Public Information; Communications With State and Foreign Government Officials

[[Page 63372]]

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Part 20

[Docket No. 94N-0308]

Public Information; Communications With State and Foreign

Government Officials

AGENCY: Food and Drug Administration, HHS.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Food and Drug Administration (FDA) is amending its

regulations governing communications with State and foreign government

officials. This final rule permits FDA to receive and to disclose

nonpublic safety, effectiveness, or quality information concerning FDA-

regulated products to State government officials and to receive or to

disclose draft proposed rules and other nonpublic, predecisional

documents concerning regulatory requirements or activities to State or

foreign government officials. In both cases, disclosures to or by State

or foreign government officials would not require FDA to make the

information or documents available to the public. This action is

necessary to enhance cooperation in regulatory activities, to eliminate

unwarranted contradictory regulatory requirements, and to minimize

redundant application of similar requirements.

EFFECTIVE DATE: January 8, 1996.

FOR FURTHER INFORMATION CONTACT: Philip L. Chao, Office of Policy (HF-

23), Food and Drug Administration, 5600 Fishers Lane, Rockville, MD

20857, 301-827-3380.

SUPPLEMENTARY INFORMATION:

I. Background

In the Federal Register of January 27, 1995 (60 FR 5530), FDA

published a proposed rule that would enable FDA to disclose to and

receive from State government officials confidential commercial

information without being compelled to make that information available

to the general public. The proposed rule would also enable the agency

to share and to receive nonpublic documents, such as draft rules, with

State and foreign government officials. Exchanges of information,

including nonpublic information, would enhance Federal-State

cooperation in regulatory activities, help eliminate unwarranted

contradictory regulatory requirements, and minimize redundant

application of similar requirements by domestic and foreign bodies.

The preamble to the proposed rule described the statutory and

regulatory provisions that had governed FDA's communications with State

and foreign government officials. Generally, FDA has always possessed

both statutory and regulatory authority to withhold some information

from public disclosure. For example, the Freedom of Information Act

(the FOIA) (5 U.S.C. 552) establishes categories of information that

are exempt from public disclosure. Such categories of information

relevant to FDA records include:

1. Trade secret and confidential commercial information to protect

intellectual property rights and research incentives (5 U.S.C.

552(b)(4));

2. Predecisional documents to protect the deliberative process (5

U.S.C. 552(b)(5));

3. Information whose disclosure might invade personal privacy (5

U.S.C. 552(b)(6)); and

4. Investigatory files compiled for law enforcement purposes to

protect investigations into violations of the statutes and regulations

FDA enforces (5 U.S.C. 552(b)(7)).

In 1974, FDA issued regulations implementing the FOIA and other

laws (such as the Trade Secrets Act (18 U.S.C. 1905) and section 301(j)

of the Federal Food, Drug, and Cosmetic Act (the act) (21 U.S.C.

331(j)) that affect public access to government records and

information. These regulations included a provision, now codified in

Sec. 20.21 (21 CFR 20.21), stating that any record that is disclosed in

an authorized manner to any member of the public is available for

disclosure to all members of the public. When FDA issued Sec. 20.21 in

1974, it expressly declined to make an exception for records disclosed

to foreign governments, stating that:

The Commissioner concludes that the same rules will apply with

respect to disclosure of [safety and effectiveness information] to

foreign governments as apply to disclosure to the public. This will

permit the Food and Drug Administration to provide full summaries of

all safety and effectiveness data for all approved [new drug

applications (NDA's)] and selected summaries for [investigational

new drug applications (IND's)] and pending NDA's of which the

existence of an IND has been publicly disclosed or acknowledged. The

Commissioner concludes that this will adequately satisfy the need

for international exchange of important regulatory information of

this type.

(See 39 FR 44602 at 44636 and 44637, December 24, 1974.)

However, since 1974, the regulatory environment has changed

significantly. Increased international commerce and diminishing

governmental resources have prompted public health regulatory agencies,

as well as the industries they regulate, to make efforts to enhance the

effectiveness and efficiency of their regulatory efforts. Public health

regulatory agencies have engaged in activities to harmonize regulatory

requirements, minimize duplicative regulations, and cooperate in joint

scientific, regulatory, and enforcement endeavors.

For example, FDA is active in a program known as the International

Conference on Harmonisation of Technical Requirements for Registration

of Pharmaceuticals for Human Use (ICH). ICH was organized to provide an

opportunity for harmonization initiatives to be developed with input

from both regulatory and industry representatives. ICH is concerned

with harmonization of technical requirements for the registration of

pharmaceutical products among three regions: The European Union, Japan,

and the United States. The six ICH sponsors are the European

Commission, the European Federation of Pharmaceutical Industry

Associations, the Japanese Ministry of Health and Welfare, the Japanese

Pharmaceutical Manufacturers Association, FDA, and the Pharmaceutical

Research and Manufacturers of America. In addition, the ICH

Secretariat, which coordinates the preparation of documentation, is

provided by the International Federation of Pharmaceutical

Manufacturers Associations (IFPMA). The ICH Steering Committee includes

representatives from each organizing body and IFPMA, as well as

observers from the World Health Organization, the Canadian Health

Protection Branch, and the European Free Trade Area. The ICH expert

working groups prepare guidelines on a variety of drug safety,

efficacy, and quality matters, and FDA publishes these guidelines in

the Federal Register.

Simultaneously, FDA's interaction with State agencies has become

more important, particularly as Federal and State authorities have

shared responsibilities in certain programs and new authorities have

been added. For example, FDA and other Federal and State agencies

regulate narcotic treatment program clinics. When new treatments become

available, FDA must issue or amend its regulations regarding the new

treatment's use and any special conditions on the treatment programs

themselves. Yet, State government agencies may share responsibility for

ensuring that the treatment programs are licensed and operate in

accordance with the law and regulations. The current

[[Page 63373]]

degree of Federal-State cooperation was not contemplated back in 1974

when FDA first issued its public information regulations. New Federal

laws enacted since 1974 have also emphasized the importance of Federal-

State cooperation. Statutes such as the Prescription Drug Marketing Act

of 1987, the Nutrition Labeling and Education Act of 1990, and the

Mammography Quality Standards Act of 1992 have created regulatory

schemes in which the Federal government establishes programs and

standards and States play a major role in operations and enforcement.

This final rule is the second initiative in which FDA has amended

its public information regulations to reflect its growing involvement

in international activities. In the Federal Register of November 19,

1993 (58 FR 61598), FDA published a final rule amending its regulations

governing communications with foreign officials (hereinafter referred

to as the 1993 final rule). The 1993 final rule, which is now codified

in Sec. 20.89 (21 CFR 20.89), permits FDA, under certain safeguards, to

disclose confidential commercial information concerning FDA-regulated

products to foreign government officials who perform counterpart

functions to FDA ``as part of cooperative law enforcement or regulatory

efforts.'' Those safeguards include: (1) A written statement from the

foreign government agency establishing its authority to protect

confidential commercial information from public disclosure and a

written commitment not to disclose such information without the

sponsor's written permission or written confirmation from FDA that the

information is no longer confidential; and (2) a determination by FDA

that the sponsor has provided written authorization for the disclosure,

disclosure would be in the interest of public health, or disclosure is

to a foreign scientist visiting FDA, on FDA's premises, as part of a

joint review or long-term cooperative training effort and other

safeguards. Except in the case of foreign scientists working on FDA's

premises, the 1993 final rule did not authorize disclosure of trade

secret information without written permission from the person that had

submitted the trade secret information.

