[Federal Register Volume 68, Number 167 (Thursday, August 28, 2003)]
[Rules and Regulations]
[Pages 51693-51704]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-21980]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Part 101

[Docket No. 2003N-0346]


Food Labeling: Ingredient Labeling of Dietary Supplements That 
Contain Botanicals

AGENCY: Food and Drug Administration, HHS.

ACTION: Direct final rule.

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SUMMARY: The Food and Drug Administration (FDA) is amending its 
regulation on declaring botanical ingredients in dietary supplements to 
incorporate by reference the latest editions of two books. Currently, 
the regulation incorporates by reference Herbs of Commerce (1992) and 
the International Code of Botanical Nomenclature (Tokyo Code) 1994. FDA 
is replacing the references to these editions with the 2000 editions of 
the same books. This action is intended to provide industry with 
current and more comprehensive references to use in identifying on 
product labels the common or usual name of each botanical ingredient 
contained in dietary supplements. In addition, FDA is incorporating new 
statutory restrictions on the use of the word ``ginseng'' in dietary 
supplement labeling. Finally, FDA is making minor wording changes in 
its regulation on declaring botanical ingredients in dietary 
supplements. These changes are intended to improve the reader's 
understanding, consistent with the principles of plain English, or to 
be more technically accurate, consistent with internationally accepted 
botanical terminology. FDA is issuing a direct final rule for this 
action because FDA expects there will be no significant adverse 
comments on the rule. Elsewhere in this issue of the Federal Register, 
FDA is publishing a companion proposed rule through the usual notice-
and-comment rulemaking process. If FDA receives significant adverse 
comment on either rule, FDA intends to withdraw the direct final rule 
and proceed with the rulemaking. The companion proposed rule and direct 
final rule are substantively identical.

DATES:  This rule is effective January 1, 2006. Submit written or 
electronic comments on this direct final rule by November 12, 2003. If 
FDA receives no significant adverse comments within the specified 
comment period, the agency intends to publish a document in the Federal 
Register confirming the effective date of this direct final rule. If 
the agency receives any timely significant adverse comments, FDA 
intends to publish a document in the Federal Register withdrawing this 
direct final rule before its effective date. The Director of the Office 
of the Federal Register approves the incorporation by reference, in 
accordance with 5 U.S.C. 552(a) and 1 CFR part 51, of certain 
publications in 21 CFR 101.4(h) as of January 1, 2006.

ADDRESSES:  Submit written comments on this direct final rule to the 
Division of Dockets Management (HFA-305), Food and Drug Administration, 
5630 Fishers Lane, rm. 1061, Rockville, MD 20852. Submit electronic 
comments to http://www.fda.gov/dockets/ecomments.

FOR FURTHER INFORMATION CONTACT:  Victoria Lutwak, Office of 
Nutritional Products, Labeling, and Dietary Supplements, Center for 
Food Safety and Applied Nutrition (HFS-810), Food and Drug 
Administration, 5100 Paint Branch Pkwy., College Park, MD 20740, 301-
436-2375.

SUPPLEMENTARY INFORMATION:

[[Page 51694]]

I. Background

A. Rulemaking Process

    FDA has determined that the subject of this rulemaking is suitable 
for a direct final rule because it does not involve controversial 
regulatory changes and FDA does not anticipate receiving any 
significant adverse comments. This direct final rule has a companion 
proposed rule addressing the same topic published in the proposed rules 
section of this issue of the Federal Register. The direct final rule 
and its companion proposed rule are substantively identical. The 
proposed rule provides the procedural framework to finalize the rule in 
the event that the direct final rule is withdrawn because FDA receives 
significant adverse comment.
    A significant adverse comment is one that explains why the rule 
would be inappropriate, including challenges to the rule's underlying 
premise or approach, or why it would be ineffective or unacceptable 
without a change. In determining whether a significant adverse comment 
is sufficient to terminate a direct final rulemaking, FDA will consider 
whether the comment raises an issue serious enough to warrant a 
substantive response in a notice-and-comment process. Comments that are 
frivolous, insubstantial, or outside the scope of the rule will not be 
considered adverse under this procedure. A comment recommending 
additional changes in the rule will not be considered a significant 
adverse comment, unless the comment states why the rule would be 
ineffective without the recommended revision. In addition, if a 
significant adverse comment applies to an amendment, paragraph, or 
section of this rule and that provision can be severed from the 
remainder of the rule, FDA may adopt as final those provisions of the 
rule that are not the subject of a significant adverse comment.
    The comment periods for the direct final rule and its companion 
proposed rule run concurrently. We have identified and discussed the 
regulatory changes in the preambles to both rules. Any comments 
received under the direct final rule will be treated as comments 
regarding the proposed rule and vice versa. FDA is publishing this 
direct final rule because the rule does not contain controversial 
changes and FDA does not anticipate receiving significant adverse 
comments about it. If no significant adverse comments are received in 
response to either rule, FDA will take no further action on the 
proposed rule. Instead, after the comment period ends, FDA intends to 
publish a document in the Federal Register to confirm the January 1, 
2006, effective date of the direct final rule. This is the applicable 
uniform effective date for compliance with food labeling requirements 
published in the Federal Register (see the Federal Register of December 
31, 2002 (67 FR 79851), designating January 1, 2006, as the effective 
date for food labeling regulations issued between January 1, 2003, and 
December 31, 2004). However, if FDA receives significant adverse 
comment on either rule, FDA will withdraw the direct final rule and 
will proceed to respond to all comments received on both rules under 
the companion proposed rule using the usual notice-and-comment 
procedures. A full description of FDA's policy on direct final rule 
procedures appears in a guidance document published in the Federal 
Register on November 21, 1997 (62 FR 62466).

B. Current Regulatory and Legislative Requirements Related to Direct 
Final Rule Amendments

    FDA issued a final rule entitled ``Food Labeling: Statement of 
Identity, Nutrition Labeling and Ingredient Labeling of Dietary 
Supplements'' in the Federal Register on September 23, 1997 (62 FR 
49826). This rule incorporated by reference under Sec.  101.4(h) (21 
CFR 101.4(h)) the two books entitled Herbs of Commerce (1992) (Ref. 1) 
and International Code of Botanical Nomenclature (Tokyo Code) 1994 
(Ref. 2) for industry's use in identifying on product labels the common 
or usual name of each botanical ingredient contained in dietary 
supplements. Both books were incorporated by reference in accordance 
with 5 U.S.C. 552(a) and 1 CFR part 51.
    Section 101.4(h) currently requires that a dietary supplement that 
contains one or more botanical ingredients (including fungi and algae) 
state the common or usual name for each of these ingredients on the 
label. This common or usual name must be consistent with the 
``standardized common name'' listed in Herbs of Commerce (1992) for the 
corresponding plant from which the ingredient is derived. Therefore, 
the ``standardized common name'' of each botanical used as an 
ingredient of a dietary supplement is its common or usual name for 
labeling purposes.
    Current Sec.  101.4(h)(2) also requires that if no standardized 
common name for a particular botanical ingredient is listed in Herbs of 
Commerce (1992), the label must state the Latin binomial name of the 
plant from which that ingredient is derived. All names in Latin 
binomial form must be stated on the label in accordance with 
internationally accepted rules on nomenclature, such as those found in 
the International Code of Botanical Nomenclature (Tokyo Code) 1994. 
Further, the name in Latin binomial form must include the designation 
of the author or authors who published the Latin name [hereafter 
referred to as author citation] when a positive identification of the 
dietary ingredient cannot be made without identifying the author(s).
    Since 1997, both of the books incorporated by reference for use by 
industry in the labeling of dietary supplements that contain botanical 
ingredients have been updated and now the 2000 editions supersede the 
earlier ones. Herbs of Commerce, 2nd Edition (2000) (Ref. 3) added 
standardized common names for approximately 1,500 more botanicals than 
were included in the earlier edition, and changed the standardized 
common names for approximately 140 botanicals listed in the earlier 
edition. The International Code of Botanical Nomenclature (Saint Louis 
Code) 2000 (Ref. 4) reflects the International Botanical Congress's 
latest decisions on the rules for the scientific naming of plants. 
Botanical nomenclature is an evolving science that is influenced by new 
discoveries and the correction of past misidentifications of plants.
    Further, in 2002, Congress passed and the President signed into law 
the Farm Security and Rural Investment Act of 2002 (Public Law 107-171) 
[hereafter referred to as the Farm Bill]. Section 10806 of the Farm 
Bill amended the misbranding provisions in section 403 of the Federal 
Food, Drug, and Cosmetic Act (the act ) (21 U.S.C. 343) by adding a new 
paragraph (u), which states that a dietary supplement is misbranded 
``[i]f it purports to be or is represented as ginseng, unless it is an 
herb or herbal ingredient derived from a plant classified within the 
genus Panax.'' Section 10806(b)(1)(A) of the Farm Bill states that 
``the term `ginseng' may only be considered to be a common or usual 
name (or part thereof) for any herb or herbal ingredient derived from a 
plant classified within the genus Panax.'' Section 10806(b)(1)(B) 
further provides that ``only labeling or advertising for herbs or 
herbal ingredients classified within that genus may include the term 
`ginseng.'''
    The Farm Bill requirements about use of the term ``ginseng'' are in 
effect today because the law is self-executing. Congress did not direct 
FDA to issue regulations in order to implement these new requirements; 
therefore, industry must comply with them currently.

