[Federal Register Volume 78, Number 213 (Monday, November 4, 2013)]
[Proposed Rules]
[Pages 65904-65923]
[FR Doc No: 2013-25956]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Parts 20, 310, 314, and 600

[Docket No. FDA-2011-N-0898]
RIN 0910-AG88

Permanent Discontinuance or Interruption in Manufacturing of
Certain Drug or Biological Products

AGENCY: Food and Drug Administration, HHS.

ACTION: Proposed rule; request for comments.

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SUMMARY: The Food and Drug Administration (FDA or the Agency) is
proposing to amend its regulations to implement certain drug shortages
provisions of the Federal Food, Drug, and Cosmetic Act (the FD&C Act),
as amended by the Food and Drug Administration Safety and Innovation
Act (FDASIA). The proposed rule would require all applicants of covered
approved drugs or biological products--including certain applicants of
blood or blood components for transfusion and all manufacturers of
covered drugs marketed without an approved application--to notify FDA
electronically of a permanent discontinuance or an interruption in
manufacturing of the product that is likely to lead to a meaningful
disruption in supply (or a significant disruption in supply for blood
or blood components) of the product in the United States.

DATES: Submit either electronic or written comments on the provisions
of this proposed rule by January 3, 2014. Submit comments on the
information collection requirements under the Paperwork Reduction Act
of 1995 (the PRA) by December 4, 2013 (see the ``Paperwork Reduction
Act of 1995'' section).

ADDRESSES: You may submit comments, identified by Docket No. FDA-2011-
N-0898 by any of the following methods, except that comments on
information collection issues under the PRA must be submitted to the
Office of Information and Regulatory Affairs, Office of Management and
Budget (OMB) (see the ``Paperwork Reduction Act of 1995'' section).

Electronic Submissions

    Submit electronic comments in the following way:
     Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.

Written Submissions:

    Submit written submissions in the following ways:
     Mail/Hand delivery/Courier (for paper or CD-ROM
submissions): Division of Dockets Management (HFA-305), Food and Drug
Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.
    Instructions: All submissions received must include the Agency name
and Docket No. 2011-N-0898 for this rulemaking. All comments received
may be posted without change to http://www.regulations.gov, including
any personal information provided. For additional information on
submitting comments, see the ``Comments'' heading of the SUPPLEMENTARY
INFORMATION section of this document.
    Docket: For access to the docket to read background documents or
comments received, go to http://www.regulations.gov and insert the
docket number, found in brackets in the heading of this document, into
the ``Search'' box and follow the prompts and/or go to the Division of
Dockets Management, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

FOR FURTHER INFORMATION CONTACT: Kalah Auchincloss, Center for Drug
Evaluation and Research, Food and Drug Administration, 10903 New
Hampshire Ave., Bldg. 51, Rm. 6208, Silver Spring, MD 20993, 301-796-
0659; or Stephen Ripley, Center for Biologics Evaluation and Research,
Food and Drug Administration, 1401 Rockville Pike, Rockville, MD 20852-
1448,<PHONE_NUMBER>.

Table of Contents

I. Executive Summary
    A. Purpose of the Proposed Rule
    B. Summary of the Major Provisions of the Proposed Rule
    C. Summary of the Costs and Benefits of the Proposed Rule
II. Introduction
III. Description of the Proposed Rule
    A. Persons Subject to the Proposed Rule
    B. Products Subject to the Proposed Rule
    C. Notification of a Permanent Discontinuance or an Interruption
in Manufacturing
IV. Legal Authority
V. Analysis of Impacts
    A. Introduction
    B. Summary
VI. Paperwork Reduction Act of 1995
VII. Federalism
VIII. Environmental Impact
IX. Comments
X. References

SUPPLEMENTARY INFORMATION:

I. Executive Summary

A. Purpose of the Proposed Rule

    FDASIA (Pub. L. 112-144) significantly amended provisions in the
FD&C Act related to drug shortages. Among other things, FDASIA amended
section 506C of the FD&C Act (21 U.S.C. 356c) to require all
manufacturers of certain drugs to notify FDA of a permanent
discontinuance or an interruption in manufacturing of these drugs 6
months in advance of the permanent discontinuance or interruption in
manufacturing, or as soon practicable. FDASIA also added section 506E
to the FD&C Act (21 U.S.C. 356e) requiring FDA to maintain a current
list of drugs that are determined by FDA to be in shortage in the
United States, and to include on that public list certain information
about those shortages. Finally, FDASIA permits FDA to apply section
506C to biological products by regulation, and requires FDA to issue a
final rule implementing

certain drug shortages provisions in FDASIA by January 9, 2014.
    In accordance with FDASIA, FDA is issuing this proposed rule, which
we believe will improve FDA's ability to identify potential drug
shortages and to prevent or mitigate the impact of these shortages.

B. Summary of the Major Provisions of the Proposed Rule

    The proposed rule would modify FDA's regulations to implement
sections 506C and 506E of the FD&C Act as amended by FDASIA.
    Proposed Sec. Sec.  310.306, 314.81(b)(3)(iii) (21 CFR
314.81(b)(3)(iii)), and 600.82 would require all applicants of certain
approved drugs or biological products,\1\ including applicants of blood
or blood components for transfusion (``blood or blood components'')
that manufacture a significant percentage of the U.S. blood supply, and
all manufacturers of certain drugs marketed without an approved
application (``unapproved drug manufacturers''), to notify FDA
electronically of a permanent discontinuance or an interruption in
manufacturing of the product that is likely to lead to a meaningful
disruption in supply (for drugs and biological products other than
blood or blood components) or a significant disruption in supply (for
blood or blood components) of the product in the United States.
Applicants \2\ would be required to notify FDA of a permanent
discontinuance or an interruption in supply if the drug or biological
product is a prescription product that is life supporting, life
sustaining, or intended for use in the prevention or treatment of a
debilitating disease or condition, including any such drug used in
emergency medical care or during surgery, and excluding
radiopharmaceutical products (referred to in this document as
``covered'' drugs or biological products). The proposed rule would
require notification to FDA at least 6 months prior to date of the
permanent discontinuance or interruption in manufacturing, or, if 6
months' advance notice is not possible, as soon as practicable
thereafter, but in no case later than 5 business days after the
permanent discontinuance or interruption in manufacturing occurs.
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    \1\ As used throughout this preamble, the term ``biological
product'' refers to a biological product licensed under section 351
of the Public Health Service Act, other than a biological product
that also meets the definition of a device in section 201(h) of the
FD&C Act (21 U.S.C. 321(h)).
    \2\ In this document, for the sake of convenience, we
collectively refer to applicants holding an abbreviated new drug
application (ANDA), new drug application (NDA), or biologics license
application (BLA) and unapproved drug manufacturers subject to this
proposed rule as the ``applicant'' (although we recognize that an
unapproved drug manufacturer is not an applicant). We may also
individually refer to the ANDA, NDA, and BLA applicant or unapproved
drug manufacturer as needed, if the context requires distinguishing
between these entities.
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    The proposed rule would also require FDA to issue a public
noncompliance letter to an applicant for failure to notify FDA under
the proposed rule; specify minimum information that must be included in
the notification; codify FDA's current practice of publicly
disseminating information on shortages and maintaining public lists of
drugs and biological products in shortage (subject to certain
confidentiality protections); and define the terms, ``drug shortage,''
``biological product shortage,'' ``meaningful disruption,''
``significant disruption,'' ``life supporting or life sustaining,'' and
``intended for use in the prevention or treatment of a debilitating
disease or condition.''
    Finally, the proposed rule would include a technical revision to
Sec.  20.100 (21 CFR 20.100) (public disclosure regulations) to include
a cross-reference to the disclosure provisions in in Sec. Sec.
310.306, 314.81, and 600.82; and would remove Sec.  314.91 (21 CFR
314.91) related to reducing the 6-month notification period for ``good
cause,'' since it is no longer applicable under the FDASIA-revised
section 506C.

C. Summary of the Costs and Benefits of the Proposed Rule

    The proposed rule would impose annual reporting costs of up to
$16,576 on those applicants affected by the rule, and up to $441,000 on
FDA in review costs. Undertaking mitigation strategies, as measured by
labor resources, is estimated to cost FDA between $2.44 and $7.84
million, and industry between $3.86 and $12.43 million. We also
estimate annual costs for industry between $8.54 and $26.89 million
associated with increasing production. Estimated total annual costs of
the interactions between industry and FDA range between $14.99 and
$47.62 million. Discounting over 20 years, annual quantified benefits
from avoiding the purchase of alternative products, managing product
shortages, and life-years gained, would range from $27.56 million to
$86.77 million using a 3 percent discount rate, and from $27.50 million
to $86.61 million using a 7 percent discount rate. The public health
benefits, mostly nonquantified, include the value of information that
would assist FDA, manufacturers, health care providers, and patients in
evaluating, mitigating, and preventing shortages of drugs and
biological products that could otherwise result in delayed patient
treatment or interruption in clinical trial development.

II. Introduction

    Recent experience with shortages of drugs and biological products
in the United States has shown the serious and immediate effects they
can have on patients and health care providers. According to
information from FDA's drug and biological product shortages databases,
the number of drug and biological product shortages quadrupled from
approximately 61 in 2005 to more than 250 shortages in 2011. Although
the number of drug shortages significantly decreased in 2012 to 117
shortages, drug and biological product shortages still represent an
ongoing challenge to public health.\3\ Shortages can involve critical
drugs used to treat cancer, to provide required parenteral nutrition,
or to address other serious medical conditions and can delay or deny
needed care for patients. Shortages can also result in providers
prescribing second-line alternatives, which may be less effective or
higher risk than first-line therapies.
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    \3\ Information on drug shortages can be found at http://www.fda.gov/drugs/drugsafety/drugshortages/default.htm (drug
shortages) and http://www.fda.gov/BiologicsBloodVaccines/SafetyAvailability/Shortages/default.htm (biological product
shortages).
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    Preventing drug and biological product shortages is a top priority
for FDA. Working closely with manufacturers and other stakeholders, FDA
was able to help prevent just under 200 drug and biological product
shortages in 2011 and more than 280 such shortages in 2012, using tools
such as:
     Working with manufacturers to resolve manufacturing and
quality issues contributing to short supply.
     Expediting FDA inspections and reviews of submissions from
manufacturers to prevent and/or alleviate shortages.
     Identifying and working with manufacturers willing to
initiate or increase production to cover expected gaps in supply.
     Exercising enforcement discretion in appropriate
circumstances, if this would not cause undue risk to patients.
    In response to the increasing concerns about the impact of
shortages on health care in the United States, on October 31, 2011,
President Obama issued Executive Order 13588 directing FDA to ``take
steps that will help to prevent and reduce current and future
disruptions in the supply of lifesaving medicines'' and noting that
``one important step is

ensuring that FDA and the public receive adequate advance notice of
shortages whenever possible'' (Ref. 1 of this proposed rule). In
response to the Executive Order's directive to address the growing
problem of drug shortages, FDA published an interim final rule (IFR) on
December 19, 2011 (effective January 18, 2012), modifying the
regulation at Sec.  314.81 related to drug shortages (76 FR 78530). As
a result of the Executive Order and IFR, early notifications to FDA of
potential shortages increased from an average of 10 a month before the
Executive Order to approximately 60 a month in the months after the
IFR. This dramatic increase in early notifications enabled FDA to work
with manufacturers to successfully prevent numerous shortages. As we
stated above, FDA was able to prevent just under 200 drug and
biological product shortages in 2011 and more than 280 such shortages
in 2012. Moreover, the number of new drug shortages decreased from more
than 250 in 2011 to 117 in 2012--a 50 percent reduction.
    In July 2012, FDASIA amended the FD&C Act to modify existing drug
shortages requirements and to add new drug shortages provisions. This
rule proposes to implement the drug shortages provisions of FDASIA,
and, when final, will supersede the IFR. Although many of the issues
raised by the 11 comments we received on the IFR are no longer directly
applicable to this rulemaking given the changes to the underlying
statute made by FDASIA, when drafting this proposed rule we considered
these comments to the extent that they were applicable.\4\ Where
appropriate, we have summarized and responded to the IFR comments in
this preamble.
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    \4\ The IFR comments are available electronically at http://www.regulations.gov, Docket No. FDA-2011-N-0898, or can be obtained
in person at the Division of Dockets Management, 5630 Fishers Lane,
Rm. 1061, Rockville, MD 20852.
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III. Description of the Proposed Rule