The 1993 final rule led the agency to consider whether the

privileges accorded to foreign government representatives should be

extended to State and local government officials. Although States carry

out relatively few product approval programs, they are significant

partners to FDA in such areas as bioresearch monitoring. The agency

ultimately decided that there are times when FDA needs to be able to

share confidential commercial information with State and local

government officials and that, when FDA grants such access, it should

be subject to the same restrictions and limitations on disclosure as in

cases where FDA grants foreign government officials access to

confidential commercial information. Also, cooperative regulatory

activities would be enhanced if FDA could provide nonpublic,

predecisional documents to State and foreign counterparts.

Consequently, FDA published a proposed rule (60 FR 5530) to amend

Sec. 20.88 (21 CFR 20.88) to: (1) Permit the agency to disclose

confidential commercial information submitted to FDA or incorporated

into FDA-prepared records to State government officials, and (2)

disclose to or receive from State government officials nonpublic

predecisional documents concerning FDA's or the State agency's

regulations, regulatory requirements, or other nonpublic information.

In both cases, disclosure would be subject to certain conditions or

restrictions, and the information exchanges would not require

disclosure to the public. For example, under proposed Sec. 20.88(d),

FDA would be authorized to disclose confidential commercial information

to State government officials provided that: (1) The State government

agency has provided a written statement establishing its authority to

protect confidential commercial information and a written commitment

not to disclose such information without written permission from FDA or

the sponsor of the confidential commercial information; and (2) the

agency found that the sponsor has provided written permission for the

disclosure, disclosure would be in the interest of the public health,

or disclosure would be to a visiting State government scientist on

FDA's premises. (See 60 FR 5530 at 5539.)

The proposed rule would also amend Sec. 20.89 to permit FDA to

disclose to or receive from foreign government officials nonpublic

predecisional documents, provided that certain conditions (such as

provision of a written statement establishing the foreign government's

authority to protect nonpublic documents from public disclosure) are

observed and that certain findings (such as a finding that the exchange

is ``reasonably necessary to facilitate global harmonization of

regulatory requirements, cooperative regulatory activities, or

implementation of international agreements'') are made.

II. Analysis of the Comments on the Proposed Rule

FDA received 20 comments on the proposed rule. Ten comments,

consisting of letters from nine States and one foreign country,

expressed strong support for the proposed rule. In general, these

comments indicated that the proposed rule would enhance

intergovernmental relations, help eliminate redundant regulatory

requirements, permit Federal and State agencies to respond more quickly

to potential public health problems, and aid efforts to combat health

fraud.

The remaining 10 comments were sent by individual citizens and

firms and opposed the proposed rule for the reasons described below. In

brief, five comments opposed withholding information from the general

public because they saw the proposed rule as undercutting openness in

government, whereas the other five comments opposed disclosures because

they felt the proposed rule lacked sufficient safeguards to prevent

State and foreign government officials from disclosing confidential

commercial information or trade secrets to third parties.

A. General Comments-

1. Two comments commended FDA for trying to increase

intergovernmental cooperation, but argued that, as FDA is not involved

in matters of national security or defense, it should not keep any

communications from the public. The comments asserted that withholding

information from public disclosure would not benefit the public and

might diminish public and industry respect for the agency. Similarly,

two other comments argued that the proposed rule violated the First

Amendment to the U.S. Constitution because it limited the amount of

information that the public could examine. The comments stated that the

agency had not justified or shown that its interest in denying public

access to information exchanged with State and foreign governments

exceeds the public's interest in access to that information.

The agency disagrees with the comments. The final rule does not in

any way reduce the information in FDA records that the public can

examine. Section 20.88(d) permits FDA to provide confidential

commercial information to State government officials. Confidential

commercial information has historically been exempt from public

disclosure requirements, so FDA's providing such information to State

government officials while withholding such information from the public

will not decrease the amount of information

[[Page 63374]]

available to the public. Sections 20.88(e) and 20.89(d) pertain to

exchanges of nonpublic, predecisional documents with State and foreign

government officials. Historically, FDA has generally withheld these

documents from public disclosure as well.

The agency also disagrees with any assertion that the final rule

violates the First Amendment. While courts have construed the First

Amendment as giving the public access to government proceedings, they

have declined to provide access to all government operations. Indeed,

as the Supreme Court stated in Press-Enterprise Co. v. Superior Court

of California, 478 U.S. 1, 9 (1986):

Although many governmental processes operate best under public

scrutiny, it takes little imagination to recognize that there are

some kinds of government operations that would be totally frustrated

if conducted openly.

In the present case, requiring FDA to publicly disclose confidential

commercial information and predecisional documents that it provides to

or receives from State and foreign governments would frustrate the

final rule's fundamental purposes. The final rule is intended to

encourage information exchanges between governments by assuring State

and foreign governments that the information or documents they receive

or provide will not be publicly available. The final rule also

reassures those who submit confidential commercial information to FDA

or to State or foreign governments that such information will be

protected. If public access to confidential commercial information were

required whenever FDA exchanged such information with a State or

foreign government, as the comments suggest, firms would then be

obliged to refuse requests for intergovernmental disclosure by FDA,

State governments, or foreign governments or even refuse to submit

confidential commercial information in order to protect it.

Additionally, courts have established a two-part test of

``experience'' and ``logic'' to determine whether the First Amendment

requires the governmental proceeding to be open to the public. The

first part, ``experience,'' asks whether the proceeding is one that has

historically been open to the public. The second part, ``logic,'' asks

whether public access would play a significant, positive role in the

governmental process. If the government process passes these tests,

then a qualified First Amendment right of public access exists; in

other words, the right of public access is not absolute or

unconditional. (See Press-Enterprise Co., 478 U.S. 8 and 9; United

States v. Simone, 14 F.3d 833, 837-839 (3d Cir. 1994).)

Applying the two-part test to the final rule leads to the

conclusion that the First Amendment does not require these exchanges of

information to be open to the public. Historically, the agency has

always protected confidential commercial information and indicated that

predecisional documents prepared by the agency are either not available

to the general public or available under limited conditions. (See,

e.g., 21 CFR 20.61 and 21 CFR 20.62 (nondisclosure of inter- or intra-

agency memoranda or letters); 21 CFR 20.64 (nondisclosure of records or

information compiled for law enforcement purposes); 21 CFR 10.80

(establishing conditions for release of draft notices and regulations).

Additionally, under the second prong, it is questionable whether

public access would play a significant, positive role in the

governmental process. For example, intergovernmental exchanges of

confidential commercial information will enable governments to learn

more about specific products and, as a result, to develop better and

more efficient regulatory or enforcement actions. At the same time,

disclosure of such confidential commercial information to the general

public does not further any regulatory process, and in any event, is

prohibited by 18 U.S.C. 1905. The law recognizes that public disclosure

of confidential commercial information may have a detrimental effect on

product development; providing a firm's competitors with access to

valuable information may create a disincentive for firms to develop

innovations or improve their products or methods. The result would be

diminished availability of useful products.

Furthermore, intergovernmental exchanges of nonpublic,

predecisional documents may help the agency decide whether a regulatory

approach it is considering is appropriate or even necessary. While the

agency may, in many cases, make draft documents available to the

general public (for example, in the Federal Register of July 24, 1995

(60 FR 37856), FDA published a notice announcing the availability of a

draft final rule on medical device good manufacturing practices to

members of the public as well as to State and foreign regulators), in

other cases, providing public access to predecisional documents during

the deliberative process could interfere with that process or create

misleading impressions about the agency's intentions.

