[Federal Register Volume 63, Number 168 (Monday, August 31, 1998)]
[Rules and Regulations]
[Pages 46171-46174]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-23304]
[[Page 46171]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
21 CFR Part 801
[Docket No. 96N-0119]
Amended Economic Impact Analysis of Final Rule Requiring Use of
Labeling on Natural Rubber Containing Devices
AGENCY: Food and Drug Administration, HHS.
ACTION: Final rule; amended economic analysis statement.
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SUMMARY: The Food and Drug Administration (FDA) is issuing an amended
economic analysis statement relating to a final rule that published in
the Federal Register of September 30, 1997 (62 FR 51021), requiring
labeling statements concerning the presence of natural rubber latex in
medical devices. This rule was issued in response to numerous reports
of severe allergic reactions and deaths related to a wide range of
medical devices containing natural rubber. The final rule becomes
effective on September 30, 1998. In order to allow further comment on
the economic impact of the September 30, 1997, final rule, FDA
published in the Federal Register of June 1, 1998, an amended economic
impact statement, including an amended initial regulatory flexibility
analysis (IRFA) that it prepared under the Regulatory Flexibility Act
(RFA), as amended by the Small Business Regulatory Enforcement and
Fairness Act (SBREFA). After considering comments submitted in response
to the June 1, 1998, amended economic analysis statement, FDA is
issuing the amended final economic impact statement, including an
amended final regulatory flexibility analysis.
DATES: The September 30, 1997, final rule is effective on September 30,
1998, except for products that contain natural rubber latex solely in
cold-seal type packaging. The rule will not apply to these products for
an additional 270 days from the September 30, 1998, effective date of
the final rule. Elsewhere in this issue of the Federal Register, FDA is
announcing a stay of the effective date of the September 30, 1997,
final rule for these products.
ADDRESSES: References are available in the Dockets Management Branch
(HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061,
Rockville, MD 20852.
FOR FURTHER INFORMATION CONTACT: Donald E. Marlowe, Center for Devices
and Radiological Health (HFZ-100), Food and Drug Administration, 5600
Fishers Lane, Rockville, MD 20850, 301-827-4777, FAX 301-827-4787.
SUPPLEMENTARY INFORMATION:
I. Background
In the Federal Register of September 30, 1997 (62 FR 51021), FDA
published a final rule (to be codified at 21 CFR 801.437), under its
authority in section 505(a) and (f) of the Federal Food, Drug, and
Cosmetic Act (the act) (21 U.S.C. 352(a) and (f)), requiring certain
labeling statements on medical devices that contain or have packaging
that contains natural rubber. This rule becomes effective on September
30, 1998. The agency issued this rule because medical devices composed
of natural rubber may pose a significant health risk to some consumers
and health care providers who are sensitized to natural latex proteins.
FDA has received numerous reports about adverse effects related to
reactions to natural latex proteins contained in medical devices,
including 16 deaths following barium enemas. These deaths were
associated with anaphylactic reactions to the natural rubber latex cuff
on the tip of barium enema catheters. Scientific studies and case
reports have documented sensitivity to natural latex proteins found in
a wide range of medical devices. It is estimated that 5 to 17 percent
of health care workers are sensitive to latex proteins (Refs. 1 through
5.)
The September 30, 1997, final rule (hereinafter referred to as the
final rule) specifically requires that devices that contain natural
rubber that is intended to contact or is likely to contact the health
care worker or patient bear one or more of four labeling statements,
depending on the type of natural rubber in the device and depending on
whether the natural rubber is in the device itself or in its packaging.
These statements are as follows: ``This Product Contains Dry Natural
Rubber.''; ``Caution: This Product Contains Natural Rubber Latex Which
May Cause Allergic Reactions.''; ``The Packaging of This Product
Contains Dry Natural Rubber.''; and ``The Packaging of This Product
Contains Natural Rubber Latex Which May Cause Allergic Reactions.'' The
final rule also prohibits the use of the word ``hypoallergenic'' on
devices that contain natural rubber latex.
In the June 24, 1996, proposed rule (61 FR 32618), FDA stated that
it did not believe that the proposed rule would be a significant
regulatory action as defined by Executive Order 12866, and certified
under the Regulatory Flexibility Act (5 U.S.C. 601-602) that the rule
would not have a significant economic impact on a substantial number of
small entities. FDA stated that it believed the rule's proposed
effective date 180 days after publication would allow manufacturers to
exhaust their existing labeling supplies.
FDA received comments concerning the economic impact of the
proposed rule stating that the requirement would have a major impact on
multinational companies, costing at least $15,000 per device for
labeling. Another comment stated that the agency underestimated the
impact of the rule, as each manufacturer will need to draft, review,
and relabel primary and secondary packages of hundreds, if not
thousands of devices.
