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1

Under section 201(k) of the act, the term ‘‘label’’

means a display of written, printed, or graphic

matter upon the immediate container of any article.

office when the Associate Commissioner

for OHA determines that appearances at

hearings conducted in the areas can be

conducted more efficiently by VTC than

in person. However, while the Associate

Commissioner makes the decision about

the general efficiency of using VTC in

an area, the ALJ is responsible for

determining if using VTC for any

appearance in a particular case will be

efficient.

Comment: The same organization also

commented that our rules should

require the hearing notice to include a

statement that a ME and/or a VE will

appear by VTC and provide an

opportunity to object.

Response: Sections 404.938(b) and

416.1438(b) of the final rules with

request for comment specify that the

claimant ‘‘will also be told if [his/her]

appearance or that of any other party or

witness is scheduled to be made by

[VTC] rather than in person.’’ We reflect

these requirements in HALLEX

guidance that modifies our standardized

notices of hearing to notify claimants

that a witness will appear by VTC and

to advise them explicitly of their right

to object to any aspect of the hearing

(see Footnote 7 above).

Regulatory Procedures

Executive Order 12866, As Amended by

Executive Order 13258

We have consulted with the Office of

Management and Budget (OMB) and

determined that this final rules

document meets the criteria for a

significant regulatory action under

Executive Order 12866, as amended by

Executive Order 13258. Thus, it was

reviewed by OMB.

Regulatory Flexibility Act

We certify that these rules will not

have a significant economic impact on

a substantial number of small entities as

they affect individuals only. Therefore,

a regulatory flexibility analysis as

provided in the Regulatory Flexibility

Act, as amended, is not required.

Paperwork Reduction Act

The Paperwork Reduction Act (PRA)

of 1995 says that no persons are

required to respond to a collection of

information unless it displays a valid

OMB control number. In accordance

with the PRA, SSA is providing notice

that the Office of Management and

Budget has approved the information

collection requirements contained in

§§ 404.929, 404.936(d), (e) & (f),

404.938(c) (HA–504), 404.950(a),

416.1429, 416.1436(d), (e) and (f),

416.1438(c) (HA–504), and 416.1450(a)

of these final rules. The OMB control

number for this collection is 0960–0671,

expiring November 30, 2004.

(Catalog of Federal Domestic Assistance

Program Nos. 96.001, Social Security-

Disability Insurance; 96.002, Social Security-

Retirement Insurance; 96.003, Social

Security-Special Benefits for Persons Aged 72

and Over; 96.004, Social Security-Survivors

Insurance; 96.006, Supplemental Security

Income.)

List of Subjects

20 CFR Part 404

Administrative practice and

procedure, Aged, Blind, Disability

benefits, Old-age, Survivors and

Disability Insurance, Reporting and

recordkeeping requirements, Social

Security.

20 CFR Part 416

Administrative practice and

procedure, Aged, Blind, Disability

benefits, Public assistance programs,

Reporting and recordkeeping

requirements, Supplemental Security

Income (SSI).

Dated: October 3, 2003.

Jo Anne B. Barnhart,

Commissioner of Social Security.

■

Accordingly, the final rules with

request for comment amending 20 CFR

parts 404 and 416 that were published at

68 FR 5210 on February 3, 2003, are

adopted as final rules without change.

[FR Doc. 03–30691 Filed 12–10–03; 8:45 am]

BILLING CODE 4191–02–P

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Food and Drug Administration

21 CFR Parts 314 and 601

[Docket No. 2000N–1652]

RIN 0910–AB91

Requirements for Submission of

Labeling for Human Prescription Drugs

and Biologics in Electronic Format

AGENCY

:

Food and Drug Administration,

HHS.

ACTION

:

Final rule.

SUMMARY

:

The Food and Drug

Administration (FDA) is amending its

regulations governing the format in

which certain labeling is required to be

submitted for review with new drug

applications (NDAs), certain biological

license applications (BLAs), abbreviated

new drug applications (ANDAs),

supplements, and annual reports. The

final rule requires that certain labeling

content be submitted electronically in a

form that FDA can process, review, and

archive. Submitting the content of

labeling in electronic format will

simplify the drug labeling review

process and speed up the approval of

labeling changes.

DATES

:

The rule is effective June 8, 2004.

FOR FURTHER INFORMATION CONTACT

:

Randy Levin, Center for Drug

Evaluation and Research (CDER)

(HFD–001), Food and Drug

Administration, 5600 Fishers Lane,

Rockville, MD 20857, 301–827–

7756, or

Robert A. Yetter, Center for Biologics

Evaluation and Research (HFM–10),

Food and Drug Administration,

1401 Rockville Pike, Rockville, MD

20852, 301–827–0373.

SUPPLEMENTARY INFORMATION

:

I. Background

In the Federal Register of May 3, 2002

(67 FR 22367), FDA published a

proposed rule to require the submission

of the content of labeling for human

prescription drugs and certain biologics

in electronic format in a form that FDA

can process, review, and archive. This

electronic submission requirement

would necessitate the amendment of

FDA’s regulations under §§ 314.50(l) (21

CFR 314.50(l)), 314.81(b)(2)(iii) (21 CFR

314.81(b)(2)(iii)), 314.94(d)(1) (21 CFR

314.94(d)(1)), and the addition of

§ 601.14 (21 CFR 601.14).

Under current regulations, as noted in

the preamble to the proposed rule,

labeling for the archival copy of an NDA

must be submitted to the agency on

paper, labeling for the archival copy of

an ANDA may be submitted in any form

that FDA and the applicant agree upon,

and the current regulations for BLA

labeling do not specify a format for

submission to the agency. The term

‘‘labeling’’ used in §§ 314.50, 314.94,

314.81, and § 601.12 is defined in

section 201(m) of the Federal Food,

Drug, and Cosmetic Act (the act) (21

U.S.C. 321(m)) to mean both labels

1

and

other written, printed, or graphic matter

upon any article or any of its containers

or wrappers, or accompanying such

article. Thus, requiring the submission

of ‘‘labeling’’ entails submission of the

label (i.e., the label on the immediate

container) and labeling. Labeling

consists of the comprehensive

prescription drug labeling directed to

health care practitioners (i.e., the

labeling required under § 201.100(d)(3)

(21 CFR 201.100(d)(3)), commonly

referred to as the ‘‘package insert’’ or

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Section 201.100(d) requires that any labeling

distributed by or on behalf of the manufacturer,

packer, or distributor of the drug, that furnishes or

purports to furnish information for use of the drug,

or which prescribes, recommends, or suggests a

dosage for the use of the drug, must meet the

content and format requirements in 21 CFR 201.56

and 201.57.

3

We also conduct a word-for-word comparison of

the labeling for the proposed generic drug product

and the reference listed drug to verify that any

differences in labeling have been correctly

annotated and explained by the ANDA applicant

under § 314.94(a)(8)(iv).

4

The submission of labeling for the archival copy

of an NDA is required under § 314.50(e)(2)(ii).

Section 314.71(b) (21 CFR 314.71(b)) requires that

supplements to approved applications submitted to

the agency under § 314.70 (21 CFR 314.70) follow

the procedures described in § 314.50. Section

314.81(b)(2)(iii) (21 CFR 314.81(b)(2)(iii)) requires

that annual reports include ‘‘currently used

professional labeling, patient brochures, or package

inserts.’’ With respect to the archival copy of an

ANDA, § 314.94(a)(8)(ii) requires copies of the label

and all labeling for the drug product. Under

§ 314.97 (21 CFR 314.97), supplements and other

changes to approved ANDAs must be submitted to

the agency under the requirements of §§ 314.70 and

314.71. Under § 314.98(c) (21 CFR 314.98(c)),

annual reports for ANDAs must be submitted as

required in § 314.81(b)(2)(iii).

5

Section 601.2 (21 CFR 601.2) describes the

requirements for submission of a BLA, which

include the requirement that specimens of

enclosures and Medication Guides for a product, if

any, be submitted. Section 601.12 (21 CFR 601.12)

describes the requirements to make changes to an

approved BLA, including labeling changes.

‘‘professional labeling’’)

2

and other

labeling. This final rule applies to the

electronic submission of the content of

labeling, defined as the contents of the

package insert or professional labeling,

including all text, tables, and figures.

Each year FDA conducts a word-for-

word comparison of the labeling as part

of the review process for more than

1,000 proposed labeling changes for

approved NDAs and BLAs, and more

than 2,600 proposed original and

supplemental labeling changes for

ANDAs.

