[Federal Register Volume 69, Number 53 (Thursday, March 18, 2004)]
[Rules and Regulations]
[Pages 12792-12794]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-6094]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Part 203

[Docket No. 1992N-0297]
RIN 0905-AC81


Prescription Drug Marketing Act of 1987; Prescription Drug 
Amendments of1992; Policies, Requirements, and Administrative 
Procedures; Delay of Effective Date; Correction

AGENCY: Food and Drug Administration, HHS.

ACTION: Final rule; delay of effective date; correction.

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SUMMARY: On February 23, 2004 (69 FR 8105), FDA published a delay of 
the effective date of certain requirements in a final rule published in 
the Federal Register of December 3, 1999 (64 FR 67720). FDA is 
correcting typographical errors in the SUMMARY and SUPPLEMENTARY 
INFORMATION sections of the February 23, 2004, document.

FOR FURTHER INFORMATION CONTACT: Aileen H. Ciampa, Center for Drug 
Evaluation and Research (HFD-7), Food and Drug Administration, 5600 
Fishers Lane, Rockville, MD 20857, 301-594-2041.

SUPPLEMENTARY INFORMATION: The SUMMARY and SUPPLEMENTARY INFORMATION 
sections of the document published on February 23, 2004 (69 FR 8105), 
are corrected as follows:
    1. In the second paragraph of the SUMMARY, in the second from last 
sentence, the words ``Therefore, it is necessary to delay the effective 
date of Sec. Sec.  203.3(u) and 203.50 (21 CFR 203.3(u) and 203.50) 
until December 1, 2007 * * *'' is corrected to read ``Therefore, it is 
necessary to delay the effective date of Sec. Sec.  203.3(u) and 203.50 
(21 CFR 203.3(u) and 203.50) until December 1, 2006 * * *''.
    2. In the SUPPLEMENTARY INFORMATION section in the ninth paragraph, 
the last sentence is corrected to read as follows: ``The agency's 
decision to delay the effective date of Sec. Sec.  203.3(u) and 203.50 
was based, in part, on comments received on FDA's Counterfeit Drug Task 
Force's Interim Report (Docket 03N-0361).''
    3. In the SUPPLEMENTARY INFORMATION section, in the tenth 
paragraph, the second from last sentence is corrected to read as 
follows: ``One comment suggested an interim solution of a ``one 
forward, one back'' pedigree for those drugs most likely to be 
counterfeited.''
    4. In the SUPPLEMENTARY INFORMATION section, in the thirteenth 
paragraph, the first two sentences are corrected to read as follows: 
``Although FDA is further delaying the effective date of Sec. Sec.  
203.3(u) and 203.50, the agency encourages wholesalers to provide 
pedigree information that documents the prior history of the product, 
particularly for those drugs most likely to be counterfeited, even when 
such a pedigree is not required by the act. The suggestion from the 
comments that there be a one-forward, one-back pedigree for those drugs 
most likely to be counterfeited until an electronic pedigree is 
uniformly adopted may have some merit.''

    Dated: March 12, 2004.
Jeffrey Shuren,
Assistant Commissioner for Policy.
    For the convenience of the reader, the text of the February 23, 
2004, document as corrected, is reprinted as follows:
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
21 CFR Part 203
[Docket No. 1992N-0297]
RIN 0905-AC81
Prescription Drug Marketing Act of 1987; Prescription Drug 
Amendments of 1992; Policies, Requirements, and Administrative 
Procedures; Delay of Effective Date
AGENCY: Food and Drug Administration, HHS.
ACTION: Final rule; delay of effective date.
SUMMARY: The Food and Drug Administration (FDA) is further delaying 
until December 1, 2006, the effective date of certain requirements 
of a final rule published in the Federal Register of December 3, 
1999 (64 FR 67720). In the Federal Register of May 3, 2000 (65 FR 
25639), the agency delayed until October 1, 2001, the effective date 
of certain requirements in the final rule relating to wholesale 
distribution of prescription drugs by distributors that are not 
authorized distributors of record, and distribution of blood 
derivatives by entities that meet the definition of a ``health care 
entity'' in the final rule. The agency further delayed the effective 
date of these requirements in three subsequent Federal Register 
notices. Most recently, in the Federal Register of January 31, 2003 
(68 FR 4912), FDA delayed the effective date until April 1, 2004. 
This action further delays the effective date of these requirements 
until December 1, 2006. The final rule implements the Prescription 
Drug Marketing Act of 1987 (PDMA), as modified by the Prescription 
Drug Amendments of 1992 (PDA), and the Food and Drug Administration 
Modernization Act of 1997 (the Modernization Act). The agency is 
taking this action to address concerns about the requirements in the 
final rule raised by affected parties.
    As explained in the SUPPLEMENTARY INFORMATIONsection, FDA is 
working with stakeholders through its counterfeit drug initiative to 
facilitate widespread, voluntary adoption of track and trace 
technologies that

