[Federal Register Volume 65, Number 45 (Tuesday, March 7, 2000)]
[Rules and Regulations]
[Pages 11881-11888]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-5417]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Part 20

[Docket No. 98N-0518]


Public Information; Communications With State and Foreign 
Government Officials

AGENCY: Food and Drug Administration, HHS.

ACTION: Final rule.

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SUMMARY: The Food and Drug Administration (FDA) is issuing final 
regulations governing communications with State and foreign government 
officials. The rule states that FDA may disclose confidential 
commercial information to international organizations having 
responsibility to facilitate global or regional harmonization of 
standards and requirements. These disclosures will, in almost all 
instances, occur only with the consent of the person who submitted the 
confidential commercial information to FDA. The rule also streamlines 
the process for FDA officials to disclose certain nonpublic, 
predecisional documents (such as draft rules and guidance documents) to 
State and foreign government officials. The rule does not alter current 
procedures for sharing documents that contain confidential commercial 
information. These changes are intended to facilitate information 
exchanges with State and foreign governments and certain international 
organizations.

DATES: This rule becomes effective on May 22, 2000.

FOR FURTHER INFORMATION CONTACT: Philip L. Chao, Office of Policy, 
Planning, and Legislation (HF-23), Food and Drug Administration, 5600 
Fishers Lane, Rockville, MD 20857, 301-827-3380.

SUPPLEMENTARY INFORMATION:

I. Introduction

    In the Federal Register of July 27, 1998 (63 FR 40069), FDA 
published a proposed rule that would facilitate its communications with 
foreign governments. Current FDA regulations at Sec. 20.89 (21 CFR 
20.89) permit FDA to disclose confidential commercial information and 
nonpublic, predecisional documents to foreign governments. Nonpublic, 
predecisional documents are disclosed under Sec. 20.89(d) only if they 
do not contain unredacted confidential commercial information (such as 
draft FDA guidance documents or regulations). These disclosures are 
subject to certain safeguards. These safeguards include obtaining a 
written statement from the foreign government agency establishing that 
agency's authority to protect the confidential commercial information 
from public disclosure, and a written commitment not to disclose such 
information without written permission from the person who created or 
submitted the confidential commercial information (the ``sponsor'') or 
written confirmation from FDA that the information is no longer 
confidential. Similar safeguards exist regarding exchanges of 
nonpublic, predecisional information.
    A similar regulation for communications with State government 
officials exists at Sec. 20.88 (21 CFR 20.88).
    FDA published the proposed rule to accomplish several goals. First, 
the proposed rule would amend Secs. 20.88(e)(1)(i) and 20.89(d)(1)(i) 
to eliminate the requirement for the written statement and written 
commitment for exchanges involving solely nonpublic, predecisional 
information. As explained in the preamble to the proposed rule, it 
appears that requiring written

[[Page 11882]]

statements from the receiving foreign government agencies is contrary 
to customary international practice, in which drafts of such documents 
are routinely shared with trusted individuals in foreign government 
counterpart agencies as part of a well--understood and well--
established practice that provides that those individuals and their 
agencies will not disclose the documents or make them public (63 FR 
40069 at 40071). FDA's experience with Sec. 20.89 also indicates that 
officials in some foreign agencies have been reluctant to execute these 
written statements for various reasons, including uncertainty as to who 
in their respective government agencies possesses the requisite 
authority to sign such a statement, or concerns that the written 
statements might, under their government's policies or laws, be 
considered an international agreement that might require new national 
legislation or legislative consent. FDA further noted in the preamble 
to the proposed rule that, because the information exchanges in 
question involve nonpublic, predecisional documents that do not contain 
confidential commercial information, the written statements add little 
value to protecting the information exchange process because only FDA's 
deliberative interests would be directly affected by a premature public 
disclosure.
    Second, the proposal would revise Sec. 20.89 to permit FDA to 
disclose to international organizations both confidential commercial 
information and nonpublic, predecisional information. Disclosures of 
confidential commercial information to an international organization 
would be subject to the same safeguards that apply to disclosures of 
such information to foreign government agencies, including a written 
statement, a written commitment, and, in most cases, the sponsor's 
consent. The preamble to the proposed rule described an instance in 
which the Pan American Health Organization (PAHO) requested certain 
manufacturing and product quality information from FDA after a product 
contamination incident, and FDA was unable to disclose the information 
to PAHO until non-FDA sources had publicly disclosed the information 
(63 FR 40069 at 40071). Thus, the proposal would address situations in 
which an international organization seeks to obtain confidential 
commercial information from FDA by moving the language regarding an 
``official of a foreign government agency'' from Sec. 20.89(d)(3)--
where it applies only to disclosures of nonpublic, predecisional 
documents--to a new Sec. 20.89(e), so that it would apply to all 
disclosures under Sec. 20.89. The proposal would also revise the 
reference to international organizations to refer to international 
organizations that facilitate ``global or regional'' harmonization of 
standards and requirements. The reference to ``regional'' harmonization 
efforts would reflect the fact that some international organizations 
operate primarily on a regional, rather than global, scale.
    Finally, the proposed rule would clarify that the term ``official 
of a foreign government'' in proposed Sec. 20.89(e) includes, but is 
not limited to, permanent and temporary employees of, and agents 
contracted by, a foreign government. This clarification was needed 
because the existing rule expressly mentioned agents, but not employees 
of the foreign government (63 FR 40069 at 40071).

