economically significant rule as defined by the Executive order.

A. Need for the Proposed Rule

    In response to concerns about the usefulness of the current
``Pregnancy,'' ``Labor and delivery,'' and ``Nursing mothers''
subsections of prescription drug product labeling, FDA held a part 15
hearing and two advisory committee meetings and consulted with focus
groups and the public to solicit comment on how to improve these
subsections. During these discussions, participants said that current
prescription drug product labeling lacks clarity and often fails to
provide meaningful clinical information about drug exposure during
pregnancy and lactation. Of equal concern, current prescription drug
product labeling is not designed to address either inadvertent drug
exposure in early pregnancy or the potential consequences of
discontinuing during pregnancy a drug prescribed to the mother to treat
a chronic condition. Moreover, the current system of pregnancy
categories can be ambiguous, give a false impression of the comparative
risks of different prescription drug products, and fail to adequately
provide meaningful information that health care providers can use to
advise their patients on the safe and effective use of prescription
drugs during pregnancy.
    This rule, therefore, proposes to improve the quality of
prescription drug labeling. Providing up-to-date information on the
safe and effective use of prescription drugs during pregnancy and
lactation in a standardized format would make labeling a more reliable
resource that health care providers could consult when they seek
prescription drug information for their pregnant and lactating
patients.

B. Scope of the Proposed Rule

    This proposed rule would affect human prescription drugs that would
be required to have labeling with a ``Pregnancy'' or ``Lactation''
subsection. Some manufacturers with multiple dosage forms, dosage
strengths, and package sizes of the same active ingredients may produce
a single version of the labeling to use with all products.
Nevertheless, for this analysis, FDA assumes that manufacturers will
produce separate labeling for each dosage form, but will use the same
version for all package sizes and dosage strengths of the same dosage
form. This assumption may lead to an overestimation of the costs of the
proposed rule.

C. Costs of the Proposed Rule

    The extent to which the proposed rule might affect labeling depends
on whether an affected application is subject to the PLR. The labeling
for applications subject to the PLR would need to conform to the
proposed content requirements for the ``Pregnancy'' and ``Lactation''
subsections of the ``Use in Specific Populations'' section of the full
prescribing information (proposed Sec. Sec.  201.57(c)(9)(i)-
(c)(9)(ii)). The labeling of applications not subject to the PLR would
only need to conform to the proposed requirement to remove the
pregnancy category if it exists. The level of effort required to comply
with the proposed changes, therefore, would depend on whether the
affected application is subject to the requirements of the PLR. In the
analysis of costs, multiple applications for the same prescription drug
product are counted only once.
1. Affected Applications
    a. Future applications. NDAs, BLAs, and efficacy supplements
submitted on or after the effective date of the pregnancy labeling
final rule are future applications. Even though the number of future
applications is unknown, for the analysis of impacts for the PLR (71 FR
3922 at 3969), FDA examined approvals from 1997 to 2001 to estimate the
average annual number of applications that might be submitted in the
future (i.e., after the effective date of the PLR). An updated analysis
of the FDA approval data suggests that these estimates remain
representative of current activity. Thus, FDA continues to

use the numbers derived for the PLR analysis as the agency's best
estimate of future activity. Table 2 of this document shows that
manufacturers might submit an estimated 1,580 applications in the 10
years following the effective date of the pregnancy labeling final
rule, with approximately 75 percent of these submissions being for
innovator products.
    b. Approved or pending applications subject to the PLR. Any
approved or pending application subject to the requirements of the PLR
would also need to conform to the requirements of this proposed rule.
This includes applications pending on the effective date of the
pregnancy labeling final rule and those applications approved between
June 30, 2001, and the effective date of the pregnancy labeling final
rule. For the purposes of this analysis, FDA assumes that the pregnancy
labeling final rule would become effective on June 30, 2010, and affect
some applications counted as future applications in the PLR analysis.
    This analysis uses FDA's approval data to tally the number of
affected approvals between June 30, 2001, and June 30, 2006. This
number provides a partial estimate of the number of approved or pending
applications that might be affected by the proposed rule. Because the
number of applications that would be submitted between June 30, 2006,
and the effective date of the pregnancy labeling rule is unknown, FDA
uses the estimate of the number of future applications in years 5 to 10
from the PLR analysis to complete the estimate of the number of
approved or pending applications subject to the PLR that might be
affected by this proposed rule.
    To minimize the burden on industry, FDA proposes that manufacturers
with labeling that already conforms to the PLR requirements on the
effective date of the pregnancy labeling final rule would have from 3
to 5 years to revise labeling to conform to the requirements of the
rule. Table 2 of this document shows that the existing labeling of an
estimated 1,300 innovator applications and 600 generic applications
would need to be revised to add the new content that would be required
by the pregnancy labeling final rule.

                                            Table 2.--Estimated Number of Applications Subject to the PLR\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                           Future Applications           Pending or Recently Approved Applications                  Total
              Year               -----------------------------------------------------------------------------------------------------------------------
                                   Innovator Drugs     Generic Drugs       Innovator Drugs        Generic Drugs      Innovator Drugs     Generic Drugs
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                               140                 40                     0                     0                140                 40
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                               130                 40                     0                     0                130                 40
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                               120                 40                   380                   260                500                300
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                               120                 40                   480                   130                600                170
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                               120                 40                   440                   210                560                250
--------------------------------------------------------------------------------------------------------------------------------------------------------
6                                               110                 40                     0                     0                110                 40
--------------------------------------------------------------------------------------------------------------------------------------------------------
7                                               110                 40                     0                     0                110                 40
--------------------------------------------------------------------------------------------------------------------------------------------------------
8                                               110                 40                     0                     0                110                 40
--------------------------------------------------------------------------------------------------------------------------------------------------------
9                                               110                 40                     0                     0                110                 40
--------------------------------------------------------------------------------------------------------------------------------------------------------
10                                              110                 40                     0                     0                110                 40
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total                                         1,180                400                 1,300                   600              2,480              1,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Numbers include an estimated 1,613 pending or future applications (Source: See ANDAs, efficacy supplements, new NDAs and BLAs for years 5 to 10 of
  table 14 in 71 FR 3922 at 3977 through 3978), and 1,900 approved applications when the pregnancy labeling final rule becomes effective (Source:
  Analysis of approvals from June 29, 2001, to June 30, 2006, using FDA's approval data). Numbers may not sum due to rounding.

    c. Approved applications not subject to the PLR. The proposed rule
would require that manufacturers responsible for the labeling of
approved applications not subject to the requirements of the PLR make
minor revisions to remove the pregnancy category from the existing
``Pregnancy'' subsection of the ``Precautions'' section of the
labeling. Manufacturers would have 3 years after the effective date of
the pregnancy labeling final rule to make this change. This provision
of the proposed rule would affect any approved application not subject
to the PLR that currently has labeling that contains a pregnancy
category. Although the actual number of applications that would be
affected by this provision of the proposed rule is uncertain, the
recent analysis of FDA's approval data suggests that the labeling of up
to 4,720 existing prescription drug products could be affected in year
3 of the rule. Because the labeling of many older products initially
approved before 1979 might not contain a pregnancy category, this
estimate is an upper bound. Moreover, it should be noted that
manufacturers sometimes voluntarily discontinue marketing older
products and might do so before they would be required to remove the
pregnancy category. Although the magnitude is uncertain, this natural
attrition would likely reduce the number of products that would be
affected by the pregnancy labeling final rule.
2. One-Time and Annual Labeling Costs
    a. One-time costs. The actions required under this proposed rule to
create drug product labeling can be divided into two major categories:
(1) Collecting and organizing the additional information required by
this proposed rule and (2) revising existing labeling to add or remove
information. FDA notes that designing the labeling is a routine cost of
a new application and would not be attributable to this proposed rule.
To conform to the requirements of the proposed rule, manufacturers
might spend more time on these actions than

they currently spend preparing the ``Pregnancy,'' ``Labor and
delivery,'' and ``Nursing mothers'' subsections of the labeling, thus
incurring additional labeling costs. Which costs would be incurred by a
manufacturer will depend on when in the product's life cycle the
labeling subject to the pregnancy labeling final rule would be required
and whether the application is subject to the PLR. For example,
manufacturers with future innovator applications would only incur costs
to collect and organize the required information because designing
labeling is a routine cost of a new application. In contrast,
manufacturers required to change existing product labeling would incur
both types of costs (i.e., collecting and organizing required
information, and revising existing labeling).
    i. One-time costs to collect and organize the new content.
Manufacturers responsible for applications subject to the new content
requirements would need to collect and organize the information
required for the appropriate subsections of the ``Use in Specific
Populations'' section of the labeling. Specifically, the proposed rule
would merge the information in the ``Pregnancy'' and ``Labor and
delivery'' subsections and revise the ``Nursing mothers'' subsection.
The merged subsection would be called the ``Pregnancy'' subsection and
would require the following: (1) Information about pregnancy exposure
registries, (2) a general risk statement, (3) a fetal risk summary, (4)
clinical considerations, and (5) a discussion of data. The proposed
rule would rename the ``Nursing mothers'' subsection the ``Lactation''
subsection and require the following: (1) A risk summary, (2) clinical
considerations, and (3) a discussion of data.
    Under the current system, applicants and FDA review any existing
animal and human data and determine the appropriate pregnancy category.
Although the proposed rule would no longer require that a drug be
assigned to a pregnancy category, preparing the new labeling content
might require more time than manufacturers currently spend preparing
this part of the product labeling. FDA personnel have worked with
manufacturers on a case-by-case basis to update certain prescription
drug labeling to include content similar to the content that would be
required by the proposed rule. This experience suggests that for
innovator products, a physician or other health care professional might
spend up to 10 hours collecting the new information. In addition,
regulatory affairs and legal personnel might spend up to 10 hours
organizing the information and discussing the new content with FDA. At
hourly wage costs of $100 for medical personnel and $50 for regulatory
and legal personnel, manufacturers would incur about $1,500 in
additional costs (10 hours x $100 per hour + 10 hours x $50 per hour).
Because labeling of generic drug products duplicates the labeling of
reference listed drugs, FDA anticipates that manufacturers of generic
products would not incur these incremental costs.
    Furthermore, under Sec.  314.50(l)(1)(i), all manufacturers
submitting new or revised prescription drug labeling must prepare an
electronic version of the labeling for submission to the agency. Some
manufacturers may incur incremental costs to prepare and transmit an
electronic version that is consistent with the XML (Extensible Markup
Language)-based Structured Product Labeling (SPL) standard. Because FDA
has little information on the impact of this step, FDA requests
detailed comment from industry on these costs.
    ii. One-time costs to revise existing prescription drug labeling.
The agency has previously estimated that the cost of revising
prescription drug labeling varies with the size of the manufacturer (68
FR 6062 at 6074, February 6, 2003). Product labeling involves many
departments in a manufacturer, including legal, drug safety, regulatory
affairs, layout, and production personnel. Larger manufacturers with
several administrative layers may require more time to change labeling
than smaller manufacturers with fewer layers. In addition to labor
costs, manufacturers incur material costs for each change to drug
product labeling, including artwork and labeling scrap. If the rule
were to require a labeling revision without allowing sufficient time to
deplete existing inventories of labeling, manufacturers might also lose
the value of labeling that they must throw away.
    Using 2004 wages, table 3 of this document shows the estimated
labor and material costs for generic drug manufacturers and three sizes
of innovator manufacturers to revise labeling. Because the proposed
implementation schedule would allow manufacturers with approved or
pending applications subject to the PLR a minimum of 3 years to revise
product labeling to conform to the requirements of the pregnancy final
rule, manufacturers are not expected to incur any additional inventory
costs beyond scrap. Material costs, therefore, include only the average
cost of artwork and scrap.

