat 
arbitrary, but generally a peptide has between 2 and 50 amino acid 
residues. . . . Most peptides are unstructured, described as having a 
random coil conformation, but others have highly ordered secondary and 
tertiary structure similar to that observed in larger proteins.'' (Ref. 
5)
2. Textbook Definitions
     ``Most natural polypeptide chains contain between 50 and 
2000 amino acid residues and are commonly referred to as proteins. 
Peptides made of small numbers of amino acids are called oligopeptides 
or simply peptides.'' (Ref. 7)
     ``Proteins are molecules that consist of one or more 
polypeptide chains. These polypeptides range in length from ~40 to 
~33,000 amino acid residues.'' (Ref. 8)
     ``Proteins consist of one or more linear polymers called 
polypeptides . . . a minimum of 40 residues seems to be required for a 
polypeptide to adopt a stable three-dimensional structure in water.'' 
(Ref. 9)
     ``Many terms are used to denote the chains formed by the 
polymerization of amino acids. A short chain of amino acids linked by 
peptide bonds and having a defined sequence is called an oligopeptide, 
or just peptide; longer chains are referred to as polypeptides. 
Peptides generally contain fewer than 20-30 amino acid residues, 
whereas polypeptides are often 200-500 residues long.'' (Ref. 10)
     ``A protein molecule is made from a long chain of these 
amino acids, each linked to its neighbor through a covalent peptide 
bond. Proteins are therefore also known as polypeptides. Each type of 
protein has a unique sequence of amino acids. . . . Proteins come in a 
wide variety of shapes, and they are generally between 50 and 2000 
amino acids long.'' (Ref. 11)
    As the previous examples demonstrate, sources disagree over certain 
aspects of the definitions of these terms, especially the term 
``polypeptide.''
    At the same time, despite the lack of precise, agreed-upon 
definitions, most, if not all, sources agree about certain aspects of 
the meanings of these terms. These areas of agreement may be summarized 
in the following manner. First, all of the terms (protein, polypeptide, 
and peptide) refer to amino acid polymers (``chains'') made up of alpha 
amino acids linked by peptide bonds. Second, protein refers to chains 
containing a specific, defined sequence of amino acids, generally 
provided by a corresponding DNA or RNA sequence. As noted in one 
biochemistry textbook: ``In 1953, Frederick Sanger determined the amino 
acid sequence of insulin, a protein hormone [figure omitted]. This work 
is a landmark in biochemistry because it showed for the first time that 
a protein has a precisely defined amino acid sequence.'' (Ref. 7) 
(emphasis in original). Finally, peptide is a term distinct from 
protein. Most sources agree that the term peptide generally refers to 
smaller, simpler chains of amino acids, while protein is used to refer 
to longer, more complex chains. Based on these areas of agreement, the 
generally accepted meanings of protein, polypeptide, and peptide appear 
to include the following: All three terms refer to amino acid polymers. 
Proteins are long, complex polymers of alpha amino acids. Each protein 
has a specific, defined sequence. Peptides are distinct from proteins.
    In applying its scientific expertise to interpret the statutory 
terms ``protein'' and ``chemically synthesized polypeptide,'' FDA seeks 
to establish a scientifically reasonable, bright-line rule that 
provides regulatory clarity and facilitates the implementation of the 
BPCI Act. A clear rule facilitates efficient use of time and resources 
by both FDA and applicants and reduces regulatory uncertainty.
    Under the Agency's proposed interpretation, the term ``protein'' in 
the amended definition of biological product would not include 
peptides. In general, most scientific sources describe the term protein 
as excluding ``peptides'' (i.e., amino acid polymers or ``chains'' that 
are generally shorter and simpler than proteins). Thus, to the extent 
that there is a generally accepted meaning of ``protein,'' peptides 
appear to be outside the scope of the term.
    With these considerations in mind, FDA is proposing a size-based 
cutoff for distinguishing peptides from proteins that is supported by 
scientific sources. This approach reflects the Agency's conclusion 
that, other than size, there does not appear to be a precise set of 
structural or functional attributes that would define a protein so as 
to clearly distinguish proteins from peptides. Specifically, for 
purposes of interpreting the BPCI Act, the Agency is proposing to 
codify that ``protein (except any chemically synthesized polypeptide)'' 
would mean any alpha amino acid polymer with a specific, defined 
sequence that is greater than 40 amino acids in size. This threshold, 
based on a single, well-defined criterion, would supply a clear, 
bright-line rule.

