[Federal Register Volume 68, Number 230 (Monday, December 1, 2003)]
[Proposed Rules]
[Pages 67094-67097]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-29741]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
 ========================================================================
 

  Federal Register / Vol. 68, No. 230 / Monday, December 1, 2003 / 
Proposed Rules  

[[Page 67094]]



DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Part 17

[Docket No. 2003N-0308]


Civil Money Penalties Hearings; Maximum Penalty Amounts and 
Compliance With the Federal Civil Penalties Inflation Adjustment Act

AGENCY:  Food and Drug Administration, HHS.

ACTION:  Proposed rule.

-----------------------------------------------------------------------

SUMMARY:  The Food and Drug Administration (FDA) is proposing a new 
regulation to adjust for inflation the maximum civil money penalty 
amounts for the various civil money penalty authorities within our 
jurisdiction. We are taking this action to comply with the Federal 
Civil Penalties Inflation Adjustment Act of 1990 (FCPIAA), as amended.

DATES:  Submit written or electronic comments by February 17, 2004.

ADDRESSES: Submit written comments 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: Philip L. Chao, Office of Policy and 
Planning (HF-23), Food and Drug Administration, 5600 Fishers Lane, 
Rockville, MD 20857, 301-827-0587.

SUPPLEMENTARY INFORMATION:

I. Why Are We Revising Our Civil Money Penalty Rules?

    In general, the FCPIAA (28 U.S.C. 2461, as amended by the Debt 
Collection Improvement Act of 1996) requires Federal agencies to issue 
regulations to adjust for inflation each civil monetary penalty 
provided by law within their jurisdiction. The FCPIAA directs agencies 
to adjust the civil monetary penalties by October 23, 1996, and to make 
additional adjustments at least once every 4 years thereafter. The 
adjustments are based on changes in the cost of living, and the FCPIAA 
defines the cost of living adjustment as:
    * * * the percentage (if any) for each civil monetary penalty by 
which--
    (1) the Consumer Price Index for the month of June of the 
calendar year preceding the adjustment, exceeds
    (2) the Consumer Price Index for the month of June of the 
calendar year in which the amount of such civil monetary penalty was 
last set or adjusted pursuant to law.
    The FCPIAA also prescribes a rounding method based on the amount of 
the calculated increases, but states that the initial adjustment of a 
civil monetary penalty may not exceed 10 percent of the penalty.
    The FCPIAA defines a civil monetary penalty as:
    * * * any penalty, fine, or other sanction that--
    (A)(i) is for a specific monetary amount as provided by Federal 
law; or
    (ii) has a maximum amount provided for by Federal law; and
    (B) is assessed or enforced by an agency pursuant to Federal 
law; and
    (C) is assessed or enforced pursuant to an administrative 
proceeding or a civil action in the Federal Courts * * *.
    Congress enacted the FCPIAA, in part, because it found that the 
impact of civil monetary penalties had been reduced by inflation and 
that reducing the impact of civil monetary penalties had weakened their 
deterrent effect.
    We have identified 14 civil monetary penalties that fall within our 
jurisdiction and are subject to adjustments under the FCPIAA. The 
following table lists those penalties, their maximum penalty amounts, 
assessment methods, the dates that the penalties were last set or 
adjusted, and the adjusted penalty amount. The affected civil monetary 
penalties provisions are sections 303, 307, and 539 of the Federal 
Food, Drug, and Cosmetic Act (the act) (21 U.S.C. 333, 335b, and 360pp) 
and sections 354 and 2128 of the Public Health Service Act (PHS Act) 
(42 U.S.C. 263b and 300aa-28).

 Table 1.--Civil Monetary Penalties Authorities Administered by FDA and
                    Adjusted Maximum Penalty Amounts
------------------------------------------------------------------------
                           Current                 Date of     Adjusted
                           Maximum                   Last       Maximum
 U.S.C.    Description     Penalty   Assessment    Penalty      Penalty
 Section   of Violation  Amount (in    Method     Figure or   Amount (in
                          dollars)                Adjustment   dollars)
------------------------------------------------------------------------
21 U.S.C.
------------------------------------------------------------------------
  333(b)  Violation of       50,000  For each           1988      55,000
   (2)(A   certain                    of the
   )       requirements               first two
           of the                     violation
           Prescription               s in any
           Drug                       10-year
           Marketing                  period
           Act (PDMA)
------------------------------------------------------------------------
  333(b)  Violation of    1,000,000  For each           1988   1,100,000
   (2)(B   certain                    violation
   )       requirements               after the
           of the PDMA                second
                                      convictio
                                      n in any
                                      10-year
                                      period
------------------------------------------------------------------------
  333(b)  Violation of      100,000  Per                1988     110,000
   (3)     certain                    violation
           requirements
           of the PDMA
------------------------------------------------------------------------
  333(f)  Violation of       15,000  Per                1990      15,000
   (1)(A   certain                    violation
   )       requirements
           of the Safe
           Medical
           Devices Act
           (SMDA)
------------------------------------------------------------------------