                       Table 3.--Labeling Revision Costs by Size and Type of Manufacturer
----------------------------------------------------------------------------------------------------------------
                  Type of manufacturer                     Labor Cost ($)   Material Cost ($)    Total Cost ($)
----------------------------------------------------------------------------------------------------------------
Generic:                                                             1,000                500              1,500
Innovator (estimated share of products):                 .................  .................  .................
  Small (5 percent)                                                  1,000                500              1,500
  Medium (5 percent)                                                 1,500              1,420              2,920
  Large (90 percent)                                                 2,180              2,020              4,200
----------------------------------------------------------------------------------------------------------------
Source: 68 FR 6062 at 6074, updating for 2004 costs and excluding excess inventory loss from the material costs.

    FDA's approval data suggests that large manufacturers with 1,000 or
more employees produce about 90 percent of the affected innovator
prescription drug products. Assuming a uniform distribution of the
other 10 percent of innovator prescription drug products among small
and medium-size manufacturers, manufacturers of innovator prescription
drug products may incur a weighted average cost of about $4,000 per
product to revise existing product labeling ((5 percent small innovator
manufacturers x $1,500) + (5 percent medium-size innovator
manufacturers x $2,920) + (90 percent large innovator manufacturers x
$4,200)). Generic drug manufacturers may incur about $1,500 per product
to revise labeling.
    iii. One-time cost to prepare artwork for prescription drug
labeling other than trade labeling. The PLR requires that trade
labeling (labeling on or within the package from which the drug is to
be dispensed) be printed in a minimum of 6-point type size and that
labeling

disseminated in other contexts (nontrade labeling) be printed in a
minimum of 8-point type size (Sec.  201.57(d)(6)). In the analysis of
impacts for the PLR, FDA assumed that manufacturers would incur
additional costs for nontrade labeling because the 8-point type size
requirement would require that manufacturers revise nontrade labeling
to accommodate the larger type size. FDA makes the same assumption for
prescription drug labeling incorporating the new pregnancy and
lactation content: that affected manufacturers would incur additional
one-time costs to revise nontrade labeling to accommodate the new
pregnancy and lactation content in the 8-point type size. The agency
previously estimated it would cost manufacturers about $810 per product
to revise and proofread the layout, and to prepare artwork (71 FR 3922
at 3981). Updating for current material and labor costs, on average,
FDA estimates that, on average, manufacturers might spend $1,000 for
each affected innovator product.
    b. Annual incremental costs to print longer labeling. Longer
labeling increases the cost of paper, ink, and other ongoing
incremental printing costs. Some requirements of the proposed rule
would increase the length of labeling. The incremental increase will
depend on many factors, including the number of animal and human
studies that have been conducted and their findings, the known risks of
the drug, and whether a pregnancy registry exists. Based on the
agency's experience with recent labeling changes incorporating content
similar to that proposed in this rule, labeling conforming to both the
PLR and the proposed requirements might increase by approximately 15
square inches in 6-point type size and 24 square inches in 8-point type
size.\4\ Although the estimate is based on a small number of labeling
changes, FDA concludes it reasonably approximates the additional amount
of paper that would be needed. Nevertheless, FDA requests comment from
industry on these assumptions.
---------------------------------------------------------------------------

    \4\ This estimate is based on the agency's sample labeling in
the appendix, experience with recent case-by-case labeling changes,
and the results of a study on new approvals between January 1, 1997,
and December 31, 2002. The net increase in the number of characters
was tallied for each case and for the hypothetical samples in the
appendix. Using the average increase in the number of characters and
the proportion of drug products for each pregnancy category, we
estimate that prescription drug labeling could increase by a
weighted average of 3,200 characters. Labeling can accommodate
approximately 200 characters per square inch in 6-point type size
and about 130 characters per square inch in 8-point type size.
Therefore, 3,200 additional characters would require about 15-square
inches of paper in 6-point type size and 24-square inches of paper
in 8-point type size.
---------------------------------------------------------------------------

    i. Trade labeling. Manufacturers must send trade labeling with all
shipments of prescription drugs and with any samples distributed to
health care providers. The PLR requires that trade labeling be printed
in a minimum of 6-point type size. The proposed new content
requirements would increase the size of trade labeling by an estimated
15-square inches. To conserve space, trade labeling is normally printed
on both sides of the paper. The proposed new content, therefore, would
add about 7.5-square inches of paper to the overall size of trade
labeling. The agency previously estimated that manufacturers would
spend about $0.0086 to produce 100-square inches of labeling (65 FR
81082 at 81107). Updating for inflation, FDA estimates that
manufacturers might spend $0.01 for each additional 100-square inches
of labeling they produce.
    The agency has also previously estimated that, on average,
manufacturers annually send up to 650,000 pieces of trade labeling with
each innovator product and up to 370,000 pieces of trade labeling with
each generic product. In addition, industry wide, a total of 90 million
pieces of trade labeling are distributed with drug samples each year
(71 FR 3922 at 3979). Because the new content provisions of this
proposed rule would only add about 7.5-square inches to the overall
size of trade labeling, the cost of labeling for an affected innovator
product would increase by approximately $470 each year (650,000 pieces
per product x $0.000096 per square inch x 7.5-square inches per piece).
Generic drug manufacturers would incur annual incremental printing
costs of about $280 for each generic product affected by the proposed
rule (370,000 pieces per product x $0.000102 per square inch x 7.5-
square inches per product).
    FDA assumes that almost all samples are innovator products.
Although it is unlikely that all samples would be affected by the
proposed rule, the annual cost of longer trade labeling accompanying
all samples of innovator products could equal about $65,000 (90 million
samples x $0.000096 per square inch x 7.5-square inches per piece).
    ii. Nontrade labeling. The PLR requires that any nontrade labeling
be printed in a minimum of 8-point type size. For applications subject
to the PLR, the new content requirements of the proposed rule would
increase the size of the paper needed to print nontrade labeling by
approximately 24 square inches. FDA assumes that only innovator
products would incur these costs because almost all nontrade labeling
is for innovator products. The agency previously estimated that
manufacturers might distribute to health care providers and consumers
an annual average of 730,000 pieces of labeling during the first 3
years of the life of an innovator product (71 FR 3922 at 3981). FDA
assumes that this estimate is also a reasonable estimate of the number
of pieces of labeling that would be distributed in the first 3 years
after a product is relabeled under this rule. Thus, a manufacturer
might spend up to $5,100 per innovator product to print labeling in 8-
point type size.\5\
---------------------------------------------------------------------------

    \5\ For the PLR, the agency estimated that manufacturers would
print and distribute 775,000 pieces of labeling in 8-point type size
in the first year of the life cycle of an innovator drug product and
710,000 pieces in years 2 and 3. Compared to the 6-point type size,
about 59 percent more paper would be needed to print the new content
in 8-point type size. Printing on one side of the paper,
manufacturers would need about 24 square inches more paper to
accommodate the new content. For this analysis, manufacturers would
spend about $5,100 per product to print longer labeling ((775,000 +
710,000 + 710,000) x $0.000096 per sq inch x 24 sq inches = $5,083).
---------------------------------------------------------------------------

    iii. Physicians' Desk Reference (PDR) costs. The new content
requirements of this proposed rule would add about 0.2 page to labeling
printed in the PDR and would cost manufacturers an additional $2,350
annually for each affected product.\6\ FDA assumes that these costs
would be incurred by the pharmaceutical industry as fees paid to the
publisher of the PDR. The total cost for a manufacturer to print longer
labeling in the PDR depends on how many years the labeling remains in
the PDR. In the economic analysis of the PLR, FDA assumed that only 75
percent of the affected innovator products would have labeling
published in the PDR (some smaller manufacturers do not publish
labeling in the PDR) and would continue to include the labeling in the
PDR in subsequent years (71 FR 3922 at 3976). FDA makes the same
assumptions for this analysis.
---------------------------------------------------------------------------

    \6\ There are approximately 15,850 characters on an average page
of the PDR. The new content adds, on average, 3,200 more characters,
requiring an additional 0.2 page. Using the lowest per page cost
shown on the 2006 PDR rate card, manufacturers might spend up to
$2,350 per product to add the new content ($11,730 per page x 0.2
page).
---------------------------------------------------------------------------