3

Because reviewers currently

conduct these comparisons manually

using two paper copies of the labeling,

the process is slow and subject to error.

Requiring the electronic submission of

labeling for NDAs, certain BLAs,

ANDAs, supplements, and annual

reports will greatly enhance the

accuracy and speed of labeling review.

This will result in increased protection

of the public health because electronic

review and comparison of labeling files

will provide a higher degree of certainty

that all sections of prescription drug

labeling are correct.

Although FDA has not previously

required regulatory submissions in

electronic format, we have issued

several guidances describing how to

make voluntary electronic submissions

to the agency. In the Federal Register of

January 28, 1999 (64 FR 4433), we

(FDA) issued a guidance on general

considerations for electronic

submissions entitled ‘‘Providing

Regulatory Submissions in Electronic

Format—General Considerations’’

(general considerations guidance). In the

general considerations guidance, we

included a description of the types of

electronic file formats that we are able

to accept for processing, reviewing, and

archiving electronic documents. In the

Federal Register of January 28, 1999 (64

FR 4432), we announced the availability

of a guidance entitled ‘‘Providing

Regulatory Submissions in Electronic

Format—NDAs,’’ which provided

information on how to submit a

complete archival copy of an NDA in

electronic format. In November 1999,

we published a guidance to assist

applicants in submitting documents in

electronic format for review and archive

purposes as part of a BLA, product

license application (PLA), or

establishment license application (ELA)

(64 FR 61647, November 12, 1999). Most

recently, we published a guidance for

ANDAs entitled ‘‘Providing Regulatory

Submission in Electronic Format—

ANDAs’’ (67 FR 43331, June 27, 2002).

In addition, part 11 (21 CFR part 11),

concerning electronic records and

electronic signatures, describes certain

controls for electronic regulatory

submissions and states that we are

prepared to accept those regulatory

submissions that have been identified in

the public docket (62 FR 13430, March

20, 1997).

FDA received 13 comments (which

raised 21 issues) on the proposed rule

and addresses each of those comments

in section III of this document. The

majority of the comments supported the

proposed amendments to FDA’s

regulations. After careful consideration

of the comments, the agency is adopting

this final rule without any changes from

the proposed rule. The final rule is

described in section II of this document.

II. Description of the Final Rule

We are revising our regulations to

require the electronic submission of the

content of labeling (i.e., the content of

the package insert or professional

labeling, including all text, tables, and

figures) for NDAs, certain BLAs,

ANDAs, supplements, and annual

reports. This requirement is in addition

to existing requirements, found

elsewhere in our regulations, that copies

of the label and labeling and specimens

of enclosures be submitted.

Under the amended regulations that

we are adopting in this final rule,

§§ 314.50(l), 314.81(b)(2)(iii), and

314.94(d)(1) are revised to require

applicants to submit the content of

labeling in NDAs, ANDAs, supplements,

and annual reports electronically in a

form that we can process, review, and

archive.

4

Under new § 314.94(d)(1),

ANDA applicants are required to submit

in electronic format the content of

labeling for the proposed drug product

(i.e., the content of the generic drug

product labeling). As previously stated

in the preamble to the proposed rule,

ANDA applicants are not required to

submit in electronic format the content

of labeling for the reference listed drug

product. Section 601.14 is added to

require applicants for biological

products subject to the requirements of

§ 201.100(d)(3) to submit the content of

labeling in BLAs, supplements, and

annual reports electronically in a form

that we can process, review, and

archive.

5

At this time, portable document

format (PDF) is the only type of

electronic file format that we have the

ability to accept for processing,

reviewing, and archiving. PDF is

commonly used, easily obtainable, and

affordable. Software to convert

electronic files to PDF is commercially

available at a cost of approximately

$100 to $300. The technology necessary

to create PDF documents is also

publicly available. Because PDF is the

only acceptable file type, references to

specific media (microfiche, microform,

optical disc, and magnetic tape) under

§§ 314.50(l)(1) and 314.94.(d)(1) will be

deleted.

To be responsive to technological

advances, we may recommend in the

future that new file formats and

software applications be used to submit

labeling electronically. As mentioned in

the preamble to the proposed rule, we

will provide advance notice, in

accordance with FDA’s good guidance

practice regulations under § 10.115 (21

CFR 10.115), so that affected parties will

have adequate time to convert to any

new format or software. In addition, we

expect that such format or software will

be widely available before we switch to

a new technology. Changes in format

and/or software will be identified in

public docket number 92S–0251. During

any such transition, we will accept

submissions using either file format or

software.

Finally, these new regulations also

make minor changes to reformat and

modernize certain regulatory provisions.

This final rule is amending § 314.50(l)

by adding headings to paragraphs (l)(1)

through (l)(4) and by removing the word

‘‘shall’’ and adding in its place the word

‘‘must.’’

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The comment refers to patient package inserts

as ‘‘PIs.’’ FDA, though, refers to such inserts as

‘‘PPIs.’’.

III. Comments on the Proposed Rule

FDA received 13 sets of written

comments on the proposed rule from

manufacturers, trade associations,

advocacy groups, consulting firms, and

individuals. The majority of the

comments supported FDA’s proposal to

require that the content of certain

labeling be submitted electronically in a

form that FDA can process, review, and

archive. A few comments requested

clarification on various aspects of the

rule and one comment opposed the

exemptions from specific controls under

part 11. A summary of the comments

received and the agency’s responses

follows:

A. General Comments

(Comment 1) One comment identified

as a typographical error the citation of

§ 314.50(l). The comment suggested that

§ 314.50(l)(1)(i) was being referenced as

(1)(1)(i).

(Response) This is not a typographical

error; we are citing to § 314.50(l)(1)(i) in

the proposed rule, but the lower case

letter L (‘‘l’’) looks similar to the number

1.

(Comment 2) One comment

recommended adding changes to

§ 314.70 and § 601.12 to address

labeling supplements.

(Response) FDA believes that § 314.70

and § 601.12 do not need any changes

because the recommended requirements

already exist.

Under § 314.71, all procedures that

apply to an application under § 314.50

also apply to supplement submissions.

Thus, by amending the provisions in

§ 314.50, the final rule also covers the

requirements for labeling supplements.

Similarly, § 601.14 requires applicants

for biological products subject to the

requirements of § 201.100(d)(3) to

submit the content of labeling in BLAs,

supplements, and annual reports

electronically in a form that FDA can

process, review, and archive.

(Comment 3) One comment stated

that it supported the adoption of

regulations to require bar coding for all

pharmaceuticals.

(Response) The agency is pursuing bar

coding initiatives separately from this

rulemaking. A proposed rule to require

bar codes on certain human drug

product labels and biological product

labels was published in the Federal

Register of March 14, 2003 (68 FR

12500). This final rule deals solely with

the content of labeling for human

prescription drugs and biologics

submitted to FDA in electronic format

that FDA can process, review, and

archive.

(Comment 4) Although supportive of

the proposed rule, one comment was

concerned about industry initiatives to

use this rule to advocate for electronic

versions as a substitute for printed

patient inserts (PPIs).

6

The comment

expressed concern that this rule could

serve as a basis for the elimination of

printed PPIs.

(Response) FDA understands the

comment’s concern, but the agency’s

regulation of PPIs is unrelated to the

requirement to submit the content of

labeling electronically. This rule

requires that the content of labeling (i.e.,

the content of the package insert or

professional labeling, including all text,

tables, and figures) be submitted

electronically. It does not alter the

current regulatory treatment of PPIs.

The PPIs can be submitted in paper or

electronic format under part 11. If the

PPI is submitted electronically, it must

appear in the electronic format as it

would in printed form.

(Comment 5) One comment

mentioned that this rule will enable the

agency to move forward with other

initiatives to make labeling more rapidly

available. The comment asks the agency

to consider providing certain

recommendations on a standard

database for labeling and standard

display formats for viewing labels.

(Response) FDA welcomes the

comment, and we are working on

several initiatives to make labeling more

readily available to the public. This rule

is a necessary step to provide FDA with

the information needed to improve the

readability, organization, and access to

labeling information, including the

possibility of using the information in a

standard database.

B. Applicability/Scope of the Proposed

Rule

(Comment 6) One comment requested

that FDA clarify whether the Circular of

Information for the Use of Human Blood

Components (the Circular) is exempt

from this rule. The comment stated that

the Circular is prepared on a biannual

basis by a committee representing all

blood organizations and a single

submission is made to FDA. The same

version of the Circular is used by the

majority of licensed blood

establishments.