    Section 1001 of FDASIA made substantial changes to section 506C of
the FD&C Act related to reporting and addressing ``permanent
discontinuances'' or ``interruptions in manufacturing'' of certain drug
products. Most significantly for purposes of this proposed rule,
section 506C of the FD&C Act as amended:
     Requires all manufacturers of a prescription drug that is
life supporting, life sustaining, or intended for use in the prevention
or treatment of a debilitating disease or condition, including any such
drug used in emergency medical care or during surgery, and excluding
radiopharmaceutical products, to notify FDA of a permanent
discontinuance in the manufacture of the drug or an interruption in the
manufacturing of the drug that is likely to lead to a meaningful
disruption in the supply of that drug in the United States at least 6
months prior to the date of the permanent discontinuance or
interruption in manufacturing, or, if that is not possible, as soon as
practicable.
     Requires the manufacturer to include in the notification
the reason for the permanent discontinuance or interruption in
manufacturing.
     Requires FDA to issue a letter to a ``person'' who fails
to comply with the notification requirements in section 506C.
     Defines the terms ``drug,'' ``drug shortage,'' and
``meaningful disruption,'' and requires FDA to define the terms ``life
supporting,'' ``life sustaining,'' and ``intended for use in the
prevention or treatment of a debilitating disease or condition.''
     Permits FDA to apply section 506C to biological products,
including vaccines and plasma-derived products and their recombinant
analogs, if FDA determines the inclusion would benefit public health,
taking into account existing supply reporting programs and aiming to
reduce duplicative notifications.
     Requires FDA to distribute information on drug shortages
to the public, to the maximum extent possible, subject to certain
confidentiality protections.
    In addition to modifying section 506C, FDASIA added several new
drug shortage-related sections to the FD&C Act, including section 506E.
Section 506E of the FD&C Act requires FDA to maintain an up-to-date
list of drugs that are determined by FDA to be in shortage, including
the names and the National Drug Codes (NDCs) of such drugs in shortage,
the name of each manufacturer of the drug, the reason for each shortage
as determined by FDA (choosing from a list of reasons enumerated in the
statute), and the estimated duration of each shortage. Section 506E of
the FD&C Act also includes confidentiality provisions.
    This rule proposes to implement sections 506C and 506E of the FD&C
Act by amending Sec.  314.81(b)(3)(iii) (permanent discontinuance or
interruption in manufacturing of approved prescription drugs) and Sec.
20.100 (cross-reference to disclosure provisions); adding new Sec.
310.306 (permanent discontinuance or interruption in manufacturing of
marketed prescription unapproved new drugs) and Sec.  600.82 (permanent
discontinuance or interruption in manufacturing of prescription
biological products); and removing Sec.  314.91 (reduction in the
discontinuance notification period). Table 1 compares the proposed rule
to the current regulation (IFR).
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    \5\ With respect to blood and blood components for transfusion,
the reporting requirement applies only to an applicant that
manufactures a significant percentage of the U.S. blood supply.

      Table 1--Current Regulation (IFR) Compared With Proposed Rule
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                                          Current
            Requirement               regulation (IFR)    Proposed rule
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Scope of products subject to         Sec.               Sec.   310.306.
 notification requirements.           314.81(b)(3)(iii  Sec.
                                      )(a).              314.81(b)(3)(ii
                                                         i)(a) and (f).
                                                        Sec.   600.82(a)
                                                         and (f).
                                     A drug product     All prescription
                                      approved under     drugs and
                                      an NDA or ANDA     biological
                                      that is:           products,
                                      Life       including
                                      supporting, life   marketed
                                      sustaining or      unapproved
                                      intended for use   prescription
                                      in the             drugs, that
                                      prevention of a    are:
                                      serious disease    Life
                                      or condition;      supporting,
                                      and.               life sustaining
                                      Not        or intended for
                                      originally         use in the
                                      derived from       prevention or
                                      human tissue and   treatment of a
                                      replaced by a      debilitating
                                      recombinant        disease or
                                      product..          condition,
                                                         including any
                                                         such drug used
                                                         in emergency
                                                         medical care or
                                                         during surgery;
                                                         and
                                                         That
                                                         are not
                                                         radiopharmaceut
                                                         ical
                                                         products.\5\

                                                        The terms ``life
                                                         supporting or
                                                         life
                                                         sustaining''
                                                         and ``intended
                                                         for use in the
                                                         prevention or
                                                         treatment of a
                                                         debilitating
                                                         disease or
                                                         condition'' are
                                                         defined in the
                                                         proposed rule.
What triggers notification.........  Sec.               Sec.
                                      314.81(b)(3)(iii   314.81(b)(3)(ii
                                      )(a) and (d).      i)(a) and (f).
                                                        Sec.
                                                         600.82(a)(1)
                                                         and (f).
                                     A                  For products
                                      ``discontinuance   other than
                                      ,'' defined as     blood or blood
                                      ``any              components, a
                                      interruption in    ``permanent
                                      manufacturing .    discontinuance'
                                      . . that could     ' or an
                                      lead to a          ``interruption
                                      potential          in
                                      disruption in      manufacturing
                                      supply of the      that is likely
                                      drug product [in   to lead to a
                                      the United         meaningful
                                      States], whether   disruption in
                                      the interruption   supply of the
                                      is intended to     product in the
                                      be temporary or    United
                                      permanent''.       States'';
                                                         ``meaningful
                                                         disruption'' is
                                                         defined in the
                                                         statute and the
                                                         proposed rule.
                                                        Sec.
                                                         600.82(a)(2)
                                                         and (f).
                                                        For blood or
                                                         blood
                                                         components, a
                                                         ``permanent
                                                         discontinuance'
                                                         ' or an
                                                         ``interruption
                                                         in
                                                         manufacturing
                                                         that is likely
                                                         to lead to a
                                                         significant
                                                         disruption in
                                                         supply of the
                                                         product in the
                                                         United
                                                         States'';
                                                         ``significant
                                                         disruption'' is
                                                         defined in the
                                                         proposed rule.
Who must notify FDA................  Sec.               Sec.
                                      314.81(b)(3)(iii   314.81(b)(3)(ii
                                      )(a) and (d).      i)(a).
                                                        Sec.
                                                         600.82(a).
                                     Applicants who     All applicants
                                      are sole           for covered,
                                      manufacturers of   approved drugs
                                      covered drugs;     and biological
                                      sole               products (other
                                      manufacturer is    than blood or
                                      defined in the     blood
                                      regulation.        components),
                                                         all applicants
                                                         for blood or
                                                         blood
                                                         components that
                                                         manufacture a
                                                         significant
                                                         percentage of
                                                         the U.S. blood
                                                         supply, and all
                                                         manufacturers
                                                         of covered
                                                         drugs marketed
                                                         without an
                                                         approved
                                                         application.
When to notify FDA.................  Sec.               Sec.
                                      314.81(b)(3)(iii   314.81(b)(3)(ii
                                      )(a).              i)(b).
                                                        Sec.
                                                         600.82(b).
                                     At least 6 months
                                      prior to the
                                      discontinuance.
                                     Sec.   314.91....   At
                                     Applicants may      least 6 months
                                      seek, and FDA      prior to the
                                      may grant, a       permanent
                                      reduction in the   discontinuance
                                      6-month            or interruption
                                      notification       in
                                      period for         manufacturing;
                                      ``good cause.''.   or
                                                         If
                                                         notification at
                                                         least 6 months
                                                         prior is
                                                         impossible,
                                                         ``as soon as
                                                         practicable,''
                                                         which is
                                                         further
                                                         described in
                                                         the proposed
                                                         rule.
                                                         Deletes
                                                         Sec.   314.91
                                                         in its
                                                         entirety,
                                                         because it is
                                                         no longer
                                                         applicable
                                                         under section
                                                         506C of the
                                                         FD&C Act as
                                                         amended by
                                                         FDASIA.
How to notify FDA..................  Sec.               Sec.
                                      314.81(b)(3)(iii   314.81(b)(3)(ii
                                      )(b).              i)(b).
                                                        Sec.
                                                         600.82(b).
                                     Electronically or  Electronically
                                      by phone,          in a format FDA
                                      according to       can process,
                                      instructions on    review, and
                                      FDA's drug         archive.
                                      shortages Web
                                      page.
What to include in the notification  Not specified....  Sec.
                                                         314.81(b)(3)(ii
                                                         i)(c).
                                                        Sec.
                                                         600.82(c).
                                                         Name,
                                                         NDC (or, for
                                                         certain
                                                         biological
                                                         products, an
                                                         alternative, as
                                                         applicable),
                                                         and applicant
                                                         of the product;
                                                         Whether
                                                         the
                                                         notification is
                                                         a permanent
                                                         discontinuance
                                                         or an
                                                         interruption in
                                                         manufacturing;
                                                         A
                                                         description of
                                                         the reason for
                                                         the permanent
                                                         discontinuance
                                                         or interruption
                                                         in
                                                         manufacturing;
                                                         and Estimated
                                                         duration of the
                                                         interruption in
                                                         manufacturing.
Dissemination of information.......  Sec.               Sec.
                                      314.81(b)(3)(iii   310.306(c).
                                      )(c).             Sec.
                                                         314.81(b)(3)(ii
                                                         i)(c).
                                                        Sec.
                                                         600.82(c).
                                     FDA will publicly  FDA will
                                      disclose a list    maintain public
                                      of all drug        lists of drugs
                                      products           and biological
                                      discontinued       products
                                      under Sec.         determined by
                                      314.81(b)(3)(iii   FDA to be in
                                      )(a).              shortage,
                                                         including the
                                                         names, NDCs
                                                         (or, for
                                                         certain
                                                         biological
                                                         products, an
                                                         alternative, as
                                                         applicable),
                                                         and each
                                                         applicant of
                                                         the product
                                                         (or, for
                                                         marketed
                                                         unapproved
                                                         prescription
                                                         drugs, each
                                                         manufacturer of
                                                         the product);
                                                         the reason for
                                                         the shortage;
                                                         and the
                                                         estimated
                                                         duration of the
                                                         shortage.
Confidentiality....................  Not specified in   Sec.
                                      regulation, but    314.81(b)(3)(ii
                                      information        i)(d)
                                      submitted to FDA  Sec.   600.82(d)
                                      under the         ................
                                      regulation is     Includes
                                      subject to         specific
                                      protections for    reference to
                                      trade secrets      protection of
                                      and confidential   trade secrets
                                      commercial and     and
                                      financial          confidential
                                      information        commercial
                                      where applicable.  information
                                                         submitted to
                                                         FDA under the
                                                         proposed rule
                                                         and allows FDA
                                                         to choose not
                                                         to make certain
                                                         other
                                                         information
                                                         public if it
                                                         determines that
                                                         would adversely
                                                         affect the
                                                         public health.
                                     No equivalent      Sec.
                                      provision.         20.100(c)(45).