[[Page 51695]]

C. Updated Books To Be Incorporated by Reference

    Herbs of Commerce, 2nd Edition (2000) establishes a ``standardized 
common name,'' expressed primarily in English, for each plant used in 
commerce, including fungi and algae. However, in a few instances, the 
standardized common name is expressed in another language or is the 
same as the plant's Latin binomial name (i.e., genus and species) when 
that name has become common. For example, the Spanish word ``mate'' is 
the standardized common name for the plant ``Ilex paraguariensis A. 
St.-Hil.,'' and the Latin binomial name ``Phyllanthus amarus'' is the 
standardized common name for the plant ``Phyllanthus amarus Schumach.'' 
The standardized common name generally applies to the whole plant, but 
in some instances it applies to a plant part. For example, the 
standardized common names ``mace'' and ``nutmeg'' pertain specifically 
to the plant parts ``aril'' and ``seed,'' respectively, of the same 
plant ``Myristica fragrans Houtt.''
    All standardized common names listed in Herbs of Commerce, 2nd 
Edition (2000) are printed in boldface letters. In this book under 
``Section One: Latin Binomials,'' each plant name is listed first 
alphabetically by its Latin binomial name. The plant's corresponding 
standardized common name is stated after the acronym ``SCN'' on the 
first indented line of text underneath its Latin binomial name. Under 
``Section Two: Standardized Common Names,'' each plant name is listed 
first alphabetically by its standardized common name. The plant's 
corresponding Latin binomial name is stated on the first indented line 
of text underneath its standardized common name.
    In addition to the standardized common name, Herbs of Commerce, 2nd 
Edition (2000) identifies the currently recognized Latin binomial name 
and four other categories of common names for each of the plants 
listed, as applicable. These other categories are:
    [sbull] ``botanical synonym,''
    [sbull] ``Ayurvedic name,''
    [sbull] ``pinyin name,'' and
    [sbull] ``other common name.''
    The botanical synonym, if any, represents one or more examples of 
other Latin binomial names that have been broadly used for the plant in 
the past. The Ayurvedic name, if any, generally represents the plant's 
Sanskrit name; however, the Hindi name may be cited if the plant is 
primarily known by it instead. The pinyin name, if any, may be one or 
more of the plant's Chinese common names. Other common names, if any, 
represent any additional names frequently used for the plant.
    The ``standardized common name'' is different and distinct from all 
of the other categories of common names for a plant. There is only one 
standardized common name that is selected for each plant listed in 
Herbs of Commerce, 2nd Edition (2000); however, there may be several 
names cited within one or more of the other categories of common names 
that are associated with the same plant.
    The International Code of Botanical Nomenclature (Saint Louis Code) 
2000 (the Code) establishes the current internationally accepted rules 
that govern the scientific naming of plants, including fungi and algae. 
The scientific name, which identifies the plant's genus and species, is 
expressed in Latin and applies to the whole plant without exception. 
The Latin binomial name of a plant is followed by the name(s) of the 
person(s) who described and published the plant name in accordance with 
the Code's guidelines. The Code refers to such notation about authors 
as an ``author citation.''

II. Direct Final Rule

    FDA is revising Sec.  101.4(h) to substitute Herbs of Commerce, 2nd 
Edition (2000) for its 1992 edition, and the International Code of 
Botanical Nomenclature (Saint Louis Code) 2000 for its 1994 edition, as 
books incorporated by reference. Requirements on how these references 
are to be used for dietary supplement labeling purposes remain the same 
and are not affected by this direct final rule, with one minor 
exception.
    Currently, Sec.  101.4(h)(2) uses the phrase ``such as'' when 
referring to the International Code of Botanical Nomenclature as a 
reference that industry may use to ensure that any Latin binomial name 
of a botanical ingredient listed on the label of a dietary supplement 
conforms to the internationally accepted rules of botanical 
nomenclature. As presently worded, the regulation could be interpreted 
to allow other references to be consulted for this purpose. We are 
revising the language in the Code of Federal Regulations (CFR) to make 
the International Code of Botanical Nomenclature the only reference 
that may be used on the rules for determining and formatting the Latin 
binomial name of a botanical ingredient for dietary supplement labeling 
purposes. This book is internationally recognized by botany experts 
from nations around the world as the foremost authoritative reference 
on botanical nomenclature. We are not aware of any comparable reference 
that comprehensively addresses the rules on the scientific naming of 
plants and has as broad international support. The International Code 
of Botanical Nomenclature is regulated by the Nomenclature Section of 
an International Botanical Congress. This group meets under the 
auspices of the International Union of Biological Sciences, of which 
the U.S. National Research Council/National Academy of Sciences is a 
member. The XVI International Botanical Congress brought together more 
than 4,000 scientists from more than 100 countries at its most recent 
meeting held in Saint Louis, MO in 1999 when the International Code of 
Botanical Nomenclature (Saint Louis Code) 2000 was voted on and 
adopted. Therefore, to be in harmony with this international 
cooperation and to be consistent with FDA's science-based philosophy, 
this direct final rule is incorporating by reference the International 
Code of Botanical Nomenclature (Saint Louis Code) 2000 as the one that 
industry must follow on the rules to determine and format the Latin 
binomial names of any botanical ingredients stated on dietary 
supplement labels.
    Some dietary supplements may contain a botanical ingredient that is 
not listed in the 2000 edition of Herbs of Commerce and therefore does 
not have a standardized common name. Like the former regulation, in 
such cases the direct final rule is requiring that the common or usual 
name for that botanical ingredient listed on the label be accompanied, 
in parentheses, by the Latin binomial name of the plant from which it 
is derived. When needed to positively identify the botanical 
ingredient, the direct final rule is continuing to require that the 
Latin binomial name also must include the author citation, stated in 
accordance with the internationally accepted rules on botanical 
nomenclature found in the International Code of Botanical Nomenclature 
(Saint Louis Code) 2000.
    FDA is aware that there may be instances when a botanical 
ingredient belongs to a subspecies or variety of a species that is not 
listed in the 2000 edition of Herbs of Commerce. In those cases, the 
Latin binomial name and author citation alone will not identify the 
subspecies or variety of that species. Although not a requirement, FDA 
encourages industry to voluntarily state the following on dietary 
supplement labels directly after the Latin binomial name when needed to 
positively identify a botanical ingredient below the species level: The 
name of any

[[Page 51696]]

applicable subspecies, variety, or other subdivision and its 
corresponding author citation, stated in accordance with the 
internationally accepted rules on botanical nomenclature found in the 
International Code of Botanical Nomenclature (Saint Louis Code) 2000.
    FDA is further revising Sec.  101.4(h) to incorporate statutory 
restrictions on the use of the term ``ginseng'' that were imposed by 
section 10806 of the Farm Bill. Specifically, the direct final rule 
includes the following statement in Sec.  101.4(h): ``The use of the 
term `ginseng' as a common or usual name (or part thereof) for any 
dietary supplement or dietary ingredient is limited to those that are 
derived from a plant classified within the genus `Panax.'''
    Finally, FDA is making minor wording changes in Sec.  101.4(h) to 
improve the reader's understanding, consistent with the principles of 
plain English, or to improve technical accuracy, consistent with 
internationally accepted botanical terminology. Examples of changes we 
are making to improve the reader's understanding are using simpler 
language throughout, substituting the word ``must'' for ``shall,'' and 
dividing very long sentences into shorter ones. To be more technically 
accurate, the direct final rule replaces the current wording under 
Sec.  101.4(h)(2) that refers to the ``designation of the author or 
author(s) who published the Latin name'' with the term ``author 
citation'' to refer to the ``name(s) of the person(s) who described and 
published the Latin binomial name in accordance with the 
internationally accepted rules on botanical nomenclature found in the 
International Code of Botanical Nomenclature (Saint Louis Code) 2000.'' 
For technical clarity, the direct final rule also adds the notation 
``(i.e., genus and species)'' after the first reference to the term 
``Latin binomial name'' under Sec.  101.4(h).