(Response) It is true that FDA reviews

a version of the Circular that a

consortium of blood establishments

submits periodically. Although

individual blood establishments may

use different versions of the Circular

and must submit those versions in

supplemental applications to FDA, the

amount of variation from the FDA-

recognized Circular is so minimal that

electronic submission is not necessary

at this time. Therefore, the final rule

does not require the submission of the

Circular to the agency in electronic

format.

(Comment 7) Several comments asked

for clarification of the following

statement in the proposed rule: ‘‘This

proposed requirement would be in

addition to existing requirements,

described in section I.A of this

document, that copies of the label and

labeling and specimens of enclosures be

submitted.’’ The comments requested

that the agency explicitly state that no

paper copies of labeling are to be

submitted.

(Response) The content of labeling is

a new labeling type not previously

required in the regulations to be

submitted. The content of labeling,

defined as the contents of the package

insert or professional labeling, including

all text, tables, and figures for

prescription products approved under

an ANDA, BLA, or NDA, does not

replace any previously required labeling

type, including the package insert. In

other words, the regulations require the

package insert to be submitted in

addition to the content of labeling.

However, no paper copies of any

labeling are required. As discussed in

our response to comment 4, the

applicant has the option of providing

the package insert in paper or electronic

format under part 11. The package

insert, if submitted electronically, must

appear as it would in printed form.

Submission in this form allows us to

evaluate the format of the package

insert, such as font size and positioning

of the text.

(Comment 8) A few comments asked

for clarification of whether the rule

requires the submission in electronic

format of all types of labeling, such as

carton and container labels, labels

submitted with advertising material,

and labeling that might be submitted

with periodic adverse drug experience

reports.

(Response) The agency did not intend

that the final rule require the electronic

submission of the previously mentioned

types of labeling. The rule requires only

that the content of labeling (i.e. the

content of the package insert or

professional labeling, including all text,

tables, and figures) be submitted in

electronic format.

(Comment 9) Some comments

requested clarification of whether the

rule restricts the submission of labeling

in electronic format to the content of

labeling.

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A recent draft guidance issued by the agency

provides for the exercise of enforcement discretion

with respect to the following part 11 requirements:

Validation (§ 11.10(a) (21 CFR 11.10(a))); copies of

records § 11.10(b)); record retention (§ 11.10(c));

audit trails (§ 11.10(e) and (k)(2)); and any

corresponding requirements in § 11.30. See FDA

guidance for industry entitled ‘‘Part 11, Electronic

Records; Electronic Signatures—Scope and

Application,’’ available at www.fda.gov/cder/

guidance.

8

See ‘‘Providing Regulatory Submission in

Electronic Format—ANDAs’’ guidance (67 FR

43331, June 27, 2002).

9

Id.

(Response) The agency did not intend

to restrict the voluntary submission of

labeling in electronic format. Under part

11, an applicant may submit labeling in

electronic format as long as the controls

in part 11 are met and the labeling is

listed in public docket number 92S–

0251.

7

Because the agency has listed

labeling in conjunction with NDAs,

BLAs, and ANDAs in public docket

number 92S–0251, applicants may

submit all labeling for an NDA, BLA, or

ANDA in electronic format.

(Comment 10) Two comments

suggested that the electronic submission

of labeling submitted with annual

reports under § 314.81 should be

optional if the product’s labeling has not

been revised beyond editorial changes.

The comments noted that the labeling

revisions to older products are

infrequent and often insubstantial in

nature; therefore, the submission of

annual report labeling is not justified by

the objectives of this rule.

(Response) FDA disagrees that the

electronic submission of labeling in the

annual report is not justified by the

objectives of the final rule. The labeling

submitted with the annual report, aside

from editorial corrections, can also

include other changes related to the

manufacturing of the product. As with

other labeling changes, these changes

must be reviewed and require the same

degree of comparison with previous

versions of labeling. In addition, the

labeling changes described in the

annual report must be included in

FDA’s database. Finally, it is important

to note that in our economic analysis,

we found that the one-time costs to

convert the labeling in annual reports to

electronic format would not be overly

burdensome (see section VIII of this

document). Accordingly, the electronic

submission of labeling submitted with

annual reports under § 314.81 is not

optional.

C. Reviewer Support and Training

(Comment 11) Some comments

expressed concern that reviewers will

accept ‘‘special requests’’ to receive the

labeling in paper format or other formats

to bypass existing agency guidance on

electronic submissions. These same

comments emphasized the importance

of training and support of reviewers and

staff in the use of electronic review and

version comparison utilities.

(Response) FDA agrees that reviewers

should not ‘‘bypass’’ our guidance

documents. We train reviewers and

managers on the details and provisions

of guidance documents. When there are

differences in opinion concerning the

meaning of such provisions, it is best for

the applicant and agency personnel to

discuss those differences to ensure that

everyone understands the relevant

issues and the parties’ respective

positions. In addition, we will update

our specific policy and procedure

documents for reviewers to help enforce

the common practice of reviewing

documents electronically. The reviewers

and staff will have sufficient training

and support to fulfill their duties in

reviewing the electronic version of the

content of labeling.

(Comment 12) One comment pointed

out that the Office of Generic Drugs

(OGD) has limited experience with

electronic labeling because it has only

recently published guidance on

providing an ANDA in electronic

format.

8

The comment recommended

that OGD pilot a program with industry

to accept and process electronic labeling

before the effective date of this rule.

(Response) FDA does not believe a

pilot program is necessary to prepare

OGD reviewers for the implementation

of this rule. OGD reviewers used the

electronic label review technology for

many years before the issuance of the

guidance on electronic submissions of

ANDAs

9

and; therefore, have adequate

experience in this area.

D. Requiring Electronic Submission

(Comment 13) The comments were

overwhelmingly supportive of requiring

the electronic submission of the content

of labeling. The comments commend

FDA’s goal of using electronic labeling

to facilitate labeling reviews. However,

a few comments suggested that the

agency use appropriate metrics for

tracking the gains associated with the

electronic submission of labeling.

(Response) The agency agrees with

the comment, and notes that, as

explained in section II.A of the

proposed rule, there will be numerous

benefits from the regulation, particularly

through enhancing the accuracy and

speed of the labeling review process.

Nevertheless, it may be difficult to

quantify precisely the improvements

derived solely from receiving labeling in

electronic format because we also plan

to improve our current business practice

for processing and reviewing such

labeling changes. To the extent possible,

we plan to evaluate the success of all

these changes and hope to make the

results of our evaluations available to

the public.

(Comment 14) A few comments

suggested that the implementation of

the rule would improve the availability

of labeling to the public.

(Response) We believe that a number

of changes are needed to improve the

public’s access to medication

information. This rule is an important

and necessary step toward that goal,

because it will greatly enhance the

accuracy and speed of labeling reviews.

We are actively working with the

pharmaceutical industry, other

government agencies, and health care

information suppliers to achieve success

in this area. For example, we are

currently working with several agencies,

including the National Library of

Medicine, on an initiative to promote

patient safety through accessible

medication information (DailyMed

Initiative). The electronic submission of

the content of labeling will allow the

agency to provide the DailyMed system

with labeling in a comprehensive,

reliable, and structured format. The

DailyMed can then use this information

to make information on medications

available to the public. Consumers,

health professionals, and others may use

this information in several ways,

including to identify drug interactions,

contraindications, and possible adverse

reactions.

(Comment 15) Some comments

suggested that the use of electronic

labeling may lead to improvement in the

communication between the agency and

industry when the review division

requests modifications for proposed

labeling changes. Specifically, the

comments referred to word processing

software available for tracking changes

and editing documents. In addition, the

comments suggested that the use of a

secure electronic mail exchange system

between applicants and the agency

during labeling negotiations could be

beneficial.

(Response) We appreciate the

suggestion and our guidance document

entitled ‘‘Providing Regulatory

Submissions in Electronic Format—

NDAs,’’ currently describes submission

of the content of labeling in a word

processing format in addition to PDF to

support editing changes. As mentioned

in the proposed rule, PDF is the only

type of electronic file format that we

have the ability to process, review, and

archive because it is currently the most

cost effective and best meets our needs

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for word-for-word comparisons of files.

As for any direct communication

between applicants and FDA requiring

the editing of specific content of

labeling, the guidance notes the utility

of also submitting labeling in word

processing format to facilitate this

editing process. In addition, we are

looking into new technologies to

improve the methods for exchanging

and reviewing labeling changes.

E. Providing Labeling to FDA in

Electronic Format

(Comment 16) Two comments

requested clarification on how to

provide labeling with annual reports.