IV. Legal Authority

    FDA's authority for this proposed rule derives from the biological 
product provisions in section 351 of the PHS Act and the provisions of 
the FD&C Act (21 U.S.C. 321, et seq.) applicable to drugs. Under these 
provisions of the PHS Act and the FD&C Act, FDA has the authority to 
issue regulations designed to ensure, among other things, that 
biological products are safe, pure, and potent and manufactured in 
accordance with current good manufacturing practices. FDA also has 
general authority to issue regulations for the efficient enforcement of 
the FD&C Act and the PHS Act, under section 701 of the FD&C Act (21 
U.S.C. 371) and section 351(j) of the PHS Act.

V. Description of the Proposed Rule

    This proposed rule would amend the definition of biological product 
in Sec.  600.3(h) to make a technical revision and to conform to 
changes in the statutory definition of ``biological product'' made by 
the BPCI Act.
    We are proposing to revise the definition of biological product in

[[Page 63821]]

Sec.  600.3(h) by replacing the phrase ``means any'' with the phrase 
``means a'' to conform to the text of section 351(i)(1) of the PHS Act. 
This proposed technical revision to the definition of biological 
product is not intended to alter our interpretation of Sec.  600.3(h).
    We also are proposing to define a biological product in Sec.  
600.3(h) to include a ``protein (except any chemically synthesized 
polypeptide).'' We are proposing to add paragraphs (h)(6) and (7) to 
this section to provide our interpretation of the terms ``protein'' and 
``chemically synthesized polypeptide.''
    Under the proposed rule, the term protein would mean any alpha 
amino acid polymer with a specific, defined sequence that is greater 
than 40 amino acids in size. FDA's proposed interpretation of this 
statutory term is informed by several factors. The scientific 
literature describes a protein as a defined sequence of alpha amino 
acid polymers linked by peptide bonds and generally excludes 
``peptides'' from the category of ``protein.'' Similarly, a peptide 
generally refers to polymers that are smaller, perform fewer functions, 
contain less three-dimensional structure, are less likely to be post-
translationally modified, and, therefore, are generally characterized 
more easily than proteins. Consistent with the scientific literature, 
FDA is proposing to codify its interpretation of the term ``protein'' 
in a manner that does not include peptides. To enhance regulatory 
clarity and minimize administrative complexity, FDA is proposing to 
codify an approach that distinguishes proteins from peptides based 
solely on size (i.e., number of amino acids).
    In the absence of clear scientific consensus on definitive criteria 
that distinguish proteins from peptides, including the exact size at 
which a chain(s) of amino acids becomes a protein, FDA reviewed the 
pertinent literature and concluded that a threshold of 40 amino acids 
is appropriate for defining the upper size boundary of a peptide. 
Although there also is support in the scientific literature for a 
threshold of 50 amino acids, FDA believes that a threshold of 40 amino 
acids is more appropriate based on the scientific literature and 
alignment with current regulatory practice (see Refs. 5, 7, 8, 9, 11). 
FDA's proposal to use a threshold of 40 amino acids for its ``bright-
line'' approach reflects that amino acid polymers that are greater than 
40 amino acids may often assume several of the structural and 
functional characteristics that are generally associated with proteins, 
lending a higher level of complexity to these products. Accordingly, 
FDA proposes to consider any polymer composed of 40 or fewer amino 
acids to be a peptide and not a protein. Therefore, unless a peptide 
otherwise meets the statutory definition of a ``biological product,'' 
it would be regulated as a drug under the FD&C Act.
    Where an amino acid polymer is greater than 40 amino acids in size 
and is related to a naturally occurring peptide (i.e., a polymer that 
is 40 or fewer amino acids in size), such a polymer would be reviewed 
to determine whether the additional amino acids that cause the peptide 
to exceed 40 amino acids in size raise any concerns about the risk/
benefit profile of the product.
    Some amino acid polymers are composed of multiple amino acid chains 
