[Federal Register Volume 76, Number 4 (Thursday, January 6, 2011)]
[Proposed Rules]
[Pages 737-744]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-34]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
21 CFR Parts 16 and 1107
[Docket No. FDA-2010-N-0646]
RIN 0910-AG39
Tobacco Products, Exemptions From Substantial Equivalence
Requirements
AGENCY: Food and Drug Administration, HHS.
ACTION: Proposed rule.
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SUMMARY: The Food and Drug Administration (FDA) is issuing this
proposed rule to establish procedures for requesting an exemption from
the substantial equivalence requirements of the Family Smoking
Prevention and Tobacco Control Act (Tobacco Control Act). The proposed
rule would describe the process and statutory criteria for requesting
an exemption and explain how FDA would review requests for exemptions.
Once finalized, this regulation will satisfy the requirement in the
Tobacco Control Act that FDA issue regulations implementing the
exemption provision.
DATES: Submit either electronic or written comments on the proposed
rule by March 22, 2011. Submit comments on information collection
issues under the Paperwork Reduction Act of 1995 by February 7, 2011,
(see the ``Paperwork Reduction Act of 1995'' section of this document).
[[Page 738]]
ADDRESSES: You may submit comments, identified by [Docket No. FDA-2010-
N-0646 and/or RIN number 0910-AG39], by any of the following methods,
except that comments on information collection issues under the
Paperwork Reduction Act of 1995 must be submitted to the Office of
Regulatory Affairs, Office of Management and Budget (OMB) (see the
``Paperwork Reduction Act of 1995'' section of this document).
Electronic Submissions
Submit electronic comments in the following way:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Written Submissions
Submit written submissions in the following ways:
FAX: 301-827-6870.
Mail/Hand delivery/Courier (for paper, disk, or CD-ROM
submissions): Division of Dockets Management (HFA-305), Food and Drug
Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852.
Instructions: All submissions received must include the Agency name
and Docket No. and Regulatory Information Number (RIN) for this
rulemaking. All comments received may be posted without change to
http://www.regulations.gov, including any personal information
provided. For additional information on submitting comments, see the
``Comments'' heading of the SUPPLEMENTARY INFORMATION section of this
document.
Docket: For access to the docket to read background documents or
comments received, go to http://www.regulations.gov and insert the
docket number, found in brackets in the heading of this document, into
the ``Search'' box and follow the prompts and/or go to the Division of
Dockets Management, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852.
FOR FURTHER INFORMATION CONTACT: Annette Marthaler, Center for Tobacco
Products, Food and Drug Administration, 9200 Corporate Blvd.,
Rockville, MD 20850-3229, 877-287-1373, [email protected].
SUPPLEMENTARY INFORMATION:
I. Background
The Tobacco Control Act, enacted on June 22, 2009, amends the
Federal Food, Drug, and Cosmetic Act (the FD&C Act) and provides FDA
with the authority to regulate tobacco products (Pub. L. 111-31, 123
Stat. 1776). Among other things, the Tobacco Control Act requires that,
before a new tobacco product may be introduced or delivered for
introduction into interstate commerce, one of the following must occur:
(1) A premarket application under section 910(b) of the FD&C Act (21
U.S.C. 387j(b)) must be submitted to FDA, and FDA must issue an order
finding that the new product may be introduced or delivered for
introduction into interstate commerce under 910(c) of the FD&C Act; or
(2) a report under section 905(j) of the FD&C Act (21 U.S.C. 387e(j))
demonstrating the new tobacco product's substantial equivalence to an
appropriate predicate product (as defined in the FD&C Act) must be
submitted and FDA must issue an order finding the new product to be
substantially equivalent to the predicate product and in compliance
with the requirements of the Tobacco Control Act (section 910(a)(2) of
the FD&C Act). Section 905(j)(3) of the FD&C Act, as amended, states
that FDA may exempt tobacco products that are modified by adding or
deleting a tobacco additive, or increasing or decreasing the quantity
of an existing tobacco additive, from the requirement of demonstrating
substantial equivalence if the Agency determines that: (1) Such
modification would be a minor modification of a tobacco product that
can be sold under the FD&C Act, (2) a report demonstrating substantial
equivalence is not necessary to ensure that permitting the product to
be marketed would be appropriate for the protection of the public
health, and (3) an exemption is otherwise appropriate. Section
905(j)(3)(B) of the FD&C Act requires FDA to issue regulations
implementing this provision by July 1, 2011.