Based on FDA's information, the agency responded that it did not
agree that the regulation would require the relabeling of hundreds or
thousands of devices, and that agency estimates of relabeling costs
were between $1,000 to $2,000 for each type of device. The agency also
noted that the extended 1 year effective date should allow most
manufacturers to exhaust their current labeling stock prior to the
effective date of the regulation. On this basis, the agency stated that
the final rule was not a significant regulatory action under the
Executive Order, and certified that although a substantial number of
small entities would be affected by the rule, the estimated $1,000 to
$2,000 cost of implementing the final rule would not have a significant
economic impact on those entities (62 FR 51021 at 51029).
On October 7, 1997, the Office of the Chief Counsel for Advocacy
of the U.S. Small Business Administration submitted a comment stating
that the agency had not supplied data in the preamble to the final rule
to support its cost estimates. The agency also received information
from industry, subsequent to the issuance of the final rule,
identifying additional products that would be subject to the final
rule. On the basis of this information, FDA issued an amended economic
impact analysis, including an IRFA, and offered opportunity for further
comment before the implementation of the rule (63 FR 29552). FDA stated
that after consideration of these comments, FDA will decide whether to
issue the rule on its current effective date, to stay the effective
date of the final rule, and/or repropose the rule.
II. Comments to the Amended Economic Impact Analysis Statement
FDA received three comments to the amended economic analysis. Two
comments were from the Health Industry Manufacturers Association
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(HIMA), and the other comment was from an in vitro diagnostic
manufacturer.
The in vitro diagnostic manufacturer stated that health care
professionals using in vitro products are trained in and expected to
follow universal precautions for handling potential biohazards by
wearing protective gloves. Accordingly, the comment maintained that
health care professionals would not come into contact with latex in in
vitro diagnostic products.
FDA believes that training in universal precautions will not
prevent contact with the latex in in vitro diagnostic products for
several reasons. Contact may occur under a variety of situations
including failure to follow universal precautions, the absence of
wearing protective gloves during the set up phase of testing, the
retrieval of the products from storage or packing, or the disposal of
products. While FDA does not believe that in vitro diagnostic products
may be categorically excluded from the scope of this rule because of
the universal precautions that may be undertaken, FDA believes that
given the variety of product designs, there may be certain in vitro
diagnostic products that may contain latex that are designed in such a
manner as to preclude contact with the user. Currently, FDA is unaware
of any products that are designed in such manner. If, however, there
are such products, these products would not be subject to the final
rule.
The in vitro diagnostic manufacturer and HIMA also commented that
if in vitro diagnostic devices fell within the scope of the rule, they
had not been included in the amended economic impact analysis. This
omission was an oversight. FDA referred this comment and others
described below to Eastern Research Group (ERG), Lexington, MA for
analysis. ERG, after considering comments to the June 1, 1998, amended
economic impact analysis, has issued an amended economic impact
analysis which includes in vitro diagnostic products. The substantive
parts of this analysis are reproduced in their entirety in Appendix 1
of this document.
HIMA submitted two comments. One comment requested an extension of
the comment period to the economic impact analysis until July 31, 1998.
Subsequently, HIMA submitted timely preliminary substantive comments.
FDA denied the request for an extension to the comment period. The
public has now had two separate opportunities to comment on the
economic impact of this rule. Interested persons had 90 days to respond
to the economic impact statement in the proposed rule (61 FR 32618).
FDA received only two comments related to the economic impact of the
proposed rule. The amended economic impact analysis provided an
additional opportunity for comment on the economic impact. FDA believes
that 30 days is an adequate time to respond to the comments,
particularly given the fact that this is the second opportunity for
comment.
Moreover, FDA needed to notify the public whether the comments
related to the costs of the rule would result in a stay of the rule, a
reproposal of the rule, or whether FDA would retain the September 30,
1998, effective date. FDA needed sufficient time to analyze the
comments and publish in the Federal Register a document notifying the
public of its course of action before the September 30, 1998, effective
date. FDA believes that allowing until July 31, 1998, for the
submission of the second round of comments would not have allowed the
agency adequate time to analyze comments and publish in the Federal
Register a document in sufficient time before the September 30, 1998,
effective date of the rule.
While HIMA's request for an extension was pending, HIMA submitted
timely comments to FDA from several of its members. The fact that many
HIMA members submitted responses within the comment period further
demonstrates that the period of time was adequate for the submission of
comments.