[[Page 12793]]

will generate a de facto electronic pedigree, including prior 
transaction history back to the original manufacturer, as a routine 
course of business. If this technology is widely adopted, it is 
expected to help fulfill the pedigree requirements of the PDMA and 
obviate or resolve many of the concerns that have been raised with 
respect to the final rule by ensuring that an electronic pedigree 
travels with a drug product at all times. Therefore, it is necessary 
to delay the effective date of Sec. Sec.  203.3(u) and 203.50 (21 
CFR 203.3(u) and 203.50) until December 1, 2006 to allow 
stakeholders time to continue to move toward this goal. In addition, 
the further delay of the applicability of Sec.  203.3(q) to 
wholesale distribution of blood derivatives by health care entities 
is necessary to give the agency additional time to consider whether 
regulatory changes are appropriate and, if so, to initiate such 
changes.
DATES: The effective date for Sec. Sec.  203.3(u) and 203.50, and 
the applicability of Sec.  203.3(q) to wholesale distribution of 
blood derivatives by health care entities, added at 64 FR 67720, 
December 3, 1999, is delayed until December 1, 2006. Submit written 
or electronic comments by April 23, 2004.
ADDRESSES: Submit written comments to the Division of Dockets 
Management (HFA-305), Food and Drug Administration, 5630 Fishers 
Lane, rm. 1061, Rockville, MD 20857. All comments should be 
identified with the docket number found in brackets in the heading 
of this document. Submit electronic comments to http://www.fda.gov/dockets/ecomments.
FOR FURTHER INFORMATION CONTACT: Aileen H. Ciampa, Center for Drug 
Evaluation and Research (HFD-7), Food and Drug Administration, 5600 
Fishers Lane, Rockville, MD 20857, 301-594-2041.
SUPPLEMENTARY INFORMATION: PDMA (Public Law 100-293) was enacted on 
April 22, 1988, and was modified by the PDA (Public Law 102-353, 106 
Stat. 941) on August 26, 1992. The PDMA, as modified by the PDA, 
amended sections 301, 303, 503, and 801 of the Federal Food, Drug, 
and Cosmetic Act (the act) (21 U.S.C. 331, 333, 353, 381) to, among 
other things, establish requirements for the wholesale distribution 
of prescription drugs and for the distribution of blood derived 
prescription drug products by health care entities.
    On December 3, 1999, the agency published final regulations in 
part 203 (21 CFR part 203) implementing PDMA (64 FR 67720) that were 
to take effect on December 4, 2000. After publication of the final 
rule, the agency received communications from industry, industry 
trade associations, and members of Congress objecting to the 
provisions in Sec. Sec.  203.3(u) and 203.50. Respectively, these 
provisions define the phrase ``ongoing relationship'' as used in the 
definition of ``authorized distributor of record'' and set forth 
requirements regarding an ``identifying statement'' (commonly 
referred to as a ``pedigree'').
    On March 29, 2000, the agency met with representatives from the 
wholesale drug industry and industry associations to discuss their 
concerns. In addition, FDA received a petition requesting that the 
relevant provisions of the final rule be stayed until October 1, 
2001. The agency also received a petition from the Small Business 
Administration requesting that FDA reconsider the final rule and 
suspend its effective date based on the severe economic impact it 
would have on more than 4,000 small businesses.
    In addition to the communications regarding wholesale 
distribution by unauthorized distributors, the agency received 
several letters on, and held several meetings to discuss, the 
implications of the final regulations for blood centers that 
distribute blood derivative products and provide health care to 
hospitals and patients.
    Based on the concerns expressed by industry, industry 
associations, and Congress about implementing Sec. Sec.  203.3(u) 
and 203.50 by the December 4, 2000, effective date, the agency 
delayed the effective date for those provisions until October 1, 
2001 (65 FR 25639). FDA also delayed the applicability of Sec.  
203.3(q) to wholesale distribution of blood derivatives by health 
care entities until October 1, 2001, and reopened the administrative 
record to give interested persons until July 3, 2000, to submit 
written comments. The rest of the regulations took effect on 
December 4, 2000.
    On May 16, 2000, the House Committee on Appropriations (the 
Committee) stated in its report accompanying the Agriculture, Rural 
Development, Food and Drug Administration, and Related Agencies 
Appropriations Bill, 2001 (H. Rept. 106-619), that it supported the 
``recent FDA action to delay the effective date for implementing 
certain requirements of the Prescription Drug Marketing Act until 