In some cases, premature public disclosure of draft documents can

unnecessarily complicate regulatory actions and undermine public health

and safety. For example, if the agency developed a proposal on a

particular form of tamper evident packaging, such information could be

helpful to other foreign governments. However, premature disclosure of

that same information could ultimately prove harmful to the general

public if its disclosure would enable those who tamper with products to

alter their methods in order to evade detection or to defeat the

proposed solution.

FDA further emphasizes that, as stated in the preamble to the

proposed rule, if any State or foreign government official provides

information that the agency wishes to rely on in its published

proposals or the administrative record, the agency will include that

information unless inclusion would harm private or governmental

interests (see 60 FR 5530 at 5538). When a proposed rule is published,

therefore, the general public would be fully informed and have an

opportunity to comment on the substance of any advice from State or

foreign officials that FDA incorporated into the proposed rule.

The agency reiterates that nonpublic exchanges of information with

State and foreign government officials will not be a routine occurrence

and that FDA does not intend to prohibit public disclosure of

information received from State and foreign government officials if

such information can be disclosed without harm to any private or

governmental interests.

More importantly, the agency believes that the final rule will

result in significant public benefits because the final rule

facilitates FDA's access to information and expertise within State and

foreign governments and should result in better regulatory proposals

and actions. For example, if FDA and a State are considering whether to

issue proposed regulations on the same or similar subjects, exchanging

nonpublic, predecisional documents might lead both parties to

reexamine, modify, or harmonize their proposed regulatory strategy.

Preventing the issuance of redundant or unnecessary regulations should

benefit the public and the affected industries.

2. One comment claimed that the proposed rule violated the Tenth

Amendment to the Constitution. The Tenth Amendment states that, ``The

powers not delegated to the United States by the Constitution, nor

prohibited by it to the States, are reserved to the States

respectively, or to the people.'' The comment argued that the proposed

rule violated the Tenth

[[Page 63375]]

Amendment because citizens had not yielded to the Federal government

their ``rights of access to the information generated by our public

servants.''

The agency disagrees with the comment. The final rule concerns

FDA's ability to exchange certain confidential commercial information

or nonpublic, predecisional documents with State or foreign government

officials. Thus, the final rule pertains to information exchange and

access to FDA records and implements Federal authority without

impairing State or popular power. Indeed, the final rule can strengthen

States' regulatory roles.

3. Two comments said that the proposed rule violated procedural due

process because it would give State and foreign government officials

``preferential access'' to predecisional documents, such as draft

regulations, thereby giving those officials ``far greater influence

over the deliberative process by imparting selected information and

opinion'' to FDA.

The agency disagrees with the comments' assertion. As the Supreme

Court said in Mathews v. Eldridge, 424 U.S. 319, 332 (1976), procedural

due process ``imposes constraints on governmental decisions which

deprive individuals of `liberty' or property' interests within the

meaning of the Due Process Clause of the Fifth or Fourteenth

Amendment.'' However, ``[d]ue process, unlike some legal rules, is not

a technical conception with a fixed content unrelated to time, place

and circumstances * * * [d]ue process is flexible and calls for such

procedural protections as the particular situation demands.'' Id. p.

334 (citations omitted).

Here, the final rule does not impose any constraints or sanctions

nor does it deprive individuals of any liberty or property interest.

The final rule does not ``deprive'' the public of its access to

confidential commercial information or predecisional documents because

such information has always been protected from disclosure. Neither

does the final rule deprive the public of the opportunity to comment on

rulemaking. As stated in the preamble to the proposed rule:

* * * any information provided by State or foreign government

officials upon which FDA is relying will be included in published

proposals. At that time, the general public will be fully informed

and have an opportunity to comment on the substance of any advice

from foreign or State officials that is incorporated into agency

proposals or initiatives.

(See 60 FR 5530 at 5538.) This approach is consistent with due process

because ``[t]he fundamental requirement of due process is the

opportunity to be heard `at a meaningful time and in a meaningful

manner,''' Mathews, 424 U.S. 333 (citations omitted).

Moreover, judicial opinions concerning informal rulemaking have

focused on the need to ensure that ex parte contacts do not frustrate

judicial review or raise serious questions of fairness. (See Home Box

Office, Inc. v. FCC, 567 F.2d 9 (D.C. Cir. 1977), cert. denied 434 U.S.

829, rehearing denied 434 U.S. 988 (1977).) There is no per se

prohibition on ex parte contacts. (See Action for Children's Television

v. FCC, 564 F.2d 458, 475 n.28 (D.C. Cir. 1977).)

FDA reiterates that it will include in its published proposals any

information provided by State or foreign government officials upon

which FDA is relying. The agency will make such information available

at the time of publication. Thus, the general public will be fully

informed and have an opportunity to comment on the substance of any

advice from foreign or State officials that is incorporated into agency

proposals or initiatives. FDA believes this is consistent with all

applicable legal requirements.

4. Two comments claimed that the proposed rule violated rights of

privacy and confidentiality because information supplied to FDA, with

the expectation that the information would remain confidential, would

be eligible for disclosure to officials outside FDA. The comments noted

that non-FDA officials may have interests and obligations that differ

from those of FDA, the public, or the regulated industry. The comments

said that requiring the State or foreign government to provide a

written statement establishing its authority to protect confidential

commercial information or nonpublic documents from public disclosure

was ``wholly inadequate'' because State and foreign officials are not

subject to FDA's management or control. The comments further asserted

that much information given to FDA is unreliable, fraudulent, or

defamatory and could be used by outside parties for ulterior purposes

and that the proposed rule would dissuade submission of confidential

information to FDA and encourage submission of false information.

Four other comments expressed similar objections to the proposed

rule, stating that foreign governments might use confidential

commercial information to benefit their own industries.

The agency has given serious attention to the concerns expressed in

the comments, but disagrees that the safeguards are inadequate. As

stated earlier, FDA issued a final rule on November 19, 1993, to permit

the agency to disclose confidential commercial information to foreign

government officials, subject to certain conditions and safeguards to

protect the confidentiality of the information. Since issuing that

final rule, the agency is unaware of any misuse or unauthorized

disclosure of confidential commercial information supplied to a foreign

government. In almost all cases, disclosure occurred with the knowledge

and consent of the company that submitted the confidential commercial

information to FDA. Thus, FDA's experience with the 1993 final rule

indicates that confidential commercial information provided to a

foreign government official remains confidential and is not used to

benefit the foreign government's industry.

Furthermore, FDA emphasizes that the decision to share information

with a foreign government is discretionary and that the agency will

deny a foreign government's request for confidential commercial

information if the foreign government officials are unable to assure

FDA of their ability to protect the information. FDA will also deny

access where there is a lack of scientific data or regulatory expertise

to contribute to a product review or laboratory or clinical

investigation, unless the foreign government intends to use the

information for law enforcement purposes. (See 58 FR 61598 at 61600.)

Similar standards will apply to exchanges with State governments and

State government officials.

FDA also disagrees with the assertion that parties often submit

false information to the agency. Submitting false information to the

government is a Federal crime under 18 U.S.C. 1001. Submission of false

or misleading reports with respect to medical devices is prohibited

under section 301(q)(2) of the act (21 U.S.C. 331(q)(2)). Submission of

false information may also lead to debarment under section 306 of the

act (21 U.S.C. 335a) or assessment of civil money penalties under

section 303(g) or 307 of the act (21 U.S.C. 333(g) or 335b). FDA has

taken legal action against parties that have submitted false

information to the agency and emphasizes that it will not tolerate the

submission of false information to the agency.