II. Discussion of Comments on the Proposed Rule

    FDA received four comments on the proposed rule, including one 
comment from a foreign government. Three comments, submitted by 
pharmaceutical companies and a trade association, opposed the rule. The 
fourth comment, submitted by a foreign government agency, supported the 
rule.

A. Sections 20.88(e)(1) and 20.89(d)(1)--Eliminating the Requirement of 
a Written Statement and a Written Commitment From State and Foreign 
Governments for Exchanges of Nonpublic, Predecisional Documents

    As stated earlier, the proposal would revise Secs. 20.88(e)(1) and 
20.89(d)(1) to eliminate the requirement whereby a U.S. State or 
foreign government agency official must provide a written statement 
concerning that agency's ability to protect nonpublic, predecisional 
documents from public disclosure and a written commitment not to 
disclose any nonpublic, predecisional documents without FDA's written 
confirmation that the document no longer has nonpublic status.
    1. One comment from a foreign government agency stated that it 
``welcome[s] FDA's recognition that the previous requirement for a 
written undertaking has been contrary to customary international 
practice'' and that it, too, was aware that ``in some countries legal 
difficulties have arisen over providing FDA with such undertakings.'' 
The comment stated that the rule would help simplify communications 
between the two countries.
    In contrast, one comment from a pharmaceutical trade association 
opposed giving nonpublic, predecisional documents to State and foreign 
governments, stating that FDA's rationale was ``difficult to follow,'' 
that the written statements are not ``overly burdensome,'' and that FDA 
would be ``putting the competitive interests of United States companies 
at risk.'' The comment added that ``the concerns expressed by foreign 
governments are not applicable to United States government agencies'' 
and that ``the exemptions from [the Freedom of Information Act] for 
pre-decisional documents and confidential commercial information should 
not be undermined by allowing this information to be available at the 
state level by virtue of differing state laws.''
    The final rule eliminates the need for a written statement and a 
written commitment from State and foreign government agencies when 
exchanges of nonpublic, predecisional documents are involved. FDA 
reiterates that these are documents that FDA creates; examples include 
draft regulations and draft guidance documents. Nonpublic, 
predecisional documents prepared by FDA normally do not contain 
confidential commercial information. If FDA prepared a document that 
contained confidential commercial information, that material would be 
considered, for purposes of Secs. 20.88 and 20.89, to be confidential 
commercial information, rather than a nonpublic, predecisional 
document. Therefore, the provisions of Secs. 20.88 and 20.89 pertaining 
to confidential commercial information would apply. Alternatively, FDA 
could redact the confidential commercial information before providing 
the nonpublic, predecisional document to the State or foreign 
government agency. Because the nonpublic, predecisional documents that 
FDA would provide to State and foreign governments would not contain 
confidential commercial information, their exchange would not place 
U.S. companies at a competitive disadvantage internationally or 
domestically.
    The written statement and written commitment requirement for 
nonpublic, predecisional documents that published in the Federal 
Register of December 8, 1995 (60 FR 63372) (hereinafter referred to as 
the 1995 final rule), was more formal than customary international 
practice and presented legal or legislative challenges to some foreign 
governments. The comment from the foreign government clearly and 
unequivocally supports FDA's rationale. While the comment opposing the 
proposal states that U.S. government agencies do not have to remedy 
issues

[[Page 11883]]

or problems faced by a foreign government, FDA cannot ignore the fact 
that the written statement and written commitment requirement departed 
from customary international practice and impeded the very exchange of 
information that the 1995 final rule was intended to promote.
    To illustrate the problem, FDA has received requests for draft 
documents from certain foreign government officials in order to 
harmonize international regulatory efforts on a particular subject. The 
written statement and written commitment requirement, on occasion, has 
presented an obstacle to the information exchange because the foreign 
government agency was uncertain as to whether such a statement, under 
the foreign country's law, would be considered to be a treaty or 
international agreement or because the foreign government agency was 
uncertain as to which official had the authority to sign a written 
statement and written commitment of this sort and provide it to another 
country. These uncertainties frustrated the intent behind Sec. 20.89 
because, without the written statement and written commitment from the 
foreign government, FDA could not provide the draft to the foreign 
government, and the opportunity for international collaboration on the 
draft was lost. Thus, contrary to the opposing comment's belief, a 
foreign government's ``problems'' with the written statement and 
written commitment requirement can affect FDA as well as the foreign 
government agency.
    FDA also does not accept the suggestion that nonpublic, 
predecisional information should not be available to State governments. 
FDA's regulations have provided for exchanges of nonpublic, 
predecisional information with certain State officials (those who have 
been commissioned under section 702 of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 372) and those under contract with FDA) and 
with State governments since the 1995 final rule, and the 1998 proposal 
did not contain any amendments or revisions (aside from the removal of 
the written statement and written commitment requirement) that would 
affect the availability of nonpublic, predecisional information to 
State government agencies. FDA further notes that it would be an odd 
result if FDA could provide nonpublic, predecisional information to a 
foreign government, but could not provide the same information to a 
State government in the United States. Similarly, it would be an odd 
result if FDA required State government agencies to provide greater 
assurance, compared to foreign governments, that they would protect 
nonpublic, predecisional documents from disclosure, especially when, in 
both cases, it is only governmental interests, not individual 
companies' interests, that would be adversely affected by an 
unauthorized disclosure.