October 1, 2001, and reopen the administrative record in order to 
receive additional comments.'' The Committee further stated that it 
``believes the agency should thoroughly review the potential impact 
of the proposed provisions on the secondary wholesale pharmaceutical 
industry.'' The Committee directed the agency to provide a report to 
the Committee summarizing the comments and issues raised and agency 
plans to address the concerns.
    On March 1, 2001, FDA again delayed the effective dates of the 
provisions to allow time for the agency to consider the comments and 
testimony received at an October 27, 2000, public hearing and to 
prepare its report to Congress (65 FR 56480). The agency's report, 
which was submitted to Congress on June 7, 2001, concluded that FDA 
could address some of the concerns raised by the secondary wholesale 
industry and the blood industry through regulatory changes. However, 
to make other changes requested by the secondary wholesale industry, 
Congress would have to amend section 503(e) of the act.
    Since submitting its report to Congress, FDA has delayed the 
effective date of the provisions two more times, most recently until 
April 1, 2004. On both occasions, the effective date was delayed in 
order to give Congress additional time to determine whether 
legislative action was appropriate and to give the agency time to 
consider whether regulatory changes were warranted (67 FR 6645; 68 
FR 4912).
    Today, the agency is further delaying, until December 1, 2006, 
the effective date of Sec. Sec.  203.3(u) and 203.50, and the 
applicability of Sec.  203.3(q) to wholesale distribution of blood 
derivatives by health care entities. The agency's decision to delay 
the effective date of Sec. Sec.  203.3(u) and 203.50 was based, in 
part, on comments received on FDA's Counterfeit Drug Task Force's 
Interim Report (Docket 03N-0361).
    As part of its Counterfeit Drug Initiative, FDA sought comment 
on the most effective ways to achieve the goals of PDMA. In 
particular, given recent or impending advances in technology, the 
agency requested comment on the feasibility of using an electronic 
pedigree in lieu of a paper pedigree. Although many comments 
received by the Task Force supported the use of paper pedigrees for 
their deterrent value and as a means to verify prior sales through 
due diligence, the majority of comments confirmed that significant 
concerns persist regarding the feasibility and limitations of full 
implementation of the PDMA pedigree requirements. Some comments 
suggested a risk-based approach to implementing PDMA, focusing on 
those drugs at high risk for counterfeiting. For example, some 
comments suggested that drugs at high risk for counterfeiting 
maintain a full pedigree that documents all sales and transactions 
back to the manufacturer. One comment suggested an interim solution 
of a ``one forward, one back'' pedigree for those drugs most likely 
to be counterfeited. The majority of comments, however, supported 
the eventual use of an electronic pedigree for all drug products in 
the supply chain and indicated that an electronic pedigree should be 
considered as a long-term solution to fulfilling the PDMA 
requirements codified at Sec.  203.50.
    In response to these comments, FDA is continuing to work closely 
with affected parties to identify and resolve concerns related to 
the implementation of the pedigree requirements of the PDMA. FDA is 
encouraged by the enthusiasm and interest that stakeholders in the 
U.S. drug supply chain have expressed toward the adoption of 
sophisticated track and trace technologies. Although there are 
technical, operational, and regulatory issues that have yet to be 
resolved, these are being considered and addressed by FDA and 
stakeholders. Currently, it appears that industry will migrate 
toward and implement electronic track and trace capability by 2007. 
If this capability is widely adopted, a de facto electronic pedigree 
will follow the product from the place of manufacture through the 
U.S. drug supply chain to the final dispenser. If properly 
implemented, this electronic pedigree could meet the statutory 
requirement in 21 U.S.C. 353(e)(1)(A) that ``each person who is 
engaged in the wholesale distribution of a drug*** who is not the 
manufacturer or authorized distributor of record of such drug*** 
provide to the person who receives the drug a statement (in such 
form and containing such information as the Secretary may require) 
identifying each prior sale, purchase, or trade of such drug 
(including the date of the transaction and the names and addresses 
of all parties to the transaction.)'' The permanent electronic 
pedigree would address the concerns that have been expressed by