``Additive'' is defined at section 900(1) of the FD&C Act, as ``any
substance the intended use of which results or may reasonably be
expected to result, directly or indirectly, in its becoming a component
or otherwise affecting the characteristic of any tobacco product
(including any substances intended for use as a flavoring or coloring
or in producing, manufacturing, packing, processing, preparing,
treating, packaging, transporting, or holding), except that such term
does not include tobacco or a pesticide chemical residue in or on raw
tobacco or a pesticide chemical'' (21 U.S.C. 387(1)).
The proposed rule, if finalized, would establish a pathway for
manufacturers, including importers, to request exemptions from the
substantial equivalence requirements of the Tobacco Control Act. It
would not establish categories of minor modifications, or identify
specific modifications, that meet the statutory criteria for
exemptions. As FDA acquires more information about the additives in
tobacco products from which to establish such categorical exemptions,
it may issue additional regulations or guidance. FDA requests comment
on how best to establish categories for these exemptions.
A manufacturer who obtains an exemption under the procedures of
this proposed rule is also required to report to FDA under
905(j)(1)(A)(ii) of the FD&C Act (this requirement is not addressed in
this proposed rule). Section 905(j)(1)(A)(ii) of the FD&C Act requires
the manufacturer to report at least 90 days prior to introducing or
delivering for introduction into interstate commerce the tobacco
product that is the subject of the exemption, the basis for the
manufacturer's determination that ``the tobacco product is modified
within the meaning of [section 905(j)(3)], the modifications are to a
product that is commercially marketed and in compliance with the
requirements of this Act, and all of the modifications are covered by
exemptions granted by FDA pursuant to [section 905(j)(3)]'' (section
905(j)(1)(A)(ii) of the FD&C Act). In addition, this submission must
describe ``action taken by [the applicant] to comply with the
requirements under section 907 that are applicable to the tobacco
product'' (section 905(j)(1)(B) of the FD&C Act).
The proposed rule includes a procedural mechanism for rescinding an
exemption where necessary to protect the public health. Before
rescinding an exemption, FDA proposes to provide the manufacturer
notice of the proposed rescission and an opportunity for an informal
hearing under part 16 (21 CFR part 16), unless the continuance of the
exemption presents a serious risk to public health. If the continuance
of the exemption presents a serious risk to public health, FDA would
rescind the exemption prior to giving notice and an opportunity for a
hearing, and provide notice and opportunity for an informal hearing
under part 16 as quickly as possible following the rescission.
II. Overview of the Proposed Rule
As required by section 905(j)(3)(B) of the FD&C Act, this rule
would implement section 905(j)(3) of the FD&C Act. Specifically, the
rule would provide that FDA may exempt tobacco products that are
modified by adding or deleting a tobacco additive, or increasing or
decreasing the quantity of an existing tobacco additive, if FDA
determines that the modification would be a minor modification of a
tobacco product that can be sold under the FD&C Act; a 905(j) report
demonstrating
[[Page 739]]
substantial equivalence to a predicate tobacco product is not necessary
to ensure that permitting the tobacco product to be marketed would be
appropriate for protection of the public health; and an exemption is
otherwise appropriate. These criteria are specified in the statute.
The proposed rule also explains that an exemption request may be
made only by the manufacturer of a legally, commercially marketed
tobacco product for a minor modification to that manufacturer's
product. FDA is proposing this requirement because it believes that
only the manufacturer of the product being modified will have, and be
able to provide to FDA, sufficient and complete information about the
product and the proposed modification. This includes information about
a tobacco product that is trade secret or confidential commercial
information and available only to the manufacturer of the product. Such
information is necessary to allow FDA to determine whether the tobacco
product and modification satisfy the criteria for exemption.
The proposed rule would also require that the exemption request
(and supporting information) be submitted in an electronic format that
FDA can process, review, and archive. FDA intends to provide and update
information on its website on how manufactures may provide the
electronic submission to FDA (e.g., information on electronic media and
methods of transmission). The proposed rule would also require that the
exemption request be legible (FDA must be able to read the document)
and in English. These requirements would ensure that FDA could review
the exemption request expeditiously and appropriately. Electronic
submission of information is consistent with the Government Paperwork
Elimination Act (Pub. L. 105-277) requirement that Federal agencies
allow individuals or entities to submit information or transact
business with the agency electronically. Because of the broad
availability of the Internet, FDA does not anticipate any need to
submit an exemption request and supporting information in a non-
electronic format. However, a company that is not able to submit an
exemption request in an electronic format may submit a written request
to the Center for Tobacco Products explaining in detail why the company
cannot submit the request in an electronic format and requesting an
alternative format.