B. Section 20.89(e)--Amending the Term ``Official of a Foreign 
Government Agency''

1. The Inclusion of Temporary and Permanent Employees and Agents
    As stated earlier, proposed Sec. 20.89(e) would clarify that the 
term ``official of a foreign government'' includes both temporary and 
permanent foreign government employees and agents. FDA proposed this 
change because the existing language, at Sec. 20.89(d)(3), expressly 
mentions agents, but not employees, of a foreign government. The 
proposal also would construe the term ``official of a foreign 
government'' as including temporary as well as permanent employees and 
agents. The inclusion of temporary employees and agents is meant to 
cover those situations where a foreign government employee is 
temporarily assigned to an international organization.
    2. One comment noted that the proposal did not expressly state 
whether foreign consultants are subject to any restrictions on the 
disclosure of information that FDA provides to a foreign government or 
to an international organization. The comment further noted that 
proposed Sec. 20.89(e) would require written statements from an 
international organization and individuals in the international 
organization, but that proposed Sec. 20.89(d)(1)(i) would eliminate the 
written statements.
    The reference to employees and agents in proposed Sec. 20.89(e) was 
not intended to exclude consultants to a foreign government agency. FDA 
considers consultants to be ``agents'' within proposed Sec. 20.89(e) 
and expects that such persons will adhere to the foreign government's 
written statement and written commitment regarding confidential 
commercial information and adhere to the foreign government agency's 
customary practice of not disclosing nonpublic, predecisional 
information supplied by a different government. In the event of an 
unauthorized disclosure, FDA will hold both the responsible individual 
and the foreign government agency accountable, and will take 
appropriate action.
    As for the comment's statement that proposed Secs. 20.89(d)(1)(i) 
and 20.89(e) conflict on the need for a written statement and written 
commitment, FDA agrees and has modified Sec. 20.89(e) to clarify that 
written statements and written commitments are required on behalf of 
both the international organization and the individual involved when 
confidential commercial information is being disclosed.
2. Providing Confidential Commercial Information to International 
Organizations
    Several comments strongly opposed the language in proposed 
Sec. 20.89(e) which would enable FDA to provide confidential commercial 
information to international organizations.
    3. Three comments challenged the agency's basis for the proposal. 
Two comments argued that an international organization such as PAHO has 
no role in matters that would require it to receive confidential 
commercial information, has no enforcement authority, and might not 
even be considered to have a role in harmonizing standards or 
requirements. Alternatively, one comment stated that, even if an 
international organization is responsible for global or regional 
harmonization of standards, it is unclear why such international 
organizations need confidential commercial information, especially in 
situations where there is no public health concern.
    The preamble to the proposed rule described an incident in Haiti 
where PAHO assisted Haiti's Ministry of Health in investigating a 
kidney failure epidemic in which nearly 90 children died. The problems 
were traced to a contaminated liquid acetaminophen product manufactured 
in Haiti, and FDA assisted the Haitian government by examining the 
pharmaceutical company, obtaining samples, and conducting laboratory 
tests. FDA prepared an inspection report that contained some 
confidential commercial information. Consequently, when PAHO requested 
the report, FDA was unable to provide the information because the 
existing FDA regulation did not provide for disclosing confidential 
commercial information to an international organization. FDA provided 
the information to PAHO only after FDA learned that non-FDA sources had 
publicly disclosed the information.
    This example illustrates that an international organization may, 
indeed, have a need for confidential commercial information from FDA. 
FDA also disagrees with the comment that suggested that no public 
health concerns existed in the PAHO example because, at the time of the 
investigation, the number of children who had died or