They state that some of the confusion

with the annual report labeling is

because of the lack of a published

guidance document on the submission

of annual reports in electronic format.

The comments also asked if the hard

copy information submitted with annual

reports containing electronic labeling

(distribution, chemistry, manufacturing

and controls, preclinical/clinical)

should be submitted to the respective

reviewing divisions, the central

document room, or both.

(Response) As explained previously,

the agency has issued guidance for the

electronic submission of NDAs, ANDAs,

and BLAs. Although there is no

published guidance specifically on

providing labeling with annual reports,

submission of that labeling is covered

by these other agency guidance

documents on electronic submissions.

Therefore, the content of labeling

submitted with annual reports would be

prepared and submitted electronically

as described in the following FDA

guidance documents: (1) ‘‘Providing

Regulatory Submissions in Electronic

Format—General Considerations,’’ (2)

‘‘Providing Regulatory Submissions in

Electronic Format—NDAs,’’ and (3)

‘‘Providing Regulatory Submission in

Electronic Format—ANDAs’’ (see

section I for a description of these

guidance documents).

It should be noted that this final rule

only applies to the electronic

submission of the content of labeling. It

does not address the electronic

submission of annual reports generally

or any other part of an application. To

the extent that the commentors asked

for more detailed information about

annual report submissions, applicants

should continue following the

regulations and guidance documents

pertaining to those submissions.

(Comment 17) One comment

requested harmonization of all elements

of annual reports for NDAs, ANDAs,

and BLAs.

(Response) As noted previously, the

content of the annual report, other than

labeling, is not affected by this

regulation. However, the labeling

submitted with an annual report will be

prepared and submitted electronically

in the same fashion as described for

other electronic labeling submissions in

an application (i.e., original labeling

submissions in an NDA, ANDA, or

BLA).

(Comment 18) One comment

requested that Form FDA 2567 not be

required with each labeling component

submitted to a BLA because CDER does

not require that such a form accompany

labeling.

(Response) The agency agrees that

Form FDA 2567 is not required when

submitting BLA labeling electronically

using form 356h (Application to Market

a New Drug, Biologic, or an Antibiotic

Drug for Human Use). The form should

only be used for human blood and blood

components (The human blood and

blood components circular is not

covered by this rule. See comment 6 in

section III of this document.)

(Comment 19) Generally, the

comments supported our flexible

approach regarding the acceptable

content of labeling file format. The

comments recognized that a flexible

approach would enable the industry and

FDA to take advantage of future

improvements in computer technology

and software design. They also agreed

with the proposal to describe the

method for submitting the content of

labeling in guidance, but requested that

FDA guidance accompany the final rule.

Some comments, however, made

suggestions for the use of specific

technologies. In addition, we were

requested to limit changes to the file

format or software specifications.

(Response) Currently, guidance on the

submission of labeling is included in

the guidance for industry series

‘‘Providing Regulatory Submissions in

Electronic Format’’ (see section I of this

document). We understand that changes

to the file format or software can lead to

costly changes in the information

technology systems used by industry.

For this reason, we plan to limit future

changes to those that can lead to

increased benefits for both the agency

and industry. As mentioned in section

II of this final rule, the agency will not

switch to new format or software until

it is widely available.

(Comment 20) One comment asked

that we identify the software used for

working on an applicant’s labeling (e.g.,

to compare texts) and whether the

software is commercially available or

proprietary.

(Response) Currently, the reviewers

use Adobe Acrobat and Microsoft Word

for reviewing labeling. Both are

commercially available. As new

technology is developed and we change

the software used in reviews, we will

make this information available to the

public.

F. Part 11 Requirements for Electronic

Submissions

(Comment 21) We received a number

of comments related to the proposed

exemption of the submission of

electronic labeling from specific

controls under §§ 11.10 and 11.30. Most

of the comments were positive and

supported the rationale for the

exemptions. One comment, however,

raised concerns about the effect of the

proposed exemptions from part 11

requirements on the integrity of part 11

generally.

(Response) We have recently

articulated our current thinking on part

11 in the draft guidance document

entitled ‘‘Part 11, Electronic Records;

Electronic Signatures—Scope and

Application’’ (part 11 draft guidance)

issued in the Federal Register of

February 25, 2003 (68 FR 8775). Among

other things, this part 11 draft guidance

announces the agency’s intent to

exercise enforcement discretion in the

manner specified in the draft guidance

with respect to the specific part 11

requirements of validation (§ 11.10 (a)),

copies of records (§ 11.10(b)), record

retention, audit trails (§ 11.10(e) and

(k)(2)), and any corresponding

requirements in § 11.30. This final rule

exempts the electronic submission of

labeling content from the requirements

of § 11.10(a), (c) through (h), and (k),

and the corresponding requirements of

§ 11.30.

We recognize that there are some

differences with respect to the

exemptions from part 11 requirements

provided in this final rule (i.e.,

§ 11.10(a), (c) through (h), and (k), and

the corresponding requirements of

§ 11.30), and the part 11 requirements

set forth in the part 11 draft guidance for

which the agency intends to exercise

enforcement discretion (i.e., § 11.10(a)

through (c), (e), and (k)(2), and any other

corresponding requirements in 11.30)).

Although the final rule does not provide

an exemption from § 11.10(b), the part

11 draft guidance announces that we

intend to exercise enforcement

discretion with respect to that section in

the manner described in the draft

guidance.

The exemptions in the final rule and

the part 11 requirements for which we

intend to exercise enforcement

discretion, as described in the part 11

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draft guidance, differ because the final

rule is specific to the electronic

submission of labeling content for

human prescription drugs and certain

biologics, and the part 11 draft guidance

applies to the maintenance of all

electronic records and to all electronic

submissions subject to part 11.

We exempted the submission of

electronic labeling content from certain

part 11 requirements because we believe

these part 11 requirements are not

critical to ensure the quality of the

content of labeling submitted under this

rule and we want to ensure that

industry resources are not being spent

on unnecessary controls. For example,

validation for the system used to

generate the labeling record is not

necessary because the applicant’s

verification that the information in the

labeling record is accurate serves the

same objective. Our review of the

content of labeling is based on the

version of the labeling record submitted

to us. Earlier versions of the record, as

well as changes made to the earlier

versions, are not relevant to our

analysis. Thus, other controls related to

the creation, modification, and

maintenance of the labeling records are

also not needed.

IV. Legal Authority

Our legal authority to amend our

regulations governing the format of

labeling for human prescription drugs

and biologics derives from sections 201,

301, 501, 502, 503, 505, 506, 506A,

506B, 506C, 510, 513–516, 518–520,

701, 704, 721, and 801 of the act (21

U.S.C. 321, 331, 351, 352, 353, 355, 356,

356a, 356b, 356c, 360, 360c–360f, 360h–

360j, 371, 374, 379e, and 381); 15 U.S.C.

1451–1561; the Public Health Service

Act (42 U.S.C. 216, 241, 262, 263, 264);

and section 122, Public Law 105–115,

111 Stat. 2322 (21 U.S.C. 355 note).

V. Paperwork Reduction Act of 1995

This final rule contains information

collection provisions that are subject to

review by the Office of Management and

Budget (OMB) under the Paperwork

Reduction Act of 1995 (44 U.S.C. 3501–

3520). A description of these provisions

is given below with an estimate of the

annual reporting burden. Included in

this estimate is the time for reviewing

instructions, searching existing data

sources, gathering and maintaining the

data needed, and completing and

reviewing each collection of

information.

Title: Requirements for Submission of

Labeling for Human Prescription Drugs

and Biologics in Electronic Format.

Description: FDA is amending its

regulations governing the format in

which certain labeling is required to be

submitted for review with NDAs, certain

BLAs, ANDAs, supplements, and

annual reports. The final rule requires

that the content of labeling for

prescription drug and biological

products required under § 201.100(d)(3)

be submitted to FDA electronically in a

form that we can process, review, and

archive. Copies of product labeling are

currently required to be submitted to

FDA for review in NDAs, certain BLAs,

ANDAs, certain supplements, and

annual reports under §§ 314.50, 314.70,

314.81, 314.94, 314.97, 314.98, §§ 601.2,

and 601.12. Copies of labeling may be

submitted electronically or on paper.

The agency is adding the new

requirements because submitting the

content of labeling in electronic format

will simplify the drug labeling review

process and speed up the approval of

labeling changes.