5. Two comments asserted that the proposed rule was contrary to

congressional intent, as expressed in the FOIA, to provide information

to the public. The comments explained that the FOIA's exceptions to

disclosure represented a balance between the public's ``right to know''

and the government's interest in not disclosing certain types of

information. Thus, the comments claimed, only Congress can

[[Page 63376]]

alter that balance. Another comment claimed that an executive branch

agency cannot withhold information from the public, stating that only

Congress could authorize such action.

The agency disagrees with the comments. The preamble to the

proposed rule considered this issue and explained why the agency

believes that the proposed rule is consistent with the FOIA. FOIA (5

U.S.C. 552) is a disclosure statute and its exemptions are intended to

be discretionary. As stated earlier, those exemptions establish several

categories of information that can be withheld from public disclosure.

The categories relevant to FDA include: (a) Trade secret and

confidential commercial information to protect intellectual property

rights and research incentives (5 U.S.C. 552(b)(4)); (b) predecisional

documents to protect the deliberative process (5 U.S.C. 552(b)(5)); (c)

information whose disclosure might invade personal privacy (5 U.S.C.

552(b)(6)); and (d) investigatory files compiled for law enforcement

purposes to protect investigations (5 U.S.C. 552(b)(7)).

For disclosures of confidential commercial information under

Sec. 20.88(d), the preamble to the proposed rule explained that the

FOIA protects two broad categories of information from mandatory public

disclosure: Trade secret information and ``information that is: (1)

Commercial or financial, (2) obtained from a person, and (3) privileged

or confidential (`confidential commercial information').'' (See 60 FR

5530 at 5535.) The preamble to the proposed rule explained that the

proposed rule did not alter agency practice with respect to protecting

trade secret information (except to permit disclosure to visiting State

scientists) and that disclosures of confidential commercial information

to State government officials in accordance with the conditions of the

proposed rule would not be a public disclosure and would be

``authorized'' under the Trade Secrets Act. (See 60 FR 5530 at 5536.)

The preamble to the proposed rule also explained why the provisions

regarding predecisional documents and other nonpublic information are

consistent with the FOIA. The preamble characterized exchanges of

nonpublic, predecisional documents between FDA and State and foreign

governments as being of the same character as interagency memoranda and

letters that are exempt from disclosure under the FOIA. The preamble to

the proposed rule stated that:

* * * it is appropriate to assert the deliberative process

privilege [to disclosure under the FOIA] in response to requests for

public access to certain communications from State and foreign

government officials because the same policy reasons that support

nondisclosure of deliberative and predecisional memoranda generated

by Federal government agencies justify withholding, in many

circumstances, the advice and recommendations generated for FDA by

State and foreign government counterparts.

The agency's ability to make sound decisions about the

development and implementation of public health and harmonization

initiatives is enhanced by access to the advice and recommendations

of experts in State and foreign governments who are engaged in

similar efforts in their own jurisdictions. The agency views this

kind of consultation as functionally equivalent to the ``intra-'' or

``interagency'' deliberation more commonly protected by exemption 5

of the FOIA. Indeed, it is frequently the case that advice from a

State or foreign health official whose responsibilities parallel

those of FDA officials concerning the feasibility of a particular

technical or harmonization regulation will be as relevant as similar

recommendations solicited from employees in other Federal government

agencies.

(See 60 FR 5530 at 5536 and 5537.) The preamble to the proposed rule

noted that courts have applied a ``functional'' test for assessing the

applicability of the exemption for intra- and interagency memoranda and

letters and have included ``nonagencies'' within the exemption. Id.

The preamble also noted that in circumstances where advice or

information is provided by foreign governments pursuant to

international agreements that require confidentiality as a condition of

exchange, FDA believes that a record so provided is not necessarily an

``agency record'' subject to FOIA. Id. at 60 FR 5537 through 5538. The

agency cited recent court decisions suggesting that FDA could honor

requests for confidentiality under these circumstances without

contravening public disclosure requirements established by Congress.

Id.

Thus, the final rule is consistent with the FOIA, and the agency

declines to amend the final rule to require public access to documents

beyond that required by the FOIA.

6. One comment said that FDA should discuss the proposed rule's

potential effects, costs, and implications in a public forum.

FDA believes that notice and comment rulemaking has provided a

satisfactory public forum for this issue.

7. Three comments said that FDA cannot ensure that no unauthorized

disclosures of confidential commercial information will occur and

cannot take effective action against State or foreign government

officials if unauthorized disclosures occur. Two comments added that

the agency should describe how it intends to monitor and investigate

reports of unauthorized disclosures and take action against those

employees making unauthorized disclosures. One comment suggested that

FDA establish a mechanism to track such unauthorized disclosures,

analyze and report any patterns or trends in unauthorized disclosures,

and, if FDA becomes aware of any unauthorized disclosures by State or

foreign government officials, notify the company whose confidential

commercial information was disclosed and cease information exchanges

with the State or foreign government.

FDA cannot guarantee that no unauthorized disclosures of

confidential commercial information will ever occur, but it does note

that procedures already exist for investigating reports of unauthorized

disclosures. In 1994, the agency created the Office of Internal Affairs

(OIA). OIA consists of one Special Agent in Charge and a team of

Special Agents. These agents are trained criminal investigators and

report directly to the Commissioner of Food and Drugs or the Deputy

Commissioner/Senior Advisor. FDA described OIA's functions in a notice

published in the Federal Register of January 23, 1995 (60 FR 4417 and

4418). In brief, OIA:

Provides a centralized Agencywide investigative resource

for the Commissioner, the Deputy Commissioners, and top Agency

management;

Provides a centralized investigative liaison between FDA

and the Office of the Inspector General (OIG);

Serves as an FDA investigative resource to conduct

internal FDA investigations and to support OIG investigations; and

OIA is also responsible for investigating all allegations of misconduct

by FDA employees. (See 59 FR 67087, December 28, 1994.) To assist in

this task, the office uses a data base to track cases by type of

investigation. One investigation type is ``Unauthorized Release of

Information.''

Whenever OIA receives any report of unauthorized disclosures of

information, OIA investigates the report and works with the OIG where

appropriate. If the investigation suggests that Federal laws were

violated, this information is presented to the OIG and may be referred

to the Department of Justice for prosecution. These same resources and

procedures could be applied, in cooperation with State and

[[Page 63377]]

foreign governments, to allegations of inappropriate disclosures by

their officials.

Furthermore, when FDA issued the 1993 final rule authorizing

disclosure of confidential commercial information to foreign government

officials, the agency expressly stated that it would cease cooperative

ventures with any government that failed to honor its written

commitment to preserve the confidentiality of the information provided

by FDA. (See 58 FR 61598 at 61603.) The agency will expand this policy

to include State governments. FDA's extensive experience sharing

nonpublic investigative records with State government officials

indicates that unauthorized disclosures are unlikely to occur and that

any State employee misconduct will be expeditiously handled in order to

preserve cooperative efforts between FDA and State governments.

Moreover, after issuing the 1993 final rule, FDA established

internal procedures and model confidentiality agreements for

disclosures to foreign government officials. These procedures will be

expanded to apply to State government officials.