                                                        Cross-reference
                                                         to disclosure
                                                         provisions in
                                                         Sec.  Sec.
                                                         310.306,
                                                         314.81, and
                                                         600.82.
Noncompliance......................  No equivalent      Sec.
                                      provision.         310.306(b).
                                                        Sec.
                                                         314.81(b)(3)(ii
                                                         i)(e).
                                                        Sec.
                                                         600.82(e).
                                                        If an applicant
                                                         of a covered
                                                         drug or
                                                         biological
                                                         product, or
                                                         manufacturer of
                                                         a covered,
                                                         marketed
                                                         unapproved
                                                         prescription
                                                         drug, fails to
                                                         submit a
                                                         notification
                                                         required under
                                                         the proposed
                                                         rule within the
                                                         required
                                                         timeframe, FDA
                                                         will issue a
                                                         publicly
                                                         available
                                                         noncompliance
                                                         letter to the
                                                         applicant or
                                                         unapproved drug
                                                         manufacturer.
------------------------------------------------------------------------

A. Persons Subject to the Proposed Rule

    Proposed Sec. Sec.  310.306, 314.81(b)(3)(iii), and 600.82 would
require notification to FDA of a permanent discontinuance or an
interruption in manufacturing of a covered drug or biological product.
Under the proposed rule, the following persons would be subject to
these notification requirements:
     All applicants with an approved NDA or ANDA for a covered
drug product (proposed Sec.  314.81(b)(3)(iii)).
     All applicants with an approved BLA for a covered
biological product, other than blood or blood components (proposed
Sec.  600.82(a)(1)).
     Applicants with an approved BLA for blood or blood
components, if the applicant is a manufacturer of a significant
percentage of the U.S. blood supply (proposed Sec.  600.82(a)(2)).
     All manufacturers of a covered drug product marketed
without an approved NDA or ANDA (proposed Sec.  310.306, which applies
Sec.  314.81(b)(3)(iii) in its entirety to covered drug products
marketed without an approved NDA or ANDA).
    Section 506C of the FD&C Act as amended by FDASIA requires a
``manufacturer'' to notify FDA of a permanent discontinuance or an
interruption in manufacturing. The proposed rule would require the
ANDA, NDA, or BLA applicant (for approved drugs or biological products)
or the unapproved drug manufacturer (for marketed, unapproved drugs) to
notify FDA of a permanent discontinuance or an interruption in
manufacturing.
    For purposes of section 506C of the FD&C Act, under the proposed
rule an ANDA, NDA, or BLA applicant would be considered the
manufacturer of an approved, covered product, even if the ANDA, NDA, or
BLA applicant contracts that function out to another entity. In other
words, the proposed rule makes clear that for approved, covered drugs
and biological products, the ANDA, NDA, or BLA applicant bears the
responsibility for reporting to FDA a permanent discontinuance or an
interruption in manufacturing, whether the product is manufactured by
the applicant itself or for the applicant under contract with one or
more different entities.
    As such, the ANDA, NDA, or BLA applicant should establish a process
with any relevant contract manufacturer, active pharmaceutical
ingredient (API) supplier, or other nonapplicant that ensures the
applicant's compliance with this proposed rule. For example, assume
that Applicant X holds an ANDA, NDA, or BLA for a covered drug or
biological product and contracts with a third party to manufacture the
drug or biological product for the purposes of marketing and selling
the drug or biological product in the United States. If the third party
contract manufacturer experiences a manufacturing issue that results in
a permanent discontinuance or an interruption in manufacturing of
Applicant X's product that would be reportable under proposed Sec.
314.81(b)(3)(iii) or Sec.  600.82, Applicant X, not the contract
manufacturer, must notify FDA of this permanent discontinuance or
interruption in manufacturing. Therefore, Applicant X should establish
a process with the contract manufacturer that ensures Applicant X's
ability to timely report to FDA the permanent discontinuance or
interruption in manufacturing.
    Section 506C(i)(3) of the FD&C Act, as amended by FDASIA, directs
FDA to ``take into account any supply reporting programs [for
biological products] and . . . aim to reduce duplicative notification''
in applying section 506C to biological products by regulation.
Accordingly, with respect to blood or blood components, we are
proposing to limit this rule only to applicants that are manufacturers
of a ``significant percentage of the United States blood supply.'' As
described more fully in sections II.B.2.c and II.C.1.b.ii, FDA believes
that this approach with respect to blood or blood components will
ensure that the Agency receives information that is essential to
preventing shortages of these products, without being unnecessarily
duplicative of existing systems or unduly burdensome to industry. For
purposes of this proposed rule, FDA intends to consider an applicant
that holds a BLA for blood or blood components to be a manufacturer of
a ``significant percentage'' of the U.S. blood supply if the applicant
manufactures 10 percent or more of the U.S. blood supply (e.g., greater
than 1.5 million units of whole blood annually or approximately 125,000
units per month).

B. Products Subject to the Proposed Rule

1. Prescription Drug and Biological Products That Are Life Supporting,
Life Sustaining, or Intended for Use in the Prevention or Treatment of
a Debilitating Disease or Condition
    The proposed rule would apply to all prescription drug products
approved under an NDA or ANDA (proposed Sec.  314.81(b)(3)(iii)), all
marketed unapproved prescription drug products (proposed Sec.
310.306), and all prescription biological products approved under a BLA
(proposed Sec.  600.82) that are:
     Life supporting; life sustaining; or intended for use in
the prevention or treatment of a debilitating disease or condition,
including any such product used in emergency medical care or during
surgery; and
     not radiopharmaceutical products.\6\
---------------------------------------------------------------------------

    \6\ With respect to blood and blood components for transfusion,
the reporting requirement applies only to an applicant that
manufactures a significant percentage of the U.S. blood supply.
---------------------------------------------------------------------------

    FDASIA does not define the terms ``life supporting,'' ``life
sustaining,'' or ``intended for use in the prevention or treatment of a
debilitating disease or

condition,'' but instead requires FDA to define them. Proposed
Sec. Sec.  314.81(b)(3)(iii)(f) and 600.82(f) would define a ``life
supporting or life sustaining'' drug product as one that is ``essential
to, or that yields information that is essential to, the restoration or
continuation of a bodily function important to the continuation of
human life.'' This definition of ``life supporting'' or ``life
sustaining'' is consistent with language used to describe this term in
the preamble to the final rule implementing the pre-FDASIA section 506C
(72 FR 58993 at 58994 (October 18, 2007)), and in medical device
regulations (see 21 CFR 821.3(g)).
    Under the proposed rule, ``intended for use in the prevention or
treatment of a debilitating disease or condition'' would refer to ``a
drug product intended for use in the prevention or treatment of a
disease or condition associated with mortality or morbidity that has a
substantial impact on day-to-day functioning'' (proposed Sec. Sec.
314.81(b)(3)(iii)(f) and 600.82(f)). We have equated ``debilitating
disease or condition'' with ``serious disease or condition'' under this
proposed definition and defined it according to the definition of
``serious'' found in 21 CFR 312.300. This definition of ``intended for
use in the prevention or treatment of a debilitating disease or
condition'' is also consistent with our discussion of the term in the
preamble to the proposed rule implementing the pre-FDASIA section 506C
(65 FR 66665 at 66666 (November 7, 2000)).
    When defining these terms, we also took into account comments we
received on the IFR, including: A request for additional clarity on how
these terms relate to FDA's use of the term ``medically necessary''
with respect to drug and biological product shortages; comments
recommending that FDA interpret this terminology to require
notification for ``medicines at risk of being in shortage''; and a
related comment suggesting that once FDA identifies ``medicines at risk
of being in shortage,'' the Agency should establish a mechanism for the
purchase and storage of advance supplies of drugs on the list.
According to this comment, this ``government stockpile'' could prevent
shortages from occurring or mitigate the impact of an unavoidable
shortage.
    In response to the first comment, the proposed definitions of
``life supporting or life sustaining'' and ``intended for use in the
prevention or treatment of a debilitating disease or condition'' are,
in important respects, different than FDA's definition of ``medically
necessary'' as used in the context of the existing Center for Drug
Evaluation and Research (CDER) Manual of Policies and Procedures (MAPP)
on drug shortages (CDER MAPP 6003.1) (Ref. 2 of this proposed rule).
FDA considers a product to be medically necessary under this internal
MAPP if ``there is no other adequately available drug product that is
judged by medical staff to be an appropriate substitute'' (Ref. 2 of
this proposed rule). Under this proposed rule, the applicant would be
required to notify FDA of a permanent discontinuance or an interruption
in manufacturing of a drug or biological product that is life
supporting, life sustaining, or intended for use in the prevention or
treatment of debilitating disease or condition, whether or not the
product is considered medically necessary under the MAPP. Under the
MAPP, FDA uses the definition of medically necessary to prioritize the
Agency's response to specific shortages or potential shortages and to
allocate resources appropriately.
    In response to the second group of comments, the proposed rule does
not define either ``life supporting or life sustaining'' or ``intended
for use in the prevention or treatment of debilitating disease or
condition'' to mean ``medicines at risk of being in shortage,'' because
shortages are often triggered by factors related to manufacturing and
product quality that cannot be anticipated in advance, making it
difficult, if not impossible, to accurately predict drugs or biological
products that are vulnerable to shortage. This suggested interpretation
of these terms would also be inconsistent with the statutory text,
which defines drugs subject to the notification provisions by their
uses, and contains separate language to explain when risks to supply
require a notification.
    Finally, in response to the suggestion to create a national
stockpile of drugs and biological products vulnerable to shortage, FDA
concludes that this is beyond the scope of the current proposal, which
is to implement amended sections 506C and 506E of the FD&C Act.
    We are interested in comments on the definitions of ``life
supporting or life-sustaining'' and ``intended for use in the
prevention or treatment of a debilitating disease or condition.'' FDA
believes these definitions are consistent with the industry's (and
Agency's) current understanding of the terms, and that more information
rather than less is essential for resolving drug shortages. However, we
are specifically interested in comments on whether these definitions
might unintentionally broaden the scope of reporting to such an extent
that the Agency is ``over-notified,'' particularly in the context of
the requirement for applicants to notify FDA of a meaningful disruption
in the manufacturer's supply, without regard to the market as a whole
(see section III.C.1. for further discussion on meaningful disruption
in supply).
2. Biological Products
    Section 506C of the FD&C Act, as amended, states that for purposes
of this section the term ``drug'' does not include biological products
as defined in section 351(i) of the Public Health Service Act, unless
the Secretary of Health and Human Services (the Secretary) applies
section 506C to such products by regulation. Section 506C(i)(3) of the
FD&C Act provides that FDA may, by regulation, apply section 506C to
biological products, ``including plasma products derived from human
plasma protein and their recombinant analogs'' if ``the Secretary
determines that such inclusion would benefit the public health,''
taking into account ``any [existing] supply reporting programs'' and
aiming to reduce ``duplicative notification.'' Additionally, FDA may
apply section 506C of the FD&C Act to vaccines, but the Secretary must
determine whether notification of a vaccine shortage to the Centers for
Disease Control and Prevention (CDC) under its ``vaccine shortage
notification program'' could satisfy a vaccine manufacturer's
obligation to notify FDA of a permanent discontinuance or an
interruption in manufacturing under section 506C.
    We are proposing to apply section 506C of the FD&C Act to all
biological products, including recombinant therapeutic proteins,
monoclonal antibody products, vaccines, allergenic products, plasma-
derived products and their recombinant analogs, blood or blood
components, and cellular and gene therapy products. Like drug
shortages, shortages of biological products can have serious negative
consequences for patients who rely on these products for their
treatment. For example, recent shortages of biological products such as
agalsidase beta (Fabrazyme), peginterferon alfa-2a (Pegasys), and BCG
\7\ Live (Intravesical) (TheraCys) have adversely affected patient
care. Fabrazyme is indicated for the treatment of Fabry's disease, a
life shortening, inherited disease caused by a deficiency of alpha-
galactosidase A, an enzyme needed to metabolize lipids. The Fabrazyme
shortage resulted from contamination at the manufacturing

