2024-21559. Revocation of Regulations Regarding the Mutual Recognition of Pharmaceutical Good Manufacturing Practice Reports, Medical Device Quality System Audit Reports, and Certain Medical Device Product Evaluation Reports: United States and The ...

Abbreviation/ acronym	What it means
EC	European Community.
E.O	Executive Order.
FD&C Act	Federal Food, Drug, and Cosmetic Act.
GMP	Good Manufacturing Practice.
MRA	Mutual Recognition Agreement.

III. Background

A. Introduction

Part 26 was issued in response to the 1998 MRA between the United States and the European Community (EC), whereby both parties would recognize certain drug and device inspections/evaluation reports of the other, in order to more effectively allocate limited inspection resources (Mutual Recognition of Pharmaceutical Good Manufacturing Practice Inspection Reports, Medical Device Quality System Audit Reports, and Certain Medical Device Product Evaluation Reports Between the United States and the European Community, 63 FR 60122 at 60141 (November 6, 1998)). Subparts A and B of part 26 substantially reflect the 1998 MRA's pharmaceutical and medical device sectoral annexes, respectively. Subpart C of part 26 sets forth the framework provisions by which subparts A and B can be implemented. Subpart A governs “the exchange between the parties and normal endorsement by the receiving regulatory authority of official [pharmaceutical] good manufacturing practices (GMP) inspection reports[.]” (21 CFR 26.2) Subpart B specifies “the conditions under which a party will accept the results of quality system-related evaluations and inspections and premarket evaluations of the other party with regard to medical devices as conducted by listed conformity assessment bodies (CAB's) and to provide for other related cooperative activities.” (21 CFR 26.31(a))

The pharmaceutical sectoral annex to the 1998 MRA was superseded by the 2017 Amended Pharmaceutical Annex ( https://www.fda.gov/​international-programs/​international-arrangements/​mutual-recognition-agreements-mra). The 2017 Amended Pharmaceutical Annex included new terms, rendering Subpart A obsolete. The medical device sectoral annex was not addressed in the 2017 Amended Pharmaceutical Annex, but since the 1998 MRA went into effect, it has never been fully implemented. As other mechanisms ( e.g., Medical Device Single Audit Program) now exist for mutual recognition with Europe with respect to medical device inspections, Subpart B is no longer necessary.

Moreover, we do not believe it is required or would be beneficial for us to issue regulations that substantially reflect the 2017 Amended Pharmaceutical Annex with the European Union. The 2017 Amended Pharmaceutical Annex is in force and has been successfully implemented without regulations that substantially reflect it. The same is true for the MRAs that FDA entered into subsequently with Switzerland and the United Kingdom ( https://www.fda.gov/​international-programs/​international-arrangements/​mutual-recognition-agreements-mra). FDA's proposed revocation of part 26 should not be interpreted as FDA retreating from our commitment to working with our foreign counterparts, including through mutual recognition agreements, to achieve greater efficiencies and increase our inspectional reach.

B. Need for Regulation

The Agency believes the regulations in part 26 should be revoked because they have been superseded in part by the 2017 Amended Pharmaceutical Annex, do not reflect current Agency practice, and are unnecessary.

IV. Legal Authority

We are issuing this proposed rule under the drugs, medical devices, and general administrative provisions of the FD&C Act (21 U.S.C. 321, 331, 351, 352, 355, 360, 360b, 360c, 360d, 360e, 360f, 360g, 360h, 360i, 360j, 360l, 360m, 371, 374, 381, 382, 383, 384e, and 393) and under certain provisions of the Public Health Service Act (42 U.S.C. 216, 241, 242l, 262, 264, and 265). Under section 701(a) of the FD&C Act (21 U.S.C. 371(a)), FDA has the authority to issue regulations, and under section 809 of the FD&C Act (21 U.S.C. 384e), FDA has the authority to “enter into arrangements and agreements with a foreign government or an agency of a foreign government to recognize the inspection of foreign establishments registered under section 510(i) in order to facilitate preapproval or risk-based inspections in accordance with the schedule established in paragraph (2) or (3) of section 510(h)[.]”

V. Description of the Proposed Rule

The proposed rule revokes part 26, which substantially reflects a 1998 agreement between the United States and the EC created to better utilize the inspectional resources of each signatory by recognizing one another's inspection reports. Revocation would eliminate regulations that have been superseded in part by the 2017 Amended Pharmaceutical Annex, do not reflect current Agency practice, and are unnecessary.

FDA is proposing this action because the pharmaceutical sectoral annex to the 1998 MRA which subpart A substantially reflects has been superseded by the 2017 Amended Pharmaceutical Annex, and the medical device sectoral annex to the 1998 MRA, ( print page 77064) which subpart B substantially reflects, was never fully implemented. Subpart C contains general provisions applicable to both subparts A and B that will be unnecessary once subparts A and B are revoked.

VI. Proposed Effective Date

FDA is proposing that any final rule based on this proposed rule become effective 30 days after the date of its publication in the Federal Register .

VII. Preliminary Economic Analysis of Impacts

We have examined the impacts of the proposed rule under Executive Order 12866, Executive Order 13563, Executive Order 14904, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).

Executive Orders 12866, 13563, and 14094 direct us to assess all benefits, costs, and transfers 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). Rules are “significant” under Executive Order 12866 section 3(f)(1) (as amended by Executive Order 14094) if they “have an annual effect on the economy of $200 million or more (adjusted every 3 years by the Administrator [of the Office of Information and Regulatory Affairs (OIRA)] for changes in gross domestic product); or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, territorial, or tribal governments or communities.” OIRA has determined that this proposed rule is not a significant regulatory action under Executive Order 12866 section 3(f)(1).

The Regulatory Flexibility Act requires us to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because this proposed rule does not add any new regulatory burden on the pharmaceutical or medical device industries, we propose to certify that the proposed rule will not have a significant economic impact on a substantial number of small entities.

The Unfunded Mandates Reform Act of 1995 (section 202(a)) requires us to prepare a written statement, which includes an assessment of anticipated impacts, 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 $183 million, using the most current (2023) Implicit Price Deflator for the Gross Domestic Product. This proposed rule would not result in an expenditure in any year that meets or exceeds this amount.

We believe industry will maintain their current practices following the removal of part 26. FDA will also maintain its current practices, similarly generating no quantifiable costs or cost savings. Therefore, we expect this proposed rule to be cost neutral. Table 1 summarizes the estimated benefits and costs of the proposed rule, if finalized.

Table 1—Summary of Benefits, Costs and Distributional Effects of Proposed Rule

Category	Primary estimate	Low estimate	High estimate	Units			Notes
				Year dollars	Discount rate (%)	Period covered (years)
Benefits:
Annualized Monetized $millions/year	$0 0	$0 0	$0 0	2024 2024	7 3	10 10
Annualized Quantified
Qualitative	Avoid confusion created by outdated and unnecessary regulations that do not reflect current Agency practice
Costs:
Annualized Monetized millions/year	0 0	0 0	0 0	2024 2024	7 3	10 10	Qualified reduction in inspection reports reporting costs per industry. Affected firms would not incur costs to develop and submit inspection reports.
Annualized Quantified					7 3
Qualitative
Transfers:
Federal Annualized Monetized millions/year					7 3
From/To	From:			To:
Other Annualized Monetized millions/year					7 3
From/To	From:			To:
Effects:
State, Local or Tribal Government: No estimated effect. Small Business: No estimated effect. Wages: No estimated effect. Growth: No estimated effect.