As required under section

3506(c)(2)(B) of the Paperwork

Reduction Act, FDA provided an

opportunity for public comments on

May 3, 2002 (67 FR 22367), on the

information collection provisions of the

proposed rule. FDA received two

comments stating that the agency

underestimated the time and costs to

prepare the content of labeling in

electronic format for submission to

FDA. Specifically, the comments stated

that the 15 minutes to convert the

labeling into PDF was underestimated

because it did not take into account the

time needed to proofread the content of

labeling document.

FDA believes that proofreading is not

an additional cost for submitting

labeling in electronic format for new

submissions of NDAs, BLAs, and

ANDAs. Labeling is proofread prior to

submission regardless of the format. If

the labeling is in a word processing file,

it is irrelevant whether the document is

printed or converted to a PDF file. This

is because the finished product, the

labeling, is proofread for quality

assurance in either case. We also note

that someone may need even less time

to proofread an electronic file than a

printed document because the computer

could assist in finding errors. As such,

we are not changing the burden estimate

for these applications in the final rule.

However, we agree that we should

allow for proofreading of labeling under

certain circumstances. Applicants that

have previously submitted labeling in

paper format in annual reports or

supplements, but also maintained the

labeling document in electronic format,

should be provided time for

proofreading the converted file. This

category of labeling would not require

any changes to the labeling since it was

last submitted to the agency. It only

requires additional time for

proofreading to ensure that the

electronic document being submitted is

the same as the labeling previously

submitted in paper format. We estimate

that the hours per response (i.e., the

time it will take an applicant to submit

the labeling content electronically for

these annual reports and supplements)

will be approximately 5 hours. We

discuss this new category of reporting in

more detail in this section V when we

calculate the burdens associated with

submission of electronic labeling in

supplements and annual reports. We

also add sections to the estimated

annual reporting burden chart to report

the burdens.

As we noted in the proposed rule, we

recognize that some older annual

reports may require additional steps,

such as accessing the labeling in the

archives, putting the content of labeling

into an electronic format, and

converting it to a PDF file. In response

to the proofreading comments

mentioned previously, we are allowing

an additional 2 hours for proofreading

this type of labeling (the proposed rule

allowed for 8 hours and the final rule is

allowing for 10 hours).

The reporting burdens for submitting

labeling as currently required under

§§ 314.50, 314.70, 314.81, 314.94,

314.97, and 314.98 have previously

been estimated by FDA, and this

collection of information was approved

by OMB until March 31, 2005, under

OMB control number 0910–0001. The

reporting burdens associated with

current §§ 601.2 and 601.12 have also

previously been estimated and this

collection of information was approved

by OMB until August 31, 2005, under

OMB control number 0910–0338 (this

includes the collection of information

previously approved by OMB under

control number 0910–0315). We are not

reestimating these approved burdens in

this rulemaking. Only the additional

reporting burdens associated with the

electronic submission of the content of

labeling are estimated.

New NDAs (§ 314.50), ANDAs

(§ 314.94), and BLAs (§ 601.2): Based on

data in the approved collections of

information for §§ 314.50, 314.94, and

§ 601.2, we estimate that approximately

83 NDA applicants, 117 ANDA

applicants, and 17 BLA applicants

(respondents) submit applications to us

annually. We estimate that these

applicants (respondents) will submit

approximately 85 NDAs, 323 ANDAs,

and 17 BLAs each year that will be

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10

The numbers in this final rule have changed

from the proposed rule because we have updated

the numbers to be more current.

subject to this rule.

10

Based on our

experience with voluntary electronic

submissions and our knowledge of the

drug and biologic industries, we assume

that applicants for new NDAs, ANDAs,

and BLAs will already have the

necessary labeling in an electronic

format that can be easily accessed and

converted to a PDF file. Thus, we have

estimated that the hours per response,

i.e., the additional time necessary for

submission of the content of labeling in

electronic format for these applications,

will be less than 15 minutes. Therefore,

we estimate that respondents will spend

approximately 106 hours per year

submitting the content of labeling to us

in accordance with the final rule.

Supplements to NDAs (§ 314.70) and

ANDAs (§ 314.97) and BLAs

(§ 601.12(f)(1) and (f)(2)): Based on data

in the approved collections of

information for §§ 314.70, 314.97, and

§ 601.12(f)(1) and (f)(2), we estimate that

approximately 418 NDA applicants, 152

ANDA applicants, and 20 BLA

applicants (respondents) submit

supplements to approved applications

to us annually. We estimate that these

applicants (respondents) will submit

approximately 630 NDA supplements,

1,000 ANDA supplements, and 20 BLA

supplements each year that will be

subject to this rule.

Based on our experience with

voluntary electronic submissions and

our knowledge of the drug and biologic

industries, we assume that

approximately 254 NDA supplements,

396 ANDA supplements, and 10 BLA

supplements will be submitted by

applicants who already have the

necessary labeling in an electronic

format that can be easily accessed and

converted to a PDF file. Thus, we have

estimated that the hours per response,

i.e., the additional time necessary for

submission of the content of labeling in

electronic format for these supplements,

will be less than 15 minutes. Therefore,

we estimate that respondents would

spend approximately 165 hours per year

submitting the content of labeling to us

in these supplements under the final

rule.

As mentioned previously, we are

adding a new category to the paperwork

section to allow for proofreading the

converted file of labeling that was

previously submitted in supplements in

paper form (and not requiring any

changes since it was last submitted), but

is also maintained by the applicant in

an electronic format. We estimate that

approximately 376 NDA supplements,

604 ANDA supplements, and 10 BLA

supplements will be submitted by

applicants who previously submitted

labeling in paper, but have such labeling

available in electronic format. We

estimate that the hours per response,

i.e., the time it will take an applicant to

submit the labeling content

electronically for these supplements,

will be approximately 5 hours.

Therefore, we estimate that in the first

year, respondents will spend

approximately 4,950 hours submitting

the content of labeling that was

previously submitted in supplements in

paper form. For all supplements

combined, we estimate that in the first

year, respondents will spend

approximately 5,115 hours submitting

the content of labeling to us in

supplements under the final rule. This

expenditure of time will only be

necessary the first time that a

supplement is submitted with the

content of labeling in electronic format.

Once the content of labeling has been

converted to an electronic format, the

time necessary to submit the content of

labeling in subsequent supplements will

be the same as that for the other types

of submissions or less than 15 minutes.

Therefore, we estimate that, in

subsequent years, respondents will

spend approximately 413 hours per year

submitting the content of labeling in

supplements.

Annual Reports for NDAs (§ 314.81),

ANDAs (§ 314.98), and BLAs

(§ 601.12(f)(3)): Based on data in the

approved collections of information for

§§ 314.81, 314.98, and § 601.12(f)(3), we

estimate that approximately 275 NDA

applicants, 275 ANDA applicants, and

75 BLA applicants (respondents) submit

annual reports to us annually. We also

estimate that each NDA applicant

submits to us approximately 9.45

annual reports, each ANDA applicant

submits approximately 16.18 annual

reports, and each BLA applicant

submits approximately 1 annual report

each year. Further, we estimate that the

total annual responses, i.e., the total

number of annual reports submitted to

us per year, will remain approximately

2,600 NDA annual reports, 4,450 ANDA

annual reports, and 75 BLA annual

reports.

Based on our experience with

voluntary electronic submissions and

our knowledge of the drug and biologic

industries, we estimate that

approximately 24 percent of NDA

annual reports (624 NDA annual

reports), 20 percent of ANDA annual

reports (890 ANDA annual reports), and

24 percent of BLA annual reports (18

BLA annual reports), will already have

the necessary labeling in an electronic

format that can be easily accessed and

converted to a PDF file. As discussed

above, we estimate that each NDA

applicant submits to us approximately

9.45 annual reports, each ANDA

applicant submits approximately 16.18

annual reports, and each BLA applicant

submits approximately 1 annual report

each year. Therefore, approximately 66

NDA applicants, 55 ANDA applicants,

and 18 BLA applicants can easily access

labeling in electronic form and convert

it to a PDF file. For the applicants

submitting these annual reports, we

estimate that the hours per response,

i.e., the additional time necessary for

submission of the content of labeling in

electronic format in the annual report,

will be less than 15 minutes. Therefore,

we estimate that respondents would

spend approximately 383 hours per year

submitting the content of labeling to us

in these annual reports under the final

rule.