plant and led to rationing of the product at one-third the recommended
dose for current patients using the drug. As a result of the reduced
doses, some patients reported a progression of Fabry's disease,
including serious adverse events affecting the heart, central nervous
system, and kidneys. Similarly, shortages of the antiviral drug Pegasys
and the bladder cancer biological drug TheraCys threatened the timely
treatment of patients with debilitating diseases, interrupting the
continuity (and potentially undercutting the effectiveness) of
treatment for patients prescribed these medications as well as
preventing new patients from obtaining these medications.
---------------------------------------------------------------------------

    \7\ BCG is an attenuated live culture preparation of the
Bacillus of Calmette and Guerin (BCG) strain of Mycobaterium bovis.
---------------------------------------------------------------------------

    Early notification of a permanent discontinuance or an interruption
in the manufacturing of biological products would allow FDA to address,
prevent, or mitigate a shortage of these products, greatly benefiting
the public health. In addition, for the reasons described in this
document, we have determined that requiring manufacturers of biological
products to notify FDA under this proposed rule would not duplicate the
existing reporting programs of which we are aware.
    a. Plasma-derived products and their recombinant analogs. As stated
previously, we are proposing to apply section 506C of the FD&C Act to
all biological products, including plasma products derived from human
plasma protein and their recombinant analogs (referred to in this
document as plasma-derived products and their recombinant analogs).
With respect to plasma-derived products and their recombinant analogs,
FDA recognizes that the Plasma Protein Therapeutics Association (PPTA)
has developed a voluntary data system that captures the distribution
and supply of five plasma product groups in the United States: Plasma-
Derived Factor VIII, Recombinant Factor VIII, Immune Globulin (Ig),
Albumin 5%, and Albumin 25%. The PPTA, in consultation with a third
party, voluntarily submits a monthly report to FDA of aggregate
distribution data for these five product groups. This information
provides a picture of the total supply and distribution of these five
products in any given month as compared to the last 12 months (see,
e.g., http://www.pptaglobal.org/UserFiles/file/Sept2012PDfviii.pdf).
(FDA has verified the Web sites in this document but is not responsible
for any subsequent changes to the Web sites after this document
publishes in the Federal Register.)
    FDA recognizes and greatly appreciates the efforts by PPTA to
provide plasma product supply information to FDA and the public.
However, in addition to the PPTA system, for several reasons we believe
that it would benefit the public health for the Agency to receive
direct notification under this proposed rule from all manufacturers of
these products. First, the PPTA system does not include all plasma-
derived products and their recombinant analogs. FDA has approved many
plasma-derived products (and their recombinant analogs) that are not
included in the PPTA monthly report, but that would be subject to this
proposed rule, such as Rho(D) Immune Globulin and Hepatitis B Immune
Globulin; Coagulation Factor VIIa (Recombinant); and Coagulation Factor
IX.
    Second, the product distribution data is submitted to PPTA (and
subsequently to FDA) on a voluntary basis; reporting under this
proposed rule would be mandatory. Finally, the PPTA data is aggregate
distribution data derived from historical supply and demand. Unlike the
notifications proposed under this rule, it is not real-time data, nor
does it capture the types of circumstances that would be considered a
``permanent discontinuance'' or an ``interruption in manufacturing''
under this proposed rule. Rather, as described previously, the PPTA
data provides a snapshot of current aggregate supply as compared to
historical supply. It is not intended to identify circumstances that
could lead to a future permanent discontinuance or an interruption in
manufacturing of all plasma-derived products and their recombinant
analogs.
    Because the PPTA program, although helpful, does not serve the same
purpose as notification under this proposed rule, including plasma-
derived products and their recombinant analogs in this rulemaking will
not duplicate the PPTA system. FDA believes that including these
products within the scope of the proposed rule is essential to FDA's
efforts to identify permanent discontinuances and interruptions in
manufacturing of these products, and consequently, essential to our
efforts to address, prevent, or mitigate shortages of these products.
    b. Vaccines. We are proposing to apply section 506C of the FD&C Act
to all biological products, including vaccines. Under section
506C(i)(3)(B) of the FD&C Act, if FDA applies section 506C to vaccines,
the Secretary must specifically consider whether the notification
requirement may be satisfied by submitting a notification to CDC under
CDC's ``vaccine shortage notification program.''
    CDC contracts with vaccine manufacturers as part of the Vaccines
for Children (VFC) program.\8\ FDA recognizes that CDC includes
language in its contracts with vaccine manufacturers requiring the
manufacturer to notify CDC of vaccine supply issues that could affect
the manufacturer's ability to fulfill its contract with CDC.\9\
---------------------------------------------------------------------------

    \8\ The VFC program is a federally funded program that provides
vaccines at no cost to children and adults who might not otherwise
be vaccinated because of inability to pay. VFC was created by the
Omnibus Budget Reconciliation Act of 1993 as a new entitlement
program to be a required part of each state's Medicaid plan. CDC
buys vaccines at a discount from the manufacturers and distributes
them to awardees--i.e., State health departments and certain local
and territorial public health Agencies--who in turn distribute them
at no charge to those private physicians' offices and public health
clinics registered as VFC providers. (See http://www.cdc.gov/vaccines/programs/vfc/index.html.)
    \9\ The Biomedical Advanced Research and Development Authority
(BARDA), which is responsible for the procurement of certain
vaccines related to medical countermeasures, also includes similar
language in its procurement contracts. Contracts for the procurement
of medical countermeasures against chemical, biological, nuclear,
and radiological threat agents (e.g. smallpox and anthrax vaccines)
are administered by BARDA, part of the Office of the Assistant
Secretary for Preparedness and Response in the U.S. Department of
Health and Human Services (HHS). (See http://www.hhs.gov/aspr.)
---------------------------------------------------------------------------

    Only certain vaccines are included under the existing CDC program,
and thus, only manufacturers of certain vaccines are obligated to
provide notification of supply issues to CDC. Based on information from
CDC, FDA estimates that approximately 30 percent of vaccines licensed
in the United States are not subject to CDC notification, including
vaccines for rabies, yellow fever, and typhoid.
    Moreover, even for the vaccines that are subject to CDC
notification, the information collected is not adequate for purposes of
this rule, because the existing CDC program does not require vaccine
manufacturers to provide notice 6 months in advance of a permanent
discontinuance or interruption in manufacturing. Early notice of
permanent discontinuances and interruptions is critically important to
the prevention of drug shortages. Although FDA and its HHS partners
work together closely on vaccine supply issues, and the current
framework for CDC notification is useful for contractual purposes, FDA
believes including vaccines within the scope of this rulemaking is
necessary to fully support FDA's efforts to identify, address, prevent,
or mitigate a vaccine shortage and would not be duplicative of existing
notification systems.
    c. Blood or blood components for transfusion. We are proposing to
apply section 506C of the FD&C Act to blood