III. Use of the Incorporated References and Implementation of Pertinent 
Farm Bill Provisions

    Over the years, FDA has received several inquiries from 
representatives of the dietary supplement industry about the use of 
Herbs of Commerce and the International Code of Botanical Nomenclature. 
These books are references for industry to use in determining the 
common or usual name of each botanical ingredient or to consult on the 
rules for determining and formatting any required Latin binomial names 
corresponding to the botanical ingredients declared on dietary 
supplement labels. The act of ``incorporation by reference,'' however, 
does not imply that all of the botanicals that have standardized common 
names listed in Herbs of Commerce or that follow the scientific naming 
rules found in the International Code of Botanical Nomenclature are 
safe for consumption as dietary supplements or other foods by man or 
other animals. Citation of these books in the CFR is specific and 
limited to the sole purpose of identifying authoritative references for 
industry to use to determine the correct plant nomenclature. Neither 
reference addresses the safety or uses of plants.
    This direct final rule focuses only on the naming of botanical 
ingredients of dietary supplements for labeling purposes. It is the 
responsibility of manufacturers and distributors to ensure that the 
particular botanicals they use as ingredients of dietary supplements 
are safe for human consumption, do not contain contaminants, are 
properly identified on the label, are legally marketed, and conform to 
all governing regulations.
    In addition, Herbs of Commerce, 2nd Edition (2000) does not 
represent an authoritative compilation of botanical dietary ingredients 
that were marketed in the United States before October 15, 1994 (i.e., 
botanicals that are not new dietary ingredients under section 413(c) of 
the act (21 U.S.C. 350b(c))). The book's disclaimer explains that the 
publisher did not verify whether or not the companies that submitted 
botanical information for inclusion in this reference had valid 
documentation that supported such marketing. The book's disclaimer 
further states: ``The listing of a particular species of plant in this 
work is not, therefore, in and of itself, evidence that such species 
was marketed in the United States prior to October 15, 1994'' (Ref. 3, 
page xx). This direct final rule does not confer FDA endorsement of 
Herbs of Commerce, 2nd Edition (2000) for any other purpose than to 
serve as a reference on the common or usual names of botanical 
ingredients contained in dietary supplements.
    In most cases, Herbs of Commerce, 2nd Edition (2000) assigns a 
unique standardized common name to each plant. However, the book 
indicates that the same standardized common name is given to more than 
one plant when the plants are used interchangeably in commerce. There 
are over 100 instances in Herbs of Commerce, 2nd Edition (2000) where 
the same standardized common name applies to two or more different 
species, subspecies, or varieties of the same genus of plant.
    In other cases in Herbs of Commerce, 2nd Edition (2000), a name 
listed under one of the categories of common names (e.g., Pinyin names) 
for one botanical may be shared by another botanical from a different 
genus of plants. For example, the botanical Ammi majus L. has the 
standardized common name bishop's weed, whereas bishop's weed is also 
listed as the other common name for the botanical Aegopodium podagraria 
L. that has the standardized common name ash weed.
    Confusion and mistakes in the identity of botanicals can be caused 
when the ingredients have the same or similar common names. Therefore, 
it is important that manufacturers know a botanical's true identity, 
including its Latin binomial name with author citation and its 
biological and chemical properties, before substituting one botanical 
for another as an ingredient of a dietary supplement. It is the 
responsibility of manufacturers and distributors to ensure that any 
botanical used as an ingredient of a dietary supplement or other food 
marketed in the United States is safe for consumption and complies with 
all applicable requirements of the act.
    The ``standardized common names'' of botanicals listed in both the 
1992 and 2000 editions of Herbs of Commerce are consistent with the 
Farm Bill's definition of the term ``ginseng.'' However, both editions 
note that the term ``ginseng'' has been used as part of ``other common 
names'' associated with botanicals from genera other than Panax, 
including blue ginseng, lesser ginseng, prince ginseng, and Siberian 
ginseng. We remind industry that names that include the term 
``ginseng'' may be used as the common or usual name for a botanical 
ingredient only if the botanical is derived from the plant genus 
``Panax.''

IV. Environmental Impact

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

V. Regulatory Impact Analysis

    FDA has examined the economic implications of this direct final 
rule as required by Executive Order 12866. 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). The

[[Page 51697]]

Executive order classifies a regulatory action as significant if it 
meets any one of a number of specified conditions, including: having an 
annual effect on the economy of $100 million, adversely affecting a 
sector of the economy in a material way, adversely affecting 
competition, or adversely affecting jobs. The Executive order also 
classifies a regulatory action as significant if it raises novel legal 
or policy issues. We have determined that this direct final rule is not 
a significant regulatory action as defined by the Executive order.

A. Regulatory Options

    We have identified the following major regulatory alternatives or 
options: (1) Take no action, (2) take the direct final rule action, and 
(3) take an alternative action. These options are explained in the next 
section of this document.
1. Option One: Take No Action
    The incorporation by reference citations under Sec.  101.4(h) would 
remain unchanged. Under this option, the following requirements and 
provisos apply:
    [sbull] The label of a dietary supplement containing a botanical 
ingredient must use the ``standardized common name'' for that botanical 
ingredient listed in the 1992 edition of Herbs of Commerce.
    [sbull] For a botanical ingredient not listed in the 1992 edition 
of Herbs of Commerce, the label could use any appropriately descriptive 
name as the common or usual name, with the following exception. In 
accordance with section 10806 of the Farm Bill, the use of the term 
``ginseng'' as a common or usual name (or part thereof) for any dietary 
supplement or dietary ingredient is limited to those that are derived 
from a plant classified within the genus ``Panax.''
    [sbull] Any common or usual name other than the ``standardized 
common name'' for a botanical ingredient may be used only if the 
botanical ingredient is not listed in Herbs of Commerce (1992), and 
must be accompanied by the Latin binomial name of the plant from which 
it is derived.
    [sbull] The Latin binomial name must be stated in accordance with 
the internationally accepted rules on botanical nomenclature, such as 
those found in the International Code of Botanical Nomenclature (Tokyo 
Code) 1994.
    [sbull] The Latin binomial name of a botanical ingredient also must 
include the designation of the author or authors who published the 
Latin name, when a positive identification of the botanical cannot be 
made in its absence.
2. Option Two: Take the Direct Final Rule Action
    The direct final rule option would update the incorporation by 
reference citations under Sec.  101.4(h). Under this option, the 
following requirements and provisos apply:
    [sbull] The label of a dietary supplement containing a botanical 
ingredient must use the ``standardized common name'' for that botanical 
ingredient listed in the 2000 edition of Herbs of Commerce.
    [sbull] For a botanical ingredient not listed in the 2000 edition 
of Herbs of Commerce, the label could use any appropriately descriptive 
name as the common or usual name, with the following exception. As in 
Option One, in accordance with section 10806 of the Farm Bill, the use 
of the term ``ginseng'' as a common or usual name (or part thereof) for 
any dietary supplement or dietary ingredient is limited to those that 
are derived from a plant classified within the genus ``Panax.''
    [sbull] Any common or usual name other than the ``standardized 
common name'' for a botanical ingredient may be used only if the 
botanical ingredient is not listed in Herbs of Commerce (2000), and 
must be accompanied by the Latin binomial name of the plant from which 
it is derived.
    [sbull] The Latin binomial name must be stated in accordance with 
the internationally accepted rules on botanical nomenclature found in 
the International Code of Botanical Nomenclature (Saint Louis Code) 
2000.
    [sbull] When needed to positively identify the botanical 
ingredient, the Latin binomial name also must include the author 
citation (i.e., name(s) of the person(s) who described and published 
the Latin binomial name in accordance with the internationally accepted 
rules on botanical nomenclature found in the International Code of 
Botanical Nomenclature (Saint Louis Code), 2000).
3. Option Three: Take an Alternative Action
    This option is similar to the direct final rule option. We would 
still update the incorporation by reference citations under Sec.  
101.4(h), but firms would have slightly more flexibility when labeling 
supplements containing a botanical ingredient. Under this option, the 
following requirements and provisos apply:
    [sbull] As in Option Two, if the ``standardized common name'' for a 
botanical ingredient has changed from the 1992 to the 2000 edition of 
Herbs of Commerce, firms must use the revised ``standardized common 
name'' listed in the 2000 edition of Herbs of Commerce.
    [sbull] If a botanical ingredient listed in the 2000 edition of 
Herbs of Commerce was not previously listed in the 1992 edition of that 
reference, firms could elect to use any of the names (i.e., botanical 
synonym, Ayurvedic name, pinyin name, or other common name) listed for 
that botanical in the 2000 edition as the common or usual name, with 
the following exception. As in Options One and Two, in accordance with 
section 10806 of the Farm Bill, the use of the term ``ginseng'' as a 
common or usual name (or part thereof) for a dietary supplement or 
dietary ingredient is limited to those that are derived from a plant 
classified within the genus ``Panax.''
    [sbull] Similar to Options One and Two, if the botanical ingredient 
is not listed in either the 1992 or 2000 edition of Herbs of Commerce, 
firms could use any appropriately descriptive name as the common or 
usual name for that ingredient with the following exception. In 
accordance with section 10806 of the Farm Bill, the use of the term 
``ginseng'' as a common or usual name (or part thereof) for a dietary 
supplement or dietary ingredient is limited to those that are derived 
from a plant classified within the genus ``Panax.''
    [sbull] As in Option Two, any common or usual name other than the 
``standardized common name'' for a botanical ingredient may be used 
only if the botanical ingredient is not listed in Herbs of Commerce 
(2000), and must be accompanied by the Latin binomial name of the plant 
from which it is derived.
    [sbull] As in Option Two, the Latin binomial name must be stated in 
accordance with the internationally accepted rules on botanical 
nomenclature found in the International Code of Botanical Nomenclature 
(Saint Louis Code) 2000.
    [sbull] As in Option Two, when needed to positively identify the 
botanical ingredient, the Latin binomial name also must include the 
author citation (i.e., name(s) of the person(s) who described and 
published the Latin binomial name in accordance with the 
internationally accepted rules on botanical nomenclature found in the 
International Code of Botanical Nomenclature (Saint Louis Code) 2000).