As mentioned previously, we are

adding a new category to the paperwork

section to allow for proofreading the

converted file of labeling that was

previously submitted in annual reports

in paper form (and not requiring any

changes since it was last submitted), but

is also maintained by the applicant in

an electronic format. For applicants to

include labeling content in their annual

reports in electronic format, we estimate

that approximately 36 percent of NDA

annual reports (936 NDA annual

reports), 30 percent of ANDA annual

reports (1,335 ANDA annual reports),

and 36 percent of BLA annual reports

(27 BLA annual reports) will be

submitted by applicants who previously

submitted labeling in paper, but have

such labeling available in electronic

format. As discussed above, we estimate

that each NDA applicant submits to us

approximately 9.45 annual reports, each

ANDA applicant submits approximately

16.18 annual reports, and each BLA

applicant submits approximately 1

annual report each year. Therefore,

under the final rule, approximately 99

NDA applicants, 83 ANDA applicants,

and 27 BLA applicants would need

additional time to proofread these

annual reports. We estimate that the

hours per response, i.e., the time it will

take an applicant to submit the labeling

content electronically for these annual

reports, will be approximately 5 hours.

Therefore, we estimate that respondents

would spend approximately 11,490

hours per year submitting the content of

labeling to us in these annual reports

under the final rule.

We recognize that annual reports for

some drug and biological products,

particularly older products for which

labeling changes have not been made in

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11

The number increased from 8 hours to 10 hours

to allow for additional time to proofread.

several years, may require additional

steps. For applicants to include labeling

content in their annual reports in

electronic format, we estimate that

approximately 40 percent of NDA

annual reports (1,040 NDA annual

reports), 50 percent of ANDA annual

reports (2,225 ANDA annual reports),

and 40 percent of BLA annual reports

(30 BLA annual reports) will be

submitted by applicants who may need

to access the labeling in their archives,

put the content of labeling into an

electronic format, and convert it to a

PDF file. As discussed previously, we

estimate that each NDA applicant

submits to us approximately 9.45

annual reports, each ANDA applicant

submits approximately 16.18 annual

reports, and each BLA applicant

submits approximately 1 annual report

each year. Therefore, under the final

rule, approximately 110 NDA

applicants, 137 ANDA applicants, and

30 BLA applicants would need to put

labeling content in an electronic format

and convert it to a PDF file. We estimate

that the hours per response, i.e., the

time it will take an applicant to submit

the labeling content electronically for

these annual reports, will be

approximately 10 hours.

11

Therefore,

we estimate that respondents would

spend approximately 32,950 hours per

year submitting the content of labeling

to us in these annual reports under the

final rule.

We estimate that in the first year,

respondents will spend approximately

44,823 hours submitting the content of

labeling to us in annual reports under

the final rule. This expenditure of time

will only be necessary the first time that

an annual report is submitted with the

content of labeling in electronic format.

Once the content of labeling has been

converted to an electronic format, the

time necessary to submit the content of

labeling in subsequent annual reports

will be the same as that for the other

types of submissions or less than 15

minutes. Therefore, we estimate that, in

subsequent years, respondents will

spend approximately 1,781 hours per

year submitting the content of labeling

in annual reports.

Description of Respondents: An

applicant submitting an NDA, ANDA,

BLA, supplement, or annual report to us

for a drug or biological product.

T

ABLE

1.—E

STIMATED

A

NNUAL

R

EPORTING

B

URDEN

1

21 CFR Section

No. of Respondents

No. of Responses

per Respondent

Total Responses

Hours per Response

Total Hours

Applications: 314.50

83

1.02

85

.25

21

314.94

117

2.76

323

.25

81

601.14

(Applications

submitted

under § 601.2)

17

1

17

.25

4

Subtotal, applications

106

Supplements:

314.70

(Products

not requiring additional steps for

electronic submission)

167

1.52

254

.25

63

314.70

(Products

requiring

addi-

tional proofreading)

251

1.50

376

5

1,880

314.97 (Products not requiring ad-

ditional steps for electronic sub-

mission)

61

6.50

396

.25

99

314.97(Products

requiring

addi-

tional proofreading)

91

6.50

604

5

3,020

601.14

(Supplements

submitted

under

§ 601.12(f)(1)

and

(f)(2))(Products not requiring ad-

ditional steps for electronic sub-

mission)

8

1.25

10

.25

3

601.14

(Supplements

submitted

under

§ 601.12(f)(1)

and

(f)(2))

(Products

requiring

additional

proofreading)

12

.83

10

5

50

Subtotal, supplements, year one

5,115

Subtotal, supplements, subsequent years

2

413

Annual Reports: 314.81 (Products

not requiring additional steps for

electronic submission)

66

9.45

624

.25

156

314.81

(Products

requiring

addi-

tional proofreading)

99

9.45

936

5

4,680

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T

ABLE

1.—E

STIMATED

A

NNUAL

R

EPORTING

B

URDEN

1

—Continued

21 CFR Section

No. of Respondents

No. of Responses

per Respondent

Total Responses

Hours per Response

Total Hours

314.81

(Products

requiring

addi-

tional

steps

for

electronic

sub-

mission)

110

9.45

1,040

10

10,400

314.98 (Products not requiring ad-

ditional steps for electronic sub-

mission)

55

16.18

890

.25

222

314.98

(Products

requiring

addi-

tional proofreading)

83

16.18

1,335

5

6,675

314.98

(Products

requiring

addi-

tional

steps

for

electronic

sub-

mission)

137

16.18

2,225

10

22,250

601.14 (Annual reports submitted

under § 601.12(f)(3) not requiring

additional

steps

for

electronic

submission)

18

1

18

.25

5

601.14

Annual

reports

submitted

under

§ 601.12(f)(3)

(Products

requiring additional proofreading)

27

1

27

5

135

601.14 (Annual reports submitted

under

§ 601.12(f)(3)

requiring

additional

steps

for

electronic

submission)

30

1

30

10

300

Subtotal, annual reports, year one

44,823

Subtotal, annual reports, subsequent years

3

1,781

Total, year one

50,044

Total, subsequent years

3

2,300

1

There are one-time capital costs to: (1) Acquire computer software; (2) train employees to use the software; and (3) convert certain labeling

to an electronic format. These costs are estimated to be about $2.3 million (see section VIII of this document). There are no operating or mainte-

nance costs associated with this collection of information.

2

We estimate that for certain annual reports, respondents will spend 5 hours per response in the first year. We estimate that in subsequent

years respondents will spend less than 15 minutes per response for all supplements.

3

We estimate that for certain annual reports, respondents will spend either 5 or 10 hours per response in the first year. We estimate that in

subsequent years respondents will spend less than 15 minutes per response for all annual reports.

In compliance with section 3507(d) of

the Paperwork Reduction Act of 1995

(44 U.S.C. 3507(d)), the agency has

submitted a copy of this rule to OMB for

its review and approval of these

information collections.

The information collection provisions

in this final rule have been approved

under OMB control number 0910–0530.

This approval expires on November 30,

2006. An agency may not conduct or

sponsor, and a person is not required to

respond to, a collection of information

unless the information collection

displays a currently valid OMB control

number.

VI. 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.

VII. 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 Executive order and, consequently,

a federalism summary impact statement

is not required.

VIII. Analysis of Economic Impacts

We have examined the impacts of this

final rule under Executive Order 12866

and the Regulatory Flexibility Act (5

U.S.C. 601–612), and the Unfunded

Mandates Reform Act of 1995 (Public

Law 104–4). Executive Order 12866

directs agencies to assess all costs and

benefits of available regulatory

alternatives and, when regulation is

necessary, to select regulatory

approaches that maximize net benefits

(including potential economic,

environmental, public health and safety,

and other advantages; distributive

impacts; and equity). Under the

Regulatory Flexibility Act, if a rule may

have a significant economic impact on

a substantial number of small entities,

an agency must consider alternatives

that would minimize the economic

impact of the rule on small entities.

Section 202(a) of the Unfunded

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Mandates Reform Act of 1995 requires

that agencies prepare a written

assessment 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).

We believe that this final rule is

consistent with the regulatory

philosophy and principles identified in

Executive Order 12866 and in these two

statutes. The final rule is a significant

regulatory action as defined in section 3

paragraph (f)(4) of the Executive order.

However, as shown in this section VIII,

the final rule will not be an

economically significant regulatory

action as defined by the Executive order

and will not require further analysis

under the Regulatory Flexibility Act.

The Unfunded Mandates Reform Act

of 1995 does not require FDA to prepare

a statement of costs and benefits for the

final rule because the final rule would

not result in an expenditure of $100

million in any one year, adjusted for

inflation. The current inflation-adjusted

statutory threshold is approximately

$110 million.