[[Page 11884]]

had become ill due to the contaminated product was rising, and 
officials were not certain about the source of the contamination or 
whether other drug products had been contaminated.
    However, FDA acknowledges that, in the PAHO example, the 
international organization was working to promote and coordinate public 
health efforts rather than taking an enforcement role or harmonizing 
standards or requirements. Therefore, FDA has clarified the definition 
of ``international organization'' to extend to international 
organizations whose responsibilities include promoting and coordinating 
public health efforts, consistent with the Haiti example described in 
the preamble to the proposed rule.
    FDA also points out that the World Health Organization (WHO), as 
well as PAHO (the WHO's regional body), does have a responsibility for 
harmonization and product standards.
    4. Three comments also sought specifics as to which international 
organizations might be able to receive confidential commercial 
information from FDA under the rule. One comment suggested that FDA 
establish standards and procedures to determine which international 
organizations should receive confidential commercial information; the 
comment would have FDA identify such organizations through notice and 
comment rulemaking and require international organizations to give FDA 
a summary of their charters, purposes, membership, and internal rules 
for protecting confidential commercial information from public 
disclosure. One comment would permit FDA to disclose confidential 
commercial information only to international organizations whose 
regulatory responsibilities are established by law, treaties, or other 
acts of government, and would exclude private or nongovernmental 
organizations. Another comment would exclude nongovernmental 
organizations. The comment stated that employees of nongovernmental 
organizations may not be subject to any laws preventing unauthorized 
disclosures and might not be ``legally or morally bound'' to protect 
confidential commercial information provided by FDA.
    Although FDA believes that many of the comments' suggestions would 
encumber the agency with excessive procedures and requirements, the 
agency agrees that the reference to international organizations should 
be more specific. The proposal was not intended to extend disclosures 
of confidential commercial information to private or nongovernmental 
organizations. Consequently, FDA has revised proposed Sec. 20.89(e) so 
that the term ``international organization'' refers only to 
international organizations that are established by law, treaty, or 
other governmental action and that have the responsibility to 
facilitate global or regional harmonization of standards and 
requirements in FDA's area of responsibility or to promote and 
coordinate public health efforts. Thus, the international organizations 
subject to revised proposed Sec. 20.89(e), therefore, are those that 
(unlike private or nongovernmental organizations) generally have 
statutes, regulations, or other obligations to protect confidential 
commercial information from public disclosure. Additionally, FDA will 
continue to require international organizations to provide written 
statements establishing their authority to protect confidential 
commercial information from public disclosure and written commitments 
not to disclose such information without the sponsor's written 
permission or written confirmation from FDA that the information is no 
longer confidential.
    The agency declines, however, to amend the rule to establish notice 
and comment rulemaking procedures to determine which international 
organizations may be eligible to receive confidential commercial 
information from FDA. The agency reiterates that, in almost all cases, 
exchanges of confidential commercial information involve a sponsor's 
consent. Thus, the burdens on the agency associated with notice and 
comment rulemaking procedures for determining an international 
organization's ``eligibility'' to receive information outweigh any 
benefits from such procedures in this instance.
    FDA also declines to amend the rule to create an explicit 
``application'' to be submitted by international organizations. 
Currently, for all disclosures to State and foreign governments 
(including international organizations), FDA carefully examines the 
reasons why the requesting body needs confidential commercial 
information, the statutory and regulatory mechanisms for protecting 
information supplied by FDA, and the identities of persons who will 
receive the information. Requiring a summary of the international 
organization's charter, purpose, and membership could be done on a 
case-by-case basis, if necessary, but often would be unnecessary. The 
United States is a member of the international organizations that would 
generally be the recipients of information under the rule and, 
therefore, FDA already possesses information on their charters, 
purposes, and memberships. (For example, the United States is a member 
of the PAHO and the WHO, and information on their charters and 
memberships is readily available.) If an international organization 
requests confidential commercial information under Sec. 20.89, and the 
United States is not a member of that organization, FDA will carefully 
review the request and will seek whatever documents it feels are 
necessary to evaluate the request.
    5. One comment stated that developing countries that lack 
sophisticated health systems would be the countries most likely to rely 
on international organizations in a public health crisis. However, the 
comment explained, developing countries often lack intellectual 
property protections within their legal systems. The comment added that 
if confidential commercial information were ``routinely'' released to 
international organizations, there would be a corresponding increased 
risk of ``routine'' abuse of intellectual property protections 
worldwide, without any benefit to U.S. manufacturers or to the public 
health of the United States. The comment claimed that the rule would 
benefit only foreign organizations and foreign competitors to U.S. 
manufacturers.
    The comment misinterprets the rule. Under Sec. 20.89(c)(1)(i), a 
foreign government agency seeking confidential commercial information 
from FDA must provide both a written statement establishing its 
authority to protect confidential commercial information from public 
disclosure and a written commitment not to disclose such confidential 
commercial information ``without the written permission of the sponsor 
or written confirmation by the Food and Drug Administration that the 
information no longer has confidential status'' (emphasis added). 
Additionally, under Sec. 20.89(c)(1)(ii)(A), FDA must determine that 
the sponsor of the product application has provided written 
authorization for the disclosure, or, under Sec. 20.89(c)(1)(ii)(B), 
that disclosure would be in the interest of public health by reason of 
the foreign government's possessing information concerning the safety, 
efficacy, or quality of a product or information concerning an 
investigation. Under the final rule, these safeguards also would apply 
to disclosures of confidential commercial information to an 
international organization. FDA is not proposing, and has never 
proposed, to disclose confidential commercial information to a foreign 
government or to an international organization on a routine basis.