B. Impacts of Regulatory Options

1. Option One: Take No Action
    This option would retain the 1992 edition of Herbs of Commerce as 
the source for standardized common names and the 1994 edition of the 
International Code of Botanical Nomenclature as the reference on how to 
state the Latin

[[Page 51698]]

binomial names of botanical ingredients of dietary supplements. By 
convention, we treat the option of taking no action as the baseline for 
defining the costs and benefits of the other options. Therefore, we 
discuss the impacts of this option indirectly via the costs and 
benefits of the other options.
    For this direct final rule, we include as part of the baseline 
costs for Option One (take no action) the cost of section 10806 of the 
Farm Bill, which restricts the use of the term ``ginseng'' in the 
labeling of dietary supplements as discussed under section II, Direct 
Final Rule, of this document. This is because the requirements of the 
Farm Bill are already in effect and are not dependent upon this rule 
for implementation.
2. Option Two: Take the Direct Final Rule Action
    a. Costs of option two. The direct final rule would generate two 
basic types of costs: (1) Costs associated with changing certain 
dietary supplement labels and (2) potential one-time increases in 
product search costs for some consumers.
    We estimate the first type of cost by using a model developed for 
that purpose by Research Triangle Institute (RTI) under contract to us 
(Ref. 5). This model estimates the total cost to change product labels 
by estimating and then adding together the following types of costs: 
(1) Internal administrative, (2) graphic design, (3) pre-press, (4) 
plate or cylinder engraving or etching, and (5) inventory disposal. The 
first four costs depend, in part, on the number of stockkeeping units 
(SKUs) involved. According to this model, dietary supplements are 
associated with 29,514 SKUs (Ref. 5).
    The direct final rule would not affect all of these SKUs, only 
those associated with dietary supplements containing botanicals. We do 
not have direct estimates of the number of SKUs associated specifically 
with dietary supplements containing botanicals. However, a 1999 report 
by RTI on the economic characteristics of the dietary supplement 
industry found that herbals and botanicals made up 28 percent of sales 
in the dietary supplement market (Ref. 6). A statement submitted to us 
by the American Herbal Products Association (AHPA) noted that the 
Nutrition Business Journal ``has consistently stated that herbal 
products represent approximately 25 percent of the sales of all 
supplements'' (Ref. 7). In the following analysis, we use the 28 
percent figure rather than the 25 percent figure because it is better 
documented and because the 28 percent figure is consistent with the 
phrase ``approximately 25 percent.'' In the absence of other 
information, we assume that the share of SKUs associated with products 
containing botanicals is similar to the share of sales associated with 
such products; that is, we assume that 28 percent of the total number 
of SKUs associated with dietary supplements is associated with dietary 
supplements containing botanicals. Therefore, we assume that 
approximately 8,300 SKUs (29,514 SKUs x 28 percent) are associated with 
dietary supplements containing botanicals.
    In addition, the direct final rule would only affect dietary 
supplements containing the following botanicals: (1) Any of the 1,500 
additional botanicals for which the 2000 edition of Herbs of Commerce 
establishes standardized common names, if the labels of those products 
do not already list those botanicals under those names, (2) any of the 
140 botanicals that the 2000 edition of Herbs of Commerce lists under a 
different standardized common name than in the 1992 edition, and (3) 
any botanical that the 2000 edition of the Herbs of Commerce does not 
list and for which using the naming conventions in the 2000 edition of 
the International Code of Botanical Nomenclature would result in a 
different Latin binomial name or author citation than using the naming 
conventions in the 1994 edition.
    We do not know how many Latin binomial names the 2000 edition of 
the International Code of Botanical Nomenclature has changed, because 
that reference contains naming conventions rather than a list of names 
that we could compare with another list of names. Firms may need to 
change the labels of products containing botanicals that were listed 
under the same standardized common names in both the 1992 and 2000 
editions of Herbs of Commerce, if the firms voluntarily listed the 
Latin binomial names of those botanicals and the 2000 edition of the 
International Code of Botanical Nomenclature has changed those names.
    We do not have information on the number of dietary supplements 
this direct final rule would likely affect. AHPA reportedly reviewed 
the labels of several hundred dietary supplements containing botanicals 
and found that 85 percent fully conformed to the 2000 edition of Herbs 
of Commerce (Ref. 7). Additional samples might find higher or lower 
rates of compliance. In addition, labels that are already in compliance 
with the 2000 edition of Herbs of Commerce might not be in compliance 
with the 2000 edition of the International Code of Botanical 
Nomenclature. To better reflect the uncertainty about the number of 
dietary supplements this direct final rule would be likely to affect, 
we assume it would affect between 10 and 20 percent of the 8,300 SKUs 
associated with botanical supplements or from 830 SKUs (8,300 SKUs x 10 
percent) to 1,660 SKUs (8,300 SKUs x 20 percent). This range 
corresponds to an overall percentage of 3 (830 SKUs / 29,514 SKUs) to 6 
percent (1,660 SKUs / 29,514 SKUs) of dietary supplement SKUs.
    The labeling cost model we use does not base inventory disposal 
costs specifically on SKUs, but on the types of labels firms generally 
use for different types of products and assumptions about the amount of 
inventory remaining under different compliance periods for different 
types of products. We assume that the direct final rule would generate 
between 3 and 6 percent of the inventory disposal costs the model 
estimates for changing all dietary supplement SKUs.
    The cost of changing product labels also varies with the amount of 
time we give firms to change the labels. The effective date for this 
direct final rule is January 1, 2006, which is the uniform effective 
date for food labeling regulations published between January 1, 2003, 
and December 31, 2004. We have chosen the uniform effective date for 
implementing the direct final rule in part because it provides a 
compliance period of at least 1 year following the publication of this 
rule. Under this compliance period, the label cost model estimates that 
the direct final rule would generate one-time relabeling costs of 
between $2 million (830 SKUs x $2,400 per SKU) and $7 million (1,660 
SKUs x $4,200 per SKU).
    In addition, the direct final rule may generate a one-time increase 
in product search costs for some consumers. Affected consumers would 
include those who currently identify desired botanical ingredients by: 
(1) Common or usual names that are different from the 1,500 new 
standardized common names listed in the 2000 edition of the Herbs of 
Commerce, (2) one of the 140 standardized common names changed by the 
2000 edition of the Herbs of Commerce, or (3) one of the Latin binomial 
names changed by the 2000 edition of the International Code of 
Botanical Nomenclature. These consumers would need to learn the new 
names for desired ingredients. We do not know the number of affected 
consumers, but approximately 100 million adults (49 percent of adults 
times 202,493,000 adults ages 18 and older in the United States in 
1999) consumed dietary supplements

[[Page 51699]]