that are associated with each other. To determine the size of such an 
amino acid polymer for purposes of FDA's interpretation of the terms 
``protein'' and ``chemically synthesized polypeptide,'' FDA would 
evaluate whether two or more of its amino acid chains are associated in 
a manner that is found in naturally occurring proteins. In proposed 
Sec.  600.3(h)(6) and (7), FDA explains that when two or more amino 
acid chains in an amino acid polymer are associated with each other in 
a manner that occurs in nature, the size of the amino acid polymer 
would be based on the total number of amino acids in those chains, and 
would not be limited to the number of amino acids in a contiguous 
sequence. In other words, the amino acids in each such amino acid chain 
would be added together to determine whether the product meets the 
numerical threshold in FDA's interpretation of the terms ``protein'' 
and ``chemically synthesized polypeptide.'' However, for products with 
amino acid chains that are associated with each other in a manner that 
is not found in nature (i.e., amino acid chains that are associated 
with each other in a novel manner that is not found in naturally 
occurring proteins), FDA would conduct a fact-specific, case-by-case 
analysis to determine whether the size of the amino acid polymer, for 
purposes of this definition, should be based on adding each of the 
amino acids in the amino acid chains together, or should be based on 
separate consideration of the amino acid chains (e.g., the number of 
amino acids in the largest chain). In such cases, FDA would consider in 
its analysis, among other things, any structural or functional 
characteristics of the product.
    The proposed rule would define chemically synthesized polypeptide 
to mean any alpha amino acid polymer that: (1) Is made entirely by 
chemical synthesis and (2) is greater than 40 amino acids but less than 
100 amino acids in size. As amended by the BPCI Act, the term 
``protein'' specifically excludes chemically synthesized polypeptides. 
Thus, chemically synthesized polypeptides will continue to be regulated 
as drugs under the FD&C Act unless the product meets the statutory 
definition of a ``biological product'' on another basis.
    Where an amino acid polymer is greater than 99 amino acids in size 
and is related to a naturally occurring peptide or polypeptide of 
shorter length, such a polymer would be reviewed to determine whether 
the additional amino acids that cause the polymer to exceed 99 amino 
acids in size raise any concerns about the risk/benefit profile of the 
product.
    FDA's proposed interpretation of this statutory term is informed by 
several factors. The statutory category of ``protein'' parenthetically 
excludes ``any chemically synthesized polypeptide.'' There are several 
definitions of polypeptide in the scientific literature. Some are broad 
(e.g., polypeptide means any amino acid polymer), while others are more 
narrow (e.g., polypeptide means any amino acid polymer composed of 
fewer than 100 amino acids). FDA believes that a narrow definition of 
polypeptide is most appropriate in this context because, among other 
reasons, this avoids describing an exception to the statutory category 
of protein that includes a broader category of molecules. In addition, 
FDA believes that any chemically synthesized polypeptide composed of 
more than 99 amino acids would have, among other characteristics, a 
level of structural and functional complexity and sensitivity to 
environmental conditions that makes regulating such a protein under the 
same statutory authority as the majority of proteins more appropriate. 
Moreover, a narrow definition of polypeptide means that larger and/or 
more complex proteins (i.e., amino acid polymers composed of more than 
99 amino acids) are considered to be biological products regardless of 
their method of manufacture. This approach also addresses the concern 
raised in a public comment ``that reliance on the mode of manufacture 
will create incentives for a manufacturer to choose a process that may 
be suboptimal solely to enable its product to be regulated under a 
particular statute'' (Biosimilars Q&A Draft Guidance Docket). 
Therefore, FDA proposes to interpret the statutory exclusion for 
chemically synthesized polypeptide narrowly to mean any