The agency also notes that, contrary to the comments' belief that

firms and individuals have no recourse if a foreign government official

makes an unauthorized disclosure of confidential commercial

information, Federal law does provide an avenue for relief. Under

section 301 of the Trade Act of 1974 as amended, the United States

Trade Representative is authorized to take appropriate action against

any act, policy, or practice of a foreign government that ``is

unjustifiable and burdens or restricts United States commerce.'' (See

19 U.S.C. 2411.) Such actions can be initiated by a petition to the

United States Trade Representative. (See 19 U.S.C. 2412.) Additionally,

as previously noted, FDA will not exchange information with any foreign

government that does not honor its commitment to protect confidential

commercial information. FDA believes that the value foreign governments

place on the continuing ability to exchange information will also help

assure that foreign government officials respect the confidentiality of

information that they receive.

8. Three comments suggested adding additional safeguards to

proposed Secs. 20.88 and 20.89 to decrease the likelihood that

unauthorized disclosures of confidential commercial information would

occur. In brief, these comments would require State and foreign

governments to provide written assurances that individuals who would

have access to the confidential commercial information: (1) Will not be

employees, consultants, or persons who have a professional relationship

with a drug manufacturer; and (2) will be subject to a confidentiality

agreement and/or appropriate laws and regulations prohibiting them from

disclosing any information. These comments also would require both FDA

and the firm that had submitted the confidential commercial information

to FDA to consent, in writing, to any release or disclosure by the

State or foreign government.

Under Sec. 20.88(d)(1)(i), a State government agency must provide a

written statement establishing its authority to protect confidential

commercial information from public disclosure. FDA will supplement this

requirement with guidance to States on conflicts of interest and

prohibitions against further disclosure.

FDA declines to amend the final rule to require the agency and the

party submitting the confidential commercial information to consent to

any release or disclosure by the State or foreign government. This

final rule and the 1993 final rule governing disclosures of

confidential commercial information to foreign government officials

already provide for written consent by the party submitting the

confidential commercial information (see Sec. 20.88(d)(1)(i); see also

Sec. 20.89(c)(1)(i)) or written permission from FDA before the State or

foreign government can make any disclosure. Thus, these rules already

would require a State or foreign government to obtain written

authorization from the party that submitted the confidential commercial

information, or written confirmation from FDA that the information was

no longer confidential. The comments' suggested changes, therefore, are

unnecessary.

As for disclosures to foreign government officials, since amending

Sec. 20.89 in 1993 to allow FDA to disclose confidential commercial

information to foreign government officials, the agency has not

received any reports of unauthorized disclosures by foreign government

officials. The agency acknowledges that, in some cases, firms have

requested additional safeguards, similar to those mentioned in the

comments, and that the foreign government officials have consented to

such additional safeguards. However, FDA's experience under Sec. 20.89

does not indicate that such additional safeguards are necessary.

9. One comment would expand Secs. 20.88 and 20.89 so that they

applied to State and foreign government officials and ``all agents

contracted by them for any part of the review and approval processes

involving confidential and trade secret information.'' The comment

would also have State and foreign government officials and agents

subject to the same confidentiality restrictions as FDA employees.

The agency agrees with the comment and has amended

Secs. 20.88(e)(3) and 20.89(d)(3) so that references to State or

foreign government officials are understood to include agents

contracted by those officials.

10. The agency, on its own initiative, has amended Secs. 20.88(e)

and 20.89(d) to permit the Deputy Commissioner for Policy to authorize

disclosures of nonpublic, predecisional documents to State or foreign

government officials. The Deputy Commissioner for Policy is authorized,

under 21 CFR 5.20(f), to perform any of the functions of the

Commissioner of Food and Drugs with respect to the issuance of notices,

proposed rules, and final rules.

11. FDA, on its own initiative, has also amended the authority

citation to include a reference to the Pesticide Monitoring

Improvements Act of 1988 (21 U.S.C. 1401-1403). FDA has taken this

action because that statute provides for cooperative agreements between

FDA and foreign governments and exchanges of certain information

between FDA and States.

B. Section 20.88--Communications With State and Local Government

Officials

12. Proposed Sec. 20.88(d)(1)(i) would require, as a condition of

authorizing disclosure of confidential commercial information to a

State government official, a written statement from the State

government agency ``establishing its authority to protect confidential

commercial information from public disclosure and a written commitment

not to disclose any such information'' without the sponsor's written

permission or FDA's written confirmation that the information was no

longer confidential. One comment would require that State agencies

provide written assurance that, notwithstanding their own State laws,

the State agency would protect any confidential commercial information

that it received ``in accordance with Federal law and FDA

regulations.''

FDA sees no need to amend the final rule as suggested by the

comment. FDA would not disclose confidential commercial information to

a State government official unless State laws allow adequate protection

of that information. -

13. One comment would require FDA to notify and to obtain written

consent

[[Page 63378]]

from a party before disclosing confidential commercial information to

State government officials. The comment would have the notice describe

the information to be disclosed or provide sufficient detail to permit

the party to decide whether to withhold permission for disclosure. The

comment would also restrict any permission to disclose confidential

commercial information to the specific request.

As stated elsewhere in this document, FDA intends, in most cases,

to seek written approval from a party before disclosing confidential

commercial information. However, the agency declines to require such

written approval in all cases because there are situations, such as

enforcement actions, where it would be inappropriate to require written

approval prior to disclosure.

The agency does agree, however, that a party's written

authorization to disclosure of confidential commercial information is

limited to a specific request to disclose information and does not

constitute automatic authorization to disclose the information to any

subsequent State government official seeking to obtain that

information. (See 58 FR 61598 at 61602 (stating that ``in general, the

sponsor needs to authorize further disclosure of confidential

information'').)

14. Proposed Sec. 20.88(d)(1)(ii)(A) would authorize disclosure of

confidential commercial information if disclosure would be ``in the

interest of the public health by reason of the State government's

possessing information concerning the safety, effectiveness, or quality

of a product or information concerning an investigation, or by reason

of the State government being able to exercise its regulatory authority

more expeditiously'' than FDA. One comment objected to this provision,

arguing that it provided ``no objective criteria for determining when

the disclosure of confidential commercial information would be in the

interest of public health.'' The comment claimed that the agency had

not shown the State commissioned officials program to be inadequate,

that the provision gave no ``clear, objective standards outlining the

procedure for allowing disclosure,'' and that the proposed rule would

operate in an arbitrary and capricious fashion.

The agency declines to amend the final rule to provide the

``objective criteria'' requested by the comment. It would be extremely

difficult, if not impossible, to draft objective criteria that would

encompass all instances where disclosure of confidential commercial

information would be in the interest of public health, and any

``objective'' regulatory criteria would invite parties to dispute the

applicability of a particular criterion instead of examining public

health concerns and would prevent the final rule from operating in a

flexible manner.

FDA further notes that the phrase ``interest of public health'' is

modified by two criteria. Under Sec. 20.88(d)(1)(ii)(B), disclosure

would be in the interest of public health: (1) By reason of the State

government's possessing information concerning the safety,

effectiveness, or quality of a product or information concerning an

investigation; or (2) by reason of the State government being able to

exercise its regulatory authority more expeditiously than FDA. Thus,

Sec. 20.88(d)(1)(ii)(B) contemplates disclosures in the interest of

public health if a State government possesses information about a

product or an investigation or can exercise regulatory authority in a

particular situation more quickly than FDA; the provision does not

permit unconditional or unrestricted exchanges of confidential

commercial information. As stated in the preamble to the proposed rule,

disclosures to State governments will not be a routine occurrence, but

would occur only in limited situations and on a case-by-case basis.

(See 60 FR 5530 at 5535.)