3. Summary of Industry Compliance Costs for the Proposed Rule
    a. One-time costs for applications subject to the PLR.
Manufacturers with future innovator applications or those with
innovator applications pending on the effective date of the pregnancy
labeling rule would incur one-time costs to collect and organize the
information required for prescription drug labeling

conforming to the rule, but would not incur one-time costs to revise
existing labeling. As explained in section VIII.C.2.a.i of this
document, FDA estimates that manufacturers would spend approximately
$1,500 to collect and organize the information for the new pregnancy
and lactation content. In contrast, manufacturers with future generic
applications would incur no additional costs.
    Manufacturers with applications approved on or after June 30, 2001,
up to and including the effective date of the pregnancy labeling final
rule, would incur costs to collect and organize the new content
information and to revise existing prescription drug labeling. As
described in section VIII.C.2.a.ii of this document, the estimated
average cost to revise existing labeling equals $1,500 for generic
drugs and $4,000 for innovator drugs. Moreover, manufacturers with
innovator products might incur another $1,000 to prepare the artwork
for labeling not accompanying the prescription drug product. Therefore,
manufacturers might spend a total of $6,500 for existing innovator
labeling ($1,500 to gather and organize information for the new content
+ $4,000 to revise trade labeling + $1,000 to prepare artwork for
labeling not accompanying the prescription drug product) and a total of
$1,500 for existing generic labeling.
    Table 4 of this document shows that total one-time labeling costs
would be $11.1 million and range from $0.2 million to $3.5 million in
any single year. As shown in table 2 of this document, after 10 years,
the labeling of approximately 2,480 innovator drug products and about
1,000 generic drug products would include the new pregnancy and
lactation content.

   Table 4.--One-Time Costs to Prepare New Content and Revise Existing
             Labeling for Applications Subject to the PLR\1\
------------------------------------------------------------------------
                               One-Time Costs ($ million)
     Year     ----------------------------------------------------------
                   Innovators            Generic             Total
------------------------------------------------------------------------
1              0.2                 0.0                 0.2
2              0.2                 0.0                 0.2
3              2.7                 0.4                 3.0
4              3.3                 0.2                 3.5
5              3.0                 0.3                 3.4
6              0.2                 0.0                 0.2
7              0.2                 0.0                 0.2
8              0.2                 0.0                 0.2
9              0.2                 0.0                 0.2
10             0.2                 0.0                 0.2
------------------------------------------------------------------------
Total          10.2                0.9                 11.1
------------------------------------------------------------------------
\1\ Costs may not sum due to rounding. See table 2 of this document for
  details on the number and distribution of affected products.

    b. Annual incremental printing costs for applications subject to
the PLR.
    i. Trade labeling. As described in section VIII.C.2.b.i of this
document, the agency estimates that each year manufacturers print an
average of about 650,000 pieces of trade labeling for each innovator
product and an average of about 370,000 pieces of trade labeling for
each generic product. Based on the average number of pieces of trade
labeling and the estimated number of affected applications subject to
the PLR from table 2 of this document, table 5 of this document shows
the cumulative number of pieces of trade labeling that would be
affected by this proposed rule.

    Table 5.--Cumulative Number of Pieces of Prescription Drug Trade
   Labeling by Type of Product for Applications Subject to the PLR\1\
------------------------------------------------------------------------
                         Cumulative Number of Pieces (million)
    Year     -----------------------------------------------------------
                   Innovator            Generic             Samples
------------------------------------------------------------------------
1             90                  10                  90
2             180                 30                  90
3             500                 140                 90
4             890                 200                 90
5             1,250               300                 90
6             1,330               310                 90
7             1,400               330                 90
8             1,470               340                 90
9             1,540               360                 90
10            1,610               370                 90
------------------------------------------------------------------------
\1\ Numbers may not sum due to rounding. The cumulative calculation
  assumes that manufacturers print 650,000 pieces for each innovator
  product and 370,000 pieces for each generic product, and once a
  product is approved, it remains on the market for the entire analysis.

    Printing longer trade labeling would cost manufacturers a total of
$9.9 million over 10 years, including $7.4 million for innovator trade
labeling, $1.8 million for generic trade labeling, and $0.7 million for
trade labeling accompanying samples. As shown in table 6 of this
document, annual costs to print the additional information that would
be required by this proposed rule range from $0.1 million in year 1 to
$1.5 million in year 10. However, if at some point in the future,
manufacturers can supply trade labeling electronically, the rule will
cease to impose these annual incremental printing costs.

Table 6.--Annual Incremental Printing Costs for Longer Trade Labeling\1\
------------------------------------------------------------------------
                            Costs by Type\2\ ($ million)
   Year    -------------------------------------------------------------
               Innovator        Generic         Samples         Total
------------------------------------------------------------------------
1           0.1             0.0             0.1             0.1
2           0.1             0.0             0.1             0.2
3           0.4             0.1             0.1             0.5
4           0.6             0.2             0.1             0.9
5           0.9             0.2             0.1             1.2
6           1.0             0.2             0.1             1.3
7           1.0             0.2             0.1             1.3
8           1.1             0.3             0.1             1.4
9           1.1             0.3             0.1             1.5
10          1.2             0.3             0.1             1.5
------------------------------------------------------------------------
Total       7.4             1.8             0.7             9.9
------------------------------------------------------------------------
\1\ Costs may not sum due to rounding.
\2\ Manufacturers would incur printing costs of about $72.37 for every
  100,000 pieces of innovator trade labeling and about $76.58 for every
  100,000 pieces of generic trade labeling. Trade labeling accompanying
  prescription drug samples would cost industry about $65,132 annually.
  See section IX.C.2.b.i of this document for details.

    ii. Nontrade labeling. As discussed in section VIII.C.2.b.ii of
this document, the new content requirements of the pregnancy labeling
final rule likely would require manufacturers to print longer nontrade
labeling in 8-point type size during the first 3 years after adding the
new content to labeling. FDA assumes that only innovator products would
incur these costs because almost all nontrade labeling is for innovator
products. Thus, over 10 years, manufacturers of innovator products
might spend up to $12.6 million ($5,100 per innovator product x 2,480
innovator products) to print labeling in 8-point type size.
    iii. Physicians' Desk Reference. As discussed in section
VIII.C.2.b.iii of this document, manufacturers of innovator products
may pay an additional $2,350 annually to include longer prescription
drug labeling in the PDR. Because FDA assumes that, after the first
year, labeling would remain in the PDR for all subsequent years, PDR
printing costs are cumulative. As illustrated in table 7 of this
document, in 10 years industry might incur a cumulative total of $27.8
million to print longer labeling in the PDR.

     Table 7.--Cumulative Number of Affected Applications and Annual
        Incremental Cost of Longer Labeling Printed in the PDR\1\
------------------------------------------------------------------------
                         Cumulative Number of
        Year              Affected Innovator     Annual Incremental Cost
                           Applications\2\               ($ mil)
------------------------------------------------------------------------
1                     110                        0.2
2                     210                        0.5
3                     590                        1.4
4                     1,040                      2.4
5                     1,460                      3.4
6                     1,540                      3.6
7                     1,620                      3.8
8                     1,700                      4.0
9                     1,780                      4.2
10                    1,860                      4.4
------------------------------------------------------------------------

Total Cost            27.8
------------------------------------------------------------------------
\1\ Costs may not sum due to rounding.
\2\ Seventy-five percent of innovator products adding new content (see
  table 2 of this document) would be included in the PDR.

    c. One-time costs for applications not subject to the PLR. The
proposed rule would require that manufacturers with approved
prescription drugs not subject to the PLR remove the pregnancy category
from labeling if a category exists. To minimize the impact on industry,
the agency proposes to give manufacturers 3 years after the effective
date of the pregnancy labeling final rule to make these changes. The
proposed implementation schedule would give manufacturers sufficient
time to deplete their stocks of labeling. Because removing the
pregnancy category is a minor labeling change, manufacturers not
subject to the PLR would only need to submit revised labeling with
their annual reports. In most cases, the burden on manufacturers would
be less than the average standard costs to revise existing labeling
(see table 3 of this document). However, some manufacturers with
multiple applications not subject to the PLR may need to revise
simultaneously the labeling of many products, creating other costs than
those estimated for standard labeling revisions. FDA requests detailed
comment from industry about the potential burden of the implementation
schedule for this provision of the proposed rule.
    Based on an analysis of FDA's approval data, an estimated 4,720
prescription drug products would be affected by this provision of the
proposed rule. The agency estimates that in year 3, manufacturers would
remove the pregnancy category from labeling of 1,700 innovator
prescription drug products and 3,020 generic prescription drug
products, at a total cost of $11.3 million ((1,700 innovator products x
$4,000 per innovator product) + (3,020 generic products x $1,500 per
generic product)). This estimate likely overstates the direct
compliance costs because many companies would remove the pregnancy
category at the same time they voluntarily revise product labeling for
other reasons.
    d. Summary of compliance costs. The industry compliance costs of
the proposed rule include the following: (1) One-time cost to prepare
the new ``Pregnancy'' and ``Lactation'' subsections of trade labeling
and labeling not accompanying prescription drug products, and (2)
annual incremental costs to print longer labeling.
    Similar to the rollout for PLR, FDA would provide training to
medical reviewers on the requirements of the final pregnancy labeling
rule. Nevertheless, reviewing the new labeling, including the longer
content, would increase the review times and workloads of medical
reviewers in the review divisions. Because the long-term impact of the
rule depends on a number of uncertain factors, we are unable to
quantify this burden on the agency.
    As shown in table 8 of this document, the total present value of
all costs equals $50.3 million with a 7-percent discount rate or $61.7
million with a 3-percent discount rate. The annualized cost would be
$7.2 million with both a 7-percent discount rate and a 3-percent
discount rate.