The proposed rule would require that an exemption request be
submitted with supporting documentation and contain the manufacturer's
address and contact information; a detailed explanation of the purpose
for the modification; a detailed description of the modification,
including whether the modification involves adding or deleting a
tobacco additive, or increasing or decreasing the quantity of an
existing tobacco additive; a detailed explanation of why the
modification is considered a minor modification of a tobacco product
that can be sold under the FD&C Act; a detailed explanation of why a
report intended to demonstrate substantial equivalence is not necessary
to ensure that permitting the tobacco product to be marketed would be
appropriate for the protection of public health; a certification by a
responsible official of the company, such as the chief executive
officer, summarizing the supporting evidence and providing the
rationale for the official's determination that the modification will
not increase the product's toxicity, addictiveness, or appeal to or use
by minors; and other information justifying an exemption.
The rule would require the submission of this information, along
with supporting documentation, to enable FDA to determine whether an
exemption from having to demonstrate substantial equivalence to an
appropriate predicate product would be appropriate for the protection
of the public health, as required by the statute (section 905(j)(3) of
the FD&C Act). FDA requests comment on what supporting information
would be necessary for us to make these determinations. The proposed
rule would also require a certification in the form of a signed
statement by a responsible official of the company, summarizing the
supporting evidence and providing the rationale for the official's
determination that the modification will not increase the product's
toxicity, addictiveness, or appeal to or use by minors. Because of the
importance of this information to an exemption determination, FDA is
proposing to require that a responsible official of the company, such
as the chief executive officer, certify that the modification will not
have these effects.
The proposed regulation explains that FDA would review the
information submitted in support of the request and determine whether
to grant or deny the request for an exemption based on whether the
criteria in the statute are satisfied. The proposed rule also provides
that, if FDA determines that the information submitted by the
manufacturer is insufficient to enable it to determine whether an
exemption is appropriate, FDA may request additional information from
the manufacturer. The rule would also provide that if the manufacturer
fails to respond within the timeframe requested, FDA will consider the
exemption request withdrawn. An exemption determination will be
publicly available consistent with the requirements of part 20 (21 CFR
part 20); trade secret and confidential commercial information are
exempted from disclosure requirements consistent with Sec. 20.61.
As discussed earlier in this document, the proposed rule includes a
provision expressly permitting FDA to rescind an exemption if the
Agency determines that rescission is necessary to protect the public
health. FDA believes it is important that it be able to rescind
exemptions in circumstances where the exemption is not appropriate for
the public health, such as when FDA's decision to grant an exemption
was based on false or incomplete information. FDA is proposing to
provide notice and an opportunity for an informal hearing under part 16
to the manufacturer who requested the exemption prior to rescinding an
exemption. If, however, the continuance of the exemption presents a
serious risk to public health, the proposed rule provides that FDA
could rescind the exemption before providing notice and an opportunity
for a hearing. In that case, FDA would provide the manufacturer notice
and an opportunity for a hearing as soon as possible after the
rescission.
Consistent with the requirements of the FD&C Act, FDA intends to
provide technical and other nonfinancial assistance to small tobacco
product manufacturers in complying with the premarket requirements of
sections 905 and 910 of the FD&C Act, along with other requirements
(section 901(f) of the FD&C Act). FDA requests comment on what
technical assistance or guidance would be helpful to small
manufacturers in complying with these requirements. Small tobacco
product manufacturers may contact FDA at [email protected]
for assistance.
III. Effective Date
FDA proposes that any final rule that issues based on this proposal
become effective 30 days after the final rule publishes in the Federal
Register.
IV. Legal Authority
Section 905(j)(3)(B) of the FD&C Act requires that FDA issue
regulations to implement the provision on exemptions from the
substantial equivalence requirements of the Tobacco Control Act.
Section 905(j)(3)(A) of the FD&C Act provides that FDA may exempt from
[[Page 740]]
the requirements relating to the demonstration of substantial
equivalence tobacco products that are modified by adding or deleting a
tobacco additive, or increasing or decreasing the quantity of an
existing tobacco additive, if FDA determines the modification would be
a minor modification of a tobacco product that can be sold under the
FD&C Act; a report is not necessary to ensure that permitting the
tobacco product to be marketed would be appropriate for protection of
the public health; and an exemption is otherwise appropriate. FDA is
issuing this proposed rule as required by section 905(j)(3)(B) of the
FD&C Act. Additionally, section 701(a) of the FD&C Act (21 U.S.C. 371)
gives FDA general rulemaking authority to issue regulations for the
efficient enforcement of the FD&C Act.
V. Environmental Impact
The Agency has determined under 21 CFR 25.30(h) that this action is
of a type that does not individually or cumulatively have a significant
effect on the human environment. Therefore, neither an environmental
assessment nor an environmental impact statement is required.