[[Page 11885]]

    The agency notes that, under existing FDA regulations, an 
international organization that provides the necessary written 
statement and written commitment in order to obtain confidential 
commercial information from FDA cannot redisclose that confidential 
commercial information to a foreign government (or to any other party) 
without the sponsor's written permission or written confirmation from 
FDA that the information no longer has nonpublic status (see 21 CFR 
20.89(c)(1)(i)). Thus, international organizations receiving 
confidential commercial information under this rule will not be 
conduits for disclosures of confidential commercial information to 
foreign governments without permission from the sponsor or from FDA. If 
an international organization intends to request confidential 
commercial information from FDA and then provide that information to a 
foreign government, both the international organization and the foreign 
government must provide the necessary written statements and 
commitments to FDA to ensure that the information is protected.
    Moreover, as stated in the preamble to the proposed rule, in almost 
every case, disclosures of confidential commercial information to 
foreign governments have occurred with the sponsor's consent, and only 
after the foreign government has provided the necessary written 
statements (see 63 FR 40069 at 40070). Contrary to the comment's 
inference about the benefits that would flow to developing countries, 
the exchanges to date have been mostly to other developed countries. 
The disclosures have generally benefitted the sponsors of the 
confidential commercial information by facilitating approval or 
marketing decisions for the sponsor's product.
    FDA further notes that it is conscious of intellectual property 
concerns, particularly for pharmaceuticals, and is quite aware of its 
obligation under Article 39.3 of the Agreement on Trade-related Aspects 
of Intellectual Property Rights to protect undisclosed test or other 
data against unfair commercial use. Article 39.3 requires governments 
to protect such data against public disclosure ``except where necessary 
to protect the public, or unless steps are taken to ensure that the 
data are protected against unfair commercial use.'' The requirement in 
Sec. 20.89(c)(1) for written statements and the general requirement for 
sponsor consent are intended to help protect confidential commercial 
information from unauthorized public disclosure.
    6. Two comments stated that FDA should require or reaffirm that it 
will obtain a sponsor's consent before providing confidential 
commercial information to a foreign government or to an international 
organization. One comment would amend Sec. 20.89(d)(1)(ii) to require 
written confidentiality agreements from international organizations and 
individuals in the organization who are to receive confidential 
commercial information and to require consent from sponsors.
    FDA reiterates that neither the proposed rule nor this final rule 
changes the requirements for written statements, written commitments, 
and sponsor consent for exchanges involving confidential commercial 
information. The requirements for disclosures of confidential 
commercial information are found at Sec. 20.89(c). The elimination of 
the written statement and written commitment requirement applies solely 
to exchanges involving nonpublic, predecisional documents under 
Sec. 20.89(d). As stated earlier, nonpublic, predecisional documents 
are prepared by FDA and normally do not contain any confidential 
commercial information.
    Thus, FDA declines to amend Sec. 20.89(d)(1)(i) as suggested by the 
comment because that paragraph pertains to exchanges of nonpublic, 
predecisional information.
    7. One comment would amend the rule to require a sponsor's consent 
for all disclosures of confidential commercial information to 
international organizations. The comment stated that FDA has no 
obligation to balance the public interest against a sponsor's interest 
in maintaining the confidentiality of information. The comment added 
that if FDA engages in such balancing of interests, it should provide 
written notice to the sponsor describing the confidential commercial 
information that has been provided to an international organization 
and, furthermore, that only the Commissioner of Food and Drugs (the 
Commissioner) should be authorized to make such disclosures to an 
international organization.
    Similarly, another comment stated that if FDA discloses 
confidential commercial information to an international organization, 
without a sponsor's consent, under the ``public interest'' at 
Sec. 20.89(c)(1)(ii), the agency should specify the public health 
circumstances justifying the disclosure.
    When FDA first issued the final rule codifying Sec. 20.89(c)(1)(ii) 
in 1993, it explained that there are situations in which it might be 
inappropriate to seek a sponsor's consent to a disclosure of 
confidential commercial information. The preamble to the 1993 final 
rule gave examples of possible situations in which a sponsor may have 
engaged in deliberate fraud or misrepresentation, or situations in 
which FDA might wish to share confidential commercial information 
obtained through an FDA investigation for a foreign government's use in 
its own regulatory efforts (see 58 FR 61598 at 61601 (November 19, 
1993)). FDA stated that these types of disclosures to foreign 
government counterparts ``may facilitate efforts to keep unapproved, 
adulterated, counterfeit, or misbranded products off world markets as 
well as American markets.'' This rationale still applies, and, 
therefore, FDA declines to amend the rule to require a sponsor's 
consent in all disclosures of confidential commercial information.
    As for the comments asking FDA to provide written notice to a 
manufacturer or to explain the public interest reasons behind a 
disclosure, FDA responded to similar comments in 1995 when it issued a 
final rule amending Secs. 20.88 and 20.89. Those comments in 1995 
suggested that FDA provide summaries of the information disclosed to 
foreign governments. In the preamble to the 1995 final rule, FDA stated 
that such summaries would be inappropriate or unnecessary (see 60 FR 
63372 at 66379). FDA explained that if a foreign government were 
considering whether to take action against a particular product, 
requiring FDA to provide a summary to the product's manufacturer would 
alert the manufacturer to a potential enforcement action and would, 
therefore, be inappropriate. If FDA were helping a foreign government 
identify fraudulent goods and provided confidential commercial 
information to help distinguish legitimate products from fraudulent 
ones, providing a summary to the manufacturer would be unnecessary 
because the manufacturer would already know the information that was 
the basis of the summary.
    FDA's rationale for not providing summaries also applies to the 
written notice and identification of the public health interests sought 
by the comments. If FDA were providing confidential commercial 
information to a foreign government to assist that government in a 
decision whether to take action against a particular product, providing 
a written notice to the product's manufacturer would alert the 
manufacturer to a potential enforcement action and might undermine or 
compromise the enforcement action. Similarly, stating that the public 
health interest involved an enforcement action would alert the 
product's manufacturer and might undermine or compromise any 
enforcement action. Thus, FDA