As for the comment claiming that the agency had not shown the

commissioned officials program to be inadequate, the preamble to the

proposed rule described the commissioning process for State government

officials and explained why commissioned officials might not always be

the best or most appropriate persons to receive the types of

confidential commercial information or nonpublic, predecisional

documents contemplated by the rule. In brief, section 702(a) of the act

(21 U.S.C. 372(a)) authorizes FDA to conduct examinations and

investigations through employees of the Department of Health and Human

Services (HHS) or through any health, food, or drug officer or employee

of any State, territory, or political subdivision commissioned as an

officer of HHS. (See 60 FR 5530 at 5531.) State or local government

officials commissioned under this program have a status with respect to

disclosure of FDA records that permits the commissioned official to

review confidential investigative files and proposed policy statements

that are normally restricted to Federal employees. Thus, FDA can

solicit advice from these commissioned officials without public

disclosure.

The commissioning process, however, is too cumbersome to be

practical in the situations that led FDA to issue the proposed rule. A

commissioned official is authorized to perform one or more of the

following functions: (1) Conduct examinations, inspections, and

investigations under the act; (2) collect and obtain samples; (3) copy

and verify records; and (4) receive and review official FDA documents.

(See Regulatory Procedures Manual, chapter 3 (regarding commissioning

State and local officials).) A commissioned official is only authorized

to review FDA documents that fall within the scope of his or her

commission; the official may not necessarily have authorized access to

all the information that the agency may need to convey to the State.

Yet, even if commissioning a State government official would enable

an official to review FDA documents, such authority would not eliminate

the need for the final rule. Commissioning a State government official

does not confer any protection to documents supplied by a State

government to FDA, whereas Sec. 20.88(e) authorizes the agency to

receive nonpublic, predecisional documents from State government

officials and to protect those documents from public disclosure.

Similar provisions in documents provided to FDA by foreign government

officials are set forth in Sec. 20.89(d). If information exchanges are

to be valuable and meaningful, the agency must be able to protect State

or foreign government documents that it receives, as well as the

documents that it sends, and the final rule provides such protection to

information that FDA receives.

Additionally, as stated in the preamble to the proposed rule, the

commissioning process cannot be easily adapted for situations requiring

rapid exchange of information. (See 60 FR 5530 at 5532.) The process

involves identifying suitable candidates (and often requires

commissioning the candidates' supervisors or State agency heads as

well), reviewing the candidates' qualifications, conducting background

checks (if necessary), issuing certificates and credentials, and

accounting for credentials on a periodic basis. These procedures, even

if they were as streamlined as possible, might be both impractical and

unnecessary in situations where rapid information exchanges are

necessary. Consequently, the agency believes that the final rule gives

FDA needed authority to exchange information both quickly and

efficiently in situations when reliance on commissioned officials would

prove impractical.

15. Two comments would amend proposed Sec. 20.88(d)(1)(ii)(C) to

add new requirements to deter unauthorized

[[Page 63379]]

disclosures of information. The comments would require visiting State

scientists to confirm that they are not employees, consultants, or

persons that have any professional relationship with a drug

manufacturer and to provide a written commitment not to release or

disclose information without approval from FDA and the party submitting

the confidential commercial information. The comments would not permit

FDA to authorize disclosures unilaterally.

FDA declines to revise the final rule as suggested by the comments.

Section 20.88(d)(1)(ii)(C) already contains sufficient safeguards that

accomplish the same purpose as those suggested by the comments. For

example, the final rule requires a visiting State government scientist

to provide a written assurance that he or she ``has no financial

interest in the regulated industry of the type that would preclude

participation in the review of the matter if the individual were

subject to the conflict of interest rules applicable to the Food and

Drug Administration advisory committee members under 21 CFR

14.80(b)(1).'' Under Sec. 14.80(b)(1), advisory committee members are

subject to Federal conflict of interest laws and regulations. A

visiting State government scientist, therefore, could not truthfully

provide the written assurance required under Sec. 20.88(d)(1)(ii)(C) if

he or she were an employee or consultant of a drug manufacturer.

FDA also declines to amend the final rule to prevent FDA from

authorizing disclosure of confidential commercial information or trade

secrets to a visiting State government scientist. Section

20.88(d)(1)(ii)(C) authorizes disclosure to a visiting State government

scientist if, among other things: (1) The visiting State government

scientist signs a written commitment to protect the confidentiality of

the information; (2) the visiting State government scientist provides

written assurance that he or she has no financial interest in the

regulated industry of the type that would preclude participation in

review of the matter if the visiting State government scientist were

subject to FDA's conflict of interest rules; and (3) FDA retains

physical control over the information. The agency believes that these

safeguards provide sufficient protection to confidential commercial and

trade secret information in FDA's possession. The agency further notes

that a similar regulation has existed for visiting foreign government

scientists since 1993, and the agency has not experienced any

difficulties or problems with confidential commercial or trade secret

information disclosed to visiting foreign government scientists.

16. One comment said that firms that submitted confidential

commercial information should have the opportunity to purge ``highly

confidential'' information before disclosure to State government

officials. The comment explained that this would enable firms to

discuss why FDA should not release certain information to a State

government official.

The agency wishes to reassure regulated firms about its concerns

for proprietary information, but declines to accept the comment's

suggestion. While FDA intends, in most cases, to seek a firm's approval

before disclosing confidential commercial information, there are

situations where it would be inappropriate to permit firms to purge

information before its release to State government officials. For

example, if confidential commercial information in a marketing

application indicated that a firm might have engaged in fraud or

misrepresentation that violated both State and Federal laws, the agency

might want to notify its State government counterparts. Permitting a

firm to purge that information before its release to a State government

official would defeat any State regulatory action. Consequently, the

agency declines to amend the final rule as suggested by the comment.

C. Section 20.89--Communications With Foreign Government Officials

17. One comment from a foreign government official supported

proposed Sec. 20.89(d) but asked whether FDA would protect the

confidentiality of nonpublic, predecisional documents provided by a

foreign government.

Section 20.89(d) authorizes the agency to disclose and to receive

nonpublic, predecisional documents to or from foreign government

officials. Under Sec. 20.89(d)(2), such documents would not be made

available to all members of the public. Thus, FDA would maintain the

confidentiality of nonpublic, predecisional documents supplied by a

foreign government official. The basis for this position is explained

in detail in the preamble to the proposed rule (60 FR 5530 at 5536 and

5538).

18. Four comments suggested that FDA either permit firms that

submitted the confidential commercial information to purge those

records before their release or to decide whether release should occur,

or provide summaries to firms regarding the information disclosed to

the foreign government.

The agency addressed similar comments when it issued the 1993 final

rule permitting FDA to disclose confidential commercial information to

foreign government officials. The preamble to the 1993 final rule

stated that: (1) Any disclosure would be on a case-by-case basis under

assurances of continuing confidentiality; (2) the agency will, in most

circumstances, seek written authorization from the party submitting the

confidential commercial information to permit disclosure; and (3) there

are situations where it would be inappropriate to require consent from

a party that submitted confidential commercial information. (See 58 FR

61598 at 61601.)

The same rationale applies here. FDA reiterates that the final rule

authorizes disclosure only to those governments that have provided

written assurances that they have the authority to protect confidential

commercial information and nonpublic, predecisional documents from

public disclosure and that they will not disclose such documents or

information without the written permission of the sponsor or written

confirmation from FDA that the information or documents are no longer

confidential. Additionally, in most cases, FDA intends to seek written

consent from the party that submitted the confidential commercial

information before disclosing that information. To permit parties to

purge information would lessen the utility of any information provided

to a State or foreign government and invite such governments to

withhold information themselves.