VI. Analysis of Impacts
A. Introduction
FDA has 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 (Pub. L. 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). The agency believes that
this proposed rule is not a significant regulatory action as defined by
the Executive order.
The Regulatory Flexibility Act requires Agencies to analyze
regulatory options that would minimize any significant impact of a rule
on small entities. The Tobacco Control Act requires that tobacco
product manufacturers obtain either a marketing authorization order
under section 910(c) or an order under section 910(a)(2) finding the
new tobacco product to be substantially equivalent to an appropriate
predicate tobacco product before introducing a new product into
interstate commerce. Although this requirement is costly, the option of
requesting an exemption as set forth in this proposed rule provides a
mechanism for potentially reducing costs. If manufacturers of new
tobacco products do not expect this option to reduce costs associated
with their new product submissions, they will choose not to use it. The
Agency therefore proposes to certify that the rule will not have a
significant economic impact on a substantial number of small entities.
Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires
that Agencies prepare a written statement, which includes an assessment
of anticipated costs and benefits, before proposing ``any rule that
includes any Federal mandate that may result in the expenditure by
State, local, and tribal governments, in the aggregate, or by the
private sector, of $100,000,000 or more (adjusted annually for
inflation) in any one year.'' The current threshold after adjustment
for inflation is $135 million, using the most current (2009) Implicit
Price Deflator for the Gross Domestic Product. FDA does not expect this
proposed rule to result in any 1-year expenditure that would meet or
exceed this amount.
B. Baseline
FDA compares the effects of this rule to a baseline we will refer
to as the post-statute baseline. Under the Tobacco Control Act, in the
absence of this or other rulemaking under section 905(j)(3), tobacco
product manufacturers must submit to FDA either a premarket application
or a report under section 905(j) demonstrating substantial equivalence
to an appropriate predicate product, and FDA must issue the appropriate
corresponding order before a new tobacco product may be introduced or
delivered for introduction into interstate commerce. Although
substantial equivalence requirements are not yet in effect, the
statutory grace period ends on March 22, 2011. The statutory deadline
for issuing regulations under section 905(j)(3) is July 1, 2011, after
the end of the grace period. Therefore, under the post-statute baseline
we assume that requirements to report under 905(j) will be in effect.
Compared with the cost associated with the post-statute baseline, this
rule may result in cost savings if some tobacco manufacturers request,
and are granted, substantial equivalence exemptions. If for any reason
this proposed rule is finalized before the substantial equivalence
requirements go into effect, it would simply have no effect until such
time that they do.
C. Number of Affected Entities
This proposed rule may potentially apply to any tobacco product
manufacturer or importer whose products are regulated under the Tobacco
Control Act. Statistics of U.S. Businesses data indicate that there are
20 cigarette manufacturers and 46 other tobacco product manufacturers
(U.S. Census, 2009). Because other tobacco product manufacturers would
include cigar and pipe tobacco manufacturers, not all 46 firms
represent manufacturers that are currently regulated under the Tobacco
Control Act.\1\ An unknown number of importers would be affected.\2\
Not all new tobacco products are expected to meet the statutory
requirements for an exemption. Furthermore, FDA is not establishing
categories of minor modifications, or identifying specific
modifications, that meet the statutory criteria for exemptions. It is
therefore likely that only a subset of the potentially affected
manufacturers and importers would choose to request an exemption.
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\1\ A possible offsetting factor is that these data only include
firms with payroll, and there could be some small tobacco product
manufacturers without payroll.
\2\ Manufacturers, wholesalers, and retailers could all
theoretically import tobacco products. Census data do not
distinguish firms that import from firms that do not.
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D. Number of Exemption Requests
The number of new products introduced in a given year is the
theoretical maximum number that could be introduced under a substantial
equivalence exemption. However, some new products may not be
substantially equivalent to an appropriate predicate tobacco product
and will require premarket authorization under section 910(c), in which
case they would not be eligible for a substantial equivalence
exemption. The remaining products would require 905(j) reports,
including demonstration of substantial equivalence. Under this proposed
rule, an unknown number of those new 905(j) products would be eligible
for possible introduction into interstate commerce under a substantial
equivalence exemption.
FDA uses scanner data covering late 2007 to late 2009 from AC
Nielsen to estimate the number of new tobacco products introduced in a
year. A Universal Product Code (UPC) is deemed to be introduced in 2008
if total dollar sales over the final weeks of 2007 were zero, but total
dollar sales over 2008 were greater than zero. Because unique UPCs are
assigned to different types of packaging for otherwise identical
products, most new UPCs do not represent new products, but rather
different ways of packaging existing products. To address this issue,
FDA
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sorts the data by brand description, and by product description within
each brand description. The product description varies by UPC and
contains information about both product characteristics and packaging.