containing botanicals in 1999 (Refs. 8 and 9). Probably only a small 
percentage of these consumers would be interested in one or more of the 
botanicals whose names would be affected by this direct final rule. In 
the absence of other information, we assume that the proportion of 
consumers using the botanical ingredient names that the direct final 
rule would change is the same as the proportion of labels bearing those 
names or 3 to 6 percent. These percentages correspond to 3 to 6 million 
consumers.
    We do not know the amount of time these consumers would need to 
discover that they cannot locate a product containing a desired 
botanical ingredient by the name under which they were accustomed to 
finding it, investigate the cause, and discover the new name. The 
methods consumers would use to resolve these issues are probably: (1) 
Asking a salesperson, (2) reading information on current botanical 
names in books or the Internet, or (3) reading additional product 
labels or brochures, some of which might voluntarily indicate the 
relevant name changes. The amount of time particular consumers devote 
to finding ingredients that have different names will vary with their 
interest in the ingredient and the number of ingredients involved. 
Consumers interested in multiple affected ingredients would probably 
spend the greatest amount of time on the first change they encounter 
because they could use some of the information they discover about that 
change to deal with additional changes. For example, they might learn 
that names have changed and develop a method for finding the new name. 
We assume that each affected consumer might spend between 0 and 30 
minutes to process the name changes. The average value of 1 hour of 
leisure time should be similar to the average value of 1 hour of 
working time, which was $15.66 in January 2001 (Ref. 10). Therefore, we 
estimate a maximum search cost increase of between $23 million (3 
million x 0.5 hours x $15.66 per hour) and $47 million (6 million x 0.5 
hours x $15.66 per hour). This burden is a one-time cost, because 
future consumers of these products would not need to switch from the 
old name to the new name.
    Combining the two types of costs, relabeling and search costs, 
gives a range of total one-time costs of $25 to $54 million.
    b. Benefits of option two. The direct final rule would reduce 
product search costs for consumers who currently shop for dietary 
supplements containing desired botanical ingredients by using Latin 
binomial names or the nonstandardized names that might appear along 
with Latin binomial names, but who would be able to use one or more of 
the 1,500 additional standardized common names in the 2000 edition of 
the Herbs of Commerce. The direct final rule would reduce these 
consumers' search costs because standardized common names tend to be 
shorter and more distinctive than Latin binomial names, and the same 
ingredients would always appear under the same standardized common 
name.
    Other consumers who would benefit from the direct final rule are 
those who shop for dietary supplements containing botanical ingredients 
by using the standardized common names listed in the 1992 edition of 
Herbs of Commerce, but who are currently unable to differentiate 
desired ingredients from undesired ingredients using those standardized 
names. Some of these consumers might be better able to differentiate 
these ingredients using the more specific standardized common names in 
the 2000 edition. As noted previously, the 2000 edition reports that it 
has changed 140 names to improve specificity, accuracy, or both.
    Additional consumers who would benefit are those who shop for 
dietary supplements containing botanical ingredients using: (a) One or 
more of the standardized common names that the 2000 edition of Herbs of 
Commerce has changed to improve accuracy or (b) one or more of the 
Latin binomial names that the 2000 edition of the International Code of 
Botanical Nomenclature has changed due to a better understanding about 
the taxonomic relationships between plants. These consumers shop for 
dietary supplements using the botanical ingredient names in the 2000 
edition of Herbs of Commerce or stated in accordance with the rules in 
the 2000 edition of the International Code of Botanical Nomenclature 
but sometimes have difficulty finding those dietary supplements because 
the product labeling may use a name from or stated in accordance with 
previous editions of those texts. The direct final rule would reduce 
search costs for these consumers by reducing inconsistencies between 
the botanical names in the 2000 editions of Herbs of Commerce and the 
International Code of Botanical Nomenclature and the names used to 
refer to those botanicals on dietary supplement labels.
    We do not know the number of consumers in each of these categories. 
Therefore, we again assume that the total number of consumers in all 
affected categories would be between 3 and 6 percent of the estimated 
100 million consumers who used a dietary supplement containing a 
botanical ingredient in 1999, or 3 to 6 million consumers.
    We also do not know the decrease in search costs that the consumers 
in each of these categories would experience. However, we estimate the 
possible range of total search cost reductions using three studies on 
consumer behavior. The first study recorded the amount of time people 
in drug stores spent looking at an item on the shelf before making a 
purchase (Ref. 11) and found that customers, on average, spent 
approximately 4 minutes studying a product before purchasing it. 
According to data from RTI, adult consumers bought an average of six 
units of dietary supplements containing a botanical ingredient in 1999. 
Therefore, this study suggests that consumers of dietary supplements 
containing botanicals spend an average of 24 minutes per year (six 
units per year x 4 minutes per unit) looking at these products on 
shelves before purchasing them.
    The second study, called the Americans' Use of Time Project, used 
time diaries to study how over 3,500 adults spent their time (Ref. 12). 
This study found that adult Americans spent about 371 minutes per week 
shopping for personal consumption items in 1985, such as groceries and 
other household products. This study did not provide information on 
time spent searching specifically for dietary supplements. To estimate 
this time, we assume that the share of shopping time devoted to dietary 
supplements is proportional to the share of consumers' budgets spent on 
dietary supplements. According to an industry source and FDA 
projections, consumers spent about $4.8 billion on dietary supplements 
containing botanical ingredients in 1999 (Ref. 13). Consumers spent 
$6,250 billion on personal consumption in 1999 (Ref. 14). We do not 
know the personal consumption expenditures of people who specifically 
purchase dietary supplements containing botanicals. Therefore, we 
assume that the personal consumption expenditures of those consumers 
are 49 percent of the personal consumption expenditures of all 
consumers. We base this assumption on the estimate that 49 percent of 
adult consumers used such a supplement in 1999, and the assumption that 
those consumers spent about the same amount on personal consumption as 
did other consumers. Under these assumptions, we estimate on the basis 
of this study that consumers spend an average of 30 minutes per year 
[($4.8 billion / [$6,250 billion X 0.49]) x 371 minutes per week

[[Page 51700]]

x 52 weeks per year] shopping for supplements containing botanicals.
    The third study used hidden observers to track and record shopping 
time in grocery stores (Ref. 15). This study found that people spent an 
average of about 21 minutes shopping in the grocery store per trip to 
the grocery store. By combining the estimated time per trip with the 
Food Marketing Institute's finding that consumers average about 2.2 
grocery shopping trips per week, we estimate shopping time for all 
grocery store purchases to be 46.2 minutes per week (2.2 trips per week 
x 21 minutes per trip) (Ref. 16). Again, we assume that the proportion 
of shopping time devoted to dietary supplements equals the proportion 
of grocery store expenditures on dietary supplements. In 1999, 
consumers spent approximately $711 billion on grocery store purchases 
(here defined as food, alcoholic beverages, housekeeping supplies, 
personal care products, and tobacco products and smoking supplies) 
(Ref. 17).
    We again assume that 49 percent of this amount was spent by adults 
who consumed dietary supplements containing botanicals. Based upon this 
study and the stated assumptions, we estimate that consumers spend 
about 33 minutes per year [($4.8 billion / [$711 billion X 0.49]) x 46 
minutes per week x 52 weeks per year] shopping for dietary supplements 
containing botanical ingredients.
    All of the estimates of search costs are imprecise. None of these 
studies looks at product search activity that does not involve 
shopping, such as looking up material in books or on the Internet. The 
grocery store and use of time studies both addressed shopping time, 
which includes activities other than reading product labels. 
Nevertheless, in the absence of additional information, we estimate 
that this direct final rule could reduce one's shopping time by a 
maximum of about 33 minutes (0.55 hours) per year. Applying this time 
savings to the estimated 3 to 6 million affected consumers and the 
average value of time of $15.66 gives maximum search cost savings of 
between $26 million (0.55 hours per year x 3 million x $15.66 per hour) 
and $52 million (0.55 hours per year x 6 million x $15.66 per hour) per 
year. The direct final rule, however, would not eliminate all search 
costs associated with dietary supplements containing botanical 
ingredients for consumers interested in the affected products. To 
reflect this fact, we assume that this direct final rule would 
eliminate between 10 and 20 percent of those search costs, which would 
result in a range of search cost savings of $3 to $10 million per year 
($2.6 million x 10 percent to $52 million x 20 percent). These benefits 
would recur annually because they would apply whenever a consumer 
actively searched for products containing the relevant ingredients, 
unlike the one-time increases in search costs that some consumers might 
face because the direct final rule would change existing botanical 
ingredient names.
    Based on the preceding discussion, we estimate this direct final 
rule would generate net costs in the first year of between $15 to $51 
million, and net benefits of $3 to $10 million every year after the 
first year. Under a discount rate of 7 percent, the present value of an 
infinite stream of benefits of $3 million per year is $43 million ($3 
million / 7 percent), and the present value of an infinite stream of 
benefits of $10 million per year is $143 million ($10 million / 7 
percent). Therefore, over time, this option would generate net benefits 
of negative $8 million ($43 million - $51 million) to $128 million 
($143 million - $15 million). The stream of benefits that would exactly 
offset the maximum estimated cost of $51 million to give zero net costs 
is $4 million ($4 million / 7 percent = $57 million) per year out of 
the potential range of $3 to $10 million per year. Therefore, this 
direct final rule would probably generate net benefits.
3. Option Three: Take an Alternative Action (as described under section 
V.A, Regulatory Options, of this document)
    As discussed under section I, Background, of this document, in 
addition to standardized common names and Latin binomial names, the 
2000 edition of Herbs of Commerce includes up to four other categories 
of names (i.e., botanical synonyms, Ayurvedic names, pinyin names and 
other common names) for each plant listed, when applicable. In order to 
reduce the number of label and name changes that we would require under 
Option Two, we could allow firms using any of the 1,500 botanicals that 
were not listed in the 1992 edition of Herbs of Commerce, but that are 
listed in the 2000 edition, to continue to label their products as they 
do now, as long as the name used for a botanical ingredient meets one 
of the following requirements: (1) Is among the names for the 
respective botanical listed in the 2000 edition and complies with the 
Farm Bill requirement concerning the use of the term ``ginseng'' and 
(2) is accompanied by the corresponding Latin binomial name, stated to 
conform to the naming conventions of the 2000 edition of the 
International Code of Botanical Nomenclature, including the author 
citation when needed for a positive identification of the botanical.
    a. Costs of option three. This option would generate the same 
labeling costs as Option Two, except that some firms manufacturing or 
labeling dietary supplements containing one or more of the 1,500 
botanical ingredients for which the 2000 edition of Herbs of Commerce 
establishes new standardized common names would not need to revise the 
labels of those products. The product whose labels would not need to be 
revised are, with some exceptions, those that currently list botanical 
ingredients by any one of their corresponding names found in the 2000 
edition of Herbs of Commerce. The exceptions whose labels would 
nonetheless need to be revised, are those with names that conflict with 
the Farm Bill restriction on the use of the term ``ginseng,'' or that 
do not state the correct Latin binomial names must be stated in 
accordance with the naming conventions of the 2000 edition of the 
International Code of Botanical Nomenclature and include the author 
citations when needed for a positive identification of the botanicals. 
We do not know the number of such products. Using the cost estimated 
for Option Two, we estimate that the label change costs for Option 
Three would also be between $2 and $7 million, except that the cost of 
this option must be the same or less than the costs of Option Two.
    Option Three would also generate the same short-term increases in 
product search costs as Option Two, except that some consumers who 
currently use one of the other names listed in the 2000 edition of 
Herbs of Commerce to identify botanical ingredients would be able to 
continue to use those names to identify those ingredients. We do not 
know the number of such consumers. Using the cost estimated for Option 
Two, we estimate that the increase of search costs under Option Three 
would also be between $23 and $47 million, except that these costs must 
be the same or less than the corresponding costs of Option Two, because 
the consumers affected by this cost under Option Three are a subset of 
the consumers affected by this cost under Option Two.
    b. Benefits of option three. This option would generate the same 
reduction in long-term search costs as Option Two, except that fewer 
consumers who currently shop for dietary supplements using 
nonstandardized names would instead be able to use standardized common 
names to more easily identify those ingredients in other supplements. 
Again, we do not have sufficiently