Requiring FDA to give parties summaries of information disclosed to

a State or foreign government would also be inappropriate or

unnecessary. For example, if a State or foreign government were

considering whether to take action against a particular product,

requiring FDA to provide a summary to the product's manufacturer would

alert a violative firm of the potential enforcement action. In an

action to help a government identify fraudulent goods, the agency might

wish to provide confidential commercial information that would help

distinguish legitimate products from fraudulent ones; in such a

scenario, providing a summary to the product's manufacturer would be

worthless because the manufacturer would already know the information

that was the basis of the summary. Thus, the agency declines to accept

the comments' suggestions.

19. Proposed Sec. 20.89(d)(1)(i) would require, as a condition to

authorizing disclosure of confidential commercial information to a

foreign government official, a written statement from the foreign

government establishing its authority to protect nonpublic documents

from public disclosure and a

[[Page 63380]]

written commitment not to disclose any such documents without FDA's

written confirmation that the information was no longer confidential.

One comment would limit disclosures to foreign government officials

whose countries ``can reasonably be expected to maintain

confidentiality and patent protection at the level acceptable under

U.S. intellectual property protection agreements with foreign

nations.'' If the agency could not determine whether the foreign

country offered ``acceptable'' protection, the comment said that FDA

should be required to consult the firm that submitted the confidential

commercial information regarding that firm's prior experience with

intellectual property protection in the foreign country.

Although this comment pertains to the rulemaking completed in 1993

rather than the present final rule and is outside the scope of this

rulemaking, the agency considered similar comments in 1993 when it

issued a final rule authorizing the disclosure of confidential

commercial information to foreign government officials. The comments

asked FDA to restrict disclosures to countries with similar product

approval processes or to list foreign governments ``that have been

designated as appropriate for the sharing of confidential

information.'' (See 58 FR 61598 at 61602.) The agency declined to

accept the comments' recommendations, stating that a list of foreign

countries would not be useful, repeating that disclosures were subject

to certain safeguards, and stating that, ``in every case disclosure is

at the discretion of the agency and cannot be automatic for any

country.'' Id. The same rationale applies here. FDA will decide, on a

case-by-case basis, whether to disclose confidential commercial

information to a foreign government and, in most cases, will seek

written permission from the party that submitted the confidential

commercial information. Given these safeguards, there is no need to

establish a list of countries that would protect intellectual property

to an ``acceptable'' or ``appropriate'' level. Additionally, because

most disclosures would be preceded by written approval from the party

submitting the confidential commercial information, there is no need to

amend the final rule to require prior consultation with the party that

submitted the confidential commercial information.

20. One comment said that proposed Sec. 20.89 would delay public

participation in reviewing or commenting on predecisional documents and

permit public comment ``only after the agency has more invested in its

own viewpoint.''

The agency disagrees with the comment. The agency believes that

exchanges of nonpublic, predecisional documents with State and foreign

government officials will neither significantly delay public review of

such documents nor make any public review less meaningful. FDA will be

just as interested in hearing what the public thinks about a proposal,

whether or not that proposal was previously shared with a regulatory

counterpart. Nor will the agency's obligation to consider or respond to

public comments in any way diminish because of this rule.

FDA stresses that the purpose behind exchanging nonpublic,

predecisional documents is not to diminish the role of any participant

in rulemaking, but to enhance Federal-State uniformity and facilitate

global harmonization of regulatory requirements. Although FDA often

considers State or foreign regulatory requirements when drafting its

own predecisional documents, mutual exchanges between FDA and a State

or foreign government will enable refinements in the documents to

account for new requirements or developments. The agency believes that,

in most cases, the changes that would be made would probably be minor

technical adjustments or revisions to a document before publication or

release, but, in any event, there should be no significant delay in

publication for general review and comment.

The final rule also promotes efficiency during any public review

period. Mutual exchanges between FDA and State or foreign governments

should result in documents that reflect greater consideration of State

or foreign requirements and resources, thereby reducing the possibility

that the agency would have to substantially revise or even repropose a

proposed regulatory approach due to an inconsistent or conflicting

State or foreign requirement identified by comments submitted during a

comment period. For example, providing a nonpublic, predecisional

document to State governments could alert FDA that its proposed

enforcement scheme would overly burden State resources; FDA could then

revise the enforcement scheme and publish or release a document that

contained the revised enforcement scheme. FDA also reiterates that any

document that it publishes in the Federal Register will inform the

public of any information from State or foreign government officials

that affected the document and provide an opportunity for public

comment.

In contrast, if FDA cannot exchange a nonpublic, predecisional

documents with State governments, the agency may publish a document

proposing an enforcement scheme that places unrealistic burdens on

State governments, await comments, publish a second document proposing

a revised enforcement scheme, await comments again, and then issue a

final document. Under this scenario, public participation might occur

earlier, but final action on the initiative would occur later, with

attendant delays to the program in question and waste of public

resources.

III. Description of the Final Rule

Section 20.88(d) of the final rule authorizes FDA to disclose

confidential commercial information submitted to FDA or incorporated

into FDA-prepared records to State government officials as part of

cooperative law enforcement or regulatory efforts, provided that: (1)

The State government agency has provided a written statement

establishing its authority to protect the information from public

disclosure and has provided a written commitment not to disclose such

information without the sponsor's written permission or written

confirmation from FDA that the information is no longer confidential;

and (2) FDA has determined that the sponsor has consented, in writing,

to disclosure, disclosure would be in the interest of public health, or

disclosure would be to a visiting State scientist, subject to certain

additional conditions (such as a written assurance that the visiting

State scientist has no financial interest in the regulated industry

that would preclude him or her from participating in the matter under

review). Information exchanged under Sec. 20.88(d) would not be

available to the public.

Sections 20.88(e) and 20.89(d) permit the agency to disclose or to

receive nonpublic, predecisional documents to or from State or foreign

government officials as part of efforts to improve intergovernmental

cooperation and uniformity or to implement intergovernmental

agreements. The disclosure or receipt of nonpublic, predecisional

documents is subject to two conditions: (1) The State or foreign

government agency has provided a written statement establishing its

authority to protect nonpublic documents from public disclosure and has

provided a written commitment not to disclose such documents without

FDA's written confirmation that the information no longer has nonpublic

status; and (2) the agency has determined that exchange is reasonably

[[Page 63381]]

necessary to cooperative regulatory activities or to improve Federal-

State uniformity or to facilitate international harmonization of

regulatory requirements. Information exchanged under Secs. 20.88(e) or

20.89(d) will not be available to the public.

IV. Environmental Impact

The agency has determined under 21 CFR 25.24(a)(8) that this action

is of a type that does not individually or cumulatively have a

significant effect on the human environment. Therefore, neither an

environmental assessment nor an environmental impact statement is

required.

V. Analysis of Impacts

FDA has examined the impacts of the final rule under Executive

Order 12866 and the Regulatory Flexibility Act (Pub. L. 96-354).

Executive Order 12866 directs agencies to assess all costs and benefits

of available regulatory alternatives and, when regulation is necessary,

to select regulatory approaches that maximize net benefits (including

potential economic, environmental, public health and safety, and other

advantages; distributive impacts; and equity). The agency believes that

this final rule is consistent with the regulatory philosophy and

principles identified in the Executive Order. In addition, the final

rule is not a significant regulatory action as defined by the Executive

Order and so is not subject to review under the Executive Order.