Therefore, the product description of every new UPC can be compared
with the product descriptions preceding and following it to determine
whether the new UPC represents a new package for an existing product or
a new product altogether.
Using the scanner data, FDA finds that of 628 new UPCs for
cigarettes in 2008, 151 represent new products not present in the 2007
data. Of 215 new UPCs for chewing tobacco, 43 represent new products.
Of 36 new UPCs for smoking tobacco (excluding pipe tobacco), 20
represent new products.\3\ Of 36 new UPCs for cigarette paper, 19
represent new products. This leads to an estimated 233 new products in
2008. We assume the same average number of new products will continue
to be introduced every year going forward. However, it is also possible
that requirements imposed by the Tobacco Control Act will lead
manufacturers to introduce new products at a lower rate in the future.
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\3\ The smoking tobacco category refers to tobacco products,
other than cigarettes, cigars and accessories, which are intended to
be smoked. Smoking tobacco products are further identified in the
data as cigarette tobacco (roll-your-own), smoking tobacco, or pipe
tobacco. Since pipe tobacco is not currently subject to the Tobacco
Control Act, products clearly identified as such are excluded from
the analysis.
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As outlined previously, some of the estimated 233 new products
introduced annually may require premarket authorization under section
910(c), and exemptions would be requested for an unknown number of the
remaining products. Although in theory the maximum number of requests
equals the number of new products, based on the requirements for an
exemption and experience with other regulated products, FDA estimates
that in the first years after the procedure is in place, only 50
exemption requests will be submitted per year. This may increase over
time as learning takes place. FDA anticipates requesting additional
information to support 40 of those requests.
E. Benefits and Costs
The main effect of this proposed rule would be a potential
reduction in the costs of introducing new tobacco products compared
with the post-statute baseline. Under the baseline scenario, all new
products that do not undergo premarket review under section 910(c) must
submit a report under section 905(j) that includes the basis for
manufacturer's determination that the new tobacco product is
substantially equivalent to an appropriate predicate tobacco product.
If an exemption request is submitted and granted, a manufacturer would
be able to submit a different and potentially shorter 905(j) report in
which, under 905(j)(1)(A)(ii), a discussion of the exemption is used in
place of the demonstration of substantial equivalence. On a per-product
basis, any potential cost savings for the 905(j) report, net of the
cost of requesting the exemption, would be the savings attributable to
this rule.
FDA estimates that it would take 360 hours to prepare an exemption
request. Based on the requirements set forth in the codified language,
FDA anticipates that preparation of most sections would require
technical scientific and engineering expertise. Legal input and review
would also play a role. Therefore, in valuing the time cost, FDA uses
the weighted average of tobacco manufacturing industry-specific hourly
wages for life, physical, and social science occupations ($30.91),
architecture and engineering occupations ($40.93), and legal
occupations ($71.83) (Ref. U.S. BLS, 2010). FDA assigns these
occupational categories weights of 40 percent, 40 percent, and 20
percent. The resulting composite wage is $43.10. FDA then doubles this
amount to $86.20 to account for benefits and overhead. Multiplying by
360 hours yields a cost per exemption request of $31,033. FDA
anticipates that when it asks a manufacturer to provide additional
information in support of an exemption request, it will take an average
of 50 hours to prepare the additional information. Using the same
hourly cost of labor, providing additional information is estimated to
result in an additional cost of $4,310. These are elective costs. Firms
will not choose to submit a request unless any potential cost savings
in a 905(j) report justifies the cost.
Using FDA's estimate that we expect to receive 50 requests per
year, the total cost of all exemption requests submitted would be
$1,551,700. There would be an additional cost of $172,400 if, as
anticipated, we ask for additional information supporting 40 of the 50
requests. FDA requests comment on these cost estimates.
Because substantial equivalence report requirements are not yet
being enforced, and there is no guidance beyond the contents of the
Tobacco Control Act, FDA does not attempt to estimate the cost of
preparing a 905(j) report that includes the demonstration of
substantial equivalence or the cost of preparing a 905(j) report citing
an exemption. Some manufacturers may find that, for a particular
product, preparing a 905(j) report that includes the basis for the
manufacturer's determination that its new tobacco product is
substantially equivalent to an appropriate predicate tobacco product
would be costlier than submitting an exemption request and citing the
exemption in a 905(j) report. Such a manufacturer may consider
submitting an exemption request. If a manufacturer finds that the
exemption process would not reduce costs for legally introducing a new
tobacco product, it would maintain the post-statute status quo and
submit a 905(j) that includes the basis for the manufacturer's
determination that its new tobacco product is substantially equivalent
to an appropriate predicate tobacco product. FDA requests comment on
these conclusions.