or blood components, but in a more limited manner than for other
biological products. The proposed rule would require blood or blood
component applicants (i.e., blood collection establishments subject to
licensure) that manufacture a significant percentage of the U.S. blood
supply to notify FDA of a permanent discontinuance or an interruption
in manufacturing that is likely to lead to a ``significant disruption''
in the applicant's supply of blood or blood components. As described
more fully in sections II.A and II.C.1.b.ii, the proposed rule is
intended to require reporting of large-scale, permanent
discontinuances, or interruptions in manufacturing of blood or blood
components.
    The proposed rule would ensure that FDA receives information
essential to the Agency in preventing, mitigating, or addressing
shortages of blood or blood components, while avoiding duplication with
existing programs that monitor local and regional supplies of blood or
blood components by ABO blood group. We are aware of two significant
efforts to monitor local and regional supplies of blood or blood
components.
    i. America's Blood Centers and the Blood Availability and Safety
Information System. America's Blood Centers (ABC) is a network of
nonprofit community blood centers in North America. ABC members operate
more than 600 blood collection sites in 45 states and provide blood or
blood components to more than 3,500 hospitals and health care
facilities. ABC also maintains a voluntary supply monitoring program
for blood and blood components. Information on local and regional blood
supply is provided weekly to ABC members nationwide through a
newsletter, and online (see http://www.americasblood.org/stoplight.aspx). In addition, ABC and certain other large licensed
blood establishments provide voluntary, daily blood supply reports to
HHS, which maintains a system called the Blood Availability and Safety
Information System (BASIS) (see https://www.usbloodreport.net/About.aspx). Certain sentinel hospitals also voluntarily provide
inventory reports to the BASIS system, and these data are compiled into
a weekly status report on blood supplies, stratified by ABO blood
group. Upon request, FDA receives BASIS reports from HHS.
    The ABC and BASIS systems monitor the supply and demand of blood or
blood components on a daily and weekly basis, and in the event of a
national disaster. In other words, ABC and BASIS are tools for local
blood centers and hospitals to track their day-to-day inventory of
blood or blood components. Unlike the notifications required under this
proposed rule, ABC and BASIS are not designed to predict large-scale or
nationwide disruptions in the supply of blood or blood components.
Moreover, ABC and BASIS are voluntary systems; the proposed rule would
require mandatory reporting.
    ii. Task Force. Also critical to the management of the national
blood supply is the coordinating function of the Interorganizational
Task Force on Domestic Disasters and Acts of Terrorism (Task Force),
which is managed by the AABB (formerly the American Association of
Blood Banks). The Task Force was formed in January 2002 to help make
certain that blood collection efforts resulting from domestic disasters
and acts of terrorism are managed properly, and to deliver clear and
consistent messages to the public regarding the status of the U.S.
blood supply. The Task Force is comprised of representatives from blood
establishments, trade associations, commercial entities, and liaisons
from governmental Agencies (including FDA), who work together to ensure
that adequate blood inventories are in place at all times. In addition,
the Task Force operates a system for assessing the need for collections
and transportation of blood components, should a disaster or act of
terrorism occur.
    Again, the Task Force efforts, although critical to public health,
are focused on inventory management and are not intended to predict
large-scale disruptions in the supply of blood or blood components. The
Task Force coordinates the movement of blood throughout the United
States and appeals to the public for blood donations, but it is not
sufficient for FDA in the context of predicting a permanent
discontinuance or an interruption in manufacturing of these products
that would have a large-scale impact.
    In short, although the information already available to FDA from
the ABC, BASIS, and Task Force programs is useful, the existing
frameworks are voluntary, do not result in a direct notification from
an applicant to FDA, and, as explained previously, only capture short-
term, day-to-day supply and distribution information. In addition, in
contrast to this proposed rule, the existing systems are not equipped
to predict large-scale, significant disruptions of blood or blood
components. Accordingly, FDA has determined that including blood or
blood components within the scope of this rule would benefit the public
health, providing information that is essential to FDA's efforts to
address shortages of these products.
    However, recognizing that the existing ABC, BASIS, and Task Force
programs do provide certain information concerning the supply of blood
or blood components, we have limited the proposed reporting
requirements to apply only to applicants of blood or blood components
that manufacture a significant percentage of the U.S. blood supply, and
only to a permanent discontinuance of manufacture or an interruption in
manufacturing that is likely to lead to a ``significant disruption'' in
supply of that blood or blood component, as further described in
sections II.A and II.C.1.
    d. Distribution reports (for all biological products). Under Sec.
600.81 (21 CFR 600.81), applicants are required to submit to the Center
for Biologics Evaluation and Research (CBER) or CDER, information about
the quantity of product distributed under the biologics license,
including the quantity distributed to distributors. As part of this
safety reporting requirement, manufacturers provide distribution data
to FDA every 6 months or at other intervals as may be required by FDA.
Although distribution reports submitted by applicants are helpful in
the analysis of safety reporting data, particularly for newly approved
products, these reports do not include information about a permanent
discontinuance or an interruption of the manufacture of a biological
product that is likely to lead to a meaningful disruption in the supply
of that product. Furthermore, the production cycles of biological
products vary widely (e.g., some are manufactured once a year, some are
manufactured every other year, and some are manufactured more or less
frequently), such that any distribution data received from the
manufacturer at 6-month intervals for such products will not be
current. Therefore, FDA has determined that the reporting requirements
under Sec.  600.81 do not constitute a duplicate supply reporting
program.
    In summary, we are proposing to apply section 506C of the FD&C Act
to all biological products. For the reasons discussed in this document,
FDA finds that this inclusion would benefit the public health by
facilitating prompt FDA action to address, prevent, or mitigate drug
shortages, without duplicating existing reporting programs or creating
redundant reporting. With respect to vaccines, for the reasons already
described, we have determined that notification to CDC is not
sufficient for purposes of reporting to FDA under

section 506C of the FD&C Act and may not replace section 506C
notifications.
3. Scope of the Term ``Product''
    For purposes of this proposed rule, ``product'' refers to a
specific strength, dosage form, or route of administration of a drug or
biological product. For example, if Applicant X experiences an
interruption in manufacturing of the 50-milligram (mg) strength of a
drug product that would be subject to proposed Sec.  314.81(b)(3)(iii),
but the 100 mg strength continues to be manufactured without delay,
under the proposed rule, Applicant X must notify FDA of the
interruption in manufacturing of the 50 mg strength if the interruption
is likely to lead to a meaningful disruption in the applicant's supply
of the 50 mg strength. Recent experience has shown that the permanent
discontinuance or interruption in manufacturing of a specific strength,
dosage form, or route of administration of a drug or biological product
can have a significant impact on the targeted needs of particular
patients (e.g., although the 100 mg tablet from Applicant X is
available, it may not be split in half easily for a patient that is
prescribed the 50 mg strength).
    Moreover, shortages of a specific strength, dosage form, or route
of administration may lead to a shortage of another strength, dosage
form, or route of administration of the product, exacerbating patient
difficulties in acquiring the product. Obtaining this information is
consistent with the emphasis in the IFR on the importance of notifying
FDA of permanent or temporary interruptions in supply of a specific
strength, dosage form, or route of administration of covered products
(76 FR 78530 at 78533), and with the general support for this approach
we received in comments on the IFR.

C. Notification of a Permanent Discontinuance or an Interruption in
Manufacturing

1. Notification
    a. Permanent discontinuance. Section 506C of the FD&C Act requires
manufacturers to notify FDA of a permanent discontinuance of
manufacture of a covered drug. Proposed Sec. Sec.  314.81(b)(3)(iii)
and 600.82 would require the applicant to report all permanent
discontinuances of covered drugs and biological products to FDA. For
purposes of this rule, we are interpreting a permanent discontinuance
to be a decision by the applicant for business or other reasons to
cease manufacturing and distributing the product indefinitely.
    b. Interruption in manufacturing. In addition to permanent
discontinuances, section 506C of the FD&C Act requires manufacturers to
notify FDA of an interruption in manufacturing of a covered drug that
is likely to lead to a meaningful disruption in supply of that drug in
the United States. The statute defines ``meaningful disruption'' to
mean ``a change in production that is reasonably likely to lead to a
reduction in the supply of a drug by a manufacturer that is more than
negligible and affects the ability of the manufacturer to fill orders
or meet expected demand for its product; and does not include
interruptions in manufacturing due to matters such as routine
maintenance or insignificant changes in manufacturing so long as the
manufacturer expects to resume operations in a short period of time''
(emphasis added).
    i. Drugs and biological products other than blood or blood
components. Proposed Sec. Sec.  314.81(b)(3)(iii)(a) and 600.82(a)(1)
would require the applicant for a product other than blood or blood
components to report to FDA an interruption in manufacturing of the
drug or biological product that is likely to lead to a meaningful
disruption in supply of that drug or biological product in the United
States. Proposed Sec. Sec.  314.81(b)(3)(iii)(f) and 600.82(f) would
adopt the statutory definition of meaningful disruption in supply.
    Consistent with the statutory definition of meaningful disruption,
the proposed rule would require an applicant to report an interruption
in manufacturing likely to lead to a meaningful disruption in its own
supply of a covered drug or biological product. In other words, when
evaluating whether an interruption in manufacturing is reportable to
FDA under this proposed rule, rather than considering the potential
impact of the interruption on the market as a whole, the relevant
question (regardless of how large or small the applicant's market share
may be) is whether the interruption is likely to lead to a reduction in
the applicant's supply of a covered drug or biological product that is
more than negligible, and affects the ability of the applicant to fill
its own orders or meet the expected demand of its clients for the
covered product. Consistent with the statute, the proposed rule would
not require an applicant to predict the market-wide impact of its own
interruption in manufacturing, which can be difficult to accurately
assess and could lead to inconsistent interpretation of the regulation,
less accurate predictions, and under- or reporting, as suggested by
multiple comments on the IFR.
    Under the proposed rule, reportable discontinuances or
interruptions in manufacturing of a covered drug or biological product
would include:
     A business decision to permanently discontinue manufacture
of a covered drug or biological product.
     A delay in acquiring APIs or inactive ingredients that is
likely to lead to a meaningful disruption in the applicant's supply of
a covered drug or biological product while alternative API suppliers
are located.
     Equipment failure or contamination affecting the quality
of a covered drug or biological product that necessitates an
interruption in manufacturing while the equipment is repaired or the
contamination issue is addressed and that is likely to lead to a
meaningful disruption in the applicant's supply of the product.
     Manufacturing shutdowns for maintenance or other routine
matters, if the shutdown extends for longer than anticipated or
otherwise is likely to lead to a meaningful disruption in the
applicant's supply of a covered drug or biological product.
     A merger of firms or transfer of an application for a
covered drug or biological product to a new firm, if the merger or
transfer is likely to lead to a meaningful disruption in the
applicant's supply of the product.
     An interruption in manufacturing (e.g., contamination of a
manufacturing line) that in the applicant's view may not meaningfully
disrupt the market-wide supply of the covered drug or biological
product (for example, because the applicant holds only a small share of
the market for the product), but that the applicant determines is
likely to lead to a meaningful disruption in its own supply of the
covered product.
    Conversely, an applicant would not be required under the proposed
rule to notify FDA if an interruption in manufacturing is not likely to
lead to a meaningful disruption in the applicant's supply of the drug
or biological product. For example, FDA would not need to be notified
in the following circumstances:
     A scheduled shutdown of an applicant's manufacturing
facility for routine maintenance, if the shutdown is anticipated and
planned for in advance; and therefore, is not expected to lead to a
meaningful disruption in the applicant's supply of a covered drug or
biological product.
     An unexpected power outage that results in an unscheduled
interruption in manufacturing of a covered drug or biological product,
if the applicant expects to resume normal operations