[[Page 67095]]

 
  333(f)  Violation of    1,000,000  For the            1990   1,100,000
   (1)(A   certain                    aggregate
   )       requirements               of
           of the SMDA                violation
                                      s
------------------------------------------------------------------------
  333(f)  Violation of       50,000  Per                1996      55,000
   (2)(A   certain                    individua
   )       requirements               l
           of the Food
           Quality
           Protection
           Act of 1996
           (FQPA)
------------------------------------------------------------------------
  333(f)  Violation of      250,000  Per ``any          1996     275,000
   (2)(A   certain                    other
   )       requirements               person''
           of the FQPA
------------------------------------------------------------------------
  333(f)  Violation of      500,000  For all            1996     550,000
   (2)(A   certain                    violation
   )       requirements               s
           of the FQPA                adjudicat
                                      ed in a
                                      single
                                      proceedin
                                      g
------------------------------------------------------------------------
  335b(a  Violation of      250,000  Per                1992     275,000
   )       certain                    violation
           requirements               for an
           of the                     individua
           Generic Drug               l
           Enforcement
           Act of 1992
           (GDEA)
------------------------------------------------------------------------
  335b(a  Violation of    1,000,000  Per                1992   1,100,000
   )       certain                    violation
           requirements               for ``any
           of the GDEA                other
                                      person''
------------------------------------------------------------------------
  360pp(  Violation of        1,000  Per                1968       1,000
   b)(1)   certain                    violation
           requirements               per
           of the                     person
           Radiation
           Control for
           Health and
           Safety Act
           of 1968
           (RCHSA)
------------------------------------------------------------------------
  360pp(  Violation of      300,000  For any            1968     325,000
   b)(1)   certain                    related
           requirements               series of
           of the RCHSA               violation
                                      s
------------------------------------------------------------------------
42 U.S.C.
------------------------------------------------------------------------
  263b(h  Violation of       10,000  Per                1992      10,000
   )(3)    certain                    violation
           requirements
           of the
           Mammography
           Quality
           Standards
           Act of 1992
           and the
           Mammography
           Quality
           Standards
           Act of 1998
------------------------------------------------------------------------
  300aa-  Violation of      100,000  Per                1986     110,000
   28(b)   certain                    occurrenc
   (1)     requirements               e
           of the
           National
           Childhood
           Vaccine
           Injury Act
           of 1986
------------------------------------------------------------------------

    In several cases, the adjusted civil monetary penalty was subject 
to the FCPIAA's provision restricting the initial adjustment to no more 
than 10 percent of the penalty. In several other cases, the adjusted 
civil monetary penalty did not change from the current civil monetary 
penalty.

II. What Would the Proposed Rule Do?

    The proposal would amend our civil money penalties hearing 
regulations in part 17 (21 CFR part 17) to establish a new Sec.  17.2, 
entitled ``Maximum Penalty Amounts,'' to show the current maximum civil 
monetary penalty amounts that were adjusted under the FCPIAA. Proposed 
Sec.  17.2 would be similar to the table shown in section I of this 
document, except that the proposal would use a yet-to-be-determined 
date as the ``Date of Last Penalty Figure or Adjustment'' because that 
date would reflect a final rule's effective date and, at this time, we 
cannot predict when we would issue a final rule.
    We would revise the table in Sec.  17.2, as required by the FCPIAA, 
at least once every 4 years.
    The proposal would also revise Sec.  17.1 which lists, in part, 
statutory provisions that authorize civil money penalties that are 
governed by the civil money penalty regulations. The proposed revision 
would simply update the statutory citations because some provisions 
have been renumbered since the last time we amended Sec.  17.1.
    We also note that section 351(d)(2) of the PHS Act (42 U.S.C. 
262(d)(2)) authorizes a civil monetary penalty for certain violations 
of the PHS Act. We have omitted section 351(d)(2) of the PHS Act from 
this proposal because, unlike the other civil monetary penalty 
provisions, section 351(d)(2) of the PHS Act is self-adjusting so that 
the maximum civil monetary penalty amount increases annually. Section 
351(d)(2) of the PHS Act, when first enacted in 1986, provided for a 
maximum civil penalty of up to $100,000 per day of violation. By using 
the adjustment formula prescribed in section 351(d)(2) of the PHS Act, 
we calculate the adjusted maximum civil penalty amount for section 
351(d)(2) of the PHS Act to be $151,637.28 per day of violation.