[[Page 51701]]

detailed information to distinguish the size of this benefit from that 
of Option Two, so we again estimate the benefits to be between $3 and 
$10 million per year, except that they must be the same or less than 
the benefits of Option Two because the source of benefits under Option 
Three is a subset of the sources of benefits under Option Two.
    We cannot compare the net benefits of Option Three to those of 
Option Two because the costs and benefits of Option Three are both 
lower, and we do not know the relative size of the changes in costs and 
benefits. If, however, the costs and benefits of Option Three were 
below those of Option Two by the same proportion, then Option Three 
would probably have lower net benefits than Option Two.

VI. Regulatory Flexibility Analysis

    FDA has examined the economic implications of this direct final 
rule as required by the Regulatory Flexibility Act (5 U.S.C. 601-612). 
If a rule has a significant economic impact on a substantial number of 
small entities, the Regulatory Flexibility Act requires us to analyze 
regulatory options that would minimize the economic effect of the rule 
on small entities. We find that this direct final rule will have a 
significant economic impact on a substantial number of small entities.

A. Regulatory Options

    In the preceding preliminary regulatory impact analysis under 
section V.A, Regulatory Options, of this document, we identified the 
following major regulatory alternatives or options: (1) Take no action, 
(2) take the direct final rule action, and (3) take an alternative 
action. We request comments on these and any other plausible 
alternatives.

B. Impacts of Regulatory Options

1. Option One: Take No Action
    The incorporation by reference citations under Sec.  101.4(h) would 
remain unchanged. Under this option, the following requirements and 
provisos apply:
    [sbull] The label of a dietary supplement containing a botanical 
ingredient must use the ``standardized common name'' for that botanical 
ingredient listed in the 1992 edition of Herbs of Commerce.
    [sbull] For a botanical ingredient not listed in the 1992 edition 
of Herbs of Commerce, the label could use any appropriately descriptive 
name as the common or usual name, with the following exception. In 
accordance with section 10806 of the Farm Bill, the use of the term 
``ginseng'' as a common or usual name (or part thereof) for any dietary 
supplement or dietary ingredient is limited to those that are derived 
from a plant classified within the genus ``Panax.''
    [sbull] Any common or usual name other than the ``standardized 
common name'' for a botanical ingredient may be used only if the 
botanical ingredient is not listed in Herbs of Commerce (1992), and 
must be accompanied by the Latin binomial name of the plant from which 
it is derived.
    [sbull] The Latin binomial name must be stated in accordance with 
the internationally accepted rules on botanical nomenclature, such as 
those found in the International Code of Botanical Nomenclature (Tokyo 
Code) 1994.
    [sbull] The Latin binomial name of a botanical ingredient also must 
include the designation of the author or authors who published the 
Latin name, when a positive identification of the botanical cannot be 
made in its absence.
    Taking no additional action beyond the current regulatory regime 
that we described in the previous paragraphs would have no effect on 
small entities relative to the status quo.
    2. Option Two: Take the Direct Final Rule Action
    The direct final rule action is to update the incorporation by 
reference citations under Sec.  101.4(h). Under this option, the 
following requirements and provisos apply:
    [sbull] The label of a dietary supplement containing a botanical 
ingredient must use the ``standardized common name'' for that botanical 
ingredient listed in the 2000 edition of Herbs of Commerce.
    [sbull] For a botanical ingredient not listed in the 2000 edition 
of Herbs of Commerce, the label could use any appropriately descriptive 
name as the common or usual name, with the following exception. As in 
Option One, in accordance with section 10806 of the Farm Bill, the use 
of the term ``ginseng'' as a common or usual name (or part thereof) for 
any dietary supplement or dietary ingredient is limited to those that 
are derived from a plant classified within the genus ``Panax.''
    [sbull] Any common or usual name other than the ``standardized 
common name'' for a botanical ingredient may be used only if the 
botanical ingredient is not listed in Herbs of Commerce (2000), and 
must be accompanied by the Latin binomial name of the plant from which 
it is derived.
    [sbull] The Latin binomial name must be stated in accordance with 
the internationally accepted rules on botanical nomenclature found in 
the International Code of Botanical Nomenclature (Saint Louis Code) 
2000.
    [sbull] When needed to positively identify the botanical 
ingredient, the Latin binomial name also must include the author 
citation (i.e., name(s) of the person(s) who described and published 
the Latin binomial name in accordance with the internationally accepted 
rules on botanical nomenclature found in the International Code of 
Botanical Nomenclature (Saint Louis Code) 2000).
    The direct final rule would cause some small businesses to change 
product labels as described in the preceding regulatory impact 
analysis. It would not affect any other class of small entities. RTI 
developed a Dietary Supplement Enhanced Establishment Database (DS-EED) 
under contract to us. RTI based the DS-EED on our official 
establishment inventory and supplemented it with information from trade 
organizations, trade shows, and electronic databases (Ref. 6). 
According to these data, approximately 350 to 1,260 establishments 
might manufacture, repackage, or relabel supplements containing 
botanicals.
    The Small Business Administration (SBA) defines a small business in 
the dietary supplement industry as a business having 500 or fewer 
employees. RTI traced the establishments to the parent company to 
determine how many establishments belonged to small firms. Based on 
that study, between 60 and 90 percent of the 1,260 establishments 
belong to small firms, or between approximately 700 and 1,200 
establishments. However, the RTI study did not provide information on 
the total number of firms associated with those establishments.
    In a letter to FDA, AHPA claims that between 600 and 1,100 firms 
produce at least one dietary supplement product containing an herbal 
ingredient and are also involved in labeling products (Ref. 7). The 
letter also states that the editor of the Nutrition Business Journal 
told APHA that between 95 and 96 percent of dietary supplement 
companies have 500 or fewer employees. This information appears 
consistent with the information on establishments provided by RTI. We 
do not know how many of these firms would actually need to revise their 
labels. Therefore, we estimate that the direct final rule would affect 
between 0 and 1,045 small firms.
    We assume that these firms would face 96 percent of the maximum 
total labeling costs for all firms we estimated in this document's 
preceding section V.B.2.a, Costs of Option Two, which were $2 to $7 
million. Therefore, we estimate that this direct final rule would 
generate one-time costs for small firms