[[Page 63822]]

molecule that is made entirely by chemical synthesis and that is 
composed of greater than 40 amino acids but less than 100 amino acids 
in size. The phrase ``made entirely by chemical synthesis'' would mean 
that all amino acids in the peptide chain were added to the peptide by 
a synthetic process that does not involve any synthesis of any portion 
of the peptide using cell-based or cell-free recombinant-DNA-directed 
synthesis or recombinant-RNA-directed synthesis. Chemically synthesized 
polypeptides would be regulated as drugs under the FD&C Act unless the 
molecule otherwise meets the statutory definition of a ``biological 
product.'' For example, vaccines are specifically identified as 
biological products under the statutory definition in section 351(i) of 
the PHS Act irrespective of their size, content, or method of 
manufacture. Accordingly, vaccines will continue to be regulated as 
such under the PHS Act, even if they contain, or are composed of, an 
amino acid chain of 40 or fewer amino acids and/or a chemically 
synthesized polypeptide composed of greater than 40 amino acids but 
less than 100 amino acids in size.
    FDA seeks comment on any additional considerations for proposed 
products that are combination products or meet the statutory definition 
of both a ``device'' and a ``biological product.'' We also encourage 
prospective sponsors or applicants to contact FDA with product-specific 
questions. Any final rule that results from this proposed rule will 
become effective 60 days after publication in the Federal Register or 
on March 23, 2020, the end of the 10-year transition period specified 
in the BPCI Act, whichever is earlier (see sections 7002(e)(1) through 
(3) and (e)(5) of the BPCI Act).

VI. Proposed Effective Date

    If finalized, this rule would take effect 60 days after publication 
in the Federal Register or on March 23, 2020, whichever is earlier.

VII. Economic Analysis of Impacts

A. Introduction

    We have examined the impacts of the proposed rule under Executive 
Order 12866, Executive Order 13563, Executive Order 13771, the 
Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4). Executive Orders 12866 and 
13563 direct us to assess all costs and benefits of available 
regulatory alternatives and, when regulation is necessary, to select 
regulatory approaches that maximize net benefits (including potential 
economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity). Executive Order 13771 
requires that the costs associated with significant new regulations 
``shall, to the extent permitted by law, be offset by the elimination 
of existing costs associated with at least two prior regulations.'' We 
believe that this proposed rule is not a significant regulatory action 
as defined by Executive Order 12866.
    The Regulatory Flexibility Act requires us to analyze regulatory 
options that would minimize any significant impact of a rule on small 
entities. Because this rule does not impose new regulatory burden on 
small entities, other than administrative costs of reading and 
understanding the rule, we propose to certify that the proposed rule 
will not have a significant economic impact on a substantial number of 
small entities.
    The Unfunded Mandates Reform Act of 1995 (section 202(a)) requires 
us to prepare a written statement, which includes an assessment of 
anticipated costs and benefits, before proposing ``any rule that 
includes any Federal mandate that may result in the expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100,000,000 or more (adjusted annually for 
inflation) in any one year.'' The current threshold after adjustment 
for inflation is $150 million, using the most current (2017) Implicit 
Price Deflator for the Gross Domestic Product. This proposed rule would 
not result in an expenditure in any year that meets or exceeds this 
amount.