III. Environmental Impact

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

IV. Paperwork Reduction Act 1995

    We tentatively conclude that the civil monetary penalties 
adjustments in this proposed rule are not subject to review

[[Page 67096]]

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). The adjustments do not require disclosure of any 
information to FDA, third parties, or the public.

V. Federalism

    We have analyzed this proposed rule in accordance with the 
principles set forth in Executive Order 13132. We have determined that 
the rule does not contain policies that have substantial direct effects 
on the States, on the relationship between the National Government and 
the States, or on the distribution of power and responsibilities among 
the various levels of government. Accordingly, we have concluded that 
the rule does not contain policies that have federalism implications as 
defined in the Executive order and, consequently, a federalism summary 
impact statement is not required.

VI. Analysis of Impacts

    We have examined the impacts of the proposed rule under Executive 
Order 12866 and the Regulatory Flexibility Act (5 U.S.C. 601-612), and 
the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). Executive 
Order 12866 directs agencies to assess all costs and benefits of 
available regulatory alternatives and, when regulation is necessary, to 
select regulatory approaches that maximize net benefits (including 
potential economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity). We believe that this 
proposed rule is consistent with the regulatory philosophy and 
principles identified in the Executive order. In addition, the proposed 
rule is not a significant regulatory action as defined by the Executive 
order and so is not subject to review under the Executive order.
    The Regulatory Flexibility Act requires agencies to analyze 
regulatory options that would minimize any significant impact of a rule 
on small entities. Because the proposed rule would simply adjust the 
maximum amount of civil monetary penalties administered by FDA, and 
because the adjustment is required by the FCPIAA, we certify that the 
proposed rule will not have a significant economic impact on a 
substantial number of small entities. Therefore, under the Regulatory 
Flexibility Act, no further analysis is required.

VII. Comments

    Interested persons may submit to the Division of Dockets Management 
(see ADDRESSES) written or electronic comments regarding this document. 
Submit a single copy of electronic comments or two paper copies of any 
mailed comments, except that individuals may submit one paper copy. 
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.

List of Subjects in 21 CFR Part 17

    Administrative practice and procedure, Penalties.
    Therefore, under the Federal Food, Drug, and Cosmetic Act and the 
Public Health Service Act, and under authority delegated to the 
Commissioner of Food and Drugs, it is proposed that 21 CFR part 17 be 
amended as follows:

PART 17--CIVIL MONEY PENALTIES HEARINGS

    1. The authority citation for 21 CFR part 17 continues to read as 
follows:

    Authority: 21 U.S.C. 331, 333, 337, 351, 352, 355, 360, 360c, 
360f, 360i, 360j, 371; 42 U.S.C. 262, 263b, 300aa-28; 5 U.S.C. 554, 
555, 556, 557.
    2. Section 17.1 is amended by revising paragraph (a), redesignating 
paragraphs (d) through (f) as paragraphs (e) through (g), adding new 
paragraph (d), and revising newly redesignated paragraphs (e), (f), and 
(g) to read as follows:


Sec.  17.1  Scope.

* * * * *
    (a) Section 303(b)(2) and (b)(3) of the Federal Food, Drug, and 
Cosmetic Act (the act) authorizing civil money penalties for certain 
violations of the act that relate to prescription drug marketing 
practices.
* * * * *
    (d) Section 539(b)(1) of the act authorizing civil money penalties 
for certain violations of the act that relate to electronic products.
    (e) Section 351(d)(2) of the Public Health Service Act (the PHS 
Act) authorizing civil money penalties for violations of biologic 
recall orders.
    (f) Section 354(h)(3) of the PHS Act, as amended by the Mammography 
Quality Standards Act of 1992 and the Mammography Quality Standards Act 
of 1998, authorizing civil money penalties for failure to obtain a 
certificate and failure to comply with established standards, among 
other things.
    (g) Section 2128(b)(1) of the PHS Act authorizing civil money 
penalties for intentionally destroying, altering, falsifying, or 
concealing any record or report required to be prepared, maintained, or 
submitted by vaccine manufacturers under section 2128 of the PHS Act.
    3. Section 17.2 is added to read as follows:


Sec.  17.2  Maximum penalty amounts.