HIMA raised several substantive comments in its July 1, 1998,
submission. These comments stated that HIMA was uncertain if the June
1, 1998, estimate included costs related to the following items or
factors: New plates and film for each new label, purchasing or
manufacturing new relabeled boxes and cartons, slow moving inventory or
sterile products that cannot be repackaged, ``specialty'' products that
are manufactured on an intermittent basis and kept in inventory for 2
to 3 years, and inability to place sticker labels on existing inventory
for products that are sterile or carry several layers of packaging.
HIMA also stated that one member had estimated the total cost per SKU
to be $28,000.
These cost factors stated by HIMA were considered by ERG and FDA.
Moreover, the figure reported to HIMA by one member for total cost per
SKU does not affect the conclusions of FDA and ERG about the economic
impact of this rule. The final ERG report, which is reproduced in
Appendix 1, addresses these comments in further detail.
HIMA also stated that the agency did not comply with the Regulatory
Flexibility Act in that it did not publish the initial regulatory
flexibility analysis at the time of the publication of the proposed
rulemaking. FDA does not agree. Regulatory flexibility analyses are
only required if there is a significant impact on a substantial number
of small entities. If an agency certifies there is no significant
impact on a substantial number of small entities, the agency is not
required to perform an initial or final regulatory flexibility analysis
(5 U.S.C. 605(b)).
In both the proposed and final rules, FDA certified that under 5
U.S.C. 605(b) no such analysis was required (61 FR 32618, June 24,
1996; 62 FR 51021 at 51029, September 30, 1997). The first ERG
analysis, as described in the Federal Register of June 1, 1998, and the
subsequent ERG analysis, as described below, that responds to industry
comments, supports FDA's conclusion that no regulatory flexibility
analysis under 5 U.S.C. 603 and 604 is required. Even if such an
analysis is required, FDA believes that the agency can satisfy the
requirements under 5 U.S.C. 603 and 604 by issuing amended initial and
final analyses after a proposed rule is issued.
III. Analysis of Impacts
During the course of reexamining the appropriateness of its
certification that no regulatory flexibility analysis was required, FDA
has already gathered sufficient information to perform a regulatory
flexibility analysis. Accordingly, although FDA believes no regulatory
flexibility analysis is required because there is no significant impact
on a substantial number of small entities, FDA is providing a final
regulatory flexibility analysis, as described below, in this amended
economic impact analysis statement.
FDA has examined the impacts of the final rule under Executive
Order 12866, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the
Unfunded Mandates Reform Act (2 U.S.C 1501 et seq.). 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). Under the Regulatory
Flexibility Act, if a rule has a significant impact on a substantial
number of small entities, an agency must analyze regulatory options
that would minimize any significant impact of the rule on small
entities. Title II of the Unfunded Mandates Reform Act (21 U.S.C. 1532)
requires that agencies prepare a written assessment of
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anticipated costs and benefits before proposing any rule that may
result in an expenditure in any 1 year by State, local, and tribal
governments, in the aggregate, or by the private sector of $100 million
(adjusted annually for inflation).
The agency believes that this rule is consistent with the
regulatory philosophy and principles identified in Executive Order
12866 and in these two statutes. The purpose of this rule is to add
labeling statements that will help ensure the safe and effective use by
health care workers and patients of natural rubber devices. Potential
benefits include early recognition of symptoms that could develop into
severe latex allergies, and the prevention of severe allergic reactions
and death that may occur if persons who are allergic to natural rubber
inadvertently use natural rubber devices.
Based on other information referenced in this document, and on the
analysis performed by the ERG, FDA is issuing this amended economic
analysis statement. Since the rule does not impose any mandates on
State, local or tribal governments, or the private sector that will
result in an expenditure in any 1 year of $100 million or more, FDA is
not required to perform a cost-benefit analysis according to the
Unfunded Mandates Reform Act. The rule is not a significant regulatory
action as defined by the Executive Order.
ERG amended its report based on comments received to the June 1,
1998, amended economic analysis statement. The final ERG analysis
estimated that this rule will affect approximately 2,340 small
businesses. Total annualized compliance costs for small businesses are
estimated at $4.1 million, which represent 0.05 percent of revenues for
small medical device manufacturers. This economic analysis indicates
that this rule will not have a significant economic impact on a
substantial number of small entities.
The final natural rubber latex labeling rule would require certain
labeling statements on products that contain natural rubber latex. This
rule would not invoke new recordkeeping and reporting requirements.
Manufacturers of several types of products may include natural rubber
latex and therefore be subject to this rule. Manufacturers of the
products listed in Table 1-1 of the final ERG report will be subject to
the final rule (63 FR 29552 at 29560).