In order to grant an exemption, FDA must find, among other things,
that a report demonstrating substantial equivalence would not be
necessary to ensure that permitting the tobacco product to be marketed
would be appropriate for protection of the public health. Furthermore,
an exemption could be rescinded if found to be inappropriate, and the
process for rescission would depend on whether there is a serious risk
to public health. Therefore, FDA does not anticipate that setting up a
mechanism for obtaining substantial equivalence exemptions would result
in costs to public health. FDA requests comment on this approach.
Under this proposed rule, there may be uncertainty on the part of
manufacturers as to what kinds of product modifications may be granted
an exemption and how much supporting evidence will be required as the
basis for an exemption. If some manufacturers are more conservative in
requesting exemptions than FDA would be in granting them, they may not
fully avail themselves of any potential cost savings. Alternatively, if
some manufacturers are too optimistic about what types of modifications
will be exempt, they will incur higher costs because they will have to
demonstrate substantial equivalence in their 905(j) reports in addition
to having submitted unsuccessful exemption requests.
FDA acknowledges the theoretical possibility that overall
submission costs could increase as the result of this uncertainty. This
would happen if so many unsuccessful exemption requests were submitted
that the excess costs
[[Page 742]]
associated with them exceeded any cost savings from exemptions that
were granted. This situation is unlikely to occur, especially as time
goes on and manufacturers gain information on submission costs and the
requirements that must be met for exemptions. Manufacturers might
continue to submit unsuccessful exemption requests, but it would
increasingly be a well-informed choice based on an accurate estimation
of the probability of being granted an exemption and the excess cost of
preparing an unsuccessful request compared with the cost savings
attributable to an exemption. Moreover, it is possible that some of the
information compiled for an exemption request would be reused as part
of a demonstration of substantial equivalence, thus reducing the effort
expended in preparing both types of submissions.
F. Conclusion
In summary, the substantial equivalence exemption requirements laid
out in this proposed rule offer an additional channel for legally
introducing new tobacco products that result from minor modifications
of tobacco products that can be sold under the Tobacco Control Act.
Introducing a new product through this channel may potentially reduce
costs. If manufacturers find that obtaining an exemption would not
reduce costs, or if they do not want to risk having to demonstrate
substantial equivalence in their 905(j) reports in addition to having
submitted unsuccessful exemption requests, they may choose to maintain
the post-statute status quo and not pursue substantial equivalence
exemptions.
VII. Paperwork Reduction Act of 1995
This proposed rule contains information collection provisions that
are subject to review by OMB under the Paperwork Reduction Act of 1995
(the PRA) (44 U.S.C. 3501-3520). A description of these provisions is
given below with an estimate of the annual reporting burden. Included
in the estimate is the time for reviewing instructions, searching
existing data sources, gathering the data needed, and completing and
reviewing each collection of information. FDA requests comment on the
burden and practical utility of the information being requested.
Comment is also requested on whether the information being requested is
duplicative of other collections.
Title: Exemptions From Substantial Equivalence Requirements for
Tobacco Products.
Description: In this proposed rule, a pathway would be established
by FDA for manufacturers to request exemptions from the substantial
equivalence requirements of the Tobacco Control Act. As it acquires
more information about the additives in tobacco products from which to
establish categories of exemptions, FDA may issue additional
regulations or guidance on this subject.
This rule would implement section 905(j)(3) of the FD&C Act,
allowing FDA to exempt tobacco products that are modified by adding or
deleting a tobacco additive, or increasing or decreasing the quantity
of an existing tobacco additive, if FDA determines that the
modification would be a minor modification of a tobacco product that
can be sold under the FD&C Act. The rule also explains that an
exemption request may be made only by the manufacturer of a legally
marketed tobacco product for a minor modification to that
manufacturer's product and the request (and supporting information)
must be submitted in an electronic format that FDA can process, review,
and archive. In addition, the request and all supporting information
must be legible and in (or translated into) the English language.
Under the proposal, an exemption request must be submitted with
supporting documentation and contain the manufacturer's address and
contact information, information about the modification; and an
explanation of why a report intended to demonstrate substantial
equivalence is not necessary. The request must also contain a
certification by a responsible official summarizing the supporting
evidence and providing the rationale for the official's determination
that the modification will not increase the product's toxicity,
addictiveness, or appeal to/use by minors; and include other
information justifying an exemption. This information would enable FDA
to determine whether the exemption request would be appropriate for the
protection of the public health.