                                                        Table 8.--Summary of Compliance Costs\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Present Value ($ mil)
                     Year                        One-time Costs ($     Annual Costs ($ mil)   Total Costs ($ mil)  -------------------------------------
                                                        mil)                                                                3%                 7%
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                                0.2                    0.6                    0.8                0.8                0.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                                0.2                    1.2                    1.3                1.3                1.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                               14.4                    3.2                   17.6               16.1               14.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                                3.5                    5.4                    8.9                7.9                6.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                                                3.4                    7.4                   10.8                9.3                7.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
6                                                                0.2                    7.0                    7.1                6.0                4.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
7                                                                0.2                    6.4                    6.6                5.3                4.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
8                                                                0.2                    5.9                    6.1                4.8                3.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
9                                                                0.2                    6.2                    6.3                4.9                3.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
10                                                               0.2                    7.0                    7.1                5.3                3.6
¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤
Total                                                           22.5                   50.3                   72.7               61.7               50.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Costs may not sum due to rounding.

D. Benefits

    This proposed rule is part of the agency's ongoing efforts to
improve the quality of prescription drug labeling. To effectively
communicate information about a drug, labeling should be easily
accessible, understandable, accurate, reliable, and up-to-date. The
agency's public health initiative to provide labeling in an electronic
format is intended to make labeling accessible. This proposed rule
would address the other aspects of effective communication and result
in better quality prescription drug labeling. Once a prescription drug
is approved, information starts to become available regarding clinical
experience on the use of the drug during pregnancy or lactation. The
purpose of this proposed rule is to ensure that prescription drug

labeling includes any available clinical information that can inform
health care providers about the safe and effective use of prescription
drugs during pregnancy and lactation. By requiring that manufacturers
update prescription drug labeling with clinically relevant information,
the proposed rule would improve the quality of labeling and could lead
to better informed health care providers. The agency is unable to
quantify the potential benefits of the proposed rule, but expects that
better quality information in prescription drug labeling has the
potential to improve the advice that health care providers give women
about the safe and effective use of prescription drugs during pregnancy
and lactation.
1. Current Use of Prescription Drugs.
    a. Women of reproductive age. Many women between 15 and 44 years of
age take prescription drugs. Data from the Medical Expenditure Panel
Survey (MEPS) show that, in 2003, almost 70 percent of the women of
reproductive age were prescribed at least one prescription drug (Ref.
32). Moreover, in a recent survey of medication use in adults, 82
percent of the women between 18 and 44 years of age reported using some
type of medication in the week preceding the survey and 46 percent of
these women reported using at least one prescription drug (Ref. 9).
    b. Pregnant women. A recent retrospective study of over 150,000
pregnant women enrolled in 8 health maintenance organizations located
throughout the United States found that within 270 days before
delivery, over 60 percent of the women included in the study were
dispensed a prescription drug other than a vitamin or mineral
supplement (Ref. 33). Oral anti-infective drugs were the most commonly
dispensed prescription drugs, accounting for about 40 percent of all
dispensed drugs. Even though almost half of the pregnant women in this
study received prescription drugs with pregnancy category A or B, over
30 percent received prescription drugs with pregnancy category C, and 2
percent received category D or X drugs (excluding female reproductive
hormones). Similarly, a smaller study of rural obstetric patients in
West Virginia found that, excluding prenatal vitamins and minerals,
about 60 percent of the pregnant women in the study were prescribed a
prescription drug (Ref. 34). Although this study did not examine the
pregnancy category of the prescribed drugs, antibiotics were the most
frequently prescribed type of drug.
    These newer findings support findings reported in a 1994 Institute
of Medicine report on women in clinical trials (Ref. 35). The report
cited two studies from the 1980s on prescription drug use by pregnant
women. One study found that pregnant women took an average of 3.8
medications and the other found that over 75 percent of pregnant women
took 3 to 10 drugs during their pregnancy. Studies of pregnant women in
several developed countries have found similar results for prescription
drug use during pregnancy (Refs. 14, 36, and 37).
    c. Lactating women. There is less information about the effect of
prescription drugs on lactation than about effects on pregnancy. The
percentage of new mothers who breast-feed their newborns continues to
grow. A recent study found that the percent of mothers who breast-feed
their newborns at some time increased from about 50 percent in 1990 to
about 70 percent in 2003 (Ref. 38). With improved labeling, health care
providers would have more concise clinical information about the use of
prescription drugs during lactation, allowing women to make more
informed choices about continuing to nurse their newborns while taking
prescription drugs.
2. Current Pregnancy Labeling Is Not Adequate
    Since 1979, most human prescription drug product labeling includes
``Pregnancy,'' ``Labor and delivery,'' and ``Nursing mothers''
subsections. Besides providing information about a prescription drug's
effect on reproduction, pregnancy, and the development of the fetus,
each ``Pregnancy'' subsection must include a letter category (A, B, C,
D, or X) intended to: (1) Communicate the prescription drug's
reproductive and developmental risks or (2) weigh the risks and
potential benefits of the prescription drug. The pregnancy letter
category suggests increased risk as the letters ascend and equivalent
risk for drugs with the same letter. This is a particular problem with
category C because a prescription drug can be assigned this category
when sponsors: (1) Lack both animal and human data or (2) have adverse
animal data, but lack human data.
    Pregnant women are rarely included in premarket clinical trials
unless a drug is being developed to treat a condition unique to
pregnancy. Consequently, few sponsors have any premarket data from
pregnant women. Because human data on use during pregnancy are rarely
available when a prescription drug is initially approved, category C is
the most frequently assigned category. For example, a survey in the
early 1990s found that about two-thirds of all prescription drugs in
the hardcopy version of the PDR were in category C (Ref. 39). A recent
search of the electronic PDR supports this observation. The study also
found that over 60 percent of the prescription drugs with a pregnancy
category were in category C (Ref. 40). Furthermore, once approved,
prescription drugs tend to retain their initial pregnancy category.
    Current labeling fails to provide up-to-date information about
prescription drug use by pregnant or lactating women. Since the 1990s,
the Teratology Society and health care providers have called for the
agency to replace the current pregnancy categories with narrative
statements that summarize and interpret all available human data.
3. Potential Benefits From Better Quality Labeling
    As described in sections II and III of this document, FDA has
consulted extensively with stakeholders interested in the use of
prescription drugs during pregnancy and lactation. This proposed rule
is in part a result of those consultations and would ensure that
labeling contains clinically relevant information about prescription
drug use during pregnancy and lactation to help health care providers
and their patients make informed decisions about their treatment
options. Although FDA has little information about adverse outcomes
related to incomplete labeling information, better informed decisions
about treatment options would likely lead to better outcomes.
    a. Treatment of chronic diseases during pregnancy or while
lactating. Improved information about the safe and effective use of
prescription drugs during pregnancy would benefit health care providers
and their patients who are pregnant and require medication to treat
chronic diseases. The number of women who may benefit from better
informed health care providers depends on many factors, including the
prevalence of chronic diseases in pregnant women. Some chronic diseases
(such as asthma, diabetes, hypertension, mental illness, and epilepsy)
may result in negative health outcomes if left uncontrolled during
pregnancy and lactation. Without adequate information, women with
chronic medical conditions may receive suboptimal treatment, and
suboptimal treatment may lead to poor health outcomes for the woman and
her fetus. By requiring that manufacturers include human data, labeling
will become a reliable source of up-to-date information on prescription
drug use during pregnancy. Without complete

information about the benefits and risks of continuing medications
during pregnancy, women with chronic medical conditions cannot make
informed decisions about whether to stop taking their prescription
drugs during pregnancy, and could take actions that might jeopardize
their health or the health of their fetuses (Ref. 41).
    i. Pregnancy and asthma. An estimated 6 million women of
reproductive age have asthma. Previous studies have found that from 4
to 7 percent of pregnant women have asthma (Ref. 42); a recent study
that used data from national health surveys conducted from 1997 to 2001
found that the annual prevalence of current asthma in pregnant women
ranged from 3.7 to 8.4 percent (Ref. 43). Uncontrolled asthma has been
associated with negative outcomes for both the pregnant women and the
fetus.
    ii. Other chronic conditions. The Centers for Disease Control and
Prevention (CDC) tracks live births for women with several medical risk
factors, including some chronic conditions requiring prescription drug
therapy. For example, in 2003, of the approximately 4 million live
births, some of the most frequent maternal risk factors included
diabetes (3.3 percent), cardiac disease (0.5 percent), chronic (not
pregnancy-related) hypertension (0.9 percent), and pregnancy-related
hypertension (3.7 percent) (Ref. 44). Moreover, it has been reported
that about 1 million women of reproductive age have epilepsy (Ref. 45)
and up to 9 percent of pregnant women may experience depression (Ref.
46).
    b. Managing inadvertent exposure to drugs. Improved information
about the effects of inadvertent exposure to prescription drugs before
women know they are pregnant would help health care providers to advise
these women about the consequences of their inadvertent exposure.
Because about one-half of the pregnancies in the United States are
unintended, many women are taking prescription drugs before they are
aware of the pregnancy (Ref. 41). Inadvertent exposure to prescription
drugs during pregnancy may be of particular concern for women taking
prescription drugs for chronic conditions. Fears about possible fetal
harm from early exposure to prescription drugs can create anxiety for
pregnant women and their families.
    c. Use of OTC drugs and dietary supplements by pregnant women. Some
studies in the United States have found that pregnant women often take
over-the-counter (OTC) drugs and dietary supplements (Refs. 34, 47, and
48). It is possible that women are substituting these products for
prescription drugs because OTC drugs and dietary supplements are
perceived as being safer for use during pregnancy than prescription
drugs. However, information on the safety of many of these products
during pregnancy is as limited, if it is available at all, as that for
prescription drugs. Furthermore, unlike prescription and OTC drugs,
dietary supplements can be marketed without FDA premarket approval.
Providing up-to-date information on the risks and benefits of
prescription drugs may encourage more pregnant and lactating women to
use safe and effective products that they might otherwise avoid.
4. Potential Benefits for Companies in the International Market
    Besides the potential public health benefit of better informed
health care providers, the proposed rule may benefit individual
manufacturers operating on a global scale. In 1979, the United States
began requiring that prescription drug manufacturers include a
pregnancy category in the labeling of any systemically absorbed
prescription drug. Although many European countries adopted similar
category systems, recent guidance from the European Medicines Agency
(EMEA) requires that prescription drug labeling include a narrative
risk statement rather than a pregnancy category (Ref. 49). FDA's
proposed rule would require narrative risk statements similar to those
required by the EMEA. More consistent labeling at an international
level may create some efficiency gains for global manufacturers
marketing prescription drugs in both the United States and the European
Union. FDA does not attempt to quantify these potential gains in
efficiency.