Manufacturers of natural rubber latex devices need to employ
certain professional skills to implement the new labeling requirements.
Regulatory affairs staff will need to identify the need for a revised
label, and coordinate the labeling review and revision processes with
other departments such as marketing, medical and legal departments, and
prepare the new labeling language. Graphic artists and label layout
specialists will prepare the revised labels. Art work might be prepared
by in-house or external staff. Once prepared, the revised label is
normally sent to outside vendors who prepare new printing plates and
perform final printing. The manufacturing personnel receive and review
the final revised labeling, replace and discard old inventory,
incorporate the new labels into the material control and inventory
systems, and modify labeling and packaging equipment as necessary to
accommodate new labels.
IV. Steps Taken to Minimize the Economic Impact on Small Entities
and Regulatory Alternatives Examined
FDA has analyzed several alternatives and taken several steps to
minimize the economic impact of this final rule on small entities. FDA
did not receive any comments regarding proposed regulatory alternatives
in response to the June 1, 1998, amended economic analysis statement.
As discussed previously, FDA received a comment asking for
clarification regarding the applicability of the final rule to in vitro
diagnostic products, a request for an extension of the comment period,
and several questions from HIMA relating to costs analysis issues.
FDA's response to those comments is discussed in section II of this
document.
A. Application of the Rule to Combination Products and Packaging
Although FDA did not receive any comments to the June 1, 1998,
amended economic analysis statement proposing any regulatory
alternatives, FDA did receive requests from industry, since publication
of the final rule, for alternative approaches regarding the
applicability of the rule. FDA considered both these alternatives, and
modified the application of the rule under these requests in a manner
that reduces the economic impact of the rule on industry, including
small entities.
First, FDA received comments from industry requesting that the rule
does not apply to combination products containing device components
that had previously been regulated solely as drugs or biologics. In the
Federal Register of May 6, 1998 (63 FR 24934), FDA issued a document
stating that upon consideration of these comments and the need to
provide a uniform labeling approach for all drug and biological
products, including combination products, the agency did not intend to
apply the final rule to combination products currently regulated as
drugs or biologics, and instead intends to initiate a separate
proceeding to propose rulemaking requirements for labeling statements
on natural rubber-containing products regulated as drugs and biologics,
including combination products, currently regulated under drug or
biologic authorities.
Second, on June 5, 1998, HIMA submitted a citizen petition
requesting a stay of the implementation of the final rule as it
pertains to packaging (Ref. 6). As a basis for the stay, HIMA cited
several grounds, including assertions that many manufacturers were
confused as to the applicability of the rule to cold seal packaging,
and, therefore, needed additional time to come into compliance with the
new labeling requirements.
On June 19, 1998, FDA responded to this petition by stating it
would stay the effective date of the latex labeling statements required
by the final rule for cold-seal packaging for an additional 270 days
from the September 30, 1998, effective date of the final rule. The stay
of the effective date for the provisions of the September 30, 1997,
final rule as they relate to cold-seal packaging is published elsewhere
in this issue of the Federal Register. FDA is not granting a stay of
the effective date for all packaging because of the evidence of serious
risks latex poses for certain individuals and the need to inform those
individuals of the presence of natural rubber latex in devices (Ref.
7).
B. Voluntary Compliance
FDA could have issued guidance stating FDA considered statements
about the presence of natural rubber necessary to comply with existing
general statutory and regulatory prohibitions against false and
misleading labeling (section 505(a) of the act), and failure to provide
adequate directions for use (section 505(f)). Given the significant
health risks associated with natural rubber products, FDA does not
believe that existing general statutory labeling authority and
regulations provide adequate protection to ensure that health care
workers and patients are warned about the risks associated with natural
rubber.
Without the final regulation, manufacturers may not provide any
information at all. The ERG report and FDA's own experience indicate
that some manufacturers never voluntarily revise their labeling. Even
if it could be assumed that all manufacturers would voluntarily provide
some labeling information about the presence of
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natural rubber, such information is likely to be presented in a variety
of ways that may confuse consumers and limit the effectiveness of the
natural rubber statement. FDA believes that the provision of
consistent, accurate information to consumers is critical. FDA believes
that this regulation, which provides accurate, consistent information
in a standardized manner, will assure that the safety information is
communicated effectively to the public.
C. Implementation Periods
FDA considered various implementation periods for the effective
date after the issuance of the final rule. The June 24, 1996, proposed
rule proposed an effective date 6 months after the publication of the
final rule. The final rule has reduced the impact on small businesses
by extending the effective date to 1 year after issuance of the final
rule for all products, except those containing natural rubber latex
solely in cold-seal type packaging. For those products the agency is
providing, for the reasons stated previously, an additional 270 days to
comply with the rule.