B. Summary of Costs and Benefits

    This proposed rule would codify FDA's interpretation of the 
statutory terms ``protein'' and ``chemically synthesized polypeptide,'' 
in a manner that is consistent with interpretations of these terms that 
FDA previously described in the April 30, 2015, guidance (see 
Biosimilars Q&A Guidance). Formalizing these interpretations would 
reduce regulatory uncertainty introduced by the BPCI Act. Specifically, 
the proposed rule would clarify the criteria for whether certain 
products are regulated as drugs or biological products. The ``bright-
line'' approach under the proposed rule would reduce the amount of time 
spent by FDA staff and industry in support of making such 
determinations.
    In this regulatory impact analysis, we identify the products most 
likely to require a case-by-case determination under the baseline 
scenario. Under the proposed rule, these determinations would be made 
by FDA according to the bright-line standard proposed. We calculate the 
cost savings from the amount of time saved by both FDA and industry by 
avoiding a case-by-case determination. We also calculate the 
incremental costs to industry that are the result of reading and 
understanding the rule.
    The primary estimate of the benefits in 2017 dollars annualized 
over 10 years is $340,766 using a 7 percent discount rate and $321,506 
using a 3 percent discount rate. We also calculate ranges of benefits 
of $313,373 to $355,690 and $296,220 to $335,282, respectively. The 
estimated annualized costs range from $14,471 to $18,089, with a 
primary estimate of $16,079 using a 7 percent discount rate over a 10-
year horizon. For a 3 percent discount rate, we estimate a range of 
$12,378 to $15,472, with a primary estimate of $13,753. These figures 
are shown in table 1 below.

                                    Table 1--Summary of Benefits, Costs, and Distributional Effects of Proposed Rule
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Units
                                               Primary        Low          High    ---------------------------------------
                  Category                     estimate     estimate     estimate       Year       Discount      Period                Notes
                                                                                      dollars        rate       covered
--------------------------------------------------------------------------------------------------------------------------------------------------------
Benefits:
    Annualized Monetized $/year............     $340,766     $313,373     $355,690         2017            7           10  Cost savings to FDA and
                                                $321,506     $296,220     $335,282         2017            3           10   industry to avoid case-by-
                                                                                                                            case review of applications.
    Annualized Quantified..................  ...........  ...........  ...........  ...........            7
                                             ...........  ...........  ...........  ...........            3
    Qualitative............................
Costs:
    Annualized Monetized $/year............      $16,079      $14,471      $18,089         2017            7           10  Costs of reading the rule.
                                                 $13,753      $12,378      $15,472         2017            3           10

[[Page 63823]]

 
    Annualized Quantified..................  ...........  ...........  ...........  ...........            7
                                             ...........  ...........  ...........  ...........            3
    Qualitative............................
Transfers:
    Federal Annualized Monetized $/year....  ...........  ...........  ...........  ...........            7
                                             ...........  ...........  ...........  ...........            3
                                            ------------------------------------------------------------------------------------------------------------
    From/To................................  From:
                                             To:
                                            ------------------------------------------------------------------------------------------------------------
    Other Annualized Monetized $/year......  ...........  ...........  ...........  ...........            7
                                             ...........  ...........  ...........  ...........            3
                                            ------------------------------------------------------------------------------------------------------------
    From/To................................  From:
                                             To:
                                            ------------------------------------------------------------------------------------------------------------
Effects:................................................................................................................................................
State, Local or Tribal Government:......................................................................................................................
Small Business:.........................................................................................................................................
Wages:..................................................................................................................................................
Growth:.................................................................................................................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------

    In line with Executive Order 13771, in table 2 we estimate present 
and annualized values of costs and cost savings over an infinite time 
horizon. Based on these cost savings, this proposed rule would be 
considered a deregulatory action under Executive Order 13771.

                                                             Table 2--EO 13771 Summary Table
                                                    [In 2016 dollars, over a perpetual time horizon]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                            Lower bound     Upper bound                     Lower bound     Upper bound
                                                           Primary (7%)        (7%)            (7%)        Primary (3%)        (3%)            (3%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Present Value of Costs..................................        $110,574         $99,517        $124,396        $114,868        $103,382        $129,227
Present Value of Cost Savings...........................      $2,891,315      $2,993,948      $2,702,931      $4,556,396      $4,671,456      $4,345,200
Present Value of Net Costs..............................     -$2,780,741     -$2,894,431     -$2,578,534     -$4,441,527     -$4,568,074     -$4,215,973
Annualized Costs........................................          $7,740          $6,966          $8,708          $3,446          $3,101          $3,877
Annualized Cost Savings.................................        $202,392        $209,576        $189,205        $136,692        $140,144        $130,356
Annualized Net Costs....................................       -$194,652       -$202,610       -$180,497       -$133,246       -$137,042       -$126,479
--------------------------------------------------------------------------------------------------------------------------------------------------------