The purpose of this final rule is to

require applicants to submit in

electronic format the content of labeling

required under § 201.100(d)(3) in NDAs,

ANDAs, BLAs, annual reports, and

applicable supplements. Submissions in

electronic format will help simplify and

speed up our review of these

documents. Currently, applicants may

voluntarily submit such data in

electronic form, but they are not

required to do so. The rule will require

all applicants of approved and new

NDAs, BLAs, and ANDAs to convert the

content of labeling to an electronic

format for submission. At this time, PDF

is the type of electronic file format that

we have the ability to accept for

processing, reviewing, and archiving.

Applicants that do not already have the

capabilities to create PDF files will have

to acquire the software and expertise to

do so or make contractual arrangements

to have documents converted.

The economic burden on industry

will include a one-time cost to acquire

the appropriate computer software and

train employees on its use. Applicants

may also incur additional one-time costs

to revise applications that have not had

any labeling changes within the last few

years to a format that can be converted

to a PDF file. We do not know the

number of applicants that currently

have the capability to submit electronic

files, nor do we have firsthand

information on how labeling files are

currently maintained or on how much

time will be required to train employees

on the software and new procedures.

Three comments were received

regarding the economic impact analysis.

Two of these comments suggested that

the cost to convert the content of

labeling to a PDF format was

underestimated because it did not

include the cost to proofread the

labeling after it is converted to a PDF

file. The time required for proofreading

ranged from 4 to 6 hours depending on

the complexity/length of the labeling.

One of these comments also suggested

that the cost for converting older

labeling that is only available on paper

was underestimated, suggesting that the

costs should include costs for

equipment, training, and time to scan

paper documents.

The agency agrees that we should

allow for proofreading of labeling under

certain circumstances. Applicants that

have previously submitted annual

reports or supplements in paper form,

but also maintained the documents in

electronic format, should be provided

time for proofreading the converted file.

This category of labeling would not

require any changes to the labeling since

it was last submitted to the agency. It

only requires additional time for

proofreading to ensure that it is the

same as the labeling submitted in paper

format. Five hours was used in this

analysis to reflect the cost under these

circumstances.

However, we do not agree that

proofreading is an incremental cost for

labeling that has been changed and is in

a word processing file. Proofreading of

the finished product for submission (in

this case, the PDF file) is done now as

part of current industry quality

assurance practice. We also do not agree

with the comment that costs for

scanning labeling should be included in

the impact analysis. While scanning

paper labeling and using optical

character recognition software is an

option some firms may choose, it is not

required. The labeling can be

transcribed into a word processing

format and then converted. However,

we did increase the time estimate for

such conversions by an additional 2

hours and we also increased our

estimate of the percent of labeling that

is included in this category because we

now believe that number was

underestimated.

Annually, we receive approximately

425 applications, 7,125 annual reports,

and 1,650 supplements that contain

labeling from approximately 625

applicants. Based on our experience

working with voluntary electronic

submissions, we estimate that overall

approximately 70 percent of the

applicants (440) already have the

necessary software and trained

personnel to comply with this rule. The

remaining 30 percent of applicants (190)

would need to purchase software, which

costs about $250. Based on agency

review, approximately 78 percent of

these 190 applicants 148 would be

considered small (fewer than 750

employees for drug product

manufacturers and fewer than 500

employees for biological product

manufacturers). We estimate that each

small applicant would need to purchase

only one copy of the software, for a total

of 148 copies. The remaining 22 percent

of applicants (42) that would need to

purchase software are large entities. The

agency estimates that each of these firms

would need to purchase about 3 copies

of the software or 126 copies (42 x 3).

Thus, the total one-time cost for

software is $68,500 ((148 + 126) x $250).

Training costs include the cost of the

software training course (estimated at

$150 for a 6-hour course) and the wages

of the employees attending the course

(assuming an average weighted wage

rate of $40 per hour). We estimate that

applicants would train two employees

per software purchase (548 employees),

for a total one-time cost of $213,720

(($150 + (6 hours x $40)) x 548). The

total one-time cost for software and

training combined is estimated to be

$282,220 ($68,500 + $213,720).

The cost to convert the applicable

labeling to an electronic format is a one-

time cost. The cost of conversions for

new NDAs, BLAs, and ANDAs will be

nominal because the file would be in a

format easily convertible to PDF. The

PDF file, being the finished product,

would be proofread for quality

assurance. Annually, we receive

approximately 1,650 supplements that

would be subject to the final rule.

Because the majority of products for

which supplements are submitted

would have had labeling changes within

the last few years, most labeling files

would be easily accessible. Currently,

the labeling in about 40 percent (660) of

the supplements received is submitted

in a PDF format and would require an

estimated additional 15 minutes to

comply with this final rule. The labeling

in the remaining 60 percent (990) will

require an estimated 5 hours to process

and proofread. Thus, the total number of

hours needed to convert applicable

labeling in supplements to a PDF file

format is 5,115 ((0.25 x 660) + (5 x 990)).

Labeling in most of the annual reports

will also need to be converted. The

conversion of this labeling to a PDF file

for about 40 percent of NDA annual

reports (975), 50 percent of ANDA

annual reports (2,295), and 40 percent of

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BLA annual reports (40), would require

additional time to complete because

they are not in a format easily

convertible to PDF. We estimate that

these annual reports would require 10

hours to complete, for a total of 33,100

hours ((975 + 2,295 + 40) x 10). For the

content of labeling in the remaining

annual reports (3,815), an estimated 40

percent (1,526) would require 15

minutes to process because they are

currently in PDF format, and the

remaining 2,289 annual reports will

require approximately 5 hours to

process and proofread, for a total of

11,827 hours ((1,526 x 0.25) + (2,289 x

5)). Thus, the total number of hours

needed to convert all applicable labeling

to a PDF file format in supplements and

annual reports is 50,042 (5,115 + 33,100

+ 11,827). Using the weighted average

wage rate ($40 per hour), the total one-

time costs to convert applicable labeling

in supplements and annual reports

would be about $2.0 million (50,042 x

$40). The cost for the entire rule is

estimated to be about $2.3 million ($0.3

million (software and training + $2.0

million labeling)).

Approximately 300 domestic entities

would be affected by this final rule,

about 240 of which meet the Small

Business Administration’s definition of

a small entity (fewer than 750

employees for drug product

manufacturers and fewer than 500

employees for biological product

manufacturers). The economic impact of

this final rule would vary by firm

depending on the number of

applications they hold and whether or

not the company has PDF capabilities.

The number of applications per firm

ranges from 1 to 124, with a median of

4 applications per small entity. The

average small entity has about 7

applications, and, assuming a worst case

scenario—the firm did not have the

content of labeling in an electronic

format and needed to purchase software

and train employees—this rule would

cost the average small firm about $4,000

($1,030 software and training + (7 x 10

hours x $40)), which is about $550 per

application. Because these costs would

almost certainly be less than 1 percent

of product revenues, the agency certifies

that this final rule will not have a

significant economic impact on a

substantial number of small entities.

List of Subjects

21 CFR Part 314

Administrative practice and

procedure, Confidential business

information, Drugs, Reporting and

recordkeeping requirements.

21 CFR Part 601

Administrative practice and

procedure, Biologics, Confidential

business information.

■

Therefore, under the Federal Food,

Drug, and Cosmetic Act, the Public

Health Service Act, and under authority

delegated to the Commissioner of Food

and Drugs, 21 CFR parts 314 and 601 are

amended as follows:

PART 314—APPLICATIONS FOR FDA

APPROVAL TO MARKET A NEW DRUG

■

1. The authority citation for 21 CFR

part 314 continues to read as follows:

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

353, 355, 355a, 356, 356a, 356b, 356c, 371,

374, 379e.

■

2. Section 314.50 is amended by

revising paragraph (l)(1); by adding

headings for paragraphs (l)(2), (l)(3), and

(l)(4); by removing from paragraphs (l)(2)

and (l)(3) the word ‘‘shall’’ and adding in

its place the word ‘‘must’’; and by adding

paragraph (l)(5) to read as follows:

§ 314.50

Content and format of an

application.

*

*

*

*

*

(l) Format of an original application.

(1) Archival copy. The applicant must

submit a complete archival copy of the

application that contains the

information required under paragraphs

(a) through (f) of this section. FDA will

maintain the archival copy during the

review of the application to permit

individual reviewers to refer to

information that is not contained in

their particular technical sections of the

application, to give other agency

personnel access to the application for

official business, and to maintain in one

place a complete copy of the

application. Except as required by

paragraph (l)(1)(i) of this section,

applicants may submit the archival copy

on paper or in electronic format

provided that electronic submissions are

made in accordance with part 11 of this

chapter.