[[Page 11886]]

declines to revise the rule to require the agency to provide a written 
notice to a sponsor or to specify the public health interest reasons 
behind a disclosure.
    As for the comment asking that the Commissioner be the only person 
authorized to disclose confidential commercial information to an 
international organization, FDA declines to amend the rule to impose 
such a limitation. The authority to disclose confidential commercial 
information under Sec. 20.89 was delegated to the Associate 
Commissioner for Regulatory Affairs and various office and center 
officials (such as center directors and deputy directors) in 1994. 
Similar authority, for disclosures of confidential commercial 
information under Sec. 20.88, was delegated in 1997. These delegations 
of authority have made exchanges of confidential commercial information 
with State and foreign government officials more efficient. Given the 
agency's experience with these previous delegations of authority, the 
agency sees no reason to limit or otherwise restrict the authority to 
disclose such information to international organizations.
    8. One comment asked FDA to ``set out the means by which it can and 
will enforce any confidentiality agreement with an international 
organization.'' The comment said this information would be relevant to 
a sponsor's willingness to consent to releasing confidential commercial 
information to an international organization.
    In previous rulemakings, FDA has stated that it would discontinue 
cooperative ventures with any State or foreign government that failed 
to honor its written commitment to protect the confidential commercial 
information provided by FDA (see 60 FR 63372 at 63377). The agency will 
extend this policy to cover international organizations receiving 
information from FDA.
    The agency also notes that international organizations might cease 
to enjoy immunity and might face serious consequences if a person in 
the international organization made an unauthorized disclosure of 
confidential commercial information or if the international 
organization violated its written commitment. Under U.S. law, the 
President may, by Executive Order, designate certain international 
organizations as being entitled to the privileges, exemptions, and 
immunities that are normally afforded to foreign governments (see 22 
U.S.C. 288). These privileges, exemptions, and immunities are 
significant, and include treatment comparable to that enjoyed by 
foreign governments as regards, for example, immunity from suit and 
judicial process (22 U.S.C. 288a), customs duties and taxes relating to 
importation (id.), and property taxes imposed by Congress (22 U.S.C. 
288c). The President may revoke the designation of an international 
organization ``if in his judgment such action should be justified by 
reason of the abuse by an international organization or its officers 
and employees of the privileges, exemptions, and immunities provided * 
* *'' (id.) Thus, an international organization that failed to protect 
confidential commercial information would risk losing some or all of 
these significant privileges, exemptions, and immunities.
    One should note that several international organizations that might 
conceivably request confidential commercial information from FDA are 
designated as international organizations under 22 U.S.C. 288. These 
include the Food and Agriculture Organization, PAHO (or PAHO/PASB (Pan 
American Sanitary Bureau)), and WHO.
    Additionally, for officers and employees of international 
organizations, the immunity extends only to ``acts performed by them in 
their official capacity and falling within their functions * * * except 
insofar as such immunity may be waived by the foreign Government or 
international organization concerned'' (see 22 U.S.C. 288d(b)). An 
international organization official or employee who deliberately 
violates the organization's written commitment to FDA to protect 
confidential commercial information might not be considered to be 
acting within his or her ``official capacity'' or within his or her 
functions and, as a result, would not enjoy immunity from suit. For 
example, in United States v. Enger, 472 F. Supp. 490, 502 (D. N.J. 
1978), a Federal district court rejected several defendants' claim that 
they could not be prosecuted for espionage because they were United 
Nations employees. The court stated, ``Espionage, the crime with which 
the defendants are charged, is, of course, not one of the functions 
performed in the defendants' official capacities with the United 
Nations'' (id.) (see also Rendall-Speranza v. Nassim, 107 F.3d 913, 920 
(D.C. Cir. 1997) (plaintiff's failure to question a court's acceptance 
of the defendant organization's admission that its employee's act of 
battery was within the scope of his employment meant that the employee 
was immune from suit for battery under 22 U.S.C. 288d(b))).
    International organizations that are not designated by an Executive 
Order do not enjoy the privileges, exemptions, and immunities as 
provided in 22 U.S.C. 288 through 288d. As a result, they, their 
officials, and their employees might not be immune from suit. In the 
event of an unauthorized disclosure of confidential commercial 
information, a sponsor would be able to pursue legal action against the 
undesignated international organization.
    9. One comment stated that if an international organization 
requested confidential commercial information on an alleged health 
hazard, but the relevant foreign government had not asked for such 
information, FDA should consult the sponsor and allow the sponsor to 
handle any disclosure issues directly with the international 
organization. The comment added that if FDA were dissatisfied with the 
outcome between the sponsor and the international organization, FDA 
could release the data if it determined that a health hazard exists. 
The comment also stated that FDA should first determine that the 
international organization has responsibilities that require it to have 
the type of confidential commercial information requested.
    FDA reiterates that, for almost all disclosures involving 
confidential commercial information to a State government, foreign 
government, or international organization, the sponsor's consent to 
disclosure will be obtained. However, the agency does not object to a 
sponsor's making individual disclosure arrangements with an 
international organization and agrees with the comment that, in some 
cases, the comment's approach would be practical.
    Furthermore, disclosures under Sec. 20.89 have been made on a case-
by-case basis, and FDA will consider the foreign government's or 
international organization's need for the requested information when 
deciding whether to disclose information. The regulation is intended to 
facilitate communication with foreign governments and international 
organizations; it does not compel the agency to disclose confidential 
commercial information to a foreign government or to an international 
organization. Thus, if an international organization requests 
confidential commercial information without any apparent reason, FDA 
may decline to grant the request.
3. Editorial Changes
    Proposed Sec. 20.89(e) stated, in part, that for exchanges of 
confidential commercial information with an official of an 
international organization, the written statement and commitment 
``shall be provided by both the