C. Summary of Regulatory Flexibility Analysis

    To determine the impact of the proposed rule on small entities, we 
first determined how many firms would be affected. We estimate that at 
least 1,615 firms classified in the Pharmaceutical and Medicine 
Manufacturing industry employ fewer than 1,250 employees and are 
therefore also classified as small businesses. Although a large number 
of small businesses will face costs under the proposed rule, the costs 
to these firms would be limited to the time burden of reading the 
proposed rule. We estimate that the time burden of reading the rule 
would be about $77 per firm, with a lower bound of $69 and upper bound 
of $86. This range of costs is unlikely to have a significant adverse 
impact on a substantial number of small entities.
    We have developed a comprehensive Preliminary Economic Analysis of 
Impacts that assesses the impacts of the proposed rule. The full 
preliminary analysis of economic impacts is available in the docket for 
this proposed rule (Ref. 12) and at https://www.fda.gov/AboutFDA/ReportsManualsForms/Reports/EconomicAnalyses/default.htm.

VIII. Analysis of Environmental Impact

    We have determined under 21 CFR 25.30(h) that this proposed rule 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.

IX. Paperwork Reduction Act of 1995

    FDA tentatively concludes that this proposed rule contains no 
collection of information. Therefore, clearance by the Office of 
Management and Budget under the Paperwork Reduction Act of 1995 is not 
required.

X. Consultation and Coordination With Indian Tribal Governments

    We have analyzed this proposed rule in accordance with the 
principles set forth in Executive Order 13175. We have tentatively 
determined that the rule does not contain policies that would have a 
substantial direct effect on one or more Indian Tribes, on the 
relationship between the Federal Government and Indian Tribes, or on 
the distribution of power and responsibilities between the Federal 
Government and Indian Tribes. The Agency solicits comments from tribal 
officials on any potential impact on Indian Tribes from this proposed 
action.

XI. Federalism

    We have analyzed this proposed rule in accordance with the 
principles set forth in Executive Order 13132. We have determined that 
this proposed 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, 
we conclude that the rule does not contain policies that have 
federalism implications as defined in the Executive

[[Page 63824]]

order and, consequently, a federalism summary impact statement is not 
required.

XII. References

    The following reference marked with an asterisk (*) is on display 
in the Dockets Management Staff (see ADDRESSES) and is available for 
viewing by interested persons between 9 a.m. and 4 p.m., Monday through 
Friday; it is also available electronically at https://www.regulations.gov. References without asterisks are not available for 
electronic viewing because they have copyright restriction, or they are 
available as published articles and books, but these references are 
available for viewing by interested persons at the Dockets Management 
Staff (see ADDRESSES) between 9 a.m. and 4 p.m., Monday through Friday.
    FDA has verified the website address, as of the date this document 
publishes in the Federal Register, but websites are subject to change 
over time.