[[Page 51702]]

of between $2 and $7 million, after rounding to the nearest million.
3. Option Three: Take an Alternative Action
    This option is similar to the direct final rule action. We would 
still update the incorporation by reference citations under Sec.  
101.4(h), but firms would have slightly more flexibility when labeling 
dietary supplements containing a botanical ingredient. Under this 
option, the following requirements and provisos apply:
    [sbull] As in Option Two, if the ``standardized common name'' for a 
botanical ingredient has changed from the 1992 to the 2000 edition of 
Herbs of Commerce, firms must use the revised ``standardized common 
name'' listed in the 2000 edition of Herbs of Commerce.
    [sbull] If a botanical ingredient listed in the 2000 edition of 
Herbs of Commerce was not previously listed in the 1992 edition of that 
reference, firms could elect to use any of the names (i.e., botanical 
synonym, Ayurvedic name, pinyin name, or other common name) listed for 
that botanical in the 2000 edition as the common or usual name, with 
the following exception. As in Options One and Two, in accordance with 
section 10806 of the Farm Bill, the use of the term ``ginseng'' as a 
common or usual name (or part thereof) for a dietary supplement or 
dietary ingredient is limited to those that are derived from a plant 
classified within the genus ``Panax.''
    [sbull] Similar to Options One and Two, if the botanical ingredient 
is not listed in either the 1992 or 2000 edition of Herbs of Commerce, 
firms could use any appropriately descriptive name as the common or 
usual name for that ingredient with the following exception. In 
accordance with section 10806 of the Farm Bill, the use of the term 
``ginseng'' as a common or usual name (or part thereof) for a dietary 
supplement or dietary ingredient is limited to those that are derived 
from a plant classified within the genus ``Panax.''
    [sbull] As in Option Two, any common or usual name other than the 
``standardized common name'' for a botanical ingredient may be used 
only if the botanical is not listed in Herbs of Commerce (2000), and 
must be accompanied by the Latin binomial name of the plant from which 
it is derived.
    [sbull] As in Option Two, the Latin binomial name must be stated in 
accordance with the internationally accepted rules on botanical 
nomenclature found in the International Code of Botanical Nomenclature 
(Saint Louis Code) 2000.
    [sbull] As in Option Two, when needed to positively identify the 
botanical ingredient, the Latin binomial name also must include the 
author citation (i.e., name(s) of the person(s) who described and 
published the Latin binomial name in accordance with the 
internationally accepted rules on botanical nomenclature found in the 
International Code of Botanical Nomenclature (Saint Louis Code) 2000).
    We discussed this option under this document's preceding section 
V.B.3.a, Costs of Option Three, and concluded that it would generate 
lower relabeling costs for all firms than the direct final rule action. 
However, we were unable to estimate the size of the cost reduction and 
again concluded that labeling costs could be anywhere from $2 to $7 
million, except that the costs of this option must be the same or less 
than the costs of Option Two. These conclusions also hold for small 
firms, which make up the vast majority of the affected firms. Although 
Option Three would reduce the impact of the direct final rule on small 
firms, it would also reduce the benefits by an unknown amount. We have 
decided not to pursue this option because the potential cost savings 
for small firms would be modest and we do not know the impact on 
benefits.

VII. Paperwork Reduction Act of 1995

    FDA concludes that the labeling requirements in this document are 
not subject to review by the Office of Management and Budget because 
they do not constitute a ``collection of information'' under the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). Rather, these 
dietary supplement labeling requirements are a ``public disclosure of 
information originally supplied by the Federal government to the 
recipient for the purpose of disclosure to the public'' (5 CFR 
1320.3(c)(2)).

VIII. Unfunded Mandates Reform Act of 1995

    Section 202(a) of the Unfunded Mandates Reform Act of 1995 (Public 
Law 104-4) requires that agencies prepare a written statement of 
anticipated costs and benefits before proposing any rule that may 
result in an expenditure by State, local, and tribal governments, in 
the aggregate, or by the private sector, of $100 million in any one 
year (adjusted annually for inflation).
    The Unfunded Mandates Reform Act does not require FDA to prepare a 
statement of costs and benefits for the direct final rule, because the 
direct final rule is not expected to result in any one-year expenditure 
that would exceed $100 million adjusted for inflation. The current 
inflation-adjusted statutory threshold is $112 million.

IX. Federalism

    FDA has analyzed this direct final rule in accordance with the 
principles set forth in Executive Order 13132. FDA has determined that 
the rule has a preemptive effect on State law. Section 4(a) of the 
Executive order requires agencies to:
     * * * construe * * * a Federal Statute to preempt State law 
only where the statute contains an express preemption provision, or 
there is some other clear evidence that the Congress intended 
preemption of State law, or where the exercise of State authority 
conflicts with the exercise of Federal authority under the Federal 
statute.
Section 403A of the act (21 U.S.C. 343-1) is an express preemption 
provision. That section provides that ``no State or political 
subdivision of a State may directly or indirectly establish under any 
authority or continue in effect as to any food in interstate commerce'' 
certain food labeling requirements, unless an exemption is provided by 
the Secretary of Health and Human Services (and, by delegation, FDA). 
Relevant to this rule, one such requirement that States and political 
subdivisions may not adopt is ``any requirement for the labeling of 
food of the type required by section * * * 403(i)(2) that is not 
identical to the requirement of such section,'' (section 403A(a)(2) of 
the act). Another such requirement that States and political 
subdivisions may not adopt is ``any requirement for the labeling of 
food of the type required by section * * * 403(i)(1) that is not 
identical to the requirement of such section,'' (section 403A(a)(3) of 
the act). Prior to the effective date of this direct final rule, this 
provision operates to preempt States from imposing requirements 
concerning the use of botanical names in dietary supplement labeling if 
the requirements concerning the use of those names are not identical to 
those contained in Sec.  101.4(h) (incorporating by reference Herbs of 
Commerce (1992) and the International Code of Botanical Nomenclature 
(Tokyo Code) 1994). Specifically, the preemptive effect applies to 
requirements concerning the use of botanical names in the common or 
usual name on the label of a dietary supplement (section 403(i)(1) of 
the act) and to requirements for listing individual botanical 
ingredients on the label of a dietary supplement (section 403(i)(2) of 
the act). Once this direct final rule becomes effective, States will be 
preempted from imposing any such requirements concerning the use of

[[Page 51703]]

botanical names on dietary supplement labels that are not identical to 
those required by the new rule, which amends the existing Sec.  
101.4(h) to incorporate by reference Herbs of Commerce (2000) and the 
International Code of Botanical Nomenclature (Tokyo Code) 2000, and to 
incorporate new Federal legislative restrictions on the use of the term 
``ginseng'' in dietary supplement labeling.
    Section 403A(a)(2) to (a)(3) of the act displaces both State 
legislative requirements and State common-law duties (Medtronic v. 
Lohr, 518 U.S. 470, 503 (1996) (Breyer, J., concurring in part and 
concurring in the judgment); id. at 510 (O'Connor, J., joined by 
Rehnquist, C. J., Scalia, J., and Thomas, J., concurring in part and 
dissenting in part); Cipollone v. Liggett Group, Inc., 505 U.S. 504, 
521 (1992) (plurality opinion); id. at 548-49 (Scalia, J., joined by 
Thomas, J., concurring in part in the judgment and dissenting in 
part)). Although this rule has preemptive effect in that it would 
preclude States from adopting statutes, issuing regulations, or 
adopting or enforcing any requirements, including State tort-law 
imposed requirements, that are not identical to the requirements of 
this rule, this preemptive effect is consistent with what Congress set 
forth in section 403A of the act.
    Section 4(e) of the Executive order states that ``when an agency 
proposes to act through adjudication or rulemaking to preempt State 
law, the agency shall provide all affected State and local officials 
notice and an opportunity for appropriate participation in the 
proceedings.'' Similarly, section 6(c) of the Executive order states 
that:
     * * * to the extent practicable and permitted by law, no agency 
shall promulgate any regulation that has federalism implications and 
that preempts state law, unless the agency, prior to the formal 
promulgation of the regulation * * * consulted with State and local 
officials early in the process of developing the proposed 
regulation.
This requirement, that FDA provide the States with an opportunity for 
appropriate participation in this rulemaking, has been met. This rule 
updates and makes minor changes to a rule that was first proposed 
through full notice-and-comment rulemaking procedures in 1995 and 
finalized in 1997. During the comment period prior to the issuance of 
the 1997 final rule, and after the publication of the final rule, the 
agency received no comments, correspondence, or other communications 
from any State or local government concerning preemption of an existing 
legislative or common-law requirement. In its consultation with states 
prior to the publication of this direct final rule, FDA was not 
informed about any State requirements that would be in conflict with 
the Federal requirements in this rule, and no States expressed concerns 
over the rule's preemptive effect. Moreover, FDA is providing an 
opportunity for State and local officials to comment through this 
rulemaking, and intends to withdraw the direct final rule if 
significant adverse comments are received.
    In conclusion, the agency believes that it has complied with all of 
the applicable requirements under the Executive order, and has 
determined that the preemptive effects of this rule are consistent with 
Executive Order 13132.

X. Comments

    Interested persons may submit to the Division of Dockets Management 
(see ADDRESSES) written or electronic comments regarding this document. 
This comment period runs concurrently with that for the companion 
proposed rule. Submit a single copy of electronic comments or two paper 
copies of any mailed comments, except that individuals may submit one 
paper copy. Submit electronic comments to http://www.fda.gov/dockets/ecomments. Comments are to be identified with the docket number found 
in brackets in the heading of this document. Received comments may be 
seen in the Division of Dockets Management between 9 a.m. and 4 p.m., 
Monday through Friday. FDA will consider any comments received on 
either this direct final rule or the companion proposed rule to be 
comments received on both rules.

