[Federal Register: February 1, 2006 (Volume 71, Number 21)]
[Proposed Rules]
[Page 5200-5203]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01fe06-16]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
21 CFR Parts 203 and 205
[Docket No. 2005N-0428]
Distribution of Blood Derivatives by Registered Blood
Establishments that Qualify as Health Care Entities; Prescription Drug
Marketing Act of 1987; Prescription Drug Amendments of 1992; Policies,
Requirements and Administrative Procedures
AGENCY: Food and Drug Administration, HHS.
ACTION: Proposed rule.
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SUMMARY: The Food and Drug Administration (FDA) proposes to amend the
regulations to allow certain registered blood establishments that
qualify as health care entities to distribute drug products that are
derivatives of blood (blood derivatives). This proposed rule, which is
specific to registered blood establishments and the distribution of
blood derivatives, if finalized, would amend certain limited provisions
of the regulations implementing the Prescription Drug Marketing Act of
1987 (PDMA), as modified by the Prescription Drug Amendments of 1992
(PDA) and the FDA Modernization Act of 1997. As currently written,
these regulations, among other things, restrict the sale, purchase, or
trade of, or the offer to sell, purchase, or trade, prescription drugs
purchased by hospitals and other health care entities.
DATES: Submit written or electronic comments on the proposed rule by
May 2, 2006.
ADDRESSES: You may submit comments, identified by Docket No. 2005N-
0428, by any of the following methods:
Electronic Submissions
Submit electronic comments in the following ways:
Federal eRulemaking Portal: http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.regulations.gov.
Follow the instructions for submitting comments.
Agency Web site: http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.fda.gov/dockets/ecomments.
Follow the instructions for submitting comments on the agency Web site.
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.
To ensure more timely processing of comments, FDA is no longer
accepting comments submitted to the agency by e-mail. FDA encourages
you to continue to submit electronic comments by using the Federal
eRulemaking Portal or the agency Web site, as described in the
Electronic Submissions portion of this paragraph.
Instructions: All submissions received must include the agency name
and Docket No(s). and Regulatory Information Number (RIN) (if a RIN
number has been assigned) for this rulemaking. All comments received
may be posted without change to http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.fda.gov/ohrms/dockets/default.htm
, 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://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.fda.gov/ohrms/dockets/default.htm
and insert the docket number(s), 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: Kathleen Swisher, Center for Biologics
Evaluation and Research (HFM-17), Food and Drug Administration, 1401
Rockville Pike, suite 200N, Rockville, MD 20852-1448, 301-827-6210.
SUPPLEMENTARY INFORMATION:
I. Background
The 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, amended the Federal Food, Drug, and
Cosmetic Act (the act) to establish restrictions and requirements
relating to various aspects of human prescription drug marketing and
distribution. Among other things, the PDMA prohibited, with certain
exceptions, the sale, purchase, or trade (or offer to sell, purchase,
or trade) of prescription drugs that were purchased by hospitals or
other health care entities. Section 503(c)(3)(A)(ii)(I) of the act (21
U.S.C. 353(c)(3)(A)(ii)(I)). Section 503(c)(3) also states that ``[f]or
purposes of this paragraph, the term `entity' does not include a
wholesale distributor of drugs or a retail pharmacy licensed under
State law * * *.''
In the Federal Register of March 14, 1994 (59 FR 11842), we issued
a proposed rule to implement those PDMA sections that were not
implemented by the final rule of September 14, 1990, that set forth
Federal guidelines for State licensing of wholesale drug distributors
(55 FR 38012). The proposed rule contained provisions on prescription
drug reimportation; wholesale distribution of prescription drugs by
unauthorized distributors; the resale of prescription drugs by
hospitals, health care entities, and charitable institutions; and
distribution of prescription drug samples. After consideration of
comments, we issued a final rule in the Federal Register of December 3,
1999
[[Page 5201]]
(64 FR 67720) (``the final rule''), with an effective date of December
4, 2000.