The Regulatory Flexibility Act requires agencies to analyze

regulatory options that would minimize any significant impact of a rule

on small entities. Because the final rule promotes harmonized

regulatory requirements, nationally and internationally, thereby

reducing disparate regulatory requirements, the agency certifies that

the final rule will not have a significant economic impact on a

substantial number of small entities. Therefore, under the Regulatory

Flexibility Act, no further analysis is required.

List of Subjects in 21 CFR Part 20

Confidential business information, Courts, Freedom of information,

Government employees.

Therefore, under the Federal Food, Drug, and Cosmetic Act and under

authority delegated to the Commissioner of Food and Drugs, 21 CFR part

20 is amended as follows:

PART 20--PUBLIC INFORMATION-

1. The authority citation for 21 CFR part 20 is revised to read as

follows:

Authority: Secs. 201-903 of the Federal Food, Drug, and Cosmetic

Act (21 U.S.C. 321-393); secs. 301, 302, 303, 307, 310, 311, 351,

352, 354-360F, 361, 362, 1701-1706, 2101 of the Public Health

Service Act (42 U.S.C. 241, 242, 242a, 242l, 242n, 243, 262, 263,

263b-263n, 264, 265, 300u-300u-5, 300aa-1); 5 U.S.C. 552; 18 U.S.C.

1905; 19 U.S.C. 2531-2582; 21 U.S.C. 1401-1403.

2. Section 20.88 is amended by adding new paragraphs (d) and (e) to

read as follows:

Sec. 20.88 Communications with State and local government officials.

* * * * *

(d)(1) The Commissioner of Food and Drugs, or any other officer or

employee of the Food and Drug Administration whom the Commissioner may

designate to act on his or her behalf for the purpose, may authorize

the disclosure of confidential commercial information submitted to the

Food and Drug Administration, or incorporated into agency-prepared

records, to State government officials as part of cooperative law

enforcement or regulatory efforts, provided that:

(i) The State government agency has provided both a written

statement establishing its authority to protect confidential commercial

information from public disclosure and a written commitment not to

disclose any such information provided without the written permission

of the sponsor or written confirmation by the Food and Drug

Administration that the information no longer has confidential status;

and

(ii) The Commissioner of Food and Drugs or the Commissioner's

designee makes one or more of the following determinations:

(A) The sponsor of the product application has provided written

authorization for the disclosure;

(B) Disclosure would be in the interest of public health by reason

of the State government's possessing information concerning the safety,

effectiveness, or quality of a product or information concerning an

investigation, or by reason of the State government being able to

exercise its regulatory authority more expeditiously than the Food and

Drug Administration; or

(C) The disclosure is to a State government scientist visiting the

Food and Drug Administration on the agency's premises as part of a

joint review or long-term cooperative training effort authorized under

section 708 of the Federal Food, Drug, and Cosmetic Act (the act), the

review is in the interest of public health, the Food and Drug

Administration retains physical control over the information, the Food

and Drug Administration requires the visiting State government

scientist to sign a written commitment to protect the confidentiality

of the information, and the visiting State government scientist

provides a written assurance that he or she has no financial interest

in the regulated industry of the type that would preclude participation

in the review of the matter if the individual were subject to the

conflict of interest rules applicable to the Food and Drug

Administration advisory committee members under Sec. 14.80(b)(1) of

this chapter. Subject to all the foregoing conditions, a visiting State

government scientist may have access to trade secret information,

entitled to protection under section 301(j) of the act, in those cases

where such disclosures would be a necessary part of the joint review or

training.

(2) Except as provided under paragraph (d)(1)(ii)(C) of this

section, this provision does not authorize the disclosure to State

government officials of trade secret information concerning

manufacturing methods and processes prohibited from disclosure by

section 301(j) of the act, unless pursuant to an express written

authorization provided by the submitter of the information.

(3) Any disclosure under this section of information submitted to

the Food and Drug Administration or incorporated into agency-prepared

records does not invoke the rule established in Sec. 20.21 that such

records shall be made available to all members of the public.

(e)(1) The Deputy Commissioner for Policy, or any other officer or

employee of the Food and Drug Administration whom the Deputy

Commissioner for Policy may designate to act on his or her behalf for

the purpose, may authorize the disclosure to, or receipt from, an

official of a State government agency of nonpublic, predecisional

documents concerning the Food and Drug Administration's or the other

government agency's regulations or other regulatory requirements, or

other nonpublic information relevant to either agency's activities, as

part of efforts to improve Federal-State uniformity, cooperative

regulatory activities, or implementation of Federal-State agreements,

provided that:

(i)- The State government agency has provided both a written

statement establishing its authority to protect such nonpublic

documents from public disclosure and a written commitment not to

disclose any such documents provided without the written confirmation

by the Food and Drug Administration that the documents no longer have

nonpublic status; and

[[Page 63382]]

(ii) The Deputy Commissioner for Policy or the Deputy Commissioner

for Policy's designee makes the determination that the exchange is

reasonably necessary to improve Federal-State uniformity, cooperative

regulatory activities, or implementation of Federal-State agreements.

(2) Any exchange under this section of nonpublic documents does not

invoke the rule established at Sec. 20.21 that such records shall be

made available to all members of the public.

(3) For purposes of this paragraph, the term ``official of a State

government agency'' includes, but is not limited to, an agent

contracted by the State government, and an employee of an organization

of State officials having responsibility to facilitate harmonization of

State standards and requirements in FDA's areas of responsibility. For

such officials, the statement and commitment required by paragraph

(e)(1)(i) of this section shall be provided by both the organization

and the individual.

3. Section 20.89 is amended by adding new paragraph (d) to read as

follows:

Sec. 20.89 Communications with foreign government officials.

* * * * *

(d)(1) The Deputy Commissioner for Policy, or any other officer or

employee of the Food and Drug Administration whom the Deputy

Commissioner for Policy may designate to act on his or her behalf for

the purpose, may authorize the disclosure to, or receipt from, an

official of a foreign government agency of nonpublic, predecisional

documents concerning the Food and Drug Administration's or the other

government agency's regulations or other regulatory requirements, or

other nonpublic information relevant to either agency's activities, as

part of cooperative efforts to facilitate global harmonization of

regulatory requirements, cooperative regulatory activities, or

implementation of international agreements, provided that:

(i)- The foreign government agency has provided both a written

statement establishing its authority to protect such nonpublic

documents from public disclosure and a written commitment not to

disclose any such documents provided without the written confirmation

by the Food and Drug Administration that the documents no longer have

nonpublic status; and

(ii) The Deputy Commissioner for Policy or the Deputy Commissioner

for Policy's designee makes the determination that the exchange is

reasonably necessary to facilitate global harmonization of regulatory

requirements, cooperative regulatory activities, or implementation of

international agreements.

(2) Any exchange under this section of nonpublic documents does not

invoke the rule established in Sec. 20.21 that such records shall be

made available to all members of the public.

(3) For purposes of this paragraph, the term ``official of a

foreign government agency'' includes, but is not limited to, an agent

contracted by the foreign government, and an employee of an

international organization having responsibility to facilitate global

harmonization of standards and requirements in FDA's areas of

responsibility. For such officials, the statement and commitment

required by paragraph (d)(1)(i) of this section shall be provided by

both the organization and the individual.

Dated: November 30, 1995.

William B. Schultz,

Deputy Commissioner for Policy.

[FR Doc. 95-29904 Filed 12-7-95; 8:45 am]

BILLING CODE 4160-01-F