[[Page 11887]]

organization and the individual.'' FDA, on its own initiative, is 
replacing the words ``provided by'' with ``provided on behalf of'' to 
make the sentence more accurate because, in a literal sense, a document 
cannot be ``provided by'' an inanimate body such as an international 
organization. Instead, persons provide the required statements and 
commitments ``on behalf of'' the organization.
    Additionally, Secs. 20.88(e) and 20.89(d) authorize the Deputy 
Commissioner for Policy to authorize the disclosure of nonpublic, 
predecisional documents to State and foreign government officials. 
Because FDA has reorganized its offices, the functions that were 
handled by the then-Deputy Commissioner for Policy are now assigned to 
the Senior Associate Commissioner for Policy, Planning, and 
Legislation, and international policy functions that were in the then-
Office of Policy are now assigned to the Office of International and 
Constituent Relations. Consequently, FDA is revising Secs. 20.88(e) and 
20.89(d) to refer to the Senior Associate Commissioner for Policy, 
Planning, and Legislation and to the Deputy Commissioner for 
International and Constituent Relations.

III. Environmental Impact

    The agency has determined under 21 CFR 25.30(h) that this action is 
of a type that does not individually or cumulatively have a significant 
effect on the human environment. Therefore, neither an environmental 
assessment nor an environmental impact statement is required.

IV. 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 federalism implications as defined 
in the order and, consequently, a Federalism summary impact statement 
is not required.

V. Analysis of Impacts

    FDA has examined the impacts of this final rule under Executive 
Order 12866, 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 new benefits (including 
potential economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity). The agency believes this 
final rule is consistent with the regulatory philosophy and the 
principles identified in the Executive Order. In addition, this final 
rule is not an economically significant regulatory action as defined in 
the Executive Order.
    The Regulatory Flexibility Act requires agencies to analyze 
regulatory options that would minimize any significant impact of a rule 
on small entities. The final rule will have no significant economic 
impact on a substantial number of small entities under the Regulatory 
Flexibility Act because it regulates only conduct of FDA, State and 
foreign governments, and international organizations, and not small 
entities under the Regulatory Flexibility Act. The final rule provides 
for FDA disclosure of confidential commercial information to 
international organizations subject to the same safeguards against 
public disclosure of that information that apply in the case of 
disclosures to foreign government agencies. These disclosures would 
likely facilitate marketing review and approval of various FDA-
regulated products in foreign countries, and disclosures would almost 
always occur only with the consent of the business that generated the 
confidential commercial information. The final rule also provides for 
FDA disclosure of nonpublic, predecisional documents and other 
nonpublic information created by FDA to State governments, foreign 
governments, and international organizations without the need to obtain 
written assurances. These beneficial effects outweigh any possible 
adverse impact. Thus, the agency certifies that this rule will not have 
a significant economic impact on a substantial number of small 
entities, and, under the Regulatory Flexibility Act, no further 
analysis is required.
    The Unfunded Mandates Reform Act requires that agencies prepare an 
assessment of anticipated costs and benefits before proposing any rule 
that may result in an expenditure in any one year by State, local, and 
tribal governments, in the aggregate, or by the private sector of $100 
million (adjusted annually for inflation). This rule does not impose 
any mandates on State, local, or tribal governments, nor is it a 
significant regulatory action under the Unfunded Mandates Reform Act.