within a relatively short timeframe and does not expect to experience a
meaningful disruption in its supply of the covered drug or biological
product.
    In either of these circumstances, if the interruption in
manufacturing subsequently appears likely to lead to a meaningful
disruption in the applicant's supply of the covered drug or biological
product, then it would become a reportable interruption in
manufacturing under this proposed rule and the applicant would be
required to notify FDA.
    The list of examples described in this document is intended to
assist industry in understanding what would (or would not) be required
to be reported under amended section 506C of the FD&C Act, but it is
not exhaustive. The proposed rule would require any permanent
discontinuance or any interruption in manufacturing that is likely to
lead to a meaningful disruption in the applicant's supply of a covered
drug or biological product to be reported to FDA, even if not
specifically described in this preamble.
    ii. Blood or blood components for transfusion. Proposed Sec.
600.82(a)(2) would require an applicant that manufactures a significant
percentage of the U.S. blood supply to report to FDA an interruption in
manufacturing of a blood or blood component that is likely to lead to a
``significant disruption'' in supply of that product in the United
States. As we discussed in section II.A, an applicant that manufactures
10 percent or more of the U.S. blood supply (e.g., greater than 1.5
million units of whole blood annually or approximately 125,000 units
per month), would be considered to manufacture a significant percentage
of the U.S. blood supply for purposes of this proposed rule. Proposed
Sec.  600.82(f) defines ``significant disruption'' to mean ``a change
in production that is reasonably likely to lead to a reduction in the
supply of blood or blood components by a manufacturer that
substantially affects the ability of the manufacturer to fill orders or
meet expected demand for its product; and does not include
interruptions in manufacturing due to matters such as routine
maintenance or insignificant changes in manufacturing so long as the
manufacturer expects to resume operations in a short period of time.''
This definition of significant disruption closely follows, but is not
identical to, the statutory and regulatory definition of meaningful
disruption.
    For purposes of the proposed rule, FDA intends to consider an
interruption in manufacturing that leads to a reduction of 20 percent
or more of an applicant's own supply of blood or blood components over
a one-month period to ``substantially affect'' the ability of the
applicant to fill orders or meet expected demand; accordingly, such an
interruption would be considered a ``significant disruption'' in
supply. Again, when determining when an interruption in manufacturing
is likely to lead to a significant disruption in supply, the blood or
blood component applicant should not consider the market as a whole,
but rather, should consider only its own supply of product.
    The proposed definition of ``significant disruption'' (interpreted
to mean affecting 20 percent or more of an individual applicant's
supply over a one-month period) as applied to blood or blood
components, in combination with the limitation of the proposed rule
only to applicants of blood or blood components that manufacture a
significant percentage (10 percent or more) of the nation's blood
supply, is intended to avoid duplication with existing programs to
monitor the daily and weekly distribution of blood or blood components
described in section II.B.2.c. As described in that section, in
general, existing programs maintained by ABC, BASIS, and the Task Force
monitor and resolve temporary, local shortfalls of a particular ABO
blood group or a particular blood component. Accordingly, the
definition of ``significant disruption'' is intended to capture events
that are likely to precipitate large-scale disruptions in an
applicant's blood supply, and that are unlikely to be identified and
corrected by the existing ABC, BASIS, and Task Force programs. The
additional limitation of the proposed rule to applicants that
manufacture a significant percentage of the nation's blood supply
further ensures that reporting to FDA will not unnecessarily duplicate
reporting to the ABC, BASIS, and Task Force systems, but still allows
FDA to receive information that is essential to the Agency in
preventing large-scale shortages of these products.
    Under the proposed rule, circumstances that would trigger
notification to FDA of a permanent discontinuance or an interruption in
manufacturing of blood or blood components would include the following
examples. We recognize that, with the exception of the first example of
a permanent discontinuance, the following interruptions are unlikely to
be reasonably anticipated 6 months in advance. In that case they would
be reportable as soon as practicable, but in no case later than 5
business days after the interruption in manufacturing occurs:
     A business decision by an applicant that manufactures 10
percent or more of the nation's blood supply to permanently discontinue
manufacture of blood or blood components;
     A computer system failure that causes an applicant of a
blood establishment that collects 10 percent or more of the nation's
blood supply to be unable to label blood for 2 weeks, resulting in a 20
percent monthly shortfall of blood for that applicant;
     An issue with blood collection bags, such that they are
unavailable, causing an applicant that manufactures 10 percent or more
of the nation's blood supply to experience a 20 percent monthly
shortfall in normal production for that applicant;
     An issue with apheresis collection devices that causes an
applicant of a blood establishment that collects 10 percent or more of
the nation's blood supply to be unable to collect platelets by
apheresis, resulting in a 20 percent monthly shortfall in platelet
supply for that applicant;
     An explosion or fire that damages a large testing
laboratory that performs blood testing for an applicant that
manufactures 10 percent or more of the nation's blood supply, resulting
in a 20 percent monthly shortfall of blood or blood components for that
applicant.
    Conversely, a covered blood or blood component applicant would not
be required under the proposed rule to notify FDA if an interruption in
manufacturing is not likely to lead to a significant disruption in the
applicant's supply of blood or blood components. For example, FDA would
not need to be notified if a covered blood or blood component applicant
experiences a temporary drop in blood donations at one of its local
blood donation centers, such that it is unable to fully supply its
hospital customers with blood for several days, provided the donation
center quickly returns to its normal donation and supply levels and the
dip in blood donations is not likely to lead to a 20 percent decrease
in the applicant's overall supply of blood over a one-month period. We
expect that this type of situation would be identified and resolved
through the ABC, BASIS, and Task Force systems (e.g., these systems
would identify the issue and locate temporary, alternative blood
supplies for the applicant's customers). If such an event does lead to
a significant disruption in a covered applicant's supply of blood or
blood components, it would need to be reported to FDA under the
proposed rule.

    Again, the list of examples described in this document is intended
to assist industry in understanding what must be reported under amended
section 506C of the FD&C Act, but the list is not exhaustive. The
proposed rule would require any permanent discontinuance or any
interruption in manufacturing that is likely to lead to a significant
disruption (as defined by the proposed rule) in a covered applicant's
supply of blood or blood components to be reported to FDA, even if not
specifically discussed in this preamble.
    c. Consideration of comments to the IFR. Several comments on the
IFR suggested alternative ways of defining circumstances that must be
reported to FDA under pre-FDASIA section 506C of the FD&C Act. We have
considered whether these may be relevant to amended section 506C of the
FD&C Act. For example, one comment suggested that historical supply and
demand should be considered when determining whether to notify FDA
under section 506C of the FD&C Act. Specifically, the comment suggested
that notification should only be required if an interruption in
manufacturing is expected to affect the supply of the product based on
``historical inventory levels and other factors.'' Another comment
suggested that an applicant should be required to report to FDA only
after the disruption in supply occurs, for example when it is ``unable
to ship 90 percent or more of its full quantity of [covered] product as
reasonably ordered by its customers for more than 4 weeks.'' In other
words, the applicant should report to FDA if it experiences a 10
percent reduction in supply for a 4-week period. A third comment
suggested that notification should be required when an event causes an
applicant to predict that patients will be unable to obtain a covered
product for a certain, extended period of time (e.g., at the point when
an applicant projects that it will be unable to ship the drug or
biological product to customers for 8 weeks).
    Although we agree that it could be appropriate to consider
historical supply and demand or shipping schedules in deciding whether
a notification would be required under this proposed rule, we decline
to limit the term ``interruption in manufacturing that is likely to
lead to a meaningful disruption in supply'' to consideration only of
such factors, and we decline to define the requirement by codifying a
preset, numerical threshold. The purpose of FDASIA, and this proposed
rule, is to improve FDA's ability to prevent or mitigate the impact of
drug and biological product shortages by broadening the scope of
information that the Agency receives regarding permanent
discontinuances and interruptions in manufacturing. If reportable
circumstances are limited to situations in which a manufacturer is
unable to ship a certain percentage of historic demand for a certain
period time, or unable to ship at all for a certain period of time,
some circumstances that could lead to a shortage may not be reported to
FDA, putting the Agency at a disadvantage in addressing those
situations.
    For example, if notification under this proposed rule is triggered
only by the inability of an applicant to ship at least 90 percent of
its full quantity of a particular drug product as reasonably ordered by
its customers for more than 4 weeks (10 percent reduction in supply),
if an applicant were able to ship 92 percent of its supply (i.e., it
experiences an 8 percent reduction in supply), the interruption would
not be reportable to FDA. Yet this interruption in manufacturing may
still have an impact on a patient's ability to obtain the product and
could still lead to a product shortage that is ``more than
negligible.''
    Instead, this proposed rule defines ``meaningful disruption in
supply'' consistent with the statutory text, and this preamble provides
examples of reportable interruptions in manufacturing as illustrations
for industry. An applicant may, at its discretion, analyze historical
supply and demand and estimate shipping schedules to help determine
whether an interruption in manufacturing is likely to lead to a
meaningful disruption in supply, but the applicant should not
substitute a rigid calculation for a full consideration of all
circumstances applicable to determining whether the change in
production is reasonably likely to lead to a reduction in supply that
is more than negligible and that affects the manufacturer's ability to
fill orders or meet expected demand for its product.
2. Timing and Submission of Notification
    a. Timing of notification. Section 506C of the FD&C Act requires
notification to FDA ``(1) at least 6 months prior to the date of the
permanent discontinuance or interruption [in manufacturing]; or (2) if
compliance with paragraph (1) is not possible, as soon as
practicable.'' Consistent with the statute, proposed Sec. Sec.
314.81(b)(3)(iii)(b) and 600.82(b) would require an applicant to notify
FDA of a permanent discontinuance or an interruption in manufacturing
at least 6 months in advance of the date of the permanent
discontinuance or interruption in manufacturing; or, if 6 months'
advance notice is not possible, as soon as practicable thereafter, but
in no case later than 5 business days after the permanent
discontinuance or interruption in manufacturing occurs.
    The Agency's most powerful tool for addressing drug and biological
product shortages is early notification, which provides lead time for
FDA to work with manufacturers and other stakeholders to prevent a
shortage or to mitigate the impact of an unavoidable shortage. As such,
we expect that applicants would provide 6 months' advance notice
whenever possible. In particular, FDA believes that an applicant will
generally know of a permanent discontinuance at least 6 months in
advance, and in that case the applicant would be required to provide
notification of a permanent discontinuance to FDA at least 6 months in
advance. We understand that an applicant may not reasonably be able to
anticipate certain interruptions in manufacturing that are likely to
lead to a meaningful disruption in supply 6 months in advance. For
example, if an applicant discovers fungal contamination that requires
an immediate, temporary shutdown of its manufacturing plant for a
covered product, the applicant will not be able to provide FDA with 6
months' advance notice of the interruption in manufacturing. Instead,
the proposed rule would require the applicant to notify FDA ``as soon
as practicable,'' but in no case more than 5 business days after the
interruption in manufacturing occurs. In this example, the applicant
would need to notify FDA as soon as it reasonably anticipates that an
interruption in manufacturing caused by fungal contamination is likely
to result in a meaningful disruption in supply of the applicant's
product. The applicant should not wait until it or its manufacturer
begins rejecting or delaying fulfillment of orders for the product from
available inventory (i.e., the applicant should not wait until the
interruption in manufacturing actually begins to disrupt supply and
affect patient access to the product).
    In our experience, even if it is not possible for an applicant to
notify the Agency before a permanent discontinuance or an interruption
in manufacturing occurs, it should generally be possible for the
applicant to provide notice within a day or two, and it should always
be possible for the applicant to notify the Agency no later than 5 days
after the permanent discontinuance or interruption occurs, even in the
event of a natural disaster