(i) Labeling. The content of labeling

required under § 201.100(d)(3) of this

chapter (commonly referred to as the

package insert or professional labeling),

including all text, tables, and figures,

must be submitted to the agency in

electronic format as described in

paragraph (l)(5) of this section. This

requirement is in addition to the

requirements of paragraph (e)(2)(ii) of

this section that copies of the formatted

label and all labeling be submitted.

Submissions under this paragraph must

be made in accordance with part 11 of

this chapter, except for the requirements

of § 11.10(a), (c) through (h), and (k),

and the corresponding requirements of

§ 11.30.

(ii) [Reserved]

(2) Review copy. * * *

(3) Field copy. * * *

(4) Binding folders. * * *

(5) Electronic format submissions.

Electronic format submissions must be

in a form that FDA can process, review,

and archive. FDA will periodically issue

guidance on how to provide the

electronic submission (e.g., method of

transmission, media, file formats,

preparation and organization of files).

■

3. Section 314.81 is amended by

revising paragraph (b)(2)(iii) to read as

follows:

§ 314.81

Other postmarketing reports.

*

*

*

*

*

(b) * * *

(2) * * *

(iii) Labeling. (a) Currently used

professional labeling, patient brochures

or package inserts (if any), and a

representative sample of the package

labels.

(b) The content of labeling required

under § 201.100(d)(3) of this chapter

(i.e., the package insert or professional

labeling), including all text, tables, and

figures, must be submitted in electronic

format. Electronic format submissions

must be in a form that FDA can process,

review, and archive. FDA will

periodically issue guidance on how to

provide the electronic submission (e.g.,

method of transmission, media, file

formats, preparation and organization of

files). Submissions under this paragraph

must be made in accordance with part

11 of this chapter, except for the

requirements of § 11.10(a), (c) through

(h), and (k), and the corresponding

requirements of § 11.30.

(c) A summary of any changes in

labeling that have been made since the

last report listed by date in the order in

which they were implemented, or if no

changes, a statement of that fact.

*

*

*

*

*

■

4. Section 314.94 is amended by

revising paragraph (d)(1) to read as

follows:

§ 314.94

Content and format of an

abbreviated application.

*

*

*

*

*

(d) * * * (1) The applicant must

submit a complete archival copy of the

abbreviated application as required

under paragraphs (a) and (c) of this

section. FDA will maintain the archival

copy during the review of the

application to permit individual

reviewers to refer to information that is

not contained in their particular

technical sections of the application, to

give other agency personnel access to

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the application for official business, and

to maintain in one place a complete

copy of the application.

(i) Format of submission. An

applicant may submit portions of the

archival copy of the abbreviated

application in any form that the

applicant and FDA agree is acceptable,

except as provided in paragraph

(d)(1)(ii) of this section.

(ii) Labeling. The content of labeling

required under § 201.100(d)(3) of this

chapter (commonly referred to as the

package insert or professional labeling),

including all text, tables, and figures,

must be submitted to the agency in

electronic format as described in

paragraph (d)(1)(iii) of this section. This

requirement applies to the content of

labeling for the proposed drug product

only and is in addition to the

requirements of paragraph (a)(8)(ii) of

this section that copies of the formatted

label and all proposed labeling be

submitted. Submissions under this

paragraph must be made in accordance

with part 11 of this chapter, except for

the requirements of § 11.10(a), (c)

through (h), and (k), and the

corresponding requirements of § 11.30.

(iii) Electronic format submissions.

Electronic format submissions must be

in a form that FDA can process, review,

and archive. FDA will periodically issue

guidance on how to provide the

electronic submission (e.g., method of

transmission, media, file formats,

preparation and organization of files).

*

*

*

*

*

PART 601—LICENSING

■

5. The authority citation for 21 CFR

part 601 continues to read as follows:

Authority: 15 U.S.C. 1451–1561; 21 U.S.C.

321, 351, 352, 353, 355, 356b, 360, 360c–

360f, 360h–360j, 371, 374, 379e, 381; 42

U.S.C. 216, 241, 262, 263, 264; sec. 122, Pub.

L. 105–115, 111 Stat. 2322 (21 U.S.C. 355

note).

■

6. Add 601.14 to subpart C to read as

follows:

§ 601.14

Regulatory submissions in

electronic format.

(a) General. Electronic format

submissions must be in a form that FDA

can process, review, and archive. FDA

will periodically issue guidance on how

to provide the electronic submission

(e.g., method of transmission, media,

file formats, preparation and

organization of files.)

(b) Labeling. The content of labeling

required under § 201.100(d)(3) of this

chapter (commonly referred to as the

package insert or professional labeling),

including all text, tables, and figures,

must be submitted to the agency in

electronic format as described in

paragraph (a) of this section. This

requirement is in addition to the

provisions of §§ 601.2(a) and 601.12(f)

that require applicants to submit

specimens of the labels, enclosures, and

containers, or to submit other final

printed labeling. Submissions under

this paragraph must be made in

accordance with part 11 of this chapter

except for the requirements of

§ 11.10(a), (c) through (h), and (k), and

the corresponding requirements of

§ 11.30.

Dated: July 31, 2003.

Jeffrey Shuren,

Assistant Commissioner for Policy.

[FR Doc. 03–30641 Filed 12–9–03; 8:45 am]

BILLING CODE 4160–01–S

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9097]

RIN 1545–AX22

Arbitrage Restrictions Applicable to

Tax-Exempt Bonds Issued by State

and Local Governments

AGENCY

:

Internal Revenue Service (IRS),

Treasury.

ACTION

:

Final regulations.

SUMMARY

:

This document contains final

regulations on the arbitrage restrictions

applicable to tax-exempt bonds issued

by state and local governments. The

regulations affect issuers of tax-exempt

bonds and provide a safe harbor for

qualified administrative costs for

broker’s commissions and similar fees

incurred in connection with the

acquisition of guaranteed investment

contracts or investments purchased for

a yield restricted defeasance escrow.

DATES

:

Effective Date: These regulations

are effective February 9, 2004.

Applicability Date: For dates of

applicability, see § 1.148–11(i) of these

regulations.

FOR FURTHER INFORMATION CONTACT

:

Rose

M. Weber, (202) 622–3980 (not a toll-

free number).

SUPPLEMENTARY INFORMATION

:

Background

This document amends 26 CFR part 1

under section 148 of the Internal

Revenue Code by providing rules for

determining when certain brokers’

commissions or similar fees are

qualified administrative costs (the final

regulations). On August 27, 1999, the

IRS published in the Federal Register a

notice of proposed rulemaking (REG–

105565–99)(64 FR 46876) (the proposed

regulations). The proposed regulations

modify § 1.148–5(e)(2) to provide a safe

harbor for determining whether brokers’

commissions and similar fees incurred

in connection with the acquisition of

guaranteed investment contracts or

investments purchased for a yield

restricted defeasance escrow are treated

as qualified administrative costs.

Comments on the proposed regulations

were received and a hearing was held

on December 14, 1999. After

consideration of all the comments, the

proposed regulations are adopted as

revised by this Treasury decision. The

revisions are discussed below.

Explanation of Provisions

I. Existing Regulations

A. Investment Yield and Administrative

Costs

Section 148 limits the yield on

investments purchased with proceeds of

tax-exempt bonds. In general, under

§ 1.148–5(b)(1) of the existing

regulations, the yield on an investment

is computed by comparing receipts from

the investment to payments for the

investment. Section 1.148–5(e)(1)

provides that the yield on an investment

generally is not adjusted to take into

account any costs or expenses paid,

directly or indirectly, to purchase, carry,

sell, or retire the investment

(administrative costs). However,

§ 1.148–5(e)(2)(i) provides that the yield

on nonpurpose investments (as defined

in § 1.148–1(b)) is adjusted to take into

account qualified administrative costs.

Qualified administrative costs are

reasonable, direct administrative costs,

other than carrying costs, such as

separately stated brokerage or selling

commissions, but not legal and

accounting fees, recordkeeping, custody,

and similar costs. In general, under

§ 1.148–5(e)(2)(i), administrative costs

are not reasonable unless they are

comparable to administrative costs that

would be charged for the same

investment or a reasonably comparable

investment if acquired with a source of

funds other than gross proceeds of tax-

exempt bonds (the comparability

standard).

B. Special Rule for Guaranteed

Investment Contracts

Section 1.148–5(e)(2)(iii) of the

existing regulations provides that, for a

guaranteed investment contract, a

broker’s commission or similar fee paid

on behalf of either an issuer or the

guaranteed investment contract provider

generally is a qualified administrative

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