E. Impacts on Small Entities

1. The Need for, and the Objectives of, the Proposed Rule
    The current labeling for pregnant and lactating women provides
limited clinical information for health care providers and their
patients. The use of pregnancy categories is confusing and can be
misinterpreted. The primary objective of the proposed rule is to
modernize the content of the ``Pregnancy,'' ``Labor and delivery,'' and
``Lactation'' subsections of prescription drug product labeling and
replace the category system with a narrative summary of potential risk.
Narrative information can provide a valuable resource to clinicians and
their patients about the relative risks and benefits of prescription
drug use during pregnancy and lactation.
2. Description and Estimate of the Number of Small Entities Affected
    This proposed rule would affect all small entities with
applications required to include ``Pregnancy'' and ``Lactation''
subsections in the labeling. The Small Business Administration (SBA)
considers Pharmaceutical Preparation Manufacturing firms (NAICS (North
American Industry Classification System) 325412) with fewer than 750
employees and Biological Product Manufacturing firms (NAICS 325414)
with fewer than 500 employees to be small entities. The U.S. Census
Bureau reports that in 2002 there were 296 biological product
manufacturing establishments (Ref. 50) and 901 pharmaceutical
preparation manufacturing establishments (Ref. 51). However, Census
employment size classes for pharmaceutical preparation manufacturing do
not correspond to SBA size categories. For this analysis, any
pharmaceutical preparation manufacturing establishment with less than
1,000 employees would be considered a small entity. Census data suggest
that approximately 96 percent of biological product manufacturing
establishments and no more than 97 percent of the pharmaceutical
preparation manufacturing establishments could be considered small
entities. Despite the large number of small entities, large companies
manufacture most prescription drug products.
    Because the labeling of all prescription drugs required to have a
pregnancy category would be affected by the pregnancy labeling final
rule, the agency expects this rule to have an impact on a substantial
number of small entities. An analysis of FDA's approval data shows that
about 60 small or privately held entities would be required to revise
existing prescription drug labeling to conform to the content
requirements between year 3 and year 5 of the proposed rule. An
additional 180 small or privately held entities would be required to
remove the pregnancy category from existing prescription drug labeling
within 3 years of the effective date of the pregnancy labeling final
rule, and many of these small entities would be required to remove the
pregnancy category from more than 10 existing products. Because some of
these entities would be required to make several labeling changes in
the same year, the agency requests detailed comment from affected small
entities on the potential burden of the proposed rule.

    The compliance requirements for small entities under this proposed
rule are the same as those described above for other affected entities.
Compliance primarily involves revising subsections of prescription drug
labeling to conform to the requirements of the proposed rule. Because
manufacturers already submit labeling to FDA, no additional skills
would be required to comply with the proposed rule. The small entities
likely to bear the highest total costs under this proposed rule are
those entities that would need to simultaneously revise the
prescription drug labeling of several high-volume products. Because
these small entities would likely have the highest sales volumes of
affected products manufactured by small entities, the incremental cost
per unit sold is likely to be relatively low. In contrast, small
entities with a single, low-volume product would have a higher
incremental cost per unit sold. The following examples illustrate
possible impacts on small entities with different production volumes.
Prescription drug labeling costs are estimated for a small entity that
must revise labeling of an innovator product. Table 9 of this document
outlines the projected per-unit and total costs to the entity with
three different levels of production: 1,000, 10,000, and 100,000 units
produced per year.

Table 9.--Estimated Costs for Hypothetical Small Entity with a Single Innovator Product, Under Three Alternative
                                             Levels of Production\1\
----------------------------------------------------------------------------------------------------------------
                                                               Number of Units Produced and Sold Each Year
                     Cost Category                      --------------------------------------------------------
                                                              100,000             10,000             1,000
----------------------------------------------------------------------------------------------------------------
One-Time Costs:\2\
----------------------------------------------------------------------------------------------------------------
  Add new content to existing trade labeling                        $5,420             $5,420             $5,420
  Prepare labeling not accompanying prescription drug               $5,100             $5,100             $5,100
   products
  Total One-Time Costs                                             $10,520            $10,520            $10,520
¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤
Annual Incremental Costs:
----------------------------------------------------------------------------------------------------------------
  Printing longer trade labeling\3\                                    $80                 $8                 $1
  Printing longer PDR\4\                                            $2,350             $2,350                N/A
  Total Annual Incremental Costs                                    $2,430             $2,358                 $1
¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤
Annualized Costs:\5\
----------------------------------------------------------------------------------------------------------------
  Total Annualized Costs at 3 percent                               $3,660             $3,590             $1,230
  Additional annualized cost per unit sold at 3 percent              $0.04              $0.36              $1.23
  Total Annualized Costs at 7 percent                               $3,920             $3,850             $1,500
  Additional annualized cost per unit sold at 7 percent              $0.04              $0.39              $1.50
----------------------------------------------------------------------------------------------------------------
\1\ Numbers may not sum due to rounding.
\2\ Includes one-time costs to collect and organize information for the new content ($1,500), revise trade
  labeling ($2,920; see Medium firm in table 6 of this document), prepare artwork for labeling in 8-point type
  size ($1,000), and print labeling in 8-point type size to distribute directly to health care providers.
\3\ Number of pieces of trade labeling printed is calculated as units produced/year plus 10 percent wastage
  factor, at an incremental printing cost of $0.0005 per piece.
\4\ Assumes that products with less than 10,000 units per year will not have labeling in the PDR.
\5\ One-time costs are annualized over 10 years.

    Although this is an illustrative example, because the scope of the
proposed rule would likely include most small entities, FDA uses the
example of 100,000 units annualized over 10 years at a 7-percent
discount rate to estimate the compliance costs as a proportion of
average annual revenue. FDA calculated the average annual value of
shipments for each employment category from data from the 2002 Economic
Census. Because the agency's analysis of FDA's approval data found that
at least one small entity might be required to revise the content of
labeling for five innovator products in a single year, tables 10 and 11
of this document show the potential lower and upper bound impact on
small manufacturing entities. Even with five affected products in a
single year, annualized compliance costs would be less than 1.1 percent
of average annual shipments for all establishment sizes.

   Table 10.--Annualized Compliance Costs as a Percentage of the Value of Average Annual Shipments for Small Pharmaceutical Preparation Manufacturing
                                                              Establishments (NAICS 325412)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Hypothetical Annualized Costs as a
                                                                                Percentage of Average Annual Value
                                                      Number of        Annual Value of   Average Per Establishment             of Shipments\1\
              Number of Employees                   Establishments    Shipments ($ mil)  Annual Value of Shipments -------------------------------------
                                                                                ($ mil)               1 Affected         5 Affected
                                                                                Product            Products
--------------------------------------------------------------------------------------------------------------------------------------------------------
1-19                                                             436            1,101.9                        2.5               0.2%               0.8%
--------------------------------------------------------------------------------------------------------------------------------------------------------
20-49                                                            109              978.5                        9.0               0.0%               0.2%
--------------------------------------------------------------------------------------------------------------------------------------------------------
50-99                                                             93            2,804.7                       30.2               0.0%               0.1%
--------------------------------------------------------------------------------------------------------------------------------------------------------

100-499                                                          184           23,773.2                      129.2               0.0%               0.0%
--------------------------------------------------------------------------------------------------------------------------------------------------------
500-999                                                           48           35,262.7                      734.6               0.0%               0.0%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Table 4 in Ref. 50.
\1\ One time compliance costs annualized at 7 percent for 10 years. Total annualized costs for this example total $3,920 per affected innovator product.

    In the year that a small entity revises innovator labeling, the
entity might spend up to $13,000 on one-time design costs, one-time
printing costs for longer labeling in 8-point type size, and the annual
incremental costs of printing longer trade labeling and a PDR listing
conforming to the new content requirements. With five affected
innovator products in a single year, compliance costs could total up to
$65,000. However, FDA approval data suggest that it is unlikely that
entities in the smallest category of establishments (i.e., less than 20
employees) would have 5 innovator products requiring revision in a
single year. Nevertheless, $65,000 in compliance costs would total less
than 4 percent of average annual revenues for an entity with less than
20 employees and less than 1 percent of average annual revenues for
small entities with 20 or more employees.

       Table 11.--Annualized Compliance Costs as a Percentage of the Value of Average Annual Shipments for Small Biological Product Manufacturing
                                                              Establishments (NAICS 325414)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Hypothetical Annualized Costs as a
                                                                                Percentage of Average Annual Value
                                                      Number of        Annual Value of   Average Per Establishment             of Shipments\1\
              Number of Employees                   Establishments    Shipments ($ mil)  Annual Value of Shipments -------------------------------------
                                                                                ($ mil)               1 Affected         5 Affected
                                                                                Product            Products
--------------------------------------------------------------------------------------------------------------------------------------------------------
1-19                                                             166              302.4                        1.8               0.2%               1.1%
--------------------------------------------------------------------------------------------------------------------------------------------------------
20-49                                                             58              378.5                        6.5               0.1%               0.3%
--------------------------------------------------------------------------------------------------------------------------------------------------------
50-99                                                             26              366.5                       14.1               0.0%               0.1%
--------------------------------------------------------------------------------------------------------------------------------------------------------
100-499                                                           35            2,719.7                       77.7               0.0%               0.0%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Table 4 in Ref. 49.
\1\ One time compliance costs annualized at 7 percent for 10 years. Total annualized costs for this example total $3,920 per affected innovator product.