or some other catastrophic incident. Accordingly, the 5-day provision
in our proposal represents a date certain after which FDA would be able
to take action under section 506C(f) of the FD&C Act against an
applicant for failure to comply with the notification requirements (see
section II.C.5 of this document for further discussion of the
consequences of failure to notify FDA). Additionally, an applicant that
could have notified the Agency before five days had passed, but waited
until the end of the 5-day period would be in violation of the proposed
regulation. Consistent with the statutory intent, whenever possible,
applicants would be required to provide us with advance notice, whether
6 months' advance notice, or ``as soon as practicable'' thereafter
(e.g., 3 months' advance notice).
    b. Submission of notification. Proposed Sec. Sec.
314.81(b)(3)(iii)(b) and 600.82(b) would require an applicant to notify
FDA of a permanent discontinuance or an interruption in manufacturing
electronically in a format FDA can process, review, and archive.
Applicants must email notifications to<EMAIL_ADDRESS>(for
products regulated by CDER) or<EMAIL_ADDRESS>(for products
regulated by CBER). In the future, the Agency may consider creating an
electronic notification portal linked to the Agency's internal drug
shortages database to facilitate submission of these notifications.
Unless and until this portal is created, however, email notifications
will be used.
    c. Reduction in notification period for ``good cause''. Under the
pre-FDASIA section 506C(b), a manufacturer could seek, and FDA could
grant, a reduction in the required 6-month advance notification period
for ``good cause.'' The statute listed several reasons that would
constitute ``good cause,'' including when continuing to manufacture the
product for the full 6-month notification period could cause a public
health problem or result in substantial economic or legal hardship for
the manufacturer. The regulation at Sec.  314.91 implemented the pre-
FDASIA section 506C(b). Because section 506C of the FD&C Act as amended
by FDASIA does not include an option for formally seeking a reduction
in the 6-month advance notification period based on ``good cause,''
this rule proposes to eliminate Sec.  314.91 in its entirety.
3. Contents of the Notification
    Proposed Sec. Sec.  314.81(b)(3)(iii)(c) and 600.82(c) would
require an applicant to include the following items in notifications
submitted under section 506C(a) of the FD&C Act:
     The name of the drug or biological product subject to the
notification, including the NDC for the drug or biological product (or,
for a biological product that does not have an NDC, an alternative
standard for identification and labeling that has been recognized as
acceptable by the Center Director);
     The name of the applicant of the drug or biological
product;
     Whether the notification relates to a permanent
discontinuance of the drug or biological product or an interruption in
manufacturing of the drug or biological product;
     A description of the reason for the permanent
discontinuance or interruption in manufacturing; and
     The estimated duration of the interruption in
manufacturing.
    FDA is proposing to require applicants to include the minimum
information listed in this document in the initial notification to
assist the Agency in complying with section 506E of the FD&C Act, which
requires FDA to maintain a publicly available list of drugs in
shortage, as described in section II.C.4 of this document. We recognize
that the duration of an interruption in manufacturing can be difficult
to accurately predict. The applicant should provide FDA with its best
estimate of the expected duration of the interruption in manufacturing.
If, after the initial notification is submitted, the estimated duration
changes, the applicant should notify FDA of the new expected duration
of the interruption in manufacturing so that FDA can respond
appropriately. In addition, the applicant should include a detailed,
factual description of the reason for the shortage in the notification
to assist FDA in responding to the notification.
    In addition to the proposed required elements of the notification,
applicants are encouraged to include any other information in the
notification that may be helpful to the Agency in working with the
applicant to resolve the permanent discontinuance or interruption in
manufacturing. Such information could include the applicant's market
share, inventory on hand or in distribution channels, allocation
procedures and/or plans for releasing available product, copies of
communications to patients and providers regarding the shortage (e.g.,
Dear Healthcare Professional letters), or initial proposals to prevent
or mitigate the shortage. As appropriate, the Agency will also follow
up with the applicant after the notification is submitted to obtain
additional information and to work with the applicant to facilitate
resolution of any shortage or potential shortage.
4. Public Lists of Products in Shortage
    Section 506E of the FD&C Act requires FDA to maintain a publicly
available list of drugs (and biological products, if FDA applies
section 506C to biological products by regulation) that are determined
by FDA to be in shortage, including providing the names and NDCs of the
drugs, the name of each manufacturer of the drug, the reason(s) for the
shortage, and the estimated duration of the shortage. Section
506C(h)(2) of the FD&C Act defines ``drug shortage'' to mean ``a period
of time when the demand or projected demand for the drug within the
United States exceeds the supply of the drug.'' For purposes of section
506E of the FD&C Act, under the proposed rule, the ANDA, NDA, or BLA
applicant would be considered the manufacturer of an approved drug or
biological product, even if the ANDA, NDA, or BLA applicant contracts
that function out to another entity.
    Section 506E of the FD&C Act further requires FDA to include on the
drug shortages list the reason for the shortage, choosing from the
following statutory list of categories:
     Requirements relating to complying with current good
manufacturing practices (CGMPs);
     Regulatory delay;
     Shortage of an active ingredient;
     Shortage of an inactive ingredient component;
     Discontinuation of the manufacture of the drug;
     Delay in shipping of the drug; and
     Demand increase in the drug.
    Consistent with the statute, and with FDA's current practice, under
proposed Sec. Sec.  310.306(b), 314.81(b)(3)(iii)(d), and 600.82(d),
FDA would maintain publicly available lists of drugs and biological
products that are determined by FDA to be in shortage, whether or not
FDA has received a notification under this proposed rule concerning the
product in shortage. Proposed Sec. Sec.  314.81(b)(3)(iii)(f) and
600.82(f) adopt the statutory definition of drug shortage (substituting
``biological product shortage'' for ``drug shortage'' in Sec.
600.82(f)). Under the proposed rule, the shortages lists would include
the following required statutory elements for drugs or biological
products in shortage: Names and NDCs (or the alternative standard for
certain biological products) of the drugs or biological products, names
of each applicant, reason for each shortage, and estimated duration of
each shortage.

    If FDA has received a notification under the proposed rule for the
drug or biological product, FDA would consider the reason for the
shortage supplied by the applicant in its notification, and, where
applicable, other relevant information before the Agency, in
determining how to categorize the reason for the shortage under the
proposed rule. Consistent with the statute, the Agency, not the
applicant, would be responsible for determining which categorical
reason best fits a particular situation. FDA would generally choose the
categorical reason that best fits the applicant's supplied description.
To facilitate FDA's determination of the categorical reason for the
shortage, under the proposed rule we would expect applicants to supply
as many details and facts as possible concerning the reason for the
permanent discontinuance or interruption in manufacturing when
submitting a 506C notification. This information would also assist FDA
in responding quickly to the notification. FDA works proactively with
applicants and others experiencing issues that could lead to a product
shortage. We are committed to working with industry to address any
underlying quality or manufacturing issues, and we seek to avoid
shutdowns and long-term interruptions in supply whenever possible to
ensure continued patient access to vital safe and effective drugs and
biological products.
    If FDA has not received a notification under the proposed rule, but
becomes aware of a shortage through other means, FDA would consider
information before the Agency when determining and choosing the reason
for the shortage to be included on the public list.
    In addition to the list of statutory reasons for the shortage that
FDA may choose from, we are also proposing to add an eighth category,
entitled ``Other reason.'' We are proposing to add this category
because the Agency believes that some quality or manufacturing problems
that result in a shortage may not fit into any of the listed categories
in the statute (e.g., not all quality concerns are the result of
noncompliance with CGMPs). The Agency would only choose ``Other
reason'' if none of the other listed reasons is applicable. For
example, an interruption in manufacturing as a result of a natural
disaster or other catastrophic loss would fall into the ``Other
reason'' category. Moreover, as described in this document, although
FDA may choose the ``Other reason'' category, the public shortages list
would also include a brief summary of the reason for the shortage
submitted by the applicant, thus providing additional information to
the public on the cause of the shortage.
    As noted previously, the proposed rule would codify, consistent
with FDASIA, FDA's current practice of maintaining public lists of
drugs and biological products in shortage, available on FDA's Web site
at http://www.fda.gov/drugs/drugsafety/drugshortages/default.htm (drug
shortages) and http://www.fda.gov/BiologicsBloodVaccines/SafetyAvailability/Shortages/default.htm (biological product
shortages).
    FDA's current drug shortages list was reorganized after the
enactment of FDASIA to begin implementing revised section 506E of the
FD&C Act. The drug shortages list now includes six categories of
information about each drug product on the list: Company (manufacturer
of product and contact information); Product (name, strength,
formulation, dosage, and NDC); Availability and Estimated Shortage
Duration; Related Information (includes applicant's submitted
description of reason for shortage); Shortage Reason (FDA-determined
reason for the shortage, chosen from the list in proposed Sec. Sec.
314.81(b)(3)(iii)(d)); and Date Updated (last date FDA updated the
information for that particular product). The biological product
shortage list includes similar information in fields for Product Name,
Reason for Shortage, and Status.
    In reformatting and revising the drug shortages list and drafting
this proposed rule, we considered several comments on the IFR and other
suggestions from stakeholders to improve the Agency's public
communication about shortages. We agree that communication between FDA
and interested stakeholders, including industry, providers (such as
physicians, pharmacists, and nurses), and patients, is an essential
component of preventing and mitigating both drug and biological product
shortages. FDA updates the drug and biological product shortages lists
regularly, and strives to communicate in ``real-time'' so that patients
and providers have the most current data available for planning
purposes.
    Moreover, consistent with section 506D(d) of the FD&C Act, FDA is
encouraging patients, providers, pharmacists, and other nonapplicants
to communicate with the Agency about potential shortages or disruptions
in supply via one of the following email addresses:
<EMAIL_ADDRESS>or<EMAIL_ADDRESS>FDA is already
in frequent contact with third parties to collect and disseminate
shortage-related information, and we hope the availability of these
dedicated email addresses will further facilitate communication. We are
continuing to work diligently to improve our drug and biological
product shortages Web sites and to consider new methods for
communicating with all stakeholders about shortages. We appreciate
suggestions on how to do this more effectively.
5. Confidentiality and Disclosure
    In general, as required by section 506C(c) and 506E of the FD&C
Act, and as described in this document, FDA will publicly disclose, to
the maximum extent possible, information on drug shortages, including
information provided by applicants in a notification of a permanent
discontinuance or an interruption in manufacturing.
    Proposed Sec. Sec.  314.81(b)(3)(iii)(d) and 600.82(d) contain an
exception to these provisions, stating that FDA may choose not to make
information collected under the authority of this proposed rule
available to the public on the drug or biological product shortages
lists or under its general obligation to disseminate drug shortage
information under section 506C(c) of the FD&C Act if the Agency
determines that disclosure of such information would adversely affect
the public health (such as by increasing the possibility of hoarding or
other disruption of the availability of the drug or biological product
to patients). These proposed provisions closely track the statutory
language in sections 506C(c)(3) and 506E(c)(3) of the FD&C Act.
    In addition, proposed Sec. Sec.  310.306(c), 314.81(b)(3)(iii)(d),
and 600.82(d) state that FDA will not provide on the public drug or
biological product shortages lists or under section 506C(c) of the FD&C
Act, information that is protected by 18 U.S.C. 1905 or 5 U.S.C.
552(b)(4), including trade secrets and commercial or financial
information that is considered confidential or privileged under 21 CFR
20.61. These proposed provisions would ensure appropriate protection
for commercial and trade secret information protected by other Federal
law and are consistent with the statutory language in sections 506C(d)
and 506E(c)(2) of the FD&C Act, which clarify that the information
provisions in sections 506C and 506E do not alter or amend 18 U.S.C.
1905 or 5 U.S.C. 552(b)(4). Additionally, by reference to section 506E
of the FD&C Act, the Agency's obligation to disseminate to the public,
to the maximum extent possible, drug shortage information under section
506C(c) does not alter or