[[Page 12794]]

wholesalers, particularly secondary wholesalers, regarding access to 
pedigrees because the required information would travel with the 
product at all times, regardless of whether a party to the 
transaction is an authorized distributor of record.
    Until the electronic pedigree is in widespread use, FDA believes 
that the multi-layer strategies and measures discussed in the FDA's 
Counterfeit Drug Final Report (Final Report) can help reduce the 
likelihood that counterfeit drugs will be introduced into the U.S. 
drug distribution system. These measures, combined with 
implementation of Radio Frequency Identification (RFID) technology, 
could provide effective long-term protections to help minimize the 
number of counterfeit drug products in the U.S. distribution system. 
As discussed in greater detail in the Final Report, such long-term 
measures include the following: Use of authentication technologies 
in products and packaging and labeling, in particular, for drugs 
most likely to be counterfeited; adoption of secure business 
practices by stakeholders; adoption of the revised model rules for 
wholesale distributor licensure by States; stronger criminal 
penalties and enforcement at the State and national levels; and 
education and outreach to stakeholders, including greater 
communication through the counterfeit alert network.
    Although FDA is further delaying the effective date of 
Sec. Sec.  203.3(u) and 203.50, the agency encourages wholesalers to 
provide pedigree information that documents the prior history of the 
product, particularly for those drugs most likely to be 
counterfeited, even when such a pedigree is not required by the act. 
The suggestion from the comments that there be a one-forward, one-
back pedigree for those drugs most likely to be counterfeited until 
an electronic pedigree is uniformly adopted may have some merit. 
However, FDA believes legislative changes would be needed before it 
could adopt such a system.
    To summarize, FDA has concluded that an electronic pedigree 
should accomplish and surpass the goals of PDMA and is potentially a 
more effective solution to tracing the movement of pharmaceuticals 
than a paper pedigree. As stated previously, it appears that 
industry will migrate toward and implement electronic track and 
trace capability by 2007. Therefore, to allow stakeholders to 
continue to move toward this goal, FDA has decided to delay the 
effective date of Sec. Sec.  203.3(u) and 203.50 until December 1, 
2006. Before the effective date, FDA intends to evaluate the 
progress toward implementation of the electronic pedigree and its 
capacity to meet the intent of PDMA, and determine whether to 
further delay the effective date of the regulations or take other 
appropriate regulatory action.
    FDA is also further delaying the applicability of Sec.  203.3(q) 
to wholesale distribution of blood derivatives by health care 
entities. This further delay is necessary to give FDA additional 
time to address concerns about the requirements raised by affected 
parties and consider whether regulatory changes are appropriate and, 
if so, initiate such changes.
    FDA has examined the impacts of this delay of effective date 
under 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 agency believes that this 
action is consistent with the regulatory philosophy and principles 
identified in the Executive order. This action will ease the burden 
on industry by delaying the effect of Sec. Sec.  203.3(u) and 
203.50, and the applicability of Sec.  203.3(q) to wholesale 
distribution of blood derivatives by health care entities while FDA 
works with industry to resolve concerns about these provisions 
either with the implementation of technological solutions 
(Sec. Sec.  203.3(u) and 203.50) or the consideration of possible 
regulatory changes (Sec.  203.3(q)). Thus, this action is not a 
significant action as defined by the Executive order.
    To the extent that 5 U.S.C. 553 applies to this action, it is 
exempt from notice and comment because it constitutes a rule of 
procedure under 5 U.S.C. 553(b)(A). Alternatively, the agency's 
implementation of this action without opportunity for public 
comment, effective immediately upon publication today in the Federal 
Register, is based on the good cause exceptions in 5 U.S.C. 
553(b)(B) and (d)(3). Seeking public comment is impracticable, 
unnecessary, and contrary to the public interest. In addition, given 
the imminence of the current compliance date, seeking prior public 
comment on this delay is contrary to the public interest in the 
orderly issuance and implementation of regulations. Notice and 
comment procedures in this instance would create uncertainty, 
confusion, and undue financial hardship because, during the time 
that the agency would be proposing to extend the compliance date for 
the requirements identified below, those companies affected would 
have to be preparing to comply with the April 1, 2004, compliance 
date. In accordance with 21 CFR 10.40(c)(1), FDA is also providing 
an opportunity for comment on whether this delay should be modified 
or revoked.
    This action is being taken under FDA's authority under 21 CFR 
10.35(a).The Commissioner of Food and Drugs finds that this delay of 
the effective date is in the public interest.
Dated: February 17, 2004
Jeffrey Shuren,
Assistant Commissioner for Policy.
[FR Doc. 04-6094 Filed 3-17-04; 8:45 am]
BILLING CODE 4160-01-S