1. Larra[ntilde]aga, M.D., R.J. Lewis Sr., and R.A. Lewis, Hawley's 
Condensed Chemical Dictionary, 16th ed., New Jersey: Wiley (2016), 
s.vv. ``peptide,'' ``polypeptide,'' ``protein.''
2. Daintith, J. and E. Martin, Dictionary of Science, 6th ed., 
Oxford: Oxford University Press (2010), s.vv. ``peptide,'' 
``polypeptide,'' ``protein.''
3. J. Stenesh, Dictionary of Biochemistry and Molecular Biology, 2nd 
ed., New Jersey: Wiley (1989), s.vv. ``polypeptide,'' ``protein.''
4. The American Heritage Science Dictionary, New York: Houghton 
Mifflin (2005), s.vv. ``peptide,'' ``protein.''
5. Creighton, T.E., Encyclopedia of Molecular Biology, New Jersey: 
Wiley (1999), s.vv. ``peptide,'' ``polypeptide.''
6. Newman, W.A., Dorland's Illustrated Medical Dictionary, 28th ed., 
Pennsylvania: W.B. Saunders Co. (1994), s.vv. ``peptide,'' 
``polypeptide.''
7. Berg, J., J. Tymoczko, and L. Stryer, Biochemistry, 5th ed., New 
York: W.H. Freeman (2002), pp. 52-53.
8. Voet, D. and J. Voet, Biochemistry, 3rd ed., New Jersey: Wiley 
(2004), p. 68.
9. Pollard, T., W. Earnshaw, et al., Cell Biology, New York: 
Elsevier (2002), p. 21.
10. Lodish, H., A. Berk, C.A. Kaiser, et al., Molecular Cell 
Biology, 6th ed., London, U.K., W.H. Freeman (2007), p. 66.
11. Alberts, B., A. Johnson, J. Lewis, et al., Molecular Biology of 
the Cell, 4th ed., New York: Garland Science (2002), pp. 129, 135.
* 12. Preliminary Regulatory Impact Analysis, Initial Regulatory 
Flexibility Analysis, and Unfunded Mandates Reform Act Analysis for 
Definition of the Term ``Biological Product''; Proposed Rule, 2018, 
available at https://www.fda.gov/AboutFDA/ReportsManualsForms/Reports/EconomicAnalyses/default.htm.

List of Subjects in 21 CFR Part 600

    Biologics, Reporting and recordkeeping requirements.

    Therefore, under the Public Health Service Act and under authority 
delegated to the Commissioner of Food and Drugs, we propose that 21 CFR 
part 600 be amended as follows:

PART 600--BIOLOGICAL PRODUCTS: GENERAL

0
1. The authority citation for part 600 continues to read as follows:

    Authority: 21 U.S.C. 321, 351, 352, 353, 355, 356c, 356e, 360, 
360i, 371, 374, 379k-1; 42 U.S.C. 216, 262, 263, 263a, 264, 300aa-
25.

0
2. Amend Sec.  600.3 by revising paragraph (h) introductory text and by 
adding paragraphs (h)(6) and (7) to read as follows:

Sec.  600.3  Definitions.

* * * * *
    (h) Biological product means a virus, therapeutic serum, toxin, 
antitoxin, vaccine, blood, blood component or derivative, allergenic 
product, protein (except any chemically synthesized polypeptide), or 
analogous product, or arsphenamine or derivative of arsphenamine (or 
any other trivalent organic arsenic compound), applicable to the 
prevention, treatment, or cure of a disease or condition of human 
beings:
* * * * *
    (6) A protein is any alpha amino acid polymer with a specific, 
defined sequence that is greater than 40 amino acids in size. When two 
or more amino acid chains in an amino acid polymer are associated with 
each other in a manner that occurs in nature, the size of the amino 
acid polymer for purposes of this paragraph (h)(6) will be based on the 
total number of amino acids in those chains, and will not be limited to 
the number of amino acids in a contiguous sequence.
    (7) A chemically synthesized polypeptide is any alpha amino acid 
polymer that is made entirely by chemical synthesis and is greater than 
40 amino acids but less than 100 amino acids in size. When two or more 
amino acid chains in an amino acid polymer are associated with each 
other in a manner that occurs in nature, the size of the amino acid 
polymer for purposes of this paragraph (h)(7) will be based on the 
total number of amino acids in those chains, and will not be limited to 
the number of amino acids in a contiguous sequence.
* * * * *

    Dated: December 6, 2018.
Scott Gottlieb,
Commissioner of Food and Drugs.
[FR Doc. 2018-26840 Filed 12-11-18; 8:45 am]
 BILLING CODE 4164-01-P