After publication of the final rule, we received many letters on,
and held several meetings to discuss the implications of, the final
regulations for registered blood establishments that distribute blood-
derived products and provide health care as a service to hospitals and
patients. According to comments received before the final rule took
effect, implementing the final rule as published would interfere with
longstanding relationships between blood centers and other health care
providers such as hospitals, hemophilia treatment centers, and other
providers.
The blood establishment industry asserted that the regulations,
particularly the definition of ``health care entity'' in Sec. 203.3(q)
(21 CFR 203.3(q)), would, to the detriment of the public health,
severely inhibit its ability to provide medical care and services and
might disrupt the distribution of blood derivatives, to what may be
otherwise unserved or inadequately served segments of the public.
Specifically, Sec. 203.20 (21 CFR 203.20) of the final rule as written
states, in relevant part, that no person may sell, purchase, or trade,
or offer to sell, purchase, or trade any prescription drug that was
purchased by a health care entity (Sec. 203.20(a)).
``Health care entity'' is defined in Sec. 203.3(q) as any person
that provides diagnostic, medical, surgical, or dental treatment, or
chronic or rehabilitative care, but does not include any retail
pharmacy or wholesale distributor. That definition specifically states
that, ``A person cannot simultaneously be a `health care entity' and a
retail pharmacy or wholesale distributor.'' ``Wholesale distributor''
is defined in Sec. 203.3(dd) (21 CFR 203.3(dd)) as any person engaged
in wholesale distribution of prescription drugs, and ``wholesale
distribution'' is defined in Sec. 203.3(cc) (21 CFR 203.3(cc)) as
``distribution of prescription drugs to persons other than a consumer
or patient * * *.'' The final rule made clear that those definitions
should be interpreted to mean that an establishment that meets the
definition of a health care entity would not be allowed to engage in
wholesale distribution. The Federal Register of December 3, 1999,
stated ``The agency declines to revise the definition of health care
entity or otherwise revise the proposed rule to permit health care
entities to engage in the wholesale distribution of blood derivatives
or other prescription drug products.'' (64 FR 67720 at 67726).
Thus, under the final rule as written, blood establishments
functioning as health care entities would not be allowed to engage in
wholesale distribution of prescription drugs except for blood and blood
components intended for transfusion, which are exempted from the
regulations under Sec. 203.1 (21 CFR 203.1). As discussed in the
preamble to the final rule (64 FR 67720 at 67725 to 67727), blood
derivatives are not blood components. Therefore, should the final rule
go into effect as written, registered blood establishments that qualify
as health care entities could not distribute blood derivatives.
Blood derivatives that are prescription drugs include the
following: Albumin, antihemophilic factor, Factor IX Complex, alpha-1
anti-tripsin, and immune globulin. Therefore, under the rule as
written, a blood center could not resell blood derivatives to entities
other than consumers or patients and simultaneously provide health
care, such as medical services associated with those products.
On May 3, 2000, we delayed until October 1, 2001, the effective
date of several provisions of the final rule and reopened the
administrative record, giving interested persons until July 3, 2000, to
submit written comments (65 FR 25639). This delay extended to the
definition of ``health care entity'' in Sec. 203.3(q), as applied to
the wholesale distribution of blood derivatives by health care
entities. The purpose of delaying the effective date for these
provisions was to give us time to obtain more information about the
possible consequences of implementing these provisions and to further
evaluate the issues involved (65 FR 25639 at 25641).
On September 19, 2000, we announced a public hearing to discuss
certain requirements of the final rule (65 FR 56480), including the
provisions relating to the distribution of blood derivatives by
entities that meet the definition of ``health care entity.'' We held
the public hearing to develop an adequate factual basis to use to
determine whether it is in the public health interest to modify or
change the requirements in the final rule (65 FR 56480 at 56483).