This proposed rule also includes a procedural mechanism for
rescinding an exemption where necessary to protect the public health.
In general, FDA would rescind an exemption only after providing the
manufacturer notice of the proposed rescission and an opportunity for
an informal hearing under part 16. However, FDA may rescind an
exemption prior to notice and opportunity for a hearing under part 16
if the continuance of the exemption presents a serious risk to public
health. In that case, FDA would provide the manufacturer an opportunity
for a hearing as soon as possible after the rescission.
FDA would review the information submitted in support of the
request and determine whether to grant or deny the request based on
whether the criteria specified in the statute are satisfied. If FDA
determines that the information submitted is insufficient to enable it
to determine whether an exemption is appropriate, FDA may request
additional information from the manufacturer. If the manufacturer fails
to respond within the timeframe requested, FDA would consider the
exemption request withdrawn.
Description of Respondent: Manufacturers of tobacco products who
are requesting an exemption from the substantial equivalence
requirements of the FD&C Act, as amended by the Tobacco Control Act.
Table 1--Estimated Annual Reporting Burden
----------------------------------------------------------------------------------------------------------------
Annual
21 CFR Section Number of frequency per Total annual Hours per Total hours
respondents response responses response
----------------------------------------------------------------------------------------------------------------
1107.1(b)....................... 50 1 50 360 18,000
1107.1(c)....................... 40 1 40 50 2,000
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Total....................... .............. .............. .............. .............. 20,000
----------------------------------------------------------------------------------------------------------------
Table 1 describes the annual reporting burden as a result of the
provisions set forth in this proposed rule. Based on information
related to premarket provisions for other FDA-regulated products and
anticipated interest from industry in this provision, FDA estimates
that it would receive 50 exemption requests annually and that it
[[Page 743]]
would take a manufacturer 360 hours to prepare an exemption request.
FDA estimates that it would need to request additional data for 40 of
these requests, and that it will take 50 hours to prepare this data.
FDA anticipates using the rescission authority to respond to one issue
of concern related to an exemption determination each year (the burden
hours for 21 CFR 1107.1(d) are included under part 16 hearing
regulations, and are not included in the burden estimates in table 1 of
this document).
The information collection provisions of this proposed rule have
been submitted to OMB for review. Interested persons are requested to
fax comments regarding information collection (see ADDRESSES) to the
Office of Information and Regulatory Affairs, OMB. To ensure that
comments on the information collection are received, OMB recommends
that written comments be faxed to the Office of Information and
Regulatory Affairs, OMB, Attn: FDA Desk Officer, Fax: 202-395-7285, or
e-mailed to [email protected].
VIII. Federalism
FDA has analyzed this proposed rule in accordance with the
principles set forth in Executive Order 13132. FDA has determined that
the proposed rule, if finalized, would not contain policies that would
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, the Agency tentatively concludes that the proposed 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.
IX. Comments
Interested persons may submit to the Division of Dockets Management
(see ADDRESSES) either electronic or written comments regarding this
document. It is only necessary to send one set of comments. It is no
longer necessary to send two copies of mailed comments. Identify
comments 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.
X. References
The following references have been placed on display in the
Division of Dockets Management (see ADDRESSES), and may be seen by
interested persons between 9 a.m. and 4 p.m., Monday through Friday.
(FDA has verified the Web site addresses, but we are not responsible
for any subsequent changes to the Web sites after this document
publishes in the Federal Register.)
1. U.S. Census Bureau, 2007 Economic Census, ``Sector 31: EC0731I1:
Manufacturing: Industry Series: Detailed Statistics by Industry for the
United States: 2007.'' Release Date: October 30, 2009, Access Date:
August 30, 2010, (http://factfinder.census.gov/servlet/IBQTable?_bm=y&-ds_name=EC0731I1&-NAICS2007=312210/312221/312229&-ib_type=NAICS2007&-geo_id=&-_industry=312221&-_lang=en&-fds_name=EC0700A1)
2. U.S. Bureau of Labor Statistics, ``Occupational Employment
Statistics: May 2009 National Industry-Specific Occupational Employment
and Wage Estimates NAICS 312200--Tobacco Manufacturing,'' May 14, 2010,
http://data.bls.gov/cgi-bin/print.pl/oes/current/naics4_312200.htm.
List of Subjects
21 CFR Part 16
Administrative practice and procedure.
21 CFR Part 1107
Tobacco products, Substantial equivalence, Exemptions.
