[Federal Register Volume 68, Number 167 (Thursday, August 28, 2003)]
[Proposed Rules]
[Pages 51738-51749]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-21981]


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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: Proposed rule.

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SUMMARY: The Food and Drug Administration (FDA) is proposing to amend 
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 proposes to replace 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 proposing to incorporate new statutory restrictions on 
the use of the word ``ginseng'' in dietary supplement labeling. 
Finally, FDA is proposing to make minor wording changes in its 
regulation on declaring botanical ingredients in dietary supplements. 
These proposed 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. This proposed rule is a companion to a direct 
final rule published elsewhere in this issue of the Federal Register.

DATES:  Submit written or electronic comments on this proposed rule by 
November 12, 2003. See section XI of this document for the proposed 
effective date of a final rule based on this proposed rule.

ADDRESSES:  Submit written comments on this companion proposed 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:

I. Background

A. Rulemaking Process

    This proposed rule is a companion to a direct final rule on the 
same topic published in the final rules section of this issue of the 
Federal Register. The companion proposed rule and its related direct 
final rule are substantively identical. This 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 
comments.
    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

[[Page 51739]]

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 the 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 this proposed rule and its related direct 
final rule run concurrently. We have identified and discussed the 
proposed regulatory changes in the preambles to both rules. Any 
comments received under this proposed rule will be treated as comments 
regarding the direct final rule and vice versa. FDA is publishing a 
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 
this 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 Proposed 
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 botanical 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.

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 
``mat[eacute]'' 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

[[Page 51740]]

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. Proposed Rule

    FDA is proposing to revise 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 proposed 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 
proposing to revise 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, FDA is proposing to incorporate 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 current regulation, in 
such cases the proposed rule would require 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 proposed rule would similarly require that the Latin 
binomial name also 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 proposed 
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 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 proposing to further revise 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, we are 
proposing to include 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 proposing to make 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 proposing to improve the reader's 
understanding are using simpler language throughout, substituting the 
word ``must'' for ``shall,'' and dividing

[[Page 51741]]

very long sentences into shorter ones. To be more technically accurate, 
the proposal would replace 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, we are 
proposing to also add 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 proposed 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 proposed 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 and related regulations.
    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. Preliminary Regulatory Impact Analysis

    FDA has examined the economic implications of this proposed 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 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 proposed 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 proposed 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:

[[Page 51742]]

    [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 Proposed Action
    The proposed 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).
3. Option Three: Take an Alternative Action
    This option is similar to the proposed action. 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 used 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).
    We request comments on these and other plausible alternatives.

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 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 proposed 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, Proposed 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 Proposed Action
    a. Costs of option two. The proposed 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.

[[Page 51743]]

    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 proposed 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 proposed 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 proposed 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 proposed 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 proposed 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 proposed effective date 
for any final rule based upon this proposed 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 this effective date in part because it would provide a 
compliance period of at least 1 year following the publication of the 
direct final rule. Under this compliance period, the label cost model 
estimates that the proposed 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 proposed 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 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 proposed rule. In the absence of other information, we 
assume that the proportion of consumers using the botanical ingredient 
names that the proposed 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

[[Page 51744]]

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 proposed 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 proposed 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 proposed 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 proposed 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 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).

[[Page 51745]]

    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 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 
proposed 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 
tentatively assume that this proposed 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 
proposed rule would change existing botanical ingredient names.
    Based on the preceding discussion, we estimate this proposed 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 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 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 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 this option were below 
those of Option Two by the same proportion, then this option would 
probably have lower net benefits than Option Two.

VI. Initial Regulatory Flexibility Analysis

    FDA has examined the economic implications of this proposed rule as 
required by the Regulatory Flexibility Act (5 U.S.C. 601-612). If a 
rule has a significant economic impact on a

[[Page 51746]]

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 tentatively conclude 
that this proposed rule would 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 proposed 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 Proposed Action
    The proposed 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 proposed 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 proposed 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 proposed rule would generate 
one-time costs for small firms 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 proposed 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

[[Page 51747]]

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 proposed 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 proposed rule on small firms, it would 
also reduce the benefits by an unknown amount. We have tentatively 
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 tentatively concludes that the labeling requirements proposed 
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, the proposed dietary supplement labeling 
requirements would be 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 proposed rule, because the 
proposed 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 proposed rule in accordance with the 
principles set forth in Executive Order 13132. FDA has determined that 
the rule would have 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 the direct final rule that is 
being published simultaneously with this proposed 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 the direct final rule that is being published 
simultaneously with this proposed rule becomes effective, States will 
be preempted from imposing any such requirements concerning the use of 
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

[[Page 51748]]

opinion); id. at 548-49 (Scalia, J., joined by Thomas, J., concurring 
in part in the judgment and dissenting in part)). Although this 
proposed rule would have 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 
proposes to update and make 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 proposed 
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 direct final 
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 companion proposed rule or the direct final 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). We are proposing that any final rule FDA may issue based upon 
this proposal, including the related direct final rule, become 
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 the direct final rule, if FDA receives 
no significant adverse comments on it or this 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.
    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,

[[Page 51749]]

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

PART 101--FOOD LABELING

    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.
    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 
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. 03-21981 Filed 8-27-03; 8:45 am]
BILLING CODE 4160-01-S