We developed a list of questions to promote a more useful
discussion at the public hearing. These questions related to: The
distribution systems available for blood derived products; the effect
of the final rule on these distribution systems, including adverse
public health consequences or economic costs; whether excluding blood
derived products from the final rule's restrictions would increase the
risk of distribution of counterfeit, expired, adulterated, misbranded,
or otherwise unsuitable products; and the pricing of blood-derived
products sold to health care entities (65 FR 56480 at 56483) with
regard to blood derivatives, as well as other unrelated issues
associated with wholesale distribution of drugs. This proposed rule
addresses only blood derivatives and does not address the other stayed
requirements in the final rule relating to wholesale distribution of
prescription drugs by distributors that are not authorized distributors
of record (69 FR 8105, February 23, 2004).
The public hearing was held on October 27, 2000, and comments were
accepted until November 20, 2000. In the Federal Register of March 1,
2001, we announced our decision to further delay until April 1, 2002,
the applicability of Sec. 203.3(q) to the wholesale distribution of
blood derivatives by health care entities (66 FR 12850). Further delays
of effective dates followed until December 1, 2006, to give us
additional time to consider whether regulatory changes are appropriate
and, if so, to initiate such changes (67 FR 6645, February 13, 2002; 68
FR 4912, January 31, 2003; 69 FR 8105, February 23, 2004).
We now propose to amend the regulations. The proposed amendments
are narrow and would allow certain registered blood establishments that
qualify as health care entities to distribute blood derivatives.
II. The Blood Establishments' Concerns
In response to the final rule, we received numerous comments
arguing that blood establishments should be allowed to continue
performing both functions of providing health care services and
distributing blood derivatives. Some comments asserted that although
the distribution of derivatives and the provision of health care
services are small parts of a blood establishment's activities, they
are vital to serving public health needs.
At the October 2000 public hearing, we heard from four interested
parties on this subject. Comments asserted that we had reached the
wrong conclusion with respect to restrictions on blood establishments'
activities. In addition to restating earlier objections made in
response to the proposed rule, the comments presented new objections
and new information, including more detailed descriptions of the health
care services they provide and the derivatives they distribute. They
also offered several potential regulatory solutions.
We received no comments taking the position that the regulations
should
[[Page 5202]]
remain unchanged. We received from a national trade organization that
represents blood establishments additional comments about the scope of
products they distribute for treating blood-related disorders, which
include drugs that are not blood derivatives. The comment stated the
exemption should extend to any distribution of blood-related products
by blood centers, not just to blood derivatives because blood centers
also distribute blood-related products not always from human sources.
In this proposed rule, we are seeking additional information on the
distribution of other prescription drug products by registered blood
establishments.
We have considered all comments and have changed our position from
that expressed in the preamble discussion in the December 3, 1999,
final rule (64 FR 67720). We now propose to allow certain registered
blood establishments that qualify as health care entities to distribute
blood derivatives. We are distinguishing blood derivatives from other
prescription drugs when sold, purchased, or traded (or offered to sell,
purchase, or trade) by a registered blood establishment that qualifies
as a health care entity, provided all health care services offered by
the establishment are related to its activities as a registered blood
establishment.
III. The Proposed Amendments
Our current proposal modifies part 203 (21 CFR part 203) to allow a
registered blood establishment \1\ that provides health care services
and that also distributes blood derivatives to continue in both
capacities, as long as the blood establishment does not provide health
care services unrelated to its activities as a registered blood
establishment.
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\1\ Establishment is defined as ``a place of business under one
management at one general physical location. The term includes,
among others, human blood and plasma donor centers, blood banks,
transfusion services, other blood product manufacturers and
independent laboratories that engage in quality control and testing
for registered blood product establishments.'' (Sec. 607.3 (21 CFR
607.3)) All owners or operators of establishments that engage in the
manufacturing of blood products are required to register, under
section 510 of the Federal Food, Drug, and Cosmetic Act (Sec. 607.7
(21 CFR 607.7)).