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 parts 16 and 1107 be amended to read as follows:
PART 16--REGULATORY HEARING BEFORE THE FOOD AND DRUG ADMINISTRATION
1. The authority citation for 21 CFR part 16 continues to read as
follows:
Authority: 15 U.S.C. 1451-1461; 21 U.S.C. 141-149, 321-394,
467f, 679, 821, 1034; 28 U.S.C. 2112; 42 U.S.C. 201-262, 263b, 364.
Sec. 16.1 [Amended]
2. In Sec. 16.1 (b)(2) add in numerical sequence ``Sec.
1107.1(d), relating to rescission of an exemption from the requirement
of demonstrating substantial equivalence for a tobacco product.''
3. Add part 1107 to subchapter K to read as follows:
PART 1107--ESTABLISHMENT REGISTRATION, PRODUCT LISTING, AND
SUBSTANTIAL EQUIVALENCE REPORTS
Subpart A--Exemptions
Sec.
1107.1 Exemptions.
Authority: 21 U.S.C. 387e(j) and 387j.
Subpart A--Exemptions
Sec. 1107.1 Exemptions.
(a) General requirements. Under section 905(j)(3) of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 387e(j)(3)), FDA may exempt
from the requirements relating to the demonstration that a tobacco
product is substantially equivalent within the meaning of section 910
of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 387j), tobacco
products that are modified by adding or deleting a tobacco additive, or
increasing or decreasing the quantity of an existing tobacco additive,
if FDA determines that:
(1) Such modification would be a minor modification of a tobacco
product that can be sold under the Federal Food, Drug, and Cosmetic Act
(legally marketed tobacco product);
(2) A report under section 905(j)(1) intended to demonstrate
substantial equivalence is not necessary to ensure that permitting the
tobacco product to be marketed would be appropriate for protection of
the public health; and
(3) An exemption is otherwise appropriate.
(b) Request for an exemption under section 905(j)(3) of the Federal
Food, Drug, and Cosmetic Act. A request for an exemption from the
requirement of demonstrating substantial equivalence may be made only
by the manufacturer of a legally marketed tobacco product for a minor
modification to that tobacco product. To request an exemption, the
manufacturer must submit the request and all information supporting the
request in an electronic format that FDA can process, review, and
archive. If the manufacturer is unable to submit an exemption request
in an electronic format, the manufacturer may submit a written request
to the Center for Tobacco Products explaining in detail why the company
cannot submit the request in an electronic format and requesting an
alternative format. Such request must include an explanation of why an
alternative format is necessary. In addition, the request and all
supporting information must be legible and in the English language. An
exemption request must contain:
[[Page 744]]
(1) The manufacturer's address and contact information;
(2) A detailed explanation of the purpose for the modification;
(3) A detailed description of the modification, including a
statement as to whether the modification involves adding or deleting a
tobacco additive, or increasing or decreasing the quantity of an
existing tobacco additive;
(4) A detailed explanation of why the modification is a minor
modification of a tobacco product that can be sold under the Federal
Food, Drug, and Cosmetic Act;
(5) A detailed explanation of why a report under section 905(j)(1)
of the Federal Food, Drug, and Cosmetic Act intended to demonstrate
substantial equivalence is not necessary to ensure that permitting the
tobacco product to be marketed would be appropriate for protection of
the public health;
(6) A certification (i.e., a signed statement by a responsible
official of the company) summarizing the supporting evidence and
providing the rationale for the official's determination that the
modification does not increase the tobacco product's appeal to/use by
minors, toxicity, or addictiveness/abuse liability; and
(7) Other information justifying an exemption.
(c) Exemption determination. FDA will review the information
submitted and determine whether to grant or deny an exemption request
based on whether the criteria in section 905(j)(3) of the Federal Food,
Drug, and Cosmetic Act are met. FDA may request additional information
if necessary to make a determination. FDA will consider the exemption
request withdrawn if the information is not provided within the
requested timeframe.
(d) Rescission of an exemption. FDA may rescind an exemption if it
finds that the exemption is not appropriate for the protection of
public health. In general, FDA will rescind an exemption only after
notice and opportunity for a hearing under 21 CFR part 16 of this
chapter is provided. However, FDA may rescind an exemption prior to
notice and opportunity for a hearing under 21 CFR part 16 of this
chapter if the continuance of the exemption presents a serious risk to
public health. In that case, FDA will provide the manufacturer an
opportunity for a hearing as soon as possible after the rescission.
Dated: January 3, 2011.
Leslie Kux,
Acting Assistant Commissioner for Policy.
[FR Doc. 2011-34 Filed 1-5-11; 8:45 am]
BILLING CODE 4160-01-P