amend the protections afforded by 18 U.S.C. 1905 or 5 U.S.C. 552(b)(4).
FDA is also proposing a technical amendment to Sec.  20.100 to include
a cross-reference to Sec. Sec.  310.306, 314.81, and 600.82. Proposed
Sec.  20.100 describes, by cross-reference to other regulations, the
rules on public availability of certain specific categories of
information.
    One comment on the IFR expressed concern that FDA had not discussed
how the Agency would preserve the confidentiality of proprietary
information reported to FDA in the context of (pre-FDASIA) section 506C
notifications. The comment was specifically concerned that as FDA
attempts to mitigate a potential drug shortage by contacting
manufacturers to increase production, it might reveal confidential
information, even if the interruption in manufacturing by the original
manufacturer is only temporary. Proposed Sec. Sec.
314.81(b)(3)(iii)(d) and 600.82(d) are intended to make clear that FDA
will adhere to applicable laws to protect trade secrets and
confidential commercial information as it works to mitigate or prevent
a shortage.
6. Failure To Notify
    Proposed Sec. Sec.  310.306(b), 314.81(b)(iii)(3)(e), and 600.82(e)
would require FDA to issue a noncompliance letter to an applicant (or,
for a covered, unapproved drug, to a manufacturer) who fails to submit
a section 506C notification as required under proposed Sec. Sec.
314.81(b)(iii)(3)(a) and 600.82(a) within the timeframe stated in
proposed Sec. Sec.  314.81(b)(iii)(3)(b) and 600.82(b). Consistent with
the statute, as proposed in this rule, failure to notify FDA would
include failure to timely notify FDA. For example, if FDA discovers
that an applicant did not notify FDA of the permanent discontinuance of
a covered drug or biological product 6 months in advance, even though
the applicant anticipated the permanent discontinuance 6 months in
advance, FDA would issue a noncompliance letter under this proposed
rule. Similarly, if FDA determines that an applicant experienced a
reportable interruption in manufacturing that it could not reasonably
anticipate 6 months in advance, but the applicant failed to notify FDA
``as soon as practicable,'' the proposed rule would require FDA to
issue a noncompliance letter. Refer to section II.C.2.a of this
document for a discussion of the required timing for section 506C
notifications.
    As required by statute, the proposed rule would provide the
applicant with 30 days from the date of issuance of the noncompliance
letter to respond to the letter. The applicant's response must set
forth the basis for noncompliance and provide the required notification
with the required information. Under the proposed rule, not later than
45 days after the date of issuance of the letter, FDA would make the
letter and the applicant's response public, after appropriate redaction
to protect any trade secret or confidential commercial information. FDA
would not make the letter and the applicant's response public if FDA
determines, based on the applicant's response, that the applicant had a
reasonable basis for not notifying FDA as required.

IV. Legal Authority

    FDA is amending its regulations to implement sections 506C and 506E
of the FD&C Act (21 U.S.C. 356c and 356e) as amended by FDASIA. FDA's
authority for this rule also derives from section 701(a) of the FD&C
Act (21 U.S.C. 371(a)).

V. Analysis of Impacts

A. Introduction

    FDA has examined the impacts of the proposed rule under Executive
Order 12866, Executive Order 13563, the Regulatory Flexibility Act (5
U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Pub. L.
104-4). Executive Orders 12866 and 13563 direct Agencies to assess all
costs and benefits of available regulatory alternatives and, when
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety, and other advantages; distributive impacts; and
equity). OMB has determined that this proposed rule may be an
economically significant regulatory action as defined by Executive
Order 12866.
    The Regulatory Flexibility Act requires Agencies to analyze
regulatory options that would minimize any significant impact of a rule
on small entities. The estimated per notification cost for small
business entities, $224, represents a small percentage of average
annual sales (up to 0.10 percent), for all entities covered by the
proposed rule. Although the final rule does not require specific
mitigation strategies, for firms that choose to implement mitigation or
prevention strategies, there could be additional costs of $112,000
associated with labor resources. For pharmaceutical companies with
fewer than 20 workers, these could be 2 to 7.8 percent of average
annual sales. In FDA's experience, 4-5 small business entities per year
have been affected by a shortage. For these companies, the average
annual sales was $17.54 million, and the estimated costs of
implementing mitigation or prevention strategies would represent less
than 0.64 percent of their average annual sales. The Agency anticipates
that the proposed rule will not have a significant economic impact on a
substantial number of small entities, and seeks comments on its Initial
Regulatory Flexibility Analysis.
    Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires
that Agencies prepare a written statement, which includes an assessment
of anticipated costs and benefits, before proposing ``any rule that
includes any Federal mandate that may result in the expenditure by
State, local, and tribal governments, in the aggregate, or by the
private sector, of $100,000,000 or more (adjusted annually for
inflation) in any one year.'' The current threshold after adjustment
for inflation is $141 million, using the most current (2012) Implicit
Price Deflator for the Gross Domestic Product. FDA does not expect this
proposed rule to result in any 1-year expenditure that would meet or
exceed this amount.

B. Summary

    The proposed rule would amend FDA's regulations to implement
sections 506C and 506E of the FD&C Act, as amended by FDASIA. The
proposed rule would require all applicants of covered, approved drugs
or biological products other than blood or blood components, all
applicants of blood or blood components that manufacture a significant
percentage of the U.S. blood supply, and all manufacturers of covered
drugs marketed without an approved application, to notify FDA
electronically of a permanent discontinuance or an interruption in
manufacturing of the product that is likely to lead to a meaningful
disruption in supply (or a significant disruption for blood or blood
components) of the product in the United States. Notification would be
required 6 months in advance of the permanent discontinuance or
interruption in manufacturing, or, if that is not possible, as soon as
practicable. The proposed rule also describes how to submit such a
notification, the information required to be included in such a
notification, the consequences for failure to submit a required
notification, the disclosure of shortage-related information, and the
meaning of certain terms.
    The proposed rule would impose annual costs of up to $39.34 million
on those applicants or entities affected by

the rule, and up to $8.29 million on FDA associated with reporting and
undertaking mitigation strategies. Estimated total annual costs of the
interactions between industry and FDA range between $14.99 million and
$47.62 million. Discounting over 20 years, annual quantified benefits
from avoiding the purchase of alternative products, managing product
shortages, and life-years gained, would range from $27.56 million to
$86.77 million using a 3 percent discount rate, and from $27.50 million
to $86.61 million using a 7 percent discount rate. Annualized over 20
years, net benefits range from $12.57 million to $39.15 million using a
3 percent discount rate, and from $12.51 million to $38.99 million
using a 7 percent discount rate. The public health benefits, mostly
nonquantified, include the value of information that would assist FDA,
manufacturers, health care providers, and patients in evaluating,
mitigating, and preventing shortages of drugs and biological products
that could otherwise result in non-fatal adverse events, errors,
delayed patient treatment, or interruption in clinical trial
development. The costs and benefits are summarized in table 2. Under
the current environment all notifications provide meaningful
information to identify a shortage or to prevent one, but there is
uncertainty as to whether the scope of the proposed rule could result
in notifications that do not provide information about any shortage and
lead to additional costs. FDA seeks comments on this issue.
    The full discussion of economic impacts is available in docket FDA-
2011-N-0898 and at http://www.fda.gov/AboutFDA/ReportsManualsForms/Reports/EconomicAnalyses/default.htm (Ref. 3 of this proposed rule).

                                     Table 2--Summary of Benefits, Costs and Distributional Effects of Proposed Rule
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 Primary      Low        High       Year     Discount    Period
                   Category                      estimate   estimate   estimate   dollars      rate     covered                    Notes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annualized Monetized (millions $/year)........    $57.165    $27.556    $86.773       2012         3%    2014-33  There is uncertainty surrounding these
                                                  $57.055    $27.501    $86.609       2012         7%    2014-33   estimates since some underlying
                                                                                estimates came from non-
                                                                                representative studies.
Annualized Quantified.........................  .........  .........  .........  .........         3%    2014-33  20-63 preventable shortages per year.
                                                                                7%    2014-33
                                               ---------------------------------------------------------------------------------------------------------
Qualitative...................................  Reduction in errors and non-fatal adverse events associated with shortages. Uninterrupted patient access
                                                to drugs and biological products necessary for treatment; continued access to drugs used in clinical
                                                trial development.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annualized Monetized (millions $/year)........    $31.306    $14.990    $47.621       2012         3%    2014-33  There is uncertainty about potential
                                                  $31.306    $14.990    $47.621       2012         7%    2014-33   noise from notifications that might
                                                                                not provide meaningful information,
                                                                                but which could result in additional
                                                                                review costs. In addition, these
                                                                                estimates assume that applicants will
                                                                                participate in mitigation or
                                                                                preventive strategies.
                                               ---------------------------------------------------------------------------------------------------------
Annualized Quantified.........................  None estimated.
                                               ---------------------------------------------------------------------------------------------------------
Qualitative...................................  None estimated.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Transfers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Federal Annualized Monetized (millions $/year)  None estimated.
                                               ---------------------------------------------------------------------------------------------------------
Other Annualized Monetized (millions $/year)..  None estimated.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         Effects
--------------------------------------------------------------------------------------------------------------------------------------------------------
State, Local or Tribal Gov't..................  None.
                                               ---------------------------------------------------------------------------------------------------------
Small Business................................  FDA anticipates that when finalized, small business entities covered by the proposed rule will incur
                                                small costs, $224 per notification or up to 0.10 percent of their average annual sales. Although the
                                                proposed rule would not require it, some firms may choose to incur additional costs associated with
                                                mitigation or prevention strategies.
                                               ---------------------------------------------------------------------------------------------------------
Wages.........................................  No estimated effect.
                                               ---------------------------------------------------------------------------------------------------------
Growth........................................  No estimated effect.
--------------------------------------------------------------------------------------------------------------------------------------------------------

VI. Paperwork Reduction Act of 1995

    This proposed rule contains collections of information that are
subject to review by the Office of Management and Budget (OMB) under
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) (the PRA). A
description of these provisions is given below with an 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 proposed collection of
information is necessary for 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: Permanent Discontinuance or Interruption in Manufacturing of
Certain Drug or Biological Products; Proposed Rule
    Description: Under the proposed rule, applicants with an approved
NDA or ANDA for a covered drug product, manufacturers of a covered drug
product marketed without an approved application, and applicants with
an approved BLA for a covered biological product (including certain
applications of blood or blood components) would be required to notify
FDA in writing of a permanent discontinuance of the manufacture of the
drug or biological product or an interruption in manufacturing of the
drug or biological product that is likely to lead to a meaningful
disruption in the applicant's supply (or a significant disruption for
blood or blood components) of that product. The notification would be
required if the drug or biological product is life supporting, life
sustaining, or intended for use in the prevention or treatment of a
debilitating disease or condition, including use in emergency medical
care or during surgery, and if the drug or biological product is not a
radiopharmaceutical drug product.
    The proposed rule would require the notification to include the
following information: (1) The name of the drug or biological product
subject to the notification, including the NDC (or, for a biological
product that does not have an NDC, an alternative standard for
identification and labeling that has been recognized as acceptable by
the Center Director); (2) the name of each applicant of the drug or
biological product; (3) whether the notification relates to a permanent
discontinuance of the drug or biological product or an interruption in
manufacturing of the product; (4) a description of the reason for the
permanent discontinuance or interruption in manufacturing; and (5) the
estimated duration of the interruption in manufacturing.