F. Alternatives Considered

1. No New Regulatory Action
    This alternative is the baseline against which FDA measures the
costs and benefits of the other regulatory alternatives. The current
``Pregnancy,'' ``Labor and delivery,'' and ``Nursing mothers''
subsections of the labeling, including the pregnancy categories, fail
to provide relevant clinical information to health care providers and
their patients about the safe and effective use of drug products during
pregnancy and lactation. Current labeling also provides no information
about the effects of inadvertent exposure before a woman knows she is
pregnant.
2. Require the Labeling of Applications Submitted After the Effective
Date of the Pregnancy Labeling Final Rule To Conform to the New Content
Requirements; Remove the Pregnancy Category From the Labeling of All
Other Approved Products (``Prospective Alternative'')
    This alternative would require that the new content be added only
to the labeling for applications submitted after the effective date of
the pregnancy final labeling rule. The scope of this alternative would
be narrower than that of the proposed rule. Consequently, FDA estimates
that 10 years after the effective date, 1,200 innovator products and
400 generic products would contain the new content. The estimated
costs, therefore, would be less than those of the proposed rule.
Because the labeling of fewer products would include the new pregnancy
labeling content, the potential benefits of this alternative, although
uncertain, might be less than those of the proposed rule.
    This alternative would also require that, within 3 years of the
effective date, manufacturers remove the pregnancy category (if it
exists) from all labeling for products approved before the effective
date of the pregnancy labeling final rule. FDA's approval data suggests
that this requirement would affect about 2,990 innovator products and
3,630 generic products. Like the proposed rule, these changes to
labeling would not require a separate labeling supplement, but would be
submitted in an annual report.
    FDA assumes that most cost components for this alternative are the
same as for the proposed rule (see section VIII.C.2 of this document
for details). However, because this alternative would only require new
content prospectively, FDA anticipates

that no additional agency resources would be needed.
    Table 12 of this document shows the estimated costs of this
alternative. The estimated one-time costs to add the new content and
remove the pregnancy category are $19.2 million. The annual incremental
costs to print longer labeling that contains the new content are
estimated at $22.3 million. The present value of the total compliance
costs of this option would be approximately $29.9 million with a 7-
percent discount rate or about $35.8 million with a 3-percent discount
rate. The estimated annualized compliance costs for this alternative
are $4.2 million with a 3-percent discount rate and $4.3 million with a
7-percent discount rate. Moreover, any overlap of the implementation
schedules of the PLR and the pregnancy labeling final rule would reduce
these costs because firms could make all labeling changes at the same
time. However, any potential cost savings depend on the effective date
of the pregnancy labeling final rule.

                                                Table 12.--Estimated Costs of the Prospective Alternative
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Present Value  ($ mil)
                      Year                        One-Time Revision    Annual Printing      Total Costs  ($ mil)   -------------------------------------
                                                     Cost ($ mil)       Costs ($ mil)                                       3%                 7%
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                                0.2                0.6                        0.8                0.8                0.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                                0.2                1.2                        1.3                1.3                1.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                               17.6                1.6                       19.2               17.6               15.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                                0.2                1.9                        2.1                1.8                1.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                                                0.2                2.1                        2.3                2.0                1.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
6                                                                0.2                2.4                        2.5                2.1                1.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
7                                                                0.2                2.6                        2.8                2.3                1.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
8                                                                0.2                2.9                        3.0                2.4                1.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
9                                                                0.2                3.1                        3.3                2.5                1.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
10                                                               0.2                3.9                        4.1                3.0                2.1
========================================================================================================================================================
Total                                                           19.2               22.3                       41.5               35.8               29.9
--------------------------------------------------------------------------------------------------------------------------------------------------------

3. Require the Labeling of Categories of Drugs That Are Most Widely
Used by Pregnant Women and Women of Reproductive Age To Conform to the
Content Requirements
    The scope of this alternative would be greater than that of the
proposed rule. In the agency's efforts to develop this proposed rule,
it consulted with outside experts concerning what drugs should be
covered by this rule. FDA asked the American College of Obstetrics and
Gynecology, the American Academy of Pediatrics, and the Association of
Women's Health, Obstetric and Neonatal Nurses were asked about which
drugs each thought were important to the clinical care of pregnant
women and for which drugs more information is needed. FDA asked the
Organization of Teratology Information Services and Motherisk, two
organizations that counsel pregnant women about exposure to drugs
during pregnancy, to list the drugs about which they received the most
questions from pregnant women. FDA also consulted the March of Dimes
and the Canadian Pediatric Society. In addition, FDA asked the
Pregnancy Labeling Subcommittee of the Advisory Committee for
Reproductive Health Drugs to consider how to determine which drugs
merited priority implementation of the new content and format for
pregnancy labeling. Consultation with these experts resulted in
numerous lists of drugs for which revised pregnancy labeling was
considered a priority. However, no clear core set of drugs or drug
classes emerged from this process. The agency compiled a list of drug
classes from those suggested by the various sources. The list included
analgesics, anti-infective drugs, anticoagulants, antidepressants,
antiemetics, anticonvulsants, antifungals, antihypertensives,
antimigraine drugs, antivirals, respiratory agents, thyroid drugs,
tranquilizers, oral contraceptives, glucocorticoids, estrogens,
gastrointestinal drugs, and antihistamines. Changing the content and
format of pregnancy labeling for such a large universe of drugs would
be a large burden for both industry and FDA. Because of the
difficulties of identifying the products affected by this alternative,
FDA did not estimate the costs of this alternative, but expects that
they would fall somewhere between those of the proposed rule and the
highest cost alternative described below.
4. Require the Labeling of All Approved Products To Conform to the New
Content Requirements
    In contrast to the proposed rule, this alternative has the broadest
scope and would require that new content be added to the labeling of
about 4,170 innovator products and 4,030 generic products. Consequently
the estimated costs and potential benefits would be greatest with this
alternative.
    The implementation schedule and estimated costs for future
applications and for approved applications subject to the PLR would be
the same as for the proposed rule. Approved applications not subject to
the PLR would follow a staggered implementation schedule in which
manufacturers would be given from 6 to 10 years to revise product
labeling, depending on the approval date. Under this staggered
schedule, manufacturers with applications approved before June 30,
1975, would have 6 years to revise labeling; manufacturers with
applications approved between June 30, 1975, and June 29, 1984, would
have 7 years to revise labeling; manufacturers with

applications approved between June 30, 1984, and June 29, 1990, would
have 8 years to revise labeling; manufacturers with applications
approved between June 30, 1990, and June 29, 1996, would have 9 years
to revise labeling; and manufacturers with applications approved
between June 30, 1996, to June 29, 2001, would have 10 years to revise
labeling.
    The length of time since a product's approval determines the amount
of information available for the new content. In general, more
information about clinical experience is available for older products
than for newly approved products. Thus, FDA expects that manufacturers
with applications not subject to the PLR might spend more time
collecting and organizing the new content and that the costs to print
longer labeling may exceed those estimated for applications subject to
the PLR. Because the new content for older products could be longer
than that for newly approved products, additional FDA personnel might
be needed to review the labeling supplements for older products.
    To account for these potential differences in the costs for the
labeling of older products, this analysis uses a range of costs for
products not subject to the PLR. One-time costs to collect and organize
information range from $3,000 to $6,000 for innovator products. The
length of trade labeling might increase by 12-square inches at a cost
of $750 for innovator products and $450 for generic products. If the
labeling of older products is longer than that of newly approved
products, manufacturers with older innovator products might incur costs
for labeling distributed directly to consumers and health care
providers and costs to print longer labeling in the PDR. For this
alternative, FDA estimates that, on average, labeling printed in 8-
point type size would increase by 38 square inches at a cost of $8,050,
and the PDR would be about 0.3 page longer at a cost of $3,950.
Finally, to account for a potential increase in FDA resources for this
alternative, the number of additional FTEs would double from two to
four for the last 5 years of the analysis.
    Over 10 years, the one-time costs to revise labeling to add the new
content could range from $29.2 million to $34.3 million. Annual
incremental printing costs might total about $91.5 million over 10
years. The present value of the total compliance costs range from about
$75.3 million to about $78.2 million with a 7-percent discount rate and
from about 97.9 million to about $101.9 million with a 3-percent
discount rate. The estimated annualized compliance costs for this
alternative, therefore, range from $11.5 million to $11.9 million with
a 3-percent discount rate and range from $10.7 million to $11.1 million
with a 7-percent discount rate. Table 13 shows the upper bound estimate
for this alternative.

                      Table 13.--Upper Bound Estimated Costs of Highest Impact Alternative
----------------------------------------------------------------------------------------------------------------
                    Number of Approved Applications by                              Present Value ($ mil)
                              Type of Product              Total Costs ($  -------------------------------------
       Year       --------------------------------------        mil)
                       Innovator           Generic                                  3%                 7%
----------------------------------------------------------------------------------------------------------------
1                                140                 40                1.3                1.2                1.2
----------------------------------------------------------------------------------------------------------------
2                                130                 40                1.8                1.7                1.5
----------------------------------------------------------------------------------------------------------------
3                                500                300                6.7                6.1                5.5
----------------------------------------------------------------------------------------------------------------
4                                600                170                9.3                8.3                7.1
----------------------------------------------------------------------------------------------------------------
5                                560                250               11.2                9.7                8.0
----------------------------------------------------------------------------------------------------------------
6                                480                630               15.5               13.0               10.3
----------------------------------------------------------------------------------------------------------------
7                                430                720               16.7               13.6               10.4
----------------------------------------------------------------------------------------------------------------
8                                390                650               17.7               13.9               10.3
----------------------------------------------------------------------------------------------------------------
9                                450                670               20.0               15.3               10.9
----------------------------------------------------------------------------------------------------------------
10                               490                560               25.6               19.1               13.0
================================================================================================================
Total                          4,170              4,030              125.8              101.9               78.2
----------------------------------------------------------------------------------------------------------------

5. Summary of Regulatory Options
    Table 14 of this document shows the total and incremental costs of
the proposed rule and regulatory alternatives. The total benefits of
the regulatory alternatives would be directly related to the costs,
because the more costly the alternative the more products that would be
covered. It should be noted that although the total benefits would
correspond to the total costs, the marginal benefits of these
alternatives may not correspond directly to marginal costs. FDA is
unable, however, to quantify the total or incremental benefits of these
regulatory alternatives.
    The requirements of this proposed rule are the result of the
agency's efforts to revise the regulations concerning the content and
format of the ``Pregnancy,'' ``Labor and delivery,'' and ``Nursing
mothers'' subsections of prescription drug labeling. Although the
prospective alternative has lower costs than the proposed rule, it
would result in two types of PLR labeling--one with the revised
pregnancy and lactation content and one without the revised content. To
ensure the consistent quality of labeling subject to the PLR, the
agency, therefore, proposes that the pregnancy labeling rule apply to
all labeling subject to the PLR.