    The following table shows maximum civil monetary penalties 
associated with the statutory provisions authorizing civil monetary 
penalties under the Federal Food, Drug, and Cosmetic Act or the Public 
Health Service Act.

          Civil Monetary Penalties Authorities Administered by FDA and Adjusted Maximum Penalty Amounts
----------------------------------------------------------------------------------------------------------------
                                                    Current                                            Adjusted
                                                    Maximum                             Date of Last    Maximum
   U.S.C. Section      Description of Violation     Penalty      Assessment Method        Penalty       Penalty
                                                  Amount (in                             Figure or    Amount (in
                                                   dollars)                            Adjustment\1\   dollars)
----------------------------------------------------------------------------------------------------------------
(a) 21 U.S.C.
----------------------------------------------------------------------------------------------------------------
  (1) 333(b)(2)(A)    Violation of certain            50,000  For each of the first            ----       55,000
                       requirements of the                     two violations in any
                       Prescription Drug                       10-year period
                       Marketing Act (PDMA)
----------------------------------------------------------------------------------------------------------------
  (2) 333(b)(2)(B)    Violation of certain         1,000,000  For each violation               ----    1,100,000
                       requirements of the PDMA                after the second
                                                               conviction in any 10-
                                                               year period
----------------------------------------------------------------------------------------------------------------

[[Page 67097]]

 
  (3) 333(b)(3)       Violation of certain           100,000  Per violation                    ----      110,000
                       requirements of the PDMA
----------------------------------------------------------------------------------------------------------------
  (4) 333(f)(1)(A)    Violation of certain            15,000  Per violation                    ----       15,000
                       requirements of the Safe
                       Medical Devices Act
                       (SMDA)
----------------------------------------------------------------------------------------------------------------
  (5) 333(f)(1)(A)    Violation of certain         1,000,000  For the aggregate of             ----    1,100,000
                       requirements of the SMDA                violations
----------------------------------------------------------------------------------------------------------------
  (6) 333(f)(2)(A)    Violation of certain            50,000  Per individual                   ----       55,000
                       requirements of the Food
                       Quality Protection Act of
                       1996 (FQPA)
----------------------------------------------------------------------------------------------------------------
  (7) 333(f)(2)(A)    Violation of certain           250,000  Per ``any other                  ----      275,000
                       requirements of the FQPA                person''
----------------------------------------------------------------------------------------------------------------
  (8) 333(f)(2)(A)    Violation of certain           500,000  For all violations               ----      550,000
                       requirements of the FQPA                adjudicated in a
                                                               single proceeding
----------------------------------------------------------------------------------------------------------------
  (9) 335b(a)         Violation of certain           250,000  Per violation for an             ----      275,000
                       requirements of the                     individual
                       Generic Drug Enforcement
                       Act of 1992 (GDEA)
----------------------------------------------------------------------------------------------------------------
  (10) 335b(a)        Violation of certain         1,000,000  Per violation for ``any          ----    1,100,000
                       requirements of the GDEA                other person''
----------------------------------------------------------------------------------------------------------------
  (11) 360pp(b)(1)    Violation of certain             1,000  Per violation per                ----        1,000
                       requirements of the                     person
                       Radiation Control for
                       Health and Safety Act of
                       1968 (RCHSA)
----------------------------------------------------------------------------------------------------------------
  (12) 360pp(b)(1)    Violation of certain           300,000  For any related series           ----      325,000
                       requirements of the RCHSA               of violations
----------------------------------------------------------------------------------------------------------------
(b) 42 U.S.C.
----------------------------------------------------------------------------------------------------------------
  (1) 263b(h)(3)      Violation of certain            10,000  Per violation                    ----       10,000
                       requirements of the
                       Mammography Quality
                       Standards Act of 1992 and
                       the Mammography Quality
                       Standards Act of 1998
----------------------------------------------------------------------------------------------------------------
  (2) 300aa-28(b)(1)  Violation of certain           100,000  Per occurrence                   ----      110,000
                       requirements of the
                       National Childhood
                       Vaccine Injury Act of
                       1986
----------------------------------------------------------------------------------------------------------------
\1\ Dates to-be-determined by the effective date of a final rule.


    Dated: October 11, 2003.
Jeffrey Shuren,
Assistant Commissioner for Policy.
[FR Doc. 03-29741 Filed 11-28-03; 8:45 am]
BILLING CODE 4160-01-S