XI. Effective Date

    FDA periodically establishes, by final rule in the Federal 
Register, uniform effective dates for compliance with food labeling 
regulations (see, e.g., the Federal Register of December 31, 2002 (67 
FR 79851), designating the effective date of January 1, 2006, for food 
labeling regulations issued between January 1, 2003, and December 31, 
2004). FDA intends to make this direct final rule effective on January 
1, 2006, the uniform effective date for compliance with food labeling 
regulations published between January 1, 2003, and December 31, 2004. 
FDA will publish a document in the Federal Register to confirm the 
effective date of this direct final rule, if FDA receives no 
significant adverse comments on it or its companion proposed rule.

XII. References

    Copies of the following references have been placed on display and 
may be seen by interested persons between 9 a.m. and 4 p.m., Monday 
through Friday at the Division of Dockets Management (see ADDRESSES). 
FDA has verified the Web site addresses, but is not responsible for 
subsequent changes to the Web sites after this document publishes in 
the Federal Register.
    1. Foster, Steven, editor, Herbs of Commerce, American Herbal 
Products Association, Austin, TX, 1992.
    2. Greuter, W., editor (chairman), International Code of 
Botanical Nomenclature (Tokyo Code) 1994, adopted by the 15th 
International Botanical Congress, Koeltz Scientific Books, D-61453 
K[ouml]nigstein, Germany, 1994.
    3. McGuffin, Michael, managing editor, Herbs of Commerce, 2nd 
Edition, American Herbal Products Association, Silver Spring, MD, 
2000.
    4. Greuter, W., editor (chairman), International Code of 
Botanical Nomenclature (Saint Louis Code) 2000, adopted by the 16th 
International Botanical Congress, Koeltz Scientific Books, D-61453 
K[ouml]nigstein, Germany, 2000.
    5. FDA Labeling Cost Model: Final Report, Research Triangle 
Institute (RTI) International, April 2002, Revised.
    6. Economic Characterization of the Dietary Supplement Industry, 
Research Triangle Institute (RTI), March 1999, p. 5-1.
    7. Letter from Michael McGuffin, President, American Herbal 
Products Association, to Rhonda R. Kane, Consumer Safety Officer, 
FDA, May 13, 2002, pp. 1-6 with 3 attachments.
    8. ``Consumer Use of Dietary Supplements,'' Prevention Magazine 
Survey, Table A, Prevention Magazine, 2000, p. 13.
    9. Statistical Abstract of the United States: 2000, Table Number 
13--Resident Population by Sex and Age: 1999, U.S. Census Bureau, 
Washington, DC, p. 14. Obtained data at the Internet site http://www.census.gov/prod/2001pubs/statab/sec01.pdf on June 19, 2002.
    10. National Employment, Hours, and Earnings, Bureau of Labor 
Statistics, U.S. Department of Labor, Washington, DC. Obtained data 
from the Internet site http://data.bls.gov/cgi-bin/srgate on August 
14, 2002. To view the data used, enter the number EES00510006 in the 
series id window, select the year 2001-2002 in the years to report 
window, and select the button ``retrieve data.''
    11. ``The Power of Persuasion at the Moment of Truth,'' Drug 
Store News, 19(20):3-8, 22, and 24, December 8, 1997.
    12. Robinson, J. P. and G. Godbey, Time for Life: The Surprising 
Ways Americans Use Their Time, Second Edition, The Pennsylvania 
State University Press, University Park, PA, 1997, Appendix A, 1985 
column, categories 30 to 39, pp. 355 and 356.
    13. Guthrie, J. F., K. M. Koehler, and R. A. Scharff: Trends in 
the Consumption of Dietary Supplements 1994-2000, Table 11-Growth in 
Market Size and Per Capita Consumption of Dietary Supplements, 1994-
2000, Panel A, Unpublished document, Center for Food Safety and 
Applied Nutrition, FDA, Washington, DC, July 12, 2000, p. 29.

[[Page 51704]]

    14. Economic Report of the President, Table B-16--Personal 
Consumption Expenditures, 1959-2001, U.S. Government Printing 
Office, Washington, DC, February 2002. Obtained data at the Internet 
site http://w3.access.gpo.gov/usbudget/fy2003/sheets/b16.xls on 
August 14, 2002.
    15. ``Customer Behavior: How Consumers Shop,'' Progressive 
Grocer, December 1992, pp. 62-64.
    16. ``A Shopping for Health Report, 1998: A Look at the Self-
Care Movement,'' Food Marketing Institute, Research Department, 
Washington, DC, and Prevention Magazine, Research Department, Emmaus 
PA, 1998, p. 2.
    17. Consumer Expenditures in 1999, Report 949, Table A--Average 
Annual Expenditures of All Consumer Units and Percent Changes, 
Consumer Expenditure Survey, 1997-99, Bureau of Labor Statistics, 
U.S. Department of Labor, Washington, DC, May 2001, p. 3. Obtained 
data from the Internet site http://stats.bls.gov/cex/csxann99.pdf on 
July 25, 2002.

List of Subjects in 21 CFR Part 101

    Food labeling, Incorporation by reference, Nutrition, Reporting and 
recordkeeping requirements.

0
Therefore, under the Federal Food, Drug, and Cosmetic Act and under 
authority delegated to the Commissioner of Food and Drugs, 21 CFR part 
101 is amended as follows:

PART 101--FOOD LABELING

0
1. The authority citation for 21 CFR part 101 continues to read as 
follows:

    Authority:  15 U.S.C 1453, 1454, 1455; 21 U.S.C. 321, 331, 342, 
343, 348, 371; 42 U.S.C. 243, 264, 271.

0
2. Section 101.4 is amended by revising paragraph (h) to read as 
follows:


Sec.  101.4   Food; designation of ingredients.

* * * * *
    (h) The common or usual name of a botanical ingredient (including 
fungi and algae) listed on the label of a dietary supplement must be 
consistent with the ``standardized common name'' listed in Herbs of 
Commerce, 2nd Edition (2000) for the plant from which the ingredient is 
derived. The use of the term ``ginseng'' as a common or usual name (or 
part thereof) for any dietary supplement or dietary ingredient is 
limited to those that are derived from a plant classified within the 
genus ``Panax.'' Herbs of Commerce, 2nd Edition (2000) is incorporated 
by reference in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. 
Copies of this book may be obtained from the American Herbal Products 
Association, 8484 Georgia Ave., suite 370, Silver Spring, MD 20910, 
301-588-1171, FAX: 301-588-1174, e-mail: [email protected]. Copies also may 
be examined at the Center for Food Safety and Applied Nutrition's 
Library, 5100 Paint Branch Pkwy., College Park, MD, or at the Office of 
the Federal Register, 800 North Capitol St. NW., suite 700, Washington, 
DC.
    (1) The listing of the common or usual name on the label must be 
followed by statements of:
    (i) The part of the plant (e.g., root, leaves) from which the 
dietary ingredient is derived (e.g., ``Garlic bulb'' or ``Garlic 
(bulb)''), except that this designation is not required for algae. The 
name of the part of the plant must be expressed in English (e.g., 
``flower'' rather than ``flos''); and
    (ii) The Latin binomial name (i.e., genus and species) of the plant 
from which the botanical ingredient is derived, stated in parentheses, 
when no ``standardized common name'' for the plant is listed in Herbs 
of Commerce, 2nd Edition (2000). In such cases, this Latin binomial 
name may be listed before the part of the plant and must be stated in 
accordance with the internationally accepted rules on botanical 
nomenclature found in the International Code of Botanical Nomenclature 
(Saint Louis Code) 2000. When needed to positively identify the 
botanical ingredient, the Latin binomial name also must include the 
author citation (i.e., name(s) of the person(s) who described and 
published the Latin binomial name in accordance with the 
internationally accepted rules on botanical nomenclature found in the 
International Code of Botanical Nomenclature (Saint Louis Code) 2000). 
The International Code of Botanical Nomenclature (Saint Louis Code) 
2000, a publication of the International Association for Plant 
Taxonomy, is incorporated by reference in accordance with 5 U.S.C. 
552(a) and 1 CFR part 51. Copies of this book may be obtained from 
Koeltz Scientific Books, D-61453 K[ouml]nigstein, Germany; University 
Bookstore, Southern Illinois University, Carbondale, IL 62901-4422, 
618-536-3321, FAX: 618-453-5207, e-mail: [email protected]; and from 
Lubrecht & Cramer, 18 East Main St., Port Jervis, NY 12771, 800-920-
9334, FAX: 800-920-9334, e-mail: [email protected]. Copies also 
may be examined at the Center for Food Safety and Applied Nutrition's 
Library, 5100 Paint Branch Pkwy., College Park, MD, or at the Office of 
the Federal Register, 800 North Capitol St. NW., suite 700, Washington, 
DC.
    (2) On labels of single-ingredient dietary supplements that do not 
include an ingredient list, the identification of the Latin binomial 
name, when needed, and the part of the plant may be prominently placed 
on the principal display panel or information panel, or included in the 
nutrition label.

    Dated: August 14, 2003.
William K. Hubbard,
Associate Commissioner for Policy and Planning.
[FR Doc. 03-21980 Filed 8-27-03; 8:45 am]
BILLING CODE 4160-01-S