 Table 14.--Comparison of the Estimated Compliance Costs of the Proposed
                 Rule and the Regulatory Alternatives\1\
------------------------------------------------------------------------
                         Annualized costs ($      Incremental costs ($
                              million)                  million)
    Alternatives     ---------------------------------------------------
                       3 percent    7 percent    3 percent    7 percent
------------------------------------------------------------------------
No new regulatory     0            0            N/A          N/A
 action
------------------------------------------------------------------------
Content required for  4.2          4.3          4.2          4.3
 labeling
 prospectively
------------------------------------------------------------------------
Proposed rule         7.7          7.6          3.5          3.3
------------------------------------------------------------------------
Content required for  7.7 < x <    7.6 < x <    0 < x < 4.2  0 < x < 3.5
 labeling of most      11.9         11.1
 widely used drugs
------------------------------------------------------------------------
Content required for  11.5 to      10.7 to      3.8 to 4.2   3.1 to 3.5
 labeling of all       11.9         11.1
 approved drugs
------------------------------------------------------------------------
\1\ The present value of the total estimated compliance costs are
  annualized over 10 years at a 3-percent discount rate or a 7-percent
  discount rate. Compliance costs include the costs to remove the
  pregnancy categories from labeling not subject to the content
  requirements of each alternative.

IX. Paperwork Reduction Act of 1995

    This proposed rule contains information collection requirements
that are subject to review by the Office of Management and Budget (OMB)
under the Paperwork Reduction Act of 1995 (the PRA) (44 U.S.C. 3501
3520). A description of these requirements is given below, along with
an estimate of the annual reporting burden. Included in the estimate is
the time for reviewing instructions, searching existing data sources,
gathering and maintaining the data needed, and completing and reviewing
the collection of information.
    FDA invites comments on: (1) Whether the collection of information
is necessary for the proper performance of FDA's functions, including
whether the information will have practical utility; (2) the accuracy
of FDA's estimate of the burden of the proposed collection of
information, including the validity of the methodology and assumptions
used; (3) ways to enhance the quality, utility, and clarity of the
information to be collected; and (4) ways to minimize the burden of the
collection of information on respondents, including through the use of
automated collection techniques, when appropriate, and other forms of
information technology.
    Title: Content and Format of Labeling for Human Prescription Drug
and Biological Products; Requirements for Pregnancy and Lactation
Labeling
    Description: The proposed rule would amend FDA regulations
concerning the format and content of the ``Pregnancy,'' ``Labor and
delivery,'' and ``Nursing mothers'' subsections of the ``Use in
Specific Populations'' section of the labeling for human prescription
drugs. The proposal would require that labeling include a summary of
the risks of using a drug during pregnancy and lactation and a
discussion of the data supporting that summary. The labeling would also
include relevant clinical information to help health care professionals
make prescribing decisions and counsel women about the use of drugs
during pregnancy and lactation. The proposal would eliminate the
current pregnancy categories A, B, C, D, and X. The ``Labor and
delivery'' subsection would be eliminated because information on labor
and delivery would be included in the ``Pregnancy'' subsection. The
proposed rule is intended to create a consistent format for providing
information about the effects of a drug on pregnancy and lactation that
will be useful for decisionmaking by women of childbearing age and
their health care providers.
    Under proposed Sec. Sec.  201.57(c)(9)(i) and 201.57(c)(9)(ii),
holders of approved applications\7\ would be required to provide new
labeling content in a new format--that is, to completely rewrite the
pregnancy and lactation portions of each drug's labeling. These
application holders would be required to submit supplements requiring
prior approval by FDA before distribution of the new labeling, as
required in Sec.  314.70(b) or Sec.  601.12(f)(1).
---------------------------------------------------------------------------

    \7\ As discussed previously, the term ``application'' refers to
NDAs, BLAs, and efficacy supplements.
---------------------------------------------------------------------------

    Under proposed Sec.  201.80(f)(6)(i), holders of approved
applications would be required to remove the pregnancy category
designation (e.g., ``Pregnancy Category C'') from the ``Pregnancy''
subsection of the ``Precautions'' section of the labeling. These
application holders would report the labeling change in their annual
reports, as required in Sec.  314.70(d) or Sec.  601.12(f)(3).
    The new content and format requirements of the proposed rule would
apply to all applications that are required to comply with the PLR,
including: (1) Applications submitted on or after the date the proposed
rule becomes final; (2) applications pending on the date the proposed
rule becomes final; and (3) applications approved from June 30, 2001,
to the effective date of the pregnancy labeling rule.
    Information collection subject to the PRA would consist of the
following submissions under the proposed rule:
    (1) Applications submitted on or after the effective date of the
proposed rule (Sec. Sec.  314.50; 314.70(b); 601.2; 601.12(f)(1));
    (2) Amendments to applications pending on the effective date of the
final rule (Sec.  314.60);
    (3) Supplements to applications approved from June 30, 2001, to the
effective date of the final rule (Sec.  314.70(b); 601.12(f)(1));
    (4) Holders of applications approved before June 29, 2001, that
contain a pregnancy category would be required to remove the pregnancy
category designation by 3 years after the effective date of the final
rule and include this labeling change in their annual report (Sec.
314.70(d), 601.12(f)(3)).
    The information collection requirements and burden estimates are
summarized in table 12 of this document. Based on data provided in
section VIII of this document, FDA estimates that approximately
1,613\8\ applications containing labeling consistent with this
rulemaking would be submitted to FDA by approximately 885 applicants.
Based on data provided in section VIII of this document, FDA estimates
that it would take applicants approximately 20 hours to prepare and
submit labeling consistent with this rulemaking. The estimate of 20
hours is

incremental, in that it applies only to the requirements for this
rulemaking and does not indicate the total hours required to prepare
and submit complete labeling for these applications. The information
collection burden to prepare and submit labeling in accordance with
Sec. Sec.  201.56, 201.57, and 201.80 is approved by OMB under Control
Number 0910-0572.
---------------------------------------------------------------------------

    \8\ 1,613 includes approximately 1,197 innovator and 416 generic
drug products.
---------------------------------------------------------------------------

    FDA also estimates that approximately 111 amendments to
applications pending on the effective date of the pregnancy labeling
final rule would be submitted to FDA as a result of this proposal, by
approximately 81 applicants, and that it would take those applicants
approximately 20 hours (incremental) to prepare and submit each
amendment.
    In addition, FDA estimates that approximately 1,789 supplements to
approved applications would be submitted to FDA to update labeling in
accordance with this proposal, that approximately 210 application
holders would submit these supplements, and that it would take those
application holders approximately 85 hours\9\ (incremental) to prepare
and submit each supplement.
---------------------------------------------------------------------------

    \9\ The estimate for innovator companies is approximately 85
hours, and the estimate for generic companies is approximately 22
hours. For purposes of this information collection analysis, FDA
used the higher estimate and invites comment on the time needed to
prepare and submit these supplements.
---------------------------------------------------------------------------

    FDA also estimates that approximately 4,720\10\ annual reports
containing labeling changes resulting from this rulemaking would be
submitted to FDA by approximately 300 application holders, and that it
would take application holders approximately 50 hours\11\ to prepare
and submit each revision.
---------------------------------------------------------------------------

    \10\ 4,720 includes approximately 1,697 innovator and 3,023
generic drug products.
    \11\ The estimate for innovator companies is approximately 50
hours, and the estimate for generic companies is approximately 22
hours. For purposes of this information collection analysis, FDA
used the higher estimate and invites comment on the time needed to
prepare and submit these supplements.
---------------------------------------------------------------------------

    FDA must request an extension of approval of this information
collection every 3 years. For purposes of OMB approval for the first 3-
year period, FDA divided the total hours in table 15 of this document
(422,545 hours) by 3 to provide OMB an annualized estimate of burdens
associated with this rulemaking (i.e., 140,848 hours).
    Description of Respondents: Persons and businesses, including small
businesses and manufacturers.
    Burden Estimate: Table 15 of this document provides an estimate of
the annual reporting burden for the proposed pregnancy and lactation
labeling requirements. FDA specifically requests comments on these
estimates.

                                                     Table 15.--Estimated Annual Reporting Burden\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Number of       Number of Responses                         Hours per
               Category (21 CFR section)                   Respondents        per Respondent      Total  Responses       Response         Total Hours
--------------------------------------------------------------------------------------------------------------------------------------------------------
New NDAs/ANDAs/BLAs/efficacy supplements submitted on                 885                  1.82              1,613                 20             32,260
 or after effective date (Sec.  Sec.   314.50;
 314.70(b); 601.2; 601.12(f)(1))
--------------------------------------------------------------------------------------------------------------------------------------------------------
Amendments to applications pending on effective date                   81                  1.37                111                 20              2,220
 (Sec.   314.60)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Supplements to applications approved 6/30/01 to                       210                  8.52              1,789                 85            152,065
 effective date (Sec.   314.70(b); 601.12(f)(1))
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual report submission of revised labeling for                      300                 15.73              4,720                 50            236,000
 applications approved before 6/29/01 that contain a
 pregnancy category (Sec.   314.70(d); 601.12(f)(3))
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total                                                                                422,545
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ There are no capital costs or operating and maintenance costs associated with this collection of information.