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We have changed our position from that discussed in the preamble to
the final rule (64 FR 67720 at 67726) because of new information and a
better understanding of the industry and how the final rule, if
enforced, might affect the public health. For example, according to
testimony at the public hearing held on October 27, 2000, ``more than
15 percent of all U.S. blood derivative products are distributed by
community and Red Cross blood centers, with Red Cross alone accounting
for 10 percent.'' \2\ Those blood centers qualify as health care
entities because, in addition to collecting blood and plasma and
distributing blood derivatives, they also provide certain health care
services to the hospitals and health care entities they serve,
including therapeutic phlebotomy, plasma exchange, stem cell and cord
blood collection and processing, and medical expertise on the
appropriate use of the blood derivatives they distribute.\3\ According
to the testimony, the majority of local hospitals do not have that kind
of medical expertise, and as a practical matter could not obtain and
maintain such expertise.\4\
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\2\ U.S. Food and Drug Administration, ``The Prescription Drug
Marketing Act: Report to Congress,'' June 2001, p.17 and p.18.
\3\ Id., at 18.
\4\ Id.
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Prohibiting community and Red Cross blood centers that qualify as
health care entities from distributing blood derivatives would have a
particularly high impact on certain segments of patients. For example,
the Red Cross testified that ``85 percent of their anti-hemophilic
factor is supplied directly to health care entities. They stated that
implementation of the final rule would deny hemophilia patients access
to this product because many treatment centers are smaller entities
that are not supported by large distributors.'' \5\ Additionally, the
Red Cross stated that ``15 percent of their IVIG (intravenous
immunoglobulin) products and 10 percent of their albumin product are
provided directly to healthcare providers and account for 26,000 to
69,000 infusions annually.'' \6\
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\5\ Id.
\6\ Id.
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We now propose to amend Sec. 203.22 (21 CFR 203.22), which
contains exclusions from the sales restrictions in Sec. 203.20 (21 CFR
203.20). Proposed new paragraph (h) provides a limited exception for
registered blood establishments that qualify as a health care entity.
Under the proposed exclusion, the sales restrictions in Sec. 203.22
would not apply to the sale, purchase, or trade of (or the offer to
sell, purchase, or trade) any blood derivatives by a registered blood
establishment that qualifies as a health care entity as long as all of
the health care services that it provides are related to its activities
as a registered blood establishment. The following are examples of such
health care services: therapeutic hemapheresis, therapeutic
phlebotomies, plasma exchange, and transfusion services. For
clarification, a registered blood establishment's ordinary donor
screening activities for donor suitability (e.g., measuring a donor's
temperature, blood pressure, and hematocrit or hemoglobin) are not
considered health care services for the purposes of Sec. 203.3(q).
A registered blood establishment that provides any health care
services unrelated to its activities as a registered blood
establishment would not be eligible for the exclusion. For example, if
a registered blood establishment provides health care services such as
administering antibiotics to treat a respiratory infection unrelated to
transfusion medicine, we do not consider this to be a health care
service related to the operation of a blood establishment. Therefore,
the blood establishment would not be permitted to distribute blood
derivatives. Without that limit on the exclusion, the rule would
encourage hospitals and other health care entities to register as blood
establishments strictly to take advantage of this exception. Allowing
such entities that are not primarily blood establishments to distribute
blood derivatives could raise the same concerns that the PDMA was
intended to address. The prohibition against sales by health care
entities was prompted in part because of the temptation for such
entities to sell for-profit drugs acquired at below-wholesale prices.
The proposed exclusion in Sec. 203.22 applies only to the
distribution of blood derivatives by a registered blood establishment
and not by other entities. The regulations implementing the PDMA, as
modified, would continue to apply to these other entities.
Although the public hearing and additional comments received on the
final rule provided us with an adequate factual basis to determine
whether the requirements in the final rule should be modified in the
interest of public health, new information provided with respect to the
function of registered blood establishments indicates that additional
input is needed. We are seeking information about the functions of
registered blood establishments to assist us in making a decision
whether further modification of the final rule is necessary in the
interests of public health.