VI. Paperwork Reduction Act of 1995

    This final rule contains no collections of information. Therefore, 
clearance by the Office of Management and Budget under the Paperwork 
Reduction Act of 1995 is not required.

List of Subjects in 21 CFR Part 20

    Confidential business information, Courts, Freedom of information, 
Government employees.
    Therefore, under the Federal Food, Drug, and Cosmetic Act and under 
authority delegated to the Commissioner of Food and Drugs, 21 CFR part 
20 is amended as follows:

PART 20--PUBLIC INFORMATION

    1. The authority citation for 21 CFR part 20 continues to read as 
follows:

    Authority: 5 U.S.C. 552; 18 U.S.C. 1905; 19 U.S.C. 2531-2582; 21 
U.S.C. 321-393, 1401-1403; 42 U.S.C. 241, 242, 242a, 242l, 242n, 
243, 262, 263, 263b-263n, 264, 265, 300u-300u-5, 300aa-1.

    2. Section 20.88 is amended by revising paragraph (e)(1) to read as 
follows:


Sec. 20.88  Communications with State and local government officials.

* * * * *
    (e)(1) The Senior Associate Commissioner for Policy, Planning, and 
Legislation, or the Deputy Commissioner for International and 
Constituent Relations, or any other officer or employee of the Food and 
Drug Administration whom the Senior Associate Commissioner for Policy, 
Planning, and Legislation or the Deputy Commissioner for International 
and Constituent Relations may designate to act on their behalf for the 
purpose, may authorize the disclosure to, or receipt from, an official 
of a State government agency of nonpublic, predecisional documents 
concerning the Food and Drug Administration's or the other government 
agency's regulations or other regulatory requirements, or other 
nonpublic information relevant to either agency's activities, as part 
of efforts to improve Federal-State uniformity, cooperative regulatory 
activities, or implementation of Federal-State agreements, provided 
that:
    (i) The State government agency has the authority to protect such 
nonpublic documents from public disclosure and will not disclose any 
such documents provided without the written confirmation by the Food 
and Drug Administration that the documents no longer have nonpublic 
status; and
    (ii) The Senior Associate Commissioner for Policy, Planning, and 
Legislation or the Deputy Commissioner for International and 
Constituent Relations or their designee makes the determination that 
the exchange is reasonably necessary to improve Federal-State 
uniformity, cooperative

[[Page 11888]]

regulatory activities, or implementation of Federal-State agreements.
* * * * *

    3. Section 20.89 is amended by revising paragraph (d)(1); by 
removing paragraph (d)(3); and by adding paragraph (e) to read as 
follows:


Sec. 20.89  Communications with foreign government officials.

* * * * *
    (d)(1) The Senior Associate Commissioner for Policy, Planning, and 
Legislation, or the Deputy Commissioner for International and 
Constituent Relations, or any other officer or employee of the Food and 
Drug Administration whom the Senior Associate Commissioner for Policy, 
Planning, and Legislation or the Deputy Commissioner for International 
and Constituent Relations may designate to act on their behalf for the 
purpose, may authorize the disclosure to, or receipt from, an official 
of a foreign government agency of nonpublic, predecisional documents 
concerning the Food and Drug Administration's or the other government 
agency's regulations or other regulatory requirements, or other 
nonpublic information relevant to either agency's activities, as part 
of cooperative efforts to facilitate global harmonization of regulatory 
requirements, cooperative regulatory activities, or implementation of 
international agreements, provided that:
    (i) The foreign government agency has the authority to protect such 
nonpublic documents from public disclosure and will not disclose any 
such documents provided without the written confirmation by the Food 
and Drug Administration that the documents no longer have nonpublic 
status; and
    (ii) The Senior Associate Commissioner for Policy, Planning, and 
Legislation or the Deputy Commissioner for International and 
Constituent Relations or their designee makes the determination that 
the exchange is reasonably necessary to facilitate global harmonization 
of regulatory requirements, cooperative regulatory activities, or 
implementation of international agreements.
* * * * *
    (e) For purposes of this section, the term ``official of a foreign 
government agency'' includes, but is not limited to, employees (whether 
temporary or permanent) of and agents contracted by the foreign 
government, or by an international organization established by law, 
treaty, or other governmental action and having responsibility to 
facilitate global or regional harmonization of standards and 
requirements in FDA's areas of responsibility or to promote and 
coordinate public health efforts. For such officials, the statement and 
commitment required by paragraph (c)(1)(i) of this section shall be 
provided on behalf of both the organization and the individual.

    Dated: December 3, 1999.
Margaret M. Dotzel,
Acting Associate Commissioner for Policy.
[FR Doc. 00-5417 Filed 3-6-00; 8:45 am]
BILLING CODE 4160-01-F