    In compliance with section 3507(d) of the PRA, the agency has
submitted the information collection requirements of this proposed rule
to OMB for review. 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 by June
30, 2008, to the Office of Information and Regulatory Affairs, OMB. To
ensure that comments on 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:<PHONE_NUMBER>,
or e-mailed to<EMAIL_ADDRESS>
X. Federalism

    We have analyzed this proposed rule in accordance with the
principles set forth in Executive Order 13132. Section 4(a) of the
Executive order requires agencies to ``construe * * * a Federal statute
to preempt State law only where the statute contains an express
preemption provision or there is some other clear evidence that the
Congress intended preemption of State law, or where the exercise of
State authority conflicts with the exercise of Federal authority under
the Federal statute.'' In this proposed rule, FDA is proposing to
revise its existing requirements concerning the format and content of
the ``Pregnancy,'' ``Labor and delivery,'' and ``Nursing mothers''
subsections of labeling for human prescription drug and biological
products. To the extent that a State requires labeling that conflicts
with these requirements, the State required labeling would be subject
to implied conflict preemption.
    As stated in the preamble, this proposed rule would amend portions
of FDA's regulations that were recently revised by the PLR. When FDA
finalized

the PLR, the agency responded to comments regarding the product
liability implications of revising the labeling for prescription drugs.
Several comments on the proposed PLR had raised concerns about State
requirements on drug labeling, often as a result of product liability
lawsuits, that conflict with federal requirements. As a result of those
comments, and in discussing federalism issues, FDA restated its
longstanding views on preemption. For further discussion of this issue,
see 71 FR 3922 at 3933 through 3936 and 3967 through 3969. FDA's
statements in this regard are applicable to this proposed rule as well,
and reflect the agency's current position on this issue. Section 4(c)
of Executive Order 13132 instructs us to restrict any Federal
preemption of State law to the ``minimum level necessary to achieve the
objectives of the statute pursuant to which the regulations are
promulgated.'' This proposed rule meets the preceding requirement
because as discussed above, it would preempt State laws that conflict
with these Federal requirements. Section 4(d) of Executive Order 13132
states that when an agency foresees the possibility of a conflict
between State law and federally protected interests within the agency's
area of regulatory responsibility, the agency ``shall consult, to the
extent practicable, with appropriate State and local officials in an
effort to avoid such a conflict.'' In this case, FDA foresees the
possibility of a conflict between State law and federally protected
interests within the agency's area of regulatory responsibility.
Section 4(e) of Executive Order 13132 adds that ``when an agency
proposes to act through adjudication or rulemaking to preempt State
law, the agency ``shall provide all affected State and local officials
notice and an opportunity for appropriate participation in the
proceedings.''
    FDA is seeking input from all stakeholders on the proposed
requirements for the content and format of pregnancy labeling through
publication of the proposed rule in the Federal Register and will
consult with State and local officials in an effort to avoid conflict
between State law and federal protected interests.

XI. Request for 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.
    Please note that on January 15, 2008, the FDA Division of Dockets
Management Web site transitioned to the Federal Dockets Management
System (FDMS). FDMS is a Government-wide, electronic docket management
system. Electronic comments or submissions will be accepted by FDA only
through FDMS at http://www.regulations.gov.

XII. 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 FDA is not responsible
for any subsequent changes to the Web sites after this document
publishes in the Federal Register.)
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    29. Centers for Disease Control and Prevention, ``Current
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    46. Wisner, K. L., ``Risk-Benefit Decision Making for Treatment
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www.emea.europa.eu/htms/human/qrd/qrdtemplate.htm (last viewed 4/23/
08).
    50. U.S. Department of Commerce, Economics and Statistics
Administration, U.S. Census Bureau, ``Biological Product (Except
Diagnostic) Manufacturing: 2002,'' 2002 Economic Census
Manufacturing Industry Series, EC02-31I-325414, December 2004.
    51. U.S. Department of Commerce, Economics and Statistics
Administration, U.S. Census Bureau, ``Pharmaceutical Preparation
Manufacturing: 2002,'' 2002 Economic Census Manufacturing Industry
Series, EC02-31I-325412, December 2004.

List of Subjects in 21 CFR Part 201

    Drugs, Labeling, Reporting and recordkeeping requirements.
    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 part 201 be amended as follows:

PART 201--LABELING

    1. The authority citation for 21 CFR part 201 continues to read as
follows:

    Authority:  21 U.S.C. 321, 331, 351, 352, 353, 355, 358, 360,
360b, 360gg-360ss, 371, 374, 379e; 42 U.S.C. 216, 241, 262, 264.

Sec.  201.56   [Amended]

    2. Amend Sec.  201.56 in paragraph (d)(1) by removing from the list
of headings and subheadings the subheadings ``8.2 Labor and delivery''
and ``8.3 Nursing mothers'' and adding in their place the subheading
``8.2 Lactation''.
    3. Section 201.57 is amended by removing and reserving paragraph
(c)(9)(iii) and by revising paragraphs (c)(9)(i) and (c)(9)(ii) to read
as follows:

Sec.  201.57   Specific requirements on content and format of labeling
for human prescription drug and biological products described in Sec.
201.56(b)(1).

* * * * *
    (c) * * *
    (9) * * *
    (i) 8.1 Pregnancy. This subsection of the labeling must contain the
following information in the following order:
    (A) Pregnancy exposure registry. If there is a pregnancy exposure
registry for the drug, the telephone number or other information needed
to enroll in the registry or to obtain information about the registry
must be stated at the beginning of the ``Pregnancy'' subsection of the
labeling.
    (B) General statement about background risk. The following
statement must be included:
    ``All pregnancies have a background risk of birth defect, loss, or
other adverse outcome regardless of drug exposure. The fetal risk
summary below describes (name of drug)'s potential to increase the risk
of developmental abnormalities above the background risk.''
    (C) Fetal risk summary. Under the subheading ``Fetal Risk
Summary,'' the labeling must contain a risk conclusion, contain a
narrative description of the risk(s) (if the risk conclusion is based
on human data), and refer to any contraindications or warnings and
precautions.
    (1) Using the risk conclusions provided in paragraphs
(c)(9)(i)(C)(2) and (c)(9)(i)(C)(3) of this section, the fetal risk
summary must characterize the likelihood that the drug increases the
risk of developmental abnormalities in humans (i.e., structural
anomalies, fetal and infant mortality, impaired physiologic function,
alterations to growth) and other relevant risks (e.g., transplacental
carcinogenesis). More than one risk conclusion may be needed to
characterize the likelihood of risk for different developmental
abnormalities, doses, durations of exposure, or gestational ages at
exposure. All available data, including human, animal, and
pharmacologic data, that are relevant to assessing the likelihood that
a drug will increase the risk of developmental abnormalities and other
relevant risks must be considered. The source(s) of the data that are
the basis for the fetal risk summary must be stated. If data
demonstrate that a drug is not systemically absorbed, the fetal risk
summary must contain only the following statement, without any other
risk conclusion:
    ``(Name of drug) is not absorbed systemically from (part of body)
and cannot be detected in the blood.

Maternal use is not expected to result in fetal exposure to the drug.''
    (2) Risk conclusions based on human data. When both human and
animal data are available, risk conclusions based on human data must be
presented before risk conclusions based on animal data. A risk
conclusion based on human data must be followed by a narrative
description of the risks as described in paragraph (c)(9)(i)(C)(4) of
this section.
    (i) Risk conclusions based on sufficient human data. Sufficient
human data may come from such sources as clinical trials, pregnancy
exposure registries or other large scale epidemiologic studies, or case
series reporting a rare event. When human data are sufficient to
reasonably determine the likelihood that the drug increases the risk of
fetal developmental abnormalities or specific developmental
abnormalities, the likelihood of increased risk must be characterized
using one of the following risk conclusions: ``Human data do not
indicate that (name of drug) increases the risk of (type of
developmental abnormality or specific developmental abnormality).'' or
``Human data indicate that (name of drug) increases the risk of (type
of developmental abnormality or specific abnormality).''
    (ii) Risk conclusions based on other human data. When human data
are available but are not sufficient to use one of the risk conclusions
listed in paragraph (c)(9)(i)(C)(2)(i) of this section, the likelihood
that the drug increases the risk of developmental abnormalities must be
characterized as low, moderate, or high.
    (3) Risk conclusions based on animal data. When the data on which
the risk conclusion is based are animal data, the fetal risk summary
must characterize the likelihood that the drug increases the risk of
developmental abnormalities using one of the following risk
conclusions:
    (i) Not predicted to increase the risk. When animal data contain no
findings for any developmental abnormality, the fetal risk summary must
state: ``Based on animal data, (name of drug) is not predicted to
increase the risk of developmental abnormalities (see Data).''
    (ii) Low likelihood of increased risk. When animal data contain
findings of developmental abnormality but the weight of the evidence
indicates that the findings are not relevant to humans (e.g., findings
in a single animal species that are caused by unique drug metabolism or
a mechanism of action thought not to be relevant to humans; findings at
high exposures compared with the maximum recommended human exposure),
the fetal risk summary must state: ``Based on animal data, the
likelihood that (name of drug) increases the risk of developmental
abnormalities is predicted to be low (see Data).''
    (iii) Moderate likelihood of increased risk. When animal data
contain findings of one or more fetal developmental abnormalities in
one or more animal species, and those findings are thought to be
relevant to humans, the fetal risk summary must state: ``Based on
animal data, the likelihood that (name of drug) increases the risk of
developmental abnormalities is predicted to be moderate (see Data).''
    (iv) High likelihood of increased risk. When animal data contain
robust findings of developmental abnormalities (e.g., multiple findings
in multiple animal species, similar findings across species, findings
at low exposures compared with the anticipated human exposure) thought
to be relevant for humans, the fetal risk summary must state: ``Based
on animal data, the likelihood that (name of drug) increases the risk
of developmental abnormalities is predicted to be high (see Data).''
    (v) Insufficient data. When there are insufficient animal data or
no animal data on which to assess the drug's potential to increase the
risk of developmental abnormalities, the fetal risk summary must so
state (see Data).
    (4) Narrative description of risk(s). When there are human data,
the risk conclusion must be followed by a brief description of the
risks of developmental abnormalities as well as other relevant risks
associated with the drug. To the extent possible, this description must
include the specific developmental abnormality (e.g., neural tube
defects); the incidence, seriousness, reversibility, and correctability