Proposed Sec. 203.22(h) includes an ``exclusion'' that would allow
certain registered blood establishments that qualify as health care
entities to distribute blood derivatives. In consideration of the
issues that the industry raised, we seek comments on whether this
exclusion should be
[[Page 5203]]
expanded to allow registered blood establishments that also provide
health care services to distribute drugs other than blood derivatives
that might be used to treat blood disorders. We are seeking information
that includes, but is not limited to, the number of entities affected;
how often drugs used to treat blood disorders are distributed by
registered blood establishments and whether the nature of this practice
is critical; and, any negative impact on public health if the exclusion
allows only for the distribution of blood derivatives. Actual numbers,
statistics, and examples would help us determine the best course of
action. In addition, we seek comments on whether hemophilia treatment
centers, which are health care entities but are not registered blood
establishments, should be included within the scope of this exception.
IV. 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 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,
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.
V. Paperwork Reduction Act of 1995
FDA tentatively concludes that this proposed rule contains no
collections of information. Therefore, clearance by the Office of
Management and Budget under the Paperwork Reduction Act of 1995 (44
U.S.C. 3501-3520) (PRA) is not required.
VI. Analysis of Impacts
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 (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). 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. Because this rule proposes a narrow revision that is
intended to maintain the status quo, the agency certifies 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.
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 $115 million, using the most current (2003) 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.
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
21 CFR Part 203
Drugs, Labeling, Manufacturing, Prescription drugs, Reporting and
recordkeepng requirements, Warehouses.
21 CFR Part 205
Intergovernmental relations, Prescription drugs, Reporting and
recordkeeping requirements, Security measures, Warehouses.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under
the authority delegated to the Commissioner of Food and Drugs, it is
proposed that parts 203 and 205 be amended as follows:
PART 203--PRESCRIPTION DRUG MARKETING
1. The Authority citation for 21 CFR part 203 continues to read as
follows:
Authority: 21 U.S.C. 331, 333, 351, 352, 353, 360, 371, 374,
381.
2. Section 203.3 is amended by revising paragraph (q) to read as
follows:
Sec. 203.3 Definitions.
* * * * *
(q) Health care entity means any person that provides diagnostic,
medical, surgical, or dental treatment, or chronic or rehabilitative
care, but does not include any retail pharmacy or any wholesale
distributor. Except as provided in Sec. 203.22(h), a person cannot
simultaneously be a ``health care entity'' and a retail pharmacy or
wholesale distributor.
* * * * *
3. Section 203.22 is amended by adding paragraph (h) to read as
follows:
Sec. 203.22 Exclusions.
* * * * *
(h) The sale, purchase, or trade of, or the offer to sell,
purchase, or trade any blood derivative by a registered blood
establishment that qualifies as a health care entity, as long as all of
the health care services that it provides are related to its activities
as a registered blood establishment.
PART 205--GUIDELINES FOR STATE LICENSING OF WHOLESALE PRESCRIPTION
DRUG DISTRIBUTORS
4. The Authority citation for 21 CFR part 205 continues to read as
follows:
Authority: 21. U.S.C. 351, 352, 353, 371, 374.
5. Section 205.3 is amended by revising paragraph (h) to read as
follows:
Sec. 205.3 Definitions
* * * * *
(h) Health care entity means any person that provides diagnostic,
medical, surgical, or dental treatment, or chronic or rehabilitative
care, but does not include any retail pharmacy or any wholesale
distributor. Except as provided in Sec. 203.22(h), a person cannot
simultaneously be a ``health care entity'' and a retail pharmacy or
wholesale distributor.
Dated: November 17, 2005.
Jeffrey Shuren,
Assistant Commissioner for Policy.
[FR Doc. E6-1225 Filed 1-31-06; 8:45 am]
BILLING CODE 4160-01-S