Based on the ERG report figures, the total industry cost of
compliance for this rule with a 1-year implementation period is $64.1
million. This figure may be somewhat higher than actual costs because
of the extension for compliance granted to cold seal packaged products,
however FDA did not reduce cost estimates related to this variable. The
total annualized costs are calculated at $9.1 million per year. The
costs for a 6-month effective date are 26 percent greater than a 1-year
effective date. Allowing a 24-month implementation date would reduce
costs by 40 percent.
FDA rejected the 6-month implementation period and extended the
implementation period to 1 year to allow manufacturers of products
containing natural rubber latex, including small businesses, to reduce
costs by depleting existing inventories and coordinating this labeling
change with other planned labeling changes. Although costs could
further be reduced by allowing a 24-month implementation period, FDA
believes that the public need for this information about devices that
pose serious risks justifies rejecting this alternative.
D. Exempting Small Businesses
FDA has considered the option of exempting small businesses from
the final regulation. The ERG report estimates that approximately 83
percent of the manufacturers of natural rubber latex products are small
businesses. FDA believes that given that the large majority of
manufacturers of products containing natural rubber latex are small
businesses, and given the risks associated with these devices,
exempting small businesses from this regulation would result in a
significant decrease of consumer protection. Accordingly, FDA does not
believe that small businesses should be exempt from this regulation.
E. Allowance of Supplementary Labeling
FDA could have chosen a regulatory alternative that would require
that all labeling be directly printed on the existing packaging and
labeling. Such a regulatory provision would decrease the possibility
that the required statement would become dislodged during distribution.
Instead, the final rule allows the use of supplementary labeling
(stickers) to provide the required labeling information. As noted in
the ERG report, this will allow a number of firms, including small
businesses, to reduce costs by avoiding extensive repackaging of
existing product inventory that will not be sold prior to the end of
the regulatory implementation period. FDA decided to include this
option in the final rule.
F. Requiring a Labeling Statement on Only One Level of Labeling
Under the provisions of the final rule, FDA estimates that most
devices covered under the final rule will bear the required natural
rubber statement on two or three levels of labeling. FDA considered
requiring labeling statements on only one level of labeling. This
alternative was rejected because of the importance of the information
contained in the required labeling statements. Users may not have the
necessary opportunity to read the statement if it is included only on
some levels of labeling. For some products, especially those with
multiple users, some labeling may be discarded prior to use by
subsequent consumers. The inclusion of the statement on each level of
labeling increases the likelihood that consumers will be aware of the
risks posed by the natural rubber in the product.
V. References
The following references have been placed on display in the
Dockets Management Branch (address above) and may be seen by interested
persons between 9 a.m. and 4 p.m., Monday through Friday.
1. Kibby, T., and M. Akl, ``Prevalence of Latex Sensitization in
a Hospital Employee Population,'' Annals of Allergy, Asthma and
Immunology, 78:41-44, 1997.
2. Kaczmarek, R. G., B. G. Silverman, T. P. Gross, et al.,
``Prevalence of Latex-specific IgE Antibodies in Hospital
Personnel,'' Annals of Allergy, Asthma and Immunology, 76:51-56,
1996.
3. Arellano, R., J. Bradley, and G. Sussman, ``Prevalence of
Latex Sensitization Among Hospital Employees Occupationally Exposed
to Latex Gloves,'' Anesthesiology, 77:905-908, 1992.
4. Lagier, F., D. Vervloet, I. Lhernet, et al., ``Prevalence of
Latex Allergy in Operating Room Nurses,'' Journal of Allergy and
Clinical Immunology, 90:319-322, 1992.
5. Yassin, M., M. Lierl, T. Fisher, et al., ``Latex Allergy in
Hospital Employees,'' Annals of Allergy, 72:245-249, 1994.
6. June 5, 1998, HIMA citizen petition requesting a stay of the
implementation of the final rule as it pertains to packaging.
7. June 19, 1998, FDA response to HIMA citizen petition
requesting stay of the implementation of the final rule as it
pertains to packaging.
VI. Public Outreach
FDA has conducted extensive public outreach relating to the final
rule to small businesses. Interactions with the public on issues
relating to this rule are discussed in detail in the amended economic
analysis statement published in the Federal Register of June 1, 1998
(63 FR 29552, at 29553 and 29554).
Dated: August 13, 1998.
William K. Hubbard,
Associate Commissioner for Policy Coordination.
[FR Doc. 98-23304 Filed 8-28-98; 8:45 am]
BILLING CODE 4160-01-F
